The Ramsey Show - App - I’m Afraid To Spend Our Savings (Hour 2)

Episode Date: January 26, 2023

George Kamel & Jade Warshaw answer your questions and discuss: "I'm afraid to spend our savings", Knowing what the best next step is for you, "Do I need car insurance for a borrowed car?" Business loans vs. personal loans. 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

Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio, it's the Ramsey Show, where America hangs out to have a conversation about your life and your money I am your host Jade Warshaw I am joined by George Camel we've got a great show for you guys today hey be sure to call in today the number is 888-825-5225 we'd love to take your calls about your life and your money and hey if you're a new listener and you wanna just dive deeper into the things we teach, the Ramsey baby steps, Ramsey principles, check out ramsesolutions.com and click that get started button.

We wanna help you figure out what the best next step is for your financial journey based on where you are today. That's ramsesolutions.com, click get started. And hey, one more thing. If you like this show, can you consider liking it, sharing it, passing it along? We would love if you did that. It costs you nothing. Let's go to the phone lines. We've got Tim from Jefferson City. What's going on, Tim? Hey, how y'all doing? We're doing good. What's going on? so my wife's been uh talking about dave ramsey and y'all for a long time recently

sold our house um 100 out of debt uh because of that we have six figures sitting in the in our savings account and i am just terrified to do anything with it i know what i'm supposed to do with it based off of what y'all teach um But I'm afraid to the point where I can't even tie the church. We both make a good living. I just, I don't know where the sphere is coming from and I don't know the right next step in order to get out from behind this. Do you think it's because you've just never seen that much money sitting in an account at one time? You just don't want to mess it up is that what it is no i never i never had any money i was never good with money until i met my wife uh and we we

got married she took over finances um she was i mean she's been she's a phenomenal saver and we've been been close to that in the past um but i've always just bled money. And now that we have no debt and I have two kids, and I don't know, we're both as good off as we've been in our careers. So what do you think the right next step is? If you were to use this money today, what would it go towards? I don't know. We both have good cars. We have a roof over our head that we're renting. Our kids are all in nice clothes. How much is it?

I don't know. How much is what? How much is the amount sitting in the account? Oh, it's just over $100,000. Okay. So would the next step for you guys, does that include your emergency fund and that $100,000? That's, yeah that that's uh yeah that's close to everything we probably have like 110 total okay okay so aside from the

emergency fund your next step if you want it to be is home ownership and using that money as a down payment right are you guys investing currently yeah we my wife has a 401k and I have my Roth. And we both have pensions with our work. And that's the thing. We're in the military and we don't know how many moves we have left. So you're moving every few years. So you're like, hey, let's just rent. And we're going to be here for two or three years. We're going to move somewhere else. Let's keep renting. So essentially, I mean, like what George said, you've got, if you can kind of separate the six months of expenses, because in your case, I would keep it at six months and then just make sure that, because for all intents and purposes, you're at this point on baby step four, if you're

investing 15% and you're not quite ready to buy a home yet or go, you know, go on to a further step, you know, after the 15% invested, you can just sit on that money for a while, make sure if maybe in the next five years, if you have a plan, you know, to maybe purchase at that point, let it sit in a high yield savings account for a little while. But if you know, hey, this is like I'm in the military, or this is our plan for a long time, more than five years, then it might be smart to get with a smart investor pro and see if it's worth investing that money so that, you know, you can gain on it and gain a great interest rate. How does that sit with you? It makes sense. It's just scary. I don't know why I'm just afraid to make money. Look, here's the thing. Look at where you're at now. I feel like you're

kind of stuck in the past on all this stuff that you did in the past. And that's that's dead and gone. Look where you're at now. You have no debt all this stuff that you did in the past. And that's that's dead and gone. Look where you're at now. You have no debt. You've got paid for cars. You're living in your renting. You're making good choices. And you got a virtuous woman next to you who's helping you make good choices.

