The Ramsey Show - App - I’m Having a Hard Time Sticking to the Budget (Hour 2)

Episode Date: September 28, 2021

Debt, Budgeting, Home Buying, Investing As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

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Music Music Music Music Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW

as the status symbol of choice. George Campbell, Ramsey personality, host of the Entree Leadership Podcast and a brand new podcast on the Ramsey Networks called The Fine Print. A new episode of that dropping this week on Bitcoin. If you're interested, jump into The Fine Print, and you can find out in lots of different businesses and industries where The Fine Print is stinging you. Oh, yeah.

We talked to a 17-year-old kid who at 14 years old mines some Ethereum coins and now can't remember the password to his computer and is locked out of $462,000 worth of Ethereum. All from a computer password. You know, that happened to me once. Not! I was hoping. I was like, Dave, you ever had half a million dollars on the line? No, I didn't. I never lost a half a million dollars in a computer.

Other ways, but not through a computer. I have found a way to do it other stupid ways, but wow. And mining those coins takes a lot of electricity and a lot of technology. His parents walked in and said, what are you doing, man? It's this 14-year-old kid with a script on the computer. He thought he was hacking into the mainframe. Well, and the house is melting down because the electric meter outside is going...

Whee! It can't handle it. Yeah. We heard some crazy stories. We talked to a lot of people. Courtney Dykstra House was on there sharing her story about her crypto experience. Oh, she had a crypto experience.

Yeah, back when she was in the news days. And she was glued to it. It's addictive. It's gamified. You're day trading, right? It's always moving. It's 24-7 worldwide, unregulated. And that's why people get so pissed when you and I bring it up,

because they're hooked on it. All the dopamine. You're starting to get this, yeah. Oh, I can't wait to listen to this. It's fun. It's going to be great. It's a wild ride open phones this hour jennifer is in fort lauderdale hi jennifer how are you good how are you better than i deserve

what's up so i um i own a home here in fort lauderdale and i owe about 292 000 on it um you know the realtors keep saying i can sell for about $680,000. The problem is I have $37,000 in debt. I have a BMW I020 and $17,000 in credit card debt. I've got a guy saying, let's just refinance the house, put the, you know, the $40,000 in mortgage $348,000 and I can save you $1,200 a month and you can pay an extra an extra thousand dollars a month and get it paid off in 10 years the problem is i make over 150 000 but it's like you know i get commission checks so it's always hard to budget correctly you sell don't you sell for a living don't you have a shopping problem are you a salesperson yeah yeah i thought so me too because you sound just like i used to sound. I tried to out-earn my stupidity

for years. And then I tried to borrow my way out of it. And you can't out-earn it. It catches up, doesn't it? You make $150,000 a year. There's no reason for you to have this debt except you've just been a lazy and disorganized girl. I know. You don't need to refinance your home. I'm thinking about selling it because moving to the West Coast by my parents and I'll make, you know, $400,000 by pumping cash. Let me help you with this.

That's treating the symptom, not the problem. Okay. The problem is you're not handling money well. I know. And I want you to do that for your sake. Okay? Hey, I love you, and I want you to do that for your sake okay i hey i love you and i want you to win but because i'm just like you that's why i can read your mail i it's the exact kind of stuff i did in my 20s that caused me to be constantly broke and um so it you know when you can get organized you feel like you got a raise yeah so what's the total amount of debt here 57

and you make 150 000 a year this is an easy math equation well no i have the 292 000 on the house and i have 37 000 for the car and the credit card and 20 000 on the credit card that's 57 000 plus your house right i have over 17 000 in my bank right now that I could... Okay. Yeah. So we got to get you on a really, really tight budget where every single dollar does one thing, reduce debt. I mean, let's pretend that you really, really, really sacrificed and you lived on only $100,000 for one year. Cry me a river.

Mm-hmm. And you took the other $50,000 of your income and you became debt free in one year hello are you there yeah she was so shocked speechless was that sound was that sound when you fell back on the floor and jennifer if you're following the baby steps we teach you're not paying off the house until baby steps house i don. I'm not worried about the house. Your house is in great shape. You got a ton of equity in a great real estate market. Now, if you want to sell, super duper, sell.

