The Ramsey Show - App - I Love My Job but Don’t Think I Can Get Promoted (Hour 1)

Episode Date: November 18, 2022

Ken Coleman & George Kamel discuss: Looking for a better salary at a job you love, The best way to trade-in a vehicle, When you should buy your first home, Selling a truck to pay off debt. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, this is The Ramsey Show. It's where we talk with you about your life, your money, your work, and your relationships. I'm Ken Coleman, joined by George Campbell. It's been a great week so far. On Monday, Dave and Christina talked about student loan forgiveness and so much more.

George and Dave on Tuesday talked about the FTX collapse. Oh, boy. Warren Buffett, his comments on Bitcoin and all the things. And then I told you so from Dave. And then George and Christina talked about a debit card with rewards. Rachel and Dave yesterday took on an interfering mother-in-law trying to do a budget for her son, a pregnant wife whose husband refuses to buy her soap. And in general this week, we've taken calls on buying a house, investing, tackling debt, buyer's remorse.

We even had a theme hour on how millionaires built their wealth. It's been a great week. We've got a lot done, and we're continuing to keep going today as George and I take on your money calls and your work calls, anything work-related. One quick point of clarification. The husband refused to buy her soup, not soap. What did I say? I was wondering. You said soap, and I was like, either way, it's such a hilarious, weird story. Well, I'll be honest with you, folks. The talking points were a little overwhelming, and I was trying to get through them quickly for your listening pleasure and uh it came out soap i don't know what's worse soup or soap well i thought it was actually more provocative that the husband wouldn't buy his wife soap now there's a it was

pretty provocative with soup but soap would be a hygiene issue i would have left it alone for the viewing and listening audience james i would not have needed to bring this up but anyway if you enjoy the show uh we'd love for you to share it, subscribe, leave a review. But more importantly, just share it with a friend. And George and I are here today to combine money calls, work calls. So specifically, you understand the money calls. If you're new to me and the area of work focus, pretty simple. If you're not where you want to be, spend more time at work than you do anything else,

and your income is directly related to how much you enjoy your work, how good you're doing it. So if you're stuck, you need a breakthrough, you want to move up the ladder, can I do all this while in the baby steps? The answer is yes. So I'm here to take some of those work calls. So let's get to this, George, now that we have sorted out the soup with soap. But boy, I think I'd keep keep that the same can you imagine a pregnant wife and the husband won't buy her soap i mean hygiene or food either one is a bad situation yeah yeah well let me tell you something uh i remember when stacy was pregnant i got her whatever she wanted if she wanted a giant jar of pickles i was on my my way. Happy wife, happy life. Those hormones and those taste buds. It's like it's a wonderful life.

You know, the moon, I'll bring down the moon. You get them what they want, George. That's marriage advice for everybody. All right, let's get to the phone. Steven is on the line in Pittsburgh, Pennsylvania. Steven, how can we help? Hey, guys, thanks for taking my call. You bet.

What's up? Well, hey, guys, I got a career question, kind of in a weird place. So, actually, I love the job that I have right now. Like, I am super valued. I'm thankful for the people that I work with. I feel fulfilled at the work that I'm doing. If I had to pick out one thing, you know, it would be I wish I made a little bit more money. Okay.

And, you know, I actually had a job interview today, and it is for a little bit more, but I just have trouble leaving the job that I'm enjoying so much but also at the same point you know only being 30 I'm early in my career and I just feel like I need to be ambitious towards salary so I just don't know what to do. Okay this is a really fun question I like this let's focus on what you're doing now that you really enjoy what is the work? So I'm an archivist for a large company that dates back with a rich history with this country. Okay, great. And you love the current work, and my guess is you also like the team, the people.

I mean, it's a good, healthy environment beyond just enjoying the work, correct? Yeah. So first off with the work, know it's history rich as i mentioned so i really enjoy digging into that but then also the team that i'm with i mean you know it just seems like every day they're thanking me for the work that i'm doing how long you've been there how much i'm appreciated about eight years how long eight years okay so what's the ladder look like in this type of work what's up the ladder for a guy like you knowing what you love what what is it if you were to continually get promoted what would that look like unfortunately i don't really think

there is one so the company i'm with i can absolutely promote but not within like the same area what i'm doing right there's actually you know with my job i'm the only one in the country you know one archivist for this company right so what do you love most department do you love the work with history around history for history or do you like the detailed nature and the specific nature of being an archivist which is most important to you i'd say probably the history so now we have a ladder my friend you are you have hit your lid with this organization in this particular job, but you have not hit your lid with the organization if we open ourselves up to other jobs. Is that what I'm understanding?

