Don’t Fall Into the American Nightmare of Debt

[0] Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help people win in their life, specifically their money, in their work, and in their relationships.

[1] The phone number to jump in is AAA 825 -5 -2 -2 -25 -2 -2 -5 -2 -5 -2 -5 -2 -5.

[2] I'm Ken Coleman, Ramsey Personality, and I'm joined by Ramsey Personality and my good friend, Jade Warshaw.

[3] She's our money guru on today's show.

[4] I'll help you out in areas of work and income.

[5] Getting that income up, and we team up together to take your questions.

[6] 8888 -825 -5 -2 -2 -25.

[7] You ready to go?

[8] I'm ready to do it, Ken, come on.

[9] Ready to go.

[10] Columbus, Ohio, is where we start.

[11] Nick is there.

[12] Nick, how can we help?

[13] Hey, Ken. Hey, Jade.

[14] How are you guys doing today?

[15] We're having a blast.

[16] What's up?

[17] So my wife and I are in a bit of a pickle.

[18] So background real quick is we just got married a few months ago.

[19] We had a really expensive last year with weddings.

[20] our wedding and all that.

[21] We got through it all.

[22] We combined our finances, and we started tackling a big mountain of student loans and various smaller loans together here the last few months.

[23] So we're in the middle of Baby Step 2, and we recently got invited, and actually, my wife was asked to be in the wedding.

[24] We got invited to a wedding out of the country.

[25] Ooh, where?

[26] It's in Italy.

[27] I love that.

[28] Always.

[29] Oh, my goodness.

[30] and she's supposed to be part of the bridal party too, which is even more expensive because you got the dresses and the activities and the Latida.

[31] How much dead do you guys have?

[32] We have about 97 ,000 left.

[33] Okay, 97 ,000 left.

[34] And who is this person to you?

[35] Whose wedding is this?

[36] It's one of her best friends.

[37] Not family or anything, but.

[38] Like recent best friends or best friends from high school or from college?

[39] Like, is this person in her daily life day -to -day?

[40] Yeah.

[41] I would say, I mean, they've been best friends for the last four or five years.

[42] I wouldn't stay since they grew up together.

[43] Like, they didn't grow up together.

[44] Is she the maid of honor?

[45] No. Okay, so she's not the maid of honor, which means she ain't the best friend unless the girl has a sister.

[46] It does matter in this.

[47] It does matter.

[48] Okay.

[49] Right.

[50] I'm going to shoot you straight here.

[51] because I don't think that you guys can afford a trip to Italy and I don't think that you can afford all of the things that goes along with being a bridesmaid because in 2023 these bridesmaid prices have gone through the roof yeah what are we talking about do we have a price tag I'm curious it's it's the parties it's everything so what do you think it's going to cost so the whole thing is about four days I believe that's the minimum the minimum like stay and that's not even including travel I priced out to about 6 ,000 that's if we just did the four days and that's for the two of you I mean yeah flights I can't find anything under like four grand for two flights right and then there's tuxedo dresses is that is that everything included yeah the next question I have is do you have $6 ,000?

[52] Um, we don't.

[53] Um, we did save a little bit of our, um, we got some money from the wedding and we put most of it towards their debt.

[54] Um, and we did save about 3 ,000 of it in case we decided to go to Italy.

[55] So what's the pickle?

[56] Because that implies to me that you, maybe you guys aren't on the same page.

[57] Is that true?

[58] Yeah.

[59] I mean, she's all in ongoing.

[60] Yeah.

[61] Cause is her friend.

[62] kind of on, I'm not me. We can't afford it side, but I don't want to come between.

[63] Let me ask you this, because if it were me, if I were you, and the script was flipped and it was my husband who wanted to go for his friends, I would say, what would you think about us throwing a really nice bridal shower, or in this case, groom's party, for your friend here, state side?

[64] And we can do that, and that way we're finding a way to participate, doing something nice, but we can also keep it within a much smaller scope.

[65] All right, come on, now.

[66] That's Jade, the financial expert, and the very disciplined person who changed her life.

[67] You're legit.

[68] But come on.

[69] I want Jade the woman on this.

[70] Okay.

[71] So if he says that to his wife, I think she goes, sorry, pal, that's not a viable option.

[72] They've got a different way to meet in the middle.

[73] I got one.

[74] I got one.

[75] Okay, hit him, Kim.

[76] He doesn't go.

[77] He says, babe, this is your dear friend.

[78] I know that it would pain you not to go.

[79] It's a big deal.

[80] But, babe, we are in financial.

[81] It's still $3 ,000.

[82] He can go make $3 ,000.

[83] When is the trip?

[84] In June.

[85] Okay.

[86] Between now, no, I'm okay if you don't like this.

[87] I don't know how I feel.

[88] I'm still marinating.

[89] Good, because I am trying to help this man in his marriage.

[90] And I am asking you as a woman to get real.

[91] If this were you and Sam and this was your really good friend and you were in, come on now.

[92] All right, Ken. He has no option but to work his butt off.

[93] He can sell stuff, make some money, come up with, and I don't think it's $3 ,000 if she goes.

[94] He can.

[95] And Nick, we're arguing this for you.

[96] He's got to say something.

[97] Hold on.

[98] Go ahead.

[99] If it's any consolation, we're putting about $1 ,000 a month towards our debt.

[100] Exactly.

[101] This is a cash flow situation.

[102] And for me, I'm like, if you can just go out and earn $3 ,000 for a wedding, I'm like, all I see is your debt going from 97 down to 94.

[103] That's what I see.

[104] I'm like, look, with almost $100 ,000 of debt, how long have you guys been working the baby step two?

[105] How long have you been in it?

[106] It's been like two and a half months.

[107] You're just getting started.

[108] All I see is his wife resenting him for years to come when she's looking at Instagram and seeing the wedding pictures.

[109] She's not because what I get her on the phone.

[110] I'm telling you, I'm right on this one.

[111] She's going to be mad for a minute, but here's the thing.

[112] Can I don't even talk about my wedding on a weekly basis, a monthly basis, or a yearly basis.

[113] It's not even her day.

[114] She's going to get over it.

[115] You're the exception.

[116] Oh, she's going to get over it.

[117] Ken Coleman, you looked at your wedding album?

[118] Man, I'm a dude, but this is a woman.

[119] Weddings to women is a whole different ballgame.

[120] I'm a woman, too.

[121] I just gave you the perspective.

[122] I just don't think you're keeping it real.

[123] Well, okay.

[124] The man is calling us with a money and relationship question, and I am trying to help him with both.

[125] Look, Nick, what are you leaning towards after you heard Ken and I I chop it, chop it up.

[126] What do you think?

[127] I'm between pausing the debt and saving up some money and just, you know, go in the minimum that we need to be there.

[128] We also postponed our honeymoon.

[129] We didn't do a honeymoon because we honestly, we underestimated how expensive Italy was going to be that was supposed to be.

[130] And see, that's the thing.

[131] You didn't do your own honeymoon to do this.

[132] Okay.

[133] He's on the phone talking.

[134] I want you to understand you're grown.

[135] So you're going to walk away and do what you want and whatever makes you sleep at night.

[136] However, what I do, want to tell you is you're just getting started and the choices that you make now are setting the tone for your whole baby step two journey so the moment that you start saying this is the exception or that's the exception you're you're creating a rule you're creating a rule with this decision i agree with you i'm trying to help him out i like i think i because i got the feeling we run it out of time with him but i have the feeling his wife is really like i'm going she wants to go to everybody wants to go to italy and everybody wants to be in their friends wedding.

[137] I'm not saying that that's not the case.

[138] No dude in the world.

[139] Any dude's like, sorry, pal, I can't afford this.

[140] But women, it's a different deal.

[141] So I want to see you sit down and have a candlelight dinner conversation with Mama and see where she's really at.

[142] And then if you really have to split the difference, my option is a viable option.

[143] And not stop paying the debt.

[144] I don't want him to slow down.

[145] I don't know.

[146] I'm saying he's going to cash flow it on top of paying the debt off.

[147] I know.

[148] I wish I was as hardcore as you.

[149] I'm not.

[150] This is the Ramsey show.

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[156] Welcome back to the Ramsey Show America.

[157] We're thrilled you're with us.

[158] We're here to help you with your money and your work questions today.

[159] I'm Ken Coleman.

[160] Jade Warshaw joins me. Our question of the day is brought to you by Neighborly, your hub for home services when you need to make repair, schedule routine maintenance or get local help for home improvement projects.

[161] Go to neighborly .com slash Ramsey, your source to find and schedule reliable home service providers in your area.

[162] All right.

[163] Today's question comes from Dalton in Kentucky.

[164] My wife and I have been.

[165] been stupid over the last year.

[166] We moved across the country for a job and immediately purchased a home while still having student loans.

[167] After finding the reality of our new job was not accurately displayed in the interview process, my wife and I made the move back to our home state, both of us having higher paying jobs than before.

[168] However, we were financially wrecked from letting the dream become a nightmare and have to receive financial help from my parents.

[169] We have just said no to a car loan for four, let's see, we have just said no to a car loan for $45 ,000 for a $45 ,000 vehicle and feel empowered again to start the baby steps.

[170] That's good.

[171] My question is, how do we start and find the motivation after backsliding for the last year?

[172] Now, this is an interesting question because he says they backslid, but he doesn't really explain exactly what all they did.

[173] Because it sounds like you turn down the car loan, which was great.

[174] it sounds like the big mistake here was you moved for a job you bought a home and then you had to kind of come back I don't know what tail between your legs and go back to your home state now unless you took a major hit when you moved from the home I'm not seeing where you made a bunch of mistakes because it says look we both went back to our home state and we have higher paying jobs than before so I'm struggling to see Ken what they look if you say you backslid for a year then I believe you that you backslid for a year.

[175] I don't know exactly what that looks like.

[176] But what it sounds like is you understand the baby steps and you understand the Ramsey principles and you know what you've done.

[177] And so this is really just your wake up call to go, okay, like we made a mistake.

[178] It's not about what I did.

[179] It's about what I did next.

[180] And now you're back in Kentucky.

[181] And so now it's time to get after it again.

[182] Yeah.

[183] You know, it's funny when somebody asks, how can you find the motivation?

[184] We get those questions a lot in different aspects of the work we do here at Ramsey.

[185] And the root word of motivation is motive.

[186] And most of the time we use the word motive, it's in a legal context, right?

[187] And so most of us, we hear the word motive in some type of a legal drama, whether it's a television show or a movie.

[188] And so what are they trying to do?

[189] The prosecutor is trying to prove to the jury that the defendant had a motive to do whatever it is they've been charged with.

[190] So they're going on, what's the motive?

[191] They had motive to act this way.

[192] So when we look at it that way, I'm breaking it down a little nerdy word exercise to then say, well, motivation is just the act of moving forward on something that you want to happen.

[193] So motive is about emotion.

[194] And so if I want to be free of debt, free of these mistakes, free of whatever he's talking about, free of shackled to a credit card or a carpet, whatever it is.

[195] I can't live the life I want, meaning I'm too stressed out because of debt, or I can't do some of the things I want to do because I don't have any money.

[196] Yeah.

[197] So focus on that feeling.

[198] That's very good.

[199] That emotion, and I'm really nerding out right now.

[200] Come on, you're a thespian, Ken. I'm ready for it.

[201] But emotion, again, we've got the word emot, motive, emot.

[202] I'm just saying, get, you want to get motivated, focus on that emotion that is nagging at you, driving you crazy, that is not allowing you, the emotion is the result of I'm not where I want to be in my life.

[203] So whether it's losing weight, getting a better gig, a job, getting out of debt, getting out of a bad abusive relationship.

[204] What motivates someone to act is the feeling.

[205] Yeah.

[206] You change the way you feel, you'll change the way you act.

[207] And so I've got to get into that negative feeling to then pursue what I need to do to get the positive feeling.

[208] I'm not trying to get all psychology on it, but that's how we get motivated.

[209] What's your motive?

[210] I like that, Ken. You do have to think about your motive.

[211] And, you know, my two cents to add to that is I think that people look at motivation often as a, they need that in order to start.

[212] Right.

[213] And I'm like, listen, motivation is really a byproduct of having started.

[214] You get that reward of, ooh, I did it.

[215] You know, you get that hit of dopamine or whatever, and you're feeling good about yourself.

[216] And then you go, hey, this really works.

[217] And then you have motivation and action, which is like, okay, I want to keep going with this.

[218] And so if you're sitting around, you can go Ken's route, which some people are able to just up and motivate themselves and get going.

[219] They feel that emotion.

[220] It's enough to drive them.

[221] And then there's other people who is like, listen, you need to start regardless of how you feel.

[222] You just need to up and start and take it one day at a time.

[223] Don't look at the whole DATGum journey.

[224] Look at one foot in front of the other.

[225] and then tomorrow is a new set of choices that you get to make.

[226] But if you're sitting around waiting for lightning to strike you and for the current to go through your body and then you got the spirit and you move, that may not happen for you.

[227] Motivation is a product of after you start, you feel it and you want to keep going.

[228] All right.

[229] Good question, though.

[230] Thank you for the question.

[231] All right, let's get to the phones.

[232] We go to the Big Apple.

[233] Jason is on the line there.

[234] Jason, how can we help?

[235] Hey, guys, thanks for taking my calls.

[236] Um, quick question.

[237] I live in New York City with my wife.

[238] I'm 37 years old.

[239] We have a kid.

[240] We've got one more on the way within the next couple weeks.

[241] Wow.

[242] And we're thinking about, uh, we're thinking about moving to the suburbs.

