The Ramsey Show - App - That's Triple Stupid! (Hour 1)

Episode Date: June 1, 2023

Jade Warshaw & George Kamel answer your questions and discuss:  "Can we afford to let my wife quit her job to be a stay at home mom?", Why going further into debt isn't the answer to get out of debt,  from the blog: What Is a 401(k) Loan? And How Does It Work? "How do we get back on the Baby Steps after getting hit hard the last 2 years?",  How intense you should be about paying off your mortgage when you still have consumer debt. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 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 we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host for today, Jade Warshaw, and I'm joined by the man, the marvel, George Campbell. I was like, where are we going with this? George, I could go on and on. The magnificent. This is why you want to hang out with Jade. She makes you feel great.

Well, you are great, George. You're a great guy. A great co-worker. And we're taking your calls all day long, at least for the next three hours that is and uh calling with whatever it is you want to talk about we're talking about life we're talking about money trying to stick to the budget trying to pay off debt trying to buy some real estate whatever it might be put the kids through college whatever it is give us a call the number is triple eight eight two five five two two five and let's go on right directly to these phone lines because we've got Landon in Memphis Tennessee what's going on Landon M-Tone hey how's it going hey how's it going doing good

how are you doing well um so I just want to get y'all's opinion on something that might be absolutely ludicrous but I prefer to get y'all's opinions anyways. So I just made a career change about seven months ago. I became a realtor after leaving a job that I was at for about since I was 12, actually. Wow. And my wife works a salary job. And so obviously with meeting a realtor, my income can go drastically up or down. So for my first couple of months, didn't make a whole lot. And then this month,

I made 32 grand. Next month, I'll make about 25. And then I'm working a nine million dollar deal. And so. Whoa, hold up. Did you say nine million? Yes, that's right. Can I, what is it? Can I ask? It's a commercial property. Wow. Yeah, that is Luda. Keep going. So obviously one month, you know, I can make really good money. And the next month I might, you know, make not much. And so my question is, is it a good idea for my wife to quit her salary job to be a stay-at-home mom, which she desperately wants to do, and just, you know, stick with my commission only job. How long have you, you may have said this before, but I got sidetracked by the 9 million. How long have

you been doing real estate? Seven months. Seven months. And how much money is your wife making right now? Like 45 or 50 grand. Here's what I would, here's, I'm always going to tell you what Jade Warshaw might do if I were in your exact situation, in your exact shoes. I think that you're probably on track to be able to do that, but you're so early in the game on this. I would want to just get a whole picture of what a whole year is like and say, okay, like, is this normal? Did I have just a couple of quick windfalls? What's it like? You know, does that this normal? Did I have just a couple of quick windfalls? What's it like? You know, does that make sense? Because I feel like real estate is one of those things. So many people got into real estate, George, in 2020. And it was like, oh, I can do

this. Like, this is easy, you know, and then the market started getting different. And it was like, oh, this is what it's really like. Yeah, it went from anyone and their mom could sell houses and make good money to, oh, my my gosh even the pros are struggling right and it sounds like you're not struggling um i'm curious you you told us what you made uh this month the previous month and what you kind of have down down the pipe but what were your first six months like so month one i did about 1.5 million million in deals. What? So what does that amount to? What's your net profit? I made like $35,000.

In one month? Yeah. So what's been your worst month? I mean, that's not necessarily counting broker fees and stuff. Sure. Okay, okay, okay. I'm with you now. So what would be your net income after all fees?

Give me your worst month so far. You there? Well, we had a good run with Landon. Well, let's keep talking about this because the whole- We'll see if we can get him back. We'll put him on hold for now. Let's try to get him back. But what we're getting at and what I know what I'm getting at is I want to see what

the track record has been with this because if it's like, hey, I made 30,000 or now I made 32, but I was making seven. I was making five. I was making five. I was making four. I made 10. You know, if it's been very sporadic and then all of a sudden there's a jump off, that's great. I'm happy for him.

