The Ramsey Show - App - Normal Is Broke... Do You Really Want To Be Normal?

Episode Date: November 12, 2024

It's a bonus session. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and bestselling author, Jade Warshaw. And we'll be answering your questions about life and money, relationships, career. So give us a call at 888-825-5225. So we're going to start off in Spokane, Washington, and we're talking to Jules. Hi, Jules. Welcome to the show.

Hi. How are you doing? I'm okay. I'm just a little bit stressed. All right. How can we help? So I'm a single mom on government assistance, and I'm just feeling really stuck in the system. Okay.

Tell us more about what you're receiving and what's causing you to feel stuck like so I have food stamps and then I have like uh Medicaid or whatever for for me and my my kiddo um but I'm just feeling stuck because I had gotten a job over, like, the summer working at, like, a daycare. Uh-huh. And I couldn't accept the position because I, um, sorry, I'm nervous. That's okay. You're fine. I, um, like, I had to run it past my complex because I live in low-income apartments.

Uh-huh. like I had to run it past my complex because I live in low income apartments and they, they up your rent, like a percentage of your, what you're making. Yeah. And I had told them like that in the, when I moved in my apartments around April, um, that I was getting child support at the time. And I was was like I don't know six hundred dollars but then they can't sorry this is confusing they can't adjust that until another year okay so they can't fix that I'm not getting child support anymore so the six hundred dollars stopped and now your rent is higher okay Okay. So tell us. So I had to give up my job so that I could keep my benefits. And, um, well, I had gotten my son into daycare, but the daycare funds for low income are now not, they don't have any funds. What is your income? I'm like, okay,

what is your, I don't have any, I I'd say like my mom helps pay for my car and my phone. Okay. And then I get maybe $200 child support, maybe. Okay. Is that. And what are you making? Oh, nothing. Why not? You don't have a job. So because what you're saying is when you went to actually start working, then you basically priced yourself out of the situation you're in from your apartment to everything else. Is that right? Right. Right. So like I was losing more than I was making.

How quickly will your rent, because you said it will take them a year to realize that you're not getting the extra $600 a month. Will that same be on the other end that if you start Working and making money will they raise your rent Yes But why would they raise it but not lower it Depending on your situation I don't know Honestly I'm really confused about it

Because I would get some information Because here's I could understand Yeah, I would get some information, Jules, because here's the thing. I could understand the rock and the hard place that you're in of like, okay, once I start this track of actually making some money, then the life as you know it will change. But I want to encourage you, the life as you know it will change to something better. Something that you have way more say over your life. You have way more choices and options and freedom and opportunity to do some amazing things. And so that jump is

going to be scary. And I want to help you real quick. We just have a few minutes to try to set you up well for when that jump is going to occur. Not if because i do i want you i want you to be working and i want you to be able to support is it do you have one child yeah okay as a toddler he's he's almost two okay and your mom's helping you out a little bit with child care it sounds like well she doesn't help me with child care just just with finances oh okay just with your phone and your and your car so with your car do you have a car payment that she's paying or is she helping you just with gas and everything else just with just with gas and like insurance okay okay um so i think i think the way we work this backwards and we're going

to give you all the materials that you need to get started but the way to work this backwards is what's what's that threshold of you losing your benefits so figuring out that what that is and then figuring out okay if I do that how much more do I need to support myself have you kind of done that math and said here's what I need every single month in order to survive absolutely yeah no I have done the math and when I when I had uh qualified for that job I actually sat down and went through all the finances okay and like I'm in counseling, I go to like doctor's appointments and things like that. And I kind of did the math and I was like, okay, I'd be losing more than I was making. And then the insurance for the new

job wasn't kicking in until 90 days. And so I was like, oh shoot. Okay. But what do you need? What is that? What's the number that you say? If I get, you know, $3,500 a month or $4,000 a month, I will be able to pay my rent, my car note, my kid goes to daycare, and I, you know, we have groceries that you're covered. What is that number? So I haven't, so I didn't take the job, so I kind of lost track of the finances. But let me, let me ballpark it. I want to say, like,'s your homework maybe like honestly how

much i maybe a thousand because i'm thinking like i have my phone if i were to pay all my bills myself like what about housing because will you price yourself out of the current situation you're in yeah so i'm in the income so probably we're talking about a situation jules to be clear we're talking about a situation where you don't have government assistance where you are paying your rent but like not you are paying low income apartments either that's right i'm talking about a situation where you pay for everything and you're no longer maybe two thousand okay so you need two thousand a month. So what I want to encourage you is that's out there. It's out there today. And it's going to require you working more than 40 hours a week,

possibly. But I mean, you can go over, there's a lot of places like Walmart and even fast food that are paying over $18 an hour if you can work your way up. So it's out there. I think right now the biggest thing that you're dealing with is this kind of mental block because you're used to this. And it's very hard to get your mind around something that you've not really experienced. Right. And you're like, oh, my gosh, I need this. I need this. And the truth is you're not far away from being completely free from this yeah and i would and i would tell you jules too we especially when it comes to money the more facts you have the the easier in a sense being able to process and make decisions becomes because when it's just this idea of like gosh i

don't even know how much we spend here i don't know what apartments will cost so like to jade's point earlier your homework would be to find actual numbers, actual numbers of a one bedroom apartment somewhere, actual numbers of, hey, here's really do what I spend at the grocery and per week. Here's what I think it will be. And it doesn't sound, you know, it's not this. I don't think it's going to be this outrageous number. I mean, just like what you just quoted us even.

I'm like, yeah, $22,000 a month. I mean, that's $25,000, $30,000 a month. I mean, that's 25, 30 grand a year after taxes. So like that, that is very, very doable, Jules. And so if you stay on the line, Kelly's going to pick up because we want you to be able to have the information to help you. So we'll give you Financial Peace University, which is our nine lesson course. We're going to give you every dollar, which is every dollar premium to hook up to your bank to actually create a budget. And when those transactions come in, Jules, actually track them and drag and drop them and start telling your income when you get a job, hey, this is where it's going. And then we'll

give you some of Ken Coleman's material because there's a get clear assessment. And I want you to take this, Jules, because I want you to have the ability to see yourself and your giftings and what you're wired to do and find a job in that lane. So we believe in you, Jules. You're doing an incredible job as a mom. So stay on the line, Kelly will pick up. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas

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So you can go to ramseysolutions.com slash store or click the description if you're listening on podcast or watching on YouTube. All right, let's go to Anna Marie Island in Florida, and let's talk to Amy. Hey, Amy, welcome to the show. Hi, how are you guys? We're doing great. How can we help? So I'm a little confused as to where to go. I own two properties. One of them is on the island and that property I owe about $400,000 on. It's worth $700,000. My monthly payment with HOA and everything is $4,500. I own another property just over the bridge. It's a bicycle ride to the beach.

That is an Airbnb property. I've been making about $50,000 a year on, but I don't owe anything on that property. That is worth about $650,000. What I am thinking of doing is selling my property on the island. I'm kind of tired of the HOA stuff. And actually, I'm in the process after Hurricane Milton renovating my Airbnb property right now. And I'm thinking I want to move into it. Wow. Thinking of selling a condo on the island and moving into the house just over the bridge. Then I'll have no house debt. I have $200,000 in cash after the renovation left over. And then if I sold the condo, I would make $300,000 profit off of that. So I'd have a half a million. The only other debt I have is my car, which I just bought.

What's that? It's kind of against Dave's rules, I know, but I just bought a new Infinity Iowa $70,000 on that. So that's a $1,300 a month payment. I have a $70,000 IRA, a $20,000 Fidelity account. So what's wrong with doing this deal and moving into the Airbnb and selling the one on the island? What's wrong with that? It's not what's wrong with it.

I think that's a smart decision. The question I have for you guys is, so I'm a real estate broker. I've done real estate, you know, renovations, flips, building all my life. I'm a single woman, 55 years old. If I did this move and my condo actually sold and I got into the house, I'd have a half a million and I need to know what to do with it because I'm most likely to want to buy real estate and fix it and do all that. And I'm not knowledgeable at all about the stock market.

I'm trying to just wrap my brain around all of it and learn because I'm getting to the age where I want the money to work for me instead of me working the money, you know? Yeah, for sure. Yeah. How old are you? I'm 55. Okay. And what do you do for a job? I'm a real estate broker. Oh, that's right. You said that. I'm sorry. How much do you make a year doing that? Well, that varies quite a lot, but anything from $100,000 to $300,000 a year. Okay. And then your primary residence where you live now, what is the situation there? So the condo on the island is, I owe $399. Is that where you're living? Is that condo?

It's been my primary residence. Oh, it has. Okay, I'm sorry. I got you. Okay. Perfect. I'm down the dare being now renovating it, but I'm thinking about moving here. Yeah, that's great.

That's great. Okay, so the $500,000 cash I mean What I would do honestly with it Is I would take some of it I would diversify it And I love the idea that you like real estate And maybe because I come from a real estate family

But I think it's a great Option to have especially if you know what you're doing And a lot of people don't but you do Because you live in this world And it's a great way to invest so i would take some amy and i would um probably max out uh a roth ira every year i would make that part of my rhythm i think it's seven thousand dollars per year that you can do so i would allocate some money to make sure that you had the cash and that can come out of just your income that you're making anyways it

doesn't have to come out of this five,000 what is your income she said anywhere from 100 to 300 yeah anywhere from like 100 to 300 yeah so a little more than that yeah so I would so yeah so that would be I think that would be something I would do and then I would still you know I think your your IRA um do you have any other retirement investing do you like within your brokerage any kind of 401k or anything i've always been i've always felt like i've always felt like i do better with real estate than i do with like yeah i've stopped have always scared me you know it's always sure and i've known well and so let me tell you this there is a level of risk that I wouldn't take in the stock market when you think about single stocks. And there's ways to do it that's risky and then ways that actually have way less risk.

And you still get a great rate of return on average anywhere from 10 to, I mean, 12, 13 percent. I mean, this past year, the market did incredible. So it was even more than that. But doing mutual funds, investing in mutual funds, which is going to be 90 to 200 stock within a fund. So no single stock investing, all of that. So really you limit your risk when you spread your money around. And so that would be the bet that I would do. I mean, I would do anything I could to do some tax favored plans in retirement.

