The Ramsey Show - App - Is “Cash Stuffing” the New Envelope System?

Episode Date: April 22, 2022

Rachel Cruze & Kristina Ellis discuss: Converting a 401(k) to a Roth, How to pay for a college degree? Gen-Z's obsession with #cashstuffing, Buying a condo to rent out now and live in after retirement. 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

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I am Ramsey Personality, Rachel Cruz, hosting this hour along with, I guess, our newest Ramsey personality, Christina Ellis.

Yay! So happy to be here. It's like the two women. We're taking over, y'all, for the hour, and it's so great. We even thought it'd be fun to have some men on hold, so we will definitely take calls if you are a man, but it would be fun to do one segment of just women. So, ladies, give us a call, and we will chat about life and money, but also America. It's a free call to anyone out there at 888-825-5225. So we'll talk about your money. We can talk about your career, your life, your

relationships, anything and everything. So give us a call. All right. First up, we have Matt from Huntsville. Hey, Matt. Welcome to the show. Hi. Thank you. Absolutely. How can we help? I'm one of the wave of resumes recently. I'm coming back to the workforce after 11 months. Okay. Yeah. Yeah. It was nice to take a little breather there. That's fair. But now that I'm back, one of the things I'm doing is electing my investments.

And my company matches, and I get to choose whether it's a traditional 401 or a Roth 401. And I'm wondering if one makes sense over the other, or should it be a blend? No, we always will gear towards the Roth because it will grow tax-free. You'll use after-tax dollars to invest in. So that's kind of the only kicker, but it's so worth it because you would rather pay with that money, even though you've paid taxes on it, your take-home pay basically into that Roth. And so that way it grows for the rest of the time, completely tax-free.

What do you do for a living, Matt? I'm an engineer. An engineer. Okay, that's awesome. So great. Do you have anything saved in any other retirement or is this kind of the first one you're tapping into? No, I've got some others.

It's lately I've been holding it in cash and it's kind of embarrassing to say right now, but it's just the truth. I had pulled out of the market at one point. And so, yeah, but the thing that I was wondering about is when it comes to tax rates, when I am retired, would I not be, I mean, I imagine I'm going to have a lower income. So I didn't know if that would put me in a lower bracket. And that's kind of the reason for that question that I had. Yeah, you could. But I think the amount of time, how old are you? 55.

55. Okay. Yeah. Well, I mean, the growth over that amount of time, because even if you, because I guess in an ideal world too, if you're not taking it all completely out, some of that is still going to be growing. So the growth and the compounding interest will be going, you know, hopefully for a while. So no, I would still always choose that Roth. Again, it's kind of that tax-sheltered plan, and it is going to help over the long term. And so that's what I would. But I also, Matt, I would sit down with a smart investor pro. You can find those at ramseysolutions.com, but interview two, three of them. But I would. I would sit down with an investment professional, because I know you mentioned you got out of the market and probably out of maybe some fear. I don't know why, but I think it is wise to say, hey, at your age, what can I be doing to be

making more money? That's smart and wise, nothing too risky or crazy, but at least gives you enough for enough padding. So I think that that's probably the best bet, Matt. So thanks for calling. And that's great that his company offers that because a lot don't. And that was one of the things I was most excited about coming here to Ramsey is that we have the Roth 401k. It's got so many benefits long term. So if your company has that, that is definitely something awesome to look into. Absolutely. And then even when you look at, you know, just IRAs, the Roth IRA is even the better way to go than the traditional IRAs. So again, that Roth protects all of the growth and it'll be tax free, which is just

wonderful. All right. Up next is Jeff from Aspen. Hey, Jeff, I have so many dumb and dumber jokes in my head, but I'm not going to say them. Hey, guys, how's it going? Good. How are you? Good. Thanks. Hey, I've got a lot of details. I'll try and sum it all up quickly. My fiance and I are getting married here in about a month and a half. Congratulations. And are just doing a lot of future planning. Thank you. And she is finishing up her bachelor's degree next month and is doing her master's at the same time. So she'll be a year in on her master's upon graduating with her bachelor's. She's moving here to Aston with me, and we're trying to figure out how to continue her master's while also battling our $100,000 in student loan debt. I've got three potential routes,

