The Ramsey Show - App - Stop Listening To Broke People! (Hour 1)

Episode Date: January 17, 2023

John Delony & George Kamel discuss: How to get out of debt when you feel lost on your current career path, from the blog: How To Pay Off Debt "How do we buy a house without a credit score?" from the blog: Can You Buy A House With No Credit? and Living Without A Credit Score The best way to figure out how to start investing, from the blog: How To Start Investing: A Beginner's Guide The differences between your emergency fund and sinking funds, from the blog: What Is A Sinking Fund and How Do You Create One? Why you should stop investing when you're in debt and have no savings, from the blog: 40 with No Savings? How To Retire A Millionaire 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, your relationships, your mental health, your work, and your money. I'm John Deloney, joined here by my good friend George Campbell, and we're taking your calls on life and money.

Give us a buzz at 888-825-5225. It's 888-825-5225. Let's go right to the phones. Let's go to Frank in Philadelphia Philadelphia where he was born and raised. What's up, Frank? How are you? How are we doing? I'm doing pretty good, pretty good.

Good, man. What's up? How can we help? Yeah, so I'm about $90,000 in school loan debt. I did undergrad and I also did, well, I'm also currently doing graduate now. I'm about finished with my graduate school. What are you studying, man? I'm studying my master's in business management now.

And my undergraduate was in media studies and production. What do you want to do, Frank, after grad school? I wanted to open up my own photography company, but I'm learning now. As I get older, it's not really lucrative. It's an expensive lesson to learn. It's a $90,000 lesson. Okay, what are you doing now for work? You working full-time?

Yes, I'm working full-time? Yes. Yes, I'm working full-time. I work with individuals with intellectual disabilities. Do you like that work? That's what I'm doing. It's okay. It's okay. It's definitely not something I see myself doing long-term. I mean, I's, it's okay. Definitely not something I would,

I see myself doing long-term. I mean, I love helping people, but that's not something I see myself doing. Why, let me ask you this, um, and know this, like in counseling, the, the, why are you, you never asked that question, but I am asking that question now. Okay. Why aren't you working in business? Why aren't you using that degree that you've paid every drop of blood, sweat, and soul you've got for, why aren't you using that degree that you've paid every drop of blood, sweat, and soul you've got for, why aren't you leaning into how to run a business, how business works, how business doesn't work, the ups and downs? What's keeping you out of that? Because I haven't yet graduated yet. Who cares? Who cares? Have you looked at the LinkedIn, man? Go talk to a bunch of photographers. Most of them never even went to college. They

don't have a bachelor's degree. Yeah. Yeah. And they're running very successful businesses. Well, what's your income right now? My income is about $45,000 a year. Okay. What other debt do you have other than the student loans?

I have $1,000 in student... I have a $1,000 credit card debt, and I also have a $7,000 car loan debt. Okay, and that's it. So you've got close to $100,000 in consumer debt? Yes. Are you single? Yes, I'm single.

Okay, and are you renting right now? I actually own my property. You do own it. So you got a mortgage as well? No, just paid bills. So it's paid for? Yes. Oh, okay.

What's it worth? I think it's about $60,000. I think it's about worth $60,000. The house is worth $60,000? Yeah, about, yes. Wow. And think it's about worth $60,000. The house is worth $60,000? Yeah, about, yeah. Wow. And is this in the Philadelphia area? Is it a mobile home or is it a single family? A single family, a little home. Okay. Well, one piece of this equation is getting your income up because staring at a pile of $90,000 in debt when you make 45, I can understand how you feel overwhelmed. Yeah. And are you making payments on the student loans or are they still

deferred because you're in school? Yes, they're still deferred because I'm still in school. Okay. But this is going to be a rude awakening when these payments kick back up. Yeah. Yeah. Yeah. I know. I know. I'm trying to prepare before it actually happens. I'm scheduled to graduate in January and six months. I know I'm trying to prepare before it actually happens. I'm scheduled to graduate in January. In six months, well, I'm scheduled to graduate in September. And six months after September, I will be paying student loans. So I want to make sure I'm prepared and I'm in the right position so I can pay them off. I love that.

