The Ramsey Show - App - The Key to Transformation Is Admitting You Have a Problem

Episode Date: February 11, 2025

This is the Ramsey Show, America. It's where we help you win with your money, win in your profession, and win with your relationships. Alongside the fabulous Jade Warshaw, I'm Ken Coleman. Phone number to jump in, 888-825-5225. 888-825-5225. You ready to roll? Let's rumble. Let's go. Eli is joining

us in Dallas, Texas. Eli, how can we help? How are you doing, guys? Thank you for taking my call. Man, I'm not even quite sure where to begin, but I seem to have a ginormous problem handling my finances. I am 27 years old with a wife and two kids, and I have one on the way in July.

And I'm just kind of like up to my throat in stress on trying to figure out what I got to do to stay the course and trying to be debt-free. I've been a part of the show for about six months now. I even bought Dave Ramsey's The Total Money Makeover, and everything was going well. I had Baby Steps 1 working into 2. I had everything listed from smallest to largest, paying the smallest stuff off. Then right around the holidays, I kind of just fell off a cliff, started buying things I didn't need. Just recently, I got into a $2,100 purchase of headphones.

What? What do you mean you got into it? I, uh, it did not take very much convincing to be truthfully honest. Um, I love, I love music and stuff like that. So it didn't take much convincing for me to buy them. Um, I was leading emotionally rather than thinking rationally. And that's when I kind of realized I've got a problem and I just I cannot um I just I can't get out of it okay so let me ask a quick question Eli on this because I love how vulnerable you're being and and I think you've nailed it I think you've diagnosed what's going on that you can't do this on your own and so we're going to walk with you on this call but before we dive in deeper I'm just curious if you'd be willing to share from your gut, what do you think is the emotion that's

driving all these impulse purchases for you? What do you think it is? How would you describe it? I believe desire would probably be the best thing I can come up with. Just the sheer desire of wanting to get, you know, anything that I've always wanted, stuff that I didn't get when I was growing up. Stop. There it is. So now we're going to go deeper for a second. Okay. You said desire, but it's actually something else. What do you think it is based on the fact that you didn't have it when you were a kid and now you want it? What is the deeper emotion? It's deeper than desire. What's driving the desire to get stuff? What do you think? I don't know. Yeah, you do.

You just took us there. Go back to your childhood. What was your childhood like? Childhood came from a family of divorced parents, thrusted very quickly into a different setting with my stepfather. And just money was always tight going up, just not having enough money. Didn't have much, did you? No, no, no. Very strict upbringing and nothing wrong with that, of course. It wasn't until I went to Austin for culinary arts for college that I realized that I was free and I can make any and all decisions. And I've kind of been carrying that philosophy

for the better part of the last 10 years. But can I tell you something, Eli? You're free philosophically. You're not free emotionally. You're still that little boy who was afraid he was never going to get anything nice like all of his other friends. And so now you're an adult and you're afraid, if you don't buy these things, that you are that little boy who didn't have anything. And I'm telling you, there's something there. Now, again, I don't want to make the whole call about this, Jade, but I just felt like when somebody presents as, I can't do anything about this, I think that's right. By the way, if you ever had a friend who's an alcoholic or if you go through the 12 steps or you're familiar with the 12 steps, the key to

transformation is to get to a point where you say, I can't do this on my own. I need help. And he presented that way, and I think that's great. But I also wanted him to see when there's an impulse, the impulse is just the reaction and you've got to dig deep and go, what is the underlying issue that is making it so easy for him to be talked into $2,100 headphones when he's broke? Absolutely. And that's real. And Eli, I'm not saying that to put shame on you. I'm actually hoping to help you see something because I think you can recover from this, but not until you deal with the emotion that is driving the impulse. I agree with Ken. I agree with Ken 100%. Matter of fact, if I were you, I'd probably jump into some counseling and get to the bottom

of that just because ken is so right what we've experienced in our past 100 informs how we view money how we spend our money what we think we're entitled to with our money what makes us feel uncomfortable with our money all of that is driven by what our relationships have been with money whether it's from childhood with our ex-wife our ex-spouse whatever it was right, right? That all plays into it. The cute answer that I would give you for this moment, because I'm, you know, I wish I were more of a therapist in that area, but I'm not. But the cute answer is you've got to get to the point where you're sacrificing,

you're not sacrificing what you want most for what you want right now. Because what you want right now is the headphones. What I want right now is New Jordans. What I want, right? There's this thing that we were like, you want right now because what you want right now is the headphones what i want right now is new jordans what i want right there's this thing that we were like i want this now but what you want most is what you started out on this journey which is to find financial peace for your family right and so it's in those moments that you've got to kind of tie back to okay what it what why did i start this journey what is it that I'm truly trying to accomplish and if I can just keep on the straight and narrow there will become a time

where you can buy the the headphones or you can buy some of the things that you want to do so that's the cute answer the truth is you're really struggling to do that right now in this moment yeah but I thought you set him up beautifully Eli Jade just nailed this I mean you have to replace the $2,100 headphones with what do you want your life to look like 20 years from now? That's spot on. What do you want for your kids? And so all of a sudden you start to go, ooh, I want that, and I really want that. It's the trade-off. So how much debt do you have? Me personally, I have about $24,000 in total debt, about $2,500 in credit cards, $7,000 is in purchase finances, $4,000 to $5,000 in student loan,

and then the rest is personal loans. So where did the $2,100 headphones go? Did they go on a credit card? They went through a firm. A firm? Yes. Oh, that's like buy now, pay later. It's one of those buy now, pay later, yes, correct, like Corona and stuff like that. Can you sell those?

Probably more than likely so. That ain't my world. I mean, you can sell anything you can sell anything I should have said can you sell those and get a good chunk or do they devalue quickly they're in good shape I'm sure you could sell them you can sell them on marketplace or put them somewhere

I'd start there selling all the stuff you've bought that you can still sell okay I do believe I'd go back. I do believe I have a 30-day warranty of some sort where I can exchange them or return them for a refund. But I'd have to double-check on that just to make sure that it's accurate. And let me hit you with something else, Eli. I've heard Dr. John Deloney say this, and it's so true.

Your stuff talks to you. Your stuff, it does. It talks to you. And I bet you when you walk by it, because you've said what it is that you truly want, let your stuff talk to you and it talk you out of doing this again. Because I bet when you walk by those headphones, they're like, you said you were going to make things right with your family, right? When you walk by those purchases, they're telling you everything that you said you were going to do. So by you getting rid of them,

selling them off, and let it be a reminder of what you said you wanted to do and start surrounding yourself with things that are telling you the right thing. Good stuff. Thanks for the call, Eli. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas,

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I'm Ken Coleman. Jade Warshaw is with me. 888-825-5225 is the phone number. 888-825-52-2-2-5. Syracuse, New York is where we go next. Kelly is there. Kelly, how can we help? Hi, thank you for taking my call.

Sure, what's going on? My question today is I'm trying to figure out what to do with my credit card debt. I have no other debt other than credit card debt. I fell on hard times with work last year, and I've been having a tough time actually landing a job since then. Still working at it, but it's getting harder in the field that I'm in. And I have some business credit cards and some personal credit cards. My business credit cards have been charged off as of last month. My personal credit cards have been current. I've been able to maintain those with the little bit of savings that I've had left with the hopes that I was going to get a job soon, but it hasn't happened yet. So I'm wondering what to do with my personal credit as it's getting harder to pay those balances and the minimum payment.

How much is it? How much is the personal credit card debt? The personal credit card debt is $36,000, and the business credit cards are $23,000. Uh-huh. What kind of business was it? It's an IT consulting business. Okay. And are you still doing that

or you've moved on? I'm still doing it because that's what I've been doing for many years and just really trying to find something where I can make the money that I was making before. Okay. That laid off.

So how long were you laid off? Because, I mean, this is almost $60,000 of credit card debt. That's nothing to sneeze at. Like, when you say fell on hard times, I want to understand more about that and how long that period lasted so that I can understand more about your habits and your mindset around money and debt. And also tell us how much you were making. Okay. Well, my credit card debt racked up really over just maintaining regular monthly bills, which aren't really high. They are roughly about $1,000 per month. Yeah, but answer Jade's question.

How long? Because that means if it jay's question how long because that means if it was only a thousand dollars that means we spent 36 months yeah not doing it almost a year almost a year okay so what um okay so how much real quick how much were you making beforehand beforehand i was making about 10 000,000 a month. You're making about $120,000? Go ahead. I was going to say it's not $120,000 because I'm a consultant, so it's not consistent throughout the year. Okay, how many months of the year do you make?

I mean, if you say to me, hey, I make $120,000 a year, yeah, it can fluctuate, but you still made $120,000 in the year. Well, it can fluctuate, but you still made $120,000 in the year. Well, it can go from anywhere. You can be unemployed with what I do anywhere from three to six months. If you get a year, then that's nice. Right, right. Anywhere from three to six months. Right, I hear what you're saying, but it's still $120,000. So what that tells me is on the windfall months,

the months that you just had made bank, instead of saying, okay, I've got to be smart and put this aside. And this is what I'm living off of for the next couple of months. That tells me that that money went somewhere. Where did it go? Because you also told me that it only takes $1,000

to make your household run, which I do have questions about that. But do you see, I'm not trying to take you to task, but there's holes in the story and I need to understand it so that I can help you best because what's coming off, the way it's coming off is that you're not working much. That's what the way it's coming off. And I want to find out why that is, because even if it's not an IT, there's plenty of opportunities and King can get into that that we could do throughout the year.

And so I really want to highlight that behavior for you so that you never do that again. Does that make sense? It's not for me to like make you feel bad. I just want you to know, hey, there's a moment. It's like you got to know when to hold them and when to fold them. There's a moment that you get to a threshold that you go, I can't keep doing this. I got to go work. I got to get out here and make any kind of money, right? And something happened that you didn't make that transition. Fair enough? Well, I did try. And that was another part of it is that it may sound like I'm not trying. I tried to go to restaurants to see if someone would hire me for waitressing, hosting, different things.

Why didn't they? What do you think the reason was? I mean, I don't want to really, I mean, I don't know what the reason is, honestly. I don't know. I know why I can't get a job in my field. But the reason that I can't get a regular job doing something outside of what I do, I don't know. I mean, I would think anyone can get hired in a restaurant, but apparently not. I mean, but was it just the restaurant or did you go to Walgreens and Target and everywhere? Did you do DoorDash?

Did you do Uber? Did you do Instacart? And they all said no. I didn't do anything that was not going to be able to pay my bills, not really, no. Right, but hold, because here's my point. Nothing was paying your bills. So isn't something better than nothing?

That's the point I'm trying to your bills. So isn't something better than nothing? That's the point I'm trying to get to. I did have unemployment. That's how I was able to pay my rent. My rent was $2,500 a month. So I was paying. No, that's not true because you went into, you had unemployment, but it didn't cover the cost. You still had costs because you went into credit card debt. So that's why I'm saying, wouldn't it help to have done some of these other things as well so that you would not have at least had to go into credit card debt. So I'm just trying to play this back because if you can't look back on this and see, here's where I went, here's where it all went bad. If you can't see that, it will be impossible to fix this. That's right. So Kelly, I'm not piling on,

but I'm going to jump in here. How many times did you apply for a waitressing position? Can you repeat that? How many times did I apply for? A waitressing position at a restaurant. I know you didn't get the one. How many different restaurants did you apply to? I went to like five different restaurants.

