The Ramsey Show - App - You Put a $12 Cocktail on Afterpay?! (Hour 3)

Episode Date: March 2, 2023

Jade Warshaw & George Kamel answer your questions and discuss: "How can I help an incarcerated family member and his family?" "Is renting a bad idea? When you should start investing, Navigating disability benefits, "Should I make payments on my student loans?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where we help people build wealth, do work they love, and create actual amazing relationships. I'm your host today, Jade Warshaw. I'm joined by my favorite guy right here next to me on this show, George Campbell. I can't wait to tell Ken and John about that. It's shots fired. I went for it.

It's going to hurt their feelings. They're so sensitive. You know, George, I say the same thing about them too. So there you go. I figured. The number is 888-825-5225. Give us a call. We'll chop it up with you. We got Brett on the line from Washington, D.C. What's going on, Brett? Hi there. Thanks for taking my call. My question today is,

how do I draw boundaries when supporting a family member who's been charged with a crime and likely facing incarceration? Sorry to hear that, Brett. How close is the family member? Immediate family member. Wow.

Who has a family and kids. How many kids? Two. Are they pretty young? Mm-hmm. And how likely is the incarceration? I think it's going to be likely. Okay.

And do you know the length of time that it would be? Is it six months or 20 years? It's in between there. It's in the years. Okay. I think probably five or longer. Okay. I think probably five or longer. Okay. So we're talking about helping this family out for five to ten years potentially.

Yeah, I think so. It's a little daunting at this point, right, thinking about that. Yeah. How are you doing financially? I'm lucky. We're doing well, and even in immediate terms, right? Like the most immediate things like retaining counsel and any bail situations, like those things I've been able to cover and cash flow. Okay. Have you talked to this family yet about what their needs are? Yes, we've been actively supporting them, both kind of emotionally as well as even, you know, having them over and staying with us, right?

But we haven't gone too far. I think we're taking things one day at a time. Are they living with you right now? They will be. They will be. Is that long-term or is that a temporary fix? Have you guys talked about that? Temporary fix. There have been some discussions where I think the good thing is there is family on both sides who can be supportive. I think the details are not quite there in right, in terms of who all is going to chip in, how much, things like that. It's just, I just imagine there's going to be a component of support. It's going to be a village. Yeah. Here's the two things that come to my mind,

if I'm being honest. I'm trying to put myself in your shoes as best as possible. And the two things that are coming to mind are how you're feeling or how I might feel when something kind of gets dropped in your lap. And it's not because of anything you did. It's not anything that, you know, it just sat in your lap and it's like, all right, I got to react to this. And you've done a great job handling bail, stepping in and cash flowing this. And my first thought is make sure you take care of yourself mentally because you don't want to start feeling any bitterness or spite or like, oh, like, I can't believe I have to do this, this guy, you know, I don't know the nature of what took place. It doesn't matter. But all I know is you're on the hook for it and you feel on the hook for it. So there's a piece, there's a component there that

I'm thinking about. And then on the financial side, you said you guys are doing well financially. You don't have any debt, correct? That's right. Just a mortgage. Just a mortgage. And it sounds like within your day, within your day-to-day cash flow, within your budget, you've got money that you can put towards this, but it doesn't mean that you have to. And so I kind of want to give you permission to say no sometimes. Now, if you want to be generous and you want to participate, I think that's great. But I also want to say very loud and clear, you're not required to do anything here, except, you know, you can provide counsel, but you're not required to do anything monetarily. And I think starting there

is a great way to start, and then you can decide what you would like to do does that make sense that does that does so how much are you thinking about let's say if there was a monthly contribution limit i almost look at this like a mission organization that i want to support and me and my wife have a conversation about what we're both okay with contributing uh maybe and we do it in year chunks and say we're going to commit to one year, we're going to give you $200 a month every month for this year. Have you had that kind of conversation with your spouse? Not yet. Not yet. I think having all of that real clear up front helps because a lot of people, what creates the toxicity in these relationships and the resentment is when the expectations weren't set, they weren't communicated. And now we're going, well, no, I thought this

money was forever. And I thought it was just however much we need whenever we want versus saying, hey, we're happy to give. Here's how much we're able to give right now. That could change in the future. It could go up, it could go down based on where we're at financially and what we can do. And I think if everyone in the conversation in this village has that conversation with each other and as a group, you're going to have a lot clearer boundaries as to what this looks like going forward. Absolutely.

