The Ramsey Show - App - We Had To Stop Acting Like Kids With Our Money (Hour 2)

Episode Date: October 2, 2023

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 actual amazing relationships. George Camel, Ramsey personality, co-host of the Smart Money Happy Hour on the Ramsey Networks and the George Camel with a K YouTube Sensational Show, and is my co-host today. Phone number here if you want to talk is 888-825-5225. Well, George, Sunday, bloody Sunday, to quote you too, has come and gone. The student loans, as of yesterday uh the payments

are now due not just the interest the freaking payment it just got real it just got real it just got really scary for some people really confusing for some people the uh the chickens have come home to roost as they say and not in a good way i'm not happy for anybody that's in pain uh we're here to help you the name of our company's ramsey solutions we believe in solutions not griping and carrying on uh and so one of the things that we did um is something we've never done on this show in 30 years we actually uh have in the field reporters correspondence Correspondence. Correspondence. Big word. That's a big word. I wonder if they'll want extra money. They won't get it.

Ken Coleman and Jade Warshaw-Ramsey personalities are in Washington, D.C. They've been talking to college students at Georgetown, people on the street about the student loans restarting. And this hour, Ken has Congressman Andy Ogles with us from our district here in the state of Tennessee. Andy and I are friends and were before he was an important congressman. Now he's a freshman congressman up there trying to do some good, and we're happy for that. And so welcome, guys. Yeah, good to be with you, Dave. Of course, we're in the shadow of the Capitol.

And Congressman, good to see you. We're thrilled to have you. I know that you're a limited government guy. You're here to fix a lot of that. You don't want Congress' hands in the pot too much. They've already created a big issue with the student loan crisis, with the federal student loan program. So with congressional oversight of all of the cabinets and, of course, the secretary of education, all that curious, what can Congress do? What should Congress do about the free flow of student loans?

Well, first, let me say, you know, the less government does, the better. You know, I've never seen a problem that government can't make worse. But that being said, we're in this problem because of government. So the question is, is what do you do next? And so, like you said, Dave, the payments are starting. And then just this Friday, the Biden administration has put out there another $39 billion in forgiveness. Now, that'll end up in court. And so but what they're doing is they're setting these false expectations to a problem that government, again, created.

Yeah, absolutely. So is the responsibility of Congress? Should Congress say, let's lower the amount of loans? How would they do that? What would be a tactical way Congress could do that? that's guaranteed from the federal government, then you require universities to put in so much, a certain percentage. And so what you could do by that mechanism is really kind of slow the increase in tuitions because, look, what's happened over time is the more guaranteed loans that you've had from the federal government, the more grants from the federal government, tuitions have gone up exponentially, and there's no reason for these big universities with billions of dollars in endowments to help students because they're feeding at the trough of government. Andy, I'm curious.

You and I have talked about this before just as a personal conversation but never on the air. As a freshman congressman up there, I have the gift of cynicism. So I can't imagine how difficult it is to get that group of people to do anything. I mean, as a freshman congressman, do you feel there's any possibility we stem the tide of these student loans going out? Because, I mean, the number of dollars is just flowing right at 17-year-olds is out of control. Yeah, and there's not, I don't think, a full comprehension of what's the long-term impact. Look, if you're going to be a doctor or an engineer or some of these high-income earners, your ability to pay that back is reasonable.

But if you're going into sociology or a teacher, and those are noble professions, and you graduate with $250,000 worth of debt, your ability to pay that off is near impossible. I mean, you talk about debt and income all of the time. And so the government is complicit to really putting people in a bad way. And like you said, these payments started today. That bill is now due. And there's no going back from that. I'm curious, Andy, what would it take to actually end the federal student loan program? Dave always says on the show, if it's so bad, we need to forgive them. Why do we continue this? So what would it take on the federal level to make this go away? Well, kind of, you know, the idea of cynicism, making it go away at this point in

time would be probably near impossible. But I think we could put some constraints on it, start reining in those dollars amounts and really look to the universities to tap into some of their endowments themselves. Now, that's going to my phone is going to be blowing up tomorrow from all these universities because I'm telling them to spend their endowments. But that's what it's for, right? You shouldn't let it count on the federal government to pay your tuitions, to pay your bills. And look, we're a free market society. We should be a free market society. And that's true for universities and colleges.

