Transcript of Stop Living Paycheck to Paycheck—Start Living With Options New

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Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm John Delony, joined by Jade Warshaw, and we are taking your calls live. 888-825-5225.

5.

Let's go out to Pittsburgh, Pennsylvania and talk to Lauren. Hey Lauren, what's up?

Hi, thank you so much for taking my call.

Of course, thanks for calling in. What's going on?

So I'm looking for some help prioritizing a few big financial moves all at the same time. Um, just to kind of condense it, my husband and I have about $35,000 in credit card debt, a mortgage with about $193,000 remaining on our townhouse, and I have about $28,000 in single stocks and a baby due in October.

Congratulations.

Um, thank you. So we've outgrown our current townhouse and hoping to sell, um, and buy something potentially next spring. But I just started listening to the podcast and I know the Baby Steps say to stop investing and pay off debt before saving for a house. But in our case, the timeline kind of overlaps because of the baby. So my question is, would you recommend we sell the stocks and then use all of it to pay off the debt? First, even if that delays our ability to move, or do we split that money between paying down the debt and keeping cash for the home transition so we can still move on the timeline of like next spring?

Well, I wouldn't change it because I don't think that anything's actually on fire here. I think you're just really excited, which is not a— it's not a bad thing. Do you know what I'm saying?

Is this your first kid?

Yes.

Okay.

Yeah, it's our third one, but—

oh, third one. It's your third one.

So it's getting cramped. That's where you're feeling it. It's getting cramped in the townhouse. Yeah. 3 under 3. Oh boy. Okay, so I can understand that. I empathize with you. I don't have 3. I have 2. And that was wild enough for my life. So I love the idea that, that, you know, hey, yeah, we got to sell off the stocks. I love that. That's going to clear out the majority of your debt. And probably between now and when the baby comes, you'll be able to save up the rest of the money to clear out that debt. Which, by the way, tell me again, when's the baby due?

October 9th. So early October.

Okay, so October. So what I'd be doing is I'd be spending from now until October saving up as much cash as I possibly can. You and your husband. That way, when the baby comes, we cash out the stocks. We have hopefully another $6,000 or $7,000. We can pay off the credit card here, and then everything's all good. And we can start building up towards having our 3 to 6 months and everything like that. And to answer your question, you do need to save 3 to 6 months before you buy that house.

Yeah. So, so why? Okay, so you, you've been on this road before. I remember all of the panic and, well, most of it was in my chest, but like in my home when we were bringing home our first kid. And I remember just looking at this tiny little lump of a human that couldn't move and was swaddled and was laying there and was just so loud. What is it about 6 months after October that you couldn't manage with just bringing home another 10-pound glob, right? You get what I'm saying? I know I said that very not nice, but we know we—

it's a, it's a 2-bedroom townhouse, so with 2 kids already, a boy and a girl, this is another girl. I mean, they could share rooms, we could make it work, but it's, it's just getting a little tight. Yeah, for sure.

I get that. I get that.

And here's the thing, it is going to be tight. I, and John and I aren't going to sit here and tell you that it's not going to be uncomfortable, but my question to you would be how quickly can we get out of the, the discomfort and do it in a, in a way that's really financially responsible. So what's you guys' income?

Um, right now it's, I'm the primary breadwinner since my husband just started a business. So I'm $110,000 a year.

Now what's gonna happen when the baby comes? Have you talked about that yet? Do you have, you've got maternity leave or what?

Yep. I'm a teacher, so there's no maternity leave, but I will have 8 weeks for my C-section. I'll be right back in there.

Ooh, that's cutting it close on a C-section. That's cutting it close. I'm just saying, I'll never sing that song again. But, um, this, this, this backs up what I'm saying even more because the truth is I've had two. And the truth is you don't know, you don't know how you're gonna feel. That's the truth.

Right.

And, um, that backs up what Jon and I are saying even more to say, okay, let's cool out. Let's, let's stack up money because if you need to take a couple extra weeks, if you're not feeling quite right, if standing on your feet for however many plus hours a day as a teacher, I mean, I'm just saying, please wait because that's gonna give you the freedom of if you wanna take a little bit more time, you can. So yeah, I would do that. Let's go back to what we talked about before, which is how long can it take us to stack up the 3 to 6 months so that we can then start purchasing the, the new house. With $110,000, what do you see your husband's income doing between now and then?

It, it kind of fluctuates right now. Um, like I said, he just started a business, so we're hoping— he got it up and running in November, so we're hoping that that starts turning a profit. Um, but it's a used car dealership, so it's just like inventory and things like that. Um, Okay, hopefully that will change.

What's his business plan say? Like, what's his business plan say? What should he be making by, I don't know, say January?

Yeah, he's, he's hoping to have, um, about $6,000 to $10,000 a month.

Okay, how realistic is this hope? Because I, I hope I get a million dollars on the way home, but yeah, but probably not, right? How realistic is this?

He's getting He's getting close for, for starting in November. He's getting close to breaking even now. Um, so as long as inventory can stay consistent, then it is very reasonable. He's making about $3,000 to $4,000 right now a month.

So, well, and there's nothing going on globally that could possibly interrupt anything, so that's cool.

Of course.

Geez Louise, man, you guys have a lot of variables here, and, and there's a lot of— and I'm not saying this because I don't want you to worry, I just want you to be smart. When I look at these variables, I don't think, oh, there's a lot to worry about. I just go, we need to be thoughtful in how we move forward. When you sell the townhouse, how much equity will you have to put towards the future home?

Probably about $70,000.

And will you need more than that to, to put the correct down payment on said future home?

Probably a little. I mean, for like a $400,000 house, you know, we're thinking of like 3, 4 bedrooms. Um, you know, I realistically like 20%, right? About $80 grand. Um, so we could save that up, I would think. But, you know, $70K, but that's contingent upon selling our townhouse, of course, right now.

So, okay. Now I do want to challenge you on this, just, just to— the 20% rule isn't what it once was. You know, yeah, you do 20%, you can avoid PMI, but it doesn't necessarily move that payment down to 25% of your take-home pay. So make sure you jump on to a mortgage calculator at Ramsey Solutions and just run out those numbers, because at this point you're putting down usually more than 20% in order to avoid PMI and to get that payment where you want. Because the rule of thumb is, and this is for anybody listening, you want no more than 25% of your take-home pay tied up in your mortgage. And your mortgage includes everything: taxes, insurance, HOA fees, right? And so just, just lock that in, Lauren. You just got to take, take your time. Please wait until the baby's born. Save up a bunch of money. Once the baby's born, you pay off the debt. Once you pay off the debt, you stack up 3 to 6 months of expenses. And then and only then can you sell the house knowing that you also have money on top of that $70,000 to follow the 25% rule.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're gonna die or something?

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

That's a gut punch.

And oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them.

Me too.

They don't know what to do next.

Me too. I mean, you're gonna have a crisis here, and you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's eat tomorrow. That's exactly the two options. And take care of your dadgum family.

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82.

All right, let's go out to Kansas City, Missouri and talk to Melissa. Hey Melissa, what's going on?

Hi, how are you all?

Doing great, how are you?

I am doing good.

What's going on?

Sorry, I'm a little nervous, so bear with me.

Oh, you're good.

Um, okay. So my husband and I have been married for almost 20 years and we recently combined finances.

What, what led to that? What led to that combination?

Um, you know, we just never combined them. We got married very young. We just never combined them. And after we had my son about 11 years ago, I started asking, hey, can we combine them? Because It was just a struggle to see who was paying for what. And about 18 months ago, after he got out of the military and we settled in a house, he said he agreed. And it's just— it hasn't been what I thought it would be, and it's very frustrating. I've created budgets. But he won't stick to a budget. He won't help me create a budget. And I just feel like his spending is out of control and it stresses me out so much.

So, so the problem isn't your combined income. The problem is you have a husband that won't do life with you.

Yeah, right.

Like the, the flashing alarm signal is the overdrawn accounts. The real issue here is you've sat down with your husband and said, hey, can we do life together after being married for two decades? And he has said through his actions, no thank you, I'm gonna keep doing what I want to do.

Yeah.

And so what's, what's this, what's the state of y'all's household finances?

I recently got a huge promotion. I doubled my pay almost. Um, so I am I am now earning more than he is.

How much?

Talk about his VA benefits. I'm earning over $90,000. In our household income, we make about $12,000 net in our account. And it just, every time I try to put some money away, I just feel like it flies out somewhere. And he gets new hobbies all the time. He has a dirt bike and a four-wheeler. I just don't know what to do to make him understand that I'm just— I want the best for our family, so I don't want to be strapped down with debt.

The only, the only conversation I've seen be effective is the conversation beneath the money issues. And so if you, if you have harassed him for— and I'm being provocative on purpose, okay— if you've harassed him for 11 years We need to combine money. We need to combine money. We need to combine money. And he gets home from deployment, he gets out of the military and says, fine. Um, that was never the issue. The issue is you saying, I don't feel safe when we owe people money. I'm scared about our financial future. Will you help me feel less, um, unsafe? Right? Because that's really what's happening underneath all of this. And every time a, a four-wheeler shows up at the house, um, your body goes, uh-oh, what about college? What about our bills? What about, what about, what about, right? If you haven't had that conversation, that's the only one I've seen be successful.

I, I feel like I have had that conversation. I've tried to put it on like this This is what scares me. This is what I worry about. I just—

What does he say back?

He will say, okay, well, we'll sit down sometime and we'll go over it. And then when I get to that, hey, why don't we do it now? Or, okay, can we schedule a time? There's always something and it just continues to be pushed back. We set a deadline. We were going to start in July of last year and nothing happened. And then I asked him again at the New Year's, like, I really would love us to put a budget together because he didn't like the budget I put together myself. And he just— he doesn't— he thinks because we can make the minimum payment and we can still, you know, go out to eat, and he thinks that is fine. And I'm just like, if we can buckle down for a little bit and get out of debt, we could live so much better. We could give more opportunities to our son. And it just Yeah, I just can't get that from him.

I'm gonna give you a framework, okay? This is like a last-ditch framework. All right, you ready for this? I want you to tell him that you need to have a big conversation with him. You know, he might roll his eyes, he might be like, oh, here we go again. And but I want you to hold firm, okay? And when you have this conversation, I want you to tell him this in this order. The story I'm choosing to make up is, or the story I'm making up is, you don't care that I can't breathe in our house. The story I'm making up is you don't care about our financial future and that we're not safe. The story I'm making up is debt doesn't bother you at all, and it does bother me, and you don't care. And based on those stories that I'm making up, I feel scared, I feel alone in this marriage, whatever your feelings are. And then give him an opportunity to respond. And if you, if you sit down and say, you're not doing this and you're not doing that, then, and you lead with you words, he's going to wall up and defend himself.

We all do that. But if you say, hey, I'm making up stuff about you, am I right? Then that's an invitation. And if he walks away from that table, then you're going to have to, I mean, and Jayden, correct me if I'm wrong here, you're going to have to begin taking ownership of your future, right? Because he hasn't seemed to have interest in that.

Yeah, right.

