The Ramsey Show - App - Should I Use My Savings To Pay Off Debt? (Hour 2)

Episode Date: March 24, 2023

Ken Coleman & Rachel Cruze answer your questions and discuss: How you can get 4 meals for $43, "Should I use my savings to pay off my student loans?" Starting a part-time business to pay off debt, Getting out of an upside down vehicle. from the blog: How to Get Out of an Upside-Down Car Loan Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: 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 POTS moving and storage studio, this is The Ramsey Show. It's where we help you win in your life, specifically your money. And then we look at the work angle and the relationship angle to the central money issue. So excited that you're with us. I'm Ken Coleman. I'm joined by my colleague, Rachel Cruz. We're here for you this hour taking your questions. I specialize in those work-related issues that affect your money.

And then Rachel is our money expert. And let's be honest, fashion, home economic tips, menu items, cooking on a budget, anything mom related. She's really good at that too. 888-825-5225 is the number. And speaking of, I don't mean to stir things up. Yes, I do. I follow you on the gram. The old gram.

The old Insta. The old Insta. The old Insta. And recently, you put something out there of our beloved Chick-fil-A. We all love Chick-fil-A around here. Oh, yes. But you told a story about you and Winston and the kiddos, and you went to Chick-fil-A. And I believe the bill for all five of you might have been over $40, if memory serves. Yes, correct.

And you just were like, wow, a little bit of sticker shock that's inflation in real world sure yeah and i understand that you got lit up yes well it was actually you made some controversy oh it was on the show you said we were here me and jade right we're hosting the show it was a week or two ago and we were talking about saving money and um how much things cost and I said, yeah, we went out to Chick-fil-A. We usually go to Chick-fil-A on Tuesday nights. Oh, is that a thing? Yeah, because Amelia has gymnastics and it's kind of our routine.

It's one of those things you do. And usually I load my Chick-fil-A app with money. So I just go and scan it when I drive up to make it easy. Well, this one, I didn't have money on the app. So I had to actually like reload it. And then I just realized the total. And it's probably been like this for a little bit. But again, it just hit me that day for some reason.

It was $41. And I was like, man, $41 for three kids meals. I got an adult meal. Winston just got, I think, just a chicken sandwich. So again, this isn't hating on Chick-fil-A. I was just saying that's $41. And I said here on the show, I could make four to five meals for $41 that could last us four. Oh, boy.

Did you get lit up? People were pissed at me that I said this. So why do you think that is? Before we get into the details of it, because you actually prove it in an Instagram. I do. I'm going to pull this up now. But we're going to get to that. Yes.

Because she's going to actually prove the haters wrong. But before we get to that, why do you think it was such a visceral reaction to saying that well and i was kind of being facetious anyways i just kind of threw out a number i was i wasn't like in my head had this calculate calculated so if someone just said to me you can make four meals for 40 i may even be like really can i i don't know because i just know my grocery bill every week it's like anger but they and so i, and it went into everything from clean eating to, I live in California, to, I mean, everything you could imagine. And I'm like, yes, food is expensive.

And food is a hot button right now in general. I get it. Even the grocery stores. I get it. It's just life is expensive. Yeah. But I know, I mean, I meal plan. So I'm like, I know what I can make.

I can make some cheap meals. So this is the post that i saw so i kept just watching these comments come in and i just finally got tired i usually don't get too stirred up by the gram and it started pissing me off because i was like this isn't true though like like everyone's like you're this woman's crazy i'm like no i'm not you actually can't do this. So I went on Kroger Clicklist that night. I saw this. Laying in bed. Lay this out. This is great.

Pulled my notes app up, and I'll say, I'm going to get on Kroger.com right now, and I'm going to research all this. Meal plan for $40. Yep. Okay. What'd you come up with? And I got you four meals, Ken. Are you ready for this?

