The Ramsey Show - App - It Feels Like Everything’s Hitting at Once (Hour 2)

Episode Date: January 30, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am your host today, Jade Warshaw, joined by your other host today, George Camel. And we are taking your calls, something that is so fun and enjoyable to do. We're happy that you trust us with that. If you want to call in, you can call in at 888-825-5225. And we will do our best to help guide you to the next right step. That's all we can do, Jade. That's all we can do.

Try our best and next step. We can't solve the world's problems, but we can at least help you in three minutes that we have together. I know, that's right. So let's go to the phone lines where we have Dustin in Albuquerque, New Mexico. What's going on, Dustin? Hi, how's it going? Good. Well, this past year, 2023 was my first full year of owning a house.

And I had always heard people who own houses don't really get a tax return back. So I went to do my taxes. And sure enough, he said I was going to get like $100 back. And their fee is like just over $300. So he recommended I take some money out of my 401k from 2023 and put it in an IRA. And he said if I put like $4,000, I would probably get like at least a $700 or $800 return on my taxes rather than a $100 return. This guy's fired. So I wanted to...

Instantly. Keep talking. Keep talking. return this guy's fired instantly keep talking so what i understand is you're gonna get a hundred dollar refund right now yeah like a hundred and their fee to work with the tax pro is 300 bucks and you don't have the 200 bucks to cover it is that the problem i was gonna i was gonna put it on my credit card and he said well if you want you could do this and it would cover our fee and you would get you know some money back he suggested a 401k loan is he saying to withdraw the money from the 401k is he saying do a transfer from an old 401k do a direct rollover what exactly was he saying to do um if i understood, he wanted me to roll over like $4,000 from my 401k. He's an old employer?

From my earnings from 2023. No, I'm still working with this employer. Well, you... Okay. You're not going to be able to do a rollover unless you leave that employer. Oh, okay. So what he's saying to do it sounds like he's saying to withdraw money from the 401k he wants him to withdraw it to pay to pay yeah which will cause you to pay like 35 penalties and taxes in order to do that oh okay i didn't know that listen if Yeah, I don't trust this tax guy.

First of all, he's missing a few brain cells. Here's the thing. Telling you to do this so that you can cover the $200, $300 fee you owe him. George, we're expending way too many mental calories trying to understand that this tax guy is whack. Here's the thing. Here's at the core of this. You're getting $100 back. That's great. That means you didn't overpay taxes. And, comma, you have to pay them for their services.

So I think right now you've just got to break your mind for a moment because what's happening is normal. I don't pay that much in taxes and I have to pay my tax guy like that that right there is actually normal what's what or what should happen is what I should say what's normal is people get back eight thousand dollars and they don't even feel that they paid their tax professional because they're getting out back these exorbitant amounts and they're thinking that they won the lottery and that their tax guy did something wonderful for them when really all they did was just loan the government money all year long and didn't even collect any interest on it and so i kind of want to reframe your brain there and just go listen you're it's great you didn't get a tax refund back that just means you didn't overpay the government you had access to all of your money all year long which is a good thing and now you got to pay these guys for their services

no harm no foul like that's that's the way it should be so when do you have to pay these guys for their services. No harm, no foul. Like that's the way it should be. So when do you have to make this payment? Well, we were doing my taxes this past weekend and he just put it on hold, you know, until I looked into it. He told me to look into the IRA and to see if I could take money out of my 401k. But then I heard about you guys. You know, I money out of my 401k. But then I heard about you

guys. You know, I've never really listened to the show, but I heard about you guys. So I thought I'd call. I'm so glad you did, Dustin, truly. So here's the deal. I'm going to go. How much can I work? What can I sell in order to make $300 to pay this guy's tax fee? But then I'm done with them. And we're not taking out 401k loans to pay our tax guy for our income tax return. Okay. And I don't know if I can ask too. I've always wondered about like a Roth IRA. What would have, like, should I just stick with my 401ks or should I consider moving to like a- Do you have any debt? Just the house.

