Break The Cycle And Build Wealth

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start budgeting for free today. [MUSIC] >> Normal is broken, common sense is weird. So we're here to help you transform your life. >> From the Ramsey Network in the Fair Wins

Credit Union Studio, this is the Ramsey Show. I'm George Campbell joined by Jade Warshaw this hour, open phones at Triple 8-825-5225.

“Marie kicks us off in Washington, D.C., what's going on Marie?”

>> Hello, I'm calling with what I hope it's a very simple ask and recommendation from you guys, I have a boy from the four years. And he simply refuses to talk to me about his get or his financial situation.

How do I convince him to trust me enough to discuss with me?

>> It's been four years, I don't know if you can. >> I don't think there's a simple answer here other than get to the root of what's going on here. Why is he scared, is there trust issues, does he have baggage? What do you think is behind it based on what you know about him?

>> So I talk to him the other day about it. Just so I can understand why. >> Yeah, maybe he doesn't and he reminded me and I didn't remember this. That I loaned him like $4,000 a few years ago when he was purchasing his house. And he said I treated it like a bank transaction.

And I was really stringent upon payback payments that he would have to make me. >> So that, okay, that's good. That means that he, that means there is a reason. And so there's likely some shame there. If he's thinking about that often thinking, man, she's strict.

Like, she's serious about her money. He's probably afraid that if he reveals what's going on with his money, that you'll be judging him and you'll-- >> Or that you'll leave him a bank transaction. If he's not, you know, cut out for you.

If he's not financially responsible enough for you. >> And by the way, is that true? >> Well, it will background on me and him, we're both retired military. He's retired Marine, I'm retired Army. We both have good six-figure jobs, but on my side, I'm going to pay off my house in four years.

I'm going to fully retire in five. But he's not at that level because, you know, he's divorced. He has kids in college.

“So I think because he sees how financially secure I am on my end.”

And really, I budget down to the dime, right? >> Yeah. >> So how strict I am with my budget that I'll expect him to be that way, and not understand why he had the debt he had. >> Well, is that true, is my question.

Now, it's fair for you to say, I have a set of expectations. Like, yeah, I expect us to be a little bit more intentional, or a lot a bit more intentional. I expect certain things, but the question comes in, will you be judging him? Will your tone be judgmental?

Will he, like, how will, if he tonight says, you know what? Murray, let's talk, and he divulges a lot of things that truly are shocking to you. How will you react? Because that, if you can hold up the mirror and get a sense of who you really are, and what you do know what I'm saying and kind of do a little bit of self-analysis there,

that can help your next conversation with him and say, you know what, I can really see how you would be that way. And maybe set him up and say, listen, I can't guarantee that I won't maybe have a reaction. Are you still willing to engage in this with me? And just, you guys really talk like emotionally aware people.

>> Yeah, I do think I would be judging. I don't need to say that, but that's honest. >> Yeah, my face as your face is going to show it immediately, and I was like, I want to be able to be compassionate, understand your situation, but I'm going to have to get that initial,

how I feel out so we can develop a plan to get to assist him and to getting better. >> Yeah, to help his finances.

“>> I think you, I think you being able to come into that,”

and basically validate what he's already feeling is a really good first start.

I also think more than, I mean, I don't know George, but the bigger thing is, why? Like, what's this all headed towards? Because you've been dating for four years. Are you thinking that you're going to get married? Is this the next step before the proposal? Like, why, suddenly, is all of this a big deal, is my biggest question?

>> So, we want to move in together and buy a house together. I'm a divorcey also, so I'm not sure on the marriage part. So, that's a scary question for me, but I do believe we can co-habitate,

That one person is putting in more than the other. I want us to go and go in with everything being equal, and that we combine our households and be able to go that part of our life. >> Are we told in that? >> Yeah, she knows. We've looked at houses, and I'm like,

"When I pay out my house, I'll take everything I've put down in this house. The 700,000, I pay on this house. I'll put it on our new house." >> There she is. If you do this through co-habitation, it's going to feel like he's a roommate and you've put the bill. And I would not recommend co-habitation before marriage, for a thousand reasons,

but especially in your case, it's going to feel like there's a power imbalance. >> And I don't want that for him. >> So, what's going to happen over time? I'll tell you what happened 10 years from now. We fast forward. You're going to resent him, and he's going to feel a lot of shame. >> Yeah.

>> And it's never going to move forward. And so, financial transparency is emotional transparency.

You can't have one without the other. And so, anything he's hiding now is just going to be magnified in marriage, or if you co-habitate.

“And so, I think you need a line of the values and tell him straight up,”

I don't expect you to have the same financial brain and personality I do. But I do expect that we're a line on financial values if we're going to combine our lives in any way, shape, or form. >> Agreed. >> That's not high standards. That's the baseline. >> Agreed.

I would caution you, Marie, and again, you might have a different outlook on this, and I can keep space for that. However, I've done this show for a little bit of time, and I see this over and over. If you don't set fair expectations going forward, you're going to have a set of unrealistic expectations. And what I mean by that is, you're setting yourself up in a scenario where you're viewing it as full commitment, but it's not really full commitment.

And so, as long as that gray area exists, which is, hey, I have this expectation of full commitment from you, even though there's truly not a full commitment because we're not married. You're over here holding this space for what if by not marrying him, but then you have this expectation of, I expect to be able to have these conversations, I expect you to do this, and all of those things honestly are the things that take place in a fully committed relationship. So, because of that,

it's always going to feel a little embalanced. He's probably always going to be wondering, like,

"Is this enough or do I need to do more? Does this count or does this not count?" Right? Does it count for me to be able to go out and spend this money or not tell her or is that in some way wrong? >> Is it one of those disappoints? >> Yeah. >> I think at the moment, I don't know him. I've never talked to him, but here's my guess. If he was to be fully known, you wouldn't love him the way you do now.

>> That's his fear. And he's been hurt. I mean, you both have been divorced.

“You both have a lot of emotional baggage you're carrying into this thing, and so you need to understand”

what was money like in his past relationship? Was that a part of why it didn't work out? But here's what I do now, and you can put this on your mirror, Marie. You can't build a future with someone who's hiding their present. It's impossible. And so you can't ignore this. This is a giant red flag, and I hope that you guys can resolve this, you get the values, you do remarry, you do find love again. This would be the best hallmark movie of all time if it worked out.

So I'm rooting for you guys to make this thing work, but he can't hide this anymore. It's not going to help the relationship move forward. [MUSIC]

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“>> Annie is in Boston up next. What's going on, Annie?”

>> Hi, how are you, guys? >> We're doing great. How can we help today?

>> Yeah, got to help. So I will first out to shout out of French really. I've been encouraging

me to listen to you guys for a few months now, and she knows I've been in a tight financial situation. I've just been too scared to take the first step, but with her encouragement, I downloaded every dollar this week, and I'm just having first door dashed up on my lunch break to try and do anything. >> That's awesome. How did she convince you of curious? Because a lot of people out there who want to convince their friend, and it's awkward, and they don't want to pry. How did she do this?

>> So she's been, for one, it's a huge cheerleader in every aspect of my life, but I actually suffered, I suffered a concession a car accident last year. I have an attorney, and I'm supposed to be getting my settlement in about a month or two, and she's really been pushing me to figure out how I'm going to utilize that money to best kind of clear out my financial situation, because I've been in a significant amount of debt for a couple of years now,

living paycheck to paycheck on a $78,000 salary. >> Wow, how much debt have you, do you write now, I have $41,000 in some personal loans and credit card debt. >> Okay. And do you know, sorry, I also have a car accident, I have a car accident that 7,000, not 7,000, this 7,000 is remaining on the car. >> Got it. And when this settlement comes,

“settlement comes in, do you know how much it's going to be or do you have a ballpark?”

>> I have a ballpark, it'll be between $33,000 and $40,000. >> Okay. So tell us a little bit about what caused you to accumulate, $40,000, $48,000 of debt over the course of however many years? >> Honestly, it's down to four financial planning and no financial education from my parents, honestly. I had to take the out credit cards and not really realizing how quickly that would add up.

I've also got just some personal benefits required me to make some kind of ridiculous purchases over the last year for good reasons, but things that I couldn't finance, living paycheck to paycheck, while paying off other debts. I don't like excuses for it, it's been poor planning. And just not having a good hand on my money being impulsive, kind of relying on that endorsement of hitting, you know, some may on a purchase. So my question really is,

I'm about to get out of the majority of my debt. I want to make sure that I don't find myself in this position again in two years. What can I do to shift my mindset to make sure that this sticks and once I count all my debt or what I can with this settlement, I have a plan to count the rest, and that you know, Dashing now will help me accelerate that. I just want to make sure, like I said, I don't find myself in this position again in a couple of years. So how can I shift

my mindset? >> Yeah, well, I love that you're thinking ahead like that, even knowing that it could be a potential issue in understanding that anytime you get a large sum of money, George, or even if you have a large income, money is not, it can't solve bad habits, right? You'll just burn through it, you'll blow through it, and I'm glad that you're seeing that. I can tell you for me, my husband, and I paid off $460,000 of debt over the course of seven and a half years. And the biggest thing

“that I think allowed us to continue that lifestyle, even to this day, is over that time you learn a lot,”

right? You actually learn why our credit cards bet. You actually learn why is it better to purchase cars and cash from now on? Not just, I don't like the feeling of debt, I'm paying it off. That won't allow it to stick. And so what you're doing now, I would say is let's bullet point that as education. So getting the education around the why behind the what, basically, why am I paying off the debt? Why are credit cards bad? Why do car loans suck? You know, why am I avoiding student loans?

That is so powerful. It's the same thing of like, you know, when you learn, when you learn what

goes into McDonald's fries, it makes you not want to go to the drive-thru and get McDonald's friends even more because you're like, oh, God, that really is really bad, right? So keep listening to the show. And then the other part of that that I would say, honestly, it's very underrated, but the community of being around people who are doing the same things you're doing and kind of have the same mindset. It makes it a lot easier because now you're not the crazy one. You know,

when you're, you're buddy. You've been so great for that. Yeah, your buddy who puts you on to Ramsey, that's the type of folks you want to be around at this point. So there's an emotional side of this and Jade's been hitting on that. There's a pragmatic side. And I love this delony quote,

he always says, don't forget to remember. And so think about the end of that sentence. Don't

life was when you were in crippling debt and you were paycheck to paycheck. And so I think that's part of the emotional side of going, I worked my butt off. I don't want to ever be in that situation again. And then there's the pragmatic side, which is, hey, let's have an emergency fund. That's

our never going to debt. Again, insurance plan. If we have three to six months set aside because

what reason would you really have to go into debt? If you had 20 grand laying around. And then on top of that, doing a monthly budget, just paying attention to that amazing $78,000 income, going, hey, I'm going to make a plan for this before a marketing company has a plan for it before this Instagram ad has a plan for it. You've got to get ahead of those plans. And so you can create thinking funds. So maintenance and repairs don't act like everything's a surprise in your life.