And that's at a time when enrollments are going down. So, again, the cost is becoming prohibitive for so many folks. Now, I'm friends with Andy, so I'm not really putting him under the spot here. But you said it's probably not going to happen. I tend to agree. But technically, could the president or is it a congressional decision to wipe the program out? Is it a vote? Is that what would happen?

It would take congressional action. And again, with divided government, divided government, by the way, can be a good thing when it's done in a thoughtful manner. Right now it's very partisan, which is unfortunate. And so everything we do is just a gunfight. But that being said, it should take, it requires a vote of Congress. That's when Biden tried to forgive the loans before it ended up in court. The Supreme Court said, no, that you can't do that. And look, the power of the purse belongs to the House of Representatives. So we're the ones that has to dial it back. And like I said, when you look at all the problems, whether it's health care or transportation or student loans,

the government unfortunately has a role in creating those problems. So what I'm hearing, Dave and George, is in order to get Congress to dial it back, we should start dialing the hotline. That's right. Start throwing some people out, putting some good people in like Andy and take back our economy and get rid of debt. So a couple of weeks into your first term, are you more hopeful, or is this a bigger problem than you thought it was serving up there? Well, it's an honor to serve. You know, we're about nine months in now, and, you know, we were talking offline.

You have 435 members of Congress, and I'm not disparaging anybody, but there's really about 40 that are the firewall from just total spending anarchy and social anarchy. And of that 40 or 50, there's 20 of us that, you know, if you look at the really tough votes, the really conservative votes, I'm not bragging, but my name's always on that list. And I'm dragging the conference to the right and saying, look, we've got to hold the line here. Look, I don't know. You know, I know this isn't about immigration, but regardless of where you're at on that policy, we've got an issue at the southern border. Wherever you are on spending, we have an issue with debt, and we've got to rein this in, period. Thanks for being with us. Congressman Andy Ogles, representative of our district here in Williamson County area in Nashville, Franklin area, and Ken Coleman serving as a correspondent as a correspondent there in Washington, D.C.

His dreams come true. Gotta love it. He's always wanted to do that. That's true. And Rachel wants to be a weather girl, and Ken wanted to be a D.C. correspondent. You make dreams come true, Dave. Make dreams come true. That's what we do here, except the weather part.

This is the Ramsey Show. George Campbell, Ramsey Personality, is my co-host today. It is book launch week around here. Dr. John Deloney's brand new book, Building a Non-Anxious Life, comes out tomorrow, Tuesday, October the 3rd. If you order it today, Monday, October the 2nd by midnight, it's $20, and we will throw in $75 worth of extra goodies, including the e-book and the audio book. It includes the nine daily choices to deal with anxiety. Anxiety is very real.

It's very real. A lot of people deal with it on different levels for different reasons. Dr. John has addressed this in a way that everyone can understand it, and there's actual reasonable common-sense solutions, not perfect and not medical answers, although sometimes there are medical answers involved, but this is more of a straightforward idea that is scriptural and is also scientific and is based in all the nine PhDs that he has. I'm exaggerating.

One more reason you get anxiety is if you exaggerate. So check it out, Building a Non-Anxious Life, Dr. John Deloney, $20 at RamseySolutions.com. Crystal is in Houston. Hi, Crystal. Welcome to the Ramsey Show. Hello. Hey, what's up? Okay. in Houston. Hi, Crystal. Welcome to the Ramsey Show. Hello. Hey, what's up?

Okay, so I just kind of feel like I'm drowning over my head, kind of like all your things say. I feel all those things. Living paycheck to paycheck and not even making it doing that. I've cut out all the extra stuff, and so I kind of just am lost and drowning. I'm sorry. That's scary. So what's your income? So me and my husband bring home between $6,000 and $8,000 a month depending on overtime and that kind of stuff. What do you do for a living? I'm a nurse.

What about him? He works in the oil field. Okay. All right. And how much debt have you got, not counting your home? Not counting my home, I've got about $55,000, $56,000 in credit cards and loans. And then my car, I owe right around $20,000 on it. And I've got student loans too, but I'm not even to the point where I can even think about that yet.

What's the balance on your student loans? It's 60, but I just got approved for the save plan. And so they're saying I'm only going to pay 24 with that. Well, that's over 20 or 30 years, so that's not a good plan. But for right now, it's giving you a good low payment with no penalties and no extra interest. Right, and my payments don't start until April. Okay, so the save plan is good for you to kick the can down the road, but it's not good for you to actually pay off the student loans.