I'm very excited. Here we go. Okay. So you buy a pack of meat. Pack of meat. Ground beef. Yes. Now, these meals are not elaborate. And they're not vegan either. No. And they're Here we go. Okay. So you buy a pack of meat. Pack of meat. Ground beef. Yes. Now these meals are not elaborate.

And they're not vegan either. No. And they're probably not clean. Whatever. Whatever. This ain't clean eating. This is what we eat in America. You know, it's that kind of thing.

And this is for our family of three little kids. I get it. I have 16 teenagers. I'm like, okay, I'm sorry. Okay. I don't know what to do with that. One pack of ground beef. And you cut it in half.

Okay. Put half of the meat, ground it up, put it in half Okay Put half of the meat Ground it up Put it in a jar of spaghetti sauce Boom A jar of So that Let me try One jar of spaghetti sauce

So six dollars for a pack of meat Okay Get a jar of sauce For two dollars That's the cheap sauce Cheap sauce Just go Kroger brand This is just

Yeah We're just putting I'm down And then you buy noodles You can buy A hundred pounds of noodles There's a box of Kroger noodles for a dollar Penne noodles

You got you a big old bowl of pasta right there And your kids are fine No, no, no, I'm sorry That's 9 bucks So we're going to take the same The other half pack of meat You're going to ground that up Salt, pepper, all the things And you're going to ground that up, salt, pepper, all the things.

And you're going to get tortilla shells, $3. $3. Mexican cheese for $2. A shredded cheese. Okay. What else? A black beans for $1. A can of black beans is $1.

And rice is, I found $1. A thing of rice for $1. So I got seven on that one. Did I get that right? Okay. So you make quesadillas. Yeah. Cheese quesadillasillas Cheese quesadillas

Throw some meat in If you want some meat in it And then you got rice and beans I don't want to poke holes in this But like you have little kids Half a pound of meat You're the teenager No that's the cheese

Cheese quesadilla people I know but I'm just saying You've cut one pound of meat up into two And I'm just saying I see where the criticism starts to come in Okay well no But the the kids are gonna you're still right the cheese quesadillas are gonna be for the kids are gonna eat the cheese and if you want to sprinkle some meat for a little bit of protein dad needs the meat okay you take the meat you take the meat i'm just trying to keep it real i mean i know i don't eat cheese quesadillas in our house that's a meal

okay all right so that's people bucks People are going to Hate this segment I have a feeling Already people are going To be like Oh my gosh They're going to love it You're right by the way Okay so then you're

Going to get some chicken For the next meal $7 Chicken for $7 Okay Yep And then you're going To be Sharon Ramsey

Open up your spice cabinet 100% Put some spices in there Sure Why not If you have any lemon juice A little garlic salt Yep

Throw some Olive oil All of it Marinate the chicken Okay Get some naan for $3 Hummus for $3 A tomato for 50 cents

Green onion for $1 And then another box of rice For $1 Okay So you're going to do a Greek bowl Yeah So you're going to do the rice at the bottom Chicken on top

It's impressive Hummus Naan It can be done And then you're going to take your tomatoes And your green onions Slice them all up in a bowl Put the same olive oil on with salt and pepper,

a little bit, if you have any red wine vinegar in there too. Yeah, it's great. Okay. And then pizza dough. Two things of pizza dough for $7. The rest of the cheese from the Mexican, and then another jar of sauce for $1. You've got two pizzas.

So we've got it on the screen. Those are four meals. So we have it on the screen for our viewing audience. I was trying to keep up with it with the old pencil. There it is. All of that right there, $43.50. Now, for those of you vegans out there, I'm sorry. I know. You just are going to have to spend more money because of your desire to eat clean. And then here's the deal too. Get romaine lettuce. You can get three romaine hearts for like, I don't know. I'm scared to say a price because everyone's going to get mad at me. $3. Cut it up in a salad.

