The Ramsey Show - App - Is My Situation An Exception To The Baby Steps? (Hour 2)

Episode Date: October 7, 2022

George Kamel & Ken Coleman discuss: How to set up your debt snowball, How to manage finances during a divorce, Deciding if you're willing to fight for your marriage, Where paying back your parents fall in the debt snowball, How to make sure you're investing effectively, Why you shouldn't build an emergency fund while in Baby Step 2. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studios. This is the Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined by my colleague, Mr. Ken Coleman this hour, and we are here for you to take your calls, to give you that next step, to maybe help you have a breakthrough in something you're going through, whether that's with your money or your career. So

call us at 888-825-5225. Griffin is kicking us off in Charleston, South Carolina. Griffin, welcome to the show. Hey, guys. Thanks so much for having me. My dad and I are huge fans, so really appreciate your time. Thank you. How can we help? I wanted some guidance here on what to tackle in terms of my loans or just to keep stacking money in my savings account.

Currently have three main loans between my townhome, student loan, as well as my car. And to break down the numbers for you, the townhome was just recently purchased $410,000, put down 10%. And the current loan is for $368,535. That's on a seven- year arm at 4.75%. I just paid my first mortgage on the first of October, and that was $2,365, which I own the property myself. However, I do split that payment with my girlfriend that lives with me. Okay. And then we've got my student, yep. Then we got my student loans. Um, those to be perfectly honest with you, I have not paid in a while. But there's about six different loans between 3.76% and 4.6%. And the standing balance on that is $26,654.

And then there's the car, which is a 3.69% loan. And that total is $9,455. And I'm paying that every month, obviously, which is a $341 payment. Okay. What's your question? My question is I've got income of about $175,000 a year, 26, and I've been fortunate enough to be put into this position. Do I continue to do the minimum payments on these loans or should I pay my car off all in one month, which basically in my last commission check that I just earned, I can do that, plus save some? I'm trying to get some guidance here on what next steps to take to get to the point of financial freedom really as quick as possible. I love it. Well, one way to get to financial

freedom as quickly as possible is to stop going into debt. So are we on the same page that there is no more debt in the picture? No more debt in the picture. I don't have a credit card. Okay, great. But all the other things are debt. The car loan, the student loan, the townhome. So here's one thing. You mentioned a lot of interest rates, which tells me you love math. You love crunching the numbers and justifying every purchase, right? Yes, sir. So one thing we're going to do, it's really hard for people like you who are sharp, is to ignore the interest rates. Okay.

Now, if we ignore the interest rates and we start listing these balances from smallest to largest, that tells me the car loan is gone this month, then we're attacking the student loans. Those are going to be gone in a few more months. Right. And then we're going to build an emergency fund of three to six months of expenses. And then the house, that'll come later. We're not going to worry about that as part of our consumer debt. I should have mentioned I have $56,000 in savings. Well, that helps. We're debt-free today, my man. What are you waiting for? I should have mentioned that.

I had $1,000 in my check. So why are you hanging on to the $56,000 and not just paying off the debt as it's accruing interest? Because the... Well, that's a great question. I think a large part of it is because I wanted to save for a townhome. I didn't know how much exactly I needed until I made the purchase, which was just done in the last three or four months. So that money is really residual from the money I was saving up for a down payment. So you decided, I'm just going to put 10% down and leave the rest in the bank?

The difference between the 10% to 15% in the offer I was provided, it didn't make enough sense for me to do the additional 5%. So I just put 10 down. That's correct. And so this is, like I just said, just did my first mortgage payment. So I've kind of been one month, one of owning this property and living in it and trying to decide what to do with my money. Yeah, he's spinning plates, George.

He's got financial plates all over the place. You're doing 17 things at once. Number one, it does worry me that the girlfriend is paying into this and she doesn't own any part of it. You're doing 17 things at once. Number one, it does worry me that girlfriend is paying into this, and she doesn't own any part of it, and if this doesn't work out, she's going to feel like she got screwed, right? I can't speak for anybody here, but what I do know is that Pat did come to the situation where my salary alone would pay, and then my commission would be able to pay these other bills. So I am in that position.

