Stop Living Paycheck to Paycheck—Start Living With Options

>> Brought to you by the every dollar app, 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 and the Fairwins credit union studio, this is the Ramsey Show. I'm John Looney joined by Jade Warshall, and we are taking your calls live. >> Triple 8-825-5225.

It's got to Pittsburgh, Pennsylvania, and talk to Lauren. Hey, Lauren, what's up? >> Hi, thank you so much for taking my call.

“>> Of course, thanks for calling in, what's going on?”

>> So I'm looking for some help, prioritizing a few big financial moves all at the same time. Just gonna convince it. My husband and I have about 35,000 in credit card debt, a mortgage with about 193,000 remaining on our townhouse,

and I have about $28,000 in single stocks, and a baby do in October. >> Congratulations. >> Thank you. So we've outgrown our current townhouse,

and hoping to sell and buy something potentially next spring, but I just said listening to the podcast, and I know the baby said to say to stop investing and pay off that before saving for our house, but in our case, the timeline kind of overlaps

because of the baby. So my question is, would you recommend we sell the stocks,

and then use all of it to pay off the debt first,

even if that delays are ability to move, or do we split that money between paying down the debt, and keeping cash for the home transition, so we can still move on the timeline of like next spring? >> Well, I wouldn't change it,

because I don't think that anything's actually on fire here,

“but I think you're just really excited, which is not a bad thing.”

Do you know what I'm saying? >> Is it your first kid? >> Yes. >> Okay. >> Yeah, oh third one, but it's your third one.

>> So it's getting cramped, that's where your feeling it is getting cramped in the townhouse. >> Yeah, three under three. >> Oh boy, okay, so I can understand that, I empathize with you, I don't have three,

I have two, and that was wild enough for my life. So I love the idea that you know, hey, yeah, we gotta sell off the stocks. I love that, that's gonna clear out the majority of your debt, and probably between now and when the baby comes,

you'll be able to save up the rest of the money to clear out that debt, which, by the way, tell me again, when's the baby do? >> October 9, so early October. >> Okay, so October.

So what I'd be doing is I'd be spending from now until October saving up as much cash as I possibly can. You and your husband, that way, when the baby comes, we cash out the stocks. We have hopefully another $6 or $7,000,

we can pay off the credit card here, and then everything's all good. And we can start building up towards having our three to six months and everything like that. And to answer your question,

you do need to save three to six months before you buy that. >> Yeah, so why? >> Okay, so you've been on this road before. I remember all of the panic,

and well, most of it was in my chest,

but in my home, when we were bringing home our first kit.

And I remember just looking at this tiny little lump of a human that couldn't move and was swaddled and was laying there and was just so loud. What is it about six months after October that you couldn't manage with just bringing home

another 10-pound glob, right, you got them saying? I know I said that very nice, but. >> We know it's a two-bedroom townhouse. So we're few kids already. A boy in a girl, this is another girl.

I mean, they could share rooms, we could make it work, but it's just getting a little tight. >> Yeah, for sure, I get that, I get that.

“>> And here's the thing, it is gonna be tight.”

And John and Aaron are gonna sit here and tell you that it's not gonna be uncomfortable, but my question to you would be, how quickly can we get out of this, the discomfort and do it in a way

that's really financially responsible. So, what's you guys' income? >> Right now, I'm the primary breadwinners since I has been decided business, so I'm $110,000 a year.

>> Now, what's gonna happen when the baby comes, have you talked about that yet? Do you have, you've got what you're having? >> I have. >> Yep, I'm a teacher, so there's no maternity leave,

but I want to have eight weeks from my C-section, I'll be right back in there. >> Ooh, that's cutting a close on a C-section. That's kinda close, I'm just saying,

I'll never sing that song again, but this backs up

what I'm saying even more, because the truth is, I've had two, and the truth is, you don't know how you're gonna feel, that's the truth. And that backs up what John and I are saying even more to say,

because if you need to take a couple extra weeks,

if you're not feeling quite right, if standing on your feet for however many plus hours a day as a teacher, I mean, I'm just saying, please wait, because that's gonna give you the freedom of if you wanna take a little bit more time you can.

So, yeah, I would do that. Let's go back to what we talked about before, which is how long can it take us to stack up the three to six months so that we can then start purchasing the new house.

With 110,000, what do you see your husbands income doing between now and then? - It's kind of fluctuates right now. Like I said, you just served as business, so we're hoping you got to have a running in November.

So we're hoping that that starts turning a profit, but it's a use car dealership, so it's just inventory and things like that. - Okay. - Hopefully that will change.

“- What's his business plan, say, like what's his business plan?”

And say, what should he be making by, I don't know, say, January? - Yeah, he's hoping to have about six to $1,000 a month. - Okay, how realistic is this hope?

'Cause I hope I get a million dollars in the way home,

but probably, right, how realistic is this? - You're getting close for starting in November, he's getting close to breaking even now. - So as long as inventory can stay consistent, then it's very reasonable,

he's making about three to four right now a month, so. - Well, and there's nothing going on globally that could possibly interrupt anything, so that's cool. - That's cool.

- Cheese, please. - Man, you guys have a lot of variables here, and there's a lot of answer, and I'm not saying this, 'cause I don't want you to worry, I just want you to be smart.

When I look at these variables, I don't think, oh, there's a lot to worry about, I just go, we need to be thoughtful and how we move forward.

- When you sell the townhouse,

“how much equity will you have to put towards the future home?”

- Probably about $70,000. - And will you need more than that to put the correct down payment on said future home? - Probably a little, I mean, for like a $400,000 house,

we're thinking of like three, four bedrooms. You know, I realistically like 20% right about 80 grand, so we could say that up, I would think, but 70K, but that's continued upon selling our townhouse, of course, right now.

- Oh, okay, now I do want to challenge you on this, just to the 20% rule isn't what it once was. You know, yeah, you do 20%, you can avoid PMI, but it doesn't necessarily move that payment down to 25% of your take home pay.

So make sure you jump on to a mortgage calculator at Ramsey Solutions and just run out those numbers 'cause at this point, you're putting down usually more than 20% in order to avoid PMI and to get that payment where you want

because the rule of thumb is, and this is for anybody listening, you want no more than 25% of your take home pay tied up in your mortgage. And your mortgage includes everything,

taxes, insurance, HOA fees, right? And so just lock that in, Lauren, all you just gotta take your time, please, wait until the baby's born. Save up a bunch of money.

Once the baby's born, you pay off the debt. Once you pay off the debt, you stack up three to six months of expenses, and then, and only then, can you sell the house, knowing that you also have money on top of that 70,000

to follow the 25% rule. (upbeat music) (upbeat 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 gonna die or something? Well, I used to be one of those guys, I didn't even think about it, and one of my buddies said, "Hey, the only reason to not have life insurance "is if you hate your wife and kids,

"and I immediately went and got term life insurance." - That's a good punch. - Oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

- Me too, they don't know what to do next. - Me too, I mean, to have a crisis here, and you know, you've got two options while you're sitting and talking to a young widow. She's concerned about how she's gonna invest

all this money properly and not miss this up, or she's concerned how she's gonna 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.

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are called 800-356-42-82. (upbeat music) - All right, it's got the Kansas City Missouri and talk to Melissa. Hey, Melissa, what's going on?

- Hi, how are you all? - Doing great, how are you? - I'm doing good. - What's going on? - Sorry, a little bit nervous though, bear with me.

- Oh, you're good. - Okay, so my husband and I have been married for almost 20 years, and we recently combined finances. - What led to that combination?

- You know, we just never combined them.

We got married very young. We just never combined them. And after we had my son about 11 years, ago I started asking him to combine them 'cause it was just a struggle

to see who was paying for what.

“And about 18 months ago, after he got out of the military”

and we settled in a house, he said he agreed. And it just, it hasn't been what I thought it would be and it's very frustrating. It's a creative budget, but he won't stick to a budget, he won't help me create a budget.

And I just feel like his spending is out of control. And it stresses me out so much. - So, the problem is that you're combined income,

the problem is you have a husband

that won't do a life with you. - Right, like the flashing alarm signal is the overdrawn accounts. The real issue here is you've set down with your husband and said, "Hey, can we do life together

after being married for two decades?" And he has said through his actions. No, thank you. I'm gonna keep doing what I wanna do. - Yeah.

“- And so, what's the state of y'all's household finances?”

- I recently got a huge promotion. I doubled my pay almost. - So, I am now earning more than he is to tell us about his 2008 benefits. I'm earning over 90,000.

In our household income, we make about 12,000 met in our account. And it just, I was kind of trying to put the money away. I just feel like it slides out somewhere. And it gets me in hobbies all the time. He has a fair bike and a four-wheeler and I just don't know

what to do to make him understand that I'm just, I want the best for our family, so I don't wanna be strapped down with that. - The only conversation I've seen be effective is the conversation beneath the money issues.

And so, if you have harassed him for an unambient provocative on purpose, okay? If you've harassed him for 11 years, we need to combine money, we need to combine money, we need to combine money, we need to combine money.

And he gets home from deployment, he gets out of the military and says, "Fine."

That was never the issue.

The issue is you saying, I don't feel safe when we owe people money. I'm scared about our financial future. Will you help me feel less unsafe? Right, because that's really what's happening underneath all of this.

And every time a four-wheeler shows up at the house, your body goes, "Uh-oh, what about college? What about our bills? What about, what about, right?" If you haven't had that conversation,

that's the only one I've seen be successful. - I feel like I have had that conversation. I've tried to put it on like this scares me. This is what I worry about. I just--

- What does he say, "Baddle?" - Say, "Okay, we'll sit down some time and we'll go over it." And then when I get to that, "Hey, why don't we do it now?" Or, "Okay, can we schedule a time?"

There's always something, and it just continues to be pushed back. We said a deadline. We were going to start in July of last year. And nothing happened.

And then I asked them again as a new year. It's like, "I really would love us to put a budget together "because you didn't like the budget I've put together myself." And he just, he doesn't. He thinks because we can make the normal payment,

and we can still, you know, go out to eat,

And I'm just like, "If we can buckle down for a little bit "and get out of the debt, we could live so much better. "We could give more opportunities to our funds." And it just, I just can't get that from him. - I'm going to give you a framework, okay?

This is like a last-ditch framework, all right? You ready for this?

