The Ramsey Show - App - Why Americans Can’t Stop “Spaving” (Hour 3)

Episode Date: May 30, 2024

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host today, Jade Warshaw. I'm joined today by your other host, bestselling author, Rachel Cruz. All hour long, we're going to be taking calls about your life and your money. So give us a call. The number is 888-825-5225. And we will do our best to give you our best shot at information and advice for you.

I think it's pretty good. All right. Anna is here from Phoenix, Arizona. Anna, what's going on? Hey, guys. How are you? Doing good. Good.

So the reason I'm calling is because my husband and I have kind of been having an issue with savings. Him and I have a different view on how we should save and what we use our savings for. I love my husband very much, but he has a bit of a spending problem. We will, well, I will start saving and then it'll kind of dwindle to nothing sometimes. We don't have an issue with our payments. We make our bills on time, but it kind of got to the point where I ended up having to make a separate savings account because if he sees it and he knows it's there,

it will be gone. And I just, I don't know if it's the wrong thing. I don't know if I should give him like access to it because this is a cycle. This has happened before where I've accumulated savings and then it kind of goes back down to nothing. And then I save again and then it goes back down to nothing. What's he spending on? Hobbies, mostly like fishing and hunting. So he'll just go and just use the money. You guys don't have a discussion about it. He just goes and does. We do have a discussion, but I think he just gets a little excited and he kind of does it anyways, I think. Even though you guys may agree, hey, we don't really have the money for this,

or this takes us down to zero, and he still goes and buys fishing equipment? Yes. All right. And then what's your reaction when you find out about it? Well, I get upset. Yeah. He's a child. He's a child. I mean, he sounds like my six-year-old i'm like dude you got you have a wife and kids you can't spend all of your money

so yeah and i mean i yeah i mean i think that there's definitely a fairness in saying i don't feel safe i don't i don't feel like you're not valuing i'm gonna be taken care of. So I'm going to have to go and completely make my other plan. But the issue here isn't all of that, right? Like this is always the symptom of other things that are happening and things within him that are extremely immature, very impulsive, and extremely disrespectful to you. And have you guys seen a marriage therapist or a counselor? We have. And it has gotten a little bit better. But like I said, it just kind of makes me a little bit nervous because he wants access. How has it gotten a little bit better? I kept the savings now for a few months. So it's gotten better because, yeah, you have your own account.

Um, yeah. And I've been able to keep the money there for a few months now. So, but he hasn't gotten better. You've just taken upon yourself to kind of go off to the side because it's your only option seemingly. Uh, yeah. And I think it's causing a lot of issues. Yeah, I totally know. I mean, I, and Anna, you're not in the wrong in this, right? I mean, like you're protecting. Do you guys have kids? We do. We have a six-year-old and a two-year-old. Okay, okay.

If I were to ask him, like, what are you guys' financial goals, what would he say? He would say that he wants to pay off his debts. Okay. Do you guys sit down and do a budget together uh yes but i think we have an issue sticking with it i think that's the hard part yeah in it yeah i mean i mean anna you there's two ways of going about it it's either that you know you keep doing what you've been doing of protecting yourself but you're going to further and further alienate the relationship so what i'm saying is what you're

doing i would do so it's not a but but over time that ends up hurting the marriage long term and so i want the marriage in a place where you guys are so unified so on the same place and that he respect that he i mean it's a sign of disrespect in, in my opinion. It's very unloving what he's doing to you. Very unloving. And I mean, Anna, this isn't to scare you, and I hate to even throw this out there. We just had so many calls recently like this. And then we're talking to people in their 50s,

and the wife is like, I'm scared I can't retire. And you're like, he either grows up or you leave. Like, I mean, there's a point that you're like, you can't sustain a life when you have two children and then basically a third child that you're trying to parent as well. Right. In a sense, like with him emotionally. So, yeah.