You're sitting pretty, dude. I'm married up. You married up and just rest in that. You're doing good. This is not all on your shoulders to decide where every penny goes. This is a marital decision we're making as a team based on our shared vision, our shared goals. And like Jade said, you don't have to make any decisions today. That's the beautiful thing. It can sit there. I would rather it sit in a high yield savings account, which is by the way, going to be,

you know, FDIC insured, the money's safe up to 250,000 per person on the account. And so you're good. This money's not just going to disappear. You're not going to go to Vegas tomorrow. And so I'm sleeping better at night instead of worse. I know that's right. And you're the one who called in the show. You made a good choice. So let's put that, since you're keeping score, it sounds like on your good choices versus bad choices. Put a little check box next to the fact that today you made a great choice. And tomorrow you're going to make good choices and the next day and the next day you're doing good and you're doing real good there's only three things you can do with that money tim you can give it save it and spend it

you mentioned you're having a hard time even letting some of it go but there is such beauty and freedom in having an open palm and going you know what i'm going to give a little to my church to the offerings above tide i'm going to give a little to my church, to the offerings above Tide. I'm going to give a little to an organization. We're going to do that regularly. We're going to allocate some of this for a vacation or a cool experience, whatever it is. And then the rest of it, we're just going to keep saving. And that helps you feel a little more balanced versus leaning one way or another, feeling out of control. Yeah, that's right. That's a good call. You know, I think people face that a lot. You know, when you've had this background where it's like, oh my gosh, I've never done good things with money. I just make all these bad decisions. And then before you know it, George, you look up and it's

kind of like, wait a second, I did something right. And then you did another thing right. And then you did another thing right. And before you know it, you are good at money. Well, and there's such wisdom in having a little bit of that caution and fear when it comes to having that pile. Most people are going to go, sweet, a pile of money in the bank. Let's go spend it. Let's go get an $80,000 car. Instead, Tim's going, we worked really hard for this and I've never been in this position and I'm just a little bit nervous. And over time, you're going to get more comfortable being in this financial situation. Your incomes are going to continue to go up. You're going to continue saving. You're going to get more comfortable being in this financial situation. Your incomes are going to continue to go up. You're going to continue saving. You're going to start saving for your

kids' future education and college. You're going to pay a house off one day. And so this is just a milestone in the journey. So celebrate it, have a plan for it, budget it, but don't lose sleep over it either. That's right. And you know, another good thing about that call that I kind of want to call out for other people, a lot of people sell their home and it's like, okay, I've got this money sitting here. And the temptation is to want to invest that money because you think, oh, if I can just put in the stock market, maybe I can. I'm not even beating inflation, Jade. Yeah. Well, they want to invest it and think that maybe they can get, you know, a bigger return,

but they want to buy a house in the next two to three years. And it's kind of like- If the market did what it did last year- You're hurting for certain. You didn't make money with your money invested. And that's, we talk about the stock market being a long-term game, a long-term mindset. And over time, consistently, we've seen you will make money in the stock market. But if you have the mindset of, well, I just don't want it sitting in a savings account

or checking account, so I'm going to throw it into the stock market, that's a recipe for disaster. It sure is. You're jumping off the roller coaster too early, my friends. It sure is, and you're going to be a little bit disappointed at what you find. So, yeah, park that money in a high-yield savings account, and when it's time, you'll have a nice little nest egg saved up there. This is The Ramsey Show. We'll be right back. you're listening to the Ramsey show I'm Jade Warshaw this is George Campbell sitting next to me and we're taking your calls America 888-825-5225 call in with your questions

we've got Madeline here on the line from Atlanta, Georgia. What's going on, Madeline? Madeline. Hi, guys. How are you? We're doing good. How are you? Oh, it's Madeline. Oh, it's Madeline. I was right the first time. It felt like a Madeline to me. You were the first time. I do? Really?

Yeah. Get the vibe. Oh, no. Oh, I love it. I love it. Well, first of all, I want to say my husband and I, he's here listening. We've been following you guys, I want to safely say, since what, like August of last year? His brother-in-law, my brother-in-law's brother've been following you guys. So I'm going to safely say since what, like August of last year, um, his brother-in-law, my brother-in-law, his brother told us about you guys and we're like, Hey, you know, but then we finally like dabbled. So here we are. Um, I'm glad you're here.

