The Ramsey Show - App - You Can’t Win With Money if You Don’t Know Where Your Money Is (Hour 3)

Episode Date: October 26, 2023

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help you win in your life with your money, your work, and your relationships. The phone number for you and your question is 888-825-5225. 888-825-5225. 888-825-5225. I'm Ken Coleman. Jade Warshaw joins me. And we love being here for you and your questions.

By the way, the Ramsey Show Annual Listener Survey is live. We want to know, what are your favorite parts of the show? What do you want more of? What do you want less of? What topics do you want us to cover? All these things, we want to know how to serve you best. There's two ways to participate. You can text the word SURVEY to 33789.

That's SURVEY. Text that word to 33789 or visit ramsaysolutions.com slash survey, ramsaysolutions.com slash survey. Sign up today, and you will be entered to win a $500 gift card just for telling us what you think. So be nice to Jade and I, please. Well, speaking of survey, Ken, I have surveyed my comments on social media. And we saw that people wanted to hear more about the baby steps. And so we post, I just, the team and I posted a video explaining, just briefly explaining baby steps one, two, three, and four. And it went

bananas and so I thought to myself it brought in a lot it brought in like 30 or 40,000 new folks all new to Ramsey and I thought it would be good to go through and really explain what we mean when we talk about baby steps one just a fundamental simplicity of that video and the plan went bananas on on Instagram yeah y'all showed up. Well, it probably wasn't you guys. It was new folks. So just when I think that everybody knows the baby steps, there's still people who don't know it. And that's great. Let's do that. So this is great. So if you're new to the show, we have seven baby steps and we're going to walk through the first three and some of the general questions around them. So I'm going to tee you up. You good?

Okay. Yeah. Rapid fire me. So baby step one is we want people to put a thousand dollars in a savings account for your garden variety basic emergency. So the question begs, why a thousand dollars? Is a thousand dollars enough? No, a thousand dollars is not enough and it's not intended to be enough. Hear me loud and clear. This is just temporary. At the end of the day, if you have a thousand dollars saved as an American, you are ahead of the pack because 56 percent, the majority of Americans could not cover a thousand dollar emergency without using debt. So if you have that, you're ahead of the game. 36 percent of Americans have zero dollars saved. So you're ahead of the game there as well. So yes, $1,000, it's not enough, but it's enough to get you going. And so you're paying off your debt

quickly. And then later on, you'll stock it up. And you can do it quicker than you probably think. What do you think? What do you think is a rule of thumb on how quickly you can assemble $1,000 for nothing? Average person gets it done in 30 days because you're going ham. You're selling stuff. You're selling stuff. You're working extra hours. You are just literally pulling from everywhere you can to get this. Ham? Yeah, going ham sandwich.

I've never heard that before. If I say that, will I be cooler? Your sons will probably be like, who do you know? Well, they know I know you. So they'll clearly think it's you. Okay, good. I'm going to use that one this week. It's going to get some eye rolls at the house. But I just say that?

Just ham? That's all I say? You're going ham? All right. See, now I'm learning along with the audience and everybody enjoys that. Okay, now, so where do they keep it? I said in a savings account that is separate from checking. Why do we say that? Well, because A, you get tempted by it. Some people are more tempted by that than others. I'm a very, I see money and I'm like, well, how can I spend it? So keeping it in a separate account, I even like putting it in another bank, like an online bank. I've mentioned Ally before. We don't sponsor them in any way, but I love that. By the way, this account, we're not putting like debit cards and things like that attached to it because it's an emergency fund. We don't want to have easily accessible access to it. Right.

So high yield savings account, if you can. Oh, I'm sorry. You know what? We're just talking about baby stuff. When you have to put in a high yield savings account, you can just sock it away. You know, put it in your sock drawer, put it in your normal savings account. That's fine. Sock drawer?

Look, where I come from. You don't really mean that do you thousand dollars in a pair of socks well it depends on what neighborhood you live in okay all right i'm gonna put it in the bank put it in a savings account now i think we got to get to this what qualifies as an emergency that we're going to actually get into the thousand dollars hardly anything that's hardly anything qualifies for an emergency number one it needs to be completely unexpected all right because some of y'all are like oh well you know christmas is coming around hardly anything qualifies for an emergency. Number one, it needs to be completely unexpected. All right?

