Freedom Isn’t Found by Borrowing Money

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

[2] I'm Ramsey Personality, George Camel, joined by Jade Warshaw this hour.

[3] The number to call is triple 8 -8 -25 -5 -225.

[4] You call in.

[5] We'll talk about your life and your money.

[6] And if I feel spirited today, it's because I am, Jade, because we have an electric crowd that's here for our total money makeover weekend.

[7] What feels like hundreds of people out in the lobby I think it is hundreds.

[8] Preparing for a wonderful weekend, growing, learning about money, getting motivated, and getting fired up.

[9] It's good to be with people.

[10] That's right.

[11] I know that's right.

[12] It's about to be a pep rally up in here.

[13] Well, let's kick it off with Joe in Newark, New Jersey.

[14] Joe, welcome to The Ramsey Show.

[15] Hi, George, how jade?

[16] I'm graduated high school in 1994.

[17] I went to a Christian high school, a private high school.

[18] And while going there, they introduced us to the FPG.

[19] you and we went through some of that, uh, those courses and things like that.

[20] And I put that into my life and I did pretty well for myself.

[21] I'm now, um, 48.

[22] My wife's 49.

[23] And we have a family business now.

[24] And we have a hot, very high network.

[25] Uh, we have no debt, multiple properties.

[26] And we don't really work.

[27] We're financially independent.

[28] We're comfortable.

[29] My question is, our son, We only have one child.

[30] He is 14, and he is in ninth grade.

[31] We are considering him pulling him out of school and letting him get his GED to fast track him into our family business and kind of bringing him in more into what's going on so that he can be more involved in preserving our, let's say let's call it generational wealth uh not like he'll have any say we have a trust and all that stuff but for but for now it just seems like we're not getting a uh the most like i don't know what at what point should he keep going to school like what's the point we're not we're not seeing it but if we're being kind of like out of touch by thinking that uh we're just wondering some perspective that's maybe faith based on what we're asking.

[32] Well, the biggest thing I hear is it kind of, and you know, I'm not trying to overstep, but in many ways it kind of sounds like you're determining his, you're predetermining his path in life.

[33] You're saying, hey, it's not worth it for you to get your education, son, because you are going to run the family business.

[34] And there's a very good chance that, well, number one, it's putting the pressure and stress on him now at ninth grade to kind of say, like, this is my future, whether I like it or not.

[35] And listen, you might be seeing him say, do want to do this or I'm interested in that.

[36] But at ninth grade, he really doesn't know.

[37] So the reasoning that I would say not to do this and for at the very least, let this guy finish out and graduate high school is because, you know, you don't know what he's going to want to do, you know, in the future.

[38] You don't know that this is the career path he wants.

[39] He might get into it and be like, I don't like this.

[40] And you don't want him to turn up, turn around and have any kind of resentment or, you know, contention because of the way that you guys pulled him out of school early and kind of stunted that ability for him to really explore and see what he wants to do.

[41] Sure.

[42] My overall thinking is this man's not even done with puberty.

[43] Do we really need to be throwing him into this, you know, family business at this stage?

[44] He's probably just, you know, the guy wants to get his first girlfriend at this point.

[45] And so I feel like we should let him be a teenager, let him be a kid.

[46] Let him grow a mustache.

[47] Let him grow a mustache.

[48] Let him experience, you know, high school.

[49] And guess what?

[50] The family business is still going to be there three years from now when he's graduating.

[51] And then he can make a choice.

[52] Hey, do you want to go to college?

[53] Do you want to take over the business and let him explore?

[54] Most 24 -year -olds don't know what they want to do with their life, let alone a 14 -year -old.

[55] So true.

[56] So I don't want to fast -track that to Jade's point.

[57] And then he's resentful at 30 going, I didn't even get a choice, man. This was like, it was like golden handcuffs to take over this business.

[58] And like Dave has said with family business, you want them to feel called to it.

[59] And Daniel, his son, went through high school, went to college, graduated.

[60] And then when he felt called, he showed up.

[61] And it was on his, it was on his volition versus dad saying, hey, kid, I'm going to pull you out of school.

[62] You're going to be a part of the Ramsey organization and take over.

[63] But now that it's his choice, it's a very different mentality and work ethic versus getting dragged into it.

[64] And there's probably a way that you could, if you wanted to give him some exposure to what it is that you guys do all day, to what the values of the company are.

[65] Like there's probably ways that you could build that in.

[66] You know, like Rachel says, more is caught than taught.

[67] So if you're talking about it at home, you know, every once in a while he's showing up with you on a Saturday or you're talking about the things that you're working on, you're talking about the things that you do, what the business does, I think that he is going to understand that, okay, this is what my family does, this is how we work, this is what we're about.

[68] And I don't think that at any point that requires pulling him out of high school.

[69] Okay, that's great.

[70] Thank you very much.

[71] Definitely a lot to consider.

[72] I see the value in what you're saying.

[73] Listen, I'm going to flat out tell you, don't do it.

[74] I mean, I hope you don't do it.

[75] I'm 50 -50 on it.

[76] It's like when he has a day at school and one of the teachers is kind of like kind of in the weeds and being silly about things, in my heart, in my mind, I'm like, we're kind of past that.

[77] We don't really need to deal with that.

[78] That doesn't apply to us.

[79] but that's kind of like the snotty side and I don't like I don't want him playing that card you know what I mean like I don't have to be like there's some truth to that but at the same time like you have to be a good person overall and sometimes you do have to go through um you have to be exposed to different challenges to make you a complete person right sure so if you're too sheltered you know you'll be a spoiled brat so it's you don't want that either that's true child or children like if you're talking about what's going on like the educational situation where he goes to school if you don't like that like that's a completely separate issue if you're saying hey maybe this is not the right environment for him to have high school then yeah there's options there whether it's homeschool or online school or a different school or a private school like there's a lot of options there but I don't want to confuse the two topics I definitely sure you know so that's a different that's a different thing what does he think about this Joe when you ask him about it.

[80] He's very opinionated, so he likes, he knows kind of the what we do and the velocity of what we do it and things like that.

[81] And he thinks things up, why am I here?

[82] Why am I going to school?

[83] This is dumb.

[84] If I'm just going to, you know, inherit the keys to the kingdom, like he doesn't say it like that, but he kind of has like a spoiled brat attitude towards it.

[85] So, like, Well, that's one reason to put pause on this whole whole thing.

[86] That's correct.

[87] Correct.

[88] I want to put them in military school and say, I'll see you in four years.

[89] You know what I mean?

[90] So then sometimes he's really pleasant.

[91] He's like, you know, I get it.

[92] I'm doing my best.

[93] And it's like it's...

[94] I feel like there's two issues we're talking about here.

[95] I feel like the first thing you called in was, you know, we need somebody to pick up the family business.

[96] Now's the time for him to get the training now.

[97] But I feel like now we've shifted into...

[98] He doesn't want to be at school.

[99] but I think he should be somewhere because he's kind of starting to show these spoiled tendencies.

[100] I think there's two separate issues that need to be worked on.

[101] One is he's in ninth grade.

[102] Figure out what the best school option is for him and what the best discipline is for him.

[103] And then as for the business, who's going to take on and carry that business on?

[104] That's a completely different conversation.

[105] And I can tell you it's not your ninth grader.

[106] And you've got to remind him, listen, if you're going to be a part of this, you've got to work twice as hard as everyone else.

[107] It's got your last name attached to it.

[108] That's how Dave sees this.

[109] and if he's got that entitlement, he's not going to be part of the business until he's emotionally ready.

[110] And we're talking about a 14 -year -old.

[111] He shouldn't be emotionally ready.

[112] Let him grow.

[113] Let him make the choice later on.

[114] This is The Ramsey Show.

[115] Hey, when you go against what society thinks is, quote, normal, like avoiding debt, for example, it might seem weird at first, and that is totally okay.

[116] We want you to be weird if that means doing things intentionally, including how you spend your health care dollars.

[117] And one way to be intentional is with Christian health care ministries.

[118] CHM isn't health insurance.

[119] They're a health cost -sharing ministry that's helped hundreds of thousands of families, like yours, take care of health care costs without sacrificing their freedom.

[120] Find out more and join at chmistries .org slash budget.

[121] That's chmistries .org slash budget.

[122] Welcome back to The Ramsey Show.

[123] I'm George Campbell, joined by Jade Warshaw.

[124] Open phones at trip.

[125] 8 -8 -25 -5 -2 -25.

[126] You jump in.

[127] We'll talk about your life and your money.

[128] Well, it's graduation season, and the grad in your life has now spent more than 4 ,300 hours in class.

[129] And the sad part is, I'm guessing nobody taught them how to handle money.

[130] That's unfortunate.

[131] So before you stick a crisp $100 bill inside that graduation card, why not giving the tools you wish someone had given you?

[132] And we've got you covered in the Ramsey store.

[133] We get gifts for teaching a grad about money.

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[135] It's helped more than 10 million people get out of debt and build wealth.

[136] And yours truly, my book, Breaking Free from Broke, a number one bestseller exposes all the money myths and traps that those grads are about to experience.

[137] It'll help them avoid that and build wealth in spite of all of it.

[138] And if they're looking to help on their job search, Ken Coleman's got a brand new book called Find the Work You're Wired to Do, which includes his get clear career assessment.

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[141] Ramsey's solutions.

[142] dot com slash store is your one -stop shop.

[143] Andrew's up next in Toledo, Ohio.

[144] Andrew, welcome to the show.

[145] Thank you very much for taking my call.

[146] So I'm going through a major life change, going through a separation.

[147] And once everything is said and done, I'm only going to have a car payment.

[148] And once the proceeds of everything are separated, I'm going to have.

[149] have a significant amount of money.

[150] It's not, you know, like millions, but upwards of 80 ,000.

[151] And I'm just curious how I can best set myself up for the future.

[152] Wow.

[153] How recent was this?

[154] That I've been put in within the last two months.

[155] Wow.

[156] Is it finalized or is still processing?

[157] It is processing.

[158] The paperwork has been signed just waiting to go in front of the judge.

[159] Okay.

[160] So you'll get 80K out of this, but you'll have the car and the car payment.

[161] What's, what's going to be your living situation?

[162] So I'm going to be moving in with my father temporarily.

[163] Okay.

[164] And then until you find, until you kind of get your footing and find where you want to live?

[165] Yeah, I'm just not trying to make any rash decisions and, you know, like rush out and buy a house or going to get an apartment to rent.

[166] I don't want to rent anything because that's like throwing your money away.

[167] We can talk about that.

[168] How old are you?

[169] jinks you'll make a 36 okay well you're restarting your new life new chapter it's a clean slate and part of that clean slate means we're going to become debt free and stay debt free for the rest of our life so that's the good news what's left on the car was so I had to refinance it out of her name so that she could get pre -approved for a house and I think it's it's under 12 ,000 okay and what's your income So my income last year was about 46 before deductions.

[170] My income is inconsistent.

[171] I'm a real estate agent.

[172] Got it.

[173] Okay.

[174] Okay.

[175] Well, you're going to be able to easily pay off that car loan as soon as you get the 80K cleared, and it's still going to leave you with 68?

[176] Yeah.

[177] So that's going to become your fully funded emergency fund, which right now you don't have a lot of expenses, but you soon will as you step out and begin to rent.

[178] So I would put away six months of expenses, and then the rest becomes maybe your new home -down payment fund.

[179] Okay.

[180] And begin stacking money on top of that.

[181] You can store it in a high -yield savings account.

[182] It'll grow at about four or five plus percent right now and just diligently put money away.

[183] You've got very little living expenses living with your dad.

[184] And so I would take advantage of this season as sort of a temporary launch pad for you, but I would not have it become a hammock where you get too comfortable.

[185] and you're like, well, it's nice not having bills.

[186] I want you to get back out there because you need to get your mojo back after getting knocked out like this.

[187] Are there children?

[188] Yes, there are two children.

[189] Okay.

[190] What's the custody situation?

[191] So it'll be shared.

[192] Okay.

[193] And is there child support, alimony?

[194] Well, no. There's none of that as long as everything is approved by the judge.

[195] Okay.

[196] So does that mean that you and her, have just decided that you're both kicking in or what does that mean well i'm sorry what do you mean by that like have you guys decided your own method for splitting the the cost that it's going to take to raise these kids or what does that mean specifically yes so so we've gone the route of disillusion rather than divorce um it's just not as common for people to know what a disillusion is basically um we've decided we've we've come to our own terms on everything and it just has to be approved by the judge.

[197] Got it.

[198] Got it.

[199] Got it.

[200] Okay.

[201] Yeah.

[202] You know, for me, I think with the with the kids, I don't know their ages, I'd probably, I like your idea of kind of getting somewhere and getting your bearings, but I'd be, I'd definitely be looking towards figuring out a place that's yours that the kids can get used to and kind of creating some normalcy in this situation.

[203] Some stability.

[204] Some stability, um, sooner than later, I would say.

[205] Okay.

[206] Are the kids going to stay with you half the time?

[207] Yeah, yes.

[208] So it'll be a 50 -50 week -on, week off.

[209] And right now it would be staying at Grandpa's?

[210] Yes, when they're with me, yes.

[211] My father does have a very decent -sized home, so the kids will have their own space.

[212] I mean, we're all going to have our own rooms.

[213] Okay, that's good.

[214] That's good.

[215] Yeah, so it's, I mean, it's temporary.

[216] My daughter is a little bit older.

[217] she is probably primarily going to stay with her mother because of where she intends to go to school.

[218] She's doing college classes.

[219] Okay.

[220] So she's kind of just going to come and go as she pleases.

[221] We've already had that conversation.

[222] It'll mostly just be my son.

[223] Okay.

[224] Well, the other piece to think about here is how can we increase your income in order to be able to afford rent with multiple bedrooms and all of that?

[225] And so that would be my next step as a real estate agent go, what do I need to do to get some more clients, even in this market?

[226] do I need a side hustle right now to supplement until, you know, things pick back up.

[227] So that would be my next step as you knock out the debt and begin to save up for the down payment.

[228] And begin having those conversations about how you guys are planning to help out with college as those things come on the forefront.

[229] Don't let any assumptions happen.

