It’s Time to Go Scorched Earth on Your Debt

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Normal is broke and common sense is weird, so we're here to help you transform your

life from the Ramsey Network in the Fairwinds Credit Union Studio.

This is the Ramsey Show.

I'm Jade Worshaw next to me.

Rachel Cruz taking calls all hour about your life and money.

We have Jim who's in Phoenix, Arizona.

Hi, Jim.

Hey, Jade.

Hey, Rachel.

Ariel.

Doing good.

How can we help today?

Hey, I've got kind of a weird situation and I want you all to help navigating.

I received a large gift of silver from a family member and it was kind of given to me

under the pretext of, hey, I really want you to hold onto this.

I think this will increase in value.

I told them that we're working baby step two and they'll be like, oh, this is awesome.

It's actually going to cover the rest of our credit card debt, but they really want

us to hold on to it and I'm trying to figure out how to navigate the situation.

Is it like, hold it for safe keeping or it's a gift, but we don't want you to cash it

in just yet.

Which is it?

Yeah, it was more like, it's a gift.

We don't want you to cash it in.

We think it's going to exponentially go up in value and you know, it's funny.

And I listened to Dave talk about, so you know, not to collect blocks.

Well, when did they say you could cash it in?

There was really, it was a, it was a grandparent that was really a, you can hold onto this or

you can do what you want, but there was sort of a strings attached to a degree.

Yeah.

Which is funny because about two days ago, silver went in the tank.

I don't know if you actually had a friend I was baiting about with silver.

And then he texted, he was like, well, not a good day for my argument.

And I was like, no, it's not a good day.

It went down.

Well, okay, so, yeah, so I do think, you know, having a gift with strings attached

does not fare to the person receiving it because it's not really a gift at that point.

There's an expectation.

And I appreciate their sentiment and I'm just wondering, I mean, I kind of think, I'm

honestly, I think you're an adult.

And so I think you're given something and you and you're, are you married?

Did you say you're married?

I am.

Yeah.

Yeah.

That you guys make a decision on how you think it would be best used.

And you know, is it best to keep it because you never know or, you know, whatever this

grandparent's saying or for right now in your life, like this is what we're working towards

to create financial stability, which is ultimately what this grandparent's wanting for

y'all is financial stability because they think that this is going to, you know, become

something.

So yeah, at the end of the day, Jim, I mean, and now I feel like it sounds harsh, but

I'm like, I think that, you know, you're an adult.

You're given a gift and I think you guys use it as best, as you best see it.

What you could do is you could let the grandparents know and say, Hey, I know that it's your desire

for us to keep this, for us to be better used if we sold it.

So if that changes whether or not you want to give it to us or not, like we're, like

you could put that on the table and say, Hey, if you'd like to basically revoke your gift

back, knowing what we'll do with it, we'll be fine with that, but we wanted to be up

front with that with you that we're going to we would sell it and see what they say.

Yeah.

If you wanted to totally be like above board, I mean, you're fine to do what you want now,

but if you really wanted to take it to the next level, you could give them that option.

I mean, the only thing I don't know is change of the welfare of it really only affects

my baby step to buy like a month and a half to two months.

How much is it worth?

It's worth about $8,000.

We're chucking about $6,000 a month towards credit cards.

Good night.

Good for you.

Good for you all.

Yeah.

Yeah.

Well, you know, got to get out of it quick.

That was good.

That's amazing.

Yeah.

Well.

Yeah.

So the time thing again, if you, if you weigh out what it's going to do to a relationship,

if you really think it's going to harm something, you're like, it's not worth it.

So for a month and a half of our sacrifice, we'll sacrifice an extra month and a half

to keep this thing and this sounds horrible to Jim.

But when, you know, this person passes, you know, and you guys look up and 10 years,

I'm like, all right, we did this to honor you to honor Nana, but we are ready to let

this go.

You know, it's not the end of the to your point.

It's not going to change your life either way.

It's just a principle of we're going to put our efforts and our money and our time and

energy into things that we think are actually going to be worth it in the long run financially.

And this commodity is not so, you know, oh, thank you.

That's a good, it's a good question.

I mean, we know gifts should be given and for anybody who's thinking about giving a gift

out there, if you're going to give a gift, give a gift, and it's okay.

I think if it's something that's like a state planning, like a will or something like

that, to have certain stipulations on something like that, that makes sense, like up from

a moral perspective or something.

Sure.

So, it's going to harm my kids if they're misbehaving in life and then I don't want to

hand them a bunch of money because that could magnify it.

You know, the things are on that, but just this kind of nitpicky, hey, I want you to do

this, not that.

It's like giving someone a whole life insurance policy and be like, I don't want you to

cash it out.

And you're like, yeah, but this is not a smart investment.

Right.

Or even the idea of, I don't know, a family member, let's say a family member is struggling

and you want to help with their rent.

So you're not giving them cash, but you're like, I will pay your rent for you.

I just feel like there's, it is a interesting line to walk their gym and I for one think

that this is kind of more on the side of you should be able to do what you want with

this.

Absolutely.

Absolutely.

Absolutely.

All right, Jessica's in Oklahoma City, Oklahoma, hi, Jessica.

Hello.

Can you hear me?

We can.

What's up?

Okay.

Hello.

So, to sum up, we are putting our house on the market next month and we, our plan

is to eliminate a mortgage by downsizing.

If we can buy a home in the $3.58 to $400,000 range, we will eliminate a mortgage and all

of our debt and it will give us the opportunity for me to homeschool my kids.

Oh, wow.

Wow.

What, what home, the home you're in currently, what equities in it?

So, we are putting our house on the market at about 680,000 is on 15 acres, so our big

downsize would be in land, not necessarily home size, gotcha, gotcha, gotcha, what you

make on the sale, what will you pocket?

So, we will pocket about 420,000 after closing costs and taking away the mortgage, which

is that about $15,000, so if we bought a home in the $3.50 to $400,000 range, we would

have $17,000 in like education debt, flash credit card, but it's all one.

And so, we would take that and pay that completely off.

And then, so we would kind of do, and we already have about $75,000 in a brokerage account

that we use our emergency fund.

So, what's the question?

I guess, our head is in the right place of doing this because it's kind of going out

of order of the baby steps, but it would.

Because you're in what way?

Because we're paying off our home early.

Oh.

Kind of baby steps.

Well, what I would say is if you do this, obviously you're clearing your debt, I would save

some money aside for three to six months, emergency fund, but other than that, that's it.

And it really feels like it's in that brokerage account, just pulling that out and having,

since it's not a retirement, having some of that liquid, I think is where you're going

to want to do there.

Yeah.

And Jessica, I would not sell a home for $20,000 of consumer debt.

So if there's a bigger reason why, like what you said, that you eliminated a mortgage

that you can homeschool your kids and stay home, that makes sense to me.

But I would not make this move for $20,000 for a $20,000 of consumer debt.

So if there's a bigger reason why, which I think you said there is, then that's great.

Yep.

And you're not out of order necessarily.

I think you're, yeah, you guys are doing awesome.

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All right, back to the phone lines.

We go Charlie in Atlanta, Georgia.

Hey, Charlie.

What's going on?

Can you hear me?

I can.

All right.

Thanks for having me on today.

And I guess I may have kind of a complex question.

But we'll just dive in and see what details are needed.

Sounds good.

I'm calling on behalf of my wife and I and we're in baby setting number two.

We've been in it for a couple of years now.

We started 254,000 dollars with a bet.

We're down to 145.

But on our snowball, our next loan is kind of a sticky situation.

So my wife, her last year of undergrad and all four years of my brother-in-law's college

are consolidated into one parent plus loan.

Okay.

And so we are portion of that loan.

It wasn't really done right.

But it was before found Ramsey.

And this is all before we even got married.

But they consolidated it and it was like, okay.

And here's your like they took it and sent to us four years of his college and one year of hers.

They just took the payment and divided by five and that's what we pay.

So we pay two or eleven per month.

Yeah.

And so our original balance from a watch loan was 25,000.

That's interesting.

And so we have that cash saved up.

But the problem is my mother-in-law, I think, but not a lot of things.

They're trying to do the PSLF program and get it all forgiven.

And they're still like seven years left of that.

And so we don't want that.

We have to have to get out now.

The problem is that they depend on our two or less per month to make the payment.

And I guess my question today is probably more of a relational question of how,

because you know, it's my mom or my wife's mom.

So we're going to have her talk to them.

Because I don't want to be the mayor's son-in-law.

Smart.

And I guess just an insight on what are some tips or something.

Maybe my wife can talk to her mom about this, maybe.

Because the loan is in the mother's name, correct?

Your wife's name is nowhere attached to this one, right?

So there's, okay.

Yeah, we've we've we've double triple check.

Yeah.

And all you can do is they spit shake that we would pay it off.

Sure.

Sure.

And you have the money, the 25,000,

the longer this loan sticks around, obviously, the more interesting gains.

So for you, it is smart to say, hey, if we have the money now, let's knock it out.

You can give them the 25,000 that you owe.

It's up to them.

If they want to siphon that out, $211 a month or whatever that is,

or whatever they want to do.

But what you do need to do is make sure that the same way it was a spit shake before,

that you get in writing and just say, hey,

we're giving you the entire balance of what we owe as of, you know,

February 2nd to 2026.

And that way, no one can come back to it and say, hey,

and then you give it to him and say, hey, if you guys want to do this loan forgiveness,

that's fine, but any interest set of crews, that's up to you.

We're ready to be out of this today.

And I love the idea that he's, that you'll be the one,

that your wife will be the one talking to the mother-in-law.

Yeah, I mean, that's exactly what I was going to say, Charlie,

because I would sit down with them, have a check.

And the writing thing is so smart.

It's going to probably feel really weird.

And her mom's going to be like, this is so, what are you doing?

But it's like, no, I'm just going to have the date, the balance of what is.

And then tell the mom, like, and hey, mom, listen,

I just warning that sometimes these programs do not go the way you think it's going to go.

And if it's not paid off, this is what the interest will be.

But we are not going to be on the hook for it,

because if it was our loan today, we would be paying it off.

Like I would overcommunicate it, have it in writing,

give them the check into, yeah, into Jade's point.

If they really want to just keep it, then it's like, okay,

you do whatever you want with that $25,000, but we are done.

And credit to your wife, too.

We take so many of these calls where there's like some communication

when the child is 20 years old, you know,

and then you look 15 years down the road and mom doesn't want to pay anymore

or daughters, like, no, it's not really mine.

I thought, you know, it's really messy.

So the fact that you guys are definitely above board in the sense of like,

you're keeping your end of the deal, you know, flawless.

It's amazing.

And so it's just going to have to be that communication of,

here's the check.

Let's sign this together, just so it's said out loud.

And thank you, mom.

Love you.

And I'd even frame it up like the whole thing of getting it in writing

and by the way, I take screenshots of the balance and everything,

just everything.

And the way I'd frame it up is, hey, you know,

I don't know about you, but sometimes over time,

I can just forget details.

And this is just for all of us, as opposed to a,

I'm doing this to hold you accountable, right?

Just the idea, everybody forgets what the balance was two years later.

Nobody's going to remember the exact dollars and cents.

No one's going to remember exactly what was said.

So it's just an idea of, we all forget details.

It's easy for this to get muddy.

For me, for me to remember, I'd like to do this.

And that way, you're kind of putting all the onus on you

and not being, you're not inditing the new way.

You're not trying to point the finger at them.

How would that conversation go knowing your mother-in-law

and her relationship with your wife?

