The Ramsey Show - App - How Do I Talk to My Wife About Contributing More? (Hour 2)

Episode Date: April 5, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw this hour. Open phones at 888-825-5225. Don't be scared. Give us a call. by Jade Warshaw this hour. Open phones at 888-825-5225. Don't be scared. Give us a call. And if you're younger,

your phone does make phone calls. I found out. What? There's a button that says phone. Hit that and then dial 888-825-5225. You can talk to us. Interesting. So you have to dial a number.

Yes. All y'all sending me the DMs with like nine paragraphs. I'm telling you, call the show. This is the best way to get your financial questions answered. That's what we're here to do. Nikki was brave enough to call in and she made it.

What's going on, Nikki? She's in Denver. How's it going? It's going good. How about you guys? Doing great. How can we help? Okay.

So my husband got a workers' comp settlement for injury. And it's about $100,000. And so we took they just automatically put us in bi weekly payments. So we're getting about $1,300 for it every two weeks for the next three years. We currently have a school loan and a car loan left in debt. And so our question is, should we take the full payout of the settlement, which would cost us 4% of the $100,000, or should we keep doing the biweekly payments? Because we could pay everything off and have our emergency fund if we took the full payout now versus like the biweekly. So I'm kind of curious your guys' opinion. It costs you 4% to take the full $100,000? You're talking you'll take a $4,000 hit in order to get 90,

you'll get 96 essentially. Correct. I'm doing that. So we would lose a little bit, yeah. I feel like not only financially, but also emotionally, mentally, you're going to be in a very different spot. Yeah, plus for many reasons, because you'd also get used to having this pad in your budget that's not real per se and then when it's

gone it's like oh that's a total lifestyle shift and if you can take that money that 96 000 what can it clear tell us tell us all the debt and stuff so we have a 30000 car loan that's at a 6% interest rate, a school loan that's $46,000, so a total of $76,000. If we budgeted, we could have those paid off both in about a year with the settlement, and then we'd still have about two years left getting that biweekly. But if you paid it off now, you'd pay off the car, the student loan, and you'd have $20,000 to put towards Baby Step 3. Correct. Do you have an emergency fund? No, we've been kind of stuck on Baby Step 2 for several years now. So this is kind of like our jump of like we could get past all of it.

And then we would just have our mortgage left after that. Yeah, what's the mortgage? Mortgage, we have $300 left on that. We've been paying a little extra to it. So we have $2,000 a month that we pay towards that. I love that. If I woke up in your shoes because of the situation you're in, I would 100% use that money. The $4,000 to me is very negligible in this whole equation. I'd pay off the debt. I'd put the rest aside and whatever else you might need to call it three to six months of expenses. And then I'd start baby step four, investing 15%. Perfect. That's what we're doing. And the other piece of this, you have 20 grand at the end of this that you put in a high yield

savings account. That'll make right now 5%. That's $1,000 in a year. That's great. That you would make. Perfect. And so that on top of the interest savings from not having to pay interest on these payments and freeing up those payments, which have you done the math on what that adds up to? What do those payments amount to each month for the student loan and car loan? Just $900. We've been paying a little extra to the card too. Just $900? If someone gave me an extra $ bucks i've been doing backflips yes oh so think about it that way you're getting a forever you're getting a forever 900 raise just by getting rid of these payments that's right right so that on top of the high

yield okay we've convinced her we're done well our job here is done i want to caution you nikki uh one thing i i hear there's just been a couple of little things that you've said that I'm like, listen, you're not doing the baby steps in order. You're kind of still doing your thing. I heard you say that you're already investing. I heard you say that you're already putting extra towards the mortgage. Do the plan the way the plan's written and you're going to get further faster. Because right now, you're just trying to put money on all these things that are really important things and they are important to do. But you go further faster when you know what the priority is in the moment and you do that thing and then you go to the next one. So just a caution with that. Make sure now that you're

officially in baby step four, make sure that you're investing 15 percent, no more, no less. Make sure that if you have kids, you're also putting a little towards kids college. You and your husband can figure out how much that is. And then after that, you're putting extra towards the mortgage. So don't kind of say, well, we're doing the mortgage, so we're going to do less investing or we're going to do more investing. So we don't have to do the mortgage. Just make sure you're doing them in order. And if you have questions about that, we can also talk about that as well. Okay, perfect. I know my husband has a, it's a mandatory 12% match. So we automatically have that regardless of whether we want to or not. So that's been going for the last.

