The Ramsey Show - Stop Letting Excuses Steal Your Wealth

Starting point is 00:00:00 Hey guys, Dave Ramsey here. Me and Dr. John Delaney are coming to a city near you on the Money and Relationships Tour. It's happening soon, so don't wait. Get your tickets at ramsysolutions.com slash tour. This is the Ramsey Show where America hangs out to get coached up on their life, specifically their money life, their professional life, and their relational life. 888-825-5225 is the phone number to jump in America. It's your show, 888-825-5225 is the phone number to jump in America. It's your show, 828-825-5225. Alongside the fabulously fly, I feel like today, Jane Warshaw.

Starting point is 00:00:52 I gotta say, I think you got a 90s vibe and I don't have a problem with it. I'm in it. I'm all the way in it, number 23. Yeah, I'm not ashamed of my age. I graduated in 1992 from high school. We've got a big group of fantastic looking Young scholars high schoolers from a local school here today looking at us and they're all like yeah He's pretty much my dad's age

Starting point is 00:01:16 And I am so can we clear that? We're not the same age though can know you're younger than me there. Look at you all ashamed. Are you shaming me? Listen, I'm not trying to be where you're at yet. No. Well, you look great though. You're pulling off the 90s vibe, making me look cooler than I'll ever look just to be next to you.

Starting point is 00:01:35 She's fabulous. She'll help you out with how to save the money, how to budget the money. I'm gonna help you out with how to make more money. That's our combo today. You ready to go? Let's do it. All right, Kayla's up first in Jackson, Michigan. Kayla, how can we help today? Hi, thank you for having

Starting point is 00:01:52 me. You bet. What's going on? So my fiance and I combined are about $56,000 in debt, and I'm wondering if we should use his retirement. I'm not exactly sure how much is in it, but it's somewhere around 50,000 to pay that off. Oh man. So these are retirement funds. It's not just money that's invested in a brokerage. Correct? I believe so.

Starting point is 00:02:18 Okay. When's the big day? March 29th. So right around the corner. Yeah. Okay. So split around the corner. Yeah. Okay. So split up the debt for us. Whose is whose?

Starting point is 00:02:31 So we both have 16 and some change in student loans. I have $3,500 on a car and he has close to 20 on his truck, which we're probably planning on selling. There we go. The biggest one. Okay, that's a good move. All right, I love the fact that you guys are looking at this debt and you see that it's an issue. I think that's a green light, that's a plus.

Starting point is 00:02:56 I would not use the retirement to pay this off. The retirement is there as retirement. If you pull it out now, you will be penalized for it. You'll pay taxes on it and you'll have to pay this off. The retirement is there as retirement. If you pull it out now, you will be penalized for it. You'll pay taxes on it and you'll have to pay a fee because you're pulling it out before 59 and a half. So for that reason, I would not do that. At this point, even though the wedding is just around the corner, I would focus on you two

Starting point is 00:03:20 paying down your individual debts with your individual income. And then when you do get married, you can come together and tackle this. Right. Yeah. If I'm your, your fiance, I would look into selling that truck. Do you know, um, the numbers around it? Do you know what he could sell it for a private sale? We're looking into it. And I think he'd probably be just a little bit upside down on it. Maybe like a thousand or 2000 thousand something like that. Yeah and if I were

Starting point is 00:03:45 him I if I could save up that one or two thousand really quick plus another two or three just to get a junker I would. Do either of you have money saved that's not retirement even if it's just a couple of thousand or a couple hundred? Yes but I'm going back to school soon so we're trying to pay for that without taking out more debt. What are you going back to school soon, so we're trying to pay for that without taking out more debt. What are you going back to school for? Well, I'm not in yet, but I have an interview for X-Ray and sonography soon. So hopefully one of those two.

Starting point is 00:04:18 Nice. What's that going to cost you? Total program? Somewhere around $20,000. And what are you doing for a living right now? I'm painting. I just have done it throughout college, so I'm just doing that. And then he works on interior. Like abstract art or painting people's houses? Like commercial painting. The reason I'm asking this question is I'm gonna challenge you that starting off this marriage debt-free or with very little debt is

Starting point is 00:04:51 Going to be so much more relaxing, you know, it's funny you you posted an Instagram reel today of you and I together on this show and it was And I was talking about The young man was telling him, you need to learn how to get out of your parents' house and learn how to live on your own because when you get married, what's gonna happen is you have these two individuals

Starting point is 00:05:14 that have grown up in two different households and there's a lot of culture shock. Yes, yes. And I'm just gonna bring that back up because it's fresh. Yes. I wanna get, Jade back here involved, Kayla,

Starting point is 00:05:26 but I would like to see you use that money to knock the debt off and let's hold off on paying your way through the school. I just think life, do you agree with me on that? I couldn't agree more. Take the reins from me on this. I couldn't agree more. And you're, instead of surrounding yourself

Starting point is 00:05:44 with financial problems, I'll put that in quotes, because going to school is a good thing, but the 20,000 that it will cost is a problem right now. Instead of surrounding yourself with more problems, it's really focusing on one thing at a time. And saying, okay, out of the two issues, paying for school and the current debt, what's the biggest, most burning priority?

Starting point is 00:06:04 And the truth is, it's the current debt that you have is the biggest priority, because how old are you? I'm about to turn 24 and he's 23, which is why I thought about the retirement, which is so young. You don't wanna do that, you're robbing yourself, you're just going backwards. Yeah, you've got time, and that's the one thing

Starting point is 00:06:21 I want you to take away from what Ken and I are telling you. You have time You yes, the debt is something that needs to take care of to be taken care of But it's not to the point of doing something extreme and making a further mistake like taking out your retirement And that's the thing can I think that people have to be careful of and Dave would say it like this You know when you get desperate, you know, you know, you start getting stupid, right? And so you've got to be careful right Right now you feel desperate. You're like, oh my gosh, look at all this debt. Don't turn around and do something stupid trying to solve

Starting point is 00:06:52 for the desperate. Okay. Did we ask you, Kayla, how much cash you have set aside for school? Together right now we have 12. Okay. So doing the numbers here, you said you guys have collectively 54,000. I'm gonna keep it at that because you're gonna be married. By the time you split this out and try to take it on your own,

Starting point is 00:07:12 you're basically gonna be married. So let's say you got 54,000, 20 of it is your fiance's truck. That takes it down to 34. If you put 12 on it, that takes you down to 22. Boy, that's really doable. I mean, I'm looking at this, yeah, Ken is right. The truck gets out of the way.

Starting point is 00:07:29 Your husband does that. He starts working on that today, right? Why not? You can take the 12,000, you pay off your car. How much is your car payment? Mine is like 135. Okay, now you've got another 135 back in your,

Starting point is 00:07:45 you know, month to month budget. What's his truck payment? 300. Oh, look at that. See, that's a big, big raise. Yeah, you're creeping up on 500 extra dollars every month. Then you take the rest, the other 8,000 that's left, you put it on your student loan,

Starting point is 00:08:02 and that's how this works. And before you know it, you're gonna be out of debt. This $56,000 debt problem is going to be gone, I predict, in one year. Oh, 100%. And then come this time next year, you're going to be paying for school, and you're going to be so much more peaceful. Imagine studying without debt, Kayla. Imagine taking your exams without thinking about making your car payments, right? That's what I'm talking about. So I want you to get there and make sure no matter what you do, you keep a thousand dollars

Starting point is 00:08:30 set aside as your baby step one baby emergency fund. You need that there in case something happens, but everything else needs to go to the debt. Yeah, I agree. It's not what you expected, but I think it's the best plan, especially being a young married couple. I mean, it's just going gonna make marriage a whole lot easier as you experience that first year of just learning how to live with somebody else.

Starting point is 00:08:51 And it's a lot harder than anybody tells you, by the way. So don't add money complications to it. Great first call, Kayla. All right, quick break. Jay's gonna tell me more about 90s fashion, and then we'll be back. This is the Ramsey Show. There's a time in your life

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Starting point is 00:10:17 You're joining the conversation about your life here on The Ramsey Show. Ken Coleman alongside Jade Warshaw. So happy you're with us, 888-825-5225. Investing can be overwhelming and certainly confusing. And it's not something that a TikTok or a Instagram reel is gonna give you some depth on. So if you're feeling that, we want you to know about

Starting point is 00:10:40 our Investing Essentials virtual event. It's happening tomorrow. Dave Ramsey and George Campbell together will be doing the event here from our headquarters. Night one tomorrow, March 4th. It's a two-night event. So tomorrow and Wednesday, you're going to get two hours of teaching about maximizing your 401k and picking mutual funds. Also, you're going to get Dave's personal playbook on real estate investing. And he'll tell you how he's made hundreds of millions of dollars in property investments.

