The Ramsey Show - App - Overcoming Your Financial Mistakes (Hour 1)

Episode Date: November 9, 2023

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. You can give us a call. The number is 888-825-5225. I'm Jade Warshaw, and I'm joined by bestselling author Rachel Cruz. I know we've talked about this, Rachel, but I haven't gotten to talk about your book that just came out. I'm glad for what I have. Thank you. Yes, it launched this week.

My new children's book. My first one ever. And yeah, it's doing great. It's so cute. I love it. It's been so fun. It was a fun process. And hopefully that message of contentment.

Yes. Can be all through our households with us with little kids. I'll be reading it to my kids for sure. So give us a call today. We'll take calls about your life and your money. And if you're interested in getting this book, you can pick it up where, Rachel? RamseySolutions.com slash store or anywhere books are sold. That's right.

Love that. All right. Let's go straight to the phone lines. We've got Stacy from Manchester, New Hampshire. What's going on, Stacy? Hi, it's nice to talk to you guys. Um, I'm actually looking for what I'm calling a Ramsey rebuttal. Uh, my husband and I, my husband and I are about to, we're very close to paying off our house.

We have about 15, we're very close to paying off our house. We have about 15,000 left and my parents are always advising us not to pay off our house because they tell us, you know, if anything happens and if somebody sues us, then they can take our home from us. And it's not, it's not going to deter me from paying off the house, but I'd like something really smart that I can say to, to prove her wrong or something if I can. Well, you have homeowner's insurance. Yes, we do. Who does she think is going to sue you and take your house?

Who is she concerned about? I don't know. My parents are very much, they think that people are very sue happy, and they are. They're not wrong. What's your net worth? Sue happy and stuff. What's our net worth? I'm trying to figure out if you have a target on your back is what I'm asking.

No, definitely not. Definitely not. I think we make $92,000 after taxes, and our net worth is probably about $200,000. We're sort of at the beginning of everything. I'm just confused, Stacey. Do they have something that happens to them or someone they know that someone like, like taking someone's house? I mean, getting sued in general is a thing, sure. But they would still they could still take equity. I mean, that if that logic, that means you wouldn't try to pay on anything and have no, you know,

no assets at all, because afraid someone's going to take the asset. Like that's no way to live. Right. Yeah, I know. That's what I said. I'm like, okay, well, I'm not going to stay in debt forever just because of something that might happen. Right. Because there's a lot of things that might happen. But I was like, I'm just going to get somebody else's viewpoint on this. Cause like I said, it's, it's not going to deter us. We're going to shut off. Cause I don't want to, I don't want to owe anybody money anymore. Yeah. Oh, yeah. Yeah. Yeah. Yeah. I mean, and a good umbrella policy will usually cover things like if someone falls on your property and tries to sue you or something. You know, I mean, there's like Jade said, there's insurances and things to be put in place to protect you guys from something like that.

But I'm also concerned about how much they're speaking into this. Like, it's very interesting that they you guys talk a lot about money with them? I talk a lot about money with anybody who will listen. Yeah, that's fair. That's fair. It's kind of my favorite topic. Yes. You know, because, and I'm just excited about, you know, how we're just moving along with

things financially. But my dad was a contractor his whole life. And I think that there were a couple of times where, you know, people turned around and maybe tried to sue him, you know, and they, you know, it's probably like they were lying about things. So, but I'm sure he was licensed and insured. He was licensed and insured. And if something came, that's what that's there for, right? Yeah, exactly. exactly yeah and I think this is all out of fear on their behalf oh for sure for us yeah you know it's fine they're my parents but I was like hmm I feel like I could get a more expert opinion on this because me just being like no mom don't

be weird it's probably not a very good response I mean yeah at the end of the day I love what Rachel said because it's true if you go through life like that then you're never going to have any assets because you're just worried that someone could take them away from you. And in this case, typically, Rachel, I think we do umbrella insurance once you get to like a half a million net worth. And then from there on, you could, I mean, if you don't have a policy, I think you're fine. Once you hit 500,000 in net worth, you can pull one out and you can tell your parents,