[243] Um, we have no debt.

[244] We're in a pretty good financial situation.

[245] And I'm thinking about taking out a small mortgage, which goes against everything I have ever learned in life in terms of getting into debt.

[246] And it scares me to death.

[247] Um, We have our budget, we can afford it, but again, it's money that I'm going to be paying to a mortgage that I can be saving and use in the future.

[248] So my question is, you know, if I can afford something, how do I know if it's a decision and am I making a mistake by taking out a mortgage right now?

[249] Well, listen, let me be the first to say, we are a no debt, you know, that's our philosophy, no debt.

[250] But the only debt that we're never going to, you know, get mad at you for taking out is a home mortgage when you do it the right.

[251] way and within reason.

[252] So if you, you know, if it's your principle in life that you just, like Dave Ramsey does not borrow money, not even for a home purchase, okay?

[253] So if you want to go to that level and if you've decided, hey, I'm Jason and that's my standard, I'm not going to take that away from you in this moment.

[254] But I would like to introduce you to the idea if you're open to it, that look, taking out a small amount for a mortgage is not a bad thing if you would like to be open to that.

[255] How much are you talking about taking out?

[256] it would be a pretty small mortgage probably between four and five hundred thousand okay and um what would be the cost like are you putting anything with that money we'd be putting a significant amount of money down and i guess i forgot to say we we're our apartment in the city we we've been saving up for a very long time we bought our apartment all cash wow and i'd be using all that that equity to buy a house with a mortgage on top so what's the beautiful house with with the equity that we have absolutely so we don't we don't need And again, I would just be mad at myself 20 years down the line if, you know, I said, why did I take the mortgage when I could have afforded a house?

[257] Jason, give me two numbers.

[258] What's the purchase price of the house you're talking about?

[259] And what's your combined income?

[260] Yeah, so a purchase price is $2 million and a combined income is about $5 ,000.

[261] All right.

[262] That's what Jay needed.

[263] Okay.

[264] Yeah.

[265] So, I mean, you're paying $1 .5 million in cash, which is amazing.

[266] Incredible.

[267] And then you've got a really strong investment.

[268] income, to where, look, chopping down a mortgage of four to 500 ,000 when you've got a $550 ,000 mortgage, especially since you are now moving out of the city, so your cost of living is going down.

[269] I, Jade Warshaw, would 100 % do that, and I would sleep like a baby.

[270] Yeah, because of your income and the size of the down payment.

[271] Do you understand what we're saying, Jason?

[272] So this is not a crazy move.

[273] Okay.

[274] It scares me. I've never been in debt in my entire life, so it scares me to death.

[275] Well, then don't do it.

[276] Most people don't put down three quarters of the amount of the loan in cash.

[277] You're a unicorn just by those numbers alone with your income and the amount you put down.

[278] But listen, if you don't feel right about it.

[279] Don't do it.

[280] I mean, if you don't feel good about it, a $1 .5 million house is amazing.

[281] Why ask Kim, how much longer would it take to save up to pay cash for something like that?

[282] Those houses are still going to be there.

[283] That's right.

[284] That's good, Ken. You've got options.

[285] You got options, Jason.

[286] I think you've got to trust your feelings.

[287] Talk it out with the wife.

[288] Make sure we're on the same page on all that.

[289] Financially, for taking out a mortgage, you guys, you easily meet our criteria is what we're telling you.

[290] So thanks for the call, Jason.

[291] All right, don't move.

[292] She's Jade Warshaw.

[293] I'm Ken Coleman.

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

[295] Welcome back to the Ramsey Show, where we help you win with your money in your work and in your relationships.

[296] I'm Ken Coleman, Jade Warshaw, joins me. And we are here for you this hour.

[297] The phone number to jump in is 888.

[298] 825 -5 -2 -2 -25.

[299] That's triple -8 -8 -25 -5 -2 -2 -5.

[300] Let's go to Tampa, Florida.

[301] Connor, how can we help?

[302] Hey, guys, how you doing?

[303] Great.

[304] What's going on?

[305] Yeah, so I'm interested in pursuing a graduate degree, and I am 24, single, no dependents.

[306] I'm on, I've completed Baby Step 3, and my question is paying for that graduate degree without going to student loans.

[307] So getting some guidance on doing that.

[308] How much is it going to cost?

[309] A master's program is looking about $45 ,000, and a PhD is looking at double that.

[310] Are you planning to pursue both or just considering both?

[311] I'm going through the process of figuring out what program is best for me because I really want to be able to work.

[312] What do you want to do?

[313] I want to be a professor in international relations.

[314] All right.

[315] And does that require a PhD?

[316] I have become a professor, yes.

[317] So this is the only way for you to teach at the level you want to teach.

[318] You have to have a PhD.

[319] Well, it would start off with getting a master's or going full into a four -year PhD program.

[320] So, yes, that is the route.

[321] Which is most efficient.

[322] Could you jump straight to the PhD?

[323] In other words, I don't know this world, the higher ed world like you do.

[324] Do I need the master's if I can go straight to a PhD?

[325] it wouldn't necessarily you would need the master's, but I'm trying to work full -time while also paying for this program part -time.

[326] So the programs I've been finding out there is it looks like it'd be easier to get the master's program first and then jump to do a PhD program full -time.

[327] I get that, but my point is, does the master's help you make more money in the meantime?

[328] Is that why you think you need the master's?

[329] I'm a teacher, so it would give me a little bit of, of a bump, but it would not give me a big bomb for finishing that Ph .D. That I wouldn't do it.

[330] You're asking, I wouldn't do it.

[331] It's not giving me enough bump, and you know what it's doing?

[332] It's delaying the action needed to get into the PhD program, and if I'm going to cash flow it, meaning can I do it as I go, or do I need to press pause and just save up the money for the Ph .D. program, which you said is how much again?

[333] it's been looking anywhere from like 90 to 120 depending on what school you go to I mean if it were me I would skip the masters I'd I'd start busting it working as much as I could this is a long -term play and I'd save up the money and so to me the masters is effort that doesn't ROI I could be using that time to work extra to tutor to take a different job get out of the education space and get a higher paying job I've got to come up with the way to cash flow this Ph .D. Because the Ph .D. in this case is the only way in the arena.

[334] So why spend the time, effort, and money on something that isn't necessary?

[335] Understood.

[336] Understood.

[337] Unless I'm missing something.

[338] I'm not trying to put you in a corner.

[339] I'm just going to walk through this logically so that I'm putting all my effort into getting that Ph .D. That's the ticket.

[340] No, I understand.

[341] I understand where you're coming.

[342] from.

[343] Jade, any thoughts on that?

[344] How long does it, I have two thoughts.

[345] A, how long does it take to get the PhD?

[346] A, full time, you're looking at four to five years.

[347] But did you say you're doing part -time?

[348] Oh, my idea was to keep working my current job and to pursue a master's program, then jump into the PhD program, because the master's program, I can work and pay off as I go with the amount of current cash I have.

[349] Right, but if you go, if you take Ken's route and you go straight to the Ph .D. Are you doing that full -time?

[350] Or are you having to do like a...

[351] Yes.

[352] Okay.

[353] Yeah, that would be full -time.

[354] And the question is, can you afford, what is it, $22 ,000 a year for the next four years?

[355] Can you afford that?

[356] Currently, no. Currently no. So then my question for you is, what's the plan?

[357] Because we can't enter into this without a plan to being able to pay for it.

[358] Or else you will do what so many other people do in default to student loans thinking that's your only option.

[359] The plan as patience.

[360] We've got to wait a little bit.

[361] You got to wait.

[362] You got to work and you got to work and that means you got to wait.

[363] And if you wait, it's worth the wait.

[364] I can tell you because you're going to come out of this.

[365] See, here's the deal.

[366] Can I play another little numbers game with you, Connor?

[367] You willing to do this?

[368] Sure.

[369] All right.

[370] Let's say you do what most people do and you take out a loan for this.

[371] So you're going to be how much in debt?

[372] 90 to 120.

[373] He's going to cash flow.

[374] I said about 40 to 50 grand in student loans are probably taken out.

[375] Right.

[376] So 40 to 50.

[377] And so how much are you going to make?

[378] What's a reasonable salary you're going to make if you get this professor job right out of being a Ph .D.?

[379] What's the salary going to be?

[380] 80 grand.

[381] So 80 grand starting out.

[382] Now I want you to fast forward.

[383] I want you to fast forward to this reality because I believe you'll get there.

[384] And I know you can get the loan.

[385] So now you're going to be making 80?

[386] This thing you've been working for you.

[387] years for going full time all the time to put in there and then you're making 80 and you owe half of your gross pay more you see what i'm saying i do you got it fast forward nobody ever fast forward into this discussion because everybody goes you're going to get a phd and you're going to be dr connor so and so and you're going to have this awesome international relations job at this great campus but you're going to be broke and you're going to be miserable i'm asking you to wait I'd rather deal with the emotion of patience than the emotion of misery.

[388] They're very different emotions.

[389] And let me add one to that, Ken. You're working hard right now, and you're going to be working very, very hard to get this Ph .D. Let's pretend that you go through with your way, where you take out the $40 ,000 to $50 ,000 in student loan debt.

[390] You work your way through this program.

[391] Work fast forwarding, like Ken said.

[392] Here's the way you're going to feel.

[393] relief.

[394] I finally got this PhD.

[395] I finally got through.

[396] The last thing you're going to want to do is buckle down and live on beans and rice, rice and beans to pay off $50 ,000 of debt.

[397] And what so many people do is go, I've worked hard.

[398] I'm entitled.

[399] I should be able to just come home, kick my feet up, enjoy my paycheck.

[400] You're not going, I'm just telling you, you're not going to want to pay off this debt.

[401] And that's when people get into trouble because it's starts ballooning.

[402] And it's like, all right, I'll get to it later.

[403] I'll get to it later.

[404] And one thing with student loans, if you try to get to it later, it'll get to you.

[405] What's the dream for us a little bit?

[406] What would be an ideal job after getting to the PhD?

[407] Give me a university that you're, give me a city, a university.

[408] Talk me through that.

[409] Either I'm from Florida, so either UCF or be a top tier, you know, Ivy League institution.

[410] Yeah, okay.

[411] So imagine being in any of those places and the positive side of this.

[412] as you waited, and now you're making 80 ,000, and you're comfortable.

[413] You're comfortable.

[414] You can actually enjoy your life.

[415] You don't come home after a full day of teaching and stressing out about the bills.

[416] That's what I'm asking you to wait for.

[417] I'm asking you to wait for the gig, but the gig without pressure.

[418] That's worth waiting for.

[419] It's my take, Connor.

[420] But listen, Jade and I are the rare people they're going to tell you this.

[421] Everybody else is going to go, ah, it's fine.

[422] It's the price of admission.

[423] And that's just false.

[424] It's like half truth.

[425] Yeah, it's the price of admission.

[426] You got to pay the 90 to 120.

[427] I don't question that, but you don't have to loan it.

[428] That's right.

[429] That's right, Ken. Yeah, we're going to tell you the hard truth.

[430] We're going to look not just out right now, but like you said, Ken, at the future.

[431] And that's where the decision is made right there.

[432] So, Connor, how's your stomach?

[433] right now?

[434] No, I'm just taking in your guys their advice.

[435] Indigestion?

[436] A little stress.

[437] You feeling some peace about this?

[438] What are you thinking?

[439] I've made no decisions yet, so I'm really just trying to figure out.

[440] I have your guys' advice.

[441] And everybody else.

[442] Well, here's the deal.

[443] We are in the minority, my friend.

[444] So at the end of the day, this is up to you.

[445] But I'm asking you to press, fast forward, and play that out and really sit with those emotions.

[446] Most people don't do that.

[447] They deal with it when it comes.

[448] And then they're like, golly, this sucks.

[449] Look, when I was in elementary school, there was a poster on the wall that said, in a world of followers, dare to be a leader.

[450] And when you go to school and pay cash for it, you are leading, my friend.

[451] Connor, I think Jade just doubled dog dared you, as we used to say at elementary school.

[452] We'll see what he does.

[453] Will he be one of the masses?

[454] Or will he be one of the few leaders who does it differently?

[455] That's the question.

[456] We'll talk about it on the break.

[457] Don't move.

[458] We'll be right back.

[459] This is the Ramses show.

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

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

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[463] That's why the only company I use and have recommended for over 25 years is Xander Insurance.

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

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[467] Call them at 800 -356 -42 -82, or visit zander .com for instant online quotes.

[468] Welcome back to The Ramsey Show.

[469] Thrill that you are with us.

[470] I'm Ken Coleman.

[471] Jade Warshaw joins me. The phone number to jump in is AAA.

[472] 825 -225.

[473] Jade is our resident money expert, and I'm the work expert.

[474] So those two issues go together.

[475] So, hey, if you're feeling like 20 -24 is your year, you feel like I want to make a change, I want to make some more money, but I'm in the baby steps.

[476] Ken, how do I do that?

[477] I love those kind of questions.

[478] or just anything related to your work will take those.

[479] Jade, not Wade.

[480] Jade will wait in, is where I was going, on those as well.

[481] And so we're always thrilled to take your questions.

[482] Whatever you want to talk about America, we're here for you, AAA 825 -5 -2 -25.

[483] Let's go to Brandon now in Buffalo, New York.

[484] Brandon, how can we help?

[485] Hey, guys, thanks for having me on.

[486] How's it going?

[487] We are having a blast.

[488] What's happening with you?

