The Ramsey Show - Math Is Important but Behavior Change Is What Matters

Starting point is 00:00:00 This is The Ramsey Show. It's where you hang out America to talk about your life, specifically your money, your profession, and your relationships. Alongside the incomparable, the inimitable Jade Warshaw, I'm Ken Coleman, and we're here for you this hour. 888-825-5225, 888-825-5225 is the number. You ready to go? You're in your spring corduroy.

Starting point is 00:00:41 Yes, I am. I like this. It is, spring has sprung. It has. In the Nashville area. All right,. It is, spring has sprung. It has. In the Nashville area. All right, that means we got a little extra energy for you folks today. Jade's gonna help out on how to save, how to invest the money,

Starting point is 00:00:53 and I'll help out on how to make more money. So it's quite a combo, if I do say so myself. We start off with Darlene in Musula, Montana. Darlene, how can we help today? Hi, how are you? Good. I called in on the show, just, uh, try to see what kind of help we could get in guidance in regards to, um, my other half has been hiding some things financially and I'm having difficulties with that and trying to get to communicate with him to resolve so

Starting point is 00:01:21 we don't lose our house. What happened? Does this a new revelation? Well, he's always not been real good with money, but I mean, he does try his best. And even though we're just engaged, we don't have our finances together. He pays his things on his own and I pay things on my own. We've never really sat down

Starting point is 00:01:41 and gone over our finances with each other, but it's just he's got himself in a predicament. Well, but hold on a second. I asked you this and you kind of feel like you went a different direction. I asked you, is this a recent revelation that he's not been honest with you? I love that your finances are separate. They should be.

Starting point is 00:01:59 That's exactly what we would tell you if you asked us that. You aren't married yet. So my question is, is this something new that you have found out, and how did you find out? Well, I have to say yes and no. I know he's not been that great with money, but to this extent, it's new. How I found out, I'll try to keep it short, but you know how you have you connect with your vehicles, and I was pulling up in our driveway from running Aaron and his phone actually connected. He was on the line with, I guess,

Starting point is 00:02:31 some loan agent from his, from his loan company. And I heard something about a forbearance or a deferment. And so I sat in the driveway and tried to listen as long as I could. And then the call disconnected. And then I came in and went downstairs and confronted him and even though I confronted him on this, he still continued to lie about how far behind he was. Okay.

Starting point is 00:02:52 All right. Well, that's all. Thanks for sharing that. That helps Jade and I in trying to encourage you because this is less about him lying about the finances. This is just about him lying about the finances. This is just about him lying. So we've got money problems. And you guys are about ready to tie the knot.

Starting point is 00:03:09 When is the big day? We haven't really set a date, to be honest with you. I've been comfortable with just the engagement the way that it is. And I just, I want things to be more stable. All right, so how can we help you? So now we've got a good idea of what's going on and I'm troubled if I could play big brother for a moment I'm I'm concerned

Starting point is 00:03:33 Because this is a real problem we know that financial issues cause a lot of marriage stress number one It's well documented and then number two. There's there's dishonesty here. And so I'm very concerned. So how can we help you best today? What can we do? Well, I mean, I obviously don't expect any type of relationship or marriage counseling. I do know I'm good with money. I think everybody can always be better with money. What I want to do is to be able to get him to sit down and to be completely honest about finances in general. No matter how bad it is, we really need to get to the root of the problem and to be able to sit down and look at his finances, my finances.

Starting point is 00:04:13 I agree. What happened when you confronted him? And depending on how the confrontation went, it feels like that would have been a time to kind of come clean with everything, did he not? What happened when you confronted him? No, when I confronted him and he knew that I heard the conversation on the phone, I tried to sit and Google in front of him what deferments were and what forbearances were, just to educate myself.

Starting point is 00:04:37 Because you weren't sure. Yeah, and if I tried to figure out what he was actually doing and what his plan was, and when I started reading off and trying to figure out whether forbearance is added on to the back of your loan, to the end of your loan, or if it's a balloon payment. And I looked at him and I said, well, forbearance is say that you have to be four months behind. I said, you just said you were a little bit behind. And what'd he say to that? He said, no, I don't want to be that far behind at all. Well, then there was another lie.

Starting point is 00:05:04 He was already four months behind. Okay, so let me ask this, because there's two things that I'm sensing going on. Number one, your boy was caught in a lie, and you probably came in hot and heavy. I would too, like I'm not saying that you shouldn't have. I would have been like, say what? So I understand that you probably came in there

Starting point is 00:05:20 really strong. And so for some personalities, that's like shut down mode. Like it's like I, I like the cartoons. So he may not, he might've just been trying to get through the situation, which is probably why he wasn't giving more information. That's thing number one. But did you guys come back later on in calmness and be like, okay, let's sit down and talk because here's what's gone on. And when that happened, what could you derive from that? Because it is possible.

Starting point is 00:05:49 People don't always know, when people don't know what's going on with their money and they get behind, sometimes they're still like, okay, what's going on? How many months in it? He might not even understand it. So have you guys sat down now calmly to talk through everything that's going on?

Starting point is 00:06:05 We have a few times. Yes, it's been a little conversations and when it kind of gets a little bit more heated We step aside a little bit and take another day and then sit down and look at it again So we both don't get so upset or he doesn't feel attacked or any more ashamed And he says he feels like a failure and okay So you guys are talking about it and it kind of does, I mean, can you can jump in here? It does kind of sound like what I would expect a situation like this to sound like because contrary to popular belief, money stuff is not a light switch. Like it doesn't, it's not one conversation and over. It does tend to spread into many conversations

Starting point is 00:06:46 that have a life of their own because the truth is he has made a mistake. I'm not trying to sugarcoat that, but there's a lot of shame around the choices that people make with money. And so it can take a while to really be able to talk about it in a way. And I think what you're saying seems right.

Starting point is 00:07:02 You talk about it a while when it gets too hot and heavy, you cool it down, you come back to it later. Like that, what you're describing really does sound like you're on the right track. And what I would be listening for is as long as you don't feel like he's still hiding things, then I think that you're on the right track and this is just something that you guys are gonna uncover

Starting point is 00:07:19 and it's gonna be a continued journey. Yeah, however, I agree with all of that, but I think this ought to be premarital counseling. Yeah, yes. Because you actually need a professional who can help you navigate his feelings. His feelings are very real and as a result, very powerful. In other words, there's a lot of shame. What I heard is he is a shame and he needs to know that you aren't judging him. He needs to know that you aren't holding an ultimatum over his head, but that you don't

Starting point is 00:07:50 feel safe because of the way he does money. And this is about us moving forward, having a healthy and prosperous marriage, not what you've done now or what you're dealing with. I'll help you. I'll dive in going forward. Hey, babe, I'll handle the finances and you don't have to worry about it because it's my thing, it's my jam.

Starting point is 00:08:10 Like that has to be facilitated through a real marriage pro and I could not recommend, I think your next steps are, hey, we're doing this for us so that there's no judgment. Sit with me in there, they'll keep me in check so that I don't shame you. Come at it that angle and just say, please do this for us and it's going to be okay. No shame, no nothing, no condemnation. I think that's the play, but I do believe that this is premarital counseling.

Starting point is 00:08:36 This is not a money issue right now. It could be, but it's actually not. And that's why I would do that. So thanks for the call, Darlene. Thanks for trusting us. I think it's going to be okay if you I would do that. So thanks for the call, darling. Thanks for trusting us I think it's gonna be okay if you approach it that way and you guys stick through the therapy quick break We'll be right back. This is the Ramsey show Hey you guys health insurance costs are only moving one way and that way isn't down and if higher costs aren't enough

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Starting point is 00:09:31 stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Welcome back to The Ramsey Show. So glad you're with us today, America. Alongside Jade Warshaw, I'm Ken Coleman, and we're here to coach you up, 888-825-5225.

Starting point is 00:10:18 That's the phone number. Sarah's going to join us now in Atlanta, Georgia. Sarah, how can we help today? Hi, yes, Georgia. Sarah, how can we help today? Hi, yes sir. I'm 56 years old and first of all, thank you for taking my call. You bet. I'm 56 years old and I have four grandchildren that I am now raising. Oh my.

Starting point is 00:10:38 I was in a perfectly good situation before I got the kids. I had money in the bank I was working for an airline and I was doing really well and I got the call either come and get the kids or they're going to stay. Oh my goodness. Needless to say I came back and I had to spend everything I had. Yeah. And I took the kids, got a place as quick as I could because I gave up everything to travel. My husband passed away, my mom passed away. So it was like it was only me, you know? So here I'm going to live my life.