And there's another component about that too, George, that you made me think about. I know a lot of times with churches, when they do benevolence or do things to help out in the community, they don't just give monetary amounts to folks. You know, folks come to the doors and it's like, hey, you know, single mom, I'm suffering with this or I'm having a hard time paying the mortgage. They don't just give them, you know, seven, eight hundred dollars. They go and pay the mortgage. They go right in and pay

the light bill. So I kind of want to advise you in that way, not to just hand out money and not to hand out cash, but actually go in and do those items. Like if it's for rent, you pay the rent. If it's for lights, you pay the actual light bill. That way, it's just another way to make sure that you're feeling good and that you have some bit of control over how this money that you're generously giving, it's okay for you to have control over how it's spent. And sometimes the best thing we can do is not just to give a pile of money every month, but to actually empower the person to change their life and take control of it. And so the spouse that's now taking care of these kids on their own, are they able to work?

And are you able to support them in that way to get them on their feet to where they can provide for themselves? Yeah. I think I can provide some coaching. It is a tough situation. This spouse has been a stay-at-home mom and it's been a long time since she's been in the workforce. Well, here's what I want to do. I want to gift you with Financial Peace University, and I want you to gift that to the wife so that she can figure out, you know, what her footing is moving forward. She's going to learn all the principles of money. She's going to learn how to pay off debt.

She's going to learn how to save. She's going to learn how to do all of those necessary things that are going to be really important for her going forward. So hang on the line and Austin will get that for you guys. I'm going to add in one more thing. Dr. John Deloney's book, Own Your Past, Change Your Future. There's a lot of trauma in this situation and a lot of things we've got to learn how to move forward. That's right.

Great, great call. Thank you so much for that call. Hopefully we were able to help you out. This is The Ramsey Show. You're listening to The Ramsey Show. My name is Jade. This is George sitting next to me and we're taking calls about your life, your money, your financial situation. What's bothering you in the world as it relates to finance? What is a problem for you in the world as it relates to finance? What is a problem for you in the world as it relates to finance? Your life, your money. Give us a call. 888-825-5225. Now, here you go. For those of you

out here listening that don't know my personal story, let me tell you a little something. My husband and I paid off $460,000 of debt. Now, I don't know where y'all come from, but where I come from, that's suspiciously close to half a million dollars, George. All right. When we did this, we paid it off, guys, working the baby steps. We talk about this every day on the show. The same baby steps that we teach in Financial Peace University. Now, Financial Peace University, it's a nine-week class that shows you how to beat debt and here's the thing and build wealth what we're talking about on this show the baby steps it's not just about debt-free debt-free debt-free debt-free we're trying to build wealth up in here george it's so that so that you live like no one

else so later you can live and give like no one else and And let me tell you guys, I believe in this class, Financial Peace University, so much that I help lead classes. I'm leading an FPU class right now. As a matter of fact, we started last night. It's going amazing. And I'm leading classes because this changes lives. It changes lives. It's doing it all over the world. And I'm telling you, there's nothing special about me though. All right. I'm just like you, just like all y'all listening out here. So leading an FPU class isn't just for those people. It's not just for Jade or George or Dave. It's for you too.

You can actually start helping folks. Now, it might seem scary to lead a class, but you need to do it anyway. And I'm telling you right now, it's not scary. They tell you exactly what to do, exactly what to say because there are people out there now, you feel scared. They feel scared and they need you. They're scared to open their bills every month. They're scared to check their bank account and they need you because you guys know how to do this and you can. I'm telling you to be a coordinator.

It's so easy. You just follow the plan. They tell you exactly what to say. So you guys can do this. You don't have to be debt free and a millionaire to lead a class. You just have to be passionate and believe in what we teach. And that's most of you listening out there. That is such a good point, George. I think a lot of people think, well, if I'm in baby step two, who am I to teach this stuff? You're even better, even better, because that means you're right there with them. You're walking along with them. And not only is it going to be encouraging to them, it's also going to be encouraging to you as well on your journey. So right now, I want you to go online. I want you to type in ramseysolutions.com slash lead to learn more about becoming an FPU. That's Financial Peace University Coordinator. Go to ramseysolutions.com slash lead. Super important stuff, George.

Love it. All right. Let's take a call. We got Nathan in Sarasota, Florida. What's going on, Nate Dog? Hey, how are you guys doing? I'm doing good. Sorry about the Nate Dog. Are you okay with Nate Dog? I guess.

