The Ramsey Show - App - Take Control of Your Finances Instead of Waiting on the Government! (Hour 2)

Episode Date: October 21, 2021

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Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey Personality. George Campbell, host of the Fine Print and Entree Leadership Podcast, joined today by the amazing Rachel Cruz, best-selling author, her latest Know Yourself, Know Your Money, a smash hit, some would say. Some would say.

It's so good. I love it. I love what you dug into with this stuff because we have largely, we had a lot of the tactical, here's what to do, here's the plan. And in this book, there's a ton of research about these money classrooms. What are those? Yes.

So the book dives into really why we handle money the way we do. And part of that is our upbringing, right? The household you grew up in was your classroom. It's where you learned life lessons. Some lessons we wish we could probably unlearn, right? But some lessons you just naturally take with you into adulthood and money is one of those. So there is the anxious classroom, the unstable classroom, the unaware classroom, and the secure classroom. So these all have to do with how money was verbally communicated,

how money was emotionally communicated, whether it was stressed or peaceful. I mean, all of these, it kind of makes this quadrant, if you will. So I talk about each of those classrooms in the book and how the good sides of it, the bad sides of them, and how to really get to this place where you're like, okay, I'm in a secure money classroom, which is where you're emotionally calm and verbally open about money in your current nuclear family. That's big. And we're big fans of counseling around here. And counseling 101, you find out what happened in the childhood, what was the relationships

like with the parents. And it's amazing how much health you can gain with your money when you realize that and go, oh, that's why I do this. Absolutely. And money, we say it around here all the time, it's usually never about money. Usually there's things underneath what's going on, whether it's a motivation you have, a fear you have, a relational issue you have.

But sometimes it comes out as a money problem. And so it's fascinating to kind of dig under those layers because like you said, when you become healthier as a person and you can navigate, okay, why I do certain things, then you can change your bad habits into better ones and kind of figure out how to navigate with the cards that have been dealt to you. And the same is true with your money. That's fascinating. And we see that on the Ramsey show a lot. People call in with a money

question. It turns out it's a relationship question. That's right. That's right. And so we're happy to take those calls. 888-825-5225. Me and Rachel, we will dig with a scalpel to the root issue to help you out. And James kicks off this hour in Salt Lake City. James, welcome to The Ramsey Show. Hey, how are you guys? We're doing great. How can we help? Hey, so I've got a question on student loan debt. So my wife and I have been paying off. We're on baby set two. We've paid off about $27,000 in 18 months. Nice.

Thanks. Sorry. So it's been an emotional journey since the current administration put the pause on student loan debt. We've taken all that stuff since we're debt-free except for student loans, and we've been dropping into savings. We've got about $10,000, and since things are starting back up, we're wondering, should we dump all of that into it or save a little bit, kind of like baby step three? So you're saying, can I skip and leapfrog to baby step three while I'm still paying off the student loans?

Yeah, when they paused the interest and everything, my wife and I gauged out the risk of the potential of them doing the $50,000 forgiveness. And if we were dumping everything into it, it'd be a loss. Whereas right now, since there's no interest, we're putting it into savings. So that way, if it didn't get wiped out, we could just put all that into the student loans. How much do you guys have left, James? $37,000. Okay. Well, um... You may not like our answer, James. I wouldn't... I know. It's okay. I mean, I feel like you knew it a little bit, but here's what I'm going to tell you. I would not bank on the government to forgive your student loans, whether it's $10,000 or $50,000. I want you to take control.

There's a level of mojo that you get back when you decide, you know what? I'm going to handle this thing. I can get out of this, and I don't need anyone's help other than my own work ethic, my own sacrifice to do this. So you've got $10,000 saved. You have $37,000 left in debt, correct? Correct. Okay. So if you want to do things the Ramsey way, and I don't say that because I'm a Ramsey man, I say it because it's the proven way that people have gotten out of debt, the people that you hear

on these debt-free screams. So what that means is you're going to be setting aside $1,000 of the $10,000 for your Baby Step 1 Starter Emergency Fund, and that's going to leave you with $1,000 of the $10,000 for your Baby Step 1 Starter Emergency Fund, and that's going to leave you with $9,000 to throw at the remaining $37,000, which by my math takes you down to what, $28,000? Correct. And how much do you guys make a year, James? $45,000. $45,000.