What we just laid out, how do you see that going?

Well, the worst part about it is that I don't know.

I was fixing to have a follow-up question.

And it's not be passive aggressive, but I was wondering,

getting it in writing would be, I'll think it would be OK

to get a cashier's check and get it put in the memo, maybe.

Yes.

And the reason why I said that is the case.

Yeah, absolutely.

I'm not worried about, because when we first approached this,

I was like, well, heck, we'll just go get an odor out.

But it makes it look like, I don't want to make it look like,

man, yeah, I was for doing it.

No, it's not.

It's just how these things are done.

OK, yeah.

And honestly, you asked how they would be received.

I'll be honest, I'm worried that it might not be bad,

but it'll catch them off guard just because there's

a total different mindset there.

I mean, dead is just a normal way of life for them

and all that.

I mean, I'm a lot worse first.

We're first generation ranzi people.

Yeah.

My side of the family, my wife's side of the family,

both the same.

And so we're trying to get out of this where we can, you know,

picture a family tree as well.

Totally.

Yes.

Absolutely.

So I'm afraid, I'm not going to say it won't be received well,

but you're going to look weird.

Yeah.

It's going to be weird.

Also, because, like I said, they finally believe that it's

going to get forgiven.

Like, there was a comment even made back in the summer.

They looked at the loans and whatnot.

And so we lived, we lived six hours apart.

So we got like vacation together and we made them and they,

the comment was even said, like, oh, how much stuff in that loan?

Because we talked about paying off our debts and stuff.

And her mom pulled it up and was like, oh, it looks like seven years.

And the brother was like, well, it looks like you're in debt for

seven more years.

At least in order.

No, not really.

Yeah.

Yep.

But so I'm not going to say it'd be bad, but just a, it's probably

going to be, but it's going to have to be like a teaching moment.

And that's going to be hard because that's her mom.

Well, well, I mean, I don't know if you do have to teach it.

I think it's just, I would keep it.

And I know you're not the one talking about you.

But yeah, I wouldn't even get into all that.

I would say, hey, you know, I was thinking back to when you pulled up

that loan and me and my husband, this is her talking.

Me and my husband talked about it.

You know, I think we just, we're ready to be done with it.

And we looked at the balance and based on what it is today,

I think we're just ready to pay our portion off.

And we'll give you a cashier's check so you can put it on there.

But, you know, and you're not even talking about them.

You're not even talking about you.

You're just letting them know you want to get out.

And there's no detriment to them.

And I think at that point, as long as you know,

as long as they understand, it's at no detriment to them to pay this off.

I mean, Rachel, I wouldn't even get into the why.

The why and what you should be doing.

Unless they ask, you know, then you can elaborate.

Yeah.

Less is more.

Yeah.

Yeah, for sure.

Okay.

Yep.

So, yeah, I hope it goes well though.

But yeah, keep it short and sweet.

Clear.

I always say kindness, you know, to be unclear.

To be unkind.

Yes.

So be clear.

Which helps with the writing.

And I like it.

And I like the whole, I like your advice, Jade, on.

Hey, this is for us.

And for our records and like what we're doing.

And just so I can remember, because I sometimes can forget.

You know what I mean?

Put that off a little bit on you.

And I think that's fine.

And it's true.

And it's also true.

I mean to remember what the dollars and cents are.

Because what I see happening in that situation is.

If for some reason on down the line.

It doesn't get paid off.

It starts to feel overwhelming.

It could be easy to think, well, maybe they didn't pay their whole portion.

Yes.

Or rather, remember it being, you know.

And if you're tied in with a loan with someone else.

The brother's loan isn't there.

And if he doesn't pay for a year, because he doesn't have a job or something happens.

You know what I mean?

Like it just, it starts to build.

It starts to build a lot.

So.

Yes.

Charlie, great question.

And hey, great for you and your wife.

And again, I kind of pointed out to the weird word, word.

But it is how they're doing life and money.

That's normal.

That's what most people do.

So when you come against that.

And you're kind of at this intersection of like, oh my gosh, we're budding up against normal.

It's going to feel weird.

And it might be a little awkward, but you're going to get through it.

And then you're going to be fine.

And I think you won't even think about it six months later.

And it's going to be great.

So I think it's a smart move.

And yeah, excited for you and your wife.

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All right, Elizabeth in San Francisco, California is on the line. Hi, Elizabeth.

Hi. Thank you guys so much for having you bet. How can we help?

So my question is how do I know if I'm heading past gazelle intensity and to kind of the burnout space as it relates to paying off my debt?

Tell us more. What are you doing that thing makes you think you might be going too far?

Yeah, I, I, I spoke while I did I never really learned how to budget. I'm a medical doctor, so I make good money.

But I just got out of residency and I have like about $600,000 worth of student loan debt and plus consumer debt.

And knowing that I don't want to be in the space of paying debt forever, like I fully bought into the baby steps.

I believe in the biblical principle. It's just I'm finding that when I get to the end of my paycheck and I'm having to wait three weeks because it's kind of a, I get paid on the 10th and the 21st.

So between the 21st and the 10th, I'm like scrounging around for my last dollars to make it for my next paycheck.

I know that feeling. Yeah. And so I'm trying to figure out if I'm like paying too much aggressively because I have this goal in my mind.

Yeah, paying off over $100,000 of consumer debt by December. If I'm, if I need to pull back a little and stop being so so extreme.

Well, I, I'll, I'll give you some parameters, something that you said definitely hit home for me.

And when my husband and I were paying off debt, the feeling of having just a little bit of money in your account, I think that can be good. But are you budgeting a cushion?

Just in case like if you're finding that you're going to the wire and it's causing you to overdraw or it's causing you to not pay minimums on other things.

That's a red flag that you're just doing. You're just taking every cent and you're not planning for just like a basic cushion.

But if you're, if you're telling me like, no, Jade, I'm not, it's not causing me to overdraw. It's not causing stress and strain. I just don't have.

I'm just using all of it. I think that's pretty good.

Yeah, I, I was, I was overdrafting a lot of until October and then I, I kind of like, I hit rock bottom.

My friends and FPU coach, she was like, we are going to do this. So now I, this is my first month doing my every dollar in myself.

Good. Okay. Yeah. Yeah.

And you're putting the cushion. What's your cushion amount?

I would say I don't have a cushion right now.

Okay, you need a cushion. I, this is coming, this is coming from your friend who has done that and the overdrawing because it's inevitable, right?

You, you budget zero based budgeting doesn't mean zero dollars in your account. So if you're budgeting every single dollar towards debt and you're not putting a cushion, it is inevitable.

Elizabeth, that something will come up grandma's birthday or just something that you forgot that will come out of your account and overdraft you.

And then you're like, oh, that happening every month.

Yeah. That's having every month.

How much, how much money are you putting towards debt?

So right now, just like in my minimums, it's about two grand and then what I'm paying on top of that is like another two grand to somewhere around four to five thousand a month.

Okay. Cause how much are you bringing in a month?

13 to 14.

Okay.

But I made grief based decisions like because of working in an ICU during COVID and getting PTSD.

This has to mean something. And so I'm like standing in a six thousand dollar a month rent right now.

And just paid off a five thousand dollar couch. Yeah.

And when I finally hit rock bottom, I was like, okay, I've made a lot of good decisions. I'm paying the super tax to get out of this like lease right now.

And yeah, my lease is up in January next year.

Okay. So another year of you kind of have out earned this.

I don't want to say stupidity, but you know what I mean?

The bad purchase. And like I said, luckily you have enough.

You're earning a high enough income that you're probably not feeling it the way some others might feel it.

But yeah, that's going to make a huge difference when you get back down to 25% for sure.

Right.

Yeah, have you calculated out because you have $600,000 in debt, you said.

When you get that when you get that six thousand a month back in the budget, how quickly are you able to pay this all off?

And I'm assuming your income will go up over the next couple of years.

Yeah, yeah. So right now, my income goes up about, I'm at 320 right now and about 10K a year is my salary increase.

And then I get about a 10K budget once I just started my job. I'm only four months in.

Okay, actually.

Okay.

I paid down almost 20K of my debt so far.

Okay. Okay, just a question.

And I'm sure you've run this out, but if you haven't, if you broke the least, what would the least, what would it cost you?

Oh, it's like 15.

15?

Well, that's two months of rent.

Yeah.

Worses continue to pay.

Yeah, 60,000.

Yeah.

I'd probably do that.

So should I save the money then to pay off?

Okay, so instead of worrying about paying off my other debt, just like, okay.

Yeah.

I would do that because think about it.

If you can find a place that's, I don't know, 2000.

I already have, I already have, I already found like five places.

Seriously.

I probably would do that Elizabeth.

Yeah, versus being stuck in this because that's what?

66, almost 70,000 dollars.

Yeah, that's a lot.

That could be going towards this.

Over time, you know.

Right.

Yeah.

I mean, if you saved 4,500 a month on rent, that's a killing.

Yeah.

Okay.

Okay, great.

I love that.

And I feel like you're motivated.

You are.

She's like, I already found three places.

I found three places to live.

Yeah, I found three places to live.

High school?

Okay.

Yeah, I'm sick of this.

Six years of non-gradification.

I can do this.

Yeah, that's Elizabeth.

Oh my gosh.

Okay.

You make a great income.

You have a crap tenant debt, which I know you feel.

But you could, yeah, you, you can do this.

I love this for you.

Okay, so we've got a clear plan forward.

There's way more margin coming up.

I love that.

Yes.

Oh, yeah.

I would do that.

So, so, so good.

And six grand a month.

It's a lot.

It's a lot.

So just for anybody who's listening for the first time,

whenever we have people ask about their home situation,

you don't want it to be any more than 25% of your take home pay.

And that's not just with mortgages.

That's rent as well.

Yeah.

And the purpose of that is to make sure that you've got your income

at your disposal to do the things that we teach.

What, regardless of your baby step,

whether it's, you know, to be able to do all of it,

to be able to say 15% in baby step four, five, and six,

you can't exceed that, or else you'll wonder,

how, how is everybody saving 15%?

It's because our mortgage is,

yes.

And our rent is 25% or less.

Yes, yes.

Which allows, again, so much of your income

to be able to do so many things,

whether it is paying off debt like where she is in baby step two,

or beyond that, which you're saying,

with investing in even kids college,

putting extra towards the house all of it.

Yes, yes.

But yeah.

But what I appreciate about her, though, is she,

she's not like a typical,

we see some people get out,

and they out of law school,

out of, you know, doing all the residency

with in the medical field,

and they make $320,000 their first job,

and that's a great income.

It is.

And they feel it.

And you want to feel it.

You want to go enjoy it,

you know, upgrade the car,

get a nicer spot,

like you just want to,

all these things,

you want to be in it.

And so her, though,

I could hear it in her voice.

Yeah.

Where she was like, no, I am cutting,

I'm getting out of this.

Yes.

Because it's crazy to think

if she does this in three, four years,

which is totally doable.

Absolutely.

At that point,

she'll be making $400,000, you know?

With nothing.

With nothing.

With no debt.

Yes.

Yeah, it's amazing.

That's so true.

You know,

and she did this with COVID,

she kind of went back

to, which was a real thing.

But it's true,

when you make an income like that,

or really anything.

If you've worked hard to get what you have,

you almost feel like it's a reward

to be able to enjoy it.

Yes.

And it is.

But if you've made mistakes,

you've got to go back and pick them up

and clean up the mistakes.

And that's just part of it.

And so I'm really proud of you, Elizabeth,

for doing that.

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All right, thanks for hanging with us.