“I want you to tell them that you need to have”

a big conversation with them. You know, he might roll his eyes to my belly, like, "Oh, here we go again." And, but I want you to hold firm, okay? And when you have this conversation,

I want you to tell them this and this order. This story I'm choosing to make up is, or the story I'm making up is, you don't care that I can't breathe in our house. The story I'm making up is, you don't care about

our financial future and that we're not safe. The story I'm making up is that doesn't bother you at all, and it does bother me and you don't care. And based on those stories that I'm making up, I feel scared, I feel alone in this marriage,

whatever your feelings are. And then give him an opportunity to respond. And if you sit down and say, "You're not doing this "and you're not doing that," then, and you lead with you words, he's gonna wall up and defend himself.

We all do that. But if you say, "Hey, I'm making up stuff about you." Am I right? Then that's an invitation. And if he walks away from that table,

then you're gonna have to,

“I mean, and Jay and Craig, we're from wrong here,”

you're gonna have to begin taking ownership of your future, right? Because he hasn't seemed to have interest in that. - Yeah. - Right.

That to me is the last-age framework that teach people to handle conflict in their marriage, just own the story I made up, own the feelings you have about it, and own what you're gonna do next.

And if it makes sense, give them an opportunity to respond. - Okay. - Yeah. I wanna play Devil's Advocate on this for a minute, because when he was deployed,

what type of work does he do in the military?

- You know, he actually never deployed.

As he only had some TV-wise, but luckily, we never had to go through a deployment. He was in for 17 years and gone out two and a half years, three years ago. - And what type of work did he do?

- He worked on the jet on different jet. - I can tell you what I'm thinking,

“and I think that this is all in the context,”

also of what John is saying, and counseling, whatever that looks like for you guys, 'cause I do think that you need counseling with a third party. There's part of this where, as you're waiting,

for him to man up, 'cause I think he needs to. And I don't think you just need to sit there completely. I can't move, I can't do anything, because I'm waiting on this guy to get his life together. - No, no, no, take action.

- You've got to take action. And I remember talking with a friend of mine who was dealing with not exactly the same, but similar. And what she would do is she found out the things

that were most important to her husband.

And she was like, I'm gonna make sure that that's on the, but I'm gonna go ahead and create the budget. I'm gonna offer for him to see it. If he's not gonna look at it, that's his choice, but at least I've made it.

And I've said, here it is. I would love for you to look at this by X amount of dates, because I'm gonna move forward with what's on here. And what she would do is she would budget for the things that she knew he cared about.

So maybe he loves going to the movies, so she'd put a little bit on there for him to go to the movies. That way, it's not anything that's gonna make him walk in and be like, "Yoon, what are you doing? Dada, dada, dada, dada, dada."

So that's what she did. And she would say, hey, there's this amount of money left in margin. I'm gonna use that to pay off debt. And then when the time came, she'd pay off the debt and then she'd come back to him and say, hey, just like I said,

I use that money and I paid off a $500 medical bill. So she did her part, she did the budget, she showed it to him. She made payments, she let him know the things that she was paying off. And then over time, he started to see, wow,

this is really working now. Cavia, he's not on board yet, she's going forward. She's going forward at a much lower pace because you go further faster together, right? We all know that.

But I don't want you to sit there on your hands simply because this guy is not manning up. - Yeah, that's a great way to say, become the person you want to be in your marriage. - Yes, start doing it.

- Right, and if that ultimately means

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

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

- That's exactly right, be who you want to be in your marriage. (upbeat music)

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- While the cost of living among other things. - Yeah, you're exactly right. It's higher and higher and higher. How can we help brother? - Yeah, yeah, so I've got a question

looking for an outside opinion. I'm trying to figure out a good way that's not gonna cause any strength, excuse me, cause, well, any major strength. To get my girlfriend on board with the baby steps

and create a solid plan going forward. - I think you should give her a budget, a budget that you've already done and lecture her and use a bunch of spreadsheets. - I think that's several advice.

- Yeah, don't do that, don't you? - What does she have a bunch of debt

“and you're trying to convince her to pay her debt off?”

What's the catalyst for this that you feel like you want to metal in her finances? - So, you see what I'm doing here, John? - Why, yeah, why do you get in her business, dude? - It's reasonably good, I think that's her.

So, for Christmas, my mother sent her one of the one of your budget evaluation books. And she was really good about it. She would literally went right through it and did all the math and tried to figure out

what she could do differently. And the conclusion that she came to is that her life expenses are too high but she has no idea, like even listening to the show looking through the baby steps, talking about it.

She doesn't have a clear picture of how to get out of it. And there's a good reason, she's a single mother with a five-year-old. - Okay. And do you know how much debt she has?

- A lot less than it was. She has about $4,000 in debt right now. - What sounds like she's crushing? - Yeah, why isn't she calling in?

“I'm still trying to get back to you, like what's it to you?”

Are you thinking about proposing? Are you like, tell me where you're caught up, hung up in this? - So, I am $26, I have like $2,000 in debt right now. Excluding my mortgage, my house is almost paid off. And the only reason that she's so far ahead

was because she totaled her car a little while ago and the Daphinsurance paid off her car, which she was upside down. And so she got a lucky windfall, which is good. But since then, she hasn't made any forward progress at all.

- Has she asked for your help, brother?

- Okay. - Also, how did she ask for it?

“- Well, first she was in tears, not knowing what to do.”

And I was doing my best to, you know, be patient, and wait for her to be in a position to be receptive. And then I explained to her what I did and how it worked for me and why.

But each time we talk about it, she always comes back to you,

but you make so much more money than I do. - What do you make? - This is so much easier for you. I make about 120,000 a year. - And what does she make?

Do you know? - About about 25. - Okay, yeah, that's gonna be a problem. What kind of work does she do? - She's a delivery driver for a car dealership,

delivering parts, and all that stuff. - I can tell you what I think. And I don't know if you're gonna like it. But this is something that is, this is a litmus test in my mind.

If I were in your shoes, 'cause I'm just telling you in my shoes, it's bothering me that she didn't call in, because if I wanna see if somebody's a go-gitter, and if I wanna see if somebody is about what they say,

they wanna do. I wanna see you making real efforts towards that. So I would hope that she would call in and say,

here's where I'm at, here's what I need help with,

here's what I'm trying to pay off. That would be my, if I were you, that would be my question to her, which is I listen to the show where both on this thing, why don't you just call in and ask?

Or why don't you use Ask Gramsi and get the solution to the problem? That'd be thing one. The next thing that I'd be checking for is I'd wanna make sure that she's not an Ask Cole.

And what I mean by that, I talk about this in the book. When you're an Ask Cole, you're a person who asks questions over and over, you just ask and ask and ask,

but you never make any movement. James Clear talks about that in an atomic habits. You just get in, get in, get information, but you never actually, you know, put an information, you don't do anything.

- They're podcasts, they look up a coffee.

“- I'm worried that that's what she's doing,”

because you've said, "Oh, I've talked to her, I've told her what to do." She's just not doing it. So that's something that you can either take that information and go, this is a quality,

and I don't know how I feel about that quality in her. - Yeah. - That's kind of the zone that I've been in, often on for a little while. - Yeah.

- How long have you all been together? - About two and a half years. - Are you getting married this person?

- I'm never, that's a hard question for me to answer

because after two and a half years, it's about to state being involved in my relationship. That's the only reason. - Oh, well, I just finished a two-year study, like a down the rabbit hole, study on marriage,

and the data on formal legalized marriage, versus cohabitation, it still wins out in a pretty significantly statistical way. A statistically significant way, it still does. But all I'd to say is you do you, boo.

I'm fond of saying behaviors of language, and what her actions are telling me is, she's not interested in your advice. She's not interested in what you were bringing to the table when it comes to this stuff,

and she's not interested in, she read the book, she listens to the show, she's not interested in going, guns ablaze, and to get the stuff knocked out. And she has a very difficult living circumstance, no question about it.

She doesn't make hardly any money, she's a single mom, like all, she's got all the variables against her. But again, the greatest thing I get to do in this job is listening to story after story after story

of people in all sorts of situations rise up. And so, but for you, you can't convince her, you're living it, you've told her. She's asked, and you've told her. Your mom has given her the book, like,

“at some point you have to open your hands up”

and let this conversation go and continue to live financially the way you wanna live. - Can I ask you this? Her five-year-old is he in kindergarten yet? - Ah, she, and yes.

- She's in kindergarten. And that I'm guessing this was the first year of kindergarten. I also, I'm just gonna give her, I'm gonna throw her a life draft here and say, it's possible that maybe before the girl

was in kindergarten, mom was used to working part-time and kind of juggling both things. So she probably wasn't really making what she could and come wise. And this is the first year that there's more freedom,

probably of schedule. And I'm wondering if, and you can ask her about this. Hey, now that baby girl is in kindergarten all day, maybe now's a great time to start looking at full-time jobs that you can work, you know, drop her at early care in the morning,

little girl up from school, but now's a good time that you maybe could get your income up because, you know, as well as I do, there's two parts to the equation, expenses down or income up.

I think for you, it's income up season.

“And you can drop that there and see what she does with it,”

but I agree with John that behavior's language. So I completely agree except she had a huge advantage as that her daughter's father, his mother, so her daughter's grandmother on her father's side, owns a daycare.

- Oh, okay. - And part of their separation agreement was that he would pay for child care. - Well, then there you go.

- That was, so that was never an issue.

She would drop her off before work and then go work. This is working 38 to 45 hours a week and bring it home, less than $500, which today with regular living expenses can't do it. - It's impossible, yeah, but again, I hate to say it this way.

She has told you through her actions. This is not a problem that she wants your solutions for. And that can make you feel powerless and alone. I get it. (upbeat music)

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(upbeat music) All right, it's got to Kansas City, Kansas and talk to Grace. Hey Grace, what's going on? - Hi, thanks for having me. - You bet thanks for calling.

- What's up? - What's up? - Yeah, you can basically be my husband. We, someone got in our bank account and we lost eight thousand.

And so we just have a few questions of should we continue trying to pay off our health in 10 years, but we also need a buy a new car soon 'cause it's cord about to die, a baby, due in July,

and other appliances in the house are about to die

and we need a new roof. - Oh, it's a full roof, it's like everything's happening. All right, so let's, let's hang up a little bit. Okay, so what happened in your bank account? - Someone bought into it and took eight thousand.

So hopefully we'll maybe get it back that we highly doubt that we'll get any back. - Why? - Why is your bank not covering it as fraud? - I'm not really sure they're disputing it,

but we don't know. So why, how did anything for 30 days? - But how did somebody get in it? - It's made a mistake and it might have given some of who he thought was the name,

because he's a count. So they, - I don't mean it. - So it was a sin now. - But I mean, if that happened,

they'll be on camera coming into the bank or they'll be a record of the transaction. Like everything we have for you. - Yeah, we have records and please report and all of that.