And do you guys have any kids? I've got two little girls, and we live with our in-laws right now, so we've got about $13,000 we've been putting into our savings each month. $13,000? Oh, sorry, no, $1,300. I'm so sorry. Oh, I was like, man, that's incredible. Let's get rid of these student loans. I would love to get that $13,000 to put in every month. So your expenses must be really low.

Yeah, so we just have our basic stuff. We don't have any car loans or credit card debt or anything like that. It's just student loans. Yeah, I mean, can either one of you maybe take on a side job and try to get a little more income while we get these student loans paid off? Yeah, so we just paid off probably about $5,000 in medical debt. I drive Uber Eats on the side, and so that's really helped with that. And so now all that can start going towards student loan debt as well.

So, James, what do you guys do if you're making $45,000 household, you and your wife? What do you guys do? So I actually work in sales and account management for a company here in Salt Lake. My wife doesn't work right now. Just some stuff that she's going through right now. She was a school teacher. We also were on a waiting list for a sweat equity home building program. And they just recommended, because she's not going to work once we get into it,

that she wasn't necessarily working when we got into that program. What's that program about? So essentially, it's a sweat equity program where about 10 families get together through a non-profit, and we actually build each other's homes. It allows us to get into a home for about $200,000 on a mortgage for a $400,000 home. So it's just a good option. And she can't, do you have to be at a certain income in order to qualify for that?

Yeah, yeah. So we'd still be within the income, but they said that she won't work when she's up there. They just didn't recommend that she work when we're on the application. No, James, yeah, I don't know. I'm not liking this. I don't like the fact that you have to limit your income.

I know. This feels odd to me. Yeah, I know. But James, you can get don't know. I'm not liking this. I don't like the fact that you have to limit your income. I know. This feels odd to me. Yeah, I know. But James, you can get an incredible mortgage or incredible house that doesn't have to be a $400,000 house. What I'm feeling is that you're yielding to other people. You're yielding to the government to pay off the student loans. You're yielding to this program for a home. James, you and your wife can do this. You guys are smart. You can be self-sufficient. You can rent for a little bit, move out of your in-laws, let her work. You guys get this income up, wipe off the student loan, save up for a

down payment. I mean, y'all can live the American dream. You can do this. Yes, I'm getting excited just hearing Rachel talk about this stuff. You can do this, man. Put the ball back in your court. Don't limit yourself. Don't limit your income. You can do this, man. Put the ball back in your court. Yes. Don't limit yourself. Don't limit your income. Don't wait on the government. Take control. Bring up that income.

Get rid of these student loans. Live life on your terms. This is The Ramsey Show. Hey, I'm Christi Wright. Let's be honest. When it comes to our quiet time with God, sometimes we struggle to make the time and get into good habits. That's why I'm so excited to tell you about the Glorify app.

For me, it has been an absolute game changer. Every morning, Glorify guides me through God's Word with a bite-sized Bible reading, a daily devotional, and a guided reflection that simply helps me to connect with God. Give Glorify a try. Just search for Glorify in your app store. It's free to download. Welcome back to The Ramsey Show. I'm George Campbell, Ramsey personality, host of the Fine Print and Entree Leadership Podcast on The Ramsey Network, joined today by Rachel Cruz, host of The Rachel Cruz Show, also a wonderful show you can find on the Ramsey Network.

And I had the pleasure of recording a segment with you yesterday for the show. I know. We did one, ooh, about buying. It's going to be a great one. Oh, how companies are going after your money and how you can protect yourself. Yes. Take control. It's good because, I mean, people think of Ramsey as like, oh, yeah, y'all are cheap and you don't spend any money and all that.

We're like, no, no, no. Listen, we are all about creating a life that you love. Yes, you will cut your lifestyle down and be cheap when you're getting out of debt and getting an emergency fund. There is appropriate times for that. But then there's also times that you get to celebrate and actually enjoy, but you still, even then, don't want to waste your money. And companies know how to market so well to you, where you spend and you almost don't even realize you're spending or spending more than you should and all of it. So, George, you're the expert on it. And we broke it all down.

You and I, we're bougie. It was so fun. We do like nice things. Okay. I want my single origin coffee. And you like to shop and travel and have all these great experiences. I like to say inexpensive, not cheap. Yes, affordable.

Inexpensive. Affordable. We can do that. Well, that's what we're here for. We'll help you with your money problems, your money questions. We'll celebrate with you. We love to do that here on The Ramsey Show. And we are going to the lines this hour.

