The Numbers Don't Lie

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Start budgeting for free today. [MUSIC] >> Normal is broke and 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 George Campbell here with Dr. John Deloni. Taking your calls at triple eight, eight, two, five, five, two, two, five. Eric is in San Jose and kick us off. Let's go in on Eric how can we help?

>> Hi, yeah, thank you for taking my call.

I just had a question about how to build this idea of a shared ownership

of budget building and overspending. And I'm just to give a little bit of context. My life comes from a family that's got a core financial education and behaviors. And she acknowledges this and recognizes this. But we kind of go through her typical process over the years in marriage,

where we'll do really well one month. And then the next month, it just kind of goes off the rails. And generally we're doing okay, but I kind of want to find a way to help encourage her in a moment when she's doing well. But also try to keep us on track for the long term.

So we don't have to keep having the same conversations over and over again. What are the calls, why does she choose to go and get off track? >> So I hear a guy who's trying to be really respectful of his wife and I honor that. It's good. But it sounds like you'll have these heartfelt conversations.

You'll join allegiance. You get on the same plan and then a month later she just is like, I don't care. >> Yeah, I mean, I don't want to say it's the I don't care part. It's more of just not knowing and keeping being mindful of where we're at. But that's a that's a fancier what not being mindful is a fancier way of saying, I don't care.

>> That's, yeah, that's fair.

“>> Right, so it's, that's the conversation you have to have because because we're past”

the point over not on the same page, we're past the point of you clearly have talked to her about what freedom means and what safety means and your dream for your family and she's actually agreed with you and she's also agreed on like she knows her story. She knows why these things are wired into her. She's come from bad, like unwise, money, money habits, right?

The only thing left is I gotta go do the thing. I can Google what work out to do all day long, it doesn't, I gotta go to the gym, right? And so my question for you is, what do you have any idea? Because I don't think it's a matter of you not encouraging her enough or whatever. It's just frankly, it's a maturity, it's integrity, it's her keeping her word.

When she says, oh, I don't know, what does she communicate to you is the, is the root problem here?

>> I think the problem is that she feels like there's a need, right, that's not being fulfilled.

Whether that's, you know, we needed this grocery item or we needed this household thing to take care of the family and she's socially, she fulfilled that need without really considering the budget. And I've oftentimes said, you know, that's an important need and we can talk about that. But I have to fit with an odd budget constraint and if it's not sitting in the month currently,

you know, maybe that's something we have to wait for and that's kind of just always been a hard. >> So is it a hard thing for her to hear?

“>> Can you label this in the budget if it actually is a need for the family?”

It sounds like she's not buying frivolous things, it's hey, we needed paper towels and we didn't factor that into the budget. >> What's some examples of things where you guys, she goes off rails, doesn't talk to you about it and now you're frustrated. >> Yeah, because I don't think you'd be calling us if it was just, oh, we didn't have

any milk or we didn't have any paper towels. >> No, true, true. I mean, examples are, you know, like we'll go to, we have, we do have a budget line on for like home needs, right, whether it's toilet paper towels, you know, a new broom, whatever. So it'll be, it'll be things like that that she'll feel like we need and we've already

used that budgeted money for something else that doesn't have that conversation and goes out and spends that additional money without having those conversations about, hey, we're over budget, but this is a need. >> So she's not checking back in with the budget to see if this actually fits and that's the part that's frustrating you.

“>> Or more important, she's not sitting down with you saying, hey, we made this budget and”

I realize we're short, right, right, right, neither is happening really in the in the moment, you know. >> And so the question, the only question you can ask yourself is, are you, are you a reasonable

that she can come back to and be like, hey, we made this budget and I'm realizing two

weeks into this month, we're going to need these other things or I want these other things. Are you a person that she can sit down, you're like, oh, sweet, well, let's get this thing out and see if we can just not go out to eat then or we can do this other thing. Or are you the guy that throws the budget down and says, this is what it's going to be, this month, this is my militant household, we're going to follow this.

And she has that natural, like that I have, which is kind of wired in, like, you tell me I can't, oh man, I'm probably going to, right, so that's the only question you can ask herself and if you're a safe person to sit down and you're an open, curious person that she can come back to, then the next thing is man, you got to dig into the true or conversation, which is you got a wife that kind of doesn't care.

“And that's a scarier conversation to have quite honestly.”

Yeah, I mean, to be, I could be a little bold, I've come on strong in the past sometimes when, you know, she's made expenses and didn't really consult me and they're small. So I think it to your point, it could definitely be a little bit of a set of dollar amounts. Say anything over $50, we need to talk about beforehand. So set some boundaries.

And if there's areas where she is buying things that are frivolous, let's shut that down. Because I know in my house, if I buy ice cream, I'm going to eat some ice cream that week. And if I don't have ice cream, I'm not eating ice cream. And so there's a piece of this where you can set your own boundaries and make sure that

we're sort of removing things that we know will harm us and adding friction to those areas.

And also, when you all have that conversation, you go first and you be honest, I recognize

I've made this in exercise and militancy. And I say things like, you didn't consult with me, like, you know what I mean? Which is what week overbearing bosses often say to their employees, you got to loop me into it man. Yeah, yeah.

You didn't see me on this.

“Like, it's you coming and being honest and saying, hey, I realize I'm not a fun person”

to do life with when it comes to the budget. And I come on too strong. And this is the thing we're doing together. And so I'm going to work on being more flexible and more honest about, oh, we do need a broom, actually.

And that means I'm going to have to take 30 bucks from my fun line because our house needs a broom more than I need another video game or whatever you're doing. And bring her into that. Bring her into the every dollar budget where we go, hey, we got to find some where this money needs to come from because there's a fine item out of income.

Do you actually show her the budget? Do you have it? Is it on papers? And in your head? Is it in every dollar?

How do you do this? Yeah. So we have a similar budget checking program app that we both have access to. It's not every dollar, but that's her full, but I'll continue. I'm sorry.

I'm sorry. It's just what we got used to when we started with. Sure. But yeah, so we both have access to it and every month, you know, we'll kind of try to sit down and have that conversation, shoot it, and that's a bit like the conversation.

Okay. So I want to paint you a picture of a future where your wife loves sitting down with you to plan the upcoming week. Like where you're a person, you all are planning laughter together, you're planning fun together, you're putting an intimacy on the account, you're building a life together.

Yeah. And part of that is, we're going to talk about what expenses we have coming up. And by the way, if you're a teeter tottering one month, it's good, and the one month you fall off, that usually means you're not given it the full 90 days to fully create a budget that actually works in reality.

Yeah.

“Your budget should reflect your real life, and it's okay if you need to adjust to get there.”

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Thank you. Thank you so much for taking my call. Sure. That's really helpful.

So I have a book, I just bought for my business, it's my third truck.

I currently owe 55,000 on it and I have a pretty high interest rate, so I was wondering if

“I could let you guys know where my assets are at and what would be the best way to just”

pay this off as soon as possible. What's the interest rate? It's at 13.7%. Man, why is your credit so bad? Well, I have a 750 credit score, I'm 23 years old, so I guess they can't really do any better

than that. Interesting. Okay, are the other trucks paid off? Yes, sir. They aren't.

Okay, do you have any other consumer debt? I have a zero turn mower, but my payments on that are about 180 a month with zero percent interest. That's not very much for me at all. Okay, what's left on the balance of the mower or the truck?

The mower, 7,000. Okay. All right, what's your income from this business? What do you actually take home? Well, right.

Well, it all depends on the project. This is some weeks, I could come home with 10,000 profit, done weeks, I could only come home with 1,000 profit, so it all depends on the week. Would you follow in your taxes last year? Last year was a lot less than what it is this year.

Last year was about 68,000 total, I'd probably a well past that now and it's only July. Okay, so you might clear 100,000? I think so, this year, yes, all right. And what assets do you have? So currently I have 32,000 in my business checking.

I have quite a large amount of cash and another thing I want to bring up is I have an index fund with about 100,000 and I wanted to see if it was possible to maybe what would be like

“the best way to pay it off because I can't, it's not like it's a deposit of 30,000 for”

the bank all at once. Well, how much do you have in cash? You said you have a large amount in cash? Yes, sir, I have a 55,000 in cash. Which is as much as that's owed on the truck.

Correct. So why don't we just use that? I can't deposit all that much in the bank, but I'll get blood by the IRS this year. I was about to tell you, ask you, how much are you holding away for quarterly taxes because you're running your own law in business?

Yes, sir. So back with all the debt bid automatically with the accounting service I have and so they have all those numbers and stuff. I'm not worried about the numbers. Where's your retained earnings account?

In my business checking. That's the 32? Yes, sir.

So you've got 32 is basically if you clear 100 grand, you're holding your

30, whatever, 5%, that you're going to have to pay in taxes. That's what that money is for. It's not to repair the lower, repair the trucks, pay your guys, it's for everything. It's for everything. So whatever our own taxes will also get taken out of that account.

Okay, George and I can't sit up here and tell you to continue to run on a legal business where you want to like hide cash from a government in not paying for it. No, no, no, no. I have a legitimate corporation. Okay.

“I said you couldn't use the 55 cash because you have to report it, which means you're”

not reporting it as income as well, we're saying, so we can't use that in the equation. Okay. I understand. So I was unable to deposit around 10,000, the bank that told me. Okay.

Because you don't want to report it to the IRS, because you can deposit more than that. But the bank says, hey, we have to file a report if it's over 10,000. Correct. Yes, sir. Okay.

So I understand now, well, it's a hard question to answer because I would just deposit the money, report the income and pay much cheaper, what a Caesar isn't going to pay the truck off. The problem solved. The other route is to sell off enough from your index fund to cover it, knowing that

you also have to cover the taxes from the capital gains. Yeah. It's either short-term or long-term capital gains, long-term obviously more favorable on the tax side. But this is like, we're solving surface level problems right now.

There's some deeper issues, like why did we go into debt for all these things? Why is the motor not a big deal? Because here's the Ramsey Principle. We believe that running your business completely debt-free and growing at the speed of cash is the wisest way to actually sustain the business.

And the hard part for me is you literally have the cash on hand by 4 o'clock this afternoon to owe no man a dime.

It's not like you're paying a million dollars in taxes to the government.

I mean, at your income, it's not that big of a deal. Yeah, I understand. Okay. I think I just have to, I don't know what I'm supposed to worry about. I would work with a CPA.

Do you have one that you have for the business? I do. Okay, do.

I want to do this right.

I want to be completely debt-free and report all the income and just start clean.

And real quick, George, you're better with the calculator than me. Will you figure something up for me? I can try the $55,000 loan over seven years at 13.9%. Oh, boy. Now I got to pull up an interest calculator.

I would love to know. I would love to know. Because here is what I'm going to pull up 95 grand. It was going to be what? 95 grand is what you'll end up paying if you just make minimum payments.

Correct. Okay.

“And that car is that truck's going to be worth what?”

