The Ramsey Show - App - The Borrower Is Always Slave to the Lender

Episode Date: October 18, 2024

Welcome to the Ramsey Show where we help you win in your life. We want to help you win with your money. We want you to win in your work and we want you to win in your relationships. The phone number for you to jump in so we can coach you up today is 888-825-5225 888-825-5225 Alongside the really preppy, I mean she's rocking an early 90s vibe today and I'm here for it. Little West Philadelphia born and raised.

Come on. Okay. I see what you did there. She is the one, the only, the incomparable, my good friend, Jade Warshaw. And I'm just trying to hold up my side of this desk here today. I'm Ken Coleman and I'm going to guide you through the next three hours. And we're here together to help you. Jade's going to lead out on what do we do with that money, the budget, and get rid of debt.

And I'll help out on how to make some more income, and we'll weigh in together. You ready to go, partner? Let's go. Giddy up. All right, Nicole starts us off in Cleveland, Ohio. Nicole, how can we help today? Hi, Jayden, kid. Thanks for having me on. I have a situation where I received a little bit of money from a car accident settlement. And at the time, my girlfriend was helping me out.

She's a lifelong friend, graduate class of 91, Willoughby South High School. All right, shout out. I had given her, she had asked me if she could borrow some money upon receiving it. And she had been such a big help. And I said on one condition, we went and we wrote it up and we got it notarized, um, and everything, you know, our agreement between ourselves. And so, um, she had a copy, I had a copy, um, right away, she defaulted on it due to, um, uh, losing a couple of cleaning accounts. And, um, so, um, I tried to establish some other kind of understanding of how I was

going to get my money back. Well, it started to become an issue and then the less, you know, return calls anyways, long story short, um, the last interact, this happened on September of 2023 and it was a sum of $3,000. I had gotten approximately 290 of it back, which was from very small increments over cash app from her in this last 12 months, 13 months, I should say at this point. Anyways, we had a falling out at the end of August two months ago. Over the money? The falling out was over the money? Yes. Okay.

Yes. And I knew she had had some health issues. Well, it came to my attention on October 5th, on September 1st, two months ago, that she had passed away. Oh, wow. Yeah. So sorry. And thank you. I'm sorry also to her and her family and everybody involved. She will be greatly missed.

But besides the point, you never know when it's the last time there was terrible things said, but we go back so far that I know that people say things when they're upset. Anyways, it wasn't a good conversation. And I am just wondering what my options would be to go forward. I know that she was a business owner. Go forward with what? Well, does the debt go away with her? Or she does have a property. I do believe that her mother's on it with her,

but she was the one that was residing in the home. Do I have any legal footing to try to obtain the balance of this loan that her and I had legally written up and agreed to? Or would it just lie within a lien on this property? Nicole, I got to be honest with you. I'm struggling with this one. Me too. Thank you.

I'm struggling. I hate that your friend passed. I hate that it happened on bad terms. I hate that you had words. She did owe you money. And Ken, feel free to knock me back to my senses on this but first of all i gotta know what you're saying first i think you were i think you and i are on the same wavelength is my guess i think that if i'm just talk from jade i feel like if a buddy of mine

that i was really close with yeah and we fell out over three thousand dollars at this point twenty seven hundred dollars and the last it caused us to fall out. The last words that I said to her were ugly and vice versa about this money. That would be my biggest sign that I need to let it go. I'm with you. I need to let it go. And it's caused enough heartache and pain that that's just me. Nicole, I would just say very quickly, we are sorry, very sorry for your loss. But I will tell you, our studio audience, those that watch us on YouTube, the cringe factor for Jade and I was equal and very high. And I do not say that flippantly. I'm not saying that to insult you.

I'm saying that we're completely objective people. And you called. And I will tell you, I'm saying that we're completely objective people and you called and I will tell you, I cringed. My face cringed and so did Jade. And I couldn't agree with Jade more. I think this is, first of all, I'll just give you my best. I'm not a lawyer. So number one, it doesn't feel right. I agree with Jade. She said it perfectly. I endorse everything she just said. But my guess is that you don't have any legal standing either. And I don't even think you should pursue this. I think you need to let this go. But I don't think you have any legal standing in this situation. And the time and money it would take to try to play this out with her estate,

you're going to end up spending way more than $3,000. So the studio audience is nodding their head. And here's what I think. I think that's right. Nicole, to your credit, let me say it like this. What this is telling me is that you're not a bad person. You're not nothing like that. We're not trying to be ugly towards you. What I think is that you're in a tough financial situation. And what I know from personal experience is when you're in a tough financial situation. And what I know from personal experience is when you're in a tough financial experience, it clouds your judgment. And I think that that's part of what's going on. And my guess is that if everything was on the up and up for you financially, and you felt more comfortable in your financial setting, this would have been a no thing but a chicken wing to you. Is that true, Nicole? Yes, sir. Yes, ma'am. Yeah, she's spot on. Let's help you there.

How can we help you there? We got a couple minutes. How can we help you? What's your financial situation? Give us the super quick rundown. Oh, well, she knew what my situation was. I had just recently received a moratorium from over the whole COVID situation with my home. I'm a single white female. I have nobody. I lost over 27 people since COVID all hit. Oh my gosh. So I'm on my own.

I'm on full disability. She knew that that money was going to go towards getting my mortgage back on track so um is it back on track yet did you get the mortgage back on track no i'm i'm probably going to have to um forfeit you know yeah the situation which is okay because i've already said it out loud um yes but it's painful and and um when you say cringe i just want to um be clear because you said no insult you know which is not supposed to be and um i did originally went um looking around to see what was out there even to even research any options i would have, and I came across the Ramsey show.

Yeah. And as I was listening to that particular episode or whatnot, I heard a similar situation. It was, there wasn't nobody who passed away, but Mr. Ramsey mentioned that, you know, when you loan money to somebody and it's especially, you and especially it's a personal relationship. It changes things. Hey, Nicole, I hate to do this to you. We are running up against a commercial break, but I want you to hang on the line. Kelly, I would like to gift her a session with one of our financial coaches.

She's in a really tough spot, and they can really help you see what all your options are. So, Nicole, hang on the line. We'll take care of that for you as our gift. Hang in there. Better days are ahead. We'll be right back. 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. CHM is a health cost-sharing ministry that's helped hundreds of

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888-825-5225 is the phone number to jump in here on The Ramsey Show. We want to coach you up so that you're winning in your money and in your work and in your relationships. All three of those areas are interconnected. If you're losing in one of them, it's dragging the others down, and that's why we have that focus. I'm Ken Coleman. Jade Warshaw is in studio as well, and we're going to help you out. But first, we've got to tell you about this. Boy, we're excited. COVID knocked out the first Ramsey Cruise, and it's back. And we are getting closer and closer to sellout.

And if you haven't heard about it or you've kind of heard it in passing this is your reminder it's called the live like no one else cruise setting sail March 22 through 29 it's a premium Caribbean cruise we're hitting all the spots Turks and Caicos Puerto Rico St. Thomas in the Bahamas on Holland America's uh new Staten Dom ship I had to say it that way. It's the way it's written. I don't know if that's how it's pronounced. All-inclusive restaurants are great. Great content, including all of the Ramsey personalities. Dave, John, Jade, Rachel, George.

I think me. Am I the last one to mention in the list? Yeah, you're in there. Yeah, I'm trying to be. First shall be last, last shall be first. Okay. Some of that going on. And it's going to be a lot of fun. You're going to mention in the list? You're in there. Yeah, you know, I'm trying to be, you know, first shall be last, last shall be first. Okay. Some of that going on. And it's going to be a lot of fun.

You're going to do your magic act? If I had any magic tricks, I'd do it. But I am going to be holding court at the pickleball court. I'm a big pickleball player. So if we've got any pickleballers on the cruise, it's going to be fun. Love that. A little physical activity. I'm going to get you out there.

Yes. Because we've played a few times with friends and couples. And, you know, I think we'll get Sam out there as well. If there's basketball courts, we should do a basketball tournament. People don't realize that Jade has game. And so, yeah. Yeah. We could do a couple two-on-two, three-on-three tournaments.

That'll be fun. So move right now because it's going to sell out. RamseySolutions.com slash Cruz. RamseySolutions.com slash Cruz. I i'm just curious we have an awesome studio audience today just fabulous group of people out there anybody out there going on the cruise oh one hand in the back no it's a student oh yeah i don't know i don't know if he's going or not he may be messing with us i met someone a couple of days ago. I did too. Who was on the cruise. Yeah, I said, we'll see you on the cruise and all that kind of jazz.

There was one guy on the front row who gave us a, I don't know, maybe he's got to make some moves. Are you thinking, listen, we're 90% full. It's now or never. Yeah. We'll talk to you about it on the next break. That's right. Okay, we've got a couple brochures. It's going to be great.

All right, to the phones we go. Stephanie is in Phoenix, Arizona. Stephanie, how can we help today? Hi. Thank you so much for taking my call um my husband and i recently decided to kind of take our debt seriously and crawl out of all this mess and so my question specifically is around student loans currently i have 10 different student loans i never refinanced them once i completed their degree or consolidated them so i I kind of left them as is. They all have variable interest rates, and I just make one-month payments. So the question is, is consolidating these loans a good idea,

or should I just do the snowball method and just kind of knock them out as I go? They're variable. Are they private? They're all federal, but they all have a different interest rate, which is what I mean by variable. Oh, okay. They all have a fixed interest rate. They all have different interest rates. Okay, cool. How much is it total? $75,831.55.

Okay. And just real quick, what's your income combined? My husband and I make around $200,000 a year combined. Okay, great. And this is the only debt? We also have about $20,000. Well, I mostly have the $20,000 in credit card debt. And then we do own a home. Okay, but besides the credit cards and the student loans, no other consumer debt? No, all our vehicles are paid off. Okay, great. No private loans or anything like that.

Okay. So to answer your first question, I would not consolidate these. I know all the interest rates are different, but you kind of have the perfect situation for a debt snowball because the purpose of the debt snowball is you list them smallest to largest, and then you make minimum payments on everything which in this case since they're federal student loans you can make the minimum payments quite small right and then you can put all of your surplus money all your extra margin to the smallest debt and knock it out really fast and when you can do that you start seeing it's like it's like me when you make a checklist and you get to check it off your list, you feel so good on the inside.

This is that times like a thousand. So what's your smallest of the big chunk of them? What's the smallest one? It's actually pretty small. It's only a thousand six hundred and eighty nine. But then my largest goes up to sixteen thousand. OK, I love I know that this sounds wacky because I'm saying I love this and we're talking about debt, but this is about as good as it gets if we're talking about feeling the impact of the progress that you're making over time. So the smallest one is $1,689.

What about the credit cards? Is there anything that would go before it on the list? That's smaller? Yeah, well, kind of. I was planning on paying all the credit cards off first before I tackled this, just because the credit cards have an interest rate of like 34%. But yeah, I have a couple credit cards that only have a couple hundred dollars on it that will be paid off in the next month. Okay, so I could understand your idea of wanting to tackle the interest first.

