The Ramsey Show - App - Should I Still Be Investing While Paying Off Debt? (Hour 2)

Episode Date: January 19, 2023

Kristina Ellis & George Kamel answer your questions and discuss: Getting out of a car lease, from the blog: How Does Leasing a Car Work? Update on Kristina's #NoSpendChallenege, "Should I be investing while paying off debt?" from the blog: When You Should Stop Investing What a "Super Roth" is and whether or not you should do one, How to use an inheritance well. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio. It's the Ramsey Show where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, Christina Ellis, joined today by my co-host, fellow Ramsey Personality and good friend, George Campbell. We're taking your calls at 888-825-5225. Again, that's 888-825-5225. Hey, if you like the show, please consider subscribing,

leaving a review, and sharing it with a friend. It really helps. We're excited to chat this hour. Ready to talk to you, America. Kicking off this hour, we have Madison calling from Burlington, Iowa. Hey, Madison. Welcome to the show. Hi. Hey, how can we help?

How are you? We're doing great. Excited to chat with you. So my husband and I have been together for seven years and we have made some wonderful choices. Welcome to the club. We've all been there. Yeah. So my husband traveled for work and so we bought a camper because we traveled all over the country. And that was at the time we thought a better option than renting at different places all over and moving every who knows how long um so now we have that and we went kind of

wild so that we still have like 49 000 left to pay on that but we also have a home and we have a baby who's almost two now. And so we're trying to sell our camper because my husband doesn't want to travel anymore. And so we have that, we have his truck and we have my car, which I have a lease on. Pretty much all of which we have regret. And they're all on payments? Yes. Okay. What is the total debt you all have? So without our house, it's $77,000. And then our house, we owe just a little under $100,000. Okay. And you said you all don't want to travel anymore, but your husband did travel for work. Has that situation changed? Yes. So he has taken a pay cut to be home and I have started my, like a dog grooming business

out of our home so that I can help supplement that income. Um, so what's your current household income? Um, about 125,000. Cool. And what's left on the truck loan and the car loan or the car lease? The truck, we have about $10,000. And then my car, like if I was going to trade it in today, I'd have to pay $8,765. Okay. Now, have you found out the early buyout amount to get out of this lease? That's what that is. Okay. And how much money do you guys have in the bank?

About $7,000. Okay. In our savings. How much do you think you could get for the camper if you sold that? We'd like to get $45,000 for it. Okay, so you're underwater by a few grand, and you've got the money in the bank to cover the difference?

Mm-hmm. Okay. That would probably be my A1, because you'll clear most of the debt just from that camper and clear up that payment. Yeah, and then my husband's truck, it's probably worth about $40,000. So I'm trying to talk him into selling that as soon as possible.

Because he also, it's a diesel truck, and he drives 45 minutes each way for work. Ooh. That's rough. So I feel it's about $700 a month just in fuel for his truck. So if you sold the truck for $40,000 and NIO's $10,000, you could clear $30,000 on that, which then pays off your buyout for your lease. Yes.

And still leaves you with a bunch of money left over. Right, and I think he should get a car, and he thinks he wants to get a smaller truck, but I don't think that's very good on fuel either for the moment so i'm trying to tell him that it's not a forever car but it's kind of a difficult conversation it's hard to get rid of the truck but i mean that could really get y'all ahead i know i can see i see the light at the end of this tunnel and it's not far but it's going to take some initial big sacrifices and just some headaches of all right we got to sell the camper we're going to spend our own 5 000 out of our bank to cover the difference and then we're going to sell the truck for 40 we're

going to have 30 left over after that we're going to buy you a reasonable economical used car yeah and then with the rest of the money we're going to pay off my car and now we're kind of at square one where we don't have any payments except the mortgage, and we can save up a fully funded emergency fund. And now we're off to the races. Yeah. I also have about $13,000 in credit card debt. Oh.

Is that part of the $77,000? Yes. Okay. Okay. So we're just going to debt snowball it. Once this camper is paid off, just list out all of those debts from smallest to largest. And if we're selling that truck too, that really helps speed this whole thing up. Yeah.

