The Ramsey Show - App - I Don’t Want You To Be a Horror Story (Hour 3)

Episode Date: February 23, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw. This is your show, America, so call us up at 888-825-5225. And as you're enjoying the show, if you could do us a quick favor, it's completely free, hit the subscribe button, the follow button, wherever you're listening. Hit the like button if you're watching on YouTube. Leave us a kind review and let us know what you think of the show. All of that stuff helps us reach more people. It helps make the algorithms happy. And that's what we're all about here is continuing to spread this message of hope in a world gone mad. Curtis joins us up first in Boston,

Massachusetts. Curtis, welcome to the show. How are you guys doing? Doing great. How can we help? Awesome. So I'm in a little bit of a predicament here. Obviously, the housing market is kind of crazy right now. Interest rates are slowing down, but they're still relatively high compared to what my parents went through and so on and so forth. So this past year I made a hundred thousand dollars with bonuses. Um, and I've been pre-approved for 250,000. I am not sure what I can really afford due to the fact that my income fluctuates throughout the year. So overall, I did make $100,000, yes. But some months I'll make $6,000 to $7,000, sometimes $8,000, and then sometimes I make less than $4,000. So it's hard for me to really budget what I can't afford at the end of the day.

And I was hoping you guys could help me out. Sure. So give us a bigger financial picture. Do you have any debt? Yes. Well, I just paid off my college loans. That was about 40K. Good. And I have, thank you. And I have 20K in my truck and that's about it. And then I think 2000 credit cards, but other than that nothing and how much do you have in savings uh i have 41 cool and that's everything that's non-retirement is the 41 000 liquid cash okay and that was i'm guessing that was kind of your down payment fund as you

look to be a homeowner yeah that was going to be down payment fund as you look to be a homeowner? Yeah, that was going to be down payment, closing costs, all that fun stuff. Okay. And then what kind of house range were you looking at? What's the price point here? It's hard because anything below $200,000, it's a fixer-upper, and that's putting it lightly. Yeah. Are you looking at a condo outside of the Boston area? below $200,000 is it's a fixer-upper, and that's putting it lightly. Are you looking at a condo outside of the Boston area? I was thinking about it, but I've always wanted to be a homeowner, to have my own land, my own property. So at the end of the day, I would like to be a homeowner and look around

the 230 range. So 230 would get you a single-family home? Yes. What area is this? I'm curious, because I'm from the Boston area. I'm just trying to wrap my head around this. Western, Western Mass. Okay, cool. So let's say 230 is your goal. I would base your monthly mortgage payment on one of your rougher months. And you can create kind of a peaks and valleys fund. So if you have an 8K month, but you can learn to live off of three or four, then you can put away some of that money to cover you when you have a 4K month.

Okay. So that's one strategy, but it's going to make your whole life more peaceful if you can go, all right, my worst take-home pay is probably going to be four grand. And so I'm going to get the mortgage that's 1250. And that might mean I need to save up for a longer period of time before I get this mortgage. Yeah, and that's kind of what I'm figuring out, that I need to save more and more in order to put that 20% down or more. Well, I've got a plan that will help you, but it's not going to make you happy in the short term. You ready for it? Okay. Yes, sir. That down payment fund is about to turn into getting rid of the truck loan and credit cards fund. And the good news is you can get rid of all of your debt and still have $19,000 left as your

emergency fund. But then you're basically starting from zero with your down payment fund. Correct. But let me help you out. What's your truck payment? $499. You just freed up $500 right there on top of the minimum credit card payment. So now with an extra $500, no debt in your life, how quickly could you save up another $40,000, making $100,000? A lot quicker. Probably a year, a year and a half? Yeah. Okay. Yeah. So that feels like a more peaceful way to do this that will allow you to then put 40, 50 down on a 230 property. And then you'd have what?

A 90,000, 190,000 mortgage? Yes. And so then I would crunch the numbers on the mortgage calculator to go, all right, if I did a 15-year fix, so I don't want this mortgage hanging over my head, 25% of my after-tax income, is it around that $1,250 mark? Is it around that $1,500 mark? Mm-hmm. Now we're talking. Okay. So we got to move slow so that we can move fast down the line, but right now we've got a lot going on at once. Are you investing as well? Yes, I am. I have a Charles Schwab account, Roth individual.

