The Ramsey Show - Debt Does Not Add Peace to Your Life

Episode Date: June 10, 2024

💵 Sign-up for EveryDollar today - The simplest way to budget for your life! George Kamel & Jade Warshaw answer your questions and discuss: Why you should wait until after marriage to pay on each other's debt, Paying for higher education, "Do I really need health insurance?" Trading better pay for no growth opportunity "My mom wants me to go back to college, should I" Support Our Sponsors: Churchill Mortgage Zander Insurance Health Trust Financial BetterHelp Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 🏠 Find a Ramsey Trusted Real Estate Agent 🚢 The Live Like No One Else Cruise is booking fast!  ☂️ Get the right insurance without breaking the bank. 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

From Ramsey Network, this is 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 the incomparable Jade Warshaw. That's right, best-selling author of Money's Not a Math Problem. And we're going to be taking your calls today about your money and your life, and it could get messy, and we're going to give you some advice you may not like. But at the end of the day, here's what we want. We want to see you win. We want to see you have more peace in your life.

We want to see you build more wealth than anyone has ever built in your family to break generational curses, to finally just go to bed and sleep and not be worried about what's going to happen tomorrow with the bills and how we're going to accomplish that financial goal. We want to show you a proven path to get there. So give us a call at 888-825-5225 and we will do just that. Alex kicks us off in Dallas, Texas. Sorry, Alex, what's going on with you? Not much, sir. How are you doing? I got choked up already. I'm very emotional today, so we've got to watch out.

How can we help? All right. So in a nutshell, I bought a home last year for me and my daughter, and then I met someone, and I am looking at getting engaged, and she is talking about wanting to put $40,000 down to help pay off the home faster. She's the one that pointed me towards financial peace and all that. But my line of thinking is this is my debt and my mess to clean up, and I just wanted an outside opinion on if I should let her do this or not.

So are you guys engaged yet? I plan on popping the question here probably within the next month or so okay well hopefully she's not listening or else she just got a spoiler um in this yeah go ahead jade so just to clarify you have the home the first home was with your daughter i have a four-year-old daughter okay Okay, got you. Okay. So how much do you owe entirely on the house? Just over $138,000. And so her putting the $40,000 down, is that just her to be like, this is going to be ours together?

Like, what's her motivation behind that? Just to help pay off the debt? Just to help pay off the debt? Just to help pay off the debt. We also talked about possibly refinancing to add on. But then the $40,000 is what she has been saving up for a long time now to buy her first home. So what would happen if after you guys got married, you guys decided how that $40,000 was best spent, whether it's to put it towards a mortgage or some other thing that, you know, you might need to... A renovation. Yeah. How's that hit you? My line of thinking line of thinking is it's a it's a three bedroom house.

We've had the discussion about possibly having more kids. And if that happens, the house I'm in now is not is not big enough for that. This feels like a very future decision because this doesn't have to be your forever home together either. She could move in. So let me play out how I, if I was advising you guys kneecap to kneecap, I'd say, Hey, let's wait until we have the document from the courthouse. We come back from the honeymoon. We combine the bank accounts. Now let's talk about what to do with our money. So that I don't think anything needs to happen right now. I agree until you guys are officially married. We don't need to combine any of our finances, any of our savings. Once she's there and she's your wife, then we can say, all right, we want to stay in this house. Let's pay down the mortgage down to zero.

We can roll all that equity into our new home down the line a few years from now. Once we actually run out of room because we actually have the kid there, that's when that decision should be made. Okay. So I don't't know i don't know the urgency of her like throwing all her savings at a house she doesn't own because i'll tell you i hope and i think it's all going to work out perfectly but the calls we take on the show is when everything didn't work out perfectly and now it's an ex-fiancee who has forty thousand dollars stuck inside of the equity of your home and now there's a big legal battle. And so it is very unwise to mix finances before you're married,

before you have legal protections, before you've really combined your life. She had just brought it up of, you know, after we were married, that's what she wanted to do, and I just kind of hit the panic button, I guess. Well, after we get married is a great sentence. That changes everything. Yes. And so you can start to make plans. Just don't make any actual moves until you're back from that honeymoon.

But I hope it works out, and congratulations to you. That's exciting. That is exciting. Nothing's on fire. A man on the cusp of proposing. Oh, yeah. Hopefully she didn't hear this. Well, I think she knows it's coming, it sounds like.

It isn't going to be no surprise to her. The names were changed to protect the innocent. All right, Doug is in Atlanta, Georgia, up next. What's going on, Doug? Hey, guys. Really appreciate what you all do. I am starting medical school in August, and I've never been in debt in my life. And I looked into different types of loans that I could get to pay for this. And it seems like the

smartest decision would go for the federally unsubsidized loans. But it seems with the interest rates, it's going to be quite a bit of money taking out. And I've listened to y'all show for a long time. And the idea of going in debt for the first time is really scary. And essentially, the total amount of costs or cost of tuition plus cost of living, I can take out a $73,000 tuition is around 44. And the way the loan situation is structured, it's two separate loans. You can take out for the first cost of the tuition and the second cost up to $73,000 for a total amount of 73. Um, I have some funds saved up, but I'm not really sure how to go about this. What do you have saved up?

So I have about $30,000 in cash and another $30,000, and it's in a high-yield savings account, yielding about 5%. What a life. And the other amount is in investments, but it's not a retirement fund. How much is in the investments that's not a retirement fund. How much is in the investments? That's not retirement. About $30,000 as well. So you got $90,000 just laying around? No, no, no. It's about $60,000. Okay, $60,000 laying around. Okay, there's your answer, my guy. We're not going to tell you the best debt to take out because we don't think that there's

a scenario when it is best to take out debt. That's like saying, what is the best Nickelback CD? I don't know that I can tell you honestly. No, I totally hear you. I just, the looking long term for, I'm just kind of scared to completely liquidate all that. Well, yeah, that's my question for you. You called with a question for us. My question for you is, why is it more appetizing for you to take out debt rather than just pay cash and be done and done with this? I mean, it totally makes sense.

But the situation is that the tuition for medical school, that's yearly. So it's $43 a year. Okay. And then living and things like that so it's over four years of medical school and i won't be even making any type of income until residency which will be essentially five years from now but the good news is you have the better part of that for two years i mean you've got you can cover you could cash flow the half of this is what we're saying with the money you have so can you come up with another 13 or 15,000 within a year's time?

I think that you could, and then get ahead on the next year prior to that. And if you have to take a semester break in order to make this happen, the point is don't go into debt when you've got time and you've got money, which are two really good resources to have here. And you have any help from family? Not really. That's kind of at this point

is like everything is on my own. Man, that's real tough. If I'm you before this semester starts and even if you can put it off a semester, I'm stacking up as much cash as I can because if you can come up with a little bit more cash to make this work,

you're going to be able to cash flow this whole thing, which I think you can. Thanks for the call, Doug. 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.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. Well, if you're looking for something fun to do in less than a year from now,

check out the Live Like No One Else Cruise. Okay, that was really good. I legit was like, we got sound effects? Every time. Joe in the booth hitting the sound effect button? Nope, that was just old Jade. That was pretty good. If you weren't aware of what that was, that's the ship horn.

I don't know what it's called. Yeah, the ship's horn. Let's go with that. I feel like someone out there is just glazed over and I'm going, this guy with his ship horn. It's going to be Dave, all of the Ramsey personalities, seven days at sea for the ultimate debt-free celebration, March 22nd through the 29th.

And on top of our whole crew being there, we've got special guests. We've got Stephen Curtis Chapman, Manit Chauhan from the Food Network, Dina Carter. We got comedians, magicians, you name it. There's so much entertainment on this cruise on top of, you know, hopefully some transformational,

life-changing content from us personalities. George, I want to hear you do a set, a comedic set. Oh, Jade, that's called a tease in the biz. I'm working on it biz i'm working on it because i got a captive audience who can't leave i thought this is the time to try out this is the listen you and a speedo is not enough we need to hear the comedy george yeah that's not funny that would just send people to get refunds so we won't you won't be seeing that but we

we'll be uh seeing some sites turks and, St. Thomas, Puerto Rico, the Bahamas it's going to be a good time and again this is for those who are debt-free meaning baby step four or above so if you're in debt I wish you could join us but please don't because you got priorities right now this is for those who they're out of debt they've been waiting to celebrate you want to meet you know other Ramsey fans and the whole crew we're going to do I think the Guinness Book of World Records largest debt-free scream on the ship. Let's do it. I'm here for it. So VIP upgrades already sold out. Most of the suites are sold out. In fact, many of the cabin types are completely sold out. So if you're trying to pick a cabin like one with an

ocean view, you got to get your deposit in right now. This thing's going to sell out real soon. Book your cabin at ramseysolutions.com slash cruise, and we'll see you in March of 2025. Can't wait. All right. Charlie is in Everett, Washington. Charlie, welcome to the Ramsey Show. Hey, I really appreciate you guys taking my call. How are you guys doing? We're doing great, man. How can we help? Well, I'm trying to get it directly to the point. I am drowning. Um, paycheck to paycheck is a nice way of putting it. Um, I own a home. Um, my biggest, I guess, mistake is an auto loan. Um, I'm about 20,000 upside down on it. How'd that happen? Well, I purchased the vehicle, uh, about three years ago when I was

making significantly more money. Um, a recent, um, a recent and abrupt breakup with who I bought my house with, um, had me cause I drive truck and I did drive, uh, uh, long haul over the road. And when the breakup happened, I switched driving positions to a local job. And so I'm making roughly, I'd say conservatively, about $4,500 a month. $4,500 a month. Okay. That's your take-home pay? That's take-home after taxes, yes. Okay.

What other debt do you have? So you've got this car, you're $20,000 upside down on, and what do you owe on it, by the way? $52,000. Yikes. Yeah. And you're saying it's worth $32,000? Yeah, roughly. And so I've tried to sell it for about a month and a half, close to two months,

maybe. And there's just, I mean, I can't blame anybody, but there's, you know, it's not going anywhere. At what price point? What were you selling it for? Well, at first I put it up, you know, basically kind of like a takeover payment. This is what's owed. And then I put a couple grand aside in hopes that I could maybe like pay the difference, and that didn't go anywhere. And so, like, I don't know if I should just do a voluntary repo on the thing. No, no, no, no.

No. We'll walk you through some options. Let's get through the rest of your debt. What else do you have? Okay. Well, I got $230,000 left on my house, $53,000 on the truck, one $12,000 credit card, a $3,000 credit card, and I got my lowest one, trying to do the snowball,

I got my lowest one down to about $600 now. Okay, good. And that's all the debt. All right. So if we knock out the credit cards, all that's left is fixing this car problem. Now we just have our mortgage to deal with. Correct. All right.

And so with the truck payment, my mortgage is just under two grand it's 1828 and the truck payment is 979 and so that mortgage is eating your lunch a little bit right now when it comes to your take-home pay don't you think it is and so um and where I live, I looked around. Luckily, me and the ex are on good terms as far as the house goes. She moved out. There was no, you know, I don't know really how to put it. Her name wasn't on the deed or the mortgage? She didn't have any equity in this thing?