That would be an avalanche method as you look at the interest rate. But the truth of this is, Stephanie, when we have done the research on who actually completes the task of paying off their debt, it falls with the people who do the snowball method because it's psychological at that point. They feel, you know, you get the dopamine hit. You're like, I can keep going and you keep going. And so for that reason, this is one of the few times we talk a lot about math and numbers, Ken. This is one of the few times that it's not necessarily a mathematical equation. It's more about you feeling motivated

and you continuing to the end. So if I were you, I'd list all of the debt, all 10 student loans plus the credit cards in order from smallest to largest. Like I said, if you were to consolidate those student loans, it would be one giant payment. in order from smallest to largest like i said once you can if you were to consolidate those student loans um it would be one giant payment and when it's one giant payment yes you'd have one one uh interest rate but the feeling of having to attack a 75 000 trust me i've done it before

and it is not fun um yeah it's better to be like okay first i first I do 16,000 and then I do 2,100 and then I do three, like that helps you mentally. So I would not consolidate in this case. Yeah, I stand by that. I approve this message. I love it. I'm Jade Warshaw and I approve this message. That's good. Yeah, Stephanie, I agree. This is all about momentum. It's all about psychology, you know, whether it's trying to lose weight, start working out, putting on muscle, developing a new skill, knocking out a large term paper or some type of research project. The bigger that it is, the more intimidating it is. And you've got to just put it into bite sizes. And so I couldn't agree with Jade anymore. You'll get this. You'll get there. You really will. Yeah. We consolidated loans, Stephanie, my husband and I had 280,000 of student loans. And some of them we consolidated because we thought, oh, I'm going to get the lower interest

rate. And let me tell you something that I wished I hadn't done that. I wish that I had kept them in smaller pieces so that we could have felt. Let's get the real, real, take us back. Take me back? Yeah. Take us back. What are some real raw thoughts you had? Real raw thoughts are, and you have to guard against this. When you start getting towards the end, especially with student loans, our last loan that we paid off was about 91,000.

And we were able to get them to take some of the interest off. So it dropped down to 71,000. But at that point, the payment was low. And it was like, well, why should I can't remember what I think it was like $200 or 200 something dollars a month. And it was like, why would I pay off 71,000 for a $200 payment? And so you have to remind yourself what the bigger goal is. That's real though. Yeah, it is real. By the way, that right there, if you would allow that to stay in your head,

that makes a lot of sense. It does. It does. Now, the other side of that, which may not be the case for some people, but we did know that the payment plan we were on could expire. And if it expired, the payment would be $900 a month. But just letting you know, with the way these federal income plans are, if you go on the save plan, yeah, depending on what she makes, $200,000 a year, yeah, those student loans could probably be very, very cheap. And so don't get lured to sleep by that. That's right. I always kept it in the, I'm in the extended repayment plan.

I'm going to pay him till I die kind of plan. And the payment isn't, you know, it's $500 a month. Yeah. You know, it's not bad when I have, you know, everything else is manageable. Yeah. Okay. All you have to do in those moments, Ken and Stephanie, is do the math on the opportunity cost. What $500, you know, $569, what that is might not feel it in your budget.

But if you start thinking about what it would be invested over time, then you see the true cost. So true, man. It's not about the math. It ain't about the money, money, money. There it is. She sang yesterday and she's already singing today. Can you do something to me? Listen, you never know where this is going to go. Maybe a duet. Don't hold your breath. This is The Ramsey Show. The Ramsey Show continues from our Nashville headquarters. Thrilled to have you with us. 888-825-5225 is the phone number. Jade Warshaw is alongside. I'm Ken Coleman, and we're here for you. Let's go to Fredericksburg, Virginia now, and Tiffany. Tiffany, how can we help today? Hi, Ken. Hi, Jade. Thank you so much for taking my call. You bet. So my question, so I'm mentally exhausted. I feel like every time

I take one step forward, I take like four steps back. So I have a 2011 GMC Terrain that's becoming a lemon. I only owe $800 on it, but the repairs are like almost $1,000. And that's how much it's worth. When I look it up on Kelley Blue Book, it has a lot of cosmetic defects. So I know I won't get much for it. It's worth $1,000? Yeah, it's worth about $1,000 on Kelly Blue Book. And it has dings and dents on it, you know, makes strange noises. And I just know, like, I'm trying to figure out, should I just keep putting money in it? No.

Or should I get a new car? Yeah, I mean, you just laid out the math for us. You owe $800. It's going to cost $1,000. So at the very least, you'd be putting $1,800 more into this vehicle, but it's only worth $1,000. So that math doesn't math for me at this point. What do you have saved? I don't have anything saved. Nothing at all. I have $20 in my account right now. And the car is at the mechanic right now. And they're still assessing what the issue is. It just keeps shutting off. I don't have anything. I've been there with $20 in my account. I've been there with 20 cents in my account. So understand who you're talking to. And I know how you feel. What's your income a month? I make about $4,000 a month and maybe a bit more with overtime, but it's about $4,000. Is it just you or husband, kids, spouse?

I do have kids. I have three kids. Don't chew me out, Jade, but I do live with my boyfriend and he makes about the same that I make a month, about $4,000. Okay. You guys share your money or share the expenses? So we share the expenses. We do everything half, but as far as our own debts and things, we're just trying to tackle them separately.

Okay. Good. Okay. Now I've got to jump in on this one. Yeah. Jump in, Ken. Because they're sharing expenses, which we're not fans of. Yes.

But in this situation, he knows how desperate you are with this car, correct? I hope that he would step in. Has he offered? You know where I'm going, Jade. I mean, you need help. Yes. So he has offered the plan, and we spoke about it today. He wants us both to save up to get one vehicle because he has a company car,

but we can't use that for everyday getting around with the kids. So he's offered, like, hey, let's come up with a plan and save up half this amount and half this amount, and let's just get one family vehicle. Well, I'll step out of that one, but I mean, I'm trying to figure out this interim situation. I'm guessing he's helping you get to work. How are you functioning so that we keep our job and can take care of things while we're figuring out what we're going to do to get another car? What's the plan? He's a HVAC tech, so he only has a company van. That's the only thing that he has. He cannot use it for personal. He can't take you around. Got it.

So how are you getting to work? So I've been speaking with my supervisor and he said it's okay for right now for me to work from home. I'm a housing coordinator for a non-profit. So he said for right now, it's okay that I work from home. So that's what I've been doing. Okay. What's it cost for the, what's it cost bare bones for the house to function? I know you got, you bring 4,000, he brings 4,000, but what are the household bills as a whole? So the rent is 2,400. Okay.

Utilities probably are about $300. Okay. Utilities probably are about $300. Okay. And then we spend about $400 on groceries. We're trying to figure that out. Okay. But that's what we do for groceries. $400 a month for all those people? Y'all are on the frugal, frugal, frugal McFrugal.

Holy moly. Here's what I would suggest, because there's part of this that, I mean, we can get into this later on if you want, but there's part of this that, yeah, it's not a great situation how you guys are combining. It's a little confusing. However, what I'd be saying is,

hey, I want to use my money to replace my vehicle. You make enough to cover the living expenses for this month. We both live here. Why don't you cover that? And I'll take care of me getting my vehicle. That way, if somehow, if this ever pops up again, if for some reason down the line, things don't go the way we all are hoping they go,

you know the vehicle is yours and you bought it and you paid for it. If that makes sense. So I would take, I would ask my boss, I'd say, can I have, I need six weeks because I need to save up for a new vehicle and I need $6,000 to do that. And I would get myself in a $6,000 vehicle. And then as part of your budget, I would be having a line item there

that I can upgrade over time because I'm not going to stay in a 6,000 vehicle for long. My goal is going to be to get to a 10,000 as quickly as possible. The good news is if you buy yourself a $6,000 vehicle in the next six or seven months, it won't have gone down in value much by the time you trade it back in. So you're trading up slowly and incrementally. That's how this works. And my goal would be, like I said, for you to kind of get into a $10,000 vehicle that you can kind of coast in for a while while you clean up whatever other mess that you have going on. So how would I do that? Because I'm only paid on the 31st and the 15th of every month. And my minimums alone on all of my debt are $1,500. $1,500. So that means instead of having $4,000, like I thought, what are you going to have? Uh, $2,500?

Maybe a thousand, a thousand dollars. Um, if that is probably even lower, um, a month. Where's the other money going? Because remember the plan is to tell, um, your boyfriend, Hey, you got to cover, you got to like, I'm not paying, I can't pay my half of the rent. You got to, you got to cover that so I can get this car. Because you told me that you guys spend about $3,100. That's about the bare bones budget to make things work. So he should be able to cover that. And then you're going to have to cut back everything. And, you know. And may I say,

you're going to have to get another job you're working for a non-profit which I think is fine it's lovely but non-profits are usually capped in the amount of income and I love that your boss is giving you a little bit of leniency here you're working from home but that's during the day um boyfriend if he's in it if he's in it to win it he'll watch the kids at night so you can go out and hustle. And you've got to work maybe for two, three, four, five, six months. I mean, I know, Tiffany, what I'm describing here doesn't sound fun, but you've got to increase your income because of the very thing you just brought up. You've got to make a lot more extra income to get to the car.

And I'm just messing around here. I went to a well-known used car site here and you're somewhere near Fredericksburg, I'm guessing? Yes. All right. I'm seeing a 2014 Nissan Sentra, 112,000 miles, $42,995. You roll up with $3,500 in cash and tell me your situation, you're driving it off the lot. I'm just giving you one example. Yeah, there's cars out there for cheaper than what I said. Yeah, and again, we got to check that and all the things but i'm just i wanted to give you a dose of reality you have got to have another job if not two extra jobs right yes boyfriend's got to step up yes we're playing house right now and it's time life is real and here's what i want

to say because ken you're ken's hitting on something i want to say this tiffany and this may not be you and it's probably not, but it's worth saying for the listening audience. Are the kids, you guys, is together or did they come from your side or his side? Together. They're yours together. Oh, all of them? Yes. What are we doing here?

Y'all got to get married. Get to the courthouse tonight. Get to that chapel. Protect yourself is all I'm saying. This is a protection for you Y'all got to get married. Get to the courthouse tonight. Get to that chapel. Man. Protect yourself is all I'm saying. This is a protection for you. This dude needs to step up. What are we doing?

But what I wanted to say, and this is not necessarily Tiffany, but here's the thing. If you're in a situation, you're living with someone, especially, I can only speak from the female side, especially if you're a female, you're living with someone, there's kids involved. Maybe they're your kids. Maybe they're yours together. If you can't and you're not married, if you can't afford to make the household run on your own, it sets you up to feel like you have to,

that you're stuck there. That's all I'm saying. And some people will stay in a relationship that's not necessarily good for them. Not you, Tiffany, not you. Some people will stay in a relationship that's not necessarily good for them because they need the comfort and the support of the finance. And so I hate to see that. This is not Tiffany.

I'm not talking about her. But it reminded me of so many of the calls that we get. And this is why you got to be careful about getting in those living arrangements because it can make you sit back on your haunches financially. Thanks for the call, Tiffany. We'll be back. This is the Ramsey Show. Hey, you guys, I'm not a fan of the big banks, and you probably already know which ones I mean.

