The Ramsey Show - App - How Do I Use the Proceeds From a Farm Sale? (Hour 1)

Episode Date: December 30, 2021

Debt, Insurance, Retirement, Relationships, Budgeting As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE  

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. George Campbell, Ramsey Personality, is my co-host today as we answer your questions about your life and your money.

Open phones at 888-825-5225. That's 888-825-5225. Deanna's in Austin, Texas. Hi, Deanna. How are you? I am well, sir. How are you? Better than I deserve.

What's up? Well, we have an 18-year-old granddaughter that was in a car accident many years ago, and she has started receiving quarterly checks from the insurance company when she turned 18, and she will receive those until she's 21. And she has come to us asking us questions about what we think she should do, if anything, with that money other than just putting it in her bank account. I love this kid. She comes to us because we are debt-free,

and therefore we're able to, I think, give her probably a little bit better, hopefully a little bit better advice. But since I really don't have an answer to this, I'm coming to you. Absolutely. Well, she's got a good head on her shoulders because she's actually asking for advice, which is rare from an 18-year-old. So I'm impressed. Yes.

Is she okay health-wise? Yes, she is. Okay. That's good news. So how much is this quarterly check that comes in? It is $3,700. Okay. And then... She will end up around $32,000, somewhere around there by the time she turns 21.

Okay. That's great. And do you know her plans as far as kind of next steps for her in life? Is she planning on going to school? Is she joining the workforce? Yes, she is. She actually has a little job, but she will be transitioning out of that. She's going to cosmetology school, which her grandfather and I will be helping to pay for. So her question is, really, does she spend part of her money? Because we're paying for half of her cosmetology school, which is the total is about $16,000. So we're going to pay for half. And her question is, should she pay for the other half with that money, or should she go ahead and work as much as she can, I guess, in the hopes of trying to pay for it, which I don't think she can

because school is Monday through Friday, eight to five. Or should she try to borrow that money to complete the other half? Well, I'll tell you one option that is off the table, and that is borrowing money. The first two are fine. I mean, I like her continuing to work, and if she can't cash flow it, I mean, these quarterly checks are going to do it for her. And so I see no problem with her using that to cash flow cosmetology school, get on her feet. I assume after that, she's going to live on her own after cosmetology school. Is she at home right now? She is at home. She lives with her mom, and our hope is that she will move out onto her own at that point, that she completes school.

Once she's out of school and has a job in cosmetology? Yes. Okay. Well, what I would do is cash flow this thing. There's really three things you can do with money. You can spend it, you can save it, and you can give it. And so I love her really learning how to be generous at a young age, and I love her having some fun because she's 18 and she needs to have a life

and go out with friends and do all the's 18 and she needs to have a life and go out with friends and do all the things 18-year-olds should do, and she should absolutely save a bunch in an emergency fund, and she can start investing as soon as she's in the workforce, which is not going to be a long ways away from now. Does she have any debt? She has no debt. Okay. Yeah, I agree with George. Let's just let her pay for her half through work and some of this money. The rest of the money is left for her to kick off her life with, and that might include buying a home later. It certainly will include having her emergency fund out there.

And the whole plan is the way people get into debt is they just don't think about other ways to do it, and so they just go sign up. And so has she got a car? She does not have a car as of yet, but that's also something that her grandfather and I had told her we would help with. So part of this money will most likely go toward helping her purchase a car at some point.

Cash on the car, cash on the cosmopolitan, cosmetology school, graduates with still cash in the bank, and starts her life debt-free with a decent car and a license to practice cosmetology. And here we go. Game on, right? Game on. That all sounds very exciting to me. I like it.

Do it. Execute. George is giving good advice. James is with us in Phoenix. Hey, James, welcome to the Ramsey Show. Hi, Dave. Truly an honor to speak with you. You too.

