The Ramsey Show - Stop Letting Emotions Drive Your Money Decisions

Starting point is 00:00:05 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. And I am Rachel Cruz hosting this hour with Jade Warshaw, and we are going to be answering your questions. So give us a call at AAA-8-25-2-2-25.

Starting point is 00:00:36 The phone lines are open, and we are ready to talk. what's your life and your money. So we're going to start off with Scott in Pensacola, Florida. Hi, Scott. Welcome to the show. Hey, how you doing? Hi, we're doing great. How can we help?

Starting point is 00:00:52 So I recently turned 21. I bought our house in December. I got married in January and I got a kid on the way doing September. Whoa. Big, big life event, Scott. Doing it all. Oh, yeah. Well, I got about...

Starting point is 00:01:09 I owed 275 on a vehicle loan that I'm 10,000 upside down on. And I got 10,000 five on personal loans. I have 1,900 on a full-wheeler that I've sold and paid as much as I could off what I sold it for onto. What was it, 1900 on what? Full-wheeler. That's how much I got left. Okay. I sold the full-wheeler in January and paid what I sold it for onto the loan.

Starting point is 00:01:33 Got it. And then I got about 2,000 in credit cards. Okay. and I'm on step two of the program, but I want to get rid of the car, but I don't feel like it'd be a smart. Well, I know it would be smart to get rid of the car payment, but I don't have anything to replace it right now. And I ain't got $10,000 to pay the negative on it. Do you have any cash? I got $1,000.

Starting point is 00:02:00 The $1,000. Okay, so you've got the baby step one. What about your wife? Does she have a vehicle? That's reliable? That is the vehicle. Okay. And then what do you drive?

Starting point is 00:02:11 I got married, so I guess I inherited her debt. I only have like $13,000, but her car and her personal loan. And what do you drive? I got an old truck that's worth $4,000. Got it. But I got a company truck, so it just. Okay, so that $4,000 is sitting there, but you also have a company truck? Yeah.

Starting point is 00:02:34 So she could drive the old truck if you sell this car? It needs a lot of work. But that's not the question. Could she drive it if you got rid of this car? Because she'd drive it for six months. Uh-huh. And you just do a little work on it, yeah. So then I would, I would, if I were in your shoes,

Starting point is 00:02:53 I'd go down to the credit union and I'd get a $10,000 loan because I'd rather you be paying off $10,000 than $27,000. And then that way, when the buyer comes to buy this car from you for $27,000, you can put the other, or for, yeah, for $27,000, you can put the other 10 with it and have the whole 37 that it's worth. Yeah, because you just dropped your debt, you know, obviously by significant, I mean, you'll have $23,000 of debt left after you do that. And that's as much as what the car, you know what the car. You don't even mean, the car loan itself is. So, yeah, it makes a significant dent. It's going to be, it may be a little inconvenient at times, kind of annoying, but it gets you, guy is a whole lot closer to that goal of being debt-free.

Starting point is 00:03:41 Yeah. Yeah, because then you've got the, you said the four-wheeler was 1900. That's how much I would have left on the loan. And then the $2,000 on the credit cards. Was there anything else? $2,000 on a personal loan. I forgot that's in her name. Okay, okay.

Starting point is 00:03:56 Yeah. And how much do you guys make a year, Scott? I make about $80,000 before taxes. 80 before, okay. He makes probably $30. And she makes surgery. What does she do? Dental assistance.

Starting point is 00:04:10 Okay. Yeah. And she's pregnant. Is that what you said? Yes. When does she do? September. Okay.

Starting point is 00:04:19 So I would make that exchange of the car. And then we have something called stork mode, Scott, that when you are expecting a baby, it's good to have a bigger emergency fund than just $1,000 because you know there's an event coming that could cost more. So there's a part of me that would say, I would go ahead and do the truck. I would sell it, go ahead and get that taken care of. And then, from then on, between now and September, which will fly, it'll be here before you know it. That's what four months. So I would stockpile cash in these next four months.

Starting point is 00:04:54 I actually would not be paying down on the debt. I'd stay current on everything. Make sure. But I would be intense like you are paying this off, right? Because you're on such a great rhythm. We've done baby step one. You're on baby step two. but I would put that money aside, just like in a high-yield savings account, and just don't

Starting point is 00:05:10 touch it and make sure she's good, baby's good, everyone's good. And then when she comes home, I mean, if you could save $8,000 even between now and then, right? I mean, $2,000 extra a month, if you could put away, the four-wheeler's gone, the credit card's done, and that $2,000 personal loan, right? Like you could knock off some stuff pretty quick in September, which, you know, which, is awesome. And then you would just have the $10,000 loan from the credit union and then the other $10,000 per loan. So you have 20 grand. And then you guys could be completely debt-free by the end of 27. That's the goal.

Starting point is 00:05:48 Are you doing? It feels kind of far out of reach, but it does. It doesn't even that much. It's just, it's a overwhelming. Are you doing any extra work? Are you side hustling or anything like that? Oh, weekends over time. Okay. Good. Yeah, I'd pick up as much as that so that, to Rachel's point you can stock as much money up. And if I were you, I'd also look into insurance and find out at the very least you want to make sure that you've got your out-of-pocket maximums covered, right? Those are the numbers I'd be looking at if I knew I was having a baby. I'd want to have that covered for the family. Just to make sure that you have that. Say that again? I said insurance is covered. I have really good insurance. You do? There's no, there's no deductible?

Starting point is 00:06:25 $30 deductible. For the whole year? Well, I've never, I've been to the hospital a couple of times. I've never had a It's only been like a $30 copay. Okay, I want you to check into that. Check into, I want you to check two things. I want you to look at the deductible, and then I want you to look at the out-of-pocket max, and just call them up and ask him, say, my wife's having a baby.

Starting point is 00:06:46 I just want to know what's the deductible I'd have to meet before insurance kicks in for this baby. And same thing, for the year. I want to know what's the max amount of money I'd have to pay out of pocket if for some reason there were complications or anything like that.

Starting point is 00:06:59 And just get those numbers. If yours is absolutely zero, I want that insurance. Yeah, I was going to say, he said, I have good insurance. Sounds like it. Oh, Scott, that's great. Are you both on the same page? You and your wife?

Starting point is 00:07:12 Do you feel like you guys are kind of tracking financially? We haven't got joint bank accounts yet and combined everything. I mean, we're really jointly on stuff together. Sure, sure. But you guys are both mindset of like, let's save money, let's get out of debt. Like, we're going to turn this all around. Yeah, we want to make a lot for our kids that we didn't have. It's awesome.

Starting point is 00:07:33 Scott, you're doing a great job. You're going to be a great dad. You're a great husband. I mean, honestly, and let me just tell you, these quick wins are, it's going to help build your confidence because it sounds like up until this point, until recently, you haven't been intentional and focused on your money. You know, you have personal loans here and there, credit card debt, car, you guys have just kind of been living normal. And now, I mean, you're pretty grown up. You're a homeowner. You got married. Like, I mean, all of this is happening. And I'm so thankful that you're starting this process now, Scott. at your age, honestly, because if you guys do this, if you do the baby steps, you get out of baby step two, you save up an emergency fund, you guys start funding retirement, right? All of this could be in the next 24 months. Right. And you start this now and you say that consistent pattern. You guys will retire multimillionaires.

Starting point is 00:08:21 Like, it will be so incredible the family tree that has changed because of you and your wife and what you guys are deciding to start today. So keep at it. Call us back if you need us. We're here cheering you on. Hey guys, George Camel here. Listen, we need to talk about your phone plan, because for a lot of you, it's like a bad roommate. You know the one.

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Starting point is 00:09:50 People kick the bad roommate out. Head to boostmobile.com slash Ramsey to make the switch today. That's boostmobile.com slash Ramsey. Based on average annual payment of AT&T, Verizon and T-Mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026. See website for full details. Next up, we have Susan and Madison on the line. Hi, Susan. Hi, thanks for taking my call. Yes, absolutely. Thanks for calling in. How can we help? So I am 33 years old on a single income with a razor thin budget. I've set up an every dollar budget in an envelope system. I've been through

Starting point is 00:10:49 financial peace university twice. But I keep falling in. to emotional spending and end up over spending pretty much every month, what would you recommend to someone who understands the plan but struggles to follow it consistently because of emotional or impulsive spending habits? And are there any like structured resources or programs to help with that emotional side of it? So when you say emotional spending, can you give us a quick example of exactly what that looks like? Is it, you know, you're going to Target and you're getting a bunch of chotchkes you don't need? Is it you gamble on draft kings? Like, tell us, tell us what it is. Yeah, so, like, for instance, I'm just going through some really intense family issues right now.

Starting point is 00:11:32 So, I don't know, to feel better, like, go out and have a personal day, like, to go to the movies or maybe go get my nails done, just to have, like, a self-care day. But because my budget is so thin, I mean, I barely have enough money to go out and see a $10 movie. Yeah. you working on the baby step specifically? Like, are you working towards getting out of debt or building up an emergency fund? Are you putting margin somewhere that is a goal? Yeah, so I have my emergency fund set up and I am working on Baby Step 2. It kind of feels like I've been on Baby Step 2 for like 10 years. Oh, yeah. Well, that's exhausting mentally. If you don't feel like you're making progress, that'll beat away at you. So how much debt do you

Starting point is 00:12:19 have left to pay off? So I have a personal loan at about 10,000 and then I have a credit card with about 3,000 on it. Okay. I am in a sticky situation, which I know you guys never say to do. My mom purchased my house and she's been my bank. And long story short, we're selling it right now. So that mortgage, quote unquote, will be gone. And then it'll just be the 10,000 loan. and then the credit card with about $3,000 on it. Okay. Is there any equity? There is, but unfortunately the house never got put into my name like it was supposed to.

Starting point is 00:13:00 So I don't have any legal standing to anything on the house. Is she going to keep the money that you, have you been paying the mortgage? I've been paying everything, yeah. And your mom's not going to give you a piece of the pie? Well, it, I asked for it. and I never really got a full answer. And then through the great brine of my sister, it sounds like, oh, well, I'll put it in the account so I can see how you spend it. What?

Starting point is 00:13:30 Yeah. How much is the equity? How much? It wouldn't be much. It would maybe be like $30,000 to $40,000. That's much for someone who's in debt. Yeah, it would clear my debt. Yeah.

Starting point is 00:13:45 Well, it would more than clear your debt because then you just say you have $10,000. You only have 13,000, right, unless there's more that we don't know about. No, nope, that's it. Yeah. Had she bought the house and you have not lived in it and you've lived in it for a short period of time and paid it? Or like, what's the story on the house? And I'm getting somewhere with this. That's why I want to know.

Starting point is 00:14:07 Yeah, yeah. So the purpose was for me to get into this house to build some equity to kind of set myself up for financial freedom because I don't make a lot of money to make about $50,000 a year. and so that was the point of me moving in. Well, it was a little bit more than I could take on, I think, for how much I make. And so we never really got a solid number down of how much I would pay her, quote-unquote, mortgage, because she just paid in cash because she had money to pay cash. Okay.

Starting point is 00:14:40 So that number never got set, and right now it's a really small number of $300, but I'm paying property taxes, insurance, everything else to upkeep with the house. Okay. That's a little different. So, yeah. You've been paying $300 to your mother for how long? Two and a half years, about two and a half years. Okay.

Starting point is 00:15:03 Yeah. Well, I'm wondering, because here's my thing, Susan, is any amount of money at this point is going to help you. I mean, you just said I can't afford a $10 movie. like when you don't have that much, like everything is important. So I almost would do the math and be like, okay, for two years, this is what we've been paying. You know, it'll be like, I don't know, between, you know, 12 and 15,000. Here's the property tax. Like, I would at least take out the money that you've put into the home, okay?