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just for Ramsey fans to help you take control of your finances that's fair wins f-a-i-r-w-i-n-d-s dot org slash Ramsey welcome back to the Ramsey show we're here to help you win with your money win in your work and winning your relationships 888-825-5225 888-825-5225 thrilled to have you with us i'm ken coleman and jade warshaw is alongside all right so uh what do we got here? We got a Ramsey Network app question. Is that right? Now, is this audio, James, or am I reading this question? It's just reading this one. Okay, I'm sorry, folks. I didn't do my production notes, and I thought,

I'm not going to try to fake my way through it. I'm just going to ask my erstwhile captain in there, and sometimes we listen to these, sometimes I read them, and I didn't pay attention to my notes. Kids, this is why you study before you take the test. All right? All right, today's Ramsey Network app question. By the way, the network app, I just want to say this very briefly. This is fantastic stuff.

We'll remind you later in the show, but we have just exclusive content over there that only people who have the app, and you can get it in the App Store or Google Play, can listen. It's just a part of the show that no one else can get. We'll remind you about that later, but fantastic app and a lot of great content over there. So this question is from Jane. She asked, after many stops and starts in college and throughout my career, I realized I'm passionate about filmmaking, in particular helping to fight and advocate for people who don't have a voice.

I've since learned that it's hard to make money in this profession. Can you give me some advice on some things that I can do where I can actually earn a living? Oh my, my. That's an open-ended question there. Well, here's the quick advice is you need to find work, different types of gigs in many different lanes that all have one thing in common. That allow you to use what you do best, that's your skill, to do work that you really, really enjoy that produces a result that matters. So you say you're passionate about filmmaking. Okay, we love the artistic filmmaking.

And then you add in the specifics of the results that you want to produce from filmmaking ideally would be to fight bad things, to advocate for people who don't have a voice. So there is an activist, an advocating type of film or art that you want to put out. So for instance, this could be documentary filmmaking, obviously, we see a lot of this. Yeah. And so someone has told told you or you have listened or you have uh started the process of trying to get into filmmaking and what you've discovered and what she's discovered jade is this thing called a ladder yeah gotta make yeah and on the lower rungs of ladder jade we don't make a whole lot of money peanuts sometimes yeah and so if I might could I go back into the way back

machine way back take us way back back in time I'm 31 32 and realize that I really want to go into broadcasting but I do not have a degree in broadcasting I had no experience in broadcasting I just had what I thought was the gift of gap but I mean hadn't tested it yeah i have three little kids you know my kids i do they were littles and that means i got to provide and fabulous wife and a puppy and the whole nine yards in the house and and so um the reality was as i began to do the work like jane had to discover okay what does it look like to work in the film industry what does it look like to work in broadcasting and what i found out pretty quickly was on those lower rungs of the ladder, it wasn't going to feed the family. So what I did is what my advice for Jane is,

or anybody that's listening is, is I had to have a day job that took care of business. And I was then going to have to part-time get into broadcasting get a little experience here get a little experience there and over time step into it slowly in other words embrace the ladder so you gotta have something else to fall back on while you're trying to get into filmmaking so I wish that the advice was clearer I wish it was was better. It's not. If that's what you want to get into, any type of artistic form of telling stories or whatever, if you could find other causes, maybe you go work for a nonprofit. And you actually then begin to do video work for them instead of going into the film industry and then telling stories.

That's about all I can ideate on there. You want to add anything to that without having her on the phone? Yeah, I agree. I think you're right. There's a part of this. You have to pay your dues. And I do think when it comes to the arts, when you're first starting out, there is a part of that dream that you have that you do have to generalize in the beginning because you got to take opportunity. And it's kind of like music artists when they first get signed they have to you know the machine decides what they're going to do it's not until they're in it for a while that they finally get to go now I do the songs I want to write now I do I now I do it my way and so it might be a while for her before she's doing what she labeled here as you know helping people fight

and advocate for people it just understand it could be a while before you do it exactly the way that you want to do it and that's okay you know what song i'm thinking about i don't i did it my way how about that i got yeah my grandfather used to sing that i love that yeah there you go james is so happy good good job ken yeah i thought it was on key actually i thought it was on key a little bit of a crooner kind of feel there. We're going to move on quickly. Paul in Hartford, Connecticut.

Paul, how can we help? Hello, guys. How are you? Good. What's going on? So basically I'm kind of in a predicament right now. Last week we were at a family reunion. Then my dad come up to me and he just basically asked me to take out a loan for him of $20,000. For what?

Just casually. Yeah, just casually. For what? He says he has some business going on. He didn't give me any details. I know I don't need to take the loan out. I just want to know how to basically turn him down without

having any issues. Clearly and quickly. Hey dad, pops, listen. Thought about it for about two seconds. No. Not going to do it. Love you dad. You're awesome. Not happening.

What would you add to that? I thought he was going to say, I just want to ask you guys what was wrong with him. Well, I think he's kind of wondering that too. Yeah. Listen, I'm glad that you know that you're not going to take out this loan. I think the way to do that is just simply say, dad, I don't borrow money and so I can't help you borrow money. That was much nicer than the way I said it. Yeah, right.

No, Paul, seriously. Jade's right. I think you're respectful. Yeah, be respectful. But you're like, Dad, I don't believe in debt, and I can't do this. I'm so sorry. If you want to be really polite and really respectful.

I just roll differently in that situation. If a family member, especially my dad, comes to me, I'm going to be like, Dad, you know what my honest answer would be? This is not what I'm recommending. But I literally would have been like, if he rolled up on me at a party like that, I looked at him and went, do you have a fever? Should you lie down? Can I get you a cold rag and a glass of water?

Have you lost your ever-loving mind? That's what I would have said to my dad. Is this normal? Is this a habit that he'll kind of hit you up for some money here and there? Not me, but some other family members, yeah. Okay, because it felt so casual I wondered if it was normal. Yeah, is it that he

wants you, I'm just curious, is it that he wants you to just fully take it out in your name or does he want you to co-sign or what is it? Fully take it out in your name or does he want you to co-sign or what is it? Fully take it out in my name. Oh my gosh. Yeah. That's different. Okay. Yeah. I mean, you just got to say no. And at this point, resist making it about the details. I know I just asked details, but resist making it about like, dad, you didn't even show me a plan or you didn't even tell me what you want to do. It's not even about that. It's just, Dad, I can't take out debt for you. I'm sorry.

I don't think Dad has a plan. I think if he'd have asked for details, his dad would have told him a fish story. I just don't think there's anything there. Yeah, Paul, listen, we're having a little bit of fun with what is a really tense situation. I just think you've got to take the high road, really high road, but do not have a conversation about it to the extent that when you tell him, you make it clear to him there is no conversation. This isn't like he gets shot at a little bit of a negotiation on this. Yeah. How will he react?

Honestly, I was just shocked. I didn't react at all. I was just shocked because it's a huge amount of money. How will he react? How's he going to react when you tell him no? I'm not sure, but he's not going to be happy. Oh, you're sure? That chuckle was a chuckle of experience. Yeah, it was uncomfortable.

Come on, man. Yeah. Yeah, this is tough. Sorry, man. I hate that that happened. That's awkward. It's an is tough. Sorry, man. I hate that that happened. That's awkward. It's an awkward situation to get put in. Let me take this above Paul real quick.

Give our audience 20 seconds on why they should never loan family any money as a general principle. Oh, well, what Dave Ramsey would say is it makes Thanksgiving dinner taste different. I've done it, by the way. I've borrowed money from my mother-in-law, who is a wonderful, generous woman. And it's not on her. It's on you. Feel it. No matter what.

It doesn't matter how great or nice they are. You feel the weight. Don't do it. There you go. Great hour, Jade Warshaw. Thank you, America, for listening. This is The Ramsey Show. This is The Ramsey Show, where we help you win in your life.

We help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the phone number. 888-825-5225. Alongside Jade Warshaw, I'm Ken Coleman. Thrilled to have you with us. We're here to coach you up. We're going to start with John in Spokane, Washington. John, how can we help today?

Hey, John. Hey. You're John. I'm Ken. Yeah, Ken. Yes, sir. Worked too hard to be this broke. You know, you talk winning money.

I'm just hoping maybe you guys could look through my situation and figure out why I'm not winning. Okay. You broke up a little bit, so you're saying you're feeling behind financially. You work too hard, but you're not making enough money. Is that what I'm hearing? Exactly. Okay. What kind of money are you making?

What's your income? Oh, I make about $75,000, $77,000 a year. Okay. And give us your financial picture. What kind of debt do you have? I got about $5,000 in a utility tractor and then a house payment. That's it? That's it.

What's your mortgage payment? Oh, I pay about $2,300 a month. Okay. And your take-home is about what? Well, I work, I'm a farmer, so I work for a farmer, do a little farming on my own, so it's very variable, you know, seasonal. Okay, gotcha. What's a bad month and what's a good month? A bad month is probably about $3,000 and a good month is probably six or seven yeah so that house

payment jade feels like that's that's the issue yeah um okay just so i can understand on a on a good month the seven thousand dollar month is what's more common the seven thousand dollar month or the three thousand dollar month i got three, four months in the wintertime that I'm in that $3,000 range. And the rest are good? $7,000 or a little bit under? Yeah, probably four to five is fairly common. Okay. Yeah. If that's what's common, four to five, then this mortgage payment is what's getting you. And that'll get you, by the way, even if you don't have debt, because you're virtually debt free. You know, you owe $5,000 on a trailer, big whoop.

But in this case, because you don't have any margin, you're going to feel it. Because what's the payment on that tractor every month? That's about $575. $575. So that will free up some air for you to breathe when you pay it off, and I think you should pay it off as quickly as possible. But this mortgage... A little bit more insight on that is my wife is running a horse boarding training facility on our property, 15 acres we got there and um she's been paying that out of her horse boarding

income she makes probably 15 20 000 profit off of that a year so there's a little bit more income there okay okay so less than 2 000 a month yeah okay about Yeah. Okay, about $17,000, $15,000 to $17,000. You're still somewhere between $90,000 to $100,000 combined, right? Yeah. Yeah. Okay, so what I think is the issue here, are you guys combining your money or is it separate? I have my business, She has her business.

And then we try to live off of my, let's say, W-2 wages. And it's combined, but it's somewhat separate in the businesses. That's fine. But is there any other debt, I guess? Like, does she have debt? No. No debt. Okay. So it's just this five thousand dollar tractor so even on a bad month you should be bringing in somewhere between i don't know forty five hundred dollars a month um and that still causes this mortgage to feel it um and you're probably the you're probably making up for it on the good months right you're you're kind of playing catch

up when you have a good month so you never really get ahead is what it sounds like. Exactly. Well, the good months I'm saving up for kids tuition, that's about $8,200 a year. And so I try to save as much as I can. We're just, you know, I'm working 3,500 hours a year and we're constantly broke. And I'm just, I've been doing it since I was 16 and I'm just tired I know and here's the hard here's the hard part from where I'm sitting I know your work is a labor of love and you've done it all these years so from where I'm sitting it's hard for me to tell you how old are you 34 34 okay well then now honestly now it's not that much harder for me to tell you I thought you were a little bit older.

