The Ramsey Show - Normal Is Broke... Do You Really Want To Be Normal?

Episode Date: November 12, 2024

📱Watch the full episode for free in the Ramsey Network app. Rachel Cruze & Jade Warshaw answer your questions and discuss: "How do I get out of a financial mess on my own?" "Can I afford to buy out my wife's car lease?" "How can I be a good influence for my cousin?" "We live paycheck-to-paycheck and can't get ahead," "Should we move to get away from our weird neighbors?" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💤 Visit Helix Sleep for special offers! 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for18% off at The Nokbox 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 💵 Start your free budget today. Download the EveryDollar app! 🎄 50 days of Christmas deals are here! Get 30% off meaningful gifts. 🏠 How to Buy a Home Course 🏘️ Free Tools & Resources to Reach Your Home Goals 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

It's a bonus session. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. 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 author, Jade Warshaw. And we'll be answering your questions about life and money, relationships, career. So give us a call at triple eight, eight two five, five two two five.

So we're gonna start off in Spokane, Washington and we're talking to Jules. Hi Jules, welcome to the show. Hi. How are you doing? I'm okay, I'm just a little bit stressed. All right, how can we help? So I'm a single mom on government assistance,

and I'm just feeling really stuck in the system. Okay, tell us more about what you're receiving and what's causing you to feel stuck. I have like so I have food stamps and then I have like Medicaid or whatever for for me and my my kiddo. But I'm just feeling stuck because I had gotten a job over like the summer working at like a daycare. And I couldn't accept the position because I, I'm sorry, I'm nervous.

I, I, um, like I had to run it past my complex because I live in low-income apartments and they up your rent like a percentage of what you're making. Mm-hmm. Yeah. And I had told them like that when I moved in my apartments around April that I was getting child support at the time and I was, which was like, I don't know, $600. But then they can't, sorry, this is confusing. They can't adjust that until another year. So they can't fix that I'm not getting child support anymore until a year from now. So the $600 stopped and now your rent is higher.

Yeah. Okay. So tell us. So I had to give up my job so that I could keep my benefits. And, um, well, I had gotten my son into daycare, but the daycare funds for low income are now not, they don't have any funds. What is your income? Okay. What is your income? I don't have any. I'd say like my mom helps pay for my car and my phone. Okay. And then I get maybe $200 child support maybe. Okay. If that. And what are you making? Oh, nothing. Why not? You don't have a job. So because what you're saying is when you went to actually start working,

then you basically priced yourself out of the situation you're in from your apartment to everything else. Is that right? Right, right. So like I was losing more than I was making. How quickly will your rent, because you said it will take them a year to realize that you're not getting the extra $600 a month.

Will that same be on the other end, that if you start working and making money, will they raise your rent? Yes. Okay, but why would they raise it, but not lower it, depending on your situation? I don't know, honestly, I'm really confused about it because I don't think I'm doing that right.

Because here's the thing, I could understand the rock and the hard place that you're in, of like, okay, once I start this track of actually making some money, then the life as you know it will change. But I wanna encourage you, the life as you know it will change to something better. Something that you have way more say over your life.

You have way more choices and options and freedom and opportunity to do some amazing things. And so that jump is gonna be scary. And I wanna help you real quick. We just have a few minutes to try to set you up well for when that jump is gonna occur. Not if, because I do. I want you to be working and I want you to be able to support. Is it,

do you have one child? Yeah. Okay. As a toddler, he's almost two. Okay. And your mom's helping you out a little bit with childcare. It sounds like, well, she doesn't help me with childcare, just, just with finances. Just with your phone and your, and your car. So with your car, do you have a car payment that she's paying or is she helping you just with gas and everything else? Just with gas and like insurance. Okay, okay.

So I think the way we work this backwards, and we're gonna give you all the materials that you need to get started, but the way to work this backwards is what's that threshold of you losing your benefits? So figuring out what that is and then figuring out, What's that threshold of you losing your benefits? So figuring out what that is and then figuring out, okay, if I do that, how much more do I need to support myself?

Have you kind of done that math and said, here's what I need every single month in order to survive? Absolutely, yeah. No, I have done the math. And when I had qualified for that job, I actually sat down and went through all the finances. And like I'm in counseling, I go to like doctor's appointments and things like that.

And I kind of did the math and I was like, okay, I'd be losing more than I was making. And then the insurance for the new job wasn't kicking in until 90 days. And so I was like, oh shoot. So. Okay, but what do you need? What's the number that you say if I get,

you know, $3,500 a month or $4,000 a month, I will be able to pay my rent, my car note, my kid goes to daycare, and I, you know, we have groceries that you're covered. What is that number? So I haven't, so I didn't take the job, so I kind of lost track of the finances, but let me ballpark it.

I don't wanna say like- Well, that's your homework,park it. I want to say like well, that's your home maybe like honestly how much I Maybe a thousand because I'm thinking like I have my phone if I were to pay all my bills myself like what about housing? Because will you price yourself out of the current situation you're in yeah So I'm in the income, so probably. We're talking about a situation, Jules, to be clear, we're talking about a situation where you don't have government assistance,

where you are paying your rent. But like not including low income apartments either. That's right, I'm talking about a situation where you pay for everything and you're no longer. Maybe 2,000 maybe. Okay, so you need $2,000 a month. So what I wanna encourage you is that's out there. It's out there today.

And it's gonna require you making, working more than 40 hours a week possibly. But I mean, you can go over, there's a lot of places like Walmart and even fast food that are paying over $18 an hour if you can work your way up. So it's out there I think right now the biggest thing that you're dealing with is this kind of mental block because you're used to this and it's very hard

To get your mind around something that you've not really experienced, right? And you're like, oh my gosh, I need this I need this and the truth is you're not far away from being completely free from this Yeah, and I would and I would tell you, Jules, too, especially when it comes to money, the more facts you have, the easier, in a sense, being able to process and make decisions becomes. Because when it's just this idea of, gosh, I don't even know how much we spend here,

I don't know what apartments will cost. So to Jade's point earlier, your homework would be to find actual numbers, actual numbers of a one bedroom apartment somewhere, actual numbers of, hey, here's really do what I spend at the grocery and per week, here's what I think it will be. And it doesn't sound, it's not this, I don't think it's gonna be this outrageous number.

I mean, just like what you just quoted us even, I'm like, yeah, $2,000 a month. I mean, that's 25, thirty grand a year after taxes so like that that is very very doable Jules and so if you stay on the line Kelly's gonna pick up because we want you to be able to have the information to help you so we'll give you financial peace University which is our nine lesson course we're gonna give you every dollar which is every dollar premium to hook up to your bank to actually create a budget. And when those transactions come in, Jules, actually track them and drag and

drop them and start telling your income when you get a job, hey, this is where this is where it's going. And then we'll give you some of Ken Coleman's material because there's a get clear assessment. And I want you to take this Jules, because I want you to have the ability to see yourself and your giftings and what you're wired to do and find a job in that lane. So we believe in you, Jules. You're doing an incredible job as a mom. So stay on the line, Kelly, we'll pick up. What does the future hold for business?