I would want to know more about it. Did you meet somebody? What was the connection? What has happened that has made this explode in a good way? And is that something that's sustainable? You know, because having his wife decide that she's going to stay home, that's a big, you know because because having his wife uh decide that she's going to stay home that's a big you know that's a big deal and to go from a you know oh he's back great great great all right i'm gonna pull him back all right landon sorry we uh

what happened you hit some turbulence i have no they just said call failed i don't know what happened that's all right so we're just speculating over here about your situation. We're trying to define the track record. This comes down to a mathematical equation. If your expenses are $4,000 and your worst month was $6,000, we can, she can stay home tomorrow. And if you can learn how to manage this irregular income, it's not going to be a problem. Well, our expenses, I mean, we're in baby step seven. Our house is paid for and we don't have any debt okay so security and and we have about 70 grand in our emergency fund okay and so the plan was to just take a salary out of whatever commission so if i make 35 grand in a month just take like a five thousand dollar salary out of that and then just continue to put

the rest to whatever we need to as far as an emergency fund, retirement, whatever. Yeah, you guys are at the point where you just build wealth and give. I mean, the 15% for retirement, now you can do 25%. Plus, you could save up in an index fund and purchase some real estate and you can have some real fun or give outrageously. I love it. We just can't read our plan. It's just to save up and pay cash for real estate and then invest heavy and give. That's great. Yeah, I'd say go for it. You're in a good position. You've done everything right. And you have no reason to fear an irregular income. Very cool call. He's not scared of work. And that tells me no matter what happens, it's going to be okay. If there's a bad month, he'll go out and make money elsewhere. Worst case, one day, if his wife wants

to work, she can go do that again outside the home. That's right. Yeah, you can always go back if you want to. Very, very cool. It's a big goal for a lot of people though, to stay at home. It is. And I was thinking about this earlier today

before we even got on the show. I was sitting by myself thinking about the fact that so many people call in and they're trying to know, am I to the point where my wife can stay home or if it's a stay at home dad situation. And I think that it is something that a lot of people aspire to. And it's, it's so hard sitting on this end when you have to say no. If you do that,

you're going to be like, your finances are going to suffer so much. It's better if you continue working. It's almost like taboo to tell someone, you know, you're calling a financial show. And if it were us, we'd keep working to pay down that debt. And it's like, what? You'd rather me take time away from my precious eight month old, you know, and people think that we're really trying to be heartless. But at the end of the day, it's like, no, we want you to have the best possible scenario. And this is not the case with Landon. His wife can stay home tomorrow. She probably have probably stayed home years ago. Absolutely. But I mean, with a lot of folks, it's like, no, you might have to sacrifice a little on the front end so that you can attain that dream later on. And sometimes you have to

say no. Well, a lot of people call into the show and a spouse already stays home. They have a huge pile of debt. They've got five kids and the household income is like 35 grand. And we're going, you're never going to be out of debt. You're always going to have these money struggles if we don't make some serious sacrifices. So doing it the right way the first time, which is usually the hard way, is the best way for peace and less stress. That's right. And even though everybody, your friend circle or the folks on Instagram might be doing it, it doesn't mean that you can afford to do it. You can do whatever you want to do, but it doesn't mean that you can afford to do whatever you want to do. Ouch.

Jade, you're hurting feelings out there already. I know. I'm preaching a little bit. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries.

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It's Jade Warshaw here, joined by George Camel as my co-host, also host of the amazing YouTube channel, The George Camel Show. Oh, thank you. Yes. We're having a good time. I Campbell Show. Oh, thank you. Yes. We're having a good time. I see that. We're having too much fun. I put on a temporary tattoo for a video today if that tells you how much fun we're having.

Where is said tattoo located, George? It's on my bicep. If you can even call it a bicep. I don't know if I can scientifically. It's busting through your shirt. Oh, yeah. I wear baggy shirts just so I don't make anyone jealous, like John Deloney. I know.