Well, it's going to take getting your income up. Have you already paid for the rest of the semesters? You said you're in it through January? Yes. Yes. Okay, so it's paid for. There's no more student you're in it through January? Yes. Yes. Okay, so it's paid for. There's no more student loan debt you could get into? No.

Okay. Man, there's two things you can do with money. You can spend less of it or make more of it. Okay. And here's the deal. One of the cornerstones to getting well, one of the cornerstones to help changing your mental illness, one of the cornerstones of healing from mental illness, one of the cornerstones to getting well, one of the cornerstones to help changing your mental illness, one of the cornerstones of our healing from mental illness, one of the

cornerstones of getting out of debt is owning reality. Here's where I'm at. Here's the hole I've got. Right. And so, and then deciding I'm willing to do whatever it takes to get out. So working with people with special needs, I've done that for years. It's exhausting and tiring work, right? It's hard. It takes a lot of you. And what George and I are going to tell you to do is either keep doing that job. And then as soon as you're done, grab a peanut butter and jelly sandwich that you've made at home. And as you head to your next job that you're going to do until 10 or 11 at night, and you're going to get up next morning and do it again so that you're making $80,000 over the course of a year, or $75,000 a year, or you've got to find another job where you're working in business,

nearer towards what you want to do for the rest of your years. Do this, Frank. Ask Frank where Frank wants to be five years from now, and begin to reverse engineer that now. Do you want to work for a business? Do you want to do for the rest of your years. Do this, Frank. Ask Frank where Frank wants to be five years from now and begin to reverse engineer that now. Do you want to work for a business? Do you want it for a company? Do you want to own your own place? And if so, you got to learn how business works. Start looking for jobs that are going to get you in the door there and learn how business works. You've got an MBA. You're going to know all about business, but you're not going to know how business runs and works and feels and keeps you up at night and all that until you actually

get in there and do it. Let me ask you this. What's holding you back? There's something that you just won't put the gas pedal all the way to the floor. What is it? Mainly because I don't really

know how to budget money. I don't really know how to budget money. I don't know how to really use money. I don't really know how money works. That's why I watch a lot of Dave Ramsey shows, because I'm trying to learn how to budget my money, how to be effective with my money instead of just... We can help you with that part, Frank. I'm going to gift you one year of every dollar.

That's our budgeting tool, the premium version, as well as one year of Financial Peace University. That's going to give you the money education they never taught you in school. But that's only one piece of the equation. The other piece is you and what you're doing to increase that income. My goal for you is to become debt-free in two years.

But what that's going to take is you making 90K a year and paying down 45 a year. You see the math on that? Yeah. Hustling, hustling, hustling. And by the way, this isn't the rest of your life. You're going to go at a pace for the next two years that you can't sustain for the rest of your life. That's not what we're proposing, but we are proposing that, dude, you have dug yourself a hole and there's a lion in the bottom of that pit and you got to run as fast as you can over the next 24 or 36 months. Are you in?

I'm in. I love it. Okay. Go watch those first few lessons of Financial Peace University. You're going to learn how to budget. You're going to learn about the debt snowball method to get out of this pile. And you're going to call us back when you're debt-free. That's all we ask in exchange for these gifts. Hang on the line. Jen is going to pick up. We'll gift that to you. This is The Ramsey Show, 888-825-5225. I'm John Deloney, joined by George Campbell, and we're taking your calls. Give us a shout. We'll be right back. The This is the Ramsey Show, 888-825-5225. I'm John Deloney, joined here by George Campbell. And we're taking your calls on life, money, mental health, marriage,

whatever you got going on, we're here for you. Let's go to Carrie in Rising Sun. Man, what a cool name for a town. What's up, Carrie? Hi, how are you guys? Outstanding. What's up? Cool. This is so exciting. Okay. I promise it's more exciting for us. I promise. So a colleague that I work with, a nurse, her name's Erica, she recommended that I read The Total Money Maker. And since I read it, I've been kind of hooked and just propelling forward to our future of being debt-free. And I've been sharing with my husband what I've been reading, and we've been applying it.

