The Ramsey Show - App - How To Balance Saving and Enjoying Money (Hour 3)

Episode Date: June 10, 2024

from Ramsey Network this is the Ramsey show I'm George Camel joined by Jade Warshaw this hour open phone lines at 888-825-5225. The phone call is free. All that we would ask is that you maybe take our advice. Is that too much to ask, Jade? We'll find out very soon. We're here to help you win with money, build wealth,

do work that you love, and create amazing relationships. That's what it's all about. That's what it's been about for the last 30 plus years now, and we're still going. We're still going strong. You can't get rid of us. Still standing.

As long as Dave's on vacation, we are here. There we go. Yolanda is on the line in Tampa, Florida, to kick us off. What's happening, Yolanda? Hey, George and Jade. How are y'all? Doing good. Goofing off.

How can we help today? That's awesome. So my husband and I are debt-free, sort of. We were debt-free, and my son went to college. And I signed for a Parent PLUS loan, and I had no idea what I got myself into. Oh, man. How much? Total, about $80,000. What's the interest rate on this thing?

Because I know Parent PLUS loans will really take you to the cleaners. They do. And when I signed up for this, the guy was like, oh, if you have bad credit, don't worry. You won't get approved. And then all of a sudden, I was approved. Did you have bad credit? Well, I mean, it wasn't great. It was in the 600s.

I mean, so long story story short i have three loans my son has four loans totaling up to eighty thousand dollars so he did pay off one because it was only like nine hundred dollars but there's all these little loans so we're trying to pay off the little ones but then all these big ones are still incurring and it seems like the needle's not moving. And I need to know if it's using any kind of wisdom to consolidate because Advantage sent me a link to consolidate. And I'm like, you know what, let me just see if I can get a hold of the Dame Ramsey Club. The only time that it's a good idea to consolidate federal loans is if you know that you're getting a better interest rate overall. So you might say, yeah, I have this one that's got a crappy rate, but the rest of them have pretty good interest rates and you're just annoyed by them. So you really need to make sure to kind of

look at everything as a whole, because here's the thing, when they consolidate them, a lot of times they will consolidate based on, you know, your own financial snapshot. So it's not necessarily to say that you'll have a better rate. So look and like do your homework on this, because generally with federal loans, once you consolidate, you only get the one shot. It's like Eminem, you only get one shot. Do not miss. I'm sorry. I can't help myself and I apologize profusely, but I digress. What I was saying is you want to make sure that you choose a very good rate because you don't want to just consolidate for the idea of they're all in one spot now. It's less annoying.

I just make one payment. So really looking at those interest rates. And what's the plan? Is it that you and your son are paying these off together or you're doing it? What did you guys decide with the parent plus so the deal is my son stays at the house and he's got a job and he's dropping five hundred dollars on every paycheck which is twice a month so about a thousand dollars okay so with mine alone the minimum payment is like 652 yeah and so we're i'm just trying to figure, should I put a lump sum on the smallest loan? Yes.

How much money do you guys have? Oh, what do you mean? How much savings? Oh, none. I don't have any savings. Okay. Is it just you? No, it's my husband as well.

Okay. But he is the saver, and it's one of those situations where I'd rather just not know what he's saving. Does he have savings? He does, yes. How much does he have? Oh, probably about $20,000. He has $20,000? I believe so. He's really good with the money. It's me who's not on the one.

When did this turn into a competition in your marriage? Why won't that $20,000 go toward your son's student loans? We haven't discussed that. Ah, I think you need to have a discussion. Let's bring him into this. Yeah. Is this your biological son between the two of you? No, so we are a blended family, and the biological father has, for lack of better words,

kind of lifted his hand off the situation. Gotcha. Okay. So that brings in, you know, a different dynamic. Is he willing to, you know, cover the debts of someone who's not his biological son? Yeah. How long has he been in the picture? 10 years. That's significant. Because here's the thing. Those loans are in your name. So he's really helping you pay off your debt. And really, it's our debt because you guys are one unit. Do you guys combine your money in all other aspects? Or you kind of just, he does his thing, you do your thing? Well, here's the thing.

