The Ramsey Show - App - To Get Different Results You Must Do Different Things

Episode Date: September 5, 2024

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Rachel Cruz hosting this hour with bestselling author and my good friend, Jade Warshaw. And we'll be answering your questions. So give us a call at 888-825-5225. And we'll be talking about your life, your money, your relationships, your work, anything and everything. So give us a call. We're starting off in Tampa, Florida With Jasmine

Hey Jasmine, welcome to the show Jasmine, are you there? And There she is Hi Jasmine Yeah, absolutely How can we help? So I've been watching for about three days

Now and just kind of learned a whole lot, like a whole mind life changer. And I'm just trying to figure out how to approach, I guess, what you know, what you guys are saying is the best thing for us to do and how to pay off our debt. Because we did have a situation recently where both of our cars broke. And so we did have to situation recently where both of our cars broke and so we did have to get into a different vehicle it was within like two weeks apart and they both both the motors went out oh man so yeah so this was it was bad yeah i was on the side of the road about three times because we we tried to kind of save it and so i had to use roadside assistance things like that but um one of the cars we sent back and the other one

we traded in. And so unfortunately, we do have a note now in the state that I live in, they don't allow you to like change your mind because we were thinking about sending it back, but they said we're not allowed to. What do you trade up to? It's a Ford Expedition 2020. 2020 okay what what what do you owe on it 41,526 wait a second you traded you traded all the way up okay i know um i know i know if you were to sell it because i mean this is still pretty fresh um and thankfully you got a used vehicle so somebody else took the biggest hit if you were to sell it tomorrow do you think you could get could get the 41 000 back

private no idea okay i think that you get it from a dealership yes ma'am yeah yeah yeah because yeah usually you'll get a better deal from a private seller so yeah so there's a good a good chance there so jasmine how much um Number one Thanks for being a new listener Yeah In three days So that You're already Your mind's churning

Which I love So give us your overall Just kind of financial picture How much debt Do you guys have In total So it's my husband and I And we do have

In total $123,865 I've been totaling This up since I've been listening to y'all for the past few days. I've been going crazy, like writing everything down from least to greatest. But I do have student loans and these student loans are mine. They're not my husband's, they're mine. It's $63,508. I did just graduate nursing school in July. Okay. So I'm about to take my board. And the 63 is part of the 123, correct? Yeah.

Okay, so what's the remaining 60? What's the remaining 60? The $41,526 for the truck. And then we have like other debt of $18,831. What is that, credit cards? Credit cards, old energy bill or electricity from like back in the day. We've been together for 13 years. So you've got some stuff in default?

Yeah. Collections? Yeah. Okay. Are you prioritizing the collections stuff at all? I don't know. That's why I'm calling. I don't really know what to do.

I know that that snowball was supposed to go from least to greatest, but I didn't know if I'm supposed to just keep going with that or if I should. Because my student loans right now, they're in deferment because I just finished school. I'm not supposed to start paying until like December, January type. Well, I do want you current on things that need to be current on. Things like electricity, if you're not current on your phone bills, anything like that that you're not current on that's part of your monthly flow. I don't want you not to be current.

So the first thing would be let's get current on that. Then we're working through this debt snowball. That way it's not getting worse and worse for your month-to-month stuff yeah and the collection aspect jasmine energy bill is an old energy bill it's from like 10 years ago all of our current bills are current we're actually like the head of our current bills we're a on top of that it's everything is current we got money in our emergency fund and everything but i just don't know how to What's in the emergency fund? Our emergency fund right now $1,700 like $1,800

$3 $1,803, but I know we're only supposed to have $1,000, so I was going to take the rest of it and put somewhere else. I just don't know What I would do, what's in collections? How much is it? $18,830 That's all in collections. Oh, $18,000 what's in collections? How much is it? $18,830. That's all in collections. Oh, $18,000 is all in collections.

Yeah, it's like a gang of old bills. So Jasmine, yeah. So what we found when this happens, you actually probably can negotiate a lot with this considering how old these bills are because they've probably been sold to collection companies. I mean, it's probably on the fourth person now that that has these bills because they just keep selling them um so what i would do is and they're all going to be different ones right so maybe what

four or five different types of debt within that 18 000 yeah you've got the energy bill what are the other credit cards it's 11 different ones 11 okay so i would be which is going to take it's going to be your part-time job here for the next two weeks jasmine is i would contact all of those collection companies and just say and get it in writing if you can but sometimes i mean honestly i mean sometimes pennies to the dollar yeah you know that they will actually settle with you so that would be my first step just to say hey these are old um i don't have any money i have eighteen hundred dollars to mine or i won't even tell them that but like i don't have any money um and what what can i do to get these settled

because i'm ready to get these out and just see from a and they're going to hear you as motivated which is good and see if you can talk them down because you really might be able to um and you've got eight hundred dollars cash that they don't have to know that but say one of them is for four And see if you can talk them down because you really might be able to. You've got $800 cash. They don't have to know that, but say one of them is for $400. Say, can I sell all this today for $150? I bet they will. I'll give you cash. Get it in writing.

Yeah, just get everything in writing in that, Jasmine. And how much are you guys making a year, you and your husband combined? So I just finished nursing school. So I start working on the 23rd um right now so i make nothing but he makes um somewhere between 90 and 100k okay and how much will you i'm projected to make about 70 oh great excellent okay you guys will be good so honestly jasmine i mean yeah if i were you i always like to play like a theoretical game Let's just pretend you guys got rid of the car, right? You sold it.

Maybe make $3,000 on it since it came from a dealership. Who knows, right? You actually could get more. We'll see. I would do that. I would save up ASAP and get a couple thousand dollars to replace that car. I would do that first. And then you look at your debt, and that's $81,000 left

if you get rid of that $41,000. And then let's pretend that that, you know, some of that debt, the $18,000, what if you got it down to $10,000 and half maybe? Yeah. So that's $71,000. And you guys could pay this off in 18 months. Like if you guys throw your entire salary at this debt and some of his and live on a really tight budget, I mean, Jasmine, you guys could have a completely different financial picture in 18 months. It's not even my debt and my heart started beating fast. I got excited for you, Jasmine. So, hey, hold on the line, Jasmine, and Christian's going to pick up and we're going to give you Financial Peace University. This is our nine lesson course that's going to walk through everything from the debt snowball, building a budget, to marriage and money, even talking about you and your husband working together, to insurance,

mortgages, everything you need to know from a basic love about money. That is our course. You guys sit down, go through that together, and then every dollar, the premium version that connects to your bank accounts, we're going to give that to you as well. We're excited for you. Thanks for the call. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family?

They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it, and one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money

properly and not mess this up, or she's concerned how she's going to eat tomorrow. These are the two options. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. So one thing that is approaching quickly, Jade, is the Live Like No One Else cruise. We have 85% of the cabins booked, and you guys don't want to miss it. We're going to Turks and Caicos. We're going to St. Thomas, Puerto Rico, the Bahamas.

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And it's coming up fast. So you do not want to miss this incredible vacation you go to ramseysolutions.com slash cruise or you can click the link in the description if you are watching on YouTube or listening on podcast love it up next we have Shannon in Pensacola Florida hey Shannon welcome to the show how are y'all we are doing well thanks for calling how can we help? Well, I just have a random question because I've been getting a shot on a home here in Pensacola. That's my only debt.

And I have a current interest rate at 7.49. And I've been getting, you know, I just feel like there's just so much fraud going on. And I don't know how y'all feel about that. What kind of fraud? What do you mean? Well, I just mean like on so many different levels. So I had a kid called me today who said, oh, well, we can give you, you have an FHA loan. So we can give you a five point, I don't know what he said,

four two and oh, no money down. I go, wait a minute. I'm a business development person. So I'm like, well, what's in it for you guys? So he wanted you to refinance and he's going to get the fees associated with that. He wanted me to refinance, but I'm like, wait a minute. How does this work out? Because I keep in touch with my current mortgage broker that I use to buy the home. I keep in touch with her and I say, hey, what are they at? Because I got a letter from FHA who said, hey, we can go down to 5.25 to 5.2%. And I just wanted to know y'all's thoughts on that. And I just feel like, I'm like, okay. I mean, you're right.

I need to wait. And I know this election, there's just so much. All right. All right. Do it again. Let's roll it on home. All right. All right. Do it again. Let's roll it on home. All right. Here's the thing.

Yeah. Yes. I think that we are starting to be at a turning point when we're going to see. I mean, we already have seen mortgage interest rates go down. And I think they're going down again this month. That's what the Fed is saying. They should. Yeah.

And we might even see it before they release, you know um report or in their uh report of the interest rates whatever but my point is you get to decide right if you don't want to refinance you don't have to refinance and if there's an offer you want my mortgage to go down y'all okay well if there's an offer that presents itself to you and you're interested in it i i just you started out the conversation start talking about scams and then we kind of went to the election then we kind of went to interest rates and i want to kind of clear it out being able to refinance your house at a lower interest rate it's not a scam unless you do your due diligence and find okay this is not reasonable scammer for it yeah some random guy that calls you, I probably wouldn't use him.

Well, I just think the guy that called me, I'm just making a point, is that he's like, oh, it doesn't cost you anything. And I'm like, hmm, wait a minute. That's kind of where I'm coming down. So yeah, they're probably, to your point, anything that comes up that is exciting right now, we find this always in the financial industry, there's always going to be people prying on that right so whether it's mortgage you know mortgage rates are dropping so people are going to clamor to refinance and there may be scammers out of that

crypto became a big thing scammers flock to that they will flock to try to get people's money so that's where your discernment shannon comes in that if you choose and probably will and anyone listening refinancing you know if you're, and probably will, and anyone listening, refinancing, you know, if you're going to be in the house long term, it's a great option. And so maybe you wait another six months to see, you know, after the election to see if it keeps dropping. And then maybe, Shannon, you decide to do that. Then I would use a reputable broker, whether you have one. Churchill Mortgage is one that we recommend here at Ramsey.

I'm from Oklahoma. She's from Oklahoma. And I'm a truster. Yeah great that's great yeah yeah so doing doing it reputably so yeah i think um for sure that it would be um i think it's a great option and people will be doing that more and more and i think you had great advice there rachel if you're looking at rates and you're seeing them go down i wouldn't like jump to refinance instantly. I'd like let it happen. Let them roll back because they're probably not going to jump right back up. Right. We've we have finally gotten to the point where it's like, OK, inflation is at this point. Unemployment's at this point. It has to happen. So I'm with you. I'd probably wait until after

the election, let the chips fall where they do, and then you can make the wisest decision. For sure. All right. Up up next we got mike in dayton ohio hi mike welcome to the show hello how are you we're doing great how can we help um okay i'm 42 years old and i made some bad financial decisions in my life um regarding 401k and stuff like that okay got divorced ex-wife took half the 401k and I've cashed in a few times. And I'm basically starting over at 42. I have like 21,000 in my 401k now. And I'm only putting in like 6% because we're on baby step number two. And I was going to see, is it too late? No, not at all. Not at all. Not by a long shot long shot no um and if anything this will probably scare you

more mike i would advise you to even pause that six percent while you're getting out of debt because here's the deal when you free up so much of your payments you're able to throw then 15 percent of your income at retirement and be able to catch up. So how much debt do you guys have? The house, we got like $83,000 on, and the truck we're trying to get paid off. We should have paid off by the end of this year. How much is it? I got like 10, almost $11,000 left in a minute.

