The Ramsey Show - Break The Borrowing Cycle

Episode Date: September 25, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life and your money. From the Ramsey Network in the Fair One's Credit Union Studio. This is the Ramsey show. I'm Jade Warshaw. Next to me, Rachel Cruz,

we'll be taking your calls about life and money for the next hour or so. So if you want to get in, get in where you fit in. The number is triple 8-8-25-5-2-25. Rachel, you're ready to get into it? Oh, yeah. Let's do it, Jay. All right. Let's go to the line where we've got Ethan on line four.

What's going on, Ethan, from St. George, Utah. Hi, how are you guys doing? Doing all right. How can we help? Okay, so I've got a question. Me and my wife, we just got married at the beginning of May, and we moved past baby step one, and we're on baby step two. And we recently found out that she's expecting in late April, early May.

Oh, congratulations. And I was just, thank you. And I was just curious. I've got about $20,000 liquid cash, but I'm in about $62,000 in debt. I've got about $8,000 on a truck loan. And then I've got about $54,000 on a piece of property that we just signed on. And I was just curious, is it all right for me to keep like a $20,000 to $25,000 emergency fund temporarily? until the baby comes?

Absolutely. I mean, that's exactly what we would teach. We kind of call that stork mode over here, which is the idea there's baby coming, the stork's coming, you get it. And so there's some uncertainty during that time, and so financially to pause what you're doing on the baby steps and stack up money to prepare for that

is really the wisest choice, because the truth is there are a lot of unknowns. I mean, gosh, God willing, we hope that you go in, have the baby, there's no problems, no NICU stays, no extra expenses, but you never know what's around the bend and just have the money for that. I always like, Ethan, for people to have a good bead on what they're out-of-pocket maxes, what their deductible is. And I really feel like that's a fair amount to kind of have the goal of stacking up, getting ready for a baby. And then after the baby comes and everything's all good,

yeah, you can push play on the baby steps. Yeah, Ethan, how much money could you put away? way each month between now and then? So between me and my wife, we make about $90,000 to $100,000 a year, take home. And right now, we don't have to pay rent or anything. And we will start having the pay rent in either October or November. So realistically, we could put away $4,000 or $5,000 a month. Is that with rent? That is with rent. Okay. I don't know. Okay, Jay, tell me this, because we do talk about stork mode, but you already have $20,000, Ethan, in the bank.

You got an $8,000 truck, and then you have this piece of property. There's a part of me that I would keep the $20 grand if you want to bump it up next month to $25. And then I may work on selling the truck just because it's $8,000. And you guys have, I don't know, $4,000 coming in for the next eight months.

So there's a part of me that I'm like, you're going to have, gosh, $70,000 sitting. And, like, you'll have a lot in there. So part of me just says get the $8,000. Take care of that once you have your fully, your emergency fund funded where you want it to be before the baby. Yeah. Because normally people don't have this amount sitting there in baby step two, Ethan. You know, like when we talk about the baby steps, baby step one is $1,000.

Yeah, yeah, for sure. And then you throw everything else up the debt. So usually if people get pregnant and baby step two, they only have $1,000. So we're like, pause everything. You know, save up an emergency fund between now and then. But because you guys have that 20 grand sitting there. I don't know. There's a part of me that's say cash flow paying off the car by the end of the year. I think you should. Like I said, as long as you are covering what really could just be your out-of-pocket max, I think that you're good for the year.

I think that's a lot. And that's usually like 10 or 12, like I guess if you're insurance, depending on the quality of your insurance. But just check that. And then I love Rachel's plan. I think that's excellent. You can do a little bit of both and be covered both ways. Gotcha, for sure. Awesome. Well, thank you guys. Yep, absolutely. To actually answer my question, and I was just curious on that because I've listened to quite a few episodes and wasn't 100% clear on that, but I got my answer. Awesome. Well, thanks.

Good luck. Good luck with everything. Yes. As a new parent. So good. Thanks for the call. Drew is next in Minneapolis, Minnesota. Hey, Drew, how can Rachel and I help today?

Hi. How are you? Really good. What's up? I am curious to take care of your guys' perspective on what I should do with my house. So to give some context, I recently bought it. I moved in around the end of June. There have been some terrible, wicked gang violence in the area. So decided considering I'm getting married in a few months. And I did not want to bring my future wife into that home. Did you not know the area when you purchased it? Are you new to the area? How did that? Not well enough. Not well enough. So I will fully admit, like I did not do.

enough research as I should have to fully investigate that area. But yeah, I mean, some of those were pretty bad soon after I moved in. Sure. Yeah, I don't blame you. Yeah. Right. Yeah, I don't. So I put it back on the market. Currently, it's been on there for two weeks and there's been one showing, one open house, one person that came to the open house. So really two people have visited it in the last two weeks. I listed it for, well, I bought it for $268 with seller paid $7K, so $261, re put it on the market for $275. It's now listed at $268, so what I bought it for. My realtor and I were contemplating, you know, with the lack of interest in the home and the current market to, explore the option of buy down and or even other options such as renting or just dropping the

listing price. Well, let's, before we do that, I mean, it's only been on for two weeks, which is if you go to our real estate hub, Ramsey Solutions.com slash real estate, if we type in Minneapolis, Minnesota, we can see that like median days on market for your area is 39 days. and you're at 14 or 15. So you're not, there's no reason to panic just yet. But I do want to ask the question. The type of violence that was taking place was this like all over the news and everybody

knows it's your area? Or was this kind of isolated and just the folks around you know about it? He was on the news, yeah. Okay. So you feel like that specifically is impacting people wanting to purchase because now everybody knows like this is a bad neighborhood. I see what you mean. I don't know exactly if that would play into the disinterest in the home.

It's a great question. I haven't really considered that. Well, I don't know either. And I'm not suggesting that it is. I more so was asking you if you felt like it were. But yeah, 39 days is median. So I would say give it time, right, Rachel? And then there was shootings next to you.

So I'd give it an extra 20 on top of that. So give it, give it two months. You know what I mean? Just give it two months. And yeah, I would be a little bit more patient than jumping in because you probably don't want to rent it. Definitely not. Yeah. And then all these other programs get pretty messy.

So I would be patient. And if you want to move out in the meantime, you'd be paying rent and a mortgage. So I don't know if you want to do that. But you'll probably be fine. I mean, I don't know. I would think you're okay. I understand you don't want to bring a family there. So, yeah.

And check out our real estate agents, too, Drew. because our trusted real estate pros are like the top of every market are these real estate agents. They're amazing. And so maybe just talk to two of them and just kind of get some feels and see if they, if they know, because they're going to know the area, see what they think. Hey guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And health care is one of the biggest expenses in most family's budgets. And that is why I recommend that you check out Christian healthcare ministries. CHM isn't insurance. It's a health cost-sharing ministry. That means members help pay one another's medical bills, and they've been serving Christians since 1981. C-HM programs start at just $15 a month.

And here's why that matters. If you are paying more than you need to for health care, that money could be going toward paying off debt, building your emergency fund, or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all, a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit towards their first month of membership. Go to CHMinstries.org slash budget and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey.

All right, back to the phone lines we go. We've got Caleb, who's in Dallas, Texas. Hi, Caleb. You're on the line. Hey, thanks for having me on. Yeah, you bet. How can we help today? Yeah, some of my first job here out of college, and I just got a commission check today in my account for $12,000 for my first job here. Good for you.

And I have about a, thank you, I have about $34,000 in student loans that I'm trying to pay off by October of 2028. I have about $12,000 in savings as well. And I'm just curious how to attack these loans with that commission check. I want to put all of it towards my loans here. got a mix of the good Sally May ones and then government loans as well. Well, gosh, number one, congratulations on the commission. That's really, really great. You got the 12,000 saved.

If I were in your shoes, I would walk the baby steps, which is the plan that we teach. And the first three steps are the ones that I would focus on if I were in your shoes. The first one is we really just need a thousand saved while we have the debt around. So let's drop the 12,000 saved down to 1,000 and put the remaining 11,000 on the student loan and then let's take whatever you don't need from the commission check. So once your bills are paid and everything is cool with your budget, whatever margin is left over, let's also throw that at the $34,000 student loan. And my guess is you're going to be done with this well before October of 28.

Unless there's something that we're missing, like, are you still needing to pay for, are you still in school doing tuition? Is there anything else that's like eating up this $12,000 in commission that you're going to be earning? No, I don't believe so. I have my, I have a base salary as well. That totals up to about like 40,000 after taxes. And I've been using that to pay like my monthly rent and all that kind of thing,

groceries, et cetera. So I'm pretty set there. And for this commission check, yeah, I can pretty much go towards all those loans. There's like four of them that are government that are pretty low percentage interest rates. And that two that are private that are like 11.5% pretty high. So probably, I was going about putting all that down towards the highest interest rate ones, but I've also seen my advice to just tax those small ones and get those out of the way, too. Yeah, it's more efficient long-term to actually, which is weird because it goes against math,

but to pay off the smallest debt first. So if you list out all six, what would be your smallest? I'm just curious. Small one would be about $2,200. Okay. And then what's the next one? Yeah, $3,200. Okay. And the next one is about $3,500. Okay. And then $5,000. And then there's two of those private ones are 8,000 and 11,000. Okay. So what's great is you could knock three out by, you know, by when you get your commission check. Because you'll get that. You have 12,000 save.

So just knock the three little ones off. You may have some going towards that 5,000 and then start working down from there. So, yeah, it is actually more efficient just to get those out of the way because all those payments, those three payments now are freed up to then snowball on top of that 5,000. So you'll have even more momentum going in. Okay, I love it. And then just drop down the savings amount to as well as I can get it and just attack it with the rest of that as well. Exactly. Yep. That's it. You're going to be out in no time. Yeah, well done. Well done. Yeah, I appreciate it. No, thank you. Yeah. It's tough to make a decision, but I guess I've got to go for it. I got to go in the past. I got to go in the past and pay it off this debt because you get a $12,000 commission and you've worked hard for it. And then you're like, I feel like I got to go, I got to work on my mistakes in the back. I got to go in the past and pay it off to. enjoy your future. But the great thing is you'll look up. I promise you, Caleb, gosh, in 12 months,

and you're going to be completely up for you, you have a fully funded emergency fund, and you start getting those checks after being a year and commission rolls, too. Man, you keep, oh, my gosh, you're going to, and there's going to be no payments. And you literally have your whole income to give and invest and keep moving through. So that's awesome. Yeah. And two, highlighting, I mean, there's that side, what you just said, Rachel, of not being able to live in your income because of the mistakes. But then there's the, he's got to turn around and drain the 12,000 of savings. And a lot of people feel a connection to that.

That's right. Yes. And it makes you feel like you're going backwards. You know what you mean? Right. One sense of the word. But man, when you don't have those payments, because we say it all the time, but it's true, your largest wealth building tools, your income.