Because some of y'all are like, oh, well, you know, Christmas is coming around the corner. No, completely unexpected. It has to be completely necessary. And it has to be urgent. All right, real quick on this one. Why wouldn't Baby Step 3, which is a three to six month emergency fund,

why wouldn't that be the first baby step just to kind of ease our pain and our fear? Why would we not do that? Well, let's take a look. I mean, we already said the stat, most people don't have anything saved. And the reason they don't have anything saved is because all of their money is going out of the door in debt payments. So it's hard to have the money in your budget when you've got a bunch of debt to stack up three to six months of expenses. And most folks give up or they keep dipping in and spending it, right? There you go.

So our baby step two, which is we say pay off all of your debts. And it's very specific in baby steps too, Jade. We say pay the smallest debt first, then move up, if you will. So smallest to largest. Why do we recommend that? Yeah, because we want you to win. And a lot of times that smallest debt, right, it's just a $200 Capital One card or a $1,500 deal, you know, that you have with a credit card company or a little private loan. When you pay that off,

you feel that win. And it's like, it just excites your brain. And you're like, you know what, I can do this. And so you pay that one off and you have the extra money freed up and you're able to throw it to the smallest debt after that. And you get that momentum and you get to experience those wins and it does work. What's the average amount of time that we find it takes people to pay off debt in baby step two, if they're going after it? Two years or less. Two years or less. Wow. Fantastic. Two years or less. That's nothing. It really isn't in the grand scheme of things. And I want to point out here as the guy who's always focused on work, let me tell you something.

You've got to work, work, work. Every debt-free scream I have ever sat in on, we have seen their income go up. Yeah. And the more income you make, whether it's multiple side hustles, two full-time jobs, whatever your scenario is, the way to get out of the baby steps faster is to increase your income. Go work. But Ken, break that down because for some people it's the core income and some folks just need a side hustle. That's exactly right. If we can't increase it

via our core career, so if we can't get in extra hours, if you will, or overtime within that, we're going to go work multiple other jobs, work in weekends. We're working 80, 90 hours a week, depending on how intense our debt situation is. All right, that takes us to baby step three. Once we pay off all of the debt, how do we determine if we want to go three months, four months, five months, or six months? Because Dave has given us the range, three to six months of expenses. It's all about stability. So if you are a two-income household and you both have really solid jobs and you're both healthy, three months is probably fine. If you're a single mom and, you know, you are a server at a restaurant or you, you know, have some volatility in your single, but you've got like multiple income sources. Maybe three months is okay.

Look at your health. These are the things that we're looking at. And it doesn't have to be three to six months of your full budget. We're talking about what it takes for your household to survive. This is a bare bones budget. So do we keep it in that high yield savings

or do we invest it? Yeah, this is not going in the sock drawer. We're putting it in a high yield savings account. We are not investing this money because if something happens, you need to be able to get to it. So do not invest your savings account. There it is, folks. Baby steps one through three. That's why we teach it that way.

And don't forget, go get some work with some experience and skill set that you have to increase your income. All right. Good stuff. Way to go, Jade. Hey, quick break. Got to pay some bills. Even we have to increase your income. All right, good stuff. Way to go, Jade. Hey, quick break. Got to pay some bills. Even we have to pay the bills. And we'll be right back.

Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is with me. The phone number is 888-825-5225. 888-825-5225. 888-825-5225. Time for our question of the day, sponsored by Neighborly, your hub for home services. Once the kids are back in school, it's hard to find time for home maintenance, but Neighborly is your source for home repair experts like Precision Door Service or Dryer Vent Wizard. Incidentally, that was one of my

nicknames in high school, Dryer Vent Wizard wizard. Little side hustle that I developed to make a little extra gas money. Okay. And it was self-proclaimed. Okay, Ken. Could not be backed up. But nonetheless, download the Neighborly app today to be ready for all seasons. All right. Today's question comes from Brian in Oregon. He says, I'm 22 years old. I'm married with two kids, dang, and I'm going to school for engineering. I work around 30 to 35 hours a week at my family's flooring business, and it pays the bills, but it won't get me the engineering experience that an internship would. On the flip side, an internship wouldn't cover the bills. So my question is, is it worth going into debt so I can take an internship to build experience for engineering down You're going to school for engineering. So stay in school, finish the