[230] Yeah, make those expectations clear.

[231] J .C. is up next in New York City.

[232] What's going on, J .C.?

[233] Hey, Jane and George.

[234] Thank you for taking my call.

[235] Sure.

[236] My wife and I actually yesterday finished.

[237] baby step to 13 months we paid off over $144 ,000.

[238] Way to go.

[239] Amazing.

[240] I just raised the roof on your behalf.

[241] You're just fully raised now.

[242] Thank you very much.

[243] I couldn't reach the roof, but I would have if I could have.

[244] Yeah, she brought a book home 13 and a half months ago.

[245] I picked it up, read it, and I said, we're doing this.

[246] Let's go.

[247] Proud of you guys.

[248] Yeah.

[249] Thank you.

[250] My question is this.

[251] We'll have a fully funded emergency fund by October 1st.

[252] We want to do six months.

[253] at that point, we understand it's 15 % of baby step four of our total combined household income.

[254] Where I have a little bit of confusion is, should I be factoring, because I also do like an HSA and stuff, should that be part of the 15 % or should that be separate?

[255] I wouldn't start with the HSA.

[256] I would, with the 15%, first of all, I do it off your gross numbers.

[257] And I would start with whatever employee -based plan you have, so whether it's a 401K or a 403B, if you have a match there, I would start with the match.

[258] And if you don't have a match, then I would just start with you opening up a Roth IRA, you and your wife.

[259] And I would fill those first.

[260] I think you can do, is it $7 ,000, $7 ,500?

[261] $7 ,000 this year.

[262] And I would start with that.

[263] If there's still money to go, then you could go back to the 401k or 403B or whatever it is that you have.

[264] What do you have?

[265] Well, we have both, well, she has a 401k that's sitting dormant right now from an old employer.

[266] So now she has a new employer.

[267] She'll be eligible for a 403B.

[268] and I have a 401k through my employer.

[269] I just don't think that will be eligible for the Roth.

[270] So I guess that would be my next question.

[271] You can do a backdoor Roth if you're a high -income earner, which sounds like you are.

[272] Do you have a Roth 401K option and a Roth 403B option?

[273] The 401K I can say yes for sure.

[274] I'm not sure about her 403B.

[275] Well, I'd start with the Roth 401k option and you're probably going to be able to do up to the max 23 ,000.

[276] I'd start there.

[277] And then if she has a Roth option, I'd go there.

[278] And then like George said, if there's still money to be had since you're on the backdoor status, then you can move over to that backdoor Roth IRA and make sure that she's doing a direct transfer rollover for that old 401K.

[279] Yeah, don't let it sit there.

[280] We want her to have full control and the Roth IRA will give her a lot of options or a traditional IRA depending on what those funds are sitting in.

[281] You don't want to do it.

[282] Fantastic.

[283] You don't want to transfer it to a Roth account if it's not because you'll have a tax burden there and you only do that once you're in Baby Step 7, which I believe you guys are on the track.

[284] to be there real soon.

[285] Yeah.

[286] You're doing a great, great job.

[287] Get in touch with a smart vester pro.

[288] Ramsey Solutions .com.

[289] They can help, you know, handle all the logistics of this process and get you squared away and get you confident about the future.

[290] This is The Ramsey Show.

[291] I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable.

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

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

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

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

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

[297] Like, it's just, it is, it's terrible.

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

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

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

[301] It doesn't cost much.

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

[303] You've got to say it out loud.

[304] and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place, the cost of stinking pizza.

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

[306] That's 800 -356 -4282, or go to zander .com.

[307] This is The Ramsey Show.

[308] I'm George Campbell, joined by Jade Warshall.

[309] Open phones at AAA 825 -5 -2 -2 -5.

[310] Jade, you sent us this article that it piqued my interest, and I think the listeners can learn something from it.

[311] So would you regale us the tale?

[312] Yeah, it all started.

[313] I did a media deal on that show on Fox, the bottom line.

[314] Yeah.

[315] And so it kind of came as a result of this.

[316] It's this Wall Street Journal, I believe, saying Gen Z sinks deeper in debt.

[317] And it's all about how Gen Z is facing kind of this debt to income ratio, rent to income ratio.

[318] And, you know, we hear the frustrations that people are facing all the time with what they're earning versus what their lifestyle.

[319] needs, you know what I mean, the needs of their lifestyle.

[320] And so I thought this was interesting.

[321] It says the median annual wage for recent college grads was 60 ,000 in 2023.

[322] And at the same time, rent, which typically takes up less than one third of the average workers' monthly paycheck has actually soared.

[323] And so they give the numbers here.

[324] They say the median rent in the U .S. was about $1987 as of January, which is a 22 % increase over the past four years.

[325] And so as a result, Gen Z is saying, listen, our wages aren't keeping up with what the rent is and it's becoming too great of a percentage of our take -home pay.

[326] And so as a result, we're seeing people, as always, George, whenever there's that strain, people go to credit cards and they go to debt to fill the gap.

[327] And so I thought it was interesting.

[328] As I was reading it, sometimes you read numbers and they just kind of float around in your head.

[329] And I was like, let me just run these numbers out a little bit.

[330] And let me see what this actually looks like.

[331] Because the fact is, even if you're not a recent grad, even if you're not a Gen Z, but if you're out there, you're making around 60k and you're renting, this kind of does apply to you because you're feeling that strain and you're feeling that stress on your budget.

[332] So let's see how these numbers shake out.

[333] So if you are making $60 ,000 a year, the median rent is $1 ,928.

[334] That person, that rent is far, it far exceeds that that range that we're looking for.

[335] Usually your rent would be about a third of your take home pay, which is a little on the steep side.

[336] That's why people want to own houses.

[337] We recommend a quarter of your take home pay.

[338] Yeah, especially.

[339] if you're going to own a house.

[340] And so if you want to at least get to where it's a third, that person would need to take home around $5 ,961 per month.

[341] So about $6 grand a month.

[342] That's right.

[343] To $72 grand a year.

[344] Meaning, well, meaning they would need to take home about $84 ,000 to $85 ,000 a year.

[345] So that's a $25 ,000 increase in order to get this rent where it needs to be in their budget.

[346] And so when you look at that, okay, $25 ,000, it sounds like a lot, but then you go, okay, that's about $2 ,000 a month, right?

[347] So my thought here is we're kind of the sidehust.

[348] This is like the side hustle generation until they get to the point where their core income gets higher.

[349] I mean, the point is you're going to have to side hustle.

[350] Like you can't supplement your lifestyle, $2 ,000 a month, $500 a month, whatever it is on credit cards to make this happen.

[351] So what I want to say is the problem is real.

[352] Like no one's going to sit here and say it's not a problem.

[353] you know you're just you're just not doing this or you're just not doing that like that's that's it's it's a moot point at that point like this is a real problem and it's frustrating when you get out of college it's frustrating at any point when you're doing your job you're going to work every single day and something as basic as your rent or where you live is taking up that big of a percentage of your take home pay and so I get it like there's a lot of frustration around that but what I really want to say is we can't make the solution debt.

[354] Like the moment you make the solution debt, it takes it from being very inconvenient to just really crisis mode.

[355] And it takes it to robbing you of what your future can be.

[356] And so we've got to look at this and say, okay, how can we back this back out?

[357] And it really is with side hustles.

[358] It's finding ways to supplement your income.

[359] Maybe it's you taking on a roommate for a period of time until you can get that income where it needs to be.

[360] But this is, you know, when you look at the numbers, George, I think sitting where we're sitting, it's important to be able to look at numbers and say, okay, this is what people are really facing.

[361] They're facing $2 ,000 deficits, $1 ,500 deficits, $700 deficits.

[362] But the good news is there's a lot of side hustles that can help make up that kind of cash.

[363] Yes.

[364] And I know it's not fun.

[365] They're going, we shouldn't have to work three jobs to make a living.

[366] And I'm going, listen, when I was 22 and I was a college graduate, this was my life.

[367] You know, it was side hustles, getting out of debt.

[368] I had roommates up until I was married.

[369] And I think a lot of young people have a picture of what their life was going to be after college.

[370] Yes.

[371] And it was going to be, I want to live where I want to live, do whatever I want to do.

[372] And they didn't realize what life would look like.

[373] And yes, inflation has exacerbated the problem here, but you might need to get some roommates.

[374] Absolutely.

[375] You can't get your own flat in the best part of town.

[376] And the median means middle.

[377] Middle.

[378] That's right.

[379] That means half of the rent in America is less than that.

[380] And half is more than that.

[381] And so you don't have to go, well, my rent is, you know, here's an example.

[382] This girl is 26 in Salt Lake City.

[383] Her rent a little over a year ago for a one bedroom was a thousand.

[384] Since then it's gone up by $200 and that puts a dent.

[385] She makes $30 ,000.

[386] She's got to get that income up.

[387] It's not rent us the problem.

[388] Like, we can find a way to make you $2 ,400.

[389] But getting your income up is really the key here.

[390] That's true.

[391] But I mean, for me, it's society's going to put an option out there as the solution.

[392] And we've really got to beware because I think when you do find yourself in a situation financially, that's not, you know, what you want.

[393] To your point, George, where it's rent is high or there's inflation or their student loans, whatever that thing is, society is going to say, oh, we have the solution for you, and it's almost always some sort of debt product, right?

[394] What's the most marketed product in history?

[395] That's right.

[396] And so in 2021, credit card companies loosened the qualifications for who could get credit cards, and more people opened new accounts.

[397] And so Gen Z members opened new credit card lines at a faster rate than other generations during the pandemic.

[398] And so that's why I think the message that we're putting out here, George, is really, really important because we don't want to give you a band -aid like debt is debt doesn't stop the bleeding it's just an old uh walmart brand band -aid that you put on for a moment and but it really doesn't heal you it really doesn't stop the bleeding it's just a quick fix and we want you to have a fix we don't want you to go into debt we don't want you to make the problem worse we're saying hey sacrifice for a little while whether that's you know side hustling whether it's living in a cheaper part of town whether it's finding a different place altogether, but definitely do not look to debt because that's just, it's robbing you of your future because you're going to get into more payments.

[399] And then buy now, pay later becomes your solution, quote unquote.

[400] And the credit card companies are always marketing to you as, hey, we're going to give you financial freedom and breathing room.

[401] They're using the same language we do, but they're selling you a chains.

[402] That's what they're really giving you.

[403] Yeah.

[404] Because hey, here's some handcuffs that will temporarily make you feel a little bit better.

[405] And that's the thing.

[406] That's honestly, George, that's what you have to take away from this.

[407] Any company that's really benefiting from your bondage, benefiting from you being in debt, benefiting from you taking on more of that, they're not going to help you find freedom.

[408] And we're interested in helping you guys find freedom.

[409] And we're telling you, it is not by signing up for a new credit card.

[410] It is not by taking out personal loans.

[411] It is by you doing the hard work and doing some sacrifice on the front end.

[412] It's just there's, you can't get around it.

[413] I remember when my husband and I had roommates.

[414] We were married and we had roommates.

[415] I mean, because you needed the extra the money.

[416] Yeah.

[417] The rent was the rent was $1 ,200 and let's see, we each paid $6 .50 was something like that.

[418] And it saved a $650.

[419] It was temporary, but hey, you do what you got to do.

[420] That's a side hustle on its own right.

[421] And that's why I wrote the book Breaking Free from Broke was to help people understand all of these traps out there, show them a different way, regardless of what's happening with inflation in the economy and who's going to be president in November.

[422] It was all so exhausting because none of it led to solutions or freedom.

[423] It just led to wallowing and pity parties and complaining on social media.

[424] You can't let a good reason become a bad excuse.

[425] And that's what we want to get to.

[426] Listen, there are good reasons out there.

[427] Like the reason is inflation.

[428] The reason is rent prices.

[429] The reason is wages are not keeping up with inflation.

[430] Those are all very valid reasons.

[431] And I don't want to go on the record as saying they're not.

[432] But the moment you let it become a bad excuse for you to go into debt is when things go off the rails.

[433] Amen.

[434] Well, we built a free tool to help people find a great side hustle for them.

[435] You can go to ramsysolutions .com slash side hustle and this is a tool that I help build that really helps people figure out how much time do I have, what's my target, what are my talents, what makes sense for me?

[436] Because everyone goes, yeah, do a side hustle, but what's the right one?

[437] What's the best one for my time?

[438] And so this tool has been helping people figure that out with a really quick free quiz.

[439] So ramsysolutions .com slash side hustle is the place to go.

[440] Tell them a little more about that because when I saw this quiz for the first, time.

[441] A lot of people think I don't have time for a side hustle or, you know, my skill set, I don't have the right skills for side hustles.

[442] But the way this does it is really great.

[443] It talks about your time.

[444] It talks about your skill set.

[445] And it...

[446] We have different kind of in the back end.

[447] There's quadrants.

[448] You have low skill, high time.

[449] Do you have high skill, low time?

[450] Do you have a mix of both?

[451] And what's fun is that most people said, no, I actually have some skills and I actually have some time.

[452] Love that.

[453] Listen, you got time.

[454] You're watching the show.

[455] You're scrolling social media.

[456] Don't tell me you have time.

[457] Tell me you won't make the time.

[458] but it's worth it and it might be for a season this is not your life forever gen z millennial gen x boom whatever it will get better it will get better make it better but you've got to be a part of that you have agency this is the ramsie show this show is sponsored by better help hey good folks the back to school madness is upon us it's hitting us right now we got travel and work and all these forms to fill out now and sports to travel to and on and on 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.

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

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

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

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

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

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

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

[466] BetterHelp is 100 % online therapy staffed with licensed therapists.

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

[468] 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.

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

[470] Never skip therapy day.

[471] Call my friends at BetterHelp.

[472] Visit BetterHelp .com slash Deloney today for 10 % off your first month.

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

[474] Welcome back to The Ramsey Show.

[475] I'm George Campbell, joined by Jade Warshaw.

[476] If you're enjoying the show today or any other day for that matter, do us a quick favor and hit the subscribe button, hit the follow.

[477] button, leave a comment, leave a review, share it with a friend.

[478] All of that is the best marketing plan we have.

