The Ramsey Show - App - Inflation Is Real but It’s Not the End of the World (Hour 2)

Episode Date: March 10, 2022

Dave Ramsey & Rachel Cruze discuss: Inflation: how to think about it, how to stay calm, how to budget; The student loan crisis, How a 17-year-old can set themself up for success with money. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

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🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is done, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America.

Rachel Cruz, Ramsey Personality, is my co-host today, along with Christina Ellis, Ramsey personality. So we've got Ramsey personalities everywhere in here. I'm outnumbered by the ladies right now. I was about to say it's a ladies segment, but it's not. It is Women's Month or something, right? It was International Women's Day. Yesterday.

Okay. Well, I knew it was something like that. It's like Women's Month. Women's Month. Well, I'm sure it was something. I saw... Or was it Monday? I think it was something like that it's like women's month well it's just i'm sure it was something i saw or was it monday i think it was monday i'm behind too i don't know i've just always lived my life that every day was that's right that's right preach it and then i know i'm good okay that's right i know i'm covered that way so christina ellis ramsey personality is new on board in the last year, and we've been introducing her to you guys.

She has a number one or a best. It was a number one bestselling book, right? Bestselling book. A bestselling book. Okay. I didn't know if it was number one or not. Where she went and maybe we'll push it back up there. But anyway, she went and at her mom's suggestion, gathered up $500,000 in scholarships

and went and not only got her undergrad, but got her master's degree from Vanderbilt, and all completely free. And so we thought she'd have something to say about the student loan crisis and brought her on to be part of the team and talk about this. And student loans are popping out there right now. The payments uh everybody they keep kicking the can down the road but now it's may 1 they're going to start back and word is i just saw a survey that said 93 of the students are not our former students are not

ready to start their student loan payments back yeah we've seen some crazy stats out there there's so much anxiety around this topic right now. And I've actually heard there's a study by Ramsey here that six in 10 people have not been making any payments at all. So this has been such a great opportunity for people to make payments and get ahead. But a lot of people have just, for whatever reason, not been making payments. So this pressure and this weight is coming down on them right now. Another study said that 27% of people don't even think they can pay it at all, that they can ever do it again, which is just crazy.

Well, it's crazy too because I'm like, you can get in this habit, and people have, obviously, of just not paying, right? Versus hearing the people that are putting money towards their student loan and getting their principal way down in the moment, right, where you're not having to pay, but they are, and catching up. So whether May 1st comes true or even if they kick the can down further, still attacking your student loan during this time, it's the smartest thing to do.

Absolutely. Yeah, it's definitely a time to attack it, and I think it's great. We've seen a lot of people who have taken advantage of it, and that's just awesome because you're seeing people who've paid off their balances or they're making significant progress. But if you're in that group of people who haven't been paying, let this be your wake up call. This is still time. You know, there's still time where the interest isn't accruing, where it's not adding up. So take advantage of the time you do have. And if they do kick the can down the road even further,

then you'll get more time to make payments without interest. I would not count on that, though. What you need to count on is make payments without interest. I would not count on that, though. What you need to count on is what you can control, and that's you. And get your butt in gear and start attacking this thing. It's time to get real serious about your budget. It's time to get real serious about what you need to sell. It's time to get real serious about an extra job. It's time to get real serious about not eating out and get your stinking student loans knocked out, man.

Sally Mae is an ugly woman, and she will not leave until she's evicted. I mean, you have to kick her to the street. And she's not going to leave. She's not going to voluntarily move out. You're going to have to kick her out. And I think that's part of the problem, too, though, is I feel like I hear people that will say, yeah, I'm not paying my student loans because the government's going to forgive them. You know, like there's still this mindset that it's just going to disappear and go away.