Okay. And we're down to like $3,000. You keep saying we. Who's we? Me and my wife. I thought you were, we i know you're a divorce you're i thought you were okay so you got divorced you remarried yeah my ex-wife took half a 401k i got remarried okay perfect okay perfect so 11 000 on the truck a lot better yeah that's great okay so 11 000 on the truck what else do you guys have? Just a mortgage. Okay, so the $11,000. Okay.

Yeah, so the mortgage goes, obviously, in baby step six. So we're not worried about that right now. So yeah, I would get this $11,000. How much do you guys make combined income? I make $37.84 an hour, and she makes about $30. Okay. What's that amount to every month? Do what now? What's that amount to every month? Do what now?

What's that amount to every month? What do you see monthly on your budget? Oh, around $5,000 $6,000 a month. Just for me. Just for you? Yes. And then what does she bring in a month?

It's close to $5,000. Okay. That's great. So you guys are making $120,000 a year? month? It's close to $5,000. Okay, that's great. So you guys are making $120,000 a year? Yeah, close to. Okay. Yeah, I would pause that 6%, Mike, honestly, until this truck's paid off, and then you guys get a fully funded emergency fund, and then press play. And then you got 15%.

Jade's got her fancy calculator out, so we're going to be – are you able to – Yeah, I got it in there. So you were worried earlier. You're like, to? Yeah, I got it in there. Say, so you were worried earlier. You're like, I'm 42. I've made these mistakes. And here's the thing. This is just the picture you painted today.

Let's pretend you clear out this car. You clear out the step pretty quickly. And you said you make around 120,000 a year. You know, if you're putting around 15% into investments, that's about $1,500 a month. Let's say you do that from the time you're 42 to the time you're 65. And I'm just using the Ramsey Solutions investment calculator. You already had $21,000 in there, which is great. So if every month you contribute $1,500 at a 10% rate of return, which is average, contrary to popular belief, I mean, that's almost $2 million. It's

$1.8 million. And that's a big deal. That's plenty. And that's on the current income you have, Mike. That's right. That's not you getting raises and your wife changing jobs. I mean, it will continue. Usually for most people, their income continues to go up in their lifetime. So $2 million, Mike, you're on track. Don't you worry. But hey, it's a good little like, you know, we talk about how fear can be a gift. There's a great book called Fear is a Gift

and there's a gift of fear and there is, there is a beauty in it because it kind of does shake you up a little bit. Oh my gosh, am I late? And then you're able to say,

okay, what changes do we need to make for this not to be a reality? So you're doing great, Mike. I appreciate you calling and good luck to you and your wife because yeah,

you guys are on track. This is The Ramsey Show. There's a time in your life and the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of

your monthly budget. Plus, when your home is paid off, that was your largest expense. Now, it's extra money in your pocket and an asset towards turning you into a Baby Steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. RentWin, Tennessee 37027. Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour with Jade Warshaw and answering your questions. So give us a call at 888-825-5225. We are going to Cameron in Atlanta. Hey, Cameron, welcome to the

show. Hey, how's it going? Doing great. How can we help? Yeah, I'm contemplating bankruptcy and I wanted to call you guys and see if that's something that you guys would recommend. Oh, gosh, Cameron. What's going on? Well, I stopped paying my credit cards probably about seven to eight months ago. And when I stopped paying, I was at approximately $85,000 in credit card debt. What caused you to stop paying? So I started a business about three years ago and we just had a hard year. And I'm on and off working with my brother-in-law who

owns his own business as well. So when I get slow, I call him, work for him if he has the work. But it was just a very slow year last year and so we kind of had to live off credit cards is there other debt or just the 85 000 i have a mortgage but no car or anything else like that okay and was this 85 000 for business expenses that you're trying to keep afloat when you were slow or was this was this lifestyle that you were trying to keep afloat when you were slow, or was this lifestyle that this was all personal? I'd say probably $20,000 to $30,000 of it was business, and the rest was just paying bills and any cash that I came in. Mortgage doesn't take a credit card.

Yeah, you had to get a mortgage. Are you married? I had a mortgage and then, yes, I am. Kids? Two kids. Two kids, okay. How are you married mortgage and then yes ma'am kids two kids two kids okay how are you and your wife how's she doing uh good I mean we're doing as good as we can what's she bringing in what's her income uh she's a stay-at-home mom okay and what are you currently bringing in? My last year, the adjusted gross income was $35,000.

But that was the year that, you know, we really had to kind of make things tight. Cameron, does your wife know everything going on? Yeah. Yeah. That you're going to be filing, like that y'all were talking about bankruptcy? Yeah. Yeah. Yeah. The debts in both are, or some y'all were talking about bankruptcy? Yeah, yeah, yeah. The debts in both are, or some of the debts in her name, some's in my name, and we're both on the same page. Okay. So here's my take on this.

I have one more question. I want to know how old are the kids? Four years old and two years old. Okay. And I also want to know what were you making? What was a good year for you? Probably be the year before. I think business made about $200,000.

I made about half of that. So you took home, you pocketed $100,000 as your own paycheck? Approximately. I'd have to pull up my paperwork but yeah between 80 and 100 000 probably a good year for me okay so i think the problem is um there's there's several problems here but there's been an inconsistency in pay and it's been on the lower end for a really long time and you did have a really bad year but i don don't think that was, I think that just was the final nail in the coffin, so to speak. What's happened here is you guys, whether you realize it or not, you're making a series of choices.

The longer that you go with this lower income and that you go where your wife says, hey, I'm staying at home. Because again, staying at home is a choice that you afford to make or don't afford to make, if that makes sense. And right now, you guys both have to be working. You've got to get a higher income. She's got to get some sort of income. That's the only way this works, because even if you file for bankruptcy, you're going to find yourself right back in the same situation again. And it's going to be that much more frustrating so the root of the problem has to change what do you what do you do by trade what's your specialty uh so by trade uh when i work for my brother-in-law uh commercial electrician uh i currently work for myself building decks

part of this outdoor wooden structures okay so i think that obviously you know how to make money doing that, but right now that feels like an amazing side hustle while you do something full time. Which I have this year, I have gone full time with my brother-in-law. Okay. And what are you making from that? Okay. 33 an hour. So I think that's roughly $63,000 a year or something like that. Okay. That's great. Okay. So at this point, it's all about figuring out how to pay off this debt, right? Their credit cards. How many separate credit cards are there? I would say, I mean, I have them here. I can count 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17. Okay.

So if you were to file for bankruptcy, basically what they're going to do is a lot of what we're doing right now. They're going to analyze your income. They're going to analyze how much debt you have, what assets you could sell off in order to pay it. And that's basically what we're going to do. Only you're going to have control in the process. It's not just the government reaching in and doing it all for you. Yeah, because what's going to happen, Cameron, you know, the bankruptcy route, even though it stays on your report, it follows you for a decade, right? I mean, like it is the long term play here is it sounds easy just to wipe it clean and start over and I'm afraid Cameron the way you're

speaking about this is that that's where you're leaning because that's the easy button is what it feels like and what you have to realize about money is that money it is it is behavior change because to Jade's point if you do this and you guys go back to i mean you charge 55 000 for your lifestyle on credit cards instead of saying oh crap i need to probably i gotta go up my income and we can't keep doing this and so by just quote unquote the easy button which it's not easy i mean it is bankruptcy is traumatic i mean it's terrible um no i completely agree with you. Okay. Not to cut you off, I apologize. No, no, no, I want you to because I am a little worried. I mean, there is a part of me where I'm like, how's your wife?

You said she's good. I'd be like, Cameron, I would be... Well, I'm good. I mean, like, she's, you know, obviously worried about the situation as well. But she knows what's going on. Okay, I know. I just, I want the, yeah, the urgency of... Since we've stopped paying our credit cards,

we've just been cash only. And I've made that a point to her as well. There's just, you know, we have one other credit card that's still open and we haven't touched it. Yeah, you got to cut that off. So you've closed, have you closed all those accounts? The one that we have,

I only use it when I run work because i have to buy material to build decks and stuff i buy i buy the material i get paid i pay it off that's the only credit card i use now but i'm trying to get to a cash only that's the only time i ever use it because that makes me my cash so what are y'all doing with okay so so so when we get off the call camera get out a pair of scissors and cut up all 19 credit cards. Get rid of them so they're not even there. Oh, the other ones are gone. But that's the only one we have. Right.

I wouldn't even keep that, though, because to Rachel's point, this is a behavior thing. This is if I don't have the money to do it, I put it on a credit card. And that goes for personal. That goes for groceries. That goes for business. And what happens is, and I'm speaking speaking from experience when you cut off that you know that supply quote-unquote lifeline that lifeline yeah when you cut that off it it rises up a creativity inside of you to get stuff done gsd that's what we call it and that's what happens

you go okay i gotta do this what do i have to do and suddenly you notice your lawnmower and you go oh that could make me some money and suddenly you notice your lawnmower and you go, oh, that could make me some money. And suddenly, you know, your wife notices the oven and she goes, oh, that can make me some money. And you start looking at other things that can give you money. That's actually your money that you don't have to repay. And that's so powerful. And right now that credit card, it's a crutch and it's keeping you financially weak is what

it's doing. So for the jobs, have them fund the money beforehand, right? It just, it changes the whole perspective. So, so yeah. So Cameron, you are not, as we finish up this call, I would, you are not bankrupt. No. I would list out all of those debts, those credit card debts, smallest to largest. You are behind on them. So they've probably at this point gone into collections. Some of them may have so i would contact them and just say hey we don't have any money to to pay this but will you settle with us and if you do that get in writing and then and it's going to take you guys i mean yeah you're making 63 with hopefully some side hustle you can get that up to maybe 80 mama's got to work too and she does she like

anything that she can do in the evenings, she can do things remotely, virtually. And she's probably going to hate it, Cameron. She may not want to. But for you guys to get out of this ASAP, something has to change. If you keep doing what you've been doing, you're going to keep getting what you've been getting. So I'm thankful that you guys are on a cash system now. That's a great habit to get in. But I would grind it out.

And it's going to take you guys three to four years, but you can do it. You can do it. We see it all the time. So we're rooting for you guys, Cameron. Thanks for the call. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're non-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place.

