The Ramsey Show - Creating Margin in Your Budget Gives You Room To Breathe

Episode Date: August 19, 2024

📱Finish today's episode for free in the Ramsey Network app. George Kamel & Jade Warshaw answer your questions and discuss: "What's the best way to pay for a degree?" "Should I pay off debt in collections first?" "I feel like I'm behind on retirement investments," "Can I spend more than 25% on my house?" "Our mother-in-law wants to be paid for childcare," Support Our Sponsors: The Wellness Company: urgentcarekit.com/ramsey for 15% off medical emergency kit Health Trust Financial: Discover Top Health Insurance Plans, All in One Place. Churchill Mortgage: Get started at ChurchillMortgage.com Zander Insurance: Go to zander.com or call 800-356-4282 for a fast and easy quote today. Next Steps 🔒 How to Prevent Identity Theft 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 For help with investing, get connected with a SmartVestor Pro. 💵 Start your free budget today. Download the EveryDollar app! 🏠 Find a Ramsey Trusted Real Estate Agent 💸Enter The Ramsey Cash Giveaway for a chance to win $10,000! 📚 Shop the $12 Sale to get life-changing tools to help you make real progress! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Ramsey Solutions is a paid, non-client promoter of SmartVestor Pros. Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by Jade Warshaw. And we're taking your calls this hour at 888-825-5225. You call in, we'll talk about your life, your money, your weird relationship issues that have to do with money somehow. All of it right here in front of you. And here's the singular goal. We want to help you take the right next step to help you win in every area of your life. So call us up. Anna, or is it Anna,

kicks us off in Tallahassee. What's going on? Hi, I am currently living as a stay-at-home mom with my husband. He is active duty U.S. Air Force, and I am slowly wanting to start going back to school. I have a couple grand and a 529 and a full FASFA, but I'm looking to see how I can pursue going to college when I don't really know what I want to do in the most cost-effective way possible. Cool. So how old are the kids? Right now we have a two-year-old boy, and I'm currently pregnant. Wow. So what is the game plan for this?

Are you wanting to do school completely online so that you can stay at home full-time? As much as possible. My husband, really luckily, I mean, he works pretty much like a 9-to-5, and his work, he's going to college as well right now. And his is covered, I imagine? Yes. So he is actually Florida Air National Guard, but it's full time. So we will be where we are now for the next about five years, luckily, at least five years. So we don't have an issue of like

moving or anything like a typical military family would. Here's the thing that stood out to me. You said that you're not really sure what you want to do. And I think that's a big part of I would not want to pay money, no matter how cheap, for an education that you're not even sure you want. And so I think the first step is figuring out, maybe finding what you're wired to do. Yeah, I guess my struggle is, I mentioned I'm a high school dropout. I have a GED.

I dropped out at 16 years old. I worked in law enforcement when I met my husband, kind of weird, but I haven't really found like a niche that I'm good at because I didn't go to high school. I didn't, you know, and I haven't gotten to pursue that, which is why I'm kind of, I'm definitely nervous to like. Well, I wouldn't let that hold you back. That's more of a mindset thing. There's no difference between the skill set that you have and someone who got a high school degree and is all of a sudden, you know, has all these amazing skills. I think you have a lot to bring, you know,

value to the marketplace. And we just have to help you figure out what you're wired to do. And we'll give you a free tool to do that. It's called Find the Work You're Wired to Do from our friend Ken Coleman. And it comes with the Get Clear Career Assessment. And this is something you'll take. It'll take you a little bit of time. And once you're done, it's gonna actually give you some kind of sample career options based on what your talents are, what you're passionate about, what your mission is,

what kind of impact you wanna have. Then we can figure out, is college the right next step? Because a lot of people just take it too early because they go, well, I'll figure it out. I'll build the plane while it's in the air. And that's costly. That's costly and dangerous.

But I would say for somebody like you, and I would suggest this for many people, but community college is a great place to start, especially online, because at least when you do decide to go, you're getting your gen eds out of the way. It's one of the most inexpensive options there are. And again, the very beginning is just that general part anyway. It's just those general classes. So when you do decide to go, when you do find the things that you're interested in, then I would start there. Yeah, for sure. So I would start doing your research on what is available in your area, what a community college costs, what are the online options that you have in case you do need to be at home full time and kind of, you know, crush it during nap times and evenings and whatever your schedule looks like. And then you can look at how we're going to pay for it. And we do know this, we're

going to pay cash. Yeah. What's in that 529? I've got only about two grand. I also have a full Pell grant and I've researched, there are a couple like spouse scholarships that I might qualify for as well. Okay, good. Then, like George said, at the end of the day, the budget informs where you can go. And that might mean that it takes a little longer while you stack up some more money. But at the end of the day, the cheapest place and the best way to pay for a degree is at a place that you can afford in cash. And it sounds like she's going to do that. So I love these two questions from Ken to help decide, is it the only way and is it the best way? But first you got to figure out what that thing is.

And then if college is the only way and it's the best way, then we can begin the journey. So hang on the line, Anna. We're going to send you a copy of Ken's new book and assessment, Find the Work You're Wired to Do. I hope it's helpful for you. And even talking to some people, like if you have an idea, like I might want to go into this field or this might be interesting to me taking some time to shadow somebody who does that or you know hey

can i hang out with you one day or tell me like interviewing them i think is good well the idea that we tell a 17 year old hey just guess and then the rest of your life you kind of have to do this or else you're going to have a lot of regret and guilt and student loans spend that's what we've done 50 000 to guess yes or here's even here's even worse. Well, I want you to go to mom and dad's alma mater because that'll make us proud. Keep it in the family. We all went to XYZ famous name brand school that now cost 20 times what it did for mom and dad to go through. And I want you to go to the same sorority that's going to cost 10x what it costs for me to go through it. It's these decisions that, yeah. No proof that name brand will ROI.

Absolutely. Let's go to Jimmy up next in Atlanta. What's going on, Jimmy? Hey, so excited to be talking to you all. You as well. Thank you for taking my call. My wife and I are working through the baby steps. We're on baby step two.

We're working through the baby steps. We're on baby step two. We're pretty motivated. We're having a baby, our third baby, in February. Party. And we need to find a different car to be able to get all our kids around in. And we own both of our cars now, and so we're planning on trading in my wife's car. But I just want to know what the next right step is for like the timing of that. We've paused the baby steps and are stacking up as much cash as we can to make sure we can get everybody home safe from the hospital. You know, some good advice I've heard from you all along the way.

How much money do you have saved? We have right now $5,700 saved. And how much do you need to do the upgrade you're trying to do? Well, I mean, we could possibly trade in, I don't know. That's the first step. The first step is you looking to see, look in the market and go, okay, what can I get that seats the whole family reasonably because you're in baby step two. And you've got the $5,700 plus the trade-in value of your wife's car. And I would suggest not doing a trade-in and instead selling at private value because you're going to get more for that.

So look up the KBB private value and see if you can sell it yourself versus trading it into a dealer who's going to give you $3,000 for it when you could have sold it for $7,000 in the marketplace. That's good. So if you do that, now we know what the gap is. All right, I need an $11,000 van. I can sell mine for seven private. And so then you can figure out the gap of what you need in cash. And I probably wouldn't do any, like you guys are in baby step two. Now's not the time to like have this big car dream. I think it's whatever gets you to the next vehicle that does what you need it to do. You might have this van, whatever, for six months before you upgrade, but you just need to make sure that you don't have zero dollars when mom and baby go to the hospital. So that's the balancing game we're playing, Jimmy.

Okay. So you do, the timing's up to you, but I would want to save up as much as I can real quick, get the van knocked out, and then save up even more to make sure we're ready for baby, if they all need to happen before baby's here. And listen, there's nothing wrong with it. If you guys have to ride in separate cars for a while to make sure you have cash when the baby gets there, that's not a bad thing either. Yeah, but I'd be selling everything because nothing matters more than that sweet baby

at this point, especially with a third one. You guys have done this rodeo. You know how it's going to go. And so that should help you with your budget. This is The Ramsey Show. You know my philosophy on planning and preparing. Being proactive is always better than being reactive. We have a provider we recommend that can help you stay prepared for unexpected medical situations. I have a medical emergency kit from the doctors at the wellness company. And guys, let me tell you, you really should check this out. This is not a simple first aid kit.