Starting point is 00:15:35 And let's say it's a, say she cashes out at 30,000 and maybe for you, you've put in 20 with everything said and done, okay? That means I could see a very reasonable conversation as, hey, mom, the house went up in value. I have helped support it, not all the way, because to your point, you were not paying market rates. She was giving you a great deal. But to a point, I have been putting money into this

Starting point is 00:16:01 that has caused, you know, that the equity has gone up. So after realtor fees and everything is said and done, whatever is left, here's what I've put in. Could I at least get that part out in the equity and you keep the rest of the equity. That would at least be a conversation I would have because $20,000, you know, that's pretty life-changing for you at this point. Who put the down payment on the house?

Starting point is 00:16:25 Or there wasn't a down payment because her and her husband paid cash. I mean, they have like an upwards of like $20 million. You know, I think I'm changing my stance on this because what it sounds like is you were just a renter at a really low rate. I don't think that you ever owned any part of this to really have access to any of the equity. I think that she bought the house. She bought it in cash and she only charged you $300 rent in a full-length home for two and a half years. Yeah, that's fair.

Starting point is 00:16:55 I think that you're a renter. Yeah, I think you're just a renter. But back to the fact, even if our original, like, texts and emails and everything was, this was going to be your house and the title was going to go into my name. But there was never anything that upheld that. If you were really doing that, you'd have to show that you, you, I don't know I wasn't there, but if you didn't kick anything into the down payment or kick anything to the initial purchase of the house, even if she bought cash, and if you did not even at least meet the, a regular mortgage or do you see what I'm saying?

Starting point is 00:17:29 Yeah, the rent, the market. Yeah. And there's nothing in writing here. It sounds like you guys did. And I mean, I'm not trying to be ugly, but it seems like you both did a poor job and really. documenting the situation well for both of you. And for that reason, I'd learn, yeah. So what, for that reason, I'd just let it ride.

Starting point is 00:17:50 Yeah, that's probably fair, Jake. Yeah. Okay, so my question would be, why did this deal go south? So she basically wants to take the money now and do something else with it. Oh, okay. Is what it comes down to. Okay. And because I don't have the law on my side, I just kind of have to now figure out.

Starting point is 00:18:09 what to do. Yeah, so you're going to take, so you will have to pay rent and it's going to be more than 300. Yeah. So that will eat into your budget as well. What is your budget? What's your monthly take home? It's about $2,600 a month after taxes. What's your, what kind of work do you do? I work for a health care organization. I do like back-end, like admin stuff for providers. Okay. Is there a way, $2,600 is slim, slim, slim. Well, and that doesn't feel like, like, did you get a big tax refund? No. I think like 400 bucks. Is any money going, is many, is any money going into 401K retirement? Um, I think so. Um, I get like the Wisconsin state pension. So it's just like an

Starting point is 00:19:01 automatic thing that comes out. That's part of it. Yeah. Yep. But nothing beyond that. Okay. Um, so yeah, when with this equation, I mean, I want to quickly hit what you talked about. about on the emotional spending before we get into this because that's a huge part of this. You really don't have the money to, you don't have the margin to emotional spend. And we don't have enough margin to put towards this new life that's going to come where you're paying more than $300 of rent. So income is the name of the game. And it might mean you looking at a different career path, certainly a different job in the

Starting point is 00:19:31 short term because we've got to get more than $2,600 coming in a month in order to solve this. Because at the end of the day, it is a math problem. Most people don't struggle with money because they can't do math. They struggle because they don't stick to a plan. And when your bank makes your money feel confusing or hard to track, plans fall apart fast. And that's why I love Fairwin's Credit Union and their mobile app. Because let's face it, most banks build systems that make it easy to swipe and hard to stay organized. But with the Fairwind's app, you open it and you know exactly what to do.

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Starting point is 00:22:49 All right, let's go to Birmingham, and we have Samantha on the line. Hi, Samantha. Hi, we're doing great. How can we help? I have a question. I wanted to know what I can do to help my husband stop financially helping his parents. Oh, boy. We got to help your husband help his parents. Okay, so what's going on? Yeah. So my husband is a contractor in Birmingham and we have a small business and he makes good money.

Starting point is 00:23:30 But his parents tend to kind of fall back where they need to whenever they know that he'll kind of just make up the back end. Like how much? How much is he giving him every month? A lot of money, like $8,000 a month. Holy smokes. But your husband is giving his parents $8,000 a month? Just about. For how long?

Starting point is 00:24:02 How long has that been going on? This has been going on for probably three months. Three months. How much do you all bring in a month, Samantha? We are 1099, so I don't really know how much we bring in a month. We filed $240,000 last year. Why don't you know how much comes in a month? Do you guys have a personal budget that you guys plan your household from?

Starting point is 00:24:27 Or when you look in your checking account? It varies. because one month he probably won't make $10,000, and then the next month he'll make $50,000. Okay. Wow. Okay, so I probably won't concentrate on this call just because from a time perspective on his parent situation.

Starting point is 00:24:51 That's their thing. Who's, yeah, really in the, what I'm saying, the wrong, because he's not agreed with his wife on where their money's going is your husband. So what are those conversations like? What happened? Did three months ago he said, hey, mom and dad are falling behind? Can we help? And you're like, yep, absolutely.

Starting point is 00:25:08 And he just keeps doing it. Was it even talked about? Did he ask you? Like, what happened? He asked me, and I'm okay with helping them out. Sure. You know, every so often. But my thing is when it's consistently an issue and you're consistently doing it

Starting point is 00:25:24 and you don't, they don't make up the age. They don't have to work if they don't want to is my problem. Okay, so your problem... They spend all the money knowing that my husband's going to make up for it. So it's entitlement that you have the issue with. My question is, you said it's okay one time. Have you, has he continued to come back to you these other months and asked and you've just gone along with it? Or have you said no, and he's done it anyway?

Starting point is 00:25:51 Oh, I've said no multiple times. Okay. And $8,000 is a massive gap. Does something happen in their life? Did one of them lose a job or what's happened in the last three months where they've needed this money? They both work. Well, what's changed in 2026? Because you weren't doing this in 2025.

Starting point is 00:26:08 So what changed three months ago? What happened in February that caused them to call you? I think it's the fact that they just spend all their money. Right. But what changed? Did you guys... Something that I know of has happened. Okay.

Starting point is 00:26:25 How long have you guys been married? Eight years. And how long has the business been? doing well? Probably about two years. Okay. Something, either they got wind of the fact that the business was doing well. Something changed that suddenly this has become kind of just like a vending machine for them. But the good news is, to Rachel's point, that's neither here nor there, you get to stop this behavior and either something's going on with your parents that your husband is not letting you know that you're just unaware of, or it's just as simple as saying,

Starting point is 00:27:03 I don't want to do this anymore. And you setting up that boundary with your husband of saying, I've said no to this. I've said no to this on multiple occasions. You've continued to do this anyway. You're completely disrespecting me. And I'm not going to have that. Right.

Starting point is 00:27:19 So that conversation needs to happen immediately. Otherwise, it's going to be you guys against each other. Because at this point, that's a marriage issue, Samantha, between you and your husband, that he doesn't listen to you, that he doesn't respect, what you're talking about and that there's no, it doesn't sound like there's a back and forth.

Starting point is 00:27:36 Because I'm not saying every husband has to be like, okay, whatever to his wife, do whatever you want. And same with the wife, that she doesn't need to look at her husband, do like, whatever you want. No, there could be some back and forth here. But it's the stonewalled, no, I'm just going to do this with our money and the action of it without any level of your buy-in

Starting point is 00:27:55 because, yeah, it's eight grand a month happening. And so, and the problem is that he needs to understand is that throwing money at a situation that isn't changing, to your point, is not helping them. It's not, because this will continue to be a pattern for the rest of their lives if they had anything to do with it, is what it sounds like. And again, I'm not against helping family, right? Like if they had a medical issue or there was a job loss and you could financially fill in the gap and you wanted to, that's great. There's been no job laws. How old are they?

Starting point is 00:28:28 It's, um, 50s, mid-50s. Yeah, that's crazy. And they have jobs, you said. So if I'm you, I'm sitting down with my husband tonight and I'm saying, here's my... Thing is, I'm going to stay at home mom, so I stay with our children. Uh-huh. So my husband is the only person that brings in the money. Doesn't matter, Samantha.

Starting point is 00:28:50 It's your household. You're both married. You both are... That's what I'm saying. Does he hold that over you? of, I'm trying, no, no. Okay, good. We have agreed, you know, that we've done it too many times recently.

Starting point is 00:29:07 But I feel like it's going to happen again whenever it, and they're just going to keep on and keep on and keep on and asking. And I feel like it's just going to continue to go on even after we talked about it and said no. And that's my question. I wanted to know why when we pushed you on that, why you brought up the fact that you're staying at home mom. I want to understand that a little bit more. Do you feel like you don't have the right to say?

Starting point is 00:29:28 Or do you feel like he has the right to make the choice? He doesn't. He pretty much asked me because I pretty much, he includes me on everything except for this. Okay. And I don't feel like I don't want to say I'm not included. Well, it sounds like you're not. It sounds like he tells you what he's going to do. And that's the inclusion.

Starting point is 00:29:53 It's been behind my back. It's been behind my back. the last two times. Oh, he hasn't even told you when he's doing it. You just found out. Right. So then you're not included. So you got a husband.

Starting point is 00:30:04 No, Samantha, you have a breakdown in your marriage of communication, of trust, of any level of unity. And he's done this. He just eroded trust, right? Which, in my opinion, is even worse than being like, I'm going to do this and it's out in the open. It's the secrecy and it's the behind your back. So, Samantha, yeah, it's this is. a marriage issue at this point and I would raise some red flags and you may feel like oh it may not be that big of a deal gosh am I being too am I being too much no this is a big deal it's a very big deal

Starting point is 00:30:38 he just spent 16,000 dollars without you knowing and so to me that's the that's a communication and marriage breakdown and you guys may need to go pull in a therapist a marriage therapist just to talk about not just the money portion again but how we got here in our marriage that he didn't feel the ability to come to you and or he didn't and we need to tackle those issues If you're at the point where you think bankruptcy is your only option, stop for a minute. You might have another way out. Guardian Litigation Group. Most debt relief programs sell you on the illusion of protection.

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Starting point is 00:32:37 Hi, Sue. Welcome to the show. Oh, thank you so much. I'm so excited. I'm glad you called. I have a question. We are trying really hard. Our daughters in Grand Rapids, we're in Saginaw.

Starting point is 00:32:49 I mean, well, two and a half hours away. And we want to move there, and prices her homes are high everywhere, but especially there. So we've got our home on the Ramsey plan. Our home is paid off. Our cars are paid off. We just have our monthly expenses. My husband has us debt-free in a miracle way

Starting point is 00:33:10 because he just now retired at 67. I've been on disability since 2000. I'm sorry? That's amazing. I know. He's amazing. Well, my dad, when he passed away, helped a little bit because we've got a little inheritance. But now we're looking, we're going to buy there, God willing, and sell here after we've purchased over there.

Starting point is 00:33:34 And we're not, I mean, you know it's like when you don't know how much you're going to get for the one you're selling, which I know I'm 99.9% positive. We're not going to get as much for this one as we are over there. If we took our house here over there, it would be about three times as much. Sure, sure. So my, I know. So the question is, we just got outbid again last night. Financially maybe not, but they wanted us. The other buyers were willing to skip the inspection.

