The Ramsey Show - Life Is Too Short To Choose Money Over Happiness

Episode Date: September 11, 2024

📱Watch the full episode for free in the Ramsey Network app. Rachel Cruze & Jade Warshaw answer your questions and discuss: "My employer told me I'm about to be laid off..." "Pick a Side: How should we buy a truck?" "How do I convince my dad to sell his Mercedes?" "Should I move states to leave a toxic work environment?" Budget Breakdown with Natalie, Tips to lower Insurance rates for home and auto homes/cars this year. Support Our Sponsors: NetSuite: Free KPI checklist, visit netsuite.com/Ramsey BetterHelp: betterhelp.com/Delony to get 10% off your first month  Zander Insurance: Go to zander.com or call 800-356-4282 for a fast and easy quote today. Churchill Mortgage: Get started at ChurchillMortgage.com Next Steps 🏠 Find a Trusted Real Estate Agent 🏘️ Free Tools & Resources to Reach Your Home Goals 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! ☂️ Get the right insurance without breaking the bank. 🚢 The Live Like No One Else Cruise is booking fast!  🏆 Set and actually reach your goals with the NEW 2025 Ramsey Goal Planner! Hurry—They sell out every year! 💵 Start your free budget today. Download the EveryDollar app! 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

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 amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and bestselling love, and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend and bestselling author, Jade Warshaw. And we're here to answer your questions about life, money, relationships, career, anything and everything. We are here for you. So give us a call at 888-825-5225. All right, up first, we have Charles in Tulsa, Oklahoma. Hi, Charles. Welcome to the show.

Hey, thanks for having me. Absolutely. How can we help? Yeah, I was just recently notified that my company plans on writing me off in the near term. Sorry. I'm trying to write down a long-term financial plan and I'm writing out my assets. And I'm just kind of looking at what I have down and the vast majority of my stuff is not liquid. I mean, it's either a retirement account or it's equity in my home or whatever. And I'm trying, if it came down to it and I needed to access that money, what would be the best way to go about doing that?

Okay. So you don't have any savings right now. Anything liquid is what you're saying. Because if you know ahead of time, because my question is three months of savings okay great well i mean this may feel pollyanna but you're not laid off now you know you're going to be in the near term what does that mean does that mean 30 days three months six months they couldn't give me an exact date um but they said most likely jan. My manager was kind of doing me like a really solid and he wasn't really supposed to tell me this information.

If you think insider. Insider. So I would make it a goal not to pull money out of your house equity-wise, not to pull it out of retirement because equity wise not to pull it out of retirement because you're going to get dinged with penalties and taxes um because i mean it's between yeah you have four months to continue to save and look for a new job right i mean so i mean in a perfect world yeah the goal is to do that and i'm just trying to do last-ditch efforts yeah i'm trying to write down a plan i feel like you have to focus i think

you're focusing on the wrong part you're focusing on what do i have to depend on if i don't get the job as opposed to focusing on what will i do to get the job because if i'm you i'm taking those other especially the retirement the how i'm taking that off the table like it's not even an option so i feel like you've got to go into this pretending as though that money doesn't even exist. Because if you go into it with even like just a piece of that in your brain as an option, then when the time comes, like let's say the time does come and it's getting close to the wire, you're going to be like, well, at least I have this money here. And yeah, it's dangerous. Yeah. I think, I mean, this is the extreme stance we even take, Charles, is that we say not to pull money out of retirement

unless it's to avoid a bankruptcy or a foreclosure. So, I mean, yeah. So I, to Jade's point, I would act like it's not even there. So financially, Charles, how are you? Are you living paycheck to paycheck? Do you have three months of savings, which is big. So, yeah, it sounds like you're in a good spot. Well, yeah, my original goal was to get out of,

because I started listening to the show earlier this year, and my goal was to get out of debt this year. And the only thing I had on my card was my car payment. And I took a radical stance stance and I sold my car. Good for you. And I traded it in for a car that has 300,000 miles on it. So I'm debt free with three months of savings. Cool.

So if anything, my... And what kind of line of work are you in? Yeah, I'm in accounting. Okay. Listen, you're going to land on your feet, no problem. Yeah, I think you're, I mean, I appreciate the due diligence of the plan and everything, but I would encourage you, Charles, I think you're in a better spot than you think you are. I mean, you have no debt.

You have three months of savings. If I were you, between now and then, I would just be stockpiling cash. I would get that up to a six-month emergency fund just in case. And then as an accountant, I mean, you'll have plenty of opportunities to find a job. And then when you plug into a great job and you have too much savings, maybe you could say, okay, I'm gonna take some of that, maybe put more towards my retirement. But maybe between now and then, focus on just stockpiling cash. Are you able like legally or with the stipulations of your job, are you able to start kind of creating a book of business on the side so that you kind of have that as a bridge? I do corporate accounting, so not specifically client stuff like that.

Well, I would start networking too, Charles, right? Between now and then. I mean, talking to companies that are looking for someone. Yeah, nothing's stopping you from talking. Having coffee. No, no. I was told like two hours ago, so I'm trying to do... I started sitting out resumes.

Okay, that's fair. You're still writing in your journal. You're still trying to make heads or tails of it yeah I'm I got like a bunch of stuff for now and then I'm just trying to create a plan of action and good are you married figure out what to do next I know I have a eight-year-old son now okay okay yeah yeah so from from all that I mean yeah if I were you I would just be saving money I'd be looking for another job and if they're gonna lay you off and you find a great opportunity, then it's time to say, okay, that door is shut and I'm going to walk into something else. I mean,

in that sense, that's not a selfish thing or you're not leaving them high and dry. You're taking care of yourself in that situation too. Right, right, right. Exactly. So great. Yeah. I don't like if I leave early, like it is what it is, you know? That's right. Yeah. If you're going to be laid off, for sure. I'm like, yeah. Well, thanks for the call, Charles.

I hope that's helpful. Yeah, and I appreciate that he called us two hours after he found out. Because there is probably a level of, like, panic and, oh, my gosh, what he was doing when he called us was, like, getting all my ducks in a row, which makes more sense that he's, like, already going to, okay, what if I run out of money? But when you let the drama settle and the emotion settle, it is amazing how you can, and he's put himself in an incredible position, right? I mean, this is a totally different conversation. If he has no savings,

has a car payment, has, you know, is living paycheck to paycheck, then there's going to be a whole other level of, hey, there's going to be more pain to this. Absolutely. But that's one reason you do all of this, you guys, is to set yourself up for the unexpected. We always say the emergency fund is there. After you are debt-free and you have a fully funded emergency fund of three to six months of expenses, which is what Charles has,

that it takes a crisis and turns it into an inconvenience. That's right. Hey, did he say it was his leader who let him in, or was it just somebody he worked with? I think he said his leader. I was going to say, that's probably another piece of this is just to make sure it's accurate information and not hearsay. Office rumor. Yeah, because that can happen as well.

You jump off this train that wasn't even going to crash. Because of what people are saying at the water cooler. But I think he did say it was his leader. Yes. I think we're getting nods um but again jade i think too that that padding of planning is great of what he was talking about but getting yourself in that position that when life happens because it's not if it's when and it may not be a job layoff which i feel like we're hearing more and more of i don't know i feel like we're getting more calls of that. But, you know, the health of one of your kids or family members, I mean, stuff is going to come up.

And to put yourself in a position, not that money, money does not make you immune to life, right? But it does give a buffer when those hard life events happen. It can soften the blow. It can. Absolutely. Truly. So great.