He is now. Sometimes I can't resist. Sorry about that, Nathan. What you got going on? So I'm 20, and I've been living on my own since I was 18 and things are getting pretty serious, me and my girlfriend. And I'm just curious on potentially we want to get married in the next three years. And I'm just wondering if it's a

bad idea to rent if we're not ready to buy a house or should we wait? Where did you get the idea that it was a bad idea to rent? I mean, my parents. Ah, there it is. I figured that much. And they're saying, hey, Nathan, why would you throw money away on rent when you can get into a house and start building equity? Is that basically what they're saying? Pretty on there.

Okay. Well, I'll tell you this much. We never recommend someone buy a house before they're ready, and we also recommend that newlyweds rent for a while before they buy a house because you got enough going on with the stress of a wedding. I mean, it's like being in a car crash. It can be traumatic. Just so much stress compacted for this one big party we're throwing everyone. And then you're also going, oh, that's your side of the, that's my side of the, no, we got issues

here. And so you're already trying to navigate newlywed life on top of home ownership. That's just a lot at once, emotionally, mentally, financially. And so there is nothing wrong with renting. And I want to be here to dispel the myth that renting is a sin and tell you that renting is a great thing to do. And it gives you such flexibility. And when something goes wrong, you call someone to come fix it while you guys sit there and eat ice cream and be cute newlyweds. I know that's right. I like that, George. So that's the plan. Are you guys have any debt currently? She doesn't. She actually got scholarships all through. She is about to graduate state college here in the next two months.

This is a green flag for this relationship, Nathan. I'm liking this already. You don't have any debt, right? No, ma'am, I don't. I didn't go to school. I don't like owing people money i hate it as it is that's always how i've been myself so i never told my mom i never want to go to college so i got into a trade and i've been plumbing for two years now

and it's been actually great so so let's just walk this through let's say you guys you get married we're going to cash flow the wedding. We're going to save up for the engagement ring. So you already have some financial goals ahead of you. Yes, sir. And so if we can start our marriage off completely debt-free with a cash flowed wedding and have a fully funded emergency fund, that is a win in my book as far as starting a marriage off on the right foot.

And just to be clear, you're doing these things separate of one another on your own. So you're saving up your nest egg for the wedding. She's saving up her nest egg for the wedding and you're saving up money, your nest egg for three to six months of savings. She's saving up her nest egg. And then when you get together,

you can go ahead and combine those finances. Does that sound good to you, Nathan? Yes. Awesome. Awesome. You know, it's really funny, George. I read a stat that said only 43% of couples combine their finances. Yikes.

Married couples. So we're talking about 57% of people go, uh-uh, that's my money. Well, it's crazy. Yeah. That's such a crazy thought to me. It's nuts. That you'll share spit in a bed and dna but you can't share a bank account it's different what is wrong with you people well it's even

crazier because here's the thing these are real studies that show uh married couples that combine their money they build wealth four times faster because they're more likely to purchase a home together they're more likely to stay together over the long haul of their marriage. And it literally said this, they are happier. I believe that. They're happier. Well, think about it. You got a closed fist you're living your life with where you're going, this is my money and that's your money and you spend what you want to spend. I'll spend what I want to spend. You don't get to tell me how I spend my money. And you have those kind of control issues. You're not going to get very far. But when you live life with an open hand going, this is our money and our life. What could we do together?

You will go so much further together. So much further. It's just unbelievable to me. I don't get it. Maybe we have time to take a quick call. Let's make this one fast. We got Daniel. Get to it fast.

We're up against the clock. Hello. get to it fast we're up against the clock hello um i was calling in because i'm curious if i should invest in a roth ira because i'm 16 and i just started a job at subway working on the weekend i was wondering if it's too early to invest in a roth or if i should start like doing like the nest egg baby steps because like my my parents are really good. I have a place to live. They like help me with like food and like go with like food and, uh, so you have no debt, nothing like that. I don't have any debt. I don't have any like need to spend money. Really. It's only like stuff that I want that I have a car. Uh, no, I actually live close enough to my work to bike there. Cool. I haven't gotten a car yet.

Okay. Well, I love the idea of investing. I just want to make sure that our upcoming financial goals, for example, higher education, do you plan on going to school? College? I'm planning on doing, I'm actually planning on doing certifications for IT because I want to work in IT. And from what I've read, college isn't really the best way to get into IT.