one of which is for her to stay here. And if she gets a job with the city, the city can potentially help pay for it like $5,000 a year. The other option, if she gets a job with the city, the city can potentially help pay for it like $5,000 a year. The other option, if she doesn't work for the city, is for us to just postpone master's and try and knock out debt as fast as possible. And the third option is there's a program through a church that's connected with the school that she went to for her undergrad that will pay for her master's, but we have to move to Nebraska and potentially live with hosts and I'd have to change jobs, that kind of thing. So none of them are anything we're leaning towards. It's just a matter of which one do we take?

Yes. Whatever the wisest. Do you guys have the money right now for her to go complete her master's or will you guys be taking on more debt for that? Well, we're not planning on taking out loans. So if anything, we'd be cash flowing it. Her grandparents have offered to pay for about $9,000 towards that school. So that's helpful, but that's only a portion of it. And then she's a year in right now. And how much is the total? Well, after you guys get married,

what all will you guys have to pay for her master's? What amount? I'm thinking it's somewhere in the $20,000 to $25,000 range. Okay. I think it's like $5,000 a semester. Okay. And how much will you guys be making a year? I make $53,000 right now. And her moving here, it could be anywhere between $40,000 and $55,000 probably, something like that. We'll be close to $100,000, I anticipate.

Close to $100 I anticipate. Close to 100, okay. So Christina, you're the master at this because she got her master's completely paid for with scholarships and grants, which is amazing. Yeah, I love that you've already explored so many options. Like the fact that you called in and had boom, boom, boom, three different options that you've already explored. I just love that because a lot of people,

they get really focused on one route or they think the only way is student loans and they just don't explore options. But when you really start digging in and looking deep, there are so many different options available. So I want y'all to go the next step, the next level and start looking at more options. So scholarships, I won over a half a million dollars

in scholarships and was able to get my bachelor's and master's debt free. It takes some digging, but they are out there. There's fellowships for master's programs. So see what's available there. Some schools are even tuition free. So I don't know exactly what program she wants, but if you keep exploring, you might be able to find one that's either tuition free or a much reduced cost. Even if she goes online, maybe that's an option. Maybe she can even work for a college. Maybe if she works for a local university, she can get a decent percent off. So just keep leaning into that exploration of options. You're already doing it, but take it a step further because there's a lot of choices out there.

Yes, that's such good advice because you guys are going to be making, I mean, you're making six figures if all your math, if all, you know, what you said was correct and you guys have a hundred thousand in debt. So I'm like, she could go to school, possibly even completely paid for, whether it's through scholarships or grants or a combination of some online, if there's an option there that's less expensive, or working for the university. I mean, everything that Christina just laid out. I'm like, if you can bundle a bunch of that stuff together

and get her master's where you're not paying completely just out of pocket, then you guys can be attacking the student loans as well to get that paid off. But again, do not do the master's if you're going to be taking debt on at all. No, no, no. And get it as down as possible by these other options so that you can work on paying off the undergrad. 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 Healthcare 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. Christian Healthcare Ministries is a Ramsey Trusted Provider. Well, one of the main reasons Christina joined our personality team, I want to say the main, I guess the main is that we love you. The second reason would be because your story is incredible about getting half a million dollars to go to school debt-free. You even went to Vanderbilt University, which is so expensive. And you just are a living testimony and have such a passion

