The Ramsey Show - App - What’s the Best Way To Teach Kids About Money? (Hour 2)

Episode Date: January 27, 2022

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I'm Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we talk about money, your life, your mental health, your relationships, all of it. I'm John Deloney, joined here by my good friend George Campbell. We are taking your calls at 888-825-5225. And we are waiting for you to give us a shout. The phone lines are open and the call is free. And the advice is worth about that much.

$100,000, easily. I'm going to go with free. Okay. Let's go to Gio in Phoenix, Arizona. Hey, Gio, what's going on? Hey, how's it going, guys? Thank you very much for taking my call, and I really appreciate that, guys. You got it, brother. Hey, Gio, what's going on? Hey, how's it going, guys? Thank you very much for taking my call, and I really appreciate that, guys.

You got it, brother. What's up? So, basically, I'm calling in because I'm planning to open a pool company. I've heard Dave Ramsey say that we can get the pool to acquire a company without having the financial backing, but basically working the product out or working the business out with the owner and then trying to pay it off that way.

What I'm calling in is how would I get more clarity on how would i go about it to get to that one point that i want to be and what process do i need to do as well too so let me get this straight you want to buy a business yeah so basically i want to buy a business or a pool route and basically instead of paying cash for it i've heard dave ramsey say that you could basically say hey you know instead of paying cash then you, I've heard Dave Ramsey say that you could basically say, hey, you know, instead of paying cash, then you could kind of work that one area down, so pay down the debt, or basically not include any debt of any kind, basically.

So it's more like, hey, I'll buy this business for $200,000, and I'll pay you $20,000 a year for 10 years out of the profits. Yes. Is that what you're saying? Not necessarily going with a $200 mark, you know, something more smaller that's a little bit more plausible per se. Yeah. Sure.

So what kind of money are we talking here? What's this business going to cost? So basically, I'm trying to see if I can invest maybe about five to 10 grand, maybe about maybe, I want to say maybe it would be 20 to 30 pools or anything, but I wanted to see how could I structure it so I don't get in debt and that would be a little bit more successful as well too. Well, I'm curious. Why do you want to buy a business versus just starting your own pool business?

Just because of the ease of the process. Since I do the pool business now as far as with another company, I've noticed that when you're out there and you're kind of communicating with the customer, it's a lot more difficult to kind of start something off the ground when it's a little bit smaller versus once they see the bigger numbers or they hear the bigger numbers. And that's why I'm kind of getting stuck in the situation saying, hey, I feel like I need to get the business in order to get the little customers. But then also, I don't know if I'm even going the right way about it with all this

question. Well, not the question, but that's just the uncertainty of the situation. Yeah, Gio, I don't buy that. I buy you. I don't buy that. I buy you. I don't buy what you're being told. Okay. Because there's going to be big market players, right? You're going to have the – I don't know who the big pool guy is in your town

or who the big pool company is. But there's going to be people who interface with Gio, and you do an incredible job. You come in under budget and on time. You are respectful. You clean up the area when you get done. You write a thank you note. You send flowers. People will make sure that message gets out. It will be slower, but that message will get out. Often, what debt allows us to do is shortcut that process and try to leapfrog our way to the front of the pack. I get what you're...

Are you struggling to find gigs? Are you struggling to drum up business? I can get the gigs but when uh communicating the customer the value of the worth of the product that i'm trying to give to them that's what i'm kind of struggling because uh the prices that i'm giving out pretty uh high due to the demand of it but the communication that i'm having is that i'm not making it worth the price that i'm charging and that's why i'm kind of getting messed up in the head saying do i need to get a bigger

business or you need bigger or how should I rethink about this whole thing to kind of be more successful now that you're bringing it up that way yeah now I would much rather you sit down with somebody who's going to help you and I've had to do this here okay I'm passionate about mental health I'm passionate about relational I'm passionate about people living good lives I've also spent the last 20 years with nerds, with academics. We sit around and we talk about theories and we discuss things and practitioners and what works and what doesn't. And in that over the last 20 years, I've developed a language that I use. And I found when I came to Ramsey solutions, that that language doesn't make sense to somebody