But you're going to have to switch careers. Now I'm just going to tell you. I think you're going to have to switch careers because you're either going to have to make more or you're going to have to sacrifice in this mortgage. It's one or the other. Yeah. Because eating up half your money. Yeah. And a real quick question on that. The mortgage, is that on a larger property?

Is your wife boarding the horses? That's why we've got all this big old place, so she can board the horses? Correct. Yeah, 15 acres. Yeah, so what could you make on that house if you sold it today? About $500. My man. Talking to you real, real right now, you're exhausted.

And I love that your wife wants to work with the horses. Sounds like that's a labor of love, but she can work with horses another way on somebody else's dime. But that property is eating you alive, and it's also a wonderful exit strategy. And I agree with my colleague. I think it's time for you to change the type of work you're doing i think you can do similar work but you need a better paying situation um where you're not exchanging so much time for this money and i think she's absolutely right but i would sell the house and and and now all of a sudden we're out of that and we got $500,000. That's not chump change.

It's sure not. To downsize, maybe pay cash and have no house payment at all. And you change your working situation to where you're making decent money. And you're making decent money, but it feels like the exchange, it feels like the time you're exchanging for that money is not worth it i think that's clear so i would make those two changes i think jade's absolutely right now this is not for the faint of heart because you have to sit down with the wifey and say hey but listen i don't this is a new life that would be a new life for you it's a new

life but i still think she can be involved with horses and maybe somebody pays her and it's not it's not an expense for you guys anymore does that make sense yeah i you talk about changing careers though and it's this is all i know no no no no okay well let's say this i don't know that it has to be a complete lane switch but i think it needs to be a um uh change your situation. In other words, when you say that's all you know, how would you describe it? Give it to me in two or three words. All I know is blank kind of work. What would it be? All I know is farming. It's what I've done since I was a teenager. Got you. And I sucked at school, so. That's fine. Let me introduce you. I understand,

but what is the number one skill, and you got to be real quick, what's the number one skill you've developed as a result of farming? Be more specific. What is that skill? I don't know, raising a crop. Okay, great. I would say logistics. I'd say project management. I'm going to go a little bit further. Process. I'm going to go really, really deep on this. I think that you know process and you can repeat process. I think you need to get in the trades, my friend. You need to get in the trades or you could be making high, high nineties, six figures, electrician, plumber, HVAC. It's all process work. If you can raise a crop, you can learn how to fix a machine.

That's what I'm saying. Don't say you're not educated. You're just educated. Yeah. And you also, you Olaid me too, my friend. You got to have a hard conversation with the wifey. We got to sell that house. Change our living situation soon.

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yeah good afternoon ken i just want to say that i really appreciate uh the free resource that you guys provide it's a lot of wisdom and guidance for some young people like me and people that are just looking for help. Well, thank you for saying that. We're glad you're here today. How can we help? Yeah. So I'll give you my situation and then I'll ask my question at the end. So I'm 24 years old. I'm on baby step 3B kind of slash 4. I don't plan to buy a house in the next 18 to 24 months. So currently I'm renting and putting 15% of my salary towards retirement. Right now I've got 4% in my HSA and 11% towards my Roth 401k.

And so if you were in my shoes, would you recommend that I continue to put that 15% towards a retirement and then have a smaller amount set towards a down payment in the future? Or would you put either more towards the down payment or even more than 15% towards retirement since I'm not planning to buy in the next year or so. When are you planning to buy? If you had your way, when would you want to buy? Probably two years from now. Okay. So I just reverse engineer it. I'd say if I want to buy, if I want to be sitting in the house two years from now, then I'd ask myself, okay, how much would that house cost? That way I can

figure out what the down payment would be. And then I can work it backwards and myself, okay, how much would that house cost? That way I can figure out what the down payment would be. And then I can work it backwards and say, okay, let's pretend I need to put 80, let's pretend I need to put 80,000 down. How long is it going to take me to get that? And if you run that math, you might find, okay, I do need to start now. And something tells me, yeah, if you want to do it comfortably, you might want to start now. And here's the thing thing here's your options you either start now and you do a mix of i do a little bit you know you've done

the calculator and say okay i'm gonna put um five hundred dollars away every month towards this and the rest uh goes towards baby step four you might find you can do both. You might find that you can do the full 15% and put aside. I was thinking, can we dive into your numbers a little bit, Isaac? What is your take home? What's your take home? I was actually just about to mention that I've got the Ramsey Solutions calculator in front of me. I've got how much can I afford? And so with my take-home pay per month, I'm bringing in $4,800 a month. And so that would allow me, according to your guys' calculator, to afford a house that's in the range of about $116,000. So that's $1,200 a month for mortgage. Yeah. But before we get to that, I want to stay on this line here.

So $4,800 a month is your take-home. How much margin do you have after you take care of all your necessities? Because you started off the call saying, I'm in 3B, 4, and I'm just curious what kind of margin you have after taking care of necessities. Yep. Just under $1,300 per month. Is that including the 15% to retirement or is that excluding that? Yep. Oh, well then I'm with Jay. Including the 15%. And then I've got,

that's just over a thousand that's going towards my HSA and 401k. Okay. So, okay. So you're putting around $720 into investing. And then after that, you still have $1,300. I just want to be clear. Yeah. Correct. Okay, so. I think you were on the right track. Yeah, if I'm you, I'm doing both.

How much, when you do the calculator, how much does it say your down payment needs to be? Down payment is $23,300. Okay, and so then run it back. What's that divided by 24 months? Yeah. Well, and so I guess maybe it adds a wrinkle. Maybe it doesn't.

I've got 36,000 currently saved up just kind of for in the future. I might be getting married, might want to have a wedding ring. And that's not your three to six months expenses? That's just extra, extra? Correct. So that's on top of the three to six months of expenses. Are you seeing anybody or is this just hypothetical? That is a bit of a funky story there.

I kind of like to know. I want to know too. Let's prioritize this. Let's pretend we had to make a list of priorities because essentially that's what we're doing. First on the list is investing. That's a green check. Next on the list is, is it a house or is it

the future Mrs. Isaac? Are you asking or saying? I'm asking. You tell me the priorities. Because that lets me know if this $36,000 is up for grabs or if it's not. In other words, are you buying a house for you or are you just going to wait until we get serious and we're ready to get married? Yeah, I've got a buddy of mine from church who's allowing me to rent for relatively cheap.

So currently, I don't see a lot of reason to buy a house for myself um right now and so i've kind of got this uh about 36 000 in a high yield savings account and fortunately or unfortunately it's kind of just sitting there and getting four and a half percent on growth. That's, that's fine. I think for you where you're at, you're definitely at less than a five year play. I think if you were like, Jade, this is more than five years out, I'd say,

go ahead and invest it. But I think it's a less than five year play. And if I were you, I'd, I'd do the priority. I keep investing. Number one, I keep the 36,000 exactly where it's at.

And you could label it wifey, wedding, whatever, life to be, down payment, and then say, okay, I'm also going to save an additional $12,000 each year to put with that so that when the time comes, I can do engagement ring, put towards a wedding, and put towards a down payment. Don't forget the honeymoon. Well, let somebody else buy your honeymoon. That's a gift. Really? I think so. Is that a thing? Quick question with that. Would you ever recommend putting more than 15% towards retirement at this point? At this point, no, but later on, definitely.

The one question I had for you, Isaac, is I thought I heard you say when you told me the mix of what you're investing was, it sounded like you were putting more towards your HSA than your Roth 401k. And that was a question mark for me. Why are you doing that, if I understood correctly? So, no, it's not that 4% towards my HSA. So that's the maximum that I can contribute to my HSA. Okay. 11% towards my Roth 401k. And yeah, my question is, are you, why wouldn't you just max the Roth 401k first? Cause it's the better investment vehicle, unless you have a health situation I don't know about, which is. No, I guess what I had heard is that an HSA, you got triple tax advantage. You do. And so I figured that I would max that out and then put the other 11% of the 15% towards my Roth.

It is triple tax advantage, but all in all, if I were going to go in the order of best practice investing, the Roth 401k first, simply because it is Roth status and it's not just for medical situations. Now, don't get me wrong. Your HSA will convert at age 65 to regular retirement. But until then, the truth is it would be caught up in medical expenses. So unless you were like, hey, Jade, trust me, I need this because I go to the doctor a lot or whatever i would do a roth 401k first and then i'd go to a roth ira and then i'd go to an hsa i'd let that be my final option okay so you would go roth 401k and a roth ira do you have um do you have a match on your roth 401k yep and so I'm already hitting that match. Okay. Yeah.

I'd max that bad boy out, go to the Roth IRA, and then I'd probably do the HSA last. It's still a great vehicle, but for what you get and access to it, I'd start with the others first. Yeah. Congrats, by the way, young man. I mean, listen, you got your act together. I mean, you really do. And by the way, what i was saying but i just

want to clarify that ken i'm just happy you're investing right like if you take that advice you're gonna if you don't you'll be just fine yeah it was just me splitting hairs yeah you're so early in the game and uh so whatever your romantic situation is we're rooting for you on the timeline but i love just stacking that money just stack the money because eventually you're gonna get a house yep whoever the missus is or whatever, you know. And so love that you got the low-cost rent. Love that. Love your discipline.

Good job. Yeah, hope that cleared everything up for you, man. But wow, he's going to be winning big. Don't you wish we had done this earlier? Oh, 23, 24 years of age. Are you kidding me right now? But alas, we're helping others. Hey, quick break and we'll be right back. Don't you dare move. This is The Ramsey Show.

Welcome back to The Ramsey Show. So glad you're with us. I'm Ken Coleman. Jade Warshaw is here as well. 888-825-5225 is the phone number. 888-825-5225. Hey, student loan debt is an epidemic. I don't think that's a breaking news headline there. And defaulting on debt makes you feel even worse. But our question of the day sponsor, YReFi, refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment so you can afford with a low fixed interest rate you couldn't get anywhere else. So go to Yrefi.com today. Yrefi.com slash Ramsey.

Yrefi.com slash Ramsey. It may not be available in all states. All right. Today's question comes from Andre in South Dakota. He says, I'm an entrepreneur and I own a technology business. I want to take courses online related to the service that I provide so I can learn more skills and be up to date on current technologies. The problem is that the courses cost thousands of dollars and I'm constantly being told that I should just watch free YouTube videos to learn what I need to know to further my business. I don't think these videos go in depth enough.

