The Ramsey Show - App - If You Don’t Follow Through on a Plan You’re Going To Lose (Hour 1)

Episode Date: June 5, 2024

This is the Ramsey Show. Welcome aboard. We are here to help you win in your life, win with your money, win in your work, and win in your relationships. The phone number to jump in is 888-825-5225, 888-825-5225. I'm Ken Coleman. Jade Warshaw is joining me, and we are here to give you some hope through practical answers to the problems you're dealing with. Jade's our financial expert. I'll weigh in, and I'm your work expert. You want more income. Feel like there's some opportunities to make more income. You feel like there's some

opportunities to make more income. You want to take steps to do that. I want to help you navigate that as well. She'll jump in on that. So that's what we do. Why do we do it? Because we are coaches and we want you to win. Let's go. Let's get started. Let's go to New York City, New York. The Big Apple. Grant is on the line. Grant, how can we help? I'm doing all right, Ken. How are you? Good. What's happening today? So last week on Friday, I lost my job. I was going through, it was a second time I was late on the clock. My manager surprised me at work and it unfortunately turned into a termination. I've since come and spoke with my parents about this and they're very supportive, but I'm concerned about how do I explain this to future employers in different interviews. Yeah.

Well, the truth shall set you free, and I think that you've got to learn from this. And I think one of the ways to learn from this is to own it and go, this is what happened. And treat it as though this learned from that. And I learned that this is a weakness. And man, did I learn my lesson, you know, because I read biographies all the time of some of the most respected people in the world, women, men. And what I find fascinating when I read these biographies, Jade, is that they share a lot of the stuff they did wrong. And I don't close the book and go, well, that's it, Stacey. I'm in chapter three and I just found out that so-and-so did something dumb. I got to get a new biography where only the people that do great stuff. I mean, I'm sitting next to a very, very successful lady who your whole line all the time is how much debt you got into. Mistake after mistake. And then paid it off. So Grant, I don't think this is anything

to be cute with. I think you own it if they ask. Now, let me just say this, and I want Jay to weigh in here too. I wouldn't bring it up, but if they bring it up, you own it. And you say, I'm growing up because of this, and here's what I learned. Here's some things I'm doing in my life to make sure that never happens again. I think the only way to overcome this is to absolutely, humbly, and violently violently what I mean by violent is just go this is what I did wrong and it woke me up and now here's what I'm doing and I am embarrassed by it but I'll tell you what I'm never going to be late for a job again and and I think that's refreshing

to people Jade what would you add to that I do too I'm not much other than the fact that the quicker you make peace with this and the quicker that you accept it and move on, the more confidently to Ken's point that you'll be able to talk about it and it won't feel so much like a negative as a lesson learned and a piece of wisdom that you gained from it. So what do you think about that? Is there something else we need to know or is this just straight up, this happened twice, your boss didn't like it, and it was done? The way the job worked, it was hourly, and I clocked in on company time, and it was just a matter of time theft. I fully admit and totally own up to everything. Would I lead off in these interviews with, if they ever mention it, I got laid off?

Or should I just, like you said, fully and violently take on the responsibility of what I did? Well, you do that, but the point is when you show up for the job interview, you don't go, hey, I'm here at this job interview because I was late twice and got fired. We don't need to lead off with stupid, but we're not going to hide from stupid. So I wouldn't bring it up until it's brought up. Hey, why are you here? Why did you leave your last job? You go, well, unfortunately, I made a real bad mistake

and I was irresponsible and I was immature, and here's what I did. I think that freaks some people out that you didn't make any excuse at all. That's so rare in the world. Yeah, I think it makes you look really great, Grant. So own it, be okay with it, and I'm really proud of you just for making this phone call. I really am. I called on Friday when it happened,

and I felt like I had nobody to go to, and I had seen the Renji Show clips on TikTok, and I was like, man, I could use a guy like that right now because I didn't think my parents or the people that I love in my life would respond well to this. They did. First people I talked to. No, they did to this. But first people I talked to,

no, they did. They did. First people I talked to were them. I was most afraid to tell them. And it turned out they were the best people to reach out to. Well, listen, brother, I struggle with being late to this day. It's one of my biggest weaknesses. I get highly distracted. And so to this day, I have to come up with systems and things, and I still struggle with it. I get so easily distracted. So, you know, owning these kind of things is the best way to get through them. Really proud of you.