engineering. And what is entry level for someone who gets an engineering degree? The answer is, you know, I don't know. Maybe you don't know, but you can find out. But there is entry level engineering jobs. That's where you're going to have to start. So we're not going into debt to go get an internship heck no you want to get job placement through the school that you're getting the engineering degree and at least and then and then apply the proximity principle i wrote an entire book on one little thought it just says this in order to do what brian wants to do insert blank type of engineering got to be around people that are doing it and in

places where it is happening. So while you're in school, raising those babies, working 30, 35 hours, you're also on weekends and nights, having coffee, having lunch, spending time with engineers who are way ahead of you in this world. And they're going to tell you their thoughts on how you get placed and how you get in. And if you do it with a spirit of humility and hunger, there might just be some of those guys and gals that you meet with who will open up a door for you. So no to a loan in order to do an internship. No to credit cards in order to do the internship. You don't need the internship. What you need is our connections. Ken, let me ask you about something. So you just said, you know, get around these folks. Hopefully they will put you on and, you know, give you opportunity.

Yeah. Let's talk a little bit about gatekeeping. Yeah, love it. And this idea of, I see this all the time, especially with social media influencers, people who start their own business and they feel like they've figured something out and they're afraid to share it because they're afraid if they share it, what they'll give up their piece of the pie. And then that's, you know what I'm saying? Like what, what are your thoughts on? Yeah. Well, there's some thoughts on that. Yeah. There are

some people that are going to be very, very scarcity focused. I don't want to help you. You could be competition. I don't want to use some favor by connecting a young Ken Coleman to this person. I don't want to do that. I had people do that. They don't want to use whatever capital is there to say, hey, would you connect with this young guy and have lunch with him or whatever? Do we take it personal? Is it personal?

No, you can't take it personal. No, it's actually about them. They really do have, you know, Michael Easter was just in town this week. They have a scarcity mindset. Everything for them is, I've limited this, limited that, and I'm not going to use my relationship capital to call somebody up and go, will you meet with so-and-so? And so to your point of opening gates, you're going to have some people that aren't willing to do it. They'll either say no or they will ghost you. And that's unfortunate, but you can't take it personally. You just have to go for whatever reason.

It's about them. They don't feel comfortable and that's all you can do. And then you go to people who are comfortable and I've always been that person. Well, I mean, but as okay, as the person person who is in need like in want of exposure or whatever how do you where do you draw the line because there's been times where people have been like hey just just contact so-and-so and I'm like like I can't they're further along than me like I don't want to sound like I'm using my relation you know I don't want to use our relationships try to get something from them like how do you well I Well, I've gotten, I get that.

And I've had to get comfortable with what I think is the most underused question in the world. And that's, will you help me? It doesn't need to be smarmy. It shouldn't be too big of an ask. It should be a basic ask. But I will tell you, I've reached out to people on social to do an interview or, hey, I'd love to touch base to do this. And nothing. And so I go, all right.

Yeah. I'm moving on. But I mean, like an interview interview that's something that has the ability to benefit both parties yeah but still yeah they don't ghost you they don't think you're big enough deal who knows what they're thinking yeah I can't fill in that gap that creates an unhealthy narrative so I just go all right it's not it's not meant to be I interviewed Soledad O'Brien you remember do you know her name Soledad longtime journalist and. Do you remember her name? Soledad, longtime journalist. And I interviewed her for my first book, One Question. And I asked her about, you know, because she had made her way into media. And I asked her, she dropped a bomb on me.

I said, how do you deal with rejection? And she said, I learned how to turn no into not now or not here. And that, to this day, is one of the best pieces of advice I've ever heard anybody give me. That's interesting. So you just got to go because no is very final. Yeah. And no is very personal. Well, let me just say no to me. Right. You said no to me. I think I'm pretty good guy. You know, it's very personal, very final. Let me add one to that because I just read something that said no simply means I need more information. I have a little bit of fear and I need a little bit more information.

What do you think? I think that's fair. Interesting. But I think that's true. But in a situation where you want a job and you get a no, they may need more information, but you're not going to get a chance to give it to them. So I think that probably squares. But the point is, it's not why they said no.

