The Ramsey Show - App - Your Future Self Deserves Better Choices Today

Episode Date: January 27, 2025

Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and bestselling author, Jade Warshaw. And we are answering your questions. So give us a call at 888-825-5225. We'll talk career, relationships, money, anything and everything. So give us a call. We're going to start off this hour with Chris in Dayton, Ohio. Hey, Chris, welcome to the show. Hi, thank you for having me. Absolutely. How can we help? So my wife and I recently had our first child. She is a daughter, which is awesome. Thank you. And my parents live in

Columbus, Ohio, which is about an hour and a half away. And naturally they would like to see us and their grandchild more. We are looking to upsize our home and we were looking in the Dayton area originally because cost of living, we can afford it. They then offered to give us an additional, the difference between the prices of the home in Dayton to Columbus that would go towards our down payment, making it affordable if we moved to Columbus. That sounded good. It would be a gift, not like a loan.

But then they mentioned that they would have to make it even and change the will slightly so that money was even with my siblings. So if I got an extra $100,000, my brother would get $100,000 on the will slightly so that money was even with my siblings so i got an extra a hundred thousand my brother would get a hundred thousand on the will etc yeah so then i started booking it as like an interest-free loan against myself in the future you're saying because you're saying because if you had received it as inheritance you would have done what with it well it's not that i would have received it as inheritance i would have done anything with it? Well, it's not that I would have received the inheritance. I would have done anything with it. It's just that it looks like I'm borrowing from

my inheritance, which is weird because my wife and I worked really hard not to be in debt at all. Well, I wouldn't think of it as borrowing. You're just getting a piece of it earlier. Yeah. For something that you want to spend it on. It's not a loan. Okay. So you think that's fine then? Um, I do. It feels like a gift. Very much so. And as long as, are your parents in a good financial situation to give you this cash and it

not hurt them? Yeah. Yeah. Listen, I hope that one day, I mean, one day I will be there when my kids buy a house and I'll be like, here's some cash to put towards your down payment.

That's what I plan to do with Sam. And so I don't think there's anything wrong with this. If it's a place that you want to be, it keeps the payment where you had it originally. I mean, Rachel, do you see anything? No, not at all. I mean, and if again, you trust there, no strings attached, that it is a free and clear gift. And what's interesting, Chris, there's a book called Die With Zero. And it's a really interesting read. And one of his takes that majority of people cannot do a lot of people are not in your parents position to have the cash flow to do something like this. But he was saying in the book, if you did, that actually your kids would benefit more

from your money in their 20s and 30s than they would when they're 60 and 70 when they receive the inheritance so it's actually i would see it not as borrowing against your inheritance it's actually putting you in a better position 30 40 years ahead to get you getting your house paid off that much faster to invest that much more for your kids does that make sense like it almost is a better use of that money the earlier you get it. If you do something wise with it, like put it towards real estate. Does that make sense? Yeah, that makes sense. And we are in our late 20s. So that kind of checks out. Yeah. So this is great. I love this for you. I feel like this is exactly what it's all about. Like it's all about having your money in order so that you're able to put the next generation in a better position. And so this is really money doing it's doing God's work, doing what it should. Oh, I hope that helps

Chris. And I would say to, um, you know, to something to think about for yourself, Chris is, you know, are you in a position emotionally to be okay with being given money? Cause I know there's a level, you know, not to stereotype, but you know, even some dudes like there, I don't know, there's, there can be something to feel weird. I'm like, oh, my gosh, I'm getting helped by my parents. But what I would say to that, again, if the relationship is healthy and good, like put the ego aside, receive the gift. Yeah, because that's yeah.

I mean, I think you're I think it's fine. I feel like it could definitely feel different if it's if you're the I'm not trying to enforce gender roles on anybody, but I feel like it could feel different if you're the guy and it's like enforce gender roles on anybody but i feel like it could feel different if you're the guy and it's like the mother your your wife's family yeah yeah i feel like it could feel there could be some difference totally listen a gift is a gift it's a blessing yep that's great chris awesome okay i'm next we have katherine in portland's maine hey katherine welcome to the show hi thanks for taking my call. Absolutely. How can we help? So we live in a single income household. I'm a stay-at-home mom. I do have side hustles,

but basically we've been in a like rinse, wash, repeat cycle our entire marriage for five years where we are debt free. We are able to save a few hundred dollars every single month, and we're trying to save for a down payment on a house. But pretty much what happens is we either get hit with, like we had my daughter two years ago, so we had a big medical bill, or we had to buy a new car, you know, new to us car. But it's like that savings gets depleted, and it basically takes us, you know, a couple years to save up, you know, double digit money. And then we have to spend it on

something big. Um, so I just see that happening again in the next couple of years. Like we have our cars, but when I look at saving for a down payment, I think it's going to take at least five to seven years, maybe longer. And I'm looking at our cars and I'm like, I think it's going to take at least five to seven years, maybe longer. And I'm looking at our cars and I'm like, well, we're going to need to buy a car. I mean, what you're talking about, how to do that, what you're talking about is so common, whether it's saving up for a down payment, Rachel, or if it's just I'm trying to get three to six months saved, whatever it is, I find that when your income is low, you've got to do something that's going to create momentum so that you can like build up that speed to get over that wave, right? And so for you guys, it might look like building up income, working extra for a season

so that you can really get past those hurdles that you see and kind of get that footing under you. Because the truth is all the things that you're talking about i mean that is life right cars break down it's time to replace that you know having babies yeah having babies i mean all of that is just kind of part and partial to life um and when you have a lower income you're right it does it feels like two steps forward one step back right so you're going very slowly um and i challenge you to say where where is an area that you can pick up work? I mean, you said you're a stay-at-home mom. It sounds like you have a two-year-old. What could you do to add to the income? What could your husband do? Yeah, he's working overtime. I have side hustles, especially one-

How much are you guys making a year, Catherine? About $65,000. Okay. And then, yeah. The other question is where you're renting now, what percentage of your income? Because it could look like, okay, we're going to sacrifice where we're renting now. Maybe we go to a smaller place and that frees up enough margin that we can get this done a lot faster. So I would just challenge you to look at some of those areas that maybe you thought were untouchable because we all have those areas that we kind of like hold close that's like i'm not changing you know this is my apartment we're comfortable here i'm not moving or this is my schedule it works for me i'm not changing it and unfortunately a lot

of times our opportunity rests in those areas where we're comfortable yeah so let me ask this too so in like the baby step list um it says to um um sorry Catherine you're good you're good go ahead that's all right um in the baby step list it says that um like you pay off your debt and then you start investing in retirement so like my husband and I um the he works for the state and because of that he has to opt to like the state retirement system. And we're like, OK, so. OK, so sorry, Catherine, I'm going to put you on hold because we're about to hit a hard break. So, yeah, if it if it is dictated to you, then cut that in half and half of that would go towards your 15 percent, if that makes sense.

So sorry to cut you off to get you there, but I hope that helps, Catherine. Thanks for the call. For free tools and resources to help you reach your home goals, go to ramseysolutions.com slash real estate or click the link in the show notes. Hey, you guys, health insurance costs are only moving one way, and that way isn't down.

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Hi, Richard. Welcome to the show. Hi, thank you for taking my call. Absolutely. How can we help? Well, the reason I was calling is I just recently changed my Fidelity 401k account. And I've actually brought it up to 75% of my income. And we have a military pension and my wife works. And so, but my question is, we recently purchased a brand new motor home and that is our residence. And so we have no other bills other than the motor home itself. And we weren't sure whether or not I should be investing like I am into my 401k.

I didn't mention that I am, I'm 58. I would like to retire at 62 as well as my wife. So we're just a few years out from that. And so we're just going, I wanted to get the money into the market as early as I could in this new year. And so we're, you know, I just, I upped it up to 75%. I wanted to see if that made good sense or not, if it did make good sense. How much do you have currently in your retirement? I have $117,000 in my 401k and my wife has about $13,000 in hers. And yeah, I guess that's about it. And then we do have our high yield savings that we're using for, we have money in there for our emergency fund. And the 75%, what does that amount to every single month that you're putting away? Well, right now I haven't seen my pay slip, but I'm somewhere

in the proximity of 1600 to 1800 every two weeks is going into that. And then I'm somewhere in the proximity of $1,600 to $1,800 every two weeks is going into that. Okay. And then I'm getting a paycheck of like $390, close to $400. Okay. And I put that into the high yield savings. And then you're using your wife's income for you guys to keep afloat bills and stuff. Is that right? And the military pension.

That's correct. Okay. And the military pension. Okay. Okay. You know, I'm not mad at a catch-up. Considering your age, and you guys want to retire in the next, you know,

four, five, six years, because you don't, I mean, $117,000 won't get you into retirement. So I understand the aggressive catch-up. Right, right, right. To get there. My only concern, Richard, is do you guys own a home as well as having the RV?

No, we don't. We actually sold our house a couple of years ago and relocated to Tampa. Okay. Where did that money go from the sale of your home? Well, we paid off our car and then we bought another camper and we paid cash for that so that wiped us out of all that so we we became debt free at that point okay and and so so i'm just thinking okay so my only hesitation is um and again you can do this later through your investments after you retire but one thing to consider is that the one line item in your budget going into retirement that we want stable is housing. And I just wonder if a camper is going to be literally your housing until the end of life.

And it probably won't be. So I would be thinking towards we're going to have to buy something very small and inexpensive, but coming out of this retirement savings eventually. And again again it may be in 15 20 years but think about the market continues to grow so housing is only going to get more and more expensive so um that's my only concern about this plan in general is something that just to be thinking about that you know your primary residence is something that's going down in value in a mobile home um or in a camper and you probably aren't going to live in that you know for the rest of your life so I would be putting so I would be thinking about housing long term

what's your pension right what will you receive monthly right now well with disability it comes out to $2,500 a month okay and what do you at this point in you guys' life, what's kind of that number that makes your budget run? Just kind of your normal month-to-month budget? Yeah, our month-to-month budget, and this includes putting, we have money that goes to our grandkids. We save for them. And then we also have extra that my wife has out of the budget. But it's like around $5,500. But that also, out of that, there's $800 of it that goes into savings. Okay. Into savings.

