The Ramsey Show - App - Should I Pay Off Debt With My Savings? (Hour 1)

Episode Date: January 29, 2024

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you, the people. That's right. We help you win in your life, specifically in your money, in your work, and in your relationships. I'm Ken Coleman. Jade Warshaw joins me this hour. The phone number to jump in, because it is your show, America, is 888-825-5225. That's 888-825-5225. The fabulous Jade Warshaw, ready to go, warmed up. Did you do voice exercises in the green room?

There she is, pitch perfect as always. She'll take your money questions. I'll jump in. And then, hey, you've got some work questions, some mindset stuff. Hey, I'm struggling here. I feel like I've got a lid on me professionally, which is affecting me financially. Any of those work-related questions I'll take on, and Jade weighs in as well. So let's go to the big apples where we start.

Julie is waiting on us. Julie, how can we help today? Hi, guys. How are you? Thanks for taking my call. Yeah, you bet. I'm good. So I'm calling.

I've been listening to your podcast probably over the last year, and then since 2024 I've really been obsessed with it and listening to it every single day. That's awesome. I think I need to call it. So I'm calling because I feel like my husband and I have the baby steps like all out of order. Okay. We have debt. We have credit card debt. We have car payments. We have a mortgage and we have student loans, but I feel like we have savings to pay off our credit card debt,

but I'm just nervous that if we pay it off, we're going to like plummet our savings. And then if there is an emergency, it's been hard since we bought our house to build our savings back up. So I'm just like, I like having that cushion. We have like about 30 over a little over 30,000 in our savings. Okay.

And about 13,000 in credit card debt. Okay. So I'm like, we could just pay that off right now. Yeah. okay and about 13 000 in credit card debt okay so i'm like we could just pay that off right now yeah but i'm nervous to just like see it plummet and then we have other payments too that's right yeah there's um you know that that emotional feeling is normal because you're used to seeing a pile of money in your account you log in you're used to seeing it and there's part of that it's giving you a truly a false sense

of security right because if you do the math which you don't have to do much you can do the math and see well that 30,000 is not actually your 30,000 it belongs to Capital One and the car company and Sally Mae or you know Navient or whoever holds your student loan and you're just keeping it from them that's not actually your money and so when you when you put it that way and you start to realize listen the debt that I owe that's the real that's the real scary thing that's the risk that I've created in my life and until I give them the money that I owe them they're not going to stop coming after me and so the real question then is what's scarier to have these companies relentlessly coming after

you for money or to just give them the money that you owe them and get on with your life right so right yeah back to your point of kind of i feel like we're doing the baby steps out of order that means you know the right order and there's yeah there's a reason for that and i want to take a moment and explain the reason. Yeah, but I think if you understand the reason underneath it, it'll make a lot more sense. And this is for anybody listening. It's not just, we don't do it like this because it has a nice ring to it, right? We do it like this because it truly does work.

So when you do the first thing, you have the $1,000 of security. You know, let's debunk that. That is supposed to make you feel a little bit shaky. So if you were to take that thirty thousand and apply it to debt and only or in this case, take twenty nine thousand, apply it to debt and keep a thousand there. That is going to make you feel uncomfortable and it should. So I want to validate that feeling. The hope is that you go, OK, I can't live like this forever. Let me tackle baby step

two, which is paying off all that debt besides your mortgage. And so that should light kind of a fire underneath you to like, let's keep going. Let's go as quickly as possible. And the funny thing is, okay, so your car, your credit card payments, how much do you pay every month to credit cards? So this month we actually put like a, large chunk we it's like through like six grand towards it okay okay on okay six grand how much do you pay towards your car notes every month um about a thousand for both of our cars okay how much do you pay towards student loans every month a thousand okay so that's eight thousand dollars i don't have any but it's my husband but look look at what i'm doing here in three months in three and a half months you'll have $1,000. Okay. So that's $8,000. I don't have any, but it's my husband's.

