Transcript of Don’t Let Lifestyle Creep Derail Your Financial Goals

From Ramsey Network. This is the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by best selling author Jade Warshaw, and we are your hosts this hour, taking your calls at 888-82-5521 before we get to the calls, we've got an exciting interview that is dropping next week. You don't want to miss this. A few weeks ago, Dave Ramsey and I sat down with the one and only Ben Shapiro to have a real conversation about work, about building wealth and what it means to pursue the american dream in 2024 and beyond. And the interview will be available Tuesday, October 15 in the Ramsey Network app. So if you want to see it before anyone else, go download the free Ramsey Network app in the app Store. Then on Wednesday, the following day, October 16, the episode will be released for everyone on YouTube and podcasts. So don't miss that October 15 Ramsey Network app. Be there or be square. You know why they say that, Jade?

Because uncool people are squares.

And so the way I heard is because you're not around, so you'll be square. All right. There's my dad joke. We're moving on to Eric in Boise. What's going on, Eric?

Hi, Jade. Hey, George. Thank you so much for taking my call.

Sure.

How can we help? Yeah, so, situation we're in. I'm in Boise, Idaho. I was a baby, step seven, I guess, grad and purchased a home and paid it off. And. Yeah, I'm in. I'm 31. My wife's 33.

Wow, you guys are super weird.

Yeah, we love it.

We are definitely very weird to. And we were having our first baby and so we decided to move into a home that was a little bit bigger and had a little bit more land to it.

Cash on that one, too, or there's a mortgage.

Well, so what we did is we took a mortgage in order to just to get the home because we didn't want to do a contingent offer because it was pretty competitive here. So our plan is we're now currently selling our previous home and then we're going to take all that money and roll it into the mortgage. Get it.

So it'll be a very temporary mortgage. Once you sell, you'll pay off the mortgage and move on. Exactly.

Yep.

That's.

That is the. That is our strategy. That's what we're doing. Not mad at it. So what we have found out, we've had our helm on the market, I think, for two weeks, three weeks now. And we've had a couple of people who are interested, and our realtors told us that they've come back and asked us if we would be interested or would offer owner financing or owner carry loans. And I was just curious, from the Ramsey solutions perspective, are there any terms and conditions where that would be a wise thing to do, or is it just a hard no, we're not going to, we shouldn't be considering.

I'll tell you on the seller side, if you're the one taking on the risk, you're going to loan these people however much, you know, what are we talking, $300,000?

Well, that's what I've asked our realtor. What are the terms or what have they been asking for? And he said, really, it's just kind of up to us for what we would say, what we would be willing to offer.

And they're trying to do this to save on interest rates right now. What's the upside for them?

That would be. I don't have those details. I'd be curious about that. From what I've read into it a little bit, it sounds like usually people who are looking into owner carry loans or individuals who can't get approved for a loan from a bank, and that's.

A red flag for me.

That's the only red flag. If they didn't qualify for traditional financing, it's a hard no for me. And even then, personally, the camel family would not be willing to take on that risk of someone owing us hundreds of thousands of dollars, because if they default, you've got to foreclose on that home. So all the risk is on you instead of the lender.

Yeah. I see. Yeah.

And that's where I was thinking, where if, because we own the home, is it, if we were able to create some terms where we could say, hey, we want a larger down payment. So that, because, I mean, the idea behind us selling this home is that we want to get rid of our mortgage, so we don't want to carry that any longer. And then having a short term loan, something like five years or whatever, and do you still, I guess in that case would have the, you know, like a bank, you own the home, and if they don't pay it off, you get the home back.

What's the can, can you give us real numbers? What's the house worth? Like, what are you selling it for? So that we know what the loan would be? Because if there's a couple of things that don't make sense to me, and I'll tell you what they are, and then if you explain it, maybe you can help. But I'm thinking, okay, these people weren't approved for normal financing. Normal financing is typically a 15 or 30 year mortgage. Right. You put 5% down, whatever, and then you're talking about them having to put more down and having a shorter term, like you said, a five year term. So I'm trying to understand why you feel they would be able to do one that is far less conventional over the other, which is far more conventional, I guess.

Well, yeah, that's exactly like I. I would be looking in the terms. So the home, we're asked, the asking price right now is $369,000.

Uh huh.

And so for us, I wouldn't be comfortable with, like, a zero. Down 1%. Down 2%.

What do you want down low?

I mean, I would say probably at a minimum, 30, 40% down.

Do you think. Do you know that they would have that money?

I have not heard whether they would be willing to do that or not. My assumption is probably not. Because if they would, you know, if they went through a bank, they'd be able to do something, like you said, anywhere between five to 20%. And so I haven't heard any kind of terms along those lines. But in my interest, that's where I would ask for a larger down payment, shorter terms. And so that's where I would think that it would be less risky on our end.

Well, here's the thing. Here's the thing. You're not desperate. And I think that if you were in a situation where there was desperation, or even in a non desperate situation, if we were talking about a buyer and you knew this to be true, and maybe it was like your brother, I don't know. There could be a situation where you might consider this, but you're not desperate. The house is paid off. You're not floating two mortgages right now. I mean, George.

Well, and the other piece of this, Eric, you got to realize the opportunity cost of you not selling the house, taking that money, and paying off your mortgage or investing it. And so there's a lot of things that I don't think we've totally thought through. And I would also go, are there other buyers that are just going to go through traditional financing? Because there's not really upside here for you.

Yeah, because that's where I was thinking. The terms that I would consider an upside would probably be shorter loan period, higher interest rates than what a bank would be offering, higher down payments. And that's where I would look as if I was a buyer.

Why would I?

Why would you ever do that?

And you're not going to give them a lower interest rate than they would get on a traditional mortgage. That wouldn't make sense for you to take on that risk. And at that point, that worries me that they'd even be willing to take that deal.

Yeah, typically, this would be something that you would do, maybe between. I mean, and I'm not recommending this by any means, but maybe it'd be something you do between friends or family where you're trying. The intent is to give them a better deal. Maybe it's family or something.

If you were the one buying the property and they wanted to do owner financing, then we would go, okay, well, the risk isn't on you, and as long as you're getting a deal out of this, then go for it. But I just don't see enough, enough green flags here to move forward. I would wait and find a buyer who's willing to go the traditional route.

Yeah.

Yeah. Okay. Yeah, that makes total sense. That kind of gives me, that was kind of my gut feeling towards it and, yeah, that definitely helps kind of clarify and give me a clearer picture on what it. The only thing I would really be taking is probably a deal that somebody else wouldn't want to take anyway.

That's right.

Yeah. We can be generous in other ways. Let's not do that with this many zeros on the end and put your financial future at risk. And I love this quote. The person with the most patience, information, and options wins. And you guys are in a place where you're not desperate, you've done things the right way, and so let's just move slow. And when the offer's right, you're gonna say confidently, yes. Instead of a, should we do this?

I don't know.

It could be risky. Thanks for the call, Eric. This is the Ramsey show.

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Welcome back to the Ramsey show. I'm George Campbell, joined by Jade Warshaw. Open phones at 8825-5225 Jessica's up next in Nashville, Tennessee, right up the road. What's going on? Jessica, hi.

Thank you so much for taking my call.

Sure. How can we help today?

So me and my husband recently started listening to the podcast and really getting into finances, and we only have about.

$2,000 left on our credit card, which will be done within the end of the year.

And we're looking at our student loans and we just don't know what to do. Mine are all kind of like little.

Tiny, like 2000, 3000 loans, whereas his is like a giant $45,000 loan and we don't know if there's a difference and who we should tackle first.

Okay, well, I love, number one, that you guys are kind of on this road together. You've decided it's important for you both to pay off the debt and you've decided that it's important to work together. So kudos to that for this. It really is just the, the methodology of the debt snowball. And all that is, is we list all the debt between the both of you in order from smallest to largest based on balance. So not payment amount, not interest amount, but by balance. So right now you're kind of already doing that. You've got 2000 left on this credit card. And then what you do with these student loans is you both pull up your, you know, screen of your provider and you go through smallest to largest. Like you said, yours are busted up in little bitty guys. And so you list those smallest to largest. And the same thing with his. Is his a federal loan or a private loan?