“That's how most people go through life. Just reactive. They call the show and say, well, Jay,”

I didn't have a choice. I had to. Well, just happen. I didn't know I was going to ever need new tires. And that's how broke people stay broke. So being proactive, staying ahead of it, get the emergency fund in place when you're at a debt. You got to stay gazelle and tense through that phase. Once you get out of debt, let's build up three to six months of expenses, put away. And then what I do is I add friction to my life to make it more difficult to do things that I know are bad for me. Right?

If you have donuts in the pantry, you're probably going to eat the donuts. So what I do financially, freezer credit with all three credit bureaus, so that no one, including you, can open debt in your name. So add some layers of friction. Remove your card info from sites that are tempting you. You know, those are some pragmatic things you can do on top of the emotional. So I think the emotional side in mindset is more important. But I do. I'm a practical guy. So I like to get

tactical with the things you can do. And you already have every dollar. So you know making a plan for your money is the number one way to get control of it and not go back into debt. But then also, you've changed your identity. And you're a different antie than you were two years ago, aren't you? Yeah, I am. You're the kind of person who doesn't want to owe people money. You're the kind of person who doesn't buy things she can't afford even if it's shiny and she had a hard week at work.

Those are the kinds of people who build wealth. They're just so focused and they know who they are

“and nothing, nobody's going to change that. That's who you need to become in order to never go”

back into debt again. Yeah, and I'm going to send you a copy of my book. What no one tells you about money because it really talks about all the things that George and I just laid out for you. And I think it's going to just help you get a better handle on it. And honestly, I was talking to, I don't remember who I was talking to the other day, George. But I was saying the folks who really, really succeed on the baby steps and that it really clicks for them are the people who understand that it's not just

about money. Like the principles that we teach that behavior of being intentional and paying

attention like you were saying, George, if you look at it long enough, you go away to second.

This is really the equation that causes me to be successful in really any area of life. Yeah. Whether it's you're trying to get in shape, you're trying to affect your diet, you're trying to be, you know, have a more intentional relationship with your loved ones. It's all the same thing. It's about being intentional. It's about understanding how to set yourself up for success. It's about understanding like the cues that trigger you to do the wrong behaviors versus the

things that trigger you to do the right behavior is all the same. And once you get that, that's when it's like no one can stop you. It becomes part of who you are and how you view the world. Oh, he cares. It's okay. You're so motivating. I love this. We're happy to do it. And thank you so much for the call. I am asking one last question. Hit us. Once I have some more margin available in my budget, I would love to invest in some more Ramsey solutions like opportunities like financial

P.T. University. At what point does I become a smart opportunity versus like when should I

try and like knock it all at that first? Like what? Ooh, what comes first? I love that question.

All right, there's certain things that is like immediately. You know, in my opinion, like should I wait, tell them in shape to get a personal trainer? Yeah. Well, you're too late. You've already done it. And so it's worth the investment in your future. Now, lucky for you, Annie, since we like you so much, we're just going to give you financial peace and diversity. So you don't have to pay for it. But it would have been worth the investment in baby step two. Think about it. If that

gets you at it, if 80 bucks gets you out of debt forever and causes you to build wealth and become a multimillionaire. Was it worth the 80 bucks? Yes, ma'am. 100 times over. So I love it, Annie. That's such a great question. We're so pumped for you to become debt free real soon. And Jay's right, at the root of the entire plan is just intentionality, delay gratification, discipline. Live on less than you make,

“burn more calories than you take in. That's how to lose weight. It's how to get out of debt.”

And it's a principle that will carry you very, very far in life. Thanks for the call. Hang on line. We'll get you those resources. If you're still overpaying on your phone bill every month, here's an idea. Stop it. That's money.

to boost mobile. And you can unlock savings up to $600 a year compared to the big name carriers

with no contracts and no price hikes. Bring your phone, keep your number and pay just $25 a month forever on their unlimited plan. Go to boostmobile.com/ramsy and make the switch today. Based on average annual payment of AT&T, Verizon and T mobile customers compared to 12 months on the boostmobile unlimited plan as of January 26. See website for full details. Brandy is in Grand Rapids up next. What's going on, Brandy? Welcome to the Ramsy Show.

Hi. Thank you so much for taking my call. It is an honor.

“Absolutely. Honor for us too. What's going on with you today?”

So, I am in, it's kind of like an interesting predicament. So, I moved from a larger city, you know, so obviously like resources opportunities, and I moved to a more, not even more a significant, more rural and secluded area a couple of years ago to live with my partner and because she owns a home, whereas I was living in a bigger city, you're paying a lot in rent, and we wanted to build our life together. So, instead of me doing all that money in rent,

I moved away from these resources away from these opportunities. My work from home and my money was supposed to go to like, you know, renovating our home and starting, you know,

investing in our life together. And I know if Dave was here, he would say that my first mistake

was doing this before there was a ring on my finger. And I don't necessarily know where the hour is because it's his home. Right. Absolutely. And that's absolutely true. But I, I want to invest in, in a life with him and in his daughter. Okay. And there's more, it's more that, well, so that's the presumption I've been under, you know, as, as he moved me away from my life and I made the sacrifice. Oh, hold on, roll it back,

run it back. He moved you. Yeah, because he didn't move you, you chose to move. Did he kidnap you put you in a trunk? And because if so, we need to call the police. No, you're totally right. Okay. Okay. We're being, we're being strong on it. But it's so important that you do own your part of this as you, as you, as you untangled this because it'll just help you have those fair conversations with him when the time comes for you to talk about all of this. No, you're completely

right. Cool. Cool. So you're kind of trying to, you're thinking ahead, going, okay. I moved out

“here because I did see a future. And now what, now what's happening? What's your question?”

Um, so a couple years ago, and fall on of 2024, my car broke down. And we, we tried to repair and he's very handy. But it was just a very crappy car. It was beyond repair, unfortunately, to do our, even beyond our best efforts. So we, we just wrapped it. And I've tried very hard to save, you know, but I, even the job that I worked, I make 37,000 a year doing this job. Pay most of the expenses here because he's a semi-truck driver. He's gone almost all week. He's

rarely ever home. So we decided that it was fair that I made, I mean, I think most of the expenses here. He doesn't make money when he's gone driving the truck. He doesn't make money. That doesn't make sense that just because you're home, you pay it. Are you saying, like, physically, I'm the one

who puts the check in the mail or are you saying, like, financially, you cover 70 percent of all expenses.

So he pays for the packaging, the property taxes. I pay for the, the internet here. I pay for the electricity here. How does that break out? Like, how does that break out percentage-wise? Is it like

“50/50 or is it like 60/40? Are you paying 300 bucks a month and he pays 1,500?”

Yeah, that's, yeah, he pays significantly more money each month than I do because the mortgage is a lot more than I pay each month or so. And that's essentially your rent because you're not really paying rent. Right. So you're saying you pay a greater percentage of your money than he does. Is that what you're saying? Because you made it seem like you were doing more.

you're covering 10 or 20 percent. No. Correct. Yeah, yep. And then I cover, I cover the groceries in the

“home. I cover like the household essentials and stuff that we need any times. It's like anything”

that we use in the home. My cover. Okay. So where, tell us where the problem is. Tell us where the

rub is. So my thing is, is that I, I do a lot to support the home, especially him and his daughter. And the, the issue is that I don't make very much, I don't make enough money to really save a lot. And so I take that back. I do make enough money to save. There have been setbacks. I, like, I got an unexpected ticket from a beach in the next town over because apparently we went on a red flag day. And we didn't know. But this is normal life. This is life. Tell us where the problem is.

So the problem is, is I have, I haven't had a car in all this time. And he puts an immense amount of pressure on me for not having a car. And does not, like, doesn't want to help me get there. And it's fine. That he doesn't want to help me get there. But the problem is, is like, I don't know why I

came down here to do it by myself because of the reason I came here, because I was under the

impression that I was making the sacrifices to be here in order for us to do things together. Yeah. Like, I stepped away from an area where I had opportunities to make more money. Brandy, I think there's a hard truth alone. I think you have a lot of assumptions. You had a lot of unfair expectations. And now you have a lot of resentment toward this guy. And you guys aren't even married. He owes you nothing. I mean, he could break up with you today.

“Right. And I absolutely know. And I think you need to move back home.”

Sure. And that's what I've been thinking about, too. And the thing is, is it wasn't assumptions. These were conversations that were bad. Right. Right. And I believe that I believe you guys probably spoke about it. And it sounded really good for both of you. I mean, you're not.

It had to have made sense in your mind for you to move out there. But the truth is, he doesn't have

the motivation to hold up that into the bargain, because why does he need to? He's got everything he wants. He's got a woman at home that's taking care of his kid. He, you know, you guys have whatever relationship that you have, you know, romantically. And for him, it's like, why? Well, like, this seems pretty good. Like, it's pretty good for him. And I just, to me, and he's under no obligation to provide for his girlfriend financially. Yeah.

Now, if he wanted to, that's his prerogative. But he clearly doesn't want to. Now, can I say something that you might not like? But this is, take it or leave it. This is just me trying to be, you know, your buddy us, us having lunch together. I don't know. But there might be part of this. And you can, you just shoot me straight. There might be part of this that, because there's two sides every story. He might be

experiencing you in a way that goes, you know, this girl, like, she's kind of, like, left her, her whole life. And she's kind of following me. And she's kind of, I just want to see, can she, will she do anything for herself? Like, she left her job to do this. I want to see, like, maybe he's having this side where he's like, I want to see what she's going to do. Is she going to pursue a job that's more than $37,000? Is she going to, maybe he has a set of

expectations that he's waiting to see if you'll do. I don't know if I'm right. I'm not trying to make him the bad guy or you, the bad guy. I'm just trying to see it from both sides. Yeah. All right. We, we, well, we have conversations about this, like, frequently, because I, well, and that's the thing, it's, I lived in this big larger area. I was actively pursuing

“career opportunities, like actively furthering my career. And sacrifice, like, that's what I mean,”

when I, I made sacrifices, huge sacrifices to be here, because I thought that we were, you know, we were going to be supporting each other. Like, that's what I mean, like, you know. And to be fair, that's, that's an initial sacrifice. And I hear you on that. I think you're exactly, that is a huge sacrifice. My question is, do you have to continue to live like that or can you go, okay, I sacrifice my big job and all this. I'm here now. Do I have to stay like this or what is it that

I can do to make the best of this opportunity or have you truly already exhausted everything and you've made the best of everything that you can? Because if that's the case, then George is right. It's like, if that's not what you want out of your life, yeah, you got to move it on. Mm-hmm. It's like, when I'm like, I'm not even like, I think to be provided with, like, a nice vehicle. I'm like, I'm just like a way to get from, like, A to B.