But look at what I'm doing here. In three months, in three and a half months, you'll have the $30,000 back once you pay off this debt. That's how quickly you'll re-save this money because all of that money is going out the door in payments. But when you have it back, you'll save lightning speed. Like you'll save so much faster. Then you'll be able to start

investing a full percentage into retirement so there's a way that this works because the thing is if you don't pay off this debt it's going to linger on right and that's the thing like with our the interest rate and everything i feel like yeah we're just wasting money and you're not going to be able to do the things that most people say they want to do i'm sure you want to have um i'm sure you want to have a nice retirement i want to i'm sure you if you have kids you're not going to be able to do the things that most people say they want to do. I'm sure you want to have a nice retirement. I'm sure if you have kids, you're going to want to save for their college. You're not going to have the... That's the thing, too. Go ahead.

When I mentioned the baby steps are out of order, we have a retirement for our daughter. We have a college savings for her. We're tithing to our church. And I'm also like, is it wise to tithe yes when i have debt yes i know it's more like a spiritual heart thing but well no yes it is but it's also a principle of giving when you give you receive when you have an open hand money goes out and money comes in so even if you're not a christian person it is a great principle to just live by so i would continue to tithe um at the minimum 10 like 10 i would continue to doithe at the minimum 10%, I would continue to do that.

I would pause all other investing for the time being. Again, the baby steps, it works for a reason because here's the thing, if let's pretend, let's say that you say, I'm gonna keep investing my money and I'm gonna use this $30,000 though and I'm gonna pay off some of this debt. You're already out of order because you're continuing to invest,

which means you're paying off your debt slower, which means it's gonna take you longer to get out of debt. And if you happen to have a major emergency, do you wanna know what people do? They look at their 401k and they go, oh, well, maybe I can use that money. As opposed to when you only have $1,000 saved, baby, you get what is known as creative

and you start coming up with ideas and you do everything you can because you've removed that false safety net from under you and now it's just you and your money. But when you do it the right way, you're out of debt, you start investing and then your investments are actually your investments. You don't touch them.

They stay there, they grow, they compound interest like they're supposed to. And now you're doing things the right way. So there really is all sorts of structural components in building this house the right way. Julie, how much time will it take to get out of debt if you do this? You use this $29,000 or whatever the situation is as Jade's walking you through this. How much, when are you going to get done? If you've used the savings now to eliminate debt, what's your payoff date?

Well, I could pay it like today, the credit card debt. I know. So then what about the rest of it? Yeah, we still have the other stuff. How much is the other stuff? So how long do you anticipate it would take? You guys are making large chunks, which is good, but we're running out of time. Just give me a ballpark.

Okay. How long before we pay it all off if we liquidate the savings? I would have to sit down and really do the math. Well, we know for sure you got $8,000 a month, so my guess is you could probably strike that up to $10,000 a month. We make about $12,000 a month. Okay. Listen.

Here's the point. Here's why I'm asking. You have got to map that out today, like as soon as this call is done. What's the payoff date once we use most of that $30,000? And when you get the picture, the vision of how quickly your life changes and you get ahead like Jay just laid out. This is a no-brainer. There's nothing to be insecure about. This is The Ramsey Show.

Welcome back to The Ramsey Show. Thrilled that you're with us, America. The phone number to jump in is 888-825-5225. We're going to talk about your money. We'll talk about your work. We'll talk about your relationships. All three of those areas are intricately connected. And when you're not winning in one, we tend to see that you may not be winning in others. And if you're in a four alarm fire in any of those areas, we're here to help as well.