for this subject because it is such a huge one. And that's one of your passions, one thing that you love and that you're able to talk to so much here at Ramsey Solutions. Yeah, I'm so passionate about it. There are so many students who feel like student loans are the only way to go. I'm talking to so many of my friends who are drowning in student loan debt. And I just want people to see that there is another way. You do not have to take on debt to go to college. we are doing a college theme hour next week next thursday where you can ask your questions around saving for college paying for college scholarships and going to college debt free so go to ramsaysolutions.com slash ask and put college in the subject line i cannot wait to chat with everyone about this so it's a full hour just on college which is huge because there's there's so much news around it

whether it's forgiveness or forbearance or pausing loans. I mean, it's just crazy. So the idea to have a starting point of not even thinking about loans or taking on loans when you are in high school and that you get to launch forward into college without it is just huge. But you have to have a plan. So Christina is here to help. Yeah, let us help you figure out how to find that freedom. As you go to college, you can feel empowered and pay for it without debt. Yes.

Speaking of the young people, so the old Gen Z, I want to just stereotype them for a second. But there was a hashtag that gained over 360 million views on social media, specifically with TikTok. And the hashtag was called cash stuffing. So these young people have realized, oh my gosh, I can actually get real cash and put them in envelopes and label the envelopes what I'm going to spend the money on.

And then when I go to spend the money, I take the envelope with me and I take the cash out. And when there's no more cash in the envelope, I stop spending. And they are on to something, Christina. No way. This has never been done in the history of humanity but man i mean 360 million views on this topic and they're calling it cash stuffing so they're they're just they're coming up with new stuff all the time like y'all it reminds me of like fashion trends whenever it's like our generation is doing it right like for us it's high-waisted jeans but but for everyone else, it's mom jeans. That's it. That's it. 100%. 100%. So now they have found the solution of

using cash, which the Rachel Cruz wallet does the same thing too. Because here at Ramsey, we've been teaching this for like 30 some years. Because there is a power in it. There really is spending your money. So cash, 100%. You feel it. Your debit card, you do feel it to an extent because you know it's money coming right out of your account. But when you're using other forms of payment, whether it's loans, credit cards, all of it, there's just this level of you're just attached because it's not your money you're spending. So you're technically, and studies show you do spend more. So I'm joking about Gen Z, kind of making fun of them. But I love it, you guys.

I love the cash stuffing. I'm so glad this is becoming cool again. This is brilliant. Maybe we're like making like a full circle because there's other. We won't get into this this show. Maybe next week about the microchip. I mean, like there's some ends going crazy, but then they're coming back. They're coming back to the old school ways of cash.

And I love it. I love it. You know, as long as they get there. That's right. Even if it's got a new coat of paint, like they're getting there. That's great. Absolutely. Absolutely.

Well, Christina and I are taking your calls. So it's a free call anywhere in the country. 888-825-5225. So up next is Laura from Ontario. Hey, Laura. Welcome to the show. Hi. Hi. Welcome. Welcome. How can we help? Thank you. Okay. So I am newly married and we're both remarried and I have my house and he has his house. Well, they're ours because we're married, but I'm going to sell my house and I'm

really proud of my house. And I, I bought it by myself and to sell it as a bit sad. So I was thinking if I could take the money and use it to buy a condo, rent the condo out for 15 years until we're ready to retire or ready to downsize at the end there. And I know like the Ramsey idea is to basically just not put the money into another loan, but put the money into his house, his mortgage. But I'm just thinking since I'm so attached to my house, if I could then just transfer it into a condo. Okay. So there's a couple of things I just kind of want to ask you about because even some of your phrasing a little bit is still, you know, his mortgage, you know, it still is this. Well, just for simplicity's sake, because we, instead of saying like the

house at this address and the house at that address. Sure, sure. But are you both selling the homes and buying something new, or are you moving into his home, his current home? We're moving into his house. His house. Okay, okay. No, that's fair. I hear you.

I hear you. I know it's just kind of semantics. I just want to double, double check the way you're viewing it. So what about this first house are you so attached to? Because you said, I'm so proud of it, which, yes, you should be. I mean, that's amazing. But was there kind of a story behind it that makes it more sentimental? Yes, it's pretty sentimental, yes.