[479] And you guys are so good at it naturally, but it's helpful to remind you to do it because you may not have taken the time to actually hit those buttons and share it with a friend.

[480] And it could, who knows, it could affect someone else's life and help create a ripple effect from the show.

[481] So thank you for doing that.

[482] Andrew is up next in Portland, Maine.

[483] What's going on, Andrew?

[484] Good afternoon.

[485] Thanks for having me. Sure.

[486] How can we help?

[487] So we, my wife and I have accured some points from a credit card that we have.

[488] And really, I'm just curious on your opinion if we should use those for vacation, probably this fall, take our kids on vacation, as we're just working through and through that debt at the same time.

[489] Oh, how much debt do you have?

[490] So between, on the credit cards, we have 64 ,000, and then you've got the two cars.

[491] that's about $44 ,000, and then the mortgage as well.

[492] What's your household income?

[493] $122 ,000, or $120 ,000, I'm sorry.

[494] Ooh, that's a lot of, that's not really a vacation.

[495] I feel like it's hard to vacate when you have that kind of debt tied around your body, right?

[496] And you're going into debt in order to make it happen?

[497] Well, so we already have the points accrued, so we've got like $3 ,300.

[498] dollars worth of gift cards so it probably cost us $2 ,000 to $3 ,000 no it costs you $64 ,000 you said you have $64 ,000 of credit card debt at 22 % APR yeah so the points are the problem they're not the solution to anything and so I would clear the debt and you can after you become debt free you still got some points use it to celebrate but you're going to do with cash and right now you guys are broke regardless of the points you're still going to have to come out of pocket for something you're not going to be able to gift card your way to a totally paid for vacation.

[499] And you're better spent using that vacation time to be doing side hustles to get the income up even more.

[500] Because you are about in debt as much as you make an income.

[501] Why are you guys spending so much on these cards and not paying it off?

[502] Because the truth is, George, plenty of people argue with us and say, oh, I use my credit cards for the points, but I pay it off every month.

[503] And you're a really great example of somebody who's not paying it off every month.

[504] So what's happening that you're putting $64 ,000 worth of debt on a credit card?

[505] Yeah, that's a great question.

[506] So we relocated about five years ago, and before we knew, that was exactly what we did.

[507] But with that relocation, we started to just be foolish and lived outside of our means.

[508] And I wasn't making, or we weren't making the amount of money that we are now.

[509] I just took a new opportunity in our income went up by 40 ,000 annually.

[510] So, and along with that is kind of what has really got me bought in.

[511] and my wife bought in.

[512] We talked a couple weeks ago, and she's really bought in with it, but she's kind of hung up on this vacation because our kids are young, and she wants to take advantage of that.

[513] So that's kind of what I'm trying to navigate through.

[514] Okay, I get it.

[515] I think in her mind, it's like, listen, we have this free money sitting here.

[516] Why not use it?

[517] And then we can tackle these credit cards.

[518] I'm just worried that, to George's point, how many is your new family?

[519] Family of four?

[520] Yes.

[521] Yeah, family of four is it's going to cost more.

[522] and I don't think that the mentality is there.

[523] I think that if you continue to say, well, we're going to use these credit cards for this benefit and she's still viewing it as some sort of a benefit in her mind, the mentality is not there to do what it takes to clear this debt.

[524] And that's where my red flag goes off.

[525] Right.

[526] So we've got $5 ,000 or so in savings, so more than just the emergency fund.

[527] And I could just put that obviously on the credit cards that kind of kept it there with us.

[528] in the back of my mind.

[529] Okay.

[530] With knowing that she wants to do this.

[531] How bought in are you guys?

[532] Are you like, are you ready to like sell the cars level?

[533] I don't think we're quite there.

[534] I drive a lot for my job.

[535] So I'm not sure I'm ready to get a beater of any.

[536] You know what that means?

[537] If you drive a lot for your job, it means your car is depreciating faster than the average person, which means you are going to be upside down on this car if you're not already.

[538] That's true.

[539] Hey, before we get too far into the cards, you said you had the $3 ,300 on gift cards.

[540] Is that what I heard you say?

[541] Yeah.

[542] You can redeem it for gift cards.

[543] They're already gift cards.

[544] They're already redeemed.

[545] What kind of gift cards are they?

[546] They're for Disney.

[547] Oh, you redeemed them for Disney gift cards.

[548] Well, ain't that?

[549] Here's my thing.

[550] I think we hang on to the gift cards.

[551] They're not going to lose value over time.

[552] Let's wait till we're debt -free and we'll do a Disney celebration and these gift cards will help pay for it.

[553] but not until we are completely debt -free.

[554] So break down these cars.

[555] You said $44 ,000 in cars.

[556] What's yours and what's your wife's?

[557] So I drive a deep Cherokee.

[558] It's a 2021 Jeep Cherokee.

[559] And then my wife drives a 2019 Chrysler -Pacifica.

[560] And what's the debt on your 2021?

[561] $23 ,000.

[562] Okay, so it's about equally split.

[563] Are these, the credit cards, are they split amongst a bunch of cards?

[564] Yes.

[565] Okay.

[566] here's my rule.

[567] Here's my rule where it comes to these cars.

[568] And I don't think you're going to be able to do it.

[569] So I think one of them is going to get sold.

[570] If you can't pay it off in two years or less, then it's out.

[571] Right.

[572] And so you're making $122 ,000.

[573] I'm guessing your wife staying home with the kids.

[574] Well, that's combined with her.

[575] She works part -time.

[576] She brings in less than 10.

[577] Okay.

[578] And is that because she's staying home with kids?

[579] Right.

[580] Okay.

[581] Is there not to pay for child care?

[582] Right.

[583] Is there a child care?

[584] Right.

[585] Is there a a way that she can make more part -time?

[586] Do you think?

[587] I don't think so.

[588] She takes up as much as she can for extra shifts, but without having to add in child care, we don't have any family nearby.

[589] They could pick the kids up from school, so adding in the cost of child care.

[590] I hear you.

[591] We've really looked at that, but it wouldn't work.

[592] If I were you, if you're not yet upside down in one of these vehicles, if I were you, I might get rid of one of these vehicles and take 4 ,000 of your saved money and put a little money with it and get you an $8 ,000 car that she can drive the whatever, whoever wants to drive it, I don't really care.

[593] But I clear one of these out now.

[594] That's what I would do to knock this down, especially since you don't see your income going up anytime soon.

[595] And that clears out, you know, $20 ,000 of this.

[596] And then I'm going to get busy on these credit cards.

[597] What's the smallest one?

[598] it's 9 ,000 yeah that's where we're starting we're listing them in order from smallest to largest we're paying minimum payments on everything so you don't have debt collectors and whatnot and then all the extra money you got to put it out the smallest debt and I know you said it doesn't it's not possible but I really want you guys to sit down and and truly truly get sober and somber about this and say okay what do we have to do is there truly no other time is there truly no other way that we can be earning money because I I think if you stretch, there's some money that can come in somewhere.

[599] But I can tell you this, it's not going to be comfortable.

[600] So the other aspect that I haven't shared yet, but I don't know really about it yet because I just started this new opportunity, but I'll bonus twice a year.

[601] Okay, good.

[602] And it could be 18 ,000 twice a year.

[603] Great.

[604] So kind of in the back of my mind, I was thinking that I'll use that and pay off one of the cards as quick as possible or put it on the debt of the credit cards, one or the other.

[605] When you say could, is this like an 80 % thing, like a 90 % thing or like a 20 % chance?

[606] I will.

[607] That's where it's going to go.

[608] I just don't know which is the right one to do if I put it on the cards or if I put it on the smallest balance and when it's knocked out, you attack the next smallest balance.

[609] And I making minimums on the rest.

[610] If I were you, I wouldn't let those bonuses keep me from selling one of these vehicles.

[611] I would still do that because I want you out of this debt as quickly as possible.

[612] You got 108 ,000 in debt.

[613] You make $120, and here's the deal.

[614] The context for what Jade's saying is, on average.

[615] average, it takes people about 18 to 24 months to pay off the debt.

[616] So it's going to take massively longer than that.

[617] We need to make a deeper sacrifice, which may include selling the car.

[618] So for you, that's, we've got to put 55K a year onto the debt.

[619] That looks suspiciously like a little over 4 ,500 a month.

[620] And if you can't find 4 ,500 a month in your budget, we need to sell something.

[621] We need to increase income, cut the expenses in order to get rid of this debt in two years.

[622] Yeah, our monthly expense is not factoring in anything extra like clothes for the kids.

[623] Just the base expenses is just over 6 ,000.

[624] Is this because of your mortgage?

[625] You must have a massive mortgage.

[626] Yeah, what's the mortgage payment?

[627] The mortgage is, it's 2 ,100.

[628] Okay, and what's your take -home pay every month?

[629] So like I said, I just started this opportunity, so I've literally gotten half of a paycheck so far.

[630] What is it?

[631] What will a full paycheck be?

[632] Full paycheck should be 4 ,200, five -weekly.

[633] Ooh, lardy, lardy.

[634] Okay, that's good.

[635] That's twice a week, so twice a month.

[636] So it'll be about $8 ,000.

[637] Then you're okay.

[638] So pause all investing.

[639] If you're getting a refund every year, you need to change your withholdings.

[640] We need to find any money we can in the proverbial couch cushions to get out of debt fast.

[641] That's the only way out of this.

[642] Cut up the cards, never look back.

[643] That puts this hour of The Ramsey Show in the books.

[644] Thank you to Jade Warshaw, all the folks in the booth, and you, America will be back before you know it.

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

[646] I'm George Camel, joined by Jade Warshaw.

[647] It's your show, America, so call us up at AAA 825 -5 -2 -2 -25, and we will give you our opinion about your situation, and that's about what it's worth.

[648] It's our two cents.

[649] Two cents, if that.

[650] That's the price of admission.

[651] That there it is.

[652] Phil joins us up first in Reading, Pennsylvania.

[653] What's happening, Phil?

[654] Hi, guys, thanks so much for having me. Sure.

[655] What's going on?

[656] I, um, I have a pretty good problem.

[657] My wife and I and our three daughters, we are saving for their college.

[658] They're 8, 6, and 4, and we've started their 529 accounts as soon as they got a Social Security number.

[659] Amazing.

[660] We agree that we should eventually tell them that they have these accounts.

[661] We're just not sure when it's appropriate or when it would be wise to tell them, and if it's ever a good idea to tell them how much is in the account.

[662] Oh, man. I think it's a great idea to let kids know that we're planning for your education.

[663] And the expectation is that you are going to continue your education in some form of fashion.

[664] I think it's great to start sharing that.

[665] Honestly, as early as it makes sense without being weird.

[666] My guess is middle school, high school is when they start even thinking about that.

[667] So I don't think there's a need to tell a four -year -old, hey, buddy, there's $100 ,000 in your $529 plan.

[668] You know, they might be like, whoa, that's a lot of money, but there's just not as much context as to why it matters.

[669] And it's not like you're going to give them a trust fund that they're going to go blow in Vegas here.

[670] That's right.

[671] You know, this is a 529 account.

[672] It's to be used for education only.

[673] So I don't think they're going to lose their minds and become entitled brats, but I think it helps when deciding about college, hey, here's our plan, mom and dad really prepared, and here's your part of the plan.

[674] You're going to work your tail off.

[675] You're going to get scholarships.

[676] You know, if we don't have to use all this money, even better.

[677] We're able to roll that over to a, you know, we're retirement account or leave it to grandkids and other people in the family.

[678] And so I think you have that honest conversation with them as they mature into, you know, probably early high school.

[679] And I would, I would take it a step further to and letting them know.

[680] I don't think it's wrong for them to know the amount at the right age to say, let's say, uh, for the eight year old, there's, I don't know, $70 ,000 in the account by the time she's ready to go on to further education to kind of say, hey, this is the, this is the budget.

[681] And it doesn't go beyond this.

[682] And the only way it goes beyond this is if you decide that you're kicking in some cash because we're not doing student loan debt.

[683] So I think that the 529, obviously, the point of it is to save up, but it also creates an opportunity to open up these lines of communication to where you are speaking about the things in the expectations around college that a lot of people, frankly, they don't have those conversations.

[684] Parents just kind of, it's like, you know, junior year, it's like, all right, pick your school.

[685] And that's it.

[686] And that's how we have all this student loan debt.

[687] And then we'll figure out the rest later.

[688] And figure it out means taking out a whole bunch of loans and parent plus loans and delaying their future.

[689] So to me, I'm already convinced that you're going to send these kids to college debt free.

[690] And so I'm not worried about that.

[691] You've done a great job, Phil.

[692] I think as they get into high school, you start having the conversation and saying, hey, you're going to finish college in four years.

[693] That's what Dave said to all the Ramsey kids going, here's the deal.

[694] I'm going to pay for college, but here's the budget, here's the limit.

[695] You're going to go to an in -state school and you're going to finish in four years.

[696] And if you do it that way, I will pay for it.

[697] and have them watch Borrowed Future and go, here's what it could have looked like if mom and dad didn't prepare, if we just chose whatever famous school because of the football team.

[698] Here's what our life could look like.

[699] So I hope that helps kind of start these conversations, but you're definitely early on the game in the best way.

[700] Yeah, for sure.

[701] And we were really just, like you guys said, you know, they are going to start to hear about college, middle school, high school.

[702] Their friends are going to start talking about it.

[703] The teachers start to talk about it.

[704] And we figured, you know, one less thing to stress over, you know, figuring out how to get there.

[705] My wife and I both worked our way to get through college, and we feel blessed to be able to offer this for our daughters.

[706] But we just figured one less thing to worry about.

[707] Yeah.

[708] You know, one thing that I like, and this is kind of an approach that my husband and I are trying to take is, I want to be the authority on all conversations for my kids.

[709] I want them to hear about the things from the first time from us.

[710] So the first person you're going to hear talking about school and college is me and Papa, right?

[711] Not from the guidance counselor.

[712] And that goes on a lot of other issues, by the way, as well.

[713] But if you guys, you want to be the authority when it comes to how to pay for college, how to handle your money, how to do, and the way you do that is you're the first person that they ever hear talking about it.

[714] And so I think that that's, um, uh, an advantage that you guys have in this situation to that they're looking to you for advice, not anybody else as the foreword.