Well, Charles, again, thanks for the call. This is The Ramsey Show. happen it can soften the blow it can absolutely yeah really so great well charles again thanks for the call this is the ramsey show what does the future hold for business ask nine experts and you'll get 10 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 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 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. Well, Jade, the Live Like No One Else cruise is 90% sold out. So the cabins are booked.

The ship is getting full. We're going to set sail in March. You know, we were just talking March It still seems like a far Way away a little bit Yeah But with kids

And school calendars We've already like We've started talking about Gosh yeah You got a plan Yeah you do You do So even if it feels far

You guys It will be here before You know it So we are doing a Live like no one else cruise This is if you're on baby steps Four, five, six, or seven. We want you to come celebrate it.

We talk about living like no one else, so later you can live and give like no one else. So we're going to stop at Turks and Caicos, St. Thomas, Puerto Rico, and the Bahamas. And no passport is needed, so don't worry about that. Just come on aboard, and we are all going to be there, all the Ramsey personalities and some great guests. And it's a seven-day cruise, March 22nd through the 29th, 2025.

And again, you don't want to miss this unbelievable, incredible vacation. It's going to be so fun. So that's in March. You can go to RamseySolutions.com slash cruise to put a deposit down and book your room. Love it. All right, up next we have Richard and Maria from Tacoma, Washington. Hey, guys.

Welcome to the show. Hi, how are you guys? We're doing great. How are you all? Pretty good. Good. It's fun having both of you. We usually have a single caller, so I'm glad we have two.

Are you guys, what's going on? Are you guys married? What's happening? This means debate. I know it. Does it? Yes, we have two. Are you guys, what's going on? Are you guys married? What's happening? This means debate. I know it. Does it? Yes, we are married. All right.

So how can we help? So we need to get a truck because we'll be moving to upstate New York within the year. So we need a vehicle that can handle the snow. So we both have agreed we want to buy a used around thirty thousand dollar truck okay we differ on how we want to buy that truck okay so we have we have fifty thousand dollars in savings right now not including our IRAs and 401ks and then so she wants to buy the vehicle outright and then I want to use our uh we both have pretty good credit and then I want to use a sizable down payment to try to get our APR under 4.6 percent so that we have more money in our savings.

Okay. So you have more money in your savings is why you want to do your way. Maria, why do you want to just pay for it outright? I don't want to have any debt or any car payments. And I would just like to buy it cash and not worry about it anymore. All right. I have a question. What portion of the 50,000

would you consider to be your three to six months of expenses that that's the other 20k that's why we set the uh mark at 30k for the truck so 20k would cover your emergency fund and then 30k okay well i mean richard you called the ramsey show so i think you know what we're gonna say uh i know yes i know uh yeah so i mean i understand richard the mathematical side right some people well not with car payments it's the one part of i mean i understand him wanting to have the savings more savings yes yes but realizing that, Richard, that you're going to be paying four to five percent on an asset that's going down in value where you could have that possibly invested even in just an index fund making 10 to 12 percent. Your money could be working for you way more. And just for fun, you said you'd want to put down a decent down payment. What,

what were you thinking you would put down on the $30,000 value of the car okay so $15,000 so then let's let me see if I can make you feel better about this so what's you guys's income uh we make what will it be around $100,000 okay and so how long without a car payment how long do you think it could take you to save up that additional 15K? Because in your mind, that's what you'd be parting with is $15,000. That was the part that made you feel uncomfortable, right? Otherwise, you would have been willing to put the full down payment, like pay the thing in full. So how long could you save up? How quickly could you save up $15,000 with no car payment? Probably like five or six months yeah so that's i mean we're talking about

something that is almost less than half a year in order for you to be completely free for you not to be investing in to rachel's point a a depreciating item i'm not even going to call it an asset because it's going down in value so i feel like that I feel like we made a good case. Yeah, that makes sense. Are you convinced, Richard? Yeah, I am. You know, what I think is hard though, I, cause again, when we talk about money, naturally the math is going to come in, people's emotions come into all of it. So it all, that, that all makes sense. But the part that you just can't calculate though, Richard, is, is this level of not having risk of having autonomy completely over your life and maria's probably thinking too right what like you know

god forbid something happens who knows um there's no risk at all right we just talked to a caller that's about to be laid off and he has no debt he actually sold his car to get out of car payments has an emergency fund and then you know that that life change for him is going to be very small impact wise financially than the opposite so I know you guys have savings and you're probably thinking well we could just cover it you know if something happens but there's still a level of risk and the other part of just of being owned I mean honestly I'm like having Toyota Motor Company having a part of your paycheck every single month. There is something emotional there that can't go into a spreadsheet.

And we had Dr. Arthur Brooks on the show a few weeks ago, and he talked about the science scientifically what the brain does when you have debts. There is a level that you're you know, you're not safe. Like there is something there in eight that people don't talk about. So there is a freedom here, Richard, that again, maybe a little painful parting with the cash, but I would encourage you guys, this is why you did that. This is why you saved,

is to be able to use your money and not use other people's money. And then there's a practicality of, I mean, we're gonna talk about this later in the show, but insurance costs are going up and to be able to enter into a car with no car payment, it frees you up to be able to deal with those fluctuating costs that have to do with just life in general, whether it be the cost of your insurance going up or the cost of groceries going up. Like there's a lot going on. And so to be able to clear out as much variable as possible in your life, it's just for me, it's worth it.

Yeah, absolutely. Mariaia how are you feeling i'm feeling good okay so she's like i won so how does this work though because we talk to usually just one of the spouses calls in our show and usually it's usually it's maria that calls in and it's like hey i want to pay cash for this car my husband doesn't want to so we're usually talking to one of the spouses and we talk about, you know, the idea of being aligned values wise with your money. So I'm curious for you guys, if you will share, you don't have to, but you know, what is, what does that conversation look like for you all? Is it, is it Richard, you saying, all right, Maria, I hear you. I hear Jade and Rachel. I'm going to just make the decision or what, what does those conversations look like when you get off the phone, do you think?

The conversations are honestly very good because the only thing we want is to just make the best choice for us. And we just want to save the most money. And I totally agreed with him. And I'm like, you know, we can do it your way or we can do it my way. It's just the reason I want it my way is just to not have that feeling, oh, we have debt. And he feels the same way, too. But, you know, with his reasoning, it was also could we get a little bit more money in our savings doing it my way? And I'm okay with doing it his way.

But, you know, I also just had my idea. And I think our talks about money are great we pretty much agree on everything did you guys have debt prior to this that you paid off together no oh okay so you've been living a debt-free lifestyle yes oh okay so Richard you were like we could just see what it might feel like you're like I'm willing to dip a toe in the water that's funny that's funny. That's funny. See how the other side lives. See how the other, they live with stress and payments, Richard.

Yes, and I'm terrified to live that way. And I know I would be insanely stressed. But I also know that we've got about 10 months until we move and need that vehicle. So I was hoping in that 10 months we would save up, you know, solely have a car savings. 100%. Well, based off the numbers that Richard gave, as quickly as you could save up $15,000, I think that that's actually pretty feasible. So very good. Yeah, you guys could continue to save and make the cushion even more. Yeah, that's a great point because it's in 10 months.

Well, you guys are awesome. I appreciate you both calling in and talking through it because, you know, there's a spirit of humility there too, right? Of just saying, hey, we want to be on the same team and we want to do this well. We have the end goal is the same. How we get there might start to kind of weave a little bit, but hearing each other I think is great.

