The Ramsey Show - How The Baby Steps Protect You From Financial Uncertainty

Starting point is 00:00:00 Hey guys, it's James Childs, producer of The Ramsey Show. Hey, this week Dave and the personalities are living it up on the Ramsey Cruise, so we've put together a compilation of some of our favorite calls and segments from the last year. Regular shows are back next week. Hope you enjoy. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. Ken Coleman, number one bestselling author of the book Paycheck to Purpose, host of the Ken Coleman show, Ramsey Personality, is my co-host today.

Starting point is 00:01:00 Thank you for joining us, America. The phone number is 8 eight eight two five five Two two five Clayton is in Little Rock, Arkansas. Hey Clayton. Welcome to the Ramsey show Hey, sir. How are you guys better than we deserve brother? What's up? Awesome, man. Well, you know the first law. I just want to say it really is an honor to speak to you guys I'm a huge fan of the show. I've watched Countless YouTube clips, etc. And I think you guys are out there changing lives. I want to start off with that. Well thank you sir. How can we help you today? Absolutely. Well you know I I'll kind of start from a broad overview and I'll

Starting point is 00:01:38 kind of break it down if that's okay with you. Just you know my my broad overview question Dave is really just how not to get discouraged in the wealth building process. I'll give you some background information. I'm 27 years old. My wife is 30. We have a combined net worth of around probably 200,000 or so. Wow.

Starting point is 00:02:01 It's right there on my number. Thank you. And I make about 58,000,60,000 on my primary job, and I do a side hustle. And the total I make around $80,000 to $90,000 kind of things on the year. And my wife makes around $72,000. The only thing that we owe on is our home. We both have MBA degrees. We have no consumer debt, no car loans, anything

Starting point is 00:02:26 like that. My home is currently worth probably around $300,000 and I owe about $195,000. We have two kids and overall life is good. We're still in the process of trying to button everything up. We're investing 10% right now. I know I need to get that number to 15. My home's on a 15-year note. We're trying to get our kids to college, you know, all that situated. So there's nothing really on fire, per se. But in general, I really do believe what you guys teach, and I believe, you know, we give

Starting point is 00:03:04 10% of our income to the church I mean, I'm a really big believer in living within your means not saying we're perfect by any means. You've done a great job Clayton I mean your numbers are amazing for your age way to go you make $160,000 a year you have no debt except your house. Everything's on track. You're killing it right, right well, man, you know, I I Really do believe it and I appreciate it, but at the same time, like I think long term, right? Like I'm- Yeah, but have you done the math?

Starting point is 00:03:31 ...like that? Huh? Have you done the math? Right, right. Yeah. Yeah. I mean, if you save 15% of $160,000, that's gonna be a million dollars in 10 years, dude. Right, right. And that's with no match a million dollars in 10 years dude right right and that's with no match have you got a match yes sir yes sir do the math right

Starting point is 00:03:53 right well you know man it just did you do the math no yes I did yes okay then did you see 10 years you're gonna be a millionaire at 20 at 37 years old yes sir yes sir so why was that discouraging you know I don't know man I just like I look at life right and I know comparisons the piece of joy and I don't you know I try not to go there in my head but comparison to what if anything you

Starting point is 00:04:20 compare to you should be ahead of right right right well, right. Well, you know, it's okay if I give you some background, some more background information. Is that okay? Okay, I'm trying to understand. It's okay. I'm trying to understand why you're discouraged. There's no reason to be. I'm really confused with that. Because dude, you're in the top 2% of America. You're killing it. I just think like long term Dave, I think when, I just think like long-term Dave, I think when I just see how everything is so expensive and even when I pay off my home and I have all my retirement accounts, etc. I just, you know, I'm trying to really set my family up. So like in 10 years, my daughter will be 13, right? And I'm trying to almost get ahead of the game where I can make sure we can go on big vacations, you know, take care of her college.

Starting point is 00:05:08 And I realized, okay, I'll be a millionaire, but I just, it feels like everything's so expensive and it's such a long process. And I realized that, you know, wealth isn't obtained easy. I'm not trying to say that. But it is a long process. Ten years is a lot longer than ten minutes. And most people have the attention span of a gnat. That's why they're not able to build wealth. I've been listening, Clayton, and I've been where you are. I actually hear me ten years ago on this phone call. So I just want to say this. Your issue is not comparison. Your issue is fear.

Starting point is 00:05:49 And you're afraid you're not gonna be able to do the things that you would like to do because you're too stuck in the headlines. And what you're not focusing on is, as Dave has pointed out, you're crushing it, number one. You're really ahead of the game. This is all gonna compound for you and you're gonna be fine. You're gonna take some great vacations.

Starting point is 00:06:02 But what you're not focused on is, is what you can actually do. You're focused on all these outside circumstances, the economy, inflation, whatever else is going on. You do need to quit witching the news. Yeah, you need to start focusing on your income and what you're gonna make next year and the year after that,

Starting point is 00:06:19 and how you're gonna be able to make more money and that you can go out and determine your financial future. You're already great, but you're forgetting all this headline stuff and all this fear and comparison. Here's what you're forgetting, your ability, your wife's ability to put a financial plan that includes increasing income.

Starting point is 00:06:42 You're going to be able to pay for all those things. Yeah, your income is not going to be able to pay for all those things. Yeah your income is not gonna be stagnant for the next 10 years. Absolutely. I don't know if that helps you Clayton, you got to shake all that stuff off. You're inside your head so deep. And or here's the thing, the secret to happiness is low expectations and I'm a little bit afraid you thought when you made $160,000 you were gonna be rich. That's a very good point. And you're not rich at $160,000 with two kids. There's no, it's no cake.

Starting point is 00:07:09 You thought it was going to be on easy street. Like everything's going to, like you're going to be flying in a private jet or something. And you know, it's 160 grand, you're not. So you got a lot more, you got double the household income of the average American. You're in the top one or 2% of the average Americans, your age with where you are with no debt and already having a positive net worth of a couple hundred thousand dollars you are killing it

Starting point is 00:07:31 And you actually are paying attention which puts you way above almost everyone who walk around their head stuck in the fog and Yeah, I'm kind I did that you do that for radio. Did you hear that? Yeah. And yeah, I mean, that's, you're incredible. You're doing great. You're doing great. Calm down. Enjoy the ride, buddy. You really, I can't, I can't tell you enough to do this over and over and over again. Enjoy the ride. I want to say one other quick encouragement because Dave, I think you're absolutely right. I just want to echo what Dave said. We have, with all young generations, throughout history, but even more so now because we're

Starting point is 00:08:09 in the social media era. God help us. I know. Unrealistic expectations lead to unmet expectations. I can't say that enough. I wish I could preach that message to every young person in the world, because here's the deal. You nailed it.

Starting point is 00:08:24 They think when they get to six figures thought that life's gonna be a golf game in your golf game oh yeah unrealistic expect mine are unrealistic met expectations no I just my golf game is in the last category just unmet period it doesn't matter that's what it is because here's the thing when you make a hundred thousand hours a year you thought it's gonna be easy and when make a hundred thousand dollars a year, you thought it was going to be easy. And when you make a million dollars a year, you thought it was going to be easy.

Starting point is 00:08:48 It don't get easy. It just gets better than if you don't pay attention. That's all it does. This is the Ramsey Show. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys, I didn't even this, John. Why don't people want to take care of their family? They think they're not going to die or something?

Starting point is 00:09:26 Well, I used to be one of those guys, I didn't even think about it. And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too.

Starting point is 00:09:43 And they don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term life insurance.

Starting point is 00:09:59 Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. Ken Coleman, Ramsey personality is my co-host today. Open phones at 888-825-5225. This is the Ramsey Show. Thank you for being with us America. Tanner is with us in Washington DC. Hi Tanner. How are you? I'm good. How are you better than I deserve? What's up?

