Drop the Excuses and Embrace the Suck!

[0] Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we show people how to build wealth, how to do work that they love, and how to create actual amazing relationships like I have here with my buddy George Camel with the K. I'm your other host, Jade Worshaw.

[1] Hey, give us a call.

[2] The number is 3 ,8 -825 -2 -2 -25.

[3] We'd be happy to take your call and talk about the things that are concerning you in your life and in your money.

[4] And as a matter of fact, we're taking that to the next level today, George.

[5] After the Ramsey show, after the three hours of Ramsey show, we are going to do a live segment, George and I, live Q &A here on the YouTube channel, where we're going to answer all of your budgeting questions.

[6] And we're actually going to have the best app in the world, every dollar, the best budgeting app pulled up on the screen.

[7] You'll be able to see it kind of, you'll be able to see the whole every dollar screen and you'll be able to see George and I. And you can actually come in with your questions.

[8] You can put your questions in the chat.

[9] We'll also be taking calls.

[10] so it's kind of like a bonus Ramsey show exclusive to YouTube yes that's pretty cool we've never done anything like that yeah so watch on YouTube because obviously that's where it's that's where it is like don't be on your podcast app and if you go to the Ramsey show YouTube channel hit the notify me button so that you don't miss it that's right and so today today's Tuesday January 30th for those listening it's right after the show so it's 5 p .m. Central that's our time six Eastern that's right and if you're in mountain time you have to do that math on Figure it out, PT.

[11] We're not doing all the work for you.

[12] That's right.

[13] We'll do the every dollar work for you.

[14] How about that?

[15] We're going to have it all pulled up.

[16] You'll be able to ask like detailed questions like Jade, George, how do I go in there and make a fund or how do I, you know, do a long -term planning on using the financial roadmap?

[17] So we'll be able to help you with all of those questions.

[18] And, you know, if you just have kind of basic questions, this is not the time to call in and ask about investing.

[19] Yes, we wanted to be focused on budgeting.

[20] And we'll try to show you tactically what that looks like in the every dollar budget to make it even more tactical that's right we're all about solving problems george i love it what we do all right let's go to the phone lines and help solve jennifer's problem in new jersey what's going on jennifer oh hi thanks for taking my call i'm a huge fan of your show and i really appreciate taking the time to speak with me today absolutely um yeah so i just basically in a nutshell i'm trying to determine if it makes sense for me to purchase a home or uh can to rent for a couple of years.

[21] And just briefly, my background is I just sold my home.

[22] I'm currently debt -free.

[23] I'm 55 years old.

[24] I'm kind of late in the investment game as far as like 401K and stuff like that.

[25] But since I sold my house, I recently contributing, now I'm contributing about 13 % of my growth.

[26] I've got about 200 ,000 in the bank.

[27] Okay.

[28] And in order to purchase, the home around here, you're looking at probably around $300 ,000.

[29] And my plan was to put $150 ,000 down, take out $150 ,000 mortgage, but then I'm kind of going, I feel like I'm going backwards because now I'm completely debt -free and I'm renting, but the rent is about $2 ,000 a month.

[30] So I'm not quite sure, like, I've never been in this position before where I don't have any debt.

[31] I have money in the bank and I'm secure.

[32] So you took the money.

[33] You took the money from your home sale to pay off the debt?

[34] Yeah, there wasn't, I didn't have much debt.

[35] Like I'm not a, I didn't really have credit cards.

[36] It was just one student loan that was about 10 ,000.

[37] And so there, everything, and I don't have any credit cards or car payments or anything like that.

[38] So it really, I didn't have much net debt to begin with, but the home was sucking me dry.

[39] It was HOA fees and taxes.

[40] And it just, it wasn't financially viable for me to just continue to live there.

[41] I mean, I bought low and sold high.

[42] I'm sorry?

[43] What did it bring when you sold that house?

[44] It bought about $430 ,000, but then they had to take out the realtor fees and stuff like that.

[45] What did you take home?

[46] I took home about $2 .20.

[47] Okay.

[48] Wow, that's a lot of fees.

[49] Yeah.

[50] It was a nice, it was a nice, um, wait a second.

[51] You said it brought $4 .30 and you brought home $2 .20.

[52] How do they take half?

[53] Well, actually, I kind of left out.

[54] I did have a home equity line of credit on there that I took out.

[55] Yeah, because I had to help with some schooling for my kids.

[56] Let that be a lesson to the folks listening that when you take out home equity lines of credit, you have to pay it when you go to sell your house.

[57] So it eats up your equity.

[58] She should have had $430 ,000 of equity in her home and went away with half of that.

[59] So that's a lesson to all of us.

[60] So you've got $220 ,000.

[61] You are looking to buy a house.

[62] You're thinking of doing a $300 ,000 house with $150 down.

[63] My question to you would be, why wouldn't you just put the $220 down as much down as possible?

[64] I actually, I actually have about $200 ,000.

[65] Does that include your emergency fund?

[66] That's everything.

[67] Okay.

[68] That's everything.

[69] So that's why I wanted to keep $50 ,000, you know, kind of in a pocket somewhere, which I, again, I've never had before.

[70] Got it.

[71] But I'm just trying to, you know, I'm trying to determine what, makes the most sense.

[72] Like, do I continue to, I feel like every month that I write the rent check out, it's like I'm taking a step backwards, but at the same time, there's not much inventory.

[73] If you put $150 down on a $300 ,000 house, which is what you said you wanted, are you able to afford the monthly payment?

[74] It would be on a 15 -year fixed with, I estimated taxes and homeowners, and it would be roughly about $1 ,900 a month.

[75] Okay, which is less than what you're paying now.

[76] I, which is less than what I'm paying now, but my growth income for yearly growth income is about $67 ,000.

[77] Okay.

[78] And I also have a side business that brings in about, on a good, you know, good month, it's roughly maybe $800 a month net.

[79] So how much, how much a month do you see in your hand before, before you take out your investing?

[80] Before, um, as far as like, well, they already withdraw stuff from my, from my, they just started like literally when I sold the house.

[81] in November.

[82] They just started taking that out.

[83] So what I'm getting to is we want your payment to be no more than 25 % of your take -home pay.

[84] So that's why I'm like, what you take home after taxes, but before investing and before insurance comes out, right?

[85] Because we really just want to see what it is after taxes, your take -home pay is like, if it's going to be $4 ,000 and your payment's $2 ,000, that's a lot of your world getting sucked into that house and you're not going to have enough money to invest and retire with dignity.

[86] So that's where Jade's getting at here.

[87] And so you may need to rent for six more months, stack up some more money, and then pull the trigger.

[88] But you're really close to making this decision the right way.

[89] Yeah, it's close.

[90] You guys are pretty much dead on.

[91] You know, roughly like nine, it's like just about $4 ,000 a month that's coming home.

[92] So that would be like 50 % of my.

[93] And that's after you're investing, right?

[94] right that's after investing yeah and and that's and now since my rent is 2000 you know i try to weigh out like okay do i bite the bullet and try and find something but i just i wanted to get you know see a different perspective like what i could do if i decided to just hang tight and rent for a couple of years and you know well the big question is the big question is do you see a path for your income to go up in the next two to five years that's a question you've got to ask yourself, how long would it take you to save then the amount of money that you feel like you need to get a payment closer to what you're looking for?

[95] 25 % is what we aim for.

[96] If you're at 28 or 27, you know, nothing's going to happen to you.

[97] You're not going to combust into flames.

[98] But that's what we're looking for.

[99] And just make sure that when you guys are doing this math, you're looking at it just at your take home pay.

[100] Don't look at it after your pay, after insurance, after investing, because you've already whittled it down with things that are part of your budget.

[101] So that's the way this works.

[102] 25 % of your take home.

[103] take home pay is what we're looking for when we're buying a house.

[104] This is The Ramsey Show.

[105] One of the questions I get all the time is, which life insurance company should I use for my term life policy?

[106] A valid question, since there are hundreds of companies out there with rates all over the place in riders and add -ons that are simply a waste of money.

[107] You need to get this done and make the right decision.

[108] That's why the only company I use and have recommended for over 20, years is Zander Insurance.

[109] Zander is a broker who shops the top term life companies for you and finds the best rates available from the only plans I recommend.

[110] They also save you time, whether you want to work online, over the phone, or via text, their team will cater to your needs and help you make the right decision.

[111] This is an absolute necessity, and Zander has made the process easy and convenient.

[112] Call them at 800 -356 -4282, or visit zander .com for instant online quotes.

[113] You're listening to The Ramsey Show.

[114] I'm Jade Warshall, your host.

[115] Next to me is George Camel with a K. Don't get it twisted.

[116] Trust me, he gets very angry.

[117] He gets very angry if you get it wrong.

[118] We're taking your calls all hours, so give us a call the numbers.

[119] So give us a call the numbers, triple 8 -825 -5 -2 -25, and let us know what's going on.

[120] let's go straight to the phone lines where we've got charlie in my state orlando what's going on orlando florida what's going on charlie hey guys thanks for taking my call um i'm going through a divorce right now um and uh we sold the house and split the proceeds 50 50 um i was able to use some of that money to uh pay down my my bets um paid off my car paid off some credit card stuff And the only thing I have left is student loans, which are quite significant.

[121] It totaled about 183 ,000.

[122] I have one of those is about a $9 ,000 loan, and then the other, the rest is all one big loan, federal loan.

[123] Okay.

[124] And so I guess my question is this is kind of the balance of something that would kind of resemble a mortgage payment in a way.

[125] And so I wonder, do I treat it like a mortgage and get my, three to six months of emergency fund funded before I start tackling that or how should I go about that?

[126] Listen, I'm empathizing with you because I know how that feels.

[127] My husband and I had 280 ,000 of student loans.

[128] And so I, when you said, should we treat it like a mortgage, we used to call our student loan.

[129] It's, listen, it's our mortgage.

[130] However, it didn't change the way that we attacked it because technically it is still part of your debt snowball.

[131] And it can feel daunting to think, okay, I do baby step one.

[132] I've got $1 ,000 saved and you want me to have $1 ,000 saved for the duration that it will take to pay off this loan.

[133] And I feel that.

[134] And the answer, honestly, is yes.

[135] So my question, my next question to you would be, how much a month are you putting on this loan?

[136] If you, you know, this is your only debt, how much a month are you paying towards it at this point?

[137] So so far, it's still been just hitting the minimums.

[138] I'm still kind of sorting out my budget, you know, still reassesting after, you know, splitting with my ex.

[139] And so, yeah, there's, I don't have a ton of margin in my budget.

[140] There are things I'm working on cutting out.

[141] What's the minimum payments?

[142] Yeah, what are the minimums?

[143] It's about, it was about 300.

[144] The smaller one is around 111, and the other one is around 222.

[145] It's in like an income -driven repayment.

[146] Oh, yikes.

[147] And what's the interest rate?

[148] The smaller one is around 11 % And the larger one is around 9, I believe Okay, goodness gracious So this loan is ballooning every day Yeah Yeah Because you're not even, you're probably barely even Meeting the interest if that Yeah Matter fact, I'm just throwing this in a calculator right now So you can kind of see So I can kind of see where you would be Yeah That's one of the things I hate most about the income driven repayment plans is that your balance grows and they act like they're blessing you with this low payment while your balance keeps ballooning every single month.

[149] So what you need to do is get as much income as you can, live off as little as you can and throw the difference at this debt to where you're putting $1 ,000 a month, $2 ,000 a month to this debt, $3 ,000 a month a month.

[150] I hope to God you make six figures.

[151] What do you earn?

[152] No, no, I make about $4 ,400 per month net.

[153] What was your degree in?

[154] They're in business degrees, and I tried pursuing those careers, but they didn't suit me, and I ended up leaving those jobs.

[155] I taught.

[156] I was a teacher for about six years, and now I'm in a position where I'm working with adults teaching people with visual impairments to use computers.

[157] It's a relatively new job, but it's something that suits me, and I'm doing well at it.

[158] But I do agree I need to increase my income, and so my other question is, like, are there any side hustle that you recommend where I could?

[159] Well, we need to get your core income.

[160] come up.

[161] Like kids in that.

[162] Okay.

[163] I don't think you're side hustles your way out of 200 grand making 50.

[164] We got to get your core income up to 100 and then you do side hustles on top of that.

[165] That's so true.

[166] Yeah, that's exactly it.

[167] Do you have kids?

[168] Yeah, three kids.

[169] They're with me 50, 50, one week on, one week off.

[170] So it's hoping that that's part of why I like this job on that is because the schedule of it, you know, let's me spend time with them when they're with me. Listen, here's what I'm going to say to you.

[171] If you put the math you gave us in a calculator, paying these things off until 21, 24, which is not a real thing, you know.

[172] And so you've got to, I'm just going to tell you what Sam and I did.

[173] Sam's my husband.

[174] We said to ourselves, because we were in the same situation you were when we started out.

[175] Our core income was 30 ,000 combined.

[176] That's laughable.

[177] And so you do, to George's point, you have to set out on this journey and go and sit down and plot out and say, what does it look like for me to double and then triple and then maybe even quadruple, my core income, what does that look like?

[178] Where do I want to be 10 years from now and kind of change the conversation to where do I want to be 10 years from now?

[179] Because the fact of the matter is, if I don't see that plan through, this debt doesn't get paid off, right?

[180] And so then in the meantime, while you're carrying out that plan, you're still side hustling and you're using all of your time to start paying off this debt as much as you can.

[181] And you're not going to see the traction that you're hoping to see right in that first year, but you still keep after it.

[182] And you have to play both sides of this plan out in order to ultimately see where you want to go.

[183] Because we can sit here and say, hey, yeah, pick up some Uber eats or go to, but that's not going to do what raising your core income does.

[184] So that's your homework going away from this.

[185] Is okay, what does that look like for me?

[186] I'm putting down ideas on paper.

[187] Before you get off the phone, we want to make sure you get connected with Ken Coleman's information on career assessments and building a resume and just load him up with Ken Coleman, because that's where this conversation has to go in order for you to be bringing in the money that you need to be to pay off this debt.

