The Ramsey Show - App - Should You Be Going on Vacation While You Are Paying Off Debt?

Episode Date: May 26, 2022

John Delony & George Kamel discuss: How to talk to your parents about money, Is it a good idea to move in with the in-laws, If company stocks are a good idea, Should you go on vacation while paying off debt, Why you should keep on paying off your student loans, How to build a life after the death of a spouse, 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

I'm out. Live from the headquarters of Ramsey Solutions, it is The Ramsey Show, where America hangs out to have a conversation about just about everything. Your life, your money, your relationships. I'm John Deloney, joined here by my good friend George Campbell, and we are taking your calls on everything. Give us a shout at 888-825-5225.

If you are like millions and millions of Americans who are just struggling, money's hard right now. It's a mess, and it's scary, and it's just a mess, man. I just drove by the gas station. I've got to go fill my car up right after I get off, and it's tough, man. And if you're scared about that, if, it's a mess, man. I just drove by the gas station. I got to go fill my car up right after I get off. And I can, it's tough, man. And, um, if you're scared about that, if your relationships are a mess, you're heading into the summer, um, give us a call. 888-825-5225.

Let's go out to Luke in Denver, Colorado. What's up, Luke? Hey, how are you doing? Good, man. How are you? Good. So, um, my question is, um, I have I have a question, basically trying to make my parents understand a financial question. So they know your baby steps, but they have come into an inheritance,

and I'm trying to help them understand that it's better to pay off their house rather than leaving all the money in the stock and 401K. So that's kind of my question today so the great will smith once said to take it from him parents just don't understand and it's going to be hard for you to do this man george can walk you through the math part um tell me they understand the baby steps or let me just back out you're not going to help your parents understand this unless they ask for that sort of wisdom from you um have you sat down and said hey hey, I think this would be the wisest thing? Or, hey, y'all know the baby steps have worked for y'all.

Here's what Dave and his team say about what comes next. Have you had that conversation? Yeah, I've had a small conversation with him. Mainly just my dad thinks that he can make more money in the stock market. I just think that he's in sales, and so he gets really stressed out. And I think it's more of an emotional thing for him to finally pay it off. I'm just worried about him, you know. Dude, he's lucky to have you.

He's lucky to have you. George, what do you think, man? Well, I go back to PBS, powdered butt syndrome. Parents don't want to hear it from the kid who, you know, they changed your diaper, man, and so they're going, this kid's going to give me financial advice? I don't think so. So I love the heart behind it, and, yes, you can show them math all day long, and truthfully, your kid's going to give me financial advice? I don't think so. So I love the heart behind it. And, yes, you can show them math all day long.

And truthfully, your dad's doing the math on paper. He's a sharp guy. He's going, I can make way more on my investments. But you just told me he's stressed out. What's he stressed about? Well, it's just, you know, he's in sales. And so I think anyone knows how that goes. It's just very stressful sometimes.

And I think that paying off his house would alleviate some of the stress because I can see it sometimes. How old are you, Luke? 20. 20? Okay, so I don't have any fancy psychological studies or anything to tell you. I'm just going to tell you what I would do if I was you. I would take Dad out for coffee or for a donut or something,

and I would say, hey, I'm just going to say this one time, and then we're going to go back to everything's the way it was. And he'll look at you kind of weird. And I would tell him, hey, since I've known you, you've worked really, really hard and you've been, uh, you're a great salesman and that comes with a lot of stress. And there's been seasons when you've been really stressed and you have an opportunity to take a huge chunk of that stress off your plate forever by paying your house off. Yeah.

And I know you think you can go time the market and make good money. And now it's just not stock markets on sale, so we're going to dump all this money in there. I get that. Dad, you're going to be able to breathe if you pay your house off. That's why millions of people do it. They get out of debt, and then they go chase the market down and try to make money in real estate and investing. But I'd have that conversation and

say, Hey, I'm 20. You literally have wiped my butt dad. And you don't want to hear it from me. I love that George PBS. I'll have to keep that in my back pocket and let that be the end of it. Okay. But here's what we're doing. We're not trying to sell them on the math. We're not trying to sell them on because there's this magic plan. We're selling him on, hey, I see you, Dad, and I love you, and you got a shot to be less stressed for the rest of your life. And that's a totally different approach. You hear what I'm saying?