And when your income's all yours and it's not going out to six different loans every month, it's amazing what happens when you actually start earning interest. And you start investing that money instead of paying student loan companies, you know, Sally May and the government and paying interest on those. And I also think of it, you know, when you've got this cushion of savings, he's got 12,000. We talked to people, gosh, with even more 20 or 30,000 and we're asking them to drain it down. It's kind of like if you've ever lost weight. Yes. And after the fact, you're like, gosh, I didn't realize like how I felt when I had this on me.

But now when I lose the weight of the debt, I feel so much better. So much lighter. And then like it's 10 pounds. If you go pick up a 10 pound weight, you're got like, oh my God, this is so heavy. I can't believe this was on my body. Yes. Carrying it. And so it really is, we've never had people take their money, pay off their debt, and then go, gosh, I wish I had never done that.

That's right. And so it's worth it every time. Let's go to Elizabeth, who's in Scranton, Pennsylvania. What's going on, Elizabeth? Hi. Yeah. So my husband and I are just trying to figure out, it seems like we can never, quite make it to the next paycheck. I do budgeting. Like I handle all of our finances, so I do all the

budgeting, and it just seems like it just never, I don't know what we're doing wrong. Okay. How much are you guys bringing in? How much hits your account every month, income-wise? Every month is about 80, about 8,000. 8,000. How much are your expenses? Okay, so this is part of the problem here. The expenses, is not including like food our food budget which I know it should that should be top of the list but not including that our regular basic expenses are about 7,069 what are you all paying what's what's your mortgage um mortgage is is 550 i mean it's like everything it's just everything is like skyrocket mortgage is 550 a month which is nothing i know oh yeah that's great okay yeah we got in with three point four percent interest so we're we're great with yeah that's great okay um yeah

And then there's just all the other basic living things, like electric insurance. Do you have daycare? Do you have kids in daycare? No, I don't work. I'm a state home mom. Well, there's got to be something. $6,500 going. Yeah, I mean, there's a lot.

It's like our house and car. My husband is technically considered self-employed. So we have liability insurance, house insurance, car insurance on three cars. That's $660 a month. Is the third car part of his business? No, it's my son. car. My oldest son who's in college. So what's the total of car insurance and gas? What is that total? On all three. I have, it's all like together on the policy. What's it total? That's 660 a month,

not including the gas. The gas I put in our, you know, kind of a food. So again, we're at like 11 or 1,200. We've still got thousands of dollars to account for. And you said that's not even including food. Usually food is one of the bigger ones. So there's got to be something in here that's what I'm just going to say out of the usual or sloppiness. Yeah, I'm trying to figure out. Are you guys just spending or? We're really not. I mean, we're not big spenders. So we do, we tie. So that's $600 a month. Our heat, we put aside $300 a month taxes for the house. Our houses are taxes are not escrow to $600 a month. Our electric bill is $500 a month. Life insurance, $220.2.2. a month. That's a little high. The life insurance. One of the policies is a, yes, they are term

policies. One of them is a return of premium policy. So that's why it's a little higher, I think. Interesting. Okay. I mean, so everything is kind of like $5, $600 and there's no debt. Do you guys have debt payments? We do have, we have two credit cards. One has just over $2,000. One has about $1,500. And then we have a car loan that's at $1,900. $1,900? Oh, no, I'm sorry, $19,000. Sorry. $19,000.

What do you pay a month for that? The car is $384 is the minimum. It's the auto pay the $1,400 credit card. I'm trying to pay $800 a month on that just to get it done. So it sounds like there's a lot of ankle biters. What I would do, do you guys have every dollar? Yes. What I would do tonight, I would go through every dollar,

and I would just look at everything and say, is this a necessity? Do we need this? And do we need it to this extent? Like if it's something you're paying $600 on, do we need to be spending $600 on this activity? Because at $8,000 a month, I have to believe and your mortgage is such a small percentage. There's no one in daycare. Those are the big ticket items. If there's insurance, that's probably the biggest one if you guys are self-employed. But again, for you, that would be taking the place of something like daycare realistically. So I think there's just a lot of items that you can scale back and find some margin, you need to be a detective and figure out what the problem is. But go in there knowing that there's a solution. Don't tell yourself there's

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So go to Ramsey Solutions.com slash coverage to find the type of insurance that you're looking for and connect with a Ramsey trusted agent to help you do it. All right. We've got Cordell who's in Little Rock, Arkansas up next. Hi, Cordell. How can Rachel and I help you? today. Hi, guys.

Thanks for taking a call. You bet. What's up? So a little back history, back in 21, I saw the show, and me and my wife were married in 21, and had debts kind of just caught fire. I was like, well, I can be a millionaire by the time I'm 50. So I had a very nice truck at the time, sold it, got $30,000 cash off it, paid her vehicle off.

She had co-signed for someone else's vehicle, before, paid that off, paid her credit card off, cut it up in front of her, which was a heartbreaking thing, but we both decided to do it. With that week, paid off our cell phone just to eliminate every debt we could. That was in 21? Yes, ma'am. Okay. And this is a truck that we don't have kids yet, but I was like, one day I'll give it to him.

Oh, wow. It just meant a lot to me. So we've been budgeting going through. And our second year of marriage, she wanted to go to nursing school, go back. And we paid as we went, got her through that. She's a registered nurse now. And then she, her car went to put. And as a gift for graduating, passing her inclex, everything she needed to do,

she wanted a Denali, which probably wasn't the smartest idea. Because you didn't pay cash? Did not pay cash. At the time, I want to celebrate getting a possibly a $90,000 job with a $90,000 car. Can you walk me through, like, Rachel, can you walk Rachel and I through that cord out? Because you're sitting here telling me what a struggle it was and what a sacrifice

it was for you to sell that truck to pay off all that debt. How in the world did you get to there, from there, to like, yeah, like 80 or 90 on a Denali feels right. So really, I think I just gave in to her. And I had about 20 grand in cash sitting there. And I was like, this is your dream car. She's going to be making good money. I make pretty good money.

We'll have no problem paying it. And then, you know, we're already paying a thousand extra on our mortgage a month. We can afford this. Okay. So you got it. What did you end up spending legitimately? $68,000 and 040 on it right now. Okay, so you 040.

Yes, ma'am. What else? So the only other thing I have is my mortgage and right now $120 on it. My dilemma is we've worked really hard at saving money and right now I have $6,400 in my checking. I put $10,000 on my emergency fund. I just put $10,000 and a CD. I can pull it at any time, but just so we don't touch it. And then I've really been wanting to get a truck.

And so I went on the road this year. And from April to August, I saved up $75,000. Okay. And now I'm at the dilemma. Do I buy my truck? Well, wait. Where's her money? Where's her?

You just gave me all your numbers. What is she making as a nurse? So she makes about 75 a year as a nurse before taxes. and I make 110 before taxes. So 185 a year combined. And I'm not trying to poke holes in what you're doing. I'm just saying you saved up $75,000 for a car, but there's only $10,000 in the emergency fund?

Yes, ma'am. So this year, the 75, that was an extra. That's added on to my annual. That's just, it was like a bonus. I did that in five months. I had to travel around the U.S. to do that work. No, and I commend you for saving up the money. I'm just saying, don't you think it's strange that you're earmarking more for this truck

versus stacking up a proper emergency fund? What kind of truck do you want? It's a Denali ultimate. I like your cars. Gosh, I mean, Cordell... It's not bad. Like, having a nice car's not bad. It's not, but I'm struggling with the mindset.

Yes, your priorities are kind of all out of whack a little bit. And see, I guess that's my wife is encouraging me. She's like, I know you haven't had a truck in four years, which I have a couple truck. Hasn't had a truck in four years. I'm so sorry. I'm just kidding. If George was here, sorry. I'm not sorry.

George was here. He'd be a lot meaner. Truck guys. Yeah. But wait a sake. Is the problem, tell us the real problem. Because first off, it was like, man, we owe $40,000 on my wife's Denali. Now we're over here.

You're trying to do yours in cash, it sounds like, which is fine. But don't you want to get out of the current debt first? Absolutely. So when I say I was on fire about it to get out of debt, I had to sit it down, put the numbers in front of her to see it. And I was like, hey, if we pay an extra grant on our mortgage every month, you know, we'll save 70 grand at the end of interest and this and that. And so I guess I feel, she's encouraging me to get my truck.

I feel guilt. Well, hey, can I ask this, Cordell? Is it a brand new truck? Is it going to cost you $75,000? They're about $90,000. I knew it. Okay, so listen, you'll have too much car. You make $185.

These two cars combined are going to be about what you make a year. Yeah. So you guys can't, you have champagne taste and beer pocketbook. Can I say your pocketback with 168 a year? Because it's good income. But you can't afford this. This is out of, this is, I'll be honest. This is classic middle class America right here.

This is it, though. For real, for real. Is that you want the nice truck, the brand new thing, and you make good money, but you would rather have a depreciating asset going down in value because it feels good. then actually prioritizing your financial life, which would look like getting out of debt, having cash savings in the bank, investing for your retirement. And then what we have left, we can figure out what to do.

And we're going to buy a used car because you guys are not net worth millionaires. And so you have to look at these cars that the function is, it's not your identity. It's not who you are. It is to get you to point A to point B. And if you're making a ton of money and you can afford that, that's great. We're not mad at it, but it has to be in a reasonable sense. And you guys are just out of reason. Well, and Cordell, I'm looking at this going, I just wanted to be worth your time because you sat and painted a picture that I felt, which is, man, you guys really sacrificed in 2021 to win.

Like, you cut it deep in order to do that. And if you go forward with this, you're taking all of the air out of that. Like you're taking all of the meaning out of that sacrifice and you're going back to square one. And so all that sacrifice will have been meaningless because now we're just back in debt again. And I said it yesterday on the show and I'll say it again. When you choose this path, the very first step that you have to take before you even start the baby steps is you have to draw that line in the sand and say, I'm doing this because I'm not a person who borrows money anymore. I'm not a person who does that. And so you guys stepped over your own line when you did her car.

And now you're stepping over another principle of the plan that you say you want to work when you do what Rachel said. And it's like you're buying more car basically than your income can afford. So I'm more in the, I'm trying to protect you and your wife because you guys have worked so hard. And I think I don't know, but what I'm sensing is like in our city and our town, we're like killing it. And we got these cars and there's like a facade that's attached to this. and I think that you guys are starting to play into that. And I think you have to be really careful and you're feeling like, I have a good job, she has a good job,

we deserve to have this. And I just want to remind you that I actually think that you deserve a life of peace with no payments. I think that you deserve to have the comfort and security of a fully funded emergency fund. I think you deserve the feeling of actually working hard and it meaning something at the end of the day, not just shiny vehicles.