So that would be your Roth IRA. Yeah, within your brokerage. I don't know if you're if you do you own the brokerage or you work for someone. I own the brokerage. So I would look into like a I would look into it like a SEP. I mean, I would look into an individual 401k. Yeah. I would look into a couple of options just to put some money in from a retirement standpoint, because that is going to be, it's going to have more tax advantages than just going into the market on your own personally. So I would, I would allocate some money for that. I would look around. I mean, I don't know what real estate is going for in your area, but I mean, if you can find something and pay cash for it and have another rental property to the side, I mean, I think

that's, I think that's a great option as well. So yeah, there's nothing, you know, you can't, I wouldn't say do anything completely wrong unless you took all this money and just like blew it or put it all in like one single stock or something. But I think real estate and some in retirement would be great. But I would also recommend sitting down with one of our SmartVestor pros.

We actually just met one in the last break that's here from Seattle. And a SmartVestor Pro can sit down and really help look at all of this with you as well. And just kind of your long-term plan of retirement, long-term goals that you may have and be able to let this money work for you in that way as well. Yeah, I think that you're doing well. The thought I keep having is, you know, a lump sum is going to double every seven years. So let's say you sold the house on the island, you got the 300k. Let's say you dropped that in the bank, and then you invested the cash that you

have into real estate. I mean, if you do that, and you continue to add 15% of your income every single month, I mean, in 10 years, I mean, you're going to be looking pretty good. You're going to have around 1.3 and that's just assuming, you know, you're kind of midway at that midway point in your income. It's not assuming for the months that you're making 300 or the years that you're making 300 and above.

So you have a really great horizon on this and way to go. Good job. Yeah, that would be some good numbers to kind of play with. If you go to ramseysolutions.com, our investment calcul's there. And plug in some of the numbers and just say,

what if I just invested all this $500,000 in a mutual fund? Because if it doubled every seven years, it's kind of the rule of seven, that could be exciting to you. And it may be less work and headache as real estate. But if real estate's something you love too, maybe you take some of this and buy a paid for property. Thanks, Amy, for the call.

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Up next, we have Brent in Cincinnati, Ohio. Hey, Brent, welcome to the show. Hi, Rachel. Hello, how can we help? So I'm wondering if I'm able to purchase a car for my wife. We've been leasing to own for the three years, and upcoming December, we can purchase it for $19,000.

The same car is valued at $23,000. Okay. So you've been leasing it for three years. What was it worth when you started? I'm just wondering how much it's depreciated. How much? No, how much it's depreciated. How much? No, how much was it worth? $28,000.

Okay. Okay. And now it's worth $19,000, but you're saying you've seen it other places for $23,000? Is that what you're telling me? Yes, with the same mileage, the same year. So it looks like a good deal. Yeah. Do you have the money?

And do you like the car? We like the car, but we don't have the money. So we'd be getting a loan through my credit union. Oh. And what's the alternative? You just give it up? Yes. My wife's very attached to the vehicle and doesn't really want to consider any cheaper options. Yeah. Listen, I can understand that. Go ahead. Well, yeah.

Why is she attached to it? She just likes it a lot? She likes it a lot. Well, the fact that she's not going to be able to consider it. Is she sitting there with you, Brent? Tell her hi for us. What's her name? Elizabeth.

Hey, Elizabeth. So, yeah, I mean, when you put yourself in a position when you purchase something and say, well, I don't want to look at anything cheaper, you've kind of already made your decision. I mean, if you guys don't have the money and you don't look at anything cheaper, I mean, I guess the only thing that you guys have decided at that point is, yeah, you're going to take a loan out and buy the car. We would advise you

differently. And so you called the show. So we'll give you our advice. I don't know if you're going to want to take it because what you'd realize is you've been, you've been basically renting this car for three years. In the most expensive way possible in the most expensive way yeah and i know you know you can't really tell the interest rate on a lease car but when people you know actually ratio it out it's it's high it's it's usually more expensive than if you went got a traditional car loan so then you're going to take a $19,000 loan pay interest that. And then we're going to look up in four to five years, and this $19,000 car is going to go down to probably $10,000 or $12,000 in value. So when it comes to cars, it is one of the places that financially speaking,

I mean, it's kind of one of the dumbest debts you can get into from a financial perspective, because again, you're borrowing money and paying more on that borrowed money because of interest on an asset that's going down in value versus like a house, a mortgage, right? You take out a mortgage, you do pay interest on that loan. But the value of that home is going up at the same time. So the car itself is not a wise purchase to make when you don't have cash for it. So my next question to you guys would be,

do you have any cash available to you? Do we have? No, we don't. We're still trying to get over some credit card debt. Okay, good. How much debt do you guys have? We have $4,000 on the credit card. And then we have a few monthly payments.

What are those? We're paying off our wedding rings, which we have $7,000 left over. Okay. And then we have a personal loan we're paying back my parents, which we owe about $2,500 left. Okay. And I'm doing $500 every paycheck. Okay. So towards the end of January, the $500 a month will clear up.

Okay. How much do you guys make a year? Close to $40,000 a year. Combined? Combined. Yes. Are you both working um my wife is looking at getting a new job that could make more money soon but we just don't have the money yet and i don't want to make

decisions on we'll have more money later yeah i want to make the decision for sure we have absolutely which is very wise very very wise so yeah a forty thousand dollar income there's no way i would take a nineteen thousand dollar loan for a car no you can't afford it do you guys have kids yet no not yet listen i'm gonna throw something wild out here and roll it over in your minds and in your hearts tonight but she's not working yet you don't have children when it comes time for this lease like you let it go but if you have to be a one-car family for a couple of months while you save up what's the harm in that just a thought yeah i suggest that my husband and i did

that while we were trying to get out of debt. We got rid of one of our vehicles and we were upside down, but we got a small loan for it to get out of it. And then we had one, just our single car, we paid it off. And then we actually found that it was doable for us for quite a while. And we stayed that way. And then when it was ready time for us to have a second car, we bought it in cash. And for you guys in this season of your life that actually might work out better for you than a lot of other couples because she's not really working yet and and i'm going to say this brent and i'm going to be very as kind and fun as rachel is this comes through but the what the life you guys just described to us from a financial perspective only

is so normal yeah you know, you have a personal loan to the parents for, I'm not sure why, you got wedding rings, you didn't have money, so you guys took out a loan, you have some credit card debt, you have a car lease. Like, this is, you guys are, y'all are the normal Americans out there. But the problem is, Brett, normal is broke. Normal is 78% of Americans today are living paycheck to paycheck meaning if you miss a paycheck you don't have enough to cover your bills so if you guys decide that you want to continue to live normally then what you guys have have so far decided is that and and normal would be to go get just keep the $19,000 car because you like it. That is normal. And you will have normal results because

of it. But what we encourage people is to flip all of that onto their head and actually say, what is the weirdest thing we can do? Because if I get the results of normal, which is paycheck to paycheck living and not being able to build wealth and not be able to invest or save for the future or have any amount of money in savings, like I don't want to be normal. That's not where I want to be. And if you guys look at each other tonight and say, we don't want to be that. We want to be people that have no debt. We have an emergency fund. We're actually funding some retirement for the future. We have a house that we can afford. It doesn't stress us out. We have margin in our budget. Like this life that can be created, Brett, is possible possible totally possible

but you can't get there if you keep doing normal things so what jade's saying is a one car family for a couple that doesn't have kids is that inconvenient yeah is that weird yeah but you know what you don't have a car payment because that car payment on the $19,000 car it's going to be $600 that you guys don't have. So you have to make different decisions if you want different results, Brett. And that's going to mean not taking out a loan for a car. For you guys, the reality is a one car family. It's saying goodbye to my emotions, saying goodbye to what I want and what I love and all the things that got me to this place. And you put all that aside and you guys are like, we're adults.

Yeah. We're adults. And we're going to make adult-like decisions and we don't have the money. We can't afford this car. You can't afford this car, Brett. At $40,000, you can't afford half of your annual income going to the value of a car. It's not good. That's not wise.

And I would be working like crazy to get your income up. And I would start working to get out of debt I mean you guys could get all this paid off your debt's not crazy I mean it's you know $2,500 $4,000 like you guys can get this cleaned up really fast if you just say we're gonna be weird and we're gonna work 60 hours a week because we don't have kids and we're gonna take side hustles we're gonna drive uber right I mean like here's Brent here. Let me put this in perspective. Here's a couple of interesting statistics about about cars, because I want you to never go in and have a car payment again. Number one, Rachel just said 78% of the people living paycheck to paycheck, right? 85% of people who buy, who get a car, take out a loan or a lease to get it. And I think that's a very interesting correlation. Almost everybody. Almost everybody,

which is almost the same percentage of people living paycheck to paycheck. And for most people, that car payment is about $525 a month, which is very close to where you guys were at. And if you invested that instead of give it to a car company, what would that be, Jade?

Well, think about it. Most new car payments are over a term of six years. If you had listened to us and invested that money over the last six years you'd have eighty five thousand dollars instead of a car debt that's gone down in value and so be weird brent be weird i think one of my favorite things right now in life jade is i will hear that, and not to point fingers at generations, Gen Z will come up with. And you hear it and you're like, well, that sounds familiar. I think we've been doing that.

It's already a thing. One of them was cash stuffing. This was like two years ago. They came up with someone on TikTok was like, we're going to cash stuff, which means you take cash and put it in different compartments like envelopes to pay for things. And they're calling it cash stuffing. It was this new like, that's such a wise idea. How smart. You know, it was a new trend.

And we're like, that was the envelope system. Rachel has been having wallets. Or yeah, I was like, I think we have a product for that. We have a wallet for that if you want that. Another one was like they have it. they call it dinner parties yeah and like and everyone brings a dish so instead of going out to eat you bring a dish and they're calling it a dinner party like isn't that a potluck like is it haven't we been doing this like in the baptist churches even like the negative stuff they were calling like what we would call financial infidelity they were calling it stealthy spending oh like stealthy to like get around the spouse of your purchases yeah

so yeah these these things that have been going on they just kind of put a little genzy like sprinkle dust and excitement a little glitter on it and make it a little bit exciting so there's a new trend okay um that they have come up with and it's now like trending on social and it is called slow shopping is what they're calling it where it means you don't just buy something when you want it you wait to see if you really need it what a concept vetting a purchase so uh slow shopping it's become a big trend now among the gen z-, which we applaud. We are all for this, this quote unquote new trends. Mindful buying. Yeah.

But the idea is that again, shoppers are now cautioning each other to be slower when they're making purchases, not go off of emotion. And even if there are deals and promotions still wait to see if you need it. Don't fall for those traps. Wow.