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Open phones at 888-825-5225. Jade, I'm seeing something on this desk that I've never seen in my life. It is the 2025 Ramsey Goal Planner and it's even more beautiful than I could have ever imagined. Yes, it's very blue. It's like the ocean. And for those of you who don't know, every year we do a goal planner here. And it's a wonderful gift, but honestly, it's great if you want to buy a gift for yourself. This is a great gift to give yourself.

The gift of staying on track for all of your goals. It's not just money. It's not just money. We talk about faith, relationships. You cover the money side. John covers relationships. Rachel covers the faith side. And there's content just money. You talk about faith, relationships. You cover the money side. John covers relationships. Rachel covers the faith side. And there's content in here. It's not just lines to write notes.

It's not just a calendar. It's not just a notebook. It's not just a journal. It's like everything you could all ever want in one goal planner. There's a vision board in there for you to come up with your vision for the year. There's plenty of places to take notes. I'm a person who, George, I like pen and paper. I like to be able to write things.

Things get lost in my phone. I've got literally 3,500 iPhone notes. Yes. I'm not keeping track of anything in there. Oh, this is what you... George, maybe I'll get you one. I would love that. They never get one to me, Jade.

It's actually upsetting. So get me one for real. I'll get you one. I'll splurge because here's the thing. Right now, now is the best price that you're ever going to pay for this it's never going to be cheaper than it is right now you can get it for 35.97 for two weeks only and then after that the price goes up to like 50 bucks george wow so don't wait for black friday because it's not getting cheaper than it is now yeah i gotta get yours i gotta get yours today they go on sale two days

so you are the early bird who gets the worm. And let me just, I'm going to spend some time on this because mama, mama put some effort into this. Listen, let's be honest. I wrote three of the, the, I guess they're kind of like inspirational messages in here. They're kind of like, kind of a, almost like a blog from the heart that helps people, guides them along each step. So I wrote about anything financial, like if you need motivation or just kind of a plan financial,

I did that. Rachel wrote the spiritual and that part of it. And of course, John came in there and gave you the health and wellness and mental wellness. And so it's really cool. The thing to note though, like you can do so much meal planning. I'm going to use this for that because you can go in and you can write what your meal plan is. So you can do so much meal planning I'm gonna use this for that smart because you can go in and you can write what your meal plan is so you can stick to your meal budget there's a place for your goals you can reflect on it there's a place where if you're listening to uh podcasts you can write the podcast the episode so you can go back to it if there's a book that you're reading you can or if somebody said hey you need to read you know blah blah you could put it

in there come back to it i just and it's so beautiful and it's well made i like when i can close it and i know i can be hard on it and it's got those like nice metal edges listen solid i need built different i'm like the sham wow guy remember how he could like sell anything that guy well he was on something jade so i hope you're not exactly like the sham wow guy i'm not exactly like the sham wow guy but what I want you to know is you need to pick up a goal planner. You're never going to get it cheaper than you are these two weeks. $35.97 is the price. And then it goes back up to $49.50.

So let me tell you, these sell out every single year. Every year they sell out. So if you want one, you need to get it now. If you're thinking it'll be a good Christmas present, order it now. Because they won't be here if you wait until November, December. So get one today. I'm going to get one for myself, and I'm going to get one for Georgie boy over here. Thank you.

You're welcome. Merry Christmas. So wonderful. All right, let's get to the phones. Dane joins us in Denver, Colorado. What's going on, Dane? Hey, how's it going? Good.

How are you? All right. Great. I have a little bit of a boring question, I suppose, but it's one that's important to me. That's all that matters. I worked at Colorado Department of Transportation, or I am currently working at Colorado Department of Transportation. It's a state employment position. And as part of that employment, I do not put into Social Security anymore.

I put into the state's pension and all that. I can give you details if you need. But my concern is, is this going to hurt me later on down the road? I'm 46 years old, so I got 20 years left of this, but I just want to make sure that I'm not doing something that's irreversible. I've tried getting answers from them, but it's... Well, here's the good news. If you're ever relying on Social Security as your retirement plan, it's a bad plan. And so I would not look at this as, oh my gosh, am I going to be okay? But you're right that it will affect how much Social Security you get because it's based on your lifetime earnings. So the way it works is the administration, they calculate the benefits based on your highest 35 years of earnings.

And so if you don't pay into it, you won't have those earnings factored in to your benefit calculation. And so you can go on the Social Security website right now and calculate what it will be. What did it say? Yep. It says full payment will be $2,206. Okay. Then I can either delay it or make it early. And that's at full retirement age? Yeah, that's at age 67. And I do have the four green bars with the check marks. It says my 40 work credits have been gained. And I do do side gigs, and I do kind of put in a little bit each year due to that. Then it's just based on what you've done previously up until this point. And if you've opted out going forward.

It's not going to grow in that sense. But here's the thing. You're also trading that to where now you're going to get a pension. And on top of that, please tell me you're investing outside of all of this. No, I am. Okay. Yeah. No, I'm definitely, I'm not depending on this.

I just wanted to know, I had a buddy that I tried to get hired here, and he opted out because he was scared of this. And I was like, well, maybe it should make me think twice about it. So I looked into it, and I feel okay. And, yeah, I just wanted to get you guys' opinion, really. Well, as you have more years where it's zero contributed, that will affect your average because they're taking an average of those years. And so it may not be that much when you actually get to retirement because they're assuming you're going to continue to contribute that amount. Correct, and I'm not going to be. So I would assume, Dane, if I'm you, I'm going to assume I ain't getting nothing. And if I do get it, that's going to be some gravy we'll give to

the grandkids. That's how I look at Social Security. Yeah, you sound like my dad. He's like, why are you worried about depending on the government anyway? I love your dad. Your dad is a wise man, my friend. So that's what I would be doing. The pension, the social security, it's nice to have, but I'm not going to plan on it. I'm going to instead invest myself into things that I have control over, where I control the investments and they don't have terrible returns. And that's going to be things like a Roth IRA. That might be your best option right now. Yeah, no, we max out my Roth, my wife's Roth. And with the state, they make you donate 10% and they match 10%. So I'm automatically saving 20%. And then I'm doing the Roth and we have 850K from previous investments and stuff already.

Wonderful. And you're only how old? I'm 46. Okay. So you're going to be a multimillionaire when you come to retirement. Maybe. Yeah, I hear Dave and you guys say it doubles every seven years. I've done those calculations.

That's right. It seems a bit optimistic. Well, it's just based on, it's a simple thing called the rule of 72. So if you, let's say you get a 10% return for easy math, then 7.2 years, that would have doubled. So your 850 turns into 1.7, if you just don't touch it. And the thing is, you're going to continue to contribute on top of not pulling out any money. And so if you pop into our investment calculator on our website, Dane, you're going to have some confidence. You can do a range.

You can say, what if the market does 12%? What if it does 6%? And that will give you a nice range of what your life might look like. Yeah, I always err on the side of safety, really. And we own our house, so I don't have to worry about, I mean, all that extra mortgage payment. I think that goes towards savings. That's amazing. What's your household income?