Yeah, no, it definitely makes sense. That's definitely good. Luke, could he wipe out the entire mortgage with his inheritance and still have money left over? Oh, yeah. I mean, I can give you the numbers if you'd like. Sure. I'm just curious. Yeah. Yeah. So my, both his parents both died in succession a month apart. Um, but, uh, they, they, uh, they, he's getting 1.6 million, um, from everything. Wow. And, uh, he's worth,

he has about a million dollar house and about a million dollars investment. He did tell me that. So he's like, I'm fine. I can invest this in the market. And he only owes about 120,000. I just think he said that he can just make like 30 or 40 grand more on the, if he has eight years left on his mortgage. Gosh, dude, pay it off, man. This is such a small percentage of the inheritance. Of everything. It's a small percentage of what you got left. He's going to be fine. I mean, he doesn't need the money for retirement. Yeah, exactly. I mean, he's in good shape. I just don't understand it. He just thinks he can make more money in the stock market. How old is he? He's 51. He's got plenty of life left, plenty of work and career left. So I'm just going, how much life does he want to live in between

retirement where he would have that mortgage payment freed up to do who knows what? To give more, to go on vacations, to be a blessing to the family and whoever in his community. So I look at it through that lens too. But listen, I'm a Ramsey guy. I can't convince my own parents to pay off their house. And so now if they had $1.6 million sitting around, it may be an easier discussion. But at the end of the day, he's going to be okay whether or not he pays off his house today or eight years from now, he's not broke. And so that was my question. If this guy's broke, it's a different situation. Yeah. All right. Let's go

to Anthony in Jacksonville. Hey, Anthony, what's up? Hey, hey, thanks for having me on. I just had a few questions for some advice. Go for it. Okay. So, uh, I get out of the military in the next few months and my wife and I, we bought our house a few years back for 150,000 and we plan on moving back to my home state of Mississippi. And so we're trying to determine if you think it would be a good idea where we have the opportunity to sell it right now for 260, which would pay off all of our debt. And we could move in with her mom for the, my remainder that I have. So about five or six months where we wouldn't put, uh, we wouldn't have to pay, uh, any rent or anything until we start looking for a new home in Mississippi where it's a lot cheaper than here in Jacksonville. My rule of thumb is generally if there's a period at the end of that

sentence. And what I mean by that is we're going to sell our house, we're going to cash out right now because the market's still bonkers, and then we're just going to move in with my parents and we're going to figure out what comes next. That's when relationships get melted down because that one month, we're just going to be here for a couple of months, turns into two years, turns into why are you leaving? It's a mess.

You saying, hey, we're going to cash out. We're going to get completely debt free. We're going to do this for five months and then we're heading back to another part of the country where we want to make our home outside of the military. Dude, I think that's great, man. What do you think? Yeah, I like this plan.

You said four or five months, and then you said we're going to start looking. So I would start looking when you move in and start to get a feel for do we have enough money, what kind of house, what area, start making plans at that point so it doesn't drag on. And, Anthony, we've done this enough. Let me tell you what would be a real gift to you, your wife, and your mother-in-law. Sit down, take them to a nice dinner, and wife, and your mother-in-law. Sit down, take them to a nice dinner, and sit down and say, okay, let's come up with all the

rules. When do you want to start? And I'm being serious about how late or early do you want to end the house? Does it make you uncomfortable if people are coming and going after midnight? I'll make the coffee. I'll take care of the lawn.

Go ahead and set all that stuff up so there's not any weird tension on day one when you all move in. And you are going to have to work, my brother, because you're used to living with a bunch of knuckleheads. And now you're moving in with your mother-in-law. So you're going to have to level way. You're going to have to shower every day probably. All right. Thank you so, so much for your service, my brother. Congratulations on being debt-free.