Which is very smart. So yeah, wait to see if you need it don't fall for those traps wow um which is very smart uh so yeah the the whole idea of spending and consumerism um has always been something we've talked about here but the slow shopping um yeah we are all for gen z this is wild this is wild and crazy to me and then and then there's another one and then ready for this one okay this is on tiktok this is the latest financial trend that's called under consumption core is what they're calling it where it basically means that you don't buy anything that you don't need what a time to be alive so you just use what you have already and that's all and if you you know actually have something you need then you can buy it but if it's just something you want we're not buying it and they're calling that under consumption core which again has been around

forever jay you know this whole idea of like um you know being more part what's the core i don't know i hear these terms and i'm like i don't know i don't know what it means okay kelly may be able to tell us she i feel like she's like in the trends she's like i don't know either um yeah but under consumption core is what they're calling it. But again, this consumerism and this idea of what we've been teaching at Ramsey for decades is, yeah, if you don't have the money, don't buy it. Your needs versus wants is always something to consider because there will always be a new and better thing. But if you don't have the money, don't buy it. So I'm glad that Gen Z's picking up on it.

This is good. This good and it reminded me of there's a saturday night live old skit old skit with like steve martin oh yeah amy poehler i think do we have it okay let's let's play that this is this reminds me of i just can't get these numbers to add up like we're never gonna get out of this hole. Credit card debt. Does it ever end? Maybe I can help. We sure could use it. We've tried debt consolidation companies. We've even taken out loans to help make payments. Well, you're not the only ones.

Did you know millions of Americans live with debt they cannot control? That's why I developed this unique new program for managing your debt. It's called Don't Buy Stuff You Cannot Afford. Oh. Let me see that. If you don't have any money, you should not buy anything. Hmm. Sounds interesting. Sounds confusing. I don't know, honey. This makes a lot of sense.

There's a whole section here on how to buy expensive things using money you save. Give me that. No, honey, this makes a lot of sense. There's a whole section here on how to buy expensive things using money you save. Give me that. And where would you get this saved money? I tell you where and how in chapter three. OK, but what if I want something, but I don't have any money?

You don't buy it. Well, let's say I don't have enough money to buy something. Should I buy it anyway let's say I don't have enough money to buy something should I buy it anyway no now I'm really confused it's a little confusing at first well what if you have the money can you buy something yes now take the money away same story nope you shouldn't buy stuff when you don't have the money there you. What a concept. Such common sense. Such common sense.

So yeah, America, follow Jen's ears. When you're going to buy something, especially this holiday season, be a little slower with your purchasing. Make sure you have the money for it. And if it's not a need, maybe you skip it. Maybe you skip it. And live in that under consumption core uh trends it's just so great i feel like it should just be under consumption yeah i don't know that's it

talking to two millennials oh wow okay oh all right let's go to san antonio texas and regina is with us hey regina welcome to the show hi Hi, first off, I'm 26. And the fact that I only know about the underconsumption makes me feel so old. But you also forgot about the de-influencing. So now influencers are trying to de-influence people. Yes, I love, I actually really like that de-influencing trend. Yeah, same idea. Well done.

Thanks, Regina. Thanks for the, yeah, keeping us young. I got you. So good. So good. How can we help? So, Regina. Thanks for the keeping us young. I got you. So good. So good. How can we help? So yeah, so obviously, right now, I am super, not obviously, but I'm on the show now. So I am Dave crazy right now. And I'm in baby step two. And I feel like I don't know if I've made his name a cuss word just yet. But I do know that a lot of my friends, they know I'm on it, and they support me. And I feel like some I've been trying to lot of my friends, they know I'm on it and they support me.

And I feel like some, I've been trying to spread the word about it, but I have a little cousin and she looks up to me a whole lot. She just turned 18. She just entered college for the first year. And I really want to try to go about that conversation of finances with her because I know when I was 18, my prefrontal lobe wasn't um developed yet right so like anything that anybody would tell me I was like yeah yeah yeah like my mom swears she told me not to you know get debt but she also I remember her telling me that I could get a credit card when I was 18 so that's all I remember sure and so I'm trying oh no oh. Did we lose her? Oh. Let me put her on hold.

Okay. Yeah. Shoot. Okay, Regina, we're going to answer your question. I think our phone systems just got a little crazy. That was like the old school fax machine. That's what it did sound like. Somebody was sending us a fax.

Yes. Okay. So we'll talk through this, Regina. I'm so sorry we had to cut you off because of that. That's all right. We got it. I can't ask any follow-ups. But yeah, to be a great influence um I think is number one I appreciate you even thinking about people in your life and saying oh my gosh I know someone does look up to me and watches my decision

making and I want to be able to help them uh when it comes to this so first I'll give you my number one is always always always people are going to see what you do more than what you say. And so she's going to be watching you do this. And she may be watching you, you know, take on an extra job to pay off debt. She may be watching you say no to a vacation that all your friends are taking. And you're like, yeah, I'm not going because I'm paying off debt. Like as you live this out, that is going to speak so loudly. Because even like your parents, you know, they're like, you know, they may have said something,

but then also they're like, yeah, but you can get a credit card and they probably live with credit cards and live with some debt. And you just kind of follow what you know and what you see how people act as you watch them. And so by you just simply living, just know like that is a great starting point

because she's going to be seeing what you're doing and realizing oh she's not stressed about money yeah god regina has has margin to spend and she's like saying no to things and she's going to be watching your decision making i agree i think seeing that i think there's a couple areas that that really applies um and weirdly enough i think it's the same areas that we talk about couples being aligned on. People don't like for you to just strike up a conversation out of the blue about their money, their politics, their religion, how they raise their family, right? It's like, when you do that, it's like, wait, wait, wait, whoa, whoa, whoa, whoa. So to just like, even if it's in love, like bringing it up, it kind of

feels invasive because those topics are extremely invasive. And so I think Rachel's exactly right. Let your actions speak louder than your words. And they truly will. Like the fruit, you know, a tree by the fruit it bears. And if you guys do have a great relationship, you know, sitting down with her at lunch and just telling her what you're doing and just being like, oh my gosh, okay, I found this new show and I'm so excited about it. I'm paying and talk about what you're doing and not point the finger at her and just say, if you ever have any questions, please like call me. I want to talk about this and I'm so excited about it. I'm paying, and talk about what you're doing and not pointing the finger at her and just say, if you ever have any questions, please like call me.

I want to talk about this and I would love to help if you want help. Like I'm here for you. You know, just offering that door to be open. Thanks Regina for the call. Thanks everyone in the booth.

Thank you Jade for a great hour and we'll be back America. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with bestselling author Jade Warshaw, and we are answering your questions about life and money and relationships, career, anything and everything

We are here for you So first up we have Stacia in Nashville Welcome to the show Hi, it's Stacia Stacia, I'm sorry You're totally fine, I've heard it for all 33 years of my life I bet you have First and foremost, I am unapologetically fangirling.

You guys are some of my favorite hosts and personalities ever in the history of the whole show. Oh, I'm so glad. I'm glad we're here for you today. Oh, absolutely. They keep it 100 all the time. Rachel, you're just the best. You are kind. Thank you.

Yeah. Well, just a little context i have been following the principles of ramsay since i was 17 i'm 33 now wow um two and a half years away from being a baby steps millionaire oh my gosh that's amazing it's so grateful like so so grateful for the principles i come from a family that does not have money. And so I'm actually calling you today because I don't have anyone else to ask this question. So I am in baby step six. My husband and I are in baby step six. We are about eight years away from paying off our house fully. And I know you all say, I know the principals inside and out, but I know you all say to not purchase a second property until your first

property is paid off. And so we're in a predicament where we want to purchase land and then eventually build a small home on that land. And so we would love to throw like $50,000 at purchasing land, but I'm wondering and how to navigate big purchases while in baby step six, do we just like stay gung-ho for the next eight and a half years with like every extra penny going at the mortgage? Or like when do we have permission to save up a good chunk of money and make a big purchase? And is it okay that that big purchase is toward like one component of a second property?

Yeah, it's a great question. Is the $50,000, will that be enough to cover the land that you're looking at? Well, that's the thing. I'm from Nashville. Rachel, I know you're familiar with East Tennessee. So we know exactly what part of town outside of Chattanooga or East Tennessee that we would want to purchase. And so if and when the right land came available and we were able to jump on it, I want to be able to jump on it. And right now, a lot of land is going for a lot less because people aren't buying houses, primary houses, and especially not buying secondary property. So land has been cheaper.

And so I'm trying to weigh the options of like, do we go ahead and jump on it if something's in that 50 to 70 range? When you say jump on it, when you say jump on it, is that permission to buy something that's more than fifty thousand dollars like more than the cash that you have no we have so we have that tax um on top and that's what i'm wondering do i we have our emergency fund and we have on top of our fund extra cash fifty thousand do we throw that at the mortgage yes i'm like do we throw that at the mortgage and maybe go get the mortgage paid on a year faster or do we jump on land yeah because the land would you guys want to in your perfect world would you move there before eight years or is this like in 20 years no so this would just be a second enjoyable spot. We live in a city. We live like right downtown in East Nashville. So this land, this land would be like a little getaway space for

us to share with our family and for ourselves, just enjoying for us to get out in the country. When would you start building on it? After this first mortgage is paying off or what are you thinking? Absolutely. Yeah, I would buy the land. Yeah, why not? I would buy the land yeah why not yeah buy the land okay I just I don't know like hearing permission of like because it's associated with the second home like did that have to wait until the mortgage and I don't know I don't have anyone to ask like how do you like wisely go about it I know I think it's wise that you're paying cash it sounds like it's reasonable you have the money to do it and i think it really goes back to that teaching of once you pass baby step three things kind of you're able to live your life and you're able to focus on the things that are valuable to you and that you want to spend money on

and in this case you're going to continue to pay the house off and you're not building the residence before you're figuring out your primary residence. So for me, it's, I would, I would do the same thing if I were in your shoes and I cared about that. Yeah. And it's, you know,

$50,000, which is a lot of money, but it's also like, that's the price of a new car for some people and they replace their car. And they, you know, they, so yeah,

it's not like we're talking about $500,000 in the house. Your primary residence could be paid off today or something. It's a reasonable amount of money. Cause how much do you guys make a year? Combined, we're at $310,000. That's great. Okay. Yes, I would for sure.

I would, yep, I would save it. And I'll even go a little further because I'm such a spender. To really get what you guys want long term, if you're looking at other properties, you're like, gosh, if we had another $10,000, like that would be, you know what i mean like like don't because you're not in a rush don't cheapen the purchase by just being able to say we got it so really looking and i'm sure you guys have done your research and maybe 50 grand is just enough and like it's perfect and you're getting what you want. Slow shopping, Rachel. That's right. Slow shopping. To be able to get, you know, so maybe 50 grand really will get you guys exactly what you

want. And that's amazing. But I would also say you guys make great money. Yeah. You're in baby step six. You're doing great. And again, if you're like, yeah, but you know, 10 grand more and be disciplined in this. Don't let it go crazy.