We've got Sarah in Terre Haute, Indiana. Sarah, welcome to The Ramsey Show. Hi, thank you for taking my call. It's great to talk to you guys. We're happy to talk to you.. Hi, thank you for taking my call. It's great to talk to you guys. We're happy to talk to you. Thank you. My husband and I are on baby steps four and six. We do not have children, so we're not doing baby step five.

I recently was terminated last week from my 20-year career as a college instructor. Wow. I'm so sorry. Thank you. Was it unexpected? Yes. I opted out of the COVID vaccine and I had a religious exemption and they still, because of that, were unable to use me moving forward. So it was considered termination. I'm meeting with an attorney. He's asking me if he's able to help me legally, what should I ask for in terms of being terminated? And if that was a wrongful termination, should I ask for obviously my job back? But if that's not an option, he wanted to know,

you know, would I want retirement? Would I want, you know, wages? And I just wondered what your thoughts were on how to approach that. Well, would you want your job back if they offered it to you? It's a sticking situation because being unvaccinated, that's not a favorable position to be in at that particular employer. That was my guess, was that even if they offered it back to you, which I don't know, it feels like a pipe dream at this point, do you want to even be with that employer again? Are there job options out there? Well, I'm currently applying for other job options that are comfortable.

I did have a religious exemption that was accepted, and it still didn't work out for employment. Well, as far as the severance goes, have you talked to anyone else who's been in this situation to see what they ended up with, if anything? No. This is an unusual circumstance in my little community, and I don't even know what a severance package looks like or, you know, what that would entail. So he said, other than my job back, what type of negotiating things would I ask for if this is deemed, you know, not making reasonable accommodations? And I don't even know what that would be. Like, would I ask for salary, retirement?

I don't know. Yeah, I mean, I feel like usually when there's a termination with severance in a company, I mean, obviously companies can do what they want, but considering how long you've been there, 20-plus years, I mean, yeah, having a year's worth of income I feel like is... Yeah, that sounds fair for that length of time. Like Rachel said, they can do whatever they want. But if they want to be kind and do a nice thing, I think a year's worth would be

fair to ask for. And they didn't offer you anything, Sarah, when they let you go? No, because it was a termination. It wasn't a resignation or a retirement. I'm three years from retirement. And so I even asked about early retirement and, um, because it's a hot topic and the vaccine right now is a really sticky situation. Um, it, that was not offered. Yeah. So, well, here's the thing. I think you can ask for whatever you think is fair. Uh, if you want to make it, you know, uh, it, you want to kind of make them the poster child and go, we're going to go after them for a million dollars because of this. That's something you can do.

But if you're saying, like, what is reasonable and what do I need, that's going to depend on your financial situation. And if you're this close to retirement, are you doing okay for retirement? Are you doing okay financially? Do you have an emergency fund? Yes, we have a six-month emergency fund. My husband and I together have almost $500,000 in retirement. And so the retirement package at this employer was amazing. They contributed 15% of my income of their money into a 403B. So I've been very

blessed that for 20 years, I've had excellent retirement, plus what my husband and I put in on top of that at the 15% that we do for Baby Step 4. So that's what's hurting. You have about half a million total for retirement between both of you? Yeah. Okay. I feel like both of you will probably need to continue working to make sure you've got a good nest egg for retirement if you're saying it is three years away. So make sure you're in control there. But if I'm you, I would ask for a year. I don't know how far you want to push it as far as the lawyer goes. I personally probably wouldn't. I would say, hey, if they, whatever they're willing to do is fine. But if you want to go further than that, that's

going to be a decision you've got to make with with the attorney so but i would find out what are what's happening in the area what are other people asking for what are they actually getting and try to get some yeah i would do a little research too because again this is a topic that people are dealing with literally as we speak we took two calls about the same thing yesterday so i'm like there it's it's a new unprecedented like that's the word that we've been using. New ground. But it is. And I'm like, you know, we're all learning from it, right? We don't, like, there is not this pattern

that we can look back over 10 years, here's what's happened. Here's what's normal. What you can do, Sarah, I think is gather information. Obviously, talk to your attorney. But I would see what else is happening because there's other sectors out there

that people are leaving because of this exact issue and to see, okay, what does that look like in the education space so as much information as you can gather i think would be wise well our question from the day comes from blinds.com blinds.com's 100 satisfaction guarantee means even if you mismeasure or pick the wrong color they'll remake your blinds for free you get free samples free shipping with the new promos they run every month you'll save even more use promo code code Ramsey to get the best deal. Today's question comes from Garrett in Florida. I know Ramsey Solutions teaches that building