Yeah. Yeah. What's causing you guys to not move into that one? I'm just curious. And sell his. His house is a much better location. Okay. Okay.

It's on the water. It's closer to all the kids. Sure. Sure. Okay. And what's sentimental about your current house? Pardon me? What is sentimental?

What are those emotional ties that you still have to your current house? Pardon me? What is sentimental? What are those emotional ties that you still have to your current house? Well, like there's the pride that I bought it myself on my own and I raised my kids here. Yeah. Yes. I mean, that's hard. We moved out of the house that all three were born in two years ago. And it was, I mean, there's an emotional pull to a mom's heart that you're like, this was the place that our kids were raised. And then also to your point that you did this on your own, and there is a level to celebrate that.

And I think that that's incredible, Laura. But I would also say too that taking those things that you are so proud of and having that same level of dignity and honor, putting that forward into you and your husband's life and your marriage now and what it is really can take you far. I think there's a level of grieving of saying, man, I've moved past this stage of life and I'm in a different stage. But I think you can still honor yourself and be proud without feeling like you have to just go buy another condo to continue feeling that way. I think you can still get that feeling of dignity elsewhere. Yeah, I think that grieving process is so important. We're actually in a similar situation

where we actually close on our old house on Tuesday. And I'm going through the emotions of this is where we brought our babies home. We love this house. And like I had to take a full night and just have a good cry in the living room and grieve it. And I feel like going through that, we've been able to make a lot better financial decisions moving forward. So I don't know if you've done it yet, but I would encourage you to take that time to just grieve that house. Say goodbye. I feel like I'm channeling my inner John Deloney. But like take that time. just grieve that house say goodbye i feel like i'm channeling my inner john but like take that time but it's real yes so so on the tactical side though laura

i i would not just rush in and buy something else because i feel like that's going to be kind of a band-aid on getting a feeling that you need met where i really think you can get that level of dignity some in another way that's even financially wise. So do you guys have any consumer debt or is it just the house payment, the mortgage on his that he'll have? Just the mortgage. Just the mortgage. Okay. So how much would you get for the sale of your home, your current home? Well, because the market is so strange right now, I'm not sure. At the end of when the dust has settled, it'll be between one and 200,000. Okay. And how much does he owe on his? 300. 300. Okay. So I think what could be,

what I think would be cool, and I really would suggest this, is that you guys have a goal together that you guys want to have. And so I would, if I were you, Laura, I would put that money into the mortgage. I'd go ahead and just work on paying that off. But then you guys together have a goal and say, hey, as a married couple, now that we are one, what is something we want? Is it a condo that we want to invest in? And after our mortgage is paid off, we're going to go after that. What is something that we want to do as a couple together?

And there is a unity that is created in that for you guys that I think it could be so beautiful. But we both hear you and understand that it can be hard to let go of things, especially when you do it on your own and it feels so good. But I really would channel that towards your marriage. This is The Ramsey Show. Standing on the debt-free stage here at Ramsey Solutions Headquarters is Ted and Tabby. And you guys are standing there for a reason. So, welcome. Thank you.

Thank you so much. And you're here to do your debt-free screen. Yes. Oh, so exciting, you guys. Congratulations. Thank you. So, where are you guys from? Toledo, Ohio.

Yep. Okay. So great. And how where are you guys from? Toledo, Ohio. Yep. Okay. So great. And how much have you paid off? $59,000. Amazing. And what kind of debt was it? Rachel and Christina, we finished off.

The house got entrusted to us. Oh, my gosh. Your mortgage and everything. Everything. You're completely debt-free. Yes. Oh, my gosh. Look at this. Baby step seven and everything. Everything. You're completely debt free. Oh my gosh. Look at this, baby. Step seven.

