The Ramsey Show - Stop Living Paycheck to Paycheck—Start Living With Options

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 and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm John Deloney, joined by Jade Warshaw, and we are taking your calls live,

Starting point is 00:00:28 AAA 825-5-2-2-25. We've got to Pittsburgh, Pennsylvania, and talk to Lauren. Hey, Lauren, what's up? Hi, thank you so much for taking my call. Thanks for calling in. What's going on? So I'm looking for some hope, prioritizing a few big financial moves all at the same time. Just to kind of condense it, my husband and I have about $35,000 in credit card debt, a mortgage with about $193,000 remaining on our townhouse.

Starting point is 00:01:02 And I have about $28,000 in single stocks and a baby due in October. Congratulations. Thank you. So we've outgrown our current townhouse and hoping to sell and buy something potentially next spring. But I just started listening to the podcast. And I know the baby subs stay to stop investing and pay off debt before saving for our house. But in our case, the timeline kind of overlaps because of the baby. So my question is, would you recommend we sell the socks and then use all of it to pay off the debt first,

Starting point is 00:01:36 even if that delays our ability to move? or do we split that money between paying down the debt and keeping cash for the home transition so we can still move on the timeline of next spring? Well, I wouldn't change it because I don't think that anything's actually on fire here. I think you're just really excited, which is not a, it's not a bad thing. Do you know what I'm saying? Is this your first kid? Yes.

Starting point is 00:01:59 Okay. Yeah. That's our third one, but it's so exciting. It's your third one. So it's getting cramped. That's where you're feeling it. It's getting cramped in the townhouse. Yeah, three under three.

Starting point is 00:02:07 Oh, boy. Okay, so I can understand that. I empathize with you. I don't have three. I have two. And that was wild enough for my life. So I love the idea that you know, hey, yeah, we got to sell off the stocks. I love that. That's going to clear out the majority of your debt. And probably between now and when the baby comes, you'll be able to save up the rest of the money to clear out that debt, which, by the way, tell me again, when's the baby due? October 9th, so early October. Okay. So October. So what I'd be doing is I'd be spending from now until October saving up as much cash as I possibly can, you and your husband. That way, when the baby comes, we cash out the stocks. We have hopefully another $6 or $7,000.

Starting point is 00:02:51 We can pay off the credit card here. And then everything's all good. And we can start building up towards having our three to six months and everything like that. And to answer your question, you do need to save three to six months before you buy that house. Yeah. So why? Okay, so you've been on this road before. I remember all of the panic and, well, most of it was in my chest, but in my home when we were bringing home our first kid.

Starting point is 00:03:19 And I remember just looking at this tiny little lump of a human that couldn't move and was swaddled and was laying there and was just so loud. what is it about six months after October that you couldn't manage with just bringing home another 10 pound glob right you get what I'm saying I know I said that very nice but we know we it's a two bedroom townhouse so we're two kids already a boy and a girl this is another girl I mean they could share rooms we could make it work but it's just getting a little tight yeah for sure I get that. that. I get that. And here's the thing. It is going to be tight. John and I aren't going to sit here and tell you that it's not going to be uncomfortable. But my question to you would be, how quickly can we get out of the discomfort and do it in a way that's really financially responsible? So what's you guys as income? Right now, I'm the primary breadwinner since my husband just started a business. So I'm $110,000 a year. Now what's going to happen when the baby comes? Have you talked about that yet? Do you have, you've got maternity leave or what? Yep, I'm a teacher. So there's no maternity leave, but I will have eight weeks for my C-section. I'll be right back in there. Ooh, that's cutting it close on a C-section.

Starting point is 00:04:43 That's cutting it close. I'm just saying. I'll never sing that song again. But this backs up what I'm saying even more because the truth is I've had two. And the truth is you don't know how you're going to feel. That's the truth. And that backs up what you. John and I are saying even more to say, okay, let's cool out. Let's stack up money because if you

Starting point is 00:05:06 need to take a couple extra weeks, if you're not feeling quite right, if standing on your feet for however many plus hours a day as a teacher, I mean, I'm just saying, please wait, because that's going to give you the freedom of if you want to take a little bit more time, you can. So yeah, I would do that. Let's go back to what we talked about before, which is how long can it take us to stack up the three to six months so that we can then start purchasing the new house? With 110,000, what do you see your husband's income doing between now and then? It kind of fluctuates right now. Like I said, he just started a business, so we're hoping, he got it up and running in November. So we're hoping that that starts turning a profit.

Starting point is 00:05:55 But it's a used car dealership, so it's just like inventory and things like that. that hopefully that will change. What's his business plan say? Like what's his business plan say? What should he be making by, I don't know, say January? Yeah, he's hoping to have about $6,000 a month. Okay. How realistic is this hope?

Starting point is 00:06:19 Because I hope I get a million dollars on the way home, but probably not, right? How realistic is this home? He's getting close for starting an event. remember he's getting close to breaking even now. So as long as inventory can stay consistent, then it is very reasonable. He's making about three to four right now a month. Well, and there's nothing going on globally that could possibly interrupt anything. So that's cool.

Starting point is 00:06:44 Of course. Jeez, Louise. Man, you guys have a lot of variables here, and there's a lot of uncertainty. And I'm not saying this because I don't want you to worry. I just want you to be smart. When I look at these variables, I don't think, oh, there's a lot to worry about. I just go, we need to be thoughtful in how we move forward. forward. When you sell the townhouse, how much equity will you have to put towards the future home?

Starting point is 00:07:08 Probably about $70,000. And will you need more than that to put the correct down payment on said future home? Probably a little. I mean, for like a $400,000 house, you know, we're thinking of like three, four bedrooms. You know, realistically, like 20%, right, about 80 grand. So we could save that up, I would think, but, you know, 70K, but that's contingent upon selling our townhouse, of course, right now. Okay. Now, I do want to challenge you on this just to the 20% rule isn't what it once was. You know, yeah, you do 20%, you can avoid PMI,

Starting point is 00:07:47 but it doesn't necessarily move that payment down to 25% of your take-home pay. So make sure you jump on to, a mortgage calculator at Ramsey Solutions and just run out those numbers because at this point you're putting down usually more than 20% in order to avoid PMI and to get that payment where you want because the rule of thumb is and this is for anybody listening, you want no more than 25% of your take home pay tied up in your mortgage and your mortgage includes everything taxes, insurance, HOA fees, right? And so just just lock that in, Lauren. You just got to take your time, please.

Starting point is 00:08:24 until the baby's born. Save up a bunch of money. Once the baby's born, you pay off the debt. Once you pay off the debt, you stack up three to six months of expenses. And then, and only then, can you sell the house knowing that you also have money on top of that 70,000 to follow the 25% rule? Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it.

Starting point is 00:09:17 And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And you're telling me, for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next.

Starting point is 00:09:35 Me too. I mean, you're going to have a crisis here. And, you know, you've got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this. money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. Take care of your dadgum family, man. Term life insurance can replace income, pay off dads, cover funeral expenses, so your family

Starting point is 00:09:55 can actually have the opportunity to just be sad, to just miss you. That's exactly what it's supposed to be. It's saying, I love you to your family, term life insurance. Jeff Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Xander.com or call 800-356-4282. All right, let's go out to Kansas City, Missouri and talk to Melissa. Hey, Melissa, what's going on? Hi, how are you all?

Starting point is 00:10:38 Doing great. How are you? I am doing good. What's going on? Sorry, I'm a little nervous, so bear with me. Oh, you're good. Okay, so my husband and I have been married for almost 20 years, and we recently combined finances. What led to that combination?

Starting point is 00:11:02 You know, we just never combined them. We got married very young. We just never combined them. And after we had my son about 11 years ago, I started asking, hey, can we combine them? Because it was just a struggle to see who was paying for what. And about 18 months ago, after he got out of the military and we settled in a house, he said he agreed. And it's just, it hasn't been what I thought it would be.

Starting point is 00:11:37 And it's very frustrating. I've created budget, but he won't stick to a budget. He won't help me create a budget. And I just feel like his spending is out of control. And it stresses me out so much. So the problem is that your combined income. The problem is you have a husband that won't do life with you, right? Like the flashing alarm signal is the overdrawn accounts.

Starting point is 00:12:11 The real issue here is you've sat down with your husband and said, hey, can we do life together after being married for two decades? And he has said through his actions, no, thank you. I'm going to keep doing what I want to do. Yeah. And so what's the state of y'all's household finances? I recently got a huge promotion. I doubled my pay almost.

Starting point is 00:12:34 So I am now earning more than he is. How much? How much? I'm earning over 90,000. In our household income, we make about 12,000 net. in our account. And it just, every time I try to put some money away, I just feel like it flies out somewhere and gets new hobbies all the time. Yeah, it's a dirt bike and a four-wheeler. And I just don't know what to do to make him understand that I'm just, I want the best for our family. So I don't want to be strapped down with debt.

Starting point is 00:13:15 The only conversation I've seen be effective is the conversation beneath the money. issues. And so if you, if you have harassed him for, and I'm being provocative on purpose, okay, if you've harassed him for 11 years, we need to combine money, we need to combine money, we need to combine money. And he gets home from deployment, he gets out of the military and says, fine. That was never the issue. The issue is you saying, I don't feel safe when we owe people money. I'm scared about our financial future. Will you help me feel less? unsafe. Right? Because that's really what's happening underneath all of this. And every time a four-wheeler shows up at the house, your body goes, uh-oh. What about college? What about our bills?

Starting point is 00:14:08 What about? What about? What about? Right. If you haven't had that conversation, that's the only one I've seen be successful. I feel like I have had that conversation. I try to put it on like, this scares me. This is what I worry about. I just... What does he say back? We'll say, okay, well, we'll sit down some time and we'll go over it. And then when I get to that, hey, why don't we do it now?

Starting point is 00:14:34 Or, okay, can we schedule a time? There's always something. And it just continues to be pushed back. Well, you said a deadline. We were going to start in July of last year. And nothing happened. And then I asked him again, there's a new year. It's like, I really would love us.

Starting point is 00:14:51 to put a budget together because he didn't like the budget I put together myself. And he just, he doesn't, he thinks because we can make the minimal payment and we can still, you know, go out to eat. And he thinks that it's fine. And I'm just like, if we can buckle down for a little bit and get out of debt, we could live so much better. We could give more opportunities to our funds. And it just, I just can't get that from him.

Starting point is 00:15:20 I'm going to give you a framework, okay? This is like a last-ditch framework. All right? You ready for this? I want you to tell him that you need to have a big conversation with him. He might roll his eyes. He might be like, oh, here we go again. But I want you to hold for him, okay?

Starting point is 00:15:38 And when you have this conversation, I want you to tell him this in this order. The story I'm choosing to make up is, or the story I'm making up is, you don't care that I can't breathe in our house. The story I'm making up is you don't care about our financial future and that we're not safe. The story I'm making up is debt doesn't bother you at all and it does bother me and you don't care. And based on those stories that I'm making up, I feel scared, I feel alone in this marriage, whatever your feelings are.

Starting point is 00:16:14 And then give him an opportunity to respond. and if you sit down and say you're not doing this and you're not doing that then and you lead with you words he's going to wall up and defend himself we all do that but if you say hey i'm making up stuff about you am i right then that's an invitation and if he walks away from that table then you're going to have to i mean jane correct if i'm wrong here you're going to have to begin taking ownership of your future right because he hasn't seemed to have interest in that yeah right that that to me is the last-ditch framework that i i i'd That's how I teach people to handle conflict in their marriage.

