The Ramsey Show - App - Why Grocery Prices Are Up and What You Can Do About It (Hour 2)

Episode Date: January 16, 2023

George Kamel & Jade Warshaw answer your questions and discuss: Saving for a new roof, How much money to set aside for taxes, How to save money on groceries, from the blog: Why Are Food Prices Going Up? "How can I maximize my wealth with the baby steps?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio. It's the Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm your host, George Campbell. Joined this hour by Jade Warshaw. We're taking your calls at 888-825-5225. You jump in, we'll have a conversation about your life and your money. Phil kicks us off in Macon, Georgia. Phil, welcome to The Ramsey Show, my friend. Hey, thanks for taking my call. Absolutely. What's going on? Well, me and my wife are working on baby step one.

We purchased a home in May of last year, and between then and now, we switched insurance companies for the home insurance, so our payment would go down. We could bundle some of this. It would just help us out a little bit. that insurance company that we went to sent some inspectors out to just kind of look at the property and they said our roof was old now we knew our roof was on its way out when we bought the house the insurance people are telling us that we have until September of this year to switch the roof over or the insurance will act now I want to get through Baby Step 1 first, but my question is, once we get that $1,000 emergency fund, should we pause on Baby Step 2 and just sock money away

for the roof? Or what would your recommendation be there? Absolutely. I mean, this is what we would call kind of a storm mode. Number one, you've got to cover the four walls before we do anything else, food, utilities, shelter, transportation, and you literally need this roof over your head. And your home insurance lapsing could put you in a really, really dangerous scenario. And so are you going to be able to cash flow the new roof or the roof repair? What does this look like? Right now, no. We've cut all the expenses we know to cut. I'm working 60 to 70 hours a week at my job. Now, my wife will be taking up a job,

hopefully at a hospital here before too long. She's a registered there. She's just waiting on a license to reinstate back to Georgia. Great. So after that, we should be looking pretty good. She said a low ball would be like $800 extra a month. So that would really help. What's the roof going to cost? Average cost, it looks like it's going to be about $5,000 to $6,000. Okay. We may be able to squeak by a little under that, but I'm not sure exactly. And what are your minimum payments on your debt? Are you able to afford all the minimum payments and keep all your bills current? Yeah, we're good right now. Hers would just give us a little bit more margin to kind of knock Donald out of the debt.

Because you should be able to do this with her extra $800, and you've got, I'm guessing, a few extra $100 you could throw at this roof right now? One or two hundred extra, yeah. Okay, so that would put it at about six months of saving to pay for this roof. Sounds about right. Which means by the summertime, this thing's done, and we're continuing on with the baby steps, attacking that smallest debt next in baby step two. Cool.

That would be my plan. My plan would be, let's try to beat that goal and say, hey, can we get this money saved up by April, by May, so that we don't delay our debt freedom any longer? All right. So I'd be continuing to work those 60, 70 hours. Let's hope she gets that job and works as much as she can. Let's get a bunch of estimates to see who's got the best bid on this job and then move forward from there.

Awesome. All right. Thanks so much, Phil. Appreciate the call. Jesse is up next in Memphis, Tennessee. Jesse, welcome to the show hey thanks for having me guys absolutely what's going on uh so general question uh we are in baby step one and i started uh side hustling and i was curious on how much I should withhold from that since it's cash to pay for taxes at the

beginning of next year. That's great. That's a really good question, Jesse. I'm happy that you're thinking about this because so many people, you know, they start on a job where they're responsible for the taxes, the 1099, and then tax season rolls around and they get hit with a bill. So I'm really happy that you're thinking about this, especially early in the year. So what I would do anytime I used to be in entertainment and then a lot of times we would get paid just a flat rate and we were responsible for the taxes. And so as good measure, what we would do is just set aside, you know, 25 to 30% of the earnings and put that with our quarterly estimate. And that's how we made sure that we didn't get hit with a big tax bill at the end of the earnings and put that with our quarterly estimate and um that's how we made