It's certifications. Way to go in IT. And from what I've read, college isn't really the best way to get into IT. It's certifications. Way to go, man. Well, I'd make sure we can cash flow a car purchase because you're going to need that sooner rather than later. Make sure we can cash flow the certification. So I might just be saving all this money in a high yield savings account right now because the next few years, there's a lot of financial goals that we might have to hit. But if you can do that and have an emergency fund and you get out on your own, you're going to be investing in no time. I mean, the fact that we've been talking about this, you're going to be a multimillionaire probably in your 40s at this point. And so I love the idea of investing, but I might pause until I have a full-time job. I love that. There's a right way and there's a best way to do this. I like to say it like that. There's a best way to do this and

make sure your education's there and make sure your investments are there. We want to do it in the right order. So I just like that he's thinking about it. I was a knucklehead at 16. I still am. This kid's sharp. I love it. We love to see it. We love when the young folks call in the show. This is The Ramsey Show. you're listening to the ramsey show my name is jade warshaw this is george camel and uh george you showed me something really crazy i found the break now there's a lot of tweets that make me angry and there's a lot of tweets that make me laugh this one somehow did both and so i wanted to share it with you jade and all of our listeners out there and get your take on it oh so uh boys throw up that tweet so this is a tweet from someone that

says finally paid off my vodka crayon from last month god is good with a little praise emoji and it's a receipt from afterpay they They put a $12 cocktail on payments. Four easy payments on a $12 cocktail. No, no, no. And not God is good. Don't throw God. He had nothing to do with it. This is your stupidity.

Oh, Lord. Don't blame him. Don't thank him. This is crazy. And it's Afterpay? I could tell it's Afterpay based on the logo. I know these scumburgers. I'm shook.

So this is, if you all don't know, this is the new thing that Gen Z's into, which is buy now, pay later. So they're anti-credit cards, but they're pro-payments because they're going, well, there's no interest, so how bad can it be? It's bad. Payments on a drink?

Because think about it. That's one interaction. That's one time going out you keep adding that to your tab with your payments and all of a sudden you go okay well i only spent 25 percent of what i would have spent which leaves room in my budget so that i can pay after pay the next month and the next month and the next month let me this is insane if you i'm just gonna say if you have to put a 12 drink on payments you are a hot flame of a flame of a mess you're just a hot flaming funky mess it's it's gotten real bad out there jade and

these companies you've heard of them after pay here's their tagline get what you want we've got your back okay that's that's a great way to create an entire generation that's broke. Here's a firm's. Pay at your own pace. That's what, hey, hey, pay at your own pace. No rush. We're happy to wait. We'll take another payment next month. And then Klarna is my favorite.

Get financial breathing room. Because nothing says breathing room like being chained to payments. What? Oh my goodness. And here's what gets me. Klarna also brags to the retailers that use this program that the consumer will spend up to 45% more if you have Klarna as an option. They know what they're doing. Well, duh. That's why they make billions of dollars and you remain broke.

But instead you go, no, Jade, it's smart. I'm leaving room in my budget, Jade. What do you mean? I can't even breathe right now, George i i can't even breathe right now george i can't even breathe you need to use clarna because they'll give you some breathing room apparently okay and they'll give me a drink while i'm at it vodka cran look i read a stat that said 57 of people who use buy now pay later regretted their purchase buy now regret later that's the new name how about just buy now pay now that feels like the way God and grandma would do it. Hot diggity dog. We're going to bring God into this.

Yeah. It's insane to me. What if you just popped out a $10 bill in a single, two singles, and just pay for that $12 drink? I mean, blowing my mind. Oh, God. Just make your drinks at home, people. You know? Do it like we do on Smart Money Happy Hour.

Okay, we're on a budget out here. We're not going to these crazy cocktail bars. And by the way, it's all watered down. It tastes gross. Yeah, exactly. I'm just done going out. I'm like an old curmudgeon of a man, Jade. Look, you're telling me...

Nashville cocktails are now $20, and they have a liquor tax of an extra 15% on top of the 10% in Nashville, and I'm like, I'm just done. I'm going to the crib. I'm going to the crib. I'm going to the crib. I'm gonna pour my Eagle Rare in my glass with my square cube. Because I'm not going to one of these restaurants.

