The Ramsey Show - App - You Can’t Control the Past, But You CAN Control the Path Forward

Episode Date: November 17, 2025

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normal is broken common sense is weird so we're here to help you transform your life from the ramsie network in the fair winds credit union studio this is the ramsie show triple eight 825. 5-2-25 is the phone number alongside Jade Warshaw. I'm Ken Coleman, excited to have you with us. Tracy starts us off in Dallas, Texas. Tracy, how can we help? Hi. So I got my bachelor's degree, and my mom kind of handled all the finances in the house growing up. So I knew I had student loans eventually coming out of college, but she kind of handled all that. And I guess my question in that is, is it ever, I guess, an okay choice to just choose to default on student loans when they just become very overwhelming? No. If you were 88 and on death's door, I might say yes, if you had no money, but you sound young and it seems like there's a lot of life ahead of you to try to make this happen.

So tell us, tell us what has you feeling this hopeless? So when I graduated, and once I kind of finally saw that number after a while, my student loans end up being a little bit under $140,000. Okay. They had been, my mom refinanced and reconciledated them, so it's a private student loan, too. Good. So it just feels like they just feels like they're. never really going to get paid off. I paid it down to 106 at this point. But it's just very draining. Like it just feels very overwhelming. How long is it taking you to get it from 140 to 106?

So I graduated in 2016. So about that long, probably about almost 10 years now. Okay. What are you earning? And what kind of work do you do? So I'm a teacher. I think I'm making around 62,000 a year right now. My husband's the same. And so I guess just between our income and other debts and having a new baby, everything just feels like all at once. It is a lot. But so you're both making 62 apiece? Yes. That's great. That's fabulous news. And what other types of debt do you have? What other debt do you have? So we have my husband's car that we're still paying off. We have his student loans, which they're not private, and they're much less than mine. How much? Tell me the amount of the car and his loans.

I think he still is 19-ish left on the car. His student loans are around 30,000. And then we kind of have a house. And so that's also a loan. Tell me about the kind of house. So we live in a tiny house on wheels. Oh, tiny. I thought you said we kind of have a house. Yeah, I did. I did. Oh, yeah. But it's just tiny. Yeah. Okay, got it. Not laughing at your house, laughing at me, not hearing well. Okay. Cool. That's okay. So we did do that to cut costs, which it did, which is good. But that's, I think we still owe about 115 on that as well. Okay. What's the mortgage on that? We pay about, well, on that because it's through an actual like bank lender. So it is kind of a mortgage. So that a month is a thousand, but then we

also have a land rent, the landowner. And what's the land? $700 a month. Oh, gosh. That's a lot of money for a tiny house. I feel like that's almost a real mortgage. Yeah. Okay, we'll talk about the tiny house later. Ken, I'm looking at this, and I feel like part of the issue is, and I don't know, but it sounds like you're going in the wrong order on the debt.

Because you're starting with the, it sounds like the private loan is one big loan. Is that right? Yes. So there's your first problem. We have found that there's there's generally two main ways that people tackle debt. One is they list them smallest to largest like we suggest, not by interest rate, not by payment, just the full debt itself smallest to largest. And other ways are by interest rate or whichever one you feel the worst about. All those other ways don't work. We find that people get tired like you have and they don't see it. through till the end. So the method that Ken and I are going to explain is the method that we have found and has been proven to work over time. Okay, so I'm just setting it up for you to know that this works. So what you need to do is go through and list these all smallest. So it sounds like probably the smallest debt is going to be one of your husband's federal student loans, right? Yeah. And then when we do that, we can free up that money quickly. You pay off a $3,000 debt. It frees up a little bit of money.

you pay off another $6,000 debt, to freeze up a little bit of money, right? And then we can take all that and throw it at the next smallest debt. So that's how we gain momentum on this. Okay. And that's what I would suggest you to do. The $19,000 car,

do you know what it's worth? I do not. It's still probably somewhere around there, somewhere in the 20s. It's a 2019 model, so. What's the payment on it? I think it's somewhere on 400. I would love if you guys could

get that $400 back in your budget. Do you guys happen to teach at the same school? No. Okay. Do you, are you in the same district? No. Texas is very large. Okay. Yeah. I'm trying to think of a way that it could be feasible for you to become a one car family for a short season. I want to jump in on something that you mentioned at the top of the call and we just kind of glossed right over it. And that is that your mom, if I heard you correctly, your mom, mom took out these loans in your name, and you didn't know about it? I feel like I knew she was taking out loans, but I didn't know what that kind of total price was going to end up being.

Okay. And so when did you find this out? Find out the number or find out I had loans. The number? In 2020. Okay. And you graduated in 16, right? So four years in, you find out the full number.

And is mom helping you out with this? Was that part of the agreement? Or was it just a parent plus? Tell me a little bit more about this. I'm not sure if it was parent plus. I know my parents didn't get their bachelor's degree, so I know they really wanted me to get mine, which is fine. But so I don't know what type of loan is.

Okay. Are they helping out? Was there ever any agreement? Tell me more about this. Something about this just doesn't feel right to me. Yeah. They were helping out for a while. 2020 happened because that's kind of when they stopped.

That's when I got the login. Like my mom sent me the login to the platform to log in and view it. And kind of at that point, it was kind of one of those like launch situations. Like this is yours now. Right. You know. And up until that point, had she been making the payments or had they just been sitting accruing late payment? and whatnot. She was. She was, I guess, kind of splitting them. Like, she would take some money for

my paycheck and kind of lump it into whatever they were helping pay for at the time. Some money from your paycheck. How was she getting your paycheck? Um, I think my bank account, I think was still lumped into when I was like 16 and you could have like, you know, the parent kind of over. Got you. But you have your own bank account now. Yeah. All right. So Jade, wrap it up here. I wanted to dig into that. But tell you. I would love if you guys could look into selling this vehicle. It's not on fire, but if you can, that's $400 back in your pocket. You've got to do the debt snowball, which is what I talked about.

We're also going to hook you up with every dollar before you get off. Not only is it a budgeting app, but it's going to give you the next right step. Since we only had a few minutes with you, the budgeting app is going to take you the next steps further. It's like having Ken and I in your pocket. Let's go to Emily now in Los Angeles. Emily, how can we help? Yes, I was calling, I think, looking for some advice. Our family was in a major car accident, and we have quite a bit of medical needs, and we own our own business,

and my husband also works full-time outside of our business. through our medical journey, I was put on medical leave, meaning I'm not supposed to be working due to a brain injury that turned into like a more complications. So we are losing my income from the business and it's making it very difficult to operate the business. We've tried consolidating debts. We've paid off a chunk of debt. We are just trying to trying to do everything that we know either from baby steps or just like rewriting budgets. But it's taking quite a long time because we can't pursue settlement from our accident until our injuries are a little more progressed where they can accurately say like this is, yep.

And so we have gotten to the, we've been dealing with this for over a year now. And tell me about the, let me walk you through some numbers here so we can help. Tell me, tell me about the business, the one that you own, and then what role do you play? So two-part question there. I'm owner, creator, and main employee. What's the business? And we manufactured organic, like, skincare, candles, things like that. So it's just you and the husband.

hubs. You guys are the only two, and it's primarily you, or is he putting in hours as well? It was primarily me, and then we had family and friends that would help, obviously, right after the accident and things. We lost our storefront, and that was a major revenue stream. It was our biggest revenue stream. What were you? Give me an idea what your revenue was. For the whole business, it was pushing 350K, and, growing at over 20% a year. Good for you.

And what were you paying yourself? I was averaging 6 to 7K a month, personally paying myself, and then we were working on actively paying off debts on good months. Well, that's what I want to ask. How much of that debt? How much of that debt was on the business? The business currently has about 250K in debt from, from, from, losing the storefront and we were wholesaling to over 1,100 retailers across the world.

Wow. And we had to halt that as well. You were really cooking with grease, weren't you? We had some really big dreams right before this accident happened, and the accident took. Yeah, so sorry. It took a lot of that away. So it's okay. I'm working through that.

I understand. So I'm going to keep walking through some numbers with you so Jade and I can dive in. Okay. So we have $250,000 in debt on the business. What personal debt do you guys have? We currently still have $89,000 in debt, and that includes personal loan. We took out to help consolidate all of our credit cards, student loans, tires. I mean, that's everything but our cars.

And you still have debts on cars, too? we do um my husband's truck give us the numbers 19k left on it 19k on a truck what else yep and then my car has 52k but the problem with my car is it was in the accident and its value has the car was six weeks old when it was hit and it didn't total by like pennies basically they repaired it but its worth has dropped we tried to get out of it after the accident and the worth it was like worth less than 20K last Christmas. And we can't do anything about that while our settlement still plays out because that's part of the settlement. So we can't get... Got it. Got it. Got to try to help you here. So I'm trying to consolidate a lot of details here. And so your husband's income is what?

90K. Okay. And you have no income coming in at all, correct? Correct. Okay. All right. Jade, what else do we need to know here? We're trying to get a picture here. I do, I will say, I do have two more months saved for, like, I have money in the bank to, like, that was to pay myself to get us through to the end of January. So I have in the, what do you have in the bank? I've got 10K left to pay myself out of. This month is taking care of. So it's 5K for December and 5K for January. So are you unable? Are you unable to? to pay for your four walls plus all this debt on just your husband's salary? Correct.

We did already downsize our house. We already moved and took care of a massive expense way. How much short are you? So how much income are you guys short every month? Well, $5,600. Help us get to that. How is it $56? That's all our debt.

my husband's income would cover our housing, living expenses, the vehicles. Uh-huh. The personal debt. The personal debt, yep. So how much inventory? I got to believe you've got a bunch of inventory that needs to be sold off. What's that worth? What's the value of that?

I do. I think I have a good $100,000 in inventory that could be produced and sold or could be just sold. And so when you were selling, was it an online storefront or it was like brick and mortar? We were brick and mortar up until just a few months ago. A brick and mortar was over 220K in sales a year. Got it. And you sold that or you just lost the lease?

We had to close the store because I couldn't run it anymore. And the debt had already piled on that it didn't make sense to hire someone. Understand, but was it a lease or was it a place that you guys owned? Yes, at least, okay. So my question is, is there a way that on, online, you can start to sell off some of this inventory so that you can... What does that mean? What are you running into?