Yeah. Amazing. So it was the mortgage, that last $59,000. Yeah. Completely paid off the house, you guys. And how long did that take you? 23 months. Well, the last, yeah, the last little bit took 23 months.

23 months. Okay. And how much were you guys making during that time? 84 to 92. 84 to 92,000. All right. And what do you guys do for a living? I am an independent consultant with a beauty company, but I also have a side hustle of making pumpkin rolls and selling them like at Thanksgiving time. Oh, that's awesome. Very cool. Very, very cool. And Ted, what do you do?

I'm a chemical engineer, but I like to say I'm a missionary at a glass manufacturing plant. Oh, there you go. That's awesome. That's awesome. Well, you guys, so the mortgage, everything is paid off. So what happened 23 months ago to get this ball started? Well, there's a story behind that. There was a pivot point. And we actually, so we went through FPU when we got married eight years ago, part of our premarital counseling. And the first five years that we were in the house, we did the most genuine form of Ramsey-ish. So we were taking advantage.

We were doing everything, but we were going to take advantage of the American Express and the Discoverer cash back. So we had our envelopes. We put our groceries, our restaurants, and the Discoverer cash back. So we had our envelopes. We put our groceries, our restaurants, and our gas in envelopes. And then we would use the credit card. We would come home, and this was the idea, to take the receipt and the cash from the envelope and put it in a box. And then it was gone, right?

It doesn't work. Oh, I was like, okay. So it sounds so good because why not just get free money? But so we did that for the first five years and then I was driving home. I have this rhythm of listening to Proverbs on the way to work and then listening to the Ramsey show on the way home to keep me awake. And I was on Hill in Holland, Sylvania coming up to this light and I was on Hill in Holland, Sylvania coming up to this light and I heard Chris Hogan say to someone who was $100,000 in debt and here we were, you know, no consumer debt

and telling this lady to cut up all her credit cards. And I was like, man, we're not even in debt. If he's telling her to cut them up, we should try this. So we decided to do a study on ourselves and we went two months of using just cash and debit card yeah and um we saved just as much money in one month and we did it like two months in a row in one month as we did at the end of the year getting our cash back from american express so we were getting like three hundred dollars back at the end of the year and we did that two months in a row just by not spending it.

And it was so frustrating because we want free money. I know. Okay. So why didn't it work? Because I mean, we have our rants here behind the glass that we say almost every day. So for you guys did it though. So why didn't it work? So talk to the people that are just like you guys that are like, oh yeah, we're fine.

We're fine. We're fine. Why didn't it work for you to do the whole, Oh, we can pay it off and cash back and all that. I think because especially like gas, that's a big thing that people are like, just use it for gas. Um, but we found that when we got to like the end of our gas, we were like, okay, we're not going to drive as much or we're going to go on a date that's closer than where we thought, or you're more conscious about when you're spending your money. Um, it was like, oh, well, someone invited us to go do something. We don't want to say no. And so it's just those little like slip ups or you forget about something and it's not in the budget. And those little things just really add up. They do. Oh, you guys, that's amazing. So

I love that you're kind of the ish. You cut it up and then you started attacking the mortgage. And so what did that journey look like for you guys? Well, just real quick. So we only paid off $28,000 on the mortgage those first five years. And the last $59,000 was in 23 months. Like it just, it was amazing how it picked up. But I forget your question. That's amazing.

I don't even remember. I think I just asked like about the journey. Yeah. The journey to after you guys decided to cut out the credit cards and you're like, we're going to really go full force on the mortgage. What were the things that happened? Like, what did you guys do to help that really propel forward? Because you said you really kicked it into gear even the last 23 months.

Well, we started using EveryDollar, which I don't know if it was new at the time or we just weren't familiar with it. And it took him a couple months to get me on board with it because I don't like change. Like Tabby, there's this way that we can both have it on our phones. We can both always know what's left. And so yeah, EveryDollar was what helped there. So then we also had like a chart that Ted made. He's all about the Excel spreadsheets. And so it has a picture of our house in the background. And then it also has like a space for each thousand that we paid off. So each time we got to a thousand, we would like cross it off with our highlighter. And so sometimes he'd be like, we get to do two this month.