$112,000. And you guys are investing at least 15% because you're in Baby Step 7. Probably more than that? I'm doing 25% to 30% is what I estimate. You're going to be A-OK. Dane, look at that. 25-30% of over six figures of income for the next 20 years on top of what you already have yeah i would not be social security is going to

be such a small part of your world it's going to be cute when you get that check every month let's ask you that's some coffee money right there because your investments will be making 10 grand 20 grand a month at that point versus a measly two grand from the government if you're lucky. I got you. So listen to your dad, Dane. Dad wisdom right there. That's good. You're going to rely on the government who are known for their ability to manage money

so well. Social security is not the thing that you want to depend on. That's more insecure than dudes with lifted trucks. You know what I'm saying? Those pavement princesses listen they're saying by 2034 the amount the percentage is already going to be depleted so i wouldn't count on it no thank you this is the ramsey show you've worked saved sacrificed and been gazelle intense with your financial game plan but do you

have the right defense in place, like the right health insurance? Look, you can't walk past a doctor's office these days without getting a massive bill. And if you don't have health insurance, a major medical situation can undo all of your hard work. That's where my friends at Health Trust Financial can help. They work for you, not the insurance company. So they find you the right health insurance and they save you money. Ramsey has recommended Health Trust Financial for two

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You call in. We'll talk about your life and your money. Dawn is up next in Dayton, Ohio. What's going on, Dawn? Hi. I'm wondering if I should be paying off my collections first or where that falls in the baby steps. I'm not sure. Okay. Yeah, definitely.

I mean, typically in a debt snowball, we're listing everything from smallest to largest whilst still making minimum payments on everything else. But a couple of things, you know, if you owe money to the IRS, if you have money in collections, I definitely like those to jump to the top of the list because it's only going to get worse, especially if you're dealing with the IRS. So what is the debt that's in collections and how long has it been there? It's been there less than two years and my husband has about six or seven on his and I have about four or five under my name. That are in collections? And I have other, yes, but I have other payments. And so I guess I was wondering, should I pay off some of these other smaller credit cards so I can have then the money to put on the collections?

Well, the good news here's, let's back up for a second the good news is once it's in collections you're almost always going to be able to settle the debt okay so do you know just give me a give me a a ballpark the smallest debt that's in collections how much is it for 94 okay do you have and the largest is like 2200,200. Okay, 940. And then I have my student loans that equal $32,000, but they're not in collection. Good. They're on hold. Okay. And there are 16 of those.

They're all separate and they're all like smallest is $212,000, the largest is like $4,500. When you mean on hold, are you talking about deferment? They're on hold are you talking about deferment they're on hold i i i don't have to pay on them because of this program with like the i think it was like the government yeah okay um so let's take a deep breath because i feel it i can feel you through the phone. You've got 48 debts hanging around you right now. Yeah. And we have a car loan and we have a truck loan. Okay. So let's take it piece by piece. Number one, let's talk about the student loans. I'm fine with you having those on hold right now. Save plan, the only way that it's not a piece of garbage is in this case, if you're temporarily using it to lower your payment so you have more

money to throw to your smallest debt and your debt snowball. So right now you're temporarily using it to lower your payment so you have more money to throw to your smallest debt and your debt snowball. So right now you're utilizing it in the best way that you could possibly utilize it. And let's knock out these smallest debts that are in collections. I want you to list out all of the ones that you think you can knock out quickly.

And you're just going to call them up and say, hey, I don't have $94. Will you settle it for 60? Hey, say hey i don't have 94 will you settle it for 60 hey i don't have 140 will you settle it for 90 and get it all in writing and do not give them access to your bank account okay yeah i looked that up on the website and i saw all the directions of what to do okay good so i but i couldn't find the answer as to where the collection falls in the debt snowball. Well, like you mentioned, when you have the money to settle, settle them immediately. But if you don't have the money, you might need to clear up one of those little debts,

little ankle biters to clear up some payments to save. But if you could go sell that car, sell the truck, take those proceeds, settle all your collections, you are going to breathe a breath of fresh air. Let's talk about the truck. Tell us about your vehicles. So the truck is, it's older, but it's a Toyota Tacoma, and the payment is $245, and I owe $9,600 on it. Okay. My husband.

What's it worth, you think? And it's my car. I looked it up. Kelly Bluebird's value is $8,800 to $10,200. Okay. So you could clear it. You might be able to clear that. Now, you need something to drive in the meantime?

Could you guys go down to one car temporarily? We could share a car. It would be difficult, but we could do it. I think you can do it. Listen, my husband and I did that. If we could do it with kids, you can do it. So I would definitely make that deal, get out of that truck, clear up that 245. That's going to

help you get traction on some of these collections. What else is there? Then there's the car. I owe 20,000 left on the car and it's $530 payment. Okay. And what's it worth? That car's worth about 20. It's about worth what I owe. Okay. Okay. I'd clear that one out too and get something cheaper. Would you sell that? Yeah. I'd get out of that because you're going to basically break even on it.

Do you guys have any money saved? I'm guessing no. We have $800 and like we started the emergency fund. And so we're going to be able to finish that by the end of the week. Okay, good. Here's the deal selling the car is going to free up more money right now than selling the truck okay 530 versus 245 oh so i would sell the car first you free up 545 you could pretty quickly save up aggressively to get some kind of vehicle if you needed one. But you can drive the truck for now and just hang on to that while you clear up the other debts. Yeah, I never thought about that,

because the car is like a nicer, newer thing, but the truck still fits everybody. Yeah. Well, trucks can hold their value. If they're well-maintained and it's a good make and model, which yours is, I think that thing will sell even six months from now. So that'll free up $530 for you to start attacking the other debts, to start settling some of these now. So that'll free up $530 for you to start attacking the other debts, to start settling some of these debts, and that'll keep that snowball rolling for you. That's the key. You want to keep progress and momentum. The couches, like if I pay off our couches and then this other private loan at the credit union, that'll free up like $540 total. Excellent.

And then can you guys work extra? Yes. So I work at a furniture store, and I have a basic pay of $2,000 a month, but anything I sell, I get a percentage of. Okay. So that's on top. Love it. Did you buy the furniture with debt from the store you work at? Yes. Okay.

Would they somehow take it back because you're an employee could you get out of that debt i guess i never asked about that how old is it it's three months old hey i might talk to my manager and go listen i want to be the best employee i'm about to bust my butt i'm trying to get out of debt i made a mistake taking out debt for this furniture would you guys take it back and refund me? I mean, it's like a 90-day return policy at that point, you know? That I could ask. I could ask.

That would be good. I'd get real creative because anything you can sell is going to speed up this process. And anything you can reverse is going to speed up the process. Are you using a budget? Are you using every dollar? I'm using every dollar. My husband has it as well. Okay. And he's on board. He's as excited as you? He's on board. He's done. Good. He's 100% disabled from his two tours in Iraq. Wow. And yeah. Is he working right now? What's he he doing so he's not physically disabled um and so he

he does that's the other thing we have extra income with he like right now he's painting a porch and so we're able to you know have that money to throw on this as well okay so how much are you guys bringing in every month? We're bringing in about six to eight a month. Okay. And so that, I think too, it's just, it's like when things get stressful, oh, we'll go out to eat or, you know, like we're not as tight with the budget as we could be. Yeah. Listen, that's a coping. I think that's a coping mechanism for all of us, right?

You had a hard day, like let's go to Applebee's, right? You got to find ways to replace the habit with something. You need to find some frugal vices. So next time you get stressed, it's going to be, you know what? Let's meal prep with some good music and go on a walk. That's going to be our new way to de-stress. Yes, that's a great idea. So just brainstorm ways that make sense for you guys to go, hey, it's going to be our new way to de-stress. Yes, that's a great idea. So just brainstorm ways that make sense for you guys to go,

hey, it's going to be hard. We're signing up for a little journey. It's going to be 18 months, but after that we're going to have so much more freedom. Okay. How long have you guys been married? Almost 20 years. Have you ever been debt-free in your marriage?

Never. Oh, my goodness. You're about to experience a whole new marriage, a whole new husband. Yes. How much debt do you have total? Our house is, we owe $167 on the house. Other than the house, what's on the consumer debt side, collections and all the other stuff? Total, I want to say it's about $ to 75 grand total. Okay. So we owe as much as we make a year. Okay.

So think about this. You throw three grand a month, that's 36 grand a year. We're done in two years. So that becomes the new equation. How do we find three grand extra to throw at the debt? And we make eight. I think we can do this, Don.

