The Ramsey Show - You Can’t Win Without a Clear Goal

Starting point is 00:00:02 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken. Common Sense is weird, so we're here to help you transform your life from the Ramsey Network here in the Fair Wins. Credit Union Studio, this is The Ramsey Show. I'm Jade Warshaw next to me, Dr. John Deloney. We're going to take your calls all hour long. Get involved.

Starting point is 00:00:31 We've got Michael, who's in Springfield, Missouri, online one. Hey, Michael. Hi, how's going. Doing all right. How can we help? Right. So I am currently being offered a position in the company I work for that would require me to relocate to a much more expensive area. I was just calling to see how much should I push for? I like the company and I like the position, so I don't want to push too hard and have it get offered to somebody else. But I also don't want to undersell myself. So is this something that you're viewing a salary or is it a moving stipend? Like how are you viewing the structure of that?

Starting point is 00:01:07 this. So I am paid hourly. The relocation costs would all be paid for the company card that I have. So I would use that, you know, pay for the U-Haul or movers or however that's then. But is your hourly wage going to stay the same in this new position? That's what I'm asking is how much I should ask for. We haven't gotten to the negotiation on what the salary would be for it or anything. Do you have a sense of what it is? Do you have a sense of what it is? So right now I make $42 an hour. Okay. And I live pretty comfortably, comfortably in Springfield.

Starting point is 00:01:46 I'm looking at the area I would be relocating to rent-wise. It looks like it's about $1,000 to $1,200 more for about the same rental in the area. Uh-huh. But that means groceries are going to be that much more expensive. Tires will be that much more expensive, right? There's websites with cost-to-living index that you can put in one zip. code and it will compare it to another. I don't know them off top of my head, but I've done it before. If you make this much money in this zip code, you'd need to make this much money in that

Starting point is 00:02:17 zip code for it to be comparable. My bigger question is, what is it about this position? Because it sounds like you're about to cash in on a place where you like living and you make a great hourly, like a really great hourly wage. What is it about this position you're worried about somebody else taking if it's going to move you to a town where you don't know anybody. It's going to be expensive. In your overall life, this life you're building is going to be of less quality. So I really like the company I'm working for. Yeah.

Starting point is 00:02:47 And this position would just move me up a level in this company. Okay. Kind of give me a quick boost in where I'm, I don't know, how do you like ranking with the company. Okay. So would it be something that... Go ahead. Sorry. The area is, it's a very nice area, obviously, cost of...

Starting point is 00:03:07 living. Where is it? You'd expect to be nice. It is Charleston, South Carolina. Okay. They have, from what I can see, they have really good schools there, but like said, it is much more extensive. That's the, that's the only thing I'm really worried about with this.

Starting point is 00:03:22 So if I take a quick look, and I would do this if I were you, I would just pull it up. Like, you could use a comparable, like what John said, or you could, you know, look and chat GPT and see. But just me doing the search. for you. If I worked in Springfield, Missouri, and I was making 42 an hour, if I wanted to move to Charleston, the equivalent would be somewhere around 60 bucks an hour. So you'd go from making 87 a year to maybe 133 a year. And for cost of living, that's what they're saying is equivalent. This is just one search. I'm not saying this is the be all end all. This is just me doing

Starting point is 00:03:57 literally 30 seconds of research to try to see. And then from there on, I'd keep going, I'd keep going down the rabbit hole and try to compare that a little bit further to see if you're, if you're on point or if you're way off. But that's that's the type of work that I'd be doing to try to figure out this number. And don't leave it to chance. Like, actually look up, you've looked up rents, look up restaurants, look up local expenses,

Starting point is 00:04:24 and actually get real numbers in front of you. But again, I want to go back to my original question. I didn't ask it good when I first asked it. My expectation for any company, if you're getting promoted and asked to move across the country, it's going to come with a significant salary change. And so either you haven't asked any questions at all, like you're just kind of flying blind here, or this company's not as great as you think they are. You what I'm saying? This was brought up to me yesterday.

Starting point is 00:04:56 Okay, okay. I'm trying to be, like, have all my notes in the line and everything when I try to bring this on. My negotiating rules when it comes out, I always ask, is there a salary range for this position? Or what's this position going to pay? Yeah, it feels far down the line to not know anything about salary. Exactly. Salary. And I'm always cautious when a business comes and says, hey, we've identified you for this job, you should take it.

Starting point is 00:05:27 They're imposing their set of values on your life. You know what I mean? And it may be that you do the math and not only the math, but like we get, I've just been there. I've wanted to move up in an organization so bad that I didn't stop and ask myself, what kind of life do I want? And there's places where you'll go where you might ask to say, like, I would love to have this job.

Starting point is 00:05:50 I don't even love to have this salary, but I don't want that life. Right? Because most companies, man, if they're going to pay you a lot, they're going to expect a lot, rightfully so. And so you should have to ask yourself, do I want this life more than I just, I like this company. I want to move up this company. But dude, my guess is if they're asking you to move across the company, they're giving you a promotion, they're eyeing you as a future leader of this place.

Starting point is 00:06:13 It's going to, the money should take care of itself. And if they come back and say, we're going to give you a dollar an hour extra, then you're going to take a net financial loss, which I'll even say this. I've taken pay cuts to get to the position I wanted or get to the place I wanted because I trusted myself that over the next couple years I would get to where I wanted to be financially. and that's worked out for me every time. But that's not always the case. And so if you say for two years, I'll take this salary and as a family, we're going to make this sacrifice because it puts me in a position for the next move, that's all fine and good. Just make those decisions clear-eyed. Okay.

Starting point is 00:06:50 Is it just you, Michael, or do you have a family? I have my niece that lives with me and I have my son. Okay. Yeah. Just to kind of consolidate everything we just said, the first thing I would do is do what John said. I would just ask, you know, in a fine way, hey, is there a salary range? We've not talked about compensation at all. I just want to get an idea for what that might be.

Starting point is 00:07:12 And then you can take that. And yeah, tonight I would go do some research and look further into it. And the biggest thing you want to look at, because we talked about restaurants, we talked about childcare. We talked about apartments. But eventually, if this is the job you want, you're going to want to purchase a house. And again, just a quick search, I can see the cost of living for purchasing a home. is significantly higher in Charleston than it is in Springfield.

Starting point is 00:07:37 So those are the types of things that you want to just have in your back pocket as you're doing that negotiation. So you can really feel confident about what you're asking for and know that you're not asking for something out of just trying to get more money or trying to be greedy or anything like that. But there's a fair basis for what you're asking for and it actually makes sense. How old are you, brother? I'm 27. I'll be 28 this year.

Starting point is 00:08:02 Most any supervisor you have when they're promoting you or you're working on getting another job somewhere, it can feel awkward to ask for a dollar amount. A good respectable company, a good respectable leader, a good respectable businessman will know this is just business. And we're making a deal here. And if somebody looks down on you because you think you're worth this much, now obviously you can be obnoxious and way out range. But if you say, hey, I've got two kids I'm taking care of. I'm a single dad. I'm handling the stuff and this is what I would like. Hold your head up high when you have that conversation.

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Starting point is 00:10:06 That's health trustfinancial.com. All right, all right. Let's go to Kyle, who's in Lake City, Florida. Hi, Kyle. How can John and I help? Hey. I wanted to see if y'all could help me put together a plan to clear all of my debt and be on the road to passive income. I'd love that, but tell me more about the passive income.

Starting point is 00:10:41 Yeah, you said passive income, dude. Come on. What do you mean by that? I really would love to own rental properties. Okay, got it. Okay, so tell us where you're at today and we'll help you come up with a route to financial property. peace and wealth. I just bought a house two weeks ago for $215,000 in Lake City. I do have a little bit of debt, personal loan.

Starting point is 00:11:08 It's $5,500. I have a little bit of credit card debt between me and my wife. It's around roughly $7,000. Okay. And I think that's all of our debt. Okay. What are you guys making? I'm the only one that works.

Starting point is 00:11:23 She saves home with the kid. I make around roughly $72,000, $75,000 a year. Okay. And what do you take home currently a month? It differs because I work so much overtime, but anywhere from, I'd say, $4,000 to $3,000 to $36 to $4,200. Okay, $36 to $4,200. That feels a little bit low. are you pulling out for investing?

Starting point is 00:12:00 I do have a Roth IRA set up for my son and myself. Okay. All righty then. Okay. So I like your goals. I like the things that you're saying. I like the things that you've already started putting in place, which is I do want to start investing for the future.

Starting point is 00:12:19 You clearly know that home ownership is an important part of the equation. The only thing that I would tweak is the order that we're doing this. so that you can get the most bang for your book, number one, and so that you can really be on a firm foundation as far as your financial foundation is considered. So keep that in mind as I lay out for you what I would do if I were in your shoes and what I am doing as someone who is, I mean, kind of in your shoes, right? So the first thing that I would do, Kyle, is I would pay off this debt. because as long as you have debt, number one, you have risk in your life.

Starting point is 00:12:57 And as long as you're making debt payments, you don't have the full income, your full income at your disposal to use it to build wealth, to use it to buy income property. Would you agree with that? Correct. Okay. So that is thing one. So let's figure out how can we pay off this debt. Do you have any money saved? I do not.

Starting point is 00:13:18 Okay. I've kind of just drained myself moving into this house. got it okay so that would be my first order of business is I got to pay off this debt I don't have any savings so I'm actually in a really precarious situation here no savings lots of risk so numeral uno is I want to get a thousand dollars saved we'd call that baby step one around here I'm going to tell you about seven different steps to get you to where you want to be the first step is a thousand dollars saved it's not to be all end all you're probably thinking jade that's not much at all it's not it's just enough that if something happens you know the car breaks down you have a

Starting point is 00:13:52 flat tire, something pops up that you forgot about. You don't have to use a credit card or go into debt in order to cover it. Okay. So how quickly do you think, yep, how quickly do you think you could get a thousand dollars saved? Most people do it in 30 days. I currently own two vehicles and I'm trying to sell one of them. So, I mean, that would be my emergency fund. Okay. How quickly, I mean, how long has the car been for sale? Roughly two weeks. Two weeks. Okay. I like that idea, but I also like you going out and selling something that you can offload quickly, picking up a part-time job, having kind of a backup plan in case the car doesn't sell in the next two weeks because you need that $1,000. And then if you do that, when that car does sell, you can actually use that to start paying off more of this debt. Right?

Starting point is 00:14:43 So these cars that you're selling, what will they bring? I'm trying to sell it for $4,500, but I mean, on the low end. that I bring three. Okay. And then what will you drive? I have a trust. Okay. That's paid off?

Starting point is 00:14:59 Yes. Okay. All of our vehicles are paid off. Okay, great. So offloading this vehicle, working extra, not only will you have Baby Step 1 saved, but now you can do Baby Step 2, you can start to pay off this debt smallest to largest. So I think I heard you say $5,500 on a personal loan and $7,000 in credit cards. Is it just one credit card for $7,000 or is it multiples?

Starting point is 00:15:21 No, there's two credit cards. Okay. So whatever is the smallest one, start with that one. You'll be able to knock it out and maybe some of the next one when you sell this vehicle. But do you see what I'm getting at? Yes. And then once that's done, now we can go to Baby Step 3. Do you know what it is?

Starting point is 00:15:39 No, man. Okay. Three to six months of expenses. And what I mean by that, it's not three to six months of paychecks. It's three to six months of what it takes to keep your household operating. So you need to know that number. And if you don't know that, you'll figure it out when you do your every dollar budget. We'll make sure you have it before you get off the line.