who doesn't live in that world. And so I've got folks that I've sat with and met with that say, okay, you're trying to say this, say it like that. Here's a way to communicate this to the marketplace. So I'd much rather, before you go buy a brand name, just because you don't think you're big enough or you don't think you're good enough, I want you to sit down with, I'd rather you pay somebody to help you with your marketing

message help you with your story arc of what am i trying to bring to somebody what how do i build a portfolio so that when i give somebody a price i also give them four references and pictures of before and after and i show up professionally and i don't um whatever it is right and i don't even fully understand the pool business but what i'm saying is i don't want whatever it is, right? And I don't even fully understand the pool business, but what I'm saying is I don't want you to sell yourself short just because there's a disconnect between how good you are at what you're doing and the way the customer is hearing it right now. Going into debt isn't going to solve that problem.

Does that make sense? That was my fear. And then who would I be talking to in this type of environment? Would I be talking to some type of, not an investor, but somebody that deals with business, but what section of the business would I be talking to in this type of environment? Would I be talking to, like, some type of, not an investor, but somebody that deals with business, but what section of the business would I be talking to? That's where I would get close-minded, yeah. Go ahead.

You just need to get good at sales and marketing. And so we've got resources for you through Entrez Leadership. Entrez Leadership Elite is our membership program. Our friend Donald Miller has some great books on story brand and marketing made simple. You've got to learn some things. I don't think this is a should I buy a business or not. If I'm going to buy a pool, I'm going to go to Gio for $5,000 or the big business for $5,000.

I don't see any more value because it's a bigger name. I'm just looking at the numbers here. And so you can start this business on your own and move slow like John's talking about, do it without debt, get better at sales and marketing, and then you own it instead of owing some other guy for the next 10 years and realize, I don't even want to do this anymore. I want to see you. Stay on the line, Gio, and we're going to send you a copy of Entree Leadership Book, just the art of building a business, and it's not a theory book.

It's a step-by-step playbook. Also want you to go to Donald Miller's website and check out his story brand book. He's got a new book out called Hero's Journey that walks you through what kind of life you're leading. Hero on a mission. Hero on a mission. That's right. Hero on a mission. And Dave's friend, he's in New York.

Sure. The marketing guru. Seth Godin. Seth Godin. Big fan of Seth Godin. Go read everything by Seth Godin. Brilliant. And he'll walk you through marketing A, B, and C.

Most importantly, how to tell your story to the marketplace so they can hear you. Yeah. Right? All right, let's go to Doug in Kansas City. Hey, Doug, what's up, brother? Hey, guys, what's going on? I've got a 13-year-old two-door sports car that I've had paid off for about a decade,

but I've got a 10-month-old that's getting hard to fit in here, and I'm planning on having another one, which would make this car completely unusable. And so I went looking for cars, and the used cars are outrageous, so I'm wondering, should I tough this out until I have another one and hope their car prices go back to normal, or should I just get a new car? So Doug, I'd say, George, you and I are both in the same boat here. I've got a used car that I took to a new car. So, Doug, I'll tell you, George, you and I are both in the same boat here. I've got a used car that I took to a shop yesterday or two days ago. They gave me a quote, and it's high, and I'm having the car repaired. I did buy my wife a gently used car a few weeks ago, a few months ago,

and it was really expensive, but we had the cash. But I'm choosing to repair my used car that's pretty dang old right now, and I'm going to wait until the prices come back down. So that's what I'm doing in my life. Yeah. All right. We'll be right back on The Ramsey Show. In an uncertain world, being a good steward of your money is more important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your healthcare costs. For nearly 40 years,

Christian Healthcare Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org slash budget. Christian Healthcare Ministries is a Ramsey-trusted provider.