Well, thank you. Thank you. Um, we have a very, what I guess everybody says your situation is unique, but ours is unique to us. Um, I'm, I just turned 30. My husband's 35 and we have three children from eight to turn three and nine months. And we were looking at purchasing our first home and then going the traditional route. And then that's when we discovered that my husband, Anthony, actually does not have credit. His credit score is a zero. And then the only debt that he has is probably totaling up to

maybe 3000, maybe, um, just, you know, just personal things here and there that we could honestly knock out with like a paycheck. And then with me, I just have student loans and then a vehicle from a previous relationship that's actually kind of tied up in a court situation. So that'll take care of itself within a little while. So technically I only have student loans. Um, we've been going through the baby steps and why we did, uh, do baby step one and start on baby step two. Both of our children needed some dental work. One needed braces. One had to get, you know, cavities. So that's where our savings went to, but I was a little upset, but my husband's like, that's an emergency fund and that's what it's there for. So we're

building back up our savings and, you know, we're probably maybe 500 towards the 1500 mark, but because I've never heard of anybody not having credit or like, I guess, surviving this long, if you will, with no credit cards or nothing. And again, my husband is the only one working because we don't see the point of childcare at the moment. So I'm taking two years off because I was also working full time. Okay. So how can we know? We just want to know what is the direction that we should actually go. We're in a position to where we can either turn this into a really great situation because we technically don't have a whole lot of debt or we can just foobar it.

Well, I thought I heard. I thought I was outside of the student loans and the $3,000. Well, that's what I was getting to because I could have swore I heard you say there was $3,000 and there are student loans. How much are the student loans and the $3,000. Well, that's what I was getting to because I could have swore I heard you say there was $3,000 and there were student loans. How much are the student loans? So my student loans total up to $32,000. Okay. I've been making payments on and on and I'm currently in a forbearance period that is scheduled to be up.

I have to look, but I think I come out of forbearance in June. Okay. So we're going to start making payments on those. Can you make payments earlier? Definitely could. Okay. So we're going to start making payments on those. Can you make payments earlier? I definitely could. Yeah. And what, does your husband have student loans or just you? No, he doesn't. He paid his way through school because he's smarter than me. So $35,000 of debt total? Total. Okay. So, you know, what I'm going to do, Madeline, is I'm walking through the baby steps. You already started that process. I don't want to skip ahead. I don't want to do anything out of order.

So you had your starter emergency fund of $1,000. Do you still have that? I know the kids had to get braces and whatnot. Do you still have the $1,000 there? To act the middle of February, we will as long as we stick to our savings plan. Okay. So we'll get baby step one done.

Once that's done, then we're going to start attacking your debt using the debt snowball. And we're just going to do smallest to largest. So we'll knock out that little 3k deal first, the 32 after that, and we're just going to snowball it. You got to get intense with those payments. What's your take home pay between you and your husband combined? Combined, we're looking at probably 62, 62,000 a year. Okay. Are those student loans? Because again, I'm only like, I'm very, I'm a stay at home mom. My,000 a year. Okay. Are those student loans? I'm a stay-at-home mom. My husband

works full-time. Okay. So are those student loans, are they broken out into smaller loans or is it one giant? Yes. Okay. Well, they're broken out into smaller loans. So the biggest loan that I have is actually 23. And then the other, there's three more that kind of just. What's the smallest one? The smallest one I have is have is 500 okay that's the one i want you to focus on and that's your only goal you're going to make minimum payments on all the rest of those loans we're just going to attack the smallest one with a vengeance with all the margin we can create through our budget through spending less and making more and that means that home ownership is going to be on the back burner for a little while because we have to clean up this 35 000

then we need to have a fully funded emergency fund of three to six months of expenses. Then we can start saving up the down payment for the house. So this might be a few years away. Gotcha. And that's what we were talking about. We wanted to push for it, but at the same time, we're like, one, with the market being the way it is, and then two, with us just being like a one-income family, we don't necessarily want to put ourselves in a situation where we're like, oh, we can't afford it. But then it kind of messes up our savings and everything else. You can afford it until reality hits and life happens. And then you need to do the braces again because they screwed it up. And then the HVAC goes out

