The Ramsey Show - The Key to Transformation Is Admitting You Have a Problem

Episode Date: February 11, 2025

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan Jade Warshaw & Ken Coleman answer your questions and discuss: "I'm scared my impulse buying will put my family in jeopardy," "Should I wait to pay off my credit card debt?" "Should I take out a HELOC and invest those funds?" "How do I get out of a $33k car loan?" "My mother-in-law stole $13k from us," "Do single people have a shot at purchasing a house?" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY ⛨ Find top Health Insurance Plans at Health Trust Financial 💸 To find out more about student loan refinancing, check out Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📱Watch the full episode for free in the Ramsey Network app. 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💼 Connect with a RamseyTrusted tax pro for help with payroll and more 💵 Start your free budget today. Download the EveryDollar app! 📙 Check out George Kamel's Breaking Free From Broke today. 🪑 Check out Front Row Seat with Ken Coleman! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

This is the Ramsey Show America. It's where we help you win with your money, win in your profession and win with your relationships. Alongside the fabulous Jade Warshaw. I'm Ken Coleman phone number to jump in. Triple eight, eight, two, five, five, two, two, five, triple eight, eight, two, five, five, two, two, five. You ready to roll? Well, that's a rumble. Let's go.

Eli is joining us in Dallas, Texas. Eli, how can we help? How are you doing guys? Thank you for taking my call. Um, man, I'm not even quite sure where to begin, but I seem to have a ginormous problem handling my finances. I am 27 years old with a wife and two kids and I have one on the way in July

and I'm just kind of like up to my throat in stress on trying to figure out what I got to do to stay the course in trying to be debt free. I've been a part of the show for about six months now. I even bought Dave Ramsey's The Total Money Makeover. And everything was going well. I had Baby Steps 1 working into 2. I had everything listed from smallest to largest paying the smallest stuff off and then right around the holidays I kind of just fell off a cliff started buying things I didn't need and just recently I got into a $2,100 purchase of headphones. What? What do you mean you got into it? I did not take very much convincing to be truthfully honest. I love music and stuff like that so it didn't take much convincing for me to buy them. I was

leading emotionally rather than thinking rationally and that's when I kind of realized I've got a problem and I just I cannot I just I can't get out of it. Okay. So let me ask a quick question Eli on this because I love how vulnerable you're being and and I think you've nailed it. I think you've diagnosed what's going on that you can't do this on your own and so we're gonna walk with you on this call but before we we dive in deeper, I'm just curious, if you'd be willing to share from your gut, what do you think is the emotion that's driving all these impulse purchases for you? What do you think it is? How would you describe it? I believe desire was probably the best

thing I can come up with. Just the sheer desire of wanting to get, you know, anything that I've always wanted stuff. I didn't get when I was growing up. Stop. There it is. So now we're going to go deeper for a second. Okay.

You said desire, but it's actually something else. What do you think it is based on the fact that you didn't have it when you were a kid and now you want it? What is the deeper emotion? It's deeper than desire. What's driving the desire to get stuff? What do you think? I don't know. Yeah you do. You just took us there. Go back to your childhood. What was your childhood like? Childhood came from a family of divorced parents. Thrusted very quickly into a different study with my

stepfather and just money was always tight going up. Just not having enough money. Didn't have much, did you? No, no, no. Very strict upbringing, nothing wrong with that of course. It wasn't until I went to Austin for culinary arts for college that I realized that I was free and I can make any and all decisions and I've kind of been carrying that philosophy for the better part of the last 10 years. But can I tell you something, Eli?

You're free philosophically, you're not free emotionally. You're still that little boy who was afraid he was never gonna get anything nice like all of his other friends. And so now you're an adult and you're afraid if you don't buy these things, that you are that little boy who didn't have anything. And I'm telling you, there's something there.

Now, again, I don't wanna make the whole call about this, Jade, but I just felt like when somebody presents as, I can't do anything about this, I think that's right. By the way, if you ever had a friend who's an alcoholic or if you go through the 12 steps or you're familiar with the 12 steps, the key to transformation is to get to a point where you say, I can't do this on my own. I need help. And he presented that way and I think that's great. But I also wanted him to see When there's an impulse

the impulse is Just the reaction and you've got a deep and go What is the underlying issue that is making it so easy for him to be talked into 2100 on headphones when he's broke? Absolutely, that's real and Eli I'm not saying that to put shame on you. I'm actually hoping to help you see something because I think you can recover from this, but not until you deal with the emotion that is driving the impulse. I agree with Ken.

I agree with Ken 100%. Matter of fact, if I were you, I'd probably jump into some counseling and get to the bottom of that. Just because Ken is so right. What we've experienced in our past 100% informs I'd probably jump into some counseling and get to the bottom of that. Just because Ken is so right. What we've experienced in our past 100% informs how we view money, how we spend our money,

what we think we're entitled to with our money, what makes us feel uncomfortable with our money, all of that is driven by what our relationships have been with money, whether it's from childhood, with our ex-wife, our ex-spouse, whatever it was, right? That all plays into it. The cute answer that I would give you for this moment, because I'm, you know, I wish I were more of a therapist

in that area, but I'm not. But the cute answer is you've gotta get to the point where you're sacrificing, you're not sacrificing what you want most for what you want right now. Because what you want right now is the headphones, what I want right now is New Jordans, what I want, right? There's this thing that we were like, I want this now. But what you want most is what you started out

on this journey, which is to find financial peace for your family, right? And so it's in those moments that you've got to kind of tie back to, okay, why did I start this journey? What is it that I'm truly trying to accomplish? and if I can just keep on the straight and narrow there will become a time Where you can buy the the headphones or you can buy some of the things that you want to do. So That's the cute answer The truth is you're really struggling to do that right now in this moment

Yeah, but I thought you're setting him up beautifully Eli Jay just nailed this I mean you have to replace the $2,100 headphones with what do you want your life to look like 20 years from now? That's, she's spot on. What do you want for your kids? And so all of a sudden, you start to go, ooh, I want that, and I really want that. It's the trade-off.

So how much debt do you have? Me, personally, I have about $24,000 in total debt, about $2,500 in credit cards, $7,000 is in purchase finances, $4,000 to $5,000 in student loan, and then the rest is personal loans. So where did the $2,100 headphones go? Did they go on a credit card? They went through a firm. A firm? Oh, that's like buy now pay later.

Buy now pay later, yes, correct, like Karna and stuff like that. Can you sell those? Probably more than likely so. That ain't my world. I mean you can sell anything. You sell anything. I should have said can you sell those and get a good chunk or do they devalue quickly?

If they're in good shape I'm sure you could sell them. You can sell them on Marketplace or put them somewhere. I'd start there. Yeah. I'd get rid of those. Let's start selling all the stuff you've bought that you can still sell. Okay. I got you.

I do believe, I'd go back. I do believe I'd go back. I do believe I have a 30-day warranty of some sort where I can exchange them or return them for a refund, but I'd have to double-check on that just to make sure that is accurate. And let me hit you with something else, Eli. I've heard Dr. John Delaney say this, and it's so true. Your stuff talks to you. Your stuff, it does. It talks to you.

And I bet you when you walk by it, because you've said what it is that you truly want, let your stuff talk to you and it talk you out of doing this again. Because I bet when you walk by those headphones they're like, you said you were gonna make things right with your family. Right? When you walk by those purses, they're telling you everything that you said you were gonna do. So by you getting rid of them, selling them off, and let it be a reminder of what you said you wanted to do and start surrounding yourself with things

that are telling you the right thing. Good stuff, thanks for the call, Eli. This is The Ramsey Show. Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid listening to the show on a battery-powered radio. All of your data data collected by every company you've ever done business with lives online. Your bank,

your doctor's office, retailers, the apps on your phone, the gas station where you have loyalty rewards, they all store your info online making them ripe for a cyber attack or data breach. That's why I've been telling people for almost 25 years they need an ID theft protection plan and the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team. Visit zander.com or call 800-356-4282. The Ramsey Show continues. I'm Ken Coleman. Jade Warshaw is with me triple eight eight two five five two two five is the phone number triple eight eight two five

two two five syracuse new york is where we go next kelly is there kelly how can we help hi thank you for taking my call sure what's going on today is i'm trying to figure out what to do with my credit card debt um I have no other debt other than credit card debt. I fell on hard times with work last year, and I've been having a tough time actually landing a job since then. Still working at it, but it's getting harder

in the field that I'm in. And I have some business credit cards and some personal credit cards. My business credit cards have been charged off as of last month. My personal credit cards have been current. I've been able to maintain those with the little bit of savings that I've had left with the hopes that I was going to get a job soon, but it hasn't happened yet. So I'm wondering what to do with my personal credit as it's getting harder to pay those balances

and the minimum payment. How much is the personal credit card debt? The personal credit card debt is 36,000. Okay. And the business credit cards are 23,000. What kind of business was it? It's an IT consulting business. Okay. And are you still doing that? Or you've moved on? I'm still doing it because that's what I've been doing for many years. And it's really trying to find something where I can make the money that I was making before. Okay.