Starting point is 00:10:52 So my question is curious about the Flexibility of spending more than 30% of your take-home pay on rent found that pretty difficult to do Especially in like an urban area like DC I was in downtown. I make around 90,000 a year post grad 23 year old. I've got just 20,000 in cash and 7,000 in an investment account and my only debt is around 7,500 in student loans and I spend about $7,500 in student loans. And I spend about $2,000 a month in rent,

Starting point is 00:11:28 which is my biggest expense by far. But I still find myself able to save and spend less on other things. I'm just curious your take on that approach. Okay, well we tell folks to put 25% of their take home pay aside for housing. And no, math works in every city and in every state you don't get a pass on math because you're in Washington

Starting point is 00:11:50 DC even though Congress thinks you do. I was getting ready to say a lot of people think they do. Yeah a lot of people in DC think you do but you don't and the purpose behind it is not that 25% is magic Tanner the purpose behind it is don't be house poor if you find yourself able to save and able to invest because you keep all other parts of your lifestyle so low, then you're okay. But what happens to most people is when they've got a high cost of housing in their budget, it squeezes their budget and there's not room to save up to buy the next car so the next car becomes debt and there's not room to save up for Christmas and Christmas becomes debt and there's not

Starting point is 00:12:29 room to save up for a couch and the couch becomes debt and because it's all going out in house payment and so in effect what you did is you you you didn't you know by squeezing yourself you did that now you're telling me you've made room in your budget and you're doing okay then you know if whatever you want to do brother but here's the thing whatever you spend on rent is gone I mean you're setting fire to hundred dollar bills in the middle of the floor and so the more hundred dollar bills you burn in the middle of the floor the fewer month less money you got man I mean it's a pretty simple equation. Yeah that definitely reduces the ability to buy

Starting point is 00:13:11 down the road for sure. Yeah yeah I mean because you're giving it to them in rent and so I don't know how you fix that exactly necessarily in your situation maybe your commute is longer maybe there's a roommate involved or or maybe you just say I'm gonna it's gonna cost me this and it's my choice and I'm an adult. Well yeah you're allowed to do all that, but our reason to give you giving you the 25% guideline, it's not a rule it's a guideline, is so that you don't become house poor because if you're for instance going to get a mortgage folks

Starting point is 00:13:41 in America, the stupid mortgage company will approve you for almost double that. And they'll approve you close to 50% of your take-home pay, 36% of your ratio, you know? And so, and that's not based on take-home pay, the 36th. You can get a house payment up close to half of your dead gum take-home pay. And there's just no way that budget works, people. And well, I'm in California. Well in California well California they gotta do math too even though your governor doesn't think so

Starting point is 00:14:09 you gotta do math you know it's not it's not an option math is math and it's not it's not a moral construct it's a it's a math thing well to win Tanner in professional world financial world you've got to sacrifice everybody who wins has to sacrifice something. And what we've done here with this 25%, you are now having to choose, do you want to sacrifice money as Dave said, by burning those extra $100 between the 5% that we're talking about? Or do you want to sacrifice a little bit of your time?

Starting point is 00:14:39 Now you're living downtown DC, that's premium. And I get it, you may work on the hill, who knows what you do, but you're there for a reason. But if you move out into the suburbs of northern Virginia, I know it well, yes, it's a headache. But we'd rather you sacrifice the right thing, and that's why we put this, I want people to understand what we're teaching here. It's not to be hard and fast on a rule,

Starting point is 00:14:59 it's to help you learn what you need to sacrifice. And in my situation, if I were in your situation, Tanner, I would be sacrificing my time not my money. Yeah, 23 years old. Yeah. Yeah you know I will tell you this Ken I did it worse than he's doing it. Sure. Worse. Yeah he's in good shape. My wife and I get out of college and here's how stupid we were. We go and rent a, we have two dogs. We're just out of college. They've got two little jobs.

Starting point is 00:15:33 We go and rent a three bedroom townhouse. Sure. Luxury. Right. Thank you. Sure. That's like five times what we needed because we thought it was cool. Do you remember what we're in the extra rooms? Uh, nothing.

Starting point is 00:15:46 Sure. Cause by the time we finished paying the freaking rent, we had no money. Yeah. So what we ended up doing was moving into a little one bedroom apartment and a questionable, uh, I don't know what those ladies down the hall were doing in a questionable

Starting point is 00:16:00 situation and, um, you were hoping you weren't on a vice episode. I'm telling you. And we lived there for a year, but it was one third the rent that we were paying before. One third. And so that'd be like, you had an $1,800 rent and we moved down to a $600 rent, right? You know, kind of thing today in today's dollars. It was a lot less than that in the back when the dinosaurs wereamed the earth but yeah but oh my gosh wow I did the exact

Starting point is 00:16:29 same crap I get it but I wanted something nice and I had a job yeah and I'd gotten out of college and I'm I deserved it but I was 23 year olds that are in a very similar situation to Tanner now just think about this if he gets a roommate and now he's saving let's just call it a thousand dollars a month okay splitting the rent he's saving, let's just call it $1,000 a month, okay, splitting the rent. He's paying off that student loan debt of $7,000 really, really fast and now he's just stacking money. So that's what we're talking about.

Starting point is 00:16:53 Yeah, stacking cash, stacking cash, man. So much more than renting. Paying all that money rent. Tyler's in Louisville. Hi, Tyler, what's up? Yeah, I just had a quick question. First of all, you guys are also bank on

Starting point is 00:17:08 though i have a uh... mom they'd expect to and uh... and then it's for a while at the beginning of the year that smart said you're stupid get out of that uh... but the student loans coming back uh... because i've been basically taking that payment but it was everything else minus consolidated or i believe it is at least. Do I look at the individual loan amounts or do I just look at the consolidated amount? Well, I put it at.

Starting point is 00:17:32 If it's consolidated, it's now one amount. Okay. It used to be little loans. If it is one loan, I mean, if it's, if it's a bunch of little, are you paying, will you be paying a bunch of little payments or one payment? No, I pay one payment. And when I look at at it I see all the individual ones I took out. Yeah, but that doesn't matter. The purpose of the debt snowball is you want to clear a debt and that payment on that debt to go away. When you clear one of these little debts it doesn't change your payment. on that debt to go away. When you clear one of these little debts it doesn't change your payment.

Starting point is 00:18:10 All right that's what I was thinking I wasn't sure. Yeah so I would just put the total in your debt snowball. Awesome that works. Hey man. Thank you sir. Get after it. That's really smart because you know the data is now coming out now that we're actually finding that that you're gonna have to pay your student loans which we've kind of been telling you for three freaking years. But now that we found out that we were right, again, yes, I just said I told you so, live with it. But now that we found out you have to pay your student loans, there's going to be a lot of questions about student loans. One of the things we're finding, Jade and I were talking about this earlier, is that

Starting point is 00:18:44 people basically took the money that they would have been paying on student loans and uh, Jayden, I were talking about this earlier is that people, uh, basically took the money that they would have been paying on student loans and spent it on vacations, alcohol, drugs. This is, this is the actual surveys are coming back. I went on a party with the money that the taxpayers told me I didn't have to pay right now because you were in a COVID crisis anybody remember what COVID was yeah it was there it was just a minute ago but it was a crisis if y'all didn't remember and it was such a crisis that nobody could pay their student

Starting point is 00:19:16 loans but they were able to use the money that they would have been paying on their student loans and go buy drugs and alcohol and vacations. So apparently it wasn't too big of a freaking crisis. What do I know? Just going with the data here. Yes, what happens when you trust a politician with an empty promise that's not constitutional? Well, or someone from the medical community that's trying to do math.

Starting point is 00:19:39 Ha ha ha ha, well there's that too. Which is proof that we've proven that, you know, once America got falchied, we figured out what happened. This is The Ramsay Show. Hey guys, I'm Jade Warshaw and I want to talk to you for a quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense.

Starting point is 00:20:28 That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash ramsey. There you'll find helpful resources like a student loan rate table, a refinancing calculator, and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if you sign up for auto pay.

Starting point is 00:21:01 But if your situation is more complex, sign up for a free 30 minute consultation with one of their student loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan. So make sure you run the numbers. But for some people, it is the right move. Learn more at laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com slash Ramsey to find out more about their student loan refinancing.

