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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.
Alongside the fabulous and comparable Jade Worshaw, I'm just kidding, that's a lyric, you know?
I'm sorry, from the Barbie movie, that's all I'm just trying to do a little shout out to
the audience is awake and paid attention.
Fabulous studio audience today.
Handsome looking group of people that we'll meet here in a little bit out there watching
in the lobby.
So let's get right to it, triple eight, eight, two, five, five, two, two, five.
That's the number to jump in today.
Sarah joins us in Philadelphia, Pennsylvania.
Sarah, how can we help?
Hey guys, so my husband and I keep on loaning his mom money.
She always pays it back to be fair, but then she asks again, and I'm starting to really
resent it, and we disagree on whether to keep helping.
And I just don't know how to go forward with my husband here.
Oh boy.
Obviously you don't want to, he feels he has to, is that a fair classification, okay?
And tell me about the last conversation that you guys had about this.
How did it go?
Well, it started because she asked for $7,000, I thought this was in the $70 range to be
completely.
I have the same.
No, no, no, no.
This is not some change.
Wow.
No, it's, it's always thousands of dollars, and I, I basically told him, like, listen,
for her piggy bank, and I'm tired of being her piggy bank, and she said, well, he says
that she never asks for frivolous things, it's always, quote, unquote, an emergency or
important.
Okay, tell me what the $7,000 ask was for.
Just, I think it was the transmission on her car.
And how often does this occur?
Is this once a year?
Is it every couple of months, and is it always, like, to the tune of, like, thousands of
dollars, or is it sometimes just, like, spot me to a couple of hundies?
No, it's always, it's always thousands of dollars, at least once a year, and it's sometimes
twice a year.
And she always pays it back?
She does.
Yeah.
I know.
I don't know, because I, this is all just my husband's word, but I think, I think it's
six months.
Yeah.
This is tough.
The reason I asked, because I really wanted Jade to lean in on this one, because you are
the wife, and this is tough for me.
I don't have any clear response, because the reason I asked about the relationship conversation
was, what had happened the last time we talked about it, and it, and you didn't give me
a lot of detail, but from what I'm inferring, he basically was like, well, it's not frivolous.
She needed a new transmission, and so in his mind, he's justifying mom's crazy.
He's on mom's side, and that's a problem.
And so she's, so I'm going to actually defer to you here, because this, and not to say
that a man can't inform this question, but I do think it's unique.
I want you to lead off here quite, could it be also with you?
I'm not sure what she does here.
I think that this is a classic, this is kind of a classic, leave and cleave type deal,
where the, the sun has to go, I love my mom, my mom made me.
She raised me, I have nothing but love for her, but if I'm forced to choose, and my
wife is not wrong, it's just a, you know, well, I think I think the husband's wrong,
but I'm just saying in his mind, in his mind, if he's, if he's seeing it as a, as a question
of preference, my mom prefers this, my wife prefers this, you got to go with the wife
every time.
Yeah.
And that's the question I have.
Quick, I don't want to totally interrupt your moment up, but I do want it, Sarah.
I mean, is he completely clear, if he were sitting right here with Jayne, would he be
completely clear that you've had it with this, or, or is he think you're just mildly frustrated?
What does he think?
I think I, he, he knows that I've kind of had it with us.
Okay.
Now, you said something earlier that begs a couple of questions from me, when I asked
does she pay the money back, by the way, that's neither here nor there to the question
of whether you should lend it, I was trying to understand his point of view a little bit
more so I can argue it.
But what you responded was, was interesting, you said that basically, as far as you know,
based on your husband's word, which made me think like, do you not have access into
seeing each other's finances?
Are you sharing finances, basically?
I mean, technically we do, but we do not have a joint-think account.
Okay.
So that, that right there, and I'm going to tell you right now, Sarah, I think we've
been getting more and more of these calls where what happens is you guys have not fully
aligned on finances, the philosophy of it, nor how we share our money, right?
There's still this kind of side business going on where we have, we have one account that
we put checks in, but we also have our side accounts.
What happens when you set up life like that is you, you, you actively pull yourself out
of being the decision maker with your spouse on every major financial issue, because you've
already said, we're not fully together.
And so that, I think, is why your husband is operating over here saying, ah, it's not
that big of a deal.
She always pays me back.
I'm not saying it's right.
I'm just understanding it.
That's good.
It's actually great insight.
It's a really good point, Sarah.