You can get some fruits and vegetables. Frozen vegetables is like a dollar for a bag of frozen broccoli. So here's the takeaway. You can do this, y'all. You can do this. So as the dad who doesn't pay attention to the grocery list, let me tell you what I'm taking away from this. You're making an actual real point to say, unless you've got some really intense dietary needs or some choices you're making,

you can eat for less. And this is real budget stuff because people spend hundreds and hundreds and hundreds of dollars on groceries. And out to eat, and that's it. Don't go out to eat if you're struggling. It can be done. Now, this is for a season, but hey, don't get me started on leftover spaghetti. If you buy enough of the noodles, you could make two meals out of spaghetti. Okay, then throw in an extra buck and get another box of noodles, you know, for another dollar. It can be done. It can be done. Great stuff, Rachel Cruz.

She's got you covered. You bet. All right, folks, now the controversy and dissension is done. More help on the way. Relax. Take a shot of the Sig. We'll be back. This is The Ramsey Show.

All right. Welcome back, America. You've joined The Ramsey Show here. I'm Ken Coleman. I'm joined by my colleague, Rachel Cruz. And, well, it's Friday, Friday Rachel do you have any Friday traditions in the Cruz household it's usually pizza and movie nights nice yeah at the old Cruz household yes well there's not a better way to start off the week than by setting yourself up for success with

your money the fun way how about some tickets to our final Building Wealth live events of the season? You can catch me, George Camel, Rachel Cruz, Dave Ramsey, and wait a second, it's just you and George and Dave in Salt Lake City. Sorry, I got ahead of myself. The Salt Lake date is you and Dave and George and Jade Warshaw. That's April the 24th. And then I got ahead of myself, Anaheim, California. I'll be out there with Dave, Dr. John Deloney, and Jade Warshaw. So we've kind of split the crew up.

This has been a fun tour. So you're heading to Salt Lake. I don't mind telling you, I'm glad to be in Anaheim. I like LA. I know. You're in Salt Lake. Salt Lake's a beautiful city. It's great.

It is. It's wonderful. LA's great. Y'all did Austin. We did Austin together. Indianapolis. Yeah, yeah, yeah. So going to be a lot of fun.

And this is an event that is going to help you learn how to build lasting wealth, the kind that will change your family tree. All the Building Wealth live events this spring have sold out. So we're expecting that to continue. The general admission tickets for these two dates are still available for only $49, and you can get a four-pack of tickets for only $175. Get your tickets today at ramsaysolutions.com slash events, ramsaysolutions.com slash events. All right, let's go to Richmond, Virginia. Kim is on the line. Kim, how can we help? Yes. Hi, Kim and Rachel. Thanks for taking my call. So here's the thing. I'm hesitant about paying my student loan. So that's my question. I'm hesitant about paying my student loan debt.

That's the only debt I have right now. I recently got a promotion and I'm just nervous about just starting. How much do you have? How much do you have left? How much do I have? Leah, how much left in the money she wants? $85,865. Probably 91 cents. Okay. And I have like 20 K saved up. Okay. And how much are you making now in this new job? In this new job? Oh, I'm gross. Like 50 K. Okay. But after like taxes, I probably bring home like 20% of that. So like very. Sure. Yeah. Okay. So yeah, Kim, if I were you, you know, I understand the hesitation of draining savings because you're like, oh my gosh, you know, it feels like there's a huge safety net there. That feels good.

That feels right. And then taking some of that and throwing it at the debt is going to be really hard. But what we've realized over honestly decades here at Ramsey Solutions is the fastest way for you to build wealth from point A to point B is to get debt out of your life and to be so intense and so focused on paying this off. Because as you are paying on your student loans, you're going to continue to see that income, your income leave in those payments, interest, all of it. And so when you have no payments and nothing getting taken out of your paycheck, when it hits your account, you are able to save back that emergency fund, that $20,000 so quickly, you're able to start

