The Ramsey Show - App - What To Do When You Feel Stuck in Debt (Hour 3)

Episode Date: May 1, 2023

Jade Warshaw & Rachel Cruze answer your questions and discuss: "Should I leave my teaching career?" "Should we move to a different school district for my son's wrestling team?" "I'm feeling stuck and can't get out of debt" "Should we invest the settlement from a car accident?" Selling the house to pay off debt faster. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

МУЗЫКАЛЬНАЯ ЗАСТАВКА МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am your host today, Jade Warshaw, Ramsey Personality, and I'm joined by fellow Ramsey Personality, Rachel Cruz. And today we're taking calls about your life, your money. Give us a call. The number is 888-825-5225.

And with that, let's go straight to the phone lines. We've got Sabrina from Huntington West Virginia what's going on Sabrina hello hi um I just had a question mine is about career changes um I'm currently a teacher I've been teaching for about 11 years in the public school system and um and looking to possibly change careers based on low wages. They've like, honestly, we just got a raise and then they raised our insurance enough to get rid of our raise. The first raise that we've had since like 1980. Shoot.

So I'm looking to see like that's going to really take a hit to our budget even without, you know. So I just didn't know, like if it's at 40 years old, is it a good idea to change careers completely? I basically did that. If that makes you feel any better. I did. I'm not 40 yet, but I'm 39 and I switched careers. I just was like, we're doing something different now. So can it be done?

Yes. Is it easy? No. And do you sometimes question yourself? Yes. But I think for you, it starts with figuring out what else that you would want to do. And figuring out what else you're good at. And do you have an idea of what that might be? I'm definitely a service oriented person. I'm serving kids and families mostly. Um, I've looked at a couple of positions, uh, locally that are not really in that field. Well, it's through like the VA medical center, um, that I would qualify for, but they're

serving a, you know, a veteran, um, but it's more clerical work. So, um, I mean, it's something definitely I could change if I could get one of those positions. That would be something I could see myself doing. How much of a pay raise would it be, Sabrina? Almost double. Almost double, yeah. Interesting.

What does it take to be qualified for that um I mean a lot of them I qualify for just by having a I have my master's degree but some of them are just looking for somebody with a bachelor's degree um and not really in any experience so when I started looking at income and I like teachers have never been in it for the income you hear that cliche yeah in it for the outcome not the income but But my budget and my family, you know, it's like I can't keep doing the same thing. Does it require a move? No. No, and some of them are actually fully remote.

So I would be at home. Oh, wow. So that would even be different as well. My youngest is starting a private school in the fall, and being able, like, not having to worry about getting him to school and things like that, I would be able to do that easier, I think, as well, with a different position. Sure.

I do enjoy teaching, and I enjoy the school. I've been at the same school for 11 years. So, you know, it's hard to leave those kids. But in the same attitude, it's like it's so much harder and harder to teach. Yes, totally. Physically, mentally. Yeah, yeah. And what's so, you know, yeah, on that side of the coin, I'm like, you know, my kids are in school. My daughter's in the second grade and every teacher she's had in a public, you know,

we're in public school here outside of Nashville. And they're just incredible. Like the teachers are just, they're such a gift. The service they do, their heart for these kids and all of it. So I hear that in you, Sabrina, on that end. So like, I want to applaud that and hold teachers with such esteem because they play such a crucial role. But then also in the same breath, too, as I'm talking to you, Sabrina, as a whole person, not just a teacher, but as a mom and a wife and all these other roles, who you are and what you guys need financially to support the kind of life that you want and that even your son starting a private school like all those things come into play of hey here are our expenses and here's just the math here is the reality of what

we're at and sometimes you have to make those hard decisions and it's not saying that um you know that it's it's it's right or wrong to leave for the money but i think there's a point that it's like i have to support my my family i I had a friend, he was a teacher, and they had four kids. And it was to the point that he was like, I can't. And she was a stay-at-home mom. And she was like, I just, we can't live on this. And so that's the sad reality. And so I think that's probably kind of where you're at as you're holding both of those. And both can be true, Sabrina. Both can be true that you loved what you did, but that same service-oriented heart that you have in the classroom can be put in other positions in the marketplace in other ways that you can still have that same outcome for you because that isn't who you are. Obviously, you've done this teaching job for 11 years.

