Do You Have Too Much Month Left at the End of the Money?

[0] Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

[1] I am Rachel Cruz hosting this hour with my good friend and bestselling author, Jade Warshaugh, and we are here to answer your questions.

[2] So give us a call at AAA -825 -2 -2 -25, and we'll talk about your life, your money, your relationships, your career, anything, and everything.

[3] We are here for you.

[4] So first up, we have Ashley in Charlotte, North Carolina.

[5] Hey, Ashley, welcome to the show.

[6] Hi.

[7] Sorry, I'm really nervous.

[8] No, you're good.

[9] Don't be.

[10] It's just us.

[11] It's just us girls.

[12] It's just chatting.

[13] You're great, Ashley.

[14] How can we help?

[15] So I'm trying to figure out if I step away from work, if I'm going to financially ruin my family.

[16] Ooh.

[17] Let's talk more about that.

[18] Why do you feel like that could be the case?

[19] So I make about double what my husband brings in, and he works at a small business.

[20] So they don't offer, like, health care or retirement plans or anything like that.

[21] And, like, he's never going to leave that.

[22] That is his life.

[23] Okay.

[24] What does he earn?

[25] I know, and I love him.

[26] Like, what are the real numbers?

[27] So he earns about 60, and I earn about 115.

[28] roughly and how old are your kids um i have a four -year -old a three -year -old a two -year -old and a one -month -old oh ashley oh my lord you're in it i feel like we should just like take a moment and pray just for like almost fell asleep just listening to that that's crazy goodness man okay so and i totally get this actually when i was pregnant with my third it was the moment i was like oh man do i want to go back to this work thing.

[29] What does this look like for me?

[30] So like this, this heartstring that moms feel, it is so real.

[31] And so for you, you're a month into a new baby.

[32] You have three little ones around.

[33] And what does your husband say when you're saying, golly, my, I'm feeling you know, pulled in this direction?

[34] Well, he says that we'll figure it out and it'll be fine.

[35] But he feels like if I do step away that I'm not going to feel fulfilled to staying at home.

[36] He feels like I was meant to work and that I'll get bored.

[37] Well, I think that you, I feel like no one's going to know that better than you, how you'll feel.

[38] Right.

[39] So it's possible that being new, you know, after having a baby for the first time and you're just a couple of months in, it's possible that you're feeling more emotions in the moment.

[40] and that you could step away and feel a little bit like, okay, several months have passed now I'm feeling better about this.

[41] That is possible, but I do think at the core, you probably do know yourself best.

[42] My question, like, when I'm looking at all of this, I'm just really wondering if you do get to the point where you decide I want to stay home, can you actually afford to do it?

[43] Because I feel like that otherwise you wouldn't be calling this show.

[44] So that's really the question is, what's your financial situation above what you both earn?

[45] I mean, we're doing the baby steps for, we're honestly, we're doing pretty well.

[46] We're debt -free.

[47] We have a fully funded emergency fund.

[48] We own our house outright.

[49] Oh, gosh.

[50] For rental.

[51] Okay.

[52] And can you, have you done a budget with just his income just to see if, you know, from basic necessities if everything would be okay?

[53] Oh, we have and it.

[54] It's tight.

[55] It's going to feel tight.

[56] covered with my work.

[57] And so if we went to his, we would be about $2 ,000 short a month.

[58] Oh.

[59] If we start paying, if we get insurance on his.

[60] So, and I don't know where to cut or what to do.

[61] Because $2 ,000, yeah, that's a significant gap.

[62] That's not $200.

[63] Is there something you could do to bring that in to where you're still not working full time, but you're closing that gap while still staying at home?

[64] I'm not sure I haven't really looked into that.

[65] Okay, and why doesn't he look at for another job?

[66] That's another point.

[67] I know you said that this is his life, but like what's the situation?

[68] I mean, this is his life.

[69] He's no one he wanted to do since he was 12 years old.

[70] Yeah, but what is it?

[71] What is it?

[72] What is it?

[73] Well, he partially owns the business.

[74] He is a martial arts instructor.

[75] Okay.

[76] So is there a path to?

[77] Is there a path to growing the business to where he's earning more, basically, is what I'm asking?

[78] There definitely is, but it probably won't be for like another year or so.

[79] Okay.

[80] So, okay.

[81] So I think what it gets down to, Ashley, is you guys, you and your husband, you all have to sit down and decide what is, what is a priority for our family?

[82] What does a priority look like?

[83] What are our values when you both have desires that are conflicting, right?

[84] He has a desire to stay in a job where financially you wouldn't be able to do it.

[85] It would force you to work.

[86] And is that for him greater than having his wife who doesn't want to go to work be forced to go to work?

[87] Do you know what I mean?

[88] Like there's a level for me where I'm like, man, there's something about.

[89] And if you work, Ashley, I'm like, you're paying child care for four kids.

[90] That's a lot.

[91] So there's a point, too, that your income at that point, it starts to dwindle really quickly for that.

[92] And so, I don't know, there, there is something in me that I, I don't know.

[93] And Jade, you can, you can correct me on the other side.

[94] I fight for the mom that wants to be home with her kids.

[95] I really do.

[96] Because I think some moms us, Jade and I, we love to work.

[97] And so we're working and it's great.

[98] But when you have that feelings, I've had that feeling before, Ashley, we're like, I just know this, for this season, this is where I'm supposed to be.

[99] And here's the deal, too, Ashley.

[100] It may not be forever.

[101] It may that you guys do it for three years.

[102] And then, you know, half of the kids are in school.

[103] And, you're like, you know, half of the kids are in school.

[104] maybe one has a five day a week program and you know like and you and you start going back going back in um but motherhood is such a seasonal time and and i really do i fight for women to be able to honor that and the thing that sucks is that the math has to math that's we would say and so something has to give ashley so there either has to be a level that you say hey part time i'm going to do something on the side to bring an income like jade said or the only other or you go back to work full time or he has to find a different situation to sustain the life that you guys both wants.

[105] Right.

[106] So when you're crunching those numbers, be careful because I want to make sure that you're crunching them.

[107] If you're doing your budget, your lifestyle as it is with both incomes and you say, hey, we could get this.

[108] We're just $2 ,000 away.

[109] That's pretty good.

[110] That might just be the difference in you changing your lifestyle a little bit.

[111] Does that make sense?

[112] Is this a lifestyle thing?

[113] Or is it, hey, Jade, even with our bare bones budget, we're $2 ,000 away?

[114] I think those are two different questions, right?

[115] It might be.

[116] It probably is the lifestyle thing.

[117] I mean, there's definitely things that we could cut.

[118] Like, there's some programs that our kids are in.

[119] But you have to ask yourself.

[120] Like, you oldest, like they do dance.

[121] But you have to ask yourself about that quality of life, too, because there's part of this where I could look at this and go, hey, you go out and make an extra thousand.

[122] he go out and make an extra thousand like that should be easy enough but if that still just gets you to a barely baseline how much are you going to enjoy staying home with four kids when you can't put them in any activities yeah so there's you got things to weigh out yeah so maybe there's another option actually even for you for the time being or maybe you guys say for a season for three years we're going to grind it out and you do and you cut the lifestyle way back but yeah so thanks for the call actually i don't know if that helps but i think you guys sitting down and deciding what you value the most because something is going to have to have a sacrifice, and you guys need to choose that.

[123] That's right.

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[132] Welcome back to The Ramsey Show.

[133] I am Rachel Cruz hosting this hour with best -selling author Jade Warshaw.

[134] And we are answering.

[135] answering your questions.

[136] And today's question, Jade, comes from Isaac in Ohio.

[137] Yeah, he says my wife and I are recently married and found a house that we would like to buy for $600 ,000.

[138] We earn about the same amount a year, $600 ,000 a year and we have zero debt.

[139] Good.

[140] My wife has over $200 ,000 sitting in a savings account and I own a home that I bought before a marriage.

[141] I proposed she put down $150 ,000 of her savings for the down payment and put the house in her name.

[142] She comes from a divorced household, so it's why I suggested putting the home in her name.

[143] Her family thinks it should be the man's responsibility to pay for the house, and she should not be putting down any money.

[144] I don't know what type of world these people live in, but it's not the 1950s anymore.

[145] They don't seem to comprehend that I already own a house and can't just buy another one.

[146] What can I say to knock some financial common sense into these people.

[147] Isaac, I'm going to knock some financial sense into you, dude.

[148] Listen, you're both wrong.

[149] All of you are wrong.

[150] Here's the thing.

[151] There's just a lot of I, me, his, her, all these, this individual talk.

[152] And we're married, right?

[153] My wife and I are recently married.

[154] And so I just think that the same way that you feel that her side of the family, kind of has this outdated or erroneous way of thinking.

[155] I honestly think, Isaac, you have a little bit of it too because you guys are very separate.

[156] And I understand that you're in many ways trying to honor like some of her previous trauma and her previous pain with the divorce.

[157] But I would think of that as even more reason to cling on to the fact that we're together.

[158] I'm not going anywhere.

[159] We're making this work.

[160] We are one.

[161] And that's the relational side of it that I see that I think no matter what you decide here, I think you're going to run into problems until you solidify the oneness in your marriage.

[162] So that's thing number one.

[163] Thing number two is, yeah, a $600 ,000 house.

[164] She's got $200 ,000 sitting there.

[165] If you've got some money to put in, yeah, put as much down as you can.

[166] You don't have any debt.

[167] I'm all for that.

[168] I don't know what the situation is with the other home that he owns.

[169] Yeah.

[170] Part of me is like, there's just a lot of singularity going on.

[171] Yes.

[172] And yeah, And the combination isn't happening like it should of the oneness.

[173] And yeah, because if I were you, Isaac, I would sell your home.

[174] Yeah.

[175] And you guys together, go in and pull your money together, see it all under one account.

[176] And let's put down the biggest down payment we can, regardless of man, woman, whose money it is.

[177] Like, it is you guys together.

[178] And I think people get in trouble, Jade, sometimes.

[179] We could go down on this rabbit hole, a whole different way.

[180] But just for one, but this, that way of thinking, there's so many splinters, I think, in it.

[181] But one of them being that we don't honor personality enough, it's honoring, are you a man or a woman?

[182] And there's something about you, it is your, it is a, it is a personality element that is so key, you guys, when it's a married couple.

[183] Because if anything, people are like, well, I'm going to, I'm going to let him take care of it, or she just does it all.

[184] I'm just going to let her, I'm going to be hands off.

[185] no no no it is a hey who is who is really good at this who actually enjoys the money that's right and here at rooms we call it the nerd and it's the person that really genuinely enjoys doing the budget they really do like crunching the numbers they like to feel in control it is it's fun for them so let them take the first pass that kind of creating a plan and say okay I found this account here and this this let me here's what I see and then the free spirit the one that may not be as excited about things like a budget or planning for the future as much they're still in the conversation have as much say as the other person.

[186] But again, it's regardless of gender.

[187] It is truly how you're wired and how you're created and honor that in each other because you can learn from each other in both ends of it.

[188] So absolutely.

[189] I don't know.

[190] Yeah, I don't like that way of thinking.

[191] I don't either.

[192] I 100 % and I love that you put it in that way.

[193] It's just a personality trade.

[194] It's not a gender.

[195] Yeah.

[196] On that, but they've got to get together.

[197] Yeah.

[198] On both ends of y 'all are on both extreme ends.

[199] Her family was on one end and I's like the way you view money and relationships is at the other.

[200] Y 'all need to find that.

[201] There's a balance there.

[202] So come more in the middle.

[203] But thanks for the question.

[204] Good question.

[205] Yes.

[206] All right, let's go to Gustavo in Denver, Colorado.

[207] Welcome to the show.

[208] Hi.

[209] Hello.

[210] Can you hear me okay?

[211] Yes, we can.

[212] How can we help?

[213] So my current situation is I am 30 years old trying to move out.

[214] and I have poor credit except I don't really have any debts to pay off to build credit and I'm getting declined everywhere left and right and I'm not sure what to do.

[215] Do you have poor credit or zero credit?

[216] Poor, most $600s, but everywhere I apply, that's all they really look at.

[217] Yeah.

[218] Why is your credit low?

[219] I have two derogatory marks and I haven't necessarily been smart in the past.

[220] But I started following you guys over a year ago and I've paid off a couple of credit cards and all is left is two like collections.

[221] Yeah.

[222] And so it's just dropped over time because I've been slowly paying everything off.

[223] Yeah.

[224] But you still have the two in collections.

[225] Yep.

[226] Yeah.

[227] I mean, the fact is it's going to be low and bad until you get everything that was on your credit cleaned up and clear it off, including the two that are in collections.

[228] And then after that, once everything's off, yeah, once everything's off your credit, it takes, you know, six months to 12 months for that to drop off completely, and then you're at zero.

[229] And that's where you want to get to.

[230] So I think it's just going to take you some time.

[231] Why are you trying to buy rental properties when you have two items and collections?

[232] No, I'm just, I'm just trying to move out.

[233] Trying to rent somewhere.

[234] Oh, rental.

[235] Okay.

[236] Have you had a, have you had a consistent job at the same employer?

[237] Yeah.

[238] I work as a trucker and I just actually a year ago switched jobs.

[239] So I've been employed at the same place for a year.

[240] Have you shown them proof of income at an employer for one year?

[241] And do you have money saved?

[242] Like, do you have first month's rent, last month's rent a security deposit?