Starting point is 00:11:08 Tickets are $199. Get yours right now, ramsysolutions.com slash events. ramsysolutions.com slash events. Or click on the link in the show notes if you're tuning in on podcasts or YouTube. So this is a great event, two night event, starting tomorrow. And you're gonna learn a lot. And I'm gonna tell you something, if you're out there and you're tuning in on podcasts or YouTube. So this is a great event, two night event, starting tomorrow. And you're going to learn a lot.

Starting point is 00:11:27 And I'm going to tell you something, if you're out there and you're going, I need more money in my life, then this event is for you. Trying to get that money. And that's what I'm talking about. More money. I want a bag of money. So that's the event. You don't want to miss that.

Starting point is 00:11:44 Money is money for anybody who is not in the know. I know this. I'm like a Munion, you know? So that's the event, you don't want to miss that. Munion is money for anybody who is not in the know. I know this, I'm hip, I know these things. I just use words like that, I forget that people aren't as up with it. Yeah, yeah, we got to keep up with you, Ken. I know, I'm trying to stand on business, as you told me. Are you?

Starting point is 00:12:00 Am I? Are you trying to stand on business? I'm not sure if I know how to use that one. I'm still working that one. You hold that thought. You. What? Where is she going? Oh no.

Starting point is 00:12:09 James, I'm not sure what's happening right. Shut up. Are you for real right now? You just pull out a hat that says standing on business? I got that just for you, Ken. You stashed these? Yeah. I knew the time would come when you would be ready.

Starting point is 00:12:23 To say, listen, this was not planned. I knew the time would come. you would be ready to say listen. This was not planned I knew the time would come and and now you would kind of live I'm telling I'm rocking that lid and now whenever you're ready to go on one of your rants I want you to put that hat on. All right. Well, I'm gonna keep it on the entire segment It's not I'm not a fan of black and red but uh, listen, I'm gonna go with it. I like it. All right, very good Well, see how I do with this James. This is, very good. Let's see how I do with this, James. This is all very exciting. I love so much of this.

Starting point is 00:12:48 Oh boy. Let's go to Caleb in Salem, Oregon. Caleb, how can we help? Hi there, thanks for taking my call. You bet, what's going on? My wife and I are 26. We have two kids, two and under. My instinct is to have no life and pay off our house as fast as possible. And she wants to live reasonably. And so I was wondering

Starting point is 00:13:21 how you balance the gazelle intensity as you step into four, five, six. All right, I'll tell you what, I think the best thing to do here, Jade, is to go right to Caleb's wife and what she thinks is reasonable. In other words, she wants to live some life. You don't wanna have a life. So what is her definition of have a life?

Starting point is 00:13:43 What does that include from a budget standpoint and where does that challenge you? Let's get real about this. Sure. I guess she's working full-time now as a paramedic, making about 90. And I'm salary and supply chain at about 60. Great. 150, joint income. That's good. We're pretty comfortable, but I've considered moving to a different job that might pay more, but it would not allow me to be as home as much. How much more? Less, yeah. Probably 80, maybe 85. And then how much less would you be home so right

Starting point is 00:14:30 now I work hybrid I'm home working from home to two to three days a week but my work lets me pick my hours and I can be flexible around my wife's schedule. It would cause us to have to do childcare, which we don't and just make things more complicated. So, and the only debt you have is the home? Correct. Oh bro. This is easy for me. I mean, you got to find a way to make some more money somewhere else.

Starting point is 00:15:03 Cause if it throws the family dynamic off as much as it sounds like and they incur more expenses for childcare. You could easily end up spending that 20,000 a year taking care of these kids. Yeah, so I would be patient and this is happy wife, happy life. But this is also, to Jade's point,

Starting point is 00:15:22 she got to it faster than I did, but this is a net-net. It's not like a whole bunch of win for you, a financial windfall. So I would just be patient, man. You got a good joint income. How soon will you pay the house off if you just stay at the current rate?

Starting point is 00:15:39 We're projecting around six years. Bro. I wasn't sure if that was too long. Bro, that's phenomenal. That's amazing. Yeah. How long were you in baby step too? I'm just curious, how long did it take you to pay off whatever consumer debt you had? We've never had debt. We've been married. We both cash flowed our two-year degrees from the fire department and me through a charter school in high school. So we've been debt free and my work paid for us to go to FPU. So we've just been. What do you owe on your house? About 280. You know it does bring up an interesting conversation. So obviously the way we teach the baby steps is baby steps one, two, three. those are you move intensely, right?

Starting point is 00:16:25 That's gazelle intense, you're going fast, you're sacrificing, you're doing whatever it takes to get this debt paid off. But then when you move into baby steps, four, five, and six, particularly when it's time to pay the house off, that's the time where we say, hey, you don't have to be intense anymore. It's really about being intentional

Starting point is 00:16:41 and you're moving methodically with intent toward paying off the house, right? It's not you sacrificing everything, right? But in cases where I kind of am willing to play the game a little bit is in cases like yours where it's like, listen, we never had debt. We never went through a season where we were really sacrificing to win, we never needed to.

Starting point is 00:17:01 And I say kudos to you for that. But in those situations, that's the time where I'm like, listen, if you wanna get a little bit more intense to do it, I'm not mad at it. I don't think the means that you stated earlier was the way to do that, but it would have been one thing to me if your wife was like, listen, man, we just spent three years in the trenches,

Starting point is 00:17:19 I wanna take a break. But in this case, you really didn't. And if you wanted to get more intense, along with your intentionality, I don't think that's necessarily a bad thing when you haven't gone through that baby step two situation. I agree, but not at this particular not in this way, because now you're increasing your expenses to take this opportunity. And when you just by the way, challenge us on the numbers off this call, right? So take the $20,000 gross that you're gonna make

Starting point is 00:17:46 so we know you're gonna take taxes on that, so run your taxes on that, you have a pretty good idea what that is, okay? And then you look at the increase in childcare and you start playing that out. And so that's how you just walk through these decisions. If you had said to us, Caleb, I'm gonna make an additional 20K,

Starting point is 00:18:02 keep the same schedule, get to work at home. Then I think it's a very different conversation. But man, you're in good shape and listen to your wife on this one. If you don't listen to us, listen to her. Perfect, hold you. Yeah, you the man, I appreciate that. Fascinating, I love to hear a young man who's going,

Starting point is 00:18:23 I really wanna pay this off and he's going, I really want to pay this off. And he's like, hold me back, Jade. Right, right. Hold me back. Like am I doing, and boy, as opposed to the opposite effect, you know, where people are just like, oh, they're not even thinking about it at all. They aren't willing to sacrifice.

Starting point is 00:18:37 Really interesting way of coming at this. It is, it is. And I think it's worth that conversation because, yeah, when Sam and I, after we spent seven and a half years paying off our debt, I was, we're weary, right, at that point. The last thing you wanna do- If he'd have come at you with more intensity, you'd have been like, hey man.

Starting point is 00:18:53 Listen, I tried to do it. You tried. I tried a couple of times to go really hard on something, and Sam's like, I need you to calm down. Oh, good for him. He's out there, he's like, yeah. I see him, I see him too. He's like, I need you to calm down, Jade, and it's true.

Starting point is 00:19:07 Even if you've done an intense two-year battle, right? And I think that's the way that, that's why the baby steps are the way they are because we need a break. We need a breather to live and enjoy life, so. Yeah, I can't believe you just pulled the standing on business hat out of the, for those of you that are watching on YouTube,

Starting point is 00:19:24 you have to check it out. You made these hats? Yeah, yeah. All for that moment? Yeah. How funny is that? This originated with Sam Warshaw. He was like, we need to get Sam a standing on business hat.

Starting point is 00:19:35 We need to get Ken a standing on business hat. Well, there's two of them, so I think he and I will sign them to each other. And they'll just be bros. That's right. But you gotta pull that out when it's time. Yeah. Sam, you and I, a stick with these hats. We'll smoke a stick soon on that. All right, quick break. We'll be bros. That's right. But you gotta pull that out when it's time. Yeah. Sam, you and I, a stick with these hats.

Starting point is 00:19:46 We'll smoke a stick soon on that. All right, quick break. We'll be right back. This is The Ramsay Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie.

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Starting point is 00:20:37 And if you're thinking about starting therapy, try BetterHelp. BetterHelp is 100% online therapy so it can fit with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. If it's not the right fit, you can switch therapists at any time for no extra cost. This month, start to build your support system with BetterHelp. Visit betterhelp.com slash deloney to get 10% off your first month. That's betterhelp, H-E-L-P dot com slash Deloney. The Ramsey Show continues. I'm Ken Coma, Jade Warshaw is alongside

Starting point is 00:21:13 888-825-5225 is the phone number. Laura is joining us now in Los Angeles. Laura, how can we help? Hi, my husband and I are in a lot of debt from the small business we started and I need you to guide me how to get out of it, I guess. All right. Give us some numbers. Okay.