So I don't know. And I mean, I would give some pretty, I mean, and I hate just like throwing out ultimatums here, but the problem is, is that you guys can't function like this in a healthy marriage long term. It's not going to work. And so there's an ultimatum of, hey, we things have to start to change. Yes. And we need to start actually doing a budget and actually sticking to it. And that's him keeping his word that you guys sit down together and it's his debts, your debts. But I would go in and say, I want to do a team,

a team aspect. But until I see change in you, I'm still going to keep this over here because I don't have a choice. But from here on out, let's put all the debts on the table. Let's put all the income on the table. Let's just look and see and let's create a plan. And if things don't start to change

by just both of your efforts, you need to pull in a third party. And I would go back to a counselor. But then there's a point, and I'm yeah you can't you can't survive like that you know I 100% am with Rachel and unapologetically so for you yeah I think there's nothing wrong with creating that line in the sand and saying here's what I need to see and here's why because Rachel I mean I'm not even going to rehash what you just said. It's so unreasonable. And there is, you know, I hate to throw around the word

expectation, but I do expect that when I'm in a relationship with someone, I have to see that goodwill of like, I want to see you trying. If I can't see any effort, like you're not going to be perfect and it might take a while for him to 100% get it on track. But I need to be able to see some movement. And the fact is, we haven't seen that. And you're like, no, I had to just move the money over here. And that's still a problem. So I'm like, oh, yeah.

I draw lines in sand. Yeah, I know. And I'm saying all this as a spender. Like, you should see the Amazon packages show up on our door. Because I do, I spend money. I enjoy spending money. I enjoy clothes. Like I have like, you know, I, so I get it, but I do it through a plan and I do it with intentionality before the month stopping knowing, Hey, I have this much to spend. Once I'm done, I have to stop. And you know what I mean? Like this so like you can be a spender he can have hobbies and have fun it's not like he can't have a life but you have to on a basic level

be able to support your family and not put them in a dire situation of draining all of the money to go freaking do your fishing hunting stuff like yeah that's a like that's a child that is a child and my assumption is usually Jade Jade, and this is always a scary thing to throw out there, but usually my assumption is when it's a level of immaturity of decisions being made there, it's probably trickled into other areas of your marriage too, Anna. And so I'm so sorry. I would do what you're doing though. I think there's a level of protecting you and your kids to make sure you have the money to pay the bills. But if you guys can't sit down and as a team,

create a plan, like Jade said, lots of grace. Like as you start this whole new process of budgeting together and really trying to stick to it. But if he doesn't make changes soon, I would go pull in a third party and then there's gonna probably be more serious discussions to be had. So I'm so sorry.

I'm so sorry. This is The Ramsey Show. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Rachel Cruz. And I'll tell you what, Rachel, it seems like every time I turn on the news, especially like financial channels, Fox News, CNBC, I hear this word, this term term being tossed around and I think it's kind of a funny term it's called spaving yes I'm like when people combine words it's the worst but it's like spending to save combined and so CNBC came out with this article but like I said it's everywhere and it says Americans can't stop spaving so here's how to avoid this financial trap so let's kind of talk about what it is you're spending more to save and it's kind of becoming a

pitfall like you're just yeah ending up spending too much well and i think i think merchants know that if they can throw up a sale you're more likely to go shop right uh because you feel like psychology wise right that mentally oh well i i'm saving money and there's fomo too it's kind of like the girl math of like oh my gosh i saved 50 and the question's like well how much did you spend and you're like well well but i saved 50 dollars um so yeah i think these like these sales flash sales buy one get one free limited time only free shipping i mean they they have a lot of this because they know people they fall into it now if you were originally going to buy the item yes and

it happened to have a great deal and it's on sale or you wait for a sale to buy the item or something right it's a planned thing take advantage of it it's fantastic but i know for me jade i go on my gmail and i refresh and i have about eight emails from stores and it's like 20% off this, this, this, this. And I would have never known, never have known that J.Crew had a sale unless they emailed me. Listen, I have to go through and unsubscribe. I know, I need to. I love Good American and it's like I unsubscribe. But then when I buy something again, I'm right back on the list.

And I'm like, come on, man. I know. You know, and so. It is. It's so,'s so so tough so i think a couple of things to do just to watch and be aware because again if you have the cash if you're originally going to buy it this is great take advantage of the sale george camel he's the he's the king of all of that i feel like he watches deals when he wants to buy something and waits for it to go on sale but you have to ask what did you come here for yeah but this is this is more splurging this is more more that kind of like off-the-cuff spending, if you will, that you have to be

careful of. It says spending to save can lead to excessive buying habits and high interest credit card debt if you aren't careful. It says spaving encompasses all the ways that buying decisions are rationalized. Yes, amen. I don't want to miss out on the sale i mean if i can get this one for free i may as well go ahead and get this and i was only coming for one pair of jeans but if it's buy to get the second the third 50 off might as well get listen i fought for it every time i know i know on the jeans so so yeah so i think a couple ways just to watch it because this is saving habits that really do affect you know, it really adds up over time. So number one, Jade, it's what you said, but I do.