That, that to me is the last-ditch framework that I— that's how I teach people to handle conflict in their marriage. Just own the story I made up, own the feelings you have about it, and own what you're going to do next. And if it makes sense, give them an opportunity to respond.

Okay, I want to play devil's advocate on this for a minute, because when he was deployed, what type of work does he— what type of work did he do in the military?

You know, he actually never deployed. He only had some TDYs, but luckily we never had to go through a deployment. He was in for 17 years and got out 2.5 years, 3 years ago.

And what type of work did he do?

He worked on the jets, on different jets.

I can tell you what I'm thinking, and I think that this is all in the context also of what John is saying. Counseling, whatever that looks like for you guys, because I do think that you need counseling with a third party. There's part of this where, as you're waiting for him to man up, because I think he needs to, and I don't think you just need to sit there completely, I can't move, I can't do anything because I'm waiting on this guy to get his life together.

No, she's got to take action.

You've got to take action. And I remember talking with a friend of mine who was dealing with Not exactly the same, but similar. And what she would do is she found out the things that were most important to her husband, and she was like, I'm gonna make sure that that's on the bu— I'm gonna go ahead and create the budget. I'm gonna offer for him to see it. If he's not gonna look at it, that's his choice. But at least I've made it and I've said, here it is. I would love for you to look at this by X amount of dates because I'm gonna move forward with what's on here. And what she would do is she would, uh, budget for the things that she knew he cared about. So maybe he loves going to the movies, so she'd put a little bit on there for him to go to the movies. That way it's not anything that's gonna make him walk in and be like, what are you doing? Da da da da da. So that's what she did. And she would say, hey, there's this amount of money left in margin. I'm gonna use that to pay off debt.

And then when the time came, she'd pay off the debt and then she'd come back to him and say, hey, just like I said, I used that money and I paid off a $500 medical bill. So she did her part. She did the budget. She showed it to him. She made payments. She let him know that the things that she was paying off. And then over time, he started to see, wow, this, this is really working. Now, caveat, they're not— he's not on board yet. They're— she's going forward. She's going forward at a much slower pace because you go further faster together, right? We all know that. But I don't want you to sit there on your hands simply because this guy is not manning up.

Yeah, it's— that's a great way to say become the person you want to be in your marriage.

Yes. Start doing it.

Right. And if that, if that ultimately means he's burning through savings and every, then yes, you may have to re-separate your money, but do it with a, not a smile on your face, but don't do it out of anger. Do it out of, okay, cool. I've gotta take care of our son.

Yes.

I have to take care of our house. I've got debts in my name. And pull your credit report to make sure he hasn't put you on these jet skis and on these four-wheelers and all that kind of mess.

And, Lead by example.

That's exactly right. Be who you want to be in your marriage.

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Well, the cost of living, among other things.

You're exactly right, it's higher and higher and higher. How can we help, brother?

Yes, yeah, so I just kind of got a question, looking for an outside opinion. Um, I'm trying to, uh, figure out a good way that's not going to cause any strife Excuse me. As well, any major strife to get my girlfriend on board with the baby steps and create a solid plan going forward.

I think you should give her a budget, a budget that you've already done, and lecture her and use a bunch of spreadsheets.

I think that's terrible advice.

Yeah, don't do that.

What is it? Does she have a bunch of debt and you're trying to convince her to pay her debt off? What's the catalyst for this that you feel like you want to meddle in her finances? So you see what I'm doing here, John?

Yeah.

Why are you getting in her business, dude?

It's a reasonably good answer. So for Christmas, my mother sent her one of the, one of your budget evaluation books, and she was really good about it. She religiously went right through it and did all the math and tried to figure out what what she could do differently. And the conclusion that she came to is that her life expenses are too high, but she has no idea. Even listening to the show, looking through the Baby Steps, talking about it, she doesn't have a clear picture of how to get out of it. And there's a good reason. She's a single mother with a 5-year-old.

And, uh, do you know how much debt she has?

Um, a lot less than it was. She has about $4,000 in debt right now.

It sounds like she's crushing.

Yeah, why isn't she calling in? I'm still trying to get back to you. Like, what's it to you? Are you thinking about proposing? Are you— like, tell me where you're caught up, hung up in this.

Um, so I am, um, 26. I have, I have like $2,000 in debt right now, excluding my mortgage. My house She's almost paid off. Um, and the only reason that she's so far ahead was because she totaled her car a little while ago and the gap insurance paid off her car, which she was upside down in. So she got a lucky windfall, which is good. Um, but since then she hasn't made any forward progress at all.

Um, has she asked for your help, brother?

She has.

Okay. Also, uh, How did she ask for it?

Um, well, first she was in tears not knowing what to do, and I was doing my best to, you know, be patient and wait for her to be in a position to be receptive. And then I explained to her what I did and how it worked for me and why. Um, but each time we talk about it, she always comes back to, but you make so much more money than I do.

What do you make?

This is so much easier for you. Um, I make about $120,000 $20,000 a year.

And what does she make? Do you know?

About, about $25,000.

Okay, yeah, that's gonna be a problem. Um, what kind of work does she do?

She's a delivery driver for a car dealership, delivering parts and all that stuff.

I can tell you what I think, and I don't know if you're gonna like it, but this is something that is, uh, this is a litmus test in my mind. If I were in your shoes, because I'm just telling you in my shoes, it's bothering me that she didn't call in. Because if I want to see if somebody's a go-getter. And if I want to see if somebody is like about what they say they want to do, I want to see you making real efforts towards that. So I would hope that she would call in and say, here's where I'm at, here's what I need help with, here's what I'm trying to pay off. That would be my first— if I were you, I'd— that would be my question to her, which is, I listen to this show, we're both on this thing, why don't you just call in and ask? Or why don't you use Ask Ramsey and get the solution to the problem? That'd be thing one. The next thing that I'd be checking for is I'd want to make sure that she's not an asshole. And what I mean by that, I talk about this in the book.

When you're an asshole, you're a person who asks questions over and over. You just ask and ask and ask and ask, but you never make any movement. James Clear talks about that in Atomic Habits. You just get and get and get information, but you never actually, you know, put it in.

Do anything.

You don't do anything.

Another podcast, another cup of coffee.

I'm worried that that's what she's doing because you've said, oh, I've talked to her, I've told her what to do, she's just not doing it. So that's something that you can either take that information and go, this is a quality, and I don't know how I feel about that quality in her.

Yeah, that's kind of the zone that I've been in, um, off and on for a little while.

Yeah.

How long have y'all been together?

Uh, about 2 and a half years.

Are you gonna marry this person?

Um, I'm never— that's a hard question for me to answer because after 2 and a half years, about the state being involved in my relationship, that's the only reason.

Oh well, I just finished a 2-year study, like a down the rabbit hole study on marriage, and, uh the data on formal legalized marriage versus cohabitation, it still wins out in a pretty significantly statistical way, a statistically significant way. It still does. But all I have to say is you do you, boo. Um, I, I, I, I, I'm fond of saying behavior is a language, and what her actions are telling me is she's not interested in your advice. She's not interested in what you're bringing to the table when it comes to this stuff. And she's not interested in— she read the book, she listens to the show. She's not interested in going guns a-blazin' to get this stuff knocked out. And she has a very difficult living circumstance, no question about it. She doesn't make hardly any money. She's a single mom. Like all— she's got all the variables against her. But again, this, like The greatest thing I get to do in this, in this job is listening to story after story after story of people in all sorts of situations rise up. And, and so it, but for you, it's, you can't convince her, you're living it.

You've told her, she's asked and you've told her, your mom has given her the book. Like at some point you have to open your hands up and let this conversation go and continue to live financially the way you wanna live.

Can I ask you this? Uh, her 5-year-old, is he in kindergarten yet?

Uh, she—

and yes, she's in kindergarten. And, and that— I'm guessing this was the first year of kindergarten. I also— I'm just gonna give her— I'm gonna throw her a life raft here and say it's possible that maybe before the, the girl was in kindergarten, mom was used to working part-time and kind of juggling both things. So she probably wasn't making it, you know, really making what she could income-wise. And this is the first year that there's more freedom, probably of schedule. And I'm wondering if, and you can ask her about this, hey, now that, you know, baby girl is in kindergarten all day, maybe now's a great time to start looking at full-time jobs that you can work, you know, drop her at early care in the morning, work a full day, come back and pick, you know, little girl up from school. But we, now's a good time that you maybe could get your income up because you know as well as I do, this is, there's two parts to the equation, expenses down or income up. I think for you, it's it's income up season, and you can drop that there and see what she does with it.

But I agree with John that behavior is a language.

So I completely agree, um, except she had a huge, huge advantage as that, um, her daughter's father, his mother— so, um, her daughter's grandmother on her father's side owns a daycare.

Oh, okay.

Part of their separation agreement was that he would pay for child care.

Well, then there you go.

That was— so that was never an issue. She would drop her off before work and then go work. She's working 38 to 45 hours a week and bringing home less than $500, which today with regular living expenses, you can't do it.

It's impossible.

Yeah.

Um, but again, I hate to say it this way, she has told you through her actions this is not a problem that she wants your solutions for. For, and that can make you feel powerless and alone. I get it. This show is sponsored by BetterHelp. Financial stress does not just damage our bank accounts, it can also take a toll on our mental and emotional health and our relationships. Money worries cause anxiety, and they are one of the leading sources of conflict for all types of couples. I know this. My wife and I have struggled with money conflicts for years. Listen, therapy can help even with money conversations. Therapy is not about financial advice, but it can help you build healthier ways of coping, give you strategies to communicate about money, and give you a plan moving forward. I want you to consider talking to my friends at BetterHelp. BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals preferences. BetterHelp therapists work according to a strict code of conduct, and they are fully licensed in the United States. You can message your therapist and schedule sessions right in the platform, and if the first therapist isn't a great fit, you can switch at any time for no additional cost.

When life feels overwhelming, therapy can help. Visit betterhelp.com/ramsey to get 10% off your first month. That's betterhelp.com/ramsey. All right, let's go out to Kansas City, Kansas, and talk to Grace. Hey Grace, what's going on?

Hi, thanks for having me.

You bet, thanks for calling.

What's up? Yeah, um, basically me and my husband, we, um, someone got in our bank account and we lost $8,000. And so we just have a few questions of, should we continue trying to pay off our house in 10 years? But we also need to buy a new car soon because his car's about to die. A baby's due in July and other appliances in the house are about to die and we need a new roof.

Our pets' heads are falling off.

It's just kind of like a lot.

Everything's happening. All right. So let's, let's back that thing up a little bit. Okay. So what happened in your bank account?

Someone got into it and took $8,000. So hopefully we'll maybe get it back, but we highly doubt that we'll get any back.

Why? Why is your bank not covering it as fraud?

Um, I'm not really sure. They're disputing it, but we're just— we don't know. So we won't have anything for 30 days.

But how did somebody get in?

Made a mistake and might have given, um, someone who he thought was the bank his account out. That was the—

but I mean, so it was a scam.