Fifteen or twenty by then? I mean, a little more value to dump truck. Okay, but let's do the math you're avoiding. You're going to pay 13.9% interest. You're going to pay $40,000 extra dollars to not pay 10 grand in taxes.

That's just bad math. Like you're sitting on 55 grand cash. You're worried about the 30% or the 28% or whatever the government's going to take out of that. To avoid that, you're going to pay $45,000 into appreciating asset or $40,000 into

appreciating asset and it's going to sit around your neck like a rock over the next seven years. Yeah. I understand. And do you have a personal ours and see fund for your own life?

Yes. Is that separate from all this or is that part of the 55? That's what my index one is. That's one of my. Okay.

“Cool, you're doing a lot of good things.”

I'll give you another tip for your emergency fund. It is wise to keep it liquid. Three to six months of expenses liquid, which means not in a brokerage account invested in the stock market. Because as soon as you have an emergency, the market is going to take a dip 15% and it's

going to gut you to try to take that money out. So just keep it in a high yield savings account, making three and a half percent, and then you can leave the rest invested. But I would take enough out to pay off all of your debts, get you the emergency fund, liquid, and then move on from there to actually invest for the future running a completely debt-free

business. If you hate that life, call us back and you can yell at me, I'm fine with that. But I promise you you're going to have so much more peace in your life if you simplify and focus on one thing at a time. Yeah.

If you hate this, here's the deal.

In some months, you can go take out a personal loan for $55,000 at $13.9 percent and put

that money right back in your checking account. You'll be right in the same spot. Yeah. But I want you to try running a business, running your life, and not owning another man a dime.

And like George said, give a government their money and move on with your life. Gotcha. If you had a trillion dollar business and you were moving stuff around, are you had a $300 million business, and there was some true tax savings you could make with moving stuff around and moving it to this state, and we're fine.

That's great. Good. And awesome. You're just not there yet. I'm not there yet.

George isn't there yet. We pay our taxes and we get on better life. And I'll tell you, last year I paid so much in taxes, I had to call a buddy. I called a friend and said, I just need to tell one other human how much I wrote in taxes. And I told him and he got silent and he was like, oh man.

And then he was like, oh that means you had a good year though and I was like, yeah. And he goes, well, okay, then get on your, like, get over your stuff, but I shared it with

“somebody and then I got on my life, you know what I mean?”

Yeah. Yeah. There's so much Instagram he stuff about how to save on taxes and slap that little bit reverse it by a G wagon and depreciate a hundred percent of, I'm just, it's exhausting. So Nicholas, at the beginning of the call, you told me, hey, yeah, I got it, but it's

zero percent. I want you to start thinking bigger about your life. So instead of thinking how much down, how much per month, which is broke person mentality, think wealthy person mentality, how much let the sentence stop there. Not how much an interest and not how much down, not how much in payments, how much total

and can I afford it in full and the answer is no, then we need to pause a little bit of

delayed gratification, a little bit of patience. That's who you're going to build this business the right way because there's going to be a temptation around every corner to scale and grow way too fast and not I want you calling back saying, dude, I'm way over leverage in my business. I'm all about practical ways to save time and mental energy, especially during the summer

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And for all the naysayers, stay haven't really say how he does it. It doesn't really show why the -- like, here it is. This is the opening of the books. Dave gets so nerdy that we're like, "You sure you want to share the formulas for this day?

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“Literally is in Salt Lake City, what's going on, Amberly, how can we help today?”

Hi, I'm calling for some advice on my situation. I'm 21 years old, I'm headed to college in the fall, and I'm trying to do it the right way. Back when I was in high school, I was able to get 65 college credit and a technical degree in automotive studies.

Wow. I then served a mission for my church, and used my savings from my technician job as a coaching when I got back. So I paid for another semester of college and bought a car in cash. I now have my associates and about $2,000 in savings, and now I've transferred to a new

college to get my bachelor's in experience, design, and management. My question today is, how do I avoid debt in college and seek to object while feeling like I don't have that much money to work with while in the first place that not wanting to burn out? Yeah, you have 50 questions, Amberly, I was going to say, I'm really proud of you.

The fact that you've made it this far, debt free, it sounds like, is incredible.

you've also kept your character about you, you've also got a vision for what you want to do, and like all that, I'm proud of you. Just as an old man talking to a 21 year old, well done, dude, you're on the path. So let's look at the math of this.

“What is this school going to cost you each year and in total?”

Yeah, it sounds like you went to Alexis dealership, you got in the car, and you're about to turn out of the park and then you're looking out the window going, how do I do this debt free? You've already enrolled in a thing, and now you're asking about the price, George and I would

suggest you're doing that backwards, instead of saying, okay, here's what I got, here's

a much money I have, like we save up for the car first, then we go car shopping, but we've already went shopping, we picked the car, we signed it, and now we're like, oh, we got to pay for that. How do I do this debt free without any stress and without burning it? All right, you go to say in, yes, okay, so is this a local in-state school?

It isn't in-state school, and tuition, it's going to be $3,500, it's a master. Nice. That's very reasonable. That's beyond reasonable. Okay, so seven grand a year, are you living at home?

No, I am renting. Renting, okay, and are you working part-time full-time right now? I do have a job, it'll pay about 18 an hour with room to improve about 33 hours a week. Fantastic.

“Okay, and you can still do school while working those 33 hours a week?”

Yes, I'm doing all night classes so that I can still work during the day.

Wow. Wow. I hope everyone listening, everyone who's over the age of 40 who thinks it's all going away because this young generation, there's a Julian Amberly's out there who are, Amberly, you're giving me hope for my kids, so well done, dude.

You're honest. How much is your rent? $500 a month. Wow. This isn't credible.

Okay, so your gross income for the month, let's call it $2,400, you take home $2,000, is that fair? Yeah, roughly. Okay. Great.

Now, if you're on your rent is $500, that leaves us with $1,500, now we still have to

cover other bills, so you got to eat, right? And you have $2,000 to your name, we're going to call it your starter emergency fund and you have no debt.

“So right now, we could sock away a little bit of money each month, right?”

Yeah. How much do you think you could put away into a savings account if you worked really hard? Okay, so that's six grand a year right there. That's a good start, but we need to cover seven grand a year just to cover the tuition.

Okay, right? Then I feel like I could probably do more. Or then you've got some or two. There's other levers. Yeah, you can work more in the summer, you could apply for scholarships and grants like

it like a mad woman, make that another part time job every weekend, I'm going to apply for five or six different scholarships. And even if you get a couple out of that, that was still a pretty good hourly rate. And so that's the way to do it is go to affordable school, check. You did that part, work part time, check, get scholarships and grants, check.

Now you've got an actual system here to cover the gap, so turn it into a little math equation, know that my income will cover this portion, and then get ahead of it. So you know, when is the next bill do and how much is that going to be? Yes. Do you know?

Is it like September, it's going to be do? Yes, I believe so, September. So 3,500 bucks by September. Well, I don't, I don't even mind you getting on a semester payment plan with your college. I'm going to pay you this much per month for this semester, I'm going to pay you this much

per month. Usually they'll do it for 50 bucks or 75 bucks, they put you on a semester payment plan. And just make something about some months and for a couple of years, and you can factor that into your monthly budget, that makes it simpler for you. Okay.

And Amberly, let's, I want to get to the question beneath the question that you asked, okay. Can we be honest and say you're 21 years old, you've been working hard since you graduate high school, and you've largely been working. Somebody else has been telling you what to do. And now you're entering into a phase where quote unquote, you're free, and now you got

two other knuckleheads saying, well, actually you got to keep doing live in like this pretty pretty low. We're not out of the woods yet, right? Like just like burn out is not being honest with the reality that you're in. And you're very honest.

So if you, if you are able to metabolize, I got two more hard years of scratching and clawing ahead of me, and I'm going to choose joy at work when I'm doing whatever I'm doing 33 hours a week, and I'm going to, I'm going to find not drudgery, but I'm studying a thing that I actually want to go do in the world, and I'm going to choose to walk into

but I'm going to, I'm going to choose gratitude walking into that thing, and I'm going

to keep a calendar. I know this ends in two years. Man, that's going to keep you from that bitterness, that resentment, that I just want to break free, do whatever I want, whenever I want, it's just going to keep you on that path for two more years.

I'd rather you do this now than the back end where you're trying to make student loan payments while trying to live your new adult life. That's right. So set up a sinking fund, 600 bucks a month, and that thing covers me no matter what. You're crushing him, really.

All right. And you're going to graduate completely debt free, making good money. So proud of you. This is a success story in my book. I've met plenty of people over the years who had a product that they wanted to sell,

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Start your free trial at Shopify.com/Ramsy, Shopify.com/Ramsy, that's Shopify.com/Ramsy. Kayla is in San Francisco, up next, Kayla, welcome to the Ramsey Show. Hey, how can we help? Hi, I'm Cole.

So I'm calling 'cause I would love a professional opinion.

I'm 26 years old, traveling living with my parents and paying rent to them. I desperately want to buy a house and move out. My parents keep telling me to wait for interest rates to drop that I don't want to. I work full-time, and I have work full-time, about 18. I have no debt.

I have a pretty good credit score, and I'm trying to figure out what the best next step are for myself. Wow, well, you asked for a professional opinion. We can only give you amateur ones, but we'll do our best to guide you. So you said you're desperate.

Where is this coming from?

“Do you want out because you don't like your living situation?”

Are you tired of mom and dad's thumb on you? What's going on? I'm not so much fat. I just feel like I'm a little bit behind or my age, I'm going to be 26 next year. Oh, my goodness.

I didn't do the math. 26 does lead to 26. Yeah, okay. Go. So you're behind who?

That is how to care. It's kicking in soon. How many 26 year olds do you know in this Bay Area, who are homeowners, that you're behind? So I'm liking the Bay Area, I'm more in the central valley.

They're not quite dancing. Okay, any 26 year old in California, how many of them own a home? Probably not many, but I'm an ambitious 26 year old child. Okay, I just want to make that clear that you're not behind anyone. You're behind your own self-imposed goals.

Yeah. Okay. That helps us just clear the decks right there. So you have a goal to be a homeowner in your 20s. Your parents are saying the interest rates are high.

You should wait. I'm saying I don't want to wait, I just want to go buy a house. Pretty much, yeah. Okay, how much money do you have saved outside of an emergency fund for this house down payment?

So I have about 49,000 total checking and saving. And that counts your emergency fund? That's kind of all the cash to your name? Yeah. Okay.

I have 20,000 or 401K for my last job, but other than that.

“And how much is a house that you would want to buy in your area?”

I'm right now probably between like 400,000 to 550. Okay. And what are you bringing home? What is your after tax monthly income? Don't include the 401K in healthcare, but kind of after the government takes its part,

how much would you bring home every month? Probably about 36 to 3800.