What are you running into? It's just slow. We were online with our slowest revenue stream in the past. And it's just getting like our in-person sales. Let me ask a really, let me ask a dumb question because it's really important. This inventory, and Jade, rightfully so, is locked in on this. This is your best chance to get some relief here while we're, waiting on settlements and all the things. If you were crushing it to the tune that I'm hearing,

and I believe you, in Los Angeles, you had a loyal customer base, is my guess, true or false? Yes. And I'm guessing that they found out in some form or fashion what happened to you. Is that true or false? Yes. Okay. I'm wondering here, Jade, come on alongside me. How do we reach out to that group of people and go, hey, hey, y'all, this is my situation right now. If you all believed in this product, it would help us to move this product because it's going towards getting out of this business until I get healthy, because I got to believe you're coming back one day. Or even those last retailers that you were in their stores, can we, is there a way?

I mean, obviously, continuing to maintain the business is not an option, but getting those last purchase order so that we can sell off this lat because you said you were in a number of different retailers how can we tap them i spend weekly emails to all of the retailers we started doing promotions and even lowering prices on goods um doing online marketing which we've kind of stepped up what caused the retailers to not want to continue to purchase because i feel like those are two different issues we've got the hey we got an accident we had a let me finish this six month pause Oh, sorry, go ahead. I just want to get clear on this.

It wasn't the accident or was business already starting to dwindle is what I'm trying to understand. No. No, business is at the highest it was when we were in the accident. I had to close our wholesale portal for six months immediately because of how bad, like, the injuries were. Okay. So those lines are dried up. They, a lot of them are most loyal storefronts have come back, but a lot of them, it's, they need goods. and then they just move on to the next retailer because they're filling their store.

So what this is going to look like, if your husband is well, this has got to be his side hustle, is figuring out how to sell, because this is $100,000 in your garage, basically, how to sell this because that's going to break you free from this business debt. Otherwise, you're going to continue to go into credit card debt floating the difference. We can't do that. All right, Lauren is up next in Minneapolis. Lauren, how can we help today? Hi, I'm good. How are you?

Good. What's going on? So back in July, my little brother backed into my car. Oh, boy. And my husband had to pay out of pocket. Not too much money. It was just our deductible, but it's been, you know, about six months and he hasn't made any effort to pay anything. And so I'd just like some advice on what to do if he doesn't start paying soon. How old is he? he's 22 does he have a job um no but he has a good income which is we have an interesting financial

situation um and he's got a great income he just bought a new house it was like pretty expensive and he just lives there by himself where does he get this income um we get per cap so we get like it's native american per cap basically got it and what was your deductible that you paid $2,000 bucks. So he owes you $2K. To me, that's not like a lot. Yeah. So what does he say when you go to him and you're like, you know, junior, I need this $2,000?

What does he say? Well, he's been kind of just like dodging it. When it first happened, we said something and I was just like, you know, you got to pay this. And he was like, well, I'm not going to pay more than $2,000. He actually owes like $6,000 because of all the damage. Well, wait, wait. He owes me $2,000. No, no, no, help us understand that.

If the damage was $6,000, why does he only owe you two? He backed into your car. He was the deductible. He owes me to. He owes the insurance company six. Okay. And is he paying the insurance? He would pay the $6,000.

No. He would pay the $6 to the insurance, and they would give me two from that six, deductible. So he doesn't owe you. He owes the insurance company. Yeah, technically, yeah. So then we would get. to $2,000 from the insurance company once he pays it. Well, what are they doing?

What are they doing to collect on this? Just trying to collect it. You know, there's not, like, a lot that they can do. They just basically, like, keep reaching out. But insurance has to pay you regardless. Like, that's your insurance, and you filed it, no? Yeah. Apparently, we have to wait until he pays it.

I don't, I don't, none of this makes any, this entire call makes no sense to me. But let's stay on the insurance. piece. When was the last time you talked to somebody from your insurance company today? Today? And they told you, we can't do your payout until your brother pays his portion? Yeah, basically they can't pay us anything because it's his job to pay that. What type of policy is this? Progressive. Oh, now we're name and names. There we go. I don't understand what you hoped for calling us on the brother not paying you. I mean, if I had a relationship with him, I would be making his life miserable.

And at some point, your husband needs to probably roll up to the house and go, hey, punk, what's the problem? Your sister is my wife, and you're not manning up taking care of business while you sit here and play video games in your new house, I mean, I'm not talking about threatening physical violence, but I mean, it feels like this is pretty easily handled in a family situation. I can't give you any advice on that. It hasn't been very easy to handle it all. What's that? It hasn't been very easy to handle it all. I mean, we've asked him for it. He's not really making any efforts. There's not like anything that I can do to say like, hey, I need you to pay this. Did you file? Just talking to my husband and I. Did you file through his insurance and not your

yours? He doesn't have insurance. He didn't have insurance when he backed into my car. Okay, so he hits you and you call your insurance company up and go, hey, my bro backed into my car, and they took over. Do you not have collision? I don't, I think I do, but it's like my deductible was, like, I still have to pay a little bit out of pocket. It was higher than I thought. If you don't have collision, then that means your insurance has no coverage to pay for your car. And that would mean the only option is waiting for the other driver's insurance. So it might have paid for some of it.

Ah, that might have been, it might have been based on the way, the nature of how it happened. Okay. Do you have a relationship with your brother or is it a non-existent relationship? It's kind of. I mean, like, I see him. Sometimes I was trying not to be like too pushy about it. So, you know, I still see him and stuff, but... Are your parents in the picture?

Not the best relationship. Yeah. I don't know how this is a... I mentioned to my mom today, like, hey, you know, if he doesn't start paying, like, we're kind of just not going to be, like, doing stuff with him. Like, I'm not going to... Yeah, I don't think that's a real big threat to this guy. I would get the parents involved. This is a family meeting at best.

I don't know how else you get the money out of him. Yeah, no, that my mom was not... She's not trying to step. like that at all. She just said she doesn't want to break up our family over something like this. It's going to break it up. If he doesn't pay it, it's going to break it up. Let me explain the insurance part for you so that you can at least understand what's going on is one of four things is going on. You told me, number one, if you tried to file through his insurance, you told me that's not the case because he doesn't have insurance. Number two, I don't think you have full collision

insurance because you, they're not paying. And number three, my guess is if you do have collision, since you did not go through his insurance, it says that sometimes if you do have collision, but the person who hit you doesn't, they're waiting for that insurance to pay them. And so that could possibly be the problem there. Either way, I think that if I were in your shoes, I'd be calling up my brother.

I have an older brother and a younger brother. I'd be calling up my younger brother today. And I'd be like, you need to make this right. What type of person are you? Like I thought you were a person of integrity. and character, and I'd like to see that demonstrated. That's what I'd be saying as the older sister. And if he didn't, I would be short of time.

I'd be like, man, I'm really disappointed that this is the way you chose to handle this. And you and I both know this is not right. Yeah, I've been sitting here, Lauren, thinking, what? Well, I've been thinking of what would Dave say? And I can imagine how that would go. And I'm not going to say that because I'm not Dave. And then I'm going, well, what would I do, Jade? Oh, I'd act a fool a little bit.

So, Lauren, I'm going to tell you what I'd do. I would do two things. First gear would be calling, texting, showing up at his house once a day. Oh, we're going. We're going to just be obnoxious. We're not violent. We're not threatening. Just getting on his nerves.

We're obnoxious. You know, with some justification. And gear, too, if that doesn't work, because I don't think that's going to work right away. Although, you'd be surprised. You just keep showing up. And the guy's like, he's like, oh, my gosh. The second thing I might do is, if that doesn't,

work, I'm finding a way to get in that house. Or I'm knocking on the door one night. He opens door and I walk in and I go, and you're sitting in the shadow. No, no, I start walking around. I want him to open the door and let me in and I'm going to start walking around the house and I'm going to start pulling stuff into the living room. And I want him to go, what are you doing? And I'm going, I'm adding up $6,000 worth of your stuff. And I'm going to sell it because here's the deal. You and I both know you owe me $6,000. So I'm getting it one way or another. So this is so stupid that I have no other choice. Go in his closet.

Yeah. And so if this doesn't work, now I'm going to sue you. Yeah. Yeah. I'm sitting there going realistically, what would I do? And I think it's the obnoxious treatment first. Yeah. And then I'm literally going to go and go, I just found a toaster that's worth $150

box. It's pretty new. You like this? I'm selling that tonight. Yeah. And I'm going to take $6,000 worth of stuff out. of here tonight. If you call the cops, that's great. Because they need to come get you. Because I would love the cops to know that you're stealing $6,000. Right. I mean, I just think

you've got to be so difficult that he goes, this isn't worth it. Yeah. I don't know. I don't mind this behavior. Lauren, what do you think of that? That's all I got. I'm trying to help you. I'm trying to meet you where you showed up today. No, that's okay. I just, I just wanted advice. You got to make it worth his while to pay you. In other words, he's going, my life gets better the minute I stroke a $6,000 check, which, by the way, he probably doesn't have. Yeah, I don't think he, I truly don't think he has the money. I don't either. But I bet he's got some stuff in that new house. Throw a yard sale in his driveway.

Yeah, yeah. Oh, gosh, what a mess. I cannot can imagine treating a family member. My flesh and blood somebody I love that way. I know. It's just, I'm sorry that you're going through that. That in and of itself is disappointing that a family member would do you dirty like that. All right, folks, you don't have to wait for Black Friday to get Black Friday deals. The sale is on now. That includes $12 best-selling hardcover books, $12 question for humans, decks, $6.99.

for audio and e-books, $15 for assessments. All you got to do is go to ramsysolutions.com slash store, Ramsey Solutions.com slash store, or if you're watching on YouTube or podcast, click the link in the description. If I had time, and I was really cranky today, I would go on a rant about the pre-Black Friday deals. Oh, I would love to hear you go on a rant, Ken Coleman.