But I mean, it— if that happened, they should be— they'll be on camera coming into the bank, or there'll be a record of the transaction. Like, everything is—

yeah, we have the records and police reports and all of that. We're just— are— we're counting it as a loss, and maybe we'll get stuff back and maybe we won't, but we want to set a before.

Okay, I wouldn't, I wouldn't count it as a loss yet. Money just doesn't disappear out of your account.

Yeah, you know what I mean?

Yeah, untraceably, right? And the bank has all kinds of fraud protection and ATM card protection. Like, there's a lot of things here, right? So I wouldn't just count it as a wash yet. Um, you, you named a one thing that's for sure happening— you're having a dead soon.

Yeah.

And then you named a bunch of other potential future things that may or may not come to pass in 2 months or in 5 years. And so I want to clear the deck of what you can control right now versus the feeling that it's all coming down because something in the future may happen. You get what I'm saying?

Yes.

Is this your first baby?

No, it's my second.

Second?

Okay, 15 months apart.

Okay, so you got a lot going on in your house, huh?

Yeah.

Okay. All right, what's your financial situation?

Um, it's actually pretty good. We have about $55,000 in savings.

Okay.

Um, we only have a mortgage debt. Um, I'm a stay-at-home mom. Um, and that's about it.

What does your husband make?

Um, maybe around $50,000 a year. He's active duty military, so pretty consistent.

How'd you get $50,000 in cash savings?

Um, I have always been a saver, and so when we both got married, we kind of just conjoined everything, and that's what it was. So, and we didn't go to college, so we didn't have any debt, and we were smart not to have credit card debt.

Genius.

That's fantastic.

Amazing.

Yeah, incredible. So you're actually in pretty amazing shape right now.

Okay.

If, if he feels the need to go get a $78,000 truck or get a $50,000 Jeep and then jack it up and like— that would be really unwise. Yeah, you have $50,000 of cushion.

You want to pay in cash?

Yeah, yeah, it's great. But I mean, but you, you could, you you could cash flow your out-of-pocket for this baby and fix your appliances and get a $10,000 or $15,000 car that would be used and great and still have a fully funded emergency fund.

So is that like the main thing? We just want to have at least 6 months in our savings?

Yeah, I mean, with you being a stay-at-home mom, I want 6 months.

Yeah.

Mm-hmm.

Tell us about the new roof.

Um, it's just old and it's like we've had people look at it and we probably need to redo it in about a year.

Is it leaking or less?

Not yet.

Okay. How much does it cost in your area?

I know. Um, I have no idea. My husband knows all that. Okay.

So I don't think that's anything that's on fire at this moment. I think the thing's on fire. Are the baby.

Yeah.

Is, is there anything else that's like must happen now?

Well, we had a plan of paying our house off in 10 years, so we use all our tax returns, uh-huh, to like put to our mortgage. Yeah. And I just wasn't sure if we should just put that into our savings for that $8,000 that we lost.

What's the balance on the mortgage?

Um, $159,700. 16, sorry.

Okay, so I'm gonna try to order this in order of importance for you, and I'm gonna order it in importance in a way of like, here's something you can be thinking about this year, and here's something you can be thinking about and don't think about until next year, right? Until a year from now. So I just want to make sure I have everything on the list. You've got the baby coming in July, you have a new roof situation Uh, did I hear there's a new car needed? And why is that? I just want to make sure that it's actually a necessity.

Yeah, so my husband bought like a trash truck, Facebook Market find, and it just keeps breaking down and he keeps working on it, but it's gonna need rewiring soon and that's like too big of a job for him to do and then it costs way too much to have a mechanic do. How And so, um, not what it's worth for the car. The car is probably worth $2,000 and it was over that.

Okay, okay. And then we've got the baby. Okay, so I'm with John. I think the number one thing on the list is we're going to not do much until this baby comes. The only thing I would do until this baby comes is I would take $10,000 of the $55,000 and I would get a car in cash. I would do that because this $2,000 car, you don't need to put any more money into that. After that, once the baby comes and you've got $45,000 saved, you can start thinking about, "Okay, what would it look like?" You know, everybody's home, medical bills paid, everything's good. What would it look like to fix our roof? And I'd start charting that out and I'd start getting different offers and estimates of what that would cost. And then once you have the number, since we don't know the numbers today, what could it be? $20,000? Maybe it's $15,000. Then we can start saving for that. And we can look at our emergency fund and say, "Is there enough money there to do that?" If there is, we can use that. If there's not enough money, how much more do we need to save in order to make that happen?

But your emergency fund is there. That's exactly what it's there for. So, that's there. And then after that, And then after that, you can start thinking about, okay, with the extra money in our budget, can we put regularly extra payments, extra half payments, extra quarter payments on our mortgage? And that's that.

Because you're also assuming he's only going to be making $50,000 bucks 2 years, 3 years, 5 years from now.

Which, yeah, he should still be getting raises every year.

Exactly. Now, can I ask you a personal question?

Yeah.

Have you been involved in the conversations with the bank over the missing $8,000?

Uh, sort of. My husband knows more of it because he's been taking care of it, and it's like I got so stressed out I was throwing up too much and ended up in the ER, and so I just kind of like left it.

Okay, I, I don't want to put anything out into the world that doesn't need to be there, but it's not passing my smell test. Yeah, that $8,000 just suddenly went away. In, in my world, that is somebody gambled it away. That is somebody bought something.

No, no, no. So I was involved with like the police reports and like I— they got into our bank account transferring money out with— they actually got his whole card too. So they like took his card. So we have it all on videotape.

Okay. And so, so there should be fraud protection on the card and that should be—

I'm hoping so. We just haven't heard anything.

And so we're like, I would scratch and claw and fight like hell. You're a pregnant mom. With a toddler, you got one coming. I would, man, I would make this my full-time job to be the biggest $8,000 thorn in the side of that bank until they, they made things right with you.

I thought I heard you say he gave the account information to somebody he thought was the bank. I thought that's what I heard.

Or he took the— somebody got his card and got the information.

Okay.

But, um, yeah, if he, if he's handing out his banking information That money's gone.

Well, yeah, because then my question was, well, what was he giving his banking information to for $8,000?

That's right. Or if it would— did he give it $50 and then they took $8,000?

Yeah, there's a lot of questions.

Um, but I would scratch and claw and fight for that money back, and hopefully the bank will do the right thing and take care of you guys.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm John Delony, joined by Jade Warshall, taking your calls. On money, work, and your life. Let's go to Detroit, Rock City, and talk to Tammy. What up, Tammy? How we doing?

Hi, good. How are you guys doing?

Outstanding. What's going on?

Good. I have a question. So my husband and I started the Ramsey Baby Steps, um, about 3 years ago, but about 5 years before that, we had already gotten into our home, so we had already signed for a 30-year mortgage. So we've completed the Baby Steps. We have no debt except for our— the rest of what we have to pay off our mortgage, which is $160,000. No other debt. We have our emergency fund saved up. Just trying to figure out how to prioritize paying that off. So we both work, but I'm considering cutting down my hours to almost nothing to possibly homeschool our children in the fall. So that would take our income down by anywhere from like $3,000 to $4,000 a month, which would then— so before we were, when we were through the Baby Steps, like 1, 2, 3, we then were doubling our mortgage to kind of mimic a 15-year mortgage because we had already signed the 30-year. But now I don't feel like we're gonna be able to do that with my cut in income. So I don't know how we prioritize when we have extra margin. Do we prioritize our investing 15% or paying extra on the mortgage?

Or we've even contemplated completely picking up and moving. And, and like, we could probably sell our home for about $600,000 to $630,000. Um, and we don't— we've kind of realized that we don't really need as much land as we have, so we could probably get in something comfortable with like a net zero of no mortgage.

Wow.

With less land.

Well, I think there's two problems.

Decision.

Yeah, I think there might be two problems you're solving for, and I'm not sure that one of them is even a problem. So So first off, yeah, if you tell me that you were paying your 30-year mortgage like a 15, and then you tell me, and by the way, I'm not going to be working anymore and it's going to cut our income in half, and now we're going to be at how much per month when you do this? $4,000 a month?

Well, no, so I bring home probably $3,000 to $4,000, but my husband brings home about $8,000 to $10,000.

Okay, so you'll be just to $8,000 to $10,000 a month.

Yeah.

And my— yeah, I would not expect, uh, the margin to be the same 'cause you're no longer bringing in an income.

Right.

That being said, what you can look at it and say, okay, with the $8,000 to $10,000 a month, how much margin do we have to continue to do Baby Step 4, which is investing 15% of your gross income into retirement? After doing that, after putting aside a little bit for kids' college, how much do we have to put on the mortgage? And it's okay if it's a little bit less than it was before. It's okay if it's significantly less than it was before. You're gonna keep chunking away at this and that mortgage is going to go away.

Yeah, it's just disappointing when we went from possibly paying off in 5 to 7 years to now looking to go to like, now we can't pay it off for like 22 years.

Yeah, I don't—

you know what I mean?

I don't think it's gonna be 22 years. Have you put it in a calculator?

Well, I mean, like, if we got our 30-year mortgage 8 years ago, but you've been paying on it like it was a 15.

Yeah, you've paid it way down.

You need to— you need to put it in as it is now and see how long it would you can take with whatever margin you have. And then if you look at that number and go, we're not satisfied with that, then you have to ask yourself, okay, what's the solution? Maybe while I homeschool, I do a little bit of part-time work. Maybe that's the solution. But I think you guys can solution for that. Let's talk about, John, the second problem that may not be a problem, which is we have a lot of land, maybe too much land. Maybe we should move. I want to know if you really want to move or if you're just thinking about that because you feel like you have a problem in your current house?

I mean, I don't feel like we have a problem in our current house.

We just—

right now we have about 8 acres, and we could be comfortable with like 3 or less, and that could move us to a comfortable home and eliminate the whole mortgage issue. Like, we like our home, but then we're also thinking to be mortgage-free and have the extra margin to be able to do extra things I love that on the mortgage.

How many kids do you have?

We have 2.

5 and 8.

5 and 8. Okay, um, can I throw another idea out here?

Sure.

I want to, I want to flip your whole situation around, okay? You and your husband have worked your butts off for a long time to get into the exact situation you're in right now.

Mm-hmm.

Y'all have a more than half a million dollar house and you have $160 grand left on it. You don't owe anybody anything. You are deciding, I might just wanna stop working full-time and I want to invest fully into my kids.

Right.

Y'all hope y'all are winning all across the board. I, I off the top of my head, I forgot the psychological construct here, But here's the basic nature of it. If Dave Ramsey called me, texted me and said, hey, I'm gonna give you a huge raise, come by my office. And I went by his office. And for him to say the words huge raise, I immediately thought he's gonna give me $100,000. And he gave me $25,000. He said, John, you've been doing great work. Here's 25 grand, my gift to you. I would feel like he took 75 grand from me. Me because I made up a story in my head and my body started solving for that story. I would've spent $100 grand by the time I went up to his office on the 6th floor of this building.

Right?