[489] so I'm 24 I have $260 ,000 in student debt I have no other debt where's my tums I got to look for them wow where'd you go to school and what'd you go to school for so yesterday I took my my last law school exam I went to Syracuse University College of Law I take the bar in February nice okay okay so what kind of law you're going to practice personal injury is the job I accepted after I passed a bar and the reason I'm asking is I'm going to get out of jade's way but I am curious what do you think your first year since you accepted the job I'm guessing they talked about potential money I'm just curious what you think you could make in those first 12 months yeah so I already signed the contract the base salary is 80 ,000 and then there are there are bonus offers but I don't know what that entails so somewhere between 80 and 90 I would imagine okay okay Okay, so what's your question?

[490] I have two questions.

[491] One is paying, is putting myself in that much debt for a law degree worth it given my starting salary?

[492] Well, shoulda coulda would have, should have would have, my guy.

[493] Yeah, I know.

[494] Hindsight's 2020.

[495] Hindsight's 2020.

[496] So we're here now.

[497] We'll just accept where we're at and we'll move on from here.

[498] So let's make it worth it, right?

[499] my answer is it better be okay that's what i'm saying um yeah we're going to make it worth it so what was the second part of your question how to tackle this debt so 60 of it is private student loans from undergrad and 200 of it is federal loans for law school okay so should i tackle that 60 ,000 private higher interest rate loans first and pay very little on the 200 ,000, or should I kind of pay it all equal at the same time?

[500] Well, my first question would be to you, is this your only debt period?

[501] Like, do you have any other debt besides student loans?

[502] No, no credit card, no personal loans.

[503] My car is paid.

[504] I rent.

[505] No other debt.

[506] And then my next question to you would be, do you have any money laying around for savings?

[507] Do you have any money in stocks?

[508] Any other money that you could get to?

[509] That's not retirement savings.

[510] nothing significant.

[511] Well, what do you have?

[512] Like $5 ,000 in my bank account.

[513] Okay.

[514] I'm glad you told me about that.

[515] Okay, so I'll, since you asked, I'm going to walk through our series of baby steps, and this is exactly what I would do if I were in your shoes.

[516] And by the way, I was in your shoes.

[517] My husband and I paid off 280 ,000 of student loans, okay?

[518] And this is what we did.

[519] We set $1 ,000 aside of our money.

[520] We didn't have much, but we set $1 ,000 aside.

[521] we said this is our, you know, rainy day fund.

[522] This is our starter emergency fund.

[523] It's not much, but if something goes down, is there in the pocket waiting for us, okay?

[524] Then we took any money above all of that, and we decided we're going to throw that at our debt snowball, and that's baby step two, is you pay off all of your debt except the mortgage using the debt snowball method.

[525] Now, here's how that works.

[526] And I want to be specific with student loans because it can get a little hairy.

[527] With student loans, a lot of times you'll see, okay, I've got one.

[528] one big loan, it's $30 ,000 and there's one payment.

[529] But if you really look closer, it's divided maybe into four or five or six or seven loans, where all of that, that one payment that you make, it's getting dispersed across those six or seven loans.

[530] So what I want you to do is log in and really make sure you're looking at the loan in full, because what you're going to end up doing is listing these loans in order from smallest to largest.

[531] And what's important about knowing that is, let's say, okay so you said you've got a $60 ,000 personal loan right now is that just one payment that you're responsible for one monthly payment the $60 ,000 I'm sorry is in a private just it was a private student loan right um that I'm not paying on that yet I still have a few months because I'm just finishing law school but I think it will be just one payment it'll be probably one payment but if you look closer it's probably divided over semester that you took it out so when you do that that would be technically that $60 ,000 loan is going to be the first one in your debt snowball, okay?

[532] But with the debt snowball, you make minimum payments on everything, but you put all the extra money on the smallest debt.

[533] So on that $60 ,000, you're going to need to look and go, okay, it's divided into four little ones.

[534] What's the smallest one?

[535] And you're going to have to call in and say, hey, I already made my payment for the month, but here's $800 extra dollars.

[536] And I want it to go to this specific debt because if you don't tell them that, they're going to spread it across all those little ones and you're not going to make headway.

[537] Does that make sense?

[538] Yes, it does.

[539] Okay.

[540] So you got to do it like that and then you're going to see those 3 ,000 gone.

[541] You're 4 ,000 gone and you're going to knock them out really fast.

[542] So that's thing one.

[543] The second thing I want you to consider doing is while you're paying off these student loans, this is the only, only time that I would suggest doing some sort of IDR with the federal loans so that you can get them to the smallest possible balance so that you can have more money freed up to throw at your smallest debt.

[544] Does that make sense?

[545] Okay, yeah.

[546] This is not a long -term play.

[547] This is not you kicking the can down the road.

[548] This is you going, hey, federal government, I want to make these loans as low as possible because I have to make minimum payments on everything.

[549] I have more money freed up to put on my smallest debt.

[550] In this case, it's that private student loan.

[551] And then that's how you do it.

[552] You work through.

[553] You pay off the smallest one.

[554] Then you take all that money.

[555] it at the next smallest debt and that's how the snowball goes and it's going to blow your mind how much progress you're going to make on this especially with your salary are you a single guy i am not i am not i have i i have a girlfriend who we're moving planning on getting engaged soon she is in medical school oh and also have oh lord okay so she's got the medical debt um well first of all you are single until you until you get married you're single so don't combine Don't combine finances either.

[556] So when is that, what do you think the marriage date's going to be?

[557] What it real, I mean, just give us an idea.

[558] We chat about it a lot now.

[559] We're thinking a couple of years from now.

[560] Oh, boy.

[561] Okay.

[562] So while you're separate, you're working your snowball, she's working her snowball, and you guys are pinky swearing that you are going ham on your, you know, respective debts, right?

[563] Yeah.

[564] For the older people in the audience, I needed an interpretation on what she meant by that a couple weeks ago.

[565] that means getting after it.

[566] Getting after it.

[567] Now, what's her med school debt going to be, or is it at this point?

[568] So it will be total about 200.

[569] Oh, boy.

[570] Did you used to watch Sanford and son?

[571] And he go, I'm coming to meet you.

[572] I need my own sound effect.

[573] I'll just make it myself.

[574] I'm just going to grab my chest.

[575] That's a lot, man. It's a lot.

[576] But you guys can do it.

[577] You can do it.

[578] What's her salary going to be coming out?

[579] Do you know?

[580] she's hoping she's hoping around 200 okay that's better that's good okay okay I got advice for you my friend you need a police scanner invest in a police scanner and you are at every every accident there is you need to get a fat bonus is there any commission on you bringing in new business there is I'm serious I'm not joking she thinks I'm joking you told this man to chase the ambulance wow there's a reason he's in personal injury you can't afford commercials you're the low man on the totem pole.

[581] I would literally figure out what, now, police scanner may be ridiculous, but kind of makes sense to me. I'd be showing up at every scene of an accident, making sure everybody's okay, and right before they go home, going, hi, my name's Brandon.

[582] You're next if?

[583] That would be like, I mean, dude, I got to get out of debt.

[584] Yeah, I hear you.

[585] I must say, for now, at least the job I just accepted, I represent the other side.

[586] So I represent the defendant being sued by these people.

[587] Okay.

[588] But I can still get a commission on bringing in new clients.

[589] No, you know what?

[590] I'd show up at the same scene of the accident, and instead of the person that's got the stiff neck, you're going to the other guy who's like thinks his life is over going to listen, I'm your guy.

[591] Like he stopped short, Daniel.

[592] I'm going to fight for you.

[593] I'm just saying, you know.

[594] Wow, it's good, Ken. Yeah, he needs to make extra money.

[595] You're right.

[596] I mean, I would be everywhere.

[597] I would sleep with one eye open, police scanner and one ear.

[598] I mean, man, I don't know.

[599] I'd get after it.

[600] Hey, good hour, Jade Warshaw.

[601] Hey, don't move.

[602] We're coming back.

[603] This is the Ramsey Show.

[604] Live from the headquarters of Ramsey Solutions.

[605] This is the Ramsey Show.

[606] It's where we help you, America, win in your life, specifically your money, your work, and your relationships.

[607] All three of those are tied so closely together.

[608] If you're not winning in one, you're probably losing in a few, if not all.

[609] So we want to help you.

[610] I'm Ken Coleman, Jade Warshaw, joins me. She's our money expert.

[611] I am your expert in one.

[612] work today.

[613] So we'll take any and all of those questions.

[614] Triple -8 -8 -25 -5 -2 -2 -25 is the number.

[615] AAA 825 -5 -2 -2 -5.

[616] We start this hour with Jason in Salt Lake City, Utah.

[617] Jason, how can we help?

[618] Hey, Ken, my question is mostly for you with what you would do in my shoes.

[619] I currently am renting, and I can afford a house and or a condo in cash.

[620] or a condo in cash, but I am enjoying my rent, where I live.

[621] I love the place I live, and I don't necessarily want to buy a house or condo yet, and I'm wondering what you would do if you were in my shoes.

[622] I would do exactly what you're doing.

[623] With the evidence you've given me so far, if you enjoy where you're living and financially you sound like you're in really good shape, how much cash do you have?

[624] I have about $5 .50.

[625] Are you single?

[626] I am.

[627] How old?

[628] 27.

[629] And what do you love so much about renting this particular place?

[630] Like, give me more on that.

[631] Yeah, I got a great view, and it's nice that I don't really have to worry about anything.

[632] You know, it's all after I pay my rent, no maintenance or anything like that.

[633] And I'm concerned, though, you know, I don't, obviously I want to get married and have kids and whatever, but I know once if and when I buy a house that may change when I'm married, so I was thinking the condo route, and you get the HOA fees and all of that.

[634] No, you don't want a condo.

[635] When you get the wife of the kiddos, the condos, that's not the ideal situation, especially where you are.

[636] How much do you make and how much are you saving and then how much are you investing?

[637] Give me the answer to those three questions.

[638] Yes, I make 120.

[639] I max out all my other my 401k and HSA and all those I think I can put in 30 % and then I invest the rest into my brokerage account so the 550 that you have is that in the brokerage or is that across everything yeah that's in the brokerage yeah very good how did you save that up so fast how long did it take you yeah so some of that is from my parents and then I have I would say hit the DNA lottery, so I've definitely, you know, they paid for my school.

[640] And I've definitely worked hard as well, but I haven't had any debt or anything like that.

[641] Yeah, you know what?

[642] Because he's investing so much, I mean, he's solid.

[643] Yeah, I, listen, don't feel the itch.

[644] I would not feel the itch if I were you to buy at this stage of your life.

[645] You're going to buy.

[646] And I think that when your family situation changes and all that, I'd keep stacking cash because you're going to be able to pay for whatever you want cash at the rate you're going.

[647] I may feel contrary to that, Ken. Well, of course you do.

[648] I may feel a little.

[649] say yin you say yang but i'm fine with that i just don't know why he has to he likes where he lives he likes the view he's in great financial shape he's not married yet why should he buy a house well i i don't think you should feel rushed don't get me wrong i don't think you should feel rushed but my questions would be okay like how long have you been renting for the last seven years for the last how long have you been renting and living on your own yeah on my own about four i guess four or five years and I've been renting.

[650] Yeah, but I had roommates.

[651] This is the first almost coming up on a year where I've been on my own own.

[652] I have not had roommates.

[653] Okay, so you've rented for five, six years.

[654] What's your rent?

[655] I'm sorry?

[656] How much do you pay in rent?

[657] $1 ,400.

[658] All right.

[659] I'm going to give it back to Jay.

[660] Jay disagrees with the year.

[661] I want to know this.

[662] Well, then my next question, so I'm just, I'm just gathering more facts before I really form.

[663] My next question to you is, is there a significant, is there a lovely lady in the picture, is all I'm asking?

[664] there is not no I am single and so my looking look it so if you know anyone listen hold on single ladies in Salt Lake there's your invitation well here's where my mind goes to I don't want you waiting to buy a home because I might meet a lady and we might get married and that's probable you probably will be you don't know when that's going to happen so I don't want that to be the reason that you wait to get into home ownership and I also don't want the reason that you wait to get into home ownership and I also don't want the reason home ownership to be because of, oh, these rates, they're so high.

[665] I'm just going to wait till rates to go down.

[666] I just want to make sure that those aren't the driving factors.

[667] Are they the driving factors?

[668] Not necessarily, no, but like Jay said at some point, I need to buy, you know, it's like you don't want to rent forever.

[669] Yes.

[670] I agree, but that's not the scenario.

[671] I'm going to tell you, I respectfully disagree with you.

[672] He's single.

[673] He's got a great view.

[674] He's single.

[675] He's got a view, but I just am thinking.

[676] I'm thinking.

[677] I'm going to tell you.

[678] I'm about overtime.

[679] Here's what I know about you, Jason.

[680] You are a great saver.

[681] You're great at getting after a task.

[682] And my thought is like, listen, you buy a house, you own it in cash.

[683] You have the ability to build wealth so quickly.

[684] He's going to have this equity working for him.

[685] He's going to pick a place that he loves.

[686] He's going to pay for it in cash.

[687] It's going to build up.

[688] He's going to save more money.

[689] He's a kind of guy that's going to have a giant real estate portfolio.

[690] But regardless, there you start in three, and don't get me wrong.

[691] I'm not saying he has to be rushed and buy a house tomorrow, but I'm saying, listen, if I were you in the next two years, I'd be thinking about owning a home is all I'm saying.

[692] Okay, then, all right, if I'm going to meet you in the middle on this one, I'd say it better be a smaller one so that we just call it a real investment, not the home, because we don't know what his situation is going to be when he gets a woman.