And I'm like, man, sitting on that defense versus the offense and being like, no, I'm going to be proactive and actually do something about this versus waiting. So it's wild. But you see it all the time. I feel like you're in this so much. Right. And that's why one of the things I I wanna talk about today are some of the strategies that people are going to hear about

that's really bad advice, things that people should avoid. So one of the things that's going to be a temptation for many people is forbearance. It's the chance to pause your payments or lower the payments, and it sounds really great at first. You know, I don't have to deal with it right now. That 27% of people who, you know, they don't think that they can pay their loans,

they might think, you know what, let's do forbearance. But that's just, again, kicking the can down the road. But this time, your interest, it will be accruing. So when you get to the end of that time, it's going to be an even higher lot. Bad news. Yeah. And the other one, any time you do something that feels good now, it's going to be bad later forbearance is one the income repayment plan where you take the lowest possible payment because you have a low income and what

that means is you're not paying it enough and it's building up on you it's going to catch up on you right right i was on a ramsey plus coaching call a group coaching call the other day and there was the saddest story there was a 70 year old woman the call, and she took out her loans in 1999. Oh, God. Took out $80,000 in student loans. She had a series of unfortunate events happen. Her husband passed away. She got hit by a tornado.

Her house did. Her house burned down. All these different things, but she signed up for an income-based repayment program, and now her student loans are $144,000. She's paid $79,000 towards those loans. But because the interest just kept accruing, it just signed up. She didn't go with the interest.

It's gone backward. Okay, that's so interesting. I just saw an article today. We were in a content meeting talking about an episode of doing this kind of stuff on the Rachel Cruze Show. And there was an article that came out, and it was like, I took out $30,000 and now it's

over $93,000. How is this happening? And that's what makes me so angry about the whole process too, is I'm like, at 18, no one's explaining to these students, hey, this is what interest is. This is what happens when it grows because it can feel defeating of like i'm paying on my principal but because the interest is stacking up against me and i can't get ahead you know it's this it feels so overwhelming so overwhelming and lastly we don't need to worry about it because the government's going to forgive it right it's not a

concern they're going to come save us how do you feel about that, Dave? Anytime someone says I'm from the government and I'm here to help, that's the scariest words in the English language. Isn't that Ronald Reagan? Oh, yes, it was. I know my quotes. What's crazy with student loans, I actually saw a statistic the other day that, you know, high school students, they're 18-year-olds. They have this financial aid package come in. And at the bottom of this package is the total number. In this financial aid package, it has grants and scholarships, but they also lay student loans in there. And the statistics said, you know, a huge percentage of students, they don't even realize that that money's not free. They don't

realize that they're signing for a student loan. They think that what they have in that package is just money that some adult gave to them that they're not going to be responsible for, which is absolutely crazy. We have to do better. And that's why I'm so excited with the Borrowed Future, what we've done with that, because it highlights that toxic industry. It highlights these people out here who are taking advantage of students. Absolutely. The Borrowed Future documentary, you can see it at Google Play. You can see it on Apple Play, you can see it on Apple TV, you can see it on Amazon Prime.

Hundreds of thousands have viewed it. If you have a college student coming up anywhere near in your future, you should show it to them. You should watch it. And the rest of you ought to watch it anyway, just so you get pissed off and tell Congress to quit doing this. Because they're messing over the American public with the student loan program. Christina Ellis,

Ramsey Personality, thanks for hanging out with us. Thanks for having me. This is The Ramsey Show. you've got a lot on your plate a job your home your marriage and your growing family while you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you.

Christian Healthcare Ministries is a Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Half of all Americans over 65 will need long-term care, and the average cost of that care is $138,000. You've got to plan your long-term care needs right now. I talk to people all the time whose plan is to let Medicaid pay for it. I got news for you. Medicaid won't pay for everything. Medicaid isn't as welfare. It's based on the fact that you're poor is the only way you get government-funded nursing homes. That's why we recommend long-term care insurance for someone

who's age 60 and over. It helps pay for the nursing home care, assisted living, long-term care insurance for someone who's age 60 and over. It helps pay for the nursing home care, assisted living, in-home care, cost like medical equipment, getting dressed, eating, home modifications, so you can get around safely in your home. It does all of that. Long-term care insurance protects your family too. Your spouse, your kids won't have to bear the financial or emotional burden of taking care of you. Our endorsed local provider network will help you understand your long-term care insurance

options and find the right policy for you. Find an ELP for long-term care. Have them sit down and start talking to you if you're 60 or if your parents are. And you need to make sure a nursing home is taken care of. RamseySolutions.com slash long-term care. Be sure you check it out. Sterling is in Raleigh, North Carolina. Hi, Sterling.