Starting point is 00:16:48 Just own the story I made up, own the feelings you have about it, and own what you're going to do next. And if it makes sense, give them an opportunity to respond. Okay. I want to play Devils Advocate on this for a minute, because when he was deployed, what type of work did he do in the military? You know, he actually never deployed. He only had some TV-wise, but luckily, we never had to go through a deployment. he was in for 17 years and got out two and a half years, three years ago.

Starting point is 00:17:23 And what type of work did he do? He worked on the jets, on different jets. I can tell you what I'm thinking, and I think that this is all in the context also of what John is saying and counseling, whatever that looks like for you guys, because I do think that you need counseling with a third party. There's part of this where as you're waiting for him to man up because I think he needs to. And I don't think you just need to sit there

Starting point is 00:17:54 completely. I can't move. I can't do anything because I'm waiting on this guy to get his life together. No, she's got to take action. You've got to take action. And I remember talking with a friend of mine who was dealing with not exactly the same, but similar. And what she would do is she found out the things that were most important to her husband. And she was like, I'm going to make sure that that's on the, I'm going to go ahead and create the budget. I'm going to offer for him to see it. it. If he's not going to look at it, that's his choice. But at least I've made it and I've said, here it is. I would love for you to look at this by X amount of dates because I'm going to move forward with what's on here. And what she would do is she would budget for the things that she

Starting point is 00:18:30 knew he cared about. So maybe he loves going to the movies. So she'd put a little bit on there for him to go to the movies. That way, it's not anything that's going to make him walk in and be like, what are you doing? So that's what she did. And she would say, hey, there's this amount of money left in margin. I'm going to use that to pay off debt. And then when the time came, she'd pay off the debt. And then she'd come back to him and say, hey, just like I said, I use that money and I paid off a $500 medical bill. So she did her part.

Starting point is 00:18:59 She did the budget. She showed it to him. She made payments. She let him know the things that she was paying off. And then over time, he started to see, wow, this is really working. Now, caveat, they're not, he's not on board yet. She's going forward. She's going forward at a much slower pace.

Starting point is 00:19:15 because you go further, faster, together, right? We all know that. But I don't want you to sit there on your hands simply because this guy is not manning up. Yeah, that's a great way to say, become the person you want to be in your marriage. Yes. Start doing it.

Starting point is 00:19:34 Right? And if that ultimately means he's burning through savings and then yes, you may have to re-separate your money. But do it with a, not a smile on your face, but don't do it out of anger. do it out of, okay, cool, I've got to take care of our son. I have to take care of our house. I've got debts in my name and pull your credit report to make sure he hasn't put you on these jet skis and on these four-wheelers and all that kind of mess. Lead by example. That's exactly right. Be who you want to be in your marriage.

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Starting point is 00:22:29 What's up, Josh? Well, the cost of living, among other things. You're exactly right. It's higher and higher and higher. How can we help, brother? Yeah. Yeah, so I kind of got a question looking for an outside opinion. I'm trying to figure out a good way that's not going to cause any strife.

Starting point is 00:22:50 Excuse me. Cause, well, any major strife. to get my girlfriend on board with the baby steps and create a solid plan going forward. I think you should give her a budget that you've already done and lecture her and use a bunch of spreadsheets. I think that's terrible advice. Yeah, don't do that. Does she have a bunch of debt and you're trying to convince her to pay her debt off? What's the catalyst for this that you feel like you want to meddle in her finances?

Starting point is 00:23:25 Um, so, uh, you see what I'm doing here, John? Why, yeah, why are you getting in her business, dude? It's a reasonably good answer. Um, so for Christmas, my mother, uh, sent her one of the, uh, one of your, uh, budget evaluation books. And she was really good about it. She literally went right through it and did all the math and tried to figure out what she could do differently. Um, and the conclusion that she came to is, that her life expenses are too high, but she has no idea. Like, even listening to the show, looking through the baby steps, talking about it,

Starting point is 00:24:08 she doesn't have a clear picture of how to get out of it. And there's a good reason. She's a single mother with a five-year-old. Okay. And do you know how much debt she has? A lot less than it was. She has about $4,000 in debt right now. It sounds like she's crushing.

Starting point is 00:24:27 Yeah. Why isn't she calling in? I'm still trying to get back to you. Like, what's it to you? Are you thinking about proposing? Tell me where you're hung up in this. So I am 26. I have like $2,000 in debt right now,

Starting point is 00:24:45 excluding my mortgage. My house is almost paid off. And the only reason that she's so far, far ahead was because she totaled her car a little while ago, and the GAAP insurance paid off her car, which she was upside down in. So she got a lucky windfall, which is good. But since then, she hasn't made any forward progress at all. Has she asked for your help, brother? She has. Okay. Also, how did she ask for it? Well, first, she was in tears not knowing what to do, and I was doing my best.

Starting point is 00:25:23 to, you know, be patient and wait for her to be in a position to be receptive. And then I explained to her what I did and how it worked for me and why. But each time we talk about it, she always comes back to you, but you make so much more money than I do. What do you make? So this is so much easier for you. I make about $120,000 a year. And what does she make? Do you know?

Starting point is 00:25:49 About 25. Okay, yeah, that's going to be a problem. What kind of work does she do? She's a delivery driver for a car dealership, delivering parts and all that stuff. I can tell you what I think, and I don't know if you're going to like it. But this is something that is a litmus test in my mind. If I were in your shoes, because I'm just telling you, in my shoes, it's bothering me that she didn't call in. Because if I want to see if somebody's a go-getter, and if I want to see if somebody is about what they say they want to do,

Starting point is 00:26:22 I want to see you making real efforts towards that. So I would hope that she would call in and say, here's where I'm at, here's what I need help with, here's what I'm trying to pay off. That would be my, if I were you, that would be my question to her, which is I listen to this show, we're both on this thing. Why don't you just call in and ask? Or why don't you use Ask Ramsey and get the solution to the problem? That'd be thing one.

Starting point is 00:26:46 The next thing that I'd be checking for is I'd want to make sure that she's not an askhole. And what I mean by that, I talk about this in the book. When you're an ask hole, you're a person who asks questions over and over. You just ask and ask and ask and ask, but you never make any movement. James Clear talks about that in atomic habits. You just get and get and get information, but you never actually, you know, put it in action. You don't do anything. Another podcast, another cup of coffee.

Starting point is 00:27:13 I'm worried that that's what she's doing because you've said, oh, I've talked to her, I've told her what to do. She's just not doing it. So that's something that you can either take that information. information and go, this is a quality, and I don't know how I feel about that quality in her. Yeah. That's kind of the zone that I've been in off and on for a little while. Yeah. How long have you all been together?

Starting point is 00:27:38 About two and a half years. Are you going to marry this person? I'm never, that's a hard question for me to answer because I have my own reservations about the state being involved in my relationship. That's the only reason. Oh, well, I just finished a two-year study, like a down the rabbit hole study on marriage. And the data on formal legalized marriage versus cohabitation, it still wins out in a pretty significantly statistical way, a statistically significant way. It still does. But all I have to say is you do, you boo.

Starting point is 00:28:18 I'm fond of saying behaviors a language. And what her actions are telling me is she's not interested in your advice. She's not interested in what you're bringing to the table when it comes to this stuff. And she's not interested in she read the book. She listens to the show. She's not interested in going guns ablazin to get the stuff knocked out. And she has a very difficult living circumstance, no question about it. it. She doesn't make hardly any money. She's a single mom. Like all, she's got all the

Starting point is 00:28:52 variables against her. But again, this, like, the greatest thing I get to do in this, in this job is listening to story after story after story of people in all sorts of situations rise up. And so, but for you, it's, you can't convince her. You're living it. You've told her. She's asked and you've told her. Your mom has given her the book. Like, at some point, you have to open your hands up and let this conversation go. and continue to live financially the way you want to live. Can I ask you this? Her five-year-old, is he in kindergarten yet?

Starting point is 00:29:27 She's in kindergarten. And that, I'm guessing this was the first year of kindergarten. I'm just going to give her, I'm going to throw her a life draft here and say, it's possible that maybe before the girl was in kindergarten, mom was used to working part-time and kind of juggling both things, so she probably wasn't making at, you know, really making what she could income wise. And this is the first year that there's more freedom, probably of schedule. And I'm wondering if, and you can ask her about this, hey, now that, you know, baby girl is in kindergarten all day,

Starting point is 00:30:04 maybe now's a great time to start looking at full-time jobs that you can work, you know, drop her at early care in the morning, work a full day, come back and pick, you know, little girl up from school. but now's a good time that you maybe could get your income up because you know as well as I do, there's two parts to the equation, expenses down or income up. I think for you, it's income up season. And you can drop that there and see what she does with it. But I agree with John that behavior's a language. So I completely agree, except she had a huge advantage as that her daughter's father, his mother.

Starting point is 00:30:45 So her daughter's grandmother on her father's side owns a daycare. Oh, okay. And part of their separation agreement was that he would pay for child care. Well, then there you go. So that was never an issue. She would drop her off before work and then go work. She's working 38 to 45 hours a week and bringing home less than $500, which today with regular living expenses.

Starting point is 00:31:09 Can't do it. It's impossible, yeah. But again, I hate to say it this way. She has told you through her actions. This is not a problem that she wants your solutions for. And that can make you feel powerless and alone. I get it. This show is sponsored by BetterHelp.

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Starting point is 00:32:36 Visit betterhelp.com slash Ramsey to get 10% off your first month. That's BetterHelp. H-E-L-P.com slash Ramsey. All right, let's go out to Kansas City, Kansas and talk to Grace. Hey, Grace, what's going on? Hi, thanks for having me. You bet. Thanks for calling.

Starting point is 00:33:02 What's up? Yeah. Basically, me and my husband, someone got in our bank account and we lost 8,000. And so we just have a few questions of should we continue trying to pay off our house in 10 years. But we also need to buy a new car soon because his car's about to die. A baby's due in July and other appliances in the house are about to die and we need a new roof. Our pets' heads are falling off. Everything's happening. All right. So let's back that thing up a little bit. Okay, so what happened in your bank account?

Starting point is 00:33:36 Someone bought into it and took $8,000. So hopefully we'll maybe get it back that we highly doubt that we'll get any back. Why? Why is your bank not covering it as fraud? I'm not really sure they're disputing it, but we don't know. So we won't pay anything for 30 days. But how did somebody get in it? My husband made a mistake and might have given someone who he thought was the bank to his account.

Starting point is 00:34:02 so they were able to So it was a scam But I mean If that happened They should be They'll be on camera Coming into the bank Or

Starting point is 00:34:14 There'll be a record of the transaction Like everything is reported Yeah we have the records And police reports And all of that We're just are We're counting that as a loss And maybe we'll get stuff back

Starting point is 00:34:25 And maybe we won't But we want to set a plan Before Okay I wouldn't I wouldn't count it as a loss yet money just doesn't disappear out of your account. Yeah. You know what I mean?