Starting point is 00:15:57 So those are your top three goals. And it's going to take you a couple of months to accomplish that. It's not going to take you all year. I think that you've got the money and you can go fast on this. But once you've got that, now we start the wealth building phase. Then we can start investing 15% into retirement. We can turn that nozzle back on, 15% of your gross income into retirement every single month. You can start with the Roth IRA.

Starting point is 00:16:20 If you have access to a 401K through your employer, you can do that. And then at the same time, you can put a little aside for your kids college. And if you have extra money to throw out the mortgage, you can do that. And that's how we're building wealth. All of those things, making sure we have savings, which is basically insurance against debt, right, having that three to six months, making sure that we're investing in retirement so that when the day comes and we are not able to work anymore, there's money. making sure that we're utilizing the forced savings account, which is the equity in our home. Right.

Starting point is 00:16:52 And then finally after that, now we can start saving up to pay cash for real estate, which is the only way, John, that we would suggest buying real estate over here. Listen, brother, like the words passive income, they just give me hemorrhoids now, dude, because it's not real. Like, if you ask any landlord who's truly invested in their properties, it's a hard life right and this idea that you're just going to buy something with no money down I mean that's what how Dave went bankrupt I'm just going to buy something with no money down and they're just going to make all these payments nobody tells you about the roof that goes out or the air conditioner that fails and if you've bought something with no money down or 5% down and you're trying to just get the the renter to cover this nobody tells you about

Starting point is 00:17:45 COVID anymore when they suspended rents for a year or more, depending on where you live. Like, it's just, it's a recipe for disaster. And so if you save up the money to buy a rental property and you want to have rent, that's a great, that's amazing. And that cash will come in and it will, you'll build up a stockpile of cash to replace the roof and the air conditioner's and whatnot. But it sounds to me like what you need is to start thinking about, is this a career I want, or can I work side hustles, can I work jobs on the weekends, can I build,

Starting point is 00:18:15 the career I have to create this extra financial margin because the fantasy of I'm just going to buy a bunch of rental properties and just let them set off to the side and they're going to do their own thing. It's just not for most people, it's just not real, especially if you're in a place where I'm going to get two or three. And I hear that all time, Jade, but they cash flow. Yeah. And it's like right now, right now they do. Or if there's a dip in the market and like I went through an 08 and 09 like suddenly the house is worth half of what, right? It's just there's so many variables out there. Absolutely.

Starting point is 00:18:48 And it's just this idea that I'm just going to get checks mailed to my house, like publishers clearing house in the old days. It's just not real. Yeah, having the right expectations, I think going in is so important. I feel like that's what you're laying out. If you think that it's going to be easy, you've set yourself up for failure. And not to say, I mean, there's people out there who do it, right? There's people who go about that route.

Starting point is 00:19:09 But the truth is what I laid out for you is a proven plan. It's a proven structure. It's worked for the last 30 years. I did it. George Campbell did it. John Deloney did it. We've all done it. And it's worked for us.

Starting point is 00:19:20 And not only that, but we talk to folks every day and we see the results of that plan. It's seven steps. And I didn't get to the last one. The last one is you finally have no debt, no payments. You're able to live and give like no one else. And so if you follow this structure, Kyle, or anybody who's listening, if you follow this, you're going to become a person who's a financially responsible adult. You're going to build wealth.

Starting point is 00:19:40 Right. The time is going to pass anyway. You're going to build that wealth. You're going to have peace. You're going to have freedom. your finances and this is the way to do it. This is the way to do it with the least amount of risk and the least amount of friction and the most amount of control over your actual money. I've met plenty of people over the years who had a product that they wanted to sell,

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Starting point is 00:21:16 com slash Ramsey. All right, John, let's get into it because what some people don't realize is that wills are so important. If you don't have a will, you better get one. Because here's some of the information that people don't realize about wills. They're not about your age or how much. stuff you have. That is the number one thing that people say to me, I don't need a will. I don't have that much stuff or I don't need a will. I'm not old. Guys, if you're an adult with people you love,

Starting point is 00:21:53 if you have kids, if you have pets, if you have anything that you want handled a certain way, you need a will. It gives your family clear direction when they need it the most. So if you're ready to create one, I want you to go to mama bearlegal.com. That's where I made my will with Sam Warshaw. and if you're a person who's like, hey, Jade, I don't know if I need a will. I'm just not really sure where to start. I want you to text the word quiz to the number 337-8-9. Okay, text quiz to 337-8-9 and will help you figure out which option fits your situation. And I want to speak to this.

Starting point is 00:22:29 What you just said a second ago, like, I don't have that much stuff. Just imagine you're 21 and you're in your first apartment and you have a guitar that you like. And even you've thought, I'm going to get my guitar to my buddy. If I die, I'm giving it to my buddy. Cool. But I want you to understand if you, something was to happen, you're getting a car, something God awful happens, right? And your mom goes up to the apartment and says, I want to get in there and get my daughter's clothes or my son's clothes.

Starting point is 00:22:54 Yes, thank you, John. They're going to say, no, you don't have legal right to this stuff. We got to give it to the state, and then your family has to go fight the state for that photo of your grandparents. Don't, like, it's as simple as getting online with Mama Bear Wills. Again, when we moved from Texas, is Tennessee, that's what I went to mom bear wills and made a will just until I got covered until I got here and could sit down with an estate person. So this is something that Jade not has used,

Starting point is 00:23:19 is what I've used. But it's something that simple. It doesn't cost hardly anything. And you can just so that your mom can walk up, your dad can walk up and get your stuff. And if you've got kids, you got pets, God help you, dude. Like, man, you got to have protection for your family. It's just a way of saying, I love you when you can't say it yourself anymore. And go get a will. There's no reason to not have a will. I agree. I'm so glad you said that because it's so true. I said it in the little read here, but it's true. That's the number one thing is people say, I don't have anything that's important. And if you just stop and think about the people who are important to you, that's the exercise. Think about the people who are important to you

Starting point is 00:23:59 and how much you value little things, a cookbook, a piece of jewelry, that pair of shoes, like, whatever it is, there are things that you value about other people. It's the little things. I can tell you, and I know you feel this. It's the little things that when you receive them, you're like, oh, I love it. Or maybe it's not stuff. Maybe it's not even a piece of jewelry. It is giving your folks, your older sister, your younger brother, let them go to your apartment and pack your things up as part of the healing process, right? And I know it sounds so morbid, but give them the grace that they don't have to go fight some faceless, nameless bureaucrat or some apartment owner or some rental house owner for an opportunity to grieve. Like, just get a will done.

Starting point is 00:24:44 I don't care who you are. Get a will done, man. I agree. All right. Yes. My son's not 16. I mean, he's 16. He's not 18. He has a long written out. Here's, you know what I mean? He gave it to me. And when he turns 18, that'll be one of the first things we do is I want you to take ownership of this. And, you know, we should have said this too. if you have children, you're tripping if you don't have a will because that is just, if you don't have a will and you have children, the state will decide what happens with your children. That's right. My buddy John says the only reason to not have a will if you're married with kids is if you hate your spouse and kids.

Starting point is 00:25:17 Man, I know that's right. That's the only reason to not have one. Yeah. Okay. So get a will. All right. We've made you feel guilty. No.

Starting point is 00:25:26 I might try to make you feel guilty. I'm just saying like there's just no excuse. It's adulting. It's adulting 100%. All right, let's go to the phone lines where we have Madison in Denver, Colorado. Hey, Madison, how can we help? Hi, you guys. Thank you so much for taking my call.

Starting point is 00:25:42 I'm a long-time listener and big fan. Thanks for calling. What's up? So I am wondering if my husband and I are morally obligated to give me sister $5,000 to pay a retainer for a lawyer. Why would you be morally obligated to pay someone else's legal fees, Madison? So little backstories. She got into this relationship about two years ago, married the man despite all of our family's warnings, has a six-month-old baby with him, and he is emotionally and mentally abusive. And so she was kind of having conversations with us about wanting to leave him because of the abuse that was occurring.

Starting point is 00:26:24 And, you know, in one of those heated family moments, you know, my husband said, you know, if you need money, like, we'll help you out. We're helping. We're not going to let you fall on your face. That was kind of the backstory of the conversation that was had. And then yesterday, she came to my husband asking for $5,000 to pay the retainer. You know, I think initially, I think it's less about the money. We're in a good spot. We're in baby steps four, five, and six. I think his family knows that we do pretty well financially.

Starting point is 00:26:54 Uh-huh. And we're kind of getting pressure from other family members about, you know, hey, you should give, you should give her the money. And I think initially I was on board for that. I didn't think that it would be $5,000. But also, I thought that there was going to be behavior change associated with this. And since she has left them, I mean, it's been pretty erratic spending. She got back into alcoholism a little bit. And part of me just really feels in my soul that this is a bad choice. Okay. And I was going to say that. And this is no gotcha. by any means. But the way you laid out the question, let me know that you already didn't want to do it because no one frames up giving as a moral obligation. If they already kind of know it's not a moral obligation.

Starting point is 00:27:42 So when you said that I was like, she doesn't want to give this money, she's got a good reason. I already knew that you were going to get to that. I think you know it's not a moral obligation for you to do this. The question is, do you want to do this? That's question one. Do you want to do this? Is this a need that you feel like you want to meet, I think is the question that I'd ask. And there's part of this, Madison, that I, I want to take them, even though they're the people that you would be helping or enabling deciding on how you want to view this. I want to take them out of the subject for a moment. John, tell me if I'm wrong here. When I look at, go ahead. Let me lay it out. When I look at this, I see people that you love and and people that you love struggling, right? And so it's hard to watch people that you love struggling.

Starting point is 00:28:33 So part of the question you have to ask yourself is, is it going to be harder for me to watch them struggle and go to sleep every night knowing, man, they're struggling, maybe I should have helped, maybe I shouldn't have helped. Is that going to be more of a sole tax on you? Or is it going to be more of a sole tax to be like, I can help in some way. Let's decide what that helpful way is and put a boundary around it and be wise there. And then will I sleep better at night if I do that thing and then I'm not watching them struggle in the same way. That's kind of what I go through in my mind and I think that that could be a helpful way to think through it for you and kind of remove them and their drama from the situation for a moment. I'll add some complexity. Is that cool,

Starting point is 00:29:13 Madison? Because I know this is already a simple enough issue in your home, right? To me, there's two separate issues going on here. And I'd have to think through philosophy, like I'd have to go on a rabbit hole and get all morose and like sit in my room with my light like my dark lamps and think about this like the word moral obligation okay um i tent my my impulse here so just take this is for what it is my bias my gut instinct here this has nothing to do with her and this has everything to do with i think all of us have a moral obligation to help kids yeah okay so my first impulse is forget this adult who's misbehaving who we told her don't get with this guy because that's clouding this whole issue right right now you got a kid yeah your niece or nephew is in an abusive

Starting point is 00:30:02 household and I'm coming guns ablazing for the kid right yeah and so like I'd have to I'd have to sit down and say is that moral this who knows but that's separate from the money right I'd feel an obligation about getting involved there now the second thing that seems like it's clouding it is can I just I'm going to be crass okay I'm just going to say it, and I might overstate my case a little bit. You don't like her. Right. You don't like his dysfunctional family telling you what to do.

Starting point is 00:30:33 You don't like that suddenly you want to do something nice, and now it's on you. And your husband's the one who said, we'll help you and do whatever. So he laid it out. If this was me and my house, I would not write her one penny. I would maybe commit to paying the attorney fee directly. Yes. So good, John. And I'm not going to borrow any money.

Starting point is 00:30:54 She's not going to own anything back, but I'm going to have some stipulations on the safety of this kid. And if I'm going to get involved that way. Hey, this is Dr. John Deloney. Sleep is a huge deal to me because better sleep means better health. And if you've been losing sleep or waking up, twisted up and sore because of some old, thin, gross mattress that wasn't designed with you and mine, I want you to start caring more about your sleep and your mattress too. When it comes to mattresses, I love Helix mattresses. They make mattresses for real individual people.

