The Ramsey Show - App - The New Federal Housing Rule Rewards Financial Irresponsibility (Hour 3)

Episode Date: April 21, 2023

George Kamel & Jade Warshaw answer your questions and discuss: "I feel overwhelmed trying to save for retirement", The new federal housing rule that rewards financial irresponsibility, Buying precious metals, Saving to be able to travel. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work they love, and create amazing relationships. I'm Ramsey Personality, George Campbell, joined by Jay Warshaw this hour, and we're taking your calls at 888-825-5225. That's 888-825-5225. And if you've listened this long, I'm going to go on a wild assumption and assume that you enjoy this show. And if you enjoy it, I want to remind you it's free, and we would just ask that you do a few quick things while you're hanging out with us. One is make sure you're subscribed to the show or whenever you're listening or hit the follow button if you're on Spotify or any of those platforms and leave us a review. This really helps with getting the show out to more people. When they do show up, they're going, is this show worth my time? And they see your five-star review. That helps us out. And lastly, share it with a friend. Most people that tune into the show go, oh, my friend told me about it, that I got to listen, and now I'm hooked, and I'm in a

different place financially, and we love to hear that. So thank you to those of you who have done those things. Do you look at those reviews? Occasionally, for entertainment purposes only. They're a hoot. We have a good time with those. All right, let's go to Sarah in Princeton, New Jersey. Sarah, welcome to The Ramsey Show. How are you doing? Thank you for taking my call. Thank you for listening. Absolutely. What's going on? Well, I think I've had my head in the sand for a long time and just raising my babies and helping them grow. And I just really need to wake up and I'm a little bit of a panic. And but I'm willing, I'm capable. I can, you know, I can do this. I just need some guidance to,

you know, help me get there a little bit. Wow. So where are you at right now? What's the state of your finances? What are you earning? Do you have debt? I personally don't have any debt, you know, except for, you know, our mortgage. My kids are, I've got three kids, 15, 15, and 13. I don't have any college savings for them. I've got a pretty pathetic amount of retirement savings. You know, I've got some, you know, money in my savings account. And I just started doing a little bit of the envelope method.

So thank you for that. Um, how much do you have in that savings? Is it about, is it about three to six months? Um, and my savings, I got about 20,000. Very good. I got a 403B. I got about 65,000 and I have a small business I do at night after I get home from work and I've got about 20,000 saved, you know, in there.

Very good. That's incredible. Very good. What's your household income? Well, I personally right now make about $95,000. My husband makes more than me. So I think last year on our taxes we were at like $220,000 total. Girl, that's amazing.

Good job. Thanks. So you're feeling overwhelmed. Is he feeling overwhelmed? I'm confused if he's in this with you. Well. Are you guys on the same page? No, no.

I mean, he's great. He does what he thinks is right. And I'm just trying to do what I think is right. So he has a different idea about. He does what he thinks is right. And I'm just trying to do what I think is right. That's a statement. So he has a different idea about... He does what he thinks is right. What does that mean? Well, I've got, like I said, my head was in the sand.

I've got some big goals, and I think his goals are a little bit different than mine. Not completely. I don't want to make him sound like a terrible person. But, you know, we just don't always agree on it. But you're saying, I'm confused, because I'm looking at this amazing income. You don't have any debt. You have money in the bank. Why are you feeling overwhelmed? Well, I mean, he's got some debt.

I don't have debt. Oh. Sarah, Sarah, Sarah. How much debt does this man have? Well, I mean, he's just got a new truck, so he put some money down on it. I think he's got about $30,000 left to pay. He's got a...

He took out a home equity line of credit when we refinanced. What? About $40,000 to put into crypto. What? My skin is crawling, Sarah. But he's got a 401k. That's got a decent amount in it.

He took out a HELOC to invest in crypto? How much? Well, we refied and he took out some money. How much did he take out? About $40,000. You did a refi cash out to invest into crypto. Okay. Okay, so now...

I kind of didn't know what was going on. So you just said, hey, honey, I'm going to do this thing? And he went, okay, I trust you, honey. That's what the problem is. She's saying she's been sticking her head in the sand and just kind of going along with what he wants to do. Now she's taking her head out of the sand.