Starting point is 00:11:21 And so I had to come back and I had to try to get a home I had to try to get the furniture I had to try to get you know and I was getting all this to keep them out of the system and now it's been five years and I am like broke I don't know what to do. Oh Sarah, well first of, you're such an amazing grandma. I'm telling you. You stepped up and we're going to help you. We're going to help you. So give us the scenario. Where are you financially? Did you accrue any debt? A lot. Walk us through that.

Starting point is 00:12:02 I went from having $63,000 in the bank and was going to put more as I was traveling. Sure. But all that's gone because I had to get a lawyer, I had to get the house, I had to get furniture, I had to, you know, and it was just, I spent it all, okay? I get it. It's okay. We want to get you out of this. What's your debt?

Starting point is 00:12:21 Well, I went from that. Real quick, Sarah, tell me, where did you used to live? Where did you travel from and where do you live now? I live in Georgia now. And when they called me, I was in Paris. Paris. So I had Paris, France. Oh, holy moly.

Starting point is 00:12:40 Yeah, but I was traveling. Yeah, I didn't live anywhere. She didn't have a home. I was traveling. Got you, okay. I was confused about that. So didn't have a home. I was traveling. Got you, okay. I was confused about that. So now you're in Atlanta. How old are these kids?

Starting point is 00:12:49 These kids, the youngest is six. Then there's eight-year-old identical twin boys, and then a 12-year-old little girl. Okay, okay. She's got a ways to go. Now, do you have full custody of them now, and all that's settled? Yes, all that's settled. and now it's all on me.

Starting point is 00:13:08 So I'm mama, you know, basically. What are you doing for work? You're not doing the travel agent thing anymore. No, I can't. I was working with a local company and then they let me go. So I went from having around $4,300 in income down, I mean from 6,500 having income down to 4,300 and this is where I lost it. This is where I'm like losing everything because I don't have enough.

Starting point is 00:13:35 So what are you doing now? I'm pet sitting. I'm doing pet sitting. I go to people's houses and pet sit. The reason I don't do a regular nine to five type job is because the kids are special needs. Oh, okay. Yes. Is that why you lost your job before? That is, yes. That is the reason why I lost my job. Okay. So you're in Georgia. Is there anybody, is it, it's just you and these kids? There's no other family you mentioned your mom

Starting point is 00:14:03 passed? Yeah. Okay. No other family. It's just me. And how many of the kids have special needs? All four. They were born on drugs. Oh, that's their heart. And so a lot of medical stuff still going on? A lot of medical and a lot of emotional behavioral. And so where's most of your money going? Is it for therapy and the medical stuff? I'm guessing that's extremely expensive.

Starting point is 00:14:32 Yes, that, well, they do get Medicaid. Thank goodness for that. You know, that does help. But most of the money now, since I had to get a mortgage, it goes to the mortgage and I had to get, you know, the mortgage right now is off the chain. So what is it? What is the mortgage? I do a 6.25 now and my mortgage is $1,748 a month. That's most of it right there. And is it a house? Yes, the mortgage. Yes, it is a house. Okay. Whereabouts? Actually, I'm in like southwest area of Georgia. Yeah. And the reason I'm asking, because I know that area very well. I lived down there for a long time, so I'm just curious. So you're

Starting point is 00:15:17 south of the airport? I am, yes. I am like near Albany. Okay, gotcha. All right. All right, let's walk through the debts really quick because we don't have a ton of time left and we're going to get you some help here, but let's give Jade a quick snapshot of your total debt. We know the house. Well, let's just quickly get that. How much is the house worth today? Do you have any idea versus what you owe? It's worth $235,000 and I owe $217,000. Okay, so you don't have much there. Okay, and now go through the rest of your debts, smallest to largest. Okay. Credit card debt, I got several of those. All of them together is around $6,100. I pay

Starting point is 00:16:01 $3.85 a month. Okay. Furniture bills, I pay $8.85 a month. Furniture bills, I pay $8.47 a month. Is that a one-time purchase, the furniture bill? You just put it on a loan or is it something that's like a rent-to-own deal? It's sort of like a rent-to-own deal. Okay, how do we get out of that? Because what are you paying a month?

Starting point is 00:16:21 $8.47. $8.47 a month. Now, is there a way to get out of that? Because that's going to be a revol- like you're going to be in that forever if we don't, if we don't get out of it now. And that's a lot of money. Yeah, it's another year on it. You can't get out of it? 847 a month. I don't know how. Okay, that's your homework. One of the things that I want you to do getting off of this call is to find out how I can get off of this because this for a whole nother year is a lot of money. I'd rather you just go over to

Starting point is 00:16:52 Walmart and make it happen for $847 for in one month and to continue paying this. Right. How much furniture does that include? All the beds, the couches, the kitchen table, it includes everything in the house. I had to get something so this is how I did it. And then after the year you'll own it? Yes. Okay. It's $5,229 total to pay it all. Okay keep going down the debt. What else do you have? I have basically that's all the debts is the furniture bill and the credit cards and then my stupid butt got some payday loans I'm gonna work on getting those. What do you own the payday loans? 2400 total okay 1320 a month.

Starting point is 00:17:39 Okay so yeah you're right those payday loans those will suck the life out of you so I want those at the very, very top of the list. Do whatever you can to get those things out. I really, really want, and I know that this doesn't happen overnight, but if you find the right folks, it can. I really want you to get plugged in, in a church or into some community because you can't do this alone.

Starting point is 00:18:03 I mean, you are running on fumes already. So you gotta get somewhere and you gotta tell your story. And you gotta let people hear what's going on, people who care. I want you to get to a local church, I want you to get plugged into a life group, and I want you to start saying what's going on. Because anybody else that hears that is gonna go,

Starting point is 00:18:22 if you came into my life group today, I'd be like, what can I do instantly? Do you see what I'm saying? So getting people around you is paramount to making this work. Okay. Right. And by the way, cause we're running out of time.

Starting point is 00:18:35 I want to set her up, Christian, with one of our financial coaches, please. Let's get it. Let's gift her a session. So there's just a little bit more time and they can help you with a plan because we just cannot cover all of this in the small time we have with you.

Starting point is 00:18:51 Secondly, Christian, you've done this before. Also, let's figure out what churches we know in the area and get her in there. Where she lives specifically. We will also make some connections to this church for you or churches. And I cannot say What Jade said is absolutely the number one thing you got to do right now now

Starting point is 00:19:10 The coach will help you our coach financial coach will help you And come up with a game plan, but you've got to go tell your story because people's hearts will break with yours and You will get help. You've got to be okay to say, I need help. No shame in your game, Sarah. You stepped up. You did what you did. No one's judging you, including us. Everybody just wants to help. Gotta have some help. So hang on the line. Christian's amazing. He'll take good care of you, Sarah. Help is on the way. Keep your chin up. There's a plan. This is the Ramsey Show. All right, Dave, you have some strong opinions. Possibly, yeah.

Starting point is 00:19:51 I think so. Okay, because you really prefer credit unions over big banks, so why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing.

Starting point is 00:20:17 And what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer centric. Yes well and I think we have found one that is incredible and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer. You know that's why we're partnering with them because they've got a scope to be able to handle the Ramsey audience and they're the right kind of people

Starting point is 00:20:46 with the right kind of values. And they've done a really, really good job with customer service, and the deals that they're offering, the Ramsey Tribe is incredible. Yeah, absolutely, and you're right, their customer service is unbelievable. Winston and I just signed up, and we got an account. And I'm not kidding, it took less than five minutes. It was so user friendly,

Starting point is 00:21:06 like the step-by-step approach was unbelievable. And then the next day my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience and I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts but Fairwinds

Starting point is 00:21:27 again they make it so easy. Plus anything that you can do at a traditional branch you can do with them at fairwinds.org or on their app and you'll have free access to over 33,000 ATMs. Hey you guys know how much I hate banks in general and so for me to do this is a big deal. Talk to our friends at Fairwins and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible. Yeah, you guys, it's so easy to join Fairwins no matter where you live.

Starting point is 00:21:57 So go to fairwins.org slash Ramsey to learn more. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside 888-825-5225 is the phone number to jump in. All right. It is possible to break the cycle you've been stuck in. I'm just telling you, it is possible to break the cycle you've been stuck in.