[243] Do you have cash that you can be up front with?

[244] Yeah, I have the cash and I have all the proof for, you know, what I make and all the other bills that I pay on time.

[245] and just nothing Yeah, so then you're working At that point Honestly, you're just working with big corporations Where there's probably a manager at that apartment complex And he literally doesn't have the power To rent you something Because it probably is Hey, if anybody's below 700 or whatever You don't have the authority to go and rent So either you need to get to somebody With higher authority And the power to be able to kind of overwrite that Or you need to look for somebody That's a landlord and they're a one -off And it's not part of a big, you know, system like a big apartment complex, but maybe it's a small, you know, one bedroom, something that there's an owner that you can actually talk to that owner and tell them about your situation.

[246] Have you tried that route or has it been just more like apartments that you've been shopping?

[247] I've been looking around in Zillow and like all the main like main places to apply for rent.

[248] Yeah.

[249] The only thing is so there is like a, you know, I'm trying to move out within like two months and also I had an idea to get a loan to try to build credit, but I'm not, I'm not really sure.

[250] Like, I wanted to get your guys' opinion on that as well.

[251] I definitely would not go into debt to try to build your credit.

[252] I think in this case, to Rachel's point, you just got to find the right situation and going to, basically, for lack of a better word, like big box apartment rentals may not be the move for you.

[253] And, yeah, finding a landlord that's an individual that is willing to look past.

[254] that.

[255] I also think no matter what you do, cleaning up these collections needs to be A1, because as long as you have things in collections, nothing's going to get any better.

[256] And the faster that you do pay those off, the faster that you can get to a zero position, which is still going to look better.

[257] Yeah.

[258] Yeah.

[259] And that's the distinction here that Jade's exactly right.

[260] It looks better to have an undetermined credit score that they can't pull numbers for because they don't exist because it's been over a year since you've had any level of debt.

[261] So, you know, so there's at least a credible story there where what's being flagged for you, obviously, is that there were issues and that number is showing, hey, he didn't pay back what he said he was going to.

[262] And it's, and it is.

[263] It's, it looks bad on you.

[264] So I don't know if there's a situation, Gustavo, where you can stay where you're at for maybe six months to a year and you grind it out.

[265] You get that stuff paid off.

[266] Get that place where you are, have more of a clean credit history and then go out and try to rent.

[267] Or, find an individual that you can sit down with and just show them, hey, I'm a person.

[268] Here's the situation.

[269] And the more cash you have to be able to present, hey, I'm able to cover X, Y, and Z if something were to happen, the better it's going to look for you.

[270] So I'm sorry you're in that situation.

[271] I've been doing this show for over 30 years.

[272] And some of the saddest calls I have taken are from situations that are completely preventable.

[273] Yeah.

[274] And what's so hard is I feel like one of those, especially, the ones that I'm like, oh, it's terrible.

[275] People that call in and their spouse has passed away suddenly, and they don't have life insurance.

[276] When you have to think through, how am I going to pay my bills?

[277] I'm going to eat next week.

[278] Yeah, in the middle of all that grief.

[279] Like, it's just, it is.

[280] It's terrible.

[281] So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

[282] Zander is the place that Winston and I actually get all of our life insurance.

[283] And it doesn't cost much because Xander shops among a gazillion different companies.

[284] It doesn't cost much.

[285] You just have to admit that someday you're not going to be here.

[286] You've got to say it out loud and you've got to say, I'm going to say, I love you to my family by taking care of them and taking the time to put this stuff in place.

[287] The cost of stinking pizza.

[288] To get a free quote, call 800 -356 -4282.

[289] That's 800 -356 -4 -2, or go to Xander .com.

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[307] All right, up next we have Victoria in New York City.

[308] Hey, Victoria.

[309] Welcome to the show.

[310] Hi.

[311] Hi, how are you?

[312] Good, thanks.

[313] So the question I have is I wanted to know if we should pay off our car or buy or sell it and buy a van or something larger for our family.

[314] What do you owe on the car?

[315] 21.

[316] Okay.

[317] So you pay 20, you've got 21 ,000.

[318] And then the option was, Or should we buy a van?

[319] Yeah.

[320] So we're a family of three.

[321] And I mean, the car that we have, the car that we have is fine, but I feel like we're just, like, busting out of the seams.

[322] So I wanted to know if maybe we should sell it.

[323] I mean, it's probably, if we sell it and probably sell it for probably around the same amount that we owe.

[324] So break even?

[325] Right.

[326] And then, how much do you have saved?

[327] Nothing right now.

[328] Okay.

[329] So, and is there another car in the situation, too?

[330] Are you a two -car family right now?

[331] Yeah, we're two -car family.

[332] Go ahead.

[333] How much you guys make a year?

[334] About 160.

[335] Okay.

[336] And what other debt do you guys have?

[337] We have that car and student loans.

[338] How much in the student loans?

[339] 34.

[340] Okay.

[341] And no money saved at all?

[342] Well, we have an emergency.

[343] We have $1 ,000.

[344] Okay.

[345] Okay.

[346] We can sell the other.

[347] We do have another car, but it's paid off.

[348] And what could you get for that one?

[349] We could probably get $7 ,000.

[350] If the, if the goal is to get a vehicle that's large enough for your whole.

[351] family to fit and pay cash for it.

[352] My first move, unless you can tell me why this wouldn't work, because you know more about your situation than I do, obviously, is to sell the one that's worth something so you get a head start saving for the van.

[353] So my thought would be sell car number two, it's already paid off, clear $7 ,000.

[354] You've already got the $1 ,000 saved.

[355] You'd be a one car family.

[356] And Victoria, we said, we're a family of three.

[357] Is it just you, your husband, and a baby?

[358] No, no, I'm sorry.

[359] For family of five, we have three kids.

[360] Okay, I thought, okay, Victoria, I think we can stay in this car a little bit longer.

[361] I thought it was just a family of three.

[362] Okay, you have three kids.

[363] Yeah, okay.

[364] That's fair.

[365] That's fair.

[366] So what have you looked at, like these vans?

[367] Is there one for $7 ,000?

[368] Can you find a junker for $7 ,000?

[369] And, you know, is this dire straits, I guess, is what I'm trying to figure out.

[370] Right.

[371] I mean, we've been looking at vans.

[372] We're looking at, like, a 2015.

[373] It's looking around $10 ,000 to $12 ,000.

[374] okay I just the only thing will be you all have to save for it yeah yeah you got to just save for it Victoria and it's one of those things that you're going to put money aside month after month and the fastest way to get there is what jade said would be to be a one car family if you don't want to do that then it is going to be saving $10 ,000 to get to a point where you can just buy it outright but then also that's $10 ,000 that's not going to pay off just your current car which I understand you you want to how to trade it I get it um it's just how urgent is this because I'm looking at $21 ,000 you owe on the first car, $34 ,000 student loans, and I get that it's not comfortable for three kids in the back.

[375] Like, I don't know, do their car seats, car seats not fit?

[376] Is it that?

[377] I just need to understand how urgent it is.

[378] I mean, I guess it's not really urgent, but I'm just thinking of like, you know, it's a growing family.

[379] We have sports.

[380] We have so many events going on.

[381] And like the car that we, it's a Toyota Highlander.

[382] I mean, it's just, it would be more, and it would be more comfortable to have a van.

[383] I mean, not a new van.

[384] Wait, so you have a Toyota Highlander already?

[385] Isn't that an SUV?

[386] It is.

[387] Okay.

[388] I'm changing this.

[389] I'm changing my vote right now.

[390] You told me you had two cars.

[391] I'm thinking like a Camry and an Ultima.

[392] So you have a sport utility vehicle.

[393] That's fine.

[394] And if I were in your shoes today, I would not.

[395] I would not.

[396] I would not.

[397] be saving money to buy a new car.

[398] If anything, I would still sell car number two or whatever, whatever is not the Highlander.

[399] Which one is the Highlander, by the way?

[400] The paid for one or the $21 ,000?

[401] That we owe $21.

[402] Okay.

[403] Then I'd sell car number two, put it towards the Highlander, get that thing paid off as soon as possible.

[404] And can you guys survive as a one car family for a while to pay off some debt before you save up?

[405] And by second one?

[406] That would be ideal.

[407] However, we are, my husband and I both work and do commute.

[408] Okay, so you're not seeing a way to do that.

[409] I think it's just a sense, Victoria, you're going to have to just pay this car off.

[410] You're going to have to pay off these student loans and you all got, I mean, but you make $160 I mean, you're in New York City, so I know it doesn't go as far, but it's just going to be you guys buckling down for 18 months, two years, and it will be uncomfortable.

[411] I mean, yeah, it will be uncomfortable.

[412] But trading in and the whole car situation it's so hard for me because it's such a depreciating assets that I'm like, these loans, that are racking up interest and all of it.

[413] I'm like, I just want so much of your effort to get these out of your life.

[414] And then we can go from there to say, okay, the car is paid for.

[415] What does it look like in two years to trade it in?

[416] We can save a couple of thousand.

[417] Go to a minivan.

[418] Like, you know, I would make that move later personally.

[419] Because, again, all your efforts and straining and saving and sacrificing lifestyle, I'd rather that go to debt than to go to a van to feel a little bit more comfortable.

[420] Yeah, that's going to be going down in value and pretty, you know what I mean?

[421] it's just another thing.

[422] But I get it.

[423] We have three kids.

[424] And if they're all in one row, they're going to be hitting each other and it's annoying and there is stuff everywhere.

[425] Like, it is true.

[426] But also, I think you guys have different priorities.

[427] And if you're going to follow the steps to get in control of your money, stop sending your income out to freaking car payments and student loans and actually keep your income.

[428] And get out of debt, it's a thing.

[429] She has a highlander.

[430] That's plenty of space.

[431] Victoria, I'm getting you a little bit.

[432] That's plenty of space.

[433] It's not the same layout, obviously, as a minivan.

[434] Because let's be honest, I can't drive a minivan, Rachel, but I have been in one.

[435] I have all humility.

[436] The Odyssey, it is like a living room.

[437] It is the best thing ever.

[438] You're not cool.

[439] I get it.

[440] It is a mini van.

[441] It's so easy to get the kids in and out.

[442] That is very, very true, but a Highlander will get it done.

[443] It will get it done.

[444] Yeah.

[445] The minivan has its luxuries.

[446] And it was so cheap.

[447] When we went and priced out cars, we looked at SUVs.

[448] We looked at all different levels.

[449] And I'm like, I just couldn't stomach buying an SUV because I'm like, my children, God love you if you listen to this later on in your life kids.

[450] But you're disgusting.

[451] Like, I'm like, they take sandwiches and spread them apart and put them on seats and there's gum in the back.

[452] It's just, it's just their kids, you know?

[453] And I'm like, I just can't stomach a nice SUV personally at this stage of our life.

[454] 100%.

[455] And the minivan was a third of the price.

[456] Really?

[457] A third of the price of some of the SUVs that we were looking at.

[458] And I was like, all day.

[459] It's like a mom set in that driver seat jade.

[460] And the mom said, where do I want cup holders?

[461] Where do I want story?

[462] What do I want?

[463] You sit in a minivan driver seat and you think, a mom designed this car.

[464] Thank you, Mom.

[465] Honda Odyssey.

[466] Minivan is great.

[467] The worst part of it is people have to see you drive it.

[468] It's a minivan.

[469] You have to drive it.

[470] That's the worst part.

[471] But I'm with you, Rachel.

[472] I know, I know.

[473] I'll get my cool mom SUV soon.

[474] We'll see.

[475] This is the Ramsey show.

[476] This show is sponsored by BetterHelp.

[477] Hey good folks, the back -to -school Madden.

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[482] And those are the things that make our life even worth living.

[483] Here's what I've learned.

[484] When it comes to taking care of me, I have to put on my oxygen mask first.

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[496] That's BetterHelp, H -E -L -P .com slash Deloni.

[497] Welcome back to The Ramsey Show.

[498] I am Rachel Cruz hosting this hour with bestselling author Jade Warshall.

[499] We are taking your questions.

[500] Anything and everything about life, money.

[501] Where's Kate Middleton?

[502] The Royal Family?

[503] We are here for you.

[504] So give us a call at AAA 8255 -225.

[505] Up next we have Aurora, beautiful name, in Portland.

[506] Hey, Aurora.

[507] Welcome to the show.

[508] Hi.

[509] Hi.

[510] Thank you, thanks for having me. Absolutely.

[511] How can we help?

[512] So my question is, do I pause baby step two in order to save up money?

[513] I just got told last week that we're being laid off here.

[514] Oh, no. I'm sorry.

[515] Yeah, and so, yeah, it was a little unexpected.

[516] But I just, I'm a baby step two.

[517] So I'm like, do I save up money now in case, you know, for the future or do I just keep going at the debt until it's paid off?

[518] Is it just you or are you married?

[519] Do you have a family?

[520] Yeah.

[521] So my husband and I, we started this about a year ago.

[522] We paid off almost $50 ,000.

[523] Good for you guys.

[524] Yeah.

[525] So we have $6 ,500 left to pay on one card.

[526] And our last day of work, well, for me is August 30th.

[527] So I have a few months of, you know, paychecks.

[528] And so, yeah, we're just wondering, like, do we continue to pay on it or do we save up money and then come August in case I don't find a job right away or don't get called back that we have a little bit of a fund, you know, to live off of for a little bit.

[529] Yeah.

[530] So you've got $6 ,500 left and then you're done, done?