[715] Yeah, you guys are doing a great job.

[716] And you show them that, hey, money comes from work, you can give, save spend, teach those lessons early on.

[717] When they get to college, it's not going to be a whiny entitled.

[718] I just want to go where I want to go, regardless of the bill.

[719] Or my guidance counselor said there were student loan options for me. Oh, my goodness.

[720] Yeah.

[721] And that's a bunch of financial aid in the form of loans.

[722] No, thank you.

[723] All right.

[724] Jessica is in Miami up next.

[725] What's happening, Jessica.

[726] Hi, Georgia Zaid.

[727] I'm so excited to be all with you guys.

[728] We're excited as well.

[729] What's your question today?

[730] Thank you for taking my question.

[731] So I was just looking for some guidance and some with them.

[732] It's kind of on the same vein as the last caller.

[733] Up to this point, my husband and I have been putting our kids' birthday and Christmas money into just a regular savings account.

[734] My oldest is not fixed.

[735] So should we be teaching spends they give with their Christmas and birthday money or should we just do that with any earned money like allowance or chores?

[736] I teach them with all the money because it is with all of your money.

[737] So I would just, if you're teaching it to them as a, just kind of as an umbrella way of thinking about money, then I think that it does apply to all of that.

[738] And obviously the ratios of it, you know, might differ depending on how much it is or what they've already done.

[739] But as long as they know there's three things that you can do with your money, you know, I think that's enough.

[740] And then would you recommend like a high -yield savings to, put that away or just a regular savings.

[741] It's fine.

[742] I mean, if it's no cost to you to do a high yield.

[743] Right.

[744] Yeah, it'll earn more interest.

[745] It's not going to be life -changing when they've got, you know, $100 in there, but it's a great principle to teach them that, you know, broke people pay interest, wealthy people earn it, and this is what it looks like to prepare for the future.

[746] How old are the kids?

[747] My oldest is six, and then my little one is he's four.

[748] That's fun.

[749] My kids are that age, too.

[750] So are they in the kindergarten phase?

[751] The six -year -old, Are they in elementary now?

[752] Yeah, my six -year -old is just finishing kindergarten.

[753] Okay.

[754] I'm going to make sure our team sends you a great blog from our friend Rachel Cruz called 15 ways to teach kids about money.

[755] And it goes through age -appropriate ways to teach kids, whether than preschool, kindergarten.

[756] So, you know, this starts with a clear jar for savings, setting an example with your own money habits, show them that stuff costs money.

[757] You know, if they're going to buy the toy, bring cash and have them actually hand over the cash to get the item.

[758] because when you get older you realize oh I just put my card in I got my car back and I got stuff and so that's a big thing opportunity cost as well if hey if you buy this video game you're not going to have money to spend on shoes and then on top of that commissions as they start doing chores give them commissions instead of allowance that's a big thing is you don't just get money for existing you get money for work and there's some things you do because you're part of the family you brush your teeth because that's what you do as a healthy person But, hey, if you help mom clean up the garage or clean up the leaves, you're going to get $5.

[759] Ooh, I'm going to add something to the list.

[760] Another one I'd add to the list is the idea of, in a moment, if you want to buy something, it'll be there a week from now, in two weeks from now.

[761] So it's like, hey, we're not going to buy that today.

[762] And then go back and show them a couple weeks later.

[763] Listen, it's still there.

[764] Like, you can buy it.

[765] You don't have to buy it in the moment every time.

[766] That's good.

[767] I love this.

[768] Teach you Mother Young.

[769] This is Preventative Medicine, America.

[770] And I'll make sure our team puts the blog 15 ways to teach.

[771] kids about money in the description and the show notes.

[772] If you want to read through that, it'll give you some great tips on how to teach your kids about money.

[773] And of course, check out Rachel and Dave's book, Smart Money, Smart Kids.

[774] This is The Ramsey Show.

[775] Welcome back to The Ramsey Show.

[776] I'm George Campbell, joined by Jade Warshaw.

[777] We've get electric crowd in the lobby today for our Total Money Makeover weekend event.

[778] They are happy to be here.

[779] They're enthused.

[780] This is a kind of live audience we've been missing out on, Jade.

[781] That's right.

[782] I could get used to this.

[783] This is wonderful.

[784] You guys want to come back next time, next week?

[785] We've got our event kicking off tonight up at the brand new Ramsey Event Center.

[786] It's going to be a good time, and we appreciate all of them traveling from all over the world to be here.

[787] Jordan is on the line in New York City.

[788] What's going on, Jordan?

[789] Hi, how are you guys?

[790] Doing well.

[791] How can we help?

[792] I just needed a little bit of financial guidance.

[793] I'm getting a settlement cost of around $75 ,000.

[794] dollars.

[795] Okay.

[796] And I'm not sure what to do with it.

[797] What was the settlement for?

[798] I was in a car accident.

[799] Was everything okay?

[800] Are you good and healthy at this point?

[801] After a couple years, yeah.

[802] For the most part, I'm good now.

[803] You're able to work?

[804] Yeah.

[805] So I currently got my real estate license on April 30th.

[806] So I just started that journey.

[807] Okay.

[808] How old are you?

[809] I'm 23.

[810] Okay.

[811] Are you working full -time outside of the real estate right now?

[812] No, sir.

[813] So you're doing real estate full -time?

[814] Yes, sir.

[815] Are you making any money yet?

[816] No. Not as if right now.

[817] That worries me. Where are you living?

[818] I live in A -side.

[819] Okay.

[820] Are you living alone with family?

[821] I live with my mother.

[822] So you have very little expenses?

[823] Yes, sir.

[824] Do you have any debt?

[825] Currently, I am paying off a car loan of $10 ,000 right now.

[826] Okay.

[827] But that's it.

[828] Nothing else?

[829] No, that's it.

[830] Okay.

[831] Do you have any money saved?

[832] I have about a couple thousand in my savings in my checking account, and I have about $7 ,200 invested in Google and Amazon.

[833] Okay, so that couple of thousand, is that like $2 ,000 or $6 ,000?

[834] How much is it?

[835] That's like like $1 ,500.

[836] Okay.

[837] When is the settlement going to hit your account?

[838] Well, my lawyer wanted to meet again in one month, so I think around a month.

[839] Okay.

[840] If I were in your shoes, I would, there's a couple of approaches I'd take here.

[841] When this money comes through, I would pay off the car.

[842] I'd get that car debt out of your life with, with the caveat that you're not going to borrow money for cars ever again.

[843] At this point, you're set up to buy cars and cash from this point forward.

[844] If I were you, I would also consider liquidating these single stocks because they're just not the investment that you want at this point in your career as an investor.

[845] That's later on down the line if you wanted to get into that.

[846] And I'd do a very small percentage in single stocks, but definitely not a starting spot.

[847] And then for me, I would be thinking about, okay, I've got this $65 ,000 left from the settlement.

[848] I've got $7 ,200 minus any taxes or whatever from these stocks.

[849] I've got another $1 ,500 saved.

[850] I'd move it into a high yield.

[851] I'd call that three to six months of expenses plus a little bit of savings towards a down payment or my first rent payment.

[852] whenever you get stable from this real estate.

[853] But I don't think you have the stability of a paycheck or a job that's bringing in regular income for you to move out at this point.

[854] And I think that that's the second thing that I'd be focused on.

[855] Were you working before this, Jordan?

[856] Yeah, I was a pharmacy technician for around four years.

[857] Okay.

[858] What were you making doing that?

[859] Around 32.

[860] Okay.

[861] My worry is that the real estate game right now could be tough to get into and actually see a paycheck from because it's commission based.

[862] And so I think you might need to get a part -time job right now or even a full -time job and do real estate on the side and start to build that up until you can kind of, instead of it being a leap, it becomes a step.

[863] Yeah, well, how did you get out of the pharmacy tech?

[864] Did you quit?

[865] Or did something else happen?

[866] Well, I, at one point, I joined a contracting agency to where they, you were contracted to return hospitals for certain times that needed help.

[867] And when my contract ended, I decided to step full in, full in to the real estate journey, I guess.

[868] Are you working for a broker right now?

[869] Yes.

[870] Which one?

[871] Keller William.

[872] So it's costing you money right now to be a real estate agent.

[873] You're losing money because of all the fees associated with this.

[874] You've got the NAR fees, you've got the Keller William fees, and you're not selling any houses.

[875] And so that's the part that worries me is from the settlement, I'm scared you're going to just drain this thing down to survive and live while hoping real estate takes off.

[876] What's a cost every month?

[877] 100.

[878] Okay, that's not bad.

[879] I agree with George 100%.

[880] I think that you need to go back to doing either pharmacy teching or whatever it was you were doing before.

[881] Either way, you need a full -time income and real estate is a hobby until it becomes something that's making you actual money.

[882] And as Ken would say, you kind of need to pull the boat closer to the dock before you make that leap.

[883] Otherwise, you're going to drown.

[884] Right.

[885] hope that helps Jordan I wish there was a we could just snap our fingers and make this pretty but it's going to be hard work real estate is no joke and right now the market's tough you're in a very intense market in the New York City area and so I would get a mentor in the space to go hey how do you get your feet wet here how do I actually make my first sale yeah because that's another thing is who's going to take the chance on on Jordan as a 23 year old first time real estate agent to go sure you can help me sell this $1 .5 million condo in New York City.

[886] That's a tough game to be in.

[887] And if I could just offer a little piece of, I'm going to say this because I think to be good at real estate, you got to be a people person and you got to be have a little bit of pizzazz, a little bit of razzle, dazzle, and I didn't feel that from my guy.

[888] I wasn't get my Riz, Jordan.

[889] I didn't get the razzle and I didn't get the dazzle.

[890] So that's one woman's opinion, but this is.

[891] No, that's a good point.

[892] Real estate, it takes a certain personality type.

[893] You kind of need to like the spotlight in order to do it.

[894] Good with your words, good at selling.

[895] And people get into real estate thinking, this is going to be, I'm going to own the job, I'm going to make great money.

[896] And you can eventually.

[897] Yes.

[898] But it can be a grind to get there.

[899] And it's not going to come to you.

[900] You have to go get it.

[901] Yes.

[902] You know, back a few years ago, a monkey could sell houses because they were flying off the shelves.

[903] Right now, you've got to be a real pro to do it.

[904] And so for that reason, Jordan, I would try to get as much.

[905] training as you can and get this thing off the ground while working full -time.

[906] That's right.

[907] So, all right.

[908] John is up next in Shreveport.

[909] John, we're up against the clock.

[910] Get right to your question.

[911] How can we help?

[912] Hey, my, thanks for making me dead free first.

[913] Woo, you did it.

[914] We didn't do nothing, but thank you.

[915] Yeah.

[916] Back in 2010, we went with the plan and got debt free.

[917] But my question is, my granddaughter is a senior in high school.

[918] She's leaving to go to Georgia Western University, and she's got a scholarship, but it doesn't meet all her needs.

[919] and she's going to have about a $20 ,000 a year gap in the scholarship and tuition.

[920] And I'm sitting here thinking, should I pay that or make her take out student loans?

[921] And I don't want to do that.

[922] Well, you're not making her do anything.

[923] If you're in a financial position to bless her in that way, that's something that my wife's grandparents did for her, and it was a huge blessing.

[924] And she didn't even realize it until she was out of college in the real world.

[925] Are you financially able to do that without affecting your own life?

[926] I am.

[927] Well, my wife passed a few years ago, but we're debt -free.

[928] I'll have just close to probably about a million dollars in liquid and real estate.

[929] Amazing.

[930] Yeah, I can afford it.

[931] So if you've got the cash to do it, it's not holding you back.

[932] I think that's a wonderful blessing.

[933] Or you could split it and say, hey, you work part -time and pay $500 and I'll pay the gap each month because studies do show that when students work part -time, they do better all around in school.

[934] She's got some skin in the game.

[935] She's going to go, I got to finish in four years.

[936] I got to actually go to class.

[937] And so I think it's...

[938] She's already got a full -time, well, we'll have a four -time job.

[939] Okay, good.

[940] Wonderful.

[941] We've got a good head on our shoulder.

[942] She's got an awesome grandpa.

[943] Man, I think that's one of the coolest ways you can live and give like no one else is start with your own family.

[944] Cause that generational change where she gets to graduate and go, because of my granddad's hard work, I was able to go to college dead free.

[945] And so that's a beautiful thing.

[946] Thanks for inspiring us all.

[947] and I would say, hold the trigger man, help I go to school debt -free if you can.

[948] This is The Ramsey Show.

[949] Welcome back to the Ramsey Show.

[950] I'm George Camel, joined by Jade Warshaw this hour.

[951] Phone lines are open at Triple 8 -825 -5 -2 -2.

[952] Well, don't call it a comeback, but the Live Like No One Else Cruise is back, Jade.

[953] It's happening March 22nd through the 29th of 2025.

[954] Join Dave and all of us Ramsey personalities for seven days at sea with a lot of special guests from magicians to musicians to comedians to, you know, celebrity chefs.

[955] It's going to be an amazing time.

[956] And let me call out that this cruise is for a specific portion of our audience.

[957] Who is that?

[958] Baby Step 4 and beyond, which means you have no consumer debt.

[959] You've got the emergency fund and you're ready to have some fun and celebrate.

[960] This is the ultimate debt -free celebration.

[961] I think we're going to try to set a world record for largest debt -free screen.

[962] I'm here for it.

[963] I'm here for it.

[964] I'm here for it.

[965] always want to be a part of a Guinness World Record.

[966] This is my chance.

[967] So we're going to take over the entire cruise ship.

[968] It's going to be all Ramsey fans.

[969] That's going to be intense.

[970] We're going to stop at some incredible spots, including Turks and Caco, St. Thomas, San Juan, the Bahamas.

[971] And VIP upgrades already sold out.

[972] Most of the suites are sold out.

[973] But we do have some amazing cabins still available, like ones with the Ocean View.

[974] You've got to get your deposit in now.

[975] That's what you're committing to.

[976] This thing will sell out because the first one sold out within weeks.

[977] And we launched this thing a few weeks ago.

[978] And it's happening less than a year from now, March 22nd through the 29th.

