The Ramsey Show - There’s Always a Way out of a Financial Spiral

Starting point is 00:00:00 Welcome to the Ramsey Show America. Thrilled to have you with us. We're here to help you win in your life. We want you to win with your money, win in your professional life, and win in your relationships. Alongside Jade Warshaw, I'm Ken Coleman. The phone number to jump in is triple eight, eight two five, five two two five. Triple eight, eight two five, five two two five.

Starting point is 00:00:36 Let's get to the calls. You ready to go, partner? You got a little something in the throat there? A little feclempt, but I'm ready to go. Cleared the throat, let me clear my throat, she said. There it is. Come on, Ken Coleman. We're already getting it started. I know. We're gonna have a lot of fun today, by the way, just a sheer warning to you. We're gonna have fun while we coach you up. Lauren starts it off in Knoxville, Tennessee. Lauren, how can we help? Hi, I just have been tracking my budget for the last year asking friends who have similar families as me

Starting point is 00:01:03 living in the area how much they're spending on groceries every month. And I am over by a couple hundred dollars every month. I've tried to bring it down, but I just am not willing to compromise on certain healthy foods. And I've already made several compromises the past couple of years. So I just want to know how much should I be willing to compromise on healthy food in order to keep a budget? Look, you call the right place. This is a great question.

Starting point is 00:01:30 And I can't think of a better person to be sitting beside on this one because I'm in the middle here. You are. I don't know where I'm at on this. What are you going to say? I'm going to lean on you. I'll tell you what I think. So first off, I want to know what your numbers are.

Starting point is 00:01:44 I want to know more about you before I go into it. It's not gonna change my answer. I just wanna know. Okay. What are you spending on groceries? How big is your family? Family of four? Yeah, so we are a family of four.

Starting point is 00:01:56 I've got a five year old, sorry, a family of five, new baby. He doesn't really count. So family of five, I'm spending $1,300 a month. And when we first moved here, I was spending it at a really nice store. And when that got too out of hand, I moved down to a store that didn't have as good of quality stuff. When that got too out of hand, I moved to a different one. So for some reason, I just can't kick the $1,300 a month.

Starting point is 00:02:20 Okay. And what baby step are you on to? We don't have any debt except for a mortgage and we've got some savings Spin 1400. Okay, don't get too excited. This is clean food. How much your income combined income? Just barely we moved up to 120. Oh, yeah, listen listen, okay It doesn't change my answer in the way that A. Well yeah, what is your official declaration? My official stance on this is

Starting point is 00:02:52 when you're working the baby steps, you don't sacrifice your health long-term for it. So getting out of debt is not an excuse to eat crap. It's not you eating ramen noodles every night because we gotta live, Ken. We can't be out here with high blood pressure and the gout and all these things that are holding us back. I love that you dropped. I love the gamut. High blood pressure to gout. I mean, you covered it all.

Starting point is 00:03:17 I'm saying there is a logical point where it becomes unhealthy. But let me ask you, because you're the queen of cutting costs and you eat as clean as anybody that I know. I try. I try my best. I get to tell. I get this is my statement. This is your okay.

Starting point is 00:03:35 Okay. Of the people that I know. I don't know anybody that eats cleaner than you. Okay. All right. Now here's the question. Yeah. Is it worth digging a little bit?

Starting point is 00:03:44 First of all, she's fine on margin and percentage there. You're totally fine. But, uh. 1300's good, and before you get into this, Ken, let me just back you up, Lauren. If you look at the FDA standards, for a family of four, it's usually somewhere between 800 and $1200.

Starting point is 00:03:58 Now, they break it down on kind of a, it's almost like a good, better, best, like for a less expensive budget, a median expensive budget, and for people who can spend a good, better, best, like for a less expensive budget, a median expensive budget, and for people who can spend a little bit more, that's the way they break it down. And for the folks who can spend a little bit more, it's usually between 800 and $1,200.

Starting point is 00:04:15 So you're right there. So here's the question I have. And Lauren, I'm asking a question on your behalf, if you'll allow. If you were gonna sit at Lauren's table tonight, and you were gonna do an audit, where would you be looking to try to shave money on what is already a reasonable thing for healthy food?

Starting point is 00:04:33 Do you have, and I'm not trying to get you to endorse anybody, but are you like, is it online or they're different? Like what would you be looking at to help her so that she can kind of double down and go, all right, I got some Jade hacks here to maybe see if I can save a little bit. Doesn't sound like she might be able to.

Starting point is 00:04:48 I'd be looking for the convenience items. For instance, most people are looking to most people, if they have the money, they're looking to save time. Right. That's the next thing is like, I can spend the money in order to save more time. Right. Lauren probably has spent more money to save time. So I'd be looking for things that are prepackaged

Starting point is 00:05:06 like snacks, like when you have five kids, you wanna just be able to throw the things in the kids' lunch, right? So you might buy the snack things that are prepackaged, the prepackaged things and nuts, the prepackaged, you know, that sort of deal as opposed to, okay, I'm gonna buy the big Sam's Club, you know, package of's Club package of cheesy smiles

Starting point is 00:05:25 or whatever it is. You know what I mean? Yeah, yeah. You know what I mean? And so I'd look for convenience items. I'd then look for, in the freezer section, so I'd be looking, okay, is she buying frozen waffles to get breakfast on the table in the morning?

Starting point is 00:05:38 So that's where- Are frozen waffles healthy, though? There's some that are better than others. Lauren, do you get frozen waffles? No, everything I make is generally pretty homemade. We have stick-ins, we do sourdough. But for you, you're probably splurging in the area. I mean, I'm just guessing you're probably buying more

Starting point is 00:05:56 non-GMO, more organic, higher quality. Yeah, where's your biggest expense? What would you say is your biggest expense? We stopped doing it because it was so expensive, but I really, really care about buying from local farms and dairies because I like how they treat their animals better and I think that the chemicals and things

Starting point is 00:06:13 aren't in there as much. Yeah, I think- But we stopped doing that because it was $10 a gallon. Yeah, you know, what you're probably gonna find is it's their trade-offs that you're making. Even when Sam and I were in $460,000 of debt back then, I would spend $60 a week on groceries. Remember, this is back in the day.

Starting point is 00:06:30 But those were, what you're talking about, everybody has a set of values that they care about, whether it's, I don't want the red 40 and the yellow fives, or I'm trying to avoid the dyes, or I wanna buy local, or I care about organics. You might not be able to afford to do all of it, but if you say, for meat specifically, I really care about that, and because of that,

Starting point is 00:06:52 I'm willing to skimp in other areas, it's a trade-off. But are you saying that Lauren can go back to that same budget? Lauren, this is why you called. I'm hearing Jade's okay with that number. Once you're in baby steps four, five, and six, right, and you're able to kind of not be in that, like balls to the wall mode.

Starting point is 00:07:10 I think that as long as you're doing the things that cause you to be a financially responsible adult, you're investing 15%, you're putting extra on the mortgage, you're putting away for the kids college. If you're still doing all those things and you have the margin and you say, yeah, I'd love to, to be able to splurge on this, you know,

Starting point is 00:07:28 milk from next door or whatever. The eggs from- $10 gallon milk from a farmer Roy. I don't know, but I'm saying that's what, cause some people will go out and go to a really nice meal at a restaurant and they'd rather do that. And so at this point, it's really about

Starting point is 00:07:42 how you enjoy spending your margin and what the value set is. You guys have worked hard. You guys have worked hard, Lauren, to have this margin to then eat for life. I like this. This is really fun. And I got to tell you, I'm telling the Lauren, I'm telling you, I'm telling the entire audience. Tell us. Guess what I signed up me and Stacey for in February. Wall Pilates. A sourdough class. Oh. I'm going to go learn how to make sourdough, and I get to come home with the mother.

Starting point is 00:08:10 Is that what they call it? Did I get that right? In more ways than one, Ken. Well, two mothers come home with two mothers. Come on. How exciting is that? I am so excited. So you and Sam got to come over.

Starting point is 00:08:22 Guess what I'm going to make for you guys? I'll take whatever loaf you give me. Sourdough pizza. I'm gonna make it on my big Kamado Joe for you. I'm gonna hold you to that and I want all of the discards. I'm learning how to make sourdough. That's good, Ken. Keep me posted. Yeah. Blog about it. No. But I'll tell you about it. All right, quick break. We're just getting started. We're having a blast. We're gonna help you out. That's probably one of my favorite calls that I've had in a while on the show. Really interesting. Don't move. We'll be right back This is the Ramsey show Statistics show that half of Americans don't have enough life insurance or they don't have any at all

Starting point is 00:09:02 I don't understand this John. Why don't people want to take care of their family? They think they're not gonna die or something? Well I used to be one of those guys I didn't even think about it 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. For decades Dave I've sat across people who've lost a spouse, they've lost somebody important to them, me too. And they don't know what to do next. Terrifying.

