The Ramsey Show - App - I’m in Debt & Reddit Told Me To Call The Ramsey Show... (Hour 2)

Episode Date: May 19, 2023

George Kamel & Dr. John Delony answer your questions and discuss: "Help! I'm in debt and Reddit told me to call Dave Ramsey..." What to do after you get out of debt, "Should I invest in Pokémon cards?" "How do we stay encouraged when we keep getting knocked back in the Baby Steps?" Why you shouldn't do any additional investing outside of retirement until your house is paid off. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey Personality, George Campbell, joined by best selling author and my best friend, Dr. John Deloney, host of the Dr. John Deloney Show. And we're here for you, America, to take your calls about money, mental health, relationships, boundaries, lack thereof, that student loan payment that you're hoping gets forgiven, that car debt that you regret taking out in the first place, we want to help you take the right next step. The number is 888-825-5225. Odette is kicking us off this hour from Massachusetts. Is that right, Odette? Hi. No, I'm from Melbourne.

Oh, okay. We got the abbreviation wrong. It's okay. We're working on it. How are you doing? Hi, I'm doing good. Oh my God. I'm so happy to be, I don't even know. I'm shaking right now. I'm in so much debt and I really don't know what to do. In January, I went on Reddit, on personal finance subreddit. That was your first mistake. It was going on Reddit. And I asked the question if I should get a cash out refinance on my house so I can help pay these debts because they're really, you know, like I'm, it's really bugging me that I have all these debts. And one of the responders, actually a lot of them actually responded saying, hey, you can't pay debt by taking out money or something and that I need to go look up Dave

Ramsey and watch his videos. Wow. I love Reddit. I think you owe Reddit an apology. I do owe Reddit an apology. Listen, the subreddit for personal finance can get haywire over there, but I'm glad they steered you in the right direction for once. So they told you, hey, talk to these guys over at Ramsey and see what they think? Yeah.

So I went to the library and I got your books. I got your audio book and I'll drive to work. I'll be listening. So I started trying to do the baby stuff. So I already had, because I have a $300,000 house. I have a $60,000 school loan. And then I have $13,000 left on my car and I have $20,000 in credit card debt. And I've just been, I don't even know, like I've just been so confused on what to do. You know, I tried to pay, like start paying a lot of the money cause I think I was on baby step two or three after you save up your emergency fund, then you, um, you start attacking that debt, you know, show and pay the lowest one first. Right. But then I had the money to pay the lowest one first, but I didn't,

cause I kept looking at my savings. I'm like, Oh, I don't know. What if I don't have work? How am I going to pay my mortgage? Oh, you got nervous. You had money in the bank, but you went, I don't feel good having only a thousand bucks in the bank. Yes. Um, and it doesn't come from nothing. Cause I, um, I was in the army. And then when I got out, I kind of got I I was really, really depressed and I tried to unalive myself. But I also had like a drinking problem.

I ended up not working for a whole year doing rehab and also going like being in an institution for like psychiatry. And because I had a savings that year, I ended up paying all my bills with, you know, my savings. But now I've managed to build up money again. And I'm just, I don't know what to do. I'm so confused how to go about this debt.

And now that I'm sober, I have a clear mind. Again, I'm taking my antidepressants. Now these bills are just holding me back. I'm so sad. It's dragging me behind, and I really just don't want to be in this situation again. So Odette, can I just stop for a second?

George is going to walk you through the math of all of this. Can I tell you how proud of you I am? You are incredible. Thank you. proud of you I am you you are incredible thank you and George and I have to talk to people I mean we have the honor of sitting with people who are struggling and going through hell you've been to hell and you're back and that's a hard journey yeah you're an overcomer. And if you can overcome what you went through, you can overcome a pile of debt.

So how long have you been sober? Since 20, for two and a half years now. That's incredible. What's your official diagnostic? What are you taking meds for? Major depressive disorder

and anxiety. Are you still... And I also had a drinking anxiety. Are you still, I also had a drinking problem. Are you still in treatment for the MDD? No, I did after getting out of the psych ward, I did outpatient therapy and then I went into drug and alcohol counseling for six months.