So I laid off. So how long were you laid off? Because I mean, this almost $60,000 of credit card debt. That's nothing to sneeze at. Like when you say fell on hard times, I wanna understand more about that and how long that period lasted so that I can understand more about your habits

and your mindset around money and debt. And also tell us how much you were making. Okay, well, my credit card debt racked up really over just maintaining regular monthly bills, which aren't really high. They are roughly about $1,000 per month. And that's it. Yeah, but how, answer Jade's question.

How long? Cause that means, if it was only $1,000, that means we spent 36 months. Yeah, it's been almost a year. Almost a year. Okay. So what, okay, so what this is- Real quick, how much were you making beforehand?

Beforehand, I was making about 10,000 a month. So you make about 120,000? Go ahead. I was gonna say it's not 120,000 because I'm the consultant, so it's not consistent throughout the year. Okay, how many months of the year do you make? I mean, if you say to me,

hey, I make $120,000 a year, yeah, it can fluctuate, but you still made $120,000 in the year. Well, it can go from anywhere from, you can be unemployed with what I do anywhere from three to six months. If you get a year, then that's nice. Right, right. But it's anywhere from three to six months.

Right, I hear what you're saying, but it's still $120,000. So what that tells me is on the windfall months, the months that you just had made bank, instead of saying, okay, I've got to be smart and put this aside and this is what I'm living off of for the next couple of months, that tells me that that money went somewhere.

Where did it go? Because you also told me that it only takes $1,000 to make your household run, which I do have questions about that. But do you see, I'm not trying to take you to task, but there's holes in the story and I need to understand it so that I can help you best because what's coming off,

the way it's coming off is that you're not working much. That's the way it's coming off. And I wanna find out why that is because even if it's not an IT, there's plenty of opportunities, and Ken can get into that, that we could do throughout the year. And so I really wanna highlight that behavior for you

so that you never do that again. Does that make sense? It's not for me to like make you feel bad. I just want you to know, hey, there's a moment, it's like you gotta know when to hold them and when to fold them. Like there's a moment that you get to a threshold that you go, I can't keep doing this.

I gotta go work. I gotta get out here and make any kind of money, right? And something happened that you didn't make that transition. Fair enough? Well, I did try. And that was another part of it is that it may sound like I'm not trying. I tried to go to restaurants and see if someone would hire me for waitressing, hosting, different things. And why didn't they? What do you think the reason was? I mean, I don't wanna really, I mean, I don't know what the reason is, honestly.

I don't know. I know why I can't get a job in my field, but the reason that I can't get a regular job doing something outside of what I do, I don't know. I mean, I would think anyone can get hired in a restaurant, but apparently not. I mean, but was it just the restaurant or did you go to Walgreens and Target and everywhere? Did you do DoorDash?

Did you do Uber? Did you do Instacart? And they all said no. I didn't do anything that was not going to be able to pay my bills. Not really. Right. But you hold because here's my point. Nothing was paying your bills.

So isn't something better than nothing? That's the point I'm trying to get to. I did have unemployment. That's how I was able to pay my rent. My rent was 2,500 a month. So I was paying. No, that's not true because you went into, you had unemployment, but it didn't cover the cost.

You still had costs because you went into credit card debt. So that's why I'm saying, wouldn't it help to have done some of these other things as well so that you would not have at least had to go into credit card debt? So I'm just trying to play this back because if you can't look back on this and see,

here's where it all went bad. If you can't see that, it will be impossible to fix this. That's right. So Kelly, I'm not piling on, but I'm gonna jump in here. How many times did you apply for a waitressing position? Can you repeat that? How many times I applied for? A waitressing position at a restaurant.

I know you didn't get the one. How many different restaurants did you apply to? I went to like five different restaurants. I went to another, I went to a bar, I went to lounges to try and apply for work. Right, so here's a deal. So here's what's going on. I was like, what was that? Apparently, I don't know. I opened my computer and typed something in. Here's the deal. There could be a myriad of reasons as to why they hired someone else for those roles, but I think what happened was is that you were like, well, this is just a bunch of no's and I can't get hired.

So I'm going to go try to do my own thing on my own. And you realize how hard that is. And it's put you in a deep hole. I think what we're trying to tell you is, is that you can't take no for an answer. In other words, it's the restaurant, multiple restaurants, a bar. They said no. Fine. You pivot.

You go to big box stores where they are hiring. You keep going. You don't accept, well, I didn't get it here. I didn't get it here, so I'm not going to get it anywhere else. There are jobs that you can get that do way better than unemployment, but you have to keep showing up and you can't just do way better than unemployment, but you have to keep showing up and you can't just go in and apply. You gotta talk to everybody that you know

on social media, in person. You find a job doing whatever it takes to get you on a bridge so that you didn't have to rely on these credit cards. Now, you've gotta go get work just to dig out of this. And I mean like two or three jobs to dig out of this. Because Jade, as you said, this $60,000 is no joke. It's a lot of credit card.

And let's talk about that a minute, because there's another part of this, Kelly, that when you've been making $10,000 a month, right? Are you single? You're single, right? She's done. Okay, as a single woman, you've been, that's significant. a month, right? Are you single? You're single, right? She's done. Okay, as a single woman, you've been, that's significant.

Like that's a lot of money. So to go from that, it almost feels like, well, if I'm not making, it's like an all or nothing thing, right? You feel like if I'm not making that, then what's the point? And I think what Ken and I are getting at is that's, I get emotionally, that's a very real feeling,

but we've got to go beyond that and say anything anything until the technology market opens up a little bit and then what are what are some uh adjacent jobs that you're qualified for maybe it's different than what you've been doing my point is you have to treat this like it's life or death because it is life or death for you financially right now that's where you called us you in bad shape, but it's very fixable if you can begin to get some money coming in the door, you change your budget. I mean, every dollar, I don't know

what you want to give her here. She needs some help. She needs some resources. What are you going to do? Yeah, before you leave, we'll make sure you're set up with every dollar, the premium version, because it's going to help you build that habit of budgeting, checking in with your money every single day,

and tracking your transactions. So we'll make sure you have that. I'm also going to give you build that habit of budgeting, checking in with your money every single day and tracking your transactions. So we'll make sure you have that. I'm also going to give you the total money makeover because I think being able to read that and read other people's stories, you'll be able to see yourself in those stories and you'll be able to pinpoint, like I said, what went wrong here. You'll be able to accept that. So you don't end up in this situation again, which is so important. Yeah. Get after it, Kelly.

Everything you got, you don't take no for an answer. A no is just not here. And just keep on moving forward. Alright, quick break. We'll be right back. This is the Ramsey Show. You shouldn't own a gun. You're not willing to shoot. In moments of self-defense, a Berna launcher lets you protect yourself in a non-lethal way. That's exactly why Berna launchers were created. Everyone from parents and nurses to pastors and even special forces veterans rely on Berna to protect themselves and their families.

I own several Bernas myself. They look like guns, but they're not. They shoot a 68 caliber round kinetic or chemical irritant projectile that can disable a threat from up to 60 feet away and they're powered by compressed co2 cartridges so they're classified with paintball and airsoft guns but they're more powerful than those for increased protection. Not to mention, Berna launchers are legal in all 50 states with no permits required, and because they're not firearms, they can be shipped directly to your door. Plus, Ramsey fans can get 10% off an exclusive bundle

which includes a Berna pistol, CO2 cartridges, and ammo. And other Berna products like safety alarms, defense sprays, and body armor are also 10% off for our listeners. Just go to Berna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave. Welcome back to the Ramsey Show alongside Jade Warshaw. I'm Ken Coleman. Glad you're with us. 888-825-5225. Hey, the best way to make the most of your money is by creating and then sticking to a monthly budget.