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So you can go to Ramsey solutions comm slash store or click this Click the description if you're listening on podcast or watching on YouTube All right, let's go to Anna Marie Island in Florida and let's talk to Amy. Hey Amy, welcome to the show. Hi how are you guys? We're doing great, how can we help? So I'm a little confused as to where to go. I own two properties. One of them is on the island and that property I owe about $400,000 on. It's worth $700,000. My monthly payment with HOA and everything is $4,500. I own another property just over the bridge. It's a bicycle ride to the beach. That is an Airbnb property. I've been making about $50,000 a year on, but I don't owe anything

on that property. That is worth about $650,000. What I am thinking of doing is selling my property on the island. I'm kind of tired of the HOA stuff and actually I'm in the process after Hurricane Milton renovating my Airbnb property right now and I'm thinking I want to move into it. Wow. I'm thinking of some under on the island and moving into the house just over the bridge then I'll have no house debt. I had 200,000 in cash after the renovation left over. And then if I sold the condo,

I would make 300,000 profit off of that. So I'd have a half a million. The only debt I have is my car, which I just bought in. I know that it's well it's kind of against Dave's rules I know but I bought just bought a new infinity I was 70,000 on that okay $13 a month payment I have a 70,000 IRA a $20,000 fidelity account so what's wrong with what's wrong with doing this deal and moving into the RB Airbnb and selling the one on

the island? What's wrong with that? It's not what's wrong with it. I think that's I think that's a smart decision. The question I have for you guys is, so I'm a real estate broker, I've done real estate, you know, renovation, flip building on all my life. I'm a single woman, 55 years old. If I did this move and my condo actually sold and I got into the house, I have a half a million and I need to know what to do with it because I'm most

likely to want to buy real estate and fix it and do all that. But, and I'm not knowledgeable at all about the stock market. I'm trying to just wrap my brain around all of it and learn because I'm getting to the age where I want the money to work for me instead of me working the money, you know? Yeah, for sure. Yeah. How old are you? So I'm 55. Okay, what do you do for a job? I'm a real estate broker. Oh, that's right. You said that I'm sorry. How much do you make a year doing that? Well, that's um, that varies quite a lot but um Anything from a hundred grand to three hundred grand a year. Okay, and then your primary residence where you live now What is the situation there?

So the condo on the island is, I owe 399 on it. Is that where you're living? Is that condo? It's been my primary residence. Oh, it has, okay, I'm sorry, I gotcha. Okay, perfect, perfect. I'm a renovating it,

but I'm thinking about moving here. Yeah, that's great. That's great. Okay, so the $500,000 cash. I mean, what I would do, honestly, with it is I would take some of it, I would diversify it. And I love the idea that you like real estate, and maybe because I come from a real estate family, but I think it's a great, I think it's a great option to have, especially if you know what you're doing. And a lot of people don't, but you do, because you live in this world, and it's a great way to invest.

So I would take some, Amy, and I would probably max out a Roth IRA every year. I would make that part of my rhythm. I think it's $7,000 per year that you can do. So I would allocate some money to make sure that you had the cash flow, and that can come out of just your income that you're making anyways, it doesn't have to come out of this 500,000. What is your income? Just anywhere from 100 to 300. Yeah anywhere from like 100 to 300 Yeah, so I would so yeah, so that would be I think that would be something I would do and then I would still you know

I think you think your IRA, do you have any other retirement investing do you like within your brokerage, any kind of 401k or anything? I've always felt like I do better with real estate than I do with like, because I have always scared me, it's always been an unknown.

Well, and so let me tell you this there is a Level of risk that I wouldn't take in the stock market when you think about single stocks and there's ways to do it That's risky and then ways that actually Have way less risk and you still get a great rate of return on average anywhere from 10 to I mean 12 13 percent I mean this past, the market did incredible. So it was even more than that. But doing mutual funds, investing in mutual funds, which is gonna be 90 to 200 stock within a fund.

So no single stock investing, all of that. So really you limit your risk when you spread your money around. And so that would be the bet that I would do. I would do anything I could to do some tax-favored plans in retirement. So that would be the bet that I would do. I would do anything I could to do some tax favored plans in retirement. So that would be your Roth IRA.

Yeah, within your brokerage, I don't know if you're, do you own the brokerage or you work for someone? I own the brokerage. You do, okay. So I would look into like a, I would look into it like a SEP. I mean, I would look into a couple- Do an individual 401k.

Yeah, I would look into a couple of options just to put some money in from a retirement standpoint because that is gonna be, it's gonna have more tax advantages than just going into the market on your own personally. So I would allocate some money for that. I would look around, I mean, I don't know what real estate is going for in your area,

but I mean, if you can find something and pay cash for it and have another rental property to the side. I mean, I think that's a great option as well. So yeah, there's nothing, you can't, I wouldn't say do anything completely wrong unless you took all this money and just like blew it or put it all in like one single stock or something. But I think real estate and some in retirement

would be great. But I would also recommend sitting down with one of our SmartVestor pros. We actually just met one in the last break that's here from Seattle. Yeah. And a SmartVestor pro can sit down and really help look at all of this with you as well

and just kind of your long-term plan of retirement, long-term goals that you may have and be able to let this money work for you in that way as well. Yeah, I think that you're doing well. The thought I keep having is, you know, a lump sum is going to double every seven years. So let's say you sold the house on the island, you got the 300 K. Let's say you dropped that in the bank and then you invested the cash that you have into real estate. I mean, if you do that and you continue to add 15% of your income

every single month, I mean, in 10 years, I mean, you're going to be looking pretty good. You're going to have around 1.3 and that's just assuming, you know, you're kind of midway at that midway point in your income. It's not assuming for the months that you're making 300 or the years that you're making 300 and above. So you have a really great horizon on this and way to go. Good job. Yeah, that would be some good numbers to kind of play with. If you go to ramsaysolutions.com, our investment calculators there

and plug in some of the numbers and just say, what if I just invested all this 500,000 in a mutual fund? Because if it doubled, every seven years, it's kind of the role of seven, that could be exciting to you. And it may be less work and headache as real estate. But if real estate is something you love too,

maybe you take some of this and buy a paid for property. Thanks, Amy, for the call. Hey, you guys, when you go against what society thinks is quote normal, like avoiding debt, for example, it might seem weird at first and that is totally okay. We want you to be weird if that means you're doing things intentionally, including how you spend your health care dollars. And one way to be intentional is with Christian Health Care Ministries.

CHM isn't health insurance. They're a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of health care costs without sacrificing their freedom. Programs start as low as $98 a month. Find out more and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. Up next, we have Brent in Cincinnati, Ohio. Hey, Brent, welcome to the show. Hi Rachel. Hello, how can we help? So I'm wondering if I'm able to purchase a car for my wife. We've been leasing to own for the three years and upcoming December we can purchase it for 19,000. The same car is valued at $23,000.

Okay. So you've been leasing it for three years. What was it worth when you started? I'm just wondering how much it's depreciated. How much? No, how much was it worth? $28,000. Okay.

Okay. And now it's worth $19, 19, but you're saying you've seen it other places for 23. Is that what you're telling me? Yes. With the same mind, which the same year. Oh, it looks like a good deal. Yeah. Do you have the money and do you like the car? We like the car, but we don't have the money. So we'd be getting a loan through my credit union. Oh, and what's the alternative? You just give it up.

Yes. Do you have any- My wife's very attached to the vehicle and doesn't really want to consider any cheaper options. Yeah. Listen, I can understand that. Go ahead. Well, yeah. Why is she attached to it? She just likes it a lot. She likes it a lot.

Well, the fact that she's not going to be able to consider, she's sitting there with you, Brent, tell her hi for us. What's her name? Elizabeth. Hey Elizabeth. So yeah, I mean, when you put yourself in a position when you purchase something and say, well, I'm just not, I don't want to look at anything cheaper, you've kind of already made your decision.

I mean, if you guys don't have the money and you don't want to look at anything cheaper, I mean, I guess the only thing that you guys have decided at that point is, yeah, you're gonna take a loan out and buy the car. We would advise you differently. And so you called the show, so we'll give you our advice. I don't know if you're gonna wanna take it.

