The Ramsey Show - App - How Do We Get Back on Track? (Hour 3)

Episode Date: January 31, 2024

Девочка-пай 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 Camel, joined by Rachel Cruz, host of The Rachel Cruz Show and co-host of mine on Smart Money Happy Hour. This is your show, America. Give us a call at 888-825-5225. We'll talk about your life and your money. Chad is up first in Green Bay, Wisconsin. Chad, what's going on? Hey, George and Rachel. Good to talk to you. I'm liking the show. It's a great show, a wonderful show. Thank you. to you. I'm liking the show. It's a great show. Wonderful show. Thank you. Thank you.

Yeah. And so I'm kind of a first time, I would say, not first time listener, but just started kind of following the Ramsey way here and just caught bits and pieces of some of your shows. And I really wish I would have found these resources years and years ago, but I've always been pretty good with money. But now we're kind of in a predicament. My wife and I were expecting our sixth child actually coming on Monday.

Wow, Chad, you can give George some father advice. I'm exhausted by the one, man. You guys are troopers. You get like a Nobel Peace Prize, I think, at that point. Yeah, exactly. We do our best. It's a crazy house, but we really enjoy it. That's awesome.

And we're blessed. The bigger family, the better, they say. I love that. It's fun. Great. So how can we help you? What's your predicament here? So, yeah. So my wife is an in-home daycare provider, and with the baby coming, she's going to be out of work or, you know, taking a step back from work, which is fine. We have funds in place to kind of prepare for that, but we are going to be tapping into our emergency funds. And our bank account, even before this, fluctuated a lot,

sometimes $2,000 down a month, sometimes up $1,000. So I think a big issue that I'm finding out is we really need to be on a budget, obviously, and figure out where this money is going. We try to budget a few times and we've always fallen off the horse. We get triggered by it. It's hard to track every dollar and be nitpicky with each other and it just triggers our stress and, you know, and that affects marital relationship if you're always on each other's case. I'm the one in charge of the money mainly, so it's kind of hard that way.

You end up being the bad guy in a sense, looking at all the details and saying, we can't spend X, Y, and Z. You become the no spouse almost. Right. She's been good lately and she's on on track now on board now i should say and yeah she's a wonderful woman i'm glad to have her yeah how much how much you guys make a year um pretty much solely on my income 80 plus she makes 1500 a month so i could just tell you my

net take home per month. Yeah, that's great. That'll be your new income once she's not working. Correct. Okay. Yep. And that's $3,800 a month net. Okay. What are your expenses?

Our expenses are around $2,300 a month. That's not counting groceries and miscellaneous. Oh, okay. That's just bills okay bills bills expenses is that does that include debt that 2300 are their payments within that we have no debt no debt house loan yep okay so that includes your mortgage that 2300 and utilities and all that correct correct okay um and then yeah and then you have $1,500 left, but that doesn't include food and miscellaneous stuff like you were saying. I imagine with six kids plus you guys, that's a lot of food.

Yeah. That's probably the hardest part of your whole budget is trying to nail that down. Exactly. Yeah. I budgeted like $685 for it, and we're right around there. Yeah, I'm sure. Totally. That sounds very reasonable. Yeah, I mean, I think it's one of those things, Chad,

I think y'all will be in a season, especially with her not working, yeah, that you're going to probably feel a level of a pinch. But what a weird thing with a budget and the way we always try to frame it and as you kind of start to live on it and it becomes part of your rhythm,

is that it actually gives you more peace because you actually have control over it so even if it's you know six hundred dollars left over after food for miscellaneous to be able to really say okay for this month where can the 600 go and you guys both together like you were saying agree on it know where it's going and then the next month month, right? Like maybe there's no clothes. We don't buy clothes for this coming month, but next, next month. Yeah. Let's put, let's put 150 towards some clothes and we're not going to do something else that we did in February, but we'll do in March. Right. So you kind of just month to month gauge that. And then obviously, I mean, there, there's no debt, which is, which is awesome. And you guys have an emergency fund. So if something does come up with the baby