888-825-5225. Hey, George, real quick on that last call, I know it sounded like I wasn't paying attention to what he was calling about, and I tried to tell him what I was doing with my life, and I want to make sure everybody connects the dots here, because my wife tells me sometimes my stories. You're not a good dot connector? I don't land all the planes I launch. Well, you shouldn't drive multiple planes at once, John. That's your first problem.

I know, but there's a lot of cool parts of stories. We just don't always land them all. Fair. So the gentleman called and said he's got a two-door car. I think he said he had a two-door sports car. Right. And his kid's having a hard time getting into it, right, in and out. And do we just buy something new right now or do we hang on?

And I used my analogy. If I got an old car, man, it's old and it needs some repairs. And I went ahead and paid. Normally I wouldn't have paid as much as I'm paying for the repairs, but the market's bonkers right now, right? And so what I was trying to get at is I'd ride it out. The car works. You're able to get where you're going. It is uncomfortable getting in and out.

It's a pain. Roll your eyes about it. Make some jokes about it. And actually come up with some sort of metric or something so your child can see you saving money for the next car. They can be a part of that process. And then, man, wait for the car prices to go back down if the thing's running. Yeah, it's not an emergency. And when I look at emergencies, I go, is it urgent?

Is it necessary? Is it unexpected? And this one may be necessary, but the urgency and the, you know, is it unexpected? No. You can ride this out. It's uncomfortable. Yeah, it's annoying. It's safe. It's safe.

Yeah. Nothing's going to go wrong here. And so this used car market, there's no deals to be had, and you're paying over market price. And, you know, who knows? Six months from now, a year from now, things might calm down. Or you just save up and go, all right, we've had enough. We've saved up enough. We're just going to buy a car even though it's not a great price.

Right. Because we need it. There you go. And so that's what I would do if I was in his shoes. Keep saving, and if you really, really get sick of it and you're in a good spot to just buy a car outright, then do it. There you go. All right. Blinds.com's 100% satisfaction guarantee means even if you mismeasure or pick the wrong color, they'll remake your blinds for free.

You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use promo code RAMSY to get the best deal. Rules and restrictions apply. Today's question comes from Michelle in South Carolina. She says, my 17-year-old grandson was removed from an emotionally and physically abusive home. He's now in our care. Prior to being removed, his father would keep all of the money my grandson earned at his job. Now he's worried about saving his money in the bank because he doesn't trust not having his money in his hand. What is the best way for us to teach him how to handle his money? So, Michelle, first and foremost, thank you for being the kind of grandparents that will take in an abused grandson. That's hard, and it's a challenge.

A 17-year-old grandson that's been emotionally and physically abused needs somebody that loves him deeply, and will walk alongside him. So it's easy to look at this kind of question, George, and ask it as a money question, as a tactics question. What I see here is a young man who has been bathed in trauma his whole life, right? Whether it's neglect, whether it's physical and emotional abuse, whether it is any sort of parental addiction, any number of things, this kid's been through it. And so his understanding of what is safe and what is, quote-unquote,

the right thing and smart it was completely wiped out because the people who were supposed the two people that he was supposed to be able to count on mom and dad didn't show up and in fact they didn't show up they heard him right and so we're talking when we talk about this kind of fear, this kind of trust challenges. We're talking about amygdala. We're talking about safety. Is this kid needs to learn how to feel safe in his own body? He needs to learn how to feel safe with the people around him. And this is a long healing journey, right? I want to focus on, man, this is going to sound. I want to focus on getting this kid great trauma counseling. I want to focus on if he is willing to accept it, a lot of physical contact, right?

Holding hands, going for walks, looking him in the eye, hugs, talking, listening, right? We're talking about basic physiological safety here. If you want to teach him about money, I would focus not on conversations, not on more words and tactics. I would have him sit at the table with you while you and your husband do your budget, right? I would have him go to the bank with you. And instead of you doing online banking for a year, I want you to go to the bank and take him with you and meet the banker, sit in a banker office and get new check. I mean, we're talking going old school here, but we are teaching him safety. We're not teaching him money tactics, right? And he's going to need a new picture for

how to do things. This is bigger than just, I trust a bank. This is can I trust anyone. Can I trust my body? Can I trust myself? Right? Because the core trust that we have is that mom and dad will love us and show up for us, and his didn't. Right? And so, again, I want to circle back, Michelle, and say you are a saint and an angel. So is your husband.

