The Ramsey Show - App - Should I Keep Clients Questioning My New Prices? (Hour 2)

Episode Date: August 9, 2021

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Music Music Music Music Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king,

and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. Christy Wright, Ramsey personality, number one best-selling author and author of the newly released on sale as a pre-sale anyway,

new book called Take Back Your Time, The Guilt-Free Guide to Life Balance. So we'll be talking about your life and your money this hour. It's a free call, 888-825-5225. And some say the advice is worth exactly what you pay for it. All right, Nick is with us. Nick is in Colorado Springs. Hey, Nick, how are you? Good. How are you doing? Better Hey, Nick, how are you? I'm good.

How are you doing? Better than I deserve. What's up? Hey, I had a question about whether I should finish my debt snowball paying off my student loans or if I should refinance at this time since the rates are so low. I owe about $10,000 on my student loans, and my rate right now is 3.8, and I could buy it down to a 15-year mortgage for 1.75. Your rate currently on your mortgage is how much?

3.125. Okay, and you said you were quoted what? 1.75 on a 15 year fixed rate fixed rate bunch of points how many points uh right now they've gone down a lot it's 0.875 so a little under 1%. Sounds low. Okay. I'm a little suspicious. I don't think mortgage rates are below 2% yet. Yeah. Unless I missed something over the weekend, which is possible, but I don't think I did.

Okay. They always have the best rate. I have my mortgage with them right now. Okay. Oh, it's a local credit union. What's the balance on your loan? $295. Hmm.

Okay. Well, that's a below market rate. I'll just say it that way. Okay? So that's not bad. So let's just call it 2% down from 3%. You would refinance just for that, but we don't roll your debt into your mortgage. Yeah, I didn't want to roll it in.

So what's the $11,000 student loan got to do with the equation then? Oh, I'm just still in the debt snowball. I wanted to see if I should finish paying the debt or if I should refinance my loan. Oh, I see. Is there any cost out of pocket to refinance? No. Then why would it affect your debt snowball? Because the payment's going to a 15-year.

Yeah, it's going to go about $500, $600. Ah, okay. Now I'm catching on. Okay. I'm a little slow on the uptick. Sorry about that. All right. Okay, so the big concern is not money out of pocket.

It's not rolling the student loan into the refinance. It's simply you're going to have a higher payment, and that's going to slow down how fast you can get your student loan paid off, right? What do you make? About $95,000. Okay. It's a good question. It took me a minute to get to the bottom of it because, like I said, I wasn't gathering. I was telegraphing where you were going, and it was none of those places. Okay. It's a good question. It took me a minute to get to the bottom of it because, like I said, I wasn't gathering.

I was telegraphing where you were going, and it was none of those places. Okay. So, yeah, yes, you do this. It's not going to slow it down that much. 500 bucks a month increase in payment changes your cash flow. $6,000 a year making $90,000. That doesn't keep you from getting out of debt. Okay.

It does slow it down a little bit, but it might slow it down by two months or something is all. Yeah, on that income. Yeah. It's so different than the call we just had before the break, too, because you have such a great income, Nick. You're going to get out of debt quickly, whether or not you refinance or not. So you can refinance and get out of debt still in a very short amount of time because

you have such a great income. That's the reason we talk to people about getting their income up, whether it's through or not. So you can refinance and get out of debt still in a very short amount of time because you have such a great income. That's the reason we talk to people about getting their income up, whether it's through business, taking a second job, third job. The bigger shovel you have, the more progress you can make on your goals, whatever those goals are. But if you don't have an income, you're tight. There's not a lot you can do. That's it. You're doing great, Nick. That's awesome. Luke is with us. Luke is in charlotte north carolina hi luke how are you hello dave hello christy hi so as with most as with most questions you guys probably answered this before however i haven't quite heard it i'll be asked in the time i've been listening so i've been answering the same questions for 30 years it ain't no thing

go ahead and ask it we're ready all right. So my question is just kind of determining whether or not I'm on step six or seven. So I have all milestones essentially met. The conundrum I'm in is that I still rent. So I technically don't have a mortgage, even though step six is paying, essentially paying off the mortgage. Could I consider myself as kind of paying myself a mortgage payment a month on top of what I've already saved for my down payment, which is above your recommended amount, or would that kind of put me in a step seven instead? It doesn't matter. You're doing great.