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Starting point is 00:32:18 Now's the time to change. That's Helix, H-E-L-I-X, HelixSleep.com slash Ramsey. With Helix, better sleep starts right now. All right, let's get right back into it where we have Andy, who's in Rochester, Minnesota. What's up, Andy? Oh, not too bad. How are you guys?

Starting point is 00:32:48 Doing all right. How can we help today? I may have created a savings monster out of my husband. He is just anxious that we aren't saving enough for retirement. And I feel like we are. And I feel like we're in a good spot where we can kind of pull back a little bit. Okay. Let's do something that's very culturally out of step.

Starting point is 00:33:12 Okay. For you and your husband, let's stop feeling for a second. And let's just look at math. Because investment's a math problem. It's a number. Yep. So when you say, I feel like we have enough and he says, I feel like we don't have enough.

Starting point is 00:33:26 You're always going to be at an impasse because you're expecting your bodies to solve a problem. They weren't designed to solve. What's the math you all are dealing with right now? So over the last couple of years, we've paid off over $400,000. Wow. Yeah. So we just have that. I know.

Starting point is 00:33:47 It's been kind of wild. Is that including a mortgage? No, that does not include a mortgage. Wow. That's student loans, a car. Girlfriend, this is a very exclusive club that you're in. Way to go. Yeah.

Starting point is 00:34:00 So we just kept that intensity and just threw all the money we were at debt into investing because we're like, we don't have kids. We're, you know, free will in it. Wow. So what do you currently have in investing? About $1 million. Wow, wow, wow. Okay.

Starting point is 00:34:20 And, you know, now that we have two kids, you know, it would be pretty. great not to live off of like 3,200 a month and just have a little more to live off. What do you all both, like, what's your combined take-home income? About 180. Okay. And how old are you guys? So I am 32 and my husband is 42. Oh, my gosh.

Starting point is 00:34:44 And he's concerned that you're not going to have enough money for retirement. How much does he think that you need for retirement? Does he have a number in his mind or is it an, ever-moving goalpost? It seems to be an ever-moving goalpost. He's like, I want to create generational wealth for our kids. I don't want our kids ever worry about having to care for us. Uh-huh.

Starting point is 00:35:10 Well, if he keeps on this pace, he's not going to have to worry about that because they're not going to know him and they're not going to feel an obligation to care for him. And if he has a goal, he can honor you both by making it a clear goal. I want to have $33 million. I want to have $25 million. I want to have $15. Right? He can say what he wants in a complete way.

Starting point is 00:35:33 Do you know what I mean? Versus it being, I don't know when we'll get there, but we got to get there. Because he's chasing a feeling. I want to say something and I want Jade to push back if I'm wrong, okay? Are you ready? Ready for this, Andy? Jade, I have a struggle and this is a personal struggle because I've made this mistake, I think is a mistake in my own house. When I'm married, we have goals for what we want

Starting point is 00:36:01 our life to look like now and down the road. Right. I don't get to have my own investing goal that my wife, that I drag my wife behind the back of my truck with, right? And vice versa, she can't have, I have a goal to spend this much money every month regardless of what's down the down the road. You got to meet in the middle somewhere. There you go. At some point. So Andy, he has a, a goal for what he wants the future to look like, which is an imaginary goal, right? It's based on a gut feeling. And y'all have to sit down and create where y'all want to be, right? Because if he has a goal of generational wealth and you have a goal of relational wealth, you want your kids to have these wild fun memories with the two of you. When they think of their dad and they're off at

Starting point is 00:36:46 college, they want to smile real big and they can't wait to come home and hug his neck. Like, those things are going to be incompatible at some point. Right? So we have to say, what is that going to look like in the present tense and in the future? Do you what I'm saying? Yeah. So let's put some numbers around this in a way that I think you can bring this to him and make sense and know that you've done your homework. Okay. So I hear what you're saying and I agree with you. I think at this point with the money that you've earned with the debt you've paid off and the wealth that you've built. Yeah, I think that there might be some pulling off of the gas pedal that you can do. That being said, let's pretend you did it the Ramsey way and you only invested 15%.

Starting point is 00:37:30 I don't know. It sounds like maybe you're investing more than 15%. Is that true? Yeah, we're probably closer to 40. 40. Okay. And that's, that's outrageous. So let me just, let's bring this to your husband.

Starting point is 00:37:43 What's your husband's name? Andy. His name's Andy too? Yeah, we're Andy Squared. Oh, your house is awesome. Now, wait, one's. Okay, Andy's, you already have a million dollars in retirement. Let's pretend that you just continue to contribute 15%. Right? So around $2,200 bucks a month. Maybe you did $3,000 a month. And you're only in your 30s, 30 and 32, I think I heard you say. So let's say at the age of retirement, let's say you let this grow until age 60, 62. Do you understand that that's $33 million? I know. I have ran the numbers, but I feel like he needs to hear from someone. Have you shown it to him on it? Have you shown him?

Starting point is 00:38:26 I have. I don't like... And then when you say, when you say, okay, here's the math, how much money do you think, based on your math, do we need to retire comfortably and build generational wealth? Challenge him on that level based on your math, not your feelings. Show me the math that you believe the numbers that we need. So what we can understand this on a numerical level, not just a feelings level. because you disagree on feelings. You feel one way he feels another way.

Starting point is 00:38:52 But we can all agree on math because math doesn't lie, right? Yeah. So that's what I would do. And then I would kind of be a little strong on, I believe that $33 million is enough. That's pretty generational. I think that's pretty generational. And if you want to build it out further and say, you know,

Starting point is 00:39:08 if at this age, this is assuming we don't make any more money, you can go more into the depths if you want to. But I also think there's something else here, Andy, tell me if I'm reading between the lines. here, okay? And I'm happy to be wrong. There's also a part of this you miss your husband. I mean, he works so hard, and we do have a lot of fun. And, you know, his job allows us to travel the country, but it's like...

Starting point is 00:39:35 Those are work trips. Those are work trips. Well, we actually go with him. His work pays for us to go with us. But he's working. But he's working. It's not a family vacation. And so what I'm saying is, at some point, you need to sit down and say, I feel like an accessory to the life that you want to live. We get to go along on the trips. And what you're working me and the kids are we're forming like parallel lives you what I'm saying yeah and that's the conversation beneath the dollar amount I miss you I want to build something with you I don't want to

Starting point is 00:40:07 be along for the ride of whatever it is you're building and doing yeah and by the way we're not we're talking 30 million dollars if that's not enough then I means we'll give up today and none of this is hear me say I none of this is shade on him. I totally get it. Like he wants to work hard. He's scared to death. He's reading the every headline in the world saying that it's all coming down. I get that he's just trying to go do what he can control, which is I'm going to make as much money as I can. I totally get that impulse. But the conversations, A, it's a math problem and y'all are going to be more than fine barring some wild incident. And if there is some wild incident, you know what? We'll deal with that then. But beneath that is,

Starting point is 00:40:47 you'll have two kids. You'll have a different life now. And we have to rebuild our marriage the way we want to build it. And right now, it sounds like you're living the life that he's hell-bent on creating. And that's a lonely place to live. Even if you get to go on cool trips, but you don't get to do trips together. You get what I'm saying? Yeah. Am I right or am I off? No, I think you're right.

Starting point is 00:41:13 I think he's just so anxious because both of his parents have literally nothing and we support. We're also supporting them in their retirement. and it's, you know, he just doesn't ever want to put our kids in that position. It hasn't taken anything away from, it sounds like being able to help them, hasn't taken away from your ability to invest 40% every month. Yeah. I think you guys really, I think there is a strong difference between what's happening in reality and what it feels like.

Starting point is 00:41:47 And I think you guys need to spend a lot of time looking at, John, I feel like I'm taking your content here, but looking at the facts. Just look at facts, yeah. And a definition of anxiety is I'm going to go to the future and find potential problems and drag those problems into the present and try to solve them. You can't. You can't. You all have done such an amazing job.

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Starting point is 00:44:04 I need your help making a decision. My husband and I are very indecisive. I are very indecisive. and so we need you all to tell us what to do. Unfortunately, we're good at telling people what to do. Well, thank you. Unfortunately, my husband lost his job last week. Oh, no. And was laid off. Yeah.

Starting point is 00:44:24 Thanks to the Ramflee plan, though. We're in good shape. Okay. But we do have an upcoming trip to Hawaii coming in October. I'm just kind of stuck. I feel, I'm not sure if we should go or not. I can understand that. Let's take, we'll get to the emotional part because that's big.

Starting point is 00:44:48 Let's be crass and just talk math. So if y'all have no debt and you have a million dollars in cash in the bank, that was dumb. If you have a quarter million dollars in the bank and this trip is going to cost 10 grand, that's one thing. If y'all are newly debt-free but you still have your mortgage and it's going to be pretty tight, that's a different thing, right? So where are y'all financially? So we are debt-free except for our mortgage. And I will say the trip is paid for, like our flights and hotels paid for. So this is basically just our spending money and boarding our dogs.

Starting point is 00:45:31 So I'm thinking around $3,000 for those two things. Okay. I work. So I bring home around $5,600 a month. Okay. And my husband is actually, he's being paid through August. And then in September, he's receiving a lump sum settlement of $40,000 for taxes. Okay.

Starting point is 00:45:57 So he's getting $40,000. What other emergency funds do you have? We have $21,000 in like the designated emergency. emergency fund and then we have about 25,000 and various other sinking funds for things that we would be able to access, you know, in the case of a emergency or, you know, if we're really in a bind. The biggest part of this is your income, the $5,600 a month. Can your household run on $5,600? I mean, I know it might not have all the bells and whistles, but can you guys live on that without having to touch other money? I mean, if we went back to how we lived,

Starting point is 00:46:38 lives in Baby Step 2. Well, that's what I mean by not all the bells and whistles. Yeah. You could pay the mortgage, pay the, you know, keep everything running. You may not be able to take as many vacations, may not do as much shopping or eating outright, but everything can keep going on the 5600. I mean, realistically, it's around 7,500. But if I needed to, I could walk that.

Starting point is 00:47:05 We could walk that back even more. I think you should do that regardless with a job loss. Yes. And here's why. There's the math problem part, but there's also the, like, you're in a big storm. And so I would, it's a thing you can control when things feel like they're out of control. And so just the exercise of you and him sitting down saying, okay, our lives have changed drastically for this season. Let's control.

Starting point is 00:47:34 The one thing we can control is how much we go out. Mm-hmm. And one thing we can, and it helps you metabolize this loss, and it's a loss. Getting laid off out of nowhere is a loss, right? And you can't control when the next job is going to hit. That's right. He's going to get a new job. We just don't know when.

Starting point is 00:47:48 And going back to the trip, especially going back to that Hawaii trip, I appreciate that the flights and everything like that are paid for. But I don't think that the trip is going to change your life if you go or if you don't go. But if you choose to go, which I think is probably okay. I would, yeah. I don't think you're going to enjoy the trip if you haven't done the math that John and I are talking about. If you don't feel good knowing, hey, we can exist on the 5600. We did it before.

Starting point is 00:48:16 We'll do it again. This is how we'll do it. We've already looked at the plan. I think if you know all of that, then you'll be able to go and you'll actually be able to relax on the beach. Yeah. And I also don't, y'all are in the grief stage here. It's like if you lose somebody close to you, there's that sense when it has. happens, I'm never going to laugh again.