But don't sell because you have a beamer debt. Don't refinance because you have a beamer debt due to your disorganization and never having applied yourself to this. Let me ask you this. Do you set goals on your sales? Yes. There you go. Well, we're talking about game plan tonight, Dave, and I've been digging into this goal stuff.

And once you put the numbers down on paper, just your consumer debt, not the mortgage, this is baby step two we're talking about, you're going to have $1,000 in savings. The rest, the 16, we're throwing at the debt, and we're going to follow the debt. That's almost all the credit card debt's gone. Yeah. Shop up the credit cards, never use them again,

get on a written budget, and let's reach over there and knock that rest of those credit cards out and then knock that beamer out. And what I'm telling you is it becomes a goal. When you set a goal in sales, you say to yourself, I got to kick it in gear. I got to game on. I got to make it happen to hit this goal, right?

Right, but the only other problem is my house, I still need to put a new roof on it and windows, which is another 40 grand. You get what I mean? If you want to sell your house, sell your house. I don't know. But don't sell your house because you're in debt. Yeah, okay. You make $150,000 a year, and we're telling you how you can get out of debt.

And if you want to sell it, sell it. I don't care. But don't refinance it and don't sell it because you're in debt because you're going to go back in debt because you never fixed why you went in debt in the first place and if you don't learn to save up the 40 000 to fix this house you're going to go into debt for that too and you know you have to stop this you have to get the debt off the table and say i'm sick and tired of constantly paying the freaking bank i make too much money to be this broke you have have $17,000 to your name, and you make $150,000.

Get disgusted, girl. Get mad. Not at yourself in a bad way, but get mad enough to change and say, that's it. I've had it. The worm has turned. I'm sick and tired of being sick and tired. Whatever it is, you have to yell up into the clouds and say,

God, help me. I need your help. This is killing me. She's got a great shovel i need your help this is killing me yeah and she's got a great shovel dave so this is not a she makes a lot of money she's a smart girl she could cash flow the home repair she can get out of this debt and she could do it all in a year if she if she gets to selling so 97 fixes the house and makes her debt free oh minus 16 so 81 does that making 150 so let's just say we put 40 000 a year towards this program in two years you're debt free in the Oh, minus 16. So 81 does that, making 150. So let's just say we put $40,000 a year towards this program.

In two years, you're debt-free and the house is repaired. And that's conservative. That's very, because you can't pay off $40,000 a year making 150. You are not applying the principles. This is what we do here, people. This is what we do. You hang on, girl. We're going to sign you up for Financial Peace University. If you will do what we teach,

you're going to be there in just a matter of years. If you don't, I predict you're still going to be in the mud. This is the important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org

slash budget. That's chministries.org slash budget. In the lobby of Ramsey Solutions on the debt-free stage are Jeff and Ann to do their debt-free scream. Hey, guys. How are you? Hi, Dave. We're great. Thanks.

Good to have you. Better than we deserve. George and me both. So where are you guys from? We're from Medina, Ohio, near Akron. Oh, fun. And how much debt have you paid off? $74,381. I love it. And how much debt have you paid off? $74,381.

I love it. And how long did this take you? It took us 18 long months. Okay. And your range of income during that time? It was from $5,300 to $63,000. What do you guys do for a living? We're both retired.

Okay. Working part-time. Okay. Both of us. Yeah. Not a bad income. So you've got some retirement income coming in. Yes.

Yes. All right. And what kind of debt was the $74,000? You're going to love this one. Time share. Oh, no! Did we plan this? whole thing no there was uh some credit card debt timeshare loan uh an equity loan on the home and uh a car loan a car

so do you still have the first mortgage on the home and does that mean the home's paid off too no we still have the first mortgage gotcha okay wow so how long you guys been married almost 50 almost 50 years january january congratulations thank you that is so awesome so after that many years of marriage what happened 18 months ago that set you on fire so we got to get out of debt we signed up for a financial peace class at our church oh wow we had been thinking about it for a couple of years but we were normally vacationing during the time when it was offered and uh we decided but we almost didn't do it because we had to go to our timeshare in Florida at that time. This is too ironic. And I know.

