The Ramsey Show - App - Should I Pursue a Life of Homesteading? (Hour 1)

Episode Date: May 3, 2024

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, Ramsey personality, joined by best-selling author and all-around good person, Rachel Cruz. And we are here to take your calls, America, at 888-825-5225. And George, I'm going to jump in as we start the show. Because it's a very special day. It is George's birthday.

George, happy birthday. Thank you. The crowd goes wild in the lobby. Happy birthday, George. Thank you for this gift, Rachel. You used to leave $100 bills on the desk. That's so kind of you. It's all prop money and everyone thinks it's real. It's all for you, George. I got that all for you. Hundreds of dollars. The money may be

fake, but the friendship is real. I appreciate that. But seriously, happy birthday. Thank you. And on a Friday. That's a great birthday. There's nowhere else I'd rather be other than at home on vacation. Okay, there's a lot of places I would rather be, but this is pretty good. I know. Well, happy birthday. Thank you.

Well, I'm excited to take your calls. Make them good, people. Jennifer kicks us off in Washington, D.C. How's it going, Jennifer? Great. How are you doing? Thank you so much for taking my call. Sure.

How can we help today? So I have, I'm a single mom. I just got divorced. And I'm working two jobs. It's okay. It's actually a good thing. I'm working two jobs trying to get out of debt. This debt was created during the marriage. And it's all credit of debt. This debt was created during the marriage. And it's all credit card debt. And my children are really young, so I'm leaving them a lot.

And that's hard. They're very responsible, though. So I'm trying to figure out the best solution. My wheels are constantly turning. I'm just trying to pay off that as quick as I can. Interest rates are very high. I just feel like I'm making minimal payments, and it's becoming a lot.

I don't know how else to stretch myself anymore. I'm really at a loss. Are you able to pay all of your bills, like your four walls, food, shelter, utilities, transportation, cover everything, and have some extra to throw at the credit cards? Not really. Okay. I'm barely making it.

Like, I juggle. So I juggle one month I might not be able to pay the electric bill in full, so I take a hit there, and then next month I can. What do you do for work, Jennifer? I'm a department supervisor for Lowe's. I got my first job after marriage. It was a very abusive relationship. So you're new to the workforce here, stepping out.

I'm proud of you. That's great. What are you making? Thank you. I bring home, I just started bringing home around $3,000 a month, and then I work a second job as well. I make gelato on the side because it's very close to my home. I can be quick to church. I can be quick to my children's school. I can be quick to church. I can be quick to my children's school. I can be

quick to home. So I keep myself like in a... Yeah. How much more do you make with the side job? I make between $100 to $ would say 20 hours a month. It depends on when they need me to come in and make gelato. Okay. Jennifer, when you look at all of your expenses and you're looking at even just housing, are you in the same place you were where you guys were married? I'm just wondering if you're, from a percentage standpoint, if your mortgage or your rent is eating up a lot. I see you're in Washington, D.C., and I just know that's a very,

you know, it's an expensive area. So I'm curious that part of your budget. Yes, absolutely. This area is extremely high. I can't move currently right now because that would take a lot of orchestrating on my part to leave. I would also create probably medical legal bills because my ex just, I've entertained the idea, he will not have it. So you have to stay in the area due to the agreement?

So how much is, though, your... Do you own a home or are you renting? Renting. Okay. What's your rent every month? $28.50. He currently pays that. Okay, he pays that.

I was going to say, I can see why things are tight here. All right, so how long is he going to pay that rent for, for the foreseeable future? He has been threatening to not pay it this coming year. Does he have the legal right to do that? Yes, because I was kind of afraid, so i didn't fight him in court at all i was moving with even putting chairs up against my doors just oh my goodness i was really afraid are you safe now yeah yeah i think it was mental more than anything i'm feeling now that i'm further away i'm gaining strength you know and I'm not seeing him as

such a threat but we still keep uh yeah you know so Jennifer um yeah I feel what I would tell you after listening to your story and how fresh all this is um I would yes we want you to pay it on debt. Because how much credit card debt is it? It's $38,000. Okay. And I pay it constantly. Yes. So what I want you, I want you to have a level of security in where you're at. And doing that is making sure your four walls are covered. So when you said we don't pay the, I'm not able to pay the electric bill some of the months.