Starting point is 00:34:38 Untraceably, right? And the bank has all kinds of fraud protection and ATM card protection. There's a lot of things here, right? So I wouldn't just count it as a wash yet. You named one thing that's for sure happening. You're having a kid soon. Yes. And then you named a bunch of other potential

Starting point is 00:35:01 future things that may or may not come to pass in two months or in five years. And so I want to clear the deck of what you can control right now versus the feeling that it's all coming down because something in the future may happen. You get what I'm saying? Yes. Is this your first baby? No, it's my second. Your second, okay.

Starting point is 00:35:28 Okay. Okay, so you got a lot going on in your house, huh? Yeah. Okay. All right. What's your financial situation? It's actually pretty good. We have about $55,000 in savings. Okay. We only have a mortgage debt. I'm a stay-at-home mom, and that's about it. What does your husband make? Maybe around 50 a year. He's active duty military, so it's pretty consistent.

Starting point is 00:35:56 How did you get $50,000 in cash savings? I have always been a favor And so when we both got married We kind of just conjoined everything And that's what it was So we didn't go to college So we didn't go to college So we don't have any debt

Starting point is 00:36:13 And we were smart not to have credit card debt Genius, that's fantastic Yeah incredible So you're actually in pretty amazing shape right now Okay If he feels the need to go get a $78,000 truck or get a $50,000 Jeep and then jack it up and, like, that would be really unwise.

Starting point is 00:36:34 Yeah. You have $50,000 of cushion right now. Yeah, it's great. But, I mean, you could cash flow, you're out of pocket for this baby and fix your appliances and get a $10,000 or $15,000 car that would be used and great.

Starting point is 00:36:58 and still have a fully funded emergency fund. So is that like the main thing we just want to have at least six months in our savings? Yeah, I mean, with you being a stay-at-home mom, I want six months. Yeah. Tell us about the new roof. It's just old and it's like we've had people look at it and we probably need to redo it in about a year. Is it leaking? Or less?

Starting point is 00:37:26 Not yet. Okay. How much does it cost? area. I have no idea. My husband knows all that. Okay. So I don't think that's anything that's on fire at this moment.

Starting point is 00:37:38 I think the things on fire are the baby. Yeah. Is there anything else that's like must happen now? Well, we had a plan of paying our house off in 10 years. So we use all our tax return to like put to our mortgage. Yeah. And I just wasn't sure if we should just put that into our savings for that $8,000 that we lost. What's the balance on the mortgage?

Starting point is 00:38:03 159, 760, sorry. Okay. So I'm going to try to order this in order of importance for you. And I'm going to order it in importance in a way of like, here's something you can be thinking about this year. And here's something you can be thinking about and don't think about until next year, right, until a year from now. So I just want to make sure I have everything on the list. You've got the baby coming in July. You, you, have a new roof situation. Did I hear there's a new car needed? And why is that? I just want to make sure that it's actually a necessity. Yeah. So my husband bought like a trash truck, this book market find,

Starting point is 00:38:45 and it just keeps breaking down. And he keeps working on it, but it's going to need rewiring soon. And that's like too big a job for him to do. And then it costs way too much to have a mechanic do. How much? And so. not what it's worth for the car. So the car is probably worth $2,000 and it was over that. Okay. Okay. And then we've got the baby.

Starting point is 00:39:08 Okay. So I'm with John. I think the number one thing on the list is we're going to not do much until this baby comes. The only thing I would do until this baby comes is I would take 10 of the $55,000 and I would get a car in cash. I would do that. because this $2,000 car, you don't need to put any more money into that. After that, once the baby comes and you've got $45,000 saved, you can start thinking about, okay, what would it look like?

Starting point is 00:39:40 You know, everybody's home, medical bills paid, everything is good. What would it look like to fix our roof? And I'd start charting that out, and I'd start getting different offers and estimates of what that would cost. And then once you have the numbers, since we don't know the numbers today, what could it be $20,000? maybe it's 15,000, then we can start saving for that. And we can look at our emergency fund and say, is there enough money there to do that?

Starting point is 00:40:07 If there is, we can use that. If there's not enough money, how much more do we need to save in order to make that happen? But your emergency fund is there. That's exactly what it's there for. So that's there. And then after that, you can start thinking about, okay, with the extra money in our budget, can we put regularly extra payments, extra half payments, extra quarter payments, extra quarter payments on our mortgage.

Starting point is 00:40:30 And that's that. Because you're also assuming he's only going to be making $50,000 bucks, two years, three years, five years from now. Which, yeah, he should still be getting raises every year. Exactly. Now, can I ask you a personal question? Yeah. Have you been involved in the conversations with the bank

Starting point is 00:40:45 over the missing $8,000? Sort of. My husband knows more of it. Okay. He's been taking care of it. And, like, I got so stressed out. I was throwing up too much and it in the ER. And so I just kind of left it.

Starting point is 00:40:59 Okay. I don't want to put anything out into the world that doesn't need to be there. Mm-hmm. But it's not passing my smell test. Yeah. That $8,000 just suddenly went away. In my world, that is somebody gambled it away. That is somebody bought something.

Starting point is 00:41:17 No, no, no. So I was involved with, like, the police reports. And it's like they got into our bank account, transferring money out with, they actually got his whole card, too. so they like took his card. So we had it all on video tape. Okay. So there should be fraud protection on the card, and that should be...

Starting point is 00:41:36 We're hoping so we just haven't heard anything, and so we're like... I would scratch and claw and fight like hell. You're a pregnant mom with a toddler. You got one coming? I would... Man, I would make this my full-time job to be the biggest $8,000 thorn

Starting point is 00:41:52 in the side of that bank until they made things right with you. I thought I heard you say he gave the account information to somebody he thought was the bank. I thought that's what I heard. Or he took the, somebody got his card and got the information. Oh, okay. Yeah, if he, if he's handing out his banking information, that money's gone. Well, yeah, because then my question was, well, what was he giving his banking information to for $8,000?

Starting point is 00:42:15 For $8,000, that's right. Or did he give it for $50 and then? They took $8,000. Yeah, there's a lot of questions. But I would scratch and claw and fight for that money back. And hopefully the bank will do the right thing and take care of you guys. If you run a business, you already know this. Bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in.

Starting point is 00:43:20 And it connects everything that runs your business, accounting, inventory, customer data all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven figures, go to NetSuite.com. Ramsey for a free product tour. That's net suite.com slash Ramsey. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. I'm John Deloney joined by Jade Warshall taking your calls on money, work, and your life. Let's go out to Detroit Rock City and talk to Tammy. What up Tammy? How are we doing? Hi, good. How are you guys?

Starting point is 00:44:17 Doing outstanding. What's going on? Good. I have a question. So my husband and I started the Ramsey baby steps about three years ago, about five years before that, we had already gotten into our home, so we had already signed for a 30-year mortgage. So we've completed the baby steps. We have no debt except for the rest of what we have to pay off our mortgage, which is 160. No other debt. We have our emergency funds saved up. Just trying to figure out how to prioritize paying that off. So we both work. I'm considering cutting down my hours to almost nothing to possibly homeschool our children in the fall.

Starting point is 00:44:59 So that would take our income down by anywhere from like 3 to 4,000 a month, which would then, so before we were, when we were through the baby steps, like 1, 2, 3, we then were doubling our mortgage to kind of mimic a 15-year mortgage because we had already signed the 30-year. But now I don't feel like we're going to be able to do that with my cut in income. So I don't know how we prioritize when we have extra margins. We prioritize our investing 15% or paying extra on the mortgage. Or we've even contemplated completely picking up and moving. And like we could probably sell our home for about 600 to 630.

Starting point is 00:45:42 And we don't, we've kind of realized that we don't really need as much land as we have. So we could probably get in something comfortable with like a net zero of no mortgage. Wow. With less land. Well, I think there's two problems. Yeah, I think there might be two problems you're solving for, and I'm not sure that one of them is even a problem. So first off, yeah, if you tell me that you were paying your 30-year mortgage like a 15,

Starting point is 00:46:07 and then you tell me, and by the way, I'm not going to be working anymore, and it's going to cut our income in half, and now we're going to be at how much per month when you do this, $4,000 a month? Well, no, so I bring home probably $3,000 to $4,000, but my husband brings home about $8 to $10. Okay, so you'll be just to 8,000 to 10,000 a month. Yeah, I would not expect the margin to be the same because you're no longer bringing in an income. That being said, what you can look at it and say, okay, with the 8 to 10,000 a month, how much margin do we have to continue to do baby step four, which is investing 15% of your gross income into retirement?

Starting point is 00:46:44 After doing that, after putting aside a little bit for kids' college, how much do we have to put on the mortgage? and it's okay if it's a little bit less than it was before, it's okay if it's significantly less than it was before. You're going to keep chunking away at this, and that mortgage is going to go away. Yeah. It's disappointing when we went from possibly paying off in five to seven years to now looking to go to like now we can't pay it off for like 22 years.

Starting point is 00:47:11 You know what I mean? I don't think it's going to be 22 years. Have you put it in a calculator? Well, I mean, like if we got our 30-year mortgage eight years, ago. But you've been paying on it like it was a 15. Yeah. You've paid it way down. You need to, you need to put it in as it is now and see how long it would take with whatever margin you have. And then if you look at that number and go, we're not satisfied with that. Then you have to ask yourself, okay, what's the solution? Maybe while I homeschool, I do a little bit of part-time work.

Starting point is 00:47:40 Maybe that's the solution. But I think you guys can solution for that. Let's talk about John, the second problem. That may not be a problem, which is we have a lot of land, be too much land, maybe we should move. I want to know if you really want to move or if you're just thinking about that because you feel like you have a problem in your current house. I mean, I don't feel like we have a problem in our current house. We just, right now, we have about eight acres and we could be comfortable with like three or less and that could move us to a comfortable home and eliminate the whole mortgage issue. Like, we like our home, but then we're also thinking to be mortgage-free and have the extra margin to be able to do extra things

Starting point is 00:48:23 instead of being on the mortgage. How many kids do you have? We have two. Five and eight. Five and eight. Okay. Can I throw another idea out here? Sure.

Starting point is 00:48:36 I want to flip your whole situation around, okay? You and your husband have worked your butts off for a long time. to get into the exact situation you're in right now. Y'all have a more than half a million dollar house and you have 160 grand left on it. You don't owe anybody anything. You are deciding, I might just want to stop working full time and I want to invest fully into my kids.

Starting point is 00:49:09 Right. Y'all are winning all across the board. I off the top of my head I forgot the psychological construct here but here's the basic nature of it if Dave Ramsey called me texted me and said hey I'm going to give you a huge raise come by my office and I went by his office and for him to say the words huge raise I immediately thought he's going to give me a hundred thousand dollars and he gave me 25,000 he said John you've been doing great work here's 25 grand my gift to you I would feel like He took 75 grand from me because I made up a story in my head and my body started solving for that story.

Starting point is 00:49:52 I would have spent a hundred grand by the time I went up to his office on the sixth floor of this building. Right? And so here's what I don't want you to be careful of. You're grieving a reality that was never a reality. It was a story. We're going to pay this house off in five years. It's not a tragedy that you and your husband chose a different value, which is homeschooling. over another value, which is we don't want to owe anybody any money.

Starting point is 00:50:18 You just put one in front of the other for right now. That's a choice you all made. And it's disappointing. We're going to grieve the fact that, man, we thought we were going to have this thing knocked out in five years. Cool, we're not. We're going to spend extra time with our kids, and we're going to get this thing done in 10 years.