We feel very insecure when we're next to you, George. But you can go check that out. We got new episodes Monday, Wednesdays, and Fridays. And then Smart Money Happy Hour. Yes. Our show with Rachel Cruz, that drops on Thursday. So I almost have every day of the week locked in. Yeah.

I love Smart Money Happy Hour. I listen to it on my long runs. Oh, thank you. It is. it keeps me like entertained during my run so i'm not keeps you distracted maybe i should try that i should try running and then listening to smart money happy yeah you need something to distract you from the pain and smart money happy hour does just that um something else here that's um not painful but actually really great is austin one of our

producers said you guys need to check out this article and i've actually seen this before it says gen z is ditching credit cards for cash stuffing and a 90s throwback so it's not just the fashion that's come back now not just the jinko jeans it's also cash stuffing i mean they're trying to make it sound like this is like an ancient. I mean, I guess it is pretty old, but it made me feel old when I read it. He says, as well as flip phones. Look at this. Just like flip phones, micro mini skirts, popcorn tops. I think I missed that trend.

What the heck is a popcorn top? What is that? Is that like crop tops? We'll have to Google that one later. Gen Z is bringing, they're bringing cash back. Yeah. That's what is this a staggering 69 of gen z is using cash more now than they did 12 months ago more than gen z oh gen x is 47 wow oh that's crazy or baby boomers 37 so what are we attributing to this it says cash or envelope

stuffing is an old school budgeting hack commonly touted by renowned financial advisor dave ramsey a big boss man and that is making a resurgence on social media as gen z struggles to get a grasp on finances well you know i i applaud them george they're going we're so broke that we're gonna stop using the credit cards and resort to cash because that keeps us on track yeah usually you know we read these articles and we're going to stop using the credit cards and resort to cash because that keeps us on track. Yeah. Usually, you know, we read these articles and we're going off in a huff of smoke, but I'm actually proud of these people. If you realize what you're doing has not been working and if it takes you adopting apparently an ancient form of money management in order to do it.

I'm glad Dave's not here. His feelings would be hurt that his 30-year-old advice is now considered ancient. So if you don't know what cash stuffing is, what we're talking about here is the envelope system that Dave made popular back in the day where you actually, for your budget, you say, I've got 300 bucks for groceries this month. I'm going to withdraw 300 bucks from the bank in cash, put it in an envelope, use that when I shop. When it's out, it's out.

And I got to figure it out. What a concept. And, you know, here's the thing about the cash envelope system i love it my husband and i use that a lot when we were getting out of debt and sometimes i get the question of like like how does this work yeah there are categories that work better with cash stuffing right like you would have to do with your electric bill right the stuff that you have to do that online payment you wouldn't do it with that but things like gas that's not what you overspend you You overspend on eating out, groceries,

going out and shopping at the mall, whatever. That's right. Preach it. And I'll just say, George, I posted on social media the other day about, you know, a lot of people are like, it's so hard for me, Jay, to stick to the budget. What do you suggest? And I'm like, when it comes to sticking to the budget it's not always like sheer willpower right you've got to put these habits in place that help you succeed and so i always go to cash stuffing i'm like put you the right amount of cash in your wallet and not only that i'm going to challenge somebody listening right now take out the credit cards and take out the debit card get rid of the plastic out of your wallet. You want to stick to

your budget? How bad do you want it? Take that plastic out. And if you know, hey, I'm going to the grocery store, I double dog dare you to just take the $200 in cold hard cash and see what happens. It's like one of those cleanses where you take out like sugar and alcohol for three weeks and you realize how great you feel for the first time in your life. The same thing happens financially. When you go, I'm putting the cards away. I want to feel the pain of having to use the cash. And when you do that at the grocery store, you're going, I'm going to switch to the generic brand. You know, I'm going to put that back. That was a snack. Yeah. I don't actually need that for sustenance. Yeah. And I mean, you think about it. It happens