He pays for everything. And when it comes to the bills and stuff, and I use my job for the vacation money. So you guys just have an understanding. Yeah, I'm with George. I know you called for one answer and we're like getting into your personal business here, but it's worth getting into because I do think that over the long haul, this is going to serve everybody better. But I think you have a discussion at the right time at the right point and say, you know what?

I'd really love for us to kind of just right now it's kind of like a deal like you handle this and I handle that, but I'd really love for us to kind of become one and really talk about it from that point of view. What I don't want, and you, you know this relationship better than, of course, George and I. What I don't want is for it to sound like you want that so that you can get at this $20,000. Because that's really not the spirit of it. And I don't want it to come across that way.

It's just sort of a catalyst for, hey, we have really done a poor job of communicating well and combining our finances in a way that we're building towards something together instead of just, well, you do your thing as long as the bills are covered. And this vacation money is not going to get the student loans paid off. We need some serious traction here. That's why you called us. And that's only going to happen is if you guys take your full household income and use all the margin you can create to attack these loans, which let me remind him are in your name. Yeah. And I mean, it begs the question, like even you saying, and it just, all of this has made me realize, I don't know how you would feel if I asked you about this money.

I don't know how you feel about me having debt in my name. Like these are all conversations that in any relationship I think that you need to be having. But in the meantime, back to the payments. Yeah. To your point, listing them smallest to largest having. But in the meantime, back to the payments. Yeah, to your point, listing them smallest to largest, you're satisfying the minimum payment and then whatever extra money you and your son can come up with collectively, you're throwing it at the smallest debt until it's paid off. That's how that works. Okay, so I am doing it correctly. Yes, no need to consolidate. In fact, it's better to not because you haven't broken out and as you knock out a little debt, you're going to free up a payment. Knock out another debt, you free up a payment. So you see the momentum that you start to build versus trying to attack a giant mountain

and you're just hacking away at it. Okay. Yes. That's the spirit of it. I also found out we're on the save plan as well. So currently after 10 years with $13,000, it's still there. We're not, here's what I want to clarify in the last minute here. So with the save plan, and I said this earlier in the hour, but the only time I think the save plan is a good idea is in a situation where you are actively and intensely paying off your debt using the debt snowball method. So if that's what you guys are doing, it can be a tool for you to say, all right, save plan is going to allow me to lower these monthly minimums so that I have more money to throw out the smallest debt. So for instance, let's say your smallest debt right now is $6,000.

Instead of paying a high minimum on everything, you'll have more money to knock out that $6,000 debt faster. So for that reason, and for that mentality alone, what I suggest to save plan, but please, please, please don't get into it thinking, hey, I can relax. And in 15 years or in 20 years, the government will have my back because that's just not the case. Yeah, we got to start throwing huge chunks of money at this. We're talking 20, 30 grand a year at least to get this knocked out. We're not waiting 10 years for nothing. Let this be gone in two or three.

And that means combining finances with your husband and getting on a plan. This is the Ramsey Show. 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 true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs.

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You've heard us mention during this hour, talking about budgeting, talking about every dollar. And if you don't know, the best way to make the most of your money is by creating and sticking to a budget. You got to put it on paper. You have to face the music, face the reality of your financial situation. What is your income? What are your expenses? We ask those in almost every single phone call because you need margin in order to win with money. Without margin, you're not going to win. And the only way to figure out if you have the margin is by doing a budget. And the best budgeting tool out there is EveryDollar. It makes it simple to plan spending, track expenses, save for what matters most to you. And it's an easy to use app that fits into

your busy lifestyle. If you've got a spouse, you can both be logged in and have that accountability and transparency. It'll help you keep a pulse on your spending and make progress on your goals. So be sure to download EveryDollar for free in the App Store or Google Play today. Kiana's up next in St. Louis. What's going on, Kiana? Hi, Jaden, George. Hey, how can we help? Hey, so I was wondering if I should go back to school. Ooh. I, yeah, I recently moved back into my mom's,

and under her roof, her conditions are that I go back to school. How old are you? Oh. But, yeah, but I can't ignore the debt that I have. Yeah, who's paying for it? If she's making these demands. That's a good question. I don't have any bills.