We'll be right back on The Ramsey Show. Did you know, statistically, when it comes to life insurance and protecting your family, that women are more likely to be uninsured or underinsured than men. This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women,

which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available. You can compare rates online at Zander.com or call 800-356-4282. This is something every family has to deal with. That's Zander.com or 800-356-4282. This is The Ramsey Show. I'm John Deloney, joined by my good friend George Campbell, and we're taking your calls on money and life. It's 888-825-5225. It's 888-825-5225. Let's go to Greg in Boise, Idaho and most beautiful places in the country. What's up, Greg? Ooh, I agree with that a hundred percent. Um, so here's what I've got going on. I'm in baby steps four, five, and six, uh, starting a new job in a week. And the new job has a quarterly, um, option to buy into the company stock at a 10% discount. Do you take part of your 15% of your investment

portfolio and allocate it towards that? Or if I want to take advantage of that, do I need to find money in my budget to throw at that? That is not part of the investment strategy of the 15%? Great, great question, Greg. And that's awesome that you're even thinking about this stuff. How old are you? 34. Okay, fantastic. Well, if I'm in your shoes, I'm investing 15% into the 401k. Beyond that, if you want to play with some money with the employee stock program, I'm okay with that. We're not huge fans of it because essentially you're investing into a single stock at a slight discount. And so we don't know the future of this company.

John's got a very personal story about his mom. Greg, my mom worked for Enron. Oh no. Yes. And we didn't have a lot of money growing up but it wasn't that she had a ton of money in there but we did have a number of family friends that were high up in that company who went to bed multi-millionaires and woke up literally with with nothing. Right. And so I've got a, I've got a personal, uh, it buyback stock plans or discount of stock plans, um, on the backs of it's kind of, I feel like it's like me talking to my son who's 12 and being like, Hey, listen, um, I'm going to let you buy shares of your own room. What do you think about that? Right. And it just feels gross to me. But that's not to say you can't make some great money. I don't want to say every company's in-run because they most

certainly are not. So it may work out great for you in the long run. Sure. I just like investing 15% into mutual funds in your 401k because it's so diversified, way less risk than a single stock of one company. So if you said, hey, should I go put all my money just into Tesla? I would say no. So the same applies to your company here. Now, I understand they're at a discount. So if you said, hey, should I go put all my money just into Tesla? I would say no. So the same applies to your company here. Now, I understand they're at a discount. So if you're going to play with this after the 15%, I would sell them after you get them so that you kind of cash out and then you can invest that money. And that way you're going to be better off in the long run. So, and I, George, that's a great idea. I hadn't thought about that. So if you buy the stock with the 10% discount and it, I'm sure it's got some vesting period,

and then you go sell it, you've made 10% on that money every time. Yeah, and there may be some capital gains taxes, so make sure you look into the tax implications of whatever you're selling. But I did this, John. When I first worked at Apple, I was a young buck at 18, and they had a stock purchase program, which was awesome at the time because this was, you know, 2009, 2010. iPhone was hot. And so I ended up selling some stock to get out of debt, which I was very pleased with.

But, again, there's some risk there. Now, Apple is a very – it's an outlier company. Yeah, yeah. Now, I don't know Greg's company, but I don't think it's Apple. Most – and that's – the hard part is Daniel Kahneman wrote about this so beautifully. If you all haven't read the book Thinking Fast, Thinking Slow, it's one of the most important books ever written. But he talks about how it's so tempting to look back and say, if I had just bought Tesla, then I would be a gazillionaire. And you don't think about all of the battery manufacturers or electric car companies that gave it a shot and went and got funding and that we

don't hear about because they don't exist. There's way more of those than there is of the Teslas or the Apples, right? Oh, absolutely. Yeah. And so we're not a fan of single stocks because of the volatility. You're putting all your eggs in that one basket. So I like you investing 15% into the retirement plan and just something boring like a 401k. And if you got money left over that, beyond that that you want to play with, it'd be something similar to, where I'm like, hey, if you lose this money, I put it in and then forget that you ever had it. And if you make 10% minus capital gains- Make the spread on that.

Good for you, man. Good for you. Good day. That's fantastic. I like that. All right, let's go to Palin in Washington. What is up, Palin? How's it going, sir?