And not letting your emotions drive you. I mean, you know, children do what feels good. Man. Adults devise a plan and follow it. And so following a smart financial plan is going to help you long term more than a Donali will. Talk that talk. This show is sponsored by BetterHelp. I know a lot of you out there are trying to keep it together all the time. You show up to work, you pay the bills, you smile at the right times, but then no one sees you snap at your spouse.

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We've got Colin in Boston, Massachusetts. Hey, Colin, how can we help out today? Hey, guys. Thank you for taking my call. No problem. What's up? So I'm a 26-year-old from Massachusetts, and I bought a bachelor pad condo two years ago

and recently got married. And my wife and I we're looking to see if it's feasible to get a house next year without going a house broke and if you guys can provide some financial planning for us gosh i love that question um congratulations um you're thinking about doing the house the first thing i want to know about is your financial situation do you guys have debt do you have savings tell us a little about that yeah so um you owe about 228, $228,000 on the condo,

and there's about $84,000 in equity on that. And the only other debt that we have is $8,000 on her car, which we're going to pay off, you know, in the next month. Okay. And then on top of that, I have money in a high-yield savings just kind of sitting there. And I guess I'm wondering if it makes sense to just put that money directly towards the mortgage and build up more equity.

How much is in there? There's about 40 in high-year savings, and I also have three to six months in emergency savings, too. How much is that? Separate than that? Yeah. Oh, good. Okay. And how much is the three to six months?

We'll call it about 15. 15,000, and that's three months or six months? I'd give it That's about four and a half Okay sweet What what price home are you guys looking at Or in your area What would it be?

Yeah And Massachusetts is pretty expensive I mean a house That we would get is probably around 500,000 Okay Yeah and median listing price by the way In Boston And I don't know if you're in Boston proper

Or if you're like out in the outskirts But for Boston it's 1.2 million is the median listing price So it's you're not wrong when you say it's expensive. How far out are you guys? About 20 miles. Okay, so you're not far out. All right. So if I'm running your numbers on our

mortgage calculator and anyone that's interested, you can go to Ramsey Solutions.com and do that. Okay, it's looking like it's going to be about $4,300 for your mortgage payment. And how much do you guys bring home a month? That's around

5,000 take home. Okay. So now this is where we kind of get into the tough part because, I mean, you said it right and I think you have the right idea. You don't want to be house poor. You want to go into this with your home being a blessing and not a burden, which is what we teach. And so it's going to be really important for you to make sure that this payment when you do buy a house is no more than 25% of your take home pay. Yeah. So how much? And the condo you said you guys have $84,000 of equity, but how much is it worth? The Zillow estimate is like $1,000, sorry, 318. 318, okay, okay. Yeah, I mean, honestly, Colin, I would stay put where you are. Keep paying down, you know, get this car paid off. I would keep, you know, working to pay down the mortgage so that your equity continues to build up.

And unless you guys can find something cheaper, but, I mean, honestly, I know it's going to be difficult. You just have to, in order. to own a home, sadly, in that area, you just have to make a ton and it may not be feasible in the next couple of years until your income goes up to get something that's worth purchasing, right? So you do have to buy a lot of patience in this process. Yeah, which is not fun. What are your careers? I do marketing for a general contractor here. And I don't know if you're going to like to hear this or not, She went down to part-time now once we got married.

Okay. Because of a child? It's been working for us. Sorry, say that again. Because of a baby or just because? Just for life choices. And, you know, we're falling into our biblical roles here. And, you know, it was just the job that she's in, she works at a tax firm.

and, you know, a tax season gets extensive with overtime. And on top of the overtime, she was planning our wedding. And so that got extensive. And so her job was able to allow her to go down to part-time. Yeah. So bringing home $50,000 a year in Boston, you're probably not going to be a homeowner doing that. So you can't really, you know, have your cake and eat at two, you know, having her work part-time and having a realistic expectation of owning a home.

So that's, that's just, that's the reality. Now, if she was making 50, you're making 50, then you're up to, you know. Now we can start talking. Then we can, or yeah, like if she brings home 5,000, you're bringing home 5,000, that's 10,000 a month. And I'm like, okay, all right, let's see if we can get something, you know, in the 3,000. I don't know.

And then you have some more money saved. And, you know, then it really starts moving the numbers. But what's keeping you in such an expensive area? I mean, it sounds like the nature of your jobs, you could do something like. that in a less expensive area where you could have more of what you're looking for, which is wife working part-time, you working full-time, and a home. You know what I'm saying? Yeah.

I guess my job is based out of Massachusetts. And so that's the reason why we're staying here. We don't want to stay here long term, but for the short term, it makes sense for us to stay here. But I'm saying the nature of the type of work you're doing, could you do that? elsewhere. Obviously, you're working in that area now, but could you do that in another area? Yeah, for another employer, I could. That's what I'd be thinking about. And I'm not saying that you have to make that move immediately, but I am saying that what Rachel said, which is we need to sit down and talk,

you and your wife, about our values and what we truly want our life to look like, not just for the moment, but even long term. And if we start seeing things long term that we can't do where we are today, then we have to start making a plan for what that will look like as we go through life. If we say, gosh, we really want to be homeowners. That's important to us. Well, we might not have to do it this year or next year. But eventually knowing we want that and knowing the kind of trajectory for our income and knowing that we live in Boston, well, gosh, we need to start thinking about a plan for what that means for us.

And if we can't do it in this area, what would be the plan for us to do that in another area? Okay, we have to look for different jobs in different areas. Well, and I'll throw this out, Colin, not to project on you, but because of your earlier comment, I'm going to assume we, you have babies, she's not going to work. So that means it will be your income dependent upon when you buy this house. And the house is long term. So if you guys are wanting a child in the near future in the next three to four years, you have to do the math then based on your income and what that's going to be too. So remember that because people get that, that is a, that's a hard place that when people buy a home on two incomes and then they start a family and one of them

wants to stay home with the kids, which is a wonderful thing. But when that happens, then suddenly that income leaves and the lifestyle that you've chosen is usually based on two incomes. That's why even doing all of this pretty conservatively gives you, gives you more options. And we see that a lot. That's a very, very good point that you make, Rachel. When you're buying a home, a couple of things to consider, we tend to talk about it from the monetary perspective, because it is usually one of the biggest investments you'll make. And we're always saying, hey, 15-year fixed-rate mortgage, that's the best way to buy a house. As far as if you're going to take out a loan, of course, we want it to be no more than 25% of

your take-home pay. We hit on that. Take-home pay just after tax, not after insurance and investing, just after tax. But a really smart part of that that Rachel mentioned is you have to think about the long-term. And if you can think ahead of time and go, in the future, we know we're only going to have one working spouse, making sure the house that you buy today meets that parameter, one income. And you can run those numbers and see. Yeah, or be comfortable because we've had friends like this. We were actually talking about some friends that lived in Nashville. And it was a

nicer, you know, priced home. And one of them ended up staying home. She ended up staying home after they had kids. And they just knew when that happens, we're going to move homes. And we're going to move to a different area, not only for family, but just also, you know, for the environment, but also to probably get a smaller place. Yes. Because we know we'll only have one income. So it wasn't a surprise. Yes. So there. There's like a forethought in this adult-like planning that is, yeah, that's very important. So, yeah. You said adult-like planning.

It's adult. It's a hundred percent. It's adulting. It's adulting at its finest. And you know what, Jade? I do. I'm going to throw it out there. Put it.

The Proverbs 31 woman. She works eagerly and is business-minded too. So. My dog. And this is why. You know, I think it's, I think it all, it all belongs to. So, Colin, you guys push hard for the life you want, but be wise when it comes. comes to the money.

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Fairwinds Credit Union Studio. I'm Jade. This is Rachel. And we've got Jack who's in Houston, Texas. Hey, Jack. How can we help out today? Hey, thank you for taking my call. A little bit worried about asking this question after the Benali question. The Denali debacle. We're not mad at nice cars. Just remember that. Yes. You have a clean slate.

Okay, that's great. Well, I specifically wanted to ask you guys this question because I know how tough you guys are about spending money on depreciating assets like cars. But that's exactly the kind of feedback I need before I convince myself that, you know, buying this car is a good idea. But so I'm just trying to figure out if I can responsibly purchase an $80,000 sports car. Ooh. It would be a car kind of just for the weekend. And then I would like to keep my current cars as Bailey's. But, yeah.

How much are they worth the other two? Okay, so I drive a 20. 2020 the NW M340I. I purchased it about three years ago for $50,000 at the door. Okay. And then my wife drives a 2020 Tesla Model Y that we got a family deal on. And that was, we only spent about $18,000 on that. Okay.

Nice. Perfect. And then we have a third car that I kind of drive. It was basically my wife's old card that we ended up keeping because it wasn't really worth that much, but it still worked. So I tried it here and there. Okay. And what's that worth?

Anything notable? Maybe like 4,000 or 5,000. Okay. Okay. And how much do you guys make a year? So I make about 175 a year, and my wife makes about 70,000. So around 245 combined, including 401K matches and average bonus. Okay.

Mm-hmm. So following our parameters, we're kind of of the mind, hey, if you're making 245, no more than half of that. So 122 in cars would be kind of where you'd be sitting. Is it fair to say you're about 72 now? 135 with this new car is what I would say probably, right? Yeah. So, I mean, if you go by what I could sell the cars for today. Yeah, yeah, yeah.

It would be less than that, but what I've spent on it. Yeah, that's great. Yeah, I mean, you'll be right at that, depending on what they're all worth now, right at that 122, I would say. Yeah. A little bit, yeah, give or take, it's not going to be anything that we would split hairs over. I don't think. But the question is, do you have the 80,000 saved and ready to go?

Yes. So I guess in terms of like cash, no, but I could sell some stock to cover the cost so I could buy them in cash. And half of the dilemma is, you know, obviously I could use this money on probably something a lot better of an investment. We've been considering doing a garage apartment and the back of our property.

But that would be around. 150 grand and obviously we'd be able to rent that out and and they would appreciate over time. Is that what the stocks were for initially? Like when you when you guys have sat and looked at, oh gosh, we have this much money in stocks, were you thinking, oh, this garage apartment? And then suddenly now here, you're like, well, maybe I can get a sports car. No, yeah, not really. I would have enough to do both, but I, you know,

It's more so a matter of like... Can I ask you a question, Jack? What? Okay, if $80,000 disappeared from your accounts, I don't care where they are, stock, anything but retirement. I don't care if that's bank accounts, CDs, stock, high yield, wherever 80,000 could be. If that just disappeared tomorrow and you looked in your accounts and 80,000 was gone, would you notice? Like, would you feel it? Or no?

I think, I don't know. Maybe just the way I've been raised, I feel like no matter how much money I had, I would always feel it. Okay. How much do you have in savings, non-retirement? Non-retirement, including house equity would be. No, not house equity. Cash. What do you have in savings? Just cash. In stock. In stock. About. In stock. About one point, one point two.