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We're going to go to Mark in Chicago. Hey, Mark, welcome to the show. Hey, thanks for taking my call. Absolutely. How can we help? Well, I've been doing a bunch of research on investment accounts and what I have available. And I made a change in my investment strategy that feels very unorthodox. And I was looking to get your guys' opinion on it. My employer offers profit sharing. So typically the order of operation would be to invest in the

401k up until the employer match, but they do profit sharing and it's not dependent on my contribution. So I recently just pulled back almost all of my 401k contributions. And we also have an HSA and I've been putting the contributions into that. So looking into it, the HSA seems to be a, what they call a triple tax advantage account. Yeah. So the math shows that this would be the correct route, but it seems like such a big shift. And over the span of 20 to 30 years, it seems like it could have huge impacts either for good or bad. So I just want to get your guys' opinion on that.

Yeah. What's the current match that your employer has or the contribution that you don't? How much is it? 15%. Nice. Wow. So they're giving you 15% without a match. Is that what you're saying? Correct. Yeah. No, it's not guaranteed every year, but I've been with the company for about three years and I've talked to people who have been there for 10. And since for that whole 10 years it's been 15 every year sheesh that's awesome pretty great okay and then the profit sharing how does that shake out is it a monthly thing how do they distribute um once a year once a year lump sum yeah okay and why can't that just be a great bonus and part of your income? You're not viewing it as a supplement to your income?

I'm viewing it as a supplement to my retirement. Well, yeah, a combination of my retirement with the 401k and the HSA if I were to invest. But they're not investing it for you. You're seeing it reflected into your paycheck, right? No, they're investing it into my 401k. Got it. Interesting. The entire amount. Correct. And then so I basically shifted my contributions to the 401k to the HSA, which I can invest the funds in there without any taxes being taken out. So again, I just want to clarify this. So you've got the profit sharing that is equivalent to however many thousands of dollars a month that they're investing for you and you get a 15% match.

Is that right? No, I'm sorry. It's only the 15% contribution. Or the profit sharing is the 15%. Correct. They do not match anything that I contribute. Okay. They just give the 15% contribution.

Then I probably wouldn't do your strategy. I would consider that 15% a match in the words that you used, and I would invest my own 15% because it sounds like this is something that happens consistently, but not necessarily all the time. Do you have a Roth IRA, Mark? I do, but I haven't been contributing to it. I have $8,000 in that. Okay. Yeah, because there's something powerful about having control over those investments and something like a Roth IRA.

And the HSA, it is a great, my husband and I, we do this. We'll max out what we can every year. And the HSA is it is a great, I mean, my husband and I, we do this. We, you know, we'll max out what we can every year. And the HSA is another great vehicle to do it. So, but I, cause he's probably, you're probably maxing out your 401k with their 15% contribution, plus maybe whatever, a couple of percentages on your end, right? So right now I'm contributing four percent to my 401k they're contributing 15 of my salary uh-huh and are you maxing it out 12 into the hsa okay but are you maxing out the 401k every year no you're not okay so you could it's a great match you could

max that out but i'm with rachel i would then go to a roth ira and max that out before i went to an hsa okay um you're gonna have the whole you're gonna have the whole market open to you in a roth ira right but if i invest the funds in the hsa as well wouldn't that be equivalent to no a lot of ira or similar? Not necessarily. I mean, you have to wait, number one, until I think you're age 65 for those funds to be available to you. Versus 59 and a half. Yeah, versus 59 and a half. So it's a longer tail on that. But also, I think that, again, you're going to have the entire market open to you in a Roth IRA, which is what I'd be looking for.

Yeah, that's just what I would do. Yeah, and I think for anyone listening, that 15% mark, which once you're out of debt and you have that fully funded emergency fund, we say to go use the employer's match because that's free money. But in his case, you're getting that regardless of whether you're putting money in or not. But you want to go up to the match, use the Roth IRA, max it out. If you have money left, you can go back to your 401k, max it out.

And then above that, then looking into other investment options, because those are two retirement type sheltered accounts. And so prioritizing those for retirement specifically. And then other investments, strategies that you can do. I mean, you can do HSA. You can do paid-for-real estate. You can do even index funds, right, if you want a Vanguard-type account, right?

So there's other options for investing out there, but just looking at those retirement buckets first and foremost is key, but I would also sit down with a smart investor pro in your area and get some of that because from the tax perspective, I would want to see the numbers being laid out. I agree. Because it is a little bit of a unique situation with your employer. I mean, that's crazy. Yeah. Contributing 15% into the 401k without you even having a match or you putting in a portion of yours. So it may be good to run some of those numbers long term

because I would want the most tax benefit for you. But the Roth is a great tax benefit because even though it's after tax in your income, it is going to grow tax free. All right. Up next, we have Sam in Bismarck, North Dakota. Hey, Sam. Welcome to the show. Hey, how are you all doing today? Doing great. How can we help? So I am in a pickle. I got in a car wreck monday night oh i'm sorry are you okay i'm fine everybody's fine i was not at fault thankfully um i got my insurance i got all the insurance information i had an adjuster come out and look at my pickup this morning and he told me that it

is totaled. So I got off the phone a couple hours ago with their insurance and they made me an offer for what my pickup's worth, which is $10,400 and some change. So I got a rental car this morning. Their insurance is covering that. They told me if I take the settlement, the $10,000, then I'll have the rental car for five days before I need to turn it in. So I'm kind of, I don't know what to do because I have to leave for work in a week, which is... What was your pickup worth? If you hadn't gotten in the accident, if you Kelly Blue Booked your truck, what was it worth?

$10,400. Okay. So why don't you go buy a truck today or tomorrow? Yeah. For $10,000. I don't know if I should do that. What do you think you should do? I don't know if i should do that what do you think you should do why why uh because this has all happened quickly well here's the thing i'm gonna make a mistake no that's not a mistake you're i think yeah your your car before it was totaled was worth 10.4. So it's a fair offer. They're giving you exactly what it was worth.

And so you're not, you're getting the car the same value. You're getting, you're going to be able to take that money and get the same value of vehicle. You might be thinking of it as, well, when I got my truck, it was worth, you know, 25,000, but it's depreciated. So you're not going gonna go in and be getting a brand new vehicle you're gonna be getting something worth ten thousand four hundred dollars which is truly comparable to the truck you had yeah and i'd do that yeah and if and if this is

overwhelming you sam to make a quick decision you're saying you have to go out of town how long will you be gone um for for work two weeks okay so why don't you just turn in the rental car go to work for two weeks Start shopping online calling some private sale You know people that have A truck on sale and then When you get back Then maybe you don't have a car for a few days

Or rent a car for a few days for 35 bucks Or whatever you know And then make sure it's inspected Like do your due diligence Sure when you're buying it And you could spend less if you wanted to You still may have been shaken up Make sure it's inspected. Do your due diligence, sure, when you're buying it. You could spend less if you wanted to. You still may have been shaken up.

We're talking to you three days after you've been in a wreck that a car's been totaled. So that's no joke. So maybe you just take your time. But I wouldn't be so paralyzed by it. You can make a quick decision in this, and I think you're going to be okay. Just don't go get a car payment. Use that $10,000. Thanks for the call.

Thanks to everyone in the booth. Thank you, Jade. Thank you, America. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with bestselling author and my good friend, Jade Warshaw. And we are taking your calls. So give us a call at 888-825-5225. And we'll talk about your life, your money, relationships, your work, anything and everything.

So give us a call. Up first, we have Michael in Cincinnati giving us a call. Hey, Michael, how can we help? Hey, how are you guys? We're doing great. How are you? Well, it's been a heck of a day, to say the least. Oh, no.

I actually just got, well, it's the first time I've ever been fired today. You got fired today? Yeah, like literally an hour ago. What? And you guys are the first people I wanted to talk to. Oh, gosh. My wife and my daughter. I was going to say, have you told your wife yet? Yeah.

Yeah, no. Oh, no, what happened, Michael? What's going on? Well, I'm in sales. I've been in sales my entire career. And, you know, I've talked to a lot of leadership and before, and they said it's bound to happen once. And this is actually the first time I've never excelled in a sales role. So that was, that was very interesting for me and very difficult for me to, you know, swallow some pride and deal with some humble pie there.

But, you know, one door closes, another one's bound to open is my outlook. And so right now, just to give you the situation of my life, my wife and I just moved into a house, our house, and it's kind of a kind of co-ownership with my parents. So technically we're renting which is really nice it's really affordable what does that mean and whose name is on the on the deed you know whose name is on the mortgage it's theirs it's their name but we're paying for everything right like we that we just needed some help to get into a house faster because my wife is well she's going to give birth here in the next couple weeks and with their ability to put a more sizable down payment um that would be able to that would allow

us to escalate um the closing so they put down the down payment the mortgage is theirs but you guys pay the note yeah will it ever be transferred into your name is the is the goal of this to eventually you guys owning the house yeah yeah i mean it could be that that's you know future discussions down the line but it's really just to uh escalate the closing so it's your parents house and you're renting it because you couldn't afford it and they're renting it to you at cost yeah i mean we had money for a down payment it was really just so that they could escalate the closing from you know 30 days standard to like a week or two weeks so did you put money down as well no they allowed us to actually keep some money so yeah it's everything's in their name but i mean okay so it's just a rental house

yeah we treat the houses our own right we pay for everything yeah that's what I'm a little bit okay so that's gosh so yeah that's what I'm a little bit concerned I am a little bit concerned about because whenever you do a deal with family which we usually don't recommend everything needs to be laid out and so the fact that the future of the situation has not been talked about because Michael what I don't want is you guys in this house for five years something happens with them and so i don't know whatever and then you could have been building equity in your own home that you could afford right so but i think that's a separate let's pause let's pause that because i think that we also have our own rental our own house that wait say that again you were breaking up my wife and, we actually have another home that was our rental property,

but it's currently rented out. They signed a three-year lease, actually. So you own a rental property as well? Yes. Okay. Yes. But what's really going on is we were trying to pay off for debt. We had about $75,000 between student loans, car notes, and that type of thing. But we have a one-year-old, we have a baby who's going to come really in the next couple of weeks. So being the only income, the person who provides income based on my

situation, I will be paid for about the next two months. I will have insurance for the next two months. Okay, good. I have, well, I should say we have about $45,000 in cash sitting with one of my brokers. I have about $4,000 in cash and just disposable physical cash in one of my states. I have about $3,000 in silver and a couple thousand in just like the immediate emergency fund. Like $2,000 or like $8,000? No, $2,000. Okay. Sorry. And right now I'm just trying to understand.