How are you doing today? Dude, we're doing fantastic. And yourself? Awesome, man. Awesome. Hey, I just read the, we're doing fantastic. And yourself? Awesome, man. Awesome. Hey, I just read the total money makeover, and I'm fired up, man. I want to do this. Fantastic. It'll do that to you.

Awesome. So my question is, we had some trips planned before we decided we wanted to do this pay off debt and stuff like that. Now, the first trip is here in a couple months, here in July. We're going to be going camping. Everything's paid for. Everything, all the money here in July. We're going to be just going camping. Everything's paid for, everything, all the money's set aside. We're ready to go.

Now, I'm okay with canceling that trip. Just my wife and my kids would be a little bit upset. So, and another thing, we have another trip planned in about 2025. We're just going to go to Florida and see some relatives. Should I cancel these trips until I'm completely debt-free? I'm guesstimating I'll be debt-free in, I don't know, two years. I got about 50 grand in total debt.

So what is your guys' advice? Did you say you're going on this other trip in 2025? Yeah, we're kind of planning way ahead. Wow. Dude, I don't know what's happening next weekend. This guy's next level. I literally don't know what day it is right now, man. I just got back in town, Palin.

I don't know what day it is. John plans on the world ending before then, so he's not planning any trips. Yeah, there's no way we make it to 2025. Well, to answer your question, how much is this camping trip total? So, total probably $1,500. Okay. And you have $50,000 in debt. I'd go camping.

What do you think, George? I mean, here's the thing. If you can make up the $1,500 with some side hustles, I go, okay, we'll let this one roll. It's not going to set you back that much. But if I'm in your shoes, I may go, how do we make this trip less expensive and still do something fun? I'm wrong. I was wrong. Because you've gone camping, how do we make this trip less expensive and still do something fun? I'm wrong. I was wrong. Because you've gone camping, right?

I mean, you did it cheap. I leave in the morning. We're going to go camping. And, Palin, we're going to a KOA, which, by the way, are incredible. There you go for your free advertisement, but that place is one of my favorite places in the world. I don't know how you're going to spend $1,500 camping unless you're glamping or something. I thought the point of camping was that it's cheap. That feels pretty pricey.

Yeah, it's a boat-in camping. It just costs fuel, food. Tent camping is basically what we're doing for about a week. Yeah, and if you do drive a mile or two, that's going to cost you a good $1,500 these days. In a week. So that's probably true. So, Palin, here's the thing. I was wrong.

I think the example you will set for your family, the commitment and passion you will communicate to your family about how important it is to get out of debt is more important than a $1,500 vacation. I do agree with George. That does not mean that you don't do something as a family. I think y'all get a tent or you get a small cabin for $50 and y'all go do a weekend thing together. Y'all camp out in the yard. Y'all go figure out some things y'all get a tent or you get a small cabin for 50 bucks and y'all go do a weekend

thing together. Um, y'all camp out in the yard. Y'all go figure out some things y'all can do locally. But I think this is one of those, um, stake in the ground moments. We're not going on vacation family. Weird. I dug this hole us as a family. We dug this hole and us as a family are going to work like, um, maniacs to get out of this. And here's what you're going to find real quick. You're free from that $50,000. The side hustles and the energy you put into this work is going to magnify into a raise at your job.

You're going to end up in a new job. And you're going to look up in 18 months. You're going to be debt free. You're going to be making different kind of money. And then the vacation you'll go on next summer or the summer after that is going to be something spectacular, right? Okay.

Palin, how much money do you guys have in the bank right now? We have just about two grand saved. So that scares me to go, this camping trip is going to cost us our entire bank account. Yeah. That just feels like a scary place to be. I don't think you're going to be at peace on that trip. So that's part of it.