Just your mortgage payment? No credit card debt, no car payment. Well, I have a little bit of credit card debt, like $600. That's debt? I travel for work, so I use my credit card to eat. I travel for work. I use my debit card. Yeah.

And that way I can't go into debt and if they if they're causing you to go into debt they need to provide you a company card for that but do not put company expenses on a credit card because if something happens you're you're on the hook if they fire you or whatever and they're like you know we don't even know what you're talking about that's not an expense anymore you're on the hook for that bill dude well to be honest i do the credit card because i can't really afford to put anything on my debit card like i literally then they need to provide you some petty cash or some funds in order to do those things but you should not be going into debt on a monthly basis to fund purchases for your job like hard line but even if like they pay me back the very next week because you're in debt you're

in debt your name is on the line until they decide to pay you back because what happens if you do something and you're like listen i thought that was an expense you're paying 25 interest on this balance in the meantime yeah so dustin the real is, why don't you have any margin even though you don't have much debt? Right. If $300 is an issue. I'm confused. Like, how much do you make? Well, after my taxes and my insurance, I get like $1,500 every two weeks.

Okay. So, three grand a month. Are you doing any investing right now into that 401k? Well, yeah, whatever. I mean, I don't know exactly how much it is, but it's just whatever my job put forward. Well, it's about to be 0%

because right now you need $1,000 in a starter emergency fund because you're going to keep going back into credit card debt if we don't solve this. So pause investing down to zero right now go get some side jobs start selling stuff pay the 300 bucks to your tax guy save up a thousand bucks in the emergency fund and then let's get rid of this credit card debt and then we can get back to investing hey how much is your mortgage so every month my mortgage actually went up this year because they underestimated my taxes for last year. So it went up to just under $2,000.

That's the problem. Goodness gracious. There's your problem, bud. Your problem. Two thirds of your money is going to this home. Yeah. The rule of thumb here is we don't want your mortgage to be any more than 25% of your take-home pay after taxes. And you are well above that.

And that's why you're feeling the heat. That's why you don't have any money saved. That's why it's hard to pay this $300 tax bill. And your brain even considered the idea of getting a 401k loan for it. We've got to get this ship righted. Stay tuned. Keep following us and we'll teach you how to do that. This is The Ramsey Show.

Thanks for listening to The Ramsey Show. I'm Jade Warshaw. This is George Camel. We're with you for the next couple hours talking about your life and your money. And I have to say, George, you know, one of the things I love most about being here at Ramsey Solutions is our live events. They're off the chains. They're off the hook, man. I love when we all get together.

It's like a rally. And we have a really great one coming up this year, May 10th and 11th. It's our Total Money Makeover Weekend, which is a two-day event. Listen, it's all the personalities there. Myself, George, Ken, John Deloney, Rachel Cruz, of course, the GOAT himself, Dave Ramsey. And we're coming at you with all new material. Like that's the part that I'm really excited about is it's just a completely new, fresh situation, if you will. And no matter where you are on the baby steps, if you're new to the plan, you've been hanging out with us for 20 years. This is going to be a pep rally and crash course on everything we teach about money.

And again, it's all new content. And we're also going to make it interactive with live Q&As. We've got a live Smart Money Happy Hour recording with Rachel Cruz

and I. That'll be a blast. And our events are actually fun. So you don't have to like drag people to these events. When they get there,

they're like, oh, Angie goes hard in the paint. Yeah, we'll make sure it's a good mix of information and entertainment

and lightheartedness. This is not a seminar. That's right. Oh, we'll make sure it's a good mix of information and entertainment and lightheartedness. This is not a seminar. That's right. Oh, yeah. Never that. Never that. But early bird tickets starts at $99, but that's only going to be for a limited time. So if you want to get the tickets at the $99 price, you need to get online today at