Starting point is 00:34:08 And we bid, we overbid what they were asking for, but I'm sure these people did too. And they were, they had a cash offer. Yep, yep. So, yeah, I mean, if we sold ours right now and if we got what we want for it, you know, we'd be doing cash offer too. Sure. What's the difference in the numbers? What are you selling for versus what you want to buy for?

Starting point is 00:34:31 Exactly. And it's, yeah, we want to buy low and sell high in a perfect world. Yes, but tell us numbers. Tell us what you want to buy the, tell us the current property that you have, what you want to sell it for, and then what you think you want to buy for. What we have now, I'm in a perfect world, well, the perfect world we get it done, but in a reasonable world, we get it done. 275.

Starting point is 00:34:54 Okay. Maybe 250, but I'm hoping for 275. Perfect. And the ones there we've been looking for, I mean, obviously you want to go 250 and have more for moving costs and things. But what we've been looking at is between 260 and

Starting point is 00:35:09 320. And this one, we were bidding like 20, let's see, 290, 300. We were bidding like 30,000 more than they were asking. It was it the, was it there, but there was a contingency on it, right? Contingent on sale of your home? Or no? No.

Starting point is 00:35:32 Okay. Oh, no, we can't even do that now because, I mean, we just can't. There's nothing available like that. Sue, I think you just need some patience. I think you're frustrated. I think you have had your hopes up. You want to be close to the grandbabies and you guys are ready to pull the trigger. You're ready to make the move.

Starting point is 00:35:49 And one or two deals have slipped out under, and you're just getting frustrated. I would tell you, just breathe, have some patience. You are entering into a good market. It's actually more of a buyer's market right now than a seller. So the fact you're getting outbid, I know happens, but that is happening less and less. If anything, some houses are actually up for negotiation. That's right. That's right. And so, and we see, we have a real estate dashboard that you could even kind of check out, but it's great because it does show not only like the mortgage rates, and everything happening, but how many days on the market and all of it? But there's something about having the patience in this,

Starting point is 00:36:30 because if you don't and you feel a little desperate, you might do something, which I'm glad you didn't, something stupid of like wave the inspection, right? And then you go buy a house, side and scene almost, and no inspection, and you guys get into it and it becomes horrible. So I really do believe the deal's going to come for you. I really do. I think you guys have been wise with your money.

Starting point is 00:36:50 You have showed patience in the past and what you guys have done to build up, I mean, paying off a home and everything. So what you could do just to take the urgency down, if you wanted, just an idea, go ahead and sell your home and go rent somewhere for a year over close to them and just know it's short term. And then actually take your time. He said, we're not going to move twice. I get that.

Starting point is 00:37:15 Yeah, okay. Well, then you guys just need to have a little bit of patience because you know what you want. There are houses. I'm sure. for what you're looking for in that area. And actually in the Midwest area, the average list price is $309,300 right now.

Starting point is 00:37:32 So you guys are, yeah, right where you are, which is perfect. So there should be some great options. And maybe it's a little bit of a different neighborhood than you were thinking originally or 10 minutes one way than what you wanted or I don't know. But Grand Rapids, I promise you there will be homes that you're going to be able to buy.

Starting point is 00:37:47 Oh, both too. But I would. But me should be a better month. Do what? So May should be a better month you're thinking? Well, just from a real estate perspective, things are moving more. They move more spring and summer real estate-wise, yeah, just overall. So I would say keep your eyes open.

Starting point is 00:38:04 And so I would just say patience. I think you guys, you're in a good spot. You're fine. Just stay within your budget. Offer what you can. And if the deal doesn't happen, move on to the next. There's no perfect home. But you're fun, though.

Starting point is 00:38:17 I appreciate you as a great mom. So good. All right. Let's head to Heidi in Knoxville, Tennessee. Hi, Heidi. Welcome to the show. Hey, guys. I hope you're having a fun show today.

Starting point is 00:38:29 Yes, we are. Thanks for calling in. How can we help? Hey, so I'm hoping you can help me settle a dispute between me and my 19-year-old son. Oh, we love a debate. We had recently mentioned to him about possibly getting a credit card now that he's an adult. And he's been a rancy listener for a while. And he said, no, I don't want any part of that.

Starting point is 00:38:51 And so we started kind of having a fun spar back and forth and he's like, guys, you use a credit card. You should get rid of your credit card too. Hilarious. Smart guy. Hilarious. I love it. So what do you want us to say? You want us to tell him that you're right?

Starting point is 00:39:10 No. Okay, good. He tells me to call you guys because I was like, look, we pay off every month. We have a budget that we follow. If there's not enough money for something, we don't spend it. I don't understand what the big deal is. And I've listened to the show for a couple weeks now trying to figure it out. And I must be missing something.

Starting point is 00:39:30 Why do you think you need one? Or why does he need one? Because you just advised him to get one. I think it was mainly because I just thought, well, in case something happens, he doesn't have a lot of money. We don't want to have to spot the money. What if he did save up an emergency fund? Would you feel differently?

Starting point is 00:39:52 Yeah, if I knew you had that in place, that would be fine. I was more just confused why he thought that we shouldn't have one, even though we don't use it, per se, as a credit card. Do you have an emergency fund? Yes. How much? How many months of expenses? We have three months of expenses in the emergencies fund, and then another two and a half months just in our regular savings account. Excellent.

Starting point is 00:40:20 So it's fair to say that if emergencies came, you would have the money to cash flow it. Yes, that's true. So, I mean. Yeah, so I mean, a credit card, honestly, Heidi, the way we look at it is not only is there data to back up that you end up spending up to 13% more when you're using someone else's money. And that's what you're doing, even though you quote unquote pay it off every month. But subconsciously, you don't realize it, but you are spending more. were just spending your money, how do you with the debit card, I guarantee you you would be spending less. So not only that, but also what we find over and over again is life happens. And when a credit

Starting point is 00:41:01 card is your backup plan, you fall right into the cycle that they suck you into of credit card debt. And people call in our show all the time and they got $10,000, $15,000 in credit card debt. Well, we've been trying to pay it off. We try to pay it off every month. But then this happened and this happened. We'd have enough money. And there they are. 23% 26% interest catching your slack of not being diligent and saving up and actually you being your emergency fund. And so, and I know you said you guys have one, which is great. But when it comes to just the credit card industry, they have done a great job marketing the idea that you need a credit card. But when you spend your own money and there's no bank in your life and you

Starting point is 00:41:44 have complete autonomy over your life and your money and there's no bill, you're not paying for the past anymore. When you pay in the present, you, you, you're you, you're, you're use a debit card or cash, you move on with your life. And financially, there's a freedom there versus being tied to a credit card. Hey guys, health care is one of the biggest stress points in your budget. It's confusing, and most of the time, it feels completely out of your control. But there is a better way to handle it. Christian health care ministries isn't health insurance. It's a health cost-sharing ministry where Christians share each other's medical bills. And it's not a new idea. T.HM has been around since 1981.

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Starting point is 00:43:27 That's CHministries.org slash budget and use promo code Ramsey. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruz hosting this hour with my good friend Ramsey personality, Jade Warshall. And we all were hanging out, taking your calls, having a good time. So if you have a question, call us at AAA 825-5-2-2-25. All right, let's go to Christy in Baltimore. Hi, Christy. Welcome to the show.

Starting point is 00:44:04 Hi, Rachel. Hi, Jade. How are you doing? We're doing great. How can we help? Okay. So we started a small business, my husband and I about one year ago. And it is a faith-based business.

Starting point is 00:44:18 I make candles. And obviously, we are in the red. We filed our taxes for last year, and we were in the red about $78,000. Oh, wow. Which, of course, comes out of our income. So we've been having a little debate about whether we should, you know, part of this business that I wanted to start was, you know, to give back to God and to our church. So even though we're in the red, I want to still give money to our church out of our revenue, not necessarily. our profit. Okay. So, and by give money, do you mean like a tithe for your family or you're doing this as a

Starting point is 00:45:01 donation of what you make to go back to the church? Just that's part of your business model. Right. As part of our business model, because we do tie to our church already on a weekly basis. So this would be above that, but coming out of the business. Do you got, are you guys able to absorb losing $78,000? Well, it's $7,000 to $8,000, not $70,000. Oh, my gosh. I thought you said $78,000, and I was going to say, Christy, Christy, we got to reexamine some stuff here. Oh, my gosh, that helps a little bit. Okay, that helps a little bit. Yeah.

Starting point is 00:45:34 Well, can you, okay, then my question is, can you absorb, I mean, let's say it's 10, let's say you give the church 2,000. So that means you're, if you're already in the whole 8,000, that would cause you to be in the whole 10,000 at that point. Can you all absorb $10,000 loss for a hobby that you love? I think we can. And this is like another part of this piece. I want to quit my job, not for the business, but to focus on our family. Okay.

Starting point is 00:46:05 And, you know, be a stay-at-home mom. We have a nine-year-old. Yeah. And really the only debt we have is our home. Okay. So we, you know, we don't have any credit card debt. We own our cars. Our student loans are paid off.

Starting point is 00:46:19 We, I've been on Ramsey Solutions since like 2007. Yeah, that's awesome. Okay. How much, how much do you? Do you make a year in the job you have now? Okay, so my bring home is about 54,000, so we would be losing that. And my husband's is like 95,000 bring home. Okay, perfect.

Starting point is 00:46:40 Have you guys done a budget on the 95,000 that if that is your new household budget, that you guys would be okay financially? My husband, I said that we will be. Okay. Have you looked at the numbers? So I have not. We'll have to going to our financial planner today. Oh, great.

Starting point is 00:46:59 Okay, well, they may be able to answer some questions too. Yeah, so I want you to be comfortable. I want you guys to do a mock budget and just say, okay, because there's two issues here. Candle business, candle ministry, we're going to call it because it's, you've lost money. Yeah. And then stay at home mom. Okay, so stay at home. I would do a mock budget of what he brings home every month and look at your realistic expenses and just say, yeah, we can totally do this.

Starting point is 00:47:22 And you might be able to, Chris. So you guys have no debt. You should be able to. So I would, yeah. I think so too. Yeah, make sure you feel good about that. And then the giving on the candle business. Yeah, it sounds like right now that's all the candle business does is take whatever money there is and donate it.

Starting point is 00:47:39 Right? Because there's no profit. Well, a large bunch of our money actually goes to our 403Bs, our 401Ks, our IRAs and our daughters' savings. So we save a lot. And he wants to pay our house off in like nine years, and we're already in it for six. So I think technically with our cash, like that our reserve, like we have our six months savings and with our daughters. Like we could pay it off next year. So then that would leave us with like nothing, right?

Starting point is 00:48:13 No debt, but no emergency fund either. And it's like starting from scratch, but with no debt and my husband working and me not. So that's like, it's just this whole thing. Like what, it's a lot of possibilities we have. I wouldn't use your emergency funds to do this because you need that in case of an emergency. So I would just, I don't think anything's on fire in terms of you feeling like you have to go at light speed to pay off the mortgage because you said, oh, you're welcome. Because I mean, I'm like if I stop working, we can do it in 15, right? it doesn't have to be done in nine.

Starting point is 00:48:51 Like, we could still manage to make that work and still be ahead of the game. Don't get me wrong. And he just has this thing in his head. I'm right in the middle of you, too. I like the idea of being very intentional about paying off the mortgage. And when I mean very intentional, I mean maybe not letting it go 15 years because the hope is that you can do it, you know, and in 11. Yeah, 9 to 11.

Starting point is 00:49:12 Right. But at the same point, I would not go to the extent of saying, we're going to drain all of our emergency funds and, you know, stop investing in the 401k and stop. I would not do that because that's a drastic take that none of us here would ever suggest you to do. I think you do it as the baby steps teach it, which is during this season, you continue investing 15% and you continue with the kids, you know, college funds and you continue then on top of that, putting extra towards your mortgage as you have it and as the candle making business produces it, right? The ministry.