We're going right back to the phone lines

where we have Amanda,

who's in Santa Fe, New Mexico.

Hey Amanda.

Hi, thanks so much for taking my call.

I hope you guys are good.

Absolutely. How can we help today?

Hi, so I need more of a, I guess, relationship advice.

I want to see how I can maybe get my husband

to be as intense as I want to be on step number two

or maybe how I can be less intense and can balance out.

She said a little bit obsessing over money right now.

Okay, so he's viewing,

he's viewing you as obsessive,

you're viewing him as a little bit passive.

Tell me, tell me some of the things

that you want to do that he doesn't agree with.

So we have some crypto

that I would love to take out so we can get these steps too fast.

And I know he was not told on board.

So I made like different plans as to how it would look like

or how long it would take to pay off our debt.

If we took out the crypto,

if we, you know, filled my car

and I would get a cheaper color,

or if we didn't do either,

so we could compare the links

at which it would take to get to step two.

And then he's supportive of going to step two,

but he was just like,

you're obsessing too much over this.

Like he's not feeling the pain as much as you are.

Yeah, he's like,

we're going to get through it.

Like you just need to calm down.

Like you're spending a little bit too much time on it.

Like you should focus on our family

and our marriage and sort of like looking at this.

Wow.

Does, does, okay,

let me go on that side.

Does your marriage need attention?

Is there other things that need more attention right now?

I, I would say maybe,

you know, we just had a baby,

you know, a toy old

and a six-month-old right now.

So I would say maybe we could

we try to do date nights and stuff,

you know, at home,

and we go out for dinner.

Okay.

Maybe like once a month or something.

Okay, so I guess I can see why we could spend more time.

Maybe I would start by

I'm going a different direction.

I don't usually go this.

So maybe you could start by getting a picture from him

of what that looks like in his mind.

Okay.

What does it mean for you?

If I thought about what you said,

what does it mean for you in your mind?

What does it look like for me to spend more energy on our marriage?

What does it look like for you?

For me spending more time on our family.

Because I like to meet you where you're at.

And then I'm hoping that we can meet each other where we're at.

And so if you start by

wondering what that is for him.

Yeah.

Because I'm not saying this is you Amanda by any means,

but we do have some people that are so hardcore

that every conversation is around getting out of debt.

Every purchase is looked at to like the instigree

when the spouse walks in the door and it's like,

look, I saw this.

You know, it's just like it becomes so obsessive to the point

that there's nothing else in life but this.

And listen, we're all about intensity, right?

Like we want you.

But also you're a whole person.

And so you are in a marriage.

You are a mom.

You have these other roles that you can't neglect.

So on the extreme side of Amanda,

where would you be with how I just described?

Are you that person or are you like,

no, I'm not that person.

He just is way too passive.

And I'm not that crazy.

What would you say?

Where you are?

Well, you know, I would admit,

I'm not like crazy effectiveness,

but I do want to get through the debt pay offering.

Yeah.

We could be a little bit more.

I guess because I am the one that handles the finances.

I would like for him to be on board.

Okay.

And probably the one that's like,

oh, we can't, you know, we shouldn't be spending on that.

Yes.

You don't want to be the mom of him, right?

Yes.

And giving permission of what he can and can't do

and what we can and can't just film.

We as two adults seem to decide that.

So there's, there's a core issue there.

It's a big issue.

But he's not in there with you.

I like that.

I think if I were in your shoes, my next step would be

set up a date, like a date night.

And the first date would be for you to learn more about what we talked about before.

What does it look like in your mind for me to do these things?

And then I'd set up another date.

And I would say, here's what I know you didn't ask.

But here's a few things that I would like to see going forward.

And I think if we, if I do some of the things on your list

and you do some of the things on my list,

that's us meeting in the middle.

Yeah.

And to do all of that around a date night,

I think is a great way to be intentional.

I'll just be honest, I for one, like the fact that you're running different scenarios

of if we did this, here's how quickly.

And if we did this, in that way, there's options.

And I think maybe presenting it to him that way and saying,

hey, what I don't want to do is make the decisions for our family.

What I don't want to do is be the one saying,

you can or can't do this.

So what I thought would work would maybe,

would be me bringing options so that you can decide

and that we can decide together and both feel good about it

as opposed to me saying, no, we're selling the crypto

and no, you're selling your car that sort of thing.

So just, it just really feels like hearing the heart around

the situation for both of you would be helpful.

Yeah, and I do wonder, Amanda, if there's like,

if you guys are just missing a point of connection

and it sounds like so simple,

but honestly, I could see being in your shoes

and feeling like I feel so isolated over here.

I feel so much responsibility.

I have a new baby.

I have a toddler.

This is up to me to make all these decisions

about the household finances.

I don't, I feel like I'm on my own.

I don't feel connected to my husband.

Like if I had a husband who was paired with me,

excited with me, asked questions, was involved,

had thoughts, maybe different opinions than me,

because that's gonna happen.

But at least there's like, there's a connection point

and I feel a level of connection.

Where his level of connection, Amanda,

maybe something totally different, right?

And so figure out what that is for him,

like what Jade's saying.

So I think there's like kind of this missing element of,

you know, you could be functioning more like roommates

and you're the CFO and, you know,

doing this role all in your own,

versus it being a marriage.

And we're in this together.

And what we both need may look different,

but let's say that out loud,

so that we at least hear each other.

And that's the part of marriage is that you, you know,

you're not gonna be the hero to your spouse's story

by any stretch of the imagination,

but you can at least choose to step into those things.

Absolutely.

And I do wonder if that would help you,

because he does need to be part of these decisions with money.

It doesn't, it does not need to be on your shoulders, Amanda, at all.

And, and you're probably, yeah, and I'm sorry, I'm gonna keep talking.

Because I bet you feel the stress, though,

because you're seeing the numbers day in and day out.

And he's not right.

And he doesn't feel it as much as you.

Yeah, and I'm like, oh, we have this much less

for our brochure budgeter, and he'll be like,

okay, don't you support her of that,

but I'm the one that has to like remind like,

hey, we have this much in our account.

We don't want to use our savings.

Yeah, you're gonna get,

you just want help, and you want 50-50 on this.

And I don't think that's too much to ask.

I truly don't.

I don't think you're wrong.

I don't think you're wrong at all.

I don't think he's wrong for saying what his needs are.

I think you guys just need to really talk about it

and don't leave anything out.

Just be honest and see where that leads.

Do you think you could be honest with him?

And if so, what do you think his response would be?

Do you think there'd be any change?

Yeah, I think, I think I could be honest with him.

The reason is that we used to do finances together.

But I told him I didn't think I could trust him with the finances.

Because I feel like it would be unnecessary expenses.

So then that's why I felt like I had to take over the finances.

Because he spends too much?

On unnecessary things, that what you said?

Yeah, maybe.

So you wouldn't trust his methods?

Maybe not, yeah.

Okay.

Yeah, it's a philosophy.

I have it in my mind that I wanted a specific way with the finances.

But I feel like it's just digging for the budget

and not purchasing what's not necessary.

It sounds like you both have two different philosophies.

It sounds like for you getting out of debt's really, really important

or finding this financial security, whatever that means for you.

It's really, really important.

And you're willing to really sacrifice to get it.

And it sounds like for him, debt is not as big of an issue.

Therefore, why be intense about solving it?

You are definitely correct, yes.

Okay, so that's a whole different conversation, I think.

Because if he doesn't mind debt, then you pushing to go harder.

He's like, why? Why? Why?

Right? It's just like a moot point for him.

So the conversation needs to be, here's the way I'm feeling.

Here's what this debt is making me feel.

Here's my philosophy on debt.

Where can we meet in the middle?

Where can we, where can we align on this?

Because the baby steps, they're not there to be the stumbling block for a marriage.

They're there to be unified, to be unified.

And if it's causing so much friction, then you have to take steps back

and go back to almost the precipice of where you guys went awry

and spend a lot more time having those conversations getting aligned

before you start any actions on the baby steps.

Perhaps just predictable savings that help you stay in control.

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Welcome back to the Ramsey show in the Fairwinds Credit Union studio.

I'm Jade. This is Rachel or headed back to the phone lines

where we have Matt who's in Orlando, Florida.

Hi, Matt. How are you?

I'm good and you guys.

It's very, very nice to talk to you guys finally.

Great. How can we help today?

So basically I have wrecked up around 26,000 in consumer loans

and unfortunately I have a bit of immigration situation with the lawyer and everything.

So I had to put a lot of money to a lot of like loans towards the credit card.

And I just want to know what should it be the best if I go for a debt relief program

or I take the highest rates?

How like what do you recommend that I should do on the situation?

Well, I wouldn't go to debt relief simply because they're going to take all of your payments

and pool it. And then in the time that you're not paying it,

they're going to use that as leverage to strike a deal for you.

And you really don't need them to do that. That's going to tank your credit.

If you wanted to do that on your own, you could really do that on your own.

So I would not get involved with the debt relief program.

The 26,000 that you mentioned is that everything that's including the immigration lawyer fees

and everything or is there more to speak of?

No, is everything.

Okay. And how much are you earning right now?

Around 25, 60,000.

Okay, good. Is it just you or do you have a family or you married?

I'm married.

Okay. Go ahead, Rachel.

Well, I was going to ask how many credit cards does this consist of? The 26,000?

It's six credit cards.

Six credit cards. Do you know the balance on each of them?

The American Express around 10,000.

The other credit cards around you, 3000.

Okay. Perfect.

Okay. So what we would tell you is to list out the debt smallest to largest and actually regardless of the interest rate

and pay minimum payments on everything, stay current, but attack that smallest one first.

And so what I would do, Matt, is if you guys can up your income, I mean, even if you can get

gosh, if you could find 500 bucks of margin, a thousand dollars of margin a month and then maybe work extra

and you get another thousand.

Some of these two, three thousand, you could be paying off every month, do you know what I mean?

As you go down the line.

And that's what's powerful about it is you start actually knocking some of this stuff out.

And then those payments that you were paying on those roll over to the next step, right?

So the 300, 400 bucks a month you're paying for minimums.

Now that's paid off. That's an extra, you know, could be 2400, go into the next one, right?

So you kind of keep that snowball effect going.

But that's going to be the fastest way, the most efficient way for you to tackle these.

So no, I would not pay a debt consolidation company.

I wouldn't go to a debt relief company.

I wouldn't try to combine the debts into one thing and take out a heel lock or whatever, right?

The people maneuver their debt around so much.

The best thing for you guys is take these six credit cards and you and your wife sit down and say,

how fast can we pay these off ASAP?

And it's 30, I mean, 26 grand.

So you can do this.

I really do. I mean, if you can get two grand a month, you know what I mean?

You got to pay it off in a year.

Yeah, I just have a feeling that every, every month that I pay, I usually pay a little bit more than the minimum.

So every time I pay $200 and it comes back interest, $200.

So I'm like, I'm just paying the interest basically.

Yeah, right.

And I know like I'm going, I'm moving it that forward, but like not a, not exactly.

And it's going to feel like that on all of the debts that you're paying the minimum on.

The one that's going to feel that you're making progress on is the smallest debt.

So just know that until it's, everybody's going to have to be on hold at the minimum until it's their turn to be the smallest debt.

Because in that smallest debt, you're paying it off lickety split.

So just for real numbers, after you pay the minimums on everything and, you know, your household is taking care of,

how much extra money do you have every single month to put towards these debts, to put towards the smallest debt?

I would say $500, $600.

Okay.

I could put more, but then that's, I leave like money out of my pocket in case of an emergency or something.