It's a federal, okay.

And it's just one, right, because sometimes you make one payment, but when you really go in there and look, it's still listed by semester.

No, he had one loan that was going to go into collections and they told him that he had to consolidate. So giant federal loan now.

Okay, got you. So that's going to be the final one that you pay. But the good news is because you've worked the snowball, you will have gotten back all those little bits and pieces of payments, so you'll be able to hit it with a big shovel. What's the combined amount that you have in student loans?

I have about 65.

65. And he's got 45?

Yes.

Okay. And then what's you guys combined income?

100,000.

Okay, so you've got a little bit of a journey here. You know, you've got 112,000 to pay off, and you're making 100,000. Have you jumped onto every dollar? Because we have a really great financial roadmap that you can plug in all your numbers and kind of project what your payoff date is going to be, and then you can project when you'll be on baby step three and how long that'll take. Have you done that yet?

We are on my every dollar. The premium expires today. Actually, we just sat down last night.

And finally, all of the numbers in.

There, you didn't pay for it yet, did you?

No, sir.

This feels like a plant. Jessica, did you call in on the day of the expiration, hoping we'd give you every dollar?

I promise I did it. I just happened to.

Look, it's fine either way. We're going to give it to you.

Yeah, we're going to give it to you.

We're going to give it to you. So hang on the line after we're done, and we'll help with that. And what I love about every dollar at the bottom, you're going to list those debts with the minimum payment, with the balance, and it will list them all for you, smallest to largest. And it's a great way to keep track of how much extra you're putting on that little one and when it'll be paid off. So that's going to be a big help. But it really is, I think, psychologically motivating to see the little ones get knocked out. And I know you're going to get to that big one and go like, oh, gosh, we're in it now. $45,000 ahead of us. But you're probably also gonna be making more money a year from now than you are, right?

Yeah, hopefully.

Are you guys doing any side hustles or anything to supplement that 100,000?

He does. He does a lot of side projects.

On the weekends that probably bring about 400 in.

400 a month. Every. Oh, 800 a month?

Yes.

Okay, great. Okay, good. So, yeah, I. My recommendation, I think that if you have debt, and this is not just for you, but anybody has debt. They need to be bringing in anywhere between five and 2000 extra dollars. That, for me, is the 500 to 2000. Yeah, at least 5000. But if you can get to 2000, you're, you're swinging for the fences.

500.

Yeah.

Yeah. I like that plan. And Jessica, the fun part for me, and maybe I'm a math nerd, I go, okay, how little can we live off of out of this? 110. And that might mean we pause investing. It should mean that if you guys are currently investing, let's pause that to get some money back in our budget. And then with our take home pay, we go, all right, I'm. It takes us $2,000 to cover all of our basic bills. That should free up another 2000 of our 4000 take home pay to tackle the debt. And now you kind of know the gap because if you do the math right now, how long is it going to take you to get out of debt?

At the current pace, probably about 15 to 20 years.

That sucks. Can we agree 15 to 20?

Wait a second.

She's saying if she makes minimum payments on all the debt.

Oh, minimum payments. Okay. Okay.

But now, now with Jessica's current plan, it's probably more like four or five.

Years, I think so.

And the jade and George plan is like, how do we do this in two years? Maybe two and a half. And that means there's a gap. All right? Instead of throwing a thousand at the debt, we got to throw 2000. And here's what we're going to cut. And that's where the budget is going to be your best friend and show you the reality of where you're spending and where what can go.

And here's a couple of freebies. I mean, are you guys getting a tax return every year? It's only like three hundred bucks to three hundred bucks. Okay. I mean, you can look at that and see if you can get it down. Probably not. That's pretty close. Um, what about investing? Are you doing any investing?

I only do the match my company does into my 401k.

Okay, how much is that every month?

It's 4%. But I just started a new employer, so it hasn't even begun yet because.

I have to be there for three months.

Okay, perfect.

So let's just not start that because that's going to free up hundreds of dollars. That could be going toward debt. And I promise you, we'll get back to investing with a vengeance later on. But what happens for most people, Jessica, is they go, well, I want the match, and therefore I'm willing to stay into debt longer, and I'm kind of comfortable here. And then they do three or 4% for ten to 15 years.

That's right.

I'd rather see you do 15% two years from now.

That's right. Next category. Because I'm just trying to help you find money. I want this to happen fast. What do you spend every month on going out to eat?

We have a budget of $50.

Okay, good. What about groceries? It's just the two of you?

It is.

My husband does.

He's like a gym guy.

So our budget is about 800.

Okay. That's not bad.

Gotta get that protein in.

Yeah. You might be able to do it a little less, but that's not bad. $800 for two, folks.

Just get that. Like the boneless chicken thighs from Aldi. You stock up on those.

That's plenty of protein about a chicken thigh, George.

Well, yeah, Jay's not. She's not dabbling that world. I'm just. I'm a big gym rat myself. Jade, if you can't tell, I could.

Tell by your bulging biceps.

But I do watch a lot of videos about protein. For some reason, I don't know, I'm very intrigued by the lifestyle, Jessica.

But the point here, Jessica, is we're going through the budget with a fine tooth comb. And this is, like I said, for anybody listening, withholding is a great place to start investing. Look at that. Food budget, cars. A lot of times, people's opportunity is sitting in their driveway. So tell us about your vehicles.

My husband's a 2012, completely paid off.

Okay.

And then mine was gifted to me.

By my father, so I actually don't pay for it.

Okay, so that's paid off?

Yes.

A 2018 Toyota.

Okay, good.

Another thing that's really people don't think about is insurance across the board. Reshopping insurance. If you go to ramsaysolutions.com checkup, we have a great coverage checkup. It'll take you just a few minutes to do the quiz. And I helped a friend here actually reach out to Xander. They re shopped their insurance, and they had better coverage while saving $80 a month.

Nice.

$80 back in the budget. So just doing something like that, Jessica, with homeowners auto across the board, could save you $100, $200 a month.

Yeah. And then there's the utility type stuff. You can go in, call your cell phone provider, and say, hey, are you offering any deals if you still have cable in baby step two.

Yeah. What are you guys paying for your cell phone bill?

I'm sorry, can you repeat that?

What are you paying for your cell phone bill?

So right now, ours is separate because.

I do own on my phone and that should be knocked out by the.

End of the year.

But mine is $87 a month and his is 60.

But we plan on going to mint.

Mobile where it's like $30 a month.

I was going to say, tell o has been a great sponsor of the YouTube channel and they're $25 a month for unlimited. You can't beat it, which is incredible. So that that's a big savings. Some people are just paying like $120 a month for their phone plan, not even including the phone. So just some ideas. Jessica, along with everydollar, I'm going to send you my book, breaking free from broke. I want you to specifically read the margin is breathing room chapter in there. I lay out a bunch of the ideas that Jade and I throughout and many more just to get you going because we're pumped for you guys to become debt free. Do you feel like it's closer just on this call?

Yes. I mean, we also made progress.

We started with about $16,000 in credit card debt and we're down to maybe two 3000, I think, 2400.

So thank you guys so much. This was really helpful.

Love to hear that. And you're right down the road in Nashville, so come see us for your debt free scream. Looking forward to meeting you guys and celebrating in person. Hang on the line. We're going to send you every dollar premium and my book, breaking free from broke. Hope those resources help you along the way. More of your calls coming up. This is the Ramsey show.

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

Yeah.

And what's so hard is I feel like one of those, especially the ones.

That I'm like, oh, it's terrible.

Air. People that call in and their spouse.

Has passed away suddenly and they don't have life insurance. When you have to think through, how am I gonna pay my bills, how about next week? Yeah. In the middle of all that grief, like, it's just. It is. It's terrible. And so life insurance is the one.

Thing, especially as a mom with three little kids, that I'm like, so big on for people to get because it's inexpensive. Zander is the place that Winston and.

I actually get all of our life insurance.

And it doesn't cost much. Cause Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not gonna be here. You got to say it out loud, and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 803 564282. That's 803 564282 or go to zander.com.