hey, you can sleep at night now. I'm fully protected in case someone wants to fall down my stairs. But I think honestly, at this point, you're just fine. You're 100% fine. There's no target on your back. And at the end of the day, if someone wants to sue you, they can sue you and you would go through that process. And if you were at fault you were at fault and if you weren't you weren't so it's like this is a whole what if conversation that's really hard to just speak about because nothing's actually happened yeah and it's that relational tension too stacy of going against something your parents obviously have voiced so strongly against and i think

anytime as an adult still you know even if you have a relationship with your parents at any level, it is that weird feeling of like, oh my gosh, and I had to learn, you know, God love my parents. They're wonderful. But even certain things, I'm like, I had to learn, I can't control them. I can't, it's not my job to change their mind about X, Y, and Z. And so really living in that freedom of like, you know, Stacey, you're deciding this for your life and being so comfortable with that, right? Which I know you guys are because you said it, we're still going forward to pay off the house. But I do acknowledge just always that it's an odd thing to be doing something that your parents, quote unquote, don't agree with or discourage or something, you know,

but I'm proud of you guys for still going forward and wanting just some facts. But yeah, you probably won't change their mind even with a umbrella policy answer. And I think that's where you kind of have to just let it go. I agree. Thank you for the call, Stacey. That was an interesting thing to talk about. Well, let's see if we can pop into New York right quick and see what Donna is talking about. Donna from New York. New York, what's going on? Hi. Hi there. So I have a situation. I recently was approved for a HELOC, a home equity line of credit, through the same bank that I have my mortgage through. And they gave me an introductory rate for only six months of 6.99 percent. But then after the six months, it goes up to 9.7%. No! It's a gestable rate. Yeah, it's a HELOC. Terrible idea. Donna, why are you taking on HELOC? For several reasons. So I have

about $60,000 in credit card debt. 40 of that is legal fees. I have a crazy family situation unfolding. So about $40,000 in legal fees, $20,000 in just regular credit card debt. And I want to do some home improvements. And then also, I was thinking about getting maybe one or two income properties. Okay. Donna, how much do you make a year? $125,000. Okay. Donna, do not take this HELOC out. Don't take this out. Okay, you don't need to be doing home improvements right now. You have $60,000 in credit card debt

that you, Donna, with your income can clean up. A HELOC doesn't change that. It actually puts you deeper in a debt hole because of that. And then you're going to be taking out more than what you need for this to do home improvements and all of it. You need to slow down, Donna. Do not take this HELOC out. It's not going to be worth it. And it's an adjustable rate. You're going to get terrible rates of return and then you're stuck in it and you got to pay it off if you ever want to sell the primary property. So HELOCs are a terrible idea, Donna. I would suggest to start paying off this debt. If you hold on the line, Donna, I would love to give you Financial Peace University. This is our nine lesson course on money.

And it's going to give you the basics of understanding how money works and specifically with debt. And debt is a hard one to tackle because the way the world does debt. Absolutely. Is not, it's not a good plan. And so I want you to watch these videos,

take this information in and follow that plan, not the HELOC plan. Thanks for calling. This is The Ramsey Show. All right, you're listening to The Ramsey Show. I am Jade Warshaw. This is Rachel Cruz. Give us a call.

The number is 888-825-5225. And we will take your calls about whatever it is you want to talk about as long as it is related to your life your money and in this case you know tell us about your relationships we can talk about parenting a little bit we can talk about girl math it's a very real thing i know it's a very real thing but give us a call we'd love to talk to you in the meantime we'll go to miami we've got caitlin in miami florida that's my neck of the woods what's going on caitlin hey jade hey rachel oh my gosh my friend would be so jealous um because he has such a big crush on you jade it's ridiculous that's so funny Um, let's cut to the chase. Okay. So I have a car loan, um, of $4,629 left on that. Okay.

Um, I have student loans of $5,420 left. Okay. And then I have a credit card for $39 and 49 cents, like a monthly subscription for.39.49 like a monthly subscription for. I'm moving in May to North Florida. Okay. I don't know

what to do as far as like how to pay this and also like save to move because I'm new as far as actually following the baby steps and stuff um so yeah so what's causing you to move to North Florida um my brother and his family there um I'm a single mom and my son's dad isn't in his life and so I have a strong uh role model male role model for him and my brother is that. So just to be closer to family and whatnot.