Jade Warshaw joins me. I'm Ken Coleman. We're Ramsey Personalities. We are your hosts today, 888-825-5225. Julian is up next in New York City. Julian, how can we help? Hi, thank you for taking my call. My question right now, I am around 20 years old. I am 20 years old in college and I'm currently making around 20 to $25,000 a month. And my boss wanted to give me a pretty big bonus for basically hitting a pretty big benchmark in sales around 1.5 million. And he wanted to give me a $50,000 bonus to put towards any gift. He didn't just want to give it to me cash. And he wanted to essentially help me buy a new car. And I'm 20, I'm in college. And realistically, financially, it wouldn't make a really big dent for me to put an

extra, you know, 10 to 20 into a car and potentially get like a 60 to $70,000 car. And I was wondering if it wasn't, you know, a stupid financial decision, do you think that would be potentially a good decision for me to make, you know, given that I'm, I'm 20 and it wouldn't hurt me financially. You have no debt or any debt at all? No debt, nothing. I have around $200,000 in savings. And you're making 25, 20 to 25 grand a month. Correct. And he's going to put, he's going to give,000 towards a car. And so if you buy a $50,000 car, you don't pay a nickel. If you buy a $70,000 car, you pay $20,000, and you've already got $200,000 plus in the bank. Am I hearing all this right?

Yes, exactly. I know it sounds a little bit crazy, but correct. What's your concern? I have a concern. Well, let's hear his first. Why'd you call us to ask us about this? Well, I was just wondering, because I think that I'm relatively mature for my age, and I guess going back to school, I'm taking a semester off, and I'm going back to school

in August, in the fall, and I was just wondering, given that I've worked so hard for the last two years, I feel that I deserve it, and I'm excited to drive around in a nice car, not have to drive around in the Subaru. But I don't know, I guess other people kind of seeing that, I don't want to look like the kind of person, like my parents bought me a really nice car. You know what I mean? I understand what you're saying, but if I'm in your shoes, I don't give a crap what anybody thinks about the car I'm driving,

especially if it was a gift. And if it were me, unless i'm missing something the guy's going to give you 50 000 towards if he will not give it to you as a bonus he's going i'm doing it this way then the rules are the rules and you're busting it you're killing it unless i'm missing something uh but if it were me i wouldn't get 70 000 car i'd $50,000 car and not pay a nickel. I'd take the free car. I wouldn't put any extra money into that. But let me also say, if you've been listening to this program, Dave talks about the ratio. Jade can break that down when we talk about ratio to what you make.

So for you to spend $20,000 on top of the $50,000 based on what you make and what you've got in the bank, it's a no-brainer. So if your concern is, I'm worried about what others are going to say because I'm young and I'm driving a nice car around, first of all, I don't give a crap what they think. And secondly, you've got a legitimate story. You're not a trust fund baby. There's nothing for you to be ashamed of. You've worked really hard to get to this point where you're making incredible money, young man. You've been frugal. You have no debt.

Man, I'd say enjoy this bonus. I have a question, though. I have a couple questions. You mentioned going back to school. What does that mean for your income when you go back to school? Well, surprisingly, I've actually been able to balance this pretty well with school. I just want to finish getting the degree I think that it's valuable, and my parents are very thankful they're paying for it. You're doing this while in school, correct? I just want to finish getting the degree I think that it's valuable,

and my parents are very thankful they're paying for it. You're doing this while in school, correct? Correct. Yeah, he's making this money while in school. When you said going back to school in August, it made it seem like you were gone for a while or hadn't finished. I may take a bit of a pay cut, but realistically I'll still be able to make a pretty decent amount.

Yeah, you're crushing it. That's crazy. Listen, you're 20 years old. I want to know, what do you sell? Can you tell us? Yeah, so I work with influencers online who have very big audiences, like anywhere from 200,000 to a million followers online. And I basically help sell and market products to those uh to to basically their their audience whether it's real estate or uh make money online

coaching anything like that fitness coaching and that's awesome and market yeah yeah this is a no brainer that's excellent this is a no brainer get the car hey how much how much of your own money are you going to add with it or are you just just going to take the $50,000 and get a $50,000 car? I'm thinking if I decide to get a car, I'll just get the car I really want. And if that ends up being $70,000, I'll put an extra $20,000. If it ends up being $50,000, I'll just pick the $50,000. Love it. Just be smart.

That's great. And who cares what other haters think? They're drinking on that haterade. You worked hard for this. Yeah, that's fantastic. I love that story. You don't get that call very often. That's why I ask all the questions. I want to make sure I got all the facts, but that was pretty straightforward. Way to go, young man. All right, let's go to Andrea in San Antonio, Texas. Andrea, how can we help?

