The Ramsey Show - App - Should I Buy a House or Rent? (Hour 1)

Episode Date: August 4, 2023

Jade Warshaw & George Kamel answer your questions and discuss:   EveryDollar, budget for the life you want today for free: Click Here "How can I start my financial journey as a recovering addict?" "Should I buy a house or continue renting?" from the blog: Should I Rent or Buy a House? The importance of fun money when budgeting in marriage. from the blog: Why You Need Some Fun Money in Your Budget, Which debt should I pay off first as a single mom? Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Enter The Ramsey Cash Giveaway for a chance to win $3,000! https://bit.ly/TRSCashGiveaway Want a plan for your money? Find out where to start: Click Here Listen to all The Ramsey Network podcasts: Click Here Interested in advertising on The Ramsey Show? Click Here Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's the Ramsey Show, where America hangs out to have a talk. A conversation, if you will, about your life your money we are taking calls all afternoon give us a call the number is free although george these days all calls are free triple eight eight two five five two two five joined by the parsimonious george camel did you google that or is that just in the rolodex that's in the rolodex i like that word because it means frugal wow that's a good word isn't it itx. I like that word because it means frugal. Wow.

That's a good word, isn't it? It's a very expensive word for someone who's frugal. Okay. Tell you that much. Yeah, it's kind of like an oxymoron. But I like it. Yes. Love it. All right, guys.

Give us a call. Like I said, call in. We're going to talk about your life, your money, and George. Let's just go straight to these phone lines, okay? I'm here for it. We got Tabitha in Atlanta, GA. What's going on, Tabitha? Hi there.

First of all, I am very excited that I even get to speak with you guys. So I have several questions. Basically, okay, so I'm a recovering addict. I'm sorry, I'm a little nervous. That's okay. We got you. You're doing great, Tabitha. We're here for you. We're with you.

We're going to hold your hand and get you through this. Awesome. Okay, so I have been in recovery from heart addiction a majority of my life. I am six years clean. Awesome. I now work as a certified peer specialist and a case manager for the Georgia Adult Drug Court. So this is what's going on. I am never, I was born in poverty and basically my parents were addicts themselves. So I was never taught any of these things until I just recently

started watching these YouTube videos. And it's like a light bulb in my head. I have a, I have a career. I do not have any college education. I'm living from check to check. I live in a, um, a home for women and children. Um, so I'm a single mother and I live in a home where I only pay 30 percent of my income a month so I pay $700 in rent a month for where I'm staying but I am living from check to check.

I owe $4,000 to Aspen Dental because without education and the research, I just ran to the first place to get my teeth fixed. Okay. So the only debt I have is the $4,500. I'm 39 years old. And I want to be successful. And I want to be successful with my money. And I want to break the chain of poverty for me and my son so he can have a great life. And I don't know where to begin.

Well, first of all, you're already breaking that chain. Six years clean. The fact that you're diving in, you're looking at YouTube videos, you're calling into the show. You are breaking that chain. I know I speak for myself and George when I say we are so proud of you. Thank you. Very, very, very good. I'm inspired by her story already.

And when we talk about changing your family tree, this is it. And I cannot think of a more noble and strong why than the one that you have today. And that's what gives me hope that you are going to get to where you want to get financially. And we can definitely help you get there.

So what's your income looking like? Okay, so my annual income is $34 um 34 000 and how much do you see every month in your check so every month of my check um one two thousand two three i see about uh 2300 okay 2300 and you've got your rent going out and then you've got this dental situation. You said you're a single mom. How many kids do you have? I have one. One child.

How old? He is six years old. Very, very cool. Six going on 36. Wow. So that really was your why. Six years old, six years clean. Very, very cool.

Okay. So what are your other expenses? Do you have fixed expenses where you're renting right now? Because I'm seeing there's $1,600 left. You still got to put food on the table. You got to cover some other bills. So you're saying I'm paycheck to paycheck. What do you think is the cause of that right now?

I'm going to tell you what the cause of that is. Okay, so when I got this employment right here and I started working with people at the government center and everything like that. When I say I was never really taught how to money, the tool that you use, it's not to just spend, spend. And when I was going to Macy's to, to catch up with the Joneses, I was getting perfume, high heels outfit.