I went to another. I went to a bar. I went to lounges to try to apply for work. Right. So here's the deal. So, so here, here's what's going on. I was like, what was that? I don't know. I opened my computer to type something in. Here's the deal. There could be a myriad of reasons as to why they hired someone else for those roles. But I think what happened was, is that you were like, well, this is just a bunch of no's and I can't get hired. So I'm going to go try to do my own thing on my own. And you realize how hard that is. And it's put you in a deep hole. I think what we're trying to tell you is,

is that you can't take no for an answer. In other words, it's the restaurant, multiple restaurants, a bar. They said, no, fine. You pivot. You go to big box stores where they are hiring. You keep going. You don't accept, well, I didn't get it here. I didn't get it here. So I'm not going to get it anywhere else. There are jobs that you can get that do way better than unemployment, but you have to keep showing up and you can't just go in and apply. You got to talk to everybody that you know on social media, in person, you find a job doing whatever it takes to get you on a bridge so that you didn't have to rely on these credit cards. Now you've got to go get work just to dig out of this. And I mean like two or three jobs to dig out of this. Because Jade, as you said,

this $60,000 is no joke. It's a lot of credit card debt. And let's talk about that a minute, because there's another part of this, Kelly, that when you've been making $10,000 a month, right? Are you single? You're single, right? Yeah. Okay, as a single woman, that's significant. That's a lot of money. So to go from that, it almost feels like, well, if I'm not making, it's like an all or nothing thing, right? You feel like if I'm not making that, then what's the point? And I think what Ken and I are getting at is that I get emotionally

that's a very real feeling, but we've got to go beyond that and say anything, anything at this point. The technology market opens up a little bit. And then what are some adjacent jobs that you're qualified for? Maybe it's different than what you've been doing. My point is you have to treat this like it's life or death because it is life or death for you financially right now. That's where you called us.

You are in bad shape, but it's very fixable if you can begin to get some money coming in the door. You change your budget. I mean, every dollar. I don't know what you want to give her here. She needs some help. She needs some resources. Yeah, before you leave, we'll make sure you're set up with every dollar, the premium version, because it's going to help you build that habit of budgeting, checking in with your money every single day and tracking your transactions.

So we'll make sure you have that. I'm also going to give you the total money makeover because I think being able to read that and read other people's stories, you'll be able to see yourself in those stories and you'll be able to pinpoint, like I said, what went wrong here. You'll be able to accept that so you don't end up in this situation again, which is so important. Yeah. Get after it, Kelly. Everything you got. You don't take no for an answer. A is just not here and just keep on moving forward all right quick break we'll be right back this is the ramsey show what does the future hold for business ask nine experts and you'll get 10 different answers economic growth or a recession business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have

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Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to the Ramsey Show alongside Jade Warshaw. I'm Ken Coleman. Glad you're with us. 888-825-5225. Hey, the best way to make the most of your money is by creating and then sticking to a monthly budget. That's why we created EveryDollar. We believe it is the best budgeting tool on the planet, help you plan spending, track expenses, save for what matters most to you, and it's easy. You can download EveryDollar for free in the App Store or Google Play or click the link in our show notes if you're listening on YouTube or your favorite podcast platform. Now, our last call.

Jade and I were talking during the break. I want to revisit this quickly because Jade got fired up. And, you know, listen, bottom line is, and love Kelly, want to help Kelly, but it is a difficult thing to lose one's job. Yes. Or to see an interruption. It just is. Psychologically, we've got to call that out. It's difficult. And so it can really throw us off. But there has got to be an awareness of that so that you develop a mindset that if you're in debt or you have been living paycheck to paycheck or both, which is usually the case, you can't allow that to keep you from continuing to bring

in income. And it's almost like we had a whiteboard. If we had a whiteboard in the studio, I would have wheeled it in here. I would have given you a fresh marker. I would have gone Steve Kornacki on you in two seconds. Come on. So I'm looking at your notes here. You jotted down five things that you think people need to do or why they need think people need to do. Yeah. Or why they need to get back to do any work. Set this up for us. I would call it five reasons to take any job before you get the job.

I love that. Five reasons, right? Here we go. Let me caveat this real quick because this is not just Jade sitting here yapping, right? So during COVID, COVID 2020, 2020 the pandemic everything shut down and for sam and i my husband uh that was big for us because before i came to work here i was in entertainment our whole business is in entertainment and cruise lines that's right and all that was shut down your whole world and you want to talk about going from a great income to zero okay so this is coming

from my personal experience i had to take a job that I hated temporarily. It was a call center job. So I get it. Okay. I'm talking out of personal experience. Five reasons to take any job before you take the job. Number one, Ken, some money is better than any money. I would agree with this. Right. Great point. It's better to, if you're, if you are the person who's like, well, I got to depend on credit cards. Well, if you bring in some money, I guess you won't have to use your credit cards as much. Right? So some money is better than any money.

Number two, Ken, Ken, your spouse needs to see who you are, who you are, who are you going to be in a hard time when, when the rubber meets the road? Are you going to take any job? And are you going to be the person who steps up? My husband stepped up, I stepped up and we needed to see that from each other because it was a hard time. The rubber meets the road. Are you going to take any job? And are you going to be the person who steps up? My husband stepped up. I stepped up. And we needed to see that from each other because it was a hard time. Really good point.

All right. Your spouse. You know what happens? You don't feel very psychologically safe when you lose a job. So you need some emotional safety is what you're talking about here. I like that. And if you see your spouse sitting around while you're trying to make things happen or vice versa, that's not going to be good for the marriage.

So your spouse and you need to see who you are. All right. Number three is, well, you'll learn what you like and what you don't like. Because I can tell you right now, I don't like a call center job. By the way, what was it? What was it? I mean, I don't know if I can say it on here. No, you don't have to say the brand.

What kind of calls were you taking? I was taking people who needed help with their taxes. Oh, okay. Gotcha. Oh, really? Tax advice. Yeah. And did you have like a little cheat sheet of the basics you could help with and then

you handed them off to somebody else? No, it was the tax software. So if they had trouble with the tax software, but you have to understand the taxes to be able to do that. So I learned a lot. Wow. So I learned, that's what I'm saying. You'll learn what you like, what you don't like. Okay like okay on a scale of one to ten how soul-sucking was it um I chose for it not to be

soul-sucking because like I said it was 2020 there was enough that was sucking out our souls so my point is it was no but that's you because you're mentally tough I'm saying how rough was it was hard because to go from making there you know, over 200 and some odd thousand dollars a year. Well, you're singing Whitney Houston covers in a fabulous, probably a nice suite with your hubs traveling all around the world. And now all of a sudden you're on a, that's not fun. That's the point I wanted to make.

Yeah. I'm saying hello. You sucked it up big time. Sucked it up. You gotta suck it up. You gotta do what you gotta do for your family. Okay. Come on. So that was number three. You learn uh what you like what you don't like number four you'll just be a productive person okay because sometimes ken you just got to get out of bed you

got to take off your sweatpants hit the pavement knock on some doors make some phone calls like you got to be productive make something happen make something i love it otherwise you're just going to be getting depressed. I love it. About the fact that you don't have a job. All right. Number five. Which leads me to number five.

It'll build your confidence. There it is. Going to a job. I don't care if you're a greeter at Walmart. Getting up and taking pride in what you're doing and being the best at whatever it is that you do. Colossians 3.23. Whatever it is that you're doing, work at it as though you're working for the Lord,

not as unto man. I didn't quote it right right but you know what i'm saying that works when you do that message version i liked it yeah it was good it was really good but that's my point like who wants to show up when you finally do get the interview it's been five months and you've not been to a job you're gonna bomb that interview because you haven't been building that confidence at any job. You need to get that typed up, printed out, and dare I say, oh, I just lost it. Thank you. You know where I was going. That needs to be a little, you just pull that chart out, Jade's five to be alive or something. That's really good, actually. Really good. All right. Let's get back to the phones. But by the way, real quick, I hope you listen to what she said, because that is a

fabulous pep talk for somebody who's in between jobs right now. I'm telling you, that right there is a mindset plan that she just gave you. You've got to keep your mind right. I know that's right. Because you're not going to get out of debt if your mind is destroyed. And it is very, very hard when you've lost steady work. We acknowledge that. All right. To Kristen, we go in Lexington, Kentucky. Kristen, how can we help today? Hi, how are you all? We're doing great. What's going on? Jay needs to make that a magnet for sure. She's bringing out her inner day. i love i love what we're doing here i need a refrigerator magnet jade i'll be the first person to buy it maybe that's my new business you know what so she so people can

see that as soon as i open up the fridge because you know they go to the fridge like five thousand times a day amen and amen by the way i grew up in a magnet household. My mom had them, and my grandmother had them next door. And so you just took me back, Kristen, to some serious nostalgia. How can we help you today? Well, I am, thank you all for taking my call. I'm 39. My husband is 42. Our household income is $100,000 to $110,000 a year.

We've been married for almost 13 years. Our net worth is around $1.1. Hey! Yeah, that does include our house. My husband said that that's really not included. He doesn't include our house. Yes, it is. We would beg to differ. If we included the house, what would it be? No, that is with the house. He says that we're not over that because. He wants to see cash money in the bank. I appreciate that.

But if you sold that house today, you're there. So we will include it. We just won't tell him. Okay. Just between us. Okay. We do have a $ thousand dollar emergency fund i have all of our life insurance through zander like you all taught me um we are avid day fans um we've been

trying to live by your old school ever since we got married um and he he's lived by that rule ever since he was like 14 he just said i didn't listen until I started listening to Dave. So, but I have a couple questions. Okay, we got about a minute and a half, so you got to get to them real fast. Okay, I max out our Roth IRA, our 401k, and we contribute about $1,000 to $2,000 to a mutual fund, and then the $7,000 max for each of us for our Roth. I don't, I don't feel, where do we go from here? I feel like, cause we're maxing everything out. Um, you know, what do we do from here? I'm, I'm honestly, I'm getting ready to

turn 40. I'm, I'm a little off with you. Um, and I'm thankful that we don't have any bills. But also, too, our mutual funds are only going like 6% to 8%. Okay. Well, that's good. Hey, you're doing a great job maxing those out. Your funds should be doing much better than that, especially the past couple of years. You should be in the 20s, honey.

So I would suggest you get with one of our SmartVestor pros. They're going to get you on the right track and teach you more about the right funds to make you a little bit more money. But yeah, you're doing the right thing. You could go to a taxable brokerage account, but it sounds like maybe you might want to try something like investing. Maybe it's now time to save up and invest in a piece of real estate. That might be interesting for you. It sounds like you're getting a little bored with just setting it aside into mutual funds and that sort of thing. So real estate could be the next play for you guys.

