The Ramsey Show - App - When You're Stressed, Get Busy!

Episode Date: March 29, 2022

George Kamel & Ken Coleman discuss: Where to park savings, Paying for a Masters degree, Fixing a car vs. buying a new one, Dealing with stress in baby steps 4, 5, & 6. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, Ramsey personality and host of the Fine Print Podcast, joined today by Ken Coleman, bestselling author and host of the Fine Print Podcast, joined today by Ken Coleman, bestselling author, host of The Ken Coleman Show. And we are here to take your calls, answer your questions, and give you hope to give you the next right step for wherever you're dealing with in life. So if you want to talk work, you want to talk money, relationships, boundaries, moving careers, moving states, we are happy to talk about it. Open phones at 888-825-5225. Madison kicks us off. She's in Lubbock, Texas. Madison, welcome to The Ramsey

Show. Hi, how are y'all? Doing great. How can Ken and I help? All right, so I just had a question. I'm still in college right now. I only work part-time. I don't have any debt. I guess I'm in Baby Steps 4 through 7. I invest about 15%, but that doesn't, you know, I can only invest into a Roth right now. And I'm not able to max out the Roth only doing 15%. I just don't know what to, I don't have many expenses or anything. So I'm just kind of wondering what to do with all the money I've set aside. Madison, you are incredible. You're 20 years old, and you're talking like someone who has a lot more wisdom than most 20-year-olds I run into.

So way to go, first of all. So how much money do you have saved? I have $40,000 in savings, and that's aside from my six-month emergency fund. How did you save this money up? Just throughout life, I don't spend money hardly. Do you have any fun? I want to make sure you're still having some fun at 20 years old. Yes, I do.

I'm in a few clubs and stuff like that, and I'm able to go out and do some fun things with friends. Okay, good, good, good. I'm curious,'s there's a reason why i'm asking this how old were you when you first started saving money of that 40 000 how far back does that go um my parents actually set up that savings account you know whenever we were really little and all of our you know birthday money and gifts like that from grandparents went into it. So when I was probably 18, it was at about $18,000. And then the rest is just from working part-time jobs, babysitting, dog sitting, just extra money I get. Good for you. So your parents got a hold of these Ramsey principles

and they instilled it in you and you said, yeah, that makes sense. Yes, sir. That's true. God bless. That's incredible. Okay. So let's talk about this money. How soon until you're done with college? You're 20 right now. Are you next year, two years? I have a year and a half. I graduate December 23. Okay.

Now, are you able to cash flow the rest of your college? Yes, my college is paid for. Fantastic. Well, this money to me becomes Madison's adult fund when she's out of college and you would get a job. What are you studying right now? Construction engineering. Fantastic. Oh yeah. Great field. So if I'm you, I'm going to keep saving up money and that money will then become a down payment on my first home. In fact, it would not shock me if you were able to pay cash for your first house with your level of diligence. Okay. With that money, should I just keep putting it into savings or should I

be investing it somewhere so it can grow a little faster or how should that work? I think if you're graduating in a year and a half and we don't know what life looks like, I'm going to just park that in a high yield savings account, a money market account. You're probably going to get a half percent on that money. But the point of that money is not to make money right now. The point of that money is to give Madison a leg up when she leaves college and she moves to where she's going to move and work where she's going to work. And she can afford a house in that area because of the diligence that she's had for years and years and years. Okay, awesome. Thank you very much. Yeah, and keep investing that 15% too. That's fantastic. And as you get a job,

you're going to probably have a 401k with that, with whatever you do in construction, invest 15% of your total income into those things and good growth stock mutual funds, pay off the house early. Madison is going to be a multimillionaire by the time she's in her 30s and 40s. Without question. That gets me excited for the next generation, Ken. I love it. All right, let's move on to Michelle in Kansas City. Michelle, welcome to The Ramsey Show. Hi, thanks for having me. Absolutely. What's going on? Yeah, so my husband and I are debt-free. We paid off about $46,000 last year and have been saving for a down payment on a house. And as you know, the housing market is crazy right now.