investing. You're able to start investing. You're able to start letting your money work for you. But as you keep the student loan around continually, it's just chipping away at your income. And so I understand that it's scary, Kim, but if I were you, I would throw $19,000 at it, and I would take a huge chunk out of it. You're going to have $66,000 at it and I would take a huge chunk out of it. You're going to have 66 left and I would start looking for even another way to possibly get a second job and start making even more than that $50,000. And again, this is for a season, but I would do what I can to throw as much money as

possible at the student loan and get it out as fast as fast as possible so here's my second hesitation i have an older car and like i'm thinking like well what is this it's like a lot of what if yeah yeah absolutely what kind of yeah how what what's the mileage on your car is it breaking down now what what's happening or is it just the idea that it's old the idea that's it yeah just the idea yep which which is understandable and here's the deal too if the car does completely go out in two years and you still have student loan debt then you pause the debt snowball you pause paying off your debt you save up some cash and you go and buy something else and you upgrade and sell the car that you have so you you can do that through this

process um and so things might happen but here's. They might, or that car could last you another five years beyond you being debt-free and have an emergency fund. But Kim, if I could give you maybe a mental hack on this, you've got to look at this a little bit differently and say, okay, if I had some medical emergencies or if I had some things that are happening medically, I've got to take care of me, right? And so taking care of you is getting this debt out of your life. But there are times where things happen, and we can't do it all at once. But to go ahead and start making the progress, and as Rachel said, I can downshift at any time. So when bad things happen, and they do, you're going to have to deal with them. You have to deal with them.

But we don't not take care of another problem because we're worried about another problem that could happen. We address the problem in front of us. And then when a bigger, more important problem happens, we go, oh, I got to take care of it. Right. And so if you had health issues, we would take care of you first. If we have a car issue, we take care of the car first. But we still want to knock this out. And I think what you're going to find and what we found over decades is when somebody gets super intentional and serious about paying off the debt, and you start this thing with big momentum by doing what Rachel told you, a $19,000 payment on this. Wow, that's some serious progress. And now you go, what must I do to knock this out in the next two years? What would it take to knock it out in three years?

And just begin to visualize what progress could look like. Are you married, Kim? No. Single, no kids. No kids, okay. So you're in a really great position, honestly, meaning your time and everything is yours. Yes. So this is the time to get a second job, even a third job.

I mean, go as scorched earth as possible, Kim, in this. Because what also on the other end, when you have no Sally Mae, when you have no payments, no student loans, there's nothing attached to your name financially. What that gives you is a level of peace. That's why we call it financial peace. Then you can't even experience, you don't even know the feeling of going to bed at night and knowing you don't owe anyone anything. Frees up something within your mental health.

It frees something up in your spirit and your emotions where you're just free. But here's the problem is a lot of people, especially with student loans, because they're usually a large amount and they're so normalized that people are like people like oh just keep it around so long it feels like a pet and it's just another thing here at the house and we just kind of keep it and keep on moving and so in order to get it out it's almost like you have to fight that much harder to be that much more angry at it find some anger in there and be like, I am so frustrated and I'm going to spend two years of my life and throwing everything I have at this debt. And then once it's paid off, then Kim, you're like, oh, I have money. Imagine what you can do. I love that, Rachel.

Kim, I hope you heard what Rachel just said. You've got to get mad at that debt because you've got to say, this debt is holding me back from, let's fill in a couple blanks. What is it holding you back from? And then on the other side of this, as Rachel's saying, you're not going to have that payment and you're going to be able to do something with that money that you were spending to pay off the debt. But even more important, Rachel, I find that, Kim, you're going to walk out of this and go, I paid off $66,000 or whatever the number is. I can now save this up over the next two to three years and buy my own house. I mean, once you've come on the other side of that unbelievably difficult accomplishment, it's not just that you removed the hurdle. It's that you know you can do something else

like that, except this time it's not a hurdle. This time it's something you know you can do something else like that except this time it's not a hurdle this time it's something that i desire do you understand what i'm saying kim you've got this you can do this hang on the line it feels impossible but i'm telling you almost that's a great point ken it's it's the financial it's the emotional and it's also just knowing that i can do something hard it's something that feels impossible and that momentum boost and confidence boost is something that i mean mean, everyone can benefit from. So, Kim, we are cheering you on. You can do this. And we're going to get you into Financial Peace University.