Welcome back to the Ramsey show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-25-5225 we just took a friend, a call from our friend Jessica, and we were walking through, mentally, kind of all the budget line items, helping her find some margin. And if you're wondering about this app that we're talking about called everydollar, it is an app that our team created here because, frankly, we were tired of seeing all these other apps not doing a great job and not allowing you to create a zero base budget where every single dollar has a job, has a name. And so we created one a decade ago, and it just keeps getting better every single day, every single year. So if you want to check it out, it's totally free in the app Store or Google Play, or you can click the link in the description if you're listening on YouTube or podcast. And I'm telling you, this is the plan that is underpinning all of the baby steps. It is the budget. It's the way that Jade and her husband got out of hundreds and hundreds of thousands of dollars of debt. It's the same way I went from broke to millionaire.

It's every month. Make a plan before the month begins. Stick to it. It's that simple and it's that hard, but it is so worth it. So go check out every dollar in your app store. All right. Daniel is in Boston, up next. What's going on, Daniel?

Hey, how's it going? Thank you, guys, for taking my call.

Sure. What's going on?

All right, so I have. I'm on baby step number two right now, and my biggest question is if I should sell my car or sell both. The cars that we have, we are about. So, I just got married last year. We just had a baby. Main reason why we want to get out of debt is to get a house. But we are $55,000 in debt. $20,000 is the cars. $8,000 is student loan, and the rest is credit cards.

Okay.

The car that I'm looking to sell is a two door car, so it's a little hard to use with the baby, I owe about $12,000 on it. And Kelly Blue book is saying it's about worth a 14 to 14 five, average price.

Good.

I've listed it before, a couple of times before we even had the baby. I just never had good luck selling it, mainly because I didn't have the title. So my biggest question was wondering if I should get a separate loan to pay off the car and then sell the car and then pay off that loan that I took out. Or am I overthinking this?

Well, the simpler way is you do this all in one transaction. So you go to whoever holds the title and you conduct the transaction there because, not that there's, you know, you don't have a clean title. I mean, you just got to pay the loan off to get the title, and therefore you need that person's payment in order to do it, which is.

Totally normal on private sale.

Right? Yeah. Just a lot of people that I've seen didn't really, I guess, trust it's.

Because they've never done it before.

Yeah, that's where I was in, like, wondering if I should, you know, get a loan for it. And same thing with the other car. I mean, it's one of my biggest payments. It's about the two cars. It's about $850 a month.

What do you owe on it?

So the other car, the Camry? I owe 8000 on that one.

Okay.

What's worth about 14? The average.

And the payments? 850.

Is that the total?

That's the total for both cars. The Camry is 438. The two door car is 413.

Okay, so they're pretty equal. But the good news is, for the camera, you get more money back off the sale. What's the. For you, what's the. What do you do? Are you going to be a one car family? What's. What's the plan after you liquidate one or both of these?

Right. So we definitely both, both need the cars. She usually drives to clients's house. I drive to work. It's just my car was the one that we wanted to sell the most to get at least a car that has four doors.

Sure.

Just to make it a little bit easier for the baby. And also doing groceries, because usually her car is the family car at this point. So that was the whole point. And also, we obviously never realized how much debt we had until, like, the first year of marriage. So getting everything, you know, looking at all the debts and seeing what we can eliminate, what we should be better at with our money and we just thought this was, you know, because it's the biggest expense that we have besides our rent.

I like the idea of you selling the smaller car if you clear 2000. I also wonder, I mean, I don't know how long you had it listed or what sites you had it listed on. How long did you have it listed before you pulled it?

I'd say so. I listed it twice and I had it probably for that duration. It's like a month, two months.

Okay. That's not too, too long. But it does make me wonder if it. I don't know if all the feedback was, you don't have the title. You don't have the title. But it might make me wonder about the price, if it's accurate or nothing, if you're not getting any bites. So just put it out there again and ask people for their feedback so that you know what's going on. Is it the price that's the issue, or is it really the fact that you don't have the title and you.

Can contact the different dealerships out there and see who'll give you what. And some of these online car sellers as well, and see maybe some of them out there. Back in the day, Jade were giving people crazy top dollar. That's slowed down, but you still might get a pretty decent deal to get out of this thing. What's your household income?

So right now, we both. She got a raise, I got a new job. We're about 95 now.

Okay. And what's the 20? So you got about 27,000 in credit card debt?

I do, yeah. It's about a little bit of hers and mine. Yeah.

Combined. Okay. Cause making 95 and looking at your total debt load, I mean, if you wanted to keep the cars and you were gazelle intense, you could just go ahead and plow through it and the debt snowball and keep the cars. But it sounds like you don't really want this two door card anyways.

Yeah, it's a big hassle. And actually, I did get an offer from Carmax, which was $10,000. I don't think I was supposed to see this, but they said they were going to list it for 18 grand.

Yeah, they're about to make some banks.

Trying to take you for a ride.

Well, you owe twelve, so I don't like the idea of you kind of going underwater for this deal. So I would hold and see what you can get for it. Top dollar. Clean it up nice. Take real good photos listed on all the major places. Facebook, marketplace, Craigslist, auto trader, you name it.

Okay, cool.

Sound good? All right. You're on the right track.

I feel for my Bostonians out there.

Yeah, it's tough.

All right, let's go to Juliet in Winston Salem, North Carolina. What's going on, Juliet?

Hi, George and Jade. My husband and I are having a little bit of a disagreement and was hoping that you could help sort it out.

Okay.

We love getting in the middle of.

Do you want to be right? Are you hoping you win?

I think there's an argument where we could both be right.

I like it.

I like it. Is he there?

We are on baby steps four, five, and six. We raced through two and three in the last few months, thanks to your book, George.

Oh, awesome. Love to hear that. Congrats. You guys did the work. You busted it.

So the dilemma is, we have been trying to have a baby. It hasn't happened. He wants to keep going through with stork mode, and I would rather put more towards paying off the house investing.

So you're not pregnant yet? I am not, but he's considering it. Stork mode. Did I hear that right?

Yeah, I. We are a single income family with myself working, actually, and I think he's concerned that I could get laid off or something else happens, and then we're having to cover daycare and health insurance for us.

Technically, stork mode is kind of reserved for baby steps two and three.

You guys have an emergency fund? How much is in there?

We have around 40,000.

In an emergency fund, you sit in.

Pretty much more than six months.

And that's more than your out of pocket max on your health insurance?

It is.

So I don't know what we're saving for at this point.

I think he would love to be able to have all of daycare saved up.

We need to fund a year of daycare in our emergency fund.

This guy. Listen, I love the sentiment. He's thinking, if I can get ahead, I'll get ahead. You know the people who, like, pay their utilities years in advance and they pay everything up? Yeah. I think if he's listening or you let him listen to this call later. Again, stork mode. And for those listening who are new, it's just the idea that if, you know, you have a baby on the way, but you're actively paying off debt, if you're in baby step two, you pause that intensity and you stack up money so that you have it when baby comes. But in you guys case, you're out of baby step two, you've got 40 grand saved. Yeah. You should be investing 15% of your income and anything above and beyond that. If you want to make extra home payments, you can. Now, if you're saving up for some sort of fertility, you can also do that on the side. But you guys are doing well.

Yeah. And if and when you do get pregnant, then we can say, all right, or you do get laid off. Then we need to pause and go, this is a storm.

That's right.

Let's pause and save up cash because you were laid off. But you guys are going to be just fine. And I hope you get that little baby here real soon. That'd be awesome.

Good luck to you.

This is the Ramsey show.

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Welcome back to the Ramsey show. I'm George Campbell, joined by Jade Warshaw. If you didn't know, we've got a Ramsey Network app where you can tune in to all of the shows distraction free, including this show. All 3 hours are in the app, and we also have a place where you can ask questions. And we'll occasionally answer those on air. So, this one is from Dylan, from the Ramsey network app. What does he have to say? Jade?

Yeah. He says, my fiance has college grants and scholarships. Which she won't qualify for both our incomes. Okay, should we wait to get married so she can graduate debt free? Wow, that's very interesting.

