The Ramsey Show - App - Nobody Builds Wealth by Accident

Episode Date: February 12, 2025

Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with bestselling author and my good friend, Jade Borshaw. And we are answering your questions. So give us a call at 888-825-5225. We'll be talking about your life, your money, your relationships, your careers. All of it.

Anything and everything, we are here for you. So first off, kicking us off this hour is Jocelyn in Lubbock, Texas. Hi, Jocelyn. Welcome to the show. Well, for taking my call, how are you doing? We're doing great. How can we help? Well, actually, my husband and I have been together for 26 years. We have three sons, and he works as a software developer, and I'm a stay-at-home mom for 20 years. And he handled all the monies and I take care of the kids. So it worked quite well until eight years ago.

I kind of expected him to step up for our twin son, but that didn't happen. So I wasn't happy and then our marriage turned out. And then since then, I no longer allowed to know the household finance. He gave me a credit card to buy food and necessity for the kid and, you know, for the family. But I don't know how much he makes anymore. And he doesn't even ask me to sign the tax return filing. So, I really don't know what's going on. And I asked him, well, during the COVID, he almost died at the hospital. And I asked him, you know, the password to pay the bills on his laptop.

And, you know, he refused to do that. And then I had to bring his laptop to the hospital. But then after he got better and he got home and I told him that, you know, I should know our finance. And just in case if he goes to the hospital again. And he said, you know, he said I will figure out after he dies. Oh, my gosh. Yes. So we have been living like a housemate. And I take care of the kids.

And like a married single mom. And he's like a married bachelor to check out. So I don't know what I should do from this point on. And, you know, this is my only marriage. And I have, you know, like, I think this is it for me. But then I don't know how to turn this thing around. Yeah. I'm so sorry.

Thank you. How old are your kids? My oldest one is 16. It's going to be 19. And I have twins. They are going to be 16. Okay. So, I mean, they are probably getting out of the house soon.

Yeah, I mean, at this point, Jocelyn, from the information you've given us, to me, this is way more of a marriage issue. I think the effect and the symptom is that he's isolated himself with the money, which is a problem and above itself, but it is a symptom of what's going on from the root of your marriage. And so, like you said, which I would agree, the context clues you've given us is exactly right. You don't have a marriage, right? I mean, like this is not a relationship where there's a partnership and there's two people doing life together. You guys have two completely different lives is what it feels like.

And you just happen to live under the same roof. Well, the problem is I'm the only person who lives in this country. So I think he sees that as I have no support system. So that may be the reason why he can take advantage of my situation and I have nowhere to go I mean and I have been you know being a stay-at-home mom for 20 years do you have I do uh-huh do you have friends do you have anybody here outside of family that you rely that you can trust I can talk to anybody but if they're a good listener but not really you know practically could be helpful you know like in the deep situation but I have a lot of friends I could talk to I mean they listen to my problem and they understand so you're not alone

but if you're not alone have you voiced this mean, aside from like COVID situations where it's really, you know, stressed or extreme, have you had this conversation with him, brought it up, not in the midst of an argument and just said, hey, here's the way I'm feeling. Have you done that? And what's been the response? Here's the thing. A lot of times he's very calm and soft, like quiet. Like if he can counter all the problems he will be quiet like

you know basically it's it's his way that i have to learn to adapt which i'm very flexible and adaptable but a lot of time it's like this is the way and i mean maybe he's willing to share the information of the finance he He was able to give me. He's clearly not because you don't have it. So he's not. And my worry is, is that he he has a level of control and power over you, Jocelyn, that is so scary and unhealthy where you have no options or choices. So I think one of the best things you can do is put yourself in a position where you

have options and choices. And so where that starts from a tactical standpoint is money. Because like you said, like I'm a stay-at-home mom, I don't have money. And so it starts to be very, very hard lines for me of you either give me full access to our money or there's gonna be a more intense step of something else. And I think Jocelyn, I mean, and again, this is your decision,

and I always, these calls, I feel like a lot of weight and responsibility because we'll get off with you here in about three minutes, Jocelyn, and you're going to have to make these decisions. Right. So what I am sensing and laying out for you, this is life-changing, and I want to just be careful of how I even, like, coat this, but I would be setting myself up possibly for a new life. People stay in marriages where they're unhappy,

but it's one thing to be unhappy in a marriage. You go through the ranks, you do what you can. It's another to have no power or control over your own life where they've taken that from you. And I feel like that's what he's done where you don't have freedom to make even a decision to leave at this point because you have no access to money or information beyond that. So I would be getting myself in a position for you to

get access for the money, not only just to heal the marriage, which I hope helps, but it just doesn't. To me, it seems like there's less hope of that turning around and probably more of a reality of you realizing, oh, my gosh, I have one life to live. And unless he's willing to do intense work in therapy and us walk through this together, which I would pray that would be the best. That's the best outcome. But would he ever do that? Would he ever go through it? Not for money, but for your marriage a marriage intensive therapy any he's really what he's very passive in life so it's either i am the one who is being the

you know the the lead and plan for everything for the household or nothing get done well if you planned it and said i have a therapist and i want to go every tuesday for the next nine months with you at three o'clock every tuesday would he go yeah okay that i mean that i don't know if i want that either why i don't know because it's it's to me i have so much accumulation of the grief anger or you know like it it I don't know I mean it's a lot listen what you're saying is I I think I get what you're saying like you don't want to open the can of worms right like there's a lot there and the truth is when you do go through therapy it creates it's almost like it creates more work for you to do more to work through it's not just like a quick fix right it's going to create more and more it the work is on me so it's like constantly so that's what the majority of the problem is yeah so i mean if i were you jocelyn you you need somebody

um i think a professional in your corner and go get individual work for you. Because like you said, you're harboring and holding a lot in life towards him, which makes complete sense why. And then I think over time, it's going to get more and more clear of what you need to do, either pressing more into the marriage or not. But I would be making some hard lines

to at least have access to the money. You have to have that in my head. I mean, that needs to be your first step. Whew. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family?

They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly

and not mess this up, or she's concerned how she's going to eat tomorrow. These are the two options. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282.

Well, tax season is right around the corner, and one of the best things that you can do for your finances is to get a good tax pro in your corner that you can trust. This is one of the areas of money that can be very confusing. And so making sure you do it right the first time is important. So having somebody that you know is able to help you is really, really key. And so yeah, these tax pros are going to really help you figure out the best moves for your situation, especially if it's a little confusing. If you have a small business, if you've had major changes this year, if you've moved, had kids, got married, all the things. So go to ramseysolutions.com slash taxpro to find CPAs and enrolled agents that have been vetted by the Ramsey team. Again, that's ramseysolutions.com slash taxpro. Next is,

is this Isaiah? Yeah, from San Antonio. Hey, welcome to the show. Thank you so much for taking my call. Absolutely. Thanks for calling in. How can we help? Awesome. So basically, um, I'm 18 and I got married this year in January and I, um, I'm, I'm super young. I own a home service business with my actual twin brother. So both 18 and, um, we've been running this for about a year and a half. And I just want to know if I should maybe look at getting a traditional job, um, because there is an opportunity for right now, uh, to make more money. And, uh, sorry, I didn't mean to cut you off. I thought you were finished. Keep going. All good. Yeah. So I just want to know if maybe looking at getting a traditional job would be a better idea just for consistent income. I also moved out this year.

So maybe, well, late last year. So basically this year, but all kind of happened at the same time. So I have a lot more responsibility, a lot more bills. And I just want to know if maybe getting a traditional job, specifically something in sales where I'm something I'm already really proficient at, where I have the opportunity, you know, to make a lot of money. I just want to know if maybe that is a better avenue to take than continuing to grow this business, especially with the, you know, inconsistencies that can often come with small businesses. Maybe. I mean, what are you making right now

and what are you guys projecting? So right now I make anywhere between like $500 to $700, sometimes on a good week, $1,000 a week. Okay. And, you know, it's not a lot. We pretty much, we split most of the income down the middle, me and my brother. And, you know, we leave some for, you know, bills and leads and, you know, all the overhead that we have for our business, which is pretty minor.

But you personally take home as your pay somewhere between $2,000 and $4,000 a month, is what you're saying? Yes, ma'am. Yeah. And it fluctuates very heavily. But it fluctuates between the $2,000 and $4,000? Yes, ma'am. Yeah, I would say. How long have you guys been doing that? About a year and a half now. Okay. And what are the other options? You said, should I get a better job in sales? Do you have ideas of what that might look like or has someone offered you something? Yeah.

So I got an offer like a while back for a car sales position. And then I've also done my own research and looked into different sales positions from companies that are kind of similar, honestly, to what I've been doing already, like selling. So like, you know, roofing and, you know, stuff like that. Yeah. Does your wife work? Yes, ma'am.'am yeah she does what does she bring home uh she brings home so she makes uh she just recently got a raise so she makes 17 an hour and she works full-time so okay per month what would Um, I would say, uh, I, uh, like, I don't know, maybe like, uh, $2,000 max. Go ahead, Rachel.

For your household, for you guys, as you said, you have a lot more responsibility because you've moved out. You guys are on your own. Um, how much does it take to run your household per month? Have you guys done a detailed budget? Yeah, so we don't have a super detailed budget. We've only really been home from like our honeymoon for like three weeks. But, you know, it's roughly, you know, the bills for like, you know, rent and utilities and pretty much everything that we have to pay the company that we live under is around $2,000 a month. And then, you know, obviously gas and everything else is probably

a couple hundred dollars a month. And we know groceries is roughly at least $100 a week. Okay. So I think what would be driving this for me, this decision is number one, knowing and doing a detailed budget and before you get off the phone we will hook you up with some stuff to for you guys to sit down as newlyweds and figure this out um because you know you if so what would drive me number one is making sure that i we can cover everything we need from food utilities transportation all of that um and do you guys have any debt no more neither of us have any debt. Okay, great. Yeah. So just knowing, hey, this is what we need to live off of.

Can we live off of this with me doing this small business and you and your wife working? And if this is a small business, the other caveat is, is this where you want to be long term? Like if you looked up in five years, do you want this business to grow? Is this what you want to do? Is this what you enjoy? Yes, ma'am. Yeah. So I do enjoy what I do. Like, you know, obviously the home services itself, like the pressure washing and window washing is not really like my preferred, like, I don't think anyone really like loves, loves that. I mean, some people do, but you know, running a business, I do enjoy it, especially with my brother. Um, you know, we have a good time and we work hard, but you know, I also wouldn't wouldn't mind you know doing something else job it's always been okay yeah that's what I didn't know if there was something you were doing that was a passion and you were

like this is what I want to do for the foreseeable future but if it's kind of like a it's fine and it's fun to run a business and you can make more somewhere else I mean why not do both it feels like from what you described especially based on the pay pay and the like some timey nature of it, it feels like it could be more of a hobby side hustle as it grows smaller load so you've still got I don't know a thousand bucks coming in a month but you're still doing another full-time job yeah that actually I've never even thought of that and that's a really good thought just because he already like he almost takes a more lead role in the business anyway just with his I don't know he just he just has, he's just been more kind of hands-on always than me. Um, and so I've actually never thought of that, you know, almost me just taking more of a, a backseat and just doing it as a part-timer side hustle, you know?