I'm so proud of you. How old are you? 28. All right, man. You're doing good. I'm so proud of you. How old are you? 28. All right, man. You're doing good. Well done. So the bottom line is you don't have any debt. You have an emergency fund in place, and you're putting 15% of your income into retirement, right?

Yep. Wow. Look at you. Freaking rock star. And then every other dollar you save right now is called down payment money, because the bigger the down payment, the smaller the debt, the faster the house does get paid off when you buy it, right? Absolutely.

So just make it real clean. Anything that's not an emergency fund that's in savings is increased down payment. We don't have to have two categories of it. Just pile up a big old pile of money and go in and buy a house and almost pay for it or pay for it. I'd love it. How much you got saved already for the house? About 53.

Five three? Yes. Way to go. You're doing awesome. What is your income? 91,000. Good for you. Yeah, you're rocking this, man.

So if you bought a $200,000 house today, you put down 25%. That'd be cool, you know? And if you wait three or four years, you'd probably just pay cash for it. Yeah, that's kind of where I was going with this question is considering how much I have. I feel it quite difficult taking out that debt considering how much I'm able to save per month. Luke, you're awesome. I'm in no hurry to buy. You're awesome. Here's the reason you don't fit in one of the baby steps just perfectly is because you're not normal. Normal people have a house payment and car payment and student loans and all the debt and we walk them through, which

is great because this plan works for the normal person who has normal debts. You're not normal. You haven't bought a house yet. You're possibly saving up to either put a huge down payment or pay cash you're just going to fast track yourself to baby step seven you're doing amazing ding ding yeah i love it well done sir yes open phones at 888-825-5225 if you don't have it on your calendar yet september the 16th christy Wright will be doing a live event on Life Balance, and she's allowing me to participate since I own the freaking company. So nice of me.

I'm so generous. Yes, it was so sweet of you. You're sweet that way. You're good to me. Give the old man some work to do. So anyway, she's the star of the show, and I'll be there for the window dressing or whatever. So check it out.

It's all about life balance. It's on September the 16th. You can check out getting your tickets, getting your reservation for the live stream at RamseySolutions.com. In an uncertain world, being a good steward of your money is more important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org.

Christy Wright Ramsey Personality is my co-host today. Thank you for joining us, America. We're glad you're here. If you like your job, but you feel like you don't have a plan for what's next, or you need help climbing the career ladder, we've got some great news for you. Ken Coleman, America's career coach, Ramsey Personality, has poured his years of proven experience into a new book, From Paycheck to Purpose, The Clear Path to Doing Work You Love. It's available for pre-sale right now, and you need this book.

There isn't another how-to guide out there that will show you exactly step-by-step what you do to get into your dream job and to promote a long way and grow your career. If you pre-order today, you'll receive the Get Promoted bonus pack for free. It includes an audio lesson on promotions, the disc assessment, free live stream access to Kins, from paycheck to paycheck, from paycheck to purpose, live event, and a 30-day free trial to Ramsey Plus, and more. It's over $100, almost $200 worth of stuff, free when you buy this $20 book on presale at RamseySolutions.com. Also, we're giving away $500 cash every week this month and a grand prize of $3,000 at the end of August. And while you're there, Christy's new book is also on presale. Take Back Your Time, The Guilt-Free Guide to Life Balance.

We have two books right now coming out this fall, both of them in presale right now. Christy's will actually launch on September the 14th and Ken's in early November. Enter daily for extra chances to win the ramsey cash giveaway no purchase necessary you got to be 18 years old or older text cash for the free cash to 33 789 and you can enter for the giveaway that's cash to 33 789 our question of the day comes from blinds.com they have a 100 satisfaction guarantee meaning if you screw up if you mismeasure you pick the wrong color they'll remake your blinds for free you get free samples free shipping and with the new promos they run every month you'll save even more use the promo

code ramsey to get the best deal today's question comes from mand Mandy in Washington. I have a cleaning business that provides services to vacation rentals in a nearby tourist town. I have many long-time clients and excellent reputation for detailed work. Because finding workers is difficult these days, I've had to increase what I pay them by $5 to $10 an hour. The cost of supplies has

also gone up. I recently let my clients know that their cleaning fee would increase in a few weeks. Several rental owners understand and agree with it, but a few are just rude. One of them wants to know what I charge all my other clients. What's a good response to this type of request? Bye-bye.