Because what you'd realize is you've been basically renting this car for three years. In the most expensive way possible. In the most expensive way, yeah. And I know you can't really tell the interest rate on a leased car, but when people, you know, actually ratio it out, it's high. It's usually more expensive than if you went

and got a traditional car loan. 14%. So then you're gonna take a $19,000 loan, pay interest on that, and then we're gonna look up in four to five years and this $19,000 car is gonna go down to probably $10,000 or $12,000 in value. go down to probably $10,000 or $12,000 in value. So when it comes to cars, it is one of the places that financially speaking, I mean, it's kind of one of the dumbest debts you can get into from a financial

perspective because again, you're borrowing money and paying more on that borrowed money because the interest on an asset that's going down in value versus like a house, a mortgage, right? You take out a mortgage, you do pay interest on that borrowed money because the interest on an asset that's going down in value versus like a house a mortgage right you take out a mortgage you do pay interest on that loan but the value of that home is going up at the same time so the car itself is not a wise purchase to make when you don't have cash for it so my next question to you guys would be do you have any cash available to you? any cash available to you? Do we have, no, we don't. We're still trying to get over some credit card debt. Okay, good. How much debt do you guys have? We have 4,000 on the credit card,

and then we have a few monthly payments. What are those? We're paying off our wedding rings, which we have 7,000 left over. And then we have some, a personal loan we're paying back my parents, which we owe about 2,500 left. And I'm doing 500 every paycheck. So about towards the end of January, the 500 a month will clear up.

Okay, how much do you guys make a year? Close to 40,000 a year. Combined. Combined? Yes. Are you both working? My wife is looking at getting a new job that could make more money soon,

but we just don't have the money yet. And I don't want to make decisions on we'll have more money later. Yeah, that's right. I want to make the decision on what we have now. For sure. Absolutely. Which is very wise. Very, very wise. So yeah, a $40,000 income, there's no way I would take a $19,000 loan for a car. You can't afford it. Do you guys have kids yet? No, not yet. Listen, I'm gonna throw something wild out here

and roll it over in your minds and in your hearts tonight. But she's not working yet. You don't have children. When it comes time for this lease, like you let it go. But if you have to be a one car family for a couple of months while you save up what's the harm in that just a thought yeah I suggest that my husband and I did that while we were trying to get out of debt mm-hmm we got rid of one of our vehicles and we were upside down but we got a small loan

for it to get out of it and then we we had one, just our single car, we paid it off. And then we actually found that it was doable for us for quite a while and we stayed that way. And then when it was ready time for us to have a second car we bought it in cash. And for you guys in this season of your life that actually might work out better for you than a lot of other couples

because she's not really working yet. And I'm gonna say this Brent, and I'm going to be very kind and fun as Rachel is. This comes through. But what the life you guys just described to us from a financial perspective only is so normal. You have a personal loan to the parents for I'm not sure why. You got wedding rings. You didn't have the money, so you guys took out a loan you have some credit card debt you have a car lease like this is you guys are y'all are the normal Americans out there but the problem is Brett normal is broke normal is 78 percent of Americans today are living paycheck to paycheck meaning if you miss a paycheck you don't have

enough to cover your bills so if if you guys decide that you wanna continue to live normally, then what you guys have so far decided is that, and normal would be to go get, just keep the $19,000 car because you like it. That is normal, and you will have normal results because of it. But what we encourage people is to flip all of that onto their head and actually say,

what is the weirdest thing we can do? Because if I get the results of normal, which is paycheck to paycheck living and not being able to build wealth and not be able to invest or save for the future or have any amount of money in savings, I don't wanna be normal. That's not where I wanna be.

And if you guys look at each other tonight and say, we don't wanna be that. We want to be people that have no debt. We have an emergency fund. We're actually funding some retirement for the future. We have a house that we can afford. It doesn't stress us out. We have margin in our budget.

Like this life that can be created, Brett, is possible. Totally possible. But you can't get there if you keep doing normal things. So what Jade's saying is a one car family for a couple of dozen have kids, is that inconvenient? Yeah. Is that weird? Yeah.

But you know what? You don't have a car payment because that car payment on the $19,000 car, it's gonna be $600 that you guys don't have. So you have to make different decisions if you want different results, Brett. And that's gonna mean not taking out a loan for a car. For you guys, the reality is a one car family.

It's saying goodbye to my emotions, saying goodbye to what I want and what I love and all the things that got me to this place. And you put all that aside and you guys are like, we're adults. We're adults. And we're gonna make adult-like decisions and we don't have the money.

We can't afford this car. You can't afford this car, Brett. At $40,000. You can't afford half of your annual income going to the value of a car. Like that, it's not good. That's not wise. And, and I would be working like crazy to get your income up. And, and I would start working to get out of debt. I mean, you guys could get all this paid off. Your debt's not crazy. I mean, it's, you know, 2,500, 4,000. Like you guys can get this cleaned up really fast. If you just say we're gonna be weird and we're gonna work 60 hours a week

because we don't have kids and we're gonna take side hustles. We're gonna drive Uber, right? I mean, like here's Brent here. Let me put this in perspective. Here's a couple of interesting statistics about cars because I want you to never go in and have a car payment again. Number one, Rachel just said 78% of the people

living paycheck to paycheck, right? 85% of people who get a car take out a loan or a lease to get it. And I think that's a very interesting correlation. Almost everybody. Almost everybody, which is almost the same percentage of people living paycheck to paycheck. And for most people, that car payment is about $525 a month,

which is very close to where you guys were at. And I mean- If you invested that instead of give it to a car company, what would that be, Jade? Well, think about it. Most new car payments are over a term of six years. If you had listened to us and invested that money over the last six years, you'd have $85,000 instead of a car debt that's gone down in value. And so, be weird, Brent, be weird. Hey guys, George Camel here for Delete Me. I saw a headline the other day that made me squirm.

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I think one of my favorite things right now in life, Jade, is I will hear trends that and not to point fingers at generations, but Gen Z will come up with and you hear it and you're like, well, that sounds familiar. I think we've been doing that. It's already a thing. One of them was cash stuffing. This was like two years ago. They came up with someone on TikTok was like,

we're gonna cash stuff, which means you take cash and put it in different compartments, like envelopes, to pay for things. And they're calling it cash stuffing. It was this new, like, that's such a wise idea. How smart, you know, it was this new trend. And we're like, that was the envelope system

that's been happening for- Rachel's been having wallets. Or yeah, I was like, I think we have a product for that. We have a wallet for that if you want that. Another one was like, they have, it's, they call it dinner parties. Yeah. And they're like, and everyone brings a dish.

So instead of going out to eat, you bring a dish and they're calling it a dinner party. We're like, isn't that a potluck? Haven't we been doing this in the Baptist churches for decades now? Even the negative stuff, they were calling, what we would call financial infidelity, they were calling it stealthy spending.

Oh. Like stealthy spending. To get around the spouse of your purchases. Yeah, so yeah, these things that have been going on, they just kind of put a little Gen Z like sprinkle dust and excitement, a little glare on it and make it a little bit exciting. So there's a new trend that they have come up with

and it's now like trending on social. And it is called slow shopping is what they're calling it. Where it means you don't just buy something when you want it, you wait to see if you really need it. What a concept, vetting a purchase. So slow shopping, it's become a big trend now among the Gen Zers, which we applaud. We are all for this, this quote unquote new trend.

Mindful buying. Yeah, but the idea is that again, shoppers are now cautioning each other to be slower when they're making purchases, not go off of emotion. And even if there are deals and promotions, still wait to see if you need it. Don't fall for those traps. Wow. Which is very smart. So yeah, the whole idea of spending and consumerism has always been something we've talked about here. But the slow shopping, yeah, we are all for Gen Z. This is wild. This is wild and crazy to me.

And then, and then there's another one. And then you're ready for this one. Okay. This is on Tik TOK. This is the latest financial trend. That's called under consumption core is what they're calling it, where it basically means that you don't buy anything that you don't need. What a time to be alive. So you just use what you have already, and that's all. And if you actually have something you need,

then you can buy it. But if it's just something you want, we're not buying it. And they're calling that under consumption core. What you get has been around forever, Jade. This whole idea of being more- What's the core part? What's the core? I don't know.