all the time. You're like, okay, my budget is, you know is you know 200 and then inevitably at the cash register it says 204 60 63 and you're like i'll just take out the debit card and do the 463 but if all you have is cash you put the pop tarts back that's right and that's called delayed gratification and discipline and willpower and self-control things we would all do better to have in today's society so i'm proud of Gen Z because this is big. A survey found that nearly half of Gen Z said they relied on social media for financial advice, the most of any generation. And a quarter of them said they learned more about money from content creators than school or books. So what happened here was a TikToker, financial influencer or finfluencer, which is somehow a word, Stephanie garcia she's got over 300 000 followers is that

and she does weekly cash stuffing videos is that baddies and budgets that might i don't know that might be her is that her that's her yeah i've seen that her content is really fun like she makes it very very fun baddies and budget she says when you leave money in your account you swipe your debit card you don't realize how much money you're spending because it's not something tangible at first i only cashed out for my bills. Then that way I knew that money I had left, I could spend because I would always overspend. Because here's the thing. People use the credit card and they go, well, Jade, I never pay a dime in interest.

I still, I'm good. You can't budget when you use a credit card. Think about this. You get the bill at the end of the month. That's right. In one lump sum. You can't budget individually to see if you're even on track or overspending in a category. You're living in reverse. Reverse. You're living in hindsight going, hope I have enough money in the account to cover the credit card bill. That's not a recipe for wealth or

financial success. Not to mention a good point on that, George, is a lot of people do get caught up on the fact that, oh, I'm not paying interest. I pay it off every month. Maybe you do. But we know that the statistics do tell us that you are spending at the very, very least 12 to 15% more when you're using plastic as opposed to cash and specifically when you're using a credit card. So it's very much worth thinking about that there. Let's try to take a little call here, George. We got some time. Let's see what Drew is talking about in Boston. Hey, that's your stomping ground, George. Boston, Massachusetts. I was just there, Drew.

What's going on? Good afternoon, Jade and George. It's a privilege to be speaking with you, although I wish I wasn't. Because of his situation, not because he doesn't want to talk to us. Okay, that's right. Exactly, exactly. Long story short, I'm 33 years old. I make a little over $100,000, take homes roughly over $61,000.

I have somehow gotten to a position where I've got just over $76,000 worth of debt in credit cards and personal loans. I'm getting married in November and I've got $0 saved up and I'm just thinking maybe I should take out a 401k loan to pay off some of this debt. And I'm just wondering what your thoughts were about that. We are going to talk about

the idea of a 401k loan in a second, but I'm going to challenge you big time on the phrasing that you used about your debt. You said, I somehow, somehow, I'm not really sure what I did, somehow wandered into $76,000 of debt. And I want you to get real honest and be like no I didn't just somehow wander into it it didn't just lightning didn't strike me and I ended up in debt I made some decisions here like I made some choices and now I have debt right correct yeah I mean yeah I guess that was poor wording I I definitely live outside of my means, and I'm trying to get onto a budget. I just have been having trouble sticking with it, but I'm at the point now where it's like I have to stick to this budget.

Good. And so I totally recognize that. I'm just trying to figure out if I could take out this loan. It's kind of my last resort, I think. It's not a real solution. It's a fake solution that puts you further into debt. And so the solution we're going to use is the one in the mirror. It's you. It's your future income. It's selling stuff. It's side hustles. It's living on less than you make, getting on a budget. And we're going to help. We're going to send you Financial Peace University for one year

and every dollar premium. But listen, a 401k puts your retirement savings at risk. It robs the future growth of that money. You're going to be stuck and tied to your employer, and you're going to end up paying taxes on those loan repayments twice. So it's like triple stupid. Triple stupid. And so do not do this at all costs, and you don't have to. You can't borrow your way out of debt.