But like 10 grand more would really get us this view here this that or you know whatever it is right maybe even pause a little bit save up a little bit more and get what you want as well what do you owe on your current house just curious we owe five 550 okay so you gotta you gotta wait we're on track yeah we've got about eight and a half years and my husband gets annual bonuses and sometimes they're 35 sometimes they're 50 so what we use is like we just live on the base salary and then those bonuses can either go to some of the mortgage or they can go to a big purchase and so we know that those come every year so i'm like okay we could add that and that could be extra going towards uh land you know a nicer piece of land

or you know it's not going to move the needle a ton in how early we pay off the house. We're pretty aggressive about paying it off monthly now. Yeah. I mean, the good news is, the good news is, and I'm not saying that this will happen. It doesn't sound like it would. But the good news is if you were to purchase something and then seven years from now, if you change your mind or something in your life changes, it's something that's gone up in value, hopefully. And you could sell it and, you know, you won't have lost anything.

So, because a lot can change in eight years is true. But yeah, if I were in your shoes, I'd do it. Would you guys use the lands between now and eight years just to go and, I don't know. Yeah, and camp. And camp and all of that. You would use the lands. Okay.

Yeah, that's great. That's what, and be flexible. Also like kind of camp and see where do we want the front of the house? Where do we want the natural life? Yeah, that's great and be flexible also like kind of camp and see where do we want the front of the house where do you want the natural yeah that's fun totally um but i just i i look at you know spots outside of chattanooga and east mississippi all the time and some some are going to auction and people just don't have the extra money and so they are going for a little bit cheaper um and we're we don't need a view we also just kind of want wooded seclusion so it's just up in the air i just wanted to get permission quote unquote permission um to make

a large purchase even if it is associated with a second property um while in baby steps because hadn't had heard anyone ask about that yep absolutely well i'm glad you called because yes you have our permission because you're paying cash. And it's a reasonable amount compared to what you guys make and overall your financial life. It's not adding risk. Yep. Nope. It's great. And congratulations.

Well done. That's always refreshing to hear. It's kind of that first generation of, hey, we're doing something different with our money. And hear that, too. Since she's 17, she's been doing this. Maybe not as aggressively in high school as you are when you're a working adult. But this is a marathon. It is a long-term play.

Yes, there are rhythms in your life at which you adopt good money habits, and you get to be a point to say, yeah, we want to buy some lands. So I'm so glad you called. This is The Ramsey Show. What does the future hold for business? Ask nine experts, and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down.

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With one unified business management suite, there's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to The Ramsey show up next in Boone North Carolina we have

Sierra on the line hi Sierra welcome to the show hi thank you absolutely how can we help um so my husband and I are living paycheck to paycheck and I was introduced to Dave Ramsey from my grandmother um now I have been trying for the past six months and I'm stuck on baby step one um and we're not getting anywhere we had half of baby step one and then everything happened with the hurricane and we're back to zero. Oh, man. Were you guys hit hard? Were you one of the towns? Yeah, we were.

So sorry. It's okay. It happens. But I feel like we can't catch a break. And living paycheck to paycheck is so hard for us. I am a full-time student, college student. I'm 29 and my husband works full-time, sometimes even over like overtime shifts just so that we can get by. And I just, I don't know what to do anymore. What's he bringing in income wise? About 49 to 50,000 a year.

Okay. And when do you graduate? I have about five semesters left, so I'll be finishing up in 2027. Okay. Wow. Okay. Are you working at all, Sierra? I'm not, but I pick up pet sitting shifts to try and bring in some money. I tried a full-time job and full-time college and it destroyed me. Okay. What are you getting your degree in? Biology. And what's the goal with that? What do you want to do? I want to go work on the coast as a marine biologist. Wow. Okay. Okay. So you're, he's bringing in 49,000. You're doing pet sitting. How much do you guys see a month? Like after taxes, after everything, what does that look

like monthly for you? Um, it's about three, 3,500. Okay. And what, how are you guys living? Are you renting? What are you paying for rent? We are renting. We pay a thousand a month for rent. Okay. Yeah, this is tough. The solution that you're looking for, I mean, people live paycheck to paycheck for different reasons. Sometimes it's our spending's out of control and we've got to, you know, rein the budget in and rein the spending in. And sometimes it really is an income issue. And it's, in this case, I think you're creeping up on an income issue.

I'm just wondering, what is your husband doing for work? What kind of work does he do? He makes fiber optic cable. Okay, and you said he had a side hustle too. What's that? He door dashes. Okay okay so i'm wondering i'm wondering if both of you need to sit down and kind of figure out okay what do we both need to do in order to make this work because to your own words it's not

sustainable are you guys going into debt like how are you covering the overages um we are door dashing every chance that we can get okay um just so like i can get to class and we can get food and sometimes mom helps us out okay so there's not you're covering the overage then so there's part of this and and there may be more that you can do income wise but there is part of this where you've said okay i'm going to go to school for the next uh three years and i'm going to become a marine biologist and by me doing that here's what we've decided my income is limited and he's in his career right now and so there's part of this that you guys have decided by you know by choosing this path and i'm not saying it's a bad thing. It's just we both understood that for the next three years, it's going to be extremely tight.

But there's a light at the end of that tunnel because you're going to be a marine biologist. What's a marine biologist make? It kind of depends. I'm trying to get a state job and that can range anywhere from $50,000 to $70,000. Okay, and how are you paying for school? Right now, I am pretty set with financial aid and scholarships. I've already finished my associate's and went through that with honors, so I've been doing pretty well with scholarships. So no debt, no loans. Do you guys have any other debt or any debt at all um yes uh i have three credit cards but it only adds up to about a thousand maybe fifteen hundred and i have a car how much is that um the total on it is $28,000, and I pay $668.

There's our problem, Sierra. You've got to sell that car. You've got to sell it. And I'm trying to figure out how to sell it, but I'm not sure because I'm $13,000 split on this car. Ooh. Wow. Okay.

So you owe $28,000, and this car. Ooh. Oh. Wow. Okay. So you owe $28,000. And how much? And you're saying you really can't sell it except for $15,000 is what it's worth? When I had it, because I went and had it appraised at a dealership. Okay. And they said they can only give me $6,000 for it. Okay. So don't do the dealership route because they will always give you a much lower rate

than what you could actually sell at private sale for. So go on kellybluebook.com, put in all the info, and just see on the high end what you could get for it, okay? So the dealership told you how much would they pay for it? $6,000. Oh, my gosh. Wait, $6,000 and you owe $28,000? What kind of car is it? $6,000. Oh my gosh. Wait, $6,000 and it's a 20 and you owe $28,000? What kind of car is it?

It's a 2017 Jeep Cherokee and I have 162,000 miles on it. Okay. What, what is your husband's drive? What's his deal? He has a motorcycle that's paid for. Got you. And we have a, we call it a hoopie. And it's just a really old beater that's also paid for. What about the motorcycle? What's it worth? About $4,000. Okay.

Yeah, I would, okay, I think, yeah, I would be selling this car Sierra for sure and even if it's even if you can only get 16 000 for it i would rather have a 16 000 loan than a 28 000 loan does that make sense like that's gonna that's gonna change your numbers a whole lot and if i were you guys do you guys have kids we have a two-year-old you have a two-year-old okay um yeah i mean i i might sell the motorcycle and take the $4,000 and get a beater car for you and then sell your car yeah I mean honestly because you can always go back and get a motorcycle again but you guys I mean to your point I mean it's going to cut that payment down when she gets a loan for whatever it is half possibly yeah I mean it'd be yeah you guys would have an extra $300 a month Coming in Yeah so there's Decisions here and I think Jade set

It up really well And it's a it's a it's kind of a Hard pill to swallow in life but it's Understanding that you know as adults We make decisions around Our life and not all of them Yeah not all of them are right or wrong it's not this You know oh gosh you shouldn't be in school right now

It's not that at all. It is though we have decided to do this route. And because of that, we're not going to have a lot of money. Like we're going to be, we're going to feel broke for three years until I get through school and until I get a job and all that. And in three years, it's going to look different. But in the meantime, what can we do? What other decisions can we make that are going to be adult-like decisions that may

hurt and they're not fun, but it's things like getting the extra job like you guys are doing. It's selling stuff to see what you can free up. It's getting out of debt and freeing up income. Cutting up those credit cards. Cutting up credit cards. Yeah. I mean, it's doing a couple of these, making some of these decisions within the big decision of the lifestyle you guys have made just to make it easier, Sierra. And that's

the thing is, is we want peace. You know, we talk about financial peace is what we want for everyone. And that peace is going to look different depending on, you know, everyone's situation and, you know, the way they view life and all of it. It's a little bit of, you know, subjective to a degree, but you don't have peace right now. And so what i would fight so hard for is in these three years how can we get some peace and being able to free up some money would bring some of that and how do we do that well i just listed out a couple options from jobs and selling stuff and all of it so um that's what i would do it's a long term that you've committed to. Like once she starts working, she's got a great pathway to make $70,000. Oh, yeah.

And then together with your husband. Yeah. Y'all will be making $130,000 before taxes. Like that's amazing. So the light is coming. But it's getting to the light that I think is really key. And what decisions can we make in between? And these are hard, Sierra.

I understand like these aren't fun. It's not always fun. But it's getting you to a goal that you guys want together. And part of that is you still being in school. So I commend you for having a two-year-old and doing this. And I'm so sorry about the devastation in your area. We think about you guys so much. So we're praying for you. Thanks for the call.

Welcome back to The Ramsey Show. Our question of the day is brought to you by Y-Refi. Y-Refi refinances your defaulted private student loans. And defaulted means when the borrower can't make the required payments. So if that describes you and your private student loans, contact Y Refi. They can offer a lower fixed rate loan and they will have it built for you. So go to Y Refi dot com slash Ramsey today. That's the letter Y R E F Y dot com slash Ramsey may not be available in all states. All right. Today's question comes from Teresa in Wyoming. She says, my husband and I have five girls under the age of 12. Wow. We have been in our home for seven years

and we owe $234,000 on it. We love our house and three acre property. But in the past few years, the homes on either side were bought by a man who rents them out to people who work for him. Now we have what looks like a junkyard next door they've also moved a two-bedroom trailer to one of the properties that houses more workers they dump all their construction materials on their land and regularly burn enormous piles out of it i have complained and the county has been out but nothing has changed They walk through our front yard and the woods, which is our property. Recently, the police taped off the woods and a crime scene investigator spent the day. Oh my gosh, spent the day in three hours there, I guess is what it should say.