So to keep that as part of you, I think, will be really important for the health of the outcome and the joy that you have in your next job is to kind of keep that same spirit about you. I agree. And the other thing about this, Sabrina, is teaching's not going anywhere. So if you transitioned out of it, that's a great point. And you transition to this clerical work at the VA or whatever that looks like, and you just became empty inside and you're like, I hate this. I've got to go back to teaching. It would still be there waiting. Or maybe you decided, hey, I'm going to do this job for the next decade while my kids are this age and while things are very expensive. And then after this, I'm going to go back to teaching. Like you've got a lot of options to sort through. But other than that, it's like what's stopping you from starting to apply for some of these jobs yeah yeah that's true the only other thing is um a little i have a i do have my master's and that's

where i have do have student loan debt from that and so it's like i'm ashamed that oh i'm going to leave this position after i've had oh oh on this degree bill no that's a lie no don't do that i'll say majority of people don't use their degree, Sabrina. So you're not going to be the first. I left my degree. I feel this, Sabrina. I'm with you. I'm like, look, pivoting at almost 40, it's not easy, but you can definitely do it, especially

and I feel you on the, but I got my degree in this and I spent all this money. When you said that, I felt that deep in my core. So I understand that, but I think you can do this. How much student loan debt do you have, by the way? 50,000. 50K. Is that the only debt you guys have? We have a little bit of consumer debt besides that. We're working, we're in baby step two.

We've actually been able to pay off two credit cards and a loan since January. Way to go. Oh, great job. We'll be debt-free except the student loan. And we don't have a mortgage either, but we should be debt-free by January. Oh, way to go. If we keep on what we're doing.

That was another thing is like, you know, we're using all this money right now to make sure we're paying everything off. Yeah, that's great. Yeah. Well, if you ever do step out and take a higher paying job, Sabrina, just the lifestyle creep is real. So make sure you are disciplined with that double the salary.

That is true. However, if they're debt free in January and they've got all that income back freed up, I wonder how she would feel about teaching after that point. Because now there's more money available. That's a great point, too. Ooh, that's a great call, Sabrina. Think that through, too. I just threw another little curveball in there at you.

But this is, you know, this is it. You can pivot. You can change. You can have an act, too, whatever that means for you. You're capable of more than what you ever imagined. This is The Ramsey Show. Hey, you're listening to The Ramsey Show. Thanks for listening to us, guys.

If you want to talk on the line with us and have me or Rachel or both of us talk to you about your situation, you can do that. Give us a call. The number is 888-825-5225. And we'll try to be nice. You know, for the most part, I think that we, you know. We are nice. I feel like we tame each other down a little bit. Yes, we're great. You know, tough love, kind love.

And with that, I am told that there's something that we all need to see. And I'm trying to remember, James, if I've seen this video or not. Or is this just going to be a clean reaction? Rachel sent this to me, so I don't know if you've seen it or not, but Rachel's seen it. Yeah, I saw this a few weeks ago. I think it was just funny. I think it's like this comedian talking about mortgage rates and mortgages. So here, check it out. All right, let's see it. I've been paying my mortgage, but according to this, I haven't even made a dent. My original loan was $240,000. I've

been paying my mortgage for six months and I still owe $239,000. You see why that would piss me off? So I bought a $300,000 home, but in 30, this is going to cost like $1.8 million. Is this escrow's fault? I don't know what that is still. So I just kind of blame it on that. That's fine. If you want to blame an escrow, you can. Okay. I hate that guy. They say the rate is fixed. Do they call it that because it feels like I'm being neutered? Oh gosh. I know people were sending me that. I was like, that's funny. Cause it is funny. It's just how it feels when you're paying an interest and you're just like, oh my gosh. Yeah. And I mean, I'll be honest until you buy a house. I think there's so many unknown fees and things that you don't know about until it gets there. And then you're like, oh, I got to pay this too. Yeah. It's all wrapped in there together.

And yeah, it's, yep. It can be a lot. I remember what's the fee. Oh gosh. Off the top of my head. I'm not even remembering what, when, when you're going to buy the house and it's like, you're making good on not your down payment, but like that little piece, it starts with an E. Gosh, I can't remember what it's called. It's it's like yeah do you know what i'm talking about yes it's a lot of money though and you have to like it's like customary to put this money there i don't remember what it's called no not escrow sam is trying to tell me in the i can't remember what it's called but there's so much money that you have to pay it's like all right there's the down payment and then there's this money and that money and and there's this and this. And then there's this money and that money.