She does. mortgage she didn't have any equity in this thing uh she does um she's not on the how the mortgage company explained it is i'm the primary but she is on the mortgage okay so what happens if you stop paying they go after her no no no she she moved out and that was part of my i don't know if it was maybe an ego thing but it was you, you know, in the heat of, you know, because like I mentioned, the split was not mutual, and it was very abrupt. And out of emotion and maybe ego, I said, okay, well, you want to do this? I don't. I'm not losing my house.

So did you refinance? Or did you get her name off the loan? We are in the process of working those details out but that is the end goal of getting her off the house okay and so um but with the credit cards one of my the higher credit card that's kind of eaten up my trying to do just the minimum payments which on the on the one it it's like $600 a month. What were you making before as a trucker? Yeah, you mentioned you changed your trucking schedule to where now you're making less.

So you're making less doing local. What were you making before? I was making about $120. How can we go back to that? um well currently um i i got a kiddo and animals at home and so doing going back to what i was doing is kind of out of the question for another couple years anyway is the kiddo new um no no no she'll be she'll be 18 in about a year and a half. So again, how does that change from before? Because you had the kid and the pets before. We're just trying to understand what made you make that shift and why you wouldn't go back to it temporarily to clean up this mess. Well, the reason I was able to be gone on the road was because the ex was at home and so when she left

I all the because when I was on the road it was you know payday hit I sent her the money and the bills were paid when does your 18 year old go off to college or kind of do their own thing um she's thinking about it she doesn't know if she's going to go to do college or not. And you feel like you've got to be home with her? To a degree, just because a lot of her growing up, I was on the road. And so it's, I'm kind of, I feel like kind of a rock between a rock and a hard place. And I'm just kind of, I feel like I'm, you know, doing minimum payments.

Here's the deal. If you're going to, if this is between a rock and a hard place and you're saying, well, there's going to be a voluntary repo, probably can't afford the mortgage long term. I'd rather you go to work now for a year and clean this mess up. Because here's the deal. You get out of this credit card debt and we get out the underwater piece on the car car now we can breathe again but you need to be making eight grand a month instead of four grand a month in order to make this work okay because to your point even cleaning up these credit cards is going to free up 600 bucks a month i mean what that's going to change the equation big time and with your numbers to have an extra 600600 a month to put towards this upside down car payment.

So if I'm you, I understand what you're saying. Kids, you know, obligations with pets, pets, I could care less about in this situation. But with your daughter, maybe it's you having a sit down conversation with her and saying, listen, I know I haven't been there. I have made a mess of things and I'm getting about the business of cleaning that up. And part of that is me cleaning up my financial life so I can be there for you. That's a different kind of sacrifice, but it's the one that'll stick with her, seeing her dad get out of a mess and just own up to the mistakes and go, I want to have a different legacy for your future. Maybe you help her cashflow college, but you got to have money to do that. This is The Ramsey Show.

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Give us a ring. We'll try to help you figure out what the next step is for your life and your money, regardless of where you stand and how long you've been listening. That's what we do on this show. Ashton is in Oklahoma City up next. What's going on, Ashton? So we've got kind of a weird and unique situation. I like that.

In 2018, we went to Financial Peace University. We moved out of our rent house. We moved into a super small apartment, and we went hard, and we saved up enough money that we were able to get completely out of debt. And we were able to start saving money to buy a house, which we did in 2020. And everything was great right up until I got sick. Oh, how sick? I've had really sick.

I started having a whole lot of neurological issues in the last four years. I've had three brain surgeries and I need another one. Yeah, that's beyond sick. I'm so sorry, Ashton. It's okay. I'm just glad they know what's wrong with me at this point because it took them a really long time to get here. But in the meantime, I was no longer working. My husband had to quit his job because he couldn't get me to and from all these doctor's appointments and help me take care of the kids. And that put us kind of in a situation. Three. Three kids. Okay. So you're in the house, three kids, you've had these medical issues. Where are you guys financially after the storm?

Okay. So let's hold right before we get to that so when he quit his job we opened up a company and we ran that company we stayed positive the whole time it was great we were able to replace his income and we did really good just him running solo on his own what year was that? That was in 2021. Okay. No, no, I'm sorry, 2022. Okay. In 2023, another small company approached us and asked us if we would buy them out. I was like, yeah, we don't have the money for that. And they were like, well, what if we didn't own our finance? What if we carried it and you just pay the profits just?

I knew the company was super profitable because I had seen them around and I felt really comfortable with that so we purchased that company from them on an owner finance on the contingency that I do not have a minimum monthly payment I only pay them 60 percent of whatever the profits are and then we retain 40. And how long would that take before you've paid the full price roughly we estimated that it was going to be around 18 months the industry because of the economy has kind of tapered down a little bit so i'm thinking we're going to be closer to about the 24 month mark okay now um i don't think it'll take us very long. It's also profitable. So in all of this, okay, all of this that's going on of learning how to run a business and trying to deal with everything, the surgery that I need is really, it's new to medicine. It's more popular in Europe than it is in America.

And last, in April April we actually had to fly to Spain to meet with a doctor who actually is leading the research on this condition. Okay. And there's a very good possibility that they're not going to be able to do the surgery here. While we do have health insurance we do not we can't use it out of country and that's kind of problematic. What would it cost? About $50,000. Ooh, yay, yay. Okay.

And do you have any money saved? We've got a little bit. I'd say we've probably got about $5,000 in savings right now. Okay. And no debt? I have about $1,500 in credit cards, but to be honest with you, the credit cards are what we use for the business, just so I don't have to have people have a debit card, and I can track their expenses a lot better. We have two employees, and each employee has a credit card.

We run a $300 million company with company debit cards. Just saying. It just makes me nervous. It makes me nervous because y'all are racking up debt and your health is on the line i'm just saying debt is not adding any peace to your equation right now so can you tell us the urgency sorry i'm just trying to i want to make sure we spend plenty of time with you so you need to to have the surgery. Can you explain to us the urgency of the surgery? Is it like, hey, I got to have this thing instantly or else my health... I'm going to go blind. Okay. How soon? I've got like less than a year. Less than a year. Okay. So the surgery

needs to happen within the next 12 months. Yep. Okay. Does it get riskier the longer you wait or is it just kind of the same thing? It's more of a chance that there's right now they feel really comfortable if they did it right now that my vision would return. Okay. But if we don't know in the future if this will continue and if when they do the surgery if I will get my vision back. Okay. Tell us about your assets. What type of vehicles do you have that you have paid off? I have one vehicle that's worth about $5,000 that we paid cash for that I own outright. We do have two car payments. We kind of got in a situation with one of the work trucks that we have to have a work truck and we couldn't afford to pay cash for one and the other one was it just wasn't financially

reasonable to repair at this point so it had just served those two have debt on them so they're not assets um anything else do you have that you could sell off because obviously place that we're at right now is the possibility of selling our house using the proceeds from equity in our house to buy an rv and live in an rv for a year or two and just kind of do what we do well i wouldn't do an rv i wouldn't do an rv but i mean your health is on the line few few things are more i don't think anything's more important than that. So it's a possibility for the house. Yeah, but just rent. So my only concern with renting, and that's kind of why I wanted to reach out to you, is that the rent prices are really more, even for like a two bedroom apartment. Yes, but an RV is going down in value and so you have

to calculate both costs you might say yes i'm spending x amount of dollars on rent but you're spending a lot more up front to buy something on debt that is going down in value when you do an rv so you're losing a heck of a lot more money you just don't feel it in the same way because you're accustomed to debt but trust me you're losing a lot more money five people in an rv i've worked at so we have about a hundred about a hundred hundred and twenty five thousand dollars in equity in our house okay we're to fall out i think that where you're at and you unless there's something that you haven't included with a fifty thousand dollar surgery coming up with no real assets other than your house,

you're against a rock and a hard place. And because you do have a lot of debt between these trucks and you've got some other things going on with the business, it could make sense for you to get your health in place. You guys rent temporarily. You get your financial footing back on. Because to what George said earlier, the amount of peace you're going to feel going into the situation, owing nobody nothing is priceless then you're getting the surgery that you need you're going to be able to have time to recover without just this feeling of we've got this business and we've got to do this and we've got to do that and we've got a mortgage that we've got to cover I think that for you guys having a fresh start with fresh health is going to be

a good move. Yeah, that's kind of where I'm at. What is your household income? You're living off 40% of the profits. What does that amount to a year? We take home about $70,000, and then I leave the rest in the business accounts. Okay, so you guys are making $70,000. You have to pay all these payments.

Here's what I would do if I was in your shoes. I'd sell the house. You have the equity, the $125,000. that for your surgery if that's where you guys are going to go next, right? Right. Pay cash for the surgery. That leaves you with 75 plus the five you have in savings. And that becomes your fully funded emergency fund as we get through the storm and then we rent. And then once things are back to normal, we own the business outright. We're back to getting 100% of the profits. Then we can look at buying a new home. Yeah. And then once things are back to normal, we own the business outright. We're back to getting 100% of the profits. Then we can look at buying a new home. Yeah.

And mind you, it's not going to just be $50,000 for the surgery because, I mean, you're going to Spain. And your husband's going to and he's staying somewhere. And there's flights and there's recovery and the trip back. So really make sure you price this out with that money from the sale of the house. That's an all-inclusive price. All in. Okay. Okay. Great. Great. Great. So I love to hear that. The health care over there is tremendously, tremendously cheaper. Okay. Well, I wouldn't do the RV move. I would rent, even though it hurts because right now you've been building all this equity and you're going

to trade that and quote, throw away rent. You're buying peace during a time where your life is chaotic. Yes, sir. And so I'm going to be thankful to pay rent to that landlord because I don't have to deal with all the problems. And I wish you the best in your health, truthfully, Ashton. I hope that this is all resolved and you call us back with a wonderful update. And I hope the financial part will figure itself out. 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?

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Health Trust Financial is your one-stop shop for unbiased advice about affordable health insurance options. They could save you hundreds of dollars a month, so make sure you're not overpaying. Go to healthtrustfinancial.com today. healthtrustfinancial.com. Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Here's a friendly reminder as we head into the summer to come visit us at the Ramsey Solutions headquarters just south of Nashville, Tennessee. So make us part of your road trips, your flights, if you want to make a trip to Nashville. And we'll feed you with cookies and give you a free mug, and you can enjoy the show on the glass here if that's what you're into. And lots of lovely people

out there visiting us today from all over the country. Wonderful folks. Great. Let's get to our question of today. Today's comes from Alyssa in New Hampshire. Yeah, she says, My fiance and I are getting married next year and plan to merge our finances. We agree on working together after the wedding date to be debt free. Love that. He will be coming into the marriage with student loans and a car loan. I am budgeting with every dollar and my debts should be paid off by the time we marry. His financial advisor is telling him to use the avalanche method to tackle his debt and has brought up other financial suggestions that are not in line with the ramsey method since our

finances are separate now it's fine but how do we compromise once we get married this is a great question so um first off avalanche method versus debt snowball for anybody listening with avalanche method you're listing by interest rate so you're considering the lowest interest rate and you're listing them that way and paying them off uh whereas the debt snowball we list them by balance we completely disregard the interest rate because we know that over time um honestly the difference is negligible and for most people um they get more of a psychological benefit when they're focusing on the smaller balance they get quick wins and there have been many studies that have shown that this is actually the best method. Harvard Business, Time Magazine, they all came out saying,

we agree with Dave Ramsey. This is actually the better, more, this method will get you to success more times than the avalanche method. So now we're getting into the nitty gritty. His financial advisor is telling him non-Ramsey things. And I think here's the thing. Here's what I want to clarify. When we tell people, wait until you're married to combine finances, that that, I think you should be very detailed and very as detailed as those conversations can be. Yes, we both care about paying off debt. Yes, here's what we're going to do exactly when we get married. So I kind of feel like the advisor's leading him astray. Yeah, I'm concerned about this financial advisor. I might consider firing him and finding someone else. But the fiance doesn't see that it's a problem. Yeah, this whole compromise once we get married, I think what it's going to be is, you know, your word versus his and what the better method is.