Okay. And then now, then I got a job again. So I started catching up on bills and stuff but i also admit that i do have a spending problem i'm not even gonna lie about that when i do have money i spend i don't know do you still have credit cards open um yes i don't use them since i read your book i i just kept them at home i don't take them if you don't use them and cut them up okay and that's going to help you curb this because

what happens is you only have your own money and then you spend differently. And if you run out of money, you go, oh my gosh, I can't spend anymore. So that's step one is to not go into any more debt and cutting up the card is going to help with that. Okay. So how much money do you have in savings? Currently, I have $20,000 in savings. Love it. And what's your income? I make $120,000 a year. Amazing. Okay, so just looking at the math, you have $87,000 of consumer debt, right?

Yes. You have $20,000 in the bank. So let's say you went down to one in savings, and then you have your checking account with some buffer there. would knock out a huge portion of this debt okay right then you're down to less than 70 making 120 how quickly could you pay off 70 000 if you were making 120 000 and you were doing the debt snowball under two years okay yeah right can you find 35 000 a year right no if you do a cash out refinance i take back all those nice things i said about how smart and brave and strong you are i'm sorry i'm sorry okay the reason they told you to talk to us is to talk you off the ledge of doing a cash

out refinance because what it does it just robs future Odette and keeps Odette in debt longer with her mortgage. You're going backwards. With your house on the block. And you think you did something. And you know this out of all people that it takes behavior change to transform. And so cash out refinance is zero behavior change. It's a shortcut that leads to nowhere. But when you bust it and you use that future income and you're going to sell everything, you're going to use that savings, you're going to feel that momentum. And that's actually you expending energy to get out of debt. And that's what changes you for the better. So I looked at like my, uh, like my mortgage is like 1700, right? Um, so I looked at all my bills,

like you guys said I should do, like just to see where, you know, and I realized that like all my bills probably account for like $2,800 to $3,000 a month, but I don't know where the other money is going. Well, that's what happens when you start paying attention by doing a budget. And I'm going to help you out with that by giving you one year of every dollar plus, and that has a paycheck planning tool in there. So what you're going to do is put in your income, put in all your bills, put in the due dates, and it will actually show you when you're going to run out of money. So what happens is when you make this budget with every dollar, it's the boss. You're the boss of it while you make it, and then it becomes the boss of you for the rest of the month, telling you where and when

you can spend money. So hang on the line. I'm going to gift you that as well as one year of Financial Peace University. Watch all nine lessons, and it will make you allergic to debt for the rest of your life. And I want you to call back and do your debt-free scream or come see us in person because it will be a powerful one that will impact so many people. You're an inspiration, Odette. Stay the course. This is The Ramsey Show. If you've never experienced Smart Conference before, let me tell you, the energy in the room is mayhem. It's absolutely electric. It's so fun. This is Ramsey's biggest event of the year.

The event is packed with inspiration, motivation, information, laughter, jamming. We're talking how to get in control of your money, improving your mental health, strengthening your relationships, and building a successful career. So whether you're on baby step two or baby step seven, you're going to leave on fire and you're going to be smarter. So make your plans now. Our next Smart Conference is happening in Chicago this fall. Join all of us, Dave Ramsey, Rachel Cruz, George Campbell, Jade Warshaw, Ken Coleman, and me at Smart Conference Weekend on September 15th and 16th. Right now, our early bird general admission ticket price is $80. It's $79.

And we have limited VIP and platinum tickets, so don't wait to get yours. Those sell out usually real, real, real quick. The VIP ticket includes a meet and greet with Jade, Rachel, George, Ken, and me. And I love getting to meet you all and hear your stories. It's one of my favorite things in the world. Go to ramseysolutions.com slash events today to get your tickets. I'll see you there. I'm pumped for this.

Yeah, it's going to be fun. All right, let's get to the phones. The number to call is 888-825-5225 if you want to jump in and ask your question. Martin is up next in Austin, Texas. Martin, welcome to the show. How are you doing, guys? I'm about to be finished with Baby Step 2, and I'm just kind of at a point where I'm sort of lost

because I don't own a home, and my wife and I's income isn't that great. Okay. Tell us more. So you're finishing Baby Step 2. You're almost out of debt completely that great. Okay. Tell us more. So you're finishing baby step two. You're almost out of debt completely. Yep. Okay. How much more do you have? Um, about five grand in, uh, loans total. Awesome. And, uh, I'm almost done with my truck too. So that's, that's, it'll be done by the end of the year. How much have you paid off so far, Martin?

The truck loan was originally $27,000, and it's down to, I'm looking at it right now, $12,000. Nice. Good for you, man. And what's wrong with your income? How low are we talking? My wife and I only make about $5,600 combined a month. Okay. And your next goal after baby step two is to get that three to six months of expenses.