Starting point is 00:48:40 Like the thought of doing something fun down the road seems absurd. The truth is, y'all set yourself up, you've already paid for 90% of this trip, you're going to have $100,000 cash between the $40,000 that you get paid and your emergency funds and sinking funds. Y'all are going to be okay financially. But don't make a decision right this second in that smoke, in that haze of grief on something three or four or five months away from now. Sure.

Starting point is 00:49:09 Does that make sense? What's his prospects look like for getting another job? I mean, he started looking, you know, the day that it happened. He does have an interview this week already. He was laid off about six, five or six years ago, and it did take about seven months for him to find something. And so... Okay.

Starting point is 00:49:35 what was that like for you? I'm worried about it. What was that like? Forget the money part of it. What was it like in your home with a guy who's been searching for seven months? Yeah, not fun. Okay. It's exactly right.

Starting point is 00:49:46 I recommend to any of my buddies who get laid off to go get a something job. Yeah. Go do something and be hustling all the time to get interviews and all that kind of stuff. And a something job will let you go, right? I'm not talking about something that's going to cage you up from eight to five. I'm talking about just go get a job. You have to get up. You have to shave.

Starting point is 00:50:09 You have to shower. You have to get up and go move. Say hi to people. And it just helps you walk a little taller. And when you have those interviews, you're a different version of yourself because you're productive. You're contributing to your house. You're doing a thing.

Starting point is 00:50:21 You get what I'm saying? So even if you said, I need you to go make $2,000 a month. And we're going to keep our life exactly the way it is right now. Yeah. Like there's a psychological benefit to him. inside of his own skin, inside of his own house, inside of his own marriage, that's going to be way more important than that $2,000 he brings home. Right, because then you know, hey, no matter what, I've still got this, what, $86,000, you know, in the bank, I've still got savings. We're still

Starting point is 00:50:49 keeping our normal lifestyle going. I'm just looking for a job. There's not, yes, he's going to feel pressure, but there's not the same financial pressure riding on it every single day. And that, that does show up in interviews, and that does show up in how you, you know, show up to these opportunities. And let me tell you, all have kids? We have one, yeah. Okay, how old? 12. 12. Perfect. I have a vivid, vivid memory of an older man at my church who got laid off from his corporate exec job. The following week, he became the church's janitor. And he did that for a year. He was there on Wednesday nights until late. He was there on Saturdays,

Starting point is 00:51:33 cleaning up the building, I'm going to go do something. And then he got paid pittance. But in that year, he began to ask himself what's important, what's the math on this, once the emotion, that just heartbreak of getting laid off. And he went and got a teaching certificate and became a teacher. And I remember seeing him at a, at the at the fair to go get a teaching job. And he changed his whole life. But that, as a young person, that was instilled in me is, oh, that's what men do. and you get laid off. You go do the next job, and then you might have a chance to change your career. So this is going to be a blessing for your 12-year-old to watch too. Back to school time means you're depending on your vehicles more than ever. Whether you're driving

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Starting point is 00:54:15 So that means you'll get an answer the same way that we'd answer it right here on the show. So ask your question today at Ramsey Solutions.com or just click the link in the description if you're listening on podcast or YouTube. All righty then. Sarah's in New York, New York. What's up, Sarah? Hi. Thanks for someone. Thank you for taking my call. I have a job offer on the table that I have not accepted because they're the caveat for buying a car. So I currently make $85,000. When I started, we were in a commission base where we got just under $35,000 when we're a hidden plan. The new position is 140 base and they're guaranteeing the salary for a year. So the first year is going to be $170. My cars are paid off. But neither are my cars qualify. They want a 20,

Starting point is 00:55:04 or newer. And they're giving $750 a month for the car, but I don't have enough to buy something that's not new. And I'm in a baby's up too. Is it a, are they asking you to buy a new car because they've done some sort of matrix algorithm for reliability? Or is this vanity? It's a sales job. It's a sales job. So I would need to put customers in my car. They are not offering a fleet car. So I would need to bring physicians with me places. Ah, okay.

Starting point is 00:55:40 So they want you to be fancy. So my 2014 is not going to be cutting it. How long will they pay you $750 a month? That is the entire time you work there. Everybody gets that amount, whether your car is paid off or not. And it also covers maintenance and insurance and whatnot. So I did some math. I can get a payment for under.

Starting point is 00:56:02 300 a month, so obviously it's low, but it's still taking out death. Yeah, my my, my, well, I just I have a very, I remember the heartbreaking conversation between a buddy who took an executive job that came with a car, that came all the stuff. And when things got tight at the company, the first thing that went was car stipends. That is my worry. I mean, I, I have, I remember that conversation because I was like, oh, dude, you should probably not work there anymore. Not because of, just if they're going to tell you here's what we're going to pay you and suddenly they start taking off dollars and cents and then say no no no that was a perk that's not a place I trust so anyway so let's um let's think through this four second so is it just you or your husband too or

Starting point is 00:56:49 my husband as well but we we have two young kids so he's mostly home um he's bringing in maybe 700 on the side it's not a ton um both our kids are too young for preschool So we saved on daycare. Tell me about your current vehicles. What do you have right now? 2014 Chevy Malibu, 2017 Hyundai Sonata. 2017. Okay.

Starting point is 00:57:13 Two small cars, nothing crazy. Uh-huh. And are they paid off or you're still working to pay them off? Yeah. Fully paid off. Neither of them are worth more than a couple grand. They both have high mileage. Okay.

Starting point is 00:57:26 So what I'd be looking for, what I'd be thinking about, When does this job start, by the way? When do you have to, what's the timeline here? I have to accept by Friday. Oh, Lordy. Well, yes, yes, yes. Let's start until October. So I do have a little bit of time and we do have a thinking fund for a card about

Starting point is 00:57:45 $3,000 right now. Okay. So I could potentially get something. I just don't know if I get something back to you. Here's what I'd be noodling around with my husband to see if we want to do this. I'd be looking. You said it's got to be a 20-23. there a mileage thing on it or just needed to be a 2023?

Starting point is 00:58:02 No mileage requirements. Okay. They have a like a mid, like a small to mid-sized SUV. They want to be able to fit enough customers in the car. So it's like they want like four seats minimum. Four seats minimum. No two-seat or no coop, you know. Yeah.

Starting point is 00:58:15 Okay. So I'd be scouring the interwebs for what that is and it can have high mileage. And you can get it at a deal. And over time if you wanted to, and this is if you want to do this deal, then at that point you're paying cash for something and they're paying you a stipend 750 a month you're not going into a car note i in no way would go into debt or a car note to do this because they are a i don't know who this company is but i guarantee you they have millions and millions and millions and millions of dollars and for some strange reason they're putting 30,000 dollars of risk on you and that's just not okay with me that bothers me because i'm like you've got the money why are you putting the risk on little old me right so i sort of

Starting point is 00:58:58 certainly would not go into debt over this. But if you're thinking, hey, we can cash flow this and for me to make $170,000 a year instead of $85 is a good deal and everything else looks good, that would be my only caveat is let me go on auto trade or wherever I can find and let me find something from 2023 that fits the seating requirements, that's got a ton of miles on it that I can drive for a little while. That's not costing me an arm and a leg because they're out there. And let me see, price that out and see, okay, I've already got three. thousand dollars can i find anything for eight or ten or between now and october can we i'm even okay if you're all you're all on baby step two if y'all want to pause and stack cash

Starting point is 00:59:42 yeah we i mean we it's pretty much paid off every we have like five thousand left on credit cards okay we have a good chunk that we've been dropping i'm okay if you all want to pause and just say okay from now from august until october can we put aside several grand a month Can we get there? And I like, Jades, like finding a nice, use Toyota,

Starting point is 01:00:04 use Lexus, like with real high miles on it, you can get a deal. Yeah. I'm looking, I've seen a couple of things on here that might be possible. And have a plan that in one year

Starting point is 01:00:15 that car rolls over to your husband who's driving the kids around and you'll have saved up enough to buy yourself another nice car. Okay. I appreciate it. Thank you so much. Yeah,

Starting point is 01:00:26 there's a really cool. Go on KBB. and you can find the 10 best used SUVs under $10,000. And I think that's a really great place to start and just to get some answers on what you need. But I want to, Jade, what you said is super important. Somebody, some actuary in a back room made the case. You know what?

Starting point is 01:00:46 Let's make them hold the note. Let's make them hold the depreciating asset. It's better for us to make them go buy their own tools and we'll just, we'll give them this much dollar amount. because we don't want to deal with it. And anytime somebody says that, fine, they get to do that. But what they're saying is you deal with it. And you got to look out for you because they're looking out for their best interest.

Starting point is 01:01:08 So you get to look out for your best interest. And in this case, certainly not taking on the debt. My goodness gracious. I do believe if you took October as the start date and two people, you and your husband got in a room and just decided what must be true for us to come up with this dollar amount by here. You all can figure that out. Yeah. Yeah. Whether that's, we got to call Aunt May to come over and watch the kids because I'm going to up my work hours. He's going to work up his hours. We're going to just go bananas between now and October. We're going to go baby step to lightening. I don't know. I'm just making something up. But like, take dead off the table because I think everybody in the planet would say that's a good deal. It's not that big of a deal. Plus I'm going to get a stipend. I'm not going to think about it. But man, I cannot get that experience out of my head.

Starting point is 01:01:53 No, I think what you're saying is right. And I do think that sometimes when folks are on baby step two, they get tunnel vision on being on baby step two. And I can't do anything else but pay off debt. But the truth is if you're going through a job switch, that is a bit of a storm mode situation where we would say, hey, this is a major life changer. You're relocating, you're changing your job. That is a time that we would tell you to pause the baby steps anyway to get your life. You know what I'm saying? And so this makes sense.

Starting point is 01:02:21 there are times, let me pull up another example. Obviously, when we talk about paying off debt, we're like, do the debt snowball method, right? List them smallest to largest. But we also say, hey, if you can get out of your car and if you can sell your vehicle today, that might not be the smallest debt, but if you can sell it to get right side up, right? So there's times where you need to look at it more critically. More nuance. Yeah.

Starting point is 01:02:45 And go, okay, what is it that I'm actually trying to do here? I'm trying to pay off debt. It is a good deal for her to take a job for. 170,000 when she's currently making 85. Correct. So if that means we have to pause for a second in order to get the dat gum job, that makes sense. So that's just, I don't know, sometimes I feel like we can get a little forced for the trees.

Starting point is 01:03:07 What's that analogy? We start staring at the trees when it's the forest. Yeah, man. Yeah. So there's nothing, you're not doing the wrong thing by pausing the baby steps temporarily so that you can get this car so that you can get the job. Get the job. A lot of banks are happy to hold your money, but Fairwin's credit union helps you make progress.

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Starting point is 01:05:01 Let's go straight to Sharon, who's in Jacksonville, Florida. Hi, Sharon. You're on the line. Hi. Hi. I have a really interesting question. I am going through the divorce after a long time, 26 years, and I'll be walking away with having to pay the equity that's in our home of $375,000.

Starting point is 01:05:27 Wow. And so I haven't been in, had any major debt in a long time. So I'm trying to figure out if I have a balance on the current mortgage at $90,000. And it has a 1.625 interest rate. Oh, my gosh. What's it worth? It's worth $9.50. Oh, okay.

Starting point is 01:05:50 But the new, so I was thinking about doing a cash out refy, but the new interest rates are 6.275. Yeah. Yeah, that's the world you find yourself in. What is it about this house that you want to hang on to? I mean, I've been living in here for 15 years, and I know I don't think I would want to rent. Sure. Well, you wouldn't have to rent. Yeah, if you sold it for 900, you pay off your 90 and you're down to just, I'm just going to do easy math.