And, you know, she's always done everything she can to help. And so she's not, I don't think that she wouldn't help. But you do have debt. What's your debt situation? Yes, I do have debt. I'm about $88,000 in debt right now. What kind is it? 66 of it is student loans. Half of that, though, is a consent judgment.

What's that mean? That means that I've been kind of taking the court, so I've got to get a payment arrangement for this. I'm currently on an active payment arrangement. Got you. Are they private loans or they're federal? So this one through consent was through an interest-free student kind of loan thing through a not-for-profit. The other one though is subsidized, unsubsidized, and then I think parent plus a little bit of it. Okay. So basically with this judgment that you have to pay,

what is that? What do you have to do per month or like what's the deal? Yeah, so I'm in an arrangement where I started off small, but as of course the years go on, I'm set to increase my payment. So right now I'm at 200 a month for it. Next year when I pay off my car, I'll be at about three to 500 for it. Okay, oh yeah, so it's accelerating.

So you got 66 in student loans and a car loan. What's left on that? That's $6,000. That's set to be paid off in September of next year. Okay. What's the other $16,000 in debt? $12,000 in medical. And then there was like three in collections.

So charged off credit cards and active. Okay. So what is your income that you're bringing in right now? And what type of work do you do? I'm an insurance producer. I work for my mom. And so I'm bringing in $38,000 currently with her. Okay.

And what does that look like for you per month after taxes and everything? That's about $2,200. Okay. Did you finish school? So I didn't. I got out to pursue my relationship, and that didn't go too well. Oh, boy. What were you majoring in?

What was the goal? So biology major, minor in chem, and I wanted to be a dentist. I'm not ruling it out. If I go back, I want to go for dental hygiene temporarily. Dental hygiene. And what would that cost? I am not sure. I know that they have a two-year program.

I've been looking at averages, but I'm not too sure exactly the price for it. Okay. So I would say getting off the phone with you here, one of your homeworks is to find out and price out different dental hygiene programs. Cause I do think that for you, especially if you kind of know what you want to do, um, really getting the price points and figuring out how you're going to pay for that is like the most important thing that you're going to do, because we know student loans don't work, right? That's a, you got the raw end of the deal on that. So that's thing one, obviously we're going to hook you up with Ken's book, Paycheck to Purpose. We're going to hook you up with the fine work you're wired to do so that you can kind of do the assessment in there and make sure that dental hygiene is really where your strengths lie.

So that's a homework for you. Plus, the homework for us is giving you those free items. Now, let's talk about this debt. So the twenty two hundred a month that you're making, is that full? Are you working 40 hours a week full-time yes that's full-time okay i think that you can find another job and make more okay doing anything my question is is mom gonna be okay with this she is she's okay with whatever will help me be successful okay good i didn't know if you were like under her thumb like mom i work for mom i work i live in mom's house and so i would. I didn't know if you were like under her thumb. You're like, Mom, I work for Mom. I live in Mom's house. And so I didn't know if that was going to go over well

if your income is tied to hers. I'm really trying to be loyal to her. And so she's mentioned venturing off and making a little bit more, doing something different. Because if you could make $60,000 in the insurance world instead of $38,000, well, now we've got some margin to really attack this debt. Because what I'm seeing on paper, you've got a giant hole and the shovel is just not big enough to really make a dent here. We've got to increase our income significantly. And the truth is you can