I'll tell you what I would do, what Dave Ramsey would do if he was sitting here, and that is to be completely debt-free by the end of the day and use the rest of the money as an emergency fund, and we're going to then start investing 15% of our income into retirement. Any money beyond that is going to get thrown at the mortgage, and I would probably look at refinancing when it makes sense over to a 15-year fixed rate 15% of our income into retirement. Any money beyond that is going to get thrown at the mortgage. And I would probably look at refinancing when it makes sense over to a 15-year fixed rate, because those adjustable rate mortgages are the worst. Very dangerous type of loan. I really appreciate that, Garvin.

So you're in a great spot. We just have to start doing things with focus, intensity one at a time. But the good news is you can do this all tomorrow if you decide to. Okay. So, you know, in terms of, that's exactly what I wanted to hear was, I feel like I'm putting a lot of attention towards a few different things rather than focusing and honing in as, you know, a gazelle intensity, as Dave would say, towards one of these. Exactly. I mean, you know this stuff. I'm just curious, how come you haven't done it? It seems like you've been listening for a while. I think a lot of it is I am financially conservative, and I like seeing the bank account grow. There's that level of pride. But then the other half of it is I am 26,

and I am taking these steps a little quicker than maybe some people would. But, you know, there's no excuse for that. I'm ready to tackle this and start making moves tomorrow. Well, your greatest wealth building tool is your income. You make an amazing income at 26 of $175,000, and I just want to see it work for you instead of it disappear into the abyss and you're going, I don't feel like I'm making great progress. I'm listening in here.

I'm listening intently. Coach Ken, jump in. I'm going to. I think you have been tinkering because you like finances. I think you like strategies, and that's going to make you susceptible to temptations to tinker. And so here's my Coach Ken phrase. Stop tinkering and start focusing. Focus on the baby steps the way George laid them out. You've been listening to the show. Just focus on the baby steps. Stop tinkering around.

You know what I mean? Just stop. You're going to get further with focus, right? And now you can always be curious and see what options are for you long term, but that's after you get yourself in a financially stable situation. You got it? Yes, sir. Absolutely. Have you read The Total Money Makeover, Griffin?

I haven't, but I'm going to. Well, can I send it to you, or do you already have a copy? I don't have a copy. Now you do. Boom. We're going to ship it to you, my man. Hang on the line. Austin will pick up and we will send you a copy of The Total Money Makeover. That book gets me pumped every time.

I still read it once a year just to stay focused and stay motivated. The audio book is great too. So hang on the line. We'll get that to you. But right now, focus is the operative word here. And you make a great income at a young age. and if you can use it and channel it like a laser, dude, you can do some amazing things with your money. Stop tinkering. Start focusing. I was hoping for a T-word. First buy a chalkboard. I was really hoping for a T-word from Ken Coleman. Write it on a chalkboard right there.

Alright. I'll take it, Ken. Alright. Pretty good. Tweet that. This is The Ramsey Show. Ciao! hey folks here's a friendly reminder that you can visit us here at the Ramsey Solutions headquarters just south of Nashville Tennessee we were just out there meeting some nice folks, taking some pictures, signing some books, having a good time. So come visit us. Make it a point on your trips as you're traveling around the country to come see us. We've got free baked goods and free coffee, and you get a free mug, and we've got a fun timeline wall museum and a full bookstore, and it is a good time.

It's fantastic. Nashville is a great city to's fantastic nashville's a great city to visit to begin with yeah yeah it's you know years ago when i was hosting the just a video channel um had some folks come by and they asked me to sign their baby that's true story uh so don't please please don't bring your babies and ask us to sign them like sharpie on skin sharpie on the little guy's leg i feel feel uncomfortable. I didn't do it. Okay. Oh, good.

You didn't go through with it. Yeah, I just said they asked me to sign. Well, I redirected. Don't make it weird, people. That's all we got to say. Yeah, there you go. All right, let's go to the phones. 888-825-5225 is the number to call.