I decorated my, my apartment because I thought this is what you do. You decorate and you make everything look great. So you're saying that you were just kind of spending like crazy and I'm guessing that you're ready to stop doing that. Absolutely. Okay. So what I would do, and we're going to set you up with EveryDollar. Are you already on EveryDollar? No. Okay, so EveryDollar is our budgeting platform here at Ramsey. It is the best and easiest budgeting tool that's out there, and I can say that from personal experience.

We're going to set you up with that. Don't get off the call until you get that from our phone screener. And more than that, I also want you to sign up for a webinar that I'm hosting next week on budgeting. We're going to walk through all of that together. It's free. So we'll also make sure you have the information for that. And in the meantime, like George said, you've got this great margin here. Obviously, I'd like to see even more margin. Is there something that you can do to increase your income? It would be amazing if I could go get a second job. The only problem I have with that is finding someone to watch my little boy at night. Luckily, I have school

during the day. I work the nine to five hours, so it works out perfectly. But that would be... But there's no child care provided through your housing right now? No. Okay. Absolutely not. It's like it's definitely independent living. Yeah. With your skill set, could you get another job that would pay more in the same kind of

field or same role in the Atlanta area? Working towards that. Okay. Okay. And that's what the school is for? The school, well, right now, I don't have no schooling right now. Oh, okay. Okay. Sorry. When you said you were at school during the day, my mind kind of went in a different direction. So my son is at school during the day. So that's why these hours, they fit perfectly. But I'm also at this point, maybe if i were to go get that second

job um i could make it happen yeah so you're you're you're a1 and a2 here are we're getting on a budget which is we're listing out those expenses you know what you got to pay for right the 700 in rent food utilities transportation all of those four walls you've got to do. And then anything extra, if you have extra, we're hitting it at this debt. And in the meantime, we're looking on opportunities to get your income up long term. And in the meantime, even some short term opportunities to get that income up. How does that sound? It sounds amazing.

You're amazing. It sounds so, it's like, it's like a light bulb that has been over my head for the past week and a half. I've been walking around. Some of my friends think I'm crazy and everything. I'm like, I've got a plan now. Come on. It's a good sign. If people are making fun of your financial plan, you're going in the right direction. I know.

That's right. You are going to inspire so many people, people who have been where you've been, people who want to be where you're going to be. And I can't wait for you to call back and share your debt-free story. You're going to be there in no time. $4,500 feels like a mountain right now. You're going to look back at that when you have a fully funded emergency fund, no debt, saving for the future going, I did that. Yes, ma'am. Hey, hang on the line. Don't forget, we got every dollar for you. We got my webinar for you. And hey, make sure she goes through Financial Peace University as well. This is The Ramsey Show. You're listening to The Ramsey Show. I'm your host, Jade Warshaw.

Give us a call. The number is simple. 888-825-5225. But before we go to the phone lines, my host, George Campbell, and I have to talk about something so exciting that's going on john deloney dr john deloney ramsey's very own has a brand new book coming out uh it's the pre-sale has actually already begun and it's been going like hot cakes i mean people are just it's like they've been waiting with bated breath for this exact book in this time. Oh, yeah. And the world needs it. Let me tell you, we all need it. This book is called Building a Non-Anxious Life. I feel like it was written for me.

Yes. Have you started reading it yet? They haven't given me a copy yet. I got one of those. Jade got one. I saw it on your desk. So I might steal it. If you work at Ramsey, you got like a pre, I don't know.

The advanced reader's copy. Oh, thank you, George. That's what it's called. I was about to call it like a, I don't know what I was going to call you george that's what it's called i was about to call it like a i don't know what i was gonna call it but we got one i started reading it last night love it i knew john let me tell you something about dr john the way he talks about mental health it just hits different yeah just it's not like not stuffy it's not heavy it's somehow light but also you're like gut punch yeah it's not like a bunch of jargon and studies and even i can understand it and and that's saying something that is saying a lot but if you go ahead and pre-order today you'll get 75 dollars in free bonus items and these bonus