That's a fact. You've got to pay your way out of debt. This is The Ramsey Show. You are listening to The Ramsey Show, and I'm your host, Jade Warshaw, joined by my other host, George Campbell. And George, this morning, it was so cool because right now we are in the midst of Entree Leadership Summit, which is like a giant event going down for business leaders. And it's been cool to like listen in on these amazing business leaders, give these talks and encourage us and challenge us and kick our butts. Did you get to see any of it? I didn't. I've been here

working, Jade, but our leadership team is up the hill at the events. I know, I know. But I've been jealous because we had Ken Coleman speak. We got Dr. Jordan Peterson, Willie Robertson, Malcolm Gladwell. Dr. John Deloney will be speaking Friday. So it's a powerhouse lineup. And of course, Dave Ramsey. Of course. Speaking every day. So I have a little bit of FOMO,

but I am excited because we're going to be a part of an event this fall called Smart Conference. Ooh, tell us more. Well, we had a wild one in October right here in Nashville, Tennessee, but we are headed to Chicago this September. So if you've never experienced Smart Conference. Ooh, tell us more. Well, we had a wild one in October right here in Nashville, Tennessee, but we are headed to Chicago this September. So if you've never experienced Smart Conference before, let me tell you, you are missing out. This is my favorite event of the year. It's our biggest event of the year. It's packed with inspiration, motivation, information, and we talk about how to get control of your money, improving your mental health,

strengthening relationships, building a successful career. So whether you're in Baby Step 2, you're just getting started, or you're in baby step seven, you followed this stuff for 10, 15 years now, you're going to leave fired up and smarter. Our next one is in Chicago this fall with all the Ramsey personalities, Dave Ramsey, Rachel Cruz, Dr. John Deloney, Jade Warshaw, Ken Coleman, and myself. Smart Conference is now a weekend, September 15th and 16th. We're going to do a live recording of Smart Money Happy Hour that the audience gets to be a part of. That's been my favorite part of the event. And right now, the early bird general admission ticket is just $79 for a two-day event.

We have some limited VIP tickets, platinum tickets, so do not wait to get yours. They'll always sell out. VIP tickets include a meet and greet with Rachel, John, Jade, Ken, and me. And one of our favorite parts of the event is getting to meet all the people out there. That's right. Yes. Love that part. It's amazing getting to hear their stories. It's different than just hearing them on the phone. So we'd love to celebrate your success and it's a huge part of this event. So go to ramsaysolutions.com slash events, get your tickets today, and we will see you at Smart Conference. Man, $79, George. That's like a bad meal at Applebee's.

That's true. Family of four. And you can have a two-day, I mean, you can't even go to a live event. That's a ticket fee from Ticketmaster. We don't do that around here. We run the show. It's just flat out 79 bucks.

That's what I'm talking about. Well, I'll be there and I hope that I see you there. Let's go to the phone lines, George. Let's do it. We got Nona from Eau Claire. Eau Claire. Eau Claire.

Is it Eau Claire? My favorite artist is from there, Bon Iver, Justin Vernon. Nona knows what's up. How's it going, Nona? I've never heard of them. Check them out.

How are you, George? Check them out. We're doing good. Can I make a, can I have a moment of confession right here? George, what did you call the music group?

I always thought they were called Bon Iver. Yeah, and you heard everyone's's i'm sorry a puppy's tail stopped wagging when you said that i i'm sorry i usually get it right okay it's a french word for good winter it's a whole i'm not gonna nerd out on indie folk right now but i'm sorry nona forgive me i didn't know but now we're here to help how can we help um so i have a question. There's a little bit of a backstory behind it. I'll try and be brief. So a long time ago, we went through the baby steps, paid off all our debt, saved up money for our emergency fund, and then put a down payment on a house. And then I found out I was, we found out I was pregnant. My daughter was born.

And that was kind of when everything fell apart on us. She was born with brain damage due to oxygen loss and spent eight weeks in the NICU fighting for her life. And then after she got home, about every eight weeks, she would be rehospitalized with pneumonia due to aspiration. Wow. So shortly after her first birthday, I lost my job. And it's just been kind of a struggle. So thankfully we never went back into debt.