And so here's what I want you to be careful of. You're grieving a reality that was never a reality. It was a story. We're gonna pay this house off in 5 years. It's not a tragedy that you and your husband chose a different value, which is is homeschooling over another value, which is we don't want to owe anybody any money. You just put one in front of the other for right now. That's a choice y'all made, and it's disappointing. We're going to grieve the fact that, man, we thought we're gonna have this thing knocked out in 5 years. Cool, we're not. We're gonna spend extra time with our, with our kids, and we're gonna get this thing done in 10 years, right? And so I, I don't want you to hang on to the story because it's, it's, it's casting a shadow over a pretty amazing situation that you and your husband have worked like crazy to set yourselves up in, right? Y'all are winning. Okay, you get what I'm saying? And not the Charlie Sheen way, but like, y'all are for real winning, right?

Yeah, I guess like you said, I, I've gone through a grieving process of losing that. Yeah, that thought and that concept.

And let me, let me put one more thing on the table, and I've said this a million times on the show, I'll just keep saying it. Whenever me or my wife or both of us feel hemmed in by an either-or decision I have to stop working and homeschool the kids, or I gotta keep working and hate every day. Here's what I want y'all to do. I want you to throw on the table 5 or 10 random other ideas. Sell the house. Um, work quarter time instead of part-time. Have the kids stay in public schools for 1 more year or 2 more years, and then let's hyperdrive this thing and get it paid off in insane fashion. And then we're done forever. Like, I want y'all to do this exercise cuz it will remind you that y'all are free. Y'all are in the driver's seat and you're not in an either or like dire situation. We gotta turn right or we gotta turn left and one of these is gonna be the worst decision ever. It's just not the case.

Mm-hmm.

One of 'em's not gonna be, you can't have it all at the same time, but man, y'all are, y'all are in a pretty good spot. You get what I'm saying?

Okay.

Yeah. Yep.

So congratulations there. Jade, any final words?

No, I thought that was really, really a good way to frame it up.

Cool. I'm proud of you guys. This is what— this is what— I hate to say it like this, but this is what freedom looks like. You get to make choices, and, um, but you still have to own the choices that you make.

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That's chministries.org/budget and use promo code RAMSEY. Cincinnati, Ohio. Let's talk to Sean. Hey Sean, what's up, man?

Hey, thanks for taking my call. Um, I had an interesting question for you guys. It's basically that we're in the middle of Baby Step 2 And for personal reasons, for religious reasons, we have to send our children to private school. And so we have 2 kids and we send them both to private school. It costs about $1,600 a month for that. And we were just kind of trying to figure out the best way to approach Baby Step 2, like just because every year we're going to have to pay that. So we didn't know, should we pay off all of our debts except that one and then, you know, try to stay ahead of it for the next year by paying it all at once? Is that monthly payment okay? At what point do we address it? Because we know it's always gonna be there every year, and, and it's really important to us that our children go to that school.

How much debt do you have?

We have about $20,000, not including our house. We have about $28,000.

Okay, and what's the income?

So combined, it's about $78,000 a year net.

Okay, what does it look like monthly? What do you bring home?

I bring home about $2,300 every 2 weeks. So it's about, okay.

Yeah.

$4,600 a week.

Okay. Um, with that $4,600, what's your margin that you're throwing at this $28,000 of debt?

Um, so we're, so the way the debt is made up, it's about $6K in the car. And it's about $2,200 in student loans. And so that $4,600 a month, which that was just mine. My wife brings home another, I don't know, $1,400 a month. Um, and of that we're doing about, about $365, um, $365 on student loans. And we're doing about $400 on the car. Um, just because minimums on the student loans are or, you know, more or less that. The car minimum is about $250.

When you say $365 and $400, is that above the minimum payment or is that including?

Yes.

Okay.

On the car, it's above. It's above.

So you're putting $700. You have a margin of $765 over and above minimum payments that you're putting towards your debt.

Yeah.

Okay. I would It— tell me if this bothers you. It bothers me that it could foreseeably take you 2 years to pay off $28,000 of debt.

Yes.

Okay. So then the question becomes, what are we going to do about that?

Right.

And I'm asking you, what are you going to do about that?

Um, I mean, we're just kind of, you know, taking it day by day. We're trying to—

but don't say day by day because I just rolled out the math for you. It bothers me that it would take you over 2 years to pay off $28,000, and you've said it bothers you too, as it should. My real question to you on the line is, what are you going to do about that?

I mean, change, address more towards it.

Yeah, so there's 2 things you can do.

You Do there's two—

there's— I'll give you a hint because there's two factors to this. You can either decrease expenses or you can increase income, or you can do both together. So where do you think your greatest potential lies? Does it lie in lowering expenses or does it lie in increasing income?

Um, right now, probably decreasing expenses.

I would say that. Um, but I, I also know for you it felt like the $1,600 was immovable.

Yeah, it kind of is.

Why is that?

Just for personal reasons. It's personal reasons I really prefer not to get into on the air, but just like assuming that that is the reality, I'm curious how you guys would address that. I know you guys would disagree with the premise that that is the reality, but if it were— if you tell me—

listen, it's your life. If you tell me this is immovable and I'm not shaking on it, then I'm not going to waste my time trying to push you on it.

But what is it— what is movable is are you willing to work weekends? Are you, um, is your wife who makes $1,600 a month, is she willing to go find a full-time job and double her income now that the kids are in school? Right, because, because like, right, you can go make more money, especially for a sprint to get this thing knocked out, right?

And so I guess I'm kind of asking, knowing that that expense is going to be there every year, would it be stay so far ahead of it, you're paying this thing in full at the start of every year in cash.

You can't afford to do it. It doesn't— that's even— that's not a relevant question for you. You can't afford that.

Yeah. Because then what happens then? Here, then, then the equation becomes this. It's cool to side hustle and sprint like John said when you have a short-term goal, but that's not a long-term— that's not sustainable long-term. So to your point, if this $1,600 is going to be part of your life forever, now you have to start looking at long-term measures and going, okay, my core income just does not sustain the life that I want. I want, that means I have to start looking for ways to get my core income up. So that's either I switch my full-time job, I move to a less expensive area, I go to a place where there's jobs that pay higher. Do you see what I'm saying? So we really have to decide, and I, I'm working on your framework, which is $1,600 is not movable. If that's the case, then you guys do need to look at solutions that are long-term solutions. We can help you sprint to pay off the $28,000, but that's not gonna solve a $1,600 line item.

And, and for the foreseeable future and monthly.

Yeah.

It's a bill. It, it's a water bill. It's a light bill. You don't need to save up 16 times 12 or 16 times 9 and try to figure out how to come up with that many thousands of dollars. Like, A, you can't do that.

Okay.

You don't make that kind of money, but it, it's, you're not in debt to the school just same as you're not in debt to the cell phone company.

Right, right, right.

It's a bill.

Okay, so just treating it kind of like that, kind of like a really expensive water bill. It's a very, very expensive bill in terms of tackling it. I got you. Okay, yeah, yeah, thank you.

Now, when you— you might be closer than we think. So let's see here, your car payment, your, your minimum— what's your minimum car payment?

$233.

$233. And what's the minimum student loan payment?

Like $350.

Okay, so we're getting close, um, if we add that up together, because you told me before the $765, that does not include minimums, right?

Right, so, so minimum is $233, we pay about $400, and then the, the minimum on the student loan is about $350, we pay like $365 just to put a little something on top.

But I mean, that puts you at $1,348 that you have back in your budget once you pay this debt off, which it's not $1,600, but it's finding you a little bit of money to put towards that. So that's the gap that you're going to have to close. But just remembering when you do that, you're not going to have any other margin.

Right. For sure.

So you've got, you've got your work cut out for you. What do you think you're going to do?

We're going to decrease, decrease expenses.

Can your wife not go earn more money?

Um, not really, no, but I'll find ways. I'll make it work.

The— just— I'm just telling you, dude, we've been doing this a long time. Those words, 'I'll make it work,' are famous last words.

Will you make one deal with me though?

Sure.

Will you promise me you just won't go into debt to make this work? Because what I see is— what I'm— this is what I'm most worried about for I'm not gonna take you to task on that. You know, you're gonna value what you value. So don't hear me say that like this is a terrible thing. But what I'm afraid for you is if it gets tight, I would hate for you guys to start leaning on credit cards or anything like that to fill these gaps. So just promise me, no matter what you do, please don't let this be a recipe for you to say yes to debt or credit. Fair enough?

01:02:29

Yeah, look, for sure.

And I'll just tell you, your language is of a man who's tried. Trapped. And trapped men never make great choices long-term.

Right.

Okay.

Okay.

And so if that means, that means if your wife can't do anything else, if there's just no options about the schooling, then you might have to look in the mirror and say, okay, I'm gonna have to go get another job. I'm gonna have to go make some more money. I'm gonna have to work 2 or 3 jobs like millions and millions of men are doing all across the country to provide for their families. But it might take that kind of sacrifice and that kind of change. But man, I get real nervous anytime I hear a man who sounds trapped because that's when, like you say, Jay, that's when they start making gambles, they start making bets, they start day trading, they start crypto, they just start doing stuff that they normally wouldn't do. And man, they find themselves in a big, big mess. You're not trapped, brother.

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What's up, Hey, how you guys doing?

We're doing great, brother.

Thanks.

Thanks for calling. What's up?

No, thanks. Um, I'm just looking for some advice. So I've got a unique situation. My grandmother passed away a few years ago. Um, my, my mom, my dad's mother, he's got a second cousin that kind of contested her will. Um, it took about 2 years. He spent about $60,000 of his own money. We don't know how much is in her account. Months. And in the end, he's now asking— she circumvented him because they don't have a great relationship. So in the end, the money is going to end up going to me. And I have a great relationship with my mom. They're still married. But, you know, he's telling her to tell me that once I get my money, that I owe him the $60,000. So I bring this up because when it came time for me to go get my master's degree, I was looking at going to the East Coast. He convinced me to stay on the West Coast. He said, I'll pay for your student loans. He didn't. I paid off the $150K. So like with all this kind of going on and him kind of trying to use my mom to guilt me into paying him back, like, am I obligated to pay him the $60,000 or should I just wipe it out considering he never came through with paying for my college?

How old are you?

I'm 40.

40. How much money are we talking here?

I don't know. That's the thing. It could be a dollar. It could be $300,000. I'm assuming since one of the second cousins tried to contest the will, it's a decent amount of money, probably $300,000 to $500,000.

Okay, when's the last time— and I'm kind of poking at you, but just know, like, if we were sitting down at a table, I'd be smiling when I'm saying this, okay?

Yeah.

Um, when's the last time you called your dad and had a grown man conversation? Because here's the deal, this is how kids work. Hey, tell Susie that I've got a crush on Sutton, but don't tell her that. Like, and then Sutton tells Susie, well, John, I don't— like, you see what I'm saying? Y'all are playing telephone through your poor mom. Y'all are grown grown men.

Yeah. No, I know. We, we haven't spoken in 3 years. He got into a fight with my wife and obviously I chose my wife's side.

Yeah.

If he wants to be a grown man and call his son and say, hey, I fought this, it's this much money, here's what I spent on it. It feels right to me that you would come back. And then you said, well, let's have a deeper conversation. You told me you'd pay for this and then you walked away and I got stuck with $150,000. Have a grownup conversation.

