The Ramsey Show - App - What Should My Financial Goals Be? (Hour 3)

Episode Date: February 28, 2024

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the phone number to jump in. I'm Ken Coleman. George Campbell joins me. Let's start this hour with Thomas in St. Petersburg, Florida. Thomas, you're on the Ramsey Show.

How can we help? Hi, Ken and George. How are you all today? We're having a blast. What's up with you? Oh, you know, just have a question about my budget, right? So I work about, on average, you know, 40 hours a week base pay. And next month is the, you know, the recalibration month for the income.

It's, you know, potential raises, bonuses, promotions, et cetera. But my question is, well, it's actually two questions. But my first question, I guess, for George is that when you're budgeting your income for the month, you do it off your base pay, correct, after taxes? Yes, so you'd base it on take-home pay that you know is coming in. Oh, okay, good. And then that's really good because I tend to, you know, overestimate and then it justifies other things. Yeah, that's scary. You don't want to count your chickens before they hatch?

Is that the old saying? Yes, correct. Because right now I'm in a position where I've got a lot of debt and I'm at the point where I'm 29 and, you know, I'm doing my best and I'm actually working. I signed up last night with a financial coach with Ramsey, I'm 29 and I'm, you know, I'm trying, I'm doing my best and I'm actually working. I signed up last night with a financial coach with Ramsey, you know, and I'm thankful to y'all for allowing that to happen. And also, yeah, because like, I'm like gazelle intense.

My family thinks I'm crazy. They think, wait a minute, what are you trying to get out of debt? You don't want a credit score? I'm like, yeah, I don't want any of that mess because, you know, I'm cash flowing my next license in my industry I work in. Good. Yeah, yeah. Instead of, I've been listening to the show for many years, and I've heard the horror stories of, you know, the good news is my license I'm going for doesn't require a master's degree,

only a bachelor's, and I'm very dedicated to what I do, and I'm able to achieve that license within three years. It takes time, but it would significantly make my income go up. What's your income today? Roughly about after taxes, about last year was a little bit lower. It was in the mid-30s. This year, it's expected to be closer to 45 to 50. That's your net income or is that gross? Net income. Okay. So as you create your every dollar budget, which I hope you're using every dollar. If not, we'll hook you up with that. You're going to list your lowest... Yes, I'm sorry.

Okay. I'm sorry. So you're going to list your lowest... Oh, I have premium, yes. I'm sorry. Okay. I'm sorry. So you're going to list your lowest estimate for monthly income. And when it changes, and if, that's when you would update the budget. And so if you do get a bonus, like you said, you're on base. If you get a bonus that month or there's commissions, you would then update the budget. And that allows you to then tackle more debt because you're in baby step two. And so the key is, can you cover your expenses from your base salary? Yes, that's correct. I can cover my expenses and fund my emergency fund to where it needs to be at the $1,000 mark for Baby Step 2.

By the end of this month, I'll be in Baby Step 2 again after I had a car repair. But I had the funds. I had the cash for everybody listening. I had the cash for everybody. I had the cash in the account. I didn't have to use a credit card to get the car repair. It was a minor repair, but they fixed it and it was a reasonable price and it was all cash. And you restocked the thousand bucks. You're back on the horse now attacking those debts. And so you're going to list those debts as minimum payments and your debt snowball, attack the smallest balance first with a vengeance with any extra money that comes in outside of your base pay.

And the key is, how little can I live on so that I can throw any extra money at the debt to get rid of it faster? So how much debt do you have? Oh, combined debt between credit cards and student loans, about $30K. Okay. cards in student loans about 30k okay but the uh but the good news is is that um i am picking up overtime hours which allows me to make extra money when they release it and i pick up as much overtime monday through friday i can in the evening to work extra hours and make extra income i love it well you're on the path man i think that coach is going to help you as well and it's a great call out to anyone out there who has a regular income. The paychecks