Hi, thanks for taking my call. Sure, what's up? My husband and I don't know what we should do regarding a house we have been trying to sell since last June. There are three builders in the neighborhood building homes and apartments. There are several streets of brand new homes for sale. The builders have their own financing companies. So on top of having lowered the prices of the new homes for sale, they are also offering lower interest rates to potential buyers. We don't think this scenario will change in 2024. The expenses for this home total about $1,100 per month. My husband has been unemployed for seven months now, and I just got a part-time job. So with my part-time job, I'm guessing that our income is going to be about $5,000 a month starting this month. So we're nervous because we've been digging into our savings for several months now. My husband is a

software engineer, so we thought that he was going to be able to find another job quickly, but it's been seven months and he hasn't found a job. Help me understand the timeline a little bit better and what caused you to move in the first place. So you had this house and you moved. Did you move far away? Are you in the same state help me understand a little bit more we are about 30 minutes from this house okay we downsized our kids grew up left joined the military the house was too big for us and you bought another house yes both houses are paid for both houses are paid for yes then why why did you say so the thousand the eleven hundred what is that like taxes and insurance what's yes okay yes taxes insurance um utilities

so how you've got two paid for homes you're not able to rent it, that's the issue with the location. It is something like a dormitory city. Okay. And it has lots of new homes and, but traffic is really bad to get there. Uh, we only had two complaints from potential buyers. One was that there was no bathtub in the master bathroom. The other was the location they thought was too far and there are no grocery stores yeah but you said builders are in their building around you right and left that means it's a good location lower the price do you have a good real estate agent um i do it's one recommended by dave we think he's really good it's the second time we work with him we really don't think it's the problem is the real estate agent We think he's really good. It's the second time we work with him. We really don't think the problem is the real estate agent. We think it's the competition.

Yeah, which is why Ken is saying lower the price. He's not saying take a drastic plummet, but go little by little until you can really pinpoint what the value of this property is. Let me point out another problem, though, because you're telling me the problem is this and this and that. I'm seeing what bothers, let me tell you what's bothering me about this situation. I see someone with two paid for homes, which I think that's great. You bought two homes in cash. $1,100 shouldn't be breaking your world right now. And I think it's because you guys' income is so low and I know your husband's looking for work. You guys got to get that income up. That's the biggest fire that you need to income is so low. And I know your husband's looking for work. You guys got to get that income up. That's the biggest fire that you need to put out right now.

Because when you're earning the right amount of money, suddenly this $1,100 on two properties that you own, you're going to start to look at that as a blessing instead of a burden. And right now it's a burden because your husband is not working full-time. Yeah, this is, it's been seven months. I don't know what the seven months is. We're running out of time. But you don't need a part-time job. You need two or you need a full-time job until you figure out how to sell this house.

You don't need two houses either. So you guys are close, but this is just some hustle right now in a couple different areas. Thanks for the call. This is The Ramsey Show. We'll be right back. Welcome back to The Ramsey Show. We'll be right back. Welcome back to the Ramsey Show. America, thrilled that you are with us. It's where we help you win in your money, in your work, and in your relationships. I'm Ken Coleman. Jade Warshaw joins me this hour. The phone number is 888-825-5225. And Jade, across the studio, through the glass, on the debt-free stage, in the lobby are some folks.

And that means we've got a debt-free scream coming your way. Gary and Melissa, welcome. Thanks. Thanks. All right. Where are you guys from? From Bell Point, Minnesota. Bell Point, Minnesota. Is that near Minneapolis? Just south of Minneapolis.

Okay, good. Boy, are you just excited to see the sun this time of year? Yep. There it is. All right. So all this way to do a debt-free scream. Very exciting. So let's hear the numbers. How much debt did you pay off and how long? We paid off $165,000 over 47 months. All right. Wow. And what was your range of income? We started about a 160 and ended at about 200. Oh, what led to the bump in pay? We just leaned into our careers. We both earned promotions and stuck to it.