I hope you're hearing what she's saying, because here's where this goes.
You guys are going to have to have a mediator, and I think it's a marriage therapist.
Because to Jay's point, things have been so separate.
It's a total restart point.
But, and again, he just, he needs a completely new perspective, and you don't want to put
yourself in a place where you're threatening him, right?
And then making him make a false choice.
Now, if he was sitting here with me, I'd look at him straight in the eye and go, hey, bro,
listen to me.
You got it to me.
You got to, you got to choose your wife here.
You got to grow up, take the diaper off, the emotional diaper.
This is embarrassing.
I mean, I would just go straight at it.
He's not here today.
So we want to equip you.
But I think Jay's insight is absolutely phenomenally on target.
So because of that, I think you're going to have to have a marriage therapist to bring
you together, hopefully a skilled one, who is the middle ground, and could go, we do have
to reset.
Because I think he's operating like, what's the big deal?
Yeah, because you're the one who, and I'm not saying this in a wrong way, I think you're
absolutely right, Sarah.
But if you look at what the agreement was, right, if you and I say, here's the stakes,
we'll do this together.
And then you're the one who changes.
He has the right to be confused or wonder, well, what's the big deal?
And again, I can't stress this enough.
I believe you're right in wanting to not continue to lend her money.
But in that, that's not the bigger problem.
The bigger problem is we actually need to have full transparency on our money.
We need to be fully combined on our money.
And I agree with Ken, counseling is a way to start that new process.
And here's the ask, here's what you got to tell him.
You have to say, we have to do this.
We have to go to counseling, so I'll threat.
We have to go.
This is causing me to resent you and your mom.
I don't like it.
And I don't have the tools to convince you.
So will you please do this for me?
That I think that's your posture.
And you know, the context has to be reset because you guys are not on the same page.
Therefore, he's like, what's the issue?
So going to be tough, there's not going to be easy, right, right, right, right.
But Jayden, in this situation, there is no easy.
This has to be confrontation, and to your point, a full, blown operational reset.
That's a reboot.
Absolutely.
And then on the money front, what I see, honestly, just on the money front, it's only a matter
of time because she's not been a good, the mother-in-law has not been a good manager
of finances.
It's only a matter of time before she stops paying you guys back is what I see because
she's just not a responsible person with her money.
Oh, and be prepared.
And I don't want to judge her, but be prepared for a pretty nice blowback from mom, because
I believe she's either knowingly or unknowingly manipulating your husband, her son.
Wow.
That's going to be sticky and stinky, a words of scar.
Be prepared.
Dave, we got a lot of calls on this show where life happens.
One day someone's healthy, they're working, providing for their family, and then a curveball
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We hear it all the time, a car accident, a cancer diagnosis, a heart attack, and suddenly
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Yeah.
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Yeah, that's right.
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But there's another piece that people often overlook, and that's long term disability
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Yeah, it's important to understand the difference between them.
Life insurance steps in when you die.
Disability insurance steps in while you're alive, but can't work.
So it replaces a large part of your income, so the bills still get paid while you get
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We're going to go to Reagan next in Houston, Texas.
Reagan, how can we help?
Hi, so my husband and I, we're about 25.
We have two kids, and we are kind of living paycheck to paycheck when I feel like we shouldn't
be.
We're trying to figure out what's the best way to kind of pay down our debt as well as
still put money into the savings account and help, you know, have an extra layer of
cushion.
Okay.
Okay.
Tell me a little bit more about how much debt you have and what type of debt it is.
So without our mortgage payment, it's about $60,000, mainly credit cards, vehicle loans,
and some medical bills.
Okay.
How much of it is the car?
Our vehicle, so our, his truck payment is about 40,000 in mines, about 4600.
Okay.
So 40,000 is the total amount that you owe on his car.
About 4600.
Oh, 4600.
Okay.
I hear you.
All right.
I, when I look at this and you tell me, hey, we're living paycheck to paycheck, the number
one glaring obvious reason I see are, are the cars.
What's his monthly payment and what's your monthly payment?
So the car payment is $370, eight a month and the truck payment is about 600 a month.
There you go.
Yeah.
The difference wouldn't make if you cleared that out and had an extra almost $1,000 a month
in your life.
Uh, yes.
A lot.
And it's also, I think it's also daycare because we spend a little over a thousand a month
on daycare.
Yeah, daycare will get you.
But that's not something that we can really change right now.