How much are you putting away each month? About a hundred, a hundred bucks. Okay. So not a ton. It's not a ton, but once you've paid off this debt, you've got the savings to do it, but once you get to baby step 3B, which is saving for a down payment,

you get to decide which one you're going to do first. Or if you want to do all three at the same time, you can save for the down payment and continue to invest. Or you can say, you know what, I want every dollar that I can thrown at this down payment if you can save it up in two or three years and then invest after that. Okay. So you've got some options. All right. Thank you. And what was the other question?

How old are you, Curtis? I'm 26. Oh, amazing. Well, you've got a lot of time on your side. And so I know you're itching to be a homeowner, but the difference between being a homeowner at 26 versus 28, not a huge difference. And so I know it feels like, oh my gosh, what if the housing prices go up? And I'm going, yeah, but what if you jump in a home before you're ready with a truck payment and you bid off more than you can chew? And we say that not to scare you, but because those are the calls we get on the show is when it didn't work out like they thought it would on paper and people are in a real financial bind. Yeah, no, I listen to your show all the time and I listen to these horror stories and I just do not want to be one of those guys.

I love that. And you, man, you're doing so well. You're making six figures at 26 years old. So good. You have a bunch in savings. You can clear this debt today. I mean, before your shift at work is over, you can be clear of this debt and be driving that truck completely debt free. And that's what I would do.

Yeah. And you'll be a homeowner in no time. That's pretty amazing. That's comforting to know. You can buy a home in Western Massachusetts for $230 these days. Oh, that's what I would do. And you'll be a homeowner in no time. That's pretty amazing. That's comforting to know. You can buy a home in Western Massachusetts for 230 these days. I know, that's great. You know, he-

It's way outside of the city. That helps. That is true. But he said something that's, I think so many of us get caught in is you're, right now it's really easy to compare where we are financially, where we are with the state of economics,

the housing market to another time period. And it's like- To our parents' time period. Yeah even yeah even 10 years ago when you get caught up in that and like rachel says all the time comparison is the thief of joy and as long as we keep comparing it to oh but back then it was this and in 2020 and it was this and back then it's like you just get swept up in that all over again it's like the wound you keep just opening the wound up and it's like we just have to like john deloney says choose reality and go this is the way it is right now i don't know what it's going to be in the future i can't compare it to my mom i can't compare it to my dad who's on social media the people who bought their houses in 2019 yeah i see these tiktoks jay they drive me crazy and this guy is just riling people up going like do you know

how much harder it is i'm like this guy's not trying to give you hope. He's trying to get clicks and views and just make you angry with no solution. But it's like, just live in where you're at right now and find solutions and find contentment in where you're at right now. And just accept, listen, what a time to be alive, no matter what the time is. And then you can find some happiness and contentment there. That's right. They didn't have smartphones back then. So do you really want to go back in time, kids? I didn't think so. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Well, it's everyone's favorite season. Tax season. The filing deadline, if you didn't know, Monday, April 15th. Mark your calendars. It's going to be a hot one for your federal tax returns and payments. So in 2024, I'll make this painless as possible. You got options on how you're going to file your taxes. So let's talk through them. One option is the IRS direct file. So this year, the IRS is launching a

pilot plan known as direct file that will give you a free way to submit taxes. And only 12 states qualify. Arizona, California, District of Columbia, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. Now, this has to be like a really, really simple tax return in order for you to use the IRS tool. And the timeline's a little suspect.

As it is with the government, it's going to be rolled out in phases and final testing it will be final testing is completed and it'll be expected to be widely available in mid-march by the time most people already filed i don't want to be a guinea pig for this yeah you know what i'm saying i don't know they're making the dead the deadlines a hard april 15th but the rollout is like, I think mid-March we'll have it available, maybe. Yeah. Goodness. And this is software built by the government, so lower your expectations. The same people who brought you the DMV and healthcare.gov introduces IRS Direct File. I don't know about this.

So here's some feedback from the new york times about direct file okay here's some quotes it's a half-baked solution it's a solution in search of a problem direct file is not free tax prep but rather a thinly veiled scheme where billions of dollars of taxpayer money will be unnecessarily used to pay for something already completely free of charge today free to the taxpayer and actually free for the government interesting here's where it gets really interesting guess who the source of those comments was in that new york times article ah if you're guessing it rhymes with furbo wax you're right furbo wax yes turbo tax it was a spokesperson for turbo tax that said all of that which sort of muddies the waters when they're trashing the government yeah i. Yeah, I mean, they want the business.