So in the last six weeks, we've paid off roughly 13 grand in credit card debt. All right. I have another six grand debt and three weeks we plan to pay off, leaving me with, originally I thought it was two loans, but we actually have three loans. So after we pay off this last credit card, I'll have a horse trailer loan, a Jeep loan, and then just paying off our roof loan. George has several horse trailer loans. So yes. If I had a nickel. Yeah. Yeah. So we have a 12 monthmonth plan, worst case scenario, 18-month plan to be debt-free. And then in 18 to two years, we plan on moving south and, you know, taking our horses and opening up a little, a small horse ranch.

My question is, every time I pay off my credit card, I call the company and I have them close the account. I cancel it and then I shred it. But each time I just feel a little bit of the company and I have them close the account. I cancel it and then I shred it. But each time I just feel a little bit of nausea and I wonder, am I really doing the smarter thing? Because I was always raised, and unfortunately I have raised my daughters as well, to think that you need a good credit score to be able to buy a house, to be able to rent, and to buy a car. And so I am kind of backpedaling with my daughters and I'm trying to say, hey, I screwed up here, but let's look at

this. Hold on, hold on. Hey, I'm going to let George solve the... You're mom of the year already. The process. Let me tell you this. And this is a common misconception. This is literally destroying the country. Okay. Yeah. This idea that once I say something, even if I'm passionate about it, I proclaim, I'm going to do this. When I get to office, I'm doing this and this and this. And then I get there and I get behind the curtain and I realized what I said I was about to do is going to make everything worse. Or I tell my son, you want to be a man. It looks like this and this and this. And then I go to counseling for the first time and I realized, oh, I'm the problem. And then I sit down. I'm telling you all, I'll tell you this.

The greatest gift you can give your daughters is the gift of saying, hey, I really believed in this. This is how I was taught. And then I learned something new. And here's the magic phrase. I was wrong, period. All wisdom, all wisdom starts with the words, I was wrong. And I learned something new. On my show the other day, I was telling somebody, giving nutrition advice, which I shouldn't have been doing. And one of the smartest men on the planet, Dr. Lane Norton, called me on my phone. He goes, hey, man, you were wrong. You gave wrong advice. And you know what? I was really grateful because then I could go make it right. Does that make sense? So the greatest gift you give, you're not selling your kids out or kind of jerking around. No,

you are teaching them what wisdom looks like, which is to learn something new, practice it, believe it strongly, go full force. And then when you learn something new, do something different. Good for you. Your mom of the year, as George said, good for you. Okay, George, sorry. Thanks. Okay. So Carrie, I felt the same way when I was getting out of debt because I thought the same, I'm like, well, I got to rent cars. I rent apartments. How am I going to live my life? And then I realized the whole thing is a scam because I went to my apartment with no credit score and they were like, oh yeah, that's no big deal. You just need to pay the first month's deposit. I'm like, oh, okay, cool. And then I went to rent a car and they were like, yeah, cool. We'll just put a $300 hold

on the debit card. And I was like, oh, okay, cool. And then I went to get a mortgage and there's this thing called manual underwriting with a no score loan. And they went, hey, do you have a 12 month rental history and proof that you've paid other bills on time? And they were like, okay, cool. Here's a mortgage. And so it just made me go, oh, my gosh, we've been scammed all along. You don't need a credit score to live your life. And I've got – George, I don't know about you. Carrie, I don't know about you.