[693] She doesn't like his house?

[694] Well, no home is the home.

[695] Anybody who thinks this is the one, I'm going to live here forever.

[696] No, you're not.

[697] What do you recommend?

[698] I think, listen.

[699] A $300 ,000 house?

[700] I would spend his money.

[701] $5 .50?

[702] He's in Salt Lake City, Ken?

[703] I wouldn't spend all $5 .50 on it.

[704] Jason, what's it cost to get what you need in Salt Lake City in the area that you like?

[705] To get a nicer home, I would say, around $5 .50, but I could get one around $3 to $400.

[706] But what's a nicer home?

[707] What is that?

[708] How many bedrooms?

[709] Oh, I would say, like a minimum, a three -bed, two -baths home.

[710] Yeah.

[711] You're a single guy.

[712] But my point is...

[713] Exactly.

[714] That's why I don't need that.

[715] You don't need that, and I'm not saying that he has to buy a house for his future family.

[716] I'm not saying that at all.

[717] You want him to buy a $550 ,000 house cash as an investment property?

[718] No, I'm saying I just want him to buy something that he can live in.

[719] I'm not saying he has to spend all his money.

[720] All I'm saying is that we know the correlation between homeownership and wealth building over time.

[721] That's all I think he's going to get there.

[722] I just think in his single situation.

[723] But his hair's not on fire.

[724] His hair's not on fire.

[725] But my thing is like, listen, all these markets are different.

[726] So on Salt Lake City, if you're trying to get a two -bedroom, you know, two -bathroom condo or townhouse, and it's 400, like, that's a reality in a lot of places.

[727] Do you have the option to buy the apartment you're in with the great view?

[728] Unfortunately, no. I wouldn't.

[729] Listen, I've been to Salt Lake.

[730] There's a lot of views.

[731] I bet you you could get a house with a nice view, too.

[732] Or buy a condo or buy a townhouse with a lot.

[733] Listen, I love ownership, so.

[734] And I don't disagree.

[735] I just, because he's single and he's sitting on a lot of.

[736] all that cash.

[737] I just would preach a little bit of patience right now.

[738] He's been patient for seven long years, Ken. That was my Titanic voice, by the way.

[739] I like that.

[740] I like that.

[741] I feel like that.

[742] I feel like I see Rose and what was the guy Jack, Rose and Jack, bobbing in the cold, icy waters.

[743] Very interesting.

[744] Yeah, you're not wrong to buy a house.

[745] It would be a great move for you, but I also like the freedom.

[746] Go get the lady.

[747] Then we figure out the house.

[748] And you're stacking cash on the way.

[749] Get after it, young man. What are you waiting on?

[750] There's a lot of fish in the sea.

[751] What are these guys waiting on these days?

[752] This is the Ramsey show.

[753] All right, you're listening to the Ramsey show.

[754] Ken, I had to hijack the mic from you just for a moment.

[755] It's okay.

[756] It's in good hands.

[757] What's going on?

[758] Listen, a lot of you probably remember a couple months back, really back in the summertime, Ken, I kind of went nuts on the mic because as a country, our spending had gotten completely under control, out of control.

[759] You know, we were looking at, you know, a trillion in credit card debt for the first time.

[760] And, you know, inflation, we were still dealing with that.

[761] And, you know, I just had to let folks know, listen, guys, we've got to get in control of our money and quit going on this roller coaster.

[762] And it's interesting because really, I mean, over the past, I'm going to go with three years, has been crazy.

[763] Everything from COVID.

[764] And then we saw the housing market just change.

[765] abruptly.

[766] I mean, it's really been a roller coaster.

[767] You're looking at inflation.

[768] You're looking at mortgage rates, just so much change.

[769] And now here we are into the holiday season yet again.

[770] And people are still spending as though nothing's wrong.

[771] They're spending like nothing's wrong.

[772] But when you really look at the stats is crazy.

[773] I mean, again, here we are.

[774] Over the summer, it was like, oh, man, we hit a trillion of credit card debt.

[775] And now we're at 1 .08 trillion.

[776] sure it's just climbing up 1 .54 billion year over year that's unheard of unbelievable and so now we're seeing interest rates obviously it's more and more expensive to borrow money so interest rates on credit cards upwards of 20 percent right wow these numbers are going just they're going mad and now we're starting to see uh the results of our spending choices right we all got into houses in 2021 that we couldn't afford, right?

[777] Everybody bought cars because there's a shortage and it's too expensive to buy used and everybody bought cars they couldn't afford with car payments, $700 a month, $664 a month, $882 a month.

[778] Maybe I called your number there.

[779] And we're finally starting to see, okay, the dust is settling a little bit.

[780] The dust is settling and we're hearing it with, how could I possibly afford to buy a house?

[781] it's the interest rates and we're blaming the interest rates as though it's 1984 right and it's not it's 2003 if it was really bad we'd be seeing 18 and 16 and 17 percent but we're we're losing we're losing our marbles over you know this three percent increase or four percent increase and I'm like is that really the problem our mortgage rates really the issue or is it the pattern that we've created with how we're borrowing money and living on more than we make That's a great question.

[782] And it comes top down.

[783] If you look at what Congress is doing, both sides of the aisle, both parties are equally guilty.

[784] That's right.

[785] The American debt.

[786] Our country's debt.

[787] It's kind of the entire attitude about debt from our leadership down is just, well, we'll figure it out.

[788] We'll figure it out.

[789] Look at this.

[790] Look what they threw on the screen right here.

[791] That'll make you break out in hives.

[792] Yeah, that is making me break out of hives.

[793] If you're watching, you can see this.

[794] If you're in our listening audience, James and the team has thrown up, literally a, this is a ticker.

[795] board.

[796] I don't know what else to call it, but it is a running total of our national debt right now.

[797] Oh, that's painful.

[798] And that's $33 ,915 billion, and it's going up.

[799] We're just watching it rise.

[800] It's crazy.

[801] Oh, wow.

[802] That, look, some of us need to do that same exercise with our bank account and look at it.

[803] Look at, is your savings going down or is it going up?

[804] Is your investment going down?

[805] Do you even have anything?

[806] or you do you know what I'm saying?

[807] You need to take a look at how you're spending your money.

[808] Because like I said, we're seeing these numbers coming in.

[809] More and more people can are defaulting on their car payments.

[810] More and more people are taking 401K loans, whether it be for hardship or for other things.

[811] And the average that they're taking out is $5 ,000, $5 ,000 that they're robbing from their future self to pay for what?

[812] We don't know.

[813] Have we begun to see any pain points in the data?

[814] Have you seen anything on the, the, reemergence of student loans they just started back in October so we're still relatively we're inside of three months right here listen that's another part to this and you know we knew that it was an issue because after student loans came back on the scene it's like listen people are already drowning yeah right they're already underwater as it is and so of course Biden administration rolls out that 12 month on rent period where they said listen if you're not ready to pay your student loan you don't have to right now we'll give you 12 months we're going to continue to add interest but you won't be penal you won't be penalized if you won't pay it.

[815] And I'm like, listen, you are being penalized.

[816] That's interest rising, okay?

[817] But the point here is something has got to give.

[818] Something has got to change in your life because the numbers don't lie.

[819] The math is mathing, whether you like it or not.

[820] We're looking at this and we're going, okay, you're deeply in debt.

[821] You're piling it up and you haven't changed your ways.

[822] And just recently Ken, the other day I did a media response and they said, Jade, what do you think about doomsday spending?

[823] And I said, well, what is that?

[824] And they said, it's people looking at the current economic situation and going, that really sucks.

[825] I'm tired of dealing with it.

[826] I'm tired of looking at it.

[827] I'm just going to live my life.

[828] So it's basically another version of like yolo spending or revenge spending.

[829] Oh, okay.

[830] I thought this was the preppers.

[831] This is different.

[832] No, this is different.

[833] This is people looking and going, I'm just tired of the roller coaster.

[834] I'm tired of having to cut back because of inflation.

[835] I'm tired of having.

[836] So I'm just going to forget it.

[837] you know double make hair i'm just to spend my money wow and i'm like really that's the response like you run in the you you you're going to keep running into the fire it's consuming you it's consuming your future it's consuming your bank account you can't even pay for your kids college and you're just going to keep spending that is not the solution no it's not here's what i think i think it's the beginning we're about to come into a new year 2024 and i think that you have a decision to make and that decision is you can either continue to bury your head in the sand and go, this sucks.

[838] I don't like it, but I'm going to keep doing my thing.

[839] I'm going to keep spending for Christmas.

[840] I'm going to keep getting new car loans.

[841] I'm going to keep living my life because, quote, I deserve it.

[842] Or you're going to go, you know what?

[843] I don't have any money.

[844] I argue with my spouse about money every single day.

[845] Yesterday, I yelled at my daughter for asking for lunch money.

[846] Gas is a struggle.

[847] Groceries are.

[848] struggle.

[849] I never go on vacation without putting it on my credit card.

[850] My daughter's going to go off to college and she's going to have to take out student loans.

[851] You're going to look at the reality of your life and you're going to go, what can I change?

[852] What do I need to change?

[853] And you're going to write it down.

[854] You're going to make a list.

[855] And for once in your life, you're going to make a plan and you're going to stick to it.

[856] Luckily, we're here to help you with that.

[857] And in the new year, we're going to have so much.

[858] Listen, I talk about every dollar all the time.

[859] I talk about financial Peace University.

[860] In the new year, this is your chance because I know who I'm talking about.

[861] I'm talking to the people who circle around the Ramsey network, right?

[862] Y 'all circle around.

[863] You watch the show.

[864] You come to events here and there.

[865] But you've never actually done the thing.

[866] You've never actually gotten on the plan, stuck to it, gotten on a budget, stuck to your budget.

[867] This is your chance.

[868] Are you going to keep taking out credit card debt?

[869] This is your chance to cut the credit card up once and for all and be done with it.

[870] This is your choice.

[871] This is your wake -up call.

[872] What we're looking at, it's a nightmare.

[873] It's not a dream.

[874] Being in debt, not living paycheck to paycheck.

[875] 67 % of Americans are living paycheck to paycheck.

[876] But they're not ready to do anything about it yet.

[877] You can make that choice.

[878] That's all I'm saying, Ken. People have a choice to make.

[879] Well, and I think you make a very compelling case that this is an issue, whether it be money, your weight, substance issues, relationship issues, in a job you can't stand, we as humans would rather be miserable than uncomfortable.

[880] Yeah, that's right.

[881] And what you've presented here is an unbelievably overwhelming case that people would rather be miserable financially than uncomfortable, meaning making the sacrifices, living on a budget, not buying a brand new car.

[882] That's uncomfortable to do things differently than you're doing now.

[883] but you're miserable and if you can understand that I think the case that Jade is making here is you're okay being miserable and until you get to point you go I don't want to be miserable with money anymore I'd rather do some things that are very uncomfortable to not be miserable and you and Sam did that you embraced the amount of money you paid off almost half a million dollars you were uncomfortable you have to hit that moment the stuff's got to hit the fan in your life to where you go, this is embarrassing.

[884] This is embarrassing.

[885] I remember my sister went into the hospital and I couldn't go see her because we didn't have the gas money.

[886] And she was just three hours up the road, Ken. That's miserable.

[887] That was embarrassing.

[888] And some of you guys need to get embarrassed about what's going on with your situation and go, I am a grown woman.

[889] I am a grown man. I need to stop living like this.

[890] Think about the last thing that you needed to do and you couldn't do it because you couldn't scrounge up $26.

[891] That'll move you to change.

[892] Wow.

[893] All right, we're here to help you change.

[894] Quick break.

[895] Don't move.

[896] More of your calls coming up.

[897] This is The Ramsey Show.

[898] Welcome back to The Ramsey Show.

[899] I'm Ken Coleman.

[900] Jade Warshaw joins me in studio.

[901] The number to jump in on the conversation.

[902] It's about your life.

[903] We'd love to hear from you.

[904] At 8 -25 -5 -2 -25 -2 -25.

[905] Triple -8 -8 -25 -2 -2 -5.

[906] All right, let's go to Emma, who joins us in Milwaukee, Wisconsin.

[907] Emma, how can we help?

[908] Hi, thank you both for the work that you guys do and taking my call.

[909] I really appreciate it.

[910] You bet.

[911] What's going on?

[912] Yeah, my question today is about my career.

[913] I recently have been promoted into a new role.

[914] I love it.

[915] My last roles is in my organization have both been brand new roles.

[916] This last role, I actually helped promote and I helped facilitate the job description and what I'm actually doing for the company today.

[917] My question is, is how do I know what I'm worth in the market outside from this niche environment and this specific organization?

[918] You mean what your salary range is outside?

[919] Correct.

[920] Yep.

[921] Well, this is not a perfect science, but you can have some good science around it.

[922] So what you have to do is, to the best of your ability, you've got to match up your job description, even though you created it custom for your current organization, which, by the way, want to give you mad props for that.

[923] That's really awesome that you did that.

[924] That is not done very often, and I admire you.

[925] But if you could take your job description, even the language that you use, but begin to look out in the marketplace and match that up, and I think you could probably match that up, I'll try to help you a little bit.

[926] So describe, how would you describe your current role?

[927] Yeah, so my current role is development and training in a sales department, your basic level.

[928] That is what I do.

[929] And I know there are those roles out there.

[930] So I do believe that I could find something somewhat similar to that.

[931] Yeah.

[932] So that's what we're doing.

[933] So we're going to look at sales leadership roles, sales training roles.

[934] And you just begin to look at those job descriptions out there.