So our parameter here at Ramsey to avoid you being house poor and avoid you making a regret full decision is 25% of your after tax monthly income going towards housing. That includes the principle, the interest, the property taxes, the insurance, the H.O.A., because what happens is Kayla, you go out and buy a house and you're like, I did it. That house is $2,800 if you're income out of $3,800.

Now you are broke. Well, that's what we want to avoid. So I'm just crunching the numbers here to show you even with 20% down, that's $100,000 down, on a 15 year at the going rate, which let's call it 5.8% on a 15 year. You're talking about $4,000 a month for that mortgage.

So my question to you is, I love that you have this goal, the math says you can't do it right now. Right.

And I'm trying to figure out, like, maybe get a second job.

I could also, I don't really want to rent. I feel like renting doesn't really make sense, especially with, I mean, that's pretty much half of a mortgage every month too. Okay, but there's also a lot less risk involved with renting. You don't have to cover the H fact going out, you don't have to cover, you know, you're

covering rent and that's buying you time and patience. And so I'm not saying that to crush the dreams, I'm just showing you the math of it. Going, I know it stinks to rent. It may be the wisest thing to stay at home for now and keep saving for another year.

“I think you should go out and get your own apartment and I'm saying this intentionally,”

not a fancy one. Like the least expensive one you could buy that's in a safe location and practice and it sounds so cheesy to say it like this, but practice the daily expenses, practice the bills coming

every month and they just rely on you and practice, here's what it call, here's how much

money I'm going to have at the end of every month. And practice, I can't go out to eat or I get to go out to eat or whatever, like it's getting your feet underneath you. You're like an amazing freshman in high school basketball player who's like, yeah, I'm just going to skip it on go to go to the draft and everyone's like, hey, you could play your

sophomore year in high school, maybe go to college, get some good coaching there and then head to the NBA, I mean, yours, you're a go getter and you are clearly good. Say, man, 26, I was so underwater with how much I'd spent, that's not you, like you're on it, but there's just several steps to take, but I can't, I can't parse how much of this is pinned up, how much would you feel unshackled from this obsession with I got to

get a house that got to buy house and behind up behind to, I'm 26 and I got a full-time job and I have 50 grand to my name and 50 grand to my name and it's in cash and my mom

“comes down and says, you need to clean your room, right, like how much of it is, if I just”

got away from my parents, got my own place, got my own place settled at in, did my own

laundry, made my own meals, went home first Sunday afternoon, breakfast or Sunday afternoon,

lunch, whatever, that would help this sense that you're behind because I do think at 26, you're behind because you still live with mom and dad, making the kind of money you make, but you're not behind when it comes to home ownership and all that, especially in the area, so that will scratch the itch of independence. If you desperately want to get out, go rent, but please, please, please, don't go out in by house. I don't think you'd even

qualify at this point, but even if the bank said, sure, we'll give you a loan, it's going to be $3,000 a month out of your 3,800, getting a side job is not a sustainable path to home ownership. You were going to burn out in college back going, I need to sell this house. It was a mistake. And I'll tell you, I bought a fancy house here in town and I just last, like, was two or three weeks ago now. I had to replace the whole central AC unit that passed inspection

that was good to go. And it just died. And that was super expensive. And if you've burned every bit of cash you have just to walk in the front door, you're in a real real mess when the roof needs to be repaired when the sidewalks got to get fixed when the foundation has an issue in the air. And we're just saying this is just part of owning a home. And it'll appreciate over time, but man, there can be some acute challenges you have that if you don't

have the cash for it, people, George, people beat us up for the 25% thing. It's us trying to say, hey, we care about the fact that life happens. We still want you to like invest and go on vacation and enjoy your life and not just have to pay the home payment. That's all you can do with your life. So I hope that helps bring some clarity to it. And I'm going to give you my free home buying course, Kayla. So hang on the line. Our team will make

“sure you get that link. I hope it gives you some clear next step. At least because I think”

right now what you need are just some facts. Because if I give you a goal, Kayla is going to go get it. Yes, you will. And I think that's all we need right now. And it's a lot of just emotion. And I just want independence at all costs. But I don't think the next movies to buy a house. And just the napkin math scared me looking at that. And that's the

on that one. You should buy a house when you're financially ready to buy a house. And that's

the parameter. A quarter of your after tax monthly income will help you make sure that you're making the right decision. And if you're Kelvin you like again, this isn't us being fun ruin or this is just us caring about you. It's a math problem. And so if we're telling you hey, get it down to 25% if you take home pay, that means you're going to have to move into less of a house and you're going to qualify for no question. That also means you're

going to have to double and triple and quadruple down on your down payment to bring that total of the house you're buying down. Which might mean I got to work on my career and figure out how to make six figures in order to make this call happen. I got to have myself do I do I have to live in California because there's other places in the Midwest. So I can buy the same house for half or a quarter of the cost. Yeah. I grew up in Boston and at 20 I moved

not because of the cost of living, but part of it was I don't know if I can sustain a life

“here in a high cost of life. And if home ownership is important to me, I got to my great”

south to where I can get myself a nice little town home and afford it. And that's then that's what I did. Right. And now, you know, my fourth home in 13 years just because I followed these principles. But having too much house is one of the worst things you can do for yourself financially because you will not sleep well in that house. Yeah. And you'll hit that goal and go, that wasn't the goal. The goal I really wanted was freedom. And this house is actually shackles.

Yeah. There you go. And your own house becomes a prison that you lock on the inside and man, I don't want that for anybody. And then the HFAC breaks. Exactly. And it's a prison nightmare.

It's a hot hot prison. Oh. Ouchie. Thanks for the call. Thanks for anybody wanting that free first

time home buyer course. We're going to drop a link into the description of this episode. So wherever you're watching, go to the description. We'll drop a link there so you guys can check that out for free. Appreciate the call. Hey, guys. It's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And health care is one of the biggest expenses in most families budgets. And that is why

I recommend that you check out Christian health care ministries. CHM isn't insurance. It's a health cost sharing ministry. That means members help pay one another's medical bills. And they've been serving Christians since 1981. CHM programs start at just $115 a month. And here's why

“that matters. If you are paying more than you need to for health care, that money could be going”

toward paying off debt, building your emergency fund or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all, a lot of families find CHM gives them more room in the budgets. That's why so many members say they're better with CHM.

And right now, new members can receive a 50% credit towards their first month of membership. Go

to CHministries.org/budget and use promo code Ramsi. That's CHministries.org/budget and promo code Ramsi. Welcome back to the Ramsi Show and the Fairwins Credit Union Studio. I'm George Campbell here with Dr. John Deloni taking your calls. Mark is in Des Moines up next. Mark, welcome to the show. Hey, thanks for taking my call. Absolutely. What's going on? So, my wife and I together, we make about $250,000 that's a combination of

her income, my income, and then from VA money we have coming in, which we've been skating by things that have been easy. However, we have no debt other than our mortgage. However, she has burnt out at work and is looking at going back to school. Her going back to school, be covered by the GI Bill. So I'm not concerned about cash flowing back. Just trying to figure out how to or where to pull back. We've been going like crazy, trying to get our house paid off,

and score a little as much money for retirement as possible. And I'm just kind of worried, you know, where, where I pull back, do I pay less than the house to invest less money to I put less than like kids college ones? Where do I go? So you guys are in baby steps 4 through 6. You're at a debt with the emergency fund. You're investing 15% in a retirement. You're putting some money away for college and you're putting extra toward the mortgage. And you're saying, hey, if my income goes

“down to 120, what does this plan look like then? Correct. What will the income go down to?”

About that. So she makes 125 and she would be, yeah, going back school for two years. So, okay.

math on that and done a budget based on that to see what sacrifices must be made?

“So looking at it, I do think, I mean, I think we, yeah, it looks like our expenses are about”

7,000 and off of the, you know, 125, 130, we're bringing in just shy and nine of them on. Great. So you still have some margin. You can still put something in college. You can still put something toward the mortgage. Correct. And this is also assuming your income doesn't go up. Right. With your job. And yeah, she's going to be at a school eventually, right? Working again. Right. So really, we're looking at a temporary dip in income. Can we live off

125 for three years? Correct. That really helps clear it and go, okay, we're not losing this forever. We can make sacrifices for a couple of years for her to go to school. What does she want to do?

She wants to go more into like the therapy side of things. What is she doing now?

She's medical, so it just be kind of a different specialty. Okay. My only fear and John will be perfect to speak to this is that she goes with her. And if she's burnt out now doing this, who's to say she's not going to get burnt out doing therapy, which is also a very difficult field. Right. Yeah. I'm trying to hear for the question beneath the questions. Do you know, do you not think it's wise your life to go back to school? I have no problem with her going back.

I just, we've been working so hard to try and, you know, trying to do everything right. And I feel, what makes this step feel like you're not doing something right? Because if you, if you moralize it and make it a right or wrong issue, you can get sideways real fast.

If you're trying to solve for, I must get on a track and never get off this track till the end of time.

That's, that's a recipe for a pretty rigid life. You created a sort of your own prison there. Yeah. And you locked it on the inside. If you, if you're creating a life with somebody, you'll are co-creating this thing. And what do we want it to feel like? What do we want to look like? We've been bust in our butt. Because you can flip the, like what you've told us, you can flip the whole thing around and say, we worked our butts off for this exact moment when

one of us just has to say enough and tap out and go get another stop doing boxing and go to jujitsu for a while. Like, it's not like we're quitting. It's, we're going to retool for another, another exercise, right?

“And so we've done all this for this exact moment. That's, that's what I'm trying to get to the”

thing beneath the thing here. Because it sounds like you all have worked your butts off. This is a perfect time to go back to school. So it's already paid for. Yeah. It's like checking every single box. So I think the hard part for you is you saw the marathon time and what to do. We're going to make great time and now that time is going to double. It's going to take a longer time to save for college and to pay off the house. That's the part I think you just need to grieve and go, man, that would have

been cool to pay off the house in five years. It's going to take eight now. But you know, it's going to be more awesome than that. Having a wife that loves the skin that she wakes up in every morning, having a wife that's got her spirit back, having a wife who's like engaged in the thing that she really loves. That's worth it 100 times out of 100. Absolutely. I appreciate it. And that's the one thing I would make sure she understands is the grass may not be that much greener on the other side.