Not bad at all. Again, go to the SmartVestor Pro section on the website, RamseySolutions.com. Make a couple of meetings and decide from there. This is The Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip-offs in the life insurance world like that whole life crap posing as an investment opportunity.

What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years. So you know they'll be there when you need them.

Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them, and you can too. Visit Zander.com for instant online quotes or for a more personal touch give them a call at 800-356-4282 welcome back to the ramsey show i'm ken coleman jade warshaw is alongside phone number is 888-825-5225. Jade's going to coach you up on how to handle your money. I'm going to coach you up on how to make more money. So let's go. We're going to start off this segment with a question from our Ramsey Network app. This

question is from Brody. He writes, I'm 27 years old and I bought a house about five years ago. I've put a lot of labor into fixing the house and it is worth a lot more than I had originally purchased it for. I just met with my financial advisor and he suggested the idea of taking out $150,000 HELOC on that equity and investing it into a mutual fund to earn more money for my house. Is that the right move or the wrong move for me? And I'm betting, jade that the financial advisor is selling him that product oh 100 yeah he's he's selling you financial advisors got himself a commission in his head uh yeah the answer is no i would never do that because essentially what

you're doing you're you're leveraging your home which is supposed to be a place of peace and security for an investment. And it's like, why would you do that? And an investment, by the way, there's no guarantee. He didn't say what type of investment it would be, like him investing in the market, which is also something that I'm like, oh, he did say mutual fund. No, he said mutual fund. So essentially it's like the financial advisor is going,

hey, let's put a big lump sum in your mutual fund. He can get a commission. Big commission. And then he could say, well, you're fast forwarding this. Yeah, no, let's put a big lump sum in your mutual fund. He can get a commission. Big commission. And then he could say, well, you're fast forwarding this. Yeah, no, I would never do that. I would just take my own income and invest it in mutual funds. And that way I'm not creating any additional risk in my life. I'm holding on to the wealth that I have, which is the equity in your home.

And I'm continuing to build wealth by investing 15% of my gross income every single month. There you go. All right, to the phones we go. Jeremiah is joining us now in San Antonio, Texas. Jeremiah, how can we help? Hi, I'm $33,000 in debt, and I've saved up about $3,000, and I just don't know where to go from here. What is the debt?

It's from an auto loan. What is the debt? It's from auto loan. What's the car? Tell us about it. It's a 2022 Dodge Ram 1500. It's going to hit 70,000 miles right now. Okay, $70,000. What is it worth a private sale right now? If you went on Kelley Blue Book, what would the value be?

I believe it was $26,000 or $25,000. Okay. Let's say $25,000 and be conservative. And you say you owe $33,000 on it? Yes. But you also said you have $3,000 worth of cash? Yes. Okay, Jade. $33,000 worth of cash? No, no. $3,000 worth of cash? Yes. Okay, Jade.

$33,000 worth of cash? No, no. $3,000. $3,000 worth of cash. He owes $33,000. I wish. Yeah, we do too. You had it.

So he's got a car that's worth $25,000. I'm being conservative here. He's got $3,000 in cash. No other cash anywhere else? No, just I have retirement. And no debt other than the truck? Yes, no debt other than the truck. Pretty clean here. Yeah. I mean, if I were you, I'd try to get out of this by getting out of upside down. What's your income? um monthly is 2400 okay you living at home um yes okay so how quickly could you save up another because you're eight thousand dollars upside down you've got three so we need five to make it right

right side up right but then you got to drive something so we've got to come up with another three thousand to get you a beater or something, right? Yeah. So that's the equation right here. How quickly can you get another $5,000 in two months? Three months? Two months if you take a second job? You live at home. I would, yeah. I would say about at least, give or take three months would take what

bills do you have what other bills do you have what other goals what other bills other than the car um just a 75 dollar uh for my internet i believe, and then what's the car payment, just so I can really see this? Now, the car payment is $639, and I paid $300 for the insurance. Okay, so... I kind of would like to see him pay this thing off. It's not like, you know what I mean? There's a couple ways. I'd like to see him own this thing and pay it off. He's got no expenses in his life.

Pay this sucker. I'm not against him selling it. You got this funky face right now. I think he never should have got it. I 100% agree. Oh, me too. Oh, I 100% agree. It was my grandparents and they co-signed on it. I guess my point is, I think he could put $2,000

a month on this if he got busy and started working hard. How old are you? 19. He's living with mom. What do you think? I always tell people to sell it, but in this case, I think he can pay this thing off. He's got no other debt in his life. Now he's got a 2022

Dodge Ram truck. Or he could go buy a beater. I mean, I think Jade's right. That's what I almost always say. Sell the car. What do you want to do? What do you want to do? Jeremiah? Well, if it is any way possible, I would love to keep the truck. Well, it is possible.

You got to pay it off. But you got to pay it off with like lickety split, like with the quickness, like you getting another job. I would hope three years or two years. And see, this is why I'm saying sell it. Because when I gave you the task of getting $5,000 quickly, you felt like that felt insurmountable. I could tell like that felt like, oh man. Yeah. See, and let me clarify my position. I'm not saying Jeremiah over three years, pay it off. I'm saying, I'm saying you pay it off in a year. But at this point, maybe it's

better off if you don't think you can mentally do that, then I would sell it and I'd go get a $5,000 truck because I can find one online right now. I can find a $5,000 truck. I kind of like that plan for you. If you were a little bit older and you were accustomed to the type of work that Ken and I are talking about, I might say, keep it paid off. But I can tell that this is really a burden. Even the burden of getting the $5,000 to get right side up feels like a lot. Am I wrong or am I right? No, you're right. Okay. Well then a hundred percent. I agree. Yeah. Those are your two options. Yeah. Pay it down, pay it off quickly or get rid of it. And I think you need to get rid of it. Yeah. Go ahead and get it out of your life. You're going to sleep

better and you're going to learn a valuable lesson. Yeah. You can't really, it's hard to enjoy a purchase like that when it's kind of made you feel some type of way like that, you know? And a $600 a month car payment. I was enjoying it, but I had started to learn about the financial things, and I was just like, oh gosh gosh I'm living way out of my yeah yeah I hear you listen a ram is nice I'm not gonna lie I've been looking at rams what color is

it uh black okay yeah it's black on black hey listen slide it this way you're in San Antonio you know and here's the deal let me tell you what's really going on jeremiah you've never done a budget have you um no well i i've just started actually but okay have you used every dollar are you familiar with our budgeting app i am not okay jade tell the man why he needs to be using every dollar because this will help him this is great you're a young guy this is a great habit to learn early. So every dollar, it's the best budget out there. It's the only budget I use. I know it's the only budget Ken uses,

but it's great because it's on your phone, it's on your desktop, and it does all the math for you, Jeremiah. All you have to do is plug in your income at the top and you get to decide from there how you're going to spend every single dollar of your money. So you go in and put everything that Jeremiah might spend money on from your insurance to your car payment to, you know, a little bit of groceries for the house,

whatever it is that you're spending money on, you put that into every dollar and then it's going to tell you, hey, here's how much extra you have to spend. So that's just the basics of what every dollar does. You connect it to your bank and then all your transactions load in there and it'll tell you, hey, here's how you're doing with your money. But there's also some really great future planning tools in there. It's going to help him save for that next truck that's maybe in the $14,000, $15,000 range. Jeremiah, that's the whole point is get this out of your life, then start budgeting, and then you can begin to see, okay, I'm still a young guy. I can save up and have a really nice truck in the near future that doesn't have any negative emotion attached to it, right? Yes, sir.

That's the idea, my man. So every dollar, download it today. Start messing around with it. To learn this at 19. Jade, I don't think I'm speaking in hyperbole, but I think he's going to be way ahead. Life years. Way past most 19-year-olds. Just learning to go, I know where my money is. Yeah. And not only do I know where it is, I'm controlling where it's going. And being able to make the choice, hey, I bought that. It was too expensive. I don't need to keep it.

Being able to say that in life. I agree. Priceless. It's huge. By the way, selling a car that you can't afford, it is the best way to get out of that deal and learn that lesson the hard way. It just kind of sticks with you forever.

Always the best choice. Great hour, Jade Warshaw. This is The Ramsey Show. Welcome to The Ramsey Show, America, where we help you win with your money, win in your profession, and win in your relationships. 888-825-5225 is the phone number. 888-825-5225. Love for you to call in, and if you need to get coached up on handling your money,

Jade Warshaw is here. If you need to get coached up on making more money i'm here i go by ken uh that's what i go by i've been called far worse but i go by ken ken coleman with you and always fun to be with jade and uh we've got the energy here we both just got a little bit of caffeine the juice we got the juice we're ready to go li. Lily in Milwaukee is where we're going next. Lily, how can we help today? Hi. So I need advice on what to do. So we just realized that my mother-in-law had stolen from my husband and I for the second time.

The first time was last year that we discovered it um my husband's debit card numbers kept getting stolen even after he changed it six times come to find out it was my mother-in-law she stole every time he was home she somehow um went to his wallet and grabbed his debit card wrote down the numbers um she used it to pay bills. I mean, it was, she also used it for, we tracked a thousand dollars and then we stopped tracking it. Because you didn't want to keep, you didn't want to keep getting mad. How long did this go on before the second time that it's happened? How long did it go on for before you figured it out um i i would say four months before we realized it i actually realized it when i was looking over my husband uh well then we were just uh dating or engaged i can't remember and he was just showing it to me and i was just like well

let me read it how did you look at it and i, babe, these are all utility bills. So someone's paying utilities. And he's like, oh, okay. So we looked and my husband, like a couple days later, found a utility bill that was paid with the last four digits of his car in his mom's name. So we confronted her. Well, he confronted her. How'd that go? Not well.

Not well. well she unfortunately is um an alcoholic um and so it's rough especially because just uh under a little over a month ago we were ready with five thousand dollars cash to bail her out of her sixth owy because otherwise her son was going to be her my brother-in-law who's now 17 was going to be put in foster care and we were going to be his foster parents up until he turned 18. Oh wow. And so we didn't, we were going to like, okay, we're going to bail you out. We, and we even told her like, this is a gift. We don't want you to return it. Like this is just rough. So she was

ordered to not, we even were driving a total of six hours a day. When I say we, I mean me, cause my husband was working and I would drive an hour to pick her up an hour to drop her off from her home to then work. And then an hour back. And then I would go back and I would go get her. And we finally stopped after we found out she was driving when she wasn't supposed to. And so we said, we're not going to be complicit in this. We're not going to turn you in, but we're not going to be a part. Part of our bargain to not asking for any money back was that you didn't break the law again. So this is a giant mess.

We could talk about this for... Okay, and what's your question for us today? We need help with the current situation of her stealing $13,000 from his UTMA account. His, okay. Her stealing $13,000 from his UTMA. Is it, whose name is on it? Did she set up the UTMA a long time ago for him? Yes, she set it up for him.