Starting point is 00:09:27 You're gonna have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow. That's exactly right. These are the two options.

Starting point is 00:09:38 It's saying I love you to your family, term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. Welcome back to The Ramsey Show. Thrilled to have you with us alongside my friend Jay Borschon and Ken Coleman. And if you're ready, you're finally ready. Some of you have been listening for a long time, some of you for a little bit, some of you brand new.

Starting point is 00:10:13 Welcome to all. But if you're ready to finally make change in 2025, this is the year. You said, all right, we're making changes. This is a must. January 23rd, we've got our free live stream, Take Control of Your Money, hosted by Dave Ramsey and my friend Jade Warshaw. Jade, I feel like I shouldn't talk about you when you're right here. You guys were meeting, I walked by the other day and I heard you guys having a meeting. Yeah. This thing is on the rails. It's ready to go. It's out of the oven. It's baking.

Starting point is 00:10:44 What's it gonna be? January 23rd, take control of your money. You and Dave got some fun cameos as well. Why should people come to this? This is where you get the how-to. This is where you get the practical steps. Jade, I'm ready to do it. Just show me how and I'll take the ball.

Starting point is 00:11:00 And so that's what we're gonna do. We're gonna show you how to get control of your money once and for all in 2025. We're gonna walk you through to get control of your money once and for all in 2025. We're gonna walk you through how to make that happen, how to do a budget, how to pay off your debt, we'll talk even a little bit about investing. So this is an event you don't wanna miss and to wrap it all up, we're gonna do a Q&A at the end.

Starting point is 00:11:16 Rachel Cruz is gonna join us, George Campbell is gonna join us, and we're gonna take your questions from you live and help you out right where you are, meet you right there. Now they should be charging you fine folks for this, but they're not. Free! It's a free event and this is really cool.

Starting point is 00:11:33 When you sign up for this free event, you also are entered into our cash giveaway. That night, or at some point, five people, okay, five people who actually attend this free event, this live stream event, will win $4,000 each. So you sign up at ramsysolutions.com slash live stream, ramsysolutions.com slash live stream, and, or you can also click in the show notes

Starting point is 00:12:02 to go to this event. And I don't know why you wouldn't do this, because for some of you, you wanna kickstart your goals. Coming to this event will do this. However, for large. Listen, if I slide $4,000 over here to you right now, Ken Coleman, what are you spending it on? What's it going towards?

Starting point is 00:12:20 Well, if you're sliding it over there, maybe it's a- Well, it's Dave's money. It's Dave's money. I'm just sliding it your way. maybe it saves money it saves money. I'm just like it's a fun night out Maybe maybe try to squeeze in a budget weekend a trip. Okay. Yeah. Yeah, maybe I spend it on Valentine's All right, Stacy Coleman. Yeah, listen, let me know how it goes I mean that's that's pretty fun little trip $4,000 is nothing to sneeze at that could be something that pays off your debt

Starting point is 00:12:43 That could be that's pays off your debt. That could be finishing out your emergency fund. Maybe you're in baby steps four or five and six and this is what'll get you over to do your little kitchen remodel. It's worth it. Sign up. That's all I'm saying. All right. Sierra is up in Atlanta, Georgia. Sierra, how can we help today? Hey, how are y'all doing? Good. How are you? Doing good. So me and my husband, we're actually in baby step two. We just learned that his parents have money put up for us. So we're about to be able to wipe out all of our credit card debts. And I've heard you guys say, just put the cards up or shred them. Do we just like let them fall off of our credit or do we close them?

Starting point is 00:13:33 We're both a little iffy on that part. Cut, cut them up and close them. Do the both. Done. Okay. You don't need them anymore. How much money is this that you're getting? So right now it is $14,000, but then they're going to add an extra $4,000 on top of that. What's it for? Why are they giving you this?

Starting point is 00:13:54 I mean, that's a blessing. It is. It definitely is. My husband has the company that he works for. He has got his parents company in to do some work for the company that he works for, he has got his parents company in to do some work for the company that he works for. So they've been doing really well working together. And so this is just a thank you to him.

Starting point is 00:14:12 Nice, thank you. So here's what I wanna caution you about. I love when people get big sums of money, whether it's an inheritance or a gift, or just something goes their way. But the cautionary tale here is there was a habit that got you into $14,000 of credit card debt. And we wanna make sure that we're examining those habits

Starting point is 00:14:34 and what caused that to happen. Because while it's really great to get a gift like this and be able to pay off that debt, the worst thing ever would be to not change your habits and over time accumulate that kind of debt again. Right, yeah, so the only credit card debt that we have is about $8,000. On top of that, we have two car loans,

Starting point is 00:14:54 a side-by-side loan, and then personal loans. So the rest of that will flow over into our next one, like the baby steps, we're gonna make all of those credit card payments and just blow them over. Okay, good. See now, in this case, and I love your call out, Jade, but I think in this case, Sierra, I'm commending you and your hubs

Starting point is 00:15:14 for putting the entire 18 grand towards the debt snowball because that in itself is a pain. Yeah, oh yeah, that's pain. Like when someone gives you 18 grand, you go, woo, and you gotta go, oh, there it goes. Man, you're iffy. gives you 18 grand you go There it goes and so I They'll feel it. They'll feel it. And and so you guys are on your way. This is a real blessing I mean Jade chose the right word there. This is such a kickstart to this What will be left in your debt snowball once you apply the 18? What's the run those numbers?

Starting point is 00:15:42 So what's gonna be left is about a hundred and twenty seven thousand. But that includes the house? No, we rent. Oh, okay. Well then can you tell us about the cars and the side-by-sides? Maybe we can give you some more help that you didn't come for. Mm-hmm. Yes, so the side-by-side we still owe about $20,000 on. Okay. What's it worth? My car. I have no idea.

Starting point is 00:16:09 My husband deals with that. Okay. What about the cars? My car, we still have 32 on it and it's worth about 23. His truck, we owe 45 and I think the last time he checked it was worth between 18 and 23. Oh man why such a hit on these vehicles? Yeah. Is that rolling negative equity? What's going on with that? Is that what happened? Yeah that's negative equity right there. That's why we haven't gotten rid of it. Listen I would um one thing I would consider before you pay off these credit cards

Starting point is 00:16:45 I might consider getting out of these vehicles because tell me the payment on both of them So my truck is about 550 a month Or my car is about 550 month. Yeah truck is about 817 man. Oh, man. Let me tell you something I would $1,500 I would consider getting out of your car, that $10,000 that you're upside down, I'd pay it, and use whatever cash you have left, or even less to get a beater for you, $5,000 or $6,000. And then you cleared up $550 you have a month,

Starting point is 00:17:18 and you're out of that debt completely. Is $550 more than what you're paying on those credit cards combined? So monthly on all the credit cards combined, it's about $344. I do the car deal. I get all that money towards the car. I get out of that upside down vehicle because it's just going to continue to go down in value and that gap of being upside down is going to get wider and wider.

Starting point is 00:17:43 So I'd make that deal and get out of that car. And then I'd be really thinking about how to get out of his. Look for private sale to see what it's worth private sale and see if there's anything you can do to close that gap. And it might be the side by side, selling that side by side, if you can get something for it,

Starting point is 00:18:01 might help you close that gap. But these vehicles are what's killing you. Oh yeah, I know it. I know you do. You're like, when you told me 18 for this $45,000 truck, that's shocking. So. Yeah, it's somewhere in between there.

Starting point is 00:18:17 He's looked, I've looked, and I'm like, I don't know what to do. It's like, we're gonna have to pay out more, so. Yeah, you might end up having to just write it out and pay for it, but check on the side by side. Make sure you're checking Kelly Blue Book again on that truck for private sale, just to see, because at the end of the day,

Starting point is 00:18:32 here's the way you wanna filter it through your brain. Ken, if I have a loan for 45,000, but I can come out with a loan for 18,000, I'd rather have, I'd rather owe 18 than 45, right? So when you're thinking about, do I take a loan to get right side up on this vehicle or to get out of this vehicle? It could be worth it to you. You know, it's not making it gone completely, but if you can do that and still have another

Starting point is 00:19:00 5,000, so would you rather owe 25 than 45, right? Now you got yourself a $6,000 beater and you're out of the vehicle, right? So that's the way I want you to filter through this math. It's not always gonna equal zero, right? It's just gonna be, is this a better situation for me? Yeah, to lower those, that monthly so that you can put more money in the snowball.