or something that you need the money, it's there. Because how much is in that? We have the $1,000 emergency fund plus we had about four to five months worth of step three of the expenses. Oh, good. Okay. Yeah. That's great. So yeah, I would do everything in my power power which is really hard with six kids so i know this is much easier said than done on the side of the call um just to try not to tap into that that emergency funds if you need it it's there right that's that's to help relieve uh if something does come up and you need cash instead of going into debt for it, you obviously have that cash to use. But if you can start to practice both of you guys together to run this household on, and it is a tight budget. Like that is what it is.

But there is something about having the power and saying, okay, this is where we know what's going and not feeling like, gosh, I feel like we're just running and we're not getting anywhere. At least you have numbers on paper that show you, yeah, you are getting somewhere. And you guys are, you know, you're doing a great job. You really are. How have you been budgeting currently, Chad? We have not been. Okay. So this is just kind of napkin math. You know your income and you know roughly what your bill is add up to. Yep exactly and i look at bank accounts add it up track it monthly see our see where we're going up down up down yeah that's a lot of that's a lot of brain calories and stress so here's what i'll do i'll gift you every dollar premium and that's going to help your wife she can log in on her phone you can be logged on your phone to the

same account you guys both have accountability and transparency and bring her into it not in a negative way but hey help me adjust this let's include a little bit of fun money for her so she doesn't see this budget as this negative thing holding her back, adding stress to her life. Instead, it's, oh, look, we have this much left to spend on food for the week. Let's meal plan together and let's figure out how we're going to do this. And so you not just being in charge of the finances, but bringing her into it and her getting a vote and both of you having that accountability. Yeah. And I mean, Chad, in a perfect world, you know, what's great about every dollar premium is it attaches to your bank account. So your transactions, when you swipe your debit card, come in. So if you guys shop at

Costco, a Costco transaction will hit every dollar budget and you drag it up to the groceries or the Costco line item, however you guys do it. And, you know, a good rhythm to keep this, to keep the money. I don't know. I feel like some couples, it's a very like formal way of dealing with money and they sit down every month. Winston and I, we text, I mean, it's probably every other day about something going on of like, oh, hey, there was this transaction. What Venmo is this? What's going on here? Okay. There's that. We didn't have, we had less in this category. Should we, we're going to move it down. Like we just kind of, it's a, it's kind of this ongoing conversation because money is a reflection of our life, right? And so you're going to see that it just becomes a rhythm for you guys.

And it's a good goal to hit. It's one of those things that you map out for the month and you say, okay, this is our goal to hit. And it's and it's it may take on you know some new habits and it may take a little while to get some of those habits in place but I really you guys sound so grounded and just I don't know I have a lot a lot of faith in you guys Chad so hold on the line Skylar will pick up our for our baby gifts to you and your wife and I'll throw in my new kids book I'm glad for what I have for the baby. That's really cute. For all the kids too.

Welcome back to the Ramsey Show. I'm George Camel joined by Rachel Cruz. The number to call is 888-825-5225. Rachel, I wanted to spring this on you. I've got an article here from Yahoo. Here's the headline. Prepare your heart. My family of four can no longer live comfortably on $230,000 a year.

Here's how much the American dream really costs. I want to get your take on this. You ready for it? Oh, man. Yes. Former Goldman Sachs analyst says his family of four need to earn more than 230k per year in order to live comfortably in the bay area okay well bay area well we'll asterisk that's one of the most expensive places to live in america okay here we go sam dogen now 46 this he hit

headlines in 2012 he retired at 34 you know You know, the fire movement, all of that. He had a $3 million net worth. Oh, wow. Okay. Well, since that time, he's a father of two. He's been living off of passive income from stocks, bonds, and real estate. Okay. Sounds good, right? The financial guru now says his investments will generate just $230,000 before tax,

while his annual expenses are projected to top $288,000 in 2024. Oh my gosh. So he says to net that sum of money, he needs to earn $420,000 before taxes in order to make his life work. So he says he's declaring he's not asking for sympathy or empathy. He's admitting they have an upper middle class lifestyle with his wife and two kids. Yeah, I would think so. And he says there's areas to cut, but overall, it's a realistic and comfortable lifestyle.