Starting point is 00:21:25 That's LaurelRoad.com slash Ramsey. Laurel Road is a brand of KeyBank National Association. All credit products are subject to credit approval. Ken Coleman, Ramsey personality, number one best-selling author of the book from Paycheck to Purpose is my co-host today. Open phones at 888-825-5225. Thank you for joining us America. In the lobby of Ramsey Solutions on the debt free stage, Jared and Christina are with us. Hey guys, how are you? Good, how are you?

Starting point is 00:22:17 Welcome, where do you guys live? Woodstock, Georgia, about 40 miles north of Atlanta. Yeah, I know it well. Well, welcome to Nashville. Not a bad drive up here. Not bad. Good to have you. So how much debt have you two paid off? 136,000. All right. And how long did this take you? Seven years to the day that we bought the house. Ah, okay. And what was your range of income during that seven years? We started about 60 and ended about 145. Cool. What do y'all do

Starting point is 00:22:43 for a living? I'm a mechanic for the post office. And I'm a constable manager at Kennesaw State University. Awesome yeah all right you got a little bit of a commute down there. Actually it's only nine nine miles for me. Oh okay all right not bad all right I missed I messed up all right so 136 seven years sound like you paid off your house. Yes. All right look at it weird people yeah way to go you guys what's this house worth 345 now I'm sorry 345 345 awesome very cool so how much do you guys have in your retirement savings

Starting point is 00:23:19 already I think we're at about a hundred thousand you know last year was a little bit of a hit everybody's yeah okay so you're gonna at about a hundred thousand took up. You know last year was a little bit of a hit from everybody's Yeah, okay, so you're gonna be about a half million dollar net worth already So you're on your way to be a millionaires in no time wait go that's fun. I just said that out loud you hear that That's pretty stinking cool guys, so what starts you on this journey seven years ago So I actually started when we first got married 15 years ago we just celebrated our 15th year anniversary. Congratulations. And so our first year you know I'm actually not originally from here so we knew each other in person from

Starting point is 00:23:55 before and then when I moved here it was really the first time we did anything together and we got married in July of 2008. It was a great year to get married. So we pretty quickly figured out that our finances will need some improvement pretty quickly. We had a little bit of debt. I grew up living pretty frugally. And so we had some arguments, and by the end of that year,

Starting point is 00:24:27 we knew we sold the car that he had some debt on. And then when I got a job, we actually paid all of our debt. Our biggest issue was the underwater mortgage for the town home that was purchased in 2007. So we were kind of mopping along for a couple years away then we had kids and I ended up staying at home it was pretty tight and we were still kind of trying to figure out where we what are we going

Starting point is 00:24:55 to do about the house eventually this has still not come up to the value that it was and at some point we got an email from our church we go to Woodstock City Church introducing Financial PC university. And in there I was like, ah, you know, I'm pretty frugal, I keep my budget. After the fact, I kinda attract of what we spent. But it said it will show you how you can buy and sell a house. So I'm like, you know, why don't we take this class?

Starting point is 00:25:23 So when we went and took the class I was like you know where have y'all been before? We did quite a few things, followed quite a few things. One of them was we immediately refi that house to a 15 so that we could start paying down what we owed on it. From the 7% interest rate that I had been paying on it since I bought it. Essentially our payments stayed the same, but more was going towards it. So you went down to what, a three?

Starting point is 00:25:55 It was a four, a red, red, red, red, four at the time. And it was 2013. And so, yes, 2013, I contacted one of the LPs. We loved her at Lindsay House. I shout to her. She came out, because we knew we couldn contacted one of the LPs. We loved her, Lindsey Haas, a shout to her. She came out, because we knew we couldn't sell the house right away, so she showed us what to do. You know, it was just, you know, she didn't charge anything for that.

Starting point is 00:26:15 So we started over the next couple of years, we started doing some upgrades to the house. Like we painted, we redid the, not redid the deck, but we cleaned up the deck and some other stuff. And so when the time came in 2016, we were still kind of figuring out whether we're staying in the area or what not. And then our HOA was kind of going down the hill.

Starting point is 00:26:33 We decided it was time to put it up for sale. Again, Lindsay helped us through that process. She was a great selling and buying agent. There was several offers on the house that we were looking at to buy, and we had had enough equity out of the house, and we had had some savings from a sale of an apartment that I had back home. I'm not originally from the US, and it was about $20,000.

Starting point is 00:27:00 So we were able to put 20% down like you teach. Wow. Yes. She not only got out of the bad town home, bad HOA that had been upside down, but you So we were able to put 20% down like you teach. Yes. Not only got out of the bad town home, bad HOA that had been upside down, but you were able to put 20% down on the new deal. On the new deal.

Starting point is 00:27:12 Way to go. And then seven years later you paid it off. And now it's worth 3.45. Yes. You gotta feel like a genius. We bought two cars cash during this time while we were paying this house off. Yeah. Wow.

Starting point is 00:27:24 Another shout out I wanted to do to Rachel I remember her talking about how you know if you want that because I wanted to get a change in the career and so I went into classes at a smaller college you know not a four-year college because that we could cash flow at the time and then now that I work at KSU I went ahead and finished my bachelor's. They pay for it. They pay for it, right, and I'm working on my master. So quite a few accomplishments along the way. So how does it feel, I want people who are maybe new

Starting point is 00:27:53 to this program going, they paid their house off. That was the debt. What does it feel like to not have a house payment? Now and then as you look toward the future. It's sinking in. It's still not really hit us, but there were several people I worked with that were like, oh, you need to not worry about that.

Starting point is 00:28:11 You need to buy this and buy this and go have fun. And you can worry about that later. You've got time before retirement. And now I've had several guys come up to me, shake my hand, like, we're proud of you. Good job. That's cool. They kind of see it can be done now yeah yeah and Christina you really I mean you

Starting point is 00:28:31 upped your game on your whole career that's a nice move it's a very nice move so what was the increase in your pay because we looked at the total you guys went from 60 to 145 how much did you increase so that was incremental and I started this full-time job in 2018. I was looking at numbers, and we actually averaged about 108. My latest promotion was in January to the manager position. That was senior accountant.

Starting point is 00:28:53 So how big of a bump was that for you? 14. But the previous year I went to senior accountant, which that was about 15. She goes and gets the education that she can afford in her budget and then goes to work for a college and they give her free to finish her bachelor's. So there's a path here called common free consents.

Starting point is 00:29:15 Way to go, I'm so proud of you heroes. Excellent job. What do you tell people the key to getting out of debt is? Stick together, talk it through, be in agreement. You won't always see eye to eye on everything but work through it. Yeah. Make sure to get to that point. Every morning, you know, I am the nerd, he's the free spirit in the sense that, you know, I worry about my spreadsheets but every Sunday we get together, we sit and we just talk, you know dream and so you know his one of his hugest contributions is

Starting point is 00:29:48 he's actually worked over time for the last 10 years six days a week pretty much every week so it's there was a lot of you know it wasn't easy no how old are you two 41 today yeah and you got happy birthday thank. Yeah and you got a happy birthday. Thank you. And you got a paid for $350,000 house. And I'm 44. Yeah and you know you're on your way to being millionaires in no time. Congratulations. We're so proud of you heroes. Well done heroes. Alright bring the kiddos up give us their names and ages and while they're coming up we've got a Baby Steps Millionaires book for you, a Total Money Makeover book for you, and a financial peace university membership

Starting point is 00:30:27 for you, you can use them or give them away. That's the live and give box, we'll have that for you. Thanks for coming up to do your debt free screen. So what are their names and ages? This is Greg, he's 11. This is Kira and she's 10 and a half. All right, they have no idea yet what their parents have done to change their family tree.

Starting point is 00:30:44 Pretty incredible guys, you guys are awesome. All right, Jared and no idea yet what their parents have done to change their family tree. Pretty incredible guys. You guys are awesome. All right, Jared and Christina, Greg and Kara from Woodstock, Georgia. 136,000 paid off in seven years. House and everything! Making 60 to 145. Count it down. Let's hear a debt-free scream.