I believe in you guys. Call us back if you need help. The Every Dollar Budget, let that be your guide as you complete this task, this daunting task of getting rid of collections and the car loan and the truck loan and cut up the cards and never look back. These companies are not your friend. You're not doing yourselves any favor by locking yourselves up in chains with payments. This is The Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So, work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps

and expertly guide you through every step. Learn more at churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Welcome back to the Ramsey Show. I'm George Campbell joined by Jade Warshaw. The phone number to call is 888-825-5225. Well, Jade, I've been getting blown up about this.

People have been DMing me going, hey, what is going on? There was this massive data breach. Social security numbers are all out there. Apparently 2.7 billion records leaked in this massive breach. And we hear about this. It feels like every month now there's a new giant data breach that's bigger than the last one. It's always the mother of all data breaches. Digital age. Just want to make sure people know what's going on, what we know so far.

And this is a massive database containing 2.7 billion records has reportedly ended up on a criminal forum. That sounds like some dark web. The dark web. Some Gotham level stuff right there. These records belong to individuals in the U.S. and were allegedly stolen from the National Public Database. While the accuracy of the leaked data could not be verified, hackers reportedly obtained sensitive info such as names, mailing addresses, and social security numbers. The scale is so vast that if you live in the U.S., it's likely that some of your data is

included. I don't know why. Listen, I might be a little insensitive. I feel like with the internets the way they are, I feel like your stuff is just always out there, which is, I don't know. For me, it's like, let me just have identity theft insurance and then I don't worry about this. Is it just me?

There's definitely a piece where you sleep better if you have identity theft protection. And we've talked about it on the show. When it comes to, you need to have all these types of insurance, we lump in ID theft protection, even though it's not technically insurance, it will help you and it protects the wealth that you're trying to build. Yeah. And I don't want to, my thing is I don't want to have to deal with it. I don't want to have to track them down. I don't want to have to convince anybody. It's, I feel like it's inevitable

that something's going to leak, right? You can go on the internet and find out where people live and find out their mother's name. You know know like there's so many things that you can just google and find which is scary in and of itself i bet i can google jade right now and find out some info give anybody any ideas there's her social security number right there they better not find it in your instagram bio if you find it come tell me so i can wrestle somebody down to the ground but the point is i think that if you have the right protection, you don't freak out as much when you hear this stuff. Because you're right.

Every other day, I feel like they're saying, we've been hacked, you know? Yeah. Well, we have a great blog on how to prevent identity theft. And we'll link that in the show notes. And it walks through some simple things you can do. One of the big ones I tell everyone to do is freeze your credit. Yes. All three bureaus freeze it.

And that means nobody can open up a new line of credit. It is blocked unless you unfreeze it. Don't give it like don't fall for the scams. I feel like there's a lot of scammy things that go around, especially the beginning of the year when people are filing their taxes. Never give away your information on the phone. Never give away your information via text message because there's a lot of scammy text messages right now where they'll like um they'll be like hey i had a good time at dinner last night oh and you're like oh is this wrong number yeah and you open it up but but it's so

simple and they'll kind of fish a little bit and then it's like oh well just send me your number or just send me your address and i'll get you like that kind of stuff and it's like don't fall for it i hit him immediately hit that report and block immediately mark is junk no thank you yeah so on top of freezing your accounts with the credit bureaus i also pull my credit reports once a year and i just did this jade and it is i mine is squeaky clean nothing on there i don't have a credit score. I got zero accounts, zero debt. It feels so good. What do you use? Who do you pull your credit with? Well, all three bureaus, but you can do it through annualcreditreport.com. So that's not like a, this is just the website you go to do this. And it's a great way to just sleep better at night. And then on top of that,

you can get ID theft protection. We all have it through Zander here at Ramsey. Dave covers it for the whole team that's how much he believes in it even if you you know don't have it as a benefit super affordable it's like six or seven bucks a month yeah and for a family you can do it for like 12 bucks a month i was gonna say i think the most we've ever paid for it before i came to work here was like 12.99 yep and they have a recovery of up to you know two million in stolen funds excellent and i went through this in 2013 and Xander helped me climb out of it. Oh, really? You had your ID stolen? Yeah.

They opened up accounts across the country with like AT&T and Verizon. I got collectors calling me. I'm like, I don't even have these cell phones. I had like T-Mobile at the time. I'm like, what's going on? You know, a buddy of mine had her social security number stolen and the person filed for her tax return and then stole her tax return and so now she's got to go through this whole thing she has to have a pin number and da da da

da to prove that it's her and so in many ways she's safer now than she was then because now she has all the fail safes in place but man oh man don't want to be safe out there folks stay safe all right let's go to the phones jake is in Las Vegas. What's happening, Jake? Hey, yeah. Thanks for taking me on. I had a question. I'm 21, about a year into working corporate life now, but I feel like I'm behind on investing, trying to see what I could do to actually build wealth. I feel like I'm doing the right things, but I don't know if I could be doing a lot more. I mean, I feel like I've got the right things, but I don't know if, you know, I could be doing a lot more, you know? I mean, I feel like you got to take advantage and maximize our 20s. Well, tell us what you're doing. How do you feel like you're behind at 21? It's like a newborn baby being like,

I feel like I got to, I'm behind on my reading skills, got to up it. Like, you just started your adult life as far as career and income goes. Yeah, you know what? I think a couple of things, right? I know that Ramsey himself had $150,000 to invest in real estate at 22, and I know people from my high school making $170,000 a year at 19, software engineers in the Bay Area. So the bar is kind of up there. Good. Well, you create that bar for yourself,

depending on who you're going to compare yourself to. And so I don't want you to get just totally into this vortex of like, well, someone else is making more out there. You got to realize like you got to run Jake's race because running someone else's, there is no finish line. You're always going to be comparing yourself to people making way more who have way. If I compare myself to Dave Ramsey, dude, it's going to be an endless chase in life. I love the fact that you have this high bar though.

Like I think that you have good, I like that. I feel like you're challenging yourself. And I think that that's going to be good as long as you don't get ahead of yourself. So tell us more about your financial snapshot so we can best advise you. Yeah. So I've been working for a year, like I mentioned. Pretty stable job that I say. It has good trajectory.

What are you making? Jinx, you want me to talk? Oh, sorry. Who asked what? You're good. What do you make? I work in software sales. I make $65,000 base and about $43,000 in commission.

That's supposed to be on target earnings. Incredible. Good. So you're making almost $100,000 or over $43,000 in commission. That's supposed to be on target earnings. Incredible. Good. So you're making almost $100,000 or over $100,000. Right. At $21,000. You're already way ahead of the game, by the way. What's your living situation? So right now, I'm actually moving. Currently in the process of moving

from Vegas to the East Coast. So renting? It's pretty okay. Yeah, renting. Yeah, I'm renting right now. And that rent is about $800 for my room. No debt? Yeah, no debt. Okay. Three to six months saved? Yeah, I have about a little bit over $30K saved. Okay, good. About $10K in my checking. Why is it in checking? Because I always feel like just in case, like I have all my savings in my high-yield savings account, but I need something like in a pinch in terms of getting that just because it takes a second to transfer from my high-yield to my checking.

Okay, $10K feels like a lot to not be gaining at least four and a half percent but what do i know uh i probably would lower that significantly because i mean you're a renter so there's not a whole lot that's going to require 10k in a pinch right okay that's just me you're not replacing like an hvac tomorrow that could be seven grand and even then with high yield what i've done jake is i've done a wire transfer i'll call them and say hey i need it i need the money sooner rather than three business days or whatever and they'll wire that business day or next business day thing is most i feel like most online high yields will do 24 you know if you do it that day it'll be there the next day, but that's neither here nor there. So right now, are you investing 15%? Is that what you're doing? Yeah. So I have, I'm

pre-tax, I'm investing 10%. I get a 6% match, so 10% into my 401k and then 6% into my employee stock plan. And then post-tax, I do about $500 a month into my Roth. Okay, so you're above the 15%, which honestly, in this case, if we're walking the baby steps, we'd say 15%. And then if you're paying off your mortgage, anything beyond that, you would put towards the mortgage. In this case, I'm wondering, like once you said you're moving, what's the goal?