And someone from church, because we're older, it seemed like most people doing this were younger. And she said, oh, they're older, too. She said, let's do it. Do it with us. Oh, wow. So, okay, we'll do it with you. And then we were going to miss a couple of the classes oh no now what do we do well she said amanda who manda sherrod who is our

manda and jason are our cheerleaders cheerleaders taught the class um she says oh you can watch it just what you know pull up your laptop and watch it while you're on vacation. So we did. Oh, wow. And so we had no excuses. And it was just the timing was God, very much God, the whole thing. Just everything the way it worked. You know, when somebody's been married for 10 minutes and they say, we're going to dive in and we're going to go crazy and we're going to pay off uh seventy four thousand dollars in 18 months that's impressive when you have been married almost 50 years and you decide to do this that's impressive yeah it's harder to break all

those habits that you've built i mean that that the change in, what in the world? This is so intriguing. You guys are amazing. Thank you. Thanks. So you said 18 long months. Did you mean that? Yes, it was a struggle, particularly for me. I didn't want to cut up the credit cards.

I didn't want to really do the program at all. What made you guys decide to do it? It was working for oh amanda and her husband for sure and uh we needed to do something we didn't want to leave um we don't as far as the legacy we didn't want our children to be have a debt have our debt and while we when we're gone, we want to be free and clear. We had been working on our own, just trying to nickel and dime it a little bit here and there, and we weren't really making any progress. And we needed to take that next step.

So the frustration of that said, okay, I'm going to try this weird gas system. We're going to go in. And our friends are doing it, and it's working. So I'm going to go in. And that's what turned the corner for you, Jeff. Yeah. Yeah. Because I didn't want to do it at first, you said.

And that's me. That's how I would be. I'm like you, Jeff. That's very cool. That's very impressive. Wow. So part of it was, a lot of it was the timeshare. We ended up talking to the timeshare exit people,

and they told us we should go directly to diamond to be able to get out of it and so that's what we ended up doing you didn't you didn't do you didn't actually use timeshare exit instead you went straight to diamond they told us to go to diamond and how much trouble was that to get out quite a bit it took months and we had we had to pay a thousand dollars every time you sign up for more points that's a deed so we had three deeds so it was a thousand dollars for each of those and then we had to get all of our maintenance paid for of course and the maintenance oh my goodness it went from it went from about four hundred dollars we first got in, and it was about $1,800 a year at the end.

We had really three mortgages. I mean, because we had our equity loan, which had the highest interest rate you could think of, and then our regular mortgage and the equity loan. So we considered those three mortgages, and now we're down to one. Wow. And we redid our mortgage um it was 30 years it's now 15 years um and what two point something percent i forget how's it feel amazing wonderful like a big burden's lifted off our shoulders worth the 18 months of tough

absolutely yeah okay so i gotta know i'm gonna be completely inappropriate how old are you guys 72 i'm 75 and i'm 70 70 okay so you robbed the cradle 50 years ago old 25 year old boy married a 20 year old girl i love it that's awesome you guys are amazing i'm so proud of you thanks i'm so proud to know you very very well done and i'm honored that we had a little bit to do in your wonderful story the number of people that are married 50 years is almost none to start with these days and then on top of that uh you guys have decided late in life to just try a new chapter. Yeah.

And that's very, very impressive. Most people get stuck in their ways and don't do it. You guys are very neat people. And we might come back. We would like to come back when we get our mortgage paid off. I would love to have you. And have a total one. Total debt.

Kelly will move you right to the front of the debt stream line. You've got a fast pass. Debt-free stream line. That'll happen. Yeah, you guys are amazing. I'm so proud of you. We've got a copy of the Legacy Journey for you. That's the next chapter in your story for sure, without a doubt.

And then we'll give you a copy of the Total Money Makeover to give away to somebody and maybe get them started. Because a friend got you started in Financial Peace University. That's how this all happened. Can we mention our family? Sure have three children grown children and 10 grandchildren wow some of them are watching so that's fun life is good if i don't know how great grandbabies are going to be i'd have been nicer to their parents yeah you guys are fun. Well done, well done, well done. All right, Jeff and Ann from Akron, Ohio, $74,000 paid off in 18 months, making 53 to 63. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! That'll put some pep in your stack. Man. I love that story. Don't tell me it's too late. 75 years old, and they decided. Don't tell me it's too late.