Starting point is 00:31:01 One, two, three. We are debt-free! Yeah! scream one two three we are dead free yeah this is how it's done I love it she goes back to school with community college yep ups her game goes and finishes her mask or goes and finishes her bachelor's ups her game well done guys and he works overtime like crazy. That's right. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such

Starting point is 00:31:51 thing as a crystal ball. That's why more than 40,000 businesses have future proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data and when you're

Starting point is 00:32:36 closing the books in days not weeks you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's guide to AI and machine learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey Personality is my co-host today. Thank you for joining us America. Open phones at 888-825-5225. Shiloh is with us in Billings Montana hi Shiloh welcome to the Ramsey show thank you for having me sure what's up okay so my question is my

Starting point is 00:33:35 husband works for a company that is you unite and they are potentially going to be striking fairly soon and my question is do we hunker down and wait and ride it out or do we work on paying off our debt still? What what's the best solution to do? It depends on the probability of the strike and let's talk that through for a second. Okay. Sure. How long has he worked for that company? Seven years. Have they ever been on strike while he worked there? No sir. When was the last time they were on strike? 1997 I think. No you do not hunker down. Okay. Okay now if it gets up closer and it heats up and it heats up

Starting point is 00:34:26 and it heats up and you feel like the probability, the actual facts, not the emotions, the facts of what's going on indicate that you got a 70 or an 80% chance they are going to go out then stop everything and pile up cash. But right now what you've got a bunch of saber rattling. You know what I mean by that? Yes sir I do. Now the sounds of war but there's not going to be war. Okay yeah he is more confident that there won't be a strike than I am. So. What I'm trying to help you do and I have to do this myself and you know Ken works with people on careers and do the same thing is we have to separate

Starting point is 00:35:10 Deloney jog Dr. John Deloney talks about this anytime we're facing An anxiety situation a trauma situation. We have to separate facts from fears Facts are our friends. What you are doing is worrying. That's what you just told me. And I do that too. I do that too. But when the facts are that there's been two meetings and there was a meltdown and the guy stormed out and the last time that happened there was a strike, well that's a fact. We're probably going into a strike. But in the meantime what it is, it's like I don don't like this they could just put us out and we got no idea I don't know what's going on I feel out of control well that's just worrying okay both are

Starting point is 00:35:52 normal but we just have to make good decisions based on all of that yeah and one of the things you want to look at okay go ahead go ahead well we have enough in our savings account to pay off all of our consumer debt. Do it. So, we'll just go ahead and do it and then we'll be, okay. Okay, that makes sense. You won't have any of those payments if you go on strike. That'd be great.

Starting point is 00:36:16 That's right. And then Shiloh, you and your husband need to be aware, because every union is different, but one of the major potential strikes that's coming down the pike is UPS right now. And in that particular, this is one of the largest, the largest union in the country. You need to find out. That's where he works for is UPS. Okay, so I actually know a little bit about this story.

Starting point is 00:36:35 Okay, then wait a minute, I may change my answer. So tell me what's going on. Well, no, no, actually Dave is still right. What we wanna do is, is that has been reported that the union is saying, and this is posturing as well, but your husband's got to know how much am I going to get paid during this strike and for how long because these unions have money set aside for strikes, Dave. But it is not forever and ever and ever.

Starting point is 00:36:58 And so what you have to look at is you have to get the numbers. We could survive. I'll continue to get paid for three months if the strike goes beyond So these are the kind of facts that Dave is talking about. He's right We pay attention to this and we go okay I know that market share that UPS would lose to FedEx in three months. It'll never recover from that's right It'll never happen But the point is is the unions have enough money in a pool your husband needs to find out

Starting point is 00:37:22 Yeah, how long would I get paid for and see this is the point that Dave is making. So we could survive, we pay off the debt and we replenish that emergency fund even in a one month strike. Because I don't think it goes longer than 30 days. I don't think it ever happens. These are the facts that you're talking about Dave. So you got to know. Okay I didn't know this other information.

Starting point is 00:37:43 That's all right. It's very good. But now I'm even more sure. That's right. Pay off your debt, work your system. I'm not saying there's never going to be a strike. I would just say there's a very low problem. It's not going to last a long time to your point. UPS cannot afford it.

Starting point is 00:37:56 No. Can't afford it. FedEx will eat their lunch. Yeah, they'll be gone. This is posturing. They would lose... The business aspect of that is just mind-boggling. So yeah, no, no, you're good. You're good Very good. And one other point to point out. This is like this is like Dems and Republicans Posturing over the debt ceiling. Let me just tell you it don't matter who they are

Starting point is 00:38:18 I've been old enough. I've been around long enough to know they're gonna keep extending the debt So I hear that headline. Oh, it's gonna shut the world up. No, it's not. They're going to shut the world down. They're going to keep extending the debt. This is posturing a negotiation, you know this well. So in this case, nothing to worry about here at all. You're gonna be paid at least a month as well.

Starting point is 00:38:37 Even the union folks are saying, we have about three months worth of dues set aside that would pay our members while we're striking. So those are the nuances, but actual facts that help you make this decision. Massive deal. Wow, I'm gonna read on this. I'm really ignorant.

Starting point is 00:38:52 Okay, fun. Hey, that's why you pay me to do it. And I truly don't like being ignorant, so. I don't mind you being smarter than me. Oh no, I'm not. I just have to pay attention to work-related issues like this, you know? Morgan's with us. Morgan's in Louisiana. Hi Morgan, how are you?

Starting point is 00:39:11 I'm great. Hi Dave. Thank you for taking my call. Sure. How can we help? So, yes sir. So I am kind of in this situation, my husband and I, we have been married almost three years in February, and we have our finances separate. I have three children, and he has one daughter who's in college. And so we're just trying to figure out how to go about combining the finances with the salary I make and his salary and what we owe and expenses in that nature. What steps do you advise us? Where do we begin? How long ago were you divorced? Oh gosh, mine was in 15. Okay, and was money problems a contributing factor? No sir. Well, how long ago was he divorced? He was I believe 18 2018. More money problems a contributing factor?

Starting point is 00:40:10 Yes sir. Yeah okay. So at some point in your new marriages you have to be married to the person you are married to now not the one you used to be married to. Meaning he can't hold her misbehavior with money against you and use that as a reason to not combine finances. That's why I ask those questions. This is typically what causes people to not combine their finances who have been married once. They got trashed the last time. And it's

Starting point is 00:40:42 hard not, it's hard to go back. You know it's hard to go, oh yes I, it's hard to go, oh yes, I'm going to treat, you know, but he really It's our money, not your money, my money. It's our income. It's our debt. It's our house. It's our grocery bill. There's not a yours and mine. If you don't do this, you lower your probability of building wealth tremendously. All of the data that we have says that people that work together have a much higher probability of becoming wealthy than those who run two separate households like a couple of freaking roommates. Absolutely Dave and that's how we both feel that we're just like you know roommates. So you just put it in one pile, you have one pile of income at the top of

Starting point is 00:41:43 the page. Yours plus his equals our. And then we have our expenses down the page. Our food, our lights, our water, our house, our vacation. We're visiting your mother and we are paying for that. And whatever it is, right? You got it? It's all the way down the page. And if you guys are paying for that and whatever it is right that kind of you got it it's all the way down the page and if you guys are paying for his daughter's college that's our expense because you married her when you married him yes right am I am I off track here you are on track and I'm gonna say I too am at fault in struggling with the finance of the first marriage yeah Yeah. So we both have been. You gotta forgive the person you're married to now

Starting point is 00:42:30 because they didn't do anything wrong. It's hard though, because it's human nature to not put your hand out once a dog bit you, you know? Ouch. This is the Ramsey Show. Music Hey it's Ken. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way.

