The Ramsey Show - Break The Cycle And Build Wealth

Episode Date: March 30, 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. From the Ramsey Network in the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm George Camel, joined by Jade Warshaw this hour. Open phones at AAA 825-225. Marie kicks us off in Washington, D.C.

What's going on, Marie? Hello. I'm calling with what I hope it's a very simple ask and recommendation from you guys. I have a boyfriend of four years, and he simply refuses to talk to me about his debt or his financial situation. How do I convince him to trust me enough to discuss with me? It's been four years. I don't know if you can. I don't think there's a simple answer here other than get to the root of what's going on here. Why is he scared?

Is there trust issues? Does he have baggage? What do you think is behind it based on what you know about him? So I talked to him the other day about it, just so I can understand why. Yeah. Maybe he doesn't. And he reminded me, and I didn't remember this, that I loaned him like $4,000 a few years ago when he was purchasing his house. And he said, I treated it like a bank transaction.

and I was really stringent upon payback payments that he would have to make me. So that, okay, that's good. That means that he, that means there is a reason. And so there's likely some shame there. If he's thinking about that often thinking, man, she's strict, like she's serious about her money. He's probably afraid that if he reveals what's going on with his money, that you'll be judging him. and you'll leave him, abandon him. If he's not cut out for you, if he's not financially responsible enough for you.

And by the way, is that true? A little background on me and him. We're both retired military. He's a retired Marine. I'm retired Army. We both have good six-figure jobs. But on my side, I'm going to pay off my house in four years. I'm going to fully retire in five.

But he's not at that level because, you know, he's, He's divorced. He has kids in college. So I think because he sees how financially secure I am on my end and how really I budget down to the dime, right? Yeah. So how strict I am with my budget that I'll expect him to be that way and not understand why he had the debt he had. Well, is that true is my question. Now, it's fair for you to say I, like, have. a set of expectations like, yeah, I expect us to be a little bit more intentional or a lot bit more intentional. I expect certain things. But the question comes in, will you be judging him? Will your tone be judgmental? Will you? Like, how will? If he tonight says, you know what, Marie, let's talk and he divulges a lot of things that truly are shocking to you, how will you react?

Because that, if you can hold up the mirror and get a sense of who you really are and what you, do you know what I'm saying and kind of do a little bit of self analysis there that can help your next conversation with him and say you know what I can really see how you would be that way and and maybe set him up and say listen I can't guarantee that I won't maybe have a reaction are you still willing to engage in this with me and just you guys really talk like emotionally aware people yeah I do think I would be judgy I hate to say that but but that's honest yeah my he says your face is going to show immediately and I was like, I want to be able to be compassionate and understand your situation,

but I'm going to have to get that initial how I feel out so we can develop a plan to get, to assist him into getting better to help his finances. I think you being able to come into that and basically validate what he's already feeling is a really good first start. I also think more than, I mean, I don't know. know, George, but the bigger thing is why? Like, what's this all headed towards? Because you've been dating for four years. Are you thinking that you're going to get married? Is this the next step before the proposal? Like, why suddenly is all of this a big deal? Is my biggest question?

So we want to move in together and buy a house together. I'm a divorcee also. So I'm not sure on the marriage part. So that's a scary question for me. But I do believe we can cohabitate, but I don't want to cohabitate and feel that it's not fair between us both on our finances, that one person is putting in more than the other. I want us to go in with everything being equal and that we combine our households and be able to build that part of our life. Have you told him that? Yeah, he knows.

We've looked at houses, and I'm like, once I pay off my house, I'll take everything I put down in this house. the 700,000 I'd pay on this house, I'll put it on our new house. The issue is, if you do this through cohabitation, it's going to feel like he's a roommate and you've foot the bill. And I would not recommend cohabitation before marriage for a thousand reasons, but especially in your case, it's going to feel like there's a power imbalance. And I don't want that for him.

So what's going to happen over time, I'll tell you what happened 10 years from now. We fast forward. You're going to resent him and he's going to feel a lot of shame. Yeah. And it's never going to move forward. And so financial transparency is emotional transparency. You can't have one without the other. And so anything he's hiding now is just going to be magnified in marriage or if you cohabitate.

And so I think you need to align on the values and tell him straight up. I don't expect you to have the same financial brain and personality I do. But I do expect that we're aligned on financial values if we're going to combine our lives in any way, shape, or form. I agree. That's not high standards. That's the baseline. I agree. I would caution you, Marie, and again, you might have a different outlook on this and I, you know,

I can keep space for that. However, I've done this show for a little bit of time and I see this over and over. If you don't set fair expectations going forward, you're going to have a set of unrealistic expectations. And what I mean by that is you're setting yourself up in a scenario where you're viewing it as full commitment, but it's not really full commitment. And so as long as that gray area exists, which is, hey, I have this expectation of full commitment from you, even though there's truly not a full commitment because we're not married. You're over here holding this space for what if by not marrying him, but then you have this expectation of, I expect to be able to have these conversations. I expect you to do this. And all of those things, honestly, are the things

that take place in a fully committed relationship. So because of that, it's always going to feel a little imbalanced. He's probably always going to be wondering, like, is this enough or do I need to do more? Does this count or does this not count, right? Does it count for me to be able to go out and spend this money or not tell her or is that in some way wrong? It's always going to be confusing. Yeah.

I think at the root of it, I don't know him. I've never talked to him, but here's my guess. If he was to be fully known, you wouldn't love him the way you do now. that's his fear and he's he's been hurt I mean you both have been divorced you both have a lot of emotional baggage you're carrying into this thing

and so you need to understand what was money like in his past relationship was that a part of why it didn't work out but here's what I do know and you can put this on your mirror Marie you can't build a future with someone who's hiding their present it's impossible and so you can't ignore this

this is a giant red flag and I hope that you guys can resolve this you get the values you do remarry You do find love again. This would be the best Hallmark movie of all time if it worked out. So I'm rooting for you guys to make this thing work. But he can't hide this anymore.

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What's going on, Annie? Hi, how are you guys? We're doing great. How can we help today? Yeah, glad to hear you. So I, well, first I have to shout out of a friend who really has been encouraging me to listen to you guys for a few months now. And she knows I've been in a tight financial situation. I've just been too scared to take the first step.

But with her encouragement, I downloaded every dollar this week and I just had my first door dash shift on my lunch break to try and generate some extra margin. How did she convince you? I'm curious. Because there's a lot of people out there who want to convince their friend and it's like awkward. and they don't want to pry. How did she do this? So she's been, for one, just a huge cheerleader in every aspect of my life, but I actually suffered, I suffered a concession a car accident last year. Oh, man. I have an attorney, and I'm supposed to be getting my settlement in about a

month or two. And she's really been pushing me to figure out how I'm going to utilize that money to best kind of clear up my financial situation because I've been in a significant amount of debt for a couple of years now, living paycheck to paycheck on a $78,000. salary. Wow. How much debt have you, do you have? Right now I have 41,000 and some personal loans and credit card debt. Okay. And do you know? I'm sorry. I also have a car payment. I have a car payment that 7,000, not 7,000 a month, it's 7,000 remaining on the car. Got it. And when this settlement comes, in, do you know how much it's going to be or do you have a ballpark? I have a ballpark. It'll be between $33,000 and $40,000. Okay. So tell us a little bit about what caused you to accumulate,

you know, $48,000 of debt over the course of however many years. Honestly, it's down to poor financial planning and no financial education from my parents, honestly. I ended up taking out credit cards and not really realizing how quickly that would add up. I've also got just some personal stuff that's required me to make some like kind of ridiculous purchases over the last year for good reasons but things that I couldn't finance living paycheck to paycheck while paying off other debts. I won't make excuses for it. It's just been poor planning and just not having a good hand on my money, being impulsive, kind of relying on that endorphin hit of hitting, you know, submit on a purchase. So my question really is I'm about to get out of the majority of my debt.

I want to make sure that I don't find myself in this position again in two years. What can I do to shift my mindset to make sure that this sticks and that, you know, once I pay off all my debt or what I can with this settlement, I have a plan to pay off the rest and that, you know, dashing now will help me accelerate that. I just want to make sure, like I said, I don't find myself in this position again in a couple of years. So how can I shift my mindset? Yeah, well, I love that you're thinking ahead like that, even knowing that it could be a potential issue and understanding

that anytime you get a large sum of money, George, or even if you have a large income, money is not, it can't solve bad habits, right? You'll just burn through it, you'll blow through it. And I'm glad that you're seeing that. I can tell you, for me, my husband and I paid off $460,000 of debt over the course of seven and a half years.

And the biggest thing that I think allowed us to continue that lifestyle, even to this day, is over that time, you learn a lot, right? you actually learn why are credit cards bad? You actually learn why is it better to purchase cars and cash from now on? Not just, I don't like the feeling of debt. I'm paying it off. That won't allow it to stick.

And so what you're doing now, I would say, is let's bullet point that as education. So getting the education around the why behind the what, basically, why am I paying off the debt? Why are credit cards bad? Why do car loans suck? You know, why am I avoiding student loans? that is so powerful. It's the same thing of like, you know, when you learn what goes into McDonald's fries, it makes you not want to go to the drive-thru and get McDonald's fries anymore because you're like,

oh, God, that really is really bad, right? So keep listening to the show. And then the other part of that that I would say, honestly, it's very underrated. But the community of being around people who are doing the same things you're doing and kind of have the same mindset, it makes it a lot easier because now you're not the crazy one. you know when you're your buddy it's been so great for that yeah your buddy who put you on to ramsie like that's the type of folks you want to be around at this point so there's an emotional side of this and jade's been hitting on that there's a pragmatic side and i love this this deloney quote he always says

don't forget to remember and so think about the end of that sentence don't forget to remember how good it feels to not have any payments don't forget to remember how stressful life was when you were in crippling debt and you were paycheck to paycheck and so i think that's part of emotional side of going, I worked my butt off. I don't want to ever be in that situation again. And then there's the pragmatic side, which is, hey, let's have an emergency fund. That's our never go into debt, again, insurance plan if we have three to six months set aside. Because what reason would you really have to go into debt if you had 20 grand laying around? And then on top of that, doing a monthly budget, just paying attention to that amazing $78,000

income going, hey, I'm going to make a plan for this before a marketing company has a plan for. it before this Instagram ad has a plan for it. You've got to get ahead of those plans. And so you can create sinking funds. So maintenance and repairs, don't act like everything's a surprise in your life. That's how most people go through life, just reactive. They call the show and say, well, Jade, I didn't have a choice. I had to. Well, it just happened. I didn't know I was going to ever need new tires. And that's how broke people stay broke. So being proactive, staying ahead of it, get the emergency fund in place when you're out of debt. You've got to stay gazelle intends through that phase. Once you get out of debt, let's build up three to six months of

expenses, put away. And then what I do is I add friction to my life to make it more difficult to do things that I know are bad for me. Right? If you have donuts in the pantry, you're probably going to eat the donuts. So what I do financially, freeze your credit with all three credit bureaus so that no one including you can open debt in your name. So add some layers of friction, remove your card info from sites that are tempting you. You know, those are some pragmatic things you can do on top of the emotional side. I think the emotional side and mindset is more important, but I do, I'm a practical guy, so I like to get tactical with the things you can do. And you already have every dollar. So you know making a plan for your money is the number one way to get control of it

and not go back into debt. But then also, you've changed your identity, Annie. You're a different Annie than you were two years ago, aren't you? Yeah, I am. You're the kind of person who doesn't want to owe people money. You're the kind of person who doesn't buy things she can't afford, even if it's shiny and she had a hard week at work. Those are the kinds of people who build wealth. They're just so focused and they know who they are and nothing, nobody's going to change that. That's who you need to become in order to never go back into debt again.