It's not too late. Not too late at all. And it's not too late for you guys to sign up and join us for Game Plan tonight. You can execute a game plan and do just what they did. Exactly. I'm going to be sharing about how to set the right goals and actually see success. And I share my own stories of failures and the stuff I've learned that have helped me accomplish my financial goals. And it's a lot of the stuff that we're hearing in these Dead Free Screams.

They had a big why. And you and your wife are getting ready to pay off your house. Oh, yeah. Just around the corner up here. Just a few months away. On the way. And you keep asking for a raise. I know what it's for.

I'm kidding. It's for a good reason, Dave. Just know that. You guys, man, this is incredible. So here's the deal. 7 p.m. tonight, Central Time, we have a free live stream with number one best-selling author, Christy Wright, which is a Ramsey personality, George Campbell Ramsey personality, sitting here to my right, and

of course, me. And we're going to be talking about goal setting, about the information from her book, Take Back Your Time, and certainly about laying out a financial money game plan. It's all free. Text GAMEPLAN to 33789 and join 20,000 of your closest friends online. GAMEPLAN to 33789. All one word, GAMEPLAN to 33789. 7 o'clock tonight.

It's a free live stream. George Campbell, Ramsey personality, is my co-host today in the lobby of Ramsey Solutions. On the debt-free stage, Lou and Brittany are with us. Hey, guys, how are you? Doing fantastic. Good, so good to have you guys so where do you live we live in new pregg minnesota which is near it is an hour south of the twin cities okay all right the minneapolis area then okay cool and uh how much debt have you guys paid off? $49,016.66. Way to go. And how long did that take? 13 months.

Good for you. And your range of income during that time? $27,000 to $90,000. Wow. Nice jump in 13 months. What do you do for a living? What happened to the income? So I am a media specialist for two different companies, for Calvary Church and for my father's company.

And I'm a truck driver, so I drive some of my trucks locally. So I deliver to local stores and restaurants. Okay, what did you guys do to triple your income? That's exactly what we did. You took a truck driving job? Yeah, he changed over um he was in manufacturing and then through a series of events he ended up in truck driving i love it nice race well it worked out so uh what kind of debt was the 49 000 we had a little bit of everything we had credit cards we had medical bills we had two car loans we had student loans. We had house renovation projects.

Wow. Very good, you guys. Very good. So what happened 13 months ago that got you on this journey? Well, Lou actually lost his job because of COVID. And so then we were down to just my income, which is why it was so low at the beginning. And it was like, oh no, we've already overdrafted in our account prior to him losing his job. I'm like, how are we going to survive now? And I had just read your financial peace book. My parents had given it to me from like an old class they had taken. And so I had read it in February and then April hit and that's when he lost his job. And so it was like, we have to do something. So I convinced him, hey, there's a free trial online.

Let's go watch the FPU classes. And so we watched them together within a week. Binged it. Yeah, we just watched it all the way. I like it. What is he going to do? You can binge Financial Peace or you can binge Tiger King. Choose wisely. All right. Yep. And so that's what got us all the way. I like it. What is he going to do? You can binge Financial Peace or you can binge Tiger King. Choose wisely.

All right. Yep. And so that's what got us on the journey. Wow. Wow. Good for you. Good for you. And you went into gear.

I mean, hardcore. Yeah. He took on three jobs. So it's like he went from having no job to having three jobs. He was working manufacturing for 10 hours. And then he would go to a pizza delivery place for another five hours at night. And then on the weekends, he was doing truck driving to ease into the full-time truck driving that he is now. Yeah. Wow. Way to go, guys. Excellent, excellent work. I'm so proud of you guys. What do you tell people the key to getting out of debt is?

Well, for me, definitely the budgets. I think that just having a plan and having it on paper or in an app. We love the EveryDollar app. That is just huge. You can't keep track of it in your head. I thought I could. You can't. You overdraft. That's how you overdraft. You try to budget

in your head. That's impressive. So how old are you two? We're both 26, but he's turning 27 on Thursday. All right. Congratulations. Happy birthday. Thank you. Well done.