Starting point is 00:21:36 So we're talking, if we're combining personal and business, it's about like 150. Okay. How much is from the business though I'm just curious. Well I would say all of it because we put in from personal into the business but just like the credit cards would be like 90,000. Okay and what's the rest of the the debt? They're all credit cards. All of it's all 150s on credit cards? Yes.

Starting point is 00:22:10 Oh my word. We even opened up personal loans to pay for the credit cards. We can have more space for the credit cards. It's a mess. So how many credit cards total? I would say there's about seven. Seven, and then you said you have personal loans open too. Is that included in the 150 or is that, what is that?

Starting point is 00:22:33 Yes, that's included in the 150. Okay, so your thought is like, hey, we use these personal loans to pay down the credit card to clear up more space so we can borrow more on the credit card. Exactly. What's your income situation? Are you guys still working in the business? No, no, we it took us a while, but we brightened up to close

Starting point is 00:22:55 that business. Well, it's still open, but it's not running. Okay, gotcha. So what's your income? My husband makes about I would say 120 and I120,000 and I make $80,000. Where does that money come from? We each have jobs. Got it. Okay. So we've got $200,000 combined income.

Starting point is 00:23:14 Correct. Okay. Do you have any other debt outside the $150,000? I know she asked you that, but I'm just totally clarifying. This is all of your debt. No cars. I know she asked you that, but I'm just totally clarifying. This is all of your debt. Well, yeah, we have a mortgage, a car, if that's what you're asking. Yeah, we want to know.

Starting point is 00:23:33 Total debt. Tell us about your cars, your student loans. Anything that you owe money towards, that you make a monthly payment towards, we want to know about it. So go ahead and tell me your mortgage. I'm just curious, what do you owe on it? towards we want to know about it. So go ahead and tell me your mortgage. I'm just curious what do you owe on it? I would say we owe it like 400,000 so so monthly I paid 3300 for mortgage. Okay.

Starting point is 00:23:56 The car I paid 700 a month. I think there's like 19,000 left on it. Okay. We have a leased car that's $400 a month. My son's school is 850 a month. Mm-hmm. My school- Is that private school or is that daycare? Private school. Okay, how old is he? Four.

Starting point is 00:24:21 Okay. Okay, keep going. My school one is 400. So our personal loan, his is 1600 a month, mine is 850 a month. Okay and how much, but that personal loan is included in the 150 you told me earlier? Yes. Okay. Tell me when you guys get your paychecks, like after everything's taken out, what do you take home every month?

Starting point is 00:24:51 What's your check look like? Both of you combined. Mine is about 2000 and his is about, oh no, that's on every other week. So 4000 is about 9000 for him. Okay, that's on every other week. So, $4,000 for me and about $9,000 for him. Okay, that's the good news. So, 13 net. And just a real quick question, I don't want to get bogged down on this, but why is the

Starting point is 00:25:13 four-year-old in a private school? Because of, I don't want him to learn anything that... Right, but is it pre-K? Yes. Okay. So it doesn't have to be in pre-K. I'm just wondering, I'm right out of the gate. There's some money there, yeah. There's some money to be saved

Starting point is 00:25:34 on some home care maybe versus, but I don't, there's bigger issues going on. But y'all gotta like cut back big time. Big, big time. There's the bumper stickers that Jade's about ready to walk you through. Well, I think that's, I mean, jumping off with, with Ken's point could be a good place to start. You know, the only way to get out of debt is

Starting point is 00:25:53 there's two methods you could invoke here. You could work more, right? To have more margin. You could also cut back on your budget to find more margin, or you can do a combination of both. And to Ken's point, that school might be a great place to start because I don't know what you were gonna say

Starting point is 00:26:11 as far as like, I don't want them to learn certain things. It might be some of the same feelings that I have and my kid is in private school, but for right now it's okay. Or in there in daycare and for right now it's okay. So it might be worth it for you to invoke that when they get a little bit older. Could be that it's your kid, your problem. Yeah, I was gonna say, yeah, and I might step on toes here,

Starting point is 00:26:33 but since we're here, I'm gonna go ahead and say it, because I know a lot of Americans are thinking this, so I'm gonna go ahead and say it. Get in there, you might have to put your hat on. I don't remember anything from my 12th grade year. Your four-year-old, no matter what they're trying to teach the kid. I mean't remember anything from my 12th grade year. Your four year old, no matter what they're trying to teach the kid. I mean, I get it.

Starting point is 00:26:48 I'm not in LA. I get it. But I don't know. I would be looking to save $800 a month tonight. Yeah. I mean, at the end of the day, what matters most is what you teach them at home. Yeah.

Starting point is 00:26:59 But again, I know we're really getting into your personal life. I know. And I gotta be careful. I'm not judging you. I'm just saying, you know, the four year old, we life. I know, and I gotta be careful. I'm not judging you. I'm just saying, you know, the four-year-old, we could cut that, that's 800 bucks a month. That's $9,600 a year.

Starting point is 00:27:11 It's a lot. For where you're at right now, it is a lot. We just wanna highlight that it is a lot. Next thing is I'm looking at possibly both of these cars. I wanna know about how you can get out of this lease. When is this lease over? Very soon. I would say like four months. Okay and then your option you just turn the car in and you're out? Yeah. Okay so I would do that don't try to buy back the car nothing like that just get out of the lease and

Starting point is 00:27:41 in the meantime do you have any money saved? No, everything is gone. Okay, then what I'd be doing knowing that this lease is about to come up, I'd be like, we got to stack up $3,000. Because when this lease goes away, we need to be able to buy a car in cash. And that's what that that's kind of the car plan. So write that down in your notebook as when we turn in this lease in three months, in three months, we'll also be buying a three to $4,000 car. I know you have the margin in your notebook as when we turn in this lease in three months, in three months, we'll also be buying a three to $4,000 car.

Starting point is 00:28:06 I know you have the margin in your budget to do that. Okay. So that deals with one car. Let's talk about the $19,000 car. Do you know what that car is worth? The payment was kind of high. Didn't you say it was like $700? Yes.

Starting point is 00:28:19 It's I think we bought it at 50,000. Okay. Do you know what it's worth now? I don't. Okay, that's your second piece of cart homework. I want you to go on kellybluepook.com, look at private sale, because it sounds like if you bought it at 50 and judging by the height

Starting point is 00:28:40 of your payment, I feel like you've been paying this off kind of fast, am I wrong? No, you're right. Okay. So you might actually, you might not be upside down. And if you're not, I would still get out of this and get into something cheaper because a $700 payment, you need that money. And so now we've just found $1,100 in your, in your budget with these cars and you need every dime of that to go towards paying off this credit card debt.

Starting point is 00:29:07 The good news is, I mean, you guys have a good income. It's not wonderful for LA, but it's wonderful for the rest of the country. Yeah, and it's doable. And again, not telling you what to do with your kid in school, but if we take the 800 on top of that, now we're right at the doorstep of two grand

Starting point is 00:29:23 that we found in your monthly budget. That goes a long way to paying off $150,000 in debt. Okay, because now you're looking at, if we just take 2,000 a month that you found and you put it towards debt, that's 24,000 a year. That's a long haul, right? And this is a drastic change in your lifestyle. You're not going on vacation, you know,

Starting point is 00:29:44 you aren't going out to eat, you guys are gonna have to really hustle. But again, my co-host today, this is a woman who, her and her husband paid off half a million dollars. She needs a little pep talk as we go into the break here because mindset wise, what does she gotta be thinking right now?

Starting point is 00:30:04 You've gotta be thinking, the? You've got to be thinking. The hard part is you're making a good income and to not be living in that income feels like, oh man, I've been working hard. But the time will come when you do get to do that. So just hold on. If you clean up this mess, you're going to enjoy your income like you never have before. Right now, you've kind of faux enjoyed it with all these things on payments. And it's not all it's cracked up to be.

Starting point is 00:30:26 But if you walk through this journey, you're going to get to enjoy the fruit of 220 plus thousand dollars a year with no debt and payments. You can send your kid to the school that you want to and you don't have the stress associated with it because you'll actually be able to afford it. You can do it. You can. Appreciate the call. All right, quick break. Jade Warshaw, Ken Coleman. This is The Ramsey Show. We'll be right back. You know, one of the first things I discovered working in the financial

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Starting point is 00:31:31 the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years. So you know they'll be there when you need them. Xander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them

Starting point is 00:31:55 and you can too. Visit Xander.com for instant online quotes or for a more personal touch give them a call at 800-356-4282. Alongside Jade Warshaw, I'm Ken Coleman. You're listening to The Ramsey Show. So excited that you are with us today as we help you win with your money, win in your profession and win with your relationships. 888-825-5225 is the phone number. We'd love to hear from you.