items are pretty legit you get a you get to see uh one of his latest talks that he did i actually saw the talk it's incredible one It's worth it just for that. I mean, you pay 20 bucks and get the talk, and then you're getting the book for free at that point. That's how I see it. That's right. That's worth it. You get the audio book version of it,

which in my mind, look, you need to read with your eyeballs and your brain, but go back and listen to it too, because there's something about hearing it in the author's voice that's like- I like John's voice too. It's comforting. It's got kind of like a Batman tone to it. Interesting. He's got that kind of guttural oh yeah okay i'm batman okay more of a lego batman

vibe which batman michael keaton ah you know i'm more of a christian bale guy i'm gonna be honest dark very the dark knight okay that was the best one i'm'm with that. But in this book, we digress. In this book, Dr. John Deloney talks about six daily choices that you can make in order to actually build a non-anxious life. It's not like this thing in the clouds. He actually brings it down. And there is a framework that you can follow similar to the baby steps. And I like me a good framework, George Campbell. So absolutely.

Pre-order today. You can do that at ramseSolutions.com. All right, let's go to Kansas City, Missouri and talk to Justin. What's going on, Justin? What's going on? Thanks for taking my call. You're very welcome. I had a few questions about, so I'm in a market for a house, but I never owned. I'm 45 years old, so I'm anxious to own. I'm sick of dealing with apartment complexes. I make $52,000 a year, but I have student loans, $20,000 in debt with that. That's my only debt.

I own my car. No credit card debt. Very good. I bring in about $1,450 a you know, so 2,900 that's after the pension. I work for the city. So the pension, and then I do another little retirement of 401b and then, you know, insurance. So that's what I take home about 1450 a check 2900 a month so the issue is here kansas city's like becoming like nashville everything is just shooting up and i'm people are telling me you need to buy now you're going to miss the boat and then i have people telling me the market is you know which i do believe it don't

kansas city should not be the price that it is. I'm sorry. It's a great city, but it's not on the coast. It's not Chicago. Sure. But it is the reality. I mean, the reality is it is more expensive to buy a home right now. I mean that it, the struggle is real and it kind of sucks,

but that is the reality. And we have to accept that. What I will say though, is the time to buy a house is not when other people tell you, it's not when the market is just right. The time to buy a house is when you can afford to buy a house. And so let's look at it through that framework and let's kind of walk through these numbers here. So you've explained that each month you're taking home 2,900. Now this 401B, is that voluntary? Are you able to

get out of that? That's voluntary, yes. Because we have a pension where I am, so that's supposed to be like an add-on to our pension when we retire. How much a month goes to that? I pay a month, $100 a month, $50 a check. Okay. So what I would do, the way that we teach it here through the framework of the baby steps, is I would suggest that you pay off your student loans and get completely debt-free first before you do any type of home purchase. And then after that, I want you to save up for a really good down payment. So do you have any money saved yet? I have only about three grand saved, but I do want to add, and I didn't tell you this, I am a veteran and I was going through the veterans. They have pre-approved me for way over than I could even afford, but they said you don't really need, they just want earnest money

and they said maybe the closing cost you know but here's the problem with with the va loans i yeah i love that we're like let's help the veterans but then the way we help them is by letting them get into a house while they're broke with no equity right and it ends up hurting them long term because they become house poor they can't afford other financial goals and so the va loan can be an okay deal if the funding fee is weighed a wave days based on your disability rating but i still would want you to have a good down payment and you're probably still better off going with a conventional fixed rate loan i agree and also i'm new i just got into my job uh post covid and there is the next step up for

me would be 9090,000. Now, that could be, I could get that at Christmas time, or I could get it in seven years, or I may never get it. So I don't want to base it off that. Oh, for sure. You want to base it off, I mean, obviously, yes, your income is going to continue to go up, but here and now we want to base our home payment off of our current income.

It would be one thing if you're like, hey, next month I'm starting a new job and I'll be making 90 grand. That's a little different. But right now, since you don't know when that's going to happen, we're looking for something where the payment's no more than 25% of your take-home pay. So you can kind of run those numbers back. And as a matter of fact, we've got a great calculator at ramseysolutions.com, how much home can I afford?