What's up? Well, my wife and I are 60 now, and so we've really, you've been an inspiration to us in so many ways. And so we had two cars that we got paid off, so we have no car payments. We've just refinanced our house, and we dropped it two whole points down to 1.875. Great. On a 30-year note, I did that on purpose so that if something happened, because we are older, that I'd have a cushion. So that's really helped us. But our question is, you know, the housing market has just exploded out here anyway in Phoenix. And so we now find ourselves

with about $230,000 in equity. So we're wondering, you know, like, I would love to get my hands on that equity because it's not my money till it's my money. So if the market were to crash, then I'd be back to wherever we were. So our question is, is how, in your opinion, how do we draw out that equity and not put ourselves in way more debt again, you know? Because we're in a really good spot, no credit card debt. So, really, it's just a house. And we pay $200 extra every week on the principal. Well, you don't draw out equity.

You get equity when you sell the house or you have equity in the house and you live there but there's no there's no way you get money there's no way you get money out of the house without borrowing i mean you could go refinance your mortgage and run the mortgage all the way up but i'm not going to tell you do that you knew that yeah we're just we're just really concerned concerned for our twilight years and you know that's about the only thing that we have that we can look forward to i have a small 401k um nothing really to brag about um got you know about 25 000 as a reserve emergency fund in cash that's good but other than that we don't have anything you got your first three baby steps done are y'all still working oh yeah i don't think i'll ever retire okay then just let's you're on baby step

four let's start chunking money on that uh into that retirement 15 of your income going into there you do that for five or ten years you're 60 that puts you at 65 or 70 you're going to have increased your 401k substantially by the end of your roth iras now where do you think that the best benefit would be should we stop paying the 200200 extra weekly in principal payments to the house and put it towards retirement or continue to pay the house down and use that as our pay-for? Dude, you've got five to ten years to get the house paid off and build a nest egg. Yeah, because our goal is to have the house paid off in ten years. Yeah.

So baby steps, baby step four is 15% of your income going into retirement. Five's kids college, that's not in place. Six is pay off the house early. And if you want a good, solid retirement, you have a paid-for house and an estate. And you've got 10 years to do that. So you need to aim at that. And it's not going to be $200 a month extra. It's going to be more than that.

It's going to be 15%. You're going to be putting at least 15% of your income into retirement and chunking money big time on that mortgage. Get that stinking mortgage paid off, man. And then build your nest egg up even bigger. Imagine a world where people never have to worry about money ever again. At Ramsey Solutions, our mission is to teach people how to get out of debt and build lasting wealth. And if that means we have to take on the toxic money culture that says you need debt to get ahead, then we're okay with that. We've seen millions of lives changed and we

will continue to create digital products and services to help people transform their lives. If you want to join me and over 1,000 other team members on this crusade, we're currently on the hunt for web developers, UX designers, and SEO and content marketing specialists. To find out about these positions and more here at Ramsey Solutions, visit ramseysolutions.com slash careers. That's ramseysolutions.com slash careers. Together, we will disrupt the toxic money culture in America and change lives. Visit RamseySolutions is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225.

You jump in. We'll talk about your life and your money. Max is going to start off this hour in Knoxville. Hey, Max, welcome to the Ramsey Show. Hey, Dave. Thanks for having me. Certainly. How can I help?

Well, you know, wife, we're looking to sell our farm. We're coming up here in a short time. And with our expected conservative numbers projected to profit after we pay off the mortgage on it and capital gains, it's going to be around $550,000, maybe $600,000. I hate it when that happens. Yeah. Wow.

Yeah, it's a good problem to have. So our question is, what should we look to do we're working our way through the baby steps four five six uh with our kids college funds etc and retirements we've already maxed out the retirements for the for this year um and we have 529 plans but only have about five thousand dollars in each of the three three plans for each of our three young children. But our idea was maybe to front load those 529 plans off the bat and get that done on the front end so we don't have to contribute anymore. Yeah, I like that. One less thing to worry about, right? Yeah. What is projected? We were looking, you know that their college is in roughly 16 years