I hope it is. I hope she loves therapy, but I would have her go talk to people who are doing the things she wants to do to get a full picture of it, not just what sounds like relief. And Mark, when you all are talking about this, I want to, this doesn't get talked about very often. And so when you're sitting with your, with your wife here, I'm going to use you to as the example, but for everyone listening. Your wife has this, this feeling, this emotional set,

like this physical, like, I'm, I've got to be done with this. And I feel like I want to go back to school. I want to get trained and become a therapist. The world needs more therapists right now. Like great. Those feelings are real and valid and good. And your feelings of frustration. And I wanted to hit this goal. And we had a deal. And suddenly, like, we were both going to use what Georgia said, we were both running this marathon. And then you stepped off the curb and broke

your ankle. Your feelings of frustration and annoyance and, oh, dude, those are real, too. And they're not equally, like, like, one's more, not more valid than the other. They're both valid. And they both have space on your kitchen table. And so when your wife says, I've got to be done, there's a great opportunity. We've set ourselves up for this moment. That's true. And you

“saying, I'm going to be all in a hundred percent. And if I'm going to be fully in this secret”

world, we call our marriage together, just you and me, I also have to be honest about my feelings. I'm frustrated because I really wanted to get out from one of this house. Both of those are true. Right. So what you're, we're not fighting. We're not competing. It's not my feelings versus

painted, it sounds like the right decision is to have a whole unhealthy wife to take advantage of

this opportunity to have free tuition. And it's not like she's just saying, I'm burnt out. I just want to stay at home and stay off in a space for the next three years. It is, I'm going to actively be participating in building something because we do have this shared vision of our life. We both still are two independent people who go to our own jobs and work real hard to serve other people. And then we come home and do this thing called life like those things all work together.

But both of your feelings count. Does that make sense? It does. I don't want you bearing half of yourself just to keep the peace in your house. I want you being honest about what's going on in your heart in mind. And then saying, and because I value us, we're going to go do this thing. Or she might say, okay, what if in two years, what if we cut our spinning to the bone, and got this house paid off, and then I went and did it? I can suck it up for two more years, right?

“It's, that's how couples make united decisions when they're both honest. And they can both”

hold space for each other's feelings, however uncomfortable those things are. Perfect. I really appreciate it. You got your homework. So now it's, and thanks to both of you for your service. Oh, absolutely. And not only service in the military, but service in your medical careers, service to go be a mental health therapist like all that. Like you've dedicated your lives to helping her and people, and I'm grateful for you. And it's cool to think they're

more present because of the plan they follow. That's it. That's it. That's what I want from my therapist and the person, you know, performing a medical procedure on me. I don't want my doctor to owe anybody anything. Yes. I'm not saying that you're a bad doctor if you have loans. I'm just saying it's nice to know that you are fully present and focused because there's nothing else on your mind to stress you out. Find an answer. That's pretty cool.

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“to the show. How can we help? Yeah, great. I think for having me. So my wife and I actually”

won the lottery this past weekend. Literally. Yeah, we won $400,000 off of scratch off ticket.

Nice. Was this a goal you guys had? Was this a regular kind of habit and you finally hit it?

Yeah, so no, we were on vacation. I found a $5 bill on the ground and went and bought a lottery ticket with it. The second time I had ever played the lottery and here we are. Do you have seen this movie? Yeah, literally. I thought we've been there. And it's a verified winner. Yeah, went today and actually in May, verified it all and should be paid out in about four weeks. What's the payout? Can you close the 300? Wow. Do you owe taxes after that? Because I know they withhold a forced

amount but you will likely owe taxes on top of that, right? Yeah, so they think it's estimated to be around 275 as we'll see at the end of everything. But we're working with a CPA and financial advisor to hopefully figure out all the details so we don't make any mistakes. Oh, good. So what do you need us for? Yeah, real quick. I'm like, I got to ask you. There's a personal question. Can you just

you and me and a couple of million people listening? Okay. Here's how I think I would handle this.

there was the taxes. If I scratch this thing and it said you won $400,000 and my take home,

what deposited in my account was 275, my first impulse and I'm embarrassed to say this would be like,

oh man, you know what I mean? My first, I'd first be like, oh dude, I lost 125,000 dollars.

“Even though I just got 275 out of nowhere, right? Is that how you feel or are you a better person than me?”

Uh, to be honest, we're like ecstatic about it. We were hoping to buy 250,000 dollars house in the next five years. And so we kind of saw this as like a literal gift from God. Like, hey, here's your house five years early. Wow. There's somebody just stumbling around right now wondering where their five dollar bill is. I hope you're happy, Michael. Dang it. I'm just kidding. I'll tell you. Are you a better person than me? All right, so you got a CPA and a smart investor. So they're

going to handle the tax stuff and investing if you're going to do any of that. The question is,

where are you at in the baby steps? From a scale of we got consumer debt to we are investing 15

percent and saving for our kids college. Yeah, so I'm calling you. So we obviously want to buy a house, but we've been paying off our debt. We actually just became debt free three months ago. We paid off about 80k and three and a half, four years. So we're completely debt free. And we're saving towards retirement, saving towards a kids education. And now we're just trying to build up our savings for our house. And so we had about 15,000 saved up for it. And then obviously now with this money

coming in, it's going to change some things. And so that's just kind of what I want to know from you guys is, hey, what would you do with this money? Would you use it to pay off the house and fold it? We're going to buy, you know, whatever that house is. 100% in cash. 100% down, if you have money left

over, you know, you can enjoy some of it. You can give some of it. But investing some of it at this

point, you're probably going to burn most of it just on this house purchase and that's okay. You got plenty of time to build wealth. What do you guys make in a year? I make about one, ten, one, fifteen. And how old are you? I sell. We are 26. Oh my god. So making six figures at 26 completely debt free with a paid for house. How much are you going to be investing a month? A couple grand? Yeah. I don't know. You're going to be just fine. I'm not

going to use the investment calculator because I think it'll break with that many zeros on the end. If I'm 26 to 65, I'm going to tell you something that I would recommend you do, that I would not have listened to me at 26, okay? We've already established your better person than me and your wiser than me. And so I'm hoping that this would sink in. If you and your wife have been had a goal for a $250,000 house and that was your dream and you'll have a plan for it

and suddenly the world drops $275,000 in your lap. I would stick to that $250,000 I'd buy that house and I would give that $25,000 away. Because I think that's going to mark this is the kind of people we are. Yeah. And it would be, because the temptation that I would have had at 26 is, I want to buy $250,000 house. Suddenly $275,000 drops out of the sky. I'm going to buy a $500,000 house.

“I'm going to put $275 down. That's what I would have done. And that would not have been a couple”

of action steps towards the man I want to become in my 40s, 50s and 60s. And so you and your wife saying, let's stick to our original plan. We literally won the lottery and now we're going to bless another family, another whatever with this $25k and then we're going to wake up the following day and have a house with no bills and we're going to be right back in the same situation, making good money with the life we want to have and we're going to have real demonstrative

action steps towards the couple we want to be, which is a generous couple that doesn't only bunny any money. That's what I would recommend you do. You don't have to do any of that stuff I just said, but that'd be pretty rare. I love it. And if you already know how to manage the money you have, then getting more of it is not going to crush you. It's going to be back to the managed money and then they get a huge pile of it. Well, now they're really screwed. They make a

“huge mess. That's why we see so many lottery winners lose it in the first year or two. So”

way to go, man, that's awesome. All right, let's head out to Harrisburg, Pennsylvania, Brian joins us there. What's going on, Brian? Hey, how are we going? Good. How are you? Good. Um, so I got to throw it all a lot of time. So I'm going to ask my question. Um, my fiance student loans. I don't have any. And I'm budgeting right now to put as much money in fair money that we have for the student loan. But I'm wondering if maybe I should try to split it between the student loan and

savings or just put it all for the loan. Well, number one, are you applying it to the student loan? Are you just saying I'm earmarking this in savings? Um, what do you mean? Well, I don't recommend

married to. Yeah, so we're getting married in two months and I'm planning this for after we're married.

“This isn't okay. That's what I was going to say. I would put it in a high yield savings account and”

you guys get back from the honeymoon. You've got the pile of money. Let's apply to the student loans. So it depends on where you're at in the baby steps. We would say have your starter emergency fund thousand bucks. Obviously, make sure that the wedding is cash flow. You got that? That's 5,000. I'm sure you're good. So you got 5,000 bucks in cash and is the wedding all paid for honeymoon paid for all that? Um, yeah, pretty much. Okay. I want pretty much to be it's for sure paid for.

We're not going to put the gap on a credit card. Yeah, we have, um, I have the money set aside for

the last stuff we need. It's just the matter of, um, kind of the check. Okay. And then once you

guys are married, we're going to just make a list of all of our debts. Is it just your fiancee's student loans or are there other consumer debts as well? Um, I know Carl, like no other debt on my

“son, she didn't have any other stuff. Great. So it's just her student loans. What's the balance?”

30, all in about. Cool. So so her student loans become dolls, debts and all that focus. So I would not, uh, you said, should I split someone to saving? Should I split some over here? We would say just attack the debts. Do nothing else, but focus on these debts. And once those debts are paid off, now we can stack cash. You freed up all of those payments that puts you in

baby step three, where you get three to six months of expenses saved up in a high yield savings account.

So how long will that take you guys based on the current trajectory? Um, I'm putting about or my plan is about a thousand and I'm on towards the loans once we're married and so it'll probably be two and a half years. She working too? Yeah. So together, you all can only put a thousand bucks in.

“That's all you, that's all you, all the margin you'll have. Yeah. All right, at least that's what I'm”

budgeting as of right now. What will your household income be? Um, mine is, uh, before taxes about 60 and her has reported taxes about 20. Okay. Is she working full time? Yeah. Should we full time? Making 20. Yeah. I'm confused by that. That's like nine dollars an hour. Yeah. Or sorry. No, that's not that's after taxes. Sorry. I didn't, but I don't remember what the math was before tax. Okay. Uh, did, uh, yeah. Sorry. Well, I would aim to try to get them paid off in less than two

years. The average we see is 18 to 24 months to get rid of your consumer debt and if it's just the student loans 30 K, I would try to up that income once you guys are married, have her making 40. You're making 70. Now we can knock this thing out way faster. Because a thousand bucks a month for 30 months, that's a grind. Especially if that's all the margin you have out, put 18 months on the calendar and have a what must be true for this to come to come to fruition conversation and see if you'll

make that happen. Hey, George Campbell here. Listen, if you've had your phone two or three years, your phone can now be unlocked. That means you can switch to boost mobile to get unlocked, bring your own device and keep more of your money where it belongs. Look, the fat cats of big wireless, they are counting on you, just staying put and overpaying every single month. They want you to think switching is complicated risky or just not worth it. Meanwhile, your bill keeps

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boost mobile dot com slash ramsy and get unlocked today. That's boost mobile dot com slash ramsy. $25 forever requires customers to remain active on boost mobile and limited plan. The ramsy show question of the day is brought to you by YRI-5. You keep putting off, dealing with your private student loans. Now is the time. YRI-5 helps borrowers, explore low fixed rate refinancing options and affordable payment plans. Go to yRI-5.com/Ramsy

that's the letter YRI-5y dot com slash ramsy may not be available in all states. Today's question comes from Jill in Minnesota, Jill writes, "Our son graduated high school

but he stays up all night playing video games and sleeps all day. We've tried to help him

“and have given him plenty of time, but nothing has changed. We wrote up an agreement that”

gives him two months to find a job and start paying rent. If Rint is late, his phone service and Wi-Fi privileges will be suspended. If he doesn't pay rent for two months in a row, he'll get a 30 day notice to find other place to live. When we reviewed the plan with him, he became angry and hurt and I'm struggling with intense mom guilt. I don't want to enable a lifestyle that isn't preparing him for adulthood or we being reasonable. Here's the problem with

this question. "Is I don't want to enable a lifestyle that isn't preparing him for adulthood and I don't want to feel uncomfortable?" And those two things can't coexist. Our mutual friend Henry Cloud is a great story. He's very similar to this when the parent was talking to Dr. Cloud about the situation with their kid. He said, "Dr. Cloud, wisely said, what your kid needs desperately from you is problems." Because your son has zero incentive to do

anything differently than what he's doing. He has free rent. He has free schedule. He has nothing no responsibilities. He's just doing what a natural inclination this oozing through life because there's place to ooze. He's on an infinite summer break right now. Congratulations, high school. What do 18-year-olds want to do? Sleep all day and play video games. He's live in the dream. Right. And the greatest gift he could get, the greatest gift a young man like this could get is responsibility.