Hang on the line. I want you to be around some people who are on a similar journey, going after it. There's strength in numbers. There's strength in community. You need to get involved in an FPU class. I promise you it'll fire you up. Hang on the line. We're going to take care of you, Kim.

You got this. All right, don't move. More of your calls coming up. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman, and I'm joined by my colleague, Rachel Cruz. We're here for you this hour. The phone number is 888-825-5225.

That's 888-825-5225. All right, so it's time for our question of the day. The Ramsey Show question of the day is sponsored by Neighborly, your hub for home services from repairs and maintenance to remodeling and upgrades. Neighborly's trusted home services provide, providers rather, have trained local experts who can handle just about any job. So go to neighborly.com to find and schedule service today. All right, so today's question comes from Christina in Oklahoma. How does an HSA account come into play with the emergency fund? We're currently in baby step 3, and before beginning the Baby Steps,

we had planned to have at least the cost of our health insurance deductible, $7,500 for our family, remaining in our HSA at all times. My question is, should we have this $7,500 for the HSA in addition to the $20,000 emergency fund, or should we consider the $7,500 part of the emergency fund? We have paused contributions and we'll pick it back up again once our debt is paid off. Do we have the option to invest the HSA much like an IRA? What do you all recommend in how we should save and how do you think we should invest our HSA? Okay, lots of HSA questions here. Okay, so Christina, if you guys are in baby step three, so I would just consider

all health and those and all of that for me. I would just put that in your emergency fund of your $20,000. And then I would start to look at your HSA as an investment vehicle. Just like you're saying, you can actually start investing this when it gets to a certain amount and it starts to grow and become another vehicle within retirement. So if you can cash flow your deductible, I would use the HSA more as an investment vehicle than for health. And it's kind of a different way of looking at it. But if you talk to one of our smart investor pros when it comes to all of your investing, because once you're finished up with baby step three, you'll move on to baby step four, I would recommend looking into it because I think it's a great option. And again,

this is great if you can cash flow that stuff out of your emergency fund or even just out of your paycheck. If you just have money there that you're able to say, hey, we can actually just put this within the budget when things come up, health issues come up, it's a great option. So that's what we personally do in the Cruz household. We've used our HSA and fully funded it every year, but you looked at it more on the retirement end

of the spectrum when it comes to investing than using it for health. So it's a great question, Christina. Yes, thank you so much. All right, let's go to Chicago, Illinois now where Juan is waiting. Juan, how can we help? Yes, I'm almost done with my baby step two. I'm not going to be out of debt.

I have about $12,000 left. But I'm a part-time teacher and a lot of my students have told me I should teach my basic computer classes online, because there's a lot of people out there that need to learn how to use computers. I love teaching. I'm passionate about it, but I'm not sure how to start my own business with that. Okay. Well, your students are right, Juan. In fact, now is really the best time in our history of our world to truly just go, boom, I'm going to start tutoring or teaching and offering my services online. So the way I would start is I would just do some basic research. I would just do some research to see what kind of competition you might have out there. This is not just related to the Chicago area. Just let's

look across the country and what are people offering for computer tutoring or computer teaching classes? See what's out there. What organizations may be looking to hire people like you? Because you wouldn't believe how many companies are out there looking for teachers who can come in and be a part of their roster, if you will. So I would look at both sides of the aisle just to get an idea of what I can make. And that's going to take a lot of the intimidation factor away. But as far as starting it goes, it's as simple as once you figure out what you would teach and how, so what you would be offering after you've done that research, this is just you telling your students to spread the word. This is you going on your social media platforms, whatever you're on and going, hey,