And so whatever the lowest balance is after you sell the vehicles, the camper and the truck, we're going to attack the smallest one with a vengeance and then the next one. And without making $125, you guys can do this in the next few months. Yeah. I have just, I've kind of never been very good at money and i put our budget together and saw how much i was spending and i am now like a crazy person like wanting to spend every dollar i have to pay off debt well now you know too much you you've seen too much you're like oh, we can never go back, which is an awesome feeling. Have you cut up the credit card yet?

Yes, and one of them was metal, and so I had my husband. He's a welder, so I made him grind off the metal. Wow. That's next level. That's how you do it. That tells me. That's gazelle intense. So is he on board with this whole plan?

Is he ready to sell the camper and the truck and do all of this to get out of debt? Yes. Yes. It was just kind of getting him a car was kind of like the biggest struggle. Well, it sounds like he's just a truck guy through and through, and he refuses to drive a sedan. Yeah. What about, can we split the difference?

Can we go with a reasonable SUV that has good fuel economy? I think so. I think I'm almost deer hunt, so it's like, I don't want to throw a deer on top of this car. I'm like, who cares? It's for a year. That would be quite a sight to see. Oh my goodness. Just a deer on top of a Honda Civic. Well, what about a cheaper truck?

So we've looked at that, but cheaper trucks, I don't think they're like, it's like a GMC, like older Colorado. And I don't think that would be very good on gas for going back and forth. I feel like this truck might be a future dream, and right now we get ourselves to a great financial spot, and then later on he can get a cheap little truck just for the deer hunting. Yes. That feels like the better plan. Right now to base our entire financial plan on putting a deer on a car, this is a bad lens to look at this. And if John Delaney was here, he would be in support of your husband. So I'm glad Dr. John is not on this call. I'm all for the deer hunting, but I'm like,

I'm not, I don't think we need a gas guzzling truck right now. Well, there's an order to the madness. It goes debt freedom, then deer hunting. So we just need our priorities set straight. So have him listen to this call. But you know what to do, Madison. And now it's just getting about the business of selling the camper, selling the truck, paying off the debt. Let's get the emergency fund. Let's go find the other car. This is going to be a part-time job for the next month, but you are going to walk away with such freedom and peace that you've set yourself up for. We're here for it. Yeah, and I think as you map all that out, you can see that that light at the end of the tunnel, it's really not that far.

Thankfully, you do have big things to sell. So I think you're going to get there quicker than you imagine, and you can get that truck again. We'll be right back. This is The Ramsey Show. ស្រូវាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រ welcome back to the ramsey show give us a call at triple eight eight two five five two two five we're talking about your life and your money. Y'all, so I've been doing No Spin January with my community on social media, and it has been quite a learning experience for me. Is this kind of like an eat, pray, love journey for you? You're learning about yourself? Kind of feels that way. Okay, where are you at now? Have you been surviving it?

We've been surviving it. We have been eating on under $100 a week on groceries. We've actually kept it pretty well under that. What is this, 1997? You're throwing it back? That's amazing. Throwing it back, George. And this is mainly due to shopping at like Aldi and not being very, very intentional with every single dollar.

Being very intentional. I think I've shared this before that it felt like last year, it's so easy with inflation and with all these things going on for your budget to get kind of fluffed up. And I felt that way. And I kind of hit the end of the year and was like, this isn't okay. We need to tighten back in. We need to buckle down. So we're going to do this. And it's been really interesting. So I want to share a few of the things that I've been learning so far, because I've kind of hit that point mid-January where it's like you interesting. So I wanna share a few of the things that I've been learning so far because I've kind of hit that point mid-January where it's like you get over the hump.

A lot of people have goals, resolutions, and there's all these stats saying that about mid-January is when people start going, maybe I messed up with this goal. Maybe I shouldn't have signed up for a no spend. And I'm gonna be really honest. I've had a few of those moments where I'm like, oh my gosh, this is kind of hard. But at the

same time, leaning into it, I'm like, okay, I'm learning some good things. One is mindful spending. You know, I thought I had pretty good self-control and I think I do, but I've had several moments where my brain has wanted to act like a toddler and be like, I want that now. What's one of those things? Oh my gosh. So last weekend I was sitting in my son's room. It was kind of a mess. You know, after Christmas, we got all these new toys from family and I was struggling to figure out how to organize it. And I was like, I need a new shelf. And I, I literally, a shelf that was going to solve all my problems. I've never been excited about a shelf. That is next level. It It was very exciting and I sat there like literally going through my mind trying to justify how it was essential and could qualify