Those months, Visa doesn't get paid. Like taking care of your necessities, food, shelter, utilities, and transportation is vital, Jennifer. Like making sure that those things are covered, that your lights aren't going to be shut off. I mean, these are basic needs and those things get paid before the credit card. And what I would do is I would call the credit card company. Is it in one card or multiple? It's multiple. Yeah, but it's the total of it.

I would call each of them, and I would just tell them your situation and say, here's what's happened in the last six months, three months, a year. I'm not going to have the money to pay for this and so what kind of plan can you put me on um i want to pay you back that's my goal but this is not going to get paid right now and i would do as much communication on the front end because again making sure that those necess necessities are covered, those four walls, I think is crucial to your situation. And then Jennifer, I do think it's so fresh, all of this. It's gonna take you time. This isn't gonna be something

that's gonna be obviously like an overnight thing. You may not be able to be gazelle intense like you wanna be. That's right, that's right. You might just be crawling for now and that's okay. And that's okay. And being with your kids, healing, like all of that is okay, Jennifer, for a time. So give yourself the permission to breathe, right? I mean, you've gone through a horrific, horrific

situation. And so healing from that, don't feel like you have to take on the world and do everything. And so maybe the money plan is on pause, but I don't want you getting behind on your bills. And bills meaning the rents, or it's not rent because he's paying for it. Your actual life expenses. That's right. That's right. Making sure that those are covered. And then if there is extra, sure, absolutely. We're going to be throwing it at the smallest debt.

But I think giving yourself room to breathe and to say, this has happened. It's going to take me a minute. Don't feel like you have to be the hero in the situation right now because it may just be you healing. Yeah. And you mentioned church. I would make sure that your church community knows what's going on and have them wrap their arms around you. See if family can help out. It's okay.

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more today and join at chministries.org slash budget at chministries.org slash budget. Welcome back to the Ramsey Show. I george camel joined by rachel cruz good news for those of you that like to have money the ramsey cash giveaway is here and you could win one of our five hundred dollar weekly prizes or the grand prize of three thousand dollars that i'm holding you get this exact no you actually get real money this is prop prop money. Real money. We'll give you real money. Okay, so George, question. 3,000 bucks. Okay. If you had to give 1,000, save 1,000, spend 1,000, where would it all go?

Oh, that's a great question. There you go. Throw that out there. To give 1,000, I think if I really just generosity to a nonprofit, a church mission. Yeah, what type of nonprofit? Yeah, yeah, what would it be? You know, I'm a big fan of Charity Water and the way they do business business and their mission so i'd probably do a one-time lump sum to charity water okay where would you save it or invest it i would invest it into mia's 529 oh what a dad dad of the

year you know we got to set her up for success because we're doing fine now it's and we want to make sure she's set up well that's's great. And then spending $1,000? Yeah, where would you spend $1,000? Honestly, my dream would be just like a shopping spree at Costco. I would buy four things and $1,000 would be gone. And be dead. No one can tell me what to buy. No, that's right.

And you get to go do whatever you want. That's my dream. Okay, that's good. It's a sad dream, but it's mine. How about you? Do you have that? I wish your dreams were greater, George, but we're going to take them. We're going to take them. $1 not like it's not gonna change your life

to spend that much money oh yeah you know fair yeah um i would give to um there's multiple organizations around foster care in tennessee so i would be giving to those to be helping families in foster care be able to like give like diapers strollers like whatever families need yep uh that's where i would give uh tennessee kids belong it's a great organization um i would save it i'd probably put in the high yield savings account because we're building a pool i don't know if you heard yes i think that's technically saving yeah uh because it'll be down the road um soon enough but we're saving still maybe we're still buy some of those like in the water chairs those i don't know yeah yeah but that's that'll be down the road so uh that and

then spending i would do half clothes half like two great date nights out. Oh, that's very, I think Winston would appreciate that. Yeah, yeah, I'm such a giver. I should have said a thousand. I would give it all to Whitney to buy, I don't know, a purse or skims or whatever the kids are wearing these days. 3,000 bucks goes a long way. That's legit.