We've jumped a shark as a culture, maybe later. I don't understand. Next, it's going to be pre-E. Easter deal. Did you say we jumped the shark? Yeah, you've never heard that phrase? No. Yeah. I'll explain that one to you. I need more. I get a little irritated with it. And everybody's doing it. Now Ramsey's doing it. We're all doing it. I know. It takes away. It takes away the cachet of the. I just think called a really

great deal. Yeah. Because it ain't Black Friday. It's not even Thanksgiving. It was just October. There we go, folks. That's a whole other show. Oz is joining us. It's still a good deal. Ramsey Solution.com. store no matter when it is. Oz is on the line in Miami. Oz, how can we help? Hey, guys. How are you? Good. Happy Monday. Whatever day it is. Whatever day it is. It's right. So essentially, my wife and I about two years ago, we bought a rental property townhome in Tampa, Florida, right? But we reside in Miami, Florida. We're both born and raised here. Right now, every month, the payment that the tenants are

sending us is around $2,400, right? But the monthly mortgage that we pay is $2,800. So I just kind of wanted your advice on that just because the way that we were thinking of keeping the home, we're not, we're in between, right? Whether they're selling it or we're keeping it just because of long-term equity in the future. But let me ask a quick question. How did we get okay with you having a $2,800 mortgage on it, but only charging $2,400. So it was a brand new construction, right? And so the first year, you pay taxes on the land. Second year, you pay taxes on the, you know, the first full year of the property being built, right?

So then a tax is shot up from, I think it was around, they shot up about, geez, like $4,800. Just this year? Last year. This was last year. How come you didn't raise the rent? So we have a realtor that we're working with over there, right? The realtor recommended because of the properties around in the community to lower the rent because the first year was essentially $2,500.

So then it all kind of made sense at that point. We were doing out of pocket $50 a month, right? Then the second year came around with the tenants. And then the realtor was saying to lower the rent just because all the properties around the rent went down. So then that's when the property taxes shot up to $5,200, $500, $5,000. 300 bucks and that's when we went negative 400 something a month all right so the question is did you get into this house to make a couple hundred bucks a month or did you get into this house to make more

than that we got into this house well we moved over there because we liked the place and then work called me back into the office in Miami and so and that's it that's that that's what I want to stop on you did not buy this house as a rental property right you did not say you know what let's get into the rental game let's get into the landlord business let's go pick the perfect property for us to do that. You didn't say that. You defaulted to this because it was like, well, we're moving. I guess we'll just kind of keep it. Do you see why that's not a great plan for real estate? Correct. Correct. Yeah. So if you sell it now, are you underwater or can you make money? I will make about 15K on it. I'd jump on it because I just read an article a couple days ago.

Tampa is one of the worst real estate markets in the country. Prices are dropping. Yeah, big time. Got to jump on it. So I would get out now. Do you agree with that, partner? I'd take the 15 and be happy. Indeed. Because this is a headache gone and you walk away with no financial loss and you get to, you know, live and tell about it.

Yeah. The longer you wait, that money could dwindle, so I would definitely. Yeah, yeah. And we actually just, you know, the worst part of the timing is we just, not the worst part, but we just renewed the lease with the tenants. so we got, you know, 11 months to go with that. But obviously, you know, with, you know, contingent upon the tenant's moving out or so on and so on and so forth, you know, we can potentially sell the house and, you know, I was just talking to my wife about it and

we're young, right? I'm 30, she's 27 and zero credit card debts, no car payments. Good. Good. We have seven months worth of savings, you know, there is a truck that I want to get rid of because that's like 580 bucks a month. I just don't need right now, right? We make it decent living for living in Miami. And just that house is kind of causing not headache in the marriage or anything like that, just our sense of peace for us, right? Yeah. It's a goal negative every month.

And that's, yeah, that's 400, not including CDD fees, garbage men, fees, 80p security. So you were just losing money, hand over fist? Yeah, monthly. Exactly, yeah. Yeah, negative 730 is the exact amount every month. How long have you had this property and been renting it? we were there I've been we had it we've had it so far three years we lived in it 10 months so you've been you've been losing $730 a month for three years give a take 730 dollars the last

fiscal year the last 12 months oh my gosh yeah for 2025 I mean do you see where there's no profit there because that you're only going to make 15,000 for the sale this is the type of math you've got to be doing to understand what you're in the business for are you in it for you know making long haul on the property are you trying to make something off the rents there would just there just wasn't a plan here when you feel to play any plan to fail and i would roll my sleeves up with my realtor uh if i were you and i would walk this whole lease thing out 11 months do you have any options i'm just because i'm going to tell you something the market in tampa is going down i don't know what it's going to look like six months from now or a year from now but you got

11 months and so i would want the full picture of what every option then can we be ready and then what do we have to do? If we have no options, Jade, and 11 months rolls around, what's our strategy? So I would get in control. So we're going to list this thing at eight months. You know, just don't let this thing happen to you, happen to this. And then one quick question, because I want to get it from a source of Florida resident. What is the status of the no property tax legislation or idea by DeSantis? Where is that stand? So that is still TBD. I know there's been a lot of hyped around Desantis wanting to go ahead aluminum property taxes, but a lot of folks are saying, like, how are they going to be able to

fund schools? Right. So it's not active, you know, I get all that. But I was just wanting to know where, is it active legislation or is it just him throwing it out there? I mean, him throwing it out there. They are in the process of it, though. It's not active yet.

Gotcha. Okay. Yeah, there's not active yet, but a decision will be made soon. All right. Yeah, yeah. Well, listen, man, I wish we had better news for you. I would see what your options are in that contract. read the fine print see what your options are if you have no options have a game plan so hopefully

we move this house pretty quickly upon being able to sell it based on the lease situation there because you just don't want to be stuck with that and jade this is a great review we have a lot of new people coming in all the time this is a great way to kind of do a review why do we tell people this story being example a to not be long term landlords i mean excuse me long distance Long distance. Well, I feel like the first part is what we kind of highlighted, which is a lot of people get into that long distance landlord game, not by thoughtful choice of this is where I'd like to buy a property and be a renter. It's, I used to live here. I got a job. I'm moving or maybe you're in the military and you're hopping around. So it's just kind of like this default. Well, this seems convenient. And then you're, you're far away. It's a pain in the butt. If the person is not, you know, paying you're, you know, in this case, he wasn't, I mean, he was almost a stayed away, Tampa to Miami. I mean, may as well be a state away, but it's very hard to manage things from long distance. And you did not pick a property based on mathematics, based on doing any sort of spread. You just kind of ended up that way.

And nine times out of 10, those are the ones where they're causing the most amount of stress. They're causing the most amount of, you know, loss of money because they're not covering it. And so it's just got to let it go. Simplify a simple life, Ken. Yeah. And low risk, right? Now, you know, you talk about the Florida real estate market, you know, it got overheated. It sure did.

Before you buy something, you should be paying attention talking to those grizzled real estate veterans who've been. They've been around. They may not look grizzled, but they got experience. In Florida, they're sunbeaten. Yeah, yeah, yeah, yeah. But they know they've been around. They've seen real estate cycles. You've got to know this stuff so that you don't put yourself in a high-risk situation because a lot of people go, well, I got the house.

Let me just rent it. Now, I've just made my portfolio a reality, and it's just not that simple. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Alongside Jade Warshaw, I'm Ken Coleman. Glad you're with us. Isabel is joining us now from Wisconsin. Isabel, how are you today, and how can we help? I'm doing all right today.

Thank you for asking. I guess I have a weird situation. I make $20,000 a year, and I work at a bar and restaurant. My boyfriend and I, well, he owns it, but my rent is connected to that salary that I make. My vehicle is connected to that salary that I make. I feel like I'm kind of a hostage in this situation. Sweetheart, I'm glad you said it. so I didn't have to.

This sounds like scary manipulation. $20,000, first of all, is below the poverty line. Let's start there. Yeah, that's kind of what I thought. And then after your rent is coming out of that, and after your car payment is coming out of that? Is that right? He's paying for those two things? He bought my car, and I drive it.

He maintains it within reason. I suppose I still have to do, like, the major stuff on it. What kind of car did he buy you? It's a 2014 Honda CRV. So not, not, you know, not a real luxury item here. How much did he spend on it? No, I know. I'm just trying to do the math here.

How much did he spend for that? He bought it for $8,000. Exactly. So he bought you an $8,000 car. That comes out of the $20,000. So he goes, now all I have to do is pay her $12. You know, I still make, my salary is 20,000. He bought me the car, and my rent is kind of included without having to pay for that salary of $20,000.

Okay, the way you worded it, I thought it was coming out of the 20. So you're making 20, period. But why are you, why would you stay at, how old are you? I'm 28. Why would you stay at it in December? What's causing you to stay at a job that's paying you $20,000? That's not a living wage. I feel like I'm barely making it by.

Yes, but what's causing you to stay there? Of course you're barely making it by. But what's causing you to stay there and not go for another job? Because my point is you could go to Target and make more. Or Walmart and make more. I don't know the target around me. Uh-oh. Now, Isabel, don't start making excuses.

Answer the question. What is keeping you? Well, let me ask another backstory question. Are you living with him? Sure. Yes. Okay. Okay.

Yeah, we've been dating for three years. Okay. When did the bar, when did the bar job happen? When did you start working for him? About four and a half years ago. What were you doing before that for work? I've always been a kitchen person and now I'm kitchen manager and for his for his bar and is his bar is it struggling is he just scraping by as well or is it doing okay is it doing well what do you

know uh he makes seven thousand dollars in a weekend okay we we don't talk about finances to be honest okay and does he pay for all of your he pays for everything except for a little bit of spending money that you have from the 20? Is he covering all your bills, or are you covering other things? No, I'm covering other things. I'm in debt $3,500 because I was trying to help my mom because she was a single mother. And it's complicated, but...

Okay, well, your whole situation is complicated. How old is he? He just turned 40. I had a sense of that. I'm not a relationship expert, nor am I going to try one, but I think this is a manipulative relationship at best. And I think that you think you can't do any better. You've been making $20,000 a year for four and a half years, I'm guessing? Three. For three years. What would happen if, tell me honestly, what would happen if today you said to him, hey, I'm not going to work at

the bar anymore. I'm not making enough money. I found another job and I'm going to take that job instead. What would happen? Well, we've had that talk before and he would kick me out and I would no longer work there and I would have to find another job. Okay. So there it is. Yeah, we got a weird. This is that right there, Isabel, I knew that that was the answer and I just wanted you to say it. Do you think that you can stay with somebody like that that doesn't want you to get ahead and be able to stand on your own two feet? Do you think it's healthy or safe for you to be with someone like that? I mean, not entirely. I guess what I really am trying to do is work by way out of my debt. But how can you?

He won't let you earn any money. He's controlling you. Yeah. Okay, now here's the answer. Isabel, here's the answer. The only way you work you're out of debt and stay in this abusive relationship, because that's what this is. 100%.