Starting point is 00:49:49 Yeah, the ministry. But don't unplug those other things to make this happen because if the research you've done on the budget is true, you should be able to live on the $95,000. And that includes doing the things that we've said. That includes you continuing to invest, continuing to put aside for college, and continuing to put extra on the mortgage. If you can't do those three things, then that means we need to reevaluate the budget and figure out where that money is. and if it's truly possible like we thought it was. Right. Okay.

Starting point is 00:50:22 And so even with, you know, being in the red on the business, you think like we could still, I mean, it might not look like $2,000, but even if it's like $500 or $1,000, I just want to give something. I would give above on the income that you actually make. Yeah. This is a hobby, Kristen. It's kind of how you have to look at it like your husband plays golf and spends $8,000 a year on golf. That's right. I mean, that's kind of where it's at.

Starting point is 00:50:44 So I feel like it would be bad accounting. to continue to go in the red just for your good heart. Mathematically doesn't really make sense, right? And we're all about generosity and all of it, but God also gave us reason and logic that we have to plug our brains into, and that's not wrong. So if you guys want to be more generous

Starting point is 00:51:04 on your actual income, income that you are making to your household, then absolutely you guys can decide to do that. You may have to cut things in order to make that happen, but no, I think continuing to go in the red for something feels irresponsible to me. I agree with that. Okay.

Starting point is 00:51:18 But your heart is good. So I want your heart, I want that to still be satisfied, right? The giving part of it is still beautiful and great. I would just look at it in a different bucket for it to make logical sense. Okay. Yep, that makes sense. Yeah. And logic is a gift from God, too, you guys.

Starting point is 00:51:37 Remember that? Like sometimes we go generosity and we can go high emotion with all of it, which is good, too. But also God's given us reason and logic, and that's a good thing to plug in. And so from a logical perspective, as we do math, that doesn't make sense to continue to give. But Christy, yeah, and I hope you get to stay home, Christine. And you guys have put yourself in a position where you get to make that decision, which is beautiful. Like that's what we're talking about, you guys, to get your money under control so you have choices and options in life. And when you look up and you're like, hey, I want to be home for a season, you get to because you did the hard work of getting out of debt.

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Starting point is 00:53:55 Hi, thanks for letting me on. Yes, absolutely. How can we help? So I have a fairly new business. We've been open about three years, and unfortunately had to get the big expense of replacing our entire roof and then also had some other structural things along with that. The estimate that we were originally given was about $75,000 for all of that, which we saved over time so as not to take out any more loans.

Starting point is 00:54:25 We did, in that time, as they discovered, more problems, approved for an additional $14,000 on top of that. But then we just received the final total, and there was an additional $25,000 beyond all of that that they had done without any documentation or consent. They never mentioned to us that anything else was going to happen. And when I asked about it, they just said, well, little things added up over time. 25,000 is not a little thing. And obviously, what that's not taking that alone and doing this all out of cash, that is even harder to have all that set aside, they did offer to reduce that total by about 10,000,

Starting point is 00:55:09 which would remain, or it would leave us with the remaining 15,000 over it. beyond all of what we had approved. So my question is, do we just take that deal and kind of count it as the cost of doing business or should we push back a bit more and say, you know, we didn't approve for this. You didn't ask our permission. And if you had asked, we wouldn't have given it because we don't have that money readily available. Is the work already done?

Starting point is 00:55:35 I also don't want to be a jerk. The work's already done. Oh, boy. Beautiful work. And that's what makes it hard is I don't want to be that business owner that then ends up getting a bad name because I'm fighting on paying for the work that was done, but they did work without approval. Yeah, no change orders or anything. I mean, they just like... No change orders, nothing. No verbal discussion. That's bad of any of that. Very bad. Yeah, very bad. Which is crazy,

Starting point is 00:55:58 because they are very reputable. We chose them knowing that they were the most expensive because we had a lot of trust in them and we really enjoyed all of our time until we got that final bill and they just don't have a great explanation of it than things add up. And when you look at the itemized bill, you saw the money go towards certain things that you know were implemented. Basically, that overage all came

Starting point is 00:56:23 in some of the extra structural work, and there wasn't like broken down this much for such and such materials of it. It was just for this portion of the work. That's where the overage was. But the guy said he looked over it thoroughly and he

Starting point is 00:56:39 doesn't think that there are any mistakes. And I don't think that it's a, like, I don't think that there's scamming us or anything? Right. I think that they just truly... It's just bad communication and they went ahead and started making decisions on your behalf without you choosing to.

Starting point is 00:56:52 So, yeah, just got, I don't know if there's much you can... I don't think there's much you can do at this point. That's kind of what I was afraid of. I don't think so, because the work is done. And unless you're going to say, unless you're going to make them go through and, like, itemize that and push on it and have the ability to speak into it from that viewpoint, do you see what I'm saying? I think, but at the same point, I hate to tell you that because to spend an extra 25,000 over what you thought, because you said they're going to, you said first they added 14,000 and then they added another 25, but then they refunded 10. So you're 29 over what you thought?

Starting point is 00:57:32 No, so it was basically 40,000 over the original estimate is where we ended up. Okay. And there were 14,000 of that. We did approve. prove that they actually talked to us and said, okay, this is the change we need to make. We just, like, in the back, it had to be full thickness replaced. Okay. And so they talked about that. We approved to go that extra $14,000 beyond the $75. So you approved that?

Starting point is 00:57:57 Yes, but then the final bill was $114,000. And so that means like $25,000 of overage that we never talked about. But then they came back and they said, we'll give you $10 back, right? Yes, they said $10 back. So that leaves us with about 15,000 of the overage that wasn't approved. And if we need to make it happen, we can continue. Like we cut our salaries back to try to do all of this in cash. And we can continue doing that.

Starting point is 00:58:26 I mean, I can tell you. And Rachel, you're probably better suited for this. But anytime I've done a project in my house, it's always been a little bit more than the estimation. Yeah, it's like over budget, over time. I mean, that's like kind of the classic. It just always is. And so we always plan for that. And maybe, I mean, that's just the way it is.

Starting point is 00:58:44 Now, that's like projects, like renovations. But typically, if I'm having something serviced or replaced, what they tell you it is, usually is what it is. Yeah. Yeah. We were just kind of shocked by. Yeah. And to the tune of 15,000. At this point, I feel like they were fair enough to say, okay, you approved the 14.

Starting point is 00:59:06 And then they said, oh, we're sorry. We comp the 10 back. There's part of me that I don't know. I would keep. I mean, you could push on it a little bit more, but I just don't know how much you're going to get out of this. Yeah, I mean, you could push and just say, hey, this is the amount we've agreed upon. We did not sign off on the change orders of no. And again, they may have gotten in it and the structural stuff. To your point, they may not be scamming you, but they're like, no, we have to do this. And so it's just the, it's the communication. It's a communication aspect of it.

Starting point is 00:59:34 That's really, really frustrating. And you got a top of the line company. And, and, you got a top of the line company and they I know those kind of companies and they will get they will have the best of the best of the best and that's what you pay for. That's right. And you get what you pay for in a good way but you also sometimes could be overpaying for something that you probably could have gone

Starting point is 00:59:53 maybe middle of the road and been it's fine. You know what I mean? But that's hard. So yeah Jessica I'm sorry. The teaching I guess would be when you do things like this really You have to be on them. Yes and you have to be on that communication with them. So yeah, Jessica, I wish you had a better answer.

Starting point is 01:00:09 for you, but oh, I'm sorry. All right, let's go to Hunter in Suval's. Hi, Hunter. Welcome to the show. Yes, thank you for having me. Absolutely. How can we help? Yes, so I am just starting to get snowball, my wife and I, and I, sorry, I bumped into a financial planner,

Starting point is 01:00:29 didn't get his name or who he worked for, but he recommended that I amend my W-4, so that my, sorry, I'm out of breath. What are you doing over there? I'm not saying that works and I was trying to stay busy while waiting to come on the line. Oh, no worries, no worries. So they said to adjust your W-4 taxes to what? Because currently I have maximum deductions taken out and we do receive about a $6 to $8,000 a year tax return.

Starting point is 01:00:58 Oh, yeah. I should amend it so that it's a lot less so I get more money we'd be to put towards the debt as well. Correct. I would agree with him. Yes. Okay, and I know the tax forms changed in 2020. Uh-huh. How do I go about doing that?

Starting point is 01:01:16 It's actually easier than ever. There's literally a line item on there where you can change the amount of withholding. You can just write it in. And so what you can do is think about if not much has changed on your taxes. You can say, okay, what was my typical tax return or tax refund? And then you can go through and divide it by 12. And that's a really good way. to get an estimate of what that is monthly

Starting point is 01:01:41 and just adjust it up or down. And the lines, I mean, I'd have to pull it up on my computer, but the line item is literally on there for you to change it and put in the withholding that you'd like it to be. So you can change it from what it was to what you'd now like it to be. I mean, you could get close to $600 back hunter

Starting point is 01:01:57 each a month, which is amazing. And by the way, that's what we would tell anybody to do who's getting a large refund, especially if you're on Baby Step 2, that money, I mean, we sit on here all the time. your income is your biggest wealth building tool. You need your income, especially if you have the target of trying to pay off debt, if you're trying to save money quickly, as much money that you can

Starting point is 01:02:19 have in your pocket at your disposal to throw at that target, gosh, yes, get your hands on that money. Yep. So we are with your financial advisor, Hunter. So yep, go in and do that. And we actually have a great blog on Ramsey Solutions.com all about taxes and adjustments and withholdings, all of that to get this right. So we'll put it in the show notes for all you guys watching on YouTube and listening on podcasts. But yeah, Jay, that's one of our, when you're starting baby step two and you're starting to pay off your debt, there's a couple of go-toes that we've learned over the years to check. Insurance, check your insurance rates. You could be spending more than you need to, so you can get some cash back, be looking at your expenses and what you're spending every month. And one of them is

Starting point is 01:02:57 your taxes. Yes. You know, put money back in your pocket so it's not sitting over in Washington all year. And then you get an $8,000 check that you can use. You could be using that to get ahead financially. So, yep, Hunter, make those adjustments and, yeah, get as close to zero as you can. And, yeah, and tax season doesn't have to be a big pendulum swing one way or the other. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential,

Starting point is 01:03:58 because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in,

Starting point is 01:04:23 while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money still showing up. And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price. no pressure, no upselling. I've trusted Jeff Zander and Zander insurance for over 25 years, and so is my family. So don't wait. It's fast, it's easy, and it could make all the difference.

Starting point is 01:05:05 Go to Zander.com or call 800-356-42-82. Protect yourself, protect your income, protect your family. All right, let's head to Kansas City, and John is on the line. Hi, John. Welcome to the show. Hi there. How are you? I'm in a situation where last, Last summer, I received $175,000, just a lump sum. This summer I'll be receiving another $183,500. And the next year from January on to the 12-month period, I'll get paid $130,000 over that 12-month period. So I was just curious. I've spent about $75 to $80,000 between taxes and other expenses from that payment I got last summer.

Starting point is 01:06:04 So I had two main questions, and the first one was, you know, how to invest some of the, some of the money that I have right now. I already have that $40,000 in a 401k and have money going into a Roth IRA and a life insurance policy. And like I said, the question I had was how could I invest that money? And also would I be able to comfortably and feasibly afford a $50,000 vehicle? Wow. Where's all this money coming from? John, is it work or is it like a trust or something?