I'll be honest with you. I'll be honest with you. I'll be, I'm going to be dead honest with you.

for either of you, because then you'll be reliant on him. I really do think that you need to go out and make this happen. And if you don't feel like you can be your best self in that environment,

“you need to move on and do what's best for you. You've got a lot of resentment build up brandy,”

and I don't know if we can pop that bubble and diffuse it all. I think you just need to reverse course on this plan. [MUSIC] Statistic 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 going to 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 good punch. Oh, you're telling me, 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 going to 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 miss this up, or she's concerned about how she's going to eat tomorrow. That's exactly the two options. And turn your dad gum family. Turn her, my life insurance can replace income path. Dad's cover funeral expenses. So your family can actually

have the opportunity to just be sad. Yeah, to just miss you. That's exactly what it's supposed to be. It's saying I love you to your family. Turn life insurance. Jeff Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years that the only people I'd trust go to zander.com or call 800 356 42 82 tax season is upon us and if you want to get some free checklist some guides that I hope you've filed go to RamseySolutions.com/taxes.

Beth is in New York City up next. Beth, welcome to the Ramsey Show.

Hi, thanks so much for taking my call. First off, so a sister and my church found me the money

makeover book and the workbook and a download app. So I'm ready to take responsibility and make changes to my life. Yeah, it's all good stuff. So I just have one problem. So as I'm going through my numbers and I'm literally in the workbook writing like I'm the problem when it comes to self-employment tax. So I have to put aside money every month for self-employment tax and I can make quarterly or yearly payments. Right? Yes. So I'm finding myself I did pretty good last year but what happened

was is something comes up or if anything I go into that into that count which is part of my bank account. I put it in a savings and I use it as I'm gonna get paid the next month and then I put the money back. Oh, I'm not being so strict. So you're dipping into your tax savings and using it and then you don't have enough to pay the taxes. Right. But like I said, I pay for this year. I filed everything with a good but I had to, I've been through this back and forth for three months.

I do so well. I'm strict. What how can I put this money aside and not even do you get it? As it's not even because my paycheck comes in and then like I automatically automatic have the transfer from my checking to a savings account. But it's fair. I see it. Because it's connected.

Okay. Well, hey, the solution is simple. You put the cookie jar high enough that you can't

reach it without a really tall ladder that you gotta go get from a neighbor's house. You know what

“I mean? Yeah. So that's what I would do personally. I would go, you know, you can sign up for”

our fair ones, high yield savings account, fair ones.org/RAMSI and it's a different bank than you have now and then send the tax money over there and pay the taxes out of that account. It makes sure it doesn't have a debit card associated with it. That's what we used to do. We would send it to a savings account that didn't have a debit card attached to it and because it was a separate bank in an R case, it was an online bank. You couldn't just get it. It would take like three days

you could get that money. Go through a few hoops just to access it. And so that's what I would now we need to fix the root problem, which is you needing to dip into savings to cover these expenses. But in the meantime, I still would protect myself from myself. Yeah, what's happening in your month to month that this is constantly being a thing. Because I'm guessing this is like

“a decent amount of money. I mean, it's probably a couple of thousand bucks, right?”

So I put aside now starting the first year of my income. So I've asked to put aside six hundred.

a month budget problem of around $500. Yeah, so I'm a single mom and I do live months and months got something also that I realized and accepted while reading the book. I'm not done yet. And also, you know, the thing thing goes with my emergency money. I put the money aside. I do good for a month or two or three and then something comes up after digging. What are the types of things that come up? Because what I want to determine is this really a, I need more income to cover the things

that I really need that I'm forgetting to budget for or is it a thing that, hey, these kind of

frivolous things pop up and I just don't say no to them, which one is it? So it's that I have to basically

be more strict with my money. So the app helped me when I put in the numbers. I'm like, wow, I really do have two more money left over than I thought, right? I spend too much money and groceries. Okay. Also things come up like, I sign up, I sign up for soccer, which I can, I cannot not do that. I don't want to go away. Something from me left is because Mama is on income. I can see that. So there you go. Yeah. So I went into my self-employment tax and I paid and I took out $550, right?

Right. So we need to find something else. We need to find another category. If you're saying, hey, soccer is the one thing, I'm just not going to budget on. We need to find another category or multiple categories that you can pull this money from. Or we need to go make more money. Or more money. I can be it, too. But think about it this way. If you work for someone else,

“like an employer, that money would have never touched your account. So you need to picture”

this like untouchable money that is no longer yours because it's not. It is Uncle Sam's. Yeah. And if you think about it that way, then you're not going to be tempted to touch it. Think about it like you're illegally accessing this money because it's the governments. Right. And if I kind of wish that I wouldn't even get that money with the people. Well, that's what I'm wondering. Can you do a direct, let's say a direct deposit of

whatever the 500 bucks. I'll say that's 20 percent. Yeah. No, I have to make, I have to make those payments online myself through the EF key, whatever that was. Right. But when you do the EF payments, I'm saying the direct, the pauses from your, from how you get paid over straight to that account.

So it actually never touches your checking account. So this is my big question. Where should I put

that money so that I don't see it? And why can't you, why can't you directly, why can't you directly put it pay it to EF TPS and just, do it, do it monthly instead of stacking it up for the quarter.

“Because the amount is still going to be the same. I don't think it's a win. I think that it”

is checking on that because it's going to, when you go on that site, it's going to ask you to select what, what quarter, right, for Q1, Q2. And as long as you're selecting, hey, this is for Q1 and you're paying in those taxes, there's no real benefit to waiting for the quarter other than the fact that it typically is a quarterly thing. You can check my information on that. But I remember doing that. I used to handle that for Sam and I's business. And I

would just, when the money came because I was like, you, I was like, I don't even want to deal with this. I would just go in and pay it directly. And it just made managing the books easier. And you said, you know, which account, I was talking about setting up a whole different bank account. And as an example, FairWins has a great one. I hired savings account. It's got an account number, a routing number. And so you can set that all up. And again, that's FairWins.org/Ramsi to get that

smart bundle. Has a no fee checking and high old savings along with it. So check that out. I hope that helps as a band aid. But again, we need to get to the root problems. You're not under water each month.

Yeah. So George, let's for a second talk about budgeting basics because this is something that,

you know, most people is like, hey, we know what it is. But I'm sure there's plenty of people who don't. When we talk about budgeting all the time, it's a very simple equation. We're trying to put our income down. We're trying to subtract all of our expenses. And what you hope to have at the end of that is margin, right? We hope that we can find a number that's in the positive that we can use to go towards whatever your, your, you know, goals are whatever baby step you're on. If for some reason,

“you have not done a budget. You need to do that today because what you're going to find is you're”

either going to have a number in the red. That is, oh my gosh, I'm over budget. No wonder I've been using a credit card. No wonder I've been paying for my savings. Or you're going to have, you're going to surprise yourself and you're going to go away the second. If I actually have any bit of discipline here, I could have some real cash at my disposal at the end of every month. And so I just think George, a lot of people go through and it's just kind of a guessing game of like,

uh, I'll do a little here a little there. And if I go over, it's okay. I'll just just buy credit card. I remember one girl. She said, she said, I don't look at my checking account because I don't need that negative energy in my life. Oh, wow. That is the most hilarious form of denial ever. And so a budget, all it does is reveal. It's not going to control you. You control the budget, but it's going to reveal where your money is going. Once you see all of your transactions,

Like, I make good money. I can actually solve this problem with the money I'm making right now, right? But until you pay attention to realize where those money leaks are and where you can do better.

“And honestly, it gets fun at a little bit addictive once you realize what else can I cut down on?”

Yes, because you don't need to spend that much money on a cell phone plan. For spending 120 bucks and you go down to 25 bucks, you switch to boost small, well, it's like, great. You just freed up a hundred bucks a month. I also think part of that is, there's an assumption that I'm going to dislike this. There's an assumption that, you know, when we think about a budget, we think about, we picture

someone telling us no, like a big voice out of the sky like, no, you can't have that. You can't spend. When really, when you start to do a budget for the first time, you start to realize actually none of that's true. I'm just really in control, which that's a great feeling to feel like I'm in control of everything. Actually, no one tells me what to do. I'm just deciding this and I have like, power over this. It's a very empowering feeling and I would challenge the person who has actually

never actually tried budgeting, but has a bunch of like emotions or thoughts or opinions around it.

I'm like, have you actually even tried it? You know what it feels like? It's, if you don't do a budget, you're like in the passenger seat of a vehicle grabbing the O-crap bar. That's what I call it. I don't know the official name. When you're bumping into a pool, oh gosh, this person is a terrible driver. I'm like, yeah, because no one's in the driver seat. Wow. It's just vibes. And so as soon as you get in the driver seat, you go, oh, I can avoid that pothole if I just pay attention.

But you'd rather be in the passenger seat doomschooling Instagram holding the O-crap bar.

“And so that's what a budget does. And if you want to check out the one that we've got,”

I think it's the best one out there on the market. It's called every dollar. You can jump on every dollar dot com, download it in the app store, and start for free today.

It really will give you an amazing sense of control.

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Well, and right now, CHM's offering new members a 50% credit towards their first month of

membership. Get started at CHMministries.org/budget and use promo code Ramsey. That CHMministries.org/budget and promo code Ramsey. Welcome back to the Ramsey Show and the Fair Wins Credit Union Studio. I'm George Campbell joined by Jade Warshaw, and it's a free call at Triple A8255-225. If you need some advice, some help, just the right next step for where you feel stuck. We will try our best to help you get there.

Emily is in Austin, Texas, up next. Emily, welcome to the show. Hello. Hey, how go we help? So, I have a question. Me and my husband live a debt free life. We're currently trying to have a family and we're not rich by any means that we're able to live the needs are means that save them each month. My question is, my mother is almost 73. She has nothing to say for retirement and we have her set up on for a Medicaid qualifying

trust and the event that she has to go into nursing homes. She can get the care that she needs. She frequently drops hints that she would love to move in with us. And for various reasons,

“that's not an option. My question is, what is the best way to kind of have and maintain that boundary”

and also help her that she needs? I feel like I haven't gotten anywhere when I've had to try to have frank conversation with her about where she stands financially, but I also don't want to go into a single. And I love that you know that, that that's not even an option. It's very tough to navigate. And I can tell you this, there is, if you have in your mind,

that makes sense. It's just likely not going to be like that because if she's dropping hints,

“it's because that's what she wants. And we're saying something completely contrary to that.”