The point now is, what do I do with no? And I think for those of us who hear the no, we've got to now turn that into not yet, not here, and realize every no that I get, even if I'm moving forward, every no is getting me closer to the yes. That's right. That's a word. So I just think that that's, now, by the way, it's easy for me to say that now with some gusto. Right. But I had to eat dust and eat dirt and eat nose and all that just along the way. I mean, I had a guy tell me once, you know, you don't have enough talent to make in the top 10 media market so you

you shouldn't even be trying this and and i believed him yeah i did it for a while you have too you get some rejection stories yeah the rejection is real but i mean it is it's all about how you use it as fuel and you can't let it stop you from asking again or continuing to make those those movements forward so yeah absolutely true 888-825-5225. One thing I want to talk about really quick. This is very important. We talk a lot about budgeting. Yes.

And how if you're going to win with money, there is no – is this too strong of a statement? You cannot win with money if you don't know where your money is. That is not too strong. All right, so budgeting is a big deal and every dollar is our budgeting tool. It is absolutely fantastic. We're very proud of it. It is an amazing tool. We can connect it to your bank account if you want to go that far. And to go along with encouraging you to budget, we've got an awesome thing coming up, Jade, and you're a part of this along with Rachel

Cruz and you're partnering with EveryDollar. What's going on? That's right. So on Monday the 30th, I'm talking about October 30th, we are hosting one webinar, a budgeting webinar. Now what Ken was saying is this is a series. I'm hosting them, George's Camel is hosting them, Rachel Cruz is hosting them. But if you want to do a webinar with me, that's totally free. It's this coming Monday, October 30th. The webinar is during your lunch hour, during your lunch break. It starts here at 1130 Central. It's free, guys. It's free to sign up. I'm giving you an hour of my time, totally free. And if you really want to follow along, go ahead and download an every dollar budget. You can download that for free and you can follow along with us.

We're going to tell you how to use this thing because this is how you win. These are the tools that you need in your toolbox in order to win with money. And every dollar is like a good power drill. It's like a sledgehammer. Where do they go? This is what you need.

Where do they go? They go to everydollar.com slash budgeting to sign up. All right, give me a little, sing us out here with a little, this is how we do it. This is how we do it. Oh, I wish I could do that. I can't, but I know it. Why did you choose Montel Jordan, guys?

Because you said, this is how we do it. Oh. I'm listening. I'm picking up on what you're laying down. Isn't that what the kids say? I don't know what's happening, folks. I'm going to take us a commercial break and learn how to talk cool. This is the Ramsey Show.

Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me, and we are here for you, America. 888-825- 5225. That's 888-825- 5225. And we 888-825-5225. And we've got a great studio audience here with us as we do most days. Great to see all those folks out in the lobby.

And then in the lobby, but on the debt-free stage, is Gabriel and Ariana. How are you two? Good, and you guys? Great. Good. Did I say your name right? Yes. Okay, lovely.

I didn't want to start off on the wrong foot. You did great. Oh, well, thank you. And you guys are from? Chicago. Chicago the windy city yes fantastic and what brings you down here a debt-free scream i'm guessing yes oh yeah all right let's get the numbers how much debt did you pay off 200 and hold on let me get my cheat sheet here no worries worries. We can wait. $285,302. Holy cow. And how long did that take? 71 months. Wow. 71 months. And tell us the range of income during that time. $150,000 when we began to about $170,000 now. But it did fluctuate a lot in between.

Sure. What do you guys do? I'm a firefighter. Oh, thank you for that great service. That's great. And? I work for Chicago Public Schools. Okay, good.

And any overtime in there, I'm guessing? Is that what some of that is? Yeah. Well, prior to becoming a firefighter, I used to be partners in a construction company. So that was part of like the journey and also the income fluctuations that she was mentioning. Okay. Yeah. All right, great.

What kind of debt was this? So we had $35,302 that was in my student loans, credit cards, and our family car. And then the $250 remaining was for our mortgage. Whoa! Hey! Shondo! I was wondering. I was wondering.

That's amazing. Yeah. Wow. You know, Dave says we're looking at weird people. He likes to say that. I don't think you guys look weird, but I get the point. Look, a paid off house in Chicago? That's weird. Come on now. I get it. So what happened almost six years ago for you guys to take this journey?