So thanks for the call. This is The Ramsey Show. This show is sponsored by BetterHelp. This is the season for Halloween. It's October. We're wearing costumes and we're wearing masks. So if you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be 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 Rachel Cruz hosting with Jade Warshaw. And you can give us a call at 888-825-5225. We are answering your questions about life and money. Up next in San Francisco, we have Maria joining us. Hey, Maria. Hi, ladies. Thank you so much for taking my call. I'm so excited to be on the Ramsey show. Oh, I'm so glad you called. How can we help? Okay, so I'm 50 years old, and I have only $100,000 in my retirement, and I own two investment properties. I recently adopted my daughter, who's two now, and my priorities have changed.

Yes, Congratulations. Thank you very much. So I want to know if I should be just selling my rental properties, what to do about, um, increasing my retirement. I have $15,000 in credit card debt, um, which I am in the process already. I have three credit cards. I already paid one off. Okay, good job. Yeah, and yeah, so I need your help. I need you to tell me if I should just get rid of these properties. How many is it? There's two. So one is just a simple duplex, and the other one is two flat plus a basement apartment. How much do you owe on each and how much are they worth? Could you sell them for?

Yeah. So the one, the duplex is worth $144,000 and the other one is worth, I'm sorry, I owe $144,000 and the other one I owe $396,000. Okay. What could you, what could you get them for? The one that's $144,000, I could get $242,000, um, which I haven't earned much equity on it. I bought it for $180,000. It's ridiculous. And then the other one, which I recently bought three years ago, that I can get $550,000. Okay. All right. Okay, good.

So yeah, $250,000 pretty much you could cash out before taxes and fees and everything. Okay, and then your retirement, you have $100,000. How much are you making a year in your job? I make between a hundred to 120. Um, I, yeah, I work for the school district, so I make a hundred thousand during the school year. And then over the summer I can, um, work privately. So I make about a $20,000 more. That's so great. And you have the, you have the credit card debt of 15,000, any other debt or is it just that? Um, just that I don't have student loans. I don't have car. The one thing that, the one thing that I do have is, so I'm in California right now and I'm living in my parents' home, but I pay the mortgage. Um, they helped me out by buying this house back in like 2013 because I was, I made the big, the big mistake that you guys always say not to do is buy a house with a fiance before he was my husband. That was a, that was a bad decision. And so my credit got hit, so I couldn't afford

anything. So my parents said, you know what, instead of renting, you want to just buy a house and you pay the mortgage. So I've been doing that and their plan is to yeah for me to this is my house like to own the home um so they would transfer the loan the title whatever over to me and the equity is mine okay when will that happen we we I mean it could we couldn't do that right away um it's just a matter of finding out what the process is and if that's even doable with the type of loan that it is okay um do you have any liquid savings i have uh another problem i have two thousand dollars in my bank account right now i had i had um twenty thousand dollars but I used that money one to pay off

the last credit card, the one credit card. That's good. That's right. Uh-huh. And then the other, the rest of it was, I went to Chicago where I'm originally from and I was not working. So I lived off that to pay. Yeah. So now I only have $2,000. Okay. So the good news is you don't have a ton of consumer debt. It's the $15,000. You could probably knock that out fairly quickly with your income. And then you've got these assets, about $250,000 of equity if you were to offload them.

So you've got options here. And then the next part of the equation is just assuming everything continued going as it is now, right? You're 50 years old. Let's say you plan to retire at 65. You've got $100,000 saved in retirement now. If you just kept contributing, once you clear out this credit card debt, you save up three to six months of expenses. If you just contribute 15%, $1,500 a month for the next 15 years, you're going to retire with over a million dollars.

So that's as it sits now, which, and as a teacher, will you have a pension? Is there other- That's a good question, yeah. Yeah, so I'm a therapist and yes, I only have a, so I'm currently working through an agency and they don't offer a pension, but I was working through the district directly in the past.

So I do have somewhat of a pension in California and in Illinois, but that only adds up to like 60,000 right now. Okay. Well, that's great. 60,000 a year is what it'll end up being. No, that's 60,000 that's there. Yeah. Just a lump sum.

Oh, I hear you. Yeah. When do you have, okay. Do you have access to it? Like when do you, if it's just a lump sum, when do you get access to it? And is it something that you could take and reinvest until you're ready for it? I don't know if I could take it and reinvest. I know I have access to it once I retire, but I don't know if I could pull it now and put it. Is it growing well?

Do you know what percentage it's growing year after year? I don't know that. Those are the questions that I need to ask. No, no, you're great. And I think, yeah, I would find that out. The more information you have, Maria, around the situation, even Jade just plugging in, you know, your info for the next 15 years and an investment calculator,

like, oh, a million dollars. Okay, this is feeling, this is feeling better, right? So what I would do if I were you, I would sell the two properties. I would too. I mean, at this point, I think, you know,

being in real estate and all of that, it's not paid for. And I think it's going to cause more stress. And I think you need the money. I mean, I think at 50 years think, you know, being in real estate and all of that, it's not paid for. And I think it's going to cause more stress. And I think you need the money. I mean, I think at 50 years old, you're going to be able to do some really great things investing wise for your future with that money. Did the income you quoted include the profit from the rentals? No.

Okay. How much do you make for those per month? So right now, the one that's the single house, that one, I was making about, let's see, Christine, about $800 a month. The problem with that is that... $800 a month in San Francisco? No, no, no. That's in Chicago. Oh, so these aren't even in your... These are both in Chicago and you're yeah even more reason then I would definitely sell them Maria

definitely I would not be a long-distance landlord with with this bill yeah so um if I were you I would find a great real estate agent you can actually go to ramseysolutions.com slash real estate or slash agent and there's Ramsey trusted agents in that area and you can interview a couple of them check out them and and use one of them because they you know basically do exactly what we teach and they're going to help you through the process but I would sell that I just bought even the one that I just bought like three years ago yeah yeah it's long distance number one and to your own point you could use access to that money because the next step then is I would get with a smart investor pro and if you find out that the deal with the parents house

and all that is going to be a longer than five year play like you could invest this money for the short term and then when you're ready to come back to it that could be the money that helps you have your own property in cash right but wouldn't i get dinged with taxes if i just use the equity from these two properties if i just invest them rather you will pay some capital gains yeah but it's been over a year so so yeah there will be there will be some taxes but there'll be taxes when it sells eventually as well anyway yeah yeah so i would i would offload them i would want my plan one more detail on there. My plan is to be closer to family in Chicago.

So I wanted to buy a home in Chicago, a single family home for my daughter and I. And when the time comes, you can do that. But you're kind of you're projecting really far in the future. And there's nothing to say that you're going to want to live in either one of these properties that you've been renting out for X amount of years. Yeah. I mean, I usually you don't want to move back into something that's been renting out for X amount of years. Yeah. I mean, I... Yeah, usually you don't want to move back into something that's been rented out to families for the last, yeah, five to six years. You're going to want your own thing.

So yeah, Maria, I would sell those. I would use that money, pay off the credit card debt, get a good emergency fund of three to six months of expenses, and then sit down with a smart investor pro and look at your, yeah, look at your income, look at the cash you have and your investing strategy going forward. Because I think that's going to bring you peace knowing that you and your daughter are going to be taken care of, you know, in the next, you know, five to 10 years down the road. To find a Ramsey trusted real estate agent that can help you buy or sell your house the way we teach, visit ramsaysolutions.com slash agent or click the link in the show notes.

Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan if you have one and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and growing your savings. For over 25 years, I've trusted and used Zander Insurance to find the best rates on term life insurance from the top-rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low-cost plans that don't require an exam.

Go to Zander.com or call 800-356-4282. Even if you don't have a cash value policy, if you're one of the 70% of people who have no life insurance or not enough, it's even more important to get this done. 800-356-4282 or Zander.com. The Ramsey Show question of the day is brought to you by WhyRefi. WhyRefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. Now, you guys, private student loans are different than federal student loans like Sallie Mae.