Starting point is 00:50:34 Right? And so I don't want you to hang on to the story because it's casting a shadow over a pretty amazing situation that you and your husband have worked like crazy to set yourselves up in. Right. Y'all are winning. Okay.

Starting point is 00:50:49 You get what I'm saying? And not the Charlie Sheenway, but like y'all are for real winning, right? Yeah. I guess like you said, I've gone through a grieving process of losing that thought and that concept. And let me put one more thing on the table. And I've said this a million times on the show. I'll just keep saying it. Whenever me or my wife or both of us feel hemmed in by an either-or decision,

Starting point is 00:51:11 I have to stop working and homeschool the kids or I got to keep working and hate every day. Here's what I want y'all to do. I want you to throw on the table five or ten random other ideas. Sell the house. Work quarter time instead of part time. Have the kids stay in public schools for one more year or two more years and then let's hyper drive this thing

Starting point is 00:51:34 and get it paid off in insane fashion. And then we're done for it. I want y'all to do this exercise because it will will remind you that y'all are free. Y'all are in the driver's seat and you're not in an either or like dire situation. We got to turn right or we've got to turn left and one of these is going to be the worst decision ever. It's just not the case. One of them's not going to be, you can't have it all at the same time, but man, y'all are in a pretty good spot. You know what I'm saying? Good. Yeah. Yep. So congratulations there. Jade, any final words?

Starting point is 00:52:06 No, I thought that was really, really a good way to frame it up. Cool. I'm proud of you, guys. This is what, I hate to say it like this, but this is what freedom looks like. You get to make choices, and, but you still have to own the choices that you make. 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. CHM has been around since 1981. It's predictable and proven, and they've shared over $13 billion in medical bills for their members. Plus, you get more

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Starting point is 00:54:10 Let's talk to Sean. Hey, what's up, ma'am? Hey, thanks for taking my call. I had an interesting question for you guys. It's basically that we're in the middle of Baby Step 2. And for personal reasons, for religious reasons, we have to send our children a private school. And so we have two kids. We send them both to private school.

Starting point is 00:54:31 It costs about $1,600 a month for that. And we were just kind of trying to figure out the best way to approach Baby Step 2, like just because every year we're going to have to pay that. So we didn't know should we pay off all of our debts, accept that one and then, you know, try to stay ahead of it for the next year by paying it all at once. Is that monthly payment okay? At what point do we address it? Kind of just because we know it's always going to be there every year. And it's really important to us that our children go to that school. How much debt do you have? We have about 20, not including our house. We have about 28,000.

Starting point is 00:55:09 Okay. And what's the income? So combined, it's about 78K a year. near net. Okay. What does it look like monthly? What do you bring home? I bring home about $2,300

Starting point is 00:55:26 every two weeks, so it's about $4,600. Okay. With that $4,600, what's your margin that you're throwing at this $28,000 of debt? So we're, so the way the debt is made up,

Starting point is 00:55:43 it's about $6K in the car, and it's about 22 in student loans. And so that 4,600 a month, that was just mine. My wife brings home another, I don't know, 1,400 a month. And of that, we're doing about, about 365, 355 on student loans. And we're doing about 400 on the car, just because minimums on the student loans are, you know, more or less that. The car minimum is about 230. When you say, 365 and 400, is that above the minimum payment or is that including? Yes. Okay. On the car. It's above. It's above. So you're putting 700, you have a margin of $765 over and above minimum payments that you're

Starting point is 00:56:31 putting towards your debt? Yeah. Okay. I would, tell me if this bothers you. It bothers me that it could foreseeably take you two years to pay off $28,000 of debt? Yes. Okay. So then the question becomes, what are we going to do about that? And I'm asking you, what are you going to do about that? I mean, we're just kind of, you know, taking it day by day. We're trying to see.

Starting point is 00:57:09 But you can't, don't say day by day because I just rolled out the math for you. It bothers me that it would take you over two years to pay off $28,000. And you've said it bothers you, too, as it should. my real question to you on the line is what are you going to do about that? I mean, change, address more towards it. Yeah. So there's two things you can do. There's two, I'll give you a hint because there's two factors to this.

Starting point is 00:57:37 You can either decrease expenses or you can increase income or you can do both together. So where do you think your greatest potential lies? Does it lie in lowering expenses or does it lie in increasing income? Right now, probably decreasing expenses. I would say that, but I also know for you, it felt like the 1600 was immovable. Yeah, it kind of is. Why is that? Just for personal reasons, it's personal reasons I really prefer not to get into on the air,

Starting point is 00:58:15 but just like assuming that that is the reality. I'm curious how you guys would address that. I know you guys would disagree with the premise that that is the reality, but if it were, I would want to know. Listen, it's your life. If you tell me this is immovable and I'm not shaking on it, then I'm not going to waste my time trying to push you on it. But what is it, what is movable is, are you willing to work weekends?

Starting point is 00:58:36 Are you, is your wife who makes $1,600 a month? Is she willing to go find a full-time job and double her income now that the kids are in school? Right. Because, like, you can go make more money, especially for a sprint to get this thing knocked out. right and so I guess I'm kind of asking knowing that that expense is going to be there every year would it be stay so far ahead of it you're paying this thing in full at the start of every year in cash you can't afford that that's even that's not a relevant question for you you can't afford that yeah because then what happens then then the equation becomes this it's cool to side hustle and sprint like john said when you have a short term goal but that's not a long term that's not sustainable long term so to your point it if this 1600 is going to be part of your life forever, now you have to start looking at long-term measures and going, okay, my core income just does not sustain the life that I want.

Starting point is 00:59:30 That means I have to start looking for ways to get my core income up. So that's either I switch my full-time job, I move to a less expensive area, I go to a place where there's jobs that pay higher. Do you see what I'm saying? So we really have to decide, and I'm working on your framework, which is 1600 is not movable.

Starting point is 00:59:49 If that's the case, then you guys do need to look at solutions that are long-term solutions. We can help you sprint to pay off the $28,000, but that's not going to solve a $1,600 line item for the foreseeable future. And monthly, yeah, it's a bill. It's a water bill. It's a light bill. You don't need to save up 16 times 12 or 16 times 9 and try to figure out how to come up

Starting point is 01:00:11 with that many thousands of dollars. A, you can't do that. You don't make that kind of money. But you're not in debt to the school. Just same as you're not in debt. debt to the cell phone company. Right, right. Right. It's a bill. Okay, so just treating it kind of like that, kind of like a really expensive water bill. It's a very, very expensive bill. In terms of tackling it, I got you. Okay. Yeah, yeah, yeah, yeah. Thank you. Now, when you, you might be closer than we think,

Starting point is 01:00:36 so let's see here. Your car payment, your, your minimum, what's your minimum car payment? 233. 233. And what's the minimum student loan payment? Like 350. Okay, so we're getting close if we add that up together, because you told me before the $765, that does not include minimums, right? Right. So minimum is $233.33. We pay about $400, and then the minimum on the student loan is about $350. We pay like $3.65 just to put a little something on top.

Starting point is 01:01:09 I mean, that puts you at $1,348 that you have back in your budget once you pay this debt off, which it's not $1,600, but it's finding you a little bit of money to put towards that. So that's the gap that you're going to have to close. But just remembering when you do that, you're not going to have any other margin. Right. For sure. So you've got your work cut out for you. What do you think you're going to do?

Starting point is 01:01:35 We're going to decrease expenses. Can your wife not go earn more money? Not really. No. But I'll find ways. I'll make it work. I'm just telling you, dude, we've been doing this a long time. Those words, I'll make it work.

Starting point is 01:01:55 our famous last words. Will you make one deal with me though? Sure. Well, you promise me you just won't go into debt to make this work. Because what I see is what I'm, this is what I'm most worried about for you. You're a decision with your school. I'm not going to take you to task on that. You're going to value what you value. So don't hear me say that like this is a terrible thing. But what I'm afraid for you is if it gets tight, I would hate for you guys to start leaning on credit cards or anything like that to fill these gaps. So just promise me no matter what you do, please don't let this be a rest of it. for you to say yes to debt or credit.

Starting point is 01:02:28 Fair enough? For sure. And I'll just tell you, your language is of a man who's trapped. And trap men never make great choices long term. Right. Okay. Okay. And so if that means, that means if your wife can't do anything else, if there's just

Starting point is 01:02:48 no options about the schooling, then you might have to look in the mirror and say, okay, I'm going to have to go get another job. I'm going to have to go make some more money. I'm going to have to work two or three jobs, like millions and millions of men are doing all across the country to provide for their families. But it might take that kind of sacrifice and that kind of change. But, man, I get real nervous anytime I hear a man who sounds trapped because that's when, like you say, Jade, that's when they start making gambles. They start making bets. They start day trading. They start

Starting point is 01:03:15 crypto. They just start doing stuff that they normally wouldn't do. And man, they find themselves in a big, big mess. You're not trapped, brother. Home is one of the biggest financial decisions you'll ever make, but too many people base the decision on opinions or what the market is doing that week. Churchill Mortgage has been our trusted partner for over 30 years because they do things the Ramsey way. A lot of people think buying a home starts with going to a bunch of open houses. But if you're buying a home the right way, you start with a budget and a trusted guide like Churchill before you even think about house shopping. Churchill will show you the real numbers, not what a bank. bank will approve. Buying before being ready is how people end up house poor and stressed out.

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Starting point is 01:05:44 from buying a home especially since waiting could mean facing higher home prices as the busy season ramps up. Medium home prices went up to $415,000 last month, which is typical for the spring market. With more homes available and more buyers entering the market, it's a great time to buy or sell. To learn more about housing market trends and get free tools to help you buy or sell with confidence, go to Ramsey Solutions.com slash market or click the link in the show notes if you're listening on podcast or on the tubes. Let's go out to Los Angeles, California, IA, and talk to John. What's up, John?

Starting point is 01:06:21 Hey, how are you guys doing? We're doing great, brother. Thanks for taking my call. Thanks. Thanks for calling. What's up? No, thanks. I'm just looking for some advice.

Starting point is 01:06:29 So I've got a unique situation. My grandmother passed away a few years ago. My dad's mother, he's got a second cousin that kind of contested her will. It took about two years. He spent about $60,000 of his own money. We don't know how much is in her accounts. And in the end, he's now asking, she circumvented him because they don't have a great relationship.

Starting point is 01:06:53 So in the end, the money is going to end up going to me. And I have a great relationship with my mom. They're still married. But, you know, he's telling her to tell me that once I get my money, that I owe him the $60,000. So I bring this up because when it came time for me to go get my master's degree, I was looking to go out of these coaches. He convinced he could stay on the West Coast.

Starting point is 01:07:14 He said, I'll pay for your student loans. He didn't. I paid off the $150K. So, like, with all this kind of going on and him kind of trying to use my mom to guilt me into paying him back, like, am I obligated to paying the $60,000 or should I wipe it out considering he never came through with paying for my college? How old are you?