So it actually could be a lot. It'd be like $4,800 maybe. Or $4,600. Yeah, something like that. That's about what it costs to operate. And that includes the payment of the motorhome. And we do use the we do use the every dollar we're religious about that we love that app what's the motorhome payment

13 1300 a month okay yeah i agree 100 with rachel unless you guys have decided that this is just your way of life forever and you have just given the finger to home ownership. I agree with what Rachel is saying. I think you do want to stabilize that. And you probably want to get into something that you not only that you can afford right now, but you'll be able to afford in the long run if your income changes, if you stop working, that sort of thing. And so you guys have a lot to think of here because twenty five hundred, while it's a stable amount that'll be coming, it's not very much, right? And I do want to, I mean, at this rate, if you keep saving at the rate that you're saving, yeah, you'll be close to a million, a little less, $850 maybe. And so I see why you're

trying to kind of speed that process up. Now is the time that I'd be putting the pedal to the metal and bringing in as much income as I possibly could to save up not only for a down payment, but keep investing that 15% and get this thing done. So are you saying that you would recommend that I back off my contribution or would you leave it at 75 and go? Or are you saying? Well, I just don't see how you're going to be able to save up for a down payment on a secure home at 75 percent. Unless you see a way that I don't see. No, no, I get it. I agree with you.

I just I wasn't sure whether or not I needed to back down my my contribution to my Fidelity account and then and then go aggressive. I, you know, I have contemplated that. But I mean, you could you could do up to your catch-up contribution, which is still not going to be 75%, I don't think. What's in the high-yield savings? What do you have in there? We have $14,000 in that. Okay.

What is that? Six months of expenses? Is that five months? What is that? That's probably about five months. Okay. I'd keep that just like that and yeah i mean it's really going to be you balancing how much how much do we need to save

for a home and then doing kind of working backwards and saying okay this is what we need to save how long will it take and at this savings rate and then you say that takes too long let's you know come back further truly if you're walking the baby steps truly what you would do is you would back it all the way down to 15 save up for that down payment and you would start like knocking away at that home payment and before you upped your um you know fidelity contribution yeah and how much is left on the camper debt wise well we just bought it we've only had it for about three months so it's it's it was expensive. We have about $150,000 left on that. Okay. Yeah. The problem is what Rachel and I are asking you to do, you're kind

of investing on two ends. You've got your retirement fidelity investment, but when you buy a house, that's also investment. It's something that's going up in value. So while it may feel like you're pulling away from your 401k or fidelity investment. You're actually kind of diversifying in that way. Whereas now you're putting money into something that's going down in value. And do you see what I'm saying? So Rachel and I are giving you two income tracks as opposed to just one. Yeah, that makes good sense. I like that. All right. I hope that helps, Richard. Thanks so much for the call. Thank you so much. That's good guidance. I appreciate it. Absolutely. Well, thanks so much. And, you know, and when we talk about that,

you should not own anything with motors and wheels. That is more than half of your annual income. You know, Richard's going against that, but that this is where he's primary living, which again, from a long term, I don't recommend because unlike real estate, if you go and buy, you know, a two bedroom condo somewhere, it's going to go up in value. That's right. Where a camper is going down. And so to put all your eggs in that basket at this age, it is scary, Richard. And so, yeah, I mean, I don't think I realized you owed that much on it. So almost backing down, paying that off. I wouldn't pay it off.

I just, I think they need to get into a house sooner than later, like as quickly as they can afford it. Or even selling the camper and realizing. And renting. Yeah, I don't know. I don't know. There's some options to look at. Well, thanks, Richard, again for the call.

This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself, we all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when we ask for help. Therapy can be a great source of help and support for any area of your life. And if you're thinking about starting

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you're gonna have walking into that, which is huge. Like you wanna be armed with so much information before you go and buy or sell your home. So make sure to check it out at ramseysolutions.com slash real estate or click the link in the description if you're watching on YouTube or listening on podcast. Because if you need some next steps

towards your home buying or home selling process make sure to check it out one of my favorite things on it is the dashboard they have the u.s housing market trends and they keep it updated and it's just constantly kind of a kind of a pulse of what's going on with interest rates median house home prices in america total days on the market how many homes are for sale around the country i I mean, it just kind of gives you the snapshot picture of the real estate market. So again, you can go to ramseysolutions.com slash real estates. All right, we're going to the phones and we're going to Andrew in Cheyenne, Wyoming, one of my favorite country songs. Hey, Andrew, welcome to the show. Hey, thanks for having me.

Absolutely. How can we help? Hey, so my wife and I were on baby step two and it kind of took us a little bit to get there, mostly because we've been pretty sick, both of us, for the past few years. And we're seeking some medical treatment to hopefully nip this in the bud, hopefully in a few short months. But the medical treatment that we're looking at that was recommended by our doctor is experimental. And it's not covered by insurance. And the treatment is going to be between $10,000 to $30,000. So we're kind of in a position where we...

Are you there, Andrew? Oh, no. Oh, man. Andrew, we'll give you one more second. Oh, yeah, that's a bad line, I think. We're going... Is this better? Oh, there you are. Oh, you're back. Yes. Sorry. Oh, you're good. You're good. My phone's a little weird. So, yes, I don't know if my wife and I should actually take out a loan or not. We really don't want to, especially since we're getting out of debt. Can I ask, Andrew, and share as much as you feel comfortable, but what's going on health-wise? We were, so we got pretty sick from the home that we were living in.

Oh. And so. Like been, yeah, so it's just been a lot of stuff that's been going on where a lot of the treatments have been not either FDA approved or treatments that have been getting us better. We are better, but it's just been a really long process. So the last time we talked with our doctor, he said that we should try and do like a hyperbaric treatment, which seems great. You know, he's had really great success with it. But the only problem is that the payment has to be up front.

And so that's the only issue. And insurance, this is obviously something more like in a natural bent, I'm assuming, so insurance isn't going to cover it. No, insurance won't cover it. Tell me just health wise, are you guys able to, are you able to work? Are you able to function? Like, how are you guys? You said you're doing better.

I'm just trying to get a gauge about how urgent this, this is for you guys. Yeah. So, so we are better and we are both working right now. We make about, I want to say close to000 or $80,000 right now a year. Okay. The only problem with this is that the longer we put it off, the worse it'll get. Sure. And so it just...

What's your margin every month? What are you right now putting towards debt and Baby Step two that you could put potentially towards saving up for this or doing one at a time? Yeah, we're able to put close to $600 or so a month into debt. And how much debt do you guys have? Right now we have about, I want to say about $20,000 in student loan debt and then about $50,000 in a business loan. Okay. Man, this is so hard because I do feel like they're just from my own, not my own experience, but people within my close circles of friends and family, even that I know, you know, when you get

something, it's like autoimmune or mold or whatever that it can end up feeling, Andrew, like there's always something else we have, like there's a long line of things that are continual. And so what I, you know, always just think about and kind of caution is I would number one, maybe get a second opinion. I'm sure you know your doctor well and trust them But you know I mean we're talking about $10,000 to $30,000 right I mean if it was $2,000 That's one thing but I mean you're talking

You know five figures Going in with treatments And so is that a piece Or all in That would be for us combined And is this ongoing Or is it kind of a one-time? Lord willing, it'd be just a one-time, like, you know, one to two months worth of treatment. So it'd be, you know, 20 sessions is like, is about $10,000 on the high end.

So we hope to be done in about a month. Okay. So, you know what what i would probably do because again i feel like this can sometimes feel like a never-ending yeah cycle um i would i would um and because it's not a and i know you're you guys are saying i don't want to downplay it all the sickness i'm sure it's just miserable but it's not a life or death like okay i have to save my child right now because you know there's a you know like it's not this it's not an urgency but it is something for the betterment of your health you want so what you know what i would probably strive to do is whatever i could to get because 10 to 30

is a big range so i would get as close to that 10 and i would talk negotiate doctor's bill i mean i would do whatever i could to get it down to that 10 and you guys are you know i would work to save a thousand a month. I would be okay right now because it is a health issue, maybe to pause the debt snowball, stay current on your bills. But I would bump that 600 a month up to a thousand

and save for 10 months. And then starting October, November, Andrew, start this treatment. And then hopefully by this time next year, you're through it, you're done, and then press play on the baby steps. And maybe one of you goes at a time to see if it's helpful.

Oh, that's a good point. You know, I know you're two different bodies with two different sets of, you're done, and then press play on the baby steps. And maybe one of you goes at a time to see if it's helpful. Oh, that's a good point. You know, I know you're two different bodies with two different sets of, you know, but that might be a good way to say, listen, I did it. It did nothing for me or I did it. And it really, really helped. That might give you some confidence going into the next treatment. It's just a thought. Like, I don't know what you're facing.

I don't know if it's headaches or every time you eat, you know, whatever it is, if it's something that's truly debilitating, but if it's just, and again, I'm not, I don't want to downplay it either, but if it's something that's more of an annoyance that you're learning to live through, that gives you, you know, there's a little bit more timeline there to get this done. For sure. And the sense too that, you know, you don't want to prolong it too long because of what you're saying, you know, they can come back and get worse unless you have this treatment. So getting to it, right, a level level of urgency but it's also not like

we have to do this next month the only option is a loan and we're done like yeah if you can and it's not debilitating because you guys are working and all that um i would yeah i would find something because i and i would cash flow it and and the other thing andrew that's interesting is when you are working with cash even when we're talking about you know health situations it does force you this is why I like cash forces you to look at other options other decisions like sell something yeah there's there's just um other parts of your brain of problem solving versus with debt it's like here's a chunk of money this is all we're going to do we don't really have to pit the brain power to think through other things it's just here but when But when you're paying with cash and you're working and saving hard, like, I don't know, it just, it forces other things to come to the surface of other options and choices.

That's also true. But yeah, so again, I'm so sorry. That is, that's stuff that is like, and that's, and that has been, I don't know. I don't know if you've, or I've just had people and it's like, you go to the next thing and then it flares up again. I don't know. It just feels like it's like whack-a-mole a little bit sometimes with different things so i do want you guys to get that treatment but um but because it's not

it's not life or death right in this moment i would i would calm down i mean you know i would i would pause a little bit and save up for it that's difficult i remember um when sam and i were getting out of debt this This was before the days of Obamacare and you had to have insurance or else you were penalized. We didn't have insurance. And one day he was pulling our luggage out of the back of the Jeep and it got caught on his finger and he

broke his finger. And we didn't have insurance. And I was like, listen, head over to Walgreens. Tape it up. It's crooked to this day. And you know, he plays instruments. It wasn't good. Take care of yourself. Take care of yourself. This is The Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and

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Hi. Can you hear me right? Yes, we can. How can we help? Hi. So I have a kind of indirect financial question. If you will, not necessarily about my finances, but a conversation I would like to have about finances and my family. Okay. So just a little bit about my situation. I am 22 years old. I'll be turning 23 on Sunday this upcoming week. Oh, happy early birthday. Thank you. From 2021 to 2024 is when I accrued all of my debt to around $30,000. Okay. And so my question is, I would like to, I've been taking care of it

since September of last year to now, which originally was $37,000 plus. But since then, I've taken care of about $7,000 to $8,000 of it so far. Good for you. That's great. Thank you. My concern, though, is that while I accured this debt, neither of my parents know anything about it or about my financial situation.