Yeah. I like that idea because at least you have some stability. It's almost like you can keep doing this until you land the thing that you want to do. And then you can pull back on that, but it still serves as a really great side hustle because you guys are just getting started and there's a lot in front of you so being able to stack up cash and kind of just like get the wheels going I think is going to be good and I like what Rachel said about really deciding long term what that looks like like what your wife wants to do is their school or any sort of training in the future that you might need to pay for? So really stacking up money in this phase is also really good. Yeah. And this is jumping a little bit ahead, but something to think about because the business is small, so you guys may

not. But just know, small business, especially when there's a partnership and especially between brothers, if this thing starts to scale and you guys start doing this long term, I would have some very formal documentation right up, even sitting down with like a business lawyer to make sure that the terms and everything, ownership, stock, I mean, anything that you guys in the future, if this starts to become bigger and more long term that you really want to think about, because sadly, I think people get into this, you into this small business with a friend or with a sibling and it all is great and fun and then it starts to grow. And then we just see anything with money or business when you're with someone close, the more communication, the more that you lay out

ahead of time, the less messy it gets down the road. Because I just don't want this to hurt a relationship down the road. That if he feels like you're not doing as much but he's doing it all but yet you still have 50 ownership but you know what I mean like just talking through all the agreements and all the situations exactly what you're talking about like me and my brother we're twins so we have a very close relationship but there's even times where this has put a lot of strain on our relationship just because there's a it's especially since we both have bills we both have responsibilities there's a, it's especially since we both have bills, we both have responsibilities. There's a lot kind of in balance. Yeah. And Isaiah, and maybe one of these things you look up and you're like, Hey, he can take it and own it and he, and you can get paid out and then you work for him for a season too. That feels better to me already. Yeah. Cause I'm

going to be honest before, like he started it initially himself, um, before I ever joined him and, you know, quit the job I had and came and started working with him. Yeah. And before I ever joined him, uh, he was making a lot more than he's making now, which is sad to admit that, but, um, you know, a year and a half, we've really grown, you know, that we've just like blown it out of the park and we're like so happy. And so for sure. Yeah. Sorry, I have to cut you off.

We're going to a break, but yeah, I would have that conversation with him and maybe there's a sense that he owns it and you work for him making some extra money this is the ramsey show hey you guys health insurance costs are only moving one way and that way isn't down and if higher costs aren't enough the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion

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student loans like Sally Mae. So learn how you can customize and refinance your loan and all your options and they love some payoff option that you can qualify for for after 24 months so go to y refi.com slash ramsey that's the letter y r e f y.com slash ramsey may not be available in all states all right today's question comes from sh in Alaska. She says, how do I save up for a divorce when I'm in debt? I separated from my husband of eight years after he committed multiple incidents of financial infidelity. I've since increased my income to 100,000, which was what we brought in combined when he could work. The problem is that we have tons of debt, including money owed to the IRS and credit cards. The house is in my name only, and I don't want to move our kids out due to their current schools. Do I treat saving for a divorce as a sinking fund, or should I pull from my retirement so I don't have to spend more time in this marriage? That's a really good question. The good news is you are making money, like you're making a good living,

not just for a married couple, but for a single person. So that's a good part of it. It sounds like you're spending a lot of the income on whittling away at the debt, if I understood that correctly. So I would pause that. I would pause whittling away at the debt because the truth is once you get divorced, the assets are going to get split. The debt's going to get split.

And I don't want you paying more than your share at this point. Plus, you've got to pay for the divorce. So, yeah, right now I treat this like storm mode and I would stop and I would save up. And I'd really kind of put my feelers out there and find out, like, how much is this going to cost me? How much can I save up for it? And it doesn't say whether or not they're separated. Oh, she does say I separated, okay. So I would kind of take my time

and make sure I have the money because it sounds like you're in your own life at this point. The paperwork just hasn't been done. And so rather than go deeper into debt, yeah, I'd save up for it and pay as you go. It's not like you have to have the entire lump sum all at once. Yeah, and especially depending on who you hire to have the entire lump sum all at once. Yeah.

And especially depending on who you hire to help you with it, if they want to retain her or whatnot. So I would say that. And depending on the states, I mean, divorces, depending on the state, have different clauses. And it depends really state by state. But usually with the assets, yeah, it'll be split, including the debt. And so what that looks like from keeping kids, like you taking the house, meaning less assets,

you have to make sure the debt is all paid, but keeping the kids in school, all of that. And we get that call a lot of people that have taken on. I got this call with John Deloney last week, and she took the house to keep the kids in, and she can't afford the mortgage anymore. Yeah, it's tough. So there's a lot. Money is just one factor of a divorce when a marriage ends. And it's just horrible and terrible for everyone around.

But making sure, Shannon, that you're setting yourself up well. And that especially in something like this, that the emotions don't drive all of this. Because that's where some people get into financial trouble. They want to protect the kids, which makes sense and if you can absolutely um but also i want to make sure that you're doing logical things to set you up well where you will have more peace and less stress when it comes to money after the the smoke clears with this but i'm so sorry you're going through that shannon that's just that's that's so difficult up next we we have Aaron from San Francisco, from the Bay Area. Hi, Aaron.

Welcome to the show. Hey, thank you so much for having me on. It's a pleasure to speak with you. Absolutely. How can we help? I'll do my best to be brief and succinct here. Essentially, my wife and I have been presented with an opportunity by my in-laws, her parents, to take over a business that they've built

very successfully. And the caveat to it that is making us a little uncomfortable is that they're offering half of the business to us, half to her brother, where they would essentially gift us half of the value of the business, which has no debt. We would owe them back for the other half, but we'd be in partnership with her brother. Now we love her parents, love her brother. As a family, there's no real issues, but we both come from family businesses that we've seen just create a lot of turmoil

and a lot of pain kind of in both of our families. And so when we got married, we swore that we would never go into any type of family business. It would never be something that we would pursue. And then this opportunity came up and we want to be wise. We've worked really hard to get out of debt,

have been longtime listeners and adherence to, you know, to Ramsey's baby steps. And so we just feel like, man, are we going backwards by jumping into debt and going into a family business? Yeah, so I have a question. Her parents, yeah, it's their business. And let me make sure I understand the terms correctly.

Are they needing you to buy them out, basically, for them to retire? Or are they gifting you all the business? Like, are they basically going to put you guys as owners? Yeah, they're essentially gifting us half the business, and then we would owe them back for the other half of what it's worth almost as if it was a kind of an early inheritance essentially they want to you know my mother-in-law has expressed I you guys are good kids you work hard I'd like to help you out before I die and I think they're looking for a way to to do that so they are they owning so Aaron are they owning half and then you all and the brother have half? So you basically have like a third?

A third, yeah. Or is it that the brother has the other half and you all have the other half? Yeah, so we would owe mom and dad back for 50% of the appraised value of the business. And then my brother-in-law would own a quarter. My wife and I would own a quarter. Okay, so you and the brother together have to, you guys owe together 50%, so you're 25 and he's 25. How much is that? Yes, ma'am, that's correct.

How much will that be? Yeah, it'd be about $4 million that we would owe back, and then they would be gifting about $4 million. So your cut of that's $2 million, you and your wife's cut? Correct. Okay. Yes, ma'am, if we decided to sell the day that the deal went through, which they've expressed, if that's what you guys decide to do, and you want to stick a for sale sign on the ground

the second the ink's dried, then that's your prerogative. But if you didn't, what's the projection on being out of debt? Have you run the numbers to see, okay, if we did this... Yeah, what's your cash position now you and your wife um so not two million dollars that's for sure not not whatsoever i mean we we're doing you know i think okay but um you know just maybe a couple hundred thousand yeah i think i honestly the cleanest way um that i see going forward be, would the parents consider just selling the business and then giving you guys part of the inheritance early in life where there doesn't

have to be this ownership loop that happens? Yeah, yeah. That's kind of another piece of the conversation that we're looking at, but it looks like they're leaning more towards because it's a family of business owners. I think they like the idea of giving us an opportunity to grow a business. But do you like that business? Is it your passion as a person or your wife's? No, truthfully, no. I wouldn't say that it's a passion, but we're passionate about the opportunity. Well, what kind of business is it? What is it? It's like a real estate company, essentially. Okay.

So what you're... Sorry. Oh, no, I'm just, I mean, what you said is really profound to me because what you're interested, you're interested basically in the money, but you're not interested in the work, like the type of work that it is. And I mean, I get it, but I don't think that that would be a good reason. I feel like that's the recipe for disaster as you get into this. It's not what you love. It's not what you're passionate about. The business suffers. You feel some type of way because you're having to carry this thing that you didn't really want, right? You just cared about, well, yeah, it feels nice to have the stake.

Like there's a possibility to really have a lot of money long term. But I like Rachel's plan a lot better to sell it. Well, so, Aaron, there's there's a one you know, there's a way that this all works perfectly and everyone's great. That's just a very small percentage of all the things that can go wrong. And when you start adding the layers of complexity from the parents still have 50% ownership, you have 25%. There's a brother that has 25%. It's in an industry you don't know. And you owe on top of that. You're having to pay your way out of it over time. And again, people do this and it works, but it's such a small percentage of nothing going wrong from a financial or a relational aspect. And so, you know, what I would do, it would be unfair for your wife to be cut out of a deal from an inheritance standpoint where the brother

somehow gets it all because he wants to take on the debt. So you guys, I mean, honestly, with this amount, because we're talking about a $6 million deal here. So I would sit down with a family business estate planner and start kind of walking through, I want multiple options for you and your wife, Erin, where there's a level of fairness within the family, but also you have multiple options of what you guys can do versus just A and B. It's too big of a conversation to limit it to two, because I think there's other ways around this. And I would get a professional involved from a family business standpoint and estate planner. Sorry, Aaron. I know that wasn't cut and dry, but I hope that helps. Rachel, do you ever get these sketchy text messages that are like, hey,

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calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindeleteeme.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindeleteeme.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindelete me.com slash Ramsey. Make sure to check it out, you guys. Welcome back to the Ramsey show. I'm Rachel Cruz hosting today with Jade Warshaw. And on this show, we talk about living like no one else. So later you can live and give like no one else. And so this whole journey when it comes to your money and us talking about this so often, you know, there's a season of sacrifice of getting out of debt and saving up cash. You know, 40% of Americans can't cover a

$400 emergency in cash. So even getting above that step, right? I mean, like there's like these small wins along the baby steps. And then you get to a point where you actually start to get to build wealth. And within that, you change your family tree. You have options and choices with your life. You get to be unbelievably generous. And, you know, that starts that that's the second half of this journey. So we always like to highlight some stories of people that have accomplished the first part. And as they move into that second part or living in the second part of living and giving like no one else, always get to talk to them

and share their story with you all. And so we have Rob from New York City on the line and he is a Baby Steps millionaire. Thanks for the call, Rob. Hey, how's it going? Doing great. Okay, so tell us your net worth right now. That's about 1.1 million.