And you can type that in and use that calculator and it's going to help you see, okay, here's what I need to save. Like this is the amount of the purchase. And then you can run that back and say, okay, how much do I need to save to put a good down payment? It would be amazing if you could put 20% down and then you could avoid some of the fees that are associated with it, but get as close to 20% as you can. I agree. And you know, cause you don't want to be trapped. Like my rent is only 900. I know it will go up. That's right. I'm looking at mortgages, 1600 and you're right. I would be house broke. Yeah. And that's not going to be a blessing.

I know people are telling you, get a house, get a house. You'll never be able to get a house. They don't pay your bills, Justin. You got to pay the bills. And when you barely can put food on the table and cover insurance and cover no other goals, and then one emergency hits and you got no money while having student loan debt, you're going to be calling us back saying, I got into a house before I should have. What do I do?

And I don't want to see you there, especially veterans. I've got such a heart for veterans. Thank you for your service and sacrifice. And I believe that you can do this in a peaceful financial way, but it might be five years from now instead of a year from now. That's right. And it might not be the home that you can do this in a peaceful financial way, but it might be five years from now instead of a year from now. That's right. And it might not be the home that you're envisioning. I don't know what you have in your mind, but you got to remember like this thing,

George, it's a ladder. And sometimes you start with a condo and then you go to a townhouse and then you go to a small single family and then you like, don't think that you necessarily have to start out with that four bedroom. Are you single, Justin? Pardon? Are you single? I'm divorced. Yeah. Okay. I'm divorced.

So it's just you. We don't need to go get a four bedroom in Kansas City just to have some different room. I don't see many rooms in my house. I'm in the kitchen. I'm in the living room and I'm sleeping. I know. That's right. I'm still wondering why I have a dining room.

I don't know why that happened. But you see the point, Justin. Reset your expectations. Get out of the student loan debt. The Baby Step 1, $1,000 emergency fund. You have that. So you're at Baby Step 2. So the key here is let's get our income up and knock out this $20,000 in student loans. Let's get the emergency fund in place, three to six months of expenses. Then let's start tackling the down payment. And you might need to move. We might need to go, hey, I got to get out of Kansas City. It's too expensive. Right. That's right.

Right. And the student loan, I could put more down on it, like treat it like a car payment, right? Yes. Especially if you pause investing. You're doing 17 things at once, and they're all good things, but we've got to have some focus intensity right now. And that is where the baby steps work every time you work them. That's right. We're putting any and all extra money that we can find, scrounge up, dig up, work up.

We're putting that on the student loans and we're going to pay them off with intensity as quickly as possible. That's how this whole thing works. That's how you get out of debt. That's how you pay off your student loans. I don't care who you are, whether you're Justin or somebody listening out there. Pay off your student loans. Do it with intensity. This is The Ramsey Show. in or somebody listening out there pay off your student loans do it with intensity this is the

ramsey show you're listening to the ramsey show jade warshaw your host today joined by george camel with an amazing youtube show by the way oh thank you yes the george camel show you were not paid to say that no but i appreciate that you know it wasn't one of your obligatory hey jade you got to talk about this that's right so thank you i just looked at your wonderful face george and i thought this guy's got a wonderful youtube you let me be on one of your episodes that's right we were it'll be out very soon we did a really fun interview with jade that you got to tune into so go you can go subscribe uh youtube.com slash george camel and we got three episodes a week i mean the team is crushing it it's hard to take credit as you know because the team is doing so much work to

get this stuff out the door and we're having a blast doing it but dude the amount of people who are subscribing to that page because it's so good you got to feel some type we were like i want to become the first ramsay youtuber yes you know not a show that happens to be like we are making it for youtube and we're having a blast. Totally, totally different from all the other wonderful offerings that we have here. But this is totally different.

And that's very cool. A lot of millennial memes and snark and quick cuts. I mean, it is. It's like squirrel brain. It is. I love it. I love it.

It's great. Check it out. In the meantime, George, something really funny came through. You know, we're always here reacting to articles, different things that pop up that we think are going to be relatable to you. And this is one, George, from the Wall Street Journal. Yeah, this shocked me. Here's what they

said. $50 or $500. When do we tell our partner what we've spent? And it goes on to say cap on purchases reduces conflict and preserves financial autonomy in a relationship. And I'm like, let's go Wall Street Journal. Like they're talking about this stuff. And they got it right for once. Yeah. And so this is something that we've taught for years and that is often misunderstood. Yes. Because people say, Jay, do you want me to combine bank accounts? I'm going to lose all autonomy. I'm going to lose who I am as a person.