Probably. I don't know how many jobs they would have as far as their history goes, but it's worth exploring. That's next step. That's my advice. Before we take the other job opportunity i know you just interviewed today so it's not in front of you but before we consider leaving let's look where we are because of the way they treat you it is really really really important that you're in a healthy environment where people care about you they're willing to

develop you and then they're willing to develop you, and then they're willing to promote you. And what we got to find out right now is the promotion piece. Are there jobs within the company, whether they're listed as open or not, are there jobs that if they were open, you would be interested in? And would it be fulfilling to you? And I'm going to give you my assessment, the get clear assessment. It's a 20 minute assessment. And essentially it will spit out a purpose statement for you as well as a detailed report on talent, what you do best, passion, work you love, and mission, what motivates Steven. So I'm going to give that to you as a confirmation of what you love about what you're doing now and then what other jobs would be a good fit for you. So next steps, where could I go? Where would I want to go in my

current company? Then we start looking outside and we don't just move for a larger salary, but we say, where can I make more money and do the kind of work that I really love? You've got to see what's out there. Make sense? It does. Yeah. But don't just take a job for the larger salary because you're in your 30s and you go, I should be making more money. I should be more ambitious because here's what will happen. We're seeing a tremendous amount of workers right now that are regretting. It's called the great regret. They're regretting leaving their job for more money and so-called better benefits and the grass was not greener. And that's what you don't want to do. You want to talk about feeling stuck is making a move

and making this huge transition out of some place that you love being, and then you get there and you go, ugh, because I can tell you this, George, the paycheck wears off. Well, people call your show on the other side of this. They're like, Ken, I took the job for more money and now I'm miserable. Should I take a pay cut for the job that I love? Right. Which is exactly where he finds himself.

And you always say, well, it's not an either or. You can do both. Yeah. Well, you study money stuff and money habits all the time. We humans quickly get over a fatter paycheck, don't we? Oh, yeah. How quickly do we spend it and adjust our lives to that new check? Lifestyle creep.

There's a name for it. Right. Because human nature is, well, I have more money. I should spend more money. So now you've got the lifestyle creep. And so now the excitement over the bigger paycheck is gone. And then you're working with real creeps. So you got lifestyle creep and you're working with creeps. Oh, that's good. A whole lot of creep going on, George.

That's a whole different scenario. Well, that's what's going to happen if you go, well, I feel like I need to be here. Wait, wait, wait. It's okay to feel like you want to make more money and you can make more money and really enjoy the work you're doing. You've got to be patient, though. Both and. Hang on the line, Steve, and we're going to get you the Get Clear Assessment. For the rest of you that need that clarity, you can get it at RamseySolutions.com, the Get Clear Assessment. Go.

We'll be right back with more of your calls. welcome back to the ramsey show where we talk about your life with you we'll give you a clear path to breakthrough and transformation so that you can win in your money, in your work, and in your relationships. I'm Ken Coleman, joined by my colleague, George Campbell. We're both rocking the denim today, by the way. So much denim. You've got the dark denim, and I've got the, I don't even know what you call it, but there it is. Medium denim.

Medium denim. Andrea is up next in Greenville, South Carolina. Andrea, or Andrea, which is it? It's Andrea. All right, I guessed guessed right that's very exciting what's up um so for the last year I have been wanting to embark on a debt-free journey and I finally think I have my husband um ready to do this with me but my ultimate question is the vehicles. We have two vehicles that we owe money on, and do we start with one vehicle that we trade in, or do we do both at the same time?

Now, when you say trade in, are you looking to get a different vehicle at the same time through the same dealership, or what? Well, I guess ultimately trying to get rid of that debt. Okay. You know, when I'm trying to eliminate, we have three debts right now. Of course, student loan is getting ready to start back for me, and I know that we own that together. But we just really made some crappy decisions with vehicles, I feel like. And we have very nice vehicles, but it's just a lot of debt. So walk us through what the loans are on these cars and what the cars are worth. Okay, so we have the two car loans. My husband has a truck. We still owe about $26,000 on the truck. I have a vehicle, this main family vehicle, SUV, and we owe $33,000 on that.