and you thought the rent was going to be equal to the mortgage. But it turns out there's property taxes and insurance and home maintenance and repairs. And you can feel the weight of what that would be like in your budget. So I'm pausing on this. And once he gets there, once you get there and become completely debt free, the emergency fund, of course, he's going to have no credit score. If he pays all this off, make sure all those lines are closed and you can do what's called manual underwriting. Our friends at Churchill Mortgage do these all the time. I went through this process myself. It's called a no score loan. Yep. I did it and it works every time. And you're going to need to have 12 months of

rental history of consistent on-time payments. You're going to need to show that you've paid your insurance bills on time every month, your cell phone bills on time every month, your utility bills on time every month. And if you have those types of things in your life, Churchill Mortgage will look at you like a real person, like before credit scores existed in the 80s. That's right. And they had to go, yeah, you guys have the income to afford this. You've got no debt. So the debt to income ratio is amazing. Yep. And you have money in the bank for the down payment. Yeah. We'll give you the loan. It's a great call, Madeline. Thanks for the call. Let's take a look and see what's going on here with Nedra. Nedra is here from Washington, D.C.

What's going on, Nedra? Hello. Hi. I was calling because I'm married, but my husband and I recently married, maybe like two years ago. Okay. And prior to him meeting me, he was already close to retirement. So he has his savings and he has all that going on, all of that.

So with me, I make $16.31 bi-weekly. And what I'm trying to do is find a way in order to save and to get myself out of debt. So I make $16.31 bi-weekly and after I get paid, I don't have anything left. I can't contribute. How much debt do you have? I have a large amount of debt. How much? Total debt, I can give you, well, my school debt is $70,000. Okay. And I have my car note is $8,604.

And then I have credit card usage. I have one account for $434 and the other one is $4,474. Okay. And then I have like a Bob's Furniture. I had purchased some furniture because we had just purchased a home. So I wanted some new bedroom furniture

and we got that and that's a balance of $1,538. So, Anidra, I'm confused. You said you got married, but this sounds like you're on your own in this world. Yes. Is he not combined? Have you guys not combined bank accounts? Is he not part of this debt payoff thing?

No. He said he did not want to combine. And how does that make you feel? Oh, pretty bad. Pretty bad. Whoa. Wait, when he married Nedra, he married all of Nedra, didn't he? Does he know that?

Yes. Yes. Here's what I, you guys got to get on the same page with this, because when you get married, it's no more me and you. It becomes ours, and you're not going to get far. Even Nedra, if you do this all by yourself, there's going to be a rift, and there's going to be a problem there, because you guys are not one. So, I do want you guys to get with a local pastor. I want you guys to get with a

counselor. You've got to get on the same page about this, because you're going to start feeling resentful. How much money does he have in savings? Does he have liquid cash? You said, does he have liquid cash? Yeah. How much does he have in the bank? Like just cash on hand that he can get to. I think he has some money saved, maybe like 9,000. Well, we got to get away from guessing and wishing and hoping and get real numbers. And if he's not willing to share his bank account with you, I'm not sharing a bed with him. I know that's how this works. This is marriage. It's what he signed up for. Yep.

You guys got to work together. And until you do, I still want you to dig into the baby steps. Walk those baby steps out in order. But Nidra, do not let this go untouched. All right. This resentment will crush the relationship over time as you're clawing and scratching on your own. It sure will. I want you to work on this, all right, Nija?

Don't forget about it and don't try to do this by yourself. This is The Ramsey Show, and in the lobby of Ramsey Solutions on the debt-free stage, we've got Keaton and Liz. They're with us. How are you guys doing? Doing great. Excellent. Where are you guys from? We are from Dublin, California. Dublin, California. So you're here to do your debt-free scream. I want to know.