So all of that backstory, what should we do? Our realtor has said that we could sell the home for $800,000. That's pretty good. Should we stay because our interest rate is so low and paid off or should we put up a fence around the property i've got five young girls to look out for so please guide me on what to do in this weird situation rachel wow man this listen the crime scene would have got me um i i would have a lot of questions she's in wyoming so there's like my mind is going to some shows that I've watched. But anyway, I love that. This is worth a lot. I wish I knew how close, like how close the neighbors are.

I'm envisioning more land, I guess, because I'm envisioning Wyoming. But three acres isn't like, isn't huge. Crazy, crazy. Yeah. Yeah. You know, I wouldn't let. Crazy, crazy. Yeah. Yeah. You know, I wouldn't let the interest rate keep me there. I definitely wouldn't. I think that you have enough equity that you could probably move on if you wanted to. And if you're truly concerned about safety and I'd make sure to get all the information from the county first and say,

OK, are there any violations? Are you planning on doing anything and if they're not then i'd probably get to step in i know yeah you're the primary residence in which you live some people there's not a lot of options you kind of are stuck you know depending on your situation but you want to feel safe i'm like that's the one place in life like you can go yeah and and not have to think and and for your kids um yeah yeah where you're not worried about them and everything yeah yes so I I may talk to him and just see not what he would change but if he's thinking of what his long-term plans are because who knows he could say oh yeah in the next two years I'm leaving and going somewhere else or whatever right And then this problem it's short term I would not have the conversation

With the hopes that you can change the way he does life And all the you know how he's Lived thus far that's Not going to change yeah but I would be Curious what his long term plans are and If he doesn't have any then I probably would Be moving just to feel yeah just To I mean you have the option you have

Great equity And just to feel safe again I mean Honestly you have the option you have great equity um and just to feel safe again i mean honestly it's like golly i just want to enjoy my house and what's around me versus like rolling my eyes every time i go in and again some people there's no option and you will be in the house that you're in because of interest rates and everything so um they've got options yeah it's a it's a it's a blessing to be able to say, hey, we can actually make a different move. So I probably would.

I would too. I think that there's a soul tax here and a mental calorie tax that you can afford to pay. Yep, I love it. But thanks for the question, Teresa. All right, let's go to Adam in New York City. Hey, Adam, welcome to the show. Thank you. I mean I have

a question I I was in an accident and there was a settlement I have some debt of 28,000 total between my wife's credit cards my credit cards and what's left of my car payment we're gonna wipe out our debt the minute we get our payment. Okay. But what we want to do is we want to know what we do with the rest. It's about close to a half a million. Oh, wow. What happened, Adam?

I really can't go into detail. Okay. Sure. Are you okay? I'm getting there, detail. Okay. Sure. Are you okay? I'm getting there, yeah. Okay. Yeah. Will you have long-term medical issues at all?

I have something that was implanted that is helping me. Yeah. I really can't get into the whole. Oh, yeah. No, I don't want you to. I'm just thinking for part of this money, if there was going to be ongoing high medical care for you, that that was going to be part of my answer. When you're down the line, I have to get something done again. Okay. I just want to make sure you have the cash for all of that.

Yeah. Yeah. And that's what... And also working going forward, will you be working again or are you disabled? No, I'm working both um my wife and i work okay that's great i got back to work i got back to work but it was you know it wasn't easy i'm sure yeah well i'm glad you're i'm glad you're doing okay what is your what's your combined income you and your wife um 134 000. Okay. So you'll have about... We don't have children. No children?

No, we're like mid-50s. Okay. That's where we're at. How are you living? What's your housing situation? We rent. It's an expensive area, but we have...

Our rent is close to $1 to 1700 a month okay so so you know that you want to pay ridiculous oh yeah yeah yeah well are you in the city like where what part of new york no we're not in it we're suburb okay so you know that you want to pay off the debt which is about 28 000 right that's cars credit cards cars and credit and then you're going you want to pay off the debt, which is about $28,000, right? That's cars, credit cards. And then you're going to want to put aside three to six months of expenses. That's what we teach here. That's what we call baby step three. So in your case, I'd put away six months just because you do have some things medically

going on. And if I were you, I'd probably put out my out-of-pocket max. I would just like having that, that I can get to. Mm-hmm. That's true. my out-of-pocket max i would just like having that um that i can get to and then the next thing on the list uh obviously you should be investing once this is done you should start investing 15 percent of your income your wife and you combined every single month just to set you up for later on but with this 500 000 this might be a good time to start thinking about a long-term housing situation that's not renting yes right right and do we

i mean so what we're going for is what we need and and in the area we need to live in because of work uh-huh um we just buy the house in cash or i mean as much as we can down in sound payment or well what are you pricing out? What is... If you look at what you'd like to buy, what's it cost? What we're getting settled for and what we're looking for is we can barely even pay it in cash.

I was wondering, should I put it in a money marketing account and save up until we find something we like or just put a nice down payment on something that we have a lower... I wouldn't buy something that you don't like but I also... You want payment on something that we have a lower. I wouldn't buy something that you don't like, but I also, you want to buy something that you can afford. So that's... That's what I'm saying, yes.

What we like and what we can afford is... What are the price ranges you're talking about? Give me more numbers. Okay, the homes that we're looking at for just my wife and I, they're starting at like $450,000. Okay. Okay. So what would be a number that's like, oh, yeah, that feels like a good house for us, good area.

It's what we want. What is that? You said starting at $450,000, but is that what you're thinking around $450,000, $500,000? Yeah, $450,000, $500? Yeah $450, $500 Oh that's great okay Does it weird you out to spend And buy outright is that what you're saying Does that weird you out to take all this cash and do that

Yeah and then I feel like I'm like we're house broke Yeah Well honestly Adam That's probably what I would That's what I would do. And don't feel the pressure to pay for it all in cash. But if you see a house that you like and you guys have to take out a $50,000 mortgage, I would do that.

And it will feel house poor, but that means the largest expense in your life. There is no expense to it. It's the opposite of house poor. Yeah, you guys can be able to cash flow so much retirement out of this and put so much money in investments. That's what I would do. That would be a huge way to get a jumpstart on this. Yep. That's exactly what I would do. Thanks for the call, Adam. There's a time in your life and the baby steps for renting, but you don't want to do it forever. Because when you rent, you're still paying for a mortgage, just somebody

else's. Plus, rent means instability in your budget, because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey-trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today

at churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSConsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. Welcome back to The Ramsey Show. I'm Rachel Cruz hosting today with bestselling author Jade Warshaw. And we are taking your calls. And up next, we're going to north of the border, Jade. We're going to Toronto, Canada.

All right. And we're going to chat with Diana. Hey, Diana, welcome to the show. Hi, how are you? We're doing great. How can we help? So basically, I am 48. I've got no kids. I'm single. I've got my mortgage that I've got about 13K left. I have, yeah, I have some investments, 38K, but I can't touch until I'm 55, which unfortunately, I mean, well, fortunately, that's right around the corner. But my thing is I haven't been working for a year. I quit my job because I needed a change. My salary is only 55K. So when I do eventually get a job,

you know, it's not very high, but in the year I've been paying my maintenance and my mortgage on my credit line. So I've accumulated another 10,000 in the last year. But here's the thing, this is not the first time I've been in this situation. I've quit my job before and I've been, you know, not wisely paying my mortgage and my main fees on my credit line, but that's been a little buffer for me. And then I'll get a job and I'll, and I'll pay it down. That's such a risky way to live. It is, it is. And you know, that's what we call cash poor, right? Where, you know, I'm not making a lot of money, but I'm smart with my money. You know, I'm not paying to get my nails done and stuff like that. I'm, you know, putting every cent that I have to that mortgage when I am making money. But here's my main question. I have no

kids and my condo is worth about 700K, right? Why am I rushing? Because I only have 13K left on this mortgage. Why am I rushing to pay down this mortgage? I don't know. I want you to answer this question because you laid out a very interesting plan that I don't understand why you're it's it's strange to me that you are rushing to pay off your mortgage and that you're going into debt to do it without a job. This this is what I would call emergency mode. But I feel like you're kind of living it like a normal lifestyle. When do you plan on working again? Well, I'm looking for a job. But here's the thing here in Toronto, like salaries are very low and I'm being I'm cherry picking. Let's be honest. But what caused you to what caused you to quit your job before you had

another one lined up with something bad going on? Yeah, I just didn't. I was sick of it. I was working for a company eight years and I was tired of it. Like I was just like, you know what, I need a break. How are you eating, Diana? Like, and I'm not being facetious, honestly. How are you having money to live? Oh, again, that's why I've accumulated the 10,000. It's because I've been paying. Oh, so you've been paying your mortgage and your lifestyle off this line of credit. A hundred percent. So that's what that 10,000 is, right? Oh, all right. I've been paying my mortgage. Yeah. So that's, I mean, that 10K accumulated over a year. Yeah. It could have been a lot worse.

Exactly. Exactly. And, you know, and technically it's only 8,000. It's crawling up. I'm rounding up here, but the thing is- How did you get by on $8,000? Did you have savings? 8,000. It's crawling up. I'm rounding up here. But the thing is, I know I have... How did you get by on $8,000? You're on nothing. Did you have savings? You know what? I had a little bit of savings, and I was technically collecting EI for like six months. So let's be honest. Oh, okay.

That was only 8K is only really six months. I gotcha. I gotcha. So I'm very much the way everything works out, but... Yeah. So I think that there's... Yeah. I would say a couple of things, Diana. So the rush to pay off the mortgage, cause you have no other debt, but the line of credit, correct? The $8,000 and then that's it. So the rush to pay off the mortgage, number one, we don't tell people to rush to pay off mortgage, their mortgage. We say that it is in the baby steps at which after you're investing, you don't have kids. So there's no kids college, then you would pay extra on the house. So it's not this urgency to pay it off quickly, but it is an intentionality

that you want to pay it off faster than for Americans, the typical 15, 30 year mortgage. We wanted to do it faster than that because your housing line item in your budget, whether it's rent or a mortgage, is always usually the most expensive thing that you pay for every single month. And when that's freed up, that means you have all of that money. And for some people, I mean, it's a thousand or more dollars that's freed up every single month that you can turn around and use for your life or to invest or all the above, right? So that's the purpose of paying it off. It's not if you have kids or not, it's truly a line item issue in a budget. And when that's

when your house is paid off, not only is there emotional freedom because you don't have payments, but there's also a financial freedom because you don't have payments. So for me and you, I mean, you don't have a lot left, $13,000 on a, did you say a $700,000 condo? I mean, you don't have a lot left, $13,000 on a, did you say a $700,000 condo? I mean, that's incredible, Diana. But I want you to work. I mean, I don't want you to sit there and like be racking up debt. And it may not be the job you want. But in the meantime, I would be getting something to earn some kind of money to live off of

so you're not living off debt. Yeah, because you plan on living here, right? Or do you have a big plan to sell this and get access to the money like what what are you thinking long term and by long term I mean like in the next eight years five years yeah okay so and here's the thing I just got back from Jamaica because I was like look I know it's not wise let's add another couple of grand on that on that Diana you're so different hold Hold on, hold on. But only because I haven't traveled in seven years.