Thanks for calling. Straight from TikTok to The Ramsey Show. Love it. Who was on Friday? I was on Friday, I think. I don't think I could tell you. I can't even remember what day of the week it is right now, much less where I was Friday. All right, never mind.

Laura is joining us now in Syracuse, New York. Laura, I know that I'm here today, and Jade is as well. How can we help? Hi. So after five years, we are in baby step three. My primary vehicle is going to need about as much work as it's worth. So I'm looking to trade up a little bit. By September, I plan to have about $9,000. And my primary vehicle is worth about $3,000.

I'm trying to figure out the best way to do this. I also have a van worth about $2,000. And we feel like we need a bigger vehicle for hauling because we live out in the country. And I don't know if I should trade in both of these vehicles. I don't want to go back into debt. Are you planning to trade the car in to get a van? Like, could you trade in and just get something that's got more capacity?

I do have an SUV right now. I have an SUV and a van that I could trade both of them in. I could keep the van and move to a smaller vehicle. Or I could just drive the van, but the van's not in great shape either. Okay. So let's go back to the 9,000. Is that on top of your emergency fund? Is that additional money? No, that includes, that's all we have. That will be all we have. That is the emergency fund. Yeah, we just started Baby Step 3. Okay. So you got two cars that are worth $5,000? Did I hear that right? Yeah.

Okay. And then my husband has a vehicle. What's his vehicle situation? His is paid off. It's worth about $20,000. Okay. He has a sedan. So I don't think you need three vehicles. I mean, if the hauling is for work, maybe you just trade into something where it can be your daily driver

and you can haul the things that you need. You've got $5,000 to spend because I would sell them both in order to do this. And maybe you look and see what you can haul the things that you need. You've got $5,000 to spend, because I would sell them both in order to do this. And maybe look and see what you can find for $8,000 and take three of this and see if you can make it work. If it takes a little bit more, it takes a little bit more. You said that the car you're driving now, it's worth $3,000 and it's going to cost $3,000 to fix it.

Is that where you're at? Yes. Okay, yeah, I'm doing that. So far, the mechanic said, so I do have it so far, the mechanic said. So I do have some time to figure out what to do here. Yeah, but you said by September, you'll have $9,000. And so, yeah, I would do that. I would spend as little as possible because I don't totally want you to deplete this emergency fund. But yeah, so both take the $5,000, maybe put three or four with it and make it happen.

Yeah, good advice there. What do you think about putting three in it if the thing would actually run for a while after the three? That would be the only other question I'd ask the mechanic. I probably wouldn't because I guarantee she's put more than that in it over the years. All right. Good. So I'd probably cut my losses at this point. Okay. All right. Wow. Talk and shop with Jade Warshaw. Talk and shop. I need to get you one of those mechanic outfits with your name on the tag. That would be pretty cool. You get rocked out with some of your cool nighties. All right, quick commercial break.

We'll be right back. This is The Ramsey Show. She is Jade Warshaw. I'm Ken Coleman, and we are here for you here on The Ramsey Show. We want you to win in life. We're going to help you win with your money, in your relationships, in your work. Those three areas are very, very important. They're all connected. We want to help you win. 888-825-5225 is the phone number. 888-825-5225. All right, selling a house, buying a house. It's a lot of energy going in there. It can cause a lot of

indigestion. There's a Ramsey way to make home ownership a blessing. The Ramsey Trusted Program is the only way to find an agent you can trust to keep you on track with what we teach here at Ramsey and get the best offer in your house or find the right house for you. So these are men and women that we trust. And they've got years of experience in helping people make wise decisions from pricing, marketing, making, and choosing the right offer. How do you find them? ramseysolutions.com slash agent, ramseysolutions.com slash agent. All right, Jade, as our resident money expert on the show today, you're looking at the market, you're looking at the economy. What's your advice to people that are biting their nails about listing or buying? I think that we're in a very crazy roller coaster of a time when it comes to these markets. And I