Starting point is 01:06:20 You're down to 800. You paid the 375. And now you've got, after realtor fees, you've got 400 grand cash to go do whatever you want. Right, but then if I go buy another house, then I'm going to have to buy it at these new market rates. Yes. Or you go write a check for the fanciest condo in the block and you don't have yard maintenance or house maintenance or anything like that. And I want to hold, I want to halt real quick before we go forward because I think that this is going to be really important to have this mindset going through this conversation. Things are going to change.

Starting point is 01:06:51 Yeah. You're divorced now. That's a huge change. So having a changed interest rate is probably one of the, the smaller changes that you're going to experience, right? So I want you to approach the conversation knowing that there's a lot that's going to change. Interest rates is kind of par for the course on this. Does that make sense? Everything in your old life is over. And so, and that's hard to metabolize, especially if you didn't ask for this divorce, if you didn't want it and it's been thrown on you,

Starting point is 01:07:21 or if you did ask for it and you just wanted to keep your regular life just minus your marriage, everything is different now. And I see a lot of folks want to hang on to their house because it's where they've lived forever. It's where the kids are. I want to try to keep a semblance of my old life while also dealing with this huge schism. And I guess what I wanted to tell you, Jay is trying to tell you,

Starting point is 01:07:43 the life you had is over. And if part of your new life includes this house, great. We'll help you get there. But it is going to come at a significant cost. Things are going to be different. What is your take home? income for the for a year yeah about 200,000 okay excellent after taxes yeah so you're doing great

Starting point is 01:08:03 financially yeah I can afford it um I just I haven't had debt in so long well major debt I really have is a 30,000 remaining on a vehicle loan I know how y'all love vehicle loans that I have $30,000 left um I got $550 and TSP $100,000. in the Roth IRA, $96,000 in an annuity and about $50,000. Wow, great, great job. Yeah, you're doing great. I really think that, I think what John said is really true and take some moments to think about that.

Starting point is 01:08:41 If you end up keeping this house, you do the cash out refi, you refinance at, you know, current rates, 15-year fixed rate, yeah, you're going to have a higher interest rate, but you're going to get to keep your house. So there's the trade-off, right? You're deciding this is worth doing that action, right? So you do that tradeoff or your other option is, you know what? Yeah, fresh start sounds good. I'm going to take my cash, my 375, my 400,000. Maybe I'll see if I can find something in cash that fits my needs. Maybe I will rent for a season, save up a little bit with it and then do something in cash or maybe I'll use it as a down payment on what I want, right? Those are the options. All of them are a tradeoff in some form or fashion and your choice gets to be, gets to truly be which one do I want. And I think that, that if you can frame it like I get to choose. That's kind of cool. It's not being forced on me. I think that's a good mindset to try to approach this. I've been married 24 years and I'm

Starting point is 01:09:36 trying to put myself in your seat. I think the last thing I would want to do is walk back into that house. But that's just me. Everybody's different. But I would want a completely clean slate if this was happening this way. How long do you have? How long do you have before he needs to get the $375,000, dollar payout? September 1st. So I did start the process of a cash out refi. Of course, I'm not necessarily bound to it. But, man, it's just...

Starting point is 01:10:09 Do you want to have what basically would be a $450,000 mortgage at six and a quarter? Yeah, I know. Yeah, I know. That's the thing. Psychologically, just knowing that, you know, we're already down to 90,000 and they're because we pay it off and have the lowest interest rate ever and now paying five times. I mean, that's a grief. That is something 100%, yeah, sharing to grieve because that's tough to internalize.

Starting point is 01:10:35 Just hearing you say it, that is something that you guys probably fought together to get to to build that level of wealth. And then it feels like it's kind of ripped out from under you. I mean, hearing you say it makes me sad for you. But if a thing you found yourself wanting or, heading towards and this was a light at the end of the tunnel was freedom, this financial freedom versus a $900,000 house, right? Then if you want to pursue freedom, then sell the house, take the $375 plus some cash you have in reserves and take out a $100,000 mortgage, buy a $500,000

Starting point is 01:11:14 house and have it paid off in a year or two, right? And it's going to be a different house and it's not going to be as big, but you can get a smaller house that's still got all the amenities on the inside for half a million dollars. And you're taking out a much smaller loan than four and a half. You know what I mean? You're 90 plus this 375 at a high interest rate. It just depends on what kind of life you want moving forward. Yeah, Sharon, how old are you? 54. 54. Here's what I would do. We're talking a lot of concepts and ideas. What I would do tonight is I would go and I would look in in my area and I'd say, okay, what's it cost for for my needs as they are today? What, what do I need? What is it that I want? Write that down on paper.

Starting point is 01:12:02 What do I want in a home? And then start looking and seeing what does that cost? And then it's, now let's start putting some closer numbers to the math. Okay, if I sell this, if I get what I want for the house, after I give them the cash out, after closing, after fees, what realistically would I take home and put some real numbers around that and then think, okay, this annuity, I could probably take some of that monies, take some of that $96,000 and add it to my down payment. It's not a wonderful investment anyway, so it'd be better invested in a piece of real estate. And so you've got options here. I think if you put a little bit more due diligence to the actual numbers, I think you're going to come out with what John was saying, which is how to get to that same place of peace,

Starting point is 01:12:48 peace, financial freedom that you had before, it's just going to look a little different. And while you're doing that math, ask yourself, like look at a blank sheet of paper and ask yourself, what kind of life do I want to have now? Probably the most common conversation I have with folks who are going through divorce or just on the other side of divorce is parsing through, like I said earlier, like, I'm trying to hang on to the old life I had, drive the same cars, live in the same neighborhood. And there's something powerful about exhaling and just getting real, real sad that life is over. And now I'm in the driver's seat of what comes next.

Starting point is 01:13:28 What kind of life do I actually want to have? And that's when you ask yourself things about yard maintenance. You may love them on the lawn. You may love doing flowers. And so that's going to be cool. You may say, you know what? I've hated doing the lawn. And in this new life at 54, I'm basically control alt deleting.

Starting point is 01:13:44 I don't want that. I want to do something else. And so, but it gives you space when you realize, oh, I'm trying to hang on to little shards of my old life and just saying, uh-uh. And in that process, if you say, here's the life I want to create now at 54 by myself. I got a killer income. I got lots of resources and margin. I've worked my butt off over the last 25 years to give myself this margin. And you say, no, I want this house.

Starting point is 01:14:08 I love this house. I want my grandkids to come grow up in this house. Then awesome, that's going to come at a cost. All, Jade, what you said is perfect. all these decisions come with trades. And instead of making the trades from a place of weakness, make them from a place of this is the life I want to have. And then I'm going to make trades in that direction.

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Starting point is 01:15:29 NetSuite Next helps you make the most of your time, automating routine work like forecasting demand, and following up on overdue accounts. With NetSuite Next, AI is built into everything you do. So you can ask it questions, just like when you're talking to a member of your team. And right now, you can try NetSuite Next for free. If your revenue is at least seven figures, go to netsuite.aI slash Ramsey. That's netsuite.com. All right, my friends, the truth is we want to hear from you guys.

Starting point is 01:16:14 So go ahead and jump in the comments. If you watch the show on YouTube or on Spotify, jump in the comments and let us know what you're thinking about. What connected you to the show? What connected to you about today's show? Why can't I talk today, John? What connected with you about today's show? That's what I'm trying to say.

Starting point is 01:16:33 I'm a good-looking guy, and it has that effect on people. What? Never mind. She's like, ain't that good-looking. What are you saying? No, I know what you're talking about. Okay, yeah, get in the comments we want to hear, but don't be mean.

Starting point is 01:16:46 I see what some of y'all are writing in these comments. I'm not going to name any names, but I know who the trolls are. Just letting you know. Okay. Let's go to Caleb, who's in St. Louis, Missouri. What's up, Caleb? Hey, good morning. Our afternoon, guys.

Starting point is 01:16:59 It's a pleasure for you on the show. I'll get right to my point. I make $95,000 a year. I'm working 13, 14, 15, sometimes hours a day to try and get my family out of $60,000 of debt. That's credit cards and just poor management on my part and my wife and I have about to expect our six child and we want to have seven total. Holy smokes. Wow.

Starting point is 01:17:26 Yeah. Yeah. Back story. Ten years ago, I was single and a guy who I knew from my church called me and said, hey, I got this daughter. I think you guys would hit it off and I want you guys to marry and have a bunch of kids. And ten years later, here we are. So my question for you guys is I'm trying to knock out my debt so I can start building

Starting point is 01:17:45 my wealth. And my question is, can I and my wife by the time we're retired? I'm 40, she's 32, be millionaires following your principles. I want to knock it out of the park like Albert Polos, hit one off of Brad Lidge.

Starting point is 01:18:01 John will know what I'm talking about that. Who are these people? Why are you going to bring that up? Why have to talk about that? Oh, because you're from St. Louis. I'm from St. Louis, man. Come on. I hope that felt good. I remember that home run, and that ball hasn't landed yet. but he hit that ball so far.

Starting point is 01:18:17 Golly. It's okay, did you cry that day? Did that happen? All right, let's get to, no, you can't be a millionaire. You've ruined it. Conversation over.

Starting point is 01:18:25 I'm just kidding. I'm totally kidding. Okay, so let's run it back a little bit. So just make sure I heard you right. 95,000 a year is what you're making. Obviously, your wife is home with these beautiful babies. And you've got $60,000 in debt. Have you done the calculation?

Starting point is 01:18:41 When are you going to be debt-free based on today's numbers? So I was dead. First of this year. Oh, I'm sorry. Can you hear me guys? Yep. First of this year? Yeah, the first of this year I was at 60K. I'm down now to $25,000 in debt. I'm hoping to knock it out by Christmas.

Starting point is 01:18:56 Oh, you're already down to $25,000. Okay, so Christmas Day, wow, Christmas Day you're done. I love that for you. And then how long do you think it'll take you to save up three to six months? How much is three to six months for you? Oh, no, Caleb. Get some work. where we can hear you clearly. There you go. Now you're back.

Starting point is 01:19:16 Okay. Sorry, guys. I'm not moving. That's all right. Yeah. I'm, I would say it's probably going to take after Christmas, probably about three to four months to get my six months of income saved. Okay, good. And so then from there on, I mean, you know how this goes. We start Baby Step 4, which is you investing 15% of your gross income. Do you guys have any money in retirement at this point? No. Yeah. What was it? No. No, no. We do not. Okay, so let's pretend that at, let's see, that would put you at 41? Yes.

Starting point is 01:19:50 So let's pretend at age 41, you start investing and you invest 15%. So around 1,100, I calculated $1,187 a month. And let's give that 20 years to grow. So if you were to do that with nothing currently saved, you'd have a million bucks in 20 years if you have it invested well the way that we teach. Okay. So that answers your question. But there's also part of this, we believe that a big part of building wealth also is in your personal residence.

Starting point is 01:20:20 Are you guys buyers or renters or how do you live right now? We have paid off home. You have a paid off home? Yes. How did that work out? Moli. My father-in-law, genital, he gave us a house at our wedding. So he was like, wow, that's cool.

Starting point is 01:20:41 Crazy. So it's y'all, you and your wife could sell that house today and all proceeds would go to you? It's correct. Yes. How much is this house worth? We had our appraised. It's between six and six-fifty. Okay. Yes. So that's the answer to your question, Caleb. You can be millionaires. If you keep doing what you're doing now, you're walking the baby steps. If you keep doing this and then you start investing the way you teach, you will have over a million dollars plus your personal residence. It's going to be over. over a million dollars. And again, that's if nothing changes. That's at the bare minimum. The truth is you're going to go through life. You're going to earn more money at some point. Some of these kids are going to get out of the house. Maybe your wife will pick up some work. This is the worst possible scenario is you earn a million dollars at this income. So you know, it's going to be above and beyond that. It's awesome. And because Caleb, you started this fight,

Starting point is 01:21:34 I'm going to finish it currently. The Astros are in first place and the Cardinals are in third place in their respective division. So just need to say that out of that. Is this the baseball? This is the baseball. Okay. I love it. Somebody knows what we're talking about. It's not me.