Oh, I also have a Jeep. Are those paid off that I'm going to sell? What's it worth? About $14,000. Okay, good. So Michael, I mean, I could give you my timeline ASAP. Yeah, easy. I would 100% be looking for another job today, even though you're getting severance. So once you get a full-time job, then I would press play on the baby steps. We do say that that snowball can go on pause if you guys are pregnant, which you are. So that is a reason to pause. And if a big life change happens if you're gonna be

moving soon if there's a job change i mean all of it you know you can pause for a season so that's exactly where you guys are i would pause until baby comes until you have a new job which again michael i would say a new job this isn't you calling us in 12 months saying i'm still looking for a job this is you finding a job in the next 60 days take any job until you get the job and then i would be cashing out the silver you have that emergency fund you had the 45 000 that's 50 000 that can be thrown at the 75 000 and then you had 14 000 from the jeep so you guys are debt free i mean yeah you're done yeah the 4 000 cash too yep so that's so that's you're done there you can use that four thousand as your starter emergency fund the fully funded emergency fund um and then i would just i would just keep rocking and rolling and then the next question for me would be the house and i would sit down

with your parents or your in-laws um whichever set of parents that was and i would have a very clear kind but very clear written down idea of what this next step is going to be. Because in your rental house, I'm curious, do you guys have a clause that if you sell that the renter, I mean, do you have anything in your lease that gives you the ability to sell the rental house? I have a property management company. He did everything because he bought the house.

Do you know what's in the lease? I have to take a look. Okay, because if there's a clause. We had to move to Florida. Okay, if there's a clause that you can sell that property. I know rental properties are so cool and all that. I would sell it and I would use that, Michael. And the down payment you guys had saved.

Where is that money? You said we had saved for a down payment, but it wasn't quite enough. Is that 45K? It's in an Mariprise account What is that? How much is that? That's the 45,000 Oh, that's the 45,000

Okay, so then I would use The money from the rental property And use that as a down payment On a home Your own home Or to sell out Or change the deed Out of the current home

If you guys can afford it, right? But I would kind of just Like liquidate everything And that is an amazing Starting ground I mean mean if you have no debt you guys have an emergency fund which you could use some of that proceeds um because your rental house is in florida right is that what you said no it's it's in cincinnati we bought it and then four months later we had to move to florida for my job okay i gotcha I gotcha So yeah I mean I probably get rid of the rental And I would be doing you know

Pretty traditional investing I'd want to get out of the rental house with the parents Because you're yeah they're letting you Run out costs but you're paying for everything You're paying for all the repairs everything And there's no equity to your name at that point So yeah I would probably change that And again if you guys need a minute

Because you want to have a baby you can It's not completely urgent but I would have that conversation And again, if you guys need a minute, because you're about to have a baby, you can. It's not completely urgent, but I would have that conversation and start that path. So we threw a lot at you, Michael. Maybe you can go back and re-watch this. Go back and listen. But that's what we would do. And I know that takes time.

It's easier said than done. But you guys have some great options, which is so exciting. So congrats on the baby, and congrats on the new job you're about to find. 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 at chministries.org slash budget. Today's question of the day is brought to you by Y Refi. Y Refi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford

with a low fixed interest rate that you couldn't get anywhere else to help stick to your budget and to work with the debt snowball. So go to Y Refi dot com today slash Ramsey. That's the letter Y, refi, R-E-F-Y.com slash Ramsey, may not be available in all states. Okay, so today's question comes from Evan in Kansas. He says, my wife and I are debt free except our mortgage, which we owe $120,000 on. My wife recently quit her job to stay at home with our baby. And now after all our basic expenses are paid, there's nothing left over. We've been contemplating ways to save and the only area we could really cut is food. We're considering going to some

of the many food pantries in our city a few times a month to get the majority of our food so we could still have a couple hundred dollars to throw out the mortgage. Is this ethical considering I have a stable job and it's not like we'd go hungry without the food pantry? We agree that once our mortgage is paid, we would donate these food pantry items to give back. Is this the wrong way to become debt free? I'm going to go with yes, I would not do that. I,

you know, you said it best, Evan, you said, you know, you've got a stable job and you don't need this. And I think food pantries are really there for people who need it like they're in need yeah and there's also the side of this where again we kind of talked about this earlier in the show but if you choose the stay-at-home route or you you choose any route that's going to have one of the spouses not working then you make the that bed and so you lay in it yeah and that's not a bad thing it's just you've both decided okay this is going to take down our income significantly and we're okay with that and then you've decided if this means it's going to take a lot longer to pay off the mortgage

you to decide on that and i would not yeah use like community resources basically for yeah that that are not of need yeah i wouldn't do it yeah i don't, I don't think I would either. I wouldn't do that. And I think he knows that. Yeah, he wouldn't probably be asking if he didn't feel great about it. Yeah, so I think, again, it's maybe a shift in the budget. Maybe it's waiting a year or two and you'll get a raise and you can use some of that margin. Because when you get to the point of paying off your house, that's where we always say you can kind of relax off the accelerator

and you make decisionsisions then you know that May be different than baby steps one through three Right and and the baby's Going to grow up and she might decide When the baby goes to kindergarten she goes back To work and then you guys are you know that's right going Forward again absolutely well thanks For the question Evan all right

Next we have a Connor in Jackson Mississippi hey Connor welcome To the show. Hey, guys, thank y'all for having me on. Absolutely. How can we help? So I am a 19-year-old college student in the Mississippi area, but I'm also a business owner, and I'm kind of teetering on,

this is my second year of college. I'm at a community college uh in my local hometown and I'm just trying to figure out if I want to go off and pursue a four-year degree from a university or should I stay at home and continue working on my business what's your business so I own a landscape company um it started off as, you know, just a side hustle. When I could first start driving at 16, I just bought a push mower from Home Depot and started mowing yards. Good for you, Connor. Thank you.

Over time, it just got bigger and bigger. Now we have three full-time employees uh plus myself um how much are you making how much are you making a month off this so it varies obviously you know in the winter it doesn't we don't do as much but right now we're doing about last i'll say this last month we did 40,000 in sales um what do you take home I think I will I mean I try and spend as much as possible I try and reinvest as much as possible since I'm young I don't really have any bills I do live in an apartment yeah but um I really don't have if you if you did if you did, because what you're talking about, not going to college at some point,

then it's like, okay, well, you're going to get your own place and you're going to need income. So if you did draw on income, what do you think it'd be? If I needed to, I could probably scratch out probably about $60,000 a year right now. Okay, that's great. So the question is, do you go to college or work on the business

That's growing What do you want to do Connor Do you Are you enjoying this business Are you wanting to do this Full time Are you going to go to Is your

Is your Mindset for going to college To help grow The current business Or to start something new Get a different degree Like what would be The four year college goal

It would probably So my major right now Is just a business administration. It's not in like landscape architecture or anything like that. I'm not necessarily tied down to landscaping, but I do, I do enjoy working with my hands. But what I enjoy more is being a business owner. I've always been an entrepreneur ever since I was young between flipping shoes and clothes and buying stuff low and selling it high. Yeah. It's just always it's in my blood. I think that's a great indicator because obviously the college and university route is not for everybody.

Growing in your education is for everybody. What I would say is really looking at your five to ten year picture. If you when you picture yourself in five years, what do you see yourself doing? And when you look and then when you reverse engineer that, you go, OK, does that require me having a degree? How did I get there? Like, really think through that, because, you know, there's the societal timeline of when you're 18, you go to college. But if you're not ready to do that yet, and if you can't afford to go there yet. Yeah, well, I mean, I was gonna say, Connor, there's, you know, you go to college to either get some type of degree to get you in a field

that you need, right? And there still are definitely routes, career routes that require a college degree. And you mentioned like landscape architect right maybe there's a architectural degree that you need because you want to work for this firm in five like there's a there's a route so you're getting somewhere but I would personally I would not go and get a business degree and spend 60 70 000 because you know what Connor I'll be honest you're learning a heck of a lot more running your own business than you're going to be some theory sitting in business class. It's going to be behind anyway. I mean, honestly, seriously, it's so true. And like the life experience that you have is so much greater than usually what you can learn in a classroom. Not always. Yeah. But in a business entrepreneurial

route, people run and grow businesses all the time without a college degree. And you're getting, you know, a really basic degree there with your community college which i think is really smart to do i do too um but i mean if if your goal is to have this company continue to grow it i don't play that out need a you don't need a college degree to do that so i would save the investment of what you would pay for college and continue down this route if I were you. But again, if you get into something that's a little bit more specific and tied to some type of licensing or, you know, degree that you need, then maybe you look into it. But for now, Connor, I mean, you're killing it. Is there anybody that's $40,000 with three employees?

I mean, it's pretty impressive. Do you have a business that's doing what you want to be doing that you're watching? Yes. So I actually have two mentors. Before I started my own company when I was 15, I worked for one of my good buddies. His dad has been in the landscaping industry for 30 years probably. And he's very large and he did not go to college either um and so he he is from uh a suburb of jackson and as jackson in the metro area grew he just like his name just spread out everywhere and he's he does multi-million sales every single year commercial it's all residential. Yeah.

And so that's kind of what I want to do. And I talk to him very, very often. Okay, good. You know, I hold on the line, Connor, and Christian's going to pick up and we'll give you a copy of Entree Leadership because I think there is a, what you're experiencing as a small business.

I mean, you're having to lead people, which is what you really enjoy running that business side, but it can be tricky. And as you continue to grow it, there's going to be, you know, more avenues to go down and it's going to get a little bit more complicated. And then the entrepreneurial side that is so ingrained in you, you obviously have that inside of you, which is just amazing. So we'll send you a copy of Entree Leadership and make sure to check out even the podcast. And we have a, yeah, part of Ramsey is helping small businesses because we believe in them. We think it is the backbone of America leadership and make sure to check out even the podcast. And we have a, yeah, part of Ramsey is

helping small businesses because we believe in them. We think it is the backbone of America and it's incredible. So Connor, 19 years old guy, man, kid, I was gonna call you kid. You're not a kid. A man. A man. Yeah. But you're doing really great, Connor. So I appreciate the call. This is The Welcome back to The Ramsey Show. We are taking your calls at 888-825-5225. I'm Rachel Cruz hosting with Jade Warshaw. And we're going to go to Brandon in Columbus, Ohio. Hey, Brandon. Welcome to the show.

Hey, how are you doing today? We're doing great. How can we help? So the reason I'm calling is I can't seem to build any kind of wealth whatsoever. What's happening? Tell us more. Well, you know, I got three boys, and I got a wife that stays at home, and I'm the only income.

But I think I make okay money. But every time I try to build some wealth, you know, like something happens with the kids or something along that line. Tell us about your income. What are you making every year? Well, I'm a union electrician. Okay. So I make about $15, $28 if I work I work on Saturdays. I usually work Saturdays.

So every month, if you look at your budget, how much is on that top item? My budget, it takes about $4,800 and some change, maybe. Okay. Is that what you're bringing in? $4,800. Income-wise, that's what you're bringing in? Income-wise, I'm bringing in maybe about $6,000. Okay, so $6,000. Okay.