from now we're looking maybe um a target of say 150 000 each kid uh when they get to that age uh is that a where do you get your projected numbers from of what college may or may not be well of course god only knows right i mean there I mean, there's no way to know. The inflation rate is about 12% on tuition. I'm sorry, about 7% on tuition. The inflation rate on everything else runs average about 4%. So if you want to use a 7% inflation rate, you've got about a $12,000, $10,000 average in-state school tuition right now you could run that out so it's 40 grand right now plus uh plus room and

board plus seven percent inflation rate and you can sit down with your financial advisor and project that for the number of years you've got left and then do front load those but it won't take 10 or 15 grand out of this 500 you still got a lot of money left after you do that okay um and then the other the only debt we have left um on us is our uh home mortgage in which we owe roughly 600 000 on that yeah um what's your household income? $300,000 a year. Man, you're just killing it. Way to go, dude. This is all good news all around.

Yeah, very blessed. Yeah, very blessed for sure. I love the idea of you paying off this house. I mean, you're saying the kids got 16 more years before they head to college? Correct. I mean, with that kind of income, you've got 16 years to invest. I don't see anything wrong with paying off the house. It sounds like you could do it once you sell the farm would you have enough

yes we would have enough we'd have rough i mean if we took just the conservative numbers what we think will profit after this we could definitely just pay off just the house we have you know i have other taxable accounts that um if needed, we could draw some money out of, but we were more of longer just monthly checks. We would just finish whatever is needed. So because your income is so ridiculously wonderful, I'd write a check. I'm with George. I'd write a check out of the form and pay off the house.

That puts you at baby step seven. You have addressed baby step five. I'm not skipping a baby step because you've got money in there for college. Then you just take $10,000, $20,000 out of your income, You have addressed Baby Step 5. I'm not skipping a baby step because you've got money in there for college. Then you just take $10,000, $20,000 out of your income, and you can still front load over the next few months or six months or something, decide to front load those 529 plans the rest of the way. So sit down with your smart investor pro or your advisor,

calculate what you need to take out of your $300,000 income and do that. And I'm with George now that we got a little deeper into this. Yeah, let's pay off that house. I mean, just if the kids are half as smart as you are i think they're going to be just fine and it's going to come down to college choice and what their dreams are but you guys have so much time ahead of you and you've done so well i love the idea of you not having a house payment and making 300 grand the kids are going to school debt free i'm just going to say it right now i'm not worried about it yeah yeah i think you're going to be okay because you're going to have plenty of money even if it's not in the 529 plan you're you're going to be very very wealthy uh with this income and no debt payments at all and you're obvious bent towards doing things on purpose with money

that's that's a big deal here and so very well done man touchdown congratulations this is very very cool i I'm impressed. You know, when you said that, it made me laugh. I hadn't thought about this guy in 20 years, but I knew this old guy, and he was kind of an old, you know, when you get old, you either get happier or grouchier, and this guy was the grouchy one, right? Oh, boy. And he's like, Ramsey, I'm trying to make so much money

that no matter how dumb my kids are, they can't spin through it, and I'm discovering that make so much money that no matter how dumb my kids are, they can't spend through it. And I'm discovering that it's not possible. That's what I thought of when you said half. They're half as smart as you. That's all you need. You can't make enough money to outspend really, truly stupid children. That's true.

We know the story of the prodigal son, Dave. You can spend a lot of money really quickly if you're dumb enough. All right. Dawn is with us. Dawn's in Indianapolis. Hi, Dawn. How are you? Hey, I'm doing great.

Thanks for taking my call. Sure. What's up? Well, I'm going to be 50 next week, and I'm really struggling with the state of the world and the division and how to navigate working, working part-time, working on the side. I've chosen to be unvaccinated as a personal choice. I just feel like the world is closing in. I'm on every dollar. I've been following you for four years.

I was very hardcore, and the last 18 months ago, I went through a divorce because of financial infidelity, lying about stuff. I thought we were paying off things and we weren't. So I kind of had to catch my breath and I started doing day dish. And I'm just, I almost feel like I only have $16,000 of debt, but I almost feel like I just want to like start saving my money and just feel like there's some peace in the world.