Starting point is 00:43:05 Go to ramsysolutions.com today to sign up for our newsletter. Again, that's ramsysolutions.com to sign up for our weekly newsletter. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have, George. Sketchy and never trust them. And that's why we recommend Delete Me. They help with that.

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Starting point is 00:44:31 Super affordable. It's amazing. So again, that's joinedeleteeme.com slash Ramsey. Make sure to check it out, you guys. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. Thank you for joining us America. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, host of the Ken Coleman Show, and author of the number one selling book, From to purpose where he helps people with their careers their jobs and

Starting point is 00:45:28 their work and he's going to be doing that today right here on the Ramsey show phone number here is triple eight eight two five five two two five Louisa is with us in Washington DC hi Louisa how are you good afternoon so great to be speaking with you today. Thank you so much for taking my call. Thank you, what's up? All right, I've got a what would Dave do scenario and I'm pretty sure I know what you're gonna say,

Starting point is 00:45:53 but I'll kind of just wanna walk through some options I have and it's concerning my mortgage. So a little bit of background. I have an arm that resets every November and it hasn't really been much have an arm, um, that resets every November and, um, it hasn't really been much of an issue until recently, obviously because of the rates have gone up. So it is resetting from four and a half to six and a half percent.

Starting point is 00:46:15 Joyful. Um, yep. The balance on the loan is 99,000. I've actually paid off 52,000 in the last year and I am on track to pay this off. My goal is December of 2025. Okay. So here are the scenarios. I just want to walk through, want to get your thought. Um, option one is just to stick with, you know, stick with the new payment coming up in November. Um, my payment is actually going down a hundred, $180 even with the

Starting point is 00:46:46 rate going up because I've paid off so much. So it's actually going down, um, $180. So that's option one is just proceeding with, you know, six and a half percent. Um, and then, you know, with the rate would reset, you know, next year. Option two is a recast. And I've kind of read where you're not a big fan of a mortgage recast and want to get your thoughts on this. So obviously the rate would stay the same, six and a half percent.

Starting point is 00:47:12 This would require a $20,000 payment by the end of October, and that would lower the payment $140 a month. Okay? So that's option two. And then option and then why would you want to lower it if you're paying it off in two years what's the benefit well I guess that's where I think I don't understand it's like we're trying to pay it off in two years or two and a half years right right and I so why how does lowering the payment accomplish that I mean it does lowering the payment accomplish that?

Starting point is 00:47:49 Um, I mean it's lowering the interest that I'm paying. No, it's not. I mean that would be, no, it's not. Um, if you recast, you're going to recast a lower interest rate? No, I'm recasting. I'm taking it from a balance of 99,000 to, Oh, it would lower the balance. Yeah. But you could do that anyway. You don't have to do recast to do that. Yes, I could and that's what I've been doing is just recast. All recasting does is reset the payment based on a longer term. It doesn't change the interest charged. Right, right. Okay. So there's no benefit to you mathematically to recast. Okay, given that you're planning to pay it off in two years. Yes, correct. And here's the other thing is that I don't have $20,000

Starting point is 00:48:32 just sitting around. Well, then there's that. Right, exactly. So that kind of brings me to option three. And let me just preface this by saying I heard you about a year and a half ago, maybe two years ago before the rates you know were creeping up because I was gonna read refinance and I remember you telling a caller don't refinance if you can pay it off in three years so I kind of went with that model and I'm on I'm on target I'm on track to pay this off and that that is really why I did not refinance. But option three would be digging into my brokerage account and paying it off entirely. I have, I have about $200,000 that have to cash, you know,

Starting point is 00:49:15 not in a retirement. You have a brokerage account sitting there with enough to pay it off. Yes, I do. Pay it off today. Yeah. I knew I was going to do that. I did, I did. I still wanted to walk through the options. Okay, so if you had a paid-for home with a brokerage account with a hundred thousand dollars less in it, would you go borrow $99,000 on your paid-for home to put more money in your brokerage account no it's the same thing yeah yeah I think I think I'm just having some let me tell you what's gonna happen all right that you don't anticipate because

Starting point is 00:50:00 I've been the other side of it myself and with a whole bunch of other people. You do not understand when you pay this off and you walk out in the backyard with no shoes on that the grass is gonna feel so much different. There's gonna be a level of peace blow through your home like a nice cool wind that you don't even know is coming. When you own no man nothing, all this hand-wringing you've been doing for the last few minutes trying to figure out what to do, all that's gone. Just clean and simple. You just own your house you're weird I love it I love it and

Starting point is 00:50:50 listen if you really hate it then go get you a new mortgage yeah but I don't think you're gonna hate it I think you're gonna feel freedom that you have not felt in your adult life yep and I know that from the having experienced it myself because I don't have any dad and haven't had for 30 years and I walk around without all of these weights on my shoulders and that a lot of people have and I get to make different decisions and have a different level of calm in the middle of a storm and all of that. Pay off your house Lou Louisa. Please. I promise you, you won't regret it. But if I'm completely bonkers and you do regret it, you can always go get you on the mortgage.

Starting point is 00:51:33 And theoretically put it back in the brokerage. There's a fear there. You can hear it. Yeah. No, it's just this angst of the devil I know. Yeah, that's right. The devil I know versus the peace I've never known. And it's, I don't know if I'm doing something wrong. I don't know if, which is the correct thing. And let me just tell you, man, when you get no payments in the whole freaking world, financial peace, two words that don't go together like airline service. Man.

Starting point is 00:52:09 Wow, like postal service. Sorry to you postal people. Oh my gosh. Sorry to you airline people. I mean really I mean it's financial peace two words that don't go together. I mean I've got money in a brokerage. I've got my emergency fund. I've got retirement going and I own my whole freaking house. Some of you need to breathe that in and make that a goal. Some of you spend a lot of calories flipping stuff over in your head ringing your hands trying to figure out something when the answers are usually pretty simple clean it up people simplify simplify that's it simplify yeah oh it's hard to beat guys hard to beat this is the Ramsey show It's Holy Week in Jerusalem.

Starting point is 00:53:36 Crowds welcome Jesus as king. Rebellion is in the air. Jesus operates outside our jurisdiction. Rome will descend on us all. But instead of taking the throne, Jesus turns the tables. The world will never be the same. Coming soon to theaters, The Chosen Last Supper. Get your tickets now. Hey guys, good news. Presale is on now for my new book, Build a Business You Love. If your tickets now. $350 in bonus items only at ramsay solutions dot com slash store ramsey solutions dot com slash store pre-order today Well, about eight years ago I looked up on Twitter, back when I looked at Twitter, and there were some guys on there poking fun at all kinds of people.

Starting point is 00:54:56 And then the next thing I knew they were making fun of me and they're funny as crud. And some of my favorite followers on social media, the bee, the Babylon Bee. Kyle Mann, one of the founders of the Babylon Bee along with his friend Adam who's gone on to do other things now but they started this thing over in California and a satirical look at church for one thing and making fun of us church people, by church people because you're a pastor's kid. Or no, you are a pastor actually. I'm a pastor, yeah.

Starting point is 00:55:27 Yeah, you were a pastor at one point. My dad's a rocket scientist. Oh, well there's that. Wow! For real? Yeah. No, it's not a joke, you know. Not everything I say is true.

Starting point is 00:55:35 Right, right. Well, I'm just checking. I didn't know if you were pulling... All right, so Kyle Mann is the editor-in-chief of The Bee, the Babylon Bee. Around here all the Ramsey folk are big fans of the Bee and we recommend you guys check it out if you want to have a good snicker, a good laugh a couple times a day and you ought to get something positive out of social media so there's a way you can do it. So welcome Kyle, good to have you. We're big fans man. Good to be here, thanks for having me. So fake news you can trust. All right, did Trump steal that from you or did you steal it from Trump?

Starting point is 00:56:04 That's ours man, it's copyrighted. Look at that. We made the t-shirts so we own the phrase. But fake news he stole from you? Fake, oh no, we stole fake news from him. Okay, that's what I thought, yeah. But we owe him no royalties on it. But fake news you can trust is yours.