[188] And I don't say that to be hopeless.

[189] That's just real talk.

[190] Like the budget tells your money what to do, but you have to feed the budget money.

[191] So getting on a budget is so, so key.

[192] But you're going to see that budget and go, oh, man, I've got a long ways to go.

[193] But the good news is you can take that journey.

[194] And even if it takes four or five years, you are going to see the other side of this and you're going to come out better for it.

[195] I can tell you that.

[196] So here's what the math looks like on this, Charlie.

[197] If you said, hey, I'm going to pay this thing off in four years.

[198] So that's about 45K a year we have to throw at this.

[199] Well, that's 3750 a month.

[200] We have to throw at this.

[201] Now the question becomes, how do we create that margin by spending less and making more?

[202] And that's a scary math problem.

[203] But now it's actually doable.

[204] It's actual facts in front of us.

[205] Real numbers.

[206] That's good, George.

[207] And so I just want to, I'm not here to beat you up or yell at you, but right now we can't just do what suits us.

[208] Right now it's not the time to chase down our passions.

[209] We got to go bust our butt for the next four years to get out of this mess.

[210] Otherwise, you're going to look up.

[211] That loan's going to be $200 ,000 by next year, $220 by the next year, $250 by the year after that.

[212] And then you're going to really be hopeless because you can't bankrupt on student loans.

[213] That's right.

[214] No, doubling your income changes his entire equation, George.

[215] George giving you those numbers, you suddenly see it in bite -sized chunks, right?

[216] What does it have to take to get $3 ,750 extra dollars a month?

[217] That might mean, okay, I got a rent for a while.

[218] I'm going to get a roommate if I have to.

[219] Whatever you got to do, four years, I mean, you're a young guy.

[220] How old are you?

[221] 36.

[222] You're 36.

[223] So imagine this.

[224] By the time you're 40, you're done with this debt.

[225] You're moved on to the new chapter of Charlie's life.

[226] You're building the fully funded emergency fund.

[227] You're investing for the future from 40 to 62.

[228] This is a plan to still retire with some dignity.

[229] Sure enough.

[230] versus carrying these debts to the grave and leaving your family broke.

[231] I know, that's right.

[232] And if I'm you, I'm writing that number, $3 ,700 and $50.

[233] I'm writing it on my mirror with a Sharpie so that I can see it every morning when I wake up.

[234] I'm putting it on the fridge.

[235] I'm telling the kids.

[236] I'm dreaming about that number every single night because that's what my goal is.

[237] And that's what's going to drive all of this.

[238] And next to that number, it needs to be very clear in black and white.

[239] Why?

[240] Why do I need this?

[241] You've got three kids, you're newly divorced, you've got a whole new life in front of you.

[242] There's got to be a really clear, I'm not just paying off this debt, just to pay off this debt, just to check a box off the list.

[243] You've got to have a really clear connection as to why this is necessary, and that's what's going to drive your desire to get it done.

[244] And we're going to hook you up with every dollar as well.

[245] That's our budgeting tool.

[246] We'll give you the premium version.

[247] What this is going to do is help you actually see in the budget if you have that $3 ,750 bucks in margin every month.

[248] And if you don't, the budget will show you where the gaps are, where the money leaks are.

[249] And so you've got to follow that to a T and let that be your guide for the next four years, for the next 40 years as you begin to build wealth.

[250] So I'm sorry what you went through, Charlie, man. When you get knocked down like that, it's tough.

[251] It can be so hard to get up, especially when you've got a mountain to climb on the other side with student loans.

[252] It's so true.

[253] And the fact is we tell people all the time, the average person gets out of debt in two years or less.

[254] But everybody's not average, right?

[255] In the center of, average is in the center and there's people on the right and to the left of that.

[256] And that's okay if you fall to the right of that equation.

[257] My husband and I fell to the right of that equation.

[258] It took a seven years, George Camel.

[259] I would not trade that seven years for anything because when you walk through the fire, you come out a much better version of yourself.

[260] And that's what's going to happen to Charlie.

[261] This is the Ramsey show.

[262] Hey, what's up?

[263] Dr. John Deloney here.

[264] The temperature of your environment plays a critical role in deep and restorative sleep.

[265] But if your house is like my house, I like things freezing when I sleep.

[266] And my wife would prefer to sleep on the surface of the sun.

[267] I've held out hope that somebody would crack the code on a solid mattress cooling technology for years.

[268] And now the masterminds at eight sleep have done it.

[269] They've created a fitted sheet with cooling and heating technology embedded.

[270] It's called the eight sleep pod.

[271] I'm so out of my mind excited to tell you guys about this.

[272] The pod cover can be easily added to your existing mattress like a fitted sheet for individualized temperature adjustments down to 55 degrees and up to 110 degrees based on your environment and your body temperature throughout the night.

[273] In either side of the bed can have a different temperature.

[274] This is the ultimate sleep experience and it's proven to give you up to 34 % more deep sleep every night.

[275] I can tell you from personal use, my sleep has transformed.

[276] Go to 8th sleep .com slash Ramsey to learn more and save up to $400 on an 8 sleep bundle.

[277] That's E -I -G -H -T -Sleep .com slash Ramsey for up to $400 in savings on an eight -sleep bundle.

[278] You're listening to The Ramsey Show.

[279] I am Jade Warshaw.

[280] This is George Camel, and we are your hosts for today.

[281] You can give us a call.

[282] The number is triple -8 -8 -25 -5 -2 -2 -25, and we are happy to discuss whatever it is that's on your mind as it relates to your life, your money, your career, maybe even your mental health.

[283] We can try to dive into that a little bit, although Dr. John Deloney is not here so maybe save those ones for you know it doesn't help people's mental health what's that taxes oh i know that's right it's upon us jay it is tax season they get a whole season that's like there was birthday month but taxes like no tax season yeah i'm not for it matter of fact when i think about taxes there's a very memorable social media video that pops into my mind you may have seen it uh james can we play it where's all your money gone daddy tax six nine 10, 11.

[284] Let me fix my houses.

[285] It's okay.

[286] It's part of the game.

[287] No, it's not.

[288] It's not fun to what?

[289] It's the worst part of the game.

[290] Oh, it's what?

[291] Taxes.

[292] That's amazing.

[293] So for context, it's like, I don't know, a nine -year -old playing monopoly, and he's in tears because he's paying taxes, giving away all of his money.

[294] Listen, I feel that.

[295] This is adulthood, buddy.

[296] It feels even worse when it's not monopoly money.

[297] Well, Dave has always said, if the taxman showed up at your door and you had to hand over $100 bills every time you got a paycheck, there would be a revolt in this country.

[298] That tax man would be getting whooped every time.

[299] Boston Tea Party all over again.

[300] I'd be dumping some Earl Grey in that harbor.

[301] Well, let's try to help people not feel like the young man in that video.

[302] Let's let them know kind of what to prepare for in 2024.

[303] And we're going to help you know what you need.

[304] need to know about taxes coming up.

[305] Number one, when do you even need to file your taxes?

[306] Guys, the deadline is April 15th this year.

[307] The actual tax date.

[308] Most of us think of April 15th as being the tax day.

[309] He got switched up, I think, last year, but we're back on track.

[310] We're back on track.

[311] So you need to be sure that you're filing everything, all your federal tax returns and payments by that date.

[312] And just know that you can start filing.

[313] Like, you don't have to wait until the last minute.

[314] Go ahead and start now.

[315] Matter of fact, you can start.

[316] You eager beavers out there.

[317] That's right.

[318] Listen, that's me. I try to get it done ASAP.

[319] I'm already sending the stuff over.

[320] So start filing at the end of January so that you're not putting it off.

[321] And get your paperwork ready.

[322] I know that we have a great checklist that you can use.

[323] Ramsey Solutions .com slash taxes, a completely free checklist of all the documents you need.

[324] I print this out every year, Jade.

[325] It's good.

[326] I actually did it this weekend.

[327] My wife's like, what are you doing?

[328] I'm like, I'm getting all of our documents ready for taxes.

[329] Because, you know, all the stuff just started coming in.

[330] It's the end of January.

[331] Yeah.

[332] So you've got all the W -2s.

[333] mortgage income statements, HSA contributions and distributions and charitable giving.

[334] It's all hidden.

[335] And so I like what I do.

[336] I get it all digital, even if I take a picture of it, scan it in, crop it, put it in one folder.

[337] Wow, George.

[338] On my computer.

[339] So I'm ready to go.

[340] That's good.

[341] I'm just pulling it from everywhere and I have a bunch of papers and they're probably like dog -eared corners and crumpled up.

[342] I can't live like that.

[343] It's too stressful for me. Okay, this is good to note though.

[344] If you request an extension, the deadline.

[345] is October 15th.

[346] That's right.

[347] But don't request an extension.

[348] Just go on and do it.

[349] All right.

[350] Income tax brackets, guys, did go up in 2023 for the 24 tax season.

[351] They also went up a few hundred dollars to account for inflation.

[352] So if it goes up, it's to account for inflation.

[353] The more the taxpayer earns, the more their earnings are subject to higher rates, but don't get it twisted.

[354] It's not to say that your whole income is taxed at that higher rate.

[355] It's just the portion of your income that.

[356] that puts you to the next tax bracket that gets taxed at that higher rate.

[357] Thank you for saying that.

[358] I just explained this on a YouTube video.

[359] We also have an explainer on that website, ramsysolutions .com slash taxes.

[360] Yes.

[361] Your marginal tax rate versus your effective tax rate, not to get too nerdy, but they're different.

[362] That is right.

[363] Even if you're in the 22 % tax bracket, well, you actually ended up paying in taxes is probably closer to 15%.

[364] That's right.

[365] Your whole income is not taxed at that.

[366] That's good to know.

[367] It's stair stepped.

[368] So standard deduction increased this year.

[369] So it's 13 ,850 if you're single filer, 27 ,700.

[370] for married couples filing jointly.

[371] Right.

[372] That's good.

[373] The other option would be to itemize, but ain't nobody got time for that.

[374] I feel like most people now, it makes more sense to do the standard deduction.

[375] I think so.

[376] As they've kept upping it, you just end up better off if you're a normal everyday person.

[377] I feel that.

[378] All right, the IRS did bump up our 401k and IRA contribution.

[379] More investing, baby.

[380] I love that.

[381] The limit did increase and for Roth IRA contributions as well.

[382] I think it went up from $6 ,500 to $7 ,000, just on the, that base limit.

[383] And they increased the income limits because before, if you made over a certain amount, that's right.

[384] You know, you were capped.

[385] You couldn't invest.

[386] So they increased that as well, which is all good.

[387] We like that part.

[388] Love that.

[389] All right.

[390] 1099K update, George.

[391] Ooh, this is a juicy one.

[392] So people were freaking out about this one, Jay, because they're like, are they going to start tracking my Venmos and make me pay taxes?

[393] And here's the deal.

[394] If you sell goods or services online, you may have heard about these 1099K extra taxes in 2024, but those policies have been officially delayed.

[395] So you're off the hook this year.

[396] year.

[397] All right.

[398] So how can people save money this tax season?

[399] Number one, look for tax deductions.

[400] Remember, tax deductions are things that help lower your amount of taxable income, right?

[401] These are things like medical, charitable business, things like that.

[402] But tax credits are actual dollar amounts that are subtracted from your actual tax bill, which is nice.

[403] They're deductible.

[404] Things like child tax credit, dependent care credit, education credit, earned income tax credit.

[405] I just like the word credit when it means something's going back into my account.

[406] That's the only time I like it.

[407] The way I remember is deductions are on the front end and credits are sort of on the back end.

[408] Yeah, I like that.

[409] So, you know, if you make $200 grand, well, the deductions could help lower that to where the government says, no, you really made $180.

[410] Yeah.

[411] And the credits are, hey, you owe $10 ,000 on your tax bill, but with these credits, you owe $2 ,000.

[412] That's right.

[413] So it's kind of like your final bill goes down with those credits.

[414] It's like a coupon.

[415] Yeah.

[416] I love a coupon.

[417] Tax coupons.

[418] This is really important.

[419] A lot of people who...

[420] are like, I wanted to fund my Roth IRA for the year or that health savings account, you can actually do that up through April 50.

[421] Yes.

[422] So if you missed it in 2023, you're like, dang it, it's not too late.

[423] But you got to do it by April 15.

[424] Yeah.

[425] And to note, if you're investing in a Roth for the first time, fund the 2023 one first.

[426] Don't just go, oh, it's 2024.

[427] I'm going to fund that one because you can't go back in time.

[428] So fund the 2023 one first because it will still show up there as able to do contributions.

[429] And then as you get to it, because hopefully you can do more than one.

[430] Fund the 2024 one, and you'll get double for your trouble this year.

[431] There we go.

[432] And lastly, if you're getting a big refund every year, stop celebrating.

[433] Okay, you're giving the government an interest -free loan all year when that money could have been in your paycheck, being added to your every dollar budget to help you accomplish your goals.

[434] And most people, Jay, they see this refund as like, fund money to go blow on the vacation.

[435] No, don't do that.

[436] Change your withholdings with your HR department or whatever you need to do to try to get it as close to a zero as possible.

[437] Yes.

[438] That's the game.

[439] That is the game.

[440] Well, if you find this helpful or if you want more information, please go to ramsysolutions .com slash taxes.

[441] Or if you want to read a little bit more, we've got a tax guide, we've got blog articles, all sorts of things at tax prep list that George and I were so delicately and eloquently talking about.

[442] So delicate.

[443] But yeah, we've got everything there.

[444] Taxes should not feel like a headache.

[445] And if they have in the past, I promise you if you use these resources we have, it's going to feel a lot better.

[446] Are you doing tax pro this year?

[447] What are you insane?

[448] My mother -in -law is our tax pro.

[449] That is the best.

[450] Yeah, well, or she all up in your business, literally.

[451] She's all up in your business.

[452] Listen, she's all up in the Kool -Aid.