Starting point is 01:07:34 I'm 40. 40. How much money are we talking here? I don't know. That's the thing. It could be $1.300. thousand dollars i'm assuming since one of the second kind of us tried to contest the will at the decent amount of money probably three to five hundred grand okay when's the last time

Starting point is 01:07:51 and i'm kind of poking at you but just know like if we're sitting down at a table i'd be smiling when i'm saying this okay yeah um when's the last time you called your dad and had a grown man conversation oh because here's a deal this is how kids work hey tell susy that i've got a crush on Sutton. But don't tell her that, like, and then Sutton tells Susie, well, John, I don't, like, you see what I'm saying? You all are playing telephone through your poor mom. Y'all are grown men. Yeah. No, I know. We haven't spoken in three years. He got into a fight with my wife, and obviously I chose my wife's side. Yeah, if he wants to be a grown man and call his son and say, hey, I fought this. It's this much money. Here's what I spent on it. It feels right to me that you would come back.

Starting point is 01:08:35 And then you said, well, let's have a deeper conversation. You told me you'd pay. for this and then you walked away and I got stuck with a hundred feet have a grown-up conversation okay but I'm not going to play telephone with my dad I would tell my mom mom I don't want to hear any more of the pass-through if dad wants to talk to me about money he can call me like a grown-up and for you brother you did the thing you paid it off yeah every minute you wake up and choose to think about that and let me ask you how many imaginary conversations have you had with your dad over that student loan ha ha ha too many Exactly. And you always win him. You get this mic drop moment. He's like, you're right, son. I love you. And he writes you 150. None of that's ever going to happen, ever. And so every minute you choose to engage in that is a minute, I mean, is a choice to not have the energy that you could spend on your wife, on your kids, on the life you're living right now. You did the noble right thing. Yeah, had a problem with your money. Somebody didn't show up for you and you paid it off. I'm proud of you for that, dude.

Starting point is 01:09:37 Thank you. That's what men do. They step up and step up and start. solve a problem. I would tell my mom, hey mom, I don't want to have any more pass-through conversations. If dad wants to talk about money, he can call me. And free her from that, and she can tell him, free yourself from that. And then when it gets to that conversation, man, I just have a lot more questions than I could answer on you right now. If he was choosing to go to war with the second cousin, because he's got 70 years of disdain for second cousin, or he thought he was in this will, and suddenly he didn't find himself in it. Like, who knows, man?

Starting point is 01:10:12 Right? Who knows how much he actually spent on these bills? He's already proven to him. He's not trustworthy. So, I mean, I have so many questions here, but I don't see you under any obligation for anything at any time when it comes to doing anything other than graciously receiving this money and being a good steward of it as your grandmother would have wanted you to.

Starting point is 01:10:31 Okay. I like that. Now, if your dad had called you three years ago and said, second cousin showed up, I'm going to war for this thing. It's going to be expensive. of, I'm going to need an agreement from you that I'm going to spend some money on this thing, but we're going to win this thing together. I could have seen you going, well, yeah, dude, let's do that because it's the right thing

Starting point is 01:10:47 to do. He didn't do that, right? Yeah. So I just have a lot more questions than I would be able to answer in good faith here. But the way y'all are going about it sounds like one of you is nine and one of you's 11, right? Yeah, I understand. What do you think, Jade? I think that you couldn't have said it better, and I don't think there's much else to say about this.

Starting point is 01:11:12 And I almost don't want to continue it on because you've already run through this so many times in your brain. I just want to slam the gavel and go, that's it. It's over. You're going to get your inheritance, and that's that on that. Okay. No, I like that. I didn't think about it from that perspective either. The one thing I'll tell you, and all of us on this show get grief for this, when I tell somebody who's got a 3.1% mortgage that they got right after COVID and they think they're winning life by hanging onto it, right? I always tell folks, dude, my financial picture, I am not solving for max ROI. I am simply using money to solve for peace in my life. Right?

Starting point is 01:11:56 And so I use that frame on almost every single thing I do. And so in this case, if you get a check for 500,000 bucks, and 60 grand gets this person out of your life forever, and you choose to not repay a debt because you don't have one. But if you choose to write a check for a sole tax for you to end this thing, you're not starving. You're left with $440,000, right? That can be a choice you choose to make.

Starting point is 01:12:23 I can guarantee you if you do write that check, he's going to come knocking for more. And so I was going to say, that's not going to be the end of it. It's not going to be the end of it. That's been a story in my life. There you go. And so if this has been, and you said it, you just said it perfectly. He's been doing this to you your whole life, hadn't he?

Starting point is 01:12:41 Yeah. Yeah. There been multiple times where he's hitting me up for money, pay me back, hit me up for money, pay me back. And that's why you need to just put this to rest because it's just a drain. Yeah. I amend my answer. No, I wouldn't give him any money.

Starting point is 01:12:54 If he calls you and flies down and you'll have a grown-up over, like grown-up adult male conversation at a diner where you'll shake hands, then so be it. you all can come up with a deal there. But short of that, no, you don't owe them any money. Got it. Okay. Thank you very much. I appreciate it.

Starting point is 01:13:09 All right, brother. Take care, man. Thanks for being a person of high integrity and wanting to get this thing right. That's pretty noble of you, brother. Let's go out to Dallas and talk to Victoria. What's up, Victoria? Hi. Thank you for taking my call.

Starting point is 01:13:23 Oh, I'm right up against the clock, so get right to your question here. Okay. Okay. So recently I got a good paying job, but I started getting to debt right afterward. I'm getting married. I moved. But my big question is I have a little about $18,000 in debt. I'm getting a good bonus at the end of the year. Do I continue with the debt snowball or do I kind of live normally and then just pay it off at the end of the year? No, I'd continue the debt snowball and I'd get as far as you possibly can because what if this? What if you pay off the $18,000 before the end of the year and then you just have this sweet bonus sitting there waiting for you that can be your three to six months of expenses? Okay.

Starting point is 01:14:04 Or, or I think you need the muscle. I think you need the like nine months of grinding. True that. That's great for the soul. It's great for the confidence. And by the way, Jade and I would not have a job if everybody's bonus always came through at the end of the year like they were promised. That's true.

Starting point is 01:14:27 I wouldn't hold my breath for nothing. This show is made up of people who, the government, government's going to pay off everything and they're going to forgive and the boss said I'm going to get it. And it doesn't work out. Keep doing the same thing you're doing. Pay it off month by month. Practice that muscle. And if you get a bonus check at the end of the year, it's just that.

Starting point is 01:14:46 A bonus. The Ramsey Show question of the day is brought to you by WRIFI. Defaulted private student loans can leave you feeling stuck and overwhelmed. But YREFI helps you explore refinancing options with a low fixed rate and a payment based on what you can actually afford. Visit y-refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey may not be available in all states. Okay, dokey. Today's question comes from Alexandra in Oregon. She says, my fiance and I just postponed our wedding for the third time because he is at risk of losing his house again. This is due to him being convicted. Hold on.

Starting point is 01:16:01 I got to get myself together. This is due to him being convinced the business that he started five years ago is going to be a success. But it has yet to turn a profit. I've asked him to get a full-time job so we can get married, but he refuses to give up his dream of being an entrepreneur. I'm tired of my life being on hold while he chases success. Should I give him more time or move on? I think you better cut it loose. I think it's time to cut it loose.

Starting point is 01:16:31 I mean, here's the thing. I'm looking at this and you're writing into a radio show because you've had it. If you take the time to email a radio show, you've had it. That level of desperation. It's desperation. He's postponed the wedding three times. Now, and he's almost lost his house. Like, there's no security there now.

Starting point is 01:16:54 Now, here's what I will say. Being an entrepreneur, if you are truly of the, entrepreneurial spirit, you are not going to, everything is not going to be awesome and everything is not going to be a success. There's going to be ideas that suck and then there's going to be ideas that are pretty good and then there's going to be ideas like, yeah, that one was it. Right. So there is part of that where there's a roller coaster to ride. But what I would help he would be doing is in the meantime working some sort of stable job while he's putting his hand in all those other different things. That's the only, that's the best that you can ask.

Starting point is 01:17:31 Entrepreneurship is not a pass on being an idiot. Yeah. Right? It's not a pass on not believing the rules of math apply to you. That's right. Right. Or not being a person of character and integrity. So as the great Dave Ramsey once said, see you later, Felicia.

Starting point is 01:17:49 That's what I would say. Yeah. This one's, yeah. Here's the thing, Alexandra, and this isn't going to give you any more peace. He's already left you. He is married to this fantasy and he's giving it his time. He's about to give it his home.

Starting point is 01:18:07 He's giving it his energy. And he's already laughed. You keep hanging on because you love him and I admire that about you. But he has moved on. And so I think it's time for you to move on too. That's our two cents, but we're a couple of radio people

Starting point is 01:18:23 who have never met you before. So you do what you want to do. I would be willing to bet 100 bucks. you're going to have a fourth wedding on the books within two months. What do you think, Jade? Yeah, you're probably, well, I don't know. If I could hear her voice on the phone, I'd have a better gauge. That's probably true. But I think it's time. Clearly, anybody who's, he's continuing to value whatever it is that he's doing at a fail to being able to have success with you over here on the other side. I want someone who's going to marry my daughter to put the energy and,

Starting point is 01:19:01 obsession that he has in his business into my daughter. Man, yes. That's what I want. You want me, like, we need to get a house? Done. I need to work three jobs to make something happen. Done. Like, we're going to do that.

Starting point is 01:19:12 Wait, so what you're touching on is something that this is about to be a whole discussion. Because it's so true, this is for all of us, not just old boy who started his business five years ago and wasn't successful. But that's all of us. If you look up and you're putting more intentionality and time and effort into anything that's not your family, you need to check yourself before you wreck yourself. Yeah. And I think people take that the wrong way. I've been working on a new book project for two years. You just had a book come out.

Starting point is 01:19:46 My wife and I, like, eight months ago, we went on like what I call like a final date. Yeah. Like we know this is coming. And we've been on dates since then. Yes. But like we're about to hit wild. season. My wife's an author. She wrote in this season. We got two young kids. Like, we've been in it. But the anchor point is all of this circles back. Not so dad can get famous. Not so I can get

Starting point is 01:20:08 just another book on the shelf, but for us. And for people in our local community. Right? People like, and so, but it's anchor starts there. And so there are seasons that are way out of whack and way out of balance. And you and I are on the road. Yeah, you can do sprints. That's life. But it all anchors back to her and I sat across the table and said, all right, all hands in. We're about to have this season coming up. And here's what our life's going to look like on the backside of us, right? But man, you are married to somebody who is having an affair with their job, or actually you're the affair. Their love is their job. Their love is their golf game. Their love is their whatever, their phone. Man. It's a problem. Yeah, because not you trying to think

Starting point is 01:20:50 so strategically about how you're going to get your next raise and how you're going to navigate relationships and you're not being that intentional with how you navigate your relationships at home. You're not, you know, you're like you said, you're focused on your golf game and improving your swing, you know, improving your mild time, all those things, but you don't put the same thought into your money. You don't put the same thoughts into your relationships. I'm just saying, first things first. You got to put the first things first is all I'm saying. Here's what I want people listening to do. Go home today. Remember like if you went to college, you were in high school, you got a syllabus. Here's all the books you got to read this.

Starting point is 01:21:24 semester, here's when the assignments are due, here's the homework schedule, here's all that. I want you to ask your spouse for a syllabus of them. What are five books they love? What are five movies they love? What are five podcasts they're listening to these days? What are five big topics they have? And I want you to spend a couple of months knowing your spouse, learning them again, studying them, talking to them, going to dinner with them and saying, all right, I'm not going to try to debate you. I just want to hear, what do you think about this, what's going on overseas? What do you think about what's going on in politics? I'm not going to fight at all.