Yes. So let's talk about TurboTax while we're at it. So we've talked about this. I broke this down. I was real early on the case back in 2021. I talked about this on my narrative podcast series called The Fine Print. Uh-huh, yes. And it was all about how TurboTax is trying to screw you.

Yes. And they're succeeding. So their whole business model is funneling you into debt products. Let me remind you, Intuit owns TurboTax. That's right. Intuit owns Mint. Yes. And they're shutting it down to push people to Credit Karma. Yes. Because they have a hard time selling you debt through a budgeting product, which is meant to manage your money. Debt. They want you to get into it. And so think about that. That was very clever. I like that. So TurboTax and Credit Karma are now in cahoots. They're kissing cousins. That's right. So the FTC ruled they had

committed egregious violations of the federal prohibitions against deceptive acts and practices touting free tax prep on the popular platform. And in reality, they were requiring people to pay for its filing services. So they reached a $141 million settlement with state attorneys general in 2022 for this deceit. And the FTC commissioners ruled that Intuit had, quote, blanketed the country with deceptive ads to taxpayers. And not even good ads, let me remind you, USA Today rated them in the bottom five. If you watch the big game, you saw those TurboTax ads. So they weren't even good commercials. They weren't even the funny ones. And they spent $21 million on sucky ads.

Well, you know, they don't know how to manage money. Where are they getting that money? From you guys. Their whole new model is trying to funnel you into debt products through their quote free tax filing software. So don't trust it. And if you want a better option for self-filing, we introduced one a few years back to help you avoid these traps. It's called Ramsey Smart Tax. It's simple. You can trust it. It's easy to use. There's no hidden fees, no hidden agenda, just low upfront pricing. And it teaches you along the way. It educates you on everything you're doing. So it makes taxes feel less painful, less like you're stepping on a Lego brick. And it's been around for a while. We're not testing it on you guys. No, we're not a guinea pig and we'll never sell your data and

sell you debt. So if you're ready to save up to 70% on the cost of e-filing and file with confidence, go to ramsaysolutions.com slash smart tax to get started. And I think you'll see my smiling face when you get there to encourage you that you can do this. I'm here for you. I like that. RamseySolutions.com slash SmartTax. All right, let's get to the lines. Don awaits with bated breath in Greenville, South Carolina. Don, welcome to the show. Hey, guys. Thanks for having me. How are y'all? We are doing well. How can we help today? Yeah, so I wanted to call and ask. So my wife and I, we are about $220,000 in just through the loan debt, no other debts.

Woo! Yikes. Yep. And we bring in right now about $10,000 a month, give or take. Okay. So we're gazelle, so we've moved out of our one apartment. We're into a small apartment. My wife is picking up extra shifts. I picked up a side gig. So we're trying to knock this out. However, we just found out that we are pregnant first. And so right now my wife actually dropped down to PRN, which is as needed. So she's a physical therapist. So she is full-time. She's jumped on my benefits. However, this allows us to make more

money as a family. The only downside is if she doesn't work, we don't make money essentially. And so with us being pregnant, my question is, you know, we're anticipating her not working for about three months after the baby comes. Right right should we pause paying our debt right now to save up about three months expenses um and then continue back our debt right now because right now we're paying about five thousand dollars a month to our debt yeah um and so we're living on five paying five away so there's no maternity leave here is there's no pay during that time. Exactly. Exactly. Yep. No maternity leave. She's as needed. And you guys can't survive off of your income? I'm bringing in about $3,000 a month. So, I mean, we could. It's going to be tight. We're

probably going to have to get a bigger place. I mean, I would consider this stork mode for you guys. I mean, as much as I'm excited that you guys are gazelle intense you're paying off the student loan until the baby comes I would pile up as much money as you can not just three months of expenses for maternity leave but honestly as much money as you can from now until the baby's born the hope is that everything goes well right and the baby is healthy and your wife's ready to go and then you've got that money that's also there for that period of time where she's not working. And then after that, whatever's left, you can throw it towards the student loans.