It goes a long way. So if you want $3,000, how do you get it, George? Well, all you have to do is go to ramsaysolutions.com slash giveaway, and you can enter every single day to increase your chances of winning. It takes about 15 seconds to do this. So this is a great hourly payout if it works out for you. And for a limited time, when you're there,

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Caleb joins us in Indianapolis. What's going on, Caleb? Hi, George and Rachel. I am wondering if you guys think homesteading is at all financially viable and if that's something my wife and I should pursue. You called just the right people. We just did an episode on this, Caleb. I know more about homesteading than I legally should.

Smart Money Happy Hour, our other podcast. We did a whole topic on homesteading because it's become a thing. For those of you that don't know what homesteading is, because there's some people that don't know, I think the fullest degree of the definition is that you self-sustain your life on your property. Living self-sufficiently. Yep.

And then you're able to sell things on your property to others. So whether it's food. Crops, cattle. Cattle, meats. Yep, all of that. Milk, eggs. It becomes part of the self-sustaining model. Beans, greens, potatoes, tomatoes, you name it.

So what we've learned, Caleb, is that obviously it's a more expensive way at the beginning, right? Getting into it to be able to get to this point of full homesteading. It can be expensive. Do we have the numbers on it, George? I do have the numbers. I pulled it up from our Smart Money Happy Hour outline here. Caleb, what is the nature of your question here? You're saying financially viable, and can I afford to do this because of the startup costs?

Yeah, well, I would definitely be curious as to what the the startup costs are but even um if you guys think it is actually because sometimes it's hard to cut through the like crap on the internet of like rose-colored glasses for everything and i don't know if this is one of those well and depending what corner of the internet they'll either say homesteading is the only way to live or never homestead. And so I think it's a very personal choice. It's definitely a lifestyle that it's a hard one to commit to. I don't know that I've seen a lot of people go like, we've been homesteading for 40 years. But I think as people get tired of the chaos of this world in city limits, they go, what

if we could do our own thing and have a more peaceful life? So I think as I learned about it, I was like, this makes sense. It's a beautiful way of living if you can swing it. And then we found out about the startup costs, and we're going, all right, you need to buy land. Do you have land? We do not. Right now my wife and I are in an apartment,

but we've both been saving prior to being married, and so we have a little bit of money for a down payment on land. Okay. But I know that homeowners loans don't necessarily apply to land, right? Yes. And so you're going to need not only the land, but then somewhere to live. And that might mean you build, you get an RV, a tiny home for now. You need somewhere to live even after that land down payment.

And so that's where it gets expensive. That's the biggest cost of homesteading is land and somewhere to live. On top of that, you might need a vehicle that, you know, I don't know if like the Kia Forte is going to work on the land. I don't know what your needs are if you're actually running this thing as a homestead. Possibly a generator if you're living off the grid. There's land development if you need septic, water, all those things, and then tools and building

materials and so that all can add up and it's hard to put a number on it because we don't know your area and the timing of it and what the costs are and how big you're trying to go how lean you're trying to be so i think if you have a sizable down payment and you kind of count all the costs up and go yeah this is reasonable based on our income. Do you guys have remote work? What would you be doing for work in the meantime? Well, right now I'm a full-time student, and I'm pursuing my master's in divinity and theology, and then my wife is a full-time tattoo artist. Yeah, how much does she make a year? This is her first year doing it full-time, and right now she's taking home about right around $5,000 every month. Awesome.

And then with your divinity degree, are you wanting to be a pastor? Do you want to be a professor? What's the goal with that? Yeah, either pastor. My dream job is to be like a C.S. Lewis and be a professor of that, right? Welcome to the club, man. Yeah. My dream job would be to be a C.S. Lewis.

I don't think being C.S. Lewis is a job. But you want to be a theological writer. The bar is high, Caleb. I think that's great. You want to be a brilliant theological writer. George just wants to go to Costco to go shopping. So you're in a better mind space, Caleb. didn't know being cs lewis was an option rachel okay i love this caleb so that's what you could spend your thousand on is being cs lewis

if only yeah so caleb here's the deal here's my take can i just cut through it all please cut through it because i do think because i see it on instagram all the time and and half the time i'm like should we just sell everything and move like i mean right like i think we all get to that place yeah but what you're watching if they're really doing it is like really hard work i mean you're up at 4 a.m i mean you're a farmer is basically what it becomes i'm like if you're doing it full time like it is it is difficult and you're usually because you have, you're far away from anything. It's going to be a 30-minute drive to the closest grocery store. I'm like, you take out convenience of your life for the most part.