The thing that we can really change and affect, uh, is this car payment.
Tell me about you guys's income.
What do you bring in every month and what does he bring in?
Um, so together roughly $7,600, um, I just got a promotion.
A couple of months ago, so our income went up and we had, we had to buy a vehicle.
I didn't necessarily have to be the truck, but, um, you know, right now we're trying
to figure out what's the best way to pay this down because I will probably need a car
here in a couple of years, maybe a year or two, um, because my car keeps breaking down.
Yeah.
So let's solve for that then.
I mean, what I would do, I mean, yes, you're right.
You have to have vehicles, um, to, to, to operate life.
By agree with that, however, when you're, you know, $60,000 in debt, clearing out 40,000
of it, which is a vehicle makes a humongous difference.
So if he sold that vehicle today, what, what could he get for it?
Uh, possibly 35, 40, so we just, we just bought it not to the bruh, even, even better,
even better.
You won't be as far upside down on it.
Give any money saved?
Uh, we have about 6,000 in our savings and about $4,300 coming within the next month or
so from our, our college scholarships we get.
So we're going to have access to $10,300 that is above and beyond your income and that's
coming quickly.
We already got six.
Well, are you familiar with our baby steps and how they work?
Yes.
So I purchased the book last year, so we saved up the money and we've been trying
to pay down the lowest amount of debt we've had or would you know, but if you're familiar
with the baby steps, baby step one is how much in the bank?
A thousand.
You got 6,000.
Is it 6,000?
Yeah.
So Jade, what is she doing with the five?
We got good news for you on this truck.
Let's roll through this.
Yeah, let's pretend.
Yeah, that you only get 35 for it.
Okay.
You've got the five to put with it so that that's a clean break right there.
And then to your point, if you've saved up 600, you know, if you've cleared 600 extra
dollars a month, theoretically, how quickly could you save for a cash car, right?
If you said for it for a split second, I'm going to pause the debt snowball and I'm going
to stack up some money as quickly as possible.
How quickly could you stack up five or six thousand dollars?
I think making 7,600 a month, I think you could do it pretty quickly.
So that's really the play here.
Anytime you have debt, I'm going to find out ways to clear it very, very quickly because
the faster we do this, the more motivated you're going to be to continue.
So in a world where you sell that car now suddenly, instead of 40,000, instead of 60,000
of that, we've got 20,000 and you've got more money per month to knock that out.
I think this is kind of like a win-win.
And then you have this $4,300 coming.
That goes towards your car fund.
Does that make sense?
How on a scale of 1 to 10, be honest with me, how excited are you about that solution?
I'm kind of in the middle.
I'm a little nervous because right now my biggest, well, not the biggest concern, obviously,
but my car is one because I don't want to have to buy two new vehicles and go into two
car payments again.
That's what I'm solving for.
So let me let's roll through that.
Hold on a second.
Before you roll through this, where did you hear that we want you to have
two car payments when Jay just spent a couple of minutes telling you how to get rid of the
only one you have?
No, I heard that.
I was just, it goes through my mind because we have really bad luck with vehicles.
And so, you know, I'm glad you're saying this.
I'm glad you're saying this.
Here's what I want to talk about.
So we gave you the advice.
It's normal to very, very quickly get very emotional about it, right?
Because we've had bad luck with advice or I'm sorry, we've had bad luck with cars.
Oh, you know, I have to think about how to tell my husband this.
Oh, my gosh, you know, what about security, right?
Your brain starts going through all those emotional plays.
So I want you right now to tell me the top three things that, Ken and I are going to
dismantle that in a completely logical, unemotional way.
How about that?
Okay.
Okay.
So first thing you said is we've had bad luck with cars in the past, Ken, what you got?
So if I, that's just life, right?
So this idea that you're stuck in this bad luck thing.
You know, you're not.
You're just a part of the human race.
It's a little bit of the human lottery, right?
I mean, you know, you go look at a mechanic, any mechanic place in your local area and you're
going to see a steady stream of cars.
Probably not a bad idea to go, oh, I don't have bad luck.
I'm driving an imperfect machine and there's thousands of other people in my zip code.
So I think it's mindset is how I would dismantle that and go, all right.
Now how do I prepare for or how bad luck?
Have better odds.
How do I make the odds better?
Well, I'm going to put enough money away that I can take care of a basic mechanical
issue and keep moving forward.