You see the difference? Right. So at least it makes it manageable for a short time while we address some of these other things. So $55,000 in credit card debt so you guys have been married you guys have been married eight years uh seven seven almost like i've done this before yeah you got the seven year marks all over you okay yep as of yesterday so you've been hey, I've got student loan debt. I've got this car loan. Is this just your debt? Does he have debt as well, or is this household? He's got, so the majority of his mind, two of the credit cards in his name

that total about 10 of the debt. The rest in the house is in his name. It's not in mine. Okay. Is he feeling the weight of any of this, or are you kind of shouldering it all? Have you told him? No, I shoulder it all. He's got horrible anxiety, and so for me to pitch it to him just makes it worse

so for you to just hold up a mirror he goes i don't want to see it i don't want to see it he's got what stop stop he's got what anxiety he's got horrible anxiety he's working on he's working with the doctor about but um okay it just makes things worse to bring it to him. Okay. Well, all right. And so you need to know what to do, right? Yeah, I'm just, I'm lost. I don't, I'm getting worse, not better.

And I'm doing all the things and I just, I'm drowning. I don't know where to go from here. Yeah. You did a good thing with the safe and you did a good thing by calling. So you are taking action steps rather than being completely paralyzed, even though you don't see a way out. So that's the first thing. Congratulations.

A lot of people freeze like a deer in the headlights and get run over by the truck. Yeah. And not you. You're dodging. Okay. You're a frogger. You're in the middle of the road going, oh, God, oh, God, oh, God. Right? Yeah. And're a frogger. You're in the middle of the road going, oh, God. Oh, God. Oh, God. Right?

And so that's good. So we can actually help you because you're willing. You're actually willing to do some stuff, it sounds like. Okay. So the first thing is this. Let me see if this sounds right. The two of you got married and life was a party. Thank God it's Friday.

Oh, God, it's Monday. And we've had a lot of fun in the first four years of marriage then we hit the last three years uh well it wasn't exactly a party it was three kids and three and a half years oh okay there's the party okay different kind of party but all right that's good chaos chaos Chaos. Chaos. Yeah. Okay. Because what I smelled was disorganization and life happening to you instead of you happening to life for seven years. It's what your budget says.

It's what your debt says. Yes. Life doesn't really happen to me. It says chaos. And you probably used the phrase, well, we had to and we were forced to. Yeah, exactly. We had to put it on the card. We had to take out the car loan well, we had to. And we were forced to. Yeah, exactly. We had to put it on the card. We had to take out the car loan.

Kid's got to eat. I got to buy shoes. And he's not helping. He's got anxiety. Well, he helps financially. He just doesn't help. I know. I'm saying he doesn't help with his money problem or the organization part.

He goes and works and makes money. But that's it. Right. Okay. So all of that to say that what caused this was money happening to you instead of you happening to money. So we have to flip that on its head, and you become very proactive, and you're going to get extremely nerdy and organized. And every dollar is going to be under the whip and the chair like a lion tamer.

And you're going to make every one of these dollars do a dance before it does anything. And anybody who comes anywhere near your plan, they're going to get the evil eye from mom. You're going to work your plan, and we're going to get the evil eye from mom okay you're going to work your plan and you're going to we're going to develop a plan together and you're going to get in attack mode all right okay it may involve selling the twenty thousand dollar car it probably does what's the payment on that six hundred yeah would six hundred bucks really help if you freed that up yeah definitely would how much is your house payment 1800 that's not bad okay you're good okay so what when you have a detailed plan and every dollar is behaving when you work extra overtime or he does it feels good because you're actually making traction towards getting your life back knocking these

debts out rather than feeling like you do now which is a rat in a wheel yes you see the difference yes okay now what we're going to do george and i are going to put you through financial peace university it's our nine-week class we're going to set you up with every dollar budgeting app the premium one as a part of the package. And that's going to connect to your bank and help you put together a budget in the class. And we're going to show you hand, step by step by step, how to get on a budget, how to get control of this. You're probably going to get the car sold and get you a hoopty for a little while, not for the rest of your life. You're probably both working extra for a while.