I'm so grateful that y'all are stepping into this young boy's life. He needs some good trauma counseling. He's going to need to relearn how to feel safe in his body and he's going to need new pictures of what safety looks like of what good choices look like he's been talked to probably his whole life he needs some pictures and you guys walking alongside him as he learns what a bank even does what he learns what a trustworthy adult even looks like that's going to be the way you turn this thing around. And then at the very end of that, we can talk about how your money's safer in a bank than on your mattress, right? That's exactly right. If the house catches on fire, your money's gone.

And the FDIC, the Federal Deposit Insurance Corporation, they've got you covered up to $250,000 per person per account, right? That's the nerdy stuff. But like you're saying, John, we can't just spit those facts in him right now and make him feel safe with his money. That's not the problem. In fact, it will work against you, right? Then your body alarms will sound a little bit louder sometimes. All right, let's go to Harrison in Atlanta, Georgia. Hey, Harrison, what's going on? Hey, guys, I'm doing good. How are y'all? Outstanding. What's up? All right. So I've got a quick question here. So not this past Sunday, but the Sunday before, I was on Baby Step 3, but somebody ran a red light and totaled my car.

Oh, no! And it kind of, yeah, it wiped out my emergency fund. And I'm kind of just struggling to figure out where to go from here. Are you okay? Yeah, I'm all right. I'm just, you know, I was just really sore afterward, but. Yeah. So what happened with the emergency fund? Where did that money go towards? Did you have insurance? Because it sounds like it was their fault and their insurance should pay all

of your, all the bills here, right? Well, the, there was no witnesses and the police report said no one is at fault or he couldn't put anyone particularly at fault because he wasn't there to see it happen. Did you just have liability coverage on your car? Yeah. Okay, okay. So, George, speak in here. I'm going to tell you something that's not going to feel great, but hopefully in good time you'll see that it was, that it is.

This is exactly why you have an emergency fund for this moment, for emergencies. And it's really hard when you have worked and clawed and scratched and finally filled up an emergency fund. And it becomes a badge of honor, right, George? You don't want to touch that. Yeah, you flex. It's like, yeah, that's what's up. That's the foundation I'm leaning on. And we forget that it's designed for this exact moment when somebody runs a red light and smokes your car and you've got to go get something.

Otherwise, the alternative here, let's go to alt-reality. You are at some dealership buying an overpriced car with a car note. Right? You would have had to go get a loan if you hadn't have already put this work in. And so, Harris, I'm suggesting, man, this sucks, this is hard, and good for you, brother. You set yourself up for just this moment.

And I want you to exhale and be like, yeah, that's true. And then you got to go back to the bottom and start over and start saving your money again. Yeah, so what's your car situation now? Well, I've got to go back to the bottom and start over and start saving your money again. Yeah. So what's your car situation now? Well, I've got a relative of mine had a vehicle that wasn't running, and they said basically I can drive it as long as I need it if I get it fixed. So I've got everything fixed on it, and I should get it Saturday. I bet you look pretty cool in this thing.

What is it? It's a 98 Toyota Camry. Oh, you do not look cool in that. I retract my it? It's a 98 Toyota Camry. You do not look cool in that. I retract my statement. That thing will run forever. That's what this call's about. You're not mad about your, you're not heartbroken about your emergency fund. You're just heartbroken about

driving an old Camry. Dude, get that emergency fund back in place. Get the right insurance in place. Get a dash cam for your car. Even on the Camrys, this never happens again. And then save up and upgrade your car over time. That's what I would do if I was in your shoes. I, in fact, just got a dash cam a few weeks ago, John.