When I had credit cards and I would cancel them, I would feel like I was cutting off one of my exit strategies. Like I had 50 different exit strategies in case it all went down. And every time I got rid of a credit card, I felt like I was shutting one big door and like my body felt a little bit like, okay, now we only have 49 avenues to escape if it all goes down and then 47 and then 42 and then, right? And I think it's completely reframing. Debt is the prison you're locked in. It's not the solution to get out. So, Carrie, I'm going to give you and your daughter some homework. This is a fun thing you guys can do together.

Go listen to episode seven of The Fine Print. I did a whole episode called The Dirty Truth Behind Your Credit Score. I literally call random apartments and homes across the country. And I asked them, can I rent without a credit score? And I talked to the mortgage lenders and I say, Hey, what does it look like for me to go through this process of manual underwriting? And they explain it in full. And so I think it will give you a lot of peace and confidence for this plan going forward. And let me tell you what's going to happen. You're going to pay off that debt in 18 months. And once you close all accounts, six to 12 months later after that, you're going to have an

indeterminable credit score. But in that six to 12 months, guess what you're doing? Saving up a fully funded emergency fund of three to six months of expenses, saving up the down payment on the house. And so you got plenty of things to do until that credit score falls away. And then you're going to move into that next phase of your life with such peace and confidence because you're not going to be drowning in payments anymore. You're going to have money in the bank to cover emergencies. So know that you're doing the right things. Okay. Yeah. I appreciate that because I'm always sharing what I'm reading with my husband. My husband always looks at me with such faith and trust and he's just like, are we doing the right thing and i said

according to mr ramsey yes um and so we aren't exactly well it's according to it's according to dave but it's also according to millions and millions and millions of people yeah the proof is anybody anything yeah they owe nobody anything so you are on the right path um george i think it's important to add one thing um And that lead us into this article I got here, man. They might have to say no to some things. If they start their business, they want it to look like this and have all this cool, like handy, like awesome artwork done in the wood and all this. They may have to phase that in over time because they're going to pay at the speed of cash. Right. And so there is going to be some, oh, I wish it could look like this right now, but it's

going to look like that in two years. That's to be part of it right because we're going slow and we're doing it right that's always worth it in the end yeah i mean swimming upstream there's there's downsides it's harder to swim upstream it's a slightly harder to live in a world where credit is put on this pedestal but what you also find is that you have less anxiety and you're worried less about that next paycheck. And that counts for a whole lot more than me playing this game so I can have a quote unquote easy, convenient life. That's right. All right.

So, George, we got this article that Austin handed us. It says over the past seven days, Americans are searching for credit card debt one and a half times more than student debt. And you and I have both seen the numbers. Inflation's at an all-time high. People are struggling financially, yet holiday spending was the highest it's ever been in the history of the planet. Well, think about it. We're more strapped than ever. And so where do we turn to? Credit. Other than credit cards. And what does that mean? mean oh the interest rates are now jacked up to record highs to you know where it's 25 percent interest and you thought

you were going to pay it off next month but then life happened and inflation and the emergency and all of a sudden you're paying 25 percent interest and it's ballooning and so now we're seeing u.s searches for how to pay off credit card debt reached a five-year high within the past month and to my friends who are complaining about how Washington just keeps racking up debt and spending your money, look at your own credit card statements. Look at your own bank notes. Look at your own car notes. George, this is...

Let me ask you this question, because this feels madness to me. Is this credit card debt that is just i mean it's it is insane it's insane one and a half times student debt so at least student debt is paying for an education that's going to take you this way this is paying for a meal you already ate it's really hard to justify that credit card spending. Is this spending to prop up lifestyles, to keep them going as they were? Or is this because eggs, I have to eat? I think it's both. And I think a lot of it is emotional.

And some people are really struggling where they have to turn to their credit cards because they don't feel like they have a solution. And some people are enjoying some retail therapy, John. Just, I'm going to keep my lifestyle up no matter how far my dollar is or isn't going. Stop spending on credit cards. This is the Ramsey Show, 888-825-5225. I'm John Deloney, joined by my good friend George Campbell, taking your calls on life and money.