And correct me if I'm wrong, Sarah, now she's taking her head out of the sand. And correct me if I'm wrong, Sarah. Now she's taking her head out of the sand and realizing, hey, some of the things he was doing were really bad ideas. And she probably should have spoken up sooner. But now here we are. Did I get that right? Yeah, I just didn't know any better. It's really not that I didn't speak up. I just didn't know. And I just, you know, he really made he was confident. He is confident, very confident, Confidently stupid. That's a type of confidence. I was raising my babies.

I just, I didn't know. I didn't know what was making good choices. And I really think he has really good intentions. And he certainly can pay for all the debt that he's got. He, you know, he's got the money to, you know. Does he have money to save? He's got he you know he's got the money to um he's got a 401k he's got um a decent amount maybe a hundred thousand in there what about non-retirement savings um no i don't think no neither one of us have that except for his 401k and my 403b with a little bit that i have well you said you had 20k saved.

In the bank, yeah. Right. Does he have any just savings in the bank, like the same way you did? No, I don't think. If there is, there's not much. Okay, so let's just back this truck up. I'm going to paint an ideal picture for you. This is where we want you to get to because there's a lot of things that are just strewn all over the place here um you guys are not on the same page i think that goes without saying you're living your life one way he's living his life another way it sounds like in some ways you combine your money but in other ways you live completely separate lives if you don't know how much money he has saved you guys live separate lives and and honestly that's what it is if you don't know what somebody in your home is spending money on,

they're living a separate life from you. You need to sit down with them. And that's not okay. Sit down and say, your financial decisions affect me. I'm scared. I feel overwhelmed. I don't want to have any debt.

I want us to be on the same page and make all financial decisions together as a team. And right now we're living like roommates. And I don't know what's causing you to spend this way. When we make $220,000 and we feel like we're not making traction and we can't even save for our kid's college, this is not an okay picture. Have you sat down with him to say those things? Yeah.

What does he respond with? Doesn't go well for me. And, you know, and then sometimes takes that out on the kids. So I just try to be careful. Hold on. Is he abusive? No. What do you mean he takes it out on the kids?

Well, you know, it gets him upset. It gets riled up. And then he gets in a bad mood. Are we describing anger issues? Yeah. Does he yell? No. No, it's just... Sarah, we need to get counseling ASAP.

Frustration. I'm in it. I've been in it for over a year. Both of you. Him. Yep, he's in it. Okay. Yep, working on it.

All right. Keep working on it. You are doing a great job, but what you need to do is get on the same page and be involved in every little decision. There needs to be accountability. There needs to be vision. There needs to be goals, alignment. Because you guys have all the pieces. You make a great income.

You don't have any debt. We can clean up his debt fast. But it means he has to get his butt in gear and get on a plan together. I wish you the best, Sarah. This is The Ramsey Show. I'm George Campbell, joined by Jade Warshaw this hour. This is The Ramsey Show. Jade, I want to circle back to a call we just took from Sarah. And we dug into the numbers. They make great money. She has no debt. They're not on the same page. He's got

debt. He's got his money and is making financial decisions that affect their family. It's affecting her emotionally. And it kind of came out towards the end that they try to talk about it. He doesn't take it well and he gets angry. And we asked about abuse. Yeah. To which her answer. Look, if somebody says, is he being abusive? And you go, no, that that's a big red flag for me. Yeah. And when you mentioned the kids and look, I think it's worth noting.

And I wish Dr. John was here. Abuse doesn't have to be. He hauls off and hits me. Right. When you're in a situation and you feel like you're up against a brick wall and you feel like this person is controlling you manipulating you lording over you gaslighting you that is an unhealthy situation period not just financially period and at that point there was no amount of financial advice we would be able you know she called saying

my retirement's behind and the kid we got to save for the kids college that was the least of her problems at this point the that was not the root issue the root issue was she is in a very unhealthy relationship and she's not alone there's plenty of listeners out here who i'm sure when she called they felt that and they're like oh i know exactly i felt that not because of sam warsh, but I've seen that before and I know what that looks like. And so when she was talking about that, I was like, oh, I've seen this. And so I just want to make it clear that when you're in a situation like that, it's unhealthy and you have the right to remove yourself from those situations. You have the right to separate yourself from those situations because ultimately when she mentioned the kids,

that's not safe. It's not a good environment to be in. And I'm glad they're going to counseling. I hope they are going to counseling. And if you're in that situation, yes, start going to counseling, start getting involved with a local church. See if there's folks there.