Starting point is 00:32:24 We go to Paul who's right here in our backyard, National Tennessee. Paul, how can we help today? Hi, how are you guys? Doing well, sir. What's going on? So, I am 22 years old, about to turn 23, and so is my wife. We recently just got married about six months ago and I knew before we got married that she wants to be a stay-at-home mom but I have no idea how to have a career or a job or whatever to support that kind of thing. I'm a college dropout and so I'm trying to figure out like how does one have a career? Good well I'm a college dropout and so I'm trying to figure out like how does one have a

Starting point is 00:33:05 career? Good, well I'm a college dropout as well and so I want you to stop saying it that way the rest of your life. I want you to stop saying it the way that you said it. I'm not criticizing you, I'm actually going hey man, everybody's got their story, everybody's got their reasons for it, that does not limit you. And so I want to make sure we get our shoulders back on that, okay? So I'm a college dropout, all right? And so I'm not gonna let you talk about me

Starting point is 00:33:33 the way you talk about you that way, all right? You got this, Paul. All right, so let's talk about real numbers, all right? So she wants to be a stay at home mom, love that. It's the greatest job in the world. Mad respect for it. My wife Stacy was a professional made really good money and then she's been home for a while. I got mad props for

Starting point is 00:33:51 that. How much money? I think you've got a number in your mind or let's come up with a number. If you earned X amount of dollars that would replace her income at the minimum. So what's the number? We don't have any kids right now, but to just stick her at the house, I would have to be making 85, but to have the amount of kids that we want, I'd probably have to be making 150 to 200. How many kids do you want? Maybe. She wants five. Oh lordy. Hello. Well, so are we trying right now or is this just something we're talking about? Cause we've been married six months.

Starting point is 00:34:28 Okay, thank the Lord. Cause I sit there going, yeah, y'all need to slow your role and learn how to be married for heaven's sake. Cause you've been married six months. Yeah, we're waiting like five years to have kids. Oh, well, let me also say, you know what, Paul, let me just tell you,

Starting point is 00:34:44 all those plans are great. You have no idea what's in store for you. No idea. You have zero idea. So let's do what we, let's focus on what we know. She's in a job right now, correct? Yes, sir. And she's not coming home anytime soon

Starting point is 00:34:58 because there's no reason to come home, correct? Yeah. What's she earn? Take home is 33,000. Okay. Okay great and what do you take home right now? Oh 33,000. I take home, yeah, $33,000 a year. Okay so you guys are fine, you're 66, take home, that's not bad at all. You guys can stack cash. Do you have any debt? No debt. I made sure to pay all my college debts off. All right, so I'm gonna bring Jade back in

Starting point is 00:35:27 in just a minute to pick you up right where I just left you. But I wanna talk about what you wanna do. I think this is what I've been doing for years is coaching people to find work they're wired to do. I'm gonna give you at the end of this phone call my bestselling book, Find the Work You're Wired to Do. It has the Get Clear Career Assessment in it, okay? And I want you to take it and then I want you to read the book because the book is me coaching you along with your

Starting point is 00:35:49 assessment results. But let's just see if we can get a couple ideas because I just believe, Paul, that you know what it is or you have a couple ideas of something that you would like to do and if I could wave my pencil and go poof and you were doing it and making the money you'd like to make, what is it that you would like to do? Any ideas? I would want to probably own a real estate and or logistics company. Great and why logistics? What about logistics intrigues you? I've just been kind of good at it and it's fun. Maybe that's weird to

Starting point is 00:36:27 say but it's fun. No, it's perfect. My assessment measures three things, Paul. What you are good at doing, you just said you've always been good at it, and what you love to do. That's amazing. I love to do what I'm doing right now. It's fun. It's really fun. So that's not weird. So logistics has got a lot of application to it that's very versatile in the world of work because if you're good at logistics there's some operational roles, a lot of ways you can go with that. And in real estate if you're smart you transition to that over time that's great. So what's keeping you from moving into logistics over the next year, two, three?

Starting point is 00:37:05 What do you think is missing? Do you have to have a degree to work in logistics? I mean, I work for a logistics company right now. We supply apartments, but I don't really know what to do to get into the logistics space. Okay, let me ask you a question. Who, since you're in logistics right now, who at your current company would be able

Starting point is 00:37:29 to answer that question about what would it look like to climb the ladder into logistics? I could probably find some people on our company portal that I could probably email. Yeah, think. A couple of logistics executives. Oh, Paul, Paul, I'm gonna give you the magical key that most young people never discover. You ready? You find out who are the logistics veterans in the company

Starting point is 00:37:52 portal. You send them an email or a chat or a voicemail and it sounds kind of like this. Hey, so and so, my name's Paul. I'm a young guy who would love to get into logistics. I've always been good at it. I really love it, but I need someone with experience to just give me their wisdom on the multiple ways that I can grow and climb the ladder in logistics. Would you be willing to spend time with me if I bought your coffee or lunch and you just rinse and repeat until you get somebody to do that and then you actually pay attention to what they tell you. And then go find some other things.

Starting point is 00:38:27 Go to message boards and logistics. Read or listen to podcasts. Find everything it is about logistics that are out there and believe me, it's out there and you figure out how to get there. Now once you know that that's a good move for you and my assessment, the Get Clear Your Career Assessment will help you with that and it's going to validate all the stuff we're talking about. Start moving forward with that. By the way, Christian, let's also give him a copy of my book, Number One Best Seller,

Starting point is 00:38:51 The Proximity Principle. I'm just piling it on the young man because I want to hand you over to Jade. We've got a couple minutes and I want her to walk you through how you will get ahead financially now that we're going to have a path and we're going to make more money, how we plan for little ones and mama to come home down the road. Yeah, I want you to have a clear picture in your mind by the time you leave this call.

Starting point is 00:39:13 Ken gave you the career piece. So let's talk about what it could look like. So you've got kind of a five-year play here, right? There's five years where both of you guys are in the workforce. During that time, you're getting your income up. It's 66 now. By the time she takes the baton or you take the baton from her,

Starting point is 00:39:28 hopefully you're carrying that on your own and more. So the key here is the house. Like that is the key, that's the foundation of all of this. If you can set yourself up, you don't have any debt right now, right? If you can get into a house and you're already projecting saying, okay, this house, it can't be more than 25% of our take home pay,

Starting point is 00:39:49 my take home pay, because you're going to be the only one working. So at this point, let's say you're making $66,000, right? You're carrying that on your own. Okay, payment can't be any more than $1,200, right? That's the max. So now is the time to start saving towards that and making that happen, right? That you've got five years to make that happen And then it once you're in baby step four you're saving you're putting aside 15% of your income

Starting point is 00:40:15 That's 825 bucks a month from now until the cows come home. I mean if you just did that on One salary with your kids, like you could retire with $5 million. So there, this is, this is the picture that I want to paint. You're creating stability by your home. And by the way, when you get that home, it's gotta be based on your income, not both of you together and just what yours is. That's going to be the key to this. And then from then on, it's you guys making, Ken, how can I say this delicately? A lot of times folks call in and the childbirth

Starting point is 00:40:52 has kind of taken over all other thought process. And it's like, you just have to understand that kids are expensive and they're not getting any cheaper. So you guys might get to three babies and go, oh, okay. Well, it's really hard to make current decisions on hypothetical future decisions. And what I mean is what you're saying. Sure. I understand we want five kids is what she's saying, but we don't know how that's going to happen. Yeah. You may look at this situation and go, okay,

Starting point is 00:41:19 I haven't gotten quite to 66,000. I'm at 50,000. Yeah. What, how does that play into this? And that's okay. A lot of life happens between now and five years from now and everything we lay out, it's awesome, but life has a real weird way of never turning out exactly the way we plan it to. So that's why you wanna make these great money decisions now and then deal with what happens

Starting point is 00:41:38 when life throws it at you. Great hour, Jade Warshaw, always fun. This is your show. It's the Ramsey Show. If you need health insurance for yourself or your family, you might be lost in a maze of confusing terms, overwhelming options, and questions about networks. Not to mention high costs and bad service from insurance companies that don't care about what you want. Common concerns like those are why I'm proud to recommend Health Trust Financial. They've been working with Ramsey for over 20 years and they're the only Ramsey trusted health insurance broker. Health Trust Financial takes an unbiased approach to finding you the best health insurance for your situation.

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Starting point is 00:43:09 and the relationships alongside jade warsaw and ken colman triple eight eight two five five two two five is the phone number to jump in show coach you up on saving money budgeting money investing money on this coach up on how to make more of it as the young people call it, munion. This is a new term I learned today. For some high schoolers.