Okay.

But I, I'm not gonna play telephone with my dad. I would tell my mom, mom, I don't wanna hear any more of the pass-through. If dad wants to talk to me about money, he can call me like a grownup. And for you, brother, you did the thing, you paid it off.

Yeah.

Every minute you wake up and choose to think about that. And let me ask you this, how many imaginary conversations have you had with your dad over that student loan?

Too many.

Exactly. And you always win 'em. You get this mic drop moment and he's like, you're right, son. I love you. And he writes you a 50, none of that's ever gonna happen ever.

Yeah.

And so every minute you choose to engage in that is a minute. Uh, I mean, is, is a choice to not have the energy that you could spend on your wife, on your kids, on your, on the life you're living right now. You did the noble right thing. Yeah. Had a problem with your money. Somebody didn't show up for you and you paid it off. I'm proud of you for that, dude.

Thank you.

That's what men do. They step up and solve a problem. I would tell my mom, hey mom, I, I don't wanna have any more pass-through conversations. If dad wants to talk about money, he can call me.

Okay.

And free her from that. And she can tell him, free yourself from that. And then when it gets to that conversation, man, I, I, I would just have a lot more questions than I could, I could answer on you right now. I, if he was choosing to go to war with the second cousin, cuz he's got 70 years of disdain for second cousin. Or he thought he was in this will and suddenly he didn't find himself in it. Like, who knows, man, right? Who knows how much he actually spent on these bills? He's already proven to you he's not trustworthy. So I mean, yeah, I have so many questions here, but I don't, I don't see you under any obligation for anything at any time when it comes to doing anything other than graciously receiving this money and being a good steward of it as your grandmother would've wanted you to.

Okay.

Right.

I like that.

Now, if your dad had called you 3 years ago and said, second cousin showed up, I'm going to war for this thing, it's gonna be expensive. Um, I'm gonna need an agreement from you that I'm gonna spend some money on this thing, but we're gonna win this thing together. I could have seen you going, well, yeah, dude, let's do that, because it's the right thing to do. He didn't do that, right?

Yeah.

So I just have a lot more questions than I would be able to answer in good faith here, but the way y'all are going about it sounds like one of you is 9 and one of you is 11, right?

Yeah, I understand.

What do you think, Jade?

I, I think that you couldn't have said it better, and I don't think there's much else to say about this. And I, I almost don't want to continue it on because you've already run through this so many times in your brain. I just want to slam the gavel and go, that's it, it's over. You're gonna get your inheritance and that's that on that.

Okay. No, I like that. I didn't think about it from that perspective either.

The one thing I'll I'll tell you, and I, I, all of us on this show get grief for this. Um, when I tell somebody who's got a 3.1% mortgage that they got right after COVID and they, they, they think they're winning life by hanging onto it, right? I always tell folks, dude, my financial picture, I'm not solving for max ROI. I am simply using money to solve for peace in my life. Right. And so I use that frame on almost every single thing.

I do.

And so in this case, if you get a check for $500,000 and $60,000 gets this person out of your life forever, and you choose to not repay a debt cuz you don't have one, but if you choose to write a check for a soul tax for you to end this thing, you're not starving. You're left with $440,000, right? That can be a choice you choose to make. Um, I can guarantee you if you do write that check, he's gonna come knocking from the door.

That's what I was gonna say. That's not gonna be the end end of it. It's not going to be the end of it.

That's been the story of my life.

There you go. And so if this has been— and you said it, you just said it perfectly, um, he's been doing this to you your whole life, hadn't he?

Yeah, yeah, there have been multiple times where he's hit me up for money, paid me back, hit me up for money, paid me back. And then—

and that's why you need to just put this to rest because it's just drain. It's just a drain.

Yeah, I amend my answer. No, I wouldn't give him any money. If he calls you and flies down and y'all have a grown-up over, like grown-up adult male conversation at a diner where y'all shake hands, then so be it. Y'all can come up with a deal there. But short of that, no, you don't owe him any money.

Got it. Okay, thank you very much. I appreciate it.

All right, brother, take care, man. Thanks for being a person of, of high integrity and wanting to get this thing right. That's, that's pretty noble of you, brother. Let's go out to, uh, Dallas and talk to Victoria. What's up, Victoria?

Hi, thank you for taking my call.

Oh, I'm right up against the clock, so get right to your question. Question here.

Okay, okay. So recently got a good paying job, um, but I started getting into debt right afterward. I'm getting married, I moved, um, but my big question is I have about a little about $18,000 in debt, but I'm getting a good bonus at the end of the year. Do I continue with the debt snowball or do I kind of live normally and then just pay it off at the end of the year?

No, I'd continue the debt snowball and I'd get as far as you possibly can because what if this— what if you pay off the $18,000 $100,000 before the end of the year. And then you just have this sweet bonus sitting there waiting for you that can be your 3 to 6 months of expenses.

Okay.

Now, or, or I think you need the muscle. I think you need the, like, 9 months of grinding.

True that. That's great for the soul. It's great for the confidence.

And by the way, Jade and I would not have a job if everybody's bonus always came through at the end of the year. Like they were promised.

That's true.

Yeah, I wouldn't hold my breath for nothing. This, this show is made up of people who— the government's going to pay off everything and they're going to forgive, and the boss said I'm going to get it, and it doesn't work out. Keep doing the same thing you're doing. Pay it off month by month. Practice that muscle. And if you get a bonus check at the end of the year, it's just that— a bonus.

The Ramsey Show question of the day is brought to you by Yrefy. Defaulted private student loans can leave you feeling stuck and overwhelmed, but Yrefy helps you explore refinancing options with a low fixed rate and a payment based on what you can actually afford. Visit yrefy.com/ramsey. That's the letter Y, R-E-F-Y, dot com slash ramsey. May not be available in all states. Okie dokie. Today's question comes from Alexandra in Oregon.

She says, my fiancé and I just postponed our wedding for the third time because he is at risk of losing his house again. This is due to him being convicted— hold on, I gotta get myself together. This is due to him being convinced the business that he started 5 years ago is going to be a success, but it has yet to turn a profit. I've asked him to get a full-time job so we can get married, but he refuses to give up his dream of being an entrepreneur. I'm tired of my life being on hold while he chases success. Should I give him more time or move on? I think you better cut it loose. I think it's time to cut it loose. I mean, here's the thing. I'm looking at this and you're writing into a radio show because you've had it. If you take the time to email a radio show, you've had it.

That level of desperation.

It's desperation. He's postponed the wedding 3 times now, and he's almost lost his house. Like, there's no security there. Now, here's what I will say, um, being an entrepreneur, if you are, if you are truly of the entrepreneurial spirit, you are not going to— everything is not going to be awesome, and everything is not going to be a success. There's going to be ideas that suck, and then there's going to be ideas that are pretty good, and then there's going to be ideas like, like, yeah, that when was it, right? So there is part of that where there's a roller coaster to ride, but what I would hope he would be doing is in the meantime, working some sort of stable job while he's putting his hand in all those other different things. That's the only, that's the best that you can ask for.

Yeah, entrepreneurship is not a pass on being an idiot.

Yeah.

Right? Or not, it's not a pass on not believing the rules of math apply to you.

That's right.

Right? Or not being a person of character and integrity. Integrity. So as, as the great, um, Dave Ramsey once said, see you later, Felicia. That's what I would say.

Yeah.

This one's— yeah, here's the thing, Alexandra, and this isn't gonna give you any more peace. He's already left you. He is married to this fantasy and he's giving it his time. He's about to give it his home. He's giving it his energy and he's left. You keep hanging on and, cuz you love him and I admire that about you. Um, but he has moved on and so I think it's time for you to move on too. That's our two cents, but we're a couple of radio people who have never met you before. So you do what you want to do. I would be willing to bet, um, $100 you're gonna have a fourth wedding on the books within 2 months. What do you think? What do you think, Jade?

Yeah, you're probably, well, I don't know. If I could hear her voice on the phone, I'd have a better gage.

There you go, that's probably true. That's probably true.

But I think it's time, clearly, anybody who's, he's continuing to value whatever it is that he's doing at a fail to being able to have success with you over here on the other side.

I want someone who's gonna marry my daughter to put the energy and obsession that he has in his business into my daughter.

Man, yes.

That's what I want.

Mm-hmm.

You want me to, like, we need to get a house done. You, I need to work 3 jobs to make something happen done. Like, we're gonna do that.

Wait, so what you're touching on is something that this, this is about to be a whole discussion because it's so true. This is for all of us, not just, uh, old boy who started his business 5 years ago and wasn't successful, but that's all of us. If you look up and you're putting more intentionality and time and effort into anything that's not your family, you need to check yourself before you wreck yourself. Yeah.

And here, I think people take that the wrong way. Like, I've been working on a new book project for 2 years. You just had a book come out. My wife and I, like, 8 months ago, we went on, like, what I call, like, a final date. Like, we know this is coming. And we've been on dates since then. But, like, we're about to hit wild season. My wife's an author. She wrote in this season. We got 2 young kids. Like, we've been in it. But the anchor point is all of this circles back, not so dad can get famous, not so I can get just another book on the shelf, but for us and for people in our local community, right? People like— and so, but its anchor starts there. And so there are seasons that are way out of whack and way out of balance. And you and I are on the road and we're doing—

Yeah, you can do sprints.

That's life. But it all anchors back to her and I sat across the table and said, All right, all hands in. We're about to have this season coming up and here's what our life's gonna look like on the backside of this thing. But man, you are married to somebody who is having an affair with their job, or actually you're the affair. Their love is their job. Their love is their golf game. Their love is their whatever, their phone.

Man.

It's a problem. Yeah. 'Cause not you trying to think so strategically about how you're gonna get your next raise and how you're gonna navigate these relationships and you're not being that intentional with how you navigate your relationships at home. You're not, you know, you're like you said, you're focused on your golf game and improving your swing, you know, improving your, your mile time, all those things. But you don't put the same thought into your money. You don't put the same thoughts into your relationships. I'm just saying, first things first. You gotta put the first things first is all I'm saying.

If, if here's what I want people listening to do, go home today. Remember like if you went to college, you went to, you were in high school, you gotta syllabus. All of us. Here's all the books you got to read this semester. Here's when the assignments are due. Here's the homework schedule. Here's all that. I want you to ask your spouse for a syllabus of them. What are 5 books they love? What are 5 movies they love? What are 5 podcasts they're listening to these days? What are 5 big topics they have? And I want you to spend a couple of months knowing your spouse, learning them again, studying them, talking to them, going to dinner with them and saying, all right, I'm not gonna try to debate you. I just wanna hear, what do you think about this? What's going on overseas? What do you think about what's going on in politics? I'm not gonna fight at all. I just wanna learn about you. I listened to this podcast you love. I think it was terrible. Tell me about what you like about it. But get to know each other again. And that level of intentionality, man, if I can put that much into the next bass rod I'm gonna get or my next hunting spot, and I won't give that to my wife, what kind of husband does that make me?