capital without ever using credit is better than the best credit score. I've worked hard and been very disciplined and followed the principle. I'm 31 years old with close to $2 million in assets and investments. I have no payment old with close to 2 million in assets and investments. I have no payment history because my current job provides housing. I want to buy my own home soon. So what is the best way to purchase a house and what should I do to build up my credit score? Those are two very different questions. What's the best way to purchase a house without a credit score and what should I do to build it up? I'm going to tell you the second one you don't need to do at all. There's a process that we talk about here on the show a lot called manual underwriting or a no score loan.

And we've recommended our friends at Churchill Mortgage for years because they are experts at this and they're one of the good guys out there who can help you do this without a credit score. And Rachel, this isn't theory. I did this. Yes, that's right. I got my mortgage without having a credit score because I had paid off my debt and my score became indeterminable.

And we actually dug into this very topic on the latest episode of The Fine Print, The Dirty Truth Behind Your Credit Score. Oh, I love it. Give me some info, George. I know. We got the juice. So I called up apartments all over the country, rentals, and said, hey, I don't have a credit score. Can I rent from you? And they went, yeah.

Do you have a job? Oh, you're not a criminal? Okay, great. And I was like, oh, okay. So it's not that hard. Much easier than you think. Yeah. Yeah, there may be a higher deposit things like that and then i talked to uh my friend seth at church home mortgage and he explained to me the manual underwriting process what's entailed um you know it's a little bit lengthier because it's manual they have to

actually go through your real life and go all right you've got utility bills you've been paying on here's your w-2. So there's some real factors involved versus, oh, the bank said I can have a half million dollars. Right, right, right. That's never a good way to go about it. So, my man, you've got $2 million in assets at 31. You're crushing it. But here's the deal. Don't build up the credit score. Just use manual underwriting. You can use a place like Churchill Mortgage. There's lots of places that do it. Look around, do your research, and get this mortgage paid off. You're doing

great. Or if you've got $2 million, maybe you buy a house in cash. In cash. Who needs a credit score then? Turns out you only need a credit score when you want debt, Rachel. That's right, George. Fascinating stuff. Groundbreaking.

This is The Ramsey Show. Open phones this hour, 888-825-5225. I'm George Campbell. She's Rachel Cruz. And on the line, we've got Jamie in Seattle, Washington. Jamie, I see on my screen, you're debt-free. I am debt-free. I am debt-free. I love to hear it.

Okay, so how much have you paid off? I have paid off $35,000. Love it. How long did that take? Three years. And what was your range of income during that time? Well, that's the best part of the story. When I started out, I was completely upside down.

I was taking care of my elderly parents, my two young sons, all on my own, making about $50,000 to $55,000 a year. Wow. So $50,000 to $55,000 was the range during those three years? Yeah. I started my budget completely upside down. I was sponsored by my aunt and uncle who teach the program, and I'm so grateful. It was really a challenge because I didn't even have enough money to pay all the bills. Wow. But with hard work and dedication and commitment, I kept plugging forward. And when I made the decision that I had breathing room and I really needed to tithe at that point, about three months into taking that tithe challenge to give back to God, I had my former employer come back to me and say, hey, we really want you back in a consulting

capacity. I had started my own business and I had built it up. So I went from making $50,000 a year in my own business to having my own business and having another consulting job and making $150,000 a year. Whoa. Jamie. That's incredible. So when did you start making $150,000? Was it towards the end of this journey? It was actually towards the end of the journey.

It was just this last summer, just before summer. You're a rock star. I took that on, and God really blessed me. I felt like when I made the decision to start tithing, He said, hey, you're doing great with what I gave you. Here's some more. So now I get to share the program with my family. I get to share it with my employees, and one of my employees has started the program this month because they've seen the huge change that it's made in my life as a single mom. I'm part of the sandwich generation trying to take care of elderly parents and young kids. And it takes work, and it's so hard at the beginning, but it is so worth it. And I encourage people to take the risk, be vulnerable, get help, go through the program, because it will change your life like it's changed mine.

Jamie, let me say this. Here's what's impressive to me. It's not that you were making $150,000 and paid off $35,000 in three years. You were making $50,000, paid off $35,000 in three years, and toward the end of that is you got that $100,000 raise, basically. Yeah. Which is just amazing it's amazing. And I love the faithfulness of what you've said.