Are you saving up for a down payment? I wouldn't wanna go too hard in the non-liquid money because at some point you are going to want to buy a home. And so I'd probably cap this at 15% and save above and beyond for a down payment because that day is going to come. How much do you have in investments currently, Jake? I have about a little bit over $30,000. Well, let me tell you this. I crunched the numbers for you. At 21, at age 60, you got 30 grand.

You keep investing at 1,400, never make another dime. 8% return, you'd have 5 million. And that's conservative. You're doing great. Keep it up, my friend. This is The Ramsey Show. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed?

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I'm George Campbell, joined by bestselling author Jade Warshaw, and the phone lines are open. They're hot, 888-825-5225. You call in, we'll talk about your life and your money right in front of you because we love you that much. Devin is going to kick us off in San Diego. What's going on, Devin? Hey, thanks for taking the call. Sure. Appreciate whatever advice you might be able to give.

I hope. Don't speak too soon. Yeah, right? My basic question, and I can give you some more context after I give you the basic premise, is that is it okay for me to exceed the 25% of my net monthly income on housing, right? So, uh, mortgage, HOA, property tax, everything all in if I'm still left with nine to $10,000 per month to live on. Um, because I definitely

get the advice of not exceeding the 25% of your net monthly income if it leaves you with nothing to live on. And so I guess for my case specifically, does it make sense? And I can answer any questions you might have. Tell us more. What do you earn? You have a fabulous income, I can already tell. What's the income? Thank you. So, right, it's going to be $290,000 base income, $320,000 in total comp. I have no debt. I have no car payment, no wife, no children.

Post tax per month, it probably comes out to a little bit north of $15,000. And I have about $410,000 saved up in liquid assets. Wow. Way to go. Do you have any debt other than the mortgage? No debt. Or is this... No debt. And I don't have a mortgage now, right? This is like a prospective purchase that I may make. Got it.

I was just unsure, based off of what I make now, is it okay to exceed that? How far? How much do you want to? 25%. Is it 55% or is it 27%? Yeah, right. Big difference. So that's a very good question. So from what I've seen, it would probably be somewhere between $5,000 to $6,000 per month for mortgage, HOA, property tax, and homeowner insurance. So it would probably be in the neighborhood of $30,000. Are you investing right now? Yeah, I have a lot of money in a lot of index funds. That's pretty much where all my money is. Well, I'm wondering, because when we talk about 25%, we're talking about after tax income, but before other deductions like health care, 401k investing.

So that might help your numbers. That's why I'm asking and digging into that side. Yeah, so currently I just got to the point where I qualify to contribute to a 401k for the company that I work with. And that $15,000 would be after healthcare is removed. So healthcare would already be reflected in that. So here's your homework. I want you to manually add those pieces back in and go, okay, after taxes, but before anything else, this is what my income is. Then do your 25% and see how close you are. But to answer your question, if it's 30% and you still have plenty of margin to invest, to pay extra on the house, to get knock out the

mortgage, that's the key here. Like you mentioned is we don't want you to be house poor. It's not a legalistic rule that Dave said. It's because we get too many callers and they're like, well, I can't make progress. And we're going, what's your mortgage? I go, it's three grand. How much do you make? Five grand. We're going, there's your problem yeah and so for you that's not an issue the key is is your income going to stay there i mean i would like it to right uh nothing is certain um for the first a lot would have to change yeah yeah that's that's the worry you know when we say 25 it's also conservative because life changes, and we don't want that payment to just be right on the brink where it's,

I can make it, but it's tight. How much liquid cash do you have laying around? I guess to find liquid. Like HYSA? Like 75 grand, which is irresponsible, right? I should have more invested in that 75 grand uh which is irresponsible right i should have i should have more invested uh in that yeah like six months like if you want six months of expenses liquid that's good or if it's a down payment you're going to make in the next year or two then it's wise to keep it liquid but you said you have 410 that you could you could create you could make that liquid by selling off the index funds yeah okay are you Is that your plan when you buy the

house? Are you going to use all of that as a down payment and buy it? Not necessarily. I would like to put 20% down, right? So I think I would need somewhere in the neighborhood of $200,000. So I would need the 75K in high yield savings and then probably come up with the rest through the index funds that I have. How old are you? 34. Okay. I'm just wondering why not sell off more of the index funds, put enough down that you get it to 25% and then you're breathing easy and you still have tons of room to invest. You're still going to create so much wealth that I feel like you're hanging on to the investing side.

You've got that muscle down. I want you to have a life in the meantime and have plenty of margin. Oh, so you mean, so put enough down, so it would bring the monthly payment down to- To 25%, or less. I mean, if your monthly mortgage and everything all in is 15%, you're going to be breathing extra easy, to where if you don't have a great year for some reason with commissions or whatever it is, it's not a big deal. Okay. And the more you put down, the less mortgage you have, the easier and faster you're going to pay it off. And so you see how it kind of creates a really cool cycle there. Yeah. Cause I guess, I guess the part for me was if there was missing something for that 25% rule, why that is recommended. Because if I were to spend $5,000 to $6,000 per month and it came out to be 33% to 39% of my net, but I still have $9,000 to $10,000 left over, would that be responsible?

I don't think it's going to implode your life because you can out-earn stupidity for a good while making 320 grand. But you also gotta think about what if I have a wife and kids? And what if she stays home? And what if that baby is expensive? And what if you wanna put them in a private school? And you just have more options

when you have more margin. And that's what I want for you. Even though you're in this stage of life right now, it doesn't mean it'll always be that way. That makes complete sense. I appreciate the help. Absolutely. Thanks for the call, Devin. That's a great problem to have. It is a great problem to have. I make $320,000. What should my housing be? Well, you got more options when you make that much. Yeah, the 25%, obviously, there's the barrier between blessing and burden. But in that case, it's also accounting for life change, whether it you you're in this

job now but you don't know what awaits you a year from now you know you're a single guy now but you don't know what awaits you five years from now and so really sticking to that 25 to 30 percent like if you're 28 it's not going to destroy you you're not on fire you're not on fire um but for some people depending on their numbers 28 is a big deal big deal. Or if he goes, hey, I need a pay cut because this job is burning me out and I need to make 150 now and I want to be home more with my family. Well, now he's locked in. Exactly. And so no one's ever called in going, my mortgage is only 15% of my take-home pay and I wish it was more, man. I wish I was closer to 30. And so it's always going to be a blessing to have less payments in your life. I think 25%. I like that margin because it really enforces a key principle of everything we teach, which

is truly living below your means. And the more that you keep your lifestyle at this low level, ultimately, like we've talked about, the more freedom you have, you can switch jobs. You can decide, I don't want, you know, 320 is a great income, but it's not the life for me anymore. I'm going to go over here and be a photographer and make, and you never have to switch your housing. You want to give 10%. You want to invest 15%.

You still want to go on vacation and upgrade the car. Life is just better with more margin. Yeah. And so that's what it is. It's not legalistic. It's all for freedom, baby. This is The Ramsey Show. Are you working the baby steps?

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Yvette is in Houston, Texas up next. What's going on? Hello. Thanks for taking my call. Sure. I'm actually having a lot of issues. Um, I'm in a foreclosure and I, yeah, I initially did everything to get out of it. And I thought every, everything was taken care of as far as a modification. Um, I don't know how important this is, but, um, I'm divorced and my ex-husband is on the deed, even though he's never had any connection to the house. We happened to be in the middle of the divorce when I purchased the house. So I was told that he had to be on the deed. I didn't even realize I could take them off. I'm just writing that out.