Is you're working a part-time job? Based on what you've told us. No, I don't work a part-time job. On salary, I'm 90 hours a week. No, it doesn't matter. You're working 90 hours a week to make $20,000 a year. That's what I'm saying. Isabel, I'm trying to help you understand.

There is no way to work out of this. And Jade and I, and anybody on the ranchist show is going to tell you, there's always a way to work yourself out of it. But there's no way to work yourself out of it in this situation where you're working 90 hours a week. You are an indentured servant. Look it up. That's what this guy's got you turned into.

You're basically working for your livelihood, meaning he's just going to give me rent. he got me the $8,000 car. He's got you underneath his thumb. And there's no way for you to get out of this other than you break up with this guy. You have to. And you go work, you go get a good job and you start over. I want to flip the script on you in a couple of ways.

What did you think we were going to tell you? Because you said, you know, I really need something. I'm going to call these folks on the radio. What were you hoping we might tell you? I guess I really didn't know. Yeah. We're on your side. I've been thinking it for a while, and I guess I maybe just needed some reassurance or something.

Listen, I'm going to tell you right now, we love you. We do. We want the best for you. You can't stay with this guy. No. You cannot. He's not going to let you get ahead. He's controlling you. And it's tough because he's 40 and you're 28 and you've been with him for three years. And it seems like he holds all the power and all the cards because. right now he does, but that doesn't mean that you can't go out and get yourself a job and get ahead. I think that this, it's like you're under a glass. I got to say this, Isabel. You've been with him four and a half years. Did I hear that right? Well, I've been working with him four and a half, but we've been together for three. I'm sorry, but that puts you at about 25 years of age and you've had

to help your mom. You went into debt three grand to help your mom because he's a single mom. And my guess, there's his abuse that runs in your past. And I think you're terrified. And I think you're terrified of becoming your mom. So this guy at 40 years of age, as manipulative as he is, he represents safety for you. That's what I think's going on. And I'm going to recommend that you... Maybe, yeah. No, it is. It's exactly what's going on. And I want you to go to some friends and family that love you and ask them if you can stay with them. You get yourself a new job. Let's get on our feet financially. Go see a therapist. That's your homework assignment. but I think you've got to break up with this guy or I need to take a break and you need to see

yourself. You don't have to do a full breakup, but take a break. Let's leave. Go spend some time somewhere else and maybe find a job, not maybe, find a job where you can make some money. Let's see what life feels like on the other side of this because I think you've gotten pulled down and if you've got any money that you can get a therapist with, go see a therapist and get a real professional opinion on this. Hey folks, if you're enjoying the show and it's helping you and you think it'll help others, would you help us help them? And you do that by liking, subscribing, following, sharing, all of the buttons.

You know how they are. And so whether that's podcast, YouTube, however, we'd love for you to share the show. And that helps us spread the good word. Alice is up in Albuquerque, New Mexico. Alice, how can we help you today? Hello, thank you so much for taking my call. My question is, does it make more sense to contribute money to a spousal Roth IRA or continue doing what I'm doing, which is currently setting money aside in an emergency fund and other

expected expenses such as vacation, maybe a future car purchase, et cetera? my husband's going to continue working for about another 10 months to 12 months. Okay. So this is in, this is you planning for retirement. Yes. Okay. How old are you guys? I'm 65.

My husband is 64. I retired in 2015 to take care of my mother. And then I took care of my sister who had early onset Alzheimer's. Alzheimer's. And so I've been out of the workforce for quite a while. Okay. And so tell me what you guys have so far in retirement. Together we have about 1.5 million in 401Ks, 403Bs, Roth, and my husband has a PSP. Okay. And is there anything else? Tell me about your other assets do you own your own home do you still have a payment tell me about that our home is paid off our vehicles are paid off my car is a 2012 and i don't have to have a brand new car that's not my

thing i'd rather not have a payment but i know that i might have to purchase a car in the future so that's one of the things that i plan on setting money aside for as well okay and otherwise we have minimal credit card debt, and we pay groceries, utilities, cable, internet, our phones, and that's pretty much it. Okay, got it. What's the homework worth? What's the home worth? In our area, probably about 350,000. Okay, good. Now, what's your husband work? You said he's working 10 to 12 more months? What's he earned? He currently earns about $80,000 annually, and so we've worked really, really hard to pay down debt. And I've been doing the spousal Roth contributions, and I've currently stopped.

I don't always have the money to do that. But my thinking was, does it make more sense to contribute to the Roth since he's going to be off work in about 10 to 12 months when you retire? or do I just keep putting money away in what I do? And I know this is probably something that you're not going to agree with, but I have little envelopes, in other words, little buckets. And I put money aside for an emergency fund. I currently have $10,500 set aside in the emergency fund. Okay.

And then if things get better in Israel, that would be kind of our dream vacation. Okay. Israel. Okay. So for vacation funds. Okay. You know, I'm not mad at that. I'm guessing he's continuing to contribute on his end to a Roth IRA as well. And so the spousal, you're kind of like, do we still need it? I like the idea that you've been saving an emergency fund because you do need some liquid money. We would suggest six months of liquid money. It's just good to have there so that you're not having to pull, you know, things out of investment for emergencies and things like that. I'm not my my framework on this would be you need to be investing at least 15% of the

income. That's kind of where we said if you're investing 15% whether it's in Roth IRAs, spousal IRAs, 401ks, wherever you choose, everything else from there on. Yeah, if you want to save up some more for vacation, if you want to have a little, if it makes you feel comfortable to have a little bit more cash money, I'm not upset with that. You guys are doing really, really well. 1.5 million in retirement, I paid for $350,000 home. I don't think that you can mess this up at this point with the couple of thousand dollars that you're talking about here. Yeah, I agree.

Question for you. So the $1.5 million or so, I felt really comfortable with that. But for the last almost five years, things have gotten so much more expensive. And I would like to leave a little inheritance for my kids. Okay. And let me explain that so that you'll understand it. So you've got 1.5 million here. Let's pretend that the interest on that is about 10. 10 percent, right? That's the compounding growth that's occurring. You could pull $150,000 a year from that and never touch the nest egg, essentially. Does that make sense? Which is more than what your husband earns now. He earns 80,000 a year. Okay. So you'll have more than enough to continue to live, plus you both will receive social security, or at least he will. Do you see what I'm saying? So there's definitely plenty of wiggle room there. You will have plenty to leave to your heirs or anybody that is going to be a beneficiary on this. Another question. So the money that I have in the little buckets, I keep, it's not invested. I keep it at home in envelopes in a safe. And you might get

mad at me there, but should I be putting that in a high-yield savings account, like my emergency funds? That'd be great to do that. I'm not going to lie to you. I have cash. I like having cash that I can get to, and I also keep my main emergency fund in a high-yield savings account. But that's just because I'm a real, Ken, you don't keep any cash in the house? Okay. You don't keep any cash in a save? Okay. You're asking. I'm just saying, I like to be ready.

Like, I got it. I'm like on Jason Bourne. I've got the passports and the cash right there. I'm ready to go. I just know there's ain't much you can do about it. You have all that cash and the zombies will still get you. Oh, my point is, my point is, Alice, you know, the 10,000, I would definitely put that in a high yield savings.

If it makes you feel better to have a little bit of cash on hand in the house, that's totally fine as well. The other thing is, like, people come knock on my house, try to take stuff and go, you walk into my shoes. There's a decent amount of money there. Me too. There's no safe. I know. I just said it's live on radio. What's that?

I just said it live on radio. That's all right. They don't have your address. It's okay. We haven't told them who you are. You're going to be okay. But yet the answer is, the answer is yes, your money is safe. I feel it's very safe.

Put it in, you know, high-yield savings. That's the best place. why not get the money on that? Yeah, it's just sitting there in those envelopes. You know, and so, yeah, that's why we, that's why we. But I love how methodical you are, Alice. I just love how she's just been thoughtful about putting it in the envelope, put it to the side. And you guys are going to be fine. And I love how you walked her through the real numbers there. You know, I think people need to know when you go, what's my number? In other words, what, what's the nest egg, retirement nest egg, where I feel like,

and I love that exercise where you walk through. And by the way, run the numbers. Yes. Run it on a 10% run it on eight, run it on six, run it on four. Right. Run it on 10 and then take out four percent for inflation, right? And then all of that is helpful to see it. Just run those numbers so you can see what it is you need and you make those adjustments, but you guys are going to be fine. I'm not worried about that at all. But you for real do the whole safe thing? Look at my face, Ken Coleman. Okay. Well, I'm not surprised. I'm not surprised. I think that now don't get me wrong. It's not to, it's not a, any, you know, I'm not going against the baby steps. I still do all the things that the

baby steps say. It's just in addition to, I feel good knowing, you know, something goes down and you just need to get to, this is, you never hear me spin out like this, but something goes down and you just need to get to the airport and get out of the country. Right. I'm going to be ready to go. You are ready. Yeah. You've got, you've got a little, you got a little pack bag in the safe. There's no bag. It's just the documents in order. Oh, gosh. Oh, my. I'm also the person, though, that when I go out of town, I text to my brother and I'm like, here's where the will is, here's where, like, I, I, I just prepare in that way. Yeah, well, now, our whole family knows that.

If something were happening, it's AC9 travel, and we've got a spot for that. I get that. But in your scenario where you've got to get out of town, you realize everyone else is at the, is at the airport. So the only thing that cash does is put you at the front of the line for coffee because you're offering more money. It's a disaster by that point. You're not wrong.

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It will absolutely be a game changer for you. Ashley is up next in Indianapolis. Ashley, how can we help? Hi. So I'm a realtor. My commission actually goes through an LLC we just set up. But I have a savings account where I've been putting my salary in, but it's been really floppy this past year.

So I really wanted to kind of get clear. We're on Baby Step 2. So how should I be using that salary account? Should I put in six months and dwindle it down and replenish it every quarter? Or should I have a full year's salary in there before I started attacking the debt? Oh, I see. Okay. So are you the only, is it just you or you said you're married, right?

I am married, yeah. Okay. Does your husband work? He does. Okay. What do you bring in a year and what does he bring in per year? So this year, I'm bringing in 130, and he's bringing in 40. Okay.