Starting point is 01:21:56 I just want to learn about you. I listen to this podcast you love. I think it was terrible. Tell me about what you like about it. But get to know each other again. And that level of intentionality, man, if I can put that much into the next bass rod I'm going to get or my next hunting spot and I won't get that to my wife,

Starting point is 01:22:13 what kind of husband does that make me? Right. And I've been there for years, right? Because at work, you'll talk to Chad and act like what he's saying is the most exciting thing ever just so that you look good in front of Chad. And then when you get home,

Starting point is 01:22:25 you'll walk out while, like, listen, I've done this before. But I should not know, Jade, I'm, I'm getting convicted in real time. I should not know the Seymour Duncan P90s that I just put in my Les Paul. I should not know how that all works and not know how my wife likes your coffee. It's so important.

Starting point is 01:22:41 I'm telling you. Yes. That's more important than this. I should have that stuff covered in my spirit. I should be paying more attention making sure she's got coffee in the morning and making sure, hey, I'm going to run to the store. I'm going to go fill her car.

Starting point is 01:22:53 up with gas on Sunday night, knowing, instead of getting up on money and being like, oh, she didn't put, I can go do that. I should do that stuff. You know why? Because I do it for my guitars. I do it for my hunting gear.

Starting point is 01:23:03 We all have done it. Man. We've all done it. We've all done it. So, to reiterate, Alexandra, see you later, Felicia. Now we talk too long, Jane.

Starting point is 01:23:15 I'm still on it. You closed, you wrapped it up too soon. First things first. You know what? Hit me with one. of their social questions. You know what? I already,

Starting point is 01:23:25 already moved them all. Really? I've got one. I've got one from TikTok. Okay. My favorite place to hang. Oh, this is great. Okay.

Starting point is 01:23:33 Did you know if somebody came to me and said, hey, log in to TikTok or I'm going to set you on fire? I would be on fire right now. I would just be like, Bones. Get it going. Get it going. I don't know how to log in.

Starting point is 01:23:42 All right, go for it. Okay. Michael from TikTok says, let's see. We are planning on selling our current home and purchasing a new home within the next few months. Does it make sense to keep attacking the mortgage, or should we save more money towards the next down payment?

Starting point is 01:23:59 You really could do either or. I probably would save the money out in cash. Just in case you don't get from your house what you were expecting to get, possibly. Yeah, and it depends on how much cash you already have for your down payment for your next house. If you're sitting on a couple hundred thousand dollars, then, yeah, keep grinding away at it. But if I knew I was going to put my house in the market in two or three months. It's months, yeah.

Starting point is 01:24:21 Yeah, I would pay minimums and keep the cash. Keep the cash. I would do the same thing. That's what I would do. Hey, thanks for being with us. We're going to be back for another hour soon right here on the Ramsey Show. Oh, we're still going. We're still going.

Starting point is 01:24:36 Joe, I thought you were giving me the Joe's are fearless. I've got another social question here. Audio engineer. Listen, this is why they don't let me drive, ladies and gentlemen. Sometimes I run into the media. I'm here for you. Love you guys. We'll be back soon.

Starting point is 01:25:16 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm John Deloney joined by Jade Warshall. Let's go out to Austin, Texas, the 512 and talk to Mike, Mike, Mike, Mike. How's it going, guys? Doing all right, brother. What's up? Thanks, taking my call. A bit of an odd situation.

Starting point is 01:25:37 Received a promotion about two weeks ago from my work. Congratulations. Thank you. Although they do a truck allowance program, versus a company truck program. And so after looking into it and looking at their stipulations of what that vehicle needs to be, I would have to buy something and finance it. And I really don't want to do that.

Starting point is 01:26:07 Me and my wife just got out of, just got 100% debt free. And so just don't know how you guys would handle this situation. Is the stipulation reimbursement only, or do you have to have a certain truck at a certain mileage in year, and then they'll give you a stipend? Certain truck of a certain mileage and a certain year, and then I get a monthly stipend. Okay. You're going to hate my answer, but if I'm in your exact shoes, I would probably begin either A, I'd make the decision I'm going to waive the stipend, and I know that's free money, but my freedom is worth more than that. or I would save up the money on my own and buy the truck and then take the stipend. Yeah, why can't you be on an elongated timeline?

Starting point is 01:26:57 Do you have to make this decision immediately, is what I'm saying? Yeah, so they gave me a 30-day timeframe to make that decision. Just because I explained to my district supervisor that, you know, I don't want to go out and finance a truck and in order to be in. So I would just use the current truck I have, although my current truck that I have now won't pull the big trailers. And it's only a half ton versus it needing to be a one ton to get the monthly stipend. So can you even perform the job with your current truck or you cannot? Short answer, no.

Starting point is 01:27:36 What does it cost to get a used vehicle? I mean, the used, that's the problem. I mean, they're asking you to buy an $80,000 truck, right? And I'm looking used, but I mean, even a used vehicle is a used truck that would work under 100,000 miles and not older than five years old. I mean, I'm looking at, you know, $40,000 truck. Wait a minute. Not to get the truck allowance to actually be able to pull what you need to pull. Like to act, there's two searches.

Starting point is 01:28:07 There's one search that gets you the allowance. The other search is just a vehicle that is able to, like, physically do what the vehicle has to do, right? Um, yes. Okay. So my guess is if you did a search on getting a vehicle that just does what it needs to do, that's going to be cheaper than a vehicle that would get you the allowance. Okay. But then I waived that stipend. You do. How much is the stipend? Uh, $2,500.

Starting point is 01:28:41 A month? Yes, sir. Okay. So that's a significant chunk of change. Yes, sir. But I want you to consider what they're doing. doing. They are asking, they're putting that much money on the table for a couple of things. A, they want fancy looking trucks to show up to job sites. They want to look like they are, this is, look at what our guys are driving, right? But they want you, the employee to carry 100% of the

Starting point is 01:29:12 risk because they can be out of pocket two months. They can be out of pocket five grand. You're sitting on a $50,000 or $60,000 note, and then they decide to go a different direction. And you're stuck. You see what I'm saying? Yeah, what happens if you leave the job or what happens if you're fired? What happens to the value of the truck at that point? The stipend stops, right? Yeah, and then in that certain point, I would just sell the vehicle.

Starting point is 01:29:38 Right, that you might be upside down on or that is lost value or that, right? So the onus becomes on you for all of this. There's a reason they're paying this much money. Nobody, no business is just like, you know what, let's just throw some money at some guys just for fun. They've done the actuarial work here to say, let's not have our own fleet and let's not manage our own fleet. Let's transfer all of that depreciation, all of the risk onto our employees, and we'll just write them a check form. Yeah, that's not good. So here's the thing.

Starting point is 01:30:08 I think you're going to do this anyway. And if you're going to do this, then, man, I would tell you, hey, I wouldn't do this. my own home, and I know that creates a cascade of challenges because you've gotten promoted into a job where they won't give you the tools to do the job they just promoted you to do. They want you to go buy them. And nobody making the money that they're paying you can actually afford this, so they're going to pay you to make a payment. That, to me, I just don't like that arrangement.

Starting point is 01:30:37 It makes me uncomfortable because it puts me and my family on the block and they don't have any skin in this game. But if you are going to do it, man, get the minimum threshold you can get through the door with. And that's what I was looking at. And would that not matter based on if, I mean, outside of our emergency fund, I have a sizable amount of money saved up. And if I throw that at it, I won't be upside down.

Starting point is 01:31:04 That's kind of the route I was thinking of going on this. And, I mean, this company has been around since the 60s. And everybody in this situation has had good luck with it. and the only reason they got rid of fleet vehicles is guys just weren't taken care of it and it was costing them a lot more money and now that guys are using their personal trucks they're taking care of them and they're lasting a lot longer.

Starting point is 01:31:26 I mean, I get their business deal. I mean, what they're doing makes sense to me. I get it. But I'm not on their team. I'm on your team. Right. And so it just feels like a big liability to be hanging on to. But yeah, I mean, you do you.

Starting point is 01:31:49 How much cash do you have saved? About $28,000. Okay. And how much in your emergency fund? We've got about $22,000 right now. Okay. Is there a possibility you could dwindle that sucker down to where it's just a few months and you go in and get pretty dang close to paying for this thing in cash?

Starting point is 01:32:16 Yeah. and use that $2,500. I have to get the wife on board. Just be militant about taking that $2,500 stipend plus any extra cash I'll have and refill in every cash bucket you got. Yes, and that's kind of what would be the plan. I mean, if I got to make double or triple payments a month to get it paid off, you know, in six months, that would 100% be the idea.

Starting point is 01:32:42 I mean, the last thing I want is debt. We just spent two years trying to get out of it. Yeah, totally. I'm trying to be smart about this, but also there's something I've been working for for the last 10 years, and I'd really hate to give it up because I don't want to go and buy a truck.

Starting point is 01:33:01 I get that, but at some point, anybody who says they have a principle, that principle is always going to get checked. Right. Right. So it's always going to get checked. If I was put in your situation and I didn't have another option, yada, yada, yada,

Starting point is 01:33:14 I would probably, Jay, tell me if I'm wrong, I would dwindle my cap. down to what I could manage and I'd keep his cushion in the bank and then I would be a lunatic about getting that sucker refilled. I'd really, I'd really push for a different, I'd try to get creative. I'd sit down and chat, GBT tonight and roll a bunch of different scenarios. Maybe they, maybe you ask for half and you cash flow half, really get creative and come to them with a lot of solutions. That shows that you care and you want to solve the problem. Dave Ramsey here, most people stay stuck with their money because

Starting point is 01:34:07 they're not paying attention to it. Most people are living paycheck to paycheck, stressed out, and broke, don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the Every Dollar Budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan. step by step. Look, most people hearing this will just keep hoping something changes, but not you.

Starting point is 01:34:43 You're ready to make change happen, starting now. Go download every dollar in the app store or Google Play and start for free today. Let's roll out to Grand Rapids, Michigan and talk to Sky. What up, Sky? How we doing? Hey. How can we help? Hi. So I'm about to graduate college, and I have a full-time job lined up, but I'm trying to decide whether or not I should live at home and commute the hour and a half both ways each day for a while to kind of help pay off debt or if I should

Starting point is 01:35:28 look for an apartment, you know, within like a 10-minute drive. A hour and a half each way? Yeah, I'm from a really rural area. So like, so we're saying three hours a day? Three hours a day? How much debt? Hold on. How much debt you got?

Starting point is 01:35:45 Neva. I'm going to graduate with about 15. thousand in loans. It's not like terrible. No, I'd get an apartment. If you told me you were going to be 50 or 100 grand, I might tell you three hours a day is the price you pay for a year, but man, 15 grand, you'll have that knocked out in no time, right? Okay. I mean, yeah, that's what I was kind of thinking, but I just didn't know if it was worth it to drive for a while to just kind of get it paid off as soon as possible.

Starting point is 01:36:11 Well, think about this, three hours times five. That's 15 hours. you can probably I think it's going to make you hate the work that you do It's going to hate your life It's just a bad You're graduating, you're entering into your field It's a bad entrance into your field Because you'll start to have resentment

Starting point is 01:36:31 Over showing up to work every single day Okay I think Have you run it out and said Okay if I do this, how long will it take me? Not really because it's not I'm not going to like it's not great pay What's the pay for the job?