We're just, we're counting that out the wall and they do all get stuff back and maybe we want. So we're gonna set a plan before. - Okay, I wouldn't count it as a loss yet. Money just doesn't disappear out of your account.

- Yeah. - You know what I mean? - Yeah. - Untracably, right? And the bank has all kinds of fraud protection

and ATM card protection. I, there's a lot of things here, right? So I wouldn't just count as a wash yet. - You, you named a one thing that's for sure happening. You're having a kid.

- Soon. - Yeah. - And then you named a bunch of other potential future things that may or may not come to pass in two months or in five years.

And so I wanna clear the deck of what you can control

because something in the future may happen. - Did you get what I'm saying? - Yeah. - Is this your first baby? - No, it's my second. - Your second is 18 months apart.

- Okay, so you got a lot going on in your house, huh? - Yeah. - Okay, all right. What's your financial situation? - It's actually pretty good. We have about 55,000 in savings.

- Okay. - We only have a mortgage debt. I'm gonna stay at home mom and that's about it. - What's your husband make? - Maybe around 50 years, he's accidentally military.

- Okay. - Pretty consistent. - How did you get $50,000 in cash savings?

- I have always been a saver.

And so when we go Scott married we kind of just

“can join with everything and that's what it was.”

So we're gonna go to college so we don't have any debt and we were smart not to have credit card debt. - Genius, that's very classic. Yeah, incredible. So you're actually an pretty amazing shape right now.

If he feels the need to go get a $78,000 truck or get a $50,000 Jeep and then jack it up and like that would be really unwise. - Yeah. - You have $50,000 of cushion. - You want to pay in cash?

- Yeah. - Yeah, it's great. But I mean, you could cash flow your out of pocket for this baby. And fix your appliances. And get a $10 or $15,000 car

that would be used and great.

And still have a fully funded emergency fund.

- So is that like the main thing we just wanna have at least six months in our savings? - Yeah, I mean with you being a state home mom, everything else is much. - Yeah.

- Tell us about the new roof. - That's just old and it's like we've had people look at it and we've probably needed to really do it in about a year. - Is it leaking or not yet? - Okay, how much does it cost in your area?

- I know. - I have no idea, my husband knows all that. - Okay. - So I don't think that's anything that's on fire at this moment.

“I think the things on fire are the baby.”

- Yeah. - Is there anything else that's like must happen now?

- Well we had a plan of paying our house off in 10 years.

So we used all our tax return to the tour of mortgage. - Yeah. - And I just wasn't sure we should just put that into our savings for that 8,000 that we lost. - What's the balance on the mortgage?

- It's a 159, 716, sorry. - Okay. - So I'm gonna try to order this in order of importance for you. And I'm gonna order it in importance in a way of like,

here's something you can be thinking about this year. And here's something you can be thinking about and don't think about until next year, all right, until a year from now. So I just wanna make sure I have everything on the list.

You've got the baby coming in July. You have a new roof situation. Did I hear, there's a new car needed? And why is that? I just wanna make sure that it's actually an assessor.

- Yeah, so my husband bought a trash truck. It's the market friend, and it just keeps breaking down. And he keeps working on it, but it's gonna need rewiring soon. And that's like too big with job for him to do.

And then it costs way too much time in the can of bill. - How much? - And so, not what it's worth for the car. So the car's probably worth 2000, and it was over that.

- Okay, okay, and then we've got the baby. Okay, so I'm with John. I think the number one thing on the list is, we're going to not do much until this baby comes.

“The only thing I would do until this baby comes”

is I would take 10 of the 55,000, and I would get a car and cash. I would do that, because this $2,000 car, you don't need to put any more money into that. After that, once the baby comes,

and you've got $45,000 saved, you can start thinking about, okay, what would it look like? You know, everybody's home, medical bills paid, everything's good. What would it look like to fix our roof?

And I'd start charting that out, and I'd start getting different offers and estimates of what that would cost. And then once you have the number, since we don't know the numbers today,

what could it be 20,000? Maybe it's 15,000. Then we can start saving for that. And we can look at our emergency fund and say, is there enough money there to do that?

If there is, we can use that. If there's not enough money, how much more do we need to save in order to make that happen?

that's exactly what it's there for.

So that's there. And then after that, you can start thinking about, okay, what the extra money in our budget, can we put regularly extra payments, extra half payments, extra quarter payments,

on our mortgage? And that's that. Because you're also assuming he's only going to be making $50,000 bucks two years, three years, five years from now.

“- Which you have, you should still be getting”

races every year. - Exactly. - Now, can I ask you a personal question? - Yeah. - Have you been involved in the conversations with the bank over the missing eight grand?

- Sort of, my husband knows more of it. - Okay. - Just keep taking care of it.

And it's like, I got so stressed out

I was throwing up too much and it didn't meet you are. And so I just kind of like left it. - Okay, I don't want to put anything out into the world that doesn't need to be there. But it's not passing my smell test.

- That $8,000 just suddenly went away. In my world, that is somebody gambled it away, that is somebody bought something. - No, no, no. So I was involved with the police reports.

And like, they got into our bank account, transferring money out with they actually got his whole card too. So they took his card. So we had it all on video tape. - Okay.

So there should be fraud protection on the card. And that should be open to we just haven't heard anything. - And so we're like--

- I would scratch and claw and fight like hell.

You're a pregnant mom with a toddler. You got one coming. I would, man, I would make this my full time job to be the biggest $8,000 thorn in the side of that bank. Until they made things right with you.

- I thought I heard you say he gave the account information to somebody he thought was the bank. I thought that's what I heard. - Or he took the, somebody got his card and got the information.

- Oh, okay. - But yeah, if he's handed out his banking information, because then my money's gone. - Well, yeah, because then my question was,

“well, what was he given his banking information to for $8,000?”

- $8,000. - That's right. Or if it was, did he give it $50 and then-- - They took it. - Yeah.

- Yeah, there's a lot of questions. - But I would scratch and claw and fight for that money back. And hopefully the bank will do the right thing and take care of you guys. (upbeat music)

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- Welcome back to the Ramsey Show on the Fairwins Credit Union Studio. I'm John Deloni joined by Jade Worshal taking your calls on money, work, and your life. It's got to Detroit Rock City and talk to Tammy.

What up, Tammy, how are we doing? - Hi, good, how are you guys? - Doing outstanding, it's going on. - So, I have a question. Something has been a nice started.

The Ramsey baby steps about two years ago, about five years before that, we had already gotten into our home, so we had already signed for a 30 year mortgage. So, we've completed the baby steps.

We have no debt except for the rest of what we have to pay off our mortgage, which is 160. No other debt, we have our emergency funds saved up. Just trying to figure out how to prioritize paying that off. So, we both work, but I'm considering coming down my hours

to almost nothing to possibly homeschool our children in the fall, so that would take our income down by, we're from like three to four thousand a month, which would then, so before we were, when we were through the baby steps,

like one, two, three, we then were doubling our mortgage

because we had already signed the 30 year, but now I don't feel like we're gonna be able to do that with my cutting income. So, I don't know how we prioritize, and we have extra margin, we prioritize our investing,

15% or paying extra on the mortgage, or we've even contemplated completely picking up and moving, and we could probably sell our home for about 600 to 6/3, and we don't realize that we don't really need as much land as we have,

so we could probably get in something comfortable with like a net zero of no mortgage. - Wow. - With less money. - Well, I think there's two problems.

“- I think there might be two problems you're solving for,”

and I'm not sure that one of them is even a problem.

So, first off, yeah, if you tell me that you were paying

your 30 year mortgage like a 15, and then you tell me, and by the way, I'm not gonna be working anymore, and it's gonna cut our income in half, and now we're gonna be at how much per month,

when you do this 4,000 a month? - Well, no, so I bring home probably three to 4,000 but my husband went home about eight to 10. - Okay, so you'll be just to eight to 10,000 a month. - Yeah.

- And my mom. - Yeah, I would not expect the margin to be the same because you're no longer bringing an income. - Right. - That being said, what you can look at it and say,

okay, with the eight to 10,000 a month, how much margin do we have to continue to do baby step 4, which is investing 15% of your gross income into retirement after doing that, after putting aside a little bit for kids' college,

how much do we have to put on the mortgage? And it's okay if it's a little bit less than it was before. It's okay if it's significantly less than it was before. You're gonna keep chunking away at this and that mortgage is going to go away.

- Yeah, okay. - Okay, just a point. You normally went from approximately three to five to seven years to now looking to go to like now we can't pay it off for like 22 years.

- Yeah, well, I don't, you know what I mean? - I don't think it's gonna be 22 years. - Yeah, 22 years. - Have you put it in a calculator? - Well, I mean, like if we got our third year mortgage

eight years ago. - But you've been paying it like it was in 15. - Yeah. - You've paid it way down. - You need to, you need to put it in as it is now

and see how long it would take with whatever, with whatever margin you have. And then if you look at that number and go, we're not satisfied with that.

“Then you have to ask yourself, okay, what's the solution?”

Maybe while I homeschool, I do a little bit of part time work, maybe that's the solution. But I think you guys can solution for that. Let's talk about John, the second problem that may not be a problem which is we have a lot of land, maybe too much land,

maybe we should move. I wanna know if you really want to move or if you're just thinking about that because you feel like you have a problem in your current house. - I mean, I don't feel like we have a problem in our current house.

We just right now, we have about eight acres and we could be comfortable with three or less. And that could move us to a comfortable home and eliminate the home mortgage issue. We're like, we like our home,

but then we're also thinking that being mortgage free and have the extra margin to be able to do extra things and so-- - I love being on the mortgage. - How many kids do you have? - We have two, five and eight.

- Five and eight, okay. Can I throw another idea out here? - Sure.

“- I wanna flip that your whole situation around, okay?”

You and your husband have worked your butts off for a long time to get into the exact situation you're in right now.

You all have a more than half a million dollar house

and you have 160 grand left on it. You don't owe anybody anything. You are deciding, I might just wanna stop working full time and I want to invest fully into my kids. - Right.

- Y'all are winning all across the board. I'll stop my head, I forgot the psychological construct here, but here's the basic nature of it. If Dave Rames, he called me, texted me and said, "Hey, I'm gonna give you a huge raise, come by my office."

And I went by his office. And for him to say the words huge raise, I immediately thought he's gonna give me $100,000. And he gave me $25,000. He said, "John, you've been doing great work.

Here's $25 grand, my gift to you." I would feel like he took 75 grand from me, because I made up a story in my head and my body started solving for that story. I would've spent 100 grand by the time I went up to his office

on the sixth floor of this building, right?

And so, here's what I want you to be careful of.