So what does it cost on annual basis? And we can look at this monthly. Let's look at it monthly. What does it cost on a monthly basis to make your household run? $4,000. $4,000. Okay. So what I would be doing is, since you know that,

it sounds like you're, whenever you get a big lump sum of money, you're throwing it in savings, and you're just kind of filtering in your portion of whatever makes the household run every single month, is that right? Sort of. So all of my commission goes into the LLC checking account, and then I put in what I know I need to get paid for the next couple of months, which is $2,000 a month, and that goes into our personal account. Okay.

And then you're trying to understand, okay, with the rest of it, can I go ahead and start paying off debt, or how much do I need to keep aside? Correct. Yeah, like I should do like six months and then replenish it. How about we come out at it? What if we come out at a different way? How about you tell us how much you have in savings, or excuse me, in the LLC account right now? Right now we've got $13,000 in total.

Okay. And how much debt do you have and list it out for Jade's smallest or largest? Cool. So small as so largest, we've got five in school loans. Okay. Seven in a motorcycle. 21 in car and then 22 in credit cards. Okay, a few more questions about that.

What's that motorcycle worth if you or he were to sell that today? Ooh, he rides in an awful lot, so I don't know. It might be worth five. Okay. You notice I said if, I get, I get it. And it's such a small amount. You guys could knock that out, so we don't have to get rid of it. Okay, so, Jade, you've got a picture of the debt right now.

What do you have in the pipeline as far as home sales? So I have two that are pending past their contingencies. That will be about 13,000 in the next 30 days. And then I also have five active listings. So we're looking at maybe 20 more thousand. Okay. Okay. That gives you a better picture.

Yeah, you've got 13 coming and then maybe another 20,000 in active. listings. And there's already 13 there. I probably, if your husband made a little bit more money, I might pull this number back. But if I were you, I'd want like two months there. Does that feel right? Two months in the account to know that I'll be okay. Yeah. So instead of 13, you said $2,000 a month is what you pay yourself. So she's saying $4,000. Four or five. Okay, let's say five. and that gives you eight to put towards debt. That's what she's throwing out. Does that feel like, and then on a regular occurrence, that five,

if it goes down, you're always replenishing it to where it's always five. You're paying yourself your monthly amount, plus there's always five in the contingency account. Does that feel good? Okay, so more like an emergency account. Yeah, but I don't want it to be confused with your emergency fund. Because this really just is, it's kind of like if you have any other sole proprietor,

you just want to make sure, hey, there's money coming in. I understand my income is very fluctuated. We would call this retained earnings in Entree Leadership Land, right? And so, but what we're also trying to do right now is we're trying to coach you up on what you can do with the 13 that's in there right now and make some headway. You've got a $5,000 student loan that you could knock out immediately. And how much money would that free up in payment? Oh, but $50. Okay.

It's still $50. bucks. 50 bucks is 50 bucks, which is great. And then the next month, my goal would be to knock out this motorcycle. Yeah. Okay. That's 12 grand. Although, over two months. Can I be honest? I'd sell the motorcycle. Well, I was going that direction. I'd get the two, I'd take $2,000 so that you're not upside down and I'd sell it. That's what I would do. But you said he rides it a lot. That's what the only reason I, you know what I'd do? I'd challenge him. Yeah. Yeah, I'd challenge him to go get a side hustle. What does he do, by the way, for $40,000 a year? So we actually live in Anderson, which is like a smaller market, but he is in training to

become an electrician. So he is going to skyrocket. He's going to crush it. Okay, you know what? He can keep it. That's where I'm at. I, yes. Joy, I mean, excuse me, Ashley, sorry, sorry. Actually, I think he keeps it and you guys go all in on this and knock this out, but I'd knock the student loan out today. I'd cut a check for five grand as soon as I got off the phone. Yeah, that's going to feel great. It's going to leave eight in there, Jade. And it's going to feel real good. Like, that's a massive momentum. Yeah. And then put the other three on the motorcycle. That cuts that in half, essentially. And then the next month, so that means in December, the whole bike will be paid off. And now you guys will be setting yourself up to work on the credit card debt. Now, is it one credit card

for $22,000 or is it littler ones? No, it's, there's, there's two. Two. They're basically split in half. Okay, so, okay, great. So, yeah, I would work on right after that, yeah, now you got $11,000, one $11,000 card and the next $11,000 card. You guys are going to go so fast like this. I love it. I love it. What's your anticipated timeline for him to start making the money as an electrician? I think he's due for a raise in six months, but about a year is and we'll actually know for sure when he'll get in there.

I think you guys, if you really get after it, I mean, you're going to be. be a long way down the line here on paying off this debt by the time he comes into some really nice money. I think you're going to be done by the end of the year because I think you're killing it on real estate. Yeah. Yeah. And I think the more of this... I'm taking myself for not having it done now. That's all right. It takes a minute to get the bearings on this. Listen, we're not playing armchair quarterback and looking in the back and looking in the past. Ashley, you guys are a great young couple. This debt is very manageable. I'm so proud of you. The thing that made me smile, by the way, Ashley, is when you told me what was in your pipeline, you know?

Great. Five houses sitting out there. Let's see if we can stack two or three more on top of that. That's a beautiful situation for you. And if he starts side hustling, yeah, mark my words. In 12 months, you're going to be out of debt. He's going to be, you know, increasing his income greatly. You guys are going to be, it's going to be looking good for you.

Right. Well, thank you guys so much. Yeah. You're in great shape. Head up, right? Super excited. we're going to put you on the spot before we let you go. What are the chances, Ashley, that you cut a $5,000 check today to pay off that student loan?

102%? Whoa! That's great. That's what I'm talking about. That's like a nice birdie puck clap right there. I think that's fantastic. I love that. You know what I love about her?

I love what people get it. She said 102%. That means it's hatting, Ken. I think she's cutting a check right now. That is. That's great. Boy, that feels good. Isn't it? Describe for people from a person who, with your husband, you paid off half a million.

What is it going to feel like to her? Describe the feeling for somebody's yet to do it. Oh, oh boy. It's like nothing else because it never comes back. It's a stress that never has the ability to come back in your life again. It's wonderful. Deleted. Deleted. From the deleted files. Yes. Yes. Evaporated, men in blacked. Today's question is sponsored by if you've tried everything to fix your defaulted private student loans and nothing's worked why refi can help. They'll build you custom fixed rate plans based on what you can actually afford.

Learn more at yrefi.com slash ramsi. That's the letter y-R-E-F-Y.com slash Ramsey. It's not available in all states. Alrighty then. Today's question comes from Catherine with a C in California. She says, My husband and I make a combined income of over $250,000 a year. We have no debt other than our mortgage, which we're on track to pay off in two years. We follow the baby steps, budget every month. We have college funds set up for our two daughters and are intentional with our money, Jade. Here's my dilemma. I love Christmas. And for years, we've only bought dollar

store or thrifted decorations that don't last. I'd like to invest around $1,000 and quality Christmas decorations for our home that we can use year after year to build memories with our girls. My husband feels like this is frivolous and not aligned with our financial goals. But it's something very important to me, Jaden Ken. How do I approach this conversation with him in a way that honors our financial goals but also makes room for meaningful spending. I'm just so mad

that this is even a struggle. You guys have done so well with your money. You've been so intentional. This $1,000 that really is a one-time expenditure because she's saying, can I spend $1,000 one time, get some quality stuff? This is not going to derail anything

that you're doing in your world. You could put the $1,000 out the window and let it blow away and it's not going to change anything in your world. Well, I'd want to know, I wish she was on the phone because I want to know how much she spends every year that he's supposedly okay with, which by the way, he's not okay with. She's married to Ebenezer Scrooge on this deal. He doesn't care about Christmas decorations. He just doesn't care. Yeah. But here's the thing. Here's the thing. Let's talk about this because you and I are both married. There are things

that Sam Warshaw will get excited about spending money on that in my mind, it's like this is so like unimportant or I personally it's not my thing I know I know the story about his Halloween outfit the man bought a Ninja Turtle costume straight off the movie lot straight off the movie but he sold some stuff we talked through it he did it the right way he did but my point is that is just part of being married is there's things that you got to let it go get your spouse like because he's responsible about it and this lady is responsible so the point I was making is let's say what do you think she spends what do you think she spends every year on the cheap stuff Oh, at the dollar store, she's probably spending like $15, $20 just getting some little doodads and stuff.

I think she, you know, you got to sit down with him and go, go, babe, this is actually a very small amount of money in the grand scheme of what we do. I'll bet she spends about $100 to $200 a year. So if she goes, look, $1,000 for really nice stuff, it's going to get us five years worth of stuff. We're not going to spend much at all. You just got to speak the guy's language to one degree. But at the end of the day, you got to pull the wife card and go, hey, you know what? We're doing great. Yes.

We've suffered in sacrifice to be able to pay this house off in two years. Listen, Sparky. Yeah, that's the one. I'm putting my foot down. That's the part because I don't think she needs to spend a whole lot of time explaining why this isn't very much money. I think the guy knows math and I think he knows that this is not a lot of money. He doesn't care. It's just not a value to him, but he needs to understand that.

It's just part of her. Yes. Yes. Happy wife, happy life, man. You know, you've got to turn the lights off at the end of the day. So let's make sure. I know what I'm saying? Certain battles are.

Worth the fight, Ken? You're talking to me. I just want people to know I'm giving out advice that I actually follow. Ken, say what's on your mind. You know I'm about ready to. Say it. I know what you're thinking. Stacey has bought into what I call the great candy inflation.

And in our neighborhood, some several years ago, we discovered some houses are giving out full-sized candy bars. I have a fundamental problem with that. I do too. I think that you're a teenage. You go buy your own full-sized. candy bar. You don't get it at my house. We're giving away free candy. You get the junior size. I just think it's too much luxury. These kids have no hardship in their life. I know.

I'm back. Get off my lawn. But guess what? She thinks it's okay. And guess what's happened the last three years? Papa sat back. Full-sized candy bars I'm handing out this year as I sat on my front lawn with the fire pit. And here I am handing out full-size milky waste and having a bad attitude the whole time. But what did you understand that allows you to do it? That it makes Stacy happy. Boom. And so therefore it needs to happen. Boom. And I can afford the full-sized

candy bars. It's not a budget item. You could have thrown them in the bonfire. I could have burned them. I almost did for principal's sake. I kid. I ain't ever going to throw a full-size Milky Way away. By the way, I did a little Mr. Coleman tax. Did you? Before the kids

got there. Oh, always. I had myself a Milky Way. You should have seen me sitting in the front. The whole thing. Waiting for the kids to show up, I went ahead and had myself a full Milky Way. Wow. Underrated candy bar. It's okay. It's not my favorite. Just saying it's underrated. You and I know what the deal with you is. We know about the Butterfinger and the payday. Butterfinger's the best candy bar in the world. And I agree with you on that. Joy is up in St. Paul.