What an intersection.

I want to know more. I want to know what the timeframe is like. Are we talking six months? You know, are we talking four years? I want to know more about this. My thought.

Can we cash flow if we don't get the grants and scholarships? Can we steal cash flow? Yes, and avoid debt?

I mean, there's part of this where I go. Okay, I'm thinking traditional college student. So maybe she's what 1819 going in? I don't know, George. I feel like we need more information. I'm gonna say if it's a year to postpone it, maybe. And I want to know how much school is.

When do you plan on getting married? Were you going to wait for her to graduate anyway?

Yeah. Yeah.

So many questions, so little answers.

So little answers. I can't answer this in good faith and really know what's going on.

And how much would we be? Is we talking $100,000?

Right? Or are we talking $40,000? I don't know. Can you even go to school for 40,000?

It's an interesting one, though. Dylan, I don't think there's a straight answer here of absolutely, you should wait, or absolutely don't wait and just cash flow it. But, Dylan, call in. I want to know more about this.

I know, and I. Does it have to be for the entire four years? Or are we talking semester by semester? Maybe you take it semester by semester and go, okay, you know, she starts, okay, it's about to be November. So the new semester comes up here after Christmas break. Maybe she does that one and you guys reassess and go.

Can we cash flow the rest and just combine incomes and get married? And we've got it from here. So that would kind of be my thing, is how can we put ourselves in a position to not need the grants and scholarships if we're itching to get that wedding and get married?

Yeah, well, either way. Either way, we don't go into debt. I think that's the key point coming out of here. Debt's not on the table. And if that. If it means you have to wait a little bit, that might be the question, the solution.

All right, we got some more. That was good. Good question, though. All right.

It was all right. We need more details.

Let's go to Todd in Phoenix, who we can actually talk to. That's nice. Todd, what is happening with you?

Hi. My wife and I, we've been kind of going back and forth on selling our home to pay off some debt. I've been kind of an idiot the last few years, and we can all.

Say that at some point in our lives.

Thank you for having the self awareness.

Yes.

Hold money out when build a pool. And these things we probably didn't need to do. And, you know, we, I guess the issue, we pay our bills, we eat, we, we live, you know, pretty, pretty normal lives, but it's gotten tighter and tighter and it feels like we're not, not really moving at all, kind of just spinning our wheels and.

So what's your household income?

About 170.

And how much consumer debt do you have?

Everything but the mortgage, about 182.

Okay. Yeah. You're feeling it. What kind of. So tell us, can you break down that 182? And by the way, does that include the mortgage?

Yes. No, it doesn't.

Okay. Can you break it down for us?

So I did a HeLOC for 60 and built a pool and actually paid off some debt with that, which we then kind of racked up again, another personal loan for about 57. I've got a car loan that's got 17 on it.

What was the personal loan for? What did you spend the 50? Is it 57,000 or 5750 7000? Okay. What was that for?

It was really stupid. I outsmart myself from time to time. And I thought, okay, I'm going to do this personal loan, and we're going to pay off, like, we paid off both of our cars and used it what I thought was kind of the right way, but then have since just kind of racked up money in other areas.

Okay.

So you took on debt to pay off other debt while changing zero habits, and you are right back to where you were.

That's a cautionary tale for anybody listening. We talk about that all the time. So you're teaching a lot of people. Thank you, Todd, for being transparent. What else do you have? So the 57,000 personal loan, what's next?

Now? I have another car loan now for 17, about 20 grand in credit card debt and then 28. And, like, I did a debt consolidation kind of thing to get rid of. It's kind of same thing. Get rid of credit cards.

Okay.

Transferred to zero, you know, 0%.

Like, are we done playing the game? You think are you? You're like, all right, yeah. I'm not gonna move debt around to other debt. I want to weigh out. So what are you thinking about doing?

Well, so it was debating selling out. Like, my wife is not. Not on board. You wanted to sell the house, possibly selling our house to pay off, pay off debt, but it wouldn't. It wouldn't pay off everything.

But do you want to know why I don't like that for you? Do you want to know why I don't like that for you? Because it's the same thing you've been doing.

It's another one of Todd's schemes. Todd shortcuts.

And I think, and don't get me wrong, when people get a great opportunity, maybe they get a large sum of money, they get an inheritance, they get a large bonus, or they were going to move anyway, and it ends up clearing their debt. I'm happy for them. But you have laid out a very long pattern of the same behavior, and I'm not getting onto you for it. I'm just telling you what I see based on what you said. And I'm worried because the worst thing ever, Todd, would be that you sell your house even when your wife didn't want to, and you wind up in debt again. So for you walking through the. Cause, I always tell people, when you walk through the baby steps, right, George? That is the opportunity for you to change your habits, because it's built in. You can't get out of the baby steps without changing your habits. It's automatic, almost.

Yeah.

And so I. As painful and as, as tough as it can be, I would prescribe, if I were the person writing the prescription, that you walk through the baby steps and you do this the old fashioned way.

Okay? And we've done that before. I mean, we have. We have been relatively debt, like I said, minus a car payment or something. You know, we've paid off credit cards before. We've paid, you know.

But you've never been completely debt free while you've been married.

No. No. I mean, when we first bought our house, the only thing we had Washington, the house and a car loan.

Is your wife on. Is she on board to do the baby steps? Because I think what you're going to have to go back to her and say is, all right, fine, we won't sell the house, but we're going to have to sacrifice like crazy.

No, she's much. She's much more responsible than I am.

Okay. I was going to ask her. Suspender.

It's me. And she doesn't insist on anything. She doesn't ask for to do any of the things that I come up with.

It's mostly like, so she's been a passive passenger for all of your schemes?

Yeah, she never. She never tells me now.

Not even a disdainful look, I don't. I don't think my wife would allow me to do all this and not, like, have a blow up argument yelling at me. How has she been totally cool with.

All of this since we. I mean, we pair, but, like, you wouldn't, you know, she doesn't feel like looking in. We pay our bills. We okay payment on anything, and, you know, 20 years. So everything is comfortable, but it's less comfortable.

And that's what I want to warn you about, Todd, going into this, it's George and I see both sides of this all the time. When people call in and their income is low and they've got to go out and hustle and grind to get the money, it's almost easier for them to do what we teach than a person like you who has a great income and you're going to have to downsize. And kind of what you just said before, like, the debt didn't really show. We were able to cover it up and make the payments on time. Da da da da da. When you get out of debt, I'm just letting you know right now, it shows, and it's going to show. And that same part of you that kind of liked being able to show off with the money and the pool and doing all those things, I'm talking to you because I recognize myself in what you're saying. That same part of you that liked showing that that's going to be the part that hurts the most when you show the opposite, which is we're downsizing our cars and we're downsizing and we're selling things, and we don't go out as much.

And I don't buy the things that I used to buy. Your family's gonna see it. Your friends are gonna see it, you're gonna feel it. And that's just part of the process. Don't let that deter you. That's how you know it's working. That's how you know the medicine's getting in.

That's right. So let's get to work. I mean, sixty k a year, throwing at this debt. Three years, it's all gone. Making 170. How do we find that margin? We need to make more. We need to spend less. Let's get to it. Thanks for the call, Todd. That puts this hour of the Ramsay show in the books. Thank you to Jade Warshaw, all the folks in the booth, and you, America, will be back before you know it.

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Today from the Ramsey network. This is the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality George camel, joined by the one and only Jade warshaw. We're taking your call calls. Open phones, 888-825-5225 that's the number to call. We'll try to help you take the right next step for your life and your money. Kate is going to kick us off this hour in Raleigh, North Carolina. Kate, welcome to the show.

Hi. Thank you guys for taking my call. I'm so grateful to be able to speak with you both.

We're happy to help. What's going on in your world?

Okay, so my husband and I own an investment property, and we have a tenant that gradually falling farther and farther, kind of behind. We're also in baby step two. She's almost current right now, and we want to be gracious landlords and give her as much grace as we can. But at the same time, we know that when she moves out, we're going to need probably $10,000 to put into the house to get it ready to rent to the next tenant. So we're trying to navigate how to help her, if we can, to stay so that we don't have to pay that 10,000 while we're still in baby step two, but also help her not dig herself deeper into a hole that she can't get out of.