Okay. And what does that consist of? So we have about, my wife and I combined about 480 in our retirement accounts and then 520 equity in our home. We have about $80,000 in paid for vehicles, $10,000 emergency fund, about 20,000 in paid-for vehicles, $10,000 emergency fund, and about $20,000 in miscellaneous investments. Amazing. Okay, so for your income, what was the worst year from an income standpoint that you guys made, and what's been the best year? I mean, when I first started my career full-time, probably about $50,000 income. And now it's $150,000. And then my wife probably started around $30,time, probably about $50,000 income. And now it's $150,000.

And then my wife probably started around $30,000 and is now $90,000. Okay, awesome. How old are you guys? I'm 33. My wife's 35. Wow, way to go. Well done. Was any of this money inherited?

Ironically, we actually just were gifted $50 fifty thousand dollars but that was after we hit our millionaire status yep so the inheritance did not equate or help in that sense advance it and what do you guys do what do you and your wife do i'm a police sergeant for a small city and my wife is a high school special ed teacher wow both just public servants, police and teacher. Yeah. Rob, you guys are literally, you're like when we do our millionaire studies, uh, the one, the recent one that came out, teacher was in the top five, uh, of millionaires. And so, yeah. And you guys, I mean, that, that's it. Uh, did you guys go to school? I guess she did obviously for teaching. What's your, what's your, um, do you have any higher ed? Yeah. So I actually, I don't, I don't

need any, uh, college degree for my career, but I do have an associate's, and I am going back online. My job is paying for it. Okay. And then my wife has a master's, obviously, as you can imagine. Yes. You guys are pretty young, I mean, to accomplish this. This is a major accomplishment.

So my guess is you've avoided debt, or did you have a big amount of debt to pay off? Tell us about that. No, I mean, I made some dumb purchases early on. I bought a new truck and a new motorcycle when I first started my career, but I quickly paid it off and then just saved and saved prior to buying a home. Wow. Well, it clearly that paid off like that, that way of life of getting out and staying out of debt paid off. Wow. That's amazing. that paid off like that, that way of life of getting out and staying out of debt paid off. Wow. That's amazing. Okay. So what do you tell someone? Cause you guys are in your early thirties, which again is so impressive. Um, because I think that there's, you know, it's,

it's, it's hard out there. And a lot of people feel this tension of either the paycheck to paycheck cycle. They feel inflation when you go grocery shopping, like life feels expensive and just keeping up for some people just feels hopeless. And they're just trying to get traction. And they look at you guys as like, oh my gosh, I could never imagine, you know, being at that state. So what, what encouragement do you have for people out there of kind of the American dream that it's still this ability that you get to make choices in your life. And, you know, from a timeline perspective it may be different for everyone but what what would you tell someone out there that wants to be you

guys in the next 10 years um just work really hard have a plan and live within your means that's all there is too and that's the secret yeah i mean truly though like we say all the time it's so true it It's a simple concept. The work is hard, but it's simple to talk about doing. Which I so appreciate it because, again, I think there's so much, especially on social media and everything. It's like this attention grab of what can I do today to get me something different tomorrow where I just make tons of money?

It's like this quick approach, but it really does come back to this common sense way of living of below your means. Know what you're doing, pay attention, stay away from debt. And it's incredible what you can do. Well, I love this example. They're 33 and 35 years old. They started out making 50 to 150.

I mean, for each of them, nobody is making 300,000. You know what I'm saying? And they're not in their 60s or even in their 50s. And so I really do think this is a great example of how if you just avoid debt and whatever debt you have, you pay it off as quickly as possible. And then it's just, all right, we're stacking, we're maxing out our 401ks, we're maxing out our IRAs. I mean. Yeah. So Rob, my last question for you is when we talk about building wealth, it is not to like accumulate dollars in an account, right? There's so much of our world and society that there's like such a pride and this like ego driven thing of like, what's my net worth, right? But doing it so that you're able to be generous and have margin to do things. So what has living life in this way in a common sense way with money that you guys have succeeded and are Baby Steps millionaires, what's the pro of it? What would you say is the advantage besides just

having money? I mean, really just having that financial security. We have two kids and one on the way. So just never having to worry about food and paying utilities. That's just big for us. We work just as hard as we do now with a really good income as we did when we didn't have a good income. So no matter what our net worth is, we just stay focused and keep working hard. Owning a home is insanely expensive, especially in New York. So people out there that questioning renting, you have no idea how expensive it gets until you start having to replace things yourself and paying insane electric bills. So it's not easy, but you have to just keep working hard and

stay focused. Yeah. So good. So great. Well, Rob, we really appreciate you calling in and sharing your story. I always think it's encouraging and hopeful just to hear from real life people that are doing it. So thank you, Rob, for your time. I so appreciate it. It's also, I feel like that call really cut through a lot of the stigmas, even the home purchasing part of it, where it's like, there was a lady that called in a couple of days ago

and she's like, we're millionaires including our house, but my husband says we shouldn't include our house. You know, that kind of thing. I'm like, just because you're, even if your home's not paid off yet if you still have the equity like that's still counting towards this so it's like yeah I mean it's still value yeah it's still value and assets and so I just love their story really good

yep so good um all right from TikTok Jade are you ready yeah a little TikTok action from Sydney okay she's asking is it worth consolidating debt if the interest rate is lower? I would not consolidate. I don't know if she's talking about student loans or just in general. No, she didn't say. We can make the caveat with student loans. Yeah. With student loans, even on that, sometimes I'm on the fence because let's say you have a total of $70,000 of debt, but it's broken up into little bits and pieces. On the one hand, if you're working a debt snowball, like that can be so motivating to say,

okay, like I just knocked out the $5,000 one and now I'm doing the $7,000 one. But when it's a big chunk, even though it's a lower interest rate, sometimes that can be very, very overwhelming. So part of me, it's kind of like your personality type on that, but for student loans i will tell you i tend to be one of the people that's like hey if you can go quicker and be motivated the interest

rate might not matter as much in the end because i know for sam and i our last student loan was a ninety one thousand dollars i was gonna ask how much i knew it was your largest one and it was one chunk and i was like shook i was just like no i don't want to do it I don't want um so that's probably the reason that I would take that approach obviously mathematically speaking you would say yeah if you can get a lower interest rate like do that but these consolidation companies like when we talk about like debt consolidation the ones you see at midnight yeah those are the worst I would never pay someone to do for me what I can do for myself, which is basically ask for a lower payment or get yourself on a payment plan. Those are all things you can do on your own.

You don't need to pay somebody a lump sum. You don't need to tank your credit in order to get a deal. Right. Like all of those things. So I would not use one of those like late night credit consolidation situations. Yeah. Yeah. And I think it is. Oh, it's a question we always get. And it always goes back to it's more than just math. Yes.

Right? From a mathematical standpoint, sure. But also from the motivational standpoint, totally different. And you actually can get out faster with better motivation and a better interest rate. So great. Well, Jade, thanks for the great hour. Fun. Thanks to all the guys in the booth.

And thank you, America. We'll be back. Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with bestselling author and my good friend, Jade Warshaw. And we are answering your questions about life and money and relationships, career, anything and everything.

So give us a call at 888-825-5225 and we will be taking your calls this hour. Up first, we have Maya in Atlanta, Georgia. Hi, Maya. Welcome to the show. Hi. Thank you so much. Can you hear me? Yes, we can. How can we help you today, Maya? I am terrified, to be honest. I'm expecting my first child soon. Congratulations. Thank you. I am in a very big hole. I'm considering filing bankruptcy just because that's kind of what's been recommended to me by a couple of friends. But I'm just more so looking for guidance because I don't really know where to start or what to do or if that's even the best option for my situation.

Yeah. Well, tell us more. How much debt are you in? A little over $200,000. Oh, wow. And what kind of debt is that? So it's kind of a mix. About $25,000 of it is strictly credit cards. $14,000 is from student loans. And then the remainder is pretty much delinquent, like previous bills that I am behind on or kind of got charged off or auto loans. Tell us about the auto loans. Okay. So I had a car rental business that started last year, but it's pretty much a failed business at this point because I'm not really making any revenue. And I've considered and tried multiple times selling the vehicles

and, you know, trying to trade them in. How many? But no one, there's five different ones. Can you tell, can you go through and tell us the story on each of them, like what you owe on it and what it's worth? Yes. So there's five different ones. I can pull it up if you give me one second. Sure. So what were you doing, like Turo or something? Yes. Okay. And so my guess is you pulled debt on all of these vehicles with the intent to rent them. Correct.

And you ran up the miles on them, so probably they depreciated very quickly, but you just weren't making the spread that you thought you would. Is that what? Right. One of the vehicles actually started out as a personal vehicle, but then I eventually, of course, used it for the business side of things once I resigned from my previous job. Got it. Okay. Okay. So that makes sense because before when you said, hey, 25,000 credit cards, 14,000 student loans, the rest is in like other stuff.

I'm like, gosh, that's like $160,000 in other. Okay, it makes sense now that it's cars. Do you have that info? If not, we can move on to the next thing. I do have all of the cars and how much is owed on each one. But as far as the value of them, I kind of got the information a little while back. So it's not as up to date. Okay.

Well, as much as we can go through them and kind of give you some insight. So the first car, let's call it car number one. What do you, what do you owe on it? The first one I owed 24,000. And what do you think it'd be worth private sale?

What I've tried or what i got last information on was about twenty thousand okay and how long ago was that information probably about three to four months ago and this is for all of them about three to four months ago okay so one is 20 you're four thousand dollars upside down okay not as bad as I thought what's the next one the second one is about 28,000 it's what's 28,007 is what's owed on it um do you want me to keep going on the other one you said you owe 28,000 and you can get 28 from it as far as that one's worth um it's probably a couple months ago it was around $25,000 is what it was worth. Okay. What about car number three? Number three is $37,500. Okay. What I was told it was worth is about maybe $33,000-ish and some change. And just for clarity, what did you go to like a CarMax

type place? Where did you get that information? Correct. That's where I got them all previously appraised. Okay, that's good to know. The good news is, what I want to encourage you, like before we even get through the list, the good news is CarMax value is like probably the lowest value you would get for them. If you sold these private sale, you might actually break even. So keep going.