How much could you save up between now and then if you just piled everything that you were piling onto the debt? You know, if we save, you know, at least, you know, at the minimum, you know, if we save 5,000 for the next eight months, you know, $40,000. I like that plan. That's great. And beyond that, I think we need to find a way to get your income up because you've

got a big hole. We need to increase the shovel outside of your wife even going back to work. And clearly she's crushing it, but $220,000, that's a big student loan. That is big. And so, you know, I'm doing the math here. Ideally, on average, people pay off their debt in 18 to 24 months. Now, Jade and her husband, Sam, their story is pretty wild. They had almost half a million and it took, what, seven and a half years? That's right. That's right. And so it may not be that two-year mark, but I also don't think this needs to be an eight-year plan. Right. You guys got to get pretty intense. I think it was May 2028 is what our goal was. We're on every dollar, all that stuff. I think the goal is we did $5,000 a month. So four years. And that's if your income doesn't change. And my

plan is your income doubles in the next year or two. What do you do for work? I'm a college football coach. Okay. What's the career trajectory look like for you to kind of move up the ladder and make more money in that field? You know, it's really just a phone call away, and I could double my income overnight. It just kind of depends on if I'm going to get picked up or not. Well, why aren't we doing that every day to win that lottery? How do I get that phone call? Yeah.

Trust me, we're trying. Yeah, I'm reaching out. You got to win some games or what? Yeah, I got to win some games. That's a fact. All right. Hey, let's really put the pep in the step of those players. Yeah.

And what can you do in the meantime to pick up some more money? So I picked up a side gig valeting. Okay. Okay, that's good. And so that's some side cash. Can you do like private coaching or anything like that with your abilities? Unfortunately, no. That's like an NCAA.

It's illegal. Oh, got it. Well, I'd do all the side hustles I can until you can get that income up because we need to be throwing $7,000, $8,000, $9,000 of this debt, and that means you guys have to be bringing in $13,000, $14,000, $15,000. And so find that margin, and you'll be out of debt sooner, but we're excited for you guys and that little baby coming into the world so stork mode stack up the cash and we'll throw it at the debt once mom and baby are home safe thank you so much for the call more of that coming up

888-825-5225 this is the ramsey show welcome back to the ramsey show i'm george camelel, joined by Jade Warshaw. Reminder, Jade and I are doing a completely free live stream right here on The Ramsey Show YouTube channel, and it's really easy to join. Just go to The Ramsey Show YouTube channel, and you'll see our faces there, and the thumbnail says, Build Wealth Faster for Free. That's the name of it. And it's got a little picture of a question mark there. And we're going to show you the free app that will help you build wealth faster.

So here's all the only thing you need to do is hit the notify me button right below the video or on the video. And that will notify you when we're live because I know a lot of people, you know, you want to set it and forget it. You don't want to have to remember. So it's Tuesday, the 27th of February, 9 to 10 Central Time in the morning, 10 to 11 Eastern Time. Do the math if you're on the West Coast. Sorry, that's too much for my brain. And we'll also put the details in the show notes of this episode wherever you're listening or watching so that you can join us. We're going to be showing you how the EveryDollar app can help you and answering your questions, taking your calls, even answering questions from the chat, from the YouTube chat, which we rarely do. Real time, baby. Real time. We're going to be

little talking heads and the focus is going to be showing you the tactics of how to use EveryDollar to build wealth and to get control of your money. So hope you can join us on the 27th, 9 a.m. Central Time. Valerie is in Sacramento, California. Valerie, welcome to the show. Hi. Hi, everyone. Hello. Just to give you, I'm $34,000 in debt. Cancer was in 2021. March 2022, we got ripped off by a contractor of about $25,000. Shoot. Yeah. My credit score was really good, so I was able to get a credit card from my credit union.

I was also able to open up a couple of credit cards in order to get materials to finish because it was, not only did he leave us in a hole, but some of the things that he did was messed up as well. And so now we're just at the point to where we can't pay it. You can't pay the $34,000? We can't pay the $34,000, and things are just really tight, and things started breaking down other than the stuff that was fixed in the house, and everything is not even fixed. Was this like a fixer-upper situation? What happened? gains from my dad. My dad passed away and me and my sister live in the house. I have three other siblings that own the house as well, but they're all out of state. And so it's just me and my sister living in the home. So we're paying the mortgage on the home, which the mortgage is only $1,600. I'm a little over $1,600. What's your income? And I bring home, oh shoot, growth is 40,

40, 40, 47. Wait a minute, it counts backwards. Yeah, about 46, 46, 56, something like that. And you're splitting this mortgage with your sister splitting the mortgage with my sister splitting everything with my sister so is it 800 a piece then for the mortgage yes it's about 8 so all the siblings you said own the house

though right your dad left it to everybody yeah so my question is so you're putting in this work to the house is everybody chipping in for it since everybody has a piece of the equity? No, no. Why? No, because they don't want to. And you're just thinking, I'm going to live here and it needs to be a place that I want to live in.