I love it. I feel so safe. I want nothing to do with dash cams. The world does not need to know how I drive. John's a privacy nerd. I love it. Thank you. If you've ever gone through a life emergency you weren't prepared for financially, that definitely includes me. You know that sick to your stomach, sweaty palms

feeling all too well. As a parent, you hope your child never has to go through an experience like that. But teaching teenagers how to be smart with money before they make dumb mistakes like we did can feel like a big job. You don't have to resort to the school of hard knocks to teach your kids about money. With our digital self-study courses your teen will learn the right way to handle money no matter what curveballs life may throw at them down the road and the best part no instructor needed if your teen has a tablet or a computer they're all set to start learning how to budget save and invest even how to write a resume or start their own business before i invested in my kids business or buy them a car or help them buy a car,

I'm going to make them take this course. Parents, get your kids off to a great financial start and go to RamseySolutions.com slash selfstudy to learn more about all of the different courses we have available for your middle or high school kid. Fantastic. All the parents said amen. Exactly.

That's exactly right. Crystal in Colorado Springs. What's up, Crystal? Hey, George and John. How are you? Phenomenal. How are you? Good.

I had a mutual fund question. My husband and I have a mutual fund that is not a retirement account. It's got about $13,000 in it. And we aren't sure if we should leave it alone or if we should put it towards our house or roll it to our kids' college funds. Okay. So you guys are in Baby Step 4, 5, 6 right now? Yep. Awesome.

Well, what's the conversation like? Do one of you want one thing and the other one wants another? Nope. We're kind of good with any decision. We have $97,000 left to pay on the house. We're anticipating we'll be done with that in two years. So it would speed it up maybe about, I don't know, three or four months. So it's not like a major one way or the other.

It's just kind of a way to many, how many kids and how old? They're six and eight. Six and eight. And are you currently on track? Are you funding that college fund and you feel good about it? We're funding it right now. There's not a whole lot in each of them. We're mostly focusing on the house. We want to get that out of the way and then kind of, well, here's the thing. I think this through and I go, okay, if I attack the house and the house has gone in two years, that frees us up to save a whole lot for the next 10 years before they go to college, right? Right. So that's my thinking. I free up that house payment and now we can go full throttle and

make sure the kids are taken care of for college. And maybe they'll get some scholarships. They can cash flow some of this, work a little bit. So I'm more on the boat of paying down the house and speeding that process up, knowing the kids are young. If the kids were like 16, 17 and there wasn't much going on, I'd say let's put this in there and help them go to college debt-free. But it sounds like that's going to happen because of their age. Gotcha. And Crystal, here's one more thing to think through. but it sounds like that's going to happen because of their age. Gotcha. And Crystal, here's one more thing to think through. I've met with, I can't even count them,

thousands of college students and their parents over the years, and the most common thing I hear is, my kid was dead set on this, and now we're looking at that. Or I thought my kid was going to be interested in this, and now they're interested in that. I can guarantee you, how old are your kids? Say it one more time. Six and eight. Yes. The higher education market, everything about higher education is shifting, morphing, turning. And so what it's going to look like in 10 years, Nobody knows. And I've got a six-year-old too. I'm in this exact same boat. What I do have in front of me is a mortgage. That is a known known, right? And so

I want to clear that up and then we will begin to invest. We're going to be responsible. So we're going to put money away, all that kind of stuff like George was talking about. But I know this thing's in front of me and I have no idea what my kid is going to be like in 10 years. Yep, that makes sense. And I would love to be done with the house sooner rather than later. Get done. Cash it out. Hey, George, how good does it feel? So good, John. I can't stress it enough. If you are able to pay off your house, do it. Although we did just get another dog, and so that it feels like another mortgage payment. That's worse than a mortgage payment. That's true.

I will say that. That's a whole other show. I'm going to get myself in trouble. Let's go to Andy in Salt Lake City. What's up, brother? Andy, how are you doing? Hey, guys, doing well. Better than I deserve, really.