The idea that I have to do a thing because there are real consequences if I don't. And so

“I think you're not only being reasonable, I think you're being overly generous because now”

it's going to turn into a year where there's any true consequence here. Personally, this is just me having worked with people of this age, my whole career. Getting into the phone service and Wi-Fi privileges brings him back to middle schooler and you back to, "I'm grinding you from your fill in the blank." And so if we're going to truly do a tenant, like a, like a, a tenant, like homeowner agreement here, we're not going to do a little, we're not going to insert little mom and dad

pokes in here. You pay your rent or you're out bigger than this. It almost feels like just to say, "Hey, you know what? We were wrong on this deal. We need you to move out." Like we want our house back. We want you to fly a little birdy fly and it's time to go make it happen. And then he's going to have to go. And you're going to have to be the adult, emotionally intelligent, emotionally mature adult and say, "I am going to fill," said, "I am going to fill up a set that I did a thing in my

son's mad. I mean, that's part of being a parent." And, but I know this is the right thing. Yeah, right now it sounds like every time you talk to him, you just sound like his landlord. And I think at 18, you're transitioning from parent to friend. And so what he probably needs is just some guidance. Someone to care about his future and show him a path out and go, "Hey, I noticed you're really into this. Have you tried doing this over here?" Yeah, but maybe we're going to

allow side mentors for seven months. And he's like, "Oh, I just want to play video games." Yeah, not happening. Not happening. But I know what 18, like, there's things I love doing, but no one showed me that, "Oh, there's a job that I could actually do some of these things." So that's where I go, maybe he needs an outside mentor, a friend, a third party to kind of step in and get him excited

about life. Here's what I like to frame this. Unless, like, if you don't do this,

then I'm cutting you off. I'm cutting off your relationships. I'm cutting off your home. I'm cutting off these things. I like to frame these, especially with all kids. But when you're talking to an 18-year-old,

“here's the choices in front of you. If you want to go to college, if you choose to go to college,”

here's how we are going to support you. If you choose to go get a job, here's how we're going to still open up our house on Sundays for you to come over for lunch and you can sneak some laundry in. If you choose to do nothing, you are choosing to move out, you're choosing to fill in the blank, and as a parent, I can say, "I can't stand that you're making that choice." Because I want to be right here with you the whole time. You're choosing to leave. I don't like that choice,

but that's a choice you're making. And I want to always hand the choice, the responsibility,

or another analogy I use a lot is I want to hand the weight back on the bar that is life back to them and say, "You've got to learn how to lift this and get stronger." Because that's how life works. I'm not going to be there to clear the deck for you all the time. And if you've waited until 18 to start enacting this, if Mom guilt has haunted you his whole life, man, it's going to be an abrupt lesson for both of you. It's going to be a really rocky

for a season. No question about it. But yeah, I got one, Jail. Yeah, I'm not going to have a high school graduate just living in my house. Free load. Yeah, playing video games all night and sleeping

What's going on, you guys? Thanks for taking my call. You've got a brother, what's up? So my wife and I would like to get your opinion on if leaving California in pursuit of a lower cost of living and eventually buying a home would be the best decision for our family. That's a big decision for two random guys. Yeah, we don't know you that. Well, you tell us, you're interesting. You value home ownership over your current location.

“Yeah, I think so. And just like the the future of what our lives could be in like our family.”

Now you're talking. Now you're talking. Yeah. So there's a bigger picture here. And you're going,

here's what we really want. And none of these things mean we have to stay in California.

You're willing to make a sacrifice, which is wise. Because we always tell people, you don't get a pass on math. If you can't afford to have the thing there, you don't automatically get it. And you might need to move to a lower cost of living area if your current income can't support it. I'm right on board with that. Where do you guys want to move? My wife is down with Tennessee and I am down with no state income tax.

Okay. So any state with no income tax like that's fine with me. And so Tennessee could be it. Texas, Tennessee, Florida, Nevada. Yeah. Okay. And do your jobs transfer easily? So I, I work full time as an EMT for bottomist in the ER right now. But I'm in school, get free at my local community college getting my nursing degree. Oh, uh, in my, my wife works full time as an assistant manager in a clothing store. Okay. So both of you would need to find jobs

before you make some move. And do you a family nearby in California right now? Or would you already kind of on your own? Yeah. That's kind of the thing that's keeping us here is, you know, we got another kid on the way in January. We're having our second baby and our family, our parents and my mom, they all live around us. So it's like, if we need to do something, we can drop our daughter off and it's, it's free and we trust them. Yeah. Sure. That's the thing

“I want to get away because a lot of people underestimate how great their life is until they move”

away from family. And they go, oh my gosh, I didn't know that was such a lifeline. We didn't have it. My wife and I did that. We had two young kids and we moved halfway across the country and both of our parents lived within a few hours from each other. It was tough. And what it meant was

kind of like we always say you don't get a pass on math. Me and my wife did not get a pass on

new relationships and we didn't get a pass on new friends and new mentors and things like that. We said to go, we had to go, not use the default settings which had been our parents and our neighbors and we had to go, we had to go dig in. And I'll tell you on this side of it, leave in family has been really hard and some parts of it have been amazing. Right. So there's no, there's no Scott free but the thing that we wanted like you're talking about is we wanted financial freedom. We wanted

water to fall from the sky occasionally. We wanted these giant green things called trees. Like we had some things in our mind that we wanted for our kids and for our family, solving for peace. And that came at a, it does come at a cost but on the whole, it's been the greatest thing we ever did. So once you make the decision, just make peace with it and don't come man. Remember in California, just go, this is our new life. We said, this is it. We're going to move forward with it.

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every dollar for free in the App Store or Google Play. David is in Lexington, Kentucky,

up next. What's going on, David? Hey, you guys are going. Great. What's your question? Just kind of

have a question about how the fastest and best way to get out of debt. Me and my wife we've been married for four years now, because about a year we spent way too much money on our wedding, we realized that after about a year, actually we've been married and it's sort of trying to find our way out of it, and we paid off a little over $30,000. And it's fast work up years. We bought a home. We still didn't have our debt paid off at the time, bought a home. Now we have two kids, and we have

right at 40, 42,000 in credit card debt. We have 20,000 in the city. She has picked 20,000 in the

“student loans. 13,000 in a mower. I think I feel I owe 13,000 on my truck, not 14,000 on my truck.”

I make roughly, I do 40 for my four jobs and a mowing company in my own against the mower. I think we're going to ensure there's a little party business for she does parties all together. I think we're going to clear right at 100,000 this year. And we're still not getting any more on the day. So you guys make a $100,000 and you have about $89,000 in debt? Yeah. Plus the mortgage. Yeah, the mortgage is 16.56 a month. We owe $2.15 on it. Okay, so let's ignore the

mortgage for now. We're going to walk through a process called the baby steps. Do you guys have a $1,000 for a starter emergency fund? We do. Great. Baby step one, check. Baby step two. We're going to knock out all of this consumer debt using the debt snowball method. So you ask, what is the fastest way to get out of debt? The one that has been proven to actually work. The one that we recommend that's caused millions of people to do this thing is called the debt snowball method where you list the

balances smallest to largest and you ignore the interest rate, which is really hard to do when you see that interest adding up. But the goal here is momentum and progress and you're going to knock out that smallest balance really fast. With all of the margin you can must drop selling stuff, work in those four extra jobs. She's hustling on the weekend with her side business. And once you free up a debt, you free up a payment. Now you apply that payment to the next debt. And so if you do that,

making a 100k and you got 89 in consumer debt, that's still going to take a while, just based on the debt to income ratio. So now we go, okay, what can we sell? Well, you got to mower on a truck. Could we sell those things and get cheaper versions of them and get out of those payments? Or how much do you make on your mowing business on the side versus the food? So far, if I don't do any pick up any other customers this year and I just take one of my, I want to make 22, but as you take taxes out, it's

going to be about tax. Well, not taxes, the gas and supply and the payment on the mower. I got zero

“paying interest for 48 months, so I don't have any interest on that. Are you trying to impress us, David?”

I'm trying to sell me on a mower. But we had so all of the other should be around at 15,000

clear. Okay, so you basically bought a depreciating asset that is 100% the valuation of your company.

And so I would say mathematically and psychologically and time-wise into young kids. If you stop mowing and sold this tractor, there's zero percent chance you get a 13-grain of four, but let's pretend you did. And you just said, I'm not in the mowing business anymore. You actually come out net neutral, which in your situation is net positive. Because if you just went and got an, like, for the time you mo, if you just went and got an

hour of minimum wage job, you'd come out net better when it's all said and done. You go to them saying. So how much is the mower worth? It's brand new. I just bought this year. The 2026. Yeah, it's 2026. It's got a hundred, I've already put a hundred and 20 hours on it. Oh, geez. Guess how many of your customers care if you have a 2026 mower versus the 2022 edition?

It's a scag tiger cat for you. Okay. Good job. So you wanted a nice toy and you said I can

“justify it with my side business. That's kind of yeah. What's your main business?”

I worked for Walmart distribution center. Okay. What's your second business?

I do the maintenance on our church campus, which is a total of four different buildings. What makes you the most money per hour? Per hour. It's when I run the landscaping jobs. So could you just work at your distribution center and cancel those other jobs and just start hustling more long-care jobs? Not good, but it's very flexible with my other three jobs are all here on the church campus.

All of them are here. And I took the place before other people when I wrapped it on all these positions. There's 40 people doing them. I took all of them on. It's very flexible. I may be work here 20, but 20 to 25 hours a week, give or take a couple hours. What do you make for that? I'm very home. I think it's 17 hours, 1400 a month after social security impacts are cut out. For saying if you make 50 an hour doing landscaping, even with less flexibility, you'll come out ahead.

Rocks. But then I'm worried they're running to the risk of not having a client. Having the proper medical on-tail and order to fulfill all the area. If this is your round,

I'm going to pay for that. I got you. But here's the thing, you're in an emergency situation.