Yeah, Annie, I'm going to send you a copy of my book what no one tells you about money because it really talks about all the things that George and I just laid out for you. And I think it's going to just help you get a better handle on it. And honestly, I was talking to, I don't remember who I was talking to the other day, George, but I was saying the folks who really, really succeed on the baby steps

and that it really clicks for them are the people who understand that it's not just about money. Like the principles that we teach, that behavior of being intentional and paying attention like you were saying, George, if you look at it long enough, you go, wait a second, this is really the equation that causes me to be successful in really any area of life. Whether it's you're trying to get in shape, you're trying to affect your diet, you're trying to be, you know, have a more intentional relationship with your loved ones.

It's all the same thing. It's about being intentional. It's about understanding how to set yourself up for success. It's about understanding like the cues that trigger you to do the wrong behaviors versus the things that trigger you to do the right behavior is all the same. And once you get that, that's when it's like no one can stop you. It's, it becomes part of who you are and how you view the world. Oh, you guys are so great. You're so motivating. I love this. We're happy to do it, Annie. Thank you so much for the call. Can I ask you one last quick question? Hit us.

Once I have some more margin available in my budget, I would love to invest in some more Ramsey Solutions like opportunities like Financial Peace University. At what point does I become a smart opportunity versus like when should I try and like knock out all the debt first? Like what comes first? I love that question. There's certain things that is like immediately. You know what reminds me of like should I wait, tell them in shape to get a personal trainer?

Yeah. Well, you're too late. already done it. And so it's worth the investment in your future. Now, lucky for you, Annie, since we like you so much, we're just going to give you Financial Peace University. So you don't have to pay for it. But it would have been worth the investment in Baby Step 2. Think about it. If that gets you at it, if 80 bucks gets you out of debt forever and causes you to build wealth and become a multimillionaire, was it worth the 80 bucks? Yes, ma'am. A hundred times over. So I love it, Annie. That's such a great question. We're so pumped for you to become debt-free real soon.

And Jay's right, at the root of the entire plan, it's just intentionality, delayed gratification, discipline. Live on less than you make. Burn more calories than you take in. That's how to lose weight. It's how to get out of debt. And it's a principle that will carry you very, very far in life. Thanks for the call. Hang on the line.

We'll get you those resources. If you're still overpaying on your phone bill every month, here's an idea. Stop it. That's money you can use to get out of debt. Build your emergency fund or just breathe a little easier. Switch to Boost Mobile. and you can unlock savings up to $600 a year compared to the big name carriers with no contracts and no price hikes. Bring your phone, keep your number, and pay just $25 a month forever on their unlimited plan.

Go to boostmobile.com slash Ramsey and make the switch today. Based on average annual payment of AT&T, Verizon and T-Mobile customers compared to 12 months on the BoostMobile Unlimited plan as of January 2026. See website for full details. Sandy is in Grand Rapids up next. What's going on, Brandy? Welcome to The Ramsey Show. Thank you so much for taking my call. It is an honor.

Absolutely. Honor for us, too. What's going on with you today? It's kind of like an interesting predicament. So I moved from a larger city, you know, so obviously, like, resources, opportunities, and I moved to a more, not even more, a significantly more rural and secluded area a couple years ago to live with my partner and because he owns a home. Whereas I was, you know, living in a bigger city, you know, paying a lot in rent. And we wanted to build our life together.

So instead of me paying all that money in rent, I moved away from these resources, away from these opportunities. I work from home. And my money was supposed to go into like, you know, renovating our home and starting, you know, investing in our life together. And I know if Dave was here, he would say that my first mistake was doing this before. There was a ring on my finger. And I don't necessarily agree with that. I don't know where the hour is because it's his home. Right.

Absolutely. And that's absolutely true. But I want to invest in a life with him and his daughter. Okay. And it's more than... that, well, so that's the presumption I've been under, you know, as he moved me away from my life and I made these sacrifices. Hold up. Roll it back, run it back just a little bit.

Yeah, because he didn't move you. You chose to move. Did he kidnap you, put you in a trunk? Because if so, we need to call the police. No, you're totally right. Okay, scared me. Okay. We're being strong on it, but it's so important that you do own your part of this.

as you untangle this, because it'll just help you have those fair conversations with him when the time comes for you to talk about all of this? No, you're completely right. Cool, cool. So you're kind of trying to, you're thinking ahead going, okay, I moved out here because I did see a future and now what? Now what's happening? What's your question?

So a couple years ago in fall of, of, my car broke down. And we tried to repair it. He's very handy. But it was just a very crappy car. It was beyond repair, unfortunately, to do even beyond our best efforts. So we just scrapped it. And I've tried very hard to save, you know, but I, even the job that I work,

I make $37,000 a year doing this job, paying most of the expenses. here because he's a semi-truck driver. He's gone almost all week. He's rarely ever home. So we decided that it was fair that I pay most of the expenses here. He doesn't make money when he's gone driving the truck? He doesn't make money? That doesn't make sense that just because you're home, you pay it.

Are you saying, like, physically I'm the one who puts the check in the mail, or are you saying, like, financially, I'm the one that covers it? Of all expenses? So he paid for the mortgage and the property tax. says, I pay for the internet here. I pay for the electricity here. How does that break out, like, how does that break out percentage-wise? Is it like 50-50 or is it like 60-40?

Are you paying 300 bucks a month and he pays 1,500? Yeah, that's, yeah, he pays significantly more money each month than I do because the mortgage is a lot more than what I pay each month for stuff. And that's essentially your rent because you're not really paying rent. Right. So you're saying you pay a greater percentage of your money than you. he does. Is that what you're saying? Because you made it seem like you were doing more. Wait, sorry. Sorry. I didn't. It made it sound like... You said I'm covering most of the expenses,

but percentage-wise, you're covering 10 or 20 percent. No. Correct. Yeah. Got it. Yep. And then I cover, I cover the groceries in the home. I cover like the household essentials and stuff that we need, any kinds of, like anything that we use in the home, I cover. Okay. So where, tell us where the problem is. Tell us where the rub is. So, so the, My thing is, is that I do a lot to support the home, especially him and his daughter. And the issue is that I don't make very much, I don't make enough money to really save a lot. And so I take that back. I do make enough money to save.

There have been setbacks. Like, I got an unexpected ticket from a beach in the next town over because apparently we went on a red flag day and we didn't know. Right, but this is normal life. This is life. Tell us where the problem is. So the problem is, is I have, I haven't had a car in all this time, and he puts an immense amount of pressure on me for not having a car and does not, like, doesn't want to help me get there. And it's fine that he doesn't want to help me get there. But the problem is, is like, I don't know why I came down here to do it by myself because the reason I came here is because I was under the impression that I was making the sacrifice.

to be here in order for us to do things together. Yeah. Like I stepped away from an area where I had opportunities to make more money and to be able to support myself alone. I think you made a lot of assumptions, you had a lot of unfair expectations, and now you have a lot of resentment toward this guy, and you guys aren't even married. He owes you nothing.

I mean, he could break up with you today. Right. Absolutely. I think you need to move back home. Sure. And that's what I've been thinking about, too. And the thing is, is it wasn't assumptions. These were conversations that were had.

Right. Right. And I believe that. I believe you guys probably spoke about it and it sounded really good for both of you. I mean, you're not, it had to have made sense in your mind for you to move out there. But the truth is, absolutely. The truth is he doesn't have the motivation to hold up that end of the bargain because why does he need to? He's got everything he wants.

He's got a woman at home that's taking care of his kid. You know, you guys have whatever relationship that you have, you know, romantically. And for him, it's like, why? Like, this seems pretty good. Like, it's pretty good for him. Exactly. And I just, to me. And he's under no obligation to provide for his girlfriend financially.

Yeah. Now, if he wanted to, that's his prerogative. But he clearly doesn't want to. Mm-hmm. Now, can I say something that you might not like? But this is, take it or leave it. but this is just me trying to be, you know, your buddy, us, us having lunch together. I don't know, but there might be part of this.

And you can, you shoot me straight. There might be part of this that, because there's two sides of every story, he might be experiencing you in a way that goes, you know, this girl, like, she's kind of, like, left her whole life and she's kind of following me. And she's kind of, I just want to see, can she, will she do anything for herself? Like, she left her job to do this. I want to see, like, maybe he's. having this side where he's like, I want to see what she's going to do.

Is she going to pursue a job that's more than $37,000? Is she going to, maybe he has a set of expectations that he's waiting to see if you'll do? I don't know if I'm right. I'm not trying to make him the bad guy or you the bad guy. I'm just trying to see it from both sides. Yeah. Oh, and we, well, we have conversations about this, like, frequently because I, well, and that's the thing. I lived in this big, larger area, I was actively pursuing career opportunities, like,

actively furthering my career and sacrifice, like, that's what I mean when I made sacrifices, huge sacrifices to be here because I thought that we were, you know, we were going to be supporting each other. Like, that's what I mean, like, you know. And to be fair, that is, that's an initial sacrifice. And I hear you on that. I think you're exactly, that is a huge sacrifice. My question is, do you have to continue to live like that? Or can you go, okay, I sacrifice my big job and all this. I'm here now. Do I have to stay like this?

Or what is it that I can do to make the best of this opportunity? Or have you truly already exhausted everything and you've made the best of everything that you can? Because if that's the case, then George, yeah, George is right. It's like, if that's not what you want out of your life, yeah, you got to move it on. Mm-hmm. Because, like, when I'm like, I'm not even like asking. to be provided with like a nice vehicle. I'm like, I'm just like a way to get from like a to B. I'll be honest with you. I'm going to be dead honest with you. I don't think he needs to provide you

for a vehicle. I don't think that's going to be good for either of you because then you'll be reliant on him. I really do think that you need to go out and make this happen. And if you don't feel like you can be your best self in that environment, you need to move on and do what's best for you. You've got a lot of resentment build up, Brandy. And I don't know if we can. pop that bubble and diffuse it all. I think you just need to reverse course on this plan. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it.

And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Me too.

I mean, you're going to have a crisis here. And, you know, you've got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow. That's exactly. These are the two options. And take care of your dad-gum family, man. Term life insurance can replace income, pay off dads, cover funeral expenses so your family can

actually have the opportunity to just be sad. Yeah. To just miss you. That's exactly what it's supposed to be. It's saying, I love you to your family, term life insurance. Jeff Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust.

Go to Zander.com or call 800 356-4282. Tax season is upon us. And if you want to get some free checklist, some guides that'll help you file, go to ramsysolutions.com slash taxes. Beth is in New York City up next. Beth, welcome to the Ramsey Show. Thank you so much for taking my call. Sure.

Well, first off, so a sister in my church bought me the money makeover book and the workbook, and I download the app, so I'm ready to, you know, take responsibility and make changes to my life. Love it. Yeah, it's all good stuff. So I just have one problem.