ramseysolutions.com slash events. Because let me tell you something. These tickets, they go, they go. Like they go fast. It's here at the Ramsey Event Center, just up the hill from the Ramsey Studio. And so it's Nashville's a great destination. Make plans, get it in the budget to be here. Bring a spouse. That's a great, I mean, I feel like people leaving their marriages are better. Listen, that's so true, George. And you made the point, no matter what baby step you're on,

this truly is an event for you. If you're new to the baby steps or you've been in the baby steps, this is the perfect event for you. And, you know, George, it's funny because, you know, we've been, we all teach from a series of seven baby steps and that's kind of just the crux of everything we do and everything we talk about. And I kind of want to take a moment and talk about that because so many people are new to listening and they're like, I think I get it. And they call in the show and they've got some questions and, you know, there's just some basic teaching that I feel like we can always learn no matter where we are in the steps. And so like we had a call last from Dustin and it's like, he was new. And the more we talked to him, the more we

started uncovering more and more things about his situation. That's like, okay, he's he, we got to get him lined up on the baby steps. Matter of fact, Dustin, this event might be for you if you can afford to get there, get that $99 ticket rate. But George, let's take a moment and just for the person who's listening to the Ramsey Show for the very first time, let's kind of unpack some of those basic foundational things around the baby steps. Because obviously, the very first baby step is baby step one, get $1,000 saved. But you kind of have to understand some of the nuance around why that is and what else goes along with that so that it makes sense in your mind. And you're not just doing what a radio personality or a podcast or a YouTuber told you to do, right?

Yeah, this is big. And so there's really kind of a prerequisite of baby step zero, which is getting current on all of your bills and actually paying attention to your money for the very first time. And a lot of people, Jade, I mean, they don't know how much debt they're in. They don't really know what's happening. And so you might need to pull your credit report just to see what the heck is going on in your financial world and get some hard numbers and look at your actual pay stubs and see where's my money going? How much is coming in? Yeah. And then make sure you're current on all of your bills. If you're behind, we have to get current. That's right. I'd call that getting organized. Like the first thing that you're doing, just get organized. Like George said, let's log in. Let's look at the credit report. Let's log in and see what really do we owe, right? What's our payment?

Because so many times I'm like, listen, what do you owe? And they're like, well, I'm not really sure. How can you solve the problem if you don't really know what the problem is? And one of the things I'd add to that, and you can add to your list too, is baby step zero, a big part of that is just saying, you know what, I've got a problem.

Probably your problem is debt. I'm just gonna stop borrowing money here for a minute. I'm gonna stop contributing to the problem while I figure out how to solve it. Stop the bleeding. You got to stop. You can't solve a problem while simultaneously creating it. So just if you don't do anything else today, just make a decision. I'm not going to borrow money anymore because right now it's just caused me to get into this situation of disarray. So I'm going to cut it off. I'm not borrowing any money. And that's kind of your baby step zero. That's me prepping, right, to get ready to do this thing. So now this is like the subterranean level, George. So if I'm playing devil's advocate, I'm that person. I'm going,

well, Jade, I've been living off of my credit card because I don't have money. How am I going to do this without going further into debt? I think the next step that brings us to our next step, which is kind of the subterranean, is the budget. Because if you can create a budget, you can see where all of your money is going. And most of our disarrayment or most of our frustration around money centers from we don't know where it's all going.

We get this paycheck, we go to work every single day, we get a paycheck, and somehow we still feel like we're living paycheck to paycheck. We still feel like we can't make ends meet. And it's usually because we're just spending our money haphazardly. And I always say your money is expensive. Like you, the paycheck that you get, think about everything that it costs you, right?

It's costing you time away from your family, less sleep, time away from the things that you want to be doing possibly. Let's treat it with care because it's very expensive and it costs us a lot. So treating your money with care means getting on a budget. You don't just think about if you went, George, think about if you went to the mall this week and you bought that brand new Louis Vuitton bag. You know me. Three thousand dollar bag. Are you going to just go into your home and just take it and just toss it across the room and let it hit the corner of the closet and just be there next to old tennis shoes.