Starting point is 01:21:48 Call me talking about that Bradledge, home run. All right. Let's go to James in Atlanta, Georgia, which is, I do know this, home of the Atlanta Braves. All right. James, you're on the line. Help us out, buddy. Hey there. How are you guys?

Starting point is 01:22:02 Doing good. How can we help? So my wife is going to be going to dental school in the summer of 2028. we start the application process in June of 2027. We're currently on a get out of debt journey. We started this year. I've been listening to you guys heavily since March, and we paid off about $18,000 of our $80,000 in debt.

Starting point is 01:22:25 What's that? And we want to know if we can go to dental school without taking out student loans. So the answer is maybe, but I want to frame your question up, okay? I want to reframe it. the way you the way you stated this is this is happening in this particular time frame and I want you to think about not because that's going to get you in trouble because that's then it has to happen so the cheapest public in-state tuition is manageable and especially if you have a year or two-year runway but if you say we're going to dental school she's going to dental school in this time that's when people end up in for-profit schools they end up been the most expensive private schools because that's all they got into or whatever.

Starting point is 01:23:11 So it's first saying, if we can afford it, we're going to go in this time frame. And that sets a fire underneath you. And yes, depending on what schools you go to, there are public schools. And I mean, they vacillate so greatly in cost that I'd be looking for what's the most reasonably priced public school that we can get into, especially in state. If you start going paying out-of-state tuition, man, they'll kill you on that. If you go to fancy private schools, that can get you underwater real quick. And if you start going into the for-profit schools, man, that can be a nightmare. So the only in-state school currently is in Augusta, Georgia, and it's $109,000 for approximately for four years.

Starting point is 01:23:56 Okay. And then in surrounding states, it ranges from $250 to $350 to $350. It's $109 for four years. It's $109 every year, or that's the total? $109 for the four years. The intake tuition there is $27,000. But if you guys have, from the research I've done, it can be pretty hard to get into dental school,

Starting point is 01:24:17 and most people apply to many and get accepted into few. And that's the challenge you're going to run up against. And you all just have to decide now what our principals are. 25 grand, 27 grand a year is, I think, a great deal for dental school. I think so, too. but that means you're going to have to live like freshmen in college and you're going to cash flow this thing and we're not going to look at it as 109,000 over four years we're going to look at it as 27 grand a year and what can we what can we cut what can we add you're going to work

Starting point is 01:24:49 other jobs you're all going to save up money between now and then like all that's very very doable and I wouldn't blink twice about somebody spending 27k on dental school that's great man but if you don't have it you don't have it and I do get your But you described the exact trap. I've just sat with students in all sorts of medical helping professions over the years. They're so desperate to get in that they end up getting in a place that they just simply can't afford. Yeah, that's a really good point. I think the two caveats here is I would make sure the debt is paid off first.

Starting point is 01:25:23 Yes. Because that's the only way you're going to have the margin to be able to really save up the $2,200 or whatever it is, every month to pay for this. And the other thing is, yeah, what is your job? What are you doing? Because while she's in school, she ain't working. So that means you're going to have to bring in enough money to float the boat and pay for tuition, which I think you can do. You just have to be very intentional. Welcome back to the Ramsey Show here in the Fair One's Credit Union. Studio continuing to take calls about your life and money. Triple-8-825-5-225 is the number to call if you want to get on the show in case you were ever wondering. We have Gabriel and Columbia, South Carolina, on the line next. Hey, Gabriel. Hey, how are you guys?

Starting point is 01:26:29 Doing good. How can we help? So a few months ago in April, my wife committed an act of financial infidelity against me. I knocked over a bag and spilled out a couple papers for credit cards. And we had agreed no credit cards like three years earlier. And I asked for some questions and found out. that she had taken one of those male credit card offers and taken out $7,000, used it for an amount of $7,000. We've moved past it.

Starting point is 01:27:14 No, you haven't. You're here. Yeah, you haven't. You're still here. In some sense, we did. In some sense, I haven't. There you go. You paid off the money, but emotionally you haven't moved past it.

Starting point is 01:27:25 What did she spend it on? So I'll give a little context quickly, but we went to a period where we were all sick. We have two kids, a one year old, three year old. She's a stay-at-home mom. And when we all get sick like that, she just really feels a lack of family we have in the area and a lack of help. And she really wanted to make money to afford to pay for help. So she signed up for this like get rich quick TikTok millionaire course where they say, oh, if you don't make $15,000 by the end of the course,

Starting point is 01:28:01 we'll refund you the whole cost of the course or something. And, you know, that was what she said to kind of justify it. Like, oh, you know, I would have been able to pay the money back no matter what. I, of course, thought it was a scam and I didn't trust it. So I just didn't as I found out I had her cancel it. Sure. But I was also like, you know, obviously you can't do that. You can't go behind my back and do that.

Starting point is 01:28:25 And it's not like I don't. provide for you. I mean, we could have had a conversation about that. And we, we talked about it. And, you know, she, I guess, didn't feel hurt sometimes. So that's the stuff we worked through more. We've better communication now. But, you know, for even more context, like when we first got married, I had no debt. And I found out a month before we got married, she had $10,000 in credit card debt. I just paid it off of my savings at the time. And she also had student loans. And we're almost done paying those off. But I do harbor resentment. is like, I just feel like she's brought so much of this negative financial weight into our marriage.

Starting point is 01:29:04 And it was one thing when it's like, okay, first year marriage, she agreed, no more credit cards. But then things got a little tough. And she, you know, went behind my back and took these. Why didn't, why do you think she, because it's trust on both sides, right? One is just a little, like hers is more deceitful in that way. But why do you think, and I don't know if you've asked for this, but why didn't she trust you to tell her, you know, before you got married that she had $10,000 in debt. Why didn't she trust you to say, hey, I saw, you know, because I'm just thinking about

Starting point is 01:29:34 conversations in marriage and it's like, hey, I saw this thing on TikTok, I think we should try it. They guarantee $15,000, right? Why does she not trust to have those just kind of candid conversations? What do you think's going on there? Because there's trust on both ends that's lacking. To be honest with you, she didn't have a great relationship with her mom. And I think she grew up lying a lot or hiding things as like a survival mechanism. And we've kind of been working on that where I'm like, you know, I'm not your mom.

Starting point is 01:30:09 Like you actually have to communicate clearly to me and tell me the truth about how you're feeling or what you're thinking and what you want to do. You can't just tell me things are fine and they're not. But let me interrupt here. You're exactly right. And you have to be a partner who can hear her feelings and not say, well, that's not a big deal. look what I did last time right because that puts you in a position

Starting point is 01:30:32 I don't use this word flippantly if you're not a safe place for her to unload and just sit down and say here's what I'm feeling or you try to immediately go to fix it instead of just sitting with her then her nervous system's going to just go on automatic replay

Starting point is 01:30:46 of her childhood now I'm not saying anything she does right don't hear me say that she shuts down do what yeah she shuts it down like it's right if I get

Starting point is 01:30:56 If I get to, if I get angry or something, and she just like, stops talking or she'll just say whatever will make me happy, but I know it's like not real. Right. So we'll get to the, we'll get to the, the, what do you do next? But I want you to hear what Jade said. Often these trust issues are because neither of you trust each other. And you learning to say things like, thank you for telling me that. And that's it. Even if you think the thing that she says is a big deal isn't a big deal. Say, thanks for sharing that with me. or here's a magic phrase tell me more about that instead of I don't care about that we're not doing that tell me more about that

Starting point is 01:31:33 what is it about a TikTok thing like tell me about that and then you can after she tells you about it you can laugh and say that doesn't make any sense at all to me I don't feel good about that

Starting point is 01:31:43 but that's different than that's stupid we ain't doing that you get what I'm saying it's an ethos in your home that you're both welcome at the table right so when it comes

Starting point is 01:31:52 to rebuilding any sort of trust the path forward is you have to give her a roadmap and say here is how we can like we're going to practice trust again and like I want to pull our credit report so hopefully you've already done that if you haven't seen this you have done that yeah we did and we're on the baby steps together

Starting point is 01:32:17 I'm like a Dave Ramsey addict now we're working through that you know what we hear this all the time some zealous husband dragging their wife through this some program. And it might be that she feels about Dave Ramsey as you feel about a TikTok plan. Right? And it's sitting down and saying,

Starting point is 01:32:36 here's the kind of world we want to create. And the challenge you're going to run into trying to reestablish trust is, bro, you are a scorekeeper. And you've kept a record of every right and wrong in your marriage. And you're bringing up stuff from before you got married and conversation. Address the elephant in the room, which is, I have a wife who doesn't always tell me the truth. truth. For whatever reason, I have a wife that doesn't always tell me the truth. And then she knew this

Starting point is 01:33:01 was a big core value of ours, of mine. She agreed to it. And she went behind my back and that shattered this trust. Or really, probably didn't shatter. It probably just brought to surface trust issues you'll have. You got to make a path for her because you're not going to feel a certain way. And if you try to say, like, are constant looking for it, I want to feel like I trust her, man, that's, that finish line's going to move every time. Say this week, And you get to make up the path, and then she as a grown woman gets to decide if I want to walk that path. I want to see your phone. I want to see our joint checking account.

Starting point is 01:33:34 I want us to have the every dollar app so we can both see every transaction. I want to freeze on both of our credit reports. So we have to, and the other person gets to keep the code. So if somebody wants to open up a credit card, then they have to go through each other. I want to close the Amazon account. You get to decide what that path is. And my hope is that you're not punitive with it. But this is a way that you are going to be able to exhale when you start to get nervous.

Starting point is 01:33:56 again and she is going to say I'm all in on this marriage I I had a lapse in judgment I screwed up and I'm I'm I'm full full full tilt forward with you that make sense and then you've got to decide brother I'm not gonna drag up every time we get in a fight every time she does something every time I get mad I'm gonna bring up stuff from five years ago 10 years ago man don't don't be that guy don't be that guy deal with the problem in front of you and I think the from what it sounds like, the real issue in your home is you have a wife that you don't trust, and you all have to get to the root of that.

Starting point is 01:34:32 You've got to be able to tell each other the truth. Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources

Starting point is 01:35:13 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. So guys, if you're working the baby steps, just know the best and fastest way to do that is by using every dollar, my favorite budgeting app. And the truth is it's more than just a budgeting app. Right now, it's a plan that's built right in. You hear us talk about the Ramsey plan all the time.

Starting point is 01:35:59 and every dollar is built on that Ramsey plan. So we're not just telling you how to budget. We have an opinion on how you should manage your finances and the best ways to build wealth and how to find margin. And every dollar is going to hip you to that game. Okay? You can track your progress. Plus, you get personalized recommendations and coaching for your situation that will help you free up more money and work the plan faster than ever. Trust me, it's like having one of us walking with you every day in your pocket, showing you the next right step and holding you accountable.

Starting point is 01:36:29 Start every dollar for free today by downloading it in the app store or on Google Play. All right. Kristen is in Columbus, Ohio. Hey, Kristen. Hi, thanks for taking my call, guys. Fosho. How can we help? So me and my fiancé just started step two within the last month.