sure that we didn't get hit with a big tax bill at the at the end of the year awesome yeah my wife was the one who i didn't think about it at all i was just i'm focused on making extra and she said hey you know make sure you hold out for taxes. That's a great idea. How much? Yeah, you don't want the IRS on your back, man. How much are you bringing in, 1099? Well, I just started last week, and it's probably going to look like maybe $500 or $600 a month. Okay. Yeah, just put a quarter of that aside, and then you'll be ready when that tax bill comes. And what I did when I was doing side hustles is made quarterly estimated payments. And I did that

through the IRS website, make sure it's official. But that really set me up for success because at the end of the year, I didn't have this giant bill to pay. Instead, I was keeping up with it throughout the year. And you can actually get dinged with penalties and fees if you don't make those quarterly estimated payments. That's exactly right, George. George makes a really good point. So I would go on the IRS website. You can just search quarterly estimated payments and begin making payments. Again, it's estimated.

So if you take, hey, I'm going to put 25%, 30% and pay it to the IRS every quarter to keep them off my back, they'll be happy. Awesome. That sounds like a great idea. What are you doing for side hustles? DoorDash. Okay. How much are you making in DoorDash? Because a lot of listeners out there are wondering what's worth their time, what's going to make them the most money? Well, last week was my first week and I averaged $26.55 an hour. Nice. I did it for, I did three evenings, so it's almost nine hours is all I put in, and it was $26.55 an hour.

That's great. And you're doing this to pay off some debt? Correct, yeah. Well, we're in baby step one. We just started this month, so we'll have that baby step done by the end of the month. So next month we can start pushing my snowball off the cliff. How much debt? Say that again?

How much debt? Oh, Lord. say 26,000 credit cards and maybe 80,000 in cars. That's a lot of cars. It is. I'm wondering about those cars. Yeah, my wife was considering selling her car, but when we financed it, she was upside down on the other one, and she went to Kelley Blue Book to see how much it was worth. What's your household income?

Yeah. Household before the DoorDash was right at $100 per year. All right. You guys need to get out of these cars. Yeah, the good news is you're willing to do whatever it takes. The bad news is whatever it takes happens to be selling one or both of these cars. Yeah. This is just too much car for you, man. That's over way over 50% of your household income tied up in a depreciating asset. And it's drowning you guys. And I want to see the side hustle

be put to work. And getting rid of these cars will definitely get you there. Appreciate the call, man. Way to go hustling. This is The Ramsey Show. welcome back to the ramsey show i'm ge George Campbell, joined by Jade Warshaw this hour. Well, guys, if you're wondering whether to buy or sell a home this year, here's what you need to know about the housing market. There's still more demand for homes than there are homes to buy. The median home price is expected to keep rising just at a slower rate, and interest rates likely haven't stopped going up. So what does that mean for you? Well, if you're buying a home, you may still face some competition and big price tags. And if you want to sell your home, chances are that you can still make a nice profit, but you may have to be patient for the right offer to come. It's not going to happen overnight.

Of course, this will depend on where you are. Every market is so different, and it's why you need to work with an experienced real estate agent when you're ready to start the home buying or home selling process. You want someone who's done this a hundred of times before and knows how to negotiate a strong deal based on this current market. And you can find agents like that who are Ramsey trusted through our endorsed local providers program. These are top performing agents around the country who we trust to serve you well. Get connected today at ramseysolutions.com slash agent. That's ramsaysolutions.com slash agent. James is up next right here in Nashville, Tennessee. James, welcome to the show. Hello. Hey, what's going on? How you doing? I'm doing great. First of all, I'd like to thank you all for taking my call,

and thank you for your show. It's been very helpful. Absolutely. Glad to hear it. What's going on with you? Well, I sold my house, and I'm sitting on about $240,000, and it's just sitting in a bank doing nothing for me. And also, I have some annuities as well that are matured, which I'm looking to maybe dollar, I can start collecting on that, but it's like a long-term payout, you know? So I thought I might start getting that, have it all deposited into a bank account and maybe dollar cost average that into some sort of investment that's maybe a diversification

of things at a little higher risk and some more safe. How old are you? I am 62. All right. Do you have any other retirement? Do you have a nest egg? Well, my income is tax-free. It's annuity as well.