Starting point is 00:22:26 I'm just telling you, it's possible. It might seem as though you're just never gonna get out of it, but it is possible. And we're talking about your money and your relationships. There's such a tie there. Dave Ramsey and Dr. John Delaney are hitting the road to show you how to break out of the cycle. It's called the Money and Relationships Tour.

Starting point is 00:22:43 They're gonna talk about raising great kids, handling money fights, making real friends, and more. This is the turning point you've been looking for and the time is running out. The dates are Louisville on April 21, Durham, North Carolina on April 23, Atlanta, Georgia, April 25, Phoenix, Arizona on May 5, Fort Worth on May 7, Kansas City on May 9, ramsysolutions.com slash tour is where you get the tickets or if you're watching on YouTube or listening via your favorite podcast app, click the link in the show notes. It's the Money and Relationship Tour. Dave Ramsey, Dr. John Delaney coming to a city maybe near you.

Starting point is 00:23:23 So go check out the details and get your tickets now.ton is up in Denver Colorado Colton how can we help? Hey Mr. Coleman hi Mrs. Warshaw how are you guys doing today? Well I just feel about 15 years older now. It was very formal. Mr. Coleman and Mr. Warshaw with you today folks we're here to take care of business. What's going on Colton? How can we help? We appreciate the respect. Jade feels she doesn't know what to do with that. This is wonderful.

Starting point is 00:23:50 First lady. Y'all deserve it. I've been following Dave Ramsey from the student program that I took back in high school back in 2016. Okay, all right. So I was wondering if I can afford to go on a vacation to Japan next year. I love these questions. I particularly like this question because full disclosure, Japan is on my top five list of places to go. Interesting. That I've not

Starting point is 00:24:21 been. Okay. So I'm a little interested in this. Alright, Colton, how much is it gonna cost? Well, you know, I've been budgeting for it. I'm looking at it and planning on taking it October of next year. Okay. So I got some time to save for it and budget for it and I'm estimating the cost to be around 4k. 4k, alright. Okay. And do you have any debt? Nope, nope. I paid off my truck last year in July, and I have about 15 grand in savings right now, and I estimate that to be about 35 grand in savings. Is that your emergency fund? That is my emergency fund. That is everything. And so what is a fully funded emergency fund? As we define it, three to six months, what's that for you? For me, so I still live at home currently. I'm moving out in July and I estimate my expenses

Starting point is 00:25:14 to be about 21 to 2100 a month to 2400 a month. Okay, so you've already got, so the 15,000 is a fully funded emergency fund and then some for you. Yes. And you're going to be able to cash flow between now and next October, easily the four grand to cover the trip, yes or no? Yes, I should be able to, but I'm also wondering if it's too much of my net worth because four grand relative to 30, 35 grand is a good chunk of money. Yeah, but that's not, we don't have a net worth calculator as your vacation. The bottom line is,

Starting point is 00:25:53 do you have any debt? The answer is no. And do you have a fully funded emergency fund? Yes. How long's the trip? Are you investing 15% of your income into retirement? I haven't started investing yet. My company doesn't do a 401k match and I'm still just bulking up to move out and that's why I've been saving probably about 70% of my pay home right now.

Starting point is 00:26:16 Here's my deal. I'll get out of the way and cede my time to my financial expert partner over here. I just see no issue with you coming up with four grand even if you're investing 15% which you need to be doing. You coming up with four grand between now and October 2026. That's no problem. Is a non-issue my man. So I would say go to Japan. How long's the trip? Me and my friend are still working that out. He's coming along to also paying him all cash, so he'll be good to go.

Starting point is 00:26:47 Doesn't that have to do with your work? How does that conflict with your work is all I'm asking. You know what? Thankfully, my job offers me generous amounts of PTO. And I do mean generous amounts of PTO. I have 24 days to burn this year. So your only question then was just your only issue was net net worth like hey Is this too big of a piece of my net worth to do this? Yeah, no

Starting point is 00:27:10 Isn't no no and you only live once bro the fact that you're paying cash for this. Yeah, you're young. How old are you? I'm 24 I'll be about to turn 26 by the time we take the trip in October. My birthday is end of October or so. I'll be turning 26. My only caveat is I would be moved out of my parents' house before I went and did this. Like to me, at your age, that's really important. And so I would not want this trip to push me

Starting point is 00:27:37 from not doing that. That would be my only piece to this. No, it's not gonna push me from that. I'm moving out in July. I'm moving out to a college town, not to go back to this. No, it's gonna push me from that. I'm moving out in July I'm moving out to a college town not to go back to school. That's just Where I want to live. It's gonna be Laramie, Wyoming and you know, that's where my expenses and rent fits and do All right. So listen, I'm gonna preview my talk on the Ramsey cruise what talk what's it about? It's I'm about to tell you it's It's the answer to why he's calling it. Okay. My talk is for decades,

Starting point is 00:28:09 Davis said live like no one else. Uh-huh. That's the baby steps. Yeah. So that later you can live like no one else and then he eventually added and give like no one else. Right, right, right. But living like no one else, the crux of my talk, because all these people on the cruise are baby step four and higher, okay, is don't get to the end of your life after you're doing all this hard work to live like no one else and not actually live like no one else,

Starting point is 00:28:35 which means when you're 24 and debt free, going to Japan for four grand because you can, and you come back with a great experience and no stress. That's living like no one else. Is our talk the same? Because I feel like I'm talking about the same. I'm talking about being in your spending era.

Starting point is 00:28:53 And my guy is in his spending era. I'm not talking about the money part. I'm gonna say on the other side of all this hustle, now we go from intensity to tensionality and let's talk about the regrets of the dying. I'm gonna share the regrets. Okay, the regrets of the dying. What we know from tons of studies on it.

Starting point is 00:29:12 Tell us some of them, can you? Yeah, I won't give the whole talk, but it's I didn't live true to myself. Like I tried to please everybody else. Oh man, yeah. I didn't spend enough time with friends. I didn't spend enough time with family. I didn't spend enough time with family. Like these type of things.

Starting point is 00:29:26 And so I'm gonna equate it to, now that you have financial peace, what does living like nobody else look like? And I'm gonna actually spin. I'm gonna flip the regrets. So instead of a regret, I'm gonna go here's the flip side to this regret, and I'm gonna name it.

Starting point is 00:29:42 And now that you have the money and the freedom to pursue this, get to the end of your life and reminisce, not regret. That's the final thing. That's very good. So I would say, Colton, I believe in this so much, that's the talk I'm doing essentially, and I think at 24 being debt-free, if you don't go to Japan, it's the type of thing you might regret one day. And none of us are promised tomorrow. So while I'm living, this is from the Broadway show Redwood with Idina Menzel that Stacey and I just saw. There's a song and there's a lyric in the song that says, live while you're living. Okay. And I'm going to go ahead and borrow that. I probably botched that lyric. I'm with you. I

Starting point is 00:30:21 thought you were going to Sinatra. No, I just think that when I'm living, live. Mm-hmm. Yeah, that's right. Live. And I think this meets all of the requirements for us saying... You know, Davis said for years, don't let your vacation come home with you. I agree, yeah. By putting it on a credit card. But he's got the money. And why wait?

Starting point is 00:30:39 I think what Ken, what you're saying is so smart and so true. We see that with home buying. we see it with vacations. It's kind of like people are gun shy to actually, like you said, live. And I'm like, you have the moment, take it. No one is, no, people only want your time. They only want to suck things from you and take things from you.

Starting point is 00:30:56 People rarely will push you to do those things. There'll always be an excuse, like, why you gotta work more? Why you can't go? Why you can't do it? Just go. This is my new qualifier,ton Jade and everybody else when when given an opportunity I sit there and I think is this something that if I'm an

Starting point is 00:31:13 85 year old man in my final days that I'm gonna look back on and go I wish I had done that man I tell you what I'm glad that my talk comes before yours because they're kind of similar hey if there's karaoke on the cruise, will you sing that song you just talked about? Yeah, Ken. If Jade works with me on it, like she's got to make sure that I can get all the keys. Me, me, me. Yeah, yeah, yeah. She's a pro. If she coaches me, sure. Maybe does a duet with me. I don't know. Based on the last time we heard you sing, Ken.