Give us a shout. Let's go to Diamond in Jackson, Mississippi. What's up, Diamond? Hey, how are you? Outstanding. How are you? I'm all right. Excellent.

What's up? Okay, so I have a question. I was recently on YouTube, and I saw Dave Ramsey's growth stop mutual fund tutorial or video. And I have a question. I was trying to open or set an account up or a mutual fund up, and I want to know should I open up the account through a bank or like do an online brokerage? I just did this last week.

So I can tell you what I did, but George can walk you through the traps and pitfalls of certain avenues, and then I'll tell you exactly what I did. So where is this coming from that you're wanting to kind of invest outside of retirement? Actually, like I said, I know it's tax-free. I was looking at the video, and I know he know it's tax-free. I was looking at the video, and he said it grows tax-free. Well, that's for, so if you're investing in retirement, there's something called a Roth, if you have a Roth 401k,

or outside of your employer, you might have a Roth IRA, that keyword there is Roth. And what that means is you're just using after-tax dollars to invest that will then grow tax-free, and you can take the distributions from that tax-free. So that's what he was talking about. So that's not a mutual fund thing. That's the type of account the mutual funds sit in.

Right. Okay, so I can go to any local bank or so and set that up? Well, you could. There's a lot of, you know, there's the big three online that you've probably heard of is Schwab, Fidelity, Vanguard. Those are trusted online ways to do it. But the question behind it is, why are you doing this right now? Are you in a financial spot where you've already maxed out retirement? You're out of debt completely? You have a fully funded emergency fund? Well, yeah, I'm not in any debt. I'm 23 years old, and I just want to go ahead and get started. Awesome. Do you have money in savings? Do I have any money in savings? Yes. Yes, I do. I do. Diamond, you're crushing it, man. You are amazing. Okay, so you have no debt. You've got a pile of money in the bank. Is it enough to cover three to six months of your expenses? Yes. And

then what are you doing for work right now? I'm actually a registered fleet technologist. Cool. I work in Jackson as a registered fleet tech. Oh, can you come to Nashville and help me and George? We need help.

Diamond. So bad. I really can't. Okay, so do you have any retirement options through your employer? Yes, I think I have a 401k set up.

I think they take money out of my check every pay period. Okay. So you've got some homework to do. Figure out what type of account that is and figure out how much you're contributing. If you're following our baby steps, you are at baby step four, where you're out of debt, you have a fully funded emergency fund, and now it's time to invest 15% of your income in retirement. So what is your income? Gross salary. Gross salary. I'd say maybe like 45,000 a year. Okay. So we're going to take 15% of 45,000 and then every month you should be investing that. So that's going to be, let's see here, if my math is correct, that's $67.50 a year. And so divide that each

month, you're going to be investing a few hundred bucks into that account. And so if you just mark your contributions for 15% into that 401k, you are doing all you need to do. You don't need to go to a local bank because here's what's going to happen. You could open a Roth IRA, but that's only if you don't have a Roth option through your employer. Do they have a match? Have you heard about something like that? No, then I'm not for sure. Okay.

Ask your HR team and say, hey, do you guys have a 401k match? If they do, start there. Let's say it's 4%. You are going to invest up to 4% and get that match. That's a 100% return on that money because you put in 4% and they match it with 4%. Does that make sense? Okay. Right, right. And then beyond that, if there is no Roth option with your employer, you can go open up a Roth IRA and fully fund that for the year. That's going to be $6,500. Now, based on your income, you wouldn't quite get to that if you're investing 15%.