don't hit at the same times every month. The amounts are different. You are not excluded from making a budget. In fact, you have to make a budget more than anyone because life is so chaotic. And so the key here is to create a prioritized spending plan. That means food, utilities, shelter, transportation, that comes first. We got to cover that. Insurance, giving. Beyond that, if you have the money come in, great. We can use it towards those other goals. If not, at least you know you have the basics covered. Yeah, absolutely right. Great advice there. All right, let's go have zero debt. I've been working for the past three years and built up a good 401k. One of my buddies is moving into Atlanta and I'm wanting to potentially move out of the house, but I'm trying to decide now if I should stay at my parents' house

because luckily I'm blessed I'm able to stay there with them. There's no rush to get out or go live in an apartment with him or potentially purchase a house and rent out the other room to my friends, essentially. Do you have the money to purchase a house? Yeah, so cash-wise, I'm sitting on about just over $20,000. Does that include your emergency fund? That's everything? Yeah, so it's like $22,000, so that's everything.

Okay, so we're going to call that your emergency fund. And beyond that, you can now start saving up for a down payment, which may take a few years. Exactly. Especially in your area. Yeah, exactly. And I was looking at potentially maybe doing a lower down payment than the $20,000, but don't want to get with PMI or anything like that. I was talking to banks, just looking into it, looking at all my options and found out there is loans out there that you can go less than 20,

but also don't want to have too big of a monthly payment, especially since I'm younger. I don't want to be locked down to one spot. That's right. And Chad, you don't want to be in a desperate situation if a roommate bounces on you and you're like, oh, I got to find somebody fast. You just, the roommate needs to be like, oh, that's gravy. And then the roommate busts the toilet and then it's your problem because you're the landlord. And so you're taking on a lot of responsibility and we love home ownership. We love real estate. I think we need to pause on that. I would go rent with your buddy and take that next step into adulthood. I think it's going to be really good for your spirit. And as you're doing that, then sock money away for that down payment. What are you making a year at 23? I'm about in the 60s. I'm like 63 to 64. Good for you. Amazing. What

do you do? I'm an air conditioning technician. Oh, man. And you've got a path. I mean, you're probably going to make more money in the next three to five years, would you say? Oh, yeah, for sure. Because I'm starting to work on stuff. I would set an aggressive goal, Chad, and go, you want that house payment to be about 25% of your after-tax income before other deductions. And so that will help dictate the down payment. Don't listen to a bank as far as how much money they'll give you. They will give you an insane amount that is ungodly. Do it the peaceful way. Don't do it the bank's way. That's exactly right. And hey, the trades work, folks.

There it is. Debt-free investing. Young Chad, 23. Debt-free, 23. In the trades, going to be making really good money over the next three to five years. Oh, it's a story we need to tell more. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell is my pal and co-host this hour.

888-825-5225 is the number if you want to jump in. All right, George, have you done your taxes? I have my appointment on March the 30th. Oh, you got your set up. I've got it set up. I'm working with a pro. You got a Ramsey Tax Pro. Yeah.

All right. It just makes my life easier. I do the same. Stacey and I met with ours on Sunday. Oh, nice. How'd it go? Fantastic. David's amazing.

Painless. We meet on Sunday afternoon. He's so kind to come in. Stacey had all her questions, her notebooks, her folders. Oh, she's the nerdy one like me. I already have every document I need in a labeled folder. Yeah. I largely just sit there and listen. You're the eye candy. Yeah. Essentially, yeah. I mean, I have a couple of comments here and there. Just color commentary.

Yeah, yeah, yeah. I'm here so have a couple comments here and there. Just color commentary. Yeah, yeah, yeah. Just, you know, I'm here so I don't get fined. There we go. You know, the Marshawn Lynch press conference moment. But, hey, a lot of you maybe are just now thinking about your taxes, maybe got all kinds of questions about your taxes. You're freaking out, and we get that. We recently got a question from one of our listeners.