Trust and believe, I'm not going to Applebee's, getting an old fashioned where there's like 0.00% of drink in the drink. You know what I'm saying? I'll stick to my water. That's what I eat. When I go out, I get water because I'm too cheap and i have money i just i'm like this ain't worth it it's not worth paying the premiums it never well i'm not paying in four payments

exactly goodness george i okay all right now that we're riled up i'm glad we got this out of our system so we have to talk about something jade we get calls on occasion on the show uh from folks that have disabilities. Yes. They're blind. They're deaf. A lot of these people have had these a long time since they were young. Yeah. And because of that, they're on disability income. Yes.

SSDI. And the problem with that is that the government limits you to how much money you have to your name. And the limit is very, very low. $2,000 total at any given moment is the limit to remain eligible for your benefits. That's poverty. I mean, that's unbelievable, George. Yeah, it's really sad. All right. So what are the options here? Because we get people calling in and it's like, hey, I want to work the baby steps.

I want to do things to get my income up. But if I get my income up too high, then I don't get this benefit. But they're also afraid to lose the benefit because then they're responsible for their life, their insurance, all of those things. So it is a very precarious situation. Yeah. So here's one option. Either you've got to learn on how to live your life with that low disability income due to how extreme the disability is or a better option if you're able to based on the nature of your disability if you can do some type of work yes you will be way better off financially because you're not stuck under these

insanely rigid rules for your your income and your assets absolutely i mean i want to make it very clear if you are on this, we're not mad at you. We're not saying, hey, if you're taking this money, you're wrong or there's something wrong with you. No, not at all. We're just letting you see that this is the choice that you have to make. And I'll be honest, when I look at $2,000, I'm like, how? And with everything going on that is that's more scary to me than going out because i feel like with the internet there's a lot of ways that some some of these folks might be able to get get above that and they'd be surprised what they can

do because you've got something to offer absolutely you've got there's something that you're good at there's some service that you have to offer. And you can make, there's so many ways you can make money today, George. Yes. And so there is an option for those with disabilities to where they can have more than $2,000. And it's not illegal. It's called an ABLE account. And it's basically a savings account where you can have up to $100,000 without affecting your disability income. And what's cool is that family members can gift money into this. So it is a good option for those.

And some people don't know about it. And we've got some emails coming in from people that go, hey, I just heard this call from this person with disability. You got to let them know about the ABLE account. So this is a tax advantage savings account for those with disabilities and their families. There are some restrictions as to who's eligible for this. So you have to have been diagnosed with your disability before the age of 26. Yep. So if that's you, you most likely are eligible for this. And what makes me sad,

this is straight from one of the ABLE sites. It says to remain eligible for these public benefits, an individual must remain poor. That is the most frustrating sentence I've heard in a long, long time. Well, I think it's just frustrating. It's like you're helping, but you're also hurting. Because the real help would be like, can it be enough to live on? Because that's barely enough. Now, I'm thankful for this ABLE deal because you can add money to that. But again, the choice is yours.

We're all about helping you build wealth and be generous and have control over your finances. And it's really hard to prosper when you have limited income and limited ability to save. And the government is ensuring that you are their slave at this point with this program. I kind of feel like they're selling these folks short. Because they're scared to let go of it, Jade.

Well, they're getting into some of these folks' head and making them think, I need this and I can't go beyond this. And now for some people listening, that may be the best choice for you, sticking on the 2000, getting connected with ABLE. But for some of these people listening, I think that we just need to infuse hope and let you know, hey, you've got something to offer. There are opportunities out there for you. And I think that you can make more than $2,000. Absolutely. And it wouldn't take much to hit that threshold. And here's the thing with the ABLE accounts that I want you all to know about. People with disabilities and family members can deposit up to $17,000 in an ABLE account for 2023. So that is the limit for this year. You might be able to contribute more money if you have a job

and you're able to work. You can do an additional $13,590 if you're in the U.S. continentally. So there are options out there. I want to make sure those that are out there with disabilities and if you've got a loved one in your life, please send them this information. We want to help everyone. This is a show and the content is for everyone in all walks of life. And yes, it's harder if you've got a disability. I don't want to minimize that. But I also want to encourage you guys that you have so much to offer and that this doesn't have to hold you back. This could be a part of your story that inspires others along the journey and you can still build wealth, but you've got to make this happen on your terms, not the government. If you're doing that, call in and

tell us about it. We'd love to hear. I want you to call in terms, not the government's. If you're doing that, call in and tell us about it. We'd love to hear from you. I want you to call in and I want you to tell us what you're doing. It's going to encourage somebody else to do the same thing. This is The Ramsey Show. You're listening to The Ramsey Show. My name is Jade Warshaw. Next to me to my right, my right-hand man, George Camel.