I hear these terms and I'm like, I don't know what it means. Kelly may be able to tell us. I feel like she's in the trends of war. And she's like, I don't know either. Yeah, but under consumption core is what they're calling it. So, but again, this consumerism and this idea of what we've been teaching at Ramsey for decades is,

yeah, if you don't have the money, don't buy it. Your needs versus wants is always something to consider because there will always be a new and better thing. But if you don't have the money, don't buy it. So I'm glad that Gen Z's, they're picking up on it. This is good, this is a good trend. And it reminded me of, there's a Saturday Night Live,

old skit, old skit with like Steve Martin, Amy Poehler. I think, do we have it? Okay, let's play that. This is what it reminds me of. I just can't get these numbers to add up. It's like we're never gonna get out of this hole. Credit card debt, does it ever end? Maybe I can help. We sure could use it. We've tried debt consolidation companies. We've even taken out loans to help make payments. Well, you're not the only ones. Did you know millions of Americans live with debt they cannot control?

That's why I developed this unique new program for managing your debt. It's called Don't Buy Stuff You Cannot Afford. Oh. Let me see that. If you don't have any money, you should not buy anything. Hmm. Sounds interesting. Sounds confusing.

I don't know, honey. This makes a lot of sense. There's a whole section here on how to buy expensive things using money you save. Give me that. And where would you get this saved money? I'll tell you where and how in Chapter 3. Okay, but what if I want something but I don't have any money? You don't buy it.

Well, let's say I don't have enough money to buy something. Should I buy it anyway? No. Now I'm really confused. It's a little confusing at first. Well, what if you have the money? Can you buy something? Yes! Now take the money away. Same story?

Nope. You shouldn't buy stuff when you don't have the money. Wow. What a concept. Such common sense. Such common sense. So yeah, America, follow Gen Z-ers. You know, when you're gonna buy something, especially this holiday season, be a little slower with your purchasing, make sure you have the money for it. And if it's not a need, maybe you skip it.

Maybe you skip it. And live in that under consumption core trends. It's just so great. I feel like it should just be under consumption. Yeah, I don't know. That's it. Ha! Ha!

Talking to two millennials here. Oh, wow. Okay. Oh, all right. That's it. Talking to two millennials here. Oh, wow. Okay. All right. Let's go to San Antonio, Texas. And Regina is with us. Hey, Regina, welcome to the show. Hi, first off, I'm 26. And the fact that I only know about the underconsumption makes me feel so old.

But you also forgot about the de-influencing. Oh, yes. So now influencers are kind of de-influenced people. Yes, I love, I actually really like that de-influencing trend. Yeah, same idea. Well done, thanks Regina. Thanks for the, yeah, keeping us young. I got you. So good, so good.

How can we help? So yeah, so obviously right now I am super, not obviously, but I'm on the show now. So I am Dave Crazy right now and I'm in Davey's stuff too. And I feel like, I don't know if I've made his name a cuss word just yet, but I do know that a lot of my friends, they know I'm on it and they support me. And I feel like some I've been trying to spread the word about it, but I have a little cousin and she looks up to me a whole lot.

She just turned 18. She just entered college for the first year. And I really want to try to go about that conversation of finances with her because I know when I was 18, my prefrontal lobe wasn't developed yet. Right. So like anything that anybody would tell me, I was like, yeah, yeah, yeah. Like my mom swears. She told me not to, you know, get debt, but she also, I remember her telling me that I could get a credit card when I was 18. So that's all I remember.

Sure. And so I'm trying to- Oh no. Oh no, did we lose her? Oh, let me put her on hold. Okay. Yeah. Shoot. Okay, Regina, we're going to answer your question.

I think our phone system's just got a little crazy. That was like the old-school fax machine Yes, okay, so we'll talk through this Regina, I'm so sorry we had to cut you off because of that That's all right. We got it. We can't ask any follow-ups, but Yeah to be a great influence. I think is number one I appreciate you even thinking about people in your life and saying oh my gosh I know someone does look up to me and watches my decision making

and I wanna be able to help them when it comes to this. So first, I'll give you my number one, is always, always, always people are going to see what you do more than what you say. And so she's gonna be watching you do this and she may be watching you, you know, take on an extra job to pay off debt. She may be watching you say no to a vacation

that all your friends are taking and you're like, yeah, I'm not going cause I'm paying off debt. Like as you live this out, that is going to speak so loudly. Cause even like your parents, you know, they're like, you know, they may have said something, but then also they're like, yeah, but you can get a credit card and they probably live with credit cards and live with some debt.

And you just kind of follow what you know and what you see how people act as you watch them. And so by you just simply living, just know like that is a great starting point because she's going to be seeing what you're doing and realizing, oh, she's not stressed about money. Yeah. Cover Gina has, has margin to spend. And she's like saying no to things and she's going to be

watching your decision-making. I agree. I think seeing that I think there's a couple areas that that really applies and weirdly enough I think it's the same areas that we talk about couples being aligned on. People don't like for you to just strike up a conversation out of the blue about their money, their politics, their religion, how they raise their family, right? It's like, when you do that, it's like, wait, wait, wait, whoa, whoa, whoa, whoa. So to just like, even if it's in love,

like bringing it up, it kind of feels invasive because those topics are extremely invasive. And so I think Rachel's exactly right. Let your actions speak louder than your words and they truly will. Like the fruit, you know a tree by the fruit it bears. And if you guys do have a great relationship, sitting down with her at lunch

and just telling her what you're doing and just being like, oh my gosh, okay, I found this new show and I'm so excited about it. I'm paying, and talk about what you're doing and not pointing the finger at her and just say, if you ever have any questions, please call me, I wanna talk about this and I would love to help if you want help.

Like I'm here for you. You know, just offering that door to be open. Thanks Regina for the call. Thanks everyone in the booth. Thank you Jade for a great hour. And we'll be back America. This is the Ramsey Show. Hey you guys, I'm not a fan of the big banks

and you probably already know which ones I mean. But I do like credit unions because they're nonprofit-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are

federally insured by the NCUA up to $250,000. It's easy to join and Fairwinds partners with more than 5,000 credit union locations around the country so you can bank in person wherever you live. But if you prefer the online experience you can log on to Fairwinds and do anything you could do at a physical location. So go to fairwinds.org slash Ramsey to learn more and while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control

of your finances. That's fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. 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 bestselling author Jade Warshaw and we are answering your questions about life and money and relationships, career, anything and everything. We are here for you. So first up we have Stacia in Nashville.

Welcome to the show. Hi, it's Stacia. Stacia, I'm sorry. You're totally fine. I've heard it for all 33 years of my life. I bet you. First and foremost, I am unapologetically fan girling. You guys are some of my favorite hosts and personalities ever in the history of the whole

show. That's so nice. I'm so glad. I'm glad we're here for you today. Oh, absolutely. They keep it 100 all the time. Rachel, you're just the best. You are kind.

Thank you. Thank you. Thank you. Yeah. Well, just a little context. I have been following the principles of Ramsey since I was 17. I'm 33 now. Wow. Two and a half years away from being a Baby Steps millionaire.