think that prices of real estate along with interest rates has got people feeling some type of way, rightfully so. And I think that we have to be really careful that we don't move into a state of desperation because you know how it goes. Can you get desperate? Next thing you know, you're doing something real, real stupid. And we're starting to see that. George and I were talking about it the other day. We're seeing an increase in adjustable rate mortgages that just popping out like a 15% increase over the last two to three weeks which is crazy we're seeing people look at 40 year mortgage loans we're seeing um zero down mortgage loans and so i'm like hey lest we forget you know the great recession let's not go back to that way of thinking and can you know this a lot of people

think we're in a recession right now we're not no the numbers don't point to that but you know how it is if you perceive that you know your behavior kind of starts to follow. So a lot of people are going, okay, things are bad. What should I be doing? And it's a little bit of a scramble right now, I think. And you just kind of have to slow down, slow your roll and go, okay, if I have to rent a little longer, that's okay. I'm not going to feel forced into something that I can't afford. I'm not going to make a bad decision with the thought that later I can just refinance or later there'll be an opportunity for me to get out of this, you know, kind of subprime situation because that's what I'm calling them. Yeah.

Calling a spade a spade on that. But anyway. Yeah, it's good stuff. All right. Let's go to Grand Rapids, Michigan next. Renee is there. Renee, how can we help? Hi. Yes, it's a pleasure to talk to you guys. Super excited. But I have a doozy of a question for you. Ooh, we like the doozies. I like a doozy. All right.

So my husband and I have lived in our current house. We bought it. It actually burned down a month later. Whoa. And, yeah, so we have like a brand new home. We've been living in it for nine, eight years now because it was built. So, um, and we only owe about $50,000 left and we could pay it off tomorrow. Okay. But, um, but for the last four years, we've been looking to move because I run a business out of my home. And that is growing.

That is booming. And we have three children. We would possibly love to add another. And so we purchased a home about two months ago. Just got possession of it for quite a bit more money. Okay, house number two. Okay. What'd you spend? My husband, uh, 585,000. Okay. And, um, my husband officially has extreme buyer's remorse and doesn't want to move into it and doesn't want, he wants to sell it. What caused that?

Writ. Extreme buyer's remorse. Affordability? No, we can afford it. I think it's high interest rates, economy. He wants to be, he's like, we're shooting ourselves in the foot. We could have been debt-free, you know. What's the other house worth, the one you're actually living in

um because it burned around 400 000 so why can't you sell that and take home 300 000 and put it towards this 585 000 mortgage um because he's like we're still going into, and he loves the house that we're in. He's like, it works perfectly. So he went from one extreme to the other. Why did you buy the new one? If the other one works perfectly, why did he buy the new one? Yeah, so that's the whole thing. We're on this two months of roller coaster,

and now the option is either we sell it and we lose at minimum around $50,000. Yeah. Yeah. If you, if you sell it right now, you're going to, if you sell it right now, there's probably going to be a loss. What'd you put down on it? Oh yeah. What'd you put down to get it? Um, I I think, 10% in knowing that we were going to sell this one. Okay, you guys have to follow through on a plan here. Because the longer that you kind of go back and forth on this, you're losing money. Because you still have your first home mortgage payment, even though you only owe $50,000. And now this one is right behind it.

We're paying two mortgage payments as of Saturday. Yeah Saturday yeah okay so that right there is the motivation you guys are in a hot pot and it's getting ready to boil so you've got to decide what you're going to do if I'm in your shoes the logical thing to do if you don't want to take a loss is to stick with the house that you okay with taking a loss because he claims that it needs updating the new house needs updating and the current house we have is 100 the way we like it and he he claims that he has to put time energy and effort into it what do you think yeah what do you think because he's the one that's gone back and forth and you seem to have been steady so what do you think? He wants to sell it. No, what do you think, Mama? Mama, what do you think? It would work perfect for us. I mean, no house is perfect for our needs.

Are you saying the new house would work perfect? They both work perfect, but we work so hard for our money that it's hard to lose 50 grand right off the top yeah it is in commissions and fees yeah i boy i wish he was on the phone because i'd love to talk to him dude to dude um honestly he's he's got some type of emotional fear or something that is yeah i think like the house fire really damaged him him because we put our life savings into this house and it burned before our eyes. So I think there is some PTSD with it. But he was excited about this a couple weeks ago, right?