He was in a really bad car accident. So because he was a minor, the money was then dispersed to her. And then at the same time, they were hurt. His parents were going through a divorce. So part of the custody agreement was instead of just giving the money and letting it sit in a bank account,

put it in an up mallet truck. So she did that. And then in 2008, she took out a little over six grand. And then in 2008, she took out a little over six grand. And then in 2015, she took out another little over six grand of a total withdrawals of $13,186.43. No, we get it. She's got access to this though. She did. Yep. So now my husband's 22 and has rights. And so when we talked with our accountant

and we talked to the investor, she's not, according to like up my IRS stuff or whatever that we are being told is that she can't pull out any money unless it's to benefit the minor. Yeah, she just did. So you could sue her. I mean, you could, you could. I got a question. How, if that's true, then how is it that she just recently was able to get into the account and get 13,000 more no no no no that was the total amount it wasn't recently that she did it she did it in in 2008 once and in 2015 we only found out now okay all right so lily okay now being mailed to my husband okay so there's a lot coming at us so you've done so she no it's okay but to try to help you she what you just told us seems like the solution uh what you just told us she can't get

access to this now correct because of his age right all right then so you don't have anything to worry about unless like i said unless you were trying to get the 13 000 back if that's the case you'd have to take legal action to prove that she took it, that she didn't spend it on him, right? I just don't even know how to prove that. My point in saying that is it's probably not going to be worth it. No, this is not worth it, Lily. She doesn't have any money. Yeah.

And the last thing you guys need to do is spend your money on a wild goose chase because that's what this is this is already awful enough so if that's your question for us um jade and i are saying if we were in your shoes you can't sue her for anything we'd let it go but i would make sure okay that that your husband is on the phone with this account yeah and we're absolutely for certain that she cannot access the funds the second second thing is, I got to go back to the initial, he doesn't go anywhere near her with his debit card anymore. Right. How did this happen?

I don't know how he's laying his wallet around and she's just walking into this. No, what had happened was it was while he was still living there. So we didn't move in together until after we were married. And he lived still living there. So we didn't move in together until after we were married. And he lived with his mom. When we found out about it, he did end up getting an apartment for six months. And then we moved in together because we were married. Lily, this just needs to be a clear boundary here. This needs to be a clear boundary.

We don't do anything with her anymore involving money. Period. Done. She needs to get healthy. And she may have to hit rock bottom. It doesn't sound like she's there yet. Yeah. Has she ever gone through any treatment for her alcoholism? She was court ordered to with the other five OWIs, but it never ended up helping or doing anything. Unfortunately, she did the program enough to get the boys out of foster care when they were removed from her care.

And then as soon as she got them back and the court order was finished, she went back to drinking. Where's little brother now? He is still living with mom. Okay. All right. Well, this is tough. We feel really bad for you.

I'm glad you have figured it out. I don't think there's any recourse. I think you guys need a clear boundary here. And I think, you know what? I love therapy. So I would suggest you and your husband go talk to someone. Without question. Because when people do you wrong like that,

and your husband's probably bringing in his own baggage from that living situation, like you guys get some clarity and get some mental healing over this. Because clearly what she's, her actions have impacted you guys and it's made you feel some type of way, like understandably so, but make sure you're working through that too so that when the time comes that she does become sober, which I pray it does,

you can receive her with open arms. Also, Lily, best we can do is give you a present. Hang on the line. We're going to give you every dollar because this happened because you guys largely didn't have any idea what was coming and going in your bank account. I'm not trying to pour insult on the injury here, but let's get control of our budget so that nothing like this

ever happens again. Hang on the line. This is The Ramsey Show. Hey guys, I'm Jade Warshaw and I want to talk to you for a quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash Ramsey.

There you'll find helpful resources like a student loan rate table, a refinancing calculator, and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if you sign up for auto pay. But if your situation is more complex, sign up for a free 30-minute consultation with one of their student loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan, so make sure you run the numbers. But for some people,

it is the right move. Learn more at laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Welcome back to the Ramsey Show alongside Jade Warshaw. I'm Ken Coleman. 888-825-5225 is the phone number. Let's go to Washington, D.C. Samuel's there. Samuel, how can we help? Hi, Jade and Ken. How are you? I'm good. Good. I guess my question mostly surrounds finishing school and my career in the future. Okay, tell us where you are in school and how far along you are and what you're pursuing.

Yeah, right now I'm about 16 credit hours away from getting my associate's in business. Okay. But I'm not taking any classes this semester. And what is the reason for that? Yeah, I'm working quite a bit of hours. I work every day. And by the time I actually, in truth, by the time that I was looking to sign up for classes this semester, all the ones remaining for my program were booked up. And what kind of work are you doing now? Yeah, I'm a manager and coach at a gym.

And is that the field you want to go into? It's tough. I'm kind of at the ceiling of this stuff. The only kind of way to go up would be owner, equity owner. Right, but if young Samuel, how old are you again? 20, sir. Right. But if young Samuel, how old are you again? 20, sir. 20. If young Samuel thinks about the future 20 years from now, and we're going ideal here, all right? So I don't want you to be hung up on a lack of belief right now. I don't want you to feel insecure about your answer. I want you to go with what your heart's telling you. What does it look like right now?

You can change this answer two minutes from now. What's 20 years down the road, a successful Samuel, and I run into you and you go, hey, 20 years ago, I talked to you and Jay. Guess what I'm doing now? What would you tell me you're doing? Yeah, I'd love to either have some sort of remote work in a field that I really enjoy, or I really like to get into real estate investing and kind of manage. Okay. I feel like I got a safe answer, and I feel like I got the real answer. He's not an office guy.

Don't tell me that 20 years from now, you're going to be excited to run into Jay and I and go, hey, I'm doing remote work in a field I enjoy. Come on, Samuel. Well, what that told me is he doesn't want to go into an office. Whatever he does, he wants flexibility. I know. I'm pushing him a little bit because he can handle it. Samuel, what is it that you really want to do?

I guess I really just want to make my friends and family happy and spend time doing things that I enjoy. I know you're a sweet young man. Jade wants to give you a big giant hug. Mama Jade is so touched. But Samuel, you want to do real estate. You want to be an entrepreneur. You want to be kind of on the move working for yourself.

Is that the goal? Yes, sir. Okay. So until you figure out what it is that this entrepreneurial adventure or two or three or four may be, then I think you ought to be working. I think you ought to be working because you don't need an associate's degree to be an entrepreneur. You don't have a very clear direction as of this time, which by the way, I'm not judging that at all. And so for me, I don't think you should be feeling any kind of negative emotion about taking this semester off. Now, if you figure out what you, you know, you start to get some more ideas. And by the way, I'm going to give you some tools. I'm going to

give you my book, Find the Work You're Wired to Do, and it has the get clear assessment in it. It'll take you about 18 to 20 minutes to take. Will you do it? Yes, sir. Because it's going to give you a purpose statement. And it's basically going to go, I was created to use the top three talents, and it's going to go boom, boom, boom. It's got a detailed report on each of the three top talents.

Then it's going to say, to do the work that I really enjoy doing, it's going to give you three passions, boom, boom, boom, and a detailed report on all three to accomplish my mission of, and it's going to give you one clear answer, which is a result that would get Samuel out of the bed every morning. Now that's just a quick preview, but if you take it and you look at that purpose statement and you begin to lay it out over the world of work, okay, and you begin to allow yourself to answer the question that I put you under the spot, okay, and you begin to allow yourself to answer the question that I put you under the spot, like I put you on the spot, I know it was a little pressure,

but if you continue to work through that same question with that purpose statement in mind, I think at some point you're going to come to some conclusions on two or three ideas that would absolutely allow you to use what you do best, to do what you enjoy, to produce a result that you care about. Isn't that what you really want, Samuel? Thank you so much, Tanya. So here's the deal. I am all for 19-year-olds working and making some money, Mama J.

Okay, I know that's right. And taking his time and figuring out, because he's not playing video games all day long. No, he's being productive. He's hustling. This kid's got a heart the size of the Atlantic Ocean. So Samuel, I would say pause. Yeah. Agreed.

And then we jump back into school. And here's why, Jade, I want to give it to you to weigh in. Because you need to listen to Jade. If school, a degree, whether it be an associate's, a bachelor's, grad degree at all, Jade, if it is the only way to do what you want to do, I say do it. If it is the best way to do what you want to do, I say do it. But absent of those two very clear descriptors, then I say stay away from it because you are wasting time and money. This idea that college is, it's so good for the

young people to go find themselves. That's an expensive way to find yourself. It's summer camp on steroids. You can go party on your own. Jade would say you. I think that you're exactly right, Ken Coleman. I think that that's a message that needs to be shouted from the rooftops. I mean, look, it's as simple as that. So Samuel, I hope that's what you need. Is that what you needed today? You didn't need anything from us, but I hope we answered your question. Yes, I really appreciate it. All right, my man, hang on the line. Kristen's going to get you a copy of the book, Find the Work You're Wired to Do, and it comes with the assessment, the Get Clear Assessment.

By the way, that little book is about a 45 minute read jade yeah it's me coaching people through their assessment results so i need it i do believe passionately in that product so especially for young people who by the way there is this massive cultural pressure to go right out of high school and get accepted by a really great school so that you make your parents and your principal and your teachers proud. And there's a lot of Samuels in this world who are a lot like Ken Coleman. And we were like, that thing I want to do doesn't need a degree. I'm a college dropout because I was working. I went to school to get a political science degree because I wanted to run the world. You know what I'm saying?

Yeah, I know. No surprise there. And I got a taste of politics. I got to work on a campaign in the middle of my sophomore year. And I took a whole semester off and I tasted battle, folks. Hey. And then I went back to school and was like, this is the desk job. And I've been in the foxhole and I was never the same.

And thankfully my parents did not freak out. They weren't happy about it. What'd they do? They just kind of were like, okay, well, we'd like you to finish your degree. Yeah. Yeah. Because another year and a half later, I dropped out to work on a Senate race. Then I went right to the gubernatorial race and I found myself working for the governor of Virginia at 22. That's cool. So it wasn't like I was, you know, finding myself in Europe. But you could find yourself in Europe. And I got no problem with that either. Yeah. I'm a big fan of a gap year. I wish I had found myself as a dropout. Listen, I stayed in school too long. Yeah, but you were a D1 athlete. You're far more higher achiever than me. Yes, but I quit volleyball to pursue music in my studies,

but I didn't need to continue in school. No, you did not. I wish I had taken the Ken Coleman path of action. It would have been right for me. I went into the field that I was going to school to get into the field for. I hope everybody understands that. I mean, I'm not saying that everybody drop out of school. No, we get you, Ken.

But my goodness, why in the world would I finish the i finish it's not for everybody is what you're saying like it's not the pathway for everybody people used to ask me all the time you're gonna go back and get your degree i was like for what i got a fancy office i know right i'm wearing suits every day you know what i'm not going back to college for a political science degree i am sciencing the political. What do you think about folks who really view it, though, like, it's just, I want to do it to say I did it. Like, it's just a... If it's that important to you, pay it cash.