[453] She knows the flavor, and it's...

[454] She knows what's in the mix.

[455] She knows what's in the mix.

[456] It is what it is, and I'm happy to have her.

[457] That's nice.

[458] Love you mean.

[459] I just scheduled my tax appointment.

[460] I'm excited.

[461] I'm looking forward to it.

[462] You know what I do?

[463] This is a real talk.

[464] My wife and I always schedule a fun date post -tax tax.

[465] I like that.

[466] You go to a nice lunch after.

[467] Okay.

[468] And so that's something that we look forward to.

[469] So that's a little, I'm sure that's in atomic habits, right?

[470] If like you got to dangle a little carrot after you eat your vegetable.

[471] Yeah.

[472] Maybe it's not a carrot.

[473] It's like a donut.

[474] Yeah.

[475] That's, that's true.

[476] To get excited about taxes.

[477] You know, the thing is like, I feel like it's one of those things that we've just kind of, it's like a self -fulfilling prophecy.

[478] We've told ourselves, I hate tax season.

[479] Tax season's the worst.

[480] And then, therefore, we make it the worst.

[481] Like, we don't prepare.

[482] We don't do the things to make it easier.

[483] let's let this year be different and set the course for a more enjoyable tax season.

[484] Let's go get the checklist.

[485] Yeah.

[486] Go use Ramsey Smart Tax if you want to do it on your own.

[487] Yeah.

[488] Like set it set yourself up for success.

[489] It doesn't have to be, it's like the dentist, right?

[490] Get the shot of Novakane so that it doesn't hurt.

[491] Get some laughing gas if you have to.

[492] There you go.

[493] But get those teeth cleaned, all right?

[494] We don't want those chomper's a little mouth chicklets all nasty.

[495] Mouth chicklets.

[496] Keep it tight.

[497] That's what you're here.

[498] here for George.

[499] Terms like mouth chicklets.

[500] That's what people listen to the Ramsey Show for.

[501] They're listening to the Ramsey Show to go to Ramsey Solutions .com slash taxes so they can get their taxes done right.

[502] This is the Ramsey Show.

[503] You're listening to the Ramsey Show.

[504] I'm Jade Warshaw, your host, joined by George Camel, your other host.

[505] Give us a call.

[506] The numbers, triple 8, 825, 5225, and we will take your calls.

[507] And not only will we take your calls during this hour and the two to follow.

[508] But after the show today, George and I are having a really, it's a new, it's a new thing that we're doing, George.

[509] We are doing a live Q &A, answering your questions about budgeting.

[510] And we will have the every dollar app, the best budgeting app in the world pulled up so that we can use the app to guide you through your questions so you can kind of get an idea of how the app works for your situation.

[511] It's not a demo.

[512] We're just answering your questions and showing you how to do it in the app.

[513] applicable.

[514] And so this is an exclusive live stream happening on the Ramsey show YouTube channel.

[515] So make sure you head to the YouTube channel now as soon as you hear this and hit the notify me button so that you don't miss it.

[516] 5 p .m. Central time today, Tuesday, January 30th.

[517] You can use the chat to ask questions and you can also call into the show as you normally can.

[518] So this is going to be cool.

[519] We've never done an after hours exclusive Ramsey show essentially.

[520] After hours for one hour.

[521] I love it.

[522] So we'll...

[523] It's a lot of hours on the show today, Jay.

[524] It is.

[525] I like it.

[526] I like listen, we're here for the people.

[527] We want to help you guys out.

[528] It means it's very important for us to bring some monster energy drinks for us.

[529] I can't do that.

[530] You'll see another side of me. But let's go to Austin in Greensboro, North Carolina.

[531] What's going on, Austin?

[532] Hey, how's it going?

[533] Thank you for taking my call.

[534] You bet.

[535] Hey, so my question was, you know, we just, we're new to the Financial Peace University.

[536] We just started it where I think we just finished video number three or four.

[537] great and uh well we're wanting to get the thousand dollars saved up and so on and so forth and get our get our get debt free but the biggest problem is is that the truck payment you know it's it's my dream truck and i love it but i'm willing to sell it i'd rather get rid of it and us become debt free but the problem is that i owe about why under 40 ,000 is 39 800 something okay and uh just because of the market the way the market's been going is that the truck at the value of the truck has dropped down to around 33 and so I'm wanting to sell it and it's $880 payment and yeah yeah it hurt how much do you make a year uh last year we made 65 ,000 I think myself okay um but I started the new year off on a raise and that's actually I got the class with I was talking to my boss about you like what's going on and then he's taking the class, but he bought it for me, which is awesome of them.

[538] But the biggest problem is trying to get rid of his truck.

[539] It is drowning me. Like, I obviously have to have a vehicle to get back and forth to work in.

[540] Well, how's your credit?

[541] How's your credit?

[542] It's not very good.

[543] If you were to go to a credit union around town to see if you could maybe get the $7 ,000 to bridge that gap, do you think you could do that?

[544] Possibly, but then I feel like the, because he was the thing about that.

[545] Well, then the problem would be, if we do that, then we'll have to find a down payment for something else.

[546] Because whatever we get has to be, we have three children.

[547] Me and my wife do, so I can't just go get an old moped.

[548] What's your other car?

[549] Yeah, what's your other car?

[550] My wife's car is a Ford Explorer.

[551] My car is a Chevrolet Silverado.

[552] Does she work outside the home?

[553] She doesn't know, but she uses the car to take the children to school.

[554] So what if she dropped your?

[555] you at work, took the kids to school, picked you up, listen.

[556] Carpool with a friend.

[557] There's so many options.

[558] My husband and I were a one car family for 10 years.

[559] And my sister, who they both worked on opposite ends of town with two boys, were a one car family for five years.

[560] It's a pain in the butt, and it's inconvenient.

[561] And you have to do a lot of planning and scheduling.

[562] But you want to know what you don't have, an $880 car payment?

[563] Exactly.

[564] Yeah.

[565] So, So there's only two ways to get out of this.

[566] Either you come up with the difference, that's $7 ,000 plus what you need to get another beater car, or you get that personal loan from the credit union to cover the difference plus what you need for the other car.

[567] Yeah.

[568] But there's no life hacks here.

[569] This is one of the riskiest parts about going into debt for vehicles.

[570] And let me tell you, Austin, you're not the first one to call the show this week being underwater on a car.

[571] It's happening all over America because people got starry -eyed when they got that dream truck and now it's a nightmare.

[572] To preach And dude, you make 60 grand You drive a $40 ,000 truck I don't drive a $40 ,000 car And I'm a millionaire Yeah Like what were you thinking At the time of purchase here At the time The car I was driving back and forth working It blew up on me So we had to go to the dealership and get something Watch what your words there You had to go to the dealership We chose to go because we had to get a vehicle.

[573] Thank you.

[574] That's all I asked for is a little honesty.

[575] I'm playing with you, but you see how all of these decisions happened because, well, we had to and the car blew up and it's all stressful and we had to go $40 ,000 into debt.

[576] That's the American way right there.

[577] And the reason that people don't have, let me take it one back further, George.

[578] The reason that people's cars blow up and they think, oh, instead of paying the bill to get it fixed for $700, I don't have $700, so I'll just go get a brand new car, is they've had payments forever.

[579] And they had so many payments that they didn't have any money saved.

[580] And because they didn't have any money saved, they had to go back into payments.

[581] It's a wheel and you've got to break that cycle and get out of the wheel.

[582] Because if you get rid of this $880 payment and either you carpool or you find a way to get a couple thousand dollars and get a beater, you are effectively breaking that cycle.

[583] And instead of $880 going to CarMax or Ford financing, it's going to pay off your debt, but then it's going to go to build you a nice, cushy emergency and the next time your car blows up because it will.

[584] Everybody has car issues.

[585] You're going to just go down to Christian Brothers or wherever you get your car fixed and you're just going to hand them the cash for $770 or for $1 ,250 when something happens.

[586] And you're not going to say, well, my only choice here is to get a brand new car on payments.

[587] You're going to be prepared for it.

[588] So let's break that cycle.

[589] Absolutely, yeah.

[590] We've got to get the income up.

[591] And if that means the wife is going out to work when you get home from work so you can watch the kids or you're getting that second job, we need to come up with this money fast.

[592] And that means selling stuff.

[593] Do you have any other debt?

[594] Yes, we do.

[595] Including the truck, total is like $55 ,000.

[596] So you got another $15 ,000 and what?

[597] Some of this credit cards, some of this medical bills, things like that.

[598] Okay.

[599] So let's snowball these, smalls to largest.

[600] Once we get rid of this car loan, the rest are going to go smallest to largest balance, ignore the interest rates, get that income up as high as possible.

[601] No eating out, no luxuries.

[602] It's time to batten down the hatches and get rid of this debt.

[603] And you can do this.

[604] This can all be done probably in the next for you.

[605] I'm thinking six months.

[606] You've got a very different financial situation.

[607] I think there's two options you and your wife have to choose before between.

[608] It's either two options or both.

[609] It can either be listen, we're carpooling and it's going to be a pain in the butt.

[610] Or it's she's got to pick up extra work so that you guys can pay this thing off super duper fast or at least save up.

[611] make the payment while saving up to bridge the gap between the seventh out like you've got some options but one of them is going to either of them is going to require deep sacrifice and there's no getting around that part of it there's no easy button really to hit in this equation so I think that that's that's the hard part that they're going to have to choose between George well it just makes me think jade you know debt always requires sacrifice but it's a much more painful sacrifice than the other kind which is we're going to sacrifice and save up and pay cash for this car with delay gratification.

[612] We're going to only buy the car that we can afford, which is going to limit what kind of car we purchase.

[613] That's a different kind of sacrifice.

[614] But it's much more painful on the other side when you're trying to clean up a mess and interest is hurting your ability to knock this debt down.

[615] And you've got three kids and we have the mortgage and we got the student loans and it all just starts to weigh on you.

[616] The pain of staying the same has to become greater than the pain of changing.

[617] And that's really what it's getting to you.

[618] You've got to feel so stressed and sick and tired and frustrated in your day -to -day life that suddenly that becomes so painful that the pain of change is like, listen, I'll take that.

[619] I remember getting to the point of being like, I want a new set of problems.

[620] Like, I know what it feels like to not be able to pay bills on time and to be arguing with my spouse and to just be in the state of constant financial disarray, that I was ready to take on new problems of, okay, How do we schedule our life?

[621] How do we balance only having one car?

[622] How do we figure out conversations around the budget?

[623] How do we figure out, you know, trade your old set of problems in for a new set of learnings and that are, you know, a better set of problems, which is really just you being uncomfortable while you're getting out of debt.

[624] And that car, Jade, it's like you put 40 grand on the loan.

[625] You ended up paying 50 after interest.

[626] Now it's worth 20 after you don't pay for it.

[627] That hurts my brain.

[628] Yeah.

[629] It's painful.

[630] Listen, that car note, that's what's keeping the middle class, middle class.

[631] Those who get rid of their car note, get something called money and are able to build something called wealth.

[632] This is The Ramsey Show.

[633] 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 actual amazing relationships.

[634] I am your host today, Jade Warshaw, joined by your other host today, George Camel, and we are taking your calls, something that is so fun and enjoyable.

[635] to do.

[636] We're happy that you trust us with that.

[637] If you want to call in, you can call in at AAA 825 -5 -2 -2 -25, and we will do our best to help guide you to the next right step.

[638] That's all we can do, Jade.

[639] That's all we can do.

[640] Try our best and next step.

[641] We can't solve the world's problems, but we can at least help you in three minutes that we have together.

[642] I know that's right.

[643] So let's go to the phone lines where we have Dustin in Albuquerque, New Mexico.

[644] What's going on, Dustin?

[645] Hi, how's it going?

[646] good um well i uh this past year um 2023 was my first full year of owning a house and i had always heard uh people who own houses don't really get a tax return back so i went to do my taxes and um sure enough he said i was going to get like a hundred dollars back and their fee is like just over 300 so he he recommended i take um some money out of my 401K from 23 and put it in an IRA and he said if I put like $4 ,000 I would probably get like at least a $7 or $800 return on my taxes rather than $100 return.

[647] This guy's fired.

[648] Instantly.

[649] Keep talking.

[650] So what I understand is you're going to get $100 refund right now.

[651] Yeah, like $100.

[652] And their fee to work with the tax pros was 300 bucks and you don't have the 200 bucks to cover it?

[653] Is that the problem?

[654] Well, I was going to put it on my credit card and he said, well, if you want, you could do this and it would cover our fee and you would get, you know, some money back.

[655] He suggested a 401K loan.

[656] Is he saying to withdraw the money from the 401K?

[657] Is he saying do it transfer from an old 401K, do a direct rollover?

[658] What exactly was he saying to do?

[659] If I understood right, he wanted me to roll over, like $4 ,000 from my 401k.

[660] Is an old employer?

[661] From my earnings from 2023.

[662] No, I'm still working with this employer.

[663] Well, you...

[664] Okay.

[665] You're not going to be able to do a rollover unless you leave that employer.

[666] Oh, okay.

[667] So what he's saying to do, it sounds like he's saying to withdraw money from the 401K.

[668] He wants him to withdraw it to pay.

[669] Yeah, to withdraw.

[670] Which will cause you to pay like 35 % penalties and taxes.

[671] in order to do that.

[672] Oh, okay.

[673] I didn't know that.

[674] Listen.

[675] If, yeah, I don't trust this tax guy.

[676] First of all, he's missing a few brain cells.

[677] Here's the thing.

[678] Telling you to do this so that you can cover the $200, $300 fee you owe him?

[679] George, we can't, we're expending way too many mental calories trying to understand that this tax guy is whack.

[680] Here's the thing.

[681] Here's at the core of this.

[682] You're getting $100 back.

[683] That's great.

[684] That means you didn't overpay taxes.

[685] and, comma, you have to pay them for their services.

[686] So I think right now you've just got to break your mind for a moment because what's happening is normal.