And, you know, we have a proven plan. Millions of people have followed it. It works. This guy is carrying debt for who knows how long. And the problem is a financial advisor like this would say, oh, don't worry about paying off your debt aggressively. You know what? You should be investing that money instead. So invest with me and I'll sell you these products. And I'm a big fan of having a financial advisor in your life. There's a time and place and there's a right way to do it. And we can help you find a trusted financial pro at ramsaysolutions.com. I don't know that now is the time for him to be working with a financial advisor. He needs to get his butt in gear and be working, getting that income up and paying off the debt. And the sooner he is to debt freedom by the time you're married, the faster you guys will excel in your own financial journey. So I'd go through Financial Peace University with him and

say, this is premarital counseling. If you want to marry me, this is part of the deal. We're going to go through this as a couple and you're going to watch every lesson with me and we're going to talk about it. Hopefully that gets him on the same page. But that's a big, I mean, that is part of the deal we're gonna go through this as a couple and you're gonna watch every lesson with me we're gonna talk about it hopefully that gets them on the same page but that's a big i mean that's one of the biggest life questions how do i get my spouse on board how do i get my fiancee on board it takes time if you want to be my lover that's all that's all i thought about when you said that spice girls that's usually what's happening in jade's mind if you're ever wondering nathan is up next in reno nevada's going on, Nathan? How can we help you today? Hey, Jordan, Jade, thanks for taking my call. I appreciate it.

So I left my job of about five years, like two months ago. What had happened is the management tree kind of kept changing. My boss's boss changed, and it just became kind of frustrating to work there. They wanted me to do things that I didn't excel at or didn't go to school for or wasn't qualified to do. So eventually this led to me leaving. It was just getting too frustrating. I moved to a new job where I work remotely and the money is better. Everything's kind of better on paper. I just really don't like this job at all. And it's been a super frustrating experience from basically week one.

What don't you like? The fact that it's remote? I don't like working remotely. I find it demotivating. My boss is not a strong leader at all. And because of that, we've been having, I guess, professional disagreements frequently. But it's not the nature of the work. Yeah, it's not. Well, it's a little bit the nature of the work too. So I am a programmer slash database professional. And they kind of sold me this dream on this job to say that, you know, we're very high tech, we're very fast moving. And I came into this job and I

realized very quickly what they meant by high tech and fast moving was a spreadsheet. And I feel like I've kind of checked all of my skills at the gate coming into this job. So you're bored? And so I'm bored, yes. Oh, man. Well, we can't stay here. What would light you up? Like if I snap my fingers, are you in an office and you're doing this,

you know, are you doing database administration? What's the sort of goal, if I could put your role on paper? Yeah. So what would light me up is, so I really liked the work I did at my last job, just not the management. I love working with databases and scripting data pipelines, things like that. And so that would make me very, very happy. And I don't, I don't see it. And you don't think that exists locally? Cause it sounds like you want to be in person, or at least have the flexibility to be in person. Yeah, it doesn't really, there's not a lot where I am. I know my location was listed as Reno. I'm actually in Elko, and it's a really small town. There's not a lot of options

here. What's keeping you there? What was that? What's keeping you there? I really like the town. Other than that, not much. No family? We have family here. We have family all around here. When you say we, are you married? Do you have a wife? Yes.

Yes, sorry. I have a wife and a child and another one on the way. Okay. What's your wife do? My wife is a stay-at-home mom. Okay. Well, we can't have the cake and eat it too. So we've got to decide, is this where we want to live? And if so, I've got to be okay with A, working remotely, doing the work that I love, or B, I'm going to have a commute getting to whatever locale has the

work that I want to do, right? Yes. So there's going to be some level of compromise in there. Either I've got a 45-minute commute, but I don't mind because I love it, or you know what, if I just had the right boss, I could do this remote work thing and fly out for the company yearly meeting, whatever. And so I think we need to start looking at other options. And my biggest worry for you, Nathan, is that you go with you. And so my worry is you go to the next job and you go, oh, my gosh, this one, the boss is this way and the work is this way.

And I'm just worried you're going to fall into the same trap. And so at some point, it's kind of like going to college. You kind of get what you put into it. And if you excel at every opportunity and you've got the right attitude about it and the work that, you know, management's not toxic, I think there's a lot of opportunity wherever you are to grow and excel. And so that's, I would do some homework and a little bit of soul searching as well to figure out what's next for you, but I would not quit until you had that next thing lined up. Okay. I don't want you going back to the old job there's reasons you left there and for those same

reasons you're probably not going to like it once you get there okay even if they would have you i don't know if they would plus a pay cut it sounds like uh yeah just a little bit so unless you were hired into a management role or something where you went hey i want to lead people it doesn't sound like that's you but you know you have to go and step up an opportunity not down is there any way and this is just me throwing this out there, is it a large enough company where there might be a move laterally where you could go into the database thing and maybe you're working with a different leader? Yes. Yes, there is. I explore that. And I don't know if your leader is the person you would go to for that based on your relationship. Hey, I don't really like working with you, but the other guy seems great. So, you know, be kind, you know, treat others the way you

want to be treated, but also don't settle. Nathan's life is precious and it's worth more than just staying at a job you hate. I'm going to send you Ken's new book, Find the Work You're Wired to Do, which has the Get Clear assessment. I hope that helps you, Nathan. So hang on the line, it will help you out. That puts this hour of The Ramsey Show in the books. Thank you to Jade Warshaw, my co-host, all the folks in the booth keeping the show afloat, including Kelly Daniels sitting in for James Childs, our producer. And you, America, will be back before you know it. From Ramsey Network, this is The Ramsey Show.

I'm George Camel, joined by Jade Warshaw. Open phones at 888-825-5225. You call in, and we will help you build wealth, do work that you love, and create amazing relationships. At least that's the goal. I can't promise that we'll accomplish all of that in a single hour, but it's a lofty goal, and we aim to please. We'll do our best. So give us a call, 888-825-5225. Alex kicks us off here in Orlando, Florida. Welcome to the show, Alex.

How we doing? Thank you. Thank you for having me. Absolutely. How can Jade and I help? I'm just trying to figure out if I should file bankruptcy or not. Pretty simple. That's a pretty serious thing you just lobbed out there. It's like, I'm not sure if I should go with Coke or Pepsi at dinner tonight.

What do you guys think? Goodness, that's pretty serious, Alex. What caused you to come to this point? Well, just been out of work for about three and a half months. Had about 30,000 saved down to my last 10,000. I know it cost money to file bankruptcy because I've done it back in 2008. Oh, gosh. Not your first rodeo.

So how much debt do you have that's making it bad? I got $100,000 in credit card debt and a lease, which is about $15,000. So you didn't learn your lesson from 2008? Is that what you're telling us?

No, I actually went through a separation in 2021 and our life savings was taken by my ex, and I became a single father at the time. You didn't get anything from the divorce? It wasn't actually a divorce. It was just a kind of snatch and grab. What?

Yeah. A snatch and grab. So there was no legality to it? No, no. I didn't pursue it. I do well when I'm working. So working so i mean she needed it more than i did and i had my son so okay just focused on that are you saying this is like a robbery like they like cleaned out your bank account like well they probably needed it more than i did so uh no

i said that but yeah she did clean out the bank account so she cleaned out the bank account you walk away with nothing is that what this hundred thousand in credit cards is? Tell us what that came from. Well, some of the debt I did tell her to transfer because I kind of seen the relation or the marriage coming to an end. So like I said, I do better than her when I'm working. And I just was trying to be, you know, the bigger man. How much was the life savings a hundred thousand okay so she took a hundred thousand and then you took 80 she took 80 okay and so and then there was also debt that she transferred how much debt did she transfer about 60,000 and then you went forty thousand dollars into debt over the last few months uh no, it's been since 2021. Okay. And what kind of,

where did that come from? Is that you trying to keep food on the table? Just robbing Peter to pay Paul, balance transferings or percent, paying off other balance transfers and just kind of caught up to me now. Okay. And I'm trying to get to the bottom of this because I never want you to have to consider bankruptcy again. So if you hear me asking you a lot of questions, it's not me trying to drill you into the wall. It's me trying to understand what's going on. So I just want to throw that out there. So you're transferring balances, but you also said that you've made a better living than her. And you obviously felt like, hey, let me take some of this debt on. I'm not going to fight it. You

kind of were taking that stance. So what was taking place right after the fact that suddenly it's like I'm robbing Peter to pay Paul I'm not help us understand what took place just transferring from state to state because of work yeah moving around a lot what kind of work do you do? Alex, you with us? Yeah. Okay. Yeah. What line of work are you in? I manage car dealerships and motorcycle dealerships for a living. Got it. Okay. So you're in car dealerships. What are you earning? Like what's a normal take-home pay for you every month? Anywhere from eight to 10 take-home after taxes. And that's currently? said you have you've been out of work for three and a half months what happened over the last hundred days where you've

been unable to earn a single dollar i've just been looking you know swinging and missing uh just you know made a move i was at a place made a move it was a wrong move it wasn't a good fit and then uh you know grass is not green or water your grass type deal but can you work at a dealership does it have to be you know managing one could you get some job in that world i probably could but i've been i've been managing for many many years so it's kind of it feels like a downgrade like a fish out of water. How many shots have you taken at this? I got 32 applications on Indeed right now currently. Okay.

And they're all for car dealership management roles? Car, power sports, yeah, motorcycles or cars. Do you know anybody in these roles? Because Ken Coleman would say proximity principle. Okay, so you've made your calls and you've said, hey, I'm applying. Tell so-and-so, put my resume at the top. Absolutely. Networked with about 20 different people at 20 different dealerships.

And I've worked at probably eight different dealerships in Orlando. Met some people and everybody spread out. But yeah, I'm networking. Okay, do you feel optimistic? Because it sounds like not if you're talking about bankruptcy well just because i have nothing coming in and i only have so much left so what i say all the time is any job until you get the job because i wouldn't want to sit and piddle away can you drive for uber yeah yeah with my lease of 10 000 miles a year sure i mean you're sitting here with a whole lot of debt and no job prospects i get it i get it whatever whatever it is hilarious when

people drive up in luxury cars doing uber as a side hustle because they're trying to get out of debt and i got nothing but respect for someone just trying to get a better life even if they made some mistakes yeah because your choice is you piddle away or you burn through $30,000 of savings or at the $20,000 mark you go, okay, this is it. I got to do something. What does it take? What's your bare bones budget?