Okay. So what we need to make sure is that you have $1,000 saved as an emergency fund so that you don't have to be worried about that month and in month out.

If you have $1,000 saved, that's what we would call baby step one.

And that way that's there, you don't have to think about, you know, what if I have a flat tire, you know, there's money there.

And then secondary on your every dollar budget, which by the way, if you don't have an every dollar budget,

Christian will pick up after this call and make sure we set you up with it.

I want to make sure you have a cushion item, a cushion line item, meaning that you're budgeting a certain amount of money every single month.

Just as something could happen, I don't know what, but maybe it's $50.

Maybe it's $100 that you just keep in your account just in case, you know, maybe a subscription slides through that you forgot about.

So that you just feel good about the money that you budgeted for debt actually going towards the debt.

Yeah.

Matt, do you have $1,000 saved right now?

No, not really.

Okay, so yeah, so that would be the first goal is to work towards that.

So it may take you two months to do that.

But in all of this, we want it to be really aggressive.

So almost say, could I do this in a month and a half?

Could I do this in one month?

Like, what do I have to do to get the $1,000 as quickly as possible?

And again, it's probably going to mean working overtime, getting a side hustle.

But this is all Matt for nine months.

You don't even mean like, you're not going to be doing this forever and ever.

Right. Right.

And you're right.

Are these interest rates in the 20% or higher even some of them?

Yeah.

Yeah, so they're terrible.

It's horrible.

So the faster you get out, the better off you're going to be.

Where some people can hold onto a student loan because it's not high interest.

Sure.

And they don't really feel it.

You feel credit cards, credit cards that you feel.

So getting out as fast as possible Matt is going to be your goal.

But I see a way out for you guys.

I mean, I really do.

And even if your wife can take a part-time job and hurt, you know,

even bring in an extra 500 a month or something.

Absolutely.

That stuff helps.

That stuff changes.

So let's take a moment.

I feel like this is the second or third call.

And I want to just kind of go back to basics on debt payoff.

So first things first, you got to have baby step one.

Like you got to have the thousand dollars.

I have tried it without it back in the day and it didn't work.

Because to his point, Mark, to Matt's point, you're worried about,

well, if I put all my money on the debt, what if something happens?

That's what baby step one is there for.

So guys, you have to have baby step one in place.

Next thing is the cushion.

You got to have, you know, a cushion is not an emergency fund.

It is not a slush fund.

It is strictly there in case something that you forgot about comes out.

And a way to think about it is what's the worst that could come out?

I don't know.

If you still have Amazon Prime, what is that like 120 bucks?

Right.

And that hits or a drop box subscription or something hits once a year.

So think about like, yeah, maybe it's 150 bucks.

If you're getting out of debt, and especially if you have, you know,

when I say lower income, if you're kind of in the average income,

you're making 60, 70.

Yeah, 150 bucks extra.

That's a great place to start for a cushion.

Now, if you're making a little bit more, you might need a little bit larger of a cushion

because there might be larger things that come out.

So you need the cushion.

And the next thing is just understanding that when we talk about the debt snowball method,

that I've been noticing this Rachel, when we say smallest to largest,

it's by balance.

It is not by payment due.

Okay.

I've been noticing people are doing it by payment.

And I'm like, no, no, no, no, balance.

So the full amount that you owe, that's how you're listing them,

you've got to pay the minimums.

Because I've also, and I've done this, you think,

oh, I don't have to pay the minimums.

I just want all the money going at the smallest debt.

No, no, no, please pay the minimums.

It is, it is thankless.

I would just go ahead and say, you, it doesn't feel good,

but please do that because it's going to keep those debt collectors off.

And it is going to help keep the interest at bay, okay?

So please do it.

And it's going to give you more motivation to go quickly through the debt snowball.

All the smallest money goes to the debt.

So that's just a little refresher for you, for you to get yourself right

if you haven't been doing it right up until this point.

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used cars, what's one thing you want folks to know?

Well, really a couple things.

Number one is always by used, unless you've got a million dollars.

We don't buy new cars.

And if you're going to buy used number two, you want it to last.

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Yeah, that's a big deal.

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All right, back to the phone lines we go where we had Anna,

who's in Greenville, South Carolina.

Hi, Anna.

How are you?

Hi.

So, I'm calling today because I just need some advice on what to do with some

the money that I just got from the cell of my home.

So, I'm a single mom of three.

I got divorced a couple of years ago, but the house just,

it was a nightmare, but it just sold in September.

And so, after I got the money off of it, I ended up making a little over

100,000 off of it.

Oh, great.

I took the first thing I did is I went and paid off all my credit card debt

because I had a lot of debt from the divorce process.

Okay.

So, I have no credit card debt at all.

Go ahead.

No.

The only two things I still have on my credit one is our student loans.

I'm about 45,000 in student loan debt.

But I am a teacher in the title in school, so I am on the public service

loan forgiveness program, which I know y'all speak about still trying to pay that off,

because, you know, those can be complicated.

But I have talked with someone and I'm on the right path.

I've been paying on it for five years.

And then the other thing, I owe about $8,000 on my vehicle.

But I have tax money coming in that should be more than enough to pay that off.

So, right now, I'm renting because that was the only option I had until the house sold that I could afford.

And, you know, it is easier.

However, I would really like to be able to buy a home to where I feel like I'm investing in my future for me and the kids.

Instead of renting, I kind of feel like I've throw a little bit of money away.

I know that that's not fully the case.

I'm not going to worry about fixing things.

But I'm pretty handy.

I can fix my things myself.

So, I guess my question is,

I don't think I'm quite ready because I'm not sure where I want to buy a home at the moment.

But based on interest rates in today's economy for me to have a home big enough for me and the kids,

I would have to put a hundred thousand down on top and just to get the payments to where I can afford them.

Right.

So, and out of the hundred thousand that you got,

you said, you paid off all your credit card debt.

How much of that is left?

I was like, I ended up with like a hundred and twelve thousand.

So, I took that 12.

I still have a hundred thousand.

Oh, wow.

Okay.

Perfect.

Okay.

All right.

That's great.

So, you know, what we would suggest,

yeah, I think you probably know our answer to a degree of what we would do at this hundred grand.

If it were me,

I would pay off the student loans in the car today.

And then I would look to say,

okay, you know, you'll have around forty-ish, forty-eight thousand left.

And I would take that,

I would put it in a high-yield savings account,

and I would just be making it a goal to be building that up.

Because part of that,

forty-five thousand that's going to be left.

Is that right?

No, no, no.

I'm sorry, the forty-five thousand was your student loans.

Yeah, yeah. Well, it's going to be around forty-five or so that you'll have left.

Once you pay the car off.

Yeah.

You know, part of that's going to be earmarked for an emergency fund.

And then start saving on top of that, though.

And it may take you another probably two years, Anna, of renting,

to be throwing some money at this,

to be able to get to a spot where you're going to be able to buy the home that you want.

And to have, you know, we always say to have at least a five percent down payment.

What percentage?

When you say, I would need at least a hundred thousand dollars.

Is that to get your payment to twenty-five percent of your take home pay?

Yeah.

Okay.

Yep.

Because a four-bedroom home in my area, you're not going to find one under three hundred thousand.

And for me to be able to afford the payments for a month, I need it to be at at least two hundred thousand.

Yep.

So a couple of things in this.

Number one, you know, you know, it may not be a four-bedroom home.

You know, two of the kids may share a room.

I share the room, growing up in a bathroom.

You know, you may decide, hey, I'm going to value home ownership more than just the comfort of what, you know, my kids space-wise, right?

Some people make that decision.

Some people don't.

Some people say, no, we're going to save an extra year to make sure we get really what we want.

You know, but there can be decisions you make along the way.

I just don't want you to ever feel locked in that I have to get this type of house in this specific area.

This has to be it, right?

I would broaden the horizons just to see if you're wanting to get into the house faster.

Or maybe you have the patience to save another year or two.

Yeah, I 100% reach a degree with your plan.

And I wouldn't change it at all.

And I would make it my goal.

If possible, you know, the best way to do this is on a 15 year.

So I'd make that my goal, too, if it's not already your goal.

But the biggest thing that's going to give you peace is having this debt gone.

And having that three to six months of expenses really between you and life,

especially with three kids is such a, it's just a breath of fresh air to have that.

So I like the goal.

I like that you have 100,000 cash, but that's exactly what I do with it.

Okay.

Yeah, that's probably not.

I have the money in an MMA account that's gaining like 3.5% interest.

How much is so much about the high yield savings?

Is that what the 100,000 is in?

Yes.

Okay.

Okay.

Yeah.

So it's the same thing.

Is it a money market account right now?

Yes.

Okay.

Yeah.

That's fine.

Yeah.

Money market and high yield.

Pretty much the same idea.

Yeah.

But that's where I would keep out.

I wouldn't invest it.

Because I think you're going to use this money probably in the next three to four years.

And if it's anything longer than five, you could think about, you know, a brokerage account

or an index fund or something.

That would probably make some more.

But if you're going to be using it in the next three years,

I would just keep it in that high yield and just keep saving on top of that.

I would too.

Especially knowing that really a portion of that is technically your three to six months

after you've paid off this debt.

Having it liquid is a good place to have that as well.

Yeah.

Oh, thanks for the question.

Good question.

All right.

Let's go to Braden and Philadelphia.

Braden, how can we help today?

Braden, are you there?

Hello.

Hey, what's up?

I am sorry.

No worries.

Hey, how are you?

How can we help?

Well, I'm calling today because I've been doing the baby steps.

But I've been doing, I guess, rams the years for either word.

It's kind of not working out so much.

I'm kind of like still paycheck to paycheck.

And I've been budgeting.

So I just had a couple of questions about some debt than my life and iron.

And again, my.

I guess my income off because there's a couple of options.

I have a two year degree from Penn College.

And pretty much.

I could go back for four years.

I did do an additional two years and I have a bachelor degree in engineering.

I'm not sure how much that would help.

But I don't want to take out zero loans on that either.

So you're facing an income problem.

And you're thinking changing careers as the situation is the move.

Yeah, I mean, it would be more so the same field, but a different job.

It'd be more engineering than like technician work.

Okay.

What would you know what it would cost you to go back to school?

And how much more would you earn by doing that?

It's hard to say.

I think some masters around 12 to 15.

Kind of be another four semesters.

Okay.

I'm not sure how much more I'd earn really depends on the kind of living in an area.

I'm a little bit outside of Philadelphia.

I don't know what kind of work would be around here.

So I think that's where you've got to start.

Anybody who's looking to switch career fields.

And especially if you're looking to pay for school in order to do it,

you've got to do that initial research to find out.

Number one, if I go back to school, what's the earning potential there?

Do I have a potential to earn just $10,000 or $12,000 more?

Or can I double my income?

And then from there, it's like, okay, if I feel like the jump in income

could be worth going back to school.

Now I have to go back and say, okay, how much does it cost?

And where can I go that's the least expensive route?

How long would it take me to save?

And then you're able to weigh out those really important factors.

So I think you have a little bit of research to do there.

I'm guessing that you're feeling this because you guys are in debt.

Am I right?

Yeah, yeah, we got a kid.

Now we got another one on the way.

It was both super happy about what it's kind of.

Yeah, how much debt do you guys have?

Yeah, how much debt do you guys have?

All I think, quick math around 37, I think.

Okay, is that cars credit cards?

There, we have a car on there.

If you credit cards, a personal loan.

Okay.

And that's actually bad, not including our house.

Okay.