Is it a little bit of a step back every time?
Absolutely.
Sure.
Or you can do a lot of great research on the front end to make sure you're making better
choices than you've made in the past.
That's right.
Take longer to buy the next car, right?
Get it checked out by a mechanic by a car that has better odds, right?
Absolutely.
We could name the brands and you can look them up that can do much better.
I mean, I'm a guy right now that's got three teens, okay?
I got more cars than I had a ever thought that I would have owned, all of them used and
I'm driving a used car and I do the research and I get these things checked out by a mechanic
that I trust because I got two teens right now driving every day.
Yeah.
And I'll tell you what I do.
I have a Christian brothers in my neighborhood.
It's a local mechanic.
I'll bring when we're looking at used vehicles, you can bring them over there and they'll give
them a once over for you and check it out so you can feel good about the purchase.
That was the first thing.
Next idea that could be a potential issue could be what?
Just the idea of downgrading vehicle because other people see it.
Can you drive in a car that stinks?
Yeah.
Everybody saw you get a new vehicle and now suddenly you got in rid of it.
So I got to solve for that.
You drive around the corner.
If you're ashamed of the car and I've been there, okay?
When I first got married, I had a Ford Taurus, okay?
And it had no AC and one day on the way to work, the felt on the top of the ceiling of
the car just fell down on top of my head at a stoplight.
I was very embarrassed.
The dignity.
Lots of dignity.
It was very embarrassing.
I got home that night and I couldn't afford to fix it.
So you know what I did?
I got a staple gun out.
Come on, can.
Three shots took care of that business and then, but I was embarrassed.
So guess what?
I always had a good excuse or a creative way of getting out of driving anybody to lunch.
That was pretty creative.
Number two, if I had to go to a meeting, I pulled around the corner and walked and just
acted like there was no place to park.
Perfect.
There are some creative psychological things you can do to not be ashamed of the hoopty
for a season.
So I think that's kind of, I'm addressing that because I think that's part of it is our
pride.
The point is what we're suggesting, you are going to feel an emotional backlash immediately.
But I want to challenge you to work yourself through it because chances are, it's just
that first feeling of, because you don't know what's, it's fear.
It's fear is what it is.
You've never done something like this before.
You've never done something this drastic.
You don't know how it's going to play out, but we do.
We've been teaching this for a very long time.
Hey guys, George here.
Listen, 99 times out of 100 when people say, I don't know where my money goes.
It's not a math problem.
It's a behavior problem.
They're not budgeting.
Then they're shocked when their bank account hits triple zeros.
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They're going to teach you the way that we would teach you.
And this is a good move if you've never done this before.
So do that, and you'll be better for it.
Eric is up next in Phoenix, Arizona.
Eric, how can we help?
Hey, how's it going?
Good.
How are you doing?
Yeah, you're back.
Pretty good.
So I'm going to bet a bit of a pickle.
My mom co-signed at least with my brother about four years ago, and he's in a lot of jobs.
He doesn't like to work any corporate, even though he had the opportunity to do so.
And now he can afford it.
And he wanted to get a rebuild, which he said, no.
So she's been asking for help to pay bills.
And so now the car is just kind of sitting, being used.
But we had asked her to sell it, but we, I mean, might have said some other siblings in
life.
But she doesn't want to sell it.
What?
She's kind of on the water.
So even if she does sell it, she won't get much for it.
Okay.
How much do you guys, well, let me say, how much does the mom and the brother owe on it?
About 20 grand left on it.
Okay.
What's it worth if they sold it?
You kind of ruined it.
Sorry.
You said somebody ruined it.
She ruined it or he ruined it.
He ruined it.
How?
He was using it.
Just wrecking it.
He just didn't take care of it.
Maintenance.
Yeah.
It's been wrecked a couple of times as well.
Oh, why are you calling?
The area is terrible because mom has asked him to help out.
And brother, because brother, he wasn't an accident last year as well.
He wasn't taking care of it while she's been going to rehab and then to video and stuff
like that.
Understood.
What could she sell the car for today?
Maybe 5 grand, honestly.
Oh, gosh.
It should be lucky.
Okay.
Well, this is, first of all, your brother is in a season of life where he is impersonating
a deadbeat.
Yeah.
Kind of.
The main reason she doesn't want to necessarily take it back to the bank or maybe just get a repote,
which I think is the best.
Well, repote is not an option, and we can talk to you about that, why that is, but continue,
continue on.