Okay, do you already have a job in North Florida when you get there? I've been working from home for my current job. Okay, got it. Okay, so what's your current income? At the end of the day, this is just a dollars and cents equation. So what's your current income? Around $50. Okay. And are you currently on a budget at all or are you just, it seems like you know your numbers pretty well. So I'm just wondering. Oh, I just wanted to be prepared so I didn't waste your time on here. So I just started

the EveryDollar and I just noticed I've been spending stupid, like going out to eat and stuff, and so I'm like trying to actually, so I just don't know if I should focus on like paying extra for my car in student loans or if I should just save for my student loans. Do you have any money saved, Caitlin? Do you have any money that's not tied up in retirement or anything, just in savings?

No. Okay. No. Okay. And how much is the move going to be? Have you run any numbers when it comes to that? No, but I'm guessing like after signing a lease and stuff, it'd probably be like $3,000 to $6,000. Okay.

So in this case, what I would do is you could approach this in one or two ways. You said you're moving in six months. Yeah. In one way, you could approach it as kind of a storm mode where you're just stacking up as much money as possible. And then you move, you get there, everything's calm, everything's good. And then you start hitting the baby steps because you have no money saved. The other side of this though is, and here's where I'm the side of the coin that I land is, it doesn't sound like this is an urgent move and it doesn't sound like it's something that must happen in six months. It sounds like it's something you want to do. And if it were me, I'd probably get this debt cleaned up first. And then I'd feel the freedom to move, save up for that cost and, you know, kind of do that in a much more peaceful, less under the gun feeling. What is what do you think about that?

Because my I mean, I would agree that would be my first choice. But my lease ends in May. Will it be cheap? And from just like a standard of living premise, will it be cheaper, I'm assuming, in North Florida than Miami? Yeah, much cheaper. Yeah, much cheaper there. Like I'd probably save a thousand in rent. That's great.

Yep. So I'm kind of, I am, I lean on Jade's side of this, Caitlin. I, not that you have to pause all, not that you have to pause moving necessarily, but in these six months, I want you to gain some traction because you're starting to, you feel that level of like, oh my gosh, I've been out of control.

And now you're seeing the numbers with every dollar in the budget. And you're like, oh, I am, I am, I've been sending. So you have some really positive momentum in this direction of getting control of your money. And I want to keep that going. And so if I were you, Caitlin, I would have the goal to try to pay off, well, the $39, just do that instead of going to Chick-fil-A tonight with your kids, right? Just pay that off right now. Get that knocked out. And then I would try to work to pay off the car and then have a little bit of a nest egg for that move and I would do that move as cheaply as possible and I mean as like no because

it's just you and your son is that correct yeah yeah which is great and so I would Caitlin I would make it a I would be motivated to do it as as absolute cheap as possible to get up there and then when you're up there, you're going to be saving money on rent and all of that. And you'll be able to knock out the student loan because honestly, Caitlin, you have $10,000 in debt. And I know that probably it feels overwhelming maybe to you, but Jade and I, as we sit here on this side of the table,

we take calls all the time of people that are in far worse situations with debt. So my belief and hope in you, Caitlin, that you can pay this off is so great. Like it is so great. And if you can find a way to do some extra side work at night, maybe from home, work extra. Jade always talks about getting your income up

and all that. Like you can actually do a couple of these things, turn some knobs and you're gonna see real quick progress, Caitlin. I really do believe that. There's also another thing. If you were interested in paying off all this debt before you moved, you could check with your landlord and say, hey, I know my lease expires in May. Is there any way that I can do a couple of more months, just month to month? Because here's my goal. And maybe just talk to them and find out find out and in these situations I want to get as much information as possible so I know what all my options are and then you can really make the best decision for you if he says no look in May

that's it you're out then you know do what Rachel said and it's like try to pay off as much as you can stack up some money do this move on the, but you might have more options and you know, you just haven't asked yet. So it's worth it in my, that's what I would do. Yeah, for sure. Yep. Yeah. No, that's great. I actually didn't even think of that. So thank you guys. Yeah. Especially if you've been there for a long time, like if you've been a tenant there for a long time, you're trustworthy. You've always paid your rent on time. If it's me,

there's no reason why I wouldn't grant the favor because you're a good renter and I'd want to keep that person as long as possible, especially if you came in and then said, hey, if I can have like three or four months, month to month after May, and when I leave, I have the perfect tenant for you. That's great. That's a great deal. That's what I would do. Yeah. And Caitlin, remember your number one goal, well, if I were you, I'd pay the $39 credit card and close it today. So I just get that out of the way. But besides that, making sure you have that $1,000 emergency fund. That's going to be the very first step.