do that with the skills that you have to offer without having a degree. And so I like dental hygiene for the future, but right now to George's point, we got to get some money in the bank account. And so if I'm you, I'm going to start looking online and i'm going to start applying for any any and everything that makes me more than 2200 a month basically that that lies within your skill set this way kiana how much can you put towards your debt every month right now uh so i haven't been putting anything i do start my second job tomorrow though what will you make off of that uh i did the math it was like only 9 000 a year okay so that again i'm glad that you're making the effort but i just know you can do so much more and make a lot because here's what i want everybody and here's my thing everybody can't live

as an adult at their parents house and it go well So if you have the opportunity to live at home and it's drama-free and you can- There's an exit strategy. There's an exit strategy. You can take advantage of that for a short period of time in order to accomplish a goal. I'm all for it. But the key is you've got to have, like George said, an exit strategy. And that involves getting that income as high as possible so that you can take advantage of the fact that you're not having to pay rent and you're not having some of those expenses that go along with having your own place. And so that's what I want for you, Kiana, is to make the most of this limited time only offer. Yes. I like that. It's a limited time only deal. I hope that helps. Yeah. Let's go to Jason in

Green Bay, Wisconsin. What's happening, Jason? Hi there, guys. How are you today? Doing well. How can we help? Awesome. I discovered you guys just a couple months ago, and you guys are like my heroes. The advice you give and the compassion you have for people, it's just awesome, and I thank you for it.

Thank you. You're kind. Of course, how you might be able to help me. Four years ago, before I ever heard of you guys and the baby steps, etc., I went ahead and purchased a brand new vehicle, which I'm not a millionaire, and I was not out of debt, so now I know that that's kind of a no-no. It's worked out for me. I don't really regret it. What do you mean by it's worked out? Well, I have no reason to regret it yet.

I do still owe about $9,200 on it. Okay. And I think what I have really appreciated about having a brand-new vehicle is the warranty that it came with and that the little things that have happened have just been completely covered. What little things have happened? And that's actually the reason that I'm calling. Little engine things like transmission issues. I thought new cars were supposed to be bulletproof.

You shouldn't have issues by buying a brand new car. I admit. Yeah, I admit. You shouldn't have issues by buying a brand new car. I admit. Yeah, I admit. You're right. Okay. It's a Kia Soul GT, for anyone that might be wondering. And I started, it had these issues beginning, I want to say, September or so of last year. You know, I brought it in and they, oh, our coil needs to be replaced.

Okay. A couple of weeks later, the engine light went on. It needs to be replaced okay um a couple weeks later the engine light went on it happened to be the same thing oh uh must have been a bad coil you know we'll we'll take care of that it's under warranty you know so no problem well sorry we're running out of time jason what's the question yeah let's see if we can get to it okay well i just found out with this current repair that my engine my warranty is no longer longer, I just surpassed the $66,000. So you're going to have to pay out of pocket. No, they're going to cover it because when I first brought it in, it was still under $60,000 when they first started troubleshooting last fall.

Okay, what's the question? I'm wondering, is it worth getting a supplemental car insurance now that I'm not under warranty? No. Do not do it. Just pay what you owe for the service. If they cover it, great. If they don't, you have a car and cars need maintenance. And don't buy a Kia Soul again.

We've learned our lesson there. Brand new. It was sort of old. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie.

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It's the Ramsey Show. I'm George Camel here with Jade Warshaw. Taking your calls at 888-825-5225. We'll try to help you take the right next step for your life and your money. Brandon is in Providence, Rhode Island. What's going on, Brandon? Not much. Thanks for taking the call.

Sure. How can we help? So, kind of got a good problem to have, fortunately. Got a nice big promotion at work recently, so got a pretty big salary increase. Yay, how much? By a little over 15%. Way to go. Wonderful. So what will you be making?