And I'd like your opinion on if I should spend the money and the time it would take to complete the courses. I would still have time to do both my business and the courses. Well, the way the question is set up, Jade, I'm going to answer it. Okay, Ken. Watch the youtube videos and if you watch the youtube videos and it doesn't give you enough you say to yourself this is not enough now i need to go pay for a course so i do think there are some free stuff out there that you can get um but i'm a big proponent when it comes to technology of actually vetting yeah uh let's call it two to three at a minimum of technology schools. I endorse

Bethel Technology, Bethel Tech, and fabulous BethelTech.net. And call them up, tell them Ken sent you. I mean, they've got a nine-month program, costs about $15,000 for a full-blown certificate. They've got a $5,000 program they can take in a much shorter time that's micro-credentials. Both will get you hired. And I've sent thousands and thousands of people there and they're making good money. So it's one of those situations where you don't need a four-year degree for tech. What you need is a quality program. And I'll just give you a couple of characteristics you're looking for. How long have they been around? Do they have a strong placement that they can actually prove to you that they've got a history of placing students that come through their program into good paying jobs with a track for growth? And that's what you're looking

for. And is it reasonably priced? And so based on that, based on, again, you can look in the technology field and say, okay, I want to go into data analytics. Okay. Then go to multiple companies and look at what's required for a data analytics job and then go, okay. This is simple. Check the box here and make sure it's credible. You could use a YouTube as a prerequisite to get your feet wet. Yeah, but there's a difference.

And I think that's how you know. So thanks for the question, Andre. Appreciate that. To the phones we go. Kyle is joining us now in Seattle, Washington. Yeah, but there's a difference, and I think that's how you know. So thanks for the question, Andre. Appreciate that. To the phones we go. Kyle is joining us now in Seattle, Washington. Kyle, how can we help? Hi, yeah. I'm in a bit of a situation.

I'm trying to figure out just a lot of debt and trying to figure out how to stop living paycheck to paycheck and just not being comfortable at all like financially me and my girlfriend have a three and a half year old and we're currently living in like a single bedroom apartment and just feels like we're not really getting anywhere so I'm trying to figure out like the first steps I got to take here tell us about the money because a lot of times all all signs point back to income. So what's going on with the income? So do you want the debt or the income first?

Tell me the income first between you and her combined, and then tell me yours separately. Right now, I make just around 50 gross. And my girlfriend, she just started a new job job and she's making around like i would say like around 30 right now gross can you tell me it in take-home pay tell me what you see on your checks every month what you take oh my check um i'm gonna say without any overtime because there's no overtime at the moment without any overtime i make about just close to 1400 like 1380 uh per paycheck and you get paid twice a month? Yeah. Okay. And then what about her? She just started her job, but they're going to be having her at about 30 hours a week at the

moment, just starting out. So she's going to be making probably like just like around $1,000 per paycheck or a little under. Okay. I don't know exactly yet because she hasn't gotten that first check yet. Okay. And how old are you guys? I'm 24 and she's 22. Okay. There's your issue.

Before we get into the debt or anything like that, I think the issue is it's still a little slim, especially, you know, if you weren't combining money, which you you're not married so I wouldn't suggest you to combine money I'm assuming you're getting married though soon right uh yeah that's the plan she's the one I got my eyes on and she feels the same way so we've been together for a little over a year so okay if I had to ask you is it 100% would you say yes or no? That you want to marry her? Yes, 100%. Okay. So sidebar, I'd make that happen legally sooner than later. Yeah. Like, bro, can I just be man to man with you?

You don't have your eyes on her. You're living with her. This isn't like I kind of got my eye on you, kid. You're living with her with a kid. So it's time for you to commit. I'm with Jade on that. Not trying to be too intense with you, but it's time for us to decide to actually play this thing out and

make her your wife and let's get serious about getting our life together. For many reasons, some are legal, but what I'm talking about for this current purpose, out of the many reasons, is you guys can then focus together. You have a life together. You have a family together. You can combine your money safely. Then you can say, OK, what's the debt? And we can start to tackle the debt.

Because I think that if you guys start attacking this separately, which you will need to do until you're married, it's just going to cause it to be difficult and there is going to be confusion. See what I'm saying? Yeah, for sure. Yeah. so tell me about the date the debt um so uh her only debt really is just her car um she was like just over 20 and then me i have a little more than my car i as well owe just a little over 20 and then i have um some a little bit of IRS debt, some stuff in collections. So like after the car. Tell me the amount. What's IRS debt?

Tell me the amount. I think it's around like $2,000 right now, $2,500. Okay. Like with all the debt combined after my car, like I probably have the $20 on the car and then like another $10 or so. Yeah, but can you tell me what it is? Because it's important because, for instance, IRS debt needs to go lickety split to the top that's the most important debt yeah last time i checked it was a few months ago it was uh in the 2000s okay so 2000s to irs what else uh i have uh 1800 in, and then I have $2,500 on credit card.

Okay. And then I owe a family some money. I owe about $3,000 to $4,000 to my family. Okay. So if I'm looking at this, until you guys get the money combined, you have to look at it as just yours. So for right now, I'll tell you, with $2,700 and the amount of debt that I see here, you're going to have to pick up work, work, work, work, work, and day and night, like Michael Jackson said. Work and day and night. Yeah. So I actually did. I didn't mention this. I forgot to. It's so recent. I started a second job. It's just on the side because my full-time

job switched me to four days a week, 10-hour shifts. And so I picked up a second job because there's no overtime at the moment. And I'm working like kind of like up and down two days a week. But like one week I'll get like two eight-hour shifts, but next week I only get like one five-hour shift. How much is it? Like it averages to like around 20 hours every paycheck. Which is how much money? I probably make about three to four hundred a paycheck. Which is how much money? I'd probably make about $300 to $400 paycheck. Okay, so maybe another $750 a month? Yeah, I would say another $750. Okay, good. So good. And I want you to do that and more. Keep going. And so let's talk about how we're going to attack this debt. The first thing is the IRS. The next thing is going to be collections. But with collections,

you're not going to pay the full $1,800. You're going to call them up and settle for half. You're going to save up $800 and you're going to call them and say, hey, this is all I have. Will you settle? They're going to say yes after several attempts. And then you're going to ask for it in writing. And then we're going to clear the family debt. And then we're going to start with those credit cards. I want both of you to look at your cars because if you can sell them and break even, I want you to get something cheaper than $20,000 and that's for both of you. Yeah, it's really good. Man, youngsters. Youngsters. I was once young-dom. They can dig out of it.

She is Jade Warshaw. I'm Ken Coleman and this is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home

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Brentwood, Tennessee 37027. Welcome back to the Ramsey Show. I'm Ken Coleman, and I'm alongside Jade Warshaw. The phone number is 888-825-5225. We'd love to coach you up today. The best way to make the most of your money is by creating and sticking to a budget. Every dollar is our budget tool. It allows you to track expenses, plan spending, save for what matters most to you, all in an easy to use app and keep your pulse on your progress. Download Every Dollar for free in the App Store or Google Play,

or you can click on the link in the description if you're listening on your favorite podcast app or you're watching on YouTube. I want to say something more about this. You can say whatever you like. Every dollar. I'm going to use this as a segue. I probably don't need to do this, but every dollar is the crux of everything that we teach via the baby steps, right? You do the baby steps, but it's all based on your budget. Your budget allows you to do it. And the whole reason that you're doing it, the whole reason that you're getting on a budget, you're walking through the baby steps, you're doing these things that make you a financially responsible adult is because you want to have the life that you want to have. And for everybody, that why is a little bit different. But ultimately, I think it's fair to say, Ken, that we want to be able to spend money on the things that we value and do it without guilt and shame and debt and regret and all of that.

We want to be able to provide for our families. I think we all kind of feel that. Yesterday, remember the guy called in because you and I were on the show together yesterday. He was a young cat, 23 years old. He had saved $100,000. He lived with his parents. Yes. He saved $100,000 and he had another $37,000 in an HYSA.

And then he had another $7,000 cash. Oh, I remember this call. So I told Stacy about this call. I was like, okay, we had fun with this. We did. So he had $142,000 saved at 23. And he said, okay, I'm about to move out. I need to buy a new car. How much can I spend? Remember, Ken, tell us what happened next. Well, so you went first, because I'm a gentleman, and wanted you to walk through the door first.

And you said, I'd spend about $30,000. I was genuinely shocked and was far more conservative and led a rally against you. You did. With the studio audience in a fun way. I said, who's coming with me? It was my Jerry Maguire moment. And the audience was with me because I recommended that he spend $15,000. And now, mind you, for those wondering those wondering he made 55,000 a year yeah

why do I feel like you're slowly walking me into a car because I went I rarely do this I looked at the comments because at the time you said the studio audience was against me they were like 30,000 that's too much they were against you they were just with me they were with you but then I looked at actual comments and y'all were like Jade is is tripping she told this man to buy a thirty thousand dollar car so they they were so the the masses were also with a little yeah and i was like i feel like i should have explained my thought process better because here's the thing the rule is look at you the rule is yeah you don't want things to be you don't want things with a you can't replay your play you played your play i'm i'm defending it because i want to show everybody why i was not wrong in this i didn't think you were wrong i just thought you were

generous because i'm like he had the cash yeah he it was a two thousand dollar difference if you want to hit our rule which is you don't want things with a motor yeah cars you don't want it to be any more than half of what you take home like what your yearly salary is his was 55 i'm like yeah spend 30 technically i probably should have said 27 50 but fine but what i wanted people to take away is he did all of that work all of those baby step moves because the point is you live like no one else so that you get to live like no one else it just so happened he was 23 and did it early. Cause here's the thing. He had a lump sum of a hundred thousand dollars saved. If he doesn't touch that, if he does nothing else, Ken, when he retires, he's going to have like $6 million. He can get the $30,000 car. And what I want people to remember is we do this so that,

and it's not so that we can be a tight wad. It's so that we can live our life. Looks like the commenters got to you. I'm just saying. So now let me come back. I want people to know that there's another side. Not you, Kent. I know I'm coming at you hard. No, you're not.

You're not at all. No. And I want to say, I was having fun. And if you watch that back, I was having fun. I was basing my $15,000 on the reality of how tight that kid was. Do you remember? Yeah, he was very frugal at heart. You're righting my $15,000 on the reality of how tight that kid was. Do you remember? Yeah, he was very frugal at heart. You're right. Yeah, yeah, yeah. So I don't think that your recommendation was wrong. It's not even a right or wrong. You were given a recommendation. I totally get your point. He had the money to do

that. I'm not a letter of the law guy in that particular situation. So I don't mind that it was $27,000. So I had no problem with your answer. That was me having fun. And you know that we discussed that. So to the commenters, I was just saying for this kid, I knew there was no chance. He wouldn't spend that. Well, first of all, when you said $30,000 car to him, I promise you his eyes bugged out of his head. Oh, they did. Cause he was like, Oh no, no, no, no, no. I was like, but you could. And here's the bigger point here. The bigger point here is if you can do what it takes, if you can sacrifice to win early on, you utilize the power of your every dollar budget and you can be anything like this kid, whether it's at 23 years old or 33 years old.

The point is he buckled down and saved $100,000 at 23. And he could afford a nice car. And you said. No, no, no. The bigger thing here, Ken, is the investment play. If he doesn't put another dime. If you plug this into the RamseySolutions.com calculator, $6.5 million. He said if he doesn't touch it.

I got that. But I'm just trying to come to my friend's defense and say, you were just saying, man, young man, go get yourself a nice car. Go get yourself a nice car and don't feel any kind of way about it. This is why you stay out of the comments. I commented back for the very first time. Oh, no. I'm sorry for who I commented to. I literally was like.