That's why we created Every Dollar. We believe it is the best budgeting tool on the planet. Help you plan spending, track expenses, save for what matters most to you, and it's easy. You can download every dollar for free in the App Store or Google Play, or click the link in our show notes if you're listening on YouTube or your favorite podcast platform.

Now, our last call, Jade and I were talking during the break, wanna revisit this quickly, because Jade got fired up. And listen, bottom line is, and love Kelly, want to help Kelly, but it is a difficult thing to lose one's job or to see an interruption. It just is.

Psychologically, we got to call that out. It's difficult. And so it can really throw us off. But there has got to be an awareness of that so that you develop a mindset that if you're in debt or you have been living paycheck to paycheck or both, which is usually the case, you can't allow that to keep you from continuing to bring in income. Yes.

And it's almost like we had a whiteboard. If we had a whiteboard in the studio, I would have wheeled it in here. Oh man. I would have given you a fresh marker. I would have gone Steve Kornacki on you in two seconds. Come on. So I'm looking ated in here. I would have given you a fresh marker. I would have gone Steve Kornacki on you in two seconds. So I'm looking at your notes here. You jotted down five things that you think people need to do or why they need to get back to do any work.

Set this up for us. I would call it five reasons to take any job before you get the job. I love that. Five reasons, right? And then let me caveat this real quick because this is not just Jade sitting here yapping, right? So during COVID, COVID 2020, the pandemic, everything shut down.

And for Sam and I, my husband, that was big for us because before I came to work here, I was in entertainment. Our whole business is in entertainment and cruise lines. That's right. And all that was shut down. Your whole world shut down. Okay, whole world. And you wanna talk about going

from a great income to zero, okay? So this is coming from my personal experience. I had to take a job that I hated temporarily. It was a call center job. So I get it, okay? I'm talking out of personal experience. Five reasons to take any job before you take the job. Number one, Ken, some money is better than any money.

I would agree with this. Right? It's a great point. It's better to, if you're, if you are the person who's like, well, I got to depend on credit cards. Well, if you bring in some money, I guess you won't have to use your credit cards as much. Right?

So some money is better than any money. Number two, Ken, Ken, your spouse needs to see who you are. Come on. who you are. Who are you gonna be in a hard time? When the rubber meets the road, are you gonna take any job, and are you gonna be the person who steps up? My husband stepped up, I stepped up,

and we needed to see that from each other because it was a hard time. Really good point. All right, your spouse. You know what happens? You don't feel very psychologically safe when you lose a job. So you need some emotional safety

is what you're talking about here. I like that. And if you see your spouse sitting around while you're trying to make things happen or vice versa, that's not gonna be good for the marriage. So your spouse and you need to see who you are. Number three is, well, you'll learn what you like and what you don't like.

Because I can tell you right now, I don't like a call center job. By the way, what was it? What was it? I mean, what? I don't know if I can say it on here. No, you don't have to say the brand, what kind of calls were you taking?

I was taking people who needed help with their taxes. Oh, okay, gotcha. So, tax advice, yeah. And did you have like a little cheat sheet of the basics you could help with and then you handed them off to somebody else? No, it was the tax software. So, if they had trouble with the tax software,

but you have to understand the taxes to be able to do that. So I learned a lot. Wow. So I learned, that's what I'm saying. You'll learn what you like, what you don't like. Okay, on a scale of one to 10, how soul sucking was it? I chose for it not to be soul sucking because like I said, it was 2020,

there was enough that was sucking out our souls. All right, let me read. So my point is, it was 2020, there was enough that was sucking out our souls. So my point is it was no, but that's you cause you're mentally tough. I'm saying how rough was it? It was hard because to go from making, you know, over 200 and some odd thousand dollars a year. Houston covers in a fabulous,

probably a nice suite with your hubs, traveling all around the world. And now all of a sudden you're on a, you're, that's not fun. That's the point I wanted to make. Yeah, I'm saying hello. You sucked it up big time. Sucked it up, you gotta suck it up. You gotta do what you gotta do for your family, okay?

Come on. So that was number three, you'll learn what you like, what you don't like. Number four, you'll just be a productive person, okay? Because sometimes, Ken, you just gotta get out of bed. You gotta take off your sweatpants, hit the pavement, knock on some doors, make some phone calls, you just gotta get out of bed. You gotta take off your sweatpants, hit the pavement, knock on some doors, make some phone calls.

You gotta be productive. Make something happen. Make something happen. I love it. Otherwise, you're just gonna be getting depressed about the fact that you don't have a job. All right, which leads me to number five. It'll build your confidence. There it is.

Going to a job, I don't care if you're a greeter at Walmart, getting up and taking pride in what you're doing and being the best That whatever it is that you do Colossians 3 23 whatever it is that you're doing work at it as though you're working You know for the Lord not as unto man what right I didn't quote it right, but you know what I'm saying That works when you do that message version. I liked it. Yeah, it was But that's my point like Who wants to show up when you finally do get the interview? But that's my point, like, who wants to show up when you finally do get the interview?

It's been five months and you've not been to a job. You're gonna bomb that interview because you haven't been building that confidence at any job. You need to get that typed up, printed out, and dare I say, oh, I just lost it. Laminated. Thank you.

You know where I was going. That needs to be a little, you just pull that chart out. Just ready to go. Jade five to be alive or something. That's really good actually. Really good. All right. Let's get back to the phones.

But by the way, if you're, real quick, I hope you listen to what she said because that is a fabulous pep talk for somebody who's in between jobs right now. I'm telling you that right there is a mindset plan that she just gave you. You gotta keep your mind right. I know that's right. Because you're not gonna get out of debt if your mind is destroyed.

And it is very, very hard when you've lost steady work. We acknowledge that. All right, to Kristen, we go in Lexington, Kentucky. Kristen, how can we help today? Hi, how are you all? We're doing great. What's going on? Jade needs to make that a magnet for sure. She's bringing out her inner days. Kristen, I love what we're doing here. I need a refrigerator magnet, Jade. I'll be the first person to buy it. Maybe that's my new business. You know why? So people can see that as soon as

they open up the fridge, because we know they go to the fridge like 5,000 times a day. By the way, I grew up in a magnet household. My mom had them and my grandmother had them next door. And so you just took me back, Kristin, to some serious nostalgia. How can we help you today? Well, I am, thank you all for taking my call. I'm 39. my husband is 42, our household income

is $110,000 a year. We've been married for almost 13 years. Our net worth is around 1.1. Hey! Yeah, that does include our house. My husband said that that's really not included. He doesn't include our house someone has been said that that's really not included he doesn't We would beg to differ we would beg to differ Yeah, what if we included the house, what would it be? No, that is with the house. Oh good that we're not over that because He wants to see cash money in the bank. I appreciate that, but if you sold that house today, you're there. So we will include it.

We just won't tell him. Okay. Just between us. Okay. We do have a $5,000 emergency fund. I have all of our life insurance through Zander, like you all taught me. We are avid Bay fans. We've been trying to live by your old rule ever since we got married.

Wow. And he's lived by that rule ever since he was like 14. He just said, I didn't listen until I started listening today. So I have a couple questions. Okay, we got about a minute and a half, so you got to get to them real fast. Okay, I max out our Roth IRA, our 401k, and we contribute about one to two thousand to mutual fund and then the seven thousand max for each of us for our Roth. I don't feel, where do we go from here? I feel like because we're maxing everything out, what do we do from here?

I'm honestly, I'm getting ready to turn 40. I'm a little off. Yeah. I'm honest with you. And I'm thankful that we don't have any bills, but also too, our mutual funds are only going like six to eight percent. Okay, well that's good.

All right, I gotta let you jump in here. Go ahead, Jenny. Hey, you're doing a great job maxing those out. Your funds should be doing much better than that, especially the past couple of years. You should be in the 20s, honey. So I would suggest you get with one of our SmartVestor Pros. They're gonna get you on the right track

and teach you more about the right funds to make you a little bit more money. But yeah, you're doing the right thing. You could go to a taxable brokerage account, but it sounds like maybe you might wanna try something like investing. Maybe it's now time to save up and invest in a piece of real estate.