The annual budget includes, Rachel, over $80,000 for private school tuition. Sure. And $24,000 for health care costs. He also estimates food expenses will top $26,000 this year and his housing expenses. $26,000. Yeah. And then housing expenses, which includes property taxes, maintenance, insurances, are estimated at a whopping $68,000.

So because he says, my wife and I don't have normal day jobs, we have to pay for unsubsidized health care, which costs $2,300 a month in premiums. Which would be fair, right? Like if you have to do- You don't have it through your employer. It's not subsidized. It's expensive. It's crazy expensive.

So, you know, he just goes on to say the budget breakdown is sure to alarm Americans who are struggling to cope with soaring costs of utilities, rent, groceries. It's a struggle to raise a family in an expensive city, safer retirement, figure out how to spend a lot of time with your kids before they leave for college and enjoy life in general. That was kind of his last quote there. So do you feel for this guy i had a feeling that you would be our you know what someone with some empathy and sympathy for this situation while most americans would be like wow wow you live in the bay area making oh yeah 200 plus thousand dollars oh i'm like a family making 90 right now is pissed at him exactly they're just like are you kidding me are you kidding me so here's the deal what they've considered normal is this lifestyle right that that it is normal to i mean they're they're almost 2100 a month on food which means

you are out to eat at great restaurants oh they're eating good they're eating good have you been to air one no it's this it makes whole foods look cheap it's it's in california okay so yeah it's frightening yeah so i'm like the the problem with that is it is uh everything is just i was gonna say inflated inflation inflated um in what the norm is for them. Right. It's just here. It's here. And if that's the life they want to live, we're not mad at that.

But don't say that the average family has to live that because there's people that are living a sacrificial lifestyle right now to better their families that are significantly their norm is down here. So the complaining at somebody that's living up here is what is what bugs me yeah well in this idea that you have to well i want to live in the bay area i should get to live wherever i want to live well that comes at a cost yeah and we're seeing some of the costs here and by the way you chose i know you want to put your kids in private school but it's a choice yes to put your kids in private school. That choice comes with a cost. In his example, $80,000 a year.

For two kids. For two kids. So it's a $40,000 school, you know. Which again, private schools, even here in Nashville, you know. Yep. Can get up there. And then I don't want to work a traditional nine to five working for the man. He works for himself.

Great. That also comes with a cost. Healthcare. You have to pay for unsubsidized health care which we could get in a whole tangent about how that whole system is messed up sure sure but i don't feel i want to feel because it's choices that you're making that's it that you can make different choices and have a different outcome and that can be choices from where you shop for your groceries to your job right or to where you're living so i mean that those are choices you're making and this is the outcome that you're getting so to get a different outcome? Or to where you're living. So, I mean, those are choices you're making,

and this is the outcome that you're getting. So to get a different outcome, you have to make different choices. Yeah. And if I'm going to live in a super, these are ultra high cost of living areas. Yes. And so, yeah, you need to make- It's like being in Miami. You got to make half a million dollars a year in order to be comfortable. New York, Manhattan, you know, like, yeah. So that is one thing with the fire movement that we always kind of push back against he thought this three million would float him fine he's realizing it's not enough to cover

my expenses and that's that's the fear and this idea of like i'm gonna live on nothing and invest everything which in a sense you're like okay there's some like great principles in that idea of living of living on less than you make yeah of. We're not going to give in to instant gratification. We're going to delay everything, live on nothing, and we're going to be okay. So that I can not work and live off these investments. But the prediction of what you're actually going to want to, how you're going to want to live, is going to probably up. That's what I've always said to myself. I'm like, 65-year-old Rachel is going to be way bougier than 35-year-old Rachel.