Starting point is 01:06:37 Athletics. You know, I'm in sport. Oh, wow. So it'll keep coming. You'll keep earning like this? Honest, yeah, I should have mentioned that. It will go down. It won't be as much.

Starting point is 01:06:48 I won't be, it will probably level out to be anywhere from 70 to 100,000 per year on average after this pay. Now, do you do anything else to earn money or it's just that? I do not, you know, with the money I have, receiving. I thought about maybe a business or a house or just, you know, brainstorming things. Yeah. Okay. So I added up the numbers you gave. And if my math is correct, I could be off. But it's close to half a million, $48,000. How much of that went to taxes and like what's left of everything? Like I know you have a payment coming next year, you said.

Starting point is 01:07:28 Yeah. And so I've only received so far the $175,000 last year. And I believe I've spent about $75,000 to $80,000 between expenses and taxes. Okay. So you have about 100 grand of that. Well, I should mention I have, I put 40 grand into a 401k, so that's not necessarily liquid. Oh, okay, gotcha. And what about just your month-to-month expenses? Like just you're eating and your rent, and how are you paying for that? That's through the, through these payments for right now. And that's my monthly. It totals up to be about 2,000 to 2,500. And then the other thing I wanted to mention was I do want to give some to charity. and ties. So that will be like about around 10% of all of this will go towards charity.

Starting point is 01:08:13 Okay. So then I would do this like any other budget. I would sit down and I would, because you're getting this every single year. So for this year you made $175,000 a year? Is it guaranteed? Because you get hurt or something and that you won't get the 183 next year or is it guaranteed? So that 183 and a half will be actually at the beginning of June this year. And that's guaranteed.

Starting point is 01:08:33 Also the next payment, the one in January, the 100. 30,000 across 12 months that I will start receiving in January is guaranteed. And I could, it'll be up to discussion, but I could potentially even start receiving more money next year. Okay. And then even after that, we'll likely, it'll definitely start. Gotcha. Because I, the thing with payments, and I feel like this would be the same if someone isn't sales, right? And they have a massive, a $200,000 commission coming in, not to get ahead of herself and making sure that you actually have them. Don't spend the money before it comes, right?

Starting point is 01:09:07 So don't go out and buy a bunch of stuff and then wait for that money to head. So you want to be cash flowing it well. So when Jade said, yes, setting up like a regular budget is exactly right. So you'll just know ahead of time, okay, in June, this big payment is coming in. So I need to know what I want to do with this. So yes, to answer your question, yes, you can totally afford a $50,000 car. Yeah. What about how are taxes being taken out?

Starting point is 01:09:32 Are you responsible for that or are they doing that? Because I don't want you to get hit with a massive tax bill. after spending all this. Yeah, because you said you paid $75,000 in taxes already, right? Well, that was, no, I didn't. I paid $20,000 up front in taxes, and we filed for a tax extension this year. So I just paid that up front, but I hired like a financial advisor, and he has a CPA that helps me with taxes and things like that.

Starting point is 01:09:55 So I pretty much paid that to file my taxes. Okay, so just overseeing that, making sure that's done properly. And then, yeah, I'd go through, and I'd budgeted out, and I'd try to make this feel a little bit more normal instead of feeling like I've got this you know windfall of money and I can just do a bunch of stuff with it I take it and I'd say okay if I'm not going to get money for the next 12 months what is that every month is it around 15 or 16,000 and then plan it out like a normal budget whatever your rent or mortgages whatever you're going to pay for and then you can budget amounts every every month I'm putting aside this much for my car or I'm putting this much aside for you know

Starting point is 01:10:30 what have you just a typical budget so you feel the normalcy of that and the kind of like the nature of how that feels month to month versus kind of trying to make every decision in one feel swoop. Yes. Does that make sense? Yeah. I think you can't. Yeah.

Starting point is 01:10:46 I think you can afford the $50,000 car, but there's part of me, how long have you been earning like this? How long has it been going on? This has been until last summer was like the first big payment I received like that. And then like I said, I'll get one in about four or five weeks. And that's beginning of June here. And then it will be, and then like I said, the next. In January, I'll start receiving that.

Starting point is 01:11:07 But it'll kind of level out from there to more of like a normal salary of like $70 to $100,000. So if you take the $50,000 out of the $183, then yeah, you're just taking the $130 and you're budgeting your 12 months based off of that. And I would do it that way. There's part of me that would love, how old are you? 24. There's part. I'm just going to say this and you don't have to do this. This is just me being your buddy.

Starting point is 01:11:34 there's part of me that I would take this money now and budgeted that way and I would save up. I would teach myself to save up the $50,000 out of your budgeted money every single month and start exercising that muscle of delayed gratification because there's something to that at a young age and especially when you're receiving money in big clumps like this resisting the urge to dump it all on big purchases right away. Does that make sense? Yeah, I'm very like, and that's the one of the reason I'm calling is I'm pretty conscious about I don't really buy luxury items for myself. This is kind of like the first thing I've been prompted to like really buy like for myself, so to speak. That's like a luxury item. But my question on that is like how would you go about

Starting point is 01:12:17 kind of saving on the on the money I'm receiving? Is there like a way that are you talking about investing in stocks or like having a business? So we'll set you up with every dollar, which is the budgeting tool that we use. It's more than just a budget. And it's going to not only help you manage the money, but it's going to teach you our way of thinking and our guided plan here at Ramsey, which is the baby steps. So here we focus on doing a couple of things really well, but doing them in order and focusing on one at a time so you can actually achieve it. So you're a person, it doesn't sound like you have any debt, right? So that jumps you automatically to what we would call baby step three, which is making sure you always have, in your case, I'd have six months of expenses.

Starting point is 01:12:58 We say three to six months. That's just parked in a high yield savings account. account. It's not invested. High yield savings account. It's liquid if you need to get to it, but it's also set aside from your normal spending money. And then from there, you do Baby Step 4, which is you're investing 15% of your gross. Which you've already started that, John, so well done. So, yep. Just make sure it's 15%. Yep. And then no more, no less at this point. And then if you wanted to, you're a young guy, you don't have children yet. So you can skip Baby Step 5 for now. But then Baby Step 6 is if you have a house, you're thinking about paying off the house, or if you haven't, you can start putting a down payment for a house, that sort of thing.

Starting point is 01:13:36 And then after that, after you've paid off your house, then you can start investing more. But that's kind of our guided plan on how we think about moving through building wealth and making progress with your money. So it sounds like you're doing a lot of those things. You just need like the tune up of it. Yep, that's right. Sure. Yep. So, yeah.

Starting point is 01:13:55 And then you had the giving aspect to throw in there too. So, and I think that that'll be in every dollar. And I would tell you, John, that when you give out of this, I probably would recommend having two or three places you give to because sometimes if it's one big donation, especially if it's a smaller nonprofit or something, and you end up being the one propping them up for a while, because this is not money that's going to be continual throughout the rest of your life. You know what I mean? Like, just be wise about the giving. But yeah, I think you can do it all. So you just said give to a couple of different companies and what was the reason for that? I would because if you give this, if you give 18, 20, 30,000 to one, that's a huge windfall in them.

Starting point is 01:14:38 And if they expect any level of that going forward, you don't want to be the largest donation, right? So just something to think about because it's just going to be a lot of money at once. So, yeah, so John, absolutely. I think you can be giving, invest 15% of your income. You can go enjoy some of it. And I think you can't afford that car if you want it. And then be thinking about real estate too. and putting a big down payment on a home.

Starting point is 01:15:02 I think those buckets, it's a lot of buckets, but I think you can fill them over the next 12 months with all the work you've done. Trying or selling your home is a big deal, and with all the clickbait headlines out there and conflicting data, it's really hard to know what's actually happening in the housing market, and so we're here to make the latest trends easy to understand.

Starting point is 01:15:47 So last month, the average 15-year fixed rate rate ticked up a bit to 5.5.6%, but it's still under 6% people, so we're happy about that. Now, if you are financially ready, a small rate increase like that should not hold you back. So go ahead and jump in the market if you are financially ready. Now, median home prices went up to $415,000 last month, which is pretty typical for the spring market. And with more homes available and more buyers entering the market, it's a great time to buy or sell. So if you want to learn more about the housing market trends and get free tools to help you when you buy or sell your home. And to do it with confidence, go to ramsysolutions.com slash market. Or you can click the link in

Starting point is 01:16:31 the show notes if you are listening on podcasts or watching on YouTube. All right. Let's head to, is it, is it Ea and Buffalo? Did I pronounce that correct? Yes, I am. Sorry. Yes. Well, thank you for calling Iya. How can we help? So I have a question. I am about to run into about maybe $2 million, a lump sum. But I have bad money management. I give away my money. I spend my money. I am currently right now living in poverty.

Starting point is 01:17:01 I am a nurse in my town, so I have had tons of money. I go and buy high-end cars. I've bought houses, sow houses, getting houses away, diamonds. Oh, boy. I cashed out my 401K about a couple years ago. Oh, my. What's going on? I make really, really silly financial decisions.

Starting point is 01:17:23 I've been chapter seven bankrupt three times. Oh, how old are you? I'm fine to 44. Okay. And you're ready to break that cycle? You know it exists. You've identified it beautifully. And I am extremely fearful.

Starting point is 01:17:39 Like, when I get this money, do I, like, go and pay cash for another house? Like, do I finance the house? I just don't know what to do. And I don't want to fall into my old pattern. Like, speaking, going out of town when people. don't even know. Do you know, have you identified the source of what that's coming from? Have you identified what causes you to, because it sounds like you're a bit of a rescuer. It sounds like you come to people's rescue who don't, you know, it sounds like you're a bit of an enabler. Have you

Starting point is 01:18:11 identified why that is? Yes. And where that comes from. I've always been into, you know, shopping and saying my grandmother was very wealthy. So we shopped, we did well. My brother was murdered in 2013 and I started to pad my life emotionally with materialistic things. But I couldn't fill the void. So it just took me in the overdrive. So like we're talking about me waking up at 6 o'clock in the morning and catching a flight to Texas just to eat just to come back home that night. Like crazy things that you won't even, you couldn't even think of.

Starting point is 01:18:45 Have you figured out how to remedy that in a healthier way or how to kind of heal through that? Well, I have a grandson now. So he's, I think I've healed it. I think I've not healed the homicide, but I've navigated through it. So now I'm not as ditchy to go and spend money. Okay. I'm hurt now.

Starting point is 01:19:06 So all of this great lifestyle went down the drain. I can't work right now because I'm hurt. Yeah. But this is where this is where this $2 million is going to come from. How long are you, how long are you unable to work? Like, what's the status of that? So I've been out of work already for about 18 months. Oh, man.

Starting point is 01:19:27 And the $2 million, did you get hurt on the job? And you're getting a settlement? I did not get hurt on a job. I had a flaw, but I am getting a settlement. Okay. For about almost $2 million. So I need to refund my 401K. I need to buy another property.

Starting point is 01:19:44 I need to buy a car. Like, I need things to do, but I also want to open up a business. I want to open up a home care business. Okay. Okay, let's pause. Let's pause. Let's pause. Because you're already starting to go back into that mindset, which is the moment I have money, I've got to spend it on something. And that's not true. So I want to open up the conversation with a really basic principle that we teach here. And it's so basic that we teach it to kids, which is when you have money, there's three things you do with it. You give some, you save some, and you spend some. And you have to do all. and you have to do them in the correct proportions. And if you can walk away with that little piece and filter everything through that, Aya, that's going to help you because you've got to save some. And that's the part that's missing from your equation.