And no, you're not. You're going to like dust it off and put it on a nice shelf. You know exactly where it belongs. It's the same thing with your money. If you get a $3,000 check, you better treat that thing with care. Don't just toss it around and hope that it ends up in the right place. Organize it and put some care into it. And that's what you do with a budget.

And you don't have to be like a giant Excel nerd. Luckily, we created a budgeting app long ago that is amazing called EveryDollar. So all you do is go to your app store, go to EveryDollar.com and just list your income digitally. Type in your income, type in a few of your expenses. We guide you through this. You don't have to be a financial prodigy to create a budget. That's right. You just have to be willing to pay attention. Yeah. I love EveryDollar because I know for me, I'm like, oh, I hate doing math. It just felt, it feels like math, George. That's why you wrote a book called Money's

Not a Math Problem. That's right. And every dollar does that math for you. It does all the equations, everything like that. It truly, you can build a budget. You know what stresses me the most? When Excel, when you hit a cell the wrong way and it's like, formula's messed up. And I'm like, I just quit out of Excel. I can't handle it. I don't even know about that because I don't even log into Excel. It ruins my day. There we go. So that's a good step though. We got to get current on the bills, stop borrowing money, get on a plan. That's called a budget. And then what? Well, let's start looking at some of the symptoms that you're experiencing. Because if you're like Destin and you call in, you think the problem is I owe the tax guy $300, but that's just a symptom of a bigger problem. So I kind of

wrote this little list here, George, that are symptoms that you might need a financial plan and that you might need to get on the Ramsey plan. If you're kind of circling, you know, you kind of been hanging out around the cooler, the water cooler, but you haven't dove into our plan yet. So number one, if you're feeling confusion about your finances, if somebody talks about your money and the first emotion you feel, it's kind of like fear or frustration, anxiety, confusion, that's a sign.

It's like when I'm in a conversation about sports, I start to get a little sweat on the brow, like they're gonna find me out in no time. That's right. That's a symptom of a bigger problem. If small bills, $150, $200, if those are stressing you out, that's a symptom. Okay. If your mortgage payment or your rent payment is a strain, that's a symptom of a bigger problem because that should be a blessing, not a burden. If you're considering extreme options to deal with what should be minor problems,

like this guy, he's considering a 401k loan to pay for a $300 tax bill. If you're going to rob yourself or turn to more debt to solve the problem, you're in a drastic situation. You need to pause. That's good, George. You're using debt to pay off debt. And then finally, and we talked about this, if you're not on a budget, these are all symptoms of much, much bigger problems. And so those are kind of, that's kind of like the subterranean level before you start the baby steps, like recognizing those symptoms and saying, hey, I need to be on a plan. Okay, I'm going to do what George said. I'm going to

get organized. I'm going to find out what I owe and I'm going to stop borrowing money. And then I'm going to get on a budget. Those are the things. That final step, you got to find out what I owe and I'm going to stop borrowing money. And then I'm going to get on a budget. Those are the things. That final step, you got to figure out how to spend less and make more. And that's called margin in your budget. Now we can start saving up the $1,000 emergency fund and getting rid of our debt. So join us if you want to crash course on money. RamseySolutions.com slash events, Total Money Makeover weekend.

Go check out EveryDollar. It's a free app. And all of that's just going to help you win in 2024. That's what we're here for. Yeah. And when you come to that realization, it's worth doing that subterranean work because then when you actually start working the baby steps, you know why you're doing it and you understand why and how it's the solution to your problem. This is The Ramsey Show. This is The Ramsey Show, taking calls about your life, your money. I'm Jade Warshaw. This is George Campbell. Let's go directly to the phone lines where we've got Lindsay in Detroit, Michigan.

What's going on, Lindsay? Hi. My husband and I just had our second baby last fall. And now this year we're going to be looking at paying about $16,000 in daycare. Yeah, we were already pretty much feeling like we were paycheck to paycheck. And it just kind of seems like everything's hitting at once now. I just I don't know where to start in regards to like budgeting. You know, we also have other debt that we're trying to pay off, but at the same time, our savings account is dwindling every month, and I just am not sure how to tackle everything. Yeah. So are you guys using a budget or not yet?