[531] Yes.

[532] Oh, wow.

[533] Oh, that's awesome.

[534] How much will you guys be, how much will you make between now and August?

[535] Or how much per month did y 'all bring in?

[536] Yeah, so we bring in about $6 ,000.

[537] It could be between, you know, 55 on a slow month, but usually it's about $6 ,000.

[538] Okay.

[539] And we're in March.

[540] We got April, May, June, July, August.

[541] So for your living expenses, I'm just curious, what margins do you guys have left?

[542] How much are you throwing at debt every month?

[543] That if you paused it, that would go into $6 ,000.

[544] savings.

[545] How much would that be?

[546] $1 ,400.

[547] $1 ,400.

[548] We're paying $1 ,400.

[549] Yeah.

[550] So my little calculator that I have on my tracking sheet shows that we should be done with this by August.

[551] Okay.

[552] Then you have no savings.

[553] Yeah, yeah, yeah.

[554] Yeah.

[555] What do you do for work?

[556] So I'm a secretary.

[557] And they've, yeah, they've laid off about half of us.

[558] So we don't know if we'll be called back.

[559] So I guess we're just kind of waiting.

[560] I don't want to quit just now and find a new job because, you know, we just never know what could happen.

[561] Can you, sorry, can you just clarify what do you make versus what your husband makes each month?

[562] Yeah, so I bring in $2 ,800 a month and he's the rest of it.

[563] And that amounts to $6 ,000?

[564] Mm -hmm.

[565] Yeah.

[566] Okay, got it.

[567] Okay.

[568] I think that you've got to do a budget here and figure out what's going on because you've got $1 ,400 left that you're putting towards debt.

[569] I do want you guys to have savings.

[570] the real question is what does your lifestyle look like just on his income and is it something that you guys can live on for a while until you find something new or is it something that's going to put you in a state of emergency one thing I do want to highlight is congratulations for paying down this debt and answering that call when it came because this would feel so much different if you had $50 ,000 of debt laying around am I right exactly yeah and just a quick shout like you guys gifted me financial peace last year and it was just, it's been a relief.

[571] Mm -hmm.

[572] I'm so glad.

[573] Me too.

[574] Yeah, I think my first, yeah, my first reaction would be what Jade said of, hey, could we live off a, if we had no debt, right?

[575] Technically, you'd be debt -free.

[576] Could we live off of his income for 30 days, 60 days until you find a job if you can't find one sooner than that?

[577] I just feel like your skill sets, it's so versatile.

[578] I'm like, you know, you know, admin stuff, you're able, you'll probably be able to get something.

[579] So could, so for the worst to the worst, could you guys live off of his salary for 30 to 60 days?

[580] And if you're like, no, we can't, then I would be okay saying, yep, we're going to put, we're going to put one to two months away just for safekeeping because we know this is coming.

[581] And, and again, if these were different numbers, I would probably have different opinions, right?

[582] But because you guys are so close.

[583] Right.

[584] And your income is, well, it is pretty much.

[585] half of what you guys bring in.

[586] He's got 32 and you've got 28.

[587] Mm -hmm.

[588] So we're right about the same.

[589] So we would be very...

[590] It'd be tight.

[591] We'd be very limited and just right on the cutoff, which I would be like worried to just live off of his income.

[592] Well, here's the blessing you have here is you know this is happening and you know it's not happening until August.

[593] So there's nothing, it's not to say that you have to wait until August to find a new job, right?

[594] You can start looking closer and closer and really truly have something lined up so that you have a smoother transition.

[595] Yeah, do you love the job you're at?

[596] Because you keep saying, if I get called back, what does that mean?

[597] Is it because another department would need something?

[598] Yeah.

[599] So we're, with our school district, we have union.

[600] So there is a possibility of being called back once, you know, the school year is, we're getting closer to the new school year.

[601] They're like, okay, well, if we have extra students, like our number of students go up, and then we might be able to hire some of us back.

[602] The other thing is that my, I don't think I would, on that?

[603] Yeah, the other thing is that I would want to look, even if it wasn't a secretary position, I would look at a different, like a teaching assistant or something else in the district because of just the benefit of being able to bring my son to work with me. He works at the same school that I work at.

[604] And even if I moved schools, I could bring him with me or a school closer.

[605] That's the benefit of being able to work in the district.

[606] And just the benefits in general, like medical, dental.

[607] all of that is taking care of us, taking care of for us.

[608] Yeah, so there's a lot of benefits for your overall life for you to stay if you can at your current.

[609] Yeah, I'm not worried about not being able to find another job.

[610] I know that I could do it.

[611] But you want to go back to that school for all of that, which I totally get.

[612] Okay, so honestly, what I would do is I would save up maybe two months worth of it, and you won't have it all paid off by August.

[613] You'll have two more months of that debt.

[614] But I'm okay with that in the season because it's not too.

[615] years it's two months and again the benefit of you if you do get called back because I can just hear it and I'm like I get it the convenience of your life overall what that looks like for the next year or two for two months of waiting is worth it to me yeah so I would be okay with you guys saving two months worth of expenses uh to the side which means you'll delay your debt snowball a little bit which is okay and we say this you know if you're pregnant if you know if you see an upcoming job loss if you're having to move if there's situations that you need to pause the debt snowball for, we're okay with that.

[616] I just don't want you to lose momentum.

[617] And y 'all are so close.

[618] That's why it's so hard for me where I'm like, oh my gosh, y 'all are like right there.

[619] Well, let me ask you, are you guys, is anybody doing a side hustle of any sort to make this go faster?

[620] Yeah, we do, on the weekends, we're doing insta part.

[621] Okay.

[622] I am helping my dad with his business.

[623] Good for you guys.

[624] And we've already, like, we've already cut so much out and we're like doing so much.

[625] I would hate to just lose this momentum.

[626] I'm like, do we stop?

[627] Do we keep going?

[628] Yeah.

[629] So we're doing a lot.

[630] And the momentum is.

[631] And the momentum is, just going to, you're going to still save at the same speed and the same rate as you were paying off debt, right?

[632] So that momentum goes and that momentum is still for a big why.

[633] It is to say, hey, you know, I can get called back to the school where my kids are at and my son's at.

[634] And that's a big why to continue what you're doing.

[635] So, so yeah, I'm good with you guys saving two months.

[636] What do you think, Jade?

[637] I, you know, I'm with it.

[638] My thought was going to be, is there some way that you guys can pick up any extra work so that you can keep almost like doing both your, you're, you know, you're still able to maybe to pay off this debt, but you're also able to stack up some savings.

[639] And then the other side of it is, is there still a way to have something just be in talks or have something lined up just in case?

[640] I mean, I hope you do get called back, but if you don't, I want to make sure there's something there and you're not elongating this process any longer than you have to.

[641] Yeah.

[642] Yeah.

[643] Yeah, if your confidence is high that you can plug into something.

[644] Yeah, so we get the month of July off for summer break.

[645] So there are summer, like summer school jobs and stuff that we can pick us.

[646] Oh, good.

[647] Yeah, that's it.

[648] That's great.

[649] So that's what I was thinking of doing.

[650] I'm okay, maybe I can pick up a few extra, you know, summer school hours.

[651] And also, I have, there is a possibility of being able to find another job.

[652] I have somebody who can help me with that.

[653] Good.

[654] Okay.

[655] Like medical offices and stuff.

[656] Yeah, that's great.

[657] I'm just preparing.

[658] I just, yeah.

[659] And, you know, yeah, and Aurora, you guys are doing an incredible job.

[660] I mean, and this is why you do.

[661] do this.

[662] This is why you do this.

[663] Man, what?

[664] You're not stuck in $50 ,000 of debt trying to figure this out.

[665] So there's a lot more peace, a lot more control in planning, and I'm just, kudos to you guys.

[666] You're doing it, doing the extra work, paying it off, and I'm so excited for you guys.

[667] You're so close.

[668] You are so close.

[669] Well, thanks, Jade, for a great show.

[670] Thanks to all the guys in the booth, and thank you, America.

[671] This is The Ramsey Show.

[672] Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

[673] I am Rachel Cruz hosting this hour with my good friend and bestselling author, Jade Warshaw, and we are here to answer your questions.

[674] So give us a call at AAA -8 -25 -5 -2 -2 -25.

[675] We will talk about your life, your money, relationships, career, anything, and everything.

[676] So give us a call.

[677] Up first, we have Lisa in Clarksville, Tennessee.

[678] Hey, Lisa, welcome to the show.

[679] Thank you for having me. Absolutely.

[680] How can we help?

[681] Hi, I'm 54 years old.

[682] I have no debt.

[683] I paid off all my student loans, credit cards, and my house.

[684] Good for you.

[685] Wow.

[686] Yes.

[687] I have 76 ,000, I'm sorry, 72 ,600 in the money market.

[688] And I want to know how to start investing.

[689] All right.

[690] That's good.

[691] So are you currently investing any of your paycheck every month?

[692] when you get paid.

[693] No, ma 'am, I am not.

[694] We don't have that option at my job.

[695] Okay, so they're not offering like an employee sponsored 401K.

[696] That's okay.

[697] You can still start investing 15 % of your income today by just investing in a Roth IRA, right?

[698] So is it just you or your husband?

[699] No, ma 'am, I'm single.

[700] You're single.

[701] Okay.

[702] So yeah, you're technically, I mean, you've gone beyond, you know, baby step four, five, and six because you've paid off your house.

[703] But let's go back to baby step four right quick and jump that one and place, which is 15 % every single month.

[704] In your case, yeah, I just start with a Roth IRA.

[705] You could start there and max it out.

[706] I think you can do $7 ,000 this year.

[707] And if you have money to go beyond, above and beyond that, we can look into what that means for you.

[708] But that's the first place to start.

[709] So that's thing number one.

[710] And then since you've got this big chunk of money sitting in this money market account, I would differentiate what's going to be your three to six months of expenses, and I would put that in a high -yield savings account.

[711] So what do you think three to six months?

[712] In your case, I'd probably do six months, to be honest with you.

[713] What six months of expenses for you?

[714] Well, I only make about $32 ,000 a year, and I pretty much use all of that to live on and pay the bills I do have, the living expenses.

[715] I do have a little bit left over from each paycheck, but I, have not been putting that in savings for about, I got divorced in September, so I haven't been putting anything in savings since I got divorced.

[716] I see.

[717] Well, the good news is, like you said, you've got the 72 ,000, so you don't necessarily need to set any more aside into savings, per se, but the retirement piece, I do want you doing that because you've got to keep actively adding to this nest egg.

[718] So...

[719] Do I take any of the 72 ,000 and put that in a Roth IRA, or can I do that?

[720] You can, but you can only do it up to a certain point, and then you're going to have to go into a brokerage account, or you're going to have to work with an investment professional to see what's the best option for you to open up.

[721] But I do want you.

[722] Go ahead.

[723] I'm sorry.

[724] No, you go.

[725] I got on SmartVestor, and I have an appointment with, I guess he's called a financial professional.

[726] Yes.

[727] I guess I'll speak with him.

[728] Yes.

[729] So when you work with that SmartVester Pro, they're just going to give you the options and the best.

[730] options for you in your situation.

[731] But at the end of the day, the thing I want you to hear me say is, I think you've done a great job with the $72 ,000.

[732] But what you've got to do is you've got to take some of that as your three to six months, because I don't want you investing all of your money.

[733] You've got to keep some of it liquid.

[734] And so whatever six months of expenses is for you, take that and just set it aside, put it in a high yield savings account.

[735] So if something goes wrong, Lisa, you can have that money.

[736] You know, if something happens with your roof or something happens with the car.

[737] You've got money that you can have access to without you pulling from invested money.

[738] Does that make sense?

[739] Yes.

[740] What is a high yield savings account?

[741] It's a savings account.

[742] Most of them, the good ones are online accounts.

[743] You could check out ally .com.

[744] We don't endorse them, but it's just the one I use.

[745] I know George uses Marcus by Goldman Sachs.

[746] Yeah, we use an ally.

[747] Yeah, it's similar to a money market account, Lisa.

[748] So it's one, it's an accounts that it usually, I think now is actually getting a higher rate of return the money market accounts, but a high yield savings account.

[749] And so what it is, it's basically a savings account where you're making more money, but you can't withdraw money up to a certain point in so many transactions per month.

[750] So there's some limits on it, but that's okay.

[751] Because again, that money's going to just sit there unless you really need it.

[752] And if you really need it, it's probably going to be one check that you write out of it if it's an emergency.

[753] And then everything else.

[754] So a Roth IRA is a great retirement vehicle.

[755] Your money will grow tax -free, which is amazing.

[756] So as it's growing and as it's investing, as it's invested, you're going to be actually making so much money on your money.

[757] It's kind of one of those accounts that you put in.

[758] And because the market averages 10 % or so, you'll be making money while you sleep, if you will, Lisa, which is a great thing for retirement.

[759] Lisa, you said you went through a divorce in September.

[760] And so you're back in the workforce.

[761] Were you working before that?

[762] Or did you go back to work because of where you're at?

[763] I went back to work.

[764] back to work.

[765] Okay.

[766] So I'm guessing this is one of the first times you're handling everything on your own, huh?

[767] Yes.

[768] Okay.

[769] Well, you're doing a great.

[770] You're doing a really good job, Lisa.

[771] Are you, what are you doing for work?

[772] I work in a finance office, so I do the accounting work.