Starting point is 00:19:20 That's what you're prescribed in there. That's right, that's right. All right, very good. All right, quick break, and we'll be right back with more of the Ramsey Show. That's what you're prescribed in there. That's right. That's right. All right. Very good. All right. Quick break and we'll be right back with more of The Ramsey Show. Hey, what's up guys?

Starting point is 00:19:33 It's Jade Warshaw and I'm just going to cut to the chase. If anyone knows about paying off student loans, it's me. Okay. My husband and I had $460,000 of debt and $280,000 of it was student loans. So I know the pressure that you feel when you have that debt weighing you down. But I also know there's a way out because we did it and you can too. Getting out of student loan debt starts with taking control of the situation and Laurel Road can help. Laurel Road offers a free 30 minute consultation with a student loan expert to go over your repayment options and help make a plan based on your specific situation to get your student loans paid off fast.

Starting point is 00:20:12 OK, truth be told, refinancing is not the move for everyone. And my advice is that you should only consider it if you can get a lower rate or a shorter term. But if refinancing is your next move, I think it should be with Laurel Road. They offer low competitive rates and terms that could help you pay less over the lifetime of your loan. Plus, they offer interest rate incentives like an auto pay discount. So go to laurelroad.com slash ramsey to find out more and schedule your free 30 minute consultation. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. ["Winning in Your Relationships"]

Starting point is 00:20:55 Alongside Jade Warshaw, I'm Ken Coleman. This is the Ramsey Show. We're here for you. We wanna help you win with your money. We want you winning in your professional life. We want you winning in your relationships. 888-825-5225 is the phone number. Let's go to Boise, Idaho.

Starting point is 00:21:09 Bryce is joining us there. Bryce, how can we help today? Hey, how are you doing? Good, Bryce, how are you? Good. How can we help? Last spring, I graduated from high school and I worked throughout the summer and then went straight to college due to some family issues.

Starting point is 00:21:28 I didn't want to be home. And so I'm starting college. I'm past my first semester and I'm absolutely hating it and I'm not sure I really want to continue going to college and now I have debt and I don't know what to do. Okay. How much debt do you have? So, I took $3,500 in subsidized student loans and $2,000 in unsubsidized loans for just this year, plus some scholarships.

Starting point is 00:21:54 So I have a total of $5,500 in student loans right now. Okay. And it would more than double next year. Right. Well, I don't think there's going to be a next year. Don't you agree? I mean, we kind of need that. Yeah. So, I want to encourage you first. $5,500 in student loans?

Starting point is 00:22:10 Cake. Okay? Not fun. Yeah. I'm not minimizing how it makes you feel, but in the grand scheme of things, you being able to pay off $5,500 in the near future, extremely doable, and we'll talk you through that. I want to talk about the transition. I heard you say that you went to college,

Starting point is 00:22:30 essentially just to escape a really not so great family life, true? Yeah. So you kinda made this decision on your own, is that also true? Yeah. All right, so you can also make the decision to leave on your own, and no one's really giving you grief about it or it doesn't matter, correct?

Starting point is 00:22:48 Yeah, like I'd be grief for it, but it's not really something I care about. Right. In other words, your mom and dad didn't pressure you to go to college, yes? No. So I'm a big fan of not going to college in two instances. One, if the degree isn't the only way to do what I want to do, or if the degree isn't the best way to do what I want to do. In this case, you're presenting to Jade and I as though you don't know what you want to do, but I got a feeling you might have some ideas. Is that true? Some true some not too positive so all right give me

Starting point is 00:23:30 the most positive idea you got the top of the list we know it's not your favorite list we know it's probably not going to stay at the top of the list but I'm just curious right now what's at the top of the list and let me put it to you this way I really want to know what's the top of your list is and then okay if we were guaranteed we'd be successful at it would it still be on the list? So I'll ask you that in a second but I'm preparing your brain. So first what is at the top of your list? Some sort of fly-fishing guide up in Montana probably. Fly fishing guide in Montana, fantastic. All right, now let's ask you that question.

Starting point is 00:24:08 If I guaranteed you, and you, if I snap of my fingers, you were gonna be very successful at being a fly fishing guide in Montana, would you pack it all in right now and head that way? Or would you still have questions? No, I would leave everything and go do that. All right now, so then tell me then what you meant by, well I got a list of ideas Ken, but it's not real positive. Is it that it's not positive because you think it's a long shot, dare I say a fantasy to become a successful fly fishing guide? Is that why you said it wasn't positive? Yeah. Okay, what makes you believe that you can't be a fly

Starting point is 00:24:49 fishing guide in any state but Montana? Just oversaturated. There's a whole bunch of them and I want something I can do full-time and a career and they don't pay too good. So okay great Great answer young man. Now, why is it that fly fishing is at the top of the list? Describe why and give me ten seconds. Don't make it sound pretty. Just tell me your guts. Why is that attractive? I've been doing it for five years and it's something that my grandparents got me into and it's just one of my favorite things. Would you say you also love being outdoors?

Starting point is 00:25:32 Would you also say that the idea of wearing a white collared shirt and khaki pants and working in a cube sounds like misery? Is that true? Definitely. All right. You love nature, hunting, fishing, I'm guessing, is this true? Yeah. Alright.

Starting point is 00:25:49 So you know what I would be doing? I love that you've already gathered information that the fly fishing guide industry is pretty saturated and for a variety of reasons, which we don't need to discuss, it's very hard to make a living. However, would you say that there are multiple ways for a young guy like you who doesn't need a ton of money To get in and get started in other and let's call it Field and stream type stuff to borrow a magazine title, you know, whether it be the hunting or expeditions But anything that is outdoor whitewater rafting for to fishing to hunting

Starting point is 00:26:24 Does it have to be fly fishing for you to get the same thing you get out of fly fishing? Yeah. Yes, it has to be. I would say so, yeah. Why? Can I ask why? It has to be specifically that?

Starting point is 00:26:39 I like being out in the woods, but everything I do, every time I see water or something or I just have a connection. So you're telling me you couldn't get involved with anything else on the water and some type of stream or lake or something like that? Can I cut in? Yeah I know what you're thinking go for it. And this might be something that came with age Bryce I'm an old head, but let me tell you, when I first started in music, I had, I knew I liked entertainment, I knew I loved being on stage and I knew I had a voice.

Starting point is 00:27:13 And so my options, I didn't know all the options out there, but I thought that I was limited to one or two things that would make me happy in that career. Then something that happens, and Ken, you probably have the vocabulary for this, but what I found is as you start walking down a road and you start turning those door handles, other opportunities present themselves,

Starting point is 00:27:33 and you try them out and you realize, oh gosh, I never would have known that this would scratch that same itch and really be a better fit for me down the road. And so I'm just saying, you do wanna open up your eyes a little bit to other opportunities. Yeah, Bryce, you're gonna have to take some advice

Starting point is 00:27:51 from your older bro and older sis on this one, because we've been down this road. And I understand at this point in your life where you go, that one thing I really, really love is fly fishing. And when I'm doing that, I'm at peace. By the way, that can still be true, but it might be a hobby.

Starting point is 00:28:09 It might be a hobby, it might be a little side hustle, but if I were you, I would head west young man and I would start working for an outfitter, I'd start working in that industry fishing. Because part of me wants to go, I think you could be pretty happy if you head down to Florida and you were on one of those deep sea fishing boats and you're helping people pull

Starting point is 00:28:29 a big old giant whatever out of the water. Deadliest catch? Yeah, well now that's next level. You're gonna scare the boy. You're gonna scare him. But Bryce, I think you have to, here's my point. To summarize this, yes I would drop out of college. You don't have the money for it and you don't have the need for it. You don't need a degree to do

Starting point is 00:28:50 what you want to do. And at this point in your life, you need to be away from family anyway. And I think there's some wisdom that you've got. I think you've shown some maturity there. And I would go explore, and I would jump from, in this case, I'm fine with you jumping from job to job, thing to thing in that industry so that you figure out, because Jade, you would have never guessed in a million years that you would have gone from where you went. Yeah. Artist, volleyball player in college. You're all over cruise ships. And now you literally co-host the second largest radio show

Starting point is 00:29:28 in the world, one of the top podcasts in the world. You didn't see yourself sitting at this desk ever. It was never in your bingo card. Never, we evolved. I thought I wanted to be a recording artist, and then I got an opportunity to work on cruise lines, and I tried it, loved it, fell in love with it. Why would it help him to, you see, you went on cruises and sang as a professional. Yeah, I did, and I fell it, loved it, fell in love with it. Why would it help him to see you went on cruises and sang as a professional?