So to learn more about this custom refinancing option and a lump sum payoff option that you can qualify for after 24 months go to yrefi.com slash ramsey that's why the letter y refi.com slash ramsey may not be available in all states okay today's question comes from matthew in oregon he, my wife and I are debt-free except our expensive townhome. We bought it in 2022 with a 30-year term mortgage. Our monthly payment is about $4,200 a month, including escrow and PMI, while our net take-home pay is $8,750 a month. Wow. Our annual gross income is $110,000, which means our housing costs take up about 40% of our income, which limits how much we can invest. We both have the potential for income

growth, but today's high cost of living is challenging, especially with four kids. We're in baby step four, five, and six, but still feel trapped. It's hard to see a finish line of no mortgage payment. Should we stay where we're at and wait for our income to grow or sell our house and move oh this is this is one of those reality moments rachel i think that if you're if you're truly um engaged in what's going on financially in your home these are the moments where it's like it's really tough because um for those of you who don't know here we teach that your payment shouldn't be any more than 25% of your take-home pay. And the reason for that is once it creeps beyond that, especially beyond 30% is you really do start to feel that. And you start to experience what we call being house poor and your blessing,

your blessing on the house now becomes a burden, right? Because you're not able to have the margin to do the things that life calls for I mean in this case it could be anything from child care it could be anything from they're wanting to pay off their mortgage and they don't have any margin yeah well if you're in baby step four you're funding 15 of your income in your retirement so automatically that's taking it you have 45 of your income to live off of that's before food and utilities and everything yeah so it does it starts to dwindle um not always like in the right spots right and so and if you give 10 forget about it that's right

oh yeah that's right now you're down to 35 and for basic living so yeah it's almost that feeling of like we work too hard to feel this broke you know what i mean like we shouldn't feel like this um and it is because 40 of your income is going to housing and so yeah um yeah i mean i i would be looking elsewhere because you say an expensive townhome which i'm assuming is a really nice one um probably in a nice area yeah and so i would be looking for other options you know you may be getting an older home it may not be near the city because that's usually where prices go up the closer you are to the city um so you may be moving out and all of it which i know with four kids i know it's so easier said than done just like oh yeah like get up and move i know that that's like yes could be

changing schools all of this but the quality of your life and going to bed at night and having peace and not stressing and not being you know to this point of like on a like you just feel like oh my gosh i just go to i go to a job and I have no progress in my life. Like that is daunting. That's for the birds. You go, think about how much time you spend at work. You go to work all day, eight hours a day. Some people far more than that. And then you, you feel like you have nothing to show for, you can't enjoy your life. You can't do the things that make you feel like you're making progress in life. Then there's the part of this equation, Rachel, where they do see a way for their income to go up.

Now, there's been times people have called in the show and they're like, hey, I'm at 30 percent of my income, but I know that I have a raise coming up in the next 12 months. Yeah. And if we get that raise, you know, it'll equal out. And so there's a part of that where if they said, hey, we see a place where we're going to get, you know, a 15% increase. Both of us. Both of us. Yeah. And that's going to happen in the next 12 months. Maybe there's a part of this where you can ride it out.

That's right. That's right. But only if that's 100% absolutely going to be true. Yes. Yeah. Don't be on a wish and a prayer of it may be happening. And then you're stuck in the cycle for the next four to five years because that's going to be exhausting.

Yeah. All right. Let's go to will in miami hi will welcome to the show hello how are you doing great how can we help yes so my parent my father bought a car years ago. This is a Mercedes. He's a retiree surgeon, and he now works as a surgical assistant. Here, since all the recession and all the economic problems we've been going through the country, that area of health, he hasn't been able to get a job for the last year. He has some stuff on and off, but he hasn't been able to have a stable job. The payment for this car is $500 a month, $550 plus insurance that rounds up to somewhere between $650 to $700 a month. And because he doesn't have a job right now, it's been really difficult to maintain all the expenses. What's he doing to maintain it?

I mean, right now, all our family is working. We are immigrants and everybody contributes you're paying for your dad's car payment no I'm not I'm just saying that everybody's paying their first share but uh the car right now is one of those crazy expenses. Are you all under the same roof? Yes. Okay. And so explain to Rachel and I kind of how that works. When you say everybody's paying their fair share,

what does that mean? So between my sister and I, our rent is $3,000. My sister and I pay about half of that. Okay. And the rest of the expenses are covered by our parents. Although we didn't start paying until recently, until about six months ago. My sister just graduated from college. I'm still a student. Okay. How old are you, Will? Oh, I'm 28. I'm just a late bloomer student. That's great. I was just curious. That's great.

Okay. So it's just you and your sister. The agreement is we all kind of live under one roof, but together you guys pay for half of the rent and we pay for the other half and everything else. Yes. And so you're concerned that since your dad is not working, how is he affording to pay for this Mercedes or this expensive car that he has? I mean, to be honest, we cannot afford anything right now. Even though we are able to cover the basics, that doesn't cover the credit card debts my parents have.

That's why I believe that the car is one of the things that is taking them down. So the hard... Oh, go ahead, Rachel. Well, so, okay, a couple of things, Will. Where did you guys immigrate from? I'm just curious. Oh, we are originally from Venezuela. Okay, yeahenezuela okay we've been here for eight years we are we became citizens last year okay the only reason i ask is i do find even in the hispanic culture there is this like gathering of family right there is there is more than just the standard american it's like oh

it's you know americans i just feel like we're more independent. And you just, you know, you run, you run on your own track. Where other countries, other cultures, there is more of this like family oriented life. So I'm not saying one is wrong or the other will, but as a 28 year old guy, and I know you want to support your parents and be there for them and all of it for your, own dignity, Will, as a man, emotionally, I do want you to somewhat separate what your parents have chosen with their own lifestyle versus what you're choosing, right? So they've chosen to, or he's chosen to have a Mercedes, okay? That's his choice. You have not done that. The credit cards, I don't know if the credit cards are paying the light bill to keep the house going.

That's one thing. But if it's credit card debt that's coming from your parents that charge their own cards for their own lifestyle, that is their money and their choices. It does get a little bit confusing when you are living under one roof. So I think, well, emotionally, I would detach myself from your parents' choices. And until they start affecting you, which they might soon, Will, there may be a point that you say,

hey, I'm going to have to make a different decision for my life. Yeah. And I may have to go get a job, pause school, and do something different because I'm not going to be taken under because of their bad choices. But here's the thing, Will.

Jade and I joked earlier. We were like, it takes a lot of therapy to realize you can't change people. You cannot change people. So I hope that helps, Will. You're an awesome son, and we wish you the best. Thanks to all the guys in the booth. Jade, thanks always for being a great co-host. Thanks to our live studio audience here in Nashville.

Thank you, America. This is The Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over 7,000 hours of Ramsey shows, this free app is the best place for uninterrupted content and no distractions. Plus, you can search specific questions to get more personalized content in seconds. So, for the days you need some extra motivation, you'll have proven advice at your fingertips. It's time to get serious about your goals

and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show notes to download our free Ramsey Network app today. 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 amazing relationships. I am Rachel Cruz hosting this hour with my good friend and best-selling author, Jade Warshaw,

and we are here to answer your questions. So give us a call at 888-825-5225 we'll be answering your questions about life about money relationships career anything or everything we are here for you america all right up next we have josh in sacramento california hey josh welcome to the show hi thanks for having me taking for part in my calls. Absolutely. Straight to the point. I live in the People's Republic of California. I'm trying to leave this state. What I have a problem with is it's kind of financial and life career as well.