You're 100% loved. Without your house. And that my screen says you're $109,000 in debt, which is 20 more than I factored. So where's the other 20 coming from? Well, what is it now? You got 42 in credit cards, 20 in student loans, 13 on a mile or 14 on a truck. Is there anything I'm missing? Yeah. I said 20,000 in student loans, correct? Yeah.

Yep, no. Okay. Everything. What is a truck worth? You owe 14 on it. What can you get for it, private party? I think I know what I need to do. I think I need to sell the truck, but everybody in my family is like, if you're working that much, you need a lot of wealth, truck. It's worth 20. I think I can get 24 out of it. So you will net 10k in which you

“could go get a truck for 10k. Right. That's still reliable. That's what I think I need to do. But so many”

people that have relied on on my loss. So many people are broke, David. Yeah. You're asking people for advice. You're going to get broke people answers. Right. We're trying to show you a path out and you're trying to justify with a reliable transportation. And so, what's your truck payment? Three, fifteen. And then what's the more payment? Three, sixteen. And now I'm sorry they dropped it. It was a two, eighty, two, a mile.

Okay. But between the two, you just gave yourself a $600 net raise a few sold both of those things. Now you got some Argentinian knockout, the student loans. Right. Because now you're only 62,000 in debt. So we can start knocking out the next ones. So even though I would clear, even our clear more money amounts having the mowing business, our years saying I would still come out. You could go get a mower on Facebook marketplace in charge 50 bucks a yard. The only thing I'm worried about on that

mower is that you could resell it for nine. Right. Could you get your 13 back out of it? No chance,

“I bet. I think I could probably get 10 to 11. Okay. So you could save up the difference.”

And you'd still be better off. If you came up with 3000 in cash to get out of that loan and sold it, it's still wise. So don't have the sunk cost fallacy of, well, I'm under water on the mowers. So I can't sell that. I can't sell the truck because I need reliable transportation. That's the kind of-- I can't give up the insurance job because it's flexible. Yeah. I totally believe I can sell the truck. I don't have an issue selling truck. It's just been

trying to listen to the people I trust, but I see what you're saying 100% there. So you're saying I should give the church job and the mowing business and sell my truck and then just pick up a part time to do. No, I'm saying if you're going to keep this tractor and keep this mowing business, because it sounds like you're really good at it. It sounds like you're actually making some headway. You've reached that saturation point where the amount of jobs you're willing to go get,

barely covers your your costs. But since you barely covered your cost, if you found time, if you've found another 22 hours in your schedule, could you fill that time with mowing jobs

that within cash flow this business in a powerful way, get that truck, let me get that tractor paid

off in three months and now you're off to the races. You know what I'm saying? So don't do all three of those, like because then you'll just be sitting at home with one job, no truck, no lawn mowing business, no side hustles. You got to work extra jobs. I just want you to say like you've got to pick a few things and go laser focus on them instead of trying to do everything and keep a lifestyle and keep folks and it's just too much. Yeah, you're spreading yourself then. So you asked us what's

the fastest way out of debt? We just gave you a path out of this thing real fast. Now you got

Credit Union Studio. I'm George Campbell. Join by Dr. John Deloni taking your calls at Triple 8 8 2 5 5 2 2 5.

“Jeff is in Seattle, Washington. What's going on, Jeff? Hey, what's up, George and Dr. John? I have”

kind of a strange financial living situation and I have a question basically about what to

do next with my savings. All right, John is no stranger to strange. Hit us. Okay, so I'm 38. I work full time remotely and I sold my house in Marks. It was kind of a nightmare. And so I basically have like $900,000 in savings. I don't have any debt. I make like $220,000 last year and I've been living in my car ever since then, which I know is not really the normal situation and my plan is to move into a sale, buy and move into a sale boat in November. But I don't know if this is like

a stupid financial mistake and whether or not I should sort of spend more money on my life. I'm not really doing anything with my savings and I don't have any children or a wife or anything.

“Tell me about this kind of nightmare. What was so nightmare about being a homeowner?”

Okay, so I first time I ever bought a house. I bought it well within my means. It wasn't a huge amount.

It ended up being 350 total. I think I ended up only 200 when I sold it and I lost about 85 grand. But the reason it was a nightmare was there was a negligent survey during the closing process. It led to an absolute legal nightmare between me and the neighbors. And during that process, I was hit by a hurricane and that denial of my insurance claim led to basically a lawsuit against the largest title insurance company in the country. And it basically took up

all of my free time and it was just like destroying my life. So I just figured, you know, you only get one life and I'm going to lose 85 grand. That was not fun. But you have $900 and savings now. How'd you get $900,000 in cash? Well, so 800 that is in the stock market. I guess I'm using the wrong terminology. Like a broker do you care? Yeah, I have a non-retirement. It's in a broker's account. Yeah, I'm lucky enough to have a family member who's a portfolio manager. So it's been great

to not have to pay fees when I invest and it's just, you know, really good at it. And so I've been putting money in those instead of 18, right? So many years of that, it's about 900K. I have a bunch of money and crypto that's like really, I don't even add any in-do it. And then I know you're supposed to have less in your savings. But I have like a hundred grand in my checking account just because I am lazy, I guess. Okay, so what drove you to live in your car? Pun intended.

Why not rent somewhere? That's a very strange decision to go. I'm selling my house. I have $900,000 and I'm going to choose to live in my car. You know, if you've more than a million in liquid money. I'm more than that. I mean, you've got 900 in the stock market, you've got a hundred for any cash, plus crypto. Like you've, yeah, I guess you're not. I've got 800 in the stock market. Yeah.

“Okay, so why not rent somewhere? Why are you scared of renting?”

I think maybe I'm having a midlife crisis. Basically, I'm not just like sitting in my car on an empty field. I'm driving around the country and using starlink to work. And I'm just like seeing all the

things I've never seen before. Like I've been there. I don't know. Every national car can

you know, just beautiful. So this is an intentional adventure for you. Yeah, but to be honest, like when I first went into it, I said, okay, listen, you're basically rich through your age. Why don't you like treat yourself and buy a van or an RV or something? And I just don't do that. I'm like using my car. I already owned. And even this sale boat, like the sale boat, I'm planning to buy in November. It's $25,000. And so I mean, the stupid financial

decision in my mind is I could buy a catamaran. It's about 20% of my total net worth. But you know, people do dumb or stuff like that all the time. Like the last guy bought a lawnmower, the work more than his house or something. I wasn't for the extension, but it wasn't that bad. I just feel like yeah, I wouldn't make your life decisions based on what's less dumb than what other people would do. I feel like right now, you haven't been making the super intentional decisions. It just sort of

been like, that sounds fun. I'll try that. So what are you really after? Like five years from now,

Well, to be honest with you, maybe this is like path of scope of this conversation, but I don't think in five years, I'm going to have a job because of AI, right? I know this is like a national conversation. And nobody really knows where it's going. But like, I don't think I'm going to make it to 65. So like, financially or employment wise or you think you'll be dead in 65? No, I'm in good health. I think that my profession, right? I work in software.

Okay. I am not sure that I'm going to be able to work to 65 if I wanted to. Okay, good. I could be laid off in five years. So let's say I, I a hundred percent agree with you. Like that, that's a very real possibility. And so I'll take you back to when I was part of a think tank with higher education and there was six of us on the team. And I think within six months, five of us had sold our house. Like, we saw the math on the, the problem that was higher

education and we're like, oh, this ends real soon. So two things happened. One, here I am, this many years later and colleges are still kicking, right? And I was also right. Like, it's, it's on not a great trajectory. But not in addition to selling my house. I also use that as a time to get my finances order. Go back to school, get trained as a mental health professional

“and to begin to expand what could then come next. And so if you want to get on a sailboat and just”

ride the seas and just say, it's, the end is coming for me. And I'm not going to do anything else

about it. You can do that. Or this could be an amazing work. It could be an amazing runway for you

to do your software job and go get retooled in a totally different profession. And into a totally different skill set for somebody else, you can help for the next 20 or 30 or 40 years of your life. One of those feels like it's caching out and one of those is feels like I'm looking at a potential reality in front of me. And so I'm going to, while I'm riding this thing as long as I can, because it seems like you got a great deal ahead of you, what could be true in an alternative

world, right? I see. And I know a lot of people ask you, calling about how to get out of a money tip. But like, there's this thing that people say, you can't take it with you, right? And like, am I just going to die with $9,000 in the bank and have like, why did I work? I think about this all the time. I think you need a deeper purpose than just my work and my next toy. Do you want to have a relationship? Do you want to be married? Do you want to have kids? What kind

“of life do you want to build outside of? Okay, you have, because here's the thing, it's not”

dumb to buy a sailboat and cash and have that adventure. It's dumb to make all of your life decisions based on the fact that it's all going to come down eventually, so why even try? I just had nihilist and thought, and by the way, I don't blame you, like the, the between the media and this, this emergent new technology we have and the national, like, there's some real challenges. I just told my son recently, I think your generation, the hardest thing you're going to have to

fight is rage. Not anger, anger's right, but rage. This impulse to, you know, at what's the point, nihilism, let's just burn it all down. And so, yeah, like, give yourself a picture and five

years, so you're laid off. You get a five year runway and a million dollars worth of salary

over those five years to go retool and become this man that you want to become, what is that picture? Let's aim for that. And what should include relationships? Whatever you're looking for, you will find. So be real careful about what you're looking for.

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All right, hey, George. I want to talk about that. Let's call it for a second.

The existential crisis? Yeah, because I think that Youngman tapped into a me's 38.

50, you know what my son's 16, he's experiencing it. There's this, this pervasive, the error we're breathing. We were told the story that wasn't true. We were told the story if you just go do these things. If you just go make money, if you just go get this degree, if you just go get this dream job that suddenly everything not only works out for you, but that you don't have any worries. And there's this, this, it's not growing. It's royaling already.

“It's just an, a rage, an, a trapped feeling of life is happening to me. I have no agency in this”

thing. What's the point, right? And throughout history, these moments have happened and they've been flashpoints when there's big technology investments that happen all the same time, right? It happens if we, industrial revolution, and before when it's real easy to give into the rage, I feel like I'm a Obi-Wan Kenobi right now, right? Like you give into the rage and it shoots you off into directions of nihilism, of blindly following something, of wanting to burn everything down. And I get it,

I'm in the middle of it, right? And I've got a young son, I've got a daughter, I'm in the middle of it, and I feel it, and I get it, and also my plea is to not let the rage take over and to exhale and to say, there's things in the world that we hate. There's things in the world that should not be this way. And anger in those moments is right. The question is what are we going to do with that anger?

Are we going to direct it to, okay, here's what I can control here. Here is what I'm going to stop

“listening to. I think a great gift for people in that young man's situation is again,”

responsibility, who depends on you, right? And that means I got to be vulnerable and I got a lot people into my life. I got a lot of relationships. I've got not even just romantic relationships. I've got to allow other people in, and that means I've got to let myself out. I've got to have people that count on me and that I count on, and we have to find value and doing this thing called life together. And from that comes a shared sense of purpose of, oh, I matter. I got to show up here.