Yeah. But I would say to them privately, that's important to you. I'm not going to knock your priorities. I'd go, you don't need it. Yeah. I'm just one of these guys that doesn't do anything that I don't need to do. Listen, I get you. Why do I need a degree? My degree helped me meet Sam Warshaw. That's all that matters. That's what I tell myself at night when I'm thinking about the student loans I paid off. And tell people what you thought of Sam the first time you met him. I said that right there

as a snack. My all-time favorite thing she says about he's become a good friend. One of these days, I'm going to tell him, you're a snack. He's going to probably punch me, but it'll be worth it. Face card never declines. You heard it here first. We love you, Sam. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries.

CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to the Ramsey Show. Thrilled to have you with us, helping you win with your money,

winning your profession, and winning your relationships is our goal. 888-825-5225 is the phone number to jump in. I'm Ken Coleman. Jade Warshaw joins me. YRefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. Private student loans are different than federal student loans like Sally Mae's. So to learn more about this custom refinancing option and a lump sum payoff option, you could qualify for after 24 months, go to YRefi.com slash Ramsey. That's the letter Y. R-E-F-Y.com slash Ramsey. It may not be available in all states. All right. Today's question comes from Travis in Vermont. He says, I'm 23 and saving for a home down payment, which should only take 12 to 18 months. However, I've heard that you recommend not having a mortgage of more than 25% of your

take-home pay. Even if I went, even if I were to save enough for a 20% down payment, I wouldn't be able to get a mortgage anywhere near that. I earn 70,000 per year, which is above average for coming straight out of college. There are no starter homes in this area for less than $150,000. Do you think young people will ever have a chance at purchasing a house if we stick to your 25% guideline? All right. Oh, that's a good question. Yeah. Let's talk about it from a couple of angles. Number one, I love that you want to buy a house. I think that's great. I think the dream of real estate is the American dream, right? To own something that's

yours outright. It's great. What you first said was you could save for a down payment in 12 to 18 months, which lets me know whatever you had in your mind, you thought this number will get me in the door. But the door that it's going to get you in is a dangerous door for you. The reason that we say 25% of your take-home pay is because we want you to be able to live. Like we want you to be able to breathe out here because don't want to be house poor. Yeah. At some point you have to think about like this at some point of the 100% pie of income that you have at some point, you're going to want to invest 15%. So there's that at some point you're going to want to invest 15%. So there's that. At some point, you're going to want to give 10%. So there's that. That's already at 25.

At some point, you have a mortgage. Let's say it's more than 25%. Let's say it's at 40%. Well, suddenly, you don't have much to live off of, right? You've really cut that wedge really, really small for you. And we find people all the time who call in and say oh my gosh i mean it happened the other day ken folks calling at 50 because they'll give you a mortgage oh yeah up to 50 oh my goodness and when that happens these people can't breathe no like they can't pay for a pot to piss in like they don't have anything one of my all-time favorite phrases by the way you dusted that one off that's like an old school from the depths it did that's like an old school phrase i think i probably heard my dad say it but oh i promise you anyway you know that's the point it's not it has nothing to do um it has nothing to do with

being a ramseyism right that's right it's about you we want you to be able to live so there's margin and emotion attached to that margin and so that's kind of what i want you to be able to live. It's about margin and emotion attached to that margin. And so that's kind of what I want you to leave here with. It's not about us. It's about you being able to enjoy your home and have the money to do the things that you need to be able to do. So that's thing one. Now let's answer the question of, do you think single people will ever have a chance at purchasing a house if we stick to your 25% guidelines?

The answer is yes, but, comma, and you'll have to change your expectations on possibly the piece of real estate and the timeline that it will take to get you there. That's right. And the zip code. And the zip code. All these things. Come on. And what you grew up in doesn't mean that that's what you're supposed to start in. Facts.

Oh, come on, Ken. That's the biggest thing. Yeah. It's like, well, you grew up in a four-bedroom, three-car garage, and you think that that's what you're supposed to start with. And I'm like, you grew up in a four bedroom three car garage and you think that that's what you're supposed to start with and i'm like at 23 well i think a lot of people do think you're right and it's like wait a second i mean the first house stacy and i started with it was it's like a matchbox compared to what we live in now i do know we thought it was massive and scared to death of it by the way it's 198 000 wow and i thought and i thought and by the way. It's $198,000. Wow. And I thought, and I thought, and by the way, I did it by the book, the down payment, the

way Ramsey teaches it. But I thought I had mortgaged my life away because of the sheer price of the home. Yes. $198,000 back then. That was like, I thought I was going to die. And that's so important to note, Ken, so important. Despite what your monthly payment for the mortgage might be, you still, that first home, you feel the weight of whatever the entire amount is. Yeah, even though we put a nice down payment on, it was over 20%, but it

still felt like, what have I done? And so there's a responsibility there, which by the way, it makes me think, I want to just add one thing. I thought your answers were great. This is why we created what I think is one of the best resources we've ever created at Ramsey. And by the way, it's all free. It's called Ramsey's Real Estate Home Base. So anybody watching and listening right now, this is free. And it's absolutely chock full. It's a podcast on there. We've got a book on there.

We've got a video series, how-to articles, start-to-finish guides on buying or selling anything real estate related. If you're kind of going, what do I do? Yes. And you trust us, go to ramseysolutions.com slash real estate. Let me say that again, ramseysolutions.com slash real estate. If you couldn't write it down, can't remember it, go to the show notes for today. It's there. Very important that you understand what all is involved here. So really good question. And Ken, let me drive this point home one more way.

Drive it down the lane. There's always a new listener, someone who doesn't know our backgrounds, right? So my husband and I, I loved this question because right now the real estate, it's gotten more and more expensive. It started to cool out in some areas, but the truth is it is very expensive. And with other things being expensive, inflation and things like that, it does make it feel harder to be able to accomplish this dream. That is the truth.

Well, the numbers have gone up. You're right about that. It is a higher level. Yeah. And so I like to remind people when my husband and I were getting out of debt, of course, we couldn't buy a house during that time because we say you should really pay off your debt before you become a first time homeowner. And so Sam and I rented Ken for 10 years.

And during the course of that 10 years, we paid off $460,000 of debt. And then we saved up and were able to do, you know, you also had a bunch of people living with you too. I feel like you say, what? Didn't you have a bunch of people living with you too? Not a bunch of folks. We had roommates at one point. We did.

That's what I'm saying. I'm not knocking that. We were married and we had another married couple that lived with us for a year i thought that was extreme 10 out of 10 would not recommend ken but you did it we did it but the point is i said a bunch of people i'm sorry it kind of sounded like we were just on the block we just have folks coming through i'm living in a. No, just reframing like a timeframe. If it takes 10 years, so be it. You'll be a homeowner. I can tell you, you will. And here's the key. Actually, I'm really glad you brought that up because I think some people right now are still going 10 years before you throw

shade at my friend. I want to bring this back to you because that 10 years of rent, I'm sitting here with you today and I'm going to take a guess that you don't feel like you pissed that money away not at all so what did the 10 years of rent which some people right now are on tiktok instagram going what yeah yeah how did that 10 years of renting give you freedom to get to where you are today um break it down well a I don't regret it at all like here in my life I'm 41 years old I don't regret it at all. Like here in my life, I'm 41 years old. I don't go, oh man, if only I had bought my house when I was 23. Like there's no part of me that thinks back and regret at all. Why? Because it was worth it to do things right.

You took seven, we took seven and a half years, paid off all the debt. Then we took, we lollygagged a couple of years because we were tired. Took some more time to save up. That's the truth. Well, you were paying off half a million dollars. That's right. You deserve a water break took some more time to save up. That's the truth. Well, you were paying off half a million dollars. That's right. You deserve a water break. It took some time to save up. And then when we finally bought our house,

I was pregnant. I had just had my first son and I was 36 years old and it was great. And now here you are, homeowner. Homeowner. I'm on my second house. People think that that's wasting money. And in your case, it was actually the freedom and margin you needed to get out of debt. That's right it was cheaper it was far cheaper for us to rent we had a season of roommates and it freed up money and like we said before the last thing i needed was more stress of then feeling like okay now i've also got this mortgage that i have to you know be accountable for so ken craziest thing that happened that you're willing to share

when you had another married couple, roommates, or most awkward? I think one time we came home and they had bought an alarm for the house. And so Sam and I came home from a trip. We had been working. And when we opened up the door,

well, they didn't tell you. Yeah. And that has to be really alarming. Yeah. That alarmed me. I'll bet. No pun intended. Wow.

Yeah. It was alarmed. I think that should have been a reality show. I hate that we missed that. That part I don't miss. I love them. They were great people. I have nothing but love in my heart for them.

Still in touch with them? Yeah. Somewhat. Somewhat. From a distance, but not because they're not great people. From a distance, little Bette Midler. From a distance. There it is. I knew she would do it, folks. That's all I gotta do is tee it up and she can sing it. Check the key. Lady in the lobby's giving you a heart sign. She wants a little Bette Midler during the break. God is watching us. That's how you go out to break right there, folks.

I'll listen as she sings along during the commercial break. We'll be back before you know it. This is The Ramsey Show. Welcome back to The Ramsey Show. Alongside Jade Warshaw, I'm Ken Coleman. So glad you're with us today as we help you win with your money, win in your profession, and win with your relationships. 888-825-5225.

Jade, I'm a little excited about it, and I don't naturally celebrate these things like I should. Super excited. Been dreaming about a show concept for a long time, and we've been working on it as a team. The team's done a great job. It's called Front Row Seat with Ken Coleman, and people ask, has it replaced the Ken Coleman Show?

Yes, because it is a very different format. Imagine you're sitting in on a deep dive conversation with somebody who's a thought leader, someone who has done something extraordinary in their lives. They are a man or a woman of success. And you get to be a part of the audience, and you're sitting around with us asking a question. Well, that is the format, live format. We record it, and then also we have a virtual format where people can Zoom in, if you will.

So we're bringing the audience to the front row seat. That's the concept. It's on YouTube now or wherever you get your podcasts. A new episode comes out every Tuesday morning. If you want to get better personally, move up professionally, and lead effectively, those are the conversations. Wow. How do you source your guests? How do you pick? How do you select your guests? Because you've had some wonderful guests. Yeah, some really fun guests. And the way it goes down is we're selecting people within those categories. So, for instance, experts can help out in the area of personal growth.

So that would be an expert maybe on sleep or nutrition or exercise. Wow, okay. Right? Holistic. We're mixing it up, right? And then, of course, we have people that are professional gurus that can help you on certain soft skills. Like we just had Charles Duhigg.

We just recorded that. It'll come out soon. Pulitzer Prize-winning author of the book Super Communicators. Wow. So we're talking about the three types of conversation. So how do we use those types of conversation to win in our profession but also win at home? That's so helpful.

And then, of course, leadership experts. So it's very intentional between those three buckets of content, if that makes sense. Well done, Ken. Thank you. I'm really excited about it. It's beautiful, by the way. If you want to check it out on YouTube, the team did a great job with the set. Looks really, really fun. So the Front Row Seat is the name of the show, Front Row Seat with Ken Coleman. You can get it on YouTube or wherever you get your podcasts. Let's go to Brianna, who's joining us in Dallas, Texas. Brianna, how can we help today? Hi, yes, I have a question. Well, I need some advice. Me and my husband are thinking about selling our home because we're just drowning in debt, and we just don't have any other option to try to get out of it but to sell our home.