And we were wondering if you recommend we wait for a house to come up in our price range and kind of sit tight with the money we have for the down payment, or if we should put some of the money we have saved towards the down payment towards paying for a master's degree in human resource development for me instead. Oh, interesting. So you're either going with a house or education? Yes, but we could also cash flow the master's if you prefer or you recommend. So you're saying you could put the down payment on the house,

get a house, and still cash flow the master's degree? Yes, potentially. When the house that's affordable pops open. So they're going to have to wait a little bit. Yeah. So based on your budget, I mean, I wouldn't go outside of that. How much money do you guys have right now? So we have about $52,000 aside from our $15,000 emergency fund. And we're hoping to put $40,000 toward a house. And then his parents were willing to give us a $20,000 gift toward our down payment. Wow. So you'd have $60,000 down?

Yes, $60,000 down. Why the master's? So I'm interested in changing careers. I'm in administrative role right now for a university, and I've always wanted to work more in policy, and so I feel like the HRD would give me that opportunity to kind of work in there and helping people get a job they love. Wow, and so my question is, is the master's necessary to get there? That's a good question. So I know that certification in human resources is kind of the industry standard.

And so I recently started my position, so I kind of figured I needed to stay there for a while to get some longevity on my resume. And then thought this position allowed me to kind of work toward a degree at the same time. Yeah, here's my point. I want you to do your homework. You're pretty clear on why HR and what you want to do when you're in HR, but you need to find out if the master's is necessary. Because if it's not, Michelle, guess what? That certification and relationship building is going to be more than enough for somebody as sharp as you,

and then you don't have to spend that cash on something that you do not need. Now, if you want to get it, the fact that you guys can cash flow it, I got no problem with you getting it, but I just would never spend that time and money on something that you didn't have to have. Good call there. So, Michelle, what's your take home pay? So, together we net about $92,000 a year. Okay. So, have you done the math on what the payment would look like? Yeah. So the whole degree is about $12,000. Okay. So what I'm seeing for you is we're looking at about a $1,900 mortgage payment max is what I'm comfortable with on a 15-year fixed. Does that sound about right? Yeah. That's kind of what we were thinking too. Which puts you guys at about $280 for a house. Is that reasonable for your area?

Yes, and it's kind of tough to come by that price range right now just with the market and everything. Yeah, well, I would keep saving up. Keep saving that down payment. If you can get $70 down, $80 down, that will help with your budget. You can go, okay, now we can get a house for $310, and we're still going to be in the clear. We're going to be able to afford this payment easily, pay it off easily, cashflow our masters easily. That's what I want for you guys is to have margin. So yes, be patient. The housing market's crazy. Work with a great real estate

agent and do it when the time is right and no sooner. Appreciate the call. This is The Ramsey Show. you've got a lot on your plate a job your home your marriage and your growing family while you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey, we've walked with millions of people and their families to help them overcome their financial stress.

And we found that money stress is just one of all kinds of ways we experience stress. People struggle with anxiety, loneliness, and stress all the time. And here's the good news. Our friend Dr. John Deloney has a new book available for pre-order called Own Your Past, Change Your Future, and it's selling like crazy because everyone wants and needs this book. It's a not-so-complicated approach to relationships, mental health, and wellness. And you are in for a treat. When you read this book, you're going to laugh, you're going to cry, it will challenge you, and if you take the steps that Dr. John Deloney outlines, you will be transformed. Just like Total Money Makeover transformed so many lives when it comes to money, I think this book is going to do the same for people's mental health and wellness. Own Your Past, Change Your Future will show you how to deal with different types of trauma, how to get connected to a community, and make friends as an adult.

And it'll show you the steps that you can take to change your thoughts and actions. Yes, it's possible. And here's why you should pre-order today. This is your last week to pre-order to get the e-book two weeks early. That's right. You'll get the e-book on April 5th before the book is even available to the public. So pre-order your copy of Own Your Past, Change Your Future for just 20 bucks at ramseysolutions.com today. I'm George Campbell, joined today by Ken Coleman. You're listening to The Ramsey Show. Open phones this hour, 888-825-5225. We are headed to Medford, Oregon. Jason joins us there.