After taxes and benefits and everything, it's around $4,100 a month. Great. Cool. So really, it's the most money I've ever made in my life, and I've got a few kind of big life things I'm saving up for, and I feel like I don't have enough saved up, and I feel like I want to be able to continue to like power save while being able to enjoy the money that I have. Are we talking about,

oh, go ahead. Yeah. Um, so I'm, I'm 33. I'm also debt free, which is great.

Wonderful. And you got an emergency fund? Yeah. Cause you said you feel like you don't have enough savings. Are you talking about investing? Not really invest. Just like I'm getting another car at some point. My car is very unreliable. I'm starting to get to that point. I've had it for almost 10 years now. So maybe it's... Savings for a house, things like that. I feel like those things are going to come up quickly over the next couple of years. I just want to be ready.

I mean, the way we would teach is, you know, you're going to save three to six months of expenses right after you become debt free, which you are. And so stable income, it's just you. How's your health?

Good. I mean, three months might do it for you for right now. And then if you decide later that you want to up that to six months, that's your prerogative. But the way we would teach is baby step three is save three to six months of expenses.

And then after that, you can begin baby step three B, which is setting aside for your down payment on a house. a designated amount of money every month to go towards a specific task, whether it be, you know, upgrading a vehicle or car maintenance or whatever it is that you feel like is on the horizon with your current vehicle, you can do that. Yeah, I feel like I'm kind of comfortably at that point now. What are your total expenses every month? Well, I just, I mean, I just did my, you know, looking at my budget. I live well below my means. I probably spend

less than half my total income every month. Okay, so you could put around like two grand away to your savings goals? Maybe a little less. Okay. I think what would help you because you said when I gave you the first framework, you're like, yeah, I feel like I'm comfortably there. You seem like you're not living above your means at all.

So is it just that maybe you need a very clear target so you feel motivated? Is that where we're at? No, I just feel like I'm going to have the car and the house thing come up at the same time. I'm not going to have enough money comfortably and the house thing come up at the same time. I'm like not going to have enough money comfortably saved. Well, they're very different goals. You know, a home down payment that might look like $60,000 for you, whereas a car might be $15,000.

And so if the car is more urgent, it's okay to not save up for a home right this second, be investing 15% and then put away $2,000 a month for, you know, a year, that'll give you $24,000. And I'd start, I'd start with the car first because you can control that. Like, let me say it the opposite way. You can control when you're going to buy a house. It's not going to sneak up on you, right? Like you get to decide, I'm ready or I'm not ready. No one's going to, you know, put a gun to your head. But with the car, your car could break down or could come to the point without you necessarily wanting it to, that you do need a new vehicle. So I would start setting aside money for that first, since you know it's coming. And then with whatever money is left, then you can start building a down payment. But I think that having a really clear target is something that's going

to keep you on pace and it's also going to inform whether or not you're ready and you won't have this feeling like it's sneaking up on me it's like no i have a plan i'm saving like george said 15 000 for this and 60 000 for that so nothing's sneaking up on you you're just following the plan until you get there are you on a written budget right now brandon yeah yeah i mean i just feel like i'm not gonna be able to save enough. That's my worry. Well, what is enough? Let's define enough, because that can be a real squishy moving target.

Yeah, yeah, I hear you. I mean, I would love to have... That's where we're wanting you to have a concrete goal. If you want a $20,000 car, you know exactly what enough is. Right, right. I mean, I would love to have 40, 50 grand saved away right now, but I don't. For what? Just a car and, you know, again, to start that kind of down payment process.