Starting point is 01:36:49 So it's $19.45 an hour before taxes full-time. It is in the events industry, so there will probably be some overtime associated with that. You would have to make a commitment to yourself. I'm going to work. Let's change it and say it this way. The next two years of your life should be pretty tough. Okay. Pretty miserable.

Starting point is 01:37:15 You can share that, you can have that misery in the car, driving back and forth to your mom and dad's house, still having to abide by their curfew and not being able to date anyone because you all live out on a farm. Or it could be pretty miserable, pretty tough, grinding, but you're taking every possible job in your industry and in your space and getting to know people and shake hands and hang out with people your age and getting as much exposure as you possibly can because you're going to, to get this debt paid off in 12 months or less. And then you're going to spend the next year grinding and getting an emergency fund. Right. So if you think of it that way, you're going to spend this time working and you're going to spend this time like grinding.

Starting point is 01:37:59 I would rather do that and look up and be 24, 25 years old, have put two or three long hour days, two or three years worth of long hour days towards the job industry I want to be a part of than driving back and forth to my parents. Yes. Yes. Yes. Yes. 100%. Because at least if you move closer to work when you're done with work, you can easily get to your next job because it's right there in town. Right. Oh, I didn't think about that. You know what I'm saying? You can do more actual work because you're in town. So it's like, oh, okay, get off my job here. Now I'm going to head over to the place where I bartend or I'm going to head over to, you know, where I work at Nike Town or whatever it is that you do on the side.

Starting point is 01:38:42 Whereas if you're out in the boonies, you've wasted three hours a day. You can't get back. You can't get it back. And there's nothing else out there to do. Yeah. True. Except shoot rabbits. What do you guys do out there? Something like that. Something like that. Yeah, so that's what we would do.

Starting point is 01:39:01 Congratulations on graduating and get that debt paid off ASAP. And just know, if you're 21 and you're graduating, two years, that's not enough. The next five, seven, eight years of your life, just know I'm going to get after it. Jay, the life I live right now is based on, I was pretty unhealthy, but working like a mad person. in my 20s. Yeah. Yeah. Yep.

Starting point is 01:39:28 Saying yes to every opportunity, every speaking engagement, every degree opportunity, every, all of those skills I learned along the way give me the life I have now. The 20s are for scratching and clawing. For everything. That is the definition of that decade is you scratch, you claw, you're tired, you work some more, you fail a little bit, you work some more. Like that is the 20s. Like looking back.

Starting point is 01:39:52 Arthur Brooks, the great Arthur Brooks, he said this recently, our culture has full. and we sew over index for our 20s and 30s, and we under indexed for our 40s, 50, 60, 70s, and 80s, and 90s. And the fun I thought I would be having in my 20s, dude, now that I can have that kind of fun in my 40s, because you got some money? I got money. I got time. Yeah. I got my own car and it starts every time I turn it on, right?

Starting point is 01:40:16 Listen, I know. I know. I have an amazing wife. Like, I never would have dreamed it was this awesome. I couldn't agree more. I literally had this conversation. with Sam Warshaw, I was like, man, everybody thinks like 20s are like the glory years or like back when I was younger, like, glory days. And I'm like, no. In your 20s, first off, half of us aren't even married yet. So we're out here just trying to survive that whole situation. And then you got no money. You don't have any respect on your name in your career. Like, it's just when I look back on it, I go, actually the 20s are kind of trash. In my 40s, I'm going to the same shows in the same mosh pits. I'm just able to get. You can afford the good tickets. I get the T-shirt too. Yeah. Yeah, I don't have to sneak onto the floor.

Starting point is 01:40:59 I can pay for the floor seats now. Oh, man. I mean, that truer words have never been spoken, and it's so true. Just know it's necessary. Like, 20s are building years, and it's so necessary to just let it, like, let the build begin. Grind it, grind it, grind it. Embrace it for what it is. All right, let's go out to Brandon in Pittsburgh.

Starting point is 01:41:18 Let's see here. Where are we at? Right here. Brandon, what's up? Hi. So I have kind of a big, big thing. let it rip all right

Starting point is 01:41:29 so I'm a truck driver I make about 3200 biweekly my wife works at a store she's a manager there she gets about 1,700 by weekly I have a mortgage payment

Starting point is 01:41:40 about 1,200 bucks per month and a pickup truck payment for 800 a month my wife covers utilities she has her own car payment for 700 a month I owe about 35,000 for my car

Starting point is 01:41:50 she owes 41,000 I have 120,000 on the house and a credit card debt of $3,600 and a wedding loan, that's $15,000. And I'm slowly paying off my credit card debt and I'd like to start paying off a wedding loan faster to and building the savings. So now my question is, I have no clue how to build wealth.

Starting point is 01:42:10 I am numerically illiterate, don't know where to start. Came to the right place, brother. You did. Perfect. And you had your numbers listed down and read. I couldn't even keep up writing it all fast enough. All I heard is you got $1,500 in car payments between you and your life. Yeah, that's a lot.

Starting point is 01:42:25 Yes. It's a lot. And for her, yeah, I'd commute back and forth to work. You can do that on a go-pad, dude. Like, not really, but you know what I mean? You don't need a- Those are expensive. Even used car pay. Like, my first car when I was in high school was $1,700, it's like $6,000 now, which I could go ahead and trade in my truck for one. Yes, we're doing that. I don't need a truck either. Let me get back. Let me get back to the question at hand, because we don't have a lot of time. And I want to answer your question, the crux of your question, the crux of your

Starting point is 01:42:56 question first because this is going to inform everything I say next. You asked, I don't know the first thing about building wealth. And the first thing about building wealth is you've got to get control of your income. Dave Ramsey would say your biggest wealth building tool is your income. And you've got a decent one. I think combined you guys are at like $9,200 a month. Is that about right? About right, yep. Okay. That's a decent income. The problem is it's going out the door. You said it yourself to debt payments every single month, whether it be the pickup truck, the car, the wedding loan, the credit cards. So the way we get our income back in our hands and back in our control is we have to, have to have to pay off the debt. And that's the part that nobody likes to do.

Starting point is 01:43:37 Over here we teach a series of seven baby steps. And the second baby step, baby step two, is the one that's about paying off debt and everybody hates it because it's, it requires, you know, discipline, it takes a while, all of that. But I really, really want you to embrace it because it's the only way to get free. Before we get off the line, we're going to send you every dollar. we're going to send you the book The Total Money Makeover, and we're going to set you up with Financial Peace University. All of those things walk you through our seven baby steps system. It's a plan for your life. And it has to do with you taking these debts, lining them up smallest to largest, paying minimum payments on all of them, but throwing all of your extra money every single month at that smallest debt. That's the main part. That's the first thing that you really have to get your head around. But all the resources that we sent you are going to teach you how to budget so that you can do that. It's going to teach you how to say no to debt because we don't do debt anymore. All of this is going to set you up for that one, my brother.

Starting point is 01:44:31 I can't wait. And chances are other cars are going to go. Hang on the line. We'll get you hooked up. 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 help anytime with Ask Ramsey. Ask your money question and get answers.

Starting point is 01:45:14 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. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's ramsysolutions.com. The right insurance acts as a shield around your loved ones and your wallet if disaster strikes.

Starting point is 01:45:53 Our free insurance coverage checkup helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps. Go to Ramsey Solutions.com slash checkup to take the coverage checkup and find out if you have the protection you need. Let's go out to New York and talk to April. What line is April on? April is online for. What's up, April? Hi. I'm 65, well, I'll be 65 years old this year. And I'm, and I'll be 65 years old this year. and I didn't start working until I was about 63. I am wondering, will I be able to catch up to be able to retire? And what things can I do to build retirement money faster?

Starting point is 01:46:39 Well, thanks for calling. Tell me about your life. Well, I work 40-hour week. I make about, well, a little over $22 an hour. I'm debt-free. I own everything, my home, my vehicles. I pay cash for everything. Why did you start working at 63?

Starting point is 01:47:02 Well, I've been a housewife pretty much since I was 16 years old. And through a series of marriages and divorces, I haven't been the last husband. I wasn't with long enough to be able to get any part of his retirement. So being divorced, I had to figure out on my own. So I've got about 85,000 that I have saved up over the course of time. And most of that, I'd say, about 53,000 is in savings. I'm not sure if I should just be leaving it in my savings or if I should be trying to put it somewhere.

Starting point is 01:47:50 I know I get these Social Security statements every so many months a year. And I'm looking at, you know, maybe $600 a month if I'm lucky. Right. Okay. So of the $85,000, you said some of it's separated. Where's the other portion of it? The rest of it's in the checking account. Okay. I just leave 53 alone in the savings.

Starting point is 01:48:17 What I would do is I'd probably put six months of expenses in a high-yield savings account. Could we say maybe 20, 25,000 and put that in a high-yield savings? And when you say high-yield savings, what does that exactly mean? It's a form of a savings account that has a slightly higher compounding interest rate, just a slightly higher interest rate. That's it. Okay, because my bank is 5%. I'm not sure. Oh, 5%. That's good. That's great.

Starting point is 01:48:46 You're fine. Do a sub-ersault and leave your money there. Yeah, don't move it. But I would move the other 50,000, and I would invest that. Okay. And I would get with a smart vester pro, which will give you the information on that. You can go on Ramsey Solutions.com, or you can go and ask Ramsey and say, I need a smart vester pro. And that person's going to sit down with you, and they're going to help you and teach you about the best ways to invest your money. I did start a 401k in October of 25. Great. And so there's only about 2,400 in that.

Starting point is 01:49:22 I mean, I don't know if I'm supposed to be, you know, I know you're supposed to do something with it at 73 years old, but I was really hoping not to have to work that long. Well, that's true, but you may have to. Yeah, you will be. So you can invest the 50,000 into a Roth IRA over time, and you can put some of it in a brokerage account. You can put some of it. So the SmartVestor Pro is going to help you decide all the best places to invest that money. But I want that working for you in the market. I don't want it just sitting in an account because if you invest it, hopefully you're going to get somewhere between a 10 to 11 percent return is what we're hoping for.

Starting point is 01:49:57 So that's thing one. Thing two is what are you bringing home every month around 3,500? In that neighborhood, yes. Okay. And of that money, how much would you say is extra? We would call it margin. Uh, should be quite a bit because you have no debt. Well, anything that I have extra, I've, I've been putting into the 401k.

Starting point is 01:50:23 Yes, that's good. That's good. Yeah, I've already got it taken out at work. But I want to know beyond that, how much, how much margin do you have? And again, margin is extra. So when your check comes home, how much is left that you just say, okay, what am I going to do with this money? I get to choose. Um, probably somewhere around $1,000. 1500 to 1,000. Okay. So I would challenge you that much of that money needs to be invested.

Starting point is 01:50:49 Almost all of it. Okay. Because I don't know what percentage you're investing now, do you? What percentage of your gross income? I think it's 15%. Okay. Since your home is paid off, you get to invest as much as you want. Oh, I don't know that.

Starting point is 01:51:05 Yeah, because you don't have anything else to pay for. So if I were you, I'd be taking that $1,500, and I'd be looking at it going, okay, let's you know, aside from me, maybe going to the movies every once in a while, or, you know, maybe I go to dinner with a friend or whatever, I'd be investing much of that $1,500 as much as you can. Okay. Because that's going to be the thing that breaks you free in all of this. All right. That sounds good.