[979] Go ahead, budget for it, talk to your spouse, book your cabin.

[980] I did find out that you can bring your kids.

[981] Yes, I'm bringing my kids.

[982] Should I be saying that on the air?

[983] Uh -oh.

[984] I'm not bringing them.

[985] WarShaw kids are going to be running rampant.

[986] But someone said, hey, can I bring my teenager?

[987] And I asked the team, I said, yeah.

[988] Yeah.

[989] It's great.

[990] It's all your whole family, as long as y 'all are debt -free in Baby Step 4.

[991] Love it.

[992] So go book your cabin.

[993] Ramsey Solutions .com slash cruise.

[994] That's the place to go.

[995] Can't wait for that.

[996] CJ is up next in Atlanta, Georgia.

[997] What's going on, CJ?

[998] Good afternoon.

[999] How are you all?

[1000] Doing well.

[1001] Good, good.

[1002] My question is, me and my life are interested in purchasing a laundromat.

[1003] I'm just wondering, would it be better to do a seller financing route or would be better to take out an SBA loan?

[1004] Ooh, juicy conundrum here.

[1005] Well, this is, you're launching a business.

[1006] And if you're familiar with Dave's entree leadership book, the whole brand, we are big on launching and starting and running and growing your business completely debt -free, which tells me we're not ready to start this business.

[1007] Gotcha.

[1008] So what's this laundromat going to cost?

[1009] Approximately around $750 ,000, but we're still kind of shopping around and different deal.

[1010] That's just to get in?

[1011] That's the lowest entry point.

[1012] yes and no we're still kind of looking around but that was one of the starting prices that I had for one that I was kind of selected here in Atlanta but what made you go I'm going to buy a laundromat in Atlanta well we were just looking at businesses that obviously have that type of cash flow that we can kind of self -manage and just something just a starter for us to continue to develop income over the year so laundromat and or smaller car wash kind of tangled out when I hear 750 to start, that doesn't feel like what you just said, like a starter, like an entry level thing just for you to get in and manage.

[1013] That feels like something that is a huge undertaking to manage.

[1014] And honestly, financial output before you're able to earn it back because you're not profitable until you've paid back the $750 ,000.

[1015] What's the cash flow of this place?

[1016] that the cash flow is um about two fifty three hundred thousand dollars a year and revenue um after uh no top line i think is around 90 to 100 thousand no it's it's the bottom line would be the smaller number i'm sorry yeah i'm sorry yeah yes sir yeah 9200 000 um profit bottom line yes sir bottom line profit going to you not net profit yeah yeah and this would be your full -time job?

[1017] No, this would be something outside my full -time job.

[1018] Okay, what's your current household income?

[1019] Her house is $148 ,000.

[1020] Cool.

[1021] And how much, do you have any debt right now?

[1022] No, sir.

[1023] We are debt -free.

[1024] Wonderful.

[1025] If I were you, I would not forfeit your debt freedom.

[1026] In any case, I would not do this deal in debt, but especially you forfeiting debt freedom, because you guys have chosen that to be a value in your life.

[1027] And so this doesn't align with what you guys have said are your values.

[1028] If you clearly care about being debt free because you went through that journey.

[1029] If I were you, and obviously it looks like you're buying an existing business.

[1030] If I were you, I'd say, okay, if we just, we are on fire about clean clothes.

[1031] Like this is what gives us the juice, as Ken Coleman would say, then I would start looking at what does it look like for us to create a business from the ground up that we can move at the speed of cash to create.

[1032] And then that's going to be something that truly, you know, you're going to be able to get into the business that you want to get into it in the right way.

[1033] Does that make sense?

[1034] Gotcha.

[1035] Yeah.

[1036] That doesn't make sense.

[1037] Yes.

[1038] I know just for us, we're just to buy a vixing business just to kind of create more income change down the road.

[1039] So that's the main purpose, but now you understand.

[1040] If the goal is to create more income, I want you to understand that you can do that.

[1041] You don't have to buy something existing to create income.

[1042] You can create income tomorrow selling the things out of your garage.

[1043] I mean, if that's the goal.

[1044] So when you when you run it through that lens you go okay that that makes sense now if you're thinking that it'll be less work for me if i buy something that's existing and i can have you know quote make money while i sleep and it's not going to require anything because somebody else else got this up and running i would caution you on that because i don't care what business you do it takes work and effort and time and attention even if you do buy something that's existing so it's going to add a whole lot of risk to this and that's what we find with business owners that that do it with debt is they end up adding a whole bunch of risks of their life.

[1045] You're going to take out most of this with financing, with an interest rate, and then what happens if something goes wrong?

[1046] What happens when you want to move?

[1047] You don't really have the freedom you think when you owe three quarters of a million dollars in debt.

[1048] That's right.

[1049] That's tied to a physical location.

[1050] So I would caution you against this.

[1051] I know there's a lot of TikToks out there being like, oh, bro, it's so easy.

[1052] It's easy money.

[1053] And the reality is if you talk to anyone that actually runs a business, it takes years.

[1054] It's a grind.

[1055] And when you do it debt -free, at least it takes a whole layer of risk out of the picture.

[1056] And so...

[1057] And the truth is, when you operate a business with debt, my husband and nice business, we've always operated it at the speed of cash.

[1058] It's a debt -free business.

[1059] And I can't imagine having to make the decisions that we've had to make on a daily basis with the caveat of debt, right?

[1060] Because then you're going, well, I've got to make this because I've got these bills coming in and I've got to make this.

[1061] Like, it creates a level of franticness around your decisions that I wouldn't want there.

[1062] We can make decisions purely from the place of profit.

[1063] Wow, that was really a purely from the place of profit.

[1064] That was a lot.

[1065] But you see what I'm saying here is debt changes the way that you make decisions.

[1066] It changes your heart rate, all of those things.

[1067] So if it's just about cash flow, CJ, you might want to look into a real estate investment property that you pay cash for.

[1068] Maybe that's a, you know, two, three hundred thousand dollar condo that you pay cash for and it's going to cash flow, you know, $2 ,000 a month.

[1069] And we start there and build.

[1070] But doesn't sound like you're passionate about laundromats, you love the idea of cash flow.

[1071] Yeah, everybody wants to make money.

[1072] That's nothing wrong with that.

[1073] Yeah, we all want that kind of freedom, but adding debt to the picture is not going to give you the freedom, you think.

[1074] Thanks for the call.

[1075] Kelly is up next in Phoenix.

[1076] What's going on, Kelly?

[1077] Hey, thanks for having me. I just had a quick question about the two cars I own.

[1078] One is paid off.

[1079] One has an $11 ,000 loan on it.

[1080] The one with the loan I used recreationally on the weekends, and then the other one I use as a city commuter.

[1081] Okay.

[1082] And I'm just curious to know if I should sell one of them to kind of get a jump start on like investing and saving more and things like that.

[1083] Do you have any other debt?

[1084] Second car.

[1085] I do not.

[1086] No, just the car.

[1087] How much money do you have in savings?

[1088] Just the starter emergency fund of $1 ,000.

[1089] And what's your income?

[1090] $40 ,000 after taxes.

[1091] Okay.

[1092] It's just you?

[1093] Just me, single, yep.

[1094] What's your other car worth that paid for one?

[1095] I think $5 ,000, give or take on Kelly Blue Book.

[1096] It's a Hyundai Veloster.

[1097] Wow.

[1098] And your recreational vehicle is worth how much?

[1099] About what the loan is worth, about $11 ,000 or $12 ,000.

[1100] Yeah, I would sell that thing because it's a toy.

[1101] It's not even, doesn't have any functional utility other than having a good time, and I'd rather you get rid of that, clear your debt, build a fully funded emergency fund, and then save back up and pay cash for that recreational toy next time.

[1102] Got it.

[1103] Okay.

[1104] That's what I would do in your shoes.

[1105] And if you want to aggressively pay it off, you can, but making 40 after tax, it's going to take a long time, and this thing really has no functionality in your life.

[1106] I'd rather use that time you would have spent recreationally to be doing side hustles to get rid of debt and get you in a good financial spot.

[1107] So we'll get back to the fun in no time.

[1108] But for now, we're doing some grown -up stuff, Kelly.

[1109] Thanks for the call.

[1110] This is The Ramsey Show.

[1111] Welcome back to The Ramsey Show.

[1112] I'm George Campbell, joined by J. Warshaw.

[1113] Our question of the day today comes from Anna in Colorado, and we have phoned a friend.

[1114] If you're wondering what Dr. John Deloney is doing here, it revolves around mental health, and we grabbed John and said, John, I've always wanted to phone a friend, like, who wants to be a millionaire.

[1115] And John was kind enough to join us.

[1116] I was just doing somersaults in the hallway back there, and you're like, hey, you want to come on the show?

[1117] He's generally, if you're wondering what John's doing when he's not on the show, he's working out constantly.

[1118] Right.

[1119] Probably not.

[1120] Well, thanks for being here to help us answer this question, John.

[1121] All right.

[1122] So Ann in Colorado says, she says, I'm the wife of a military veteran who suffers from mental illness and a traumatic brain injury.

[1123] Because of his injuries, I am responsible for handling all the finances in our house.

[1124] I try to sit down with him once a month to go over the budget, but even if he participates, he will forget it almost immediately.

[1125] His injuries have impacted his memory, his ability to concentrate, and they make him become impulsive.

[1126] We are currently on baby step two with a lot of debt.

[1127] My husband says that he's on board with becoming debt free.

[1128] However, his mood swings and impulsivity make it extremely difficult to keep moving forward.

[1129] He continues to overspend in all areas of the budget.

[1130] When I try to talk to him about it, he becomes defensive and tells me I'm trying to control his life.

[1131] It's almost like dealing with a fourth child.

[1132] It is making it very difficult to stay motivated and getting us debt free.

[1133] My ultimate question is how do I manage both his mental health while staying on budget and working towards a debt -free life I want to continue doing this as a team but I don't know if I should who that one's a heavy one um so this is one of those strange situations that because of the nature of something like this whether it's traumatic brain injury or it's a mental health challenge or let's say somebody loses a sibling or a parent and they are just going to a black hole of grief for a season, right?

[1134] This is one of those moments that you got to pull yourself out 30 ,000 feet.

[1135] And we teach these principles and we just repeat them and repeat them and repeat them.

[1136] And there is some moments when we have to say stop.

[1137] You have to stay safe and you've got to preserve the integrity of your home.

[1138] That's right.

[1139] And so like for instance, we might tell somebody who like get out of get out of debt, baby step two, baby step two, oh, you're pregnant.

[1140] Okay, stop.

[1141] Just stop until the baby's born and then you can dump all that cash in there.

[1142] This is a similar situation where where for this particular person, for Bethany, I've got some, like one of my oldest best friends on planet Earth struggled from a pretty significant TBI.

[1143] You're, in many ways, you can be dealing with someone who has the capacity, the emotional capacity, the cognitive capacity of a kid, of a teenager, of a young adult.

[1144] And so I have to build in structures, for lack of better terms, they're going to keep me and my kids safe, right?

[1145] So I'm not going to recommend this couple share a bank account.

[1146] It's not safe and it's not smart.

[1147] I'm also going to recommend if she decides to stay in this marriage, which I hope she will.

[1148] I think till death to his part is an important thing.

[1149] Sickness and health is an important thing.

[1150] And I know it's hard, hard, hard.

[1151] She's going to have to get some people on her side that will look at him and say, because he might not be able to hear it from her.

[1152] She's going to give you some money every month.

[1153] That's going to help create boundaries that she by herself can do.

[1154] and then we are going to there is going to be an area of this that it feels like she's a parent like here's what you can spend on this and we're going to take away access for other ways to get money does this improve over time john or is this kind of what it is man tb i's it's like taking a rubber bouncy ball and the three of us just throwing it in a room that path of that ball is the different constellations of how tbi can be healed how it can be managed how it can not be healed it's just everybody's situation's different so you're saying we need to put some guardrails here and that includes separating the bank account maybe taking away because she's saying he feels like it's controlling his life but at some point does she have to have a conversation and go listen i do have to control our finances you know that almost like a power of attorney yeah yeah i mean that's that's that's a pretty significant move to take um you know financial power of attorney for that's not i'm not saying that it's it's kind of idea, though, that somebody else is not really in a health state that they can make those decisions.

[1155] So I'm not saying legally she's doing it.

[1156] So I think the way we would say it is you have to be unified in your marriage when you're dealing with your money.

[1157] She's not going to have that luxury.

[1158] So she's going to have to get somebody else that she can make some of these bigger decisions with.

[1159] And often he can't hear it from her.

[1160] If she says, I can't give you any more access to money.

[1161] I'm going to freeze your credit.

[1162] I'm going to do these things for you.

[1163] He can't hear it from her.

[1164] He might hear it from one of his military buddies who was with him.

[1165] He might hear it from a financial coach, a financial coach, a military doctor who he trusts and who would come sit with all three of them, right?

[1166] Sit down as as all three of them.

[1167] So it's about looking at the situation and being honest about it and knowing there are situations when we have these principles, we are saying over and over and over again.

[1168] Maybe your, maybe your husband or wife is bipolar.

[1169] Bipolar one and cannot, it has real lows and real high highs.

[1170] Part of managing that is saying, I'm going to hold the debit card in the house, right?

[1171] And you're not going to have access to the account.

[1172] If you ever need anything, we're going to talk about it as a couple.

[1173] But it's my job to keep us safe when you are real high or real low.

[1174] Right.

[1175] And that's just part of managing.

[1176] It's not a control mechanism where I go, it's, it's beyond just like, I don't trust you.

[1177] It's you don't have the ability to make wise decisions day in and day out.

[1178] We all agree on that.

[1179] And we all agree on that.

[1180] And so I think letting him see the budget and have access to it and say here's your fun money here's the limit remember what we talked about yesterday we said you have a hundred dollars left and you spent that well in some in is that part of this well but here it's saying um injuries have impacted memory right and so yeah we can have a long talk a a talk full of tears we're committed to go forward he wakes up the next day has no recollection of that conversation which i'm sure is frustrating for the other spouse and it's frustrating for him he didn't want to disappoint and and so he may respond with shame she may respond with anger.