What do you mean by promotions? He moved from a factory position to a safety manager, and I just kind of took different roles at my current company. And what are you doing? I'm a client relationship manager. Okay, fantastic. That is awesome. All right. What was all this debt? What did the 165 get comprised of? By the time we finally got down to just writing everything out, we had a HELOC that we had been leaning on. We had a car and then we had a credit card that we were just kind of paying off every

month. So that was probably the smallest and easiest one to pay off. Okay. So pretty good size HELOC. Yeah, it was about 40,000. Yeah, we used it to remodel our basement and then kind of kept it and kept it going. Okay. All right. So tell us, 47 months ago, what happens? What was the catalytic moment to lead you on this journey? Yeah. So he was going back to school. It was his last semester, and we had found we were kind of, we were trying to cash flow it, but we'd get a little short, so we'd pull a little bit out of the HELOC. We were getting kind of sloppy, and his last semester

came up, and the tuition payment was going to be due, and we finally said, this is it. We're doing it in cash, and we had about two and a half months before that was due, and we did it, and that was kind our our biggest victory as we got started that's awesome so you're funding education out of the HELOC a little bit yeah cash flowing it but then we were kind of filling the gaps we were just being sloppy there was no reason for it yeah so what was kind of like you hit the moment of like listen we're not going to do this anymore we're going to start paying cash what how did you find Ramsey like how did you find like this and this is the way we're going to do this anymore. We're going to start paying cash. What, how did you find Ramsey? Like, how did you find like this? And this is the way we're going to do it going forward. Yeah. We knew about it before that. We just weren't following it. We

kind of thought we were doing good on our, on our path and, you know, we were kind of budgeting. But then it was just like, just tired of the revolving debts. Like this year it was a HELOC, couple of years before it was a 401k loan. It just kind of things we were just, it was a shell game. We were just kind of moving the debt around and just got tiring. It does get tiring. So you're working the baby steps. Is this you're getting on a budget? Is this you guys picking up extra work? Or is this like, listen, we're just tightening up on the budget. We're just getting very clean on what we're doing. Tell us about that. Yeah, it was pretty much just us tightening it up as much as we could,

cutting out any unnecessary expenses. We didn't have any side hustles, but we tried to do more experience-based activities with the kids. You know, we do a lot of camping, going up to the cabin, stuff like that. So just try to cut out those unnecessary expenses. Do you do the ice fishing in Minnesota? Do you guys do that? We do, and I guess spearfishing is probably do the ice fishing in minnesota do you guys do that we do and i guess spearfishing is probably yeah i learned about that i don't want to go down the rabbit hole for the rest of the people who don't care but you're talking about camping all that and i heard about

how you do the ice fishing like it's like a whole thing it's like a whole experience everybody goes out and all that jazz yeah it's fun yeah no i don't think it is i'll be honest i heard it described and i didn't think it was fun at all. But much, much love to you on that. All right, so let's talk about this. Was there a beginning point that you guys said, okay, we heard a little bit about this Ramsey stuff. Now we're going to do it. Was it hard, or was it we were on the same page?

What was the beginning of that journey like when you finally said, all right, we're committing? I mean, was it hard for you or did you just roll right through it? It was a little bit of getting on the same page. We started with that first goal of getting that last tuition payment. And then from there, it was adopting the budget, which I wrote out the budget. I'm the nerd. It took him a little bit to get into the budget. But once we started rolling, then we were both fully bought in. Yeah, I was reluctant at first. The idea of getting on that budget was a little rough, but once you saw it start to really work, that's when I bought in all the way. So, relate to that a little bit because I know a lot of people dislike budgeting,

right? They hear the word budget. They think it's a punishment. They think it's something that's holding them back. What changed that for you? Because I love talking to people who don't like budgeting and changing their minds. So the one thing that was neat is Melissa printed out this kind of like debtress, debt tetris, you know, like all the little pieces equal to a certain amount of money. And we had that sitting on our refrigerator and then every time we were paying off any amounts uh lissa was really good at filling in those spaces i like to fill it in so you like to feel the milestone like you want to feel the milestone you're celebrating it's kind of a fun process yeah and it was a way to see

that work and we did the same thing with our house where we printed off a picture of like balloons holding up our house. And each one was a certain dollar amount. Now, wait a minute. Did you pay the house off? We did. What? Oh, you didn't tell us that. Wait a second.