So I'm going to spend my money to fix it up. Fix it, yes. Yes. So when the time comes to sell, they're going to get a piece of what you made proper and profitable there right there is nothing that that we can actually do about it except for um uh he told us uh when it was a living trust so he told us that we could um actually charge them for so like if we sell the house now and we have, you know, like $160,000 left on the mortgage, if we sell it now, whatever we've paid for the last 10, almost 11 years that we've paid on the mortgage, then we can actually make them pay it back to us.

Through the net proceeds? Right. For what we've paid into, we can actually make the three of them pay us back for it, if that's what we want to do. What does your sister make? What's her income? My sister makes just a little bit more than I do a month um and the 34k is that between the two of you you're both is both of your names on this debt um no my credit was really good so i

opened up these these credit cards but she is she and me and my sister we don't have any issues whatsoever she's paying she took on two of the credit cards, and I took on the other two credit cards, and then whatever else we have together. I mean, you know, separately. And this adds up to $34,000 between all of this? No. That's just your piece.

Mine add up to $34,000. What's the other portion? The cards that are on my name. Say again? What's the other portion that she owes? That's her stuff. I don't know what she owes. Okay.

All right. The $34,000 is every credit card that is in my name, but there's two of them that when we opened up, we opened up four credit cards. When we opened those up, it was to fix the house. And she's paying two of them. I'm paying the other two. So you got two equal $34,000. Two cars, $34,000 balance between them. Say that one more time. You got two cars, and they have a $34,000 balance between the two.

In your name. The ones that you have. In my name. In my name, yes. There are two cars. And then the other ones we won't worry about because those are in your sister's name you're saying you can't afford this what are the minimum payments on these cards uh the cards the minimum payment one is one is 50. One is 171. One is, oh gosh, they're all in the 100s. You said there was only two.

Unless you have debt from other places other than this renovation, is there other debt laying around that you have? Yes. And so the total, that's what I'm saying. The total of it is 34, 34,000. So list out the different forms of debt that you have. Let's just go one by one so we can get our heads around this. List out everything that makes up the 34,000 if you can. Um, okay. So I have, um, I have, there's two credit cards. We know one's two 51s, one 71. What's where's the other? Is it personal loans? What is it? No, it's not personal loans. They're all credit cards along with my car notes. Okay. But my car notes are not in, my cars aren't in there. It's the $34,000 that-

That doesn't include your car loan. Say that again? That doesn't include your car loan, the $34,000? Yeah, it doesn't include the car loan. What's left on the car loan say that again that doesn't include your car loan the 34k yeah it doesn't it doesn't include the car what's left on the car loan um probably oh um maybe about three years on know how much money or years on both car um 20 28 and 20 and 30, 31. Why do you have two cars that are so expensive? Okay, so once again, my credit was good, and my sister needed a car. Okay, that's all I need to hear. Valerie, Valerie, Valerie, help us help you.

This is a nightmare. Yeah. I think you need to get out of this house and cut ties with family because they aren't doing you favors. You're not doing them any favors. Y'all are causing each other to make bad decisions. Whoever has the good credit of the day makes the next bad financial decision. Yeah, you've got to get...

Honestly, both of these cars, the one that's in your... Both of them are in your names. The one that's for your sister, you of these cars, the one that's in your that's both of them are in your names. The one that's for your sister, you have to say, listen, I bought you this car. I can't afford it. And so you're going to have to find a driving situation for yourself because I have to sell this car and I can't afford whatever comes next. So you're going to have to have that tough conversation, give her a timeline. And then on your car, you've got to sell that car. You've got to sell it and drive something far less expensive.

Are you underwater on that car? Do you owe more than it's worth? No, actually, I don't. No, actually, I'm not. So then, yeah, we're definitely getting out of them. Do you have any savings? And that's no, I don't. Because we took what we had to try to fix, and then...

This home is a money pit, and you need to sell it. It is not a blessing from your father. It is a curse on your family. It's time to get out of this and straighten up your financial life, Valerie. This is The Ramsey Show. Our scripture of the day, James 1.12. Blessed is the one who perseveres under trial because having stood the test, that person will receive the crown of life that the Lord has promised to those who love him. William James said, most people never run far enough on their first wind to find out they've got a second.

