Transcript of To Change Your Results You Have To Change Your Behavior

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work they love, and create amazing relationships. I'm here, Jade Warshaw, with my cohost today, Rachel Cruze, best selling author, number 1, baby, all the time. Sometimes, Jade. Sometimes. Listen.

Take those props. Well, we're gonna be taking your calls about life and money, and it's the holiday season. So I'd love to hear calls about people deciding what they're gonna do for the holidays with their money. That's always fun. Alright, Rachel.

You ready to get into it? Yeah. Let's jump in. Alright. Let's do it.

We got Sam from Green Bay. What's going on, Sam?

Hi. Thank you for taking my call.

Hey. What's up? How can we help?

So my sister and I, we tend to have this debate every Christmas. And so she's using Ramsey as her stance, and I just I wanted to see if this truly is a Ramsey principle. So my my sister and I, go in on Christmas gifts often. And in my mind, if I'm going in on a gift with my sister, that's 2 people, we split it 5050.

Okay.

But when she's saying that it's from her, her husband, and me, in my mind, 5050 doesn't fully why? Because there's 3 people now.

You should you think it should be thirds?

I think it should be at least recognized that it's not 5050. So thirds would make sense. But can I tell you how she frames it?

Yes. Does she blame us?

Yes. She does. And I am not sure. She says, well, according to Dave Ramsey, we are 1 household with 1 joint finance situation. Okay.

And so we count as 1 share. And I'm a single person, so to me, that's just rude.

Well, here's the thing. Okay. It is definitely getting in the lines of, like, legalistic, I think. She's right. If you're married, we think of you as 1, like, 1 income, 1 band, 1 sound, like, let's that whole thing.

But I also see your point of view, which is like, hey. Let's say we all make $50,000 a year. That's a $100,000 from her household and only 50,000 from mine. Right?

Yep. Is

that what I'm understanding? So tell me what you want out of this. Do you want her to just recognize, hey, thanks for going halfsies on me. I understand that it's 2 against 1 here. Is it just you want her to validate that or do you really want her to pony up more cash?

Good question.

That is a solid question. I think I would like okay. If it's for my parents, and then, you know, that's more my sister and I, I would be happy with a 6040 split just for recognition. 6040. Okay.

But otherwise, if it's depending on what who it's for, I think thirds is appropriate.

Okay. Can I can I throw on a sidebar here? This is just where Jade's brain is going. Alright. I think I might this is this may not be good.

Okay. So if I'm in your let's I'm gonna be the in law. Okay? So I'm your sister's husband. In my house, if my husband was like, hey, me and my sisters are going in on a gift for my mom.

Mhmm. I would I it's like I'm part of it but I'm not really part of it because it's like they're they're the the main family, they've decided what it is. I'm kinda just on the side being like, okay, cool. That's fine. I don't even really know what's happening.

So So

it does feel weird going thirds.

It does feel weird going thirds. Now, I don't know the dynamic of your family if it's like, no. Like, he calls my mom mom and we're all together. Like, I do think that plays a what do you think, Rachel?

Yeah. I mean, I think there's a level of courtesy, right, that I'm like, okay. If it was, like, you know, Winston and I going in and if 1 of my siblings was single, a dual income I mean, I think there's like a reality of like, oh, yeah. We probably make more from a dual income Yes.

Yes.

Than single. So just as a nod of like, oh, yeah. But I would do it more, Sam, over dollar amount specifically. Like, hey. I have $100 to chip in for mom and dad's gift Mhmm.

And that's what I have. I love that. Let's build a gift around that, or I'll just get my own, right, and just do your own thing.

I really like that. Mhmm.

I think we did it backwards where we had the gift in our end.

That's right.

That's right.

Extended the split. So that does make sense to me.

Yep. Yep. Yeah. Listen, I wanna validate all day the fact that you're feeling like, man, I feel like I'm chipping in more. But I like Rachel's idea of just saying, here's my set budget.

This is what I can spend. And if that doesn't work, maybe we choose something else or I just do my own thing. Yes?

Yes. I think so. Because I don't know if we're ever gonna see each other's perspective fully. So I do think that's probably the best case scenario.

Yeah. And I do think, Sam, I would challenge a little bit on the end for you that what we find on the show so often is that money problems are usually not money problems. There's probably deep, you know, level of maybe kind of hurt and loneliness and I don't know what it is for you, but but something there of, like, I'm I'm flying solo here. Someone, like, throw me a rope. At least, like like, at least acknowledge this idea.

Right? And you do kinda feel pushed to the back burner, and then money's put into the play in the relationship. And then it just feels weird because there's dollar amounts, but I don't know. It it gets so sticky. It it shouldn't, and it doesn't feel like it could.

It kinda feels like a, oh, not a big problem, but I think it's a bigger problem to you because of other deeper issues.

I think so too.

And not issues, I wouldn't say. I would say just, emotions.

The feelings. Yeah. Yeah. Because the truth is, most of the time, a dual household is gonna have more money. Yeah.

And that's a real part of it. And I I stand by. If it's 1 of those families where it's like, you know, everybody's so tight and the in law played just as much of a part, then I could see a little bit more while she was like, well, can you guys contribute more? Because it's from both of you. But, like, in my household, I'd be like, what are you getting them?

Okay. Yeah.

1 unit. Yes. Exactly. Yeah. Yeah.

Yeah. 1 unit

going in. Totally. But we've had some, like, discussion over this and I know we're gonna talk more about it tomorrow, but just the idea of setting boundaries around Christmas in general. Because the expectations are high. And Yes.

A lot of times, it's not even that you've intentionally done it to yourself. It's just Christmas happens every year. And if the past 3 years you got someone a gift, and then this year you don't, it's easy for somebody to think, well, what's wrong? Did something happen? I have to explain myself.

It's hard. Yes. It's kind of hard to backpedal, but

I Tradition kinda sets precedent almost. Yeah. Yes. We changed it up. So the Ramsey side, we usually each individually, like, get mom and dad a gift.

Right? So, like, I'll get, you know, from Winston and I, like, mom a gift and dad a gift and same with the siblings. And then us adults, kids, will draw a name. Yes. And this year, we got we threw mom and dad in the in the pot.

So we're they're 1 of the Vagilos? So, yeah, so, like, if you didn't pick mom or dad, you're not buying them a gift. And I'll be honest, it it's kinda

nice. No.

It's kinda nice to limit the the amount of gifts you

have to buy.

I mean, obviously, if there's something that's so great and you, like, wanted to get it right, we're not, like, hard and fast on it. But it is kinda nice to be like, you know what? All the adults are playing equally this year, and, like, we're all in. But then that means, in turn, they're not they used to buy us gifts.

Now they don't have to.

Now they don't have to. So now I'm like, Ted Gumman. I'm like an actual adult now.

Hey. Welcome to the club.

Winston's mom's Winston's parents still buy us gifts.

They do.

So we'll yeah. So we'll we'll get some from them.

But, I say welcome to the club. We're adult. I know. Yeah. My family's my my sister actually, introduced that to us.

It's probably almost been 7 years or so. And I love it. It's an adult like, my parents were included in the mix. Yeah. And I'll be honest, a lot of times I do cheat and even if I don't get my parents, I'll still get them some.

I just Yes. I can't and but I'm also not in debt anymore. So like, let's throw that out there. Yeah. You get

the margin

and you wanna get the nice. Yeah. It's the whole argument on being thoughtful around giving gifts, considering your debt, considering your financial state has nothing to do with whether or not we want you to be generous or not.

That's right.

But it's understanding in what ways can you be generous. Because the truth is you can be generous, and you can be giving, and grateful, and thankful in a lot of ways that don't require money and don't require you overspending and making a bad situation worse. Amen. You know what I'm saying? Oh, yeah.

Tis the season to be jolly and smart with your money. This is the Ramsay show.

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Alright. You're listening to the Ramsey Show. If you wanna give us a call, it's a live show, so you can do that. The number is triple 8-825-5225. We'll get you on the line.

Again, I'm Jade Warshaw. Next to me is Rachel Cruze. We're the ones that'll be taking your calls this hour. So let's go straight to the phone lines where we've got Samantha in Phoenix, Arizona. What's going on, Samantha?