Starting point is 01:20:37 So those three things. And then the second part, which I'll call it the second part, but it's probably the most important thing that needs to underpin all of this, which is you've got to decide. and I don't know what your relationship with debt has been, but you've got to decide no matter what I don't borrow money. Okay. At all. Ever. Ever.

Starting point is 01:20:59 Not for business. Not for other people. Not for cards. We don't borrow money. I hear you say it. I don't borrow money. I don't borrow money. Ever.

Starting point is 01:21:10 Keep that so close to your heart. Keep that so close to your heart, okay? Yeah. Because this $2 million can change. This will change your life. This will set you up for a life without financial stress that you've been in. You know what I mean in these cycles? And so we'll tell you kind of what we would do.

Starting point is 01:21:29 But at first I would also say, so Jade's big, big point. Did you hear give, save, spend, no debt? I'm going to tell you, you need to find someone. I don't know if it's someone a good friend, a family member, someone in your church, but someone who is good with money. someone who has built some wealth slowly over time and you look at them and they're the kind of person that you're like, I trust them.

Starting point is 01:21:54 How they live their life and the way they view money but they've done well, I want them in my life. And I'm not kidding, before you make any big purchase, I want you to call that person before you do anything. Did anybody come to mind? Did anyone come to mind when she said that? Yes, two people. Okay.

Starting point is 01:22:11 Yes. And they need to know everything. I mean, see, I'm serious. the deep, I hate the word accountability because it feels so like I'm going to tell you yes or not. It's like a friend. A true friend. A true friend who can be your financial friend who's going to know all the numbers. You need someone in your life that is with you in this.

Starting point is 01:22:26 And not because you're not capable of doing it your own. I think you can build that muscle and you can. But for anyone out there who's single and doing this stuff, and especially if you're coming in to $2 million and you're so self-aware enough to know, like, I'm not great at this. Have someone who's good to bounce ideas off of, okay? So those are important. Now, what are we going to do with this $2 million? Let's talk real quick. What is your car situation?

Starting point is 01:22:48 You threw about a car. What are you currently driving and do you have debt on it? I'm not driving anything at the moment. I can't drive. I have to have surgery, so I can't drive. Oh, because of your health. Okay. How soon do you think it will be until a car becomes part of your life again and driving becomes part of your life again?

Starting point is 01:23:09 Probably about eight or nine months, maybe about eight months. Okay. So let's just hold off on that. What about other debt? Do you have debt that needs to be paid off? Do you have any debt? Absolutely. Tell us.

Starting point is 01:23:19 Tell us all of it. Probably about a $25,000, maybe federal credit cards that I need to pay off. You know, just capital ones, discovers, but everything is high limit, $20,000, $10,000, $30,000. Everything is high limit and everything was maxed out. Okay. So how many, if you had to calculate how much debt you have in credit cards, what's the total? right now about 73,000. Okay, okay.

Starting point is 01:23:45 So we're going to cut those up tonight, AEE, okay? We're done with credit cards, okay? Because Aea is a person that doesn't borrow money. We don't go into debt, right? I do not borrow money. That's right. So that means no credit cards. Cut them up.

Starting point is 01:23:57 Okay. Get your debit card out. That's what you're going to spend money on. On your debit card, no more credit cards. They've been horrible to you. You see what it's done? Yes. Not a blessing.

Starting point is 01:24:07 Not a blessing, okay? Now, what about the first? 401k, was it a 401k loan or did you just take the early withdrawal? Like, what did you do? No, I did an early withdrawal. I ran into like a little health issue bin, so I was able to cash it out, not too many penalties. And I lived off out for a little while. Okay, so that's not debt. But after that, I had my accident. And so now I've been out ever since. Tell us more debt. Is there more besides the 73,000? No, 73 should. What's your housing situation?

Starting point is 01:24:40 I live somewhere where I don't love, so I'm absolutely looking to buy. Do you own a home? No. You're renting. Okay. We're going to take some of this money and we're going to buy a modest, modest, not a $2 million, not a $2 million home, a modest home to get us started in an area that we like. Okay.

Starting point is 01:25:01 So those would be some big purchases, but you need to go over those numbers with a friend. Please have someone in your life that's walking through this with you and cut up the credit cards tonight. Let that be one of the posts in the ground for you. Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm Rachel Cruz, hosting this hour with Jade Warshaw and we are taking your questions. All right, let's go to Maria in Lafayette. Hi, Maria. Welcome to the show. Hi. Hi. Hi, welcome. How can we help today? So I'm calling because I inherited a decent amount of property from my great grandmother. Her son, my grandfather passed in 2014, so it went to me, my two siblings, my uncle, and my biological father.

Starting point is 01:26:02 Oh, wow. So split between five people? Yeah. Okay. The question is I am, everybody's telling me I need to take this to court and fight for, ownership over certain people's pieces because some people intentionally damage the property to lower its property value to try to make it easier to buy me out. Some people have stolen from the estate in a total that's up to like $80,000. So everybody's like you need to take them to

Starting point is 01:26:34 court and get their portions. That way you'll own most of it. What's it all worth? When it sells, you can get a fair price. Well, here's the thing. They got it appraised and with all the damage they did to the home, it appraised for $40,000, but it's a brick home in good condition on 20 acres of property with a tractor shed, a pond, two livestock barns, all fenced in field. All that together is worth $40,000? And a bridge going over it. Are you saying all that together or just the home on the property is worth $40,000? They want all of that for $40,000.

Starting point is 01:27:11 Who's they? My uncle that is currently living in the home. No, no, no. I'm saying market value. Like if you took it to a buyer. He got it appraised. The house with the three acres immediately around it is $40,000 because they damage the home so much. And they all smoke mess.

Starting point is 01:27:32 Oh, boy. So the entire house needs to be gutted because those vapors all in the wall. Yeah, Maria, you're in a, that's not a good, not a good spot. And they're also very aggressive towards me because their mother, when she passed, she left me everything because she's been no contact with them because of drugs, theft, everything else. So I got everything from her. So they're already very aggressive. They're pissed at you for sure. How much does this matter to you, this $40,000 shack, meth shack?

Starting point is 01:28:03 You know, honestly, for real. Me and my husband are in medical debt, so I'm trying to wonder if it's worth it. to fight to get a fair price to try to get us out of debt so we can move on with our lives. How much debt did you say? In total, without our mortgage, we're about with my student loans. All of it, all of it except the house is what I want to know. All of it except the house, it's probably like $36,000. Okay.

Starting point is 01:28:38 And how much do you guys make a year? We make right about a hundred and twenty-k a year. Okay. And how much you said that his mom left you everything? Has she passed away? Did you get an inheritance then too or not yet? She's just going to leave you? She passed.

Starting point is 01:28:56 She didn't leave me any money, but she left me farmland that's in a 90, so in Louisiana's a 99-year lease, I inherited that lease. So it's still valid with the people who are with it. Okay. Which is fine because that's just pass-a-end. Okay, gotcha. Okay. But also where they're at right now, none of them are paying the taxes, so I'm having to pay all the taxes on everything, so I don't get liens against me. And since they're living in it, it's a whole legal process to evict them to even try to sell on the market, and they don't

Starting point is 01:29:28 want to do that. But I have to make a poor decision either way. It's just a hard decision. I'm just trying to decide how hard it should be. What's the process if you said to a judge, I want no parts of this? Take me off. Take me off. What needs to have you checked into that? I have. And to just walk away from it for $0,000, I could just sign it over to them.

Starting point is 01:29:54 And I almost would. Well, Maria, listen, if it's 40,000, because I bet the house, you're right. They're going to have to gut it or it's going to be done. I mean, yeah. But it's also another 20 acres of land. How much is that worth? Have you appraised that? The 20 acres that it's on,

Starting point is 01:30:11 like I was told by the appraiser, she didn't do an official appraising of that, but she said for all of the property, it'd be close to $120,000 just because of location and everything, not including the house. Okay. And there's, so each of you, when it's all said and done, it just in a perfect world,

Starting point is 01:30:33 if everyone sold it and you guys, cashed out five ways, you each would get around 30 grand-ish. Yes. Okay. So the question is, from a, from a, and they, they don't have the money to buy you out. They don't have 30 grand. No. No.

Starting point is 01:30:52 And are they the ones? My bio father hasn't worked since I think 2014. The other four, are they all kind of off the rails, all four of them? Like the uncle stays on drugs. Okay. Who's the executor? Who's the executor? The executor was a family friend who as soon as this was done and like everything.

Starting point is 01:31:20 They're out. So the succession is done. He wants nothing to do with any other. He won't even answer because he was like, all of y'all are nuts and I'm not dealing. Okay. So that answers my question, which is you're in this with a bunch of just like Darylicks, right? And you have to decide how much, like, there's, there's, mental energy and just

Starting point is 01:31:41 there's a lot of personal toll emotional toll of this that you have to decide if you want to even engage in. If you went the litigation route, how much will attorneys be and all that that will cut into your 30 grade? You're ready to me like? Yes. So you got to just think through from a from exactly what Jade's saying, from a

Starting point is 01:31:59 mental investment standpoint and emotional and a financial at the very end of it all what's worth it. And I wish a judge could step in and have you gone that route at all? Have you, have you looked into any legal proceedings? Oh, yeah. I sat down with a lawyer and spoke with a judge that she knows. And my options are sign over and walk away and then send them all a notice to say, hey, you owe me

Starting point is 01:32:31 $700 in property taxes because in this state, when you owe property taxes, one person gets a notice and they're expected to inform the other people. Okay. So you could do that. I had to pay it so I didn't get a loan. What was option B? They said I could walk away and just try to get what I spent in property taxes since I covered all their share back.

Starting point is 01:32:52 Okay. What's option B? I can file what's called. I forget exactly what it's called, but it's basically a motion where you have to make a choice. Buy me out or we sell and this is done. Yes. And I make that.

Starting point is 01:33:07 Just do that. Just do that. Yeah, push forward on that one and just see what happens. That one is expensive because they would argue it and it would be. Well, they have no money. They can't argue it. They can't hire lawyers. They don't have any money.

Starting point is 01:33:21 They can argue with you personally, but they can't do anything legally. How much does it cost to do that right quick? I was told to be prepared to drop at least $5,000 outright and then if they argue it, possibly more from there. Okay. Well, do you, yeah, if you have five grand available, which you guys are in debt, you may not. I don't know. I don't know, Jade. Part of me would just walk away.

Starting point is 01:33:47 I think I might walk away. I don't think you. I don't know when to hold them and when to fold them and when to walk away. Hey, guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more.

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Starting point is 01:35:33 Okay, today's question comes from Natalie in Georgia. She says, I'm currently on Baby Step 6 and earn over $100,000 per year. I invest 10% of my income in a Roth IRA. my monthly expenses are around 6,500. I live with my partner in a home that he owns, and we have no plans to get married. I pay him $2,500 a month, which is significantly less than what I would pay living on my own. We keep all of our finances completely separate. I don't want to buy a home, so what would you recommend I do instead to continue building wealth and long-term security? I want to make sure I'm following the spirit of the baby steps while also being real about my situation. Okay. So just to recap, she makes a good income. She's investing for herself.

Starting point is 01:36:21 Her money is separate from the live-in boyfriend, but it's his house. So, Rachel, there's a lot to unpack here. I'm first going to answer this question based on her way of living. Okay. Okay. Which is, if I were you, you're not married to this guy. This is his house. Your money's totally separate.

Starting point is 01:36:42 Then, yes, I would just keep investing. and building wealth. And if there is no, essentially, you'd be on baby step seven. So you'd be investing well beyond 15% and continuing to build your wealth for yourself without his input or name attached to any of it. Right. Absolutely. And yes.