And I'll add one thing to it that you're not going to like but you've got to do it anyway he's got he's got to emotionally stand beside you his angst listen let me tell you there's a truth in this anxiety is not caused by bad news anxiety is caused by no news and I know something bad's out there. People that have anxiety can face the actual fire that the fire alarm is going off on. What they have trouble facing is ambivalence, the lack of knowing what it is, like the boogeyman is out there and I don't know which door he's going to come in. But if we know where the boogeyman is and exactly what he looks like and he has a name, your anxiety actually goes down, not up. I'm not a psychologist, but I have been doing this for 35 years.

And I've watched people's peace of mind go up, not when they got out of debt as much as when they decided together to attack the debt. And so your husband gets to help you not do the bills, but he gets to sit down with you and be a man and carry his share of the weight of this problem in your household the two of you need to carry this together it is not fair for you to carry it by yourself it is not productive and it is not efficient for you to carry it by yourself it is better if the two of you do it together because once he sees that if i work an extra two hours, I can get that credit card paid off. We're going to cut that puppy up. It's gone forever. And if we keep this up in 36 months and

we sell the car, we're going to be a hundred percent debt-free student loan and everything. Once he sees that he's not going to have anxiety. Anxiety comes from a lack of hope, not hope through hard things. There's a difference. Absolute difference. this is the ramsey show george camel ramsey personality is my co-host today thank you for joining us america in the lobby of ramsey solutions we have the debt free stage on the debt free stage jamie and kyle are with us hey guys how are you hi we're great how are you welcome welcome where do you guys live we live in elizabethtown kentucky oh just up the road welcome to nashville good to have you and down here to do a debt free scream how much have you paid off paid off 158 000 and a little over five years all right very good and your range of income

during that time we started at 55 and um ended at 300 000 whoa what do y'all do for a living um during the time when we started i worked in the dental business on the business side i'm now a stay-at-home mom okay and i work for a wholesale automotive group out of based out of eatown kentucky doing what uh just wholesaling cars and it's working for you okay all right all right yeah nice job well done i like it i like it what kind of debt was the 158 it was a car loan student loans credit card and our mortgage yay look at it weird people paid for house how old are you two i'm 28 i'm 29 this is so weird not even people. Paid for house. How old are you two? I'm 28. I'm 29.

This is so weird. Not even 30 with a paid for house. Wow. What's the house worth? I just looked. About $235,000. Good for you. Excellent.

And how much in your retirement nest eggs these days? I'd say about $85,000 in retirement. Perfect. Okay, good. So you're on your way to being Baby Steps Millionaires by the time you're mid-30s probably at this stroke. Well done. If you keep up this income with no debt, it's just going to go zing, zing. We're very excited for that. Absolutely. It's incredible. The numbers are good. I like it. Very good. Fun, fun, fun. Good stuff, you guys. All right. Tell us what happened five years ago. How'd this journey start and what happened? We got married in June 2017 and we YOLO'd a lot.

Our beginning of marriage, we just spent every penny that we made, honestly. It was constantly going out with friends, whatnot. We convinced ourselves to buy me a new car. We convinced ourselves to buy me a new car. Wow. Really? I don't know who the car salesman is here. and we convinced ourselves to buy me a new car and um i remember i called my mom one night because i just happened to look up i was like we're 30 000 a little over 30 000 in debt and i'd never borrowed a penny in my life i took your class in high school and until we got married i'd really followed those principles

i called my mom. I said, I can't breathe. I really, I felt like I was suffocating. And she said, you know what to do. Tell your husband what you know and see what's going to happen. And I told Kyle and he was immediately on board. I think he was really excited for the retirement investing portion of it. But we got started. We worked our butts off.

We drained our savings, sold sold the car Kyle picked up an umpiring gig I picked up a waitressing gig three side jobs some really I mean I was like scrubbing toilets and dressing up like princesses at kids birthday parties I was really doing like not on the same day those are different side gigs okay sometimes i would be a princess in the morning and scrub someone's toilet that evening wow whatever we had to do um honestly we did it and that's pretty cool and that was the consumer debt and we followed the baby steps we got into our house in 2019 um two weeks later we found out we were pregnant which was exciting but not expected and then we just knew game on we want to pay off this house

as quick as possible we had our second son they're 13 months apart so we just kind of had to keep re-evaluating our game plan and figure out how to readjust and stay on track but but then as the income shot up the car business took off yeah it's easy to just reach over knock the house out yeah covid this is the covid mortgage-free deal here. And the COVID babies. And that was, you know, made it for a bumpy road. But it's been a blessing through it all. We've learned a lot.