And I've been there for years.

01:22:16

'Cause at work, you'll talk to Chad and act like what he's saying is the most exciting thing ever, just so that you look good in front of Chad. And then you get home, you'll walk out while like, listen, I should not know, Jade.

I'm, no, I'm getting convicted in real time. I should not know the Seymour Duncan P90s that I just put in my Les Paul. I should not know how that all works and not know how my wife likes her coffee.

It's so important.

I'm telling you.

Yes.

That's more important than this. I should have that stuff covered. Covered in my spirit. I should be paying more attention, making sure she's got coffee in the morning, making sure, hey, I'm gonna run to the store, I'm gonna go fill her car up with gas on Sunday night, knowing instead of getting up on Monday and being like, oh, she didn't put— I can go do that. Yeah, I should do that stuff. You know why? Because I do it for my guitars, I do it for my hunting gear.

We all have done it, man. We've all done it. We've all done it.

So to reiterate, Alexandra, see you later, Felicia. Um, do we have— uh, now we talked too long.

Jade, I'm still on it. You closed. You wrapped it up too soon. First things first. You know what? Hit me with one of those social questions.

You know what? I already, already, already moved them off.

Really? I've got one. I've got one from TikTok. Okay.

My favorite place to hang.

Oh, this is great. Okay.

Did you know if somebody came to me and said, hey, log into TikTok or I'm going to set you on fire, I would be on fire right now.

Just be like, bones.

Get Get it going, get it going. I don't know how to log in. All right, go for it.

Okay, Michael from TikTok says, let's see, we are planning on selling our current home and purchasing a new home within the next few months. Does it make sense to keep attacking the mortgage or should we save money, more money towards the next down payment? Um, you really could do either or. I probably would save the money out in cash. That's what I would do, just in case you get from your house what you were expecting to get, possibly.

Yeah. And it depends on how much cash you already have for your down payment for your next house. If you're sitting on a couple hundred thousand dollars, then yeah, keep grinding away at it. But, um, I, if I knew I was gonna put my house on the market in 2 or 3 months, months, yeah, yeah, I, I would, I would pay minimums and keep the cash.

Keep the cash. I would do the same thing.

That's what I would do. Hey, thanks for being with us. We're gonna be back for another hour soon, right here on the Ramsey Ramsey Show. Oh, we're still going.

We're still going, Joe.

I thought you were giving me the— Joe's our fearless—

I've got another social question here.

Audio engineer. Listen, this is why they don't let me drive, ladies and gentlemen. Sometimes I run into the media.

I'm here for you.

Love you guys. We'll be back soon. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm John Delony, joined by Jade Warshaw. Let's go out to Austin, Texas, the 512, and talk to Mike, Mike, Mike. What's up, Mike?

How's it going, guys?

Doing all right, brother, what's up?

Thanks for taking my call. Bit of an odd situation. I received a promotion about 2 weeks ago from my work.

Congratulations.

Thank you. Although they do a truck allowance program versus a company truck program, and so after looking into it, Looking at their stipulations of what that vehicle needs to be, I would have to buy something and finance it. I really don't want to do that. Me and my wife just got out of— just got 100% debt-free. And so just don't know how you guys would handle this situation.

Is the stipulation reimbursement only or do you have to have a certain truck at a certain mileage and year? And then they'll, they'll give you a stipend.

Certain truck of a certain mileage in a certain year, and then I get a monthly stipend.

Okay. Um, you're gonna hate my answer, but if, if I'm in your exact shoes, I would probably begin either A, I'd make the decision I'm gonna waive the stipend, and I know that's free money, but my, my freedom is worth more than that. Or I would save up the money on my own and buy, buy buy the truck and then take the stipend.

Yeah. Why can't you be on an elongated timeline? Do you have to make this decision immediately is what I'm saying?

Yeah. So they gave me a 30-day timeframe to make that decision just because I explained to my district supervisor that I don't want to go out and finance a truck in order to be in. So I would just use the current truck I have, although my current truck that I have now won't pull the big trailers and it's only a half-ton versus it needing to be a 1-ton to get the monthly stipend.

So can you even perform the job with your current truck or you cannot?

Short answer, no.

What's, what does it cost to get a used vehicle?

I mean, the used, that's the problem. I mean, they're asking you to buy an $80,000 truck. Truck, right?

And I'm, I'm looking, I'm looking used, but I mean, even a used vehicle is a used truck that would work under 100,000 miles and not older than 5 years old. I mean, I'm looking at, you know, $40,000, $50,000 truck.

Wait a minute, not, uh, not to get the truck allowance to actually be able to pull what you need to pull, like to act— there's two searches. There's one search that gets you the allowance. The other search is just a vehicle that is able to like physically do what the vehicle has to right?

Um, yes.

Okay, so my guess is if you did a search on getting a vehicle that just does what it needs to do, that's going to be cheaper than a vehicle that would get you the allowance.

Um, correct.

Okay, here's my—

because then I waive that stipend.

You do? How much is the stipend?

Uh, $2,500.

$1,500 a month.

Yes, sir.

Okay. So that's a, that's a significant chunk of change.

Yes, sir.

But I, I want you to consider what they're doing. They are asking, they're putting that much money on the table, um, for a couple of things. A, they want fancy looking trucks to show up to, to job sites. They want to look like they are, are, this is, look at what our guys are You're driving, right? But they want you, the employee, to carry 100% of the risk because they can be out of pocket 2 months. They can be out of pocket $5,000. You're sitting on a $50,000 or $60,000 note, and then they decide to go a different direction and you're stuck. You see what I'm saying?

Yeah.

What happens if you leave the job or what happens if you're fired? What happens to the value of the truck at that point? The stipend stops, right?

Yeah. And then in that certain point, I would just, I would just sell the vehicle, right?

That you might be upside down on, or that is lost value, or that, right? So the onus becomes on you for all of this.

There, there's a reason they're paying this much money. There nobody, no, no business is just like, you know what, let's just throw some money at some guys just for fun. They've done the, they've done the actuarial work here to say, let's not have our own fleet and let's not manage our own fleet. Let's transfer all of that depreciation, all of the risk onto our employees, and we'll just write 'em a check for it.

Yeah.

That's not good.

So you, here's the thing. I think you're gonna do this anyway. And I, if you're going to do this, then man, I, I, I would tell you, hey, I wouldn't do this on my own home. And I know that creates a cascade of challenges cuz you've gotten promoted into a job where they won't give you the tools to do the job they just promoted you to do. They want you to go buy 'em and nobody making the money that they're paying you can actually afford this. So they're gonna pay you to make a payment. Um, that to me, I, I just don't like that arrangement. It makes me uncomfortable because it puts me and my family on the block and they don't have any skin in this game. But if you are gonna do it, man, get the minimum threshold you can get through the door with.

And that's what I was looking at. And would that not matter based on if, if, I mean, outside of our emerg— our, our emergency fund, I have a sizable amount of money saved up, and if I throw that at it, I won't be upside down. That's kind of the route I was, I was thinking of going on this. And I mean, they've been— this company has been around since the '60s, and, and everybody in this situation has had good luck with it. And the only reason they got rid of fleet vehicles is guys were just, just weren't taking care of it, and it was costing them a lot more money. And now that guys are using their personal trucks, they're taking care of them and they're lasting a lot longer.

I mean, I, I get their business. I get their business deal. I mean, what they're doing makes sense to me. I get it. But I'm not on their team. I'm on your team.

Right.

And so it just feels like a big liability to be hanging on to. But yeah, I mean, you do you. How much cash do you have saved?

About $28,000.

Okay. Um, and how much in your emergency fund?

Uh, we've got about $22,000 right now.

Okay. Is there a possibility you could dwindle that sucker down to where it's just a few months and you go in and get pretty dang close to paying for this thing in cash?

Um, yeah.

And use that $2,500. Yeah.

I'd have to get the wife on board, but just be militant about paying—

be militant about taking that $2,500 stipend plus any extra cash you'll have and refilling every, every cash bucket you got.

Yes, and that's kind of what would be the plan. I mean, if I got to make double or triple payments a month to get it paid off, you know, in, in, in 6 months, that would 100% be the idea. I mean, the last thing I want is debt. We just spent 2 years trying to get out of it.

Yeah, totally. I mean, I just—

I'm trying to be smart about this, but also this is something I've been working for for the last 10 years, and I'd really hate to give it up because I, you know, I, I don't want to go and buy a truck.

I get that, but at some point, anybody who says they have a principle, that principle is always going to get checked, right?

Right.

So it's always going to get checked.

I—

if, if I was put in your situation and I didn't have another option, yada yada yada, I would probably— Jay, tell me if I'm wrong— I would dwindle my cash down to what I could manage, and I'd keep a cushion in the bank, um, and then I would be a lunatic about getting that sucker refilled.

I'd really, um, I'd really push for a different— I'd try to get creative. I'd sit down with ChatGPT tonight and roll a bunch of different scenarios. Maybe they— maybe you ask for half and you cash flow half. Really get creative and come to them with a lot of solutions. That shows that you care and you want to the problem.

Dave Ramsey here. Most people stay stuck with their money because they're not paying attention into it. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the EveryDollar budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan step step. Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen starting now. Go download EveryDollar in the App Store or Google Play and start for free today.

Let's roll out to Grand Rapids, Michigan and talk to Sky. What up, Sky? How we doing?

Hey.

How can we help?

Hi, so I'm about to graduate college and I have a full-time job lined up, but I'm trying to decide whether or not I should live at home and commute the hour and a half both ways each day for a while to kind of help pay off debt, or if I should look for an apartment, you know, within like a 10-minute drive drive.

An hour and a half each way?

Yeah, I'm from a really rural area, so like—

so we're saying 3 hours a day? 3 hours a day?

How much? No, hold on, how much debt you got, Neva?

Um, I'm not— I'm gonna graduate with about $15,000 in loans, so it's not like terrible.

Now get an apartment. If you told me you were going to be 50 or 100 grand, I might tell you 3 hours a day is the price you pay for a year. But man, $15 grand, you'll have that knocked out in no time, right?

Okay, I mean, yeah, that's what I was kind of thinking, but I just didn't know if it was worth it to drive for a while to just kind of get it paid off as soon as possible.

Well, think about this: 3 hours times 5, that's 15 hours. You could probably, uh—

I think it's going to make you hate the work that you do.

It's going to hate your life.

It's just a bad— you're, you're graduating, you're entering into your field, it's a bad bad entrance into your field because you'll start to have resentment over showing up to work every single day.

Okay.

I think— have you run it out and said, okay, if I do this, how long will it take me?

Um, not really, because it's not— I'm not gonna— like, it's not great paying, but what's the pay for the job? So it's $19.45 an hour before taxes, full-time. Um, it is in the events industry, so there are probably be some overtime associated with that?