So right now I'm a federal government employee. I am seven years out from retirement or when I'm eligible. My wife is a nurse. She makes really good money in California, and they make her anywhere for $90 an hour my my goal is to one sell my house transfer to a different position and to a different state within the same agency just because I have a very toxic work environment going on right now and I just I need to get out but the problem is is if my wife leaves the state of California she'd go from $90 an hour to $30 an hour, which is a huge financial cut.

She'd also probably lose her 401k as well as that. We did talk about doing foster to adopt in the event that we did move. But my question to you, I guess, is am I just being cutting my nose off the side of my face and just try to deal with it? Knowing the fact that I have seven years left of retirement, my house will be paid off in four years. You sound like you're at the end of your, like, rope. You sound really frustrated. Oh, I am. I'm very frustrated.

Yes, I'm very frustrated. I've wanted to transfer and get out of this state for 17 years of my career. Does your wife want to leave as well? Besides the money? I know she'll take a pay cut, but just in general? Her family's here,

but she realizes how frustrated I am. And like I said, my boss is just utterly horrible right now. And it's been going on for a long time. Oh yeah. Yes, it has. So my question to you is

my being emotionally stupid by wanting to leave just so I can quote unquote have a more happy life to trade one stress for another for financial stress well is it is it California like okay so if you you work for the state it's okay it's it's California the state sucks the high taxes just getting out of everything all right okay you are yeah you you're at your wits you're done you're done um okay so if you were to leave what would you do and where would you go uh i'd basically stay with the same shuttle agency um i would go from what i'm doing now to basically to just a different

function of job function but just to the same pay. Is there a different? I would get it a little bit. It would be a lower cost of living, which would be 13 grand a year. Where? But I'd imagine that, so it'd be from California, possibly to Georgia.

Okay. But I'm wondering if based on the tax rate, well, that's where the position is at for my agency. Have you ever been to Georgia? Okay. Have you ever been? Yes, I have. Okay.

What's your wife think about Georgia? Sections of it she hates. Okay. Because here's the thing, Josh. I mean, I can hear you're frustrated. And I mean, I could only imagine. I mean, I understand it is from like just the state perspective that you're frustrated with. And then on top of that, you have a terrible job.

You go and work somewhere for 40, 50 hours a week in a miserable place. So yeah, you're not in a good, this isn't like a good headspace for Josh. So my question is, you're not the only one in this equation, right? So your wife is going to have as much of an input in this decision too, because I think that there has to be this, you know, I don't know, but if she is not on board, resentment later on in life, you know, moving away from family, going to a place she hates, she's going to end up being you in four years, possibly. I don't know. But that's a warning sign.

It's just like you guys need to be so tight knit on this decision because it's a big deal to move across the country. Yeah. So you guys need to lock arms and like be like we are in this together. The good, the bad, the ugly. We are in this together because I don't want your marriage to be destroyed in the process either. Right. And I want to be able to give her a voice, too.

And her frustrations may not be as deep as yours. And I don't want her. And I and honestly, Josh, the motivation for her. I'm like, I there's a part of me that I'm like i i would hate for her to do it just just to make you happy because because josh is frustrated so we got to go do what josh wants to do right so like there needs to be a level of agreement upon you guys um and i thought plan b too which i know you hate california but is there a different position you could take where you guys live a different job a different opportunity at least to get out guys live a different job a different opportunity

at least to get out of the toxicness of that job and then just have the frustrations with the taxes in california i don't know yeah but if you and your wife agree to move to georgia then make the move you're not no leaving a job seven years away from retirement is not stupid because the work is you're you're in a terrible situation so no that is not stupid to leave that no i listen i i am of the mind that if one spouse is completely unhappy then the neither nobody's happy that's true so i do think that probably a move is good but if she has come out and said i don't really like georgia then georgia's got to be off the table uh you've got to pick a place where both of you are like, yeah,

I feel, yeah, I'm up for that adventure. And I mean, there's 50, I don't want to say 50 States. What is it now? 49.

No, it's 50, but don't the other territories count. Okay. So there's 50 States and then some territories, depending on what history book you look in. Okay. And so there's a lot of options.

Here's what I'm saying. Going back to the conversation about the 401K quickly, what made you say that she'd lose her 401K? So, well, I wouldn't say she'd lose her 401K. What she'd do is she would stop contributing to her 401K. So she'd be able to take it out. Yeah, you just transfer it. You just transfer it.

Right. Okay. I just want to be clear about that. So I guess the issue with me is you know i've only got seven years left my mortgage will be done in four years on my house my wife is like going from 90 dollars an hour to basically 30 if she decides to work if not then it's like it's a huge let me ask let me ask you this is there any world where you're like i is there any world where you're willing to ride this out longer because you're the person who brought up in just seven years, I'll retire.

And in just four years, I'll have my car paid off. So, or I'm sorry, my house paid off. So do you really care about those things? Or do you know what I'm saying? Like, are those things that you're weighing in or are you beyond that? So here's the problem. Emotionally and mentally, I'm just, I am checked out. The problem is, is i don't

want to live life on the emotional aspect i know logically financially it makes more sense to stay however i don't know if i can emotionally and mentally no handle it for you okay yeah mentally and emotionally is going to be because you could be debt free and still be miserable in your job like and you're not saying this is after six months. You've said for years. Seven years. For years you've been upset. Yeah, I thought about most of my career probably about 10.

The last 10 years of my career, it's gotten a little bit. So it's safe to say that you have sacrificed a certain level. Why have you stayed in it, Josh? I'm curious. What was that? Why have you stayed in it for 10 years? The pension and early retirement. Okay.

So this is a good lesson for America, that money does not equate to happiness. There is a level of your life that, as adults, we have to decide to bring a level of peace and to work a crappy, I would say a different word, but we're on a family-friendly show, crappy, crappy situation just to make a paycheck. You guys, it's not worth it. It's not worth it. Life is too short. Life is too short, Josh.

So you and your wife, I would sit down. You guys, yeah, pick a place on the map and say, we're going to transfer. And we may even be in different careers, but we're going to find a level of peace and enjoyment. And we may make less, but people that make less and live within their means and work somewhere, they're happy. So, yeah, you got to, yeah, Josh, y'all got to make some changes for sure. And you should have made them eight years ago, if I'm being honest, not to shame you. That's true. We need to make some decisions here, Josh.

We're rooting for you. Come to Nashville. 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. Hey, good folks. Dr. John Deloney here.

Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what? Ramsey Solutions is hiring. If you're ready to join an amazing team that's all about changing lives and spreading hope, we want to see your application. Right now, we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. Check out all our job postings at ramseysolutions.com slash careers.

That's ramseysolutions.com slash careers. Welcome back to The Ramsey Show. So one of the, I would say, pillars of winning financially that is so key is doing a budget, being intentional with where your money goes, where your income is going, because your income is going to help you live the life that you want. And that includes being debt-free, that includes having savings and investing and spending and giving and all the things, it comes from your income. So being intentional with that is really important. So our app, EveryDollar, helps you do that. And it's fantastic. And we have people, gosh, I mean, millions that are subscribed and that are building budgets every single month.

And we love sometimes to walk through those. And Jade, you do this a lot, even on your social. Yeah, that's right. Yeah, I put out a call a while back and i said hey if you want me to review your budget you know fill out this google doc and so many of you got back to me and it's really been fun to go through budgets and so rachel today one of those budgets that was submitted we actually have natalie on the line uh from chattanooga tenn. So Natalie, you told me, are you there? Yes, I'm here. So you told me it's you and your husband, right? You're a mortgage analyst. No, I'm not. I'm actually a stay-at-home mom. Is anybody a mortgage analyst? No, my husband is a chemist. Oh, wow. Why don't I have that on here? All right. Well, stay at home, mom. A chemist.