I haven't even finished the question. You can't help yourself. I have new clients coming on board at the higher rate, so there's no lack of business. Right. Right. You just answered your own question, Mandy.

I have new clients coming on board at the higher rate so there's no lack of business. They're gone. Bye. Just like Dave said. Bye. They're gone. Here's the thing. There's such a fear in business that if you raise your prices, you're going to lose people.

And the reality is you will. And you'll lose the ones you need to lose you'll lose the ones that are rude that you're spending all of your time and energy on that are headaches more often than not if someone is demanding to know what you charge and what you do that is none of their business at literally it's not their business i mean literally it's your business not there that's a good point that's a point. That's where the saying comes from. Yes. And so you don't have to feel bad.

If someone is rude, they no longer are a client. And you wish them the best. Thanks for your business. Best luck out there. To me, this is a very simple. I know it doesn't feel like it when you're dealing with actual people and you care. But if someone's going to have the nerve to be rude to you, you have to have the nerve to kindly show them the door. Yeah, you're right.

So here's what happens. You don't get hard-hearted or calloused, hopefully, the longer you're in business. But what experience does give you is the knowledge that cutting those folks loose is you didn't realize how much time they were already taking of yours. That's exactly right. Because people that are going to be a rude client are usually your highest maintenance clients. They take up more of your time.

You make less money on them. And so there's always a percentage of your business of your revenue in business that you should always consider firing so that you can spend time on the it's it's what we call bad business it's business that you're doing it's not it's not good it's not worth the trouble right and but you know someone that says, oh, you mean you're having to pay more for labor and you mean your supplies cost went up? And, oh, the way I'm going to respond to that is I'm going to be rude to you instead of saying, you know what? Gosh, I've always enjoyed working with you, but I guess I'm going to have to clean it myself because I can't afford it to do that. And so it's been good, though.

That's the way you leave if you can't afford it but people that can't afford it sometimes are the meanest yeah or they can't afford it they just don't want to and so they're mean and that's where it comes down to you having the yeah you having the confidence to let them go and know that you're going to be okay you've already said you will be mandy you have no lack of business and so you have permission to set these people free. You know how my mom would do it, Dave? She would fire customers in the kindest way. So she was obviously in the wedding cake business.

So she'd get some bridezillas, momzillas, all the whole gamut. Oh, good Lord. I can't imagine. Yeah. And so what she would realize is truly she would spend 90% of her time and energy on her 10% most difficult customers. The rest of them are easy, right? And so when she found it was time to fire a customer, which she got good after 30 years of doing this, identifying those red flags early on, she'd say something like this, like, you know what, this is your wedding day.

And I want you to be happy. You should be happy. And I can just tell by us talking about this, I'm not going to be able to make you happy. And I want you to be happy. And I can just tell by us talking about this, I'm not going to be able to make you happy. And I want you to be happy. So here are some different places you can go check out for wedding cakes that will make you happy. I wish you the best. Isn't that the nicest thing you've ever heard? But what she did was she fired him. And the beautiful thing about this is the net effect was she sent all the ugly customers to her competitors.

I knew you were going to point that out. You got a stack of business cards of your competitors. Stop putting them out. I think that's genius. You're so nice about it. You're high maintenance. Go see my competitor. Well, you put it back on them.

You go, you should be happy. Absolutely. Clearly. I want you to be happy. I can't meet all your expectations. You put it right back on them. Jesus couldn't make you happy, darling. So you need to go.

Yeah. You know what's interesting, though? Every now and then, one of them would straighten up. Oh, no no no i know this is fine and they would start to behave as a good behaving customer but she taught them hey if you're going to do business with me you're going to respect the way that i do business and i'm going to respect you and so on but every now and then one of them would straighten up and they could stay but if not they had to be fired most of the time it's not most of the time they don't yeah so what what we're saying is when i when i interrupt in the middle of you reading that and i say bye-bye that's from 30 years of the first time i did it i almost cried i was so you did yes i did because i was so scared that i was gonna mess up the whole world and somebody

wasn't gonna like little dave ramsey You know, and then once I figured out, crap, about half the world doesn't like Dave Ramsey. We just need to accept that. So that's okay now, you know. It's like the other half's doing pretty good for me. It's all right. You know, I'll be all right, you know. So, you know, Twitter trolls and everything else.