Get in a community where people have healthy relationships and you can be surrounded by that. And hopefully it'll start to rub off a little bit more. Yeah, you gotta have a third party to intervene there. Get in a community where people have healthy relationships and you can be surrounded by that. And hopefully it'll start to rub off a little bit more. Yeah. You got to have a third party to intervene there and you need to remove yourself from that situation for your safety, for the kid's safety. And again, abuse can look like controlling, manipulative, bullying, gaslighting, making you think like you're the crazy one. And the key indicator to me that some of that's happening is when you rush to justify.

Yes. Well, no, no, no. They're a good they're a good dad, though. No, he has a good job. He provides for our family. Yeah. It's usually those kind of justifications that tell me there is something way deeper. There's some trauma happening there.

And let's not remember. Let's not forget the first part of the call. I mean, she was very stressed when you're they make too much money to be that stressed. So there's a lot, a lot going on. And Sarah, you're not alone. And we're not here judging you. We want to help you. And we want you to know that we want the best for you. And you're entitled to a healthy financial situation and a healthy relationship. Absolutely. All right, Jade, about a thousand people have sent me this on social media and we've got to cover it on today's show because it's big news and not in a good way. Let me read you

the first line from this Fox News article. A Biden administration rule is set to take effect that will force good credit homebuyers to pay more for their mortgages to subsidize loans to higher risk borrowers. This is wild. Yeah, it's is. So let's break this down. There's a lot of that was a lot of words. Yeah, go ahead. Here's what's happening. People that have been quote unquote responsible, you know, we don't love credit scores here, but people who have good credit scores who are putting 15 to 20% down doing the right thing are now being dinged and having to pay more for their mortgages in order to help those who have bad credit scores and nothing down no that's the summary no and this is not spin like we can go political all day because it is political but

from a financial perspective this is insane purely. My no is purely financial, by the way. So here's the details. Experts believe that borrowers with a credit score of about 680 would pay around 40 bucks more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency, which goes into effect May 1st. And by the way, if you're thinking, I'm going to sneak under that.

No, it's too late. You would have had to close two days ago to not get hit by this. It's already happening. It's just now official, official. $40 more per month. So if you have like, and we don't preach 30-year mortgages. That's 15 grand.

15 grand on top of your normal interest that you're paying over the course of your amortization schedule. Unbelievable. So the Federal Housing Finance Agency, they oversee the federally backed home mortgage companies like Fannie Mae, Freddie Mac, you've heard about them. And they're trying to give consumers more affordable housing options, which only remind you, the housing market's been struggling in the wake of all these multiple interest rate increases by the Fed. And under new rules, consumer with these lower credit

ratings with less money for a down payment would qualify for better mortgage terms than they otherwise would have. I don't like this, George. So we're awarding bad financial behavior to help broke people become broker. And then hurting the people who have gone, I've done everything the right way from the system, right? I've got the good credit score. I saved up my down payment. No, you pay more now to help cover the other guy. This is, this isn't, what I'm saying is not political, but there you go. It's your, in this, at this point, we're robbing from just normal middle-class folks who did the right thing. It's not even like robbing from the rich. We're just saying, hey, you've got what we need. We're just going to take a little of that when you're going to pay for this so that more people can. That's not right. When the people who have done everything right,

they're like, hey, I saved my 20%. Y'all know we don't care nothing about a credit score. But if you're like, I did everything right. I got my credit score up. And now here you are. And you're having to fit the bill for this. It's not right. Yes. And if you've seen the headlines, they're throwing percentages out there. These are not interest rate hikes. Let me make that very clear. This is something called LLPA, loan level pricing adjustment. And that's part of the picture that then trickles down to affect the interest rate. So that's what we're talking about here. And I'll give you some numbers. So a buyer with a 620 FICO score, for example, or under 640 with a down payment of 3% to 5%, which is basically nothing, they're going to see a 1.75% decrease from the old rate of 3.5 for that bracket. But if you've got a score of 720 to 759 and you've got 15 to 20% down, you get hit the hardest with a 0.75 increase from the old fee of 0.25. So if you look at the chart, it's a beautiful kind of heat map that's out there.

And that's what it shows. The numbers are very clear that those who are awarded the most are those with credit scores under 639 who have 3% to 5% down. Those who get hit the hardest are those who have that 720 to 760 who have 15% to 20%. And here's the interesting thing. If you've got way more than that down, you have no effect. And what's even more interesting, because I know the Ramsey fans out there, they're going, oh my gosh, I want to get it at home.