You're grieving a reality that was never a reality. It was a story. We're gonna pay this house off in five years. It's not a tragedy that you and your husband chose a different value, which is homeschooling over another value,

You just put one in front of the other for right now. That's a choice you all made.

“And it's disappointing, we're gonna agree with the fact,”

"Man, we thought we're gonna have a thing knocked down five years. "Cool, we're not. "We're gonna spend extra time with our kids "and we're gonna get this thing done in 10 years." Right?

And so, I don't want you to hang on to the story

because it's casting a shadow over a pretty amazing situation

that you and your husband have worked like crazy to set yourself up in. Right. - Y'all are winning. - Okay.

- You get them saying, and not the trail of the sheenway, but like, y'all are for real winning, right? - Yeah. - I guess like you said, I've gone through a grieving process of losing that thought and that turns out.

- And let me put one more thing on the table. And I've said this a million times in this show, I'll just keep saying it. Whenever me or my wife are both of us feel himdened by an either or decision,

I have to stop working and homeschool the kids or I gotta keep working and hate every day.

Here's what I want y'all to do.

I want you to throw on the table five or 10 random other ideas. Sell the house, work quarter time instead of part time. Have the kids stay in public schools for one more year or two more years and then let's hyper drive this thing

and get it paid off in insane fashion and then we're done for it. Like, I want y'all to do this exercise 'cause it will remind you that y'all are free. Y'all are in the driver's seat

and you're not in an either or like dire situation. We gotta turn right, we gotta turn left and one of these is gonna be the worst decision ever. It's just not the case. One of 'em's not gonna be,

you can't have it all the same time, but man, y'all are in a pretty good spot. Do you understand? - Good. - Yeah, yep.

“- So congratulations there, Jaydeny's any final words?”

- No, I thought that was really, really a good way to frame it up. - Cool, I'm proud of you guys. This is what I hate to say it like this, but this is what freedom looks like.

You get to make choices. And, but you still have to own the choices that you make. (upbeat music) (upbeat music) - Hey guys, healthcare is one of the biggest

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(upbeat music) Cincinnati, Ohio. Let's talk to Shawn. Hey Shawn, what's up, man? Hey, thanks for taking my call.

I had an interesting question for you guys. It's basically that we're in the middle of baby steps too. And for personal reasons, for religious reasons, we have to send our children a private school. And so, we have two kids.

We send them both a private school that costs about 1,600 a month for that. And we were just kind of trying to figure out

“the best way to approach baby steps too,”

like just because every year we're gonna have to pay that. So, we didn't know should we pay off all of our best, accept that one, and then try to stay ahead of it for the next year by paying it all at once.

Is that monthly payment okay? What point do we address this?

Kind of is because we know it's always gonna be there

every year, and it's really important to us that our children go to that school. - How much debt do you have? - We have about 20, not including our house. We have about 20, 8, 9.

- Okay, and what's the income? - So, combined, it's about 78k a year net.

What do you bring home?

- I bring home about 2300, 20 weeks, so it's about,

- Okay. - Yeah, 4,600, 20. - Okay. - I'll come. - With that 4,600, what's your margin that you're throwing at this 28,000 of debt? - So we're good to bet it's made up.

It's about 6k in the car, and it's about 22 in student loans. And so that 4,600 and month was just, that was just mine, my wife bring something out. I don't have 1,400. - Okay. - A month, and of that,

we're doing about about 365, 365 months due to loans, and we're doing about 400 on the car, just because minimums on the student loans are more or less that, the car minimums about 2,500. - When you say 365 and 400,

is that above the minimum payment

or is that including, - Yes.

- Okay. - On the car, it's above, it's above. - So you're putting 700, you have a margin of $765 over and above minimum payments that you're putting towards your debt. - Yeah. - Okay.

I would, tell me if this bothers you. It bothers me that it could foreseeably take you two years to pay off $28,000 of debt. - Yes. - Okay. - So then the question becomes,

what are we going to do about that? - Right. - And I'm asking you, what are you going to do about that? - I mean, we're just kind of, you know, taking it day by day, we're trying to.

- But don't say it day by day,

'cause I just rolled out the math for you.

It bothers me that it would take you over two years to pay off $28,000, and you've said it bothers you too, as it should. My real question to you on the line is, what are you going to do about that?

- You may change if you're on some more towards it. - Yeah, so there's two things you can do. - There's two, there's, I'll give you a hint, 'cause there's two factors to this. You can either decrease expenses

or you can increase income or you can do both together.

“- So where do you think you're greatest potential lies?”

Does it lie in lowering expenses or does it lie in increasing income? - Right now, probably decreasing expenses. - I would say that, but I also know for you, it felt like the 1600 was immovable.

- Yeah, it kind of is. What is that? - That's for personal reasons. It's personal reasons. I really prefer not to get into on the air, but just assuming that that is the reality.

I'm curious how you guys would address that. - I know you guys would disagree with the premise that it's the reality, but it would work. - If you tell me, listen, it's your life. If you tell me this is immovable

and I'm not shaking on it, then I'm not gonna waste my time trying to push you on it. - But what is movable is, are you willing to work weekends? Are you, is your wife who makes 1600 a month? Is she willing to go find a full-time job

and double her income, not the kids are in school? - Right. - 'Cause you can go make more money, especially for a sprint to get this thing knocked out. - Right, and so I guess I'm kind of asking, knowing that that expense is gonna be there every year.

Would it be, stay so far ahead of it,

“you're paying the thing in full at the start of every year and half?”

- You can't afford it, that's not a relevant question for you, you can't afford that. - Yeah, because then what happens, then the equation becomes this. It's cool to side hustle and sprint, like John said,

when you have a short term goal, but that's not a long term, that's not sustainable long term. So to your point, if this 1600 is gonna be part of your life forever, now you have to start looking at long term measures and going, okay, my core income just does not sustain the life

that I want, that means I have to start looking for ways to get my core income up. So that's either, I switch my full-time job, I move to a less expensive area, I go to a place where there's jobs that pay higher.

Do you see what I'm saying? So we really have to decide, and I'm working on your framework, which is 1600 is not movable. If that's the case, then you guys,

“do you need to look at solutions that are a long term solutions?”

We can help you sprint to pay off the 28,000, but that's not gonna solve a 1600 line item and further foreseeable feature. - And monthly, yeah, it's a bill, it's a water bill, it's a light bill. You don't need to save up 16 times 12 or 16 times nine

and try to figure out how to come up with that many thousands of dollars. Like, hey, you can't, you don't make that kind of money,

Just same as you're not in debt to the cell phone company.

- Right, right. - It's a bill. - Okay, so just treating it kind of like that, kind of like a really expensive water bill. - It's a very, very expensive bill.

- It's a bill. - In terms of tackling, I got you, yeah, thank you. - Now, when you might be closer than we think,

“so let's see here, your minimum, what's your minimum car payment?”

- 233. - 233, and what's the minimum student loan payment? - 360. - Okay, so we're getting close if we add that up together, 'cause you told me before the 765

that does not include minimums, right? - Right, so minimum is 233,

you paid about 400, and then the minimum on the student loan

is about 350, you pay like $3.65, just a total of something on top. - I mean, that puts you at $1348 that you have back in your budget once you pay this debt off, which it's not 1600, but it's fine in you

a little bit of money to put towards that. So that's the gap that you're gonna have to close, but just remember when you do that, you're not gonna have any other margin. - Right, for sure.

- So you've got, you've got your work cut out for you. What do you think you're gonna do? - We're gonna be three expenses. - Can your wife not go earn more money? - Not really, no, but I'll find ways.

I'm gonna go work. - Just, I'm just telling you to do. We even do this a long time. Those words, I'll make it work. Are our famous last words?

“- Well, you make one deal with me, though.”

- Sure. - Well, you promised me you just won't go into debt to make this work. Because what I see is what I'm most worried about for you. You're a decision with your school.

I'm not gonna take you to task on that. You're gonna value what you value. So don't hear me say that. This is a terrible thing. But what I'm afraid for you is if it gets tight,

I would hate for you guys to start leaning on credit cards or anything like that to fill these gaps. So just promise me no matter what you do, please don't let this be a recipe for you to say yes to debt or credit.

- Yeah, fair enough. - For sure. - And I'll just tell you, your language is of a man who's trapped.

And trapped men never make great choices long term.

- Great. - Okay. - Okay.

“- And so if that means if your wife can't do anything else,”

if there's just no options about the schooling, then you might have to look in the mirror and say, okay, I'm gonna have to go into their job. I'm gonna make some more money. I'm gonna have to work two or three jobs.

Like millions and millions of men are doing all across the country to provide for their families. But it might take that kind of sacrifice and that kind of change. But man, I get real nervous.

Anytime I hear a man who sounds trapped, because that's when, like you say, Jade, that's when they start making gambles, they start making bets, they start day trading, they start crypto, they just start doing stuff

that they normally wouldn't do. And man, they find themselves in a big, big mess. You're not trapped, brother. (upbeat music) - Buying a home is one of the biggest financial decisions

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or click the link in the show notes if you're listening on podcast or on the tubes. It's got to Los Angeles California and talk to John. Hey, how are you guys doing? - We're doing great, brother. - I'm going to call.

- Thanks, you stay from calling. What's up? - No, thanks. I'm just looking for some advice. So, I've got a unique situation. My grandmother passed away a few years ago. My dad's mother.

“He's got a second cousin that kind of contested her will.”

It took about two years. He spent about $60,000 of his own money. We don't know how much his in her accounts. And in the end, he's now asking, "She circumvented him because they don't have

a great relationship." So, in the end, the money's gonna end up going to me. And I have a great relationship with my mom. They're still married, but, you know, he's telling her to tell me that once I get my money,

that I owe him the $60,000. So, I bring this up because when it came time for me to go, again, my master's degree, I was looking at going to these coasts. He couldn't just go stand the west coast. He said, "I'll pay for you to do the loans."

He didn't. I paid out the $150K. So, like, with all this kind of going on, and he kind of trying to use my mom to guilt me, and to paying him back, like, "Am I all the way to paying the $60,000?"

Or, she has wipe it out, considering he never came through his pants

for my college. How old are you? I'm 40. 40. How much money are we talking here?

I don't know. That's the thing. It could be a dollar, it could be $300,000. I'm assuming, since one of the second kind of is trying to contest the well at the decent amount of money, probably three to five hundred grand.

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

When's the last time you called your dad and had a grown-me in conversation? Well, because here's a deal. This is how kids work. Hey, tell Susie that I've got a crush on Sutton,

but don't tell her that, like, and then Sutton tells Susie, "Well, John, I don't-- You see what I'm saying? Y'all play in telephone through your poor mom? Y'all are grown men?"