So you just, you reach a point, you go, it didn't kill me and it didn't kill them. Yeah. And that also gives you the power to be nice. It does. Like your mom was, because she go it didn't kill me and it didn't kill them yeah and that also gives you the power to be nice it does your mom was because she knew it wasn't they could get a cake made somewhere else absolutely and what's interesting is you don't realize how much of the emotional energy and time that were wrapped up in those people and you're so much freer yeah you're so much freer when you let those people go and you know there's once you've done it for a decade and you go i've turned loose a five to ten percent of my business every year i

let them go in the name of they're not worth the trouble yeah and i did it in a kind but powerful and strength way based way once you've done it a bunch then you read something like this you can get halfway through it and go bye-bye yeah yeah and it And it's not hard-hearted. It's not calloused. No. It's like they're going to live through it. It's just freaking getting your house cleaned. They're going to live through it. They self-selected by how they behaved.

Yeah. By how they treated you. They chose that, not you. Exactly. And then there's the other bunch that are just crazy. Yeah. They got to go, too. Yeah.

There's about 2% of the public should be institutionalized, And you really just don't want them as a customer for sure. So you just fire them quick. And that's a little more joyful. But, you know, there's no reason for you to. Our customer care people, don't call and yell and cuss at them. Because I tell them we'll just take you out of the database. They don't get paid enough to put up with your crap. Call in here with a problem

be nice and we'll help you with it this is the Ramsey Personality, number one best-selling author, is my co-host today. Our new book, Take Back Your Time, The Guilt-Free Guide to Life Balance, is on presale right now. Jay and Heather are with us. They are in Minneapolis, and it says on my screen, you guys are debt-free. Congratulations. Thank you, Dave.

Congrats. How much have you guys paid off? $128,000. Good for you. How long did this take? It took us 15 years. Okay, cool. And your range of income during that time

45 to 80 000 okay cool what do y'all do for a living these days i'm an it director for a library system and i'm a stay-at-home mom of nine kids and i homeschool them nine kids you guys have got a lot of mouths to feed and still got your way out of debt, huh? Yep. We started off with one kid when we started the baby steps, and we added eight along the way. And they were all paid for with cash. No repossessions to date, huh? Okay, that's good.

That's incredible. Heather, I can never complain about being too busy with my three children again. That's amazing. So 128,000. never complained about being too busy with my three children again that's amazing so uh 128 so 128 000 is that house and everything house and everything 20 000 student loan and that was paid off in the first 13 months and then the mortgage after that wow way to go you have a paid for house look at you man did you ever think you'd have a paid-for house. Look at you, man. Did you ever think you'd have a paid-for house? Not before the plan, but once we got on track and knew the plan, we knew we'd get there. Oh, definitely, yeah.

But, I mean, back in the day, like, because people don't think, walk around going, you know, I'm going to have no mortgage when I'm older. You know, people don't say that much. Good for you, man. How old are you guys? I'm 45, and Heather's 42 okay cool awesome so tell us the story what got you started on all this 15 years ago well um we had our first kid and we were wanting heather to be able to keep staying at home and to be able to homeschool and money was tight um i heard you on focus on the family way back then,

and then I got excited about your message. I got the book Financial Peace first, and then I introduced you to Heather, and it turned out she'd already heard your message somewhere months before that and couldn't get it through to me. Of course. You came around when it was your idea right jay exactly man that was long enough ago probably dr james dobson was still on there

wasn't he it might have been yeah it was a long time yeah that's that's cool very neat very fun and so you start you she now that she uh realized that it was your idea, we can start this, and here we go, right? Yes, exactly. I love it. Very cool. And you paid off the student loan quickly. So what do you tell people the key to getting out of that house and everything with nine kids is? Well, you have to want it, and then you have to start.