Hi. Thank you guys for taking my call.

You bet.

I am new to the baby steps. And I was technically on baby steps too. But I left an abusive relationship, and I'm going through a custody battle right now. So I've incurred additional debt for attorney fees.

Okay.

So I'm trying to figure out my next steps going forward. Should I pause making additional payments, like, towards my debt and just work on saving money for additional attorney fees that might come up?

Yeah. I I would. This is definitely a storm.

I mean

For sure. We I would categorize this as a storm and we do say that when you're in baby step 2, especially, there's a couple of things that would cause you to kind of pause and that would be a baby on the way or some sort of storm or major emergency that is causing you to kind of have to just hold hold tight for a minute.

Yeah. That becomes more of a priority at that point than paying off debt. Right? We're all about paying off debt, but your child is a priority there. Right?

If there's a health issue that you have to pause to make sure that you can get yourself in a healthy place, that is, you know, yeah, pregnancy. Like, anything that is, takes precedent, right, which is usually a relational situation or a health situation, we for sure say pause, and get that in order. I'm so sorry, Samantha. I'm I'm always so impressed with women like you that that choose to to step out of a situation like that because that cycle can be so, so hard to break out of. How long has this been going on just the from the custody standpoint, fighting it with lawyers?

So going on 2 years, the first part was when he tried to fight the restraining order. So that was the first time I took on attorney fees. And then now and I he was he was in jail for a bit for violating the restraining order, but now he's out. So now he's trying to come for full custody. Oh my gosh.

How many kids do you have?

Luckily, I only have 1. Okay. And Me and my daughter, but it's still a lot.

How is your, like, financial situation? How is your home situation?

So I currently rent and I am safe. Luckily, I'm with family and I make about 52,000 a year. Good. But my debt went from I got it down to 12,000 and now it's back up at 20. So

And what are you is that just the outstand is that just the 20,000 is the attorney fees?

No. So, about 10,000 of it was attorney fees. 6,000 was about credit card. 3 about, student loans and then I have about 2,000 left on my car loan.

Okay. Do you have any do you have any savings right now that you're pulling from, or are you just pretty much occurring the debt as the attorney fees come up?

So I was able to pull from, like, 401 k, to kinda help with this because it was so I wasn't expecting it. You know, I thought after the restraining order was standing that that was gonna be it. So I wasn't expecting this. So I was able to get a little bit of help through that. But, of course, I I wanna pay all of this back as quickly as possible.

But my biggest fear is I don't know what's gonna happen 3 to 6 months from now to the, you know, next year as well.

Right. Okay. So are you still in the middle of this then?

I am. Yeah.

And has y'all has your lawyer given you any time frame by any chance? Like, do you know I mean, you're saying 3 to 6 months. Do you know like, does he have any conclusion of, like, when this will end?

No. No. Because we're still waiting on mediation. And then I more than likely that nothing's gonna happen in there because my ex is of course, he's not gonna agree to anything.

Mhmm. Does your ex have a lot of money? Is that why he's trying to is he trying to drain you out on this?

Yeah. They think so. Okay. Because, yes, he comes for money. So he knows that I would do anything to protect our daughter.

So he knows that I'm willing to, you know, force you know, figure out ways to get the money because he he knows that I'm not I'm not gonna represent myself. I'm not in a position to do that, you know, emotionally. And so

Mhmm. What, is there anybody around you that has the ability to help with this that wants to? Because the truth is this is costing you money, and it's costing you money that you don't have. And I do believe, like, I'm I believe that the custody is gonna end up with you because from what you're telling me, there's clearly track record that this is an abusive person, especially the fact that he's ended in jail for trying to violate this. So I I have a feeling that this will end with you, but how long can you go down this track?

Do you see what I'm saying?

Yeah.

Yeah. So, Samantha, so I yeah. If I were you, if I was in your position right now, I would stay current on everything. I would not get behind. So I would I would be paying your minimum payments on everything.

And then on the side, finding that margin, month to month to be able to put some money aside so as these fees come up, you do have an account that you're gonna be able to pull from.

Mhmm.

And then I would also start to evaluate as much as you can the, consistency of how often the bills are coming, how often you guys are you're using the lawyer if there is mediation and all of it. Because I think a goal would be small goals, would just say, okay. There's some money set aside for attorney fees. And the truth is I may have to go into debt for that, but if I can at least maybe knock out that $2,000 car loan in the midst of this. Right?

Because it's not something that's gonna be solved. That sounds like even maybe even in the next 12 months. So I don't want you sitting idle financially during that time, but I do want you to put some cushion between you and life. So putting some money away, kind of for an emergency fund that you can pull some of that for attorney's fees as they come up, but then also giving yourself a goal financially to start making some progress. Because, honestly, too, Samantha, I think making progress in this area of your life, it it actually might give you, you know, a that boost of confidence, and there's something proactive that you're doing in your life that actually can can start the wheels engaging in a in a in a positive way through the circumstance.

Absolutely.

I mean, you there's only 2,000 left on the car. What's the payment on that? What will you get back in your pocket monthly when you pay that off?

So I pay about 2.96 a month for the car.

Good. So another $300. That's great. To Rachel's point, that's even more money that you you'll be able to set aside. So yeah.

Like, no disguising the fact that this is tough and, you know, you've got your work cut out for you in a lot of ways. But I think just being really intentional, still sticking to still creating a plan and sticking to that plan, whatever you decide that plan is, is gonna be really paramount, for you walking through this. Mhmm. That's so so so tough.

And I'm so sorry, Samantha.

Tough to walk through. Alright. Do you wanna try to take another call right quick? Let's try it. Caleb in Norfolk, Virginia.

What's going on, Caleb?

Hey. Thanks for taking my call. Merry Christmas.

Merry Christmas. How can we help?

So my question is regarding life insurance. Okay. I'm currently in the military, but I'm getting out in about 3 months. I have life insurance through the military. It's called service members group life insurance.

I pay about $31 a month for a $500,000 policy. My question is whenever I get out, I have the option for a limited time, really, to roll that over into what's called veterans group life insurance, which is about $35 a month. And that will, you know, increase about every 5 years. I'm 26 now. I have no debt, but, really, I'm just unsure because I don't have a a wife or children yet.

I don't really have anybody relying on my wage but me. So I'm just kinda looking for some guidance here.

Yeah. I mean, Kim, I don't think you really have to re up this or roll it over. I mean, I I wouldn't. The reason, really, you have life insurance is if someone is dependent upon your income. So that would be a spouse or children.

And as a single person, I mean, I would have some money, you know, set aside that if something were to happen to you, like, covers funeral costs and that kind of thing. But I don't think you need a life insurance policy for that. So I probably would just end up canceling it once you get out.

I agree. I agree with that statement. And if you don't have to pay it now, I I wouldn't pay it now. Forget the rollover. I would get out of it now if I could because you really don't need it.

Alright. That does it for that. Yeah. I think people forget all the time, Rachel, that there's a purpose purpose to life insurance. It's not necessarily to, make you rich or all of these other things.

It's for anybody who's dependent on your income. If something happens to you, how do they make life work? That's what it's for. Yep. Children, spouses.

And term life is so inexpensive. It sounded like some of those rates, you know, it's it's just not expensive at all. And so, yeah, if someone's dependent on your income, make sure you get life insurance. You can go to zander, insurance.com and check it out there because that's a great place to get your term life.

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You're listening to the Ramsay show. Hey, thanks for hanging out with us. We're so happy that you listen to the show and you've made it part of the parts of your day that matter. I'm Jade Warshaw. Next to me is Rachel Cruze.

And I don't know if you realize this, but Christmas is almost here. It was it happened so fast. I don't even know what happened.

Always. Every year.

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I love it. Listen, I'm gonna I get questions for humans decks every year and people come out.

Yes. I know. I have 2 in my purse right now to give for gifts. Love it. Asking for them.

So Love it. Alright. Let's see what Al's talking about. He's in Atlanta, Georgia. What's going on, Al?

Hey. How you guys doing? Thank you for taking my call.

We're good.

So me and my wife, we're kinda looking for a plan, and we're kinda going back and forth on whether we should sell our house or not.

Okay. Tell me more.

So the house payment is, like, 240, 240k. She has a credit card balance of $232 and a car payment with, 18 k.