[687] Like, I don't pay that much in taxes and I have to pay my tax guy.

[688] Like that right there is actually normal.

[689] What's what, or what should happen is what I should say.

[690] What's normal is people get back $8 ,000 and they don't even feel that they paid their tax professional because they're getting back these exorbitant amounts.

[691] they're thinking that they won the lottery and that their tax guy did something wonderful for them when really all they did was just loan the government money all year long and didn't even collect any interest on it.

[692] And so I kind of want to reframe your brain there and just go, listen, it's great.

[693] You didn't get a tax refund back.

[694] That just means you didn't overpay the government.

[695] You had access to all of your money all year long, which is a good thing.

[696] And now you got to pay these guys for their services.

[697] No harm, no foul.

[698] Like that's that's the way it should be.

[699] So when do you have to make this payment?

[700] Well, we're doing my taxes this past weekend, and he just put it on hold, you know, until I looked into, he told me to look into the IRA and to see if I could take money out of my 401K.

[701] But then I heard about you guys, you know, I've never really listened to the show, but I heard about you guys, so I thought I'd call it now.

[702] I'm so glad you did, Dustin, truly.

[703] So here's the deal.

[704] I'm going to go, how much can I work?

[705] what can I sell in order to make $300 to pay this guy's tax fee?

[706] But then I'm done with him.

[707] And we're not taking out 401K loans to pay our tax guy for our income tax return.

[708] Okay.

[709] And I don't know if I can ask to.

[710] I've always wondered about like a Roth IRA.

[711] Would have like should I just stick with my 401Ks or should I consider moving to like a Do you have any debt?

[712] Just the house.

[713] okay no no credit card debt no car payment well I have a little bit of credit card did like $600 but that's debt like I travel I travel for work so I use my credit card like to eat I travel for work I use my debit card yeah and that way I can't go into debt and if they're causing you to go into debt they need to provide you a company card for that but do not put company expenses on a credit card because if something happens, you're on the hook.

[714] If they fire you or whatever and they're like, you know, we don't even know what you're talking about.

[715] That's not an expense anymore.

[716] You're on the hook for that bill, dude.

[717] Well, to be honest, I do the credit card because I can't really afford to put anything on my debit card.

[718] Like, I literally.

[719] Then they need to provide you some petty cash or some funds in order to do those things.

[720] But you should not be going into debt on a monthly basis.

[721] to fund purchases for your job, like hard line.

[722] But even if, like, they pay me back the very next week?

[723] Because you're in debt.

[724] You're in debt.

[725] Your name is on the line until they decide to pay you back.

[726] Because what happens if you do something and you're like, listen, I thought that was an expense.

[727] And you're paying 25 % interest on this balance in the meantime.

[728] Yeah.

[729] So, Dustin, the real question is, why don't you have any margin even though you don't have much debt?

[730] Right.

[731] If $300 is an issue.

[732] Yeah.

[733] I'm confused.

[734] Like, how much do you make?

[735] Well, after my taxes and my insurance, I get like $1 ,500 every two weeks.

[736] Okay, so $3 ,000 a month.

[737] Are you doing any investing right now into that 401K?

[738] Well, yeah, whatever, I mean, I don't know exactly how much it is, but it's just whatever my job put forward.

[739] Well, it's about to be 0 % because right now you need $1 ,000 in a starter emergency fund because you're going to keep going back into credit card debt if we don't.

[740] solve this.

[741] So pause investing down to zero right now.

[742] Go get some side jobs, start selling stuff, pay the $300 to your tax guy, save up $1 ,000 in the emergency fund, and then let's get rid of this credit card debt, and then we can get back to investing.

[743] Hey, how much is your mortgage?

[744] So my mortgage actually went up this year because they underestimated my taxes for last year.

[745] So it went up to just under $2 ,000.

[746] That's the problem.

[747] It's gracious.

[748] There's your problem, bud.

[749] Your problem...

[750] Two -thirds of your money is going to this home.

[751] Yeah.

[752] The rule of thumb here is we don't want your mortgage to be any more than 25 % of your take -home pay after taxes.

[753] And you are well above that.

[754] And that's why you're feeling the heat.

[755] That's why you don't have any money saved.

[756] That's why it's hard to pay this $300 tax bill.

[757] And your brain even considered the idea of getting a 401k loan for it.

[758] We've got to get this ship righted.

[759] Stay tuned.

[760] following us and we'll teach you how to do that.

[761] This is the Ramsey show.

[762] This show is sponsored by BetterHelp.

[763] Hey good folks, the back to school madness is upon us.

[764] It's hitting us right now.

[765] We got travel and work and all these forms to fill out now and sports to travel to and on and on.

[766] My family's schedule is so packed and we haven't even begun talking about things like exercise and date nights and counseling and church and home projects.

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

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

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

[770] And that means that I have to do the things that keep me well and whole.

[771] And I know that you have to do those same things too.

[772] So don't skip the things that matter to you, including regular exercise, hanging out with your friends and regular therapy appointments.

[773] And when it comes to therapy, contact my friends at BetterHelp.

[774] Better Help is 100 % online therapy staffed with licensed therapists.

[775] It's convenient, it's flexible, and it's suited to fit your schedule.

[776] And therapy can help you learn positive coping skills, how to set and practice boundaries, how to become the best version of yourself, and most importantly, how to find peace in all of this chaos.

[777] In this upcoming season, make sure you put on your oxygen mask first.

[778] Never skip therapy day.

[779] Call my friends at BetterHelp.

[780] Visit BetterHelp .com slash Doloney today for 10 % off your first month.

[781] That's BetterHelp.

[782] H -E -L -P dot com slash Deloni.

[783] Thanks for listening to The Ramsey Show.

[784] I'm Jade Warshaw.

[785] This is George Camel.

[786] We're with you for the next couple hours talking about your life and your money.

[787] And I have to say, George, you know, one of the things I love most about being here at Ramsey Solutions is our live events.

[788] They're off the chains.

[789] They're off the hook, man. I love when we all get together.

[790] It's like a rally.

[791] And we have a really great one coming up.

[792] year, May 10th and 11th.

[793] It's our total money makeover weekend, which is a two -day event.

[794] Listen, it's all the personalities there.

[795] Myself, George, Ken, John Deloney, Rachel Cruz, of course, the goat himself, Dave Ramsey.

[796] And we're coming at you with all new material.

[797] Like, that's the part that I'm really excited about is it's just a completely new, fresh situation, if you will.

[798] And no matter where you are on the baby steps, if you're new to the plan, you've been hanging out with us for 20 years.

[799] This is going to be a pep rally and crash course when everything we teach about money.

[800] And again, it's all new content.

[801] And we're also going to make it interactive with live Q &As.

[802] We've got a live Smart Money Happy Hour recording with Rachel Cruz and I. That'll be a blast.

[803] And our events are actually fun.

[804] So you don't have to like drag people to these events.

[805] When they get there, they're like, oh, yeah, it goes hard in the paint.

[806] Yeah, we'll make sure it's a good mix of information and entertainment and lightheartedness.

[807] This is not a seminar.

[808] That's right.

[809] Oh, yeah.

[810] Never that.

[811] Never that.

[812] But early bird ticket starts at $99, but that's only going to be for a limited time.

[813] So if you want to get the tickets at the $99 price, you need to get online today at ramsysolutions .com slash events, because let me tell you something, these tickets, they go, they go on.

[814] Like, they go fast.

[815] It's here at the Ramsey Event Center, just up the hill from the Ramsey Studio.

[816] And so it's a, Nashville is a great destination, make plans, get it in the budget to be here, bring a spouse.

[817] That's a great, I mean, I feel like people leaving their marriages are better.

[818] Listen, that's so true, George.

[819] And you made the point, no matter what baby step you're on, this truly is an event for you.

[820] If you're new to the baby steps or you've been in the baby steps, this is the perfect event for you.

[821] And, you know, George, it's funny because, you know, we've been, we all teach from a series of seven baby steps.

[822] And that's kind of just the crux of everything we do and everything we talk about.

[823] And I kind of want to take a moment and talk about that because so many people are new to listening and they're like, I think I get it.

[824] And they call in the show and they've got some questions.

[825] And, you know, there's, There's just some basic teaching that I feel like we can always learn no matter where we are in the steps.

[826] And so like we had a call last.

[827] Yeah, from Dustin.

[828] From Dustin.

[829] And it's like he was new.

[830] And the more we talked to him, the more we started uncovering more and more things about his situation that's like, okay, we got to get him lined up on the baby steps.

[831] Matter of fact, Dustin, this event might be for you if you can afford to get there, get that $99 ticket rate.

[832] But George, let's take a moment and just for the person who's listening to the Ramsey show for the very first time.

[833] let's kind of unpack some of those basic foundational things around the baby steps because obviously the very first baby step is baby step one get a thousand dollars saved but you kind of have to understand some of the nuance around why that is and what else goes along with that so that it makes sense in your mind and you're not just doing what a radio personality or a podcast or a YouTuber told you to do right yeah this is big and so there's really kind of a prerequisite of baby step zero which is getting current on all of your bills and actually paying attention to your money for the very first time and a lot of people jade i mean they don't know how much debt they're in no they don't really know what's happening and so you might need to pull your credit report just to see what the heck is going on your financial world and get some hard numbers and look at your actual pay stubs and see where's my money going how much is coming in yeah and then make sure you're current on all of your bills if you're behind we have to get current that's right i'd call that getting organized like the first thing that you're doing just just get organized like george said let's log in let's look at the credit report.

[834] Let's log in and see what really is our, what really do we owe, right?

[835] What's our payment?

[836] Because so many times I'm like, listen, what do you owe?

[837] And they're like, well, I'm not really sure.

[838] How can you solve the problem if you don't really know what the problem is?

[839] And one of the things I'd add to that and you can add to your list too is baby step zero, a big part of that is just saying, you know what, I've got a problem.

[840] Probably your problem is debt.

[841] I'm just going to borrowing money here for a minute.

[842] Like I'm going to stop contributing to the problem while I figure out how to solve it.

[843] Stop the bleeding.

[844] You got to stop.

[845] You can't solve a problem while simultaneously creating it.

[846] So just if you don't do anything else today, just make a decision.

[847] I'm not going to borrow money anymore because right now it's just caused me to get into this situation of disarray.

[848] So I'm going to cut it off.

[849] I'm not borrowing any money.

[850] And that's kind of your baby step zero.

[851] That's me prepping right to get ready to do this thing.

[852] So now this is like the subterranean level, George.

[853] So if I'm playing devil's advocate, I'm that person, I'm going well, Jade, I've been living off of my credit card because I don't have money.

[854] What, how am I going to do this without going further into debt?

[855] I think the next step, that brings us to our next step, which is kind of the subterranean is the budget.

[856] Because if you can create a budget, you can see where all of your money is going.

[857] And most of our disarrayment or most of our, you know, frustration around money centers from, we don't know where it's all going.

[858] We get this paycheck.

[859] We go to work every single day, we get a paycheck and somehow we still feel like we're living paycheck to paycheck.

[860] We still feel like we can't make ends meet.

[861] And it's usually because we're just spending our money haphazardly.

[862] And I always say your money is expensive.

[863] Like you, the paycheck that you get, think about everything that it costs you, right?

[864] It's costing you time away from your family, less sleep, time away from the things that you want to be doing possibly.

[865] Let's treat it with care because it's very expensive and it costs us a lot.

[866] So treating your money with care means getting on a budget.

[867] You don't just think about if you went, George, think about if you went to the mall this weekend you bought that brand new Louis Vuitton bag.

[868] You know me. $3 ,000 bag.

[869] Are you going to just go into your home and just take it and just toss it across the room and let it hit the corner of the closet and just be there next to old tennis shoes?

[870] And no, you're not.

[871] You're going to like dust it off and put it on a nice shelf.

[872] You know exactly where it belongs.

[873] It's the same thing with your money.

[874] If you get a $3 ,000 check, you better treat that thing with care.

[875] Don't just toss it around and hope that it ends up in the right place.

[876] Organize it and put some care into it, and that's what you do with a budget.

[877] And you don't have to be like a giant Excel nerd.

[878] Luckily, we created a budgeting app long ago that is amazing called Every Dollar.

[879] So all you do is go to your app store, go to Every Dollar .com, and just list your income digitally.

[880] Type in your income, type in a few of your expenses.

[881] We guide you through this.

[882] You don't have to be a financial prodigy to create a budget.

[883] That's right.

[884] You just have to be willing to pay attention.

[885] Yeah.

[886] I love every dollar because I know for me I'm like, oh, I hate doing math.

[887] It just found, it feels like math, George.

[888] That's why you wrote a book called Money's Not a Math problem.

[889] That's right.

[890] That's right.

[891] And every dollar does that math for you.

[892] It does all the equations, everything like that.

[893] It truly you can build a budget in five minutes.

[894] You know what stresses me the most when Excel, when you hit the cell the wrong way?

[895] And it's like, formula's messed up.

[896] I'm like, I just quit out of Excel.

[897] I can't handle it.

[898] I don't even know about that because I don't even log into Excel.

[899] It ruins my day.

[900] There we go.

[901] So that's a good step, though.

[902] We got to get current on the bills, stop borrowing money, get on a plan, that's called the budget, and then what?

[903] Well, let's start looking at some of the symptoms that you're experiencing, because if you're like Destin and you call in, you think the problem is, I owe the tax guy $300.

[904] But that's just a symptom of a bigger problem.

[905] So I kind of wrote this little list here, George, that are symptoms that you might need a financial plan and that you might need to get on the Ramsey plan.

[906] if you're kind of circling you know you kind of been hanging out around the cooler the water cooler but you haven't dove into our plan yet so number one if you're feeling uh confusion about your finances if somebody talks about your money and the first emotion you feel it's kind of like fear of frustration anxiety confusion that's a sign it's like when i'm in a conversation about sports i start to get a little sweat on the brow like they're going to find me out in no time that's right that's a symptom of a bigger problem if small bills 150 dollars 200 dollars If those are stressing you out, that's a symptom.