And I tell people to do this. I need to go back and do it myself is is unsubscribe. Right. So whether it's people you follow on social media and they're like a fashion blogger and you just happen to like constantly see new things that are out there and attempt you or emails. Anything that's just around, just unsubscribe for a while. Yes, I think it's key. And then also just have that dollar limit on anything, right? That's why we love the budget. Because then if a sale does come up and you're like, okay, I was going to buy a pair of jeans.

Can I afford another pair? Is it worth the deal? Was I even going to do that in the first place right so I think having that price point too in your head yeah is really important it takes a lot of discipline then to stop because it's so easy just to and here's the thing Rachel sometimes okay I'm about to throw a wrench in the plan because sometimes I feel like there is a deal that pops up that you're like, this is beneficial. This is good. And so I know on the meal planning tip, I'll say save for sales. Have a little fund that's there for you because sometimes they do have really great deals on stuff that you know you're going

to eat, you know you're going to use it. And so I feel like there is a way to save for sales and have it there so that when that great opportunity pops up you're ready for it yeah and you've budgeted cash basically totally well that's what i was gonna say too is take advantage of it that'd be the third thing so if it is in your corner to be like oh no this is actually going to be an advantage for me or like publics does buy one get one free but did you know that if you just buy the one item they give you half off price wise no i did i was today old. I was today years old when I found out. Publix, that's what they do. So there's like deals within the deal. So you don't actually

need the both items. You can just buy the one and it's half off. Listen, I feel sheepish. I really do. I am so shook right now. Oh man. You're welcome, Jade. Thank you, Rachel. I am a changed woman. Well, I heard about it years ago and I was like, no freaking way. So anyway, so yeah, take advantage of the sales because either you have the money that you're saving for it or they have a little deal within the deal and you can still just buy what you're going to buy and you get a better deal off that too. You want to know who, that's excellent. That's excellent, number one. But do you want to know who I think is the worst at this, but I also love them very much is Wayfair.

Oh, yeah. Because they'll have the real price. They'll have the price. And then right next to it in like purple, they'll have what the price used to be with the line through it. Yes. And then right next to that, you can tell I go on there a lot. Right next to that, they'll have like 65% off.

But it never changes. And I'm like, they'll have like 65% off, but it never changes. And I'm like, and it doesn't tell you how long it's going to last. So I have to say that is the hardest one for me, because if I'm looking for something for the house, like Real Talk was looking for a Murphy bed for our upstairs playroom. And the one I liked was 50% off. And I mean, it's a decent amount of money. And I was like, I was like, Sam, I think that we should get this because it's on sale. Yeah. And then I had to tell myself, Wayfair is always on sale. Yeah, that's right. It's always on sale. It's always there. But it is a psychology game, though, right? Because you're like, oh, my gosh, you see the sale where the truth is. I mean, I don't know that the whole situation, but I'm like, you know, you could have

another great Murphy bed somewhere. It might not even really be a sale. Yes, but I'm like, you know, you could have found another great Murphy bed somewhere. It might not even really be a sale. Yes, but that's it. But they trick you into making you think that it is. When you see that red slash through it, like we've slashed prices. What always gets me is the free shipping because I'll be like $7 for free shipping or I could buy $15 more of, you know. You actually get something. Yes.

And you actually get an item. But you're in, in there you go spending 10 more bucks for it that i never really needed i don't know it's hard jade it is hard the temptation is real so all that to say just don't get sucked into it you guys if you weren't going to buy it in the first place stick to your guns don't don't fall for the sale just because just because it's a good good deal doesn't mean it's a good deal for you that's right oh my gosh it's tough i am reaching to myself in this moment i'm not gonna. I feel like I fall for this quite a bit. All right. I think we have time to take a quick one from Jessica in Boston. Jessica,

we're up against the clock. What's going on? Hi. So me and my fiance are going to be married next month, in which case our debts will be combined. I'm debt-free except for the mortgage on a condo that I have. And he just has about $10,000 worth of car debt. My question is, he owns his own construction company and he just became a contractor and he really wants to try to flip a house. So my question is, do we save for doing that project for him or do we work towards paying off the mortgage or do we do both? How much is left on the mortgage? $166,000. $166,000 on the condo. Yes. And he's a contractor. Is he going to be working for somebody? So he would be the head of the flip project he