for the no spend challenge But I did hold off and I was like, okay i'm gonna hold off the next day I still woke up thinking like I need that shelf But I was like I've committed to a community of people that I am not going to spend on non-essential items this month And so I did not buy it spend on non-essential items this month. And so I did not buy it. And then fast forward a few days and I realized I don't actually need the shelf, George. You don't need more storage. I actually need to declutter. Less crap. Right? I need less crap. So it's interesting how we often will just jump to spending and buying something to solve a problem when in reality,

that's really not fixing the problem. And so just challenging myself to go, okay, like what is the real issue here if I don't just try to solve my problem immediately with buying something? It's been humbling. I can't tell you how many garages I pass in my neighborhood and they're just filled to the brim with boxes. There are no cars in the garage. They can't fit. The nice cars on payments are in the driveway because there's too much crap in the garage. That is how we have become broke, America. Exactly. Wow. All right. Food is another big one. And I've seen some users jump in with their comments. Chris Marlow said, 48 bucks was our grocery bill this week for a

family of four during No Spend January. That's impressive. Yes. I feel like all sorts of people are winning with this. Of course, we have skeptics we'll talk about here in a minute, but there are a lot of people who've committed to this challenge at the beginning of the year, and they are winning. Bill James wrote, you and George inspired my wife and I on the podcast with no spend month. We were fluffed up to $1,300 a month, barely eating out. On Sunday, I went to Aldi with our list. I used a calculator as I walked around. I love that. I initially went in trying to beat $100 and walked away with a cart full and a week's

worth of groceries for $75. Thank you and your team for all you do. I love that. That's incredible. It is so cool to see people challenging themselves and people who thought, you know, I'm decent with my grocery budget. I don't spend anything crazy.

But then when they get really mindful and they really create a meal plan and they really create a list when they go into the store, seeing just how much they can save and how quickly they can get ahead. Oh, yeah. Can I read the comment from the skeptic? Yeah.

I'm going to read it how I think they wrote it. I'm sorry. No, don't tell the rest of us to spend less and be smarter. We shouldn't have to, as you say, cut it back and shop sales to survive. Does that sound accurate? I think that's how they said it. That was incredible, George. Thank you, James.

That felt very accurate. It just has that attitude of, I don't want to change. I don't want to sacrifice. I'm happy being mediocre. And anything you're doing to better yourself is offensive to me. I mean, I kind of felt that way.

That's today's society, Christina. But at the same time, we can't control the system. Of course, we're frustrated that grocery prices have gone up. I would love for it to be cheaper. That would be great. But I can't control that. So I'm going to think through like, what can I control? What can I do for me and my family to make progress? And it's like, if you have that attitude that you're a victim, that, you know, you're just going to complain about the situation and not do anything like you're never going to win. Absolutely. You're never going to get ahead. Christina, you know, I got a lot of flack for my

reel I posted saying it's cheaper to eat at home than to eat out. And everyone's like, are you insane? Have you been to the grocery? This guy hasn't been to the grocery store since 1998. And so I just want to give you guys the middle ground here because I actually live this stuff out. I went to Sam's Club and Costco, these wholesale clubs, and I'm a soup guy. I love a good soup. And so Sam's Club has this Mediterranean-style lentil soup, very on brand for me as someone who is Mediterranean. And it's $8 for a two-pack of these giant containers. So if you do the math, it's less than $2 a serving. That's amazing.

So you can feed a family of four for $8 and it doesn't require a thousand dishes and your time is so valuable that you can't, listen, you just heat it up in the microwave or on the stovetop and dinner's ready in five minutes. There's no excuse. Right. And it's healthy. And it's healthy. Like that's a win all the way around. So it can be done. And then finally, the last thing that's really stuck out in my head is I learned recently about this concept of third spaces. So our first space is our home. Our second space is our work. And our third space is kind of like where we go to hang out and have fun.