When's the lease up?

So actually, October 31. And it goes into a month to month term after that. So we need to give her 30 days notice at any point that we want to terminate.

Okay. How much debt do you guys have?

So we have about 60,000. We're, like, in gazelle intense mode right now, so we should have that paid off by march if everything stays according to plan.

And do you own your house? Do you live in a house?

Yes, we do. And the 60,000 is not including our mortgage or the mortgage on the rental property.

What's the mortgage on your house?

Right now we owe about 200,000.

And what's the mortgage on the rental?

About 100,000.

What's the rental worth?

Probably 250.

Okay.

What's your household income?

About $175,000.

And is that with the rental income or. I guess right now there isn't a lot of rental income, correct?

Yeah. That's including the rental income? Yes.

How much was this rental bringing in in its heyday, when the tenant was paying?

So we net about 500 in profit a month. It rents for 1500, and the mortgage in Hoa is about 1000. So we get about 500 a month in profit on it.

Well, it's less than that because you got maintenance and repairs. You just told me you got ten grand of work to do on it, too, right?

Yes.

So you're losing money on it currently.

That's not every year. We've only owned it for about four years, and so we haven't had any major repairs that we've needed to make to it yet. But we know that we're going to need at least paint, carpet, and a couple repairs whenever she moves out.

How long has she been in?

She's been in one year.

Okay. So the whole year she's just struggled.

What's the story when you talk to her? What's going on?

So it's been a different story every month since May, which is what really has our antenna up. Yeah. So we want, like I said, we want to be gracious and give her the benefit of the doubt, but every month been, I'm having a problem with my bank or I'm traveling out of town or something just keeps coming up. And she. Right now she only owes about $275.

What does the lease agreement say?

The lease agreement says we can give her 30 days notice at any time for any reason. Now that the lease is going to be up at the end of October, we could, I mean, file court paperwork. Like I said, right now she only owes $275. So I don't really want to. I don't want her to damage the house on the way out? No, but I want her to stop paying.

You could just say, hey, you know, it's 275. This doesn't seem to be working out for either of us. So when the lease is up, you know, it feels like this is too expensive for you, and I think the way you lay that out, because I definitely wouldn't want to renew a lease with someone who's not paying.

I would find a new tenant ASAP.

And you're not kicking her out. The lease is up, and as long as you give her the, you know, the days.

Is there anything in the agreement about her not paying and what happens if she doesn't pay?

Well, I mean, we have the right to take her to court and pursue eviction filings and all of that. Yeah, I don't want to.

Yeah, I'd get her current and then say October 31. You got 30 days.

Right. My concern is that she can't afford to move and she can't afford to save up for another security deposit, so she just stays and doesn't pay the rent.

A okay, well, yeah, but you can't. You can't worry about something that you don't know is, is or is not gonna happen. Right? Like, let's not play that. Let's not assume we know what will happen if you just remind her, hey, just a reminder, your lease is up the 31st. I want to talk about that. And then you guys talk. Talk in person, not via email or letter or any like that. Anything like that. Talk in person and say, hey, this has been a problem. You know, we love you, or we like having you here, but it's clearly too expensive for you. So for that reason, you know, and maybe, I don't know, I'm not a realtor and I'm not a landlord, but maybe you offer an olive branch and say, hey, you owe 275. You're going to need some expenses to move. So we're willing to waive that. Do. Do what you have to do to make this a clean break, because I think, to your point, if she's the type of person where you are worried about her damaging the house when she leaves, that lets you know, okay, this is not somebody you want to be in bed with much longer, right?

Yeah. And I don't think that she would do anything intentionally. I just. I'm concerned that she's going to stay longer than she needs to. And so we're not only going to not have rent coming in, but we also are going to have that expense.

And you might have to listen, you might go through that that is part of renting is every once in a while you get a dud.

But you need to remember you're not running a charity.

Yeah.

This is a business. And so I think it's great to be kind. You're not being a cruel landlord. You don't make the payments. You can't afford this, and it's. It. You can't let that fall on you. Because she can't rent somewhere else. She can. And if that might mean she gets a roommate. I had to get a roommate. I never could live alone up until I got married. And so that's up to her to figure out what's next. You did the due diligence of giving her 30 days, which is what was in the contract she signed. And so I think you need to be firm. And you seem like a real sweet person. I don't want her to walk all over you when she sees that she can.

Okay.

Is your husband a part of this, too?

He is, yeah. He's. He's more, um. Give her notice and get her out.

Yeah, he's in. He's in my boat.

Yeah. And I mean, I'm not. I'm not against that either. I just.

You've been very kind so far. Nothing here feels like you've been a greedy landlord who's a big jerk. But I do think you need to move on. Find another tenant. And you may even want to consider selling this property.

I was going to say that was my next.

Because y'all are broke, your tenants are broke. I think we might get a fresh slate if we sell this thing. Use it to pay off our debt, use it to pay down our mortgage, and then later on in life, we can become landlords again when we're at a much more peaceful place, financially.

Yeah. Cause if you sell this, you're out of debt. You've got three to six months of expenses there, and you might have another 1010 thousand or so left to do something else with. I love that.

I don't know that it's worth the, you know, five grand a year you're making off of this.

Okay?

Because think about this. You had a paid for property making 1500 a month. That's a. That's a different number. But for all this hassle, to make six grand minus expenses, repairs, maintenance, I don't know that I would do it. Especially while I'm in debt.

Yeah, why. Why grind it out when and have a tenant who's not paying when you can just go, you know, I'm washing my hands of all of this, and.

That'S a great way to get her out. Say, hey, we're actually going to sell the property. You got 30 days.

Okay.

That's an easy out right there. Okay. That's what I would personally do in your shoes. But I'm not gonna force you to sell your property if you love it. But right now, it's not the, the blessing that it seemed to be when I saw the tick tock video about becoming a real estate guru, this is the reality of being a landlord. Yeah, it can be a real blessing.

George, you were tough. I was trying to.

You don't want to mess with landlord George.

I was trying to be nice, which is a rarity.

Good cop, bad cop. This is the Ramsey show.

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Welcome back to the ramsey show. I'm George camel, joined by jade warshaw. Claire is up next in Raleigh, North Carolina. Claire, how can we help today.

Hey. I was calling because my husband and I are working through the baby steps. We just were about to finish baby step two, paying off our debt this month, and we are. I'm pregnant with our first child right now.

All right.

I. When's the due date?

Yeah, so we're due dates March 5. So I'm halfway through. Yeah.

Congrats.

Thank you. But we are going to finish paying off our debt this month, and we have the $1000 emergency fund. I currently drive a Honda sedan, and a lot of people have been telling me that I should get a minivan because it's safer for the baby. So between now and the due date, we can save up about four or $5,000. And with selling my car, we could buy a used minivan, or we could build up our starter emergency fund up to about five or 6000. So my question is, which one of those do you think should be the priority before?

Which one do you think should be the priority, regardless of what everyone around you thinks, because they're so smart and they pay your bills. What do you think you should do?

I'm not sure, because I will be. The plan is for me to stay home with the baby. So it'll be the first time that we're living off of just one income. So that, like, building up the emergency fund for that seems to make sense to me. But I also don't want to, like, get hit by a car on the highway and then my baby's not.

Well, let's not have the fear mongering happen. And guess what? A Honda sedan is plenty safe.

Yeah.

And unless you're having triplets, there's no need to go out and buy a seven seater minivan just because people said it's a good idea.

Clara. I'll let you cheat off my test. The answer here is we do the emergency fund because you a. The baby's coming, and you're gonna have to pay. You might have to pay something out of pocket. Right? So we definitely want more than $1,000 there. You don't know how it will go. I know that it will go safely, but, you know, you never know.

And if you're staying at home, we're not gonna be doing a ton of traveling other than to doctor's appointments.

That's right. Yeah. You're about to be locked and locked down.