Starting point is 00:56:17 That's us, yeah, that's all us. Because you can't trust all the fake news, but you can trust this one. That's right, I'm trusting Bad Wombie. Great, great play. Great satire, I mean, you've got a sense of humor. I mean, sarcasm is my love language, so I'm trusting that one. Great, great play. Great satire, I mean you've got a sense of humor. Sarcasm is my love language, so I love the whole thing. You guys have come at me a bunch of times

Starting point is 00:56:31 and I've loved every bit of it. We always get good response because you're not too hard on me, but you get a good use out of it. Do you want us to be? No, no, I appreciate it. I'm trying not to make you mad. Yeah, I don't need anybody else picking on me out there.

Starting point is 00:56:46 So, uh, but satire is tough. I mean, it's hard, hard. Is it harder to create satire, uh, when real life things are so over the top? I mean, it's so weird out there that it's like reality is satire. Yeah. Uh, GK Chesterton wrote a hundred years ago that he's, he thought satire would be impossible because the real news was so absurd. He wrote that in like 1911. And you picture how crazy the news has gotten from 1911 until 2023.

Starting point is 00:57:13 You know, you just, you open up the news and you can't tell if it's a real news headline or the Babylonian headlines. Sometimes I can't tell and I'm writing the headlines. You know, that's how difficult it is. Yeah. We, I mean, when I was a kid, the local newspaper, you might not agree with their politics, but it was least objective. The CBS Nightly News with Walter Cronkite was at least objective. But

Starting point is 00:57:35 if I look at CNN's website, Fox's website, look at the local newspaper here in Nashville, it more resembles the National Enquirer when I was a kid than it did, than it does. I mean, even their look, tone, feel, their fonts and everything. It's just so salacious, so bizarre. It's the aliens, you know, that was reserved for the National Enquirer in the line of when you're buying groceries, you know. But it has all shifted that way to where, you know, you guys probably get confused for real stuff sometimes don't you oh absolutely yeah we've been fact-checked dozens of times our jokes get fact-checked by

Starting point is 00:58:12 Snopes USA Today of course all different kinds of outlets fact-check our jokes because people think they're real what's the most famous case of a story being taken very seriously well Snopes fact- fact checked one of our articles that was CNN purchases industrial washing machine to spin the news. Ha ha ha ha ha ha ha ha. Somebody actually checked all that. And that got fact checked and our Facebook page got demonetized, deplatformed, you know,

Starting point is 00:58:36 all of that stuff because of that article, because it was fact checked. And they said, oh, you guys are sharing fake news. Yeah, it's a joke. Because CNN, yeah, the giant Washington. CNN really didn't do that. Who knew? Well, as far as we know, yeah.

Starting point is 00:58:49 Yeah, as far as we know. As far as we know, can't prove it. Is there anything off limits for you guys? Or what's that editorial process like? I even hate to say editorial, but there is a version of that. Yeah, well we won't be too mean to Dave Ramsey, that's our number one.

Starting point is 00:59:03 We like that. We like that. That's our number one rule. We like that. We like that. That's our number one rule. Uh huh. No, I- Use him for clicks and laughs, but that's enough. Just clicks and laughs, all friendly stuff.

Starting point is 00:59:10 But no, I mean, I don't think there's any topic that's off limits for the satirist. And honestly, that's why a lot of left-leaning comedy these days isn't funny anymore, because they have so many no-fly zones, things that they won't make fun of, that it doesn't surprise you anymore. Yeah. Imagine if they were to make fun of, that it doesn't surprise you anymore. Imagine if they were to make fun of their own worldview, things in their own worldview. It would be shocking because they don't do that. So I think you do need to be able to make fun of yourself.

Starting point is 00:59:32 You do need to be able to make fun of things in the culture. I just think the main guideline that we use is that if we're making fun of a serious topic, like we're trying to call attention to a really heavy topic like abortion or something along those lines, then our jokes are going to be that much more serious. We don't want to make people think that we're making light of those things. Sure. So that's kind of one of the guidelines that we use. But you are an equal opportunity offender.

Starting point is 00:59:56 You go after just about everybody in one way or another. You make fun of Fox or CNN, right or left issues, or you know, conservatives do this, or lefties do this, or whatever. I mean, you get on there, it's fun. Yeah, well, and you have to, like, I think to be a good satirist, you have to first be able to laugh at yourself. You have to be able to make fun of your own. And that's what made the Babylon Bee get so popular so fast, because we were writing the

Starting point is 01:00:22 jokes about the worship leaders who wear the V-necks and all that. Oh yeah, absolutely. And our friend Dave Ramsey here. Yeah. You know, those kind of jokes showed people like, hey, they're not afraid to make fun of themselves, and that kind of gives you the right to then go after the other side a little bit too. All right, so I gotta know this. If you look to the recent past or maybe a hundred years ago as a satirist, who would you have loved to have been in the public scene now where you could have taken a crack at them? Whether that be in the faith-based world, politics, sports, what comes to mind when I ask you that?

Starting point is 01:00:51 Yeah, so we launched right at the end of the Obama administration. And so we were kind of like during the Trump-Clinton years, so we did kind of launch it in the perfect time when it was like you could make a lot of good fun of Trump if you had a good sense of humor about him, and you can make a lot of fun of Hillary, obviously too. So we launched it kind of that perfect time,

Starting point is 01:01:10 but yeah, the last hundred years, I mean, it would have been great to be around in the 80s with Reagan. I mean, the Clinton years, people had so much fun with on SNL, but that's back when SNL used to make fun of both sides. Back when SNL was funny. It was. Right. Back when the late night people would make fun of both sides and you know they would... Back when SNL was funny. It was.

Starting point is 01:01:25 Right. Back when the late night people would make fun of both sides. You know, George W. Bush obviously was great for humor just with his mannerisms. Oh yeah. So we kind of missed out on a lot of that. But at the time there were comedians covering it. You know, there was the SNL and the late nights that were actually doing that stuff. You know, I remember him telling a story when I was interviewing him about strategic.

Starting point is 01:01:41 Yeah. He thought, he actually thought he, he said I thought I did say that and he was talking to the writer at Saturday Night Live, Lauren whatever, or the producer, and Lauren said no George I said that, I said you said that but you never really said that and he owned it. He thought, he said I thought I said it, it was the funniest thing ever and so yeah but that you got to be able to laugh at yourself in the process, you got to be able to enjoy that ride. No question about it. So how do you determine, you guys put content on almost all the major platforms, from podcasts to posts on Facebook,

Starting point is 01:02:16 posts, I guess you're banned from Facebook? No? Okay. Not banned from Facebook. Okay. All right. But are you banned from anything right now? We got banned from TikTok, which is a good thing in some ways. Cause then you don't have to be on TikTok. But I think we got let back on, so I don't know if we're actually banned from anything right now. What got you banned from TikTok? You can't joke about anything on TikTok.

Starting point is 01:02:40 We'll do jokes about, the tamest joke you can imagine, and they'll say, community standards. Politically sensitive. Politically sensitive. You know what's crazy about that is they won't let you make fun of anything, but they'll let kids go on and say stupid crap about time blindness and how she's mad at her boss. This is the latest rage. Time? Oh, this will make Dave's head explode. I'll have to tell him during the commercial break. He can't handle it on the air. It's too much. but they'll let kids rage yeah but you can't make a joke. Yeah well that's part of the danger of social media and algorithms who's controlling the algorithm and controlling what we see we already know

Starting point is 01:03:13 that with TikTok you know they they change the algorithm based on who you are if you're in America if you're in China yeah the algorithm is different based on what's in the culture. So how do you guys with all those different platforms determine which piece of content worked? I mean there are some social media platforms where a certain joke will hit a little bit better. Like for a long time Twitter was kind of the

Starting point is 01:03:34 political space where politics jokes did well. Yeah. You're a big hit on Facebook and Instagram for us. I love it. That's good. Okay. Good. So yeah it just depends on the audience and where they are. Well we're just here to serve I'm it. That's good. Okay. Good. So yeah, it just depends on the audience and where they are. Well, we're just here to serve, I'm saying. Dave, you're huge on the gram.