So as I'm going through my numbers, and I'm literally in the workbook writing. Like, I'm the problem when it comes to self-employment tax. So I have to put aside money every month for self-employment tax, and I can make quarterly or yearly payments, right? Yep. And so I'm finding myself, I did pretty good last year, but what happened was if something comes up or if anything,

I go into that account, which is part of my bank account. I put it in a savings and I use it. And then when I get paid. the next month and then I put the money back. So I'm not being so strict. So you're dipping into your tax savings and using it and then you don't have enough to pay the taxes. Right.

But like I said, I paid for this year. I filed everything was good, but I had to, I've been doing this back and forth. For three months, I do so well on strict. What, how can I put this money aside and not even look at it? It's not even, because my paycheck comes in and then like I automatic, I have the transfer from my checking to that saving account, but it's there. I see it. Because it's connected.

Okay. The solution is simple. You put the cookie jar high enough that you can't reach it without a really tall ladder that you've got to go get from a neighbor's house. You know what I mean? Yeah. So that's what I would do personally. I would go, you know, you can sign up for our Fairwind's high-heald savings account,

fairwins.org slash Ramsey, and it's a different bank than you have now. And then send the tax money over there and pay the taxes out of that account. And make sure it doesn't have a debit card associated with it. That's what we used to do. We would send it to a savings account that didn't have a debit card attached to it. And because it was a separate bank, and in our case, it was an online bank, you couldn't just get it. It would take like three days to get that money. You got to go through a few hoops just to access it.

And so that's what I would do. Now, we need to fix the root problem, which is you needing to dip into savings to cover these expenses. But in the meantime, I still would protect myself for. myself. Yeah, what's happening in your month to month that this is constantly being a thing? Because I'm guessing this is like a decent amount of money. I mean, it's probably a couple of thousand bucks, right? So I put aside now starting the first year of my income. So I have to put aside $600, I'm sorry, $500 every month. Okay. Just to put it aside. So $1,500 a quarter. So that means we've got a month-to-month budget problem of around $500.

Yeah, so I'm a single mom, and I do live months and months. That's something also that I realize and accepted while reading a book. I'm not done yet. And also, you know, the same thing goes with my emergency money. I put the money aside. I do good for a month or two or three, and then something comes up. I have to dig in. What are the types of things that come up?

Because what I want to determine is, is this really a, I need more income to cover the things that I really need that I'm forgetting to budget for? Or is it a thing that, hey, these kind of first, of listings pop up and I just don't say no to them. Which one is it? So it's that I have to basically be more strict with my money. So the app helped me when I put in the numbers. I'm like, wow, I really do have two more money left over than I thought, right? I spend too much money in groceries. Okay. Also, things come up like I sign up my son for soccer, which I cannot not do that. I don't want to take away something from me less just because mom has one income. I can see that.

So there you go. Yeah, so I went into my self-employment tax and I paid and I took out $550, right? Right. So we need to find something else. We need to find another category. If you're saying, hey, soccer's the one thing I'm just not going to budge on, we need to find another category or multiple categories that you can pull this money from. Or we need to go make more money.

Or more money. That could be it too. But think about it this way. If you worked for someone else, like an employer, that money would have never touched your account. So you need to picture this like, untouchable money that is no longer yours because it's not. It is Uncle Sam's. Yeah. And if you think about it that way, then you're not going to be tempted to touch it. Think about it like you're illegally accessing this money because it's the government's. Right. And if anything, I kind of wish

that I wouldn't even get that money with the paycheck. Well, that's what I'm wondering, can you do a direct, let's say a direct deposit of whatever the 500 bucks is? Let's say that's 20%. Yeah. No, I have to make, I have to make those payments online. myself through the EFT, whatever that left of it. Right, but when you do it to use them. I'm saying the deposits from how you get paid over straight to that account. So it actually never touches your checking account. This is my big question.

Where should I put that money so that I don't see it? But why can't you directly, why can't you directly pay it to EFTPS and just do it, do it monthly instead of stacking it up for the quarter? Because the amount is still going to be the same regardless of when you make the transfer. that's possible. I think that it is. Check in on that because it's going to, when you go on that site, it's going to ask you to select what quarter, right, for Q1, Q2. And as long as you're selecting, hey, this is for Q1 and you're paying in those taxes, there's no real benefit to waiting for the quarter other than the fact that it typically is a quarterly thing. You can check my information

on that, but I remember doing that. I used to handle that for Sam and I's business. And I would just, when the money came, because I was like you, I was like, I was like, I don't even. want to deal with this. I would just go in and pay it directly and it just made managing the books easier. And you said, you know, which account? I was talking about setting up a whole different bank account. And as an example, Fairwinds has a great one, a high-yield savings account. It's got an account number, a routing number, and so you can set that all up. And again, that's fairwins.org slash Ramsey to get that smart bundle. It has a no-fee checking and high-yield savings along with it. So check that out. I hope that helps as a Band-Aid, but again, we need to get to the root problems so you're not

underwater each month. Yeah. So George, let's for a second talk about budgeting basics because this is something that, you know, most people is like, hey, we know what it is, but I'm sure there's plenty of people who don't. When we talk about budgeting all the time, it's a very simple equation. We're trying to put our income down. We're trying to subtract all of our expenses. And what you hope to have at the end of that is margin, right? We hope that we can find a number that's in the positive that we can use to go towards whatever your, you know, goals are, whatever baby step you're on. If for some reason you have not done a budget, you need to do that today. Because what you're going to find is you're either going to have a

number in the red that is, oh my gosh, I'm over budget. No wonder I've been using a credit card. No wonder I've been paying for my savings. Or you're going to have, you're going to surprise yourself and you're going to go, wait a second. If I actually have any bit of discipline here, I could have some real cash at my disposal at the end of every month. And so I just think, George, a lot of people go through and it's just kind of a guessing game of like, I'll do a little here, a little there, and if I go over, it's okay, I'll just buy the old credit card. I remember one girl, she said, I don't look at my checking account because I don't need that negative energy in my life.

So, wow, that is the most hilarious form of denial ever. And so a budget, all it does is reveal. It's not going to control you. You control the budget, but it's going to reveal where your money's going once you see all of your transactions, once you see your income. And most people go, oh, wow, I didn't realize I was spending that much. Like, I make good money. I can actually solve this problem with the money I'm making right now.

But until you pay attention to realize where those money leaks are and where you can do better, and honestly, it gets fun and a little bit addictive once you realize, hmm, what else can I cut down on? Yes. Because you don't need to spend that much money on a cell phone plan. If you're spending $120 and you go down to $25, you switch to Boost Mobile, it's like, great, you just freed up $100 a month. I also think part of that is there's an assumption that I'm going to dislike this.

There's the assumption that I, you know, when we think, about a budget, we think about, we picture someone telling us no, like a big voice out of the sky like, no, you can't have that, you can't spend. When really, when you start to do a budget for the first time, you start to realize, actually, none of that's true. I'm just really in control, which that's a great feeling to feel like I'm in control of everything. Actually, no one tells me what to do. I'm just deciding this and I have like power over this. It's a very empowering feeling and I would challenge the person who has actually never actually tried budgeting but has a bunch of like emotions or thoughts or opinions around it and I'm like have you actually

even tried it you know what it feels like it's if you don't do a budget you're like in the passenger seat of a vehicle grabbing the oh crap bar that's what I call it I don't know the official name when you're bumping around and you grab oh gosh this person's a terrible driver I'm like yeah because no one's in the driver's seat wow it's just vibes and so as soon as you get in the driver's seat, you go, oh, I can avoid that pothole if I just pay attention. But you'd rather be in the passenger seat, doom-scrolling Instagram holding the O crap bar. And so that's what a budget does. And if you want to check out the one that we've got, I think it's the best one out there on the market. It's called Every Dollar. You can jump on to Everydollar.com, download it in the app store,

and start for free today. It really will give you an amazing sense of control. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about. CHM is not health insurance. It's a health cost-sharing ministry, a biblical community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want.

That kind of freedom is big, especially if you're self-employed between jobs or you just need something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well.

And right now, CHM is offering new members a 50% credit towards their first month of membership. Get started at CHMinestries.org slash budget and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. Welcome back to The Ramsey Show in the Fair Winds Credit Union Studio. I'm George Camel, joined by Jade Warshaw, and it's a free call at AAA 825-5-225. If you need some advice, some help, just the right next step for where you feel stuck. We will try our best to help you get there. Emily is in Austin, Texas up next.

Emily, welcome to the show. Hello. Hey, how can we help? So, I have a question. And me and my husband live a debt-free life. We're currently trying to have a family. And we're not rich by any means, but we're able to live beneath our means and save them each month. My question is, my mother is almost 73.

She has nothing save her retirement. and we have her set up for a Medicaid qualifying trust in the event that she has to go into a nursing home, she can get the care that she needs. She frequently drops hints that she would love to move in with us. And for various reasons, that's not an option. My question is, what is the best way to kind of have and maintain that boundary? and also help her that she needs. I feel like I haven't gotten anywhere

when I've tried to have frank conversations with her about where she stands financially, but I also don't want to go into a sinkhole over this. And I love that you know that, that that's not even an option. It's very tough to navigate. And I can tell you this. There is, if you have in your mom,

mind this picture of you saying, here's what it is, mom, and her coming back and going, oh, okay, that makes sense. It's just likely not going to be like that. Because if she's dropping hints, it's because that's what she wants. And you're saying something completely contrary to that. And I think the cleanest way to do this is to kind of have written down what you want to say and to make sure that you don't swerve away from that, to make sure that her reactions don't make you go in a different direction and you just talk in a very clean and I'm not saying be robotic but very clean mom I've talked to my husband here's what we've decided like being being very clear not we were thinking that or we were hoping that no here's what we've decided we have a Medicaid uh a trust

here for you that's what's going to kick in when this happens in the meantime you will stay you know you will live x y z like do you see what I'm saying you're saying what will happen And then at the end of that, that's it. And then what you can do, and it's something I've done. I've said, you know, I'm also going to send this to you so that you can look back on it and remember what we talked about. And then I'll, you know, send them the points in a text or send it or drop the file just so that it's very clean. And what it portrays is that I've given this a lot of thought. It portrays that I don't plan on changing my mind because I'm giving you the documentation of it so that you can

look back on that instead of continuing to text me the same question over and over again, right? So that's the way I would handle it. And I'm just letting you know if you can be polite, but very clean and just hope for hope for the best, basically. We say around here, to be unclear, is to be unkind. And so it's all about clarity, no more hints, because what that is, is her passive aggressively asking without asking. Right. And if you let the hints float around, then the hard, The conversation just gets harder. Right. And I have told her before, like, that will not be an option.

Like, we do not have space and capacity. But also on a deeper level, it's not good for a marriage. Absolutely. And I think what you said, just having it in writing as well after having another conversation. Yeah. And saying... You might keep asking, but the answer will stay the same. Well, then you pivot to solutions and you go, okay, we want to help you figure this out,

but our house is not the plan. And so now it becomes we're working on some, we're looking at something together instead of facing each other in opposition. I think too, when you can say, I don't know your husband's name, but when you can say Bob and I talked and Bob and I have decided, I think that also reiterates that the family unit has changed, right? And it's now you and your husband who have your family who are making those sets of decisions. and it's kind of just a subliminal way of reminding her, hey, things have changed. And I have to make decisions about my family with my family. Obviously, you're still part of my family,

but it's different now. Have you helped her with the actual budget to show, hey, here's how much you're actually making. So here's the kind of life you can actually afford. I have not done that. I have tried to help her as far as like with savings and things. like that. And kind of the conclusion that I've come to, if it's not her idea or if it's not something that she likes, then it's not going to happen. Right. So I've tried to let her know

before just because I'm not doing what you like does not mean that I'm not being helpful for you. You also have to take, you know, the help that's being offered. I mean, it's the old beggars can't be choosers. It's this is the life that you created for yourself. We had no involvement in you having no retirement. Now, you made choices along the way. Yes, you took care of us. You raised us. And we love you for that.