Welcome to the Ramsey Show. Hey, thank you for taking my call. Sure. What's up? Hey, so I am 17. I have a $1,000 car. I have $5,000 in a Roth IRA, and I'm putting $500 in a month right now. I make about $1,500 a month, and I'm still

doing full-time high school. I've got free college, and I've been through Financial Peace University, and I'm trying to figure out what I need to do with my money, and if I need to open an index fund, or how I should be setting aside money for a house. I think you should run for president oh my gosh young man you're on you're on fire what are you doing to make all this money uh so i started out as a painter when i was 15 my dad helped me get the job and then right now i'm working as a hvac cleaner so i help a guy clean air ducts and uh dryer vents Nice. My husband did that at their college, Sterling. Yeah. Yeah.

That's hard work. It's nasty work, too. But you're not afraid of hard work. Get her done, man. I'm proud of you. Very well done. So you're heading off to school. Is that the plan?

What's the plan when you graduate? Yes, sir. So I'm a junior right now. I'm planning on dual enrolling some this next year um and hopefully i'll get some college hours in and then once i graduate high school i'm planning on hopefully i'm thinking about majoring in business and then maybe going to trade school at some point after that yeah i think that's my plan so far i think you got a great plan very cool very cool so your question is what to do with all this money?

Yes, sir. Should I be saving it up for a house? Should I be putting this in an index fund? Because I'm already maxing out my Roth IRA. How's college paid for? So my dad actually works at a college right now, so I get a free tuition, and he's got like half the books I need.

Okay. All right. I would not try to get too fancy i'm just going to park it as an insurance policy to make sure that if something goes sideways on the free part of the college you can still finish um and yes so the worst case scenario is you have i don't know 30 or 40 or 50 000 when you graduate oh darn um and then you just have to figure out buying a house at that point but if you've got that in a good mutual fund, just do something like an index fund, I think that would be just fine. But the big deal here is sometimes some of our plans get derailed,

and I always want – it's more important for you, especially Sharp and as much of an ambition and as much of a go-getter as you are, to complete school and to complete it debt-free. That is more valuable than any amount of money you will ever make on a mutual fund in terms of the actual math. In other words, you will be more valuable by many times more than this money will make in a mutual fund. So the investment is my secondary concern. My primary concern is you and making sure that if something blew up over there with your dad or whatever,

then you can still finish school. And if it doesn't, if the plan goes exactly as you got it laid out, you're still going to have a pile of money to get into your first job and your first house and that kind of thing. Yeah, because I love, obviously, the motivation of investing and all that, Sterling. You're doing it, right? The earlier the better, but also kind of with the caveat that between 17 and 22 years old, there's a lot of transition. There's a lot of change. You have no clue kind of what life is going to bring you. And so you're not going to not become wealthy if you start really kind of hardcore investing at 22 versus 17, if that makes sense.

So having that cash available, like you're saying, Dave, I think is so smart. Because again, whether you go to college and then you're like, okay, I want to move to a different state. I'm going to need cash to be able to move. Who knows? Maybe you meet a girl and you're like, I want to propose and you're going to get a ring. There's just so much transition that can happen in that time. And so giving yourself the ability

to have margin with cash to be able to kind of move and go at the pace you want is worth it. And then once you kind of settle down after college and figure out where you're going to live, your first job and all of that, then go hardcore into the investing

because that's where you're going to be, which is freaking amazing that you're going to be on baby steps four, five and six. I'm not sure who parents, who Sterling's dad mom are but i think they are they get the award okay yes but i wanted to ask him too there is something though that there is something in certain people that they just have this drive and i see that in my kids like you have kind of that you know you have kids that they just have this natural motivation their natural wiring is they love i don't think anybody naturally cleans their ducks

to go and work though i know that work it's in him i don't think his parents are making him do that is what i'm saying like there's something in sterling and in and in people and it's like they just have that drive so i'm just just applauding him. He's doing an amazing thing. He's a stud. I'm not taking anything away from him. And your parents, for sure, have done an incredible job teaching you and showing you. So it's all of it, which is awesome. Great job, Sterling.

You don't accident. And have fun, too, Sterling. Have fun. You're 17. You're good. You're going to be good. Have fun. Chelsea's with us in Phoenix. Hey, Chelsea, how are you? Hi, I'm good. You're going to be good. Have fun. Chelsea's with us in Phoenix. Hey, Chelsea, how are you? Hi, I'm good. Thanks for taking my call.