Let's hear number four and number five real quick, and then Rachel and I will give you our advice okay number four is about 40,000 um that's owed on it and I that's the one I really don't know what it's worth um but if I'm guessing it's probably about 5,000 upside down but I'm not 100% okay okay and then the final one the final one is forty two thousand two is what's owed and um the last time I got it appraised it was about six thousand upside down okay okay okay so the good news is I really think for sure the first three if you sold in private sale you could probably break even or get really

really close but i think if i were in your shoes and i'm not saying this this is not a sexist comment by any means but i'd be getting with whoever i know that has a little bit more cojones in this area and like more expertise like i'd be calling up my dad and brother be like help me sell these cars when he's up yeah because my i just added be like help me sell these cars ASAP yeah because my I just added this up that's $171,000 in cars yeah and if in worst case scenario you're probably $15,000 $16,000 upside down so this this I mean I would be making I would say I'm getting these I'm getting rid of these in the next two weeks yeah I mean like I would be putting them everywhere all over the internet anywhere I could

I have some great cars and I'm selling them get them out of my life because that frees up I mean I can't imagine the car payments you're paying every month on these Maya I mean like that's yeah I mean I that would be my number one and so there is a lot of hope in that situation that 100% yeah the majority of all of these I mean yeah you could be have you tried to sell them and not had luck is that what's holding you back yeah um they're also a few of them are like extremely tied to to the point where they're kind of out for repossession so it's like i'm trying to get rid of them so they're back payments okay okay yeah um okay which would make me get that and i would take less to get them out quicker yeah so it doesn't, they don't get repoed because then you have nothing to offset the debt. So even if you

have to take less, I would, I mean, this is more of a desperate situation because of what you're in, you know, my, it's kind of like, you know, with, you know, with people that are behind on their mortgage and it's like, you'd rather sell it quickly than get foreclosed on. I mean, it's kind of the same equivalent. So the hard thing though, is you've got to be able to give them the title. So how are you going to close the gap from the one? Do you know what I'm saying? If you take less, how are you going to close the gap so that you can actually sell it free and clear? Do you have any money anywhere saved? I only have as of today, probably about a thousand dollars to my name. Okay okay so what I would do then

with that thousand dollars because one breaking loose on one of these is going to help you avalanche through all of them so the one that you was the least upside down was number two the one that you owed 28,000 on that was worth 25 if you can just really quickly get $3,000 saved and just focus on that one, you even clearing one of these immediately is going to rock your world. Yeah, absolutely. And so that's what I'd focus on. And then after that, they're going to go like dominoes because it's going to clear up that payment.

You're not going to feel the stress of it. And so focus on one at a time. But there's a lot of hope here, like Rachel said. Yeah, for sure. And what you can do to make money between now and when baby comes is going to be as helpful as possible. That's right. That's right. That's right.

That's right. That's right. That's right. That's right. That's right. That's right. Maya, if you stay on the line, Christian's going to pick up, and we're going to get you with a financial coach to even walk with you through some of this, because there's a lot here. And with a baby coming, I know it's just life.

It's difficult. So hopefully that helps. Thanks for the call. What does the future hold for business? Thanks for the call. Such thing is a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite, and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities.

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go to ramseysolutions.com slash bundle or click the link in the description if you're watching on YouTube or listening in a podcast on podcast not in it I guess you could be in a podcast on a podcast there you go all right next we have Joseph in Lafayette hi Joseph welcome to the show hello thank you for having me absolutely how can we help Well, my fiance and I, well, I should say my fiance wants to move. We currently live on her parents' property in a back house while we're paying off our debt. And when we get taxes in, she'd like to pay off one of the loans, but then move. And from all the numbers I've touched, it's like I'm trying to not break her heart, but tell her that we might need to stay longer until we pay off all of our debts before we add another bill.

Expense. Yeah. Why does she want to move? It's always, we're getting a bit older just to get away from, you know, parents. Nothing wrong with parents. It's just something we want to move to a bigger place for the kids. Okay. So it's more out of a desire, not a necessity.

It's not like something is going awry relationally, and it's like we've got to get out of here for the health of our family. There's not an urgency to it necessarily. It's just a deep desire of like, I want to be on my own. Yes, ma'am. Okay, perfect. So how much extra do you guys have a month? If you were to try to say, okay, yeah, here's what we would probably rent for.

Have you guys put that into a budget just to see what that looks like? I have. Paying off the loans still, like if we were to move instead of paying off the loans, I'd be like negative $350 every month. How much are the loans? I've got three loans that all average about $2,500. $2,500. Okay. Okay.

Yes. And what are you paying right now to live in this other property that your parents have? Electric. Are you there? Yes. Okay. How much are you guys paying? Are you there? Yes. Okay. How much are you guys paying?

Are you paying anything, or are they letting you live there for free? Pretty much free. I just pay the electric bill. How much do you make a year, Joseph, you and your wife combined? My wife's a stay-at-home mom, and this year I made $44,000. $44,000. Okay, because I was going to say, I mean, you have $8,000 of debt. It's not... Yeah. Well, were you paying off other debt before this

and this is just what's left? This is what's left. Okay. That makes more sense. Sorry. Yeah, that's true. Okay. So, when do you think, like, based off of the progress you've been making, how quickly can you have this $7,500 paid off? I mean, I could pay off one loan and that loan, that's $400 a month that I can put towards other

loans. It's like paying off one, but it's times the hard variable. So I could pay off the biggest and then pay off the other ones. Well, you want to move smallest to largest, like that's the way that we would teach you to do it. But even doing that, how quickly do you think you'd be through the whole 7,500? Within the next six months. Six months. Okay. Yeah. So that gives you adequate time to start doing your research and seeing what it would look like to rent. Like Rachel said, you're throwing it in a budget. You're kind of running the numbers and getting used to what that idea would feel like. And by the time this debt is gone, it's going to be, you know, you packing up that. Yeah. I mean, how many, how many kids do

you guys have? Three. How many? Three. Three. Okay. Because Joseph, I would say, what do you do for a career? Warehouse management. Okay. Because 44 grand, you know, with a family of five. Before taxes. Before taxes, you know, I mean, yeah, you guys are running on a tight ship. And so ship and so to just i mean i'm gonna say as the kids get older and as you guys start looking because eventually yes the goal is to own your own place one day um you know there it's um it's either going to take oh it's going to take longer right with on a 44 000 salary yeah or if she decides to pick up some work and do something from home to bring in, I mean, even a thousand bucks a month

or something to help kind of speed this up as well. Right? I mean, I think that's what's always, you know, difficult in a situation is, you know, we are all for stay-at-home moms. Like that is not a slam against her. I mean, I think that that is incredible, absolutely incredible.

But when you make one choice there, then other choices, you know, so she has to understand too that there's a reality of what you guys make every year and what you bring in a month. And there's a reality of what you can afford. So either if, you know, and I don't want you working 80 hours a week

to be able to own a home, right? I mean, like there's a reality too to your time and enjoyment of life. But that's a reality she needs to realize. So even though I know she doesn't like being there, there's a math issue here too. How old are the kids? Six, seven, and two.

So is she doing the homeschool thing or are two of them already in kindergarten? And yeah. Homeschool. Okay. Yeah. Yeah. Which is great.

So I think that, you know, and you guys do a budget together. I mean, I'm assuming she sees all these numbers. We just started. Like I just discovered the Ramsey solution. Okay.

Three months ago. Oh, awesome. Well, you guys make great progress Well done That's awesome Thank you So, and how old are you guys?

You may have said this I am 24 She is 25 Okay, okay Well, and the positive thing is too, Joseph I mean, if, you know If this was the case And you guys were in your late 30s or something

I'd be like, whew, okay We gotta keep moving But you're young In a sense that, you know You will only be moving up Yeah In income From, you know Every year We got to keep moving. But you're young in a sense that you will only be moving up in income. Every year, you should progressively be making more.

And that's the positive. So it may not happen as fast as she may want it. But also, I would make it a goal, though, to at least get out. I understand what she's saying and become your own crew somewhere and renting. But but buying a home and all of that it may just take a little bit longer yeah that's true that's true yeah i i understand that and like i hope she does too it's just i don't want to break her heart because she was like we need to move we need to move well you're not breaking her heart math is breaking her heart because she's not living in reality she could be sad about it.

And that's appropriate too, right? Where it's like, oh my gosh, I want to be gone out of here. And this sucks and I hate it. But you know what? Grownups, we all do things that we don't like. But I would say, again, hear me say, we are pro being on your own. Even if you were a single guy, Joseph, and you were 24,

like, hey, Joseph, how can you get out of your parents' house? So for the time being, you guys are on a plan and have an end date as well. This would help her to when you actually look because you said we can be done in six months. And, you know, it's it's February. So what is that? August or so and make it a plan to say, OK, by September 30th, we are renting a new spot. October 1, we'll be paying rent for a new spot, right? And you guys together need to be at the timeline and have that end date because that's going to help her.

If it's this just like forever, we're going to try, we'll see. That ambiguity, I feel like stresses people out and I understand that in her case. So have a plan and then you guys, yeah, rent. And then again, I don't know, there was a reality too for her to realize, I mean, you guys are in a great spot,

a situation to pay off this debt fast versus having to pay $800 in rent somewhere in Lafayette. So that's what I would do. What do you think, Jade? I think you're right. You know, I love when moms want to stay at home. I think it's a great idea. I love the idea of homeschooling,

but there's two really, like you said, facing the reality of a financial situation. And like I've said many times on this show, a dream deferred is not a dream denied. Just because you say, hey, in this season, I'm not getting, you know, I'm not able to have my cake and eat it too. So in this season, I've got to work hard.

And then once I get ourselves in a better situation, then I can do those things. I can stay at home. I can do the homeschooling. So I think that there's a little bit of sacrificing to when that needs to take place here. Yes. Or you're sacrificing by choosing to be home and homeschooling, which, again, is great. But then you're sacrificing homeownership down the road.

That's also true. And that's the thing, right? You guys just have to look at the math and the values of your family, Joseph. And that's what you, right? You guys just have to look at the math and the values of your family, Joseph, and that's what you want to drive you. But math has to be a reality that we have to live in, that we can't just want something and it just happened. That's not being a grown-up either.

So I hope that helps, Joseph. But you guys are killing it. I mean, you guys have made so much progress already, so keep up the great work. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're nonprofit organizations that focus on their members.

And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously in fact they design products to help keep you from going into debt in the first place fair winds has been in business for over 75 years and they serve hundreds of thousands of members worldwide you can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join and Fairwinds partners with more than 5,000 credit union locations around the country. So you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds and do anything you

could do at a physical location. So go to fairwinds.org slash Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's Fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. Every quarter, our research team sends out a survey to listeners of this show, but also just the general public just to get a pulse on what's going on when it comes to personal finance in America. And our Q4 results are in, and they've taken everything, all the data people, they're so

good at it. They are good at it. And they figure out all this stuff. But we have some highlights from the study, which we just think, we think are interesting. It's very interesting. So the first one is that saving money was the top New Year's resolution for americans saving money yeah i get that piece uh-huh i can understand that okay 37 percent of americans said their personal finances will get better during the second trump presidency listen i think that's we saw that at the polls obviously for sure 37 one in four u.s

adults plan to use their tax refund to treat themselves whether it's travel clothes eating out or something more which caveat y'all if you're in debt and you don't have savings use your tax refund for that stuff when you get it and adjust it so you don't get a big refund i know right that's so funny to me that's that disney money right there okay i love this one. Grocery shopping was the number one category where Americans said they're likely to overspend, which we've been telling you guys that for years. That's us. Food is the budget buster, right? We did a Costco run two weeks ago. I don't even want to tell you. It was terrible. Absolutely terrible.