Starting point is 01:37:01 Yep. I would do that. And then I probably, I don't know, I just thought of this as you were talking, Jade. My fear is because you're not married, there's no legal tie in, right? Like even if your name obviously wasn't on the home, but you guys remember. married and you split. It's seen as a marital property. So you would get some level of equity. You're getting nothing right now. And if he decides to walk away in four months, you don't, from a housing perspective, you've built nothing on that side of the equation.

Starting point is 01:37:30 Unless you made some sort of a document that you both sign and make some sort of a agreement that could hold up in court. Yeah, that if they break up, they have to sell the home. And like, yeah, there could be that, right? Because I think there is. There are documents for that. Yeah, depending on the states. So I would honestly, I would, my only, yeah, you're doing good with everything else. My fear is the housing element of this for you. So either, yes, you need a formal, that's right, a formal document that will hold it up in courts to say if this long term relationship, what do they call it?

Starting point is 01:38:02 It's a, there's a term for it. Yeah, I'll look it up all you. I'm blanking. That if, yeah, if we separate, if we break up, still like what we've been building together actually can be seen as like, common law marriage type thing. That's the possibility and or if that's not going to work in your state specifically in Georgia, then maybe on the side you're just putting a money away. And it earmarked for the future.

Starting point is 01:38:27 An earmarked is a possible down payment on a home if you guys break up so you can get it, you can be in a good position from a real estate perspective long term. Yeah. So that would be the only thing I'm concerned about in this. The biggest risk you have is from a real estate perspective that you're just paying rent. you're building no kind of equity in your life. It's called a cohabitation agreement and that's what you can do. But the bigger part of this, and this is worth saying, but home ownership is such a big part of wealth building. And if you don't have that cohabitation agreement, then your portion of

Starting point is 01:39:03 that wealth building effort goes away. And then if I were her, I would be looking for other ways to diversify my investing. To be able to get to it if you needed it. Yeah, absolutely. But, Now let's talk about this from a from a Jade and Rachel perspective. Okay. Which I think we should. And this is not anything on judgment. This is just you called this show. Yeah, this show and we're the host.

Starting point is 01:39:24 I question the commitment that's really here because if Sam Warshall, that's my husband, if Sam Warshaw said to me, I love you, Jade. You are the love of my life. However, I'm never going to marry you. I don't want to marry you. And furthermore, I don't want my finances to even tell you. touch your finances. That gives me cause for pause.

Starting point is 01:39:48 I'm just going to say. And it causes me to go down into shutdown mode. And more so, I have many questions. Why? You don't trust me? Is there something about me? Did I do something?

Starting point is 01:39:58 Is there something about you? Right? That's right. That's right. Absolutely. I know. And that's part of the world today, Jay, that I'm like, I just kind of like do this.

Starting point is 01:40:06 What's the dog where they like turn to the side a little bit? Yeah, because. And not that everyone has to like get. get married and have kids by any such of the imagination. But when you are choosing to basically be married without the commitment, that's where I'm like, what's going on? It just begs questions. What is that?

Starting point is 01:40:24 Yes. So, yep, I'm with you, Jade. I think that's fair. That's our, that's the, that's the friends talking. Yeah, friends talking. We were having a glass of wine. That's probably where it'd be like, gosh, Natalie, what's up with Jared? Yeah.

Starting point is 01:40:38 Jared kind of sucks. Why doesn't, why doesn't want to get married to you? What's going on? Jared. Oh, all right. What a guy. Let's go to Memphis and we have Brittany on the line. Hi, Brittany.

Starting point is 01:40:48 Welcome to the show. Hey, guys. Thanks for having me on. Absolutely. How can we help? So my question, I'm 47 years old and about six, two months ago, six weeks ago, I bought a new car. And then recently have decided I wanted to start my debt snowball. And now I'm like, what do I do with the car?

Starting point is 01:41:13 Yes. Okay. How much is it? How much did you borrow on? 90,000? I'm going to spit my coffee out. She almost choked. Oh, my gosh. All right. Yeah. How much do you make a year? I make about 150. I bring home about 9,500 a month. How much is the car payment? $1,300.

Starting point is 01:41:40 Girlfriend. Let me tell you. Oh, gosh. Okay. I'm sure. Have you looked at at all selling it? Like, what could you get? It's a two-month. You'll have some depreciation for sure.

Starting point is 01:41:53 But if you turned around and did it. Yeah. Plus, I was upside down. Oh, got it. That's part of it, too. But I think it was only about by like $5,000. And I did put money down. How much could you get out of it for?

Starting point is 01:42:08 You mean, this car now, how much would I end up probably owing after selling it? Yes. So I would probably, I'm going to say I haven't looked really in depth, but I'm saying probably 15 to 20,000. Upside down? Yes. Okay. Wow. I would still get out of it because to your point, if you're walking the baby steps now and you realize this is too much car for you, which it is, and obviously it's on debt, I would definitely make that transaction.

Starting point is 01:42:37 I just wonder, though, do you have any cash laying around to put towards this? Oh, $15,000. bank. Okay, good. What other debt do you have? I have $46,000 in student loans and that's it. I don't have any credit card debt. Okay, perfect. Did you say $4,600 or $46,000? $46,000. Okay. She's like, I wish it was the first one. I wish it was the first one. Well, you make, that's what I was laughing about because I wish it was. Yeah, you make good money. You have $15,000 in the bank, which is awesome. So what I would do, yeah, I would throw a lot of that cash to, which is going to hurt. You're still going to have to take out a small loan.

Starting point is 01:43:19 But I mean, I would, you know, I would look at, yeah, I mean, $5,000. Maybe. If you do a private sale, you might hit it right on the head. Yeah, you might. The $15,000. You may have to take out maybe a $10,000 loan from a credit union to get you like a $6,000, $7,000 car and a little bit of the difference. But, yes, I would because you'd have 10,000, then you have to pay off. and I think you could pay off 10 grand.

Starting point is 01:43:41 If you put two, three grand at it a month, you could get this paid off in three to four months, that, and you'd be done. After bills and everything, I have about $4,500 left over every month. Beautiful. Okay, good, Brittany. Yes, okay, so that's great.

Starting point is 01:43:55 So that's what I would do. I would get out of this because that $1,300, even over the course of, gosh, a couple of months is eaten into it. So I would as quickly as you can sell this car, take a loan out for the difference, and a little bit more to get you around in a $5, $6,000 car. Yeah, and then...

Starting point is 01:44:12 And then you're paying $6,000 a month on student loans. Yes, and then you're knocking it off. So, well done, Brittany. I'm sorry about the $90,000, but you can get rid of it. It's going to be painful, but you can do it. When I talk to people on the Ramsey show, 90% of the problems I hear come down to one thing, not having a plan. They're not living on a budget.

Starting point is 01:44:57 They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you. And that's why I want you to go download our every dollar budget app. Every dollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you call the show. And it's right in your pocket. So don't keep living normal. Go download the every dollar app, answer a few questions, and get your plan today. We wish we could get to every call on the show, because we always leave the show with a couple

Starting point is 01:45:58 of people still on the board that we haven't been able to get to. So if you have a money question though, and you're like, listen, I may not want to call the show. Don't worry because we have a place for you to go. Go to our website and use Ask Ramsey. So Ask Ramsey is our free AI tool. And it's been built and trained, is what they call it. But you throw everything in this thing, and it shows over the past couple of years, all of our books, articles, everything in this. And you can ask it very specific, detailed questions, and it will give you an answer as if you had called the show. It will be a Ramsey approved answer and what to do. And it's fantastic.

Starting point is 01:46:36 I just saw some numbers in a meeting this morning about it, and it's like going crazy. It's great. It's so great because we want y'all to figure out what to do with your money. And if you need help, it's there for you. So go to ramsysolutions.com or click the link in the description if you're listening on podcast or YouTube and check out Ask Ramsey. All right, let's go to Corey in Atlanta. Hi, Corey. Welcome to the show.

Starting point is 01:47:01 Well, thanks so much for having me. Absolutely. How can we help? So I am debating on buying a new house. My dilemma is I am almost in Baby Step 7. That's the goal I've been working towards for a long time. And I'm a little scared to take out a larger mortgage, and this one's almost gone. Oh, man.

Starting point is 01:47:24 How much more of a mortgage would you be taking out? So we are down to $27,000 left on our current house. And the new one, the new mortgage would probably be $350 to $3.75. Oh, gosh. Yeah. And how much is your current house worth? About $5.50. Okay.

Starting point is 01:47:44 So you'd be looking at, like, $3.50. like an $800,000-ish, $900,000. Yeah, $8.58.75 range. Yeah, what's the motivation to move? Is it just size or is it a different area of where you guys are in the city? Yeah, the primary motivation is to be closer to work for the last 23 years. I've worked about an hour from where I live. Oh, wow.

Starting point is 01:48:07 And we've cut probably 25 minutes off of it conservatively. Yeah. Wow, yeah. How much do you make a year? We make about $300,000. Okay. And how old are you guys? We're 43.

Starting point is 01:48:23 Yeah, I mean, if you, I mean, you know, if it's in the parameters, like, this is just like the safest way. If it's in the parameters of what we talk about when it comes to mortgages, that the payments no more than 25% of your take home pay, you do it in, you know, a 15-year fixed rate. And all of it, it would still be a green light from a Ramsey percentage. perspective. It's so funny. I feel like this is one part. Like the second, the home upgrade. Yeah. Like if George was sitting in here, I think he'd be more good with it. Dave is still like, I'll never tell you to borrow money. Even more I want. But I, yeah, and I think that you guys have enough of the motivation because you've been doing this that I think you would pay this off pretty quickly, four to five years. I think you guys could get aggressive and say, you know what, we're going to

Starting point is 01:49:10 get rid of this. I don't think you're going to like having a mortgage. I think you've made so much progress on the helm now that if you got into it you'd pull a John Deloney. John always talks about this. He's like, he was like, I could not sleep until this mortgage was paid off because they had, they got a, you know, a small one when they came to Nashville. So I think that's going to be you guys. But if it's in the parameters, I'm okay with it. Uh-huh. And I would say the same thing. If you hear any pause from me, it's only because you had pause. You're like, oh, we're so close and I can, I feel that for you. Like I feel the feeling of like almost. We're starting back over a Yeah, yeah, yeah, yeah. But if it's in your value system, then it's totally cool. And quality of life,

Starting point is 01:49:47 all of that comes into planning. And you're not being, you're not being unreasonable or irresponsible. Not at all. Yeah, every day when I'm driving home and I drive by the location where the house would be, and I see the GPS, say 25 minutes to home, I'm like, oh, I just want to move. And then when I'm home, I'm like, oh, this is all this money. Right, right. I've been debating this for a year and we finally found a house that actually like everything that we want

Starting point is 01:50:16 So now it's like all right The rubber meets the road Are we doing this or not? Yep, yep, yep. I think if it's in those parameters Which I think it would be For your income Yeah, I think you guys, yeah,

Starting point is 01:50:27 would be able to do it. It's nerve-wracking. Yeah. What are you, if you had to give yourself like a percentage, like what are your percentages? Are you like 80% I really want to do this house, and it's just 30%, you know, it's just 20% that says no. Or are you like 50-50?

Starting point is 01:50:45 Where do you think you are? Prior to seeing this one that we really liked, it was very low. Because we've looked at like 50 houses, and I look at how expensive there, and I was like, I would never move for this amount of money. And then we found this house, and I was finally the first one that was like, oh, maybe maybe I would move for this house, you know? Yeah. I would say it's really like 50-50 right now.

Starting point is 01:51:07 What about your wife? she's more fine than I am because the move will not change her commute at all. So she's like, if you really want to do it, we'll do it. If you want to stay, we'll stay. She's very supportive either way. Okay. How long have you been in the job for? 20 years.