Starting point is 01:03:50 You're huge on the gram, as the kids say. That's it. Huge on the B, baby. That's it. That's what I'm saying. Babylon B, Kyle Mann. Thanks for stopping by, brother. We love your work.

Starting point is 01:04:00 It's a lot of fun. You guys, if you haven't followed it, jump in and follow. You'll get a laugh and you might get offended and that'll be good for you, too Just laugh your way through it. You got to love it the Babylon B. Check it out. This is the Ramsey show You spent years trying to get everything just right for your family. Now you need an easy way to make sure your important financial documents are as organized as the rest of your house. Well, good news. KnockBox, that's N-OK Box, as in Next of Kin Box, is a complete system that helps you

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Starting point is 01:05:50 podcast, just click the link in the description. Ken Coleman Ramsey personality is my co-host today. Today's Ramsey Show Question of the Day is sponsored by WhyRefi. When you're trapped in a maze of defaulted private student loan debt. It's hard to find your way out, but YREFY can offer you a lifeline with custom refinancing based on your ability to pay and a lump sum payoff option you could qualify for after 24 months. Go to yrefi.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey might not be in all states. Today's question comes from Nicky in Kansas. My husband has been at his current job for over five years. He has received yearly inflationary raises.

Starting point is 01:06:58 A new manager position was recently created and my husband considered applying for it. But before he could, it was given to another employee that has no previous experience in the role. This new manager now repeatedly asked my husband for advice and wants him to work extra hours and to cover his lack of competence. I think it's time for him to find a new job, but he wants to make it work here. His annual review is coming up. Should he mention the situation and bring up needing increased compensation or a path to growth.

Starting point is 01:07:26 Well Nikki, you know, when somebody has done me wrong, I found, Dave, that my wife Stacey has always taken it worse. I don't know if Sharon's that way or not, but it feels like this situation where your husband's griped a little bit about this, Nikki, and you've gotten really upset about it. And I would listen to your husband here. He wants to make it work. And based on the facts you've given us, he never raised his hand for the job. And because he didn't raise his hand, whoever hired this other employee is not

Starting point is 01:07:56 on the on the line for that because they can't read minds. So in this situation, I always tell people to never ask directly for a raise. I teach to talk about a growth plan after you talk about a desire to grow. In other words, I think in his annual review, he needs to sit down and say, hey, listen, I was thinking about raising my hand for this other position. I didn't.

Starting point is 01:08:21 And that's on me. But what it did show me is that I want more. I want to lead. I want I want more. I want to lead I want to step up. I want to climb here at company XYZ So do that in in my review whether you got it for me today, but in the future the near future I'd like to meet with you and discuss a growth plan. What tools can I add to my tool belt in other words? skills and Experience and then what are some shortcomings?

Starting point is 01:08:44 What are some areas that may be blind spots for me that I need to be aware of so that I do better and make myself a better employee? And then can we lay that plan out and how do we measure it so that you and I are operating off the same sheet of paper, same sheet of music, and if we measure that, will that lead to opportunity for more responsibility which should come with more compensation? That's the spirit, the posture that you should have so that you do not put your leader on the defensive because many times they are not the sole decision maker in you getting

Starting point is 01:09:21 a promotion in a race. And so the reason I prescribe it that way, Dave, is it allows them to have some ownership in it. They don't feel put on the spot. They don't feel backed into a corner. And then we have an adult, mature, professional conversation about a path forward. The other thing I want you to ask yourself is who is ambitious here you or your husband because a he didn't

Starting point is 01:09:50 raise his hand for this position B his wife wrote us an email not him two indicators he ain't real fired up and so are not as fired up as you are that's correct that's very obvious so I don't want you to want something for him more than he wants it for himself because that's gonna come through when he sits down in his review he needs to be confident competent how can I add value to this organization what do I need to do to make myself more valuable so that I can grow here? Grow meaning grow in responsibility and value that I'm adding and hopefully in compensation someday and that requires a body language a

Starting point is 01:10:40 little swagger Yeah, you got to show some hunger. I think think what they wanna see here is I want to get better, I wanna do more, be more, and that's attractive. And you know, I think that's a discussion. Maybe your husband doesn't want any of that. Maybe you want it. I think it's very possible. So you need to talk that through

Starting point is 01:10:59 before you send him into the lion's cage. Open phones at triple eight, eight two five five,-225. Matthew is in Houston, Texas. Hi Matthew, how are you? Hey guys, thanks for taking my call. Sure, what's up? Hey, so I have a budgeting question. I'm trying to figure out what I should do for an extra $20,000 in income. I'm going to receive three to four times this year from overtime work. Send it to Dave's Bahama Fund.

Starting point is 01:11:29 PO Box. No, I'm kidding. Okay. All right. So you're going to make an extra 80 grand? Yeah. Sweet! Very nice.

Starting point is 01:11:39 Pretty nice. Where are you on the baby steps bro? I'm not sure what baby step exactly. So this whole thing is new to you. Okay that's cool. Okay we teach a process to use all extra money to achieve wealth as fast as possible and we apply it in an order a forced ranking of importance, okay?

Starting point is 01:12:07 And that system is called the baby steps, one baby step at a time and you'll become wealthy. So I'll walk you through them right quick, you ready? Okay. First thing you need to do is save $1,000, I bet you've already done that. Yes. How much money do you have in savings? Just savings I have about 50k. Okay good for you and how much debt do you have not counting your home? None. Good okay baby step one is save a thousand dollars baby step two is to

Starting point is 01:12:38 become debt-free everything but the house. Ding ding check those two boxes. Three is to have an emergency fund of three to six months of expenses If we call that fifty thousand that emergency fund you're there three baby step four is start putting fifteen percent of your income Towards retirement not more not less in 401ks and Roth IRAs. Are you doing that? Yeah, I'm not seeing them out. It's more like 25 percent at the moment. moment okay baby step five is kids college do you have kids all right now I'm single no that's easy we skipped that one baby step six is pay off your house early how much do you own your home yeah I owe 200 on my home and right

Starting point is 01:13:24 now I'm putting an extra $400 a month towards the principal. Okay, and what do you make? What's your total income, sir? Well, depending what this OT should be close to about $200 this year. Okay, and you're single and you have no debt payments. If I woke up in your shoes, what would I do following those steps I just gave you that I've taught 10 million people? I would tell you to reduce your 401k to 15% not maxed out and I want you to take everything you can squeeze out of your monthly budget including this bonuses that are coming in and throw it at the mortgage let's pay this house off in two years okay yeah that's kind of what I've been

Starting point is 01:14:11 leaning towards too I don't like having it hang over my head but I was also wondering if I should consider a side brokerage account or after the house is paid off okay so after the house yeah here's why Okay, so after the house. Yeah, here's why. Here's why. Okay. This is I did not I don't want it hanging over my head There's actual data. Okay. We did the largest study of millionaires in North America ever done 10,167 of them Two primary things caused them to have the first one to ten million dollars of net worth investing steadily into their 401k and paying their home off they and paying the home off is a

Starting point is 01:14:52 big part of it by the way so a paid for householder you I'm 26 and the house is worth what probably about 260 okay so when the house gets paid off by the time it's paid off somewhere around 34 years old, 33 years old, you're gonna have a net worth of over a million dollars at the track you're on right now. So way to go dude! You're killing it, proud of you. Hang on, I'm gonna send you a copy of the book Baby Steps Millionaires. It's my latest number one bestseller and it'll show you exactly the stuff I'm talking about, why, when and where and it'll help you dial this in.

Starting point is 01:15:31 You are a stud. Keep it up man. This is The Ramsey Show. Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. But thankfully, you don't have to dread filing when you've got Ramsey Smart Tax. It comes packed with everything you need to file online before the big deadline. That means all major federal forms and deductions are covered with no hidden fees. Plus, with Ramsey SmartTax, you can save up to 70% compared to other tax software out there. It's a no-brainer. Just go to ramsysolutions.com slash smart tax and see how simple tax filing can be. That's ramsysolutions.com slash smart tax.