Starting point is 00:43:31 I can't wait to drop that on my kids. And see how fast and hard they roll their eyes. As my daughter likes to say all the time, you're so cringe, dad. Oh man, make a meme out of it. Yeah, that's what I'm supposed to do. It's part of the role of a dad. But we're here for you, America.

Starting point is 00:43:47 You ready to go? I'm ready. All right, she's ready, folks. Sarah is up in Miami floor. Oh, near your old stomping grounds. You like that? Sarah, how can we help? Hi, guys.

Starting point is 00:43:58 Thank you so much for having on. So my parents opened up a credit card for me when I was younger in my name So right now the card has about 18,000 in debt And I want to know what's the best way to go about paying it off. They've already agreed to Help me pay off since it's the three of us our charges on it But I want to know what's the best way to go about it.

Starting point is 00:44:25 So the 18,000 isn't just your spending, it's your parents' spending as well? Yeah, the three of us. Oh, oh wow, okay. Do you know who spent what? Is there any, do you know who's on the hook for how much? Is there a spreadsheet? In November, we had a trip where they put about $5,000 in charges

Starting point is 00:44:51 and then it's been open since I think I was 16 so I can't you know exactly point out who has what oh gosh. But I pay off yeah I pay off every month like what I put on obviously I've stopped now just because we're trying to pay it off so there's no more charges going on to it but I want to know what's the best they've agreed to pay it off so they've put money on it but it's just 18 it just seems so huge to me. Who's the who's the primary on it? Are you the primary and they're the co-signer or who's in charge of it? My mom is the primary. Okay. My first order of business would be for me to be taken off of it just from a credit perspective, just from a responsibility perspective. This is you doing damage control saying, hey, the truth is, and I'm not saying you say this to her,

Starting point is 00:45:46 but I'm saying this to you. The truth is, they pulled this debt out in your name before you were of age to even be able to make the decision to say yes or no. That's the truth. 16 is not the time for you to be deciding if you should have credit card debt with your parents. The answer would be no, but you didn't know that, okay?

Starting point is 00:46:03 So first order of business is mom and dad, I need you to take my name off of this and I want my name off of this. So that's numero uno. You do that tonight. Um, because the truth is, how old are you? We're down 26. Yeah, you're 26. And the truth is one day you're going to want to do something that requires your credit score to be zero. And as long as this is, um, around your credit score can't go to zero, right? Which is what we were trying to get zero. And as long as this is around, your credit score can't go to zero, right? Which is what we're trying to get to. So that needs to happen. And then after that,

Starting point is 00:46:30 you can say, okay, let's look at the charges are, let's look at what the charges are now. And let's go through and let's kind of itemize this thing. And I'm fine with you going, this was me, I will pay that. And this was not me, I will not pay that. Right? Now, if we're trying to play a chess game here, it's really important that you get your name off of this thing first. Yeah, I was going to ask, I love the advice. Do you think that's going to go down okay, Sarah?

Starting point is 00:46:57 I'm curious. Yeah, they're pretty reasonable. Okay. Okay. If you start talking about what you're not going to pay, they may not want to take your name off it. I know. I think Jade's exactly right.

Starting point is 00:47:09 Is there any way, and you have to forgive me. I really don't know this. I still know. Yeah, what? Can they, how far back can they track? Can they track the expenses over the lifetime of this card? Or is that like going to some like credit card database? I think that would be hard to do.

Starting point is 00:47:26 I'd probably go back $18,000 worth of charges because the thing is they've been using it, paying it off, using it, paying it off. So as it stands now. Okay, so of the eight, that's what I'm asking. So of the 18 that's on there now, it's like a fresh start. Can they track that?

Starting point is 00:47:44 They being Sarah and her parents? The credit card. Oh yeah, they're pretty good. It's like a fresh start. Can they track that? They being Sarah and her parents? The credit card. Oh yeah, they're quite good. Does the credit card have a, obviously it's a website, but does it have the capability that she and her parents could go in and they could get an itemized list of the current 18K, this is what it's made up of, so that they can divvy it up. I mean yeah, you could do that.

Starting point is 00:48:02 I know that's a dumb question, but I don't know how it works. My guess is probably three months of expenses is probably 18,000. Cause I spent 5,000 just in November. So you could probably just pull up the past, you know, three or four months statements. And the reason I'm so hung up on that, Sarah, Jade's advice is absolutely stellar.

Starting point is 00:48:20 And to the extent that you can find out what is yours and you and mom and dad are all mature, and we go, okay, this is our chunk, and this is your chunk. And let's say you come back, and I'm making this up, but let's say your chunk is half of it, at 9K. Now, because you're off the card, and what you're gonna do is you're gonna pay 9K

Starting point is 00:48:38 to mom and dad to put on the card. Hopefully they'll do that. Hopefully they will. But that ain't your problem. And you will come to an agreement, mom and dad, I owe you $9,000 and I'm going to make that right. So whatever the number is, that's what we want you to do. And that's going to make this clean from a boundary standpoint for you, which is really important. Really, really important. And the hard part is, you know, I would tell you, hey, like

Starting point is 00:49:01 if, if for some reason you ask them to take you off and they give you a problem, you could contest it like with the with the credit bureaus and say, hey, I got this when I was a minor. The hard part now is you have been spending on it and it's kind of been you've OKed it from a certain perspective. So I really would. It's all going to melt down to how you have this conversation to get them to take you off. That's right. But yeah that's a good idea. I'll definitely do that. I just have one more question. I am worrying about my credit. So when they take me off the card will my credit be impacted? I don't want it to go down. That's the part where I'm not exactly sure because you're not disputing it. You're not saying hey this never this never happened. It'd be one thing. That's why I said, if you went to credit bureaus and said, hey, they did this when I was 16, I didn't give them consent. Yeah. Then it'd almost be fraudulent and they take you off. And for you, it'd be like it never happened.

Starting point is 00:49:56 But I want you to coach her up on something. She just said she didn't catch what you said earlier. She said, I don't want my credit score to go down. You want it to go to zero. Give her the quick talk on why I don't think she caught that. Am I right, Sarah? That's very good. You need to hear this. That's important. So the key is for your credit score to go to zero,

Starting point is 00:50:13 not necessarily to go up. So the truth is, if you've had any sort of debt that you were using and you paid off and you close it out, or in this case, you get it off of your credit report, it could impact your credit report, but over time, when you stop borrowing money and there's get it off of your credit report. It could impact your credit report, but over time when you stop borrowing money and there's no open accounts on your credit, your credit score is gonna go to zero.

Starting point is 00:50:31 And so if that credit is the only debt you have, once your name is removed off of that over time in a very short period of time, six months to a year, your credit score is gonna roll to zero. And a zero credit score is just as good as a high credit score. Okay, that's the one thing they don't teach you in school. They don't teach you on the internet.

Starting point is 00:50:50 They don't teach that because nobody benefits from that but you. No company is making a bunch of money on that but you. Okay, that's why they don't teach it but it's absolutely true. So that's what we're working towards. Get this in the motion. Get it happening. Get your name off of it and don't borrow any more money and you'll be good. Yep this in the motion. Get it happening. Get your name off of it and don't borrow any more money and you'll be good.

Starting point is 00:51:07 That's right. Yep. You got this. I think a lot of people don't realize you can buy a house with a zero credit score. Yes. You can live life without a credit card. Yes. It's all very doable. If you want to know more about that, just go to ramsaysolutions.com and search. We've got articles on that. People think we make it up, Ken.

Starting point is 00:51:23 No, it's a real thing. It is doable. So, Sarah, you got this, kiddo. Thanks for the call. We're rooting for you. All right, quick break. We'll be right back. This is The Ramsey Show.

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Starting point is 00:52:59 than file your taxes. But thankfully, you don't have to dread filing when you've got Ramsey Smart Tax. It comes packed with everything you need to file online before the big deadline. That means all major federal forms and deductions are covered with no hidden fees. Plus, with Ramsey Smart Tax, you can save up to 70% compared to other tax software out there. It's a no-brainer. Just go to ramsysolutions.com slash smart tax and see how simple tax filing can be. That's ramsysolutions.com slash smart tax. SmartTax and see how simple tax filing can be. That's ramsysolutions.com slash SmartTax. Welcome back to The Ramsey Show alongside Jade Warshaw. I'm Ken Coleman.