wants to do it through his construction company and be the general contractor for the project yeah but he will be i mean if you guys weren't putting up the money he would have someone else that he's just doing it for oh we would buy it with a mortgage i think like a yeah no no but i'm saying say that was off the table though though, and he's a contractor, though. How will he be working in general? Not with your money, though. Like, does he have a company? Will he go work for a company and they're going to do construction on new builds? Or like, what's his job? So he owns the construction company. So he like owns the employees that would be doing all of the work. Yes, I understand that. But I'm saying if you guys weren't, oh no, you're fine, you're fine. If you guys weren't going to take a mortgage out,

what would he be doing for work? Oh, he would just, he has jobs that he goes and does. Okay, that's what I was going to say. He has clients. Perfect, perfect. That's what I was going to say. Okay, so what I would do, Jessica, yes, is pay off your home first.

And is that the condo that you guys will be living in is yours? Eventually we want to own our own And is that the condo that you guys will be living in is yours? Eventually, we want to own our own home and sell this condo. Okay. So he was going to do that job to kind of try to help

pay down the condo. Gotcha. Yeah. Yeah, I would pay down the condo, pay it off, and then you guys save for the flip

on everything else that he's doing. I would start small. And I say that as a wife of a flipper. That's what Winston's doing now. He has four right now. And it's taken us a while to build some inventory. But also, the beautiful thing is when the market is not great, Jade, and those houses sit for a bit,

you're not stressed trying to pay a mortgage on something that, oh, and then you get rushed and you do a bad deal. We have so much patience because time is on our side. We don't owe anyone anything. So we're going to wait for the deal. So doing flips with your own money, no mortgage is the way I would do it. You are listening to The Ramsey Show. I'm Jade Warshaw, joined by Rachel Cruz. And we're taking calls about your money. And so many times, Rachel, the calls that we take day in and day out,

they really boil down to people not having a plan, not going in with a prior set of goals with their money, not being on the same page as their spouse with their money. Somebody's overspending, but there's no real parameters there. And we found time and time again that really the crux for everything that we teach about and talk about is it all goes back to the budget. I mean, we talk about a series of baby steps, right? Seven steps really to get you towards financial peace. But in order to make that happen, you've got to have a budget in place, a great budget in place.

And we have that for you. The best budget app in the world. It's called EveryDollar. And it's the best way to make the most of your money because you create and stick to a monthly budget. This becomes a monthly habit, a daily rhythm in your life. EveryDollar makes it so simple to plan your spending. You can track your transactions and you can have the ability to save for what matters most to you. And that's everything from an emergency fund to saving for a vacation. And you can do all of this in an easy to use app. It fits into your busy lifestyle and it fits into

your pocket because it's on your app. It's on your phone. Of course, you could use the desktop version as well. So use EveryDollar. It helps you keep a pulse on your spending. It helps you make progress. Instead of excuses, you can make progress on these goals with EveryDollar. So today, download EveryDollar. It's the free app. You can find it in the Google Store or on the App Store instead of excuses you can make progress on these goals with every dollar so today download every dollar it's the free app you can find it in the google store or on the app store today trust me it works do that today all right we've got chance uh he is in phoenix arizona what's going on chance how are you guys we're doing all right how about you? Doing the best I can. So I just recently moved to Arizona with my wife.

And a couple months ago when we moved, we got sick. I was out of work. She's still out of work. We've built up a lot of debt. We have about $40,000 in total. Fifteen of that is credit cards. Five of that is medical bills and then 20 like 20,000 of that is a car that I had to get rid of um we're three months behind on like actual bills rent car insurance and phone bill I just we don't know where to start we really we're trying to get out of debt but we don't know where to start what happened really were trying to get out of debt, but we don't know where to start.

What happened when you got sick? What do you mean by that? When me and her both moved out here, we ended up falling or we ended up getting COVID and I fell out of work for about two weeks, three weeks. My wife ended up losing her job due to not being able to go and work. And then she ended up getting hyperthyroidism. And she's just been dealing with all that stuff and trying to get all that figured out. She's just recently started, like, doing better. And she's searching for a job now. It's just more so we feel like it's way too late for us to even get caught up at this point.