Yeah. One of our good friends at the church where you sit in was hosting the financial peace class and we decided to take it uh our lives just changed from that point forward wow okay give me a little bit more yeah so so you know what was going on to where you go all right because the way you said that it was kind of like yeah we just waltzed on in there yeah so um our very good friend like like he said um they were giving these classes and they were people that we trusted and classes and they were people that we trusted and then and they were also following the ramsey plan and they were very good with their money and um we didn't really argue about money but at the end of every month we'd be like we make

good money where is it going to yeah um so the class really just helped us to change our lives and to really buckle down and to make our money work for us. Let me ask you kind of a inverse question. Out of what you learned in that class, what did you push back on the most? Like the budgeting was hard for us because we didn't budget. Like she mentioned kind of the end of the month we just kind of be like, you know, what happened with all the money? Completely new concept. That was probably the hardest part. And then when he was working in the construction business,

the income fluctuated so much that it was very hard to budget. I see. But we were here, so we made it. It works. You did it. Yeah. So what was the first debt that you took on I'm just curious. The first debt that we took on was right after the class we did my student loans we had like

$4,000 in credit cards and then we had a $12,000 car loan and that's the first thing we did and then after that um we sold our house and um we made a profit of a little bit over 86 000 so we used that to put um 20 down on on a new property and we bought the ugliest house on the block wow um yeah and um yeah we used the rest we We cash flowed $250,000 in a home renovation. Wow. Wow. So that's not including. So it's no longer the ugliest house on the block. No.

Yeah, that's beautiful. Wow. That's so smart. So what would you say is the key to getting out of debt? Being on the same page and just supporting one another, having a core of people also that are supporting you. Our family was very supportive. Our close friends were very supportive also.

And being content. And just being okay with delayed gratification and knowing that while we did make good money on paper at the end of the day, if we didn't take these steps, then we were not really going to be able to enjoy it at the end of the day. That's right. Well, you don't have a payment in the world.

No. What happens next? We're just saving for our next investment. No, you got to do something. I feel like we're still on the Ramsey plan. We're so deep in right now. I feel like it's so normal. Why not continue until we get, you know, our next investment?

I'm giving you homework. This is baby step 7B is you need to go and do something fun. There is a cruise in our future. We don't know when. There you go. We also added two kids while we were in the process too so yeah so when you say investment what do you mean we want to have an investment property at some point um yeah i'm still working we have uh three kids and it's so funny because a lot of

people say oh you sold your you paid your house sorry um that means that you don't have to work and i don't feel like that's the case i feel like we really were starting over we have a fresh um start yeah and it doesn't end here no we still have goals and we still have aspirations and what is your house worth i'll say about like 700 000 now oh boy and what do you guys have in retirement um we had to kind of slow that down while we were doing it. I know we shouldn't have. Like $100,000. Okay.

And we're both vested in our pensions. Okay. So you guys are just steps from being millionaires. Yeah. And you guys are off and running. Yeah, we're excited. You should be. Yeah.

And another part of our journey was there was one point where we were on one income, and it was because we had been following the baby steps that it was okay. And this had been our goal. When we purchased the house, we said we're going to pay off the house in five years. And because we had been on the baby steps plan and we had money in our emergency funds, it didn't derail us from our plan and we finished exactly when we said we were going to finish. Wow, that's amazing. You two are such an inspiration for so many people that are watching and listening today and we'll see the story in the days ahead. So one of the things we want to do for you is we've got a little bundle

here for you. We're going to give you Dave's latest book, Baby Steps Millionaires, because you guys are really close to that, and so that's yours. And then we're going to give you a copy of the Total Money Makeover to gift to somebody else to pay this whole idea forward. And so that is our gift to you. All right, let's get the kids up real quick. Who do you have with us? Tell us their names and ages. We have Eliana Velez.

She's five months. Yeah, okay. And then we have Daniel and Nathaniel. They're outside. Oh, they're outside. That's fun. They're making their way in. They're making their way in.

Okay. And how old are they? How old are the boys? Daniel is seven. Okay. And Nathaniel is two. Okay. He is two.