Do they support you financially in any way? So yes and no. My father, he doesn't live with us, but he is supportive of me. If I were to need some financial situation or some financial help, he would would and I live with my mother and my grandmother but um considering how much I make I make enough where I think I'm okay enough without asking for help yes what caused you to go into the debt if you were in this or were you not in this living situation before either way what caused you to go into the debt um i uh before if you were to ask me that question i would have made up a lot of excuses but i'm i've worked on it enough and made enough accountability to say myself um come 2021 i had kind of moved out from

my mother's house and lived with my ex and so it was through some immature purchases on my end and his end. I had set up a joint account for the both of us. And so he was taking out most of the money between how much we were both earning. And I was the more so the breadwinner compared to what he was making and I was I was okay with it I would have just liked a heads up because I was working about maybe 60 plus hours a week so he was using he was using your yeah he was using your money plus going into debt under your name yeah um wow I was I was really stupid essentially i mckayla you're so we all make mistakes yeah

this is not a research yeah it was just i was just trying to more of a clarifying question making sure i understood the situation okay so my next question is why do your parents need to know well the reason why is because my mom and i have um been talking a lot more and one of my biggest goals for this year is to be more open and honest with the people in my life my loved ones my parents and I want more instead of like a child mother relationship since I am getting older I want more of an adult relationship with my mom the other two really big concerns are since I work these two jobs, my mom has been open about like what she sees in me and how they're both physical labor jobs. And so she says how exhausted I look and how tired I look. And the other part is our grandmother lives with us, but she has Alzheimer's.

And so on top of working two jobs, I try to help my mom as much as I can with my grandmother. So are you saying that they're wondering, are you saying that you kind of want to give them some context as to why you're working so hard at the jobs you're doing? Is that what you're saying? Yeah. So why don't you tell them? I'm sorry.

The other big thing was with everything going on politically my mom has made it quite uh known to me how concerned she is about me and my family's well-being and she has said um consistently on numerous occasions if things were to go from push to shove she would like for us to leave the country okay and so listen with us with her bringing that up continuously having some experiences already are you guys from do you have a non-us background is that what you're saying are you concerned about immigration is that what you're saying no when you say we're african-american okay oh i i hear you okay enough said here's what i'm thinking here's what i'm thinking um i get what you were saying earlier you're talking about a lot of different things so let's talk

about first the financial side of things a uh if you want to give somebody context without giving them a ton of details that's fine you can say listen I've got some debt I'm trying to pay off that's why I'm working so hard if you don't want to tell them the whole 30,000 hold on you want my here do you want some more I've got water sorry guys I'll take over for a second thank you go ahead give me a give me a wave Jade because she's got some good stuff to say uh yeah so so echoing on what she's saying is that you can have a deep relationship with someone and be able to kind of share what you're going through of like the struggle of like, oh, yeah, you know, I do have some debt I'm trying to pay off. That's why I'm putting in these hours.

And this is the why behind it. And I do agree, you don't need to walk alone when it comes to your money. So having somebody in your life that has context and knows what's going on, I think is important. It doesn't have to be your parents. And I wouldn't say your parents have to know every detail of your life in order to have a close and great relationship. But if you want that peer to peer mentality to Michaela, you are your own person as well. And so if your mom, you know, has, you know, maybe you share in her fears or not, I don't know, but she can have her own, you know, set mindset of, you know of what's going to happen for her future or what she thinks may have to happen.

But also, Michaela, you're 22 years old. And so you get to make some decisions and decide for yourself, hey, here's the reality of my life, too. And just because my mom goes one way, I don't have to go that way either. Unless you do think that, right? And you may have context in that, which is totally fine. But I do think you are your own standing person at 22. Your parents don't need to know these things, but I understand opening up and wanting them into what's going on with your life, I think is great. And if you want to tell them the number,

tell them the number. We always say, debt is not a sin. It's not a salvation issue. There wasn't some big moral failure. Yeah, you made some mistakes you look back and like that was stupid with my ex why did i do that but listen we all make mistakes like like things happen in life michaela so you're 22 do not beat yourself up about it i couldn't have said it better myself rachel said it while i was in a coughing fit and she covered it you I don't know, James, you can probably have a lot better, more to add. That was it. She covered it. That's exactly it.

I won't repeat it, but I think, Mikayla, you know what you have to do. And just listen, above all, don't be influenced by somebody else's fears. Like if they have fears and concerns, they're able to have those. Everybody gets to have the emotional train that they want to have.

And if you feel the same way, fine, but don't let it, if you don't, don't let that fear kind of lock you into something you should or shouldn't be doing with your money. Okay. I, um, thank you. Thank you. Truly. I, I'm, I'm sorry. I'm really trying not to cry. That's all right. What is it? What is making you want to cry? I don't think I would cry That's okay My mom and my dad are really big people In my life I really really look up to them

We're not super rich But I get my really hard work ethics From them And so they taught me what I know about finances And I feel really really dumb getting where i am now i see you feel guilty disappointed in me with where i am oh my god i am so sorry no that what you're talking about is so real like the guilt that we feel over previous mistakes that we've made with our money the guilt that we feel over previous mistakes that we've made with our money, the guilt that we feel having not met expectations that we feel were put on us,

or maybe that we've put on ourselves. What you're talking about, Mikaela, is such a real thing. And a lot of times when we think about getting our money under control, we kind of think it's just this light switch that we flip. All right, I'm getting on a plane. That's it. And I just do it. And I feel nothing until it's over.

And that is simply not true. You go through a wide range of emotions and guilt and shame is one of them. But I want to tell you, Michaela, you may have made mistakes with your money, but you are not a mistake. OK, you are not a problem, a problem. You are not a burden. It was just something you went and you went through it and let those emotions go through you. OK, it's when you get stuck in them that they become a problem. Yes. Yeah. It does not define who you are. Your past mistakes don't define who you are, Michaela. So know that there's freedom in it and opportunity ahead. Thank you so much for the call. Thanks to all the guys in the booth. Thank you, Jade, for a great hour. This is The Ramsey Show. Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with bestselling author Jade Warshaw.

And we are taking your calls about your life and your money. So give us a call at 888-825-5225. Starting us off this hour in Los Angeles is Lori. Hi, Lori. Welcome to the show. Hi, Rachel and Jade. Thank you for taking my call. I am beyond thrilled to have the two of you answer my question. Oh, well, I'm so glad you called. How can we help? Okay. So I have a scenario that I have not heard and I have been wanting to pick your brain for a long time. I, my question is basically simply what is the next best move to make based on your advice. And my situation is I am 63 years old. I am, I have moved back into a property I've owned for 28 years, uh, to establish, I had it, it was a rental property. I moved back

in to establish it as my primary residence to save $80,000 in taxes. Woo. Okay. Because of it not being my primary residence, I wouldn't. Okay. Now, I don't own another property. I have $50,000 in retirement. I have an account that has $ 200,000 non-retirement. I spent $30,000 plus,

well, actually $40,000. I've spent $60,000 so far and I'm a year in. Like your living expenses. Is that what you're saying, Lori? It takes $60,000 for you to live. Is that right? Oh, it's, it took, I spent 60 above and beyond what I bring in on my income because I actually put the house on the market. Uh, cause I thought this is ridiculous and upside down and against my, you know, money philosophies. And it fell out of escrow twice because there was a repair. Just, you know, things happen in real estate. So I had to spend additional money. Okay, so you used $60,000 above and beyond your living expenses

to fix up the house to sell. Is that what you're saying? Well, part of that was fixing it. And part of that was, uh, you know, just, um, an additional to just keep the house running with insurance and, um, uh, you know, uh, utilities and whatnot. What is it costing you now to live there? Like what's the payment or is, okay. It, okay. So, uh, it costs me thirty eight hundred dollars to maintain the house a month and a month okay and that's rent and what that's what is that rent and utilities or is there something else we need to know about that goes into maintaining it okay so that includes

my mortgage property tax insurance uh utilities that is everything i am super i am also will tell you i am a huge fan of um you know our budgeting i'll just lost it what's every dollar yeah every dollar oh my god that's great she's like i know it and i love it okay so i, I am telling you, the two of you, I know every penny that I spend and that comes in. So I am so organized here. So you're paying $3,800 every month with your mortgage all in, all included. What are you, what's your top line of income? What are you bringing in every single month? Okay, so I bring in about 90,000. I'm a, um, my income can fluctuate,

but I'm going to, I'm going to say that it is, it averages, and this is on the, uh, conservative side, 90,000 a year. Okay. And what's that look like monthly for you on a good month or a normal month? Um, it. It looks like probably, I'm going to say, let's just say 6,000, 6,500, 6,000. Okay. Okay. And here's a couple of things that are important to know. I thought at some point maybe I would pay this house off and stay here, but I don't want to be here, period. And I will also throw in, because of the expenses, because I don't want to live in the area. It's far from my kids and my grandkids. And I want to be closer to where they are, or I am willing to go a little outside of the area to stay within my personal comfort financially. OK, right now. What would that look like?

Sorry, I'm moving you along so I can make sure that we please we answer you. I'm fine. OK, what that would look like is right now, honestly, creating some more freedom for myself, freeing up the equity that I have in the house, getting accounts set up properly, renting for some period of time and something as low as I can. And what location, Lori? Is this still in California or is this like Arizona? Is this Missouri?

Like where are you talking? Well, unfortunately, those grandchildren are in California. Okay. But, you know, and it's maybe outside of Los Angeles because, you know, I'm in a fire zone too. So, Lori, what's your main question? What can we help you with today? is it doesn't make sense for me to sell the house before it hits the two year mark as primary residence. I would be foregoing about, you know, 70 to $80,000 of tax. I, you know, but I've already spent 60 and I'm going to spend another 30 or 40 for the rest of the year.

And I'm choking. What's causing you to what's making you feel like it's to the wire that you have to do it, that you would even consider doing it below the two year mark? Because it feels financially absolutely so uncomfortable. Right, because it's more than half of your take-home. And what are you fixing when you keep saying you're going to be... When you say, I'm throwing an extra $40,000 at it, is that because it's almost $4,000 a month to keep it afloat, or is that an additional

$40,000 on top of just maintaining it? No, that's an additional. So I'm going in the hole. I'm borrowing. And is that because it's a broken-down house? What's the extra $40, 40 going to be going to? That's going to be just covering all the nut because it's actually more like let's. You're only making 66 to 6500.