And it was from an action I had been in years ago. And it's pretty good. I mean, my income is pretty good. I get about $5,500 a month. $5,500 a month. $5,500 a month. And it's tax-free. And it's all tax-free. And is that guaranteed for the rest of your life or what?

Yes, it is, yeah. Okay. And that's essentially your retirement? Yeah, yeah. Yeah, it is, yeah. All right. And you said you sold the house. Where are you living now?

Actually, I've got another place just right across the river here on the Cumberland River. And I'm doing the same thing here, just a little RV property. I'm looking to live a more traveling type of lifestyle for a while while I can. Don't too old to do it. And I have another property up north, which I was going to develop it and put a barn on it, make it RV friendly, like a seasonal-type property up there. And is the property paid off? Everything's paid off.

I'm debt-free. Oh, I love it. Oh, wonderful. Okay. And what other money do you have in savings? You said you have $240,000. Any other cash? Well, that's about it.

And I have about $60,000 in the annuities I was telling you about. They're pretty much matured. Two of them are. I've just been letting it ride for the last couple of years because I wasn't exactly sure what I wanted to do with it. And it's a long-term payout, too, on some of that, probably most of it. So I was thinking about taking that. And like I said, dollar cost.

And to have that deposited into an account and I find the right investment to have that dollar cost. And, you know, I'm thinking there could be some bargains going on with the way the economy is. It's getting ready to tank. I like dollar cost averaging, and if you want to do that into mutual funds, index funds, don't do this into single stocks or anything volatile, but that would be a good plan. And the rest of the 240, if you're going to need it liquid cash in the next few years for anything you're doing,

I would put it in a high-yield savings account for now. But if you're talking four, five, six-plus years out, you can invest that. And I like the idea of dollar-cost averaging it. You could also lump sum it. Yeah, yeah. I'd like the dollar-cost. You know, this way I get to ride the market on its way down and a little bit on its way back up and maybe let it sit up. That's good. Sit back for a while and then go ahead and cash it all in its way back up and maybe sit up. That's good.

Sit back for a while and then go ahead and cash it all in in a few years and then just live off the rest. Absolutely. I mean, I kick my lifestyle up a little bit as... Well, I'd be looking at my future goals, James, and going, all right, do I want to put this towards the farm that I want to rebuild? You know, you want to have liquid cash for that. I don't want it fluctuating in the market and you take a big hit on it because you wanted to invest it and all of a sudden the

market dipped a little and now it hurts emotionally to take that money out at a loss. So leave as much as you need in cash in a high yield savings account. That'll grow at about three or 4% right now in a good online high yield savings account. The rest I would put towards those goals, whether that's investing or using. Way to go, man. Good problems to have. All right, Rebecca is up next in Iowa City. Rebecca, welcome to The Ramsey Show. Hi, thanks so much for having me today. Absolutely. How can we help? Yeah, so I've been working full-time while I'm in a full-time online graduate program, and I just completed my third class of a 10 class program. And I'm set

to graduate in May of 2024. And my employer is covering the cost of the program and it's not a requirement of my position, but I also just found out I'm pregnant, which I'm really excited about. But my classes for the next semester start tomorrow. And so my question is, do you think I should continue with the program that I'm not really necessarily sold on and requires quite a bit of time, but is paid for by my employer or if I should kind of take some time and focus on kind of family and reevaluating my career options? So the grad school is not costing you anything out of your pocket, right? Yeah, that's correct. So when you talk about taking a pause, is that like, what do you plan on doing with that time?