Oh. No. One point two. And that does not include retirement. That does not include retirement. And does not include equity in the home. And does not. Oh, Jack, you're doing.

This is a nothing burger. Well, yeah, you shouldn't feel 80,000 out of 1.2 million, Jack? Yeah. Gosh, I thought you were, I should ask this from the beginning. I know, both of us. Buried the lead. Yeah. This is what Ken Coleman.

would have said is a nothing burger. Okay. There's nothing to discuss other than you getting this car. And what color? Yes, you can afford this car, Jack. I would like black ones. Yeah. I guess it's mainly like the dilemma of I could use that for the garage apartment

that would generate more income. So here's the thing with money, especially when you get to this point, where you are, where you, you know, where you are financially. for the rest of your life, there's going to be opportunity costs. Okay. When you get above that idea of like, hey, once you're debt-free, you have a fully funded emergency fund, you're funding retirement, and then you actually start putting some money away on the side beyond that 15% of retirement.

And even once the house is paid it, right? Like you start actually generating a lot of savings. Your entire life from then on out will be an opportunity cost. And so here's the thing. You cannot live in that mindset at this point. Now, the only guy has to live in that mindset. He does. That's where he's at financially.

But to the point that you have this amount of money, for the rest of your life, it's like, well, we could go on this nice vacation and spend 20 grand, but also we could invest that. Everything doesn't have to be an investment. That's right. So everything will always have that opportunity cost. So you kind of have to get over that. Yes, you are going to spend things for just pure enjoyments. And that it is what it is.

So as long as you are giving, you are saving, which you obviously are. And you need to be spending some. You need to be living life and enjoying it with some of this hard-earned money and not just hoard it. So there is a release that's actually a healthy thing when it comes to the part of spending. So, yep, we are, I'm a green light, Jade. Yes. And I'm a green light too. And Jack, just know every time you open the conversation, start with the $1.2 million.

When you're calling a financial show, I have $1.2 million saved. I'd like to buy an $80,000 car. Yeah, well done. Really, really great. Are you guys completely debt-free? You said equity on the home. Is it paid off? Yes.

So, I mean, I fully am aware that the situation I'm in was, I'm very blessed that my family was able to kind of help me get on my feet when I first started my professional jobs out of college. And I've just been able to very aggressively save. Yeah, it's awesome. Well, done. Jack. You've done a great, great job. So yeah, you enjoy that sports car, do some date nights. Yeah, man. Take your wife out. Yeah, enjoy. Have fun. Hey, I want to talk to you for a second about love and not love like in Titanic or something.

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Good. What's up? I am struggling with the question. I'm a young entrepreneur. I am currently junior in college making my way through. However, I kind of found success in my business early. I started it after I graduated high school. I'm currently making $130,000 a year.

Same with my business partner as well. Good for you. Richard. What are you doing? Yes. So I do affiliate marketing. So basically I just promote products and then promote those on social media and then people see those products and they buy it and then I get a small commission. Good for you.

Absolutely. And you're a junior in college doing this. I am, yes. That's amazing. Well, what are you studying in college? Seems like you got it on luck. Yeah, I'm doing business management. Okay, good for you.

Good for you. Man. Okay, so, sorry, I interrupted you, but I was just curious. What's your question? Yeah. So my question is I've been finding it harder and harder as I'm going through each semester of college to kind of stay on top of schoolwork and focus. I don't have any debt with college as my mother works at the university so I get a discount there of 50%. So that's a very big draw to stay in.

But I'm also like wanting to focus my efforts on, you know, I have another kind of business I'm wanting to do as well on top of doing the support. oh, this is the one I'm doing now. And I'm just like, would it be worth it to stay, like, push through school or, I guess, do school less? Maybe just an associate's degree. I only have a car payment that I'm going to have paid off in around nine months. So I'm not really, I don't have any debt. And I am very good at investing. So in the two years I've done this, I have about $51,000 investment portfolios that are,

not retirement. In my retirement accounts, I have about $35,000. Good for you. Roth and... How much do you have in your car? How much do you owe? Yeah, so I just bought a Toyota 4-Runner. That was kind of my dream car. I've always wanted it. And I've saved up for about six months, and I put about half down. So currently, I owe $16,000 on that car. Okay, let's pay that off. Other than that, though, gosh, you're... really killing it. I'm really, really proud of you. A lot of people, I mean, you're accomplishing so much in just a short period of time. I think the two things that stand out to me was,

what Rachel said was, let's pay off the car. I think you did, you could have gone really crazy on this and I think you tried to exercise like some reasonable, like, reasonability on it. And I'm glad that you did that. But I'd like to crank that even more and just say, hey, a guy in your position doesn't need to borrow money. And let's just let that be your lifestyle. My guess is that you built your business without debt and let's just go through life without debt. You make a lot of money. You don't need to be slave to any lender. So that's thing one.

And I wondered about the degree. So you get the 50% off because your mom works at the university. The part that I see is how much are you, what's the other 50% that you're paying? Like how much do you have to pay in tuition? And I'd be weighing that out with the idea of, okay, like, realistically, what do I see myself doing? Do I feel like I need this degree? Because you're very entrepreneurial and college is not necessarily a necessity for everyone. And that level of education and that type of education is not necessarily a necessity for everyone. Yes. Are you,

do you have two more years left, Richard? I do. So I'm in my junior year just started. I kind of took less credit hours this semester to work a little more. But like I said, I just find it really hard to focus on school when I'm like when I plan when I graduate and get my degree just to go back and work full time for myself, which is, you know, it puts getting a degree hard to do. I'm paying probably about $4,000 a semester for school. That's with the discount included. Do you feel like you're learning anything or do you feel like you're like, I already know that, like I already am doing this?

Um, there's some things I've learned, uh, but I just not really. Okay. I'm kind of sitting in classes falling asleep. Yeah. Okay. I may have a different take. Tell me. I would finish.

I think you are, because you're how old? You're 19? I'm 21. 21. Oh, sorry, 21. You're 21. You have your entire life, your entire life to build businesses, make money, get in there. You're already halfway done.

If this was your first semester, I might change my mind. You're halfway done. And I'll be honest, too, there's a little bit of me. Because I mean, we play in that world just a little bit. And it's ever changing, right? So what the world looks like with affiliate marketing today, we don't know. Maybe it gets bigger.

Maybe AI takes everyone out. I mean, like genuinely, we don't know. We don't know. And there's something to me, especially when it comes to business management, to have something that it's not that you fall back on your degree by any means. I know a lot of people don't even use their degree. But it's like that extra step that you took. You finished what you started.

It's not costing you a ton. It's another year and a half, basically. You're halfway through this semester. So what is that $12,000? If you were my kid, and that feels weird saying, because we're only like 15 years difference. But I would encourage, like, I would encourage. like if you were my brother, I think I would tell you,

finish out college, get your degree, you're halfway done, and again, you have your whole life ahead. And there may, you know, and the truth is too,

there may not be a ton to learn, but I don't know, there's a, there's a value in... There's more to it than that. Yes, you're right. You're right. I don't know.

So I just think you have your whole life ahead of you to do what you want to do, and there's something about just investing in yourself. And a little bit of this just finish what you start, too, mentality.

Did you want to go to college or did you feel like people were pushing you to go because you had the discount? I initially did want to go to college. I was originally going to go into the military and then that fell through. So then I just decided to go full on to this business, which was very successful. And then college was kind of just a, you know, it was there to just be doing it as, you know, because the 50% discount is really nice, especially with tuition rates these days. and then my whole family all has college degrees and they're all pushing me to the

I wonder if you would regret being a business owner later on and not having your degree if you're halfway through do what I mean? Yeah, I think 100% Rachel would ride with you on this. If you had said to me, I never wanted to go to college, I feel like I'm just going because I have the discount and I feel like this or that. But the fact that you set out to do this and I think I'm with Rachel on the principal of let's finish what you started because you did say this is something you wanted to do. I do see the 50% discount and go, hey, it's here today.

It might not be here later on if you ever want to finish. And I think in your world, fairly, the 12,000 that I think it's going to cost you to finish the last semester and the last two, you know, the other semester of your junior year and the last two of your senior year. I think that's well within a small percentage of what you're doing, that it's not like this big sacrifice for you to pay it. And so for those reasons, I'm out. For those reasons. What do you think? I mean, does that sit right with you?

Or are you like, damn it. I was really hoping they'd like me. It's going to be frustrating if you take our advice. I think you will be sitting in classes and being like, oh my gosh, what am I doing? But I think it is like that. I think you'll look back, though, when you're 40 years old and having your degree. Well, you made a good point. It's not just the education.

I mean, it's relationships. It's learning to do things that we don't always want to do, but we do it because it's our responsibility. Like, there are so many things that you take away from. college, that is not the grades. That's right. That's right. And not you just sitting in a classroom.

Yeah. And learning. I know. And that's like the biggest, you know, debate right now. Like, and it continues to be, which is good. I think we need to push on this, this notion that like everyone just has to go to college. I agree. So I am for pushing that notion because it is.

The conversation these days figuring out when people start at 18, because some people get into real estate. Yeah. They get their license, take off. Some people go to trade school. I mean, it just, it looks different for everyone. And to your point with AI, I do think that it's an unknown because it's like, gosh, if I invest this money, will this career field even exist the way I thought it was. And I just don't ever want to bank on something at 21, even though he's making such good money.

So it's easy to, to be like, oh, this will be my life forever. And it may not be. Like, it's just the internet world is the ever-changing world. And so we know that well in our jobs. When you take your car to the shop, you're probably thinking two things. How much is this going to cost me and is it going to get done right? What you need is a mechanic who will give you transparent information so you can make the best decision for your car and your wallet. Christian Brothers Automotive is the official auto repair shop of the Ramsey Show because you can trust them to take care of your vehicle the right way.

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10% off, up to a $250 value. See Store for details. Well, today's question of the day is brought to you by Y-ReFi. When private student loan payments start getting away from you, you can really feel like you're paying for decisions that you made years ago. Y-Refi helps borrowers explore low, fixed-rate refinancing options and payments that are designed around your current situation. Visit yrefi.com slash Ramsey, and remember, it may not be available in all states.

Today's question comes from Courtney in Georgia. Up until the last few years, I would get paper statements from my bank and use them to balance our checkbook each month. Now, with everything online, I just check our balances daily, but don't really balance my checking account. Do any of the Ramsey personalities double check their bank's math, or do you just trust that the online numbers are accurate? Oh my gosh. I had like a 15-year-old Rachel, like, Twitch because Dad made us do that all. Quicken? Do you work Quicken books? Yes, I do. Put that CD in your computer and we had our little checkbooks and we had to balance our checkbooks every month as teenagers. And I'm like, oh, it's like

trauma to this free spirit. It was the worst. Quicken. It was the worst. It's a great question though. I mean, this is very deep. I thought Courtney had quicken. Yeah, she probably did. Gosh, I don't know why that made me laugh so much. I think because I had the exact same experience and so it was exactly that. I'll tell you what I do, Courtney. Just honestly, I mean, I do every dollar. I track our transactions in it. So I know, I honestly probably know more of what's happening in our budgets.