Oh my gosh. That's amazing. Because I'm so grateful, like so, so grateful for the principles. I come from a family that does not have money. And so I'm actually calling you today because I don't have anyone else to ask this question. So I am in baby step six, my husband and I are in baby step six. We are about eight years away from paying off our house fully. And I know y'all say, I know the principles inside and out, but I know y'all say to not

purchase a second property until your first property is paid off. And so we're in a predicament where we want to purchase land and then eventually build a small home on that land. And so we would love to throw like $50,000 at purchasing land, but I'm wondering in how to navigate big purchases while in Baby Step 6. Do we just like stay gung-ho for the next eight and a half years with like every extra penny

going at the mortgage or like when do we have permission to save up a good chunk of money and make a big purchase? And is it okay that that big purchase is toward like one component of a second property? Yeah, it's a great question. Is the $50,000, will that be enough to cover the land that you're looking at? Well, that's the thing. I'm from Nashville. Rachel, I know you're familiar with East Tennessee.

So like we know exactly what part of town outside of Chattanooga or East Tennessee that we would want to purchase. And so if and when the right land came available and we were able to jump on it, I want to be able to jump on it. And right now a lot of land is going for a lot less because people aren't buying houses, primary houses, and especially not buying secondary property. So land has been cheaper. And so I'm trying to weigh the options of like, do we go ahead and like jump on it? If something's in that

50 to 70. When you say jump on it, when you say jump on it, does that is that permission to buy something that's more than fifty thousand dollars? Like more than the cash that you have No, we have so we have that cash. Um on top and that's what i'm wondering Do I we have our emergency fund and we have on top of our money fund extra cash 50 000 Do we throw that out the mortgage? Yeah. I'm like, do we throw that out the mortgage and maybe go get the mortgage pay down a year faster

or do we jump on land? Yeah, because the land, would you guys want to, in your perfect world, would you move there before eight years or is this like in 20 years? No, so this would just be a second enjoyable spot. We live in a city, we live like right downtown in East Nashville. So this land, this land would be like a little getaway space for us to share with our family and for ourselves just enjoying for us.

Gotcha. Yeah. To get out in the country. When would you start building on it after this first mortgage is paying off or what are you thinking? Absolutely. Okay. I would buy the land. Yeah, why not? Yeah, buy the land. Okay. I just, I don't know, like hearing permission of like, because it's associated with a second home, like that has to wait until the mortgage and I don't know, I don't have anyone to ask. Like, how do you like, why is the girl about it? I know it's wise that you're paying cash.

It sounds like it's reasonable. You have the money to do it. And I think it really goes that you're paying cash. It sounds like it's reasonable. You have the money to do it. And I think it really goes back to that teaching of once you pass baby step three, things kind of you're able to live your life and you're able to focus on the things that are valuable to you

and that you wanna spend money on. And in this case, you're gonna continue to pay the house off and you're not building the residence before you're figuring out your primary residence. So for me it's I would I would do the same thing if I were in your shoes and I shared about that. Yeah and it's you know $50,000 which is a lot of money but it's also like that's the price of a new car for some people and they replace their car and they you know they so yeah it's not like we're talking about

$500,000 in the house could your primary residence could be paid off today or something. It's a reasonable amount of money because how much do you guys make a year? Combined we're at 310. That's great. Okay. Yes, I would for sure. I would. Yep. I would save it. And I'll even go a little further because I'm such a spender that to really get what you guys want long term. If you're looking at other properties like, gosh, if we had another 10,000, like that would be, that would be even, you know what I mean?

Like, don't, because you're not in a rush, don't cheapen the purchase by just being able to say we got it. So really looking, and I'm sure you guys have done your research, and maybe 50 grand is just enough, and like it's perfect, and you're getting what you want.

Slow shopping, Rachel. That's right, slow shopping. To be able to get, you know, so maybe 50 grand really will and you're getting what you want. Slow shopping, Rachel. That's right, slow shopping. To be able to get, you know, so maybe 50 grand really will get you guys exactly what you want and that's amazing. But I would also say you guys make great money. You're in Baby Step 6, you're doing great. And again, if you're like, you have it,

you know, 10 grand more and be disciplined in this. Don't let it go crazy, but like 10 grand more would really get us this view here or this, that, whatever it is. Maybe even pause a little bit, save up a little bit more and get what you want as well. What do you owe on your current house?

Just curious. We owe five, 550. Okay, so you've got a ways. We're on track. Yeah, we've got about eight and a half years and my husband gets annual bonuses and sometimes they're 35, sometimes they're 50. So what we use is like we just live on the base salary and then those bonuses can either go to

what some of the mortgage or they can go to a big purchase. And so we know that those come every year. So I'm like, okay, we could add that and that could be extra going towards land, you know, a nicer piece of land or, you know, it's not going to move the needle a ton and how early we pay off the house. And we're pretty aggressive about paying it off monthly now. Yeah. I mean, the good news is, the good news is, and I'm not saying that this will happen. It doesn't sound like it would,

but the good news is if you were to purchase something and then seven years from now, if you change your mind or something in your life changes, it's something that's gone up in value hopefully and you could sell it and you know, you won't have lost anything. So, cause a lot can change in eight years is true, but yeah, if I were in your shoes, I'd do it.

Would you guys use the land between now and eight years just to go and I don't know. Yeah, and camp. And camp and all of that, you would use the lands. Okay, yeah, that's great. Absolutely, that's what and be flexible. Also like kind of camp and see where do we want the front of the house? Where do we want the lands, okay. Yep, that's great. Yeah, absolutely, that's what, and be flexible. Also like kind of camp and see where do we want the front of the house?

Where do we want the natural light? Yeah, that's fun. Totally. But I just, I look at spots outside of Chattanooga and you're gonna see all the time and some are going to auction and people just don't have the extra money and so they are going for a little bit cheaper

and we don't need a view. We also just kind of want wooded seclusion. So it's just up in the air. I just wanted to get permission, quote unquote, permission, um, to make a large purchase, even if it is associated with a second property, um, while in baby steps. I hadn't had anyone ask about that. Yep. Absolutely. Well, I'm glad you called because yes, you have our permission because you're paying cash and it's a reasonable amount

Compared to what you guys make and overall your financial life. So it's not adding risk. Yep. Nope. It's great and congratulations Well done. That's always refreshing to hear It's kind of that first generation of hey, we're doing something different with our money and and and hear that too Since she's 17 she's been doing this maybe not as aggressively in high school as you are when you're a working adult, but this is a marathon. It is a long-term play. Yes, they are rhythms in your life at which you adopt good money habits and you get to be a point to say, yeah, you want to buy some lands. So I'm so glad you called. This is the Ramsey Show. These days, it's not if your identity gets stolen, it's when.

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goals. Download every dollar for free on the App Store or Google Play. Welcome back to the Ramsey Show. Up next in Boone, North Carolina, we have Sierra on the line. Hi, Sierra. Welcome to the show. Hi, thank you. Absolutely. How can we help? So my husband and I are living paycheck to paycheck and I was introduced to Dave Ramsey from my grandmother. Now I have been trying for the past six months and I'm stuck on baby

step one. Um, and we're not getting anywhere. We had half of baby step one, and then everything happened with the hurricane and we're back to zero. Were you guys hit hard? Were you one of the towns? Yeah, we were. So sorry. It's okay, it happens. But I'm just, I feel like we can't catch a break. And wasn't paycheck to paycheck is so hard for us.

I am a full-time student, college student, I'm 29. And my husband works full-time, sometimes even over, like over time shifts, just so that we can get by and I just I don't know what to do anymore. What's he bringing in income wise? About 49 to 50,000 a year. Okay and when do you graduate? I have about five semesters left so I'll be finishing up in 2027. Okay, are you working at all, Sierra? I'm not but I pick up pet sitting shifts to try and bring in some money. I tried a full-time job and full-time college and it destroyed me. Okay, what are you getting your degree in? Biology. And what's the goal with that? What do you want to do?

I want to go work on the coast as a marine biologist. Wow. Okay. Okay. So you're, he's bringing in 49,000. You're doing pet sitting. How much do you guys see a month? Like after taxes, after everything, what does that look like monthly for you? Um, it's about three, 3,500. Okay. And what, how are you guys living? Are you renting? What are you paying for rent? We are renting. Um, we pay a thousand a month for rent. Okay.