And then do you guys have debt? Well, you know, I got my Jeep, and my old lady has her van. Is that on payments? I wish it wasn't, but it is. Yeah, that's fine. How much do you guys owe on payments? I wish it wasn't, but it is. Yeah, that's fine. How much do you guys owe on yours? Well, my Jeep, I got maybe $8,000 left. And on her van, we just had to get.

So it's around $22,000. Okay. You said you just got it? Yeah, we just got it maybe about a week ago. How much are your car payments on those, both of those? Well, that's where it's eating me. Yeah, I bet. On my Jeep, I'm paying about four.

On her van, I'm paying around six. Oh, I bet you. Yeah, it's $1,000. Okay, what else? So you got the Jeep, the van. What else do you have? Are there credit cards? Do you have any other loans? no i really don't have loans i mean i mean we got you know groceries

and we got we got rent okay so those that's fine those are fixed expenses on your budget but do you have any other debt which is you know a lump sum of money that you owe i mean maybe when i was younger let's i'll just keep it easy i'd probably say maybe about 10 grand maybe what would it be in credit cards no it'd probably be a little bit of hospital and maybe uh uh miscellaneous i I'm sorry. I'm kind of lost for words. That's okay. Brandon, how old are your kids? I got a 10-year-old, I got a six-year-old, and I got one about to be two-year-old. Okay, perfect. Okay, so here's the thing. I think you're having a hard time building wealth because your biggest wealth building tool is your income. And right now, $1 thousand dollars of your income is going or and

maybe a little bit more is going towards your debt payments every single month and uh it sounds like i'm not sure but it sounds like maybe you're trying to do a little of this a little of that a little of that over here and the method that we teach you is going to give you focused intensity on one area at a time for the most part. So do you have any money saved? That's the problem. I don't. I can't seem to save a dollar. Okay, so let's go back to the essentials here. I think the first thing here is the budget. You told me that out of $6,000 a month, it takes $4,800 to run your household.

So that means somewhere along the way there's 1200 left if you're doing your budget correct right but you just said you you can't find a dollar so something about that budget isn't adding up so let's kind of let rachel and i give you a quick crash course with the budget yeah because the the thing is with the budget brandon is it needs to be realistic so you keep saying okay you know which i get we j Jade has kids I have little kids so stuff does come up you know when you're a family and there's multiple people you're keeping afloat um so either you need to redo the budget and say okay realistically we need a kid's line item because stuff is going to come up every month that we have to pay school fees like whatever it may be sports yep that we're going to put in um and then there also may be brandon a you know a time that you and your wife sit down and you say

okay we're going to limit this budget and just because we feel like you know the kids need x y and z we may tell them no right now um because your goal is going to be to get out of debt and so that budget is really really key and tightening up that budget uh is gonna is gonna be huge so that's gonna automatically probably give you some of that breathing room of that twelve hundred dollars that we don't you know it kind of just disappears um the next piece of this i would do okay so rachel's telling you tighten up the budget yeah and you have a lot of car yeah is that what you're going next yeah you just bought this car for 22 000 it's a 600 payment and a month brandon sell it sell it yeah and we always say not to have anything with wheels and motors that is more than half of your annual income and you guys are right over that i mean you're making 60 yeah and i mean you guys are

you're you're close to that. You're at 30. I mean, like that. So you're it's too much. You have too much car. And I think you're feeling that, Brandon. You're feeling that. And so looking to say, OK, what are our options? What can we do that is different?

And it's probably going to be selling that van. And yeah, and that's going to take. So let's put this in the timeline. So the first thing you're doing, what Rachel said, you're getting on your budget, you're getting a realistic budget, you're figuring out what can we cut so that this $1,200 is actually a reality. And it's you and your wife agreeing to that because you need that money so you can save up a little bit to get out of this car and get into a car that you can afford because no more car payments, right? So you need at least five, $6, dollars to make this thing happen at least right so we're getting out

of this car and then after that it's okay we freed up six hundred dollars we can breathe a little bit and maybe it's you picking up a side hustle your wife she's got the two-year-old at home but there's you know at least it's one at home and not the others. And so what can she do to bring in extra income? And from this point on, it really is you guys deciding how quickly you clean up this mess by deciding how much more money comes in. Because the ultimate goal is building wealth. The debt is standing in the way that you clear out the debt and then you get yourself that emergency fund of three to six months saved. Now you're going to feel peace about day-to-day life, right? So if an emergency hits you, you're fine. And now you can actually start building peace about day-to-day life right so if an emergency hits you you're fine

and now you can actually start building wealth you can start investing into your 401k if you have it start investing into a Roth IRA as an option but we've got to get through baby steps one through three one through three first Brandon I um have you looked into you know other small businesses in your area and what they're paying for electricians. I just wonder, even if you switch out of the union, if you could find a better gig that pays more. Well, I mean, I've, I mean, I've done, I did solar for seven years and, you know, I, I, I have a little LLC with that, but I mean, realistically, until I hit a journeyman's card, you know, I'm not really, there's really nothing out there that's maybe paying more. I mean, it may be a dollar, it may be $2, but it's nothing like jumping up another $10,000 to $12,000.

Okay. Yeah. Yeah. Because I was just curious if, you know, sometimes in the private sector, there's, you know, other opportunities. So I just didn't know if you had explored that because, because I think the goal to Brandon is, you know, you guys make 60,000. And yes, there's a level of intensity during baby steps one through three to kind of get you out of this hole. So there will be, you know, extra work here or there, all that. But I think the goal is eventually to be able to live off of your income comfortably and enjoy it, be able to put some money aside for retirement, you know, do some of these things to enjoy your life. And so if that is not coming to fruition, then yeah, then that's where a bigger conversation is. And you

guys are renting right now, right? So even home ownership to be in the picture eventually, which I know can probably feels very overwhelming right now to think about, but to be in the picture eventually which i know can probably feels very overwhelming right now to think about but um but to be able to get there but hey um brandon i want you to hold on the line because christian's gonna pick up and i want to gift you guys financial peace university you and your wife this is our nine lesson course and go through this and and again it runs the gamut everything from the budget to getting out of debt all of it and then you know what and hold on the line too uh and christian we'll throw in some mckinnon coleman's stuff he has a great career assessment that would just be interesting brandon and again

being an electrician making 60 grand that's fabulous work and wonderful but um i think we i think people do get to a reality of okay how do i sustain my life um and if you can ever make more, that's going to help it without completely shifting your lifestyle. So just out of curiosity, maybe dig into some of that too and see if that kind of triggers anything for you. So thanks for the call, Brandon. You guys got this. Just stay on track. This is The Ramsey Show. So just imagine you look up a year from now and everything that you wanted to accomplish you accomplish because when you want to do something it doesn't just happen by chance

you have to be motivated you have to have a plan to really get there and be organized that's why we are so excited about the new 2025 Ramsey Goal Planner it is here and myself and Jade Warshaw and our friend Dr. John Deloney, we have content in there for you. We're going to walk you through different months talking about your money, talking about your spiritual life, your relationships and within it, it features so much you guys. It has a month and weekly

calendar, stickers, a vision board, goal setting system and all of it. So this can be yours today for $49.97 and don't wait because it has been selling so fast yeah and these sell out because we only order a certain quantity because once 2025 hits people yeah they're not buying planners so we have a limited availability so make sure to get it and it's been. So go to ramseysolutions.com slash store or click the link in the description if you're watching on YouTube or listening on

podcast. Up next, we have Vanessa in Seattle. Hey, Vanessa, welcome to the show. Hey, thank you for taking my call. Absolutely. Okay, so I'm just going to dive right in. So I'm a 54 year old woman. I live in the Seattle area. Um, I am not working right now. I'm at the tail end of a bankruptcy. I was married and I got, I, there was just too much debt. I couldn't, there was no way that I could get out of that. So, um, I did file bankruptcy. It just discharged. And so there's that having, you know, just starting over with credit. I am not going to have a place to live as of December, the end of inside. And I thought for sure, you know, I'd have some time here. Oh, wow. Gosh, you've had a lot, Vanessa. I have a lot going on in my life.

Yes, I'm so sorry. Divorce and the bankruptcy and a living situation that's up in the air. And you said your ex-husband remodeled the inside of the rental house? He did, of a rental, yeah. When y'all were living there together? We were for four months and then he moved out. It was an abusive marriage. So it took me a long time to get out of that, but I did. I'm so proud of you. Yeah. Yeah. I appreciate that. So I was making, uh, anywhere between 15 and 18,000 with an eBay business while I was married. He was the primary, you know, he had the job. He was bringing in very good money, but we were renting

in the previous house we were at for nine years. So this is my third marriage. I just want to say that if I knew that I was going to be here, I would already have a house, but it just didn't work out that way. Okay. What are you doing right now, Vanessa? How are you paying your rent right now? How are you paying for expenses? Well, I was living off my savings, and then on top of everything, I lost my daughter. It was very sudden. Um, she, she died. She was 26. I'm sorry. I know there's so much going on.

So that just killed me. I mean, it's so hard, so horrible, you know, and there's nothing like losing a child. It's horrible. I can't even imagine. So it's been hard, you know, to work, to concentrate on eBay, to do anything really. I mean, it just completely was debilitated and just from everything. So did you get anything out of the divorce? I did. And I've been living on that for the last three years. Let's see. So I was receiving maintenance and then I had about $50,000 saved. What's that down to now?

It's down to zero. However, there is some good news. I just inherited $30,000. Okay. So I need to know what to do with my thirty thousand dollars i don't have any debt other than the car payment i have a car payment that's 300 a month and how much do you owe on the car what's the total amount you owe on the car i owe about 18 000 on that okay so 18 to 20 it's it might be about 20 with the payoff fine okay um so but if i take that yeah let us let us give you some help here and real quick we just give me a quick timeline. These are big things that have happened. Will you just kind of walk me through really quickly when the divorce happened,

the loss of your daughter, and the bankruptcy? When did all this play out? Okay. So the bankruptcy was, it just discharged. That was 90 days. It's been about four months total with that. Losing my daughter happened, it was last January. So it's been a year and a half. Okay. And my divorce, we separated after we moved into this home, which was November of 2021. So he

moved out in April of 2022. So since then, I have been living off of what I have, what I got, what I received from that. That's good. I just want to know, because I mean, these are like three very traumatic things that have occurred. So I just didn't know how timeline wise, because I think for you, Vanessa, this, I mean, you're the biggest glaring light that I see is the income side. Because as you experience with the $50,000, if you continue to live on savings and you're not, you know, replacing that with other income, it eventually dwindles. And that's what you've experienced.