Starting point is 00:53:31 888-825-5225 is the phone number to jump in. We'd love to have you. Palm Springs, California is where Jenny joins us. Jenny, how can we help you today? Hi, hello. I'm a 90s kid by the way nice. Come on Jenny Love it. My parents are getting older. So now they're in their late 70s They've done well for themselves, but now I'm helping them because I noticed they were paying quite a bit of money into a flexible premium adjustable universal life in Germany 1986 That thing's got mold on it. Well my dad worked in law enforcement

Starting point is 00:54:10 and his initial hourly rate was only $4.80. Wow. So it made sense to them back then to have this $100,000 policy for him because you don't know what's gonna happen. But after doing some research, I've gone back and forth, the policy's been sold from company to company

Starting point is 00:54:25 They don't even have the records for this policy gets 39 years old. Mm-hmm and their cash value has basically depleted My mom's very what is it? Do you know what it is the cash value? Oh, yes, so the first or the cash value now is I think down to a thousand dollars Oh my gosh, and they've been paying into it since the 80s basically Yes, so Lord Basically, they've totally paid 48 thousand dollars Wow their money into this policy, okay, and So they have three different well one policy is 25,000 two writers one for 50 and one for 75

Starting point is 00:55:04 So basically 150 for both my parents. Okay. Right now what happened was they said, Oh, you stopped paying your payments. But my mom said, no way. I've paid my, she's paid over the amount over all these years. And basically what happens and I've been researching, so it's imploding on itself. So now the cash value is gone. And my question is right now we're at we're at a level playing field. Do they stop paying this? I'm trying to get the answers from somebody they won't give them to me. Well, let's find out policy. What's the rest? Tell me more

Starting point is 00:55:36 about their financial setting because the hope is that you can get to the point where you're self insured. That's that's the hope is to get to that point. So tell me more about their finances aside from this universal life. Do they have a nest egg? And if so, how much is that? They've owned four homes. They currently own three homes, but my parents being the great people they are, are leaving those homes to their children. Okay. What are they worth? So they won't sell those. I would say they are probably worth a million and a half. Okay, so 1.5 million do they have debt on them or are they cash?

Starting point is 00:56:10 Paid for cash? No, they only owe a little bit left on one home. I think 25,000 left on one home. Okay, so essentially paid for. So three homes worth 1.5 million. Do you know what their nest egg is that's in the stock market? Savings, they don't have stock market. My mom didn't come from that era. She didn't want that. So I think in savings they have liquid about 250,000. Okay, 250,000 cash. Okay, so they're millionaires, they're doing fine.

Starting point is 00:56:40 I mean, is the assumption that these homes are gonna continue to go up in value they've been taking care of? Oh, yes. Okay. So, there's worse things that could be going on here. The chances of them, you know, going out and getting a term life insurance policy for anything reasonable at this point, you said they're in their late 70s, it is not happening, right? So the best you can think through is, okay, if one of them were to have

Starting point is 00:57:02 So the best you can think through is, okay, if one of them were to have an event that was not paid for, if any of one of them were to go into assisted living, is there money to pay for it? And the other spouse, the remaining spouse, still have money to live off of. That's kind of the equation that you're doing in your head, right?

Starting point is 00:57:20 Yes. Okay, so a couple of things that I would do for that to be more of the case of this $250,000 in cash I would Want to invest some of that because I'd want it working for me. That's a big chunk of money that should be making I mean over the last three years if that had been invested the rate of return would have been Unbelievable on that but just even in a normal market, in a normal market, you're looking for

Starting point is 00:57:48 at least a 10% annualized rate of return. That means if we look back on the track record over the course of five or six or 10 years, we're looking at 10% is that annualized percentages of return there. So that 250, if you can talk with them and say, here's the truth, and I didn't ask you this, I guess I should, are you sure that this is their only life insurance that they have? Or is there another policy or something else laying

Starting point is 00:58:14 around? I am pretty sure so. I'm not very smart on life insurance policies, but once you stop paying, they're gone, right? Yeah, if you let it lapse. How old are they? My dad's 78 and my mom is 75. I just don't think they need insurance at this point. I think they're okay.

Starting point is 00:58:34 And now, well, I mean, here's my thing. With all those houses and then what's beyond the house? They've got 250 cash, but I'm always looking at what if one of them becomes very ill and they need assisted living or they need somebody living. That's why I'm with you, I'd invest that. And I would use that as like that. That's that fund, that's the fund for that.

Starting point is 00:58:54 Here's the thing, I don't know, what are they paying a month on this coverage? It's $100,000, what are they paying on it? So she's been paying $185 eighty five dollars and their premium was only fifty Yeah, it's peanuts 54 yeah, it's but that's what I'm now that they're their cash value is gone Where do all these fees come from after they make their own because it's just it's a terrible product now you get it now You know why we need a product they like they got nickel and dime to death on their own cash value. They're not, they're horrible products.

Starting point is 00:59:27 And that's what we try to tell people. You pay into this thing for life. And at the end of the day, you have nothing to show for it. All they have is their a hundred thousand when they pass away, which I, you know, if they keep it around, yeah. If they keep it around and they're like, I'm happy to pay the $185 dollars a quarter or whatever it is You know They're not getting rich off of this thing, which is what we've learned and when they pass away

Starting point is 00:59:50 You're not getting rich off of it either is what it amounts to and so And here's the thing if they had passed away, they wouldn't have gotten to keep the cash value. Anyway, that's That's the most ridiculous thing about this whole thing. So they're in it, it's a horrible product. If they wanna get out, they can get out. If they stay in, it's not the end of the world. They've got the money to pay for it. And in many ways, I guess at this point, it's better than nothing

Starting point is 01:00:15 because it's not overly expensive monthly. But that cash. Would there be a penalty for them to get out of it now? If they say, okay, we don't want it anymore. Yeah ask about that ask and find out at this point I feel like they could probably surrender it with no issue, but just find out about that And push for that mm-hmm push for that 50 trying and I can't get anybody to help me or help him while we're both here, but nobody will help nobody will answer My questions, it's all well. We don't know we have to look it up and nobody has answers for me.

Starting point is 01:00:46 Well, that's because they don't want you to get out of it. They've gotten $48,000. They got answers. They just don't like the answers. I would really just put the pressure on somebody and become their worst nightmare. And you'd be surprised if somebody wants to get rid of you. You can be nice, but you're just like a bulldog.

Starting point is 01:01:01 Yeah, I mean, I'm a 90s kid. I'm good at getting somebody's worst nightmare to come out. Come on, there's a 90s reference. There you go. Come on. Yeah, I mean. I'm a 90s kid, I'm good at getting somebody's work nightmare to come out. Come on, there's a 90s reference. There you go, there you go. Come on, you know? You get into it, I mean. Like new kids on the block, hanging tough.

Starting point is 01:01:12 You know what I mean? That's what I'm dropping, that's our theme song. Yes, okay. You know? Hanging tough, I like it. Yeah, I mean, there's no cash value. I can't imagine what they might charge to surrender this at this point.

Starting point is 01:01:24 But check into it. And if you want to lapse it, let it lapse. They're not going to get into anything else though at this point is what I'm saying. And the good news is that they have the money to self-insure but pushing on that 250 to get that invested, I would do that if I were you. And do you know, will the premium keep going up

Starting point is 01:01:42 and up and up so they get their fees? Say that again? Will the premiums on the the premium keep going up and up and up so they get their fees? Say that again? Will the premiums on the whole life keep going up? They might. Yeah, I'm telling you, you can cancel this thing. Get out of it. Get out of it. And if there is a penalty at this point, it's like, who cares? Get out of the thing.

Starting point is 01:02:00 They paid $48,000 into this and they have $100,000 of coverage. It's the last call for our two night virtual event. Dave Ramsey's Investing Essentials. It's set for May 21 and 22 and you do not want to miss this. I'll unpack my personal playbook on investing and real estate and show you how you can feel confident in your investments too. Tickets are $199. Snag a VIP ticket and you'll get two sessions with a Ramsey Preferred Coach. You can join from anywhere. Go to ramsysolutions.com slash events

Starting point is 01:02:33 and get your ticket today. That's terrible. I'm unfortunately at the time of my life where insurance is such a fraud and I know I'm saying that blanketly, but after looking at all of this for them, I'm thinking, what a fraud you could put that money into something else. And I don't want to make my parents feel bad about it because they said, we were doing what we thought was right at the time.

Starting point is 01:02:54 It happens all the time. That's why we teach term life insurance is the best way to get it. With term life insurance, you're only paying for insurance with all these other universal life and all these other, you're giving them extra for them to invest it for you at a horrible rate of return. It's loaded with fees. And at the end of the day, you're in, you end up with nothing. What these people have ended up with is so typical. And so your best bet term life insurance, check out our friends at Xander insurance. They will hook you up.

Starting point is 01:03:22 Yeah. Yeah. And it's peace of mind and it's for the term. That's right. And that's why it's so beautiful. Once you get past that, you don't need it. You don't need it. Guess what? You're not paying for it.

Starting point is 01:03:30 All right, quick break. More of your calls coming up. This is the Ramsey Show. Welcome back to the Ramsey Show. I'm Ken Colman, Jade Warshaw is joining me. 888-825-5225 is the phone number to jump in. We'd love to hear from you. Javin is joining us now in Hattiesburg, Mississippi.