And I think the cleanest way to do this is to kind of have written down what you want to say and to make sure that you don't swore away from that, to make sure that her reactions don't make you go in a different direction. And you just talk in a very clean, and I'm not saying

be robotic, but very clean. Mom, I've talked to my husband. Here's what we've decided. Like being

very clear, not, we were thinking that, or we were hoping that, no, here's what we've decided. We have a Medicaid trust here for you. That's what's going to kick in when this happens. In the meantime, you will stay, you know, you will live XYZ. Like, do you see what I'm saying? You're saying what will happen? And then, at the end of that, that's it. And then, what you can do, and that's something I've done, I've said, you know, I'm also going

to send this to you so that you can look back on it and remember what we talked about. And then I'll send them the points and attacks or send it, air drop the file just so that it's very clean. And what it portrays is that, I've given this a lot of thought. It portrays that I don't plan on changing my mind because I'm giving you the documentation of it so that you can look back on that instead of continuing to text me the same question over and over again. Right. So that's the

way I would handle it. And I'm just letting you know if you can be polite but very clean and just hope for

hope for the best, basically. We sit around here to be unclear, to be unkind. And so it's all about

clarity, no more hints because what that is is her passive aggressively asking without asking. Right. And if you let the hints float around, then the conversation just gets harder. Right. And I had told her before that will not be an option. Like, we do not have space

“incapacity, but also on a deeper level. It's not good for a marriage. Absolutely. And I think”

what you said just having it in writing as well after having another conversation. Yeah. And say, keep asking that the answer will stay the same. Well, let me pivot to solutions. And you go, okay, we want to help you figure this out, but our house is not the plan. Right. And so now it becomes we're working on some or looking at something together instead of

facing each other in opposition. I think, right. When you can say, I don't know your husband's

name, but when you can say, Bob and I talked in Bob and I have decided, I think that also reiterates that the family unit has changed, right? And it's now your own husband who have your family, who are making those sets of decisions. And it's kind of just a subliminal way of reminding her, hey, things have changed. And I have to make decisions about my family with my family. Obviously, you're still part of my family, but it's different now. Have you helped her with the actual

budget to show, hey, here's how much you're actually making. So here's the kind of life you can actually afford. And I have not done that. I have tried to help her as far as, like, with savings and things like that. And kind of the conclusion that I've come to if it's not her idea or if it's not something that she likes, then it's not going to happen. Right. So I've tried to let her know before, just because I'm not doing what you like does not mean that I'm not being helpful for you. You also

have to take, you know, to help that's being offered. I mean, it's the old beggars can't be choosers. It's this is the life that you created for yourself. We had no involvement in you having no retirement. Now, you made choices along the way. Yes, you took care of us. You raised this and we love you for that.

“But the truth is you have nothing in retirement. So we need to figure out how to live off of”

your social security. Right. Any asset she has can she sell anything. Can she do it a little something part time if she's healthy and able to try to bring me a little more income if she wants XYZ lifestyle. And you can you can even remind her of the choices that like if you if you suggest something and she's like, oh, I don't want to do that, right? But then a couple of days later, she's talking about the results of not doing that. Like if you've said, hey, you're not going to

be able to spend money on this because you don't have it, right? And then a few days later, she's like, man, I'm having a hard time doing this and you're like, well, I tried to tell you that what you can do is remind her by saying, I'm not going to be able to help you because remember we talked about this. And so, eventually saying, I'm not able to help with that. And then if she says, why, it's will be because you've said that you're not willing to. And that's going to remind her, oh,

this really is. Here's the help we're going to give. You can either choose or to accept or reject that help. Yeah. But that's it. This is what we can do. And that's it. It's not a fun conversation.

ongoing over time, but you just need to keep being clear, keeping firm because if you budge just

one inch, she's going to go, oh, I haven't in. Right. I just keep pushing on this little loose gender piece. I can get this thing to crumble. Yeah. And you also have the ability, you know, you can decide based on what you know about that relationship. How many times am I going to answer

“this question or how many times am I going to entertain this conversation about this specific topic?”

So you can decide, hey, after I'll give her like three or four times on it. But after four, I'm going to then say, I've said this a couple of times now. I'm no longer going to discuss this one with you. Like you can say that. And then you hold yourself to that. These are really tough things. But they're, they're good boundary exercises to start practicing. Thank you guys so much. Yeah. I'm so sorry, Emily. This is one of those things where it's like, you're now kind of

having to do the parenting. It's the rose flip and it's so weird. And it's a good reminder that the biggest expense that's facing generation right now is not your kid's college. It's your parents care. It's called the burden retirement where you now have to fund your parents care and potentially

“raise your own kids. And now you've got this kind of sandwich generation for stuck between”

with their own financial problems. And they don't want mom on the street, but they also can't take her on as a financial burden. And that's where these conversations early, often with clarity and kindness is the only path forward. You've worked too hard to get control of your money just to let strangers control your data. Think about it. Just about every time you sign up for a newsletter, grab a coupon code or

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“Laura is in Portland, Maine up next. Welcome to the show. How can we help?”

Thank you for taking my call. Great to speak with you guys. You as well. Okay. I am on baby step two. I am gazelle intense now and here's the Deleteme. I have two consumer loans. One loan is a vehicle secure loan through my bank and the other one is the dreaded 401K loss. I do have 4,000 in credit card of the total is 33,400 roughly of everything. But do I switch gears and make this 401K loan a priority?

And I know now that I listen to the show that I'm probably never going to recommend a 401K loan

to anyone. It's a little bit of my self. But further than that, my company is starting to do some downsizing. So I also have some worry and I'm on baby step two. So I mean, my backup is $1000 savings if anything was to happen. Yeah. So for those listening, she's worried about that because if you lose your job, that can become due very fast because the loan you owe that money. It can become due as quickly as like 60 to 90 days in some cases or a calendar year and other cases it really

just depends. Potentially by your tax filing deadline for the following year that might give you

some runway, but I would find out. That's your first homework assignment. Yes. Yes.

Good. Good. So I would not dug into that. Yeah, I would just get in touch with HR and say, hey, what would happen to my loan if for some reason I was separated from the company?

how soon you need to pay. You have a thousand dollars in savings now? I do. Okay. How imminent are these layoffs? The random. They don't. Right now, my my area seems to be okay, but that being said, we've had a definite down check in the amount of work that my area sees. Okay. So what do you make? Where I've I have 56,000 a year. What's the car loan? What's the balance on that?

13,350. Okay. And the 401k loan balance? 15,970 dollars. Okay. And then the credit cards.

4,100. All right. So the 401k loan will be second in the debt snowball right now.

And you're going, hey, should I put that up first because of this layoff situation? It'd be in a precarious spot. Right. Would there be severance with these layoffs? Have you seen that happen? I have seen severance. I actually have co-workers that I've know that they've been put in where they have a severance option. They have given the choice to find something else within the company within 60 days or take the severance would be not a horrible plan.

I have over 20 years with this company. Yeah. I'm just tempted to go, hey, should you pause everything and just stack up cash right now? And that way, you number one, you have the little emergency padding. If you do get laid off in number two, you might have enough to cover the whole 401k loan by the time the stuff blows over. I honestly, if I woke up in your shoes, that's exactly

“what I would do. And that's been my, that's what I wake up at 2am thinking about.”

Yeah, because it's a storm and you have the ability to see the storm coming, which is a little bit of benefit. And so it's like, yeah, if you can start prepping and start doing all the things that are going to put you in a better situation, 100% I would do that. Are you single? Okay. I'm married. Okay. Is your spouse working outside the home? Yes. Okay. What do they make? And he covers most of, he makes around 130.

Oh, so you've a household income? Yeah, about 180. Okay. 186? Yes. He's covering most of the household expenses right now, so I can focus on this. And he's great. I mean, you guys have separate finances, it sounds like we do. We're not totally

on board with the R&D's plan. So he wouldn't help you pay off this debt with his amazing income.

He could. He's he's he's he's balancing everything right now. I say everything like he's being the mortgage all the way down to the groceries to the internet. Well, you said he could. We want to know would he? Obviously, he could. He has the money. What do you take a bullet for you? He would. But he wouldn't help you pay off a 401k loan. Oh, he would if he really had to.

“I mean, it sounds like he really has to. Here's the thing. If you were, if my life was”

stressed to the guilt, staying up till 2 a.m. worried about this layoff and 401k loan, I'm not going to go, yeah, good luck, honey. Sounds like a tough spot. I'm going to go take my $130,000 salary and cover the mortgage. Honestly, that is why I'll be heavier. Yes, I agree. So part of this problem is due to the lack of unity in your own marriage. Yes, I agree. And it's probably what got you here.

The fact that you needed to turn to debt because you are basically on your own financially.

Right. I mean, I'm a spender and he's a saver and I'm the warrior and he's the don't worry. If this happens, honey, we'll handle it. And I'm just like, but how will we? How long have you guys been married? We've been together for 24 years and we've been married for 12. How much does he have in savings? He's got 2,000. And he's the saver. He's the saver. Whoa, he just paid off all his debt too. Oh, good. I mean, we're doing the plan. We're not doing the plan exactly. No, you're not doing the plan.

Don't stay honest. You guys would have been completely debt-free by now if you were doing this thing together. Yeah, we probably would. Because there is zero accountability, zero transparency, and that's caused a lot of this mayhem. So you guys need to get to the bottom of why that is. If you can solve that, then we can be less freaked out about all of this other stuff.

“That's what I'm getting. Right. But the bad day is you pause your own debt snowball and try to”

stack up some cash. But it's going to be a whole lot harder on 56 than it would be on 186. Right. You could say 15 grand and three months if you guys work together. And I think part of it is I feel guilty that I spent and didn't make the best choices.

That's fine. Like, I think it's fair to have the accountability of being able to look back

on previous actions and go, man, that wasn't smart. Or I shouldn't have done that. There's health to that and being able to take responsibility for bad choices. But don't you, don't you agree? There comes a point where it's kind of like, all right, that's enough. Like, have you ever talked to have you ever been in a conversation with somebody and they keep bringing up something and

“after while you go, you have to set that boundary and go, hey, I don't want to keep talking about that.”

Right. Don't you think there's that time that you with your own self? You go, yeah, I know. I don't want to keep talking about that. That was like 10 years ago or that was like two years ago. That's enough. I don't want to keep talking. Yeah. Let it go, man. Right. So I think you just have to do that with yourself as well, because otherwise you're just going to, that's going to be the

refrain that is always in your brain. Why you can't work together? Well, after all, I did do that

thing 10 years ago. Like, you got to stop. Yeah. And if he's willing to, if you tell me, he's truly willing to do this, but the only reason you're not is because you feel guilty, then then I'm singing that even louder to you like, hey, let it go, man. Like, you got to let it stop. Because everybody makes mistakes. He's made mistakes, too. Right. Right. Right. Oh, yeah. We definitely have learned some lessons when it comes to money. I mean, yes. I feel like we need to sit down, both read

the total money makeover, talk about it. Say that to him. And not leading with an attack, but just leading with, hey, I've done a real terrible job in this marriage, and I apologize, and I feel like we have zero unity, and I would love to get on the same page. I know it's been

“24 years. I know it's hard to teach an old dog new tricks, but I think our marriage and future”

are worth it. It's hard to argue with that. Nothing for him to really disagree with there. He's going to go, yeah, you're right. Yeah. And I've learned so much from this show. I mean, he doesn't listen, because he's not able to go through tech work. He does, but I, I just have to say, is it illegal for him to listen to the show? I didn't know there was jobs like that. I thought I'm like that night. He worked in construction, and he works in the field, and he just wouldn't be able to.

