The Ramsey Show - App - I’m Feeling Financially Stuck (Hour 1)

Episode Date: November 15, 2023

🎵 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. I am your host for the day, Jade Warshaw, joined by Mr. Rogers himself, Ken Coleman, looking like a finger of bourbon. You look good in brown, Ken. The team likes to call these cardigans. Yes, cardigans.

Instead of cardigans. You know what? I felt in a fall mood today. I had no idea you were going to show up looking like the first day of spring. So we are quite the couple today. Come on, give quite the couple a call give us a call at 888-825-5225 he's the work and career guy let's talk about i am the money girl oh i was i was wanting to know was it gal or girl uh i could have gone better with that that i felt i say gal but george makes fun of me for saying old words like gal. But I think it fits the cardigan. So let's help some people. Yeah, give us a call. By the way, every serious man needs a cardigan in his closet.

I'm telling you. That's debatable. Okay. Okay. That's debatable. We'll leave that there. All right. Well, give us a call.

The lines are open. But before we do, King Coleman, you know I got to get into this right here. Here, give it to me. Let me talk about it. This is amazing. First of all, congrats are in order because my friend has got a new quick readout called Money's Not a Math Problem. Let's see. Where's the camera? There we go. I'm going to put that. This is my David Letterman moment. For those of you who used to watch him, he would put the forefinger up there.

Look at her. She looks like a million dollars. Thank you. Looks like you feel like a million dollars. I do. And it says, money's not a math problem. That's right. The real reason you're broke and what to do about it. Why should people buy this other than the fact that you're amazing and it's $10? It's $10, number one. So there's no reason not to buy it. But here's the thing.

How many times do you guys call into our show and say, guys, I'm doing my budget, but I can't stick to it. Or I feel like I'm doing this money stuff, but it's just not working. Or how do I get my spouse on board? All of these things that aren't about the numbers, Ken. It's all about what takes place upstairs, up in the noggin, what we think about our money, what our belief system is. And believe it or not, the things that you believe about your money drive your behavior

with your money. So this is your chance to get into it i share my own stories in this okay this is me examining myself and hopefully you will see yourself through that same lens and you'll read it and you'll be like jade yes like this is it so get your copy today ten dollars and if you pre-order you do get some little goodies. You get a free Q&A webinar session with just me. Oh, wow. And you get three months, three months free of every dollar premium, which is the creme de la creme. Okay.

So this is what you guys, this is your homework for today. Go and download this book. It's perfect for gift giving. It's the holiday season. This is what you need to get your money right before January 1, okay? 42 pages of force because my friend is a force of nature. Thank you, Ken. And I have one other question.

What's that? The earrings. Yes. Did you choose the back cover, the green, to match the earrings? There is some validity to that, Ken. I did. See, I appreciate that. I'm a friend of fashion.

Yeah. to that ken i see i appreciate that i'm a friend of fashion yeah for those listening it's it's this teal the teal background with an orange jacket and a striped shirt like it is bright and colorful it looks like a magazine it's a lot but it's it's you're a lot and that's a good thing it is an acquired taste ken no you're much like your cardigan well played ken coleman all right let's take a call let's go to the phone lines we got Wyatt in Philadelphia PA what's going on hey uh hey guys good to good to talk to you thanks for taking my call of course um so yeah I'm a so I'm a cabinet maker uh by trade and uh you know, um, 33, my wife stays at home with our four little kids. And, um, so I make, I make 30 bucks an hour and, um, I just feel like I can't, can't get ahead financially.

Can't really seem to save any money. I don't have any debt other than our mortgage, which is around, I think we, uh, we just bought it like four years ago and refinance. I think we, I mean, we still probably owe like 200,000 or something on it. Um, and you know, in the Philly area, it's pretty hard to find a house that's any cheaper than that. Um, we were fortunate to get this place. Uh, but anyway, I mean, I feel like I, you know, I cut costs anywhere. I can't heat my house with firewood that I prepare, you know, I feel like I cut costs anywhere I can. I heat my house with firewood that I prepare. Right.