Yeah. I check that more. And then in every dollar, our account is linked. So if our account starts to get low, like towards the end of, or like, because we get most of our commission stuff on the 15th, really low on like the 30th. So we have a full month from 15th to 15th for us. So when it gets to be like the 10th of the month, if you will, starts a look.

Yeah. Then I will be like, okay, did we have a big purchase that it's not been accounted for yet? Because sometimes it won't update to like Tuesday. And if it's been over, but usually it will show up in our banks app. And it's like gray. It's a different color. So I'll double check that if I feel like our balance is getting too low to be like, okay, I want to make sure that we're, you know, on track with this.

But that's what I do personally. but honestly the budget for me is kind of my quote unquote balancing the checkbook. I know it's not against my bank statement, but it's against what we've planned and what we've planned we know we have the money for. Does that make sense? Yes. I'm with you. I can say I do not check my bank statement. I have not downloaded a bank statement in quite a while. I do trust that when I see the transaction come in through every dollar, usually I'm like, yeah, I went to Publix for $13.81 cents. That is true.

And then I just track it. And I'm with you. Since I track my transactions, not every single day, let me be honest, but very often, I can start to see if it seems like we're about to go over a budget in an area. And then it's like if, or if we did, you know, it'll tell you like if you've already gone over. Then I'm starting to pay a lot more attention to go, okay, I need to like shift this around or we need to pull back. So I kind of do it like that. And then at the end of when you close out your budget,

everything's already tracked because you've been tracking throughout the month. And then the closeout is just, hey, did you stick to your amounts or didn't you? And I think that's kind of, I care mostly about tracking the transactions and the close out and kind of seeing how we did. And are there trends there? Like are we constantly going over grocery budget? Are we constantly? And I pay attention to those types of trends.

But other than that, I'm not as I'm not locked into the statement and making sure the balance is perfectly to the decimal point. I have a friend who's like that, though, and I'm, whew, that's too much for me. All more power to you, you know. Yeah, I mean, do what you got to do. Yeah, but for real, every dollar really is great, you guys, in that sense, because I think we have shifted because of everything online. And this kind of gives you more of a real-time, more budget mindset than like a bank

statement. Yeah. Check, check, check. It should make it easier that you don't have to do all that. Exactly. Yeah. So if you guys do want to check it out, you can download it for free in the app store or Google Play, or we'll put a link down below.

but check out every dollar if you haven't done a budget because it really will help sync all of that and you sync all your accounts. That's the other great thing. If I need to look at the balance of our accounts, I click on accounts on every dollar and it has our money. It has our high yield savings, our checking. All of that is just right there in every dollar. So that's nice. That's very helpful. Yep. And, you know, I do want to hit on this because I think about how my budgeting practices were when we were in $460,000 of debt and like going to be. through that. And then I think about how our budgeting practices are now that we're not in any debt and life is a lot easier financially. And I do think there's little things that change. Like the

principle of budgeting doesn't change. The principle of living on less than you make. The principle of tracking your transactions. It doesn't change. But I do feel like you're not down to the nitty-gritty scent like you were. And I actually, I think this is a great post from LinkedIn because it just goes to show like no matter how well you're doing, no matter if you're making hundreds, hundreds of thousands or hundreds of millions, it's really important. So Logan Ryan, you guys might know that name. He's an NFL player, played on lots of NFL teams, but more notably, the two Super Bowls with the Patriots. He says he made, this was a LinkedIn post, he says he made close to $80 million in the NFL. And he says, never spent a dollar of his salary. He retired at 33

and lived off of what the market pays him. So he just invested the money and basically lived off of the interest, it sounds like. He says, most guys who hit that number are broke a few years after their last paycheck. And I know Dave talks about that all the time. Like the amount of pro athletes who make so much money and then they truly end up bankrupt and broke.

100%. It's just sad. Logan Ryan goes on to say, he says, I've watched it happen up close. Growing up in New Jersey, two loving parents that worked super hard. But then when he got drafted in 2013, it's like that feeling never left him. And so he just was like, I was suspicious of every dollar I spent.

And I lived on a strict budget, lived off what my portfolio paid me. And he still like works with a financial advisor and just asking questions and learning. So it really just goes to show a lot of people think, Rachel, that if you earn more money, that's the solution to your money problems. But this just goes to show. And I can even say from my own experience, if you learn to manage your money when you don't have any, that's how you really know. That's right. And then when you earn more, then you're like, okay, I know how to manage this. It's not going to come later.

It comes at whatever point you're at today. That's exactly right. Yep. Yeah, the money just magnifies your financial habits and your mindset around money. So if his is a very conservative mindset around money and he's like, I'm going to live over here and then he starts making 10 million, 20 million, right? Yeah. That conservative mindset just continues to experience. band. It just makes you more of what you are. And that is why it is so crucial, so crucial that we,

yes, we talk about the dollars and cents on the show. But also it's the character of who you are during whatever baby step you are. And that's the, a little bit of that beauty of baby step too. The sacrificial season is so difficult and all of it. But man, when you learn to live without, when you learn to be content, like all of these things are so helpful. Yeah. It's a helpful set up for when you actually start building wealth as your income increases. So I know, I do always love this. Logan Ryan, well done. Because the story of this professional athletes to lottery winners and all the above, it's not great because if you don't have great habits, yeah, again, it's going to be, so if you're not good with money and you win a lotto ticket. Just blow more of it.

It's just got to, yeah, you're going to be not good money with a lot of money. Yeah. And I got to believe there's two, and I know you talk a lot about this, I got to believe there's a content play to this as well, just knowing how to be content, whether you have a lot or a little, and knowing what that boundary is of, I actually, like, this is not going to, more of this is not going to make me happier. That's right. It's just, it's available to me, but it's not going to make me happier or, if anything, it can start to become a headache. The more and more stuff you have and you have to maintain, more money, more problems, you know. More money, more problems. I did my version.

More. More money, more problems. I'm such a hip-hop girl, Jane. You feel it? I feel it. I do feel it. One of my favorite things is when these sides of Rachel come. They're my favorites.

Like, let Rachel get spicy. We were talking about this at the break, and we think it's so fascinating. I came in, I grabbed a tea on the last break, and I walked out. I was like, Jane, you know what I was thinking about? Just the last two callers we had with cars, right? You got one guy and cannot afford the nice new truck, $90,000. $90,000. The other guy wants to buy an $80,000 a new sports car.

The people that actually have the money and can do it are like, should I? It's people that can't that are like, I got to, I got to. And I'm like, it's such a fascinating mindset. So the emotional part of money, you guys, is as important as the numbers. Absolutely. Well said. When you're trying to hire, you don't have time to dig through stacks of resumes,

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Meet your match on ZipRecruiter. All right, let's go back to the phone lines. We have Micah, who's in Philadelphia, Pennsylvania. Hey, Micah. How can Rachel and I contribute today? Hey, thank you guys so much for taking my call. No worries. What's up?

I have a question. I'm a stay-at-home mom. I worked for five years, and then I have a two-year-old and a one-year-old, and we want to have more kids someday. And I have a 401K from when I was working. It's kind of pathetic. It's like $15,000. But it was with the company I worked for got bought out a few times. So I consolidated all of that into one account.

But now I just have this account that's in a Raymond James. And so my husband, he has a TSP account and he is going to change jobs next year. So he'll be getting, I think his new company that he's going to work for has a J.P. Morgan account. And so we are going through babysat for trying to just consolidate and, like, simplify our life. And I'm just kind of asking, what am I supposed to do with. this 401k that's kind of like often like la la land and with he's going to grow his but is mine just going to sit there until I'm 65 like what am I supposed to do? Didn't you say you already moved it into, did you already move it into an IRA with Raymond James?

Well, it's a like half of it is a Roth IRA and the other half is a 401K. Okay. So I would take the 401k and I would roll that into, I would do a direct roll over into an IRA. If it's, and you can do that by kind. So if it's a Roth, you can do it into Roth IRA if it's a traditional, into a traditional IRA. And then with his TSP, when the time comes, I'm not sure if he can roll that over, but if he can, you can do that. But they're all going to be separate. They're not going to go, they're not all going to go into one IRA together. They're going to be individual ones and that's okay.

How much is in the 401K? I think it's like $7,000. Okay. Okay, okay. Because what I'm thinking is because it is such a small amount, rolling it over into maybe putting everything into one Roth, which means you will pay taxes on that $7,000. But it's not a lot. But it's not a lot. So I almost would just roll it over to that Roth IRA and have one Roth IRA that's sitting there with all $15,000. And again, you will pay some out of pocket taxes. So make sure I'll have the cash for that. But for the long term for it to grow, I think I would, I would probably, focus on that because eventually for a lot of people, you know, making that transfer from traditional to Roth is a good idea if there's time because you're going to have so much growth. How old are you, Micah? I'm 30. You're 30. Okay. So what's crazy is if you did just leave it in and you didn't touch it that 15,000 and you didn't add to it at all for the in 35 years when you're 65, it'll be almost

$700,000. Ooh, we. Wow. So you say it's like, oh, what a little thing. And it does. It kind of just feels like, eh, it's just 15 grand, you know. The potential. But the potential.

So honestly, I think I would pay taxes on the 7, roll it over to the Roth IRA and just let that thing grow. I'm not mad at that. And, yeah, and God, let it turn into $700,000 for retirement. Perfect. Okay. Yeah. Because that's what I was wondering. It's like, well, if I'm not working in compliance.

contributing, like, what's the point even? Yeah. It's going to be like that. Compound interest. It's your friend. So, yep, it'll just keep growing and growing. And what you said, Rachel, is so important. You know, we talk about Roth conversions.

And a lot of times, especially with larger amounts, it's a baby step seven activity. Because you're right, there is taxes that they're going to be on the hook for when tax time comes. But with the $15,000, they'll probably cover it. But it is so important to, if you're, you're able to make that transition to Roth, it's so important. Because when you think about how this money is going to grow over time, and that's such a good example of it, that's 692, let's just say $692,000, let's just say it was even more than that. Or it's money that they'll never need to touch in retirement. With it being traditional, there is going to be a required minimum distribution.

And so when you look ahead at your own retirement planning and you go, gosh, this is not even money, there might be money that you don't even need, but you're required to take a distribution. distribution. And then if it's money that you're going to pass on to your errors and you go, gosh, they're going to be required to take that distribution and they're going to have to then pay the taxes on it. But if you turn around and you're able to convert the majority of your wealth to Roth money, then that money is growing. It's growing tax-free and you're able to pull it out as needed. You don't have the required minimum distribution and you're not paying taxes on the money when you pull it out. That's right. Because it's already been covered. And so that to me is just a huge,

it's a huge wealth planning thing that I think people sleep on. They're not really thinking about it. So just something to hold in your heads. To noodle. Yes. Because I mean for her, yeah, it would be about 1,500 in taxes today versus it's, let's just say that 700,000, let's say 300,000 of it if it was left in traditional. As she's going to be pulling it out.