So, yes, that's my question. What has created that scenario where you don't believe you have any other options? Give us some details. Well, we are just drowning in debt. And I know y'all always say say sell the cars and we looked into it we owe um in one of our cars we owe like nine thousand okay and we we try to see if we can sell it but we will be under it's really not worth selling it's just i guess right now we're just better off paying it off and the other one12,000. And that one as well is negative. So we're like, okay, we might as well just try to hang on to those and try to pay those off. And

everything else is loans and credit cards, student loans, IRAs. Go through the other ones. Go through the other amounts for us so we can get a picture of this. So the $9,000 car, the $12,000 car, what else? And then loans, like personal loans, you know, like $20,000. Okay. Credit cards is around like $35,000 to like $40,000. Okay. Student loans is, my husband's is like $73,000. Okay. How much are yours?

I don't have any. Good. And my real, the IRS is like $9,500. Okay. And then I have medical bills that's like $3,000. Okay. What's your combined income? Combined income is like $10,500 to like $11,000.

Per month? Yes. Okay. And have you added up, if you don't know it's okay but if i were to ask you on the spot like how much does this cost you in payments every month do you know the number to that like the debt alone is like four thousand probably a little bit more okay so you're paying four thousand in payments and then tell me um's your mortgage. Tell me about the mortgage. Tell me what you owe on it. The mortgage is like $3,100.

Okay. And that's what you're paying per month, but tell me how much you bought the house for. The house, we bought it for $386. What's it worth? Right now it's worth like $385, $386,000. What's it worth? Right now it's worth like $385,000, $387,000. Well, sweetheart, if you sell the house, that's not going to give you guys much money at all. I know.

We owe $340,000 on it right now. Right, but after you pay your realtor, there's very little of this that is going to actually solve this problem. Right. That's what we were like, okay, should we just try to fight for it or should we try to sell it and try to at least get out of it? Jade's got something to tell you. The only thing we were thinking is because my husband drives like an hour and a half commute to his job.

Okay, interesting. So he wanted to move closer to his job because it's a long drive. Could you rent for less money in that location? Sorry, Jade. That's okay. The rent's probably going to be like $2,000. Not much difference. Not much difference.

Well, no, you said you're paying $3,100 per month. Oh, yeah, that is actually a huge difference. Right? $3,100 plus the HOA. Oh, that's not including HOA. What's your HOA? $250 every quarter. Okay, every quarter.

Okay. I would consider moving, Jade, in this situation because that's a long way to commute, number one. Well, there's a couple of things. You got that commute i was going to ask you is it an hour and a half each way or is that combined because if it's 40 minutes that's not as big of a deal but no it's each way oh girl yeah i definitely move into the office uh three days out of the week so two days he'll work from home but three days out of the week he has to drive to the office it's still a lot three hours driving in a day is a lot to get to work um so that's one that's one green light it's not the biggest reason because like you said it's not like he's going in every day

but it is a reason the biggest reason for me to consider getting out of this house is because it's more it's more than 25 of your take-. And at this point, you need every dollar that you can get your hands on. Now, there is a thought here. And you guys need to sit and talk about this because there's a thought where I go, okay, if you guys really start side hustling, if you start picking up your income, there could be a world when this debt is over that this is 25 20 that this is 25 of your take-home you see what i'm saying that you raise your income and it becomes something that you can keep around today though it's really a problem so i would say your homework to sit down with your spouse

tonight would be to say what are all the things we can do to make money what are your opportunities that are directly related to your job and what are mine that are, do you, do you both work? Yes, we both work. So he has his main job and then he has a part-time job on the weekends to make like some extra income. I try to work overtime. I work at a daycare. So I try to work extra like overtime whenever I can. How consistent can that happen? Is that like a daily thing or is it like a couple of times a month? It varies. It depends on the teachers. Like I just found out I have COVID so I have to be out all week. So what I'd be looking for when I'm looking for a side hustle, I'm looking for something I can count on. That's the whole point. So I'd be looking if I'm count on that's the whole point so I'd be looking

if I'm going to spend the extra hours working I want something that's like clockwork I can get it I can go bust my butt and do it and it's there so you both need that um and then if something if you know uh part-time pops up at the at the job and you have the the leverage you know the place in your schedule to do it you do that that too. But right now, I want here's my main job and a go-to side hustle that's always there. I can work it every day, every weekend. Got it. So

that's you guys' job to come up with that tonight. And then after that, have you made a budget? I tried the dollar thing. I just downloaded it. I did like the free trial thing, but I'm going to have to cancel it because it's like $18 a month. Okay. Y'all need to stop borrowing money.

Yeah, you got to stop borrowing. Ken is right. Yes. Ken is right. Like you got in this mess because y'all are trying to do too much and you don't have enough money for it. So if you can't afford every dollar to get a budget, you better get it out on paper. You can afford it. You spend more on pizza delivery, okay?

You can afford it. This is The Ramsey Show. This is The Ramsey Show, where America shows up to get coached, to win with their money, win in their profession, and win with their relationships. 888-825-5225 is the phone number. I'm Ken Coleman, thrilled to be joined by my friend Jade Warshaw. We're here for you all today, so let's go. Jump in, 888-825-5225.

Sarah did, so we're going to go to her. She's joining us from the Big Apple. Sarah, how can we help? Hi, thank you for having me. You bet. So I'm looking for an unbiased opinion. Well, you got two of them ready to roll. What's happening?

Great, great. So I just got married in September, this past September, to my husband. Congrats. Thank you. 27 and 30. I'm 27. He's 30 years old. I am a registered nurse. I make about, I make a little bit over 90K a year. He actually $34 an hour. So that equates to about 70 grand a year. Okay. We have no debt at all. We are living with my parents, which has not been easy. Why? So my question is because we want to, we want to move out and we want to be on our own and it's not easy to live at home, you know, in general.

My parents are very easy to live with. We just want to move on. No, no, we get that. But Jade said, why are you still living with your parents? We're still living with our parents because he's been bouncing between jobs and has not had a stable job at all. No steady income. Uh-huh. And you guys can't live on your $90,000? and has not had a stable job at all, no steady income.

Uh-huh. And you guys can't live on your $90,000? No, not in New Jersey. We really are looking for a single-family home or even a townhome we're open to. What about rent? We're not looking really to rent because it's not something i want to do i want to invest in a home and i don't want to go to the doctor sarah i really don't want to go to the doctor don't want

to go to the dentist don't want to go to the eye doctor uh some days jade i don't want to go to the gym i hear that but i need to and i think what you guys need to do is to rent until you can get up a down payment. My partner here will tell you exactly what that needs to look like. But you need to rent so that you can get out of your parents' house. Oh, that's so much better than living with mom and dad at 27 and 30. You guys are probably at each other's, you're getting on each other's nerves, no doubt, right? Right, yes. Yeah.

Listen, Jade and Sam rented for 10 years now we're not suggesting you do that but they were also paying off half a million dollars in debt jade why does she need to rent take over the numbers here's the thing you guys you're newlyweds and we would tell anybody who's newlyweds yes rent as opposed to live with mom and dad yeah because it's a great chance for you guys to truly get to know each other well let's let's filter it through both you're getting to know each other without mom and dad with their cup to the wall you know what i'm saying like that's the last thing you need you're trying to get into your marriage and the rhythms of what life will really be like and you can't do that at your parents house and when you're renting it's kind of like okay let's test it out let's figure out what do we both like let's figure out what our rhythms of

are are in life so that when it's time to buy you kind of know what that is you know like listen sam and i know you sam you need a separate sink like i need my sink over here you need your sink over there we that is what we learned from renting really good example you know what i'm saying and so you get to learn those things about each other. It's a low-pressure environment, low-pressure financially, and low-pressure relationally because once you go into home ownership, the pressure, the pressurometer rises. Yeah, like that. The pressurometer.

Okay, so let's run through some numbers, Sarah. Are you with us so far? Do you think we're aliens? No, I don't think you're aliens at all. Okay, so let's run the numbers. The good news is you guys have no debt, correct? Correct. And now Hubs has got a pretty good construction job. That's not bad. So we've got a combined income right now of $160,000 gross. Okay. So let's go to, you know we want you to rent right now. So now we're going to jump into the numbers. Give us a reasonable cost of a home in your area, a starter home for you guys.

Give us a range of what that mortgage might be. The reasonable cost in this area, from what I'm seeing, the issue is when you find a house that is a little bit less money, the entire thing needs to be flipped. So when you find a house that is moving ready that only needs some updates, I'd say around their $450,000 to $500,000. All right. So I want Jade to work with you on that. So Jade, what's our target on a $450,000 to $500,000 house? Okay. So for you guys, I have to pull out my calculator to get it right

there. But what I want you to do, I want you to go on ramseysolutions.com and do the, how much home can I afford calculator? And what you're going to be able to do is work the numbers backwards and say, okay, $450,000. Of course, I would say put down 20% more if you can, but really what we're trying to get to more so of the down payment is we want to get to the point to where your mortgage is no more than 25% of your take home. Because you might put down 20% and say, man, this payment is still too high. Right. So what we're looking for is that payment to be right on the money, 25% or lower. So that's your target.

And you're going to be able to figure that out exactly what that is for you with the calculator. Now, for you, like I said, you're going to take some time because you're going to rent for a while. But when it does come time to buy, if your husband's income is still some timey, base it on the lowest month. Okay. Like base it on, if you need to base it on a $90,000 income, base it on a 110, right? Don't base it on your max income because he has a very variable income and you want that house to feel like a blessing. So that's the best advice I'd give you there. Yeah, that's the best advice. Yeah, because by the way, she's right, Sarah,

because the alternative is if you guys go get in a house that you can barely afford, you're stressed out of your mind. Yes. And this thing that you wanted so much, which by the way, it's great to want a house. It's natural. But that thing can become a nightmare. We took a call earlier in the show where someone had bought too much house and they were like, we got to sell it. Yeah. So you don't want that, do you?

Yes or no? Yeah. Right. And you don't want to keep living with mom and dad, do you? Yes or no? No, I don't. As much as I love them, we want to move on. Guess what?

Guess what, Sarah? You get to rent. Yes. It's going to be okay. Can I wedge my foot in the door real quick before we slam it? Let me give you one other piece of advice that I have learned from hosting this show. It happens all the time a couple calls in the show and they're strapped because they were newly married when they bought their house

then mama decides hey i'm pregnant i want to stay home with these babies oh and the income cuts in half and then they can't they're like how can we keep this house because they bought a house based on two incomes that's right so if i could give you any piece of advice it's try to have the future in mind when you lock into a payment and say hey realistically what would it look like if i chose to stay home what would this payment do to us just think about that so that you don't get yourself in a situation that i hear from callers all the time. It's true. Sarah, do you guys plan to have a family? Yes.