And you have no debt. Right. I have no debt, no credit cards, no student loans, nothing like that. So what is it that you're trying to, what's the specific area where you're like, I'm trying to accomplish X, Y, Z, but I keep hitting a roadblock? Well, I just, like, I can't seem to build up our savings at all. Like, you know, I, we, you know, I put a little bit of money in my IRA every paycheck and my boss matches that graciously. What kind of margin do you have? What kind of margin do you have when you pay all the bills, you take care of groceries, gas, you know, all the things, what kind of margin do you have at the end of the month?

Yeah, I mean, probably like I'm saying probably a few hundred bucks, maybe 500 bucks. Does that include the IRA contribution at that point, or is that not before you made that? That's probably including that. You know, I think it's like $2 an hour that I contribute, and then my boss matches that. So $400 or $500 is what's left over, so you could be saving that per month, yes? Yeah.

And maybe I need to do a better job of budgeting. I mean, I don't feel like we're buying a bunch of extra crap that we don't need, though. Well, let's make sure. I just want to make sure we're on page on par with the numbers. So you said you make $30 an hour. So what are you bringing home? Are you bringing, and this is don't, don't subtract anything out of it yet. Are you seeing like 4,800 a month? Is that where you're at now? About 4,200 and that's, you know, after taxes and I work a little bit over time. Okay. You know, a few hours a week. So it's around, yeah, around $4,200. And how much is the mortgage coming out?

It's $1,460, I think, a month. Okay. So here's, whenever people tell me they're struggling to get ahead, I kind of just show them big number percentages. Right. I'm like, OK, your mortgage and rent shouldn't be any more than 25 percent. So you got that. Then you've got 10 percent should be going to giving should have about 15 percent going towards steady retirement contribution, 15 percent. So that puts us at 50. Right. Of the things that are like, this is making me fiscally and financially responsible. So my question to people is what's what is happening with the other 50%? And that's when you've really got to dial into your budget. Do you have an every dollar. So I want you to go and download every dollar and I want you to get the free version. Then I want you, I'm going to give you a promo to get $15 off so that you can get the premium version for a lot cheaper. Okay. Because it's just got more bells and whistles to

make it even easier, but the every dollar free version will get the job done. Trust and believe. So that 50%, I'm telling you you there's something in your budget that is eating your lunch and it's probably it's probably food a food category a restaurant category maybe there's a hobby that you or your wife has that's eating more into this than what you realize and i think if you do some detective work on that other 50 you're gonna find that margin because you've done well you You have no debt. Your house feels very reasonable. The money is there. I promise you, you've just got to do a little detective work to find it. But I want you to know you're on the right track. Just get that

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All right, all right. You guys are listening to The Ramsey Show. My name is Jade Warshaw, your host today. I'm joined by Ken Coleman, my other host for the day. And we're talking about your life, your money, and your work. The work that you do should matter. It's very important. And so Ken Coleman is here to take any questions surrounding that. I'm going to throw a little idea out. Okay. If you want to start a business in 2024, you want to work for yourself

maybe it's a side hustle to get out of debt or maybe it's just I want to be my own boss if you got an idea and you want to bounce it off of us today I like that out there because we're seeing more and more of this in our country today and I think as people think about this year wrapping up and do I make moves I'm just gonna throw out. We'll take any work related question, any money question, but let's just kind of kicking that around. This is kind of shark tank without the rejection. Yeah, it's perfect because you're the career work. You got your framework for that and I've done it. I've started businesses from ground up. So let's do it. Let's do that. And let's also go to Emma in Jacksonville. Hello, Ryda. What's going on, Emma? Hi, how are you guys doing today?

Doing good. How are you? Doing good. How can we help? So I had a little situation with two car loans that I have. One, my sister was supposed to take over. And then the second one I got because my car got totaled. And then my sister

decided she didn't want the car anymore so now I'm stuck with both payments. Whose name are both cars in? Are they both in your name? They're in my name. Okay. They're both in my name. Yikes. Well this may not be that bad. And one like one is on the verge of being repossessed because I can't make both payments. Is that the car that the sister's been driving or your car for all intents and purposes? The one that I'm driving. She parks the car back at my house. So I have both cars.