So I'm like, it is. You're going to upgrade your life as life goes on. And so that's the fire movement caution. Ouchy. And there's some lifestyle creep here too as well, we can admit. You know, he said we're living an upper middle class life. We live comfortably. We do all the things that we want to do.

There's not a lot of sacrifice happening with this. And, you know, he did well. He's still young and multimillionaire, so he can't complain too much compared to the average American. But I'm not going to vote for sympathy on this one, Rachel. Yeah. Oh, no, I can't either. Okay.

Thank you for that. I can't. All right. Back to reality. Michelle is in Sandpoint, Idaho. Michelle, what's going on? Hey, George and Rachel. My family got turned on to the Ramsey program about three months ago, and so we're all working through the debt snowball right now, and We don't have very many forms of insurance.

Hey, Michelle, speak directly into your phone for me. You're breaking up. Okay. Is that any clearer, George? It's still a little rocky. We may get you on hold to get your phone clear if we can't clean it up. But all I heard was you guys are trying to pay off debt in Baby Step 2? Yes, we're in Baby Step 2.

Okay. And we don't have anything except car insurance right now in our monthly budget. Okay. And so I've been looking over, getting quotes for the different ones, and I'm just not sure, you know, basically we have where in our monthly budget, 42% of our is the ratio of our income, our 9,000 a month household between the four of us. And that's going to paying our debts in baby step two. Okay. And so your question is what is what other insurance you need? Which one to budget for first? Because I know that if we took all our extra that's on the snowball right now and used it for insurance,

that until we get our shovel bigger in the next couple months, we wouldn't be making any traction. And I'm not going to currently don't think I can sell that pitch. Well, insurance is not a baby step. Insurance is a, these are non-negotiable. It's almost under your utilities. Yeah. That's kind of what you could say. And the problem right now is if you forego insurance, it could derail you financially in the biggest way.

It could cause bankruptcy. If you don't have health insurance and you get some medical bills, it can be game over. If you don't have homeowner's insurance and renter's insurance and something happens, it's game over. Yeah. So yeah, insurance is, it's above your debt in that sense. It's a necessary expense that you will pay. So anything after insurance and utilities and mortgage or rent, food, all of that, whatever is left there, then take that amount for your debt snowball. And we just got access, thankfully, one of our family works for Costco to SmartDollar. And so I know that the Financial Peace University lessons

are in there. Is that right? Yes. Go watch the insurance lesson for sure. But here's the ones you definitely need. Auto, you have that. You need health insurance, you need term life insurance, and you need homeowners or renters insurance. That's the bare bones. And we'll walk you through the rest of those in Financial Peace University. Thanks so much for the call. This is The Ramsey Show. This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Open phones at 888-825-5225. Evan is in Toledo up next. Evan, how are you doing? Doing well, George.

How about yourself? We're doing great. How can we help today? Yeah, first, I wanted to say, glad to finally talk to you. You've been all over my TikTok. Love your messages. Yes! The algorithm knows what Evan needs.

You just made his day, Evan. Thank you for calling instead of DMing, being like, hey, bro, I need financial advice. Call the show, guys. Thank you. Right. Yeah, of course. So my question is, I'm putting way too much money into my beater car. Should I use my emergency fund to purchase a new one? Walk us through what way too much money is.

So how much is the car worth and how much are you putting into it? Yeah, so the car's worth, the Kelly Blue Book is between four and six. It's a 2010 Honda Accord. I purchased it 20 months ago for $9,700. And I have unfortunately put over the course of those 20 months uh 12 624 dollars and 67 cents uh but who's counting goodness gracious what did it need were there major issues that you didn't catch in the inspection or what so that's part of the problem too um i i rushed myself into purchasing this vehicle um did not do proper due diligence.