I like that one. That's good. People get so close. Makes you want to go got a second. Ooh. I like that one. That's good. That's good. People get so close. They want to go for a run. I know, right? Listen, I'm training for a half marathon now, George. Wow.

It's not pretty. Well, it's not your first. No, it's not. You've done this before. It's not. But it's been a while. It's been a while. It's been a while.

That's a deep cut. I couldn't do a 5K if you paid me money, so I'm impressed with you. Yeah. I'm not impressed with myself yet. Producer James has seen me run because he forced me to go one time with his fitness crew that he has. They lapped me so many times that it became a running joke. Ah, a running joke? I love what you did there, George Campbell.

It's the name of my new comedy special. It's called A Running Joke. That's how I thought a 401K was a really long race. Now, that's the only thing that ends with k that you'll see me being a part of, Jade. 401. That's what I'm all about. George, alright. We're getting spicy towards the end

of the show here. I love it. I'm here for it. We're having a good time. Alright, Ashkahn is next in Nashville. Just up the road. What's going on, Ashkahn? Hey, how are you guys? Doing well. How can we help? I appreciate you guys taking my call.

So I'll make this quick and fast if I can. I'm in law enforcement, so I don't make a lot of money, obviously. Why obviously? There's some law enforcement folks out there making high six figures. Well, they must be way up there in these big cities then, I guess. Yeah, they are. Are you in the Nashville area or on the outskirts? I'm on the outskirts.

I actually live in Kentucky. I'm a state trooper, and Nashville's about 45 minutes from me. Okay, got it. If we ever get pulled over in Kentucky, I'll be looking for Ashkahn. I hope it's Ashkahn, and remember what we've done for you. I got you guys. Those Kentucky state troopers scared the crap out of me. Well, we have a reputation. It's usually good. Well, we'll try to keep you happy today. How can

we help? Oh, I appreciate it, guys. So basically, I don't have a lot of debt. The only debt that I have, and I've worked really hard to be debt-free, is just for my home. I own $103,000 on my home. I have a little bit of money not a whole lot i'm basically looking at investment opportunities i wanted to kind of just see what you guys recommended i'm basically just found out that i'm when i do retire in about another 15 years 16 years i'm only going to get you know half of my retirement or 50 of my high three so to speak what i made my highest three years as a state trooper um which isn't enough to live on. Obviously, I've been thinking of getting into rental properties. I've been trying to educate myself on those opportunities. But, you know, with the housing

market the way it is and things I'm hearing from people that are already into it, it's a lot of a headache and I've already got a crazy enough job that keeps me busy and things like that. Okay. So how old are you today? I'm 43 years old. Great. And do you have any other retirement options through work? So I do. I have a 401k and then I have what's called a deferred comp. I'm sure you guys have heard of that I pay into as well. About $150 a paycheck. So about $300 a month towards that, which isn't a lot, I know.

And you also can use a Roth IRA outside of your employer. I thought about using that, and that was another option I was going to ask you guys about. I've been told to look into getting a Roth IRA and put money into one of those. I'd go to that. I would do that before you go, quote, invest in real estate opportunities, because right now your focus, you said you have no debt outside of the mortgage. That's correct. And you have an emergency fund i have well i mean i was going to i have twenty six thousand dollars in savings and i've done a whole lot i've got eight thousand in my checking that's basically all i have financially what's the ak the 8k and you're checking is that

for this month's bills or is that some saved money that you have earmarked? Some saved money that's just in my checking that I've built up. Okay. Are you single? I'm not. I'm engaged with three kids. We've been together for 10 years. She doesn't make a lot of money. She only makes about $30,000 a year.

When's the wedding? She has no debt either. The wedding is near the end of the year. We don't know if we should delay it until next year. No, I wouldn't delay it any further. You've been together 10 years. We have. Believe me, I already get enough crap from her and everybody else while I wait.

Okay, I won't give you any more crap, State Trooper. I won't press my luck here. Listen, combine the $26,000 with the $8,000. Call that three to six months of expenses. Is that fair? Is that three to six months for you? Yes. And then you're off to the races with investing 15% of your income.