And there's this and this and this and this and this and this. And then you get the statement, earnest money. Thank you. Earnest money. Y'all, I'm out here sounding like I don't know a thing. But I'm telling you, it's earnest money. And sometimes it's like $10,000, $20,000. Yes. Cash money.

That's the hard thing about real estate. Again, as we were talking about homeownership, it's the american dream it's the thing everyone wants and it's a and it's a great part of your financial picture but man it it can be such a downer when you're not financially ready and that's why we always say it's these surprises that come up yes within the mortgage process and everything associated with it but also just homeownership in general when something breaks. Yeah. And you're the one that has to pay for it

and you have to put your money there versus doing, you know, you gotta save it for something else. So you just feel the pinch and the pain when it comes to homeownership, even though it's great. But when broke people buy a house, we always have to say, make some broker. That's right. Real estate brokers, because it adds on the stress. It does not give you the peace and the blessing that you think. So being

in a position for home ownership, when you don't have debt, you have money in the bank saved for a rainy day. You just have yourself in a good position and a good down payment. All of those things, that formula just sets you up for this to be a blessing, not a curse. Not to mention the move. The move itself is expensive. Yes, all of it. Just the move. And, you know, I was talking to Sam and I were talking about this because all the stuff that's circulating about the new format structure for the LLPAs and all that stuff that's been

in the news from the Biden administration. You know, it's I think that I feel like people are really high strung right now. And I'm not saying there's not cause. Interest rates are higher. These new fees are popping out. But there's something to be said. And I think a lot of folks have forgotten, especially first-time homebuyers.

Real estate is a ladder. Sometimes you come in and you start on that bottom rung. And I really do feel, Rachel, that because of HGTV and social media and all these things I feel like a lot of times first-time homebuyers feel like this pressure like I can't come in at less than half a million and I'm like you might need to yes you might start out with a condo like there's you might have to start at the bottom and work your way further up that ladder build up some equity then sell and then take that and roll it over into the next house. You know, and that's kind

of how Sam and I started our first house, you know, we rented and then we saved for a long time. And then we had our first house and then we rolled that into a little bit of a nicer house. And that's kind of how it works. And I just think that it's worth taking the time to do it and do it right. So that all those things that you're talking about, the fees and the moving and all of that, that you can do it. And it's something that's enjoyable and it's a blessing and it's not a burden. That's right. That's right. Yeah. And the expectation of owning a home and when to own a home and the type of home, just making sure that it's not all out of whack. Because, again, I think the normalcy bar of what life says is unrealistic, right?

I mean, people graduate from college and like, I should get your first year married. It's like, I should own a home. I should own a home. And it's like, but if you're not in the financial position, then no. And the type of home, to your point, that you may own as, you know, just starting out, your starter home, that's why they call it a starter home, is going to look different. It's not going to be your parents. Yes. We think that we're automatically going to have our parents' house and our parents' your starter home that's why they call it a starter home uh it's gonna look different yeah it's not gonna be your parents yes we think that we're automatically gonna have our parents house

and our parents cars and our parents salary and it's like no bro it took them a long time to build that up that's right and it's okay for that so just a little two cents there on that whole situation but yeah i digress let's take a call let's talk to Danielle. She's in Canton, Ohio. What's going on, Danielle? Hi, guys. Hi. How are you? Good. How are you? Doing good. How can we help? Yeah, so I'm kind of in a predicament right now. I'm very high anxiety right now.

Our house is up for sale right now. We just built it, um, in 2018 and we love our home. just got a cash offer for 480,000. Um, and now we're having like cold seats. So my son is going to start junior high this year, um, the new school year. And he's into wrestling. Like we're really, really into wrestling. Um, we take him to wrestling clubs. He does, like, private lessons. He goes to the gym.

Okay. Keep going so we have time to answer you. Okay. So living here, it's just costing us too much to have him wrestle. So if we stay, we've got to really, like, cut back the wrestling. He can't pursue it. We're thinking about moving to a different school district. So he's close to his gym, his club.

It's a more intense wrestling program at this school. But, you know, we're looking at other houses on the market. Like we can't afford to have the same thing that we have with the interest rates that are up. The new Biden thing. And I'm just starting to have cold feet. Like, is this stupid? Are we moving for a sport? Like, is that financially, you know?