You're paying almost four thousand dollars a month for housing. So there's no way you can keep that. How much will you how much will you if you sold the house today for what you want? Ideally, how much equity would you be walking away with um i would be walking away with about 1.1 or 1.2 million yeah million wow okay and it'd be 80,000 in taxes is that what you were saying because of capital gains no the tax the taxes would be because I bought that property for such so low amount. Right, right, right. So the overall with everything said and done is still going to be like $300,000 of taxes to pay.

Okay. So it's like under that category of math is not a feeling. Yes. It's like, as you can hear, I am like struggling every month. You're exactly right to feel this. I mean, this is far exceeding the amount that we would say it should be. I don't know. I don't see how you can keep this going without going into debt. I'd sell it. You're going to take the hit on the capital gains. That's fine. You made money. And then truly, you've got to get in a situation where you're getting that payment. That's 25%

of your take home, whether you're buying or renting for a season, still don't let it exceed that. Yeah, and Lori, if you have the ability to get in a small condo to buy with this equity, I would do that versus renting long-term because eventually you're going to have to buy something and the sooner the better. Thanks, Lori, so much for the call. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system.

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Welcome back. We are taking your calls at 888-825-5225. I'm Rachel Cruz, hosting with the wonderful Jade Warshaw. And we're going to go to Portland, Oregon next, and we are talking to William. Hey, William, welcome to the show. Hey, how are you doing? We're doing great. How can we help? All right. So I have a few questions, but so I'm looking at going to trade school or well, trucking. I don't know if that's considered a trade, but trade school, I guess. And I don't have enough in my savings. I just have enough for the emergency fund. I'm currently on baby step number two.

Okay. And I have $24,600 roughly in debt. Okay. And so I was wondering if, I know you guys generally say not to take out student loans. And this is, it's not a huge student loan, but it's still money. It'd be six6,500. And I was just wondering, should I pay off my debts first, which would take me around two years? What would be the jump in income, realistically, from what you're making now to after you graduate? It would go roughly from $60,000 to $120,000, so double.

Okay, okay. That's a good investment. How long is school for? It would be roughly for about two months and then trying to get it out after that. Yeah. Wow. How long would it be to get into, you know,

because I know with that it's either you own a truck, you work for a company, like what kind of route are you thinking about? Yeah, so I would be working for a company and I've already talked with the owner. Okay. Um, and it roughly around a hundred is what he's going to be starting me at. Yeah, that's right. Um, how quickly can you save that if you paused your snowball? Um, at my current amount, probably in around four months three four months that's great i mean

honestly william that's probably what i would do and the only reason i would say to pause your snowball to do this is the immediate jump in income and and trucking for the most part i know people can kind of get a little bit into the weeds if you own your own truck i mean i know there's some expenses that can happen but the path you're doing is very predictable. It's not like you're going to school to get a master's in psychology and you're hoping to do X, Y, and Z and it's a little ambiguous.

Because it is such a short amount of school and because it's pretty guaranteed, that's one reason why I would, or two reasons why I would say, I would pause. And how old are you young I'm 23 yes for sure I would do that William honestly I would not for sure take out loans for it I would save and for you to be able to pay off 24,000 with 100 to 110,000 dollars on the road

where a lot of your expenses are paid like sleeping right like you're you're gonna have lower expenses too just because of the lifestyle. So you'll be able to knock out that $24,000. I mean, you can make an aggressive goal and say you're going to do it in six months and live on half of what you're making or, you know, something crazy. Yeah, you're used to living on $60,000.

So why not? Ooh, I concur. Great. Yeah, that's kind of what I was thinking was once I get that jump in income, change absolutely nothing. Yeah. Just because I have more doesn't mean I have to spend more. yeah, that's kind of what I was thinking was once I get that jump in income, change absolutely nothing. Yeah. Just because I have more doesn't mean I have to spend more.

Yep, that's right. And then just knock it out. But also, my other question was, so out of that $24,000, $20,000 is auto loan. And I was wondering, should I just sell the car? Oh, tell us more. What's it worth? It's worth roughly $36,000 to $38,000. It's a 22 Highlander.

No brainer. Yes. Today, William. Today. And with what you get with it. You're going to be debt free. Yeah. You'll be debt free and pay for a cash car or whatever, you know.

Oh, yeah. Pay for a cash car. Yeah. Wow. This is a good conversation. Thank him. Yeah. you're rare, William In the sense that your car is not underwater We talked to so many people that have bought

In the last few years when cars were so up in value And they bought high And now they're trying to sell Yeah, I'm a very big Yeah, I'm just like when it comes to cars Like I was doing research for months I'd never buy any warranties and never did any of that. And I would not buy over MSRP,

even though I did buy in 2022 when cars were like crazy high and they were doing markups everywhere, but it's holding its value that well, huh? I mean, you Kelly blue book and that's what you're seeing. Well, Kelly blue book private party.

It's tell me around 41, but I've had it on facebook marketplace for about 39 and no luck so far so okay so you're thinking 36 is that what you're saying 36 is what i get through carmax as like an instant offer so if you let's just say you did that i'm not saying that i would do that but i mean that gives you you're going to come out of this with 15 or 16 000 that gives you enough to pay off the remaining debt. That gives you enough that you could pay for school and buy a junker. And you're only going to drive that beater car for a little while

because you're going to be making $100,000. Or maybe you'll drive it for a while because you're on the road. Wow. I love that this Highlander is breaking you free. This is great. Yeah, that's kind of like my original choice was like a BMW 750. And those just think like a rock. So I'm pretty glad I didn't do that. Well done, William. Also, I am a little like still disappointed myself that originally my

budget was $3,500, $35,000, sorry. And then I went and spent $55,000. Well, you'll never go into debt for a car again. You've learned your lesson. And with what you're setting yourself up, the next time you buy a car, it's going to be in cash and it's not going to be a junker. It's going to be something that you've vetted and looked at and used in nice, right? You're setting yourself up to be able to do that. All smart, yep. And then when you get that first paycheck, it's all yours because you're debt free because you sold the car. Boom. All right. Let's go to Josh in Boise. He is up next.

Hey, Josh. How are y'all? Doing great. How can we help? Good. So I've got a couple questions. So first off is my wife and I recently moved to a remote town in Idaho where there is no major companies and there's no handyman up here either. So my wife and I decided this year we're on baby step two currently.

And we've kind of decided that this year might be a good year for me to start a handyman LLC. I've already got all the tools to do it. The only thing that would cost me out the door is the initial startup through the state for the LLC paperwork and the filing fee and all that. So that's roughly about $500. The downfall is I'm having a really hard time finding business insurance as well as the only thing it would cost me running this LLC is my time and my fuel. That's all it would take. So those are my two main questions is starting an LLC at this point in our life, a good idea, a bad idea. And then? And then as far as business insurance, I don't know what to do anymore. So is the problem that when you're looking for business insurance,

you're just not finding anybody who will offer it? Or is it the price? Tell me more about that. And also, have you, yeah, tell me that first. Okay, so I've been told by multiple companies that because I am too much of a jack-of-all-trades that they won't cover it because of the fact there's too many things that I can do they're telling me that I need to specialize in one or two specific skills if it's but the downfall is if I specialize in flooring then I can't do trim if I do trim I can't do

painting stuff like that and I didn't realize a general contractor I can't do trim. If I do trim, I can't do painting. Stuff like that. And I didn't realize it was an issue. It sounds like a general contractor type. Uh-huh, uh-huh. I mean, I know it's not that intense, but that's what it's sounding like. Is that the problem, that you're calling yourself a handyman and you should be titling the type of work you do differently?

Is that what they're looking for? I'm not an expert on business insurance, so I'm just asking questions to see if we can drill it down. Yeah, no, it's fine. So I could get my general contractor's license. It's not overly expensive, but they do require you to put down one or two specialized skills specifically instead of having a large array of certain things. And maybe that is what you do in order to kind of get your foot in the door because I feel like the more you're in this world, the more you're going to learn

and it might be a good idea for you to start small. Okay. Oh, go ahead, Rachel. Well, I was going to ask, what's the biggest need? If you were to drill it down to two things versus jack of all trades, what do you see as the most lucrative? Well, there's a lot of flooring up here that needs done

As well as everybody around here has got a piece of wood busted, broken somewhere So it's, I mean, it's a little old mining town in Idaho I don't want to sneak around the law or anything But my question is, yeah, could you go flooring and trim? And then if someone's like, oh gosh, well, I need this help too You're like, oh yeah, I can fix your toilet too for an extra hundred bucks or I don't know, is that plausible just as a freelance

type work? Yeah, it probably could be. I'd get into some, I don't want to sound like I don't understand the internet, but I'd get into some chat rooms or get on Facebook, get in some forums and ask people, hey, what license did you do? How were you able to be a handyman or

kind of jack of all trades and also be insured? And see what people who are doing it, how they're insured. There's a time in your life and the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense.

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R-E-F-Y.com slash Ramsey. May not be available in all states. All right. Today's question comes from Melody in Virginia. She says, My husband and I are in our early 40s and got married last year. While we were dating, my husband bought a house for us. I participated in the whole process and he paid the down payment and the mortgage until we got married. We have joint accounts. All that we make goes there and we treat all income as ours.

We worked together to pay off the debt we brought into the marriage. My husband recently became very ill and agreed to do some estate planning. I asked him to add me to the house deed and mortgage, but he wants to just stipulate in his will that the house will be mine if something happens to him. I don't care about the house itself, but while I made sure to put him as a beneficiary for everything that is mine, he has friends and family as beneficiaries for what is his am i wrong and feeling off about this whole situation um yeah i i would definitely feel off about this um the truth is okay so let's talk about the will thing first because

if you were like hey i'm not on the deed and there's no will that would really be a problem just looking at it as that because i'd say well if especially since you guys bought this thing before you were married it could go to probate depending on what state you're in yeah and it would take time for it to really uh iron out and go to you the other thought is but there is a will then my next thought is like have you seen the will because i want to see it with my eyeballs on it for real. So because if not, depending on what your state is, again, there could be an issue there. Then there's the relational side of what's going on here.

Like, why doesn't he want that? And I also want to know, well, why are your friends and family on the other assets? Like, what is it? What could it be? A 401k? Anything else? A savings account? Anything else that would have a beneficiary? That would be in his name exclusively that she couldn't be on. Yeah. Yeah. other assets like what is it what could it be a 401k anything else a savings account anything else

that would have a beneficiary that would be in his name exclusively that she couldn't be on yeah yeah so what what stands out to me and i i'm gonna read a lot into this but this is just what stands out to me you're in your 40s you've only been married for a year it sounds like there's something previous that's playing into this like Like maybe there was a previous spouse or a previous relationship and he has trust issues. Something is going on there. I find that when people are later in life in those relationships, there tends to be more walls up. Yeah. More bad experiences that happen with life. And because of that, people get protective and they want to protect themselves, which in one case is totally understandable.