Um, yeah, this is tough. Um, the solution that you're looking for, I mean, people live paycheck to paycheck for different reasons. Sometimes it's our spending is out of control and we've got to, you know, rein the budget in and rein the spending in. And sometimes it really is an income issue. And it's in this case, I think you're creeping up on an income issue. I'm just wondering, what is your husband doing for work?

What kind of work does he do? He makes fiber optic cable. Okay, and you said he had a side hustle too, what's that? He door dashes. Okay, so I'm wondering if both of you need to sit down and kind of figure out, okay, what do we both need to do in order to make this work? Because to your own words, it's not sustainable.

Are you guys going into debt? Like how are you covering the overages? We are door dashing every chance that we can get. Okay. Just so like I can get to class and we can get food and sometimes mom helps us out. Okay so there's not you're covering the overage then. So there's part of this and there may be more that you can do income wise but there is part of this where you've said okay I'm gonna go to school for the next three years and I'm

gonna become a marine biologist and by me that, here's what we've decided. My income is limited and he's in his career right now. And so there's part of this that you guys have decided by, you know, by choosing this path. And I'm not saying it's a bad thing. It's just, we've both understood that for the next three years, it's going to be extremely tight. But there's a light at the end of that tunnel

because you're going to be a marine biologist. What's a marine biologist make? It kind of depends. I'm trying to get a state job and that can range anywhere from 50,000 to 70,000. Okay. That's great. And how are you paying for school? Right now I am pretty set with financial aid and scholarships.

I've already finished my associate and Good for you. Very good. Went through that with honors. So I've been doing pretty well with scholarships. So no debt, no loans. Do you guys have any other debt or any debt at all? Yes, I have three credit cards,

but it only adds up to about a thousand, maybe 1,500. And I have a car. How much is that? The total on it's 28,000 and I pay $668. Oh, there's a problem, Sierra. You gotta sell that car. You gotta sell it. Actually, and I'm trying to figure out got to sell that car. You got to sell it I see and I'm trying to figure out how to sell it

So I'm not sure because I'm thirteen thousand dollars flipped on this. Oh Wow So you okay, so you owe twenty eight thousand and how much and you're saying you really can't sell it except for fifteen thousand It's what it's worth? When I had it because I went and had it appraised at a dealership. Okay don't. They said they can only give me 6,000 for it. Okay so don't do the dealership route because they will always give you a much lower rate than what you could actually sell at private sale for. So go on kellybluebook.com put in all the info and just see on the high ends what you could

get for it. Okay. So the dealership told you how much would they pay for it? Six thousand. Oh my gosh. Wait, six thousand dollars and it's a twenty and you owe twenty eight thousand? What kind of car is it? It's a twenty seventeen Jeep Cherokee and I have a hundred and sixty two thousand miles on it. Okay. What is your husband drive? What's his deal?

He has a motorcycle that's paid for. Got you. And we have a, we call it a hoopy. And it's just a really old beater that's also paid for. What about the motorcycle? What's it worth? What about the motorcycle? What's it worth? About 4,000. Okay. Yeah, I would, okay, I think, yeah, I would be selling this car Sierra for sure. And even if it's, even if you can only get 16,000 for it,

I would rather have a $16,000 loan than a $28,000 loan. Does that make sense? Like that's gonna change your numbers a whole lot. And if I were you guys, do you guys have kids? We have a two year old. You have a two year old. Okay. Um, yeah, I mean, I, I might sell the motorcycle and take the four thousand and get a beater car for you and then sell your car. Yeah. I mean, honestly, cause you can always go back and get a motorcycle again, but you guys, I mean, to your points, I mean, it's going to cut that payment down when she gets a loan for whatever it is. Half possibly. Yeah.

I mean, it'd be yeah. You guys would have an extra three hundred dollars a month come again. Yeah. So there's and there's decisions here. And I think Jade set it up really well. And it's a it's a it's kind of a hard pill to swallow in life. But it's understanding that, you know, as adults, we make decisions around our life and not all of them. It's not bad.

Yeah, not all of them are right or wrong. It's not this, you know, oh gosh, you shouldn't be in school right now. It's not that at all. It is though, we have decided to do this route. And because of that, we're not gonna have a lot of money. Like we're gonna feel broke for three years

until I get through school and until I get a job and all that and in three years it's gonna look different. But in the meantime, what can we do? What other decisions can we make that are gonna be adult-like decisions that may hurt and they're not fun, but it's things like getting the extra job like you guys are doing, it's selling stuff to see what you can free up.

It's getting out of debt and you're freeing up income. Cutting up those credit cards. Cutting up credit cards. Yeah, I mean, it's doing a couple of these, making some of these decisions within the big decision of the lifestyle you guys have made just to make it easier, Sierra. And that's the thing is, is we want peace.

We talked about financial peace is what we want for everyone. And that peace is gonna look different depending on everyone's situation and the way they view life and all of it. It's a little bit subjective to a degree, but you don't have peace right now. And so what I would fight so hard for

is in these three years, how can we get some peace? And being able to free up some money would bring some of that. And how do we do that? Well, I just listed out a couple of options from jobs and film stuff and all of it. So that's what I would do. And one of them's a long-term that you've committed to.

Like once she starts working, she's got a great pathway to make $70,000. Oh yeah, and then together with your husband, yeah, y'all will be making, you know, $130,000 before taxes. Like that's amazing. So the light is coming, but it's getting to the light that I think is really key and what decisions can we make in between.

And these are hard, Sierra. I understand like these aren't fun. It's not always fun, but it's getting you to a goal that you guys want to get there. And part of that is you still being in school. So I commend you for having a two year old and doing this. And, and I'm so sorry about the devastation in your area We we think about you guys so much. So we're praying for you. Thanks for the call This show is sponsored by better help

This month is all about gratitude and most of us have people in our lives that we're grateful for One of those people for me is the wonderful Marilyn Fannon. She gave gave me a chance, she taught me poise and professionalism, and she challenged me. But there's one person that we often don't take time to thank. Ourselves. We don't always acknowledge that we're barely surviving, or that we're moving forward, or that we're working towards a better life and better relationships. And in a world where everything seems to have gone bonkers, it's not always easy to be grateful.

So here's my reminder to thank the people in your life, including you. And sometimes to do that, we need some professional help. We need to talk to someone trained to help us discover true gratitude for ourselves and others, especially in the holiday season. That's why I recommend BetterHelp. BetterHelp is 100% online therapy

and you can talk with your therapist at just about anywhere so it's convenient for your schedule. You just fill out a short online survey to get matched with the licensed therapist and you can switch therapists at any time for no extra cost. This season, let the gratitude flow with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp H-E-L-P dot com slash Deloney. Folks the Ramsey Christmas cash giveaway is here

and you could win big. We're giving away $500 prizes each week and one grand prize of $5,000. Enter daily for your chance to win at Ramsey solutions.com Giveaway, it's that easy plus our 50 days of Christmas deals is on Right now get up to 30% off bestsellers and life-changing gifts that won't break the holiday budget Ramsey solutions slash store Welcome back to the Ramsey Show. Our question of the day is brought to you by WhyRefi. WhyRefi refinances your defaulted private student loans and defaulted means when the borrower can't make the required payments. So if that describes you and your private student loans, contact YREFY. They can offer a lower fixed rate loan and they will have

it built for you. So go to yrefy.com slash Ramsey today. That's the letter Y R E F Y dot com slash Ramsey may not be available in all states. All right. Today's question comes from Teresa in Wyoming. She says, my husband and I have five girls under the age of 12. Wow, we have been in our home for seven years and we owe $234,000 on it. We love our house and three acre property,

but in the past few years, the homes on either side were bought by a man who rents them out to people who work for him. Now we have what looks like a junkyard next door. They've also moved a two-bedroom trailer to one of the properties that houses more workers. They dump all their construction materials on their land and regularly burn enormous piles of it. I have complained and the county has been out but nothing has changed.