Okay.

And then the debt I have is I have a car loan, which is 8 k, and then credit cards, about 20 k in credit card debt.

Okay. And, just to clarify, her credit cards, it's only $232 or that's the monthly payment?

It's only $232.

Okay. And then just to clarify the mortgage, the the entire mortgage is $240,000. That's what you owe?

Yes, ma'am.

And what's the monthly payment?

$2,000. But with utilities, it comes out to about 25100.

Okay. And what's you guys' take home pay?

We make about 70 k a a year.

70 k? And when you take your checks home, what is it every month?

Like, I would say, like, roughly, like, 2,025100 a month.

Okay. What's is that a piece or what's missing here?

Wait. Per paycheck? No. Maybe like that happened yeah.

Okay. Per paycheck. So you get paid twice a month?

Is that what you're saying?

Yes, ma'am.

Okay. So 5,000 a month. Okay. So now that we have this picture Sorry.

Real quick, Al. That's combined, your income and hers because you split up your debt. Is that both of your incomes coming in?

Yes. Combined.

Combined. So

make about 2 k a month, and she makes about 2 k a month.

Got it. K. So 4,000 a month. What do

you what do you guys do?

We work at this little small ware warehouse, just operating a machine.

Okay. Okay. And you both work at the same place. So both of you are about 35,000 a year?

Correct.

Got it. Okay. So there are some glaringly obvious things going on here. The big 1 is your incomes are both on the low side. And because of that, this mortgage is half of your income every month.

Right.

And so just to put that in perspective a little bit, here we'd say that we don't really want your mortgage payment to be any more than 25%. Sometimes it's a little bit more than that and people can, you know, make it work at 28 or even up to 30 if they know that they have this track of their income going up. But in this case, that being half, there's no real place for you to go. You're extremely house poor and I know that you feel it. And so to your point, that that might be the idea is to sell this house, but I wanna know, is there a way that you see your income going up?

Do you guys have plans? Tell me more about that.

Yes. We are picking up overtime. We also have a side business where we detail cars, and we plan on Uber and stuff like that.

Okay. How much are you guys making on on all of that extra?

It varies. So, it varies.

Okay. Couple 100? A 1000?

Yeah. I would say a couple 100.

Okay. Okay. So what it sounds like just from and I'm not saying this to throw shade. It's just the fact. Based on the way you're answering these questions, it doesn't sound like you're using a budget.

Because 1 thing I know is when there's no budget, you're searching for the numbers. Right?

Right.

Okay. So that's the first step here. When it whenever we talk about the baby steps or the plan for your money, the very first thing is that foundational piece of the budget. You've gotta have that.

Mhmm.

And all that is, Al, is you saying, okay. Here's our income, and you and your wife sit down together and do this. Here's our income, and we're gonna list everything that we could possibly spend money on for the month. And that's the things that are necessities, like rent and utilities and groceries. And that's also the other things that you're spending money on, whether it be, I don't know, maybe your wife gets her nails done or something like that.

Right? You're listing it all out, and then you're seeing what's left. And so in your case, there's probably none left and you're probably in the red, which is

Why the credit card debt's there as well. Yeah. Al, is the 18,000 was that a car, you said her car?

Yes. That's how much she has left on

her car. How much, have you guys, Kelly Blue Booked it at all?

No. We haven't.

Okay. Because yeah. I mean, all of this is a little bit disarray. I mean, you're kinda have you guys have dabbled into, like, every part from a from a debt standpoint, and I wanna give you, like, a really clear, path and plan in this call with you in the next few minutes because I think I it feels maybe a little jumbled. It is.

So here's what I would do, Al. If I were to wake up in your shoes tomorrow this is always a fun game. It is. And much easier said out on the side of the desk because I'm talking to you, than implementing it because this is gonna be really hard. Like and here's the truth.

If you want something different with your money, something has to change, and you guys need to make a complete 180 and do things completely differently than how you've been doing it. I would put the house up for sale because I think this eating half your income is not gonna work long term, and it's going to continue to leave you guys in the red. Mhmm. I would Kelly blue book her car, and I would get it sold ASAP private sale. I wouldn't take it to a dealership private sale.

Even if you if you're underwater a few 1,000, then take out a loan for the difference and get a 3, $4,000 car in the meantime and let that be the car. And then I would start working and I'd pay off this $232, like, this month. I would, you know, I I would work to pay that off. Yeah. And then you guys would have the 8 k left in credit card debt, I think is what or no.

Your car, 8,000 in your car. In the 20 k. And if your car is nicer out, give her your car and you drive the $3,000 car. I like that. And so and then those are your only 2 debt left, really, is your car and the 20 k in credit card debt.

And, again, this is gonna take you know, I've just laid out 2 to 3 years of you guys really buckling down and saying we're gonna work tons of overtime.

Mhmm.

We're gonna get this cleaned up. But how you guys could be in a completely different situation, but you have to make completely different choices than what you guys have been making. And Jade mentioned the budget, and the budget's gonna be a great thing because it's gonna keep you accountable, and you're actually gonna see, holy crap. Here's what we spent going out to eat. Holy crap.

This is what this is costing and this and this, and you actually start eliminating some of this stuff. Find extra margin to throw out this debt, and and you really could start making some headway. So Al, if you'll stay on the line, Kelly's gonna pick up, and we're gonna give you guys every dollar premium, which is our budgeting app. And I want you and your wife to sit down together tonight, and you guys start filling this out together. Mhmm.

And then we're gonna throw in Financial Peace University

Yeah.

Which is our course and the total money makeover

book Yes. I love that.

And the audiobook. Yeah. Yeah. We'll we'll we'll get you guys some stuff to really start seeing, hey, here is a step by step plan that we have to start taking in order to breathe.

Yes. And go to ramseysolutions.com/realestate to find an agent to sell that house.

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

Yeah. And what's so hard is I feel like 1 of those, especially the ones that I'm like, oh, it's terrible air. People that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I gonna pay my bills

How am I gonna make next week?

Yeah. In the middle of all that grief, like, it's just it is. It's terrible. So life insurance is the 1 thing, especially as a mom with 3 little kids that I'm, like, so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance.

And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not gonna be here. You gotta say it out loud, and you gotta say, I'm gonna say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost are stinking pizza.

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You're listening to the Ramsey Show. We help people with your life, your money, your relationships. If that's you, you wanna get in on the action, you can call us up. It's a live show. The number is 888-825-5225, and we'll get you on the line.

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Today's question comes from Lauren in New Mexico. I currently own 3 rental properties and have 30 year mortgages on 2 of them. You say to have 15 year mortgages because you pay it off faster. If I am putting my profits from my rental toward my principal on a 30 year mortgage and can pay it off in 15 years, is there a need to switch it to a 15 year mortgage? What's the reasoning behind the 15 year mortgage?

I make more profits with a lower monthly payments, which puts more money towards the principal. Well, Lauren, for starters, we would say not to even have rental property, if you're not able to pay cash for it. So, technically speaking, I mean, if you could pay it off quickly, I would probably just sell 1 and throw some of the equity, at the other and make that a goal to to sell it. But having, yep, 3 rentals, that have mortgages on them, yeah, not not the not the best idea, not really the Ramsey way to do it. But for your primary home, we do say a 15, even though people you know, this is 1 of those that I feel like is is a a slippery slope because, you know, a lot of people still do the 30 and, you know, whatever it is.

Yeah. Of course. But the thing to remember is that your intentions don't always line up with reality. So if you have the intention of paying a 30, like a 15, you know, stuff happens. And you're like, oh, yeah.

Well, we won't pay extra this month. We'll make sure to catch up next month. Mhmm. And then something else happens and you end up usually not paying it truly like like a 30. You don't.

Now when you're paying off your house in the baby steps, we do find that people are paying their houses off in, like, 9 to 11 years That's

right. That's

right. Which is amazing. So I think that 15 year fixed rate mortgage that we talk about, it just locks you in to a plan to get you out of debt faster with the guarantee that you will get get it paid off in 15 years.

It makes you accountable. Yeah. And let's be let's call a spade a spade. The truth is, if you go with a 30 year, you're not paying as much, so you get more house. Yes.