Starting point is 00:31:39 If I can do like a Kirk Franklin version, like Kirk never actually sings, but he surrounds himself with great singers. That's more me. I say a couple lines with some oof. Okay, okay. While you're singing. This is The Ray of the Show. There's a time in your life

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Starting point is 00:32:55 Eagle Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. Welcome back to the Ramsey Show. I'm Ken Colman. Jade Warshaw joins me and we're here for you this hour, 888-825-5225 before we get to the phones. It's time for our Ramsey Show Question of the Day brought to you by YREFY. With YREFY, you can take control of your defaulted private student loans with a plan that works with your monthly budget. Visit wirefy.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states. Alright, today's question comes from Katherine in Indiana. She says, how do I rationalize having a thousand dollar emergency fund

Starting point is 00:33:38 when I could be using it to pay off debt? I've lived paycheck to paycheck for 25 years and I've always managed to cashflow any emergency. I have a hard time rationalizing putting money in the bank now when I could put it towards credit card debt. I can't get past this feeling that having savings is for those people and not me. Fascinating. That is fascinating. I mean, let me tackle this from a couple of areas. First and foremost, I want to say that when I first started the baby steps, I felt the same way. I was like, oh, you did.

Starting point is 00:34:12 Yes. You were so intense because this says intensity to me. Let me tell you, I specifically remembering arguing with Sam because he was like, Jade, we have to walk the steps the way they're written. And I was like, but we need this thousand dollars to go towards our credit card payment. Which I understand that. Yeah, cause you're desperate. And so you're like trying to like put out the fires and stop the bleeding.

Starting point is 00:34:33 So I validate the way you're feeling. However, what changed my mind is kind of what you said here, which is for 25 years, you've been living paycheck to paycheck, which means your way hasn't been working. That's right. That's really, and so I had to do the same thing. I had to go, here's the thing. I'm in $460,000 of debt. Right. My way and my instincts have not served me well up until this point. But was there, okay, but I also know you,

Starting point is 00:35:01 you're probably one of the most principled convicted people I know and that's a compliment Yes, so what changed is was it something that Sam said? What what made you finally go and I know you just kind of said it but there was an I've had a moment There was an I've had a moment. So the I've had it moment was We continue because we didn't have the thousand dollars because we were trying to put out fires as they came we weren't making as much progress, because we were trying to put out fires as they came, we weren't making as much progress as we should have been making.

Starting point is 00:35:27 And not having that extra little bit of money when unexpected things come up, I just felt like we were taking two steps forward, one step back, just going very, very slowly. And I just remember one time just being like, pull the car over, we've gotta figure this out. And when we did that, we kind of looked at the baby steps and it was kind of like an audit.

Starting point is 00:35:48 It was like, okay, what are we doing versus what the steps tell you to do? And what we found is there were a lot of inconsistencies and the thousand dollar emergency fund was one of them. It was like, okay, you're supposed to have a thousand dollars. We didn't have that. When you budget, you're supposed to have a cushion line item.

Starting point is 00:36:03 We didn't have that. Cause I was like, zero dollars, zero base budget is zero dollars in the account I felt that like sure and so these are the things that we do Especially when you have a lot of debt, especially when you're trying to go quickly you kind of think that doesn't apply to me Yeah, and all you see it as money that you could be spending but I'm telling you Catherine do the thousand dollars Very personal answer there, which is powerful. Yeah, yeah. You felt her.

Starting point is 00:36:28 I did. And I also understood the third part of this, which is if you've never, so many people struggle with saving, if you've never been a person who has had savings or you've never been able to make it stick, right? You put it in and then you pull it out. It feels like you'll never be able to do it.

Starting point is 00:36:52 But if you just take that money, you set it aside, you put a lock on it, you will find that savings is a muscle that you build. And you're probably right now just, you don't have any muscles. And so you have to just work at it and you get stronger and stronger and that becomes something that you do become good at. Love it. Really good question, better answer. Love it. Let's go to Austin who's now joining us in Salt Lake City. Austin, how can we help? Hey guys, how's it going?

Starting point is 00:37:11 Good. What's going on? I had a question for you. My wife and I are currently on baby step two. We do have two cars that we have about between the two of them, about 20,000 on one and just under 10,000 on the other. We're looking at downsizing right now just to help put more toward other debts and kind of get rid of those big payments. But I know on one of the cars were probably about three to $4,000 upside down

Starting point is 00:37:36 in it. And so I'm trying to figure out, we, we do need two cars with our kind of work and, and my kids school situations, we, we really do need two cars to survive, but I don't have the cash to, like if we were to sell my wife's car, I don't have the cash to cover that upside down amount, that three to 4,000 to get the lien. So what's the best way to go about this?

Starting point is 00:37:58 Yeah. Well, quick question. How much do you owe on that car? So hers is between 19 and 20, I don't know the exact amount, I think it's like 19-4. Is it a good car? It's a decent car, yeah, it's a pretty nice SUV that we like, we have three kids so it fits all the kids and all the stuff that we need. Is that the one that's upside down? Yeah. Yeah, that's the one that's upside down. What other debt do you have? We do have about 60,000

Starting point is 00:38:27 in student loans as well. Other than that, we don't have anything else we're currently renting. So we don't have a mortgage, no credit cards, nothing else. What's your income? My main job salary is at 75,000 and then I have a couple side gigs at bringing about 5 to 10,000 a year. Okay, so every month what do you see like on a normal month what do you see on the pay on the paychecks? My direct deposit is about 54 and then between my side gigs it really fluctuates month to month but we've currently budgeted at that 54 hundred amount because my other side gigs

Starting point is 00:39:00 are pretty like it's not consistent it's kind of up and down and it ebbs and flows. So I mean, how quickly using the side gig, how quickly, if you really said, I'm gonna focus on the side gig, how quickly could you save up 3K since your only, since your budget is based on the 5,400? How quickly could you do that? It'd be probably two to three months.

Starting point is 00:39:22 Okay. And what is the side gig? I'm an architectural drafter. So I work for a home builder. That's my full-time gig designing house plans. And then on the side, I do it as well. Okay. Jade, I don't know where you're at, but I'm leaning towards,

Starting point is 00:39:34 I think you should just pay this car off. I definitely think that you could pay it off. The only thing that's throwing me a loop is the $60,000 in student loans. If it was just the cars, I'd be like, say less, like pay them both off. The 60,000 student loans is what's bothering me. Can I dig a little deeper and ask you, what's the payment situation? Are you on the save plan? There's a lot changing with student loans right now. So I just kind of want to

Starting point is 00:39:58 know where your head's at on those. Yeah, great question. So currently we are on that safe plan, but with the insurances like whether that's actually going to be approved or not. So all of mine and my wife's loans are currently in forbearance. So we're at zero insurance zero payments right now. And so we haven't been paying on them for the last few months to put more toward our car loans and do that. So that's currently where we're at. But I'm also like, I don't wanna just let those sit there without making payments on them, but we are starting with those smaller car debts as well

Starting point is 00:40:30 to get rid of those. So. Yeah, the student loans, those feel like a major risk right now. Safe plan, a lot of people have been on that to kind of curtail a higher payment, but there's a lot of talk about that being rolled back and the payment amount being due going up.

Starting point is 00:40:49 And so I would hate for that to catch you off guard. For that reason, I could be interested in downsizing the lower car or the $20,000 car. What's the $10,000 car? What type of vehicle is that? It's a sedan. It's a Subaru Legacy that I drive. I I do that's my commuter car I can be about 35 minutes every day. I could sell that for pretty much what it's worth

Starting point is 00:41:12 I'm not upside down on that one at all, but I would need something so I Have the cash to go buy another cheaper vehicle. Yeah Another question I would not get rid of that one. Um Here's where I'm at. I like that you're using your skillset to make money, like extra money on the side, but it feels like it's a slow go. I wonder if there's something else that you could do

Starting point is 00:41:37 that you can make a lot more money a lot faster. Because I think that if you're gonna hang on to this $20,000 car, you've got to have a number in your head that you're committed to. Like every month, we're bringing in an extra X amount of dollars. So it's probably you and your wife sitting down.

Starting point is 00:41:53 How many kids did you have again? We have three. Three, and what are their ages? Six, three, and one. Okay, woo, lorry. All right, I think it's you and your wife sitting down and saying, honey, what margin of time do it's you and your wife sitting down and saying, honey, what margin of time do you have? And looking at the other and saying, okay, well,

Starting point is 00:42:09 what margin of time do you have? And then putting your heads together and say, this is the amount of money that we're agreeing on that we need to bring in extra every single month so it's steady. And if you can do that, then you can keep this car, but just know those student loans are waiting for you in the wings. Yeah, that's right. But they can do this. Yeah. I know those student loans are waiting for you in the wings. Yeah, that's right. But they can do this. Yeah. I mean, this is doable.