Yeah, I guess just kind of getting ready. This is our first kid. So just kind of getting ready for that situation, I suppose. And we just bought a house this year. So kind of working on that, I guess. So if you took a pause from grad school and you picked up work, it would allow you to pile up cash since you have a baby coming, which a lot of times we would recommend people if they're working the baby steps, you know, to pause the baby steps, pile up cash and get ready for that, you know, that big adventure of having a new baby in the world. Is that kind of what you're thinking when you say take a pause? Is this a chance for you to work or this is just kind of like me time? Yeah, I have been working full time. So I would continue doing that. It's just kind of more having my evenings and like mornings and weekends available again,

since it does take so much of my outside of work time. Could you restart this grad program later on if you wanted to? Yes, I think I could. Then I don't see why not. If you can pick up when you're ready and go at it again and there's no penalty or you're not losing out on any money from it being paid for, I would say take a break, especially if you're not really, like you said, you're not sold on it. It'll give you some time to kind of reevaluate if that's really what you want to do going forward. And again, it's no cost to you. What's your household income currently? It's $102,000 about right now. Awesome. How much of that is yours? I make like $47,000-ish. Cool. And where are you guys at financially in the baby steps? Are you

out of debt with an emergency fund? Yeah, we are. We're out of debt with an emergency fund, working on paying off our house, but I guess we need to pay for college now. Amazing. That's exciting. Yeah, and maybe start that like separate little sinking fund for baby and make sure that you and baby come home healthy and there's going to be some medical costs with that. And, of course, goodness gracious, all the baby gear and diapers

and formula and all that stuff. So it's going to be a new budget line item. So don't freak out about that, but it doesn't hurt to save up an extra 10 grand outside of the emergency fund for these types of costs. Wonderful. That would be my next goal for you as well. Yeah, I love it. I always like to save up the deductible because you know you're going to hit the deductible when you have a baby. That max out of pocket deductible. So look into that on your health insurance plan. And we're rooting for you, Rebecca. That's awesome. That's exciting. Yeah. It's nice to have options too. And you can just pause because you're not desperate. You're not paying for it. And that's the thing. If you

were doing this grad program with student loans, well, now the pressure's on. Yeah. That's what I love about the baby steps is ultimately that's what you're giving yourselves. You're giving yourself option to choose. You don't have this debt hanging around your neck. I always think, you know, whenever you have that kind of debt, all of your choices are filtered through that. It's like, can I afford to do this? Well, if I do this, I won't pay off this debt in time. And when you get debt free, it allows you the freedom to choose. Oh, yeah. Ford Motor Company doesn't call the shots. Sally Mae's not calling the shots. You do. Yeah. Even career wise, you do work that you love. You do work Yeah. Even career-wise. You do work that you love. You do work that matters.

That's amazing. Not just work to pay the bills. Absolutely. More of your calls coming up. 888-825-5225. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw this hour. Open phones at 888-825-5225. Well, Jade, the headlines have not been what I expected lately.

All the rage. Eggs. Eggs. It's all anyone can talk about. Here's the CNN headline. Egg prices exploded 60% higher last year. These food prices surged too. It goes on to say grocery prices remain stubbornly high, nearly double the rate of overall inflation at 11.8% year over year.

According to the Bureau of Labor Statistics, none have been more rotten than egg prices, up 59.9% year over year, a rate not seen since 1973. Oh, my goodness. Wow. Well, you know, they get the phrase a dime a dozen from eggs, right? I did not know that. They used to be a dime a dozen, and that i did not know that they used to be a dime a dozen and that's where they got that from and now apparently they're 59.9 percent higher and they have eggs exploded i see what you did there this feels like the old like i walked uphill both ways and

eggs were a dime a dozen yeah it is but i will say when i get to the grocery store and I look at my Pete and Jerry's you know organic dozen and it's like almost eight dollars organic in this economy are you kidding me look George there's some there's some things I just can't compromise on now back in the day we can't afford GMO let alone organic Jade if I was in baby step two I would take whatever egg they had but your girl moved out of baby step two. It's not just eggs. Butter and margarine up 35%. Lettuce is up almost 25% annually.