That's great. But we did drain our emergency fund and now we've got like a whole bunch of house maintenance we need to replace things and fix things that we've just kind of been pushing off. Um, and I'm just not sure how to get back on track. Um, my husband makes about 50,000 a year. Um, I've picked up bookkeeping. Um, I picked up a side job with lifeguarding and teaching swimming lessons. That's wonderful. So financially, we're starting to get back on track,

but I'm just having trouble staying focused and getting back on a budget. Yeah. Look, you guys have been through a storm, and it sounds like you're still in it, and you're still fighting to kind of get your bearings um i think when that happens it's very easy to lose focus it's very because you go into survival mode right you're just like the last thing you're thinking about is money you're thinking about your child which you should be um and what i want to say to you is man just forgive

yourself for whatever you might be feeling like oh oh, I messed up our finances. I messed up our money. Just let that fall to the wayside because now's another day and today's another day to pick it back up and go, okay, like, what do we need to do now to make sure we're in the best possible position? And it sounds like you've already kind of started that journey back, which is great. I applaud you for that. You're doing the bookkeeping, you're doing some other things. What's that bringing in for you right now? Not a whole lot right now. I only have a couple of clients, so the bookkeeping is about $500 a month. And then between lifeguarding and swimming lessons, I'm expecting about another $300 a week ish. And that should just fill in the gaps a little bit until my bookkeeping,

until I can get a few more clients. That's wonderful. So how exactly can we help you today? Well, the main question was we have to rebuild our emergency fund, and then we've also got maintenance on our house. Like, we need to replace our roof. We need to, our deck is rotted through. I need new tires for my car.

And I'm just not sure what to tackle. Like, how do you go about getting it all done if I should do it? Like, in the baby step like the the that snowball and just like I would make a until everything's paid off I'd make a list by priority I'd make a list by priority of this cannot wait we've got to do this today um and we've got to do this so get with your husband and you guys just initially just brainstorm all the things that you feel like are weighing down on you, like that need maintenance, make that list and then go back through that list and prioritize it by importance and then start gathering information. How much is

this honestly going to cost us? What's the cheapest we could do it for? And at this point, it's one of those things, George, where there's so many things floating around in your brain, it's just giving you anxiety. And if you can write it down, like actually grasp it from the air and put hands around it and then go, okay, what's it gonna cost me to get new tires? It's gonna be $600, okay. And really put-

Just break it all down into little bite-sized chunks where you have a daily little to-do list. Today, I'm gonna research the contractors in the area and get some quotes on the deck. That's it. And then I'm gonna figure out when the roof needs to be replaced. If that's six months from now, let's figure out 10 grand divided by six months. Here's how much we need to save each month and start to make a plan for that, create

a sinking fund in our budget. And so once you do that and you put it on paper, it makes me feel better because I'm like, no, and I have all these things floating around in my head. I need some semblance of process and system and control. And that helps. And just understand you're not going to be able to do it all at once. And that's okay. And some of this stuff is going to get done this year. And some stuff, it might wait till next year. But you both need to go into it with the idea of and with the boundary of we are not going into debt. And sometimes, you know, those things, sometimes it can feel like just pounding on your door, like the big, know, those things, sometimes it can feel like just

pounding on your door, like the big, the big bad wolf, and it can feel like it's pressuring you to go into debt. And I'm telling you, if you take that off the table, there's always going to be a solution that you're going to get creative and go, okay, okay, you're going to reach out to your community, you're going to find a friend who knows a plumber who will do it for you, you know, at cost, you're going to find all those things. So just be patient, make a plan and hey, we're pulling for you. You guys have been through it. You're not the person we're here to beat up on and go, what are you doing? You have been through it. That's right. So if it takes you six months longer than the average person, that's okay. I know it's frustrating, but this is a very different journey for you guys. And you're doing so,

so well. You guys are fighting, you're scratching, you're claw guys and you're doing so so well you guys are fighting you're scratching you're clawing you're doing all the right things and it feels like this is going to be forever but it's not the stuff's going to get repaired the emergency plan will be in place we're going to get this health situation figured out we're pulling for you nona that's so great we love you nona listening to the ramsey show i'm your host today jade warshaw and co-hosting right next to me i can't believe it george camel in the flesh you better believe it believe that thank you george for hosting with me today it's's been fun. It's a pleasure. I learned that you have a new tattoo on your arm. I do have it. It's a temporary tattoo. I want my mom to know I don't have any

tattoos, mom. Don't worry. But I did it for YouTube. I did it for the likes, you know, do it for the story. Do it for the story. So you'll have to tune into the YouTube channel to see when that makes a cameo. I want you to do sparkly. Let me just put that out there. It is very sparkly. I have so many questions. I want you to like rip it. America's not ready. Also, we're airing on TBN and that's a family-friendly network. So we want to keep it that way, Jade.