Yeah. Well, I mean, it sounds like at the end of the day, if you choose to move, you've got to be able to afford where you're moving to. If you can't afford it, you know. Or it may not, or you're going to have to downgrade is basically what you're saying, Danielle. And so it may not or you're gonna have to downgrade is basically what you're saying danielle and so yeah you're gonna have to downgrade yeah so as a family i think that's here yeah i think as a family you and your husband he doesn't need to be your the fifth grader doesn't need to be making the decision you and your husband need to look at

your financial picture together and as a family beyond the financial picture and say hey what do we want our life to be structured? Some people, right, on the sports category, they go all in and they're gone every weekend. They're doing travel sports. And that's what they choose to do. Other families say, no, we're not going to allow that. We're going to put boundaries. They can do rec league, but we're not traveling every weekend. So we're going to put because not because of money, but just time with family. It's a value, right? So you guys don't need to let his wrestling be the thing that is driving all these decisions. You guys as a family need to be driving these decisions.

So Danielle, I would get on the same page with your husband on how much this wrestling is going to be a part of your life because there's going to be no break pedal when it comes to kids sports except for the parents. Society's not going to break it. Coaches aren't going to be a break pedal. It can go out of control. And again, it's not a bad thing, but if that's what you choose to do, but you guys need to make a boundary for your family and say, hey, what do we want our life to look like time-wise with this wrestling?

And what does this look like financially for us? Are we okay downgrading? Because if you say, yeah, no boundaries with the wrestling, all in, we're going, and we're going to downgrade the house and we're going to do it. That's great. That's what you guys are choosing to do. But I don't want you to look up and say, well, we made a financial decision based on a sixth grade sports that he doesn't even want to do in two years. So again, you just need to create a higher level boundary conversation, Danielle. And I would recommend you and your husband do that tonight. This is The ramsey show what's going on guys you're listening to the ramsey show i'm your host jade warshaw joined by rachel cruz give us a call the number is 888-825-5225 now here's the thing there is some very very very weird stuff going on in the labor market

and it is crushing small business owners they've had to deal with the great resignation they've had to deal with quiet quitting and a lack of skilled workers it has been absolutely relentless now to put this chaos into perspective we've got political economist nicholas eberstadt who's found that in the recent seven who's found that in recent years seven million able-bodied males have left the workforce and have not come back seven million am i reading that's crazy hold on i gotta say that again seven million able-bodied males have left the workforce and had to come back that means that y'all are what are y'all doing are you at home are you just chilling are you sitting on the couch the wife has gone back to work i don't know that's interesting i want to know more about this well

here's here's our chance it sounds insane and it's not okay this mass exodus of workers is changing what work looks like in America. And I've heard Ken talk about this. It's it's a lot of folks don't want to do the type of work that's out there, which is. Oh, interesting. Yeah. Yeah. And so it's a huge contributor to the labor shortage shortage. Gosh, that we find ourselves in today. We need workers, guys. So we're closing out Small Business Week with an event that you cannot miss because business owners need to know how to make it to the other side of this mess. So this week on Thursday, May 4th, Dave Ramsey is gonna be teaming up with Mike Rowe

and five best-selling authors and experts for our America's Labor Crisis livestream. They'll talk about the state of work in America today, including the facts behind this labor crisis. And they'll give business leaders real solutions to help them deal with the hiring challenges that they're facing. So you do not want to miss this. It's a free live stream. And if you're local, we still have a few seats that are left for you to attend this event in our brand new event center. Hey, that that's amazing so you can register by visiting

ramsey solutions.com slash labor crisis that's so interesting jay and i so wonder i haven't read that yet and so i'm like i i would be so cute i would be curious i would want to i might listen to the live stream to see what yeah to see what they talk about because i'm like you know covid changed a lot it did it did. And I think families are changing. You know, what it looks like from the 1950s picture of the wife staying home and the man goes off to work. Even the family dynamics in America are changing. That is true. And dual incomes is still a huge thing.

So I'm like, I wonder if it's the type of work. Is it the family dynamic, the way that's changing in America? Is it that, yeah, there's that people think that they're above certain jobs, so they won't go and do certain jobs because of that? Is it, you know, I'm like, well, I would be so curious what, where that stat. You know, it also makes you wonder with COVID too. I think there could be a lot of like, I remember talking briefly to Dave about this, you know, COVID told a lot of people that they weren't essential and that they didn't matter. Yeah.

And, you know, maybe you were in a job for however many years and then they told you laid off and yeah, they told you don't matter anymore. Yeah. That's not true. Right. But you know, that can, that can mess with your psyche. Right. Right.