Again, this is for the person that can actually do it, right? Yeah, the convenience isn't there. The startup costs are high. And it's physically exhausting. I mean, it's hard work. And you got to know what you're doing. You're going to have a steep learning curve. Oh my gosh.

I'm like, there's just a lot that goes into it. And like anything on social media, including money stuff, including investing and all of it, it's just like, oh yeah, it's not a big deal. It looks a lot sexier and easier than it is. Yeah, we just do that. Where I'm like, go get some city chickens and like four box gardens and like start there.

You know what I mean? And if you're enjoying that, then head to the Amish part of town, go on a camping trip. Then make another step, make another step, but start small. And I think some people are like,

we want to just go all in. And, and from a financial standpoint, it's just expensive to do that. So if you baby step your way in and you still enjoy it, then that could be a lifestyle, but then you could get four years into it and be like, oh, my gosh, we have kids. We have this.

They want to do soccer practice. Like, we're not in a place to do all this. Especially if your career is our tattoo artist and church pastor. That's a tough one to live out in the middle of nowhere and do. So a lot to think about. Don't want to dissuade you. But I would say it's a not now right now. Thanks for the call.

This show is sponsored by BetterHelp. All right. it's a not now right now. Thanks for the call. We're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself. We all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when we ask for help. Therapy can be a great source of help and support for any area of your life. And if you're thinking about starting therapy, try BetterHelp.

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I'm George Campbell, joined by Rachel Cruz. The number to call is 888-825-5225. You call up, and we'll help you take the right next step for your life and your money. Clark is up next in Salt Lake City. What's happening, Clark? Hey, George. Happy birthday. Thank you so much, sir.

How are you doing? Doing well. I'm just figuring out how to get out of this mess that I made. Tell us about it. All right. So in total, I have about $53,000 in debt, and about $38,000 of that is in a HELOC. I got $9,000 on a new roof, $4,000 on a credit card, and about $1,500 in medical debt. I just finished up Baby Step 1, and I'm looking to tackle all of this. But I guess my concern is that with my HELOC, it was a 100% loan-to-value, So the interest rate is a lot higher. It's actually sitting at about 14%.

And I, yeah, I'm feeling that every month. Is that variable? Because generally these are variable. Well, actually, I'm not sure. I actually think it might be a variable. Because HELOCs are generally variable. The home equity loan is generally going to have a fixed rate. And so that's something to watch out for as well with these awful traps.

Yeah. It can go up from here is what I'm saying. Yeah. So I guess like does the baby steps still apply with how much I have in the HELOC? Does it make sense for me to attack that one first so that I can get rid of the most amount of interest payment per month? Or I guess like, what would you do in this situation? Well, when it comes to the debt snowball, it's never been about interest. It's about knocking out debts fast, motivation, progress, momentum, and actually getting to the finish line. So when it comes to HELOCs, our one parameter when it comes to the debt snowball is if the HELOC is greater than half

of your annual income, we can push it to baby step six when we're paying off the mortgage. And if it's less than half our annual income, it can fall into that debt snowball wherever it would fall. So what is your income? I think after taxes, it's about $65,000 a year. Yeah, I'm an engineer. Okay. And so before taxes, I assume it's like $80,000 something. It's actually about $70,000. I think it's $73,000. Okay.

Yeah. So you're right on the cusp there. I think this could go either way because of its high interest. I think you can just put it in the debt snowball and attack it aggressively, but you're going to need to up the income. Do you have a spouse that's working outside the home? No, she stays at home with our four kids. Okay. Yeah. I mean, you could look, Clark, into refinancing. I mean, do you have a good rate on your mortgage i'm assuming interest rate three percent yeah i was gonna say you know looking at that possibly refinancing and just you know rolling

this into that yeah just for the interest i mean even a personal loan would probably have better rates than you've got on this heloc but i don't know if you're going to be able to pull that off. What about, so I'm close to the 80% value loan to, sorry, balance to loan ratio. Would it be advisable to go in and say, hey, I want to switch out the type of line of credit to get a lower interest rate? I'm not sure what they'll be able to do for you. I mean, if they can negotiate and go, hey, I need a lower lower rate this thing's killing me i want to pay it off but this interest is making it really hard i don't know what they're going to say depending on the company and you know yeah where you got it yeah you could definitely ask clark uh can't hurt those questions they're not going to raise it because you asked right right okay um but no i would still stick though with the methodology