Then couple that with the student loans that I have, that's about $45,000. So that's just a huge number to me, and I just want to do what I can to set us up for the future. Well, that's a great first step. The fact that you guys are willing to sell the cars to get out of this tells the future. Well, that's a great first step. The fact that you guys are willing to sell the cars to get out of this tells me that you've had your I've had it moment where you drew the line in the sand. You said no more debt, no more games. We're ready to be free. So do you know what the cars are worth? Have you done your homework on that end? I have, and we can get more for each. Yes. I mean, my car, I could probably get 43, so that's, what, 10,000 or so equity in that.

And then the truck? Yeah, the truck, I would think the same. I mean, again, they're both new vehicles. You'd get 43 for the truck? Within the last year. No, I could probably get about, we could probably get about 30 for the truck. Okay. So you'd probably make around four on that one. That would leave you with no cars and $14,000. And now you got to turn around and go buy two cars for $14,000. I guess, or do we do one at a time? Yeah. Well, you can do both at once. Obviously you got to

make sure you have a car at any given moment. But I would not do a trade-in for these because you're going to get much better value if you sell them outright. Because with a trade-in, you're trading it in for another vehicle at the same time. So those dealerships aren't going to give you as much. You can see, but a lot of these dealerships, you're not going to find good deals. You're probably going to need to go over to AutoTrader, Facebook Marketplace, Craigslist to find a car that is, you know, $6,000, $7,000 SUV and truck. And they're not going to be pretty. Let me warn you right now. They're not going to be these beautiful vehicles that you're driving. So get the picture

out of your head that it's going to have the leather heated seats and have no dents or scrapes in it. Okay. Well, I'm going to record that for my husband oh yeah what i i this is what i want to know i mean you said at the start of the call that i've almost got him you know kind of he's almost there and then we're about ready to hit him with he's got to sell his truck and boy is he gonna recoil on that that's gut-wrenching for most am i right yeah oh absolutely absolutely has this been brought up already? I can get this car. Oh, yeah, yeah.

I mean, we've discussed it, and he says that, you know, oh, I'll just get a car. It'll be better gas mileage for me going to work anyways. But then the cars he keeps showing me are $20,000 and $30,000 cars. Oh, boy. What is your household income? It's $150,150 a year. Okay. What if, George, I'm just, you know, let's just see here. What if, I wish he would lead. I really do. He needs to man

up and lead, but he's not there yet. What if Andrea sells hers, all right, and she pockets $10,000, all right, and she goes and gets a $10,000 minivan or SUV or something like that, and she puts him in the corner where she's like, you haven't manned up, so I manned up for you. And I don't mean to be ugly about it, but, you know, like, come on. He sees her put her money where her mouth is. And then, Andrea, now you go, now look, I'm just telling you how convinced I am. Babe, I'm doing this.

I did it. You can do it too. Yeah. Now, he has two options there. All right? You guys save up. He sells it, you know, and then maybe he gets a $10,000 car. So he has to hold on to it.

Or he gets really serious about paying the current truck off. That's the other option. And so that's what I wanted to let you know, Andrea, is looking at the numbers, we say the total of all of your vehicles, anything with a motor in it shouldn't add up to more than half of your income. And right now those cars are butting up right against the line and it makes me uncomfortable. And I like the leapfrog going, hey, we can clean this up so much faster. And instead of a two-year journey, this could be a one-year journey. And so I love that for you guys, if that's the vision you have. But we say, if you can pay it off within two years, it's okay to keep it if it's within those parameters. And

making $150, you guys could pay off this debt in two years. But I think one of you should sell the car and have that level of sacrifice. I wish it was him. I don't know that we can get him there just through a phone call. What's the payment on your SUV? On yours, Andrea? It is about, it's probably $650 a month. Yeah, so keep in mind that not only are you selling it and you're going to go buy a $10,000 SUV, that $650 a month goes towards paying off his truck. That might get him all in. Yeah, I didn't think about that. Yeah, which that would be your next smallest debt.

Now, are the student loans split up? Are they a bunch of smaller ones? No. No, I actually consolidated. They're all mine from when I went back and got my doctorate degree right before COVID. Okay, so it's one $45,000 debt. Yeah, it is one $45,000 debt. Yes, it is one $45,000 debt. All right.

Well, I like this plan so far is at least selling your SUV, using the 650 towards the truck. And by the way, there's going to be other sacrifices in your budget you guys need to make. And it means, hey, you're not going to eat out. Sorry, hubby.