I'm a teacher and I'm now offering this course or I'm offering this service and just put out your information and you begin to spread the word. And so I think I would look at both pathways, starting it on your own and just putting the word out on the old digital bulletin board, if you will. And even, listen, even old school bulletin board, you know what I mean? I mean, you'd be surprised where you could get some students in your local church if they have a community bulletin board that they actually post, or do they put a newsletter out, or if you're involved in other civic organizations and volunteering at your local health club, whatever. Just get the word out is the point. Don't overthink this. After you've decided what you're going to offer and you got to be clear on how much it costs

and then get the word out. Don't overthink it though. But I would look at that other pathway of are there organizations that are just looking for teachers to raise their hand and say, yes, I can teach. Because that might be the easiest pathway because now you're not worried about the funnel you're just okay i'm getting paid for my time and i'm paying off debt that's exactly right and there are a lot of uh websites too that's yes that you can actually put your name within it and you may have to pay a small part of your fee to them but it might be worth it too on that end because you're going to be able to have yeah a huge funnel of clients that you're not having to do the heavy lifting. Yeah. So Juan, I love this. I love the intensity and I love that you want to get out there. And this is just an encouragement to a lot of our audience that may be new, listening or viewing. Rachel, we are in this gig economy and this

freelance economy and it's booming where companies, organizations are looking for people who have an expertise and a skillset and they're okay paying you as a contractor to deliver. So those of you that are trying to get out of debt, I would be looking at what can I do at home at nights and on the weekends based on my current skillset. You'd be surprised what is available to you out there because we've got this opportunity in America now. We have more jobs open than we have people who are unemployed. So please know, if you just go look, you might be surprised at what you can find. Let's go to Aliana. I hope I'm saying that right. In Anaheim, California. How can we help? Hi. Yeah, you said it just about right. It's Aliana.

Aliana. All right. I'll never mess it up again. What's going on? So I'm pretty horrible with money. I've attempted the baby steps. I think I'm in like negative three baby steps. But so basically what's going on right now is I had a slip and fall accident at Target about two years ago. Oh, no. And my settlement's about to be coming. And I kind of got some news that when I was doing my own research, the lawyers weren't giving me any, like, money, like, demand information. So I did my own research, and I estimated I'd get about, like, 10, anywhere between 10,000 and 40,000. And I talked to my lawyer last week and they said that how they do it is they ask for the full demand, like the

full price that their insurance caps or something like that. So there's less wiggle room. So they're going to be demanding $5 million. Not to say I have a five million dollar case but it definitely probably ups substantially what I thought I would be getting and I have no idea what I would do if I even got a hundred thousand dollars okay and I'll probably be getting that money within about a month to two months from now. Did you win the case? Yeah. They basically said, like, they're just going to send the demand, and then they negotiate, and then I get the check.

So they're settling. Target is settling with you. Yeah. Yeah, Target is settling. Okay. What kind of debt do you have? So I have $55,000 in debt. Okay. How's that's that broken 46 of that is in school loans okay about broken up into 15 different loans okay and then about like nine thousand and between loans and credit cards okay all right so here's here's the overarching red

flag that i have for you is that people think if I could just get some money, my life is going to clear up and everything's going to be fine. But the problem is you take you with this big pile of money. So if you're not great with money and you get a pile of money, you're going to be really not good with money on a bigger scale. So your money habits are going to be really important. I would immediately pay off this debt, immediately put things in savings, do not go out and impulse buy. So you hang on the line because Emily's going to pick up and I want you to have a copy of my book, Know Yourself, Know Your Money. And I want you to start diving into understanding how you are wired and start having good money habits because, again, bad money habits will be magnified with a lot of money. Yeah.