Yeah. No, no, we haven't spoken in three years. You got into a fight with my wife, and obviously I chose my wife's side. Yeah, if he wants to be a grown man and call his son, and say, "Hey, I fought this.

It's this much money.

Here's what I spent on it.

It feels right to me that you would come back." And then you said, "Well, let's have a deeper conversation. You told me you'd pay for this, and then you walked away." And I got stuck with 100 feet. Have a grown-up conversation, okay.

But I'm not going to play telephone with my dad. I would tell my mom, "Mom, I don't want to hear any more "if the past through, if Dad wants to talk to me about money, "he can call me like a grown-up." And for you, brother, you did the thing.

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

Ah, too many. Exactly. And you always win 'em. You get this mic drop moment. And he's like, "You're right, son. "I love you and you write you 150."

None of that's ever going to happen ever. Yeah. And so every minute you choose to engage in that, is a minute, I mean, is a choice to not have the energy that you could spend on your wife, on your kids,

on the life you're living right now. You did the noble right thing. Yeah, how to problem with your money. Somebody didn't show up for you and you paid it off. I'm proud of you for that, dude.

Thank you. They step up and solve a problem. I would tell my mom, "Hey, mom, I don't want to have any more past through conversations. If Dad wants to talk about money, he can call me."

And free her from that, and she can tell them, free yourself from that. And then when it gets to that conversation, man, I would just have a lot more questions than I could answer on you right now.

If he was choosing to go to war with the second cousin,

because he's got 70 years of disdain for the second cousin, or he thought he was in this will, and suddenly he didn't find himself in, like, who knows, man, right?

“Who knows how much he actually spent on these bills?”

He's already proven to, he's not trustworthy. So, I mean, I have so many questions here, but I don't see you under any obligation for anything

than graciously receiving this money

and being a good steward of it, as your grandmother would have wanted you to. Okay, I like that. Now, if your dad had called you three years ago and said, "Send cousin showed up, I'm going to war for this thing,

it's going to be expensive, I'm going to need an agreement from you that I'm going to spend some money on this thing, but we're going to win this thing together." I could have seen you go and, "Well, yeah, do, let's do that." 'Cause it's the right thing to do.

He didn't do that, right? Yeah. So, I just have a lot more questions than I would be able to answer in good faith here, but the way y'all are going about it,

“sounds like one of you is nine and one of you's 11, right?”

(laughs) Yeah, I understand. What do you think, Jade? I think that you couldn't have set it better and I don't think there's much else to say about this.

And I almost don't want to continue it on because you've already run through this so many times in your brain. I just want to slam the gable and go, "That's it, it's over.

You're going to get your inheritance and that's that on that." Okay, no, I like that. I didn't think it about it from that perspective either. The one thing I'll tell you

and I, all of us on this show get grief for this, when I tell somebody who's got a 3.1% more good as they got right after COVID and they think they're winning life by hanging onto it, right?

I always tell folks, dude, my financial picture,

I'm not solving for max ROI. I am simply using money to solve for peace in my life, right? And so, I use that frame on almost every single thing I do. And so, in this case, if you get a check for 500,000 bucks and 60 grand gets this person out of your life forever

and you choose to not repay a debt 'cause you don't have one. But if you choose to write a check for a soul tax for you to end this thing, you're not starving, you're left with 440 grand, right?

That can be a choice you choose to make. I can guarantee you if you do write that check, he's gonna come knocking for me. - For me, I was gonna say that's not gonna be the end of it. - It's not gonna be the end of it.

That's gonna store in my life. - There you go. And so, in you said it, you just said it perfectly. He's been doing this to you your whole life, had me. - Yeah, yeah, the room multiple times where you're sitting,

yeah, for money, pay me back, get me up for money,

“pay me back, and that's why you need to just put this to rest”

'cause it's just a drain, it's just a drain. - Yeah, I meant my answer. No, I wouldn't give him any money. If he calls you and flies down and you'll have a grown-up, over like grown-up,

adult male conversation at a diner, real shake hands, then so be a young, come up with a deal there. But short of that, no, you don't owe him any money. - Got it, okay, thank you very much, I appreciate it. - All right, brother.

Take care, man. Thanks for being a person of high integrity and wanting to get this thing right. That's pretty noble of your brother. Let's go out to Dallas and talk to Victoria.

What's up, Victoria? - Hi, thank you for taking my call. - Oh, I'm right up against the clock, so get right to your question here. - Okay, okay, so recently I got a good thing,

a good job by starting getting to debt right afterward. I'm getting married, I moved, but my big question is, I have about $18,000 in debt, but I'm getting a good bonus at the end of the year. Do I continue with a debt snowball

or do I kind of live normally and then just pay it off of the end of the year? - No, I'd continue the debt snowball. And I'd get as far as you possibly can 'cause what if this, what if you pay off the $18,000

before the end of the year? And then you just have this sweet bonus sitting there waiting for you that can be your three to six months of expenses.

“- Okay, now, or, or, I think you need the muscle.”

I think you need the, like, nine months of grinding. - True that, that's great for the soul. It's great for the confidence. - And by the way, Jade and I would not have a job

if everybody's bonus always came through at the end of the year

like they were promised. - That's true, yeah. - I would hold my breath for nothing. This show is made up of people who, the government's gonna pay off everything

and they're gonna forgive and the boss said, I'm gonna get it and it doesn't work out. Keep doing the same thing you're doing. Pay it off month by month. Practice that muscle.

If you get a bonus, check it in the year. It's just that, a bonus. (upbeat music) - The Ramsey Show Question of the Day is brought to you by, "Why, ReFi?"

Defaulted private student loans

but why ReFi helps you explore?

“Refinancing options with a low fixed rate”

and a payment based on what you can actually afford. Visit yrefi.com/Ramsy. That's the letter Y-R-E-F-Y.com/Ramsy may not be available in all states. - Okay, okay, today's question comes from Alexandria in Oregon.

She says, "My fiance and I just postponed our wedding "for the third time because he is at risk "of losing his house again." This is due to him being convicted. Hold on, I gotta get myself together.

This is due to him being convinced the business that he started five years ago is going to be a success, but it has yet to turn on profit. I've asked him to get a full-time job, so we can get married, but he refuses

to give up his dream of being an entrepreneur. I'm tired of my life being on hold while key chases success. Should I give him more time or move on? - I think you better cut it loose.

I think it's not a cut-out loose.

I mean, here's the thing.

I'm looking at this and you're writing into a radio show because you've had it. If you take the time to email a radio show, you've had it. - That level of desperation. - It's desperation.

He's postponed the wedding three times. Now, and he's almost lost his house. Like, there's no security there. Now, here's what I will say. Being an entrepreneur, if you are truly

of the entrepreneurial spirit, you are not going to everything is not gonna be awesome and everything is not gonna be a success. There's going to be ideas that suck and then there's gonna be ideas that are pretty good

and then there's gonna be ideas like, yeah, that one was it, right? So, there is part of that where there's a roller coaster to ride, but what I would hope he would be doing is in the meantime, working some sort of stable job

while he's putting his hand in all those other different things. That's the best that you can ask for. - Yes, entrepreneurship is not a pass on being an idiot. - Yeah. - Right?

It's not a pass on not believing the rules of math applied. - That's right. Or not being a person of character and integrity. So, as the great Dave Ramsey once said,

“"See ya later, Felicia, that's what I would say."”

(laughing)

This one's, yeah, here's the thing, Alexandria,

and this isn't gonna give you any more peace. He's already left you. He is married to this fantasy and he's giving it his time. He's about to give it his home.

He's giving it his energy and he's already left. You keep hanging on and 'cause you love him and I admire that about you. But he has moved on. And so, I think it's time for you to move on too.

That's our two cents, but we're a couple of radio people who have never met you before. So, you do what you want to do. I would be willing to bet 100 bucks. You're gonna have a fourth wedding on the books

within two months, what do you think, Jade? - Yeah, you're probably, well, I don't know. If I could hear her voice on the phone, I'd have a better gauge. - There's gauge.

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

- I want someone who's gonna marry my daughter to put the energy and obsession that he has in his business and to my daughter. - Man, yes. - That's what I want.

- We need to get a house done. I need to work three jobs to make some happen, done. Like, we're gonna do that. - Wait, so what you're touching on is something that this is about to be a whole discussion.

Because it's so true, this is for all of us, not just an old boy who started his business five years ago and wasn't successful. But that's all of us. If you look up and you're putting more intentionality

and time and effort into anything,

“that's not your family, you need to check yourself”

before you recognize yourself. - Yeah. I think people take that the wrong way. Like, I've been working on a new book project for two years. You just had a book come out.

- Yeah. - My wife and I, like eight months ago, we went on like what I call like a final date. Like, we know this is coming and we've been on dates since then. But like, we're about to hit wild season.

My wife's an author. She wrote in this season. We got two young kids, like, we've been in it. But the anchor point is, all of this circles back. Not so damn can get famous, not so I can get

just another book on the shelf, but for us. - Yeah. - And for people in the our local community, right? - Yes. - And so, but it's anchor starts there.

And so there are seasons that are way out of whack and way out of balance and you and I are on the road. - Yeah, you do sprints. - That's life. But it all anchors back to her and I said across the table

coming up.

“And here's what our lesson look like on the backside, right?”

But man, you are married to somebody who is having an affair with their job. Or actually you're the affair. - Their love is their job. Their love is their golf game.

Their love is their whatever. - Right. - Their phone, man. - It's a problem. Yeah, 'cause not you trying to think so strategically

about how you're gonna get your next raise and how you're gonna navigate these relationships and you're not being that intentional with how you navigate your relationships at home. You're not, you know, you're, like you said,

you're focused on your golf game and improving your swing, you know, improving your, your mile time. All those things, but you don't put the same thought into your money, you don't put the same thoughts

into your relationships. I'm just saying the first thing as far as you got to put the first things first is all I'm saying.

- If, here's what I want people listening to do.

Go home today, remember like if you went to college, you went to ear and high school, you got to syllabus. Here's all the books you got to read this semester. Here's when the assignments are due. Here's the homework schedule.

Here's all that. I want you to ask your spouse for a syllabus of them. What are five books they love? What are five movies they love?

“What are five podcasts they're listening to these days?”

What are five big topics they have? And I want you to spend a couple of months knowing your spouse, learning them again, studying them, talking to them, going to dinner with them and saying,

all right, I'm not gonna try to debate you. I just want to hear, what do you think about this? What's going on overseas? What do you think about what's going on in politics? I'm not gonna fight it all.

I just want to learn about you. I listen to this podcast, you love. I think it was terrible. Tell me what you like about it, yeah.