But also as it plays out in the health of the marriage, it ends up being more detrimental than beneficial. And that's where you guys have to like really get on the same page. So yeah. Yeah, unless to your point that he promised his brother that he would help pay for the brother's kids college. I don't know. I think there's something there that makes sense to you. but for you not even to understand why that's a bigger problem to me you need to know that um you know jade I was stopped by somebody recently out and about and she she was very kind but she was like can I just ask you a quick question I was like sure but she was saying that they her and her husband are working their way out of debt she has I think like maybe I can't remember the exact word maybe twenty thousand dollars left in her name because they're her student loans okay and they were going to go

and refinance the house well um if they put her name on the deed in the in the refinance then they're not going to get as good of a rate because of her credit score and everything and so she was like we want to refinance but should we hold off till we're debt free or could we go ahead and refinance and my name not be on the deed, but I could put it on the deed after I'm, you know, get out of debt. Anyways, it was this whole like situation. And I, you know, and I told her,

I was like, I mean, yes, you want your name on the deed eventually. It's, and if it's not, it needs to be in the will, like what you're saying. But the, I think the ownership aspect of both being on the deed is important, but also in a short term,

if it doesn't make financial sense, save the money and then put your name later if your name is in the will for it. You know what I mean? That makes sense, yeah. Just in case something happens to him. Because the whole point again of sharing assets, yes, is from a tactical standpoint.

So we want to be smart about that. But it's also from an ownership perspective and a unity perspective. And depending on the state, I don't want to get this wrong, but depending on the state, let's say that the house was bought. It was bought pre-marriage. It was bought in his name.

Technically, let's say that he passed away and there was debt that she didn't know about it. That house, depending on the state, could be treated as an asset and they could sell the house to pay the debt. That's right. So this is important. You know what I mean? It's important, A, to know your state law. B, it's important to pay the debt. That's right. So this is important. You know what I mean? It's important, A, to know your state law. B, it's important to make sure that these assets are protected because it's probably the thing that they have that's their biggest asset that has the ability to generate the most money for her if she were to sell it. So this is

an important issue. All right. Let's go to Richard in Rapid City, South Dakota. Hi, Richard. Welcome to the show. Hi, thanks for having me. Absolutely. How can we help? Hi, so I was just let go from my job suddenly this past Thursday. Oh, gosh, I'm sorry. My question for, we'll make it through. We're on baby step three. We've got our expenses saved up.

Okay. But my question for Dave was, what should I be doing during this time? Should I be looking for a part-time job maybe to help bolster that emergency fund, make sure it doesn't run on short or dry? Should we move out of the house? Are there any special considerations? What were you doing before? I was the director of music for a large, well-known church in the area. Okay. Do you see a position opening up and doing something similar anytime soon? It's kind of thin. It can take a couple months, three months, conservatively to find a job that's so specific that matches my very narrow field of expertise.

Yeah, for sure. Well, yeah, I would be for doing something in the meantime. And I always feel like the transitional season, like what you're in, it is harder because, I mean, I think for a lot of people, you kind of have to go into it with a lot of humility, being like, okay, I was doing one thing, and now I'm doing something I never thought I would be doing, but at least I'm earning a paycheck to keep us afloat. Because you're right,

you don't want to sit there and just drain your emergency fund all the way down, you know, three to four months in. So keeping as much afloat as possible. Does your wife work? She teaches some piano lessons here and there, but she'd be like being a stay-at-home mom. Sure, sure. Yeah. So, I mean, Richard, I'd be doing anything or everything. And again, it's not going to probably be in your field of what you're saying short term. And it may not even be a job you thought you'd ever be in, but you're earning something and bringing something in while looking, simultaneously looking for something that you had,

or stuff may have to just shift in your professional career. If you hold on the line when we get done with this call, Christian's going to pick up, and I'd love to give you some of Ken Coleman's material because he writes about this, of whether it's a job loss that is sudden or expected or you decide to change careers because it's not what you're passionate about,

regardless of your reasoning, kind of relooking and just saying, hey, what other strengths are out there? Because like you're saying, if it is a narrow field and if there's not a reality of you getting something very similar to what you're doing, you want something that is full-time, that is fulfilling, but it may look different and maybe something more

that you aren't thinking about. So I'll give you, yeah, Ken's book and he has the Get Clear Assessment, a code for that in his book. And so you can actually take that. And it's a great assessment. It's very thorough. Just to maybe just to get your wheels turning

and thinking of other things. Yeah, thanks for the advice. Would you push me more in the direction of a full-time job or would it kind of depend on the situation? I mean, I'm of the mind to take any job until you get the job, whatever it is. You know, right now you're unemployed, so let's get something just to keep you going. And if it is full-time with insurance and benefits, that's a bonus for sure. You know, knowing that it may be short term um but but getting something that

has kind of a well-rounded package i think would be ideal and if not you may have to go down to to an hourly type job which is fine too but yeah at least you're making something yeah how did you do you have six months of expenses three months what do you have we have about five okay yeah i mean i'd make it my goal to like in two months start, you know what I mean? Like put a goal out there because if you aim at nothing, you'll hit it. So give yourself a clear goal of here's the timeline I want to meet and it, and give yourself contingencies. If this doesn't happen, then I'll do this and really write out a clear plan so that you don't feel like you're just floating, but that you feel like you're making intentional steps in a real

direction. Yeah, for sure. Yeah, Richard, hang on. Christian's going to pick up and we're going to give you Find the Work You're Wired to Do by Ken Coleman with the Get Clear Assessment to help you maybe, yeah, in just a new direction, kind of take that narrow path and maybe expand it a little and see what else is out there. So good luck to you. I'm so sorry.

That is not fun. This is The Ramsey Show. So one of the best ways to make the most of your money is by sticking to a budget, creating a budget, sticking to it. It is the roadmap, you guys, for your money. And EveryDollar is the best budgeting app to help you plan to spend your money, track it when you spend, save for what matters most. And it is just amazing. So keep a pulse on your spending and really make progress with your goals this year. Be intentional. And EveryDollar, again, it is just, it is my favorite app. I was saying this in our live stream, but I'm not

kidding. When I open my phone, you know how you like subconsciously go to things on your phone that you don't realize you're in? Mine is Instagram and every dollar. I end up in every dollar sometimes. I'm like, every time I open it instead of Spotify because it's, they're both green. Yes, I know. But for real, Jade and I both, we use every dollar. We love it. It is, it makes it so easy. I just was doing our February budget. Um, I mean, it's, yeah, it is great you guys. So you could actually download it for free in the app store or google play or click the link in the description if you're watching on youtube or listening on podcasts because again getting great tools with you that are simple and easy and help you make progress that is like that's where technology

is at at its best yes when it's helping you so. So honestly, make sure to check it out again. That is every dollar. All right, let's go to Tanner in Tampa, Florida. Hi, Tanner. Welcome to the show. Thank you for having me. Absolutely. How can we help? So I'm in the market of buying a house and I'm looking at buying one and I'm wondering, should I buy a starter home or should I save up for the home that I plan on living in for the rest of my life? Ooh, you know what? How old are you, Tanner? 23. Okay. Yeah. You know what, Tanner? I'll be honest with you. So much life happens in a five-year span, in a 10-year span, in a 30-year span in a 10-year span and a 30-year span so I I as much as I love the sentiment the truth is you have no idea what house you're going to live in for the rest of your

life don't put that pressure on you at your age either if you were 65 we'd be like okay maybe we can decide what else you'll be in you know for the next 30 years but uh not at your age so no don't don't limit yourself to that Yeah, smart move I would say would be to get into something When I say as soon as possible Usually that means a couple years of savings So it's not that urgent

But I would be getting in So tell us about your financial situation Do you have any debt? Do you have savings? I just got out of debt I I just paid off my truck. Way to go, Tanner. I'm building up my savings. Awesome. How much do you make a year?

Around $90,000. Okay, good for you. And it's just you? Or do you have... Okay, listen, that's even another reason to think this through because chances are on down the line you'll meet a Mrs. Tanner and she's going to have a different expectation of where she wants to live. So right now I'm with Rachel. I would focus on something smaller, something you can afford. You know, the rule of thumb that we go by is, of course, you want to have your three to six months emergency funds saved up and then you're saving a separate down payment.

No less than five percent. But if you can get it to 20 that's great and all in house taxes insurance hoa you don't want that payment to be any more than 25 of your take home and so that's what we're looking at if you can get a 15 year fixed rate that is amazing so that's kind of the standard that if we're saying like good better best that is the best way that you could possibly buy a home. And then above that is just you paying cash, right? Yeah, and Tanner, also remember too, just because of your season of life, from an age perspective,

that you wanna be in your house, I would say for at least five years, four to five years to get kind of the market, if you will. So there'll be some ups and downs or not really. I mean, yeah, and just you pay so there'll be some ups and downs um or not really i mean yeah and just you pay so much at closing to make sure that you kind of get enough equity built in that it makes sense so um are you in a pretty stable job do you think you'll be in the tampa area for the foreseeable unless something changes oh yes ma'am my job travel, but we're based out of Tampa.

Okay. I don't plan on leaving, and I'm hoping to get moved up soon. Okay, that's great. Yeah, well, I would do exactly, yeah, what Jade said. Start getting that emergency fund in place and then saving up a down payment. And, yeah, you never know where life takes you in your 20s. It's a wild decade of life. There's a lot that can happen. A lot of change.

But that's exciting, Tanner. And let me say this from all the single ladies that work with me here at Ramsey. They're always like, if they're going on a date with a guy, they're always like, he's a homeowner. Like, it's a commodity. It's a thing. It's hard to be a homeowner these days. And if you're a homeowner and a guy, it's extra points.

It just means you're very responsible. That is so good. I'll throw that out there for you, Tanner. Yeah, get after it, Tanner. And make sure to, if you want to go check out our real estate home base, you can go to ramseysolutions.com slash real estate. And we have great agents there. Ramsey Trusted Agents that can help you in the Tampa area when you decide to buy.

And also just some articles and podcasts, like just kind of start to learn up on this process of home ownership, because the more knowledge you have, the better. Rachel, let's talk briefly about that forever home deal, because I hear that a lot. And in his case, listen, his Tanner's heart is pure. Like he just, he's just a simple guy who just wants to settle down. But sometimes I hear that and it's almost like an excuse to spend more or kind of like push the push that barrier. Do you know what I mean? Yes. Because like this is my dream house.