Are there penalties for filing a tax extension, George? There's kind of a trick question in here. So here's the deal. There's no penalty for filing a tax extension. That gives you an extra six months to submit your return, as long as you still file your extension by tax day. So you've got to ask for the extension by tax day, get that in. But here's the key. Even if you file an extension and you owe taxes, you still have to pay your taxes by the deadline on tax day. So filing an extension doesn't excuse you from making the payment. You still have to do that on time because if you don't, you will get hit with late fees and penalties. So here's how it works. When you request an extension, you have to estimate your total taxes

owed and compare that to how much you paid in federal taxes during the year to see if you have a tax bill. But if you're going to go through that hassle, you might as well just file your tax return on time. You know, you're already right there. You've already done the math. Just go through the paperwork. So you can file your taxes or file an extension with the help of tax software or a tax pro. And we've got a great website. You can go to ramseysolutions.com slash tax, and we'll help you figure out whether you should go with the software or the pros to take care of this for you. Again, that's ramsaysolutions.com slash tax. All right, let's go to Kyle in Chicago, Illinois. Kyle, how can we help?

Hey, how are you guys doing today? Great. What's going on? Hey, so I have a question for you guys. Me and my wife have recently paid off 90% of our credit card debt. We are about debt-free, and within the next two weeks here, we'll be paying the rest of it off and be able to put some of our savings. I know. Thank you guys for that. I appreciate that. So my question is, if you guys are in our situation, we have enough for an emergency fund and a little after that in case something else goes funky.

But what would you guys do? Would you try to find land to build a house? Or would you try to find something that would fit our situation better? What do you guys think? Well, the way you set that up, I'm going to go with a situation, I mean, that whatever fits our situation better. The way you said it was like either find land to build or a situation that's better for us. And so the way you worded that, it feels like that's the way to go.

Why are you considering something that's not the best situation? Well, we recently looked at some land the other day, and we have three kids. One is going to be nine here next month and the other two are one is just turned two and the other is going to turn one next month so for us like i mean we met with someone the other day looked at some land and we got price range on it it's like we could fit the monthly payment but it's like if you go on there, like how much it's going to be to build and to go on after that, it's like, oh, I don't know. Yeah. It can get astronomical when you factor in the cost of buying the land and then the construction loan and getting the builder. It's going to be a

longer process versus an existing home. The pros are, of course, you get a quick close. There's more room to negotiate. Location can be a big factor of proximity to things. You know, when you're buying land, generally it's going to be a little further out of the city. It's going to be on the outskirts. So you got to think about all of that as well. So there's a hassle factor with buying the land and building the house. A lot of people, though, that's a non-negotiable. They're like, I want land. This is my dream and this is what I'm going to do. And I can't talk them off the ledge. So there's nothing wrong with going that route, but I think, is this your first home? The home we're in now, yes, it's our first home. We owe about $100,000 left on it.

So why are you wanting to move? We're kind of cramped on bedroom space here. How many bedrooms is it, and how many people in the family? Three bedrooms, and there's five of us. Okay. So why not just move to a slightly bigger house that's in your same area? Trying to find it's the hard part. Yeah. There's not a lot of inventory because, I mean, it's pretty obvious people don't want to let go of their precious low interest mortgages while housing is very expensive. So not a lot of people

want to take on a brand new 8% mortgage. And so there's not a ton of inventory, but there's still a lot of homes being sold out there. And so I would get in touch with a Ramsey Real Estate Pro on our website that's trusted to help you with this process. And I would probably just consider upgrading in-house slightly and staying in your area versus going the land route and building, which can be a long process and you're going to be paying rent while trying to build this home. And that could be a year plus at least. Yeah. I would echo George, but I would say that I understand that the three kids, three bedrooms, it's not ideal, but I can tell you that that's all a you guys issue. It's not the kids. The one and the two-year-old aren't sitting together going, you know, I would kind

of like to have my own room, put my own decorations in there. They don't even know. I remember going back to my boyhood home, George, years and years, like two decades later. And I remember going, man, that house is teeny tiny. I thought it was massive. And I just think that it's a very natural thing. I want to say that I empathize with you, Kyle, and your wife, I get it. But I wouldn't let that push you into a build that, let's be honest, you acknowledged without saying it, that it's not a good deal. Right. And you just don't want to it's not a good deal. Right.