But get to know each other again.

And that level of intentionality. Man, if I can put that much into the next bass rod, I'm gonna get or my next hunting spot. And I won't give that to my wife. What kind of husband does that make me?

Right. And I've been there for years, right? Because at work, you'll talk to Chad and act like what he's saying is the most exciting thing ever. Just so that you look good in front of Chad.

And you get home. You'll walk out while, like, listen, I should not know. Jade, I'm getting convicted real time. I should not know. The Seymour Duncan P90s that I just put in my last poll.

I should not know how that all works and not know how my wife likes your coffee. It's so important. I shouldn't. I shouldn't.

That's more important than this. I should have that stuff covered in my spirit. I should be paying more attention. Make sure she's got coffee in the morning. Make sure, hey, I'm gonna run to the store.

I'm gonna go fill her car with gas on Sunday night. No way. Instead of getting up on money and be like, oh, she didn't put, I'm gonna do that. I should do that stuff.

You know why? 'Cause I do it for my guitars. I do it for my hunting gear. We all done it. Man.

We've all done it. We've all done it. So, to reiterate Alexander, see you later, Felicia. Do we have to, now we talk too long, Jade.

I'm still on it. You closed, you wrapped it up too soon. (laughing)

First things first, you know what?

Hit me with one of those social questions. Where are they? You know I already, I already moved them all. Really, I've got one. I've got one from TikTok.

Okay. (laughing) My favorite place to hang. Oh, this is great. Okay, did you know if somebody came to me and said,

hey, log in to TikTok or I'm gonna set you on fire. I know it. I know it. Just be like, get it going. Get it going, I don't know how to log in.

All right, go for it. Okay, Michael from TikTok says, let's see, we are planning on selling our current home and purchasing a new home within the next few months. Does it make sense to keep attacking the mortgage

“or should we save money more money towards the next down payment?”

Do you really could do either or? I probably would save the money out in cash. That's all I would do. Just in case you don't get from your house what you were expecting to get possibly.

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

in two or three months. Months, yeah. Yeah, I would pay minimums and keep the cash. Keep the cash. I would do the same thing.

That's what I would do. Okay, thanks a lot. We're gonna be back for another hour soon right here on the Ramsey show. Oh, we're still going.

We're still going. Jo, I thought you were giving me the Jo's or Fearless. I've got another social question here. Audio engineer. Listen, this is why they don't let me drive

ladies and gentlemen. Sometimes I run into the median. I'm here for you. Love you guys, we'll be back soon. (upbeat music)

(upbeat music) - Welcome back to the Ramsey show in the Fair Wins Credit Union Studio. I'm John Deloni joined by Jade Warshal. It's got to Austin, Texas, the five one, two,

and talk to Mike, Mike, what's up, Mike?

- Doing alright, brother, what's up?

- Thanks for taking my call. I'm a bit of an odd situation. I received a promotion about two weeks ago from my work. - Congratulations.

- Thank you. Although they do a truck allowance program versus a company truck program. And so after looking into it and looking at their stipulations

of what that vehicle needs to be. I would have to buy something and sign answer. And I really don't want to do that. Me and my wife just got out of just got 100% debt free. And so just don't know how you guys

would handle this situation. - Is the stipulation reimbursement only or do you have to have a certain truck

at a certain mileage in year

and then they'll give you a stipend? - Certain truck of a certain mileage and a certain year and then I get a monthly stipend. - Okay. You're gonna hate my answer,

but if I'm in your execs shoes, I would probably begin either a, I'd make the decision I'm gonna wave the stipend and I know that's free money, but my freedom is worth more than that.

Or I would save up the money on my own and buy the truck and then take the stipend. - Yeah, why can't you be on a elongated timeline?

“- Do you have to make this decision immediately”

as what I'm saying? - Yeah, so they get in that 30 day, 30 day timeframe to make that decision. Just because I explained to my district supervisor

that I don't want to go out and sign answer truck

and in order to be in. So I would just use the current truck I have over my current truck that I have now went over big trailers and it's only half done versus it needing to be a one ton

to get the monthly stipend. - So can you even perform the job with your current truck or you cannot? - Short answer, no. - What's, what does it cost to get a used vehicle?

- That means the use, that's the problem. I mean, they're asking you to buy an 80,000 dollar truck, right? - And I'm looking, I'm looking used but I'm even a used vehicle is a used truck that would work under 100,000 miles

and not older than five years old. I mean, I'm looking at, you know, 40 cents. - Well, wait a minute, not to get the truck allowance

“to actually be able to pull what you need to pull.”

Like to act, there's two searches. There's one search that gets you the allowance. The other searches just a vehicle that is able to like physically do what the vehicle has to do, right? Yes.

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

Okay, here's my question. - Okay, here's my question. - You do, how much has this type been? - $2,500. - A month?

- Yes, sir. - Okay, so that's a significant chunk of change. - Yes, sir. - But I want you to consider what they're doing. They are asking, they're putting that much money on the table

for a couple of things. A, they want fancy looking trucks to shop to job sites. They want to look like they are, this is look at what our guys are driving, right? But they want you, the employee to carry 100% of the risk

because they can be at a pocket two months, they can be at a pocket five grand, you're sitting on a $50 or $60,000 note. And then they decide to go a different direction. And you're stuck.

You see what I'm saying? - Yeah, what happens if you leave the job or what happens if you're fired? What happens to the value of the truck at that point? The stipend stops, right?

- Yeah, and then in that say at the point I would just tell with yourself a vehicle. - Right, that you might be upside down on or that is lost value or that, right? So the onus becomes on you for all of this.

- There's a reason they're paying this much money. Nobody, nobody, no business is just like you know what? Let's just throw some money at some guys just for fun. They've done the actual area work here to say, let's not have our own fleet

unless not manage our own fleet. Let's transfer all of that depreciation, all of the risk onto our employees and we'll just write them a check for that. - Yeah, that's not good.

“- So here's the thing, I think you're gonna do this anyway.”

And if you're going to do this, then man, I would tell you, hey, I wouldn't do this in my own home and I know that creates a cascade of challenges 'cause you've gotten promoted into a job where they won't give you the tools to do the job,

they just promoted you to do. They want you to go buy 'em. And nobody making the money that they're paying,

so they're gonna pay you to make a payment.

“That, to me, I just don't like that arrangement.”

It makes me uncomfortable because it puts me in my family on the block and they don't have any skin in this game. But if you are gonna do it, man, get the minimum threshold you can get through the door with.

- And that's what I was looking at. And would that not matter based on if, I mean, outside of our emergency front, I have a sizable amount of money saved up. And if I throw that at it, I won't be upside down.

That's kind of the route I was thinking of going on this. And I mean, they've been, there's somebody going around since the '60s and everybody in this situation has had good luck with it. And the only reason they got rid of late vehicles

is guys were just more taken care of it.

And it was costing them a lot more money.

And now that guys are using their personal trucks, they're taking care of them and they're lasting a lot longer. - I mean, I get their business, I get their business deal. I mean, what they're doing makes sense to me, I get it.

But I'm not on their team, I'm on your team. - Right. - And so, it just feels like a big liability to be hanging on to.

“But yeah, I mean, you do, how much cash do you have saved?”

- About 28,000. - Okay. And how much of your emergency fund? - We've got about 22,000 right now. - Okay.

Is there a possibility you could dwindle that sucker down to where it's just a few months? And you go in and get pretty dang close to pay in for the singing cash. - Yeah.

- And use that 2,500 bucks to get the life on board. - Just be militant about paying, be militant about taking that 2,500 dollar stipend plus any extra cash I'll have and refilling every cash bucket you got.

- Yes. And that's kind of what would be the plan. I mean, if I gotta make double your triple payments of months to get it paid off, you know, in six months, that would 100% be the idea.

I mean, the last thing I wanted is that we just spent two years trying to get out of it. - Yeah, totally. - I mean, I'm trying to be smart about this, but also there's something I've been working for

for over the last 10 years. And I'd really hate to give it up because I, you know, I don't wanna go and buy a truck. - I get that, but at some point, in anybody says they have a principle

that principle's always gonna get checked.

- Right. - Right. - It's always gonna get checked. If I was put in your situation and I didn't have another option, y'all, y'all, y'all.

I would probably, J, tell me if I'm wrong, I would dwindle my cash down to what I could manage and I'd keep his cushion in the bank. And then I would be a lunatic about getting that sucker refilled.

- I'd really, I'd really push for a different, I'd try to get creative. I'd sit down and chat, TBT tonight and roll a bunch of different scenarios. Maybe they, maybe you ask for half

and you cash flow half, really get creative and come to them with a lot of solutions that shows that you care and you wanna solve the problem. (upbeat music) Dave Ramsey here, most people stay stuck with their money

because they're not paying attention to it. Most people are living paycheck to paycheck. Stress out and broke. Don't be most people. You work way too hard to be broke and feel broke

and you deserve to have something to show for it.

“That's why we built the every dollar budget app.”

It gives you a personalized plan for your money. This shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus you get real coaches guiding you through your plan, step by step.

Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen. Starting now. Go download every dollar in the app store

or Google Play and start for free today. (upbeat music) (upbeat music) Let's roll out to Grand Rapids Michigan and talk to Sky.

What up, Sky, how are we doing? - Hey, how can we help? - Hi, so I'm about to graduate college and I have a full-time job lined up but I'm trying to decide whether or not I should

with that moment commute that hour and a half both ways each day for a while to kind of help pay off debt or if I should look for an apartment, you know what's in like a 10-minute drive.

- Yeah, I'm gonna really rule area so like - So we're saying three hours a day? - Three hours a day? - How much debt? - Oh, hold on, how much debt's you got?

- Never, I'm gonna graduate

with about 15,000 in long, so it's not like terrible. - Now I get an apartment. If you tell me you were gonna be 50 or 100 grand, I might tell you three hours a day is a pressure pay for a year, but man, 15 grand,

you'll have that knocked out in no time, right?

“- Okay, I mean, that's what I was kind of thinking,”

but I just didn't know if it was worth it to drive for a while to just kind of get it to get off as soon as possible. - Well, think about this, three hours times five, that's 15 hours, you can probably...

- I think it's gonna make you hate the work that you do. - It's just a bad, you're graduating, you're entering into your field, it's a bad entrance into your field,

'cause you'll start to have resentment over showing up to work every single day. - Okay.

- I think, have you run it out and said,

"Okay, if I do this, how long will it take me?" - Not really 'cause it's not, I'm not gonna, I get's not great paying, but... - What's the pay for the job?