Starting point is 01:36:47 We have a total of around $225,000 of consumer debt before a mortgage. And I had actually just got a new car like a month before. And then once I start the program, I'm like, that was a bad idea. So my question is, I have my vehicle. Yeah. My vehicle, I owe about 29,700. My fiance actually has a lease, and he has a year left. And we also have his motorcycle that he owes about 13-5 on,

Starting point is 01:37:16 and I think it's only worth about nine-five. So we have negative on all of them. We obviously have negative on mine since it's brand new. And his has about 7 or 8,000 a negative since it's a lease, and we've only had it two years. So my question is, how would we go about telling them to get used ones with the negatives and, like, how would we go about that? So can I, I'm going to come out swinging here, but I'm going to tell you what I would tell

Starting point is 01:37:41 my older sister. If she was asking me the same question, I would tell you what I would tell my closest friends in the world, okay? And I only say this because I would not have a job if everyone's plans always worked out. So please don't refer to y'all's debt and our, what we owe, until you are legally married

Starting point is 01:38:07 and you have a process, a legal process for unwinding it. The number of times I've heard dating couples or cohabitating couples or even engaged couples start paying each other's debts off and then they break up. And I know you're like,

Starting point is 01:38:22 no, that would never be us. I'm just telling you over and over, untangling that nightmare or people saying, I paid off 20 grand of her or whatever, and then she broke up with me. And there's no recourse for that. You get what I'm saying? And so what I would challenge you on is y'all run this plan. Y'all are engaged. Hopefully I've got to get married soon. But y'all run this program in parallel dealing with your own, what you make, what your life costs, what you owe, and handle it that way. And then the day he puts a ring on your finger and you won on his. Now there's a legal, there's a way to legally separate this without it being a

Starting point is 01:39:00 nightmare. It'll be a nightmare still, but you get what I'm saying? Yeah, I get what to say, but we've had our finances combined for a while now. I know, but that's not great. That puts you at a very vulnerable position. Okay. So how much money do you make every year? Well, just me or combined with us combined? Just tell me about you first. Just me, about 55,000. 55. And if you had to take all of the debts that you have, what would they be? Oh, I'd have to add them all up.

Starting point is 01:39:36 Well, we know his lease wouldn't be part of it, and his motorcycle wouldn't be part of it. So you'd have the $29,000 car. We have an equity loan on our house together, too. Oh, what? We have an equity loan on our house. Oh, boy. Whose name is the house in? It's in his, but I'm on the deed.

Starting point is 01:39:53 But the mortgage is in his name? Yes. Okay. Then that it's, it's his debt. You're so, you're in such a vulnerable position, Kristen. Oh, man. So let's, let's keep it, let's keep it 100 right here. So the truth is all the debt's really in his name except for the $29,000 car, which is yours.

Starting point is 01:40:18 That's the truth. Those are the facts. I have some student loans and a few credit. credit cards. Okay, tell me about your student loan. Okay, tell me your student loans, your credit card, and your 401k loan amount. My student loans have about $28,000. Okay. My 401k loan, I have about $3,300. Oh, okay. Yeah, and then I have a couple small credit cards I still need to pay off. What are those? $300, $375 for one, $900 for another, and then $2,200 on $2,200 on $1. $2,200 on $1. another one. Okay. So let's, for the purpose of this exercise, because I mean, if we're sitting right now at coffee talking face-to-face, I'd tell you the exact same thing. You do not to put, need to put a dime of

Starting point is 01:41:06 your money towards this person's debt. You need to focus on paying off your debt because that is the financially fair thing to do. And legally, it's the thing that serves you best in this situation. Okay. So you make $55,000 a year good on you. Let's list these debts. from smallest to largest. That's what I do. I would start with the smallest one for 375. I'd make minimum payments on everything, but I'd throw all of your extra income towards that smallest debt. Doing that is called the debt snowball. That's how I paid off, you know, $460,000 with my husband. It definitely works. The problem that I see, the problem that I see you running into is you guys probably have some sort of split where, you know, I don't know what it is. I'm guessing you pay part of the

Starting point is 01:41:52 mortgage, which makes sense because you live there. But is there something else aside from housing expenses that you're giving him money for? No, we just combine everything. We just combine our incomes going in the same bank and we just pay the bills. How much does he make? About we make a total of 135, about 80. Okay, he makes about 80. So the tough part is I want to help you as best as I can, but you called a show that really has a clear point. of view on this. And our clear point of view is what John stated before. I'm not going to say it again. But that's the truth. And so I can't give you advice based off something I wouldn't do myself. I would be a, I would not be a congruent human being if I did that. So I have to tell you what I would do,

Starting point is 01:42:39 which is I'd separate my money. And I'd say, we're not married. Our relationship isn't committed. Therefore, our money doesn't have to be committed. And it's no shade, but I have to protect myself to a certain degree and I'd do it like that. Yeah. So how would I go about with my vehicle then? Like, would getting out of it and getting something cheaper? Yeah. So what did you say was worth? Getting a personal loan?

Starting point is 01:43:02 No. Mike, I have an offer for like 25-7 so it puts me out 3,700 or negative. Okay, yeah, I would do that. I would go down if you can get a I don't know, do you have any cash saved? No. No, just the emergency fund.

Starting point is 01:43:18 How quickly could you get 37? hundred. How quickly could you save it? A couple months. The offer might be gone by then. If you wanted to, you could go, yeah, what you could do, you could go to the credit union or you could get a loan for the difference. And then you're going to need something to drive, right? So maybe I'd get a loan for the 37 plus maybe another 5,000.

Starting point is 01:43:40 So 8,700 total. You're nice. I was going to say 2,500. Yeah, look for the, I mean, you're looking for a beater is the point that John is making. This is just something to get you from point. A to B, it's temporary, okay? So don't get hung up on the fact that you're driving a $3,000 car. It's just temporary. And then now you freed up your car note, right? So how much is your car note? About 513. So you freed up the 513. Of course, you're going to have to pay a little bit for

Starting point is 01:44:06 the loan that you got from the credit union or for whatever. But mostly you've freed up most of that cash. And that's going to go towards your debt snowball, paying off these credit cards as quickly as possible. Then next you'll move on to the 401k loan. Then next you'll move on to the student loans and do those smallest to largest as well. But the key is smallest to largest and you're going to work extra hours. You know, if you can pick up overtime in some way, if you can do a side hustle. Yeah, I have been. Perfect. Awesome. Most people do this in 18 months, right? That's the goal. 18 months or less. And they do that by getting very uncomfortable doing things they've never done before, working jobs they've never worked before, selling things that they thought they loved, right?

Starting point is 01:44:47 All of these things are part of it. Your fiance is going to sell that motorcycle and take out a loan for the difference for that $4,000. Yeah, absolutely. And I would encourage him to do that. I would start working this plan and let him see all of the progress that you're making and him go, oh, that looks good. I want to do that too. And you have the ability to influence this person.

Starting point is 01:45:07 You can't change a person, but you can't influence them with your behavior. And I think you have a really good opportunity to do that. Hey guys, George Camel here. You ever feel like you make good money and still have nothing to show for it? You run into Target for one thing and somehow walk out $87 later with toothpaste and emotional support candles. Just me? Okay. Well, that's the problem.

Starting point is 01:45:49 Most people don't pay attention to how they spend their money. So it does whatever it wants. And that's why we created every dollar. It's a budgeting app that helps you create a simple plan for your money. Every dollar's simple. It's clear and it helps track where your money's actually going. Plus, you get daily lessons, to do's and reminders along the way. It's like having a money coach in your pocket.

Starting point is 01:46:08 Your money's been freelancing long enough. It's time to give every dollar a full-time job. Go download every dollar for free on the app store or Google Play. All righty, it's time for our Ramsey Show question of the day. Brought to you by YREFI. Listen, when private student loan payments start getting away from you, who can feel like you're paying for decisions you made years ago. But YREFI helps borrowers explore low fixed rate refinancing options

Starting point is 01:46:44 and payments designed around your current. situation. Just visit yrefi.com slash Ramsey and remember it may not be available in all states. Today's question comes from Maria in Oklahoma. Maria writes, my spouse and I are dead free and have a fully funded emergency fund. We're saving for a down payment on our first home. We tie through our local church, but the church often presents causes where they ask members to help meet the needs of others. It feels selfish not to participate in these requests when our family needs are easily met and our savings goal could be pushed out a few weeks or months to help make a true difference in someone else's life. How do we balance wanting to help and feeling guilty when we choose

Starting point is 01:47:25 not to participate? Ooh, well, I mean, John, let me just say guilt and generosity, guilt and giving cannot go hand in hand. Let me phrase it like that. You're supposed to give out of a cheerful heart and I don't think you can be cheerful and guilty at the same time. Let me say this in a gross way. if you feel guilty and so you give, you're actually using the person who needs your help to make you feel better. And that makes you the parasite in that exchange, right? Because it's like, I need this for me. I need to be okay.

Starting point is 01:47:57 So I've got to, yes, you're exactly right. That's a good word. And then, I mean, yeah, you can go with the scripture. Like you should be not giving under compulsion and the Lord loves a truthful giver and all that kind of stuff. But the bigger part is how you feel about it. And you giving is not. not, I've heard Dave say this, and I'll try to say it in my own words, whether or not you gave

Starting point is 01:48:20 to that one thing is not moving the needle on how God feels about you. You know what I'm saying? And I think that that's the biggest part of this because the guilt is, oh, I should, there's this expectation, I should have done this, and if I don't do this, then maybe is that. And it's just like, hey, what if you just set aside an amount that you and your spouse agree on and say, above and beyond our tithe, we have this line item on our budget and we spend it when when those needs arise. And if there's not a need this month, we spend it on outrageous tipping. And if it's not tipping this month, then we buy backpacks for back to school. And this is just a line item of extra giving that we plan for on our budget. We know that it's just enough that we can afford it,

Starting point is 01:49:04 but it also gives us a little bit of tinge, right? Like you feel it a little bit. And this is what, this is what God has laid on our heart to do, and we feel great doing that. I think that that's the way giving is supposed to feel. It shouldn't feel like, oh, pastor says something from across the stage. Okay, like, it shouldn't feel like that. And then if I don't do it because this was the month we were supposed to, I don't know, take that vacation, now I feel guilty the whole time I'm on the vacation. I just don't think that that's the intention of, I personally don't feel like that's the way it's supposed to feel. I feel like you should go, I'm happy to help. And I planned to do so. And I do think that there's some spontaneity sometimes where it's like, you know what? I wasn't planning on doing

Starting point is 01:49:47 this, but like this just hit. Like, let's do it. I think those times come too, but and also guilt is not the ticket. This is a deeper conversation, probably for another time. But if you're, you're tithing every month to your local church and every week, they're circling back up and be like, hey, we don't have enough here. Yeah. Get involved in the budget process. Oh. Do we need new instruments for everybody?

Starting point is 01:50:10 Do we need new, I don't know, whatever? That could be easier said. That could be easier said than that. But like, if it comes down to a trust issue with how is my tide being stewarded. Well, then that's another question. Then have a bigger conversation. And I'd rather see a church with fewer fog lights or whatever and more, like, we're going to, I want the church to create a fund that is constantly,

Starting point is 01:50:33 building because we have these recurring needs of our members. I love that. Let's let's have that. So it's so it comes up every time. But by the way, every one of us feels has feelings. We feel guilty. Sure. Yes. And then as adults, this is what emotional maturity is. I have this feeling and go do the next right thing. And if the next right thing is me and my husband agreed on here's our vision for our life. And by the way, an anchored family who's got an extra bedroom. I've had I've had I've had college students living with this all summer. Like, you can do a lot of good with that too, right? And so let's make this commitment.

Starting point is 01:51:08 I have this feeling. I feel sad. I feel guilty, whatever. Now I'm going to do the next right thing. Right? So don't be trapped in this. I feel this way. So I have to just mindlessly respond and then react.

Starting point is 01:51:20 Have an anchored set of values and have a plan that you and your husband agree on and then move forward. Yep. I like that. Hopefully we helped on that one. All right. Next we've got Holden who's in Orlando, Florida. What's up, Holden? How can we help?