We're not. We kind of just started going into, you know, printing off our bank statements and labeling everything and going from there. But I know if we really want to save, we're going to actually have to itemize every single thing out. It's going to help. Like being on a detailed, I always say a good budget is detailed, realistic, and flexible. And so of course I'm going to recommend every dollar for you to budget with because it's easy to do all three of those things. And when you're heading into a new stage of life where not only is day to day life changing, but like the way you're spending your money is drastically changing. That right there can give you a big sense of control and a big sense of peace over what's going on. see it, you know, digital paper, being able to see it there all laid out and have a very clear number of what you need in order to make it work financially, that can give you a lot of peace.

So just hearing your situation, I think getting off of here and making sure that we connect you with every dollar is the first thing. Second thing is let's look at your income and let's see if we can determine what it is that you need here on this call. Yeah. What are you guys bringing home every month? I make about $60,000 and my husband makes $45,000. Okay, so $105,000 total. And then what's your take-home pay every month once it hits your bank? I would say about $3,000 for me in the checking account and I put $600 into the savings every month.

And then his varies a little bit, but it's probably around $2,000 a month. Okay. So about $5,000 a month, and then you're taking out some for savings and some other things. Are you guys contributing to retirement at all? We both are. His is minimal, I think about $150 a month. I am doing 12% right now, so I'm at like $650 a month. Okay. Well, we just found a way to free up $800 in your budget every month, so congratulations. And you'll get back to investing, I promise. You both will be at 15% instead of struggling to get to 15% from both incomes. And so what we need to do in the meantime is focus on one thing, because you're telling me, I'm trying to put some in savings. I'm trying to invest. I'm trying to pay off debt. We got to cover the daycare. You're doing a lot at once, and it's going to feel like

you're never going to make progress. So we would encourage you to walk this through the baby steps, which is one thing at a time, focus intensity. Let's get $1,000 in savings. Now we don't touch that unless there's a true emergency. Now we're going to focus on just debt payoff and not invest for a little while until we get to debt freedom. Then we get the fully funded emergency fund. Now we're investing again. So that's going to really help you guys out. If you pause savings, how much do you have in savings right now? Like maybe 4,000. Okay, good. And how much debt do you have? We pay about $700 a month in student loans.

We have $10,000 on a HELOC. We have about $5,000 in credit cards. And then our mortgage payment a month is about $783. So the student loan, can you tell me how much the big balance is? The big balance is probably $40,000 to $45,000. And you're paying $700,000? Yeah. Is that the minimum or that's just what you choose to pay? So we actually had to refinance that with a bank a few years ago because we were paying 12% like privately. So this is just our payment a month and I think in I think that maybe balloons in about eight years so it's a private loan yeah okay um okay so to George's point doing one thing at a

time so you've already got the thousand dollars saved which is baby step one you've got three thousand above that saved so in walking through the baby steps and I'm just going to tell you what it is for right now and then we can go back and hit any objections and clarify it. So based on the baby steps, you keep the $1,000 aside, and then we take that $3,000 that's left, and we throw it out our smallest debt. Now, in this case, it could be the $5,000 credit card, or if you tell me that this student loan is broken up into smaller chunks, it could be the student loan. Is it just one big loan for $45,000000 or is it a couple of loans squished together? There's a big one for $45,000 and then there's maybe three or four that are around $1,000 each. Okay. So what I'm doing is I'm going to do the three or four or the three that are $1,000 each and I'm going to knock those out really

tomorrow. And I'm going to have $3,000 less of student loans. And it might seem minimal on paper, but I can tell you, and I think you know this, it's just nice for that list to get shorter. Like, it's just nice to say I had four student loans and now I only have one, right? So that's going to feel great. And so now all we're doing here is we're just listing the debts, smallest to largest by balance, and we're paying them off one at a time. And what you're going to find is when you pay off those three little ankle biters or, you know, four little ankle biters, it's going to give you so much like, oh, yes, like it's gone. Like, oh, I can do it. And you're going to realize like, listen, I can keep going.