How old are you guys? I'm 27. I just turned 27 a couple days ago, and she's 25. And what kind of work do you get? Like, what's your specialty? I work for the state. I build gas stations, do the testing on the fuel, like diagnosis and repairs. Okay.

And how much are you making a year? A year, it's about 50,000, give or take three to 5,000. Sometimes we get bonuses. They just told me last year, everyone got like a $5,000 bonus. Okay. And what was she doing? Not banking on it, but it would be cool. She was working at a dealership doing like the rental part of it, working with customers and handing out rental cars. Okay. What was she making? She was making, I want to say it was 40,000 a year. So we were sitting pretty good. Yep. And then you started just getting behind. Okay. So are you back to work full time?

Yep. I'm back to work full time. She unfortunately isn't. She's looking for a new job. Okay. And prospect wise, do you think probably in the next 30 days she'll have something? We're hoping. Okay. We're really hoping for that. Yeah. But if not, she could go retail or something, right? She could go Target's paying like 18 an hour or something. She could go do something though, right? Like if in the next 30 days, if she needed to bring in a paycheck, because you guys are in a pretty, I mean, a pretty serious situation. I mean, three months behind on everything. Yeah, you're going to, you guys are going to have to do, you're going to have to do a lot more than what you were even doing just to get on solid ground

because you can't start paying off this debt when you're behind so we want you current on everything so that will mean extra jobs that's going to mean you working probably nights her probably working nights do you guys have kids no oh good okay so that's helpful that is good what's your living situation rent or mortgage uh rent and what's your we're, rent or mortgage? Rent. And what's your... We're currently paying $1,100 a month. And you're behind three months on that too? Yeah, I'm very thankful that our apartment complex, the landlord has been very like on point helping us out and telling us we don't have to pay the rent just yet.

Okay. So I mean, we'll have to end up doing double payments in a couple months in the future. Yeah. Okay, so you were bringing home about $4,000. So let's say, I mean, if she can get, you know, $2,000 a month, starting out $3,000 a month. Yeah.

What do you think, Jade? I mean, with the hyperthyroidism, I know a little bit about that, but I don't know a lot. It's not keeping her from working at this point, correct? Is she managing that? Yes, correct. There's a lot more that goes along with that. In Oregon, they had her on the wrong meds and all that, so it was really messing with her, not helping her at all. But she finally got back on the right meds. She's ons and all that. So it was really messing with her, not helping her at all. But she finally got back on the right meds.

She's on track and all that. She's been doing DoorDash for about three weeks now. Okay. She's helped me. She's brought in about $500 in three weeks. Okay. I agree with Rachel. I think that she can step it up a level.

I love that she's doing DoorDash, but I truly think she can get like an hourly job and get one of these $20 an hour service jobs relatively quickly and do that in the meantime until she finds where it is that she wants to land and kind too I think that you're in a lucky position that there's not children in this relationship because you guys can work all hours of the day and it's not going to be fun to do but I truly think you need to do that for for many reasons yeah and I yeah it's only for a season but I think you guys's confidence is is hanging by a thread right now you got knocked out with you know being sick for several weeks and then for your wife it ballooned into something more serious and you lost your jobs and you've just been you know living on a prayer and i think that you guys need us you need some wins and you

need time to not be dwelling on this and there's a really great place to keep your mind occupied when things are tough and i that's working yeah for sure and bringing in some cash chance talk to me about this twenty thousand dollar car how much could you sell it for um unfortunately i i did try to sell it but i couldn't find anyone to to actually buy i was searching for about three months um so it's overpriced i mean it's overpriced but also it it was a it was a volkswagen gti and it completely just broke down on me when i went to go and get a quote to have it fixed i got told it was nine thousand dollars to fix it and i didn't have that money and at that point i kind of just told the

bank to come and take it oh oh shoot shoot. Oh, so it was repoed. Yeah, so I know I messed up there. Okay. Yeah. Okay, so you owe $20,000, but you don't have the car. Yep. Okay. Okay, so yeah, what I would do, Chance,

I think Jade is right. I think for you guys to have some wins is really important. And so we're going to give you every dollar premium, the budgeting app and Financial Peace University, because this budgeting app, it's going to help you guys navigate. Here's the money coming in. Here are our bills.