Yeah, we're about to go to a break, but I would say to you,

I would encourage you and your wife sit down tonight and just say,

I was a sports nurse and did this Ramsey thing the real way.

What would this look like to get us out of this mask?

Because it's just kind of floating around.

And then I would make sure to before you're even talking about school,

you need a hard fact that you need a degree in order to get these other, you know, jobs,

which you may, but I would want to know black and white, like, yes,

you absolutely have to have this four-year degree in order to have this job.

And this job, you're going to make $40,000 more.

That's when you know it's a green light.

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to book your cabin today. All right, that's exciting. I can't wait for that. We've got fun.

Yeah, I know. We've got Taylor who's in Fort Worth, Texas. Hi, Taylor.

Hi, I'm so excited to talk to y'all. Thank y'all for answering my question.

For sure. How can we help? Okay, so I need y'all to help me solve a disagreement between me and my

husband about how much to spend to upgrade my car. Yes, we love a marriage disagreement.

Give it to us. Y'all are perfect to help me with that. We can do this.

Okay, so a little bit of that ground. We are on, I think, babysept four. We don't have any diet.

We're 28 years old. No kids. We don't have any diet other than our mortgage. We have a small mortgage.

And we recently inherited $100,000 from my grandpa. Okay. And so of that, we're trying to figure out how much

we want to spend to upgrade my car. And it's definitely a, it's not a need. So I'll

preface with that. But my husband wants to spend if anything around 25,000. And I would like to

spend up to 50. Nice. That's a big difference. What kind of car are you looking at, Taylor?

Well, that's the hard part. We really can't look at cars because we're at such a difference

on price. That it makes it hard. What we've kind of decided on is potentially maybe a

Volkswagen Atlas. But of course, the year really depends on how much we're going to spend.

Yes, for sure. For sure. And of course, I think he's being frugal and he thinks I'm, you know,

kind of spending too much. And so we're just kind of at a disagreement and at odds.

Totally. Okay. If this, if the upgrade of the car, is it, let me ask this, the current car

you have, are you like, yeah, I'm going to have to upgrade at some point, probably in the next

year or two, or is it like you both have fine cars, but you're like, Hey, we got a hundred grand,

and I enjoy a nice car. Which one is it? Well, she does a very nice truck. So I'll say that.

We don't own it. It is a business truck. So, you know, it's not something that we own.

I drive a Mazda CX 3 2017. It has about a hundred thousand miles on it. So it could definitely go

to the next probably three more years. What would go? So, okay, so whether you spend 25 or 50,

what's the plan with the other money? Like, does it keep you from doing something else?

Not necessarily. My, we don't have kids and we probably plan to in the next couple years. And so

I think my husband is just like, we could spend that on the house to pay it off or on other

investments in the next two years. We're going to have probably a lot more expenses than we do

currently. And he just feels like seeing it grow. And I mean, he just sees that big number and

is like, wow, we should do so much without which I totally understand. What's left on the mortgage,

by the way? Around 200 K. Okay. And how much do you guys make a year? 200 K. Oh, wow. Okay, so

you make 200? Yeah. Yeah. Yeah. So you probably know our parameters on this. Have you heard of it?

Ah, yes. So nothing more than 50%? Yeah. So we always say that things with motors really,

the whole family combined shouldn't be any more than 50% of your take home pay. Tailors at 25?

Yeah. He's at 25. And I mean, you could, you could go up to 100. No. Yeah, I was going to say,

no, she's at 25. Like, wanting 50,000. Right? My math's right. If you make 200,000. Yeah.

A year. Yeah. And she wants to spend 50,000. Uh-huh. That's 25%. Yeah. Of the take it. So she's,

she's way, way below. Yeah. Like, even with his, he's at 12%. Yeah. Yeah. That's what I'm saying.

You've got, you guys have a hundred dollar, hundred thousand dollar window to fill. And so,

in cars, in cars. And so you. Yeah. Okay. So here would be the deal. I would say, in order to

feel good about you spending 50, let's say he loses his job and he needs to go buy something. Could he

buy something for 40 to 50 that he would feel good about? Well, he works for his and his family's

business. Yes. Well, hypothetically, because if he could, then together, you guys are under the 50%

rule. If you have a 50,000 dollar car and he has a 50,000 dollar car, you're at a hundred thousand

dollars of cars making 200,000. Does that make sense? So like, you're good. And you're saying as long

as he'd have the ability to do what you're asking to do. Yes. Yeah. Yeah. Yeah. To stay within those

parameters, then, yeah, because again, God forbid, he loses a job, you know, and he needs a car.

And he need a car. Could he do it within the parameters of the 50% total household of vehicles?

And he could, you know, he could buy a truck. But you're taken to account the inheritance at all,

or do you just kind of ignore that and think about how you got it? Yeah. Now, I kind of ignore it.

That's just a cherry on top that you didn't have to save up for it. Yeah. Unless, unless something

in the inheritance says that they want this to go for your future kids, college tuition,

or something, you don't even know you're going against, and you're like, oh, gosh,

I feel weird to do that. Yeah. I mean, Taylor. Yes. I'm saying yes. I'm on your

team, Taylor. Taylor. You know what? Maybe say 45 to give them like a little, but a little bit

of a 48. Yes. But hey, but seriously, the research, the cars, because what you want and the year,

you may find like, oh, my gosh, I can totally get that for 43. And I'm great. You know what I mean?

So the research is going to help too. I think brings some of this, just the idea, because like,

just, and I understand like, golly, so on the pill of $50,000 to a car. Well, is it used or is it

brand new? Used. We would buy you. Okay. Just double checking that. Yeah. Yeah. I am a green light.

I think you called the right day, Taylor. If you got George Campbell, I don't know what George

would say, but I think he'd say yes. I say yes. So the key is now you have to get your husband

to listen to this episode. Exactly. I know. Yes. And you're married to him, though. So there's,

you know, you, you committed your lifetime. So you, they're maybe a little give and take, but we would say yes.

Oh, wow. Congratulations on the new car. Oh, man. I love a call like that. Those are my favorite calls

when we get to get in the middle and decide with them. And when we get to say yes to people,

because I feel like so many of the calls it's like, dude, you got to sell the car. Yes. You can't go

on that vacation. No, you're broke. Yes. You don't have money. You can't do that. That's,

I feel like that's a lot. It's not fun. So when we get to say yes, because it's response, it's fine.

Well, and I think it's a good, it's a good reminder because a lot of people forget that we want you

to be able to live like no one else. Yes. Obviously, we're telling people all the time, hey, cut back,

pull back, get a beater. And it's really great to understand that these moments happen to

every day. Yes. Whether, even if it's not an inheritance, maybe you've just worked really hard.

You have to think about money or something. Yeah. Yeah. It's fun to be able to do this. And

just the reminder, I think it's good to go back and remind folks who might be listening for

the first time, you know, we're sticklers about this obviously because cars go down and value.

I mean, you said it, you know, you drive a car off the lot. It could drop 30%. So, so quickly.

Especially with EVs now, they're very. Yes. It's huge. And so the parameters are there

really just to make sure too much of your world is not going down in value. That's so, so important.

And so yeah, 50% is the rule. And then I asked her earlier about if she was buying a brand new

vehicle because we even have a parameter there that really you should have a net worth of a million

bucks before you purchase something outright because again, brand new vehicles drop in value so

quickly. And I've heard Dave say, you really want the feeling that if I took that amount,

that value that it was going to drop and I just put it in the street and burned it, I would feel

nothing, right? You don't want to be attached to it in that way. And so that's kind of their

parameters, their guidelines, and they're there for you guys. Yeah. Just help you. And whenever

you get a big sum of money too, we didn't really touch on this earlier. But really, we always say

there's three things you can do with money. You can give it. You can save it. You can spend it.

And I think doing all three in a situation like this, I think is, I think is important. So,

you know, if we are still chatting with her, I probably would tell her, hey, take some of this,

give a little bit of it. That's true. Yes. Put some in savings for the future, spend some on you.

Like, you know, there's a, there's a three prong to this money stuff. And some seasons,

you're going to be saving more. Yes. For something, for a down payment, for a house or whatever it

may look like, you know, some seasons, you're going to have tons of generosity flow through you

and you're able to do a lot, which is amazing. And then some seasons, you're going to be able to

enjoy your money. So you, it doesn't have to be like a, a equals split between the three every

single time, but just be aware that that's how money flows and it should be flowing at some level

of all three of those buckets. Yeah. That's what you're looking for. I love it. Congratulations

on the new car. I hope that your husband gives you zero problems because we agree with you whole

heartedly.

Today's question of the day is brought to you by YRIFI. Defaulted private student loans don't fix

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may not be available in all states. Today's question comes from Jenna and Michigan. She said,

your podcast inspired my husband and I to start the baby steps and we have made so much progress.

I'm expecting our first baby and we'll be having a baby shower soon. As a new mom, I feel

pressure to get the nicest, which means most expensive items. So my baby can have the best things.

With all the talk about how there are so many items, you need what advice would you give a new mom

wanting to be smart financially, but feels the pressure of needing to get the new things. Her friends

say are important. Oh, that's a great question. Well, you asked two moms. So we can, we can

attest to this. Yeah. I mean, I do feel like people go crazy on the first baby. You're about to

have a shower. So I would say register to your heart's desire. Yeah. Put stuff on the registry.

See what you get. And then I know the money coming out of our pocket where we spent the most and we

did. We invested in a good stroller and a good car seat because those things lasted through three

kids. And if you know baby stuff, tell yourself, I mean, stuff gets beat up constantly. Oh, yeah.

So we did. We bought the nice, I mean, we did. It was a very, very, very nice stroller car seat set.

But everything else we went cheap on to the the the high chair, the crib, like all of that stuff,

like did not. It was the thing like what's going to get the most wear and tear that I would want to

keep for the next kids, right? So it's like kind of that's how we made that decision.

Yeah. So I think it's the two things. I think it's being practical and buying the most expensive

item sometimes is worth it because it is the nicest and it's going to last you. And then,

but then the other side of that prong is the is the keeping up side. I feel like you have to keep up.

And let me tell you, you're going to buy something and then six months later, they're going to come

out with a better thing of that. I mean, it just keeps going and going and going and all the crap

that is out there. It is like I swear, it's like the wedding industry. The baby, I mean, people's

like billions of dollars. It's been so much so much. So I would not yeah, I would not feel the

pressure. It's easier said than done. Me just saying this over a microphone and it doesn't help

you. But I do want to really like when she get past it all, you're not, you don't even remember.

Like you don't even think of like, oh my gosh, should I get the best bottles or pacifier? Whatever.

You know what I mean? I will say our stroller. I wish I had made a different choice to this day.

Did you did you buy a nice one, but you didn't like it or was? And I it was the one everybody

recommended. And I honestly didn't do a ton of my own research. I just went with what was

recommended and I hated the stroller. But I'm with you Rachel. I, Sam and I picked like four or

five things that were really important. And they obviously happen to be the most expensive ones.

Yeah. But when we put them on our register or registry, we kind of had the idea that,

you know, most people probably aren't going to get you a $500 gift. Right. So we kind of knew,

we'll probably be on the hook for that or maybe we could use our gift cards towards those things.

But we kind of knew, like, we'll get the expensive stuff likely in everybody also get all the other

new dads. But the best thing I bought and I want to hear what you think of the sock, the outlet

sock that goes on their foot. I don't know. It measures their breathing. So you don't have to like

worry about like, is my baby okay? Right? Like that's the main thing that I would get up in the

night to just be like, I just need to make sure that they're fine. Yes. Yes. But it measures,

it's a little thing that goes around their foot and it grows with them in infancy. And it

measures their O2 and like, yes. And it goes off for some reason. They've rolled over on and

they can't breathe. Yes. Oh my gosh. Just ever. Yeah. Peace of mind. I don't even know if they have.