[907] Okay?

[908] If your mortgage payment or your rent payment is a strain, that's a symptom of a bigger problem because that should be a blessing, not a burden.

[909] If you're considering extreme options to deal with what should be minor problems, like this guy, he's considering a 401k loan to pay for a $300 tax bill.

[910] If you're going to rob yourself or turn to more debt to solve the problem, you're in a drastic situation.

[911] Yes.

[912] you need to pause.

[913] That's good, George.

[914] You're using debt to pay off debt.

[915] Ooh.

[916] And then finally, and we talked about this, if you're not on a budget, these are all symptoms of much, much bigger problems.

[917] And so those are kind of, that's kind of like the subterranean level before you start the baby steps.

[918] Like recognizing those symptoms and saying, hey, I need to be on a plan.

[919] Okay, I'm going to do what George said.

[920] I'm going to get organized.

[921] I'm going to find out what I owe and I'm going to stop borrowing money.

[922] And then I'm going to get on a budget.

[923] Those are the things.

[924] That final step, you've got to figure out how to spend less and make more.

[925] And that's called margin in your budget.

[926] Now we can start saving up that $1 ,000 emergency fund and getting rid of our debt.

[927] So join us if you want a crash course on money.

[928] Ramsey Solutions .com slash events, total money makeover weekend.

[929] Go check out every dollar.

[930] It's a free app.

[931] And all of that's just going to help you in in 2024.

[932] That's what we're here for.

[933] Yeah.

[934] And when you come to that realization, it's worth doing that subterranean work because then when you actually start working the baby steps, you know why you're doing it.

[935] and you understand why and how it's the solution to your problem.

[936] This is The Ramsey Show.

[937] This is The Ramsey Show, taking calls about your life, your money.

[938] I'm Jade Warshaw.

[939] This is George Campbell.

[940] Let's go directly to the phone lines where we've got Lindsay in Detroit, Michigan.

[941] What's going on, Lindsay?

[942] Hi.

[943] My husband and I just had our second baby last fall, and now this year we're going to be looking at paying about $16 ,000 in daycare.

[944] Yeah, we were already pretty much feeling like we were paycheck to paycheck, and it just kind of seems like everything's hitting at once now.

[945] I just, I don't know where to start in regards to, like, budgeting.

[946] You know, we also have other debt that we're trying to pay off, but at the same time, our savings account is dwindling every month, and I just, I'm not sure how to tackle everything.

[947] Yeah.

[948] So are you guys using a budget, or not yet?

[949] we're not we kind of just started going into you know printing off our bake statements and labeling everything and going from there um but i know if we really want to save we're going to actually have to itemize every single thing out it's going to help like being on a detail i always say a good budget is detailed realistic and flexible and so of course i'm going to recommend every dollar for you to budget with because it's easy to do all three of those things and when you're heading into a new stage of life where not only is day -to -day life changing, but like the way you're spending your money is drastically changing.

[950] That right there can give you a big sense of control and a big sense of peace over what's going on, even if you don't actually have the money to do all the things that you want to do, at least being able to see it on paper or see it, you know, digital paper, being able to see it there all laid out and have a very clear number of what you need in order to make it work financially.

[951] That can give you a lot of peace.

[952] So just hearing your situation, I think getting off of here and making sure that we connect you with every dollar is the first thing.

[953] Second thing is let's look at your income and let's see if we can determine what it is that you need here on this call.

[954] Yeah, what do you guys bring it home every month?

[955] I make about 60 ,000 and my husband makes 45 ,000.

[956] Okay.

[957] So 105 total.

[958] And then what's your take -home pay every month once it hits your bank?

[959] I would say about 3 ,000 for me in the checking and account.

[960] to put $600 into the savings every month.

[961] And then his varies a little bit, but it's probably around $2 ,000 a month.

[962] Okay.

[963] So about $5 ,000 a month, and then you're taking out some for savings and some other things.

[964] Are you guys contributing to retirement at all?

[965] We both are.

[966] His is minimal, I think about $150 a month.

[967] I am doing 12 % right now, so I'm at like $6 .50 a month.

[968] Okay.

[969] Well, we just found a way to free up $800 in your budget every month.

[970] So congratulations.

[971] And you'll get back to investing.

[972] I promise.

[973] You both will be at 15 % instead of struggling to get to 15 % from both incomes.

[974] And so what we need to do in the meantime is focus on one thing.

[975] Because you're telling me, I'm trying to put some in savings.

[976] I'm trying to pay off debt.

[977] We've got to cover the daycare.

[978] You're doing a lot at once.

[979] And it's going to feel like you're never going to make progress.

[980] So we would encourage you to walk this through the baby steps, which is one thing at a time, focus intensity.

[981] Let's get $1 ,000 in savings.

[982] Now we don't touch that unless there's a true emergency.

[983] Now we're going to focus on just debt payoff and not invest for a little while until we get to debt freedom.

[984] Then we get the fully funded emergency fund.

[985] Now we're investing again.

[986] So that's going to really help you guys out.

[987] If you pause savings, how much do you have in savings right now?

[988] Like maybe $4 ,000.

[989] Okay.

[990] And how much debt do you have?

[991] We pay about $700 a month in student loans.

[992] We have $10 ,000 on a HELAC.

[993] We have about $5 ,000 in credit cards.

[994] And then our mortgage payment a month is about $7 .83.

[995] So the student loan, can you tell me how much the big balance is?

[996] The big balance is probably $40 ,000 to $45 ,000.

[997] And you're paying $700?

[998] Yeah.

[999] Is that the minimum or that's just what you choose to pay?

[1000] So we actually had to refinancing.

[1001] that with a bank a few years ago because we were paying 12 % like privately.

[1002] So this is just our payment a month.

[1003] And I think in, I think that maybe balloons in about eight years.

[1004] So it's a private loan?

[1005] Yeah.

[1006] Okay.

[1007] Okay.

[1008] So to George's point, doing one thing at a time.

[1009] So you've already got the $1 ,000 saved, which is baby step one.

[1010] You've got $3 ,000 above that saved.

[1011] So in walking through the baby steps, and I'm just going to tell you what it is for right now.

[1012] And then we can go back and hit any objections and clarify it.

[1013] So based on the baby steps, you keep the $1 ,000 aside, and then we take that $3 ,000 that's left, and we throw it out our smallest debt.

[1014] Now, in this case, it could be the $5 ,000 credit card, or if you tell me that this student load is broken up into smaller chunks, it could be the student loan.

[1015] Is it just one big loan for $45 ,000, or is it a couple of loans squished together?

[1016] There's a big one for $45, and then there's maybe three or four that are around $1 ,000 each.

[1017] Okay.

[1018] So what I'm doing is I'm going to do the three or four or the three that are $1 ,000 each.

[1019] And I'm going to knock those out really tomorrow.

[1020] And I'm going to have $3 ,000 less of student loans.

[1021] And it might seem minimal on paper, but I can tell you and I think you know this.

[1022] It's just nice for that list to get shorter.

[1023] Like it's just nice to say I had four student loans and now I only have one, right?

[1024] So that's going to feel great.

[1025] And so now all we're doing here is we're just listing the debts, smallest to largest, by balance and we're paying them off one at a time.

[1026] And what you're going to find is when you pay off those three little ankle biters or, you know, four little ankle biters, it's going to give you so much like, oh, yes, like it's gone.

[1027] Like, oh, I can do it.

[1028] And you're going to realize, like, listen, I can keep going.

[1029] And so that's how that works.

[1030] And then once you quickly, as quickly as possible, get this debt cleaned up, then we're going to stack up that savings to six months, three to six months of expenses, basic expenses.

[1031] And then you're going to feel like nice and secure and like, okay, I've accomplished something.

[1032] Then we're going to rev back up that retirement.

[1033] And now we're going to start back again contributing to retirement.

[1034] And you're going to do 15 % of your gross monthly income every single month more than you've ever put away before.

[1035] And you're going to make up the difference from the time you lost because it's probably going to take you, oh, let's see, 45, 55, 60.

[1036] It's probably going to take you maybe depending on how crazy you guys get.

[1037] Maybe it's going to take you two, two and a half years to pay off this debt and get out of this.

[1038] Two and a half years is nothing.

[1039] It's a drop in the bucket to be free at the end of it.

[1040] Yes.

[1041] So that's it in a nutshell.

[1042] Now tell me your objections.

[1043] Well, I guess my biggest fear about the savings account is, although I'm putting, you know, $600 in a month, it also seems like there's that one or two weeks during the month where it seems like everything is coming out, and I end up almost transferring all of that back into the checking account every month.

[1044] And that's because you don't have the budget.

[1045] it.

[1046] What happens, what you're describing is something so common.

[1047] I have experienced it.

[1048] Maybe George, you've experienced it, is you get excited and you're like, I'm adulting.

[1049] I'm going to put some money aside for savings.

[1050] But because you didn't do a detailed budget, you truly didn't have the $600 to put aside.

[1051] And as the month starts to flesh out, you realize, oh, crap, I actually needed that money.

[1052] Then you go pull it back out of savings.

[1053] And it just deflates your whole feeling of trying to adult.

[1054] So if you just start with the budget, then you'll actually see, listen, do I even have money to put aside for savings?

[1055] In your case, it's possibly, in your case, you probably do, but because you're not on a budget and being very clear about every dollar that you're spending, it's getting spent in another category.

[1056] But in this case, you don't need to put aside another dollar for savings.

[1057] Right now, all of your dollars need to be going towards paying off these debts.

[1058] You got $4 ,000 saved.

[1059] Like I said, whether or not you're going to go off this call and dwindle that down to $1 ,000, that's between you and God and your husband.

[1060] But at the very least, from this point on, put all of that extra cash towards debt.

[1061] Don't keep putting it towards savings because you're losing valuable time that you could be using paying off this debt.

[1062] Okay.

[1063] And that daycare will become a line item in the budget.

[1064] And so that's what I love about when you start that every dollar budget, you're going to say, all right, we need 1333 a month to cover daycare for this month, correct?

[1065] Yep.

[1066] Okay.

[1067] Well, we just showed you how to free up 800 because we're pausing investing right now.

[1068] We showed you how to free up 600 because you just are going to pause all that savings.

[1069] and so anything beyond your basic expenses, food, utility, shelter, transportation, daycare, insurance premiums, everything else needs to go toward your debt.

[1070] Yeah.

[1071] Okay.

[1072] And listen, let me encourage you.

[1073] Don't feel like you have to do it all because that's what gets you scattered and your money goes away quickly.

[1074] It's almost like if you have this big jug of water, right, and that's your income.

[1075] And you're trying to put a little bit of water in five different jugs, which is debt and savings and retirement, and you're just pouring a little bit, and then you have to go fill up the jug and you pour a little bit more.

[1076] What would it look like if you just took that whole jug and you pulled it all in the other jug of debt?

[1077] You'd fill it up so quickly.

[1078] And then you go fill it up again.

[1079] And then when it's time, you can pour the whole jug into savings.

[1080] And then you fill it up again.

[1081] You can go so much quicker if you just focus on one task at a time.

[1082] And that's really how you move quickly to get this done.

[1083] Okay.

[1084] This is The Ramsey Show.

[1085] You're listening to The Ramsey Show.

[1086] And thank you for listening to the Ramsey Show, by the way.

[1087] If you enjoy this podcast, this YouTube channel, the radio show, we would love it if you did us the free favor of liking it, subscribing it, and of course, sharing it, whether you share it on your socials, you send it in a text to a family member or a friend or a coworker, whatever that looks like for you.

[1088] We sure would appreciate that because it benefits all of us, right?

[1089] It helps us in the algorithms.

[1090] And, of course, you sharing the message that hopefully, we're sharing, which is a message of hope and freedom in your finances.

[1091] So we would sure appreciate that.

[1092] And George, our question of the day today is brought to you by Neighborly.

[1093] Your hub for home services, almost nothing can ruin your day faster than a plumbing emergency.

[1094] Show you're right.

[1095] For over 50 years, Mr. Router plumbing has been helping homeowners with upfront pricing in the most stress -free plumbing experience possible.

[1096] So go to neighborly .com slash Ramsey to find a locally owned Mr. Ruder Plumbing.

[1097] Today's question comes from Andrew in Texas.

[1098] He says I'm a 27 -year -old Army vet in graduate school and I receive compensation due to disabilities that happened in the service.

[1099] My parents are divorced and both have provided for me and my brother in the past.

[1100] My dad recently asked me to help pay $1 ,800 for watch repairs.

[1101] Wanting to both please my dad and out of fear of emotional backlash, I did so, but I complained to my mom about it because I needed to vent.

[1102] mom texted dad about my complaint and he guilt -tripped me by saying how many cars have I provided for you and said he's quote tired of the one -way street of giving do I owe my dad anything if not how do I go about saying no to financial assistance requests oh boy I wish Papa was on the line right now there's a great quote about this I can't think of it Jade it's like uncommunicated expectations equals future resentment or something like that.

[1103] Listen, that's a great quote.

[1104] Let's go with that.

[1105] I just feel like this dad in this giving, well, I gave you all these cards when you were younger.

[1106] I wish my dad told me, hey, son, I'm going to give you these cars, but one day you're going to owe me some money.

[1107] And when I ask for any money, you just have to give it to me. That's part of the deal.

[1108] And I'd say, then I don't want these cars, dad.

[1109] This is a very awkward situation from dad.

[1110] I don't think it's fair to the son.

[1111] You don't owe anything to your dad.

[1112] No. If he chose to buy you cars over the course of your, you know, from the time you were 16 until 27.

[1113] The decision he made as a grown adult.

[1114] Yeah.

[1115] And by the way, just as a parent, the one way street of giving, when we have kids, we are called to, we're their steward.

[1116] Like we get to be in their lives and steward them and teach them how to be adults and raise them up to go into the world.

[1117] It's not about us getting something back at the end of it in return.

[1118] If you go into it like that, listen, you're setting yourself up for some dysfunction, which is what's taking place right here.