Starting point is 01:03:51 Javin, how can we help? Hey, how are you? Good, how are you today? Doing pretty good. Okay, so little bit of background for my question. Me and my fiance, we recently got engaged back in September and we are set to get married in November of this year. That being said, I am very excited and there's nothing that I want more than to marry her,

Starting point is 01:04:19 but I am also very nervous because I've never had to financially lead anybody in my life. And so I guess my question is what, what are some of the best steps that I can take in order to ensure that we'll have a, we'll be financially successful and we'll keep the money fights to a minimum. Oh, really thoughtful question. How old are you? 22. Do you have any debt? No sir.

Starting point is 01:04:44 Does she? So she doesn't have any debt right now, but she's going to school to be a PA, and she wants to go to PA school, but obviously her parents didn't save any money for her to go to PA school, so she's going to have to take out loans I'm guessing. And when will she start? Right now that's kind of unknown. She has been applying to different schools. She did have an interview and she got waitlisted. So right now it's just kind of unknown. Okay. Well I want Jay to weigh in obviously on this, but I really thought it was a really

Starting point is 01:05:27 mature way of asking the question. You've never had to lead anybody. And when it comes to husband and wife, the word leading can get tricky for some people. And I think what I'm going to say hopefully helps everybody. I wouldn't look at it as telling her what to do if that's what we think leading is. I think modeling the way. That's great, Ken.

Starting point is 01:05:51 Is what I would define as leading when it comes to a marital relationship. And so modeling the way is you being disciplined with money, you being transparent about money, you being thoughtful about money, you being thoughtful about money, you know, just coming at it from a, it's a we. And so first, to give you a classic example, leading her right now would be sitting down with her and going, hey, here's my view on student loan debt and just debt in general. Here's what it does to me. Here's why it does that to me. And when I say the why, I don't mean like Ramsey bullet point language. I mean like you personalizing going, I grew up this way or whatever, whatever.

Starting point is 01:06:37 So that she goes, she feels very safe because you're not talking at her about this. You're going, here's how I feel about money in general. And I feel, as your future husband, that I have a responsibility to lead us, is how I would say that. And say, can we talk about what it might look like to save up and cash flow, PA school? Or I'm gonna bring you in here

Starting point is 01:07:04 because I wanted to try to take the, I wanted to give you some wisdom from my, as a man in the marriage, Stacy, very strong, we've always been on the same page about money when we didn't start that way. In other words, we may start a conversation, we ain't on the same page. But when we finish the conversation, Jade,

Starting point is 01:07:21 we gotta get on the same page. And so I'm bringing you in here. I'm tagging, this is like a wrestling match and I'm tagging you in the corner over there. You're jumping off the ring. I'm getting out of the ring and I need you to come in because I do want the female perspective as well. Okay, I'm jumping off the ropes into the ring.

Starting point is 01:07:39 Be gentle now, don't elbow drop it right in the head. I think Ken is exactly right. And I think as much as you can, when you have this conversation, Ken is right, tell her the way that you're feeling, but as much as you can, reiterate over and over and over again that you agree she should go to school. Yes, yes, good point.

Starting point is 01:07:56 I agree you should go to school. I agree, I do want you to become a PA. I agree your career is very important. I think whenever you're having a discussion like this, the person who's, I'll say their thing, the thing they wanna do, when their thing that they wanna do is on the line, it can get defensive easily.

Starting point is 01:08:14 Even if they're, you know, a person who doesn't wanna argue, it's just easy to think like, what does this mean? Does this mean I can't go to PA school then? Does this mean I can't do my dream? Right? So reiterating that over and over is gonna be so important. And then saying, having ideas of here's what we can do. Does this mean I can't do my dream, right? So reiterating that over and over is gonna be so important.

Starting point is 01:08:26 And then saying, having ideas of here's what we can do. I was thinking, how can we make you go to school? Cause I really want you to be able to go to school because it's important for you to become a PA. Here's how we could do it, cash and funded in cash, right? And so being able to talk about it like that, I think is gonna be really important. And yeah, that's how you look out.

Starting point is 01:08:46 But you're gonna be fine, young man. You really will. If it's a conversation, you're not dictating. It's not like the old school, I'm trying to think of Mad Men, where a guy barks at his secretary and says, do it. As long as the posture is,

Starting point is 01:09:02 I want what's best for our marriage, and this is about peace and us not being like, you know, millions of couples that fight over money and then that turns into marriage issues. That I think, I'm just trying to take the pressure off, Javin, does that make sense to you? Like, you don't have to be a know it all.

Starting point is 01:09:19 You don't have to be this wise, you know, Sage. No, you just gotta be smart with money and we're gonna walk along with you, you know? And by the way, as a wedding gift, by the way, to be this wise sage. You just gotta be smart with money and we're gonna walk along with you. And by the way, as a wedding gift, by the way, I wanna give you Total Money Makeover, Dave Ramsey's classic book, close to 10 million copies I think sold or whatever it is.

Starting point is 01:09:37 That's just kind of the basics. And if you were to just follow that, because you guys aren't in any kind of trouble, but if you were to just follow that, that be great what else can we give them yeah make sure they have Financial Peace University let's do that that'll be good and along with that you'll have every dollar we're just gonna set you guys up you're getting married this is our newly what is to you so you get total money makeover get Financial Peace University will give you every dollar premium for

Starting point is 01:10:00 several months you can hang out with that for a while and yeah I think if you can start having these conversations, maybe you start by not talking about PA school. Maybe you just start by saying, hey, what do we believe about debt? And you just have those conversations. How do we wanna handle our money?

Starting point is 01:10:16 And then this happens, the conversation about school comes up as a result of you guys talking about the other things. So. Yeah, I agree with that. Really good question though. I love your heart, Javin. I think it's great that a young man is thinking about that. And, you know, it's you got to make the big decisions early in marriage. Yeah. And then you spend the rest of your marriage managing those decisions. And money is one of them. Man, it really is. Do you ever, Ken, do you ever listen to Jefferson Fisher? Oh, sure.

Starting point is 01:10:47 I had him on the front row seat. That's right, you did. It's coming out soon. Oh, that's right, you did. Oh man. All I could think of was him when I was thinking about this conversation because it's all about finding what you agree on

Starting point is 01:10:57 and restating what you agree on so that it doesn't escalate. That's right. And I would also liken it, I'm glad you bring that up. I would also liken it to, this is gonna bring that up, I would also liken it to, this is gonna give some people some heartburn, so hang with me. Okay.

Starting point is 01:11:10 I would liken it to the family member that you're gonna see on a regular basis so you can't be a jerk when that uncomfortable political conversation happens. Oh, yeah. In other words, like if it's Uncle Larry who you see once a year, you might come at Uncle Larry if he says something. You know what I mean? Yeah. But like if it's Uncle Larry who you see once a year, you might come at Uncle Larry if he says something.

Starting point is 01:11:26 You know what I mean? But like if it's your grandmother or somebody where it's like you choose relationship over being right, or the thing that you've, the zinger where you're like, you just feel like I need to zing you and just kind of let you know what I think of people. We can do that on tough topics,

Starting point is 01:11:43 and politics is one, money's another, faith and religion, things like that. When there is some respect to say I'm gonna understand you, that's right. Because here's what I've learned about politics, you're never gonna convince somebody else because of your five points that you're gonna make in a debate. Well what's the key point of that? But seek to understand them. And how can them. You can't understand if you're talking too much. 100%, ask questions. Common ground. Where can we find common ground?

Starting point is 01:12:10 And so this is a lot easier when it's your spouse, when it's, okay, I'm just gonna seek to understand how she thinks and feels about money. Let's start there. Seek to understand, that's so good. Then I know what's going on. Yeah, you're not trying to convince them. You're not trying to bring them over to your side.

Starting point is 01:12:26 What do you think about that? And then she tells you and you go, what formed that? What do you think is? See, all of a sudden, this isn't a game. It's not manipulation. It's a legitimate, respectful question asking that allows you to get on her page. That does not mean that you agree with everything on her page.

Starting point is 01:12:43 But you got there. Now you hope it's reciprocated. And in a healthy relationship, it will be reciprocated. I think that's the lesson. That's very good, Kim. At least that's the best you can do and hope it works out from there. And without all else fails, go get a great therapist for your marriage.

Starting point is 01:12:59 You know what I mean? I know what you mean, Kim. Come on. All right, quick break. We'll be right back. This is the Ramsey Show. All right, quick break. We'll be right back. This is The Ramsey Show. so business owners can grow your business faster with fewer mistakes. Pre-order your copy today and you'll get access to over $350 in bonus items only at ramsysolutions.com slash store. ramsysolutions.com slash store pre-order today.