[935] And as those companies are describing their roles, how much do they match up with what you're doing?

[936] And now you're looking at your area of Milwaukee, Wisconsin.

[937] you're looking at your years of experience.

[938] You've got it.

[939] You can't, it's not, it's not apples to apples.

[940] Companies are going to look at experience, and they're going to look at specific skill sets.

[941] So if you just take the matching up of the job description plus your experience, plus your skill set, and you can see what the marketplace looks like.

[942] And then if you wanted to go a step further, you could always reach out to a recruiting company, because recruiting firms are looking for people all the time.

[943] It doesn't mean you're signing up with them.

[944] doesn't mean you're looking for a job, but you go, look, you know, what's the market out there for me?

[945] And that's how you can get a much closer idea.

[946] Awesome.

[947] Thank you very much.

[948] Yeah, appreciate the call.

[949] All right, let's go to Lily in Indianapolis.

[950] Lily, you're on the Ramsey Show.

[951] What's going on?

[952] Hi, Ken. Hi, thank you for answering the call.

[953] You bet.

[954] I appreciate all the advice you give to the listeners.

[955] My question is whether it's smart decision to use cash to buy a new car, to upgrade, I guess, from my current car.

[956] So what's your current car worth and how much are you trying to upgrade?

[957] Right.

[958] Currently, my car is worth about $20 ,000.

[959] Okay.

[960] And a new car we're looking at is close to $64 ,000.

[961] Oh, wow.

[962] $64 ,000.

[963] Okay.

[964] What's the car?

[965] it's a Lexus SUV okay well let's see if you know let's see if it makes sense do you guys have any debt we don't have any debt besides a mortgage okay no debt besides a mortgage do you guys have three to six months of expenses saved up yes we have a rainy day funds um close to 70 ,000 okay excellent we have a sort of a set aside bucket of money to work with around 48 ,000.

[966] Okay.

[967] So the 48 ,000 is separate from the 70?

[968] Correct.

[969] Okay.

[970] And then what do you guys earn?

[971] What's your annual income combined?

[972] Household wise, 300K a year.

[973] Okay.

[974] So we always say, you know, you don't want your vehicles to be any more than half of your annual income.

[975] So, and for all intents and purposes, you have $150 ,000 to work with here.

[976] So if you've got a vehicle that's 65 ,000 and your husband's got one that's 65 or 70 ,000, you're good.

[977] The question here is, are we, is this a used vehicle or is it brand new?

[978] It's a brand new one.

[979] Interesting.

[980] So then my next question is if we're talking about doing a brand new vehicle, we always talk about, we suggest not buying a brand new vehicle until you have a million dollar net worth.

[981] Because at that point, you can take the hit, right?

[982] Because we know that brand new vehicles lose 60 % of their value in the first three to four years, right?

[983] What's the model?

[984] I'm sorry, what's the model of the Lexus SUV?

[985] Is it a GX?

[986] It's the NX hybrid.

[987] MX hybrid.

[988] All right, I just want to, I love doing research on like, because I want to, because Jade's right, I want to show you the real numbers.

[989] By the way, is this a 2023 you want to get that the 65?

[990] 24.

[991] Yeah, they're going into 2020.

[992] And it's, and it's Alexis MX.

[993] Yes.

[994] Okay.

[995] So, I mean, Lily, do you have a million dollar net worth?

[996] I think so.

[997] We ran some numbers.

[998] I think we do.

[999] My husband would say 100 % yes.

[1000] I'm always on a cautious side.

[1001] What's making you feel cautious?

[1002] Just my nature.

[1003] What is it?

[1004] Like, he's counting money that you don't want to count?

[1005] Like, what is it?

[1006] like we I have a business which is doing well and then it just I just don't know you know how the business will grow five 10 years from now right there's the unknown okay but I mean net worth meaning when you subtract what you owe which is nothing what you own minus what you owe right so if you look and you said I have no debt so you're looking at the value of your your your home, whatever your home is worth.

[1007] And then you're looking at what you have invested in various investments accounts and you're looking at what cash you have.

[1008] Now, you could include your business if you at some point plan to sell it and you have a valuation on that.

[1009] You could include that.

[1010] But yeah, I mean, that's the question.

[1011] Because if you have a million dollar net worth, I'm like, and you have cash to buy a brand new car, I'm not going to be the one to stop you.

[1012] I'm going to congratulate you and clap you up.

[1013] But if you don't, I did some homework, Miss Jade.

[1014] All right.

[1015] I'm the teacher's aide.

[1016] I'm the teacher's aide for this segment.

[1017] Yes, Ken Coleman.

[1018] Go for it.

[1019] So, Jade is absolutely right, Lily.

[1020] This is Nashville, but I would guess that Indianapolis may be even a little bit cheaper.

[1021] But not crazy.

[1022] Here's what I've got.

[1023] I've got a used 2022, the NX, 19 ,000 miles for 419 .9.

[1024] Whoa!

[1025] I got a...

[1026] That's $23 ,000 difference.

[1027] Yeah, I'm going to do better.

[1028] I got to use 2022, same model.

[1029] 21 ,000 miles, only 2 ,000 miles difference, 37 -9!

[1030] Oh!

[1031] I'm just saying, 19 ,000 miles is new.

[1032] That's a new car.

[1033] And here's what we're saying, Lily, we just want your money to go further.

[1034] Like, this isn't going to break you, but paying 65 ,000 for this model for a 2024, you realize you're getting ripped off.

[1035] Because these cars, this is a two -year -old car, not even two -year -old car I'm giving you, right?

[1036] right here.

[1037] That's right.

[1038] And you're saving a lot of money.

[1039] So I like the $41 ,000 place point.

[1040] But I don't want her to feel bad if she has, if she's got the million dollar net worth, I want her to inhale that new car smell until her eyeballs roll in the back of her head.

[1041] You know what I'm saying?

[1042] Like I want her to enjoy that moment if you've got that million dollar net worth.

[1043] Because then you can take the hit and, you know, it is what it is.

[1044] Not me. I feel like I'm getting ripped off.

[1045] I'm getting gamed.

[1046] Well, you are, you're agreeing to take the hit.

[1047] You're right.

[1048] Yeah, you're going to I'd like someone else to take the hit.

[1049] Yeah.

[1050] See, and here's the thing.

[1051] With these two cars here, Lily, we've someone else has paid the stupid tax.

[1052] I'm just trying to make my case here.

[1053] And listen, it doesn't matter if I'm right.

[1054] I'm just saving you money.

[1055] You can't hate me, Lily.

[1056] So, Lily, let's go back to the core.

[1057] I'm a man of the people.

[1058] Let's go back to the core question because my screen says, is it smart for me to buy a $65 ,000 car or should I invest some of that money?

[1059] As long as you are investing, 15 % of your income.

[1060] income every single month, as long as you have a million dollar net worth, and as long as you can pay cash for that brand new car.

[1061] For me, the answer is yes.

[1062] For that reason, I agree.

[1063] I'm in.

[1064] You can do it.

[1065] You're a big girl, Lily.

[1066] We believe in you.

[1067] Yeah.

[1068] But if one of those things doesn't check the box, then we have to adjust.

[1069] And if you don't want to pay a stupid tax, go Ken's Rob.

[1070] I like it, Ken. That's good.

[1071] Got to get the last word in there.

[1072] I can't help myself.

[1073] Really good stuff.

[1074] Hey, Lily, you're awesome.

[1075] You're doing great.

[1076] Enjoy whatever car you're going to get.

[1077] This is The Ramsey Show.

[1078] The Ramsey Show continues.

[1079] Thrill to have you with us.

[1080] We're here to help you win with your money and your work.

[1081] Today, I'm Ken Coleman, Jade Warshaw, joins me at, oh, it is the season.

[1082] Tis the season, Jade.

[1083] And, you know, Christmas around here is always really fun as we get to do some great things for you, you find folks part of our audience.

[1084] So we've got two things.

[1085] One, it's not too late to get involved in the Ramsey Christmas Cash giveaway.

[1086] If you don't know what this is, One of our weekly prizes each week is $500, and then you're entered to win the grand prize of $5 ,000 so you can enter every day for your chance of winning at ramsysolutions .com slash giveaway.

[1087] And while you're on the website, over in the store, we've got our $12 sale, the Christmas special, all of our best -selling books, just $12 each, and there's a meaningful gift for just about anybody on your list.

[1088] So that's ramsysolutions .com slash store.

[1089] Ramsey Slusions .com slash giveaway.

[1090] You make sure that you are signing up for a chance to win $500 and maybe even $5 ,000.

[1091] So get to the website.

[1092] I don't know what you're waiting on.

[1093] All right, let's go to Fayetteville, Arkansas next.

[1094] Elizabeth, joins us there.

[1095] Elizabeth, how can we help?

[1096] Hey, thank you for having me on.

[1097] You bet.

[1098] What's up?

[1099] So I'm not sure what I should do.

[1100] There's kind of two sides to what's going on, I guess.

[1101] So do you want to hear the marital side part or the financial side part first?

[1102] Let's hear the marital side part first.

[1103] Okay.

[1104] Okay, so I'm going to start kind of back to a year ago.

[1105] So I left my ex -husband, which was financially abusive, and I got out, and since then it's been kind of the, I've been keep getting thrown back down, I guess, is what it would be.

[1106] Do you mind telling us briefly what financial?

[1107] financially abusive means?

[1108] Yeah, I had a budget of $50 a week for groceries for my family, and that's the only access of money I had.

[1109] Wow.

[1110] So totally controlled you.

[1111] Totally controlling.

[1112] Wow.

[1113] What was you guys' income?

[1114] He made about $70 ,000 a year, and I read Dave Ramsey's books about four years ago, and I got so pumped, and I brought it up to him, and he just despised Dave.

[1115] and it kind of shut me down a lot and he wouldn't let me in on anything like I even wrote out like a strategy for him like hey like if we do this and this this is what we're going to be projecting right to getting out of debt because at the moment like we had I think a car debt and some other a couple other things credit cards probably eventually we did get out of it luckily um so now I'm back in debt tell us what you yeah okay so tell us what's happening you said you keep going down.

[1116] So give us a picture of what's going on with you right now, the finances.

[1117] So I scored a job right after I left him in December, and I started in January of last year.

[1118] Okay.

[1119] And I was there until about April.

[1120] And between then and like April, my idea was I have six months.

[1121] I'm going to save up enough for a retainer for a lawyer and I guess do it myself, like file and everything on my own for cat.

[1122] cash, but he beat me to it about 30 days later.

[1123] I got served, and I had to take out a credit card for retainer because I had zero money.

[1124] And I had, I got an apartment within, like, I don't know, January 10th is when I got my apartment.

[1125] Okay.

[1126] And I pretty much got everything set up on my own by myself, and I don't know how I did it, but I did it.

[1127] And it's just been back and forth.

[1128] I got let go.

[1129] I was pregnant at the time when I did leave.

[1130] Oh, man. Oh, man. Yeah, I was about 13 weeks pregnant, I think, if I can remember correctly.

[1131] Uh -huh.

[1132] And I got let go in April for budget cuts, I guess.

[1133] And.

[1134] So how are you, how are you living now?

[1135] How are you making ends meet?

[1136] You've got the baby now.

[1137] You've got your place.

[1138] What's, how are you covering the bills?

[1139] I'm surviving.

[1140] Yeah.

[1141] Um, I have child support.

[1142] but it's really like if he it's not set amount and I have that and then how much is that I was able it was supposed to be 700 a month but it's not you can't count on it yet is what you're saying not quite because I look back in some months I had like 400 and some months I had um 600 okay so he's not consistent with that what are you bringing in every month well I after I had the baby I got on a contract um contract gig for about 200 a week and I paired that and the 200 and then at the time so 800 for you yes okay at the time I had a boyfriend and when I got let go I told him I was like I don't know what to do I can't I can't like I'm not going to be able to so you were you were you were needing him to help you support you were needing the boyfriend to help support obviously because you're bringing in 800 okay what kind of work do you do I have no choice So I'm in the marketing industry, so I'm a social media manager.

[1143] So I did DMR stuff for a fitness coach.

[1144] And then now I found a job after I got let go of that one, the contract ran out.

[1145] And I found another one at an agency, but it's only for 60 days and it's going up at the end of this month.

[1146] Okay.

[1147] And I have an option to become an employee depending on how I do.

[1148] Okay.

[1149] I'm going to let Ken get to you with the.

[1150] with the career stuff because I I need you to be doing more that's earning you five times more money and I know that you can do that he's going to help you get there um before I set him up do you what I want you to see is you can't two people can't live off of $800 a month and even if you're even if the child support becomes consistent you can't live off of $1 ,300 a month or $500 a month okay so So the income...

[1151] I'm actually getting about $1 ,200 with this new job.

[1152] Okay.

[1153] But you still need more?

[1154] Because that's $2 ,000 a month.

[1155] And $2 ,000 a month is $24 ,000 a year.

[1156] Yes.

[1157] So do we see...

[1158] So a little...

[1159] I have to drop the bomb on this one.

[1160] Okay.

[1161] After everything got finalized, I kind of...

[1162] My ex came up to me. and I don't know what his intention was, but essentially he knew that my boyfriend was living with me, and he chilled me, I'm basically in contempt, and I have to figure out what to do, or he'll file for contempt.

[1163] And so...

[1164] What's the contempt?

[1165] I basically cohabitating with another male.

[1166] While you have the baby.

[1167] And my six -year -old, yes.

[1168] Well, yeah.

[1169] Okay.

[1170] Yes.