Grant joins us in Spokane, Washington. Grant, welcome to the show. Thank you very much, gentlemen. I just want to say thanks for accomplishing your mission on a daily basis. Oh, thank you. Oh, that's very show. Thank you very much, Simon. I just want to say thanks for accomplishing your mission on a daily basis. Oh, thank you. That's very nice. Thank you, sir. What's going on? All right. Baby step number three is where my wife and I are at. We've been married for 16 years. We have five kids, and legal separation was proposed. She brought it up last night when we were talking. We have $4,000 to the

penny in our emergency fund right now. And I think we've never established a monthly budget, but I think our net to cover is between $3,000 and $3,500 just to survive. So we have essentially a month's worth of savings right now. My question for you is, should I add a second job to go gazelle intense to bump up our savings? Or is it more important to deal with my mental health and my marriage in this season? Also, one part of this is my mental health. I was diagnosed with bipolar a number of years ago, I think five years ago, and I was just on a manic phase yesterday. Oh, my goodness.

Are you seeing someone or have you seen a counselor, a medical professional for this? I am being treated by my team. I have a counselor that I see on a weekly basis. I have a psychiatrist that I've seen, I think, five or six times in the last three months, and they're actively managing my meds. And I just had a medication change just today. And we're trying to find the right balance for the different mood stabilizers and the different medications. I think I've been on six or seven different medications in the last four years. I mean, do you and the team feel like there's progress that has been made

and that it's at least while we're still testing and trying that there's some progress? I think we're testing and trying. I know that in September I was hospitalized twice. One was voluntary, the other one was involuntary. And it's been a hard life for my wife just dealing with my moods and uh she she's receiving counseling for herself individually over the last year and she's not willing to go back to the relationship that we used to have just because it was unhealthy an unhealthy dynamic where she was trying to regulate my moods with behaviors that she would,

that she, no, I don't know. I don't want to be crass, but she would try and control me with sex by giving me what I wanted. And it was just, it was unhealthy. Yeah. Well, so to answer your question, you need to be focusing on your health and her health. Yes, sir. And want to see you get, you know, that emergency fund where it needs to be, but we've got bigger issues at play right now. Yeah. I mean, a situation like this, if it's heading towards divorce, it turns marriage into a business transaction. And so the goal at that point is to obviously protect the kids. That's the A1. And number two is to make this as little of a mess as possible with the finances. And so how sure is the separation? Is this something you guys are

going to try to work through or is this headed south? We've been separated since November 10th of last year. So we're 11 months in and it doesn't seem to make, we haven't seen much forward progress. We've done intensive marriage counseling week in and week out for the last 12 weeks, and it was financially costing us $150 a session, and somebody at our church established a bit of a fund for the Higgins family for us to receive 50% of that counseling. And we were coming out of pocket $75 a week, and it was a pretty good financial ask on our part.

But I can't look back and say that we've made progress in the last few months. I can say that times have gone by and we've spent the money, but we haven't really made progress. And then you had the conversation last night where she brought up, we need to make this legal. Yes, sir. So it doesn't look good. No. And so at this point, again, the emergency fund, but you taking a second job, if you've got the health to do so, I don't think that's a – I don't know if it's a good thing or a bad thing, but bringing in more income during this season might be a right idea,

but I certainly would check with your medical team on this to see, you know, do they feel like this is adding more work hours during this transition? Is that healthy for you? We can't speak to that. It feels like it may not be. Yeah. I mean, you guys don't have debt. And if this does head to divorce, then, you know, being married for 16 years, five kids, then it becomes who's getting what and custody battles and all that stuff. And so I would be looking at getting a lawyer to figure this out if it's been 12 months with no progress. And so that's the sad reality. In five weeks, it'll be 12 months. So we're not, we're not on the 12 month mark yet, but we're almost to the 11 month mark. So it's like, it's. But at that point I might look at getting separate checking accounts

because the fear is one spouse drains the account and runs, and you don't have any recourse if things continue to go south. It sounds like it's been amicable, which is great, and you're living as roommates essentially, right, for the last almost year? We're not in the same household. Okay. Physically, we're about three miles apart. Where are the kids?

With her. All four and then the fifth one, our second born, has a difficult relationship with her. She's 11 years old and she's living with her aunt. Okay. I'm just wondering what's best long-term for the kids at this point? What's fair to them? And living in this weird purgatory of our mom and dad together or not, it's not official, they're still trying to work through this.