I thought, oh my gosh, if I spent this on clothes, I would have. I already know what it is because it's the same at our house. So bad. It's so bad. Nearly six in 10 American adults said weekly meal planning is an essential task, but 44% wish they did it better. Well, six out of 10, 60%. That's pretty good because back to this grocery thing, eating out, food in general is always a budget buster.

So grocery shopping for sure. But if you don't plan for it, you end up going to a restaurant, getting to go. I mean, it just ends up being like the catch-all where you end up spending more doing that. Yeah. But it's like, I mean, when I look at that, it's like eating your vegetables. Like, we all know, like, yeah, I'm supposed to eat broccoli. Like, I should probably eat Brussels sprouts. But we don't do it. You know what I mean? Meal planning. This is like, it's a love language to me. I love it. I feel in control. I'm like, I know exactly tonight we have spaghetti and meatballs. Yesterday we had chili. We plan out exactly what we're going to eat every night. And it feels good. I'm like, I feel in control. I think if you have,

Rachel, those go-to meals, the ones that are easy, the ones you know your family likes, it does make meal planning easier. I think it's the folks who are like i hate cooking yep i'm bad at cooking i don't know what like those are the folks who really struggle that's fair that's fair all right so this one is a heavy hitter it says american said the ideal interest rate for them to consider buying a home in the next 12 months is 4.5 percent keep in mind that right now it's 6.13 or something like that yep absolutely okay 45 percent of gen z and millennials said that if the government increased the child tax credits it would be a big or moderate impact on their decision to have a child or additional children that's 45 percent that's a lot and we're gonna have a kid or not depends on the tax

credits i mean don't get me wrong like rachel we're always talking about considering finances and family planning but i feel like that's definitely next level all right about half of americans have given money to a person in need or a charitable cause in the last three months i think that's great prioritizing generosity i think no matter where you are in the baby steps, if you do that, like there's nothing wrong with that. That's a wonderful thing. Gives us some humanity. That makes me feel good. I agree. All right. 30, the last one, 33% of Americans said that it's acceptable to borrow money from the person you're dating to pay a bill. Let tell you something rachel let me just tell you something rachel if i'm dating listen if i'm dating leroy and he slides into my text like can you give me

says jane i need i need extra 300 bucks to cover the car payment this month i do you think it's different between guys and girls? If a girl comes to a guy. It shouldn't be. It shouldn't be. But it feels different. It does. It does. It's way less attractive for a guy to come to a girl for some reason for money. Like a girl to a guy.

I don't know why. Can you spot me a few singles for my utility bill? No, I can't. Sorry. Leroy. Leroy. Budget. What are you doing?

Unbelievable. Unbelievable. Oh, boy. Well, I'll go back to one, though with uh buying a home and they want to you know have the interest rate drop which again makes sense if it's around 6.1 percent right now and they want a 4.5 almost a two percent drop yeah it does it saves you a ton of money in the long run but let me tell you guys get in the game if you haven't already like if you have the ability to buy a house meaning you are out of debts you have an emergency fund you have at least five percent down and your you know your payments you know no more than 25 percent

of your take-home pay on a 15-year fix like all the parameters are there don't sit and wait on an interest rate because you can always refinance later but we do we you don't have control over that but getting in the market as soon as possible, I really think is a good bet. Because, Jade, as we've seen it, that the housing market, it's not shooting up. Prices are not shooting up like they were three years ago. But they steadily are still increasing. That's right.

A small percentage. So it's just going to get more and more expensive. So if you have the ability to get in, go ahead and get in. The earlier, the better. And again, I want you to be financially ready before you do so. But if you have any questions around housing, go to ramseysolutions.com

slash real estate. And we have so much information on there, you guys, because again, buying a house is a big part of your financial plan. And we want you to be set up well with the information and with the people around you to be able to make that as smooth as possible. All right, up next, we have Lisa in Raleigh. Hi, Lisa. Welcome to the show. Thank you, Rachel. Rachel, my husband and I are 64. We'll be turning 65 at the end of the year. So, of course, we're thinking about retirement and that kind of panics me a lot. I feel that we did not plan very well and it came very fast. We do not have a pension. I took my 401k to pay off some debt, but we do own a home with no mortgage of $700,000. And I do own a business that is grossing $1.3 million. A month or I'm sorry, a year?

A year. A year. And what do you take home from that? If it's grossing, what's the profit of it? About 200. Good for you. Great job. I know that we just find it very hard to save money and money is always going back into business. And, um, of course we like to live a nice lifestyle too as well. But, um, so my question is how do you have enough income for retirement? If you don't have the pension or the 401k, would it be wise to sell the house at some point, end the business, and then invest that and live off the income. Yeah, do you guys, are you married, Lisa? Yes, I'm married 40 years. Okay, oh, congratulations. Do you guys have any retirement, any Roth IRAs, any 401ks,

any mutual funds, anything? No, I took it. You know, you'll love this. We paid off our kids college with that so um no okay and does the business you guys run together so your husband doesn't have a separate income uh he he takes social security he doesn't take um a salary from the business so he takes takes $2,000 a month Social Security. And just to clarify for me, you said the net profit from the business was $200,000,

but it sounded like that's not necessarily what you take home because you were investing a lot back into the business. Did I hear that right? Well, I would say $200,000. Is what you're taking home. Right, of course. And that's what you guys make a year total household because he's not working. So are you guys living off of $200,000? Yes.

Okay. What are you doing? Where's the $200,000 going? Exactly. Well, we do help his parents, and that's about $2,000 a month. They're 92 years old and they have round-the-clock care. And so we do help with that. We do have two car loans.

Oh, okay. How much are those? Those are two cars, $400 each. But what do you owe on them? Their lease. Okay, so you're paying $800 a month in leased cars, $2,000

to parents. So I think what you guys really need is to get on a budget. And we'll give you an every dollar budget, but that's going to help you see where all the money is going. And when you see that, you're going to have this moment of, oh my goodness. And that's going to give you the opportunity to reshift your priorities. You and your husband, and saying, we might not be able to

afford some of the things that we're doing, specifically the leased cars. And we're going to retire soon either, Lisa, unless you have a plan to sell the business. You guys could downsize and put some of that money in investments, but my fear is, Lisa, your habits haven't changed when you do that, and you guys will blow through that money. So I would sit down with an investment professional, a trusted pro, and really look at this retirement. If you hold the line, Christian will pick up and we'll direct you where to go. Thanks so much for the call, Lisa. If you're wondering if you are staying on track with the baby steps, make sure to check out our quick quiz, check your progress, and receive a personalized plan just for you. So go down and click the link

in the show notes. Are you on track with the baby steps and complete the quiz? And I'll just give you a quick snapshot of where you are financially. All right. Up next, we have Edward in New York City. Hi, Edward. Welcome to the show. Hi, thank you so much for taking the call. Absolutely. How can we help? Yeah, so I'm looking to, I have an opportunity to invest in a house in a small city in Western Pennsylvania. It's a rental and I've never bought, just to give you a little background, if you don't mind, about my finances. I'm 29. I'm single.

My retirement has about $85,000 in it. I have about $85,000 in cash. Brokerage account in stocks and stuff like that is about $40,000. I pull in about $4,400 for my day job a month. Okay. And then I have a property, my own rental property that I own, and I do have a mortgage on that. How much is that?

The mortgage? Yeah. It's about 83,000. Okay. It's valued around like 175,200. Okay. Great. And where are you like $175,200. Okay. Great. And where are you living?

I think you guys are... What's that? Where are you living right now? Yeah. So I actually had another apartment and I was fixing it up and then I actually sold it. I was going to rent it out. So I moved back home to my parents. Okay.

So what's that property? Oh, you sold it. You sold it. Yeah, to my parents. Okay. So what's that property? Oh, you sold it. You sold it. Yeah, I sold it. Okay. Where's the proceeds to that? Yeah, that's like, I'm just holding that in cash right now in my brokerage. Is that the $40,000?

Yeah. Got it. Okay. Interesting. Okay. And the question is another property. Yeah, I have a third opportunity that a friend gave me. Also, I think if you guys don't, I think you'll laugh at this. My rental property actually burned down.

Oh, no. I wouldn't laugh at it. Properties are not passive income. I learned that the hard way. Yeah. Amen, Edward. Say it louder for the people in the back as they'd say so tell us when you tell me so i have an opportunity to buy a small house for 44 000 cash um it has a tenant in there they pay about nine um 675 a month um The taxes and the insurance, I was told, are about $150 a month. Okay. Here, can I pause for just a second? Let me get a little bit more.

So the one that burnt down, what's the status on that? It's being rebuilt. It's a townhouse. Okay. And I'm the president of the HOA board. Okay. So I'm closely aligned with the construction process and everything like that. So when it's built out, are you planning on keeping it as a rental or are you going to sell it?

I'm going to rent it, yep. You're going to rent it and keep it. Okay. I mean, I think my next goal for you, Edward, is a home for yourself, is a primary residence. Yeah, i'll be moving in with my girlfriend this summer uh and we're probably gonna rent um okay so well again i mean i would be putting my i my next financial goal because you you don't have any debt correct other than the mortgage yeah no consumer. You have an emergency fund in place.

You have this rental. I mean, again, from a goal of getting yourself, not trying to play some game with the real estate market, but just truly trying to get you in the best position at Word financially is going to be owning a primary residence and paying it off as quickly as possible. And then beyond that is kind of when we when we factor in looking into real estate as an investment because it is a great investment but also um doing it in the right order i think is key it brings i think more stability and peace

to you so um can i clarify can i clarify the first rental that you were talking about that you have somebody in there did you say that you owe 83 000 on it and it's worth 175 yeah that's the one that burned down yeah okay um but if you and it's where you live like it's in your area yeah so my question is you told me you said you have 85 in cash then you've got 40 000 in a brokerage why wouldn't you now don't get me wrong i don't think you should do the deal in pennsylvania you're nowhere near there but why wouldn't you pay off the the one that you plan to keep daily yeah and live in that townhouse be completely debt free then yeah then you can look and say okay is there another rental i want to do i would not do 44 you know how far is how how far is this from pennsylvania oh it's far it far. It's on the western border.