And obviously you read the books. You're about to be at peace on that trip. So that's part of it. And you obviously read the books. You're about to go full throttle, $1,000 starter emergency fund and start attacking this debt. Can you work overtime and take extra jobs? I can. Yeah, I can do some side hospitals. Yeah. I love it. What I would do is dangle that vacation in front of you. My wife is a stay-at-home mom. Okay. She works 10 hours a week at the local church. Okay. Cool. So this may be one of those shapeshifter family moments

where you and your wife go out and you all go get dinner, you go get breakfast, and you lay this out and say, hey, I read this book and I feel a burden now that our family's chained up to a bunch of different banks and to car notes and to whatever. And I want to work really hard. I want us to work really hard to liberate this family once and for all. And we're going to send a message to our kids that this is who we are. We're going to send a message to our community that this is who we are.

Even if you've got to lose a couple hundred dollar deposit, I think the net, I didn't even think to ask that question, George. You've got two grand, man. You're going to come back with $500 in the bank. This is going to be a way more stressful vacation than it is any sort of restoration. The joy will disappear quickly. That's right. That's right. Yeah.

Get out of there, man. Cancel the vacation and call us in a couple of years when you're heading off to a family cruise, my brother. Woo! If you're a business or HR leader, you know your employers are dealing with a lot. My employee wellness team, Smart Dollar, just did a study and found out that after living through one of the toughest times in history, 60% of employees say that their mental health has gotten worse. Half say their mental health keeps them from doing their job to the best of their ability. Good leaders take their employees' mental wellness seriously because it's good for your team and your business when your employees are healthy

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Alright, George, you got another one for me. So, speaking of anxiety, John, the student loan crisis is still upon us, and the student loan pause got kicked down the road again till August 31st. You know what it's starting to remind me of? What's that? Like, when I was in middle school, and I asked this girl out, and she

was like, maybe. Wow. And so I just hung in there, and then i come back like a couple weeks later like hey uh will you go with me remember that's how i used to ask it back oh yeah and she was like ah maybe i was like okay that's a nice rejection i end up burning my seventh grade year it never happened i never once thought student loan forgiveness and John's childhood love life could ever coincide. It never happened. Wow.

Just maybe'd me all the way into isolation and sadness. Well, it reminds me of how many people have been rejected from the student loan forgiveness program.

That too is like my debt life. It's like my dating life. Well, as you know, John, we scour the internet for the latest and greatest videos. And there's one that's talking about the student loan forgiveness.

Should you pay off your student loans right now? And so I wanted to play it for you and get your take. You good with that? The last few times you sprung a TikTok video on me. Let's do it. Go for it. Roll the beautiful bean footage. Hey, everyone.

I saw this headline today in the news, and I just wanted to kind of talk about it because it is interesting. There's potential to have some sort of student loan forgiveness on federal student loan debt here being announced in the next couple of weeks. So, you know, I myself have actually paid a little over $5,000 this year with interest rates staying at 0%. It's allowed me to make a significant debt in my balance, but, you know, I might not want to keep paying that as we get closer to August 31st, especially if there's going to be some sort of forgiveness. I might not want to keep paying that as we get closer to August 31st, especially if there's going to be some sort of forgiveness. I might switch my strategy. Instead of going right to my student loan bounds, I'm going to put that in savings and then maybe wait and see what this announcement is going to be like. So stay tuned.

We'll keep you up to date, but we'd love to hear your thoughts in the comments and maybe what some of your strategies are right now. Thanks. Oh, I'll give you some thoughts and strategies, John. Well, hold on. I know. Did you just hear the paradox there? There is, but can we just call out most people on TikTok that you've

shown me in the past? Because I don't even know how to log in. We don't give you access, John. It's too dangerous. You can't handle it yet. That guy seems like a nice guy. Yeah. I'm not mad at the guy. He seems like a nice guy. He was commenting on music. Very calming music. I really enjoyed that, actually. Yeah. I'm not mad at the guy. He seems like a nice guy. He was commenting on music. Very calming music. I really enjoyed that, actually.

Yeah, I feel a little bit more at peace. So the article behind him that you can't see if you're listening was from Bloomberg. It said, don't bother paying off student loan debt right now, advisors say. Who are these advisors? We don't know. Why do they want to keep people in debt? I have no idea. But what's funny is this gentleman saying, hey, I've been paying off my student loan debt.