Yeah. And I'm going, by combining bank accounts, it doesn't mean you don't get to spend money. It just means that you talk about it first. Right. Exactly. Yeah, exactly. And even in the framework of even budgeting, sometimes it's like this idea of, if I budget, I won't get to spend my money anymore, or I won't get to do these things. And it's like, no, it's all of this together. We're budgeting, we're talking with our spouse, and we have line items on there for personal spending. Yes. Right? It's not this like, don't tread on me, Jade. You can have your own line item. It can be Jade's fun money and Sam's fun money. That's right. And it is. And you set the limits for both. My wife's fun money is more than mine. Yeah. Because she deserves the finer

things in life. And I'm like, it hurts for me to spend money. Okay. I got several line items on the budget that say Jade next to it. There we go's hair it's nails yeah so it's not about this like well you got to spend 50 so but if there is a cap say hey if you're gonna spend more than 100 bucks we got to talk about it first yeah well you know especially if you've kind of got like a like a slush fund or like a miscellaneous category that's just like hey, Hey, this, this money right here is a little bit up for grabs. That is specially you need to talk to because if you've got line items on your budget, let's just say I've got a hundred dollars of fun money.

I, you know, correct me if I'm wrong, George, but I'm like, I get to spend that a hundred dollars. And as long as I'm not doing anything illegal, I don't really have to tell you what I just did.

And now if you ask me, if I come home and Sam's like, Hey, what did you do? I'm like, Oh, I went to Target, blah, blah, blah. But then if there's that kind of fund in the middle, that's like $200 miscellaneous. I don't think it's fair for someone to just go in up and spend that without saying first, hey, that $200, I saw a lamp at TJ Maxx. I was thinking about getting it. You know what I mean? Yes. And so the key here is

communicating upfront and don't blame the budget. Blame your lack of communication. The budget didn't do anything wrong because you're the boss of the budget until it's done. Then the budget is the boss of you. So have the conversation with your spouse and say, all right, we're agreeing. Jade gets a hundred, Sam gets a hundred and you can do what you want with that. Yeah. And we're going to talk about it. But this idea that you need this autonomy with money is just an excuse for financial infidelity, for selfishness, for immaturity. And you don't lose that because you're married. And by the way, you lose autonomy just by getting married. And John Deloney had a great clip on this.

Yeah. Well, you don't, you lose your sense of personality or identity, but it's not all about what you want to do anymore. That's true. There's another person involved. Yeah, you know, that's true. That's an interesting conversation because I do think you still have your autonomy. I mean, you still have your freedom. You still have your freedom, but it's a more matured view of freedom.

It's teamwork now. Yeah, you're free to make choices, but those choices are with your husband. You're still free to be able to do the but those choices are with your husband you're still free to be able to do the things that you did before but you understand how your actions affect the other person like there's still i don't feel like you like get confined in this way it's just like okay like we're learning about each other this is what i like to do but you're open about it you're talking about it and uh i'm curious george whoa curious george i'm curious, George. Whoa, curious George. I'm curious, George, about you and Whitney. Oh, yeah.

So is there a number that it's like, hey, if you spend this, don't come home having spent this and not talk to me because it's going to be fireworks. Well, there's categories like groceries. If Whitney goes and spends $100 on groceries and it's in the budget, I'm not like, whoa, you spent over a hundred bucks. It's those things that are outside of the normal household necessity categories. Uh-huh. Like we just bought a tapestry for decor that she's been wanting a long time. Tapestry?

A tapestry. I know. I didn't even know these words existed. And it's from anthropology, which if you know anthropology, everything there is like a bajillion dollars. Yes, that's right. And so we talked about it. She was like, hey, I'm going to buy this tapestry.

I've put it in the budget. I've been wanting this for a long time. It finally is here. It's on sale. It's 150 bucks. And I was like, cool. Glad we talked about that. Versus it being a big surprise.