I have possession of both cars again. Okay. So let's walk through the numbers on this and figure out how to get through this. So let's call car number one the car that your sister had, even though it's in your name. And we'll call car number one, the car that your sister had, even though it's in your name and we'll call car number two, your car that's also in your name. So car number one,

what is that one worth? What do you owe on it? And if you were to sell it, what do you think you could get for it based on Kelly Blue Book? Car number one, I owe 9,000 and it's worth about six. Okay so three upside down and is that six based on Kelly

Blue Book personal sale? Private sale. Private sale okay so 3k upside down okay and let's go to one um so it's worth 16 and I owe 29. Oh lordy okay um how did that happen? I was in a pretty desperate situation my car got totaled and I needed a car to get back to work and my sister she was completely taking over the car and I asked her before I bought it, like, are you sure you want to take over this car completely? She said, yes, I love it. I need a car, too. So I decided to buy a new car, obviously, with a bad interest rate of about 20%. And I only had $1,000 to put down because my car just got told that I just bought that car about four months before that and did you roll negative equity into it or just no i bought it just okay i do want you to check something i actually learned something from dave

and you might want to look into this he he's made it very clear that sometimes people think that they have less have more to pay on the car than what really is because of the way the bill looks and they're just showing you your total of payments they're not really showing you what's left so just do a little bit more due diligence and find out for sure is this the payoff is 29 000 the payoff and just double check that for me 3 24 okay so you did double check that okay now let's get into your numbers and figure out how to make this work. Are these cars your only debt? No. Okay, what other debt do you have? I have student loans for about $30,000 that I just started paying on after the pause went off.

Okay. I have $12,000 in credit card debt, $10,000 in personal loans, and I think I'm in these two cars. In the two cars. Okay. Well, I have my mortgage too. Okay. Let's not talk about the mortgage. That's on the back burner for quite a while. What are you earning per month? What's your take-home pay? What do you see when you get your check? I earn about $70,000 a year. Okay, when you take your check home every two weeks or every month, how much is it? I'm a server, so I get tips. I don't really get like a set amount.

Okay, so on a normal month. On a normal month, I'm averaging about $5,000 a month. Okay, and do you have any kids or is it just you? Are you married? I have one child and I'm a single mom, so he's five. He's five. In daycare or what do you do with that? He's in public school. Okay, kindergarten. Okay he's five. He's five in daycare. Or what do you do with that? He's in public school.

Okay. Kindergarten. Okay. All right. You're in a dilly of a pickle. I'm not going to lie. I'm going to shoot you straight. You've got, you got some mess on your hands that needs to be cleaned up. And the first thing I would do, I'm guessing you don't have any money saved anywhere. No, I do not. I'm kind of spending all of it just on my debt and my... Just trying to stay above water. Yeah. I want Ken to jump in here because right now we have a income issue. Yeah. And this is not going to get cleaned up the way it needs to be. And in the time frame that we really need this to roll until we can get more income coming in. So I'm about to give him the assist here. But the first thing on your list is getting out of that car that's $9,000 and you're going

to take that $3,000 hit some way or another, whether it's you saving up $3,000 cash and just making it even, or if it's you running down to the credit union and saying, hey, I need a $3,000 loan to get this $9,000 debt off my back. At that point, you're going from a $9,000 debt to a $3,000 debt. So it is still lowering the process, which is what we want to do. But you've got to get out of that out of at least one of these cars so you don't have two car payments. So that's what you do first. I actually want to say, if it were me, Jade, I want to know what you think on this.

I'd get rid of the more expensive car first. Well, I want her to, but I don't know that she's going to be able to get a loan for the amount. You don't think she can get the $13,000 or whatever the difference is? I don't know, because of just her income and the... If you can, I would do that, because then she can... Then she said that next car is in that debt snowball, and now she's got a car she can actually drive, but it's a whole lot less. But I mean, it's to your point, it's, I would just, the value on that one is a little higher.

And so I want to get as much as I can for that. Yeah. Look, Ken makes a good point. If you are able to get a loan for the difference on car number two, the one that's worth 16, you can try and try hard. But I don't, you know, I don't want you to get caught up in some really crappy loan terms. So I really want you working with a small credit union, someplace that's going to have

your back. I don't want you going to SoFi. You know what I'm saying? Okay. Okay. How can we increase your income quickly? And what I mean by that is what skill and what set of skills and experience do you have? Do you go, Ken, this is what I do best.

This is my skill set. and I've got experience here. Because I want to think about some freelance gig stuff that could increase your income quickly. What do you have to offer there? Well, I'm a waitress manager at a restaurant that's in a really touristy spot. So that's why my income kind of is higher than a lot of service. But I have two degrees. I have one in psychology, and I have one in pre-law studies. Wow.