Jason, welcome to the show. What's up, gentlemen? Thanks for taking my call. Yeah, how's it going? How can we help? Well, in kind of a vehicle situation here, I have a 2013 Chevy Malibu. It has about 200,000 miles, so it's kind of towards the end of its life, but still runs well. It needs about 2,000 in repairs for an AC compressor and another piece for check engine light that needs to be replaced.

So altogether, it's about $2,000. I did some shopping about four or five different places, found the cheapest one. It does get about $110 up here in the summer. So I think right now I can wait on the compressor, but the other piece is about $500. So I'm wondering, my question, my fear is, I guess, if I put the $2,000 into the vehicle that's probably worth about $3,000, that something bigger could happen, and then I'm kind of stuck. And so I don't know.

I don't have any debt besides my wife's vehicle and our home, no consumer debt, but I don't want to get into a payment. We have about $40,000 in savings, so I don't know what you guys think I should do. So how much money did you say you have in savings? About $44,000. Wow. And how much of that is your emergency fund? It's kind of everything all together. That's what we just have in our savings.

It's kind of like emergencies, three to six months. That's just our nest egg, basically, while we still kind of work on Baby Step 2, which is getting rid of her vehicle, which she owes about $ kind of work on Baby Step 2, which is getting rid of her vehicle, which she owes about $17,000 on my wife's car. Okay, that's what I was confused about, because if you're following our plan, you're going to have $1,000 in Baby Step 1, and then everything else is going to go towards the debt in Baby Step 2. Right. So how much is the total debt?

$17,000 for the vehicle, my wife's car, and there's no other debt besides our home. Okay. So here's what I'm thinking. Why don't we pay off the debt today, right, which leaves us with $27,000, which a big chunk of that is going to be your emergency fund, right? Right. And then whatever's left, we upgrade you to a better car. I don't think it's worth putting $2,000 into a car that is worth $3,000.

No. Unless you're going to recoup the repair cost, which I doubt it's going to bring the car up to a $5,000 or more value with 200,000 miles. That's my biggest concern is that if I fix it and the air is running great and the car is running great and then the transmission blows or something bigger happens and I've wasted that two grand, which I could have put into another vehicle. Yeah, but Jason, we're telling you not to do that.

So what's your six, what is three months, what's three months emergency for you guys, three months of income? What's the number? Probably about maybe 6,000 to 7,000. income. What's the number? Probably about maybe $6,000 to $7,000. Okay. Let's call it $10,000 just for round numbers here, which leaves you with $17,000. So you can go sell your car for what, $1,000 or $2,000 at this point? I think a Kelly Blue Book would be about $3,000, but that's assuming that the AC is not working. I'm sure that would drop it a little bit.

Yeah, sell it for what it's worth right now with all the things. You take that cash and you put it on top of the $1,700 that George walked you up to, right, because you've now paid off your wife's car and you guys have no debt. You've got no debt, emergency fund in place, and you have a much better car. And you don't even have to spend $1,700 plus plus, because let's say you get $1, for the uh the malibu okay so now you got 18.5 you could buy a nice ten thousand dollar car if you wanted to and you and then you still pad your uh your mercy fund why so the goal with us laying this out why wouldn't you do that

no i think that's the best thing i think that's kind of what I was talking myself into. I just get a little nervous, you know, with the 44 being all we have besides our investments and my 401K. But you're not even depleting it. You're still going to have 20K sitting in there. You have a nice emergency fund. And if you want it to be closer to six months, just get a cheaper car and go, all right, I'm going to buy an $8,000 car. Yeah. Right.

So we can have $30,000 in there. Okay, well, you guys pretty much made me feel a little bit better about the decision because I didn't want to put that much into a vehicle, which I feel like is kind of heading towards the end. Yeah, I'm with you, man. But you've got to follow our plan or you can follow Jason's plan, and I'll tell you, our plan works, and it sounds like Jason's plan is on the fritz. This car is not doing so hot. So I'm not going to put the repairs in. Let's just sell it. Let's get a better car. Let's pay off the debt

today. Never go back into debt again. And you've got the pad because this emergency fund exists today. You got this. All right, let's go to Alfred in Houston, Texas. Alfred, welcome to the show. Hey, what's going on? Nothing much, man. How can we help? Okay, so I'm in baby step number two right now, and I've kind of run into like a, not a problem, but a decision to make. So I have a balance on a credit card that's $3,500, and then I have another one that's $4,500.