Yeah, I mean, I wouldn't, Edward. I mean, I think that's going to be exhausting, and it's not going to be, I mean, it's not a ton. So I think you could save that money. I would only make maybe $450, $500 a month. Yeah, it's not worth it. Yeah, so we crossed that one off the list. You pay off the one that you have for 85 000 now you've got a paid for rental and then you've got another 40 000 to start putting towards a down payment on yeah would you what

would you live in that townhome uh my girlfriend won't why would uh she doesn't like it um but i mean with some convincing and showing their financials i might be able to convince her but yeah because i don't know okay yeah because i mean i'm gonna be honest edward i mean you're putting to a degree your financial not your financial future it sounds so dramatic but your decisions about your finances in the hands of a girlfriend not your wife not someone that you know what I mean? So, so there is just, just remember that. I mean, cause honestly, Edward, if you thought about it, just play out a scenario. What Jade said was brilliant that paid off. What if you

lived in there, you had no rent, right? Like, like nothing. And you're making, how much are you making a month? Just 40, 400. Yeah. So you're making that you live off that and put some in investments put some away have a goal for a property like run some numbers out of what life could look like because when you don't have a mortgage where that is the largest expense in somebody's line item of a budget i mean it is your living expenses is always your home yeah whether rent or a mortgage is always the highest and if you can eliminate that and you have absolutely no debt, no debt at all, then you can say, yeah, maybe I'm going to sell this townhome in two years

because it's going to be worth 250. 100%. And then I'm going to go get some, you know what I mean? And I can step up in house. The way people step up in a car, you have the ability to do this kind of from a home perspective. And just because the girlfriend doesn't like it,

I mean, I just, I wouldn't, I wouldn't put a lot of stock in that, honestly. And I don't know. And, you know, just to end off, I totally agree, honestly. That's the wise decision. But, you know, if I was like a seasoned investor, let's say I was like 20 years older and I had a large portfolio, even then, would you think that investing in out-of-state properties is a bad move? Yeah, we always say no to that because of the headache, the hassle. You don't have eyes on it. You end up honestly paying a property manager most of the time. Yeah, that's what I was going to do.

To do it. Yep. And then it just eats into the profit. And for the most part, you're not getting a lot out. And as you'll see with real estate, for most people, you're either making money on a flip, buying it low, selling it high, making the spread. And you have to know what you're doing if you're doing that. And or you're buying property

and you make your money at the table, right? When you're buying the property, that's usually where you're gonna make the money. And then you don't make a ton of money off the rents. Like that's not what's gonna make you rich. It's the value of the property increasing and selling it eventually and taking the equity, right?

That's where you're really going to win. So having a rent is not, that's not the mindset I go into. It's either I have this and I'm holding it and I'm going to make the money off the equity, off of the value of the property long term. Or I buy a crappy, you know, $44,000 property that you can see. And if you're into it Edward and you're like yeah I mean I could get some subs in there we could fix it up and I could sell it for $125 you make some cash that way right but that's that's a whole other do I yeah he said that's

not how it's not but yeah yeah so that's those are the two ways I see okay yeah that's the way I see the um the investment on real. It's either doing it with cash and you get some short-term gain from a flip, which again, know what you're doing if you're doing that, what you're getting yourself into, or when you're doing it, it's more for the long game of the equity. Yeah. I put a loan mortgage in, I'm sorry, an application in to buy a house near me. It was severely damaged. And everyone is, I got outbid by a bunch of cash offers and went over asking. And I can't even compete in this market, honestly, near me. Yeah. And let me encourage you too, you know, like in 10 years, maybe this is a game you end up playing, but maybe you just invest for now,

you know, build up some money that way. And then taking that and doing some real estate later down the road. It doesn't have to be today, but, but you're doing great, Edward. I mean, you're, you're in a great spot. Jay, thanks for a great hour. Thanks to all the guys in the booth and thank you, America. This is the Ramsey Show. Live from Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Rachel Cruz, hosting this hour with best-selling author and my good friend, Jade Warshaw. We are answering your questions about life and money. So if you're listening, give us a call at 888-825-5225. And we are here to take your calls. Up next, or I guess to kick us off this hour, I should say, is Lauren in Phoenix.

Hi, Lauren. Welcome to the show. Hi. Hi. How are you guys? Hope you're doing good. We're doing great. Doing great.

How can we help? So my question is, what are some of the steps that should be taken when bringing finances together once you get married? My fiance and I are getting married in November and we're both 34 and have a lot of separate independent accounts as like fully grown adults. And so I'm just kind of trying to figure out how to bring them all together. That's such a good question. And I love that you're thinking towards that and that you guys are both open to doing your money together, which is exactly what we would teach. So I'm the jump in 100% kind of thing. Like if it were me in your shoes, which it was at one point, it'd be me sitting at the table with my fiance with all my papers and saying like, okay, here's what I'm bringing to the table. This is my debt. Here's what I have in assets. Like, here's what I have. And just kind of being really open and starting with just a conversation to, it's like a reveal all, like a tell all. And so I'd start there. And then that way you guys can gauge and say, okay, when we do get

married in November, here's how much debt we'll have combined. Here's how much savings we'll have combined. Here's your income. Here's my income. And so really step one is what I would just denote as know your numbers, like see what your numbers are. And then from there, you can start dreaming about what the goals are, right? So if you look and say, okay, well, I may not have debt,

but he does or vice versa, or maybe you both do, then you start looking about and seeing, okay, what do we want to tackle first? Are we going to follow the baby steps? And really talking about if you guys align on what to do with what you have. Does that make sense? What are we going to do with our income? What are we going to do with our debt? And I find, Lauren, that that's kind of where if rubber is going to meet the road, that's kind of where it is because you are listening to us and you're interested in the baby steps, it sounds like, but he might not be. And so that might be where you encounter a

little bit of friction, but it's no reason to not continue forward. It just develops over time. Yeah. Yeah. And Lauren, you know, from a tactical standpoint, what I would do is, because you're bringing in probably savings accounts, checking accounts, retirement accounts, all of that. So the things I would combine, I would combine checking. So I would just like maybe pick which bank you guys like the best. And it could be his account and you close yours and transfer all your stuff to his or vice versa. Or maybe it's a completely different.

Maybe, you know, you guys looking like, oh, this is a great bank in Phoenix. And so you open up an account there. So checking account, I would be having one and I would work out of. I would have a high yield savings account that both of your names are on and put all of your savings in that, your short term savings. So any cash you guys have, I would put names on that. If there's any brokerage accounts, any investments that are non-retirement, I would work with an investment pro and put both of your names on those accounts. Now, retirement accounts, you want to keep separate because you both have the ability to grow separately.

So if you have your own 401k, he has his. Your own Roth IRA, his Roth IRA. So you'll get the most bang for your buck having two of those accounts in your names um and then debt i would not i would combine and what jade's saying combine the emotional side that we're we're changing our our um our pronouns to ours right my you know it's not mine and his it's ours now i wouldn't necessarily go um put your name on his debt or something like that. Like we're not talking that that tactical, but paying them off together as a team and then a home that would wouldn't be one place I would have both of your names on as an asset. Okay. Yeah. You guys kind of answered all my questions because I was trying to figure out, we talked about putting our checkings into a new account

and just kind of getting rid of our other ones. But I have four sources of income that come into mind and he has his and he has his own business. So it's just kind of hard to bring all of these together and cancel all of these different accounts, all of these direct deposits that are going into them. Well, if you have business accounts, I'm okay with those remaining where they are, but just adding the other person. Yeah, adding a name to it. Okay. So yeah, definitely not combining business accounts like that's definitely not what we're saying more just the checking account of which you guys you know you're living your lives out of okay and then just kind of divvying out the money as we see fit according to like you know

everything goes into one account but then we're paying our bills and then is it still okay to kind of have a separate account that's like your fund money? I wouldn't do a separate account for it. It would just be a line item on the budget. So case in point, the way my husband and I do it, he runs a business. And so there's an account for that. I don't interact with it much, but I'm on it and I can access it at any point. And then when he does a payroll from his business, it goes into our joint account that is a personal account. Same place where my paychecks go into a joint account. And then that's the account that pays all the bills and everything like that.

And on our budget, there's a line item that's, you know, Jade's fund money, Sam's fund money and all that money sitting in our checking account. But at any point I can go in and take out, you know, whatever my money is for whatever my purchases that I budgeted for. Does that make sense? So it's not in a separate account. Yep. That makes perfect sense. And then my last follow-up question was if we kind of look at credit cards differently, neither one of us have extreme credit card debt. We are definitely tackling it together, but if he likes to build credit by having more credit cards, where I was taught to like barely have one. And so just trying to kind of morph that kind of mentality. So we kind of see eye to eye. Yeah, I just wanted a little bit of guidance on that.

Well, that's the part that I was kind of talking about earlier, like when you guys had this first initial conversation, when you're just showing and revealing what your financial status is, you know, and then that really the next step after that, you know, because you're just showing and revealing what your financial status is, you know, and then that really the next step after that, you know, because you're not married yet. Once you get married, you'll do everything Rachel just said. Yeah, don't do anything until you're married. Yeah, that's a good point. But in the meantime, between now and November, that is when you're having these conversations

and you're saying, hey, what's your philosophy on debt? Here's mine. And now's your time to kind of air out those conversations, because the truth is those conversations are not usually a light switch where you talk about it once and you both agree. And that's that on that. Like that's kind of a Pollyanna way of thinking for, I mean, for some people it is, but for a lot of us, it's not. Especially for you guys getting married later in life, you've done your own thing for so long. It's not like you're learning in adulthood together. I mean, you are functioning adults so you're the way you've been doing it is the way

you feel comfortable obviously yeah and so the truth is there might be some give and take like there's no guarantee that if you say i want to do the ramsey method he's going to go yeah me too like there might be some push and pull on that for a while i mean before you get off the phone we'll give you financial peace universities so that's something that you can do together where you're not the one saying, here's what I want to do. It's you both learning together and hopefully deciding together, hey, this seems logical. Yes, that's right. And we'll give you, Lauren, hold on the line, we'll give you every dollar as well. And that's our budgeting app because it makes all of this so easy and even tracking your spending together. Once you guys are married and

you actually start living out of an account you're able to see so often like okay this is this this is where it's going and it's great and i would say to lauren i always think it's kind of a fun challenge because you even said you know i'll just have one credit card he wants multiple it may be fun to just go on this whole new adventure with money and doing something new for both of you which could be a no-debt world, not even with a credit card. And to say, what could that life, and you start something new together in your marriage could be a good challenge. But that's all talked about in Financial Peace University. So I want you guys to watch that together. But I'm so glad you called,

Lauren, and I love going into a marriage already saying, yeah, we're going to be aligned and we're going to be together and work as a team because it is so much more healthy for your marriage to see yourself as a team, especially when it comes to your money. So you guys are on the right track. Up next on the phones, we have Nicholas in Mobile mobile alabama hi nicholas welcome to the show hey how are y'all we're doing great how can we help hey i was calling to ask um you know i've had some health issues family issues um i've about, I'd say probably close to a hundred thousand in depth. Um, you know, I've, I've had four back surgeries. I'm only 26 years old. Um, my daughter was born back in September, 17 weeks early. She spent 130 days in the DICU. Um, thank, thank the Lord.

She's got a good prognosis, but I'm just trying to get things together and get moving on everything that I've put off for so long. Wow. Okay. So 100,000 in debt. The back surgeries, is that something that's going to continue to go on or are you past it or is this something that you're going to see pop up and need more surgeries? I hope my last one was the last one. My last one was a fusion, so I'm kind of hoping that was it. Is that 100,000 mostly medical?