Well, make sure you add your 3%. Make sure you're still investing up to 15%. And the reason we say that you might think, well, Jade, there's the match. But if he loses that job and doesn't have the match anymore, you guys are not in the rhythm of investing 15% of your money. So we want to make sure that you're still doing yours and everything else is gravy on a biscuit.

And if you guys have too much in your nest egg later on, you can call back and yell at us about how you have too much money. I have too much wealth. It's a good problem to have. No, I think that is perfect. We put in the paperwork to do the buyout, so hopefully all of this will be done soon.

But I appreciate your guys' advice and taking the time. Yeah, I hope your husband's doing well, too. Final question, how's your husband doing? He's doing good. Yeah, he had two discs replaced in his neck. He's a firefighter. But yeah, it ended up being a very lucky scenario and it was awesome that his work took care of him. So he's in a

good spot and doing well. Awesome. Well, wishing you guys the best on this financial journey. That's a good problem to have. Yeah. An extra a hundred grand just came about and we just knocked out all of our debt and that's our emergency fund and we're ready to invest so i'm gonna leap just emotionally mentally to leapfrog and not have this year of sort of just deep sacrifice yeah and be at that spot i'm doing it i think it's good you there is the piece of that though where you have to do an extra layer of work to make sure your behavior has actually shifts you know and that's why I kind of called her out on, hey, you know, you guys are having this windfall. Obviously, it was at a cost to her husband's health, but don't let that convince you that everything's like hunky-dory because there is some mental work and behavioral work and, I mean, obviously, sticking to the plan

work that still has to be done that she doesn't had she did not have the benefit of walking through a process to get there yes when you build those habits and discipline you have that deep sacrifice it changes you your physiology changes the way you look at money changes versus hey we just got a lump sum let's pay off the debt and let's keep living on more than we make right that's also a bad plan yeah Yeah. It's interesting. There's that gradual change that happens mentally. And for her, it's going to be lickety split. Yeah. She can do it though. Like I have nothing but confidence in them.

They seem like very smart folks. Got a good head on the shoulders. Yeah. Oh my goodness. Well, hey, the baby steps work, y'all. You got to do them in order, but they work. Don't do ish and then call and say, hey, your plan doesn't work. Well, you didn't do it. You got to go all in on the plan and it works every time you work it.

It's called the Ramsey Baby Steps. If you want more info, go to ramseysolutions.com, hit the get started button, and we will help you out. More of the Ramsey Show right around the corner. We'll be right back. Hey, you guys, health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay

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slash budgets at chministries.org slash budgets. Welcome back to the Ramsey Show. I'm George Campbell joined by Jade Warshaw. We've got some fun events coming up. It's about to be game on. We got three events where you can experience Ramsey teachings live and in person with thousands of other people just like you. The big dog is Total Money Makeover Weekend. It's happening May 10th and 11th right here at the headquarters up the hill at our new event center. And it's two days. We're going to motivate you, fire you up, help you live the life you always wanted. So join us in Nashville.

Leave the money stress at the door. All the Ramsey personalities are going to be there, including Jade, Dave Ramsey, Dr. John Deloney, Ken Coleman, Rachel Cruz, the whole gang. Love it. It's going to be fun. The big dog. That's what it is. And then just about 10 days later, we have a virtual event.

It's Dave Ramsey's Investing Essentials for two nights. It'll be about two hours each night. I'll be joining Dave. He's going to unleash his personal playbook on investing, on real estate investing. We're going to help you unpack some of the basics about investing, deep dive on 401ks and mutual funds and some other investing options you may not know about to help you invest and build wealth with confidence. You can join us for that one as well, wherever you are. Here's your challenge, George. Uh-oh. What is it? First, you said big dog.

Then you said unleash we've got it we've got a pet theme going so let's get it with money and marriage you think of this one money and marriage getaway happening this fall so you got time to plan for that one uh and don't don't be barking up the wrong tree if you miss out on the tickets for this one okay they're gonna they're going quick money and marriage has become its own brand and event and people love this it was an incredible event last year. Jade and I both spoke. I don't know if they'll invite us back this year.