And Caitlin, for you and your confidence, even doing that, getting $1,000 saved on the side, going from $100 to $1,000 where you are, I think that's going to give you that peace of mind and that level of control of like, okay, I know my plan and it's working and it's working. So I'm excited for you, Caitlin. I think you're going to do awesome. Awesome. And just a shout out to all the single parents out there. Yes.

It's, I mean, when you're it in every aspect of life and then you're taking care of a kid in the middle of it too, I'm like, it's a lot. Your mind is all over the place. So there's a little bit of that. Of course, of course you would be where you are, right? So there's no shame or embarrassment in that.

But it makes a lot of sense wanting to be by family. Yes, for sure. For sure. I get that. I love it. Especially, you know, family. It's the Christmas season. This is my segue.

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You go to ramseysolutions.com slash store and you'll be able to find the gifts you're looking for for just $12. That's ramseysolutions.com slash store. That's exciting. That's what I'll be doing some of my Christmas shopping. You can count on that. It's good. Awesome. This is The Ramsey Show. What's going on, guys? You're listening to The ramsey show give us a call the number is 888-825-5225 and we will chop it up with you i'm jade warshaw this is rachel cruz let's check out our neighborly question of the day it says today's question of the day is sponsored by neighborly your hub for home services when was the last time you thought about your dryer vent? Clogged dryer vents are the cause of thousands of dollars of house fires every year. So let the experts at

dryer vent wizard clean yours. Visit neighborly.com slash Ramsey to schedule your service today. I know how to schedule. I'll schedule them. I'm ready. I don't want that. I don't want that. So today's question comes from Jim in New Jersey. What is the max amount of time that you should hold off investing for retirement while working Baby Steps 2 through 3? We've been working hard on Baby Step 2, mostly student loans, since May of 2020. Our final payoff will be put off a bit as we are welcoming our third child in early 2024. I am starting to worry that we are delaying investing for retirement for too long. Any input would be helpful. Yeah. And I think this is a great question because it's true. Like if you feel like, oh my gosh, I'm not contributing to retirement. And if you know

about compound interest and all of it, it may be this urgency may come over you where you think, oh my gosh, am I losing out on time? Yeah. And the truth is, yeah, I mean, I guess you are if you're not investing, but your money's going to something better. You are getting out of debt. You are eliminating any risk in your life. You're going to be saving up an emergency fund of three to six months of expenses after you do that. And then after that, you have your entire income at that point besides your mortgage to be able to throw at investing and so funding 15 of your income into retirement especially if you're still having babies because i'm assuming age-wise yeah 20s 30s into your 40s right so you still have some decades there to be saving and so what the

problem is is that people try to do too many things at once with their money and they and they're spread thin they're trying to throw some in a kid's college fund and some in retirement here, trying to keep up with all the statements of all the debt and just trying to payment on payments there, maybe throw some on a savings account. And it's just, you don't get a lot of progress when you do that. And so the intensity of paying off that debt not only gives you freedom financially, but it gives you this emotional emotional, spiritual freedom to where you can actually breathe and not have this risk and this weight that you're carrying around. And then you have your whole income to go and invest. And what we find, Jade, is people end up doing better. Yes, they do better when this is the plan. So I understand the, oh my gosh, are we getting behind?

You're not. You're fine. That feeling is true. But mathematically, how it ends up is that you're fine. You'll be fine. When Sam and I started paying off debt, just the payoff, just the baby step two process was seven and a half years. No investing. Then we needed to save our three to six months. Then we wanted to buy a home and we needed to save up that money. So when I tell you during the course of that time, whatever it is, he doesn't say how many years it's exactly gonna be, but what's gonna happen is your income is gonna go up.