Actually, only 2,800 of it is. That's just what my insurance did not pick up. Okay. What's the rest of it? The $98,000? Right at about $82,000 was what's left in the house. Okay. $3,700 in credit cards, $96,000 in personal loans, $17,000 in collections. I think that's about it. Okay. Well, the good news is when you told me that 82 was the house, that made me feel a lot better because the way we think about debt here is we separate the consumer debt from the home, right? So in baby step two, we say you pay off everything

except the house. So for right now, we'll kind of push that 82,000 to the back burner. It's not on fire. It's not a crazy amount. And let's talk a little bit about your income because that's really going to be the key to paying off what you do have here. That's consumer debt. So with your daughter, with your back issues, how much are you bringing in every single month? Right now, I'm about $50,000. At my last job, I could not continue to do it. So I took a $17,000 pay cut. So right at about $50,000 right now. What's that equate to every month after taxes, after everything? I think that's right at about, after insurance and everything, about $1,500 every two weeks, so right about $3,000. Okay.

Okay. And it's just you? Is there a wife? Yes, my wife. She has to stay home with our daughter because she's on oxygen and everything, so that's kind of where that's at. Okay. And what do you do for a living, Nicholas? I'm a branch manager for a fastening store, like nails, staples, stuff like that.

Okay. Okay. Okay. So the key here is it's going to be finding ways to get the income up over time. Because basically what we find is, you know, there's two ways to get out of debt. One is lowering expenses and the other thing is raising your income. So if we focus right now on lowering expenses, that's going to be you getting on a budget and just seeing, is there anywhere that we can tighten up? Even if it's $17 on a subscription, every little bit counts. So that's thing one. And then thing two, we're looking at, how can we raise our income or get money coming in? And so off the bat, the first thing I say is, okay, well, are you investing any money at all? If you're investing, you pause investing, right?

That'll get some money back in. The next place you could look is if you're getting a tax return, you could look at changing your W-4 there and so that you're getting that money back in your checks. The refund that you get, yeah. So those are a couple of ways, just non-work ways to find money.

But then beyond that, it's about, okay, what does it look like for us to pay this debt off as quickly as possible? And so if I were you, I'd add them up minus the house and I'd say, okay, what do I need to pay off in addition to the minimum payments every single month to have this done in two years? I'd start kind of at that two-year point because that's what's normal like we see that you know as kind of the normal time frame to pay off debt and with what you've got here

you know i feel like that's exactly where you need to be okay all right um and you know i've put i've put in other applications because i've got experience you know carpentry welding everything and it just seems like nobody's nobody's seem to be hiring with the job market right now um and i mean those jobs pay well more it's just yeah then i would just i would keep at that nicholas i mean honestly if you just stay persistent in that because you're right that that can be just a jump in your income, which would help this process, obviously, so much more. So, yeah, I mean, I would make it a goal to say I'm going to be applying and applying and applying and applying and applying. And I mean, my goal is, you know, ideally, maybe it takes me five, six months to get that new job.

But until then, I'm going to be working extra in order to do it. Are you guys on a really, really tight budget, Nicholas, monthly? Yes, we, at my past job, we were, you know, we were comfortable, but still, you know, a little bit behind. But now. Now you feel it more. I mean, that's an extra thousand bucks a month that you, yeah, you guys went down. So you will feel that for sure. Well, the good news is you said carpentry welding.'m just wondering um i'm thinking side hustle right now i'm wondering

if you can kind of put those skills to work on your own maybe just doing handyman work or is there something that you can just kind of stand up really quickly and put yourself out there because with carpentry is it you know you're selling pieces and you're making you know making pieces and selling them is that you can go into people's houses and do light work for them. Does that sound like something you'd be able to do with your skill set just to get you quickly making money? Yes, I have. And, you know, I've, I've tried to start a small, small company because carpet is one of those things that I had the tools. It's just, there's no real big startup

cost to it. It's just the area that I'm in. I don't know if I'm just not advertising in the right area, but it seems like nobody's willing to buy furniture and specialty items and have work done on the side because they're used to buying things from, you know, Walmart, Amazon, where it's cheap and quick. Nobody wants to pay for furniture. But for you, and I'm going to take a book, a page out of the Ken Coleman playbook, it's all proximity, right? It's you getting in circles and talking with people and then being able to see what it is that you're selling, or even for the jobs that you're applying for. ken coleman would say hey it's not about you turning in resume after resume it's about you finding someone that works there that can vouch for you and say hey i you know i know the perfect guy and here's his resume and you

know there's no guarantees there but it's going to get you way closer than kind of a cold a cold call of turning your resume in on a site or something like that but even for your one-off jobs nicholas i'm like create like a business facebook page have your wife posted on hers have some family you know get the word out and you go and even talk to like if there's some designers in the area yeah go in and meet them at their offices and say hey you know if you guys are designing you know getting furniture for a home because yeah to your clientele point nicholas that may be true for some people they're like i just need 200 bucks for a table because yeah to your clientele point nicholas that may be true for some people they're like i just need 200 bucks for a table i'm not going to pay 3 000 for a handmade

you know so there's a yeah a clientele um issue but finding people that work with clientele people that are looking for great furniture and great pieces um and then social media i mean it is an amazing thing get your friends and family don't be bashful about it to say hey will you please just share my page and people are willing to get into groups i mean all of it yeah i would do what you can there because if you already have the tools um man that would be a great place to make really good thousands of dollars right extra um and it's something you probably enjoy too and then the beautiful thing is maybe in a perfect world it really starts to take off this side hustle. We see it a lot becomes the main gig over time and it takes time,

but that could be, that could be a great dream. If you make something really beautiful and gift it to one of these, you know, a designer in your area or some folks that you know that are, I don't know, staging real estate, that sort of thing.

I feel like that's, that's the, like that all they have to do is see it and you're like oh that's beautiful how do i get another one of those yeah for sure yeah all right and um i guess my the last question i have is you know i'm getting a tax return um would y'all recommend paying off some of these smaller debts with it or keeping it to the side and using that as my emergency fund. No, you got to get out of debt first. So keep $1,000 aside as a starter emergency fund

and then use the rest of that refund to get out of debt. Hopefully it'll knock out a nice little chunk of this. How much are you getting back? I'm at about $1,400. $1,400. Okay. Well, to Jade's point earlier, you can even do some withholdings, adjust your withholdings, and some of that can get back in your paychecks going forward, which is great. All right. Next, we're going out to Milwaukee and chatting with Carl.

Hi, Carl. Welcome to the show. Hi. Thank you for taking my call. Absolutely. How can we help? My question is, I have a young family. We have gotten into a little bit of credit card debt and access or about $30,000 in debt right now. We have about $400,000 in a retirement fund, another $70,000 in stocks. And we're wondering if our best option would be to sell the stocks that we have that are actually performing well, or maybe taking out a HELOC on

the home right now, because we believe we should be able to pay that back. My wife recently came into a job that would add a significant amount of income to our house or to our income each month. And we're wondering what our best solution might be. Yeah. So you said $30,000 in credit card debt? Yes. And that's the only debt you guys have? We have a mortgage on the house. The house is worth about $400 and we only owe $220 on it. Okay. But no car loans, no nothing like that? The two car loans we do have about $11,000, but they're both under a 3% interest rate. Okay. So you've got the $70,000 in stocks, non-retirement. I definitely would be willing

to cash those out to get out of debt. And I wouldn't just get out of credit card debt. I'd get out of all of the debt if you can. And you can. Yeah, you got $70,000. So take $41,000 of it, pay off your debt today and be completely debt free. Have no payments. I don't care about the interest rate. Just be completely debt free. And then you'll have taxes on it, by the way. Yeah, you will pay taxes. That's true. But then from one of the questions you're going to have is in regards to capital gains and the taxes that would come on it. What can we look to expect on something like that? We would like to get debt-free completely, but we're just wondering

what kind of hit we might take, what we need to actually sell. If it's all of it, it's all of it, right? If it's not, it's not. So if it's, I want to make sure I'm saying this right. So if it's short-term, you're taxed higher, but if you've had it as a long-term investment, then it's usually taxed at ordinary income, but you can double check that if you want how much are you guys making a year household income together uh together with her new income we will be at about 225 okay so i might if i were you uh let's see well i guess it really is not going to matter because it's all going to be in this same tax year but your tax bracket might change because you're clearing this out and it's going to look like ordinary income. But just understand if it does, that bracket is only for the amount over. It's not going to be your whole

income is not going to be taxed at that rate. Got it. So, yeah, I would definitely do that. And I mean, like we always say, debt is a symptom of some behaviors that were in disarray. So I would really take some time and think about, OK, how did we acquire this $30,000 of debt? And what's going to be our attitude towards debt going further so that we're not having to cash out, you know, investments to pay it off? OK. All right. I appreciate that. Yeah, absolutely. Thanks for the call, Carl. Next, we have Matt in Boise. Hi, Matt. Welcome to the show.

Hi, thanks for taking my call. Absolutely. How can we help? Yeah, so a little bit of a backstory. Last year, our HVAC in our house went out, and we, it was in the middle of the summer, and we needed to get that replaced. Yeah, not fun. Um, at the time we were completely out of debt. We were, um, uh, we had, we're saving towards retirement. We were doing all the steps. Um, we, it was going to be about a 15 to $18,000 repair. Um, we did have an emergency fund, but it was probably only three months funded at the time. So it was $10,000. Um, and we, uh, we had a two floor house in Boise and it gets really hot in the summer. And so we looked at upgrading our HVAC and getting a, a two zone system.

And that costed 27,000 instead of the 15 to 19,000. Um, and the company that we went through offered us a zero interest loan for the next three years, paying about $800 a month, which we looked at and we could afford. And we decided to go that route. So we also have about, ironically, $27,000 in stock from a time that I worked at a previous company. And so we've kind of always seen that as our backup emergency fund, but we just decided not to sell it to pay for the HVAC. So we're in a spot now where a year later our bathroom flooded

and insurance is covering about $27,000 to re-put our bathroom back together. My wife would like to upgrade the bathroom as well because we are going to have to do this work anyways. And that was something that we were looking at. But we're just kind of in a spot where we're feeling like I'm considering selling the stock. If we're going to sell that stock, part of me says pay off the zero interest loan. We've got a bunch of people in our ears saying, well, the zero interest loan, why would you do that? Part of me feels like upgrading our bathroom shouldn't be a priority right now. I love my wife and for her, that is a priority. So I just kind of wanted to call in and get some thoughts about how to, I'm not looking for sides or anything, but, but I mean, we have, you know,

we've got, we still have $10,000 in emergency fund. Do you both work? So I, I work full time. She was a stay at home mom who just went back, who just recently gone back to work. She was doing like five hours a week of contracting work. And now she's going to start working more regularly. So we have a lot of flexibility to up that or down that if we need to. And I think she anticipates working more and, you know, if we were going to remodel.

So give me the numbers real quick, Matt. How much do you guys owe on the HVAC? What's left on it? On the HVAC, we still owe about $23,000. $23,000 on the HVAC. Okay. what other debt do you guys have, or is that it? That's it. That's it, okay. I mean, I guess I should say we have our mortgage for our current home. Sure. But no consumer debt.