And so making sure that this $30,000 does not dwindle. And the only way to really do that is to be able to be bringing in some income, which I know is... Sorry. No, you're good. Go ahead. Okay. So I've been working on my master's degree. I was busy with that in art history. Now, what I'm going to do with that, I have no idea. I mean, people ask me, what are you going to, um, art history? Yeah. Cause I love, I just love it. I love architecture, art. What did you plan to do with it when you got it? Yeah. That, and how are you paying for it? I don't know. Maybe teach. Um, I was, I was paying for my, uh, my education as I went. So I still have some, I have some loans. I think, I'm not sure exactly. Yeah, I have students. I wasn't able to file. You can't file on those. No, you can't. Okay.

So let's get, we gotta, we gotta get organized and we gotta get a game plan going forward. Right now is not the time to keep taking those classes because you can't afford to pay for them. And you still have some existing student loan debt. It sounds like you've got the $18,000 for this car. What I believe your homework should be, and I think Rachel would probably agree, is first things first is you got to get a job. Yeah. And a job. And this is, you know, this is Target, Vanessa. I mean, this is making $18 an hour at Walmart. I mean, this is truly doing what you can because the decisions so far are not panning out in reality for you, right? An art history degree. Well, I'm going to go get a master's, but I don't know what I want to do with it, right? So I want to make sure the ROI on your time is realistic.

And so being able just to get something in, I think it'll be good for you, Vanessa. I think there's going to be a level of dignity and confidence of you going and earning your own money. That's going to be huge. So for the time being, I mean, it would be tomorrow I would be out and just retail, whatever you can just to be getting an income in and then eventually figuring out what does Vanessa want to do and what can Vanessa do to support herself and be able to, you know, advance throughout life. You know, you're in your 50s and there's, you know, advance throughout life? You know, you're, you're in your 50s. And there's, you know, there's still a great, great life to live. And I want you to be able to do that. But the steps would be number one, finding a job tomorrow,

any job, and I would be, I would be working like crazy. I think my goal would be not to touch the 30,000. That would be the goal. And I think selling the car is probably the car's big, you don't need an $18,000 car, Vanessa, you need need a six thousand dollar car. And then third, I'd say, you know, that you know that the time is coming where you won't be living in this house anymore. So let's start doing research on a place that we can live. That's less expensive, possibly just tiny. I mean, anything, again, it's going to be uncomfortable for a little bit, but I think making some of these wiser, more conservative decisions is going to give you some bandwidth and some margin. You need it. Yes. The car might be a little bit tricky. And the reason is because I kept that through the bankruptcy and then just negotiated the interest rate. So if I let that go, then it's going to hit my credit, which I want squeaky clean from here forward. Possibly. Yeah, I probably could sell it. That's what we're talking about. We're talking about you looking on Kelly Blue Book and seeing

what it's worth and then you selling it and buying something cheaper in cash, not a payment. Yep, that's right. Okay, Vanessa, that's a lot. Why don't you hang on the line? Christian will pick up and we'll get you with a Ramsey coach to help you. Well, if you're listening on radio, keep on listening. But if you are on YouTube or podcast, make sure to go download the Ramsey Show app to get the third hour there. Thanks to everyone in the booth.

Thank you, Jade Warshaw. And we will see you soon, America. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with bestselling author and good friend, Jade Warshaw. And we're here to answer your questions. So anything that you are thinking about, situations you're in, whether it's your life,

it's your money, it's your career, your relationships, anything and everything, we are here for you. So give us a call at 888-825-5225. And yeah, we've had so many, you know, new listeners on podcasts

and YouTube and our Ramsey Network app and radio and all of it. So if you are new or you've been listening for years and years, but you have a question, give us a call. We're going to start off with Brett in Salt Lake City, Utah. Hey, Brett. Welcome to the show. Hi there. Thanks for having me. Absolutely. How can we help? So I'll get right into it. I'm a 25-year-old living in Salt Lake. I've been dating this girl for about a year and we're wanting to get married. Oh, congratulations. is show and program yesterday. And I've been reading up on a lot of it and I've been paying

off a lot of debt for the last few years. But I'm wondering, do I need to pay off all my debt before we get married? Or is that something that can be worked with? That can be worked with. Yeah, for sure. Yeah. We always encourage people to live your life, have kids, get married, you know, continue to go down life even if you do have debt. Because in fact, you know, continue to go down life, even if you do have debt. Because in fact, you know, especially with marriage, usually if it's two incomes coming together, you can do it that much faster, which is great. But also you don't want to put off big life decisions because of that. So yeah, are you guys, how much debt do you both have? So I don't know about her. I have about $39,000 of debt. Okay.

And I make 120K a year. I have about $39,000 of debt. Okay. And I make $120,000 a year. Okay. What does she make a year? She has like $50,000 a year. Okay. And she has upwards of $50,000 of debt. Okay. So it's a bit of a situation there, yeah.

Yeah. What's her debt in? Student loans, car, and some like old credit cards. Okay. But you're not sure exactly how much though? You think upwards of 50? No. Okay. Yeah. Have you guys talked about money? We have. And she's the child of immigrant parents. So the way she sees things is a little bit different than how I see it. Yeah. How does she see it? Okay. But I want to see how we can handle that appropriately.

Yeah, for sure. Yeah. I mean, money and marriage, it's a big topic and getting on the same page, not necessarily from a personality standpoint, because you're both going to be wired differently. And yeah, we'll have different viewpoints because of upbringing and all of that, which is totally fine. But I think what's important is the value system is aligned. So again, understanding that, yeah, she may be more of a saver, you're more of a spender, you know, like things are going to be a little bit different in how you approach money, but that you guys have the same values, like, hey, we want to get out of debt together. Hey, we want to have a plan every month for our income. You know, we want to do we want to own a home eventually,

like some of these value standpoints that you guys are similar on. Do you feel like you guys are similar on values? We're similar on values, yes. It's more of the approach of debt. I prefer not to use debt, and she doesn't really care. She sees it as a tool to get you what you want. I think that's part of the values, though. She's not going and buying random things. It's more just like to buy a house or if you need a car. And she's nothing crazy with her car. Sure. Sure. She sees it as a avenue. As a tool to leverage. Yeah. That's going to be tough. I think that would be a conversation because when it comes to getting out of debt

once you're married, I said it on the front end of this call that sometimes it's easier because you put two incomes together you know and you're able to to fast track some of it but also it can be harder if you have a spouse that's not you know that motivated to do it either so yeah I would have those conversations and I think knowing going into marriage, I just did an Instagram reel about this, about five questions to ask before you get married. And it's like knowing each other's income, knowing your debts, knowing your goals, knowing if you enjoy a budget, like some of these conversations and knowing this before getting married is not nosy. It's responsible, right? So, um, so yeah, I would have to create a

budget a few times, um, because you know, you just never write the first time. Sure. And so we've done that quite a few different times and it seems that it's a bit of a headache every time I do it, but then eventually she comes around. Yeah. Yeah. So it's, uh, I, I don't know what the best approach for that is. Sure. And that's why I'm wondering if I need to pay off all my debt before we get married. So then I can know I still don't think that that's the case. I think what we can do, we can send you Financial Peace University. I think that's a great way to introduce someone to your values as it relates to money.

And that way you're not having to go, I listen to the radio and these guys said this, and it's amazing. It's, hey, I found out about this methodology. I'm really excited about it. This is a nine-week course. Do you want to watch it with me? This would be great. And let us do the teaching through the Financial Peace University. So it's not you saying, hey, come over to my side. It's you here's what i found i haven't even seen this before do you want to watch it with me and then hopefully by the end of that you guys are closer to being aligned on how you move forward because i'm not gonna lie i'm not i can't make this decision but it does make it tough when you don't align on money and how you value freedom and how you like those are those are that that throws a

wrench in some things definitely so yeah I think that a lot of this came up yesterday so I'm trying to figure it out I think that's what I need to do is sign up for the university yeah that's going to help it's going to help a lot you're going to that way you're aligned on the knowledge that you've gained and you both are kind of at the same starting point it's not you you know way down there telling her come on come on come with me over here because that can feel overwhelming as well yeah and you're new to this too brett i mean so yeah this is all a learning curve for sure and and i think i think thinking for her to come a long way but yeah i've had to pay off like 30 000 in debt so far so far, which has been great. Yeah. No, I think, yeah, I think that's awesome.

And I have found, too, when you're having these conversations, starting more with the not a you, you're not doing this. You know, it's a me conversation and the why behind it, right? So for you, the why behind wanting to pay off debt, what is that? Is it because you want your income so that you can use it to invest and build wealth? Is it for peace of mind? Is it having autonomy over your life and control? You know, that why is sometimes a better starting point

than just the what. Yeah, I agree. And talking about that, because Brett, what you'll find too, and we see this all the time in marriage, is it's never really about the money, right? It is about what the money provides. And we say, or I say on my show, that money is a tool to create a life that you love. So it's not the money problem. It is how we're using it and what it's

benefiting in my life or taking away from my life that we need to talk about. So when you talk about kind of those deeper issues underneath it, not just the principles, but what it's doing to you, then you're going to hear from her. And you know, she is immigrant parent. So there could be a, there's a major safety net issue there, right? Of like, oh my gosh, we've come to America and I can do all this. So like getting to know her. So that's the beautiful thing about talking about money with your spouse. So many people just, they feel like, well, we're different. So we're going to just go separate ways and run on two separate tracks. But you miss, I think so much of the richness of what those conversations bring. Because again, you're not just talking about money.

You're talking about her growing up and her childhood and her fears and her dreams and how she sees things. And you almost get to know her better through it. So you guys being on the same page is so key. So I would not be paying on her debt before you guys get married. So get engaged, all of it. Yep, yeah, go down. But I would really suggest

if you guys are engaged, go through FPU together, Financial Peace University. We'll give it to you as a pre-engagement gift. So stay on the line, Brett. And that'll help you guys maybe with the conversation points. But thanks for the call.

Welcome back to The Ramsey Show. Up next, we have Kashim in Portland, Oregon. Hi, welcome to the show. Hi, Rachel. Thank you so much for taking the call. Yes, absolutely. How can we help? Appreciate it.

I've been watching Dave Ramsey for the longest time, and I love the show and everything that Dave does and you as well. Thank you. My question is, we make good money, my brother and I. We run an assisted living, and we have paid off all our consumer debt, no car loans, no student loans. We have invested into real estate, and we have about six properties. But for some reason, you know, it still feels like we are paycheck to paycheck

because everything that we make, we invest it back into real estate. And then I was wondering, should we maybe stop investing and start paying off like we did with our consumer debt, the cars and student loans, pay off these properties. And then once all of those properties are paid off,

then maybe start investing again with the cash that we would have. Okay. How much are you guys making a year, income-wise, for you? Together we make probably about $400,000. Okay. So do you take $200,000 and he takes $200,000? Yes.