I don't know. So I just wanted some encouragement or to get some advice. It's not peace in the world that's the world. I don't know. So I just wanted some encouragement or to get some advice. It's not peace in the world that's the problem. It's peace in you. Okay. You got hammered, girl. You got hurt. And, you know, listening to you,

it sounds like you're emotionally holding your breath, like you're just trying to hold on and just not cry. And I've been there. I know how it feels. But you've been through personal emotional trauma this year. I have, but I'm strong. I know you're strong. I wasn't accusing you of collapsing.

I was just accusing you of being human. But I feel like I should go out and get, like, another job or do some stuff, and this part of me just wants to stay home and just get this debt paid off and just, I don't know. So why don't you put yourself on a plan that has a more reasonable pace and gives you some margin to heal because you're wounded would that be okay would that be okay to just absolutely let's just take your super supergirl cape off and hang it up in the closet for a minute okay and let's just let's just go okay i'm gonna take a year and breathe because I've just been through hell.

You guys were married a long time, weren't you? We did, and I thought we were almost to the end of our plan, and we paid off over $120,000 worth of debt only to find out that we didn't, and there was $60, 000 that i had a divorce and split and take with me yeah you'll be okay though you know how to do this it's having the gas in your tank to do it right that's true yes how long were you married 20 plus yes 23 yeah i mean this is this as uh as our friend dr john deloney says that you need to take a little time and grieve this what do you think george absolutely don and you you said you're turning 50 right i am yes i think you ought to

have a one hellacious birthday party you need to Don. You got a lot of life ahead of you. You're just getting started. It's halftime. Start dreaming again. Get some big balloons. It's halftime. Throw a fit. Stir up a ruckus.

Give yourself a little time, kiddo. You're going to be all right. This is The Ramsey Show. We'll be right back. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225. In the lobby of Ramsey Solutions on the debt-free stage in person. Ryan and Christina are with us. Hey, guys, how are you? Good. Good.

How are you? Better than I deserve. Where do you guys live? Around Rockford. Rockford. Illinois. Cool. Welcome to Nashville.

Thank you. And all the way down here to do a debt-free scream. How much have you paid off? Around $188,000. Woo! How long did that take? Three years and one month very good and uh your range of income during that three years around 180 and down to 120 okay wow okay there's a story

there what kind of debt was the 188 000 um mostly her student loans and then uh i had a rental property that uh i decided i wasn't making any money on anymore so we just needed to dump it off that works okay what do y'all do for a living uh i work as a security training instructor for a nuclear plant in illinois and i'm a nurse okay cool so that was from nursing school a lot of that? Yeah I had my bachelor's before I went to nursing school so then a bunch from just my bachelor's and then adding nursing school on top of it. Okay cool so tell us what happened three years ago that put you guys on this journey? I had heard about you in my early 20s and I worked as a CNA I just never had enough to get ahead and just a ton

of excuses. And then after I had my daughter, we were paycheck to paycheck and it just wasn't working. Um, you know, I wanted to stay home longer. I had to go back to work at six weeks with her and, um, just not being able to stay home like I wanted to with her. It just kind of disgusted me. So I decided to actually put the plan into work. Okay, cool. And so how long have you guys been married? In November, it'll be eight years. Okay.

All right. So obviously, Ryan, Christina comes to you and goes, this isn't working. I'm done with this. We're about to change some stuff. What did you say? If you want to give it a go, let's do it. I mean, I'm pretty easy going. I wasn't really 100% on board with it because given how I spent my money all the time, it was not the greatest, but it really worked for us.

I got on board pretty quick when I started seeing some of those smaller student loans drop off and just went full tilt. What got you guys on the same page? It sounds like you were kind of floating along like, well, all right, maybe, and she's kind of like, well, what was that moment where you guys said, we're doing this thing? We're all in. Once I started seeing all the loans drop off, it really kind of sold me like, all right, yeah,

we're definitely making progress on this, and we just need to stick to it to get all this done. So we just focused and went forward with continuing knocking off the loans as they went through, and here we are with no debt. Wow. Well, mortgage. Well, the mortgage. Yeah, but $188,000 gone in three years is stinking impressive. Yes.