Joy, you're never going to get that much of your life back as we talk about candy bars, but we're here for you now. Fantastic. I was wondering if there's a Halloween version of Scrooge that we could call you, Ken. Oh, good call. Yeah. Is there a grumpy Halloween movie character? Yeah. I think they're all grumpy. I'm thinking it. Adam's family. But you know what? Truth is, Joy, I've gotten past it. And now I just go with the flow. And I, the kids go, wow, when I hand them their full-size candy bar. So, you know. So good for you. Okay. How can we help you? Fantastic. Okay. I am working a full-time job right now that I sort of like and a part-time job that I love.

and I am burnt out and I need to make a change. And I've been doing this for about a year and I'm just, I'm over it. So I think that my two options here are to number one, quit the part-time gig that I love and just do the full-time thing that's more stable that I don't really like. Or I'm pretty sure I'm going to have a job offer come in at the end of this week for another part-time thing that will be in the field that I love. so I could do the two part-time things together. Ooh, this is pretty simple, I think. Do both part-time jobs pay the same more or less than the full-time? Yeah, if I was just doing the full-time job,

the two part-time jobs together is very comparable to what the full-time thing is. Okay, and if I heard you, you love both part-time jobs. I know that I love the one. And the other one, you know, I haven't done it yet, so I'm not 100% sure, but I'm pretty certain. Okay, but you know that that's up to you to determine in the job interview. And I want to tell you, Joy, that the job interview is for you, not for them. So many people think that we're always trying to impress everybody else. Pick me, pick me, love me, hire me.

And I think the job interview is more for you to go, do I want to be picked by you? And so it's certainly important in this situation that you don't take this second part-time job unless you know that you know, that you know that you've got a good picture of what this thing's going to look like. And that's asking questions like, describe this job every day and every week. How much does it change? When it changes, what's it look like? Another fun question to ask the interviewer is, describe a year from now if I'm crushing it and my annual and you're saying, Joy, you crushed it. What did I do?

People don't get asked those questions. That's a great question. And you need to put it on them and just sit back and smile and keep asking those questions. Now, let me ask you another question very quickly. Are you in the full-time job because you just needed the income to pay off debt? We don't have any debt. We're in babysat five and six. I just, but I did need more income because we do have a mortgage.

And I wanted the full-time job because, you know, it's more stable. I've been looking for a full-time job for three years and just kind of piecemealing together, part-time 10-99 contract stuff. So that's why I took the full-time job. All right. But the point is, is you guys don't have to have the income. It's nice, but you don't have to have it. Or we have to have it. Yes or not? No, we need more than what the part-time job can give me. All right. So my point is, I would go with the two part-timers. If, if you do what I tell you to do and you ascertain through the interview process that this is, in fact, a great

part-time job. Now, I've got two part-time jobs. and I say Sayonara out. I'm out. No longer doing the full-time job that you don't love. It's very simple. We keep the income, but now we got more joy, pun intended there. I did that on purpose. I couldn't help myself. You did a good job. Thank you. Yeah, yeah, you're a smart, smart lady. I think you know what to do here. So do your due diligence. If the interview feels right, it's a good thing for you. Go for it. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. Alongside the fabulous Jade Warshaw, I'm Ken Coleman, excited to be with you all.

The phone number for you to jump in is AAA-825-5-2-25. Kelly is going to join us now from Syracuse, New York. Kelly, how can we help? Hi, thank you so much for chatting with me. So I have kind of a loaded question with a complex. thing, but I'll just give you the basics up front. I am 37. My husband is 35. We have two boys. One is almost one. One is two and a half. We have been working on baby steps. We've probably got about 80,000 or so left. And other than that, we have no consumer debt. It is all either student loans or we owe my

mother-in-law a little bit for helping with taxes but um just this last week i got diagnosed with um brain cancer actually and so this i'm just trying to like get a grasp on like what what should we prepare for um right now we're on Medicaid and so um a lot of our medical bills are covered but there's some um fertility stuff and stuff that's not because covered and I feel like we're always kind of teetering on the are we going to qualify for Medicaid this year or not and so just what like where should we start my husband and I as far as like Kelly yes you are can I just tell you the way you started off this call I would have never guessed that you were about to tell us that you are an inspiration I am blown away by your

spirit. So I wanted to say that. I wanted to say that our hearts are stunned for you. However, I'm inspired by you, and I think you're going to beat this. I am blown away. So first of all, just know that we're going to walk with you on this, and we're so sorry that you're facing this. The Medicaid issue, what is your income? What is your combined income? Because that's the income, it's income base, am I right? That's right. Yes, it is. So, my husband is an independent contractor, so he can write off quite a bit. And so that is, you know, he can write off trucks and tools and miles and all that stuff. So that, I think, has kind of kept us in that Medicaid.

So what does he do for a living? I want to say he builds custom homes. He's the actual home builder, the general contractor. No, he's not the general contractor. He works for somebody. Okay, and what is he, and I understand, don't give me the fancy tax answer. What's his income in a year? I want to say we probably take home five grand a month.

So what's that 60? Yeah. Well, that's net 60. And it sounds to me like the Medicaid, you really need the Medicaid, but it's the Medicaid, but at the same time I never want somebody to stay in a income bracket just to get government benefits. Totally. No, we know that. We don't want to do that either. Can you tell us about, and I'm not trying to get too far into it, but with your cancer diagnosis, what are they saying? Is this something that they can go in and there's a surgery? Is this something

that's ongoing? Do we not know what the future looks like? so this was um literally friday we have like disappointments in the next two weeks coming up before thanksgiving um we're meeting with you know all kinds of doctors and you know so you don't know all of the people you yeah we don't know um the understanding that we have so far is that it's not in the greatest spot but surgery could still be an issue but there's probably going to be some type of treatment. We just don't know exactly what that is yet. Well, high level, here's what we would tell you, that right now we're pressing pause on the baby steps and we're stacking cash. So this is what we would tell someone if they knew

a baby was on the way and we have unknown expenses. So it certainly falls in that category. So you press pause. Do you know off the top of you had how much you've been putting towards debt a month? I want to say, so we are in kind of a lucky, I guess, I'm going to say lucky situation right now is that lucky and bad. We moved in to my mother-in-law's house to take care of her who has a version of Parkinson's. So add that on top of this. So we are currently, we have a house that we have good friends who are just renting straight from us. And you're not paying for your current living, you're not paying the mother-in-law, correct?

Correct. We're not paying for her. We're not, so we're not having to deal with normal hours. But I want to come back to, I want to come back to the reality of where we stand as a Friday hit us. What were we putting towards baby step two total? What were we putting in payments? I want to say 2000-ish. Great. Yeah. So that's the idea. The idea here is we're stacking up as much cash as we can. Keep that same intensity that you were and put that money aside because the long and the short end of it is your husband may be missing days of work. There's going to be days of takeout. There's going to be you possibly hiring a cleaning service. There's going to be needing other help with the mother-in-law since you guys may not be able to help in the same ways that you were, right?

There is a lot of, and I don't say this in the way that you're a burden, but there's a lot of inconvenience coming this way because you guys must deal with this. And so having the extra money set aside to where it's not a financial problem or struggle is going to give you guys so, so much peace while you're busy getting well and, you know, recovering from this. And so that, that, Ken is exactly right. So as part of that, like, there's a couple of like small questions. he has a truck that might be worth 20,000. I'm not sure if it's quite that much.

We do own our house if we sold it. We could maybe walk away with $50,000. And so as far as those two are those things we should consider selling. Also, should we wait to see all that happens? I would definitely hold on the house. Don't do anything in the house. The truck, though, what would he make? if he sold it for 20, what would he make on it?

We paid it off. So we could walk away with 20, but we need to find something. Oh, I see what you're saying. I wouldn't. No. Nothing's on fire yet. Yes, you guys have the debt. You're covering the minimum payments, no problem. You have the $2,000 of margin. I get wanting to really go hard at this, but let's, I mean, like you said, this is still so early. Let's go through the next series of appointments that you have coming up. Let's get a little bit more information. And you can call us back, too, Kelly. If you...

As a matter of fact, do. Yeah. As this goes, call us back. Okay. And that way we can help you keep planning. All right, we only have about 50 seconds. Hit us super fast. That's fine. Go ahead.

We owe my mother-in-law about $5,500. She's a little bit salty for paying for some of our taxes. Should we work on paying that back as a minimum payment? No. It's storm mode. And you're doing her... This is the same one that you've been taking care of, I think.

So you're doing her a solid. She did you a solid right now. Let's call it even. That's exactly right. Hold, hold, hold. Everything we're focused on is taking care of you. Doing what the doctors tell you, fight this thing. And I'm going to tell you something.

Kelly, your spirit is going to serve you so well. Keep that chin up. I'm so blown away by your spirit. What a phenomenal lady you are. We're praying for you, Kelly. All right, let's go to Richmond, Virginia. Jason is there. Jason, how can we help?

Hey, guys. Thank you so much for taking my call. Sure. So my dad owns a small electrician business, and he wants to buy a $90,000 truck for his business so he can use it as a tax write-off. Sure. He had never been adverse to going into debt. Okay, that's good to note.

So he's never been adverse to going into debt, and he thinks that if he gets this truck, he will not have to pay taxes to the government, and he'll be able to take that money and just put it into a truck that eventually he'll keep. Right. He owes from last year in his taxes, but I think that's the result of him making a little bit more than he thought.

It wasn't like he was not paying or anything. Right. So he owes, and he's expressed that he doesn't even need the truck. He just doesn't want to pay the taxes. 100%. Yeah. I've heard this before. We've all heard this before.

And it's such a weird mental tradeoff where people go, wait a second, I'm going to spend money, my money, in order to pay less taxes. And we think that's some sort of a good deal. And I can't even imagine what a payment is on a $90,000 truck. Yeah, because he's not. He's going into debt for it, correct? Correct. Yeah.

So you've got to help him, Dad. You're going to spend, I'm going to guess it's $800, $900, maybe over $1,000 a month. I have no idea what he's going to put down. That's a world that I don't even know, so I don't even know how to estimate. But it's going to be a big chunk that he doesn't even need. So you've got to kind of go, Dad, you just told me you didn't need the truck.