Okay. And how much debt is on the six properties total? It's about $ 2.5 million. Okay. Also, one more thing. We have 401k and I know also we've been investing in 401k for the past two years. So we're thinking maybe we need to stop that. We do the max, we max it out for the past two years for both of us. What's your full-time job?

So we're running the assisted living. It's our own business. Yes. Okay. That's right. You said that. Okay. So just to clarify all of it together, the income from the assisted living,

the income from the properties is the 400,000, right? Not just the properties. Correct. Okay. So could you, I mean, I'm thinking, you know, to relieve some of the pressure, because you said that you feel like you're still living paycheck to paycheck and, you know, making 200 grand. If you're you're yeah if you're making mortgage payments you have renters and all the six we do yeah the properties are all cash flowing um but i mean uh whatever we make in in the business save it up and then we just go and buy another property yeah so i would i would yep so i would pause maybe even go a step

or two backwards possibly just to give you some breathing room so instead of going and continuing to invest in these properties and taking leverage out on all of them that's what's causing you to feel so tied down or right like with no margin so i would take some of the that income throw it at some of these properties to pay it off faster, and I would cash flow it. So that may even mean, Kashim, to list out the six and say, hey, maybe we sell two. The equity from the two could help pay down some of the other three and our cash flow. Because we don't mind having real estate. I think it's a great opportunity. But when you are leveraged in it and you continue to leveraging in it, it's going to eventually eat up your income, right? Because it's not going to be perfect. But having that paid for income,

when the income comes in from the rentals and it's all yours, then suddenly you feel like, oh, we're making the money that I feel like we should be making, right? I mean, you have $2.5 million worth of rental properties. You should feel like we're making the money that I feel like we should be making, right? I mean, you have $2.5 million worth of rental properties. You should feel like we're doing really good, but it's not working out that way. No, it seems like, you know, on the paper, we have a lot, but then, you know, kind of cash broke. Yep, so yeah, exactly, exactly.

So I would free up. I would be okay with you keeping a couple of them, you know, knowing that, hey, we're going to snowball this and pay them off quickly. Did you guys get them a few years ago, or have you gotten them recently? A few years ago. We started back

in like 2022. And then the last one we just purchased this year. I would stop purchasing. And again, I would sell a couple of them. But I would list purchasing. And again, yeah, I would, I would sell a couple of them, but I would list them out and say, Hey, here's what they're worth. Here's what we owe on them. What's smart to do this. And are you're doing this all with your brother? Yes. Okay. Are you both of your names on the, on the notes?

Yes. Okay. So would that be something that he's willing to do as well? Yes, actually He's sitting here listening too We started together We're doing things Together Actually he's the one that got on the phone And calling To the show actually

Okay, okay Well we have a little bit of time Kashima, I would be interested Do you have the numbers off the top of your head of what each property is worth and how much you owe on them? Yes, I can look it up here in a second. And also, regarding the 401k,

should we keep investing into that 401k? Yes, I would. No, I just said pause it. Yeah, no, I would. Yeah, I would keep going. Because that's going to be consistent. Yep. Mm-hmm. Did you say you wanted

the... Yeah, let's go through them one by one. Okay. So first one is a condo. We owe $150,000. Then another one is a condo. We owe $150,000. Then another one is a house. What's the one that's $150,000? What could you sell it for? Probably like $250,000, $260,000. Okay. Perfect. Keep going.

And then another one is we owe $230,000. That one is about $410,000, $420,000 right now. Okay. And then we have a condo. We owe $450,000, and that one is about $600,000. Okay. And then we have another condo or a duplex. We owe $340,000, and that one is like $500,000. Okay.

And then we have our primary houses, but selling those okay okay that was the two part of it now on the primary mortgages you you are the only person on your mortgage and he's the only person on his mortgage right correct okay so i mean rachel i know what i'm thinking right off the bat yeah i mean i'm i'm probably you know and again you can rearrange some of these i would take the ones that are probably in better condition less hassle what I'm thinking right off the bat. Yeah, I mean, I'm probably, you know, and again, you can rearrange some of these, I would take the ones that are probably in better condition, less hassle, ones that are in better part of the city that you can rent out that's more stable. But you could sell two of these, you know, rearrange some of the numbers because you even and have two paid for properties there. And I would and I, I know you and your brother are doing this together. But my

advice, you probably won't take it because she is to do it individually. I think when you have a partner in all of this and we both own it, it can get really messy really fast, but that's just my two cents. But well, there's part of that because here's the thing. If you were in this deal alone, my first thing would be like, hey, okay, for instance, property number three, it's a duplex. I don't know what side of town it's in, but I'm thinking, okay, it's more work to rent it out.

It's two places. And you owe the most on it. And the gain is pretty decent. So I'm like, okay, I'd probably go for that one first, just based on little knowledge here. But I'd want to then take that money and pay off my personal residence before I reach over and do properties. But since you're in this with your brother, it doesn't necessarily

work that way. So that's kind of just one of the ways that it muddies the water a little bit on this. But that being said, you could still reach over, you could pay off the one property number two, probably if you made that sale. And then property number four, if you sold it and you cleared out property number one, there's a lot of options. There's a lot of options. Yeah. So yeah, I think you could make one or two moves here. And I think what that would do again is if you have two paid for properties, you're getting rental income and then you and your wife say, Hey, our next goal is to pay off our primary home. Cause how much do you owe on your primary? Um, about three 40. Okay.

And, uh, it's worth about seven 30, seven 4040 We bought it back in 2017 Okay that's great yeah So yeah you can go down the steps there Or if you want to go real crazy Which I don't think you probably will You could sell everything and put some of this Towards your primary But again I think you and your brother can sit down

And just say hey What are the properties that we're confident in And I think you can keep Maybe two of them sell two two, rearrange some of this. And I think it's going to relieve it because you guys are kind of playing the game. And Kashim, you guys are smart. So honestly, at the end of the day, once you have all this kind of cleaned up and you guys are making a better income, then take your time and save because some of these you bought for $150,000, there's still deals out there. I mean, you can still go and, you know, buy something crappy and fix it up, put some money

into it and rent it. So that's still a possibility, but just doing it with cash is going to give you less stress, which is what we want for you. Thanks for the call. So many of the calls that we take on this show have to do with you being intentional with your income because your income is what's going to help you get out of debt. Your income is what's going to help you save up an emergency fund. Your income is what you can enjoy and go on vacation with your family. It's what you use to invest. So your income is so powerful. And if you don't have a purpose for it, it's gonna just disappear. And you're gonna look up in a year and be like,

where did all my money go? So being intentional with your income is huge, you guys. And that's a budget. It's a spending plan, knowing exactly where your money's going throughout the month. And EveryDollar is the best budgeting app to do that. You're able to, again, plan your spending,

track your expenses, save up for what you need. And it's an app that you get to be in charge of. That's the beautiful thing about being an adult, Jake. You get to decide. You get to be in charge. You get to decide. And so making that extra effort in life really does help give you peace with your money. And again, it helps with your money goals. So make sure to download EveryDollar for free in the App Store or Google Play, or click the link in the description if you're watching on YouTube or listening on podcasts or the Ramsey Network app. We will put it all there for you. But go ahead and download EveryDollar for free today. I always say, Rachel, your income is the most expensive thing that you have, right? It's like it costs you so much. Like it costs you time away from your friends and your family. It costs you like mental

calories to like go to work. It costs you so much effort for some of us. It costs us sleep, right? Yes. Wake up early and you work long shifts. And then we just kind of don't take care of it. Like, can you imagine Rachel, the, one of the most expensive things you own? Like, maybe it's a bag or like something really nice and you just toss it around. Like, you just, you buy a Louis bag and you just toss it in the corner. You would never do that. No, because you understand the value of it. You know how hard you had to work to get it. A car. You're not going to slam the door into the car next to you. You know, you're not going to scratch up. Yeah. You're going to be wise. You take care of it. Yes. And when it's cash money or, you know you're not gonna scratch up yeah you're gonna be why you take care of it yes that's a great point when it's cash money or you know direct deposited into our account somehow our brain forgets how valuable it is so true it's such a good budget got it but and i do i love it

you guys i was tracking transactions today jade we went on a trip over um labor day and i told myself i was like i can't believe this is me because I was not the, I did not enjoy the budget. This was the part of the finances, this whole world that I like had to really create a new habit. It didn't come naturally to me. And yeah, and I was like, I'm kind of secretly, I can't wait for Tuesday to come because all the expenses will hit and I'll be able to be like, okay, did we stay in budget here? Like I want to be able to track everything. It just feels good. You feel in control. All right, let's go to the phones. We have Ray in New York City, one of my favorite cities in the world. Ray, welcome to the show. Hi, thank you for taking my call. Absolutely. How can we help? Yeah, so I wanted to better understand what's a reasonable price of a car,

you know, to purchase a used car you know keeping the future in mind obviously accounting for income and all that for sure well our number one rule with buying cars is to do it with cash so the amount of money that yeah you have available yep so that's that's number one uh number two yeah you mentioned a used car. So until you have a million-dollar net worth, buy a used car. Let someone else take the hit of it depreciating. And then the third kind of rule of thumb is we don't want anyone to have anything with wheels and motors that is more together combined, more than half of your annual household income. Yeah.

Is it just you or do you have somebody with you? So it is just me but you know want to keep in mind you know the future i have a long time girlfriend and you're making plans for you know those next steps but yeah you know currently just me have you know i think at my age doing very well um you know in a fortunate place so i want to try to balance that's great yeah how much how much do you make a year how much much? So I make $90,000 a year and then I have a lot saved up in an investment account. So I have $47,000 in cash, almost $90,000 in like stocks and mutual funds and then about $70,000 or $73,000 in my Roth IRA and Roth 401k.

That's great. Any debt? Zero debt. Zero debt. That's amazing. I pay off. Yeah. Yeah.

Super fortunate. Yeah. Well, that's great. I mean, you've worked hard and made smart decisions. What's your current car situation? So currently driving my dad's old car. He bought a new truck a couple years ago. It kind of worked

out that he's been lending me that for a bit, but he's retiring and wants to sell it. It is his car, so he obviously has the right to do it every once in a while, so it's time for me to buy one myself. So I was thinking of What do you think you might want to spend?

Um, so I was thinking about $27,000 for, you know, you've used F-150 or like a Ford Ranger or some equivalent. I don't have that Raptor money yet, but I love that. What's wrong with that? I mean, you've got 47,000 saved in cash cash i'm guessing at some point you're going to be thinking about i don't know because you mentioned the future so i'm thinking on down the line okay what could there be saving for a down payment for a home having an emergency having emergency funds yeah um a wedding possibly in the future right so um so yeah the 26 yeah that that's not outrageous by any means i don't think so what is What would you consider three to six months of expenses out of the 47? Honestly, currently, yeah, right now I really don't have any expenses due to COVID and my work is remote.