Sure. What's up? So I have about $56,000 that's been in my bank account. I have no debt. I guess I'm on baby step number six. And I owe about $59,000 still on my house. And I'm just wanting to know if I should take like a portion of my savings and put it towards my house or I don't really know how much I should really keep for like my emergency fund. Yeah, that's a great question. So with Baby Step

3, where we're at, is three to six months worth of expenses. And so making sure you have expenses, you know, that set aside. Are you, Chelsea, kids, single? Kind of where are you at? Yeah, I'm married and I have two kids, seven and three. Okay, okay. So yeah, you and your husband can decide, do we want to lean more toward the three-month emergency fund

or the six-month, but having that cash set aside. And then ask yourselves, like, do you guys, is there a car that needs to be replaced for any reason? Are you guys doing any remodel? Like, is there anything in life that's going on? Because when you're on baby steps four, five, and six, you know, this is the time we always say you can kind of take your foot off the accelerator some.

And so if there is stuff to do, you're able to. But also, though, Chelsea, like, gosh, after that emergency fund is funded and throwing a chunk at the house, it's so nice because you guys just have the mat you have the money you have the cash there what's your household income uh it's about 165 total okay so what do you think three to six months of expenses is I don't know probably I don't know maybe like 30 okay let's call it let's call it 30 and throw 26 at the house and pay the house off this year. Okay. Because you make enough to pay the house you make enough to cash flow the rest of it. You don't owe but you said 50 something right 59. 59 yeah. So if we

throw 26 at it we got 31 left right? Yeah. 31 out of 165 in 12 months is very doable. Yeah. Okay. Then now we're at baby step seven when you do that, and now you're in a position to become everyday millionaires in no time. You're going to be rocking it, rocking it. You guys have done a great job. So where you are now, we move from baby steps one, two, and three is intense,

gazelle intensity. Four, five, and three is intense, gazelle intensity. Four, five, and six is retirement, kids' college, paying off the house. That's intentionality. And so that's what Rachel's saying. If you need to pull some money to do something else, this is the time you would do it. But if you don't have a need for a remodel, a new couch, or a new car, then throw that 26 at the house, and let's get this house done this year. We'll be right back. Rachel Cruz Ramsey personality is my co-host today open phones at 888-825-5225 Bill is in Cincinnati hi Bill how are you I'm doing good Dave how are you doing better than

I deserve what's up well I've taken your class back when my wife and I did it. It was 13 weeks and not the nine like it currently is. And I was talking to the pastors at my church. And last night after Wednesday night service, I talked to the main pastor. I said, hey, what's up with the request for doing FPU? He says, oh, yeah, we talked about that. Go ahead and do it. So my one perfect question is right now, when we did this, we didn't have this current inflationary pressure that we're currently seeing when you have no idea what gas prices are going to be from day to day and everything else like energy and food and whatnot.

And for somebody starting out that's on the paycheck-to-paycheck mode like I was when I started, how would you address that? How would you deal with that question? Because that's on the paycheck to paycheck mode like i was when i started how would you address that how would you deal with that question because that's legit well in a given month for your budget you're not going to see food jump that much over the course of six months you might and so you know if you come up short because you suddenly saw the cost of bread go up or whatever, you've got it next month, you'll adjust. And, of course, any time, as you know, someone is doing their budget the first time, they always guess low on food anyway. So we say whatever you think is on food, you should add some to it because you're wrong. And if you're worried about inflation, add some more to it. So your budget for your grocery budget budget it is going to be higher though

it's it's higher 16 to 20 percent like when i checked out not in one month it is now compared to what it was like six i know that's what i'm saying six months ago yes but in a given month and you're starting your budget at the beginning of the month for 30 days you're not going to see dramatic move you'll see some but not dramatic and if you do see some you will see you'll you'll jump it again the next month but but a month at a time you're not gonna have to now gas on the other hand might double i mean we're in a situation where we could see that and so energy is not going to double in one month. You're not going to see your electric bill be substantially different in 30 days. Now, you might in 30 months, but in 30 days you're not.