And so that's how that works. And then once you quickly, as quickly as possible, get this debt cleaned up, then we're going to stack up that savings to six months, three to six months of expenses, basic expenses. And then you're going to feel like nice and secure and like, OK, I've accomplished something. Then we're going to rev back up that retirement. And now we're going to start back again, contributing to retirement. And you're going to do 15 percent of your gross monthly income every single month, more than you've ever put away before. And you're going to make up the difference from the time you lost because it's probably going to take you, oh, let's see, 45, 55, 60. It's probably going to take you maybe, depending on how crazy you guys get, maybe it's going to take you two, two and a half years to pay off this debt and get out of this. Two and a half years is nothing. It's a drop in the bucket to be free at the end of it.

Yes. So that's it in a nutshell. Now tell me your objections. Well, the one, or I guess my biggest fear about the savings account is, although I'm putting, you know, 600 in a month, it also seems like there's that one or two weeks during the month where it seems like everything's coming out and I end up almost transferring all of that one or two weeks during the month where it seems like everything's coming out and I end up almost transferring all of that back into the checking

account every month. And that's because you don't have the budget. What happens, what you're describing is something so common. I have experienced it. Maybe, George, you've experienced it, is you get excited and you're like, I'm adulting. I'm going to put some money aside for savings. But because you didn't do a detailed budget, you truly didn't have the $600 to put aside. And as the month starts to flesh out, you realize, oh, crap, I actually needed that money. Then you go pull it back out of savings and it just deflates your whole feeling of trying to adult. So if you just start with the budget, then you'll actually see, listen, do I even have money to put aside for savings? In your case, it's possibly in your case, you probably do, but because you're not on a budget

and being very clear about every dollar that you're spending, it's getting spent in another category. But in this case, you don't need to put aside another dollar for savings. Right now, all of your dollars need to be going towards paying off these debts. You got $4,000 saved. Like I said, whether or not you're going to go off this call and dwindle that down to $1,000, that's between you and God and your husband. But at the very least, from this point on, put all of that extra cash towards debt. Don't keep putting it towards savings because you're losing valuable time that you could be using paying off this debt. Okay. And that daycare will become a line item in the budget. And so that's what I love about when you start that every dollar budget,

you're going to say, all right, we need $13.33 a month to cover daycare for this month, correct? Yep. Okay. Well, we just showed you how to free up $800 because we're pausing investing right now. We showed you how to free up $600 because you just are going to pause all that saving. And so anything beyond your basic expenses, food, utility, shelter, transportation, daycare, insurance premiums, everything else needs to go toward your debt. Yeah. Okay. And listen, let me encourage you. Don't feel like you have to do it all because that's what gets you scattered and your money goes away quickly. It's almost like if you have this big jug of water, right? And that's your income. And you're trying to put a little bit of water in five different

jugs, which is debt and savings and retirement. And you're just pouring a little bit and then you have to go fill up the jug and you pour a little bit more. What would it look like if you just took that whole jug and you poured it all in the other jug of debt? You'd fill it up so quickly and then you go fill it up again. And then when it's time, you can pour the whole jug into savings. And then you fill it up again. You can go so much quicker

if you just focus on one task at a time. And that's really how you move quickly to get this done. Okay. This is The Ramsey Show. You're listening to The Ramsey Show. And thank you for listening to The Ramsey show and thank you for listening to the ramsey show by the way if you enjoy this podcast this youtube channel uh the radio show we would love it if you did us the free favor of liking it subscribing it and of course sharing it whether you share it on your socials you send it in a text to a family member or a friend or a coworker, whatever that looks like for you, we sure would appreciate that

because it benefits all of us, right? It helps us in the algorithms. And of course, you sharing the message that hopefully we're sharing, which is a message of hope and freedom in your finances. So we would sure appreciate that. And George, our question of the day today is brought to you by Neighborly, your hub for home services. Almost nothing can ruin your day faster than a plumbing emergency.