Starting point is 00:29:47 Yeah, I did. And I fell in love with it. But I also saw a lot of needs in the market there. And it sparked an idea to start a business. And it's the business my husband runs to this day. It's his passion in life. Never would have gotten to that. And, and that helped me find the Ramsey Show. And it's what I'm doing today. So we evolve as people. It's great to take that first, you know, spark and run with it, but you never know what it'll grow into. And Bryce, hear what she just said. You don't have to start a business tomorrow or next year.

Starting point is 00:30:15 Just go work and go work in that world that you know you love. It's similar to fly fishing. Don't limit yourself, but get in that area. And I promise you with connections, it's gonna take off. Hang on the line. Chris, let's give them a copy of my best-selling book, The Proximity Principle. This is a great read for you young man. This is The Ramsey Show. Remember the good old days of the Internet before it was a privacy nightmare

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Starting point is 00:31:54 88825-5225 is the phone number. The Ramsey Show Annual Listener Survey is now live. We love to know your favorite parts of the show, what you like, what you don't, what you want to hear more about, whatever it is. We do want to know what you want from us. We're here for you. So there's two ways to participate in this. Text the word survey to 33789. That's 33789. Text the word survey to 33789. Or you can go to ramsysolutions.com slash survey ramsysolutions.com slash Survey or we've got a link in the show notes if you sign up to take the survey

Starting point is 00:32:30 You'll be entered to win a $500 gift card. That is our appreciation to You alright to the phones we go. Michaela is joining us now in Salt Lake City, Utah Michaela. How can we help? Hi, how are you guys doing? Good, how are you today? Good. My question is, we recently found out through my sister-in-law, my husband and I, that there is inheritance money we did not know existed through my husband's parents who got it from his grandma and they he's one of nine siblings and all of them have used that we know of have used that inheritance money for paying for grad school and we did not know this was available we paid our way through grad school and my husband

Starting point is 00:33:27 graduated about three years ago and we are in between baby steps three and four trying to save up for a how and so we feel a little, I don't know. No you feel a lot. Whatever you feel it's a lot. Wait are you in the will and it just wasn't distributed to you or were you not in the will to get it? We're not sure. It just slipped through my sister and mother's past weekend on a family trip that grandma's inheritance money paid for her husband, my brother's, my husband's brother to go through grad school. And we asked, oh, is this the same for all other eight siblings? And she said, yeah, you guys didn't know?

Starting point is 00:34:13 I'm like, no, we paid our way through grad school. Who's the executor? Who's the, who's in charge of it? Probably, I would guess my father-in-law. Okay, have you gone to him or well, not you, but has your husband? Because I feel like this is his battle, by the way. Has he gone to the grandfather and said, did I say to his dad and said, did I did I miss something?

Starting point is 00:34:38 And here's the thing. And can hold me back. But you can't go in entitled. You just have to ask, you'd be curious. Hey, I was on a trip and this was what I found out. I don't know, but it sounded like it was for everybody. And if it is, I wonder if we, you know, we're overlooked in some way. Can you give me more information?

Starting point is 00:34:56 Yeah, I guess that was part of my question. We have not approached him yet. We haven't had that because I don't want to come across as, you know, needy or. Well, remember you don't need to be involved in this. This is not your deal. Your husband, now, if you got to give him a pep talk and fire him up and let him borrow some of your backbone, that's one thing.

Starting point is 00:35:18 Yeah, but you don't talk, but you don't say anything to the in-laws on this. Okay. Because is it possible that the sister-in-law doesn't know what she's talking about? It's possible. I guess that's part of the issue is they're quite a bit younger than us

Starting point is 00:35:41 and they own two properties and we are like, you know. No, no, I get all this. First of all, I don't. I don't. Wait a second, I detect something and I'm not trying to call you out, but I detect the error of,

Starting point is 00:36:02 I'm not gonna say jealousy, but I detect an error of. We should have what they have. Or they shouldn't have. Does that make sense? I'm not I'm not trying to put you on the spot, but yeah. So let's talk about this, then let's pretend that you said, hey, we're not in the will.

Starting point is 00:36:24 What gives? Like, what if you talk to what, we're not in the will, what gives? Like what if your husband talks to the dad and it's like, sorry, yeah, you weren't a part of this. What then would your attitude be towards it? I think I'd be okay with that. Okay. No, you wouldn't. You would not be okay with being the only,

Starting point is 00:36:42 your husband being the only sibling who didn't get some of this inheritance. I mean you at least have questions right? I would have questions but I don't think I honestly don't think I'd have I wouldn't ask any further. Okay yeah but I just want to call this out I know you're going another angle. No you call it out Kim. I'm not saying you're wrong. I think she kind of admitted to it. I couldn't hear her. But, but I, Michaela is Nat, it's very natural for you to feel this way because your husband feels though he might be wronged. And when your husband or spouse, well, this goes both ways, gets wronged. We, the spouse, we're on their side. We just really get affected. So all of this is very normal. Glad

Starting point is 00:37:26 you called us. We've already told you what we think, but your husband needs to sit with dad and soon and just ask questions. This is what I was, my wife was told. Is this true? He gets to the bottom of it and then you guys will have to deal with whatever that is. But make no mistake about it. Her comment about the younger sibling and what they have that was telling it's telling but it's also it's all coming from this one issue. It is and and I think that when you're in baby step two, we could use it more than them. That's what this is. Yes that's what I'm getting at. When you're in a tough spot you're looking around

Starting point is 00:38:05 and you're just kind of looking for anything you can hold to. I get it, yeah, we're not, I wasn't saying that in a way to be definitely not ugly towards you, but it's worth examining and going, okay, what's my, like, to your point, Ken, what's my true feelings here? And it's okay to have feelings.

Starting point is 00:38:22 We then just have to make sure our response is the right way. And that's all I'm saying, Michaela. I want you to feel okay to be angry. Yeah. Because if this is true, you and your husband have every right to be angry. Ken, I've told you the story before. When Sam and I got married, his grandfather,

Starting point is 00:38:40 there were stipulations on the will, and he's allowed to make those stipulations because it was his money, right? And so the the stipulation was you got to marry someone else Jewish and guess what jade warshaw is not really yeah did you not know i'm just what gave it away no i'm just kidding but um so that was part of it did he uphold that the grandfather no he did not get the money and so i mean he stuck to his guns the grandfather did well the grandfather passed away So what ended up happening later on that's right later on will yeah It's in the will but later on his his wife at the time said I really like Jade

Starting point is 00:39:14 Oh, and I'm gonna we're gonna make this happen and she amended it Yeah, they got a minute and not only for me, but the other cousins who decided not to go that route Yeah, hey cheers to her by the way. I don't know if it wasn, I don't know if it was right. Dave might be like, no, keep it the way, you know, the wishes are the wishes. Oh, wait a second. I don't know what Dave would say, but I'm not Dave. And I got a strong opinion on that. If the grandfather leaves the money to his wife, yes, he had explicit instructions, but the other day he left it to her. She was very it's now hers She was very solid on the fact that if he had she said if he had met you he would have changed his mind That's what she said to me. I think she's right. But my point is it's now her money. Yeah

Starting point is 00:39:56 She gets to decide what she's gonna do. That's back cuz he passed it to her. That's facts. Yeah. Yeah, so I Can understand to your point? I can understand the feeling of having emotions around the thing. Tough stuff. It's not easy. Yeah. But in this case, and this is what I don't like for her. I don't like that sister-in-law. Drop that. Yeah. On vacation. Do you think there was a little intent behind it? Is that what you're

Starting point is 00:40:25 saying? I don't know and I don't want to go that route because I don't think that's helpful to Michaela. What I am saying is I would immediately go into the father if I'm her husband and because we don't know if sister-in-law knows what's going on with the nine other siblings. You know what? It's very possible unless she knows of a reason he could have been withheld, which we didn't ask her. That makes sense to me. It's very possible he just got overlooked. I don't buy that. Like that whoever the executor is just,

Starting point is 00:40:53 you don't buy it. Well, you know, now that you say that, I have three kids. Yeah. And I remember telling Stacey, like, because we had three under the age of three, that's kind of happened quickly for us. Yeah, it did. And I remember going, as they got a little going I'm glad we didn't have more than three I don't understand how parents who have like six and seven and eight and nine how do they do it now I can see maybe maybe this happened maybe there's some money just sitting over there waiting to be

Starting point is 00:41:18 collected maybe he's the middle child I don't think so though yeah all right good hour thanks for the call Micha Michaela. This is The Ramsey Show. 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.