And you're doing a budget 30 days at a time. And so, you know, really the only one that could be out of control is car gasoline. And so just whatever you think it's going to be, give yourself an extra pad and put some more in there. If you think you're going to spend $100 and put some more in there if you think it you think you're going to spend 100 put 150 in there and bill i would say i don't know if you had this experience but for people that have not really started this at all and they haven't been budgeting they you know they're kind of just living that paycheck to paycheck lifestyle when they sit down and actually do a budget number one we always say it i'm sure you felt this you're like okay you kind of feel like you got a raise because you actually know where your money's going and it's just going

to make them. I just know for me, grocery shopping, I have felt it. I'm like, I went to Costco and it was like, oh my gosh, my Publix bill. It's just more. It's crazy what you're checking out at the grocery store for versus what you were doing six months ago. Exactly. But you have to be able to say, okay, what am I going to choose? Where am I going to choose to shop?

What am I buying when I'm there? You have to be even that much more selective but it is possible to do it still on a budget um but they just have to be even that much more intentional versus if they were doing this two years ago because it is it's just things are more expensive let me tell you what the the a bigger enemy of their budget is than the actual inflation it's using the fear or the irrational response to inflation as an excuse to not do a budget or can't do one because i just don't know you know no you don't know what the gas is going to be you just can't do it you can't do it and that irrational fear and that hyperbole drama reaction is a bigger enemy to the budget than the actual inflation is

because it's going to cause people it's going to cause it's going to cause people to look for an excuse to not do this so you it instead it's the other way around it gives you that much more reason to do the budget and really the only thing in a given 30-day period that's going to be that could move with some drama is car gasoline and that's not going to happen for the rest of their lives. That may be for the next 60 days. I don't know what. I mean, it's been wild for the last two weeks, but Biden turning on and off the Keystone, on and off the Russians.

He can't make up his mind what he's doing, and until he gets his supply-demand stuff, we're going to see some variation in the gas prices. It's all over the place and so um you know uh but again but i think the truth is what are you spending on car gas and when it goes up 20 percent or 40 yeah it's close to 50 or 50 percent okay so you spend 100 instead it's 150 this doesn't and you make and you make seventy thousand dollars a year this does not make you broke i know but it feels the pain though i know you feel it and i know it's real i'm not i'm not diminishing the that it's real but i'm saying it's not an excuse to not do a plan totally i'm with you on that you can't do yes you can't use it as an excuse to say i'm not gonna do it you just go

okay i'm gonna budget high because this crap's out of control and it hurts. Yeah. So, Bill, on a very tactical level, if you were walking someone through a budget for the first time, looking back their last three months and adding up, what have I spent on gas? What have I spent on groceries on an average of the past three months? And know that naturally you're going to actually spend not necessarily on gas, but you could spend less at the grocery because you're actually on a budget you're on a plan you're not just going and buying whatever you want you actually know i have this amount saved and you could say hey you're gonna know it's about a 20 increase on food on groceries about 50 on gas so from the tactical math side they can do that to kind of start that first month's budget and then adjust

from there exactly exactly so it is crazy though but can we talk about i am not denying no i know i know you're not but just like man like the world it it's one of those it feels like that same angst when you watch the news and everything like at the beginning of covid right it's just like this god if everything just feels uncertain and then like i don't know the housing market i don't know all of it it's just kind of a crazy world do you wake up and you're like god march of 2022 it's just it's nuts no you don't i just feel like i mean it's crazy to look at what's going on i'm not trying to be dramatic about it but it's just the geopolitical thing is crazy and uh you know all the stuff going on and but the gasoline um you know, we had $5 gas under Obama, you know.

And there wasn't anybody flopping in the street, foaming in the mouth then, you know. And we got $5 gas right now, or $6 gas, depending on where you live. Seven, California. I saw that. And so, and that, it's not good i mean i'm not i'm not i'm not defending it and it shouldn't be it is not real inflation it's it's policy out of washington dc that screwed it up that this is a this is a economic hurt on the public that is caused by washington by the decisions they've made there's's no question about it. Some of the other inflationary things are not caused by.