Starting point is 00:42:28 So you got options there. I like it. All right, good stuff. All right, fun hour. It went fast. That means I think we were having fun, Jade. Yeah, we were. Okay, good.

Starting point is 00:42:36 All right, that would have been awkward had you said no. Well, I'm just kidding. I know. This is the Ramsey Show. I hate to admit this, but I don't always eat right. I know, I need to eat more fruits and veggies, but sometimes I just have to pound some chips

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Starting point is 00:43:51 The chuckle you heard in the background was none other than my good friend and co-host Jade Warshaw. She's going to try to keep me on track as well as give you great money advice, so pray for her. Well, you said you're welcome. Well, you thought it was like we're're blessing them with our presence and I was thinking you are welcome. Got you, like you are welcome here with us. You are welcome here on the show we want to help you. I hear you, yes Ken. I have to work better I think my

Starting point is 00:44:17 personal brand is making you think one thing. Uh-huh. No I'm just happy to be here. Let's go to Margie in Chicago, Illinois. Margie, how can we help today? Hi, thanks for taking my call. Just wanted opinion and see your thoughts on where we are today. So I'm 60 years old. I work full time still and I bring home, I'm a 1099 contract, but it is a renewing contract. It's just everybody's 1099 and my husband is 68 and he's retired. Um, and he brings home, I make 90,000 and my husband brings home about 6,200 with social security and pension. Um, I think we're on the right track, but he feels that we have enough money to,

Starting point is 00:45:06 he's not a big spender, but it's the nickel and dime where we go out to dinner, the some unnecessary purchases, small purchases. Is it in the budget? You know, I did write in initially, um, in an email and we don't have a budget. So I know that's going to be do the one dollar thing but we do manage to get into savings every month. We both manage to make sure that there's enough for my income tax that I have to pay on because I'm 1099. How much do you bring in? I bring in 90,000 a month. 75,000. 75,000 is that after the taxes or before?

Starting point is 00:45:46 Well, that's before, and then I divvy it up into the bank accounts, taxes, and then we are able to say for the top dollar Roth that we put into annually. What's yours after the taxes come out? Oh, geez, after the taxes, it's probably like 4,300, because that's income and property tax. So we have virtually no debt.

Starting point is 00:46:10 We have 9,000 left on our mortgage, no car payments, no credit cards. We have like 16,000 in our emergency and then like 50,000 in our high yield account. Okay. So, and I just keep saying, and we have six, 600,000 in retirement shape. Okay. But I just keep saying we still can't just foreverlessly, you know, always go out. It's expensive to go out to dinner.

Starting point is 00:46:39 And he thinks I'm so frugal and I'm like, no, we still need to stay to save for retirement because I'm so frugal. And I'm like, no, we still need to save for retirement because I do want to retire. Well, I think that the crux of all of this is without a budget, everything's a guess, right? It's like, I think that this is probably not good or I think that we don't have enough, but you really don't know,

Starting point is 00:46:59 or you think that this is outside of our range, but you really don't know because there's no set limit that's really telling you. So I think thing number one is if you guys get a budget and every dollar budget, it's going to take a lot of guesswork out of what you're saying because it sounds like you bring home $10,500 every month. That's a lot of money, especially for people who don't have debt. And so I think that if you guys do a budget and in the budget, of course You're you're adding the things that are very necessary, right? Your mortgage and your 15% that's going towards retirement and all of the other little you know things that you guys are paying for and if you just say okay and our restaurant budget is is five hundred dollars a month and our

Starting point is 00:47:38 You know saving for vacations. We're putting away this much a month. I think that that's going to be eye-opening for you I really do because you guys clearly have done a fine job saving You've done a fine job getting your emergency fund. You got fifty thousand in the HYSA, which by the way What's that fifty thousand earmarked for? Just for a lack of another word anywhere else to put it it's not earmarked for anything. It's just it's just their extra money The fake yeah the 16,000 an emergency is over a bunch of abundance from what you guys talk about But that's in case we want to do something for the house or we want to I don't know We don't even really touch it. We just it grows and then we move it over to high yield

Starting point is 00:48:21 So okay, and that's just because there we can't give any more to Ross. Yeah. So we can only do the 16. So, so you've got a couple options. I love that you've got the emergency fund there. That's exactly what it's there for the 50,000. Yeah. Maybe that's there for fun things that you want to do. If you want to take a trip,

Starting point is 00:48:36 if you need to do something for the house, that's there for that. You know, if you feel like it's too much, you could invest some of it into a brokerage to where it's still gaining a better interest rate over time you don't have to but you could what are you investing what's the dollar amount that you're investing every month at this point I'm sorry I'm confused by that did you tell me that you're still putting money into investments oh I we just I

Starting point is 00:49:04 just do a one-time drop-in after the first of the year because you have up to like April. So I just give that to our financial advisor, 16,000. Eight for him, my husband and eight for me. Okay, 16,000 every year, okay. Okay, got it. Okay, so you're doing that? I mean, I could give it to her monthly.

Starting point is 00:49:23 If I wanted to, I could give it to her monthly. If I wanted to, I could give it to her monthly. Okay. Then, you know, I think that, I mean, can, tell me if I'm wrong, but I think a budget is what's gonna unlock all of this. I think so. I think at the heart of the question though, Margie, from what I heard, it was you're trying to get you and your husband on the same page. You're using frugality, and you want a little bit more of a plan, you want to get ahead a little bit more, and he's going, man, I kind of want to enjoy life, we got enough. Is that the tension? It is, and I keep saying every time he wants to go out or, you know, we have a couple kids with a grandchild and, you know, if we all go out to dinner, that's easily $200 in a week, you know, we're more than, you know. Okay, so let me, so I think everything that Jade said is spot on. And I think that what she's saying is absolutely the key to you finally getting you and your

Starting point is 00:50:11 husband on the same page. With the budget, if you treat this budget for him as not this frugality play, but actually an intentionality play. In other words, he's just, he's kind of just, it's tension every time you try to say, Hey, I'd like to be a lot tighter. All the things. I mean, Jay gave you the way to do it. But I think to get him on board, it's less of a message of being tight and frugal. It has a, I think it's got an emotion on it that he doesn't like, and I don't think it's gonna break through. This is my hunch.

Starting point is 00:50:46 But if you come at it and say, hey, this is gonna allow us to spend like you wanna spend, but still we make the progress in these areas over here. And I think by doing what Jade told you, so it's everything she said, all I'm saying is, the way you couch it, this isn't manipulative. It's just speaking to his desire to live. He wants to live.

Starting point is 00:51:10 See it? I hit the nerve. That's why you're laughing. Well, yeah, because we're not, we take one vacation a year. We're not travelers, but we do enjoy vacation. I think that you're better. I think you're doing better than you think you are because when I plug your numbers and I go, okay, she's 60, he's 68, he's going to bring in 6,200 forever until

Starting point is 00:51:32 this point on. Right. Is there a good shape? If you continue that on for the next seven years, you're going to have what you're doing right now with the investing that you're doing right now. You'll have almost $1.4 million, right? So if you just lived off the interest, which was 140,000, I'm not accounting for inflation. That's far more than you're

Starting point is 00:51:50 earning now. So you don't even have to live. You could live off of 70,000 and be exactly where you are now. You are good mama. You've done it. And just meet him in the middle. The budgeting is for planning and intentionality, but give him some space, give him his, you know, fund, whatever that is. You guys put it in the budget, and that way he's got some margins and you guys are okay. Fun stuff, really fun call. All right, we gotta take a quick commercial break

Starting point is 00:52:18 because we got to pay them bill. 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 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.

Starting point is 00:52:44 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. 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.

Starting point is 00:53:06 Term life insurance. 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. Hey guys, good news. Presale is on now for my new book, Build a Business You Love. If you're a business owner, you know running a business is hard. That's why I wrote this

Starting point is 00:53:30 book, to share what we learned over the last 30 years so business owners can grow your business faster with fewer mistakes. Pre-order your copy today and you'll get access to over $350 in bonus items only at ramsesolutions.com slash store. ramsesolutions.com slash store pre-order today. Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw is with me. We're here for you America, 888-825-5225. Let's go to Newark, New Jersey. Jeremy is there. Jeremy, how can we help? Hey, how are you guys doing?

Starting point is 00:54:07 Great. How are you, sir? Better than I deserve. Oh, I like that. I should use that. Yeah, right? Okay, so basically, I'll try to make it quick. Right now, I am working a job in construction.