I hope they do. But this is a weekend away with your spouse to focus on your marriage as it relates to your money, of course, with great teaching from Dr. John and Rachel, real-life answers to your hard questions. They don't shy away. No, they don't. And the scary stuff. They're going to get up in your business to help you win in your money and marriage. You walk away with tools you need to build that deeper connection

and win with money together. So if you want to attend any of those events in person, the virtual one, go to ramsaysolutions.com, learn more, get your tickets today, start putting this in the budget, the travel, the transportation, get a ticket for a friend or a spouse that tells you, you know what? I believe in you. I believe in our marriage. I want you to win with building wealth, and that's a great gift to give right there. RamseySolutions.com slash events. All right, let's get to the phones. Manuel joins us in Grand Rapids.

What's going on, my friend? How we doing? Good. How are you? Good. I just have a couple of questions. My first one is I am a father of two and a husband, and my wife has been a stay-at-home mom for about a year and six months now,

and I'm just trying to figure out what's the best way to bring that conversation up of going back to work because we're a family of four on $43,000. Yikes. How old are the kids? One in six months, but we have a lot of family and friends in our church and in our family that would watch them for little to none. Uh-huh. So you're making $43,000 and what type of work do you do? I do environmental work work so I took this job because I got laid off from my last job um with a guy that I go to church with and it was just like a spur in the moment and I I can't afford to miss like any work so I was just what'd you make it your last job I got what'd you make it your last job 56 okay so you know that you have the potential to earn more but right now it's just,

I got to take anything until I get the job, right? If I understand. Yes. Okay. Now your wife, what was she doing before she started staying home with the kids? She's a cosmetologist. And what was she earning every month? I think like 15 to $2,000 a month. So she's earning hourly and commission. Okay. So she's earning 2000 a month. So how much debt do you guys have? I, I brung in the debt of a truck of, um, it was 31, but I've got it down to 27,000. Okay. What else? All the debt that we have.

That's it. Oh, this is solvable. What's the truck payment? Uh, 530 a month. So if you had an extra $5.30 a month, would things be better? Would she be able to continue staying home? Things are just like super tight. I pay $5.30 for a truck, and then my insurance is $4.18. But if you got rid of both of those things,

let's say you sold the truck. Now you got basically a thousand bucks freed up every month. Uh-huh. Would that fix your financial situation? And let's say you got your income up a little bit too. I'm just wondering are there other paths here? I would rather you sell the truck

than your wife have to go back to work if she's truly wanting to stay home she she really is wanting to stay home but I've just I've brung up the conversation just because of how tight it is right now the question is here's my question from her perspective did you guys speak about what the plan would be once she had the babies was it like hey we're gonna have these babies I'm gonna stay home and you were like I'm good with that so is the plan changing or did this kind of happen by default she had the babies and realized she likes being home and now she stayed home and you're kind of like hey we never discussed this which scenario is it we we we discussed it but it wasn't like a for like her the stay-at-home mom for like a forever time

okay it's like a timeline and then I mean and what was the timeline later we had our daughter okay it was like we had been together for two years we've been married a year um but we were together for two years and then we had our son and then three months later she got pregnant again with our daughter so they're 11 months apart. And it's just like. And are you guys on a budget right now? Are you working a budget or is this just kind of chaos right now? I would say we have a written budget, but we don't really stick to it.

So it's kind of just like chaos. What I would say, I want you guys to get on EveryDollar. And if you don't already have it, Christian will pick up and make sure you guys have it. Or at least go to EveryDollar.com slash Jade and get. I want you on the premium version because I want you to have all of this in your arsenal here. I want you guys to sit down and do the budget tonight. I want you to go over it together. And I want you to go over two versions.

One version, which is as it is today. And for both of you to see, here's what it's going to take. If you want to stay home and at work, here's what it's going to take. And then the other one is, here's what it would look like if you worked X amount of hours, because I do think there could be a happy median in between her staying at home and working. It doesn't necessarily mean that she's got to go back to a 40 hour a week situation but you guys have to run the numbers and each of you see it and see what your options are because i feel like there's three options stay at home do some kind of part-time situation

or she goes back full-time and the numbers are going to tell you guys what works best for you we've talked about that and we've had a couple of people tell us like yeah we'll watch them like three or four times three or four times a week, and then she just works because we only have one car at the moment. The truck? So it's just... The truck's the only car? Oh, okay.

What's the truck worth? Yeah. About $17,000. Why is it only worth $17,000? Did you roll negative equity into this? That's what Kelley's rulebook says. Yes. Oh, man.