But the one that's $3,500, I think I have a judgment on it. So I don't know how to approach this because I haven't even come into contact with them. Is that all of your debt? Yeah, so far. I'm ready towards the end. I've been at it for like three months now. Okay. So you've got $8,000 left in credit card debt and that's it? Yes. How much money do you have right now to your name? Well, now I have about $1,500. That's with my emergency fund. So let's call out your baby step one, $1,000. Everything outside of that would need to be

thrown at this debt. What do you know about this judgment? Did it go to collections? Yeah, it happened like when I was 18. I'm 23 now. This is five-year-old debt. Yeah, this is an old debt whenever I was, yeah. Okay, here's what I want you to do. I want you to be proactive and get on the phone with them, with the collection agency, have them verify this debt in writing, which means they need every single detail that tells exactly what kind of debt this is, what was paid, the charges. And if they can't provide that, they have to throw it

away illegally. So once you get that letter in writing, I want you to get on the phone and say, hey, I'm willing to give you money. This is a five-year-old debt. I've got 500 bucks. That's it. That's all I can do. Will you settle for $500? Okay. And chances are they're going to do it. They may go a little higher, but you got to be ready to pay on the spot. So I'd be stacking cash right now as much as you can, working your tail off. No installment plans. Do not give them access to your checking account under any circumstances. No. No. Right now this debt's been sitting there dormant, right? You

haven't been paying anything on it. That's why it went to questions. No, yeah. I haven't even come in contact since it's happened. You may have a chance at negotiating, but at the end of the day, this is your debt and you owe it. So whatever they say, they say, here's what we can do to settle it. Say, I want to settle this thing in full as a lump sum. I've got $500 and see what they say. And once you negotiate that debt, whatever it is, they may say $1,000 and you've got that money in cash ready to go, pay off that debt and then move on to that last credit card. And then please, for the love, never go into credit card debt again. Can you promise me that? Don't touch debt. Once you pay all that off, we're building the emergency fund. We're going

to build for the future instead of paying for the past. That's going to give you some great footing, some great foundation. So you can start building your life, man. You're so young. You've got your whole life ahead of you, but we've got to stop playing games. And I'm rooting for you. Call us back when you're dead free, okay? Yes, sir. Love to hear it. There we go. Another one in the books. Good stuff there. Give us a call.

888-825-5225. Let's talk about your work, your money, all the things that matter to you, what you're worried about, excited about, the highs and lows of life. That's what we're here for. I'm George Campbell, joined by Ken Coleman. This is The Ramsey Show. I'm George Campbell, joined today by Ken Coleman. And in the lobby of Ramsey Solutions on the debt-free stage, Brandon and Madeline join us. How are you guys?

Good. How are you? Where are you from? From Brunswick, Maine. We're currently living in Connecticut, though. Lovely. New Englanders. I like that. Big fan. Okay, so how much debt have you guys paid off? We've paid off 90, just shy of $91,000. Fantastic. How long did that take? Approximately 18 months.

What was your range of income during that time? Our range of income was approximately $120,000 and bumped up to about $138,000. Awesome. What do you guys do for a living? I'm in the Marine Corps. I'm a nurse. Fantastic. Well, thank you for your service, both of you. Awesome. What do you guys do for a living? I'm in the Marine Corps and I'm a nurse. Fantastic. Well, thank you for your service. Both of you. Incredible. Okay. So you guys look pretty young. Am I right? Thank you. Yes. Okay. I won't ask ages yet, but we'll get there. Sharp couple here if you're watching on YouTube. So what type of debt was this? $91,000? We had student loans debt, car payments, and a credit card.

You were pretty much normal. You just learned early on that you live life with payments. Everyone's got a car loan payment. Everyone opens the credit card at 18 to build a credit score. Everyone gets a student loan. You decided 18 months ago that you weren't going to be normal anymore, that you weren't going to be average.. You weren't going to be average. What happened that got you guys on this journey?