I'm trying to think, I don't even know if I knew that. Yeah. If we had that, maybe back in your day,

I know. I know. So funny. Yeah. But there's so much, so much crap. I feel like that they just,

yeah. Yeah. It's so marketed too. So just make decision. And they don't guard consignments for

clothing. That's what I did too. I found a few places in Nashville to do consignment. That's

where I bought so many of the kids babies. The baby is none the wiser. Make the things that make

your life easier. That's what I'd say. Yes. Amen. Hallelujah. Alrighty. Craig, who's in Salt Lake

City, Utah is on the line. Hey, Craig, how can we help today? Well, I've got a business, a

construction business. And over the last couple of years, I've had a couple of jobs that

avoid a little south on me. And I've taken out a business loan from my bank. And I've also got a

cash flow to ride the incoming outgoing in my overhead during between payment. Well, over the

last couple of years, I've managed to get myself about 240,000 in debt. And my payments on the

cash flow and the business are about 4,600 a month. And we took out an equity loan on the house

to pay down some of it. But right now I'm sitting at about with all my bills, everything. I'm about

$9,800 a month to just cover my overhead. And we, we owe just under 300 on our house. It

appraises for just under 600. And I'm wondering if it would be a good idea to sell the house and pay

off this debt or whether I should just keep trying to pay it and make heads away. Or I'm worried

that if I sell the house, now I've got to buy another one and I'm not going to get my payment is

only 1,800 a month. Well, how much was the home equity loan? Like, how much is that going to

cut into the 600 that it's worth? Well, I, it was 109. Okay. Because the home equity loan is what we

got. You still owe 300. Is that correct? Yes. So it's about 400,000 in debt. So you'll net out

around 200. Yes. Okay. So to walk us through the plan is the plan to take the, because if the

plan is to take whatever equity, maybe you walk away with 170 after all of this, I don't know.

What's the plan with that 170? Is it to clear business debt? Is it to roll it into a less expensive

house? What are you thinking? Well, I, my, my lease payment on my shop space is about 2,400 a month.

And so I would take this, if we sold the house, I'd take this and clear the business debt.

But I still have to have shop space because I have a bunch of equipment that I need to have

running to stay in business. Can you clarify for me when you said earlier that you had 240,000 in

the business? Is that including the 109 of the HELOC or is that in addition to? No, that includes

that. Okay. So it's 240 total or is it 349 total? Yes. No, 249 total with the, with the house loan

and the cash flow and my business flow. So you would take the, the, the 170 and you would throw

it towards all of the, all of the cash flow loan? Yes. Okay. We're able, we're able to keep up with

the payments. I mean, it's tough, but just those two, the loan, the business flow and the cash flow

is about 4,400 a month. My business, I mean, I'm able to generate that. But I've had to let a lot of

the employees go because they had to cut my over here. Yeah. Yeah. And so now is the, is the business,

do you see it having an upward trajectory or is it flat lining? Is it going down? Where,

like, where do you project revenues to be in the next 12 months? Well, I stay, I stay pretty busy.

I average, I don't know, I, I would probably average in the next year, maybe 200,

thousand. Okay. And volume. So it almost feels like you grew too big, too fast. Like you

created a world that you can't sustain. So, yeah. You selling your house is making a huge,

I mean, you've already taken out of home equity loan. If you sell your house and then turn around

and take the equity and run it back into this business and it's still not even fully clearing the

debt. I'm afraid of that because it's only going to clear out some of the cash flow alone. You're,

you still have this business loan over here that has how much will be left?

Well, we figure after the sale of the house, I would have probably about 40,000 in the business

loan. And that would be the only, the only, you know, the, yeah. So unless I would sit down with

your wife and unless y'all had an aggressive growth plan to get a house again in the next five

years, but man, yeah. I'm not sure, I'm not sure about this business. I might sit down with,

I might sit down with somebody who could give you some input on how the business, the health of

the business and maybe get connected to our entree leadership coaching and see what they tell

you about this business because I'm not convinced you need to keep it.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Jay next to me is Rachel

Cruz. We've got Lauren, who's on the line from Tampa, Florida. Hi Lauren, how can we help today?

Hi there. So my husband and I are expecting our first baby come spring and we're trying to decide

whether I will keep working full time, move to part time in a different role or step away from the

workplace totally. So we're just like wanting some help weighing the risk versus reward of

one leaving the workforce. Yeah. Like what to do to reduce the hours for a season and just all

that that comes with it. Totally. Well, congratulations. So exciting. What would be the main motivation

for you to change? Is it anything money-related, financial-related? Is it just your longing of,

you know, wanting to be a working mom or not be a working mom? Like what's pulling you the most?

I think the main thing is leaving a baby with daycare for five days a week seems really

hard. He works in law enforcement, so he's on 12-hour shifts, right? And he might be moving back

to night shift, come, you know, springtime when the babies do. And so that's also kind of a factor

like could I be so parenting for days at a time? Oh, he's working night shifts and sleeping during

the day. And then I'm having to do over nights and daycare and all that on my own. That's a lot.

Where are you guys at financially? Would you? Could you live up? Yeah, we have no doubt. We just

are mortgage. We could live off of one income. Right now we address, we invest pretty aggressively.

So a little bit more than like two grand a month and two like retirement and like a brokerage.

Is that 15% or is that more or less or do you know what percentage that is?

It's more than 15% of our take home. Okay. What do you all bring home a month?

Per month we bring home about a little bit more than 9,000 between the two of us.

Oh yeah, that is more. Okay. And what would it be if you stopped?

Well, that's a good question. So I'm currently full time engineer and so I haven't had the

conversation with my employer of what part time would look like. I know I could not say my current

department. So it would have to either switch departments within the company and take a

pay cut to go part time or just leave the company altogether and find a different part time role.

What is your husband make? What's his income of the 9,000?

Well, he makes about 96 years and I make 94 years. Okay, about half.

Yeah. So could you all live off of 4,500 a month? Come to believe like mortgage and food and

you know, you guys are in a good spot. Yeah, mortgage and food, but we would have to really decrease

our investing. Sure. Yeah. Well, you're in the good news is you're in a really great spot to

just choose. Yeah. It's not you're not your back is not against the wall. There's nothing that's

demanding attention financially. You're doing very, very well. And the biggest red flag is usually

can we afford the mortgage like this? And I'm just curious if you went down to 4,500. I know you'd

be working part time, but just curious what is your mortgage every single month? 1800. Yeah.

I think that with you even bringing in a little bit, you'd be okay. So do you want to work Lauren

or do you want to be home? I think ideally I would like to work part time just to be able to

contribute financially to the to the family, but then also like have time at home with with little

because for sure. For sure. For sure. Well, here's the great thing that I I feel like I've learned

in this of having three kids and and working is different seasons are going to bring different

things and it's okay for you to make a different decision. So I feel like sometimes women feel like

I have to make this call and it's going to be my life forever. And that's not the case. That's

it. That doesn't have to be. You know, you could you could choose hey, I just want to be home full time.

That's great. And then you make it in six months and I had a friend just like this and she's like

I'm going crazy. Like I want a babysitter so that I can go and like do something and just to like

and to use my talent. She's really talented and she missed that part of her. She you know, she really

did feel like there was something God has given her and that part she didn't have and so she's like

I kind of wanted to do both. And so she figured out a way to do both. But she changed her mind.

Right? Or some people say I'm going to go back to work and they get in. That happens a lot here

at Rams. He was some girls. You know, they have a big and especially your first you don't understand

how it feels and you think I'm going to come back and then you get back in the swing. Yeah. And

you're back in and you're six months in nine months and you're like I hate this. I want to be home.

Guess what? You can quit and do that. You know, so like just know because of this financial

situation, you guys are in which is such a blessing. What a gift. Is that you can you can make

a different decision. So, you know, if your knee jerk right now is hey, I think I do want to work

part-time. Yeah, start talking to your employer about that and start making plans around that

and then learn, give yourself permission that if you're in the six months and your husband's

working night shift and you know, and life is just hard and exhausting and you're like man,

I just want to be home and do the home thing. You can make that decision. You know, it's not an

all or nothing. Yeah. So what about like leaving the work for like I guess one of my fears is

leaving the work for us as a woman for a period of time and then not either making as much as I make

now or like I guess never I guess never being as professionally leveled as I am now like if I

am to even then come back. Yeah, I could be I could be wrong on this. So, Jay, if you have a

different opinion, I think that is something that to a degree, we've kind of like created this

fear in our heads to feel like we can't have an off ramp. So we have to go, go, go, go, go.

But I know many women who have off ramped a career for four to five years

and get back in when the kids are in school and it takes a little bit to get back in but like

they do it and they and they've they've been fine. Now that may not be the case every single

position or every single company but for me that that fear of it not being an absolute,

there's not like a lot. You know what I mean? It's it's more an idea that that can happen.

Yeah. That would that would not be my motivator because it's not a hard fact. It's a fear

that's not always realistic. Yeah, and I think it depends on what field you're in. It could be

something that if you're keeping up, like if you're just keeping up whether it be certifications

or you're just keeping up with new improvements, you know, how that particular field is shifting

just being in the know could help. And there's a big part of this where there's also the assumption

that, okay, let's pretend you're you're a stay-at-home mom for 10 years, right? And you're thinking,

oh my gosh, after 10 years will I really be able to get my old job, right? Be in my old field.

Who's to say you would even want to do that type of work? So even you changing as a person

to saying, hey, I may want to go back to work but not necessarily what you were doing before.

So also giving yourself the ability to evolve in the career space and maybe have a completely

different act and do something totally different. And what the world's going to look like to in

eight years, you know, is wild. Yeah, so to your point, the fear part there could really be

unfounded because careers could change, you could change. Yeah, yes. It's a lot to think of,

like this is a huge choice and hopefully that Rachel and I just gave you a couple of

thoughts just to push you in a direction. Yeah, but it really is a big choice. Yeah, and you're

never in a corner though, right? It is a big choice, but we have multiple choices you get to choose

from, you know, right? Any given month, you get to it's your life, you know, you get to make that

call. And none of them are, like none of them are for life. You always get to go back. It really

is. It's so seasonal. Like what, I mean, I know I pulled back some after I had Charles because I had

three kids under five and I was like, I can't do the travel I'm doing. And I did pull back and I

did. I watched people have books come out that hit higher than mine. My podcast went, you know,

I saw no other people shows do better. And you do, you kind of sit on the sideline for a season.

And now that they're all fully back in school, my gosh, I like have the ability to do more. And

it's great. You know what I mean? And I'm not saying my situation's exactly going to mirror every

single person, but that is what so many working moms I talked to when I was just in Lauren's position

before my first. That's what they always said. It's so seasonal. And it is after being through a

couple of these seasons with kids, it is life is so seasonal as a mom. So give yourself permission

to be presently where you are, because I really do think that's where God and the Holy Spirit has you.

If you've been working the plan, paying off debt saving and changing your family tree, I'm proud

of you. And if you're in baby step four or beyond, it's time to celebrate. The live like no one

else crews is back March 14 through 21, 20, 27 joined the Ramsey personalities and me as we

sail to half moon key, cause a male Jamaica and grand came in on the ultimate debt free vacation.

cabins will sell out just like last time lock in yours with a $600 deposit at Ramsey solutions.com

slash events.