Right now we're focused. We're making food at home. We're cutting subscriptions. We're cutting all the luxuries right now because right now we are not living in luxury we're living in stress and if you're taking on the burden of that stress and he doesn't feel it you need to sit down and have a real honest conversation and say i'm not okay i'm not doing well and we're in this together i need you to have just as much skin in the game speaking of skin in the game andrea i want to know is he willing to work a part-time job or sell a bunch of stuff? Have you had that part of

the conversation? If he gets to keep his truck, then this is what he has to do. Have you guys talked about that? Can he do that to add more to the $600,000 plus that your SUV payment is now going to be applied to that truck? Can he do more there? We have not discussed that. That needs to be discussed. I think more discussion all around is going to be good for you. I wish he was on the phone right now. I'd be guilting him into all kinds of stuff. He needs to be selling stuff, working, because here's where I'm going, George.

I'd like to see how much we could juice the $600 plus car payment that we're going to put towards the truck that's coming off of her suv what if we got to a thousand bucks twelve hundred bucks a month towards the truck and then six eight ten months from now now he can sell that truck pocket enough to be able you know what i mean like or just pay the thing off really fast and keep the truck that i want to try to motivate him by keeping the truck but he's got to pay it off fast. How quickly do you think you could pay off $26,000

if you freed up that payment and you guys got intense? Oh, I mean, I think we could definitely do it. Yes, absolutely. We could do it very quickly. Less than six months? Mmm. Yeah, I think we could.

I think that's our carrot. We're going to dangle that in front of hubs. You get to keep the truck. Yes. That's a good one. You get to keep the truck, but you got to pay it off. And, Andrea, I'm going to gift you Financial Peace University and see if he'll go through this with you. Watch all nine lessons together.

Don't do this on your own any longer. And we're going to gift that to you. You can convince him to actually sit there and watch it with you. Yeah. I'm going to try my best. All right. Appreciate you for calling in and being honest with us. Better days are ahead. And I tell you what else is ahead, George. What's that? More of America's Call. I should have known. More breakthrough, more transformation, because there's more of the Ramsey show i'm kid coleman joined by george camel we're here to answer your questions about your life, your money, your work, your relationships. They're all intertwined, and we

want to give you some practical steps so that you have hope, and then that you have a clear path forward for that transformation that you desire. Orange County, California, one of my favorite places, George. No bugs. Beautiful over there. No bugs out out there didn't realize that yeah not i mean that's probably not completely accurate but i don't ever remember sitting outside ever feeling like there were gnats and mosquitoes you know like we have here could be a tennessee problem yeah i like it tom is there in orange county tom how can we help hey there how's it going good Good. How can we help, Tom? So I'm trying to figure out, once I have the financial means to buy a house,

should I go right into doing that? Because I'm kind of sick of paying rent out here, and I'm trying to figure out, if I don't buy a house, where I should invest and kind of what the next best move is. Okay, so you're saying when I have the money, is it wise to buy a house or should I just keep renting even if I have the money to purchase? Yeah. Or how much money should I have additionally compared to what I have to put down for the house for savings and for other things like that for security and everything. Kind of the new levels, new devils of home ownership and all the things that go along with that. Exactly, yep.

So how much do you have saved right now? $100,000. Awesome. Do you have any debt? Nope. And do you have an emergency fund on top of the $100,000 or does that include everything you have? I have that and then I have $30,000 in an IRA.

In an IRA? Yep. Okay, so that's retirement. So we're not going to count that. We're not going to touch any retirement funds. And how old are you? 25. 25, way to go.

What's your household income? $300,000. Wow. All right, this is all looking good to me so far, Tom. So have you started looking at the prices of homes that you'd want to buy? Something reasonable? Yep. So here's another thing. So I live with my girlfriend and so we could, together we have hundred thousand dollars oh boy so we're trying to figure out do we keep running do we do get married first do we buy a house just we're in california so outrageous but it just seems like it makes sense to buy um i i want to jump in here i want to jump

in here joel can is jumping in yeah ge George is all over the money stuff, but what does the we look like? What's, I mean, like, were you planning to put a ring on it and marry this gal or is it just kind of, well... Yeah, so that's the plan. When? We're not engaged or anything yet, so the marriage would have come a couple years down the road. Is this a one-year plan or is it a five-year plan? What are you thinking? I would say we're married in two to three years.