I've been living with my parents. Okay. That's one of the reasons I've been able to save so much money. So what I would do is, again, because we frame this up in thinking about the future. So I would think, okay, I'm not going to live here forever. You know, you mentioned a long-term girlfriend. So kind of start running the numbers and saying, if I were to move out, if I were to rent somewhere, what would I be paying? What would it look like? And kind of do get into every dollar and kind of just do a mock budget of what that would

look like. And then I'd run the numbers out and say, OK, what does this look like for three months or for six months? And I think that's a good thing to do because you do want to have that money waiting when the time comes. Like, yeah, because you are going to move out at some point. How old are you, Ray? I'm 27.

OK. Yeah. I mean, I would probably You know Challenge you to Yes To a day Yeah to live

That living at home It does great I mean to your point You don't have expenses You don't have bills But there is a point And financially You're in a really

Solid position There's just something Ray about When you live on your own Something else just occurs There's just a level Of responsibility there You know There's just a level of responsibility there. You know, there's, you know, when you want to have your girlfriend over,

she's not coming to the parents' house. Have you guys talked about, you know, future? Do you think you'll be in that area for a long term? But you could do a six-month lease, you know, with an apartment or something. There's some options out there. But that would probably be my next step. I think getting a car for you is great. But I would. I would start looking around, right? You have a stable job. I think it's time to leave the nest as they say. Yeah. I definitely spend less on a car

in order to set yourself up to move out, have that savings there. Yeah, definitely. Does that help? Okay. Awesome. Yeah, I really appreciate it. Thank you so much for the time. For sure, Ray. Thanks for the call. And well done. I mean, the intentionality that you've put towards your money, it shows.

It really does. And we're seeing this more and more, Jade, that people moving back home. And there's a truth that the housing expense in your life whether it's going to try to buy a house today rent is up everything is up in that world that's right so i understand that and for a season if you are in a position that you're like hey i have a plan i am going to move back home for x amount of time for a specific money goal right there's there's you got to have a specific end point yes yeah otherwise it's a gravy train and you keep riding it if you want to yeah and again there's like

and again depending on the situation we're talking to somebody and he was a truck driver this was a show probably last week and he's only in town one weekend a month so we're like you don't need a place yeah you're fine you're literally living on the road. So there are these exceptions for sure. And again, if you have, yeah, I don't know. There are the exceptions. For sure. Paying off student loans. You have a good relationship with your parents.

You live there for, you say, okay, for two years, I'm living with my parents until I pay off these student loans. I love that. I'm not mad at that. Yes. But it's this perpetual just living because it's convenient and it's nice not having to pay rent. You just, I don't know. I always use the milk example. It sounds kind of stupid, because it's convenient and it's nice not having to pay rent. You just, I don't know.

I always use the milk example. It sounds kind of stupid, but it's just true. Like you have to know, okay, is there milk in the refrigerator? Do I have bread? And mom covers it without you having to think. It just adds a layer of responsibility that I think just gives you a level of dignity and independence. That for a 27-year guy, Ray, thank you. Need it.

I think that's great. It is time. It is time. This is the Ramsey show. Our scripture of the day comes from Isaiah 25, one Lord, you are my God. I will exalt you and praise your name for imperfect faithfulness.

You have done wonderful things. Things planned long ago. Eleanor Roosevelt said it takes as much energy to wish as it does to plan. That's good. Yeah. All right. Let's go to Jillian in West Palm Beach, Florida. Hey, Jillian.

Welcome to the show. Hi, thank you for having me. Absolutely. How can we help today? I am a new listener. We've been on survival mode for the past two years, and we finally have some income flowing in a little bit more than we did before. And so I started listening to the show, and I'm like super excited about, you know, getting on to Baby Step 2. But we have upcoming expenses around the house, you know, maintenance and things that need to be done that have been neglected for the past two years. And so I'm trying to figure out how to balance working on Baby Step 2 and saving to pay for those expenses that are coming up. Yeah. What type of expenses are they and what do they cost? Things around the house. It's going

to cost about $6,000 maintenance around the house. We have a pretty big yard and some dead trees that are threatening some of, you know, the house and the, the well system and our fens and things like that, that need to come down. Um, just, just general maintenance that wasn't upkept over those, these past two years. What happened over the past two years? Um, well, my husband was attempting a career change and it didn't really pan out the way we wanted to. So we were kind of, you know, working through that. And he recently, um, was hired at a new company and, um, it's, it's been a blessing because our, our income has now doubled. Good. What are you guys making? Yeah. Uh, together we're at 160,000. Wonderful. What's your debt? Um debt is one hundred and twenty three thousand, not including the house. OK, will you break that down for me? Sure. We're at about forty two

thousand in credit cards. My car, we owe twenty thousand student loans or forty one thousand. And we have a personal loan of about twenty20,000. Okay. What caused the $42,000 in credit card debt? Overspending. Yeah, just lifestyle. Yeah, lifestyle. We tried to maintain the lifestyle that we had before and

just... How many credit cards does that if it's $42,000 total, how many cards specifically? It's about, I think there's nine that still have balances on them. And do you guys have any money saved? I got super excited. I'm sorry.

Do you guys have any money saved? We have almost a thousand. So we're almost done with baby step one. Okay, great. Okay. So yeah, I mean, Jillian, what I would would do you're making 160 combined in west palm beach florida i would act like i'm making 80 and i would free up 80 000 a year to start attacking this debt and that 6 000 of home repairs i mean the trees could be a for sure that could be like

a we may need to get those down i would get two or three bids of someone because let me tell you we had a tree fall and we had a good old friend that came out and took it away and it was way cheaper than going and hiring like a nice landscaping company right so yeah so making sure that you know the reputable of course but get different bids on these things but things that can be delayed for two more years that aren't going to affect like like the fence and that kind of thing i mean mean, there are points that you're like, yeah, we can put this off. And maybe you cut the tree, but remove the stump later. Like you don't have to do the whole expensive thing. Totally. Yeah. But you guys are making a great income. And I think

too, since you guys are just starting this, with the debt snowball, we teach the smallest debt to the largest debt. So what I would do too, Julian, is write down the nine. That's why I asked about the credit cards because there is something, and you and Sam went through this, Jade, but knocking off those smaller ones, even if it's a two, $3,000 credit card debt, I'm like, you guys could knock that out in a month, right? And you're like, okay, that's out. You're getting an extra job. I mean, you guys are all hands on deck a month right and you're like okay that's out you're getting an extra job i mean you guys are are all hands on deck and i know it feels like a lot of cushion because you're making double of what you did but i want you to make even more that's right by getting a side hustle uh and if any of those credit cards are in collections if it's been a while you might

see if you can make a deal to you know uh offer them a little bit less than what it's actually owed? Are any of them far past due in collections? Actually, we're all caught up. All of our bills are on time. Okay, good. That was kind of the first thing we did was make sure we were caught up on the mortgage and caught up on everything. Okay, good. That's where we're at right now. And actually, I paid one of my credit cards off doing the debt snowball and it felt so good we just wanted to keep going and then these expenses kind of came up and we were like we really can't put this off anymore yeah so that's where i was kind of conflicted i wanted to keep going and have that rush of like i want to be standing there yelling

yeah but you gotta get the thousand first. And the way that this is going to go quickly, do you guys have every dollar? No. Okay. You need every dollar. We'll make sure that you get the information before you get off the call from Christian, but every dollar is going to allow you to plug in your income. And then you plug in all of the things that you're spending money on and all those different line items. And then you're going to be able to see, okay, this is what we're spending. You're going to have a visual of what you spend, which will help you to see, oh, gosh, that's way too much. Like you might look at your grocery budget, your food budget and go, that's far too much. You might look at what you're spending. Do you have kids?

Yes. What you're spending on the kids and go, oh my gosh, we've got to cut this back. So really getting that on digital paper and being able to see is going to give you guys guidance for what you need to do next. And I'm with Rachel. Instead of just kind of saying, well, whatever's left, that's what we'll put on the debt. Decide, here's the number we want extra. And that's what we're going to go get because we want to be debt free by X date. And you guys really happen to this timeline instead of letting the timeline kind of just happen. Yeahander because that's what's exciting julian i mean tonight you and your husband sit down and and maybe you have done this but map out all the debt and just say okay how if we had you know three thousand extra a month or whatever two thousand yeah because i mean you guys make great money so i think you can find some really deep margin you know how fast would we pay this

off okay maybe we can do a little bit more maybe that's not realistic let's back it up a little bit but have some fun with that timeline and again like jade said which is so smart let you got you guys be in charge of the timeline not the timeline just happening to you and and jillian as your friends as your girlfriends jade and rachel are here to say you ain't gonna be living like you've been living yeah so no the lifestyle has to be cut it has to so i mean you're gonna see what you spend on groceries and it may be nice and convenient but if you took what you spent on groceries to throw out the debt like you're gonna you're gonna fly through this so much faster but it's gonna take a level of pain

that you guys may not have felt recently because you've continued that lifestyle even when the job was like iffy the last two years right so so this is good this is grown-up stuff and this is saying hey we got ourselves into this but we can get ourselves out and we really believe in you we talk to people and I love your enthusiasm because again we do these debt-free screams and we talk to people and we hear oh my gosh they made that and they paid it off in no time and they're free from it you know if you just didn't have any of these payments it's a it's a really beautiful thing and the pain is good the pain when you feel that it's kind of like that ouchy moment like you touch the stove it's hot you're like oh and they're like i never want to do that again right and so you going through the pain of like rachel

said living on 80 000 when you make 160 you're never going to want to put yourself in that situation again when this is all said and done. And that's where we see, Rachel, that lasting behavioral effect change. Yeah. How does that sound, Jillian? Thank you. It sounds doable. Thank you. Good. Yes. Thank you so much. Absolutely. We'll stay on the line again. Christian will pick up and we'll give you a year of every dollar premium because I think the budget for you guys is going to be a really big thing. You know, we talked to some people and, you know, their expenses, I mean, they're down to nothing. I mean, they're paying for some food and keeping their lights on

and rent and it's an income problem. But you guys, it's not really an income problem. You're making 160 and fabulous, wonderful. So let's take that power and, you know, do something on the other side of the equation, which is the expenses. But it's not fun. And, you know, Jade, it is a psychological game in a sense because going backwards, no one wants to go backwards. It's not easy. No.

So when you're used to living a certain way and to say not forever, but for 18 months, we're going to pull back and you can do anything for two to three years. I mean, you really can. So we're cheering you guys on, Jillian. Thanks so much for the call. Thanks to all the guys in the booth to make this happen. Jade, thank you. Always fun. Always fun hosting. Thanks to our studio audience that was out there earlier in the show. And thank you, America. Remember to take control of your money and create a life you love. Take care.