Well, I had a Dave Ramsey Total Money Makeover book at home that my dad gave me when I was like 17. Hadn't read it. And then Brandon, we were thinking about getting married, and he had read it, and he was really big into it, so I read it. And that kind of started it. So it was a coaster for a while, and you're like, oh think my dad gave me i think that sounds familiar it's on my bookshelf with dust anyone now you should really you should read this yeah was it was that your nudge to go

like hey if you want to if you want to be married to me like we got to get on this plan kind of i was very like oh we'll just pay it off it'll be great and he's like well what's the plan i was we'll just pay it off it'll be great and he And he was like, what's the plan? He's a Marine. He needs a plan. Yeah, he did. Okay, so how long have you guys been married? About 19 months. Oh, wow.

So as soon as you guys got married, you got started on this plan. Yes. You got back from the honeymoon and went for it. We started before we got married, I feel like.

We were both doing it on our own and then once we got married, we wanted to start the marriage off on the right foot. It was super important to us that we were on the same page and we could get going in the right direction from day one. That's incredible. So you guys were both on board day one. Did you feel the momentum when you guys combined finances and went, okay, this is our debt now. We're attacking all

this together. Yeah, that was very significant because like she said, I had the book too when I was younger. It was funny. I think there's a second car loan I got. The loan officer actually gave me the book when I signed that day. Wow. Was he like throwing shade? Like, hey, son, you may want to read this. No, I think she was just trying to push people in the right direction.

I read it and just couldn't gain a lot of traction, was doing what I could. But combining income really made a significant impact for us in pushing through and getting to where we are now. Wow, that's incredible. So I got to ask for couples, especially I love hearing we got two different worldviews in some sense, right? Coming together, different experiences in life. Now here we are, we're married, we're going to do this thing. How long did it take before you really sense

momentum can you remember back like how long to figure it out i guess i'm speaking for myself but i thought it was right away because i the i felt like the most encouraging part throughout it was having him to talk to about it and we were encouraging for one another and just talking about paying it off and our plans for the future was really encouraging. The snowball helped, Ken. We had a lot of those little federal loans, and seeing those go away fast was super encouraging. It wasn't until we got to my Parent PLUS loan that was essentially half of the debt, and that was the last piece.

And we were like, all right, we've got to climb this hill, and then we'll be there. Wow. That's incredible. So what was the hardest part of this journey um for me it was driving my 06 corolla i paid cash for that after we moved from connecticut we got married moved from california to connecticut and got married i sold um my suv and i had that part paid off but i needed um a cash vehicle and we didn't have a whole lot of income after cash flowing the wedding so wow that was hard for me and uh probably getting married and like

wanting to like set up a house and get a nice apartment do all the fun newlywed stuff and he said it was like we're gonna wait we're gonna wait we are broke yeah which was worth it because all the stuff I thought I liked I don't actually like anymore. So it worked out well. Nice. Look at that. So now you're debt free and you know how you want to decorate. Right. This is an added bonus. It took a little while in marriage, you know? People want to rush in and do all the stuff. You don't even know each other yet.

I know. So I got to ask, is there a fun sacrifice or something crazy? Like maybe you ate that you'll never eat again. I mean, how intense was this? Anything like that? We really liked Eat Out. We did really like Eat Out. That was probably the hardest part for us together.

Yeah, sure. It was just Friday, Saturday nights. We probably went out to eat more than we should have, but paying attention to the budget and realizing how much we were spending on restaurants at the beginning and then cutting that back and really seeing it, that every dollar budget app is great, and that really helped us with the beginning and then cutting that back and really seeing it, that every dollar budget app is great, and that really helped us with the communication and seeing

and making the progress that we needed to. That's awesome. So what do you tell people, especially a young couple like you, sitting there with almost six figures in debt, and they're going, well, we'll just never pay it off. What do you tell them the key to getting out of debt is? I mean, probably talking about it. it like where do you spend your money like why let me why are you buying the beauty products or like why are you buying the

fly fishing stuff like like why do you really need it like and not communication accountability non-confrontational but like pleasant like you know do you really need it and i don't know and then just communicating the communication portion um especially with the budget and looking at it and seeing what's important and where we can cut. And having those conversations at the beginning of the month and just knowing that going into it, we had a plan. We did really well certain months and certain months we struggled. But at least we could see where we needed to make strides the following month and just get better along the way, and we did. You guys are inspiring. We're so proud of you. Do you guys have any cheerleaders along the way?