And it's so easy nowadays to make that third space the mall, TJ Maxx, or some sort of store. Target. Target. That definitely is the top of the list. Yeah, you hit me right in the heart, George. And it's like that, if you surround yourself in those moments with things that make you want to spend money, you're gonna be more likely to bust your budget. So thinking through what are third spaces

that don't require you to spend money. I know a lot of people think that this is like a relic of the past, but the public library, y'all, it is amazing. Like check out your local public library. They have free books that you can rent. A lot of times I posted this on social media and a lot of people were sharing that their libraries

will let you rent toys, that they'll like let you rent lawn equipment, which is just bonkers and amazing to me. Also, you know, parks and playgrounds. A lot of cities have amazing free parks. They're always building these new incredible parks. We're actually this month going on a tour of the parks around Nashville. Wow.

That is like the nerdiest, hippest thing I've heard in a while. I love it. I mean, in your church, like if you have a church community, you know, get involved there and then be creative with your friend group. You know, consider rotating houses, doing potlucks or dessert nights and creating fun, free spaces where you can hang out. And I mean, this one has been a big challenge to me because this is going to sound terrible. I'm kind of embarrassed to admit this, but, you know, we moved last year and on Friday nights, we've got

two little kids. We're trying to keep them happy, you know, keep them entertained. We're exhausted on Friday night. And we started using TJ Maxx as our third space. TJ Maxx or Target because it's got a great kids section. The kids will be entertained. We can kind of decompress. Raise up those Maxxinistas, Christina. Respect. I think I can do better than that.

That's fun. Yeah, so it's been good. It's been very humbling. It's been humbling and awesome, and it's great to do it in community. And it's also a good reminder of when you're making these big financial changes, when you're going through challenges with your finances, when you're getting gazelle intense to get in community with it. Like, honestly, there have been several moments where I've tried to justify things in my head. And I'm like, no, I'm not going to lie to my friends. I'm

not going to lie to my Instagram community who is doing this challenge with me. Like, I feel accountable. And so it's just so important too with FPU. If you're in Financial Peace University, if you are on baby step two, if you're trying to get gazelle intense, surround yourself with people who have similar goals, who have similar values. Community, that accountability factor is so huge. I love it. Well, hey, continue on the journey with us with this no spend month. We'd love to hear how you're doing that. You can send an email to ask at ramseysolutions.com and put no spend month in the subject line. We'd love to hear creative ways you are saving that cash.

Let's go. We'll be right back. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Welcome back to The Ramsey Show. I'm Christina Ellis, joined today by my friend George Camel. We are taking your calls at 888-825-5225. Next up, we have Luke calling from Toms River, New Jersey. Hey, Luke, welcome to the show. How are you guys doing? We're doing well. How about you? Good. So I have about maybe $19,000 in debt, probably about $4,000 on my car, and then just a little under $15,000 in student loans. I just learned that I don't have any interest on my student loans until August. So I make about $2,300 a month, and I just want to be able to pay that off before August. So I don't have the interest occur and I'm able to make my car payments and car insurance payments as well.

But I want to be able to invest and save at the same time. But should I be able, should I do that or should I be spending more on my student loans? So you're not paying interest on the student loans because you just graduated recently or because of the student loan forgiveness proposal? There's a CARE Act, I guess, they have on the student loans. The payments are paused. Yes. When did you graduate?

I just graduated trade school in October. Okay. How old are you? 24. Okay. Cool. Well, it's an awesome goal, and I'm glad you're asking this question, and you should absolutely pause all investing until you've got this debt out of your life

and you have a fully funded emergency fund of three to six months of expenses. Do you have any money in the bank right now? Yeah, I have about $6,000. Awesome. So what I planned on doing was doing $1,500 towards my student loans a month up until that August, until that last month. And then whatever remaining balance I had, I was going to pay it off. What's your car payment?

I have about $270 a month, and with car insurance, it's about $165. So about $430, $440 a month between those two. So what if you paid off that car loan today, and you freed up $270 to start throwing extra onto the student loan payments. Let me rephrase that. Pay off the car today and use the $270 to start paying off your student loans. Okay. So if you're following the baby steps, which is the same way I got out of $40,000 worth of debt, you would go down to $1,000 in emergency fund savings temporarily

and use all extra money to pay off consumer debt aggressively. Okay. So that's the plan. As long as you can make your other bills with your future cash flow, that would be the plan. Luke, what's your hesitation? I don't know. Just kind of planning it out and making sure it's going in the right spot

okay um i guess since i i already know my interest on my car i have that stuff um my i just want to be able to have that remaining be able to have that remaining balance so i can pay it off in the last month for my student loans. You're going to make more progress if you use all the money you have except for that $1,000 to pay off the debt today because you're freeing up a payment. And so that $270 working for you instead of against you, with interest, by the way, is going to help you get rid of those student loans by August. Can you do any extra side work as well?