We're never moving anywhere else. This is it. Uh-huh. Uh-huh. And you know, it's funny, even if it's not the quote unquote dream house and your sentiment isn't lifelong. I've had a lot of friends and their sentiment is, oh, yeah we'll be in here till at least the kids go to middle school. And it's a 10 year house, but then they get four years in

and they're like, oh gosh, the school's weren't what we thought. The house is a disaster. It's leaking. We're doing a repair. Like you just never know. So even, I mean, it is something that you kind of go in with like,

you know, this is a big investment. We're going to be as smart about it as possible. But also it don't feel like you're like crushing, crushing your dreams if you set out to think, like, oh, we're going to be in this for X amount of time. Life just changes. There's no way to know. Yes. There's no way to know.

It's a great point. It's a great point. All right. Real quick, let's go to Gregory as we finish out this hour of the Ramsey Show. And he's in Washington, D.C. Hey, Gregory. Welcome. Hey, Gregory. Welcome. Hey.

Hi, how are you guys? Can you hear me? Yes, we can. How can we help? Hi, good afternoon. And my name is Greg. I'm 26 years young. And I have a lot of credit card debt.

And on top of that, collections as well. So in total, I have $13,105 in credit card debt split between four different cards and $1760 with collections. My question is, should I pay the collections first or um should i try and attack the credit card with discover because they are um they're like giving me a lawsuit for attorney so i don't know which one i should be paying first well they're they're both they're almost equally important the discover one how much is it what are you on the hook balance wise 60? $6,031. Okay. And then just for clarity, the collections, it's $1,760. Is that what you told me? Correct.

Okay. So, oh, go ahead. Oh, sorry, Jada. How long has it been in collections? One, I have two in collections. One has been in collections for about a year and a half. And then the other one is in collections for around four months. Okay.

Do you have any money saved? Like $400, $500? I have $9 saved. So probably not. Okay. So what I would do, Gregory, is if you can, I would be getting an extra job. I mean, I would be working 80 hours a week getting any amount of money. Because the ones in collections, you're going gonna have a better time negotiating those down and depending how long they've been in, especially the one that's been in there a year and a half.

It's been probably sold four different times to four different companies. It's some guy in a cube and who knows where I mean, like it's just it is it is long gone and they will be more likely to settle with you super cheap so that would be probably my first goal um and then i mean i would tell discover i'm gonna be keeping my minimum payments but sorry guys i'll get to you when i get to you and listen they might sue you but you don't have anything they have nothing to take and so this that process it's really more at this stage it's likely more of a scare tactic so just there there after these collections, it's the next thing in your debt snowball. What's your income? What are you bringing in every month? Because you got $9 saved. Tell me real quick because we're about to head out. Right now I'm making 21 per hour, but it's more so part time. Okay, so there's your issue right there. And I think you know what we're going to tell you. You've got to get up to full time, a full time schedule, full time at 21 per

hour, you can get some things done. But let's find a way to get that income full-time, a full-time schedule. Full-time at 21 per hour, you can get some things done. But let's find a way to get that income up because that's really the key to this puzzle. Full-time and overtime. Greg, that's going to be your forever young, if you will. Use that young energy to be working. Thanks to all the guys in the booth. Jade, thank you for a great hour. And we'll see you guys at the Ramsey Network app.

If you are on radio, stay tuned and we will see you next hour. Live from Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and bestselling author, Jade Warshaw. And we are answering your questions about life and money, career, relationships, anything and everything. Just give us a call at 888-825-5225. And for all of you on the Ramsey Network app, hello to you. Those of you listening to the show, we're glad to have you. We're going to start off at this hour with John in Los Angeles. Hi, John. Welcome to the show. Yeah, thanks for having me. Absolutely. Yes. How can we help? Well, I have a kid, and I see that lightly, a kid. She's 16. And I think she's doing some amazing things and haven't been able to

figure out what we're doing wrong, how she can qualify or be awarded with a scholarship. She's, uh, she graduated with her associate's degree at 15 and she's currently at Cal Baptist University where she's going to be graduating next summer well in 26 so she'll be 17 with a bachelor's degree. Wow and so she's like graduated high school early did she do a homeschool program or how did how did that happen? So we went through Liberty University Online Academy, a concurrent enrollment program here with our local city college. And she graduated high school with a 4.89. She graduated community college with a 3.89. Wow. She's the youngest graduating student ever from our city college. And I don't say these things to be boastful.

I'm just saying. Yeah, it's true. So she, when she applies for scholarships, she's been, hasn't been awarded one yet. And so she started a business in order to pay for her tuition. She really didn't want us to pay for it. She thought she would be awarded a scholarship for sure, but she wasn't. So she's paying for her own tuition for Cal Baptist, which is $8,000 a semester.

Good. And so she's doing it. And then she's also investing outside of that in order to help further along her savings for school. So why isn't she? I'm just curious. I mean, she's because she's how old? 17? She's currently 16. 16. OK, John, y'all need to be. I I mean let me I'll just say this um she's 16 years old I appreciate her like vigor on wanting to pay for school herself but I would say John y'all are the parents and you can tell her no you're not like if you all have the money I would pay for it and just tell her sorry we're we're the parents we're not gonna unless you don't unless you guys don't have the money but at 16 years old I still see that as a parental.

She's smart. She's still a kid. She's just a smart kid. She's like Doogie Howser. You know what I mean? And she's taking on the responsibilities of a 20-something. But she's 16. It's just she's matured beyond her...

Yeah, her intelligence is beyond. Do you guys have the money that you can help her out with the 8K? We do. But her thought was when she finishes school, we can negotiate a car. So I'm okay with that. I'm okay with allowing her to pay her own way because her business actually does pay for the school more than in full. But it would be great to be able to see her retain these funds, because we read stories all the time where, and it's not to knock anyone,

but we see people get, students get awarded for less. Sure, yeah, yeah. And when you come in with such a resume of achievements, I'm not sure. Have you worked with like a guidance counselor or someone who could help you? In the application process? Yeah, because it might be something that she's doing or not doing that a professional could help you. It's almost like getting help making a resume, right? And making sure that it's all it can be.

Have you guys gone through any of those channels? We have. In fact, CBU said they gave her an option. They said, well, we can award you, it was approximately $12,000 as a scholarship for her grades. However, the only way she could use that scholarship funding was to be able to attend CBU in person. Well, she wanted to do it online. And by doing it online, they removed the $12,000 scholarship. And by doing it online, it's a third of the cost.

So there really is no scholarship award. Well, tell me this, though, John. She's able to pay for it through her business is what you told us. So why does she need the scholarship? I mean, I know it would be nice, but if her business is paying for it. Well, in all honesty, the reason is she's the first person in my family to ever go to college. I didn't make it myself. And to be able to see her have this level of success is truly amazing as a dad and sure yeah

humbled every day seeing her do this and yeah I honestly don't think she even needs a bachelor's degree based on where she's currently investing her money yeah what's her business right now what is she doing she sells stickers um and it's a lot of stickers yeah we're it's a lot of stickers. Yeah. It's a lot of merchandise that's for local products that's continuously grown, but she takes her money and she invests into with, with a local realtor that she has here through she,

she invests into homes that get slips into multiple properties and she gets a guaranteed return. Holy moly. So that helps further secure. But it's, it's, this is her goal is to be able to turn 18 and be able to have a large sum of cash.

Yeah. What a little boss. I know. Wow. I'll say this, John, this is like, and just a little bit of me is,

does she have fun in life? Is she like enjoying being 16? Yeah, absolutely. Okay, good, good. I mean, she's very involved in the church and youth groups. Oh, good. Okay, perfect. She's got a boyfriend.

Beautiful, perfect. The boyfriend is equally amazing. As motivated. He's very respectful and takes a great interest in what she does. Good for you guys. Well done. Ideas. Well done. Well done on the raising of her.

I mean, to be 16 and to be that accomplished, I think is just, that's incredible. And I think, too, with the balance, and we've heard some of this with parents, like kids, they're entrepreneurs and they're 17 starting a business and they want to graduate high school early to start, you know, and all this stuff is great. And it's incredible.

I mean, it is. Yeah. But also, you know, I always, you know, you get one childhood as well.

So I do want to make sure that like, there's a level of she's the way you said earlier, I think is spot on. I'm like, I don't want her feeling responsibility in the world as a 25 year old when she's 16. Yeah. There's appropriate,

you know, time and place for things. Again, not, not discrediting anything that she's doing because it's absolutely phenomenal yeah um but um but you are still the parent even though she's making a lot of money and paying for her school and stuff i don't know there's still a level there of of taking care of if you will i agree that's there but the scholarship side i i I don't know. Christina Ellis used to work with us and she, man, she killed it when it came to the scholarship game. And that was probably 10 years ago and I'm

sure things have changed. But you can check out some of, I don't know if Christina's currently doing some of that stuff around scholarships, but she definitely has content on the internet around it. So I would check her out because she's a phenomenal resource on these kind of things. So, but it sounds like she may only have a semester or two left. And honestly, if she's flipping houses at this stage and cash flow and stuff, I mean, I don't know.

It'd be nice to get some free money. That's for sure. But also, it's not the end of the world. She's not going into ZEP for it. That's true. Her plan's working. Thanks, John, for the call. welcome back to the ramsey show we're going to camera cameron sorry about that in columbia south carolina hi cameron welcome to the show hi how are you guys doing? Doing great. How can we help? Hi, so first of all, I'm 26 years old, and I'm right now on baby step two.

I just got gazelle intense this year after listening to you guys for a while. I'm going through a divorce right now, unfortunately as a repayment to the 20% down loan on the home that we bought together so that I can keep the home. Last year, at the end of the year, I took out a $35,000 loan that I probably shouldn't have in order to get a majority of the money. And I'm working on the remainder 15. My question is, should I roll that 15,000 as part of the debt snowball that I'm working right now? Or of the 42,000 I have in my 401k, should I take part of that and put it on and roll it into one of her accounts, whatever it would be, in order to help make this process a little bit quicker, especially since the divorce is supposed to be finalized, like I said, in about two months. So just to clarify, out of the 50K you've got to pay or you've got 15 left to go,

and you're trying to figure out how to get the money basically? Yeah, being in baby step two. Can I ask why you didn't? Because some of these divorce situations, you kind of, if you're forced to pay something by the settlement, you have to pay it. So what caused you not to take out the full 50 and just the 35? Did you have 15,000 on the side that you knew you could get, or you just thought, oh, I can cash flow this. If I worked extra, I'm just trying to get to your line of thinking. Well, so I've got another car, and at at the time I had a couple other credit cards that I thankfully just paid off. Um, but when I went to the bank, they told me that I could only qualify

for 35,000. I gotcha. Yep. That makes sense. So, who, um, so when you did it, keeping the house, is it going to be, what, what percentage of your income is it going to be? I'm just curious. So right now it's a little bit high. I bring home with overtime maxed out about $6,600 a month. And I pay just under $1,300, call it $1,300 a month from a mortgage. And that's with escrow and all. Okay, that's not bad okay if you weren't if you weren't working extra extra overtime um and you were just say you were debt-free and you

were just working your normal job what would what would you bring in um right about just a hair under four thousand dollars okay because the only thing that worries me Cameron is that just your um normal speed of just normalcy of working I understand working extra to get out of debt but just to stay afloat in life I don't want you to have to work extra to keep a mortgage that's right um so I wonder between now and you know two to three years if income, do you see it going up some? It should go up. I work, it's interesting, I work at a gold mine right now, and they don't give, they give raises, but not the best ones in the world.