And I think, truthfully, when people want that, they want more house and not when you're locked into 15 though, it's like, okay. Maybe, suddenly, I can't afford what I thought I could get. Yes. So look at the

roofs of the And that's the thing that's what's so always interesting with houses is that you're gonna qualify for a lot more Absolutely. And what they will give you than what you necessarily need or even what's good for you financially. So we always talk about having at least 5% to put down for a down payment. Mhmm. Your payment being no more than 25% of your take home pay on a 15 year fixed rate, which I always say we understand.

That is a very conservative formula, when it comes to to the housing situation. But just like our last caller, you guys, like, you see people, like, get into housing situations and it and it takes half their income Or maybe 1 spouse chooses to stay home, but you can't because you built your life around, you know, having a dual income. And it it just starts to limit your choices. The deeper you go into debt Mhmm. The longer you're in debt, it just limits limits your life choices on what you can and can't do Yeah.

Because it's telling you, basically, what to do. So that's it, Lauren.

Alright. Well, that helps. Really good advice. Let's talk to Greg. He's in Biloxi, Mississippi.

What's going on, Greg?

Hey, Jade and Rachel. It's it's so good to be talking to y'all. I'm fangirling a little bit right now.

I know a lot. Glad you're here.

So I have been listening for a little over a year. But the month before I started listening, I cosigned on a truck for my now for my now ex fiance. Oh,

Greg. I'm sorry.

Yeah. Rough situation. So we had agreed, once things ended that, hey, You know, we can keep the loan as it is for a year, because we needed to wait for the maturity date.

Okay.

And so it's coming up on that. And just in talking to her on occasion, she most likely is not in a position to refinance it on her own, and she has said that her parents or anyone else won't help her.

Good for them.

So I

yeah. Yeah. Definitely. Just from my from my perspective, I I'm not quite sure how I can get myself out of this.

Have you tried persuading her to sell it and start over fresh on her own?

I have. She is not completely opposed to the idea, but I don't think I can really rely on her actually following that through.

Can I ask a question? And I promise it does kind of relate to this. Who broke up with who?

No. You're good. I ended things with her.

Okay. There Makes it a little stickier.

It makes it stickier because this this is a tie to you. This is a way for you to still be in her life, and

I don't pulled over, Greg?

No. There's an alarm going off tomorrow.

I was like, oh, no. Are you trying? Are you pulled over?

But my point is, like, this is a tie to you. And if it if the if things were different, I'd say you could make the argument of, like, hey, you broke things off and I want a clean break, and I I need to, you know, be free from this. Like, you could make that argument. But in this case, it does make it a little tough. How much is the loan for?

There's about 27 left on it.

Okay. Man, how much is it worth? Do you know?

I I actually did look up the Kelley Blue Book a couple weeks ago, and it said that private party sale was, tops, like, 23.

Oh gosh. And it's upside down. Okay. Yeah. This I think this is only gonna get worse.

So I would really encourage her to sell it, and I'd be strong on that. I'd say, listen, there's a reason that you can't I mean, the math is, like, the the logical reason is there's a reason you can't refinance this, and the reason is the bank has looked at your financial situation and said, it's not stable. You cannot afford this on your own, which means they expect you to default, which means I'm here for when you default. That's what that means. And I don't know what the the hard part is I don't know if your relationship is there for you to even talk to her like that anymore, but that's the truth of the matter.

I know. Because, I mean, if you can't you can't make her

No.

Do anything. And so you really are kind of at the mercy of of her. I'm like, you can't go in and, you know, you know, take your name off the loan in secret. Right. Yeah.

Yeah. So it it is so, yeah, you're in a, yeah, you're in a tough position, Greg, and it's kinda 1 of those, I'm sorry that you're gonna have to be 1 of the sad examples that we'll probably use this week to say when someone calls, I should you know, my my girlfriend wants me to cosign. We're gonna say, talk to Greg in Biloxi. Greg would tell you, don't do this because this is what happens.

My family agrees. My my family agrees that this is

the dumbest decision I've

ever talked

this entire weekend

of my life.

Oh, man.

I mean, unless you can just convince her because you're a great salesman, but coming from an ex fiance, she's probably not gonna wanna listen to her to your advice. So you broke her heart. Sorry, Greg. And now you're you're I mean, you're yeah. There's nothing you can do.

So I think it's 1 of those stupid texts. You know, and I'm praying she doesn't default Me too. And she just pays this and and gets out of it. But you but that's that's what's

She has been very consistent on the payment, then we'll give her that.

What is the payment?

Oh gosh. It's almost 7.

Oh gosh.

I mean, listen. The most practical thing you can do to be ready for this storm

If she defaults.

Is if if she defaults. And to be ready if you kind of have some money packed away on the side, because if she doesn't pay it, it reflects on you. And when it's time for you to buy a house, or when it's time for you to do some of the things that you wanna do, if you still have a credit score laying around, which you will because of this, it will make it bad. And as we've talked about on the show, having a bad credit score is very difficult. We talk about having a 0 credit score, which is wonderful.

But this will keep you from having that even if you pay off all of your other debts. So if I were in your shoes, which this is the game we like to play, I would be which by the way, we don't know much about your financial situation. Do you have debt?

I the truck technically, and then, I have about 22,000 in student loans I'm working on. I've already gotten rid of the credit card debt and

the, offer. I'd go gung ho on your debt. I'd work the baby steps on that. And then when I was through, I would be mindful of keeping some money stacked up.

Yeah. For your emergency fund, knowing this is something you may have to leave into. Exactly. And I would tell her too, Greg, you don't wanna emotionally be attached anymore. Right?

And this keeps you guys somewhat together in a weird state for the future, so I'm sorry.

I hate that that's happening to you. Alright. That does it for this hour of the show. Stick around. We'll be right back with you before you know it.

This show is sponsored by BetterHelp. Alright. Hey. It's that time of year when it's getting a little colder, it's getting dark earlier, and sometimes we just wanna stay inside and get cozy. For me, the perfect night at home, when I'm trying to be cozy, is me and my whole family under a bunch of big blankets watching a TV show or reading a book.

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From the Ramsey Network app, it's the Ramsey Show. We're here to take calls about your life, your money, and your relationships. I'm Jay Borschott. Next to me is number 1 best selling author, Rachel Cruze. She's my good buddy too.

I like hosting with her, but we're gonna be the ones taking your calls this hour. If you wanna get involved, you can do that. The number is 88825-5225. We'll get you into the mix. Merry Christmas, everybody.

Let's go to Kate. She's in Charlotte, North Carolina. I'm sorry. Let's go to Morgan. She's in Philadelphia, Pennsylvania.

What's going on, Morgan?

Hello. How are you?

I'm good. How are you?

That is what I deserve. Alright. So the dog

That's alright. Right.

How can we help?

So my husband's employer hasn't been paying him. It affects about 15 to 20 managers. These are all salary people. They're saying it's a problem with their payroll vendor. And so and I'm not sure how that all works.

So just a handful of employees, at his location are not being paid. He hasn't received a paycheck since September.

Woah. Oh my gosh. Holy smokes.

We are coming up on 6 paychecks that we haven't received, totaling, almost $20,000. We have gone through now our emergency fund, and I'm at a crisis point.

Yeah. Because what are they telling you guys? Because that payroll issue, if it's not cleared up in 14 days or something, I mean, this is this is more than that. Do you feel like they're lying to you?

I don't. I do. I I don't feel like they're lying. I think

Oh, are you there?

Our whole

call is something that's lost. That's okay. We'll keep rolling on this because Rachel, let's let's figure out what we would do if we were in this situation because I know she just gave us a very brief overview. But you know and I know that these are systems you can call in just like anybody else. You can switch to another system.

You can do it manually. You can have the accountant issue the checks. There's so many ways Right. Right. To make this right.

And so for me, just with that brief overview, I do smell a rat. I I feel like something might be going on. And the fact that she said I feel like she said early on that it was only management positions, which makes me think that might be higher paid folks.

Yep. And it's not happening. Yes. Totally. Well, and my thing is to, you know, there's a a period of understanding.

Okay. Yeah. There's some grace and all this, but but, also, people's livelihoods are dependent. And the fact that people have stayed for almost 3 months not getting paid Yes. It's pretty wild to me.