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Starting point is 00:42:48 welcome to the ramsey show we help you win in your life we want to win with your money we want to win in your professional life we want you to win in your relationships i'm ken colman jay borshaw is joining me tripple eight eight two five five two two five to play eight two five five two two five is the number let's start in Casper, Wyoming Marissa is there Marissa, how can we help today? Hi, thank you for taking my call

Starting point is 00:43:14 My husband and I are working on baby step number two and realize that we might be paying some stupid tax We started at a hundred thirty three thousand dollars in debt about six months ago and have paid off $16,000 already. Way to go. However, my husband and I disagree about what we should do with our lease vehicle. Our original plan was to finish paying off our lease and then purchase it outright. That would be $42,000 in total. My husband thinks it's a good idea to get rid of the car by selling it back to the dealership and paying the difference of about $9,000.

Starting point is 00:43:45 Doing this would help us get out of debt eight months sooner, but I'm worried it would leave us in a vulnerable state because we would only have my husband's old truck, which needs about $5,000 in work and has $440,000 miles. So my question is, should we get rid of the lease car to get out of debt sooner? Yes, but not necessarily with the idea of only leaving you with that old truck. I think it's a combination of both of it. So you say if you finish paying out the lease in order to purchase it, is it an additional $42,000 or is that what it will be have been altogether?

Starting point is 00:44:23 Yeah. So the $42,000 or is it is that what it will be have been all together Yes, so the 42 will be all together. It'll be 26,000 after the lease period Okay, so you'll pay an additional 26,000 Yes, and for the 42 and then to get out of it You will pay 9,000 But you'll be only left with a truck that's got 442,000 miles so what would it look like if you got out of the lease and but you'll be only left with a truck that's got 442,000 miles. So what would it look like if you got out of the lease

Starting point is 00:44:48 and then you got a second beater and paid, you know, maybe $6,000 for it? And so now you're back to two vehicles, but you're still $10,000 less debt. And I'm just talking about on the extra portion of the lease not the okay so we did we reached out to the dealership originally we wanted we tried to like try one of the lease swap options we've had the car for just a year but we've already used $2,000 worth of miles because we planned on purchasing it the dealership did offer us $28,000 to basically get the car back and again we'd have to pay the $9,000. We do have $9,000 saved so we're kind of stuck there. My

Starting point is 00:45:31 husband also works from home and he has a work vehicle as well in the event that he needs to travel or go anywhere. Okay so he has a work vehicle plus the old truck. Yes ma'am and my point of view of it was like you know why would we get rid of the car you know we're'am. And my point of view of it was like, why would we get rid of the car? We're already on plan to get out of debt in two years. Car is already factored into that, but my husband is like, oh, well, Dave would say get out of the car

Starting point is 00:45:55 because you're gonna save $42,000. And my kind of question was, do we take out a loan? Well, you've already sunk half the cost in. You've already sunk more than half the cost in. So I see what you're getting at. Let me ask another question to get at it another way. What's your income combined? So it's, it's 160,000 yearly. I don't work. I'm a stay at home mom. I have three boys,

Starting point is 00:46:17 um, just had a set of twins a year ago. They're 18 months. Um, so it's only his income. He makes again, 160,000 yearly and after tax, that's about 9,500 monthly. You know, you have options here. Neither of you are wrong. It's just what you guys decide to do together. Because you are on the track to pay this off in two years or less, and because it's no more than 50% of your annual you know, annual take-home pay, Ken, I'm inclined to say you could keep it. You've already sunk a lot in. And honestly, when you play out the difference,

Starting point is 00:46:50 it's a $10,000 difference. It sounds like if I'm doing the numbers as quickly as I can in my head. It's up to you guys. And at the end of it, you're left with a nicer vehicle, you know, a newer vehicle, and then you've got the old vehicle, then you've got the work car. Whereas if you were to get out of this, like I said, in order to really get into something, you'd be paying 9,000 plus maybe another 8,000 for a vehicle.

Starting point is 00:47:15 So the difference is pretty negligible. It's pretty negligible. I'd probably keep it. Ken? And are you saying that? Well, I agree you, but are you saying that because of momentum? I'm saying that because the pay, the... You can go either way, I agree, but why do you choose keep it? Because they've already, I'm saying because in order to keep the car, it's as if they were going to go out and buy a 26,000 car today. Like if she called me and said, hey, I owe $26,000 on this vehicle. I'm filtering it like that. So if you called me today and said,

Starting point is 00:47:49 you know, I owe 26,000 on this, I'm $9,000 upside down, what would you do? I'd say keep it. Because it's essentially, mathematically, it's the same thing. You'd have to pay the $9,000 difference and you'd have to get some cash aside to get you a beater.

Starting point is 00:48:06 And once you add all that up, it's gonna be a $10,000 difference. And so you could say anything to get out of debt faster. I'll take, you know, $10,000 is better than, you know, oh, and 0123 is better than 0133. You might say that, but because your timeline is regular and you've got a good income and there feels

Starting point is 00:48:25 like there's momentum here, I'd keep it. And that's where I'm leaning. Momentum is the deciding factor. With us both agreeing that either or, that's fine, but there's a momentum play there. And to your point, 10 grand in the grand scheme of things here. And knowing that she said, listen, the other car, they know $5,000 of work is coming up. It kind of just, it felt like it was eating away at that margin even faster if that's true if that's accurate Yeah, so let's go to Jayden in Albany, New York. See if we can get a call in here Jayden. How can we help?

Starting point is 00:49:02 So I'm getting ready to be I'm going tomorrow for a job on my starting to week uh... maybe traveling i have to cover my own hotels would it be worth it to get like a little toe behind camper no more than five thousand dollars instead of paying for hotel rooms every week you know what what do you estimating your hotel spend will be uh So I'm going to be staying at each job site for about four to six weeks. So from most hotels I know of are around the $80 a night for what I'd be looking for.

Starting point is 00:49:39 Yeah, probably if that's what I was looking at, you start running the numbers on $80 a night. So with the toe behind, normally we're not fans of RVs and things like that, but in this case, he's saving a lot of money. I feel like that's a good move. Unless I'm missing something, you start running the numbers on those four to six weeks. If you run the average five weeks that's seven nights right so you're looking at 35 nights times 80 dollars and you're doing that multiple times yeah i probably would do something like that are you paying for it outright or you going into debt for it you'd pay for it outright how long are you going to be doing this job? Is this what you do for four to six weeks out of the year or four to six weeks every six? Like, what's the frequency that this is happening?

Starting point is 00:50:33 So I'd be working in the Albany area. Some weeks I would be working in Florida. Some weeks I'd be out in Washington state. I'd be a boiler for the Boil America's Union. Uh-huh. But you said four to six weeks. Is that for the whole year or that you're doing that? No, it could be four to six weeks. Go to another job site.

Starting point is 00:50:52 Got you. Four to six weeks. He's going to rack up some money pretty quick. Yeah. Yeah. If that's, I'm not into those things because they go down in value, but I would be looking for a creative solution. Let me put it to you like that.

Starting point is 00:51:02 Well, a little $5,000 one that he pays in cash. Yeah. And it saves him thousands of dollars long-term. Yeah. Yeah. Boys staying in $80 a night hotels, I'd rather stay in something that I know. Yeah. You know what I'm saying? You seen an $80 a night hotel lately?

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Starting point is 00:53:58 There's Why ReFi? We trust Why ReFi because they help you with a low fixed interest rate you couldn't get anywhere else. To help you stick to your budget get out of debt learn more at whyrefi.com slash Ramsey that's the letter yrefy.com slash Ramsey. It may not be available in all states. Turn that mic on. Alright today's question comes from Carlos in Texas. My parents both work

Starting point is 00:54:22 and I'm fortunate that they have provided well for my sister and me. They have always planned to pay my way through college like they did for my sister. The problem is that I want to pursue a career in medicine. I know that it's extremely expensive. I know that it's an extremely expensive choice and I don't want my parents to be paying off my education forever.