You can't. You got to let the comments ride. And it wasn't salty, but I think somebody was like, Jade, you forgot the rule that you know he makes 55 i was like bro i didn't forget the rule it's it's a two thousand dollar difference he's gonna have 6.5 million dollars it doesn't matter i feel like you feel better now do you feel better because you got that i'm gonna feel the same like i went home and ate a sandwich i'll be honest it wasn't that big of a deal but no it was all good fun but i do remember that but uh yeah yeah yeah so uh it's

interesting okay so all right so this this will lead to another conversation okay okay the spirit of the rule yes versus the specifics of the rule okay i do i do i do think because we have a lot of new listeners james and i i want to cover this i also want to give our callers full time but because we've got into this i do do think because we have new people, I feel like every week we have people calling in going, I just started listening to the show. So I would like us, and since you're a money personality, I'll play along, but I'll cede to you here. Let's talk about that. Some of the things we we talk about there's a spirit to a rule yes and then there's some specifics to a rule do you care to shed more light because i think it's

important uh-huh i yes i want to make sure that everybody knows that the baby steps are the baby steps we're never going to tell you to not work the baby steps we're never going to tell you to do the baby steps out of order we are very integral on that because we know that it works so if anybody ever calls in and is like well could i do baby step two before i do baby it's always the answer is always going to be no now within that there is guidance and there are rules of thumb so to speak or there are uh kind of just ideas that we have found work over time but you have to also go it's not legalism like we're not nothing lightning is not going to strike you.

For example, we say your home mortgage should be no more than 25% of your take-home pay. Great example. If someone calls and their mortgage is 28%, you're okay, boo. Yeah, we don't hang up on you. You'll be fine. You'll be strong. And the same thing with this. Yes, as a rule of thumb, you don't want your vehicles to be more

than 50% of what you earn in a year. And the reason for that is simply the fact that it's a depreciating asset. It's going down in value. It's just, we're trying to make sure everything is a balanced scale. And so if my guy spends a little bit more, you want to know what? Lightning's not going to strike him. He'll be all right. And that's where the spirit versus the specific so for instance in his case he was wildly wildly financially fit like he was he was he was a bodybuilder he was a bodybuilder he was in great great shape and thus the spirit plays versus the specific and i just just want people to understand some of that stuff. It's like some of our audience is like,

and I love our audience. I cannot tell you how much I love these folks. But they like to take us to task on that. They came at you yesterday in the comments because of the percentages there. And so I think it's a healthy conversation. This is all about giving you a very clear clear framework that's what the baby steps are that if you follow those steps you'll you'll win let me tell you i was like that meme of homer

simpson when he comes out of the bushes for a minute in the comments i never go in the comments and i gotta tell you and i lucked out just because i picked the 15 grand because i knew that would stretch that kid beyond his wildest imagination or else I would have been killed too. So hey, good discussion. All right. Good hour. This is the Ramsey Show. This is the Ramsey Show. Welcome America. We're here to help you win with your money, win in your work and win with your relationships. 888-825- 5225 is the phone number. 888-825- 5225. Alongside Jay Dwarsaw, I'm Ken Coleman. And Randy's going to kick us off

this hour in Bay City, Michigan. Randy, hello, and how can we help? Well, one, I'm excited to talk. I'm kind of caught between a rock and a hard place here, and I'm hoping you can give me some feedback. Well, we've been there before, so we can help. I'm kind of caught between a rock and a hard place here, and I'm hoping you can give me some feedback. Well, we've been there before, so we can help. Yeah, so I've heard. Just a quick

background. I'm 62. I just started my life over four years ago. I got out of a loveless marriage, this and that. I'm just setting that through. I had a Dodge Magnum for 10 years. Trouble-free, best car I ever owned. And three years ago, the engine went on it. Oh. Yeah, it was the only time I cried when losing that car. I haven't looked for a car for 10 years, so I had no idea. I figured I could pick something up for a couple grand. That wasn't the case.

It died in the middle of winter in Michigan, so looking for another one. That all being said, I wound up buying a Ford Flex, and I paid more than I wanted to. That's besides the issue. But I've had nothing but issues with it. This past spring, it had a major problem in the rear end. The subframe was all rusted out. Okay.

I put it aside, bought a, bought a $2,000 beater. The thing is I just found out that it's not repairable. Um, there's, there's shops don't want to touch it. My question is I owe 600, I owe 66,000 or 6,600 on it. Okay. It's under 6,700, which I'm upside down on it. Yeah, what's it worth? What's it worth? Dealerships are selling them for five, so it's not worth anything. I was going to trade it in, but they would only give me three for it, and for one, I didn't want a car payment anyway,

and I didn't need $4,000 put onto something. Yeah, but you're not drastically upside down. You're upside down by $1,500. Let me ask a really dumb question, Randy. And I apologize for all guys who know cars. What do you mean the rusted out rear end? What is that? Does that keep it? There's a frame that there's bushings on it.

It's a Michigan car. But does that keep it from going forward? What's that? Does that keep it from going forward? What's that? Does that keep it from being able to drive? Well, yeah. Right now, it wore out the two rear tires within a few months. It's in the back. It's not in the front.

It's in the back. Okay. I didn't realize that. I knew that was a dumb question for anybody who knows cars, but I didn't know if it was. Okay. And what's it cost to fix again? Well, yeah. You heard subframe.

You thought the front. No, that wasn't dumb at all. The thing is, the shops around here don't want if it was. Okay. And what's it cost to fix again? Yeah. You heard subframe. You thought the front. No, that wasn't done at all. The thing is the shops around here don't want to touch it. Okay. That's fine. And my brother's going to do it. The reason, what I wanted to do, the payment's 230 on it. I pay 6% interest.

I just wanted to, I was, what I, my question was, is I was going to take, I wanted to just pay it off because I can't sell it the way it is, and it's just sitting. I'm basically paying on a dead horse. Taking the money out of my 401k, if I took a loan out of that to pay it off, would that be? I'd take the $3,000. I'd take the $3,000 that the dealer offered you on the trade, and then that's less than half you have to pay off and be done with it well no it's not drivable now that's what i'm saying

so nobody will buy it as is nobody will buy it as is and fix it not for not not for not for 6600 no we know that but what can you get for it we thought you told us that you could trade it for three well no i was my my original plan was to trade it in oh this is before it broke the dealerships didn't want it because it's not worth anything you didn't know they'd take whatever it was so we'll say it's worth it we'll say it's worth zero it's well right now it's it's um if i was to scrap it or whatever i might get a couple hundred bucks okay well then that's that's pretty close to zero if we're comparing it to the $6,600 that you owe.

Maybe you get $300 for the scraps. What I would amount this... The reason I'm asking is I can continue paying on it and just park in the garage, whatever, until it's paid for. Yeah. Or I could take the money out of my 401k. No, we already said no to that. We're running around chasing

our tail right now. It's not that drastic. I want you to pay this off and I want you to pay this off as quickly as possible. It's that drastic, but it's not to the point of I would ever tell you to borrow from your 401k to do this. We got to chalk this up to just a stupid tax, right? You got a lemon, you invested a lot of money money into it and now you're kind of being left holding the bag and that is not fun um nothing it is not fun to pay $230 a month for a car that won't run um but your $2,000 beater how how is that one holding up well that's fine I wound up buying that from a from a co-worker this past spring okay I've been able to I've been putting some money away I've been off work for a couple months for back surgery which is no dearer than there but i it's kind of dwindling my money

i go back to work next month is that is the car i have it's fine okay so is the was the flex your only problem or do you have any any other financial issues because my screen says 62 and broke that's what my screen says so tell me more more. No, I'm not broke. Okay. Okay, if you're not broke, then this is really a non- Well, see, that was the thing. Listening to you guys, I was almost debt-free. Well, I was, except for my house.

I had no debt. And then when the car died, it just broke my heart because I didn't want to- I see. So you're broken-hearted. You're not broke. Right. And we answered your question. We answered the question about the 401k.

Do not borrow from that. Yeah. Take this thing and pay it off. So thank you for the call. Yeah. All right. Let's go to Justin. I think we can do this one.

Justin in New Orleans is on the line there. Justin, how can we help? Hey, how are you guys doing? Good. We got about two and a half minutes. Can you ask your question for us? Yep. Gotcha. So, uh, my wife and I pretty much I'm 33, she's 30. Uh, the only debt that we have minus our house is her student loan sitting at 45,000. Okay. Um, we got, yeah, we got a 10 grand in emergency funds and I got like 10, I got six more grand

in stocks. We're trying to decide we have this whole life insurance policy that's eating $707 a month out of our income. I'm trying to figure out how to move to pay off their debt more rapidly is do we cancel the whole portion of the life insurance and keep the term and then just dump that 707 towards your debt to get it paid off quickly? And then after that, do we bring it back or just leave it a term? What I would do is I would first go to my friends at Zander.com and I would secure a term life policy. You guys can decide if it's a 15-year or 20-year term. They'll help you with that.

I'd secure that first. It's going to be significantly less money. And then I'd cash out of the whole life policy. What will you get when you cash out? That I don't know. I haven't ran the number off the top of my head. Okay. But we have both.

So I have a whole and a term. I can cancel the whole and just- Yeah, he already has. Okay, I thought you were saying they were connected in some way. You weren't saying that? No, they're separate. Oh, okay.

Yeah, cancel out the whole today. Yeah, cancel out the whole today. Yeah, cancel out the whole today. All right. How long's the term for? The term is till we're both 80. How old are you today? 33 and she's 30. Okay, so that doesn't sound like term life.

Yeah. Unless you have them stacked in some way, but I don't think you do. Get online with my friends at Xander.com and let them take a look at this because that sounded like you said you're 30 and that's a 50 year term. I don't know that I've heard of that. Yeah, I've not heard of that. So I think you've got two whole life policies and by what they cost, it kind of sounds that

way. So Xander insurance, start with them. Say, hey, I was on the air with Jade and Ken, and let me tell you what I got. They'll know instantly what you have and get a quote from them. They're amazing. They'll get you the best quote out there on term, and then you can get out of the whole life stuff. So thanks for the call.

$707 a month? Oh, I got to go get a Tums right now. Indigestion. Really, really burn it. This is The Ramsey Show. Welcome back to The Ramsey Show, where we help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the phone number.

I'm Ken Coleman alongside Jade Warshaw. And we're here for you. Dani is up in Fargo, North Dakota, which is fun. We just met three ladies in the lobby. We did. Who were on a girls' trip, matching t-shirts, I should point out, from South Dakota. And as a true Southeasterner, I'm acting like they're practically next door, which they kind of sort of are. They both have Dakota in the name. Yeah.