That might be interesting for you. It sounds like you're getting a little bored with just setting it aside into mutual funds and that sort of thing. So real estate could be the next play for you guys. Not bad at all. Again, go to the smart Vestor pro section on the website, ramseysolutions.com. Make a couple of meetings and decide from there. This is the Ramsey show.

make a couple meetings and decide from there. This is The Ramsey Show. People tell me about their experiences with big banks all the time. Bad service, fees that nickel and dime them to death, and predatory lending that tries to catch them in never-ending cycles of debt. So if you're ready for a bank that puts people over profits, check out Fairwinds Credit Union. I recommend Fairwinds because they share our Ramsey values of helping people get out of debt and live generously. If you go to fairwinds.org slash Ramsey, you'll see the combined checking and savings account bundle they created just for Ramsey fans. This account bundle is designed to help you take control of your finances and stay out

of debt. And Fairwinds also has a great mobile app that's safe and secure so you can manage your transactions with peace of mind. Fairwinds has been helping people avoid big bank traps for 75 years. So go to fairwinds.org slash Ramsey to learn more. It's easy to join no matter where you live. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside. Phone number is 888-825-5225. Jade's gonna coach you up on how to handle your money. I'm gonna coach you up on how to make more money. So let's go. We're gonna

start off this segment with a question from our Ramsey Network app. This question is from Brody. He writes, I'm 27 years old and I bought a house about five years ago. I've put a lot of labor into fixing the house and it is worth a lot more than I had originally purchased it for. I just met with my financial advisor and he suggested the idea of taking out $150,000 HELOC

on that equity and investing it into a mutual fund to earn more money from my house, is that the right move or the wrong move for me? And I'm betting, Jay, that the financial advisor is selling him that product. Oh, 100%. Yeah, he's selling you. Financial advisors got himself a commission in his head. Yeah.

The answer is no, I would never do that. Because essentially what you're doing, you're leveraging your home, which is supposed to be a place of peace and security for an investment. And it's like, why would you do that? And an investment, by the way, there's no guarantee. He didn't say what type of investment it would be, like him investing in the market,

which is also something that I'm like, oh, he did say mutual fund. He did, he did. So essentially it's like, the financial advisor's going, hey, he did say mutual funds. He did, he did. So essentially it's like the financial advisor's going, hey, let's put a big lump sum in your mutual fund. He can get a commission. Big commission and then he could say, well, you're fast forwarding this.

Yeah, no, I would never do that. I would just take my own income and invest it in mutual funds. And that way I'm not creating any additional risk in my life. I'm holding on to the wealth that I have, which is the equity in your home, and I'm continuing to build wealth

by investing 15% of my gross income every single month. There you go. All right, to the funds we go, Jeremiah is joining us now in San Antonio, Texas. Jeremiah, how can we help? Hi, I'm on $33,000 in debt, and I've saved up about $3,000, and I just don't know where to go from here. What is the debt?

It's from my auto loan. What's the car? Tell us about it. It's a 2022 Dodge Ram 1500 with about, it's going to hit 70,000 miles right now. And okay, 70K. And what is it worth a private sell right now? If you went on Kelly Blue Book, what would the value be?

I believe it was 26,000 or 25. Okay, so. Let's say 25 and be conservative. And you say you owe 33 on it? Yes. But you also said you have $3,000 worth of cash? Yes. Okay, Jade. $33,000 worth of cash? No, no. $3,000. He's got cash. He owes 33. I wish. Yeah, yeah. We do too. You had it. So he's got a car that's worth 25. I'm being conservative here. He's got 3000 in cash. No other cash anywhere else?

No, just I have retirement. And no debt other than the truck? Yes, no debt other than the truck. All right, pretty clean here. Yeah, I mean, if I were you, I try to get out of this by getting out of upside down. What's your income? Monthly is

2400 okay, you living at home Yes, okay, so how quickly could you save up another? Cuz you're eight thousand dollars upside down. You've got three so we need five to make it right right side up, right? But then you got to drive something so we've got to come up with another three thousand to get you a beater or something, right? Yeah, so that's what that's the equation right here. How quickly can you get another eight another five thousand dollars in two months? three months Two months if you take a second job You live at home oh

Yeah, I would Yeah, I would say about at least I'd like you would take three months would take what bills Do you have what other bills do you have? Where there goes what other bills other than the car? Just a $75 for my internet, I believe. Okay, and then what's the car payment? Just so I can really see this. Now the car payment is $639 and I paid $300 for the insurance. Okay, so- I kind of would like to see him pay this thing off. It's not like, you know what I mean? There's a couple ways. I'd like to see him own this thing and pay it off. He's got no expenses in his life. Pay this sucker. I'm not

against him selling it. You got this funky face right now. I think he never should have got it. I 100% agree. Oh me too. Oh, I 100% agree. It was my grandparents and they cosigned on it. I guess my point is, is I think he could put $2,000 a month on this if he got busy and started working hard. How old are you? 19. He's living with mom. What do you think? I always tell people to sell it, but in this case I think he can pay this thing off. He's got no other debt in his life. Now he's got a 2022 Dodge Ram truck or he could go buy a beater. I mean, I think Jade's right. That's what I almost always say, sell the car. What do you wanna do?

What do you wanna do? Jeremiah. Well, if it is any way possible, I would love to keep the truck. Well, it is possible. You gotta pay it off. But you gotta pay it off with like lickety split, like with the quickness, like you getting another job.

I would hope three that, I would hope like three years or two years. And see, this is why I'm saying sell it because when I gave you the task of getting $5,000 quickly, you felt like that felt insurmountable. I could tell like that felt like, oh man. Yeah, see, and let me clarify my position. I'm not saying Jeremiah over three years, pay it off. I'm saying, I'm saying you pay it off in a year. But at this point, maybe it's better off. If you don't think you can mentally do that, then I would sell it and I'd go get a $5,000 truck

because I can find one online right now. I can find a $5,000 truck. Or SUV. I kind of like that plan for you. If you were a little bit older and you were accustomed to the type of work that Ken and I are talking about, I might say, yeah, keep it, pay it off. But I can tell that this is really a burden. Even the burden of getting the $5,000 to get right side up

feels like a lot. Am I wrong or am I right? No, you're right. Okay. Well then a hundred percent, I agree. No. Those are your two options. Yeah. Pay it down, pay it off quickly, or get rid of it. And I think you need to get rid of it. Yeah. Go ahead and get it out of your life. You're gonna sleep better

and you're gonna learn a valuable lesson. Yeah. You can't really, it's hard to enjoy a purchase like that when it's kind of made you feel some type of way like that. You know? And a $600 a month car payment. I was enjoying it, but I had like started to learn about the financial things and I was just like, oh gosh, I'm living way out of my means.

Yeah, I hear you. Listen, a Ram is nice. I'm not going to lie, I've been looking at Rams. What color is it? Black. Okay, yay. It's black on black. Yay!

Listen, slide it this way. You're in San Antonio. You know, and here's the deal. Let me tell you what's really going on, way. You're in San Antonio. You know and here's the deal. Let me tell you what's really going on Jeremiah. You've never done a budget have you? No well I just started actually but. Okay have you used every dollar? Are you familiar with our budgeting app? I'm not. Okay Jade tell the man why he needs to be using every dollar. Because this will help him tremendously. You're a prime candidate. This is great. You're a young

guy. This is a great habit to learn early. So every dollar, it's the best budget out there. It's the only budget I use. I know it's the only budget Ken uses, but it's great because it's on your phone, it's on your desktop, and it does all the math for you, Jeremiah. All you have to do is plug in your income at the top top and you get to decide from there how you're gonna spend every single dollar of your money. So you go in and put everything that Jeremiah might spend money on from your insurance to your car payment to, you know,

a little bit of groceries for the house, whatever it is that you're spending money on, you put that into every dollar and then it's gonna tell you, hey, here's how much extra you have to spend. So that's just the basics of what every dollar does. You connect it to your bank and then all your transactions load in there and it'll tell you, hey, here's how you're doing with your money. But there's also some really great future planning tools in there. So you can start to save for that next truck that's maybe in the 14,000,

$15,000 range. Jeremiah, that's the whole point is, get this out of your life, then start budgeting, and then you can begin to see, okay, I'm still a young guy, I can save up and have a really nice truck in the near future that doesn't have any negative emotion attached to it, right? Yes, sir. That's the idea, my man. So, every dollar, download it today,

start messing around with it, to learn this at 19. Oh, you're gonna be. Jade, I don't think I'm speaking in hyperbole, but I think he's gonna be way ahead. Like years. Way past most 19 year olds. Just learning to go, I know where my money is. Yeah.