You guys have any cheerleaders along the way? Yes. So we have my family here with me. They were huge cheerleaders for us. And then our church family was really big and was always asking us, well, how far are you? How close are you? And so they were really helpful as well. You got into it so much you got the T-shirts printed and everything.

Yeah, we got to tell people what is on this T-shirt. Live like no one else. With a gazelle on it, his says. And then hers is warning, may start talking about budgets at any time. I love that. That's spreading the love. You went from being all in your head and now you're just talking about it constantly. I love that. That's spreading the love. You went from being all in your head, and now you're just talking about it constantly. I love that.

Yeah. It moves slightly. Yeah, and we brought a third one because we had an announcement to make. Oh. We are pregnant with our first child. Congratulations. If you're listening, let me tell you what's happening. It's the most adorable baby shirt and it says, I'm in the debt-free club.

I love it. Well, congratulations. So does everybody know already back home? Well, now they know. Oh, this was it. This was the official announcement. We had to. What better way?

They've got a great platform to share the news on. Exactly. Now they have to watch it. Right? Yeah, got a great platform to share the news on. Exactly. Now they have to watch it. Right? Yeah, they've got to watch your debt-free screen. This is great, you guys. Wow. Well, congratulations.

Thank you. This is what a special year this has been. Yes. Your whole lives are changed. So proud of you for taking control. And both of you, neither one of you are afraid of hard work. You're willing to put in the hours to get it done. And once you take control of this, you know you can take control of a lot of things.

So very, very, very well done. All right. We've got a copy of the legacy journey for you because obviously you're having a new legacy. That's awesomeness. Very, very cool. Next chapter in your story is Baby Steps Millionaires, without a doubt. You guys are fun. Very well done.

And we've got a copy of the Total Money Makeover for you to give away to someone since you can't stop talking about budgeting. You can give them a copy of the book, right? Yeah, probably. Hand it out and go, read this. Yeah, that'll work. Very, very cool. All right.

Lou and Brittany and Baby from Minneapolis, $49,000 paid off in 13 months, making $27,000 to $90,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're pregnant and debt-free. We're pregnant and debt-free. We're pregnant and debt-free. That was fun.

What timing. Oh, that is fabulous. You can't beat that. Can't beat a baby announcement and the debt-free announcement all at once. Yeah, very, very, very cool. Blinds.com gives us our question of the day. They have a 100% satisfaction guarantee. Even if if you mismeasure you pick the wrong color they'll remake your blinds for free free samples free shipping and with the new promos they run every month you'll save even more

use the promo code ramsey to get the best possible deal today's question comes from tony in new jersey i know dave teaches about investing in the four mutual fund categories through a 401k or IRA, but I prefer investing in single stocks on my own. I deposit money regularly in my Robinhood account, and it seems to be doing pretty well. What's the downside to this type of investing as long as I'm contributing from every paycheck? This one we're exploring on The Fine Print, Dave. Oh. Yeah, this is going to be a whole episode

on DIY investing, on Robinhood, a lot of stuff in the news about Robinhood. This is an area where people feel like they can be tricky. They go, well, I get Dave's stuff. It's old school. It's a little boring. It's a tortoise. But Dave, I've made some good money off some single stocks this year. Tesla's been doing great. I'm throwing some money into Tesla. And the problem is until you touch the hot stove, you feel like you know what you're doing cooking in the kitchen. And so my worry for Tony is that if you want to mess with single stocks after you've done the 15% retirement and this is fun money for you and this is a real small percentage of your portfolio, that's fine. But don't put all of your eggs in this single stock basket.

That frightens me. The Bible says, spread your portions to seven, yes, to eight, for disaster may come upon the land. That's a biblical version of diversification. Leaving all your eggs in one basket, some idiot on Wall Street is twirling the basket and you're betting everything on that one idiot. That makes you not smart. Diversification lowers risk and increases rates of return over a long period of time.