I did the Carfax, sent it to a few people that know things about cars, but went up there, you know, drove two hours, went with my brother who him and I combined know zero about vehicles. And, I mean, I drove it. It didn't, I mean, I knew there was going to be some work, but I figured it's a Honda. It's only got 106,, I drove it. It didn't, I mean, I knew there was going to be some work, but I figured it's a Honda. It's only got 106,000 miles on it. Sure.

You know, when I was purchasing it, I'll be able to do a little bit of work and then ride this thing until, you know, the wheels fall off. And right off the rip, the tune-up with a bunch of stuff, the radiator went out. The first expense I had was $2,500. I forget what all went into that. I don't have the best spreadsheet in front of me, um, in terms of what work was done, but it felt like it got to a certain point where I was putting enough in. I'm like, okay, I can just ride this thing out. But it seems like every two or three months, something happens. I mean, last February was the starter.

I just had my crank sensor go out during the cold last week. And my fear is with all my side hustles require me to drive. Yeah, you need more of a reliable vehicle. And I think you've driven it, Evan, to the ground. I mean, the idea that you drive it until the wheels fall off i mean it's gotten to that point basically the wheel literally did fall off luckily i was in an aldi parking lot and not um you know and not going on a high speed on the highway i guess you know for other people to learn and even myself i just don't want anyone else to feel the way i have emotionally you know driving a driving a $22,000 2010 Honda Accord isn't, I mean, I mean, I own it, you know,

I don't owe anybody money on it. It feels great being able to say that, but you know, at some point I feel like I've got to cut things loose. Right. How much money do you have right now? Um, I have in liquid cash, uh, $22, Great. Good for you. Any debt? No debt. Way to go, man. Yes, I would for sure get a new car. So let's say, can you sell at private party for six to get top dollar? The guy that has been working on it for me, I'm sure we could maybe find somebody. I try to be a little more conservative. I could probably get cash for it easy. Well, is everything

fixed on it now, or does it still need more work? The check engine light is on, but that's the story of a lot of people, I'm sure. And I think it's just the aftermarket oxygen sensor, the catalytic converter. That's the only thing, the reason that's flashing.

So it's got brand new tires, a lot of stuff, basically. Well, maybe you take the... If you can sell it for five, you take 10 from your savings and you go buy a $15,000 car. What's your income? Yeah. I think with everything and when you take into account my side hustles and everything, I probably net $70,000 a year. Great. Yeah, that's awesome. That's a reasonable purchase. And you can drive that $15,000 car for a while.

Do you have any other future goals like a home down payment? Are you investing right now? Yeah, I'm investing a lot. So over the course of the last three years, I put a bunch of money into a non-retirement tied investment account and just been riding dividends in that space. I mean, that account, I think, is $55,000, and I'd rather leave it where it's at. I mean, I'm putting enough into my 401k. I'm maxing out my Roth and actively investing that. I mean, I feel like I'm in a good spot. Yeah, you are in a my Roth. Good. And actively investing that.

I mean, I feel like I'm in a good spot. Yeah, you are in a great spot. Yeah. So just replenish the emergency fund once you buy the car. Make sure you're at three to six months of expenses in there. But other than that, dude, you're doing all the right things. Yeah. And I know the concept was great, right?

Buy, use, reliable, and just a little bit of the due diligence was good. Yes. That's what I was going to say, Evan. The pre-p say, Evan. I think for people out there, because I think you're right, there's so many lessons always to learn on this journey. And one of them, yes, is to always do the inspection. And to your point, we laughed at another caller, or not at another caller, with another call a few weeks ago, because I was having trouble keeping up with all the car lingo. And whoever I was co-hosting with, they're like, you just need a car person in your life, whether it's the uncle or the friend.