What's it take every month for you to just keep things running? Comfortably, $7,000. Not comfortably, bare bones. $7,000. Okay, $7,000. Do you have a mortgage. $7,000. Okay, $7,000. Do you have a mortgage? No, no.

I sold my home. Okay, so you're renting right now. You've got the car lease and $100,000 in credit card debt. That's it? Yeah. And you've got $10,000 to your name? That's it. Okay.

What's the interest rate on these credit cards? Are we talking like 22% APR? We're talking anywhere from $1599 already up to about $27.99. Obviously, when you get into debt, they raise the interest rate. Are you paying like $2,500 in interest a month right now? Gosh, I don't know. When the promotion, the 0% promotion end, which I wasn't aware of, they actually charge you the interest on your balance plus your minimum payment. Here's what I would do. I'm going to go do my homework and

calculate exactly how much interest I'm paying, exactly how much I'm getting screwed, because I think we need to turn some anger into action here. And sometimes you got to pull that rubber band back to feel some pain, because you've been living pretty good, Alex. I mean, aside from the life circumstances, you know, you've had a great income, your expenses are high, you've got a lifestyle, and now it's hard to come down from that, isn't it? Oh, yeah. What's your home? Tell us about your living situation.

Renting. Renting. Renting? Okay. Yeah. Oh, boy. Yeah. Any job until you get the job. And I'm talking about any and every job you can get your hands on because you got $7,000 a month to make, my friend.

And you don't have much time to do it. You have 30 days to lock down something. And if not, then you're going to have to look at deflating this lifestyle in some way, shape or form. We've got to get back to making six figures fast. And then we can easily avoid bankruptcy. We can clean up this debt in a few years with some sacrifice and bringing our lifestyle down. But income is what you need right now. I don't care how you get it and how much pride you have to swallow to get there, man. You need this. Hope that helps. This is The Ramsey Show. honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work. We do this around our friends. We do this around our families. We even

do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life and it's the worst. If you feel like you're stuck hiding behind masks and costumes all the time, if you find yourself hiding from your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn, and you can accept all the parts of yourself over time and start living an authentic life. Masks and costumes should be for Halloween parties,

not for our emotions and our true selves. And if you're considering therapy, try calling my friends at BetterHelp. BetterHelp is 100% online therapy. You can talk with your therapist anywhere, so it's convenient for you and your schedule. Just fill out a short online survey and you'll be matched with a licensed therapist.

Plus, you can switch therapist at any time for no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit BetterHelp.com slash Delaunay to get 10% off your first month. That's BetterHelp.com slash Delaunay. Welcome back to The Ramsey Show. I'm your host, George Campbell, joined by Jade Warshaw today. If you're enjoying the show today or any other day, do us a quick

favor. It costs you nothing and it means a whole lot to us. And that is hit the share button on the show. Leave us a kind review. Hit the subscribe or follow button. It may just take you a second, but it pays dividends to helping us reach more people and showing the algorithms that, you know, we're out there. We're trying to displace all the toxicity and filth out there with some hope for people and their life and their finances. So if you could take a moment and do that, it would mean the world. All right, let's get to the phone lines. Erin joins us up next in Dallas, Texas.

Erin, welcome to the show. Hi. Hey, how can we help? Well, I was calling today to see what your recommendation would be on not having health insurance, per se, a year or two to knock out debt. This is not real. You're not really asking this, are you, Erin? Oh, absolutely. My husband and I went four and a half years when our children were young without health insurance.

It was a blessing at the time because we needed that $1,000 a month to pay bills. But that was just luck. That's like saying, well, I used to play in traffic as a kid and I never got hit. Y'all were like... I just see it as $16,000

a year. That really has no return. Just wait until you get a medical bill. I'm changing your name to Jon Bon Jovi because you're living on a prayer. Well, you know, I mean, it's like it's just realistically like during that time period, you know, it was one of those things when all three of my children needed to have shots for school. And, you know, the pediatrician, it was going to be $600. At this place, it was going to be $400. I went to the, you know, health department, and it was $56.

Sure. So, you know, there's options out there. There's lots of free clinics. I love the deal, but what happens if somebody, like, really breaks their arm or you... We had a call recently where she went through four brain surgeries. Yeah. You just don't know what life's going to throw at you. I know.

I get it. This is kind of like a... Okay, let's talk about the reasoning behind this all. Why would you do this? Just to knock out the... So, okay, as of this morning, I had $155,000 of debt in two car loans, a student loan, and my solar panels. I paid off the two car loans and the student debt, which just leaves me the solar panels. How much are those?

I guess it's $86,000. Oh my goodness. Wow. You got smoked on these solar panels. Well, I mean, not, okay, but, well, no. Yes, but what's your income? Income is $25,000 a month. Okay, so you guys have a killer income. You make $25,000 a month, and we're worried about $16,000 a year for health care? I know, right? Seems wrong, but, you know. Why not just use your amazing income and be done with the solar debt within, you know, six months? Right, well, and that, you know, is definitely doable, especially since I just, you know, knocked out $2,000 a month of other debt.

But I was just curious to know your opinion because I always go back and forth on like, I'm raising my hand again. Why I'm raising my hand again. Did you say you knocked down $2,000 a month of debt? Of the payments? Yes. so this morning i paid off okay two thousand payments and payments got you okay i was about to say okay yeah so your take-home pay is 25k i'm sorry your take-home pay is 25 000 a month yes and how long has it been that um just only over the past like say two and a half years so is this you and your husband combined you own a business tell us more about why so i'm self-employed okay self-employed that's why you don't want to buy health insurance because it's so expensive all right yeah riddle me this you guys make 300k a year take home you have 86 left in debt right right you

have 25 000 a month coming in what are your expenses going out you guys have a crazy lifestyle um well yes and no um you know i do have uh six acres of land with a nice house a nice barn i mean my for uh the house, which I've just increased. What do you mean you increased? The house payment. Well, I increased how much I'm paying towards it. Oh, got it. Okay. What's the payment? I upped that. So that is $3,600. And then on average, real estate taxes and insurance is about $1,000 a month. And then you have like, what, a little over like $1,500 for health care? Right, yes. So where is the other like, I don't know, $20,000 going every month?

Well, it was $2,000 a month going to car payments. Okay, 18 left. Keep going. Let's see. Let's see. Keep going. Some of it. Are you investing? My question is why aren't we having $15,000 in margin every month to throw at our debt? Yes. Well, so yes, I should tell you that. So the money that my husband made, so like last year, I saved 100% of his income, which typically can be anywhere from $4,000 to $6,000 a month. Okay. So yes, I had saved all of his income.

So, that's $4,000. So, how much do you have in savings? Well, other than this morning, I had a lot. But, you know, I just spent it down. What happened this morning? That's when she paid off the debts. Oh, you paid off. So, you, in a lump sum, got rid of a bunch of debts today. Yeah.

And what was the total amount that you got rid of today? $77,000. Okay. See, this is what I like to hear. I love that you're making headway. I think you're doing the right thing. I don't want to have to convince you to buy health insurance. You can afford health insurance. That's a blessing. And I think that I'm not going to insult your intelligence by telling you why it's important. I think that you know that. And I think that you need to just go on ahead and get insurance. And if you don't, you're really playing with fire. It's the same reason you have home insurance, same reason you have auto insurance. You're transferring the risk that you can't carry over to an insurance company. And in exchange, they ask for a premium. And so that's what you're doing the same thing with

health insurance. If your house burns up in a fire, you don't have the money to go replace the house today, right? And it's the same thing with your health. And so that's the way I think about it. It makes me feel better about dishing out that coin. And you guys are blessed with an amazing income. And the truth is, if you put $14,000 of your amazing income a month toward the solar panels, they're gone in six months. It's second grade math. And so if you just do that, auto pay $14,000 to your solar panels, $14,000, can you live off $11,000 for the next six months? I mean, yes, we really could. If you can't, your lifestyle is out of control.

If you can't live off $11,000 a month in take-home pay, all of America is slamming their heads against a steering wheel right now, going, oh my goodness, if I had $11,000 a month, my life would change. Do you have a spending coping mechanism? I feel like you're living La Vida Loca, but you're not quite telling us. Oh, she is. The numbers. Okay, so now i will say like over

the past two years because you know yes my business has been so well that you know it really has been just kind of like a oh you know again i've you know 100 of my husband's um money just went into savings yeah so then it was like whatever i made Yeah, okay. So you have the budget definition that I used to have, which is as long as I'm taking care of the most important things, rent, cell phones, groceries, I know that amount, everything else is for treat yourself, right?

That money should be up for grabs. And before you get off the phone, I'm gonna give you a copy of the book, Money's Not a Math Problem, because you guys need to get on a budget and a good budget means deciding how you're going to spend every single dime ahead before the month even begins. And it's not to say that you're not going to have any fun or that you can't do some of the things that you want to do with your income. You can do a lot of the things that you want to do.

But it's about having a plan so that you don't look up and go, I don't know what I'm spending $25,000 a month on. It just kind of evaporates, right? You don't want that because at the end of the day, we are stewards of this money. And so you need every dollar. We're going to make sure you get hooked up with that. And I'm going to take it a step further because something tells me if you don't have health insurance, you probably don't have any term life insurance. You probably don't have a will. These are all things that when you are in a family or you have somebody else that is now part of your

life, they are so, so important to have in place. You need health insurance. You need term life. You need a will. We're going to make sure you get hooked up with that. This is how you love yourself and your family well. You can't just be out here living on a prayer. You got to make sure these things are in place. And by the way, for anybody else listening, insurances, those things that we just spoke about, they are not a baby step. They do not wait until after baby step two is over. You institute those things as now, now that you know about it, you got to do it now because like George said, they, they shelter you from the things that you can't afford. If they should happen, your car breaks down, your house burns.

God forbid someone passes away. These are the things that protect you from life's storms. Go to RamseySolutions.com slash checkup. We make it easy for you to figure out exactly what you need and how much. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. The number to call is 888-825-5225. We're old school around here.

You got to make an actual phone call. No DMs, no emailing in. You got to talk to us right to our face. And might I add, be open to the opinions. Y'all are calling in to ask us our opinion and what we might do. Yeah. That's a good call out, Jade. Some people calling in looking for validation and justification of what they're going to do, what they did do. And I'm not here to cast judgment. We just want to help you with the next right step. That's right. And we're confident that it will work

if you do it. But I feel like sometimes we get off a call and we're like, and America knows it too. They go, they're not doing it. They're not doing it. They're not doing that. So that's fine. But we got people to help. And so if you want to waste our time, like don't hog up our phone lines.