And not only do I know where it is, I'm controlling where it's going. And being able to make the choice, hey, I bought that, it was too expensive. I don't need to keep it. Being able to say that in life. I agree. Priceless. Yeah, it's huge. By the way, selling a car that you can't afford,

it is the best way to get out of that deal, learn that lesson the hard way. It just kind of sticks with you forever. Always the best choice. Great hour, Jade Warshaw. This is The Ramsey Show. You know how when you go against what society thinks is, quote, normal, like avoiding debts, This is the Ramsey Show. You know how when you go against what society thinks is quote normal, like avoiding debt, it feels weird at first?

Well, I'm here to tell you that is okay. I want you to be weird if that means you're being intentional, including how you budget. And one way to be intentional about how you spend your healthcare dollars is with Christian healthcare ministries. CHM isn't health insurance. They're a biblically-based alternative. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families take care of health care costs without sacrificing their freedom.

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So go to chministries.org slash budget to find out more. That's chministries.org slash budget. Welcome to The Ramsey Show America, where we help you win with your money, win in your profession and win in your relationships. Triple 8, 825-5225 is the phone number. Triple 8, 825-5225 is the phone number, 888-825-5225. Love for you to call in. And if you need to get coached up on handling your money,

Jade Warshaw's here. If you need to get coached up on making more money, I'm here. I go by Ken. That's what I go by. I've been called far worse. But I go by Ken, Ken Coleman with you. And always fun to be with Jade. We've

got the energy here. We both just got a little bit of caffeine. Got the juice. We got the juice. We're ready to go. Lily in Milwaukee is where we're going next. Lily, how can we help today? Hi. I need advice on what to do. We just realized that my mother-in-law had stolen from my husband and I for the second time. The first time was last year that we discovered it. My husband's debit card numbers kept getting stolen even after he changed it six times. Come to find out it was my mother-in-law. She stole every time he was home. She somehow

went to his wallet and grabbed his debit card, wrote down the numbers. She used it to pay bills. I mean, it was, she also used it for, we tracked a thousand dollars and then we stopped tracking it. Because you didn't want to keep, you didn't want to keep getting mad. How long did this go on before, the second time that it's happened, how long did it go on for before you figured it out? I would say four months before we realized it. I actually realized it when I was looking over my husband, well, then we were just dating or engaged. I can't remember.

And he was just showing it to me and I was just like, well, just let me read it. How did you look at it? And I said, wait, they, these are all utility bills. So someone's paying utilities. And he's like, oh, okay. So we looked and my husband, like a couple of days later, found a utility bill that was paid with the last four digits of his car In his mom's name the bull we confronted her. Well, how'd that go? He confronted how'd that go? Not well, not well. She unfortunately is an alcoholic and so it's rough especially because just

Under a little over a month ago Um, and so it's rough, especially because just, uh, under a, a little over a month ago, we were ready with $5,000 cash to bail her out of her sixth O W Y because otherwise her son was going to be her, my brother in law, who is now 17 was going to be put in foster care and we were going to be his foster parents up until he turned 18. Oh wow. And so we didn't, we were going to like, okay, we're going to bail you out. We, and we even told her like, this is a gift. We don't want you to return it. Like this is just rough. So she was ordered to not,

we even were driving a total of six hours a day. When I say we, I mean me, cause my husband was working and I would drive an hour to pick her up an hour to drop her off from her home to then work, and then an hour back, and then I would go back and I would go get her. And we finally stopped after we found out she was driving when she wasn't supposed to. And so we said, we're not going to be complicit in this, we're not going to turn you in, but we're not going to be a part. Part of our bargain to not asking for any money back was that you didn't break the law

again. So this is a giant mess. We could talk about this for... Okay, and what's your question for us today? We need help with the current situation of Hearst stealing $13,000 from his UTMA account. Okay. Hearst stealing $13,000 from his UTMA. Is it whose name is on it? Did she set up a long time ago for him? Yes, she set it up for him. He was in a really bad car accident.

So because he was a minor, the money was then dispersed to her. And then at the same time, they were go hurt. His parents were going through a divorce. So part of the custody agreement was instead of just giving the money and letting it sit in a bank account, put it in an up-mallet truck. So she did that. And then in 2008, she took out a little over six grand. And then in 2015, she took out another little over six grand of a total withdrawal of $13,186.43.

No, we get it. She's got access to this though. She did, yep. So now my husband's 22 and has rights, and so when we talked with our accountant and we talked to the investor, she's not, according to like up my IRS stuff or whatever that we are being told, is that she can't pull out any money unless it's to benefit the minor. Yeah, she just did. So you could sue her. I mean, you could. I got a question. How if that's true, then how is it that she just recently was able to get into the account and get 13,000 more dollars?

No, no, no, no, no, no, that was the total amount. It wasn't recently that she did it. She did it in 2008 once and in 2015. We only found out now because the states are now being mailed to my husband. Okay, so there's a lot coming at us. So you've done so she, no it's okay, but to try to help you, she, what you just told us seems like the solution. What you just told us, she can't get access to this now, correct? Because of his age. Right. All right then, so you don't have anything to worry about.

Unless, like I said, unless you were trying to get the 13,000 back, if that's the case, you'd have to take legal action to prove that she took it, that she didn't spend it on him, right? I just don't even know how to prove that. Like, she, when my husband gets back to her. My point in saying that is, it's probably not gonna be worth it. No, this is not worth it, Lilly. I just don't even know how to prove that. My point in saying that is it's probably not going to be worth it.

No, this is not worth it, Liz. She doesn't have any money. The last thing you guys need to do is spend your money on a wild goose chase because that's what this is. This is already awful enough. So if that's your question for us, if Jade and I are saying if we were in your shoes, you can't sue her for anything. We'd let it go.

But I would make sure that your husband is on the phone with this account and we're absolutely for certain that she cannot access the funds. The second thing is, I gotta go back to the initial thing, he doesn't go anywhere near her with his debit card anymore. How did this happen time and time and time again? I don't know how he's laying his wallet around and she's just walking in it. No, what had happened was it was while he was still living there so we didn't move in together until after we were married and he lived with his mom. When we found out about it he did end up getting an apartment for six months and then we moved in together and we were married. I get it, I get it.

Lily, this just needs to be a clear boundary here. This needs to be a clear boundary. We don't do anything with her anymore involving money. Period. Period. Done. She needs to get healthy and she may have to hit rock bottom. It doesn't sound like she's there yet.

Yeah, has she ever gone through any treatment for her alcoholism? She was court ordered to with the other five OWIs, but it never ended up helping or doing anything, unfortunately. She did the program enough to get the boys out of foster care when they were removed from her care, and then as soon as she got them back and the court order was finished, she went back to drink again. Where's little brother now?

He is still living with mom. All right. Well, this is, this is tough. We feel really bad for you. I'm glad you have figured it out. I don't think there's any recourse. I think you guys need a clear boundary here. And I think, you know what? I love therapy. So I would suggest you and your husband go talk to someone without when people do you wrong like that. And your husband's probably bringing in his own baggage from that living situation, like you guys get some clarity and get some mental healing over this because clearly what she's her actions have impacted you guys and it's made you feel some type

of way like understandably so. But make sure you're working through that too so that when the time comes that she does become sober, which I pray it does, you can receive her with open arms. Also, Lily, the best we can do is give you a present. Hang on the line, we're gonna give you every dollar, because this happened because you guys largely didn't have any idea what was coming and going in your bank account. That's facts, yeah, good.

And I'm not trying to pour insult on the injury here, but let's get control of our budget so that nothing like this ever happens again. Hang on the line, this is The Ramsey Show. Have you gotten one of those texts recently claiming to be the USPS with some sketchy link to update your address? It's annoying and a little terrifying.

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slash tax pro to find one who serves your area with excellence. That's RamseySolutions.com slash tax pro. Welcome back to the Ramsey Show alongside Jade Warsaw. I'm Ken Coleman, triple eight, eight, two, five, five, two, two, five is the phone number. Let's go to Washington, D.C. Samuel's there. Samuel, how can we help? Hi, Jaden, Ken. How are you? Samuel is there. Samuel, how can we help? Hi, Jayden, Ken. How are you?

I'm good. Good. I guess my question mostly surrounds finishing school and my career in the future. Okay. Tell us where you are in school and how far along you are and what you're pursuing. Yeah. Right now I'm about 16 credit hours away from getting my associates in business. Okay.

But I'm not taking any classes this semester. And what is the reason for that? Yeah, I'm working quite a bit hours. I work every day. And by the time I actually, in truth, by the time that I was looking to sign up for classes this semester, all the ones remaining from my program were booked up. And what kind of work are you doing now? Yeah, I'm a manager and coach at a gym.