And you just don't want to put your family into that stress. Right, exactly. I'd rather have the stress that comes with three kiddos and three bedrooms than land and something that I can't afford. What you're asking for is you need four bedrooms instead of three. Yeah, pretty much. And so I wouldn't go like, well, we got to go get four acres in order to fit the other, you know.

I'm just going to go, what's a reasonable home in our area, in our budget, with the equity we have we can put down, that will make this work. Yeah, be patient is the game here. How old are they? All right. The kids? Yeah, how old are the kids?

They've got a one, two, and nine, I think, yeah? Yes, one, two, and nine. Good man. Yeah? Yes, one, two, and nine. Wow, good man. Boy, I just don't know what happened there. I'm thinking a one-year-old. What's the sleeping arrangement for a one-year-old versus a two-year-old? Could the one and two-year-old not be in there? Aren't they both in cribs?

I mean, the two-year-old likes to fight the one-year-old. Hey, there we go. But she's in our room. She's in our room with us. Okay. Who? The one-year-old or the two-year-old likes to fight the one-year-old. Hey, there we go. But she's in our room. She's in our room with us. Okay. Who? The one-year-old or the two-year-old? One more question.

Well, I got you guys. I appreciate all this. He doesn't want to talk about that. Hey, Kyle's moved on. He wants another question. Go ahead, Kyle. Can you guys send me one of them Yeti cups that Dave Ramsey wants? I'd appreciate that.

Oh, that he wants the Yeti cups. We thought it was going to be a really good question. I thought, yeah. They're not for sale. I barely could get one, to be honest. I had to fight for one. This just says the Ken Coleman show on it. I don't even know who made that one.

And nobody wants that. Yeah, that's probably right. But we should try selling those. That's probably right. Times get tough. The Ramsey cup, though, on the other hand. Yeah. You can always get a free mug.

Has that ever happened to you before? Somebody asked for one of these things? No. I didn't know he knew about it. That's pretty amazing. Respect to Kyle for the ask. Yeah. Yeah.

They're not for sale? Yeah, we know they're not for sale. Okay. They're free mugs. They're not the Yeti ones, but you can get a free mug if you visit us here at the headquarters. Oh, you can? I want to make that clear. Yeah.

Yeah, this is a good time to point out that we have some great folks in the lobby today. And every day, usually, we have somebody in the lobby. Come watch the show. I'll give a shout out to Wesley, who let me know. I signed a copy of my book for him. And he let me know he won the Summer Reading Challenge in the entire state of Tennessee. Wesley did? Yeah.

How old is Wesley? He got a $1,000 scholarship. Did he really? For college because of that. Way to go, Wesley. I don't know. Wesley's nine. I'm getting hand signals. That's great. Because I went, you're actually going to read this book? And got a $1,000 scholarship for college because of that. Way to go, Wesley. I don't know. Wesley's nine. I'm getting hand signals.

That's great. You're actually going to read this book? And he said, yeah, dude, I've read more than this, heavier books than this. Boy, I'm going to have to connect with Wesley. I'm a big reader myself. So there you go. I love that. Well, anyway, come see us sometime in the lobby, and I guess you get yourself a free

coffee. Just south of Nashville, Tennessee. Pretty much everything's free. The show is free. The mug is free. Coffee and baked, Tennessee. Pretty much everything's free. The show is free. The mug is free. Coffee and baked goods are free. The advice is free. The advice is free.

If you want to buy a book or something, you can do that while you're here. We appreciate your support. George and I have kids. That's true. They need to eat. I need Mia's scholarship fund. Yes, you do. ASAP.

She's growing up on us. Sweet little Mia. All right, don't move. Quick break. We're coming right back. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman.

George Campbell joins me. Thrilled that you are with us as well. 888-825-5225. Let's go to Ethan in Atlanta, Georgia. Ethan, you're on The Ramsey Show. What's up? Hey, Ken and George. Good afternoon, guys. Good Georgia. Ethan, you're on the Ramsey Show. What's up? Hey, Ken and George. Good afternoon, guys.