Do you have that target number in mind and how long that will take? Yeah, I believe that'll take us, we'll probably be around there in less, slightly less than a year. Okay. So I don't feel like we're lost. We still have a lot of goal ahead of us. We got to get out of debt. We have to get an emergency fund. We got to begin investing 15% into retirement. So where do you feel like you're lost in the plan?

Well, I currently rent, and I know that a lot of people that call into the show are all homeowners, and I don't know what to do about renting. Should I save up for a house i can continue renting should i i'm i'm that's where i'm mostly lost i would rent with my head held high i've rented at multiple places when i had just really great jobs because it was the smartest thing for me and my family in that season. Yeah. And right now the last thing you and your wife need is y'all are working to change everything about your life and you're changing your family tree is to

drop the stress of home ownership, home buying all that. It's a mess right now. So don't, that's true. You can feel like you are getting behind by renting. You are not, you're getting so far ahead by paying your debts off. You know what you sound to me? You sound tired. Like y'all got gung ho and y'all went racing off into the woods and your, your, your

hands are on your knees and you're sucking air and you realize, oh man, we're about halfway there. Yeah. I'm just kind of worn out. We both are. Yeah. Stay the course, man. Martin, I heard you say everyone else, they're getting homes. Have you met everyone? They're broke. Yeah, that's true. And so here's the thing. You've got what's called FOMO right now. Fear of missing out. Everyone else is getting home. There's not going to be any homes for Martin when it comes time for him to buy a house. What I want you to have is something called JOMO. That's the joy of missing out. That's the joy of saying, dude, I'm running my own race. I don't care what everyone else is doing on Instagram. And it might take me three years longer to get a house instead of tomorrow,

but I'm going to do it the right way to where Martin's not calling the show again a year from now going, so we got a house before we should have, and now we can't breathe. That's a whole nother version of not breathing. And so I want you to hold your head up high and go, all right, we got a six month goal to get rid of this debt. We have another six months to get the emergency fund. Then we're going to start saving up that down payment. And that means two, three years from now, we're going to have a healthy down payment and step into this thing the right way. Can I tell you something cheesy that me and my wife did, Martin? Sure. One among many things. So I want you to wrap your head. I was associate dean of a university. My wife was a fancy pants tenure track research professor. And you know what we did together

with my two-year-old son at the time? We got a construction paper and some scissors, and we made one of those chains that you make when you're a kid and you're going on a ski trip, and you take off a link every day until the ski trip or until Christmas. And we made one for every month, and we wrote the dollar amount inside of the chain, and I hung it in our bedroom on the wall. It matched nothing and it was embarrassing and I was able to see it

every day. This is why we're doing this. And when we, every month rolled around and we got paid once a month, we would send another huge chunk of money towards to pay off our debt and we would pull it off together. We let my son pull it off, and we did it as a family, but we got to see it, and it just, for whatever reason, having 36 chain links for you or having 72 and taking one off every two weeks, you're going to get to see that progress right in front of you, and for whatever reason, there's something about that visual cue that just reminds us we're in it, we're in it, we're in it, and we can keep going because there's the finish line. Yeah, that makes sense. I guess

what bothers me is we're currently paying $1,400 a month for rent, and it'd just be nice to live somewhere where I'm not making a payment on something. Well, you're always going to... Here's the thing. There's a fallacy out there that renting is throwing money away, right? Well, you're not putting into the asset. And the truth is, renting is the most you'll ever pay. A mortgage is the least you'll ever pay.

Your property taxes can go up. Your homeowner's insurance can go up. You're paying a huge chunk of interest to the lender just for fun to own that house. And that's not touching PMI, which most people have when they get into a house when they're broke because they can't put down 20%. So you're paying an extra few hundred bucks to the lender every month. And then there's other things. There's HOA fees. You got to pay for all the maintenance and repairs. And so home ownership is the most expensive thing you'll ever get into. And so

don't think for a second that just trading that for a $1,400 mortgage payment would solve all your problems. And you got to get this out of your head, my brother, this idea that sure would be nice. Because sure would be nice, you can have yourself a nice jet and then somebody pull up next to you in their jet and you think, well, would sure would be nice if I had, sure would be nice is a rocket ship to being broke. Get out of that game. Unplug from that game, brother. Sure would be nice to have no payments. That's not where you are right now.