So I'd run over and I would color them in and stuff. And the kids were getting excited about watching it as well. So the more blocks you color off, the more you get excited as it gets to the end the amortization schedule was awesome that's awesome so good i love y'all's motivation and your excitement you are extremely self-motivated but of course there's probably people who are in your community cheering you on who are your biggest cheerleaders yeah so definitely paul and michelle beach they were our fpu coordinators um when we first took the class before we got cheering you on. Who were your biggest cheerleaders? Yeah, so definitely Paul and Michelle Beach. They were our FPU coordinators when we first took the class before we got married. They've been the

biggest, but we have a lot of people that are excited for us. For sure. Did you have anyone that thought you guys were crazy for even cutting up the credit cards and trying to pay off your mortgage? Was there like, y'all are nuts? Not that people said, but you can tell like when you tell them, they're like, okay. But they didn't say anything. Yes. Okay. And you, how old are you guys? 30 and 31. Oh my gosh. With a paid off house. That's incredible. What would you tell all of our younger generation? You know, our age group who thinks this can't happen. There's no way I could live debt free with no mortgage. What would you tell those people? You can. And I think one of the most

fun parts is like being on a team. Like we're both going towards the same goal. And so each time we would cross off one of those boxes, it was like we were both excited because we both just wanted that goal so much. And so being on the same team, I think is the biggest asset. Oh, absolutely. And you guys are such a picture of that. Yeah. I's, I mean, there's so many couples you talk to that, you know, he does all the finances or she does all the finances and the other one like gets permission. And when you're on the same team, you help each other out. And it's just, that part's amazing. And the other thing is just realizing like, it's all God's like, it's not 10% is his and 90%. Like we are here to manage what he's entrusted to us. Like Matthew 25 and the parable of the talents.

Like God, what do you want us to do with this? And, um, it's beautiful. It's awesome. You guys. Oh,

and you guys have three little ones, right? And you're expecting number four, right? What are you do? June 20th. Okay. It's coming up.

Okay. Are you going to bring the little ones in for the, yes, they're coming. They've been practicing. Perfect. Perfect. They're coming from the table.

I may have jumped on too much that they have all their crayons and everything. They've been practicing. Perfect. Perfect. They're coming from the table. I may have jumped on too much. They have all their crayons and everything. They're so cute. Okay. And what are their names and ages? All right. So we have Brinley.

She's six. Jaina is four and Ethan is two. Oh my goodness. You guys have your hands full but in the midst of all of that, completely paid off your mortgage, you guys.

How does it feel? It's amazing. Like we want everyone to have this feeling. Yeah. Absolutely. Like just the options that you have now. Like now, however much money per month does not have to go to that. Like if one month it can be this, one month it can be this.

So it's like, God, what do you want to do next? I love it. I love it. Well, you guys, we're going to give you a copy of the baby steps uh millionaire's book because that's the next uh chapter of your story and total money makeover for you to give away to another couple like you guys to help them on this so we have ted and tabby from toledo ohio paying off fifty nine thousand dollars in 23 months making 84 to 92 000 their house and everything. Count it down. Let's hear a debt-free scream.

All right, you ready? Three, two, one. We're debt-free! Amazing. Oh, my gosh. Oh, Christina. My heart is always so full. But anyone does this.

It changes their life. But you see these little ones, and I'm like, and they're never going to know the difference. They're always going to see the way to handle your money and be in control because of their parents. And I think it's just beautiful. Changing their family tree right there. Mortgage and everything. Right. What a legacy to leave.

That's incredible. And now they have so much life ahead of them to save and give. And that's awesome. Rock stars. So good. This is The Ramsey Show. Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly. Defend the rights of the poor and the needy.