Good afternoon. So glad you're with us. What's going on? Yeah, so on top of a couple different things, but predominantly I'm in a unique working situation where my job gives me a monthly allowance for a vehicle. I have the ability to pay off the car if I wanted to, but I'm curious as to y'all's thoughts on keeping the car note, keeping the debt, if they're giving me money every month

to pay for the car. All right, break it down for George. So what's the car payment? Yeah, my car payment's right at about $400 a month. What's the allowance? $650 a month. Wow. And are you currently taking all $650 and putting it on the car? I have not. I just have auto-draft set up on the note. For the minimum, for the $400? Yes, that's correct.

What do you do with the extra $250? Oh, it goes into my checking account. And then it disappears into spending. See, that's the other side of the point I was going to get to with you guys. Oh, well, let's get to that. With no further ado, please. I've been very fortunate in my working career. I'm 25 and out of college, got a good job then. And I had a very stringent

budget and was good with my money, watched where everything went. And after a year of doing that, I got into what I do now, doubled my income and essentially thought, hey, I don't have to ever look at my money because I always have enough of it. And two years of frivolous spending pursued, I reached another point in my career where my income's doubling again, and I need to get my house in order so I can set myself up with this money instead of spoil myself. Yeah, that's called lifestyle creep. And you can out-earn your stupidity for a good long while, but one day you wake up and you go, this is exhausting. What am I doing? I'm just going to make more to spend more. It's not working for me. And that's kind of how I feel about your car right now.

I'm like, this dude is too successful and works too hard to be trying to make a spread off of this payment. Just get rid of it. You have the cash to pay it off today? Yeah, that's correct. How much is left on the loan? About $20,000 on it. And you have how much in savings? I put $20,000 down when I purchased it. In liquid cash, probably right around $24,000-ish.

Okay. So what's your income? Well, the past two years, it's been averaged about $140,000 in that range. Amazing. This year, yeah, I'm very fortunate and work hard for it. But this year, I very well intend and project to do $250,000, $300,000 range. That's incredible. Do you have any other debt other than this car loan? No, I don't. Okay. And so that $24,000 is all the savings to your name? Aside from investments and retirement, I have about $24, investments in retirement i have about twenty four thousand dollars in retirement

between 401ks and roth can i play some numbers out with you that might get you to pay this car off please because you're going to still get the 650 even if the car is paid off that's correct okay so let's pretend that you paid off the car today you dwindle your savings down to four thousand and then you rebuild your emergency fund real quick after that with the next few paychecks. That's a very realisticable scenario. Now we free up that $650,000 that was going to the car and to frivolous spending, and instead we invest that $650,000. All right? Correct.

And let's say you start from zero in that investment account. If you contribute $650,000 a month from 25, you said you're 25 years old? That's correct. Let's say to 62. Is that fair? Yeah, sure. I do not, but happy to. With the average return of what we've seen in the stock market, the S&P 500, let's say it's a 10% return. That's very reasonable. That's $3 million sitting there.

Just from that car allowance that you invested. Yes, that's a good point. Now, your buddy, Jeff, he decided he's just going to keep rolling that into new cars and get a new car every time and just keep his 650 allowance going to a 650 payment. He has zero in that investment account. Do you see the difference here? I do. I do very much see it. And that's what I see with a guy as successful as you making high six figures this young.

It's so easy to wake up and go, well, I have all these nice luxury toys that I'm making payments on, but I can make the payments comfortably. So who cares? Instead, I'm going, dude, what if you could have an extra 3 million that you could just leave an inheritance with, leave a legacy with, so who cares? Instead, I'm going, dude, what if you could have an extra $3 million that you could just leave an inheritance with, leave a legacy with,

buy a vacation home with, all with cash? You never have to touch debt again. That's a very, very valid point. Do you have a home? I do not. I rent. Can you imagine making $200,000 with no payments, how quickly you could save up money to buy a house? Yeah, especially if I didn't eat at night and buy expensive things.