And is that the field you want to go into? It's tough. I'm kind of at the ceiling of this stuff. The only kind of way to go up would be owner, equity owner. Right, but if young Samuel, how old are you again? 20, sir. 20. If young Samuel thinks about the future 20 years from now,

and we're going ideal here, all right? So I don't want you to be hung up on a lack of belief right now. Don't want you to feel insecure about your answer. I want you to go with what your heart's telling you. What is what does it look like right now? You can change this answer two minutes from now. What's 20 years down the road a successful Samuel and I run into you and you go, hey, years 20 years ago, I talked to you and Jay, guess what I'm doing now. What would you tell me you're doing? I talk to you and Jade. Guess what I'm doing now. What would you tell me you're doing? Yeah, I'd love to either have some sort of remote work in a field that I really enjoy,

or I'd really like to get into a real estate investing kind of niche. Okay. I feel like I got a safe answer, and I feel like I got the real answer. He's not an office guy. Don't tell me that 20 years from now you're gonna be excited and run into Jayden and I go, hey I'm doing remote work in a field I enjoy. Come on. What that told me is he doesn't want to go into an office. Whatever he does he wants flexibility. I know I'm pushing him a little bit because he can handle it. Samuel, what is it that you really want to do? I guess I really just want to make my friends and family happy and spend time doing things that I enjoy. I know you're a sweet young man. Jade wants to give you a big giant hug. Mama Jade is so touched. But Samuel,

you want to do real estate? You want to be an entrepreneur, you want to be kind of on the move working for yourself, is that the goal? Yes, sir. Okay. So until you figure out what it is that this entrepreneurial adventure or two or three or four may be, then I think you ought to be working. I think you ought to be working. I think you ought to be working because you don't need an associate's degree

to be an entrepreneur. You don't have a very clear direction as of this time, which by the way, I'm not judging that at all. And so for me, I don't think you should be feeling any kind of negative emotion about taking this semester off. Now, if you figure out what you, you know, you start to get some more ideas, and by the way, I'm going to give you some tools. I'm going to give you my book, Find the Work You're Wired to Do, and it has the Get Clear Assessment in it. It'll take you about 18 to 20 minutes

to take. Will you do it? Yes, sir. Because it's going to give you a purpose statement, and it's basically going to go, I was created to use the top three talents, and it's going to go boom, boom, boom. It's got a detailed report on each of the three top talents. Then it's going to say to you to do the work that I really enjoy doing. It's going to give you three passions, boom, boom, boom, and a detailed report on all three to accomplish my mission of, and it's going to give you one clear answer, which is a result that would get Samuel out of the bed every morning. Now that's just a quick preview, but if you take it and you look at that purpose statement and you begin to lay it out over the world of work, okay, and you begin to allow yourself to answer the question that I put you under the spot, okay, I put you on the spot, I know it was

a little pressure, but if you continue to work through that same question with that purpose statement in mind, I think at some point you're gonna come to some conclusions on two or three ideas that would absolutely allow you to use what you do best, to do what you enjoy, to produce a result that you care about. Isn't that what you really want, Samuel? Thank you so much, Daniel. So here's the deal. I am all for 19-year-olds working and making some money, Mama J.

Okay, I know that's right. And taking his time and figuring out, because he's not playing video games all day long. No, he's being productive. He's hustling. This kid's got a heart the size of the Atlantic Ocean. So Samuel, I would say pause. Yeah, agree. And then we jump back into school,

and here's why, Jade, I want to give it to you to weigh in. Because you need to listen to Jade. If school, a degree, whether it be an associate's, a bachelor's, grad degree at all, Jade, if it is the only way to do what you want to do, I say do it. If it is the best way to do what you want to do, I say do it. But absent of those two very clear descriptors, then I say stay away from it because you are wasting time and money. This idea that college is it's so good for the young people to go find themselves. That's an expensive way to find yourself. It's summer camp

on steroids. You can go party on your own. Jade would say you. I think that you're exactly right, Ken Coleman. I think that that's a message that needs to be shouted from the rooftops. I mean, look, there's just as simple as that. So Samuel, I hope that's what you need. Is that what you needed today? You needed, you didn't need anything from us, but I hope we answered your question. Yes, I really appreciate it.

All right, my man, hang on the line. Chris is going to get you a copy of the book, find the work you're wired to do, and it comes with the assessment, the Get Clear assessment. By the way, that little book is about a 45-minute read, Jade. Yeah. It's me coaching people through their assessment results. So I do believe passionately in that product, so especially for young people. Who, by the way, there is this massive cultural pressure to go right out of high school and get accepted by a really great school so that you make your parents and your principal and your teachers proud. And there's a lot of Samuels in this world who are a lot like Ken Coleman. And we were like, that thing I want to do doesn't need a degree. I'm a college dropout. Because I was working, I went to school to get a political science degree because I wanted

to run the world. You know what I'm saying? Yeah, I know. No surprise there. And I got a taste of politics. I got to work on a campaign in the middle of my sophomore year. And I took a whole semester off and I tasted battle folks. Hey.

And then I went back to school and was like, this is the desk job and I've been in the foxhole and I was never the same. And thankfully my parents did not freak out. They weren't happy about it. What'd they do? They just kind of were like, okay, well, we'd like you to finish your degree. Yeah, yeah. Because another year and a half later,

I dropped out to work on a Senate race. Then I went right to the gubernatorial race and I found myself working for the governor of Virginia at 22. That's cool. So it wasn't like I was finding myself in Europe. But you could find yourself in Europe. And I got no problem with that either. Yeah.

I'm a big fan of a gap year. I wish I had found myself as a dropper. Listen, I stayed in school too long. Yeah, but you were a D1 athlete. You're far more a higher achiever than me. Yes, but I quit volleyball to pursue music in my studies. But I didn't need to continue in school.

No, you did not. But I wish I had taken the Ken Coleman path of action. It would have been right for me. I went into the field that I was going to school to get into the field for. I hope everybody understands that. I mean, I'm not saying that everybody drop out of school. No, we get you, Ken.

But my goodness, why in the world would I finish the degree? It's not for everybody is what you're saying. Like, it's not the pathway for everybody. People used to ask me all the time, are you gonna go back and get your degree? I was like, pfft. For what?

I got a fancy office. I know, right right I'm wearing suits every day you know what I'm not going back to college for a political science degree I am sciencing the political what do you think about folks who really view it though like it's just I want to do it to say I did it like it's just it's that important to you pay it cash. Yeah. But I would say to them privately, that's important to you. I'm not going to knock your priorities. I go, you don't need it. Yeah. I'm just one of these guys that doesn't do anything that

I don't need to do. Listen, I get you. Why do I need a degree? My degree helped me meet Sam Warshaw. That's all that matters. That's what I tell myself at night when I'm thinking about the student loans I paid off. And tell people what you thought of Sam the first time you met him. I said that right there is a snack. My all-time favorite thing she says about, he's become a good friend. One of these days I'm going to tell him, you're a snack. He's going to probably punch me, but it'll be worth it. Listen, face card never declines.

You heard it here first. We love you, Sam. This is The Ramsey Show. Listen people, what you call organized chaos is still chaos. This year build some room in your budget to get your life really organized. One tool that I recommend is a knockbox, as in next of kin. Knockbox is a complete system that helps you organize important documents, accounts, IDs, tax returns, insurance policies, estate plans, and other personal history in one secure place. The 15 categories in your knockbox cover everything from health history and investments to your Hey guys, Rachel Cruz here. Alright, I'm about to say what everyone already knows, but budgeting is a good thing to do.

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Every dollar keeps budgeting simple and stress-free, just the way you want it. So go download the app for free and get started today. Again, go download every dollar today. Welcome back to The Ramsey Show. Thrilled to have you with us, helping you win with your money, win in your profession, and win in your relationships is our goal. 828-825-5225 is the phone number to jump in. I'm Ken Coleman. Jade Warshaw joins me.

Why Refi? Refinance is defaulted private student loans and builds a custom loan based on your ability to pay. Private student loans are different than federal student loans like Sallie Mae's. So to learn more about this custom refinancing option and a lump sum payoff option, you could qualify for after 24 months, go to yrefi.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states.