That means you don't need the $900 a month payment. And you're doing all of this because, you like the way it makes you feel because you're paying less in taxes. It's just such a weird financial tradeoff and it never makes sense when you get it all out on paper. Yeah. But in your head, with no one else pushing you on it, it seems to make a lot of sense. Jade, you've heard this more than I have. You've coached people through this.

I mean, back in the day, you know, when my mother-in-law did our taxes, she was telling us to do the same thing. You got this money sitting in the business. You need to go do this, you know, spend it. Well, my bigger question is, before we even get into all the odds and ends, will your dad listen to you? That's the real question. If you tell him, hey, dad, listen, going into debt to avoid a couple thousand dollars on taxes is not the move. What would he even say to you? Yeah, I mean, we've talked about it, and I think he takes my opinion into consideration.

what's the numbers by that I mean like oh sorry what did he tell when when you told him when he told you the plan and you spoke back to him what were the actual numbers how much is he going to save specifically that's what I want to know and does he even know right yeah yeah and that's like something that like I have a computer science background I'm pretty good with numbers what I'm not good with is the tax code so that's really like what I've been having a hard time and figuring out what is deductible so that I could give him a, like, a factual number of how she would save. It's not going to be over $90,000, I can tell you that. That's the point.

The point is he's going to put $90,000 on his name. He's going to add that in the plus category on his side. And I can guarantee you the savings is not going to be as such. That alone does that make, I mean, I don't need to tell you that. But do you see what I'm saying? Yeah. Yeah, I guess what he's, yeah, I guess it's like with the tax savings, it could be around 20 to 30 grand that he saves. Mm-hmm.

And so, like, he'd still have, like, a $90,000 truck that he paid 60 to 70 for. So I guess that is, like, a huge luxury. Like, you don't need that. So. Why would he have only paid 60 to 70 for the truck? He's paying 90,000 for the truck. Right. I just feel like if he like, and I don't know these numbers. Oh, you're saying after the savings, after the taxes. Yeah. Yeah. No point of it. No part of that makes sense. He's he's spending money, but he's not making any money per se because he didn't even need the item to begin with. That's the, that's the equivalent of me just going to the store and be like, well, I bought this thing. It was on sale. Usually it's this, but it's 50% off. So I just got it for 50% off. But it's like, yeah, but you still spent. $60,000. That's essentially what he's doing is he's saying I can get a truck for 30,000 for

30% off. No, I don't need a truck, but I'll just get one anyway. That's the equivalent. Maybe if you explain it to him like that, it'll help him understand. But I have a feeling he might do it anyway. I think so too. He can punch in the numbers. I just did a little, I mean, this thing is all over Well, first of all, if it qualifies, as many full-size pickups do, it's the GVWR over 6,000 pounds. So if it's over 6,000 pounds, you could potentially write off the entire $90,000. But it still doesn't qualify in something we'd recommend because he's going into debt for it. Right. You know what I mean?

If he's flush with cash and he's just, you know, but going into debt, for a tax deduction, but then there's also scenarios where he might only be able to write off you know, section 179 deduction limit for 2025. He might only be able to write off 31,000. So he needs to get with a tax point. Yeah, find out more about it. If there was a situation where he was paying cash. Yeah.

If you're paying cash, sit with a tax pro. But if you're going into debt, this makes zero sense. I would agree to that. I would agree to that. All right, Jason. And I wish it were different. You've got your work cut out for you. Yeah.

And it's your dad. Fortunately, it's not your life. Yeah. Yeah. But I mean, run the numbers. If you'll listen to you, run the numbers and show him on paper. Right. And just walking through it and go.

And you, by the way, you got to make it simple. So you're going to pay this much over the life of the loan. Okay. You're going to pay this much per month. Yep. To get this savings. All to get this. And you already owe the federal government taxes.

It's got to be super. simple. You can't debate emotionally. You can't say things like this makes no sense. The Ramsey people say this. None of that's going to work. It's got to be real numbers. And even then, to your point, Jade, somebody goes, you know, I'm going to do it anyway. I mean, we've all been guilty of going to the store. We didn't plan on getting anything, but we see that it's 40% off. And we go, well, that's a good deal. And, you know, I haven't put anything on a credit card in over a decade, but plenty of us would swipe a credit card to get the thing that we don't need simply because it's 40% off. That's essentially what's going on here. Yeah. And we do it even if it's not

debt, if it's debt. I mean, I'll buy stuff sometimes that I walk by and I go, well, that looks nice. Right. And then I see the deal on. I go, well, that feels nice. Yeah. I don't need it. Yeah. But the point is there's levels of how irresponsible that looks. It's one thing if you had cash. It's one thing if you needed the thing. You found it on sale. You paid cash. Great. You got the Yeah. Next level is I didn't need the thing, but I did spend my own money and I paid cash for it. That's me. That's debatable. It's debatable. Then the third tier is, I didn't need the thing. It was on sale. I bought it and I bought it on borrowed money. That's when we're getting into Dumbo territory. And by the way, this age-old argument that we've heard on the show a million

times, it's all rationalization. So I want people to understand that what's happening here with with Jason's dad is it's rationalization. I don't need the truck. Probably doesn't even want it. But it might be a fun toy, but I can justify it if there's a good cause attached to it. So we don't even run the math. We don't even think of the logic.

You say the word taxes? It's a good cause, right? Because people hate getting taxes. You feel like you're sticking it to the government. Right. And you're really not. Right. You know?

You know what I mean? And here's one for you. What are the taxes on a $90,000 truck, Jade? That's what I'm saying. You're paying taxes? Yes, yes. So I hate to be like sticking it to you over there, Pops. But, you know, you're paying taxes on that car as opposed to just holding on to that cash.

Right. And can we talk about that for a second? How about getting current with your current tax bill? I love that. Love that idea. That's fantastic. Item one, Jason's dad. Let's go ahead and get current on what we owe the IRS.

Last time I checked, they are not fun to deal with. No. Oh, yeah, yeah, yeah, yeah. All right, question for you, folks. Do you ever feel like you're doing everything right with their money, but you're still not getting anywhere? Well, if that's you, you're not alone. Maybe you've made the changes and had a friend. few wins or something still feels off. It's not because you failed. It's because money isn't

just math. It's emotional. It's exactly why Jade Warshall wrote her new book, what no one tells you about money. It's the very first Ramsey book that takes an honest, deep dive at the, looking at the emotional side of money, and it's going to give you practical tools to make progress for good. You can pre-order it now for the fabulous price of 2499, and when you do that, you get over $100 in free bonus items, including the enhanced audit. your book, early access to the e-book, instant access to the exclusive video where Jade teaches you. It's entitled Your Financial Checkup and then exclusive three-week online book club plus live Q&A with Jade. So how do you get all that? Pre-order. You pre-order it at ramsysolutions.com

slash store. That's ramsysolutions.com slash store. I've got to give you a quick word on it. Why should people buy this? Because Dave gave you a plan for your money. And now I'm giving you a plan for you, the part that's causing you to not work the plan for your money. That's it. Okay. I like it. There it is, folks. It's a plan.

It's a proven plan. Just like, yeah, the money proven plan, this is a proven plan for your motions. Boom. Done. Yeah. Ramsey Solutions.com slash store. Go get it. Let's go to Susan, who is in New York City.

Susan, how can we help? Yes. Hi. Thank you for taking my call. Sure. So I'm a 69-year-old divorced woman that has four adult children in their 20s. I own a home worth about $780,000 with about a $380,000 mortgage left on it. I have only about $5,000 in credit card payments that I have left.

My question is, is that I would like to build a little. detached mini house, I guess a small tiny house for me to live in off the side of my house, which I can do as like a senior living situation. And then I want to rent out my

three-bedroom two-bath house for about $4,500. And I have made an apartment also downstairs for another $2,000 that I could rent out. And then I would live in my tiny house. How do you feel about doing this for my end-of-life retirement?

plan. I don't like it. I don't like it either. Why? Because it's a requiring you to go into more debt in order to do it. That's thing one. And it's requiring you to be a landlord in old age. Yeah. Because it's like you said this. Yeah. Yeah, I'm a contract. I've been a contractor though. So, you know, that that part is is easy for me. What do you mean? Like, I'm a general contractor. Okay. How old are you? I'm 69. 69. I've been a contractor for 30 years.

Yeah, but to Jade's point, this is not a know-how. You know how to do stuff. Totally impressive. It's just a function of, is that something that you want to lock into? What happens when you can't physically do it? It's not to know how. You've got the knowledge. But as you age...

Well, then I would get it. Then I would have... If something I came up, then I would have to get help, of course. What are the numbers? First of all, we're never going to tell you to borrow money. So the answer is no to borrowing money to build a tidy home. If you save up and pay cash for it, after you've walked the baby steps out, which we teach, and you already have $5,000 in credit card, and Jade can walk you through that in a second.

But I just want to know, for the rest of the numbers, if you rent out your home plus the bedroom in the basement or whatever, and I think you gave us about $6,500 a month in rent that you believe you could get. Did I get those numbers right? that's correct yeah what it what do you owe on the home so 6500 is what you're taking in what do you owe every month so my and then about 20 about 2 800 so the mortgage is 2800 can I just ask a simple because there's a solution here that I'm just wondering about why wouldn't you uh the mortgage is 2 800 a month why wouldn't you stay in the three bedroom two bathroom part and just writ the apartment below oh that's not going to give me enough it's not just not going to

give me enough money. Okay, so let's solve a little bit more of that because then you'd be paying $800 a month for a mortgage, which I don't think you're going to live anywhere cheaper than that. No, that's a fantastic number. So let's talk about this. So you've got this house. I'm going to hold it to the side for now. It's worth $780. You said you owe $3.80. Is that correct? Yes. Okay. So you've got some nice equity there. You've got only, the only debt in your name is the $5,000 in credit cards. Is that correct? Yes. Okay. Is there any money? Is there any other debt anywhere? No. Is there any other money anywhere? No. Okay. You have no savings? No savings. And what are you earning right now? Because you said you're a contractor.

Mm-hmm. I would say roughly only between, say, 50,000 to 60,000. Okay, about $60,000 a month and... No, no, a year. Oh, yeah, I'm sorry. You're right, a year. And... What's your social security? Very little. 800. Nothing. 800. Okay.