So I had a Kia before this, and we were having another kid, and we were just like so certain on getting a bigger car. And so I was literally like four payments off from paying the Kia off. So I sold it for like $3,000 or $4,000 more than what I owed it. So then I paid off what I owed and then all the money that I got back from that, I poured into the truck. Well, not necessarily a pour. You dripped it into the truck and took most of it on loan. Let's be honest. Yeah. You bought way too much truck manual. Way too much. Oh, I know. And I regret it every day. And I would rather see you sacrifice to get rid of this truck instead of sacrifice to

harm your wife's well-being and her dream. And so that might mean you go side hustle your way for the next few months, scrape together 10 grand, sell the truck to get rid of the loan, and then you scrape together another five and get a beater car that gets you around for now. Well, yeah, i thought about that and then i also was talking to my wife when we were doing numbers last night was if i like door dash for nine months every day after work i'll be able to pay off my truck in six to nine months depending on how aggressive i want to do this so that's like we're just throwing out options i'd also

look at getting a different full-time job where you're making $56 or more again. I don't want you to get too comfortable here. Just side hustling. If you can get your core income up and then side hustle, this speeds up the whole process. Start looking around your house and seeing what you can sell. Look at everything. Suddenly everything has value. Something's going on Facebook Marketplace.

It's going on Oleo. It's going everywhere. So get this thing cleaned up quickly. I would make some deep sacrifices and revisit this conversation six months from now and see if it's still the right move for her to go back to work. But I wouldn't just do it today. Not with a six-month-old. That puts this segment in the books. We'll be back right around the corner.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. The number to call is 888-825-5225. Headed to San Francisco up next to talk to Nathan. What's going on, Nathan? Hey, guys. Thanks for taking my call. So I really am seeking some financial advice. I'm originally from the Nashville area, and I've been living and working out here in San Francisco for about eight years. And my wife and I, we kind of know that even if we could afford a house in San Francisco or the Bay Area, there's no point in us spending a million dollars on a two-bedroom house.

It's just not, you know, we come from somewhere else and we see what that money can get you in other parts of the world. So we're thinking about buying a house in Nashville while we continue to live here and work and try to pay it off or rent it out. And right now we make about $160,000 before taxes. Our monthly bills is probably about $2,600. I have $30,000 in student debt still, and my wife is going to graduate from university in May. And we've been able to save and pay $25,000 a year, so she'll graduate with no debt. Way to go. Yeah, thank you. So we're just trying to figure out, like, we kind of know San Francisco is not our final destination. We know that we'll end up moving.

And the other part that sort of complicates this is my wife is from Germany originally. So we flirt with the idea of moving to Europe. But I, as an American, like, I really want to have a place to call home. And we have $20,000 saved up right now. And the plan is once she graduates in May, we'll start using any extra money to go ahead and pay off my student loans, the remaining $30,000. And within the next maybe two, three years, I think we could save up, you know, like $80,000 to $90,000 to use as a down payment for, you know, maybe like a $400,000 house in Nashville. And, you know, I've got friends in the area. I've got family. I will try to rent it to

one of them and just see if they could pay the mortgage or I'd get some property company to try and help take care of that for us as well. I just don't know if that's... So you'd buy the house and go to Germany for a while or you'd buy the house and stay in San Francisco for a while? Stay in San Francisco. Yeah, I have a pension on my work and the longer I stay, the better it is. OK, I think that you guys have some choices to make here. I would not, to broadly answer your first question, I would not buy a house in Nashville, rent it out for years until you're ready to move I wouldn't do that for many reasons one is which one in which I would wouldn't own a rental someplace where I didn't live two I wouldn't want somebody living in my house for four to six years and then

me coming home to sloppy seconds and it's my first my first house ever and then two I just think that I you're not ready to buy a house um yeah and so you guys have to decide what life you want and if you truly want a life in Nashville I would be talking figuring out what does that mean for us to make this happen after May like after she graduates how quickly could we move our life what kind of work do you do yeah well I work at as a technician in a hospital owned by the University of California, and she's going to graduate with an international business degree. Can you both do your work in other states? It sounds like it. We could, but the compromise would be that if I were to go work at Vanderbilt, I would probably make $25 to $30 less an hour. Okay, but you're also

living in a different market. And so the reason that you earn more in California is because it's a more expensive state. So there is some balance. They also have no income tax here in Tennessee, as you know. I know. And also low cost of living. So I think it might be a wash is all I'm saying. Yeah, you know, that's true. The thing that I, we're super fortunate, you know, I, to the house that we were in now, I actually put my own listing on Craigslist and said, hey, this is who we are. This is how much we'll pay. So we have a two bedroom here in San Francisco and we paid $1,900 and that includes utilities, which is like unheard of.