Starting point is 00:54:41 I will start applying to colleges soon and have applied for scholarships, but was wondering what else I could do as a 16 year old to start earning on my own to help them pay for my education." Anything and everything. Yeah, all of it. When you're 16, you kind of got a wide open list, but you also have a lid, right? Yeah, yeah. So, you know, there's like certain things you're just not gonna get. So that's everything from I'm bagging groceries or working at my grocery store. I am providing some type of specific services, babysitting, right? That's a good one. I am pressure washing. I'm cleaning trash cans. I'm scooping dog doo doo. I remember years ago on the Ken Coleman show,

Starting point is 00:55:21 I shared a story of a 14 year old who started a pooper scooper business in his neighborhood and bought himself a $14,000 boat. Holy smokes! Wow! 14. Went around and said hey do you have dogs? If you do, I'll get it. And you're tired of scooping the poop. This is what I charge. I come by every week and he just went door to door and you know there's a combination there of moxie and some people like I'm gonna help this young man out. Yeah sure sure. But then there's just a thing where you went you just eliminated something that every dog owner wishes they didn't have to do. They love the dogs. 100%. I love my dogs.

Starting point is 00:55:57 Let me tell you what I don't love. Pooping the scoop. Yeah so like what can a 16 year old do? Anything that you can do, do it. At this point, and you've got a wide array of things, your hourly jobs, working for companies. Scholarships. Yeah, scholarships. Full-time job. You know, I would just get after it and set a goal. Set a goal that's reachable, reach that goal, and then start upping that goal.

Starting point is 00:56:23 In other words, you know, it could be intimidating for anybody but certainly 16 year old to set a goal I want to make $30,000. No, set a goal for I'm gonna make $10,000. As quick as I possibly can. Get a little poster board out. Stack 500 there, I stack 1200 here. Make the little thermometer. Yeah and I think that's what I would tell. What would you add to that because Because you're very enterprising. I love what you said, Ken. I think that's exactly right. Yeah, I think applying for scholarships

Starting point is 00:56:50 becomes your secondary full-time job. If working is full-time, there are so many scholarships out there. And now you're still young. You still have time to add things to your scholastic resume to be eligible for more, if that makes sense. So I think those two things combine. I also think sitting down and having a conversation

Starting point is 00:57:11 with your parents about what the parameters are, what the limitations are. If I'm going to medical school, what does that mean? What can they afford to pay for? And is that the type of schools that you're looking at so really having clear expectations is going to be a big part of this as well. Yeah love that. All right let's go to Jerry now in Kansas City. Jerry how can we help? Hey thanks for taking my call. Sure. I'm a little nervous. You're doing great. I'm 57. I just want to know what I need to do to retire.

Starting point is 00:57:45 I put a little bit into the work retirement. I think I got maybe $30,000 in it. I only owe $27,000 on my mortgage. What's the house worth? What's it worth? Maybe $150,000. I don't know.. I mean honestly, I've had it for a while I just got to the worst in the last seven years and I'm just trying to get things straightened out. What's your income? 57,000 and you have any debt at all other than the house. I

Starting point is 00:58:21 Do not Okay, so I do have my two to six months emergency fund. Great. Okay. Good. So for a living. Um, I worked in the state of Kansas. I'm a barbershop inspector. No way. That's cool. How many barbershops does one inspect in a given week? Um, honestly, it just depends on what part of Kansas I'm going. If I'm going to a city or going to western Kansas where it's all windchill time. I do the whole state. Well, I'm going to turn you over to my colleague. She's got her retirement calculator handy, ready to go, and she can walk you through that. But one of the things I would just kind of put in your mind to think about

Starting point is 00:59:02 after this call and over the next couple days is is how can you increase your income at 57? I think you can, I know you can, but at 57, I'd like to see you dramatically increase your income. I really would. And what I mean by dramatically is I'd like to see you try to get it to six figures. You may have to do that through two jobs, but I just think you've got this opportunity right now at such low expenses, it sounds like to me. You have no debt. You almost have a paid for house. You're in a position now that if you're about 2000 a month. Exactly. Okay. I have about 1000 a month to play with right now. And that's just right right now I am really in favor of you Jay's gonna give you some real numbers

Starting point is 00:59:48 But I would circle a number and I think Jade will help you at the end of this call have a number in your mind You go if I earn this much and I put all that into retirement I think you could be surprised what she comes up with and with that I pass the baton But I want to make it more money because I think he's got a chance to really make up ground. Yeah, I agree So right now you said your budget is You're spending two thousand per month, but you've got a margin of one thousand So three thousand is what you is what you're living on right now, right? My brain home. Yes. Yeah. Okay. So the idea here is

Starting point is 01:00:21 The idea is when you retire, whatever that nest egg is, there's a couple of things here. You wanna be able to live off the interest and not really have to pull from the principle, right? That would be ideal is what we're looking at. And then the other part of that is the way that you make that an even less stressful situation is you just lower your general expenses,

Starting point is 01:00:39 which you've done a really good job of doing and paying off the house would be like kind of the final nail in that tree there. So tell me again, because I was putting numbers in your house is worth 150. Did I hear that? Yes, I would guess. And what do you own? And what do you say? 27. Okay, so you'll be done with that in no time. But to Ken's point, you're going to have to increase your income because at this point, if you're just investing 15%, like we say, off that gross number, if you continue to do that,

Starting point is 01:01:09 let's say you stop working at 68, you're gonna have about $260,000 in retirement. And if we're talking about just living off the interest, 10% of that, that's not a living for you, right? So we need to essentially double that. So if you do what Ken said, and then you go from, you know, putting $712 a month into retirement, and you go to putting $1,400 a month into retirement, well, suddenly that doubles what you have there, and you're closer to $450,000.

Starting point is 01:01:39 Do you see what I'm saying? So this really is an equation that is tied directly to your income. It is at this point. And the great news is, Jerry, you have such little expense and you sound like you're very fertile. So this is increasing your income. And here's the deal. A guy like you, you know, that state job, I'll bet you, you know, I know you have a lot of travel there. I would start thinking about transitioning out of that. But I know you probably love those state benefits and you're probably counting on some of that. But I would really thinking about transitioning out of that. But I know you probably love those state benefits and you're probably counting on some of that. But I would really look at that experience that you have,

Starting point is 01:02:10 being an inspector, you're a detail guy. I just think kicking the tires to see what other career path, similar to that kind of work, but in the private sector would pay, and or some part-time work or contract work because if I could double my income and you were to put the doubling away,

Starting point is 01:02:31 you're gonna really be comfortable. Really, yeah, especially for you. You could, at one point, you'd be able to invest beyond the 15%. I agree. And that's gonna be a huge free because listen, social security, we don't know what's gonna happen with that.

Starting point is 01:02:44 We already know in the next 10 years, benefits could be significantly less. So we don't wanna depend on that. But you can do this, Jerry, that the best is yet to be for you. But I do think it's setting your eyes a little higher on income and invest in yourself. And I think you're gonna be very, very, very stable.

Starting point is 01:03:03 All right, quick break. We'll be right back with more of The Ramsey Show. the stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. And while we can't go back and change any of our old stories, the world is waiting to see what you and I are going to write next. As we enter 2025, I want to encourage you to examine your old stories and be intentional about the new ones you're writing. And I'm not talking about goals that are going to be long gone by February. I'm talking about writing new stories that will change your life forever,

Starting point is 01:03:49 for the better. And if you're like me, therapy can be a great place to explore the old stories, even heal from them, and begin to write new ones. And if you're thinking about starting therapy, I want you to consider my friends at BetterHelp. BetterHelp is 100% online therapy and you can talk with a licensed therapist when it works for your schedule. You just fill out a short online survey to get matched with the licensed therapist and you can switch therapists at any time for no extra cost.

Starting point is 01:04:16 So start writing a new story this month with BetterHelp. Visit betterhelp.com slash deloney to get 10% off your first month. That's BetterHelp, H-E-L-P dotcom slash deloney to get 10% off your first month. That's betterhelp, H-E-L-P, dot com slash deloney. Hey, Dave Ramsey here. Dr. John Deloney and I are coming to a city near you on the Money and Relationships Tour. You, the audience, will vote to choose the topics we talk about, things that impact your life like investing in your future, money, stress and marriage and more. We're coming to Louisville, Durham, Atlanta, Kansas City, Fort Worth and Phoenix in April and May 2025. Tickets

Starting point is 01:04:52 are at their lowest price right now. Grab yours at ramsysolutions.com slash tour. Welcome back to the Ramsey Show alongside Jade Warshaw. I'm Ken Coleman, 888-825-5225. Is the phone number to jump in? We'd love to help you. Jade's going to lead out on any of your money questions and I'll lead out on your income questions. We want to make more money so that we can actually do good things with it. As we've said on the show for many, many, many years, your income is your greatest wealth building tool and I wanna help you when it works so we're making more money.