[773] Okay.

[774] That's awesome.

[775] So my only, you know, other thought because of your age and because you don't have much in retirement, would what it would look like to up your income.

[776] And I don't know, you know, what opportunities are out there for you in your area and with your experience and all of that.

[777] But that is something.

[778] I mean, 32 ,000, that's on the lower end.

[779] So I would encourage you to see what else is out there.

[780] And I think, you know, there's a level of confidence, Lisa.

[781] I could only imagine that you now are starting to have.

[782] And even when sitting down with the SmartVestor Pro, you know, even listening to him and have him teach you, Lisa, okay, do not go in and just nod your head and just say, whatever you say, I want you to learn.

[783] This is going to be some of the biggest changes of your life and things that you're going to deal you're dealing with now that you never probably had to.

[784] And so you're going to be a sponge.

[785] And I don't want you to put your money in something that you don't understand.

[786] And so I want you to really, really learn.

[787] And I think over time, Lisa, there's going to be a level of confidence that is built.

[788] And I think that that can translate into more income.

[789] I think that you're going to feel like, okay, I can actually step out and apply for something and make more.

[790] But I think uping your income is another great goal to look at in the next, you know, three, six, 12 months.

[791] Absolutely.

[792] Because if you can make even 50 ,000, right?

[793] 20 ,000 more, that's going to make a significant difference to what you can put away for retirement.

[794] But you're in a really good spot to have everything paid off.

[795] Yeah, very good.

[796] You have no bills.

[797] I mean, it's only up from here, Lisa.

[798] So I'm really proud of you.

[799] Thank you so much.

[800] I really appreciate your time.

[801] Yes, absolutely, absolutely.

[802] Really good.

[803] Yeah.

[804] And that's, and again, learning about this stuff.

[805] understanding, okay, what is a Roth IRA?

[806] And I even love it's like, what is a high -yield savings account?

[807] Yeah, great questions.

[808] Yes, getting to these basics and really having this knowledge, knowledge gives you power.

[809] And when you have knowledge, you usually have options and you're able to see you're not pinned into one thing and because, oh my gosh, this is the only thing I got to do.

[810] And I don't even get it, but I got to do it.

[811] And it's this like fear cycle, all of it, right?

[812] That's right.

[813] When you have peace and you have knowledge and you're learning and you're experiencing, it does give you some confidence.

[814] So Lisa, I'm really, I'm really proud of you.

[815] I think that I think you're doing a really brave.

[816] thing and I'm excited for you to sit down with somebody and actually look at your specific numbers, have them teach you and show you, and they're going to run numbers for you to look out and say, okay, you know, in 10 years, here's where it's going to be in 15 years.

[817] And I think it's really motivating and empowering Lisa for you.

[818] So I'm sorry you went through what you went through in September, but we believe in you.

[819] Thanks for the call.

[820] Welcome back to The Ramsey Show.

[821] I am Rachel Cruz hosting this hour with Jade Warshaw.

[822] So it is.

[823] It is a It is.

[824] Tax season, Jade, it's approaching.

[825] It's here.

[826] It is approaching.

[827] And taxes are confusing.

[828] We get it.

[829] But we want to unpack one question from one of our listeners.

[830] And it says, what's the difference between a tax deduction and a tax credits?

[831] So tax credits cut your bill, dollar for dollars.

[832] So if you owe $1 ,000 in taxes, you have a $500 tax credit.

[833] You only pay $500.

[834] Love that.

[835] A tax deduction lowers your tax bill by lowering your taxable income.

[836] So again, and you simply subtract the deduction from your income, less taxable income means less tax is owed.

[837] So it's more on your income, not on the actual taxes there.

[838] So listen, again, there's a lot of ways you can go about this.

[839] And again, there's like, okay, I could self -file.

[840] Should I sit down with someone?

[841] I mean, there's just a lot of questions around taxes.

[842] So if you are confident, though, I'm filing on your own, make sure to head to Ramsey Smart Tax.

[843] And that's Ramsey Solutions .com slash tax.

[844] are you will find Ramsey Smart Tax, which is our no -nonsense tax software with low upfront pricing, no hidden fees, and we will connect you with a tax pro if you need that.

[845] So if you've had a big life change, or maybe you're re -looking at something if you own a small business, you know, you've had a child, adopted a child.

[846] Like if something as big has happened in your life, you may want to sit down with a tax pro.

[847] And again, you can find that on our website at ramsysolutions .com slash tax and you can get connected to a tax professional who is Ramsey trusted.

[848] So again, you can file on your own using Ramsey Smart Tax or sit down with a tax pro who is Ramsey trusted at Ramsey Solutions .com slash tax.

[849] Love it.

[850] Up next we have Morgan in Tucson.

[851] Hey Morgan.

[852] Welcome to the show.

[853] Hi.

[854] Thank you all for taking my call.

[855] Absolutely.

[856] How can we help?

[857] So my wife and I are buying a house.

[858] It's down to, we got down to 635, but it needs a little bit of work.

[859] We do have to put a new roof on it, which we estimate to be about $30 ,000.

[860] However, that's on the, that's our lowest estimate.

[861] So it could be as much as $40 ,000.

[862] We also have another $3 ,000 to $7 ,000 for radon, so we're looking total at $33 ,000 to $50 ,000 that we have to put into the house before we move into it.

[863] originally we were going to put down $335 ,000 on it by doing $2 .35 down and then recasting 100 afterwards because it got a half percent savings on the mortgage rate.

[864] Now we're trying to figure out do we go ahead with that original plan?

[865] We have the cash to do the roof and radon, but if anything goes wrong, then we're going to be short on cash.

[866] We'll have the cash, but we're going to be short on it.

[867] or do we hold off a couple months for the recast and make sure that we have everything squared away moved to New Mexico from Arizona and all of that?

[868] So you're going to put $2 .35 down and when were you saying that you're going to do this recast?

[869] How long are you waiting?

[870] We originally were going to do it the next day, which we were allowed to do.

[871] I don't understand why.

[872] Help me understand that.

[873] The only reason that we wanted to do it was because they gave us another half percent discount on the mortgage rate that's that's all to the next day put another hundred thousand down correct and there's no I mean obviously with a recast you're not closing again there's just you're just putting a hundred hundred thousand dollar payment correct I don't know I don't I want to know if there's a loophole there like I want to know something more about that it just feels weird that you would hold on to your down payment.

[874] From what we can tell, they market you hard.

[875] They try to get you to spend that money on something else and not recast it.

[876] Just gives them one more chance to get the money from you.

[877] And this is all to save a half a percent?

[878] Half a percent.

[879] And yeah, half percent on the mortgage 15 year.

[880] Yeah, because I mean, if worse comes to worse, Morgan, what would happen?

[881] And if you guys, you put $2 .35 down the next day, they're like, oh, this isn't going to work.

[882] The recast, oh, gosh, gosh, could you just throw the $100 ,000 on the house?

[883] Yeah.

[884] So, I mean, either way, I think you're going to be okay.

[885] But you're asking, with all these repairs, do you take $50 ,000 of that $100 ,000 and save it and put it to the side?

[886] Or what was your original question?

[887] Right.

[888] So that's what my original question was, is we have, I mean, to be on the safe side, $50 ,000 worth of repairs.

[889] we'd like to put down as much as we can on the house, but we also don't want to get into a cash crunch.

[890] Yeah.

[891] So the question is if you save the $50 ,000 out, I'm not really concerned about the recast and all that.

[892] My thought is, can you afford the house?

[893] Here's my two questions for you.

[894] Can you afford the house if you don't get the extra percent off?

[895] That's the first question, the extra half a percent.

[896] That's the first question.

[897] And then can you afford the house if you, instead of putting the $2 .35 down, you put $2 .85 down, and then you keep $50 ,000, will you still be able to, well, it still fall under that parameter of it's no more than 25 % of your take home on a 15 -year fixed rate, conventional mortgage?

[898] Yeah, yeah, it will.

[899] So then if I were in your shoes, based on what you said, I would probably be like, okay, we need this money because like you said, radon, the roof's got to get fixed.

[900] Was it radon?

[901] Is that what you said?

[902] Yeah, radon and roof.

[903] The roof's got to get fixed.

[904] That's $50 ,000.

[905] I mean, you need to get that done.

[906] done.

[907] So I would just keep that money out, have those repairs done.

[908] You put $285 down on a $635 ,000 house.

[909] Which is great because you were putting almost 50 % down.

[910] So yeah, I mean, you guys are in a great position.

[911] But yeah, so I wouldn't, I would rather have the cash fix what you need and then aggressively pay down the house because do you guys have any other debt?

[912] No, we don't have any other debt.

[913] We have very good income.

[914] What do you guys make a year?

[915] Before taxes and everything, 480.

[916] after taxes in 401k, 22 a month.

[917] And then the good news is, I mean, you said it's 50K on the high side.

[918] It sounds like you're like being, estimating this aggressively, which is good.

[919] And if you get out on the other side, you're like, hey, we still have 10 or 15 ,000 left.

[920] Throw it towards a mortgage.

[921] Yeah.

[922] So you guys would suggest then recasting less and then recasting or paying down quicker after everything is settled with what's remaining.

[923] Well, would they let you re, are they going to let you recast it, even though it's now going to be less than $100 ,000?

[924] Yeah, they don't care.

[925] That was part of the deal we signed with them.

[926] Okay.

[927] Yeah, I'm okay with that.

[928] And you guys make insane money, Morgan, too.

[929] So I'm like, if you have, you'll have roughly $330 ,000 left on the mortgage.

[930] And you guys making $480, which, again, is before taxes and everything.

[931] But I'm like, y 'all could have your house paid off in three years if you really did it.

[932] So, yeah.

[933] So, yeah, I think you're in a great position.

[934] I think you're in a great position.

[935] but I would have the cash on hand to do the repairs that are necessary.

[936] And I'm thankful that you know that they're coming because for some people, it sneaks up on them and they don't have the cash to fix it.

[937] True that.

[938] You know, usually when I hear recasting, I kind of, my radar goes up because a lot of times people are doing that really just to get a lower payment.

[939] And it's in their mind, they're thinking this is great.

[940] I don't have to close again.

[941] I'm not paying those closing costs.

[942] I can just have them recalculate it now that I've made this giant payment and get a lower payment.

[943] But at the end of the day, the whole point is to pay off your mortgage and get it out of your life, not lower the payment.

[944] And so that's kind of I was wanting to ask those questions, but it seems like they understand.

[945] And for them, the motivation was to get the lower interest rate, not to necessarily get a lower payment.

[946] That's right.

[947] That's right.

[948] Yep.

[949] No, that's good, though, because I think, again, with the housing market, where it's at, it is, it is.

[950] It's so expensive.

[951] I mean, everywhere, I just feel like it's insane and rates still are high.

[952] And so the whole mortgage conversation is one that has continued to be had.

[953] And it's still a hard you know it's a hard situation for a lot of people but don't for a lot you know for them in this situation like you said it is more about getting a lower interest rate because they're going to pay it off quickly and it's not just trying to finagle the system to just get in a house where we barely can get in but we're barely doing it because that when you're stretched that to that point the only way we can do this is if we do a recast right like if that's your only option there's some desperation there and if anything goes wrong it's going to be so stressed and you're going to hate this house and you're going to think, why did we do this when we did it?

[954] Why didn't we wait six, eight, 12 months and save more?

[955] So give yourself some breathing room, you guys, in this.

[956] And I know people are like, get in the market, get in the market, get the market.

[957] There's a lot of incentives out there.

[958] Incentives out there right now, too, that can lure people away from better judgments.

[959] Yes, exactly.

[960] So be careful with some of this, you guys, as you're out house hunting and all of it.

[961] We love houses.

[962] We love real estate.

[963] We want it to be part of your life, but we want it to be a blessing, not a curse.

[964] This is The Ramsey Show.

[965] Welcome back to the Ramsey show.

[966] So I feel like one of the things were known for, Jade, as the anti -credit card people where so many people try to play the game.

[967] Yes.

[968] Try to get the points and the cashback and all of it.

[969] And we're just like, you know what, live your own life, people.

[970] Live your own life.

[971] Don't have the bank involved.

[972] But credit card late fees, this has been in the news a lot.

[973] They've been capped now at $8 .8.

[974] Part of the Biden administration crackdown on junk fees where a lot of people were paying a ton of these fees, especially with late fees and everything.

[975] Yeah.

[976] They're cracking down on the credit card companies.

[977] It's crazy.

[978] It says this is from CNN .com.

[979] It says federal regulators finalized a rule on Tuesday to cap most credit card late fees at $8 as part of a broader push by the Biden administration to eliminate junk fees.

[980] The Consumer Financial Protection Bureau estimates the new regulation, which was first proposed in February, will save families more than 10 billion a year by cutting fees from an average of $32.

[981] It comes as Americans continue to pile on credit card debt.

[982] Guys, we know Americans are in $1 .1 trillion with a T of credit card debt, which is crazy.

[983] More than 45 million people are charged late fees on credit cards each year, which, by the way, that means for all the people who say, I have a credit card, Jade, but I pay it off every month.

[984] someone's lying.

[985] Someone's not telling the truth.

[986] Someone's lying because somebody is being charged these fees is all I'm saying.

[987] It says these individuals will now save an average of $220 per year.

[988] I think that's a lie.

[989] The new rule aims to close 2010 loophole.

[990] So basically, you know, Rachel, when I hear things like this, there's part of me that thinks there's goodwill here.