Like you have walked and been faithful with the little and you put in the sweat and the tears and the grind and the hardship. And I'm sure there are some days that were way harder than others. Victories and setbacks, all of it through those three years. And it's like that built this character in you, Jamie, really to know what it takes to win and a level of gratitude. all of it through those three years. And it's like that built this character in you, Jamie, really,

to know what it takes to win and a level of gratitude. And then you put on $100,000 on top of it toward the end. And it's like you can handle that. You know what I mean? There's just something so beautiful about that journey, even though I know it was so hard. It's remarkable. So well done.

Well done. Thank you so much. What kind of debt was this? It was, you know, some legal debt, some medical debt, some just poor decisions. I'm trying to, you know, charge things because I didn't have enough money to buy the kids things or to get mom and dad medication that they needed, those kind of things. So, you know, it was pretty much just getting into a pattern of relying on credit cards to fill the gap when I didn't have the cash. But I'm so glad that I started because especially with, you know, coming out of 2020, it slowed me down a bit, but I didn't stop. I knew immediately once that snowball started happening that this was going to change my life drastically.

And now on to step three, I'm already, you know, a third of the way through to my goal. And I'm just I'm so incredibly grateful. And I am leaving a legacy to my kids because my kids are six and four and they have both already accomplished step one. And so that's something that I want to pass on to them because I went from having no idea how to manage money to having so much confidence in the way that I manage my money and that I give it back to the Lord and that he has blessed it and And he blesses the hard work that you put into it. So what happened, Jamie, 36 months ago? Because you had a lot of life happening. Like you said, you were taking care of parents.

You didn't have enough money to pay the bills. I mean, you were in a tough spot. So it would have been easy to kind of just give up and say, this is my life and this is how it's going to have to be. But you didn't. 36 months ago, you made a choice. So tell me what happens then to change everything. Well, when our youngest was one, Steve passed away. My partner passed away. So I was genuinely

on my own, and I was terrified and at my wit's end, but I was also in a place of submission where I knew, God, I can't get out of this without you. And my aunt and uncle, Mel and Phil Dameron, came alongside me and said, hey, we want to sponsor you to take this class. We think it'll change your life. Just give us a chance. And it was hard. Like doing my budget with them, I wept. I was so embarrassed.

It's very hard to be vulnerable like that in front of people and to, you know, own some of the poor financial decisions that I was making. But they were so patient and so loving and were there for me and were accountability partners for me. And I can't thank them enough. That's amazing. You're remarkable, Jamie. I mean, you had someone, you know, your partner said the death of him.

You're taking care of your parents. You have two little kids. I mean, you know, your partner, you said the death of him, you're taking care of your parents. You have two little kids. I mean, you're, you're remarkable. I mean, that is, that's a lot of hard life that you walked through and, and yet you came out on the other side, choosing to, to put your time and your energy and your effort into something like this to, to get you back in control, right? Like there's a level that I'm sure you feel in control of because how are you feeling now? I mean, 36 months ago, Jamie's sitting there doing her first budget to now, how do you feel?

It's amazing. I am so grateful to Dave and the program. I'm so grateful I get to share it with others. I feel secure. I'm not constantly terrified or struggling with anxiety. I got to take my kids on vacation this last summer. I am getting to give them all the benefits that other people have. I turned a very low-income single income into a two-income household,

and I am just, I feel confident. I feel excited for the future because I know that I'm safe. And especially in the economy that we're struggling in right now, I'm so grateful I did it. And it doesn't matter where you're starting from. It doesn't matter how deep you are in the hole. All you need to do is commit to it. And, you know, God has blessed that commitment in my life. And I just want to share it with other people. Let them know it is so worth it. Wow. You're incredible, Jamie. You know, they say that having a testimony is great. Getting one sucks. And you've been through it, but now you have an incredible story to share, especially with other single moms, people who

have been through some stuff, people who are taking care of their parents. And you can say, listen, you can do this. And I know that because I did it. And so we are so proud of you. We're honored to be able to share your story. And we're just pumped for what's next for you. So we've got a copy of the legacy journey. You told me that you want to change the legacy of your kids. You're doing that. You have done that. You will continue to do that. And so we want to send you a copy of that as well as a copy of the total money makeover. And you can sponsor someone else's journey and take them along and show them that it's possible that they don't have to live with the stress and anxiety of finances in their life. And we're just pumped for you to pay this thing forward and keep living your life. You ready for this?