You know what I mean? No, I don't. Diana, I have to tell you, I don't know what you mean. You're crazy. But no, I know, but you don't have a job, Diana. You're going into debt for a vacation. You don't have a job. How much was Jamaica?

How much was Jamaica? And how are you paying for it? It was you paying for it it was only two grand i was only two grand so you're telling me i'm not kidding you're telling you're telling us this is great by the way i really appreciate you called it because he's a free spirit you got the eight thousand dollars and you're telling me for a full year you have lived off of eight thousand with i understand six months you were getting some unemployment and you took a two thousand dollar trip so technically you only had six thousand dollars that you were using i just don't know if i believe your numbers i feel like that's impossible well eight grand because let's be honest that that that um credit card payment is this month so that'll push me over to the ten thousand oh now we're at 10,000. Because of Jamaica. Yes, that's right.

It hasn't hit yet. So, Diana, listen, you're smart because you've paid down this condo. That's the reason I'm giving you credit. You've paid down this condo. So you have something in you that works hard and you are smart

when you're making an income. I mean, this isn't smart. What you've been doing so far far the decisions in this last year um are are really it's just interesting it has the ability to ruin what you have built if you keep this up and that's my biggest fear it's a rhythm and a pattern that's begun and i'm and i'm scared for you to stay in that long term because it will be financial disaster. You've made so much progress financially, so much in your life. I mean, you look at your condo. I mean, seriously, like it's amazing.

I just don't want you to keep going backwards because there's not a job that's paying you what you want. Like just get a job and pay something. See, and that goes into my next question because my mentality, maybe it's a good thing I'm calling in because I'm like, maybe I should take another year off and just travel what I just enjoy my life what do you look look I I get it traveling is fun I I'm right there with you um is it possibly is it possible you don't know what you would want to do professionally and instead of figuring it out it's easier to just because let's be honest I don't want to get another admin customer service position where I'm only making 55K.

Okay. The fact that I was able to pay my mortgage and all that stuff. If you could do anything you wanted to do professionally, like if there was no barriers, what do you think you'd do? I don't, I don't know. That's, I don't know. So you want to go on an eat pray love journey and figure out and I'm all about the travel I just want you to have money to do it too I do too um okay so

this is a fun call I don't think that we're going to convince you to change your philosophy on life right now um I mean I hope we can but I think you're I think you're in a mode right now But you're really just look Because I think because I have the cushion Because my mortgage Yeah but here's the thing You can't out earn Bad spending habits for long

And although you do have this equity Built to your own point It's not like you're saying you know what guys I've got 600,000 you know $777 of $000 of equity here. I'm going to sell it and I'm going to travel the world and use that as my nest egg. That's different, but you're holding onto it and you don't seem to have a plan to sell it. And for that reason, you could look up and really have racked up a lot of debt.

And you're starting, yeah. I mean, you're starting halfway to where you were. You're just making, you have great progress. So keep at it. it so i'd get a job but diana hold on the line kelly's gonna pick up we're gonna give you ken coleman's book and in the book is a get clear assessment because i want you to get some some focus on what you love i think you i think you have a lot i mean you have a lot to offer the world you offered us a lot you did you were fun i appreciate the call diana uh thanks to all the guys in the booth. Thank you, Jade, and thank you, America. Listen on the Ramsey app coming up in the next hour.

YouTube podcast ends now. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with bestselling author and one of my good friends, Jade Warshaw.

And we are answering your questions about life and money, career, relationships, anything and everything. Yes. So give us a call at 888-825-5225. And if you're listening on radio, welcome. And if you are on the Ramsey Network app, we welcome you this hour as well. We are glad that you're listening on radio, welcome. And if you are on the Ramsey Network app, we welcome you this hour as well. We are glad that you're here.

All right, we're going to go to the phones and Leon in Queens, New York is up first. Hey, Leon, welcome to the show. Thanks for having me. Absolutely. Yes. I guess I wanted to ask regarding dating someone while I'm in debt and spending money. You know, Dave Ramsey always speaks about when you're in debt, don't spend on stuff that are not a necessity.

And I'm wondering, is that a necessity or extra? Dating? Oh, that's a great question. Spending money basically on dates. Like to go on dates, like to go out to eat. Or maybe going out to eat. I mean, it's kind of a partner relationship already. Are you seeing someone specific or are you kind of out there still finding that steady person? So it is steady.

We have been basically together already for three months. Okay, that's great. Does she know what you're doing? We have been basically together already for three months. Okay. That's great. That's good. Does she know what you're doing? Yes, 100%. Okay. Yeah, then I think my answer probably changes a little bit. There's a part of me that I'm like, yeah, if you're dating and, you know, wanting to hang out with people and figure out, you know, is there somebody out there that that I like but when you have that person and you guys are a little bit like okay yeah we're we're doing this then I would I would um pull back

a little bit on the spending because you I keep it limited like you don't want to I think this is an important part of your life and has the ability to be long term but that doesn't mean that it has to be at the over the top of yes yeah over the top and um like you know outrageous spending what are you paying off let's get a picture of it maybe we can point you in the right direction what how much are you paying okay so i have about 15 to 20 000 debt okay um a real estate agent in the past they did very well um some years due to my recent, you know, going through divorce stuff kind of, you know, went sour. And I guess she feels very frustrated when I don't spend extra on her. Well, what's your income?

Okay. My income right now has been really very, very little. You know, it's commission based. Okay. Year to date, maybe it's $25,000. But let's say 2022, I made gross commission $300,000 and took home over $140,000. Right. But that was a wild year. Correct. When did you start real estate? About eight years ago. Okay. So are you, the big big question I have and this is not exactly what you asked but if if you have a year that's 25,000 what are you doing in the meantime to make money so I did take extra side job helping out with a caterer and I have been trying to really dive

back into it and generate new business okay and. And what are you earning from that? Because what I'm hearing is, the reason I'm diving into this is because I don't think the real problem right now is whether or not you're taking your girl out to dinner. I don't think you have the money to do a lot of things that are probably necessities. Forget paying off the debt. If you've got $25,000 that you've earned this year, that's a big, big problem. Correct. Last year I was sleeping, for example,

most of the winter without heat. Yeah, that's a problem. So with the catering, what's that bringing in? Because this might not be the right side hustle if it's not bringing in enough. So I just started. It's not steady, but so far this month, the last four or five weeks, I've probably bought in a couple thousand. Last weekend I worked, I got a thousand.

The week before, I was also working, got like 800. Okay, that's good. It may not be steady. Okay. So my goal for you, I think there's a couple of things to get in place before we even consider paying for dates one is I want you making somewhat of a steady wage that you can count on and know okay real estate at this point yeah you're working it but it hasn't been bringing you an income and so what can what can I do that I'm getting a steady amount and what does that steady amount need to be and that would be my my number one thing and to do you know

to pay for necessities which would be heat leon i mean i mean it's food uh not going out to restaurants just basic food uh making sure your rent's paid utilities transportation yeah like making sure that those necessities are covered first and foremost um and so what does that have to be for you to live with heat i mean honestly, honestly, like it's, yeah, to figure out how do I, yeah. Yeah. Yeah. I guess even when I say 20,000, gross commission was probably like 60, 70,000, but I had business expenses. Well, yeah. The money by me is just a roller coaster. It's like I'm supposed to take now probably another two houses and each check is another 20,000. Yeah. Okay. So can I take a secondary job? Are you saying? I think you need it.

I think that real estate, I think you had a couple of good years, but it sounds like since 2022, it's been a struggle and it hasn't been paying your bills or your, your four basic walls is what it sounds like. And so for me, that's a big red indicator that I've got to do something else. That's incredibly steady. I'm not saying you give

up real estate altogether, but it doesn't sound like it's performing for you the way it needs to be to be your primary income. Yeah, I hear that. You know what I mean? And I know that's tough. For myself, it's kind of due to the divorce and I wasn't putting my heart into it. Yeah. And I'm starting again. But yeah, yeah. Well, you probably went through a period of grief because losing a marriage is very, very tough, even if it was something that was amicable between the both of you. So you're right.

You probably tuned out of it for a bit. But I think what you called in for just revealed a symptom of a bigger problem. And so... Yeah, so I would tell her, it's not that I don't want to pay for dates and it's not even that I'm trying to get out of debt I'm trying to pay my bills I mean you know what I mean there's a level of like yeah where I've been from a from a mental standpoint

and a work standpoint you know it has not been the best that it's always been and so I'm having to make sure that that these things are covered because you want, Leon. I mean, I know from the way you called in and the questions you're asking is, you know, you want a steady life and you want financially to be in a place that feels like a firm foundation and it's not shaky and you feel good walking on that. And in order to have a romantic relationship with someone that goes further than just dating even, right? I mean, on to marriage possibly one day.

Is that what you're building today will make all of that have a little bit more of a smooth runway than trying to figure all this out as well. So that's probably what I would tell her is like, I have to get my bases covered. It's not that I don't want to take you out. I have had that conversation but she still feels very frustrated that I use the word very frustrated because that's the word she used. She wants to

be wined and dined and feel like she's dating. Is it like exactly exactly. You hit the nail on the head and she's like you know $40, $50 is not big money. And there could be part of this and I'm not, I think dating is important and I think those relationships are important

in life. You may not be in a time where you can be doing that right now because you do have these major things to get in place and it may be the fair thing for you to say if that's what you're looking for in this stage of your life, I can't give you that in this stage of my life. Maybe on down the line.