Okay. So here's what I'm doing. I'm getting online, and I'm going, all right, what kind of remote after-hours work? Because I know you're waitressing, so we've got to figure out, okay, do I have time in the day, or do I have some time at night or weekends? Where is your block of time that you could actually do more work? Probably in the nighttime because I spend a good school during the day. All right, so here's what I'm thinking.

Tutoring. Tutoring is a premium. You're sitting there. The baby's asleep. You know what I mean? You can do it at your computer. I'm thinking about tutoring or teaching. Tutoring is one thing with that law degree or pre-law or whatever it is,

or the psychology. What is some online extra work I can get where I'm being paid a premium for my expertise? And it's somewhere in that, maybe some low-level counseling, maybe some teaching or training. That's what I'd be looking for, Jade, to get in some extra money quickly. Absolutely. I think people forget about those night hours that are available to them to really make some good money. And you've got the ability to do that and make it known. This is the key to unlocking this problem. You need more money coming in. And the only way to do that is to get more work going out. This is The Ramsey Show.

You're listening to The Ramsey Show. I am Jade Warshaw. That is Ken Coleman. And we are here taking calls all afternoon about your money, your career, your work, your relationships, how money is affecting all of it and how all of it is affecting your money. So give us a call. The number is 888-825-5225. Ken, I can't believe it's almost Thanksgiving because just a little over a month ago, back in October, we went down to D.C. because it was the beginning of this whole student loans are coming back. The payment's back. The interest is hitting and it is affecting Americans. And so we wanted to get a pulse on really how this is affecting people on the streets, taking it to the streets. Like Michael McDonald said, we were able to interview folks in D.C.

We went to the Georgetown area. We went all around getting people's take on how the student loan pause and payments coming back is affecting people. So we want to kind of show you a compilation of what we heard. Did you have to get student aid to come here? Yes, I'm on financial aid. Got like a work-study job, but yeah. Yeah, they'll rack up for sure. No.

You did not. Mom and dad? Yes. Way to go, mom and dad. Yeah, I came in with a scholarship from elsewhere, so they pay for all my stuff. So you're full ride? Yeah, full ride. Up top, dude. That's what I'm talking about. I do have loans for my graduate school, for med school.

How much do you have already? I'm a freshman. I can't remember the per semester number, but it's not cheap. It's like in the thousands. Yeah, so it's about like $350,000. Hold on one second. I'm going to have to get down here and breathe.

I think I get about like $20,000. $20,000? And do you know how much of and breathe. I think I get about like 20,000. 20,000? And do you know how much of that is a loan? I believe about half of it. Half of it, so maybe 40,000 over the four years. Are now your parents gonna help you pay that? Yes. Are you gonna have to pay any of it back at all?

Likely not. I feel like I'm pretty lucky that my parents are able to help out a lot with that. I mean, hopefully I'm in a spot where we can kind of share the burden, but I mean, realistically, we'll see about that. The government has kind of like a program where they calculate, it's like an income-driven repayment plan. Honestly, I had an opportunity to get into the income-driven payment option,

so I'm a little eased that it's maybe a reasonable payment that I can afford. However, with the interest securing, it's already accrued $1,000 in one month before I even made an actual payment. If you had to guess, just if you said, you know what, Jade, I think it's probably going to take X amount of years for me to pay off this debt in full. Or if you even plan to pay it off, tell me a little bit about that. I mean, I'm going to be completely honest. I have no earthly idea, but I mean, for the first few years, I'm going to be on the struggle train a little bit about that. I mean, I'm going to be completely honest. I have no earthly idea, but I mean, for the first few years, I was going to be on the struggle train a little bit. On the struggle bus.

As a resident, I'll probably have like a payment of about like $200, but like, you know, $200 when the total is probably $400,000 and the interest is still accumulating and it's only like a drop in the bucket every year. Exactly. What does it do to you emotionally to be thinking about $350,000 worth of debt? It's, I mean, right now, I mean, I'm under so much stress and pressure that I kind of put it all to the side.