I'm just more worried about the kids than anything at this point. And so I would try to actually have some level of closure to whatever this is. It sounds like we need to just call it if you've been living apart for this long. I don't want to give up on them, though. Well, I'm with you, brother. I would. So back to the main point of your question. I mean, if you've got to work and if you can do it and you've got to work to help pay for the counseling, I'd fight for the marriage. I'd fight for it. I will tell you this just candidly. One of my closest friends in the world went through a divorce over a decade ago, and we were recently hanging out, and it was an amicable divorce.

But we were talking about another friend of ours who's going through a divorce right now, and he told me, my friend that's been divorced now over a decade, he said I would tell him to fight with every ounce in his body, with everything he's got left, fight. Fight to save the marriage because it is so destructive to the kids, to everybody. So I'm with you, man. I'd summon every ounce of strength I've got, and I would put some of that strength into you doing everything you can to get healthy

because a healthy you is the best chance we have of having a healthy marriage but i'd fight i think i hear what you're saying and i want to fight and i one thing that specifically that she said in the last week is that she wants me to find the program to follow through on the program, and not to short-circuit the program. And, yeah, just the follow-through and the consistency is what I need to show her. Then do it. Then do it. Show myself.

Then do it. Okay. Do it. You can decide. You can decide right now. Do it. Show her. If you're going to fight and you want to fight, then I'd say,

All right, babe, I'm going to do her. If you're going to fight, you want to fight, then I'd say, all right, babe, I'm going to do it. And I'm going to follow through and show you that I want our marriage to work. Hang on the line, Grant. We're going to send you a copy of Dr. John Deloney's book, Own Your Past, Change Your Future, so that we can continue to walk with you through this really tough situation. Thanks for the call. This is The Ramsey Show. I'm George Campbell. Joined this hour by my friend Ken Coleman. And Ken, you were just on your own show right before this one, The Ken Coleman Show,

helping folks find those careers that they love. And a lot of people don't believe it's possible. They're not sure how to get there. It's all very squishy. And you walk them through a very clear process in those calls. Yeah, we do. And, you know, it's as simple as self-awareness. You know,

an aware person is very clear then on who they are, what they want to do, why they want to do it, and then that translates to confidence to step out and go after it. And then it gives you ultimately courage to stay on the path. We've got a great tool that we developed based on that methodology. And the methodology is simple. If you use what you do best, talent, to do work that you really love, that's passion, to produce results that you care deeply about, that's a sense of mission. When you use talent to perform passion, to produce your mission, you're on purpose. And we've got a great assessment. Tens of thousands of people have downloaded. It's called the Get Clear Assessment. I've got a printout right here. This is what you can actually print out. You have the digital version as well. I'm looking at mine right

now. But you get a very nice detailed report on what you do best, what work really fires you up, and then what results drive you, in other words, motivate you. It's called the Get Clear Assessment, and it's normally $30. It's a 20-minute assessment and you get a detailed report plus a very clear purpose statement that's filled in with those top three talents, top three passions, and that primary motivational driver that we call mission. And it's now $10 at ramsaysolutions.com. There's no assessment like it. There's other assessments that measure talent, but nothing that measures what you love and then what motivates you.

And so you've got to understand talent is a tool, but it is passion, which is love, and then mission, which is what motivates me. That's the heart. So 20-minute assessment, it's a great gift. It is great for a variety of people, people who feel stuck, people who feel like they've got no clue what they want to do, people who have a really good idea and they want to get some clarity and confidence that that is, in fact, the mountain they want to climb. So the Get Clear Assessment, it's only $10 in the month of October right now at RamseySolutions.com. That's a killer deal.

I've taken it myself, and I'm looking at it right now, and it was spot on. It was like you were reading my mail, Ken. See, there it is. It says, you were created to use your talents of imagination, communication, and discernment to perform your passions of promoting, leading, and creating to accomplish your mission of creation by producing new things and ideas. I couldn't have said it better myself. So that becomes a high-level job description, and so you want to be able to spend 75% of

your day living that purpose statement out. And you are my friend. I love to create. It's a lot of fun. And it gives you possible industries based on your results. And look at this. It's got education and motivational speaking and writing. It's got everything I'm doing, Ken. So I feel like I'm in my sweet spot. Well, you are. You just confirmed it. You are. And not only you're in your sweet spot, you look fantastic in your little bomber jacket. It's a little bomber. Well, it is. You're a little guy. To be fair, it is an extra small. You wouldn't want to wear a big bomber jacket. That's true. Yeah. Well, before Ken digs me any further, I'm going to mention that you can go get that Get Clear Assessment for just $10 at ramsaysolutions.com. Hurry up. It won't last

long. So thank you, Ken. Well, actually, it'll last forever. You know why? It's a digital. We never run out. That's true. Well, unless the internet dies. By the way, you don't have to pay shipping or handling. You know why? It's digital. It's digital. Thank you for my mom listening. She'll be like, oh, that's helpful, Ken. Thank you. That's great. That's my demographic.