And I was able to leave my job and raise my babies, which is awesome for me. That's a great why. And then for me, it was like, it's time to stop being a kid. Time to grow up. Because at the time when we started i didn't have nothing in retirement and i was like nobody else was gonna do it for me so i gotta do it for myself yeah amen amen yeah there's there's something that happens particularly start having babies you're like oh god this just got real oh yeah uh it's a grown-up time now exactly we were

very much acting like kids at the beginning of our marriage and we've grown up a lot. Wow. Well, I'm glad you caught it before you're 30. A lot of people do that and they're 50 and they go, I can't live like a child anymore. So the fact that you guys have so much of your life ahead of you with an amazing income, no payments, how does that feel? We're very excited. I think for me, it's just exciting to know that there's so much opportunity available for us and you know obviously we've we feel great that we can you know buy some new things and go on vacations and whatnot but we've been able to give some gifts above our tithe which has been really a big blessing for us but just to know that there's so many open doors you know for us because we don't have that strain of debt is that's really exciting for me so what's the first

big thing you do when you're 28 years old you're 100% debt free you're adults and you're on a game plan but you just gotta you gotta mark this somehow you gotta do something cool what are y'all gonna do cool we've done a lot of cool stuff uh we went to vegas which was something that we always wanted to see it was really fun we. We got a new deck. That'll do. We had to replace our HVAC system. That's exciting right there. That'll make you adults real quick. When you say do something cool and you say HVAC system,

that's when you know you're old, yeah. I went to Scotland on the golf trip. Oh, there it is. Ding, ding, ding, ding, ding, ding, ding. There it is. Okay. That's what I was looking for. We have celebrated a lot this year.

You deserve it. I feel that we do. We worked really hard. looking for. We have celebrated a lot this year. You deserve it. I feel that we do. We worked really hard. If you work, you live like no one else. Later, you get to live and give like no one else. Yeah. You're baby step seven. You're 28 years old.

Everything's paid for. You busted it from princesses to toilets to whatever it took, man. I mean, it's pretty cool. That's pretty important. Proud of y'all. Well done. Thank you. What do you tell people the secret to getting out of debt is you want to go first yeah i would say uh just

communicating if you're married communicating with your spouse and encouraging each other and don't let uh because you're gonna have naysayers that try to pull you down say i can't do it it's not worth it you had you had some of those i bet oh yeah yeah at the beginning yeah yeah i would say work um which is weird for me because now i stay home with my boys which is work but it's a different type um but like i said i mean we just really we just dug in and we did everything that we could to make a buck and save a buck and don't look at what other people are doing you know when or saying or saying i think sometimes it's hard for me because i i'm afraid and don't look at what other people are doing. Or saying. Or saying. I think sometimes it's hard for me because I'm afraid if they hear our income,

they might think it was easy. But we weren't making that when we started, and we never knew that that would happen. Actually, that only has come on in the last 18 to 24 months. Exactly. Of the five years. Exactly. So we started where we were.

We had a goal, and we were just just determined and we trusted God through the process. He's been a huge blessing to us to just give us the ability to work every day and to improve our lives in more way than just finances. But work your butt off. Work your butt off. Especially while you're young. Especially while you're young. You got the energy to do it. Yeah.

Well, that's where money comes from. Work. Absolutely. It's a novel idea. It doesn't come from the government. And it doesn't come from a hack, some kind of TikTok hack. It comes from work. Okay.

And you brought the kiddos with you. Yes. What are their names and ages? Let's bring them up and introduce them. One's crying. That's okay. We're going to see how this goes. Weller's our youngest.

He's two. And Eli is three. There it is. For all America to hear. Hi. All right. Can you smile right what a sweetheart all right very cool very cool we've got the uh live and hey guys we got the live and give box for you it's a baby steps millionaires book which is your future great baby the total money makeover book and financial peace university membership you can use those or give them away all All right. Jamie and Kyle, Eli and Weller, $158,000 paid off in five years, making $55,000 to $300,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Woo-hoo-hoo-hoo! You gotta love it! Man. change just like that yeah those boys their life has changed they have no idea not only have they got a mom that knows about hard work raising them that's

good boy mom right there and uh but on top of that uh it's a family that knows about doing that and that did the did the thing did the sacrifice to be able to win and you know how much money you can get from 30 on when you have no payments in the world it'll blow your mind just popping that to an investment calculator stick that in a compound interest calculator your mind will be blown you can do a whole lot of giving saving and spending with that wow and they'll go back and watch this on youtube 10 years from now, and they'll see what Mom and Dad did. That's the beauty of this show. That's exactly how it works.