What's behind that? What's behind the two to three years? I think just kind of the planning of the wedding and kind of just getting everything together. Whoa, you're living together now. I'm super busy right now. You guys live together now? Correct, yeah. But it's going to take two to three years to get married?

I mean, it could be sooner if we want to. I mean, life's just really busy right now, so it could be. Ideally, yeah, that's what I think it will be. I'm going to challenge how busy you are. I've got three kids. You don't even know what busy is. Okay?

I don't even want to hear it. All right, I'll say that with all love. All right, George, cranky old man is done. I think he needs to be committing. Let's commit. Let's get married. Combine those budgets, George. Yes.

Combine those numbers. I'm with Ken on this. I don't think – definitely do not buy a house together. That is a terrible, terrible plan that will end in heartache for a lot of people and financial turmoil. So if you are going to get married, then sure, once you're married, buy a house together. But if you're saying, hey, I'm going to buy a house, I don't know that you're ready in the next year to buy a house because I'm assuming Orange County home prices are, you're talking

what, $850 for a starter home? Yeah, the median's at $950 right now. Okay. And so you're looking at now, you don't need that. You could buy a condo, right? What do condos go for? Yeah, you're probably still looking at maybe $650 to $850 in that range, maybe a little less. Okay. So once we figure out here's what I'm aiming for, and if you want the single family, that's fine, but it may take an extra two, three years to save up for that with a down payment. And so we've got a great calculator over at ramseysolutions.com that you can use, the mortgage calculator, where you pop in the home value, pop in your down payment. And I want you to do this on a 15-year fixed rate mortgage because your life is too precious and life is too short to have a

mortgage hanging around your neck for 30 years. And so with a 15 year mortgage, it's paid off in 15 years, worst case scenario. And I want that payment to be no more than a quarter of your take-home pay. So what is your take-home pay now just after taxes before any other deductions? After taxes. So it's a little confusing just because it's sales. And so our paycheck's a little bit different. Um, maybe between 10 and $20,000. So it's kind of a, kind of a wide range. Okay. So you'd be looking, let's take the, you know, the average, whatever your tax returns were and go, all right, that's going to be, I'm going to divide that by 12 and then divide that by four again to get my 25% of, uh, the takehome pay number. And that kind of starts to give you a picture of, all right,

I need this payment to be $3,000 max. And then that dictates, here's how much down payment I need to have in order to make this very reasonable. Because your life, you have other things in your life too, other than your house payment. You want to live, you want to go on vacation, you're going to need to upgrade the car, there's home maintenance costs. And once you're married, the income is going to go up, right? Yep. So I like the plan of continuing to save up. Let's see, you know, make it some aggressive goals. Can I save up $100,000 in the next 12 months? $150,000. And then when you guys are married, man, now we're making, how much does she make? 90, so it'd be 390.

So now we're making close to 400 grand, which changes the numbers of what we could afford as far as housing goes. And maybe she saved up some money because she was living the debt-free lifestyle. And now we've got, now we can get the single family home six months after we're married. And that changes the picture. So then with the, with the condo the condo, would you say sell that, or then you would just keep investing in that and rent that out? You could upgrade later, but again, I don't want to rush into any of this stuff. With $100,000 and you're still going to

have to go spend $600,000 on a mortgage, that's a lot of your world tied up right now, especially when you might be saving up for the engagement ring and the wedding and other life expenses. So I would just use that as a filter. For example, me and my wife, we bought a townhome because we didn't want to wait another five years to save up for a single family home in the Nashville area. And so we were okay with that. And that helped us get into a home faster. In the meantime, where would you invest $100,000 or additional money that I saved? I would park that in a high-yield savings account for now. You'll get about 3%, which I know is like, well, I could do better in the market.

Yeah, well, the market, if you've been paying attention, also has not been doing so hot up until about four seconds ago. And so I don't want you losing this money with a short time horizon, which is what you have ahead of you. You know, you said, hey, two to three years, I'm probably looking at buying a house, getting married. So I don't want it in a riskier investment in the market where you might be down 20 grand when you go to make that purchase. Does that make sense? Yeah, I'm definitely feeling a little bit of that right now. Yeah, you don't want that anxiety of trying to time the market. Yeah. Okay.

Yeah. That was a great plan. I appreciate it. Yeah, and I want you to talk to your girlfriend and find out what kind of wedding she's wanting and all that. I'm dead serious. I would be finding out, like, what is her vision for a wedding? Does it really need to be two to three years? Because, listen, I have a little extra homework assignment for you, Tom.