Starting point is 00:54:23 Last year, I made about 150,000. But I have an opportunity, I guess you could say in the same field, the same construction. But the thing is, I'll be making significantly less money, I guess in the first couple years, but then it'll kind of even out and then I'll at some point make more after I think like four years. Um, the new position would, yeah, the new position would be a lot less labor intensive, a lot easier on the body. Okay.

Starting point is 00:54:55 Um, people that are in my role right now in my current company, maybe the guy who's been here the longest has been there for like 10 years, the people I talked to in the other position I've been there for like 30 40 years okay so so this gonna be easier on your body as a pro looks like it has more longevity is a pro a 40% cut is not a pro and And I'm a guy that has entertained things like this before. But four years. So to me, the question, and the only question that I need an answer to on this is, can you absorb that? Is it taking you to a different state or cost of living? Uh,

Starting point is 00:55:50 or you've got so much margin in your life that 40% won't really be obvious in a painful way. That's what I need to know. What can you sustain that? I would have to cut a lot of stuff, which I'm perfectly fine with doing myself. Um, are you, are you single? I'm not single. Me and my girlfriend been dating for a few months now. Well, you're single as far as I take it because she's used to Right. My point is is you're not in a marriage Situation where and you don't have kids, right? Right. Do you have debt?

Starting point is 00:56:22 I'm sorry. Do you have debt? All I have is a car loan that I actually got once I got this job I got a little excited making the extra money. So before this job I was making maybe like 40 to 50 thousand dollars a year. Okay, so this was a big jump for you a major jump So what are you making now? Well, my salary I guess if I were to work 40 hours a week would be around 120. I guess last year I did a little bit of overtime so I made 150. Oh, okay. Yeah, I just, I'm going to tell you that you need to be looking for other opportunities

Starting point is 00:56:59 that don't require a 40% cut. I understand the physical toll on the body. I do get what you're saying there. I understand the physical toll on the body. I do get what you're saying there. I see the longevity play. If I were in your shoes before I did this, I would be making sure that there were no other better options. And I don't believe that that's the case, Jade. I just don't think that's the only option he has. I'm just trying to understand. So you got this gig that it's paying more than you were making and you got excited, got the car. This other thing came along. Were you looking for something else?

Starting point is 00:57:31 And if so, what was the main driver? Was it the physicality thing that you were like, I can't keep doing this to my body. I got to get out of this. Is that what happened? Or did that just happen to be you know, part of this? Well, in, while working construction, I'm an operator, right? Um, but I'm not like running. I'm not, how do I say, I'm not running, um, and like an excavator or anything like that, I'm more operating, uh, like a, like a truck. I'm just getting, what I'm trying to get at is for you to tell us why you want to leave this job.

Starting point is 00:58:07 Because if you can't articulate a clear reason, then what's the point of leaving it? Yeah, I don't feel like you're in an emergency situation is what she's getting at. Like this feels like. No, no, no. It's definitely not an emergency situation at all. It's more like what can I see myself doing in the long run? It'll be part, oh, so I should mention also, this is a union job.

Starting point is 00:58:27 It'll be part of the same union, just a different kind of like sector, I guess you can say. Well, I'm gonna tell you right now, I am never gonna tell somebody to take a 40% pay cut and sit four years in that pay cut to get to move up in a union. It's too risky. I'm not gonna put my future in the hands of the union. Sorry.

Starting point is 00:58:46 So I'm going to catch hate for that. But that's just what I believe. It's okay. I get it. So it's not, it wouldn't be a 40% pay cut for four years. Like the first year would be 40, the next year 30, next year. Oh, well, buddy, you buried the lead. You didn't tell us that. Oh, sorry. Yeah, yeah. So it raises 10% every year? I go up 10%. Yeah, I go up 10% every year until I'm at the 100%. I personally would. Okay, here's my ruling. I'll let Jay get the last word on it because I've heard enough. I personally would not do this. However, from giving you advice, if you believe this is your best ladder for the future that you want and you can absorb the cut 40% one year, then it's only

Starting point is 00:59:37 30 then 20. If you can absorb that not going to debt and you got enough margin to live comfortably, then I wouldn't hate it. but I would not do it. It sounds like I'm splitting the baby, but I'm not. No, I get it. This is, what do you say? I wanna know what you owe on the car. I wanna know what you owe on this car. Oh, okay.

Starting point is 00:59:56 So on my car, I owe about 30. My plan was if I were to do this, I would wanna pay off my car before I even consider doing it. Okay. I'm fine with that. You score brownie points right there, Jay. You scored some points. Because what's the payment on the car?

Starting point is 01:00:12 Actually, the payment on the car is about seven hundred dollars a month. Exactly. And so that you're going to feel that. That's eighty four hundred dollars a year, pal. Uh huh. Yeah. Yeah, you're going to feel way if you take this other job and so that would be my My you know caveat to this is yeah pay that thing off and then you want to take personally um I'll be honest. I don't feel like you've made it very clear Jeremy what this job is really gonna do for you I I'm not sure that and I'm sure maybe you know what deep down inside

Starting point is 01:00:44 But you didn't make it really really clear to us going to do for you. I'm not sure that and I'm sure maybe you know it deep down inside, but you didn't make it really, really clear to us. So I'm still struggling with why it's feels like something you need to do. I feel like it's something that I could see myself doing longer than what I'm doing right now, especially with like, Yeah, but see, that's great. Like I said, my, my Okay, I'm interrupting.

Starting point is 01:01:02 I'm sorry? I'm interrupting because my partner figured it out. She got to the core. You're just looking at this as this is good. This is good long-term. We want great for you. What's gonna make Jeremy get fired up on a Monday morning 20 years from now?

Starting point is 01:01:20 I don't think this is it. Am I right? Well, I'll be honest. This has been the only job I've ever had, like the women right now, where I'm actually excited to go to work. And when I look at the other people doing their thing, I look at them like, I wish I was in their position. And even though I don't know my job so much, I still kind of wish I was in their position.

Starting point is 01:01:36 OK, that's all that we're getting at. OK, now, Ken, you can. Well, I mean, that's what you were getting at. And kudos to you. That's what I teach. And I believe it's like, is this the long-term play? And a long-term play that we go, I'm excited about this, not, it's a good job. It's okay. Yeah. So you do love your job. Okay. All right.

Starting point is 01:02:01 Then we spoke with like half of what it is now, I would still love it. If it's the difference between I love it or I love it more, then you go with you love it more. Yeah. All right. Well, there you go. Get your house in order financially before you take this move.

Starting point is 01:02:16 Cause you don't want this to be, you don't think, okay, this is gonna be fun. And then you get in and you go, oh, this is a lot harder than I thought. This is, I call it my half marathon decision. I thought, oh, this is a lot harder than I thought. This is, I call it my half marathon decision. I thought, oh, this will be a great test and it'll be fun training and it'll be all these things. And then your boy got, no, it wasn't.

Starting point is 01:02:34 Your boy got into it and was like, I'm a grown man. Why am I out here running for two hours on a Sunday afternoon instead of laying on my couch watching golf? Yeah, but I didn't, it wasn't grit that was worth it to me. There wasn't anything, in other words, I thought I'd be motivated to do it and I was motivated to get through it.

Starting point is 01:02:52 Big difference. Yeah, there is. You know what I mean? I'm not like you. You, this woman, folks, she is an iron woman. I mean, you can just go run marathons. Like no big deal. Ran a marathon. Yeah but the way you train you're just too you're too you're too disciplined for me on that.

Starting point is 01:03:11 I'll play pickleball for three four hours. Now that requires a lot of discipline. But I'm not gonna go running on the road somewhere for no purpose at all. What am I doing? I'm just trying to run back to the place where my car is. Does it make any sense to me? But I digress. This is the Ramsey Show. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent

Starting point is 01:03:37 to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling, they're people you can trust to have your back from the first call to closing day. Find a Ramsey Trusted Agent near you at ramsysolutions.com slash agent.

Starting point is 01:03:57 That's ramsysolutions.com slash agent. This is the Ramsey Show. I'm Ken Colman, Jade Warshaw is with me and we're here for you. 888-825-5225. So I gotta give it to you, Jade. We've got a fun email we got from Nate in Michigan. And this is fun.