Flour, prepared flour mixes up 23% annually. Canned fruits and veggies up 18% annually. Bread up 16% annually. But here's the good news. The silver lining in all of this. What? Bacon is down almost 4% annually. Interesting.

So it's a wash. If you got your eggs, your bacon's cheaper. You get to choose. Eggs are more. You get to choose one or the other. Wow. Well, we wanted to give people some tips here, Jane. Yeah.

Because we like to make some jokes because it's all wild out there. But it is hard, too. When you go to the grocery store and you've got to swipe that debit card or get that cash envelope out it hurts it does hurt and it hurts so bad that i started looking for alternatives i started looking for suggestions and i saw this video online that some some psycho had the nerve to post it's instead of doing scrambled eggs for breakfast it's scrambled tofu some some crazy person you posted that video i did post that video george jade you're trying to cause anarchy across america here's the deal i love eggs i will eat eggs but when eggs are costing me 8.99 i would rather get

a pack of tofu for a dollar 7979. It feeds my whole family. And they have the seasoning. I don't even know what's in there. That you sprinkle in it and it tastes like it. How are they making it $1.79? I don't trust it. And it's organic, George. It was never real to begin with.

Tofu? It's soybeans, bro. Oh, I'm learning a lot. It's soybeans. It's just hardened soybeans. I'm telling you. Look, I have looked for all the alternatives. You know, you can make an egg out of flaxseed.

Like if you're making pancakes or waffle, you can make a flax egg. That doesn't sound right. It's flaxseeds and water. It's not how the Lord intended it. George, look. Flaxseed eggs. I'm always looking for alternatives out here. You are like next level when it comes to food.

So I believe you. And if Jade was cooking it, I'm sure it would be delicious. George, if you come to my house and I have leftover waffles, if you have those waffles, you are going, I always say, you're going to rip off your shirt and run through the streets ranting about how delicious these waffles are. That's not what America needs right now. Gosh. But there are other things you can do, right? At the end of the day, it's all about making a budget, being very specific in your food budget, right? Yes. And here's what's happening, Jade. People see these headlines and it makes them spiral

even further about the economy and it gets political. And there's a lot of reasons for these food prices skyrocketing. Supply chain issues, still a problem. Transportation costs, it just costs more to move things across the country. There's global factors. I mean, there's a war happening. I don't know if you've heard about it with Russia and Ukraine. Bird flu, that happened, which is causing a lot of these egg price increases. The thing is, George, I don't want to focus. I can't change that.

I can't change the war. I can't change the bird flu. I can't change supply chain. But what I can do is I can meal plan. You can change that budget. I can change my budget. If I can't afford eggs, I need to cook stuff that has less eggs in it, right? I can control the controllables, right? And I love this meal planner on ramseysolutions.com

that you can take a look through. It's wonderful. Yeah, our friend Rachel Cruz produced this and it's been updated. But at the time, you know, we didn't experience all this inflation. Now, we need this. And so you can get this incredible guide at ramsaysolutions.com slash meal planner. And it also includes a grocery savings guide. There's some templates you can print out for meal planning, grocery shopping. There's a ton of tips in there and it's completely free for you. You can also check out our article on why food prices are going up. We've got all of that for you in the show notes as well, if you're watching the show, listening to the show. But there are some things we can do, and we've mentioned some of them on the show before,

but doing your research, not just buying willy-nilly impulsively, but actually researching where the best spots are to go, what's on sale that week, using what you already have. That's right, pantry pulls. You don't want to reach back in that pantry and go, ooh, that went bad three years ago. George, January is a great month to do a pantry challenge. Yes.