Exactly. And so I'm going to drive this thing until the wheels fall off and have a separate sinking fund to go save up for another car in the future and always do it with cash and just pocket that allowance as long as you have that blessing. Very good point. I like that idea, and I'll un-submit that. Can I add a caveat to it? What's the caveat? Uh-oh.

Well, let's have a caveat, more of a second question. So I now change from being a W-2 employee, like I have been in the past, to now moving over to 1099. Okay. And essentially I'm a contractor for my company now, and I've opened an LLC that gets all my money. now moving over to 1099. Okay. And essentially I'm a contractor for my company now. And I opened an LLC that gets all my money. My checks are not regular. I don't get a regular amount of money. I'm in sales and I don't question the checks coming, but some months will be very, very large

and someone there might not be a check. I opened a business that have plans to pay myself a fixed $4,000 a month income to live off to hopefully have more control over my spending. Okay. Is there a strategy to that, to leaving that money in the business checking account? Or what should I do with that? There's not really a strategy. The IRS is going to see your income as your income. But if you're 1099, you're going to have to cover the taxes.

Yeah. And so that's the one thing. I'm going to do that side of things. Yeah, I would keep taxes in a separate account. And any paycheck you get, just go ahead and set aside 25% or 30% of that in a high-yield savings account. And probably do quarterly estimated payments if you're making that much money. And so that's what I would do strategically.

But I haven't heard of the strategy of paying yourself out of the LLC for this business when you're commissioned sales, but I don't see anything wrong with it as long as you're following all of the legal tax codes. Yeah. Yeah, I've got that sort of thing worked out. But I like the idea of sort of forcing yourself to control your spending by paying yourself – instead of seeing $12,000 come bank you see 4 000 you go all right i gotta live off 4 000 so exactly the thought and i've just justified my sporadic income as a reason to not budget because the headache of it in the past is knowing myself has allowed me to think i can't track my money i don't know what's going to come in each month i make enough i can just. Yeah. Well, you're wise at 25 to realize that because I see that with human behavior, Ken. It's way easier to sort of force yourself to have guardrails versus hope that you're going to make the right decisions. Yeah, I agree. And I don't know what your take is on that,

but I think getting the basics down, like going, all right, now look, here's what my basics are. Even 25, he doesn't have a lot of overhead is my guess, but still going, all right, this is what I got to cover. And I would include in those basics in his situation, he should have been including not just all of the, you know, the four walls as we talk about, but the investing, if he has no debt or the debt, you know, it's like, let's have a real plan. And then when the money comes in, go, all right, I got to do something with this. This is all auto pay or however you want to set it up. And then the surplus, it doesn't take that long to go because then you get excited about the surplus. So instead of spending the surplus, which it's fun to do, but when you start to think about what I call the surplus, that's the word

Stacey and I use, like what's the surplus know we always look at this is our this is our budget on all the things gravy on top yeah it's like what's the most what's the best thing we can do with that and that's why I love that when you make your budget in every dollar what my wife and I do is we have our expenses and once the expenses are covered anything above that we have pre-planned as to where that money's going to go, whether that's giving, a savings goal. And when you pre-plan, you're just far more likely to do it psychologically versus hoping when you see that money in the account, you make the right decision. I agree. So a budget is just pre-planning. That's telling your money where to go instead of wondering where it went, as John Maxwell says.

So check it out, everydollar.com. You can get started for free. And whether you're broke or rich, it's going to help you build wealth with confidence for the foreseeable future. All right. Don't move. More of The Ramsey Show and your questions coming right up. Welcome back to The Ramsey Show. I'm Ken Coleman.

George Campbell is with me. And we are here for you. 888-825-5225. It's time for our scripture of the day. It comes from Ecclesiastes 7.12. The protection of wisdom is like the protection of money, and the advantage of knowledge is that wisdom preserves the life of him who has it. Our quote of the day from Margaret Thatcher.