Tell me everything. Tell me everything. How much debt did you pay off? So $39,053.18 is she wanted me to say. That was 18 cents. We'll get you. That's right. In 11 months.

Wow. 11 months. What was your income during that time? Range of income. It ranged monthly from about $4,800800 to about 9,000 at the end wow what do you guys do for a living so I work as the director of front house at Chick-fil-a and uh Pleasanton right next to Dublin in the Bay Area and then I also work at Chick-fil-a with him that's how we met that's how you met yeah a love story surrounded by chicken I love

yeah there's plenty of them too by the the way. Like so many people meet there. It's awesome. Oh, really? That's amazing. Well, they hire amazing people. So the quality of the people, they're like, why look any further? You don't need a dating app. Just go to your local Chick-fil-A. I love it. I love it. So what happened that, you know, kind of sparked this journey and what made you want to pay off all this debt? 39,000. That's a great question. I was looking into Ramsey Solutions before we got married. I knew that we wanted to do it the right way. And so really we buckled down together as a couple about

two months into our marriage, like February, March timeframe. But beforehand I was like, I'm gonna pay off my car quick. And then right after that we started paying off hers. Oh my gosh. So what was this debt? Two car loans? Two car loans, but one was already paid actually. So just one during the actual debt-free journey. Like the 11 months was a concentrated effort.

For me, like we buckled down multiple times throughout the program. And each of those times like, okay, I'll sell the Robin Hood. I'm not making money off of that. Did that hurt? It hurt. What would you have it in? What were. There it is. Did that hurt? It hurt. What would you have it in? Were you invested in single stocks or crypto? Singles, yeah, they were up and they were down,

but you only lose when you sell, and I had to lose because I had to submit to the program. Okay. You know what? I love that. He had to submit to the program. Swallowed your pride and paid a little stupid tax. Yep.

But was it worth it? Do you miss your crypto and single stocks? I don't. No. Right decision. But, it worth it? Do you miss your crypto and single stocks? I don't. No. Right decision. But yeah, we had credit cards, the car loan, debt to my parents, which was actually kind of like half student loans,

and then my own student loans as well. Wow, wow, wow, wow. So you guys are young. How old are you guys? 24. 24. 24. 24 years old, newlyweds.

You just start getting crazy. You you start budgeting you start going were people like oh my gosh the people that you worked with your family wasn't did anybody think you were crazy or were they on board with you um a lot of people just had questions like why is this so important what are you doing it for like what's your reason so it's cool to kind of give our like reason behind it and kind of get other people motivated to do it as well, especially some of our friends. What's been the feedback from your friends as you've been telling about this journey? I think it's been like they're impressed, like they're inspired. The hardest part was not so much friends for me, but family because no, sorry, we can't go on that vacation. I know you'll pay for the travel, but it's a loss of income.

I'm trying to work 55 hours a week. Yeah. Wow. And you're alive to tell the tale because FOMO is one of the big reasons, you know, the kind of the YOLO mentality of, well, I'm only going to be 24 once. You want me to miss out on that vacation so I can be working 55 hours a week? Right. But instead you guys said, well, if we sacrifice for a short time, 11 months, it's going to fly by like that. We can be free for the rest of our life sir I was surprised by how quickly it went at the beginning it felt like it

was gonna take forever and we kept having to say no but then at the end of the year I was like oh my gosh that happens so quick now we can like go on all these things it's kind of crazy to think about we won't grind like this like ever again because we're not gonna go back to that situation ever again that's right oh man I love that. Just a short term sacrifice for a long term gain. I love that. So what's next for you guys? What's next on the docket? This whole year we did like a little vision trip, we called it, where we planned out what we want 2023 to look like. And for us, it's trips. It's enjoying our youth now that we

had paid off all that debt. We can create some more margin. And so we'll have the emergency fund done by the end of the year, but we're also going to make time to invest in moments together since we didn't do as much of that in our first year of marriage. Yeah. Wow. I love it. I love it. So for anybody listening, who's your age, newlywed, just getting started, what would, and then they've got a mountain of debt. What would you tell that person? What would you say to them? I think definitely sticking to the budget. It's hard at first.