Starting point is 01:16:47 Ken Coleman, Ramsey personality is my cohost today. Thank you for joining us America. We're so glad you're here. Open phones at 888-825-5225. Janet is in Boise, Idaho. Hi Janet, welcome to the Ramsey Show. Hey Ken and Dave, it's a pleasure. Ours too, how can we help? Yeah, so I'm calling today just to see how we, as we,

Starting point is 01:17:07 me and my husband can get ahead of our bills. It seems like every single month we pay our bills three weeks after the due date and then a week later they're due again. So we've tried, you know, budgeting and just trying to get ahead and we just can't seem to get that curve. So we're just calling to see what tips and tricks you can provide for us. What's your household income? It's about $75,000 in growth.

Starting point is 01:17:35 Okay. And how much debt do you have not counting your house? $39,000. On what? On student loans of 24,000, 5,000 in credit cards and 9,000 or 10,000 on RV travel trailer. On a trailer. Okay and you make 75k a year. Okay. All right. Um, all right. So where do you think your money's going? Well, I know that it was going into a lot of eating out. Um, I actually just got my husband on board about two months ago to do like the baby steps. I've been doing it probably by myself for like a whole year. Um, ever since. And it seems like actually we've been on this momentum of just being behind for like the last year and we're just sick of it.

Starting point is 01:18:30 I'm tired of handling it so I had him stepping in on the finances as well as just really you know being careful where our money is going and so you know I've tried for the last two months we've just been you know paying every single week because we get two months, we've just been, you know, paying everything a week, cause we get paid every week, so that's kinda helpful. Okay, so if I sat down with you and your husband, with a yellow pad at the kitchen table, and I said, okay, this is what you have coming in this week, let's map out where every one of those dollars is going,

Starting point is 01:18:59 this is what you have coming in the next week, let's map out where every one of those dollars is going, let's map out, you should have enough with the numbers you gave me. We should. Yeah, we should. But you're not doing that. Right. There it is. Okay. So you need to sit down and you can jump on every dollar, but the number one, the first thing is the two of you have to do this together, not turn it over to him because he can do it and you can't do it. That's not true.

Starting point is 01:19:27 Okay? Both of you together need to do this because what's going to have to happen is you're going to have to decide not to do a bunch of stuff you're doing now that doesn't matter as much as getting in control matters. I want to get in control more than I want to go out to eat. I want to get out of debt and have a life more than I want to go on vacation I want to get in control more than I like this travel trailer I want to get in control more than and I'm sick and tired of living stress to stress to stress to stress to stress

Starting point is 01:19:56 with no hope feeling like a rat in a freaking wheel and when the both of you When both of you are saying that and then you put numbers to that and you say, okay This week on Friday, we get a check for X the following Thursday We get a check for Y the following Saturday We get a check for Z and you write that down and you plan out every one of those dollars and where every one of them Are going because the water bill is due on the second week the house payments due on the first week the student loan payments due in the third week and we're going to figure out what's coming out

Starting point is 01:20:30 we're going to take this much for food this much for food this much for food in the four different weeks and we're going to allocate every one of those bills to a certain week and some of them across weeks so that we have enough money to take care of them and every dollar has an assignment on paper on purpose before the month begins we agree on it and spit shake and pinky swear and then we don't do anything else with money except what we freaking wrote down right and it seems like we've been doing that for the last two months but we can't catch that curve.

Starting point is 01:21:05 We can't get out of this moment. So you write it all down and you don't have enough? No, we do have enough, but it seems like it's gone every single week. Now, if you wrote it down to have enough, and then you did something else other than what you wrote down. Well, I guess where we're struggling is just like every time we do try to we pay we get our bill every single you know whatever a month we pay it once a week in it but we have so many little ones it seems like we just don't know where they're not all written

Starting point is 01:21:37 down. Yeah, we need to prioritize them better. Every one of them on paper, on purpose, in a certain week. This is a week one bill, this is a week four bill, this is a week two bill. Different bills have different weeks and they all go within the income of that week. And then when the check comes in, the check is already spent. So you can't do anything except what you wrote down. You are not managing to the budget. You're writing it out as a hypothetical and then going doing what you used to do. And you're not focusing on it. But listen, Jen, I'll tell you how.

Starting point is 01:22:15 You've got to actually... That'll get you ahead. That's what I told you. Yeah. You won't write down not getting ahead. You'll get ahead as soon as you do that. You've got room in this budget. Yeah. You're disorganized and chaotic. Yeah. And when you give every single, if I paid you a hundred thousand dollars a year to pay these bills

Starting point is 01:22:36 exactly on time and you had no emotional tie to them whatsoever and you would look at this family, this distant family over in Boise, and tell them to quit going to freaking restaurants I don't care how tired you are no whining allowed you're gonna pay the freaking bill on time if I told you to do that you could do it for someone else right it's because it's not right it's sixth grade math you can do this so you have got to get very detailed, very intentional, and then live the detail. Don't write it all down and then go do what you used to do. And so, well, I just, I didn't feel like cooking tonight. I don't give a crap. Go home and get some leftovers out of the dead gum refrigerator. That's how you do it.

Starting point is 01:23:24 You can't, I mean, we all have that. You just got to talk to your whiny self and say, no whiny self. I've done that myself. I mean, Sharon, I've done it to each other. We know what it feels like. But you have to go, I want control more than I feel tired tonight. You know, and that's the biggest thing. That's the phrase that comes out of everybody's mouth by the way before they go out to eat or before they hit the fast food and get dog food at Taco Bell you know or whatever and so it's just it's horrible horrible value it's horrible nutrition and it's out of control spending and so it's just yeah so you gotta write it down in get on every dollar download the app

Starting point is 01:24:07 And I'll tell you what I'll give you the upgrade I'll give you the premium every dollar where it ties to your bank And we'll get you started on that Janet because what y'all desperately need is a detailed budget And here's how you do a budget folks you give every single penny a name Every bill has a week allocated. In every dollar it's called paycheck planning. And you plan out each paycheck for the month. And you and your spouse both look at it.

Starting point is 01:24:35 Every dollar is assigned to saving, to giving, or to a bill. Period. Every single dollar. There is no missile. There is no, well 50% of my budget is non-allocated. Bull crap! Allocate every dime in every dollar on the paycheck planning. Every dollar has a name before the month begins. August is coming. Where's your August money gonna be? It's gonna freakin disappear if you don't tell it what to do. It will leave and go to people's houses who tell it what to do. And then you'll say stuff like the

Starting point is 01:25:12 poor get poorer and the rich get richer. Yes they do because the rich tell their money what to do. That's how this works. And so you gotta get on top of this stuff and lean into it. Every dollar has an assignment. You stick to it, you agree on it with your spouse and you do not spend a dime unless it's on that page, on that EveryDollar app.

Starting point is 01:25:34 If it's not on there and it comes up and it's a surprise and you forgot it, you gotta take something else off because if you put something on there and you already spent it all, now you're in overdraft and now it doesn't work and I can't seem to get caught up well you're not getting caught because you're not living your plan do the plan live the plan write the plan live the plan do the plan live the plan live the plan and it's your plan by the way you decide where it's going to go but i'm telling you what i'm doing i'm not going out to eat i'm not going on

Starting point is 01:26:02 vacation i'm selling a stupid travel trailer. Everything else is for sale. So much the kids think they're next. We're gonna take extra jobs and we're getting control because I'm tired of being stressed out. That's what I'm doing if I'm in your shoes and I did it by the way. This is the Ramsey Show.

Starting point is 01:26:21 Hey, it's Ken. If you like what you heard in this episode and wanna know more about getting started on the Ramsey Baby steps, go to ramsysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation. Again, that's ramsysolutions.com and click Get Started. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right?

Starting point is 01:26:48 All you gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Ba-da-bing, ba-da-boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.

The Ramsey Show - How The Baby Steps Protect You From Financial Uncertainty

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