So anyway, there's your random ADHD episode for Ken today. Danny is waiting in Fargo, North Dakota. Danny, how can we help? Hi. Yeah. So I just wanted to call in because my husband and I have kind of found ourselves in a situation where we just like don't know what to do how to get out of it what the next steps are that sort of thing um so like some background information i am nine months pregnant i'm going

to be delivering my baby in four weeks today which is exciting um and so um my husband was hired in may by a company that had a really high promise. It was commission-based, which we were a little scared about, but it seems really great. He had talked with a few people from the company, and they said they were doing well, and it was a remote job. So knowing that we were going to have a baby, like was really great for us. Um, I also was working at the time. And so we decided that, um, in June we would move into, to my in-laws just to save some money and eventually so that I could be a stay at home mom. Um, and that was kind of the plan. And we like prayed about it and it seems, it just seems like that's like where we were being led. Um,

up until this point, we had been working on the baby steps. We had two months of savings on our emergency fund, and we're slowly paying off our debts. My husband was doing good at the company, and we were promoting him to a level two and then a level three. And so it gave us just a lot of hope that we would be able to like pay off more of our debt ultimately just like all those promises just were like were crap and they started acting really shady and taking away appointments and they would like take off your two-thirds of your commission if you couldn't like close the sale in one day and so we just found ourselves like just like kind of like working our way backwards and he just like because of just like how shady things were and the company wasn't like working

well with him he decided he wanted to leave it because otherwise he would just be spending eight nine hours a day not getting appointments that he was waiting for. So where are you right now? Is he unemployed? Yeah, he's unemployed. I am unemployed. And we live, the closest city to us is Fargo, but we actually live like an hour and a half outside of Fargo in a really rural area.

And over the past few months, we've just like run dry. And like we only have like $200 in our bank account right now. And we've used all of our emergency funds. How long has it been since he quit the job? Maybe three, four weeks. Is he doing anything for income right now? He's like helping his, like getting side jobs with his parents, just doing things around. What was he making? What was he making in the job before he took this shady job? Let's go back one job before. What was he

doing? He was working as like a financial account assistant. He was making about like $55,000 a year. Okay. And so what is keeping him from trying to get back into that situation or something similar? So we were originally living in the Twin Cities when both of us had those jobs, and then we moved out of the cities, and we're now like four hours north. You're out in the middle of nowhere. Literally the middle of nowhere. And is that to be close to

his parents yeah it was so that we could live like we like have very cheap rent with his parents and we were like it just like made sense for us to just like okay no no no i understand but we got to help you with the now so so i'm just trying to get the why we're in the middle of nowhere and i understand that but now the job is gone. You got a baby on the way. We need some income. We need some absolute income. And we could talk about your debt, but you guys blew through your emergency fund,

and you have $200, and you have a baby on the way in four weeks. The good news is you're not homeless. That's the good news. That's right. So we got a place there. So he needs to work and and it's not odd jobs with mom and dad and and honestly jade i'm gonna say something here and and and she will she will tell me if i'm too intense she will disagree with me i bet i'm with you i bet i

am um as soon as baby is born and baby's healthy um we're out we're out of fargo we're out we're getting somewhere we where we have some job prospects immediately yeah i do not like the idea of moving to the middle of nowhere uh where you have very little opportunity at all because of this very situation and i'm not trying to rip you out of but you guys were on your own before um you need to like right now it's just it's kind of bananas this timing of this thing but i he in the meantime uh before we move back to civilization um he needs a customer service job he's doing anything and everything that's right that's exactly right he's making twenty dollars an hour doing some customer service somewhere somehow it's not a man life just kicked his right in

the teeth and it sucks and we got a baby on the way and we're just trying no we're gonna get after it right now and this i'm talking about him not you i'm saying he's got to step up in a big way and he's got 24 hours in a day he doesn't have a baby inside of him he can get by on six hours of sleep you know what I mean like let's get after it dude the warrior he's been interviewing and he got a few offers so like we're gonna take them up on those but it's like okay once we get what the offers, tell us that that's a good, to have a couple of offers. Tell us what those are. Yeah. So he got an offer from, um, from the, the postal service and then also for a tree service.

He was just throwing applications everywhere. Okay. So what's wrong with that? When are we starting on those? Is he accepted those? Um, he accepted the USPS one because it was part-time, and they take a while to do all the background checks and everything. That's fine. When will he start making money? They haven't gotten back to us on that.

We have to wait until he— I don't think you're hearing me, sweetheart. He's got to work today and then tonight and then tomorrow. He's not waiting on the postal service to get back to him on his part-time job. Yeah, what about the tree service? When does that start? He just accepted the job offer yesterday. Okay, and when does he start?

I think they're talking about that. Ken, is this normal? You tell me. You're the guy. I think that I care deeply about this couple and this baby to be born and I care a lot for this young lady and I think I should probably let you take the rest of the advice because I think that I am we're getting worked up no I don't want to be I don't want to be misunderstood you know exactly what I'm thinking right now. Yeah. He has got to be making money now. Yeah.

Where is the closest McDonald's? Where is the closest Walmart? What can he do immediately? They're probably about 30, 40 miles away. Okay. Let's get in the car and go. Are the cars working? We only have one car.

It does work, yeah. And it's working well. Okay, let's do that because we need to get him in whatever will pay him the fastest. But here's the thing. He's probably going to be doing all three. He's probably going to, when the post office starts paying, he'll be doing that. He starts the tree service. Tell him, hey, call him up and say I can start tomorrow.

Put me on, put me in, start me training. Because we get it. You get the job, then me in, start me training. Because we get it. You get the job, then you have to go through training, and yeah, it can be a couple of days before that first, you know, a couple of weeks before you actually get a paycheck. And because of that, he's got to be very, time is of the essence, he's got to move on this.

There's no... You guys are broke. You're dead broke. You got $200. The good news is you got mom and dad taking care of you at home. But you guys have got to happen to life. Yeah. So I guess broke you got 200 bucks the good news is you got mom and dad taking care of you at home but you guys have got to happen to life yeah so i guess like a question i have is like do we save enough money to then just get out yes like that's like what we want is like we're like there's so many opportunities back in the city yes that's what i'm saying everything yes i'm saying get out of Fargo. Yes, I'm saying let baby be born. He's busting his tail right now just to start to build up moving expenses for crying out loud.

Yeah, yeah, yeah. You know, like get a five grand worth to be able to move out and get back to civilization where you guys were thriving before. The Twin Cities, great job market. Great job market. So listen, I'm for you. I'm a little irritated at your husband and his lack of urgency. You can pass that along. Yeah, we're sorry. Yeah, but I want you all to win. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm Ken Coleman. Jade Warshaw is in studio here as well. 888-825-5225. Selling House The Ramsey Way makes ownership of a home a blessing instead of a burden. The Ramsey Trusted Program is the only way to find an agent you can trust. Keep you on track with what we teach here at Ramsey and make sure you get the best offer on your house or you find the right house. We send you to some of the top agents in your area that we trust so that you can decide who you trust and who you want to work with. Find a Ramsey-trusted real estate agent for free at ramseysolutions.com.

That's ramseysolutions.com. All right, Daniel is up in West Palm Beach, Florida. Daniel, how can we help? How's it going, guys? So I guess I kind of have a little bit of an opposite problem as a lot of the people that I've, well, at least some of the people I've heard. Uh, so I actually just got a substantial raise, um, and I have some good prospects in my career ahead. And so I'm actually trying to figure out how I should prioritize, um, you know, what I'm going to be, you know, spending money on my fiance and I have a wedding coming up. We are saving for a house, um, where, you know, I have student loans. Um, but like Dave would want to hear, I am,

I'm a lawyer, so I think that that's okay. Um, and yeah, so I just kind of wanted to see what you guys, you know, could recommend to, to put us on the right path. All right. Well, give us, give us the full financial picture. So let's start with your income that you just doubled. What is it now? And then what is your debt situation? It's about $100,000 for my income, but that is before hopefully bonuses, right? So like I'm a personal injury attorney. So a large part of what we make is based on, you know, the performance and, you know, how many cases we settle. So that's minimum there is a hundred for me. My fiance makes 80 and we have about a hundred in debt. Okay. Let's keep everything separate right now. Well, just to give Jade a picture here. When are you getting married? One year, Labor Day, 2025.

All right. So we've got 12 months there. so let's talk about your debt so you're at a hundred thousand plus some bonuses we're not going to worry about that right now what is your debt just you one hundred thousand dollars that's our total debt she doesn't have any is it all student loans yes nothing else nothing else okay i don't have car payments we live with my parents like we're all you know we're trying to keep costs low okay so there's no rent are you paying rent no wow okay so what's the max of you i mean that's the biggest line item right you don't have kids there's no daycare so if you make a hundred thousand you know let's and you get bonuses so let's say you're bringing it home

anywhere between eight to ten thousand is there any reason why you're not paying this off in one and a half years? I don't know. That's kind of what I'm coming to you guys about. What she's saying is put the absolute max. And when we say max, like... I mean max. Max. How much money can you put each month towards $100,000 and then knock it out quickly?

So can you put $6,000? Can you put $8,000? Yeah. What's the least you can live on? I mean, you don't have rent, and you don't have kids, and you don't have to support her. So can you live on $25,000? Can you live on $30,000? What does it take?

Right, right. Yeah, no, that's a good point. Something I guess I have to consider myself. I don't know what that means. No, she's asking you. Well, here's what... What's the number? What do you think?

Oh. We're not holding you to this. We're just trying to get you to think. Yeah, I don't know. I think... Right, yeah, no. I mean, I would say probably around the $2,500 number, maybe $2,000.

I'm being a little bit more... $2,500 a month? Yeah, because you told me you don't have any debt. So there's no car payment to speak of. There's no rent, no daycare. What the heck? I mean, you can only eat so much whole foods. You know what I mean?

What are you spending money on every month? Probably more. I would say, you know, I'm probably spending less than that, right? I'd say just the regular social stuff, dinner with fiance, that kind of thing. But yeah, it probably doesn't come close to $2,500. Yeah, let's put some- I'm trying to give myself some breathing room.

The point is you get to decide. And if I'm you, I mean, it's easy for me to spend your money. I could look at this and go, okay, there's literally no debt to speak of. The only thing you have, you're not paying your parents' rent or utilities. The only thing you have to pay for is your food. So let's just pretend you lived on $1,000 for a year.

If you did that, plus your bonuses, this debt is gone before you even get married. Isn't that the whole point of living with the parents? Yes, it was. Yeah, that was definitely a big portion. how come i feel like you don't like this how come i feel like i feel like i gave you a golden ticket and your voice kind of sounds like oh i don't know she's crazy tell me more tell me what's up no no no no i wouldn't say that at all i just um i'm just thinking at the same time all Here's a question. Honest question, Daniel. Are you familiar with our baby steps?

Not in detail. I've heard Dave talk about them. So I sound like a psycho to you right now. That's why, because I didn't land the... I think, Jade, it'd be fun to give him just a big picture of the baby steps so he understands where we're leading. I had a sense maybe like he was like, oh...