And just cook all that stuff in there. You got black beans in there. You got some old blue box macaroni and cheese in there. You have some old noodles that- Get creative. Yeah, get creative. You better fix those noodles. Fix them.

They don't go bad. Who cares? And on top of that, of course, buying generic brands. We know you love your name brand, this or that. It's the same thing. It's made in the same factory. They just slap a different label on it. And one of the hardest things, switching where you shop grocery wise. That one is emotional for some people. Yeah. You know where everything is in every aisle. It's very comforting. But if you can save 20, 30, 40, 50 bucks by going to Aldi, worth it, do it. And then freezing your meals. A lot of times food goes bad because you just let it sit. And so freeze that junk. George, if you look in my freezer, you're going to see

a single hot dog bun frozen. You're going to see- She's freezing everything. You're going to see a clove of garlic that's been frozen. You're going to see an individual veggie. I freeze everything. My friends make fun of me, but trust and believe the time will come when you want to make a hot dog and you need that hot dog bun. We're thawing it out in 2023. That's the advice. That's the slogan. And of course, if you're not budgeting, you got to start because it's one of the main reasons you're feeling the pinch. You're not paying attention to where your money's going. Yes, you need to make some sacrifices, but you have to know where to make those sacrifices and understand what you're currently spending.

And we've got a great app for you called EveryDollar to help you do that. I love EveryDollar. I love EveryDollar because I never just put like a food line item. It's like grocery store, household items, restaurants. If there's a holiday, Thanksgiving, whatever the holiday is, I love being detailed in that because that's where you really see how you're spending, right? Oh, absolutely. Lunch. If you buy lunch at work, that now might be the time to stop. That's all I'm saying.

We've got a cafeteria here at Ramsey Solutions, and that can be dangerous. I'm much less likely to meal prep every day. Oh, yeah. I've been rolling through there getting smoothies. I'm much less likely to meal prep every day. Oh, yeah. You know? I've been rolling through there getting smoothies. I need to chill out. It's an incredible benefit. But something else I've done, Jade, because a lot of people, you know, I posted that very controversial Instagram reel and TikTok saying, hey, it's cheaper to eat at home than to eat out.

People freaked out. They got pitchforks, George. You were in danger. Well, what about all my time? Is that not worth anything? I got to cook. I got to clean clean i'm using all these pots and pans they're arguing with me about the time it takes well these people need to choose because you can't hear george you you're about to make me mad you can't have it both ways all right you can't go out here on this side and complain

about food prices and gas prices and this and this and get all mad about everything. And then when we tell you, hey, here's a way to make your life better. Just simply X, Y, Z, you know, start budgeting, start cutting back, start, you know, and then you say, no, I don't want to do that either. I and it gets into that that mindset of I deserve. I don't have to do anything. I don't have to do anything to change my situation. I don't have to do anything to make my personal life in my home at my house better. I just get to rave and complain about politics, about supply chain, about tipping, about everything else. I don't have to do anything to change. Well, what's funny to me is they're scrolling Instagram reels to troll me in the comments. They could have used that time to cook.

You could have cooked your meal. If your time is worth that much, what are you doing on social media, bub? You could have cooked a whole hot dog. There you go. And ate it at home, and it would have cost you, if it was a Costco hot dog, $1.50. But I'm just saying. They're holding down the line. Costco is speeding inflation single-handedly.

If you want to change this, you make changes. Here's the question. Hot dogs are up 16%. What's in that hot dog, Costco? I got a lot of questions. How are you doing this? It's meat pieces, George. It's not real meat. Well, you love tofu, so we can't trust you now, Jake. Goodness gracious. Well, hope those tips help. Go to ramseysolutions.com slash meal planner. You can check that out. Hope it helps you all fight this wild, wild inflation. This is The Ramsey Show. I'm Ramsey personality, George Campbell, joined by Jade Warshaw this hour. Hey, if you're enjoying this show, I would ask of you one thing. It doesn't require your money. It just takes you a second. And here's what it is. Consider subscribing to the show,

leaving us a review wherever you're listening, and sharing this with a friend. Word of mouth is how we make impact with the show, with the hope that we want to spread when it comes to your money and your life. And we appreciate you doing that out there in the real world, on the internet, and with your friends. Yes.