Do you know who Margaret Thatcher is, George? Just a little quick history checkup. But I couldn't tell you much about her. I'm not much of a stenographer. I just wanted to see your reaction to that. That is great. you much about her. I'm not much of a stenographer. I just wanted to see your reaction to that. That is great. Tell me about her. She's the former prime minister of England.

I was going to say Great Britain. But to be fair, well, okay, sure, we'll give you that one. If this was Jeopardy, they would have given it to me. I don't think you were going to say that. I don't think you had any idea who she was at all, which is okay. You're younger. She sounds British. Let's be honest.

Yeah. She was fantastic. She was prime minister during the Reagan administration. i feel like there's a lot of young people watching james and so this is why i'm saying this so there you go uh her quote is no one would remember the good samaritan if he'd only had good intentions he had money as well little uh interesting take there what do you think about that? Oh, I never thought about it that way. Good intention. You know what my version of that is?

And I talk about this when I speak at churches. I'll go, thoughts and prayers is great. But what if along with thoughts and prayers, you had an envelope of cash you could anonymously donate? And so I love that idea. Can we agree that we should retire that phrase? And I know people mean well. I mean, there's a lot of well-meaning people that put that out on social media,

thoughts and prayers, and it's become such an overused. We don't know what to say in times of grief. So we just go thoughts and prayers. It's all we can do. It's kind of like the combination of thinking of you. You'd write in a card maybe, thinking of you and then praying for you.

So we combine it. We go, well, I'm thinking of you and I'm also praying for you. Just thinking of you and then praying for you. So we combine it. We go, well, I'm thinking of you and I'm also praying for you. Well, just thinking of you is a little creepy. That's a fair point. You know, hey, Ken, I've been thinking about you. That's just weird. Well, when you look at me like that, it's even creepier. But if I said, Ken, you know,

I've been praying for you. That means something. It does. I appreciate that. By the way, keep doing it. Ronnie's up next in Denver, Colorado. Ronnie, you're on the Ramsey Show. Hey, how's it going, guys? We're having a good time. What are you doing?

Nothing much. Just hanging out, getting ready for my wife to get home from work and pick up my daughter. Nice. Enjoy the rest of the day. All right. Thanks for making time for us. Ronnie's chilling right now. What's going on?

How can we help? Yeah, so I just have a couple of questions. So, uh, my wife and I were currently, you know, in a position, um, where we're, um, in a little bit of debt. It's nothing crazy. We're about $10,000 in credit card debt. Um, then I think we owe like $7,200 on her car. My car's paid off, which is a blessing, so I'm very thankful for that. We have the money to easily pay it off. That's not the hard part. I guess me wanting to put $17,000 away

out of the $83,000 that we have in the bank, aside for that. You have $17,000 away out of the, you know, $83,000 that we have in the bank. Aside from that. You have $83,000 saved? Yes, sir. Why are you hanging on to this debt? We're in the middle of, our lease is going to be ending here in a couple months. And we're wanting to buy a house. It's just expensive out here in Denver.

And I just don't really know what to do. I want to make this money last, and I want to grow it. You know what's a good way to not make it last? Pay 22% APR to the credit card company, which is what you're doing right now. Yeah. What are we doing, man? Let's clean this up. There's a time and a place to be a homeowner, and you guys are so close., but we got to do things in order so that this is a blessing and not a burden.

Yeah. Um, you know, we have a really good, uh, like family, I was actually talking to him, you know, last week and he, uh, I told him, I said, you know, I can easily pay off his debt, dude. I said, you know, what would I, what do you think I should do? Do you think that'll boost my credit score? And Tommy said, it might hurt it, actually. I don't know if that's true or not. Well, credit scores are one of the dumbest things on planet Earth. And it's true that sometimes if you pay off your debt,

you'll have a temporary dip because they punish you for paying off debt because they want to keep you in debt. And so you have to play their game perfectly in order for your score to go up. Okay. It's as dumb as it sounds. So the best advice for that is just pay... Here's the advice. You have 83.