So spending any sort of mental energy on sure would be nice is a distraction from where you currently are. And you said you had a low income and I'm doing the math. I'm going 5,600 a month take home pay. That's 67,000 a year. That means they're bringing home, they're making gross income of 80 plus. And so I don't buy this thing of like, oh, we have a low income, so we just can't. That's Eeyore syndrome. All right. Now I know Austin, Texas, it's expensive out there. It's kind of like Nashville's sister city and it's pricey. But there's people who are making $40,000 going, oh my gosh, if I could make $67,000, my mind would be blown, the things I could do.

And as soon as you get rid of these payments, you're going to free up that wealth building tool called your income. And you're going to realize, oh, we made plenty. It was just going out to the wrong things instead of helping us build wealth and accomplish our goals. Just stay on the path. Stay on the path, man. Slow and steady, slow and steady. It's so hard, John. And I feel for Martin because I remember feeling that way. When you see everyone

around you going way further than you are and you're like, but I'm moving so much slower. Do I have to do this plan? And the problem is shortcuts make you think you've gone further when really it's just holding you back. So that's such a tough thing to grapple with and go, I'm going to have that Jomo instead of the FOMO. I'm going to do it the slow way. I'm going to be the tortoise instead of the hare. I'm going to be the crock pot instead of the microwave. But man, there is such peace in doing it the slow way. And the hares, they're going to get caught eventually, whether now or later on. And nobody cooks good food in the microwave. That's living like no one else.

So later, you can live and give like no one else. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by my good friend Dr. John Deloney this hour. And we're taking your calls at 888-825-5225. Henry joins us in Chesapeake, Virginia coming up next. Henry, what's going on? Hey, Ramsey team. Thank you for taking my call. Absolutely. What's going on?

So I recently completed your Foundations in Personal Finance homeschool curriculum. Yes. And I have a question about investments. Okay, hit me. How old are you? So I'm 16. Don't hit George. It's a whole thing.

I'll go down easy. Yeah. All right. So specifically, my question is Pokemon cards. My parents say that Pokemon cards don't have any value in them and that they won't make me any money. But it seems like every Pokemon card set from previous years has just been going up and up in price. For example, a box of Pokemon cards that were released in 2021 originally sold for $120.

Now they sell for about $400. What are your thoughts and are Pokemon cards good or not good investments? Great question. Very well worded, Henry, and I'm proud of you for going through the curriculum. Did you learn anything in the curriculum about investing? Do you remember anything from that section? I learned that I should never invest in anything that I do not know about.

That's good, and you seem to know a lot about Pokemon cards, that's for sure. Will you teach me something about Pokemon that I don't know, and this will be even what Pokemon is. That was a challenge because John knows everything. I don't know what Pokemon is, so tell me. Well, Pokemon was originally released in the mid-90s in Japan. And its original name is Pocket Monsters. And it first used to be or it first

used to be a game on the Game Boy called Pokemon Red and Blue. Dude, Henry, you're like a Pokemon scholar. This is amazing. And eventually it kind of evolved into Pokemon cards which came out in Japan

about 1997 and in America about 1999. This is what I grew up playing, John, was Game Boy, Pokemon, got the cards from my friends, and you got the packs for, you know, four or five bucks from the comic book store. That's so weird. I grew up dating and playing instruments. Did you, though? I'm just, I don't know. Sure. Okay. All right. So George is going to teach us.

So the thing, Henry, is there's a lot of collectibles out there and people can make money. And you probably have seen YouTubers like Logan Paul who are like, I paid five million dollars for this super rare charge, right? That's the stuff that we see, that we click on, that we view. The reality is most

people, it's like going to Vegas. It's like the slot machine. You're hoping that you get the pack with the right card and all of a sudden you went, I spent 300 bucks and my cards aren't worth nothing. And so the chances of you getting that card that you can then flip and make a whole bunch of money isn't worth the time. Now, if you wanted to do this beyond your normal investments with just your fun money and you're super into it, you could do it. And I bet you would call back and you'd be like, hey, I have $7 million because I invested in Pokemon cards. And we'd all be like, what? This kid's crazy. And so I'm not saying that it can't be done. I don't want to shoot down

your dreams. But the truth is these collectibles, these commodities, they're just based on hype. And so Pokemania could end next year, all of a sudden, because we all move on to something else. Versus something like the stock market, which history has shown us, will appreciate over time. Yes, there'll be some volatility, but over 50 years, it's going to be a good investment.