of just paying off you'd pay off the medical debt, the $1,500 first. And I would just, I mean, I would go down the line, honestly, still with that, even though this is a huge loan with a really high interest rate. I think getting those other things out of the way is going to help free up some of the income of those minimum payments that you would have been paying once the smaller debts are paid off to keep aggressively tacking it. But again, I mean, I would run some numbers and just say, okay, for, you know,

again, I don't want you to lose the great interest rate because how much do you owe on your house? Just about 300. You owe 300? Okay, no, I wouldn't do that. Okay, so yeah, it would just be you guys just tackling it. I mean, slowly but surely, you're going to be paying it off. But I think upping your income,

Clark, is going to be really big for this season. And I would map out too, I think what's helpful during this process is to say, okay, what if I made an extra $1,500 a month or $2,000 a month or some number that would require some sacrifice? You're going to feel it.

But how much faster would we get out of this? So I think having a plan around some of this, it can be so overwhelming when it's all in your head, but start mapping out some plans and with your wife and if there's anything she could even do, I don't know, to bring in anything extra. I mean, even some stay-at-home moms, even like from the grocery standpoint,

I'm like some of them are like, hey, I can find an extra 300 bucks a month if we go like really tight on the grocery budget, right? I mean, like there's just, there's different things that even she could be looking at to see, hey, what can we, what can we trim to be able to throw some extra cash? Yeah, the magic word is margin here. So you can only find that two ways is making more and spending less. And I would try to do both aggressively to see what kind of margin you can create. Alrighty. But man, this is a, what'd you use the HELOC for?

Curious. So I got frustrated with all the student loan crap and I was like, I don't want to deal with that. And I was debating about buying an investment property. I was just trying to do all the things all at once. And then I was like, I'll just wrap it all up and pay it off in that way so so you paid off your student loans by moving it to a higher interest debt yeah probably one of the dumb dumbest decisions I've made and so hey we've all done done with zeros on the end it's only really stupid if you do it twice and so you've learned your lesson here it's a stupid tax again

yeah and uh unfortunately you realize that moving dead around doesn't actually solve it and sometimes it makes it worse like in this case it's one of the reasons i hate helox with a burning undying passion and they're marketed as these wonderful tools to set you up for freedom and help you do all these things and it's just not true. It's just another rose with thorns by another name. So Clark, I wish I could snap my fingers and give you a magic trick to get out of this, but this is just going to be a lot of hustle and grind and getting the income up and sacrifice for the whole family for the foreseeable future for probably

next two, two and a half, three years. Okay. All right. Well, thank years. Okay. All right. Well, thank you. Thanks for the motivation and the help. Yeah. That's what we do around here, Rachel. We just, I feel like a doctor who just gave me the diagnosis.

I know. I'm like, bye, Clark. Have a good weekend. You got gout. Have a good weekend. Best of luck with that. I know. It is hard.

Well, and it sucks too because so much of personal finance, it's so personal and so much of it, it's for the most part, it's us choosing it, right? Like when there are bad money decisions or choices, it's because we made them. And so I think part of it is swallowing that pill of like, oh crap, I did this to myself. Like I did this, you know?

And kind of like that feeling of what probably Clark has a little bit. But Clark, we're cheering you on. And here's the thing too, Clark. We see people weekly on the debt-free stage doing their debt-free screams. And so much of them during their debt payoff, they say, we started at $55,000. We started at $73,000. It went up to $110,000. Whether they got a raise at work, something happened in life, they took on extra work. But that income, for the most part, always gets raised.

It's rarely been like, well, I got a $2,000 raise over those two years. That's right. They increased it double. Yeah. I mean, some people, they find even a whole other job for it. So anyways, it's still doable. So don't lose hope, Clark. I mean, we see it, but it does. It takes some work. But map it out. I have a timeline. I always feel like that's helpful because you're like, here's when we'll get out. Even if it's three years, at least we know here's a date we're shooting for. We have a goal and we just got to make it to that goal. And we know how fast time flies. You know, people, I'm making a year, a year ago, you're like, wait, what? It's been a year. So the year is going to pass either

way. Yeah. So where do you want to be a year from now? That's right. Exactly. But in that moment, you're like, oh my gosh, a year of sacrifice. You know, it feels like yesterday it was 2014. I know.