Yeah, it's out of sight, out of mind, because you're already in med school and it's pressure enough. Exactly. I mean, going off and finishing school and kind of like restarting your life in a lot of ways is so much pressure on anyone. So imagining having all that debt on your shoulders

is just like an unbelievable extra burden. Like you're essentially going to be working for the next, it could be the rest of your life, right? To pay that off and like, it's just kind of crazy to expect a 22 year old to, you know, have that much foresight. Do you think tuition is outsized? It's gotten ridiculous.

What are your thoughts on this? 100%. The government was giving more loans. It raised the cap of the loans that were available. So as a result, a lot of colleges and universities just increased their tuition. And the people that are paying the price are the students. Yeah. Pretty absurd, even though like someone who's very lucky like I am, just like asking someone to pay 80K a year is pretty ridiculous. It sucks.

I think it's an unfortunate way to capture people in debt. It's not affordable for most people. They've been allowed to do this forever. It's what they do. It's what we've allowed to happen. I mean, I'm curious, like, why has it gone up so much? What do you think about how tuition has gone up 12% a year for the last 10 years? What do you think about that as a student? Is it worth it?

I mean, honestly, I love going to school here, but like, you think about it once you actually start thinking about the real money about going here. You could get a similar education, obviously, at a lot of other universities, and there are a lot of opportunities afforded to us here, but I think that for a lot of people whose parents can't help them as much as I'm fortunate enough that my parents can help me, going out into the real world after college and having that much debt on your shoulders is just a lot, and I think for a lot of people, it might not be worth it. It's obviously not in your favor at all.

And you probably die still paying back your debt. I would say certainly worth it. You think so? More so beyond the academic benefit, but the value of a social community. Did you hear about Biden and the forgiveness, the student loan forgiveness, and then the Supreme Court shut it down?

Are you familiar with that? Yeah. What are your thoughts on that? Honestly, I feel like a lot of things like that, like may appear to be something good that a politician is doing. But in reality, I don't think anything to that extent would ever go through just

because, you know, he wants to seem like he's doing all this stuff for students, for young people, but in reality, that's never going to happen. I mean, personally, I lean pretty left, so I say, yeah, the government should have a say in that, but I know, like, some of my fellow classmates might not think the same. It is the responsibility of the students that take up the loan to repay it back at some point. I know it probably does suck, but you took on the loan and took on the education. Hopefully, you had a great plan afterwards to earn enough income to repay it back at some point. I know it probably does suck, but you took on the loan and took on the education. Hopefully you had a great plan afterwards

to earn enough income to pay it back. I think it's complete political blasphemy. It's catering to a portion of his base. And I think that obviously gained political traction, but I think it's infeasible. And for the people who have paid off their loans, I think it's a poor lesson teaching. I think there are people who have busted their ass to repay their loans and they're just off the hook. I'm kind of conflicted in this.

I believe that people should be responsible for the debts they've taken out and Sure. And they need to be accountable for that. On the other hand, my selfish side, I would like student loan forgiveness for sure. Honestly, as an educator, I'm disappointed. I was looking forward to just being able to start new, fresh. Looking forward to purchasing my first home. So it's definitely disappointing. We have a responsibility to help.

What's fair? what's not fair? I don't have that answer. Is it fair? I understand people are like, okay, well you forgive mine. Well, you know, and someone else is like, whoa, hold on a second. While my take may be that the government

should be the one who fixes this problem, I think, again, at the baseline, we can all agree that the problem needs to be fixed. The government, we need to do better. We need to do better in this country to help educate our people. The youth have no idea. When they're signing,

they don't know what $100,000 is. They don't know what $200,000 is. Not to mention the interests. Yeah, I mean, you have to be very smart with your choices and live within your means and, yeah, have a plan to repay it.. Yeah, I mean, you have to be very smart with your choices and live within your means. And yeah, have a plan to repay it. Change is going to happen if we change and say, enough, no more. Our youth, our people deserve better.

What if I told you that I paid off $280,000 of debt? I would ask you, how did you do it? Can you teach me? Does it give you hope, though? Does it make you feel like it can be possible absolutely wow wow wow wow look if you were listening on podcast you need to head over to the ramsey show youtube and watch that because it's totally different. It's different when you watch it. And honestly, if you're looking for more information about this,

I want you guys to go to RamseySolutions.com slash student loans, because here's the thing. The new cycle moved on, Ken. The new cycle went on and they're talking about, I don't know what they're talking about again, but the pain of this is still affecting people every single day. People are making payments. They're still deeply, deeply in debt. And we just want to know, we still see you guys and we're still here for you. And at the end of the day, there's still a way out. And there's a way to avoid them. Hey, real quick, we'll help you get out of it financially. But here's a two-part question. Is a degree and the loans that come with it the only way to get where you want to go, or is it the best way?