I was digging. That's the juicy part. I was trying to figure out how big was that credit card. Listen. You paid your house off? Oh, that's amazing. Okay, okay, okay. That makes a little more sense. Yes. We just got into it. Guys, I need you to shout that from the rooftops.

Yeah. You guys are like, ho-hum. All right. Now, who are your biggest cheerleaders on the way? I would say we've got some family that was walking the journey along with us. And then my parents, we just like to talk money. You know, there's more that's caught than taught. And it was those conversations that just kind of kept us focused and motivated. Wow. That's awesome. So what's next? You got to pay for a home, no debt, life is good.

What do you do? What do you do to celebrate? And don't say ice fishing. Well, we came here. And then we've got some fun projects for the house now that it's all done. We've kind of, it's time to have some fun there. Yeah. And you don't have to take out a HELOC to do it.

That's the best part. Speed of cash. That's so fun. All right. I see the kiddos over there. Let's bring them up and then we're going to talk about them for a second. We've got, tell us who they are and the ages. Yeah.

We've got Charlotte is 13. Kelvin is 11 and Caleb is 7. Okay, and so how quickly did you bring them into this journey? And then how involved were they in the conversations around this? Because you just said, Melissa, that you and your family talk about money. I'm guessing these kiddos have a pretty good idea about what we're about to do, yeah? Oh, yeah, they do. They listen to the podcast with us a lot of the time.

We have the game at home. Okay. We've played that a few times. You know, our debt trackers were up on the fridge, so they saw it the same as we did. So it was really a family journey. They knew kind of what the goal was and why we did things the way we did. Okay. And no griping, no complaining.

They were pretty good soldiers? No, they're pretty good. Okay. Pretty easy. That's awesome. I love it. Well, this is really exciting. Well, listen, before we do the screen,

I want to let you know we're also going to give you some gifts here. One is Dave's Total Money Makeover. That's for you to give to someone else because you guys have actually done this. And then Baby Steps Millionaires, Dave's latest book, and that's where you guys are headed probably pretty quickly with the income you guys have actually done this. And then Baby Steps Millionaires, Dave's latest book, and that's where you guys are headed probably pretty quickly with the income you guys have. So those are our gift to you. All right, let's do this.

Is the team ready? The kiddos, have they been practicing? They're old enough. I've got to hear you guys. I don't want to hear all those different tones coming out. Let's do this thing. We've got Gary, Melissa, Charlotte, Kelvin, and Caleb, all from the Minneapolis area.

They paid off $165,000 in 47 months, starting out making $160,000 and ending at $200,000. Let's go, team. Let's hear your debt-free scream. Three, two, one. We're debt-free! I heard them all. I heard them all. Did you? I heard every voice. I heard them all. Did you?

I heard every voice. You're the professional musician. I picked up all three voices. I don't know what you call it. I heard all of them. There was no harmony, but I heard all three. Well, you're tough. You're a tough one.

It's like a judge from American Idol. That's right. I would never want to do that in front of you. But this is a great example of how a family's tree, as Dave has said, for decades changes. So very, very cool. True that. Awesome stuff. All right, don't go anywhere.

We've got to take a quick break. Jade Warshaw, Ken Coleman with you. This is The Ramsey Show. We'll be right back. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. The phone number for you to jump in is 888-825-5225, 888-825-5225.

We'll take your work questions, your money questions today. And don't forget, your income is your greatest wealth-building tool. And now more than ever, I'm telling you, if you're not making what you want to make, the opportunities are there. We want to help you spend that money wisely as well. 888-825-5225. Let's go to Oklahoma City, Oklahoma, and that's where Jacob is. Jacob, how can we help? Hey, guys. Thanks for taking my call. Sure. What's up? So me and my fiance are about to be out of pharmacy school in May and it's about to be a huge 180 from making pretty much, you know, little to no money as interns. And we're about to be pharmacists. Nice. Uh, so I just, I just don't really know where to start.