Well, George, all you have to do is flex your bicep and it will rip right out of your shirt. Even the idea of me flexing a bicep is generous to call it that. But I appreciate that, Jade. Well, if you are listening for the first time, thank you for dealing with this. We're just shooting the breeze here. But maybe you you are listening for the first time, thank you for dealing with us. We were just shooting the breeze here.

But maybe you've been listening for a little while, a couple of weeks, a couple of months, and you're like, I really like this Ramsey show. But sometimes you guys say things and I'm like, what does that mean? I hear you guys talk about the baby steps. I hear you say funny phrases like, debt is dumb, cash is king,

or beans and rice, rice and beans. And I just, I got the FOMO, right? I want to know more about this. If that's you and you want to take a deeper dive into the Ramsey whole deal, whether it's the Ramsey Show, Ramsey Baby Steps, all of this, go on to ramseysolutions.com and all you have to do is click that get started button. And we're just going to help you figure out what's your best next step for your financial journey that's based on exactly where you're at today. And along the way, you are going to learn the lingo. You are going to become one of us, a Ramseyette, as somebody said the other night.

Join us. No, that's very weird. We are normal people, not weird in that type of way at all. Well, maybe George is a little bit, but that's RamseySolutions.com. And remember, click the Get Started button and, but that's ramseysolutions.com. And remember, click the get started button and then you can do that. All right. Let's talk to William. William is in Chicago, Illinois. What's going on, William? Shy town? Hey, Jay, George. My question here is, I'm, I want to know, I'm struggling to budget for Baby Step 6,

kind of getting a good balance between enjoying life and completing Baby Step 6. I'm currently on two, but I will be able to get through three, four, five in the next month or so. Whoa. Wow. Is it like a windfall? What happened? I knew you would go there. But yeah, so I got,

I have 50K in liquid. I got a vehicle I'm going to sell. It's a toy car. It's got about, I got a, I have a car loan for it. It's 40K, but it's worth about 80.

Wow. So it's worth 80. I owe 40. So it's going to give you what you need. Yeah. Pay off my wife's student loans. She's going to be graduating. So I think that's what I will do with that money

since I'm kind of all in on the baby steps now. That'll take care of all the debt. I've been saving 15% plus throughout a couple years already before the baby steps. So about $225,000 on my 401k already. And I've been doing a little bit of saving for the children's, for the college fund. How many kids do you have? I have three now. One is going to college this year. The other one's going to college next year. My commitment to them was two-year community college.

I will pay for it. Love that. Out of pocket, cash flow it, and then you guys can work and cash flow it yourselves. Come on, William. That's what I'm talking about. That's the move right there. Love it.

So what's your household income? So average $250 a year. Wife's going to graduate, so she's going to be a nurse practitioner. She's going to bring in some good cash. Wonderful. She's a nurse now, so she's bringing in a decent amount every year, but she only works part-time. But she'll be able to go to full-time. That's great.