Is it right that you make $80,000? Just about that. Yeah. So I want to say his income is about $73,000. And then I make around an extra $6,000 a year through like a fixed side hustle that I'm doing. And then I also have another side hustle on top of that. Cool. Good for you. And so after taxes, after some little bit of investing you're doing and

after insurance, you guys are bringing home around $4,884 a month. That's what you put on your form. Yeah. Yeah, that's correct. Yeah. Just around 4,900. Yeah. That's pretty much what I've calculated. Okay, cool. So with everything that you said you have in your budget which as a matter of fact we can pull it up on the screen here so let's just kind of like go through this budget so everybody can see up at the top that black number $342 that is your margin that's what's left over after we've put in everything that you said you spend money on every single month so just going through here real quick, we see the mortgage here, $1,556, which is a little bit over the 25% that we talk about. Water, internet, all that looks good. Sewer looks good. Groceries, $800. Is it just you and your husband or you have kids as well?

So we've got four kids. Yeah. Wow. The grocery budget is... Listen, that's great. Yeah. you can do it for 800 that's fantastic amazing yeah i do a lot of cooking from scratch and i make bread like all that girl i've really slimmed it down that's great i i find that to be actually very impressive okay so uh transportation 250 on gas phone 140 like this is a bare bones budget i see auto insurance it looks like you've got term life insurance that's really good but then we see that there are three debts here um a student loan which if i click into it the balance is eleven thousand dollars and then you've got this car payment. Yeah, we've shaved the first student loan down

to $8,700. Nice. Yeah, we're checking away at that. Yeah, so we're trying to put like a minimum of $1,000 a month to that first loan. Okay, so that's a great segue. So we see that your margin is $342,000. How are you coming up with this full $1,000? Where's that money coming from? Well, I think when I originally submitted those numbers, we had still had some cell phones that we were paying off. So we've taken care of those. Okay, great. We've got a little extra margin there. And then just through my other side hustle, we try and meet that $1,000 minimum is kind of our goal each month. So we're trying to hit that at least. And then whatever we can make on top of it, we've been just throwing up the debt as well. Okay. So it sounds like, so there's kind of like

four areas that we really look for where people can cut. Like there's more than four, but there's like four key areas that we kind of zone in on when we. Like there's more than four, but there's like four key areas that we kind of zone in on when we're looking at someone's budget. And it feels like you're doing two of the four, which is you're side hustling. Like you're bringing in extra money. We're usually looking for people to bring in

like an extra 800 to a thousand dollars. You're doing that, it sounds like. We're always looking for areas where we can cut costs and your budget is super bare bones. You know, with kids and having an $800 grocery budget I feel like that's a green check as well but then there's two other areas that I am wondering about you did at least when you submitted this you told me that you guys are investing $200 a month so yeah actually we he we stopped investing in his 401k. I finally convinced him.

That's adding to the $1,000 too, probably. Correct. I think it was actually closer to $250 that was coming out of his check every month. We got that extra money as well. We're not currently investing. That's three green checks. The fourth one is your withholding like do you guys get a tax return every year we do yeah and

it's usually a pretty good amount i'm i should probably double check that yeah so the refund is usually pretty pretty good amount a basic way you can look at that is to just see okay what's the refund let's say it's i don't know uh eight thousand dollars or six whatever it is divide it by 12 and then you're like hey that's money that i could have back into my budget every month so if i were to give you homework coming off this call it would be that so that going into you know uh the new year for sure that you guys are having more money in your budget but i love that you made the progress on the student loan because the way I calculated it here, I took a look at your budget. If you could get the amount that you're paying extra on this debt up to $2,000, like if you're paying an extra $2,000, you guys are out of your debt free in less than 24 months, which is... That just sounds

so amazing. I mean, that's great. Because we are hustling over here. I feel it for you. I mean, seriously, yeah. I mean, it's powerful what happens, too, when you actually start living on a plan. How long have you guys been living on a budget and doing every dollar? Yeah, well, so we've been on a budget for forever, but I would say we've been really intentional about paying off the debt since March. Okay. Because we've just had kids

like every year in the last like six years. So that's just really been the focus. And now that we're like, you know, taking a break from like having babies and being pregnant and all that, we're like, all right, let's tackle this debt, you know? So good. Cause I was going to say, when you start living intentionally, like with the budget every single month, you may find, oh yeah, that was money going out there that I forgot about or I forgot about that apple subscription or whatever you know and it could be 20 30 40 dollars here or there but for you guys I mean that makes a significant difference you know for sure yeah and I think that was the issue like once we in March decided

like hey we're gonna do this it was kind of me sitting down with him and saying like I'm really sick and tired of like trying to like pull from savings every month to like me, you know, because there's always that deficit of like, hey, we're overspending. So we need to pull from savings, but then we're not really going anywhere, if that makes sense. So Jade, on the first, but on the first debt, the first student loan, how much is the payment a month? The first student loan, the payment is $184 a month. first student loan the payment is 184 a month okay because that's another great thing too is that's another you know almost 200 freed up that's paid off to throw at the next step too right so like you can count that quote unquote is found income

too yeah our goal is to have this first debt completely paid off by either february or march because you typically get um he gets an annual raise but also a bonus check that comes with that so whatever we get from that is literally just going to pay off that first one uh whatever's left over obviously up until that point and then we'll move on to the next one because you have two more so if I had if I had a piece of homework for you it would be to increase that margin with more side hustles get like yeah if you're doing a thousand now try to increase it by a thousand and if you do that then you're able to pay off that student loan and far far like far exceed your timeline there and then

if you do that it frees up the money like Rachel said and you could pay off the eighteen thousand dollar Chrysler in six months just over six six months, seven months, which is exciting. But I did want to ask you because last time I saw that you submitted this, you had $4,000 in savings and you had $2,000 in single stocks. And so that's also money that has the ability to be liquidated to put towards this. Yeah, I'm not sure where that came from. We just have the emergency fund. So we've just got the $1,000. But no, I don't know if maybe I put an error in there. Oh, okay, okay. We really got no extra cash.

Yeah, I guess that's probably the mortgage analyst, you know, so. Yeah, who knows where he came from. But this is great. Good job, Natalie. I love that. And Jade, you're so great though of walking through it because it's the truth.

When you start living on purpose like that, you start to see the nooks and crannies of your money situation and let it work for you. That's the power of using your income. So great. Thanks for the call, Natalie. This is The Ramsey Show. Motivating your team to work and lead with the same passion you have is one of the toughest things in leadership. But it's crucial if you want to scale your business. Fortunately, Entrez Leadership Summit is the leadership event that will equip you to build a team that fights shoulder to shoulder with you so you can grow like never before. Join us in Denver, Colorado, May 18th through the 21st by going to ramseaysolutions.com slash summit or click the link in the show notes. Welcome back to the Ramsey Show.