You pay down. You take 17 out of that, pay off all your debts. That leaves you with 66. How much of that would you consider three to six months of expenses? 20 grand, 30 grand? Well, our rent is about $3,000 a month where we're currently at right now. Okay. That's about nine for rent. We have a one-year-old daughter. I'm going to say 25. That's all in for all of your expenses for three to six months. All right. Okay. So 66 minus 25 now leaves you, I'm going to separate this money.

So anything beyond the 25 put in a separate high yield savings account. That's $41,000. That's now your down payment fund. You said put it in a what? In a high yield savings account. Okay. And that's going to help this money at least grow for you a little bit at four or 5% with no risk, keeping it liquid. Don't invest this money. And then now you create a new down payment goal. You have no payments in the world. You have an emergency fund. Now's the time to be saving for the house. And so create that down payment goal. That might be 60 grand, 80 grand, a hundred grand. You said you're in the Denver area. It's crazy expensive out there. Yeah, it's, you know, we're super close to our job. You know, that's why my wife and I, we both live in the neighborhood, you know, we live at. We live in an extremely, you know, beautiful,

one of the top neighborhoods out here in Denver, Colorado, but it's to the point where it definitely is pricey. So what's a house going to cost you? What's a reasonable house going to cost? To purchase? Yeah. In this area, I'd say anywhere from $700,000 to $4 million. I said reasonable. That was a big jump. Yeah, well, I forgot.

I didn't hear the reasonable part. So, yeah, what would it look like for you guys to get a condo or a townhome that suits your needs for now? I don't know if we want a condo or a townhome. I don't care what you want, Ronnie. This is about reality. You can't afford a million-dollar home. And then also reality is, you know, wanting to possibly even look at,

we've talked about moving and getting away from Denver just because of how crazy it is. I work in the education system, and I see the schooling system and how rapidly downhill it's going. And I don't know if I want to put our, we don't know if we want to put our daughter in that situation. Ronnie, it feels like we've't know if we want to put our daughter in that situation. Ronnie, it feels like we've been talking about all the wrong things.

It feels like this statement you just made is the one that we should be basing our decision on about housing, not how much in Denver we'd like or we want. It's do we even want to be there? And it doesn't sound like you do. Am I right? Yeah, not really. You know. I do and I don't. We have our family and stuff like that. And with our daughter being one, we definitely talked about moving out of state. She's one. She doesn't care. She doesn't even know where she is. She literally has no idea where she is. What would it look like to move further outside of the city

into an area with good schools that's still reasonably priced? I can get down to Colorado Springs, probably, or somewhere up north, but then I have to change my whole profession and something like that. I'm extremely happy. I like what I do.

I love what I do. I started at my company two years ago at the base job. Now I'm the progress. Well, if you love what you do, you love where you're at, then you have to look at other options for education. That might be homeschooling. It might be a private school. And so those are costs and factors we have to, but we can't have the cake and eat it too. We can't live in the Disneyland castle just because we want to. And we have to look at reality of what we can afford. And that might mean your down payment needs to be $300,000 if you want this $800,000 home. Either way, I think, Ronnie, the theme here that you're struggling with, and I'm not criticizing you, I'm just trying to help you see, you're struggling with patience. Yeah, definitely. Well, listen, welcome to the party, man.

Welcome to the human race. Okay? There are things that I'm dreaming about right now. I was just talking about it on the break with George. Guess what? I got to wait. I got to wait. I got to wait.

Life's got to cycle out. I got expenses in certain areas. And you know what? It is what it is. It's worth waiting on. And I think you need in certain areas. And you know what? It is what it is. It's worth waiting on. And I think you need a perspective change. We cannot. George nailed it.

The K can eat it, too. I don't know if young people recognize that phrase. Look it up. It's great. You can't have it all at the same time. You just can't. And you're going to have to figure that out and be smart until we get there. Great advice, George.

Thank you. I tried. You're getting a little riled up there. I did get a little riled up. I apologize. It's the cold cold brew finally hit. That's what it is. Hey, great hour. Thanks, James Childs and the crew. Thank you next time.