Love it. Open phones at 888-825-5225. Francisco joins us up next in Fort Lauderdale. Francisco, welcome to the show. Hey, thank you so much, guys. Thanks for taking my call. We appreciate it. Yeah, Fort Lauderdale, that's welcome to the show. Hey, thank you so much, guys. Thanks for taking my call. We appreciate it. Yeah, Fort Lauderdale, that's my old neck of the woods, Francisco. Yeah. So basically, I'm calling because I'm doing okay financially, but I just feel like I could do

much better. And I just wanted to get your perspective to see how I can maximize my wealth and to be on track with the baby steps. Because I feel like at the end of the month, you know, there's always like very little money left really to put into savings and all that. Even though you feel like you're following the baby steps in the budget, it just feels like, man. So here's my situation. So I have my six-month emergency fund. My take-home pay is about $7,000 a month. I have a rental income of $2,400.

So that's basically like $9,400 a month if I count the rental income. Nice. I have no debt except my mortgage. And I'm also leasing or what they will call fleecing a car. Okay. And I've been doing it. I've always leased. How much is the lease?

Because the lease is $358. Okay. And I have like three years left. And so I want to kind of get in, kind of get on track with the baby steps. So if I were to, because I know you guys encourage a lot to buy used and buy good, reliable cars. But my only concern with that is eventually when you buy used, even if it's a good car, I mean, eventually that car will break down, right? Any car can break down. Any car can break down at any point.

Right. Any car can break down. Any car can break down at any point. Right. But with the lease, you have that kind of like insurance, at least for that time period that you lease it. You always have that warranty and that peace of mind that you're driving with the later. Here's the thing, Francisco. Let's talk about this budget here. Okay. And then we'll talk about the car situation. So it sounds like you have $9,500 a month. Did I get that straight as your income? Correct.

Okay. And my screen says that you want to get back on track with the baby steps. So you've already walked through the baby steps up until baby step 3B, basically. So you've got your three to six months of expenses saved. Are you currently doing any investing for baby step four? Yes. So that's the thing. I kind of feel like I'm doing the baby steps, all of them at the same time. Why is that? I'm putting 50, I've been putting 15% on, on retirement. I've been doing it for a while. Um, I have like, uh, combined retirement with me and my wife. We have like

maybe 530K in my traditional TSP. Okay. That's great. And with a Roth IRA. So where are you running into? Tell me kind of what's your question? Like where are you running into issues? Because it sounds like you're doing a lot of things right. Yeah. My thing is what I feel like I'm not doing what, you know, right is, is the whole issue with, you know, with lease, with that leasing car. That's the only area where I feel like maybe that's like really my, my debt. And also I didn't feel like I'm contributing enough to my kids 529. Okay. I feel like I could do enough to my kids' 529s.

Okay. I feel like I could do much. Let's talk about that. Okay, so you've got the $9,500. You have no debt. You're investing 15%. So we're doing baby steps 4, 5, 6 at the same time simultaneously. So, I mean, you may have skipped around in the past, but for all intents and purposes right now.