I remember all the conversations we had. A few tears were shed, and I was very stressed out. But try to stick to the budget as hard as you can. I know it's really hard to be rigid about it, but do it because it pays off. And you honestly kind of learn learn habits and then you just kind of keep them, which is like really nice. That's really good. Yeah. And it was family meetings for us too, where we could share some of that motivation. We would check in with each other each week and talk about all sorts of things, but finances was always one of them and like

sacrifices we were going to make. And yeah, once you use that snowball, you start rolling the debt forward. It was crazy to see how much steam we could pick up and like how excited we got. Like I remember in September, we paid off 8,000 worth of debt in just one month, which is double our pacing. Yeah. And like after that, we're like, all right, we're almost there. Three months to go. Here's the home stretch. Yeah. And you learn so much about each other, right? As husband and wife, you kind of pick up on each other's ways of communication good habits bad habits so which one of you is the spender and which one is kind of like the saver or are you both I think we're both naturally savers I have my seasons though where I like want a new pair of shoes or something like that but um yeah I think

we're both naturally savers and then I do most of the shopping. So he doesn't have to stress about it for like groceries and all that. So he kind of stays away from that. Yep. Smart. Well, you guys are, I feel like you've matured already as newlyweds, just going through this process and having two adults and go like, oh crap, we got to pay the bills and we have to pay this debt off. We can't keep relying on mom and dad or the White House or whoever to get us out of the mess

we got in. And that level of personal responsibility, you mentioned, you've created these habits now that will stick with you the rest of your life and carry you as you build wealth. Yeah. Absolutely. It was really good to build that independency from like parents and stuff and just kind of start off like our marriage strong. We did a premarital counseling with his like godparents and they helped us a lot with the financial stuff too so it was really good boundaries too yeah I think that's what she was leading into which we would definitely want to encourage any newlyweds out there that are

starting to navigate these conversations to have confidence and always start out with we love and respect you mom and dad but we're taking charge we're setting our boundaries for a reason where it's our money and we're using it the way we see fit. And I would shed a tear if I was your parents going like, I raised a great kid. Oh man, I love that. That's a good point, George. Like in the moment, they were not happy about like our decisions we made, but down the road, like the respect has come back and that's such a gratifying experience. And seeing how proud they are. Yeah. That is so great. Guys, I'm so proud of you. And we've got, you know, our live and give it box for you.

It's the next step in your journey. It includes a copy of Total Money Makeover. You can give that to somebody so that they can learn the same process that you did to get out of debt and change your life and build wealth. And it's got a couple copy of Baby Steps Millionaires in there and a year of FPU. So make sure you take that home with you. But the next part is my favorite part, guys. All right, get ready to count it down.

We've got John, I'm sorry, we've got Keaton and Liz, and they have paid off $39,053.18 in 11 months, making $4,800 to $9,000. Go ahead and count it down, guys. Okay. Three, two, one. Go ahead and count it down, guys. Okay. Three, two, one. We're debt-free! Woo!

Oh, what a sweet couple. Man, I'm proud of them. I'm especially proud when Keaton was like, we just had to tell our parents what it was. We had to put those boundaries in place. And I don't know if it was their parents or Chick-fil-A that instilled just such wonderful, respectful manners. But that was my pleasure to share their story with everyone on air. I'm sure it was their pleasure as well, George.

That is exciting. I mean, it just goes to prove time and time again that these steps work. It works. Baby step two, you know, it's not easy, George. You know, you got to put your head down. You got to forget about all the voices out there telling you what you're doing is crazy. Well, you know, why don't you spend your money like this? Do you really have to go so hard? But you know, when you do it, you end up on the debt free stage. And they stop making excuses. They went, oh, we can control our income. We're gonna go from

$4,800 a month to $9,000 working on our tails off. Yes. And all of a sudden, it takes 11 months instead of years. It's unbelievable. You have control, guys. You can do this. Whether you're 23 or 43, it's not too late for you. Debt freedom is available, but you got to reach out and grab it and do the hard work. That's right. I'm proud of them. You guys did a great job. This can be you too, America. All you have to do is submit to that plan and you could be standing on this debt-free screen stage doing your debt-free screen. All right, this is The Ramsey Show. Thank you. You're listening to The Ramsey Show. We're taking your calls about your life and your money. You can give us a call today.