Okay. Because the total you'd be investing today is going to be $67.50 a year. But that would put you on the path. And so I don't want you to feel like you have to get overwhelmed by setting up your own mutual fund account and brokerage accounts and all of this. That's for later on once you've maxed out all of your retirement options. And so George, just to recap, the two things she needs to do out of the gate is to sit down with her HR rep at work and say, do you all have a Roth 401k option and do you all have a match? We'll start there, right? Absolutely. And then if they don't have a Roth, but they do have a match, she's going to take up to the match and then open a Roth on the side there. Yes. And then if and when your income goes up and you max out the Roth IRA, you've got the match, then we can move on to traditional, which would be your normal workplace retirement plan.

But until then and until you're in baby step seven where you have a paid for house and you're in a different place financially, that's when you start to go outside of retirement. And so one thing that John and I do is we work with a financial pro, an investing pro to walk with us, create a holistic strategy to help us build wealth. And you can find one of those in the Jackson area at ramsaysolutions.com. Click on Ramsey Recommends and get in touch with a smart investor pro. That's actually what I was going to say. So I opened one the other day and that's what I did. And I consider myself, I'm not the smartest guy in any room I walk into, but I'm not dumb. And I still don't understand all this stuff. I sit by Dave Ramsey every day. I still don't fully grasp it. So I call SmartVestor Pro and said, here's what I want to do. And we talked through goals and where do we want to be and how are we going to get there? And it said, great, I'll take care of it for you. And here's the links

and here's the this. And we've already talked through, I have a relationship with him. So I know he knows what I like and what I don't like and all that. But I did not get online and go through it all and learn how to – I called my Smart Investor Pro. And it does cost money, and it's worth it for me. That's huge. Well, Diamond, I'm going to send you Dave's bestselling book, Baby Steps Millionaires, because that will kind of get you excited and also give you the right information when it comes to investing. Because good news for you, it's a lot simpler than most people would tell you out there.

And you are way, way, way ahead of the game, Diamond. If you just keep staying out of debt and you got money in the bank and you're investing something, you are already so far ahead of most Americans. I wish the bar was higher than that, Diamond, to be honest, but you are so far ahead, so far ahead. Hey, about this time of year, we get flooded with calls. Everyone's looking for a fresh start with their money or everybody is tripping out because every indicator, every news pundit is going, it's all coming down. And every politician's throwing grenades, but

it's been a tough couple of years. And the prediction is there's going to be some rough going ahead. If that's you, you cannot wish for things to change and expect it to happen. You can't just sit there at the TV and get angry and you can't sit there and just doom scroll and get mad and get raged out. You can do that and you're going to die younger, but it's not going to change your financial position. You've got to do some different things with your money. You have to do some different things with your money and have a plan. And we can teach you that plan in Financial Peace University. This is the course that will help you rethink how you manage your money. And you'll learn step-by-step how to pay off debt and build wealth. Nearly 10 million people have taken FPU, followed this plan and changed their lives. It works. Don't try to reinvent it. Don't try to get too smart. Don't think that some

fly-by-night newscaster suddenly has it all figured out or some internet sensation already. It works. Just follow the plan. Is it painful? Yep. Uncomfortable? Yep. Does it work? Yep. Every time. When you intentionally follow this plan with focused intensity, this year will be different. You'll have more peace, less anxiety, less frazzled relationships, and more peace in your finances all across the board. So start Financial Peace University right now at ramsaysolutions.com slash FPU. That's ramsaysolutions.com slash FPU. And John, I want to mention, a lot of people have,

they're like, oh yeah, I went through that 10 years ago. It's time to go through it again. Number one, it's changed about a dozen times. John and I are now in it. I mean, I have no clue how that even happened. It's gotten more,

like better looking, let's be honest. That's true. But on top of that, there's like nine hours of content in this. And just like a good movie, you go back and watch it. Oh, yeah, I forgot about that. I didn't realize that.