It's not something you can just want and just want and get it. It's hard work. It's not easy to keep going when it gets rough, when you have, you know, oh, we need to get a 15 passenger van now. That's kind of discouraging, but you just keep going. With the mortgage, it was challenging because we didn't have that debt snowball to build all the momentum with, so it was just a slug once we got to the mortgage. Also, envelopes are very important. Plastic just takes way too much discipline, even if it's just a debit card. Okay.

Lots of envelopes at your place then. Oh, lots of envelopes. Okay. Cool. This is so interesting. So sometimes I read ridiculous posts on social media that say things like, well, that Dave Ramsey stuff doesn't work if you have a large family. And then I have large family people chime in and say, it's the only thing that works.

Absolutely. It really is. You know, it's bad enough, you know, all the things you have to think about with a big family, but to have those debt considerations in the back of your mind just nagging at you it's it's very freeing that we just have one less thing to think about now yeah no house payment a major thing that you don't have to think about no house payment that's that's like yeah and and so all we do is worry all we do is make enough to feed all these baby birds and clothe them and make sure we have a 19-passenger van and all that stuff, man.

That's pretty incredible, dude. That's just beautiful. I love it. I'm so proud of you guys. How does it feel? Thank you. I think it feels fun. We actually get to make choices with our budget now.

Instead of just buckling down and moving along like the tortoise, now we get to, you know, hop around and have fun. And we can give some and we can all go out to eat as a whole family, which is something we very rarely ever have done. Yeah. How is it with the kids, with those nine kids in a variety of ages, range of ages, I'm sure, in there, through this journey? Was that something you all talked about as a family,

kind of getting everybody bought into this vision as a family of what you are doing? Well, you know, we started early enough that we didn't have to get anybody to buy in. We just told them how it was going to be. Yeah, well, that's for sure. It's really turning out good now as we have a 16-year-old, and Heather has been working really hard to get him through college without any debt and without a huge amount of money in a college fund

because we just have baby college funds for everybody. So she's been doing a lot of testing for credit, and he's starting post-secondary enrollment here in the fall, and he's probably going to get out with only a few dollars out of pocket to get his degree. Wow. He just bought his very first car this week, debt-free. Wow. All right.

What did he buy? Oh, it's just an old 2003 Taurus. It's, you know, your hoopty. Yeah right what did he buy oh it's just an old 2003 tourist it's uh you know you're hooptie yeah what do you pay for it one thousand dollars i love this kid go we do too he's going to school he's going to go to school debt-free and he bought his first car for a thousand bucks cash and he's 16 he's already planning to go to college debt free absolutely he's basically halfway done already hey america you know what that's called parenting wow an awesome mom yeah the inmates don't run the asylum when you have nine they do what they're told that's amazing guys you guys incredible. I'm so impressed with you. Yes.

Man, what a great model. Very, very cool. Very cool. Well, we've got a copy of the Legacy Journey for you because for sure that's the next chapter in your story, without a doubt. And a copy of the Total Money Makeover for you to give away to somebody and get them started. You've got a lot of arrows in your quiver that you'll be able to release, and it sounds like they know how to fly straight already, which is good parenting. And so, you know, just fabulously done, you guys.

Very, very well done. $128,000. All right. I tell you what. We don't need to break tradition here. We need you guys to name off all nine names and ages before you do your debt-free scream. Quickly. All right. We've got Caleb, 16, James, 13, Joshua, 12, Anna, 10, Micah, 8, Gideon, 6, Lydia, 4, Timothy, 2, and Ruth, 8 months.

All right. Wow. There we go. Awesome. 128,000 paid off. House house and everything we're talking to weird people 15 years it took them to do it making 45 to 80 count it down let's hear a debt-free scream three two one We're debt free! All those little voices.

Love it! All those little voices in the background. That is a family tree changed, and it's a big tree. It's a big tree. Well done, you guys. Big tree. That's awesome. Okay, so moral of the story, you don't have to make a gazillion dollars to be debt free. Moral of the story, large families not only can do the principles we teach,

living on a plan, getting out of debt, having an emergency fund in place, living on less than you make, these simple but hard-to-do concepts that we teach every day actually are the only shot a large family has. You've got no wiggle room. You've got no margin for error when you have nine mouths to feed right yeah no that's true and it's interesting too because whether you have a big family small family or whatever your circumstances you can find an excuse if you

look for one oh we got a big family oh you don't understand my situation yeah you can look for an excuse and you'll find one or you can just look for a way to make it work and it does work and we see people call in from all ages all stages all different careers industry industries and family sizes and they're making it work because it's a principle that can be applied regardless of your family and i just i love that example because that's such an extreme example yeah well these principles are the truth yeah like the law of gravity is the truth it works it works for large families too this This is The Ramsey Show. We'll be right back. Christy Wright Ramsey Personality is my co-host today. Mia is in Sacramento.