Yeah.
So even if she says she wants to get a house soon enough, which is, I don't know, I don't
know.
I don't know.
I don't know.
I don't know.
I don't know.
Yeah.
So eventually she says she wants to get a house soon enough, which I've written things
she can't afford.
So the biggest thing for me really is just continuing to help feels like enabling.
Yeah.
I don't know how to approach her in a sense like, okay, in as much as we've been helping
this entire time, there's a couple things she could do.
What else have you been doing?
What else have you been doing to help?
It sounds like you've already been down that road.
It's mostly just bills and, you know, rent and stuff like that.
I've go to the home, but I just got married, so I'm moving out.
Is that because of the accident or that's just always been ongoing?
It's been ongoing, but more so after the accident.
And who's we?
I thought I heard you say we've been helping.
My siblings and I, my, I have a young brother and then I'm older.
Are your siblings that have been helping with the bills?
Are they all in the same opinion of you that you just said, which is, I feel like I'm
helping and it's enabling.
Do they have the same feeling?
Somewhat my older sister, yes, my older brother, I'm not too sure.
Okay.
He doesn't say much.
Listen, I, you asked a question and I'm going to answer the question that I heard and
that is, how do I approach her on this?
How do I handle this?
And this is you going, mom, I can't do this anymore.
Here's what you should do.
If I were you, this is what I would do.
And you lay it out and say, I'd sell the car because every day that she doesn't sell
the car, there's like another calamity that's probably going to happen to this.
And I feel like this entire car represents a lot of the calamity that your brother creates
and no one is willing to do anything about it.
And so I, if I'm you, I go to mom and I go, mom, sell the car today because we got at
least get five grand for it and at least lessons the debt by 5,000.
And then we have a $15,000 problem.
You got all these other financial problems that are more important in this stupid car.
So mom, here's how I'm going to help, going forward.
I can't help you financially anymore.
I've got to move on.
I suspect that you don't have the finances and the margin to be able to keep helping
her anyway without hurting you, true or false.
True.
So that's the conversation, mom, I can't even if I wanted to, I can't.
So here's how I can help, I'll be willing to list the car, sell the car, I'll be willing
to have a conversation with younger brother and grab him by the nap of the neck and
just absolutely as only a brother can lay into his butt with both hands and with both
hands.
Very well done Jade.
And you like use both hands, clapping on both ears.
OK.
Now here's the deal and that's a lay it out and move on and say, you got to help mom.
Yeah.
And I think all the siblings should unite on an intervention.
Outside of that, Jade, that's what I'm thinking of what, what else did I leave off the table?
What would you do here?
There's a part that can help relationally.
I think early on, if it's possible,
you said mom co-signed for brother,
which makes me think mom has better credit.
I wonder if she can refinance this and get him off of it,
so that at least you're separating that relational tie.
And then from there on, she can make whatever choices
she's going to make with the car,
separate from the brother.
That might un-money the waters just a hair,
as she decides what she's going to do next.
But other than that, I think Ken is exactly spot on.
I have nothing to add.
Yeah, this is tough.
So selling the car would be private sale?
Yeah, you're going to get the more money.
Yeah.
OK.
And what she can do, and you can advise her of this,
if her credit's all right, in the process
of getting him off the loan, when you're in there,
you can say, here's what we want to do.
We need a loan for the difference,
because ultimately, we're going to sell this thing.
So we need to get him off of the loan in the process,
and then we're transferring it to a personal loan.
And when she does that, if she wants to add a little something
to it, to get something in cash, that's fine.
But I think because of the nature of how much she owes on it,
she's probably, you know, she would end up basically
back in $20,000 of debt.
So I think the bigger part here is to get the brother off of it,
and then maybe, and I don't know what your lifestyle is,
but maybe that's the way you could help her out,
which is, hey, while you're saving up for your next vehicle,
I can help if you need a ride, you know,
in between the ubers that, in the bus rides that you'll be taking,
I can help with that.
Maybe that's something you can offer.
Yeah, and then we need a caution, mom.
You know, we're near buying a house, not even close.
Are you renting?
Is she renting now where you've been living with her?
Yeah.
Yeah, no.
She is not thinking about buying anything.
We got to get her healthy.
Do you feel like her long-term physical prognosis is good
or she can get back to work?
It's been better.
She's going to extend a little bit
because she's still in something.
So maybe by July, maybe she'll be.