Oh. And so there's deep dives on investing and insurance. And the chances are you're in a different place financially than you were years ago. So go through this again. I go through it about once a year just to give me that pep I need, the information I need to get through that year and get ahead with money. And George, you and I aren't robots. Every month it's like, I just want to buy this. I just want to, yeah, man, it's good just to have the principles go back and to go back

and to go back. Remind yourself why you're doing this stuff. That's right. FPU, go to ramseysolutions.com slash FPU. This is the Ramsey Show. We'll be right back. 888-825-5225. This is the Ramsey Show. Listen, if you're a new listener,

if you're brand new to this group of wacky people, if you're new to the cult, if you're new to Ramsey and doing things the Ramsey way and deciding to swim upstream and change your life, and you want a deeper dive into the Ramsey baby steps, you're watching these things on YouTube, you're seeing the TikTok, and you're like, what is this? We got you. Go to ramseysolutions.com and click on the get started button. Okay. This isn't some kind of move to like get you to buy

it. It's not it, man. We're trying to help out. We understand that what we are telling people to do is so counter-cultural. Washington doesn't do it. Your parents didn't do it. Your friends don't do it. No influencer on the internet does it. We get it. We get it. So we want to help out. We want you to become one of the millions and millions of people that's changed your life. So go to ramsaysolutions.com and click on the get started button and we'll help you figure out the best next step for your financial journey based on exactly where you are today. Everybody's financial position is different. Go to RamseySolutions.com and click on Get Started. Let's go to Greg and Marion. What's up, Gregory? Good. How are you? Good, man. What's happening? here's the question that i had um i have a

twenty thousand dollar emergency fund but what i did is we needed to remodel the basement and you know we turned it into a living area and i depleted my regular savings account and i'm paying an extra thousand dollars a month on my mortgage do I need to stop paying as much on my mortgage and rebuild my regular savings account or just keep throwing it at the principal of the mortgage? Yes. You are on a pause paying extra on that mortgage until we have that emergency fund back to where it was.

Let me make sure that you... No, no, no. You have an emergency fund, and then you have a savings account. What's the savings account for? If we wanted to do something, we did it out of that instead of using the emergency fund or anything like that. We just saved up money, because I had that basement money for about three years and finally found someone to do it. So it was basically a sinking fund.

And you've got leftover money in the sinking fund for home repairs and renovations. Yes. Do you anticipate more home repairs and renovations? No, I don't. Okay. Then continue on. As long as you haven't touched that emergency fund, then you're good to continue on and baby step six and throw an extra on that mortgage. So Greg, in a real world application, I've got

an emergency fund and I also have a truck that's got 200,000 miles on it. So my wife and I have created a sinking fund, which we just started another savings account line in our checking account. And I'm just putting money into that every month until it's the price of the car. And so if that's what you're doing, that's cool. But that money is directed. It's not just like this bucket that we're just dropping money in every once in a while. Let's put a thousand bucks here, 50 bucks here or whatever, because that money's not working for you. It's just kind of sitting around around if it's intentionally being pulled over for a purchase to redo the basement to get a new roof to get a new air conditioner whatever that is um that's fantastic just make sure every one of those dollars has a name on it does that make

sense yeah that's awesome if you just got that extra money in that savings account why not throw it at the mortgage okay i didn't think about that there's one option george burn that i was having you know extra stuff so i would rather see that mortgage start balance start to go down that's more exciting than sitting in a savings account now if you know you have something like john mentioned you know the car is going to need to get upgraded none of these are emergencies and so i love the original phrase of i needed we needed to renovate the basement. It's a want. And you did it the right way by having a separate service. And you took three years, waited for some, yeah, did it great.

And had the money that's awesome. But those are dangerous words whenever anyone says, well, we needed to. I was forced. We got the call the other day. We were forced to take out the loan. No, no one forced you. That's not how that works. You voluntarily signed because you felt like you had no option but to go into debt.

That's right. All right, let's go down the street to Justin in Canoxville. What's up, Justin? Hey, guys. It's exciting to talk to y'all. My question is, I've just gotten on the, I guess, Dave Ramsey plan. Just started listening. Welcome to the gang, man.