I was like, whoa, where did this come from? And then we're not having a fight about it. So if you've got a spouse that's constantly you're up against and it's a battle, again, it's not the budget's fault. There's something going on deeper there. And it could be financial trauma. It could be control issues. Yes. Control issues will get you quick. If you grew up in a controlling household and then your spouse just asks us, you know, makes that simple request of, hey, let me know you when you spend and you start getting triggered and you start getting.

It's like a conversation grenade you just threw in there so but you got to get to the root of what's really going on and the joint account again not the problem it's you it's not an ish me it's an issue yes that's right so figure it out can i also call out george because some people will be like yeah me and my husband we combined our finances and really what they're talking about is they have an account that is a joint account that's a joint account that they put a little of their money into and he puts a little of his money into and that's what they're calling combined finances roommates with privileges okay i don't subscribe to that i saw the steve harvey videos like everyone should have four bank accounts got his account her account the joint account the savings account i, like everyone should have four bank accounts. Got his account, her account, the joint account, the savings account. I'm like, let's just simplify our life, y'all.

Life's already too complicated. Let's have our joint account and the savings account. That's also joint. And let's have full awareness and accountability of what's going on. And I'm telling you, that's what caused my wife and I to win with money so quickly. It expedites it. You see exponential progress when you both are aligned and have visibility that's right and yeah and there's trust there you're not going to go far very fast if there's not trust and part of that is like hey like you said total visibility he sees what's going on i see what's going on it's all good good discussion all right let's take a quick call officially reached like feudal feudal medieval lord status having a tapestry. That's pretty big. A tapestry.

I still don't know what a tapestry is. It's part of your Middle Eastern. That's right. Like tapestries, oriental. What is it? Not, what are the rugs? Oh, yeah. The Turkish rugs.

Turkish rugs. Oriental rugs. It's all in there. It's all in there. My parents do love. We had furniture at the camel household that was made of glass. I'm telling, it was the most, it looked very looked very royal looked like we had some like thrones going it was game of thrones in my house growing up but you sit down and you're just like you are the sphinx cat just but it looks

fancy glass furniture the arms are glass oh the cushion is rock hard see what i know about totally flat interesting i know about putting plastic on the furniture. Do you know what I'm talking about? We did that growing up. Yeah. Gosh, that's when you're really deep in. You're trying to preserve everything. You never want to buy anything ever again.

If you put plastic on your furniture, that's you saying, I'm never spending money ever again. I mean, is it art? Are we just supposed to appreciate it underneath the plastic? It's supposed to preserve it. Like if you buy a nice couch, you put the plastic on it, then nothing gets on it.

This was my aunt and uncle did this. It was only when like you had people over. You take off the plastic and you sit and have the Turkish coffee and the desserts. And it's, you know, but other than that, it's like a museum. Like package that thing back up. That's right. So there's, you got to have, guys, you can't take it to the extreme. Don't take it too far. There's three things that you can do with your money. have guys you can't take it to the extreme don't take it too

far there's three things that you can do with your money give save it spend it and if you're gonna spend it make sure you talk with your spouse make sure you put these parameters on it make sure you're having open conversations don't be out here trying to control somebody but have a conversation this is planet fitness this is a judgment free zone okay let's just be adults. Let's talk about it. Let's make a plan. And then we said, hey, we stuck to the plan. Then we're not the villains. Listen, the plan's the bad guy. Okay. Give it a name if you want. Call him Kevin. I don't care. Hey, it's Kevin's fault. Classic Kevin behavior. The point is, if you don't like what's in your budget, you get to change it. The budget should reflect your needs and your wants. This is The Ramsey Show.