What is she living off of?
Is there some type of a disability or insurance
that she's getting?
What's what's going on there?
Yes, she had taught me disability for a little bit,
and then she was pulling it,
pulling some out of her insurance.
I think life insurance?
Well, it makes you barred against that.
Oh, my gosh, mom.
Wow, okay.
Yeah, this is tough.
Tell me, and you can be vague,
but the nature of her injuries, how serious is this?
And how old is she?
Because I want to know really honestly
what she's going to be able to get back to doing work-wise.
It was pretty bad.
She got rear-ended while she was talking to that light.
And then she's around mid-50s.
So it's a pretty slow part of this recovery.
What was she doing beforehand?
What was her job and what was she earning?
She was doing a bunch of different things,
but at the time she was doing Uber as a psychic.
And then...
Okay, I think the ways that you can help her
are as following.
Help her get brother off the loan.
That's thing one.
Thing two is I want you to help her
with the career side of things.
We're gonna give you Ken's,
find the work you're wired to do assessment.
It's a book that'll help you
and there's an assessment inside.
Help her go through that
because it sounds like she needs to create stability
in her career or create a career
so that she can create stability.
And her finance is going forward.
I hope she's well, and I hope she recovers
very, very quickly.
And I would just add,
you siblings need to get together
and essentially fire this brother.
Yeah, from her life for a while.
Mm, mm.
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Alrighty, then.
Today's question comes from Nicholas in Illinois.
He says, since I discovered your show last year,
I've sold my truck and almost all my furniture.
I've worked three jobs, escaped $35,000 of debt,
and now have 15,000 sitting in the bank, well done, my man.
My mom wants me to open a credit card
so I can go to Italy with her to visit my sister
without losing any of my recent progress.
Wow, I have the money to pay my way,
but she's insistent on me getting a credit card.
How do I explain to her that although that seems
like a smart move, it's really not.
Nicholas, my guy, you haven't told us how old you are.
So I don't know if you're 18.
I don't know if you're 35.
I don't know how old you are, but the answer remains the same.
I don't think you have to explain anything to your mom,
nor listen to her advice.
I think you can very politely say, thank you for your insight
and move on.
Yeah, this is a very perspacacious young man.
I don't know if I said that right.
That's a word I received.
What are you trying to say?
He's very, he's got good insight.
He picked up on this temptation issue.
Perspacacious?
Yeah.
Have you ever heard that before?
I like a good word.
It's like one with keen insight.
Yes, it is.
So this guy gets it, right?
So mom is playing the emotional game, okay?
And she's going, okay, I'm so proud of you son.
You did a good job, but I don't want you to have to use any
of that cash.
So let's just go to Italy and she thinks he's getting ahead
and she doesn't understand that it's a millstone around his neck
and he gets it.
She's projecting her.
She's projecting her fears on him.
Here's what you say, mom, I'm sorry.
This is my money, my life.
I don't agree with you.
Like, I disagree.
This is hard for young people.
By the way, you know, certainly late teens, early 20s,
mom and dad have so much influence.
These, by the way, this is a kid who respects his mom.
Facts, yeah.
So a question about it.
And so it's very, very hard where when you,
in your beginning to strike out on your own,
he clearly has on some level, certainly has with his money.
And then a parent comes in and says, do something.
And again, whether it's money or something else
and a parent makes a strong suggestion, yes.
It's really hard to go against your instinct.
Your whole life, you've tried to say, yes,
so you don't get in trouble.
And now you're in a place where you go,
that doesn't make any sense.
And I'm not really going to get in trouble,
except for if I do what mom says,
I'm actually in financial trouble.
It's really confusing.
And so I'm kind of expanding this
to our very large audience on this
to say, hey, young people, look,
when you finally figure this stuff out
and you agree with what we teach,
at some point you're going to have to go,
thanks, I really appreciate your insight.
I disagree, I'm not going to do it.
Here's why.
Well, do you even have to?
And they comfortably walk away.
But here's my argument.
Do you even have to explain why?
That's my thing, because my-
You don't have to do it, but-
Yeah, that's a credit.
Very good point.
So my answer to that is, he doesn't have to,
but I think it's expedient to do so.
In other words, you can honor your parents
and still say no.
That's right.
And I think in this case, I'm always going to say,
honor them once.
If they keep coming back, go.
I'm not actually going to have this conversation.
Okay, let me crack the door open
on another piece of this puzzle.