It's just like yesterday. You know, last year you felt 20, you felt 34, George, and today, exhausted. 35.

You ever just wake up with like a back issue and a crick in your neck just from sleeping? I know. I hear your 40s, it gets worse. I mean,

we don't know. Neither of us know, but we hear that. Looking out to a 40-year-old right now. Well, that is how it goes. Do you hope Randall calls this hour? If Randall calls, I will lose my mind. If you all know about Randall calling the show last week.

Randall's a birthday appearance. I don't know. We'll see. Only time will tell. Can't make promises. Vivian may have an inside. know. We'll see. Only time will tell. Can't make promises. Vivian may have an inside. Inside. We'll see.

One of the reasons to stick around on The Ramsey Show. We'll be right back. Welcome back to The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Today's question comes from Greg in Alabama. What does Greg have to say, Rachel? Yes, he asks, I am getting a 15-year mortgage and want to pay it off as quickly as possible. What's the best way to do that? Should I make an extra payment of as much as I can afford once a month, or is it better to pay a lump sum once a year?

Ooh. That's a great question. First of all, Greg, I love that you went with a 15-year mortgage, a very difficult choice in today's mortgage environment, but it's the right choice because you're going to save so much on interest. You generally get a lower rate than a 30-year. You're paying it off in worst case, 15 years, which is beautiful. And he wants to pay it off quickly, which we found, Rachel, in our millionaire study,

the average millionaire paid off their home in 10.2 years the average baby stepper following the ramsey plan pays off their house in seven years seven years i know so it's incredible and the way they do it if you're asking here should i make an extra payment as much as i can afford once a year there's all these you know tiktok strategies that are stupid out there in the simplest way is when you have the money pay it toward the principal and And for us, when we did this, it was every single month, we set a specific goal and we wanted to stay consistent. And if we could even up that goal every month, it was even better. So it might be right now, extra 500 bucks is what we can do. It might go up to, we're going to double the mortgage payment every month for the year.

You might even get the triple depending on what your mortgage is. And so set a goal that's, you know, we talk about baby steps. When you get out of one through three, you go from intense to intentional. Yes. So it doesn't have to be gazelle intense, but I like having an actual payoff date goal. And if we do that, we need to pay this much off. Very similar to baby step two. Yeah. Well, it's almost like pay yourself a car payment, right? Like an $800 800 car payment what you would have paid if you were still living in debt and just you know like i think having even that some type of picture yes in it but yeah it going to the principal and doing i wouldn't do it in a lump sum uh we have found that it can be tempting if you have a lump sum of money if you're like i'm gonna save this up over the year and then you think oh well the beach kind

of sounds nice what if we just took a little bit of that that we would have put toward the mortgage and used it? Or we need to upgrade this or we want to do that. You know, and there's a bunch of cash there. It's a forced savings plan. It's a forced savings plan. It's a great way of putting it. So I like the strategy. And again, just like baby step two, you've got to find ways to have more margin.

So if you're only able to throw $100, we've got to figure out how to make more by spending less or getting a side job, increasing our core income, all of that. But, man, it feels good. Once you see that principle go down, look at everyone listening out there, go look at your amortization schedule. That's the nerdy word for the long list of if you make this payment, here's how much it'll be. And use our mortgage payoff calculator at RamseySolutions.com and just see how much interest you'll save alone. And when we did that, it was encouraging because I found we're going to save $100,000 in interest alone. Just by not giving it to the bank and paying this down sooner. And once you start to flip-flop the principal versus interest, you start to see it shift.

Where you're now paying more in principal than interest, you feel like you can do anything. So good luck, Greg. Call us when you're debt-free. We'll celebrate with you. Autumn is on the line in Charlotte, North Carolina up next. Autumn, welcome to The Ramsey Show. Hey, guys. Thanks for taking my call. Absolutely. How can we help? So, yeah, my husband and I are starting a side hustle to like pay off debt and grow wealth and stuff. And we kind of, we're not sure what to do with the SUV we have. It's the last debt we've got besides our home.