Show you're right. For over 50 years, Mr. Reuter Plumbing has been helping homeowners with upfront pricing and the most stress free plumbing experience possible. So go to Neighborly dot com slash Ramsey to find a locally owned Mr. Reuter Plumbing. Today's question comes from Andrew in Texas. He says, I'm a 27-year-old Army vet in graduate school, and I received compensation due to disabilities that happened in the service. My parents are divorced and both have provided for me and my brother in the past.

My dad recently asked me to help pay $1,800 for watch repairs. Wanting to both please my dad and out of fear of emotional backlash, I did so. But I complained to my mom about it because I needed to vent. Mom texted dad about my complaint and he guilt tripped me by saying, how many cars have I provided for you? And said, he's, quote, tired of the one-way street of giving. Do I owe my dad anything? If not, how do I go

about saying no to financial assistance requests? Oh boy. I wish Papa was on the line right now. There's a great quote about this. I can't think of it, Jade. It's like uncommunicated expectations equals future resentment or something like that. Listen, that's a great quote. Let's go with that. I just feel like this dad in this giving, well, I gave you all these cars when you were younger. I wish my dad told me, hey, son, I'm going to give you these cars, but one day you're going to owe me some money. And when I ask for any money, you just have to give it to me. That's part of the deal. And I'd say, then I don't want these cars, dad.

This is a very awkward situation uh from dad i don't think it's fair to the son you don't owe anything to your dad no if he chose to buy you cars over the course of your you know from the time you were 16 until 27 he made as a grown adult yeah and by the way just as a parent the one-way street of giving when we have kids we are called to we're their steward like we we get to be in their lives and steward them and teach them how to be adults and raise them up to go into the world it's not about us getting something back at the end of it in return if you go into it like that listen you're setting yourself up for some dysfunction which is what's taking place right here can i just offer a hot take i don't think parents should ever

ask their kids for money i don't either is that is that like very controversial listen the the no it's not george the only time i'm thinking listen i'm trying to think of every possible situation my parents have never asked me for money. No. I can try to think back. I don't think it's ever happened. If I was in a situation where I'm just, this was not my situation, but if I grew up maybe in a single, where there was a single dad or a single mom raising, if I was 16, if we

were maybe in a part of the country where it's just been really tough, there's not a lot of jobs, or maybe we're trying to break a cycle, like we're in a part of the country where it's just been really tough there's not a lot of jobs or maybe we're trying to break a cycle like we're in the midst of trying to break a cycle i could see it's like hey help support this family if you wanted to help support the family and help break everybody out i'm not mad at um the idea of it kind of being a family effort in certain situations but give me eighteen hundred dollars to fix my watch or it's more like listen i'm 16 i got a job at mcdonald's i'm trying to help my single mom make rent and junior decides to give some of that money listen i'm not mad at that but eighteen hundred dollars to fix my watch so i'm trying to think if i'm and, I got to approach my dad. I probably say something like, listen, dad, I'm so grateful for everything you did for my brother and I to

raise us, to give us a great home, to provide for us in this way and for all of the past support. But here's the deal. I'm limited now. I'm trying to approach my own financial goals and prioritize my financial wellbeing. And as much as I want to give, I can't do it financially. And I have to set this boundary and prioritize my needs right now. And zero apologies given. And you don't need to say, I'm so sorry. I'm a terrible son. Don't let him guilt trip you. The relationship isn't worth that. And truly there's not much of a relationship if it's based on this financial transaction. If this is the make or break for him talking to you and being involved in your life, I'm sorry.