All right, today's question comes from Travis in Vermont. He says, I'm 23 and saving for a home down payment, which should only take 12 to 18 months. However, I've heard that you recommend not having a mortgage of more than 25% of your take home pay. Even if I went, even if I were to save enough for a 20% down payment, I wouldn't be able

to get a mortgage anywhere near that. I earn 70,000 per year, which is above average for coming straight out of college. There are no starter homes in this area for less than 150,000. Do you think young people will ever have a chance at purchasing a house if we stick to your 25% guideline? All right.

That's a great question. That's a good question. Let's talk about it from a couple of angles. Number one, I love that you want to buy a house. I think that's great. I think the dream of real estate is the American dream, right, to own something that's yours outright. It's great. What you first said was you could save for a down payment

in 12 to 18 months, which lets me know whatever you had in your mind, you thought this number will get me in the door, but the door that it's going to get you in is a dangerous door for you. The reason that we say 25% of your take home pay is because we want you to be able to live. We want you to be able to breathe out here because- That's right. Don't want to be house poor. Yeah.

At some point, you have to think about it like this. At some point of the 100% pie of income that you have, at some point you have to think about like this at some point of the 100% pie of income that you have at some point you're going to want to invest 15% so there's that at some point you're going to want to give 10% so there's that that's already at 25 at some point you have a mortgage let's say it's more than 25% let's say it's at 40% well suddenly you don't have much to live off of right you've really cut that wedge really, really small for you. And we find people all the time who call in and say, oh my gosh, I mean, it happened the other day, Ken, folks calling at 50% because they'll give you a mortgage

up to 50%. Oh my goodness. And when that happens, these people can't breathe. Like they can't pay for a pot to piss in. Like they don't have anything. One of my all time favorite phrases by the way, you dusted that one off. That's like an old school.

It came from the depths. It did, that's like an old school phrase. I think I probably heard my dad say it. Oh I promise you. Anyway, you know that's the point. It has nothing to do, it has nothing to do with being a Ramseyism, right? That's right.

It's about you. We want you to be able to live. That's right. It's about margin and emotion attached to that margin. And so that's kind of what I want you to leave here with. It's not about us. It's about you being able to enjoy your home and have the money to do the things

that you need to be able to do. So that's thing one. Now let's answer the question of, do you think single people will ever have a chance at purchasing a house if we stick to your 25% guidelines? The answer is yes, but, comma, and you'll have to change your expectations on possibly the piece of real estate

and the timeline that it will take to get you there. That's right, and the zip code. And the zip code, all these things. I mean, come on, and what you grew up in doesn't mean that that's what you're supposed to start in. Facts, oh come on, Ken. And I think that's the biggest thing. It's like, well, you grew up in a four bedroom,

three car garage, and you think that that's what you're supposed to start with. And I'm like, you gotta- At 23? Well, I think a lot of people do think that they- You're right. And it's like, wait a second. I mean, the first house Stacey and I started with,

it was, it's like a matchbox compared to what we live in now. Okay. I do know. And we thought it was massive and scared to death of it, by the way, it was $198,000. And I thought, and by the way, I did it by the book, the down payment, the way Ramsey teaches it, but I thought I had mortgaged my life away

because of the sheer price of the home. Yes. $198,000 back then, was like I thought I was gonna die. And that's so important to note Ken, so important. Despite what your monthly payment for the mortgage might be, you still that first home, you feel the weight of whatever the entire amount is. Yeah even though we put a nice down payment on it was over 20% but it still felt like what have I done? Yeah. So there's a responsibility there which by the way it makes me think, I wanna just add one thing,

I thought your answers were great. This is why we created what I think is one of the best resources we've ever created at Ramsey, and by the way, it's all free. It's called Ramsey's Real Estate Home Base. So anybody watching or listening right now, this is free, and it's absolutely chock full, it's a podcast on there, we've got a book on there,

we've got a video series, how-to articles, start to finish guides on buying or selling. Anything real estate related, if you're kinda going, what do I do? And you trust us, go to ramsysolutions.com slash real estate. Let me say that again, ramsysolutions.com slash real estate. If you couldn't write it down, can't remember it, go to the show notes for today. It's there.

Very important that you understand what all is involved here. So really good question. And Ken, let me drive this point home one more way. Drive it down the lane. There's always a new listener, someone who doesn't know our backgrounds, right? So my husband and I, I loved this question

because right now the real estate, it's gotten more and more expensive. It started to cool out in some areas, but the truth is it is very expensive. And with other things being expensive, inflation and things like that, it does make it feel harder to be able to accomplish this dream.

That is the truth. Well, the numbers have gone up. You're right about that. It is a higher level. Yeah, and so I like to remind people, when my husband and I were getting out of debt, of course we couldn't buy a house during that time because we say you should really pay off your debt before you become a first time homeowner. And so Sam and I rented Ken for 10 years.

And during the course of that 10 years, we paid off $460,000 of debt and then we saved up and were able to do, you know, purchase and fund and that stuff. And you also had a bunch of people living with you too, I feel like. You say what? Didn't you have a bunch of people living with you too? Not a bunch of folks, we had roommates at one point, we did. That's what I'm saying, I'm not knocking that. We were married and we had another married couple that lived with us for a year.

I thought that was extreme. 10 out of 10 would not recommend, Ken. But you did it. We did it, but the point is... I said a bunch of people, I'm sorry. It kind of sounded like we were just on the blog. Like you were living in a shoot. We just had folks coming through.

I didn't, living in a shoot. No, just reframing like a timeframe. If it takes 10 years, so be it. You'll be a homeowner, I can tell you, you will. And here's the key. Actually, I'm really glad you brought that up. Because I think some people right now are still going, 10 years?

Before you throw shade at my friend, I want to bring this back to you. Because that 10 years of rent, I'm sitting here with you today and I'm going to take a guess that you don't feel like you pissed that money away. Not at all. So what did the 10 years of rent, which some people right now are on TikTok, Instagram going, what? How did that 10 years of renting give you freedom to get to where you are today? Break it down. Well, A, I don't regret it at all.

Here in my life, I'm 41 years old. I don't go, oh man, if only I had bought my house when I was 23. There's no part of me that thinks back and regret at all. Why? Because it was worth it to do things right. You took seven, we took seven and a half years, paid off all the debt.

Then we took, we lollygagged a couple of years cause we were tired. Took some more time to save up. That's the truth. Well, you were paying off half a million dollars. That's right. You deserve a water break. Took some time to save up.

And then when we finally bought our house, I was pregnant, I had just had my first son and I was 36 years old. And it was great. And now here you are, homeowner. Homeowner, I'm on my second house. Do people think that that's wasting money and in your case it was actually the freedom

and margin you needed to get out of debt. That's right, because it was cheaper. It was far cheaper for us to rent. We had a season of roommates and it freed up money and like we said before, the last thing I needed was more stress of then feeling like, okay, now I've also got this mortgage that I have to be accountable for. So, Ken.

Craziest thing that happened that you're willing to share when you had another married couple, roommates? Or most awkward? I think one time we came home and they had bought an alarm for the house. And so Sam and I came home from a trip bought a home alarm, an alarm for the house. And so Sam and I came home from a trip. We had been working. Uh, and when we opened up the door,

they didn't tell you. Yeah. And that has to be really alarming. Yeah. That alarmed me. I'll bet. No pun intended. Wow. Yeah. It was alarmed. I think that should have been a reality show. I hate that we missed that. Yeah. I don't, that part I don't miss. I love them. They were great people. I have nothing but love in my heart. Still in touch with them? Yeah. Somewhat. Somewhat. From a distance. But not because they're not great people.

From a distance. Little Bette Midler. From a distance. There it is. I knew she would do it folks. That's all I gotta do is tee it up and she can sing it. Check the key. Lady in the lobby is giving you a heart sign. She wants a little Bette Midler during the break. God is watching us. That's how you go out to break right there, folks. I'll listen as she sings along during the commercial break.

We'll be back before you know it. This is The Ramsey Show. I still remember 10 years ago, 23 years old, I was frustrated, anxious, and flat broke. I had followed all the ways that toxic money culture had led me down from well-meaning parents and misguided guidance counselors, and it left me with a pile of debt. But I'm telling you, it doesn't have to stay that way. Over a decade, I went from broke to millionaire, and I break it all down in my new book, Breaking Free from Broke. I'm gonna show you just how toxic this money system is

and how you can break free from credit scores and credit cards and student loans and auto loans and investing traps and finally live a life that you're not exhausted by. A life with more margin, more options and more peace. If you wanna check out the book, go to ramsysolutions.com slash store to get your copy of Breaking Free from Broke.