Because it sounds like right now you're, are you working full-time? Yeah, I'm working full-time, but I do have a job that I've worked in the past. This is my first full-time job that does happen in the spring and summer that I could do, you know, once a week with them on the weekends. So, I mean, I'd probably be making about like $200 a day with that. And that would really be it. Wow, that would speed up that debt snowball process for sure. Yes, definitely. Luke, I kind of feel like you're at a crossroad, right? You obviously are calling into the show, which is amazing. And you've got this idea to pay off the debt. You've got the

idea to pay off the student loan. And on the other hand, it's easy to kind of slack because it's not super pressing right now. I don't know that you've had like a complete I've had it moment that a lot of people have had when they have $100,000 in debt. But I would encourage you like this call. If you walk out these steps, if you pay off this debt, if you start investing and following the baby steps, you're young. You have the potential to

be a baby steps millionaire in 10 to 20 years. You have the chance right now to do this the right way. But it's a little tricky because there are so many different TikTok influencers out there. There's so many different people who are going to tell you student loan debt's not bad, that you can just kind of stretch it out, wait for forgiveness, all these different things. But I hope that you're willing to say in this moment, like, I've had it, even if it's not a huge amount of debt, even if you've just graduated, but like, make the decision to really fight now. Because it's like, if you do that, you will be so much further ahead than so many adults who wait to pay off their debt,

who wait to start investing, like you're gonna get there, but do it the right way. Even if it feels slow at the moment, even if you don't get to do the flashy investing right now, like you will get there. So let me show you what this looks like on paper. You've got six grand in the bank. You owe four on the car. That leaves you with two if you pay off the car today. We're going to throw one of those two at the student loans. Now our student loans are down to 14. You want to pay them off by August. Great. You got 14,000 and you want to pay it off in seven months. That's 2K a month. So now we need to figure out how can we create $2,000 worth of margin to throw at the student loans to pay it off by August. It's that simple and it's that hard. And so your goal now is to get the income up and follow these steps so that you can be completely debt-free by August. Your next goal

by August is to start up that emergency fund of three to six months. So by the end of the year, dude, you'll be in a completely different place financially. Oh yeah, I know. I just, I knew I could do this. I just didn't know where to really start. And you know, you said like, just get me a car, pay me down, and then you can focus on student loans because I just don't want interest. Nobody wants interest. Well, you're going to feel the progress immediately if you follow it this way. And remember, we're not doing any investing because every single ounce and penny of margin needs to be focused on that debt. You got this, man. Thanks for the call. Hang on the line, Luke. We're going to get you in Financial Peace University. Austin's going to pick

up. We're going to gift that to you to help you walk through these steps one by one, doing it the right way. All right. Next up, we have Ethan calling from Salt Lake City, Utah. Hey, Ethan, welcome to the show. Hey, guys. Appreciate it. Yeah. Thanks for calling. Well, I'm on baby steps four, five and six, and I got a retirement question. I put into a Roth 401k at my work, but they limit me to 10% per year because of my income. And that's, I'm not able to quite reach the Roth cap or the 401k Roth cap. So on the side, I've got Roth set up so that me and my wife can put into them each year. But my question is once I max those out, what is the next best option? And my company also offered this year this thing called a Super Roth, but it looks like it's really complicated and has

super concerning tax stuff. So there's two versions of the Super Roth. One is basically a scam involving indexed universal life insurance, and the other one is more of a mega backdoor Roth is what it's traditionally called, which is after-tax contributions to the 401k. Yeah, it's that one. I researched it to make sure because when I seen that it was whole life, I'm like, whoa, whoa, no way. Okay, cool. So you're saying they cap you at 10%. You don't even hit the Roth 401k limit? Not quite. So I came close last year within $2,000, but I mean, I don't know what it'll be this year. I'm hoping I'll still get to the max here. So what is your income?