Just know we love you. We want what's best for you. We're not trying to make good radio. We really are thinking about what's going to serve you in your situation. And we want you to get out of debt and we want you to have all those great things. And it to have all those great things and it's what we would do and it's what we have done yes these sacrifices we tell you would do tell you y'all to do yeah we would do them ourselves

and jay's lived it paying off half a million dollars in debt with her and her husband george over seven years i've done uber and lyft and yeah i've ate the lean cuisines you know i'm sorry i'm done with that life jade now i go to the grocery store i walk right past the lean cuisine as you should i don't care if they're on sale or not you're not going to tempt me it was just a season it was a season oh all right steve is in harrisburg pennsylvania steve welcome to the show how can we help today yeah hi guys thanks for taking my call appreciate you yeah what's going on yeah so in a nutshell um how do i prioritize i'll just ask the question how do i prioritize baby step two with where i think where my career could be in the future. So I left the wastewater field,

wastewater treatment, and a few months ago, because there was very little room for growth, kind of got to wait for somebody to retire or leave to get promoted. but I really, I did like it. I don't love the incentives of municipal government. It's slow paced. If you're go-getter, people are telling you to pump their brakes. But I got headhunted to go back into that field. So I left the field about four months ago, five, I guess, five months ago, private, private sector customer service. I've never done this before, but I really like it like being in the private sector where, uh, if you're a go-getter, they, they don't tell you to pump your brakes. So, um, I really liked that, but I got headhunted to go to a different municipal facility, um, that would pay $1,200 a month more than I'm making now just to start.

And that's a pretty serious raise. It's a pretty serious raise. Well, how much more would you have to do at your current job in order to make an extra $1,200 a month? It would take a promotion. A few. Yeah. And so it's tough though, too, because this in the municipal wastewater, I started a side hustle. I do it on the side as well for private mobile home parks and campgrounds.

They need somebody with my certification. So I do that on the side and I'm looking to grow that. So that's another positive to the job. And how much do you earn from that? Last year I made about $20,000. Okay. Nice. How much debt do you have? Just about $66,000. All right. What kind of debt is that? Vast majority is student loans. So it's going to be like 60,000 is student loans, one home equity

loan because our boiler went out for 5,000 and then credit cards are about a thousand. Okay. So let's play out the scenario where you take this new job, you get the pay raise. What will you be making a year? Yeah. So, well, I know the numbers per month. What's it per month? So from right now, it's $33,000, so it would be $4,500 per month. Okay. Yeah.

And you said... $4,500 per month, that's not including the side business, and I take home $1,500 on top of that. Okay. It would be like $6,000. $6,000 a month is what you'd take home? Yes. That's $72,000 and take home $1,500 on top of that. Okay. It'd be like $6,000. $6,000 a month is what you'd take home? Yes. That's $72,000 and take home. All right. What about your wife or somebody? You said our boiler went out. Yeah, my wife, she stays home with our three kids. How old are the kids? Four, two, and five months. Okay. Mama is working. Okay.

Well, here's the deal. You're making $72,000 versus what you're making now, which is what, $40,000? Somewhere in there? Last year, I paid taxes on just under $70,000, but that wasn't take-home. It was more like $50,000 or $45,000 take-home. Well, with your $66,000, I'm thinking that you're going to be able to pay off this debt a whole lot faster by taking this new role. And it's not a forever thing. You know, it sounds like you enjoyed both.

Who knows? You might jump to this new role and go, wow, they're giving me far more leeway now because I'm in a more senior position. They're letting me make more decisions. I'm moving faster. I'm able to make more. You're able to do the side hustle. I think the upsides here are wonderful. And it's not like you hated that job. It's just what you wanted to move at a different pace and make more. And now you're going to be able to do that.

Yeah. Interesting. Interesting. Yeah. I appreciate that. Yeah. Cause I mean the debt, the debt, it's really scary to me. I mean, we're barely paying anything towards it. Yeah. What's your total payments across your student loans, the home equity loan, the credit cards? Are we talking, you know, a thousand, 1500 bucks a month going toward payments? It would be that way, but we make so little that we're in the save program. And that's just for a short term thing. I don't want to do that, but we didn't, we didn't really have an option. We bought a house that we couldn't, I mean, we're house poor. It's not a big house, but we should rent.

What are you paying in mortgage? $675, it's nothing. Oh. So what do you mean you're house poor? Yeah, what do you mean? I mean just stuff breaks on an old house. And you try to get traction on your debt snowball. And every time you try to get traction, you drop $200 on this, $500 on this. So let me give you a little

peace of mind. Let me give you a little peace of mind with these student loans, because when it comes to the save plan, like you mentioned, I actually do think that when you're working, actively working with intensity, a debt snowball, the save plan can be a tool for you to keep your minimum payments low so that you have as many dollars as possible to throw towards your smallest debt. So if you're doing that right now, yeah, that's a good move for you to keep that intensity, throwing it towards your smallest debt, which I think you said was a credit card of a thousand dollars. And then you'll move on to this home equity line of credit or the home equity loan now your student loans is it one big one for 60 or is it broken down to into a lot of little guys it's a bunch yeah it's like eight or eight or nine uh you know

between a thousand and five thousand okay um and then there's one big twenty thousand dollar loan that we consolidated that was a bunch of private ones so when you do your debt that'll be our last one you do well contrary when you do your um debt snowball i want you to do it thinking about these little these individual little loans because what's going to happen is when you when you pay your payment you're satisfying the interest for all of those little guys and you're satisfying you know whatever the the payment is for all those little guys but when you go in and say i'm going to make an extra payment you've got to call in and say which loan you want to go to that which loan you want your principal payment to go towards so even though you're saying jade i've got sixty thousand

dollars of student loans if you have a student loan individually for one thousand dollars you're going to call in and say i want want to pay off this $1,000 loan and it will be gone. And when you do that, your overall payment's going to go down. And so that's the way I want you to attack those. Because it might be that in line of smallest to largest, you may have a couple of student loans that come before this home equity loan. And if that's the case, do that because that's going to make you sleep a lot better at night to know, okay, I just knocked out a $3,000 one. I just knocked down a $2,000 one. And so that's what I would do. And Steve, what are your monthly expenses to cover your household insurance bills, you know, the mortgage

plus your minimums on your debts? What does that add up to? Yeah. So if there's nothing unforeseen, we have 800 a month left over. So right now I take home about $4,300, so about $35,000. So you'd have an extra $1,700 a month if you took this job plus the side hustle on top of the $8,000. Now we're talking $2,500 going toward your debt. So that's $66,000 getting knocked out quick. Yeah, it would just be the $1,700, though, because the business income was included in the $43,000. Got it. That'll still get you debt-free a whole lot faster, my man.

That's right. I like Jade's advice. Prioritize the little guy. That's a motto I live by, Jade. Thank you for that. You're welcome. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm George Campbell, joined by Jade Warshaw. Well, Jade, as springtime and summer rolls around, people start looking for houses, maybe thinking about selling their house. And you've got to do this the right way. And selling the house the Ramsey way makes home ownership a blessing instead of a burden. And the Ramsey Trusted Program is the only way to find an agent that you can trust to help keep you on track with what we teach here at Ramsey and get the best offer for your house or find the right house for you. And we're going to send you some of the top agents in your area who we trust. And you get to review their stats. You get to interview them and decide which one you want to work with.

And these agents, they have years of experience. They have sold a lot of homes, and they're going to help you make a wise decision when it comes to pricing and marketing strategy, making or choosing the right offer. There's a lot of details here at play and they know exactly what's happening in your local market. So you can find a Ramsey trusted agent for free at ramseysolutions.com slash agent. Love it. All right. Let's go to the phones. Dean awaits in Tampa, Florida. What's going on, Dean? Hi, thank you so much for taking my call. Sure. How can Jade and I help? Okay, so I have a low income and I have high debt for my income, but I'm probably going to be needing a new car here pretty soon. And I'm just wondering

at what point should I be getting the car? I don't want to buy the car, like, financing it. I want to buy the car, like, outright. Good. Good. That's the spirit. Debt is not an option. And so let's help you find some margin here. How old is your car?

Like, how soon does this thing need to be replaced? It's a 2008 car. Okay. I'm surprised it's still running. Yeah, what kind? Because that matters a whole lot. Saturn Aurora. It's lot. Saturn Aurora. It's a 2008 Saturn Aurora.

Wow. You don't find many Saturns on the road these days. I wish it were different. I do. Oh, man. That thing has seen some things. All right. Yeah.

What's it worth? Probably, when I've looked, it's been anywhere from like $700 to like $2,000. Okay. Okay. Let's say it's worth $2,000. How much debt do you have? So right now I have about $4,500 of debt. About $4,000 of that is credit cards, and then $500 is for medical debt.

Okay. Not bad. And what's your income? So right now, that's kind of the issue. So at my current employer, I'm making $20 an hour, but I'm only working one to two days a week because there's not a lot of patients coming in, but I'm planning to start a new job on the 15th of next month, and that will be $18.10 an hour. And that's a full-time job, and I'll keep my current employer for like 10 days for a 12-hour shift. Oh, nice. That'll be like a side hustle then.

You said $18 an hour? Yeah, my new job will be $18 an hour, and I'll start that on the 15th, and then my current employer is $20 an hour. Okay, so you'll move up to making about $36,000, plus you're keeping your one or two days. All right. So with that, you know, you could pay off that 4,500 bucks fairly quickly, right? Are your expenses pretty low? Um, that's the other thing. Um, I have decently high expenses because I'm a single parent. Um, um, dad helps, but it's still hard. What are your, what are some of your highest expenses?

What's rent? So I'm living with my mom, so I'm not paying rent specifically, but I'm paying other things like the internet and the electricity and the water. Okay. Is that like $300 a month? What are we talking? $400? water okay is that like 300 bucks a month what are we talking 400 bucks um in total for all of my expenses i would say it's probably a thousand dollars honestly

okay so that's great that's not expensive um for anyone even a even a single parent um a thousand bucks a month is great think about this if let's say you're you're making your 36 grand right that's three grand a month okay and your Think about this. Let's say you're making your 36 grand, right? That's three grand a month. Okay. And your take home might be closer, a little over two. Okay. And your expenses are a thousand.

That means you have over a thousand dollars you can throw at your debt. Yeah. And 4,500 is gone in four months. Okay. So I think this... I'm just a little bit... Then, will your car survive another six months or so? I think so. It's just like every once in a while, there's like a major thing that happens that I have

to fix with the car. Like I just had to fix like something with the tire, like the mechanics on the tire and stuff like that. And how much are you shelling out on average every time? Like $1,800, $800, $600, $1,000. And you have the money to do that each time with cash? Not really. Are you putting it on the credit card? No, I have not put anything on my credit card in like six months. So you've been cash flowing it. What about dad? What's he contributing and can you count on it at all?

Dad recently has been contributing for like the past two to three months. He's been contributing and it's like $300 a month, which is enough, which is almost enough for my son's daycare. Okay. Is that court ordered or either way? Do you feel like he's going to continue that? I think so. I hope so. Is there anything court ordered? What was the situation with child support or alimony? I was never married. It's been a fight up until recently. So it's just now that I've gotten him to start taking on his responsibility as a parent. Okay. Got it. Well, we'll consider that bonus money.