But there's always that person in your life that just knows cars and just take advantage of their knowledge, right? And because you are buying a crappier car, especially when you're getting out of debt and you're doing this plan and you sell the nice new car that has a $900 car payment every month to it. You know, we say, go get a beater. It's this kind of thing. But you want to be wise with that to your point.

And those beaters are not there to last you three, four years down the road. Maybe get you through nine to 12 months and then maybe you upgrade a little bit there, right? So it is a continual change. It's not something that'll be forever. So I think you're at the point for sure, Evan, that yeah, you can definitely, definitely step up.

Your next car, you will definitely definitely step in your next car you will definitely do a pre-purchase inspection i guarantee it yes you would and i would really challenge you to try to get closer to that six because you've put money into it it's not just a crappy you know 2010 car like it has new tire like you put value into it and i want you to be able to get that out of it so don't don't just settle and if you look at you know what these cars are actually going for in the open market, even over 100,000 miles, even a 2010 Accord,

you could get over $10,000 if you can get this thing in good shape. Yeah. It's a wild time out there. You may have gotten a lemon too. It's kind of what it sounds like. Yeah, I did. And it was tough

because I went across state lines and I didn't read all of the paperwork. And I'm sure I signed away my lemon law rights they're different in Michigan than they are in Ohio and yeah it took it took 25 days for me to get it into the shop anyway originally so it kind of was a worst case scenario totally yeah and you have a good reputable honest mechanic that you're working with yeah he's a great guy okay um you know and it's uh he's a retired honda certified um you know mechanic just does work out of his garage um i have no reason not to trust him um yeah and for you evan to to keep i feel like there's so much good stuff for listeners out there with the story

and that's another thing is your as car maintenance, as Evan has felt over the last two years, it just gets expensive, right? And so I do think, though, for people listening, get a second opinion, because sometimes that one person, not saying your guy, Evan, is this, but there are some people that they're like, oh my gosh, it's kind of like, I don't know,

you go somewhere and they're like, oh, well, this, this, this, and this. And if it's me, again, that doesn't know cars, I'm like, okay, fix it all. It happens to the dentist. Like, you need $3,000 worth of work. The other dentist is like, no, you're fine. We'll fill that one tooth. You're good for a while. Yeah, right, right, right. Cool. Yeah, yeah. So, second opinion on big maintenance things for those of you listening to. Yeah, and well, to give you a little insight to my driving habits, I mean, in that 20 months with all that work I've done, I still put 30,000

miles on the vehicle. So to me, that's a lot of driving. Oh yeah, that's a lot of driving, for sure. And in my opinion, looking in that 2019, probably 2020 Civic range, I know those might be a little bit more expensive. I know the body style got bigger, but in my mind, that's something that is going to be reliable, even if I get it pre-owned certified. Sure. And that's something where I just kind of eat the cash and then spend the next few months rebuilding that emergency fund. Yep. For sure. Yep. Just be paying cash for the car. Don't let it be a crazy percentage,

but it's not. You're doing great, Evan. Just overall, your overall financial picture is awesome. You got the right headspace around this. Don't let this hinder you from buying another used car. And don't let that hinder you, America. Don't just go out buying a new car because you heard Evan's story, okay? Make the right choice. Get the pre-purchase inspection. It's like $150.

You'll have a lot of peace of mind. Worth it. This is The Ramsey Show. Our scripture of the day, Matthew 5, 15. No one lights a lamp and then puts it under a basket. Instead, a lamp is placed on a stand where it gives light to everyone in the house. Mary Kay Ash said, those who are blessed with the most talent don't necessarily outperform everyone else. It's the people with follow through that excel. That's a good quote.

And Rachel, that's not Mary Kate and Ashley. It's Mary Kay Ash, a different historical figure. No, I didn't want to confuse you. Thank you. Solving a mystery before dinnertime. Man, I used to love those books. Man, they are so good. Adventures of Mary Kate and Ashley.