But the truth is, you have nothing in retirement. So we need to figure out how to live off of your social security. Right. Any assets she has. Can she sell anything? Can she do a little something part time if she's healthy and able to try to bring a little more income if she wants X, Y, Z lifestyle. And you can even remind her of the choices that, like, if you've suggested something and she's like, oh, I don't want to do that. that, right? But then a couple of days later, she's talking about the results of not doing that.

Like if you've said, hey, you're not going to be able to spend money on this because you don't have it, right? And then a few days later, she's like, man, I'm having a hard time doing this. And you're like, well, I try to tell you that. What you can do is remind her by saying, I'm not going to be able to help you because remember, we talked about this. And so eventually saying, I'm not able to help with that. And then if she says, why, it's, well, because you've said that you're not willing to. and that's going to remind her, oh, this really is. Here's the help we are willing to give. You can either choose or to accept or reject that help. Yeah.

But that's it. This is what we can do. And that's not a fun conversation. We're making this sound like, just do this and it's going to be great. This is going to be ongoing over time, but you just need to keep being clear, keep being firm. Because if you budge just one inch, she's going to go, oh, I have an end. Right. I just keep pushing on this little loose jenga piece.

I can get this thing to crumble. Yeah. And you also have the ability, you know, you can decide based on what you know about that relationship. How many times am I going to answer this question or how many times am I going to entertain this conversation about this specific topic? So you can decide, hey, after, I'll give her like three or four times on it. But after four, I'm going to then say, I've said this a couple of times now.

I'm no longer going to discuss this one with you. Like, you can say that. And then you hold yourself to that. These are really tough things, but they're good boundary exercises to start practicing. Thank you, Beth, so much. Yeah, I'm so sorry, Emily. This is one of those things where it's like you're now kind of having to do the parenting. The role's flip-flot, man.

And it's so weird. They do. It's a good reminder that the biggest expense that's facing a generation right now is not your kids' college. It's your parents' care. It's called the Burden Retirement, where you now have to fund your parents' care, and potentially raise your own kids. So now you've got this kind of sandwich generation. Yes.

Who are stuck between with their own financial problems and they don't want mom on the street, but they also can't take her on as a financial burden. And that's where these conversations early, often with clarity and kindness is the only path forward. You've worked too hard to get control of your money just to let strangers control your data. Think about it. Just about every time you sign up for a newsletter,

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Because when you protect your privacy, you protect your peace and your freedom. So go to join deleteme.com slash Ramsey to get 20% off their annual plans and take back control. That's joined delete me.com slash Ramsey. Laura is in Portland, Maine up next. Welcome to the show. How can we help? Thank you for taking my call. Great to speak with you guys.

well. Okay. I am on Baby Step 2. I am Bezell Intentz now. And here's the dilemma. I have two consumer loans. One loan is a vehicle secure loan through my bank. And the other one is the dreaded 401K loans.

I do have $4,000 in credit card of the total is 33. 400 roughly of everything. But do I switch gears and make this 401k loan a priority? And I know now that I listen to the show that I'm probably never, ever going to recommend a 401k loan to anyone, let alone myself. But further than that, my company is starting to do some downsizing. Uh-oh. So I also have some worry.

And I'm on baby step too. So, I mean, my backup is a thousand dollar savings if anything was to happen. Yeah. So for those listening, she's worried about that because if you lose your job, that can become due very fast because the loan you owe that money. It can become due as quickly as like 60 to 90 days in some cases or a calendar year in other cases. It really just depends. Potentially by your tax filing deadline for the following years that might give you some runway, but I would find out. That's your verse homework assignment.

Yes, yes. Good thought. I have not dug into that. Yeah, I would just get in touch with HR and say, hey, what would happen to my loan if, for some reason, I was separated from the company? That's it. And then you'll kind of know what happens and when and what the ramifications are, how soon you need to pay. You have $1,000 in savings now? I do.

Okay. How imminent are these layoffs? They're random. They don't. Right now, my area seems to be okay, but that being said, we've had a definite down-check in the amount of work that my area sees. Okay. So, what do you make? That's where I'm $56,000 a year.

What's the car loan? What's the balance on that? $13,350. Okay. And the 401K loan balance? $15,970. Okay. And then the credit card?

cards? 4,100. All right. So the 401K line would be second in the debt snowball right now, and you're going, hey, should I put that up first because of this layoff situation? It'd be in a precarious spot. Right. Would there be severance with these layoffs? Have you seen that happen?

I have seen severance. I actually have co-workers that I know that they've been put in where they have a severance option. They're given the choice to find something else within the company within 60 days or take the severance, which would be not a horrible plan. I have over 20 years with this company. Yeah. I'm just tempted to go, hey, should you pause everything and just stack up cash right now? And that way, number one, you have a little emergency padding if you do get laid off. And number two, you might have enough to cover the whole 401K loan by the time this stuff blows over.

Honestly, if I woke up in your shoes, that's exactly what I would do. And that's been my, that's what I wake up at 2 a.m. thinking about. Yeah, because it's a storm, and you have the ability to see the storm coming, which is a little bit of benefit. And so it's like, yeah, if you can start prepping and start doing all the things that are going to put you in a better situation, 100% I would do that. Are you single? Okay. I'm married. Okay.

Is your spouse working outside the home? Yes. Okay, what do they make? And he covers most of, he makes around 130. Oh, so you have a household income of 1806? Yes. He's covering most of the household expenses right now so I can focus on this. And he's great. I mean, you guys have separate finances, it sounds like. We do, we do. We're not totally, he's not totally on board with Ramsey's plan. So he wouldn't help you pay off this day.

that with his amazing income? He could. He's balancing everything right now. When I say everything, like he's paying the mortgage all the way down to the groceries to the internet. Well, you said he could. We want to know would he.

Obviously, he could. He has the money. Would he take a bullet for you? He would. But he wouldn't help you pay off a 401k loan. He would if he really had to. I mean, it sounds like he really has to. Here's the thing.

If you were, listen, If my wife was stressed to the gills, staying up until 2 a.m. worried about this layoff in 401k, loan, I'm not going to go, man, good luck, honey. Sounds like a tough spot. I'm going to go take my $130,000 salary and cover the mortgage. Honestly, that is wild behavior. Yes, I agree. So part of this problem is due to the lack of unity in your own marriage. Yes, I agree. And it's probably what got you here, the fact that you needed to turn to debt because you are basically on your own financially. Right. I mean, I'm a spender and he's the saver and I'm the worrier and he's the, don't worry, if this happens, honey, we'll handle it. And I'm just like, but how will we? How long have you guys been married? We've been together for 24 years and we've been married for 12.

How much does he have in savings? He's got 2,000-ish. And he's the saver? He's the saver. Whoa. Yikes. He just paid off all his debt too. Oh, good.

I mean, we're doing the plan. We're not doing the plan exactly. No, you're not doing the plan. Don't be honest. You guys would have been completely debt-free by now if you were doing this thing together. Yeah. We probably would. Because there's zero accountability, zero transparency, and that's caused a lot of this mayhem.

You guys need to get to the bottom of why that is. If you can solve that, then we can be less freaked out of. about all of this other stuff. That's what I'm getting at. Right. Right. But the Band-Aid is you pause your own debt snowball and try to stack up some cash. But it's going to be a whole lot harder on 56 than it would be on 186. Right.

You could save $15,000 in three months if you guys work together. And I think part of it is I feel guilty that I spent and didn't make the best choices. And I, you know, here's the shoes. And, oh, I can afford this. And why not do this? That's fine. That's fine. Like, I think it's fair to have the accountability of being able to look back on previous actions and go, man, that wasn't smart or I shouldn't have done that. There's health to that and being able to, you know, like, take responsibility for bad choices. But don't you agree there comes a point where it's kind of like, all right, that's enough? Like, have you ever talked to, have you ever been in a conversation with somebody and they keep bringing up something? And after a while you go, you have to set that boundary and go, hey, I don't want to keep talking about that. right don't you think there's that time that you with your own self you go yeah i know i don't want to keep talking about that that was like 10 years ago or that was like two years ago that's enough

i don't want to keep talking about let it go man right right so i think you just have to do that with yourself um as well because otherwise you're just gonna that's going to be the refrain that is always in your brain why you can't work together well after all i did do that thing 10 years ago Like, you got to stop. Yeah. And if he's willing to, if you tell me, he's truly willing to do this, but the only reason you're not is because you feel guilty, then then I'm singing that even louder to you. Like, hey, let it go, man. Like, you got to let it stop.

Because everybody makes mistakes. He's made mistakes too. Right? Right. Right. Oh, yes. We both have. Yes.

We definitely have learned some lessons when it comes to money. I mean, I feel like we need to sit down, both read the total money makeover, talk about it. Say that to him. And not leading with an attack, but just leading with, hey, I've done a real terrible job in this marriage, and I apologize, and I feel like we have zero unity, and I would love to get on the same page. I know it's been 24 years. I know it's hard to teach an old dog new tricks, but I think our marriage and future are worth it. It's hard to argue with that. Nothing for him to really disagree with there.

He's going to go, yeah, you're right. And I've learned so much from this show. I mean, he doesn't listen because he's not able to go to the type of work he does. I just have to say Is it illegal for him to listen to the show? I didn't know there was jobs like that. I know I'm like at night. I'm on a walk.

No, he works in construction and he works in the field and he just wouldn't be able to. I mean, he has earplugs in, just not, you know, they're not earplog. And his commute home, he needs just dead silence just to recover from the day, apparently. Well, I'm wishing you guys the best,

Laura, in cleaning this mess up. There's a lot of layers to this, but you will be okay in the end, especially if you can get some unity. When you're drowning in credit card debt and collectors start threatening lawsuits, a rep from some call center debt relief company can't protect you. A lot of so-called debt relief programs leave people wondering, am I actually protected if I get sued? When all you've got is a legal plan added on as an upsell,

of course you feel stuck. But Guardian isn't another debt relief company. They're real attorney. And with Guardian, you're assigned an attorney from day one. That means if a creditor sues, you're not scrambling, and you're not hit with surprise legal fees. Now, look, I'm telling you straight, debt settlement isn't pretty. I'd rather see you get out of debt the old-fashioned way. But if you're out of options and you're staring down bankruptcy, Guardian gives you real protection and a path forward.