Starting point is 01:05:30 So call away and we'll do our best to help out. Luke is gonna start us off in Atlanta, Georgia. Luke, how can we help today? Hey, how are you guys doing? We're doing well, Luke, what's going on? So my wife and I graduated college. We both borrowed about a hundred thousand in student loans and now each of us like just over the course of it we've got about two hundred thousand

Starting point is 01:06:01 each in debt. So we've got about double to doubled interest. And just trying to, you know, see about, you know, like refinancing just what options, you know, like, just some some guidance. So just to clarify, you both borrowed 100,000 each. And over the course of time, both of your 100,000s have doubled and now you owe 400,000 is that correct? Yeah yeah so it's um yep that's that sounds right. How much time I'm just curious. So we we got our associates which took like you know like two years and then finished a bachelor's which like was two and a half closer to like three years just how the semesters worked out. But it doubled in that amount of time?

Starting point is 01:06:50 Yep, so over the course of, I don't know exact specifics of my wife, but myself and it seems like a bunch of people that I know, they're in the same, you know, with the interest rate. It's because your payment isn't covering the interest and so your your loan is not moving you're you're paying payments but your loan is not moving the toll right so I so my minimum my minimum payment is 2800 and something and that's only I

Starting point is 01:07:19 like did the math and I'm only pay it's only five only 500 of that is going towards the principal. Yeah, exactly. Okay. 300 is is is going to interest. Tell me about your Yeah, listen, this is a lot of debt. We're gonna help you out. Tell me about you guys's income, because I'm hoping that you've got some jobs that are paying. Yeah, so I'm a pharmaceutical rep. I make like my base, I make about 130. But I and projected I should make over 300 this year. Okay, what about your wife? Excellent. My wife, she stays home with our daughter and she's currently pregnant again so she'll be just a stay at home mom with our children.

Starting point is 01:08:12 Well, let's see about that. So what was her career before she stayed at home with the kids? She was an office manager for a dental surgeon. Okay, and what did she earn doing that? Probably like 45. Is that what her $100,000 degree was for? Uh, yes. Okay.

Starting point is 01:08:37 So there is a part of this equation. We'll get to it in a minute. There is a part of the very real part of this equation where she would be working in order to help out with this. And there might be a daycare situation there because you guys have a lot of debt. I was hoping that you were going to say you made three hundred and your wife made two hundred. You making three hundred is really, really good. But just the four hundred thousand in student loans, I'm guessing there's debt other places as well. Am I right? No, we we rent. I have a like a car. Yeah, tell me about that.

Starting point is 01:09:09 Like payment. I just it's I put zero down. I have the good credit like yeah, but tell me what do you own a car? It's a what I owe on it. I think I owe like 28,000. Okay. What about your wife's car? It's paid for okay. Anything else credit cards? He locks tell me any other debt you have because it plays into this

Starting point is 01:09:28 Just just student loans and then just my car. Okay, so 428 is what we're looking at. You're making 300 so this is kind of like the person who made $60,000 a year, but owes 160 right you're it's the ratio is the same So there is gonna be a level of sacrifice if you want to get out of this quickly. You could talk to my friends at Laurel road. They offer student loan refinancing for high income earners. And so you have the opportunity that maybe you could get a

Starting point is 01:09:57 lower payment at a lower rate. What's your rate right now, your interest rate? So I have 12, is it 12 different loans? I think I have 12, because I went, you know, like I went like spring, summer and fall. Yeah, yeah. But they're all different. And they're anywhere from 11, yeah,

Starting point is 01:10:19 like they're anywhere from 11, just say 11 to like 14 and some change? Listen, I talk to them because a lot of what they're offering is 5% and lower. So I would do that. I'm not saying that it'll happen and that you qualify, but I would definitely look into that.

Starting point is 01:10:37 Because for you, it sounds like you could actually be a good candidate for that. Because what I'm looking for, what I'm always looking for with student loans is a way to lower those minimum payments so that you can focus more of your freed up money on the smallest debt and knock it out. Because with these student loans, even though you have this grand amount, it's still, like you said, broken into a bunch of littler loans. So if you do the debt snowball, which is what we teach, you're listing all of those little loans from smallest to largest. And you're

Starting point is 01:11:03 Yeah, and knocking off the small ones, the big actually in high school we did a Dave Ramsey like like our math class we had the whole you know we did like took the whole Dave Ramsey course and yeah so we already have like so we have like you know we already have over 10,000 saved but but it just, you know, like the payment so much that it's like, you know, if you don't pay more than just like the minimum payment of 2800, and that's right on it literally forever. That's right. And if you're, if you're not satisfying the interest in your, within your payment, you're going to pay forever and you're not going to see the loans go down because

Starting point is 01:11:43 you have, you seen your balance go down. You've, you're not gonna see the loans go down. Cause you have, you've seen your balance go down. You told me you've seen it go up. I've just seen it go up. That means that is a clear sign that you, A, had it in forbearance for a certain amount of time and the interest continued to accrue, or the ratio of your payment is not actually satisfying the interest.

Starting point is 01:12:00 So the way to get out of that is to make sure your pay, really would be your payment getting higher so that you're satisfying the interest and you're paying it off because money's going towards the principle. So again, I rarely say this, but I would I would contact Laurel Road and see if you can get a lower payment. And the point is not the point of a lower payment and lower interest is not so you can keep your debt around forever and be comfortable with it. The point of it is so that, like I said, you can have the margin to pay it off faster. And you're right, a $200 minimum payment, listen, Luke, I know how that feels. You know, my husband and I had 280 of student loans,

Starting point is 01:12:34 but 460 total debt. So I get that feeling, I'm right there with you. The good news is you've got a good shovel. I do think that it could be worth talking about your wife going back to work. I don't know what the timeframe or horizon of that is, but the solution to this problem is lowering your expenses, which let's talk about that for a minute.

Starting point is 01:12:55 When you make $300,000 a year, in your mind you should be driving the Tahoe. You know what I'm saying? Like in your mind you should be going, I don't know, to a nice steakhouse. In your mind you should be going on vacations, know, to a nice steakhouse. In your mind, you should be going on vacations, but that's not going to be the reality for you right now. I want to lean in on something. You just said something I think is good. Luke, if your wife,

Starting point is 01:13:13 if you could just snap your fingers based on her degree, what she's done in the past, what could she make ballpark? Be conservative if she went back to work tomorrow. We had something sitting there waiting for her. What do you think she could make? Probably 80 to 85. That'd be a huge difference. Bro, I'd have that conversation because let's say you put every bit of that take home to these student loans, you're paying this thing off

Starting point is 01:13:36 a lot faster than you think. Yeah, that's what I actually just talked to her about that. And just, the irony of this is she's a business economics guru and I am an economics minor and you know, just going through, you know, school, we didn't qualify for any grants help or whatever. The only way we were getting through, you know, doing it. Oh, it's a racket. Is, you know, doing it.

Starting point is 01:14:07 And then you're like, well, that was a bad idea. Yeah, yeah. Yeah, you guys are poster children for this racket. The federal government, soapbox warning, federal government has turned itself into a bank. It was never intended to be a bank. The student loan program, make no mistake about it, is a bank for the government to make money

Starting point is 01:14:24 off the backs of the people it is supposed to serve. And this couple is an example. So I'd get real aggressive, try to knock it out quickly, because this stuff, you just don't want it hanging around forever. And please, if you're listening to this, don't go get a student loan. This is The Ramsey Show.

Starting point is 01:15:09 Hey, George Campbell here. So you're thinking about buying or selling your home. This is The Ramsey Show. 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 ramsysolutions.com slash real estate. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is joining me. 888-825-5225 is the phone number to jump in.

Starting point is 01:15:34 We'd love to have you join us. So every day we take calls on The Ramsey Show and we don't know what happens after we hang up the phone. Did they take our advice? Sometimes we go, maybe they shouldn't. Who knows? We don't always have great days, right? But this is fun. The latest episode of 90 Day Money Makeover is now available on our YouTube channel. Episode two features Sean and is it Dara or Dara? Dara. Dara, who just cut their income in half after welcoming their new baby boy. And now Dara is working part-time.