I want you to go look up the value, the health value, the financial value of being married. The benefits of being married are so transformational when people realize you just look at the data. And you're not just talking about a tax benefit. No, no, no, no, no. I'm saying like they're happier they they make better money they're healthier um and you guys are already

living together you're playing house let's make it official man and and go get that house that's what i think yeah that's a good word but you know i'm not trying to force that on anybody i'm just saying forget your religious views for a moment just look at the the socioeconomic, the health, the financial, all that. There's real benefit in being married. There was a recent study that showed married couples are way more likely to build real wealth. Oh, there you go. See? More data.

Just one more reason. Something to think about. I don't know. Plus, it's just better. It's a great deal. It's just better having a relationship. All right. Hey, we're just getting started.

More calls. People are lining up. Don't move. The Ramsey Show is I'm Ken Coleman. I'm joined by my colleague, George Kimmel. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by my colleague, George Kimmel. We are here for you. The phone number to jump in is 888-825-5225.

It is a free call. It's 888-825-5225. Columbus, Ohio is where we're going to go next. Christina is there. Christina, how can we help? Hi. I'm wondering today if me and my husband should sell our truck. So it's worth $30,000 to $33,000, and we make $75,000 a year.

So we're right at that half of our yearly income. You guys just have one vehicle? We have the truck, and then my husband drives a car that's only worth about $2,000. Okay. Is that kind of just Peter to get around? So what do you drive? Yeah. I'm driving the truck right now.

Oh, okay. How much do you owe on the truck? The truck is paid off. Oh. Wow. So what is selling the truck going to do for you? Well, we found a truck for $20,000, and if we went through the dealership and did a trade,

we'd make $7,000 in profit, and so we would use that to finish up Baby Steps 3. Okay. How much further? Let's say you didn't do any of this. How long would it take to get through Baby Step 3? Yeah, we think only about five or six months. Okay. So what you're gaining here is five months of some sacrifice of saving up the rest of the

emergency fund. Yeah. And so you're losing some of the luxuries of a slightly nicer truck. Is that right? Yes. Yeah. The truck that we looked at would have double the amount of miles on it, which is the biggest concern. Which could then have repairs. Yes. Okay. Yeah, I'm not so sold on this. I would not. I would not.

I would keep hustling. And you're talking to the guys that are always like, sell the truck. Yeah, you and I tend to like to sell the cars quickly. We love it. But there's no payment on the truck, and so you're not freeing up any cash flow there um and you are gaining some time but i don't think this is looking at the numbers here the scenario this is nothing's on fire here and so if you're just at the end of the rope going i can't keep going with these baby i just want to be done with baby step three it's okay you're not doing anything wrong but you also you're not in a place where you have to do that i would rather go get some side jobs work overtime in order to speed baby step three

up sells other stuff uh versus downgrade and truck for a slight profit that's just one man's opinion i'm with you actually george two men's opinion two two men. Listen, that truck, I'm going to tell you something, you double the miles on the truck and all of a sudden you're eating into that emergency fund pretty quickly. It could happen. That's my worry is that 7K in profit disappears eight months from now because it needed some work done. Yeah. How would you feel feel christina if you didn't sell this truck and let's fast forward six more months and you got that truck and you've got the emergency fund fully funded and now you realize hey we can actually start a replacement fund for my husband's two thousand dollar car so i'm gonna have a nice truck we're gonna upgrade him oh and by the way we have a

fully funded emergency fund how would that that feel? That would be great. The other concern I had with that, though, was to then say his car lasts two years would be our plan to be able to buy like a $10,000, $15,000 one. Then we would be over half of our yearly income. Well, the truck is going to go down in value as well, and you're probably going to be making more money two years from now. That's true. And so I think that would be a wash at that point.

And it's not a legalistic thing where, hey, it's at 51%. It's not about that. It's just we don't want too much of your world wrapped up in things that go down in value, which this for sure will. So I think you're going to be making more money and you're doing the right things. You can upgrade to a reasonable car. And by then, if you want to sell the truck and get something different when you're debt-free, you can do that. You can upgrade and truck and spend less on a nicer truck.

Whatever you want to do, the world is your oyster at that point. But as far as doing this to accelerate the baby steps, I just don't see it being worth it. Yeah. Thank you so much for the call, Christina. Let's go now to Raleigh, North Carolina. Erin is on the line. Erin, how can we help? Hey.