Here's why I'm not psychotic, but why you probably thought I was because the way the baby steps are, it's seven baby steps that get you to financial peace. The first one is you set aside $1,000 right quick, just as a starter emergency fund, just in case something pops up and you should do that too, right? $1,000 set aside in case anything, there's an emergency for you. There's gonna be very little emergency because you don't have a lot of risk associated with how your lifestyle runs at this point. The second baby step, which is what I'm talking about,

is you pay off all of your consumer debt, except a mortgage and you don't have a mortgage. And you do it as quickly as you possibly can, as intensely as you possibly can, all your extra income goes towards it. We call that baby step two and you do it using the debt snowball. You only have one debt. It's your student loans. So for you, you'd pay your student loans off smallest to largest as they go. That's the quickest way to pay them off. Then after that, you save up three to six months of

expenses. You've got all your income back at your disposal. You save up three to six months of expenses. You've got all your income back at your disposal. You save up three to six months of expenses so that you have a nice firm foundation. And then after that, you've got things coming up. So maybe it's the wedding. Maybe it's a down payment for a home. You get to kind of choose what you guys do next there. And then from there, you're investing 15% of your income. That's baby step four is 15% of your income. Baby step five, you'll start to set aside for if you have children, you put some in a 529 for their education. Then baby step six, if you bought a house, now you start putting extra to pay off the house. You're not moving intensely like you were when you were paying off your debt, but you're with intentionality, you're putting extra payments toward the mortgage. And then once that's paid off in baby step seven,

you're free to invest beyond 15%. You can be generous. You're living like no one else. You could buy yourself a $30,000 car. No, here it comes. That was a joke from before. I'm sorry. So a couple of things, Daniel, that's the big picture. So I want to give him Dave's classic book, Total Money Makeover. So we'll put you on hold in a minute. Kelly's going to get you that book. I want you to read it. Or if you want the audio book, we'll get you that. And then also, Jade, I think EveryDollar, what can we do for him there? Because this young man could really use the EveryDollar app.

Yeah, we're going to give you the EveryDollar app. Kelly's going to pick up and make sure you get that just to test it out, see if you like it. We'll give you a couple of months for free. You're going to love it, by the way, because I have a sense that he's a methodical guy. He's a lawyer. And so it's going to help you see how you're spending every single dollar, which is what you're going to need to pay this debt off quickly. So Daniel, thanks for the call. Congrats on the impending nuptials and uh welcome to the show and uh so kelly's going to take care of you all right i got to point something out was it two segments ago

that we had the young man call in and he was trying to get out of the whole life and get into term yes i gotta tell you as fate would have it the owner and founder of zander insurance is in the lobby jeff zander is there uh and he's a long time friend. And, uh, so we're going to go out and say hi to him on the commercial break, but I just wanted to call him out. Been been friends with Dave for a very long time. And, uh, uh, I don't know if the YouTube cameras can catch him. He's a dapper man. He doesn't like this. He's very, he's going to be irritated at me. Um, but he'll get over it because he knows I love him. But Jeff Zander, longtime friend, out in the lobby, so fun. Zander Insurance, so really, really good stuff.

You know, it's interesting. We've had a couple of calls in the show today that have just pointed out to me a lot of young couples. It feels like we've had like three. And it's like they're just getting started. That's right. And I'm loving all the young couples that are tuned into the Ramsey Show because if you can figure it out, like we were talking about,

you've been married to Sam a long time. I've been married to Stacey a long time. And I think if we'd have learned some of the stuff we're teaching now as really young couples, boy, oh, boy, we would have loved it. Do you think they relate to you because you look so young? Flattery will get you nowhere, Jade. It will get you nowhere. But I do appreciate it.

I'm going to act like you meant that. All right, quick break. We'll be right back. More of the Ramsey Show coming up. The Ramsey Show continues. Thrilled that you're with us. 888-825-5225 is the phone number to jump in. 888-825-5225. I'm Ken Coleman. Jade Warshaw is alongside, and we're thrilled to be coaching you up. Our scripture of the day comes from Proverbs 25 21. If your enemy is hungry,

give him food to eat. If he is thirsty, give him water to drink. Our quote of the day from Benjamin Franklin, love your enemies, for they tell you your faults. I'm not so sure what to make of that. Does that mean we have to listen to the comments? I think that's what I was just, that's what I was going to say.

If Ben Franklin was alive today, maybe he's hanging out with you and George Camel in the comments section. Oh, man. No, he lives there. I don't live there like George does. And he handles it honestly well for a guy who really gets in there, reads the comments. Let me tell you something. Let me tell you where you will never, ever, ever find me. In the comments.

I know where to find you, Ken. You're on your back deck. You've got a cigar in hand. You've got the rum. Come on. Thank you very much. In fact, that's where I will be tonight. That's an undisclosed location.

By the way, Sam and Jade were over the other night, James. We're celebrating Sam. Recently celebrated another trip around the sun That's right And brought over some Cubans He did That was nice It was nice Jason

Yeah, we should Jason is up in Greenville, South Carolina Jason, how can we help? Yes, sir, I have two children A son at age three and a daughter of age five. And I'm looking into the college savings programs. South Carolina has a 529 prepaid tuition. My thought, honestly, was just to go with a brokerage, just invest in growth-style mutual funds like we do in our retirement. I know that you lose some of the tax benefits, but you also lose some of the restrictions.

And I was just curious if you had any advice on that. You know, we typically don't like if a state has a prepaid plan, we wouldn't do that. But the good news about 529s is you don't necessarily have to choose the one associated with your state. So you can do some research there to find one that makes sense for you. And if you come out of it and at the end of the day, you decide not, yeah, I'm just going to put it in a brokerage account. I'm not mad at that. At the end of the day, the point is that you're saving for your kid's college. And at this point, they're three and five. I think the big question here, Ken, that most people are concerned about is what if I save

up a bunch of money and a 529, which is for college savings and my children don't go to college? All right. So to that, I would say it's somewhat liberal on the usage of that money. It doesn't have to be used only for college education, right? So there's a variety of ways that can be used. And I would do the research on that dig into that deep you actually know more about that probably than i do but it doesn't have to be just traditional college so you've got trade schools you've got for instance if you go to go online and do a technology boot camp k through k through 12 private school that's the other thing i don't think a lot of people realize that that you can use it for their actual private school

and in private schools are getting more and more expensive so there's just a lot of people realize that you can use it for their actual private school. And private schools are getting more and more expensive. So there's just a lot of application on that. And Jason, what we recommend is if you use a SmartVestor Pro, and you can look into the SmartVestor Pro program at ramseysolutions.com, talk to those folks and get them to explain it to you in details that you absolutely feel a command of it. You understand and make that decision that way. That's what we want you to do. But the reason we believe in that, Jade already laid out, but I just don't think it has as many restrictions as most people think.

It has broad application how that money can be used. Yeah. I mean, the benefit for the 529 is a tax benefit. But again, if you're like, hey, I'm just not sure if my kids are going to college, if you have some outside reason why you wouldn't want to do that, then the brokerage would be fine. I'm just, again, I'm just happy that you're putting aside the money. Yeah, absolutely. But again, as with anything investment, smart investor pro, those folks, you got to sit with the pros. And again, you can learn more about the program, ramsaysolutions.com.

Megan is up in Bangor, Maine. I hope I'm saying that right. Yeah, that's right. Megan? Hi. Or is it Megan? I'm sorry, Megan, how can we help? It's Megan.

Hi. First, thank you so much for taking my call. I'm so excited. So really quick, I know that you're short on time. My husband and I are in Baby Step two, and we have two wonderful children. My daughter, who's 18, is in college this year. It's her first year in college. And thank goodness we started listening to you guys about four months ago.

We did not take out any student loans. So I got a side gig, and we're bankrolling her college tuition. Way to go. Yeah. So I guess my question is this. She's watched us cross off like credit card debt as we cut up and close credit cards. And we've gotten her hooked. So I think she's pretty bought into like the Ramsey lifestyle and living like no one else today.

So you can live like no one else, you know, tomorrow. But I don't know if you know teenagers well. They don't always like to listen to their parents. I try to drop little seeds of wisdom along the way and little nugget here and there. But she tells me that I can sometimes be preachy. So I'm wondering if you have any advice for resources that I can provide for her so I'm not constantly telling her what to do and keep her engaged in the lifestyle. So I have three teenagers. I've got a freshman in college, and I've got a 16-year-old and a 15-year-old, so boy, oh boy, do I know 100%.

And I've heard it many times in my own house, you know, hey, Dad, relax. You're not coaching me. I'm not on your show. So I get that. And so I'm saying this from my own failings. It's not about a resource to help you be less preachy. You just have to stop being preachy. And I mean that coming, I know. And again, I'm not telling you from a place of success. I'm telling you from a place of failure. And so what I've learned to do is,

is I ask questions instead of make statements. That's a little thing. Um, but I, I actually, based on what you've shared with us, and I'm curious to know what Jade's going to say, but based on what you shared, the fact that she's already gotten it, you know what? Dial it back a little bit and maybe game, gamify some of the things down the road. Like if you want her to save X amount of dollars, if there's something kind of in your world that you're going, I'd love her to do this, incentivize her or gamify that, rewarding good behavior, and then just let up a little bit.

Because I've learned that life's greatest lessons, Jade, came to me in the losses. You're a former D1 athlete. Losses teach us more than victories. This kid has grabbed the process, give her the guidelines. And if she messes up a little bit, you're there. Not to say, I told you so, but to go, Hey kiddo, it's okay. We've done dumb with money before. I don't know how many times Dave has said on this show, I got a PhD in D-U-M-B. And I think, Mom, you just got to relax. I think you've done a good job, but she's going to have to figure it out.

And I want to hand it to Jade, but I'll hand it with this question. Is there something specific you want her to do in the days ahead now that she's off at college? Is there something that you're really kind of going, I want to make sure she does this, like an emergency fund or something? What is it? What's driving this call? Yeah, well, she's kind of on a fixed income, right? So nothing specific?

No. Okay, all right. I just want her to open a credit card. Okay, so. Jade, go mama to mama here. So Kelly's going to send you a copy of the grad guide, and you're going to give it to her as a gift, and you're going to let me be the one, since I wrote that book, you're going to let me be the one to keep her on track. And I'm saying that because when I was a teenager, my parents gave me a lot of good

advice and there was a lot of things I held with me, but there's something about when it comes from a different voice that sometimes you just need. And it, I'm not saying it has to be from a book, but now's maybe the time that her coaches talk to her or if she has aunts, they might say something. But don't think that it's only you that will tell her these things. Hopefully that she's around other people who will say some of the same things you might say. And I know like with my kids, I'll tell my mom, like tell, you know, my son and daughter, tell them, you know, or I'll tell my sister or I'll tell, you know, tell their uncles, like you tell them this too, because they look up to those people. Those people are cool in their eyes because it's hard for parents to be cool to their kids. So let some other people do the heavy lifting too.

It's hard for me to be cool, period. Much less to my kids. I mean, that's like the hardest. Well, it might be the shirt, Ken. You like the shirt? I'm just kidding. Oh, yeah, it's just a little too basic? A little denim shirt? It's very Sag Harbor. Oh, I love that.

Well played, Jade 1, Ken 0. Hey, fun, fun hour, my friend. Thanks for being with me. Thanks to James Childs and our fearless crew that keep us on the air. But mostly you, America. Thanks for listening. This is The Ramsey Show. I'll see you next time.