And we've got a scripture and quote of the day for you. It's this. It says, be kind to one another, be compassionate, forgiving each other, just as God and Christ has also forgiven you. That's Ephesians 4.32. And Kenny Loggins said this, the more we stretch the muscle called compassion and generosity, the stronger we get. The better we feel about ourselves, the more loving we become to the world around us. Oh, beautiful words from one of my favorite artists, Kenny Loggins. I mean,

the hits go on, Jade Footloose, Danger Zone, This Is It. Can't wait for his upcoming concert. But which of us is going to that concert, George? That's right. That's right. I'm coming to that concert. He's 75 years old. The man's still out there doing the thing. He can sing higher and better than ever. I'm just letting you know. That means Dave's got no excuse.

He better be behind this chair at 75. Still crushing the game. He will be. Don't you worry about that. Give us a call. The number is 888-825-5225. We'll take your call. We got Harry in Salt Lake City. What's going on, Harry? Not a whole lot, Jay and25. We'll take your call. We got Harry in Salt Lake City.

What's going on, Harry? Not a whole lot, Jay and George. Thanks for taking my call. Of course. So my question today, my wife and I were, we paid off about $15,000 in debt. And we just have two debts left. We have a personal loan and student loans.

The personal loan is about $7,000 left and student loans is $29,000. With the pause on the student loan payments, should we make any payments to that at all or should we just continue to stay focused on that personal loan? Yeah, I think that's a temptation that a lot of people are feeling right now to kind of, you know, loop it out of order. Now, I do have one question. The student loan, is it just one student loan for $29,000 or is it broken up into pieces? It's all consolidated in $29,000. Yeah. Well, you know what? I'm going to tell you to go ahead and just work the debt snowball in order. I think that's the best way to do it because you're going to feel those wins and

you need that to keep going. How fast can you knock out this next $7,000? My wife and I have panned it out. We make about $100,000 as a household and in the next four months we'll have it paid off. Awesome. But you're saying, hey, the student loans are paused completely. Should I even make minimum payments on those? Because we say debt snowball, make minimum payments on all your debts except the first one.'re saying should i pay a dime towards these while i attack it that's a good call out george yeah make minimum payments make minimum payments that's the way the snowball works the snowball works is you make minimum payments on all the debt and put any extra money on the smallest debt and that way when it's unpaused you've already been flexing that muscle making that payment

plus the extras going towards the debt and And so when that gets unpaused, and it eventually will, as much as they keep kicking it down the road, you're going to be in control. And so I'm pumped for you that you're like, I want to attack all of this debt. I just want to know the best way to do it instead of waiting on someone else to fix it all.

Heck yeah, that's exciting. I can't wait for you guys. When's the debt-free day? Debt-free day? We're still trying to figure that out. We're hoping maybe in the next 12 to 18 months. Well, that is super. Yeah, making $100,000, paying off, what, $36,000? Heck yeah!

That's feasible. That is exciting. Exciting stuff. Thanks for the call, Harry. Let's see what Jay's talking about in New York City. What's going on, Jay? Hey, thanks for taking my call. No problem. I'm actually a police officer in New York. I have four years on the job,

and I have 16 years left until I am eligible to retire. I'm 35 years old. Currently, I have about $40,000 in traditional retirement offered through my employer. And they just now gave us the opportunity to switch over to a, uh, a Roth option. And I was wondering if I should make that move or not.

Great question. So you're 35. You said you've got 15 years until you can retire 16, uh, one, six, six, 16 years until I'm eligible to retire. And at that point, I'll be able to leave making 50% of my salary, which should keep me at around $100,000 a year. Okay. That's awesome. Yeah. I wouldn't touch the current investments, but if you want to start contributing to the Roth side for future investing, I think that's a great move at your age. Okay. So, yeah, because currently I'm already contributing 20% to the traditional.