And you've got two older boys.
So I think that you're the,
what was the word to use?
Perspecaceous?
Yes, very good.
You have a perspicacious-
Oh, you're really leaning in on my words.
I appreciate it.
I'm just trying to reuse it for you.
Okay, so you've got two older boys.
How much, and we don't know how old Nicholas is,
how much of this is due to oversharing?
Because I know I got to the point pretty early on
where for my parents to know how much money I have
that I sold my truck that I got 15,000 over here
that I don't have, like that's a lot for a parent to know
for an adult.
That's a really good question.
I don't know the answer.
Could be, and I think it's a very good point
to say, you know, if let's say he's in his early 20s,
yeah, he doesn't need to be sharing all that information.
If mom says, hey, we want you to go to Italy, he goes,
all right, let me check.
Let me see if I can do that.
And he says, yes, that's a very good point.
In other words, at some point,
you've got to create your own financial independence
by not sharing all that.
It's just your business.
It's a very good point.
I, you know, it's been a long time,
but I don't think when I went to college
and I started working,
did you share that I was sharing with my parents
how much I had in the bank account?
I definitely did not.
I might say something like, hey,
I'm thinking of getting a new car.
I have 10,000 to spend.
What do you think I should get?
Like I might say something like that.
But to just, for them to just know all my business out
in the streets, like this guy here, definitely not.
It's a very good point.
Create a boundary there.
Let's go to Grace in Atlanta, Georgia.
Grace, how can we help?
Hi, I'm 29 years old.
My husband is 30 and we've been going back and forth
on whether we are ready to buy a house or not.
He believes we should save more money
before we can put down 20%
and have plenty of emergency funds after that.
But I think we're ready.
And what is your financial position?
If you're ready, what do you have to put down?
I think we have the 20% down.
I think his biggest concern is that I bought a house
during COVID, but that house is currently being rented
and though the mortgage is being covered
plus a little bit more, I have felt.
Oh, he's worried about taking on two mortgages.
Absolutely.
And I agree with you.
Why wouldn't you get rid of your existing mortgage
and put that money towards the down payment
and security on your family home with him?
Well, because at the moment is being rented
and it has been for two or three years.
When's the lease?
I believe at the end of this year.
Okay, that's what I would mean yet.
I would move into that house.
You've already bought a home and you got renters
and you have basically dodged a major bullet thus far.
Sounds like.
In other words, you're barely making enough
to cover the mortgage, yes?
Oh, well, the, oh yes, I think I make like $300.
Okay, that's a whopping $3,600 a year.
Whoo, Grace, you're getting rich on that one
and that doesn't include your actual expenses on set house.
Which if you hold it long enough,
you hold it long enough,
you will end up going in the negative in one year,
maybe two consecutive years in a row.
I am not negative.
I am positive that will happen.
And so if it's me, I'm gonna move into this house
at the end of the year
and now we're building equity,
you're already building equity,
which is great, but now you live in it.
I would not buy another house.
Well, I want to know, I want to know
about that current house.
What is the mortgage on it?
What do you owe every month on it?
You were the renter.
So we haven't, so we currently,
we do not buy a second home.
We are wanting to buy a second home.
I don't understand.
I'm talking about the current rental.
What's the mortgage on it?
Oh, I have 200,000 left.
Great. What do you pay every month?
Every month, 1,200.
Okay. And what's you guys's income,
you and your husband?
I get 100,000 every year and the four taxes
and my husband makes 130 before.
Excellent. Okay.
So even if you, to Ken's point,
if you, you know, after the lease is up,
renters are out, you guys moved in
or if you wanted to sell it
and get something that suits you guys's needs,
I would 100% do that deal in two seconds.
How much is that house worth?
About 300, maybe 310.
Okay.
So you walk away with 110.
How much do you guys have saved right now
for a down payment?
I have 147,000, but that includes.
No, no, no, don't give me that.
How much do you have that set aside just for a down payment?
Just for down payment, I would say 47,000.
And my husband about 15,000.
Okay. So we're separate finances.
We don't have time to cover that one.
We'll talk about that later.
I think you guys either move into that house
or you sell it.
And now you guys have about 200 grand.
If I'm doing quick math or just under 200 grand
to put towards another home, that's the play.
Yeah.
Not keep both houses, not create another mortgage.
And then, you know, play this roulette game of land lording.