Yeah. But I mean, he's cooperative with, um, you know, like when I need the paperwork and all that stuff done. So, um,

he lives in another state though. So when I, I was sent the, um, final documents for the, the, uh know sent a copy to him and a copy to me and I called to follow up to make sure his copy was actually received by them the first time it wasn't but the second time they said yes it's here you know what came in on this day signed in but it hasn't been reviewed yet so that was a worry that was out of my mind um but my documents they sent them back to me and said that the

notary did them incorrectly and i needed to have them notarized re-notarized okay so anyway by the time i did that and sent it in and i had already made two two payments not the trial payments the actual um new modification payments I had already so yeah I'm I'm into it so then when I called to follow up they said that the deadline had passed by two days and I no longer was yeah I was no longer eligible for the modification. And I talked to these people constantly on a regular basis. And I have to say that my assistant there, he was very stressful. He stressed me out every time I talked to him, but he never really answered any questions as far as, you know, what happens, you know, by this date, give me dates, never.

What's the current status? How many payments have you missed? Well, like I said, I was making the two that was supposed to happen and they stopped and they wouldn't take anymore. So right now I think. So what's their last communication to you? Where are you at in the foreclosure process? Well, now it's on hold only because i'm a i'm a victim of a hurricane and i didn't ask for anything they you know they just said were you affected by the hurricane and i said yeah and then the person said um what hurricane when is this recent hurricane yeah texas has hurricanes anytime it's summer so yeah i mean like but i'm saying that happened

this summer yeah it just happened like i don't know three three weeks ago but even before that we had a we had a tornado before that and i was so they're putting it there they put it on hold because of the that inclement weather situation yeah and and on hold is what I thought it was but it's a for it's a forbearance okay until when until um the end of October can I ask a couple can I ask a couple of questions just to get my head around this what took place for you to miss the initial payments what was going down that was causing you to miss however many payments that you missed and got behind and has is that situation over no and i'm i'm willing at this point to sell my house but um and that's something i fought against for so long but no i'm i have a disability and i haven't been able to work okay um and over over 10 years but i'm not

receiving disability it's been it's been very hard And this last time, I haven't even filed the appeal. I just was in a state of depression. So what has your income been for the last 10 years? Where is it coming from? Well, it was coming from child support for the most part. But now my daughter is an adult. So where do you get money now? Well, now I have a part-time job that makes things even worse.

So that's what I have. But my daughter has her income now. And so, I mean, it's still very low because she only works part-time as well. Both of you working part-time, both of you living in the house, and you can't make the mortgage payment. No, we can make it now. But what actually stopped me from making it, I ended up being sued by my homeowners association, which that totally just wrecked everything. I had to pay them $6,000. And that's what really caused me to get behind.

Has the HOA payments been resolved? Did you pay that? Yeah, that's over and done with. And I'm going to have to figure out some way to get that back yeah that's that's that's over and done with and i'm gonna have to figure out some way to get that back because that's a whole other uh story i have been on a payment plan with them since i even before i stopped working but we have different people in charge of that and let me just there's a few pieces here we're gonna walk you through it yeah i don't think that um have you ever attempted to sell this house here's here's i'm gonna give

you my 50 000 foot view this is a home that you can't afford this has been nothing this has been a burden on burden on burden um i don't want you to foreclose but i want to know is there a way have you attempted to sell the house at any point to go hey i can't afford this piece of property i got to get out of it have you tried that, and there's a reason for that. And like I was saying, I have no problem with doing that now going forward. But I've been affected by these hurricanes. What does that mean? When you say you've been affected, tell us what that means. Was the house damaged? I have property. Yes. And I have property damage, not just from the hurricane I just told you about, from the Texas freeze a

couple of years ago when we were out of power. But the issue is the insurance companies. I don't know if you know what's going on with Texas insurance companies. I don't. Even before that freeze, we had insurance companies that were just not doing what they were supposed to do. Are they denying your claims? No, they didn't do that my insurance company um gave me eighteen hundred dollars i probably had i don't know i'm just gonna say thirty thousand dollars worth of damage and then we hit a wall and then they pulled out the state of texas and filed for bankruptcy okay so you have a bunch of work that needs to be done on your home that insurance wouldn't pay for what type of work is it?

Is it something that no one would buy the home in this condition? Is that what we're talking about? Is your roof half gone or is it more cosmetic? No, I think people would buy the house. But my thing is, I don't know how much value that I have lost. Okay, so what? So that I may not have the equity that I thought I had. It's like right at $100,000.

And you're saying you don't know you could sell it for $100,000? No, no, that's not what I'm saying. I probably can't sell it for that. My situation, I'm 60 years old. My situation is I would not, if I can, I would prefer not to sell a house that I paid for for 22 years and have nothing. Yes, I understand. It's frustrating because you didn't build the equity you wanted to, but this is not, you can't have the sunk cost fallacy. You're in a bind where you're going to either sell this home or it's going to be sold for you at auction in a foreclosure.

You need to figure out, you need to get an appraiser in there, figure out what the house is worth. I'd be talking with the bank and asking them, listen, I know I'm behind. At this point, I don't know how many payments you are behind. I know they tried to do a modification. It's on hold now. I think the fact right now that it's on hold is a blessing for you to go in one more time and say, can we just sell the property? If it's at a loss, maybe you ask for a short sale, figure out a way to go in there and don't let this be a foreclosure. I think that that's going to be even more painful. It needs to be on your terms, which means you tell the lender, hey, sit tight. I'm going to sell this house and we're going to make sure that I'm ahead and we're going to get this thing done. And so I would get in touch with a real estate pro. You can

get in touch with one at ramsaysolutions.com slash trusted event and have them figure out the comps and what the house is worth. Let them do that homework for you because you got a lot going on. You need to get to some financial stability right now and build a new financial foundation. And that means we're getting out of this house. Yeah, I think you've been hit after hit, whether it was the freeze and then the hurricane and then you're missing payments. And I realize that you've been in this house for a lot of years, but this is not a place of peace anymore. And your home should be a place that you walk in and you feel peace. And we want that for you. We want you in a place that you can afford and we want you to get the help that you need. I don't want you to be a violinist on the

Titanic going down with the ship. You can definitely avoid all of this and sell and move on with your life and get a fresh start. That's our hope for you. So get in touch with an agent and have them start to do the homework. You get in touch with the lender, figure out what it's going to take to allow this process to happen. This is The Ramsey Show. Hey folks, there's a lot of half-baked investing advice out there, but here's what you can do to get more confident about this stuff. Check out the SmartVestor program. SmartVestor connects you with local financial advisors who have the heart of a teacher. They'll help you level up your knowledge and build a retirement plan based on your goals, not theirs. Go to ramseysolutions.com

slash SmartVestor to get connected and get more confident about your plan. That's ramseysolutions.com slash SmartVvestor. Ramsey Solutions is a paid, non-client promoter of participating pros. Learn more at ramseysolutions.com slash smartvestor. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Today's question of the day is brought to you by WhyRefi. Now, we don't recommend refinancing on everything, but for distressed private student loans, there's WhyRefi. Now, we don't recommend refinancing on everything, but for distressed private student loans, there's Y-Refi. We trust them because they help you with a low fixed interest rate you couldn't get anywhere else to help you stick to your budget and get out of debt. If you want

to learn more, go to Y-Refi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey. Might not be available in all states. All right. Today's question comes from Kyle in Minnesota. He says, my wife and I earn $230,000 a year. This income is fairly new as my wife just went back into the workforce. We have a five month old daughter who my mother-in-law watches while we work. As predicted, my mother-in-law is now requesting we pay her to watch our daughter. Now, prior to making this arrangement, she agreed that we wouldn't have to pay her because we're trying to pay off debt. I understand we are not entitled to free child care, but with $75,000 in student loans to pay

off, we don't have this in our budget. It would be more cost effective for my wife to quit working than to pay for child care. They, talking about the mother-in-law make 300 000 a year and have no debt other than their house so they don't need the money from us how do we respond to their requests to be paid for watching their grandchild let me tell you something the animosity is hot it's popping i feel it um here's the thing you knew this was coming because you said as predicted so there's something about your mother-in-law's character that you kind of knew this was coming. And I'm not saying she's a bad lady, but he obviously knew something might come up, come out of the woodwork here.