I mean... Yeah, our parents were super supportive. And then over here to my right is the O'Neill family, Steve and Isabella. I served with Steve in California, and he and I would listen to the podcast every day in the shop. And we both were very encouraging as we progressed through our journeys. He's debt-free himself. And it's really awesome to get to stand here and have him with us today. That's fantastic. Thank you both for your service. That is absolutely incredible. Yes, great Americans. I love to see them get debt-free, stay debt-free, have financial peace. That's incredible. Okay, so we've got a copy of Baby

Steps Millionaires for you. and at your age, that is absolutely the next step. You guys are going to be millionaires before you know it. And we also have a copy of the Total Money Makeover for you to give to someone for it to sit on the bookshelf for a little while. Here's a fun treat. Sneak a $20 bill, maybe even a $100 bill, on a random page

and then see when they get in touch with you and tell you, hey, thanks for the $100. Did you mean to put this in here? That's how you they read it that's so that's a little easter egg ken well george it's a brilliant idea thank you that'd drive me crazy they're waiting on the call that's true are they gonna do it are they gonna do it still a coaster struggle with that well we're so proud of you guys so glad that you made the trip from new england to join us today and we've got a little one with us today yeah who's this? It's our baby boy, Ander. He's seven weeks old. Look at that little guy.

How does a seven week make the trip? He's dressed in his Sunday best. He is. I love the khakis. I love the khakis on the little guy. It was a long drive, but we made it. Wow. Oh, you drove.

Yeah, that's impressive. Well, we appreciate it. And what's the name and age? Ander. He's seven weeks. Ander at seven weeks. Just precious. You got to watch on YouTube to see this okay you guys have put in the work 18 months of a slog very

impressive it's brandon and madeline and ander from the new haven connecticut area 91 000 paid off in 18 months making 120 up to 138 count it down Let's hear a debt-free scream. Three, two, one. We're debt-free! Woo! Oh, sweet. Andrew just got woken up. I saw it coming. He got so spooked by that.

He did. He was sound asleep. Oh, that's fun. He was awoken by the sound of debt freedom. Is there a sweeter sound? That's a great little picture there. Thank you. And I think we've got a... Is that from Braveheart, the sound of debt freedom. Is there a sweeter sound? That's a great little picture there. Thank you. And I think we've got a – is that from Braveheart, the sound?

Yes. There we go. All right. James saying don't mention that. Now the FCC is going to be on the table. Oh, boy. It's fine. Oh, boy.

Man, I'm inspired by couples like that, Ken. I am too. You know why? Because of that little dude. You know, they did all that work. Here he is. He has no clue how much sacrifice his mom and dad have made to set him up. And also, that's a Marine over there.

Yeah. That's pretty stinking cool, too. It's rock and roll, man. Yeah. Love to see it. Appreciate you guys being with us. Love to hear stories like that. Hey, you can be debt-free, too.

You can be the next Brandon Madeline on this stage, but it's going to take some work and sacrifice, but it is always going to be worth it. This is The Ramsey Show. Our scripture of the day comes from Proverbs 21.5. The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty. Henry David Thoreau said, What you get by achieving your goals is not as important as what you become by achieving your goals. Oh, I bet Ken Coleman loves that one.

I do like that. Oh, that's a good one. It's really good because it's about the journey. Identity. It's about the process, right? Yeah. The achievement kind of when you get there, you're kind of like, huh, I achieved, but I'm still the same person per se

as it relates to your lot in life, but you're a better individual. You're more complete. You're more skilled. You're more skilled. You're more experienced, whatever it is. Yeah, and it ties back to that proverb. You know, you get rich quick. It didn't really change your character, but you put the sacrifice in to get out of debt, to invest over time consistently.