Starting point is 01:51:25 Oh, okay. So you'll probably be there for a little bit longer. Continue. Yes. Yeah. Continue there. Yeah. Yeah, I'd be okay with it.

Starting point is 01:51:36 And again, I think you guys are going to be motivated to get rid of this. I think so too. And so, I mean, if you just said, what if we threw a hundred grand at this? You'd be done in three years, which is insane on an $800,000 house. Like, you know what I mean? Like you're... You could get stupid on it. Yeah, I mean, seriously, you guys could really do it.

Starting point is 01:51:51 Not that you have to be that intense, but I'm just saying your natural motivator, Corey, I think will be more intense than the average person because you've kind of tasted this, like, level of free on the girl. It's right there. It's right there. But from the quality perspective of getting almost 40 minutes back each way. It's a lot of time. That's a lot.

Starting point is 01:52:10 That's a lot of time that you get back. That's, and I will say it's worth calling out. Like, there's few things that are like Trump money and time is one of them. Yes, yes. Yeah, and I have a young daughter too. So. Yeah. Don't have too many years left with her.

Starting point is 01:52:28 I'd like to get those years as much quality time as possible. For sure. Yeah, well, it sounds like you guys, the fact you've looked at 50 houses makes me think that you guys have emotionally been there faster than what is. reality is catching up to. So yeah, if it's a house you love and it's within the price range, yep, I would say go for it. All right, let's go to Joshua in Illinois. Hi, welcome to the show. Hi, thanks for taking my call.

Starting point is 01:52:56 Yeah, so I have my fiancé love of my life that we're going to be getting married at the end of the year. And she has about $60,000 in debt between student loan, credit card and, you know, car loan. And myself, I have the money that I can just pay it off once we are officially married. But I'm just more wanting to know if it would be better for us to kind of work it through together as if it was the baby steps and kind of be a first thing in our marriage versus me just kind of paying it off. I mean, I definitely would want to have that conversation of what is our philosophy going to be around money. That's what I was going to say. Is she committed to living a different? debt-free life because you don't want to go and pay everything off and then she goes right back

Starting point is 01:53:43 and her old habits and you guys are on separate pages. Yeah, no, she's doing the grade doing the baby steps has the every dollar like app and right now in her current like situation she works in ministry and doesn't make much money. But once we are married, she'll be moving in like with me and then like looking for other like work that will act like she has like a master's degree in counseling. So like once she'll be doing that work. and her pay will significantly increase. How much do you get married?

Starting point is 01:54:15 When do you get married? In October of this year. And how much of the debt does she have? How much debt will she bring it in? With what she's paying off now, I mean, it won't make a huge debt, probably still like, you know, 55, like $60,000. Okay, and how much money do you have cash-wise that you're bringing into the marriage?

Starting point is 01:54:37 So between my like investments and all accounts about 300,000. Okay. Is that, or is some of that 300 tied up in retirement IRAs or 401Ks? Yeah, about 150 of it is in like 401K in Roth and then the other one's in like a TOD brokerage account. Okay, great. Yeah, well, the path to become wealthy, the fastest is being out of debt. staying out of debt, saving and investing. And the faster you guys can get on that plan together, I'm a green light. I just want to make sure your values are aligned. And it sounds like they are.

Starting point is 01:55:15 So I don't really, yeah, no red flag for me on it, especially if you're both wanting to tackle get out of debt. I'd say it's a gift that you've been so diligent, Joshua. And what a, what a gift to start off your marriage debt free. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of. of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help.

Starting point is 01:56:11 It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's Ramsey Solutions.com. Our scripture of the day comes from Psalm 145-8. The Lord is gracious and compassionate, slow to anger and rich in love. Clara Booth Luce said, money can't buy happiness, but it can make you awfully comfortable while you're being miserable. Okay, Clara, that's exactly what I'm talking about. I agree. I agree.

Starting point is 01:56:59 I know once I remember we had this big discussion before we moved we built a home and moved in in 2019 and I remember I had so many nights in our old kitchen and so I was like I just can't wait to I can't wait to be in our new house you know because the drawers would all hit you know it was like this like this baby we had two babies at the time and food was all on the floor I'm clean at the food and Winston was like baby you know that like this exact situation is just going to be put in a different kitchen like there's still going to be food on the floor and all that and I was like the craziness continues I know but at least I'll have pretty cats It's like what I can look at. I feel you. It doesn't change you. You go with you. You go with you.

Starting point is 01:57:36 It doesn't make you happier. But yet it is a little more comfortable. You may like the cabinets a little bit more in the middle of the mess. Oh, man. All right. Let's go to Merrill in Asheville. Hi, Merrill. Welcome to the show.

Starting point is 01:57:48 Hey, thanks for taking my call. I have a pretty straightforward question. I have an old 401K that one of my first employers created for me straight out of high school. and when I went to college, it just kind of sat dormant and ended up closing. And now I can't contribute to it anymore, but we're going through some different financial struggles. I'm now a stay-at-home mom, so I'm not contributing the same way. I do work part-time, but it's definitely not contributing as much as I used to be.

Starting point is 01:58:18 And we have a Roth IRA, which we could roll before 401K over into, or there's also the option of closing it, I guess, and using the money for, we have some major car repairs that just came up. So, yeah, I'm just kind of curious what your thoughts are on what to do with the 401K, or just leave it alone. It has a very good rate of return right now, and it has been increasing. I just can't help it increase. Yeah, so I would roll it over just to a traditional IRA. You can just open that up. If you rolled it over into the Roth, I think the tax implication will be there, so you have to watch out for that.

Starting point is 01:58:53 And no, and I would not cash it out early because you'll just open that up. be hit with penalties. Yeah. And all of it. So, yeah, just rolling it over to a traditional. And we would say for anyone who's leaving a job with a 401K, just roll it over to an IRA. Because, yeah, so that's for anyone, because you want to be able to have somewhat control over what's going on.

Starting point is 01:59:13 And it's not just sitting in the old plan of an old company that you're working at. Yeah. And the reason behind not, obviously not cashing it in is it's still retirement money. So if you take it out early, you're going to be. hit with the penalties on that and the taxes obviously on that as well. So direct rollover. Yep. Great question. That's one that a lot of people do have. And if you had the money to pay the taxes and you wanted to convert it to Roth, you could. But not, but sounds like- That's usually a baby step seven deal though, right? And I was going to say, and you probably don't have

Starting point is 01:59:45 that considering you said we have car repairs and all of it. So that's right. So that's, yeah, thanks for calling, Merrill. Let's go to Rebecca in Orlando. Hi, Rebecca. Welcome to the show. Yes, I appreciate you taking my call in for any assistance. So I have had some recent vet bills. I now need to get a biopsy for my cat that's going to cost $2,521.16. I've not had a working vehicle since December, so I started saving then, and I've put aside $4,87.42. But with my other monthly bills and per the rate that I'm earning per hour,

Starting point is 02:00:24 I'm afraid I'm going to have to dip into my car savings to pay for this medical expense for my cat. And, you know, I do need a working vehicle. So I'm trying to strategically and intelligently navigate how to go about not only getting a car, but paying for this, that bill and any future expenses for my cat. How have you been getting to work without the car? I've been using rideshare and sometimes I'm able to work remotely as well. How much you have saved for the car? $4,000?

Starting point is 02:00:56 I'd save $4,877. Do you have a goal you're trying to get to before you buy something? I'd like to get a Toyota or a Honda because they're reliable, so I would prefer to have saved up between $8,000 to $10,000. Okay. How quickly will you get to the $8 to $10? I had a goal of setting aside $1,000 per month, but it's been a bit tricky because I earn $18.54 per hour,

Starting point is 02:01:23 and then I get commission. but what's that look like every month? It varies. I work for a major telecommunications company and commission, you know. On an average month, what do you make? I've been making for commission under 1,500. So my most recent check, I got a raffle and I got about $2,2,220.39. I just mean on a typical, like a typical average month, what would you say?

Starting point is 02:01:53 if somebody just quickly said, hey, what do you make? What would you say? $1,500? Yeah, we'll go with that, yes. I'm going to break some, and that's $1,500 a month, not a week, right? I'm paid by a week, please, so yes. Okay, so $3,000 a month? Yes.

Starting point is 02:02:13 Yes. Okay. I don't think you have the money to spend $2,500 on your cat's biopsy, and mathematically it's just not there. you can't spend a month's earnings on your cat. I wish you could because I love animals. We do. We do like animals.

Starting point is 02:02:33 But yeah, this is not financially. Especially when you don't have a car. Yeah. And you've got a problem. It's a question of priority at that point. Do you fund the thing that causes you to be able to work, which causes you to be able to eat and pay your bills, which is your vehicle? Or do you see what I'm saying?

Starting point is 02:02:54 And I'm not saying it's an easy decision to make by any means. I'm just saying that it is a necessary one that every once in a while we come to these points where we have to prioritize in order of absolute importance. And this is with anything, by the way, there is always going to be other things that compete to be the top dog, right? No pun intended. The top cat. But the point is you've got to say, no, no, no, no, no. this is it. This is the number one thing. And number two is going to feel, it doesn't make number two feel any less important is what I'm saying. That's right. Yeah. And I think what's, you know, and it's always funny what hosts get which calls, because George Camel, he probably would say the same thing. Yes. But George would spend more on his pets than all of us. He would. All of us combined. All of us combined. So yeah, if he was on here, he probably would have a little bit more, yes, lax. you know, whatever.

Starting point is 02:03:53 But yeah, it is a, it's a hard decision, but we have to be wise. And this is where our emotions can easily trump our logic, right? And you could do that with a home purchase. People go into a home because they're like, oh, we love it. It's exactly what we want, but it's 50% of their income is the monthly payment. Not logical. And so we do have to be very, very thoughtful about what's going on. And yeah, and like you said, Jade, we love animals.

Starting point is 02:04:22 and I would love for you to buy a car and then say, hey, let me save up and cash flow this expense coming up. Yeah. Yeah. That could be reasonable too. Yeah. And maybe get a second opinion with the cat. Maybe there's something you can do or there's something that will buy you some time. Yeah.

Starting point is 02:04:41 But certainly, please don't go into debt about this. That's my number one thing that I want you to take away is don't hear Rachel and I say, we don't think it's wise for you to spend your cash on this. and then please don't go and say, well, I'll put it on a payment plan or I'll put it on a credit card. We don't want you to do that. Yeah. And again, this is always an interesting discussion because we get all the people in the comments who think that we're not animal lovers. And we are.

Starting point is 02:05:06 We love animals. We have a dog. I mean, yes, it is great. It is your livelihood on the line. That's right. So we have, yes, that's where we have to plug in. Like, we have to be smart about this. Like there is a point of our emotions and attachment.

Starting point is 02:05:22 Yes. Is overdrive's like common sense, right? And some people spend tens of thousands of dollars and the pet does not get better. And then they, you know what I mean? Absolutely. And they may or may not have the money for it. So like, so there is. We just have to be logical in this, Rebecca.

Starting point is 02:05:38 So. And there is something to be said. I'm going to poke this beer right quick right before the show is over. I love it. You have to be able to afford the pets that you have. Yes. So if you're not in a season where you have a lot of margin, it may not be the season to have pets.

Starting point is 02:05:54 I keep throwing George out, but George would say, sell the horse, you know? He would. If we don't have the money for it to keep up with certain things. He would. Like there's a point, which is sad, but they will always come back around. Well, Jade, great show. Thanks to everyone in the booth.

Starting point is 02:06:07 And remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace, Christ Jesus.

The Ramsey Show - Stop Letting Emotions Drive Your Money Decisions

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