I want to down the line. But right now, here's the reality. And I can't not live in reality, right? I mean, that's you being responsible for yourself, Leon. I mean, honestly. And this may be the first time in your life you're taking care of yourself, right? Going through a divorce and everything, kind of figuring that out, I think, is really key, too. So I hope that helps. Yeah. Thanks for the

call. So on our Ramsey Network app, you guys are able to ask questions. And today's question is from Tim. Yeah. He says, my wife and I are on baby step six. Our mortgage is paid down to about one third the value of our home. We have a net worth of approximately 2.8 million. Very good. Unfortunately,

we purchased a whole life insurance plan about seven years ago before we started following your principles. The premium is, wait for it, $8,500 a month. Oh, gross.

Holy smokes. Over 100,000 a month. Oh, gross. Holy smokes. Over $100,000 per year for each of us. We now have good term life insurance plans and we would love to get rid of the whole life policies. The problem is that we have paid $650,000 into the plan. Oh, my heart hurts. And the cash value is only $350,000. It's a tough pill to swallow, losing the $300,000

if we get rid of the policy. Should we go ahead and pull the plug on the policy now or wait another year or two until the gap narrows? This is a classic case of sunk cost fallacy. But another year or so,

it's made $90,000 a year. You know what I mean? A little less than i mean that's 150 000 in two years that goes into so no i would stop it no i would not yeah you gotta stop the train and it sounds terrible and it is a hard pill to swallow to lose that much money oh it's terrible madness but we call it tim around here stupid tax yeah and there's times that stupid tax only costs you five grand sometimes it costs you yeah 300 grand and i wish if there was a better light at the end of the tunnel for you to

stay in it then maybe we can consider it but it won't i mean they won't pay out like what you're putting in yeah there's no way you're gonna get that back out versus if you just took the hit and then wow invested the rest i mean it's just not This is what we always talk about, Rachel. This is, yeah. Oh gosh. Term life is the way you want to go. For all the people out there listening, somebody out there listening now, Rachel has whole life. And I hope that this just convinced them that what we've always said is so true. When they take that portion and they invest it, it's at a a very very crappy rate of return and this just proves it it's it's horrible so take that same money get yourself a term life policy for a fraction of the cost and then when you're on the right baby step you'll be able to invest that difference and you'll make

far far more money yeah and you can go to zanderinsurance.com and um see do a quote put in your info and see what a what a possible quote would be for term life if you do have a whole life or if you don't have life insurance um do this you can go to xander.com because yeah you need life insurance yeah number one but then number two you want the right kind of life insurance and term life is very inexpensive and what you're getting is just life insurance that's it where whole life mixes investing and insurance and you never want to mix those because you're not going to get the best of both worlds so don't put don't combine them because they're it's usually very expensive and like you said the investment that they use is it it's it's crappy and you don't make a lot of money oh can you imagine i should have put it

in my calculator 8 500 a month over seven year term Oh painful I mean a month Jade A month 8500 a month I know whole life's high And we've gotten some numbers on this show that it's like It's a lot but I don't know if I've had that high I've never heard of that high That's wild so I'm so sorry Tim But I hope that helps

Alright let's go to the phones and we're going to go to Monica In Jackson Tennessee Hey Monica welcome to the show Hi Rachel hi going to go to Monica in Jackson, Tennessee. Hey, Monica, welcome to the show. Hi, Rachel. Hi, Jade. Thank y'all for everything that you do. So ultimately I'm trying to figure out what baby step or how to structure the baby steps according to our scenario.

And I'll give you the reason why. My husband and I have two businesses and then also real estate. If we broke it down to where each entity had its own baby steps, then some would be on step two and some would be on step three. And the reason that I'm asking is because they are all sole proprietorships. So if something were to happen to my husband, it would ultimately fall like all of the businesses were in a treadmill stage. Well, in that case, the way you explained it, that is the truth.

This does all reflect on you. So in many ways, the baby steps lock in regardless, like the real estate, even if the business is carrying certain amounts of debt, you do have to understand that if it's in your name, it's still on you, even if you close the doors of the business. So give us the finances on what's going on. Tell us the real estate, then tell us the businesses. Okay. So, well, I've been, like, as I break it down, I've been lumping it all together to show, for instance, one of the businesses is a trucking company and we do carry debt on two trucks and two trailers. How much is that? So that would put a baby step two.

How much debt? One of the trucks would be $41,000. Okay. Another one of the trucks is $ 41,000 okay another one of the trucks is 67,000 okay and then the trailers are the trailers are combined in a note um that has 18,000 left okay and what does that bring in like what how much do you guys take from that a year um i set that up to where uh it is sorry it's 600 weekly is that gross or net what do you guys bring in before that's gross that's gross yeah 600 weekly okay yes okay and does the business have any retained earnings no and that was that was another thing i didn't know yeah okay so you guys are

making i mean yeah you're i mean you're making though on this business i mean you have 126,000 dollars in debt and you guys are only making like 28,000 a year no that's that's just my husband and i personally we're yeah but that's okay okay okay over a million gotcha okay oh you gross over a million okay okay right but when it all shakes out the profit is what matters because you could be doing a bunch of revenue but after all the expenses all the debt if you're only clearing what you're clearing you have to ask yourself is this worth it to be carrying this sort of debt for this business and for for for what it's worth to you do you see what I'm saying yeah um so that's that's one thought tell us about the other business uh the other is a diesel repair shop um the only debt on

it is the mortgage um and then I pay us 1200 gross weekly out of that. Okay. 1200 gross weekly. And the mortgage, is that like a separate body shop? Yes. Okay. And how much, what's the total debt on there? 291. Okay. So 291 there. And now tell us about the other real estate how many pieces of real estate is it um eight okay oh gosh okay give me the big picture what do you owe on all all eight collectively all eight um one of them is $131,000. Two of them are paid off. Okay. That's, that's it.

$131,000. The ones that are paid off, what are they worth collectively if you were to sell them today? Uh, I believe we, we broke down two of the properties would be $25,000. Um, there's, there's another one that right now it's actually pending sale. It's been in litigation for a year. And what would you get? It's supposed to shake down to $462,500.

$462,500. So did I hear you right when you said the two were only worth $25,000? What was that? The two that are paid for. Yeah, what are they worth if you sold them uh it would it would probably only bring about 25 it's it's literally okay maybe a half acre lot got it okay so what i'm looking at and rachel can jump in you guys need to vastly simplify your life

there's a lot going on here and just from the big picture of numbers you gave, the juice is not worth the squeeze on many of what's going on here. I would love to know the other six properties that you have that you have notes on. I mean, based on the way you're running these two businesses, something's telling me that those probably aren't worth the debt that you're carrying either. And so you guys have got to sit down and really look at this. I mean, for me, $300,000 on a diesel business where I'm making $4,000 a month, and then you've got the trucking business. It's just, you've got to zone in and figure out what it really is that you want to do and how can you do it in cash at the speed of cash, not carrying hundreds of thousands and in this case, probably a million dollars of debt.

When it comes to real estate and buying and selling your home, there's a lot of decisions and it can feel very overwhelming. And so we don't want you to tackle this process alone. That's one reason why we created the Ramsey Real Estate Home Base. So this is a place with all of our tools and all of our resources when it comes to buying or selling your home. And you can do it with confidence because again, all of our content, everything we have is on there. So you're going to find calculators, start to finish guides, how-to articles, a podcast, a book, and even a video course all packed with actionable steps for you to navigate this because this is one of the largest purchases you probably will ever make in your lifetime and we want you to do it the right way,

especially financially because that's what we're in the business of, helping you make wise financial decisions. So you can go to ramseysolutions.com slash real estate, or just click the link in the description. And again, lots of questions around this topic, and it is all there at our real estate home base at ramseysolutions.com slash real estate. All right, up next, we have Sarah in Richmond, Virginia. Not North Virginia, just Virginia. Hey, Sarah, welcome to the show. Hey, thank you so much for having me. Absolutely. How can we help?

I am just curious to get y'all's thoughts on me and my husband's kind of path towards home ownership or interested in buying a home in the near future. We're in no rush, but we both came from frugal backgrounds. And because of that, we are just a little scared, I think, to take on this big purchase. And we're kind of toying around the idea of buying a home that's around $600,000 to even $700,000. But even still, we believe that that is just like so daunting and so much money and was just trying to call to see y'all's thoughts on if that's too much, if that's unrealistic, we're just a little nervous if we lose our jobs, how much of that mortgage that will, you know, eat into our savings and what not. So anyway, that's really my question.

No, it's great questions um so all of it will depend on you guys where you are financially how much money you make um that's really where we kind of get a baseline of what you can afford it depends on you guys so um financially speaking do you all have debt right now no no debt okay do you guys have savings? Yes. Oh, awesome. How much do you guys have? We have an account for our house and right now it's at a little over $100,000 and then we have 401ks and other investments. That's great. Is the account that's earmarked for the house, the $100,000, is there any other savings that you guys have for an emergency fund, or is that all the cash you have?

Yes, we have cash in investment stocks, 401ks, that we could pull, but we don't touch our 401ks. But yes, we have other money. It's about $75,000. Okay, how much is in non-retirement accounts? When you say stocks? $75,000. We have about $150,000 saved up in 401ks in

retirement. Okay. But 75,000 of that is in stocks and what else? Just stocks and high yield savings account. And a high yield savings account. Okay. So the high yield savings account is more liquid than stocks. So how much is in the high yield savings versus stocks? That I don't even know. Sorry, I can't give you an answer on that. No, you're fine. You're fine. Yeah. So what I would do is I would want, considering you guys, do you guys have kids? No. And that's another thing is we are thinking about starting our family and that kind of plays into the amount of bedrooms and how big the house is. Totally.

I think that's also something that scares us. Yeah. How much do you guys make a year? family and that kind of plays into the amount of bedrooms and how big the house is totally i think that's also something that yeah yeah how much you guys make a year by um right now we make 375 375 great yeah that's awesome so yeah what i would do is um i mean if you guys know you're going to be in that area for you know five years or more um you in a place financially Sarah to buy a house so the formula we use is that you want to put at least five percent down on a house which you guys will have more than that and and we recommend a 15-year fixed rate mortgage and for the payment to be no more than 25 percent of your take-home pay, what I just laid out is pretty conservative versus what most people do. But again, to your point, we want to mitigate risk and we want this purchase that is

going to probably be the largest purchase that majority of people make as their home to be something that is a blessing and not a curse. And so that's the formula which I would run through to figure out, okay, can we afford a $600,000 house? But what you guys bring in and what you make, I mean, I don't have the calculator in front of me, but- I have it. Okay. So like if you were to put this in right now,

I'm just using a Ramsey Solutions mortgage calculator. So you said $600,000 home, $100,000 down payment, that's 17%, 15 year fix. And it's calculating 6.5 interest rate and all of the other things property tax that kind of thing so that's a guesstimate there but it's saying okay if you did that you'd be paying four thousand three hundred fifty six dollars a month and so at that point it's up to you to go okay what percentage of our take-home pay is this because we say all in hoa fees you

know property tax everything like that do you guys bring no everything like that. Do you guys bring in over the 25%? Yeah, do you guys bring in close to 12,000 a month after taxes? Yes, it's around 14,000 a month. Oh, perfect. All right. Yep. You are right on the money, Sarah. You guys are great. Yeah.