Thank you for the call. You're going to get through this. Hang on the line. Get the book, read Thank you for the call. You're going to get through this. Hang on the line, get the book, read it and do it. You got this. This is The Ramsey Show. All right, America, welcome back. You've joined the conversation here about your life, your money, your work, your relationships. This is The Ramsey Show. I'm Ken Coleman. Rachel Cruz is my colleague, and she joins you this hour.

The phone number to jump in is 888-825-5225. That's 888-825-5225. Tyrell is on the line in Philadelphia. Tyrell, how can we help? Hey, guys. I hope all is well. It is well. Thank you. I'm reaching out because I work as a property manager and I have a few side hustles that I do as well. I have a vehicle

that I purchased and it was probably a stupid purchase, but basically I owe $39,000 on this, on this Jeep. It's a nice Jeep and And it's worth about $29,000. So I'm upside down about $10,000. My uncle believes... Sorry. No, go ahead. You're great. I'm sorry, Tyrell. Go ahead. My uncle believes that I should...

I also have some money coming in. I work as a realtor. I have some bills that I'm closing. And I have about, say, about $15,000 coming in soon. And he believes that I should just pay off my lower debts, refinance the vehicle to get a lower note instead of paying the delta and getting the Jeep completely off of my credit. Okay. So what other debt do you have? So I'm in the hole about $79,000 total. Okay. And that's, I have four cars total, three of which I rent out on Toro. So they actually make some money. I have about another,

everything else is pretty much credit card and home improvement. Okay. Can we walk through this really quick because I think this will help us. Of the three other cars that you rent out on Turo, I'm assuming you owe money on all three. Is that right? Yes. Can you walk us through that? Let's just say car number one, you choose what that is. How much do you owe on that and what is it worth?

Okay. Car number one on Turo, I have a Chevy Malibu. I owe $13,000 on that. It's worth about $8,000. And then I have two Nissan Versas. They're both about $9,000 and they're worth a little bit more than that, actually. And last but not least is my personal vehicle, my daily driver, which is my Jeep. I owe $39,000 on that, which is only worth about $20,000. And how much do you make, Tyrell, a year? It varies, but last year I made $100,000. $100,000, okay. Does that include the Turo side income?

Yes. How much are you making a month on all three of those cars together, round numbers on the Turo cars? Monthly on the Turo cars, I'm making roughly about $2,500. What are your car payments on the three combined? About $600 combined. Okay. All right. I wanted to gather that information. Rachel, what are you thinking? Okay. So Tyrell, here's the deal. We said this in another segment and it's just the truth. What we have found over three decades of doing this

to create wealth, lasting wealth, the right way, from point A to point B, one of the biggest things you can do is eliminate debt and not have any payments. And so when I'm looking at the Turo stuff, and you're like, yeah, I took out loans to get these cars because it's kind of a business thing. It's a side hustle.

So I know you have the motivation and the wherewithal to make money. You're like, I want to be doing some stuff. But with all of this debt flying around, it, it is sucking not only your energy, but also your income and what you're doing. So if I were you, if I woke up in your shoes today, well, before I do the whole plan, you had a, you said you had a home improvement loan. What was that for?

How much? It was when we bought our house a few years ago the hvac blew and they put it on what looked like a credit card it was frankly big but i owe about uh four thousand on that right now four thousand on that okay so honestly tyrell i would sell the two nine thousand you said you can make some money off that maybe you make you know i don't know three four thousand what do you think those are worth the two nine thousand dollar versus what are they worth they're worth right around uh ten thousand okay so you may walk away with two grand two grand but you just knocked out eighteen thousand dollars in debt yeah do you have any savings uh I have about five grand in savings.