[991] Like there's good intent.

[992] I do think that the administration is going, how can we, like families are hurting, people are hurting economically.

[993] We don't want credit card companies take advantage of them being in a tight situation.

[994] Yeah.

[995] So how can we kind of, you know, close in the gap on that?

[996] And so eliminating junk fees, I think in one way, it's great because some people might look at $32 a month or $18 a month ago.

[997] That's nothing.

[998] But we do know that a lot of folks who are using credit cards, not everybody's using them to live a lavish life.

[999] Some people are just trying to keep the lights on, trying to keep groceries in the house.

[1000] And so there's part of this that I know a large population might be going, great like I could use an extra $32 yeah but I really do think that at the end of the day we have to realize that this is not something that we should cling to for hope like this is something for us to go listen I got to get out of this cycle yeah if $32 is what's like what's meaning the world to me I got to get out of this and honestly what I think is the way the credit card company is on they're going to find another way to charge you right like they're not going to do you think that they're really going to let go of 10 billion dollars a year they're not going to let that slide they're going to find another way whether it's increasing their interest rates whether it's charging other fees they'll figure out a way to do it they're not going to just lay down and say yeah sure yeah 10 billion i know so and what's crazy too and it's interesting to think about and i hate to say this because like you said i'm like there are people hurting and that this is the thing that's somewhat keeping them afloat if you will but still in this cycle is it these fees hurt less so does it keep you in a cycle because it doesn't hurt as much.

[1001] Yeah, you're not being charged that heavy late fee, so it's okay if you're late, it's okay.

[1002] But then your credit score keeps getting dinged.

[1003] I mean, like all of it.

[1004] So it's just being aware that this still, like you said, Jade, can't be the thing that motivates you.

[1005] It has to be out of this willpower of a higher will, if you will, to say, oh my gosh, I don't want this to be my life and I don't want this cycle in general, regardless of what, you know, what legislation is passed or not.

[1006] For myself, I want to take control of something, greater than this.

[1007] I just wish, you know, some part of me goes, if you really want to help people, show them the way out.

[1008] Don't show them the way to stay in it and stay comfortable.

[1009] Like, honestly, I mean, Ramsey here at Ramsey, we're always showing people how to get out of debt, how to get out of a cycle.

[1010] And I'm just like, stop giving people money and show them the way out.

[1011] Yes, but anyway, governments are not known for that, y 'all.

[1012] So we got to take it in your own hands.

[1013] Take the matters into your own hands.

[1014] That's right.

[1015] And just get out of it if you can, if at all you can.

[1016] And we're going to show you how to do that here on the show.

[1017] Yeah, absolutely.

[1018] All right, up next we have Joshua in Mobile.

[1019] Hey, Joshua.

[1020] Welcome to the show.

[1021] Hey, how are y 'all doing today?

[1022] We're doing great.

[1023] How can we help?

[1024] Yes, ma 'am.

[1025] Me and my wife, we purchased FPU about three days ago, and we've been following through.

[1026] and we had about 6 ,000 of savings.

[1027] So I couldn't get her, talk her into just having a thousand in the emergency.

[1028] So we got 2 ,000 in the emergency since we just had a one -month -old.

[1029] So I said, I'll take what I can get.

[1030] Listen, you got to sleep at night.

[1031] I hear you.

[1032] Exactly.

[1033] So I took that 4 ,000, and I paid off my credit cards.

[1034] Good for you.

[1035] How'd that feel?

[1036] And I paid off.

[1037] It felt amazing.

[1038] It's just a never -ending cycle, it seems like.

[1039] So I thank God that I found a way out of that.

[1040] That's awesome.

[1041] But I also paid off a washing dryer that I had to purchase due to an emergency that popped up in our home.

[1042] And the thing is, is instead of just having, you know, like $8 ,200 a debt left over, I bought my wife this far that I've seen to hear about all day long and y 'all keep getting asked about.

[1043] And this car was $41 ,000.

[1044] Uh -oh.

[1045] Yep.

[1046] And I still owe $37 ,000.

[1047] but instead of paying off my debt in six months now, I'm looking at, you know, a couple years.

[1048] And I'm just looking at what y 'all recommend.

[1049] I spoke with a dealership trying to see if I could come in and maybe trade it in for something a little less.

[1050] Have you Kelly Blue Booked at Joshua?

[1051] No, ma 'am.

[1052] I haven't.

[1053] Okay, because I'm curious.

[1054] How long ago did you get it?

[1055] We've only had the car for like four months.

[1056] And then I ran across y 'all and I was like, man, that was perfect time.

[1057] Okay.

[1058] Yeah, four months too late a little bit.

[1059] I know, I wish we were there earlier.

[1060] Was it brand new?

[1061] Yes, ma 'am.

[1062] It's still only got a...

[1063] Okay, so it's taken a hit, and I'm curious, though, you owe 37 on it.

[1064] I'm hoping there could be a wash there.

[1065] You know, if you could sell it.

[1066] I would Kelly Blue Book it and see what you can.

[1067] It's a four -month -old car.

[1068] It's a five -year loan at 2 .9 % interest.

[1069] So it's not a bad loan, considering, you know, other loans.

[1070] No. How much do you guys make a year?

[1071] We made 120 last year.

[1072] Okay.

[1073] annually is this your is this your only car when i look at the total i'm like uh yes her only car and then my truck's paid off and then what other debt do you guys have i have a seven thousand dollar personal loan uh and then uh 1800 on a stupid computer that i bought okay so you'll get that paid off this month i'm hoping um yeah oh god joshua i'm selling the car yeah i couldn't stomach having a $41 ,000 asset that is going to continue just to drop, drop, drop, drop, drop as even we're talking on this call right now.

[1074] It's just continuing to drop.

[1075] And for you guys just to be out, it's not worth it.

[1076] It's not worth it.

[1077] A car, it's not worth it.

[1078] And so I would sit down with your wife and be like, hey, what does it look like if we save up some money and we sell this?

[1079] I'm hoping you can get more than what you owe just to get, you know, a few thousand bucks out of it.

[1080] And then pair it together.

[1081] Go and look on auto trader, just look around at a private sale of another car.

[1082] You can get a great car, and a car is a car, right?

[1083] It needs to get you from point A to point B. And so much of what she had a 2008 Nissan center.

[1084] And like I said, we got a one month old daughter.

[1085] And I was like, you know, that thing ain't safe.

[1086] And she's like, well, let's get this $20 ,000.

[1087] The thing is you go from one extreme to another.

[1088] Don't do that.

[1089] I hate when people do this.

[1090] And I get it's out of the love of the baby.

[1091] But a Camry is safe.

[1092] Yeah.

[1093] An eight -year -old Camry is safe.

[1094] it's going to be fine it's going to be fine and so be and and joshua run the numbers just for yourselves and just say let's put this car payment let's just say we just did the norm which i know you're not doing because you're you're wanting to aggressively pay off debt so i hear that but just put a car payment put your car payment in an investment calculator and see what it's costing you and that's what people you really need to understand is instead of your money working for you and when you sleep at night it's making you money and it's making you wealthier all of that is going to a deal with you dealership and going to the bank and you're paying interest on something that's going down in value.

[1095] So it's not a car.

[1096] It's not worth it.

[1097] The car is not worth it to me. What is your car payment?

[1098] I'm just curious on this $41 ,000 vehicle.

[1099] Yeah, it's like a $750 a month.

[1100] Oh, Lord.

[1101] That's messed up.

[1102] Like I said, I got the short loan.

[1103] That's still horrible, but I don't care.

[1104] Joshua.

[1105] Sell it.

[1106] Now a few months later.

[1107] Lock arms.

[1108] Sell it and then go get an awesome other car in 18 months once you're debt free.

[1109] But get this out.

[1110] Get this $41 ,000 of debt in a stupid car out of here.

[1111] You guys can do this.

[1112] I feel the motivation, Joshua.

[1113] You guys are on track.

[1114] I mean, you're four days in.

[1115] So I'm going to give you some grace.

[1116] But you're making traction and just go all in.

[1117] And if you hate the plan, if you hate it, Joshua, you can always go back and get a $41 ,000 car payment, car loan if you want to later.

[1118] If that's what you want to do, you can go back.

[1119] But try our way first.

[1120] Welcome back to the Ramsey show.

[1121] We were just talking with the break as we were right coming on hot on the air.

[1122] Yes.

[1123] Of just, you know, especially you young families that have kids and you're in this season of just, golly, it's just, it's a lot of work and the kids are just, there's goldfish cracker crumbs and peanut butter and jelly and crustable squeezed everywhere.

[1124] It's just, you know, you want to, you want to be able to enjoy life.

[1125] And I think for some people, it can be like, we want the nicest thing.

[1126] We want a brand new X. We want this, this, this, this, and this.

[1127] Can it even be taken care of, though, the way it's supposed to be is the question.

[1128] there's a level of like, you know, you, and I can be like this where I'm like, I just don't want to spend money on something that I can't enjoy in life because I'm so scared it's going to get destroyed.

[1129] And maybe one day, once they're teenagers, or I don't know, parents and teenagers can correct me. Yeah.

[1130] There's a point that I'm like, okay, great, that's not going to get spilled on or for the most part, like you, you can handle X, Y, and Z. All I know, Rachel, is I watched my son take a piece of pizza and take every piece of topping off of the pizza into his lap, in the car.

[1131] And then when I leaned over to see what he was doing, I watched my daughter spill her piece of pizza on the carpet.

[1132] Oh, yeah.

[1133] And I'm like, I can't drive a Lexus truck.

[1134] It's done.

[1135] I never can.

[1136] It is a real thing.

[1137] So we want to enjoy life to people.

[1138] So some people go get the brand new thing because of the new baby.

[1139] And I'm like, I don't know.

[1140] They're going to spit up on it.

[1141] Yeah, 100%.

[1142] The car seat is going to put those deep indentations into that nice leather.

[1143] Even if you put down the little mat, it's still going to put that.

[1144] deep, you know, you put the little kick pads.

[1145] By the time you baby proof it, you put the kick pads on the back of the seat, then it's not even what it was intended to be anymore.

[1146] I'm like, listen, I'm just, I'll just wait.

[1147] We'll wait.

[1148] We're going to have delayed gratification, Jade.

[1149] And these kids are not going to ruin that truck when the time comes.

[1150] That's right.

[1151] That's right.

[1152] That's right.

[1153] All right.

[1154] Up next, we have Erica in Gainesville.

[1155] Hey, Erica.

[1156] Welcome to the show.

[1157] Hi.

[1158] Thank you for taking my call.

[1159] absolutely how can we help um so my husband and i sold our first house two years ago because we wanted to buy some land and we had 150 ,000 in equity in our house and decided on our path to be debt free we were going to buy a property outright um we didn't want to have a mortgage at all so we did we found a five acre property with a double wide mobile home and we were planning on fixing up the double wide but now we've decided we hate it, and we want to build a house.

[1160] So we have $28 ,000 in debt right now, and that's student loans, consumer, and medical.

[1161] And I guess, so we want to pay all that off first before trying to get a loan to build a house, but we're worried that it's going to drop our credits and not be able to get a loan to build a house.

[1162] go ahead rachel i heard you yeah no well i was gonna i was gonna say you know yeah your credit will lower as you pay off debt uh but it will get to a place erika where it's undetermined basically and so um it'll take about six to 12 months once you pay off that last debt for it to get there and then from there you would do a process called manual underwriting now that's usually for already a home and so you would have to take out a construction loan and then roll it over to a mortgage once the construction's done.

[1163] So you would have to work with somebody to make sure with the manual underwriting process, which people still do that.

[1164] So that is still an option for you.

[1165] But yes, you will have your credit score lowered as you pay off debt because mathematically the way your credit score is calculated has to do it with debt.

[1166] And so when you're getting out and you're not accumulating new debts and you're, you know, but you're aggressively paying it off.

[1167] You will see over time as you pay off these debts, it's going to go down.

[1168] So yeah, you guys will just have to be patient in that sense.

[1169] Well, the good news is the time is built in because the time that it's going to take you to save up for the down payment is the time it'll take for your score to roll to zero.

[1170] Yep.

[1171] That's right.

[1172] So there's part of that.

[1173] So my husband's a veteran.

[1174] So we were planning on doing a VA loan.

[1175] And I guess we may have to look into that more if they will do an underwriting, manual underwriting process for VA loans.

[1176] I'm not totally sure about that.

[1177] well typically we would suggest a conventional loan there are some instances where a VA will work but a lot of times they have a lot of extra fees that end up making it more expensive so really do your research on that before you settle in on a VA loan simply because usually I think the biggest benefit is the you don't have to put money down correct correct yes and we want you to put money down because we want you to have almost like instant equity when you're going forward yeah so at least five percent for your first home is what we say 5 to 20 % is ideal but you guys too Eric I'll just you know say it as because I have you on the call when you go into this build process again it'll be in a few years but this is a situation that you'll go to the bank and they're going to be able to say oh my gosh you qualify for this and you're going to think oh we don't need that and then you're going to start the home build process and like oh we can upgrade here we could add a little square footage there and you start ticking your way up and it's so easy during builds it's usually more expensive than you think your standard can start to really waver.

[1178] So I always say this to people that are building homes, have a budget, be firm on it, and say we're not going over this.

[1179] And that's what Winston I did when we built ours.

[1180] And it was hard.