So what's up? So I'll give you the question, then you guys can ask me for filling. So basically I want to know, my wife and I are trying to decide, do we take $12,000 out of what is a cash fund in our account to backfill Roth IRAs that we're just opening up, these new Roth IRAs, to backfill those for last year, and then we'll start doing monthly?

Or do we cash out an employee's stock, pay the taxes on that, and use that money to backfill those Roth IRAs, and then we'll continue with our monthly investment. I had a little hard time hearing you. Tell me where that $12,000 is coming from again. So we've got cash in the bank. We've got $28,000 in an emergency fund, cash in the bank. Basically, my goal is to rob that of $12,000 and put backfill the Roth IRAs

because I think it's a little more emergency money than we need. My wife strongly disagrees. She disagrees about the emergency fund amount? About pulling the $12,000 out of that to fund the Roth IRA. Well, what is a proper emergency fund that you both agree on is the right amount? To be honest with you, we've been floating, you know, the three to six months thing. Right now, we're closer to the six-month end. I just think she's really comfortable there. I'm less concerned. That's my thing.

It's more about are you guys on the same page? Because I would tell you to take that money out first if you're not going to drain the emergency fund, but it sounds like that's going to put her in an uncomfortable position. It will. Yeah, she's very uncomfortable with it. Andy, that should be the end of the conversation. I know my option at this point. $12,000 for safety and security in my wife's heart is a Kmart blue light special deal brother i mean if if i could give everybody's spouse safety and peace

for 12 grand dude i would i would i'm gonna cash out the employee stock yes as or just chill out what why are you so so frantic about backfilling a roth like it feels like you like are you worried about missing something? Just the interest. So we've, we have done a good job of maintaining our family and maintaining our budget, keeping our debt down, but we haven't done a great job of investing. I'm 42 years old. You know, I got about 25 years or so. And I want to be able to, you know, have, I just want to be in a good, comfortable position. I'm not looking to like transfer a ton of wealth or anything, but I do want to live a comfortable life, cover medical. I'm not looking to transfer a ton of wealth or anything, but I do want to live a comfortable life, cover medical, things like that.

We know we haven't done a good enough job on retirement, so I'm looking to maximize now. Yeah. Well, you're not going to miss the stocks, and to have those Roth IRAs growing for you for the next 20 years, I'm good with that, but I don't want you draining the emergency fund at the expense of your wife, having the security gland flare up, and now we're in another fight because of that.

And I'm going to tell you, Andy. You already got plenty of those. Yeah. I am more along your wife's – I want a bigger emergency fund. Six months is minimum for me. That's a light thing because I spent most of my career working in situations that don't normally happen to people. And most of my day was made up that don't normally happen to people. And most of my day was made up in those situations.

I know the wheels fall off. I've been doing that forever. So I'm with her. A bigger emergency fund makes me feel safe. George, you called it out. Andy, what I want you guys to do, planning for retirement, planning for what life is going to look like 25 years, 30 years from now, and and reverse engineering that only starts with you guys getting in a room and dreaming together envisioning this thing together not envisioning in some let's make a mood board or whatever but what do we want this thing to look like and we throw this part out dude and i know it's not cool because like bro

forget all that how is it gonna feel when we get there it's to say, I'm going to live my life on the beach. You're going to do that for 30 days, and you're going to be bored and sunburned and broke. What is it going to feel like whenever we get to wherever it is we want to go? And let that be part of the equation here. And safety is key. Safety is key, especially $12,000, man. Come on. Now, I. Come on.

If, now I've heard this, my wife says we have to have, or my husband says we have to have, F-350, like, super extended thing for the safety, man, and it's $130,000, because we've got to get the Roush package. Wrong. No. You're trying to justify bro behavior.

I won't have that on this show. I will not. There you go. But $12,000 in an emergency fund so that your wife can sleep, brother. That is a bargain. That's not paranoia. That's reality. That's reality. That's reality. Thank you. Let's go to Thomas in Raleigh, North Carolina.