And right now we're paying $2,000 a month on it. And we have enough savings where we could pay it off but we don't really want to dip into that we want to kind of um hold on to that so um because we're not really sure you know what the future holds and stuff um what do you mean the future well we make really good money right now, and we don't want to jeopardize that with the side hustle. But we also want to do the side hustle to make more money. And, you know, especially, you know, going to real estate, you know, buying and selling properties and things like that. So what are the kind of boundaries with the side hustle? What would cause it to affect your jobs?

I just don't think they would appreciate, you know, I feel like they might worry about it taking away from, you know, our job and stuff like that, which we wouldn't do. Are you at work present for the amount of time required? Are you getting your work done? Is there a non-compete that you signed? Right. Yeah, there would be no issue with that, you know, or anything like that.

And have you spoken to your leaders at work about this and saying, hey, we're trying to get out of debt, here's what we're doing? No. No, we thought it would be best to keep it on the down low. What are you doing? What are you doing? What do you do for work, Autumn, and what's the side hustle?

It's food service, administration, and the side hustle would be a real estate broker. Those feel very drastically different. Have you done the side hustle? Have you guys been doing real estate?

Not yet, no. Oh, so it's just a dream. We've done all the classes. Okay. Well, we've done all the classes and everything like that. Did you get your license? Right, yeah.

Okay. You do have your license. And do you have your broker's license and what are you planning on doing with it um selling real estate just as a as an independent agent within within your own brokerage uh with a firm okay well uh number one real estate is it is hard to do part-time as like a side hustle because of the amount of time it takes, the random schedule and hours. The good news is you can try to schedule around. Is this like an 8 to 5 type job you have right now? Right, yeah.

Okay. I mean, I think as long as it's not affecting your actual work and productivity, there's nothing wrong with this. You're saying you're making great money. You said that earlier. Is that through your main job? Obviously. Right. Right. Yes. Okay. But you don't want to do that long term. You don't enjoy this work. Partly. It would be great to be able to do both, you know, because, you know, once upon a time, we talked about buying a second property where we like to vacation and, you know, once upon a time we talked about buying a second property where we like to vacation and, you know, financing and whatnot. And decided not to do that, you know, after listening to you guys. But so we'd like to pay off our mortgage and then, you know, purchase other real estate and whatnot, either to flip or, you know, to rent. So you're excited about the idea of working in the real estate world at some point. Yeah.

What's left on the SUV, loan-wise? $38,000. $38,000? Yeah. How much do you have in savings? About $29,000. Oh, you said you had enough to pay off the car today. Well, yeah, in one account we have that,

and then in another one we've got about $18,000. So, I mean, we could pull from a couple different accounts. Well, I'm going to encourage you, regardless of the side hustles, I would pay off the car today. You guys don't have, you know, super unstable jobs where you're about to lose your jobs tomorrow. I would go ahead and pay off the car today,

quit paying interest, free up the car payment. That's going to put you in a much better position and allow you to not have to work the side hustle. Yeah. How much do you guys make a year, Autumn? It's about, it's a potential about $295,000 gross. Potential? That's with a potential bonus and whatnot. Nets, we bring home about 160, 165-ish without bonus.

Well, here's the key. Making 165 with no car payment, you're going to be able to save up that savings really quickly because that would put you in baby step three, where you save up three to six months of expenses. So I wouldn't go through all this hassle of trying to sell a house to pay down the car faster. You have the money, just be done with it and move on with your life. Save up money really quick. How much is your car payment? It's like 700, but we're putting 2,000 on it. So if you put $2,000 instead, you know, you free up the car payment

and put that money instead toward a savings account, you're going to be back there in no time. Sure. You can probably do even better. I think if you guys are really on a tighter budget, and I feel like there's probably some money leaks happening right now, you could get rid of that. You could get that savings really fast.

Yeah, and I would suggest, to, yeah, pay it off. So you don't feel like the side hustle has to be to pay off debt. That kind of frees you up there. And then if you guys want to transition into a real estate career later on, you can start taking those baby steps to do that. But I wouldn't let the motivation of the SUV be the driver of getting into real estate either. Pay it off.

That puts this hour of the Ramsey Show in the books. Thanks to my co-host, Rachel Cruz, all the folks in the booth keeping the show afloat, and you, America. Thanks for listening in. We'll be back before you know it. Take care.