[1181] There was stuff that we said no to that we're like, man, we wanted it, but we just, at this moment in time, we can't pay for it.

[1182] So we're not going to do it.

[1183] But it's easy to creep that budget up when it happens.

[1184] And if you can get your loan, a construction to permanent loan the first time, that way they know, hey, I'm getting this loan for this, it's going to automatically convert and you're not having to go through that closing process twice or get to the point where you've taken out this construction loan to Rachel's point.

[1185] If you've gone over budget and then you're going over here to try to get that to convert to a mortgage and you're not approving, that you get in trouble there too.

[1186] You can get in trouble there.

[1187] So make sure you're doing it all in one from the beginning and there's plenty of mortgage companies who will do that for you.

[1188] That's right.

[1189] I'm next.

[1190] We have Nicole in Kansas City.

[1191] Hey, Nicole.

[1192] Welcome to the show.

[1193] Hi.

[1194] Hello, hello.

[1195] How can we help?

[1196] Okay, so I am calling.

[1197] My husband and I live very frugally.

[1198] I mean, we're kind of the joke of everybody because we drive the old cars, but we have secretly been able to put money away.

[1199] And I'm just putting it away in CDs and in cash.

[1200] And I've just been following Dave Ramsey for like the last year on Facebook and listening to you guys.

[1201] And I'm going, okay, we need to do something more because it's great that we have this money in CDs, but that's making us well.

[1202] $1 ,000 a year.

[1203] Yes, you're going to be investing.

[1204] And I'm going to talk a lot about Roth or IRAs.

[1205] And I'm like, is that what I start doing?

[1206] And we probably make both of us together, maybe $90 ,000 a year.

[1207] And we probably have $90 ,000 savings.

[1208] Okay.

[1209] Well, do your employers offer any sort of investing opportunity?

[1210] 401K, 403D?

[1211] Yeah, we do both have that.

[1212] And we have like employer match 5%.

[1213] So we both do the max to 5%.

[1214] both.

[1215] You are doing that currently.

[1216] Yep, we are doing that currently as well.

[1217] So my thing is, like I said, I'm putting away about $1 ,500 a month, sometimes $2 ,000 a month.

[1218] And I'm going, I need to be doing something more with this money because I'm going to be 37 this year.

[1219] And I'm like, you know, retirement's really not that far out.

[1220] Totally.

[1221] Do you guys have any debt?

[1222] That's right.

[1223] No debt.

[1224] So what I would do, Nicole, is remember, remember the, formula match beats Roth beats traditional so the first thing you're going to do is your match and you guys are doing that up to 5 % and we want you investing 15 % of your income into retirement so 5 % of that 15 % is done which is great so you have 10 % left so then I want you guys yes to open up a Roth IRA it grows tax free the max I think is 7000 this year that you each can put in you each can open one so I want you to open one Nicole and I want your husband to open up one so you guys will be investing money into that and then after that's done run the calculations and see okay is out of that 10 % after we max it out how much is left if there is any left go back to your 401k and put that money in and you just do that formula of 15 % and then anything extra that you guys have in your budget that you're able to throw out your house pay it off early and you just keep doing that and that Nicole your 401k and a Roth IRA you guys doing that from 37 to 67 you're going to be fine it's going to be fabulous if you want to go to ramsysolutions .com and hit our investing calculator and put some of these numbers in and just say hey yeah and this 90 ,000 that you have keep some of that cash and put it in a high yield savings account three to six I would do six months of expenses and then the rest of it you can use to fund your Roth if you need to you can put it in a brokerage account you know some type of vanguard account even so there's some other options there and you still have time you can fund 2023, let's see, 2023's Roth and 2024's Roth for each of you have until April tax day to do that.

[1225] So a few weeks.

[1226] Big opportunity.

[1227] Absolutely.

[1228] Thanks, Nicole, for the call.

[1229] Thank you, America for listening.

[1230] Thanks to everyone in the booth.

[1231] Jade, always a pleasure.

[1232] This is the Ramsey Show.

[1233] Live from the headquarters of Ramsey Solutions.

[1234] It's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

[1235] I am Rachel Cruz hosting this hour with bestselling author and my good friend jade warshaw and we are here to answer your questions so give us a call at triple eight eight two five five two two five and we're here to talk about your life your money your relationships your career and anything and everything speaking about money yes we're doing here at ramsie solutions we're doing a money documentary coming up and we're working on it's like a new show that we're doing and we need you guys to be a part of it.

[1236] And I'm not giving any like spoiler alerts, but I'm going to be part of it.

[1237] It might have to do with somebody coming into your home and helping you with your budget and your life and getting your money together.

[1238] It's just a little something going on.

[1239] It's all I'm saying.

[1240] Now, here's the criteria.

[1241] If you are interested in this, you've got to be somebody who's in debt, right?

[1242] You've got to be in debt.

[1243] Maybe you and your spouse are not on the same page with money and you need help with that.

[1244] Perhaps you're having a hard time making ends meet and you're living paycheck to paycheck and your income is a problem.

[1245] Or maybe you've said to yourself, man, I make too much money to feel this broke.

[1246] If you're in that camp, we want to walk with you for 90 days and help you turn things around.

[1247] This is a very immersive documentary style show, I guess, is the best way to say it.

[1248] So if you're interested, we'll put a link to a forum in the show notes.

[1249] So you can check out the show notes if you're on the podcast and you can fill out the forum.

[1250] And we may or may not get back to you.

[1251] I'm just saying this is a casting call.

[1252] All right.

[1253] So put your best foot forward.

[1254] Don't say anything or do anything weird, but definitely be honest.

[1255] And we'll be able to tell anyway if you're weird.

[1256] So anyway, put it out there.

[1257] We want to do this.

[1258] This is going to be so, so fun.

[1259] So great.

[1260] And hopefully we'll help a lot.

[1261] But Jade's pretty good at budgeting.

[1262] We'll just say that much.

[1263] I might help you budget a little bit.

[1264] We'll say that much.

[1265] Oh, so great.

[1266] And where did they go again, Jade?

[1267] They need to go to the show notes.

[1268] Right, James?

[1269] That's the best place to look at it.

[1270] Yeah, we'll have the link in the show notes on YouTube and podcasts.

[1271] Perfect.

[1272] So make sure to check that out, you guys.

[1273] All right, to kick us off this hour, we have Leah in Dallas, Texas.

[1274] Hey, Leah, welcome to the show.

[1275] Hi, thank you for having me. Absolutely.

[1276] How can we help?

[1277] So a few questions that I wanted to bring up, but the main one is how to get my husband to be okay and supportive of me. leading our debt payoff journey and the budget and just managing the finances.

[1278] He views it as because he's the man of the house that it should be his job.

[1279] And I am okay with that, but he does not budget.

[1280] He does not track anything.

[1281] He doesn't, you know, if we say how much did we spend on X last month, he has no idea.

[1282] So you're just a little better with money?

[1283] Like you're more nerdy.

[1284] Yes.

[1285] I do the budget and I track and I know how much for everything.

[1286] And he just doesn't do that.

[1287] So he's feeling it more as a gender role rather than a like skills role, like skill set.

[1288] Right.

[1289] Individual skill set.

[1290] And that's a, that's not a great way of looking at it.

[1291] So I hope he watches this call because we'll just get right.

[1292] I mean so blunt to it because truly it means it's not him.

[1293] And I think that viewpoint is, you know, they hold this esteem.

[1294] of I should be the one leading all of X, Y, and Z, probably from a, you know, spiritual conviction part of your life is where that comes from.

[1295] A good leader knows how to delegate it.

[1296] That's all I'm saying.

[1297] Yes.

[1298] And to understand that you guys are a team, Leah, you are a team.

[1299] You both have equal say in this.

[1300] You both have the ability to look at money and you both have ability to say, hey, here's where we think our money should go.

[1301] Naturally, one of you is going to be better at that than the other.

[1302] It's just like when you're planning a trip.

[1303] One of you naturally it's going to be more detailed and playing the trip.

[1304] Let that person who enjoys it and likes it.

[1305] Let them do it.

[1306] Let them thrive in that.

[1307] And that's what this money is.

[1308] It's not cutting him out.

[1309] And it's not an insult.

[1310] No, it's not cutting him out either.

[1311] It's saying, hey, we're both coming to the table.

[1312] But let me take the initiative because I love doing this.

[1313] I'm good at this.

[1314] And let me do this.

[1315] Let me work in my strength here.

[1316] And again, I think out of the name sometimes, Jade, of, and Leah, you're right here.

[1317] We're talking with us.

[1318] Yeah.

[1319] out of a, you know, a spiritual conviction, if you will, you know, they, I think we get that tangled up with, oh my gosh, we have to live this life together.

[1320] The man is the head, and I've got to lead out on the finances, and I've got to take the reins.

[1321] And he sucks at it.

[1322] And he doesn't want to do it.

[1323] And that's okay.

[1324] Do you know what I mean?

[1325] And that's okay.

[1326] So like call a spade a spade.

[1327] And again, it's not one is better than the other.

[1328] It's just more equal that you guys are working as a team together in this.

[1329] So I can't, you know, I appreciate his heart in it.

[1330] But I just think when you go about it that way, it can get dysfunctional really quick.

[1331] And you don't make progress because the person that's good at it isn't isn't the one that's saying, hey, let me. like take the first couple of steps and then we're going to do this together.

[1332] It's almost like when it's almost like when you let like the legalism of something.

[1333] Yes.

[1334] Keep you from enjoying the fruit of what you're actually there for.

[1335] Amen.

[1336] Do you know what I mean?

[1337] Yes.

[1338] And in this case, it's like you both have clearly agreed that you care about getting your finances in order and you both have right.

[1339] Both of you have said this is something we probably need to do.

[1340] But he's getting so caught up and like like I said that legalism of it.

[1341] He initiates it or something.

[1342] And it.

[1343] And it's both of you guys.

[1344] It's both of you.

[1345] Talking at, you guys responding and me talking about it right now, it kind of made me realize that I think part of where his issue comes from is that I am trying to do it y 'all's way.

[1346] Like, so you're on two different pages.

[1347] He, he's, we're on like half of the same page.

[1348] So he semi -agreed, but where we're different is he wants to keep, We have a pretty significant amount saved a little over $10 ,000, and he doesn't want to touch that, even though we have an overwhelming amount of debt.

[1349] And I don't like that.

[1350] And then he also doesn't want to close one of the largest credit cards we have because he wants it there as a cushion, like a just -in -case if something happens.

[1351] So I feel like a lot of what he's wanting is very fear -based.

[1352] Yeah.

[1353] So how much debt do you guys have, Leah?

[1354] I'm just not counting the house, 104 ,000.

[1355] 104?

[1356] What's it in?

[1357] What kind of debt is it?

[1358] Credit cards, my student loans, and one car loan.

[1359] Let me ask you this.

[1360] Would you say, if he were on the call with us, if we asked him, are you happy with where you are financially, what would he say?

[1361] Yes, and absolutely not.

[1362] Okay.

[1363] So here's the deal, Leah.

[1364] Here's what has to happen.

[1365] And something that he, again, I hope you're listening, husband of Leah, because I'm sure you're great.

[1366] But what people have to understand is if you're not happy with where you are financially, that means you have to do something different.

[1367] If you keep doing what you've been doing, you're going to keep getting what you've been getting, which is the definition of insanity.

[1368] And so change is hard.

[1369] It's scary.

[1370] It's uncomfortable.

[1371] But in order to get a different result, you have to do something different.

[1372] And this plan that we walk out with the baby steps is there for a reason.

[1373] It's not like it just was poof.

[1374] We just made it up.

[1375] It's three decades of people doing this.

[1376] Jade and I both in our personal lines have walked this out.

[1377] I mean, millions of people have done this.

[1378] And if you walk the baby steps and you do exactly in order what it is, you're going to feel so different when it comes to your money.

[1379] So hold on the line, Leah, because Austin's going to pick up.

[1380] And I want to give you guys Financial Peace University, which is our nine -week course and every dollar premium so you guys can start budgeting together, both of you, and start this.

[1381] Because again, it's the idea of getting on the same page with your values and the principles.

[1382] that's important.

[1383] Welcome back to The Ramsey Show.

[1384] I'm Rachel Cruz, chatting here with Jade Warshaw for the hour, answering your questions at AAA -825 -5 -2 -2 -5.

[1385] And one of the best ways, if you have enjoyed this show, via the radio, podcast, YouTube, please tell your friends and family.

[1386] We just met a fun mother, son, at the break and he's 23 introduced his mom to the show via YouTube and she just binged everything she said watched all the videos and paid off everything mortgage and all and I'm like see so all you watching on YouTube if your parents are out there just send them some clips you know if you have friends parents send your kids some clips you know neighbors friends family spread the word because our hope and our prayer for doing what we do is for you to take control of your money, create a life that you love, not let this be a stress point in your life.

[1387] And we really do believe over three decades of doing this plan and the baby steps that we know the answer.

[1388] It works.

[1389] And it sounds prideful, but we really believe that this plan, it helps you guys.

[1390] So we want everyone to experience that freedom and that peace when it comes to their money.

[1391] And the way to do that is to, again, enjoy the show let this be part of your daily rhythm share it leave a review if you'll do that as well subscribe to the podcast subscribe to the youtube channel uh it helps us out a lot and again it helps spread the word because we want people in control their money so true and rachel you said i'm going rogue for a minute you said something and it's true this has been a proven plan for 30 years people have been taking this plan using it and changing their life and you know we get call after call every show and And, you know, the last call that we got, it was they had $10 ,000.