So let's separate these. If we're going to make it tactical, if I was your coach right now, I'd say, let's get your every dollar budget. We're going to have different sinking funds, and those can be tied to actual savings accounts. So you could have a high yield savings account. One account is for new car upgrade. One is for the down payment. One is for vacation because you said you want to enjoy your life. And then we automate this to where we go, all right, 500 bucks a month going toward vacation. In a year from now, we'll have six grand. 1,500 bucks a month is going to go toward a car. 10 months from now, there should be $15,000 in that account. You see how much more clear it is when you have those goals? Yeah. And there's going to be seasons right now. You might be in a season where you got to upgrade the car and you need a vacation. Yeah. And the house may, you know, you were going to punt that. Next year,

we'll start the house down payment goal. Whatever you want to split it, but just don't have a flat tire to where you're putting all your effort to one thing, but you feel like, oh, I really should upgrade the car. Man, I really need to enjoy life a little bit. You're 33, you're debt-free, you're a young guy, you got time on your hands. And so I just put that money to good use, applying it to those different goals. And if I were you, I'd get into every dollar premium because they've got a long-term planning feature in their financial roadmap where you can really look in and say, like you said, whether it's planning for a down payment, those other savings, you can plug in those numbers with what you have as margin

and it's gonna help you project how long it will take you to save. Because I think for you, just being able to say, okay, if I wanna save 50 grand, it's gonna take me X amount of months or X amount of years to make that happen. And then at that point, it's just a matter of walking through that plan.

There's no unknown and there's no, if anything, you'll get there faster because you'll be motivated and start to earn more money. So that's right. Good question. Thank you. Terry is in Huntsville, Alabama up next. How can we help Terry? Yes. Thank you for taking my call. Sure. You've got the best, the best show on radio. Oh, I appreciate that. We think so too. We're biased though. Yes. Okay. Okay, I'm 65 years old, and I really would like to retire at the end of the year.

Okay, so my situation is I'm wondering if I should pay my house off, and the payoff is $83,000. My monthly expenses are $2,500, and I calculated if I pay my house off, my monthly expenses will go from 2,500 all the way down to 1,500. Wow. Great. Love that. This is the money that I have available. I work right now and my monthly income is $2,800. I have a IRA, which is worth $134,000.

I have a retirement account at work, which is worth $20,000. Okay. And so I wanted to call you up since you all have more experience with money than I do. Is that a good idea to go ahead and pay my $3,000 house off? Considering I want to retire at the end of the year. Is your plan to just live off Social Security? Yes. My Social Security actually is going to be $2,145. $2,100.

And in your mind, you're going, hey, that's way more. I only need $1,500 to live, and I'm used to living off of $2,500. Right. And paying off the house would clear $947. I won't have to pay that a month because the house would be paid off. Yeah. If your nest egg was larger, I would say this could be a good move. It worries me that the total nest egg is $150K, and you're about to take over half of that to knock out the mortgage. I love the spirit of it, but I think you might be better off continuing to try to knock out this mortgage with your current income

while you're working and letting that nest egg grow a little bit. Because every seven years, it'll double, Terry. So if you left it to 72, for example, you'd have 200, you know, 300K in there. Not to mention if you wait longer on your social security to get the max benefit, since you plan on living off this money, that might be advantageous for you as well. So you get the maximum amount. The hard news is you might need to work another year or two because retirement is not an age, it's a financial number. And right now, you have great low expenses.

That's right. But we need that nest egg to get buffed up. And so I'm going to try to get more in that retirement account, continue to live below your means. You're doing great. And I'd keep working for a little while before pulling the trigger on that. Thanks for the call, Terry. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm George Campbell, joined by Jade Warshaw. Our scripture of the day, 2 Corinthians 4, 17 and 18. For our light and momentary troubles are achieving for us an eternal glory that far outweighs them all. So we fix our eyes not on what is seen, but on what is unseen. Since what is seen is temporary, but what is unseen is eternal. Aretha Franklin once said, It's the rough side of the mountain that's the easiest to climb. The smooth side doesn't have anything for you to hang on to.

I like that. I like it. I like Aretha Franklin. Got to weigh with words. God rest her soul. All right. Alyssa joins us up next in Milwaukee, Wisconsin. Alyssa, how can we help you today? Hi, Jaden, George. Thank you so much for answering my call.