You don't have to worry if you follow our advice. Because guess what? This only affects loans greater than 15 years. And if you've been listening to the show for 15 seconds, you know that we only recommend 15-year fixed-rate conventional loans. That's it. So you can sleep at night if you're a Ramsey fan. I love that.

You can just sit back, be a spectator. But can I just say, I hate this because I'm sure the intent behind this is to level the playing field, you know, to reduce that gap of folks who feel like they're at a disadvantage to purchase a home or have the opportunity to purchase a home. But I'm like, everything, every playing field doesn't have to get leveled, George. Sometimes you just got to work for what you have. This is the participation trophy. It is.

And I get it. I'm not here to go, hey, if you're broke and you have a bad credit score, I never want you to be a homeowner. No, that's not it at all. I want you to be a homeowner. This isn't the way to do it. It's to squeeze the middle class. Because truthfully, the upper class, they're not dealing with this. Even if they do have mortgages, their financial situations, their credit scores, whatever it is, their amount they have to put down, they're not affected by it.

It's the middle class. It's those people who are, I'm trying to do everything by the book. I got my 15, 20%. And now you're paying 15 grand more over the course of that 30 year loan. I love this part at the end. It says, why was this done? The answer is simple. It was to try to narrow the gap in access to credit especially for minority home buyers who often have lower down payments and lower credit scores so let's just do what i'm gonna make somebody mad do what it takes to get a to pay off your debt to increase your income save your money so that you can get a higher down payment there's work to be done and stop acting like you can't do that work

and that you need to wait over here for somebody to do the work for you. Oh, you got Jade preaching. Here's the craziest part, Jade. This LLPA adjustment, it helps make the government more money. Oh, of course it does. What else is new?

So they're going, we're not going to increase your taxes. We're going to make our money another way by squeezing the middle class a little more. I would like to squeeze them. Listen, I can't say it any better than Jay just did. This is insane, and this is The Ramsey Show. Mm-hmm.

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That's right. And two more teachers will win a $3,000 vacation of their choosing. The giveaway ends April 30th. So don't wait. Get your name in the running today. Go to RamseySolutions.com slash teacher to enter and go tell all the teachers in your life, in your sphere to go enter. We'd love to see them win a $5,000 vacation. Ooh, that's not too shabby. I could use one of those.

Run tell that. Love it. All right. I'm George Campbell. She's Jade Warshaw. This is The Ramsey Show. Free call at 888-825-5225. Peter's in Tacoma, Washington. Peter, welcome to the show. Hello. Thanks for taking our call. Sure. What's going on? Well, we are debt-free.

We have been for several years. We live off Social Security and a small pension, and we've accumulated about $29,000 in a savings account. And I'm wondering what I should do with it to invest maybe three-quarters of it, maybe $15,000 to $20,000 in what? I don't know. I was actually thinking about silver and gold, but I'd like your advice. Now, this $29,000, is this your emergency fund? Is this all the cash you have, liquid? Yes. Okay. Well, I wouldn't go investing the emergency fund because if you have an emergency, you have to pull that money out and have it available to you without losing it.

Right. So what does a six-month emergency fund look like for you guys? How much money would that be to cover six months of living expenses? Well, our monthly expenses are about $2,300 a month. Okay, so let's call it $20,000 would be a good emergency fund. Our income is just under $4,000 a month. And you comfortably live off of that? Yes. Okay, good. So what if we call your emergency fund $20,000? Does that sound fair? Okay. That leaves you with $9,000 to do something with. Right.

And you want to invest it. We are able to add $500 to $1,000 a month, most months, to that savings. Wow, that's great. Very good. How old are you two? I'm 77. My wife is 67. Okay. So there's a few things you can do, and I'll start with saying I would not invest in precious metals.

Okay. Most people run to precious metals when there's fear in the economy, and it's really just a fear-based investment. They're saying, hey, if it all goes down, my gold is what's going to help me ride this out. And the truth is there's no data that shows that. The only data we have is that when there's fear in the economy, the price of gold goes up. But that doesn't mean that it's really worth anything if there was like an apocalyptic situation.