So that's nothing there. And you have no retirement accounts at all? Nothing. So I think for you, I didn't want to say this because I was hoping that there was a way to get to it. I mean, I can ask realistically how many more years you plan to work? Probably, I would say eight to ten. Eight to ten. We can do something with that.

that. Yeah, we got to pay this credit card off. We're going to do that immediately. And then from here on, we've just got to start stockpiling. We've got to start stockpiling retirement. That's what you've got to do. Because if you can work for 10 more years, we can turn this around a little bit for you and forego selling the house as long as possible. And that would be my plan. Would be for 10 years, I'm going to save as much of my income as I possibly can. I'm going to. I'm going to. I'm going to rent out this lower apartment and then I'm going to look up and in 10 years I'm going to reevaluate can I keep this house and can I live off of what I've stockpiled here or do I need to sell this house and by then hopefully it's grown in value a couple hundred thousand

dollars more okay so my ultimate goal is to keep my house for my family my kids you know so this is the only way that I could think that without you know that that that would work Well, I appreciate that. And I want to keep the equity of that, of the house for them to, you know, they're not going to, it's going to be very difficult having four children that are, you know, in their 20s to buy a house these days. And so really that's, that's why I was thinking that this, this plan would be something that would, you know, possibly enable that to happen. Well, but Jades, did you understand Jays plan? Jays plan allows you to keep the house. Yeah, because if you think, let's run some real numbers here for a minute.

Let's say right now, what are you making around $4,100 a month? Roughly, yes. Okay. So let's say you rent out the downstairs apartment. So you're paying $800 a month in mortgage. Let's say you picked up some other work somehow, some other things that you could bring in some money. If you could get to the point where you're putting away $2,000 or $1,500 a month into retirement, in 10 years, that's $400,000.

that ain't bad to have that at 79 years old and you could draw some off that right and suddenly that's not looking so bad when you say draw you say draw some in what way well i'd want to i'd want to see if there's any way that you can for sure off the growth for so maybe 10% and work with a smart vester pro to say what is this how long is this going to last me what can i take from this to where I can take from this until I'm 85 or what have you, 95. And I'd work with a SmartFester Pro to get that number. And then that's buying you time of not having to sell this house. That's right.

Because if you can live off that nest egg, that's another day that you get to keep this house for your family. Yeah, I did that. You see what I'm saying? My main goal. Yeah, no, that's my main goal. Or listen, here's an all. And we're trying to get you some retirement income of which you have none, okay? But if you decide, if you decide not to do that, go with your plan, I would at least wait

and pay off your credit card debt and I'd save up the money for the tiny house if you're going to go your route. Don't go into debt is my point. I love Jade's route. It's the route. We've got to think about your long term while you're healthy. Because your Social Security is going to pay for the rent. So you could easily live off to, invest to. That's what I would do all day and not go into more debt. Our scripture of the day comes from Luke 11, 9, verses, excuse me, verses 9 and 10. So I say to you, ask, and it will be given you, seek, and you will find, knock, and the door will be open to you. For everyone who asks, receives. The one who seeks, finds, and to the one who knocks, the door will be open.

Our quote of the day from Ronald Reagan, we can't help everyone, but everyone can help someone. All right. Sadie is up in Grand Rapids, Michigan. Sadie, how can we help? Hey, so my question today is, should my husband and I pull out our retirement to pay off the last of our consumer debt? No.

Okay. I'm just kidding. Maybe step two, we paid off $12,000 as credit card debts from our selling property. and we have $39,000 left on a vehicle, and that is our only vehicle. And so we were thinking, you know, to get out of debt right now and to be at a better point, should we pull that out. Do you understand, and if you don't, it's okay, we'll explain. Do you understand why we both said no in unison?

I believe so. Tell us. Well, no, you tell us. It's always better if you get it without us having to explain it. Why do you think we said no? Well, I mean, it's already invested. It's already in the works, and you have to be penalties as well as taxes. You got it. You've got it. And can I just say there's no shame in your game? We're not judging you. I love that you've had it. Yeah. And this is all the result of having it. It's excitement to get debt free. We want to pay it off today.

Yes. And we get that. And we've both been there before. But you guys have done so much. How much money have you paid off in debt to this point? Um, I don't say that's the 18,000. Okay. And you did it in one fell swoop with the land sale? Oh, we lost you. All right, we lost you. Are you there? Yeah, well, we are.

We're not sure you were on that one. We couldn't hear you. Go ahead. I'm here. So we paid off 12,000 on the property and roughly 6,000 on a vehicle already. Good. Okay. And what's your incomes together?

So I don't work on a stay-at-home mom. and my husband makes about $60,000 before taxes. All right. Tell us about the $39,000 car. What is it worth if we were to sell it private sale? So we're underwater, roughly $10,000 on it right now. Okay. Well, that's the other reason why you wanted to dip into the retirement,

because that feels even worse once somebody's committed to something. So if I were in your shoes, what would happen? I mean, if you really wanted to get out of this fast, I'm not saying you have to do this, but if you really wanted to get out of it fast, you could say, okay, we're going to save up a quick $10,000 maybe, and then get a loan for the other $10,000. So you get out of the car, and then you have $10,000 to pay for a cash car. So now you have $10,000 of debt plus a $10,000 cash car.

How quickly could you save up $10K? I mean, probably within 10 months, 12 months. 12 months to save up $10,000? I mean, with you guys, side hustling, he picks up extra work. You're working at night. You're doing something from home. I'm talking about balls to the wall. How quickly could you do it? Aggressively, probably six months. Okay. This is, as excited as you were when you first called about getting rid of this and going to any extent, even, you know, pulling out retirement, I want that same energy on the side hustle

to get the actual cash to do it. Because you guys can do this. And again, this is a suggestion because I thought you were super, super excited to get out of debt, if you think you can pay off the 40,000 here quickly, it's going to take the same sacrifice. So it's just how quickly do you want to do it? Because if you have 40,000, that's going to be that much longer that you're going to be in that frame of mind of we're doing whatever we have to take, beans and rice, rice, and beans, right? And that's not necessarily fun. So I was just trying to shorten it for you. And that's kind of where we're at. We're only positive $600 a month.

So we're putting that towards it. And then I'm working on getting a part-time job to work from home to help with that. So we'll be hopefully $1,100 positive a month. And that's with nothing extra. Great. Great. And your husband, he needs to kick it into high gear too. And when I can, when we say scorched earth, high intensity, we, we.

really mean it, Sadie. Like, this is, this is, I, I kiss my husband in the morning and I might not see him until we're both sleep at night kind of thing. Yeah, I mean, we've, we've had so many debt-free screens. You may have heard them on the show where people are working crazy hours. And, you know, just instead of the crazy hours, let's just throw a number out there. All right. So let's say you guys generated an additional three grand a month. And all three grand of it went to the car. We're out in a year. Now, I always like to oversimplify, but I don't think that's truly oversimplification. I'm just going, I'm giving you a number. Then you work backwards. And then you start going, well, if I got to work this many hours to get there. But it's like,

what do we have to do, Sadie, you and your hubs, through selling more stuff and working like crazy? Can we generate three grand a month that we would put on the car? And in that case, we're out of it in 12 months. And we got a nice car. Mm-hmm. Great. I would go that route if it were me. Okay. And I'll tell you why, and I want Jade to take on this, but I've heard Dave say this. I've been on the show a day before, and he'll say somebody the effective, I like you paying

this car off so that you get this whole debt payoff with the large swaths of selling something here and there while we fundamentally don't care. You don't feel it as much as when you're hustling. If it was a little cheaper, I might say that, but you know, you guys making six, and having a $40,000 car. Oh, that's too much. It's too much. No question.

And that for me and the fact that you had another car that was, you know, 18 or whatever it was, six. It's just you guys have too much for your income. And so that's why if I had to do it, I would sell the car and get something cheaper. Not saying that you have to stay in a $10,000 car forever, but after this debt is done, then you can save up another $5,000 and get yourself into $15,000, right? Get something closer to $20,000, that feels right. but I think that if you do my plan you'll still get some of the medicine that Ken is talking about of the oh yeah I got to work I got a hustle I am all for selling the car but because it's the only

debt they have I'm fine if they attack it too but I'm giving you a 12 month plan yeah on the car yeah and you got to choose but it's going to be uncomfortable regardless yeah for sure yeah Is your husband fully on board here? Oh, 100%. Yeah, he's listening to the show as we speak. Okay. Okay. Game on, game on. Yeah, well, there you go.

I mean, you'll be surprised what you can get for $10,000. Oh, I love searching up cars. Yeah. You know, and by the way, that's the quickest way to do it. Now, again, you've got to go get the smaller loan. That's the only time we're okay with that. But you're going to get out of debt faster. No question about it.

So, yeah, appreciate the call. Good call. Good call. Explain the, I love this because, again, I always want to remember we have a lot of new people coming in. Yes. Explain our ratio on car. Why did we say this was too much car based on their income? So the thing to remember about cars is we all need transportation, but cars go down in value. They're not going up. And once they start going down in value, you feel that in your wallet. You feel that in your take home. And so if you're making, you know, our rule of them is you shouldn't have more than 50% of your salary and things. things that are going down in value. So they make 60,000 a year. The max car they need is about 30,000 combined. So each of them are driving a $15,000 Camry. That's basically what that looks like. They've got, they've got a $40,000 car and then another vehicle that they paid off. So we already know more car than they need. And I know, Ken, when we tell people to sell cars, it's like,

what have, what are you saying, Jade? But the truth is that car payment is keeping so many people from doing the things that they want to do and need to do with their money, like invest for the future. And so if you can get back your car payment, you are ahead of most Americans. If you can sell off your vehicle and if you're upside down, what we were telling them to do is go to the bank or I don't care what kind of debt you get for the difference. If you're going down, it's good. If you're going from $40,000 to $6,000 because you got a $6,000 loan to cover the upside down portion so you can actually sell the vehicle. That is a win. That is a win. And while we're talking about this, this may not be a fun take for a lot of you, but, you know, when I hear a lot of

Americans, you know, talk about how expensive it is to live, most of the time they're not looking inward for just a moment to go, what are our combined car payments? And with two car household, you're probably looking at $1,500 a month. Easy. That would change their life if that wasn't there. So just food for thought. Hey, remember this. There's ultimately only one way. It's a financial peace and has to walk daily with the Prince of Peace, Christ Jesus.