If the answer is no to either one, hey, go get you a certificate. Go get you a community college associate degree. You can get where you want to go without the degree many times. And by the way, that means no debt. So let's think about that as well. Love it, Ken. This is The ramsey show what's going on everybody you are listening to the ramsey show and i i don't know about you ken but i am shook really shook is the word that it's wow it's about to be thanksgiving okay i was

gonna ask you what's got you all shook up i i just feel like this last half of the year has gone by fast. We're into Thanksgiving. We're already getting into Christmas, which means here at Ramsey Solutions, it's really, really exciting because we do our $12 Christmas sale every single year. And so I love this sale because you go to RamseySolutions.com and you can load up. I'm talking about you can load up on things that should not be $12 that you can get for $12. And not only that, but they also do like this cash giveaway thing,

which is pretty awesome. So there's just a lot going on. If you go to ramseysolutions.com slash giveaway, you can sign up to win money so that you can then go spend the money. You know what I'm saying? So ramseysolutions.com slash giveaway is where you can sign up to win cash money. I'm talking about $5,000 is what we're giving away. Then you turn

around, take some of that money and head over to this $12 sale. Now I'm not, you know, I'm not saying Rob Peter to pay Paul. I'm just saying this is a nice little strategy going on. It is. So you could get like both of my bestselling books, you know, that could help you. From paycheck to purpose. It helps my kids. Yes. It helps my kids eat. You know, these are things that, you know, you have to think about, Jake. Let me tell you what I think is the, and this is no diss on you, Ken Coleman. This is just a

personal thing. The fact that you can get the total money makeover for $12 really blows my mind because that book helped my husband and I pay off $460,000. So if what you get from it is any indication of what it's worth, then all I'm saying is the book is really worth almost half a million dollars. I see what you did. And you're getting it for $12. Okay. All right. So the question is, can people enter daily to win the $5,000? You can enter every single day because the thing is, they give away little prizes in between it. Like I believe they give away $500 weekly. That's right.

So there's real money at stake here. Like this is real skin in the game. Right. You can enter to win every day. So yeah. And no purchase necessary, all those things. So ramsaysolutions.com. Yeah.

If you want to do the giveaway you go to ramseysolutions.com slash giveaway that's to get that free money and then if you're like jade i got christmas shopping then you go over here to ramseysolutions.com slash store and get you some of that 12 dollar holla that's what i'm talking about all right now i got something to talk about what all right All right, and I think this is controversial. Okay. This is exciting. I want to know, you guys can get in the comments and you can voice your opinion on this. Is it too soon to start decorating for Christmas? No!

I don't think so either. Thank you. I'm with you on this. We agree on this one. Drop it in the poll. Are you post-Halloween like the next day? Do you wait a couple days? I'm going to tell you guys how it's done right and then we're going to

hit these phone lines. This is how it's done right. She's confident, folks. After Halloween, November 1st, you keep your fall decorations out. You don't keep Halloween decorations out.

Halloween goes away the day after Halloween. You keep your fall decorations out but you put up your Christmas trees and you don't even have to put the ornaments on them yet oh this is like a pre-decoration it's just out there then maybe a week or two then you put the

you put the or it's it's a it's a slow fade then you put the ornaments on the tree okay so that by the time folks come to your house for thanksgiving you got the trees out but it's still got a fall vibe then after thanksgiving you put take the fall decorations down and put out the rest of your christmas decorations that's the proper way to do it i don't know i don't know i wanted to agree i don't like to disagree with you because i like you so much but i'll be honest with you i think once we go christmas we got to go you go you go all the way half fall half merry jingle it's got to be one of the others you go go all the way. I think so. Look, I spend money on these decorations. I want them to get their full oomph, okay? Because it costs money.