Starting point is 01:51:32 Hey guys, thank you for saving my call. So I am 27 years old, saved up about $40,000, just got married about two months ago. Combined, we make about 120 to 130. Looking into buying a multifamily home, I've been kind of set on that from a mentor, kind of mentoring me in that, kind of having the fear of like, do I do this if the numbers make sense and just kind of deciding what I can afford, or do I kind of buy a, cheap home and kind of save and continue to save and go from there. Can I ask you a question? Yes. Would you do what the mentor says even if you can't afford it just because he said to do it?

Starting point is 01:52:17 No. Okay. That's all I need to know. Now I know we can help you. All right. So we've got 40,000 saved. You're newlywed and you guys' combined income is $20,000. No debt. Have you guys bought a home for yourself yet? No, our combined is about 120 to 130,000. We are living with my parents currently rent-free. They are Christians. We are Christians. They were very welcoming. Like, you guys can come stay here for as long as you need to get on your feet,

Starting point is 01:52:48 save, whatever. Obviously, there is tensions with being newly married, living in the same home and your parents. It's kind of needing space. So I'm trying to tread lightly on that and not wait too long, but not also make a bad financial listing with the home. What are you waiting for? Like what, what's the purpose?

Starting point is 01:53:07 I'm looking at two people who have awesome incomes. They've got money saved. Why in the heck are you living with your parents? I think it's just because it's free. Numbers make sense and like investing in the right property. I think that's really what. Okay. Here's what I want to challenge you on.

Starting point is 01:53:22 I think that you're trading one really important thing for something that's not nearly as important. You're sitting here telling me, I got a newly wed wife. my wife's hot and I'm living in my parents' house and I can't be a newlywed the way I want to be because I'm trading it for investment property that is far out in the future. So imagine your new kitchen table. I want you to set a seat for your wife. I want you to set a seat for your mom and dad.

Starting point is 01:53:49 And I also want you to set a seat for this investor, this mentor of yours. Yeah. And all those other voices are speaking into this marriage that you've, created with your wife. Yeah. I don't like people thinking of their first home as an investment property. Okay. One of the, one of the most of, man, I was that guy and I was this.

Starting point is 01:54:13 I'm going to move to this house and move that. And I remember one of the wisest financial minds I've ever known said, Hey, Deloney, get your wife a home. Get your wife a home. And that, for whatever, it clicked. It was like, oh, this isn't, this isn't an investment vehicle. This is a home. It's our life.

Starting point is 01:54:30 It's our life. And by the way, get your wife a home could be you renting a home. Yes, an apartment. You guys, you've started your life together. And now this would be a totally, if you had called me and said, man, we've got $120,000 in debt. And I only make $40,000. And my parents said we could live there for, you know, a few months for free. That feels a little different.

Starting point is 01:54:50 I'm not going to lie. But you've got money and you've got income. And now you've got a brand new wife. Go into an apartment and have your space and start out your marriage in a place where you guys can have your privacy, you can have your conversations, there's room for you to argue, there's room for you to have all of the things that are part of a new marriage and enjoy that. Do you know what I'm saying? And all of that is you guys building that together and you're so, so young that you have the time to build that together. You don't have to sacrifice.

Starting point is 01:55:21 If you don't have to sacrifice to this level, man, don't do it. Don't. What do you think, what is your mentor told you're going to gain from buying? a multifamily property? I think it's just like the long-term, like, wealth that you can build with it. And I've always had, like, that kind of entrepreneur mindset. And I felt that this was a way that I can get into that. And I just didn't want to, you know, make a mistake on just going and buying some home. It won't be a mistake.

Starting point is 01:55:49 It won't be a mistake. Okay. And become a relational entrepreneur. Build something amazing with your wife. You all co-create something awesome. y'all get to build the marriage you want dude go build that one hey guys rachel cruz here with big news the twenty 27 ramsie goal planner is here and you can get it at our lowest price for a limited time guys this isn't just another calendar

Starting point is 01:56:32 it's the only planner with exclusive monthly content from john deloney jade warshaw and me to help you set clear goals and actually stick to them all year so don't wait order yours by August 23rd to get our lowest price, just 3597. Go to ramsysolutions.com slash store to get the deal. That's ramsysolutions.com slash store. All right, your Ramsey shows scripture and quote of the day, Romans 1212, rejoice and hope. Be patient in tribulation, be constant in prayer. Albert Einstein said, It's not that I'm so smart. It's just that I stay with problems longer. All right. I dig it

Starting point is 01:57:26 He's also pretty smart Yeah Yeah Let's just He's Einstein Yeah All right Caleb is in Colorado

Starting point is 01:57:33 Springs Colorado Hey Caleb How can we help Hey guys Hey thanks for taking my call today You bet What's up So okay

Starting point is 01:57:42 My wife and I I've been married About four years I'm 25 She's about to turn 23 Here in a couple days Anyway We've been farming

Starting point is 01:57:54 For about five years I'm actually fifth generation on our family farm here. Currently living in, we're like the third family to live in this home that's been our third generation in this family. Got it. So we are kind of stuck with a hard place, a hard decision to make. We made the decision this year within the last couple weeks, actually. We're going to liquidate and sell our farm. That's not our family farm, but it's my wife and I's farm.

Starting point is 01:58:31 We've been at it for about five years and decided that this just isn't working. The overwhelming debt load of farming is just absolutely atrocious. Not something that I would really, I don't know. I'm much more interested in helping out my dad and family. his health's not been good the last year or two. And so much more interested in helping him out as I can. And so anyway, we're faced with a decision. At the end of this sale here in a few months, we're working on kind of closing things up.

Starting point is 01:59:10 We're going to be left with, after we pay off all of our debt, we're going to be left with about a net 360 before taxes. but as you guys probably know, we're going to be stuck with a pretty substantial tax bill. That's probably looking at about 260 right now. Why is that capital gains tax? Yes, sir. Yeah, capital gains, as well as depreciation on assets. So, you know, we've got center pivots and tractors and stuff that will all be.

Starting point is 01:59:43 So all of that depreciation, we made the mistake of fully depreciating out at the very beginning. You know, just in case. And so, you know, got to pay that back. So the decision really, and this is the most basic part of the question, is I could need to pay the 260 up front and walk away with $100,000 just free and clear cash. Basically for my wife and I to completely restart our lives. We just had a little boy about a year and a half ago. but we you know to restart our completely you know from ground zero or the tax accountant said that we could reinvest 180 into assets that would in my mind be productive and you know my living

Starting point is 02:00:30 and then you know that cuts that tax bill back back down to about half 180 taxes 180 investment. And then I guess I would have something to show for it, I guess, quote unquote. You have $100,000 to show for it, but you would have $0 to go start your new life with. Yeah. Well, yeah, 100,000 that would be, I guess the tax accountant said it would be free and clear. But you get what I'm saying? You would have $180,000 tied up in potential assets. I mean, and you would hope you're gambling, right? Like you hope that pays off.

Starting point is 02:01:12 And, but you would have zero dollars in cash to go start this new life with. You still find yourself, you and your wife and your baby still find yourselves that we're taking a new path. Yep. Yeah, exactly. And, you know, if we went to 100,000 route, we're probably not looking at sticking around. We're probably going to move out of state to somewhere with. a little bit more reasonable living costs and things like that, just to stretch the dollar as well as if we're going to start over, we're basically going to say we're going to clean slate this thing completely.

Starting point is 02:01:47 And if not, if we reinvest, the decision would be find some equipment that would make a living here at, you know, at home on this fifth generation farm that, you know, we're blessed and downright privilege to live in, to be honest. Yeah, but then you're tangled up in family. business now. Yeah, I think that. I learned that one about two years ago. And it hasn't rained in Colorado Springs in, what, 10 years now? I mean, yeah, tell me about that.

Starting point is 02:02:17 That's for sure. Yeah, it's a tough. It's not rain partly all year long. If you told me, hey, I'm going to go for something five years ago and it doesn't work as you thought was going to work and you are able to exit and someone writes you $100,000 check. Yeah. I don't know.

Starting point is 02:02:34 I'm sure your tax account. got it all figured out. But I'm just saying from a guy who's got two kids and a wife, and I'm desperately always seeking to solve for peace, right. That's for me. What do you think, Dave? I think that you need to solve the problem of what you're going to do next

Starting point is 02:02:51 without thinking of it through that lens, because otherwise the tail could wag the dog and you could end up doing something that maybe doesn't make sense in order to reinvest this money. And I haven't heard you say, here's what we did this farm. It didn't work. Here's what round two is from a career standpoint. Is this you going to another location and farming that land? Is this you, like, what's it look like when you move away from this and make this sale? What is, what's your life after that?

Starting point is 02:03:24 So that would definitely pose an option, I guess. If we went somewhere else, we do, so we do own this house free and clear. it's worth about 430, at least appraisal price. Okay. It's free and clear, with or without the farm. So you'll take that money. Yeah, and so we'll be able to take that forward as well as the 100. I don't know what the taxes would be on that house sale because we bought it a couple of years ago. Yeah, I think you have half a million dollars.

Starting point is 02:03:56 Yeah, you'll be fine. You'll be able to take that and load it into the next house. So the question is, what are you doing for work, is what I'm saying? What do you envision yourself doing? And that right there is the million dollar question right there. Because I've been self-employed. We went straight. Both of us went from high school into a state leadership position and then met each other and got married.

Starting point is 02:04:18 So neither of us went to school. Neither of us did anything like that. Just went into my wife is a homemaker. She has a job on the side that brings home, oh, about $500 a month. But do you see my point, Caleb, is if you say, yeah, I'm going to reinvest this money into new equipment, new equipment to do what? You haven't even decided what you're doing yet. So I think that that. Oh, it would go on the family farm, and he's going to hope cousin Willie's grease in the axles when he's supposed, like, dude, I wouldn't be involved with that.

Starting point is 02:04:48 If you said I want to go work full time on this family farm and they're going to pay me a hundred grand to year, and I made that number up, they're going to pay me and I want to be a farmer still, but I'm going to farm their land. Yeah. Maybe. Well, I'll tell you. is the dream, of course. That is the dream. And that's why we started out that way. But quite frankly, the family farm can't afford. They can barely afford to pay the person that's right. Well, that's what I was going to say. What's the difference between this farm and the farm? It doesn't work, brother. Yeah. And, yeah. I mean, and your tax account sounds like, I mean,

Starting point is 02:05:18 they're probably, I know they're 100 times smarter than I am. And they're probably trying to give you, here's a path you can take to not do this in the short term. I'd rather see you. Let me ask you. One last question about this then, because I kind of agree. with you and that's kind of been my hunches, the 100,000. It's safer, but not only safer, it's more peaceful. Let me ask you this. So a year and a half ago, two years ago, I guess, right before my son was born, I had made a poor decision to go into business with some other family that ended up going under and really destroyed relationships, also carried forward a bunch of debt we carried forward. I mean, it was really a painful thing. Anyway, in that,

Starting point is 02:06:01 In the aftermath, we were forced to make the decision to sell all but three of the cows that my wife brought into our marriage. She worked literally since middle school. Caleb, here's the thing. I'm up against the clock and I've got to let you know. You said, you already said with your own mouth the solution to this problem. You said the peaceful route would be to take the $100,000. Let the cows ride, dude. John has said, solve for peace.

Starting point is 02:06:34 Sol for peace. The peaceful route is to take the $100,000, and you set it out of your own mouth, which is that's how you feel when you think about it. That's what you need to do. All right, guys, thanks for hanging out with us. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace to Christ Jesus.

The Ramsey Show - You Can’t Win Without a Clear Goal

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