Proverbs 31, 8 through 9. I misquoted Proverbs. I'm probably going to get struck down. Character. Actually, I love this quote. Character. I mean, I loved Proverbs too, but this one's great too. Character cannot be developed in the ease and the quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired,

and success achieved. Helen Keller. That's beautiful. Wow. I do love that because I think there is and I feel like we're seeing it more and more but you know we live in such a world that it's like everyone just wants whatever they want when they want it including becoming debt-free right like when we talk to people about getting out of debt it's like oh no I have six-figure student loans like the amount

seems impossible um it's not worth the sacrifice it's not worth doing all like it's not worth doing all that. It's just worth keeping around. That's kind of one mindset people can have where I'm like, yeah, but or if they want it paid off, like I want it just paid off in two months. I wish I could just pay it off in two months. And of course, that would be amazing. But there's something about even the journey of becoming debt free through that process. There's like a refining that happens in your soul and in your heart when you go through sacrifice that you just don't get at the mountaintop. And there's blessings.

And I think that that is wonderful to have those in your life. But there is something about walking a journey that's not always easy that creates something, the character in you. Yeah, that's so good. And I think we're seeing kind of the flip side of that with the younger generation and some of their thoughts on investing. It's like, how can we get there quickly? Can we do crypto?

Can we do these get rich quick things? Yes, totally. And it's like, you know, it takes time, but the journey, it's worth it. You know, reading Baby Steps Millionaires, it's like, oh, you see all these stories and it's so inspiring. Takes time, takes work, takes effort, but you can get there. And it's just such an amazing journey. And the journey through it is what refines who you are, and I think it's awesome.

So, all right, we're going to go to James in New York. Hey, James, welcome to the show. Hi, thank you for taking my call. Absolutely. Welcome. How can we help? My wife and I are new listeners. We had a question.

So we've been living with my in-laws for the past three and a half years, trying to save up for a house. But we also have a little bit of debt that we've been working on. We knocked out about $15,000 in credit cards. Awesome. My wife has some student loans, and then we both have car payments. We don't, we're not sure if we should use what we have saved towards buying a house to take care of the rest of that debt and then just start over, you know, saving up for a down payment again. Yep. Yeah. It's a great question. How much do you owe on your student loans?

There's $30,000 student loans total. Okay, and how about the cars? $27,000. Is that just within one car, or is that two combined? That's one car. The other car is a lease that I'm going to, which is my car, that I'm going to get out of. Okay. Okay.

And how much do you guys make a year? Together, $200,000 before taxes. Okay. And how much is in that savings that y'all were saving for a house? $60,000. $60,000. Okay. So, James, I feel like one way we answer calls on the show is if we woke up in

your shoes tomorrow, what would I, what would I do in your situation? So the in-law situation is that you guys have been there a while, three and a half years. Are y'all, I mean, do y'all have kids? Are y'all ready to get out? Are you, I mean, that's kind of a long time. Yeah. It's longer than I thought it was going to be. We, we, be. We also, we just had our second child a couple months ago. She's four months old. Oh, congratulations. Thank you. But, yeah, it's getting a little crowded.

And we thought we would have, be able to move out by this point. But with house prices being the way they are, we put a couple offers in and we get a bit by, you know, we're already offering over $50,000. We get up and up it by another $50,000. Totally, yeah. It's crazy right now. So, yeah, James, if I were you guys

and I woke up, I would take that $60,000 and I would just be debt-free. I would just pay off the car. I would pay off the student loan tomorrow like I would. I would just be out of debt. And then I would really aggressively save because you guys make an incredible income. So I would save really aggressively to get a fully funded emergency fund of three to six months of expenses to get that saved. And then at the same time, I would look to rent somewhere, which I know is not ideal. And people are like, oh man, I hate renting, especially when you had a house envisioned and you guys were working towards home ownership. But listen, I would, I think that there's something