Well, thank you so much. I am. Okay, let's get to it. It's Jamie from Seattle, Washington, paid off $35,000 in three years, making $50,000 up to $150,000. Count it down, Jamie. Let's hear a debt-free scream. I'm debt-free! Woo! What an inspiration. Amazing.

Amazing. Amazing. Do you know what's so interesting? It's happened both at Free Calls and yesterday even. People get raises. When they're on a journey and they have a goal, there's something about it that just shifts in your life that I feel like people catch on to. Yeah, I don't think it's heebie-jeebie.

There's just this level where you start to take control and start to manage your money well. You tend to get more. It pops in your hands. Look at that. What an inspiration, Jamie. Thank you for the call. And congrats on debt freedom.

This is The Ramsey Show. Open phones this hour. I'm George Campbell, joined today by Rachel Cruz. This is The Ramsey Show. Open phones this hour, 888-825-5225. We are having a good time. We're going to keep it going with Ryan in Kansas City. Ryan, welcome to The Ramsey Show. Hey, how are you guys doing? Doing great.

How can we help? Yeah, so I'm trying to figure out what baby step I'm in. I'm currently, I feel like I've paid off a lot of baby step too, but I'm kind of stuck with a business and trying to figure out the baby steps and how I can apply that in the business world. Okay. What's your business? So it's like an animal care facility. Okay. So boarding and things like that? Yep. All right. Like a veterinarian clinic. Very nice. And so you've got some debt that's tied to the business? Correct. I've got debt tied to the business we purchased and the real estate that the business is on. But then on my personal side, all I have is my house and some land that we hope to someday build a house on.

Okay. So you've kind of got two payments going on in your personal life for the mortgage and the land? Yep. And then the business debt. What's your household income? If we combine the business and personal and everything, it's close to $400,000. Wow, fantastic. Okay, is that mostly from this animal care business? Yes. All right. Yes, it's about $100,000 personal, and then the rest is the business side. And you signed for this under your name, right? Correct. On the business side?

Mm-hmm. Okay. So this is your debt. Absolutely. All right. So we're going to treat this thing, you know, we're going to put it in the debt snowball other than your primary mortgage, and you said you want to keep this land, you want to build on it eventually, right?

Correct. So when you list out your debts from smallest to largest, what would that look like? What is that smallest debt right now? I guess my house. Oh, your house is the smallest? Yes. And then what is on the business side? Are we talking half a million?

So the business side is about $750,000 with a real estate of $200,000. Okay, so $750,000 total and the real estate amounts to $200,000? Yes. What's the other part of that, the rest of the $750,000? The land, empty land that we have. Oh, okay, okay, okay. So, I mean, if I'm you, the business debt, while it's important, you've got $400,000 coming in. What are you doing with the excess amount right now?

Are you putting some away for retained earnings for your business to make new hires? What's going on with the excess? Well, and that's kind of where I was stuck. At first, we were really attacking our baby step two with cars, and we're going to really get that. And now that we've kind of got past all that, I didn't, with all COVID and all the different variants of this come out, I'm just, I don't know how much to keep in there as the so-called emergency fund for a business. And then I really want to start attacking the debt with the money I have saved, because right now it's kind of setting in a business account and I want to start using it. Yeah. Well, if your business is in good shape and you've got

some retained earnings, I mean, you can attack that mortgage and get rid of your primary residence and then attack this business debt. If something goes bad with the business, I mean, you could sell that property, right? Correct. So you're in okay shape on that side, but your primary residence, I would attack that first, Rachel, and get that out of the way, which is going to hopefully free up a good chunk of money, and you can kind of continue on. You don't really have a lot of consumer debt. There's just a whole lot of real estate going on here. Correct. Yeah. Correct. And I've got a lot in the bank saved, and I just didn't know how much is considered. If I should save like a three- or six-month or do a six-month due to COVID causing a little bit more hesitation.

Sure. And then how much, what is considered the six-month? Like a skeleton, you know, that's just paying the building, paying the loan, paying utility. I would say if you're able to pay whoever's on staff, pay all the bills, you can keep the whole business running for six months and you've got that in savings, you're in a good spot there. Anything beyond that, unless you're trying to make an upgrade, purchase, make a new hire, that's when you want to make sure that you've got the cash flow and the money set aside to do things like that.