This is The Ramsey Show. George Campbell Ramsey Personality is my co-host. Guys, if you want to help us out, we need your help. You can subscribe and follow the show. It changes everything. Leave a five-star review. It helps a bunch. And click the share button or share the fact that you listen to this show.

Just tell somebody. Or click a link and send it over. It helps a bunch if you do all of those because it pushes the show forward in the algorithms and causes people to listen. And then they can decide for themselves if they like it or not some do some don't our question of the day is brought to you by neighborly your hub for home services when you need to make repairs schedule routine maintenance or get local help for home improvement projects the neighborly app is your source to find and schedule reliable home service providers in your area download the neighborly app today today's question comes

from grant in Virginia. We paused Baby Step 2 when preparing for our baby to come and have had trouble getting back on track. How do we get back on track when we're still figuring out all of these new baby expenses? This one hits home, Dave. Well, George with a new baby. Oh my goodness. Okay, so they did the right thing. We tell people people hey the one of the few times to pause your debt snowball is storm or stork mode you got a baby wait till mommy and baby are home safe then continue the debt snowball after you've saved up some money so now so much better than the way i have said it what'd you say storm or stork that's not a little alliteration

going there that's very good i only can think in tweets dave anything longer than that hurts my brain apparently that one's great i like it you can have it so we're talking about getting back on track i i assume you're doing an every dollar budget if you're not that's the place i would start because you're gonna have your income and your expenses and people freak out when they have a baby dave because they go it's gonna be so much money and then you go okay we're gonna add a line item for diapers and a line item for formula i was gonna be an old boomer with grandkids and go i'm not sure what the actual cost of this small critter is it's mental and emotional and physical basis they don't eat much and diapers are expensive formula is expensive but not enough to it's not like you took on a

mortgage payment i mean it's a small amount you have to go see the pediatrician it's federal law that's true and uh i'm kidding but you have to pay their i used to say you have to pay the pediatrician's porsche payment and then i had a pediatrician go dave do you know what pediatricians make we're the least paid in the medical profession i didn't know that i didn't know that either but i guess out of all the doctors they think they're underpaid i don't know so, so either way, you got a doctor bill or two. You got a little bit of formula, a little bit of diapers. What else is there? It's not like the electricity bill went up.

We had the baby shower, so we have all the gear in the world, but here's what we do. We get hand-me-downs from friends that have already been through that phase, and we have so much stuff just from friends. So if you're not a part of a local church, get plugged into community, ask your friends, post on Facebook. I would not be buying all this baby stuff when you're not going to use it for long. So that's a little money hack for you right there.

Yeah. I guess it's like a lot of categories in our life. There's wants and there's needs. Okay. The need is food, shelter, clothing, diapers, formula, warm place to sleep. Okay. The want could be a $55,000 redo of the nursery.

Yep. Or the $1,000 stroller, which we may or may not have bought, Dave. Well, that's been happening. I can say that the Ramseys might have participated in this trend, too. But we had the money. Yes. And we're not calling up somebody about your budget being tight. That's the key here.

That's different. So if you're calling up somebody about your budget being tight. That's the key here. That's different. So if you're calling up somebody about your budget being tight, buy the $1,000 stroller at a garage sale for five bucks from the guy who just went through the last kid and doesn't have a friend to give it to. Exactly. And that's where these folks are at. They're in baby step two. They're trying to pay off the debt.

And so I would be scrimping and borrowing and scratching and clawing to not spend any new money. And for the things you do have to spend on, add a line item, and then you might have to sacrifice in other categories. Hey, we've got to cut a subscription, cut the gym membership. But it's not hundreds and hundreds of dollars a month. Trouble getting back on track. No.

You're just being lazy. You shouldn't have the mathematically trouble getting back on track after a baby is bull crap. That's what we're saying. I'm calling BS. I think there's probably you're tired. Emotional convenient spending you're not sleeping much your brain may not be working but mathematically the babies don't make that big a dent you're confirming my boomer suspicion yeah i mean as far as what we have to buy on a regular basis it's wipes diapers and formula yeah and lots of all of that. Because a lot goes in, a lot comes out.