Guardian's attorneys have helped over 55,000 people across the country settle more than $600 million dollars in debt, not with gimmicks, with legal expertise. So if you want real help, instead of a sales pitch, go to guardianlit.com slash Ramsey. That's guardian, l-it.com slash Ramsey. Attorney advertising, results may vary and no specific outcomes guaranteed. Jay, that just realized something crazy. What's that? They'll live like no one else cruises less than a year away. Isn't that weird? Like one year from now, we'll be back from the cruise and I'll be tan and better looking. It's going to take. a year for you to get tan? And better looking. Yeah, both of them, both and. But it really was a blast

last time we did it. That was the first one. We're bringing it back in 2027. They'll live like no one else cruise. This is for a very specific person. If you are debt-free, you've got the emergency fund. You're in Baby Step 4 plus. This is the cruise to celebrate with us in the Western Caribbean. It's the only cruise where you can hang out with all of us personalities and Dave Ramsey. Seven days in paradise, poolside chats, live Q&A sessions, so much more. So do not wait. The ship is over halfway full already. The Neptune suites have already sold out. Go lock in your spot with a $600 deposit before it's too late. You can click the link in the show notes or just go to ramsysolutions.com slash events. All right. Max is in New York City up next. What's going on, Max?

Yeah. So you're going to have a ton of questions to how I got in this hole. But, you know, I'm 26. I'm in New York City. and I found myself in the 14, close to $15,000 in credit card debt unemployed and renting a shoe box, 184 square foot apartment for 2750 a month. And, you know, I'm not, I know I'm not the first person to find myself in this hole, but I just don't see a way out of it.

And, you know, my best ideas at the moment or take out another credit card with a 0% APR balance transfer for, I don't know, 12, 21 months and just push this debt down the road. That's your best idea? Well, you know, we'll get to some of the backstory if you want, but, you know, that or do I, you know, at 26 years old, is it worth just looking into filing bankruptcy? Are you a New Yorker or did you move there to try to pursue something? No.

So I came here on a suggestion because I was at complete rock bottom and I had nowhere else to go. And somebody else was willing to float the first six months of my living expenses to be here. I got out of my third residential rehab program for drug and alcohol abuse. You know, I just made it to 18 months clean and sober for the first time of my life. Wow. That's impressive. So, yeah, I'm very proud of that. know, and I'm, you know, like, diving into spirituality and, you know, trying to strengthen

a relationship with God and can't, you know, I can't believe that I got here. And now I'm like, what the hell? Where do I even start? I have just no financial literacy that was never part of mine upbringing with my parents. And I'm just feeling, feeling screwed. Yeah. What was it, what were you doing? What was the work you were doing before it went sideways? Yeah. After, you know, after applying to every entry-level position, um, I, was given a job by someone in a 12-step program recovery program. He owned a bit of a K-9 concierge service, and he allowed me to walk dogs for him.

Wow. Is there anything on your record that would make it tough for you to get employment like anybody else? Yeah, I mean, I've been turned out. Yeah, yes, there is. And the reason I feel stuck in New York City is because I am not legally allowed to drive anywhere in the country. Understood. And so I came to New York City for the subway. So you need somewhere with public transit.

But there's a lot of options for that. So you're not stuck in New York City or stuck in a city that has some way to get around with public transportation. Yeah. Okay. What were you making doing the Canaan concierge? Right at about 60 grand a year. That's what I was on par for. Wow.

Have you been looking for jobs? Is that where you want to stay right now? Could you jump to a different, similar job? Um, I've, I just, I've applied everywhere, um, except bars and restaurants, because I'm, I'll be honest, I'm a little worried about going in back. I was a bartender before I got sober. And we're going to say no to that. Like, going to that. Yeah. Definitely not. I mean, I've applied, I've applied for, you know, Amazon. I've applied for UPS. At anything, entry level I've applied to, I just cannot get hired. The one job offer I've gotten in the past two weeks of looking for a job,

was 100% commission based for Verizon. And, you know, and I... We need something stable right now. We don't need, like, maybe I'll make money in three months. Do you think that the reason you weren't able to get on at Amazon and UPS in those places, was it because of what might be on your record, or do you just think I just didn't get hired? I didn't even get a call back for an interview. Right.

And what I'm trying to ascertain is, do we need to start thinking? about what are things you can do to create income on your own. And if that's the case, that puts me in a different headspace because I go, okay, service oriented things that you could provide for other people that don't require, that you can use public transportation to do. That's the headspace I'm kind of going in. And some of that makes me think, man, I wonder if a suburban area would be better for you because then it's like, hey, I do yard work, I do lawn services. If there's any sort of trade that you can do and become kind of a handyman. Like, I'm trying to think of things that you can do

that don't require someone else to have to hire you and have to approve of you, that you can just start today and start with what you have, but also navigate the transportation aspect of it. I get that. And I'm not, I'll do just about anything. I know you will, yeah. Get you a bike off a Craigslist and start doing deliveries and courier services.

There you go. I mean, the weather's nicer New York City right now, too, which is perfect. Yeah, I know. beautiful out today. I have $25 to my name. Yeah. So right now you're on fire right now so you're like, hey guys. So I'm confused. Who was floating this

2750 rent? Yeah, it was somebody who knows. Because you never could have afforded this. Even making the 60, that was eating up all of your income. It was eating up all my income. I was, yeah, my mom, my mom gave me 700 bucks a month to help

for the first six months of this lease. And she said, this is all I can do after this, you're done, and I graciously accepted it, that six months is up, and I've been, you know, I've been, I've been, I've been biting the 2750 and, you know, living off of food stamps. Have you gone back to the 12-step program to seek other employment? If that's who gave you this job? Right, yeah.

I mean, I've been in the room, you know, pretty much begging for jobs. And, you know, it's also at the beginning of the year and, you know, not ever been hiring like they are and, you know, late summer to, you know, getting into the holiday season. I've been, I've tried that route and, you know, I'm going to continue to do so. What's your landlord going to do when you don't make rent next month? Well, that's, I have no clue, you know. I would be letting him know the situation. I wouldn't wait until the day comes where he's knocking on your door going, where's the check? I have a feeling I know the answer to this, but you're going to probably say, do not put it on a credit card. Absolutely not. And I would be looking at your lease agreement and

studying up on that to figure out of this thing because there's probably going to be some penalties to break the lease and if you don't pay and if he it's going to be expensive and difficult to evict you so I'd just be honest with them say listen man here's where I'm at I can't pay this rent anymore I'm I lost my job I'm in recovery like I can't do this and you need to go you know maybe get a place with seven roommates and it goes down to 700 bucks a month what type of support system do you have I know obviously family helped you

kind of get those first few months started. But I'm trying to put myself in your shoes and my mind is going, is there some place that I can go back to and go, hey, I tried my hand out here. I need a couple months to get on my feet. I literally have $25 and I'm trying to be responsible and not go into debt. Do you have a buddy? Do you have a family member that would float you for a couple of weeks until you can get a lawn mower, basically. Do you see what I'm saying? Yeah, financially everyone I know is tapped out. Well, I'm not saying.

I'm not saying ask him for money. That's not what I'm saying. I'm going to say what I'm thinking, and then you put it in terms of your situation. I'd probably call it my sister and be like, Farah is hard out here. Like, I made some serious, like I thought I could come to New York,

but here's where I'm at. What I don't want to do is go into more debt, and so I'm trying to make the most financially responsible decision right now. Could you give me like two weeks, three weeks at your house? Here's my plan. What I want to do is get someplace a little bit more residential. Just get someplace where I can start to offer services for people so I can make some really quick money. I'm thinking about doing things like washing windows and repairing people's decks and like, right? Tell them what your plan is because that's a lot more convincing to help somebody rather than I need money. That's not going to work. And remember to cover your

four walls first. Before you pay the credit card company, you've got to cover food, shelter, utilities, transportation, and get those down as cheaply as possible. And if you can't pay the credit cards, you don't pay them. And you can contact GuardianLid at GuardianLit.com slash Ramsey to help with a settlement and collection stuff if you do end up facing that. So sorry, man. All right, guys, if you haven't heard, Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles.

And today we're going to break down the most asked question from the week, real estate. Hot topic. We're getting lots of questions about buying a house. So the main question here, What are the most important factors to consider when buying a house? I love that. Well, definitely financial readiness, right? You want to be completely debt-free.

You don't want any non-mortgage debt, no credit cards, no car loans, nothing like that. And when you do that, it reduces your risk and allows you to actually be able to handle emergencies that pop-up. Obviously, we want you to have a fully funded emergency fund, three to six months of expenses. And we want to make sure that you can afford the mortgage payment in any ongoing maintenance costs. So that's so important. and we teach that 25% rule. That's right. And then the next piece is, naturally, how much house can you afford?

Because the thing is, that mortgage lender will be like, you guys can afford a million dollar home. And you should be like, no, we actually can't based on our real numbers. And so your mortgage payment, including the principal, the interest, the property taxes, the homeowners insurance, the HOA fees, even private mortgage insurance, that PMI, if applicable, should be no more than 25% of your after-tax monthly income. So that's after taxes, but before all the other deductions, like your 401K, your health care. So that'll help bolster that 25% number. And here's the thing. You know, it's not a sin to go 26% or

30%. But here's the problem. We get calls where it's 50% and these people are drowning asking if they should sell their home. And so we just don't want you to be house poor. It's not about following strict rules. And using a 15-year fixed rate mortgage and avoiding 30-year loans, adjustable rate mortgages, FHA loans if possible, that's the way to go. Yeah. And not only that, but even saving for your down payment, which is a big hot button topic now. You know, you want to aim for at least 10% down. If you do 20%, of course, you're going to avoid PMI. But the truth is, for a lot of us today, you're going to have to put a lot more than that down in order to reach the 25% rule that George was just explaining.

So really hop on there and use our mortgage calculator to figure out exactly how much you need to put down. So the payment is right. Because at the end of the day, you don't want to be using any of your emergency funds for this. You should have separate savings. And you should also be able to put the right amount down. That's right. And then the mortgage process, you've got to get pre-approved before you start house hunting, and that shows sellers that you're a serious buyer.

This will help when it comes to offers when you're in the mix there. And it helps you shop within your means. So choose a reputable lender who will prioritize your financial well-being instead of just try to throw the biggest mortgage they can at you. And our friends at Churchill Mortgage, they've helped so many people buy a home, the Ramsey way. And if you want to know if you're ready to buy, how much house you can afford, how much you need to save, all of that. Ask Ramsey.

Our free AI tool can personalize those answers for your situation. So that's a great thing. You can go back and forth, have a conversation, save the chat if you log in. So head to Ramsey Solutions.com and try it for yourself. You can also click the link in the description if you're on podcast or YouTube. All right, Kara is in Detroit, Michigan up next. What's going on? Hey, thank you for taking my call. Absolutely. I am, sorry, I am calling today because I wanted to get some advice about how to set my fun up for success in this future. So a little bit of background, I'm 27. I am a PhD student at the University of Michigan, and I have a one-and-a-half-year-old, and I've been trying to save money for him and figure out the best way to set him up for the future because I have come from a very poor household.

I've been homeless several times, and I really would not want that for him. Wow. Yeah, I mean, kudos to you for making this all work. I would be very focused on, and this is going to sound kind of opposite of what you said, but with a one-year-old, the best thing you can do for him is to make sure you're doing and being the best person you can be. So what does that look like for you financially? Making sure you're out of debt, making sure you're able to pour into him financially

and help with college, making sure you're setting yourself up in such a way that it's so healthy with you that all that health gets on to him. Does that make sense? Yes. And so that leads me to my next question, which is, how are you doing financially? Like, are you paying off debt? Like, where are you in this whole thing? So, um, my husband and I, we make just north of 90,000 a year. Um, I don't have any student loans or credit card loans. I actually had a free ride to school and my PhD was paid for by the school. Nice. Um, um, The only debt that we do have is we do have two car loans. Our cars took a crap for lack of better words, and so we do have two car loans,

but that's the only debt that we have. What are those car loans add up to? What's the, give me both balances? So my car is at $18,000, and his car is at 21. Okay. And what are the monthly payments on that? One is $381 a month, and the other one is $481. So when I see that number, all I see is future investing.