No one's going to go around trading gold. We're all going, who's got food, fuel, and water, right? Exactly. Yeah. And so I'd rather put it in something that, number one, is not fear-based and based off of people yelling at you on the TV to buy gold, right? That's where you hear this stuff. Okay. And number two, the S&P 500, which tracks the overall stock market, has a much higher return than gold.

Okay. And so if you look at the price of gold back in know, back in 1989, let's say you put a thousand bucks in, that would have got you two and a half ounces of gold. It'd be worth about 5,000 today. You'd say not bad, right? That sounds good. Well, if you put a thousand dollars into the stock market, into the S&P 500 in that same year, you would have about a little over three shares. That would be worth almost $14,000 today. Would you agree that's better than five? Oh, yeah. And so I'm going to go with whatever has the greatest track record,

and that's not based on fear. It's based on profitability of companies that we're all rooting for in mutual funds or index funds, which is just baskets of stocks. Okay. I know nothing about the stock market. Have you ever worked with a financial advisor? No. Okay. I know nothing about the stock market. Have you ever worked with a financial advisor? No.

Okay. Well, you guys, at your age and where your expenses are at, this money's not life-changing either way. We're talking $9,000. Yeah. And so if you want to keep it in your emergency fund, that's great. If you want to put it in something like a high-yield savings account, that can help it grow at 3% or 4%. That's fine too.

Again, these are not life-changing numbers for you. Okay. Is this money that you're hoping to grow and maybe leave as an inheritance, or is this, you're just wondering what to do with this money? Well, sort of, I'm getting to where I don't trust the government and the big banks, one of which where my money is, I think is sort of run by the government or overlooked very closely. And I don't know, with this last announcement you just made about mortgages, what's next on savings accounts? Not that mine's a big savings account by any means, but what are they going to do to us? I mean, I'm real skeptical with the government. What George said is right. You know, we don't want to make decisions based on fear. And yes, we just did a whole thing about mortgages. But at the end of the day, what we found is that people

who are managing their money, they're doing things the right way. They're able to stand back on the sidelines and watch this as a spectator because they've got their ducks in a row, they've handled their money wisely, and now they can go, wow, that's crazy. Glad I don't have to participate in that. And that's basically where you are right now.

You're into your retirement, you're living your life, you've got this money to the side and you've got choices and you've got options. And if I'm you, I'm sleeping just fine at night because none of those things are affecting your day-to-day life, right? You got up, you ate breakfast today, you had a great day with your wife, it's not affecting you and there's no reason to fear. It's amazing what happens if you just turn off the news and don't look at the headlines, how your life is just so much better, Peter. So much better.

Now, if you want to invest, you can get with one of our SmartVestor pros at ramseysolutions.com and they can help you fully fund an IRA for the year. That's simply a retirement account that's not connected to employer and you could max that out every year and it could grow in some good mutual funds over the long haul at 9, 10, 11%, even 12%, which is a good return.

That's a great idea. So that's one option. The other option, because it's not life-changing money right now, is you could just put it in a high-yield savings account. There's a lot of those online, and that can grow at 3% or 4% right now, which is good. But I'm not at the point where I distrust banks. I get it. We can have conversations about conspiracy theories all day long, Peter. But as far as your money disappearing overnight, we would have riots in the streets if the banks just took our money and ran. Oh, yeah. And as much as I distrust the government, I have faith in the American economy and the system, and I still believe this is the greatest country on earth.

And I know my money is safe in the bank account. Yeah. Thanks to the FDIC. Well, that's what I wanted to hear. I hope a young whippersnapper like me could give you some encouragement there, but you guys have done a really great job, and truthfully, the best financial move you can make, you've already done. Living your life debt-free, living on less than you make. Well, my wife gets all the credit for that. She's our CFO. That's a good, how long have you guys been married? 40 years. Wow. What do you attribute 40 years of marriage to? How do you do it? What's the secret? Love, God, and forgiveness. Amen. Amen. What an inspiration. I love it. That's a good call right there. There's a lot of fear right now, Jade. What he's talking about, I know he's, I mean,

that hits home for a lot of listeners right now. They're hearing the latest news and they're like, ah, and it's just like their face and their muscles are getting tighter by the second, you know, just listening to all this come out. But, you know, like you said, you got to turn the news off and you got to ask yourself, is this truly affecting me right now today in this moment? Probably not for most of us. And if it is, it could be and what could happen and what if all these fears are what ifs they're based on just jumbled thoughts of the future. And sometimes you just have to sit back and go, let me just take care of what's going on in my house with my money and my