There we go. I am shocked, to say the least. That's basically their job is to consume and expel. That's it. They got one job. They're good at it, right? Gosh. And so, spoken like a grandpa there.

I just hand them back, say, I think this one's broken. There's kind of an odor coming from this one. I think it's broken. You need to fix it. That's genius. That's the beauty of being a grandpa grandpa how many grandbabies you got now seven and um yeah and pop up papa dave loves them i love the little babies i just hand them back this one's hungry i feed them sometimes but i don't change no diaper changing this one's hungry this one smells bad and uh i think you hand it back to Rachel. Rachel, Daniel, you all need to fix this. I can't do that to my wife, Whitney, Dave.

I think I'd get smacked. No, no, I didn't do it to my wife either. That's different. That's a different position in life. I'm just saying. Can't wait to be a granddad. But all of this to say the truth is all joking and kidding aside, I'm sitting next to an expert who has a five-week-old.

I was going to say six. A five-week-old. Almost a six. We have actual case study here that the budget is not busted mathematically by a newborn. Ta-da. Okay. Carrie is in Cincinnati. Hi, Carrie.

Welcome to the Ramsey Show. Hi. Good afternoon. How are you? Better than I deserve. What's up? Well, I am in Baby Step 2. I found you in February of this year.

And the question that I have is I'd like to be able to retire without a mortgage payment. In order to do that, I need to pay an additional 10 years off. I have 17 years of work left so my concern is or my question is rather if I should put those additional 10 years in baby step two because I'm concerned about my ability to get my emergency fund built up maximize my 401k and and then make that happen with the mortgage payments. Okay you don't have 10 years of mortgage payments. You're stating this in a way that makes me think you think there's actually 120 of those payments that you have to pay. That's not true. Those payments include interest that will not be charged because you will pay it off

early. So what you have is a payoff balance you want to accelerate. Correct. Okay. So what is your current principal balance if we were to pay the mortgage off today? $248,000. Okay, and what's your household income? Just about $103,000.

Good, and how much do you have in Baby Step 2 left? $41,000. Okay, good. And you made all this progress, and you got lots of traction, and finally some excitement back since just the first of this year. Way to go. Good job, Carrie. Yeah, I've paid off $18,000 since February 25th. That gives me great hope that the 40 is going away soon, right?

Yes. Yeah. And how old are you? I'm 50. Oh, you've got plenty of time here. Working six to seven days a week. Good for you. What do you do for a living? I'm an. Just turned 50 in August. Oh, you've got plenty of time here. Working six to seven days a week. Good for you. What do you do for a living? I'm an occupational therapist.

And you're single? I am, of course. Okay, cool. Good, good for you. All right, perfect. I think we've got a plan here. So the average person that takes off with this stuff and is very intentional and careful is typically debt-free and baby step two not counting their house in 18

to 24 months you're going to follow that model you'll be done within 24 months okay okay and then you build your emergency fund and then you start putting 15 of your income into retirement and then typically what happens is they pay off their home in the next seven years after that so that model says that by the time you're 60 your house would be paid off on average normally following our stuff which only involves $24,000 a year so you'll probably actually be done before you're 60. Okay well that's great I'm terrible at math so that's okay so i'm taking 248 000 divided by 10 okay 24 okay okay 24 8 but we're not really going to be working on it all of 10 so it's more like 30 000 so but um you can pay 30 000 a year on this house or whatever it ends up being yeah and be done by then and of course

what's going to happen is your income's not going to stay the same for a decade. Right. Right. So if you follow the baby steps as is, don't try to do multiple things at once. Focus on your debt right now. It's going to be gone in less than a year, right? That's the plan. Then your emergency fund is going to take probably another six months or so.

So we're talking 18 months. You've got no payments. Now we can start focusing on investing, paying off the house. You're going to do that in six or seven years. That puts this whole thing in under eight or nine years, Dave. So what you're trying to pay off is the balance, though. It's not 10 years of payments because you're going to save 10 or 15 years of interest on $200,000. That adds up. That's a lot of money that's not in this equation.

And I think you were running the numbers that way. And this way is the truth and is a lot faster also. That puts this hour of the Ramsey Show in the books. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.