Hi, Mia. How are you? Mia, how are you? Mia might be on mute. Maybe I didn't push the button right. I'll put her back on hold. All right, let's try Sean in Minneapolis. Hi, Sean. How are you? Hey, I'm good. How are you guys doing? Good. the button right i'll put it back on hold and all right let's try sean in minneapolis hi sean how

are you hey i'm good how are you guys doing good relief to hear your voice what's up yeah i'm good um so i have recently picked up your total money makeover from a used bookstore i'm really glad that i did i saw a crazylooking guy cutting up a credit card, and I thought, what is this about? And I just, I totally dove in, and I am dead set on paying off all of my debts, and I can't look forward anymore to the day where I can come on stage

and do my debt-free screen with my girlfriend and I. Good for you. Very cool. My question is about the budget, and more specifically, the things that you budget for that could change on a month-to-month basis. So doing your bills and your mortgage is relatively easy

because they don't really change much at all, if at all. But I'm kind of struggling with the idea of like, how much money should we be setting aside for groceries or clothing? Things like that, I guess. Like, do you guys go off of like a percentage or is this like a flat amount per person in the family? What do you

recommend have you is this your first time doing a budget i've always had like a half but budget where like i said i'm doing the easier things um but it wasn't until i started using the every dollar free app that i really started so yeah i'll tell you how i did it that i wasn't until I started using the EveryDollar free app that I really started to understand that I wasn't really doing it 100%. Yeah. I'll tell you how I did it when I got started budgeting. And I think this is how we teach it, Dave. Correct me if I'm wrong. But what I did for my very first budget is I looked at my bank statement for the past three months to see what was the average that I had been spending on groceries or that type of thing. And it's not because I always needed to spend that, but it gave me some

type of range. So I'm not setting some ridiculously unrealistic number. And then I come up the range, okay, I typically spend about this much. And then you can kind of stretch yourself to a goal from there for some of those things that can fluctuate. But you do a budget every month so for example um it's it's august right now and um i just went back to school shopping for my kids they need some new clothes they've outgrown some of the clothes and so on so i know august is going to be a higher clothing month before the month yeah you can predict that right right before the month i know august is going to be a back to school shopping month whereas um, whereas in July I'm not going shopping for clothes, for example. So you'll sit down before the month begins every single month, and it's the best guess you can based on past track record and in line with your goals of what you want to spend and where you're going. Am I saying that right?

You did perfectly. Okay, great. Perfectly. And stuff like even utilities will change from month to month. Like we're in Tennessee, and so it's really hot in the summers, and so our air conditioning bill, our electricity bill is higher. In the winter, I heat my home with natural gas, and so my electric bill is fairly low, but my natural gas bill goes up in the winter. And so I can predict that December's gas bill is going to be different than June's.

Okay, as an example. Right. And I can look at last year's. I can look at last year's and guess pretty close to what it's going to be. And on that kind of thing, you want to guess a little high. So you say, okay, last year's gas bill was, I don't know, make it up $235 or whatever. Okay, well, just go ahead and round that to $250 and put that in there. And that way you got yourself a little wiggle room if something comes up.

And that's how you do it. And then the last piece is that a lot of people, including my wife, uses the envelope system. And we don't use it for everything, but for a few things. You mentioned groceries. By the way, a hint on groceries is whatever you think you spend on groceries before you actually start living on a budget, you're wrong. It's more. Yes.

Okay. Alarmingly more. So if you think you spend $500, it's probably more like $800. If you think you spend $800, it might be $1,200. I'm not talking about restaurants. I'm talking about groceries only. Separate groceries and restaurants apart because restaurants are entertainment and groceries are food. Yes, you get food at a restaurant, but most of what you pay for is the experience of having someone else cook it for you and clean it and all that stuff.