But you had a dad and now he's become someone different. Yeah. And clearly this has happened before because he already has the, quote, fear of emotional backlash. Like this is, he already kind of knows what this is going to look like. So you can offer him other ways of support of, hey, dad, I'd love to sit down with you and look at your budget. If he's willing to do that and you want to sit with him and walk him through some numbers and show him how to afford things and maybe gift him a book that'll help him, that's great. But you're not going to sit here because you know what happens? He gives him $1,800. He's going to be getting hit up next week. No. Yeah. Yeah, that's right. That is so,

so true. Yeah. I think that's why I never give to the alumni foundation, Jade. All of a sudden they're hitting you up. They marked me on the list going, this guy's got money. That's so, so true. That's hilarious, George. Yeah. This, this situation, this just makes me mad, man. I'm going to cross it out. Not okay. Don't do this to your kids. Yeah. Uh, yeah. Andrew has nothing to feel bad about. All right. Let's go to the phone lines. We've got Thad. I'm guessing short for Thaddeus in Los Angeles, California. Was I right about that, Thad? That's correct. Yeah. Hey, love it. What's going on? Yeah. Thanks for having me. So I'm a 28-year-old, over-employed software engineer. I'm single, I'm very happy with my income, but there's two main

things I'm hoping to address today. The first thing is, um, I'm happy with the amount of money I'm saving every month, but, um, the amount of money I'm spending is concerning and it gives me like a little bit of anxiety to think about it even though it's sustainable it's like um i'm worried if i just want to know if that's valid anxiety or you know if yeah you know if you make more money it's okay to spend more money how much do you make right now i make 230 000 great how much are you saving right now now, it ranges between $5,000 and $6,000 a month. Okay. And that's after everything, after discretionary and needs and wants.

Is that in investment account, retirement accounts? It's mixed. I have most of my money in a brokerage, and I have some money for O&K. So you're investing anywhere from 25% to 30%, it sounds like. At least. Okay. Do you have any debt? I have a car loan, yes. How much is left on the car loan?

$40,000. How much do you have in cash? $10,000 in the bank. And you have money in the brokerage account. You could pay off the car today. Yeah, I have $60,000 in the brokerage, $10,000 bank, $10,000 in the bank. And you have money in the brokerage account. You could pay off the car today. Yeah, I have $60,000 in the brokerage, $10,000 bank, $10,000 401k. Why haven't you paid off the car? Why are you hanging on to the loan?

Good question. Is that part of the anxiety of spending? Is your body's kind of keeping the score going, I owe people money. This car is going down in value while I still have this $40,000 loan. It's definitely possible. And the monthly payments, like, you know, it's fine. But, yeah, it's like, it sucks.

Would your life be better without that payment? Probably, but also it's nice to have $40,000. But it's not really yours. It's not really yours. You have to do the full math. You have to do the full math. What you own minus what you owe. That's right.

That's your net worth. That's a much better scoreboard than a credit score or how much you have in a bank account. Right, right. What other debt do you have? That's my only debt, yeah. Okay, and so you said you're investing 25% to 30%. Right, right. What other debt do you have? That's my only debt, yeah. Okay. And so you said you're investing 25% to 30%. How much are you spending as a percentage?

On... Are you spending five or six grand a month? Yeah, so I think I spend on everything about 60% and I save 40%. So yeah, 60-40 right now. Okay. Are you doing any giving? No. Okay. Are you doing any giving? No. Okay.

I think that could be part of it. And I'll tell you why. I think there's only three things you can do with money. Give, save, and spend. And you've got a flat tire right now. You're great at saving. You're great at spending. I think giving could unlock something for you.

And I do think we've got to rein in the spending and go, why am I doing this? Is it emotional? Is it retail therapy? Do I need some friends? Accountability? A lot of reasons for that. That's good. It's not lifestyle creep if you're doing all the things you should be doing with money. You're on a budget. You're saving for retirement. You are paying off your debt. You're practicing generosity and you carry the proper insurances. If you're doing those five pillars, it's not lifestyle creep. It's just living your life like it's golden. This is The Ramsey Show. We'll see you next time.