Man, that changes you. You know, James doesn't just pull those randomly, George. I know. He picks those because they fit together. James is a genius, even though he doesn't choose them. But it's fine. Oh, James doesn't choose them? No, it's our friend Dawn. She works very hard.

That's unfortunate. I need to pay attention to my production notes. And with that, let's go to the phones. That's where Ken's better off. Kara joins us there. She is in Phoenix, Arizona. Kara, welcome to The Ramsey Show. Yes, hi.

I have a question for you guys. We love questions about when the question i ask really is when do i start feeling the financial peace that dave talks about because i'm in four five and six and i still don't feel very peaceful in my budget why well i don't know and i think it might just be a contingent thing like you were talking about yesterday but we i mean we bring home 120 000 well our income is 120 000 we're investing 15 we have a hundred dollars going into the 529s for the kids we have the bi-weekly monthly mortgage payments so we're paying that off faster but at the end of the month we might only be able to save like three or five hundred dollars after all the

investments for like our next vacations or for christmas or for the next car we need to buy and we're thinking about having baby number three and it just feels like we don't have enough extra money to do all those things i don't know oh so carol tell me about your debt-free journey how stressful was that where you started well it was it was a little different because i've always been debt free and i married my husband i took my savings account we wiped out his debt and then when he wanted to get his master's degree we moved in with my parents and the cash flowed the whole thing so you guys have been in go mode for a long time yeah i didn't have a typical baby step too when we after we lived in my parents house and paid for his degree in cash we bought

our house and then i don't know it just kind of our budget is different than most people's who like rolled their debt into their savings i don't know so if i hear this correctly you're doing all the steps it's great but you you don't have as much money as you'd like to be able to save to be able to spend to do some things that you want to do. So are your other expenses too high or do you guys just not have enough income based on where you are in your part of the world? I just don't see Phoenix being that crazy. So what's missing here?

Yeah, I don't know. I mean, daycare is super expensive. I have two kids under five and we both work full time. So that's more than our mortgage right there. That's like a $1,500 monthly. And maybe that'll be gone in a year or so. Well, when does the first one go to school? A year from this fall.

So it's still 2023 in the fall. But then that's when we're thinking, but if we have another baby, that's just more, I don't know, we want to have more kids, but we feel like we can't afford it, which feels weird because we're debt-free and we make six figures. Yeah, you can afford it. It's just, it feels like a crunch right now. What if you guys dialed back on the extra mortgage payoff temporarily? Well, yeah, and that's what I was wondering is, okay, and another part of my question is would it be crazy if we dialed back on investing instead of 15% set it down to like 10 or 8% to buy a new car?

I don't want your sweet kids to have to take care of you in your old age because you dialed back investing to take care of them. I thought if I didn't listen to Ramsey and yesterday I got a car loan, today Dave Ramsey would tell me to stop investing to pay off the car loan. So that's kind of where I was coming from. Yeah, but you don't have any debt. George told you to slow down on your extra mortgage payment. Yeah, yeah, that's different.

That's baby step six. How much is that? So let's just be real practical. Yeah, I guess. Well, wait a second. The extra mortgage payment feels like it's only $600 every six months. That doesn't seem that much. But like every month we're putting $1,500 into retirement.

All right. So let me ask. Okay. So let me ask another question. What are some other options for the child care that don't cost as much as you're paying right now? What are some other options? I don't know. We haven't really looked into other options. I'd be looking to other options. You know what I'd be thinking? I'd be going,

what if we found a really awesome grandmother who maybe her grandkids live two or three states away? She's retired. She's very responsible. She wants something to do. What would it cost to pay her to watch our kids versus the very expensive child care? Just something to think about. Yeah, I would be doing a budget audit. I'd go through, are you guys doing a monthly budget and sticking to it? Yeah, we're on every, and that's kind of where my husband gets stressed from. He's like, how come we only have a few hundred dollars when we go over the budget when we're-

Well, it's because you guys are responsible. When the money's just floating away into spending, you're like, we're having a great time and we're not saving for college and we have nothing in retirement you guys are in great shape budget every dollar i'm on it okay i think there's two issues here and i was just kind of trying to brainstorm for you but i would be looking to cut expenses in the child care if possible and then i would be going wait a second let's make some more money you guys want really awesome vacations then what can the hubs do is a weekend side hustle from time to time and pay for a vacation. If he worked, and I'm just making this up, but if he were to go pick up a landscaping job during a really intense season where it's busy or manual labor and he makes four or five grand over two or three months, we just paid for vacation.