[1392] They weren't sure if they wanted to put that towards debt or people want to keep around credit cards.

[1393] And I can say, like as a person, I mean, like you said, all the personalities have walked through this plan.

[1394] And I think that there's always a piece of it that when you first start out mentally, you wrestle with, right?

[1395] Like there's whether it's the cut up the credit cards thing or the buy a car and cash thing or the zero credit score thing or the take your savings to pay off the debt thing.

[1396] like everybody's going to come up against that wall that feels counterintuitive.

[1397] Yes, very uncomfortable.

[1398] Very uncomfortable.

[1399] And the truth is when you face something that's unknown, you can feel a little bit of fear or like, you know, I'm not sure if I want to take that next step.

[1400] But the thing that, and this is a thing that I embrace and hopefully it helps somebody listening, I never, before I found Ramsey, I never helped anybody get out of debt or have a million dollar net worth or save up three to six.

[1401] I never was able to do that for myself, let alone anyone else, which means I did not have a plan that worked.

[1402] Yep.

[1403] And some of you need to stop a moment and go, does my plan work?

[1404] Is what I'm doing working?

[1405] And the truth is, if it were, you wouldn't be calling us or you probably wouldn't be, you know, listening to the show for the very first time.

[1406] So there is a little bit of pride that has to come down and go, listen, my way of doing things is not working.

[1407] This show has been here for 30 years and this method has been here for probably even longer and it's helped people and it's helping people and it actually works and sometimes you just have to accept that and go okay.

[1408] And I love that.

[1409] Like you said, Rachel, the young lady and young gentleman in our audience, she looked at this and goes, oh, this works.

[1410] I'll do that.

[1411] Yes.

[1412] You know, and it's honestly, it's just as simple as that.

[1413] And I promise as you keep walking through that plan, you'll start to see, oh, it really does work.

[1414] And this really does pay off.

[1415] And, you know, that's right.

[1416] That's my little two cents for you guys today.

[1417] No, I love it.

[1418] I love it.

[1419] And change is hard.

[1420] It's uncomfortable.

[1421] But it's the way.

[1422] And it's just common sense, you guys.

[1423] We say gods and grandma's ways of handling money.

[1424] So it's not the new exciting trend that you're going to see on TikTok and like all of this, ooh, well, you just do this backdoor thing here.

[1425] Boom, boom, boom, boom.

[1426] It's pretty much common sense.

[1427] But it works every time.

[1428] It does.

[1429] With every debt level, every income level, we're regardless of where you are, it works.

[1430] All right, up next we have Carla in Los Angeles.

[1431] Hey, Carla.

[1432] Welcome to the show.

[1433] Hi, Rachel.

[1434] Hi, Jade.

[1435] Thanks for taking the call.

[1436] I'm happy to be here.

[1437] How are you guys doing?

[1438] Yes, we're doing great.

[1439] Glad you called in.

[1440] How can we help?

[1441] Yeah, so similar to what you were just talking about, I have a bunch of student loans that are coming up.

[1442] They were unfrozen after that long student loan.

[1443] freezing during COVID and I have a pretty high payment coming up and I've been listening to you guys I'm a relatively new listener but I'm fully bought into taking the baby steps and tackling one goal at a time and I'm just thinking through I have a plan for this year to get really tight on my budgeting and to cut down the debt as much as possible and I think I can I have $89 ,000 in student loan debt from undergrad and grad school.

[1444] So I have a plan to tackle it with budgeting, but I also, during COVID investors in a lot of stocks, singular stocks, even a little bit of crypto, and then some other Vanguard, and it's about $38 ,000 worth of stocks, and I'm just not sure if I should liquidate them.

[1445] I'm not, some of them are a little bit undervalue for what I bought them, so I just am a little bit uncertain about taking a loss if I was to liquidate them and put them towards the student loan debt.

[1446] But I feel like I know it's the right thing to do, but kind of just wanted to hear your thoughts.

[1447] Well, you tell us what you think the right thing to do would be and we'll validate it or not.

[1448] Okay.

[1449] I do think the right thing to do would be to liquidate it even if it is taking a loss just because I do believe in the mindset of like focusing on the debt first and then full force investing later.

[1450] Yeah, I agree with that because I don't think that these stocks were ever intended to be that long -term investment that's going to get you through retirement and set you free because they're just not, you know, single stock investments would not be, it's just so high risk and it's so up and down.

[1451] So for me, because it wasn't the time or the right place for me to invest the money, I would liquidate it for that reason and use it for much greater purpose to pay off this debt.

[1452] So I think you're right on.

[1453] Yeah, how much do you make a year, Carla?

[1454] Take home pay after taxes and 401K contributions is around 80K.

[1455] Okay, that's great.

[1456] Yeah, and I just see this as just like a jumpstart to paying off this $89 ,000.

[1457] I'm like, man, if you could get it, you'll get it down, you'll pay taxes and stuff on some of the things, but, you know, anywhere from you'll have 50, 52 or so left in student loans and that just feels like oh my gosh a totally different mountain to climb versus almost 90 you know what I mean like there's a yeah there's something about that now it's less than your yearly income instead of more than your yearly income that's right yes yeah so um how old are you yeah 28 28 okay you're really smart carla there's not I mean just the fact that you even were thinking about all of this during COVID and you're at least being proactive doing something with your money.

[1458] And I think that that is going to serve you really well later on.

[1459] So let me just say this, too, on the investing side, you have plenty of time.

[1460] Yes, man. You have plenty of time.

[1461] And I would want you to run some calculations yourself because you're a numbers person.

[1462] And I want you to see it for yourself.

[1463] If you go to Ramsey Solutions .com, pull up our investment calculator and just plug in some numbers and just say, okay, what if I did this?

[1464] What if I liquidated everything?

[1465] Put it to the debt.

[1466] What if I got an extra job, a side hustle, and I really worked hard to get this paid off in two years and you really started investing 15 % of your income, let's say at age 29 or 30, then run those numbers from, you know, 30 years old to 55 years old, investing 15 % of your income into retirement, knowing that your income is going to increase over time as well.

[1467] And just look at it yourself and just say, okay, I'm going to be okay.

[1468] And so I think we hold on to this level of security, especially when it comes to saving or investing.

[1469] And the truth is, there's a lot of risk with this payment of your student.

[1470] loans going out every month, right?

[1471] And having this payment that if something happens to your job, you still have, you still owe someone something.

[1472] So that debt freedom, uh, is huge.

[1473] It really is with the peace of mind.

[1474] So I would get there as fast as possible.

[1475] Okay.

[1476] Yeah, thank you.

[1477] I think it's just shifting the mindset from trying to do so many things at once, just one thing at a time.

[1478] I also was trying to spend for a home.

[1479] And I'm just, I'm having to like re -focus my mindset, really.

[1480] But I do believe in it.

[1481] Yes, absolutely.

[1482] Well, I'm so glad.

[1483] you called, Carla, because I think that's also normal, right?

[1484] I mean, what you're, what you're thinking through and processing.

[1485] I mean, the truth is, you know, she's making $80 ,000 once she gets this debt paid off.

[1486] If she invests that money from age 28 to 68, that's 30 years, average rate of return, I mean, she's going to have $2 .2 million, just investing 15%.

[1487] And that's assuming everything stays the same.

[1488] Everything stays the same, which of course is not because she's a genius and she's going to go on and do greater things.

[1489] So, I mean, there you have it.

[1490] It's awesome.

[1491] Well, thanks.

[1492] Carla, for the call.

[1493] This is The Ramsey Show.

[1494] So we have different events here at Ramsey Solutions that we put on throughout the year, that we want you all to come, hang out with us here at our Ramsey Solutions headquarters, you know, stay for some teaching, and we always want to create a great experience for you.

[1495] So we're so excited because we have a weekend of that coming up, the total money makeover weekend.

[1496] And it's going to be here in Nashville at the Ramsey Solution.

[1497] headquarters.

[1498] And it's a brand new event, May 10th and 11th.

[1499] So in one weekend, you're going to get a complete crash course on everything when it comes to your money.

[1500] We're going to be doing brand new talks.

[1501] All the Ramsey personalities are going to be there.

[1502] Dave Ramsey, George Camel, Jade Worshaw, me, Ken Coleman, Dr. John Zillone, and we're all going to be talking about this subject because we find that when you are in person with people, there's a level of connection there.

[1503] There's a level of energy.

[1504] And when you're with like -minded people, something just changes differently than just watching us via a screen or just listening to us in a podcast.

[1505] So we really encourage you to come out.

[1506] We're really excited about this.

[1507] It's going to be a full weekend.

[1508] So we're actually going to do a live taping of Smart Money Happy Hour.

[1509] Me and George Camel, one of our favorite podcasts.

[1510] We're going to be doing that on Friday night.

[1511] And then all day Saturday, we're going to be hanging out with you guys.

[1512] We're doing Q &A throughout the day.

[1513] Again, different talks from all the Ramsey personalities.

[1514] So get your tickets because our platinum plus tickets, they're already sold out, but you can still get platinum or VIP.

[1515] And you have to get them now because, again, they're selling pretty quickly.

[1516] So go to Ramsey Solutions .com slash events and check out our total money makeover weekend.

[1517] We are so excited.

[1518] It's coming in May. Come hang out with us.

[1519] All right, we're going to the phones and we have Hayden in Phoenix.

[1520] Hey, Hayden.

[1521] Welcome to the show.

[1522] Hi, thanks.

[1523] So I have a house question.

[1524] A little bit of background.

[1525] Me and my husband were 29 and 30 years old.

[1526] We have a five -month -old son.

[1527] We're currently completely debt -free.

[1528] No student loans, no credit cards, no car payments, no nothing.

[1529] And we have about $130 ,000 in cash.

[1530] Great for you guys.

[1531] Congratulations.

[1532] Yeah, so we are in Phoenix.

[1533] My husband's job has been really good, and that's keeping us here.

[1534] long term.

[1535] We do want to move closer to the family, which is up north in Idaho or Utah.

[1536] But we anticipate being here for at least five years.

[1537] We're actually currently under contract for a house supposed to close tomorrow.

[1538] However, we got a late disclosure with the condition of the house.

[1539] And we're kind of questioning whether or not we should move forward and close or back out in other places.

[1540] What's the late disclosure?

[1541] Yeah, so the house is old.

[1542] It's built in 1959, so we're aware of electrical issues, indoor plumbing issues, roof issues, wonder what issues.

[1543] I could please be a full gut job.

[1544] Okay, okay.

[1545] Do you have the money for the full gut job?

[1546] So we have that 130.

[1547] We're planning to put about 50 down and then have about 50 four different projects.

[1548] kind of cash flowing a lot of it because from what we were told a lot of it is livable and we could just kind of get to the projects as we needed to.

[1549] However, the late disclosure is with the condition of septic.

[1550] So it's not on city sewer.

[1551] It's on a septic and it's basically like a homemade septic system.

[1552] That just is not the least homemade thing.

[1553] I think I would Listen, there's many things that can be home -made.

[1554] Ceptic system should not be one of them.

[1555] There's a lot of things I want to say right now.

[1556] Okay.

[1557] That stinks.

[1558] And Hayden, this house, sorry, is close to where you guys want to move with family?

[1559] No, so it's actually a little bit further away from where our current life is.

[1560] It's about 40 minutes away from my husband's job.

[1561] So it's definitely doable.

[1562] It's not like in the most ideal situation Why do you want to move there?

[1563] Honestly, just due to the price.

[1564] Okay.

[1565] You would love to be right next to the work.

[1566] Yeah.

[1567] There is a, and this may not be you, Hayden, so just correct me. But there is a romanticized fixer upper.

[1568] And we get to go in and have the before and after pictures with the great music and put it on the Instagram reel.

[1569] And that's what we see.

[1570] And that's what we, oh, it just looks just so.

[1571] Kind of just like, oh my gosh, it's just a great adventure.

[1572] It's terrible, Hayden.

[1573] And you're going to be living there with a baby.

[1574] Uh -huh.

[1575] And it is not with a homemade septic system.

[1576] It's a crappy situation.

[1577] I'm telling you, it is.

[1578] And again, some people can do the renovation thing, but we talk to more people that took out HELOCs to do it.

[1579] They get halfway through.

[1580] It's too much work.

[1581] They have to hire contract.

[1582] I mean, it just ends up being, it ends up being another job.

[1583] I mean, you end up literally having a part -time job.

[1584] And it's romanticized because of TV shows and Instagram.

[1585] But it's a lot of work, Hayden.

[1586] And 50 ,000 may not go far.

[1587] How many square feet is this home?

[1588] So it's about 1 ,700 square feet.

[1589] Okay.

[1590] So it's a lot of stuff.

[1591] Okay.

[1592] Not too bad.

[1593] I don't know, Hayden.

[1594] And what do you guys know about?

[1595] I mean, with the septic tank thing, do you guys know what your path forward would be?

[1596] Like, how do you get on the, the, the, Yeah, so that's, we've reached out for additional quotes, and because they got a disclosure late, they're able to push closing late, but me and my husband are both looking at each other like, oh, like this seems.

[1597] Are you able to get out of it without penalty because of that?

[1598] We should be able to, yeah.

[1599] I think the way the contract is written, that we should be able to back out without having to lose any earnest money or anything like that.