I'm really feeling the progress as I make a dent in the principal while the interest is paused. But I might hold off now to see what happens here. And I think he represents a lot of Americans out there going, well, I'm not going to pay him off because what if, what if, what if. So, George, you and I have just, we've talked about this a lot just privately. My two thoughts are this. One, I am getting – this is just reality. It would be disingenuous to not say this. I do have friends of mine across the country who are in various fields where they've – most of my friends are nerds, no shock, that have their doctorates in or have their law degree that have gotten notice over the last six months that, Hey, we've, your, your loans have been forgiven. Like, and they're gone. Um, it's a very specific type of loan in a very specific, specific type of program, but I hadn't heard

that before. So that has actually happened. The other side of it is it's not wholesale, right? And this idea that this is just going to happen. And I think you and I and Dave were talking, I think this is going to get punted and punted and punted. And they're going to have some sort of small low level. We'll take away 5,000 or 10,000 or something like that with some sort of right around midterms and try to swing something back. Here's the bigger deal for me. I grew up,

didn't have a lot growing up. My wife grew up. She didn't have a lot. We had great parents who worked their butts off for their communities. We just didn't have a lot of money. And we signed up, went to college because that's what you're supposed to do. And then my wife got her master's degree. I got my master's degree. She got her doctorate.

I got my doctorate. And we look up and we had 106 figures in student loan debt, right? I knew we had to pay it back, but I didn't, I didn't get it. And I didn't know what 30 years at $900 a month meant. You know what I mean? I was 18 and then I was 21, but I always had this nagging sense that I signed my name on a piece of paper. And I told somebody, if you help me get through college, I'll pay you back. And they did, whoever they happened to be. And I felt an integrity obligation. Two poor kids who were lower middle class kids who got into it, but we still signed our name to this thing.

And it's kind of like in the nutrition world right now all of the conversations are about um like calories are returning this idea that a lot of a lot of the problems you see downstream isn't because of some fancy diet but you got to get back to thinking about calories that's just what the science is telling us and that's very very very true and if i just eat twinkies every single day because they're 50 cents, that will cost me at some point in my life, right? Even if I look at the calorie density, it's going to cost me. And so we can all clap and cheer that the loans get taken away and we just roll another $1.7 trillion. We will pay for this and it will be really rough what we do.

And so for me in my house, it was about looking in the mirror saying, we did this. We said we were going to pay it off. Do we know we're getting to? No. Are we in a mess? Yes. Was it an awful couple of years getting that stuff paid off? Absolutely. But I walk a little bit taller, right? And I'm not sitting there just waiting and waiting and waiting and waiting. And so I love the first part of that video where he says, man, we've had no interest. This, if there's ever a moment to burn through your loans right now, pay them off. They're not making any money on it, right? That's my take on it. That's a good take. And I as well walked the stage with $36,000 in student loan debt,

not as much as you. And I just thought, I don't remember signing up for this. I remember the conversation with my dad was like this. Hey, Dad, how are we going to pay for college? And he's like, ah, we got it taken care of. What I didn't know was that meant we're going to sign up for student loans, parent plus loans to make sure it's taken care of. And when you're 18, you just go to school going, this is fun. The college experience, I'm not thinking about money.

I don't have a job. The number of T-shirts and dinners I put on student loans, it's just maddening. Mind-numbing. Yeah, it's maddening. So to that point, pay off your student loans. Stop waiting for someone to fix your life, because if that's how you look at student loans, it's probably how you look at other areas of life. Right. Why, this is my problem. I didn't sign up for this. And at what point do we go,

I signed up for all these credit cards, and now I'm in debt. They should forgive them. At what point do we draw the line? And I'll even say this, just because I was so intimately involved in this industry. There are people that were preyed upon, whole groups of people that were literally targeted. They don't know enough. They'll sign up for for this we can get them on the hook and so at its core i'm not even opposed to a like relieving of some of this debt for people we're seeing some of that happen now i've got no moral issue because people were trapped not just even my case right people were preyed upon i was just made an ill-informed decision but you can't pay you can't forgive

the loans because all these students are gonna if we all got our loans forgiven in may i gotta sign up for the summer term in june what are we gonna do and so until you fix the front end of this deal until you sit down and say all right how are we gonna fix the college mess yeah and the cost of college and the value of college? Until we have that conversation, dude, this is, it's like drilling a hole in your bathtub without turning, I mean, it's like. Turn the water off. Yeah, turn the water off first, man.