Do you see what I'm saying? Instead of being stressed, why don't we get busy? Why don't we go, okay, we want a $4,000 vacation. I'm making that up. Or whatever. Then we go, okay, how do we get that over and above what we're already doing? Because you're doing everything right. Yeah. And if you have those sinking funds in place, you may not have a ton of margin, but when it comes time to go on that vacation, the money's sitting there. So yes, you may not have tons of money extra, but that's because you're putting it, you're giving it a name and that's going towards the vacation. And you're getting ahead. I think you guys need a perspective change. I think you need to see yourselves not as we don't have enough left to spend each month as opposed to going, we're being

very disciplined and we're getting ahead and we're making traction every month. Now, if we want some extra money, go make it. Go make some extra money. Yeah, he's a therapist. I think he could pick up more hours for sure. Of course he could. He's a neat for his job. Of course he could.

And shop around your insurance rates. Go through every single line item, every single premium and go, are we getting the best rate? Let me check. Because you do that. You do that with your cable, your internet. You cut some things. That's a great point. Don't we still have that coverage checkup tool, George? Yeah. RamseySolutions.com slash checkup. It'll tell you what insurance you actually need, what you don't need, and you can reach out to our friends.

I mean, hey, you may save a hundred bucks, maybe more. But hey. But I'd be going through with a fine tooth comb in every piece of my budget going, how can I shave this down? That child care, I'm going to tell you something. And I'm passionate about this because we were fortunate to not have to pay for child care. But there were times where Stacey did work where we did, but we went the non-traditional. We found older ladies who we trusted, who we knew, and we saved a lot of money. Child care is insane how expensive it is.

So expensive, yeah. It is. If you could cut costs there, that would be massive. And remember, it's not forever. So this is not the next 30 years of your life. Yeah, I mean, before you know it, the kid's in school. But I would look the retired grandmother route. Somebody wants to make a little extra money.

Oh, we got a lady jumping up and down in the lobby. She's like, that's me. Sign her up. Does she want to move to Phoenix? I don't think so. She's literally sprinting after one of her grandchildren and she's going to pull a muscle, George. I can't vouch for her, Ken. I don't know her. Yeah, we don't know her. I want you guys to look back at what you've accomplished and write it all down. Write the things that you're proud of that you've accomplished. Write down the things you're grateful for. I think that will help you create some of this contentment Write the things that you're proud of that you've accomplished. Write down the things you're grateful for. I think that will help you create some of this contentment in your life

that you're jonesing for because a lot of people listening are going, oh my gosh, I wish I had that income. Oh my gosh, I wish I was debt free. I wish I had their problems. I got to tell you something, Kerry, you're a rock star. You and your husband,

because you're walking the baby steps out. Can I just tell you, you need to remove can't. You said the word can't two or three times. You can save up money for your vacation. You can make extra money for Christmas. You can do all those things. Get busy.

Ooh. A little mic drop there from Ken Coleman to end today's show. I'm not mad about it. All right. Well, that puts this hour of the Ramsey Show in the books. My thanks to my fantastic co-pilot, Ken Coleman. All the folks in the booth, Kelly, Ben, James, Nathan, Zach, Andrew, you name it. They're in there making the show happen.

And you, America, we appreciate you listening. We couldn't do the show without you. Until next time, remember to spend wisely, save intentionally, and give generously. This is The Ramsey Show. Hey, folks, Ken Coleman here. Did you know the Ramsey show is one of the most popular podcasts in the world? It's your daily dose of advice on life and money. Check out all of our shows from the Ramsey network, wherever you listen to podcasts.