A great deal. Yeah. Oh, that's so interesting. Isn't that interesting? Fascinating. That'll be a great live stream. You are needed. And micro he the dirty jobs oh yeah and it was just so yeah he's he's so great and so i bet there's a level of that of you know certain parts of the workforce the labor force that maybe are you know more physically yes strains versus like a typical

just office job right like what how that's even shifting but there's so much dignity in those jobs and we need people to do and that's what i'm wondering and what's what's interesting too and i'd be wondering what ken says i have so many thoughts where you know even trade school is starting to grow even more massive and and i think that people are waking up to the idea that, gosh, a college degree, is there really an ROI in spending all this money for a degree for college when I could go and be a plumber and own my own business and make great money doing that? You know what I mean? So the trades, I feel like, are kind of having a comeback. That's true.

From things I've read, too. So I'm curious how that plays into. There's a lot. I'm thinking of another side of it. What? Now you got me we're not on the event we're just we're just speculating here of all the reasons people might be leaving the workforce my other thought is during covid people could work from home

yeah and then they got used to working from home and then it's like hey come back and it's like wait i don't want to come back oh yeah i was able to make the same money from home what are you going to give me and if those offices aren't like we're not raising your pay we're not doing this it's like well I'm gonna do something else yes oh man you know what I'm gonna go to this I'm gonna go live in person I'm not gonna do the live stream I'm gonna be there to learn let's take a call let's go to Ryan or Brian I'm sorry, in Minneapolis. Minneapolis, Minneapolis. I can't say it. Minneapolis, Minnesota. Help me out, Brian. Good afternoon, ladies.

Thanks for taking my call. Absolutely. How can we help? No problem. So a little bit of pretext. We'll see you when it's stuck, me and my wife. We're currently on baby step two. I'm a full-time IT guy.

She is a part-time CNA or, you know, one step below an RN in the nursing scale. Flip that in terms of schooling. She's a full-time student. I'm half-time. And we're just seeing like every time we get to a point where we can pay a debt off, instead of being able to roll that money in the snowball, we have to put it towards something else. All of our bills are constantly shifting. And we're just feeling like we're kind of stuck in this puddle of never being able to get out of Baby Step 2. So you're both still in school, whether full-time or part-time. Are you cash flowing that school? No, I am not able to. She is. She's going to community college. But my four-year that I'm working on, my bachelor's, I'm not able to afford

to bankroll it. Okay. So we're in baby step two. Can you go through, kind of list out your debts? Let's go through the whole picture. Let's go through debts and incomes and see what's going on. Sure. So prior to meeting me, she bought a $20,000 brand new off the lock here. We have paid for that mistake every day since we got together, but we have another 2K left on that. I have about 7,000 left in credit cards. She's got about two. All said and done, we're sitting at about 56 grand worth of debt between student loans, her car loan, a couple of credit cards, and two hospital bills. So 56,000 all rolled into one.

Correct. This is even when you finish your school. So that's pending any other money I have to put on student loans at this point okay so there'll be more student loans when you're done correct okay and the reason that so the time frame versus uh bankrolling this is steve has talked about and everybody everybody else on ramsey network is the fact that the degree i'm going for puts me in a position for federal law enforcement. And unfortunately, there's a timeframe on that. If I hit a certain age, I no longer qualify.

So that's the sake of the time crunch. Okay. And you don't know what the total amount is going to be yet? Or do you know? At this point, I would wager about $25,000 more. Okay. And how much do you guys make? Average income per month is about $3,600.

$3,600 a month? Correct. Okay. And that's not including any side hustle. The side hustle even is kind of all over the place. Right now, I'm doing Instacart, so I'm trying to make a little bit more money that way. But it varies so much based on availability of orders and all that other stuff sure how much a month roughly would you say you

make doing that 300 on a good month how much that's probably one of the three hundred dollars a month can you speak directly into your phone we're having a hard time hearing you brian sure it's three dollars a month there yep i i didn't hear you again one more time and then we'd three three hundred dollars a month three hundred a month okay well yeah i mean you guys you're i mean you're taking home about 40 a year with 56 000 in debt so yeah you probably are feeling it um and feeling stuck and And so something does have to shift. And I don't know if that's her pausing her school, Brian, and going to work full time. I don't know if that's you saying, hey, I know there's a time crunch here, but I'm going to