You would have to make a commitment to yourself. I'm gonna work. Here's— let's, let's change it and say it this way. The next 2 years of your life should be pretty tough. Okay, pretty miserable. You can share that, you can have that misery in the car driving back and forth to, to your mom and dad's house, still having to abide by their curfew and not being able to date anyone because y'all live out in on a a farm, or it could be pretty miserable, pretty tough grinding, but you're taking every possible job in your industry and in your space and getting to know people and shake hands and hang out with people your age and getting as much exposure as you possibly can. 'Cause you're gonna get this debt paid off in 12 months or less, and then you're gonna spend the next year grinding and getting an emergency fund.

Right.

So if you think of it that way, you're gonna, you're gonna spend this time, time working and you're gonna spend this time like grinding. I would rather do that and look up and be 24, 25 years old, have put 2 or 3 long hour days, 2 or 3 years worth of long hour days towards the job industry I want to be a part of, than driving back and forth to my parents' house.

Yes.

Okay.

Yes, 100%. Because at least if you move closer work, when you're done with work, you can easily get to your next job because it's right there in town. Yeah.

Oh, I didn't think about that. Yeah.

You know what I'm saying? You can do more actual work because you're in town. So it's like, oh, okay, I get off my job here. Now I'm going to head over to the place where I bartend, or I'm going to head over to, you know, where I work at Nike Town or whatever it is that you do on the side. Whereas if you're out in the boonies, you've wasted 3 hours a day. You can't get back. You can't get it back. And there's nothing else out there to do. Yeah, true, except shoot rabbits. What do you guys do out there?

Something like that. Something like that.

Yeah, so that, that's what, that's what we would do. Congratulations on, uh, graduating, and, um, get that debt paid off ASAP. And just, just know, if you're 21 and you're graduating, 2 years, that's not enough. The next 5, 7, 8 years of your life, just know I'm going to get after it. Jade, the life I live right now is based on, I was pretty unhealthy, but working like a mad person in my 20s.

20-year-old Jon, yeah. Yeah.

Yep.

Saying yes to every opportunity, every speaking engagement, every degree opportunity, every, all of those skills I learned along the way give me the life I have now.

The 20s are for scratching and clawing. For everything. That is the definition of that decade. Decade is you scratch, you claw, you're tired, you work some more, you fail a little bit, you work some more. Like, that is the 20s.

Arthur Brooks, the great Arthur Brooks, he said this recently. Our culture has flipped and we so over-index for our 20s and 30s and we under-index for our 40s, 50s, 60s, 70s, and 80s and 90s. And the fun I thought I would be having in my 20s, dude, now that I can have that kind of fun in my 40s.

'Cause you got some money.

I got money, I got time. Time. I got my own car and it starts every time I turn it on, right?

I know, I know.

I have an amazing wife. Like, it— like, it— I never would have dreamed it was this awesome.

I, I couldn't agree more. I literally had this conversation with Sam Warshaw. I was like, man, everybody thinks like 20s are like the glory years, or like back when I was younger, like, no glory days. And I'm like, no, in your 20s, first off, half of us aren't even married yet, so we're out here just trying to survive that whole situation. And then you got no money. You don't have any respect on your name in your career. Like, it's just, when I look back on it, I go, "Actually, the 20s are kind of trash." In my 40s, I'm going to the same shows, in the same mosh pits.

I'm just able to—

You can afford the good tickets.

I get the t-shirt too.

Yeah, yeah, yeah.

I don't have to sneak onto the floor. I can pay for the floor seats now.

Oh man, I mean, truer words have never been spoken, and it's so true. Just know it's necessary. Necessary. Like, 20s are building years, and it's so necessary to just let it— like, let the build begin.

Grind it, grind it, grind it.

Embrace it for what it is.

All right, let's go out to Brandon in Pittsburgh. Let's see here, where are we at? Uh, right here. Brandon, what's up?

Hi. Um, so I, I have kind of a big, big thing.

Let it rip.

All right, so I'm a truck driver. I make about $3,200 biweekly. My wife works for at a store. She's a manager there. She gets about $1,700 biweekly. Um, I have a mortgage payment about $1,200 per month and a pickup truck payment for $800 a month. Uh, my wife covers utilities. She has her own car payment for $700 a month. I, um, owe about $35,000 for my car. She owes $41,000. I have $120,000 on the house and credit card debt of $3,600 and a wedding loan that's $15,000. $100,000, and I'm slowly paying off my credit card debt, and I'd like to start paying off the wedding loan faster too and building savings. So now my question is, I have no clue how to build wealth. I am numerically illiterate, don't know where to start.

Came to the right place, brother.

You did.

Perfect.

And you had your numbers listed down and right. I couldn't even keep up writing it all fast enough.

So all I heard was you got $1,500 in car payments between you and your wife.

Yeah, that's a lot.

Yes, it's a lot. And for her, yeah, I, I commute back and forth to work.

Um, I a, uh, you can do that on a Go, on a GoPed, dude. Like, not really, but you know what I mean?

You don't need, those are expensive. Even used car pay. Like my first car when I was in high school was $1,700. It's like $6,000 now, which I could go ahead and trade in my truck for one.

But yes, we're doing that.

I don't need a truck either.

Let me get back. Let me get back to the, the question at hand cuz we don't have a lot of time and I want to answer your question. Um, the, the, the crux of your question first because this is gonna inform everything I I say next. You asked, I don't know, I don't know the first thing about building wealth. And the first thing about building wealth is you've got to get control of your income. Dave Ramsey would say your biggest wealth-building tool is your income. And you've got a decent one. I think combined you guys are at like $9,200 a month. A month. Is that about right?

About right. Yep.

Okay. That's a decent income. The problem is it's going out the door. You said it yourself, to debt payments every single month, whether it be the pickup truck, the car, the wedding loan, the credit cards. So the way way we get our income back in our hands and back in our control is we have to, have to, have to pay off the debt. And that's the part that nobody likes to do. Over here, we teach a series of 7 Baby Steps. And the second Baby Step, Baby Step 2, is the one that's about paying off debt. And everybody hates it because it's— it requires, you know, discipline. It takes a while, all of that. But I really, really want you to embrace it because it's the only way to get free. Before we get off the line, we're going to send you every We're going to send you the book, The Total Money Makeover, and we're going to set you up with Financial Peace University. All of those things walk you through our 7 Baby Steps system. It's a plan for your life, and it has to do with you taking these debts, lining them up smallest to largest, paying minimum payments on all of them, but throwing all of your extra money every single month at that smallest debt.

That's the main part. That's the first thing that you really have to to get your head around, but all the resources that we sent you are gonna teach you how to budget so that you can do that. It's gonna teach you how to say no to debt because we don't do debt anymore. All of this is gonna set you up for that win, my brother. I can't wait.

And chances are the cars are gonna go. Hang on the line, we'll get you hooked up.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

The right insurance acts as a shield around your loved ones and your wallet if disaster strikes. Our free insurance coverage checkup helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps. Go to ramsaysolutions.com/checkup to take the coverage checkup and find out if you have the protection you need. Let's go out to New York and talk to April. What line is April on? April is on line 4. What's up, April?

Hi, um, I'm 65— well, I'll be 65 years old this year, and I didn't start working until I was about 63. I am wondering, will I be able to catch up to be able to retire, and what things can I do to, to build retirement money Master.

Well, thanks for calling. Tell me about your life.

Um, well, I, uh, I work 40-hour week.

Um, I make about a little over $22 an hour. Um, I'm debt-free. I own everything, my home, my vehicles. I pay cash for everything.

Why did you start working at 63?

Well, I've been a housewife pretty much since I was 16 years old. And through a series of marriages and divorces, I haven't been— the last husband I wasn't with long enough to be able to get any part of his retirement. So being divorced, I had to figure it out on my own. So I've got about $85,000 that I have saved up. Over the course of time. And most of that, I'd say about $53,000 is in savings. I'm not sure if I should just be leaving it in my savings or if I should be trying to put it somewhere. I know I get these Social Security statements every so many months a year. And I'm looking at, you know, maybe $600 a month if I'm lucky.

Right. Okay. Um, so of the $85,000, you said some of it's separated. Where's the other portion of it?

The rest of it's in the checking account.

Okay.

So leave $53,000 alone in the savings.

What I would do is I'd probably put 6 months of expenses in a high-yield savings account. Could we say maybe $20,000, $25,000 and put that in a high-yield savings.

And when you say high-yield savings, what does that exactly mean?

It's a, it's a, it's a form of a savings account that has a slightly higher compounding interest rate, just a slightly higher interest rate. That's it.

Okay, because my, my bank is 5%. I'm not sure if—

oh, 5%.

Yeah, if you get 5%, you're fine. Do a somersault and leave your money there.

Yeah, don't move it. But I would, I would move the other $50,000 $100,000 and I would invest that.

Okay.

And I would get with a SmartVestor Pro, which we'll give you the information on that. You can go on ramsaysolutions.com or you can go on Ask Ramsey and say, I need a SmartVestor Pro. And that person's gonna sit down with you and they're gonna help you and teach you about the best ways to invest your money.

Okay.

Nice. I did start a 401(k) in October.

Okay, great. $25,000. Great.

And so there's only about $2,400 in that. I mean, I don't know if I'm supposed to be— you know, I know you're supposed to do something with it at 73 years old, but I was really hoping not to have to work that long.

Well, that's true, but you may have to.

Yeah, you will be.

So you can invest the $50,000, uh, into a Roth IRA over time, and you can put some of it in a brokerage account. You can put some of it— so the SmartVestor Pro is going to help you decide all the best places to invest that money, but I want that working for you in the market. I don't want it just sitting, uh, in an account because if you invest it, hopefully you're going to get somewhere between a 10 to 11%, uh, return is what we're hoping for. So, so that's thing one. Thing two is, uh, what are you bringing home every month, around $3,500?

In that neighborhood, yes.

Okay. And of that money, how much would you say is extra? We would call it margin. Uh, Should be quite a bit because you have no debt.

Well, anything that I have extra, I've, I've been putting into the 401k.

Yes, that's good, that's good.

Yeah, so I've already got it taken out at work, but I want to know beyond that, how much, how much margin do you have?

And again, margin is extra. So when your check comes home, how much is left that you just say, okay, what am I going to do with this money? I to choose?

Um, probably somewhere around $1,000, $1,500 to $1,000.

Okay, so I would challenge you that most— much of that money needs to be invested.

Almost all of it.

Okay, because I don't know what percentage you're investing now, do you? What percentage of your— of your gross income?

I think it's— I think it's 15%.

Okay, since your home is paid off, you get to invest as much as you want, which is awesome.

I didn't know that.

Yeah, because you don't have anything else to pay— to pay for. So if I were you, I'd be taking that $1,500 and I'd be looking at it going, okay, let— you know, aside from me maybe going to the movies every once in a while, or, you know, maybe I go to, to dinner with a friend or whatever, I'd be investing, uh, much of that $1,500, as much as you can.

Okay.

Because that's going to be the thing that breaks you free in all of this.

All right, that sounds good.

In April, I'm telling you this, and I would tell my mom— my mom's older than you, but I would tell her this exact thing if she woke up in your situation at 63. Every penny is going to count when it comes to getting money into savings.

All right.

Okay.

Yes, I have a scarcity mindset, so I don't spend any more than I have to. And I just, I know I'm not anywhere near where I should be though.