I mean, that's excellent. Like how are you only having $2,600 a month total in expenses in San Francisco? That's crazy. That's excellent, but that's not where you want to be. And it's a rental. I know, I know. So everything you've described is just like golden handcuffs. Like, well, I got to stay for the pension and I got to stay for the rent, but I don't want to live here. That's what I heard.

Yeah, essentially. Essentially. I can't justify it in my own mind to like, you know, what would a half a million dollar house get you in Tennessee versus... Honestly, right now, it wouldn't get you much. I don't know if you've been in Nashville lately, man, but it is tough cookies around here for a $400,000 house. But it's going to get you more than it would in San Francisco. Yeah, and that's the thing too. I think, okay, I've got this California money, and I'm still living on a really reasonable, like, cost of living month to month.

And so is it smarter to me to, like, use this California money and invest it while, you know, the market is lower than what it will be in potentially five to 10 years when we move back home? I think the baby steps still apply here. And that means, you know what, the 20K savings, we're going to take down to one. We're going to throw 19 at the student loans. We're going to get rid of these student loans faster. When she graduates, she'll help beef up the emergency fund, and then we'll start saving up for that down payment, whether that's in California or Germany or Nashville.

Just start stacking up cash. Got it. And then when you're ready to make the move, you just move, and you don't let that career, that job, that rent price dictate the rest of your life. That's my worry. Yeah, definitely don't let your pension be the dictator here. Because, I mean, you're not that old. How old are you? 31. Oh, yeah. You got plenty of time and life to invest and create your own pension through Nest Egg.

Yeah, there's so much noise from the outside. Like you hear people talk and they say, okay, well, you're not going to have social security by the time you graduate. Yeah. But you, you, you have a job and you make plenty good money. Your wife does too. And the quicker you do these baby steps, like George laid out, the quicker you'll be investing 15% of your income every single month. And that's going to stack up. You're a young guy. You've got a lot of time on your side. And I would not be concerned about that. And to your point, a lot of it is noise.

So many people talk and they're not doing diddly. Or they hate their job. And they're like, well, I got to have my pension. I'm like, that's not who you want to be. Yeah. George and I know the stats. We know the stats. And a lot of people are not walking the walk.

They're just yapping. So don't let that phase you. Yeah, definitely. All right. We know the stats, and a lot of people are not walking the walk. They're just yapping. So don't let that phase you. Yeah, definitely. All right, well, thanks, you guys. I appreciate that. Yeah, man, absolutely. Best of luck coming back home here in Nashville.

Love it. Stephanie's up next in Milwaukee. What is going on, Stephanie? Hey, guys. Thank you for having me on. So my husband and I are wanting to get a new car for safety reasons. And I just kind of wanted to talk to you guys and see if it sounds rational or we're just trying to buy a new car because we want it. Tell us about it. I love this.

So we live in Wisconsin where it gets really snowy. So half a year, it's kind of difficult driving around if you don't have four-wheel drive when it's all icy and snowy. I feel that. And then we also have a one-year-old daughter so Stacey has become you know more of a concern especially driving her around in that type of weather. We have been sharing a car for about three years so we do have one nice reliable car and we both worked from home but now my husband is working outside of the home so the other car that we have is a um kind of an older car that don't feel super comfortable in um and that's the car i would need to use to take the baby around what when you say older i want to

know details uh so it's a 2000 toyota van but it does only have 75 000 miles on it okay and it just doesn't have four-wheel drive that's the only thing uh yeah and just with it being you know 25 years old it just there's a lot of rust on it and it just it feels kind of unsafe like something could break at any point okay so tell us now the financial snapshot. Tell us, you've got the nicer car, is that one paid off? It is not. It is a 2021 Toyota RAV4, 45,000 miles, 15,000 still owed on the loan. Okay, 15,000 on that one, and then of course this older van is paid off, I please believe. How much money do you have? Well, we do have a good income uh but we do have some debt we're trying to pay off and we do have a bit in an emergency fund too okay what's the income and what's the