You're listening to The Ramsey Show. I'm your host, Jade Warshaw. Today, joined by George Campbell. Give us a call. The number is 888-825-5225. We'll chop it up. We'll talk about your life, your money, whatever's going on in your financial situation. We are here to offer a little bit of help, a little bit of guidance. We're your financial situation, we are here to offer a little bit of help, a little bit of guidance. We're not going to tell you exactly what to do. You can do what you want to do, but we will give you some great advice and what we would do. Honestly, that's all we're going to tell you. Yeah. If we were in your shoes, here's what we would do. We answer as honestly as we can while steering you toward a better financial future. That's right. But at the end of the day, George, i want to listen to you because you went from debt to baby step millionaire yeah in a very very short period of time i'll be honest it was

aggressive and people go like you went from broke to millionaire in 10 years you must have had this crazy income i'm like no i just had a wife who was on board so dual income for sure helps and we were so all in on the ramsey plan that we were like we call themselves the test two babies yes because we just did this thing and so it might take you 15 20 years I'm just here to tell you I'm an average guy I didn't grow up with money and here I am and I got some and I'm still living very frugally like my life didn't change you think when you hit millionaire status like you're gonna be balling I'm like my life really hasn't it's still the same George in there you go with you yeah that's right I mean my habits have stuck with me. I'm still couponing.

Me and Sharon Ramsey out here are still couponing. Right. It's not like you're tapping into your 401k every day and your home equity, right? So life is... I still got goals. There we go. Let's take a call from Anna in Denver, Colorado. What's going on, Anna? Hey, I bought a car about a year ago. I'm also a nurse, but I bought the car for about $32,000. It's a Ford 2020 Edge. But anyways, I also have about $20,000 worth of school loans. And then I do have like $22,000 in savings. So I was just kind of wondering, I mean, I am also a single mom,

so I do, you know, would love a nice reliable car. Sure. I did look at potentially selling my vehicle, and I don't know if it's just when I bought it or what, but now it's like Kelly Blue Book says it's only, like, $18,000 to $20,000. Ooh. What do you owe on it? I'm sorry?

What do you owe on the car? $28,000. Ooh. Okay, $28,000. So you're about $10,000 underwater in this thing, if Kelly Blue Book is right. Was that private party? Yeah. So I've gotten offers for, like, $20,000, which is about what it's paying.

But yeah, it's like to buy a new car or a little new car, you know, it would be probably around three to five grand. What's your income? And that's like, I make about $80,000 a year. Okay. How much are you bringing home every month? Around four to five grand. And what's the payment on this car? It's $523 or something. Okay. So we have 18 in car loan and 20K. Is that one student loan or are they broken out into multiple? They're broken up into multiple. Great. So what's your one student loan or they broken out into multiple um they're broken up into multiple great so what's your smallest student loan balance uh four thousand okay so we can knock that one out pretty quick in fact we can do it today because we have a lot of money in savings don't we

well we could knock out the student loans completely today that would free up a whole lot of payments wouldn't it yes and how great would that feel going into october knowing that you don't have to make you're watching the headlines everyone's freaking out and you're like oh yeah that thing's just a memory that thing is gone how does that feel sally may don't live here no more that would feel good but yeah i mean at the same time though i was like is it worth selling that car like that would be a big, you know, to get rid of that $28,000 loan from the car. The car is not really the problem in your life. I mean, based on your income, the car is reasonable.

Yeah. You know, should you have done it? No. But now that we're here, we're $10,000 underwater. You make $80,000. The car is not worth more than half your income. It's your only vehicle, right? Yes.

Okay. So I'm just going to go, We're paying off our student loans today. Now we're attacking the car. And making $80,000, how quickly could you pay off $18,000 without those student loan payments in your life? Yeah, pretty quick. Is it $18,000 or $28,000? Oh, it's $28,000.

$28,000. So $28,000 of the car loan. So we have that left making $80,000. And so I would say within a year. I would think so. Can you live on 60? Probably. Then there you go.

There it is. Can you work extra overtime? I mean, I don't love to, but I'm a nurse. So it's out there. Yes. Yeah. I mean, it's out there. If you're a nurse, I feel like one of the best things you can do is work that overtime and be that one back i'll take that shift i'll take that

shift and you do that for six months and you're gonna be like oh i never have to do that again picture this picture this christmas time rolls around you don't have a debt in the world you've paid off your car you've paid off your student loans you've started stacking up just because you've worked extra so we're you've moved quickly and You've started stacking up just because you've worked extra. So you've moved quickly and you've started stacking up some savings. Maybe you've got five or six thousand stacked up. You're going into Christmas. You're buying presents.