You think I should just go all in and stop doing it and go straight to 20% to the Roth? I would go 15% until you have a paid-for house. Do you have a paid for house. Do you have a paid for house? Nope. I am completely debt free. I moved back at home with my parents because I'm single and I figured, you know what, they're going to be moving to Florida in a few years. So I'm going to hang out until they move along and maybe purchase their house. That's a cool goal. So if you go down to 15 percent, I would use that five% you now have back in your life to begin saving towards that future house purchase, whether it's in the next five years, the next 15 years. And the idea here with the Roth is that you're using your after-tax dollars, but then the money's going to grow tax-free. And so either way, if you crunch the numbers,

it would be the same. So what we're actually talking about here is what your tax bracket will be when you're older. And we're basically saying we think taxes will go up over the course of history. And so therefore, having tax-free money is going to be better. And so it's a hot debate among the finance nerds out there. But I personally would rather have that tax-free money with no required minimum distributions because Uncle Sam's already got his cut. And so I like that plan. And if I have $2 million in a Roth 401k, I have $2 million to my name that I can do what I want with without paying taxes. And that's just a good feeling. I like that. Does that answer your question, Jay? Absolutely. That's huge.

Yeah, way to go. And thank you for your service. I mean, being a police officer in New York, that's serious business. Oh, yeah, I know. That's right. I'm thinking about go. And thank you for your service. I mean, being a police officer in New York, that's serious business. Oh yeah. I know. That's right. I'm thinking about the fact that he's moving into his parents' house and thinking about buying his parents' house. I was like, that's a different move. You got to have some type of great relationship with your family to do that. Yeah. I don't know if I could do that. I love my parents. I love my parents, but it can't happen. Let me just put it like that. It cannot happen.

Oh my goodness gracious. So we've got every once in a while, we get questions on social media. And I've got here one, I've got one here from a dude in Georgia. His name is Evan. And he says, my wife and I have $23,250 in debt and two credit cards and a vehicle.

I work two jobs and she works one we have a newborn and are currently renting we have 12k in savings and i have paused my retirement of 10 the question is should we use any of our savings toward the debt oh this feels like one of those riddles that you you know in math class like a train is moving from georgia at 48 miles an hour okay so the crux of the question is i've got 12 000 in debt i'm trying to work the ramsey plan yeah he's paused retirement which is an awesome step great because you just have a hard time with that yeah and you're going do i let go of the savings which is such an emotional decision for most people they cannot fathom the idea of going down to a thousand

dollars, which is what we recommend. I mean, yeah, I get it. It's like a safety net. It's a blankie, if you will. I like that. It's a blankie. My son has this blanket. It's old and torn up and he's had it since the day he's born. If I went up to him and I took that blankie. Oh, you're going to catch an eye jammy. Oh, catch some hands. Yeah, you're going to catch an eye jammy. Oh, yeah. Catch some hands. Yeah, you're going to catch some hands. Oh my goodness. So yes, I would use $11,000 of your $12,000 in savings to go towards your $23,000 in debt. And maybe that vehicle gets sold if you want to speed up this process and get that savings account back up faster. And so depending on what the car is worth, if you owe 10 on the car and you can

sell it for 12 or 15 or whatever it is, and you get yourself a beater car for a little while until you get back up to baby step three, then I think that could be a good move for you. I like it. The theme that we keep coming across as we take these calls, especially the calls that are kind of related to the baby steps and doing the baby steps in order, discomfort is required. It's required. You can't get around it. And I think what gets people kind of going off track and it's like, oh, I don't know if I want to touch the savings to pay off the debt. I don't know if I want to stop my retirement contribution to pay off the debt. It's that comfort valve. People think, oh, I don't want to get discomfort. I don't want to get out, you know,

and you have to, you have to embrace discomfort to do this process. And we're just, we're humans. And so we were creatures of habit. And so anything that's changed is difficult. So the day you go, all right, am I going to submit myself to someone else's plan? Or am I going to be a financial genius who's broke? Those are your options. And it's hard to go like, I don't know if that plan, my situation is different. I'm unique. The day you realize you're not that special is the day you can start winning with money. Okay.

Everybody thinks they're the exception to the plan. Oh, but George, because the way my income is set up. Oh, but George, we have a regular income. Oh, but George, we have six kids and a van. Get that butt out of here. No butts around here. Okay. Okay. You ain't special. You ain't special. And that's a good thing. It means you can change your life just like everyone else. That's right. And that does it for this hour. Be sure to join us next time. And remember this, when it comes to changing your life and money,

you can tell me you won't do it, but please don't tell me you can't. With God, all things are possible. Hey, what's up guys? It's Jade. Look, if you like what you heard in do it, but please don't tell me you can't. With God, all things are possible. Hey, what's up guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramsesolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramsesolutions.com and click Get Started.