that happens when you're on your own. Even though the idea of being home, you're saving money and there's some really good intentions around it. Sometimes it can kind of get, not that you're being lazy by any means, but it's almost like you have this safety net under you of the in-laws house that you might make different decisions and even more aggressive decisions when it's just you and your wife and you guys are having to just do it on your own. So I would move out and look just to rent somewhere, even for a year, a year or two, and then and then say okay let's get that fully funded emergency fund and then let's start working i would then press play to save up for a down payment and by then to james i mean that's going to be probably in the next two years um which i know is a length or a longer time for you guys wanting to be in a house i totally understand

that but also it gives time for the market to like kind of settle on what's happening right now. Do you know what I'm saying? Like you would be buying at the top. And if you guys had the money to do it, you could. But you guys don't have, I don't think you have the money for it because you guys still have a lot of debt. You don't have savings for an emergency fund. And I think you're just going to set yourself up for a lot of stress.

So if I were you and I woke up in your shoes, I would pay off the debt tomorrow, start aggressively getting that emergency fund in place while looking for somewhere to rent for the next two, three years. Yeah, that's great. And especially with such a great income, they can do that quickly. That's right. Like they can go into it with peace and confidence and having that really great down payment and be completely debt free. So I think they'll get there pretty quick. Yes, absolutely. All right. Next is David from New York. We got two New York calls here. David, welcome to the show.

All right. Check, check. Can y'all hear me? Yeah, we can hear you. David, how can we help? You're the last call on Friday. Oh, that's beautiful. That's beautiful.

Life is good. So I hope y'all are doing well. I just had a very, well, to me it's an interesting question. Y'all probably get this all the time. But me and my lady were sitting down last night, my beautiful wife. And I'm very grateful because we are 99.9% aligned. Nice. On the entire budget.

Amazing. Okay. What's the 0.1%? Her position is as follows. Okay. Well, I feel that there should be a line item in the budget for personal expenditures, because if I want to go get my nails done, I should be able to do that. And I said, baby, listen, my position is as follows. There's going to be a time when you can get your nails done every other day.

You can get your hair done every week. For now, we got to eliminate the personal expenditures entirely, stick to the plan, and aggressively build up this emergency fund. So my question is, is she being a princess? Am I being too rigid? Am I being too rigid, or is there some kind of compromise? What is the sound strategy here? Okay, well, I need to know first, David.

Are you guys, when you say you're working for your emergency fund, so are you out of debt and you're working for your fully funded emergency fund? That's correct. Okay, awesome. Well, congratulations. Thank you. I'm going to go. I'm going to be in the middle here.

I'm going to be in the middle. She's not ingesting a lot of money either. Okay, so David, I'm going to be a little bit on her side because here's what we have found even if it's like even if it's not a lot of money just something small something small because it's realistic and that's what the budget is supposed to reflect yes it's supposed to reflect sacrifice to get that emergency fund funded as quickly as possible so i'm with you on that like i hear that intensity and it's like yes um but you also want to be realistic so does she need to go and get her nails done every week no she doesn't so but can she treat herself to something small um once a month that has a little bit of money in there and again it may

not be what she wants because you guys are kind of you are still in that season of sacrifice but it at least gives a little bit of that, of that breathing room and motivation to be like, okay, I kind of get my, you know, that scratch itched somewhere else other than feeling like I'm going $300 into like the beauty section of life of hair and nails and stuff until that emergency fund is funded. That's it.

But it's a great question, David. It's when a lot of people have so great. And I love that even though we mostly had guy callers, we still got to talk about. We did. We did. We did. Well, thanks. Thank Kelly, James, Ben, Zach, and Andrew in the booth.

Thank you, America, for calling in and chatting. Christina, so fun hosting with you. And this is The Ramsey Show. If you want to do your debt-free scream live on the show, visit ramsaysolutions.com slash debtfreescream. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debtfreescream.