Oh, man. Yeah. We talk about this in Borrowed Future, our documentary that you're in. Good stuff there, John. Appreciate it. Well, thanks for letting me watch yet another TikTok video. Enlightening you. You're welcome This is the Ramsey Show, 888-825-5225.

Let's go to Luis in Raleigh, North Carolina. What's up, Luis? Hi, guys. Thank you for taking myigh, North Carolina. What's up, Luis? Hi, guys. Thank you for taking my call. Of course. What's up? So, for starters, I'm a handyman. So, I make like $32,000 a year.

And, you know, I don't know where my money is going. I don't know how to budget. And so I was married, and my wife passed away last November. Oh, man. What happened? Hey, hold on. Luis, Luis, Luis. Can I just tell you, brother?

I'm so sorry. What happened? It's a good, uncreative cancer oh my gosh yeah so how long um well she she fought it uh for two years you know the first years you know she did the chemo and radiation yeah she also had a the surgery the whipple yeah with the removed part of the pancreas and uh she was doing good and then you know she was yeah we told her she wasn't in remission for good you know and all of a sudden it just come back but stronger i'm so sorry her body kind of wasn't able to take it yeah i'm so sorry brother all right so since november

and um here you find yourself so what's up yeah yeah, you know I mean it's been rough but you know she's with me always I can feel her spirit all the time Alright so what's up? So we had a house so we ended up selling the house and so now I got

so basically yeah so I made $32,000 a year I always I used to spend the money I don't have no savings So basically, yeah, so I made $32,000 a year. I always seemed like I used to spend the money. I don't have no savings. I had a $2,500 CD for six months, and that's all I have on my name. But now I have $32,000 that I don't know what to do with it, and I don't want to spend it, you know?

Why'd you sell your house, man? Huh? Why'd you sell your house? Because I didn't qualify for a mortgage because, well, I don't have a social security number. Okay. So you make $42,000 as a handyman. $32,000. You make $42,000?

$32,000. $32,000. $32,000. $32,000, maybe more because I don't keep track of it, you know? Yeah. So you're making $32,000, but you have $32,000 from the house sale? No, no, no. Well, that was my cut because it was divided by three. Oh, you had to split up the sale of the house?

The money y'all made? Yeah, with the kids. Yes. Okay. So how much money do you have to your name today? This is $32,000. Okay. And $2,500 in a CD,

and maybe another $2,000. The check is still unclear, but with that $2,000, I'm going to pay two credit cards that both are $500 each. How much debt do you have total? That's all, $800. $800 on a credit card? Yeah, yeah. Well, the reason being is because I just use those credit cards when I get a job, and I just buy the tools, the material for the job.

Sure. Yeah. So then once I get paid, I pay the credit card. Got it. Well, here's what I would do. If I'm in your shoes and I woke up today, I would use part of that money to pay off all your debt and then never go back into debt. I want you to cut up the card and switch to a debit card and you can have your clients pay for the materials up front. I just did this with my handyman the other day. They called me from Lowe's and said, hey, what's the card number? And that way he never has to get reimbursed from me. So you could try that route because what I'm worried about happening is you put this money on the credit card and then you hope for the reimbursement,

but then you spend the money over here and it becomes a cycle. Right, right, right. So, hey. And you know, I don't like to take, and the reason I do this is because I don't like to take money from the customers. I know, but hey, listen, Luis. Listen.

Yeah. You're going to have to make some changes. Okay? Okay. There's some things that you don't like doing, like budgets. You don't like sitting. Yeah, I don't know how to do it, though.