That's $860 that could be invested if we got rid of this debt. You see what we're doing here? Yes. Can I show you what $860 would be if you invested it when your child turns 2 to 18? Sure. You ready to blow your mind? $400,000. Yeah, that was going to be a lot.

Hope you like the car. Yes, yes. So you're asking us, how do I save my kids' college? It's getting rid of your debt so that you free up that money. Because right now, do you have $860 extra to invest? I mean, not for paying car loans. Exactly. And the thing is, for most Americans, I mean, we're not trying to single you out.

Most Americans, this is the cycle. It is a revolving door. I drive this car for a while. It gets old. Something happens. I trade it in for another car, and I have another car payment. Drive that for a while. Something happens.

I trade it in a half. And they have a car payment for their entire life. Think about it. How can you save up for a car? when you've got the car payment, taking up what you would have saved. So eventually you have to break the cycle and drive the crappy car while saving up for a car that you really want, the upgrade car that you do in cash. So, I mean, you got 40 grand in vehicles making 90. That is up there.

So you may want to consider selling one if you are not bringing in. Are you working right now while doing the Ph.D.? Or is that full time? So my Ph.D. gives me a stipend. I'm paid through school as well. so that's half of our income, and then my husband makes the other half. Okay. So now the question is how do we up both of your incomes?

When is your Ph.D. done, and what will you be making? So I have two more years left, and it depends on what I go into. I'm not entirely sure it's estimated to be just north of $100,000, but it really depends on where you work, what company and what city that you're in. And I can't really make those decisions quite yet. Sure. And what about him? What's he doing?

So he's a medical technician. He's 3D prints surgical implant. Okay. So I'd be the way I'd put it in our brains if I sat down tonight and was talking with my husband about this very thing, I'd say, if we can't commit to getting these cars paid off in 18 months or less, I think that we should consider selling one of them. That would be my kind of thing to bring to the table. And that way you're saying, hey, we know that there's a level of urgency. here, but we're also allowing space for us to keep these vehicles if we really want to work hard to keep them.

But what I wouldn't do is try to do all of this at once. Try to invest, try to pay off the debt. We need some focus intensity now to just pay off all of your consumer debt, build up a fully funded emergency fund of three to six months of expenses, be investing 15% of your household income into your retirement accounts, and then money left over gets invested for the kids college. Okay. And you're probably going, wait, money left over.

that's what happens when you're debt-free, and you guys will be making north of six figures. So I'm not as worried about junior. I'm more worried about the present you. Right. Because even if you start investing when he's four years old to 18, yeah, you'll have to invest a little more to make up for some lost time and compound growth. But I mean, even let's say four years old to 18, if you invest 500 bucks a month, he'll have 181 grand. That's at a 10% return over those 14 years. And that's assuming he gets no scholarships and he just got to pay that. And on top of that, think about how much more money you guys will be making 14 years from now, 15 years from now. And so you'll be able to cash flow. He might get scholarships and grants. He can work part-time. There's a lot of things that he can do to avoid student debt. But all of this is predicated on you guys creating a financial foundation for yourselves.

Yeah. So the moral of the story, not just for you, Kara, but for anybody listening, the way that we love our family well, whether it's our kids or thinking about the future, is we have. have to have our personal financial life in order. How many calls do we get, George, where it's, my parents didn't do what they were supposed to do. So now I'm 40 years old and I'm having to pay for kids college plus their care and do all this. If you can decide today, you know what, I want to break that cycle. I want my kids to be set up. It starts with you. It's not in the DNA. You can break the cycle. And so it is possible. And the account to invest in is a 529 plan for education or you can do an education savings account. Those are both great options to invest. And you're going to get some tax-free education.

Welcome back to The Ramsey Show in the Fair Winds Credit Union Studio. I'm George Camel, joined by Jade Warshaw. Free call at AAA 825-5-2-2-25. Ken is in Tallahassee up next. What's going on, Ken? Welcome to the show. Hey, thanks to take my call. Absolutely.

What's your question? So I'm looking for some guidance. My wife and I, we had left our jobs about two years ago, and we both opened two businesses, both of which have done pretty well. Over the past two years, we've really aggressively attacked all of our debt, except our mortgage and one investment property. Good. Now we're at the point where we're trying to determine if we should go ahead

and pay off the investment property that we purchase, which has an interest rate of 5.99, we owe about $223,000 on it. or should we start aggressively contributing towards retirement accounts for O1K, whatever we can do to set ourselves up for retirement? Okay. Are you currently investing 15% into retirement every month? We have not started anything for retirement whatsoever. Okay.

Do you have the three to six months of expenses saved? We have 82,000 saved right now, yes. Okay. And that's, okay. And how many months of savings is that? How many months? Mm-hmm. Well, we make about $360,000 a year, combine that. Okay. And is that aside, that's personal money, like for your personal life,

that's not your business savings accounts and retained earnings, right? No, that's our personal money, yes. That's what we met it. Okay. So I would just walk this through the baby steps, which is, it sounds like you've kind of already done. Just to recap for anybody listening, Baby Step 1, you're getting $1,000 saved. Baby Step 2, it sounds like you've done. You pay off all of your debt except the mortgage.

And then Baby Step 3, you save up three to six months of expenses. You've done that. Then Baby Step 4 is you're investing 15% of your gross income every single month. And once you're doing that, it's kind of like that's the set it and forget it. I know that that portion of retirement is going to be taken care of. Now I can look up and do things like if you want to put a little. little aside for kids college, if you want to pay extra mortgage payments, right? Some of the things that you're talking about. So as long as you're doing the 15%, I would invest in paying off

some of this real estate. However, I would be looking at what's the best way for your primary mortgage to be debt-free quickest? What's left on that? And that's my biggest question because our mortgage payment on our homesteads $2,200 a month, our interest rate is super low. So my question there would be, do we pay aggressively towards the investment property, which has a 5.99 rate? What's the balance of your current mortgage? Yeah, what's the balance of the homestead? About 320,000. So since that's where your bodies lay down to sleep every night, that's what, that's the equation I want to solve for is how can we make that debt free first? Because, and my, my thought for that is no matter what the situation, whenever people have,

have an emergency, a hard time, whether somebody's laid off, whether there's a diagnosis. The number one thing that people want to keep, the number one thing people care about is, I want to keep my house. I don't want anything to come between me and keeping my house, right? So that's why that's the first thing. Whereas if you're getting a pinch, you could sell the investment property. Yes. I don't want you to have to sell your home to do that because of the mortgage payment. So I'm not concerned about interest rates, Ken.

you guys make so much money that it's negligible. What I would do is start investing that 15% today because that is, what, $54,000, $4,500 a month? And so even though you're starting from zero, I'll give you the math here on our investment calculator. You can jump on our website and use it. We'll drop a link in the description for this. But from 38 to 65, if you guys invest $4,500 a month, you never make more than 360. At 10% return on average, you'll have $7.4 million. Okay, so when you say invest, are you referring to like a brokerage and index funds and all that?

This is in any type of investment account that utilizes compound growth. And so this could be retirement. I would do retirement account. So the way we look at it is there's a kind of a water flow approach. If you have an employer match, we're going to go there first. Then we're going to take all the Roth accounts we can get. Now, with your income being so high, you may want to utilize traditional. What's that?

since you own your businesses. So you could do solo 401Ks? Are there employees in the business or is it just you guys? My business is a solo. I'm the only owner. And then my wife and I's business, it's me and her and one other employee. Okay.

I would, for yours, it's easier to set up for hers. I would probably work with somebody to make sure you're structuring it the right way. But yeah, I would start that immediately. That's your project for next week. And then.

You know, right now, you just haven't been because you just don't know. And you guys are super smart, very successful, and it's pretty easy to know. And there's pro guidance that I would suggest you can jump on a Ramsey Solutions com, click on SmartVester Pro. They'll dig into your situation and help you decide, hey, for your situation, for your wife, she should do a SEP IRA for her business. And you should do a solo 401K, for example. And that'll allow you, you can actually put in way more into a solo 401K because you're the employee and the employer. That's right. So you can contribute on both sides. And really, make some headway to start investing. And I would just work on extra mortgage payments outside of that.

Do you guys have kids? We have three total. Two are grown, the youngest of 11. Okay. So I'd be putting some money away for college. I mean, hopefully you guys will be able to cash flow the rest. But a 529 plan would be a great place to sock away extra money and just kind of set a goal for that. Again, a smart investor pro can help you set that goal from 11 to 18. We want to have, you know, six figures in this account by then. You might be able to kind of super fund it just in the next year and then set it and forget it. So there's a lot of strategies you can do here, but the main thing is let's start putting money aside for the future with compound growth

and let's start knocking out your primary mortgage. And then eventually, my guess is if you follow our plan within five years, all of your debt will be paid off. So don't even worry about the investment property? Well, I wanted to ask about that. I mean, how married are you to it? Because my mind immediately goes to what's this thing worth because if I can pull. It's a long-term rental. It pays for itself. I understand that, but I would run that out and go, okay, it might pay for itself. How much profit are we really earning off of it? And what's it worth? Because if we sold this thing and if we could walk away with a significant amount of chunk of change that we could turn around and pay off the homestead very quickly, that would be very enticing to me. Because now you freed up the $2,200 a month that you're

paying for the homestead. Well, how quickly could you, is that money that you, is that money that you, you want to turn around and invest and get a probably higher rate of return, or would you want to sink it back into real estate that maybe you're just breaking even on month to month? No, we have some equity. I just don't think it's a ton. What do you actually making off of this thing per year after all of your expenses? It's about $600 a month after expenses. Man, that's not much compared to your whole income.

I know. No. What's it worse? It's more of an investment I have later on. You know, I guess. Are you guys going to live there one day? No. No, I guess something that we would just have on the side and sell later on that we would have money for.

I mean, it's less than 2% of your household income. So you got to ask yourself, is it more than 2% of the headaches in my life? Maybe. What's it worth if you did sell it? I'm just curious. What would it bring? 275 maybe. Okay.

So not a whole lot. $2.80? No. Yeah, you know, it would be something. I'd continue to watch it. And if it starts going up in value and it becomes enticing to you and it does make sense to maybe offload that in order to free up the homestead, I would definitely do that deal when it's time. Thanks for the call, Ken. Again, that's ramsysolutions.com.

Click on SmartVestor Pro and they'll help you craft a plan for all of this because you guys make so much money. Let's put it to good use. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use.

Go to Ramsey Solutions.com and try Ask Ramsey today. That's Ramsey Solutions.com. Bree is in Santa Barbara up next. What's going on, Bree? Hi, there. Thanks for taking my call. Absolutely. How can Jaden I help?

Hey, I'm calling because I am a third-two-year-old single mom, and I work as a teacher, and I live in a pretty expensive area of California, and I'm feeling really good, actually, about where I'm at financially, especially considering I had many years of being very low-income. And I guess I'm kind of at a point where I'm at a point where I'm at. I'm not really sure what I'm saving for. I put away money every month towards savings, and I have been since I started my first day as a teacher, every year increasing the amount that I put.