I mean, you kind of make this sound like, well, we just kind of wandered along and then it went away. It's almost $200,000. It probably could have been done a lot quicker, but she's going to school full time as well for a nurse practitioner. Oh, that's where the income drop is. We cash flowed that and then IVF for our youngest was all cash flowed. Income drop was once she had him and COVID hit and with everything, the uncertainty of what was

going on. Uh, we were in a place to where with just my income, we were able to keep her home so she could spend more time with him and not rush back out to work, which was the start of this story. Yes. So, um, it just kind of went off full circle. And now she's back to work again. And we're just working on knocking the mortgage down. And then we're going to move out of Illinois and hopefully down your way. All right. Down here. Well, way to go, you guys. I'm so proud of you. Thank you. Very, very cool.

Now that you've not paid off one hundred and eighty eight thousand, after eight years of marriage, you learned to work together. You saw that progress. The progress sold you. Yes. There's nothing like winning to get you on board, right? Right. And this works. This stuff works.

And so now I'm on. Now that you've been through all of that and you're standing here with no debt except the mortgage, how does that feel? Good. Pretty amazing. Yeah. Huge weight off the shoulders yeah because you've been carrying that a long time i mean eight years you've been carrying it basically right well i've had student loans for ever yeah yeah and then some huh okay yeah all right turns out they're not good debt. No. Do not do it. Wow. What exactly did you guys do?

I mean, it sounds like there were some sacrifices that had to be made here. You couldn't live the way you were living. What's the key to getting out of debt? No vacations. Yeah. Be frugal. Yeah. Very frugal.

We just learned to manage our money and watch where it was going using the EveryDollar app. Leave the wants alone and just focus on the needs. What was one of those wants? You said, this is hard to give up, but I'm willing to do it if this is what it takes. I like beach vacations. She's really was missing out on these vacations. This is the vacation thing. There's a theme here.

Her vacations, me, anything firearm related. Had to put a lot of that on hold. Oh, you put off buying guns? Man, that's tough. He traded. I can give up the beach, but now we're getting... Yeah, okay. Oh, my gosh.

Well, now you're free, and now you can go to the beach and buy a gun. Yep. Or buy a gun and go to the beach, whichever one you want to. Yeah, it's all good. That's living like no one else, and so later you can live and give like no one else. So very, very, very well done. Good stuff, you guys. And you brought the kiddos with you.

What are their names and ages? Let's have them join you on the stage. Logan, he's 14. And then Michaela, my daughter, she is four. And then we have Wyatt, who is 10 months old. Ah, it looks like some cheerleaders in the action there. Grandma and Grandpa bringing them in. That's an excuse to come forward.

Very cool. Good stuff. All right, we got a copy of the Legacy Journey for you, because that's the next chapter in your story for sure. You've changed your whole family tree. Look at that great family. Ready to rock and roll, man. I love it. And a copy of the total money makeover for you to give away somewhere and pay it forward for someone ryan christina logan mckayla and wyatt from rockford

illinois 188 000 paid off in three years one month 180 to 120 in income And now back up again. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Oh, wow. This is how it's done. Wow. Powerful.

Family tree change, just like that. Just like that. Just three years and one month of some sacrifice this is what i stumbled into i would like to say i had a great epiphany and my intelligence brought it forward but i stumbled into this fact because i'm a math nerd and it wasn't it wasn't readily apparent to me but as i started working people, and it has been the difference in the Ramsey message top to bottom, personal finance is 80% behavior. It's 20% head knowledge. You've got to do something to modify your behaviors

or all of your freaking theories in the world don't work. And when he saw actual results by paying off the smallest debt, which he would have never seen if they'd have paid off their highest interest rate debt first. The debt avalanche is mathematically smart, Dave. Yeah, that's a bunch of crap, isn't it? So it paid off those smallest debts, and you know what it did? It got him engaged, got them both engaged. They started to believe, and that hope kicks in and throws gas on the fire, changes everything.