That's number one. And so when you finally get the chance to start investing, by large percentages, you're gonna be investing more than you ever would have during those other years. Now, don't get me wrong. I missed out on some time. Like that's just, that is part of it. When you have debt to pay off, there is a little bit of a consequence that happens there. And I do think

that we have to accept that as people who have gone into debt and as people who are having to come back and pay the piper for that. And I've accepted that. I'm like, you know what? I missed out on some years. But during that time, we worked our butt off to make sure our income got up so that when we did start investing, we would be able to make up for some of that time that was lost. And the good news is most people are out of debt in two years or less. So they're never going to have to face that. But just know on the other side of things, we're doing just fine is all I'm saying. So you'll be doing just fine as well.

So don't let that hold you back. It's good. Very, very cool. All right. Let's see if we can take some calls here. Let's go to Jacob. He's in Philadelphia, Pennsylvania. What's going on in your world, Jacob? Good afternoon. Thank you for taking my call. You bet. My question was, I'm kind of new to the show, I've been listening to it, and I have some stocks from an employee purchase plan from a college shop that I have. I have a car loan of about $14,000,

and I'm wanting to get your input on cashing out on the stocks and paying off the car right away or letting the money kind of grow in the stock portfolio and just paying the payments I've been paying. Yeah, so how much money do you have in these stocks? It's the employee stock purchase is about $50,000. And then I have like index funds, which is like another $16,000. So it's about $70,000 on average.

Yeah, good for you, Jacob. That's great. And you have no just liquid cash? I have about $20,000 in like an annual like 4% saving. Oh, okay. Well, honestly, I mean, at that point, I would probably just take the 20 and pay off the $14,000 car loan.

I would go, the stocks, single stocks are always, it's always a risky, you know, move there. So I almost would just move those anyways to probably go back to that index fund that you have. Is it just a vanguard account or what is it um they're they're s&p index funds okay um but yeah yeah so um so yeah so i would probably get out i would get out of the single stock game put them in the index funds but i would use that 20 grand you had to go ahead and pay off your car how much do you make a year uh it's about um with

my wife and i it's about 35 uh hundred a month a month okay so y'all are right at okay about 40 okay what's the purpose of those index funds what what were you stocking that money away for for um it was just kind of um it was like i got, uh, I got advice, you know, you put 10,000 away and, you know, over 20 years, it should be, you know, 400,000. Um, if it's the annual growth is 20%. But it's non-retirement. It's just a brokerage. Correct. Um, but I do also have, um, a Roth 401k, uh, from this previous employer that's like another $40,000.

And are you consistently contributing to that? No, I work in a different area now, so I haven't been contributing to that. And that's kind of where I put the index. I'll spend money for the index fund whenever I got like a yearly bonus or some like extra money on the side. I'd like to give you some, I'd like to give you a bit of a clearer picture of how you're using your money. Is that, is that okay? Cause I'm listening to you talk and it kind of sounds like there's some over here, there's some over here. I have this, but it's not working together as efficiently as it could. Yeah. Can we agree? Yeah, absolutely. So if I were you you and this is the framework that we use for everybody that calls in and it works for everybody if i were you um i would do what rachel said which is i'd take that 20 000 that you have that's liquid i'd pay off your car right do you have

any other debt laying around or it's only the car uh consumer it's the car and then a house which is like i have about 139 remaining. Okay, awesome. So once the car is clear, you're consumer debt free, and then you've also got $6,000 left. I would take that $6,000 and pull out whatever other money out of some of these stocks, and I would make sure I have six months of expenses set aside. Then after that, go ahead. I'm sorry. In my mind, like when I was thinking about the 4%

annual, that 20,000, that's where I was kind of like listening to the steps. I kind of considered that would be like my three, six months. Well, it would be, but the first thing you've got to do is pay off your debt. That's thing one. Once the debt's out of the way, you can stock back up money in a similar, I mean, you can use a high yield savings account. You're still going to get 5%. So that's great. But the idea is right now, I feel like you've got this money in stocks and S&P 500 accounts where it can be used in a better way. So what I'm suggesting is paying off that debt, saving up three to six months in a high yield savings account. And then what I would do, do you have kids? Just got out of two under two, but yes, two young ones.