Or a couple months ago. He was. I mean, he's been looking for like four years for a new house. I would tell him. He put an offer in on five houses. All right, I'm going to get out of the way and let Jade take it, but I've got to spit this out. Spit it out, Ken.

Okay, and you can show him this on YouTube if he doesn't believe you. You can tell him that you called the show and that Ken, the dude over here, got all up in arms and told you, and I'm telling him, you need to man up, dude, and stop being an emotional roller coaster here. A month ago or two months ago or two weeks ago, you were all in on this, and this is the dumbest of dumb taxes if you back out of this deal and take an unnecessary loss. Move forward, sell the house, the old house, and just man up here. Even if we take a loss, we can be debt-free here. You would say it's more worth it to move there at a 6% interest rate for $585,000 and have to put money into it? This is a different discussion.

You're trying to change the discussion on me. I'll say this. No, this is his argument. I don't care what his argument is. Based off of what you told us, when you set this whole thing up, you're like, hey, we're thinking of growing the family. I got the business thing going on. For me, just looking at this, and you know, I'm a numbers person. I like people debt free. There's nothing wrong affordability wise with you guys upgrading home. There's nothing

wrong with that. What I think happened, because there was nothing impulsive about this purchase. You said you've been looking for years and years and years. I think you're right. I think your husband had a little T trauma moment and he's processing through that. I think you have the most clarity of both of you. If I were in your shoes, I would keep the $585,000 house. I would sell your current, the number one mortgage. I would pocket, you know, three, 300 from it, 320. And I would immediately put that down on the $585,000 mortgage and shrink it back. Sounds like you guys have a fine income. If you were able to float both of these mortgages and paid off as quickly as possible, you'll be free again. And there's nothing wrong with that. Renee, you're still moving forward. He needs to understand if he reneges on this and sells this new house, he's basically setting fire to $50,000 or more. That's what I would, I'd play to his emotion on that. That's right. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is with me, and we're here for you this hour. 888-825-5225 is the phone number. 888-825-5225. Your money questions, of course. Jade's here to help on that. And then how about making more money? What are some things that are holding you back or some things that you can do to make more income? Consider me your work coach, your income coach. I'm here to help out on those matters as well.

All right, today's question, Jade, comes from Anthony in California. I'll read it to you. I got married three years ago with a prenup. My wife is a pharmacist. She makes around $200,000 a year. I'm a teacher bringing home $80,000 a year. She owned a home before we got married that's worth $900,000. I know that the house is not mine, and I have no rights to it. I contribute $1,700 a month to household expenses plus $500 out of my check a month for health insurance.

I'm not building any equity. I asked my wife if she would be willing to sell her house. I can't wait for you to answer this and buy a smaller house together. She said she's not willing to give up her house to make me feel better about myself. Am I wrong for questioning our marriage? Oh my goodness. Can I get a bag of popcorn before you dive into this? I mean, I'm just... Whoa. A lot to break down there um this there's so much circulating around like value and worth of the person based off of the money and the assets that they have um i mean obviously she's the one that made you sign the prenup and my guess is is it is it assumed that the prenup meant that he doesn't have the house yeah she. That she retains full ownership? I'll bet you that's what that means. Yeah, I mean, I think so.

I mean, she's the one that, I mean, I'm not making judgment calls here. I'm just reading what the paper says. She's the one that makes more money. She's the one that owns the house worth $900,000. And she also knows who she's married to. And... I mean, the dude straight up up says i have no rights to the

house so that's what i'm reading wow there's a lot there's a lot of issues here in many ways it's almost like she wanted to separate themselves going into this and because she felt obviously hey he can't contribute financially in a way that i can and then but there's still like this expectation that he should be maybe contributing more i'm like this guy's a teacher what do you want and then when he comes along and says hey is there a way that we can just lower the temperature on our spending through this house she's like no like go fly a kite so i this for me is yeah you should be questioning the marriage here and uh if i'm you i'm jumping into counseling immediately yeah okay we'll get to the call quick here but i want to ask you a step further okay

what's your you're coaching him okay okay and her yeah what do you tell them that they need to dig into in therapy she thinks she's better than him okay yeah she views her like i'm like just calling a spade a spade she's up here and he's kind of down here and it's all because of financial status there it is i'm sorry i like it judge jade has ruled just slam the gavel there it is i like it all right let's get back to the phones triple eight eight two five five two two five is the phone number aiden is going to join us now in Colorado Springs. Aiden, how can we help? Hi. So I'm basically wondering whether or not I should be going to college or working full-time. Love it. I love these moments in life. This is so fun. Okay, so let's walk through a two-part question, okay?