Yeah, and $4,000 is not terrible. I mean, $13,000, you're a little over the 25%, but it's not terrible. So it would be doable, even if you got a $ you're a little over the 25 but it's not it's not terrible so it it would be doable even if you got you know without you know a 500 bump a month that's right yeah i i feel like you could figure a way to make this work i just wanted to see if it was worth saving first before we find the 15 000 um of course so is there anything you can sell? You said you had thought about your truck. Tell me more about that. So I have a motorcycle that I don't want to sell, but I could if I had to.

And I could probably get about ish $5,000 out of that. And then in part of the debt snowballs in my car, well, I don't actually need the car because I have another truck. And I'm wanting to pay that down or off either way just to be able to sell it. But I'm upside down by about $7,000 on it. And right now, that's the next payment in the debt snowball since I paid off some credit cards. If I give it about three to four months, I should have that paid down enough to sell it. Let me ask you, because I know every divorce is different, but sometimes there's a time frame that you get in order to make the payment. Were you given a

time frame? Because truly it was $50,000. So were you given a longer tail on this that you have to kind of get that money set up? Or is it March? So from what I was talking with my attorney about, he said that because right now the ex and her attorney are not looking at my 401k, he was trying to save that, and he said that there could be the potential of making payments to her, like more or less just kind of out-of-pocket payments to her, after paying her a lump sum if she agrees. Now, I already gave him this one offer a while ago. This was long before I actually got on the baby steps and um as it sits she has not given a response back as to whether or not she'll accept payments after a lump sum or not so that's kind of the area where I'm like I'm not sure but it sounds like I should be able to I don't kind of press it a little bit further I don't love the payments thing I feel like that would feel uh I don't love that I mean

I'm just trying to put myself in your shoes and I would not be wanting to pay a bank than the X feeling. Yeah. Yeah. I'd rather either just like you get a lump sum on this day and you get a lump sum on this day and it's done like that kind of thing as opposed to, and I'm paying you $500 a month for 10 years. Like that is the worst. Um, so I would not want to do that. I just if i were in your shoes i would want a date and say um i'd like to give you the lump sum of 30 you know 35 000 and then i'd like to the next amount the 15 000 is due on x y date i mean or honestly i mean i i would i would stretch your camera just to get this rolling quick with a little bit of urgency and say it's 40 000 because it's the

sale of the motorcycle. Oh, yeah, that's great, yeah. And then you have to come up with $10,000, and that feels way more doable. So again, it's a motorcycle's a motorcycle. I would get all of this in order and become debt-free, get an emergency fund, do it all, and then go get another motorcycle.

I mean, you're selling yours for $5,000, so you can buy one for $5,000. And by the time you get through all that, Cameron, you're going to be able to save $5,000 real quick to get your motorcycle. I mean, you're selling yours for five, so you can buy one for five. And by the time you get through all that, Cameron, you're going to be able to save $5,000 real quick to get your motorcycle, right? So I would do things in the present to fast forward this process and then come

back to the toys and all of that later in life because those can wait. But just having your sanity and a level of closure on it is worth it. It's worth it than a motorcycle. So cash flow that instead of touching any part of the 401k i would not touch the 401k yeah don't take the 401k just leave it and then you have the truck you said yeah the truck car situation you you know whatever is going to end up being better because you are underwater

on the one that you owe so kind of do some math and just figure out how much could you sell the other car for? Right now, Blue Book had about $8,000 in its current condition. And I owe $13,800 on it. But like I said, that's the next one. Do you have another one, though, did you say? I have a truck. And it's paid for? So here's the interesting part hear me out on this so i owe my dad but he's being very graceful it's not it's he owns it free

and clear and i'm i'm going to wind up paying him for it but he says because i'm going through this divorce and the debt-free journey i don't owe him anything right now he wants how much is it though how much you owe him i will wind up owing him sixteen thousand dollars for that okay uh to get that can you sell can you sell it again i do the i want you to figure out because you owe technically sixteen thousand on it i mean i know it's your dad and he's being kind but just in our head for math's sake you owe 16 and how much could you sell it for? Sorry, I know you just said that. Um, right now, if I'm lucky, I could probably get somewhere around, I don't know, 14 or 15 out of it. The only reason I'm a little bit more is just because of some work that he was helping out, helping me out with getting done to it. Okay.

Yeah, I mean, there's a sense that you could do that. Hold off on paying your dad off with that money. Take 10 of that. Pay ex-wife off. Be done with the divorce. You'll have $5,000 more without this car, and that $5,000 will be put to your debt snowball, and you just put that $16,000 in your debt snowball and keep going.

I'm just thinking of what's smart from an urgency life standpoint and then the math, right? I mean, it's kind of both you have to play out, Cameron. But you have some options here. So I would be writing some of this down. Do option one, option two, option three. Give yourself different scenarios and kind of go down to the bottom and see what feels right timeline and math wise. Hope that helps, Cameron. Thanks for the call. So one of the best things that you can do for your money is to get a really good tax pro in your corner that you can trust, because before we know it, tax season will be upon us and they can really help you advise the best moves to make for your situation, especially if you're in

a small business or you've had big life changes this year. So you can go to ramseysolutions.com slash taxpro to find CPAs and enrolled agents that have been vetted by the Ramsey team. Again, that's ramseysolutions.com slash taxpros. All right, up next, let's go to Terry in Las Vegas. Hi, Terry. Welcome to the show. Hi, ladies. How you doing? We are doing great. How can we help you today? Here's my question. I recently invested in, I've got a stockbroker. I'm trying to figure out, should I invest in money market funds more or should I invest in mutual funds? I got the large cap and small cap aggressive and all that. I mean, I'm just trying to figure out what is I should put my money in because I have a high yield savings is paying 4% and I'm putting extra

money in that also. So I'm not really sure where I should put my extra money. Sure. Okay. Where or how much extra money are we talking about here? Like, is it per month or? Yeah. How what I do is I I'll take minimum of three thirty three hundred thirty dollars a month to six hundred sixty a month. And I put that. So I'm just, you know, the four percent is great. But if I can make money in a mutual fund money market, I would rather do that. So, I mean, I'm trying to figure out what is I need. OK. And this is above and beyond your retirement, correct? You're funding 15% of your income into retirement right now? Oh, yeah. I paid my house, my car's paid off.

Okay, this is just extra money you have. Okay, so a money market account is basically going to be the same as a high yield saving. So it's not technically investing. It's just a better bulked up savings account. So yeah, I mean, Terry, if I were you, I mean, once my husband and I have done this, like we have our, you know, 401k and Roth IRAs, like all the retirement stuff. And then a few years ago, probably five or six years ago, we opened up a separate mutual fund. And if we had extra money that we were, we didn't really have any big thing in the foreseeable future because we had just got our house and everything. So we actually funded that mutual fund with extra cash and then i'll just give you our example and then we decided okay we're gonna do a pool so we're gonna use that cash and not invest

it we're gonna put it in a high yield savings account so we stopped investing in the mutual fund even though it's just sitting there and growing because we had a new goal that we needed cash so then we moved that money per month to save. And then now that this pool is done, we're kind of back. We just talked about this two weeks ago, right? Okay, well, let's go back to invest in the mutual fund. So if something if something comes up, like you need to replace a car or something, a purchase comes up, you can always, you know, move that savings, if you will, to something more short term to get to quicker. But if you don't really have that, and you're like, I just want money to be growing, then yeah, just sticking it in a mutual fund is a great idea.

What are your retirement nest eggs? Okay. Well, I've got my portfolio, stock portfolio. My house is paid off and it increased in value by $200,000. My car's paid off and all my credit cards will be paid off by the end of the year and they're all zero percent i you know they give you one of those deals so that's what i did i wasn't paying interest anymore so basically that's where i'm at i've got this portfolio i've got a guaranteed income of a month and that's where i go from there okay do you have do you have any roth funds or is all your stuff just traditional no you know i thought no i thought, no, I, um, I thought

about Roth. That's another thing that I was not sure what to invest in. Um, and you know, that's my confusion is where, where should I put, I want to put the money where it's going to make the most for me. It's going to make sense. I don't want to be penalized a lot of money. Uh, you understand? I do. I think that those are some questions i would ask um and because you want to know exactly how your money's invested and ultimately it's your choice not the stock broker he shouldn't be doing a bunch of things and then saying this is what i did be happy with it it really should be the opposite and you guys working together what the reason i asked that is because i'm thinking um well first how how old are you i. 58, because I'm thinking the time's going to come

when you're going to want to, A, there might be funds that you want to get into that are non-retirement, you know, ahead of time. And when you're in retirement, you know, you don't want to be pulling off a bunch of stuff that you're paying taxes for all the time. So I was just curious, like what that mix was. But to Rachel's point, it's great to have that kind of bridge money there

that's there for fun stuff and there if you needed it to supplement your income if you chose to stop working um sooner than later so yeah I would get with the Roth would be great okay but Terry I'm gonna go back a few steps because you said you have credit card debt that you're gonna pay off at the end of the year how much credit card debt do you have four thousand dollars how much I'm not a believer four thousand dollars I'm not a believer in charging kind of money. I can't do that. Okay. So I would pay, that would be my first goal. I would be putting this extra money and just paying it off. I would become debt free as quickly as possible. Cut up the credit cards. Yep. Just be done with it. That would be the first goal. And then above that, what we're talking

about is, yeah. And the Roth IRA too, can talk to your your financial advisor about but the Roth is great Terry because you can be putting seven thousand dollars and then with catch-up contributions even more at your age because that will grow tax-free now that will be money used after you've paid taxes so but you can put yeah I guess the catch-up would be what 8,500 maybe per year yeah I believe that's right so if you don't need the money until you know well I guess the catch up would be what, $8,500 maybe per year. Yeah, I believe that's right. So if you don't need the money until, you know, well, I guess you're saying, yeah, I mean, for the next two years, Terry, that would be or yeah, a year and a half. A Roth IRA would be another great option to put your money because that will grow tax free, which is great. But yeah, if I were you, I'd be digging in to find out where this exactly where this money lives and what type of funds they are.