She's always listening. All right. Let's go to the phones. If you've got questions about how to advance in your career, switch careers, side hustles, increase that income, Ken is here for you, and I can help jump in on those money questions. The number is 888-825-5225. Andrew is jumping in next in Cincinnati, Ohio. Andrew, welcome to the show. Oh, hello. Hey. Hey. How you doing? Oh, this is awesome. Can you hear me okay? Loud and clear, Andrew. You're live on the Ramsey Show. How can we help?

Dude, sweet. Anyway, so this is kind of a student loan question. There's layers to this, so if you ask me questions, if you feel like I need to clarify them, go ahead. so um indiana owe about thirty nine thousand dollars in student loans um so twelve thousand of that is to my parents and then there's about three or like four or five of them that are just federal student loans um my my father decided it was like a parent plus loan and he decided that he wanted to pay off the loan um about two or three years ago and now he um i'm in a situation with work when i'm earning a lot more money than i used to and i'm gonna be able to pay off these loans a lot faster and then went on top of biden doing the ten thousand dollars you know and if biden's gonna go ahead and oop me. I'll take it to the basket. You know what I'm saying? So I am –

That was a sports reference. We just went to SportsCenter there. I want to address that in a minute. But keep going. What's your question? So the question is, so my dad went ahead and paid off that student loan. And now that I'm in a situation of work where I'm making a lot more money, he was telling me that he wants that money back, rightfully so.

And so I'm stuck in between this. Should I go ahead and do the baby steps for the student loans, or should I go ahead and pay off my dad first, which is the biggest loan, and get rid of that slave master relationship. That's interesting. So you're saying, hey, should I do the debt snowball as is, even though the $12,000 is at the very end of it, but dad's hanging over my neck going, hey, I want this money back. How much does he need this money versus it just being a moral, hey, I paid this off, but it was for you. I'd like the money back. Is he in a tough financial spot? No, he's not. Honestly, he told me that it could be like two, three, four years.

Like, it's fine. So this is not like every time he's on the phone, he's like, hey, where's my loan money at? No, no, no, no, nothing like that. But then this goes back to the work part of things, that I'm in this situation where I'm able to pay off a lot more money within the next, like, 18 weeks. But the money's not going to last forever. So it's either pay off the federal loans and just, like...

They just do the debt snowball, just smallest to largest, and you'll get there a lot faster. And then when you get to the end, time to pay dad back, and you're done with this whole thing within, what, a year? Well, so, no. So, like I said with this whole thing within what a year well so no so i guess this is where things get a little confusing is that i so i'm a respiratory therapist shout out respiratory therapist um and because of um covid and all that stuff they're really desperate for nurses and respiratory therapists and doctors all health care world um and so they're paying me

an extra about 60 an hour which would be about90 an hour, which makes a lot of disposable income after this. But after all this is done, and they're like, all right, gravy train's over, get off, you know, like I only have about three, $400 left to go towards debt. And that's what I'm saying, that $14,000 is going to be there for a long time. So how long will it take to pay off your debt making this extra money you're making right now? $39,000. How quickly can you pay that off?

Making this kind of money? If you're intense. Let's see. So I'll be honest. I haven't really looked at... Yeah, can I jump in? Hey, listen, bro, let me help you out. There's nothing confusing about what you threw at us.