The number is 888-825-5225. And it's a new year. Thank you, Lord. And that means, man, you can't be giving up on those goals that you set out to accomplish this year. And if your main goal is to build those money muscles, but you've only been to the money gym once, like everything else, man, it's time to make progress

and stop making excuses. Now I know it can be hard when you don't have a plan or you're starting out with $460,000 of debt like my husband Sam and I did. But if you want a practical, proven plan to climb out from under those piles of bills and start building wealth, grab yourself a copy of The Total Money Makeover. Man, this book is literally the reason that I'm here today, guys. It's the reason I'm sitting in this seat.

This is Dave's bestselling book for a reason. You'll learn the seven baby steps to guide you through your journey with real life stories from people who don't have to struggle with money problems anymore because they followed the steps and you can too. Let's be real with you paying off debt and building wealth. It's not just for those people out there, guys. Having financial peace is not just for the people on TV. It's for you. The people in this book did it. You can too. So get back on that money treadmill and order your copy of the Total Money Makeover today at ramseysolutions.com slash store. You got this. All right. Let's go to the phone lines here. We've got Sally from Columbus, Ohio. what's going on sally

okay i have a question um i'm in between vehicles cars and i've taken over my mom has a fleece so until she's done with that in september we're sharing her car so i dropped my insurance when i got rid of my car and so when i called the insurance company to drop it, they said, well, you can't. What are you driving? And then they had me do some type of insurance where I pay like $55. It changed because it was $43 and now it's $55. Now that then she has full coverage.

So do I carry the insurance or do I not? You're saying now that you've switched over to your mom's car, your insurance has gone up because you're driving her vehicle, essentially. No, they said I have to carry some type of insurance driving her vehicle, even though she carries full coverage. So my question is, do I carry it or do I drive it? Has your mom contacted her own insurance company?

We had both. I think she and me both had the same insurance company. Okay. And the car is listed under both of your names? It's her car. So like I said, it's the fleece. We live in the same home because she's, you know, we live together. I just don't know if I should keep the insurance. Are you living in the same household as her? Yes. Okay. They should be, if you're in the same household as her? Yes. Okay. They should be, if you're in the same household and you're of legal driving age, you should be on the same insurance as her. So I would see if they can just add your name to her insurance.

That's what we did. We borrowed my dad's car. We were not in the same household, but it was as simple as us adding our name to his policy while we were borrowing his car. Okay. Because I'm going to get one once her car is done, but there's no such thing as a new car, so I'll eventually get my own, and then she won't have nothing. But then if she has to drive mine, she could be on mine and drive my car. Yeah, if that's the case, if you're going to be sharing each other's cars, I would just have both of your names on each insurance

to make sure you guys are protected. Hopefully that helps you out, Sally. You want to make sure you have the best insurance and make sure just in case anything happens. All right, let's take another call. Let's talk to Stephanie in Rochester. What's going on, Stephanie? Hi, guys. How are you today? We're doing good. How are you? Good. I have a question. So my husband and I are in the fortunate position where I'm baby step number six. Awesome. We own a property where he manages his business, or we have a mortgage on a property where he runs a business, and then we have a mortgage on our house. And we're in the position where we can pay off one or the other. Which one do you guys recommend?

What are the balances on the mortgages? Well, the mortgage on the business place is about $89,000 and some change, and the mortgage on our house is about $95,000. And we have about $125,000 set aside. Oh, I love that. That is, that's great, that's great. So you've got your pick of the litter here. Yes, and the only caveat with it is for his business, we plan on putting addition on at some

point and we'll cash flow it. So I don't know if that changes which one you pay off first. Not really. You know, in this case, business debt, it gets rolled into the debt snowball as personal debt. So in this case, I would place that ahead of your household, you know, your personal residence. And I kind of would have treated that business debt like it was baby step two. So I would go back and use the money for that. Is this the only money that you have or do you have an additional three to six months saved? We have an additional three to six months saved. Okay. Then it sounds like you could...