Starting point is 01:16:10 They're gonna have to make other significant lifestyle changes to continue paying off debt. But they don't have to do it on their own because, my partner over here, Jade Warshaw, is walking alongside of them. This is so fun. This is kinda like your version of extreme home makeover, huh, you're kinda getting in with folks, sitting down with them. I'm just of them. This is so fun. This is kind of like your version of extreme home makeover, huh? You're kind of getting in with folks,

Starting point is 01:16:27 sitting down with them. I'm just guiding them. Camera's rolling. Coaching them up. They're the heroes. They're the ones actually getting in there and making life changes. And really what I love most about it, Kim,

Starting point is 01:16:36 is it's real. Like, this is not a scripted show. This is not a, you know, full makeup, hair and makeup show. This is, we're going into real people's lives, into their house, and seeing how real things play out. Because the truth is, you get the advice and then you sit down and you sit at the table with your spouse and go, okay, what are we going to do? That's the truth. And you pick on the list of tough things, you go, okay, let's do this one. Let's do this one. You know, maybe we're not ready to do this one yet,

Starting point is 01:17:05 but we'll go, that's real. Yeah, absolutely. Very few people, I mean, I don't know, I feel sometimes that if we write a prescription, I don't know everybody that follows it to the tee, but you can still make a lot of life change, you know, in a short period of time. So we did that.

Starting point is 01:17:21 Sean and Dara, you gotta watch it. Their income went from 200,000 to 100,000 when she stayed at home with their new baby boy. And they made a lot of sacrifices to pay off a good amount of debt. So I won't give it away, but take a look at it. You can find it. Well, hey, you can find it on the Ramsey Network app, but you can also find it on the highlights. Ramsey show a YouTube channel, 90 day money makeovers, what you're looking for there. And this is really fun. So this will really inspire you.

Starting point is 01:17:48 By the way, speaking of the Ramsey Network app, it's the only place to get the full episodes, that's three hours of the Ramsey Show. That's the only place you can get all three hours. Download it for free using the link in the show notes or searching Ramsey Network on your app store. If you're on a radio, don't worry, after this segment we

Starting point is 01:18:05 continue our third hour. So again, the Ramsey Network app, only place to get all three hours of the Ramsey Show. All right, let's get to Mianka in Washington DC. Mianka, how can we help? Hi, I'm a single mom of two, four and nine months old. Bless your heart. I have a mortgage, a car I'm upside down on. Yes, I have credit cards, student loans that I don't currently pay on. To be honest, I don't even know what the status is. And I just am looking for me. So, and I just downloaded the every dollar

Starting point is 01:18:51 and started filling out the budget. I'm cutting out things like Hulu. I've just deactivated it, which is hard. Good. I mean, I am ready to take those hard steps, but honestly, childcare in this area is like the wild, wild west. And, um, I do get help with one daughter, but the other one I'm solely on my own. So I'm looking at 1700 a month.

Starting point is 01:19:22 Okay. Um, I make one 15, but after like healthcare for all of us and everything, it just seems like, I don't know what I'm doing. I don't even. So, okay. Take a deep breath, cause it is a lot. Just take a deep breath and blow it all out.

Starting point is 01:19:44 Okay, good job on the income. $115,000 single mom, bravo. That's very good. You're right, childcare is expensive. 1700 for the one feels, now I'm not in your area, so I don't, maybe I don't know, but it does. No, that's 1700 for both. Oh, for both, okay, that's good.

Starting point is 01:20:01 That is good, that is good. Good. When you do your budget, when you put it into every dollar, what did you find? Were you in the red? Yes. Okay. How much were you in the red? About $700. Okay. And right now, is it credit cards that's covering that $700 in the red? Yes. Okay. So tell me more about the actual numbers on the debt. Can you tell me what you owe on your car? On my car I owe $11,402.

Starting point is 01:20:33 Okay. Do you know what it's worth? The car max is like $3,200. Okay. Tell me about the credit cards. What do you owe on those? About $3,700. Okay. $3,700. Student loans, what do you owe on that? $71,850. Okay. And that's on a zero payment right now? Yes.

Starting point is 01:21:00 Okay. And then tell me about your mortgage. What do you owe on it and what's the thing worth? So I owe 276 And right now I think it's worth a little under 400,000 And I took maternity leave but my job doesn't offer it. So I had a short term disability and I took a hit there. So I'm in forbearance with my mortgage company that's coming to an end. So I've been making half payment.

Starting point is 01:21:38 Okay. So you're with forbearance, that when does that come to an end when you start paying the full payment again? Next month. And when you do that, does that mean you're going to be more than $700 in the red? Or is that $700 with the full mortgage payment? That is $700 with the full mortgage payment.

Starting point is 01:22:00 Okay. Okay, good. So this is a tough equation. Are there things in your budget that you can cut out is I mean, because the truth is, your large, here's the truth, your largest debt isn't you're not even making a payment on it. So we can kind of just for the purpose of this kind of put it out of our mind. So if we do that for a moment, we go, well, wait a second, now, now I'm on the hook for $14,000, just with the car and the credit card. So let's look at it in smaller chunks and go, well, wait a second. Now, now I'm on the hook for $14,000 just with the car and the credit card. So let's look at it in smaller chunks and go, how quickly could I pay off $14,000? Okay, that's what we're solving for right now. And so with this childcare thing, you've got a four year old, when do they go to kindergarten? Because a lot's going to pop off when you get one of these out of daycare? Um, so she'll be, she can go in 2026 because her birthday is late in November.

Starting point is 01:22:51 Okay, that late birthday. Okay, so there, there is, there is a light at the tunnel there. Let me tell you, I couldn't wait till my son went to kindergarten. There is a light at the end of the tunnel. It doesn't come as quickly as we want. I'm not trying to wish your time away with your little ones, but you know what I'm saying. Um, is there anything you can do to clear that $700? If you walk through your budget, is there anything? Cause I'm talking about everything. Here's where I want you to look, uh, non-bud non-spending items. I want you to look at your withholding. Let's find out if we're getting a tax refund every month or at the end of the year,

Starting point is 01:23:25 that's money that you could be having in your budget every single month. So do you get one? I'm looking forward to getting one this year. I'm not absolutely sure cause I did like the exemption cause I needed all the cash. Yeah, okay. So I just kind of dug myself out of that hole cause I had a tax bill. So I just kind of tugged myself out of that hole

Starting point is 01:23:45 because I had a tax bill. So this year when you get your taxes back, that's going to be a tell-all for you. If you're getting back $3,000 or whatever it is, you need to go and change your withholding because essentially that $3,000 you could be getting throughout the different checks you get every month, right? Right.

Starting point is 01:24:02 So if that's the case, I want you changing that. Next thing, are you investing at all? I have a 401k. I do the match. My company matches up to 4%. Okay, so how much is that every check? I think it is roughly around like a little under 300. Mama, there it is. We need that. A little under 300 at every check. That's getting really close

Starting point is 01:24:31 to $700 a month. So let's take that. We're going to temporarily pause that, that investing until we get this debt cleaned up. And then other places that you can look, obviously you're starting the right thing with subscriptions, go through with a fine tooth comb. Their first thing is to get out of the red and then we can start talking about ways to increase the income so that we can start making extra payments. Focus on the car and the credit card. You can do this. Call us back if you need some help. the Orangey Show. Hey, what's up guys? Episode 2 of 90 Day Money Makeover is available right now on YouTube. This series follows real people as they take on the challenge of transforming their finances and their lives in just 90 days.

Starting point is 01:25:49 In this episode, watch as they face new obstacles, celebrate wins, and push forward on their journey. And of course I'll be walking alongside them every step of the way. Okay. Now here's a little sneak peek of what the new episode is all about. Me and Dara back in November, having you son, a baby boy. We'd have $87,000 in debt. I've been in debt since I was like 18 years old. I gave birth to him. I knew. I said, I cannot leave him with someone that I don't know.

Starting point is 01:26:18 I don't care if we're eating rice and beans, Sean, I told him. There was no going back. When you guys called him to the Ramsey Show, it was like, I think that we should push them harder. Baby Jonathan being born is a wake-up call for us to finally change. I can't go on another month. Wake-up call. You know, over the next 20 years, it's important. You know, we got to get this right.

Starting point is 01:26:41 You want to pay off your debt. You want to get your time back. You want to get your time back. You want to get your home. Nothing usurps those three.

The Ramsey Show - There’s Always a Way out of a Financial Spiral

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