Starting point is 01:04:18 It's kind of related to a segment you've done before, asking for a friend. Yeah, asking for a friend. It's whenever you want to know something that you feel you should know at this point in life, right? You don't want to be today years old where you find out about something that you feel like you should have known forever. And so instead of putting the heat on you and saying, Hey, can you tell me about this? You put it on a friend. Yeah. So yeah, my imaginary friend asking for a friend, right? So Nate from Michigan is asking for a friend. We don't listen. His name is

Starting point is 01:04:44 probably not even Nate Yeah, it's fine. He says I just wanted to know the true meaning behind the phrase cash flow okay, sometimes it seems like it means simply the that we paid cash for something or For example, we cash flowed the building of our house, right other times It seems like it's a phrase that's being used in a business sense, right? Is the business profitable? Just wondering what that means. Okay, so this is good.

Starting point is 01:05:09 He's right, we do kind of use it in two different ways. Yes, 100% cash flow when we're talking about personal finance, it means being able to use the cash that's flowing in and out of your pocket to pay for things, right? So if I said, oh, I bought a new car and I cash flowed it, it means that I used money that was out of usually its monthly cash flow and said, yeah, I have enough in my monthly money to cash flow this.

Starting point is 01:05:35 I don't need to dip into savings. I didn't need to borrow any money. And I used the cash that I had on hand. But there is also a cash flow that we would say in business sense and it's not much different. I would just say that in business sense when we say cash flow we're talking about the movement of money in and out of the business right. So we're talking about that flow of money it could be things like inventory or supplies or operating expenses or product sales. It's

Starting point is 01:06:00 money flowing in and out of the business and again all of those things are things that we're paying for with the cash from the business. So and it's money flowing in and out of the business. And again, all of those things are things that we're paying for with the cash from the business. So, and it's happening over a period of time. And so it's still this idea that whatever it is that we're paying for, we're using cash for it, whether in a month's notice or over time with cash. So hopefully that provides clarity. I mean, obviously the best way to take control of your cash flow is to

Starting point is 01:06:27 have a budget. And when you do that, you can see how much cash flow is at your disposal. So you could do that with every dollar if you don't already have it. It's a good, good thing to have. And I gotta tell you, anytime you can cash flow something, it just feels better than pulling it out of savings. I know that savings is there, but I despise. I'm with you. With a deep soul hatred.

Starting point is 01:06:49 Yes. Pulling money out of the big fund, the emergency fund. I agree. I don't like it. It's not even- I try to cash flow everything. Yes, yeah, even something that is a legitimate emergency, I'm like, no.

Starting point is 01:07:00 Yeah, oh yeah. Never. Yeah. I get it. That's how I got a free roof by the way. Yeah. Tell us more Ken Coleman. Well, the short answer is, um, had to, had to replace our roof. Not thrilled about it, but hit me with the free part.

Starting point is 01:07:16 So I started thinking, I gotta get this situation. I don't want to pull out of that. So I was like, so the guy comes up once he wants to do the roof, I say, look, here's the deal. We're very connected in the neighborhood. You do a good job. I help you get business. How you feel about that? He says, tell me more.

Starting point is 01:07:35 We talk. Then he says, all right, I'll tell you what. I can get it to a point where it's just you're deductible. So I thought, okay, I like that. So he calls insurance up, because insurance had previously denied us. He gets on the phone with him, makes the case, insurance says we'll cover it, then it's a deductible. So I go back to him and I go, how about you guys eat my deductible? I get the free roof and in turn, I

Starting point is 01:07:58 promote your company in my neighborhood through some social and through some key people that I know. Yeah. He says I'll do it. Holy smokes. And guess what? We've got him four different roofs. So I just thought, I don't wanna touch. Then I got aggressive. Like, so I went from, I don't wanna.

Starting point is 01:08:15 It made you come up with better ideas. And I didn't wanna have any cash come out. So I like took my shot. Well, the worst he could say is no. Yeah. So guess what? He's now had four roofs that I'm aware of that came directly from us. Now he could say is no. Yeah. So guess what? He's now had four roofs that I'm aware of that came directly from us. Now he's in the

Starting point is 01:08:27 neighborhood. So I'm just saying. Next on the list is you start taking a cut. Where there's a will there's a way. Yes sure. Where there's a will there's a way. That's true. Am I right? That's the point of it. Forget the details of my story. You're exactly right. I started trying to get creative with how I wouldn't have to touch my emergency fund. Because it came out of the blue. Mm-hmm. Like it was a problem. We didn't know about So now I'm like, come on man. Ken good job. You know, that's all I can fun stuff Sean is on the line in Denver, Colorado Sean. How can we help? How are you guys doing? Well, sir, what's going on? Good good. So my question is I

Starting point is 01:09:04 My wife and I we had a couple issues with the bank and our mortgage and our mortgage rate is actually increasing to a point that it's, this is the second time it's increased and it's getting to a point that the monthly payments are getting a little steep. And so we do have about 35 grand in savings. Not sure if that's usable in this case, but not quite sure what to do next. Is this an adjustable rate? So it actually started out as a 30 year fixed.

Starting point is 01:09:40 We were at 3.8% and the bank called us a couple days before closing and said, Hey, we accidentally wrote up your loan documents for a stick built home and you guys have a manufactured home. So we're going to have to rewrite those. So they did. And we had to sign again and that was about a month's difference. So our rate went from 3.8 to four and a half. And then about a day before closing, they called and said, well, you know, our bank sells these mortgages and nobody wants to buy this one.

Starting point is 01:10:10 So we're going to have to drop you guys again. But they had a third solution. And my wife actually works for this particular bank. And part of the employee benefits package is they help you get into a first home. Okay, sounds good. Um, and so what they did is they said, okay, we'll go ahead and we'll get you guys a mortgage, um, we'll keep it the four and a half percent. Okay. And in two years, or excuse me, in three years, you guys can go ahead and refinance

Starting point is 01:10:38 with us, we'll keep your rate and we'll lock you in for 30 years. It'll be great. And so it's the end of those three years now and should have read the loan documents a little closer. They aren't going to keep the rate. It's actually going up 2%. Oh man, so it had to lock in at whatever the rate is? Like, is that the current rate?

Starting point is 01:11:00 Yes. Yeah. Yes. Oh man. So, I mean, we're still at the point that it's, it's, you know, affordable. Well, tell me, tell me numbers wise, what it's gone up. It went from what to what?

Starting point is 01:11:14 So we were paying 2,500 a month, and now it'll be 3,500 a month. My guy, wow. Okay. Yeah. Yeah, you're feeling that. So the bottom line is, how would the 35, would the 35,000 even help you, because you're going to have

Starting point is 01:11:27 to refi. Theoretically, can you? Yeah, and so this is only good. What they did was, they came back and said, hey, you know, we did make a mistake in the beginning for you guys, so what we'll do is we'll only raise you 1% this year and then 2% next year, and we'll extend your loan for two years. I tell them to pound sand. That's like, it's like I made the mistake so I'm only going to penalize you on my mistake this much. But you're still gonna feel it. They're just

Starting point is 01:11:56 spreading it. It's like, it's like spreading out your punishment. You get one whooping today and then you get one whooping a year from now. Is there something with your house? Is there something with the type of house because it's a manufactured house that that's why nobody wants these loans? I think so, yeah, because there's only one buyer in this bank that buys manufactured home loans and they ended up being, they were full at the time. They couldn't take any more loans. So that's what happened as well.

Starting point is 01:12:23 Do you have any equity in this house at all? You know, it looked like it, when I look at the estimate online, it says it's gone up about a hundred thousand from when we purchased it three years ago. If it was me, now Jay, tell me if I'm being too aggressive here, but I'd get out of this house.

Starting point is 01:12:38 Instead of keep messing with this, if it's true that he's only got one lender who will play ball with him, he's going to keep getting jacked around here. Well, I have a couple questions. At the end of this three-year term, whether they do it all at once or over the three year, you get slapped a little bit each year. Is that the end?

Starting point is 01:12:58 So we only have two more years and then we have to, that's it. The loans matured and we either need to refinance with them or with somebody else I mean preferably 25 seconds. Do you love the house? Yes, okay Your choices are you find a way to get a thousand dollars more in your income because you can't if you don't do that This is going to drain everything So if you don't find a way for you and your wife to bring in five500 a piece every month that's sustainable, you can't keep this house because... Sell it. Yeah. I'm all for selling it man and rent for a while get yourself a house

Starting point is 01:13:32 that doesn't have these kind of limitations. Or maybe it's you paying off debt and freeing that up in monthly payments. Yeah. This is the Ramsey Show. Before you put down a ton of money on a new purchase like a car or a home, you probably spend countless hours researching. You read reviews online, make a list of everything you're looking for, and compare prices to get the one that's right for you. But it's also a good idea to put in the work searching for the right insurance coverage. We know it's not always easy to find someone who cares

Starting point is 01:14:05 more about you than making a buck, but you shouldn't trust just anyone to protect your biggest assets. That's why we've done the work of finding trusted pros for you. Whether you're looking for home and auto insurance or any other type of coverage, Ramsey can help. Our Ramsey trusted providers have all been vetted and coached to serve you like we would. I'm so confident in their quality service and coverage because I use them myself and recommend them to my team members. Find what you need at ramsysolutions.com slash insurance today. That's ramsysolutions.com slash insurance. This is the Ramsey Show. I'm Ken Coleman.