[1171] He can do that, because if the tables look, I'm not trying to be harsh, but if the tables were turned, you'd be feeling the same way.

[1172] So what I want for, let me, let me paint a picture of what I want for you.

[1173] And I'm just going to be blunt.

[1174] I want a situation where you're not dependent on a man, period.

[1175] Because right now, do you understand?

[1176] Because they can come and go.

[1177] And you're bringing these guys, you don't want to be bringing these guys into your kid's life in and out, right?

[1178] And you're fresh off of a divorce.

[1179] And it's almost like, I'm just telling you what, sounds like from my seat it almost sounds like you just rushed into another relationship because you needed stability you your stability doesn't come from them okay you need to go out and create the stability in your own life and you need to get your community rallied around you good friends family if you're not connected in a local church i don't care what you believe in get connected in a local church because those people are not going to care what you believe they're going to rally around you they're going to love you you're going to be a good friend of them they're going to be a good friend to you.

[1180] You need people, not just boyfriends.

[1181] Does that make sense?

[1182] Yeah, but my lawyer told me to, so the judge is known for, like, revoking children.

[1183] Yeah.

[1184] So my lawyer told me to either move him out or marry him.

[1185] Yes.

[1186] We had to do that.

[1187] So did you get married?

[1188] Yeah, we did, but we were planning on it anyways.

[1189] And I talked to my therapist about it, too.

[1190] Okay, so now you're married.

[1191] I loaded out for him.

[1192] Yes.

[1193] Okay, so now you're married.

[1194] So the contempt thing doesn't matter.

[1195] You told it to me like it matters.

[1196] It don't matter anymore.

[1197] All right, come on, Ken. It doesn't know.

[1198] Yeah, yeah, it doesn't know.

[1199] Okay.

[1200] We got a lot going on here, James.

[1201] And we're running out of time.

[1202] I rarely do this.

[1203] We usually don't hold over for the hour.

[1204] But we want to get her a financial coach.

[1205] So hang on the line.

[1206] You need a financial coach.

[1207] But listen to me, now that you're married to this guy, which would have been nice to know five minutes ago.

[1208] Okay.

[1209] He has got to be working 50, 60 hours a week.

[1210] You have got to get some help with the babies, and you're working 40 hours a week.

[1211] This is an income issue, and you've got to get more of it, and you've got to keep more of it.

[1212] We're going to get your financial coach is our gift to you to help you get a budget and get set up.

[1213] You better go get some work fast.

[1214] Both of you.

[1215] This is The Ramsey Show.

[1216] Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help you win in your life, in your money, in your work, and in your relationships.

[1217] AAA 825 -5 -2 -2 -25 is the number for you to call in.

[1218] We're here for you.

[1219] I'm Ken Coleman.

[1220] Jay Warshaw joins me. Triple -8 -25 -5 -2 -25.

[1221] All right, up first.

[1222] Going back to my stomping grounds.

[1223] Okay.

[1224] The 757, folks.

[1225] Love Hampton Roads.

[1226] Virginia Beach area is where Raven joins us.

[1227] Raven, how can we help?

[1228] Hello, hi.

[1229] Thank you for taking my call.

[1230] You bet.

[1231] What's going on, All right.

[1232] So I've been on our debt -free journey since December 22, 2022.

[1233] We started with about 70K in debt.

[1234] Now we have 41 ,000 in debt, which includes a $38 ,000 car and $3 ,000 in student loans.

[1235] However, we are outgrowing our house.

[1236] So we started looking at houses just to prepare to look for the future.

[1237] We found a great location.

[1238] That's about 30 minutes closer to my husband's job.

[1239] job.

[1240] And next thing, you know, we picked a lot and put the earnings money down.

[1241] Next thing you know.

[1242] Look at that.

[1243] Just happened.

[1244] You guys had no control over that.

[1245] Isn't that crazy?

[1246] None.

[1247] Girl, okay.

[1248] So I know there's a butt or there's a problem somewhere.

[1249] So tell me what's there's a butt.

[1250] Tell me what happened.

[1251] Immediately.

[1252] Immediately we started crunch of the numbers because I'm the one that got started on this journey and found a dave.

[1253] But as of today, we owe $155 ,000 on our current home.

[1254] Okay.

[1255] We could sell it for at least $330 ,000, which would be a profit of about $160k after paying the realtor.

[1256] Okay.

[1257] And we have $50K in savings.

[1258] So the new home costs $700 ,000.

[1259] We're building a new house.

[1260] Yeah, we're building a new house, so it won't be ready until July.

[1261] Where?

[1262] What area?

[1263] what area um greenbriar hickory area i know that area cchopee yeah you upgraded you upgraded didn't you big time yeah so we're very excited great schools great location everything so you're still in the current house you haven't sold it but when you do you'll take 160k from that right in equity yeah and then you're going to put that with 150 so that's you know almost 300 a little over 300 and you're going to take that to put on this new property which is a $700 ,000 property.

[1264] Did I get that right?

[1265] Almost.

[1266] So we owe $150 on the current home, and if we sell it for $320, we would profit at $160 ,000, plus the $50K.

[1267] Oh, $50.

[1268] Okay, I thought you said $150 ,000.

[1269] So they're really only going to have about $2 .10 is what you would have, correct?

[1270] Yeah, sorry, yes.

[1271] So you're putting $210 down on a house that costs $700 ,000?

[1272] Just about.

[1273] So we figured we would use some of that to finish paying off the car and to, you know, obviously put down 20 % for the down payment, save three months of expenses, which is about 20 to 25 with the new house mortgage.

[1274] And I think we should be free and clear, but I just want to get you guys to input.

[1275] Okay.

[1276] I'm going to get out my calculator.

[1277] real quick.

[1278] Why you do that?

[1279] Are you in a contract?

[1280] I mean, this is, you can't get out of this, or do you, do we have any wiggle room?

[1281] I mean, we probably, yeah, we probably could, but I'm sure we would lose some money.

[1282] So what did you specifically call us for?

[1283] What do you want Jade to weigh in on here?

[1284] What's going on?

[1285] So the plan was to pay off the car, the student loan, before we bought a house.

[1286] But, you know, we did that a little early.

[1287] So I just wanted to get some reassurance that we're still kind of on a right track.

[1288] Okay, so if we look at the numbers, okay, so you've got the $210 ,000 and you want to pay off the $41 ,000 in debt with that, right?

[1289] So that leaves you with $169 ,000.

[1290] Okay.

[1291] Well, if we pay it off, then it would be around July.

[1292] So by then we would probably only owe about $38 or, I'm sorry.

[1293] Okay, so $3 ,000 or less by then.

[1294] Oh, okay.

[1295] So it's a $10 ,000 difference.

[1296] Okay, so then let's say that leaves you with 179 ,000.

[1297] Fair enough.

[1298] Okay, and then you want to take out how much for your three to six months, 25 ,000?

[1299] Yes, about 20 to 25.

[1300] Let's say 25 ,000 because you're going to be a new homeowner.

[1301] Okay, so that drops you back down.

[1302] What you need, you need to be putting, you said you want to put 20 ,000 down on this house.

[1303] So what is that about 140 ,000 that you need to put down?

[1304] Yes.

[1305] Okay, so that puts you, I mean, you're right up against it, but that puts you right there.

[1306] yeah I mean what's what's the question what's your concern are you worried that you what are you worried about because there's a sense of worry there yeah because I you know I think we'll be okay we've got a couple of raises coming in and come starting the new year we don't really know exactly how much that would be but that would be about maybe a thousand more a month then get after it but here's a What she's worried about, I'm sensing your worry.

[1307] Your worry is not what you're going to do with this equity and paying off the debt.

[1308] What you're worried about is the percentage of your monthly income that this mortgage is going to be.

[1309] So that's what we need to be talking about.

[1310] What's the mortgage going to be?

[1311] What's the mortgage going to be?

[1312] I was looking about $48 ,000 depending on the interest rate.

[1313] $4 ,800 a month?

[1314] Yeah.

[1315] Okay.

[1316] And how much do you bring home every single month after taxes?

[1317] Not after investing and everything like that, just after taxes.

[1318] After taxes, I bring home 28.

[1319] My husband brings home about 64.

[1320] That's before our raises that are coming up January.

[1321] Okay.

[1322] So you're bringing home $9 ,200 a month, and you're basically at half.

[1323] That's too much.

[1324] That's why you're feeling crazy.

[1325] This has nothing to do with you selling the house and paying off the debt and da, da, what you're worried about is you're you guys are buying a house that's going to be 50 % of your take -home pay every month and you I'm just letting you know you're going to feel that and even adding $1 ,000 to it that helps but you need to be getting this thing down to 25 % and y 'all got to do it fast because nothing will make a blessing feel like a burden quicker than not being able to afford it and I would absolutely hate that for you guys okay So really, I think what this call is about, Ken, let's turn a corner, how can they get their income up?

[1326] Well, I actually, I don't know.

[1327] I don't know their situation.

[1328] We got about a minute here.

[1329] So what professions are you guys in?

[1330] Give me the really quick answer.

[1331] I'm in contracting with the government, and my husband just got promoted to Master Chiefs in the Navy.

[1332] Yeah, so you guys are your incomes in those things are limited.

[1333] So now you're talking about side hustles.

[1334] and I don't think the side hustles is going to make the difference.

[1335] I think there's too much house and I'd walk away from the house.

[1336] That's the truth.

[1337] You guys are both in government jobs.

[1338] So the only way you're making extra money is going to be and you have limited time and that's not going to make up the difference, Jay, to get enough income in to get it to the 25%.

[1339] So I hate to tell you this, but it's too much house.

[1340] Yeah.

[1341] I wish I had another answer.

[1342] But going and making more money is not the answer to this.

[1343] You guys are going to be house poor.

[1344] New house means new furniture, new problems, decorating all the things.

[1345] You could put more down on the house and just pay off your debt, the old -fashioned way.

[1346] That's your only other option.

[1347] But even then, I don't know if it makes that much of a difference.

[1348] So, I mean, run those numbers.

[1349] I mean, she gave you the ratio.

[1350] So I'd be patient.

[1351] This is The Ramsey Show.

[1352] Welcome back to The Ramsey Show.

[1353] I'm Ken Coleman.

[1354] Jake Warshaw joins me. We're taking your questions about your money, about your work.

[1355] Professional advancement means financial advancement.

[1356] Can I do that while I'm in the baby steps?

[1357] I want to start that side hustle this next year.

[1358] We'll take any of those questions.

[1359] AAA 825 -5 -2 -25 -2 -25 -2 -5 -2 -5 -2 -5.

[1360] Marissa is up in Houston, Texas.

[1361] Marissa, how can we help?

[1362] Yes, hi.

[1363] Thank you so much for taking my call.

[1364] And first, I guess I just need it for my advice on what to do.

[1365] do.

[1366] I currently, I'm 30 years old, and I'm thinking of changing my career.

[1367] I'm going back to school.

[1368] To what?

[1369] To nursing.

[1370] And what are you doing now?

[1371] I'm a pharmacy tech.

[1372] Okay.

[1373] All right.

[1374] Keep going.

[1375] So, yeah, so I'm thinking of going back to school, but I'm kind of stuck in between picking an accelerator program, which will cost me about $70 ,000 or...

[1376] Hold on.

[1377] I'm sorry.

[1378] Did you say $70 ,000 or $7 ?70 ,000.

[1379] Yes.

[1380] For what?

[1381] For a bachelor's in nursing.

[1382] Okay, gotcha.

[1383] All right.

[1384] It's a one -year program, so I think that's why it's so much.

[1385] Wow.

[1386] So I'm in between, yeah.

[1387] So going for that program or going on to an associate's degree in nursing, which will be a two years, and that comes out to be about 10K.

[1388] But I would still have to go back to school another year.

[1389] That's probably about another 30 ,000 for a bachelor's.

[1390] That's a big difference.

[1391] Okay, so if I'm hearing you're right, 10 ,000 for the associates, then another, did you say 30?

[1392] It could range from 15 to 30, okay.

[1393] 15 to 30.

[1394] Yeah, depending on what program I get accepted to for the bachelors.

[1395] Having my associates, I could get into a bachelor's.

[1396] nursing program and that will be another year so total will be like three years for the longer route can I ask a quick question so the 15 to 30 thousand for the bachelors what denotes that can you just apply to programs that are cheaper or like do you know so okay so the um let's see the associates um you know you have to take certain um credit classes that's basically all the requirements you have to take certain classes yeah and then uh for the one year um The 30K, you have to have an associate priority in nursing.

[1397] Right, but you said the range was between 15 and 30, 15 and 30K, and I was trying to understand what denotes that range.

[1398] Depending on school, some schools are cheaper than others, but I've looked around and depending on who accepts, you know, accepts me, it can be from the cheapest I've looked at 15 ,000.

[1399] So you'll just apply to the cheapest ones?

[1400] Right, right, right, yeah.

[1401] Always, because, Marissa, no patient.

[1402] will ever ask you how much you paid to go to nursing school.

[1403] Yeah, we're not even applying for the 30 K -1s.

[1404] So don't even think about that.

[1405] So you've laid this out for us.

[1406] The $70 ,000 bachelor's one -year program to me makes no sense at all because I'm guessing you cannot afford anything close to that.

[1407] Is that true?

[1408] What can you afford right now?

[1409] How much money do you have to be able to put towards school?

[1410] Um, so currently I have about 14K cash.