I mean, he has the earplugs in, just not, you know. Yeah, I just commute home. He needs just dead silence, just to recover from the day apparently. Well, I'm wishing you guys the best Laura and cleaning this mess up. There's a lot of layers to this, but you will be okay in the end, especially if you can get some immunity. When you're drowning in credit card debt and collector

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show notes or just go to RamseySolutions.com/events. All right, Max is in New York City up next. What's going on, Max? Oh, yeah. So, you're going to have a ton of questions about the how I got in this whole. But, you know, I'm 26. I'm in New York City. And I found myself in 14. And closer to $15,000 in credit card debt. Unemployed and renting a shoe box 184 square

foot apartment for 2750 a month. And, you know, I'm not, I'm not the first person to find myself in

this whole. But, I just don't see a way out of it. And, you know, my best idea is the moment or take out another credit card with a 0% APL balanced transfer for, I don't know, 12 21 months. That's your best idea. Well, you know, we'll get to some of the backstory, if you want. But, you know, that or do I, you know, that 26 years old is it worth just looking into following

“bankruptcy? Are you a New Yorker or did you move there to try to pursue something?”

No. So, I came here on a suggestion because I had, I was at complete rock bottom and I had no words to go and somebody else was willing to float the first six months of my living expenses to be here. I got out of my third residential rehab program for drug and alcohol abuse. You know, I just made it to 18 months clean and sober for the first time of my life. That's impressive. So, yeah, I'm very proud of that, you know, and I'm, you know, like diving into spirituality

and, you know, trying to strengthen a relationship with God and can't, you know, it's can't believe that I got here and now, like, what the hell, the word I even started. I had just no financial literacy.

That was never part of mine as a upbringing with my parents and I'm just feeling feeling screwed.

“Yeah. What was it? What were you doing? What was the work you were doing before it went sideways?”

Yeah. After, after applying to every entry level position, I was given a job by someone in a 12-step program, a recovery program. He owned a bit of a K9 Concierge service and he allowed me to walk dogs for him. Wow. Is there anything on your record that would make it tough for you to get employment like anybody else? Yeah. I mean, I've been turned that. Yeah. Yes. Okay. And the reason I feel stuck in New York City is because I am not legally allowed to drive

anywhere in the country. Understood. And in New York City for the subway. So you need somewhere

with public transit. But there's a lot of options for that. You see, you're not stuck in New York City,

you're stuck in a city that has some way to get around with public transportation. Yeah. Okay. What were you making doing the K9 Concierge? Right out of about 60

“grand a year. That's what I was on possible. Wow. Have you been looking for jobs?”

Is that where you want to stay right now? Could you jump to a different similar job? I've applied everywhere except bars and restaurants because I'm beyond it. I'm a little worried about going back. I was a bartender before. Yes. And we're going to say no to that. Like going to that. Yeah. Definitely not. But I've applied for it. They can go Amazon. I've applied for UPS. Anything entry level I've applied to. I just cannot get hired. The one job offer I've gotten in

the past two weeks of looking for a job was 100% commission based for Verizon. And, you know, and we need something to save it right now. We don't need like a maybe I'll make money in three months. Do you think that the reason you weren't able to get on at Amazon and UPS and those plight places was it because of what might be on your record or do you just think I just didn't get hired? I didn't even get a call back for interview. Right. And I'm trying to, what I'm trying to

ascertain is do we start need? Do we need to start thinking about what are things you can do to create and come on your own? And if that's the case, that puts me in a different head space because I go, okay, service oriented things that you could provide for other people that don't require that you can use public transportation to do. That's the head space I'm kind of going in. And some of that makes me think, man, I wonder if a suburban area would be better for you because then

it's like, hey, I do yard work, I do lawn services. I, if there's any sort of trade that you can do and become kind of a handy man. Like, I'm trying to think of things that you can do that don't require someone else to have to hire you and have to approve of you that you can just start today and start with what you have, but also navigate the transportation aspect of it.

track. Let's start doing deliveries and career services. There you go. My weather is nicer on your city right now, too, which is perfect. Yeah, I know it's beautiful out today. I have $25 to my name. Yeah, so right now you're on fire right now. So you're like, hey, guys, who, so I'm confused. Who was floating this $27.50 rent? And yeah, it was somebody you ever could have afforded this. Even making the 60, that was eating

up all of your income. It was eating up my income. I was, yeah, my mom, my mom gave me $700 bucks a month

to help for the first six months of this lease. And she said, this is all I can do after this,

you're done and you graciously accepted it. That six months is up and I've been, you know, I've been biting the $27.50 and, you know, live an off of food stamps.

“Have you gone back to the 12-step program to seek other employment?”

If that's a game in this job? Why, yeah, I've been in the room, you know, pretty much begging for jobs and, you know, it's also the beginning of the year and, you know, not ever withdrawing like they are and, you know, late summer to, you know, getting into the holiday season. I've been, I've tried that route and, you know, I'm going to continue to do some extra landlord going to do and you don't

make rent next month. That's, you know, I have no clue. You know, I would be letting him know the situation. I wouldn't wait until the day comes where he's knocking on your door going, where's the check? I have a feeling I know the answer to this, but you're going to probably say do not put it on a credit card. Absolutely not. And I would be looking at lease agreement and studying up on that figure out how do you get out of this thing? Because there's probably going to be some penalties

to break the lease and if you don't pay and if it's going to be expensive and difficult to evict you. So I just be honest with him, say listen man, here's where I'm at. I can't pay this

“right anymore. I lost my job. I'm in recovery like I can't do this and you need to go, you know,”

maybe get a place with seven roommates and it goes down to 700 bucks a month. What type of support

system do you have? I know obviously family helped you kind of get this first few months started,

but I'm trying to put myself in your shoes and my mind is going, is there someplace that I can go back to and go, hey, I tried my hand out here. I need a couple of months to get on my feet. I literally have $25 and I'm trying to be responsible and not go into debt. Do you have a buddy? Do you have a family member that would float you for a couple of weeks until you can get a lawn mower basically? Do you see what I'm saying? Yeah, it's financially everyone I know is tapped out, you know.

Well, I'm not saying I'm not saying asking for money. That's not what I'm saying. I'm saying I'm going to say what I'm thinking and then you put it in terms of your situation. I'd probably call it my sister and be like, Fera is hard out here. Like I made some serious, like I thought I could come to New York, but here's where I'm at. What I don't want to do is go into more debt and so I'm trying to make the most financially responsible decision right now. Could you give me

like two weeks, three weeks at your house? Here's my plan. What I want to do is get some place a little bit more residential. Just get someplace where I can start to offer services for people so I can make some really quick money. I'm thinking about doing things like washing windows and repairing people's decks and like right tell them what your plan is because that's a lot more convincing

“to let to help somebody rather than I need money. That's not going to work. I remember to cover your”

four walls first before you pay the credit card company. You got to cover food shelter, utilities, transportation, and get those down as cheaply as possible, and if you can't pay the credit cards, you don't pay them. You can contact [email protected]/Ramsie to help with the settlement and collection stuff if you do end up facing that. So sorry, man. All right guys, if you haven't heard Ask Gramsie, it was our free AI tool that's built and

trained on proven ramsie principles and today we're going to break down the most asked question from the week real estate. Hot topic, we're getting lots of questions about buying a

house. So the main question here, what are the most important factors to consider

when buying a house? I love that. Well, definitely financial readiness, right? You want to be completely debt-free. You don't want any non mortgage debt, no credit cards, no car loans, nothing like that. And when you do that, it reduces your risk and allows you to actually be able to handle emergencies that pop up. Obviously, we want you to have a fully funded emergency fund three to six months of expenses. And we want to make sure that you can afford the mortgage payment in any ongoing

piece is, naturally, how much house can you afford? Because the thing is, that mortgage is

“under a ruleback. You guys can afford a million dollar home. And you should be like, no, we actually”

can't based on our real numbers. And so your mortgage payment, including the principal, the interest, the property taxes, the homeowners insurance, the HOA fees, even private mortgage insurance, that PMI applicable, should be no more than 25% of your after tax monthly income. So that's after taxes, but before all the other deductions like your 401k or health care. So that'll help

bolster that 25% number. And here's the thing, you know, it's not a sin to go 26% or 30%

but here's the problem. We get calls where it's 50% and these people are drowning asking if they should sell their home. And so we just don't want you to be house poor. It's not about following strict rules. And using a 15 year fixed rate mortgage and avoiding 30 year loans, adjustable rate mortgages, FHA loans if possible. That's the way to go. Yeah, and not only that, but even saving for your down payment, which is a big hot button topic. Now, you know, you want to aim for at least

“10% down. If you do 20% of course, you're going to avoid PMI, but the truth is for a lot of us today,”

you're going to have to put a lot more than that down in order to reach the 25% rule that George was just explaining. So really hop on there and use our mortgage calculated figure out exactly

how much you need to put down. So the payment is right. Because at the end of the day,

you don't want to be using any of your emergency funds for this. You should have separate savings, and you should also be able to put the right amount down. That's right. And in the mortgage process, you got to get pre-approved before you start house hunting. And that shows sellers that your serious buyer, this will help when it comes to offers when you're, you know, in the mix there, and it helps you shop within your means. So choose a reputable lender who will prioritize your

financial well-being instead of just try to throw the biggest mortgage they can at you. And our friends at Churchill mortgage, they've helped so many people buy home the Ramsey way. And if you

“want to know if you're ready to buy how much house you can afford, how much you need to save,”

all that, ask Ramsey, our free AI tool, can personalize those answers for your situation.

So that's a great thing. You can go back and forth, have a conversation, save the chat, if you log in. So head to RamseySolutions.com and try for yourself. You can also click the link in the description if you're on podcast or YouTube. All right, Kara is in Detroit, Michigan, up next. What's going on? Hi. Thank you for taking my call. Absolutely. Hi. I'm sorry. I am calling today because I wanted to get some advice about how to set my fund up for success

in this future. So a little bit of background. I'm 27. I am a PhD student at the University of Michigan and I have a one and a half year old. And I've been trying to save money for him and figure out the best way to set him up in a future because I have come from a very poor household and then homeless several times and I really should not want that for him. Wow. Wow. Yeah, I mean, Kudos to you for making this all work. I would be very focused on, and this is going to sound

kind of opposite of what you said. But with a one year old, the best thing you can do for him is to make sure you're doing and being the best person you can be. So what does that look like for you financially? Making sure you're out of debt, making sure you're able to pour into him financially and help with college, making sure you're setting yourself up in such a way that it's so healthy with you that all that health gets on to him. Does that make sense?

Yeah. And so that leads me to my next question, which is how are you doing financially? Like, are you paying off debt? Like, where are you in this whole thing? So my husband and I, we meet just north of 90,000 a year. I don't have any student loans or credit card loans. I actually had a free ride to school and my PhD was paid for by the school. Wow. Nice. The only debt that we do have is we do have two card loans, our cards

took a crap for a lack of better words. And so we do have two card loans, but that's the only debt that we have. What are those card loans out up to? What's the, give me both balances? So my card is at 18,000 and his card is at 21. Okay. And what are the monthly payments on that? One is $381 a month and the other one is $481.