Basic, not catching up, just basic. How can we pay rent this month? How do we not get behind on everything? And then that's going to probably show you some red. Your number is probably going to be red and it's going to be red. And it's going to say you need, you know, $2,000 more, whatever it is to stay current. So that's going to help you see, okay, how much more do we need to bring in to stay current?

And then the goal would be that you cut all your expenses. You guys do nothing. Cut up the credit cards. I mean, there's nothing going out that is not your money because you don't want to continue to dig in this hole. And then be able to say, okay, how much more do we need to have margin? Because that margin then is going to be extra money to start paying back some of these back bills.

But I would be paying rents. I would be paying all of that before your debt. Before your debt. You guys need to get caught up first and foremost on your necessities, which are your bills. So make sure you guys do that. But hang on the line. Christian's going to pick up. But that your bills. So make sure you guys do that. But hang on the line. Christian's going to pick up.

But that's one of the best things you guys can do. Sit down tonight and do a very detailed budget and see how much more income you guys got to bring in. You're listening to The Ramsey Show. Hey, thanks for hanging out with us today. I'm Jade Warshaw, joined by Rachel Cruz. Scripture and quote of the day. Consider it pure joy, my brothers and sisters, whenever you face trials of many kinds, because

you know that the testing of your faith produces perseverance. That's James 1, 2, verses 2 through 3. Then Beyonce says, come on, Beyonce. She says, if everything was was perfect you would never learn and you would never grow so true so true you need a lot of wise words from from two different great sources I know I like it we got James and we got Beyonce Queen B I love it it is true and I feel like we've taken some some some calls today of some trials Jade in the show and I think it is though I think it is something beautiful that's what faith does is it does give you hope because trials are going to happen it's

not if it's when and they may all look different it could be health relational financial whatever that is for you but um but there is there's a belief in something bigger that's going on and there's a hope in that that's really beautiful and it turns you into who you're supposed to be yes you know i think that's the great thing it's like when you learn from these things and when And there's a hope in that. That's really beautiful. And it turns you into who you're supposed to be. Yes. You know, I think that's the great thing. It's like when you learn from these things and when you allow it to shape you, at the end of the day, you probably wouldn't take it back because it changes the trajectory of so much. That's right. Love it.

All right. Let's take a couple more calls. We've got Jenna who's in Atlanta, GA. What's going on, Jenna? Hi, ladies. How are y'all doing doing good how about you doing well so I've been following along with the Ramsey program for quite a while now so I have paid off all of my credit cards my emergency fund I know right yay yes my emergency fund I have it saved up to 2.7 months,

which equals out to be about $9,600. Yeah, girl. So now, I know. I've been working. I'm telling you. So now my question dealing with debt two on the debt snowball. So as it reads, you know, you take your smallest one and pay it off and then escalate from there.

Now, my smallest debt is sitting at 0%. So, back story, when my ex and I bought the home that I'm currently in in 2017, because I had no debt until then. Everything was paid off, no credit card debt, no student loans, like I paid my master's degree off in cash, you know? Um, so the house that we bought, it really needed a lot of work. Um, when we bought it and it took a couple of months for us to get stuff done before we could even move into the home. So once we moved in, my savings was pretty much so depleted at that point. Um, and then in 2019, he and I, you know, we were done, he's left. he's left and ever since then it's kind of been one thing after another so I ended up having to take out my first loan that's at 7.26 percent

to pay for my attorney how much and I have it sitting at 9,500 right now as we speak and then very shortly after that happened, my HVAC system in the home just completely quit. I had been putting money into it to try and keep it working and it just, it got past the point of being able to save it. So would you shell out for it? That was an $8,000 spend, but it was at 0% and I have it down to $4,500 right now. Okay. What else you got? And then I have a truck loan that's at 7.75%. I had a... How much do you owe on it? What do you owe? I'm at $11,300 on it. Okay. What else? The GMC that I had died on me. What else you got? What other debts?

I had surgery in December. So now I have a medical bill. How much? That is at 15.56% at $14,000. 14K? Okay. Is there anything else? Nope. That's it.