[1411] do you have any debt no no debt or like small credit card debt like 2000 but that's debt Marissa that's that yeah but I can pay it off like it doesn't have any it's not accumulating any interest it doesn't matter it's still debt what other debt do you have okay that's about it really is it in the loans because car payment no car payment no car payment all right so you only have debt of $2 ,000 on a credit card and you have $14 ,000 in Savings, or is that in your checking?

[1412] That's in my checking.

[1413] Any savings?

[1414] Well, that's all I have.

[1415] Oh, okay, got you.

[1416] Her savings is in her checking account.

[1417] Well, here's a deal.

[1418] I certainly would cash flow the two -year associates program, because my question is, once you get that associate, are you able to do any kind of nursing at all or no?

[1419] Yeah, I can.

[1420] I believe once I get into the program, or once I receive my associates, I can work in a hospital for about a year.

[1421] Within that year, they do require you to get your bachelor's.

[1422] So I would be working in.

[1423] How much money are you making right now as a pharmacy tech?

[1424] Right now, it pays about 40K and grows is about 55.

[1425] All right.

[1426] Any opportunity for overtime?

[1427] Um, not, well, yes, I take it as, um, as much as I can.

[1428] I also work part -time.

[1429] For right now, my, my full -time job is at the hospital and I work part -time at like a retail pharmacy.

[1430] Okay, so what are you bringing in total?

[1431] So full -time plus part -time.

[1432] Is it the 55 or is it more than that?

[1433] I don't know, maybe about 60.

[1434] Okay.

[1435] Because I work like, you know, on the weekends.

[1436] But another thing too is, like I said, I'm 30.

[1437] I'm not married.

[1438] I don't have any kids, but I'm my partner right now, we want to kind of settle down.

[1439] And he's not forcing me to go to school.

[1440] He says, I guess, combined, we would be good.

[1441] But I guess the nursing school is just for me to be, to increase my income.

[1442] Um, but my question is, should I, well, I guess like y 'all said, I should just go ahead and do the associate's degree.

[1443] No, go ahead.

[1444] Ask your question.

[1445] And then it'll take longer.

[1446] Well, it's just because I, I guess in the next three or four years, we'd like to, like, have kids and buy a house and all of that.

[1447] Uh, so I guess that's fine in between those two, like, if I should do the faster route, pay a little bit more.

[1448] You can't afford the faster route.

[1449] That's got to be off the table because you don't have $70 ,000.

[1450] You don't even make that in a year.

[1451] And I don't say that to be negative.

[1452] I'm just saying you need $70 ,000 in one year and you make 60.

[1453] And if you do that and you take a loan out for that, Marissa, guess what?

[1454] It's going to put everything else you dream of that you just mentioned, the home, the kids.

[1455] It puts all that in jeopardy.

[1456] This is not necessary.

[1457] With the income you have, the fact that you are single, you've got some extra time, the boyfriend's supportive.

[1458] I mean, I would cash flow the 10K for the two -year program, get you in the building.

[1459] I wrote an entire book called The Proximity Principle, which says, I got to get around people that are doing what I want to do.

[1460] And if that gets you in and I cash flow and I'm in nursing, then the angle I'm going for, Marissa, is I'm looking for a hospital or a program or a clinic or something that says, I'm willing to pay a good chunk of Marissa's tuition.

[1461] And let me just add, this is just what all I'm saying, I'm not saying this is the case, but there is something to be said for a lot of people think, how many times do people call in and say, I got a whole degree in this field?

[1462] I started working and I hate it.

[1463] Well, that's another thing.

[1464] It's a very good point.

[1465] Have you hung out with nurses?

[1466] So when she does that $10 ,000, she's going to be able to hang out with these people and see does she really like it?

[1467] I agree with you so much.

[1468] I wouldn't spend the $10 ,000 until you spend time with nurses.

[1469] Have you spent time with nurses?

[1470] Like really awesome.

[1471] The good, the bad, the ugly.

[1472] Yeah, I mean, I know what the work is.

[1473] My best friends are a nurse.

[1474] Okay.

[1475] She's been a nurse for five years.

[1476] So I know what it is.

[1477] I know nurses too.

[1478] It's tough.

[1479] It's tough.

[1480] It is tough.

[1481] And I say that specifically because nursing is one of those fields that it's like, you've got to be wired for this.

[1482] So shelling out $70 ,000 a year and speeding through a program, getting into it and being like oh wait this is for the birds you'll feel terrible at least with the 10 year you know the two year plan getting the associates and then doing the year bachelors she gets to test it but i i hear you can testing it before then would be good too well i think she has i think you meet that you know what it is and you know what you want to do so so we're saying you're going you're going to you're going to walk through this not run and we're going to walk through at the speed of cash cash cash cash you're going to be in you're going to be a nurse I really want you shaking the tree talking to everybody about what kind of programs you know will hospitals listen there's a huge need for nurses right now i talk about this every day i want you to see what's out there as relates to somebody paying your tuition because they need new talent they need new people in the building and you represent that so no debt on this no loan it's not worth it and it's not needed it'd be one thing if it were like there's no other way trust me there's always another way besides taking out a loan.

[1483] So really appreciate the call, Marissa.

[1484] You don't understand how big of a deal it is to be a new nursing candidate.

[1485] They are they are hemorrhaging people.

[1486] They need people.

[1487] You might be surprised, Jade.

[1488] How many hospitals, organizations will say, you know what, we'll help you with your tuition.

[1489] And that way, you have no debt and you jump right in.

[1490] So thanks for the call.

[1491] All right, don't go anywhere.

[1492] More of your calls coming up.

[1493] This is The Ramsey Show.

[1494] Welcome back America.

[1495] You have joined the Ramsey Show.

[1496] I'm Ken Coleman and Jade Warshaw joins me. And Jake's a little fired up as we went into our commercial break.

[1497] She had about 30 seconds more that she said she needed to add.

[1498] Listen, if you call in the show, you need to know how much money you make.

[1499] Listen.

[1500] Or she will hang up on you.

[1501] I think just in life, not if you call on the show.

[1502] In life, too.

[1503] That's right, James.

[1504] In life.

[1505] You need to know how much money you make.

[1506] we talk about budgeting, we talk about FPU, we talk about the baby steps, the number one thing.

[1507] You cannot do any of that if you don't know how much money you make.

[1508] And I mean to the penny, you need to know every time when I get a check, this is the amount.

[1509] Now, if you're self -employed or you have a fluctuating income, it's a little different, but you need to have a clear picture of what you think it probably will be based on, you know, what you've been doing.

[1510] But you need to know how much you make.

[1511] Guys, I say it all the time.

[1512] income is expensive.

[1513] Okay?

[1514] The money you make is expensive.

[1515] Jade, what do you mean by that?

[1516] I mean you spend your time.

[1517] You spend your energy.

[1518] You spend your sleep.

[1519] Some of you spend your sanity.

[1520] Your income is expensive.

[1521] It costs you.

[1522] All right?

[1523] Handle it with care.

[1524] Understand what it actually is so that you can make it work for you.

[1525] That's it.

[1526] Your homework for tonight is to look at your pay stub and memorize it.

[1527] All right.

[1528] That's it.

[1529] I can hear the audience.

[1530] I can hear the audience in my head.

[1531] Yes, Ms. Jade.

[1532] Yes, Mama Jade.

[1533] Sorry.

[1534] A couple things here real quick.

[1535] Coming off of that mini rant, my colleague here, look at that.

[1536] Look at her.

[1537] She looks like a million dollars right there.

[1538] Money's not a math problem.

[1539] Like a nice person.

[1540] A fun little short book here that she has written.

[1541] The real reason you're broken and what to do about it.

[1542] Really, really good stuff.

[1543] This is now, is it available?

[1544] Actually now, where pre -orders is gone, it's now go get it today.

[1545] Listen, if you order it from ramsysolutions .com, we will send it right to you.

[1546] If you order it on Amazon, A, you're paying more money for it, and you have to wait until January 2nd to get it.

[1547] So go to ramsysolutions .com and get it.

[1548] Get the book.

[1549] It's really great.

[1550] By the way, you music lovers will love that her chapters are titled.

[1551] They're all song.

[1552] I just picked up on that.

[1553] Did you just get that?

[1554] Okay.

[1555] I love it.

[1556] Do you recognize the songs?

[1557] Yeah, absolutely.

[1558] Are you kidding me?

[1559] Hey, now you're an all -star.

[1560] Don't make me sing it.

[1561] My favorite is chapter four.

[1562] Sledge hammer.

[1563] Oh, we harmonized there.

[1564] Wow.

[1565] That was incredible.

[1566] It's true.

[1567] We did not rehearse that.

[1568] It was great.

[1569] She's very talented.

[1570] And then, speaking of fun books for the family, I'm glad for what I have.

[1571] Rachel Cruz is first.

[1572] Where's our camera?

[1573] Sorry, guys.

[1574] I feel like David Letterman used to do this all the time I was growing up.

[1575] There it is.

[1576] I'm glad for what I have Rachel Cruz's children's book.

[1577] It's all about contentment.

[1578] And then our good buddy, George Camel, we've got another money book out here.

[1579] Look at George.

[1580] Breaking Free from Broke.

[1581] Great book.

[1582] All of those books, Ramsey Solutions .com.

[1583] slash store.

[1584] These are great gifts for you to give yourself and to others.

[1585] So go get them at Ramsey Solutions .com slash store.

[1586] All right.

[1587] To Los Angeles, we go.

[1588] Amelia's there.

[1589] Amelia, how can we help?

[1590] Hi there.

[1591] I just wanted to ask today about budgeting.

[1592] Thank you so much for taking my call.

[1593] Sure.

[1594] What's going on?

[1595] I used to live in an area with really low cost of living.

[1596] And so since moving out here.

[1597] I'm just finding that it's really hard to kind of save and put money into an emergency fund.

[1598] I feel like on months where there's no emergencies and where we make the amount of money we're expecting to make, that we do great on our budget.

[1599] And then I feel like half of the months we're just barely kind of scraping by and having to pull out of that emergency fund.

[1600] So I would just love some advice on how to kind of budget in an area where it's a really high cost of living.

[1601] Yeah.

[1602] I mean, on the one hand, I'm just going to say budgeting is budgeting, whether you're in a low cost of living or high cost of living.

[1603] The whole point of a budget is you're simply planning your money before the month begins.

[1604] So kind of take the high, if the cost of living is an issue, that means you have an income issue, not necessarily a budgeting issue.

[1605] So let's start with that framework.

[1606] So how much money do you guys make per month?

[1607] um total me and my husband end up bringing in like 7 ,500 a month okay good and then um he's a student so he also gets just random payout for scholarship okay so I would say like three times a year we get like 5 ,000 about 5 ,000 and is that just refunds from the scholarship money you know it's just a little different each time so the school that he's at he has a TA ship and so he gets paid like a monthly fee or not like whatever salary for nine months of the year.

[1608] Okay.

[1609] And then he has some scholarships that are set and then some that the school, it's almost like surprise scholarships.

[1610] And I don't really know why there's a letter he signed at the beginning of the year, but we always end up getting a little more than what's on the letter.

[1611] We don't really know where it's coming from.

[1612] Okay, but does the money go into your budget or does it need to be going towards school?

[1613] That is on top of what we pay.

[1614] pay for the school.

[1615] So the $5 ,000 is what we get after paying.

[1616] Okay, so it's just a credit back to you.

[1617] Okay.

[1618] And how often did you say every quarter, every couple months?

[1619] That's right.

[1620] Every, I would say three times a year.

[1621] So three times a year.

[1622] And it's anywhere between three to $5 ,000.

[1623] So let's just keep that on hold in our minds right now.

[1624] I'm not going to add it to the budget just yet.

[1625] Okay, so $7 ,500 a month.

[1626] So if you haven't downloaded every dollar, which is our budgeting app here, that's your homework for getting off the phone today.

[1627] Do you already have it or no?

[1628] I have the, yeah, I have the free version.

[1629] Okay.

[1630] I want you to go to ramsysolutions .com and I want you to buy the book.

[1631] Money's not a math problem.

[1632] It's $10.

[1633] But when you buy it for $10, you will get three months of every dollar premium for free.

[1634] So that's kind of a backdoor way to get every dollar premium for free for a lot cheaper.

[1635] Okay.

[1636] That's the homework.

[1637] Because on premium, this is what you need.

[1638] Premium features has something called paycheck planning.

[1639] So basically what you do, when you first do your budget, right, you just go through and you assign every single dollar, right, until it says you've gotten every dollar budget in green, right?

[1640] Okay.

[1641] So that's what you do first.

[1642] You're just assigning every single dollar.

[1643] And once you've assigned every dollar with a category, like this is for gas, this is for the mortgage, this is for groceries, it wants you to use every single dollar.

[1644] And when you've used every dollar, it'll say up there in green, you've done an every dollar budget.

[1645] Woohoo.

[1646] now that's step one and a lot of people stop right there and they're like all right i did my budget winning and then they wonder oh my gosh why am i still overdrawing oh my gosh why do i still not have any money it's because they've left out a very crucial step and i want everybody listening to remember this you have got to plan your paychecks some people call it cash flow planning and in every dollar premium it allows you to do that and all that is umelia is you're going in there and you're saying okay i've given every dollar an assignment i've told my money you're what to do.

[1647] Now I have to tell it when to do it.

[1648] I've got to set the dates because here's the thing.

[1649] You don't necessarily, you might get paid on the first, but you don't know, do I have the money to pay the rent, the mortgage, the car payment, the da -da -da -da -da.

[1650] If you don't know, you have to plan it out.

[1651] Otherwise, you are going to be overdrawing even though you've made a budget.

[1652] Does that make sense?