[1119] Can I just offer a hot take?

[1120] I don't think parents should ever ask their kids for money.

[1121] I don't either.

[1122] Is that like very controversial?

[1123] Listen.

[1124] No, it's not, George.

[1125] The only time I'm thinking, listen, I'm trying to think of every possible situation.

[1126] My parents have never asked me for money.

[1127] No. I can trying to think back.

[1128] I don't think it's ever happened.

[1129] If I was in a situation where I'm just, this was not my situation, but if I grew up maybe in a single, where there's a single dad or a single mom raising, if I was 16, if we were maybe in a part of the country where it's just been really tough, there's not a lot of jobs, or maybe we're trying to break a cycle, like we're in the midst of trying to break a cycle, I could see it's like, hey, help support this family.

[1130] If you wanted to help support the family and help break everybody out, I'm not mad at the idea of it kind of being a family effort in certain situations, but give me $1 ,800 to fix my watch.

[1131] Or it's more like, listen, I'm 16, I got a job at McDonald's.

[1132] I'm trying to help my single mom make rent and junior decides to give some of that money.

[1133] Listen, I'm not mad at that.

[1134] but $1 ,800 to fix my watch.

[1135] So I'm trying to think, if I'm Andrew, I got to approach my dad, I probably say something like, listen, dad, I'm so grateful for everything you did, for my brother and I to raise us, to give us a great home, to provide for us in this way, and for all of the past support.

[1136] But here's the deal.

[1137] I'm limited now.

[1138] I'm trying to approach my own financial goals and prioritize my financial well -being.

[1139] And as much as I want to give, I can't do it financially.

[1140] And I have to set this boundary and prioritize my needs right now.

[1141] And zero apologies given.

[1142] And you don't need to say, I'm so sorry.

[1143] I'm the terrible son.

[1144] Don't let him guilt trip you.

[1145] The relationship isn't worth that.

[1146] And truly, there's not much of a relationship if it's based on this financial transaction.

[1147] If this is the maker break for him talking to you and being involved in your life, I'm sorry.

[1148] But you had a dad and now he's become someone different.

[1149] Yeah.

[1150] And clearly this has happened before because he already has the quote, fear of emotional backlash.

[1151] Like this is, he already kind of knows what this is going to look like.

[1152] So you can offer him other ways of support of, hey, dad, I'd love to sit down with you and look at your budget.

[1153] If he's willing to do that and you want to sit with him and walk him through some numbers and show him how to afford things and maybe gift him a book that'll help him, that's great.

[1154] But you're not going to sit here because you know what happens?

[1155] He gives him $1 ,800.

[1156] He's going to be getting hit up next week.

[1157] No, yeah.

[1158] Yeah, that's right.

[1159] That is so, so true.

[1160] Yeah, I think that's why I never give to the Alumni Foundation, Jay.

[1161] All of a sudden, they're hitting you up.

[1162] They marked me on the list going, this guy's got money.

[1163] That's so, so true.

[1164] That's hilarious, George.

[1165] Yeah, this situation, this just makes me mad, man. I'm going to cross it out.

[1166] Not okay, parents.

[1167] Don't do this to your kids.

[1168] Yeah, Andrew has nothing to feel bad about.

[1169] All right, let's go to the phone lines.

[1170] We've got Thad.

[1171] I'm guessing short for Thaddeus in Los Angeles, California.

[1172] Was I right about that, Thad?

[1173] That's correct, yeah.

[1174] Hey, you love it.

[1175] What's going on?

[1176] Thanks for having me. So I'm a 28 -year -old, over -employed software engineer.

[1177] I'm single.

[1178] I'm very happy with my income, but there's two main things I'm willing to address today.

[1179] The first thing is I'm happy with the amount of money I'm saving every month, but the amount of money I'm spending is concerning, and it gives me like a little bit of anxiety to think about it.

[1180] Even though it's sustainable, it's like, I'm worried if, I just want to know if that's valid anxiety or, you know, if, you know, if you make more money, it's okay to spend more money.

[1181] How much do you make?

[1182] Right now I make $230 ,000.

[1183] Great.

[1184] How much are you saving?

[1185] Right now, it ranges between $5 ,000 and $6 ,000 a month.

[1186] Okay.

[1187] And that's after everything, after discretionary and needs and wants.

[1188] Is that an investment account, retirement accounts?

[1189] It's mixed.

[1190] I have most of my money in a brokerage, and I have some money for O1K.

[1191] So you're investing anywhere from 25 to 30 percent, it sounds like.

[1192] At least.

[1193] Okay.

[1194] Do you have any debt?

[1195] I have a car loan, yes.

[1196] How much is left on the car loan?

[1197] $40 ,000.

[1198] How much do you have in cash?

[1199] About $10 ,000 in the bank.

[1200] And you have money in the brokerage account?

[1201] You could pay off the car today.

[1202] Yeah, I have $60 ,000 in the brokerage, $10 ,000, $10 ,000, 401K.

[1203] Why haven't you paid off the car?

[1204] Why are you hanging on to the loan?

[1205] Good question.

[1206] Is that part of the anxiety of spending, is your body's kind of keeping the score going, I owe people money.

[1207] This car is going down in value while I still have this $40 ,000 loan.

[1208] It's definitely possible.

[1209] And the monthly payment's like, you know, it's fine, but yeah, it's like, it sucks.

[1210] Would your life be better without that payment?

[1211] Probably, but also it's nice to have $40 ,000.

[1212] But it's not really yours.

[1213] It's not really yours.

[1214] You have to do the full math.

[1215] You have to do the full math.

[1216] What you own minus what you owe.

[1217] That's right.

[1218] That's your net worth.

[1219] That's a much better scoreboard than a credit score or how much you have in a bank account.

[1220] Right, right.

[1221] What other debt do you have?

[1222] That's my only debt, yeah.

[1223] Okay.

[1224] And so you said you're investing.

[1225] 25 to 30 percent, how much are you spending as a percentage?

[1226] Are you spending five or six grand a month?

[1227] Yeah, so I think I spend on everything about 60 percent and I save 40 percent.

[1228] So yeah, 60, 40 right now.

[1229] Okay.

[1230] Are you doing any giving?

[1231] No. Okay.

[1232] I think that could be part of it.

[1233] And I'll tell you why.

[1234] I think there's only three things you can do with money.

[1235] Give, save, and spend.

[1236] And you've got a flat tire right now.

[1237] great at saving.

[1238] You're great at spending.

[1239] I think giving could unlock something for you.

[1240] And I do think we got to rein in the spending and go, why am I doing this?

[1241] Is it emotional?

[1242] Retail therapy?

[1243] Do I need some friends?

[1244] Accountability?

[1245] A lot of reasons for that.

[1246] That's good.

[1247] It's not lifestyle creep if you're doing all the things you should be doing with money.

[1248] You're on a budget.

[1249] You're saving for retirement.

[1250] You are paying off your debt.

[1251] You're practicing generosity and you carry the proper insurances.

[1252] If you're doing those five pillars, it's not lifestyle creep.

[1253] It's just living your life like it's golden.

[1254] This is the Ramsey Show.

[1255] 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 and build actual amazing relationships.

[1256] I'm your host, Jade Warshot.

[1257] This is George Camel, and we're taking your calls for the next hour about your life and your money.

[1258] So give us a call.

[1259] The number is AAA 825 -5 -225, and we'll do our best to help you.

[1260] So, George, without further ado, let's go straight to the phone lines and talk to Sarah, who's in Greenville, South Carolina.

[1261] Hey, Sarah, what's going on?

[1262] Hi.

[1263] I'm trying to determine if we are going to have to go on WIC, which is the children's government help.

[1264] I've cut everything I can possibly cut from our budget, but our grocery bill, even though I buy only what we need, is just with inflation.

[1265] We're just having to dip into our savings, and it's getting a little low.

[1266] Okay.

[1267] Tell me more.

[1268] What's in your savings?

[1269] What's your...

[1270] Oh, go ahead.

[1271] I was just calling to see there's any other suggestions.

[1272] Probably.

[1273] Let's dig deeper.

[1274] So you said you're digging into your savings.

[1275] So how much do you have in your savings?

[1276] At this point, we're down to 5 ,000.

[1277] Okay, so we've got 5 ,000 saved.

[1278] Do you have a debt?

[1279] I'm guessing yes.

[1280] We have our house and one car.

[1281] Okay.

[1282] What do you owe on the one car?

[1283] Um, 11 ,000.

[1284] Okay, 11 ,000 on that car.

[1285] And is it your only car or do you have two vehicles?

[1286] We have two.

[1287] The other one's paid off.

[1288] Okay, great.

[1289] What's your annual income?

[1290] 36 before taxes.

[1291] Okay.

[1292] Oh, well, there's our problem.

[1293] Annual income 36, there's two of you.

[1294] Who's working and who's not?

[1295] My husband works full time.

[1296] I stay home with our two sons.

[1297] Okay.

[1298] How old are the two?

[1299] sons?

[1300] Two and two months.

[1301] Okay.

[1302] So there's no daycare.

[1303] It's, you're the daycare.

[1304] Yes.

[1305] Okay.

[1306] Two and two months.

[1307] Okay.

[1308] And are you doing anything to bring in additional, I mean, obviously you're contributing big time to the household.

[1309] Are you doing anything financially?

[1310] We've looked at some options, but I am not a born salesperson.

[1311] So selling from my house is not really a good option.

[1312] What about like customer service?

[1313] Something you could do in the evening on the phone?

[1314] I've kind of looked at it briefly, but I haven't really dealt into it too much.

[1315] I've ever done anything like that with my, yeah, I've never done that.

[1316] And just to get cleared, I'm just, I'm asking lots of questions because I want to see this situation.

[1317] Your husband, does he work like crazy hours or is he kind of like nine to five?

[1318] At the moment, he works from seven, to 3 .30.

[1319] And then we're also a military family, so he's gone with that as well.

[1320] Okay.

[1321] And how often is he gone?

[1322] At least once a month.

[1323] For how long?

[1324] A weekend.

[1325] Okay.

[1326] If he has to do more training, then it could be up to a month.

[1327] Okay.

[1328] I'm just trying to get a picture of the situation.

[1329] My first thought is like, okay, you guys' income is super low.

[1330] And when I see a super low income, my first thought is how can we get it higher?

[1331] So is he capped off in any way?

[1332] I mean, he's in the military.

[1333] Is he able to go out and do more work?

[1334] I see a place for you to do more work based off the schedule and kind of what you laid out.

[1335] But I'm also wondering about your husband.

[1336] Right now, he's trying to get a promotion to a different position within the company he works for.

[1337] If he does that, then we'll be set.

[1338] If he doesn't get it, then we just can't.

[1339] and sustain this.

[1340] So I'm just trying to figure out.

[1341] He would go from 36 to about 90.

[1342] 90?

[1343] Okay, yeah, that's a good.

[1344] That's a nice job.

[1345] Yes.

[1346] It's a different job entirely, but it's within the same department.

[1347] So, but we won't really know anything if he's going to get that job until either March or April.

[1348] What I feel is that you guys are kind of waiting.

[1349] what I feel is that We're kind of waiting We're trying to figure out what to do But I'm also trying to figure out How to not have no money Right but And get to a point If he doesn't get the job I don't want to be just Completely strapped I hear I see Based on what you laid out A house that's on fire Like it's the flames are They're kissing kissing the roof Like it's it's on there But when I asked about The urgency of earning income I didn't sense the urgency It's kind of like Oh I looked in something but I'm not a salesperson and he has this but that and in a situation like this if I'm being truly honest Sarah like you guys don't have the ability to sit on your hands whatsoever like when you're in this situation it's like any job's a good job any job's a good job until I get the job right and I think that's what you're going to have to embrace is you're in a situation where you're not earning enough to when I say you're I mean you and your husband collectively are not earning enough to support your family.

[1350] Thank goodness you've got this $5 ,000 there.

[1351] But like you said, to your point, you're going to keep burning through that.

[1352] If we don't today decide I'm going to get a job.

[1353] Like, I'm going to get a job until I get the job.

[1354] And for you, that's why I'm asking.

[1355] I'm like, okay, he's not working if he's home at 3 .30, boy.

[1356] He's going right back out to her.

[1357] Kiss the kids and go back out.

[1358] Or you're going out.

[1359] Somebody's going to work.

[1360] He's coming back home and then he's doing.

[1361] doing military stuff.

[1362] That's unpaid.

[1363] Okay, then you're going to work.

[1364] When the kids go to sleep.

[1365] Is he getting paid overtime?

[1366] No. So he's making 36 grand working over 40 hours a week?

[1367] Well, no, when he gets home, he's doing military stuff and that's...

[1368] Listen.

[1369] Something about this has to shake loose.

[1370] Something about this has to shake loose because...

[1371] What's left on this car alone?

[1372] Eleven.

[1373] I think this car can go.

[1374] Do you guys need two cars right now?

[1375] Yes, because when he's gone, I would be without transportation.

[1376] To like a doctor's appointment, grocery store?

[1377] Can you go out once he's home?

[1378] Well, like when he's gone, you know, because other...

[1379] Can we sell it and downgrade to a 5 ,000 car?

[1380] Wait a minute, wait a minute, wait a minute, sorry, I'm getting frustrated.

[1381] Here's where we're at.

[1382] If you...

[1383] Whatever you look for, you'll find, all right?

[1384] Sarah, and right now, I don't think you want to find the solution.

[1385] I think you want to go on WIC, and I think you want that to be the solution.

[1386] And it doesn't matter what George or I says for you, what we're hearing back right now is, no, that won't work.

[1387] And I can't do that because of this.

[1388] And nope, can't do that.

[1389] Listen, then stay in debt, right?

[1390] If you don't want to take any of the advice, then the option is I stay in debt and I go on WIC.

[1391] You have to look at both sides of this equation or you can embrace doing something very unconventional for you, very different, very outside your norm, very outside your comfort zone, and then you get to where you truly want to go, which is out of a stressful place with money, out of borrowing from your savings every single month in order to make ends meet.