[1181] It's just a part of it, but she has to know he's not going to remember this conversation tomorrow.

[1182] So I've got to put some breaks and boundaries on this thing.

[1183] And that's really, really hard.

[1184] It's hard.

[1185] Yeah.

[1186] I mean, she's taking a role of caretaker at that point.

[1187] Yeah.

[1188] And we take this call all the time about adult parents, right, who are maybe have dementia or maybe not making great choices as they're entering into their 70s and 80s.

[1189] Oh, if there's an addiction, there's gambling, things like that it's the same principles underneath it of we need to be in control we need to take away access and at the end of the day that is never a comfortable conversation and um i remember sitting with the group of policemen we were talking about when they were going into homes doing doing mental health calls and one guy said the thought of walking into somebody else's home and taking away their civil rights their right to have freedom and i take them just because of their mind's not working it pained him and when he said that i was like yeah exactly Exactly.

[1190] That's that it's hard to look at somebody, an adult and say, you're taking away their agency in a way.

[1191] That's exactly right.

[1192] Well, I would think there's probably a grief that both of them are going to experience because she thought, hey, we're in this thing together.

[1193] This is going to be part of our life together.

[1194] We're making financial goals.

[1195] We're tackling these things.

[1196] And it's not going to happen that way.

[1197] And I'm sure in the moment that he remembers, he probably felt that same way.

[1198] So they both have something that they've lost.

[1199] And that's sad.

[1200] And a traumatic brain injury especially, certain mental health challenges, is extra hard because there's no outward, there's not any big scars, there's not missing limbs.

[1201] It just looks like my old guy, right?

[1202] It just looks like my old wife.

[1203] It just looks like the old fill in the blank.

[1204] And yet everything is different now.

[1205] And so, Bethany, I would tell you your grief and your exhaustion is real and it's right.

[1206] And it's totally right.

[1207] And you have to make a plan that is going to keep you and those kids and your husband's safe.

[1208] and that means you're going to have to go at this alone or not as a marriage partner but you're going to have to find somebody else a Ramsey coach, a local FPU leader, somebody that can walk with you and help you make some money decisions a parent, a therapist, somebody.

[1209] And then you're going to have to get some other people in your life to help create some boundaries with this with their husband.

[1210] Man, there's no easy way to go about this but those steps are at least practical and tactical to go.

[1211] We're going to set the boundaries, have the hard conversations, put the guardrails in place, get third parties involved.

[1212] Well, I tell her to get connected with better help.

[1213] At least she can be talking to somebody on a regular basis, somebody to help her put those guard rolls in place, like what you spoke about.

[1214] And let me say this.

[1215] Often people who find themselves dealing with kids, financial challenges, and then a spouse romantic partner that's got challenges, right?

[1216] Whether it's any number of mental health challenges, TBI, whatever.

[1217] Often the phrase is, I can't keep doing this anymore.

[1218] And I agree with that.

[1219] But often we think that this is the marriage.

[1220] It's not.

[1221] this chaos.

[1222] So get some help, get some boundaries, and start putting some barriers up, and then maybe you can continue with the marriage.

[1223] Super helpful.

[1224] John, thanks for jumping in, phoning a friend.

[1225] It really works.

[1226] It's good to have friends like John.

[1227] Be sure to check out his book, Building a Non -Anxious Life.

[1228] It's so good, and I love the way he helps people navigate all the challenges that touch money, but are so much deeper.

[1229] Thanks, John.

[1230] That puts this hour of The Ramsey Show in the books.

[1231] Thank you to John and Jade, and you America.

[1232] We'll be back before you know it.

[1233] from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

[1234] I'm Ramsey Personality, George Campbell, joined by the one and only Jade Warshop.

[1235] Open phones at AAA 825 -5 -225.

[1236] You call us and we'll do our best to help you take the right next step for your life and your money.

[1237] Denise kicks us off in Provo, Utah.

[1238] Denise, welcome to the Ramsey Show.

[1239] Thank you so much.

[1240] I'm so nervous to be on the phone with you, Gary.

[1241] I know.

[1242] I really love you and Jade.

[1243] You guys are amazing, and I just look up to you guys so much.

[1244] Oh, thank you.

[1245] I'll let Ken know.

[1246] She's no fan.

[1247] I'm just kidding.

[1248] I'm kidding.

[1249] Ken, too.

[1250] Ken, I'm going to get your book.

[1251] There we go.

[1252] Ken's not here.

[1253] Don't worry.

[1254] He can't hear you.

[1255] I'm just having fun.

[1256] How can we help you today, Denise?

[1257] Thank you.

[1258] Okay, so I have a question.

[1259] Our house, we're needing to get our HVAC replaced.

[1260] And so we've gotten a few estimates, you know, right now we're on baby step number two, and we are going to be done paying off our car, which is the last thing that we have to pay off next month.

[1261] So we're so excited about that, and we're just grateful for the baby steps that you guys have laid out because it's really helped us to be able to get financially ahead, have financial peace.

[1262] However, our A -TRAC is needing replace.

[1263] It's going to be about $18 ,000.

[1264] And so my husband...

[1265] That's the best quote you've got.

[1266] Our houses.

[1267] That's the one that we have from the people that service that we have a membership with.

[1268] We are planning on getting other quotes from other companies.

[1269] Sorry to cut in.

[1270] Is there a way that you can kind of do the heating thing first and then the cooling thing or whichever one is most pertinent to the time of year to spread it out?

[1271] I haven't thought about that just because I've been told that it's usually, like you can either replace one.

[1272] The other ones usually is maybe to be.

[1273] replaced around the same time and it is the cost is a little bit less when you do both but I hadn't thought about that so what is this membership I'm sorry what is this membership um it's through whipple they're just like a local like um plumbing heating like HVAC services and so it's a $20 a month fee that we pay to them and they come out and like service our AC our furnace um we have like drain cleaning, electrical safety, stuff that they do like a warranty kind of company or like a repair company.

[1274] Okay.

[1275] Yeah.

[1276] I would get many quotes because 18 ,000 just hearing that feels high.

[1277] I don't know your house and your situation.

[1278] It could be real, but that just, I would get a lot more opinions.

[1279] Okay.

[1280] Even if there's a way to like keep it going for six more months to allow you guys to save up, you know, we got to just see what all of the options are before deciding because my guess is you're saying, Hey, are we going to, should we just go ahead and take out a bunch of debt for this?

[1281] Right.

[1282] Well, because, you know, like, originally my husband and I were, like, going to save our six months to your baby step number three.

[1283] So save six months' worth of expenses.

[1284] And then at that point, start saving for the HVAC and then hopefully it doesn't die in between that time.

[1285] And if it did, we would just pull from that emergency savings if that did happen.

[1286] However, the guy that came yesterday to do the AC tune -up said that the prices probably will be going up just because of the rate of inflation.

[1287] And so he said maybe it'd be better if you guys finance for 15 years.

[1288] This guy's a real salesman.

[1289] I mean, come on.

[1290] I know.

[1291] I did tell him.

[1292] I said, no, we're not going to finance.

[1293] We're going to save.

[1294] Like, we're going to save and then paid in full so we don't have any debt.

[1295] And so he said, you know, he agreed and said, that's great.

[1296] But the prices could go up next year.

[1297] And so instead of paying 18, you might have to pay 21.

[1298] so maybe it would be better to you guys just get it now.

[1299] And so I only, I thought about it only, you know, when my husband presented it to me and I thought, I don't know, I don't think, I don't want to, like, go back to debt again.

[1300] Like, we're almost, we're not, we're not going back to debt again.

[1301] That's got to be the line in the sand.

[1302] So how much money do you guys make a year?

[1303] Our household, including our, so we ran out our basement.

[1304] That's the only reason why we're also considering this is because we rent our basement.

[1305] we just want to make sure that it's a good livable place and we're not having issues with our renters downstairs.

[1306] Do you need the rent in order to make the mortgage payment?

[1307] It helps it so that way I don't have to work because I stay home with my children.

[1308] And so when we bought this property seven years ago, we bought it with that intent was for me to not have to work anymore.

[1309] I just wanted to know in case something, like in case you do have to elongate this and in case it does cause that, a basement apartment or whatever to be uncomfortable.

[1310] I just kind of wanted that little bit of information.

[1311] Okay.

[1312] What's left on the car?

[1313] I'm, $4 ,400.

[1314] Okay, and what's it worth?

[1315] Which will be paid off by the end of next month.

[1316] What's the car worth?

[1317] Our car, our minivan, it's worth I'd see like probably 24.

[1318] So the first, the first key is that George is getting at, we've got to pause the baby steps.

[1319] Like this is kind of an on -fire emergency.

[1320] So I know you're saying, oh, the car will be paid off by this point, but that's, to your point, that's $4 ,400 that are now going to be freed up to go towards at least half of this system.

[1321] What I'm wondering, here's another solution that could fix this temporarily is if you sold the van and you netted 20 grand, you covered the H -FAC and you came up a little bit extra money and got a beater car to get you by until you can upgrade that car.

[1322] We probably, we could look into that.

[1323] We just got this minivan because we had our third child about 15 months ago.

[1324] And so we, I don't know if that's, I mean, I would definitely like consider it and entertain the thought.

[1325] You can get, he's not saying that you have to get a car.

[1326] You can still get a vehicle that fits everybody.

[1327] It would just be a lot older with a lot more miles on it.

[1328] And it would only be temporary.

[1329] It might be like a six month thing until you upgrade, you know, to a five grand more expensive van.

[1330] to have another five, you know, so you kind of stair step into, back into a $24 ,000 van, but at least this gets you an HVAC without debt.

[1331] Yeah.

[1332] So that's at least one option.

[1333] What's the household income?

[1334] I'm sorry, $100 ,000.

[1335] $100 ,000.

[1336] Okay, so how quickly could you save up $18K, if you guys cut your expenses down or nothing, you pause the baby steps, maybe he picks up another side hustle, maybe you're working part -time, how quickly could you save up $18 ,000?

[1337] I'd say we could so I had projected us because I set the goals for our like our financial goals and so we were going to have our six months and every six month emergency fund by just by the beginning of December so I think and so that would be about 14 ,000 that we would have saved up by December so probably like another month or two after that so like I'd say next year by February well I bet you could do it sooner because remember you're pausing the baby steps so all that money that you were throwing towards debt in that equation.

[1338] That's now back in your pocket.

[1339] So I think you'd still be on track to have this done probably by October or November.

[1340] So if you got aggressive and this HVAC can live until October and you get a few quotes and now you find one for 13 or 14 instead of 18, well, now we're cooking with gas quite literally.

[1341] Yeah.

[1342] Okay.

[1343] So I would look into all of those options.

[1344] And as a worst case scenario, I think you sell the van and figure it out if you need to if it becomes a true emergency where, hey, this thing's out and we're free.

[1345] or to whatever it is, that becomes sort of your scapegoat to get out of this thing.

[1346] And we'll figure out the car.

[1347] Borrow from family, rent one for a little, whatever we got to do to get by.

[1348] But do not go take out a 20 grand loan because some salesman said the price is going up next year.

[1349] Yeah, he doesn't know.

[1350] That's a classic tactic.

[1351] And he might be right, but I'd rather you spend three grand more than go into all this debt and go backwards.

[1352] So you guys are working hard.

[1353] Keep working the plan.

[1354] It works.

[1355] Pause the steps if you have to.

[1356] Cover the emergency.

[1357] And you'll be back on the horse in no time.

[1358] This is The Ramsey Show.

[1359] We'll be right back.

[1360] Welcome back to The Ramsey Show.

[1361] I'm George Camel, joined by Jared Warshaw.

[1362] The number to call is AAA 825 -5 -2 -2 -2 -5.

[1363] Well, Jade, as we like to do, we try to stay hip.

[1364] We try to keep our finger on the pulse.

[1365] That's right.

[1366] And this headline got me that we saw.

[1367] The era of no -show fees is here, and it's going to cost you.

[1368] So this kind of coming out of this tipping, crazy tipping culture.

[1369] Yes.

[1370] And now there's a fee culture.

[1371] and that includes the no show fee.

[1372] Yeah, it's basically you set up an appointment and if you don't show up, you get charged, right?

[1373] So it says, we all have that friend who texts to say he or she is running late after you were already supposed to be there.

[1374] So now businesses have a way of putting those flakes in their place and they're charging people for not showing up.

[1375] So if you're getting a haircut, if you're used to kind of a low tech operation, then these people can say, no, if you don't show up for your haircut appointment, we can charge you a fee.

[1376] I know when I get my nails done, they'll make you put a deposit up front.

[1377] And then if you don't show up for the appointment, they keep the deposit.

[1378] That's the new thing as they go, hey, you got to put a card on file.

[1379] And if you don't show, we're going to charge you.

[1380] And one barber in California charges customers up to $100, double the price of a normal haircut for missing an appointment.

[1381] And on one hand, George, I get it because you're not just paying for a service.

[1382] You're paying for their time.

[1383] Like there's a time element there.

[1384] And I remember when I used to teach lessons, it's so frustrating.

[1385] the way I had it set up it was like hey after you do your lesson you pay me and then I started noticing you know people would easily be like oh I can't make it you know my grandma was late or I had to pick up the dog from the groomer and it's like okay so then I started making people pay up front and it's like if you miss your lesson that money is mine you don't get it back you don't get it back yeah and so which is fair for like a small business owner a solopreneur your time is money especially something that you're trading time for money like a lesson an appointment a personal service that's right so I can understand you you know, a no -show fee for that.

[1386] But can they, can, George, here's my question.

[1387] And I want to know what the audience thinks about this.

[1388] Can it be flip -flopped?

[1389] Like, can it go on both sides?

[1390] Because here's my thing.

[1391] If I set the doctor's appointment for 2 o 'clock and they say, okay, Jade, and also show up at 1 .45 so you can do the paperwork.

[1392] And if I show up at 1 .45 and you don't see me until 2 .45, can I get it?

[1393] Can I get a refund on my time?

[1394] That would change the game.

[1395] You know what I'm saying?

[1396] Yeah, especially in the health care world.

[1397] This happens a lot.

[1398] Look, they're clapping.

[1399] They're like, yes, Jade.