My life can't just be about how much money I have in some stock market to count somewhere. Because as he said, you just get to a point, what are we doing? If my job is going to go away someday, which by the way, all of our jobs are going to go away someday. We're going to go away someday. The job I have right now didn't exist when I was in college. There's no such thing as a podcast.

“There's no such thing as YouTube, right? So the job I'm doing now, who knows what this”

many years later is going to look like? Who knows? It's easy to just get trapped in that. And instead of saying, okay, you're right, things might change someday. So do I have my home taken care of, right? And that's kind of the base of the show. You can't control what the government's doing with the XYZ. You can't control what this other country's doing. You can't control what this politician's doing. I can control, I'm going to have a group of guys over once a week. I am going to

control, do I own anybody any money? And I can control, you know what? My job is looking more and more fragile by the day. I'm going to start, I don't want to, I don't want to be doing this, but I got two years of night classes and Saturday classes so that I can get retooled on a whole different career or a less fragile career. Like those are things we can choose. And man,

I just want to implore people, don't give in to the rage because rage always you end up

in a place that you never wanted to be, right? And so feel that anger and then sit back and say, what can I control here? And how can I best use the time, the relationships, the resources I have to go create the life I want? And for me in my house, I say it all time, we sell for peace. What is the least chaotic world that me and my wife, our kids, our close friends can create in a world that's chaotic, right? And that just guides our investing decisions that guides our purchasing decisions that

guys, that guides the, hey, you know what? My daughter's at a church campus week, so me and my son and my wife were like, dude, let's go see the Odyssey, three hours, late shit, let's just go late, let's, we did, and we stayed at Pastor Bedtime, which screwed up my workout routine. We had a blast. The movie was awesome, we laughed as a family, we ate too much. It was, we're solving for

peace, right? And at all, most always comes from relationships and this idea, this question,

who do I want to help with my job, with my giving, with my resources, with my time? Who do I want to help lift up? And while I'm myself to be lifted up? That was beautiful. I couldn't decide about it. I just please, please, you know what? I should have recommended a book for him and it's not a modern self-help book, it's the book of Ecclesiastes. I think that is the

the, the TLDR, the big quote of the book is, "Everything is meaningless." And meaningless does not

“mean a lack of meaning. The actual root word is vapor. It's temporary. It's quit. So then you go,”

okay, if everything's temporary, does nothing matter or does everything matter so much more. So much more. You get to choose. Yeah. You could just read that as, well, nothing matter. So, financial nihilism, it is, or you could say, you know what, really matters, relationships, people, meaning, purpose in my work. That's the book. So go check that one out if you're still listening my friend. That's a, that's a tough call. But I relate to what he's going to. I relate to it.

And not only do I relate to it. I hear it all over the place. Like, that question, what's the

point? May not be, I have a million dollars and I want to live on a sailboat. But the root of that

is what's the point? What is the point? What's the point? What's the point? Yeah. And not only what's the point is, not only what the point is it in the present, but if it's all just going to dot dot, dot, dot, on the road, why even, right? And man, I get that. And find meaning where you are. And that's, that's my plea. Beautiful. Rand over. Tom is up in Jacksonville, Florida. What's going on, Tom? Hey, how are you all doing? We're doing great, man. Just having an existential

crisis over here. How can we help? Yeah, not sure. I can follow up with anything more meaningful than that speech. But my question, I want to call, so me and my wife are starting to look for a person or first house. And so, live in Florida and there's townhouses everywhere. And I want to see what y'all the opinion is on buying a townhouse versus a single family home. I, you know, you can get probably a little bit nicer of a house in a townhouse. And for less,

but I sometimes worry about, you know, you don't own all floor walls. You, you know, you have that share wall. So what, what do you all think in terms of that? Town homes are moronic, Tom. I'm totally kidding. I just said that because George is right next to me and he lived in a townhouse for a while

time. I, my first two homes were town homes and I have no regrets. Now, great. And if, if that gets

you, your foot in the north home ownership, lovely. And I think town homes, people, poo poo on them for really no good reason. Sometimes it's a slightly higher H.O.A. fee. So the key really is location. Is it a neighborhood that's going to give you decent appreciation, whether it's single family homes or town homes? Is it, does it make sense for a family based on the space you need? We had a, you know, three bed two and a half bath town home with 1900 square feet. That's like twice the

size of my childhood home. And so town homes are bigger. They're nicer than ever. They get the nice

“countertops. And so if that's what you guys can afford and you don't want to wait to jump to the”

single family home, then go for it. How much is it? A lot of them start in high twos. So like we're looking at a decent single family home in the area. You're looking at upper threes and, you know, trying not to go too much past four, but you can get a pretty decent town home for upper two, low threes and so, you know, especially with trying to not, you know, go above the 25% take home pay. That's kind of one of the big things. But one other concern is what do you see on appreciation

first that? I know I feel like I've read that town homes don't appreciate maybe the location,

like you said is one of the biggest things. The location will matter the most. They might appreciate slightly slower. If you looked at the data, but I'll tell you the numbers on our town home, obviously this was during like the COVID boom, but we bought for like 300 and it sold for 529, which is insane. Wow. And so to say that town homes don't go up in value is BS. And the key is, it was a very desirable neighborhood. A lot of people wanted to be in that neighborhood,

regardless of what kind of home it was. And so that's where I would caution you to work with your real state agent to go, what is a great location with good schools that's going to have decent resale value that we can afford. And so once you look at it across the board, you're going to make a smart decision that's not going to leave you wondering what we could have made 4% more. You're not doing this to make this spread. You're doing this because you want to place that you can call your own.

And you're going to build some equity in the meantime. And what we did, we paid it off.

“We took that 100% equity, rolled it into the next one. And that's what will happen instead of you”

just renting for the foreseeable future instead of waiting for that single family home. So I hope that helps anybody out there wondering, should I do it? Should I not? Especially for young people? If you want to get that first home, a town home could be a great option. 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.

That's RamseySolutions.com. Buying or selling your home is high stakes because one bad deal can cost you tens of thousands. You don't want to overpay for your next house or sell your current home for less than it's worth.

“That's why Ramsey trusted connects you with vetted real estate agents who have the”

experience to guide you step-by-step to make smart decisions not expensive mistakes. You can find a local Ramsey trusted agent and was your best interest at heart for free. RamseySolutions.com/agent or click the link in the description if you're listening on YouTube or podcast. Katie is in Milwaukee up next. Katie, welcome to the show. You made it. Yeah, thanks for taking my call today. Absolutely. What's going on?

So my husband keeps using to finance our lifestyle. We are not in debt. We are not in debt. We are not worth millions. But whenever we go to buy something like a car or looking at buying us first time together, he's like, well, just get all into that. You're like, why would we do that? So you have the cash to pay for the whole thing outright but he would prefer to take on the payment and use his cash elsewhere? We're not using his cash elsewhere. What's his logic behind it?

“I think it's because that's what people do. So he doesn't know any better. He's just like,”

well, you get a car payment. Who pays full price for the car and cash? That's crazy. Is that his mentality? Yes. How long have you guys been married? You've been married eight years. And this has been like this the whole time. You guys have misaligned values when it comes to money from day one. Yes. We were married and we moved countries. We had a baby all very kind of close together. So I was kind of elsewhere kind of focused and now I'm kind of like, wait, we do what now.

So I'm just kind of starting to pay more attention and we've had the conversation about it but I haven't kind of had all the numbers in front of me to kind of go, wait. Why did we investigate? Well, and now I want to kind of work towards our house and I know he's going to be like, we'll just put down a small amount of paid off. Yeah, he's busy taking on debt. He's not trying to pay some off right now. But yeah, we don't have any debt. So that's nice. The beauty of the conversation

you'll have is it's actually not a numbers conversation. You can't outnumber him. He's going to

always have, well, you're not seeing this picture. Well, and let's be honest, it's worked out for him.

Yes, he'd been very fortunate to have great jobs. They've financed a bunch of his bachelor's years. He's had great travel lived all over the world. Yeah, so he's lucky and he had invested. I give you that. But we're making big decisions now because we don't have a house. It's neither he hasn't not ever bought a house. I have before in a previous relationship. And yeah,

“I think he's a bit scared of there you go. And that's that's what I'm saying. Like the conversation”

to have now is the bachelor life you had is over. In fact, the first marriage that we had when we had, we didn't have a kid. It was just us traveling on the world doing what like that marriage is over. And now we have a new marriage, a new life that we're both co-creating together. Who do we want to be in that marriage? And that's when you, and we're not talking about why you take a loan and we got the cat, because that gets to be a proxy war, it gets to be a distraction from the conversation,

which is I want to live a life with just you where we are never beholden to anyone, where we are

always constantly free. And so anytime we take out a loan, we're now there are boss. This mortgage companies are boss. And this car companies are boss. And this credit card companies are boss. I want you and me to be the drivers of our destiny. And because you're a millionaire, y'all can do that. Right? But this is about you saying here's what I want. Here's the life I want a build, what life do you want a build? And you'll put that out on the table and discuss that,

because otherwise you're just going to get distracted. And he's going to actually be right, because all the data he has in his life up until now is it always works out.

Right. And so you're trying to fight that is a feudal game, because for him, it's always worked out.

It's the only life he knows. And yeah, because I've got the budget and I'm kind of going, if I don't know. Has he ever looked at the budget in a meaningful way? Has he? Yeah. Um, or is he just like a cool, nice for you that you have the budget, but I'm going to keep living my life? He's kind of like, we should go to Portugal. That'd be great. I'm like, well, how much are you going to spend? He's like, well, it doesn't matter.

your home. You need to probably take it on responsibilities that he's had a majority voting share.

Yeah. And he takes care of this part of it. And now you're saying, hey, I want us to do

“our life together. That's a total sea change. It's a new marriage. Right. And I think,”

you know, we've got every dollar budget. So I'm kind of starting to record. So I have visibility. And I said, I'm not, doesn't mean that I'm going to take all the decisions away from you, not at all. And I don't want to do that. But I just want to have visibility so that we can say, well, we just spent 40 grand last year on travel. Is that okay? Or do we want to spend 20? Sure. And so then when he's like, do we should we do this trip? Yes. I want to feel confident

making those decisions rather than be like, can we really afford this? I mean, we can. But also, I want to afford a child. But you want to do it intentionally instead of just, he's the free spirit

and you're the nerd and you guys have never really called that out. I'm guessing you guys don't have

combined finances in every area. That is correct. And that's the other thing that I've been battling for the last couple of years is, hey, let's just pull in the money we have from our previous country into this one, you're like, how much is that going to cost it? So he has his savings. You have your savings. There's one kind of checking account that you can both pay bills out of together. Is that what happens? Yeah. So how much does he have in savings? I'm just worried that I

“looked at all of our bank accounts together. So you have access to all of his bank accounts?”