It's a standard portfolio management process that has been used in financial planning for decades, and it outperforms the single stock investor um not maybe not on the short term but single stock investors are a lot like fishermen all they talk about was the time they caught a boatload they never talk about the time they went out there and lost everything they never talk about the time that it went through the floor and then everything got messed up because some idiot was playing margin on them. And so, Tony, you're asking for it. You're playing Russian roulette with your money.

You're asking for it. And you're going to get your head taken off, son. The market's going to correct your little butt. And it's just a matter of when. And then you're going to have an ouchie moment and you're going to know what George and I are talking about. Diversification lowers risk. Spreading your money across many, many investments, like in a mutual fund, versus being in single stocks. You are asking for trouble.

This is the Ramsey personality, is my co-host today. Open phones at 888-825-5225. Thank you for joining us, America. We're so glad you are here. Wynn is with us in Houston, Texas. Hi, Wynn. Welcome to the Ramsey Show. Hi, Dave.

Thanks for taking my call. How are you? Better than I deserve. How can we help? Awesome. Hi. I'm a 25-year-old single guy. I grew up in Texas, went to college, got a master's

in accounting. And then after college, I got a great job in New York City for about a year when COVID hit. And I was a part of that group that, blessing in disguise, kind of escaped the city and migrated back to my parents where I've been saving and working remotely and just saving really. And so I don't have a lot of expenses and I've put up about 45,000 in my 401k in addition to kind of 23,000 just sitting in a bank account. And I'm looking to move back. And so my question is, what do I do with that extra money? Is it worth buying a rental property in somewhere like Houston where I can maybe one day move back and I can be making a little bit of rental income on the side, or should I just park it in an IRA or mutual fund while I pay for rent in New York because I can't afford real estate in New York? So you're going to be renting in New York and you're wondering,

should I buy some property for fun as a rental in Texas with this money, use it as a down payment? And then maybe move back into that property one day in five, 10 years. Well, you may need a little more than that. I don't know what the, I mean, you're in the Houston area? Correct. Yeah. I mean, you're a young guy and I feel like you're not sure where life's going to take you. I don't think rental property is a bad idea, and you may turn that into a primary residence one day. But I just think there's a lot of life ahead of you, and I don't know that this is where you want to plant it right now with that chunk of change. Yeah, two problems. One is you're getting ready to go into debt on the rental property, and two, it's going to be long-distance rental.

So if I'm in your shoes, I'm not doing that for those two reasons. I'm just going to rent in New York for a little while and pile up cash, continue to pile up cash until you figure out what your long-term game plan is. Somehow, I don't think you're in New York City for 25 years. Yeah, I don't think so either. Yeah. And when you come back to Houston or back to wherever you choose to come, quote, back to, Texas, Tennessee, whatever it is, that is when you would buy in that market.

And by then you'd have a really, really good pile of cash. You might even pay cash for your first house. I'd love that. If you did that. That's a possibility. But, no, I would not own long-distance rental property, and I would not go in debt to do it. Two reasons to stay away from that. Sounds kind of cool. Sounds kind of fun uh until the renter doesn't pay all right zachary is in atlanta

hi zachary how are you better than i can you know what i'm trying to say that thing yeah i got it. What's up? So I have a couple things going on. First, I've been on your plan for, on the Ramsey plan for quite a while. I've gotten out of debt, I think, twice. I've been totaling over $28,000 total. That was all due to a worker's comp lump sum paying it off, so I didn't really, like, learn the lesson, you know. So right now I'm in Atlanta, and I'm an electrician. I do that, and because COVID stuff, it's been back and forth on how much I'm making and things like that because they're raising prices and all that.

I'm also a youth pastor, and I just's basically just on Sundays and stuff like that, meeting with the youth, and the Lord's been really good there. So I have about $8,000 left in this debt and this grouping. I was at 18 a few months ago, and then I sold the truck, and that was hard to do, but I sold it. And we got about $k left um we got a baby on the way and i um i'm having an issue getting full going on the ramsey way um because i didn't learn the lesson the first time um and i think my issue is one i mean i know i need to um the cutting the eating out actually brought my lunch today thanks to my wife um my biggest issue that i'm having is with the envelope system i'm not sure

how to budget with envelopes with money that i don't already have in cash yet and i'm kind of struggling with that along with the i know i need to stop eating out i just want to get some advice on that well let's just use a grocery store envelope as an example. Okay? Okay. When you go to the grocery store, if you're not borrowing money to buy the groceries, you're either hitting your debit card and taking it out of your checking account, or you're taking it out of your groceries envelope.