We just went over a budget live here last segment. And Jade, you're actually going to be doing a webinar walking people through the every dollar budget, how to budget, what budgeting looks like, how you actually put this into practice day in and day out. Yeah, we're just doing a live training. It's going to be Thursday, September 12th, so tomorrow. And you can get the clarity that you finally need with your money. And we're going through, just like we did with Natalie before the break, we're going through those four areas where you can find money in your budget. because most of us, Rachel, could do with an extra thousand or two thousand dollars in our budget. And it's real money that's waiting for you to find it. Right. So we're going to walk through that budget with you. And here's the

thing. Over one hundred thousand people have registered for these free trainings in the past and they have come away with it with the tools they need to manage their money. And so really now it's your turn to really get involved and um yeah don't wait we answer your questions when we do these webinars where they are live and yeah you know q a will sometimes pull up pull up a question or you can comment and if anything honestly seeing other people i mean it's up to 7 000 people that can be in it live yeah i mean you're seeing everyone comment on the side that's what i love the chat going because it's people from all over and all have a similar goal usually have a similar emotion around it with a lot of you know

fear and shame a lot of people that live paycheck to paycheck their entire life and they're trying to make a change so uh it's really motivating to see other people on the journey so make sure to check it out and they can sign up yeah you can sign up you can go to everydollar.com webinar to sign up and or you can click the link in the description if you're listening on youtube or if you're listening on podcast so that's tomorrow september 12th all right up next we have blake in bowling green kentucky hey blake welcome to the show hey jade hey rachel how y'all doing we're doing great how can we help so to expedite this this story, I bought a farm but come with a house at 17. I paid $60,000 for it and put $20,000 down.

I cash flowed all the renovations, and now my wife and three kids, we all live here, and we've outgrown this house, and we're going to sell it. I would say the house and farm is conservatively worth $350,000. Wow, that's great. And we owe $35,000 on the farm. But the question that I have is my wife has $80,000 in student loans. Do we take some of this money that we're going to use to build another house and buy another farm? Do we take that equity and put it all towards the student loans? Yes. Yes. Yep, I would. Because I wouldn't encourage you guys to go back into home ownership until you're at a point where you have debt paid off

and a fully funded emergency fund, and the equity you're about to get is going to be able to do all of that, plus be able to put some money down on a new build or a new construction loan. Is that the only debt you guys have? Is this $80,000? We made a bonehead mistake and took out a loan for a camper um in in march which we've uh dove headfirst into ural's um plan and trying to pay this debt off we paid 15 000 in the past three months good for you guys, that's great So we owe $18,000 on the camper

Okay And yes, that's the only debt we have It's really the camper Okay, yeah, I would pay both off then How much do you guys make a year? Yeah About $200,000 $200,000, okay, that's great

Yeah, I mean, always kind of my friendly warning if we were all hanging out i'd probably say this to you is whenever you get a lump sum of money and we find this with people that may you know get money from insurance or they may have gotten you know um an inheritance or they have a ton of equity that they're that they're liquidating whenever you get a large sum of money and then you go and you just wipe out the debt because you're gonna be able to do that in one day um it's a really amazing gift to be able to do that but also you're skipping a little bit of the sacrifice in the process to get out of that debt which usually makes people never want to go back in because they've had to get extra jobs and sacrifice lifestyle and they feel this pain associated with debt and getting out uh and you guys aren't going to have that necessarily i mean you're you're going to kind

of go through and wipe it out which again is such a gift and you guys have been so smart on all of it so i think though it takes um an extra step of you and your wife sitting down shaking hands pinky promising i mean all the things that we're never going back into this um because you know you're going to have to and i and i heard that from you a couple of times of oh gosh we made this mistake in that mistake so um that's my only level of um of advice when it comes to you guys going forward um that the behavior really has been changed and and i believe it has for you guys the way the way you're talking but um but i'm excited for y'all i mean that's great i mean you'll you'll come out you guys, the way you're talking. But I'm excited for y'all. I mean, that's great.

I mean, you'll come out after, gosh, you'll pay taxes and all of that. And so, yeah, you may have enough. How much of a house, new construction loan are you guys going to take out? Do you know? We don't want to take out any more than about $450,000. Okay. So I'm thinking with all this debt paid off from home equity, hopefully we can put down about $200,000.

Yeah, possibly. It might be a little thin because you'll be paying some taxes. So, yeah, I would run some of those numbers But it could be close And then I would want you guys to have some cash too aside Just for an emergency fund Above what you're going to put down We do have a $25,000 Three to six month emergency fund put up

Oh Blake Alright so you got $25,000 Okay that buys you A little bit more Yeah for sure and if you guys wanted to just Have fun pay off the camper today With that money before you know Put the house for sale and everything

I mean you could Do some of this now The other problem The problem that me and my wife are going back And forth on is Her student loans are able to be Forgiven because It's like a public service forgiveness If she pays back and forth on is her student loans are able to be forgiven because as a, it's like a public service forgiveness.

If she pays monthly for 10 years, then the entirety of the loan is forgiven. Is that something we should look into? No, I wouldn't for two reasons. Usually to get that forgiveness, you have to be in some type of line of work for that long to be able to, to qualify for it,

which kind of just puts you in this position of being forced into something you may not want to be in and then honestly blake if i'm being frank i mean in 10 years who knows what's going to be out there where congress is going to be who's going to be president i mean who knows between now and then and so the idea that you guys can do this on your own and have power over your situation without anyone else's influence or dependence on anyone else, there's power in that. And there's going to be more hope in you guys changing your lives and doing this than waiting for a program. But I hear, you know, we get that question sometimes and I get the benefit. And for some people, they've been in something and it's a year out. And I'm like, all right, well, if it's a year out, yeah.

But I would not force myself into a box to be able to qualify for it and again if it's in you know eight to ten years who knows what's going to be happening in dc i don't trust it right personally i don't trust it either yeah so um i hope that helps like well done you guys you i mean i can't believe you you guys bought that property again we'll say this for sixty thousand dollars when was this i bought it when i was a senior in high school in 2016 oh wow okay and you put twenty thousand down on the sixty thousand dollar property yes wow way to go and now it is three hundred and fifty thousand dollars that's incredible blake well done you guys i mean, you guys have made some smart decisions. And make sure again, with the with the sale of that, make sure you again, all the all the check marks are, you know, all the boxes are checked when it comes to taxes, capital gains,

anything like that, make sure you you do that your due diligence, making sure that's all covered. If you need a tax pro, Blake, or even a real estate agent, you can go to ramseysolutions.com and check out our trusted pros there to be able to help you through some of it. If you need that additional help, make sure to check them out. But yeah, that's, I mean, that's a- It doesn't get much better than that.

That's a story everyone wants, I think. Oh my gosh. So in 10 years, it appreciated like crazy. Yeah, that's really great. I'm happy for them. That camper is my only question mark. You want to sell it? I want to get rid of it. You know, you know what? Everybody's not a camper person and they're, they're camper people. So I'm not going to. You're not? Jade, would you camp or camper? I would glamp. Uh-huh. I'm with you. I'd glamp.

My husband went away this weekend with some friends. Yeah. And they basically stayed in a house that didn't have air conditioning or walls. It was basically camping. And he, like, brought an air mattress. I was like, you all are crazy. So, yeah. But, like, I'm sure the camper was nicer than that.

So, yeah. You guys enjoy. Listen up. Trying to reach your money goals without a rock-solid budget is like trying to climb Mount Everest in ice skates. It isn't going to work. That's why we built the EveryDollar app to help you win with money. It's the simplest, most straightforward way to track your spending

and give every dollar a job. That way, you can stop letting your money push you around and start reaching those money goals download every dollar for free on the app store or google play so one of the expenses that is hard to face as adults but it's true there's a couple of them but one of them is insurance and in recent years uh recent months i mean i guess close to 18 months now they just seem to keep going up up up home auto i mean it's just it continues to rise and according to quadrant information services home insurance rates

are about 23 percent higher than they were last year car Car insurance is up 39% compared to December of 2019. Yeah, it's a lot. And the factors that are playing into it, it's interesting. So even if you look at like car insurance, I mean, you do have to think about where you live in the United States is climate issue. Or do you live in a place where there's tornadoes and so there's hailstorms and it damages your vehicle? You know, it could be something like. I mean, wow, I just had a completely blanked my brain out there. No, but I mean, but yeah, you think about whether it's got tornadoes, rain, hurricane, anything that can be damaging your climate. And then you think about models, right?