So I just recently started listening to the show and just trying to figure out baby steps and just trying to figure out where I'm at in those. It's a little overwhelming at first. I feel like I've got a couple different things in each step and just not sure where to go from here. All right. Well, first of all, thanks for listening and staying with us and trusting us to call in. So give George a rundown of what you mean by I've got a few things in several of the steps. Paint that financial picture for him. So other than the mortgage,

we have about $27,000 in debt. Some of that is student loans. Some of that's on a car. We also have the three to six months of expenses saved up for an emergency fund. And then we also have some investing as well in a Roth IRA and then as well in some mutual funds. Okay. So you're doing a lot of good things, but you're just doing it all at once, and so you're not feeling the progress that you feel like you should be making. Right. Would that be accurate?

Yeah. Okay. How much do you have in savings? Liquid cash. How much do you have out there? We have about $20,000. Okay. And how much are you investing right now as a percentage of your income?

So the only thing that we're investing currently is in the Roth IRA, $500 a month. Okay. So let's just say for a short period of time, we paused all investing. That gets you $500 a month back in your life, right? Uh-huh. That's $6,000 a year. You have $20,000 in the bank. And so if you're following the baby steps, what we would teach is you have $1,000 in your starter emergency fund. You have that. In fact, you have 19 extra.

And so baby step two, we're paying off all consumer debt using the debt snowball. So we're listing them out smallest to largest, all of our debts, paying minimum payments on everything but the first one and attacking it with a vengeance. And by with a vengeance, I mean all of the money you have except for that $1,000 emergency fund. So now you're 27 minus 19. What does that go down to? Eight. Eight, yes. And now with the extra 500 bucks a month,

we're going to be able to pay that eight off really quickly. Right. And so think about that. You're completely debt-free a few months from now. Now we're at the point to rebuild that emergency fund to three to six months of expenses. Then we can move back and unpause the investing and hit play on that. But now we're at a very different place, aren't we? Because we freed up all of those payments.

So now we're not just investing $500. We can invest $1,000. We can double that. So do you see the kind of momentum that gets created by following the baby steps in order? Yeah, for sure. I think it feels overwhelming when we've had that amount of savings and then have to cut it down to $1,000. That is one of the most painful things. It's scary.

But what else is scary is owing other people money and not sleeping well at night and having to make those payments every single month of your hard-earned money to a lender with interest. Right. And so do the math on what you're paying in interest. Do the math on what those payments could do if they was back in your life. And all of a sudden I go,

it's a lot scarier to be in debt than to have not a lot of money in the bank. Because truthfully, it's a false reality that you have $20,000 in the bank when you have $27,000 in debt. And Erin, I've got a question for you. Do you recall how long it took to get the $20,000 in the emergency fund? Roughly. Maybe, I don't know, a maybe okay so in the year it took you to get your current savings up to 20,000 life was still going on yes or no yeah so my point is when you do what George told you to do you're still going to be okay there's nothing to be afraid of and you're going to build up that 20 way faster than a year. A lot faster. Because you have way more margin now once you're debt free.

Right. And way more intensity because you feel exactly what you just said. I don't feel safe not having the money in the bank. Good.

Let that fuel you to really be safe for the first time to have what we call financial peace. Yep. So we're cheering you on. Can I give you a gift

before we go? Sure. Okay. I want to gift you one year of Financial Peace University and go watch all nine lessons in there. With that, we're going I give you a gift before we go? Sure. Okay. I want to gift you one year of Financial Peace University and go watch all nine lessons in there. With that, we're going to give you every dollar premium, our budgeting tool to help you make a plan. And I want you to call us back when you're debt free so we can celebrate with you. Okay. That's all I ask. Can I ask one more

quick question? Sure. So once I'm on the other side of that debt, which hopefully will be very soon, as far as paying down a mortgage, how do you know how quickly and how? That is a choose your own adventure, Aaron. I want you to do it faster than 15 years, and you'll be able to when you have no debt in the world. But be investing 15%, any extra margin. Beyond that, you can start throwing at the house. And you'll get there in no time following this plan. Thank you, Aaron, for the call. Love when we have new listeners calling in.

George Goodhour, thanks to the guys behind the glass for keeping us on the air. And to you, America, this is your show. This is The Ramsey Show. Hey, folks, Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? Get your daily dose of advice on life and money. Check out all of our shows from The Ramsey Network wherever you listen to podcasts.