We just don't know that about Pokemon cards. Now, here's my challenge to your parents. I think they're right. I think George is right. They're not great investment vehicles. And also, sometimes having a collectible that you're interested in

is fun, and you clearly have a lot of it. You know the history of Pokemon cards. So is trading cards, getting new cards, going through the value of them, is that fun for you? Is that exciting? Well, it's exciting to open Pokemon card packs and see that these are pretty rare from the sets that they were released. And going, well, this is like one of the rarest cards in the set.

Yeah, so I don't want you to lose that joy for something that you're interested in that you think is fun. I just don't want you to go into debt for it, and I want you to not save up for college for it. But man, I want you to enjoy your life too. All right. And it's about the spirit of it, right, George? Yeah. There's an entrepreneurial spirit that you have, Henry, where you go, I love something, but I also want to see like, could I make money from this? And that's a great thing to feel inside.

You just want to do it the right way. Otherwise you're going to be chasing the next kind of get rich quick thing. I'm going to buy this and hope because it's the same spirit that a lot of the crypto bros have, right? You know about cryptocurrency and they're going, oh, if we just get this one coin, it's going to be worth 10x a year from now. This is going to be the one. And so you're kind of hoping for the same thing with Pokemon cards that if I just buy the right pack, it's going to have the right collectible that one day will be worth something. So I would do it because you love it and do it with your

extra fund money, but I would not do it as part of your investing strategy. And George, let me, I'm going to ask you about this or tell you about this. I, this is 10, 12 years ago. I had just bought a house and then somebody else bought a house down the street and I was checking every house purchase to see what they were buying theirs for. And I was kind of doing my own comps in my house because I was a little bit, and I was trying to keep up with every sale. And what are you listing it for? And I was talking to a finance buddy and he said something that was important for me. He said, cause I was telling him, Hey, I think I'm going to sell now because it's gone up this much in three months. I'm gonna do this. And he said,

Hey, and here's the line he gave me. He said, give your wife a home. He said, you're going to make money on your house over time. Probably maybe not, but probably, but man, if you ROI every single transaction in your life, you're going to make yourself nuts. And it was a call back to have a place where you can drop your shoulders, like a home, right? Follow good money principles, obviously, but we can get obsessed about things. And so I used to buy a guitar and then I would always like, how much does it cost? How much does it cost? And have I made any money? Now I buy a guitar because I like it and I want to play it and I have a scenario in my head where I'm going to play it live and if one day it's worth money great but I had the money now I saved

up the money I bought it I like it I play it and if it loses money I still got the enjoyment out of it that I wanted right and so I think with things like Pokemon cards with some baseball cards whatever thing you're kind of into have a spirit of joy about it and if it goes down in value you still got you still have the joy but man there's just i think there's a few things i think we over roi everything in our culture and we over hack everything and there's some things like a home there's some things like strumming a guitar in your basement when your kids are asleep there's something about i don't know writing in your favorite journal that are things that just bring you peace and they bring you joy and they bring you beauty to your life. Man, those are worth the expenditure in and of themselves. And if they end up being

worth money on the road, great, right? Yeah. You make a great point. There's a lot of things in our lives that we subconsciously make idols in our lives where we spend so much time in it, around it, that it takes over our brain. And so when crypto came about, my major issue with crypto was not that you're going to lose a bunch of money. That's a possibility. My issue with crypto was that it was 24-7, and you can just see on your app it, volatility all day long. And there was so many, there was new coins, there was community groups all about it, and you could just have it consume your life. And that's why I joke that crypto is just, you know, Mary Kay for young men, because there was this obsessive nature, just like there is with multi-level marketing, where people were just, it took over their life. It became a personality

trait. And that's where I go, let's draw a line here. It's great to enjoy something. It's not great to be consumed by it. That turns into an addiction. I love that. That's good. There's some wisdom for you, John. But I don't want to hurt Henry's dreams because this kid's amazing. He's going to go big places, and there's nothing wrong with using these Pokemon cards and having fun with it.