[1600] Listen, for me, this is, this is a brown flag, which is also a red flag.

[1601] Like, I'm going to make jokes all day about this.

[1602] But for me, that's enough for me to back out.

[1603] It sounds like a money pit, too.

[1604] Yes.

[1605] I don't literally want to have to deal with someone else's crap.

[1606] There's enough things to deal with in the world.

[1607] And so I think that, guys, I can go all day on this.

[1608] All day.

[1609] All day.

[1610] I won't.

[1611] I know.

[1612] And Hayden, I know you guys are probably so itching to get into a house.

[1613] And the motivation you did it is because of the price.

[1614] Yeah.

[1615] And I think it's going to end up costing you guys more in finances and emotionally.

[1616] and exhausted and I mean it's just a lot I mean you're just you're going right in to live in a fixer -upper and I just don't think it's it's the baby too with a baby I just feel like that feels like a lot and he's currently waking up from his mouth right now so I'm like oh my gosh yeah I wouldn't have like I think to do it so yeah that's kind of where we're leaning but it's just yeah have some patience have some patience we look at so many houses and we just yeah but a home is one thing you don't want to go into going, I don't know, oh, maybe, maybe not.

[1617] A home is one thing you want to go into being like, yes, this is it.

[1618] This is the one we can afford it.

[1619] It's the right place.

[1620] Like, you want to feel that.

[1621] And here's what I want for you guys too, Hayden, is I want you to have three homes on the table that are in your price point, that are in a situation that you're like, okay, this would be good for our family, this, this or this.

[1622] Which one do we want?

[1623] When you have choices and options, you make better decisions, when you get pigeonholed into like, this is the only thing, this is it.

[1624] We looked at so many houses.

[1625] This is the only one you make really bad decisions.

[1626] And that's with anything in life.

[1627] So slow down.

[1628] You guys have the time.

[1629] And you're in a great position, Hayden.

[1630] That's why I'm like, I don't want y 'all to screw this up.

[1631] Because you're in a great position.

[1632] You have no debts.

[1633] You have cash.

[1634] Time is on your side.

[1635] You are the one that's on like the right side of this, right?

[1636] And so take your time.

[1637] I would keep looking.

[1638] If it were me, and again, maybe you're Joanna and Chip game.

[1639] and this is like this is what you do and you love it and maybe it's fine it just sounds like a money pit to me and then there's things like a homemade septic that I'm like I don't know I just don't think it'll be worth it your hard -earned money I'm scared will not go as far as you think it will in a situation like this and I would be patient and and wait it out I'm with you 100 % yeah it is hard though because when you do feel like oh my gosh we're in a we are in a financial position to do this we want to but then all these things keep coming up up.

[1640] Listen to those things.

[1641] Listen to your gut.

[1642] Listen to your gut.

[1643] And it's, again, without other options on the table where you can fully confidently say this is where we want to put our money and this is where we want to land and be here.

[1644] And I don't think that late disclosure was on accident.

[1645] I'm just saying.

[1646] Oh, that's a great point.

[1647] If they loved their septic system, they would be, that would be first thing.

[1648] You should see our amazing septic system that my husband bill.

[1649] It's great.

[1650] I said no one ever.

[1651] That's so true.

[1652] There's a reason.

[1653] Hayden, there was a reason for that.

[1654] Oh, good luck, you guys.

[1655] We're excited for you.

[1656] This is The Ramsey Show.

[1657] Our scripture of the day comes from John 1427.

[1658] Peace I leave with you.

[1659] My peace I give to you.

[1660] I do not give to you as the world gives.

[1661] Do not let your hearts be troubled and do not be afraid.

[1662] James Brown said, I'm trying to do one thing.

[1663] Bring people joy just like church does.

[1664] People don't go to church to find trouble.

[1665] They go there to lose it.

[1666] Okay, James Brown.

[1667] So good.

[1668] Well, I'm Rachel Cruz, and this is Jade Warshaw, and we've been answering your questions.

[1669] So let's go out to Los Angeles, and we're talking to Blair.

[1670] Hey, Blair.

[1671] Welcome to the show.

[1672] Hey, y 'all.

[1673] I'm a big fan of both of you and excited to be chatting with you.

[1674] Oh, I'm so glad.

[1675] So glad you called in.

[1676] How can we help?

[1677] So I have a question about Babysep 3B.

[1678] I'm at a point in my financial journey that I think intellectually, the next prudent step is to buy a house, or at least, you know, with my site set on that, but I'm pretty averse to risk, and I'm scared to.

[1679] So a little bit of background, I'm 36.

[1680] I'm single.

[1681] I don't have any kids and don't intend to.

[1682] And I live in Los Angeles where homes are very expensive.

[1683] I don't have any debt My current net worth is around $350 I have about $150 In investments like 401Ks and stuff And then around $200 in a high -yield savings account Which I realize is too much to be holding onto In a high -yield savings account if I'm not planning to buy But I'm just scared I really like not having any debt And because I am single and homes are so expensive I'm just scared to, you know, take on such a big, you know, like such a mortgage that I think would require in L .A. What's keeping you in L .A.?

[1684] Is it your job or you just love it there?

[1685] You have family?

[1686] It's my job.

[1687] I'm a lawyer.

[1688] My practice is here.

[1689] My clients are here.

[1690] Have you priced out things, Blair, like townhomes, condos, even?

[1691] Because when we say buying a home, it doesn't necessarily mean a single family.

[1692] Single standalone house.

[1693] I mean, have you looked at other options?

[1694] Because you are single, you know, you don't need a ton of room.

[1695] So it's like, yeah, have you looked at those, have you priced out, things like that?

[1696] Yeah, for sure.

[1697] I don't think I'd be comfortable buying anything more than like a one bedroom.

[1698] Okay.

[1699] And what are they going for?

[1700] Even that is going to cost probably like three quarters of a million.

[1701] Yeah.

[1702] Yeah.

[1703] The area that I live in.

[1704] Sure.

[1705] Like that seems about right.

[1706] Yeah.

[1707] And that's more of a mortgage that I want to take on with the current cash I have.

[1708] And I guess Should I just keep saving and moving in that direction?

[1709] I feel a little bit like, I know 36 isn't that old, but it feels a little bit old in retirement age.

[1710] Like, I feel like I should be investing more.

[1711] What do you earn every year?

[1712] What's your income?

[1713] This year will be about 320.

[1714] Here's the thing.

[1715] Good for you, Blair.

[1716] You're killing it.

[1717] Like, you've got a great, even in Los Angeles, like 320 is a good income.

[1718] And you've got this money saved.

[1719] And there is a part of this that is.

[1720] prudent because for most of us when we look at our budget when we look at what we're spending money on housing is the biggest ticket item and if you can find a way to stabilize that because rent can always go up it can always change you can you know there's leases involved and you have to go here and there but if you can stabilize that item by purchasing a home or purchasing you know in your case a condo there's something that does actually provide peace within that even though it is you know like you said it's a lot of money to spend but on the end of it, you're also building equity.

[1721] So, you know, my screen says, should I invest or should I, you know, buy a house, then I would say it's, in many ways you're doing the same thing.

[1722] When you're buying the home, it is an investment.

[1723] Yep.

[1724] You know, so hopefully that gives you, I mean, does that help you in any way to kind of see that this is, this is you making an investment.

[1725] Yes, you're spending money, but it's, it's invested money.

[1726] It's not going down a black hole.

[1727] And by doing that, you're stabilizing your lifestyle.

[1728] Yeah, that makes sense, I think.

[1729] I think I just needed to hear it that it's okay.

[1730] And listen, if you do it by the parameters that we talk about, that's, you're right.

[1731] There is a scary way to purchase a home and there is a right way to purchase it to where it's a blessing.

[1732] And if you follow our parameters, I'm telling you, it's going to feel like a blessing.

[1733] You're going to be like, oh, my gosh, this is great.

[1734] No more than 25 % of your take home pay.

[1735] That's what you're looking for with your HOA.

[1736] taxes, insurance, everything all in, no more than 25%.

[1737] And, you know, on a 15 -year fixed rate, that's what you're looking for.

[1738] And with your income, you might have to save up a little bit more money to make this happen.

[1739] I'm not sure you'll have to run those numbers, but that's what you're looking for.

[1740] And if you can accomplish that, then that's chef's kiss.

[1741] Yep, for sure.

[1742] And you know, Blair, we always say facts are your friends.

[1743] And sometimes these things can be so emotional.

[1744] And sometimes the math is what helps us.

[1745] the math can give us permission and the math can give us a big red light, right?

[1746] And that goes on either side of the coin.

[1747] Some people want to rush into something, but you're like, look at the math.

[1748] It's not going to work well.

[1749] But in your case, thankfully, you're kind of on the other end of it where I'm like, where the math could work.

[1750] You know what I mean?

[1751] So actually, like, run these numbers out and see them because the numbers, they don't have emotion.

[1752] So just look at them and say, okay, is it within these parameters?

[1753] Because we're a pretty conservative bunch when it comes to owning a whole we want it to do we want you to do it really really well and and so again it may take you Blair another year or two but the more you're in that mindset and the more you're working towards some things I do want you working towards homeownership I do want that to be part of your overall financial picture it may that may give you some peace too right that you're not having to do this tomorrow you may say you know it's it's March now maybe March of next year is my goal to really say okay I'm going to start looking and you know or whatever it is right you can have a timeline.

[1754] But I think those things will help you when you actually look at the numbers, give yourself that permission, and give yourself a great timeline.

[1755] Yeah, that makes a lot of sense.

[1756] I appreciate it.

[1757] I think, yeah, it's helpful to hear too that this is a pretty conservative strategy and it's going to be okay.

[1758] And it's okay for you to do both at the same time, by the way.

[1759] If you wanted to stack up more to put towards this down payment and start your 15 % investing, you can do both.

[1760] Yeah.

[1761] I am doing, I'm investing 15 % of my income.

[1762] come already.

[1763] So yeah, you don't have to stop doing that in order to save up the down payment.

[1764] You can, because I heard you say, you know, with your age or 36, like you don't want to, you know, get behind or anything like that.

[1765] So you're, you're doing very well.

[1766] Okay.

[1767] Awesome.

[1768] Thank you all so much.

[1769] I really appreciate it.

[1770] Yep.

[1771] Absolutely.

[1772] Blair.

[1773] Thanks for calling.

[1774] We're excited for you.

[1775] All right.

[1776] Let's go to Jennifer in Toronto.

[1777] Hey, Jennifer.

[1778] Welcome to the show.

[1779] Hi there.

[1780] Thanks for taking my call.

[1781] Absolutely.

[1782] How can we help?

[1783] I'm calling about an insurance claim I suffered some water damage in my home and I'm expecting an insurance claim of about $30 ,000.

[1784] I'm on baby step two and I had three possible ideas as to what to do with that insurance claim and hoped you could weigh in and let me know what you think so first one would be simply to repair the damaged areas of the home second one would be to accept a cash payout which would be 60 to 70 % of the amount and put that towards my debt.

[1785] And the third option would be to use the funds to put in a basement rental unit because currently in our area there is the shortage of rental units and I know I could rent that out for about $1 ,800 a month.

[1786] I would not do C. How much debt do you have?

[1787] 51 ,000.

[1788] 50 ,000.

[1789] credit at 1 .99 % line of credit.

[1790] And what repairs do you need to do to actually have a functioning house?

[1791] You know what I mean?

[1792] Like I'm sure some of it was damaged.

[1793] So what would you, if you priced it out?

[1794] Surprisingly, I've been lucky.

[1795] It's really quite functional.

[1796] I'll definitely need a new kitchen floor.

[1797] Yeah.

[1798] And the basement, it's not pretty, but it's still functional, warm and dry.

[1799] So I would be okay to live with it for a few years if need be.

[1800] Okay.

[1801] But eventually you are going to have to deal.

[1802] with the damage though, right?

[1803] Well, the kids are getting older and they're moving out, so potentially no, I could leave it unfinished.

[1804] Okay, yeah, as long as it's not doing more damage to the home, I would fix, you know, the flooring, fix what you need to fix, and I would throw the rest of the debt is what I would do.

[1805] Here's the thing, though, you're only getting 60 to 70 % of the $30 ,000 claim if you do that, right?

[1806] Correct.

[1807] So does that, what's the numbers on that?

[1808] how much is that going to leave you to pay off?

[1809] I'm trying to figure out if it's worth it.

[1810] If it's only going to leave you a few, you know, a couple of thousand for the debt, I'm almost like, fix your house.

[1811] Yeah, yeah, yeah.

[1812] Yeah, if the floors come back and they're 20 ,000 or something and they won't be that.

[1813] But like, yeah.

[1814] Yeah, so run those numbers.

[1815] That's a good point.

[1816] Run those numbers out a little bit further.

[1817] All right.

[1818] Thanks, Jennifer, for the call.

[1819] Thank you, America for listening.

[1820] Jade Warshall.

[1821] Always a pleasure.

[1822] Thanks to all the guys in the booth.

[1823] And thank you, America.

[1824] And remember to take control of your money and create a life you love.

[1825] If you're a leader, your personal growth matters for your organization, because whatever you lead can only grow as much as you do.

[1826] I know from experience.

[1827] I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership podcast.

[1828] I'm taking your calls and helping you figure out how to overcome challenges within your organization.

[1829] One episode could change your business.

[1830] Check it out on Apple, Spotify, YouTube, or on the Ramsey Network app.