Around 180. I've never heard where they won't even let you max out your 401k. Well, it's because of a highly compensated employees. It's some, it's some loophole between the Labor Department and the IRS that they cap individuals that make over $130,000. It don't make sense to me, but I called up several different ladders and made sure there's no way around it without going to a different 401k plan, which they don't offer. So your other options would then be, do you guys make too much for the Roth IRA contributions? I'm not sure what you mean. Like outside my work, is that what you mean? There are income limits for the Roth IRA outside of work.

So look into that to see if you guys hit that cap on the AGI. And if you can't contribute to the Roth IRA, you could do what's called a backdoor Roth, where you contribute to a traditional IRA, and then you convert it into Roth. So I would be connecting with a SmartVestor Pro at ramsaysolutions.com for a high earner. You want to know all of the strategies you can use to build wealth, and there are a ton out there that we don't have time for here. So connect with a SmartVestor Pro, and they can help navigate for your situation. Welcome back to the Ramsey Show. Hey, give us a call at 888-825-5225. We're taking your calls on your life, your money, your mental health, your career, whatever is on your mind today.

We're here for you. Hey, if that Peloton bike you got in 2020 is still sitting unused in your garage, you know the difference between goals and resolutions. And that is a personal attack on me because that was us, and we sold it because we were not using it. Goals are things you actually set out to achieve, and resolutions are the things you say, you know, that'd be nice if I could, but, you know, it ain't gonna happen. So if you've got goals to improve your money, your career, your relationships this year,

don't let them hang out in your garage for three years. Okay, maybe not the best metaphor. You know what I mean. Get the practical proven plan to crush the debt and build wealth with Dave Ramsey's best-selling book, The Total Money Makeover, and learn the seven baby steps to guide you along your money journey. If every day feels like Monday for you, maybe it's time to find your true talents or a new career. And you can do that with Ken Coleman's Get Clear Career Assessment to learn what you were created

to do and what careers fit you best. And some of us are still recovering from the holidays. And if you're looking to deepen your relationships with your spouse, your kids, your friends, your family, be sure to pick up his new Questions for Humans decks from our friend, Dr. John Deloney. And nevermind the Peloton, get some books and tools that will actually take your goals way beyond the dusty garage. You can check out all of those books and order them today at ramsaysolutions.com slash store. And it's such a good time for it because we are in that time of the month where we start losing a little bit of steam

on those goals and resolutions. And I think it's one of those times to kind of check yourself and go, you know what, I started this year really wanting this goal. I really wanted to do this. I felt motivated and it's kind of waning. But literally at any moment,

you can say, here's the moment where I'm gonna get motivated again. I'm gonna dive in. So, you know, let it be your wake up call. If you're starting to lose some steam, you know, dive back in. Well, the problem is, Christina, shopping for the workout clothes is really fun. Doing the workout, way less fun. And it feels that way with your money too. The idea of, wow, getting on a budget and saving, that sounds awesome. Doing it's hard. And so, these books will inspire you to greatness. I know Total Money Makeover lit a fire under me

when I read it a decade ago, and I know it continues to do the same for thousands of you out there. So good. All right, let's go back to the phones. Next up, we have Will calling from Memphis, Tennessee. Hey, Will, welcome to the show. How are y'all doing?

We're doing well. How can we help? Well, my father died in 2021, and we're getting around to selling his estate deal now. And we sold a minority interest in a company he had, and he didn't have a will. And so when that money comes in, it'll be divided by four. And each kid would roughly be sitting at about $300,000 in an inheritance. And I just want to get advice on how not to squander the opportunity that I do have. Will, we're so sorry for what you're going through. That's a lot to process. How old are you? 19. Wow. How old was your dad? 66, I believe. Oh, man. How's the family doing right now?

Well, last year was a rough one, but it's getting better. Yeah. Where are you at financially? I'm doing pretty good. I have no debt. 19, my income's anywhere between 35 and 40 a year. What do you do right now? Well, my father owned a couple of the Sonic drive-ins, and I was working there trying to go into that role. And now I've lost a passion for that, and I'm trying to pursue real estate as my career. Do you want to be a real estate agent? Yes. Okay. So right now, I mean, you've had some time to think about this money. What is kind of

your dream and vision with this money? Well, I know I can get a head start on investing in the whole deal. And I mean, I know I can take a little bit of it and enjoy it, obviously, but because that's what he would want me to do. But it's just, I don't know. I've never been good at managing money for the most part. And this is a large sum of money. Well, that self-awareness is so important. And I'm glad you have that. And the good news is we can move slow. We don't have to make any rash decisions in the next few months. When is this money actually going to be sitting in that account? I think we're sitting like a month away.