situation and leave all that other stuff by the wayside. That's right. Get yourself some peace. Our friend, Dr. John Deloney says anxiety, it's a fire alarm. So let's look at the underlying symptom of that. Oh, we don't have an emergency fund. That's why we're freaked out. We haven't been doing a good job saving for retirement. When we start to focus on those things that we can control, we got money in the bank and we don't owe people anything. Yeah. It changes everything. Absolutely. I'm sleeping at night and turn off the news. That's always good advice. This is the Ramsey show. Our scripture of the day comes from Galatians 6, 9. And let us not grow weary of doing good, for in due season we will reap if we do not give up. Emeril Lagasse once said, life just doesn't hand you things.

You have to get out there and make things happen. That's the exciting part. Yes. Bam. He gets it. Bam. There it is. Emeril gets it.

All right. Well, hey, if you think you found your next home sweet home, before you make it official, be sure to steer clear of common first-time home buyer mistakes. Okay. This is a lot. We talked about home buying and mortgages this hour. You got to learn how to navigate home buying with ease and avoid the pitfalls when it comes to buying your dream home. And our team has a great resource for you in our newsletter coming out this Sunday. It's free to sign up. All you've got to do is go to ramseysolutions.com slash newsletter, subscribe, and you will learn how to avoid making these common home buyer

mistakes. Ah, good one. Love it. All right. Let's go to Liam in Tampa, Florida. Liam, welcome to the show. Thanks for having me on. Sure. What's going on? So I'm going to be graduating from college in December. And while I've been in college, I've been working two jobs and I've just been putting all my money in a savings account. What should I be doing with it to make it grow? Way to go. Very good. Okay. How much money are we talking? Right now I have about 3000 in the, and by the end of the year, probably another $6,000. So we're talking $9,000, let's say, by end of December. Yeah.

What do you want to do with this money? Like, what's the goal here? So after I graduate, I plan to live in my car and travel around the country for at least a year. Wow. What's your degree in? Entrepreneurship. Would you be working at all while on the road, or is the goal to have zero income? The goal is to work while I'm on the road.

Got it. So kind of the nomadic life. You're doing some kind of remote work. You say entrepreneurship. Are you starting a business? Are you going to be working for a business? What's the plan there? So, in my current employer, there might be an opportunity for a part-time remote role. So, I might transition into that until I decide what kind of business I want to get into. Okay. Have you kind of budgeted out? I think this is a great

idea. I think this sounds really fun and you're at the time of your life to do something like this. Have you kind of budgeted out how much money you're going to need to live off of while you do this for a year? So depending on how bare bones I do it, I could live on maybe a thousand dollars a month. Okay. And you already have the car that you're going to live in? Is this like a van, a camper? Yeah, it's an SUV. Okay. And you're going to kind of convert it? Mm-hmm.

Is that going to cost you money to do? I'm kind of deciding on how I want to outfit it, but I'm planning on basically just putting a bed and a cooler in the back and just going. Man, no shoes, no shirt, no problem. Just showering at the old Planet Fitness. Exactly. That's the move.

Well, I think with the money that you have now, if you can just place it in a high-yield savings account and just kind of take advantage of the fact that there's decent interest rates right now, and it doesn't make any sense to try to invest this or anything because you're graduating in December and you're going to need access to this money. You're going to be able to pull from it when you need it. So I think the plan right now is just to continue to save and really make a plan. I think at the end of the day, don't enter into this without making a plan for all of it.

You said right now, hey, I think it's going to cost me about $1,000 per month. I want to really drill that down and make sure that that's what it is. Look at your food. Look at the things that you want to do while you're on your trip. Maybe there's some excursions that you want to do. Maybe, you know, so really price that out because one thing about travel is it's easy for it to go get super expensive, super fast. If you're just traveling, gas alone is going to crush that budget.

I know an SUV to an outfitted one. So really, really do some deep research into that. And if that's the case, maybe you travel for six months, you know, but whatever you decide on, just make sure you have a plan and make sure you don't go into debt over it. So we're not using any credit cards, only cash. But truly your savings rate, your ability to save every month is a way bigger factor than how to make this money grow. Yeah. Because even the numbers we showed, if you put 9,000 in a high yield savings account today at 4%, that's 360 a year. That's 30 bucks a month.