I guess I understand a little bit about budgeting and, you know, understanding where my money's going, but I just don't know a hundred% where I put my money while we're saving for things like, you know, getting married and a home and all that stuff. What's your income going to be individually? Give us those numbers, roughly. Individually, I expect either one of us to make $100 to $120 a year, I would say, starting out would be pretty reasonable. When do you get married?

So we've thought about doing it this summer, but with getting a license and the big test and everything, I think we're going to push it to fall. But really, we want to get married, you know, as quick as possible, but not being ridiculous, you know. Any debt coming out of school? Yes. So I have about $55,000 in student loans, and she has about $80,000, so $135,000 total. And are you guys planning to live together? We are. We are already living together, yeah. Uh-huh, uh-huh. What other debt do you have besides the student loans?

She has about, I think, $5,000 left on a car. Okay. A 2013 Jetta, and then I have, have obviously about $2,500 in a ring. $2,500 in a ring. Okay. Anything else? $2,500 in a ring. Yeah. That is all the debt that we have. Okay. So you're living together. You're not combining your money though, right? I just want to be sure. So that's the thing. I mean, we are going to combine our money when we're married, but obviously day one, when we collect a paycheck, we will not be together. Right. I guess in a bank account, you know.

Right. Okay. Here's just, this is me being your big sister for a moment. Don't postpone the wedding out of the comfort of your living together and you're already kind of doing you're doing life marriage in your case is just the piece of paper and i don't want the comfort of that to cause you to push that date even further because that piece of paper is really important for you guys protection wise so just a little note there um so you're going to be in when you graduate you're going to be making upwards of 200 to 240 thousand dollars combined uh and you guys probably won't get married till the fall. So the question is, who's paying for the wedding and how much do you need to save up? That's the first question. I mean, that's a great question. And I will say it's pretty early on. I

proposed like three days ago on Friday. Oh, congrats. Okay, that's cool. Yeah. So I'm coming down from that high and I'm trying to think about all this stuff, and this stuff is obviously piling on top of me, those type of questions. I think I am obviously going to be paying for the wedding. I don't really know. I've heard tradition that the father's supposed to pay, but when I shook his hand and talked to him and got her blessing, I never even thought about that stuff. I was fully thinking that I'm going to pay for this wedding.

Whoa, whoa, whoa, whoa, whoa. Okay, here's the deal. Don't assume that. Let her bring it up to pops. You're not supposed to talk to him about that anyway. You didn't do anything wrong. Just a little side note. You asked for his daughter's hand in marriage, not what he's going to pay for the wedding. So you did good. Let her find out. Yeah, let her dig into that one for sure. But Jade's right. That's a pretty big checklist item to get. Yeah, I think that that's really important to find out. And here's the thing. Regardless of what they're going to add,

you should kind of just decide on your, you two together get together and say, listen, what are we willing to spend? Fiance, what can you chip in? And husband to be, what will you chip in? And that way you kind of, at the very least, you can know your own numbers. Now let's deal with this debt

because you've both got more than half a year to make some serious headway on paying off your debt. Are you earning anything while you're finishing up school? I would say the bare minimum just to get there. We're going to be skipping barely along. Okay. And so really not until- The pharmacy is an unpatient. I would say the bare minimum just to get to get there we're gonna we're gonna be you know skipping barely along okay and so really not until an unpatient go ahead I'm sorry I was gonna say really not until May you won't have much even to knock out the ring or the car two thousand five thousand right just because uh it's an unpaid internship in the last year of your pharmacy