Okay.

You know, because of the late start.

Right. And I would make peace with, I mean, chances are, I mean, the chance is high you'll be working well past 70.

Okay, okay, because let me do some quick math for you. So let's just pretend you're 65 now. Let's say we do this until age 75. Do you think you can work till 75?

Sure.

I mean, what's your health? I don't know, it depends on the nature of what you do and what your health is, right?

Oh, I work very hard. I'm running back and forth and running up and down stairs.

And well, you tell me, what do you think?

Good health.

What do you think's a realistic timeframe that you would be working? Because I want to plug these numbers in for you. 72.

Okay. Well, we'll say, okay, let's go with 72.

72. Does that sound good? Okay. So let's say 65 to 72. Let's say you put $2,000, you contribute that every single month. That is going to leave you with $250,000.

All right. Right.

Okay. So that gives you a little something.

That's a lot better than I thought.

Yeah, it does. But then the next thing I'm wondering about is once you are down to $600 or whatever your Social Security will allow, if you find that it's really, really tight for you, you need to be looking at, number one, I want you to call us back. But number two, remember you've got, I'm guessing, a pretty decent home that you're sitting on. What's your home worth?

Um, probably about $185,000 on the low side.

$185,000?

Where do you live?

Oh, you're in New York.

In New York City, you have a $185,000 house.

How did that happen?

It, it's, it's actually Central New York, but still, you can't sneeze in New York for $180 grand, can you?

It's worth $185,000.

Well, now with the gas prices they have now.

All right, well, you foiled my plan. I was gonna say, if you have, if have some decent, you know, value in your home, you might be able to sell that and get something smaller that you pay cash for. But I don't know if you can get much smaller than $185,000.

No, you've, you've kind of won the housing lottery these days with $185,000.

Mm-hmm. Well, actually, my plan is to sell this house and hopefully move to Tennessee, but I gotta crunch the numbers. Why?

Well, we don't have a state income tax. I don't know what you're gonna do with all that extra money that New York takes outta your paycheck. You'll have to figure out what to do with that. But yeah, you, I mean, I don't know where you'd find a place to live for $180 grand in Nashville.

Uh-huh.

In Tennessee.

I think your bet, I think your best bet is doing your best to save any and every bit of money that you can. And honestly, while you feel good, if you've got the energy to run up and down steps and do all this, I'd be looking for even more work that I can pick up.

All right.

Because the more you work, maybe I can get some overtime.

Yep.

The more you work, the better the situation bodes for you.

Or get a job sitting down, like, at, at a, at one of the beautiful hotels in New York or doing anything, right? But, um, yeah, you, you're gonna have a busy, busy, busy next 10 to 15 years, but we believe in you. And thanks for, thanks for giving us a call and thanks for being on top of things, man, as you get going.

Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Overwhelming.

Well, here's the good news: you don't have to tackle the process alone.

Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence.

You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly.

What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsaysolutions.com/realestate. That's ramsaysolutions.com/realestate.

Www.thomasroberts.com/realestate.

Today's Scripture of the Day is Isaiah 55:2. Why do you spend money for what is not bread and your wages for what does not satisfy? Listen carefully to me and eat what is good and let your soul delight itself in abundance. Zig Ziglar says money isn't the most important thing in life, but it's reasonably close to oxygen on the gotta-have-it scale.

He's not wrong. Neither are wrong.

They're both right.

Let's go up to St. Louis, Missouri, talk to Austin. What's What's up, Austin?

Hey, how you guys doing?

We're doing good, brother. What's up?

Uh, well, first off, thank you guys for taking my call. Um, so something that's been on my mind lately, uh, I recently, you know, last year I started listening to you guys' show and it really opened my eyes up to a lot of things and I've been kind of irresponsible with my, with my money and, uh, now I'm $50,000 kind of debt. Um, well, also I'm maxing out my 401k, and that's actually what I called you guys for. My uncle— for the past 2 years I've been dumping my money into a 2065 Target Retirement Fund because I never knew what to do. But he told me I need to be investing in either a Vanguard 500 S&P or a Fidelity 500 S&P. And he said don't touch that until, until you're 55. And, you know, that's all fine and dandy, but I just didn't want to get to 55 and then be like, oh, where, where did all my money go? And, you know, I just, I want to set myself up for the best. So I didn't know what you guys had to say about that.

I was a little confused when you said that when you got to 55, you'd be wondering where your money went. It'd be sitting in the investment that you put it in.

Well, that— yeah, I just don't— I know he told me— I never knew anything about the stock market or anything, but he says I'd just be investing into the stock market.

So you're saying you're just doing what he said. Yes, you don't know really what you're investing.

What to do.

Gotcha.

Okay, I'm glad you called, brother. How much is in there right now? Have you looked at it?

Uh, so when I started doing it about a month ago, I had, you know, $12,000 in that Target Retirement Fund. Well, in this past month, I looked and it's jumped about $3,500, so $15,500 right now.

Okay, can I tell you what my what my, um, mutual fund holding is right now?

Yes.

I have no idea. And I'm gonna tell you, I'm gonna tell you why. I do look at it once a year, but I don't know what it is right now. You know why? Because I'm not ever gonna pull it out until it's time for me to retire.

Okay.

And if you watch this account like a stock ticker, you're gonna make yourself nuts.

Okay.

Yeah.

That's what my parents tell me all the time. Yes.

You're gonna make yourself—

I like to watch my money grow.

I know. But you're not gonna like it when the economy has a downturn and there's 100% chance it will have downturns over the course of your life between now and 55. And it'll make you insane. It'll make you feel, it'll make you feel, um, um, powerful when it shouldn't. It'll make you feel secure when it shouldn't. And it will make you feel devastated when it shouldn't. And so when you put money in a retirement account, the goal is to not take it out until it's time retire. And so watching it every— you're 23 years old, brother. Your, your rods and cones are gonna fall out of your eyes if you watch it that close over the next 30 years. Okay.

Mm-hmm.

And so I do check it. I do pay attention to it. I have a SmartVestor Pro that I work with, but man, I just don't watch it on a week by week, month by month basis because I know I'm an anxious guy. I know I can get really up when things are up and really down when things are down. And You set it on a roller coaster, man. It's gonna go up and it's gonna go down. And if the last 100 years is any indication, it will, it will eventually tick and, and move its way up. But let it do its thing. Okay?

Okay.

And one last thing.

Uh, hold on. Jay's gonna walk you through the, oh, go ahead. Some more details here.

Um, okay, great. I just wanna make sure, and this is something I would check on because this is, we might need this for your debt. Just double check and see where it's housed. If it's housed inside of a Roth IRA, if it's housed inside of a, um, anything that is a retirement account, maybe a traditional IRA, you can't touch it. But if it's just sitting there in a brokerage account, you can. And we would use it for debt because at that point it's, there's not going to be a penalty if you were to remove it. But just double check that because if it's just sitting there in a brokerage account, that's great. That's money that's up for grabs.

Um, and you can cash out to pay off this $50,000 hole you're in.

Yeah, exactly. So you've got $50,000, uh, dollars in debt. What kind of How much debt is that?

Uh, well, $5,000 of it is in credit cards because I was, like I said, I was stupid with my money. But, uh, about a week before I started listening to you guys' show, I went out and bought a brand new truck.

Okay, that's way stupider than the credit cards.

Yeah, it's '45.

What's it worth?

Uh, well, uh, brand new off the lot right now, it's probably worth around $30,000.

No, no, if you turned around to sell If you sold your car today, you'd only get $30,000 for it?

Uh, that's just what Kelley Blue Book says.

What about private sale?

For private sale, I could probably get around $37,000 for it.

Okay, $37,000. So your goal, your goal is to figure out like, how are we going to get another $8,000 to clear this debt? And not only that, but how can I get another, I don't know, $8,000 or another $8,000 that I'm going to get kind of like a junker truck that I'm going to drive around for a little while. And it's going to remind me that I'm never going to go into debt again because it sucks to drive an $8,000 truck. You know what I'm saying? So what I would do if I were in your shoes, because what I did here, the $8,000 clears you from being upside down. That way you can sell the car, get the title, transfer all of that. And then another $8,000 gets you on a ride. That's $16,000. $16,000 is a lot better than paying off $45,000. Am I right?

Oh yeah.

Okay. So I'd go down to the credit union. I go down to the bank or, you know, whatever you can do to get this money and get it on the best terms possible. And that becomes your new payment that you're paying off, the $16,000 loan instead of the $45,000 car. And that for anybody who's listening to this call right now, if you're a person who you find yourself upside down. That's how you get out of it. And you might think, I can't believe you would tell him to go pick up debt, but we're lowering the debt. We're going down in payment. So that's thing one. And in the meantime, while you're negotiating that transaction and you're finding a buyer and you're getting that personal loan, the next thing I want you to do is work so hard on paying off this $5,000 in credit card debt. And you're going to do that by picking up extra jobs and side hustling. Yes.

Yes, ma'am.

Okay. So that's like the nuts and bolts of how we're going to pay off this debt. But I want to run it back because two things that I wanna cover with you that are tantamount to this entire thing taking place and actually working is you've gotta do two things today. And if you don't do these two things, nothing that I tell you is going to work, okay?

Okay.

So if you have something to write with, write this down. Number one, today you have to go into the nearest mirror, Windex it off so you can see yourself very clearly in it, and look in your own eyes and You tell yourself, I'm never borrowing money again. I'm not a person who borrows money.

Yeah. I can do that.

Because you can't solve a problem while simultaneously creating it. So if you keep paying off debt and then borrowing more debt, you're just going to be a dog chasing its tail. So you look at yourself, I'm not borrowing money. The second thing you do today, you got to download a budget. We'll give you EveryDollar, which is the best budgeting app out there. It's not just a budgeting app. It also has plan for how you're going to do all this. You've got to download EveryDollar, and that is going to become your new BFF in your pocket because it's on your phone. Okay, that's it. And if you can do those two things, you're going to be able to walk out the rest of this no problem.

Do you have the courage to sell your truck and just get done with this thing?

Yes, I, I didn't know if I should pay it down to where where, you know, I'm not upside down and then get rid of it, or should I just get rid of it now?

I think you should get rid of it now because it's going to free up the money that you need to quickly pay off this credit card. And I think every day that you wait, it's going to go down in value.

It's going to depreciate. Do you know what that means?

Yeah, it means loses value.

Yeah, it loses value every minute you drive it.

And also, I think— I don't know, but I feel like the summertime could be a nice time to buy buy a truck. I don't know, maybe, you know, you put it out. I'm just saying, if you're selling something private sale, it's a lot nicer to roll up in the summertime when the number— when the weather's nice versus in the winter when it's covered in snow and it's dirty from the ice and all that stuff. I just made that up, but I'm just saying that could be good. But let me go back and teach you a little bit about the budget. You need the budget. The budget is a plan for your money. It's where you're going to fill in your income and your expenses, and you're going to tell every every dollar what to do. That's the whole point. So if you make $5,000 a month, you're going to assign $5,000 an assignment.

That's it for The Ramsey Show today. Thanks for being with us. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.