The questions are, is a degree, college, the only way to get where you want to go, Aiden, or is a college degree the best way to get where you want to go? And that would imply that you kind of have an idea where you want to go, so let's start there. Do you have an idea which direction you want to go professionally? Not so much professionally i do know that so right now i'm 18 and i do know that 10 years from now i want to like own my own business and be you know uh like kind of free financially free with the business and um i know that i i if i went to college it'd be for mechanical engineering and i know that that's a good career but if i worked full-time and started my own business you know that could pan out as well so i'm not great that's kind of what i'm

hung up on on whether or not what i should do. Yeah. All right. Let me ask a couple other questions. Are you getting any pressure, whether it be positive or not, from parents, friends, teachers, whatever? You getting any pressure to go to college or is it you feeling like, hey, I've got some freedom here to make this call emotionally? There's definitely pressure from friends and family to go to college because, like, I'm a smart kid. I have a 3.8 GPA, but I also have a little one. I have a daughter, so I'm trying to make the best decision financially as well because I know that going to college for four years is four years that I could be working right what is the situation with the mother of the child what's the relationship what's custody give me give us some sort of a

picture of this there's no legal stuff in it but we're we're not together so so but I mean is there not is there not child support? No, there's nothing like that, no. Okay, but you want to contribute and help out. Yes. Okay. Okay, let's put that aside for a second. Okay.

If no one was going to judge and nobody had an opinion, it was just you and your own little private Aiden world. What's the answer to this question? Do you want to go to college or do you want to go to work now? What's the answer? Realistically, it's probably go to work, start a business. There's a part of me that weighs down because I have friends who, like, would want to go to college because most of my tuition is paid for by the college. And I just, I feel like it's like a smack in the face to other people. So, Aiden, I love that.

I love that response. I think you're being honest. But let me push a little bit more. If you weren't worried about the guilt and we remove the guilt, I think the answer is you want to go work and work right now and try to figure out what your path is to owning a business. That's what I think you want to do, not what you think you should do. Am I right? Yeah. All right. Can I jump one side into this? Because on the one hand, I agree with Ken and I think that you're kind of struggling with just the norm. The norm is you graduate, you go to college and then you go get a job, right? That seems like that's kind of been

the normal way that things play out with the people and the people around you, which I understand. And I think that's playing a big part in you feeling some type of way about possibly choosing not to go to college. However, I want to know more about this business thing because I also do feel like when it comes to college, there's a lot of asset, like there's a lot of aspects of it. A, there's the educational side. B, there's the side where you just kind of grow up and you become an adult and you learn how to deal with folks and make friends. And there's a, you know, there's a lot to it. And then there's this part that kind of buys you time where you're figuring out really what you want to do with the skills that you have.

And if you have the opportunity to do that for free, it could be helpful, especially if you know you want to do a business, but you don't know exactly what that means and what that shakes out to. Let me give the converse to that, okay? Because I have mad respect for my colleague, Aiden, but I think you should take at least a gap year.

So because we're running out of time, I want to tell you, I think right now, you should take one year, Aiden, but I think you should take at least a gap year. So because we're running out of time, I want to tell you, I think right now you should take one year, 12 months, and go work with this goal in mind. And I'm going to give you my best-selling book called The Proximity Principle. And I want you to actually use this in this next 12 months. This would be my advice. I'm going to let Jade have the last word. Hey, you're the expert. Well, no, no. I just think I'd like you to take 12 months to actually go work and make some money and with the goal of getting to know as many people in different types of trades or businesses that you might eventually be interested in it gives you a year to he could go right back to college and do what you're saying

that's right he could like college isn't going anywhere. The scholarships aren't going anywhere, Aiden. But I'd love for you to just test this baby out. I think a gap year is brilliant for you because I think you're responsible. I think it allows you to stack some cash. But I want you maybe working two or three or four different jobs in that 12 months. I'm not mad at that. To get some experience for one reason. Can I figure out what type of

business that I want to be in? I know that mechanical engineering is an area of giftedness, talent, and I know I could use that in a lot of different businesses. I think that's what I would do if I were you. And I think that'll take the pressure off of you with your family and friends to go, I'm not punting on college right now. I'm just going to try this. What do you think about that? I'm with you 100%. And save some money. Give some money to the baby, mama, whatever. I get that too. I like it.