Okay, so then after you guys have already got a house, so you've already done that whole thing. But the next thing is I'd start putting some of that money away in some 529s for them. So you and your wife can decide a certain amount, chunk some over for baby number one, chunk some over for baby number two. And then whatever you have next, I would throw that at your mortgage.

And that might leave you. Go ahead. I have about $4,000 for both of them set aside right now. Okay. And are you. That's great. Are you actively adding to it or you're fine with that? I've been kind of just putting cash aside in the past couple months. The point I'm trying to make is I want you to be making really clear, really intentional decisions about how you spend

this money. I don't want you just saying, I'm going to make a big chunk of it over here because it's not working best for you. It sounds like the things that are important to you are your kid's education. It is having money saved and it is paying off debt. We're just going to give you the most efficient way to do all of those things. And in the end, you should be investing 15% of your income every single month out of your paycheck once this debt is paid off. So that's what we're trying to get you to. This is The Ramsey Show. You are listening to The Ramsey Show. I am Jade Warshaw, your host. I'm joined by a best-selling author and host of The Rachel Cruze Show, Rachel Cruze.

And we are taking your calls all afternoon long. Your life and your money. Give us a call. The number is 888-825-5225. Let's go directly to the phone lines. We've got Matt in Albuquerque new york albuquerque new mexico not new york what's going on hi uh yeah i just kind of wanted to run by uh my car purchase with you and see if i made an irresponsible purchase i don't think so oh this is fun matt

this is fun pop quiz time we'll tell you true or false yeah if you financed it i'm probably gonna say true but let's let's talk about it what's going on so i needed a car because i had a car that i ran into the ground that put like 275 000 miles on it and it needed a five thousand dollar repair but the car was only worth maybe a thousand bucks at this point and so i got rid of it and i decided to get something new, reliable that I work a lot. And I just the unforeseen not having a car just doesn't work for me. There's a lot of caveats here already, but keep going. Yeah. Yeah, sure.

And so I decided to get what I wanted and it wasn't too expensive. But from where I come from, like I, for a long time of my life, I was a drug addict with nothing. Right. And I was never used to having any money. And now, you know, I waited tables to put myself back through school and ended up in a career. Thank you. Thank you. I'm seven and a half years clean. That's great. Congratulations. Thank you. Thank you. I'm seven and a half years clean. That's great. Congratulations. Thank you. Thank you. And so I decided to, you know, treat myself and get the car that I wanted. So what'd you spend?

So kind of, I spent, after down payment, the amount of finance is $26,000. Okay. How much do you make a year? After taxes, I take home about 96 grand okay good for you what are you doing now way to go work wise thank you i'm a pipe fitter okay good for you well matt you're impressive in general i think the idea of beating addiction or being in a certain lifestyle and then completely by your own admission just completely changing your life around is the biggest thing ever, right? Car payment or not,

like people like you that do that, it's remarkable, absolutely remarkable. And I find that with a story like that, or even we talked to people, we talked to a lady yesterday who she battled cancer and she got over it, but she went and purchased a new car she wanted. There's so many emotions tied to money and there's this level of celebration or

this level of like i finally like like i don't want to drive the crappy car anymore like i want a break give me a break life give me a break like it's been tough right so so that emotion is is very real it doesn't um eliminates the mathematical side of it right regardless of why we purchased it there is still debt in the picture so um so yeah i would it's not an insane number compared to your income like if you're making thirty thousand dollars i'd have to tell you have to sell this but you could probably pay it off pretty quickly do you have any other debt at all besides just the car um on my house okay i purchased the house and um i have about 80,000 left on the house okay chucking it away as fast as i can yeah good for you so do you have any um liquid cash about 12 000 okay awesome um yes okay go ahead i have a i have a 401k um where my company puts in five percent of my income and then i put in um 15 on top of that

okay and the eight grand a month is after i put in the 15% as well. Like that's just my take home. Okay. Awesome. Good for you. And I'm union, so I don't have to pay for healthcare. I don't have to pay for any of that. That take home is my money that I just get to do with as I please. Awesome. That's great. Okay. So what I would do, Matt, is I honestly, in your position, I would pause that 15% going into retirement for now, get some of that cash back in your paycheck. I would take $11,000. You're not going to like this, but I would take $11,000 of that savings, bring it down to $1,000. I would throw $11,000 at this car. And at that point, you're going to have $15,000 left in car debt. And I would do whatever I could between now and April. Give yourself a timeline, kind of map it out and