Wow. We have an older one that's not with us right now. He's had some important things going on with school, so he wasn't able to make the trip. Okay, good. Well, here they are. You guys changed your family tree. That's amazing. This is Daniel.

Hey, Daniel. He'll be here one day for his death. That's right. Well, he won't have any debt. Hopefully no debt, but his house paid off. That's right. Has he been practicing the scream? Yes.

The boys? Yes. Okay, look at this. Cuties. All right, here we go all right gang we are ready to go we've got gabriel ariana daniel nathaniel and eliana from chicago illinois they paid off 285 000 in 71 months including their house making 150 all the way up to $170,000. All right, gang. Let's hear a Windy City debt-free scream. Make it loud.

Ready? Three, two, one. We're debt-free! I love it. Fantastic. The baby's going, why is everyone screaming? That's my role. You know, Jay, thoughts on that, that lovely family and an unbelievable future.

Look, don't tell me y'all can't do it. They did it in the city of Chi-town. Yeah. Unbelievable story. Wow. This is what it's all about, folks. You can do it. And we are here to help.

Don't move. More Ramsey Show coming up. Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside 888-825-5225. Our scripture of the day comes from 1 Corinthians 13, 6 and 7. Love does not delight in evil, but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres.

Our quote of the day, from none other than the king, or maybe the Kang, depending on where you're from, Elvis Presley. The truth is like the sun. You could shut it out for a time, but it ain't going away. I like that. The king of rock and roll. You know what I mean? You know what I'm saying? Uh-huh.

Uh-huh. Oh, boy. We have lost control. James is about ready to turn our mics off. Let's go to Alex, who joins us in Los Angeles. Alex, how can we help? Hey, Ken. Hey, Jade.

Hope you guys are well. We are. We're having too much fun. What's going on? All right. I need some help. My husband and I have a car loan. It is our last debt other than our mortgage. It's about $39,000 left on the car. It's not our only car, but I also have about 50, a little over $50,000 in some stock that I have with my company from like a stock purchase program.

And I'm wondering if it would be a good move to sell the stock and pay off the car. One, two, three. Yes. Yes. Yes. Even if it's at a loss. Yes. To sell the stock at a loss because the market's down. Is that what you're saying? Yes. Yeah, I mean, yes. You can't control that. It could keep going down. Exactly. And you need to get out of debt. And the fact of the matter is we're cleaning up.

Part of getting out of debt is cleaning up not just debt, but poor financial choices in general. And not to say, I mean, look, you invested your money in stocks. It's not necessarily the first place you want to go to make an investment. So we're kind of clearing the table here and resetting it the right way. And not only is that paying off debt, but it's also making sure that your money is invested in the right way. And so in this case, yeah, I would totally clear out those stocks and I would pay off this car and you'd be debt free as soon as that money, that cash clears. How good is that going to feel, Alex? Allow yourself to go there right now. Let's just

assume we've just paid it off. You're on the phone with the creditors right now. We said, okay, Alex, the car is paid off in some weird voice like that. How would that feel? Oh my gosh. I just took like a big breath out. Oh, okay. See, we just, we just role played right into that this is the no-brainer of the century love it okay hey listen you gotta look at this stock it's free money how often do we get free money yeah i guess i'm just worried because that's kind of you know we treat it as we don't look at it ever and it's just kind of a quote-unquote emergency fund i know it's not in the right place but that's kind of our backup in case something happens.

You know what this is? This is the get out of debt and change your life forever fund. Yeah, it is. Okay. I'm just curious, at the high point, or you said it's at a loss, what did you start with? It was probably closer to 65. That's what you put in to start? It's been growing over the last couple of years.

So, you know, when I was buying, it was at a higher, you know, it was lower. And then I think it went up to like 50,000. My question is, what was your initial investment? Like, where did you start? Like, what have you put into it? Oh. Not, not, not. Do you see what I'm saying? Like, you can look at and say at one point it was 65 000 and now it's only 50 but depending on what you put in it you may have still do you

see what i'm saying over the life of it you still may come out may have come out on top if you know what you what your basis is in it but anyway oh i need to look at it but it sounds like i'm just going to sell it and yes stop we don't want to think about it. We just want to do it. There will be some left in it after I still have some money in there. Should I sell it all and reinvest with a leftover into something else? Just make sure you set aside some for taxes because there's probably going to be some taxes on that because it's adding to your income.