We're doing a lot more electric vehicles. There's more technology inside of them. And so there's that part of it. And so by and large, we're seeing an increased amount of car accidents, which is interesting. OK, so there's that's playing into it. Some people would still say supply chain, although part of me is like, I feel like that's it's pretty much caught up. Do you remember, though, in that in that height of COVID, you would drive by a car lot and there would be like no cars.

It was so eerie. And now they're pretty full. I would say the car lots are, there might be some cars still on back order. But I think for the most part, yeah, you can get it if you need it. And so, you know, a lot of people are probably like, well, what can we do about it? And this right here, Rachel, is where what we teach really does play in. Because if you do buy a car in cash, if you buy it in cash, it's used, then you are qualifying yourself for a lower rate.

And so that right there is a good motivation. Obviously the car model that you choose still plays a part in it. How old you are still plays a part in it. So all of that plays a part. So there are some ways to get around this, but even when you do all those things correctly, there is still the idea, it is getting higher. And that just, I mean, getting higher. And that just, I mean, the truth is that that just sucks.

Yeah. And it's one of those expenses too, that you're like, I can't do anything about it. Right. Like when your property tax goes, I mean, whatever it is, you're just like,

oh my gosh, I just feel, you feel stuck. You feel trapped because you have to have it. Yeah. But yet it's one of those things that just continues to rise. I mean, you could raise your deductible.

That's something that you could do. You know, there's another thing about if you buy your car in cash and you have enough money saved up that if something were to happen to that car, you could replace it in cash. Then you could drop off like comprehensive insurance because you're like, hey, if something happens, national like natural disaster, something that's crazy. I have the cash that I could actually replace this. Repair it if I need to. Yeah. So there's things that you could do to save on it. But there's just a big part of this that it is, you know. It's frustrating.

Yeah, for sure. Yeah. So there's other things that you can do, whether it's look for discounts. You can even bundle policies and then you'll get a better deal that way. But I would, again, shop rates because sometimes the bundles, it really is helpful. And sometimes if you're shopping from just like one carrier and you're not comparing prices, you may not be getting the best price.

So make sure to do your research there. And I mean, the same thing's happening also with home insurance. We're seeing certain states are not willing to cover things that they once did. And again, some of this is linked to climate. Some of it's linked to natural disasters, that sort of thing. thing and i mean we had a call the other day where a lady called in she said i'm being dropped from my insurance because my state has decided that they don't

cover you if you have a flat roof and it's like okay great you know and so all of this at the very least it really ties in what we teach and trying to put yourself in a position where you can have as much peace as possible so if these things things do crop up, it's not a disaster. It's like, okay, this is very inconvenient because I've set myself up. I can deal with it. And so that's how this works. If you want to work with an independent insurance agent, you could contact a Ramsey Trusted Insurance Pro. The good thing about our Ramsey trusted insurance pros is they are going to advise you and help you do things the way we teach and so that's what you're looking for they're not tied to any one carrier and they'll put pull quotes from all companies to help you pick the

best deal so you can go to ramseysolutions.com slash bundle to get connected and to start saving money on your insurance because it is a part of the budget it's just part of it part of the life all right up next we have is it shay in chicago hey welcome to the show hi thank you so much for having me absolutely i'm gonna make this quick i'm thinking of doing a voluntary repossession of my car and i'm just wondering if that's a good idea well i'm gonna call it well let me rephrase that i call it a voluntary repossession but i'm really trying to get rid of some debt i'm tired of paying a car note i thought that was the right idea yes but can we sell it can we sell it that's my goal i'm hoping to try to sell it to the dealership um and i'm assuming of course can we sell a private sale

ah i'm not well i currently pay on, so I'm not sure if you can. OK, so here's what I would do. I would not give it back to the dealer. I would not do a voluntary repossession, even though that's not what you meant. I would never do that because that's going to destroy your credit and just be heartache. And I wouldn't sell it back to the dealer because they're not going to give you the best price for the vehicle. If I were you, what kind of vehicle is it? It is a Buick Encore GX. OK, what year 2021 okay i'd get on kelly

blue book today after you get off this call and i'd see how much can i get for this private sale what do you owe on it um 22 000 okay and just your best guess if you're like hey i have done a little bit of research what do you think you could get for it i'm hoping to get at least 20 000 okay so if you thought that giving it back to the dealership would give you $20,000, then I bet blue booking it, you might be able to break even on this just based off of what you've said. Yeah. Shay, what's causing you to get rid of it? Is it just because the payment is so high? Yes. And honestly, I'm just trying to get out of debt. I want to be able to pay off. My mom and I just bought a family duvet. So I want to put my money

into paying this off. Not a car note. Not a car. Yeah. Do you have any other debt? Yes, I do have credit card debt. How much? $9,000. Okay. Anything else? No. How much do you make a year? I make $73,000 a year. Good for you. That's so great. Okay. What caused you to to just up and say i got how i want to get out of debt i don't want to do this anymore i'm just tired of living the life that i've been living i don't feel like i'm living like a 25 year old you know i'm making okay money and i'm not seeing the benefits from it yeah for sure well done i mean that's that's a good why we usually find people that start saying god something's got to change. A lot of it comes like that to say,

I work hard and I don't feel like I have anything to show for it. It's just this feeling of, I mean, there's nothing. And yeah, and you're 25 making $73,000. That's a lot. That's great. Where'd the credit card debt come from? Because you've got a good income. Honestly, poor decisions.

And then also before I got this car, I had a car that was giving me trouble so i was putting some money into it put it on my credit card trying to get it fixed and it honestly it still ended up going out on me so see i love this car i love when people stop and realize that they have a choice like you don't have to keep going the way you've been going you have a you can opt out of that lifestyle and you can go you know what yeah i want to do better than this i want to feel like i'm making an impact i want to feel like my income matters i don't want to keep living like this so bravo i think so great shay

have you been have you plugged into the ramsey baby steps at all no i have not okay so i would i would encourage you to to um yeah dive into some of the stuff we'll have christian pick up and we'll we'll give you financial peace university which is our our nine week course that we always say every high schooler should have taken but at 25 if you can get this shay because there's a process i because your emotions there the decision in shay has been made that i don't want to live like this anymore so now the best way to be effective of this and to actually see a lot of impact and is to have a step-by-step process of what you do. So Shay, we have what's called the

Ramsey Baby Steps, which the first thing you do is going to get a thousand dollar emergency fund. The second thing you're going to do is pay off all of your debts, smallest to largest. So it actually be you, you getting rid of this car, which is great. And then knocking out the credit card. So if you have multiple credit cards, write each of those out separately smallest amount to largest amount regardless of the interest rates pay minimum payments on everything and pay off that smallest credit card first and work your way up um i would be getting a side hustle i mean i would do anything i could to to knock this out and again you make some great money so even limiting your lifestyle uh living on a budget doing a couple of those things is going to help you and then your next goal shay will be to get

a fully funded emergency fund three to six months of expenses saved in the bank okay and what i mean could you how would that feel right now if you had no debt and you had five months of expenses saved in the bank how would that feel amazing amazing so good Amazing. So good. Okay, stay on the line. Christian will pick up and we'll give you some stuff to help you on your journey. I'm so glad that you called in. I know.

So great. Okay, those of you that are watching on YouTube or listening on podcasts, make sure to download the Ramsey Network app. We'll have the third hour there. If you're listening on radio,

keep listening and we will be here in the next hour. Thanks to all the guys in the booth. Thank you, Jade, for a great hour. And thank you, America.

This is The Ramsey Show. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.