Sure. What's your conundrum today? Yeah. I am currently 23. I'm living at home with my parents and my sister. I have a full-time job. I currently make about $4,000 to $6,000 a month, just depending on the month. I'm in baby step number two, getting after my debt. I have about $9,000 in debt with my car and about $28,000 with my student loans. I am just wondering if I am financially ready to kind of get out of my parents' house and move out into an apartment. That would be about $900 a month. I just want to make sure I'm continuing to be gazelle intense while also trying to live on my own and kind of take the next step. I love it. Well, you sound very mature. The way

you're talking, I have no doubts that if you were to move out, you're still going to stay gazelle intense. So where all four are you moving out? If, you know, if it benefits you, if you're like, hey, six more months and I could really knock out this debt with no bills, that's fine. But if you're like, hey, I really just want to be out on my own. I'm going to have, you know, inexpensive rent. I'm going to get roommates. I'm going to make the sacrifices. Then I'd say go for it. What kind of work do you do? I'm currently a strategic sourcing buyer for a kitchen and bath company. I work for the hospitality side. So I make about, I would say, $74. Why the fluctuation? Is there commissions or something? Well, I do a side gig of dance teaching. So I make quite a

bit of money doing that as well. So have you crunched the numbers on this? If you move out, you spend $900 a month on your place and all the things that go along with that. How does it affect your debt payoff? Yeah, I guess with the car, it would probably extend it about a month to two months. I haven't really looked into the student loan side of things, but without moving out, it would get this debt kicked off by, you know, next July probably with how intense I've been going after it. And if I did move out, it would probably, you know, extend that to maybe six more months or a little more than that. So it's just, you know, knowing if I'm mentally, emotionally like good to move out. Not that I don't love my home.

Just want to make sure I'm taking the next right steps and, you know, making the right decision with this debt. Yeah, so we're talking like 11 months versus 18 months. Right, right. You know, at 23, if you were, I don't think there's a wrong answer here. Let me start by saying that. Okay. If you were, I don't think there's a wrong answer here. Let me start by saying that. But at 23, if you're ready to move out and you have the money to do it, you've got first and last month's rent saved. Do you have a little bit of savings set aside that you can kind of just,

to make sure that you can pay for the things associated with the move and getting settled and getting some, you know, at least an air mattress, like having the things that you need to live on your own. I don't know what you have or don't have. Okay. Yeah, no, absolutely. I think I'd be covered there. It would just take the more, you know, out of paying that debt each month and, you know, pushing it out a little further. And here would be my challenge to you because I'm wired this way. And maybe you're one of those like high achievers. I would go, okay, it's going to take me 13 months if I stay here. How can I make it take 13 months even if I move out? What would I need to do with

my expenses and my income? What sacrifices would I be willing to make? How much more dance could I teach? Could I get a promotion at work within the next six months to a year, my annual review? Start thinking in those terms to speed up the process and just keep the momentum. Because that's my thing is, you know, as much as I want you debt-free, I think not losing the progress and momentum is super important if you do move out. Yeah.

Thank you. I appreciate that. Yeah. I don't think there's a wrong answer. If I had to vote for one, I'd vote move out and do George's more intense. Well, I hear Dave rams from my head, and this is the Dave quote, answer if i had to vote for one i'd vote move out and do george's and more intense well i just i hear dave rams from my head and this is the dave quote an eagle that doesn't leave the nest is called a turkey something like that i butchered it dave says it so much better in his southern drawl yeah but you know so you call i moved out at 20 and i had oh yeah you know at debt and i was i had two three roommates and you know you just do whatever it takes. But I think there's an independence and maturity that happens when you,

when you got to pay your own bills and you start thinking about spending differently when it's like, no, this is my paycheck now. Mom and dad ain't, they're not covering dinner tonight. Yeah. That's true. That is so true. My last year that I moved out of my parents' house, I had one year of college left and I was basically couch surfing because I was like, I can't live at home anymore. And so I was paying a small amount to sleep on my friend's futon that was like in the living room. They should be paying you for a chiropractor after that one. It was worth it to me, dude.