I hope it's always there, but let's live as if it's all up to Dean to figure this out. Yeah. And how long is this no-rent situation good for? Are you in this for a couple of years, or has there been a date that you need to move on? No, my mom's actually, like, my mom's the best. Absolutely. No, she has not said anything like that. Mm-hmm. No, she hasn't said that.

Does she have a car as well that you could use if yours was in the shop or if yours broke down for some reason? Yes, my mom has two cars, and I could borrow one if I had to. Does she need two cars? Could she sell you one for cheap? No, because she has one car that's like a 2013 and then her other car is like a 95.

Okay. So the 2013 is more than what you'd want to pay. I'm guessing at this stage. Well, let's say the Saturn broke down. Would she sell you the 95 for a thousand bucks? Highly doubt it. Is it sentimental? What's the deal with this 95?

Her whole thing is like if she has car issues. She wants to have it. If she has car issues, yeah. But I'm not mad at that. I think as long as it's there for both of you as a backup option, then great. I mean, she has a 2013. She should be fine.

I'm just making sure you've got a backup in case you have more car trouble as you're getting out of this debt. But it sounds like as you get this new job next month four months later you're completely debt free then we can start saving up to switch our car out it might be a five thousand dollar car for now that you upgrade to then you get the emergency fund begin investing and then you can upgrade that car over time and so just stair step it and take it one one step at a time what i i want to think more into the future because I think that you're going to solve the problems at hand relatively quickly with the plan we gave you. Career-wise, what are your aspirations?

So I'm actually in school right now. I'm going to school full-time online. I'm supposed to get my bachelor's in like 2025, 2026. And, and then, um, I want to open my own business doing event planning. And then I also like, I work in the emergency room right now in the hospital in my area. So I want to continue to do that. I just don't want to ever like, I'm kind of counting on myself here, but I don't want to, um, come to a point to where like, I'm not making money in my, you know, in my self-employment aspect. And then I, I'm screwed for my child. So that's kind of what's your degree in? What are you getting? It's going to be a bachelor's in business administration. Okay. So will that, that, that is to help with the event planning or will that help

you with the work you're doing now? Both. that help you with the work you're doing now? Both. Okay. Both. So with the work you're doing now, how will that raise your pay? Is there a ladder you can climb on the administration side? So with my current job, the $20 an hour, I can't simply because someone would have to leave for me to be able to get a better position.

But with the employer that I'm going to, it seems like there is room for growth because that company is nationwide. So I think I would be able to grow there. Okay. I would just, yeah, I would love to, for you to be really clear on what that looks like numbers wise for you, because I'm guessing you're paying something out of pocket to make this education happen. And I love the event planning idea. I like having your eggs in more than one basket. Just want to make sure you're off to the right start. Single parenting is not easy, but you have a great support system. And I'm going to send you a copy of my book, Breaking Free from Broke Dean. It's going to give you some ideas to find that margin, some encouragement along the way, and it's going to

help you avoid ever going to debt again. But we are wishing you the best. And it comes down to margin, Jade. Spend less, make more. I know it's not the most exciting advice we could give, but that is the only true proven path to freedom. That puts this hour of The Ramsey Show in the books. Thank you to Jade Warshaw, my co-host, all the folks in the booth, including Kelly Daniel filling in wonderfully

for James Childs, who needs James anyways. And you, America. Who is James? We'll be back before you know it. From Ramsey Network, this is The Ramsey Show. I'm George Camel, joined by Jade Warshaw this hour. Open phone lines at 888-825-5225.

The phone call is free. All that we would ask is that you maybe take our advice. Is that too much to ask, Jade? We'll find out very soon. We're here to help you win with money, build wealth, do work that you love, and create amazing relationships.

That's what it's all about. That's what it's been about for the last 30 plus years now, and we're still going. We're still going strong. You can't get rid of us. Still standing. As long as Dave's on vacation, we are here. There we go. Yolanda is on the line in Tampa, Florida to kick us off.

What's happening, Yolanda? Hey, George and Jade. How are y'all? Doing good. Goofing off. How can we help today? That's awesome. So my husband and I are debt-free, sort of.

We were debt-free, and my son went to college. And I signed for a Parent Plus loan, and I had no idea what I got myself into. Oh, man. How much? Total, about $80,000. What's the interest rate on this thing? Because I know Parent Plus loans will really take you to the cleaners. They do.

And when I signed up for this, the guy was like, oh, if you have bad credit, don't worry, you won't get approved. And then all of a sudden I was approved. Did you have bad credit? Well, I mean, it wasn't great. It was in the 600s. I mean, okay. So long story short, I have three loans. My son has four loans totaling up to $80,000. So we did pay off one because it was only like $900. But there's all these little loans. So we're trying to pay off the little ones. But then all these big ones are still incurring. And it seems like the needle's not moving.

And I need to know if it's using any kind of wisdom to consolidate. Because AidVantage sent me a link to consolidate, and I'm like, you know what? Let me just see if I can get a hold of the Dame Ramsey Club. The only time that it's a good idea to consolidate federal loans is if you know that you're getting a better interest rate overall. So you might say, yeah, I have this one that's got a crappy rate, but the rest of them have pretty good interest rates and you're just annoyed by them. So you really need to make sure to kind of look at everything as a whole, because here's the thing. When they consolidate them, a lot of times they will consolidate based on, you know, your own financial snapshot. So it's not necessarily to say that you'll have a better rate. So do your homework on this because generally with federal loans, once you consolidate, you only get the one shot.

It's like Eminem. You only get one shot. Do not miss it. I'm sorry. I can't help myself and I apologize profusely, but I digress. What I was saying is you want to make sure that you choose a very good rate because you don't want to just consolidate for the for the idea of they're all in one spot now it's less annoying I just make one payment so really looking at those interest rates and what's the plan is it that you and your son are paying these off together or you're doing it what what did you guys decide with the parent

plus so the deal is my son stays at the house and he's got a job and he's dropping $500 on every paycheck which is twice a month so about a thousand dollars okay so with mine alone the minimum payment is like 652 yeah and so we're I'm just trying to figure out should I put a lump sum on the smallest loan yes and then how much money do you guys have? Oh, what do you mean? How much savings? Oh, none. I don't have any savings. Okay. Is it just you? No, it's my husband as well. Okay. But he is the saver, and it's one of those situations where I'd rather just not know what he's saving. Does he have savings? He does, yes. How much does he have?

Oh, probably about $20,000. He has $20,000? I believe so. He's really good with the money. It's me who's not on the one. When did this turn into a competition in your marriage? Why won't that $20,000 go toward your son's student loans? We haven't discussed that.

Ah, I think you need to have a discussion let's bring him into this yeah you guys is this your biological son between the two of you no so we are a blended family and the biological father has for lack of better words um kind of lifted his hand off the situation okay so that that brings that brings in a different dynamic. Is he willing to cover the debts of someone who's not his biological son? Yeah, how long has he been in the picture? 10 years.

That's significant. Because here's the thing, those loans are in your name. So he's really helping you pay off your debt. And really, it's our debt because you guys are one unit. Do you guys combine your money in all other aspects or you kind of just, he does his thing, you do your thing? Well, here's the thing.

He pays for everything and when it comes to the bills and stuff, and I use my job for the vacation money. So you guys just have an understanding. Yeah, I'm with George. I know you called for one answer and we're like getting into your personal business here, but it's worth getting into because I do think that over the long haul, this is going to serve everybody better. But I think you have a discussion at the right time, at the right point and say, you know what, I'd really love for us to kind of just right now, it's kind of like a deal, like you handle this, and I handle that. But I'd really love for us to kind of become one and really talk about it. From that point of view, what I don't want, and you know, this relationship better than of course,

George and I, what I don't want is for it to sound like you want that so that you can get at this $20,000. Because that's really not the spirit of it. And I don't want it to come across that way. It's just sort of a catalyst for, hey, we have really done a poor job of communicating well and combining our finances in a way that we're building towards something together instead of just, well, you do your thing as long as the bills are covered. And this vacation money is not going to get the student loans paid off. We need some serious traction here. That's why you called us. And that's only going to happen

is if you guys take your full household income and use all the margin you can create to attack these loans, which let me remind him are in your name. Yeah. And I mean, it begs the question, like even you saying, and it just, all of this has made me realize, I don't know how you would feel if I asked you about this money. I don't know how you feel about me having debt in my name. Like, these are all conversations that payment, and then whatever extra money you and your son can come up with collectively, you're throwing it at the smallest debt until it's paid off. That's how that works. Okay, so I am doing it correctly. Yes, no need to consolidate. In fact, it's better to not because you haven't broken out. And as you knock out a little debt, you're going to free up a payment, knock out another debt, you free up a payment. So you see the momentum that you start to build versus trying to attack a giant mountain and you're just hacking away at it okay yes that's the spirit i also found out we're on the save plan as well so currently after 10

years with 13 000 if it's still there we're not here here's what i want to clarify in the last minute here so with the save plan and i said this earlier in the hour, but the only time I think the safe plan is a good idea is in So for instance, let's say your smallest debt right now is $6,000. Instead of paying a high minimum on everything, you'll have more money to knock out that $6,000 debt faster. So for that reason, and for that mentality alone, what I suggest is a save plan. But please, please, please don't get into it thinking, hey, I can relax and in 15 years or in 20 years, the government will have my back because that's just not the case. Yeah, we got to start throwing huge chunks of money at this. We're talking 20, 30 grand a year, at least to get this knocked out. We're not waiting 10 years for nothing. Let this be gone in two or three. And that means combining

finances with your husband and getting on a plan. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. You've heard us mention during this hour, talking about budgeting, talking about every dollar. And if you don't know, the best way to make the most of your money is by creating and sticking to a budget. You got to put it on paper. You have to face the music, face the reality of your financial situation. What is your income? What are your expenses? We ask those in almost every single phone call because you need margin in order to win with money. Without margin, you're not going to win. And the only way to figure out if you have the margin is by doing a budget. And the best budgeting tool out there is EveryDollar. It makes it simple to plan spending,

track expenses, save for what matters most to you. And it's an easy to use app that fits into your busy lifestyle. If you've got a spouse, you can both be logged in and have that accountability and transparency. It'll help you keep a pulse on your spending and make progress on your goals. So be sure to download EveryDollar for free in the App Store or Google Play today. Kiana's up next in St. Louis. What's going on, Kiana? Hi, Jaden, George. Hey, how can we help? Hey, so I was wondering if I should go back to school. Ooh.

I, yeah, I recently moved back into my mom's, and under her roof, her conditions are that I go back to school. How old are you? But, yeah, but I can't ignore the are that I go back to school how old are you but yeah but but I can't ignore the the debt that I have so yeah who's paying for it if she's making these demands that's a good question I don't have I don't have any bills and you know she's always done everything she can to help and so she's not I don't think that she wouldn't help but you do have debt what's your debt situation yes i do have debt i'm about eighty eight thousand dollars in debt right now

what kind is it um 66 of it is student loans half of that though is a consent judgment what's that mean that means that i've been kind of taking the court so i've got to get a payment arrangement for this. I'm currently on an active payment arrangement. Got you. Are they private loans or they're federal? So this one through consent was through an interest-free student kind of loan thing through a not-for-profit. The other one, though, is subsidized, unsubsidized. And then I think Parent PLUS plus a little bit of it.