So if I'm you, I'm paying off the house first. You've got a fantastic income thanks to this business. So I would use that to your benefit and not get crazy doing upgrades and things like that. I mean, what we teach in Entrez Leadership, which is Dave's playbook on how he's built Ramsey Solutions to what it is today, over a thousand team members, we teach you to run your business debt-free. And so obviously we're already in this thing. We've got some debt happening, but you're not in a terrible situation. There's nothing on fire here. So I would just encourage you to try to get to that point

where you can run your business debt-free. And we've got lots of resources over at Entrez Leadership. I host the Entrez Leadership podcast. Dave and I actually did an episode recently on budgeting for business and kind of this financial piece for business. And inside of Entrez Leadership Elite, which is our online membership, we've got a huge video library where we dig into how to run the financials for your business.

We've got advisory groups that you can jump into in there where you can be around other business owners virtually in coaching calls. And our coaches here can help you navigate all the challenges of running a business. When I start thinking about baby step three, putting money into retirement, we really would like to start doing that more. What income do I base that off? Our income that we currently make or with the business also? Well, your income is your income. If you make $400,000 a year and whatever is on your taxes, that's what I want you to be putting 15% away. It's your take-home pay, yep.

Yeah, so if you make that. It's all of it combined. Yes, and so I'd put away 15%. Of course, you've got lots of options as a business owner. If you're self-employed, all those things, you can look into solo 401Ks and SEPs and all that good stuff. So you're doing great, man. You got a great income on this thing, and you just got to clean up some of this mess with the debt and try to run it debt-free. Way to go. Thanks for the call. Nicole joined us in Los Angeles. Nicole, welcome to The Ramsey Show. Hi, sir. How

are you? Doing great. How can Rachel and I help? Hi, Rachel. Well, okay. So my question is, I am starting FPU and I've been contributing with an employer match of 4% to my deferred comp. I know we're not supposed to be investing until baby step four. So I'm wondering if I should stop the 4% match. I've been doing it since I was 21 years old. I really am not missing that money, but I don't know what the right way is. Yeah. Nicole, how much debt do you have? Well, I've been doing Dave-ish for a very long time, and I've paid off $54,000, and I still have $73,000 and change.

Okay. What is the 73? Car loan and silly debt, you know, credit cards and nonsense like that. I don't own a home. I have three kids. I'm a single mom. My oldest is in college. I've been cash flowing that. And my second is about to start college next year. And that's my challenge. Okay. And how much do you make a year? Between 180 and 200. That's great. What do you do? I'm a supervisor in law enforcement. Oh, awesome. Wonderful. Yeah, wonderful. Well, you make a great income, Nicole. But like you said,

I mean, you've been making a great income and still in this stagnant place, I mean, is what it feels like. And so I think for you, one of the biggest changes that has to happen is something honestly within to say, okay, I'm done. I'm done messing around with the car loans and the credit cards. And it's a little bit just kind of being sloppy, you know? I mean, and again, that's not to shame you, but I see this income and I see the debt and you've already paid off 54, but you still have 73. And so there's something about it, Nicole, that if you just got so focused,

which means yes, pausing the investing, which I know you've been doing since 21 again, and you're not stopping it forever, you're just pausing. I mean, and maybe even look, whatever, you know, your car, maybe you sell the car and you look to say, okay, I'm gonna to clean this up. I'm going to live on a budget because you have a great income, Nicole, like you're going to be able to do a lot, but it's going to take about a year or so to kind of just tighten everything up and to say, okay, I'm going to

get rid of the access. I'm going to, and that may even mean for your kids to say, you know, I'm going to pause the college stuff. But we talk about student loans on here all the time, though, how they can still go to school debt-free. But I want you as a woman, as a single mom, to get this stuff under control. But you really have to make this decision. It's no more ish. You've got to be all in,

and it's going to take some effort. But I'm telling you, within 12 months, you're going to have this entire thing turned around. Oh, yeah. It's amazing how when you slow down on the investing side, you can speed up your financial future. Yeah, and actually live on a budget. You could do this, Nicole.

You could live within this. I love it. Beautifully said. That puts this hour of The Ramsey Show in the books. My thanks to our board engineer, Ben Hill, acting producer, Kelly Daniel. We will be back with you before you know it. From now, Rachel Cruz, America, it's been a fun hour. We'll be back with you.

This is The Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.