Okay. Well, I would let it sit there until you know what to do next. Luckily, you don't have any debt. Do you have any money in the bank currently in savings? I've got about $5,000 in savings right now. Okay, awesome. So I would look at fully funding your emergency fund. That $5,000 is a great start. It may look more like $10,000 for you for three to six months of expenses. Are you renting right now or are you a homeowner? I'm still with my mom doing some online school. Okay, cool. So we're not in a spot where we're needing to go purchase a home. Do you have a reliable car?

Somewhat, yeah. Okay. So maybe we allocate a small portion of that to upgrade to a used car that we pay for with cash that is, I'm going to say, less than $15,000 in your position with your income because we don't want too much of your life tied up in that depreciating asset. Okay. And beyond that, you want to start building what we call the dream team. And so when you have a large sum of money, now we have to look into insurance. So you need a good insurance agent. You're going to need a good investing professional. You might need a good estate planning attorney, and you might need a tax attorney. And when it comes time to buy a house,

you're going to want a great real estate agent. And so with all those together, you can find a lot of those at ramsaysolutions.com and click on Ramsey Recommends to start assembling that team. But they will help with the heart of a teacher guide you through this process to help you make the most of this money and protect it this process to help you make the most of this money and protect it too, right? You want to protect this wealth that was so generously left to you through your dad's legacy. Yeah, and Will, we're going to get you into Financial Peace University as well. You mentioned that you're not good with money, but the fact that you don't have any debt and you've got $5,000 in the bank, I actually think you're better at money than you

realize. And going into this new season of your life, having this large chunk of money, we want you to learn how to build wealth with this money. We want to see you take this money that your dad left you and honor his legacy, you know, building wealth and really getting you to an amazing financial situation. So hang on the line, Austin's going to pick up. I really believe that this is going to be something that you can invest well, you'll steward it well. The fact that you're even calling today just gives me great hope for what you're going to do with it. Sorry about your loss, but we are with you. Our hearts are with you, Will. All right, next up we have Lily calling from Raleigh, North Carolina. Hey, Lily, welcome to the show. Hi, thank you for having me.

Yeah, thanks for calling. How can we help? So we just started the Baby Steps and we're on Baby Step number two. And I start student teaching in August. I'm currently a stay-at-home mom. So I was just curious, how do I go about paying off my debt as well as being able to afford child care to get my degree? So what is your household income right now? It's we take home about thirty two thousand, but we don't have to pay rent because we live

on a military base. Oh, great. I breathe a heavy sigh a little bit because of childcare. Man, it's a lot. I was talking to a team. I mean, it's like a mortgage payment every month. Yeah. I was just talking to a team member yesterday,

and she was touring a daycare, and it was literally the cost of some people's mortgage. So do you know what child care would cost? Based on my calculations, about between $5,500 and $6,000. That's for the whole time I'm student teaching. Okay. And will you have any income while you're student teaching? I will not be able to make anything, no. Okay. And what about your husband?

Yes, he will be working. It'll be about $32,000 for the year. Is he working full-time? Yes. Is he able to do more work on the side? I'm not sure. He's active duty military, so... Okay. Well... He'll try. With the student teaching, is this something you could take a pause on while we pay off the debt?

The school says I have to complete it within one year. Okay. How much is the debt total? $38,000. All right. I'm going to try to sell everything we can. If there's a car that can be sold because we're not using it, get rid of that. But we need to find some way to bring in some income to cover these bills. And even if you work odd hours where it's like, you know,

whenever your husband's home sleeping with a kid and you can go out and take a night job, I know it's not easy and I know that that's not going to be fun. But if it's just for a season, I know you can power through that. That puts this hour of the Ramsey Show in the books. Thanks for listening, America. Thanks to the guys in the booth. We'll be back soon.

Hey, George Campbell here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to RamseySolutions.com today to sign up for the newsletter. Again, that's RamseySolutions.com to sign up for our weekly newsletter.