debt total debt uh income income is about 200,000 a year um between the two of us how much total debt do you have real quick oh about 100,000 most is student loan okay oh my goodness and you have money saved you said how much saved uh twenty five thousand emergency fund okay it's not really an emergency fund that should have gone towards the debt if you were to sell the car if it really is in bad shape and you could sell it and maybe get a couple thousand for it and put another couple thousand for it i'm fine with you spending $5,000 to upgrade this car, but I wouldn't spend any more than that. I'd keep it, honestly, if it were me. I think Mama drives the RAV4.

He sells the van and gets him a little beater car to get around it. That's what I would do. Mom always gets the nicer car. That's the rule in our house. Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. Open phones at 888-825-5225. Well, Jade, it is Financial Literacy Month, and one of the ways we're celebrating that is taking questions from students at high schools that are teaching our Foundations in Personal Finance curriculum.

And today's question comes from a student in Carrollton High School. What do they have to say? Yeah, he says, how do I find motivation to budget when I can't find it? That's a good question. It's like car keys. I just don't know where I put that motivation. I don't know where I left it. I love that he's thinking about this. You know, in high school, I...

I didn't have motivation at 16 to budget. Not to budget. I mean, do homework, practice volleyball. Not budgeting was not in my my thoughts there but um I love that he's thinking this way you know if you can get in your mind very early on the three things that you can really do with money which is give it save it spend it and if you can do that in the proper ratio at that age I think that you're ahead of the game like if you can say okay I'm working at McDonald's or I'm working at Kroger, I'm bringing home my minimum wage and I'm going to give some of it.

For me, that was in the form of tithe. So I was giving my 10% tithe and then I'm saving some of it because listen, I want a car. Like I want to have a ride when the time comes and I know college is coming up. So if I can save a big percentage of that, and then of course, keeping aside some of it to spend and have fun with, you know, when you work hard, you do want to see some of the fruit of your labor. So honestly, Carlton, if you can do that, you are ahead of the game, my friend. Yeah. The way I look at this is showering. How do I find the motivation to shower? You don't, you just get up and you shower. It's just part of being an adult, right? He's not an adult yet.

Well, you know, but he probably has, you know, there's some people in the picture. Maybe he wants to go on a date, ask someone to prom. Well, then he definitely needs to shower it up. Yeah. And so that's how I see budgeting. It's just a habit and discipline you want to build. It's not this thing like, I got to find the motivation today. You go, what are my goals and what do I need to do to get there? And the budget becomes a part of that. So if you don't have income and you don't have expenses, then a budget isn't going to do much for you because it's hypothetical. But if you're working and you've got some income, you have some savings goals, I got to save up for the summer camp or that first car. Well, then the budget becomes very important. Yeah. And it just becomes a scoreboard of how we're doing and if we're on

track. So that's the better way to look at it versus this, I need the motivation, Jade. Yeah, that's true. It's really the means to the end to get the life we want, whether that's a vehicle or a class ring or, you know. And when I was working at 16, 17, I was a knucklehead. I was spending every paycheck at my retail jobs, had nothing to show for it. And I wish someone had showed me the investment calculator of hey i just put 20 bucks away today at 16 what will that be when i'm 66 then i'm going okay there's my motivation yeah no i had no i i wouldn't even known the words that were coming out of your mouth when i was in high school i was like let's go to hot topic man let's do this thing hot topic let's hit the movies topic

yeah thank you for that you're welcome i like the movies. Hot topic. Thank you for that. You're welcome. I like the combination of hot topic plus the hot pocket. It was good. It's very high school. Meant for those that understand. Jade speaks in parables. I love that.

Let's get to the phone lines. Adam is in Ann Arbor, Michigan. What's going on, Adam? How can we help? Hey, George. Hello, Jade. Thank you for taking my call. I appreciate it.

Sure. All right, real quick. The question is a straightforward one, but not a simple one. Do you think I should sell my house in order to pay off the majority of my debt? Okay, let's hear more. It's a big question. So give us your financial picture. How much do you make? What's your total debt load? Are you married? Make $68,000 a year. Take-home pay would be about $4,000 a month. Single, don't make enough money for anything else. Debt is $90,000. What kind of debt is that? Two debt consolidation loans, a car note, and a small credit card. How much is the car?