Yeah. I mean, it would be probably around 100,000 at that point. Yeah. Or 70,000, about 70,000. So 1,500, $70,000. Huge. Yeah. And when you think about it, okay, yeah.

And then when you roll it back to it, let's just say it's an inherited IRA. That same person, they've got, I think it's 10 years to pull out. And can you imagine having to, like, if you have a substantial amount, you're having to pull out that money at such a high rate to drain it. Yes. Oh, none of that. None of that. Let's be thoughtful, people.

We love a Roth. Yes. You can do the Roth. Do it. Yes. All right. Let's go to Jordan, who's in Seattle, Washington. Hey, Jordan.

How can we help today? Hi. Well, actually, this question is concerning my mother-in-law. She's on her way to 85 years old, blindsided us with a request from her financial advisor who's advised her to get a reverse mortgage. Oh, boo. It gets better to buy stock. No. Yeah, it is, it's insane. What is he high on? Man. I know. That's wild.

It even got better. Now we find out, so this is about two weeks ago, we find out that she set up and sent over a mortgage broker to her house who laid out reverse mortgage, second mortgage. The house is free and clear, but he called it that, or an equity line of credit. To borrow for her to put that money into the market to try to make money. Does she need money? month to month? What's her reason for doing this? Well, yeah, that's when we can't pin down. She's probably, it's close to $2,700 a month in her Social Security. She literally, she has a tiny car payment, owns the house. Yeah, there's, yeah. It has been taking out $1,000 a month out of her investment account and tells us she has roughly $35,000 left in that, but tells us.

that she's losing money in that. So we're not sure where all that money is going on a monthly basis, but she's scared. And, you know, of course, we think if she's, if this is that, her, any other elderly people who live by themselves and are trying to finance or, you know, balance their finances are having this happen to them. It's horrible. Jordan, is she asking for help from you?

Is she saying, will you help me? And she's telling you all of this? Yeah, she's telling us. So she's asking for help. But at the same time, so my wife, it's her mom. Okay. And her other daughter, everybody's telling her, no, don't do anything. Just stop.

We'll figure this out, of course, offering to, you know, if she really feels like it, so the house come live with one of us, we, it's open to you, but, um, it sounds like now she's leaning towards a $150,000 line of credit. Oh, man. Um, is she of sound mine, would you say from like, from her age? Okay. So she's, so she's good. She's, she's sharp at 85.

She's sharp at 85. Knows what she's doing. Okay. It's just, that doesn't strike you as strange that all the people who love her are saying, please don't do this. And this one guy is like, do it. And she's saying, okay. Yeah.

I'm wondering if you guys can lay out a plan, Jordan, to show her, hey, mom, here is what would happen when this goes down the road this way. Here's what you need to do. Fire your financial advisor. Let's figure out how we can make $3,500 a month work for now. And if you all, I don't know how, where you guys are from a financial standpoint, Jordan, your wife and her sister. But even if you guys have to supplement a couple hundred bucks for a little bit just to kind of

get her feeling secure again. I think that's totally fine, right, to make her feel good again and confidence, but she needs some more information on the right way to do it, not just the wrong way. When it comes to your health insurance, one of the biggest mistakes you can make is believing you're stuck in a one-size-fits-all plan that costs too much and covers too little. That's why I recommend health trust financial. They're the only Ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you. Whether you've changed jobs, welcome to new baby, or had some other life event health trust financial shops, multiple top-rated insurance carriers for you. Then they help

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We've got Austin and Raleigh, North Carolina. Hey, Austin. How can we help today? Hey, thank you for taking my call. I really appreciate it. Absolutely. So I do, my question today is, is whether or not my wife and I can afford for her to get a new job. We're just going to obviously take a pay cut. Yeah.

Okay. Layed out for us. Why are you thinking about this? Well, my recovery reasons, one being the drive. She currently works about an hour away. Oh, gosh. The main reason, yes, with two hours, and we have a 19-month-old, so he'd have to ride in the car, you know, two hours a day, which, you know, not ideal.

But, yes, so the other reason which is, you know, kind of drove me to call you guys is my wife, she has a bit of, like, a hostile work environment, I would say. There's a bit of, quote, unquote, like, clicks going on within the office, and she's never been one of those girls. Got you. They pretty much, you know, kind of, like, you know, bully, quote of a bully her. And I just, I can't, I can't. What kind of job is this? What does she do for work? She's a nurse navigator.

So she works at a hospital. And so she works with all other nurses and, like, you know, that kind of thing. Okay. Okay. Is there a hospital near you guys that's not an hour away that she would go get a different job? Or what is she thinking? Yes. But the problem is, or if she works at now, she makes, I mean, she, would have to take about

the $20,000 pay cut to move closer to where we live. Okay. What's the full salary? So she'd go from what to what? So she makes right at 100 right now. And so she would probably go anywhere from 75 to 85 range. Okay. Depending upon the job.

Where are you guys at financially? Do you have a lot of debt? Do you have savings? Kind of. We have about 75,000. in consumer debt, which is primarily my fault. Actually, actually, it's all my fault. What was it?

Gambling, student loans? What'd you do? Well, student loans. I have about 19,000 of student loans and about 56 on my truck. Okay. Well, wait a second. Well, this might be an easily solved predicament if we really want to start talking about the debt.

I do think it's okay. I think for the commute alone, honestly, the two hours every day and with the two-month-old. When you said she has to drive that with the two-month-old, are you saying that the daycare is near her job? Or like, what is? Yes. Oh, wow. So she drives. Okay.

Yeah, that is. It's a lot. For that alone, I would definitely consider finding a job closer. My bigger question is, are we assuming that it has to be a long-term pay cut or is there a way for her to work back up? to that same salary in a living closer working closer i mean maybe in the future um it's it's just difficult because she found when her job she actually loves her actual job and her boss loves her the doctor's lover but it's just the other employee doesn't make it miserable unless you call me a crime today and i'm like yeah it's not way to live your life totally no way to live so you guys will be

short, probably what, 1,500 a month-ish with this new change? I think that's not where it comes out, too. I mean, we have the $1,500 in margin. Okay. Together we bring in about 2-10 salary, and then I have like a side hustle I do. I make about $30,000. All right, good. So, like two months out of the year.

Nice. Okay. So you can handle the hit to your budget. Does this affect, but I mean. It's going to decrease, like, you're going to decrease how quickly we can pay off, you know, Yeah, but also you're not factoring in if she gets a raise. If you get a raise, if you guys make some big moves, like, you know, maybe selling the truck, getting something cheaper. You know what I'm just saying.

I'm just saying. You can finagle this and kind of be like, okay, if we're making this decision over here, that means we're going to have to make these decisions over here. It's kind of that trade-off, but it's worth it. It's worth the trade-off. Yeah. For my truck, you don't think I should sell my truck? How much could you get for it? let me okay I can about 10 grand upside down in it and I also drive an hour each day to my job so um

I think I'd be looking at how quickly you can pay it off like if you can get this done if you guys can buckle down and be like man we're knocking this this truck out and and technically the student loans should be first but if you looked at the 56,000 alone and you're like man we can we can knock this out in the next 18 months. And if we add the student loans to it, like two years or less, I might say you could keep it. It's not more than half of you guys' income together. I'm guessing with your wife's vehicle. So on that parameter, and if you can do it two years or less, I feel like you have the ability to keep it. It just has to do with you guys' values and how quickly you want to be debt-free. Could you all pay off? I mean, how much money could you put with her new salary towards debt,

like $3,000, $4,000, $2,000 a month? A month. Right now we put about three or four, three or four thousand. So we got our emergency fund. And we, yeah, so we could, it would probably knock it down, like you said, like 15,00. So we probably have a $2,500 range. Are you investing? Yes. I mean, I put, so I work for the government. I put, I put my TSP match. I put 5%. she does 5%. Okay. But into our, you know, just our 401ks.

But besides that, I mean, I've got my $7,000 in a savings account just because I don't know. So let's roll this back. Let's roll this back, Austin, because I think that if we can lay this out for you in a way that makes sense, it'll help you kind of change some of the things that you guys are doing how you handle your money. Because investing usually is a very good thing, but there's a good, best way to do it and there's a time to do it that makes more sense. Having the $7,000 savings. I love savings, but again, good, better, best. And so I think the best way for you guys to tackle your financial goals here is to work our baby steps in order. It's the same plan that I use to pay off

debt with my husband. We've all done it. It works wonders. All right. So what I would do in your situation is I would temporarily pause investing. You guys are putting aside 10% of your $210,000 income, that's a lot of money. And if you can imagine that money back in your monthly checks, well, now all of a sudden you have the full power of your income to pay off this debt really, really quickly. Because the debt itself is not an overtaking amount of what you guys bring home. So if you have all your income, you can tackle that super fast.

So I would temporarily pause investing. I would knock that savings down to $1,000. You just need a little buffer there because once you throw that $6,000 debt at the $19,000 student loan. Gosh, now there's only 12,000 left. With your income, that $12,000 student loan should be gone in three months. Just gone.

And if you tighten the straps, it should be gone in like two months. Like really get after it. And then after that, it's like, all right, now we can think about this truck. Get the truck paid off in 14, 18 months. And you might decide maybe you do want to sell it. That's totally up to you either way.

But that intensity is going to be what drives you guys's decisions. And then from there on, Austin, we're saving up three to six. months of expenses. So you have a cushion under you and you're never in this type of situation again where it's like, can we do these things? Do we feel secure? And then from there on, yeah, turn investing back on and go be wealthy. Yes, and I would have her change jobs. Yes, for the and then also the toxic environment. Yep, I would take $1,200 out of my paycheck for that peace of mind. Whether you're a small business owner or an individual, doing your taxes is not fun.

It's like an algebra test where if you get anything wrong, the IRS can make you pay with actual money. But if you work with a Ramsey trusted tax pro, you don't have to be a tax whiz because they are. They know taxes like the back of their hand, which makes filing super easy. So work with a Ramsey trusted tax pro and get back to doing what you love, which probably isn't taxes. Visit ramsysolutions.com slash tax pro and fill out the referral form to get connected to a Ramsey trusted tax pro today. All right, we've got Mary, who's in Houston, Texas up next. How can Rachel and I help today? I'm 54.