So, you know, go that route with this and you'll be much, much better off. Now, so the envelopes, all we do with that is we say, OK, for the month, I think we're going to spend $800 and put $800 cash in an envelope and write food on the outside of that envelope. Don't buy anything out of that envelope except food, and don't buy any food except out of that envelope. No cheating. And so you are using cash. That does two things. One is when that envelope gets empty, you know you've run out of money, and there's a little catch mechanism there. It's empty. Versus if you've got plastic or even writing checks in the old days, you know, you could just keep going.

There was nothing to stop you and go, uh-oh, we've overspent the budget. And you could do that for the back-to-school clothes. You could have a back-to-school clothes envelope for August and say, that's it. Because, you know, you got little boys going back. And that little boy stuff's cute as little girl stuff, just about. I mean, it's fun dressing them because, you know, you got little boys going back, and that little boy stuff's cute as little girl stuff, just about. I mean, it's fun dressing them up, you know? And you could go crazy in there, easy enough, and blow your amount, and have all kinds of rationalizations and justifications. But if you're looking in that envelope at real $100 bills, real $50 bills, and they are leaving leaving it slows your butt down because you feel

it yeah i got a question about the envelopes and maybe you've talked about this and i've just missed it have you talked at all about the so envelopes have this like built-in discipline right like because it's visual you can see it you know since the pandemic dave everybody has so much online shopping and Amazon. Man, add to cart is so easy. How do you transfer that discipline to Amazon? If you're going to buy online, you're not using the envelope. And I used to, I'll tell you one that's changed over the years. When we first started teaching this 30 years ago, you did not pay for gasoline at the pump.

Yeah. You walked inside to pay for it. Right. I do remember that. Old school. I remember that. Or someone pumped it for you. And so I used to carry and teach to carry a gasoline envelope with cash in it to pay cash for your gas.

And then when it goes up to $5 a gallon, you're like pissed at the president, right? And so that kind of stuff, right? But I haven't paid with... We haven't had a gas envelope at the Ramsey's in years. We pay with a debit card. Right. Like all normal people. Like you're doing online.

Right. At the pump. But so you've still got to budget that and keep track of it. And you've got to have some way, and the Every Dollar Budgeting app will let you know. But you've got to categorize each of those expenditures. Yeah. And when they pop on your debit card, especially if you've got the premium edition where it's what automatically logs and all that right then you go okay drag and drop drag and drop you're dragging that expense over into the food category at amazon

dragging a food expense over there oh and we've got some cash over here then you look up and go crap we just went 500 bucks over this is not gonna work i can't do this well every dollar makes it so fun and makes it so easy to do but you're right because you might have a grocery budget or a clothing budget and you spend the majority of your monthly expenses out of that envelope or out of that category in cash, but then there's a percentage you get Amazon Fresh or that you get a couple clothing items off online and you've got to be able to reconcile that this is all coming from the same budget line item and it will drop down when you start dropping those things over that are transactions like you're talking about, but it's important to pay attention to

because you've got things coming out of different places and if you're not careful that add to cart will get you man not that i know anything about that add to cart yeah i don't even know what that is so you can add stuff they suggest people like you buy things like this and then you add to the cart it's it's like it's not even that dave it's like sometimes you're just having a day you're like i don't know i just need to add some things to my cart just any cart oh the cart wasn't already had anything in it no this is just brand new this is just generally online shopping dave this is not listen i guarantee you all the women listening are going like yeah i mean they make like doormats you're just sitting around

bored and going i need to buy crap i mean it's a real thing that's that's it they make they make doormats that say like amazon man please hide the boxes from my husband online shopping is a real no i know i knew i know but i mean i didn't know but i know my God. Like, you'll see on Instagram a meme that says, it's an add to cart kind of day. Okay. So now you know. Retail therapy, online style. 100%. I'm glad I can help educate you today.

Boredom spending. Yes. It's a thing. Well, I'd just be ashamed if I were you. I would just be ashamed. I don't know any shame. Not only do you know about it, but you've done it. Oh, my God.

I'd just be ashamed if I were you. I feel no shame. Maybe I should. if I were you. I feel no shame. Maybe I should. I just don't. I feel no shame. I'll do what I want. I'm Christy Wright. That's it.

That puts us out of The Ramsey Show and the books. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free screen live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.