And you can't blame Biden for every ill out there. He didn't cause it. Some of this stuff is caused by supply chain and supply demand and the upheaval of the economy by quarantining all of the workers and deciding that some people whose job wasn't essential and some people's was. And so you screw up the labor market you screw up the lumber market you screw up the steel market you screw up the chip market and you screw up manufacturing you screw up the car market it's on its head no but i never seen a car market like this in my life it's bizarre none of that was caused by washington that was all caused by the pandemic and that will all smooth out eventually but it's because you did nothing and then you did triple what you used to do and then you did and and no one was producing nothing yeah while you were doing nothing and then when you did triple you used up all the supply and so you got this you swerved the car you turned

the car over my coffee well you turned the car so hard you flipped it you know that's what the economy did when's it going to be over? What's your crystal ball say? Oh, 24 months. Two years? 24 months. Two years? For all the supply chain stuff to smooth out, it's going to take that long.

18 to 24 months. It's already smoothed out a lot on lumber prices are back down, you know, as an example. I didn't know that. I didn't know my lumber pricing before I came in here. So you're starting to see, I mean, you know, we don't i didn't know you know so there's you're starting to see i mean stuff you know we don't have any shortage on the shelves you know the stuff hitting the shelves and that kind of stuff so that's all that's all the pandemic thing that's the tsunami after the earthquake at sea yep and that's what that was but this this oil thing it's just

politics that's just morons in washington is all that. And so you won't be mad at somebody about the gas thing. Yeah, you can point that at Washington. The rest of it, it's not his fault. You can't blame him for that. I don't care. This is The Ramsey Show. We'll be right back. Rachel Cruz, Ramsey personality, is my co-host today. Open phones at 888-825-5225. So Rachel and I are talking off air during the break.

Here's the thing. When a pandemic hits, when $6 gas hits, when a loaf of bread goes up, when there's 73 people trying to buy one house and they run the price up. When it's weird out there, when you walk through the grocery store and there's not crap on the shelves. Okay. You have a different physical reaction to those things. You have a different emotional and spiritual reaction to these things a lot less drama to these things when you are the third pig

you remember the third pig he's the one that had a brick house and when the big bad wolf came his pulse rate did not change he looked out the window and said oh there's a wolf when the big bad wolf came to the other houses he huffed and he puffed and he blew their freaking house down and their lives were coming to an end right so when you have an emergency fund of three to six months of expenses when you are living on a budget when you have worked your butt off and gotten yourself out of debt and all this crap comes at you your pulse rate doesn't change you go go, dadgum, that's awful. It's inconvenient. They don't have cream cheese at Publix.

Dadgum. You know? It's just a thing, right? Can I be a fourth pig? The fourth pig. Can I be the fourth pig? I don't know. What is the fourth pig? The fourth pig.

Is the fourth pig, is that the stepchild? I might be the stepchild after this segment. We'll see what happens. You might get thrown out of the family. I might be the stepchild after this segment. We'll see what happens. You might get thrown out of the family. I might get thrown out. The fourth pig is you do it all, right? Thank God for parents that teach you young. You do it.

You're living on a budget since 21. You save up your emergency fund. You're funding your 401k. You're doing it, okay? So you got the brick house. But the dadgum wolf, he's real and when you when that pig goes to the grocery store it's like dang it Publix it's so it is though so you so the fourth pig was a drama student maybe so the fourth pig can have the brick house but the fourth pig also

feels it when you fill up your tank and you're like no why is it so expensive or costco i check out and it's feels like it's double i didn't say you didn't feel it but it doesn't have to have the level of drama that you're bringing to it i know but god sucks though i didn't say it didn't suck and let me just tell you let me tell you when it sucks more when you're not the third pig i've been there i mean it's like when you're broke everything that that can go wrong will, and then they throw some of this crap on top of it. Totally. Absolutely.

And your life looks like a country song that Biden wrote. I mean, it's awful. You know what I mean? It's horrible. It creates a huge, but the level of stress that you have, the level of anxiety that you have around inflationary matters changes dramatically or should totally if you have your crap together because you've been following this stuff this is the stuff that we the stuff that we teach is the only principles in finance that work in prosperous times and in hard times

yes but also so i would say the fourth pig lives too like when covet hit right everything ever i know i'm the fourth pig i don't know i'm hit, right? Everything, I know I'm the fourth pig. I don't know. I'm making it up as we go. I know. I can tell. But it's the same feeling as with COVID that the people that were debt free had an emergency fund, all of that. Their level of fear was way less.