I mean, it is. I mean, there there's a point that you're like, you owe me this money Uh-huh. And I have to feed my fam. I'm like, what are people still expected to do? 100%.

And so yeah. I mean, I'm not gonna keep working for free.

I wouldn't keep working for free. And I'd love to hear Kim Coleman's take on this because if they if they truly felt like it was, some sort of an oversight or some sort of a true mistake that they were truly having issues fixing, which again, I can't see where that would really be the case. You could say something like, listen, I've enjoyed my time here, I've been dedicated working here, but I'd like to be paid. And until you can pay me, I have to go elsewhere. It's not it doesn't have to be like, that's it.

I quit. You know? Sure.

No. No. You don't have to be mean about it, but there is a reality that we haven't been again, this is 3 months, you guys. Like, we're not talking about 6 paychecks. Yeah.

I mean, this isn't 1 month. Right? And they're trying to work out whatever they are. If you haven't gotten it worked out at this point, then there's there's other issues happening, I think. I think that, yeah, you it shows me that you just don't have the money.

Yeah. Because you would find a workaround. If this company really cared about its people, within 3 months, you can find a way to put money in their bank account.

That's what I'm saying. Issue a paper check Yeah. That's right. It.

Yes. Like like in school. Yeah. Yeah. So if I I mean, honestly, I'm I'm I mean, maybe through December, but, first of the year, I'm looking for a new position.

100%. You know, I read a stat the other day that said, I believe it was 49.1%. So let's go ahead and say 50% Yeah. Of Americans that if they lost just 1 paycheck, not for the month, but just that 1, because most of us are paid biweekly. Yes.

1 paycheck, they would be in We're done. Yeah. Total financial distress. Like, they would not be able to meet their obligations. And that's to say that they probably don't have an emergency fund.

Sure. And in this case, thank goodness that they have the emergency fund.

Yes. Absolutely. That was coming out of an emergency that they couldn't control in a sense. Right? So that's what makes it an emergency.

It's unexpected and it's urgent. You have to Yes. Have money to put food on the table. But then, also, there is a point, you know, Maureen, that I would say that you guys are gonna start to be at fault personally and individually if

you stay

in a situation like this.

I agree.

So you can you can point fingers and, you know, talk about how how terrible this is, but you guys also stayed in the situation for 3 months. So

It would never be me, Rachel. No.

I mean, seriously. I'm like, I yeah. And and, again, if we get her back on the line, we can ask her, some more questions about just the the history of it and everything. But I know I mean yeah. It's it's just not either they're lying to you, either they don't have the money, or they're just completely inadequate in the sense that they don't even know how to pay their people.

And if that's the case, you may not even be working for them in the first place.

You can't

fix this in 6 in 3 months.

I agree. It smells fishy. Like, if I smell fish, I I'm looking for I'm looking for it. So I agree. But this just puts into perspective, and I know that this is not, the typical emergency.

This is not the typical hardship that we hear on the show. Right. But it does put in perspective why it's so important to manage your money well. Right? We talk all the time about these baby steps so that whatever happens in life, you have peace in the situation.

At least, initially, because I'm sure when that first paycheck didn't come through, they were like, holy smokes. Like, rent was due or, you know, a car pay, whatever it was. But when you don't have debt, suddenly, it's like, okay. My life is a lot more simplified.

Yep.

That's right.

And so if something were to happen where you lose a paycheck, someone gets laid off, yeah. I don't know. Somebody gets injured and they're not able to work, suddenly, life becomes more simple. You've got this emergency fund to fall back on and you can kind of get you can fly above that storm, so to speak, and just kind of ride it out without it becoming this, I don't know, complete catastrophe in

your life. Yep. Okay. There there's a great question from TikTok. We don't take many TikTok questions.

We don't. But I think we should start.

Alright. I like this.

From CJ.

Go ahead. Yeah.

And he asked, how can you focus on 1 debt at a time when the payments are all due around the same time?

I love that.

Yeah. So, CJ, yeah, when you're paying off your debt, it's not necessarily about, you know, when the bill is actually due for the minimum payment. It's about focusing on the smallest debt to get more of it paid off than the minimum payment. Right? So you will have a schedule of when your debts have to be paid throughout the month.

So they may be spread out or, in this case, they're all around the same time. So you may be paying, you know, all of it on 15th, you know, and it's your car loan. It's your credit card, you know, all of it together on 15th. But what you're really focusing on, when we say focus on 1 debt at a time, is you're gonna focus on that smallest debt. That's right.

Find margin in your budget by taking an extra job, cutting expenses, selling stuff, doing what you have to do to throw that extra money at that smallest debt. So the focus is not 1 debt at a time, meaning you're paying the minimum payments 1 debt at a time. You're staying current on everything, but you're focused on that smallest debt first.

That's

right. That's a really good way to put it because I know I made the mistake of kind of what he's saying. I've Sam when Sam and I were paying off debt, I mentioned this earlier, but, Sam and I paid off 460,000. And so, the debt snowball that we talk about is really important. And therefore, the longest I remember thinking, oh, I don't have to make minimum payments.

I because I was so eager to put extra money on the smallest debt.

Yes. Yes.

But when you don't do that, things get behind and 1800 pay me starts calling you. And before you know it, it's a worse mess because you're trying to do the right thing with the wrong method. Yes.

That's a great way to put it.

And so, it's so important to do the baby steps and do the debt snowball the correct way, listing them smallest to largest, making minimum payments on everything, but putting any and all extra money on the smallest debt.

Yes.

That's how this works. So good.

And, guys, and we and and Jade and I both are on all the socials. So check us out on TikTok and Instagram and Facebook, because I've I'm getting more people saying I follow you on TikTok.

My Your word. Wow.

Dates the Tic Tac, but here we are.

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You're listening to the Ramsey Show. Thanks for hanging out with us. I'm Jade Warshot. Next to me is Rachel Cruze. We are your host for the day, taking your calls.

And we wanna remind you that the best way to make the most of your money is by creating and sticking to a monthly budget. That is the foundation. And every dollar makes it so simple to plan your spending, track your expenses, and save for what matters most to you. You can do it all in an easy to use app that fits into your busy lifestyle and in your pocket because it's on your phone. You can keep a pulse on your spending and make progress on your money goals with Every Dollar.

So if you haven't already, download Every Dollar for free in the App Store or Google Play or you could click the link in the description if you're listening on YouTube or podcast. Alright. Let's go to the phone lines. We've got Katie, she's in Charlotte, North Carolina. What's going on, Katie?

Hi. Thanks for having me on the show.

You bet. How can we help?

So I me and my husband are coming out of credit card debt, due to our business. We closed our business last year, and we were living off our credit card last year. And then we just got it paid off. So

Wow. Congratulations.

Thank you. The big step in

It is.

The baby step. But yeah. I'm obsessed with, The Ramsey Show now, and I'm trying to revamp, our budget and our finances. So, what we just combined our bank accounts again, and I'm trying to figure out a budget of not falling into the paycheck to paycheck

Mhmm.

And falling into credit card debt again and trying to figure out what to spend on cash, what to put towards a credit card, minimally. We have childcare now, for both our girls that we plan on using cash and debit. And I just I'm trying to figure out a budget.

Okay. Have you downloaded every dollar yet?

I have, and I loaded all of our expenses and I'm still trying to navigate it.

Be more specific. Is it that you're you have a lot of money left over and you're not sure to do what to do with it? Or are you in the red? Tell us more.

So I'm in the green right now, putting every all of our expenses in and our budget and our income. And the issue is with my husband's income, it fluctuates. It's not a set, set salary

Okay.

Every week.

Okay. So what that that's just an irregular income. A lot of folks are on a irregular income. I am people that work on commission, that sort of thing. And so the way to do that, you're still putting everything in your every dollar budget, but at the as you're spending the money, you're doing it by priority.

And so, if you don't have the premium version, I would really recommend that for you because you can plan your paychecks. It's a feature. It's over on the left hand side. It looks like a I think it looks like a little bull's eye. But anyway, you can do the paycheck planning.

And basically, what you're doing with that is you're planning when you get to spend your money. So you've already gone through and said, I'm gonna spend $600 on groceries. I'm gonna spend x amount on rent. You've already done that. But now, with paycheck planning, you're gonna say, but when do I spend it?