I'm retired Navy with 100% disability. And my husband is 57 and he's on SSDI. We are debt-free. We own our own home. But it needs major repairs, which we plan to cash flow. We have $300,000 in the bank. And we have two investment properties, one that we actually live in,

because that's how bad our primary home is, and one that my parents live in. My real question, though, is do we, since we have a steady income for the rest of our lives, do we need an IRA? I don't have any kind of investments currently other than our investment properties. What is the $300,000 in? It's in high yield. Okay. You know, honestly, what I would probably do, Mary, is sit down with a SmartFester Pro and just run the numbers because that $300,000, because you guys still are relatively young.

And if you just put that $300,000, do you guys contribute to that every month? No. So really, this all just happened in the last three months for us. Okay. We actually sold another piece of property and we got debt free, got the money in the the bank and now we're okay what do we do now we have this steady income for the rest of our lives what is the income what is between the disability and the SSDI what is it equal to every month a little over 11,000 oh wow that's great so what I would probably do mary again if you want to sit down with an investment professional and

like really look at this in detail I probably would encourage you to at least get a meeting and talk about it but if you just stick that $300,000 in the market and you just did, you know, a mutual fund, an index fund, anything similar to that, in 10 years, that's going to end up being almost $900,000 in just 10 years. Without adding. And that's not a high-yield savings. Remember, that is actually, yes, putting money in. So I would probably throw that in an index fund. Yeah, 100%. You know, you can do that Vanguard.

I mean, anything. maybe keep some of it in a high yield for an emergency funds, but it sounds like what you guys are bringing in income-wise is what you're living off of, which is great. Have some more cash available still for an emergency. But then also now I'm remembering, sorry, you said that the house needs major repairs. Are you guys wanting to just sell that house and live where you guys are in the rental, or what are you wanting to do?

No, we want to fix it. My father-in-law built our primary home, so we want to fix it. What's it cost to do the repairs? It will probably cost us a little over $100,000, but it's worth twice that, at least. Okay. And we plan to cash flow it, you know, and stay in this house. I mean, if it takes me five years to fix my other house, then it takes me five years to fix my other house. And all three houses are paid off?

No. The one I live in actually has a 15-year mortgage. How much? How much is my mortgage payment? It's $3,000. No, how much is the total amount of the loan? Oh, the total amount of the loan is $350, and it's worth $475. What about the one that your parents live in?

The one of my parents live in also has a mortgage on it that they pay. It's literally just finance. But it's in your name. So how much is the total loan there? The total loan there is 72 and it's worth $1.29. Okay. And then finally, you guys is personal residence. We own it outright.

Okay. So that one's paid off. Yes. And it's worth $250. Yeah, I think even more reason to invest that money, like Rachel said, because you guys are carrying some risk with these properties, specifically the rental one, and obviously the parents one too. So I would just like having that money there. I would like it growing because if you want to reach over at some point and pay them off because of the growth, you would have the ability to do that. So that would be my number one reason of like, yes, we have to make sure that there's money that's growing for us because we are carrying a level of risk in our life. So I think that's a really good question. Okay. How do you plan on doing, so the repairs, it's all going to be cash flowed from your $11,000

income or are you planning on taking something out of that $300,000? If I needed to take out of the $300,000, I would, but currently I don't plan to. I plan to cash flow it out of our monthly income. Yeah, I like that idea. Well, thank you so much for the question. That's a good one. Next up, we have Olivia in New York City. Hey, Olivia.

How can Rachel and I help today? Why? So I'm engaged and we're currently negotiating our pre-up and there's a very large financial disparity between us. So his disclosed net worth is over $100 million and it's primarily from a business that he built before we met. I absolutely want him to protect what he built before me and I'm not asking for like ownership of any of those assets. But basically in the pre-up it's stating that like everything is. that all of his current income and, you know, after we get married, everything's going to remain separate. So, yeah, so I'm trying to figure out, like, if let's say we're married for 10, 20, 30 years,

like the vast majority of his wealth accumulated during that time is going to continue to remain entirely in his name. Have you asked about making it to where it's, the stop is when you guys get married. So everything he had before the marriage remains his. And then what you build together, it has a fair 50-50 split or whatever is. So that you're protecting yourself in case something happens. Have you said that to him? Yeah. He does not want to do that because he makes, yeah, he's making around 12 million a year. So he feels like, you know, I'm coming into this marriage. He already built all of this before me. So, yeah, he doesn't want to do a 50-50.

Does he want to do any percentage of what you guys, what happens once you say I do, whether he earns more or earns less? Even 20%. Yeah. Because what happens, Olivia, and I think you feel this, because we've gotten this call where, you know, dude leaves. There was a pre-up in place, and now she has no assets, no savings, because she didn't work because he provided a great life,

and now she is nothing to her name. And so that's where the pre-nup ends up hurting women, right, in that position. Right. So, yeah, exactly. That's what I'm scared of. How long have y'all been dating? We've been dating a year. And we're engaged. Yeah, we're getting married in two months. How much of a deal breaker, if you can't get this locked in in a way that you feel protected as well, have you decided where your go-no-go line is on this wedding? Yeah, I think like, you know, I want him to kind of like meet me, not even like halfway, but like kind of like say like, okay, like I'll give you this or that just to feel like you're financially secure if we, you know, end up not working out down the line.

Yeah, even 10%, I mean, even 10%, right, is 1.2 a year, right? Like from his income. He has a lawyer. Do you have one? Yes, yes. I have a lawyer. She told me not to sign it. Good.

She said that he needs to come up with something that, like, we need to come up with basically something that would resonate with him. Right now, like he's basically saying he would give $30,000 a year. to like he would put 30,000 a year into a brokerage account for me. And then the other thing that he was offering was 10% of the future, of the appreciation of the future family residents, which the lawyer felt was unfair as well. I think that's unfair too.

Just the appreciation of the, yeah. Yeah. I'm sorry that's happening. Yeah, and I wish we could give you. Yeah, I'll tell you what he basically, where he's coming from is that he said if we divorce, like the child support will be so much that you won't need any more money. Like he's, he basically said it would be a half a million. I just think that he's setting a lot of the terms and it sounds like he's doing the majority

of the talking. And I understand it. It's his money. Go ahead. I was going to say ultimately, it feels like you're not taking, we're not even married yet. And I feel like you're not taking care of me. If something bad were to happen. And if that's, how he's feeling before the marriage. I would go slow, Olivia. Push on it, Olivia. Go slow. Hey, guys, Rachel Cruz here,

and I'm so excited to tell you that the brand new 27-Ramsey goal planner is available now. Guys, this is the only planner with exclusive monthly content from John Deloney, Jade Warshaw and me to help you set clear goals and actually stick to them all year.

But here's the thing. These sell out every single year. So don't wait. Order your new 2027 Ramsey goal planner for 4997 at Ramsey Solutions.com slash store. That's Ramsey Solutions.com slash store. Hey, if you love the Ramsey show, make sure you're letting us know what you think in the comments. And by the way, if you watch the show regularly on YouTube and you've never subscribed or you've never followed us or you've never, you know, click the little plus button on the podcast, please do all that.

That helps all of us. And if there's an episode that you particularly like, make sure that you're sending it to someone who you think could need it or could use it or could benefit from it. That is something that benefits not only us, but it benefits the people around you as well. And it costs you nothing. By the way, I don't know if you guys knew this,

but Ramsey Solutions is taking over an entire cruise ship here coming up in a little while. March 14th through 21st, 2027. Join us for the Live Like No One Else Cruise, Rachel. There's going to be seven nights in the Western Caribbean. Do you say Caribbean or Caribbean? Caribbean. Okay.

What are you? Caribbean? I got to go with Billy Ocean. He said Caribbean Queen. Caribbean Queen? Well, you know what? I don't know. You were a cruiser back in your day.

Back in the day. She was a singer. Singer on cruise lines, Miss Jade Warshop. Yes, ma'am. Beautiful voice, little Whitney Houston action. That's right. So good. You never know what could happen.

I mean, we're all going to be on this cruise doing our thing. I said karaoke with Jade. Get ready, y'all. It's going to be good. When I do karaoke, it's fun to do like songs, like the worst songs ever. I get knocked down. Right? It's just like stupid songs.

But anyway, we're going to have a good time. We do have a good time on this career show. It's more than a vacation, though. I feel like it is like an immersive Ramsey experience. I mean, obviously, all the personalities are going to be there. Dave's going to be there. But we've got new teachings this year. So come for those.

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The ship is really nice. It really is. Because I'm genuinely, I'm like, I, going on a nice vacation, you all know me. I love a boogey hotel. Yes. But I'm like, they have a good sushi restaurant. Holland America. steak restaurant, great bars. We're sipping martinis, having happy hour of people, going

and getting good food. Like that's my, that is my favorite type of vacation. So fun. I agree. And it is. It's classy. It's beautiful. Like it is a great, it's a great spot and great memories. We grew up cruising. Mom and Dad love a cruise. They may or may not be on one right now. Are they? Over another, on the other side of the world. Yes, mom and dad, they do love a cruise. Yeah. And we grew up doing them in the memories that you have. have, like even as a family, like bring your kids. Like there is. There's such a great experience.

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Yes. All right. George is in Tulsa, Oklahoma. Hey, George. What's going on in your world? Hello, Jade. Hello, Rachel. So I hope you guys are having a great day.

Thanks for taking my call. So we are completely debt-free, including the house, and have a fully funded emergency fund and currently have $500,000 in a brokerage account invested in index fund. Yes, we have $650 in retirement. We are thinking about building our dream home and using the $500K towards it, but I'm not sure if this is a wide financial decision

or just a large luxury price. purchase. Wanted to get your thoughts. Okay. So the 500,000, do you guys have, you have a separate fund for like an emergency fund, right? Yes. Okay. Would you have to use the equity in your current home to help with that process or would you just take this 500,000? What would you do? That's a great question. We would probably need to most likely sell this house because the house that we're thinking of building it's around $6.50. Okay. Okay, that's great.

How much equity do you have in your current home? About $350. About $350. Okay, awesome. Yeah, so, I mean, you could do this a couple of ways, George. I mean, you could, because we're okay, the mortgage is the one thing that we say, you know, we're not going to yell at you for. Now, being on Baby Step 7, if Dave was sitting here today, he'd be like, no, you got to figure out how cash up.

It's hard to go back. So you could, I can tell you what dad. what dad would say, he would say, sell your home now, go rent for a year, take that equity, take your cash, don't even take out a construction loan. You just literally cash flowed the build and move in. That's probably where I would lean, honestly,

just so you don't have to worry about it. But if you did decide, hey, we are going to take out a small loan to cover that difference, get into the house, maybe with a, again, move that construction loan over to just a conventional loan after you move in,

sell your house then and then pay off that loan with the equity of the home, you could do it in that order, too, so you're not having to move twice. Yeah. That's the other part, and I love that, because we don't want a mortgage. My wife doesn't want a mortgage. Okay. Yeah.

So we're leading more towards that. The other idea we had was maybe just wait. So we own our business, and we've been doing really good, and that's where the 500 has been coming from, which is we just put away our profits. So maybe in another year and a half, we should have the six to six 50. Oh, well, good. Yeah. That's great.