No, no, no. We're going to walk you through that. We're going to walk you through it, but here's what I'm saying. At some point, and hopefully that's right now, you're going to stop with any sort of excuses moving forward, and you're just going to start doing things differently. We're going to teach you how to budget, teach you how to budget teach you the materials we do that quick and then we'll send you some some free resources that we're just going to hook you up with you're going to

have to go talk to somebody whether that's friends whether that's community members whether that's a counselor in your community about grieving the loss of your wife you're going to have to choose. I want to do business differently. I want to build a business. In this market, $32,000 a year for a handyman, no chance, brother. You should be making three times that much. And you're worth it. You just have to be intentional about it. So do I have your commitment before we get down this road? Because if not, we can just take the next call. Are you no, no, yes. Are you willing to do things differently? Yes, I do. All right, we got you.

Good. So once we pay off this credit card, we say no more to credit cards, and we don't touch debt ever again. And you asked me what's the best way to spend the $32,000. The best way is to not spend it. Part of this is going to become your emergency fund. And so look at what six months of expenses looks like for you. Are you renting right now? All my expenses on this new place I'm living is going to be $800. $800 a month

total for your expenses? Yeah. Where are you living? Her cousin had a house that needed to be fixed. So we came into agreement. While I'm living there, I'm going to fix it. Is it a safe place to live? Is it a livable condition? It's not. I've been working on it. But yes, it's livable.

Okay. So I'm going to call your emergency fund $7,500 just to be safe. Because one thing goes out, HVAC, you name it, things can add up real quick. So if we took out $7,500 out of that money, we paid off the credit card, that probably leaves you with a little over $20,000, correct? Right, right. Okay. We're going to start using this to start building your life because I'm guessing you have nothing invested. You said you had nothing saved. So we've got to start working on Luis.

Do you have a car, Luis? Right. What was that? You have a truck, like a work truck? Yeah, I got a Pico truck and I have another car. So I have two cars, but my Pico truck is old. Okay. It's just a job truck, right?

Okay. All right. Cool. Yes, yes. Okay, so on the budgeting side, we're going to gift you Ramsey Plus, which includes every dollar premium. That's our budgeting tool that you can use on your phone. You can do this online. It's really easy to set up your budget. And what you're going to do is list out your income on one side and your expenses underneath that. And I want that to equal zero. So if you make,

let's say $3,000 a month, I want you to give every single one of those $3,000 a name, a job. So it's going towards something. It may be going towards savings. It may be going towards upgrading the truck eventually. It may be going towards some basic expenses. Do you have good insurance in place in all areas of your life? Health insurance, auto insurance? Okay, I want you to get health insurance today. Insurance. Okay. That's very, very important because medical bills will bankrupt you if you're not careful. You get hurt on the job, what's going to happen? How are you going to pay for those medical bills with no insurance? Right. So get that in place. Hang on the line. Austin's going to pick up. We're going to make

sure that he gets you plugged into Ramsey Plus. As part of that, Financial Peace University is included. I want you to watch all nine lessons of that because it's going to give you a baseline education on money. And I think that's going to equip you and give you some confidence, some freedom, some control over your situation. Because right now, you just feel lost, don't you? You feel like, I have no clue what to do next. Right, right. And, I mean, I make good money, and, you know, I have more time to make more money if I want to. Good. I think you need to charge more, for sure. Are you charging an hourly rate?

Per job, and sometimes, yeah, about an hour. What do you charge per hour? Per hour, $45. Let's up it. Up it. $50, $60, $75. People are going to be willing to pay that. It's so hard to find good, hardworking, reliable people these days. And hey, listen, we're also going to send you two books, okay? Actually, no, we're going to send you three books.

We're already shipping them here. So we're going to send you a copy of Total Money Makeover. I'm going to send you a copy of the Entree Leadership Book to teach you how to run a small business. And I'm going to send you my new book, Own Your Past, Change Your Future, about dealing with the traumas that have happened and then asking that one scary question, what do I do now? And this book's going to walk you through how to be well, my brother. Luis, we're giving you everything we got. It's up to you to put this stuff into action. Thank you so much. It's one hour in the books. We'll be right back on The Ramsey Show.

Hey, it's John Deloney, co-host of The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, go to RamseySolutions.com slash show.