The car is $27,000. And what's it worth? If I look at Kelly Blue Book, best guess, $20,000. Okay, so $7,000 upside down. Okay, and what's left on the mortgage and what do you owe? Mortgage is $148,000. $148,000, and what

is it worth? Looking at the offer comparables, offer I got through Opendoor, I think I could reasonably get $240,000 for it. When did you buy it? 2021. Okay.

How long have you been working the baby steps? About three months. And what's causing you to say, I can't pay off this debt. I got to sell my house. Looking at the budget, looking at the income versus expenses and realizing that they're not quite, that they're not balancing out like they should. So tell me what percentage, tell me what you're paying every month for your mortgage. I want to see where the percentage lies.

This year, $1,100 per month. Okay. So that's fine. I don't think this is on fire, Adam. I think you can pay this debt off within about two years if you can get that income up with a side hustle, and that's kind of the parameter. If this would take you 10 years to pay off and selling the house would help clear that much faster, I'd say this may be worth selling, but the monthly payment is about 25% of your take-home pay. That's a green flag to me. Me too. You've got $90,000. If you can put $45,000 toward it per year, it's done in two years.

And you've got a good rate on your mortgage. That's going to be hard to go back on. Yeah, that's the hesitation, yes, we share. I would pause on selling this, and I would aim to pay this off in two years and then that becomes the gap to fill with income and getting your expenses down to create enough margin to do that. $45,000 a year, that's a lot. It is a lot.

But that means we have our $68,000 income. We're going to go find $25,000 worth of side hustles. That's $2,000 a month in side hustle. Can we find that? Yes. I'll help you out. The answer is let me remind you adam you're single now's the time my friend adam all right so i need to find a what do you do full-time for work we'll help you uh logistics manager okay so you're in, you're working 40 hours a week? Yes. Any opportunity for overtime?

No. Can you do any consulting with that? I don't have any experience with that, so that would take... I don't have any clients for that, so I'm going to say no. Well, I mean, you're in logistics, you have experience with that. You don't have experience doing consulting for logistics, but I'm just saying, are there any opportunities using your current skill set? And beyond that, you have a driver's license.

We can always look to DoorDash, Uber, retail jobs, serving, whatever it is, to go make $20 an hour. You're talking about a big sacrifice by selling your house. So I'm shocked that you're willing to sell the house to make that huge sacrifice but going oh side hustle hey i'm i'm a chime in here i think that you were hoping that there was an easier way out here and now george and i are telling you your opportunity looks a lot like work and now it's like ah and it's you know you can wander into debt but you can't wander out so

there is this part where you're gonna have to get very intentional it's gonna make a lifestyle change you're gonna feel it over a long term with the sell of the house it's like you feel it right away and then you move into your rental or whatever and you're like okay my life is pretty much the same but with what we're talking about is two years of real sacrifice and you're gonna be better for it in the end, but I don't want you to be afraid of work. I don't want you to be afraid to say, yeah, for the next two years,

I gotta make 2000 extra dollars a month. And I don't want you to be afraid of the number $2,000 because when you really look at it, I mean, if you took your extra time a couple of nights a week, you took your Saturdays and Sundays and you said at the very least, okay, I'm going to do Amazon delivery. I'm going to do Instacart or whatever, you know, kind of those, those go-to side hustles are, you're going to find the $2,000. You're a single guy. You don't, you know what I'm saying? Unless you have pets to get home to, you've got a lot of time on your hands and that's a blessing my friend it seems like a lot for 20 hours that's listen it's your life

it's your life if you don't want to do it nobody's gonna you know put you in a headlock to do it but you called us saying that you want to get out of debt and so we're going to tell you what it takes to get there the house truly isn't your problem. I wouldn't have done in that order, but that's not the problem. The problem is we went $90,000 into debt, making 68. Now you can sell the car and get a beater car. That's another option to help speed this up. And Adam, let me tell you, head to this website, georgecamelwithak.com slash side hustle quiz. That will help you figure out the right side hustle for you based on your time and your skillset. And America, I hope that helps you. GeorgeCamel with a K dot com slash side hustle quiz. That puts this hour of the Ramsey show in the books. Thank you

to Jade Warshaw, my co-host, all the folks in the booth keeping the show afloat, and you, America, we'll be back before you know it. 🎵