Okay, and then how much do you guys make a year? Well, I make $75,000. Her contract that she has right now through her work is for $50,000, but she has the ability to up that to kind of whatever she felt they would love for her to come back full time. And she said, you know, for the last year, once she was homeschooling, this is how much I can do. And so we do have the ability to, you know, really jump that up. So for the zero interest loan, like my argument for that is it's still risk, right? It's still you carrying this $800

payment every single month. And the truth is, if one of you were to stop working or lose your job, you'd feel the weight of that very, very quickly. It's an $800 payment and you'd probably jump to pay it off. Or you'd be thinking, oh my gosh, I wish we had paid this off, right? And so kind of thinking about it through that lens makes you realize the weight of it and so yeah i would immediately pay that off i'd sell the stocks in order to do it and the bathroom yeah for the bathroom so you guys will get insurance how much extra have you guys priced anything out how much extra would you need to get the bathroom yeah so we kind of went through like our hey this is like what we would love. This is, so the insurance covers $27,000 of our, of, of, of restoration.

And then, um, on top of that, like for the total of like everything we were looking for, I think we were looking at like 45,000 and then we got kind of, we got some breakdowns of like, okay, if we just did certain parts of it, I think we were kind of looking closer to the 35,000. So we would be, you know so you guys need about seven dollars above so what i would do honestly matt is i mean what bathroom is it is it the master it's the master bathroom and what are you guys using now just another bathroom the kids bathroom or something yeah so honestly matt yeah so here's my thing i would because i because i get it if you're going to redo a bathroom do it and you're already in the construction you know process do it but do it with cash so

save that seven grand pay off the debt today or the stock right like get that done with um build up some savings and then on top of that um save up an extra yeah seven thousand dollars and cash for the bathroom and for six months like had friends, they redid their kitchen. They basically lived upstairs and lived in the garage with their microwave. I mean, like people, you can do this. You'll have the $800 back that you were paying. So you'll be able to do it really fast. Yeah.

So just, yeah, you guys save like crazy in cash flow. Because I'm telling you, especially with remodels, if you take on debt for this, it creeps up and creeps up and creeps up because you don't feel it. And it's like, oh, yeah, well, we'll update that. Yeah, an extra $400. We'll do an extra $2,000 here. Oh, but I really like all the glass around.

And that's an extra $5,000. That's OK. Just add that. You know, like it just starts creeping up, Matt. But when you use actual cash, it forces you to make decisions. And again, we're adults here. We all get everything we want all the time. So live within your means and keep that practice

because this whole idea of, well, we'll just reach in and get some debt for things that we kind of want. We'll upgrade the HVAC system because we want it. We'll upgrade the bathrooms because we want it. Dangerous. Yeah, you're going to live in that cycle forever and ever, Matt. It's not worth it. So have some discipline.

Save and do it well. But yeah, shower in the kid's bathroom. Everything's gonna be fine. You'll be fine. I promise for six months, you'll be fine. But save up and cash flow and get you an awesome bathroom. Our scripture today comes from Philippians 3, 13 through 14. One thing I do for getting what is behind and straining towards what is ahead,

I press toward the goal to win the prize for which God has called me heavenward in Jesus Christ. Booker T. Washington said, You measure the size of the accomplishments by the obstacles you have to overcome to reach your goals. That's good. That's really good. Love it. Love it, love it. All right. Up next, we have Jacob in Grand Rap goals. That's good. That's really good. Love it. Love it, love it. All right, up next we have Jacob in Grand Rapids.

Hi, Jacob. Welcome to the show. How are you doing? Thank you for having me. Absolutely. Recently in this year, I've had a change in my whole money, and it's really been having, you know, $3,000 and a checking account for emergency,

putting everything else towards a high-yield savings account or cash plus account to some banks. And then, you know, maxing out my Roth IRA as much as I can every year, as well as, you know, traditional brokerage investments. But it really got me thinking, it's like, can you live with these cash plus accounts or high-yield savings accounts, considering that they accept direct deposits and bill pay and, you know, you can deposit checks? Can you only live with using a high yield savings account with a credit card? And if so, what's the disadvantage with that without going through, you know, your traditional local bank or even your commercial bank like the bigger ones, right? Yeah, well, from a high yield perspective usually you have a limit on how many withdrawals you can have so you can't use it like a full checking account sometimes they have a limit of five um is is what i see most of the time and um but yeah

you will get a debit card and a um checkbook with that so you can you can you know take money out of it but you can't i mean if you think, you know, take money out of it, but you can't, I mean, if you think about, you know, the expense, I just think about my every dollar app. And when I open it, it's like 15 transactions, you know, and it's like an Amazon, an Amazon, grocery, Netflix. I mean, so you're, you're, you have a lot of transactions coming out that will not, it'll, it'll exceed the limit of most high-yield savings accounts. I see. Yep. So there really isn't much as long as, you know,

whatever company you go with, making sure they don't have those limits and whatnot for a high yield at least. Well, they do. They will. Yeah. A high yield usually does have a limit of how many withdrawals you can have per month. Yeah. So a traditional checking out.

Now, I will say, Jacob, there are some, and we're actually kind of in talks with one right now, possibly for the Ramsey Show. There are now banks that are offering a higher percentage rate, maybe like a 2% to 3% for checking. Just a normal checking. Yeah, which is great versus I think our checking is like less than 1% or something. I don't think we basically get anything from it. So there may be some more on the market that are great it's not it wouldn't be considered a high yield savings it would be considered a checking account um but there are some banks that are offering usually

online banks are offering more of a higher interest rate on just a traditional checking account so that's something you could look into if you wanted to. No, that is true. I've been seeing that with a lot of banks. Like I'm looking at one or like it's Vanguard. That's the one I was looking at. It is labeled a cash plus account. So it might not be a high yield. I guess that's where my kind of question or to myself was a bit confusing. But the main motivation behind it is, you know, making my money work for me. Right. And making sure that it's not sitting in, you know. Yeah money work for me right and um making sure that yeah it's not sitting in you know yeah for sure but i would say the account that the money you have in your checking or the way i look at it jacob is that money's sitting there not to make me money

it's to keep my life afloat i mean that that in my investments are there to make money for me just like you're saying my high yield savings it's there for a little bit of that bridge mentality of like, we have a lot, you know, we had a good amount of money in our high yield because we were building a pool. So we were writing some checks out of it throughout this past year. But I'd rather it sit in a high yield savings versus a checking account. But yet, I know my high yield savings is not where I'm going to make a ton of money. And that's not why it's there. It's fine to have it sit there, some savings, because it will make more than a checking account. But I look at, for me, my investments from retirement. Winston and I have a separate mutual fund. And then we also

have some real estate. So I look at those as where my money makes money, not necessarily my high-yield savings or my checking. So I wonder if from your mentality perspective, Jacob, to kind of like loosen that a little bit and maybe maybe put some more like emotional parameters around these accounts. I think so. It's also about the habits you're forming. Like when when you tell me that I'm thinking you're building the habit of I have a block of savings and I can pull from that block of savings for normal every day. Do you know what I'm saying? Yeah. As opposed to when you're checking accounts in your checking account, I only use this for day-to-day, you know, day-to-day purchases.

And my savings over here, I only touch it if it's an emergency. And this HYSA, I only, you know what I'm saying? So you're building those habits. And when you blur the lines like that, I think also to Rachel's point, it just, I think it causes confusion. Yeah. Yeah. Personally. But yeah, I wouldn't do it. There are definitely worse things you could do. Right. That's what I'm saying. But I wouldn't do it. Yeah. Does that help? Yeah. That's, that's where, no, it definitely does help. And you know, that's where I'm going.

Eventually I have money set aside. I mean, a little background for an investment property, a multifamily unit, and it's just been sitting in, you know, I think like a 0.1%. So I was like, you know, I got to move this. Yes, for sure. And I would say this too, Jacob, if that, I love that real estate goal for you. And if it's going to be longer than five years, you could even drop that in the S&P 500 through Vanguard if you wanted. There you go. If it's longer than five years, you could invest it. It's going to go up and down. It's not going to be as steady as just a high yield savings, but high yield savings, you're only going to get four to five percent. Now, if it's less than five years, I wouldn't probably risk it putting in the market. But if you know it's going to be longer than five years, you could drop part of it, you know, maybe not all of it, maybe some of it, maybe all of it into just the S&P. Yeah, that is very smart because it compounds

and it's a good performance. Yeah, for sure. So again, that answered my question. Okay, perfect. Well, thanks for the call, Jacob. You're a sharp guy, sharp young guy, sharp young man to be able to be thinking about all of this, which is great. is great so again you guys just to kind of like clear that up you know you want to have your checking you want to have some savings and we love a high yield or a money market account but in that you're going to have your emergency funds some short-term savings that you're looking towards once you're debt-free and have your fully funded emergency fund maybe your down payment you're saving up for could go in the high yield and then beyond that be investing and retirement is your number one priority with investing 15 of your income will go into that and that's roth iras yep 401ks 403bs now i keep my i keep my emergency

like sam and i keep our emergency fund in one high yield and then we keep another high yield for like renovation like things like that is that what you do i just like it over there yes that's how i am yeah that's how i am i'm like don't count that like like i like to forget it's even i know and i'm such the free spirits even though i'm like talk about money every day for my job and i'm always like hey babe out of all their accounts like well how much is in this and he like gives me the number i'm like that's not including the emergency fund is it's like no it's not in the emergency but i'm like never include the emergency i'm like i just can't even like emotionally yep go there but

uh but yeah those are those are some great questions and you know we were um the high yield savings the returns have gone down a little bit we saw them they were they were crazy they were like 5.5 at one point it was wild wild wild wild so that's always a thing to remember too in the economy when interest rates go up. It's bad when you're in debt because you're having to pay that interest. But when you're earning

the interest, yeah, it might be great. All right, let's go to TikTok real quick. We'll close out the show with a little TikTok. We got Brian and he said, because of your show,

we're living the dream. We retired early and we're traveling the country in our RV and we can't stop saving and eating cheaply. How can we eat steaks ripped seafood without guilt i thought it's that without a grill wait wait basically how

do you enjoy life on baby on baby step i think they're on seven i think they're they're done they are living the dream so i'll give you my framework for like so basically they're feeling guilty about their spending is that what they're saying okay they have the money So I love this because Sam and I sometimes feel the same way. Like whenever you've gone through a struggle and you've sacrificed to win, you do, it's like, oh, like you're afraid you're going to mess it all up. Right. And so here's what five pillars of personal finance. And if you check the boxes, then you're a financially responsible adult. Love it. So number one, are you living on a budget responsible adult. Love it. So number one, are you living on a budget?

Okay. Green check, ding. Number two, are you a person who is living out of debt? Like you're out of debt, you don't have a debt. Ding, check that box. If you're, I carry the proper insurances. Do I have the proper insurances? Yes, check that box.

Am I a person who's saving for the future? Am I doing, you know, my 15% to retirement? Am I doing the 529? Am I investing in my, you know, forced savings account through my home? Ding. And am I prioritizing giving?

If you're green checking all those boxes, permission to spend, to use your phrase. Enjoy some life. I love it. I love it. I hope that helps, Brian.

Enjoy the RV life, the retired life that is. I love it. Oh, thanks to all the guys in the booth for helping out. Jade, thanks for the great hour. And remember to take control of your money and create a life you love.