That's ramsysolutions.com slash store. ["Breaking Free from Broke"] Welcome back to the Ramsey Show alongside Jade Warshaw. I'm Ken Coleman. So glad you're with us today as we help you win with your money, win in your profession and win with your relationships. 888-825-5225. Jade, I'm a little excited about it and I don't naturally celebrate these things like I should. Super excited, been dreaming about a show concept for a long time and we've

been working on it as a team. The team's done a great job. It's called Front Row Seat with Ken Coleman and people ask, has it replaced the Ken Coleman show? Yes, because it is a very different format. Imagine you're sitting in on a deep dive conversation with somebody who's a thought leader, someone who has done something extraordinary in their lives, they are a man or a woman of success, and you get to be a part of the audience. And you're sitting around with us asking a question. Well, that is the format, live format.

We record it, and then also we have a virtual format where people can zoom in if you will. So we're bringing the audience to the front row seat. That's the concept. It's on YouTube now or wherever you get your podcast. A new episode comes out every Tuesday morning. If you want to get better personally, move up professionally, and lead effectively, those are the conversations. Wow. How do you source your like guests? How do you pick, how do you select your guests? Cause you've had some wonderful guests. Some really fun guests. And the way it goes down is, you know, we're selecting people within those categories. So for instance,

people that can help experts can help out in the area of personal growth. So that would be an expert maybe on sleep or nutrition or exercise okay right and so holistic we're mixing it up right and then of course we have people that are professional gurus it can help you on certain soft skills like we just had Charles Duhigg we just recorded that or come out soon Puelet surprise-winning author of the book super communicators Wow so we're talking about the three types of conversation so how do about the three types of conversation. So how do we use those types of conversation

to win in our profession, but also win at home? That's so helpful. And then of course, leadership expert. So it's very intentional between those three buckets of content, if that makes sense. Well done, Ken. Thank you, I'm really excited about it. It's beautiful, by the way,

if you wanna check it out on YouTube. The team did a great job with the set, looks really, really fun. So the front row seat is the name of the show, Front Row Seat with Ken Coleman. You can get it on YouTube or wherever you get your podcasts. Let's go to Brianna who's joining us in Dallas, Texas. Brianna, how can we help today? Hi, yes, I have a question. Well, I need some advice. Me and my husband are thinking about selling our home because we're just drowning in debt

and we just don't have any other option to try to get out of it but to sell our home. So yes, that's my question. What has created that scenario where you don't believe you have any other options? Give us some details. Well, we are just drowning in debt. I know y'all always say, sell the cars and we looked into it. We owe, in one of our cars, we owe like $9,000. Okay. And we try to see if we can sell it but we will be under it's really not worth selling It's just I guess right now we just bear off paying it off and the other one is

12,000 and That one as well is negative. So We're like, okay We might as well just try to hang on to those and try to pay those off and everything else is loans and credit cards, student loans, IRS, pretty much everything. Go through the other amounts for us so we can get a picture of this. So the $9,000 car, the $12,000 car, what else? And then loans, like personal loans, you know, like $20,000.

Credit cards is around like 35 to like $40,000. Student loans is, my husband's is like $ 73,000. Okay. How much are yours? I don't have any. Good. And my real IRS is like 9,500. Okay. And then I have medical bills that's like 3,000. Okay. Okay. What's your combined income? Combined income is like 10,500 to like 11,000. Per month. Yes. Okay. And have you added up, if you don't know, it's okay. But if I were to ask you on the spot, like how much does this cost you in payments every month? Do you know the number to that? Like the debt alone is like 4,000, probably a little bit more.

Okay, so you're paying 4,000 in payments. And then tell me what's your mortgage. Tell me about the mortgage. Tell me what you owe on it. The mortgage is like a 31, 3,100. Okay. And that's what you're paying per month, but tell me how much you bought the house for

The house we bought it for 386 What's it worth? Right now is worth like 385 387 well, sweetheart if you sell the house that's not gonna give you guys any much money at all. I know we owe That's not going to give you guys any much money at all. I know we owe $340 on it right now. Right, but after you pay your realtor, there's very little of this that is going to actually solve this problem. Right.

That's when we were like, okay, should we just try to fight for it or should we try to sell it and try to at least get out of it? Jade's got something to tell you. I mean. The only thing I was, we were thinking is cause my husband drives like an hour and a half commute to his job. Okay, interesting. So he wanted to move closer to his job cause it's a long drive.

Could you rent? Is it at home? Could you rent for less money in that location? Sorry, Jade. That's okay. The rent's probably gonna be like two thousand. Yeah, not much difference. Not much difference. Well, no, you said you're paying 3,100 per month. Oh, yeah, that is that is actually a huge difference. 3,100 plus the HOA. Oh, that's not including HOA. What's your HOA? Two two hundred and fifty every? To 250 every quarter. OK, every quarter. OK.

I would consider moving Jade. Yeah. Situation because that's a long way to commute. Number one. Well, there's a couple of things. You got that big commute. I was going to ask you, is it an hour and a half each way or is that combined? Because if it's 40 minutes, that's not as big of a deal. But no, it's each way. Oh, girl. Yeah, I definitely move. You have to drive into the office three days out of the week.

So two days he'll work from home, but three days out of the week, he has to drive to the office. It's still a lot. Three hours driving in a day is a lot to get to work. So that's one, that's one green light. It's not the biggest reason because like you said, it's not like he's going in every day, but it is a reason. The biggest reason for me to consider getting out of like you said, it's not like he's going in every day, but it is a reason. The biggest reason for me to consider

getting out of this house is because it's more than 25% of your take-home pay. And at this point, you need every dollar that you can get your hands on. Now, there is a thought here, and you guys need to sit and talk about this, because there's a thought where I go, okay, if you guys really start side hustling,

if you start picking up your income, there could be a world when this debt is over that this is not, that this is 25% of your take home. You see what I'm saying? That you raise your income and it becomes something that you can keep around. Today though, it's really a problem. So I would say your homework

to sit down with your spouse tonight would be to say, what are all the things we can do to make money? What are your opportunities that are directly related to your job? And what are mine that are, do you, do you both work? Yes, we both work. So he has his main job and then he has a part-time job on the weekend to make like some extra income. I try to work overtime. I work at

a daycare. So I try to work extra like overtime whenever I can. How consistent can that happen? Is that like a daily thing or is it like a couple times a month? It varies. It varies. It depends on the teachers. Like I just found out I have COVID so I have to be out all week. Got you. So what I'd be looking for, when I'm looking for a side hustle,

I'm looking for something I can count on. That's the whole point. So I'd be looking, if I'm going to spend the extra hours working, I want something that's like clockwork. I can get it. I can go bust my butt and do it. And it's there.

So you both need that. And then if something, if part-time pops up at the job and it's there. So you both need that. And then if something, if, you know, part-time pops up at the job and you have the leverage, you know, the place in your schedule to do it, you do that too. But right now I want, here's my main job and a go-to side hustle that's always there.

I can work it every day, every weekend, got it. So that's you guys' job to come up with that tonight. And then after that, have you made a budget? I tried the dollar thing. I just downloaded it. I did like the free trial thing, but I'm going to have to cancel it because it was like $18 a month. Okay. You all need to stop borrowing money. Yeah. You got to stop borrowing. Ken is right. Ken is right. Like you got in this mess because y'all are trying to do too much and you don't have enough money for it. So if you can't afford every dollar to get a budget, you better get it out on paper.

You can afford it. You spend more on pizza delivery. Okay. You can afford it. This is the Ramsey Show. The right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman and this is what my new show, Front Row Seat, is all about. Over my career, I've had the distinct privilege to interview successful people from all walks of life

and to coach over 10,000 professionals who wanted more. What sets successful people apart is a never-ending desire to learn and grow. Each week, I'll be joined by industry leaders and world-class experts to have a conversation about how to get better, move up, and lead well in work and life. But the best part of this show is you get to be a part of the conversation.

Live in-studio, we'll have a group of professionals just like you who have the power to ask questions and steer the discussion in real time. It's an opportunity to get real answers to real questions, like how to make the right decisions, have hard conversations, live a balanced life, and discover your next steps to grow. Join us every Tuesday for conversations that are, live a balanced life, and discover your next steps to grow. Join us every Tuesday for conversations that are guaranteed to surprise, challenge, and inspire you. Check out Front Row Seat wherever you get your podcasts.