Yes, that's my point. All that. But there was still a level of, God, like. Yeah, I had that level. Yeah, I mean, I get it. So that's what I was just trying to acknowledge, that even though financially the dollars and cents, you can still pay for the gas and like adjust your budget and you're fine you can pay for it you know the dupes cut the stupid pump off at 125 dollars i can't even fill up the

truck you know i gotta i gotta go i gotta do it twice to fill it up that's why you need to go green i know but plug up oh good lord you don't have to do it oh good lord oh this is going downhill fast but um so i can't fill up my truck the point is though that when you are prepared and you have done the things that we teach this stuff does not have as much of an effect on you unless you choose drama but the drama and the anxiety when you're broke is very real yes i remember i remember that it's uh you know like deloney says your body remembers it you know and and so yeah i i uh when the difference in uh four dollar gas and six dollar gas is is a huge percentage of your world because you haven't done these things yet um or you've never chosen to do these things these things being getting out of debt saving

money living on a budget living on less than you make so that you can build wealth so that you've got some buffer between you and all this crap that's out there that's the third pig and it is a real thing that um you know it doesn't mean you're you're looking down on the little people it doesn't mean that at all it just means that you're the third pig and the the wolf is out there and he's huffing and puffing but you're not going to die you know and so the anxiety if you're if you have reasonable mental health should be lower you should not be at the same drama level and and so that's a real thing and and so and that's the one of the benefits and that doesn't and yeah and it's why you do this yeah that's're saying. And it's why you do this. Yeah, that's right. That's right.

It's why you do this. Because guess what? If your anxiety level due to inflationary issues or whatever it is, budgetary problems is lower, it affects your relationship when you go home at night with your kids and your spouse. You know, it affects how you do your job at work because you're not sitting and wringing your hands. And, you know, you can actually concentrate, get your job done.

Guess what? And then you get promotions. And so this whole thing leads to prosperity and away from the other. And so this should be yet one more time in your life if you're out there and have never decided I'm going to get out of debt. You've never really decided I'm going to get on a budget. I've never really decided I'm going to build some wealth and have an emergency fund. This is one more reminder to be the third pig because you do have less stress. Yes.

You should have less stress. Absolutely. It doesn't mean it's not there. It doesn't mean you don't know it's there. And I was even doesn't mean you're in denial that people are having a hard time somewhere else other than you. You're not a snob. That's not what i'm talking about i'm just saying the natural reaction should be it's inconvenient versus it's

world ending yes yes and even the simple thing i was talking to someone who's getting out of debt just being on a budget she was saying she was like even just that gives me a sense of control and peace because i know where to adjust and all of it and even though it's still tight and it's like oh it's frustrating it still gives you this level of control versus like you're saying just laying out and being like oh my gosh everything's just happening to me and i don't know what to do giving yourself the ability to control what you can control and that's this plan of getting an emergency fund in place living on a budget working your way out of debt so you don't owe anyone anything, building up an emergency fund, a fully funded one. Yeah, all of this, right, is to get to that point.

So I totally concur. I just want to say they were still out of cream cheese. So that's the only thing I was saying in the break is that there are still a few things that are bare on the shelves. I'm just saying it's not the end of the world. And it's less the end of the world. It's less drama and less stress when you're the third pig. Or unless you've graduated to the fourth pig, which is the third pig with drama, apparently. But whatever that is, I don't know exactly what that is right now.

We're going to rewrite the fable at this point. But we're going to have to have a Ramsey version of the fable. And Rachel's going to tell us how to do the fourth pick. But this is horrible. I don't know. You're just scared to death I'm not going to be empathetic of the people out there. Well, you know, all you said is that it didn't hurt month to month, the grocery bill. And I thought, I hurt my every dollar.

It hurt when I had to track that dang Costco transaction. I thought, dadgummit. It's just more. It just eats into it. My little line on my every dollar budget went way further than it did last month. And that means that less pizza for you. And that's a problem. Taquitos, double chico's, all of it.

We get the fourth pig when we have less pizza. That's where the fourth pig comes out. Pizza depravity. Being depraved of pizza. Depravity. Deprived of pizza. However you do it. Depravity.

It could be depravity, but it could be just depraved. Depraved. This is The Ramsey Show. Hey, it's Rachel Cruz, co-host on The Ramsey Show.