And I got a. I have a 13 month old, and my wife stays home. And we. We upgraded her car, not because we needed a safer, fancier car, but it was because mama wanted it, and we had the cash and we saved up, but we were in a different, very different place. We were in baby step seven. And so in the stage you're in, I would rather see you with a pile of cash to create some peace versus upgrading in car right now. Is the car reliable? It's running fine, yes. Okay. You're better. I mean, get a good car seat. That's what I'll tell you. That's really the.

Invest in a good car seat.

You do that and you'll be just fine.

Kudos to you, though, for looking at this the most economic way, though. I love that you were like, we can buy a $5,000 van in cash flow, as opposed to the ridiculousness of going out and trying to get payments. So kudos to you on that. But I do believe that the emergency fund is more important. It is more important.

And ask anyone over, I don't know, over 60. I mean, the back in the day, you weren't getting a minivan just because you had a baby.

I don't even have seat. I'm aging myself, but I don't even feel like I was wearing a seatbelt in the back of that cadillac that my parents drove.

It was uphill both ways. No seatbelt.

No seatbelt.

We've come a long way with safety, but also, I think drivers have gotten crazier and stupider over time.

Well, have you seen there's a meme going around that it's like, basically, people think that drivers today are dangerous because they're texting while driving. But then in the meme, it's like, this is me in the nineties, and he's got the giant cd book, and he's flipping through the cd book while he's driving and putting in his six disk changer. That was me.

Simpler times.

Simpler times, indeed.

All right, let's move on to Dimitri in Springfield, Missouri. What's going on, Dimitri?

Hey, so, quick question. So I'm currently in Alaska. I already moved my family out to Missouri. I'm moving to Missouri as well. So here I've been doing tiles since I was 14 years old. I got my own business since I was 18. One of the bigger contractors here. And I hate my job. My question, I'm a talker. You know, I can talk anybody into buying anything. My question is, when I move down to Springfield, should I continue with doing.

What I do and what I know.

How to do, but, hey. Or should I try to pursue doing something in sales?

Or.

I guess, yeah, summoning sales, because I can. I sell people on stuff all the time.

Okay. So you're like, my whole life. I've been in tile since I was 14. I'm 18 now. I'm like, okay, so, no, I'm 20.

I'm 24.

Okay, so you've been doing this for a decade. You're going, I fell into the tile business. Don't love it. I want to do something else. I think sales is the skillset that I'm actually good at and that I enjoy. Correct?

Yeah.

Yeah.

Right.

Well, in the, you know, you could just try to find a sales job. I don't know what the, the market is in Springfield.

I dropped out of school, so I.

The best news about sales, no one gives a rip about your degree. It is. Can you sell right through that? So. And if, if you're. It sounds like you'd be a good interviewer. So I would look for a sales job. And in the meantime, if you need to cover the bills, I would be doing tile. Because that's what you know how to do.

Yeah. That's a great side. Side job. Something you do on the weekends and projects that you, you do on your off time.

But the goal is we do tile as little as possible and we start to get the boat close to the dock so we can go into sales. And I think you'll do very well. How much, how much were you making doing tile?

My best year so far was almost 100.

Great.

So here's what I would be doing. I'd be doing tile full time sales on the side. And as I get better at sales and it starts to really pick up, I would do less and less tile until we've replaced that hundred k with sales income, especially because you got, you got a family, right?

Yeah. I have two kids and a wife.

So it's. We don't have as much risk tolerance as we did when we were 18 and single. And so that's why I'm telling you I would find something that's stable, consistent income. Is your wife working or she just at home with the kids?

Once we got married, I told her she's never going to work a day in her life.

Wow. All right. You're the provider, Dmitri. So I would find something you can do in Springfield, and that might be tight. You might find a great sales job and go right into it. I don't know. I hope you do.

Okay.

But I'm gonna send you. What's that?

One more quick question. For me to switch professions like that.

Yeah.

I know it's scary and risky, but on the back burner, what if it does not work out? Do I just stick with what I know?

I mean, it's nice to have. It's nice to have something that, you know, makes you money, right? But at the same time, with sales, I do think it could take a while to get your footing under you.

I think what'll happen is you'll just end up switching industry.

Yeah.

What you're selling might change, but the skill set is there. You're telling me that's what you love. And that's why I'm going to send you a copy of Ken Coleman's new book, find the work you're wired to do. It comes with the get clear career assessment. I think we need a little bit more bones on this, of. I'm really good at selling. Okay, selling what? Cause I want you. You're just gonna hate what you do if you sell something you hate. And so that's where we need to dial in a little bit more, dig a little bit deeper, and this resource is really gonna help you. So stick on the line and we'll help you with that. But this is a common thing I'm seeing, Jade. People, especially kids, they go down a path. Maybe that's a business that their family ran.

Yeah.

Maybe it's a degree they thought would pan out or a degree their parents wanted them to get. And they go, this ain't it.

Yeah.

And I've spent so much time, maybe so much money, even with zeros on the end, if you got student loans. And it's not it.

It's not it.

What do you do?

You gotta. You gotta pivot. In the words of Ross Geller, pivot.

It's hard. And there's a. I think there's a grieving you have to do. Yeah.

You do.

The picture of what I thought was gonna be it wasn't it.

And you spent time on it.

And you're probably angry, frustrated, resentful toward the people around you who said this was a path. Angry at yourself.

Yeah, but there's a.

There's a moment where you go, all right, I'm 24. I got. I got a good 70 years left in the tank.

Oh, yeah.

Let's change track and do it in a way that doesn't implode our life, especially when you got a family. So that's why we say you want to get the boat close to the dock. What we mean is, do the thing that you really want to do on the side and get it going. And then as you get better at it, you make more money doing it. Then it becomes clear what the path is going to look like to make in the jump. And by jump, I really mean, like.

A little baby leap.

Little baby step feels like a giant leap of faith. It may be not the right time.

That could be tough. So, George, if you were not a YouTube radio host, live speaker extraordinaire, what would you be?

17 things at once? I would probably be. I would run, like, an ad agency coming up with really creative ads to reach people in creative ways. I could see that we're doing a Super bowl ad for Honda. Like, it's gonna be out of, I think, just something with a lot of creativity, with media that reaches a mass.

Audience, which going mad men on us.

I'm doing that now. Just trying to help people get out of debt instead of getting into a Honda odyssey. So it's a different life.

I like it.

How about you, chef? That was easy. She knew, and she'd be great at it. Cause she is great at it. This is the Ramsay show.

Hey, it's Doctor John Deloney. Look, when you're stressed about money, it makes everything feel out of control. You run around like a maniac trying to make sure everything's covered, everybody's okay. I've been there. It's the worst. But you can flip the script with an every dollar budget. It helps you track spending and expenses in real time, so you always know what's happening with your money. Talk about a weight lifted off your shoulders. Start feeling in control of your money again. Download the Everydollar app today for free.

Welcome back to the Ramsey show. It's a show about you, your life, your money, your relationships, anything that matters to you. We are here to help. The phone number to call is triple 888-25-5225 the Ramsey show question of the day is brought to you by Wirefi. Listen, we've all made money mistakes. So if you have defaulted private student loans, we're not judging you, but we are saying you can do something about it. Contact yre fi. Why? Refi was created for people in your exact situation. So go to yrefi.com ramsey. That's the letter. Yrefy.com Ramsey might not be available in all states.

Okay, today's question comes from Stella in Kansas. I can't help it.

Stella?

Streetcar name desire. No. Wow.

You are older than I thought.

I have an old spirit. But anyway, today's question comes from Stella in Kansas. Our realtor is advising us to use some of our equity in our home towards buying down the interest rate on a new home. That we're purchasing. Is it smart to do this instead of just putting all of the equity down into the new home? If not, is there another way that we can fund, that we can fund bringing down the rate? So my first thought is you could go through and do the math on the points, but typically it's better to just take the money and add it to the down payment, to bring down the payment and make it more affordable. You know, typically, if you can afford the house and you just don't like the rate, like, if you can, you know, if they're, I don't know what they're offering, you say they're offering you, I don't know, 6.9 or that would have been a while back, but whatever.