- It's a good job. - So it's 1945 and hour before taxes, full time, and isn't the events industry, so there'll probably be some over time associated with that? - You'd have to make a commitment to yourself.

I'm gonna work.

“Here's, let's change it and say it this way.”

The next two years of your life should be pretty tough. - Okay. - Pretty miserable. You can share that, you can have that misery in the car, driving back and forth to your mom and dad's house.

Still having to abide by their curfew and not being able to date anyone 'cause you all live out on a farm, or it could be pretty miserable, pretty tough, grinding, but you're taking every possible job

in your industry and in your space and getting to know people and shake hands and hang out with people your age and getting as much exposure as you possibly can, 'cause you're gonna get this debt paid off

in 12 months or less, and then you're gonna spend the next year grinding and getting an emergency fund. - Right. - So if you think of it that way,

you're gonna spend this time working. And you're gonna spend this time grinding. I would rather do that and look up and be 24, 25 years old. Have put two or three long hours days,

“two or three years with a long hour days”

towards the job industry, I wanna be a part of, than driving back and forth to my parents' house. - Yes. - Okay, yes, 100%. Because at least, if you move closer to work

when you're done with work, you can easily get to your next job, 'cause it's right there in town. - All right. - All right.

- You can do more actual work 'cause you're in town. So it's like, okay, get off my job here and I'm gonna head over to the place where I bartend or I'm gonna head over to where I work at Nike Town or whatever it is that you do on the side.

Whereas if you're out in the boonies, you've wasted three hours a day. - You can't get back. - You can't get it back. - And there's nothing else out there to do.

- Yeah. - Sure. It's up to shoot rabbits. What do you guys do out there? (both laughing)

- Don't do like that. - I don't like that. - Yeah, so that's what we would do. Congratulations on graduating and get that debt paid off ASAP

and just just know, if you're 21 of your graduating, two years, that's not enough. Next, five, seven, eight years of your life. Just know, I'm going to get after it. Jade, the life I live right now is based on,

I was pretty unhealthy, but working like a mad person. - 20 year old, yeah, yep. - Same, yes, to every opportunity, every speaking engagement, every degree opportunity, everybody, all of those skills I learned along the way

give me the life I have now. - The 20s are four scratching and clawing for everything. - Right, that is the definition of that decade. Is you scratch, you claw, you're tired, you work some more, you fail a little bit,

you work some more, like that is the 20s. - Are you looking for that? - Are you looking for that? - He said this recently, our culture has flipped and we sew over index for 20s and 30s

and we under index for our 40s, 50s, 60s, 70s and 80s and 90s. And the fun I thought I would be having in my 20s, dude, now that I can have that kind of fun in my 40s. - 'Cause you got some money. - I got money, I got time, I got my own car

and it starts every time I turn it off, right? - No, I know, I have an amazing wife,

it never would have dreamed it was this awesome.

- I couldn't agree more, I literally had this conversation with Sam Warsaw, I was like man, everybody thinks like 20s are like the glory years or like back when I was younger, like the glory days.

half of us aren't even married yet.

“So we're out here just trying to survive that all situation.”

And then you got no money. You don't have any respect on your name and your career. Like, it's just when I look back on it, I go actually the 20s are kind of trashed. - In my 40s, I'm going to the same shows.

In the same mosh pits, I'm just able to get- - You've been afford the good tickets. - I get the t-shirt too, yeah, yeah. Yeah, I don't have to sneak onto the floor. I can pay for the first ones.

- Oh man, I mean, that truer words have never been spoken

and it's so true, just know it's necessary. Like 20s are building years and it's so necessary to just let it, like let the build begin. - Grind it, grind it, grind it, grind it. - I appreciate it for what it is.

- All right, let's go out to Brandon and Pittsburgh. Let's see here where we are right here. Brandon, what's up? - Hi, so I have kind of a big, big thing. - Let it rip.

(laughing) - All right, so I'm a truck driver. I'm about 3,200 by weekly. My wife works at a store. She's a manager there.

She begins about 1700 by weekly.

“I have a mortgage payment about 1200 bucks per month”

and I'll pick up payment for 800 a month. My wife covers utilities. She has her own car payment for 700 a month. I owe about 35,000 for my car. She has 41,000.

I have 120,000 on the house and a credit card debt of $3600 and a wedding loan that's $15,000 and I'm slowly paying off my credit card debt and I'd like to start paying off the wedding loan faster do and building savings. So now my question is, I have no clue how to build wealth.

I am numerically illiterate, don't know where to start. - Came to the right place, brother. - You did. - Perfect. - And you had your numbers listed down and right?

I couldn't even keep up writing it all fast enough. So that's $500 in car payments between you and your wife. - Yeah, that's a lie. - Yes, it's a lot and for her, yeah. I'd give me a back and forth to work.

You could do that on a go ahead, dude. - Like, not really but, you know what I mean? - You don't need an expensive, even use car pay. Like my first car, when I was in high school, $1,700, it's like $6,000 now.

Which I could get and trade in my truck for one, but I don't want you to truck either. - Let me get back to the question at hand 'cause we don't have a lot of time. And I wanna answer your question.

The crux of your question first because this is gonna inform everything I say next. You asked, I don't know the first thing about building wealth. And the first thing about building wealth is you've gotta get control of your income.

Dave Ramsey would say, your biggest wealth building tool is your income.

“And you've got a decent one, I think combined you guys”

are at like 9,200 a month, a month, is that a wrap about right? - About right, yep. - Okay, that's a decent income.

The problem is it's going out the door.

You set it yourself to debt payments every single month, whether it be the pickup truck, the car, the wedding loan, the credit cards. So the way we get our income back in our hands and back in our control is we have to have to pay off the debt.

And that's the part that nobody likes to do. Over here, we teach a series of seven baby steps. And the second baby step, baby step two is the one that's about paying off debt and everybody hates it because it requires discipline, it takes a while, all of that.

But I really, really want you to embrace it 'cause it's the only way to get free. Before we get off the line, we're gonna send you every dollar. We're gonna send you the book, the total money makeover. And we're gonna set you up with financial peace university.

All of those things walk you through our seven baby step system. It's a plan for your life. And it has to do with you taking these debts, lining them up, smallest to largest, paying minimum payments on all of them,

but throwing all of your extra money every single month at that smallest debt.

That's the main part that's the first thing

that you really have to get your head around. But all the resources that we sent you are gonna teach you how to budget so that you can do that. It's gonna teach you how to say no to debt because we don't do debt anymore.

All of this is gonna set you up for that one, my brother. I can't wait. - And chances are the cars are gonna go. Hang on the line, we'll get you done. (upbeat music)

- 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.

around your loved ones and your wallet.

If disaster strikes, our free insurance coverage checkup helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps. Go to RamseySolutions.com/checkup

to take the coverage checkup and find out if you have the protection you need. Let's go out to New York and talk to a pro. What line is April on? April is on line four.

What's up, April? - Hi, I'm 65, I'll be 65 years old this year and I didn't start working until I was about 63. I'm wondering will I be able to catch up to be able to retire

“and what things can I do to build retirement money faster?”

- Well, thanks for calling.

Tell me about your life. - Well, I work 40 hour a week. I make about around a little over 22 hours an hour. I'm debt free, I own everything, my home, my vehicles, I pay cash for everything.

Why did you start working at 63? - Well, I've been a housewife pretty much since I was 16 years old and through series of marriages and divorces, I haven't been the last husband, I wasn't with long enough to be able to get any part

of his retirement. So being divorced, I had to figure it out on my own. - So I got about 85,000 that I have saved up over the course of time and most of that I'd say about 53,000 is in savings.

I'm not sure if I should just be leaving it in my savings

or if I should be trying to put it somewhere. I know I get these social security statements every so many months a year. And I'm looking at maybe $600 a month if I'm lucky. - Right, okay.

So of the 85,000, you said some of it separated, where's the other portion of it? - The rest of it's in the checking account. - Okay, so - 53 along in the savings. - What I would do is I'd probably put six months of expenses

in a high yield savings account.

“Could we say maybe $20,000 and put that in a high yield savings?”

- And when you say high yield savings, what does that exactly mean? - It's a form of a savings account that has a slightly higher compounding interest rate. Just a slightly higher interest rate, that's it.

- Okay, my bank is five percent, I'm not sure if it's-- - Oh, five percent. - Yes, you can give five percent. - You're fine, don't miss. - Don't miss.

- And leave your money there. - Yeah, don't move it, but I would move the other 50,000 and I would invest that. - Okay. - And I would get with a smart vester pro, which will give you the information on that.

You can go on ramsysolutions.com or you can go on ask ramsy and say I need a smart vester pro. And that person's gonna sit down with you and they're gonna help you and teach you about the best ways to invest your money.

- Okay, okay, I did start a 401(k) in October. - Okay, great. - 45. - Great, and so there's only about 2400 in it. I mean, I don't know if I'm supposed to be, I know you're supposed to do something

with it at 73 years old, but I'm really hoping that if the work they'll want. - Well, that's true, but you may have to. - Yeah, you will be. - So, you can invest the 50,000 into a Roth IRA over time

and you can put some of it in a brokerage account, you can put some of it. So, the smart vester pro is gonna help you decide all the best places to invest that money. But I want that working for you in the market.

I don't want it just sitting in an account because if you invest it, hopefully you're gonna get somewhere between a 10 to 11% return is what we're hoping for. So, that's the thing, one.

The thing too is, what do you bring in home every month around 3,500? - In that neighborhood, yes.

“- Okay, and of that money, how much would you say is extra?”

We would call it margin. - Should be quite a bit, you have no debt. - Well, anything that I have extra, I've been putting into the 401k. - Yes, that's good, that's good.

- Yeah, so I've already got it taken out at work. - But I want to know beyond that, how much margin do you have? Again, margin is extra.

that you just say, okay, what am I gonna do with this money?

I get shoes.

“- Probably somewhere around $1,000, $1,500 to $1,000.”

- Okay, so I would challenge you that much of that money needs to be invested. Almost all of it. - Okay. - Because I don't know where percentage you're investing now,

do you? What percentage of your gross income? - I think it's 16%. - Okay, since your home is paid off, you get to invest as much as you want, which is awesome.

- Oh, I know that. - Yeah, because you don't have anything else to pay for. So, if I were you, I'd be taking that 1,500, and I'd be looking at it going, okay, aside from me, maybe going to the movies every once in a while,

or maybe I'd go to dinner with a friend or whatever,

I'd be investing a much of that $1,500 as much as you can.

- Okay. - Because that's going to be the thing that breaks you free in all of this. - All right, that sounds good. - In April, I'm telling you this,

“and I would tell my mom, my mom's older than you,”

but I would tell her this exact thing if she woke up in your situation at 63. Every penny is going to count when it comes to getting money into savings. - All right.