One of the best things to do for your finances is to have a really good tax pro in your corner that

you can trust. They'll help you, they'll help advise you on the best moves to make for your

situation or for your small business, especially if you've had some big life changes in the past year.

Go to Ramsey solutions.com slash tax pro to find CPAs and enrolled agents that have been

vetted by the Ramsey team. Very, very good. All right, we've got Mark, who's an Indianapolis

Indiana. Hi, Mark. How can we help? Hi, how are you doing? Good. What's up?

Hi, so my wife and I bought our first home recently about a week ago. And the thing is that

the seller had agreed to fix a few items from the inspection report. And we've taken a look

at the fixes and we've had a few issues going on this week. And we're not really sure we have

any recourse that we could do or anything that we could do after closing on this house now.

What what are we talking about? Tell me what the items are.

So the sum pump was not operational. What's not the pool? Would you say some pump? Oh,

some okay, I'm sorry, go ahead. Yeah, the sum pump was not operational. And they agreed to

replace a sum pump, which they did. They did replace a sum pump. But in doing so, they did not

connect the pipes properly. And the day that I went that I went right after closing,

there was water flowing everywhere. Oh, my gosh. The flooring of the basement. And then we also

have a garage door situation that they put on a new door, but they have heartily did it because

there's still the old tracks and the old pieces. Yeah, they use some crappy person to,

you know, that did crap work on the repair. Yeah, it's in the contract, right, for it to be

fixed. And they didn't fix it. And it's not fixed. So yes, of course that. Absolutely.

And it's just been a week, right, Mark? It's not six months.

Yes, it's been a week. So that's what we're wondering like, I would talk to your

realtor and go back. Yeah. And absolutely. That they, I mean, you have evidence. Did you take pictures?

Yeah, I took pictures and I took videos. I sent some of my realtor, but there's just,

it's just been quick at time that end. So for your realtor, if there's, if someone's scared,

yeah, from from our realtor. So I'm not sure if someone's just, if they're just busy or they're

just, you're not want to be bothered. I don't know what's going on. Yeah, I'm not sure what's

going on. I'd show up. Do they have a place that you can show up to?

Show up to their 30 minute drive though. But I mean, we're, we're willing. I would. I'd show

about their realtor office and say, Hey, I've been working with Bob and I just closed on my house.

And this is part of my contract. And it's not been done and I've been trying to contact Bob.

And he's not answering my texts or my emails or my calls. That's what I do.

Okay. Yeah. And then I, yeah. And they will be able to recoup anything.

Yeah, it's in your contract. That that that that's that was a part of the deal of this being a

fair deal. And if they don't do it. And if they don't do it in the next 72 hours and answer,

you're going to have to get it fixed. And when you get it fixed, you're going to bill it to them.

Along with a letter from your lawyer. Yeah, I mean, it's in your contract to fix it. And they

didn't fix it properly. So they have to go back and fix it. So yeah, no, that you definitely have

a level of recourse. Now, could is there a world that nobody answers your call mark and everyone

disappears and you can't find anyone? Is it worth pushing legal action at that point? You'll

probably pay more and more fees than to fix it, right? So like they're there's a point. There's a

world that yeah, you end up just having to fix it yourself. But I would go to every single measure

possible. Yeah, to get this because that's so that's so unfair. Just to do a crappy job on the fix

just to say to check off. Check it off to get the contract through. So terrible. The worst part

is having to spend the time in the effort to bring power on this. Oh, sorry, you're going through

that. But thank you for the call. Next up is Katie and Dallas, Texas. Hi, Katie. Hey, thanks for

taking my call. I'm 44. My husband's 46. We currently only have ADK left on our mortgage. We have

no other debt. We are interested in purchasing a newer home bigger, more desirable area, which

would leave us with a newer mortgage of about 250 K after about a $250,000 down payment.

And I'm just wondering if this is financially smart. I think number wise is doable. However,

emotionally, it feels a little bit more challenging to move forward with this for sure. How much

do you guys make a year? Close to 200. Okay. How quickly could you pay the 250 off? Do you think if

you like really if you guys said, okay, paying off the house is a priority to get this mortgage down.

How quickly do you think you guys could do it? Honestly, I don't think it would happen very fast.

Maybe seven to 10 years. Okay. What do you have? I just feel like we wouldn't be able to,

I'm going to say, build wealth as far as contribute more to the $5.29 more to the 401K doing this.

How what percentage are you doing for you're doing retirement now? Are you doing 15 percent?

My husband and I are each both doing 10 percent. Okay. And how long what do you have in there?

What do you have in retirement so far? About $5.50. Okay.

So that'll double, yeah, I mean, that will, that'll double every seven years. So you guys,

I think, will be fine at retirement. And people that are doing, you know, the baby steps on average,

they pay off their home in about nine years. So let's say that's you guys, you know, then you'll be,

you know, your husband will be 55. You'll be 53 with a paid off house. So I think the number,

I don't think it's absolutely terrible. But, but you know, big purchases like this, I always want to

check my spirit in it and ask like the motivation of it, right? Is it to be closer where you guys

want to be? Is it for the schools for the kids? Is it? And it's in a newer, newer neighborhood,

a bigger home, you know, kids in the neighborhood that are friends with kids. My kids. Yeah, totally.

Yeah. So I mean, yeah, it doesn't, that doesn't absolutely scare me. I just want to make sure you

guys as a household can fund 15% of your income into retirement. And I don't want the kids'

colleges to go on complete pause because you guys wanted a newer, bigger house, right? So

from a legacy perspective, I do think there is some level of saying, hey, we are going to have to

contribute and make sure the kids are good with college and do this. Can we do both? Because choosing

one or the other feels yeah, maybe a little off. I also ask myself the question because when I

look at this, my brain goes immediately to, oh my gosh, you only owe 80,000 on your mortgage.

Now, I'm just throwing this out there. The question I'd ask myself is, if our house were paid off,

would I still be interested in getting a 200, at that point, maybe a $200,000 mortgage on a house

or would I be like, no way, my house is paid off. I'm good to go. That, that, that'd be the question

that I'd spend a lot of time with. And you might be like, yes, Jade, I am ready to go.

Yeah, I've done seem like we're almost towards the finish line yet. We've been looking at houses

for the past decade. How much is your current house worth? About 280. Okay, and what are you guys

looking to upgrade to? The sale price is 4.95. We're going to put down about 55%. Oh, yeah.

Yeah, I think you guys are fine, Katie. I mean, as long as the payment, you know, no more than

25% of your take-home pay, so that you guys can invest in retirement, kids college, all of that.

So it may be a season of decreasing lifestyle a little bit. Yeah, and pulling back from, yeah,

I want the household to be investing 15%, and you guys are at 20 right now. So just be thinking

about that. So pulling back will help with this. And to hopefully maybe get it paid off sooner. But,

but yeah, with your ages and come, what you're putting down, I mean, they're putting up 55% like,

I think you're doing everything right and above right in that in that perspective.

The biggest thing is making sure, and I'm assuming that you guys already do have some sort of

emergency fund in place, but making sure you have the right amount of emergency fund because now

with a bigger house payment, that amount needs to go up to match that new lifestyle, obviously.

So just some little things to keep in mind. I love that you mentioned the 529s,

and making sure that college is still a priority. Yeah, it's very, very important. But other than that,

I'm like, let's go. It's great.

Welcome to 2026. Last year is officially in the rear view, and you're fired up to finally make

some changes with your money. New year, new goals, we love it. But let's be honest, old you said the

exact same thing last January and the January before that. And before you know it, those money

goals fizzle out faster than the fleeting flavor of LaCroix. So here's the truth. New year

motivation only gets you so far. You need an actual plan. And the good news is you don't have to

figure it out on your own. Every dollar builds a personalized plan based on your goals and your

real life. And it actually coaches you to stick with it. Plus the every dollar app will help you find

extra money hiding in your budget. And trust me, there's always something hiding. The average person

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Go download the every dollar budget app and start for free right now.

So just a reminder, so much of what we teach here is not just to make your life difficult

by saying that you need to cut back on your budget or you need to sell your car. The whole

purpose of this is so that you can live like no one else so that you can achieve financial peace.

And of course that does translate to numbers. The hope is that you'll become a baby steps millionaire.

And a baby steps millionaire is simply someone who has, you know, used our teachings,

the baby steps and all the methods associated with that. And they've achieved a net worth of a

million dollars or more, which when you think about a net worth equation, guys, it's what you own

minus what you owe equaling a million bucks. And so we actually have someone on the line who has

accomplished that and we want to celebrate them. We have Kelly who's from Oklahoma City, Oklahoma

on the line. Hey, Kelly. Hey, how you doing, Jade? What's going on? A million dollars. Tell us more.

Well, yeah, net worth of 2.4 million. Wow. And 57 years old, my wife is 49.

And we inherited zero dollars and zero cents. And every bit of it, we've done ourselves.

What's the 2.4 consists of? Okay, it's, I got one million. We got one million in retirement.

This I rolled over TSP. I was in the military. Okay. And then her 457. We got Roth. It's mostly an

index funds. There's a little mutual funds in there. Yeah. And then non-retirement, we got our

emergency fund of 30,000. And then we put 260,000 in high-paying dividend ETFs. My wife,

Roth, is really into that and is paying dividends. That's great. And then we've got 890,000 in a brokerage

account. Wow. And then our home, which we paid cash for in 2015 is worth about 200,000 now.

That's amazing. Well done, Kelly. That's amazing. So what kind of work do you both do? I mean,

you mentioned the TSP and mentioned the military. Tell us about that. Yeah. Well, I'm retired

military and my wife is still working. She's a nurse. Okay. She's been able to work quite a bit of,

you know, over time is always there for her. Yeah. That's always one of the top careers we hear

from people that achieve a millionaire status is, yep, is, yep, in the medical field in that way.

Okay. So how long have you guys been married? We got married in

your thinking 2006. Okay. Okay. Okay. Great. So what would you say? Maybe not as a, maybe not as a

married couple, but as a, you know, while working, what do you think the worst year, financially,

how much did you make? And then what was your best year? And same with her, if you know,

off the top of your head, I'm just curious. Well, when we first got married, she wasn't working

because she immigrated here. So okay. Yeah. I probably made, probably like, I was making 35,

40,000 a year. Okay. And we were, we were deeply in debt. I was deeply in debt and ticked

that back. Also, you brought most of the debt into their relationship. I bought all the debt.

How much? I know. Oh, boy, how much should I have in debt? Back then, it was probably,

I had student loans, our loans, personal loans. I had it all. Yeah. Yeah. It was probably close

to 90,000. Wow. So going from a negative net worth building it up to 2.4 million, what would

you say the key? What were a couple of things that you did that you were like, this was, this was a

game changer for me. I think the game changer was realizing that I had got myself in the mess and

it was me that's going to get myself out of the mess. That's so true. Yep. The personal responsibility

aspect of it that you're going to be the thing that changes it. Yes. And then I mean, obviously,

you know, you've got the spouse, that's such an important part, your partner in accomplishing all

this. I mean, what would you say to the person? I mean, we get calls all the time who they're trying

to decide, should I marry this person or maybe they're newlyweds and they're trying to figure out

what advice do you have for that couple? Oh, for a couple. The one thing is you both have to have

the same principles and values, you know, as far as money goes. If someone just doesn't mind being in

debt and doesn't plan and doesn't set goals, I think that's a red flag because it's going to be a

one-sided marriage. You're going to be carrying the burdens. Yes. Absolutely. Yeah. Absolutely.