Because I have to know, because if he gets paid, at irregular times, and if he gets paid irregular months, you wanna know that the money is there. And so, for you, paycheck planning is gonna be a really big, feature for you. Because at the end of the day, for anybody, even if you're not on every dollar yet, if you're just doing your budget, 4 walls first and then every all the other priorities after that. So for you, it's gonna be rent first. You need to be have your transportation, your utilities, and your food.

And then for you, day care is probably gonna be number 5 on that list. And then as as the month goes on, you pay things based on priority. And so that's kind of just a crash course.

Yeah. And what I would put then, Katie, and his income, because with every dollar, there's multiple lines of, like, different incomes that come in. So for his, I would just I always shoot for lower because I'm on commission too. So I usually shoot lower than what I think, and plan all that out. And then if he gets paid the 3rd week and there's more in that paycheck, then I would plug that into EveryDollar.

I mean, I change our stuff. Like, when I get paid on 15th, I go in and change the income

Yeah.

To exactly what I'm getting paid so I know. And and I would go in and do that. And so if there's more than you were expecting, then you're gonna get more in the green at the top, more dollars there. But then the goal there is to say, okay. There there's some extra money.

So now I know that I'm gonna be able to spend $200 more, and where am I gonna put that? Well, I'm gonna go down and up maybe the the clothing category. I mean, I don't know. You could pick. Right?

That, okay, I'm gonna up that $200, but you kind of plan as you go. And that is the other thing, Katie, about the budget to and for everyone listening, that it is, you know, it it is a moving target in a sense that you get to change it throughout the month. And we change ours, I'd say, pretty consistently. I mean, like, we look and say, okay. Yeah.

We're, like, eating you know, like, this month, for instance, we're eating out more than we did last month. So I ended up lowering our grocery budget a little bit because we have so much going on at night. We have more babysitters that we're doing this month, so I upped that category and lowered others.

Yep.

So, yeah, you can go through throughout the month and change it. And you guys may be doing that more as you know what he's getting paid per month. But what Jade was saying is so right is make sure that the top priority is getting paid regardless of what he's making, that you guys can make sure that you're paying

Mhmm.

You know, for those especially those 4 walls, food, shelter, utilities, and transportation.

And I love what you said, Rachel, about shooting low and really basic basing your budget on the lowest possible amount. Because then when it's higher, it feels like It's better. Yes. It's great. It's like you got a little raise there.

So how

do I have, like, a big high month. We call them the peaks and valleys. You can keep some money in you know, you could do this in a in your emergency fund. You could do this in your checking account. But But keep some buffer Mhmm.

On those really high months because if it is a low month, you can kinda pull that money forward and say, okay. We're gonna use this to make up the gap because it's a lower month. So Perfect. It does take some finagling, but it's it's possible. It'll take about 90 days, Katie, to get it working.

So keep at it. And by February, March, you'll really, really be in the

groove of it. Love it. That's a great call. A lot of people have that question. Alright.

Let's go to Michelle. She's in Honolulu, Hawaii. Oh, I wish I was where you are right now. What's going on, Michelle?

Hi. Thanks for taking my call.

You bet.

My question is, what is the best type of account to

manage our 8 year old son's savings if he wants to use the funds to buy a

car when he turns 16? He earns commissions and divides his money into save, give and spend categories, but we have his save fund specifically set aside for this goal.

Oh, that's great. Good for him. I mean, you I mean, you could do a high yield savings. I mean, you know, under your, account. Do you guys have a high yield savings for you, Michelle?

Just you and your your husband?

Yes. We do. But his is specifically in a just a regular savings with a point 0 2% APY.

Yep. Yeah. So I I mean, we use Ally Bank for our, high yield savings. So we have 2 funds, like, when I open up our profile. You know, so we have 1 that's just, like, strictly our emergency fund.

We don't touch And then another that that we have just for savings. So if we do vacation or something, we're able to pull out of that and we fund that usually once a month too.

Mhmm.

So I would just add, another line item for him and call it his and just put the money in. But I wouldn't do anything I wouldn't do, like, an investment or anything, long term. But a great high yield savings, I think, would be perfect for him.

I think so too. And I know there are products out there that are designed for, like, teaching kids. Like, there's some banks. I have not used them, but I know they're out there. So if you looked deeper into it, if you wanted something that he could see or that had, like, a fun app or something with it, I know they're out there.

Yes. For sure. Yep.

Very good question. Thanks for the call. Hopefully, that helped you out. Do you do is that what you do? Like, if your kids like, it's a holiday season, and I know already we've gotten some money coming for the kids.

What do you do? Do you put it in a separate account, or do you just keep it in a cash envelope? What do you do?

No. We just were talking about this. We need to do better. I'll be honest, Jade. We're we're not very, disciplined with the kids when that stuff happens.

Because I would say for the most part, they don't get money. Uh-huh. They're getting toys, and we started once I just started talking about it, especially with our 9 year old Emilia, there's a point that, like, she wants books. I I think the toy phase is actually kinda starting to fade out.

Really? Okay.

And then you just end up with all this crap anyways of stuff. So I'm like, I don't wanna, like, not do Christmas for them until the grandparent's money. But there is a point with birthdays and all that that she's getting to the age that I think we can start asking and say, hey. I think she'd rather have money and maybe she take half of that and she can spend some of that, but then we need to start formally saving. Because our savings has still been a little bit hodgepodge with the kids and with their money.

Yeah.

It's kinda like, oh, yeah. They just kinda save it up, and then we'll go to Target, and they'll buy something. But start but she I don't know. With our 9 year old, I'm starting to think, okay. It's she's getting to the age that we could start upping the ante and actually doing things a little bit more formal.

But, yeah. What about you guys?

Quick quick hot take, Rachel. How do you feel when, for Christmas, people say, just donate to their 5 29?

No. Don't do that. Do you like do you like I hate it. I hate it. George Campbell would probably love it.

Sorry, George.

Sorry, George. Get a toy for Christmas.

It's Christmas. This is the Ramsey Show.

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You're listening to the Ramsey Show on the Ramsey Network. We're happy to be with you. I'm Jade Warshaw. Next to me is Rachel Cruze. We are taking your calls about your life, your money, and truly your relationships because we know, Rachel, that money touches every single area of our lives.

Honestly, whether we want it to or wanna believe that it does or not, it truly does. And so, if you have a question, call in. We will do our best to get you on the board. But I will say, Rachel, 1 of the things I found when helping people with their money and me helping me with my money is there's a lot of jargon out there, there's a lot of lingo, there's a lot of vocabulary that sometimes we feel, I don't know, just a little silly or maybe even embarrassed to admit that we don't know what it is. Totally.

You know?

Yes. There's parts of money, you guys, that are so it can feel intimidating and overwhelming. And like you said, it's it's like this whole other world of terms and language and all of that and you hear it, but you're like, okay. Do I fully understand and grasp it?

That's right. You can feel like it's for smart people only, but that's not the case. You can understand it too. And so I've noticed that if I wanna ask a question and I don't want people to know that it's from me, I'll say that I'm asking for a friend. Right?

And so, I love this segment here. Asking for a friend, Jade, what are tax withholdings and how do I adjust them? Right? So tax withholding, you probably have noticed on your check that withholdings come out including federal tax withholding, which is basically when your employer takes out an amount of money, out of each paycheck and they're sending it to the government for you. They're prepaying your taxes, basically.

And that number is set on what you tell them they can take out. Okay? So the amount that they're taking out depends on what you earn, and it depends on what you put on your w 4. Okay? So after filing, depending on what you put on your w 4, they're either going to give you a refund.

They're either gonna have you break even and you owe nothing, or in some cases, you end up owing money. Okay? But the goal here is we want you to break even because that means you've done it right. And if you are getting a big tax refund every year, just remember that that means you're withholding too much, and we want you to have that money back in your pocket. Alright.

So how does tax withholding work? Like we said, if you work, you gotta pay the withholding tax. Right, Rachel? Yes.

That's right.

And in certain in certain states, you might even have to pay a separate income tax as well. But when you start a new job, you fill out that w 4 form or maybe if you get married. Right? You have you you fill out a new w 4 form. And on that, that's where you tell your your employer, here's how much tax I want you to take out.