[1400] The dentist office, the doctor's office.

[1401] I'm like, hold on.

[1402] Why is your time where something, but mine isn't?

[1403] When you may be wait 45 minutes.

[1404] Even the repair people, they give you that crazy window.

[1405] They say, whoa, you know, the HVat guy will show up sometime between 1 and 4 p .m. The internet guy is like, I'll be there sometime between 8 and 5.

[1406] You take off work.

[1407] You take off time from work.

[1408] And then they're like, oh, our technician couldn't make it out there.

[1409] Couldn't make it out there.

[1410] What are you?

[1411] Like, can I get a refund?

[1412] Can I get some dollars?

[1413] off for my time.

[1414] That's all I'm saying.

[1415] Can I give you a life hack?

[1416] What?

[1417] I don't know that it's fully ethical, so let me just put that caveat out there.

[1418] But I use a service, this is not a sponsor, it's called privacy .com, and it's a way to create virtual debit cards.

[1419] Okay.

[1420] So sometimes what I'll do if I'm uncomfortable putting my card info in, but they require it, I'll go make a virtual debit card, and then you can set limits so it can say, hey, if it charges over a dollar, decline it.

[1421] But does it do it on the spot?

[1422] So it'll give me a new card number, a new expiration date, three digits, all that.

[1423] I input that.

[1424] Yes.

[1425] And I can set a limit on that card to say, don't let any transactions through it or over a dollar.

[1426] And so it'll get declined if someone tried to run that for $40.

[1427] So you're hacking the system.

[1428] So that's, you know, do what you will with that information.

[1429] It's not none of my business.

[1430] But to be fair, I had to cancel a haircut this week and get it rescheduled for today.

[1431] If you can tell America.

[1432] It looks good.

[1433] And my barber, because we have a relationship, I've been with this guy for many, many years.

[1434] He was kind enough to not charge the cancellation fee.

[1435] And because I pay cash, he said, well, if you had a card on file, I would have, it would have charged you.

[1436] Yeah.

[1437] And I went, well, I don't have a card on file because I'm a cash guy.

[1438] And he went, dang it, foiled again.

[1439] So, you know, I think the key here is it's got to go both ways.

[1440] Yes.

[1441] And maybe just like you said, a little bit of human, a little human nature to this.

[1442] And sometimes it's kind of the nature of the beast.

[1443] You pay the fee and go, yep, that was on me. Yeah.

[1444] It says cancellation fee started taking off in 2020 because the business.

[1445] is we're being so hit hit so hard by COVID it kind of was like this is a way that we can make sure we're not losing money hand over fist yeah you got to see both sides here and I think there is a lack of commitment in today's world and we're so scattered we're so busy and we're so focused on ourselves that it can affect you got to think about how this affects other people well and your business too because it says that customers are actually resenting paying the the services for fees that they don't receive like there can be a resentment that it's like oh man every time, you know, I really did have something that came up with my kids and this guy's been cutting my hair for years and now he's going to take, he's going to charge me. So it can build a resentment or even if you're the customer and the technician doesn't show up.

[1446] And it's like, you know, I think the takeaway here is show up on time, have grace.

[1447] Yeah.

[1448] When people have things that pop up.

[1449] I think that's the situation.

[1450] Have some grace on both sides.

[1451] If you're the business owner, if you're the person, have some grace, be understanding, but also be a person of commitment, of character.

[1452] And if you can dish it out, you better be able to take it.

[1453] If you're going to dish those fees, I'm going to ask for my money back.

[1454] Can I, you just give me a discount code and we'll call it square.

[1455] I fight.

[1456] I fight every cancellation fee.

[1457] I can count on one finger how many times I've paid one of those bad boys.

[1458] So there you go.

[1459] That was fun.

[1460] Josh is up next in Dayton, Ohio.

[1461] What is happening, Josh?

[1462] Hey, how's it going, guys?

[1463] Good.

[1464] How are you?

[1465] Doing well.

[1466] Hey, so my question is I just started listening to your show about a week ago.

[1467] Someone recommended it to me. I was talking about getting out of debt.

[1468] And I've been listening to it religiously.

[1469] So I have about $22 ,000 in consumer debt.

[1470] And I kind of already have the first babysat done.

[1471] I have $5 ,000 saved up.

[1472] And I was usually saving $800 a month.

[1473] Now I am applying that $800 to all my money.

[1474] debt I'm going to start with my highest credit card and then I'm going to work my way down and I kind of have it set up there's been about 18 months and I'll be debt -free except for my mortgage I'm just kind of looking for some more pointers and see if I miss something this is your guys's career and I'm just kind of hoping it's just the 22 ,000 it's just the 22 ,000 of debt right and it's all credit cards so I got four credit cards I have a car note and then I have some student loans that are lingering How much is the car note?

[1475] I owe $5 ,600 on it.

[1476] Okay, $5 ,600.

[1477] Okay, and that's part of the $22 ,000.

[1478] And then you told me you have $5 ,000 set aside.

[1479] So if we're walking through the baby steps real quick for you and any other new listener, first baby step is you keep $1 ,000 saved or you get $1 ,000 saved.

[1480] And then anything beyond that goes to Baby Step 2, which is paying off all of your debt using the debt snowball, which is what you alluded to, you list them smallest to largest.

[1481] Now, you said the height, you were paying the highest, card first, you got to pay the smallest balance first while making minimums on the rest.

[1482] Well, I meant my, the highest APR.

[1483] So my smallest balance happens to be a 31 .49 APR.

[1484] So let's reverse that.

[1485] Let's reverse that.

[1486] So the way we teach is in the debt snowball, you list them by balance, smallest to largest, and you pay the smallest balance first.

[1487] And the reason we do that is because it's psychological.

[1488] Like, you want to get those quick wins and you want to keep going.

[1489] And in the end, any interest is negligible, honestly.

[1490] And you said that happens to be the highest interest, that smallest balance?

[1491] Yes.

[1492] Okay.

[1493] So that's just a coincidence there.

[1494] Okay, so you're attacking that.

[1495] If you used 4 ,000 of your 5 ,000 to knock down the debt, you'd be down to 18 ,000, and you said you're able to put $800 a month right now toward it?

[1496] Right, correct.

[1497] Okay.

[1498] How do we make more, how do we create more margin so you can put $1 ,000 toward it, $1 ,200 toward it?

[1499] I have two kids in a house payment and my wife.

[1500] She's going to go through school.

[1501] So, I mean, the budget's real tight.

[1502] Anyways, I just downloaded the everyday dollar app, and I put it all on there, and I thought I had a lot more expendable money.

[1503] It turns out I don't.

[1504] I don't know how I was making it this far.

[1505] What's your income?

[1506] I make about a net.

[1507] I make $9 .70 a week, so my, at the end of the years, I thought $50 ,000.

[1508] What's your paycheck look like every month?

[1509] What's it saying every dollar that you bring home?

[1510] I bring home right now.

[1511] I'm getting a raise here.

[1512] certain June, but it's 970.

[1513] Per a week.

[1514] A month, I think it's a week.

[1515] So a month, it's $3 ,880.

[1516] Okay, and the wife's not working.

[1517] She's home with the kids?

[1518] No, she's working.

[1519] She's a server at a restaurant.

[1520] Will she continue that while in school?

[1521] Yes, she is.

[1522] And that's why I'm trying to get out of debt, too.

[1523] So that way, you know, she's starting to struggle, I could kind of do my husbandly duty and take care of it.

[1524] Okay.

[1525] Well, the key here is margin.

[1526] You got to cut all the expenses you can, make as much, as you can, that's going to speed up this whole process.

[1527] 18 months to pay off 22, I think we can do better than that.

[1528] It just feels like too long.

[1529] It's not that much debt comparatively, and so I want to see you knock this out fast.

[1530] So hang on the line.

[1531] I'm going to send you FPU, Financial Peace University, along with every dollar, to help you gain some tools and you can go through this with your wife.

[1532] This is The Ramsey Show.

[1533] Welcome back to The Ramsey Show.

[1534] I'm George Campbell, joined by Jade Warshaw.

[1535] You've heard us talk about every dollar on the show today, and if you're wondering what the heck that is.

[1536] That is our budgeting app that our team created to help you make the most of your money and actually hit your money goals.

[1537] And so every dollar is an app it makes it super simple to plan your spending, track your expenses, save for what matters to you.

[1538] And it's all in a easy to use app.

[1539] Both people, if you're married, both spouses can be logged into this and have that transparency and accountability.

[1540] It helps you keep a pulse on your spending.

[1541] So it's not for broke people.

[1542] It's not for rich people.

[1543] It's not for nerds or accountants.

[1544] Budgets are for people who want to win with money.

[1545] I always say budgets are like toothbrushes.

[1546] Everybody needs one.

[1547] Mm, I like that.

[1548] And if you don't got one.

[1549] It's ratchet.

[1550] Oof.

[1551] Mm -mm.

[1552] It's funky.

[1553] It does get funky if you're not budgeting.

[1554] So download every dollar for free in the app store or Google Play today.

[1555] And thank us later.

[1556] All right.

[1557] Gunner is in St. Gunner, what's happening?

[1558] Hey, what's happening?

[1559] How can we help today?

[1560] Yeah, you sound great.

[1561] Awesome.

[1562] All right.

[1563] So I guess I'll just jump right into the question.

[1564] So I was online and I found several different debit cards that you can get a 1 % return on depending on however much money you spend.

[1565] And I was curious if you think this might be a good alternative to credit cards because you can get the rewards, but you can also avoid going into debt.

[1566] I mean...

[1567] Is it a better alternative to credit cards?

[1568] Absolutely.

[1569] Is it worth your time and effort and money?

[1570] That's debatable.

[1571] I don't have a cashback debit card if it tells you anything.

[1572] And here's the reason.

[1573] just mathematics and so I wouldn't get the card because of the cash pack if it happens to be a thing for example I got a Costco membership and I got the executive membership that's the kind of guy I am and they give you like 2 % cashback and so if you're doing the math on that you're going okay for every $10 ,000 I spend they're going to give me 200 bucks that's what I'm saying it's not that's nothing to get excited about and for how much I actually put on my debit card gunner I'm not spending, you know, $50 ,000 a year, $100 ,000 a year on my debit card.

[1574] And so I don't think the cashback would be worth it, but if you're going to do it, do not let the cash back sway you in any way.

[1575] Well, there is a negative side to that.

[1576] And I think there is a piece psychologically that if you think, if I spend more, I get some sort of reward, reward in quotes.

[1577] I think we already know that when people use plastic over cash, they do spend more.

[1578] And that goes up when it's a credit card versus a debit card.

[1579] But I do think there's something around that that it's like, okay, if there's somewhere floating around in your psyche that the more you spend, the more, like I said, quote, reward you get, I don't like that.

[1580] And so I, like George said, if it happens to be, if it happens to be there and it's like, oh, I got a little money back.

[1581] Who cares?

[1582] But I wouldn't go out of my way to select that because like you said, that one to two percent is not breaking anybody free financially.

[1583] Like it's not it's not the holy grail to financial peace.

[1584] So.

[1585] What do you think, Gunner?

[1586] No, certainly.

[1587] That makes sense.

[1588] Yeah, that all makes sense.

[1589] I'm not against this.

[1590] I just don't think the benefits really not there, especially, you know, 1 % is negligible.

[1591] When you're talking about, you know, let's say you have $3 ,000 of expenses you could put on the card.

[1592] That's $36 ,000.

[1593] So when you start doing the math on this, you're like, okay, I'm going to spend $36 ,000 in order to get $360.

[1594] Okay.

[1595] Is that going to change my life?

[1596] No. because if you're making good money, I can find $360 in a single month if I'm just intentional about it.

[1597] So that's the key.

[1598] If you're budgeting already and you're not spending anymore, that's always the argument with credit cards that I hear, Jay, is, I don't spend any more than I would have with a debit card.

[1599] No, that's trickery.

[1600] That's not true.

[1601] That's a lie from the pit of hell.

[1602] I don't buy that for a second.

[1603] So I like the spirit of the question, Gunner.

[1604] I don't think, you know, the biggest part is you can't spend more than you have with a debit card.

[1605] So you have a built -in fail -safe.

[1606] So if you want to do it, go for it.

[1607] it, but again, I don't think it's going to be worth the time and energy.

[1608] Agree.

[1609] Or switching banks and debit cards and all of that.

[1610] So, it's a good question, though.

[1611] We're seeing more of these cashback debit cards pop up.

[1612] Yeah, I'm like you, George.

[1613] I don't think it's a bad thing or a negative thing.

[1614] I just, I think sometimes people, to your point, they don't really do the math, and they think, oh, this is something I'm getting, and it says it's a reward and it says it's a prize.

[1615] And I think sometimes it can make people go, well, I get the cash back.

[1616] go ahead and buy, I get the cash back, whether credit or a debit, and I'm like, wait a second, be like George and do the math, and then you'll think twice about buying those.

[1617] Thank you, Jay.

[1618] Be like George.

[1619] That's what America needs right now.

[1620] Like George.

[1621] Be like Mike.

[1622] Be like George.

[1623] All right.

[1624] William is in Iowa City up next.

[1625] William.

[1626] Welcome to the Ramsey Show.

[1627] All right.

[1628] Thanks for taking my call.

[1629] Sure.

[1630] How can we help?

[1631] So I have a couple of investment accounts.

[1632] One of them has about 18 ,000.

[1633] And the other one It's about $14 ,000.

[1634] I have one of them kind of earmarked as our three to six months of expenses for the emergency fund.

[1635] We also have two car payments right now.

[1636] One of them is pretty low, and the other one is a decent amount, but I get that vehicle allowance from work.

[1637] And I guess my question is, would it make sense to take money out of the other investment account that I don't have really earmarked as an emergency fund to pay off one and a portion of the other vehicle loans.

[1638] Are they retirement investments, or are they just a brokerage you have?

[1639] Just a brokerage I have.

[1640] One of them was started for me when I was a baby, actually.

[1641] My grandpa started it for me, and then the other one was money that my wife and I trade up.

[1642] And rather than just kind of having it sitting around as an emergency fund, we asked the investor to put it somewhere where if we needed it, we could get it out within a matter a day or two.