Okay. So basically with this judgment that you have to pay, what is that? What do you have to do per month or like what's the deal? Yeah. So I'm in an arrangement where I started off small, but as of course the years go on, I'm set to increase my payment. So right now I'm at 200 a month for it. Next year when I pay off my car, I'll be at about $300 to $500 for it. Okay. Oh, yeah. So it's accelerating.

So you got $66 in student loans and a car loan. What's left on that? That's $6,000. That's set to be paid off in September of next year. Okay. What's the other $16 in debt? $12,000 in medical, and then there was like three in collections, so charged off credit cards and active.

Okay. So what is your income that you're bringing in right now, and what type of work do you do? I'm an insurance producer. I work for my mom, and so I'm bringing in $38,000 currently with her. Okay, and what does that look like for you per month after taxes and everything? That's about $2,200. Okay. Did you finish school?

So I didn't. I got out to pursue my relationship and that didn't go too well. Oh boy. What were you majoring in? What was the goal? So biology major, minor in chem, and I wanted to be a dentist. I'm not ruling it out. If I go back, I want to go for dental hygiene temporarily. Dental hygiene. And what would that cost? I am not sure. I know that they have a two year program. I've been looking at averages, but I'm not too sure exactly the price for it. Okay. So I would say getting off the phone with you here, one of your homeworks

is to find out and price out different dental hygiene programs. Because I do think that for you, especially if you kind of know what you want to do, really getting the price points and figuring out how you're going to pay for that is like the most important thing that you're going to do. Because we know student loans don't work, right? That's a, you got the raw end of the deal on that.

So that's thing one. Obviously, we're going to hook you up with Ken's a, you got the raw end of the deal on that. So that's thing one. Obviously we're going to hook you up with Ken's book, Paycheck to Purpose. We're going to hook you up with the fine work you're wired to do so that you can kind of do the assessment in there and make sure that dental hygiene is really where your strengths lie. So that's a homework for you. Plus the homework for us is giving you those free items. Now let's talk about this debt. So the $2,200 a month that you're making, are you working 40 hours a week full-time? Yes, that's full-time.

Okay. I think that you can find another job and make more. Okay. Doing anything. My question is, is mom going to be okay with this? She is. She's okay with whatever will help me be successful. Okay, good.

I didn't know if you were like under her thumb. You're like, mom, I work for mom. I work, I live in mom's house. And so I was just, I didn't know if that was going to go over well if her, if your income is tied to hers. I'm really trying to be loyal to her. And so she's mentioned venturing off and making a little bit more, um, doing something different. But I just.

Because if you could make 60 in the insurance world instead of $38,000, well, now we've got some margin to really attack this debt. Because what I'm seeing on paper, you've got a giant hole, and the shovel's just not big enough to really make a dent here. We've got to increase our income significantly. And the truth is you can do that with the skills that you have to offer without having a degree. And so I like dental hygiene for the future, but right now,

to George's point, we've got to get some money in the bank account. And so if I'm you, I'm going to start looking online, and I'm going to start applying for any and everything that makes me more than $2,200 a month, basically, that lies within your skill set. Think about it this way, Kiana. How much can you put towards your debt every month right now? So I haven't been putting anything. I do start my second job tomorrow though what will you make off of that uh i did the math it was like only 9 000 a year okay so that again i'm glad that you're making the effort but i just know you can do so much more and make a lot because

here's what i want everybody and here's my thing everybody can't live as an adult at their parents' house and it go well. So if you have the opportunity to live at home and it's drama free and you can, there's an exit strategy, there's an exit strategy. You can take advantage of that for a short period of time in order to accomplish a goal. I'm all for it. But the key is you've got to have, like George said, an exit strategy. And that involves getting that income as high as possible so that you can take advantage of the fact that you're not having to pay rent and you're not having some of those expenses that go along with having your own place.

And so that's what I want for you, Kiana, is to make the most of this limited time only offer. Yes. I like that. It's a limited time only deal. I hope that helps. Yeah. Let's go to Jason in Green Bay, Wisconsin. What's happening, Jason? Hi there, guys. How are you today? Doing well. How can we help? Awesome.

I discovered you guys just a couple months ago, and you guys are like my heroes. The advice you give and the compassion you have for people, it's just, it's awesome. And I thank you for it. Thank you. Of course, how you might be able to help me. Before I, four years ago, before I ever heard of you guys and the Baby Steps, et cetera, I went ahead and purchased a brand new vehicle, which I'm not a millionaire and I was not out of debt. So now I know that that's kind of a no-no.

It's worked out for me. I don't really regret it. What do you mean by it's worked out? Well, I have no reason to regret it yet. I do still owe about $9,200 on it. Okay. And I think what I have really appreciated about having a brand new vehicle is the warranty that it came with

and that the little things that have happened have just been completely covered. What little things have happened? And that's actually the reason that I'm calling. Little engine things like transmission issues. I thought new cars were supposed to be bulletproof. You shouldn't have issues by buying a brand new car. I admit. Yeah, I admit.

You're right. Okay. It's a Kia Soul GT for anyone that might be wondering. And I started, it had these issues beginning, I want to say, September or so of last year. You know, I brought it in and they, oh, our coil needs to be replaced. Okay. A couple of weeks later, the engine light went on. It happened to be the same thing.

Oh, must have been a bad coil. You know, we'll take care of that. It's under warranty, you know. So no problem. Sorry, we're running out of time, Jason. What's the question? We'll see if we can get to it. Okay.

Okay. Well, I just found out with this current repair that my engine, my warranty is no longer, I just surpassed the $66,000. So you're going to have to pay out of pocket. No. They're going to cover it because when I first brought it in, it was still under $60,000 when they first started troubleshooting last fall. Okay.

What's the question? I'm wondering, is it worth getting supplemental car insurance now that I'm not under warranty? No. Do not do it. Just pay what you owe for the service. If they cover it, great. If they don't, you have a car and cars need maintenance. And don't buy a Kia Soul again.

We've learned our lesson there. Brand new. It was sort of old. We are back. It's the Ramsey Show. I'm George Camel here with Jade Warshaw. Taking your calls at 888-825-5225. We'll try to help you take the right next step for your life and your money.

Brandon is in Providence, Rhode Island. What's going on, Brandon? Not much. Thanks for taking the call. Sure. How can we help? So, kind of got a good problem to have, fortunately. Got a nice big promotion at work recently.

So, got a pretty big salary increase. Yay. How much? By a little over 15%. Way to go. Wonderful. So what do you, what will you be making?

Um, after taxes and benefits and everything, it's around 4,100 a month. Great. Cool. Um, so really, well,

it's the most money I've ever made in my life. And I've got a few kind of big life things I'm saving up for. And I feel like I don't have enough saved up. And I feel like I want to be able to continue to power save while being able to enjoy the money that I have. How old are you? Are we talking about... Oh, go ahead. Yeah.

So I'm 33. I'm also debt-free, which is great. Wonderful. And you got an emergency fund? Yeah. So I'm 33. I'm also debt free, which is great. Wonderful. And you got an emergency fund? Yeah. Because you said you feel like you don't have enough savings. Are you talking about investing? Not really investing. Just like I'm getting another car at some point. My car is very unreliable. I'm starting to get to that point. I've had it for almost 10 years now. So maybe it's... Savings for a house, things like that.

I feel like those things are going to come up quickly over the next couple of years. And I just want to be ready. I mean, the way we would teach is, you know, you're going to save three to six months of expenses right after you've become debt-free, which you are. And so stable income, it's just you. How's your health?

Good. I mean, three months might do it for you for right now and then if you decide later that you want to up that to six months that's your prerogative but the way we would teach is baby step three is save three to six months of expenses and then after that you can begin baby step 3b which is setting aside for your down payment on a house and at any point throughout this journey if you want to kind of set up some sinking funds which is basically you setting aside a designated amount of money every month to go towards a specific task whether it be you know upgrading a vehicle or car maintenance or whatever it is that you feel like

is on the horizon with your current vehicle you can do that yeah i feel like i'm kind of comfortably at that point now what are your total expenses every month well i just i mean i just did my you know looking at my budget i did well below my means that has i probably spend less than half my total income every month okay so you could put around like two grand away to to to where your savings goals? Um, maybe a little less. Okay. I think what would help you, cause you said you were, when I gave you the first framework, you're like, yeah, I feel like I'm comfortably there.

You seem like you're not living above your means at all. So is it just that maybe you need a very clear target? So you feel motivated? Is that where we're at? No, I just feel like I'm going to have like the car and the house thing come up at the same time. I'm like not going to have enough money comfortably saved. Well, they're very different goals. You know, a home down payment that might look like $60,000 for you, whereas a car might be $15,000.

And so if the car is more urgent it's okay to not save up for a home right this second. Be investing 15% and then put away $2,000 a month for you know a year that'll give you $24,000. And I'd start I'd start with the car first because you can control that like let me say the opposite way. You can control when you're going to buy a house. It's not going to sneak up on you right. Like you get to just to decide I'm ready or I'm not ready. No one's going to, you know, put a gun to your head. But with the car, your car could break down or, you know, could come to the point without you necessarily wanting it to that you do need a new vehicle. So I would start setting aside money for that first, since you know it's coming. And then with

whatever money is left, then you can start building a down payment. But I think that having a really clear target is something that's going to keep you on pace. And it's also going to inform whether or not you're ready. And you won't have this feeling like it's sneaking up on me. It's like, no, I have a plan. I'm saving, like George said, $15,000 for this and $60,000 for that. So nothing's sneaking up on you. You're just following a plan until you get there. Are you on a written budget right now, Brandon? Yeah. Yeah. I mean, I just feel like I'm not going to be able to save enough. That's my worry. Well, what is enough? Let's define enough because that can be a real squishy moving target. Yeah. Yeah. I hear you. I mean, that's where we're wanting you to have a concrete goal. If you want a $20,000 car, you know exactly what enough is.

Right, right. I mean, I would love to have 40, 50 grand saved away right now, but I don't. For what? Just a car and, you know, again, to start that kind of down payment process. So let's separate these. If we're going to make it tactical, if I was your coach right now, I'd say, let's get your every dollar budget. We're going to have different sinking funds, and those can be tied to actual savings accounts. So you could have a high yield savings account. One account is for new car upgrade. One is for the

down payment. One is for vacation because you said you want to enjoy your life. And then we automate this to, we go, all right, 500 bucks a month going toward vacation. In a year from now, we'll have six grand. 1500 bucks a month is going to go toward a car. 10 months from now, we'll have six grand. $1,500 a month is going to go toward a car. Ten months from now, there should be $15,000 in that account. You see how much more clear it is when you have those goals? Yeah. And there's going to be seasons. Right now, you might be in a season where you've got to upgrade the car and you need a vacation.