Nothing. I kept waiting for the confusing part. The only thing that's confusing... It's just layers. It's not layers. You'd use the debt snowball. Make an extra income right now. If there's a season in your work life where you got a boon of income,

meaning it's kind of booming for a while, yes, you attack it faster, right? But it's not like as a respiratory therapist, you're not going to have an opportunity to make more money elsewhere. And you're acting like the income's going to go away and you'll never be able to get a raise or move up. I mean, you're thinking too hard. You need to stop. You just work the snowball, work the debt snowball, smallest to largest, intense, second job, third job, whatever you got to do, gazelle intense, whatever that looks like for you to pay every loan back, including your debt. And honestly, you'll get there, I think, a lot quicker than you realize. This is not an

insurmountable amount of debt. And you can do this. It's not going to be there forever. And you just have to stop thinking so much and get busy. How much money do you have in the bank right now, Andrew? We're going on about $7,000. Okay. We're taking six of that to throw at this debt. We're going to take this amazing income you have to clean up the rest. We're paying dad back. And all of a sudden, 12 months from now, no excuses. You're completely debt-free with a fully funded emergency fund. It's that simple. No layers, George. This was not a tiramisu, Ken. It's not that complicated. Not that many layers. Just don't overthink it. You got this. One thing at a time, focus intensity, and you'll be debt-free in no time. This is The Ramsey Show. I'm George Campbell. He's Ken Coleman.

This is The Ramsey Show. You can give us a call at 888-825-5225. Brian is joining us from Houston, Texas. Brian, welcome to the show. Hi, thank you guys for having me. Absolutely. What's going on? All right. So I'm 27 years old. My wife is 25. We have a three-week-old at home. And basically my question is, are we doing Baby Step 4 correctly? We've been on the Ramsey plan for a little over a year now, and this is my current situation. I contribute 6% to my company's 401K, and they match 50% of that. To reach the other 9%, my wife and I are planning on opening up a Roth IRA for each of us. My wife was a teacher for two years and has $9,000 in her teacher

retirement account called TRS. We plan on rolling that over to a Roth and paying the taxes. Then, to open up a Roth for me, we have to have $6,000 to start the account. Does it make sense to open up my account before year end 2022 so we can contribute monthly up to $6,000 in 2023 to meet our 9%? Well, you wouldn't roll into a Roth and create a tax burden until you're in baby step seven with a paid-for house. And so I would roll that to a traditional IRA in order to avoid taxes. Okay. On my wife's portion? Yes. And that's just so that we're in control. And you can still invest in that traditional IRA, or you can then open up a new Roth IRA and use future funds towards that,

and that wouldn't create a tax burden. Okay. So you would use after-tax dollars. So she's not working outside the home right now? Is she with the three-week-old? Yes. So she's not teaching anymore. She's going to stay at home with the baby.

Okay. And what's your income? Gross. My current is $69,000, but with bonuses, the bonuses are pretty generous. It's usually between an extra $6,000 and $50,000 a year. $6,000 and $50,000? Yeah, I'm in oil and gas. When times are good, times are good. Yes, sir. Okay. So the easiest thing to do with that kind of a regular income with bonuses, just invest 15% of your income of whatever it is that month. And so you can do that. You said 6% is what you're doing now. And they match 50%.

Is it up to a certain amount they match or they match all the way? So that up to that 6%. So they put in, I guess, 3% of my income, you can say. Okay. So that 6% gets you up to the match. Then you could fully fund a Roth IRA. That's another 6,000. Okay. And then does she have earned income at that point? No, no, she's staying at home. Okay. So you could go back to the 401k as well as funding a traditional or a Roth. So you would open up a new Roth for her at that point. We just don't want to roll the traditional plan she had into a Roth

because that is when the tax burden would hit. It would just be taxable income. So I would open up a new Roth for her. I see what you're saying. What's that? Sorry, I said I see what you're saying. So the nine just to a traditional and then open up a new Roth for her. Exactly. And you should have a $6,000 limit on that for the year. Okay. And would we open up a Roth for me? Yes. And then if there's still, you haven't hit 15%, you can go back to that 401k and finish it out there. Okay, I see.

I see what you're saying. Yeah, I was curious because I figured I should probably open it up for me this year at that $6,000 so that I can contribute to it next year because if I start it, at least this is what my financial – I talked to one of the SmartVestor pros, and he said, well, if you start it at the $6,000 in January, you can't contribute to it all year. Oh, I see what you're saying.