Agreed? Yeah, the cash. Yeah. Yeah. So what would be wrong with taking the money out of your checking account and put it in cash in the grocery envelope because it's in there wouldn't be an issue with that it's in there well no so here's yeah so at the end of the month um i get paid bi-weekly and so at the end of the month i have

or the first of the month have rent come in so all the money i've saved up at the first of the month okay i'm like all right so i'm let's say the 30th of september we're going to sit down and do our budget be my wife and we're going to want to put cash in there well i'm not going to have any cash to put in any of the then you're not going to have money to buy groceries in your checking account until the church pays me on the fourth of every month like they've been doing and then so the my point is your system... Wait a minute, stop. You're not going to buy groceries for four days out of your checking account,

is what you're saying. Yeah, we planned the two weeks prior to get the stuff before. Well, how did you... I mean, the envelope is not the problem. The problem is you didn't plan to have money for groceries. Yeah. If you've got money for groceries in your checking account, there's nothing stopping you from keeping it

out and putting it in the grocery envelope. Okay. I'm just processing. Okay. You see what I'm saying? You can't write a check or use your debit card at the grocery store unless there's money in your account. Agreed? Yeah. store unless there's money in your account. Agreed? Yeah.

And if there's money in your account, you could take that exact same amount out of your account and put it in cash into an envelope that says groceries on it, couldn't you? Yeah. Okay. So you're not short of cash unless you're short of cash. The envelopes don't change the equation. Yeah. I guess it's just when we're sitting down doing it on the 30th,

I don't have any of the cash to put in for the beginning of the month until the 4th. Then how are you buying groceries between the 1st and the 4th now? I would have bought it a week or two prior. Ta-da. So am I doing the cash budget for that? You fill the envelope when the next check comes in on the 4th. Yeah.

Because that's the way you're doing it now. The only difference is you're running out of your checking account. Yeah. No, I'm hearing it. So whatever that next check is after the 4th, that needs to fund you through the next time you get a paycheck. So you can divide it up if you want. Yeah, and that's what we've been doing, but...

Go ahead. But you're having issues with doing it that way? Dividing it up. Yeah, that's the best way to say that. Yeah. Yeah. Just divide it by two. If you're getting two checks a month and your grocery bill's $200, you can put $100 in on

one check and $100 on the other if that gets you through. All right. It's not going to be more than that. But it's every two weeks, so you've got to look at the calendar. Yeah. Because you don't get checks on the 1st and the 15th. You get a check on every month on the 4th for your youth pastoring, and then you get a check every two weeks.

So some weeks, twice a year, you get three checks in a month. That's true. Yeah, because the three weeks are whatever. You have the magic month when you get paid every two weeks, yeah. And so two times a year you get three checks in a month that's true yeah because you have the magic month when you get paid every two weeks yeah and so two times a year december this year exactly exactly so that that's the point and um so what you've got to do is you sit down you look at the calendar and you say this month the month of september i'm going to get or the month of october now coming up i'm going to get a check on x and y and i'm going to get a check on the fourth and then you allocate each one of those checks

across the things and oh by the way the very most important category of all is food yeah the four corners i've heard you say the four four walls. Yeah. And I had one more other thing if I have the time for it. So the wife is pregnant, and it's really hard to say no to a pregnant woman who's hungry. So do I need to set a separate budget for that to come out of, or do I just have to say, look, baby, we're just going to have to suck it up? The pregnant woman that's hungry has to say no to herself because she's building a life for her child. It's not your job to be her daddy. She looks in the mirror and says, it's good for my family for us to be on a budget and stick to that budget.

And has to agree to the budget. You don't tell her what the budget is. The two of you together agree to the budget. And then she will be saying no to herself because she's like a grown-up woman and stuff. This is The Ramsey Show. This is James Child, producer of The Ramsey Show. Did you know The Ramsey Show is one of the most popular podcasts in the world? Subscribe or follow today wherever you listen to podcasts.