school and and really the weekend pay you know we, we make 50 to, you know, $150 a weekend just paying groceries pretty much right now. We're in a lucky situation that we're staying in a place that my grandpa owns right now, but we're just staying in a little apartment. So. Okay. Okay. So when May comes, you're hitting the ground hard, you're saving up for this wedding. If there's anything extra, you're paying off your smallest debt, which is the ring and she's paying off her smallest debt which is the car it'd be great if you guys were able to get into i mean with that salary it's possible that you can both get into this marriage and both all of you you both only have your student loans to go so that's what i'd aim for and of course like ken said we're having that conversation with the dad not you but she is

about whether they're contributing or not yeah and how familiar are you with our baby steps, Jacob? I am not familiar. You know, I hear, I need to get on some stuff like that. I've got- It's all good, brother. We're going to help you out. So let me just, Jay and I will walk you through this really quick. So baby step one is to get $1,000 in a savings account. It's your rainy day. If something happens, it's only $1,000. It's low on purpose. That means that as soon as you guys get out of school or anything beyond your basic payments and minimum payments, you both need to establish the $1,000. You got it? And then you take on your end of baby. Step two is to take on your individual debts, smallest to largest, okay? Baby step three is, once you've paid off

all debt, is to then accumulate three to six months of your living expenses. And baby step four is now you're going to contribute 15, you're saving 15% of your income to retirement. Baby step five is you're funding kids' college. Six, pay off the house. Seven, live and give like no one else, okay? None of those are relevant to you right now. We're going to give you the program. We're going to get you all connected here so that you guys can go through FPU on us. That's our wedding gift. Are you okay with that, Jade? I love it. But that's where you got to be right now. I mean, right out of the gate, Jade, they got to each individually tackle this until we come together, right? Let me tell you something. I'm not opposed. And this is what I would do because you guys are going to start

making money in May. WWJD. I need you what I would do I would secretly go to the courthouse and get a marriage certificate and be married on paper. And I would combine

and start hitting this debt snowball in May instead of having to wait until you guys get married in the fall. And then in the fall you just have a celebration and it's a party. How secret.

Y'all been living together. You may as well get married. I like this. I'm going deeper. Who's on the list of the no? I think they just know. The two of them. Yeah.

Jacob, what do you think about this? This is a rather radical suggestion. This is radical. I like it. I like it, by the way. Jacob? I mean, yeah. I didn't even think about that.

I didn't think about that. That's why you call here. Obviously, it's been three days. A hundred percent. And by the way, that's WWJD. That's what would Jade do. Yes. Listen, the paper.

Doesn't mean you have to, but I like it. Explain it. The party is for the people. The paper is for the. What does it allow them to do immediately? They can combine their finances. Right. In a safe way under the cover of the law of matrimony.

Jacob, what do you think your fiancé would say about this idea? Honestly, we feel, I mean, if I'm going to be honest, we feel 100% invested in each other. We feel... Yeah, but that... I'm talking about lawfully.

We're not lawfully married, but we feel like we're going to... We know we're going to spend our lives together. Listen, everybody thinks they're going to spend their life together. Nobody gets married and goes, I'm going to spend a couple of years with you and then I'm a peace out. No one does that. So I'm not saying that to be negative, but I am saying that to be a realist in that there is true protection under the law for those who are married.

So that's why we always just suggest people do it as quickly as possible because you never, ever know what's going to take place. No one ever says, yes, that was the plan all along was to get married and then we break up or to get married. And then, you know, I'm not going to even say anything negative like that because I don't believe that that's going to happen. But you have to plan and be smart as though you don't know what will happen because you don't.

So we need to do this. Shouldn't we also give them every dollar? You're the every dollar queen. What can we do? We're giving away Dave's stuff. I feel very generous. As the wedding gift, we give them Financial Peace University. For sure.

And that, or like that Ramsey Plus bundle that includes the every dollar. I think you get several months of every dollar. You get Financial Peace University. The Ramsey Plus Bundle has all these wonderful coaching and so many good things in it. Jacob, it's our gift to you, buddy. You guys use everything we're giving you. Begin to have a conversation now about all of this and understand the baby steps that are going to guide you really well. Great hour, Jade. This is The Ramsey Show. Music