Okay? So the how that that's how that works. So if you're sitting here today and you go, well, Rachel, I got a tax refund last year and it was, I don't know, $1200. What would you tell that person?

Yes. Then I would go on a gesture withholdings, what, 200 a month? Yeah. So that you know, okay. Yeah.

You you had 200 more that was being taken out of your paycheck sitting in Washington that needed to be that they needed to be, so then they're refunding you that. So instead of that all happening, put $200 back in your paycheck, and you can use that to help pay off debt and save up an emergency fund and all of it.

Love that. And, I mean, the truth is we don't wanna lend the government money.

Yes. Well, in a tax refund, it is it's a sneaky way to feel like you got free money too.

Mhmm.

Because this check comes, right, $1200 or whatever, and you're like, well, that's nice. Thank you. You're like, no. No. No.

You should have been having that all year. So it's it's like this, like it's this weird emotional whiplash that it is your money.

Uh-huh.

So go and and change it. But if you need to figure out even how much to withhold, you can even look at last year's taxes That's

right.

And say, okay. Here's how much I paid in taxes divided by 12. Like, that's a that's a pretty simple way. Yep. You could do a mock tax return and a lot of online tax softwares allow you to do this.

But as we talked about earlier, Jade, you're like, it's a pain in the butt. It's a pain in the butt.

I don't like, I mean, there's a reason we get help. Right? Yes. Yes. So Yeah.

I don't wanna do it myself. But, yeah. Just understand that if you're if things aren't looking the way you want every year when you get your tax refund or maybe you're breaking even if you are really good. But if you're not, you have the ability to change that. You can change that w 4 form, you know, you can fill out a revised 1 and you can download them from the IRS website or listen, I would just probably head over to my HR department and say, hey, I've been noticing this.

Yeah. Help me out. Right? That's how that works. Yes.

Alright. If you have any questions, contact a Ramsey Trusted Tax Pro. You could do that at ramseysolutions.com/taxes.

And I'll say this too real quick, Jade. For those of you paying off debt, there's, like, 3 big buckets that you can instantly get some cash back in your paycheck to get this debt snowball going faster. This is 1 of them, adjusting your withholdings if you're getting a big tax return. 1 is pausing retirement. So if you're funding retirement and trying to get out of debt, pause that for a season.

That'll be money back in your paycheck. And then, also, shopping insurances. Yeah. Those are, like, 3 big buckets to find money that you need quickly in your paycheck that can make some really big, big changes for you. So, so this yeah.

The whole withholding thing is very real, especially if you're getting a big tax refund. Make sure to check that. Check that out.

Alright, Rachel. Good stuff. Let's go to the phone lines. We've got Mark. He's in Albany, New York.

You were just there. What's up, Mark?

Thank you for taking my call. I have a hopefully, you can help me, take a a friendly debate between my wife and I and and give us some clarity. I want I'll give you some background. No. No.

It's good. It's good. So we are Ramsey disciples for many, many years, my wife and I. So we have paid off we're both 50 years old. We've paid off our home.

We pay pet cash for cars. We don't owe anybody any debt. Wow.

Great job.

We hope to retire. You know, if we retire at 60, the projection is my 401 ks will be about $1,600,000 and she'll be she's on a pension system, so her income will be about 100 $50,000. So our retirement's looking really good, and we've set ourselves up for success. We got a couple of kids. The college really should be taken care of.

But here is my question. We've been talking about this. Hey.

Real quick.

But I have

to tell you the random people. Real quick. Can I just tell you? That is so good. Like, you guys nailed it.

Thank you.

I I mean, I listen to that. I'm like, that's amazing.

Mhmm. Thank you. So that's so that's the good part. And then there's another good part, but we needed, some guidance from you. So and we've been debating this at the dinner table for months, and I finally said, I'm just gonna call those people that I listen to all the time on the radio.

So about 6 months ago, my uncle who is very close to us passed away and left us, about $1,300,000. The

Holy smokes.

Discussion we're having is, how do we handle that? Me, I'll I'll give you the 2 sides. Me, I say, hey. We've done great with our mutual funds. My 401 k is great.

I know who I work with. We can take that money, put it in there. It'll double in 7 years or, do that. But then my wife on the other side of it grew up very poor and she's much more conservative than I am. And she's like, listen, that's not I don't want to do that.

I'm okay with 50% being invested in mutual funds, but then, you know, maybe we do some bonds and maybe we do a money market account. So basically, what I'm telling you is this is how we're currently living. What is your opinion on what we should do with the money that was left to us?

I mean, if if you guys are let me say it like this. If you're dead set on investing the money in some form or fashion, like you said, whether it's, just normal mutual funds, whether you did bond funds, I would work with a SmartVestor pro to decide the best way to invest that as you get older, and what makes the most sense. But since you called us, like, for me, I'm looking at this money. I'm going, you guys have done so well. This is really gravy on what you guys have already accomplished, and it's a lot of gravy, but it's nice.

And I'm looking at this. I'm like, okay, I can give, save, or spend. Right? Those are the 3 things you can do with money. And I would enact that here.

I would give some of it, I would save some of it, and I would spend it. And that what percentage of that is up to you. But I think this is a great opportunity to enjoy some of this money as well.

Okay. Alright.

Yeah. And I don't know, Mark. I mean, you guys have set yourself up for peace, which is always what we're shooting for, right, when we talk about financial peace to to have some peace in your life. And you're not gonna go I mean, you you really can't make a wrong decision here. Let's just be honest.

Right? I mean, like, you guys are gonna be fine however you do it. So you're looking at the most efficient routes of like, hey. Let's put this money and invest this. It'll double in 7 years.

We're gonna make more. Like, why would we not? And she doesn't have peace about that. She's like, I I don't feel good about that. So there would be a part of me that I think if I were in your shoes, I would probably just invest it.

I'm probably more on your side, Mark, just from a I don't feel like it's risky. I think you guys will be totally fine. But, again, we're fighting for peace here. And because this isn't a black and white issue, because this isn't something that's gonna put you into turmoil or, like, you know, you're you can't mess this up. No.

So part of me would say, yield to your wife some just to create peace in the household. And if she wants to invest 50%, and then you guys take 50% and put it in a high yield savings and say, okay. We'll just maybe live off of the 5% we're getting

off that, like Yeah.

You know, and see it and and and it be liquid, then then that's okay too. So I don't wanna play, like, the, oh, everyone wins

game here.

But no one's really wrong.

Yeah. I would be on your side, Mark, if I personally. But, also, again, fighting for peace in the household is so key. And if that gives her a little bit more peace, I don't know. I I think

you'd be fine if you did that.

I agree. Thanks for the call.

Hey. If you're like me, this time of year feels bananas. Thanksgiving just flies by, and then you blink, and the kids are out of school, family's in town, and somehow there's glitter everywhere. Pure chaos. Let's face it.

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There's no getting around that. But let's be busy enjoying our families instead of stressing out about money. Head over to the App Store and download Every Dollar right now to get started for free.

This is the Ramsay show. Hey, it's the most wonderful time of the year, and 1 of the ways to stay on track with your money is to listen to shows like this that'll help you stay motivated. And the Ramsay network app is the only place you can go to get full episodes of the Ramsay show. So download it for free using the link in the show notes or by searching Ramsey network app in the App Store. It's really, really a great tool.

You can even search specific topics. So if you know, like, I wanna know more about real estate, or I wanna know more about the debt snowball, or I wanna know more about paying off a car and buying a car in cash. You can search those topics and show clips will pop up for you. Or if you just wanna watch the show in real time, you can do that. If you're on the radio, just know that after this hour, the only place that you're going to be able to listen to the 3rd hour is on that Ramsey Network app.

Alright, Rachel. Let's go to the phone lines. We got Adam in Wichita, Kansas. What's up, Adam?

Hey, ladies. How are you doing today?

We're doing good.

That's good. So I had a question about, saving for kids college. We adopted 3 kids a couple years back, and due to the nature of where they were adopted from, they get full university coverage. They have a full ride to any state institution that they wanna go to.

Oh, wow.