Then maybe just take a beat and so you don't have to rush. Because I'll tell you, George, we were in this position. A few years ago, my husband and I. I feel like that's rushes because prices are going up. Yeah, they are. That's true. But just in a year, it'll be like, yeah. It'll be like, yeah, it'll be.

Yeah, maybe one, two percent you'll see. But that's, I think it may be worth it just to wait because my husband and I did this exact same thing and we waited, we had saved for a long time, and we did our build with cash. And I'll tell you, when you have that mindset going into these meetings, because it is fun. Like, if you're able to build what you want, like, that's a dream for a lot of people, right? And it is so fun because you get to pick everything. You get to, you know, do the architecture and figure it out. But it forced us, forced us to stay in a budget. And there's things still. There's one thing we did not do because we literally didn't have the money for it.

Does it bother you to this day? Yes, one thing. One thing. Well, you got to tell it. Okay. We could have had like a half basement and dug it out and it could have been unfinished. Oh. And it was like an extra like, I don't know.

Yeah. I feel that for you. A couple hundred or a couple hundred listen to me. Couple ten. Yeah. It would have been a little bit more. It was. And we just literally did not have the money for it.

And we were like, that's the one thing we kick ourselves for. We're like, man. But I'm saying all this to say, George, it is, it's a great exercise. and you go in on move day and you're, that would be an insane thing to do for you guys. Yeah. To move in and not have a mortgage on a beautiful home that you guys have built for your family.

And it's awesome. So whether you wait a year or if your wife is like, nope, we're not taking on a mortgage, which I applaud her for. That is kind of our MO here. Yeah, and you guys want to do it faster. Just move for a year, put some stuff in storage. And a year flies.

It goes so fast. So either way, either way, I think you're going to be fine. Thank you so much for a call. Appreciate everything you guys do. Yep, absolutely. George, that's great. Because after all of that, they're still going to have about around 200 left after the sell of their other home. They've done really, really, really well.

But I think that is worth noting baby step seven to be there, have a paid off mortgage and then go back to a mortgage. That's got to feel like the sting. Yes. It's within the bounds, I guess, of what we teach. but, you know, I think that it would probably be a painful feeling. Yeah, and we've known some people that have done that. Uh-huh. And they just pay it off quick.

Like they're really aggressive with it, right? To pay it off. But yeah, you probably, well, yeah, you're back in it and not always fine. But for the home, a home is the one kind of caveat to this whole no debt thing because it is such a large part of people's world. Yeah. But in their, especially in their situation, it's like if they did what you said, which like, hey, let's take a little of this, that we were not moving twice.

Yep. And then we can quickly pay off that loan once we sell the house. Yes. I mean, yeah. Totally. We're splitting his here. And I'll say this, George, this is what we experienced too. I remember for a few years, though, we were so, we were real estate heavy because we took almost all. You know what I mean? And you feel that where I like being in the, I like having money in the market.

Liquidity. So that even forced us for a couple years after. There was probably about three or four years that we had aggressive goals to get money back into investments into like that. it out. Yes, yes, because I don't like being super heavy one or the other. Yeah. So there's something about that, too, to remember when you make this move. But you'll be okay. You guys are, you show a lot of diligence, George. So that's exciting, though. That's a fun thing to do. Yeah, well done. You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person.

That's why we created the Live Like No One Else Cruise. For seven days, we're vacationing with you. and 2,500 Ramsey people in the Western Caribbean, with live shows, us, new content, us, and more. If you're on Baby Step 4 or beyond, come spend the week with us next March. Choose your cabin at ramsysolutions.com slash events or click the link in the show notes. All right, our Ramsey shows scripture and quote of the day.

Isaiah 452 says, I'll go before you and will level the mountains. I will break down gates of bronze and cut through bars of iron. James Clear said your success depends on the risks you take. Your survival depends on the risks you avoid. That's good. I balanced that wisely. That's good.

All right, Kathy's in Montgomery, Alabama. Hey, Kathy, what's up in your world? Hi, how are you today? Doing good. How can we help? I received a, well, you give you a little bit of background. I'm 66 and started working full-time the past year. due to a crappy situation financially.

Sorry. Anyway, yeah, it happens. But anyway, with that being said, I received a nice, nasty letter from Social Security stating they overpaid me. Yeah. And they're going to take half of my payment until starting at October till April of 27, which is seven months. And with that being said, I was advised through my church to,

ask for an SSA 632 because this is less right now less than 2000. And my fear is I can't get anyone social security wise to send me the letter because I can't get on the website because I changed my phone number due to my X and I can't get into the website. So requesting the letter, I've requested. fit for two weeks now, or twice in two weeks, and have yet to receive that letter to make the accommodations for me not to pay this back, is getting a waiver. My fear is, next year I'm going to get the same letter, but it's going to be more as me paying back.

Why are you fearful of that? Well, retirement age, I was told, would be officially 67. and I'm receiving my social security to help pay. I bought a house to help pay that. That's what I'm using for my house payment. And my other is basically surviving with moving into this new home. I had to, unfortunately, use a credit card that I'm now just snowballing, which is recent that I started snowballing this. and I, of course, put it away, don't spend it, you know, just and snowball the heck out of it.

In other words, I get paid weekly and they get a weekly amount to snowball this. So going back to the overpayment of the Social Security, you're saying you can't log in to fill out the waiver or to fill out the form to say, hey, like, give me this money back or don't take this money because you can't, because you can't log in? I'm confused about that part. Is there a way that you can just print it off and send it in? No. Unfortunately, I don't have access to a printer unless, well, I guess I can go to. Well, I didn't even think of that. Thank you.

Yes, ma'am. Yeah, I'd find anything to get this waiver. Yeah, you need it. The problem is I can't get into the website itself. It's stating that my old phone number. Correct. It's stating that it has my old phone number. They need to send me, you know, a text or something.

I can't remember. Oh, for verification. It's probably what they're asking for. Yes. Thank you. Yes. Yes. Well, you know what?

I would call. Is there a number to call? I did call. And I stated that I needed the waiver, what is it, documents sent to me. And I did this on October the, oh gosh, excuse me, I'm sorry, September this past Monday. and then the Monday prior to that. So I would go down to the office and just have them create a new account for you, Kathy, with a new login. That's all you need.

But you can also, you can just download the form I just did. And you can fill it out and you can either upload it on the site or you can mail it in. Okay. Okay. Well, they stated that I could print it out and, but it's just getting in there to verify, you know, I don't know where to go to do that. that other than they're telling me, oh, you know, you've got, you already have an account and it's associated with his phone number. Well, the phone number shouldn't be the thing that's holding you back. I mean, you have your

social security number and all of your information for your identity. Yeah, so fill up this form online. Jade has it up right now. As long as you have your social security number and the claim number that's attached to all this, I would go ahead, I would at least start. I would go ahead, fill it out, mail it in, and then see what they say after that. Because if you have all the correct. And maybe go the extra mile if you need to like have some form of identity that proves that that's your your name and number. I don't know. Maybe sometimes people want to see like a government ID or something. Yeah, government ID or just like some some trade lines that prove that this is you. You could do that. But don't let that one thing stop you from doing this because it's a big

deal for you. Yeah. Yeah, it is. Yeah, because financially it would devastate me. Yeah. I can't afford it. Yeah. So, yeah. So, and are you able to qualify for this? Is that what someone was telling you? I'm thinking that I can because it would create a financial hardship on me. Right. Yeah. Taking that much money out of my account for Social Security, it would devastate me not being able to pay my house payment. Okay. So, yeah. And it generally applies if you agree that there was an overpayment, but if it wasn't your fault and if you can prove that it would create a financial hardship, that's usually what you. they're looking for. They're going to want to know why it wasn't your fault. They're going to want to know your household income, your monthly expenses, your assets, and why it would be financially difficult for you. So I think that you have a pretty clear case on that. And so 100% move forward.

Okay. Well, my next thing was, I'm looking on this paperwork and it gave me a local number to make an appointment with them. And hopefully I can do that on my off day or my delayed day going in. Yes. For sure. Yeah. Yeah. So I'm, I think I'm on the right track financially.

It's just this kind of put up. Yeah. I mean, it's just frustrating. It's a bump in the road. And you're having to deal with the government, which is always a trip. It's like going to DMV sometimes. Yeah, absolutely. Oh, my gosh.

So yeah, it'll take some effort, Kathy, on your end. But that effort is very much worth it for your situation. So don't give up. Yeah. And with the government you do, you have to be careful. because in many ways, it's hard, like if you call them on the line,

you're never getting through, you know? And they don't ever call you that's like they only contact you through the mail. So it can be like really, really frustrating, especially when you're dealing with like

your livelihood, which is your social security in her case, a major, it sounds like the major only part of her income. So it's a really big deal. But keep fighting.

Keep doing it. Let's go to some social questions, Rachel, because these are some of my favorites. All right. Where are they right in front of me? All right. So Dave from the Ramsey Baby Steps community, which, by the way, if you follow us and you just love the teaching and you want to stay motivated, we have an amazing baby steps community on Facebook.

There's so many folks in there and they're just motivating each other. It's a great place to be. But anyway, Dave from the Ramsey Baby Steps community says, I'm doing DoorDash to pay down debt and I'm wondering if I should be setting aside money now to pay the taxes next year. Or should I concentrate on paying down debt first and then where you're going to be. about the tax implications. No, you need to be putting money aside. Yep. Because I think you're a contractor, right?

Yep. With something like that. Yeah. You will be paying taxes. So, for sure, be putting money aside. That's actually one of the biggest problems we find with people when they are doing a side hustle. Then they're like a 1099 and they don't put taxes aside and the IRS bill comes.

And they're like, shook. And then you got to move that to the front because that's basically adding to the debt. So yes, be putting some of that money aside. I love that. Okay, that's a good one. Jeff says from Facebook, he says, we're just starting the baby steps and I have a question about baby step one. Do we save $2,000 since the emergency fund has to cover both me and my wife? That's a new one for me. Or is it a thousand dollars total for both of us? Yes, well, we get a lot of, yes, people that are not always happy with this one baby step. But listen, the point of the $1,000 baby step is to get something really quickly in the bank. And for a lot of people, they don't even have $1,000. So for some people listening, getting that is a big deal.

Yeah. And then that's just supposed to cover the ankle biters, like the things that just come up and you're like, oh, crap, I forgot about that, that. But if something really big does come up, and let's say you're throwing $2,000 a month of debt, if something big comes up, pause the debt snowball, that money that was going to debt, pile that up, fix the big emergency for a month or two, and then get back on it. So it's supposed to only be there for a short amount of time. But yes, that $1,000 is key. Well, thank you so much for hanging out with us today. Thank you for everybody in the booth for making this show happen. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace,

Christ Jesus.