Starting point is 01:14:48 Jade Warshaw is with me and we're thrilled to have you. 888-825-5225. 888-825-5225. We get calls, it feels like almost daily, from people who are launching a side business, they want to make some more money, whether that to be pay for college, pay off debt, build up retirement, or it's just about living the dream. And building a business and running that business effectively over the long haul is very, very

Starting point is 01:15:19 difficult. And that's why we're very excited that Dave's got a brand new book out called Build a Business You Love. He's unpacking what it took to take this business from a card table to where it is now, over a $250 million business. So it is the baby steps for running a business. That's the way Dave describes it. You can pre-order it now for $29.99 and you're going to get over $350 in free bonus items just for purchasing it ahead of time. You get to pre-order it and it comes to you when it releases.

Starting point is 01:15:50 You can pre-order today at ramsysolutions.com slash store. That's ramsysolutions.com slash store. Or the link is in the show notes if you're on YouTube or podcast. All right, to the phones we go, Patricia is joining us now in Long Island, New York. Patricia, how can we help?

Starting point is 01:16:10 Hi, thank you. It's great to be talking to you. I actually just heard of Dave Ramsey like six or eight weeks ago and I've been listening compulsively since then and a lot of it has resonated with me. Great. My deal is I went through a devastating divorce about 18 years ago,

Starting point is 01:16:28 left me financially stripped. I've worked hard since then, um, put the kids through college on my own and what's killing me now is the parent plus loans. I just paid off my car from having listened to Dave. So thank you for all that advice from your area. Um, and have one other debt, which is $2,000. So these Parent Plus loans are about $87,000, and I'm already not a spring chicken. So the retirement years are scaring me to death, so I'd like a little direction. Okay. I'm curious about the kiddos that you helped out with these loans. What are they doing now?

Starting point is 01:17:06 Well, my daughter is now in a good spot that she just began, so that's not, you know, they have their part of their loans and I have my part. Okay, so the 87 is your deal, just yours? Yeah. Okay, all right, I'm deal, just yours? Yeah. Okay, all right, I'm sorry. I should have asked that right out of the gate. Sometimes I'm wondering if parents are paying everybody else's or just yours.

Starting point is 01:17:33 So okay, all right, so you've got the 87. What's your income? It's just under 70. Just under 70. Okay, and is that your only debt at this point? You mentioned you paid off the car. Is this it? That and a $2,000 something. These parents plus loans and then another $2,000 loan.

Starting point is 01:17:52 Another $2,000 loan. Okay. And that's just a personal loan? Yes. Okay. All right. And what do you have saved? Do you have anything saved? Yes, I started a high yield savings account From you all's advice. I have a couple of IRAs One is an IRA one is an IRA. I have Checking and savings what's in your IRA come out And what's in your HYSA? The HYSA is five because I just started it. The two IRAs come out to about 40,000. Okay, and anything else? Any other

Starting point is 01:18:40 money anywhere we should know about? Well, checking is about 45, saving is about 290. When you say 45, you mean 4500 or 45, like tell me real, 4500, 45. I'm sorry. 45,000. 45,000 in checking. Yeah. Okay.

Starting point is 01:19:00 Another savings account is 21,000. Okay, good. That's pretty much it. Okay, so the good news, what I'm really excited about, Patricia, is you've got money laying around, which we need. So if I wrote everything down correctly, obviously the 40,000 that's in the IRAs, we can't touch that. But you've got 45,000 sitting here, plus another 21,000. So that's giving me 66,000 sitting here plus another $21,000. So that's giving me $66,000 right there. That's the majority of these bills knocked out.

Starting point is 01:19:32 And technically because you're in debt, I know you're not going to like this, but because you're in debt, that HYSA needs to go down to $1,000 and we can take the other $4,000. And now suddenly you've paid off $70,000 of debt in one day. And if we do, we can just say that. Yeah, but here's the thing. When you called in, you didn't say, my biggest problem is I'm scared to spend my savings.

Starting point is 01:19:58 My biggest problem is I'm afraid that I won't be able to, you said the biggest problem is these student loans. And you're right. Those being to, you said the biggest problem is these student loans. And you're right. Those being around your neck is the biggest problem. So if you can knock those out, how old are you? 68. 68. If you can knock those out and get them out of your hair,

Starting point is 01:20:17 how much money a month is that free up in payments? High 700s. Yeah, high 700s. Yeah. Think how much you can live off that. You can invest some of that. That really does clear things up for you. Now, then once we pay off this debt, now we have to look at, okay, like you said, long

Starting point is 01:20:37 term, what's the retirement strategy? But A1 is we've got to get out of this debt because if we've got this kind of debt, who cares what the retirement strategy is? That's right. I know, I know, I've just been living in worry. Yeah, so I think that- For so long. I think paying these off is going to be your best bet

Starting point is 01:20:55 and it's gonna be painful, but then we have to turn around and say, okay, what's your living situation? Are you a buyer? Are you a renter? What's going on there? I rent. You rent, okay.

Starting point is 01:21:04 So your goals are to try to find stability in this situation. So right now the debt is causing instability, probably being a renter is causing a level of instability. My guess is that when you retire, you'd probably want to buy something and have that as a fixed number on your you know, on your budget. So I think those are the big goals here. I think in your mind you have to go, okay, I'm working.

Starting point is 01:21:27 I'm working another six years or so, and I'm piling away as much cash as I possibly can to try to make that happen. But first on the list is these student loans and making sure that you and your kids are sticking to what you agreed to pay because are they sticking to their end of the bargain? Yeah as far as I know we don't talk about it much but I think you do need to talk about

Starting point is 01:21:55 it because what would be are both of their names on it or just yours? No these are just parents plus loans for me. Okay because if they name. Okay, because if they don't pay theirs, then it's still affecting you, right? And at that point it's like, well, what was the point of you even paying your part if they're not paying their part, right? Well, they're the separate from mine. Oh, okay.

Starting point is 01:22:17 I thought you were saying that they had agreed to pay part of the parent plus loans. Oh, no, no. We split everything from the beginning. They have their loans and I have mine. Okay, I see. Well, no, no, we split everything from the beginning. I see their loans and I have. Okay, I see. Well, in that case, yeah, full speed ahead on paying off this 87,000 clearing your name on that. It's going to free up so much more income in your month to month mental space. You're going to have a lot more peace and then you can really clear

Starting point is 01:22:38 see clearly and go, okay, what to do with this 40,000. The good news is it's tucked away. It's going to continue to grow. It's not a lot of growth, but with that, with possible social security, you've got your work cut out for you, but at least you're making steps forward. In a situation like this, there's always a measure of peace that can be acquired. So you're going from where you are now,

Starting point is 01:22:58 you pay these loans off, you've got even more peace, you start figuring out long-term what you want your living situation to be, you've got even more peace, and so we're just taking it one piece at a time. Yeah, and listen Patricia, there will come a point where you got to think about selling stuff, making extra money, and you go, okay, what can I do every month? Could I make $1,000 a month in additional money that would go towards the loan, or is

Starting point is 01:23:21 it $2,000? You start to play with these numbers, and at some point when you begin to deliver on this you're going to see the momentum and you will be able to get rid of this and which will give you a chance to retire with some dignity. So you're going to have to be intense. But this is actually very doable but a lot of intensity over a short amount of time will get you there. Yeah, I've tried the side hustles and other things. You're doing it. You paid your car off. How expensive was that car loan you told us about? 17k. Come on. So you're doing it. It's not like you don't have any track record here. So get your chin up Patricia. All

Starting point is 01:24:00 right. No I know I've done a few things right and I've never been one who have depended on credit cards a lot I don't like them. You're a good lady. You're a good mom. I've done a few things right along the way. Hey, no shame in your game I'm not kidding you shame will hold us back. Yeah, that's right breaking through stuff like this So you're okay. No shame in this show at all for you. That's why we do this. This is The Ramsay Show. Thanks for watching!

The Ramsey Show - Math Is Important but Behavior Change Is What Matters

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