The goal is baby step six, but again, how do I enjoy life if I am in a decent situation? Sometimes I feel like I am, and don't know if I am in a decent situation, I would sometimes feel like I am. With your income and the fact that you're about to be basically through baby steps two, three, you've already started on four for all intents and purposes, but you're in great shape with that income. And, you know, we always say that the first few baby steps are about being super intense and going hard and gazelle intense and rice and beans. But where you're going to is going to be way more about intentionality. I love that you have a plan already in place for baby step five, which is paying for kids college. And then going into six, it's about looking at your margin. I mean, you're going to continue to budget and do all of those smart habits that you've put in place. But then you're going to

look at your margin at the end of the month and go, okay, we've got X amount of dollars. How much do we want to put towards the mortgage? Because we do need to put a fair amount towards the mortgage and work towards paying that off. But we've done the work, so it's time to live a little as well. And so there is a balance there. And it's up to you and your wife really to decide what that looks like. Is it a percentage game where you go, hey, whatever is we're putting 40 to the mark to the mortgage extra and then the other 60 we play with and we're doing this and that with that it's really up to you how you want to i mean george how did you how did you decide my wife and i were extra weird so we went intense because we just felt like it and we don't we didn't have

kids we had very little responsibility and so we paid our mortgage off in 26 months we also got a very reasonable modest home modest mortgage so what's your mortgage william i'm on a 15 year uh mortgage my my loan is 170 the house is worth 400 dude you're gonna pay this thing off legitimately i'm my guess is two and a half three years yeah and that's like you're still living life i'm thinking but i don't know if if that that'd still be too aggressive or or well can i throw something out there to you william can i can i just float something um this is this is jade talking sometimes i feel like when people don't have to have much of a journey in the debt payoff right they don't have to go through that you know three years of intense like paying it

off right you might be more likely to do that on the mortgage no you'd be i have been the last year i i mean i had a 401k loan i had okay you know so i've been knocking them down i mean, I had a 401k loan. Okay. So I've been knocking them down. I mean, I've had some good income, so I've been doing that for the last year and a half. Oh, okay. So you have been on that tip. Okay. Here's what I, like Jade mentioned,

I just like having goals. Say we want to save 10,000 for vacations. I'm going to create a sinking fund in my budget and save up 10,000. We want to upgrade our clothing line item. Great. Let's upgrade that. And whatever's left, we are going to dedicate towards the mortgage. So that might be for you guys. Let's

say you bring 12 or 15K home a month. We're going to dedicate six grand extra on top on the mortgage, and we're going to make that auto pay. And that's going to be our goal. And if we can increase that at some point, that's cool. But that, at least we know, is going to get the house paid off in three years. Yep. Yeah. The point is just being intentional with whatever you decide. Like George said, I love that idea of the sinking funds, but, you know, still living some of your life too, because the fact is you have done well, you know, and we don't want to take that part away. You know, I think sometimes, George, people think that we don't want you to have fun with your money. We just want you to pay off debt and like keep your head down. And, you know, but in this case, William, you've done that.

You're making a good income. The fact that you're calling it, you know, you've got a plan for college. You're doing all the right things. So, yeah, like George said, let's bring up the vacation budget a little bit. Let's bring up the clothing budget a little bit or maybe the go out to eat budget. And in the midst of that, we can also pay a full extra payment on the house or two full extra payment, you know, whatever that looks like for you. And that's really, really exciting. So very well done. Yeah, that's a great goal to have.

And most people pay off a mortgage in 30 years if they're lucky. If you're following the Ramsey plan, we found that people actually pay their mortgages off in about seven years following the baby steps. In our millionaire study, we found that millionaires on average pay off their homes in 10 years. That's right. So anywhere between seven and 10 years, you're doing really well. If you beat that, you're just super weird. And with that kind of income, those numbers and low mortgage, high income, that thing's going to get knocked out in a few years, even with vacations and sports. There's only so much stuff money can buy. That's true. I like having freedom, you know, in that windshield.

Yeah, I love having a payment. Yeah, and I think, you know, what I was saying to him before is it's okay if you and your spouse decide that you want to go hard on paying off that mortgage and just being aggressive about it, that's your bag too. And if mama needs a pedicure, get her the pedicure. Okay. Get her the pedicure. The mortgage can wait another day.

I know, right? Have fun. Live and give like no one else. That's baby step seven. You'll be there in no time. That is right. I love it. Well, that does it for this hour.

Guys, be sure to join us next time on The Ramsey Show. Hey, what's up guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.