So when I see that number, all I see is future investing. That's $860 that could be invested if we got rid of this debt. You see what we're doing here? Yeah. Can I show you what $860 would be if you invested it from the, when your child turns two to 18? Sure. You ready to blow your mind? $400,000. Um, yeah. So it's gonna be a lot.

Hope you like the car. Yes. Yeah. So you're asking us how do I say for my kids college? It's getting rid of your debt so that

I mean, that's the same car loan. Exactly.

And the thing is for most Americans, I mean, we're not trying to single you out. Most Americans, this is the, this is the cycle. It is a revolving door. I drive this car for a while. It gets old. Something happens. I trade it in for another car and I have another car payment drive that for a while. Some happens. I trade it in a, and they have a car payment that's entire life. How can you save up for a car when you've got the

“car payment? Taking a put you would have saved. So eventually you have to break the cycle and drive the”

crappy car while saving up for a car, you know, that you really want the upgrade car that you do in cash. So, I mean, you've got 40 grand and vehicles making 90. That's, that is up to

the point. Yeah. So you may want to consider selling one if you are not bringing it. Are you

working right now while doing the PhD or is that full time? So my PhD gives me a stipend. I'm teaching school as well. So that's half of our income and then I have to make the other house. Okay. So now the question is, how do we up both of your incomes? One is your PhD done and what will you be making? So I have two more years left. And it depends on what I go into. I'm not entirely sure it's estimated to be just north of 100,000, but it really depends

on where you work, what company and what city that you're in. I don't, I can't really make those decisions quite yet. Sure. And what about him? What's he doing? The visa medical technician, he's three prints, surgical and clearance. Okay. So I'd be the way I'd put it in our brains if I sat down

tonight and was talking with my husband about this very thing. I'd say, if we can't, if we can't

commit to getting these cars paid off in 18 months or less, I think that we should consider selling one of them. That would be my kind of thing to bring to the table. And that way you're saying, hey, we know that there's a level of urgency here, but we're also allowing space for us to keep these vehicles if we really want to work hard to keep them. But what I wouldn't do is try to do all of this at once. Try to invest, try to pay off the debt, you need some focus and tends to

be now to just pay off all of your consumer debt, build up a fully funded emergency fund of three to six months of expenses, be investing 15% of your household income into your retirement accounts, and then money left over gets invested for the kids college. Okay. And you're probably

“going, wait, money left over, that's what happens when you're debt free and you guys will be”

making north of six figures. So I'm not as worried about junior. I'm more worried about the present you, right? Because even if you start investing at when he's four years old to 18, yeah, you'll have to invest a little more to make up for some lost time and compound growth. But I mean, even let's say four years old to 18, if you invest 500 bucks a month, he'll have 181 grand. That's at a 10% return over those 14 years. And that's assuming he gets no scholarships and

he just got to pay that. And then on top of that, think about how much more money you guys will be making 14 years from now. 15 years from now. And so you'll be able to cash flow. He might get scholarships and grants. He can work part times. There's a lot of things that he can do to avoid student debt. But all of this is predicated on you guys creating a financial foundation for yourselves. Yeah. So the moral of this story, not just for you, Cara, but for anybody listening,

“the way that we love our family well, whether it's our kids or thinking about the future is we”

have to have our personal financial life in order. How many calls do we get George where it's my parents didn't do what they were supposed to do. So now I'm 40 years old and I'm having to pay for kids college plus their care and do all this. If you can decide today, you know what, I want to break that cycle. I want my kids to be set up. It starts with you. It's not in the DNA. You can break the cycle. And so it is possible. And the account to invest in is a 529 plan for education or you can

do an education savings account. Those are both great options to invest and you're going to get some tax for education. Welcome back to the Ramsey Show in the Fairwins Credit Union Studio. I'm George Camel, joined by Jade Warshaw, free call at Triple A, 825, 5225. Can is in Tallahassee up next. What's going on? Can, welcome to the show.

Great. Nice to take you, Cole. Absolutely. Awesome. So I'm looking for some guidance. My wife and I, we had left our jobs about two years again. We both opened two businesses, both of which have done pretty well. Over the past two years, we've really aggressively attacked all of our debt, except our mortgage and one investment property. Good. Now we're at the point where we're trying to determine if we should do ahead and pay off

the investment property that we purchased, which has an interest rate of 5299. We'll about

for a 1K? Whatever we can do to set ourselves up for retirement.

Okay. Are you currently investing 15% into retirement every month? We have not started anything for retirement whatsoever. Okay. Do you have the 361s of expenses saved?

“We have 82,000 saved for an alias. Okay. And that's how many months of savings is that?”

How many months? Well, we've made about 360,000 a year combined that. And is that a side? That's personal money. Like for your personal life, that's not your business savings accounts and retained earnings, right? Okay. So I would just walk this through the baby steps, which is it sounds like you've kind of already done. And just to recap for anybody listening, baby step one, you're getting a thousand dollars saved. Baby step two, it sounds like you've done.

You pay off all of your debt, except the mortgage. And then baby step three, save up three to six months of expenses. You've done that. Then baby step four is you're investing 15% of your gross income every single month. And once you're doing that, it's kind of like that's the set it and forget it. I know that that portion of retirement is going to be taken care of. Now I can look up and

“do things like if you want to put a little aside for kids college, if you want to pay extra mortgage”

payments, right? Some of the things that you're talking about. So as long as you're doing the 15%, I would invest in paying off some of this real estate. However, I would be looking at what's the best way for your primary mortgage to be debt-free quickest? What's left on that? And that's my biggest question because our mortgage payment, our home-steads, $2200 a month, our interest rate is super low. So my question there would be do we pay aggressively towards the investment property,

which has a 5.99 rate? What's the balance that we're currently going to do? Yeah, what's the balance of the home-stead? I'm about $323,000. So since that's where your bodies lay down to sleep every night,

that's the equation I want to solve for is how can we make that debt-free first? Because my thought

for that is no matter what the situation, whenever people have an emergency, a hard time, whether somebody's laid off, whether there's a diagnosis, the number one people think that people care about is I want to keep my house. I don't want anything to come between me and keeping my house,

“right? So that's why that's the first opportunity. If you get an opinion, you could sell the”

investment property. Yes. I don't want you have to sell your home to do that because of the mortgage payment. So I'm not concerned about interest rates. Can you guys make so much money that it's negligible? What I would do is start investing that 15% today because that is what $54,000. 4500 a month. And so even though you're starting from zero, I'll give you the math here on our investment calculator. You can jump on our website and use it. We'll drop a link in the description for this. But from 38 to 65,

if you guys invest 4500 a month, you never make more than 360 at 10% return on average. You'll have

7.4 million. Okay. So when you, when you say invest or you refer into like a brokerage in index funds and all that or this is in any type of investment account that utilizes compound growth. And so this could be retirement. I would do retirement account. So the way we look at it is there's a kind of a water flow approach. If you have an employer match, we're going to go there first. Then we're going to take all the Roth accounts we can get. Now with your income being so high, you may want to

get a new life traditional. Yeah, since you were business, yes. So you could do solo 401k or their employees in the business or is it just you guys? My business is a solo on the only other and then on my wife and I business to me and her and one other employee. Okay. I would for yours it's easier to set up for hers. I would probably work with somebody to make sure you're structuring it the right way. But yeah, I would start that immediately. That's your project for

next week. And then right now you just haven't been because you just don't know. And you guys are super smart. Very successful. And it's pretty easy to know. And there's pro guidance that I would suggest. You can jump on ramsysolutions.com, click on smart vester pro. They'll dig into your situation, help you decide, hey, for your situation, for your wife, she should do a a step IRA for her business. And you should do a solo 401k, for example. And that'll allow you, you can

actually put it way more into a solo 401k because you're the employee and the employer, right? So you can contribute on both sides and really make some headway to start investing. And I would just work on extra mortgage payments outside of that. Do you guys have kids? We have three total

hopefully you guys will be able to cash flow the rest. But a 529 plan would be a great place to

“sock away extra money and just kind of set a goal for that. Again, the smart vester pro can help you”

set that goal from 11 to 18. We want to have, you know, six figures in this account by then. You might be able to kind of super fund it just in the next year and you'll have said it and forget it. So there's a lot of strategies you can do here. But the main thing is let's start putting money aside for the future with compound growth and let's start knocking out your primary mortgage and then eventually my guess is if you follow our plan within five years, all of your

debt will be paid off. Well, I wanted to ask about that. I mean, how married are you to it? Because

my mind immediately goes to what's this thing worth because of I can put it on term rental. It pays

for itself. I understand that, but I would run that out and go, okay, it might pay for itself. How

“much profit are we really earning off of it? And what's it worth? Because if we sold this thing”

and if we could walk away with a significant amount of chunk of change that we could turn around and pay off the homestead very quickly, that would be very enticing to me. Because now you freed up the 2,200 a month that you're paying for the homestead, well, how quickly could you? Is that money that you want to turn around and invest and get a probably higher rate of return? Or would you want to sink it back into real estate that maybe you're just breaking even on month to month? Well, we have

we have some equity. I just don't think it's it's a time. So, okay, what are you actually making off of this thing per year after all of your expenses? Well, it's about 600 a month after expenses. Man, that's not much compared to your whole income, I know. No. What's it worth? More of a more of an investment to have later on, you know, I guess so. Are you guys going to live there one day? No, no, I guess something that we would just have on the side and so later on that.

I mean, it's less than 2% of your household income. So you got to ask yourself, is it more than 2% of the headaches in my life? Maybe. What do you, what's it worth if you did sell it? I'm just curious. What would you, what would it be? To 75, maybe. Okay, so not a whole lot. To 80, no. Yeah, you know, it would be something I'd continue to watch it and if it starts going up and value and it, it becomes enticing to you and it does make sense to maybe

offload that in order to free up the homestead. I would definitely do that deal when it's time. Thanks for the call can. Again, that's RamseySolutions.com, click on Smart Vester Pro, and they'll help you craft a plan for all of this because you guys make so much money. Let's put it to good use. 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.

“Bree is in Santa Barbara up next. What's going on, Bree?”

Hi, there. Thanks for taking my call. Absolutely. How can Jade and I help? Hey, I'm calling because I am a thirst for a year old single mom, and I work as a teacher. I live in a pretty expensive area of California, and I'm feeling really good. Actually, about where I'm at financially, especially considering I had many years of being very low income. I guess I'm kind of at a point where I'm not really sure what I'm saving for. I put away money every

month towards savings, and I have been since I started my first day as a teacher every year

increasing the amount that I put. And I just had about $60,000 saved up when I you know, continuing to save every month, and I also am really careful with my budget and how I spend my money. And I guess I kind of am not really sure why I'm doing it. And I guess I want to understand what a amount of money should I be putting towards saving versus allowing myself to live a little bit of a more enjoyable life financially on the day to day. I love this question because

I think that anybody who's really had to scrap to get to where they are, you do, you get in the

question anything else. And then it feels like you've done something bad if you don't do that.