And I have ordered the total money makeover. It's on its way. But here's my question. I'm 41. I'm a window cleaner and I have nothing safe for retirement. And I'm just getting, I have a really hard time not putting money into the market because I know the market is down. A lot of people are scared to put money in the market, but I'm not. And I'm looking at this as a sale and it's like time to buy and, um, I have nothing saved for retirement and I'm worried about

retirement because I can't continue to keep doing window cleaning until I'm 65, 70. How much do you owe, brother? Like in debt, I have $133 on my mortgage and $24 on my cars and maybe $14 in credit cards. And the thing is, is I make enough money that I can, we quit going out to eat. We cut back, I cut all my credit cards up. You know, I'm cutting back on everything. So we're paying extra on everything. But I also have this extra 15% that I can start throwing into the retirement. And that's where I'm stuck.

I'll let George dig into it off the top of my head. You're not going to get 28% return in the market, no matter how on sale it is. And so the 28%, you're paying out one way, you're trying to earn back at the market rate, which is 10 or 11 or 12%. See what I'm saying? Yeah. Yeah, but everybody's saying like the market is down like...

Everybody around you is broke, brother. And listen, if Dave came to me dave has a lot of cars he's got this one corvette i'm not a corvette guy i like trucks more than core but he's got his this corvette that's really old and it's incredible let's say it's worth a hundred grand i don't know it's worth it's probably worth way more than that and he came to me and said john i'm gonna give you the deal of a lifetime. I'm going to give this to you for $50,000. That's the deal of a lifetime. It is on super sale. And I don't have $50,000 to buy it with. Both of those things can be true. You are correct. I am putting more money in retirement savings this year because the market is on sale. And I think it's going to go a little bit lower and I'm going to keep buying. I'm with you. You don't have the money to do that because you owe

$38,000 in depreciating assets and credit cards. What's your income, Justin? Roughly 95 to 100. Okay. So you've got, on paper, I'm seeing $38,000 in consumer debt. Yeah. So if you got real intense focused, you'm seeing $38,000 in consumer debt. Yeah. So if you got real intense focused, you didn't invest a dime into the market, and this year you said, I'm getting out of debt completely, could you do it by the end of the year? Probably. How much money do you have in the bank in liquid cash?

Just $1,000. We've just gotten started. Okay. Now you said, I love investing in the market, but you also said, I've got nothing saving in retirement. So those are two confusing sentences. Have you been investing outside of retirement? Or you love the idea of doing it? No, I love the idea of doing it because I've gone all these years of not investing and it's like now I see but why now the market's been down in previous years yeah i mean you've had it's just i guess watching these tick tocks where everybody's you know talking about you know the market's down it's good time to buy you know

what's not cool on tick tock justin is someone saying hey guys don't invest in the stock market just start paying off your debt from smallest to largest. If I posted that on TikTok today, I would get about four views and about a thousand comments of people saying, this guy's trash. You need to invest in the market. And so it's all get rich quick over there, man. So turn off that input of social media and let's turn up the fire on this debt thing and say, hey, how much money would I have to invest if I had no payments in the world and I had a huge emergency fund and I could breathe easy, sleep better at night, and now I can start really investing? And so one year from now, you'll be there investing in the market. But right now,

we have a priority of getting rid of this debt and having money in the bank. I also am going to send you Ken Coleman's Get Clear Assessment. It's very calm people to wake up in their 40s and 50s and realize, oh, I can't do this manual labor job indefinitely. At some point this comes to an end, I think you're wise to start thinking, what might that look like? So hang on the line here. We're going to send you a copy of the Get Clear Assessment. You can start asking yourself and your family the question,

when we're out of debt and I can do anything, what would that look like? Hey, this is another hour in the books. We'll be right back on The Ramsey Show. Hey, it's George Camel. If you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click Get Started.