They walk through our front yard and the woods, which is our property. Recently, the police taped off the woods in a crime scene. Investigator spent the day. Oh, my gosh. They're in hours. Spent the day in three hours there, I guess is what it should say. So all of that backstory, what should we do? Our realtor has said that we could sell the home for 800,000, that's pretty good.

Should we stay because our interest rate is so low and paid off or should we put up a fence around the property? I've got five young girls to look out for, so please guide me on what to do in this weird situation, Rachel. Wow. Oh man. Listen, the crime scene would have got me.

I would have a lot of questions. She's in Wyoming. So there's like, my mind is going to some shows that I've watched. But anyway, I love that this is worth a lot. I wish I knew how close, like how close the neighbors are. I'm envisioning more land, I guess,

cause I'm envisioning Wyoming. But three acres isn't like crazy crazy. Yeah. Yeah. You know, I wouldn't let the interest rate keep me there. I definitely wouldn't. I think that you have enough equity that you could probably move on if you wanted to.

And if you're truly concerned about safety and I'd make sure to get all the information from the county first and say, okay, are there any violations? Are you planning on doing anything? And if they're not then Yeah, I'd probably get to step in. I know yeah, you're the primary residence in which you live Some people there's not a lot of options. You kind of are stuck, you know, depending on your situation, but you want to feel safe I'm like that's the one place in life. you can go, yeah, and not have to think.

And for your kids, yeah, where you're not worried about them and everything. Yes, so I may talk to him and just see, not what he would change, but if he's thinking of what his long-term plans are, because who knows, he could say, oh yeah, in the next two years, I'm leaving and going somewhere else or whatever, right?

And then this problem it's short term. I would not have the conversation with the hopes that you can change the way he does life and all the, you know, how he's lived thus far, that's not gonna change. But I would be curious what his long-term plans are and if he doesn't have any, then I probably would be moving.

Just to feel, yeah, just to, I mean, you have the option, you have great equity, and just to feel safe again. I mean, honestly, it's like, golly, I just wanna enjoy my house and what's around me versus like rolling my eyes every time I go in. And again, some people, there's no option and you will be in the house that you're in because of interest rates and everything.

So. But they've got options. Yeah, it's a blessing to be able to say hey we can we can actually make a different move so i probably would i would too i think that there's a soul tax here and a mental calorie tax that you can afford to pay yep i love it but thanks for the question therese all right let's go to adam in new York City. Hey Adam, welcome to the show Thank you I have a question. I was in an accident and there was a settlement I have some debt

28,000 total between my wife's credit cards my credit cards and what's left of my car payment my wife's credit cards, my credit cards, and what's left of my car payment. Um, we, we're gonna wipe out our debt. The minute we get our, our, our payment. Um, but what we want to do is we want to know what we do with the rest. And it's about close to a half a million. Oh wow. What happened Adam? I really can't go into detail. Okay. Sure. Are you okay?

I'm getting there. Yeah. Okay. And yeah. Will you have long term medical issues at all? I had something that was implanted that is helping me. Yeah. I really can't get into the whole.

Oh yeah. No, I don't want you to. I'm just thinking for part of this money, if there was gonna be ongoing high medical care for you, that that was gonna be part of my answer. Like, when you're down the line, I have to get something done again. Okay. I just wanna make sure you have the cash for all of that.

Yeah, yeah, and that's what, and. And also working, going forward, will you be working again or are you disabled? Oh yeah, no I'm working both, my wife and I are working. Okay, that's great. I got back to work, I got back to work but it wasn't easy. I'm sure, yeah, well I'm glad you're doing okay. What's your combined income, you and your wife?

134,000. Very cool. Okay. So you don't have children? No children? No, we're like mid 50s. Okay. How are you living? What's your housing situation? We rent.

It's an expensive area, but we rent close to $1,700 a month. the expensive area, but we had saying about Our rent was close to 7,000 a month. Okay, so So you know that you want to pay? Oh, yeah. Yeah. Yeah. Well, are you in the city? Like we're what part of New York? No, we're not in it. I'm we're suburbs. Okay, so you know that you want to pay off the debt, which is about 28,000 Right, that's cars. Yeah cards cars and cars Okay, so you know that you want to pay off the debt which is about 28,000, right?

That's cars credit cards cars and cars and then you're gonna want to put aside three to six months of expenses That's what we teach here. That's what we call baby step three So in your case, I put her put away six months just because you do have some things medically going on And if I were you I'd probably put out my out-of-pocket max. I would just like having that That I can get to. Mm-hmm. That's true. And then the next thing on the list, obviously, you should be investing once this is done.

You should start investing 15% of your income, your wife and you combined every single month just to set you up for later on. But with this $500,000, this might be a good time to start thinking about a long-term housing situation that's not renting. Yes, right, right. And so we, I mean, so what we're going for is what we need and in the area we need to live in because of work. We just buy the house in cash or, I mean, as much as we can down and down payment or well, what are you pricing out?

What, what is, if you look at what you'd like to buy, what's the cost? What we're getting settled for and what we're looking for is you could barely even pay it in cash. I was wondering, should I put it in a money market account and save up until we find something you like, or just with a nice down payment on something that so we have a lower. I wouldn't buy something that you you don't like but I also you want to buy something that you can afford so that's that's what yeah that's what I'm saying yes but what we like and what we can afford is what are the price ranges you're talking about give me more numbers okay the homes that we're looking at, for just my wife and I, they're starting at like

450,000. Okay. So what would be a number that's like, oh yeah, that feels like a good house for us, good area, it's what we want. What is that? You said starting at 450, but is that what you're thinking around 450, 500? Yeah, 450, 500. Oh, that's great. Okay.

Does it weird you out that all to spend and buy outright? Is that what you're saying? Does that weird you out to take all this cash and do that? Yeah. And then I'm like, we're houseboats after that. Well, honestly, Adam, that's probably what I would, that's what I would do. I mean, and again, I, and don't feel the pressure to pay for it all in cash, but if you see a house that you like

and you guys have to take out a $50,000 mortgage, I would do that. And it will feel house poor, but that means the largest expense in your life, there is no expense to it. So that means- It's the opposite of house poor. Yeah, you guys can be able to cash flow

so much retirement out of this and put so much money in investments. That's what I would do. That would be a huge way to get a jumpstart on this. Yep, that's exactly what I would do. I'd do it too. Thanks for the call, Adam. Listen, the housing market is crazy.

And if you've been on the internet, here's the sentiment. Affording a home is impossible and you're doomed to be a renter for the rest of your life. Right? Wrong. George Campbell here. Listen, finding a home you love within your budget is possible. And I'm excited to help you get there with our brand new course, how to buy a home you

can actually afford from saving a down payment that fits your budget to making an offer that sellers can't resist. We'll cover it all. So if you're ready to seal the deal on the right home for you, take the course at ramsysolutions.com slash course. That's ramsysolutions.com slash course. Welcome back to the Ramsey show. I'm Rachel Cruz hosting today with best selling author Jade Warshaw.

We are taking your calls and up next we're going to North of the border, Jade. We're going to Toronto, Canada. All right. And we're going to chat with Diana. Hey, Diana, welcome to the show. Hi, how are you? We're doing great. How can we help?

So basically I am 48. I've got no kids. I'm single. I've got no kids. I'm single. I've got my mortgage that I've got about 13 K less. I have, yeah, I have some investments, um, 38 K but I can't touch until I'm 55, which unfortunately, I mean, well fortunately that's right around the corner. But, um, my thing is I haven't been working for a year.