[1392] But you have to be willing to accept the solution.

[1393] George and I can give solutions to we're blue in the face.

[1394] But if you don't want to actually accept them and embrace the suck and actually go out and do it, then go on WIC.

[1395] choice is yours maybe time to embrace the suck or sell the house and rent or sell the car or go make more money if she had called in and we said well Sarah there's nothing we can do for you she would have been pissed at us but instead we gave you a long laundry list of choices you don't want to take them listen we can only do so much this is the Ramsey show all right this is the Ramsey show I'm Jade Warshot George Camel to my right we're your host today if you want to get on the phone lines you have a question that's burning in your soul you can ask that question.

[1396] The number is AAA -825 -5 -2 -25 and you'll go to the phone screener, the wonderful Austin who will make sure that you can come on here and not talk crazy and so that's how that works.

[1397] We trust him with our whole life, Jay.

[1398] We truly do.

[1399] We trust Austin big time.

[1400] He does a great great job.

[1401] All the guys in the booth today, they're all guys doing excellent job, keeping things up and running.

[1402] And it's funny because you know, when calls come through, George, we can see a little, just like a little Like a one -line summary snippet.

[1403] Yeah, kind of what they're going to be talking about.

[1404] And our last call, you know, it was a young lady who they were just dealing with the frustrations of a income that's too low, a core income that's too low.

[1405] It's not sustainable.

[1406] And they had the hope of a raise on the horizon, but what is kind of far on the horizon.

[1407] And so, of course, they were worried, like, what do we do?

[1408] Maybe we have to go on WIC.

[1409] And so, George, you and I kind of laid out what I think were wonderful suggestions to not.

[1410] have that be the case.

[1411] And what I want to say about that is, you know, obviously, if you call this show, we're going to give you advice.

[1412] You're never going to call this show and us go, oh, well, there's nothing you can do.

[1413] We're never going to say that to you.

[1414] We're never going to say your situation is hopeless.

[1415] We're never going to tell you there's nothing that you can do.

[1416] And, well, just depend on the government.

[1417] You're never, ever going to get that answer from us.

[1418] So don't be surprised when what we tell you to do sounds a lot like work.

[1419] It's going to sound a lot like you getting out of your comfort zone.

[1420] It's going to sound a lot like you embracing a different philosophy, possibly surrounding your life and your money.

[1421] And listen, get excited about that because the option is staying the way you were.

[1422] And so it leads me, George, to an observation that I've made.

[1423] And you can see if sometimes you fall into this camp if you're listening.

[1424] But, you know, sometimes people would rather be right than happy.

[1425] Oh, well, I always want to, this is what I secretly want to ask the caller.

[1426] Are you looking?

[1427] for confirmation or do you actually want help?

[1428] She wants to be right that there's, I shouldn't say this, some callers want to be right that there's no way out.

[1429] There's nothing to do.

[1430] Then be happy and embrace the fact that we're giving you an answer that's going to lead you to peacefulness, more happiness, less stress.

[1431] But if you'd rather be right that there's no way out, then be right.

[1432] Well, it's like that friend who likes to vent and complain to you.

[1433] And I think the healthy thing to ask that friend before they start on one of their rants is go, do you want me to just listen or do you want solutions.

[1434] And if you just want to listen to you event, that's fine.

[1435] Yeah, well, yeah, okay.

[1436] We can waste some time.

[1437] But if you're looking for solutions, I'll give them to you if you're actually wanting that.

[1438] Yeah.

[1439] So I think that happens with callers a lot.

[1440] And when I know they're not going to take the advice, Jade, here's when they, I call it getting wailed because they go, well, and I go, oh, whatever's on the other side of that whale is going to be a justification, an excuse of why they can't.

[1441] And what happened, what riled you up is that we just kept him.

[1442] hitting wall after wall, after wall.

[1443] And I'm like, these are things that you and I have both done.

[1444] It's not even hypothetical.

[1445] When we didn't have enough money, we just went and got more jobs.

[1446] That's right.

[1447] And I think something, you know, we can kind of hear it in your calls.

[1448] I love the book.

[1449] It's called Never Split the Difference by Chris Foss.

[1450] And it's about negotiating.

[1451] But he talks about this concept that takes place when you're negotiating with somebody where they move from just saying, yes, yes, I know, yes, I know, to that's right.

[1452] and what happens is a lot of times you guys we have folks call on the show and they're kind of used to our our principles and and maybe somewhere in their head they're like yeah that's right I probably should live on you know yes I should live on less on my maker yeah I should budget or you know yeah there might be a way for me to do better in this situation but when you're you mentally move to the point of that is right not just me agreeing and going yes yes yes yes but when you go that's right I do need to get a job that's right I can make a better use of my time.

[1453] That's right.

[1454] I am being a little bit lazy.

[1455] That is right.

[1456] That's when you start to see that mental shift in.

[1457] That's huge.

[1458] Because you're accepting that this is the right way to go forward and it's an accurate depiction of what's going on as opposed to you just going, yeah, yeah, yeah, because that's basically, well, it's basically the same thing, George.

[1459] Well, a lot of people on these calls, they'll paint themselves into a corner and they'll go, well, I have two crappy options.

[1460] It's Either I withdraw from my 401k or I stay in debt forever or I move the debt around.

[1461] I'm going, there's option C and D and E and F. But they have a limited vocabulary.

[1462] They only know the two letters of the alphabet.

[1463] There's A and B. And so we can't see it like that.

[1464] There's so many more options out there.

[1465] But you've got to be willing.

[1466] Yeah.

[1467] Got to be willing to amputate the Tahoe, as Dave has said, for 30 years and sell the car and get the second job and maybe move to a cheaper area or downgrade in house or sell the house.

[1468] Or maybe you go to work and put the kids in daycare because you can make more money doing that, even if it's not ideal.

[1469] It's almost like, you know, you go, you go to the doctor for your checkup, right?

[1470] And they're like, listen, your triglycerides are high.

[1471] Your cholesterol is high.

[1472] If you don't change your diet, you're putting yourself at risk for a heart attack or stroke.

[1473] And in the moment, you're like, and they're telling you all these things that you can do to lower your cholesterol, to lower your, you know, to make yourself a healthier person.

[1474] But in your mind, you're going, oh, man, if I have to give up red meat or, man, if I have to like pull back on the salt intake and you're looking at all the negatives and how it's going to feel in a moment if you have to make those adjustments.

[1475] And most of us, we just go away and go in the moment, in the doctor's office, we're going, yeah, yeah, I know, you know, I need to, I need to do this.

[1476] But it's not until we hit that, like, that moment.

[1477] You have that health scare.

[1478] You have that moment that you're like, oh my gosh, he was right.

[1479] Like, that's right.

[1480] I do need to make these changes.

[1481] And so it's almost like, George, sometimes people really do have to hit that rock bottom moment or like we call it here that I've had it moment.

[1482] That it's like, listen, I didn't take the advice.

[1483] Call me back when you're ready.

[1484] Yeah, call me back when you're really ready to change.

[1485] When you hit rock bottom.

[1486] Oh, so good, George.

[1487] Good stuff.

[1488] And let me just say, because I just want to say this, if we ever take some time and really come back and talk about a situation or we, you know, we had to give her a little bit of tough love there, we love you guys like we we truly care about you i'm never gonna you know deliver the paddle just out of fun it's truly i want you to get this like i don't want her to go on wick i want her to get control of her money and be able to look back on this moment and go like that was the catalyst that was the moment that changed everything and i want her to come back here and be on the debt -free stage like all of us just simply want the best for you we want you to have a stress -free life with your money We want you to be able to live and give like no one else.

[1489] We want you to be able to experience the same piece that we experienced from walking through the baby steps and changing our whole perspective and how we view money.

[1490] We want you to experience that.

[1491] So that's what the show is all about.

[1492] Don't ever get it twisted and think, well, they're just being mean or they're just yelling at her.

[1493] It's never that.

[1494] And I hope that you can see that in our heart in the way that comes across.

[1495] All right.

[1496] That's it.

[1497] Katie, in Kansas City, Missouri, we're coming for you.

[1498] What's going on, Katie?

[1499] Hi.

[1500] Thanks for taking my call.

[1501] So my husband and I have followed your steps and we are debt -free.

[1502] We have about a million dollars saved.

[1503] We are renting right now because we moved to a different state.

[1504] And when we move, there was nothing that we could find that we wanted to buy at the time.

[1505] And so we're renting right now.

[1506] We have the opportunity to build a house on my mom's property.

[1507] She actually gave us a portion of a property.

[1508] And it's $500 ,000 is what we would spend on building the house.

[1509] We have five children.

[1510] It's a 2 ,800 square foot house.

[1511] What's your question just because we're up against the clock?

[1512] I want to make sure we get get you help.

[1513] We're just wondering if this is a good financial choice for us, we're worried about how it's going to affect our retirement.

[1514] Why would it affect your retirement?

[1515] to take 500K from the million to do the house?

[1516] Yeah.

[1517] How old are you guys?

[1518] 42.

[1519] Oh, no, you can't touch retirement.

[1520] Is it in a brokerage or is it in 401Ks?

[1521] So half of it, so 500 ,000 of it is in retirement.

[1522] The other 500 ,000 is just in high interest savings and some mutual funds and stuff that we can, that's liquid.

[1523] Was that earmarked for this house?

[1524] Well, kind of.

[1525] because we sold our last house before we moved, and so we have that into an account that is just earning interest right now.

[1526] Listen, if the money is liquid, it's not terrible.

[1527] It's not a terrible idea at all.

[1528] Most people's wealth is sparse between, you know, their investment accounts and their personal residence, and you've got plenty of time to build up more retirement investing.

[1529] I would pay cash for this place.

[1530] I would, too.

[1531] And then we're just...

[1532] Yeah, that's what we're planning to pay cash.

[1533] We're just wondering if it's going to...

[1534] You don't think that will affect...

[1535] Go to an investment calculator, pop in $500 ,000 that you have now, plus all of the future amount you're going to invest for the next 20 years from 42 to 62.

[1536] I think you guys are going to be just fine, especially with no -house payment.

[1537] Ding, ding.

[1538] It's amazing.

[1539] $500 ,000 house and cash?

[1540] That's something to be excited about.

[1541] This is The Ramsey Show.

[1542] This is The Ramsey Show.

[1543] I'm your host, Jade Warshot, joined by George Campbell, host of the YouTube show, the George Campbell Show, and also author of The New Book, Breaking Free from Brow.

[1544] broke.

[1545] An honor to host next to you, George.

[1546] It's an honor to be with you as well, Jade.

[1547] Awesome.

[1548] So let's go to the phone lines where we've got Leslie from Atlanta, GA.

[1549] What's going on, Leslie?

[1550] Hi.

[1551] Well, I wanted to say hi.

[1552] But anyway, I'm sorry.

[1553] I'm a housewife with two kids, and my husband works and makes about $1 ,500, if he works Saturdays.

[1554] I also have a mortgage, another mortgage, that I rent out to my dad.

[1555] add and to other renters.

[1556] Okay.

[1557] And I make about 2 ,900 in that house, but the mortgage in that house is 1 ,300.

[1558] And I just want to, we also have a car loan that is 375 monthly.

[1559] Well, how much is the whole car?

[1560] How much do you own the entire vehicle?

[1561] like what's the full balance um 20 or 19 ,000 okay keep going and that was that was about it what's your question how can I help my husband like save or how can we invest in like a Roth IRA like I just want to help him out okay um i think let me go back right quick because i think i missed the very first thing you said when you said 1500 dollars what was that my husband that's what he makes weekly oh weekly okay okay okay and then six grand a month you've got a primary residence which is where you live and then you've got a rental that you're renting out and then you've got the car note right do you have two mortgages yes sir okay so let's just get some particulars here the rental, what do you owe on that?

[1562] Like, what's the whole enchilada?

[1563] $95 ,000 for that other house and the house that I'm staying at right now is $60 ,000 to pay for the mortgage.

[1564] Okay, that's all you owe on it.

[1565] And then you've just got the car.

[1566] So what I hear, and I don't know if you meant this, but it sounds like you and your husband kind of do your money separately?

[1567] Yes, a little bit.

[1568] Okay.

[1569] And it sounds like you're saying, how can I help him save?

[1570] so can you tell me what his debt is just for the sake of the conversation like tell me about his financial snapshot he has no he has no debt at all okay so then help me understand why you feel like you're helping him save as opposed to I want to I want us to save and have more savings as a family um because I because my debt is well his day is the house my debt is the other house and the car, and I just want to get rid of all the payments, but I need to, like, I need help or guidance to how to pay it off, like, fast.

[1571] Yeah, okay.

[1572] Or if I should even do that.

[1573] The first, I think the first thing here is I really, I mean, how long have you guys been married?

[1574] We've been married for three years.

[1575] Okay, three years.

[1576] Now's the time for you guys to be like, all right, we've been married for three years.

[1577] Who knows how long you were together before that?

[1578] it's time to combine this thing you have kids yes sir we have two kids so you combine dna but not bank accounts is that what i'm hearing yeah it sounds crazy because it's kind of crazy is it a trust thing like why did you guys keep them separate no it's just we haven't really talked about joining them together and also um but why is that because you've talked about having kids.

[1579] I think I know why.

[1580] I think it's like I feel like you feel guilt about the fact that you have and I'm just using your words.

[1581] These are not my words.

[1582] I think you feel guilt over the fact that you have car debt and you have this rental debt but maybe because you're not bringing in cash money that you feel like okay maybe if I frame it up in a way of I'm helping him.

[1583] Does that make sense?

[1584] That's kind of what I'm hearing here.

[1585] That's how I feel.

[1586] in a way because it is a lot of money that I need to put into other things.

[1587] It is, but it's not that, listen, it's debt, but it's not like, you didn't call in here being like, I've got $100 ,000 and I've got, you know, this long laundry list of debts.

[1588] Okay, yes, you've got a $19 ,000 car.

[1589] Yeah, we probably need to pay that off.