Yeah. And the house may, you know, we're going to punt that. Next year, we'll start the house down payment goal. Whatever you want to split it, but just don't have a flat tire to where you're putting all your effort to one thing, but you feel like, oh, I really should upgrade the car. Man, I really need to enjoy life a little bit. You're 33, you're debt free. You're a young guy.

You got time on your hands. And so I just put that money to good use, applying it to those different goals. And if I were you, I'd get into every dollar premium because they've got a long-term planning feature in their financial roadmap where you can really look in and say, like you said, whether it's planning for a down payment, those other savings, you can plug in those numbers with what you have as margin. And it's going to help you project how long it will take you to save. Because I think for you, just being able to say, okay, if I want to save 50 grand, it's going to take me X amount of months or X amount of years to make that happen. And then at that point, it's just a matter of walking through that plan.

There's no unknown and there's no, you know, if anything, you'll get there faster because you'll be motivated and start to earn more money. That's right. Good question. Thank you. Terry is in Huntsville, Alabama up next. How can we help, Terry? Yes. Thank you for taking my call. Sure.

You've got the best show on radio. Oh, we appreciate that. We think so too. We're biased though. Yes. Okay. I'm 65 years old and I really would like to retire at the end of the year. Okay, so my situation is I'm wondering if I should pay my house off, and the payoff is $83,000. My monthly expenses are $2,500, and I calculated if I pay my house off, my monthly expenses will go from $2,500 all the way down to $1,500. Wow. Great.

Love that. So this is the money that I have available. I work right now and my monthly income is 2,800. I have a IRA which is worth

1,000, excuse me, $134,000. I have a retirement account at work which is worth $20,000. Okay.

And so I wanted to call you up since you all have more experience with money than I do. Is that a good idea to go ahead and pay my $80,000 house off? Considering I want to retire at the end of the year. Is your plan to just live off Social Security? Yes. My Social Security actually is going to be $2,145. end of the year. Is your plan to just live off social security? Yes, my social security actually is going to be $2,145. $2,100. In your mind, you're going, hey, that's way more. I only need $1,500 to live and I'm used to living off of $2,500. Right. And paying off the house would

clear $947. You know, I won't have to pay that a month because the house would be paying off the house would clear $947, I won't have to pay that a month because the house would be paid off. Yeah. If your nest egg was larger, I would say this could be a good move. It worries me that the total nest egg is $150K and you're about to take over half of that to knock out the mortgage. I love the spirit of it, but I think you might be better off continuing to try to knock out this mortgage with your current income while you're

working and letting that nest egg grow a little bit. Because every seven years, it'll double, Terry. So if you left it to 72, for example, you'd have 200, you know, 300K in there. Not to mention if you wait longer on your social security to get the max benefit, since you plan on living off this money, that might be advantageous for you as well. So you get the maximum amount. The hard news is you might need to work another year or two because retirement is not an age, it's a financial number. And right now, you have great low expenses. That's right. But we need that nest egg to get buffed up. And so I'm going to try to get more in that

retirement account, continue to live below your means. You're doing great. And I'd keep working for a little while before pulling the trigger on that. Thanks for the call, Terry. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Our scripture of the day, 2 Corinthians 4, 17 and 18. For our light and momentary troubles are achieving for us an eternal glory that far outweighs them all. So we fix our eyes not on what is seen, but on what is unseen. Since what is seen is temporary, but what is unseen is eternal. Aretha Franklin once said,

It's the rough side of the mountain that's the easiest to climb. The smooth side doesn't have anything for you to hang on. Hang on to. I like that. I like it. I like Aretha Franklin. Got away with words. All right. Alyssa joins us up next in Milwaukee, Wisconsin. Alyssa, how can we help you today? Hi, Jaden, George. Thank you so much for answering my call. Sure. What's your conundrum today? Yeah. I am currently 23. I'm living at home with my parents and my sister. I have a full-time job. I currently make about $4,000 to $6,000 a month, just depending on the month. I'm in baby step number two, getting after my debt. I have about $9,000 in debt with my car and about $28,000 with my student loans. I am just wondering if I am financially ready to kind of get out of my parents' house

and move out into an apartment that would be about $900 a month. I just want to make sure I'm continuing to be gazelle intense while also trying to live on my own and kind of take the next step. I love it. Well, you sound very mature. The way you're talking, I have no doubts that if you were to move out, you're still going to stay gazelle intent. So where all four are you moving out? If it benefits you, if you're like, hey, six more months and I could really knock out this debt with no bills, that's fine. But if you're

like, hey, I really just want to be out on my own. I'm going to have inexpensive rent. I'm going to get roommates. I'm going to make the sacrifices. Then I'd say go for it. What kind of work do you do? I'm currently a strategic sourcing buyer for a kitchen and bath company. I work for the hospitality side. So I make about, I would say, $74. Why the fluctuation? Is there commissions or something?

Well, I do a side gig of uh dance teaching oh okay make quite a bit of money doing that as well like that so have you crunched the numbers on this if you if you move out you spend 900 bucks a month on your place and all the things that go along with that how does it affect your debt payoff yeah i guess with the car it would probably extend it about a month to two months. I haven't really looked into the student loan side of things, but without moving out, it would get this debt kicked off by, you know, next July probably with how intense I've been going after it. And if I did move out, it would probably, you know, extend that to maybe

six more months or a little more than that. So it's just, you know, knowing if I did move out, it would probably, you know, extend that to maybe six more months or a little more than that. So it's just, you know, knowing if I'm mentally, emotionally like good to move out. Not that I don't love my home. Just want to make sure I'm taking the next right steps and, you know, making the right decision with this debt. Yes. We're talking like 11 months versus 18 months right right i you know at 23 if you were i don't think there's a wrong answer here let me start by saying that um okay but at 23 if you're ready to move out and you have the money to do it you've got first and last month's rent saved do you have a little bit of savings set aside that you can kind of just to make sure that you can pay for the things associated with the move and getting settled and getting some, you know, at least an

air mattress, like having the things that you need to live on your own. I don't know what you have or don't have. Okay. Yeah, no, absolutely. I think I'd be covered there. It would just take the more, you know, out of paying that debt each month and, you know, pushing it out a little further. to do with my expenses and my income? What sacrifices would I be willing to make? How much more dance could I teach? Could I get a promotion at work within the next six months to a year? My annual review. Start thinking in those terms to speed up the process and just keep the momentum. Because that's my thing is, you know, as much as I want you debt free, I think not losing the progress and momentum is super important if you do move out. Yeah and i thank you i appreciate that yeah i don't think there's a wrong answer if i had to vote for one i'd vote move out and do george's and more intense well i just i hear dave rams from my head and this is the dave quote an eagle that

doesn't leave the nest is called a turkey something like that i butchered it dave says it so much better in his southern drawl yeah but you know so you know. So are you calling? I moved out at 20 and I had, you know, debt. And I had two, three roommates. And, you know, you just do whatever it takes. But I think there's an independence and maturity that happens when you got to pay your own bills. And you start thinking about spending differently when it's like, no, this is my paycheck now. Mom and dad, they're not covering dinner tonight. Yeah, that's true.

That is so true. My last year that I moved out of my parents' house, I had one year of college left and I was basically couch surfing because I was like, I can't live at home anymore. And so I was paying a small amount to sleep on my friend's futon that was like in the living room.

They should be paying you for a chiropractor after that one. It was worth it to me, dude. Ouch. All right, let's go out. We've got time for one more call from Caleb in Vancouver, British Columbia. How are we doing, Caleb? Hey, good. How are you guys doing? Great. How can we help? Oh, you there, Caleb? Let me see. Did we lose theirs, Caleb? How are you doing, man? Sorry about that. Oh, sorry about that. I'm just calling for some advice with my growing family.

My wife and I are in a position where we're trying to decide if we want to renovate our home and make way for another baby, or we should potentially be considering selling and buying something that's a little bit bigger for us. Oh, interesting. What would the renovation cost? That's the thing. So what we're hearing from the contractors is $100,000 to $150,000 to turn our one-bedroom suite into two, likely just at max two. So we'd be moving some rooms around. Wow.

Do you have the cash? That's the thing. We'd be likely looking at like a remortgage to do that situation. Okay. What is your house worth? That's the thing. You guys are going to think it's crazy, but our house is actually worth $1.8 million. Okay. Wow. But it's a suite, like a three up, one down situation where we live with my mother-in-law.

She's upstairs and then we're downstairs in the suite. Okay. So we're trying to stay in the home because we love living with our mother-in-law. She's upstairs and then we're downstairs in the suite. We're trying to stay in the home because we love living with our mother-in-law but we also just need the space because we want to have more children. You've got one right now?

Just one, yeah, and we're hoping to have a second in the next year but I'm trying to do this planning before we even get pregnant. You said three up. You're talking about three bedrooms up? Yeah, three bedrooms upstairs, one bedroom downstairs. Hmm. So it sounds like there's room for the kids.

If we were to, like, cohabitate, but we do try and live quite separately. My mother-in-law is upstairs in the three bedrooms. What if you flip-flopped it? Could your family be upstairs and she's down? That would be ideal. What's wrong with that? The issue we're having is that my mother-in-law doesn't

want to live in the suite. She doesn't want to live in the basement suite. She wants the comfort of living in the three-bedroom home. Who owns the house? We have a 60-40 split where I own 40% and she owns 60%. this some weird canadian thing what's that sorry the 60 40 split i've never is this a thing that happens in canada uh no it was a situation where uh my mother-in-law was going to a divorce and essentially she was

going to need to sell this home. So who gets to vote here? Well, here's the thing. Let's say you do put on the addition. Let's say you had $150,000 today to put on this addition. That's going to add a certain amount of equity to the home. How does that get split? Who decides when it's time to sell the house? Like, how does this work long-term?

Yeah, so our 60-40 split is if the house, if we grow the house in value by, let's say, $200,000 by doing this renovation, the agreement would be that we would split whatever. Let's say we were to sell for $2 million in three or four years. We would still split at 60-40. Got it. So the growth is split in those ratios. Now, what would a new house cost to you guys? Could you buy a new house for $1.9 that suits all of your needs?

So, well, ideally, if we're going to sell in part, we would likely part ways. Yeah. So my wife and I would probably go for something that's closer to a million, which might sound ridiculous to the listeners, but in my area, that's... No, I get it. Hey, I'm voting for that right now. I think that's the move. Now, you said you loved living with her, though.

That is true. You can loved living with her, though. That is true. You can live near each other, though. That's what we're thinking is we want to live near each other, but we, yeah. Caleb, I wouldn't move forward with this plan. I'd probably just look for a different home that fits your family's needs, and she does her thing, and y'all visit each other but man that sounds complicated and expensive and so i wouldn't go through with it especially because who knows who gets the final say here who gets the vote who gets the equity

it's just simply too complicated that's it for this hour of the ramsey show we'll be back Hey folks, Dave here. You want to hear even more life-changing content from Ramsey? Download the Ramsey Network app so you can catch all your favorite shows all in one place, like the Ramsey Show, Smart Money Happy Hour, and the Dr. John Deloney Show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the Ramsey Network app today.