And the whole thing is so peaceful. You didn't have to get caught up in the student loan drama or, you know, in the fall back in October and September. And you're going into a new year completely debt-free you're having savings set aside and you have completely changed your financial outlook how would that feel amazing you don't have to work overtime anymore come on now right absolutely so the key here is one thing at a time anna i know it feels overwhelming right now you got a whole bunch of debts i mean single mom you're working your tail off and this is a season and you're going to look back and you're still going to say i would do that all over again to

have the financial freedom and peace that i have right now and the way i set up my kid because of what i did during that time was so worth it and And so I know it feels like, oh gosh, I knew they were going to make me go to work. But that's the plan. There's no shortcuts here. That's right. Anna, are you set up with EveryDollar? That's our budgeting tool?

I don't. Okay. Today, I want you to log on EveryDollar.com. And by the way, we have a promo going on. You can log on to EveryD slash george and get yourself 15 dollars off and use that okay you get a year for 15 off or if you're like jade i'm not trying to spend any money you can just go to every dollar and do a free trial and just do the the free version not the premium version you log your own transactions and all that but it's good especially

as you're getting started for you to actually have to pay attention to all that instead of automating it especially when i was starting budgeting it was helpful for me to actually have to pay attention to all that instead of automating it, especially when I was starting budgeting. It was helpful for me to have to look in that financial mirror and that bank account and go like, oh, bro, what'd you spend on eating out this week? We got to do better next week. I agree. I agree. So get set up with every dollar. When I tell you it's going to change everything, it's going to change everything.

And when I tell you it's going to provide so much motivation because of the tools that are inside of there, there's so much learning inside of there. There are so many things that will help you project. If I do this, where will I be financially? And when I tell you it's going to just light a fire inside of you, you are going to do this so quickly, it's going to make your head spin. Okay. All right. All right, Anna, thanks for the call. Oh, that's what I'm talking about, George. So her question, which debt should I pay off first? The smallest one. The smallest one.

Why is that? Well, shouldn't you be looking at the interest rate? I mean, that's really the thing. Listen, this isn't about math. We wouldn't be in debt if we could do math, basic math, addition and subtraction. And so this is something I had to do. I pulled my credit report to figure out what debt do I even owe? Because I didn't know at the time when I graduated college.

And when I saw those numbers, it was overwhelming. But then I made a list, smallest to largest, and all I had to do was focus on that little one. That's right. You don't have to look at the rest of them. Yeah. And it's like, all right, two grand, I could do that. I could knock out two grand. Instead of looking at the huge number, which y'all had over 460 grand. If you just looked at a huge number and went, all right, we got to pay off 460 grand. Oh, never that. Instead, it's we got to pay off two grand., we got to pay off $460,000. Never that. Instead, it's we got to pay off $2,000.

Now we got to pay off $3,000. All right, next one's $5,000. We already did $2,000 and $3,000. Yeah. We know it's possible now. Yeah. I'll be honest. We listed the debt smallest to largest.

We did not add them up. You know what I'm saying? Oh, yeah. We didn't add them all up to see what is equal. That didn't come till later. We just focused on that. Yeah, heart palpitations doing that. Oh, I would have been like, oh. I mean, I saw your list of debts. It looked like the Star Wars credits. It just kept rolling. I was like, goodness gracious. Capital One was on there like

12 times. I didn't know you could legally have that many student loans and credit cards open at once. I'm like, what are lenders thinking, giving people more money? Okay. It shouldn't be legal, but they do it. I can't believe these fools were loaning us money because we were only making 30,000. It's not like we had this giant income at the time. They're always so happy when they give you the debt. They're never happy when they go to collect it and you're not paying. It's funny how that works. I know. That's right. So free yourself. Free your mind. That's what it comes down to. From the hand of the hunter, as the Bible says. That's right. Deliver yourself. Deliver yourself like a gazelle from the hand of the hunter. That's what it comes down to. From the hand of the hunter, as the Bible says. That's right. Deliver yourself. Deliver yourself like a gazelle from the hand of the hunter. That's what

you got to do. You got to move with intensity and you can do it. That does it for this hour of the show. George, it was nice hosting next to you. Good times. We'll see you real soon because we got another hour coming up. This is The Ramsey Show. show. Hey, what's up guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.