Thanks for the call, Aiden. I know this. You're going to win, my friend. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is with me this hour. We are here for you.

888-825-5225. We're going to focus on helping you reduce debt, save that money, invest that money, and make more money. How about that? That's what we're here to do today. Tracy is going to join us now in Columbus, Ohio. Tracy, how can we help? Hi, I'm calling because our son is a 19-year-old service member and he'll be home on leave in a month. And he is asking us while he's home if he should do something different with his money or leave it sit in the low interest savings account that he has it going to. And we've really only invested in 401ks. We haven't done any outside investments. So we're not really sure what direction to send him.

He saved up a pretty good amount of money during high school working before committing to the service. And he has like slightly less than three years remaining. So he has some time to do something to earn some interest or something back. And I just was wondering like what direction you would suggest he go how much money is it he has about fifty five thousand mm-hmm okay and how old is he 19 okay so nineteen fifty five thousand good what is his salary? He's in the service. He doesn't make a lot of money.

He's in the military. I know, but he still makes money. All through, well, I think probably, I mean, it's a private, so it's probably roughly around $30,000-something. But most of this money was just, just like during all of his high school years, like he's a penny pincher. So every penny, every dollar he made, he saved. And, um, so I would say he probably had roughly about 40 before he even went in. Um, so, and then, you know, I, I said to him when we saw him a couple of weeks ago, it

just seems sad that the money is sitting in a savings account. And he's like, I don't, do you guys know what I should do with that? And, and I, I don't, it's not sad that it's sitting in a savings account. I mean, if it's just sitting in a, you know, your old run of the mill savings account, it might not have a great rate of return. So at the very least I'd make sure it's in a high yield and they're really popping off right now um i've seen them as high as 5.3 matter of fact an article came up the other day talking about some of them um i know that is there laurel road uh james that's doing 5.1 i'm not sure about the percentage but i think

that's the one yeah it's over five george and I were talking about it. George endorses them. Yeah, so if you want to check them out and just put it in a place where it's making a decent rate of return. Because to your point, in three years, he's going to be out of the service and he's probably going to be looking for a place to stay. So there's rent and I don't know what his vehicle situation is. And so he's going to have some expenses coming up where it's going to be nice to have some liquid cash. And if he can make some money on that in the meantime, then I'm not mad at that. Is he investing any of his income right now? No.

The military does do like a 401k now, which they didn't do years before. So he does partake in that. But I would probably honestly think it's not going to be a career for him I think it's just like you know just said love of country wanted to do his time and he'll probably do you know his time and just get out um which is why he wanted to make sure he saved all he could but I didn't know like if a cd or something like that would be in its best interest. What about Baby Step 4? Yeah, I mean. Are you familiar with our Baby Steps?

I have not followed the Baby Steps. We are like, my husband and I are, I mean, we just, we haven't been investors. Okay. Jade should walk you through this. This will be fun. Here's what we would say. First off, no, no to a CD's there's no benefit of doing that there's a lot of better options like i said high yield savings account if you go the savings route high yield savings account that's what i would do with the 55k that he currently has drop it in a high yield laurel road is what

we suggest now as far as the money that he has coming in through his income we would say to invest 15 of his gross salary every single month into that 401k that's being provided towards for him that's great and so to ken's point that's part of our baby steps it's baby step four and the reason he's able to do that is because he's already completed everything up until that point which is the paying off of his consumer debt he doesn't have any debt and he saved up what we would call three to six months of expenses. In his case, that's what that $55,000 is. And then after you've done that, now you're in a place where you can start investing regularly. And so that's the why behind why we're giving you that advice. Okay. That sounds good. And what, what did you say the name was?