Five grand in savings. Okay. So I would take... And I have a 401k. Okay. So I would pause 401k investing. Do not worry about investing right now. Once you sell the two cars, you're going to be able to knock out the $4,000 with your $4,000 in savings. You're going to have $2,000 left from the two cars that you sold and then i would start working to pay off or to sell the uh the first car that you're not your primary car but the turbo car yeah the malibu for 13 000 um you're that's what you you owe 13 000 you're only going to get you know 8 000 for it but yeah are

you saying we take the 4k out of savings leaving him with a thousand that's his emergency fund baby step one yes and with the thousand you're going to make on the two verses i want to make sure you heard what she said we're knocking out the debt on all three of those turo cars that and the hvac the four thousand dollars okay that's what i was wondering we do the hvac first i would do the hvac first because it's four thousand well then you got that so then you got to work on the the malibu knock that out yep and then you're going to work on that car next and then honestly you know we always say don't have 50 of your income tied up in vehicles and if you can't pay off your primary car in 18 months you may look at selling it and

having to take out a hit of ten thousand dollars of a small loan but if you think you can pay it off in 18 months tyrell you can keep your primary car and that'll be the last thing that you pay off yeah but i would get rid of all this you just have stuff floating around and honestly the the clarity that comes when you don't have all of this stuff that you're you're trying to manage and all of it and you focus on your real estate what you're doing and then even get a side gig that you're not having to go into debt for you could always do that actually I would encourage you to do that as you're paying off this debt but I But I would realign your energy and where you're looking to make money off of debt and look to rewire that to a place that actually is just bringing you in income and not paying

payments. Does that make sense? Yeah, that makes a lot of sense. I really appreciate that. Yeah, I know there was a lot there. Sorry, I hope I untangled that correctly for you. I hope it was a lot there. Sorry, I hope I untangled that correctly for you. I hope it was clear. But the big thing here is

I think you're a really hard worker. I think you're motivated to make money. No question. And I think that if you just channel all of that the right way versus using the bank's money by taking out all these small loans and trying to do this Truro thing, and you focus all of your energy

on actually a side hustle that you're killing it, and you focus all of your energy on actually a side hustle that you're killing it, and you take this $15,000 and you throw it more at your debt that's coming in, that $15,000 that you're going to have for your commission, all of that, all of this is going to be bubbling up, Tyrell. And I think this time next year, you could be completely debt-free. Without question. And working your way towards an emergency fund, having some liquid cash again, and then going back to retirement investing and all of it. Yeah, And Tyrell, our gift to you to get you started,

we're going to get you an FPU. I want you to take it on us because you need to see that debt snowball working for other people at the same time that you're doing it. And then my final encouragement, so hang on the line, we're going to get you an FPU. But I also want to tell you this. If I was in your shoes, I would absolutely get rid of the distraction of Turo. And I would put my efforts into real estate because the upside there is so much greater. And you're entrepreneurial, man. I mean, you've got the drive. I think this is a focus issue. And I think it's a discipline issue. And I think you've learned the hard lesson. It's not worth buying a brand new car. I don't care how cool the Jeep commercial is during the Super Bowl. And believe me, it made me think about it. It got me all patriotic and I want a Jeep, you know, but here's the deal.

Like it doesn't pay off because now you're looking at getting out of that deal. So, you know, I think you've learned the lessons, young man. I think your future is really bright. Let's get you an FPU. Let's give you the clear path and some accountability and some community that you'll get and I think Rachel's right we're gonna look back my friend and you're gonna be a baby steps millionaire because you got the hustle that's right that's a great point about the side hustle Jess if you're already in something like a real real estate that you just make some great commission and you put more time into that you kill it yeah man i love we've got we had some calls uh when was it the last like i guess wednesday when i was on with dave two different

times we were doing the millionaire theme hour real estate agents no college degree yeah everyday millionaires and they're making 300 a year selling real estate i'm like man what a what a what a world we live in those are my people i know required, baby. I don't need a degree to be successful. I don't need a degree to make six figures. I live in America. You know? So there you go. Hey, great hour, Rachel Cruz.

Always fun to be with you, my friend. I want to thank James and the entire crew behind the glass to keep us on the air. But mostly I want to thank you, America. This is your show. This is The Ramsey Show. a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for our newsletter.

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