pause for 12 months and come back to the school and go work somewhere full time to get this debt under control because I mean yeah I mean you guys have I mean more debt than you're making a year and I know that's not going to be forever because you're going to be out but you're going to also be having another $25,000 in debt so yeah there you're not going to make much progress with the current formula you're you're living on so something's got to change and I don't know again if that's her pausing school and going in full time but you probably won't make much progress unless you get your incomes up. That's the key. There's a major sacrifice that's going to have to take place. You're

going to have to get your income up. My guess is your expenses are already down. So here comes the sacrifice. It's time to make a cut. This is The Ramsey Show. You're listening to The Ramsey Show. Hey, thanks for hanging out with us. I'm your host, Jade Warshaw, joined by my other host right next to me, Rachel Cruz. And man, we're having a good time. We have enjoyed your calls. If you want to call and talk to us, we'll talk about whatever's on your mind. Just as long as it has a little something, something to do with money. It could be careers. It could be relationships. Whatever that is, give us a call.

The number is 888-825-5225. We'll talk about your grocery budget. Whatever you want to talk about, we're here for that. And before I go much further, thank you, James. Sometimes James talks in my ear. He said, don't forget the scripture. And I won't. I would never forget the Lord, James. Scripture and quote forget the scripture. And I won't. I would never forget the Lord, James. The scripture and quote of the day, he says, fear not for I am with you.

Be not dismayed for I am your God. I will strengthen you. I will help you. I will uphold you with my righteous right hand. Isaiah 41 10. Love that. And then we've got this one from Joanna Gaines. I love Joanna Gaines. She says, don't quit. Don't give up. The reward is just around the corner. And in times of doubt or times of joy, listen for that still small voice. Know that God has been there from the beginning and he will be there till the end. So good. Joanna Gaines quote. Well done, guys.

That was good. I felt like that was just for us. That was perfect. Love her. Love her. Well, let's see what Corinne is talking about. She's in Kansas City, Missouri. What's going on, Corinne?

Hey, thank you so much for taking my call. You're welcome. Thanks for calling in. So my son and I were in a small car accident a few weeks ago, and we are both receiving a small settlement check, and I was curious if it made sense to invest my son's check, and if so, what are my options to invest it to where he could not only use it for college, but trade school or if he wanted to start his own business,

or basically just not pigeonhole him into college, if that makes sense. Yeah, I'm so sorry. Is everyone okay? Yeah, we're good. Okay, gosh. And how much is this settlement going to be? $1,000. $1,000. Okay. Are you both receiving money or just your son? We both are.

Okay. And is yours $1,000 as well? Yes. Okay. So $2,000. And how old is he? He is nine months old. Oh, man. I'm so glad you guys are okay. I know. That's scary. My goodness. guys are okay i know that's scary my goodness um i mean honestly i mean it's a thousand dollars

so i would for him i mean even just open up just a high yield savings account i mean you could just do something just to have the cash on hand because i just think for him going you i mean you could go down the road of like doing an UTMA, which is a Universal Transfer Minors Act, which causes you to put a mutual fund or a type of investment in his name. And you could go through all of that if you wanted. For $1,000, I don't know if that'd be worth it.

I almost would lean towards just putting it in a high yield savings account for him. And you're doing it not really as like a quote unquote investment, but it's just having that cash available to him because as he gets older and i think about it 16 for a car heck yeah um yeah if he wants to use this money later i mean you know it it could make money in the market if you wanted to open up a mutual fund stuff i mean that's that's a lot to do but you could uh but you also could just have that cash available for him something that you

could get too easily and even i mean i mean i would even be okay that it's like yeah if um i don't know what would come up for him younger than 16 i mean a car is the biggest purchase i can think of but if there's something else that happens that you're like oh yeah we could use that money uh for him in this way uh it's just available to you more. Would you go through opening? I might. Here's where my brain's tracking. I'm thinking two things.

I'm thinking if she's thinking about college, but we're not quite to like the 529 or if she wanted and she's maybe you're, I don't know what baby step you're on. Let's say you're on baby step four and you're already in the habit of investing or you kind of have a thought for that. You might throw it in a brokerage or you might throw it somewhere where it's like growing a little bit more than a high yield. Part of me likes an investment because then you can't just pull it out if you hit on hard times or like something pulls

up. But then, because ideally my thought is like, I don't know that there's a wrong answer here. I don't know that there is. Because are here. I don't know that there is. Because are you familiar with our baby steps, Corinne? I am, yeah. So what baby step are you on? We are on two, just in a holding pattern. We only have student loans left. And right now, they would be theoretically forgiven.