So keep some aside. And then whatever's there, I'd probably throw it in the emergency funder. You can throw it at your next baby step. Yeah. Okay, I needed you guys to tell me this, so thank you so much. Yes, you're going to be free, girl. That's fun. And boy, that car's going to feel better.

It's going to run better. It's going to look better when it's paid off. So that's exciting stuff. Yeah. Very exciting. Don't overthink it. Yeah, just get it out of there. Take care of this today. Like today, you're in LA. You still got time to make this happen. All right, let's go stuff. Yeah. Very exciting. Don't overthink it. Yeah. Just get it out of there. Take care of this today.

Like today. You're in L.A. You still got time to make this happen. Uh-huh. All right. Let's go to Clarice in Tampa. Clarice, how can we help? I knew you were going to do that.

Sorry, I had to. You just freaked me out. Clarice, I'm sorry for my colleague and her scary greeting. That's okay. I'm used to it. I know you are. I know you are, Clarice. How can we help? My question is, I have some money

saved up and I recently learned about tax liens and deeds. So I want to know if I should use that money to get into debt or if I should pay off my debt. I'm sorry. I misheard you you said you just learned about what tax liens and deeds okay tax liens and deeds yeah okay to get into like real estate okay so should I use my like the money to get the properties or should I pay off my debt we're gonna pay off your debt we're gonna pay off your debt uh We're going to pay off your debt. Because I'm guessing you want to get these properties to cash flow to this whole thing.

Yeah. That's big right now. It's big on social media. Everybody's like this is the way that you can get into real estate. I just really want to get out of my career. Honestly. Well I can help you with that without getting yourself into more trouble you need to pay off debt and we can get you on the right path yeah what are you doing

and what do you want to do um i'm a nurse and um my husband and i were wanting to start a family in like two years he uh when he comes home and so uh i want just more free time to be home with my children instead of having to go clock in at the hospital. Sure. How much money do you make right now as a nurse? I make $130. Okay. I bring home.

That's really good. And so your big reason for getting out is more free time? Is that what I heard? Yes. Yes. How much debt do you have? Besides our house, I have $14,000 on my car and $35,000 for student loans. What about your husband?

My husband has no debt. He's military and his car's paid off. And what's his income? He makes about $60,000. Is he deployed right now? He is. Okay, because you said two years. Is he deployed for the next two years?

No, no, he comes home next year, but that's the time when they were planning on starting a family. Right, and so right now, I understand you want free time, but you need to pay off debt. You can't just go from your income to his income. He's not going to be thrilled with that right away, is he? No, not at all. Well, here's the thing, though. So why don't we just do some nursing that's maybe a little bit different rhythm

and a different place? You've got some options. I do, and I'm trying to do that while he's gone, while I have the time, but I just really want to get out of it. So I was like, if I can get a property and use the money that I have in my account. You're creating more problems to solve a problem

that's actually pretty easy to solve. Number one is you guys make $190,000 a year. That and you got 50 000 49 000 of debt right you can knock that out so fast you don't have kids yet you guys like if you went on a bare bones budget you would be out of debt in less than a year less than a year if you guys decided hey instead of living on 190 this year we're living on 140 140 that's still double the average income more than double the average income so it just takes you guys quickly going you know what let's knock this thing out let's be out of debt in eight months in nine months and then when you're out of debt you suddenly have freedom you go okay now what's the next conversation if we have kids and we decide that I want to be a stay-at-home mom, we have to decide, okay, are we willing to live a lifestyle on 60time to where maybe you're not bringing in 130 anymore, but could you bring in another 60? Could you bring in another $50,000?

And so I think that there's a lot of conversations and a lot of ways to make this work for you, Clarice. But I'm telling you, what is not an option, and please cross it off your list, use a black Sharpie to where you can't even see through it. We're not going to buy real estate and go deeper into debt, hoping that there's an opportunity to cash flow or rent. And we're certainly not going to do it on multiple properties. Trust and believe that's a terrible idea. Great advice, Jade. Thank you for the call, Clarice. And to the rest of you, thank you for joining us here on The Ramsey Show. Thanks to our fearless leader, James Childs. Hey, we'll be back before you know it this is the Ramsey show