Laurel what? Laurel Road. Okay. And so you can Google that if you're like, that's not for me, you can check out Marcus, uh, by Goldman Sachs. You can check out Ally. They're all really great ones, but Laurel is the one that, uh, we have connections with here, uh, at Ramsey. Okay. All right. He's doing great, mom. He really is. And you should be proud. The fact that he should be investing, you said he is, so he's got a big chunk of savings. That's going to give him a lot of freedom and a lot of options, as Jade said. So he's doing okay. Nothing to be sad about at all. I'd be very happy. This young man is way ahead. Did you say he's 19? Yeah, 19. Okay. Yeah. He's way ahead of most 19-year-olds. All you say he's 19? Yeah, 19. Okay, yeah, he's way ahead

of most 19-year-olds. All right, let's go to Baltimore, Maryland next. Ryan is there. Ryan, how can we help? Hey, how's it going, studio? Good morning. Good. What's going on? Good. So, I'm 22 years old. I have $6,000 in a 401k, another $2,000 in an individual brokerage account i kind of play around with uh i'm asking if i should take that money out of the 401k and and the brokerage account to pay off some of my debt how much debt do you have i was about 23 000 in total between my car loan and uh i got a personal loan worth 6 000 and a credit card on $4,500. Okay. What's your income?

Yeah, what's your income? So I make $130,000 a year right now. And I'm also getting another job increase. I'll be making around $150,000 a year. Nice. Yeah, no, the answer to your question, I definitely would not touch the 401k. I mean, that's the whole point is you're saving for your future. And whenever you're investing, it's a long term play, especially if it's tied to retirement. You don't want to touch that money because of the penalties that are going to be associated with that. So no to that. If you

wanted to clear out this 2k in the brokerage, definitely do that. Because again, there's not going to be any tax implication or penalty if you do so. You'll have to pay taxes on it as an addition to your earned income. But other than that, there's no penalty per se with that brokerage. So you could definitely clear that out. And with this income that you have, there's no reason that you shouldn't be debt-free, lickety-split, right? Yeah, yeah, yeah. Because I'm making the payments fine right now but you know just between the interest rates i think it's uh 11 of my credit card and about 12 of my car loan yeah so i just didn't know i mean total the monthly payments between all the debts like 900 bucks like a little under a thousand so i didn't know if i should take that money out and

just you know invest a thousand each month back into the 401k and be back to where I'm at? No, because you're using a bad decision to justify a good reason. And so that's where you're at. You want to pay off your debt, which is really great. That's a good choice that you want to make, but you don't want to do it with a bad decision. And pulling from your 401k is a bad decision. And why we teach it that way, there's a lot of reasons. We just talked about the penalties and whatnot, but so much of money is behavioral and habitual. And so you've already had a habit of creating debt in your life, right? And so right now we're working on breaking the habit of creating debt. And what we don't want to do is then create a habit of pulling from 401k savings, retirement savings in order to fix a problem.

Because now we're starting another habit that's a negative habit. Does that make sense? Yeah, yeah, yeah. No, I got you. I'm not very smart with my money decisions. I got a large inheritance when I was 19. I kind of still recovering from some of that debt to get back on my feet. So I just don't want to make another one.

This is my point out of the 401k. No, I think that you're just going to stick with the payments and take the 2k out of the brokerage account. That's right. Credit card, car or. Yeah. So you're going to start with the lowest in the debt snowball. You're going to start with whatever the lowest balance is.

So it sounds like it's the credit cards for four and a half thousand. Start with that. Then you're moving on to whatever's next. And then the 6K is, well, actually the 6K is next and then the car. Okay, sweet. Thank you. I appreciate it. You got it, man. Thanks for the call. You know, you hear that, you want to go, you're not, Ryan, it's not that you're dumb. It's just, you make decisions that a lot of people make. It's just kind of the, well, everybody else is doing it. And you wake up, it's not that you're dumb. You make decisions that a lot of people make. It's just kind of the, well, everybody else is doing it, and then you wake up. It's like you're not branded as dumb.

Hey, good hour, Jade Warshaw. Thank you, my friend. Thanks to James Childs and all of our team for keeping us on the air. This is the Ramsey Show. Take care.