They were from. Yes. And we think that's awesome. So we've told them that they're required to go even though they don't wanna go to school now. My question is, my wife and I are are basically on baby step 0.

We're starting to save for our emergency fund. At what point do we do we worry about saving for college knowing they

have a full ride?

Because it doesn't do room and board. It does books and tuition.

Oh, it does not do room and board. Is that what you said?

Correct.

Okay. Yeah. I would, how old are the kids?

13, 12, and 10.

Okay. Great. And how much debt do you guys have?

Accounting student loans, 83,000.

Okay. How much do you guys make a year?

Combined total income, roughly 102,000

Okay. Rough. Okay. So you guys getting out of debt, are you thinking, what, 2 and a half years, 3 years?

I'm thinking I'm a well, I'm a teacher, so I'm applying to start working after school because we just took a big look at our debt and said, okay. That can't work.

Yeah.

So I'm thinking about 2 years.

Okay. That's correct. 2 years

to get everything down as close as we can.

That's perfect.

And that's average. You're right on par.

Yeah. And so the oldest at that point will be 15, and then you guys will save up your emergency funds, which may take, I don't know, another year or so. Yes. So that'll be about 16. So then then you'll you'll have about 2 years then at that point to help save for room and board.

So I would wait until then. I would first prioritize the emergency funds, paying off debt, and then the fully funded emergency fund, and then look at room and board. And that's I mean, I don't but what an incredible thing because while that still will be some money to save, even if you guys only had half of that, you know That's right. The, you know, then that 18 year old at the time could get a part time job, right, to fill in the gaps or what they needed or live somewhere else. So, I would definitely not worry.

And I would give you that same plan even if their college was not paid for. And it would be just a totally different discussion on what they could choose and how they are gonna have to go because it would look so different. So, what a gift that, yeah, you guys will have it I mean, have they'll have their their college paid for. That's huge.

I love that. Oh, what an amazing opportunity. And, you know, we say all the time, it's not you know, baby step 5 is the baby step where you are putting aside for kids college, whether that's trade school or state university. Right? But it's not required that you pay the whole amount.

Right? That's right. The only thing that's really required is that you're having that open conversation and you're letting your kids know the expectation so that you can prepare properly so that there's no debt involved.

Yeah. And and too, Adam, I mean, I would you know, not maybe not at 13 right now, but as they start getting older and, you know, once you start entering high school, college, depending on where you are, you know, people start talking about it. Yeah. And so pull some numbers, you know, when it gets to that point to say, okay. Here because it's gonna differ between college and, you know, different universities throughout Kansas is where you guys are.

So I would pull different numbers from 4 different, you know, schools in the in the area to say, okay. This is how much room and board is here, here and here and here. Mhmm. Realistically, we probably will be able to cover these 3 schools. This one's probably out of our league unless you get a part time job.

Right?

He's Uh-huh. That's right. Having these conversations and looking at actual numbers with them

as well. Very, very, very good. Okay. Let's go take another call. We've got Matt.

He's in Fort Myers, Florida. What's going on, Matt?

Yeah. Hey. How are you guys doing? Thanks for taking my call.

You bet.

Yeah. Hey. So there's a lot of backstory, but to get to cut to the chase, we took out a personal loan, to fix up a house that was damaged from hurricane Ian that came through.

Okay.

And, we didn't have we owned the house, and property outright, so we didn't, have any mortgage on it. Now, we thought that hurricane Ian would be a once in a sort of lifetime storm, and we would never get any flooding, again. And, you know, as the Lord would have it, hurricane Helene came and then, hurricane Milton came. And, those flooded, our home as well.

Mhmm.

And so my question is, the personal loan that we took, the payment for that is very affordable for us, But I I could go pay it off, and, normally, I would just go pay it off right now. But at this point, I'm wondering and and considering just buying a new home altogether that's not anywhere in a flood zone, you know, and whatever else. And I'm thinking that I should, wondering, should I just take, I don't wanna cut into that down payment on a new house if

that's the route we want to go.

So you're saying you would sell this house, take that money, pay off the debt, and buy the house?

Yeah. There there there there there's some extenuating factors. We're not going to sell the house and property because it's kind of a family piece, and it has to stay in the family for the

But if you get hit again with the storm, how does that solve the problem? Because if you're hit again with the storm, you still have to shell out the money to to cover the damage of based on what you're saying.

No. No. So the house that we're in currently, I don't I still have to pay the money. I still have to pay the loan anyway.

Right.

So but it's very affordable. So so but I'm worried about putting more money into the house to fix it up even further.

But don't you have to fix it up for someone to live there eventually? You're not gonna have a house vacant.

No. Not not not not necessarily. We may. We may if if if the storm if the storm pattern continues. I mean, we've flooded, just to give you some context.

I we no. I I think we get it. But the point the point is, let's say another storm comes next October or next September. Right? You don't live in the house anymore.

It's been sitting vacant, and it has water damage. You're saying you would just leave it to rot?

Not to rot. I mean, but we would we would I wouldn't invest more money. I I'm debating whether I want to invest more money into a home that is continually flooding.

Why are you yeah. Why what's the family what's the family dynamic? Why can't you just sell?

Yeah. So

because my in laws my in laws have essentially given the inheritance to their daughter part of their inheritance to their daughter, right, upfront.

Which is the house.

So that we can which is the house and property so that we can live there.

So why don't you sell it and you take the equity of it, and that's her inheritance. This is her gift. Right?

Because part of the because part of the part of the agreement to the early gifting was that we wouldn't sell it.

Why why why do they care? And since they're alive, can't you go to them and say, hey, thank you for the gift. Is there a way we can rework this? Because where this house is, it's costing us a lot of money. It's it's not feeling like a blessing.

It's feeling like a burden. They're still here with you, so can you have that conversation?

That's a conversation that would would, you know, could be had, but hasn't been had yet.

Okay. So I would do that, Matt. So this is where the entanglement of parents and gifts and early inheritances and all of it. This is where it starts

to play

out because what happens, Matt, is you guys as a family unit can't make a decision without her parents involved. And so, like, that's that that that that that string needs to be cut. They either need to give you the house as the early inheritance and you guys then as a family, as adults, get to decide what you do with that or we're not we're we're not playing the game anymore.

Yeah. I can no. I I think I think maybe there's some confusion whether we we still have a loan on you're saying give it to us entirely and put it so that we can sell it if we want.

Whatever whatever you decide between you and your parents, the point is you've gotta get to the point to where if you would like to walk away from this property, you can. You shouldn't have to be clung to it because of something they said. Right now, it's costing you too much money. You and your wife have decided we don't wanna live there anymore and so they need to let you out of it. And if you wanna sell it and keep the proceeds, so be it.

But or if they say no, we're taking the property back and we're gonna keep it, then so be it. But either way, you guys need to have final say and control over your life and your money.

What up? What up? It's doctor John DeLoney from the doctor John DeLoney show with some amazing news. The latest episode of United States of Anxiety is available right now exclusively on the Ramsey Network app. This docuseries follows real people from my show as they embark on a 90 day journey to transform their lives, and I personally walk alongside them every step of the way.

Okay. Now, here's a sneak peek of what the new episode is all about, and don't forget to click the link in the show notes to download the app. What's up, Kelsey?

So I've lived with crippling anxiety for as long as I can remember. How do I stop it from constantly coming up in different areas of my life?

What does crippling anxiety mean? Paint me a picture of that. Alright. So you ready to jump in?

I'm ready to jump in.

So we're gonna check-in with Kelsey 30 days, 60 days, 90 days.

I cannot even function because I'm just crying. My mom left us when I was 4. I truly felt like for a

while I had no family.

She's experiencing things that really hurt a long time ago. Tell me about this boy.

He triggered me a lot.

Scared of losing Paul, scared of doing the wrong thing, scared of not being enough.

It just feels like it would be exhausting to be Kelsey.

It

is. Whenever somebody's playing whack a mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay.

How do

I get my inner child out of this relationship? Because I feel like she's running the show.

1 of 2 people that's supposed to never leave took off.

How is this

how is this burden?

A burden. That's right. To the 1 person who should carry it. All of it. Did you ever tell that little girl that it wasn't her fault?

I don't know what to do.

Do you either have to choose to let this guy love you, or you gotta choose to let this guy go?