I'm watching on video to make sure they see my dark brown cardigan that you said I looked like. Look, this time I'm going to go for two fingers of bourbon, Ken. It's the coolest thing anybody's ever said about me right there. But they can't see all the browns. You got like all of it. I do. There you go. Ken, let's take a call for crying out loud. Let's go to Corinne in Houston, Texas. What's going on, Corinne? Is it Corinne? Did I say it right? Yes, ma'am. Yeah, you did. Nice. Hooked on phonics. Big bird. What's going on, Corinne? So I have $20,000 that I want to create passive income with.

And so my few options, I was thinking like an ATM, you have to buy those new. It's a couple thousand, and that would create monthly income. Or even like a laundromat, but that's obviously talking a lot more money and I don't have the income to mess around with that. But if I start with something small, like an ATM, then I can create passive stuff. But then I also have like a little bit of debt that I kind of want to put the money towards,

but then I also feel like maybe some can hold off, and so it's kind of a toss-up. All right, so before we get into the income, we've got to figure out what your financial picture is really quick. There's layers here, Tim. How much debt do you have? So I have $3,200 on a Capital One credit card, and it is like $80 a month in interest, which I don't – that's bothering me. So that's definitely a priority, like the top priority.

All right, so keep going. Sorry. What else you got? So I have two vehicles. One is completely paid off. And then the other one, they're both older. I work at a repair shop. So I have a little experience with it.

I take care of my stuff for the most part. So it doesn't have much issues for that one. then i have a a older one i just bought and i my dad helped me out as long story but he's lending me five grand to get this vehicle so i do owe five on my other car but i'm able to take out money monthly to pay that off to for him so i have time on so it's the 3200 on the credit card five can of car anything else anything student loans no okay no all right so i mean look there's no passive income strategy until you pay the debt off that's what we teach and then we want to make sure that you've got your emergency fund in place yeah okay do you know what he's talking about when he says your emergency fund yes the the thousand, depending on your income. I

watched a few of the Dave Ramsey videos. So do you have $1,000 in savings? Yes, I have closer to like $2,300 or maybe a little bit more, but I was putting that more towards like the vehicle. But I've been taking that out monthly out of my paycheck. So that's kind of like extra, I guess, my backup. Okay, let's clean it up a little bit. I like what you're, I like what you, I like the way your mind is working. I just want to tidy it up a little bit. So there's a $2,300 that you have set aside as kind of an emergency fund. Then you've got an additional $20,000 that you're hoping to use to spend money to make money, right? So let's take the $23,000 or $2,300. I'm sorry. Let's back that down. And I'm just going to walk through this.

This is all going to happen basically in one day, but I'm walking you through it so you can see what the process is. All right. In one day, you're going to imagine that $2,300 going down to $1,000. And that essentially is baby step one. Okay. Getting $1,000 saved. And with that $1,300 that's left, you're going to put that towards the car, the $5 car the five thousand dollar i'm sorry you're gonna put that towards your credit card today yeah yeah and then that's gonna leave you what nine hundred dollar uh two thousand one thousand

nine hundred dollars left you're gonna take i'm sorry that's not my thing let's go let's go big number you're gonna take that money and throw it at that credit card then you're gonna dip into that 20 000 that i know you're like jade is passive income but trust me on this just go with me for a second and if you have questions at the end we'll get to it you're gonna dip into that 20 000 and you're gonna pay off the rest of that credit card then you're gonna dip into that 20 000 again and you're gonna pay your dad back fully and you're going to be fully out of debt and you're probably going to still have 14 13 000 left all right yeah that's that's your money one and then you're going to take that 13 000 and you're going to put it with the 1000 that you had before in your baby step one and now you're going to have 14 100 and we're going to use that to be our three this is baby step three that we're now on our three to six month emergency fund because here's here and here's why i'm saying all this

because right now you're going well jade you just spent my 20 000 but here's the thing i want you on the firm i am all pro business pro making your money pro doing your thing but you've got to have that foundation in order because when you have that girl everything after that everything hits right and it clears your mind to make better decisions yeah you trust me just go with me on this well and and no and honestly that's what I wanted to do I wanted to pay off all the debt and I wanted to have savings in case I need to move or something like that. Yeah. And have it set. But then like I also felt like almost like that was like I felt guilty because I'm not making more money.

No, you're being smart. You're being smart. You're being smart. And if you do this, you're going to save up some more money in no time to make you more money. So do what I just told you and you are going to be on the right track. That does it for this hour of the show. Thanks for listening. Hang with us next hour. This is The Ramsey Show.