- Yes, I have a scarcity mindset, so I don't spend any more than I have to. One thing, I know I'm not anywhere near where I should be though. - Okay. - Because of the late start. - Right, and I would make peace with, I mean, chances are,

I mean, the chances high, you'll be working well past 70. - Okay.

- Okay, let me do some quick math for you.

So, let's just pretend you're 65 now. Let's say we do this until age 75. Do you think you can work till 75? - Sure. - I mean, what's your health?

- What? - It depends on the nature of what you do and what your health is, right? - Oh, I work very hard. (laughing)

I'm running back and forth and running up and downstairs. - Well, you tell me what you think. - What do you think are realistic time frame that you would be working? 'Cause I wanna plug these numbers in for you.

72? - Okay, we'll say, okay, let's go with 72. - 72 does that sound good? Okay, so let's say 65 is 72. Let's say you put $2,000.

You can trip you that every single month. That is going to leave you with $250,000. - All right. - Okay, so that gives you a little sound better than I thought.

- Yeah, it does. But then the next thing I'm wondering about is, once you are down to 600 or whatever your social security will allow, if you find that it's really, really tight for you,

you need to be looking at, number one, I want you to call us back. But number two, remember, you've got, I'm guessing a pretty decent home that you're sitting on, what's your home worth?

- Probably about 185 on the low side. - 185, where do you live? Oh, you're in New York. - In New York City, you have 185,000 or how long? - How did that happen?

- It's actually something New York, but. - It's dinner, we can't say anything in New York for 180 grand, can you? - It's worth 185. - Now with the gas prices, they have now.

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

- No, you've got a one, the housing lottery these days, but 185. - Well, actually my plan is to sell this house and hopefully move to Tennessee, but I got a crunch to numbers. - Well, we don't have a state income tax.

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

“- I think your best bet, I think your best bet”

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

- All right, 'cause the more you work, - Maybe I can get some overtime. - Yep, the more you work, the better the situation votes for you. - Or get a job sitting down, like at one of the beautiful hotels

in New Yorker, doing anything, right? But yeah, you're gonna have a busy, busy, busy next 10 to 15 years, but we believe in you. And thanks for giving us a call and thanks for being on top of things, man, as you get going.

(upbeat music) - Hey, George Campbell here.

It's exciting, but there's a lot to think about,

and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources

for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly.

What's not to love? So if you're ready to take the next steps towards your home goals, go to RamseySolutions.com/reelestate. That's RamseySolutions.com/reelestate. (upbeat music)

- Today's scripture of the day is Isaiah 552. Why do you spend money for what is not bread and your wages for what does not satisfy? Listen carefully to me and eat what is good and let your soul delight itself in abundance.

“Zig Ziglar says, "Money isn't the most important thing”

in life, but it's reasonably close to oxygen on the gotta have its scale." - He's not wrong. Neither are wrong. (laughing)

(laughing) - It's both right. - That's good to say, Lewis, Missouri, talk to Austin. What's up, Austin? - Hey, how are you guys doing?

We're doing good, brothers. What's up? - Well, first off, thank you guys for taking my call. So, some of them have done on my mind lately. I recently watched their show and it really opened my eyes

up to a lot of things and I've been kind of irresponsible to mine with my money and now I'm $50,000 kind of dead. Well, also I'm maxing up my 401(k) and that's actually what I called you guys for my uncle for the past few years.

I've been dumping my money into a 265 target retirement fund

'cause I never knew what to do, but he told me,

I need to be investing in either a Vanguard five hundred S&P or a fidelity five hundred S&P. And he said, "Don't touch that until you're 55." And, you know, that's all fine and Danny, but I just didn't want to get the 55

and then be like, "Oh, where did all my money go?" And, you know, I just want to set myself up for the best, so I didn't know if you guys had to say about that. - I was a little confused when you said that when you got to 55, you'd be wondering where your money went.

It'd be sitting in the investment that you put it in. - Well, yeah, I just don't, I know, he told me, I never knew anything about the stock market or anything, like the investing in the stock market. - So you're saying, you're just doing what he said.

- Yes. - You don't know really what you mean. - I don't know what to do. - Gotcha. - Okay, how much is in there right now? - Have you looked at it? - So when I started doing it, about a month ago,

I had $12,000 in that target tax fund rule. In the last month, I looked and it jumped about $3,500. So 15,5 right now.

“- Can I tell you what my mutual fund holding is right now?”

- Yes. - I have no idea. - I'm gonna tell you why, I do look at it once a year, but I don't know what it is right now. You know why? Because I'm not ever gonna pull it out

until it's time for me to retire. - Okay. - And if you watch this account like a stock ticker, you're gonna make yourself nuts. - Okay. - I have some more parents. - Tell me all the time. - Yes, you're gonna make yourself

- I like watching my money grow, but I know. - But you're not gonna like it when economy has a downturn and there's a 100% chance it will have downturns over the course of your life between now and 55. - And it'll make you insane.

It'll make you feel, it'll make you feel

powerful when it shouldn't.

It'll make you feel secure when it shouldn't and it will make you feel devastated when it shouldn't. And so when you put money in a retirement account, the goal is to not take it out until it's time to retire.

And so watching it, your 23 years old brother, your rods and cones are gonna fall out of your eyes.

“If you watch at that close over the next 30 years, okay?”

And so I do check it. I do pay attention to it. I have a smart investor pro that I work with, but man, I just don't watch it on a week by week, month, by month basis.

Because I know I'm an anxious guy. I know I can get really up when things are up and really down when things are down. And you said it on a roller coaster, man is gonna go up and it's gonna go down.

And if the last 100 years is in the indication, it will eventually tick and move its way up. But let it do its thing, okay? - Okay. - And one last thing. Hold on, Jason, I'll keep you through the,

some more details here. - Okay, great. I just wanna make sure, and this is something I would check on because this is, we might need this for your debt.

If it's housed inside of a Roth IRA,

if it's housed inside of a, anything that is a retirement account,

“maybe a traditional IRA, you can't touch it.”

But if it's just sitting there in a brokerage account, you can. And we would use it for debt, because at that point, there's not gonna be a penalty if you were to remove it.

But just double check that, because if it's just sitting there in a brokerage account, that's great. That's money that's up for grabs. - And you can cash out to pay off this $50,000 whole year in.

- Yeah, exactly. So you've got $50,000 in debt. What kind of debt is that? - Well, $5,000 of it is in credit cards because I was, like I said, I was stupid with my money,

but about a week before I started listening to you guys, show I went out and bought a brand new truck. - Okay. - That's way stupider than that. - And that's the $45.

- Yeah, it's $45. - What's it worth? - Well, a brand new off the lot right now, it's probably worth around 30. - No, no, no.

If you turned around to sell your car today, you don't want to get $34. - That's just what Kelly Bluebook says. - What about private sale? - Private sale?

- I can probably get around 37 for it. - Okay, 37. So your goal is to figure out, like, how are we gonna get another $8,000 to clear this debt? And not only that, but how can I get another,

I don't know, 10,000 or another $8,000 that I'm gonna get kind of like a junker truck that I'm gonna drive around for a little while

and it's gonna remind me that I'm never gonna go into debt again

because it sucks to drive an $8,000 truck. (laughing) - You know what I'm saying? So what I would do if I were in your shoes because what I did here, the $8,000 clears you from being

upside down that way you can sell a car, get the title, transfer all of that, and then another $8,000 gets you an ride, that's $16,000. $16,000 is a lot better than paying off $45,000 in my right.

- Oh yeah. - Okay, so I'd go down to the credit union, I'd go down to the bank or whatever you can do to get this money and get it on the best terms possible, and that becomes your new payment that you're paying off,

the $16,000 loan instead of the $45,000 car. And that for anybody who's listening to this call right now, if your person who finds yourself upside down,

“that's how you get out of it, and you might think,”

I can't believe you would tell him to go pick up debt, but we're lowering the debt, we're going down in payment. So that's thing one, and in the meantime, while you're negotiating that transaction and you're finding a buyer and you're getting that personal loan,

the next thing I want you to do is work so hard on paying off this $5,000 in credit card debt, and you're going to do that by picking up extra jobs and side hustling, yes? - Yes, ma'am.

- Okay, so that's like the nuts and bolts of how we're gonna pay off this debt, but I want to run it back because two things that I want to cover with you that are tantamount to this entire thing taking place and actually working is you've got to do two things today,

and if you don't do these two things, nothing that I tell you is going to work, okay? - Okay. - So if you have something right with right this down, number one, today, you have to go into the nearest mirror,

wind exit off so you can see yourself very clearly in it, and look in your own eyes and tell yourself,

I'm never borrowing money again.

I'm not a person who borrow as money, yeah? - Because you can't solve a problem while simultaneously creating it, so if you keep paying off debt and then borrowing more debt, you're just gonna be to a dog chasing its tail.

So you look at yourself, I'm not borrowing money, the second thing you do today. You've got to download a budget, we'll give you a every dollar, which is the best budgeting app out there.

It's not just a budgeting app, it also has our plan for how you're going to do all this. You've got to download every dollar and that is gonna become your new BFF in your pocket 'cause it's on your phone.

- Okay. - That's it, and if you can do those two things, you're gonna be able to walk out the rest of this, no problem. - Do you have the courage to sell your truck

and just get down with this thing? - Yes, I didn't know if I should pay it down to where, I'm not upside down, and then get rid of it, or so I just get rid of it now. - I think you should get rid of it now

because it's gonna free up the money that you need to quickly pay off this credit card. And I think every day that you wait, it's gonna go down and down.

“- Yeah, it's gonna depreciate, you know what that means?”

- Yeah, I mean, it includes the value. - Yeah, it loses value every minute you drive it. - And also I think I don't know, but I feel like the summer time could be a nice time to buy a truck.

People, you know, you put it out, I'm just saying, if you're selling something private sale, it's a lot nicer to roll up in the summer time when the weather's nice versus in the winter, when it's covered in snow and it's dirty from the ice

and all that stuff, I just made that up. But I'm just saying that could be good, but let me go back and teach you a little bit about the budget. You need the budget, the budget is a plan for your money.

and your expenses and you're gonna tell every dollar

what to do. That's the whole point.

So if you make $5,000 a month,

“you're gonna assign $5,000 an assignment.”

- That's it for the Ramsey Show today. Thanks for being with us, remember,

there's an ultimately only one way

“to financial peace and that's to walk daily”

with the Prince of Peace, Christ Jesus. (upbeat music) (upbeat music)