[1643] So it's just a regular investment.

[1644] Well, the emergency fund is insurance, not an investment.

[1645] So it worries me when anyone puts their emergency fund in something that's volatile.

[1646] And so if you want your money to grow a little, we're seeing some amazing rates on high yield savings accounts right now of 5%.

[1647] And so I would absolutely, even for your emergency fund, if you do nothing else, move that money over to an emergency fund.

[1648] That's right.

[1649] And just let it grow at 5%.

[1650] It's not there to grow.

[1651] Again, it's insurance against life happening.

[1652] And I don't want that to be volatile to where you lose $3 ,000, and all of a sudden you have an emergency, and it hurts then to use that money.

[1653] What do you owe on these two cars?

[1654] So on my wife's vehicle, we owe about $9 ,000, and on my vehicle it's probably $25.

[1655] And that's the one that you're using a credit for or an allowance from your job?

[1656] Yes.

[1657] Do you get the allowance regardless of...

[1658] Yes, to get the allowance regardless, and actually the vehicle allowance covers my payment and my wife's car payment the allowance covers both the amount that I get.

[1659] If you get it regardless if the vehicles are paid off, even if not, I would pay off both of these vehicles as quickly as possible and I would liquidate both of these investment funds in order to do that.

[1660] Because that's walking through, what I'm telling you is walking through our baby steps, which is our framework for getting people to financial peace in the fastest, most risk -free way.

[1661] And so if I were you, I'd say, yeah, I'm going to liquidate both of these.

[1662] I'm going to pay off the $9 ,000.

[1663] And then I'm going to take what's left that I have here.

[1664] And I'm going to throw it at this $25 ,000, which is almost enough to clear it.

[1665] And you're going to be getting those allowances anyway so you can knock out the rest fairly quickly now that you don't have a car payment.

[1666] And then in the next two months, you're going to be completely car debt free.

[1667] And then you can take your cash, all those payments that were freed up in the allowance that you have from work and you can stock up three to six months of expenses and do what George said, which is throw them in a high -yield savings account.

[1668] And that's going to be the most stable you've ever been with that money.

[1669] Got it.

[1670] So then at that point, we would be debt -free.

[1671] That's right.

[1672] You will be debt -free.

[1673] Think about this.

[1674] You have 32 in investments.

[1675] I don't know what you'll owe in taxes on the capital gains of the investments, but let's pretend it's zero right now.

[1676] And 32 ,000 minus your wife's car, minus 22 that we could still throw at it, leaves you with a thousand bucks left over for your starter emergency fund, well, now you only have three grand left on that car.

[1677] And with your allowance and a free -to -payment from your wife's car, plus your income, you're going to knock out three grand in what, a month or two?

[1678] Yeah, that's easy.

[1679] Boom.

[1680] So we're talking about two months from now.

[1681] You're completely debt -free.

[1682] Then we can restock the emergency fund inside of a high -ield savings account, probably over the next five or six months.

[1683] And now we're cooking with gas.

[1684] Now we can get back to investing with intentionality and start investing 50, 15 % of our income.

[1685] What's your income household?

[1686] Right around 125, 130.

[1687] Yeah, yeah.

[1688] You guys are going to be baby steps, millionaires in no time.

[1689] Get this.

[1690] In one year, 15 % of 130 is 195.

[1691] That's more than you have in that investment account.

[1692] And so I have full faith.

[1693] You'll be back to investing in no time.

[1694] You're going to build wealth.

[1695] But I think we've been doing a lot of good things at once, trying to pay off debt, trying to save, trying to invest.

[1696] But when you do it with folks' intensity, you get this amazing.

[1697] amazing thing called progress and that's the power of the baby steps so thank you for the call i hope you do what we said it will work every time you work it man this is the ramsie show welcome back to the ramsy show our scripture of the day proverbs 31 31 honor her for all that her hands have done and let her works bring her praise at the city gate what a beautiful verse in honor of mother's day this weekend oh i thought you were reading that for whitney uh i mean i was but i didn't choose this first The team did a great job, reminding us all that it's Mother's Day on Sunday, so do all the things.

[1698] Get her the pancakes in bed and the flowers and the card and the gift.

[1699] Is it bad that sometimes on Mother's Day, I just want to be alone?

[1700] There was a great skit I just saw where it was the best gift you can give mom is 24 hours alone at the bottom of a well.

[1701] Just let her do her thing.

[1702] Man, give me a day, a peace and quiet.

[1703] A bath, a hot bath.

[1704] Like leave breakfast by the door.

[1705] Y 'all go away.

[1706] away.

[1707] Oh, that's smart.

[1708] I'm going to do that.

[1709] I'm going to take our eight -month -old and just be gone.

[1710] The mothers, take the dogs, be gone.

[1711] The mothers know.

[1712] They said amen with me. Lauren Hill once said that that strong mother doesn't tell her cub, son, stay weak so the wolves can get you.

[1713] She says, toughen up.

[1714] This is reality we're living in.

[1715] Oh, that's hard.

[1716] That's strong.

[1717] Strong words from Lauren Hill right there.

[1718] That's good.

[1719] Sometimes you know little proverbs in Lauren Hill in your life.

[1720] That's all I'm saying.

[1721] That's good.

[1722] All right, Brittany is up next in Denver, Colorado.

[1723] Brittany, welcome to the show.

[1724] Hello.

[1725] How can we help today?

[1726] I'm calling because I've been very illiterate with the financial literacy, and I feel like I have six children.

[1727] I have four small, four small toddlers.

[1728] So now I'm just trying to take, I'm really trying to get on track, and I'm trying to learn how to budget, and I'm on, like, a housing program, so I pay very little rent.

[1729] I have no debt, and I'm just trying to see where there's all my money going.

[1730] I'm surprised you've got some peace and quiet to make this phone call.

[1731] You're impressive.

[1732] Did you say you have no debt?

[1733] I have none.

[1734] Okay, excellent.

[1735] I paid off all my debt, I think, in 2020.

[1736] Come on.

[1737] Way to go.

[1738] Way to go.

[1739] And are you single -momming it?

[1740] Is dad in the picture?

[1741] I'm a single mother.

[1742] Okay, of six.

[1743] And is there child support coming in?

[1744] No. Why not?

[1745] I have we don't know where the father is we separated and he went about his way and I just you know and there's no court there's no court that can find him well we have a court order he just doesn't pay so I'm hoping soon that we'll get some conversation and no wages to garnish I'm guessing nope girlfriend okay so what's the nature of your question you're here you're no debt you've been supporting these six kids on your own in my book like Superwoman.

[1746] So how can we help?

[1747] Well, I do have dead.

[1748] I just have like a car.

[1749] I guess I say that.

[1750] Oh, whoa, whoa.

[1751] Hold the phone, Brittany.

[1752] You told us you were debt free.

[1753] We got to start this relationship off with truth and honesty.

[1754] Dead is money you owe to anyone for any reason.

[1755] I looked at my notes and I have it circled.

[1756] I forgot it.

[1757] My car is my only dead.

[1758] What's left on the car?

[1759] I think I just bought it last year, so it's still fairly fresh.

[1760] And I think it's about 14, maybe 15 grand.

[1761] Left on the loan?

[1762] Yeah.

[1763] Could have been worse.

[1764] What do you make a year?

[1765] Last year was about 45 to 50 ,000.

[1766] Okay, good.

[1767] What's the child care situation like for the six kids?

[1768] Oh, they're all in school full time, so I'm pretty free, but it's just, I don't know what my money's going.

[1769] Okay, so you're making $50 ,000, your rent is low.

[1770] All the kids are kindergarten.

[1771] kindergarten and above?

[1772] I thought you said you had toddlers.

[1773] They're all kindergarteners.

[1774] They're preschool, three pre -K and one kindergartner.

[1775] A teenager, he's 16, and I have one that's graduating college next year.

[1776] Okay, good.

[1777] Cool.

[1778] So your next goal, if you're following the baby steps, would be to get rid of this car loan aggressively.

[1779] Okay.

[1780] Do you have any money in savings?

[1781] No, I just exuded all of that because I wasn't working for three months, and now I'm getting back into a job, and the job that I'm getting into pays a little bit less hourly, but I can compensate that with, like, working extra shifts or something, but I'm just trying to figure out how to budget the money that I'm going to have coming in.

[1782] So do you have every dollar?

[1783] Do you have the every dollar app?

[1784] I have the app, but I was running into issues that I would not, you know, it's just I couldn't keep up with it.

[1785] What do you mean?

[1786] I do have the app.

[1787] What do you mean you couldn't keep up with it?

[1788] with like put in the expenses and all the little categories and with all the kids so i just really couldn't keep up with the with it so once you okay let's let's see if we can identify this problem so with every dollar once you set the budget like once you go in you put your checks in there in the income section you put your income or i'm sorry you put your expenses everything you can think to spend money on it's it's pretty much set um and then as each month goes there's a button on the bottom that you can click that says copy this budget to next month.

[1789] So you shouldn't be restarting every single month.

[1790] You should be having that baseline of, hey, this is, this is basically my life.

[1791] And each month I go in and make the small tweaks and changes that have to do with that month.

[1792] So that's thing number one.

[1793] And then thing number two is if that's not the problem, then it sounds like you've just not set up the habit of kind of going in there and tracking your transactions when they pop in.

[1794] Is that right?

[1795] It sounds like you might need the premium version.

[1796] Okay So what I want is I can't see who's manning the phones over there But they're going to pick up And I want to make sure you get the premium version of every dollar At least a free trial of it for you to check it out Because it does a lot of that automatically for you That'll help this process Okay and another question I wanted to ask Is because I'm on the Housing Section 8 housing program And they help you buy a house But in Colorado with the housing market So high I don't know if that's a good idea It's not a good idea Let's define what they mean by help They're going to help you get into a house with nothing down with a mortgage that you can't handle.

[1797] Yeah.

[1798] And so the right time to buy a house is when you're financially ready, not when the right homebuyers program comes along.

[1799] And there's so many strings attached to these programs, Brittany, and I want you to be in control of your life instead of having to, you know, be controlled by someone else.

[1800] And they also get me utilized the money to start a business.

[1801] So I wanted to start a host, like a group home for, like, I'm a CNA.

[1802] So I'm into a caregiver.

[1803] So I wanted to take the money to maybe start a business to have income before I go purchase a personal home.

[1804] We got to take it one thing at a time.

[1805] Let's look at it at one thing at a time.

[1806] A1 is we're paying off this $15 ,000 car.

[1807] Your A1 right now is the baby steps.

[1808] So number one is you don't have $1 ,000 saved.

[1809] So we need to find $1 ,000 quickly.

[1810] Which you have a next paycheck.

[1811] Yeah, most people get in 30 days.

[1812] So put that $1 ,000 aside.

[1813] Then very quickly we're paying off this $15 ,000 car as quickly as, as possible.

[1814] If you can pick up extra hours.

[1815] I don't know if you can or not with the way your life is set up.

[1816] But pay that $15 ,000 off quickly because then your next goal is you got to save six months of expenses.

[1817] And for you, it needs to be six months of expenses.

[1818] Because it's just you and you've got six kids.

[1819] And then after that, you're going to begin investing.

[1820] Okay.

[1821] And so these right now, these are your goals.

[1822] Homeownership is not there yet.

[1823] It might be there after baby step three, if you feel good about your situation, if you feel good about where the kids are going, they're going off to college, like all that stuff.

[1824] But the more, what you're going to find is, the more you're going to begin to work these baby steps, the more money you're going to want to earn.

[1825] And the more money you earn, you're going to be off Section 8 housing.

[1826] So that's the first goal.

[1827] And being off Section 8 housing doesn't necessarily mean that you went and bought a place.

[1828] It just means that you can afford rent on your own where you want to live.

[1829] And I think that's pretty amazing.

[1830] So that's the goal.

[1831] Brittany, what is your take -home pay every month?

[1832] Probably, I think my last job was making $1 ,700 a week, every two weeks.

[1833] Every two weeks.

[1834] So you got about $3 ,400 coming in?

[1835] Mm -hmm.

[1836] And what are your actual monthly expenses?

[1837] What does that add up to?

[1838] $1 ,600.

[1839] So you're telling me that there should be $1 ,800 left over that you can do whatever you want with.

[1840] Yeah.

[1841] Oh.

[1842] Ding, ding.

[1843] Well, all of a sudden, you got $1 ,000 saved up with your next paycheck.

[1844] And all of a sudden, you got...

[1845] Yeah, I can make...

[1846] I could put it that.

[1847] I could save $1 ,000.

[1848] And once you have $1 ,000, you now have $1 ,800...

[1849] Think about this, $1 ,800 times, let's call it, eight months would get your car paid off.

[1850] I love that.

[1851] If you stick to the budget.

[1852] All right.

[1853] Okay.

[1854] So eight months from now, that car is paid off.

[1855] Now the next probably five or six months will go toward building the emergency fund.

[1856] Then we can be...

[1857] begin investing.

[1858] You're not investing right now through your employer, right?

[1859] Sometimes, and I invest on my own sometimes, because I do like private contract work, so like this weekend I'll go to work and make like 900 bucks.

[1860] That needs to go toward your debt.

[1861] Let's pause all investing.

[1862] You're doing a lot of great things at once, but the problem is you're not going to make progress by doing that.

[1863] I'm focused on one thing at a time.

[1864] Yeah, you are in survival mode and we want to get you out of that cycle.

[1865] That's how you find freedom.

[1866] So hang on the line.

[1867] We're going to send you every dollar premium.

[1868] I'm also going to send you my book.

[1869] breaking free from broke to help you gain some confidence and hope that things aren't going to be this way for much longer.

[1870] Thank you so much for the call.

[1871] That puts this hour of the Ramsey show in the books.

[1872] Thank you to Jade Warshaw, all the folks in the booth, and you America will be back before you know it.

[1873] Hey folks, Dave here.

[1874] You want to hear even more life -changing content from Ramsey?

[1875] Download the Ramsey Network app so you can catch all your favorite shows all in one place like the Ramsey show, Smart Money Happy Hour, and the Dr. John Deloney Show.

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[1877] Plus, the app lets you browse by topic like debt, business, or selling your home.

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