I can, yes. I can see it now. We have $580,000 in cash. Wow. No wonder, he's like, let's go to Portugal. We've got money to burn. And you're going, hey, I'd like to own a home.

That money could go there. And so you guys really have different, you're going in totally different

directions. It's a tug of war. It's a ability as one thing and the shared decision making. I do want to be confident in making the decision and not just leading it to him. And we have this conversation a little while ago. And he's like, what do you can now? I'm like, well, when we moved here and I'm not from here, we moved here. I was the unique segment. I had a lot going on. I was finishing a house. I was living in a new country. Yeah, I didn't care. It was not how I'm there right

now. But now that we kind of like, okay, we've settled in and we're, you know, living life and I think was working for a couple of years, not right now. But his line of question was just defensive. Well, why do you care now? It wasn't right. Oh, I love that you want to be involved. Let's

“create some goals and vision for our life together. And also, Katie, you have to be honest,”

if you're a fun partner to do life with when it comes to these things. Well, I want to be a fun partner. That's the thing. I, you know, he's a fun personality and I want to be able to be, yes, let's do that. Let's have fun. Let's do those crazy things. Let's go on the helicopter, right? Right. But I'm not sure how much we're spending. I'm not sure, you know, about a few of these things. And I just kind of like, until I have the full visibility, I don't feel like I can be that fun. Have you

shared that with him? Like, hey, I'm not trying to kill the fun. I just want to make sure that we're planning for the fun because I'm more type A and it gives me peace to know ahead of time. What we're going to do? Yeah, I don't think he believes me necessarily because I think he thinks I'm going to put him on a leash. Do you put him on a leash in other ways? Have you put him on a leash before? Nope. Okay. Then then that that's him. That's him just projecting out. He's making up stories.

Right. But there's something to be said for the honesty of your biggest fears that I put you on a leash. My biggest fear is that we have no leash and we run out. Well, it's not even that we run out. It's just that we don't make smart decisions. I, if I want to spend, let's say we find a house at 850,000 because that neighborhood 850 is not unreasonable. And he's like, I only want to spend 650. It's not what?

Well, that's cool. I want to be able to be like, okay, we can't afford 850 because of ADNC would not be awesome. Let's make that decision together rather than the fear of not being able to afford it because we don't really have a good plan. So he can justify it when he wants to use the numbers against you and weaponize it. Yeah, I have a good example. Oh, we're running. He's in investment. Okay. He's a friend. You know, hurt y'all?

Without telling you. You're a friend. No, no, no. Okay. He told me over the time. But it's that out with 50 grand and then more and then more. We're at 200 grand. We're zero return and 50 it's. Oh, my goodness. You guys probably need a counselor more than you need a budget, but I'd recommend both. Hey, what's up, guys? It's Jade Worsha. Listen, summer spending adds up so fast between

get tight before you know it to really get your money under control and keep it that way.

“You're going to need a plan and that's what you'll get with the every dollar budget app.”

It helps you track your spending free up cash to put toward debt and savings and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download every dollar in the App Store or Google Play and start for free today. Our scripture of the day Philippians 1-6. God who began the good work within you will continue his work

until it is finally finished. Michael Jordan once said, "Some people want it to happen, some wish it would happen, others make it happen." As that motivation for you, that's a good line. I like that. Meredith is in Raleigh, North Carolina. Next, what's going on, Meredith? Hey, yeah, so I am a recently divorced single mom of Q-Kids and I've discovered the baby set to kind of help me get back on track and I'm at the point where I'm almost ready to start investing

my 15 percent. Awesome. However, I am, I'm in real estate and I own a property management firm

“on the side and so every month my salary changes. So I'm just curious, like, what's the best way”

to go about calculating my 15 percent? Well, you know what a bad month looks like. You know what a good month looks like. Have you had any zero dollar months? What's been your lowest month in the last, so it's say 12 months? Yes, and zero, but I run myself as an asked corp so I pay myself a monthly reasonable salary. So I don't know, like, do I use the 15 percent from that salary or... Yeah, what do you report on your taxes? How much income? Like 140. Great. So I would

base it off of that or whatever you're going to, you know, have this year. So you go, all right, 140, 15 percent. That's 21 grand a year. Every month I need to be doing 1750 into some type of retirement accounts. Okay, so just pick a number and like stick to it every month. And then whatever comes in,

the other way to do it is, hey, if I got it, whatever comes in that month, I'm investing 15 percent

of that. If nothing comes in, nothing gets invested. If 20 grand comes in, 15 percent gets invested. And do you do that based on the growth or do I get, like, stuck down on my business expenses? Well, if it's business expenses, you can, because whatever you're actually taking home, is what you want to factor the 15 percent on. So whatever your gross income you're taking home, you want 15 percent of that. Okay. And then should I have, like, two separate savings,

like, two separate six months accounts, like one for business expenses in one for personal, or it's my, like, emergency fund, only, like, personal. I would keep your emergency fund and a retained earnings account with your business. So if you know there's expenses coming up, I don't know what kind of overhead you have. Some businesses don't have much. Some you know, I need to invest in this. I need to replace this. I need to cover the taxes here.

“So you can figure that out with your CPA if you have one on how much you need to set aside”

for your specific business. But I think having both and separate is wise. Business checking, business savings, personal checking, personal savings. Okay. Absolutely. And this is good for

anyone with a regular income out there. I always recommend having sort of a peaks and valley fund

outside of your emergency fund. If you know, you're going to have a great month. Well, you know, you're going to have more than you need for your expenses. So set that money aside and savings so that when you have a low month, you can then pull money out of that without dipping into the emergency fund. It's how farmers have lived for centuries. Yeah. Yeah. They know like, I'm not, I'm going to get the harvest once a year, once a year. And I need to put that money away to cover

my expenses for the rest of the year. Yeah. Live like a farmer. Live like a farmer. George means farmer and Greek. Fun fact. Fun fact. I was trying to give you one job. That didn't feel as fun as I was hoping it would. It's fun to me. I never said it was fun for you. It's fun for me. There you go. Caleb is in Phoenix up next. What's going on? Caleb. Oh, you guys don't want to thank you for just everything you do. My wife and I started following the baby steps three months ago. So

it's completely changed our perspective on money and you guys are awesome. Love to hear that. Yeah. So my question is, I'm in a least car right now. I hate myself now after listening to you guys. So I'm a four thousand miles over it. And I've got 13 months to go. I'm just trying to figure out what I should do, whether it's save a money for the car, save up to pay the fees at the end or buy a car now to put miles on it. Ouchie. Out of curiosity, what is the fees for going

over your mileage? It's 25 cents a mile. Oh, he likes. Okay. And we're just going to continue

miles a day. And that's just accumulated over the over the time. Hmm. Well, there's three ways out.

None of them are fun. All of them are painful. There's early termination, which is in the most expensive way to go. There's the least transfer where you find someone else to take it over. Good

“look with that. And there's the least buyout, which is the most popular one where you need to come”

up with the full amount. So have you figured out the early buyout? I haven't. I put a significant amount down. And I know I only check like, oh, like six thousand left on it. Yeah, but that's not what the early buyout is going to be. I would contact them and say, hey, what is the early buyout amount? To get you out of this thing. And then that becomes the number to save up for if you want to then own the car. Then you can decide I'm going to sell this car. I'm going to keep this car.

Got it. Oh, it does the fact that so my payments really low. I actually traded in a paid off

car for this. So I put 10 grand down. So my payments only 240. If I terminate this early, is that going to hurt me because, you know, I don't get that 240 payment for a little bit longer. Is that the 240 payment? But your balloon at the end of this, but with penalties alone, it's going to be thousands of dollars. Right. That's the number that really matters versus the payment. So how much do you make? About a hundred thousand a year. Okay. And how many months are left on the lease?

13. Okay. So I would at least find out from them. There's only 13 months left. You may be able to afford it. Do you have anything saved? No, I just paid off a bike. I've got like two thousand left in savings. Okay. Well, we need to figure out the buyout price. And that will give you the

homework to figure out if this is going to be worth doing. If you're going to do it, the lease buyout

is the best option financially speaking. Because then at least you own the car and then you can sell that car for what it's worth. So the hope is that you find out the buyout amount is, let's say, $20,000, $15,000. But the cars were 30. So now you buy it out and you then sell it and you have all that money to go buy yourself a different car. In cash. Got it. Okay. That's the fun way out. Do you have another debt? Uh, yeah. My wife's car. We only owe like 19,000 on. But that's it.

Okay. I got to stop you. I don't want to ever hear the word only in front of debt ever again. I'm only 240 bucks a month. Well, it's only 19,000. You're right. You're right. That's that's us justifying our decisions. I know you've done this on the back of a napkin. How much you projecting in fees and mileage fees are you going to have to pay? Oh, it's going to be bad. Well, my work commute's going to get short here in the next couple months. So I don't know what it's

going to be. I just know I can, I'm going to stop driving this car as soon as our like work location changes as well as planning on. I'm just wondering if it's cheaper to Uber to work every day. It might be. I'm not sure. I'm actually funny enough the bike I have. It's a dirt bike and the new shop location that's opening up is so close that I can actually take the desert to drive there. I was going to ride the bike to work. Wow. That's pretty desperate. I mean, based on your

payment, 240 bucks and 13 months, that's a little over three grant remaining in payments. So I don't think it's going to be that big of a number and I'm hoping the car is worth more than three grand. It definitely is. Plus the 10 you've already put in it so let's say 13 grand. There's a real chance you call them and they give you a smaller number than I have in my head. Right now in the number

“I have in my head is dramatic and caustic because that's kind of how I do life. That's what's”

happening in John's brain. Right. You might get a three or four or five thousand dollar number and that would be worth scratching a claw and just buying this car and taking that. Let me take a house stress is you can't drive your own car just to go one down the street because or just go to a buddy's house and you have to calculate. Oh, that's going to be eight dollars for me to go to my friend's house because. Oh, just too much wear and tear. It's going to ding you for that. So these are

leases are my least favorite and if you're thinking about it you're going well it seems like a good deal the payments lower. Well that's because you own nothing at the end of it. You're just pre-paying the most expensive section of depreciation and then handing back the car. And by the way, tell me if I'm wrong here George by putting 10 grand down on a lease you just wrote them a check for the depreciation. Oh, they're very happy to get some money up front. You gave them cash for the depreciation. They're

winning on every side. And it's why you're going well, if you know it's the best it's people go George so smart because they're covering everything all the maintenance is covered. They're happy to

“sell you that that dream. But the truth is they're making so much money on it's why they push people”

towards leases and they take the car back after you paid for all the depreciation after two years.

used and resell it at premium price and minus the depreciation that you gave them cash for,

they've changed oil on their car and now they've won twice. That's a genius scam. And that puts

“this hour of the rain to show in the books. Remember there's ultimately only one way to financial”

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