“You spend it. You feel guilty. So let's try to free you from that today. So you don't have any”

consumer debt? No, I other than my mortgage, my home. You got a mortgage and you've got a 60k, that's just all of your savings. That includes your emergency fund. That's all wrapped up in there. Yeah, I mean, I've got about like 6,000 in the bank, I guess. But okay, that's kind of your checking account money. Have you started investing yet? Have you started investing? Oh yeah, that's in an investment account. Oh, okay. So it's not as liquid. It's not sitting in a high yield savings or anything.

So how much do you have in a high yield savings account or in a savings account? I'm not like paying in a high yield savings account. It's all in a like a brokerage account. Oh, that scares me a little bit because if you had an emergency, you'd have to just sell that off no matter what's going on in the market. I would, but I also, like, I have, I have other sources. Like, I could talk to my parents. I could talk to family members if I needed to.

“Yeah, let's fix that. Let's fix that. I think I heard you say that you're a teacher, right?”

I am. How come you're not investing through your work into a 401k? Because usually there's an automatic kind of a 4 or 3 views. Yeah. No, there's there's nothing that I'm aware of at least through my

job that I can. Is this a normal school system? I've just never heard of a school system that doesn't

have a retirement plan. Let's help you with that. So what you have, that retirement plan is awesome. And that's the number one way people build wealth is through their employer-sponsored retirement account. Okay. So if you have 403B, which it sounds like you do, my guess is there's a percentage of your income that's automatically going into that as a teacher? Am I wrong? No, you're correct. I don't know if it's called a 403B. It's, but it is like a teacher retirement account. Perfect. In California, I think it's a

little different. How do you know how much goes into that every month? That's six dollars a month, but it also increases every year as I earn more. Okay. So the goal that we want to get to is for you to be investing a total of 15% of your gross income. So the math that you can do tonight is to say, okay, that's 600. What percentage of my gross income is that? So let's say it's 10% and then you go, okay, I need to add X amount of dollars in order to get this to 15. That's thing one. Once you're

doing that, it's like, okay, I can set that in, forget it. I know that if I continue to do this, when the date of my retirement comes, I'm going to be set. And a way to really feel good about that is to go on the Ramsey Investment Calculator and just plug in your numbers and say, okay, today I'm 32. If I keep doing this until age 62, the $600 or however much you increase it towards,

here's what I'll retire with. That's going to make you feel amazing. And then it's going to

free you up to be able to spend money in other ways when the time comes. What's really on fire for me today is the fact that you don't have liquid money in a high yield savings account. And that needs to probably happen immediately. So I probably told you that a little bit out of order, but I wanted you to understand that you did have employer sponsored retirement at your disposal. Yeah. And with the high yield savings account, how much do you recommend putting in that?

Three to six months of expenses, you're a single mom. And so I feel better if you had six months, as close to six months as possible. And you have that now in that brokerage account. So I would just sell off that much and be aware if there's any capital gain taxes on that. But take that out, put it in a high yield savings account, and then keep it liquid. I know it's not making as much as you could be in the market, but it's not to be invested. It is insurance against you

having to go into debt ever again. So you'll feel a whole lot better having that liquid at the

“ready. And then beyond that, if you want to pull a little money away for the kids college, how old are they?”

My son is 12. I do put money towards his college fund every month. I have I think like 12,000 or some stayed up at this point. I don't aggressively put money into it. So that's in addition to the $60,000 I have in the investment. So you may want to make a goal to put a little more in there, and you can use an investment calculator figure out, hey, cheers how much in in-state public school would be in this area if they choose to go there and try your best to get there. You don't have

to cash flow the whole thing. That's not your obligation, but it'll help them avoid student loan debt, which is a huge crisis in America today. So that's one goal for your money is to put more towards

college. You can always put more toward the mortgage. And then of course,

there's a special low interest rate though, like I was able to buy about five years ago, and for my interest is 2.63. And so it feels like if I had the option between investing, I would just get a lot more return for my money if I was to put it in an investment account

want to be when the day comes and you can no longer work. Because if you continue to let your

403B through your teaching continue to grow and accumulate, like I said, do that homework tonight because it's going to change your mindset because the time is going to come when you can't work anymore and you're going to look up and you're going to go, "Man, I don't want to be paying my mortgage out of my retirement every single month. It'd be so great to maybe have a slightly smaller nest egg, which you're probably, you know, it will be negligible and also have a paid off mortgage.

“Does that make sense?" So that's why we teach it that way, but we never asked you how much do you”

make every year? About 75,000. I put away about 700 per month into investment accounts and then the rest I use for expenses. I mean, I live like a decent life, you know, it's not like I'm penny-pinching at every corner, but also, you know, there's extras that I choose not to do because it wouldn't, you know, stay within my budget. What do you want to do? If I stand on my fingers. I want to hire somebody to deep clean my house once a month. Love it. I just want to do it and

I want to do it. What is that cost here? It's in California. It might be a couple hundred bucks. Okay, say $2.50. So you can set up an every dollar budget, use the app and just put line item, house cleaning, $2.50. Okay. That's it. And you guys, you don't feel guilty.

If I do all these calculations and I make sure I've got my 15 percent, like you think it's okay to

guess. Yes. I would be investing in the brokerage account. At this point, that is sort of like a babysept seven houses paid off. I've run out of other investment options. You're going to be fine. You're so young doing so well that I would be more focused on making sure I'm investing 15 percent to retirement, making sure my kids college is covered, making sure the mortgage gets paid off. And then if you allow some spending money for break, you've earned it. You're working your

tail off. You probably need to be closer to around, you know, $900, $930 investing every month.

“I think you said you're at six or seven. So bump that up to the right amount. Like I said,”

somewhere between $900 and $930. And then from there on, if you're doing all those things that George talked about, you're in your baby step, you're letting, you're doing those things correctly.

100 percent. The whole purpose of doing this is so that you can enjoy your money. And so that you

can spend, it is live like no one else so later you can live like no one else. And for you, it's simple things like having a house cleaner. So as long as it fits in the budget and it's not causing you to have to pull from investments, it's not causing you to have to forsake your kids college fund, it's not causing you to have to, you know, have, have no money ever to put extra on your mortgage, right? Then it's fine. It's good. And it's worth your sanity.

Thank you. Thank you so much, guys. Thank you for the call. You're here. That's very impressive. What you're doing 32 single mom debt free in California, nonetheless. Right. And I love that she wrote out the storm of starting out low income and really pushing and pushing to get to where she is now. That is so gratifying. I'm so proud of her. I talked to people on the rams. He showed 90% of the problems I hear come down to one thing, not

having a plan. They're not living on a budget. They have no idea where their money is going. Money is just happening to them instead of them happening to their money. And guys, that is so normal,

“but it doesn't have to be normal for you. And that's why I want you to go download our every dollar”

budget app. Every dollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you call the show. And it's right in your pocket. So don't keep living normal. Go download the every dollar app. Answer a few questions and get your plan today.

Our question of the day is brought to you by Wi-Fi. It's private student loan default, knocked you off track. This is how you reset Wi-Fi works with borrowers, other lenders won't helping you refinance to faulted private student loans with a low fixed rate so you can get back on the plan and move forward. Visit Wi-Fi.com/Ramsy. That's to letter-y-r-e-f-y.com/Ramsy. May not be available in all states. All righty. Today's question comes from Ian in Wisconsin.

to buy the item, to buy the item outright? I'm making a large purchase and have cash to pay for it

today, but I want to pay it on payments to soften the bloat. I want to put it on payments to soften the bloat to my bank account. I've already got the payments worked out into my every dollar budget, so I don't see why this isn't a legitimate reason for using the method." Okay, this is wild,

“but I want to kind of validate what you're thinking. I think all of us feel the pain of seeing”

a nice cushy number in our bank account, and then we decide we want to do a major purchase, like a car or a golf card or whatever, and the feeling of seeing, I don't know, a balance of $40,000 go down to $5,000 is like, "Oh, it's like shot to the heart." Okay, yes, validating that. However, the whole purpose of managing your money well is to be able to pay cash in actual money

for the things that you want. So don't discount your hard work and all that you've done to set

yourself up to be able to do this by then turning around and saying, "Ah, I'm just going to put myself in a financial risk in order to get this. You have the cash, and by now pay later George is so dangerous because it really does mess with your psyche, because you think, "Oh, well, this is really not that much, and it goes little by little, and then it opens up the door to, oh, this is kind of nice and clean." Well, it's you'll put it on my tab, and you go, "Well, it's only

$4 bucks here, $5, $10 bucks here, and then it becomes a habit where you go, "Well, if I needed to, I could pay it all off today, and then you lose your job." Well, then you try it with something else, you go, "Oh, that kind of felt nice, and I'm going to get this guitar." Now I'm going to do science. Oh, and now you know, better than the guy doing, you know, zero percent financing on a freaking couch, it actually furniture. So it's worth some work. And this is just, it's broke people mentality,

“and the truth is if it softens the blow to your bank account, that means you probably just shouldn't”

buy it. If it hurts your soul a little bit to part with that much money, that's your brain and body telling you, "Hey, this is a lot of money. Are we sure we want to do this?" And while buying out pay later really does, it just decensitizes your brain to go, "Ah, it's fine, but it's like a little devil on your shoulder." Go on, put it on for payments guy, you got it, you deserve it, you worked hard. I think you worked too hard to be this broke, playing broke people games.

Yeah, that is so good, George. He's predatory mentality. And these are such predatory companies, they're praying that you can't make the payment. So they can ding you with fees and interest. Yeah. There are no better than the credit card companies out there, and they're marketing touts it like, "We are the best alternative to credit cards. We're here to be your savior." You know what I think is going on here? This just hit me. This is what I think.

I think that he probably has a lump sum of money saved, and it's probably earmarked for something else. But he has this big purchase that he wants to make, and he's like, "Well, I could do it

“on by now pay later because the truth is if something happened, I could pay for it." But if the”

money wasn't earmarked for that, then that's probably why it isn't feel good. I'm just throwing that out there. I don't know if I'm right, but that's the sense that I'm getting.

Yeah. That's the bottom line, as you can't build for the future while paying for the past.