[1590] But what I really want...

[1591] Yes, I'm thinking of...

[1592] Sorry.

[1593] No, that's okay.

[1594] What I really want is what we're getting to on this call is really not the $19 ,000 of debt.

[1595] Like, that's a problem, and you can get that paid off.

[1596] But what will really make this easier is you both have to feel comfortable to be who you are in the marriage and who you are as somebody who came in with debt.

[1597] Who he is is is somebody who came in with mortgage debt.

[1598] Who he is as somebody who makes $6 ,000, which is a great contribution to the home.

[1599] And who you are as somebody who's a stay -at -home mom with two kids, who makes a great contribution to the home.

[1600] Do I think that you could benefit maybe from going out and getting some extra work and bringing in some money?

[1601] Absolutely.

[1602] But not to claim a place of equality in the marriage or a place to work.

[1603] where now, now you're doing your part, not in that sort of way.

[1604] So I do think that you and your husband probably need to have some conversations of, you know, what would he say if you said, listen, I feel a lot of guilt over the fact that I have this debt.

[1605] And I kind of feel like we're, you know, we have two separate goals.

[1606] Like you have your money.

[1607] I have my money.

[1608] What could it look like for us to combine?

[1609] What do you think he would say if you said that?

[1610] He's really supportive.

[1611] It's just me. Like, I kind of don't want to put that pressure on him.

[1612] I feel like it would be a big pressure.

[1613] How are you paying for the car right now?

[1614] With the money from the other house.

[1615] So where does his money go?

[1616] To the house.

[1617] So if you got rid of this rental, you would have $0 of income and you wouldn't be able to pay your car note?

[1618] Yes, sir.

[1619] And what would happen if the money that he's bringing into the household paid the car note or paid the car off?

[1620] What would happen?

[1621] Um, we actually talked about just, like, um, going month a month and paint, paying it off for just two years.

[1622] Okay.

[1623] Like, we'll finish paying it off in two years.

[1624] I think all of your plans suck right now because you guys are not aligned with your financial goals.

[1625] I feel the same way.

[1626] He makes great money.

[1627] You guys have money in savings?

[1628] Yes, sir.

[1629] How much?

[1630] I don't know how much he has, but I have just a problem, Leslie.

[1631] that's a huge problem that you have no transparency and accountability in this marriage I would have a come to Jesus meeting tonight and go I need to know exactly what's happening with our finances because it's our finances because we decided to get married we decided to have kids and I haven't done a good job paying attention you own it don't come accusatory just say I have not done a good job and I own that and I want to do better I want us to get on a plan together I want us to pay off my car loan I want us to pay off our mortgage you've got to change the pronouns here if you're ever going to make progress because you called in saying I want him to retire sooner, right?

[1632] That's a goal.

[1633] That's a shared goal that hopefully you both have.

[1634] The only way to do that is if you work together and you combine finances and you attack these goals together with intensity.

[1635] Yeah, because I look at this and I go, oh man, like you guys, your situation financially, it's far from the worst I've ever seen.

[1636] Let me just put it like that.

[1637] I look at just the numbers and I go, oh wow, if they wanted to, rental and whatever that brings, they could probably pay off their primary home mortgage and pay off their car.

[1638] He might have enough in savings to pay off your car today.

[1639] Yeah.

[1640] You have no idea.

[1641] Yeah, the thing is that it's just kind of, my mom kind of gets in the way.

[1642] And she's like, that house has nothing to do with your husband.

[1643] Like, don't.

[1644] Oh, so she's saying keep your side thing, keep your side thing as a fallback.

[1645] it's something that's there.

[1646] That's the complete wrong way to enter into a marriage, which is I'm going to keep this piece on the side just in case.

[1647] That lets me know that where I sit, if you enter into something like that, it's telling me one or two things.

[1648] It's either telling me they've given you a reason to create that fallback.

[1649] Like they've shown you something that's made you feel like I need to make sure I got mine on the side just in case, or you're carrying previous baggage into it that's causing you to react.

[1650] in that way.

[1651] Neither which is good.

[1652] I would suggest that you guys sit down with a good marriage counselor because I think that this is not a money problem.

[1653] Like this is not a numbers problem.

[1654] This is you feeling secure in your marriage.

[1655] You feeling like you can trust your husband, him feeling like you can trust you.

[1656] And you feeling like you have a vote, which you do.

[1657] Yeah, you do.

[1658] Ooh, I want this sorted out.

[1659] Please.

[1660] Listen, better help is great.

[1661] I use them.

[1662] My husband uses them.

[1663] You guys find a marriage counselor and get this sorted out.

[1664] This is the Ramsey show.

[1665] You're listening to the Ramsey show.

[1666] Our scripture and quote of the day, 2 Corinthians 4 -7 says this, but we have this treasure in jars of clay to show that this all -surpassing power is from God and not from us.

[1667] Jordan Peterson said, work as hard as you possibly can on at least one thing and see if it happens.

[1668] Ooh, that's perfect.

[1669] That's the baby steps.

[1670] I like that.

[1671] Work as hard as you can add at least one thing and see what happens.

[1672] Love that, Jordan.

[1673] All right.

[1674] Very, very good.

[1675] All right, George, I say we hit these phone lines with a vengeance.

[1676] Let's go to Salis in Myrtle Beach, South Carolina.

[1677] What's going on?

[1678] Yes, hello, everybody.

[1679] Thank you for taking my call.

[1680] I am a new to Ramsey listening to your podcast.

[1681] I enjoy them very much.

[1682] I have now become obsessed with trying to pay off my primary mortgage.

[1683] Cool.

[1684] I'm obsessed now.

[1685] And so my question is with regards to my investing, my little backslash, I'm 56 years ago.

[1686] Okay.

[1687] I'm single.

[1688] I do very, you know, my income gross -wise, between my business and an investment property that I do, like short -term rentals, is up with about 300 ,000.

[1689] That's gross.

[1690] Okay.

[1691] I'm $10 .99.

[1692] So I have to pay my own taxes and I pay into my insurances and I pay into my retirement and things like that.

[1693] Okay.

[1694] I'm now finally out of credit card debt.

[1695] I have no debt.

[1696] My car is paid off.

[1697] I have two mortgages.

[1698] Of course, my investment property, which the income that I get more than pays off for, everything required in that property.

[1699] What's the mortgage on it?

[1700] 186 ,000.

[1701] Cool.

[1702] And then I just built my Forever Dream Home.

[1703] And my property, excuse me, my mortgage balance is about $437 ,000.

[1704] Okay.

[1705] And I don't want to be in my 70s.

[1706] It's still paying a mortgage.

[1707] Right.

[1708] How much are you investing right now?

[1709] I'm investing maybe about 10 % of my gross shop.

[1710] All right.

[1711] How much do you have in your nest egg in investment retirement accounts total?

[1712] It's over $500 ,000 right now.

[1713] And you're putting about $30 ,000 in roughly a year?

[1714] And really, yes, sir.

[1715] Okay.

[1716] Hey, are you, are you living on a budget?

[1717] What's that?

[1718] Aha!

[1719] And there lies the problem.

[1720] Because I'm looking at, I'm looking at, at you, I'm like, okay, this is, this is a boss, babe.

[1721] Like, she's doing her thing, making $300 ,000 a year.

[1722] She bought her dream house for, you know, 437.

[1723] You got $500 ,000 in retirement.

[1724] Like, there's certain things that you're really, really doing right.

[1725] But if you say to me, listen, I'm 56 and I want this, this house paid off.

[1726] I'm looking, okay, I'm like, you're on a $300 ,000 income.

[1727] What would look like if you lived on $150?

[1728] Well, you know, $300, I think, is what I did in 2020.

[1729] 2023.

[1730] So I didn't always do that, but this is what I'm doing, and I'm probably, it's probably going to go up every year because, you know, my, I'm, I'm, you know, my income will go up.

[1731] Of course.

[1732] But you're paying almost 100 grand in taxes a year as well?

[1733] Not, not exactly that, because, you know, thanks for, I have some good business expenses, and I write things off for the, from the property and all that stuff, but I'm just wondering where all of your net income is going.

[1734] Yeah, I like to know that, too.

[1735] I think there's some, you're doing really well on the investing side and saving side, but I think you're spending a whole lot of money, too.

[1736] I do, too.

[1737] Well, I will agree with you.

[1738] I am having a good time.

[1739] I'm not going to lie about that.

[1740] I mean, I do a lot of traveling.

[1741] I play golf twice a week.

[1742] I mean, I'm having a good time.

[1743] Good.

[1744] Yeah, and you should have a good time.

[1745] But I also want to know that your other goals are taking care of first.

[1746] And so you're talking about investing.

[1747] Are you wanting to pay off the house faster by doing something differently?

[1748] well so this was my thought process and this is why I'm calling so um this is probably the most uh in 2023 I was floored when I opened up my statement from my property management company as to what the gross income was on the property for 2023 so I'm very happy about that so I'm just wondering um I was thinking of just every time the property management company makes a deposit into my account from a rental.

[1749] I just want to plug it and pay the principal on my primary mortgage.

[1750] Okay.

[1751] And what's wrong with that?

[1752] Well, then I was also thinking, should I just, in addition to that, hold off on my retirement contribution.

[1753] I think you need to up your retirement.

[1754] You make enough money that you're technically in what we call baby steps four, five, and six.

[1755] baby step four is you're investing 15 % of your income your gross income every month and then five doesn't apply to you but six is you're paying off your home and so you should be able to do both of those simultaneously and because you have such a nice income you should be able to do them both very well simultaneously like you can do your 15 % and put a very nice decent chunk towards paying off this home mortgage there's no reason that you should retire with either of these mortgages if you really put the pedal to the metal and i mean if you're depending on how intense you are about this, because when you called in, you said, listen, I'm obsessed with paying off my primary mortgage.

[1756] Are you obsessed to the point of selling your rental?

[1757] That was a thought.

[1758] That was a thought because I figured, let me take the income from the rental and at least pay half of it down because I probably have over $200 ,000 worth of equity in the investment property.

[1759] and so my thinking was let me just try to pay as much of this down for the next couple of years and then maybe sell my investment property and take the equity and just pay off the rest.

[1760] Why not?

[1761] What's wrong with that?

[1762] What's wrong with you taking?

[1763] And I think you should do, again, this is not an excuse for not doing a budget.

[1764] I still want you to do a budget and see real numbers because just saying, listen, I'm going to take this check and pay that off.

[1765] That's great, but you might find in the budget that you have more money to put with it and it not really affect your lifestyle all that much and make some headway faster.

[1766] You know, baby step six is all about being very intentional.

[1767] You don't have to be like scaled back on, you know, barely living, but you might do a budget and go, okay, listen, there's some money that's getting pittled away and I would rather use it in this way to pay off the mortgage.

[1768] You might find that.

[1769] And so taking those rent checks and maybe a little bit more money and adding it with it and maybe give yourself a two to three year timeline and say, I'm going to pay this down for the next two to three years.

[1770] And then at that point, I'm going to sell this and use the equity and have a completely paid for primary mortgage.

[1771] And then as you continue to age, you might decide that you want to stack up some more cash and buy another rental completely in cash.

[1772] You got options, girlfriend.

[1773] I would not pause investing.

[1774] I just did the math for you, from 56 to 62, if you did nothing, you just left the 500 grand sitting there in good mutual funds, you'd have about 900 ,000 at 62 with a 10 % return.

[1775] But if you invest 15%, it'll be closer to to 1 .3 million if you just diligently put away 15 % every year into retirement accounts and investment accounts.

[1776] Okay, because right now I have a traditional and I have a Roth, and I have a Roth, and I just with the Roth, because of my income, I can't really contribute too much.

[1777] To the IRA?

[1778] After tax to that?

[1779] Yes, sir.

[1780] Yeah, the Roth IRA does have income limits, but you can do a backdoor Roth.

[1781] So I would connect with a SmartVestor Pro at Ramsey Solutions .com.

[1782] They can help you set that You're basically funding the traditional IRA with after -tax money and then converting it over.

[1783] Yeah, because that was my concern because, you know, that $500 ,000 is pre -tax.

[1784] Sure.

[1785] Well, I wouldn't go convert it all to Roth.

[1786] That's not wise either.

[1787] That's too much.

[1788] That's too much.

[1789] Because I would say, like, taxes and stuff like that, right?

[1790] No, I'm not trying to, I just want to make sure that 10 years from now you can actually retire.

[1791] So you don't, once you're not making $300 ,000, I want your investment.

[1792] investments to make you 300 grand.

[1793] That's a good retirement.

[1794] I will say this is probably a banner year.

[1795] 2023 is a banner year for me. And so I see it's just going to, it's just going to continue, you know, got willing for the next a couple of years.

[1796] So while I am here, while I am in while you're making this money, you need to keep living like you're making 100 grand.

[1797] And that's how you're going to make this money work for you.

[1798] Invest 15 % knock out the mortgages.

[1799] That's the game plan.

[1800] I would put that on a four -year plan.

[1801] By the time you're 60, this thing has got a bow on it.

[1802] birthday party.

[1803] Y 'all are sailed Britain.

[1804] Get the friends together.

[1805] I know that's right.

[1806] Paid off home mortgage.

[1807] We gave you the way to get there.

[1808] It's up to you to walk it out.

[1809] Ooh, George, I enjoyed hosting the show with you.

[1810] Hey, don't forget, we're going to be taking your questions in this every dollar Q &A coming up.

[1811] 5 p .m. Central time.

[1812] On the Ramsey Show YouTube channel.

[1813] That's right.

[1814] We'll see you there.

[1815] This is the Ramsey Show.

[1816] If you're a leader, your personal growth matters for your organization.

[1817] Because whatever you lead can only grow as much as you do.

[1818] I know from experience.

[1819] 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.

[1820] I'm taking your calls and helping you figure out how to overcome challenges within your organization.

[1821] One episode could change your business.

[1822] Check it out on Apple, Spotify, YouTube, or on the Ramsey Network app.