Oh, absolutely. And as you heard from her voice, they wanted options. And they realized until they got out of debt, they don't have all the options in the world. They have to do what they have to do. Yeah, that's exactly right. She was that idea to go to a beach vacation or idea to be able to be home with the babies. And when you're carrying around on your shoulders $188,000, it's a problem.

Yeah. Well, now they got all the guns and all the ocean time in the world. No payments, baby. That's what you can do. Sounds like a bad rock band. I love it. This is The Ramsey Show. Thank you. We'll be right back. George Campbell, Ramsey personality, is my co-host today. Open phones at 888-825-5225.

Thank you for joining us, America. We're so glad you are here. Wynn is with us in Houston, Texas. Hi, Wynn. Welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call. How are you? Better, Wynn. Welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call. How are you?

Better than I deserve. How can we help? Awesome. Hi. I'm a 25-year-old single guy. I grew up in Texas, went to college, got a master's in accounting. And then after college, I got a great job and moved to New York City for about a year. When COVID hit and I was a part of that group that, blessing in disguise,

kind of escaped the city and migrated back to my parents where I've been saving and working remotely and just saving really. And so I don't have a lot of expenses and I've put up about $45,000 in my 401k in addition to kind of $23,000 just sitting in a bank account. And I'm looking to move back. And so my question is, what do I do with that extra money? Is it worth buying a rental property in somewhere like Houston where I can maybe one day move back and I can be making a little bit of rental income on the side? Or should I just park it in an IRA or mutual fund

while I pay for rent in New York because I can't afford real estate in New York? So you're going to be renting in New York, and you're wondering, should I buy some property for fun as a rental in Texas with this money, use it as a down payment? And then maybe move back into that property one day in five, 10 years.

Well, you may need a little more than that. I don't know what the, I mean, you're in the Houston area? Correct. Yeah. I mean, you're a young guy and I feel like you're not sure where life's going to take you. I don't think rental property is a bad idea and you may turn that into a primary residence one day, but I just think there's a lot of life ahead of you. And I don't know that, you know, this is where you want to plant it right now with that chunk of change. Yeah, two problems. One is you're getting ready to go into debt on the rental property, and two, it's going to be long-distance rental. So if I'm in your shoes, I'm not doing it for those two reasons.

I'm just going to rent in New York for a little while and pile up cash, continue to pile up cash, until you figure out what your long-term game plan is. Somehow, i don't think you're in new york city for 25 years yeah i don't think you're there yeah and when you come back to houston or back to wherever you choose to come quote back to texas tennessee whatever it is that is when you would buy in that market and by then you'd have a really really good pile of cash you might even pay cash for your first house i I'd love that. If you did that. That's a possibility.

But, no, I would not own long-distance rental property, and I would not go in debt to do it. Two reasons to stay away from that. Sounds kind of cool. Sounds kind of fun. Until the renter doesn't pay. All right. Zachary is in Atlanta.

Hi, Zachary. How are you? Better than I can. You know what I'm trying to say. That thing, yeah. I got it. What's up? So I have a couple things going on.

First, I've been on your plan for – on the Ramsey plan for quite a while. I've gotten out of debt, I think twice and totaling over $28,000 total. Um, that was all due to a worker's comp lump sum paying it off. So I didn't really like learn the lesson, you know? Um, so right now I'm in Atlanta and I'm an electrician. Um, I do that and because COVID stuff, it's been back and forth on how much I'm making and things like that because they're raising prices and all that. I'm also a youth pastor, and it's basically just on Sundays and stuff like that, meeting with the youth, and the Lord's been really good there. So I have about $8,000 left in this debt and this grouping. I was at 18 a few months ago, and then I

sold the truck, and that was hard to do, but I sold it, and we got about 8K left. We got a baby on the way, and I'm having an issue getting full going on the Ramsey way because I didn't learn the lesson the first time. And I think my issue is, one, I mean, I know I need to – the cutting the eating out actually brought my lunch today thanks to my wife. My biggest issue that I'm having is with the envelope system. I'm not sure how to budget with envelopes with money that I don't already have in cash yet. And I'm kind of struggling with that along with the, I know I need to stop eating out.