And so if they are, cool. And if not, then at that point, that decision's made. We have the ability to go ahead and pay them off. Oh, that's great. And when you're saying that they're going to be forgiven, is that through the Biden administration or everything that's been going on in the news? Or the public service thing? Right, so if it's the Biden administration, so if it comes out they're not paying those, then we'll pay them at that time. Yeah, okay, I would go and pay it.

If I were you, it's probably not going to happen. I mean, I wouldn't wait on them to become debt-free. So if you have the money, I would go ahead and do that. And then for your son, yeah, I think you're right, Jade, as you were talking. I mean, yeah, it may be worth looking into opening up, yeah, a brokerage account or even a Vanguard or doing something that you can just put some money in

and let it grow some with everything being up and down i just don't want you to i want you to run the math out on it because i think sometimes we talk about compound interest that is very real yes but it's also like it's not going to be a million dollars when he's you know what i mean like i think sometimes we can inflate that idea so run some some numbers and just say, yeah, for 12%, over the course of 18 years, what is this going to be at 18? And that can be a really nice gift to give him. So yeah, I'm changing my answer. I'm thinking that or even if she just wanted to go ahead

and just throw it into a 529, maybe she's not there on the baby steps yet to continue to contribute to it. Yeah, well, she said she didn't want to do education. want to do education oh that's right you did say that i'm sorry so i wonder yeah if it's a brokerage type account or a vanguard kind of thing and index funds or just something that's like really simple yep that you um that you're not looking at this as his retirement or something that's like you know if we're talking in those discussions if it was in that language or that circumstance it would be something a lot more formal.

Yeah. But yeah, I would look into something like that. But it's a great question. And yeah, I'm so thankful y'all are okay. Yes, me too. Thank you for the call. That was a good one. I think we've got time.

Let's take another one. We've got Callistus in Dallas, Texas. I love that name. What's going on, Callistus? Hey, how's it going? Doing good. How are you? Doing good, doing good. Kind of in a bit of a pickle right now. We bought a house about six months ago, and now we're kind of left in a hole. So we're not sure if we should stay or if

we should move and rent an apartment for some time before we're able to pay off some debt, pay some cars off so that way we're in a better position. What caused you to be in a pickle? Is it that it's just too much for your monthly budget? Yeah, so long story short, when we bought the house back in November and my wife got a real good job, so we were both making real good money.

So we decided, you know what, we have about $9,000 worth of credit card debt left over. So let's, let's just buy the house now because of how the market is. Never know how the rates can be. And you know, with people buying up all these homes in Dallas, there may not be any more leftover in a couple of years. That's not true. Yeah. yeah. We know that now. But we decided to buy the house. And then after we moved, a lot of things took place. I tore my key lease. My wife lost her job.

And now where we had all the income to be able to afford the house. It's gone, yeah. So what are you paying a month in mortgage? With HOA, it's $3,750. And what's your current take-home pay that you're taking in between your wife and you combined? Combined right now, it's $94,000, but we do take out our tithes as well, so it's $83,000 a year. I mean, can you break that down for me monthly real quick? Yes, sure. I just want to see what percentage you're at with this mortgage payment, because we would say we

don't want it to be more than 25%. My guess is yours probably is, and that's why you're feeling such a pinch. And if that's the case, then we're going to have to find a way to either get your income up, lower your expenses. Only you know, is there a place in your budget that you can start cutting some expenses to get some breathing room until you guys can get your income back up? And is your wife back in the work? Is she looking for another job? Will she have?

Yeah, she's looking for one right now. And I did calculate it right now. A month is $69.16 a month is what we have left over. Yeah, you're feeling the pinch. So we've got to get that income up.'s your that you know we've got to get your wife working again if she's out of the workforce for too long you might have to consider getting out of this but in the meantime you've got to find a way to get that income up because you gotta make these payments yeah it'll have to be a quick turn for her to to get something, to make some money.

Yeah, and if this is something that's going to shift, if it's going to take a year, I would say sell it and get out because it won't be worth it. But if you think she can replace it in the next 30, 60 days, if she has some leads happening, then you guys might be okay. And there will be more houses on the market when you need them. Don't let that fear stop you from doing what you ultimately need to do and what you ultimately know is right to do for you and your family.

This is The Ramsey Show. Hey, what's up, guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramseysolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click Get Started.