If we get rid of that lease and get you a used car and cash, you're right on track. Yeah. So you're not as far as you think. And then you've got the income that you should be able to do four, five, and six at the same time. You should have enough money. I mean, your lease is not super. I'm not vouching for the lease, but it's not like it's this $1,000 thing that's cutting into all your money. You should have the money to do what you need to do. It sounds like this is a budget thing. It sounds like you guys are spending a lot. Yes. And, and well, we, I don't, that's

the thing, you know, I feel like we can do much better on the budget. And I also had another question with regards to the budget with the zero-sum budget. Because I get paid biweekly, and usually the biggest payments are due on the first days of the month. Yeah. And so if I were to put a number on every month so that at the end of the month is zero, I mean, how do you guys, I mean, how does that work for me to cover those first payments from the next, from the following month if my budget is, you know, and that's my thing. The mortgage is due like in the first day of the month. So basically that extra payment that I'm budgeting for or that I'm putting a number for, I mean, I have to kind of roll it over.

That's right. So that's what you need to do. That's kind of what you need to do. So the things that are due on the first, right, if you don't have enough money on the first to pay all of those things, then you need to kind of backtrack and make sure that as you're planning the previous month. So for instance, this is January. So if you're creating January's budget, you need to make sure that you're accounting for the fact in January that you have rent due or mortgage due on February 1st. So it's to say that some of that money might come in from the previous month. And there's a really great tool on every dollar. It's called paycheck planning. And you can literally go on there and plan out how each dollar is spent.

And it even gives you the option to roll money a balance over from the previous month. So in your circumstance, let's say it's gonna take you bringing $500 from the previous month's So in your circumstance, let's say it's going to take you bringing $500 from the previous month's budget into that current month in order to make that, you know, that February 1st payment, it actually allows you to do that. So if you don't have every dollar, let's get him set up with every dollar. And I think that that's really going to be able to thing that gets you in there, Francisco, look, you have a great income, you're making a lot of

money. If you want to get out of this lease, you could probably buy your way out today or find out what it's going to take to buy your way out of that lease. But at this point, it's really just you taking the money that you have and using it properly. With that income, you should be able to invest 15%, put a little aside for the 529s. And also, if you've got, it sounds like the only debt you had was your mortgage and also maybe some debt on this rental. But you should be able to start climbing your way out of that mortgage here soon. What do you think, George? Yeah, what's left on the mortgage, Francisco?

So the mortgage, I owe a total of, so the mortgage is like $316,000 to be 30-year, $316,000 to be paid off. And I paid monthly, it's about $2,400, including property taxes and homeowner's insurance. Okay. So that's not setting you back too much. I mean, it's not too expensive for you is what I'm saying. I mean, you're running with the extra rental income. It makes it reasonable. Now your wife is working as well. Is that included in the seven or is that? No, that's only me. My wife is a realtor. So, you know, it's not really like a fixed income. One year she might, you know, she might do well. There are other years, you know, other times there might be no sales for her. So it's kind of like very, it's very hard to budget her income. Like last year she did pretty well. Well, we need to get her budgeting as well and you guys need to be

doing it together. And so what this is, is a regular income. We've got a great, we have articles and resources on this on ramsaysolutions.com, but what you do is take the lowest kind of average month. If you looked across 12 months, what's the average? What's kind of the worst month she's actually done? Not a $0 month. And then we can go, all right, if we take that and add it to the budget, we can start from there. And then if and add it to the budget we can start from there and then if there's more on that we can start moving it down beyond the four walls beyond to subscriptions and luxuries and can we add more to the 529 if she gets even more so that really helps with that side of things and with every dollar premium which is what jade was talking about that includes that paycheck planning feature which is going to

help you figure out hey where do these bills fall Are we going to run out of money? Which I think will give you confidence. Right now you're going, we make good money. I just don't understand where it's all going. And that's where the budget comes into play. But I'm going to figure out the early buyout on that lease and go ahead and just knock that out. You've got the money in the bank. Let's get a reasonable use call with cash. It's going to be okay. You can afford the insurance. And man, you're never going to look back with regret on that. You guys are doing great, Francisco. You just got to tighten it up. That puts this hour of The Ramsey Show in the books.

My thanks to Jade Warshaw, my co-host, all the folks in the booth, and you, America. Thanks for tuning in. We'll be back real soon. Hey, what's up, guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.