And then trying to attack that mortgage. That's my goal for you. When you're 60, you should be completely debt-free, no mortgage, and you have been funding the Roth IRA and the 401k at 15% until the house is paid off. Is there any sort of match on that 401k? Or it's just as it stands it just as it stands and that's another thing is i've been trying to make an extra i have been making an extra payment every year on the mortgage sometimes twice a year just to try

to bring them you know that's good but i don't want you to do the mortgage at the expense of the 15 so the thing with baby steps four five and six is you do them simultaneously but you do them in order simultaneously and you do them in order simultaneously and you knock out as many of them as you can so you've got to do four before you do five and six like you don't do six instead of four does that make sense so you got to do the 15 first and since there's no match on your 401k i do like george said and i'd max out a roth first you can put seven thousand dollars in there when you and your wife get married. She can put $7,001, and then you go back to that 401k.

You have up to $23,000 that you can put in that, so that's a lot of money. And I would do this deferred comp thing last simply because you have less control over that. And that's the way I would work through this. What's your income? I make about $69,000, $70,000 a year. Okay, so $70,000, if you were just going to invest 15% of your income, that's $10,500 a year is what you want to be putting away. And that becomes $875,000 a month, which means you could fully fund a Roth IRA and still put a few thousand to the 401k. That's right. And if you do that, let me tell you...

Even at the market, I apologize for interrupting. Even at the market, everybody's talking about what, you know, everyone's expecting a big crash. Who's everybody? Fox News and some apocalyptic guy on the internet? Yeah. Yeah. I am from Kentucky, so there you go. Well, there it is. Well, I'm telling you, man, if you can turn off the inputs and the headlines, what you'll actually see is the stock market is way up this year.

It is. And next year, it could be down. But then next year, it's going to be way up. And so the S&P 500 is is hitting a record high and so that tells me that the i have faith in the u.s economy as a whole over the long term that's true i don't have faith in any politicians but as the economy goes i feel good about putting my money into mutual funds and index funds in the stock market and the good news is if you look back on the record, anytime it's crashed, it's recovered very quickly and very, very, very well. So people have ended up, if they stuck by it, they ended up on the upside.

So hopefully that gives you a little peace. Do you recommend, no, I'm truly grateful. Thank you. Do you recommend we do two different separate Roth IRAs, me and the future wife, or do our own? Yeah, do them separate. One for you, one for her. If you can max that out every year, as long as you have income, you'll be crushing it. And I did some math for you, Ashkahn,

to give you some hope. If you start with zero in one of these retirement accounts and you put that $10,500 a year into that for 20 years from 43 to 63, assuming a 10% annual average return, which is what we've seen in the S&P 500, you would have over $600,000 in that account at 63. That ain't bad. And that's if your income never goes up. And that's not including anything your spouse does. Wow. That's just that one account. I appreciate you doing the math for me. Well, that helps me because I go, okay, what's the reason I'm going to invest 15% year after year and just live on everything that's left? That's the reason right there. So that when you have 50% of your income,

you also have an account with 600 grand in it that you can pull from if you need it. Awesome. Great. I hope that encourages you. I'm so glad I called. I truly appreciate it and grateful for you guys. Thank you so much. You too. Thank you for serving your community in that way.

Remember me when I get my next ticket. I know. I'm like, love the state troopers, as long as they're not behind me with the lights on. I know, that's right. That's encouraging, though. I think that helps us just look at the math. Yes. Because when you're just focused on what the market's doing today, and look, I could be doing it in real estate opportunities. Yeah. I say slow down.

Yeah. Because that investment account will cash flow potentially way more than that real estate opportunity when you got it with nothing down, high interest rate, 30 year on top of your other mortgage. That creates too much risk and stress going into retirement. And it's important to make sure you're doing four, five, and six, like we said, consecutively, but at the same time. Because a lot of people, they start thinking about their age, and they're like, I got to get this house paid off. And so they pull back on investing.

But I'm like, chances are you're going to be living in your house. You need access to liquid money. Absolutely. And so you need to make sure that you're doing that 15%. And then anything above that, that's what you're throwing on paying off your house early. That's the gravy. And if you want to know more about when to invest in real estate,

that's Baby Step 7, Do It In Cash, and Dave's new book, Real Estate the Ramsey Way, covers that as well as how to make home ownership a blessing, not a burden. So check out Dave Ramsey's new quick read. It's real short, 60, 70 pages. You can read it this weekend. Get it at ramseysolutions.com slash store. That puts this hour of the Ramsey Show in the books. I'm George Campbell. She's Jade Warshaw. We'll be back before you know it. you