That's not life-changing money. Yeah. So do not invest it though going, well, I could make more if I put it in the stock market. Yeah. And your balance could also be $5,000 instead of nine by the end of the year, depending on which way the stock market goes. So I would be very cautious with this money. Just park it. You need it soon. You don't have a long time horizon, but we're cheering you on Liam. That's an exciting adventure. It's not for me personally, because I'm very well groomed. And so hygiene is a big issue for me, but I love the, I'm like, man, what would that be like? Look, when people are like, I'm backpacking across Europe and I'm staying in hostels, I can't even talk.

My back hurts thinking about that. Oh, not my back. I've done it though. I did it in college. I did the backpacking Europe thing. And this was like before iPhones were like really great. And so we had to, we got paper maps. It was a whole situation.

Look, there's hotels here in the States that I won't be staying in. You won't catch me at some of these. We're too bougie now. I love it. I'm telling you, I just won't go. She's not doing it. You can't convince her. All right. Let's take a quick one here from Caprice in Lynchburg, Virginia. How you doing? Good. Thank you for having me. Absolutely. How can we help today? Yes, I currently am a single mom who unfortunately just due to light workload at work have taken a $4,000 pay cut from not getting overtime. And I was already living paycheck to paycheck. So I'm debating between getting a second job or going back to school. But I also am considering selling my house. I've owned it for about five years. I still owe about a hundred thousand left on it. And I'm just not sure if

staying is worth it. I found a one bedroom apartment for a couple hundred dollars less than my mortgage, which is very rare. Um, because normally mortgage around, I mean, rent around here is almost double my mortgage. So I'm just wondering if I should jump on this or not. What's your take-home pay? I'm bringing home right monthly. Oh, I didn't even do monthly. I think now I'm going to be down to like $2,800. $2,800 a month. And what's your mortgage? I believe so. Every month? $730. Can I ask a question? You said you took a 4k pay

cut. Is that per month? No, no, that's for the year. Okay. Okay. $400, $400 a month that I'm losing, not getting overtime. So before I started getting overtime, I was working a second job. I quit my second job because I was guaranteed this overtime and I And I've worked it until about the past month. Work has slowed down dramatically. And it doesn't seem to be picking back up. And we're all concerned that it's going to be a slow year or two. What kind of work is it? I have never gone to school. So I've just done different customer service jobs. I'm currently just at a desk working for a conveyor company doing manuals and stuff for their equipment. Is it salary?

It is not. It is hourly. Okay. I'm wondering if you can find a salaried customer service job, get a raise. But truthfully, I'm not selling the house. The house is not the problem. You're right on the money with about 25% of your take-home pay. And once you get your income back up, it's going to be even less than that. Yeah. So the house doesn't solve your problem. What else is going on in your expenses that's causing you to feel this way? Well, I have my daughter's daycare, which is also like a second mortgage.

Yes, it is. Yeah, her daycare is actually more than my mortgage. That doesn't shock me. And then, yeah. yeah her daycare is actually more than my mortgage um that doesn't shock me and then yeah and then so that's usually about half my income right there between house and daycare it's a little over and then i tied 10 percent yeah groceries were really really tight on groceries so we've got to get your income up yeah it's the income and i think that you can figure out how okay just start applying we'll

give you ken's book paycheck to purpose let's let's start there and see what other you know if you really love this field you know maybe it's just you applying for other jobs in the same field but if there's you mentioned going back to school i'm not sure that that's on the table just yet we've got to get your income because you got to be able to pay for school and right now things are so so tight let's try to get a job where you're making a good bit more um and then we can start talking about what it's going to look like to pay for school as you go and hopefully be on the track to where you really want to be uh both career-wise and financially but i think the 2800 is kind of with the daycare. George. That's crushing you. Yeah, that daycare is no joke.

I'm telling you. One more year. One more year. You got this. You can do it. We're cheering you on, Caprice. Single moms, man. They're crushing the game.

Oh, man. They are super human. Absolutely. What they can do. I don't know how they do it. Sheesh. Well, good hour, Jade. Thanks for being my co-host.

You were forced to, but I hope it was enjoyable for you as well. I loved it. And thanks to all the guys in the booth. They're keeping the show afloat for you, America, which is why we're here. It's your show. We thank you so much for listening. We'll be back real soon. Hey, it's George Camel.

If you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click Get Started.