And I just have about $60,000 saved up. Wow. You know, continuing to save every month. And I also am really careful with my budget and how I spend my money. And I guess I kind of am not really sure why I'm doing it. And I guess I want to understand what amount of money should I be putting towards saving versus allowing myself to live a little bit of a more enjoyable life financially on the day to day. I love this question because I think that anybody who's really had to scrap to get to where they are, you do. You get in the mindset of like, I just, it's like a robot.

I take the money. I put it over here. And I don't even question anything else. And then it feels like you've done something bad. If you don't do that or if you spend it, you feel guilty. So let's try to free you from that today. So you don't have any consumer debt? No, other than my mortgage, my home.

So good. You got a mortgage and you've got 60K. That's just all of your savings. Does that include your emergency fund? That's all wrapped up in there? Yeah. Yeah, I mean, I've got about like $6,000 in the bank, I guess. Okay.

That's kind of your checking account money. Have you started investing yet? What's that? Have you started investing? Oh, yeah. That's in an investment account. Oh, okay. So it's not as liquid.

not sitting in a high-yield savings or anything. So how much do you have in a high-ield savings account or in a savings account that's liquid? I don't have anything in a high-yalt savings account. It's all in like a brokerage account. Oh, that scares me a little bit because if you had an emergency, you'd have to just sell that off no matter what's going on in the market. I would, but I also, like I have other sources. Like I could talk to my parents, I could talk to family members if I needed to. Let's fix that. Let's fix that. I think I heard you say that you're a teacher, right? I am. How come you're not investing through your work into a 401k? Because usually there's an automatic kind of amount that goes. Yeah. No, there's nothing that I'm aware of at least through my job that

I can invest. Is this a normal school system? I've just never heard of a school system that doesn't have a retirement plan. Double check that for me. Well, I have a retirement plan. It's separate, though. So I don't even know what's in my retirement plan because I don't consider that savings. I consider that just my retirement. Okay. So let's let's let's help you with that. So that what you have, that retirement plan is awesome. And that's the number one way people build wealth is through their employer sponsored retirement account. Okay. So if you have a 403B, which it sounds like you do, my guess is there's a percentage of your income that's automatically going into that as a teacher. Am I wrong? No, you're correct. I don't know if it's called a 403B.

But it is like a teacher retirement account. In California, I think it's a little different. Do you know how much goes into that every month? $600 a month, but it also increases every year as I earn more. Okay. So the goal that we want to get to is for you to be investing a total of 15% of your gross income. So the math that you can do tonight is to say, okay, that $600, what percentage of my gross income is that? So let's say it's 10%.

and then you go, okay, I need to add X amount of dollars in order to get this to 15. That's thing one. Once you're doing that, it's like, okay, I can set that and forget it. I know that if I continue to do this, when the date of my retirement comes, I'm going to be set. And a way to really feel good about that is to go on the Ramsey investment calculator and just plug in your numbers and say, well, okay, today I'm 32. If I keep doing this until age 62, the $600 or however much you increase it towards, here's what I'll retire with. that's going to make you feel amazing. And then it's going to free you up to be able to spend money in other ways when the time comes.

What's really on fire for me today is the fact that you don't have liquid money in a H.S. In a high-yield savings account. And that needs to probably happen immediately. So I probably told you that a little bit out of order. But I wanted you to understand that you did have employer-sponsored retirement at your disposal. Yeah. And with the high-yield savings account, how much do you recommend putting in that? three to six months of expenses. You're a single mom, and so I'd feel better if you had six months,

as close to six months as possible. And you have that now in that brokerage account, so I would just sell off that much and be aware if there's any capital gain taxes on that. But take that out, put it in a high-old savings account, and then keep it liquid. I know it's not making as much as you could be in the market, but it's not to be invested. It is insurance against you having to go into debt ever again. So you'll feel a whole lot better having that liquid at the ready. And then beyond that, if you want to put a little money away for the kids' college, how old are they? My son is 12. I do put money towards his college fund every month. I think like 12,000 or so is paved up at this point. I don't aggressively put money into it.

So that's in addition to the $60,000 I have in investment. So you may want to make a goal to put a little more in there, and you can use an investment calculator, figure out, hey, here's how much. in state public school would be in this area if they choose to go there and try your best to get there. You don't have to cash flow the whole thing. That's not your obligation, but it'll help them avoid student loan debt, which is a huge crisis in America today. So that's one goal for your money is to put more towards college. You can always put more toward the mortgage. And then, of course, budget a little more.

The mortgage is such a low interest rate, though. Like, I was able to buy about five years ago, and so my interest is 2.63. And so it feels like if I had the option between investing, I would just get a lot more return for my money if I was to put it in an investment account rather than pay the mortgage off really. That's true, but you have to think about where you'd want to be when the day comes and you can no longer work. Because if you continue to let your 403 be through your teaching continue to grow and accumulate, like I said, do that homework tonight because it's going to change your mindset. Because the time is going to come when you can't work anymore and you're going to look up and you're going to go, man, I don't want to be paying my mortgage out of my retirement every single month. it'd be so great to maybe have a slightly smaller nest egg, which it probably, you know,

it will be negligible and also have a paid off mortgage. Does that make sense? Okay. So that's why we teach it that way, but we never ask you, how much do you make every year? About $75,000. Okay. And I put away about $700 per month into investment accounts. And then the rest I use for expenses, I mean, I live like a decent life. You know, it's not like I'm penny pinching at every corner, but I also, you know, there's extras that I choose not to do because it wouldn't, you know, stay within my budget. What do you want to do? If I snap my fingers.

I want to hire somebody to deep clean my house once a month. Love it. Because, like, I just won't do it. Right. What does that cost you in California? It probably be a couple hundred bucks. Okay. Let's say $250.

So you can, you know, set up in every dollar budget, use the app, and just put line item, house cleaning, $250. Okay. That's it. And you guys, if I do all these calculations and I make sure I got my 15%, like, you think it's okay to kind of lose the purse. I wouldn't be investing in the brokerage account at this point. That is sort of like a baby step seven houses paid off.

I've run out of other investment options. You're going to be fine. You're so young doing so well that I would be more focused on making sure I'm investing 15% into retirement, making sure my kids' college is covered, making sure. and the mortgage gets paid off. And then allow some spending money for Brie. You've earned it. You're working your tail off.

You probably need to be closer to around, $900, $930 investing every month. I think you said you're at six or seven. So bump that up to the right amount. Like I said, somewhere between $900 and $930. And then from there on, if you're doing all those things that George talked about, you're in your baby step, you're doing those things correctly. 100%. The whole purpose of doing this is so that you can and,

your money and so that you can spend. It is live like no one else. So later you can live like no one else. And for you, it's simple things like having a house cleaner. So as long as it fits in the budget and it's not causing you to have to pull from investments, it's not causing you to have to forsake your kids' college fund. It's not causing you to have to have no money ever to put extra on your mortgage, right? Then it's fine. It's good. And it's worth your sanity. Thank you. Thank you. Thank you so much, you guys. Thank you for the call. You're a hero. That's very impressive. What you're doing, 32, single mom, debt free. In California, none of the less. Right. And I love that she rode out the storm of starting out low income and really pushing and pushing to get to where she is now. That is so gratifying. I'm so proud of her.

When I talk to people on the Ramsey show, 90% of the problems I hear come down to one thing, not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of this. them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you. And that's why I want you to go download our every dollar budget app. Every dollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you call the show. And it's right in your pocket. So don't keep living normal.

Go download the Every Dollar app, answer a few questions, and get your plan today. Our question of the day is brought to you by Y-R-R-R-R-E-FI. If private student loan default knocked you off track, this is how you reset. Why Refi works with borrowers, other lenders won't, helping you refinance defaulted private student loans with a low fixed rate so you can get back on the plan and move forward. Visit Y-R-R-R-E-F-Y.com slash Ramsey. that's the letter Y, R-E-F-Y dot com slash Ramsey,

may not be available in all states. All righty. Today's question comes from Ian in Wisconsin. He says, is it okay to use buy now, pay later plans? As long as you have the cash available to buy the item outright. I'm making a large purchase

and have cash to pay for it today. But I want to pay it on payments to soften the blow to me. I love this guy. I want to put it on payments to soften the blow to my bank account. I've already got the payments worked out into my every dollar budget, so I don't see why this isn't a legitimate reason for using the method. Okay, this is wild, but I want to kind of validate

what you're thinking. I think all of us feel the pain of seeing a nice cushy number in our bank account, and then we decide we want to do a major purchase, like a car or a golf cart or whatever, and the feeling of seeing, I don't know, a balance of $40,000 go down to $5,000. thousand dollars is like oh it's like shot to the heart okay yes validating that however the whole purpose of managing your money well is to be able to pay cash in actual money for the things that you want so don't discount your hard work and all that you've done to set yourself up to be able to do this by then turning around and saying ah i'm just going to put myself in a financial risk in order to get this you have the cash and by now pay later george is so dangerous because it really

does mess with your psyche because you think, oh, well, this is really not that much and it goes little by little by little. And then it opens up the door to, oh, this is kind of nice. Well, it's the old put it on my tab. And you go, well, it's only four bucks here, five bucks there, 10 bucks here. And then it becomes a habit where you go, well, if I needed to, I could pay it all off today. And then you lose your job. Well, then you try it with something else. You go, oh, that kind of felt nice. Now I'm going to get this guitar. Now I'm doing an appliance. And now you're no better than the guy doing, you know, zero percent financing on a freaking couch. at Ashley furniture.

This gets worse and worse. Ian, this is just, it's broke people mentality, and the truth is, if it softens the blow to your bank account, that means you probably just shouldn't buy it. If it, like, hurts your soul a little bit to part with that much money, that's your brain and body telling you, hey, this is a lot of money. Are we sure we want to do this? And what buy now, pay later really does, it just desensitizes your brain to go, ah, it's fine, bud.

It's like a little devil on your shoulder. Go on put it on four payments, guy. You got it. You deserve it. You worked hard. I think you worked too hard to be this. broke, playing broke people games. Yeah, that is so good, George.

These predatory companies. And these are such predatory companies. They're praying that you can't make the payment so they can ding you with fees and interest. They're no better than the credit card companies out there. And their marketing touts it like, we are the best alternative to credit cards. We're here to be your savior. You know what I think is going on here?

This just hit me. This is what I think. I think that he probably has a lump sum of money saved. And it's probably earmarked for something else. but he has this big purchase that he wants to make. And he's like, well, I could do it on buy now, pay later. Because the truth is, if something happened, I could pay for it. But if the money wasn't earmarked for that, then that's probably why it isn't feel good.

I'm just throwing that out there. I don't know if I'm right, but that's the sense that I'm getting. Yeah. The bottom line is you can't build for the future while paying for the past. So if you got anything behind you in the rearview mirror, what are you doing? You're just wasting brain calories thinking about the payments. There's enough things to worry about in this life. Yeah.

debt is not one of them. And that's all it is. It's a micro debt is what you're signing up for. And if you read the fine print, they'll tell you. All right, Ian, thanks for the question. That was a fun, fun rant. Rant over. J.R. is in Atlanta up next. What's going on, J.R.? Hey, George and Jade. I was just calling because me and my wife just built a house and we moved in at Christmas time. And we love the house. We don't like the lifestyle that the payment is going to make us live. Oh, no. Well, our priorities change from the time we started the process to now. Like, my wife works.