So you never gave us the top number. So the lower number was around 35. What did you guys get up to

in order to accomplish this? It was probably just recently because with our dividends,

and that's one thing that changed was the Robert Kiyosaki book. When I read that and it said that

the wealthy don't work for money, their money works for them. That's what we've been able to do

is increase our money or income by passive income. So now it's about 150,000. Wow. Way to go.

Well done. Way to go. But during your, during just your working lifetime, did you guys ever break

100 grand? Would you say? We did towards the end of my military career, but that was only like,

you know, within like maybe like two, three years ago. Yeah. See, that's what's impressive.

And I think what a lot of people need to hear is that, you know, your income is powerful,

right? It helps. But you don't have to be making $300,000 a year to become a millionaire.

Absolutely. You could be making under six figures, right? Like just like Kelly, you and your wife did.

But it's the diligence. I mean, the amount you guys have in investments, whether it's ETFs or,

you know, your, you know, your retirement, you have almost a million in retirement. All of that,

like that stuff adds up. And it's just the consistency and the diligence of what you guys did.

Again, you guys weren't making 300 grand, right? You barely even hit six figures,

but that's only in the last few years. That's not what created it. It was the consistency of the

investing and you guys being wise and paying off your home and all of it. So well done. So well done.

And just curious, what did, what role did the budget play for you? Like were you budgeters or

how did you do this? Well, the budget is, we, uh, we tracked every expense. I mean, we really,

uh, we really, really were diligent. We really were intentional. And I'm known a lot of people,

like you said, they make a lot of money, but they're broke. Yeah. Yeah. So, you know, basically,

we made sure that after, excuse me, we paid ourselves first. Like they always say, we put money

into investments first. And then what was left, that's what we used to pay our living expenses.

So we had to cut back on certain things we did. Yeah. You know, but we're, we were buying our

freedom is what we're doing. I love that. Well, well done. Well done, Kelly. And to your wife,

as well, what's her name? Her name is EG. EG. Well done. Kelly and EG, you guys are an inspiration.

And what I really, truly love about your story is that so many people think if you walk the baby

steps, you, you're gonna, you're gonna be an old man by the time you're a millionaire. And I just

love that you guys are young. I mean, you've got your whole life in front of you. And what's,

you know, you just, you've got, like you said, you bought your freedom and you've got your time back.

So well, well done. Thank you so much for calling in and encouraging everybody. So, so good.

You bet. You bet. Well done, Kelly. Well done. I love a call like that, Rachel, because it just,

it's so inspiring for people to actually see what's possible if you walk in. Well,

and especially him, right? He's 57. So we'll make up an age of when he started all this. And

he said it was about 20 years ago, right? So he's 37, $90,000 in consumer debt. And it just shows

that you can still make the change, right? Wherever you are, you can still make the change. And he

went from nothing and negative. Yes. Deeply in debt, you know, nothing. No one gave him a hand,

as I said, like no one here. It's, but it is. It's the consistency of what you're doing day in and

day out. And, you know, we're not as blunt to say, like, you know, you have to do retirement first

before lifestyle, necessarily. Sure. We are big on like, you know, you want to, you want to give,

save and spend. Yes. But that idea that my futures worth it, that I'm going to, I'm going to make

that the priority, not the lifestyle today. That's it. That's a different mindset than most people.

Most people, they want to feel good today, right? And I get that, right? But at what expense?

Yeah, I would expense. And what it is is not sacrificing what you want most for what you want

now in the moment. And I love that, you know, I think the number one advice that I give to people

is guys, the time is going to pass anyway. If you're 30, one of these days, you're going to be 50.

And if you're 40, one of these days, you're going to be 60. And what you do with that 10, 15, 20 years,

it matters. And usually here's the thing. It really is just like a two or three year window,

that if you can just pour on the gasoline and do what you need to do for a very short period of

time, it affects that entire 10, 15 year, 20 year window substantially. So please, please, please,

let Kelly and I believe her name was EG. EG, yeah, I like that. Let that be your inspiration.

If you've been on the fence, come on, get started today.

Hey guys, Dave Ramsey here every day on the show, we help people work through real money

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Solutions.com.

All right, our Ramsey scripture in quote of the day, Proverbs 12 11 says,

those who work their land will have abundant food, but those who chase fantasies have no sense.

Thomas Jefferson said, I'm a great believer in luck and I find the harder I work the more of it I

have. So good. All right, Adam is in Detroit, Michigan. Adam, how can we help today?

Hi, so I am in an interesting situation. I have a job offer which would move me out of state in

Indiana where we are looking to sell our house and use the money from our house

debt and then live with my in-laws for a couple months. I just kind of wanted to get your opinion

and some non-biased thoughts on if this is a good idea or what should I be thinking about?

Well, the first question was if you use the money to pay off the debt, why wouldn't you just

rent an apartment or rent a house? Why would you have to live with the in-laws?

They have a very big house. It would save us additional money where we could basically put my

entire check to the side where we wouldn't be spending just to spend. That's why I don't want to

get into renting again. I think you know how much debt do you guys have at them? Including my

student loans, about 40,000. How much would you get from that? I would say after the sale of the

house in Rio to refuse all that, how about 90? You clear the debt and you are left with 50. That's

your emergency fund and how much do you guys make a year? How much do you make a year? I make

a hundred thousand. Why don't you just pay off the 40,000 and stay in your home? Well, the job moves me

That's right. You said that. How I'm sorry you're moving. I'm so sorry. I got you.

Okay, so once you take the job, you'll be making a hundred thousand. You'll have no debt plus

50,000 dollars. Part of which would be your emergency fund. I just how old are you guys? We're both

29. We turn 30. We have three kids. Oh, man. I just can't see why you would need to live with family

because you'll be in you'll have no debt. You'll have plenty of savings. Get your own spot. Are you

Are you Are you guys familiar with the area? Like what would you want to know when you buy a house?

Where are you want to be? Yeah, so I mean, I went to college in the area. My wife is from the area

Okay, so we're very familiar. We have a lot of family and friends in the area. Okay. Do you

I mean thought was to you know take a couple months to easily save up for 20% down a house that we want.

And how yeah, how many yeah, how long would you be there? Would you say?

We said max six months. Okay, and that's why I want to be smart about how much

I pay off. So here's where we always I feel like I don't know, especially Jade and I

feel like we're on the same page with this while we always kind of caution against the idea of

just moving back home or moving in with, you know, the family. Because for the most at the time,

people just have this vague idea, hey, I'm going to move back home to pay off debt. And then you

dig into the numbers and they've been home for six months. Like, well, how much are you saving? Like,

well, I, you know, I've actually gone $2,000 in credit card debt or whatever. And you're like,

how have you gone in debt when you're living at home and you're saving money? Because they don't

really do it, right? They just kind of have this idea of it. It's not driven. It's not specific.

There's not a timeline. So the only reason I would be I would somewhat entertain it for you guys

in the situation is it's short enough at six months. And to move somewhere and move out and get a

six month lease, you know, might be somewhat of a headache. You know what you're going to be

putting away. And I would just say, if you choose to do this, be, be diligent about it. Because I do

think living with family over the long term, it just can erode the, you know what I mean? Like,

yeah, there's a tension point to it. And it's five of y'all. That's a lot.

Yeah. Yeah. So if you guys know, for sure, there's a end time line, it's no more than six months.

We're going to get, because we're moving anyways, like, I don't know. I would be, I would be

somewhat okay with it at them. But again, you guys have to be diligent because some people get in

these situations and more than like, or more than what we see, they just get lazy about it.

Sure. And they don't really put what they think they're going to put away and all of it. So you

just have to be diligent. That's my word of caution. Yeah. I think the one, the one thought process we

had is my entire track, which I, which is about 6,000 a month, I would set the entire six grand

off to the side. I would just go into a separate account with the 50K that we have left over.

Yeah. And my wife's account would pay for the car payments and the car insurance and all that

stuff. Car payments. I thought that you were, would be totally dirty. I have two leases. So those,

those, I didn't include those in the 40,000. Winder those leases up. Her leases up in May. And then

mine has another two years on it. Are y'all going to be paying for it to own the car? Are you

guys just done after the leasing? I have to, you know, buy a new car. We talked about possibly buying

out her lease on her car. So those, those actually obviously add to the timeline. So I mean,

I would sit and plan that out because obviously my next question for you before you said the lease

was going to be how much do you need to save up for this down payment? Like what's the exact number

and run that back? But now you have to add in, okay, what is it going to cost to possibly buy out

these leases or what's it going to cost at the end of the lease to now buy something in cash?

Right? So those are real numbers in the higher thousands to be aware of.

And that could really set this on a longer journey. So if you had to spitball it right now,

what would you say the cost car wise is going to be for you guys?

That's a great question. I know like our monthly payments right now is about 800 between the two cars.

Between the two? Okay, so your wife says over in May. I mean, that's creeping up here in a little

bit. What do you think you'll do? I mean, go buy a $6,000 car with one of your months pay checks.

Yeah, I mean, but that to my point, I guess what I'm saying here to my point is that's the sort of

thing if you're living with in-laws, it could be really easy to say, oh, well, we'll just

and end up spending more on a car because you don't have any other rights. There's no parameter to

keep you in line. So just be aware of that. If I had to vote for this and I think Rachel and I

are split, if I had to vote for it, I think I'd vote no, I think I'd vote get get it up, get like

rent somewhere and decide if you like the area and be on your own with your three kids. But

if you didn't do that, it wouldn't be the worst thing in the world.

Okay. Yeah, the decision's like going to make or break you. It just could create bad habits, though.

That you don't even realize because the lifestyle creep that could happen again, hypothetical,

but you're not paying for the let you know that just that it's just that I'm going,

which you guys know you're adults at. I mean, you guys have done you've been homeowners. You know,

you know the deal, but it's just that it's just getting lazy on any of the numbers and then actually

pushing things that you wouldn't have pushed otherwise, like getting a nicer car that you wouldn't

have done if you were paying rent, paying, like living in reality. It's just the numbers. You're

going to be living in reality. Hopefully in six, eight months, you know, when you when you have

have rights, but making sure always too, Adam, that you guys have that emergency funds and all of it.

So there's some there's some steps and that may push the timeline. So yeah, you and your wife,

that's the homework is figuring out what these create real numbers. Don't just make it something

up in the clouds. Say tonight or sit down this weekend and say, okay, Lisa's coming up in May,

what's the plan? What are we going to spend and make a hard concrete number and then decide about

your lease and say, are we really going to ride this car payment thing out for two more years?

Or, you know, can we buy this thing out? Decide and figure out whatever research due diligence.

You have to do get that actual number. And then from there, it's then saying, okay, realistically

in this area to get the payment underneath 25% of our take on pay, what must our down payment be?

And you might look at that number and go, oh gosh, in order for all of you, that is going to take

longer. That could be like 10 months or that could be like 14 months. And then that might cause you

to pull back a little bit and decide, do we really want to live within laws for over a year?

Yeah. So I can just see this snowballing really quickly. So just be on top of it.

Yeah. And the hard thing with lease cars too is usually not always, you know,

usually can afford a lease payment of a nicer car than if you got a car payment.

Yeah. And so even the type of car you guys, if you don't do the buyout that you're going to get,

it may not be as nice as the current car you're driving too. So just be thinking through kind of

the scenario and don't let your lifestyle creep, you know, outweigh some more decisions.

So true. Well, thanks for hanging out with us today. And remember, there's ultimately one

way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.