Starting point is 01:51:31 In April, I'm telling you this, and I would tell my mom, my mom's older than you, but I would tell her this exact thing if she woke up in your situation in 63. every penny is going to count when it comes to getting money into savings. All right. Okay. Yes, I have a scarcity mindset, so I don't spend any more than I have to. And I know I'm not anywhere near where I should be, though, because of the late start.

Starting point is 01:51:57 Right. And I would make peace with, I mean, chances are, I mean, the chances high you'll be working well past 70. Okay. Okay. Because let me do some quick math for you. So let's just pretend you're 65 now. Let's say we do this until age 75. Do you think you can work till 75?

Starting point is 01:52:18 Sure. I mean, what's your health? Why not? It depends on the nature of what you do and what your health is, right? Oh, I work very hard. I'm running back and forth and running up and downstairs. Well, you tell me, what do you think? I'm a realistic time frame that you would be working because I want to play.

Starting point is 01:52:38 these numbers in for you. 72. Okay, well, we'll say, okay, let's go with 72. 72, does that sound good? Okay, so let's say 65 to 72. Let's say you put $2,000. You contribute that every single month. That is going to leave you with $250,000.

Starting point is 01:52:58 All right. Okay, so that gives you a little something. Yeah, it does. But then the next thing I'm wondering about is once you are down to 600 or whatever your social security will allow. If you find that, it's really, really tight for you. You need to be looking at, number one, I want you to call us back. But number two, remember, you've got, I'm guessing, a pretty decent home that you're sitting on. What's your home worth? Probably about 185 on the low side. 185. Where do you live? Oh, you're in New York. In New York City, you have $185,000 house.

Starting point is 01:53:35 How did that happen? It's essentially something. from New York. But still, you can't sneeze in New York for $180 grand, can you? It's worth $185. Not with the gas prices they have now. All right. Well, you foiled my plan. I was going to say, if you have some decent value in your home, you might be able to sell that and get something smaller that you pay cash for. But I don't know if you can get much smaller than $185. No, you've kind of won the housing lottery these days with $185. Well, actually, my plan is to sell this house. hopefully moved to Tennessee, but I got to crunch the numbers.

Starting point is 01:54:13 Well, we don't have a state income tax. I don't know what you're going to do with all that extra money that New York takes out of your paycheck. You'll have to figure out what to do with that. But yeah, I mean, I don't know where you'd find a place to live for $180,000 in Nashville in Tennessee. I think your best bet is doing your best to save any and every bit of money that you can. And honestly, while you feel good, if you've got the energy to run up and down steps

Starting point is 01:54:37 and do all this, I'd be looking for even more work that I can pick up. All right. Because the more you work... Maybe I can get some overtime. Yep. The more you work, the better this situation bodes for you. Or get a job sitting down, like at one of the beautiful hotels in New York or doing anything, right? But yeah, you're going to have a busy, busy, busy next 10 to 15 years.

Starting point is 01:54:59 But we believe in you. And thanks for giving us a call and thanks for being on top of things, man, as you get going. Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone.

Starting point is 01:55:50 Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsysolutions.com slash real estate. That's ramesysolutions.com slash real estate.

Starting point is 01:56:29 Today's scripture of the day is Isaiah 552. Why do you spend money for what is not bread and your wages for what does not satisfy? Listen carefully to me and eat what is good and let your soul delight itself in abundance. Zig Ziglar says money isn't the most important thing in life, but it's reasonably close to oxygen on the got-a-have-it scale. he's not wrong neither are wrong they're both right to st louis missouri and talk to austin what's up austin

Starting point is 01:57:04 hey how you guys doing we're doing good brother what's up well first off thank you guys for taking my call um so something that's done on my mind lately uh i recently you know last year i started listening to guys a show and it really opened my eyes up to a lot of things and i've been kind of irresponsible with my money and uh now i'm 50 000 kind of a debt um well also i'm maxing up my 401k and that's actually what i called you guys for my uncle for the past two years i've been dumping my money into a 2065 target retirement fund because i never knew what to do but he

Starting point is 01:57:44 told me i need to be investing in either a vanguard 500 s mp or a fidelity 500 smp and he said don't touch that until you're 55 and you know that's all fine and dandy but i just didn't want to get to 55 and then be like oh where did all my money go and you know i just i want to set myself up for the best so i didn't know what you guys had to say about that i was a little confused when you said that when you got to 55 you'd be wondering where your money went it'd be sitting in the investment that you put it in well but yeah i just don't i know he told me i never knew anything about the stock market or anything but he says i just be investing into the stock market So you're saying you're just doing what he said?

Starting point is 01:58:27 Yes. You don't know really what you're invested in. Gotcha. Okay. I'm glad you called, brother. How much is in there right now? Have you looked at it? So when I started doing it about a month ago,

Starting point is 01:58:38 I had $12,000 in that target tax fund. Well, in this past month, I looked and it's jumped about $3,500. So $15.5 right now. Can I tell you what my mutual fund, holding is right now? Yes. I have no idea. I'm going to tell you why.

Starting point is 01:59:00 I do look at it once a year, but I don't know what it is right now. You know why? Because I'm not ever going to pull it out until it's time for me to retire. Okay. And if you watch this account like a stock ticker,

Starting point is 01:59:13 you're going to make yourself nuts. Okay? Some of my parents tell me all the time. You're going to make yourself... I like to watch my money grow. I know, but you're not going to like it when the... economy has a downturn and there's a hundred percent chance that will have downturns over the course

Starting point is 01:59:28 of your life between now and it'll make you insane it'll make you feel it'll make you feel um powerful when it shouldn't it'll make you feel secure when it shouldn't and it will make you feel devastated when it shouldn't and so when you put money in a retirement account the goal is to not take it out until it's time to retire and so watching it every you're 23 years old brother your rods and cones are going to fall out of your eyes if you watch it that close over the next 30 years. Okay? And so I do check it. I do pay attention to it.

Starting point is 02:00:02 I have a smart vestor pro that I work with, but, man, I just don't watch it on a week by week, month by month basis because I know I'm an anxious guy. I know I can get really up when things are up and really down when things are down. And you set it on a roller coaster, man. It's going to go up and it's go down. And if the last hundred years is any indication, it will eventually tick and and move its way up, but let it do its thing, okay? Okay, and one last thing. Hold on, Jay's going to walk you through some more details here.

Starting point is 02:00:34 Okay, great. I just want to make sure, and this is something I would check on because this is, we might need this for your debt. Just double check and see where it's housed. If it's housed inside of a Roth IRA, if it's housed inside of anything that is a retirement account, maybe a traditional IRA, you can't touch it. But if it's just sitting there in a brokerage account,

Starting point is 02:00:53 you can. And we would use it for debt because at that point it's, there's not going to be a penalty if you were to remove it. But just double check that because if it's just sitting there in a brokerage account, that's great. That's money that's up for grabs. And you can cash out to pay off this $50,000 a hole you're in. Yeah, exactly.

Starting point is 02:01:12 So you've got $50,000 in debt. What kind of debt is that? Well, $5,000 of it is in credit cards because I was, like I said, I was stupid with my money. But about a week before I started listening to you guys' show, I went out and bought a brand new truck. Okay. That's way stupider than the credit cards. And that's the 45?

Starting point is 02:01:33 Yeah, it's 45. What's it worth? Well, brand new off the lot. Right now, it's probably worth around 30. No, no, no. If you turned around to sell your car today, you'd only get 30 for it? That's just what Kelly Blue Book says online. What about private sale?

Starting point is 02:01:52 For private sale? I could probably get around 37 for it. Okay, 37. So your goal is to figure out, like, how are we going to get another $8,000 to clear this debt? And not only that, but how can I get another, I don't know, 10,000 or another 8,000, that I'm going to get kind of like a junker truck that I'm going to drive around for a little while, and it's going to remind me that I'm never going to go into debt again because it sucks to drive an $8,000 truck. You know what I'm saying?

Starting point is 02:02:24 So what I would do if I were in your shoes, because what I did here, the $8,000 clears you from being upside down. That way you can sell a car, get the title, transfer, all of that. And then another $8,000 gets you in a ride. That's $16,000. $16,000 is a lot better than paying off $45,000. Am I right? Oh, yeah. Okay.

Starting point is 02:02:45 So I'd go down to the credit union. I'd go down to the bank or, you know, whatever you can do to get this money and get it on the best terms possible. And that becomes your new payment that you're paying off, the $16,000 loan instead of the $45,000 car. And that for anybody who's listening to this call right now, if you're a person who finds yourself upside down, that's how you get out of it. And you might think, I can't believe you would tell him to go pick up debt, but we're lowering the debt. We're going down in payment. So that's thing one. And in the meantime, while you're negotiating that transaction and you're finding a buyer and you're getting that personal loan, the next thing I want you to do is work so hard on paying off this $5,000 in credit.

Starting point is 02:03:23 card debt. And you're going to do that by picking up extra jobs and side hustling, yes? Yes, ma'am. Okay. So that's like the nuts and bolts of how we're going to pay off this debt. But I want to run it back because two things that I want to cover with you that are tantamount to this entire thing taking place and actually working is you've got to do two things today. And if you don't do these two things, nothing that I tell you is going to work, okay? Okay. So if you have something to write with, write this down. Number one, today. you have to go into the nearest mirror, windex it off so you can see yourself very clearly in it, and look in your own eyes and tell yourself, I'm never borrowing money again.

Starting point is 02:04:06 I'm not a person who borrows money. Yeah? I can do that. Because you can't solve a problem while simultaneously creating it. So if you keep paying off debt and then borrowing more debt, you're just going to be a dog chasing its tail. So you look at yourself, I'm not borrowing money. The second thing you do today, you've got to download a budget, we'll give you, every dollar, which is the best budgeting app out there.

Starting point is 02:04:27 It's not just a budgeting app. It also has our plan for how you're going to do all this. You've got to download every dollar, and that is going to become your new BFF in your pocket, because it's on your phone. Okay. That's it. And if you can do those two things,

Starting point is 02:04:42 you're going to be able to walk out the rest of this, no problem. Do you have the courage to sell your truck and just get done with this thing? Yes. I didn't know if I should pay it down, to where, you know, I'm not upside down and then get rid of it, or should I just get rid of it now? I think you should get rid of it now because it's going to free up the money that you need to quickly pay off this credit card. And I think every day that you wait, it's going to go down in value.

Starting point is 02:05:11 Yeah, it's going to depreciate. Do you know what that means? Yeah, it means losing value. Yeah, it loses value every minute you drive it. And also, I think, I don't know, but I feel like the summertime could be a nice time to buy a truck. I don't know, maybe. You know, you put it out. I'm just saying if you're selling something private sale, it's a lot nicer to roll up in the summertime when the weather's nice versus in the winter when it's covered in snow and it's

Starting point is 02:05:33 dirty from the ice and all that stuff. I just made that up, but I'm just saying that could be good. But let me go back and teach you a little bit about the budget. You need the budget. The budget is a plan for your money. It's where you're going to fill in your income and your expenses. And you're going to tell every dollar what to do. That's the whole point. So if you make $5,000 a month, you're going to assign $5,000 an assignment. That's it for the Ramsey show today. Thanks for being with us. 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 Living Paycheck to Paycheck—Start Living With Options

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