I pretty much know which category you're in. But my concern, the only concern would be is he's been really good with me on this. The only thing that my concern is that he's only got $30,000 in my income fund versus the large cap and the small cap and then aggressive. That was my concern. So he's not doing an equal mix between the four funds is what you're saying? No. And that concerns me. I told him very specifically, and he'll go back and correct it if I need to. I don't like the 30, just 30.

I'd rather take that 49 that's in that large cap and take some of that and put it into the income. And it's because you're seeing better returns on the income? Is that what you're seeing? That's the reason? reason? Because here's the thing. I became disabled. I broke my back. So I became disabled. So my concern is I want to save as much money and make as much money as I can while I'm still, you know, that's my goal. Yes. So I want to put it wherever I need to. You know, sure. That's where my point is okay yeah that makes sense totally and this is a little bit of that balance of you know Terry it's your money so if that's

where you want it to go I just want to make sure you have the the knowledge of the why because if you're looking at something that's very obvious to you and you're like okay this one over here is making freaking 15 percent and the one over here in the large caps making six. Like what helped me up understand financial advisor, you know? And, and again, if you have someone that I'm saying this with a lot of trust, but has the moral grounds, the education, they, they know what they're doing and there's a reason why they're doing it, but you need to understand that. And if you still don't agree to Jade's point,

then put the money we have where you want to put it. But yeah, the reason we talk about those four different types of mutual funds is what she's referring to is, you know, those are it's diversifying within these investments. Right. So you're like diversified with diversification. It's what it feels like. But but it's good to spread your money around. And I appreciate she she has a she has a pulse on. She has a pulse on it. I want for people to know more, though, especially as they get closer to that age. You should know how much of your money is in traditional IRAs, how much of your money

is in Roth IRAs, how much of your money is in a 401k, what's coming from... You should know those numbers because the truth is, again, it's like good, better, best. If you've just been investing, I'm just proud that you've been investing. That's great, yes. But there's a point of it that's like, okay, there are ways to make your money work best for you. You know, if you're wanting to retire a little bit early and you need money there,

like there's so much to it that it's good to know exactly what's going on. And if you don't, work with somebody that can help you and help you understand. Yeah, and there's smart investor pros, you all in, you know, all over America. And you can check them out at RamseySolutions.com. But sitting down with, you know, certified financial planners that know what they're doing when it

comes to this investment world is huge. And we're actually having a full night when it comes to investing. So you can go to RamseySolutions.com slash events and check that out with George Campbell and Dave Ramsey, where we kind of dig into more of this investment side, the investing essentials. And yeah, because this is again, it's a big topic. And I will always say this, I think even more than real estates, taxes can be confusing for sure. But investing, again, there's just so many layers to it. You need to hear it a lot of times. Yes. And you just want to have a lot of security. And again, when you're having someone help you with it, you have to have that level of trust in yourself. You need to have that level of knowledge to feel confident of this person that's helping

you is doing it well. Right. I mean, it's just it's a lot of trust there. But but there's great people in this industry. There's some not great ones, but there are some great people that do this. So yeah, investing. What a topic. What a topic. This is The Ramsey Show. Our scripture of the day comes from Joshua 1.9. Have I not commanded you? Be strong and courageous. Do not be afraid. Do not be discouraged for the Lord God will be with you wherever you go. Sarah Blakely. I'm pretty 99% sure is founder of Spanx. Yes. Pretty sure that's her. That feels right. Do not be intimidated by what you don't know. That can be your greatest strength and ensure that you do some things differently than everyone else okay i love that there was no ring to it but it was still true you know sometimes quotes it like

they don't have a ring to it but it's still true i know yeah i was i watched something and i can't remember where i saw this but it was a clip and it was saying how the students in college especially like in a big lecture hall type class that actually have the courage to raise their hand and ask questions, show like on a scale, they have more confidence in life and they end up becoming more successful where a lot of people are like embarrassed

by what not knowing it, but it actually shows they have a level of self-awareness of like, oh, I don't know. And I don't care what people think if they think I'm dumb. I just, I want to learn and I want to know.

I love that. And what it is. So if you don't know, ask. Call the Ramsey show and ask. That's right. That's right. We'll help. We'll walk around together. All right. Let's go to Fran in Chicago, Illinois. Hi, Fran. Welcome to the show. Hi, Rachel and Jade. Hello. How are you doing? Good. Jade, I'm a sneaker girl, too. Hey. Thank you so much. Okay, so I'm going to try to go really quick.

My scenario is, so I have been binging Dave Ramsey materials since last year, maybe like December. And I paid all my credit cards off. It was about $17,000. Yeah, girl. Good for you. Thank you. And so I'm stuck with student loans and a bogus car loan and a personal loan. So I have about $25,000 in savings.

I get a bonus in, like, March. And I'm just trying to figure out how to, you know, this negative equity on my car out how to you know this negative equity on my car and how to navigate everything. Okay how much are how much do you have left on the student loans car loan and personal loan? So student loans is 76k. Okay. Car loan is 46k. Okay. And personal loan is 5,500. Okay and how how much do you make? What's your take-home pay every month? It comes out, I have child support and salary. So I make $145,000 a year after I stopped my investing. So I'm about like $9 like 9 500 a month and that's including the child

support yes how old are your kids uh just one just one kid how old 11 oh 11 okay so can you tell us okay so the car you owe 46 000 um if you were to sell it like if you looked up kelly blue book to see if you could sell it what would you get only 32 okay what kind of car is it just curious it's a lexus it's a lexus hybrid but um my credit cards um well my my credit score down a whole lot when I got the car. So I got a real bad interest rate. Oh, shoot. Okay. It's killing you, huh? Well, the good news is you do have some money saved

that you could get yourself out of this. 100%. I think that I would because in your situation, now usually we do kind of like that rule of thumb where it's like, you know, you shouldn't have more than half of your income going down and going down in value with things with motors in them you're at 145 like truthfully like do you know what i'm saying you could probably keep this around but with your other debts i feel like this could be a huge opportunity for you to

break loose um so if i were in your shoes i would consider getting out of that car and just taking the hit of the 14 000 since you've got some money saved and then i would take some more of that savings and buy yourself a little a little beater maybe yeah you'd have 11 000 left and if you kept a thousand for an emergency fund you have 10 000 left and then fran i'm gonna i'm gonna really stretch you here because i did this with king Coleman on the show yesterday, but we looked up some cars and you can get, you can get some cars. You can for a few thousand bucks. So what if just in dreaming, what if, you know, you got a five to $6,000 car and then basically use the rest of that money to pay off that personal loan. Yeah. So car loans gone, personal loans gone. And all that's left is that student loan. And with a crappy car, Fran,

you went from a Lexus to a crappy car car but then you only have that student loan left and then what are you going to get your bonus for march uh it should be it's usually 12 of my salary and it usually comes at the end of march okay what would it be how much i'm gonna get my calculator out. I never know. 12% of $145,000 is salary. Okay, so between $17,000 and $18,000. Oh, man. Come on. Let's go, Fran. And then look at that, Fran. You're already going down on the student loans.

I mean, for real. You can make some progress. It's going to be some hard decisions, Fran. It's going to be uncomfortable. It's not going to be fun. But man, just getting some progress. I just felt energy just seeing this. Yeah, because with that, then you're going to be, okay, $50,000 in student loans.

That's it. Once you put this bonus, you're only going to owe $50,000. And what if you're like, hey, I'm going to go crazy. I'm living on half of my income. I am just really cutting it back. And maybe you get some side hustles in order to really make that math work. But you'd be done with this in a little over a year. Yeah.

Okay. work but you'd be done with this in almost a little over a year yeah uh-huh okay so sell the car and then whatever's left i just have to pay that out the savings yep yep and then when i get my bonus start back with tackling the student loan and the credit and the personal law yeah and here's the thing and i kind of want to address this because i can hear people now who are listening you're telling her to go from 25 000,000 saved down to $1,000 saved and she's got a child at home? Yes. Because here's the thing. You just need that $1,000.

It's just that little cushion between you and life. And you have a great income. Truthfully, if something popped up that you had a flat tire, you could cash flow it. You could temporary pause the baby steps and cash flow any real emergency aside from the $1,000. So I 100%. And this would only be fran for you i mean honestly 10 to 12 months 10 to 12 months max and that's it if you side hustle it okay okay fran i need you to be more excited than this i'm taking notes as you guys it's hard it's hard it's not fun but man you you but you let me tell you though you have a lot of hope with these numbers I mean again not a comparative thing

but it's just true and we get people that are making 50,000 and they have 120,000 in student loans and they're you know what I mean like there's some harder hard situations Fran but yours is doable but like I see the lights there, and it's possible for Fran. You're going to feel it. You've been rolling up to work in a Lexus, and in a minute you're going to roll up in an old brown Camry. You know what that is, Fran, is the ego. And that ego plays so against us so often in life.

And I just saw a clip the other day of this, and I thought that was so good. Someone just said, if you can literally, which is very hard. I don't even know if it's humanly possible, the side of heaven. But if you can truly detach yourself from what people think of you. Superpower. I mean, you're not thinking much, but you know what I mean? Like it really does change the game, which I know is really difficult. But once you do it, like when you do it once in a major way,

it makes it so much easier for all the other. Does that make sense? Like for you to roll up in this old Camry that one time it's like ripping a bandaid off. Like you feel you'll feel it. But then after that, it gets easier and easier to just show up. Yes. And not give a what about what these people are saying. And Fran, you will be surprised what kind of cars you can buy.

Like these are not like, oh, I can't, you know, I got to roll down. I can't roll down my window because it's broken and it's two different colors. It's not even that bad of a car. Like you can look. Like, these are not like, oh, I can't, you know, I gotta roll down my window because it's broken and it's two different colors. It's not even that bad of a car. You can look pretty nice in one. Yeah, I mean, it's really not bad. It's really, really not when you look at it. So, it'll have some miles on it. But that's a taste of freedom, Fran.

It is a taste of freedom. Do you have some sneakers, Fran, that you can sell to? That's what I'm facing. That freedom because I'm old for the way I look. Wait, don't roll past what Rachel just said. After I said it, I'm scared of Fran. I don't know if I want to tell her that again.

She said, do you have some sneakers you can sell? Oh, no. Listen. I was hoping to get through the call. can't get the holy spirit friend that was the holy spirit i was like you may you may commit a couple couple of grand hit me on the dm i'm always in the market jade will buy them from you help you get your debt snowball rolling lightly used Lightly used. That is funny. So great, Fran. Oh, thanks for the call. So, so great.

Jade, great as always. So fun. Always fun being with you. Thanks to all the guys in the booth that make this show happen. And thank you, America. We'll be back. We're here every day, live in the studio with your calls, answering your questions. And remember to take control of your money and create a life you love.