How the West Was Fun. Oh, all of it throwback there you go the holiday in the sun was the pre-teen big movie where they went to atlantis or atlantis the resort like right when it opened they filmed um what great and the enemy on it was uh megan fox wow back in the day i know there's that's good. It's back during the preteen era. Take Rachel to your Mary-Kate and Ashley trivia night. She will crush it. Well, back to what we're here to do, Rachel, is answer America's questions and help them

solve their life's problems. And hopefully we can do that with Jeremy in Palm Springs. Jeremy, what's going on? Hi, George. How are you doing? Doing great. How can we help? I got $75,000 in debt and a baby on the way.

Oh, congratulations. One bad thing, one good thing. What number of child is this for you, Jeremy? It's our first. Oh, congratulations. When are y'all due? Thank you. Due in about a month and a half-ish. Okay. Five, six weeks out, huh?

Yeah. That's exciting. It's coming up quick. So you paired those two things together. It tells me that you're a little bit stressed about this debt. You want to try to get out of as much of it as possible before baby's here or what? Yes. Yeah, well, that's the instinct.

Me and my wife decided to go ahead and just put everything in savings because we don't know really how to raise a kid yet. That's wise. So how much it's going to cost and all that. So, yeah. You're doing the right thing. Look for some guidance. So I don't know how long you've been listening to the show,

but you guys are in baby step two where you're paying off all consumer debt using the debt snowball method. Yes. And because you're having a baby, we call this stork mode, which means we are pausing the baby steps. We're pausing debt payoff and we're stacking up cash and savings until mom and baby are home safe. Yeah. Because we don't want you to go into debt. Yeah. Staying current on your bills. Yes. Good call. But yes. Okay. So how much will you have,eremy stacked stashed away here in the next month or two and what you guys have been saving so far well so far uh it's kind of complicated but um right now we have about thirty three thousand dollars in emergency fund

okay that's great um and that will that will go up in the next couple months, hopefully. To what? What do you think that'll be? If I were to guess, maybe it all depends on the job and all that. So maybe about $35,000 in the next few months. So let's say you have $35,000, baby's here, mom and baby are home safe, then we can take most of that and throw it at this 75 in debt. Knocking it almost in half, right? Yes.

I guess my question is, there's about 55 of that in school loans and they range from like 3% to 7%. And there's like, it's like one loan, but it's got 10 loans. Yeah, they're broken out into separate little loans. Yeah. So should I attack that as one loan as like the 7% or should I attack the car loan at 3%?

What's the car loan? What's left on that? The car loan is at $22,000 right now. Okay. And is that all of the debt, the $55K and the $22K? Yes, minus the house debt. Yeah. Sure. Okay. So with the debt snowball, what's beautiful about it is you don't have to worry about the interest. You are trying to focus on momentum and progress. So you're going to lay out those debts from smallest to largest. So let's say one student loan is $1,000, the next one is $3,000, the next one's $5,000. So you're going to lay out those debts from smallest to largest. So let's say one student loan is a thousand, the next one is 3000, the next one's 5,000. Then you would just

knock those out one by one from smallest to largest while making minimum payments on the rest. And what that does is you free up a payment sooner. You apply that payment plus all the margin you were throwing at the next debt. And the same thing happens and you can see how the snowball picks up snow. And most people following this plan, they get rid of their debt in 18 to 24 months using this method. How much do you make a year? Well, that's in transition right now. I just got out of the military. So hopefully going back to making about $70,000, $80,000 a year.