Because we keep all the business money separate from our personal. So this is just the money we have for the 125 is just the excess. We've been rat holing to be able to pay the balloon payment off at, it would have been at five years, but we'll be at three years on February 1st. Yeah. I mean, I get the idea of keeping the money separate,

but at the end of the day, I mean, it's your money and it's affecting your personal finance. So that's why I would have thrown it into Baby Step 2. The good news is you've got the money to take care of that. And if you wanted to start chunking away at your personal residence, you can do that too. How does that sound? Sounds perfect.

Yeah, with $125,000 in there, you can knock out the business mortgage at 89 you'll still have 36 left to throw with your primary which has 95 left and that brings your total debt down to one primary residence with a mortgage of 59 what's your income um well it changed a little bit this year um the last year we were at like $225,000. Amazing. So you can knock out this mortgage within the year. Yeah. So either way, with the next year, they're all gone. Oh yeah. By the time, I love the sound of that. I don't know about you, Stephanie, but that just made me extremely excited for you. How do you feel about it? I'm excited. We have three little kids, so I'm actually cutting back my hours to be present for the kids more.

So this makes it much easier. You have options. Yeah. What are the payments on those mortgages? The one for the business is, I think, $2,500 a month. And then our personal mortgage, I think the base is $1,500, but we've been paying $2,000 to $2,500 every month. Wow. So you guys are about to get a $50,000 yearly raise because you freed up $4,000 a month, just like that. Wow. And that allows you to have those options to cut back, work less, stay home.

That's part of the plan that people forget about. You have so much freedom and options when you just get out of debt completely and you have an incredible income like you guys do. That's part of the plan that people forget about. It is. You have so much freedom and options when you just get out of debt completely and you have an incredible income like you guys do. That's exciting. Man, Stephanie, I would love it if you sat down with your husband and you guys really think about what you're going to do with this new life. That is so exciting to me. You know, I hope that you take this advice.

Man, to be debt free, George, by the end of the year of two mortgages or personal mortgage and a business. That's amazing. That's so exciting. And then they're going to be able to cash flow whatever they want to cash flow. They are. People forget about that. Renovation, vacation. If it's got Asian in it, they're doing it. Asia. Come on, George. I'm going to coin that. I'm going to put the little TM right next to that. Thank you. That is great. That's exciting. What an incredible couple. Oh man. All right. George, you want to take another call here? Do we have time? It may be tight. You know, let's shoot the breeze a little bit. Okay. Well, I want to talk about this. People forget in that situation that we just talked

about the freedom that you get from paying off the debt they had. What is this? $125,000 sitting there that they could have said, well, this is cushy. This feels nice. And we're making the payments. It's fine. But we want to do something different. We want to get free. And when you start looking at those numbers, it's just, it's really something how your life can change. And I don't think enough people take the time to really dream about what their life would look like with no payments. Well, the emotion side of it is hard to put on paper. And so you kind of get comfortable in your situation. You can afford your payments

and you think this is what life is supposed to be. And yet we also see, you know, sky high levels of anxiety and depression across the country. Oh yeah. And that has been rising with debt. And so it's hard to not make a correlation and go, debt is causing us to feel this pain. Not all of it, but a large part of it is finances. When you get that freedom in your life, it's easier to have the margin to focus on other areas and focus on your physical health and your relationships because you have the margin to do it. That's right. That's right. I mean, we know that. It's what you said, George. 37% of Americans say that they're struggling with finance. We know that people are living paycheck to paycheck, but you don't need to do that.

You can be free from your money and we're here to help you do that. So ladies and gentlemen, that does it for this week's episode, for today's episode. And I want you to remember this. You can tell me that you won't do it, but please don't tell me that you can't do it because when it comes to your life and your money, all things are possible.

I know, that's right. This is The Ramsey Show. ramsaysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramsaysolutions.com and click Get Started.