Well, and I also think that's an important conversation to have with parents. So my son, he cleans out the horse stalls of the people who live next to us on the ranch next to us. And he earns his own money. And he also mows our yard and I pay him for helping participate in mowing our place. And he earns his own money and then he'll want to spend it on something. And my first impulse is often, that's stupid. Or why would you want to spend it? And then I think, no, he's 13. This is when he's going to learn those lessons of value and what's important and what's not important. So we're taking care of the giving, we're taking care of the saving. It's your money, right? And I think for parents, it's good to

teach them lessons, but also let them learn, ooh, I spent $25 on what? Yes. Right? And, man, that wasn't worth it. Yeah. And learning that way is much healthier than being forced to never get to play a video game your whole life or never getting to buy some Pokemon cards. So I'm rooting for you, Henry.

Keep us posted on how it goes, my friend. This is The Ramsey Show. This is The Ramsey Show. This is The Ramsey Show. I'm George Camel, host of the George Camel YouTube channel. You can go check that out. We got three episodes a week, Monday, Wednesday, Friday,

launching over there. And my friend, Dr. John Deloney, has got a show that he records next door called The Dr. John Deloney Show. And John, you guys are releasing episodes a few times a week as well, right? Yep, Monday,iday coming up we're on the same schedule we're we not that we compare notes to see who's winning our shows are very different your show is more long form calls talking about mental health relationships boundaries all the things physical health

mine is just fun humor personal finance personal finance, deep dives. Yeah, but yours has got some great lessons and hacks in it. Yours teaches you just how stacked the system is against you. In a fun way. Like how the entire machine is set up for you to fail. My job is to go, hey, you're in the matrix. And they go, no, I'm not. And I go, yeah, you are. Here's why. And they go, oh, no, I'm in the Matrix. And they go, no, I'm not. And I go, yeah, you are. Here's why.

And they go, oh, no, I'm in the Matrix. Help me get out. And then they call my show. And John helps them get out of that. There you go. Oh, I love it.

Okay, John, it's time for a question of the day, which is sponsored by our friends at Neighborly, your hub for home services. After fires or floods, their rainbow restoration pros

offer homeowners trusted full-service restoration expertise like mold remediation, carpet cleaning, odor removal, and more. Visit neighborly.com today to find Rainbow Restoration services in your area. Today's question comes from Jen in Ohio. Jen writes, My husband and I have followed the Baby Steps for about six years, paid off $110,000 in debt, and were on baby step six until a few days ago. Murphy hit our house hard in the form of a cancer diagnosis that we're paying mostly out of pocket for the treatment. The wind literally blew our backyard fence down, and then we're paying a

stupid tax because we didn't know our new state had city taxes and we never filed them. Luckily, we have an emergency fund and can cash flow all of this, but this is the third time something like this has happened. We feel like we're finally getting ahead and then we get knocked back and have to start over. How do people stay encouraged when we feel like we're filing in the same pit every few years, falling in the same pit every few years and have to keep pivoting back to gazelle intensity. It's very frustrating and very discouraging. Well, there's a lot going on here. Obviously, the cancer diagnosis sticks out as something that no

one could ever prepare themselves for, regardless of a financial emergency fund. It's great that you guys have those things, but that is a heavy burden on top of the ankle biters. Oh, we got to replace the fence. We got to pay the taxes. On top of feeling this emotional weight of, oh my gosh, we have a health scare. Well, sometimes a fence is not an ankle biter, right? It could be 20,000 bucks.

It's almost the axis of evil here. You've got a medical challenge, a weather challenge in the government it's the trifecta the trifecta of sadness yikes oh i'm so sorry i wish you were here i'd give you a hug um so here's my first thought as i as i'm reading this and george you can tell me if i'm delusional but as i read been wanting to say that for a while as I read Jen's story here I kept thinking thank God

thank God they continue to get back up and thank God they continue to save money, put money away pay off their debt thank God they continue to follow these steps because they keep getting shoved and hit and pushed and they've never had to go back into debt.

These things have, any one of these things, a backyard fence, I remember when my fence fell down and I couldn't afford to put it back up. Cancer diagnosis, taxes coming out of the woodwork. I've got people that I know who have been paralyzed for years by back taxes. And this hurt. It was a punch in the nose, but it didn't knock them down

because they continued to put in the work. And so while I can't imagine being in this because I know how it would feel, as an outsider, I'm looking at this going, y'all are incredible. You've done the work for just this moment, right? Yeah. And I love what you said. I wrote down the word perspective. So if you just have some perspective and go, can you imagine if we didn't have this emergency fund?