Great. What's the car worth? The car? Honestly, I80,000 a year. Great. What's the car worth? The car? Honestly, I haven't looked it up. It's a 2019. It's a pretty new car for us anyway. Okay. I'm just wondering if you got to the point where you're like,

man, I have $77,000 in debt. I'm going to make $70,000 this year. This is going to take four years at this rate. It's a possibility that you end up selling the car and downsizing with cash. Yeah. So that's something to think about. Just to speed up this process for you guys. Because you got a solid income, but you also have some pretty serious debt here. Yeah. Yeah. So if your income is not going to go up significantly over the next year, you may want to look at just selling that car while you can, while you can still get some good money for it,

and then using some of that cash and savings to get a beater car to get you by for a year. Gotcha. Okay. Yeah, that's an option, man. Thank you so much for the call, and congrats on the baby. That's exciting. Good luck with the new addition. Woo! I'm five months ahead of him here with a five-month-old, and it's a wild ride, Jeremy.

No one can prepare you, not even Rachel Cruz, and she tried emotionally. Tried to give you all the baselines, George. What can I say? You and Whitney are great. Y'all are killing it. She's the best mom. Killing it. Y'all are doing great.

You know, we were at dinner the other night, and we were just trying to have a moment of connection, and I said, what are three things you're learning this is what we do on date nights you and winston do that too right good question she said i'm learning that i'm a good mom and i was like yes a thousand percent yes that is so good and i feel for moms out there the mom guilt is real it's just like constant chaos and emotions and lack of sleep and should i work should i stay I feel for new parents out there. Or you see moms like, take care of yourself. And you're like, yes, I will. Don't worry about the laundry. You're like, okay. You know, the worst advice, Rachel, I'm going to say this.

This is the worst advice I got when it came to parenting. And I heard it from so many people. Oh no, did I give this to you? Nap when the baby naps. Oh no, I hate that. Yeah, don't do that. What? When am I going to shower? When am I going to eat a meal? When am I going to do laundry? That's a silly one. That's really nice. Now, at night, obviously. Sure.

Ideal. That's fair. Let's get the baby sleeping. Then we can all sleep. But, yeah, no, that's a... Well, Rachel, meet Rachel. She's up next to finish off this hour. In Scottsdale, Rachel, get right to it.

We're up against the clock. Hi, I'm Rachel. I live in Scottsdale. I'm currently working as a nurse, and I was wondering if I should take out some student loans for my bachelor's in nursing. How much is it going to cost? Yeah. Well, I was looking at some programs. The cheapest program I could look at was $40,000, and that's kind of a lot for me I don't really have any debt right now and the big thing is like as I work as a nurse currently with my associates and I make like there's really no difference between the bachelors and associates at the moment just because um as far as your salary shortage yeah exactly so so the roi is there you're not going to be making 40 grand more.

No, exactly. Yeah. So why do you want to do it then? And why now? Um, well, I don't know what everyone does. Well, that and at the moment, I'm really able to get most jobs I want, but I don't know if that's going to last long term only because a lot of nurses were scared off because of COVID. Yeah. And I think eventually we're going to last long term only because a lot of nurses were scared off because of COVID. Yeah. And I think eventually we're going to work. The nurses coming in, it will be caught back up and everything will be OK. And I fear that I won't be able to get the jobs I want later down the line. That's my fear. Yeah.

And I think that's a valid fear, but I don't think that's a valid reason to take on debts to prevent something that hasn't even happened yet you know so when the time comes and you start to see that shift start to happen then i would say okay let's think about hey what would it look like to go back to school pay cash for it though because we'll never um at least on this show uh advise you to go into debt. How quickly could you save that up, that $40,000? Well, I'm married. Me and my husband together make about $90,000 a year, but cost of living in Scottsdale is pretty high.

We're in a one-bedroom and it's $2,100. Yeah, sure. I mean, it would take a while. Totally. It would take a while. Yeah, I think it could be a good goal for you, Rachel, here in the next, you know, four or five years and just put some money aside in a sinking fund

and just say, hey, that's kind of my school fund. And then you may look up in four years and the thing you fear has not come to fruition. And then you make a different decision. And maybe you guys have a baby and life looks different. I mean, who knows what's going to happen? But I would not rush into a degree and go into debt for it on something that's not reality yet.

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