All right. Let's go out. We've got time for one more call from Caleb in Vancouver, British Columbia. How are we doing, Caleb? Hey, good. How are you guys doing? Great. How we doing, Caleb? Hey, good. How you guys doing? Great. How can we help?

Oh, you there, Caleb? Let me see. Did we lose theirs, Caleb? How you doing, man? Sorry about that. Oh, sorry about that. I'm just calling for some advice with my growing family. My wife and I are in a position where we're trying to decide

if we want to renovate our home and make way for another baby, or we should potentially be considering selling and buying something that's a little bit bigger for us. Oh, interesting. What would the renovation cost? That's the thing. So what we're hearing from the contractors is $100,000 to $150,000 to turn our one- one one bedroom suite into two likely just at max two so we'd be moving some rooms around wow do you have the cash that's the thing we'd be likely looking at like a remortgage to do that situation um okay what is your house worth that's the thing you guys are going to think it's crazy but

our house is actually worth 1.8 million dollars okay Okay. Wow. But it's a suite, like a three, three up, one down situation where we live with my mother-in-law and she's upstairs and then we're downstairs in the suite. And so we're trying to stay in the home cause we love living with our mother-in-law, you know we we also just need the space because we want to have more children yeah and you've got one right now just one yeah and we're hoping to have a second in the next year but i'm trying to do this planning before we even get pregnant like whether we want when you said three up you're talking about three bedrooms up yeah three bedrooms upstairs one bedroom downstairs hmm so it sounds like there's room for the kids. If we were to, like, cohabitate, but we do try and live quite separately.

My mother-in-law is upstairs in the three bedrooms. What if you flip-flopped it? Could your family be upstairs and she's down? That would be ideal. What's wrong with that? The issue we're having is that my mother-in-law doesn't want to live in the suite she doesn't want to live in the basement suite she wants the comfort of living in the three-bedroom home who owns the house

we have a 60 40 split where i own 40 and she owns 60 is this some weird canadian thing what's that sorry the 60 40 split i've never is this a thing that happens in canada no it was a situation where my mother-in-law was going through a divorce and essentially she was going to need to sell this home so and she gets the vote here well here's the thing let's say you do put on the addition let's say you let's say you had 150 000 today to put on this addition that's going to add a certain amount of today to put on this addition. That's going to add a certain amount of equity to the home. How does that get split? Who decides when it's time to sell the house? How does this work long-term? Yeah. So our 60-40 split is if we grow the house

in value by, let's say, $200,000 by doing this renovation, the agreement would be that we would split whatever. Let's say we were to sell for $2 million in the agreement would be that we would split whatever that, let's say we were to sell for two million in three or four years, we would still split at 60-40. Got it. So the growth is split in those ratios. Now, what would a new house cost to you guys? Could you buy a new house for 1.9 that suits all of your needs? So, well, ideally, if we're going to sell in part, we would likely part ways. Yeah. So my wife and I would probably go for something that's closer to a million, which might sound ridiculous to the listeners, but in my area, that's...

No, I get it. Hey, I'm voting for that right now. I think that's the move. Now, you said you loved living with her, though. That is true. You can live near each other, though. That's what we're thinking, is we want to live near each other, though. That's what we're thinking is we want to live near each other, but we, yeah. Caleb, I wouldn't move forward with this plan.

I'd probably just look for a different home that fits your family's needs, and she does her thing, and y'all visit each other. But, man, that sounds complicated and expensive, and so I wouldn't go through with it, especially because who knows who gets the final say here, who gets the vote, who gets the equity. It's just simply too complicated. That's it for this hour of The Ramsey Show.

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