[1653] Yeah.

[1654] Okay.

[1655] Can I jump into a quick question?

[1656] Come on.

[1657] Amelia.

[1658] I'm curious.

[1659] Are you guys double income?

[1660] So, yes, for nine months of the year, he's making about $4 ,000.

[1661] I'm making anywhere from $3 ,500 to $4 ,000.

[1662] What industry are you guys in?

[1663] I'm a teacher, and then he's a TA at a university right now.

[1664] The reason I'm asking this is I'm just curious, what does upward mobility look like for you guys financially over the next 24 months?

[1665] So think two years.

[1666] Yeah.

[1667] Well, to be honest, the next step that we're kind of hoping to take, he is about to graduate.

[1668] So we have about six months of our current situation where we are trying to kind of save while we're making more money so that when we move to a new location, we can kind of have that emergency fund and then have our down payment for a house.

[1669] Same area, though, Los Angeles?

[1670] We're moving away, yeah.

[1671] Okay.

[1672] But here's my question, though.

[1673] I appreciate that.

[1674] But Jade gave you great budgeting advice, but I'm just curious what the income increase potential looks like over the next two years.

[1675] Because I've got a suggestion, but I'm curious what that.

[1676] Are you guys going to see some raises?

[1677] Are they minimal?

[1678] I got about 40 seconds.

[1679] Tell me real quick.

[1680] Minimal to pay decreases probably.

[1681] Yikes.

[1682] Yeah.

[1683] I had a feeling.

[1684] And so, you know, I could say you guys need to be making some side hustle income.

[1685] But the point is, is then you're just, you never.

[1686] Yeah.

[1687] You're a rat in a wheel.

[1688] So I just feel like we've got to make better decisions where we live.

[1689] Man, what?

[1690] Can I just say that?

[1691] Yes, Ken?

[1692] I'm not, by the way, everything Jade said is spot on and you can win with what, and you guys have had months where you should be winning with good budget, so she'll help you.

[1693] But I also got to go, it shouldn't be that difficult.

[1694] Maybe we should teach somewhere else.

[1695] That's right.

[1696] Just a thought.

[1697] This is The Ramsey Show.

[1698] Welcome back to The Ramsey Show.

[1699] I'm Ken Coleman.

[1700] Jade Warshae joins me. The phone number is AAA 825 -225.

[1701] or Scripture of the Day comes from Proverbs 1815.

[1702] An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge.

[1703] Our quote from Abraham Lincoln, I do not think much of a man who is not wiser today than he was yesterday.

[1704] All right.

[1705] Shots fired.

[1706] Abe, dropping the wisdom.

[1707] Of course, there's so many quotes out there from Abraham Lincoln.

[1708] Yeah.

[1709] By the way, hold on, you just said shots fired.

[1710] He was salty in that quote.

[1711] Too soon.

[1712] Too soon.

[1713] Too soon.

[1714] He died by an assassin in four days.

[1715] That's what I was just, you just pardon the pun.

[1716] Yeah, you got shot in the back of the head, Jade.

[1717] Listen, I was about to say he was given someone the smoke on that, but that's probably too soon as well.

[1718] I love that you with shots fired.

[1719] It took me a second.

[1720] It was like a delayed reaction for me too.

[1721] It wasn't on purpose.

[1722] We apologize, Abe.

[1723] Moment of silence.

[1724] Okay.

[1725] That's good.

[1726] All right.

[1727] To John, we go in Detroit, Michigan.

[1728] John, how can we help?

[1729] How's it going?

[1730] So the company that I work for is a union company, and I'm a part of the union as an employee.

[1731] We're negotiating our contract right now, and things aren't going great, so there's the possibility that we may be going on strike.

[1732] I'm on baby step two, and I know based on what I've heard from you guys that maybe I should pause the baby steps and start saving cash for the possibility that I can't work.

[1733] But I kind of don't want to do that.

[1734] I want to keep the snowball rolling.

[1735] Which tells me you've thought through this.

[1736] So is there any kind of a stipend?

[1737] I know I'm not super familiar on unions, but I know that many unions will have a fund for these type of labor negotiations.

[1738] And so my question is, do you have that?

[1739] What would that be financially?

[1740] How much of that?

[1741] I'm struggling.

[1742] How much of a percentage of that would it be your normal pay?

[1743] Is that a pay cut?

[1744] Walk us through that.

[1745] Yeah, it's a huge pay cut.

[1746] It'd be a very small amount of money, just a few hundred dollars a week.

[1747] Oh, wow.

[1748] For gas and groceries.

[1749] So when you said, I don't want to pause the baby steps.

[1750] I want to keep going.

[1751] Do you have a plan?

[1752] Sounds like you do.

[1753] Yeah.

[1754] So what I was thinking was I was going to bump my credit card up from its current position and pay on that.

[1755] And then, worst case scenario, I do go on strike.

[1756] I would have the liquid funds in the credit card if I absolutely needed it.

[1757] John, did you really think?

[1758] No way.

[1759] No way, John.

[1760] Okay, you're playing games.

[1761] Let's talk about what we really could do.

[1762] Because I feel what you're thinking.

[1763] Like, I'm not going to lie.

[1764] I get what you're thinking.

[1765] And like on some scale, somewhere else it makes sense.

[1766] But on the Ramsey scale, it's bananas.

[1767] So let's pull it back.

[1768] my question for you would be of course I get it you like you want to keep the baby step you know baby step two snowball rolling you don't want to lose momentum if you do go on strike are you allowed to work another job or do you can you not do anything I could work another job I would not get that stipend pay unless I'm yeah but the stipends anyway how much do you make what's your take home our household income is around 58 ,000 what's yours then 35, 35, 36 of that is mine.

[1769] And that's what I budget.

[1770] I budget on the low end.

[1771] We're kind of on the irregular income side.

[1772] I'm on track to make $120 this year in the household.

[1773] And what kind of work do you do that you would be possibly going on strike for?

[1774] It's manufacturing and distribution.

[1775] Okay.

[1776] Mike, what I would do if I were you is I would start researching other jobs that I could pivot to to make up, I mean, to make $36 ,000 a year.

[1777] in a month.

[1778] Yeah, that's three.

[1779] I mean, you could get a, you could literally get a management position at Chick -fil -A and make that.

[1780] Well, I agree with Jade here.

[1781] I think your play here is to get aggressive.

[1782] Do you have an idea of the timeline as to when the strike would happen?

[1783] No, I'm not certain.

[1784] We're not meeting with the company again for another month.

[1785] Yeah, without saying anything, I pay attention to stuff every day.

[1786] I know what you're talking about.

[1787] So this thing could, the can could get kicked down the road even a little further.

[1788] It's going to be a month before they even start talking again.

[1789] So I think you have, I think realistically, John, tell me if I'm wrong, I don't mind being wrong, that you've got about 90 days at least before anything were to happen in this scenario.

[1790] Is that fair?

[1791] Yeah.

[1792] That's why I don't want to pause the baby steps.

[1793] Don't.

[1794] Nobody's telling you to.

[1795] We're not talking about positive babysat.

[1796] We're talking about what do we do financially so that you can keep going in the midst of the strike because I think that's the issue.

[1797] You can keep going on the baby steps if we have an income plan.

[1798] So I think there's two things to look at.

[1799] I'll pivot quickly from this.

[1800] I would be asking myself, if I were in your shoes, how can I make three grand a month using my skill and experience in the Detroit area so that I can start doing that now and I'm stacking that up?

[1801] The second question I would be asking is, since it sounds like you budget really well, could you make it through a two or three month strike on your wife's income only?

[1802] What's the answer to that?

[1803] No. All right then.

[1804] So now we know we've got to focus on step one.

[1805] Yeah.

[1806] Yeah, I think it's all about having a income plan.

[1807] But if he doesn't, should he pause the baby steps?

[1808] I think he should.

[1809] But why wouldn't he?

[1810] That's my thing.

[1811] Like, I don't think that not working for two months is an option.

[1812] I agree.

[1813] Or three months is an option.

[1814] I agree.

[1815] But I'm saying what I'm doing is I'm giving a full look at this thing.

[1816] So if he can't find the work and he goes on strike, then we would tell him to do that.

[1817] I'm just saying fundamentally when we tell people to pause baby steps.

[1818] is a true emergency situation where you've got to just take care of business.

[1819] I don't think he's going to have to rely on that.

[1820] You said he's got 90 days.

[1821] So I think so.

[1822] I would say that if we're two months in and there's still not a plan of like what you're going to pivot to, then maybe stop and pile up some cash.

[1823] But I don't want that to be an excuse.

[1824] I don't want there to be any excuses to not find this income.

[1825] Does that make sense?

[1826] So I don't want you moving the credit card in your baby step and your, you know, in your debt snowball.

[1827] Don't do that because.

[1828] that is going to tempt you.

[1829] That's going to tempt you.

[1830] You've already been tempted to have that as your fallback plan.

[1831] And I just want you to erase that.

[1832] You need to pull a straight up like men in black and just clear that from your memory of ever thinking.

[1833] I like that reference.

[1834] Of ever thinking, you know what I'm saying?

[1835] I don't even want you thinking that the credit card could possibly be an option, John.

[1836] Do you know what I'm saying?

[1837] Yeah, my only thought was that would be a liquid place that I could continue to pile money.

[1838] Think about what you're saying.

[1839] You've got to stop saying liquid.

[1840] Think about what you're saying.

[1841] You're so, think about this now.

[1842] You're so intent on wanting to keep moving forward in your debt snowball.

[1843] If you're wanting to go forward, you cannot solve a problem while simultaneously creating it.

[1844] You can't get out of debt while still having debt as an option to lean back on.

[1845] You'll never go forward.

[1846] So keep the intensity on wanting to keep the debt snowball going.

[1847] And the only way to do that is to say debt is not an option.

[1848] And let me tell you something, John, when you do that, you will get so creative and you will start having ideas come out of the wazoo because you don't have a choice.

[1849] Necessity is the mother of invention.

[1850] And so that's why I said, M .I .B. that thought, because when you do that, okay, I have no choice.

[1851] I have to provide for my family.

[1852] You will go out because I can tell you're a hard worker.

[1853] You will go out and do whatever it takes to bring money in for your family when you take debt off the table.

[1854] John, what is your skill set?

[1855] equipment service I'm a service technician so mechanical work yeah my man okay I'm asking you straight up is there not a lot of stuff that needs fixing that you can fix in the greater Detroit area yeah there is it's just fine and who wants me to go fix it John everybody sounds like there's some really nice money to be made and what if John what if we start today tonight contacting people putting the word out what if John you make a an additional three grand a month over the next three months, and the strike doesn't happen.

[1856] Ooh!

[1857] I like it.

[1858] John, are you with me?

[1859] I am.

[1860] Yeah.

[1861] You remember the old phrase?

[1862] You sound like a guy who understands all these old phrases that they all make fun of me for saying on the show.

[1863] Remember the old take the bull by the horns?

[1864] You know that phrase?

[1865] Yeah.

[1866] Yep.

[1867] Come on, John.

[1868] Grab that bull by the horns and wrestle it to the ground.

[1869] I know that's right.

[1870] Get after it.

[1871] This strike shows.

[1872] not be a blip on your radar screen if you approach it that way.

[1873] Do you agree with me?

[1874] Well, hopefully it never happens.

[1875] Hopefully it never happens.

[1876] Who cares if it does?

[1877] We got a plan.

[1878] Jade and I just came up with a plan that doesn't matter if it happens or not.

[1879] We're really excited about it.

[1880] Well, I'm fired up.

[1881] Let me tell you why I'm fired up.

[1882] Because most of these strikes never last very long at all.

[1883] It's too expensive.

[1884] Yeah.

[1885] So they'll happen, but they don't go very long.

[1886] And if he has a plan for this, he ends up coming out on the positive side with cash.

[1887] Which means we dump all of that right into the baby steps and we move on.

[1888] John, thanks for the call.

[1889] Jade Worshaw, thank you.

[1890] Great show.

[1891] Thanks for harmonizing with me. I got to call my mom.

[1892] She's going to be so proud.

[1893] James Childs, our fearless leader.

[1894] Thank you, sir.

[1895] This is The Ramsey Show.

[1896] Hey, guys, I'm Rachel.

[1897] And I'm George.

[1898] And you've probably heard our voices before on The Ramsey Show.

[1899] And do we have a surprise for you?

[1900] Yep.

[1901] We have our very own show, Smart Money, Happy Hour.

[1902] Where we talk about pop culture, current events, and of course, money.

[1903] George, it's a great show.

[1904] And what else do we talk about?

[1905] So much, Rachel.

[1906] Not enough.

[1907] And yet too much.

[1908] We talk about guilt tipping because tipping is out of control and I won't stand for it anymore, which is why I'm sitting.

[1909] I'm glad you're taking such a stand.

[1910] And we also talk about something else I'm passionate about Disney adults.

[1911] Why is it a thing?

[1912] Listen, some adults still find the magic.

[1913] Sure.

[1914] We also talk about toxic money traits and girl math.

[1915] And if you don't know what those are, you have to listen to the podcast.

[1916] Yeah, there's a lot there, you guys.

[1917] It's pretty fun.

[1918] We keep you relevant, is what I'm trying to say.

[1919] We help you out.

[1920] So pull up a chair to the happy hour.

[1921] You wish your friends we're having.

[1922] We promise you won't regret it.

[1923] And if you don't have friends, we'll be your friends.

[1924] We will.

[1925] We're great friends.

[1926] So make sure to check it out on Apple, Spotify, YouTube, or the Ramsey Network app.