I just want to get some advice on that. Well, let's just use a grocery store envelope as an example. Okay? Okay. When you go to the grocery store, if you're not borrowing money to buy the groceries, you're either hitting your debit card and taking it out of your checking account

or you're taking out of your groceries envelope agreed yeah the cash yeah yeah so what would be wrong with taking the money out of your checking account and put it in cash in the grocery envelope because it's in there would be an issue with that it's in there well no so here's yeah so at the end of the month um i get paid bi there. Yeah, so at the end of the month, I get paid biweekly. And so at the end of the month, I have, or at the first of the month, I have rent come in. So all the money I've saved up at the first of the month, okay, I'm live. All right, so on, let's say, the 30th of September,

we're going to sit down and do our budget, be my wife. And we're going to want to put cash in there. Well, I'm not going to have any cash to put in any of the envelopes. Then you're not going to have money to buy groceries in your checking account. Until the church pays me on the 4th of every month, like they've been doing. And then it – So my point is your system – wait a minute, stop. You're not going to buy groceries for four days out of your checking account,

is what you're saying. Yeah, we planned the two weeks prior to get stuff before um well how did you i mean that way i can make the envelope is not the problem the problem is you didn't plan to have money for groceries yeah if you've got money for groceries in your checking account there's nothing stopping you from keeping it out and putting it in the grocery envelope okay i'm just processing okay you see what i'm saying you can't write a check or use your debit card at the grocery store unless there's money in your account agreed yeah and if there's money in your account you could take that exact same amount out of your account and put it in cash into an envelope says groceries on it couldn't you yeah okay so you're you're not short

of cash unless you're short of cash the envelopes don't change the equation yeah it's just when the just i guess it's just when we're sitting down doing it on the 30th i don't have any of the cash to put in for the beginning of the month till the fourth or then how are you buying groceries between the first and the fourth now i would have bought it a week or two prior so am i doing fill the envelope when the next check comes in on the fourth yeah because that's the way you're doing it now the only difference is you're running out your checking account yeah something no i'm i're doing it now. The only difference is you're running out of your checking account. Yeah. No, I'm hearing it.

So whatever that next check is after the fourth, that needs to fund you through the next time you get a paycheck. So you can divide it up if you want. Yeah, and that's what we've been doing, but go ahead. But you're having issues with doing it that way? Dividing it up. Yeah, that's the best way to say that. Yeah. Just divide it by two if

you're getting two checks a month and your grocery bill's 200 bucks you can put 100 in on one check and 100 on the other if that gets you through all right it's not gonna be that be more than that but the the it's every two weeks so you've got to look at the calendar yeah because you don't get checks on the first and the 15th you get a check on every month on the 4th for your youth pastoring and then you get a check every two weeks so some weeks twice a year you get three checks in a month that's true yeah because you have the magic month when you get paid every two weeks yeah and so two times a year december this year exactly good exactly so that that's the point and um so what you've got to do is you sit down you look at

the calendar and you say this month the month of september i'm going to get or the month of october now coming up i'm going to get a check on x and y and i'm going to get a check on the fourth and then you allocate each one of those checks across the things and oh by the way the very most important category of all is food. Yeah, the four corners. I've heard you say before. The four walls. Yeah, exactly.

Yeah. Exactly. And I had one more other thing if I have the time for it. So the wife is pregnant, and it's really hard to say no to a pregnant woman who's hungry. So do I need to set a separate budget for that to come out of, or do I say look baby we're just gonna have to suck it up and uh the pregnant woman that's hungry has to say no to herself because she's building a life for her child it's not your job to be her daddy she looks in the mirror and says it's good for my family for us to be on a budget and stick to that budget and has to agree to the

budget you don't tell her what the budget is the two of you together agree to the budget and then she will be saying no to herself because she's like a grown-up woman and stuff this is the ramsey show Hey, it's Kelly, associate producer for The Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head to theramsyshow.com. Thanks for listening.