Other than my mortgage, that is all. Okay. But you did say that you have $9,600 saved. Did I hear that? Yes. Okay. And how much are you making a year, Jenna? How much are you bringing home? So last year, I'm salary. I was 78,500 with a net of 62. And then I got a raise in March of 84,000. So I don't know what my net's going to be quite yet. But I did get that raise. Okay. That's great. Yeah. We'll say 75. Okay. So let's see. I guess I'm just trying to tackle this in a way that decreases my overall

interest pay. Yeah. So that 0% I'm wanting to put at the back burner. You know what I mean? I get that. I get that. You know, you started with the interest rate on a lot of these, and it's going to feel different that what Rachel and I are about to tell you because you're very focused in on the interest rate. But the way we teach it, we're not focused on the interest rate at all. The way we teach it is we just want you to get a really quick win. Literally, psychologically, your brain feels that hit of dopamine and you get that feel good feeling that's like, yes, I did something. And that creates motivation for you to keep going. And so psychologically speaking and what has actually been studied to be the best method of paying off debt, a method that people will stick to and actually complete, is a debt snowball method where we're not considering the interest rate. We're just listing them smallest to largest. And perfect example of that is your first debt would be this $4,500 that you've paid down. It'd be gone instantly.

Yeah, yeah, you could pay that off today. And then half of the $9,500 debt. Yep, it's down to, yeah, 4,500. And then you just keep 1,000 saved for your baby step one. Yep, and then you can knock that one out. And then what's left would be the car and then the medical. So you just kind of, you start working your way down, but you already have, you already can feel the progress being made even in that. So it's not, yeah. I mean, because the truth is if all this was just a math issue, people, we wouldn't be in debt, right? We would just do math and stay in the green all the time. And so it really isn't. So there is something powerful about knocking some of this stuff out.

So yes, mathematically, I understand and I see what you're saying, but personal finance, Jenna, is so much about behavior. I mean, we say it's 80% behavior, it's 20% head knowledge. So the head knowledge, the head knowledge the math piece is such a small percentage of you actually winning how you're going to win jenna is you it's not a seven percent versus a five percent whatever whatever it's jenna jenna's the one that's actually what is the secret sauce like you are the one that's going to be able to do this so um if I were you jenna I would have your job. I would work. I'd work extra, find the side hustle to do three nights a week. I mean, if you really, really limit lifestyle and attack this stuff, I mean, you could be

out relatively quickly. I mean, honestly, like there's so much there. Really kind of where I got started with it. I had the position that I have. I'm a nurse, but I work for the insurance company and I was working my regular team. And then I had an extra team that I worked on the weekend. And then we got laid off of that weekend team because we lost the contract for that particular facility. So that, that kind of got wrenched on in the system because I was making really

good progress until that happened. Yeah. As far as lifestyle goes. How much is like, yeah, limited everything. How much is like your, how much is your mortgage? I don't even like my eyebrows anymore. How much is your mortgage? My mortgage is $1,100 a month. I have $166 left on it at 3.1%. Okay. So, I mean, I'm just doing rough math here, Jenna. But gosh, if you're bringing home $7,000, because it's probably net $75,000 after your raise, you'll be bringing home a little over $7,000. So I'm like, God, if you can get that $5,000 paid off in two months, find that margin, that could be knocked out.

And do the timeline on this too too because that can be June and July and then say, okay, let's add another three months for that $11,000. So I'm going to work extra. You got August, September, October. That's out. And then you got October, you got November, December, January, February.

I mean, by February, that $14,000 could be paid off. Like you could be- In under a year. Yes, less than a year, Jenna. All this could be paid off. I'm hoping so. I'm'm really trying y'all because i already have like a plan in place for what i'm going to do whenever all this is paid off like i want to walk my way for myself i love it 529 for my daughter put that effort into a plan of this debt payoff i mean seriously like map it out be detailed because what what is so great jenna is and you probably, if you go on YouTube,

can see some of these calls, but these debt-free screams that come in, people come in with these charts and they're charting, you know, every single day. They're so specific because they have this timeline of, I want to be out and X amount.

And it's realistic. This isn't like woo-woo thinking, like realistically, that's a lot of hard work. It's no lifestyle. It's working extra, all of it. But make a plan, Jenna, so that you can see your way out of this. And do the smallest to largest game.

Don't be playing the math game all the time. Do something that's actually going to encourage that behavior and get progress. So you're going to do great, though, Jenna. You really are. I think you're in a great position to make some big changes. Hop onto EveryDollar. And make sure you get the premium version so you can check out the financial roadmap tool so you can really see the timeline on all of those things, not just

the debt payoff, but even what you were talking about, the investing and the saving for the future. It's a great way to stay motivated. We're rooting for you. We know you can do this. This is The Ramsey Show. Thank you.