It'S like six three now. So 6.35 down to six or something like that, if you pay a few thousand bucks.

Well, let's say, let's. Let's consider it before you buy it down. So let's say it's at 6.45, right? And you're like, we can afford this. I just hate the rate of then we would say the whole idea here is you date the rate and marry the home. So get the house if you can afford it, and then later on you can refinance it. Now if there's something going on and the rate is what's keeping you from getting the home because you can't afford it under that rate. And even with the down payment, it's a slippery slope there. I like margin, and I like knowing we can afford this, and there's plenty of space here, all of that. So to buy it, down it, I'm not going to say this because I know it's not the case for some people, but there's, it feels almost like a desperate move. It feels like I'm doing anything to get this house. And I don't know that that's the case, but. Well, you wouldn't check that.

Using that same money as a down payment instead is also going to bring down your overall payment. So you're asking, should we use some of the equity in our home? I'm wondering, why don't you use all the equity in your home to use as a down payment on the next one? That's what I would do. It's what I have done. I've never purchased points. I don't think it's worth it in most cases. Yeah.

Put on the down payment.

You've got to do a break even analysis to figure out. All right, if it costs me $2,400 to buy down the mortgage by one point and that saves me $36 a month. Well, divide that into each other and that's 67 months. So it's five years and seven months. It would take you just to break even just to make that 2400 back in interest. Then you'll make that $36 back a month. So I just, I don't think it's worth it for most people to wait six years to break even because by then the rates will have probably fluctuated, come down and you can refinance and do a break even analysis on that. So I would not do this.

What I would do is I'd get with Churchill because one of the great things about Churchill is they're going to form a relationship with you, Churchill mortgage, by the way. They're going to form a relationship with you and they're going to help you accomplish your goals the right way and the Ramsey way. So filter this through them and make sure that you're just not painting yourself into a corner. I think that's the big thing here, is to go, okay, this is an option, but it doesn't mean it's my only option. And don't do anything out of desperation because we got to get the house.

Absolutely. And they can help crunch those numbers and do the break even with you and show you, hey, listen, you can do this. It's going to take five years to break even. Probably not worth it. And they'll, they'll shoot you straight and.

Make sure you understand the math. If you don't understand it, don't do it.

That's a good life. Just principle, just principal.

Right?

Love it. All right, let's get to the phones. Gary Onna is in Atlanta, Georgia, up next. What's going on?

Hi. So I've been listening to you guys for like a month now. I've just been trying to really figure out how to consolidate this debt that I've racked up from a previous marriage. It's about, in all, about $50,000 worth of debt. 20,000 is due to a car that we just got prior to that, most of its credit cards, about 3000 in that. Also, we're working on getting my husband's immigration paper. So that's like $2,300 plus lawyer fees is 1500. And we just had a baby in March. So we're just getting a little overwhelmed and I'm just trying to figure out what would be the best way to do it. I just started back working to start helping. I work two days and I make between 200 and $300 a week. And he makes about $800 to $1,000 a week, depending on overtime. So I started applying to more jobs. I just trying to figure out what would be the best option for us right now due to us not having a big support with childcare. That's the reason why I don't work more. So what would be a good idea for us?

So in a good month, you guys are bringing in $5,000 a month. Is that fair?

Did I get that? If he's doing overtime every weekend, I would say yes. But there are some days where, since I work off commission, I'm a mobile dog groomer, there are some days where I'm not making as much as I could be. There might be a week where I don't even get any appointments with who I work with.

So what's a bad month for you guys? Tell me your lowest month that you've had.

A bad month I think would be probably anywhere between 1300.

Mama.

So are you all going into debt on those months to float your expenses? Have you been surviving?

So before we did all this, before we had to get the car, I always had like a rainy day fund of about like $5,000, but we had to kind of use a lot of that. So two, we still have a kind of a ready day fund that we actually really can't touch. I put about $2,300 and two different certificates. That is supposed to, I think it said grow with interest for twelve. For twelve, yeah.

But you can pull that money, there must be a penalty on the interest you earn.

Okay, so that gives you 4600.

It's about 2300 right now. That's the rainy day fund. That not such at all.

And why did you have to get a 20 plus thousand dollar cardinal?

So when we first got the car, that's not what we thought. We didn't do our research a lot because we got it from someone in the family who works for a car dealership. My husband's car went kaput and it wasn't worth fixing. It's like a 2013 100,000 miles and the transmission is out. So the amount of money going into it wouldn't have been worth it. So we got another car. So I will have to be able to get to and from work.

So you owe 20,000 on it?

It 20,000. But y'all are going to be upset because I was listening to you guys. It's through Exeter finance.

Oh, no.

That's the reason why I wanted to call you guys so bad, because I heard Dave Ramsey talk about it about two weeks ago on one of his podcasts and I was like, I have to figure out a way to get out of this or do something.

For those of you who don't know, let me catch them up. Gary on Exeter finance, they are a subprime lender. So when you don't qualify for Carmax financing, they send you over to Exeter with a 29% interest rate on this car loan. And then they ding you for every extension and deferment you make. They'll add on fees at the end for a giant balloon payment that people can't afford.

When did you get the car? How long have you had it?

I've only had it for three months.

Okay. What's the car worth?

It's worth between 16,014 thousand.

Is that primary value on Kelly blue book?

Um, no, that's when I initially bought it, but when I looked it up, it said between 14,016 thousand. When I did like, different searches.

And you didn't think spending 20 on a loan that wasn't a red flag at the time to go, it's only worth 14. I'm paying 20.

And didn't you say a friend did you tell me a friend set you up with this?

You said they work at the dealership, right?

A family work at the dealership? Yes. So they didn't. You know, I'm not blaming anybody, but my research, if I would have done like when I bought my first car, that was paid off. But if I would have went, okay, we're coming on.

We're coming on the break. We want to give you some help here. If I were you, I take that money. You told me you had two cds for 2300. I take that money out and clear the difference, that $4,000 difference. And then you, you and your husband need to save up cash super, super fast and buy yourself a $5,000 beater. That's the only way. You gotta get out of this card note. And I know the payment is ridonculous.

Especially with this income. We gotta get the income up. That is a one. And that means he needs to work as much overtime, he probably needs to switch careers. And you might need to go to work full time and put the kid in daycare if that means you can make more as well. I'm so sorry, Gary Ona, this is not a fun place to be.

Call us back if you need us.

This is the Ramsey show.

Hey, guys, Dave Ramsey here and I got a big announcement. I'm coming to a city near you. Live on the money and relationships tour with doctor John Deloney. This is the most interactive event we've ever done. You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City in April and May of 2025. Get your tickets and more information@ramseysolutions.com. tour.

Welcome back to the Ramsey show. I'm George Camel, joined by Jade Warshaw. Open phones at 888-25-5225 you call us, we'll help you take the right next step for you and your money. Reminder, Jade, the Ramsey Cruz is upon us. It's almost sold out. We are setting sails March 22 through the 29th. There's still a few cabins available. And as I was looking at the site, the lineup keeps expanding. We keep adding more and more special guests. And the one I'm most excited about is Trey Kennedy, one of my favorite comedians and online creators. He's going to be doing stand up on there. Of course, we have all the Ramsey personalities. We've got music. We got magicians. I mean, what more could you want? All inclusive premium caribbean cruise. You got to join us. Book your cabin at ramsey solutions.com slash cruise. Looking forward to that in march. Truthfully, selfishly, because I need a vacation.

Jade, we could all use a vacation. George.

Look how pale I am.

I don't want to look at it.

That hurts.

Don't look directly at it.

I need a base tan before I hit this.

Will you go to the tanning beds?

I don't think I would ever go.

Into a tanning bed.

I feel like we know too much. Like, science is out there telling us, like, hey, maybe don't do that.

That's worse than the direct sunlight. Is that what they're saying?

I'm hoping at 90. Like, I'm pale, but I don't look leathery. You know what I mean? That's my goal at this point.

You don't want the leather? No leather. You don't want to look like a catcher's man.

I'm gonna wear a lot of leather. You know, leather, but I'm gonna like the fawns. That's my goal. Good hair. Leather jacket.