Hey, Thomas, what's going on? Hey, guys, thanks for taking my call. What's up? Hey, so I guess somebody's question in the simplest terms is, what's the best way that I can save money in kind of the medium term for a down payment on a house or to purchase a house? And I guess more specifically, how can I hide that money for myself so I don't feel inclined to spend it? That's a great self-aware question. How do I stop myself from plunging into my own savings that I'm working really hard for? So Thomas, are you debt-free? I am, yes.

And you've got your fully funded emergency fund of three to six months? Yes, we do. Okay. So what is the timeline for this house purchase? See, and I think that's part of the problem is that I don't really have a timeline. There's no pressure. Good. That's even better. All the financial problems that I've encountered in my life, I learned the hard way, but I learned them really quickly. And because there's not really like a learning moment here for me, I feel like that's maybe why I'm struggling. You are wise beyond your years. You just said

there's no pressure. And that to me is the key here. If you're not under some urgent timeline, that's usually just a justified excuse of why we have to get a house this year. So how much do you have saved currently? Including like all my liquid savings or just for the house? Don't touch the emergency fund. How much do you have outside of that? I think right now it's really about $6,500. Okay. And have you looked at homes in the area that you want to live and what it might take to get a reasonable home there? Nope, because we're also not exactly sure where we want to go when I finish school. Ah, okay. Well, here's what I would do. Could you wait three years to get a house or more? Oh, we're planning on probably waiting five or six years. Beautiful. Okay,

I like this a lot because I want you to graduate while you save up slowly. Take your time with this because you don't even know where you're going to live and what the house will cost, but you can just stack up a whole bunch of cash in the meantime. So, Thomas, can we get real personal for a second? Absolutely. It's between me, you, George. And America. And a couple million people.

So what does spending give you? Usually food. No, you're out of control with it. You get something from it. what does it give you i find myself usually i spend money on things that add a level of convenience to my life and like i know that usually whenever i uh do overspend or we collectively my wife and i usually is going out to eat or something like that just because we just don't want to go home and cook or, you know, whatever the case might be. So I think it's just that level of convenience.

It's usually services and things of that nature. Okay, so we're not talking about a pathology here. We're not talking about you have a clinical diagnosis. You have a clinical issue with being able to control your behavior. This is a question of intentionality. You just don't... What's the old quote? If you don't have a goal that you're aiming for, you'll get there every time?

If you aim at nothing, you'll hit it every time. There you go. Way better when I say it. Yeah, that was well done. So here's what I really want you guys to do, and I feel like I'm a resounding gong. I say the same thing over and over and over again. But I want you and your wife... How long have you all been married? Six years. Okay. I want you all to go out together,

whether it's like my wife and I, we like to do breakfast. We both wake up early and our minds are still clear in the morning. Go spend a couple of two or three hours together and do an inventory. Here's the last six years. We've been at school at school been running around we've paid some stuff off but here's kind of where we are and then take inventory of where you are do you still like me do i still like you of course you do but here's where we are and then spend the bulk of your time if you don't sabotage yourself with that second question ask the bulk of your spend the bulk of your time where do we want to? And you and your wife need to come away with three or five or seven value statements. Here's who we are, and here's what it's going to take to get there. And one of those value statements might be, we are going to be homeowners and have no mortgage debt in 10 years.

And so backfilling, like walking backwards, or no, actually a value statement will be, we are homeowners. We are people who have roots in a community. And what does that mean? We need to buy a house. What does that mean? We got to start saving our money. You've got to have some goals and some,

some, some identities with which you are directing your actions toward. Does that make sense? It does. It sounds like you are tired and relatively aimless. And you have a bunch of like, that'd be cool, and we want to do this, we want to do that. You haven't written anything down. You've got no way to hold you or her accountable, and vice versa, because you haven't taken the time to put stuff in concrete and say, let's go

do this. I agree with that statement. Thomas, let me put a picture to this and tell you exactly what me and my wife did. We started off our marriage debt-free, and we decided we want to put as much down on our first home as possible. So we kept saving like crazy people for our first year of marriage while renting, and we were able to put down 45% on our home, which then allowed us to pay it off in 26 months. And so that's part of what you need to start driving towards. It's like John is saying is have that goal. Say we want to save up $100,000 over the next three years. How are we going to do that?