Sarah, can I tell you, I've been married 27 years, coming up on 28. Stacey and I, a little bit longer than we wanted to without kiddos. But we now look back on those days as the golden era of the Coleman marriage. Yeah. Enjoy getting out of the house, mom and dad, and live together. Enjoy this time that you have. Save the money, the babies, the house. It's all out there.

But don't be in a hurry because a hurry only creates problems. And I just don't want that for you. So hang in there. Let's rent and let's enjoy life. We're not promised tomorrow, so let's enjoy today. That's my advice. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm Ken Coleman. Jade Warshaw is joining me. We're here for you. 888-825-5225. Let's go to Pace. That's a great name, by the way. I just like to call things out like that. Pace. I'm with it.

What if my name was Pace Coleman? That's it. Folks, by the way, if anybody's wondering if ADHD is a real thing, you just saw it right there. I got my meds back on. I'll get back to the call here. Pace, I love the name. You're on the Ramsey Show. How can we help? Hi, I think that's a great name for you. Pace Coleman. I do tell you, I think it'd be a bigger deal than I am now, but that's not what's meant to be for me. But I'm glad to talk to you. You're the very first Pace

I've ever talked to. I like it. Yeah. What's going on? Hey, so my question is if I should pick up a couple of extra jobs on top of my main job. I don't even care what the reason is. I always answer that question with yes. What are you trying to do, Pace? No, I'm 29. My wife just had our fourth child. Wow. Congrats. Yeah. Thank you. We right now are about $55,000 in debt. Okay. And I'm returning from paternity leave next week, which I'm okay with,

but picking up a couple of extra jobs, it's to try and help bring down all of that debt. And we literally have like no savings because we are absolutely terrible with money. Um, but my wife also has bad, um, uh, postpartum depression. And so it kind of makes me nervous to go get part-time jobs while she's dealing with that depression. What she, what kind of help is she getting for the depression? Right now, really nothing. She's had it in the past and she just kind of cries and talks to whoever she knows and tries to get over it. Usually I'm that person that she talks to. Do you guys have any margin at all financially?

Do you have any margin? Are you guys like to the nickel paycheck to paycheck? At the end of our paychecks, we probably have a couple of hundred dollars, but like I said, we are terrible with our money and blow it. Do you think it's possible if Jade sat with you two in your kitchen, cause she's done this on YouTube and she's great at it, but I'm just, just metaphorically, if Jade were to sit with you two and go through your monthly expenses,

you admitting that you're terrible with money, do you think she could find maybe $1,000, $1,200 of margin? What do you think? I don't think that much, but I'm sure that there'd be a lot more margin than we're looking at right now. Jade, let me tell you why I asked that question. I'm sure that there'd be a lot more margin than we're looking at right now. Jade, let me tell you why I asked that question. I'm going to hand it to you because you're the budget queen. But Pace, if I'm him, I'm going to get coached up by you right now. I'm going to get on every dollar and I'm going to try to scrape enough that I can get her with better help.

I endorse better help. Better help is such a viable option. She needs some actual help and they can help her. She can switch therapists at any time, her schedule. I would really like to find that money. I'm so glad you said that. I thought you had moved on from it and I was planning to come back to it because- No, I'm with you. It's so, yeah, Pace, for different moms different moms it's different but it can be serious and for you since you said in the past you've been there for her but if you take yourself out of the picture i would hate for her to feel like she doesn't have the support that she needs so i 100

endorse what ken coleman just said and that's a number one which by the way the part-time job to pay for her help yes is also the. Yeah. That's A number one. A number two or two B. I'm so confused right now. I'm tracking though. A one, two B. Next, I want to say that, and I don't want to get too woo-woo on you, but I want you to change your vocabulary.

I'm going to prescribe a vocab rehab for you because- Oh, word change alert uh-huh because words are powerful and if you keep saying we're terrible with money we suck at money we're horrible with money you will be horrible with money and so there's part of this that you've got to start owning a new identity as a way to start walking in that identity I'm a person who's learning to be great with my money I'm a person who's getting better at managing my money i'm a person who's do you see what i'm saying i want you to start owning that identity because that is powerful mentally how you speak to yourself um and so in order to help you be better with your money uh we're going to send you financial peace university we're going

to send you every dollar and a copy of the book total money makeover because you guys need to fill your brain one of the ways that you do a vocab rehab, Ken, is you take out the old things that were in your brain and replace them with new helpful things, right? We're regenerating, we're renewing our mind here, and that's going to help you do that. So those are your two biggest fish to fry, is getting a job so your wife can get the help she needs you binging all this material to get your mind right and then you're going to be able to dive into this that's right and really hit the ground running because you're going to walk through the baby steps and everything i just gave you is really going to give you a crash course and it's going to give you a deep dive

on how to do all that it really is and pace listen i mean i love what she said there she's absolutely right you've got to believe on this phone call. You've got to believe right now that you can actually fix this. Do you believe that you can fix this? Yeah, I do. How bad do you want to fix it? Really, really bad. I mean, the other day I got every dollar and actually put down how much we're spending on stuff

and realized what situation we're in. And now I'm like, oh, shoot, we need to really figure out our lives so that we can be better. What's the most important thing to you when it comes to your family? What is it? Just providing for them. Come on, my man. Listen, this is huge.

Pace, you actually using every dollar and figuring out where the extra is by cutting some of these unnecessary expenses and finding a little bit more margin, even if it's $300 or $400 a month, plus you going out and working two or three extra jobs to maybe bring in an extra $1,200, $1,500, $2,000 a month and actually now use that to pay off debt, to then create a margin for a real emergency fund, to be able to invest 15% after you've got the emergency

fund in place. Man, tell me you wouldn't just walk a little bit taller and sleep a little bit better. Talk to me, Pace. Absolutely. Okay. That is within your grasp right now. So today's the day. My man, you are not a failure. You're a good husband and you're a good dad. I want you to hear that. You need to hear that. And by the way, whatever you've done in the past with money, it's over because we've got a new day starting today. And your precious wife, who's hurting right now, needs you to not just make more money, but to take care of the

money you have so that she can deal with the real chemical thing that is happening that she has no control over that's right and the best thing you can do for her right now is step up you don't have to be a superhero you just got to be that hero i just i really want you to i hope you're receiving this as something that you can do pace because this is a game changer but you got to step up today yeah all right my man we're rooting for you you can do this this is a this is a game changer, but you've got to step up today. Yeah. All right, my man. We're rooting for you. You can do this.

This is a tough season, but it's just a season. You're going to get through it. But don't – listen, she's an amazing woman, and you're an amazing guy, but I have learned the hard way coming up on 20 Years of Marriage. Me sitting down and listening to Stacey when she's going through it ain't the same as her getting to talk to a professional oh yeah that's true 100% it just ain't the same yeah and you I mean yeah no I'm just saying I'm with you I'm now I'm saying pace this is the next level because I think I think we gutted it out at times when we and by the way we made it through we all do but man i i just wish sometimes a prescription is for the husband to to get to leave the house yeah but i mean it like get her help get

her help get her help instantly yeah uh yeah get her help that's a tough you know did you struggle with that i don't if you don't want to answer that i didn't i didn't um at least i don't think i did um but i know there's a spectrum and like it can be very dangerous you know for real yeah it's for real so taking care of that's going to be really really important but my guy pace he's a good dude yeah he's doing and i sense that you feel it he feels the weight and by the way four kids man we all need to feel the weight you know when davis said for decades when you get sick and tired of being sick and tired, that's when you change. I think now is the moment with four kids, the life going through postpartum.

He doesn't want to feel that weight anymore. And so I think he's going to make massive change. Pace, we believe in you, man. Hang on the line. We're going to get you the stuff that Jade promised. Dive in with everything you got. It's going to be okay. The sun comes in the morning.

It always does. All right. Tell you what else comes back. Us after commercial break. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. And Jade Warshaw is alongside.

Hey, it's getting to be that time. Tax isn't going to be due before you know it. One of the best things you can do is to have a good tax pro in your corner that you can trust so that you get all the advice you need to make the best moves for your small business, your personal situation, especially if you've had some big life changes. So to make sure that you aren't trying to figure out the complicated tax code on your own, we really recommend you getting a tax pro locally to work for you. You can find one by going to ramseysolutions.com slash tax pro, ramseysolutions.com slash tax pro to find a CPA or enrolled agents that has been vetted by the Ramsey team. Let's go to Neeraj, who is joining

us in Cleveland, Ohio. How can we help today? Yeah, I have a question. I got my start a little later in life because of illness, and I just feel like I'm behind the eight ball when it comes to investing and saving, and I'm just worried that I'm never going to have enough when I look at myself compared to family and friends who are at my age, and I'm just wondering what I can do to either not be stressed or do better. Oh, that's a great question. So tell us more about the numbers. Tell us what you have.

Tell us how old you are. Sure. 36. But I spent like my teens and early 20s in and out of hospitals with cancer. And I finally got better and didn't get my first real adult job until I was in my mid-20s and didn't see a real good paycheck until about two years ago. So I do max out my 401k and I started a Roth IRA about five years ago. And about three years ago, I started putting 15% of my paycheck towards investing. But I just feel like when I talk to my friends who started their 401ks and investing in their 20s, I'm just worried that I'm not going to have enough. And I'm just, you know, I'm scared that I'm saving, but it's never

going to get me to where I want to be. Yeah. I mean, there is a part that time in the market is optimal, right? Like if you could have started at 21, that would be great, you know, but that's not the case. And so rather than get caught up on like the shoulda, coulda, woulda of it, because I feel that like I understand what you're saying in that way. My husband and I didn't start investing till our mid 30s as well. And so the good news is it's definitely not too late. You just have a different race,

right? And there's that scripture that talks about like when you're doing your race, like just look straight forward. Don't look to the right or to the left because in a lot of ways, that can become a distraction for you. Just look forward and run your race. And so this is your race. And the good news is you've been doing a lot of the right things. You've been maxing out a 401k. You're starting to contribute to a Roth. You're doing 15%, which is great. What is 15%? How much is that every month? So I make about 150 a year. So after taxes, I'm putting about, just off the top of my head, I'm putting about, I want to say $1,500 a month towards my investing.

Okay, good. So the only difference I might change there is I do 15% off the gross amount as opposed to after tax. And the good news is, what do you have so far? What's your nest egg between it all combined? I have about $42,000 across my investments, my Roth and my 401k. Okay, good. So if you continue to do that, let's pretend you do that from now until, you know, typical retirement age or social security age, I should say around 62, right?