Okay. So you think 600,000? Yep. I mean, go run the numbers, but I just did it right here real quick, just based off of what you gave us. And yeah, I mean, the principal interest says $4,356, and then it adds in PMI, property tax, what it's guessing. And once it guesses HOA, all that, it's $5,548.

But that I'd want you to do your own due diligence on based on, you know, the neighborhood, your state, all of that stuff. So yeah. Okay. Thank you. Yeah, that's exciting. Good to stuff. So, yeah. Okay. Thank you. Yeah. That's exciting to hear, to get a second opinion. There's a lot of people in the country that are like, I'm never going to buy a house. And the fact that you guys are there, it really just

is a matter of kind of dotting I's and crossing T's is really, really exciting. Yeah, for sure. And Sarah and I would have some cash available, which you may have in your high yield that would cover, you know, four to five months worth of your living expenses, including that mortgage. So just in case one of you loses your job, you know, for sure, at least three months, four or five, six months, however much you guys have saved is going to be covered. And you guys are incredible. I mean, I can tell from the money you make and and your savings habits already to this point is that you'll find another job right so that's always the

thing is if we lose our job within three to four months you're going to be able to find a new job right so um that's always that that's where that buffer I think is really important and gives you a little bit of peace of mind and And then when you talk about kids, you know, it is so hard when you're starting out, because I feel like we always say that don't let not getting married or not having kids be part of the plan because of where you are financially. Is it easier to do those things when you don't have debt and all of that? For those of you listening or watching, absolutely. But I would not stop moving on with my life because of money right so go ahead and yeah you guys have your kids and and you never know how many you want we have a lot of friends that were like we want four and then they had two and we're

good with two so so just know this house doesn't have to be a forever house you know it could be the first your first home I mean that's what it will be. And usually people end up upgrading down the road and you get something bigger or maybe the kids share a room if you have a bunch of babies all together. Like, you can figure it out for sure, but I wouldn't let that hold you back. But it's good to know in the back of your head,

yeah, we're gonna want, we're shooting for two, three kids or whatever it is. And you can kind of think through that when you're buying. I also think for you guys being first time buyers in the market, being where it is, everything's very expensive. So it does feel even more daunting to be like, oh my gosh, I'm going to drop, you know, over half a million dollars on this thing. I've never bought anything that expensive. And if I were in your shoes, I would want somebody to walk with me through that. So I would love if you checked out our real estate home base because there are people on there that are going to do it the Ramsey way. And so they're going to help you walk through

this process of buying a house and you don't have to worry about if they're going to try to sell you something you can't afford that whole thing. So check that out. And for anybody listening, that's if you're selling a house as well, it's a great tool. Yeah, for sure. It gives you a lot of peace of mind when you have people in your corner to you know yes to know like okay this is this is the right direction the right guidance that I want and and they listen to you in that and I think that that's awesome but again Sarah I I applaud you all I mean very good well done and and I know sometimes when you save up for something we felt like this with our house and then you kind of start writing checks and you're like, oh my gosh, that's a lot of money.

Yeah, it's a lot of money. And it does sometimes make you second guess. I'm like, well, maybe I'd rather have a little bit of money in the bank than whatever this purchase is. So you guys are in a great position from a mathematical standpoint, Sarah. And yeah, I'm excited for you guys to take this next step. And again, you're doing it in a right way and the right way. And it's going to bring a lot of peace and not a level of burden, which is great. So thanks for the call.

Our scripture of the day comes from Ecclesiastes 5.10. He who loves money will not be satisfied with money, nor he who loves wealth with his income. This is also vanity. Money can't buy happiness, but it can make you awfully comfortable while you're being miserable that's good that's good all right let's go to michael in indianapolis hey mich, welcome to the show. Hi, thanks for taking my call. Absolutely. How can we help?

So my wife and I, we brought Baby Step to, we had a baby four months ago. Oh, congratulations. It's beautiful. Thank you. It's a beautiful and healthy baby girl. But that time that my wife took off work kind of took us back into baby step one. So we're just working on getting that saved up again. And as we do that and go into step two, just looking for a little guidance on how to find more margin and how to tackle our debt. How much debt is it?

So we have $8,000 on a credit card, $13,000 on a car, $20,000 on a HELOC, and then $50,000 in student loans. Okay. And the car, you have another car that's paid for. Is it your second car is basically what I'm asking? Yes. Okay. And what's it worth? I'm just curious. It's worth about $8,000, I think. Okay. Well, the basic places to start, and I'll just go through these really quick. You may have already covered covered them but whenever somebody shows me their budget the first three questions i'm asking is are you getting a tax refund every year and if so that's the first thing i'm going i'm like all right let me change my withholding because there could be money that you could free up monthly there and then the next place is if you're investing. So are you guys investing anywhere? Because if you are, I would stop that.

Okay. Yeah. I mean, so my wife was putting in about $5,000 to her 401k. And then I've got a Roth that I put $200 a month in. Okay. So another curveball in this, my wife recently just took a new job. So she'll be working at the early learning center that our daughter is going to. Okay.

So it's a bit of a pay cut, about $21,000 for her. Okay. But she'll be on the same schedule. It's like a school year schedule. Okay. Well, back to, I don't want to jump ahead too fast because I do want you to understand that by investing, if you guys pause that, that's almost $600 a month.

You said she does $5 five thousand a year and you do two hundred a month that's a lot of money freed up so i didn't want you to skate past that like i didn't just say it um but i love that she's starting to work because that's going to be important as well yeah what um for the pay she took a different job so she is taking a twenty thousand dollar pay cut why did she decide to that, just to be close to your daughter and be on the same schedule with the kids? Yeah, that was part of it. We do get free tuition if she works there, so that's about $12,000 in savings right there.

And then her previous job was just very stressful. Okay, yeah. So how much will she be making in the new job? So about $25,000 a year. Okay. And then yours is? Intuition. Okay.

But for now, $25,000 a year gross. And then what are you making? So I'm currently making $25,000 a year gross. And then what are you making? So I'm currently making $64,000. Okay. So you guys, okay. So back to the original thing, which is how do we pay off this debt? How do we get our footing? We're working on Baby Step 1.

Yeah, it's those first areas. Checking to find out, like, are you guys getting a refund every year? Let's change that. Let's stop the investing. And then from there, we're looking at areas of our budget that we can cut back on. I think in your mind, there's the savings from daycare. If you want to view it that way, I'm not sure mathematically if that shakes out. I didn't do the math, but I'm trusting you have. Can I ask real quick, how many hours is she working uh so she'll be working 35 a week okay that's a lot for a little bit that's a lot for not a lot i mean that's that's a lot of working for 25 000 a year well it's only during um basically from waiver day to memorial day oh it's like a school year calendar okay okay and to be clear

you're seeing it as really 12 000 more than that you're seeing it as 37 because you get a thousand dollars for credit right for daycare yes okay okay uh it does it still does feel like a lot for a little bit but there might what i'm saying is there might be something that she can make more than $37,000, that she can make $40,000 or $45,000 for. And pay for daycare and still make more. So I have the opportunity to get a different job and make about $21,000 more per year. Okay. To kind of make up that difference, which logically in my mind is kind of a no-brainer. Why wouldn't you do it? I'm sorry?

Why wouldn't you do that? Well, the only thing that's hanging me up is I really enjoy my job that I currently have. It's, you know, in a perfect world, it would be my dream job. Okay. So this is going to come down to what you guys want most and what you guys want now, really, is the question. So typically I find, and not all the time, but typically we find that when people are on a journey, especially the debt-free portion of the journey, there are some bitter pills to swallow. And so you guys get to decide how extreme you're going to go. You guys get to decide, okay, is it worth us sacrificing in this area in order to obtain this faster? And so she might say, I want to work at the daycare. I want to be close to school. I don't care if I'm making $25,000. And if you guys decide that fine, you might decide, I don't want to take this job and make 21,000 more because this is my

dream job and I love it. Just know that when you make those decisions, it does affect your financial journey. It affects how quickly you're going to pay off the debt. It affects how quickly you can move forward. And if you both agree, we're fine with that, then that's the value you've chosen. And that's what you've chosen for your life. Yeah. Because yeah, when you look at it, Michael, you guys have about $100,000 in debt. And kind of what Jadeade's saying and again you know we're more on the mindset of like have the pain now like in a short period of time like pain pain pain not fun not fun for two years but we're done and now she can stay home like like we have we have we have

options galore for the rest of our lives versus dragging out the pain. Even though you'll be comfortable in certain areas of your life, the financial pain is dragged out. Does that make sense? So it's kind of a choose your own journey. And we just find that people have higher rates of success when they go all in in the pain. Yeah. And it sounds fast. It kind of sounds crazy choosing it.

But it's like, all right, I'm going gonna work at a job i don't really love but for but but only only for two and a half years or three you guys map it out and she's gonna go work and she's gonna leave that baby and it's not gonna be fun and it's like oh my gosh but we're just doing it for two and a half years like for two and a half years we can do this or you choose one and she chooses another or you both choose the other option of how you guys are it's just gonna be five to six years of this payoff yeah and you doing uber eats at nights and you know what i mean like kind of figuring out how to piece this together to pay it off faster so um whenever we see an opportunity where your main income can go up significantly and if both of you you could be making 20 more she possibly with another job could

be making 20 that's 40 000 michael extra a year that could be going towards this debt like i mean like that changes the ball game versus these like small cuts of like not investing and get doing uber eats like does that make sense um and it's really hard and jade and i are both moms and it's um it can be really difficult but again it frees up the rest of your life and and it's, um, it can be really difficult, but again, it frees up the rest of your life. And so it's, it's a short amount of pain to have so many options on the road. And as they get older and you want to be home with the kids, like you'll be able to do that. And then you can take a less paying job because you guys don't have payments. So again, it's something that you guys have to choose, but we are, we are here for you, Michael,

give us a call back. if you have any more questions. Thanks to all the guys in the booth. Jade, thank you. Fun times. Thank you, America and everyone on the Ramsey Network app. And remember to take control of your money and create a life you love. I'll see you next time.