She runs her own business. And I got moved into the house, and I just realized that I want my wife to be able to stay at home with our kids. Oh, no. Based on our current payment, I, on my own job, could not pay for the payment without her continuing to work. So I'm wondering what we should do next to kind of mitigate that risk. I mean, we are willing to live with the consequences that we have made for ourselves. You can't, how can't? How can you? Because if she's staying home and you can't cover it on your income, you can't stay in that house. Well, sorry, she would obviously have to continue to work.

And we're okay with her continuing to work if we have to. But if we have an option to do something else, I would love an outside opinion. Okay. I'll pitch that question back to you. So you tell me, tell me what your mortgage is every single month. With the escrow, it's around $2,500 a month. $2,500. Okay. And if your wife stopped working, what percentage of your take home would that mortgage become?

About 50%. Okay. So, and then you've told me, hey, also, not only would it be 50%, but I just wouldn't even be able to cover the payment at all. So you tell me what the option is. I think either we're going to have to let her continue to work and pay down the house.

and possibly refinance, or I get a better paying job, or we move. I think those are really the only three options. None of them are great. Yes. Okay, I just wanted you to say it so that I wasn't the bad guy. Right, right. And the truth is, you finding more work, that's the thing that maybe allows you to kind of have the best of both worlds here.

How likely is that to happen? With my current career, it's probably not very likely. I'm working on getting a CPA's license, so when I finish that, I probably could make it more realistic to cover all of our bills and the mortgage. But in my current career field, it's pretty unlikely. What's the timeline on the CPA deal? Probably about a year. I can sit for my first exams this summer. And will you be making six figures right out the gate? Where I live, CPAs are starting between 70 and 80.

Okay, so that still won't get us there I mean, well, we need like a take-home pay more like, you know, nine, ten grand to make this make sense for you guys to carry this mortgage payment for the next decade. Right. So then the other option is if we can't get the income up, then we might need to move once your wife decides to stay home. Right. So I don't think anything's like on fire, but if, you know, do you guys have kids now? Yes, we have two very small children.

Okay. Is there more on the way or is this a? We would love to have some more, but we've kind of pushed pause on that until we can get our financials in order. Okay. What's the house worth? We had a real estate agent coming look. It was worth about $4.75. And you owe how much?

A little over $300. Okay. So you do have some good equity in there. There's some good news in this picture. There's also the idea of her working part-time. Maybe it's not an all-or-nothing thing, but it's I pick up these extra hours. you become the CPA. Do you see what I'm saying?

Maybe it's the combination and we kind of go, hey, there's a year horizon on this. For the next year, you work and it's not ideal. But then once I can get into my CPA role, you can back down to part-time and that should close the gap. And then I can continue to grow my income and you can fully step away. There might be kind of like a very gradual transition that you can do. Okay. That makes good sense. Yeah, that very, that can be.

good idea. Do you guys have debt outside of the mortgage? We owe about 8,000 to the IRS, but other than that, we are debt-free. Okay. And what's your wife making the business? After taxes, she's probably doing between 130 and 150. Whoa. So she's the breadwinner here? Yes. Okay, but she's the one who wants to stay home. That's her dream? I would love for her to stay home. I think She wants to be home more, but I think she would be okay with working part-time. I would love for her to have the option to not work at all. It sounds like part-time is the move then because she said her wish seems to be like, I don't want to be totally out, but I do want to be home more.

That feels like the ticket, because what you don't want is to tell somebody who wants to work a little bit that they can't work because then they're going to feel trapped. It's the same. It can go either way. You also don't want to tell somebody who wants to stay home, hey you got to go to work because then they're going to feel trapped there. So I think that you guys still have some conversations to have around this and you have time. I would just set a timeline of like, hey, let's revisit this six months a year from now and see where we're at.

Is it feasible for you to go part-time? Can you just stop working altogether based on what I'm making as a CPA now? And I hope, I really hope you guys get the dream of first staying home and you get to keep the house. That's obviously best case scenario, but it's going to take some sacrifice on both of your parts. Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more. And when you're ready to get the coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to Ramsey Solutions.com slash insurance. Ramsey Solutions.com slash insurance. All right, Jade, it's time for our scripture of the day. You know it. Yes.

I'm singing it with you. This one comes from Ecclesiasty 712. The protection of wisdom is like the protection of money. And the advantage of knowledge is that wisdom preserves the life of him who has it. Wow. I might need to read that again. Okay. Wow.

I'll do it on my own time. Yeah, that'll take me a while to chew on. All Solomon there is long of the tooth. A.A. Latimer said, A.A. Latimer said, a budget is a mathematical confirmation of your suspicions. I love that so much. That's great.

I wish I had one of those names. You know what I mean? Like A.A. Latimer. G.K. I call you G.K. Yeah, I think G.K. But then you got to have a nice, long, cool name at the end. What's your middle name?

It's Peter. It's not that exciting. Yeah, exactly. G.P. Camel, that's not. It was hard to say. It doesn't roll off the tongue. No one's reading that guy's novel. G.

I'll work on it. I'll workshop it. All right. Michelle is in Springfield, Illinois. What's going on, Michelle? Hi, guys. Hey. I am calling to find out about retirement.

How to, when the time comes, how does that work when you withdraw, you guys say 10%, if you can live off of 10%. How do you do that? Is it you withdraw like the 10% and then hold back taxes or do you withdraw, like, you withdraw, like 90% and leave the taxes in there, pull it out when it's time to pay. Oh, boy. So let's roll back. Let's back it up, Terry. Let's go here to your age.

What's your current age? 56. Okay. And you're talking about like 59.5 plus is when you're going to be pulling from retirement? Oh, yeah. Okay. What kind of retirement accounts do you have right now? Just my 401K.

Is it traditional or Roth 401K? Traditional. Because when we got a Roth one, I felt it was too. too late to change it over. Okay. So the only retirement account you have is the traditional 401K? Yeah, other than the kids is 529. Right.

Grandkids 529. Okay. How much is in there? In which one. The 401K, the traditional 401K. 253. Okay. And you're wanting to, so let me roll back to what you first said,

which is you guys say, you know, if you have 10% that you're earning and you can live off the interest. That really is a rule of thumb to kind of be thinking about, do I have enough to retire? It's not precise. It's not prescriptive to say you should withdraw 10% every month. No, it's just a way to think, hey, how do I kind of know that I'm in the realm that I might be ready and might have enough? So I want to be clear on that. And I want to know if you're working with a smart vester pro at all, or are you just doing this all yourself?

I am newly. I actually go and do my one-year check at the end of April. Okay. What I would do is at the next meeting, I would say, how much do you think that I need to, and that I'm able to pull from this 401K to maintain my current lifestyle? And what I would do is I would come to that appointment with my current budget. And I would say, here's what I'm spending every single month. And here's what I receive, you know, or will receive from Social Security and have all those numbers and then start projecting. what would it look like for me to pull X amount of dollars, how much taxes would that be for me every year, and just ask how we're going to do that and what that's going to look like so that you can begin to understand it and see if you agree or not with that strategy. Okay. And they can project this all out to show you, hey, if you withdrew, let's say, $60,000 total per year in retirement based on what you have in the nest egg, here's likely where you'd end up. Here's when the money

might run out or here's how much you might have left over and they can run all kinds of projections to give you a big picture because the truth is we don't know what the future holds we just know what history has shown us which is that the stock market on average produced about 10 11 percent so based on that you got to take into account inflation and then you got to take into account your actual expenses versus what your nest egg is so how much are you investing per month right now uh 15 percent of what's the total number Um, it's like, what's your income? What's your income?

981 a month, I think. Okay. And do you have an employer match? Uh, yes. Okay, so how much extra is that on top of the 981? Um, it's 3%. Um, let's call it another 100 or 200 bucks? I'm so sorry.

That's okay. I'm just guesstimating for you. And you said you had 250,000 in retirement? Yeah. Yeah. Okay. So if you can keep contributing that 1100 in there from 56 to, let's say, 65. Is that your game plan?

Yeah, four more. Okay, let's put it 67. That puts you at a million bucks in that nest egg, and that's with a 10% return. So then the question becomes, all right, from 67, let's say you live a good long life to 97. We've got 30 years to utilize this million bucks plus Social Security. And so they can then help you map out a plan for withdrawal.

Obviously, you don't need to do that right now. We don't know what the future holds, but I would just keep... I'd rather have too much than not enough. You know what I mean? Sure. Keep bumping it up as much as you can. So hopefully you get your income up over time.

You get the house paid off. Then we increase and start maxing out these accounts. And you'll have well over a million plus Social Security. That should give you a nice comfortable life. So thank you for the call. It's a great question. It's a good way to think about it. You're on the path to become a Baby Steps millionaire.

Eliana is in Chicago. What's going on with you? Yes, hi. So I have... I have $11,000 in stock. I have $4,000 cash. But I also have a 2006 Chevy. And I have like four options to use the money.

And $8,000 credit card debt with no interest until September. Okay. So my question is where to spend it. I have four options. One, my home is a 1940 house, so I don't have AC, I have window, which costs me a lot of money during the summer. I have the old-fashioned heat that costs me a lot of gas. My estimate to install an AC with heating plum was $10,000, the quote. Okay.

And then my kids were invited by their grandparents to our homeland, which cost around $10,000, and they're going to pay for their tickets, but I have to be with them. So that would send me back at least $4,000, just cost them tickets. Okay, so you could do... I also... I think I need a new car,

and I got a really nice deal, but the car is going to cost me $16,000 that I don't have, so I'm thinking of not paying the whole credit card, and it's the car because it's estimated for $24,000. thousand and it's not a deal if you can't afford it though what what's the deal and i can't even afford the insurance for the car and you can't do that so that's not an option what's the deal with your current car you said you had a car is it do you owe anything on it is it worth something

tell us about the current car last yeah last year i returned my jeep wrangler because it was least to own and it would it had a lot of recalls and i couldn't pay the um maintain in $1,000 a year. I couldn't pay that. So I got a 2006 Chevy, and it's fine, but because it's approaching 200,000 miles, and my work is to go with therapist house to house. I'm afraid it's going to break down, and I'll need a new car. Has it broken down?

No. Okay. I maintain it. So we're justifying a new car purchase based on the fact that once a car goes over 200,000 miles, they apparently die no matter what? Or it's going to start breaking down. And I don't want to buy a car out of me. Well, let's deal with our current problems versus the future ones that could and might

happen. The current problem is we've got $8,000 in credit card debt that we can pay off today by selling off the stocks, right? Yes. So you got $15K total liquid. Paying off the credit card brings us down to $7,000, right? Yes. And now the question is, what's the priority?

You having AC as we enter the summer? or going on a trip that you could go on at another time? I could go on another time, but it's going to cost me an extra $10,000. And I don't even care for the trip. Is it because the kids won't be covered? I would just tell them, hey, I can't afford to go on the trip because I have to go with them.

I have to cover my share. I'm in a pickle here. I don't have AC. My car is on the fritz. I got credit card debt. And that's it. And so you prioritize the things that matter to your family right now the most, which is getting out of debt.

Let's get the AC, let's get an emergency fund so that we get out of this cycle. That is the only path I would recommend out. Right now, a trip is a luxury that you don't have, Eliana. Thank you for the call. All right, that puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.