We're going to buckle down on the budget, which means we're not going to spend over here. We're not going to eat out as much. We're going to enjoy our lives a little bit, but we're really focused on this goal. It's that when I get out of school and we're working, our income goes up. Man, we're going to go full throttle. We're going to be able to put 25%, 30% down on this house. And so you start to really make this reality. You start driving towards that, and you guys are going to do amazing things. But like John's saying, you've got to get focused on this thing.

So that's what we did, John. And for saving down a down payment, I'll tell you this. If it's going to be three to five years, Thomas, you can park that in index funds so that your money can grow a little bit. There you go. That's what we did, and it helped us a little bit to see that money grow. You feel like you're making extra progress thanks to compound interest. Now, if it's under that, if you're looking at a two-year, three-year time horizon, I would park it in a high-yield savings account, and it's going to make pennies on the dollar, and you deal with it, and that's fine, but it's at least parked outside of your normal bank account. That's what I don't want. You said

it yourself. I don't want to be able to touch this thing. So I like having it in a separate bank with a separate company altogether so that you're less likely to do that. But you set that goal of $100,000 and say, all right, three years, what's that take? $33,000 per year. What's that going to take? This much per month? What's our income? How much can we put towards this thing and start to set a real goal on paper and use that budget to drive you towards that? I, I think underneath it. And again, I'm, I'm ripping this off from James clear. I've never, I'd never heard it outlined this way. And I love it beneath you and your wife's goal was a decision that as a, as a value a value, an identity of our home, of our marriage, of who we're going to be, is that we're going to do hard things together.

We are unified in setting hard goals and we go get them. Something about getting with your spouse, getting with anybody in your life that you do life with, and saying, who are we going to be? And then let's go get that stuff. Because most of us start with a goal, and we don't have an identity that backs that goal up. We just have a bunch of tasks, and you end up spinning your wheels. Why am I even doing this? Let's just order extra appetizers and get another round, and then let's do another round. And all of a sudden, you've blown through your month's food budget on one meal because it wasn't about value.

It was just about some knickknacks. I see it a lot of times when people try to lose weight. It becomes obsessively about this number on a scale, not about a person who's trying to be a steward of their body or someone who wants to be able to roll around with their grandkids. Value statements. Does that make sense? Yeah, and it's driving towards a bigger vision than, well, my wife wants me to lose weight, so I guess I should lose weight.

Instead, it's, man, I'd love to be able to play with my grandkids outside. Yes. That would be awesome. I'd love to take an extra mile on my walks in the evenings with my husband. I'd rather, you know, it becomes about so much more, right? Or I'm a guy who takes good care of the one precious body I have. That's a good place to start any sort of life change. Yeah. precious body I have. That's a good place to start any sort of life change. I'm a guy that

loves my grandkids who I haven't even met yet so much that I'm going to take care of my knees and hips now so that I can wrestle in 30 years. That kind of value statement and identity statement is deep. That's huge. And with home ownership, a lot of times there's outside pressure. It's, well, my dad says I should be in the house by now because I'm 32. And when he was my age, he already had his house paid. There's all these outside pressures, and when you start to peel it back and go identity-based, it changes your motivation. And then you get somebody like Thomas who's not even done with school, and he's already like, I don't know where we're going to live. I've got to get a house.

I can't not spend that money. Yeah, put these steps in the right order. Do them one at a time and start with who am i going to be who are we going to be it's another hour of the books good job george you're getting better i'm just kidding thank you so much better me at this i feel like i'm making this thing up on the fly thanks to james childs and ben hill and jenna sears we'll be right back on the ramsey show Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register.

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