Okay, George, we gotta mix it up a little bit. Okay, let's do a. Let's do a wild card here.

I don't know where she's going with this, y'all.

Well, you know, we were talking. We were talking earlier a couple hours ago, and we were talking about lifestyle creators.

Yes.

And we were talking about how it's like, you know, you earn more money, but you don't necessarily start buying a bunch of stuff. You don't necessarily increase your lifestyle like that, or else you'll look up and go, what happened to all my margin? Or you won't be doing. So it all started with me sitting down in my Amazon jeans and the zipper. Every time I sit down, the zipper falls down and I'm like, blast. These cheap Amazon jeans I bought. And I thought to myself, some things are worth. If you can spend a little bit more, just creeping it up a little bit, get quality over quantity. So the question I have for you as the wild card is, what is it worth it for you to spend? Just go ahead and spend the money on versus. No, I will buy that cheaply, and it's worth it. I jotted down a couple of thoughts here.

My first thought is anything that my body sits on or lays on or my feet sitting. So shoes.

Yes.

I'm not gonna be out here, you know, hurting. Yeah, I got cheap shoes.

Yeah.

Mattress. That's a big one.

Oh, okay. We're going spend it. We gotta be sleeping good now. There's a lot of mattresses now. They come in a, you know, folded up in a box.

That's fine. You could. You can still have a good mattress out of a box, but you gotta get one that isn't giving you back pain.

Okay. Yeah. Okay. I'm with you. Mattress matters.

Toilet paper matters.

And what's your brand?

Charmin ultra strong.

That's what.

The camel family rocks.

Okay. I go for the Kirkland brand. That is basically the equivalent of that. It's the strong one, not the soft one. The strong one. That's what I like.

How about you? What is worth buying? Full price, retail name brand.

I think you have to spend money on your hair if you're getting a haircut. No sports clips, no great clips. You got to spend money on a good haircut or good hair products.

I know all about that. I spend more than my wife does on haircuts, and it shows. Not on her.

I'll let Whitney come in there.

But, you know, women get their. Get like a cut in color a few times a year, right? I'm out there every two weeks back at the barber seat.

You see what's going on here, George?

I don't know how you do it.

I don't do it. I go to somebody and I spend the money.

So you got a new look every week.

I try.

It's like you reinvent yourself.

I try. That's. But that's part of what we do here. Bread.

Okay.

I think you need to spend money.

And get quality bread.

Quality bread. Don't come in here with wonder bread.

No Sara Lee for you.

No Sara Lee. Wow. Yeah. Spend the money. Get yourself some nice bread. Paper towels.

That's a big one.

Okay.

I've tried the store brand. Paper towels ain't cutting it.

Don't give me no viva.

It's the one. Yeah. I'm a bounty guy.

A bounty.

It's hard to beat the quicker picker upper.

Again, I go for the Kirkland brand. Costco. Kirkland.

That's second best. But I've noticed there's a difference.

Yeah. And definitely no. No jeans from Amazon. That was a mistake. And, yes, I am going to return these, even though I've worn them for 3 hours.

Wow. Amazon can be. You can find some good things on, like, Rachel Cruz loves her.

Some Amazon clothes I have yet, and maybe you guys come tell me everything I bought from Amazon. I end up returning it just. I don't know if I choose it wrong or what.

But, yeah, it's a personal problem.

Now, what do you go cheap on.

The pretty much anything else? Things that, again, I'm not ingesting or putting on or near my body.

Okay.

You know?

Okay. That's a rule of thumb. Don't. Okay.

Things that I'm not gonna use forever. Things that I don't expect to last a long time. I'm fine to get the cheaper.

What's your. This is a tell all. This is a wild card.

Air filters.

Yeah. Sorry, Dave. I went for it. Telling our producer. So tell me a wild card.

Not Dave Ramsey. He's not in the booth.

Yeah, not Dave Ramsey the other day. So, yeah, James is out today, so people want to know, what's the line item on your budget? That is. People would be shocked to know that.

So I just did a YouTube video that will release soon for my channel on how I manage my money. Yeah, it was legit. Like, here's the camel family expenses. And as I was laying it out, I was like, what would be. What would people be shocked by? The dogs really stood out to me if they knew, like, how much we spend on the high quality dog food that's, like, hypoallergenic. That doggy daycare twice a week, the dog grooming, the mobile groomer that we get once a month.

Okay. Wow.

They would be like, you spend more on your dogs than your daughter. You know what I mean? So that one, I think, is the most shocking to me in our own budget. Okay. Our daughter would be next. Cause she's got the high end european goat formula.

Oh, wow.

So, yeah, she goes all out, but Whitney's pretty crunchy. She's pretty granola when it comes to that stuff. So she's looking at ingredients, and she's pretty uppity. Okay, George, thanks for revealing shoes in the Warshaw family.

Yeah.

Shoe budget is strong.

What has gone awry recently is since I'm training for this race, I bought a lot of sneakers, and I don't usually do that. And so that's. I think that would be the shocker of what's going on there.

Wow.

I don't want to tell more about it because you will judge me.

Shoes and dogs strongly. It's what we value. Here's the thing. If it's in the budget, you're paying cash and it's what you value, and you're not trying to impress anyone. Couldn't give a rip about your opinion.

So what I spend the teaching here is lifestyle creep. And I think there's a part that if you're doing better than you were, you do want to enjoy the fruit of your labor, but you have to filter it through. Are you doing what makes you a financially responsible adult? So, in this case, if we're talking about the baby steps, you're out of baby step two. You're out of baby step three. You are currently doing baby step four. And as long as you're doing, you've done all that and you're investing your 15% when it makes sense, you're putting a little something away for your kids college. You're putting something away towards paying off the mortgage. Then I do think that there's an area of, like, yeah, all right, I can up that category a little bit. Or if you're looking to buy a house or change houses, you can say, okay, we can afford to do this a little bit more.

Yes. So the problem is, people go, well, I can afford this next payment, so therefore I'm going to pick up another 50 grand in debt because I can afford the $800 payment. That's how most people think, and that's how lifestyle creep really takes over.

It does take over. You have to be careful. A good friend one time told me, he's like, you know, you in general, you should aim to keep your expenses low. Like, truly as low as you can, just because you never know. Like, you never know.

I think as you get older, it becomes easier to just let go and stop caring what other people think that's truly the life hack. That's a superpower to stop caring what other people think, because you don't realize how much that actually affects the way you spend.

That's true. I heard Rachel Cruz. This was a long time ago. I saw her do. This was before I worked here. I saw her do a post on social media, and it was about the motivation behind what you buy. And basically the question she asked is, if you purchase something and no one would ever see it, if it was just you bought it, would you still buy it knowing that no one would ever see it? And it really speaks to the motivation of, why did I get that? Like, did you buy that specific purse because you were thinking, I want the reaction of these specific people, or did you just buy it because you like it?

That's true. Yeah. I think the healthier you are, the more self respect you have, the more discipline, the less you just need more stuff. I just haven't seen someone with a lot of stuff that I've been envious of. It just seems like an exhausting life.

Look, the stuff.

Maybe I'm just an old man. I'm like an. I'm a boomer. I'm the youngest living boomer, Jade.

You're not wrong, George. The stuff I wanted when I was in debt because it was like, I gotta have this, but I can't have it. It's almost like, you know, you can't have it, so you want it, but then when you're debt free, you're like, why did I care about that?

Well, hey, that was fun pontificating with you. To end this hour. If you're listening to the show on YouTube or podcast, it is about to end. But good news. We are continuing in the Ramsey network app. So go finish the show there, download it in the app store, Google Play Ramsey network app. Search for it. We got some good calls coming up in this next hour. You don't want to miss it. You can also click the link in the show notes, and we'll link you over there to go download it as well. Until next time, this has been the Ramsey show.

Hey, you're still here. What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the episode is search Ramsey network in the app store, Google Play Store. Or just click the link in the show notes to download the app for free. Yep, you heard me right. For free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. Alright, I'm getting out of here. Enjoy. We'll see you on the app.