Now, here's the thing. I'm going to call you out first and then I'm going to be on your side. First, I'm going to call you out because they make $300,000. It's none of your, you know, they can spend their money how they want to spend their money. They can decide if they want to be compensated for their time. Don't add those other little statements in there because that just makes you a little bit like, like snap, snappy, right? Like I can understand you're mad, but if you bring it up to them, the second you start

saying, well, you don't even need this money. You make $300,000. I'm like, that's, that's the moment the conversation goes just into terror town um here's the thing you said that your wife and you make two hundred thirty thousand you said the white the income is fairly new i mean i you're in minnesota i can tell you for us for one child in daycare it's thirteen hundred a month that's expensive so if your wife is making more than thirteen hundred a month then yeah it's it's worth it you're paying off debt even if it's you know even if she's making 2000 and you're only pocketing the 700 after taxes like yeah keep doing this um i will say if this is going to cause a lot of

animosity and issue with the mother-in-law cut her loose and say hey we can't afford to pay you we're trying to get out of debt and you can can say, you know, I thought this was the agreement, but if it's not, that's fine. We'll just put, you know, baby in daycare and just do it as gently as possible. Don't really try to hold them to it because, you know. This doesn't seem like it's worth burning the entire relationship over. I think there was some expectations. Expectations changed on her part. Maybe she realized, oh my goodness, full-time childcare is kind of like work. It's a lot. And I'm not the mom. And so I'm not mad at her for saying that I feel like I should be paid something. And so maybe you figure out what that number is. It's not said here what that number is.

Is it less than it would be to put her in daycare? Is it less than getting a private nanny? I think 100% it's less than a private nanny, whatever she's asking for. It's probably not 60 grand a year. And so I would figure out what makes sense, but I would not continue down this awkward trail. Yeah, I wouldn't either. I gotta believe that grandma's not gonna charge 1300 a month,

but you, Kyle, are right in feeling frustrated that she said, yes, I'll do it for free and then is singing a different tune now here's the thing here's what we don't know we don't know how long this arrangement has been going on and we don't know I mean at least five months at the very least um and we don't know how long she agreed to do it without money like there's a lot here but I think George to your point probably what happened is it's like fun for grandma to hang out with, you know, little Betty or whoever it is for a couple of hours every day. But then when you stretch that to eight hours per day, and then it's like, oh, and can you start browning the meat for dinner?

And oh, would you mind that load of laundry in the closet, you know, in the laundry? It's a lot. It's a lot when you're staying home with a child. And I could understand how grandma might be like, yeah, you know. And here's the other thing I've issued. Kyle said, we don't have that in our budget. You make $230,000 a year. If grandma wasn't around, like we don't have family in the same state as us. So it's not an option. So don't tell me it's not in the budget. Just tell me it's going to slow down my debt snowball, which is frustrating because we made all this progress. We have all this new income and now it's going to slow it down by X number of months. That's right. Just put that on paper and grieve it and go, we could have been debt free four months faster, but babies change

things and that's okay. Sometimes I'm going to throw a perspective shifter right here. I'm going to do this real quick. Let me throw it back to this i'm training for a race i'm training to run a marathon whoa and it's some mornings i wake up and i'm like oh i gotta run and i'm so like irritated that i have to run but then i remember it's a blessing to be able to move your body and run there are people who cannot run same thing with children we can be like oh i have to pay for child care child care is the worst it's a blessing to have a child and there was a day that you wished and prayed yes for a george and now you have it don't complain about the child care i know it's expensive i know it wasn't in the

budget i know you're trying to do baby step two but get back that perspective and go it's a blessing to have this child one of the things that go with children is childcare. And I'm just going to chalk it up to the experience. This is part of life. It's temporary because once they hit kindergarten, let me tell you something, George, ding, ding, that money goes back in the pocket. You just got a raise. Hey, I get a raise next year. It's a blessing to have family that you even trust to watch your child for free or for money. Yes. So there's a lot of blessings in here, Kyle. I think you should count them before you start burning bridges, my friend.

Yep. There we go. All right. Dan is up next in Rochester, New York. What's going on, Dan? Are you with us? Hey, how's it going? Good.

How are you? I'm here. Good. So my question is about my student loan payments. Okay. So I just graduated college in May, and I just got a job, um, starting in two weeks and it pays $95,000 a year. Um, and, uh, I have about 19,000 in loans. Um, so I'm living at home right now with my mom and I'm wondering if the loans are so urgent that it would be a bad idea

to get an apartment with two of my friends as roommates. We're thinking $600 to $800 a month for each of us in rent. I would do it. Now, this might be a hot take. Jade may have a different take. I would move out

and start your adult life. I think there's something about having your own bills and feeling like you're actually an adult. And the rent is great, $600 to $800. It's reasonable. And will it slow down your debt slightly

because you're not living at home rent-free? That's fine. I'm okay with that because you're going to hit this so aggressively and you treat it differently when it's Dan's money, Dan's bills, Dan's debt versus, well, I kind of have a nice safety net here. I can get comfortable.

I can still live. So I'd move out. I would too. And I'm kind of have a nice safety net here. I can get comfortable. I can still live. So I'd move out. I would too. And I tell you that as a guy who moved out at 20 years old and flew the coop across the country. And I think that helped with my growth as an adult. Yeah, I agree. I do it. Six to $800 in rent is great. Student loans. I hate debt, but it's not astronomical. Right. How quickly are you going to pay off $19,000 and make $95,000 if you keep living like a broke college kid? I'm not sure. That was another thing I was curious about is how urgently should I pay off.

I haven't picked a payment plan yet. I have about $6,000 saved. Great. So you could throw $5,000 today and knock that down to $ that down to 14 it's going to be paid off this year no matter how you slice it it's going to be paid off in the next 12 months right okay you make 95 yeah once you do what george said it's going to be knocked down to 13 or 14 i'm sorry and you know 14 000 out of 95 that's that's nothing for my guess is you'll be taking home five or six thousand a month yeah and so if you go all right my expenses i'm going to try to keep

all of my living expenses down to you know 1200 bucks a month well that leaves a whole lot to throw a debt what if you could throw four grand at the debt for four months straight that looks like 16 grand paid in four months you're're done. You'd be done by Christmas. Out of sight, never to be seen again. That would be my personal goal, Dan, for you is four months. You're done by Christmas. By New Year's Eve, you are celebrating with your buds. You are debt free and you make $95,000 with the rest of your life ahead of you. You're going to be so rich.

You're going to be so wealthy, Dan. Don't get tempted though. All your friends are going to be going out and Dan's going to say, Kate, can we stay in? I'm trying to pay off some debt. That's the temptation. That's good. But, man, you could do anything for four months. Yeah.

Dan is going to be rich. I like this. I like this plan, Dan. He's only 20 years old. Dan's the man with a plan. All right. We'll be back. This is The Ramsey Show.

If you own a small business and you like The Ramsey Show, then you're going to love the Entree Leadership Podcast. Almost 200,000 listeners tune in every Monday to hear me take calls from real business leaders and give tactical advice based on my 30 years of experience leading. This is not a podcast about business theory. It's real insight from a practitioner who actually does this stuff. Find it anywhere you listen to podcasts, or if you're listening on YouTube or Podcast Now, just click the link in the description. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. If you want to hear more from us, you can read our books.

Jade's got a great one called Money's Not a Math Problem, and I've got one called Breaking Free from Broke. You can find those in the Ramsey Solutions store at ramsesolutions.com. All right, Jade, we have a question that came from our Ramsey Network app. Okay. And if you want to ask a question for those listening without ever having to call in, you can click the link in the show notes, download the app for free. Once you're in the app, navigate to the Ramsey Show and click ask a question and you can submit it for the show

and maybe we'll address it live on air. Here's one from Angela. What's a tactful way to communicate clearly to people that you cannot partake in certain activities like eating out, vacations, gift giving, because you're broke and paying down debt. How do I say no in a respectful way? I'm not going. That's going to hurt feelings, Jade. I won't be there. It's hurting feelings.