say, if I work extra, if I work nights, if I drive Uber, if I like go crazy for about four to five months, knock the rest of this out, and then save up more on top of that thousand dollars to a three to six months of expenses in an emergency fund and you could do that by fall of next year and then press play again back to your retirement then and be funding your 401k so you're really just going to pause it i'm making up timelines you would have to run your own numbers but you know for a year maybe pausing retirement to get this debt paid off, to get an emergency fund back into place. And then you're well on your way, Matt. And then your mortgage is 80 grand. And if you start, yeah, putting more towards that even, you're going to pay that off really quick. And Matt, it's going to be a whole new world for

you. But I would do what I could to pay that that car debt off as soon as possible yeah that's what I'm thinking I think I could get it paid off comfortably in the next I mean if I take that money out and I put it towards the car probably six months yeah I could get it paid off easily yep for sure I know and then I would say too don't do it comfortably maybe it's really uncomfortable you do it in four months, right? Like you do some stuff that you really do sacrifice and just do it. Are you single?

Married? I have a girlfriend, but no financial price to anyone else. Yeah, that's great. So I think now I'm like, this is the time. It's the time just to do it because the other power, Matt,

and go to RamseySolutions.com and look up our investing calculator. I think this is always fun, especially with a car payment because it's a depreciating asset. Throw your car payment in an investment calculator and just say from now till I'm 65, like how much could that be at retirement?

I mean, because Matt, you're well on your way to becoming what we always say is Baby Steps Millionaire. So it's powerful. And who you are, Matt, and the story you told us at the beginning i'm like oh yeah this is like this is a piece of cake if you can get over if you can tackle an addiction like this car thing oh yeah this is nothing i mean this is this is four months of lifestyle sacrifice and some extra you know work that's right on top of your job like you can do

this but i think that i'm pretty used to being uncomfortable. Yeah. Yeah. You would have to be. I'm looking at these numbers and how you turn turned your life around. And that's just unbelievable. How old are you? I'm twenty nine. Twenty nine. OK, way to go for you. That's awesome.

Well, thanks for calling, Matt. I hope that gives you some direction. But again, that's a real thing, Jade. That's where we always say money's never just about money. There's so much more underneath that is kind of churning that causes us to do the things we do with money. I wrote a book called Know Yourself, Know Your Money all about this because I'm like, whether it's your childhood, how you were brought up, the life you're living today, your fears, your dreams, your natural God-given personality and tendency, environment. I mean, all of this shapes why we do the things we do with money. And so for him, I'm like, yeah, the idea that you climb this massive mountain personally and what he was dealing with, there is that feeling of like, golly, I deserve a good car.

This is what I've done. I owe it to myself. Yeah. and I get that right you don't you don't want to drive the crappy car but also that doesn't eliminate the financial ramifications that's right that come with it so being debt-free gives freedom in another part of your life that's right in that money side and luckily he didn't go too far off the rails like I was expecting him to be like I spent fifty thousand dollars yeah yeah you know an escalade so he he kept it somewhat reasonable luckily he'll be able to pay it off in the next year um if it was more than that though we might

have given him different yes different advice but yep I know selling the car and and for all you listening it um and this isn't to pick on matt by any means but just in general the car debt for me jade is the one that hurts the most when people call in because i'm like okay credit cards you know some people are doing it to keep up with their bill like you get you you you can to a point be like okay they're the student loan thing we all know why you know people fall into that trap all the time uh there's certain parts that you can kind of see but it's the the car debt one it always gets me because of the amount people pay in payments we actually did a video together or saw a video together people and it was like twelve hundred dollars a month in one car that's

going to car payments and you're just thinking no and i'm not even an overly math nerd but i'm like you invest that instead let that work for you then the car dealership or the bank, like it's crazy. So it's great. The car payment, it's what keeps the middle class middle. And it's what keeps you broke. So make sure to get those cars paid off. It's not worth it to pay a payment the rest of your life when you could use that payment to become a millionaire,

which is what Rachel Cruz so eloquently said. That does it for this hour of The Ramsey Show. Check us out next hour.