I quit my job because I needed a change. My salary is only 55k so when I do eventually get a job, you know, it's not very high but in the year I've been paying my maintenance and my mortgage on my credit line so I've accumulated another ten thousand in the last year. But here's the thing, this is not the first time I've accumulated another 10,000 in the last year. But here's the thing, this is not the first time I've been in this situation. I've quit my job before and I've been, you know, not wisely paying my mortgage and my main agencies

on my credit line, but that's been a little buffer for me. And then I'll get a job and I'll pay it down. That's such a risky way to live. It is, it is. And you know, that's what we call cash pour, right? Where, you know, I'm not making a lot of money, but I'm smart with my money. You know, I'm not paying to get my nails done

and stuff like that. I'm, you know, putting every cent that I have to that mortgage when I am making money. But here's my main question. I have no kids. And my condo's worth about 700K, right? Why am I rushing? Cause I only have 13K left on this mortgage.

Why am I rushing to pay down this mortgage? I don't know. I have. I want you to answer this question because you laid out a very interesting plan that I don't understand why you're, it's strange to me that you are rushing to pay off your mortgage

and that you're going into debt to do it without a job. This is what I would call emergency mode, but I feel like you're kinda living it like a normal lifestyle. When do you plan on working again? Well, I'm looking for a job, but here's the thing, here in Toronto, salaries are very low and I'm cherry picking,

let's be honest. But what caused you to quit your job before you had another one lined up? Was something bad going on? Yeah, I just didn't, I was sick of it. I was working for a company eight years and I was tired of it. Like I was just like, you know what, I need a break.

How are you eating, Diana? Like, and I'm not being facetious, honestly, how are you having money to live? Oh, again, that's why I've accumulated the 10,000. So- Because I've been paying... Oh, so you've been paying your mortgage and your lifestyle off this line of credit? 100%. So that's what that 10,000 is, right?

Oh, all right. I've been paying my mortgage. Yeah. So that's, I mean, that 10K accumulated over a year. Yeah. It could have been a lot worse. Exactly. Exactly.

And, you know, and technically it's only 8,000. It's crawling up. I'm rounding up here. But the thing is- How did you get by on $8,000? You're nothing. Did you have savings? You know what? I had a little bit of savings and I was technically collecting EI for like six months. So let's be honest, that was only 8K. I gotcha. I gotcha.

So I'm very lucky the way everything works out. Yeah, so I think that there's, yeah, I would say a couple of things, Diana. So the rush to pay off the mortgage, because you have no other debt, but the line of credit, correct, the $8,000 and then that's it. So the rush to pay off the mortgage, number one, we don't tell people to rush

to pay off their mortgage. We say that it is in the baby steps at which after you're investing, you don't have kids, so there's no kids college, then you would pay extra on the house. So it's not this urgency to pay it off quickly, but it is an intentionality that you wanna pay it off faster than for Americans, the typical 15, 30 year mortgage.

We wanted to do it faster than that because your housing line item in your budget, whether it's rent or a mortgage, is always usually the most expensive thing that you pay for every single month. And when that's freed up, that means you have all of that money. And for some people, I mean,

it's a thousand or more dollars that's freed up every single month that you can turn around and use for your life or to invest or all the above, right? So that's the purpose of paying it off. It's not if you have kids or not, it's truly a line item issue in a budget. And when your house is paid off,

not only is there emotional freedom because you don't have payments, but there's also a financial freedom because you don't have payments. So for me, and you, I mean, you have, I mean, you don't have a lot left. $13,000 on a, did you say $700,000 condo? I mean, that's incredible, Diana, that I want you to work. I mean, I don't want you to sit there and like be racking up debt and it may not be the job you want, but in the meantime, I would be getting something to

earn some kind of money to live off of so you're not living off debt. Yeah, because you plan on living here, right? Or do you have a big plan to sell this and get access to the money? Like what are you thinking long term? And by long term, I mean, like in the next eight years, five years. Yeah. Okay. So and here's the thing. I just got back from Jamaica because I was like, look, I know it's not wise, but add another couple of grand on that. Diana, you're so different. Hold on, hold on. But only because I haven't traveled in seven years. You know what I mean?

No, I don't. Diana, I have to tell you, I don't know what you mean. But no, I know, but you don't have a job, Diana. You're going into debt for a vacation. You don't have a job. How much was Jamaica? How much was Jamaica? And how are you paying for it?

It was only two grand. That was only two grand. So you're telling me, I'm not kidding. You're telling us, this is great by the way. I really appreciate you calling in because you got the $8,000 and you're telling me for a full year, you have off of $8,000. I understand six months you were getting some unemployment and you took a $2,000 trip. So technically you only had $6,000 that you were using.

I just don't know if I believe your numbers. I feel like that's impossible. Well eight grant, let's be honest, that credit card payment is this month. So that'll push me over to the 10,000 Oh now we're at 10,000 Okay, so then yes, that's right. It hasn't hit yet. Okay, so Diana listen, you're you're smarts you've Because you've you've paid down this condo. That's the reason I'm giving you credit Okay, you down this condo so you have something in you that works hard

and you are smart when you're making an income, but you're not, I mean, this isn't smart. Like what you've been doing so far, the decisions in this last year are really, it's just interesting. It has the ability to ruin what you have built if you keep this up. And that's my biggest fear.

It's a rhythm and a pattern that's begun. And I'm scared for you to stay in that long-term because it will be financial disaster. You've made so much progress financially, so much in your life. I mean, you look at your condo. I mean, seriously, like, it's amazing. I just don't want you to keep going backwards

because there's not a job that's paying you what you want. Like, just get a job and pay something. See, and that goes into my next question because my mentality, maybe it's a good thing I'm calling in because I'm like, maybe I should take another year off and just travel. What? Just enjoy my life. Hey, what do you look, look, I get it.

Traveling is fun. I, I'm right there with you. Um, is it possibly, is it possible you don't know what you would want to do professionally and instead of figuring it out, it it possible you don't know what you would want to do professionally and instead of figuring it out, it's easier to just. Yeah, because let's be honest, I don't wanna get another admin customer service position where I'm only making 55K.

Okay. You know, the fact that I was able to pay my mortgage and all that stuff. If you could do anything you wanted to do professionally, like if there was no barriers, what do you think you'd do? I don't, I don't know. That's, I don't know. So you're, you want to go on an eat, pray, love journey

and figure out what you want to do. And I'm all about the travel. I just want you to have money to do it. I do too, I do too. Okay, so yeah. This is a fun call. I don't think that we're going to convince you to change your philosophy on life right now. I mean I hope we can but I think you're I think you're in a mode right now

But you're really just look because I think because I have the cushion because my mortgage Yeah, but you here's the thing you can't you can't out earn bad spending habits for long And although you do have this equity bill to your own point, it's not like you're saying, you know what guys, I've got $600,000, you know, $777,000 of equity here, I'm gonna sell it and I'm gonna travel the world and use that as my nest egg.

That's different, but you're holding onto it and you don't seem to have a plan to sell it. And for that reason, you could look up and really have racked up a lot of debt. And you're starting, yeah, I mean, you're starting halfway to where you were. You're just making, you have great progress, so keep at it.

So I'd get a job, but Diana, hold on the line. Kelly's gonna pick up, we're gonna give you Ken Coleman's book, and in the book is a get clear assessment, because I want you to get some focus on what you love. I think you have a lot, I mean, you have a lot to offer the world. You offered us a lot.

You did. You were fun. I appreciate the call, Diana. Thanks to all the guys in the booth. Thank you, Chade, and thank you, America. Listen on the Ramsey app coming up in the next hour. YouTube and podcast ends now. 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 gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right. For free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom.

Alright, I'm getting out of here. Enjoy. We'll see you on the app.