Because you already entered in the max amount. Yeah, it might be something you have to just start later on then if you can't do it retroactively. So I think you've got it down man you guys are doing great and congrats on the three-week old that's exciting yeah get some sleep i'm surprised you're this sharp with a three-week old yeah i think you're extremely coherent my friend that's uh that's a tough season breast yeah but i love it i think i cut them off george i'm sorry brian are you still with us did i I cut him off. I'm sorry. Brian, are you still with us?

Did I cut you off, buddy? Yeah. Sorry. I was saying I'm married to an amazing woman who married a nerd. I wanted to hear that. You married an amazing woman who married a nerd. But you know what? Could say the same about you and your situation, my situation.

Both of our wives have horrible judgment, and thus we are married. Fooled them. Yeah, we did. I love it. All right, we're going to the great city of Scranton, Pennsylvania, up next with our friend John. John, what's going on? Hi, George and Ken. Thanks for taking my call. I sold myself a Rada 3500 that was paid off, and then I paid in cash for a Peterbilt, and I want to know if it's okay while I'm babysitting to save up a repair fund for the Peterbilt of $50,000. Why do you need $50,000 for that? The Peterbilt is new to me.

It has 835,000 miles, and Caterpillar, the engine, recommends an engine overhaul at a million miles. Engine overhaul, according to Peterbilt, costs $32,000. So is this rig, is this for your business? Yep, just started it. Okay, and it's paid for. Yes. But you now have a $50,000 repair on this thing. Potentially.

Right now it runs fine, but adding another 150,000 miles to it is probably going to happen in four or five months. Okay. And how much debt do you have? I have $72,000. And what is that? $68,000 on solar panels and $4,000 remaining on a personal loan that I'm almost done with. Okay, what's the business? I haul water.

And you sold the Chevy Silverado to buy the Peterbilt to haul the water? Yes. You were hauling it in the Silverado to buy the Peterbilt to haul the water. Yes. You were hauling it in the Silverado before? No. I was working for a different company, hauling it in a Kenworth for another person, and I decided to go on an operator, so I sold my paid-in for Silverado. Do you have another car for personal use? Yes.

And that's paid for as well. How much water are we dragging around? 130 barrels. Have you made money with this business yet? Is it profitable? I start on the 17th. Okay. And it's just you or do you have a team?

It's just me right now. Okay. And your first gig is on the 17th yes is there another way sorry for the simplistic question but i'm going somewhere with this is there another way to drag the water around than than the old truck and i mean like a wagon or something forgive me but is there something like you have a trailer that's a whole lot less money and doesn't have all the mechanical issues? Yeah, thanks for the question. The frack companies take at a minimum 110 barrels at a time.

I didn't ask that. So that ends up being over 70,000 pounds. So no, a Silverado or something smaller cannot do it. Okay. You can't pull it in a trailer? No, no. It's way overweight. Oh, okay.

I got you. All right. Forgive me. I don't know anything about that stuff at all. It's all right. Okay. So your question is cash flowing this during baby step two? Yeah, saving it up for a repair fund.

He's asking should he save up the emergency fund. Yeah, this would be like saving reserves for your business at that point. Yes, sir. And so if this is an emergency where the truck won't run right now, then yes. And you know it's going to happen, but I would get some clarity on when it's going to happen and how much that's going to cost. And then kind of create that sinking fund. And if that's $10,000, $20,000 a month, I don't know how much this business is going to bring in. Do you have any idea?

I should have the $50,000, $20,000 a month. I don't know how much this business is going to bring in. Do you have any idea? I should have the $50,000 within 10 weeks. Oh, wonderful. I tell you what, I'd also be looking to find the best, most affordable, reputable mechanic that works on these things and get in a second opinion as well. And what can you do along the way maybe to try to avoid the recommended engine replacement at a million miles. I'd be doing everything I could to save from preventative maintenance as well. Yeah, but you're going to have to stockpile that kind of cash in your reserves for your business on top of then starting to clean up the debt and create your own emergency fund for your personal life. So that's part of being a small business owner.

But I wish you the best with this new business, man. That puts this hour of The Ramsey Show in the books. My thanks to Ken Coleman, all the folks in the booth, Jenna, Ben, James, Austin, Zach, Andrew, the whole gang, and you, America. Thanks for listening. We'll be back with you before you know it. Hey, folks, Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? Get your daily dose of advice on life and money. Check out all of our shows from The Ramsey Network wherever you listen to podcasts.