Starting point is 01:13:40 Welcome back to the Ramsey show. I'm Ken Coleman joined by Jade Warshaw. Thrilled to have you with us. 888-825-5225 is the phone number. Let's go to Lafayette, Indiana. And Steve is there. Steve, how can we help? Yeah, hi. Appreciate taking my call. So my wife and I are discussing whether we should be paying off the house. It's pretty much our last debt that we have. And current mortgage, I owe about $175,000 and the rate is at 2.79%. We have $420,000 roughly in a 401k and about another $400,000 in money market CDs. And so I would like to keep it in the 401k,

Starting point is 01:14:31 I'm sorry, in the money market and the CDs, and get about 4.5% off of that, and just apply the overage towards the mortgage payment. And my wife is looking to take it out of there and just pay it off, be done with it. Let's not worry about the house so try to figure out you know financially what the best direction is to go okay so let me just run that back real quick so you're saying she's like hey we've got four hundred thousand in a money market let's just pull out the 175 and pay off the house that's what she

Starting point is 01:15:01 wants to do correct yep and you're saying you just want to use the interest as it accrues to pay off the house? Yeah, yeah. So keep the 175, the full 400 in there, because I'll be earning at a little bit higher rate than the 2.79 it's costing us for the mortgage. I mean, I'm with your wife. You're not going to pay it off that fast.

Starting point is 01:15:23 Have you run those numbers? I'm with Jade. Have you run the numbers on it off that fast. Have you run those numbers? I'm with Jade. Have you run the numbers on the interest and what that's gonna actually be? So for instance, let's put you on the spot. Over the next 12 months, what are you anticipating that the interest of the 400,000 is gonna throw off? Yeah, I guess I didn't really do the math close enough

Starting point is 01:15:40 to be able to throw a number on the spot. Well, let's do it. So what's the return? What do you think you're gonna get over the next 12 months on that money market? So 400,000, four and a half, so would that be 12,000? Am I doing that right?

Starting point is 01:15:55 I think that's right. Mm-hmm. Let me get my cap. You're breaking up a little bit. While Ken does that, my thought is just, it's kind of like ripping off the bandaid in a way. You take the money out, the 175, you pay off this mortgage, it frees up your payment right now,

Starting point is 01:16:15 which how much is your payment right now? About 1,700, but that's with... Right, insurance and taxes? Taxes and insurance, yeah. Okay. So I think principle and interest is maybe $900 I want to say of that. Okay, so immediately you're free up $900. If you wanted to, you could invest that or, I mean, if you wanted to put it in a money market. I don't know why you have so much money in this money

Starting point is 01:16:39 market, but I would invest that money and and then you're completely debt free. And I love Dave Ramsey's take on this, because he would say, hey, if you hate the feeling of being debt free, and you're kicking yourself because you could have, you know, made some interest on the 4 1 1 2% on your money market, you could always go back into debt

Starting point is 01:17:02 and go back and do that plan. But I don't think you would. Yeah. Probably not, yeah. So I gotta jump in, Steve, really quick, because I'm 100% with your wife on this. Here's why, I just pulled the numbers. You're at 4.5% on the 400,000, that's 18,000 a year.

Starting point is 01:17:18 However, if you pay the house off, you have massive, massive jump forward in your long-term play. And then the second thing is, I would take all that money, and I would be investing most of that. Outside of your emergency fund, the six-month emergency fund, Jade, I would be investing the rest of that after you pay the house off, because I would rather get 8% to 10% versus your 4.5%. Absolutely. Yeah, and that's part of, so you had asked or said like,

Starting point is 01:17:49 why is there so much in the money market? So we had a pretty good chunk of money that we came into about two and a half years ago, I wanna say it was at this point, and put it in the market. And then the market continued to decline. I did probably the worst thing ever, which is, you know, put it in and take it back out.

Starting point is 01:18:05 And so we had some other personal things going on in our life that said, okay, we need to minimize the risk of any further loss on this. So we pulled it out and threw it in a CD ladder for about the last year and a half is when I pulled it out. So basically I put it in right when it started going down. And then I took it out right as it started coming back up.

Starting point is 01:18:24 So it was possible timing for me to make some money. So did you learn from that though? Well, I did. I did. Okay, so. Yeah, he's too excited about 4.5%. I wouldn't be excited about 4.5%. Yeah, I agree.

Starting point is 01:18:40 I'm trying to formulate a clear thought here, which is as long as you're moving this money around, it's never going to work for you as well as it is if you park it in the stock market. I don't care if you park it in an index fund, but just putting it somewhere where it's having a better rate of return, especially if we're using interest as a basis for this argument. You know what I'm saying? If you took the 200,000 that will be left after you pay off the house,

Starting point is 01:19:07 and you moved that and got a 10 or 12% rate of return, I mean, then this whole thing is kind of like a moot point. That's where I told exactly what I would do, Steve. Pay off the house, get with a SmartVestor Pro in your area, RamseySolutions.com, make the connection. The SmartVestor pros are people you need to sit with if you don't have one. And sit with them and interview them, get the right fit, right field, the connection, the chemistry deal, and then have them invest that money

Starting point is 01:19:35 for you. You're going to be so much happier. Yeah, because what did we say? We said that you were trying to keep the interest. I'm just thinking about the math. You were trying to keep the interest, throw the interest off of this $400,000. What interest off of this 400,000, what was that, 18,000 a year? Yeah, I was thinking I'm gonna pay the house off at $18,000 a year. But I'm like, if you get the, if you paid off today,

Starting point is 01:19:52 It's a long time. The difference is really, I mean, you would, with the payment back, that's $11,000 a year. So really we're saying keep the house around for six more years for $7,000 is really the argument, and I'd say no to that. No, it's not a good move. Hey, I wanna mention something,

Starting point is 01:20:11 then we gotta get to our question of the day. If you're a business owner, I know we have a lot of people who are starting out, you just could be in the side hustle stage where you've got the business up and running. You need to know about Dave's new book, Build a Business You Love. It's where he's unpacking how he took this business and where he started on a car

Starting point is 01:20:28 table in his living room to now an over 250 million dollar business. It's a proven system. Think of it as the baby steps running a business and you can pre-order it right now. It's called Build a Business You Love. Look at that. I like the cover. He looks sharp, doesn't he? And so that book is now available to pre-order for only 29.99. You'll get over $350 in free bonus items, including the Entree Leadership Hiring Playbook, the eBook, and the Enhanced Audio Book.

Starting point is 01:20:59 So you can get it at ramsysolutions.com slash store, ramsysolutions.com slash store, or if you're watching on YouTube or podcast, we've got the link for the book, Build a Business You Love by Dave Ramsey, his latest book, you can get it in the show notes. So go get that. All right, let's get to our question of the day,

Starting point is 01:21:15 which is brought to you by WhyRefi. Do you have a private, excuse me, a defaulted private student loan, and the payments are dragging you down? WhyRefi can help you save thousands of dollars. Visit yrefi.com slash Ramsey to see how they can help. That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states.

Starting point is 01:21:36 All right, today's question comes from Shelby in Idaho. She says, my husband and I have been married for 15 years and have two children. We're on baby steps four, five, and six. Last year, he was diagnosed with leukemia and underwent chemotherapy and a bone marrow transplant. My husband's estranged sister was a perfect match, which probably saved his life.

Starting point is 01:21:53 Wow. Now she has gotten herself in deep debt, trying to flip houses and rent out Airbnbs and has started asking us for money. We've already given her several thousand dollars last month and we have heard from other relatives that she has started asking them for large. We've already given her several thousand dollars last month, and we have heard from other relatives that she has started asking them for large amounts as well. My husband feels obligated to give her money

Starting point is 01:22:10 because she saved his life. And we know she'll be asking for more money again soon. How should we respond? Well, number one, guilt should never be a reason that we give. We should never give out of guilt. You give out of a cheerful heart and that's the number one principle right there.

Starting point is 01:22:31 Number two is if you have the abundance to give out of, you still have boundaries around it. It's not an unending well that's like, yes, more and more and more and more, right? You get to decide, okay, if we have the money to help a strange sister what are our boundaries around that and it's okay for you to let her know okay we're willing to give you x amount of dollars but this is the last time we're going to be able to

Starting point is 01:22:54 do it because that's where our boundary is and after that you just hold up the boundary yeah. Let the silence here I'm going to give you six words we can't give more. I'm sorry. That's it. And just let it ride. And you say we can't. You have to tell them why. Just we can't. Oh, I'm so sorry. We can't. I think that's all you can do here or this thing's going to be an ugly, ugly mess. This is The Ramsey Show. Thanks for watching!

The Ramsey Show - Stop Letting Excuses Steal Your Wealth

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