So if you got anything behind you in the rearview mirror, what are you doing? You're just wasting brain calories, thinking about the payments. There's enough things to worry about in this life. Yeah. Yeah. Yeah. That is not one of them. And that's all it is. It's a micro debt is what you're signing up for. And if you read the fine print, they'll tell you. All righty, and thanks for the question. That was a fun rant. rant over. J.R. is in Atlanta up next. What's going

on J.R.? Hey, George and Jade. I was just calling because me and my wife just built a house and we moved in. Chris was time. And we love the house. We don't like the lifestyle that the payment is going to make us live. Oh, no. Well, our priorities change from the time we started the process to now. Like, my wife works. She runs her own business. And I got moved into the house. And I just realized that I want my wife to be able to stay at home with our kids. And based on our

current payment, I, I, on my own job could not pay for the payment without her continuing to work. So I'm wondering what we should do next to kind of mitigate that risk. Or, I mean, we are willing to live with the consequences that we have made for ourselves. You can't have it. How can you? Because if she's staying home and you can't cover it on your income, you can't stay in that house. Well, sorry. She would obviously have to continue to work. And we're okay with her continuing

to work if we have to. But if we have an option to do something else, I would love an outside opinion. Okay. I'll pitch that question back to you. So you tell me, tell me what your mortgage is every single month. With the escrow, it's around $2,500. $2,500. Okay. And if you, if your wife stopped working, what percentage of your take home would that mortgage become? About 50%. Okay. So, and then you've told me, hey, also not only would it be 50%, but I just wouldn't even be able to cover the payment

to work and pay down the house and possibly refinance or I get a better paying job or we move. I think those are really the only three options that just notice them are great. Yes. Okay. I just

“wanted you to say it so that I wasn't the bad guy. And the truth is, you're finding more work.”

That's the thing that maybe allows you to kind of have the best of both worlds here. How likely is that to happen? With my current career, it's probably not very likely. I'm working on getting a CPA license. So when I finish that, I probably could make it more realistic to cover all of our bills and the mortgage, but in my current career field, it's pretty unlikely. What's the

timeline on the CPA deal? I'm probably about a year. I can sit for my first exams this summer.

And will you be making six figures right out the gate? Where I live CPAs are starting between 70 and 80. Okay. So that still won't get us there. I mean, that will we need like a take home pay more like, you know, nine-tang grand to make this make sense for you guys to carry this mortgage payment for the next decade. Right. So then the other option is if we can't get the income up, then we might need to move once your wife decides to stay home. Right. So I don't think any

things like on fire, but if, you know, do you guys have kids now? Yes, we have we have two very small children. Okay. Is there more on the way or is this it? We would love to have some more,

but we've kind of pushed pause on that until we can get our financials in order. Okay. What's the

house worth? We had it a real estate you can come and look. It was worth about 475. And you owe how much? A little over 300. Okay. So you do have some good equity in there. There's some good news in this picture. There's also the idea of her working part-time, maybe it's not an all or nothing thing, but it's I pick up these extra hours. You become the CPA. GCN, I'm saying maybe it's the combination and we kind of go, hey, there's a year horizon on this

for the next year, you work and it's not ideal, but then once I can get into my CPA role, you can back down to part-time and that should close the gap and then I can continue to grow my income and you can fully step away. There might be kind of like a very gradual transition that you can do. Okay. That makes good sense. That that a, yeah, that very, that could be a good idea. Do you guys have them outside of the mortgage? We owe about 8,000 to the IRS,

“but other than that, we are debt free. Okay. And what's your wife making the business?”

After taxes, she's probably doing between 130 and 150. Whoa. So she's the breadwinner here. Yes. Okay. But she's the one who wants to stay home. That's her dream. I would love for her to stay home. I think she, she wants to be home more, but I think she would be okay. We're working part-time. I would love for her to have the option to not work at all. It sounds like part-time is the move then because she said her wish seems to be like,

"I don't want to be totally out, but I do want to be home more." That feels like the ticket because what you don't want is to tell somebody who wants to work a little bit that they can't work because then they're going to feel trapped. It's the same. It can go either way. You also don't want to tell somebody who wants to stay home. Hey, you got to go to work because then they're going to

“feel trapped there. So I think that you guys still have some conversations to have around this”

and you have time. I would just set a timeline of like, "Hey, let's revisit this six months a year from now and see where we're at." Is it feasible for you to go part-time? Can you just stop working all together based on what I'm making as a CPA now? And I hope I really hope you guys get the

dream of first thing home and you get to keep the house. That's obviously best case scenario,

but it's going to take some sacrifice on both of your parts. Hey guys, George Campbell here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's insurance resource hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance,

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Yeah, it's with me. I just think it was from here. A ecclesiastly 712, the protection of wisdom is like the protection of money in the advantage of knowledge is that wisdom preserves the life of him who has it. Wow, I might need to read that again. Wait, okay. Wow. I'll do it on my own time. Yeah, that'll take me a while to chew on. All Solomon there is long of the tooth. A.A. Latimer said a budget is a mathematical

confirmation of your suspicions. I love that so much. That's great. I wish I had one of those names. You know what I mean? Like A.A. Latimer G.K. Chesterton. I call you G.K.

“Yeah, I think G.K. But then you gotta have a nice long, cool name. What's your middle name?”

It's Peter. It's not that exciting. Yeah, exactly. G.P.K.M. All that's not. It was hard to say. It doesn't roll off the tongue. No one's reading that guy's novel. G.P.K.M. I work on it. I'll workshop it. All right, Michelle is in Springfield, Illinois. What's going on, Michelle? Hey. Hey, I am crying to find out about retirement. How to win when the time comes? How does that work when you withdraw? You guys say 10% if you

can live off a 10%. How do you do that? What is it? You withdraw like the 10% and then her back Texas or do you withdraw like 90%. And leave the Texas and they're pulled out when I came to pay. Oh, boy. So let's roll back. Let's back it up Terry. Let's go here to your age. What's your current age? Okay. And you're talking about like 59 and a half plus is when you're going to be pulling from retirement. Okay. What kind of retirement counts do you have right now?

I just went for a one K. Is that traditional or Roth for one K? Traditional. Because when we got a Roth one, I felt that was too late to change it over. Okay. So the only retirement account you have is the traditional 401 K. Yeah, other than the kids is 529 and Grandkids is 529. Okay. How much is in there? In which one? The 401 K. The traditional 4K. 253. Okay. And you're wanting to. So let me let me roll

back to what you first said, which is you guys say, you know, if you have 10% that you're earning,

you can live off the interest. That really is a rule of thumb to kind of be thinking about,

“do I have enough to retire? It's not precise. It's not prescription to say you should withdraw”

10%. No. It's just a way to think, hey, how do I kind of know that I'm in the realm that I might be ready and might have enough? So I want to be clear on that. And I want to know if you're working with a smart vester pro at all or are you just doing this on yourself? I am newly. I actually go and do my one year check at the end of April. Okay. What I would do is I would at the next meeting, I would say how much do you think that I need to and that I'm able to pull from this 401 K

to maintain my current lifestyle? And what I would do is I would come to that appointment with my current

budget and I would say here's what I'm spending every single month and here's what I receive,

you know, or we'll receive from social security and have all those numbers and then start projecting what would it look like for me to pull X amount of dollars, how much taxes would that be for me every year and just ask how how how how how we're going to do that and what that's going to look like so that you can begin to understand it and see if you agree or not with that strategy. Okay. And they can project this all out to show you, hey, if you withdrew, let's say $60,000 total per year

in a retirement based on what you have in the nest egg, here's likely where you'd end up. Here's when the money might run out or here's how much you might have left over and they can

“run all kinds of projections to give you a big picture. Because the truth is we don't know”

what the future holds. We just know what history has shown us which is at the stock market on average produced about 10 to 11%. So based on that, you've got to take into account inflation and then you've got to take into account your actual expenses versus what your next egg is. So how much are you investing per month right now? 15% of what's the total number? It's like what you're income? 981 a month, I think. Okay. And do you have an employer match? Yes. Okay. So how much extra is that on top of the 1981?

Um, it's 3%. Um, let's call it another 102 to a buck. I'm so sorry. That's okay. I'm just guest-domating for you. And you said you had 250,000 in retirement? Yeah. Yeah. Okay. So if you can keep contributing that 1100 in there from 56 to let's say 65, is that your

game plan? Yeah, more and more. Okay. Let's put it 67. That puts you at a million bucks in that

let's say you live a good long life to 97. We got 30 years to utilize this million bucks plus social

security. And so they can then help you map out a plan for withdrawal. Obviously, you don't need to do that right now. We don't know what the future holds, but I would just keep, I'd rather have too much the not enough. You know what I mean? Sure. Keep pumping it up as much as you can. So hopefully you get your income up over time. You get the house paid off and we increase and start maxing out these accounts and you'll have well over a million plus social security that should give

you a nice comfortable life. So thank you for the call. It's a great question. It's a good way

to think about it. You're on the path to become a baby steps millionaire. Eliana, as in Chicago,

what's going on with you? Yes, hi. So I have 11,000 dollars in stock. I have 4,000 cash. But I also have a 2006 Chevy and I have four options to use the money and $8,000 credit card debt was no interest until September. Okay. So my question is where to spend it? I have four options. One, my home is a 1940 house, but I don't have AC, I have window, which costs me a lot of money during the summer. I have the old fresh and heat that costs a lot of gas. My estimate to install

AC with heating plum was $10,000. The quote. And then my kids were invited by their grandparents

to our home land, which cost around $10,000 and they were going to pay for their ticket. But I

have to be with them. So that would send me back at least $4,000 just cost them to get. Okay. So you

“could do? Okay. I also, I think I need a new car and I got a really nice deal. But the car,”

it's been a cost me 16,000 that I don't have. So I'm thinking of not paying the whole credit card and it's the car because it estimated for 24,000. It's not a deal if you can't afford it though. What's the deal? And I can't even afford the insurance for the country. But you can't do that. So that's not an option. What's the deal with your current car? You said you had a car. Do you owe anything on it? Is it worth something? Tell us about the current car.

Last year, I returned my Jeep Wrangler because it was least to own and it had a lot of recalls and I couldn't pay the maintain in 7,000 a year. I couldn't pay that. So I got $2,000 in six Chevy and it's fine but because it's approaching 200,000 miles and my work is to go with therapists,

“house to house. I'm going to break down and I'll need a new car. Has it broken down?”

No. Okay. I'm in paying it. So we're justifying a new car purchase based on the fact that once a car goes over 200,000 miles, they apparently die no matter what. Or it's going to start breaking down and I don't want to buy a car out of wood. Well, let's deal with our current problems versus the future ones that could and might happen. The current problem is we get 8,000 in credit card debt that we can pay off today by selling off the stocks, right?

Yes. You got 15k total liquid paying off the credit card brings us down to 7,000, right? Yes. And now the question is what's the priority? You having AC as we enter the summer or going on a trip that you could go on at another time. I could go on another time, but it's going to cost me an extra $10,000 and I don't even care for the trip, but my- Is it because the kids haven't covered? Or I wouldn't tell them, hey, I can't afford to go on the trip because I have

to go with them. I have to cover my share. I'm in a pickle here. I don't have AC. My car is on the fritz. I got credit card debt. And that's it. And so you prioritize the things that matter to your family right now the most, which is getting out of debt. Well, let's get the AC. Let's get an emergency fund so that we get out of this cycle. That is the only path I would recommend out. Right now a trip is a luxury that you don't have, Eliana. Thank you for the call. All right, that puts this

“hour of the Ramsey Show in the books. Remember, there's ultimately only one way to financial peace”

and that's to walk daily with the Prince of Peace Christ Jesus.