If you continue to do that, just at the 1500, you're going to be close to 3 million, right? 2.7 is what I'm looking at. So that's the good news. That's pretty decent. Like if you say, hey, I'm just going to live off the growth, that's not bad, right? That's what I would call retiring with dignity, okay? And the truth is you're only 36. You're so young. Ken, you can talk to this. Most people hit their max like earning potential in their 50s. Like I saw a report the other day that said for some people it's like even higher. Yeah, it's in the 60s, you know, depending on what your profession is. But yeah, you're 50s and 60s. Like I saw a report the other day that said for some people, it's like even higher. Yeah, it's in the 60s, you know, depending on what your profession is. But yeah, your 50s and 60s. So I mean, there's a lot of runway, no question about it. So the idea here,

absolutely, Jade's advice is great, but also to have this mindset that, wait a second, I'm not playing this big catch-up game. I just need to be consistent. And I think there's a big difference there between this, you know to oh okay i just gotta get up show up and keep showing up yeah that's good yeah so yeah that's all i have to say run your race give careful thought to the to where your feet go don't look to the right to left this is your race and you're doing a great job yeah just stay with it stay stay the course. Let's go to Nikki in Austin, Texas. Nikki, how can we help? Hi. So my question is today, so I'm a new listener, and from what I've heard, you know, the best way to tackle your debt is to focus on your small debt first and then work towards your larger. But so I have a mortgage that's currently at a 9.75 interest rate. And so I'm just kind of in between of whether to focus on my smaller debt

or to focus on what I can do to get out of the 9.75 interest rate. So it sounds like this is less of a question about debt and more of a question about what to do about a mortgage that's squeezing you. That's what it sounds like. Am I wrong or am I right? You're right. Okay, so tell us about the mortgage. Tell us what's the payment that you're paying every month. So I pay $1,450 a month.

I had it since 2017, March of 2017. Okay. And what cost, okay, $9.7 in 2017? What happened there? Did you refinance? What happened? No, I haven't refinanced. I haven't. Honestly, it was my first home. I mean, we worked with a realtor and we went more, more through like a title company rather than through an actual like mortgage. Yeah, that feels subprime. 9.7 in 2017. Yeah. What's going on? Okay. So what's your income and what was your income at the

time so at the time uh it was like i was probably making like 30 000 and my husband was probably making like 40 000 i recently just finished my undergrad and i got a promotion at my work so um i'm now kind of like an area where I can actually focus a little bit more on my debt. So my husband makes around $60,000 and then I'll also be making $60,000. Okay. So what are you guys bringing home right now after taxes? What's your take-home pay combined? So combined, it's about $7, about seven thousand okay so this shouldn't be too much of an issue for you guys to pay this rent or this mortgage every single month so month to month it's not as much of an issue as much as it is this interest rate have you considered refinancing

to a lower rate um i i I honestly just haven't had the... I just haven't sat down and really figured it out and figured out how to refinance and what that process looks like. Well, I'm going to set you up with our friends at Churchill because they're going to get you out of this. This is wild that you're in this. This is doable. They can help you. They're going to help you big time. So before you get off the call, we'll make sure you know, go to them. They're great. They're going to establish a relationship with you. They're going to walk you through it and they'll continue to walk with you, which is one of the things I love about them. So that's thing

number one. Let's talk about the debt because she mentioned. So tell us about your other debts. So as far as my other debt, I have $60,000 in student loan debt, but I am currently in grad school to get my master's degree. So that's going to be going up a little bit. How are you paying for it? How are you paying for the master's degree? So I work at a university, so they pay for 80 percent of it and then that leaves just the 20 percent that I have to cover and you're paying cash for that so I'm doing uh student loans okay I think that's not a great idea how can we how can we change that how much time is left so i just graduated my undergrad in december and started my grad school oh man genuine okay we've got to figure out a way i wish we had time more time ken we can hold her over because i

definitely would like to pause that yeah let's do it all right tell you what we got a few more things nick we want to help you with Can you hang on during the commercial break? Yeah. All right, hang on. All right, we're going to come back. We're going to help Nikki out. This is a problem a lot of people face, so this will be really good. So hang on, Nikki.

Hang on the rest of you. We'll be back before you know it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is joining me. The scripture of the day is Romans 13, 7. Give to everyone what you owe them. If you owe taxes, pay taxes. If revenue, then revenue. If respect, then respect. If honor, then honor. Our quote today is from Steve Forbes. The politicians say we can't afford a tax cut. Maybe we can't afford the politicians.

Don't get me started on that. I agree with that. All right. Now, we held Nikki over, and Nikki has gotten a crazy interest rate. It was 9.7% in 2017. Just started grad school. So we're trying to help her get some more margin and move forward here. So we're going to bring her back because uh jade wanted to work on this a little bit more and we needed to so nikki you still there yeah all right uh so the question is grad school grad school 80

up front from the university and right before we went to break you were like oh i'm not sure that's the best idea uh nikki j Jade asked me what I thought during the break, and I said, yeah, I would press pause on this because you don't need any more debt right now. I think you agree with that, correct? Yes. And grad school will still be there. The question I have is, can you press pause and still get that 80% of tuition? As long as I stay with the university, they provide the, they offer, it's a benefit. Right. So what I'm hearing is, is that you, we can press pause and not hurt your goal of getting a grad degree. Yeah. Okay. Well then I, Jade, I'm going to tell you, I would definitely press pause. I agree with you. Because you've already got $60,000 of student loans.

What other debt did you have? I would say like $5,000 to $10,000 of just my personal loans, maybe like hospital bills. You're saying combined, $10,000 combined personal loans, medical bills. Okay. What else? Other than pretty much our basic living expenses, that's pretty much it. No cars? Oh, I have my cars paid off and my husband has two years left on a car note.

Okay, and how much is that? So he pays $800 a month. What's the total debt owed, I mean? It is $30,000. Okay, 000 okay that's significant okay do you know what his car is worth um i don't it's a 2015 toyota tundra okay so there might be a play there where you guys get out of that car i mean he owes 30 000 on it which is a big chunk of this debt, almost a quarter of it. So that's worth getting out of that. Okay, now we're looking at income. You told me you guys make $7,000 a month. Is that right, combined? Yeah. Okay, so back to your original, original question. What do I do? Do I list them

smallest to largest? Yes, you do. So we're going to start with the smallest debt here, and that's how you snowball. You pay minimum payments on everything and then you throw all of your extra money towards the smallest debt. Now, this 60,000 of student loans, are you guys paying real payments or is it on like a safe plan where you're paying like 17 bucks a month? So it hasn't kicked in because I have the six months of like the time from when you graduate to when you have to start paying. So we haven't started paying yet. Okay. And when it kicks in, what will it be? Because you need to be thinking about that now.

It's going to be like $1,000. Okay. Okay. So if you go on a plan, you'll be paying less, which could free up more money for you to knock out these personal loans and medical loans. So be thinking about that, what that could mean for you. And then it's pushing play on those student loans one at a time. They're grouped together now, but they're probably individual by semester. So you could attack them one at a time when the time comes with a vengeance. And so that's what I would do here, Ken. That's what I would do. I don't disagree. I think that's the right plan.

And again, momentum here. Got to go fast. You got to pick up extra work, everything. You're not in school anymore. So now's the time to go hard in the paint. Yeah, I agree. I like that. Becky, thanks for hanging on with us. You've got the game plan here. So we're here to help you out. Let's go to Salt Lake City now where Megan is joining us. Megan, how can we help? So, thanks for having me. Sure. I'm 45 years old, about to be divorced. After everything is divided, I'll probably have like $100,000. I haven't really worked in my career that I got my degree in since my kids were little, and so I'm trying to find a full-time job and things like that. And I'm kind of concerned that I've missed out on a lot of retirement deposits and savings,

and I'm trying to figure out what to do next. How old are you again? 45. Okay, great news. You haven't missed out, I promise you. I know that a lot of life has happened, but Jade can prove that with her amazing little investment calculator. But I just wonder, on the outset here, you can make up ground. You're going to be okay, but you got to rebuild, right? Yeah. Are you taking any debt out of the divorce? No, it should all be taken care of and that $100,000 is what I should be left with. Of profit or in the plus? Okay, just making sure. Will you be working?

I'm sorry? Will you be working and what would your income be? I'm currently looking for a job right now. I've been working at my daughter's high school and make like, I don't know, $1,400 a month, which is, you know, small beans. But I have an engineering degree. So I'm working on getting a job. Okay, great. Well, the good news is you don't have any debt, right? That's the good news.

You're not coming out of this with a bunch of debt. The other good news is you've got a degree that you can put to work so you can really start to earn more money. And at this point where you're at, you are at the point where it would be time to build up either three to six months of emergency fund because is the $100,000, is it invested money or is it cash? It would be cash. Oh, okay. So then what I would do is I would hold out three to six months of

expenses of that money, whatever you denote is that much. And then the rest of it, I'd get it and start investing it and get that in working for me just because it's a lump sum. And then you're in baby steps four, five, and all that is is you pounding away 15 of income into your roth ira into your 401k if it has a match and the good news is if you can say hey 15 of my income somewhere you know right now i just put a thousand bucks i don't know what your income is going to be but if you can invest a thousand bucks a month you're going to retire with a million bucks or more so that's kind of a starting place. Yeah. If I were you, when you get off this call, go to ramseysolutions.com and play around with the investment calculator. And then you can kind of work backwards and just

get an idea of, okay, what's the life I want for myself and what would I have to invest in order to get that? And there's only five fields that you have to fill out. You put in your current age, the age that you want to retire, how much you currently have in investments, and how much you're going to be contributing. So all you do is play with that contribution button and you'll see, put a rate of return somewhere between eight and 10% because you should be getting at least 10%. And that's how this works. Yeah, absolutely does. I mean, this is doable. So you're starting, I mean, I hate that you're going through a divorce. I hate that. I do too. That's how this works. Yeah, absolutely does. I mean, this is doable. So you're starting, I hate that you're going through a divorce.

I hate that. I do too, that's tough. But I will say, happy that you're not coming out with debt. That'd be the worst. You got a six-figure start. You got an engineering degree. Yeah.

I mean. There's a lot of upside on this. There's a lot of sunlight. I mean, Jade laid out great advice. I just wanted to kind of add in here that, hey, you know what? As dark as this is, and this has been a very tough time for you, you really are going to be okay. If you get a good paying job and begin to invest and just stay the course, be disciplined, don't get tempted to get into debt and throw yourself backwards, you're going to be fine. You're going to be fine. Okay. Where would maybe a house purchase fall

into this in the future? That's a good question. So right. Technically now, if you want us to start saving for a down payment, you could because you don't have any debt. You've got the three months of three to six months of expenses. Whatever is left of that $100,000, you could start throwing that into a down payment. The first step would be just kind of survey the market in your area and say, okay, how much

for what I need, how much does it cost in my area? And then from there, you're going backwards. You're saying, okay, for me, the payment can't be any more than 25% of my take-home pay, right? So you need to put down that down payment to make sure that's where you're at. Does that make sense? Yeah, absolutely. It does. So yeah, you could do that's baby step 3B. So that's the step that comes just before investing. And you can do them both at the same time. You don't have to stop investing in order to save for a down payment. Yeah. Yeah. Really good stuff. Megan, sorry you're going through this, but again, clear skies for you ahead. So stay the course. Appreciate the call. All right, Jade Warshaw, always fun to be with you, friend.

Great stuff. I want to thank James Childs and our fearless crew behind the glass to keep us on the air. And we want to thank you, America, for listening. This is your show. We call it The Ramsey Show.