Can you just imagine if we didn't have good health insurance? If we still had 110 grand, but we had a suburban in the driveway. And so, yes, this stinks. But what you're looking at here is you turned a crisis into an inconvenience by having the emergency fund, which is exactly what it's there for. So, yes, it hurts because you've got to rebuild the emergency fund, and you're tired, and you're dealing with this health diagnosis. But also, we can just get back up. We're not in debt. We're not moving backwards.

It's just a pause. And there's no way life is going to continue to throw thing after thing. So it's easy to think in your mind, John, when things like this happen, life is always going to be this way. There's always going to be another thing holding us back. Why even try? Let's just go into debt and just live our life. But you got to get back up. Yeah. It reminds me of the other day when we were in the dressing room, we had some photo shoot stuff and I just happened to see George across your lower back your tattoo of one of your favorite bands Chumbawamba and

that was a private moment John it was but as you're always walking around bestowing upon us great Chumbawamba lyrics you get knocked down and you get back up again you're never going to bring me down

never yeah wow who knew the inspiration would come from John Deloney and chumbo womba today it's your tattoo i don't actually have that tattoo it was a temporary tat it's it it's it was absolutely not it was actually inside of a large aztec sun the whole thing is a little bit uncomfortable but it's cool hey but jen um listen our hearts are with you this

like i i don't want to make light of this. Y'all are in it. Y'all are in it. Y'all are in it. Cancer, house stuff, government stuff. I just want you to back up two or three steps and be so proud of yourselves. This is why we do this show. Because life is coming at you. The world's coming at you.

Punches are thrown. Kicks are thrown. And most people have to fold up because they haven't done the hard work. So grieve this, be sad about it, be really pissed off about it. All that's good. All that's right. All that's normal. And then get back up on the path and go again. Because really what's the other option, right? What's the other option, but to get back up and get going again. Because really, what's the other option, right? What's the other option but to get back up and get going again? Good word. Thanks for the question, Jen. All right, let's take a quick one here from Katie in Pittsburgh. Katie, what's going on? Hi, George. Hi, John. Thanks for taking my call. Sure. How can we help? So I have a question around the intensity I should be bringing into baby step six. And would just like your advice

on how to balance investing outside of retirement and paying off my home early. So some quick background on my situation. I bought my house in 2020 before following the baby steps on a 30-year fixed rate. I just paid off over $120,000 in student loan debt earlier this year. Way to go, Sari. That's amazing. Thank you. I have my emergency fund fully funded and I started back up my investment in my Roth K. So I'm planning now to adjust my mortgage payment so the amount would allow me to pay off in 12 years. So now it would be a 15-year mortgage. I still have a little bit left after my expenses.

And I'm just wondering, should I be paying more towards my mortgage? Should I be setting that aside to invest in mutual funds eventually? What would you do in my situation? I'll tell you what I would do and I'll tell you what I did. I would keep investing 15% into that Roth 401k

and any money beyond that, I would start throwing at the house. I would keep investing 15% into that Roth 401k and any money beyond that, I would start throwing at the house. I would not put extra money on top of that into mutual funds outside of retirement until you pay it off. Because your next focus is getting a paid for house so that you have freed up your greatest wealth building tool, your income.

And then you're at baby step seven, where you build wealth and you give outrageously. And if you want to invest 25%, 30%, 40%, you can do that. But you seem young. How old are you? I'm 32. Okay. You got plenty of time. What do you do for a living? I work for an insurance company. So you had a good year last year?

I did. Yes. Are you planning on income? Yeah. What do you make I make $130,000 a year amazing is that salary or commission

salary what opportunities do you have to increase that over the next couple of years have you maxed yourself out or are you just getting started I actually I think I should be expecting additional

salary increase later this year. And then I'm already bonus eligible for next year. I knew it. You know how I knew it? Because you paid off 120 something thousand bucks in a year and you're a gangster like that. All of that new money, pay off your house. I want you to take that 12-year plan and pull it down to six. Pull it down to seven. Get rid of that stupid thing and then you're going to be free. It's going to be awesome. That's a great plan.

I love focusing on one thing at a time and that mortgage is in your sights. Nothing can stop you and Katie's going to get there way faster than she even thinks. That puts this hour of the Ramsey Show in the books. My thanks to my co-host, Dr. John Maloney, all the folks in the booth, and you, America. Thanks for listening. We'll be back real soon. Hey, it's Dr. John Maloney. If you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramsesolutions.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 RamseySolutions.com and click Get Started.