No. It's not kind. Period. Is that not nice? I think at some point societally, we decided no was rude. I think it's from toddlers. Todd yell no it just feels rude i think we just i think as people sometimes we feel the need to give like these disclaimers i can't go because and i'm like you're grown when you're grown i feel like when you hit 30 say can't make it y'all have fun once you hit 30 you

don't have to tell anybody anything and then once you hit 40 you definitely don't have to tell anybody anything especially and let me add if you have kids you definitely don't have to tell anybody anything and then once you hit 40 you definitely don't have to tell anybody anything especially and let me add if you have kids you definitely don't have to tell anybody anything of what you just feel like listen i'm not gonna be able to make it yeah done and if they're a real friend then you can tell them what's going on say hey i'm trying and they'll understand like oh totally yeah if it's a real friend and if it's not a real friend then they're just being nosy when they ask they go tell me more well there are sometimes there are like those like trolly people who you're like i can't go i'm trying to pay off your my debt or like i didn't budget for it and they're like budget pay off your debt like those people oh yeah those are the ones that you gotta be careful of they hold their nose high

when you say dave ramsay oh doesn't he want you to live on like rice and beans yeah and they kind of get kind of funky about what you're trying to do. So I do think you do have to be careful about, you know, make sure you're telling people that you know will support you. But honestly, I know I was kind of being funny before, but I really think that you don't owe a lot of people explanations.

I think you can go, listen, I'm not going to be able to go this time. You know, period. That's it. It's that simple. It's not a priority. It's not on the budget. I can't make it. You can say whatever you'd like. Just it it's that simple it's not a priority it's not on the budget i can't make it you can say whatever you'd like just say it firmly and kindly and move on you could even say i wish i could go but i'm not going to be able to make it the wish i could is nice that

really makes them feel good about it yeah you don't want to say i didn't want to go anyway but i'm telling you saying no is one of the only ways to success because if you say yes to everything you're going to be going a million miles an hour in all kinds of directions. Yeah. So I think successful people who hit their goals, who have great quality lives, have to say no to a lot of things. Yeah.

Everything can't be a priority. And, you know, I don't know about you, but have you ever been in one of those group texts where it's like everybody's doing something and you're like, man, I'm going to be the only one that says no. And then that first person says no. And you're like, yes, now'm going to be the only one that says no. And then that first person says no. And you're like, yes, now I can say no. And I am that people pleaser. I'm a recovering people pleaser.

That's my personality to be very agreeable. Want to make everyone happy. Don't want to ruffle any feathers. So I had to get good at this when I was getting out of debt. Yeah. Now with your family, you know, she doesn't say family, but I think the hardest time to say no is around Christmas time when the family has an expectation oh you but you guys always come east for the holidays right and it's like we're not

going this year matter of fact and I'm not trying to weasel this in but in the goal planner the Ramsey goal planner which just went on sale today I talk about that exact thing in the goal planner I talk about how to say and set expectations with family members when you're getting out of debt around the holidays. So if you're looking for that, check out my goal planner. That's a good one. Yeah. Thanks for the question. All right, Beth joins us up next in Grand Rapids. What's going on, Beth? Hi, thanks for taking my call. Sure. I have a question about term life insurance. I know that it's the best thing to buy, you know, to steer clear of whole life, but I ran into a situation. It was actually a couple of years ago and I keep

meaning to, well, I've been trying to find the answer and no one seems to be able to give me a good answer. So I thought I'd call you guys and find out what you know about this. When we bought term insurance, I don't know, 15 years ago or so, I did it online through, I don't know if it was select quote or master quote, but something that you could, you know, look at different plans from different companies and get the best one. That's how we did it. Okay. Then a few years ago, I went to a financial planning seminar. It wasn't just a one night thing. It was like a little mini class that was taught by a financial planner. And one of the reasons I went was just to see what kind of information he would give me because I know quite a bit about financial planning. I was kind of brought up on Dave Ramsey before Dave Ramsey was Dave Ramsey.

But this guy, okay, so I raised, he's talking about life insurance. And so I raised my hand. I said, oh, this is what we did. You know, you can get it online and pretty good deals. And I could tell immediately that I was not to have said that because he just like immediately like look panic and be like, oh no, no, no, that's not good life insurance. That's just horrible. Is it because he wanted you guys to buy it through him? Yeah, you took money out of his pocket. Of course he's going to be all in a tizzy. That was the thing.

Yes. You put the kibosh on his whole thing. He wanted to be able to sell it. And you said, oh, why would you do that when you can go online and you can compare all the rates and get it yourself? Exactly. But that started getting me thinking, like, is he right? You know, because then he came up to me later and said, oh, you just need to sit down with me. Oh, my goodness, Beth.

This guy's an aggressive, sleazy, pushy salesman. I know. And I guarantee you he was selling whole life insurance. Maybe. Honestly, I don't know. Because the rest of the stuff he was saying seemed pretty on the mark. He did say term was the smart thing to do, not whole life. That's true.

But what was the whole purpose of the – there's always a sell. He wasn't just bringing you there to tell you great things. There was a sell at the end. He doesn't work for free. Yeah. So what's your big question? Are you just wondering if you were? Was he right?

No. Is there a difference between, to me, I always thought term insurance is term insurance. It doesn't matter. Term insurance is term insurance. And there's a lot of companies that sell it. And so we always suggest a place like Xander who's going to go and make sure they get you the best deal with the top rated with the top rated because it's a lot of work to go through and sift through all that nobody has time to do that so if you go with a company like zander yeah they're doing all of the hard work for you and so that's what you

essentially said was yeah you don't you there's a whole bunch of people to choose from you can go on the internet and choose the one that's best for you. And he didn't like that because he wanted people to think that this is the only place you can get whatever it was that he was selling. And so he was trolling for business. That's absolutely, he was trolling. And that's fine. If he wants to drum it up and offer you a free dinner, that's fine. But to tell you that it's unwise to get term life online is just stupidity. Yeah. He should know better. Yeah. Okay. That was my gut feeling. But like I said, I looked this stuff up online. I can't find a straight answer. You got one right here. I can't find a straight answer. That's what I figured. I got no reason to lie to you. You can get it how you want. We trust the

folks at Zander for term life. And again, they shop at top companies. My family's covered through Zander, Jade's is. And on one end, term life is term life. You want shop at top companies that's my family's covered through zander jades is and you know at and on one end term life is term life you want the company to be highly rated pay out if something does happen but it's insurance exactly you know i'm not looking for the best restaurant in town here uh you just want the best coverage at the best rate so do you guys have that right now um actually we're kind of of at the end of our policies, and I'm actually debating on whether it's a smart idea to re-up or not. Our kids are now out of the house.

Are you self-insured? If something happens to one of you, would you guys be okay? Well, okay. We have no debt. Our house is paid off. What's your house worth? Well, we bought it for $215,000. Our neighbors just bought a house behind us for $500,000.

In this market, the way things have changed, that could be... Beth, I'd be crunching the numbers. What's in our nest egg? Do we need to re-up? Do we need to get a smaller policy? And our friends at Zander can help you with that. So be sure to reach out to them if you need help with that. All right, Jade, the show is about to end if you're on YouTube or podcast,

but we've got more calls coming up in the Ramsey Network mobile app. So be sure to go download that. Finish the show. Get full episodes. And if you're listening on radio, just stay where you are. The show will go on. So there's two ways to get the app. You can click the link in the show. Full episodes. And if you're listening on radio, just stay where you are. The show will go on. So there's two ways to get the app. You can click the link in the show notes or just search Ramsey Network in the app store

or Google Play. And for those of you who submitted feedback, we heard you. We are working on it. The team is working to make this app better every single day. We are just getting started. So don't miss what's coming up next. Go watch the full show in the app for free. Who knows what Jade's going to say?

We just don't know. I can see the calls on the board, and they're juicy. Y'all got to get to the app and finish it. All right, Jade. That was a fun hour. This has been The Ramsey Show. Big thanks to all the guys and gals in the studio, our audience live and listening. We love you guys.

Thank you so much. We'll be back before you know it. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show.

Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.