And just to set the record straight,
what you're aiming for more so than the 20% down,
what you're looking for is for that payment
to be no more than 25% of your take home fee all included.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
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Welcome back to the ramsy show in the Fairwinds Credit Union
studio.
I'm Ken Coleman-Jade Worshaw is alongside.
And Peter is on the line in Ottawa.
Peter, how can we help today?
Hi, how are you?
Good, how are you?
I'm doing fine, I'm doing fine.
I'm 23 years old.
And on time, I'd best manage a business.
And from seven, you know, trouble with it.
Well, actually, I'm having trouble with the decision
that I want to keep doing this.
Is it your business or are you managing it for someone else?
It's my dad's business that I've been managing hip
for like two years now, because he's not well.
OK, and so what is your dilemma?
I'm just stuck in a lot of debt that I don't know how to get out of.
And I don't know if I want to keep doing this.
The job.
On the other hand, I don't know what else I would do with myself.
OK, so I'm glad you share it that way.
So I'm going to do a quick analysis.
Tell me if I'm right.
It feels like our biggest problem is the 200,000 in debt.
The secondary problem is, I don't want to run my dad's company
the rest of my life.
That's the secondary problem.
Is that a good way of laying it out?
I do want to run it.
It's not that I don't want to run it, it is.
I don't know how to.
You don't know how to run it.
Yeah, because clearly I'm not doing that good of a job.
Oh, because it's a good self-awareness.
OK, and the company's not doing well?
It was up until my dad got really sick, like really, really sick.
And I had to take care of him for about two, three months.
And the company didn't run without me.
OK, and now where are we at?
We're at, I just had my warehouse closed out for three months
for non-payment of the rent.
And I just got it opened with some negotiation.
And how's our dad?
He's even better.
That's why I got back to it.
OK.
So that's part of my understanding.
But I'm leaning in here to say it sounds like you were doing OK
running it until you were the only caretaker or felt
you were the only caretaker for your dad.
And at which point you weren't doing hardly anything at all.
It doesn't sound like you were clueless
is that you were not present.
Is that true?
That is.
OK, so let me ask another question.
If you're back involved, and dad is not as sick,
and he might be well enough to guide you,
do you feel confident you can get this thing back on the tracks?
I am confident.
Is this a, I don't know how to put it on paper.
I don't know how to plan this.
You don't know how to plan.
And the reason I'm leaning into this is because this
is your sole source of income right now,
and you have a lot of debt.
So we got to figure out where you need to be spending your time
so you can make money because it's money and cutting.
And Jay's going to come in and walk you through where you're cutting.
But I'm trying to get an idea of what is before you
to where you can make money.
So one more follow up.
When you say you don't know how to put it on paper,
can you be specific?
What do you mean?
It's just how to manage the debt dynamic.
So I'm 200,000 total in debt, but 100,000 of it
is like a vendor debt, which I'm not worried about as I make orders.
I cut it in pieces.
Is any of this personal debt?
The other 100,000 is, it's not personal,
but it's like taken from family and friends.
OK, it's your debt, though.
It's not the company's debt.
It's not the company's debt.
It's my debt.
OK, and then the other 100,000 is the company debt.
It is not the company's debt here.
OK.
Well, OK, these are two different situations.
So that's a good for us to know.
What are you paying yourself for?
What are you getting paid?
Up until three months ago, I was paying myself enough to around 4,000 a month,
enough for my rent and expenses.
OK.
All right, I want to bring Jade in here because we got two lines of debt here.
One is the company's debt and one is your personal debt.
And that's where I don't know if it's, I'm sorry, but I don't know if it's going to be
different, but the 100,000 that's personal.
I took it to help the company.
I don't know if it's any different.
So you borrowed money from family and you personally borrowed the money from families
and friends to use that money for the business.
Yeah.
OK, so then it's all business debt.
I mean, OK, now we got it.
We get it.
It was all for the business.
Let me put it like that.
OK, so the only way to clear this is to bring in more revenue that can be converted
to using to pay off the debt, correct?
Correct.
So what do you see?
Do you see possibilities to do that?
I don't know what the nature of the business is.
What do you guys do?
It's a used clothing business.
I sort them into categories and ship them out of ship them out to Africa.
Oh my gosh.
It's in Africa.
OK, very interesting.
I know nothing about that world.
I'm going to tell you that straight up.
But I can tell you right here, the way to pay off debt is you have to have more money
coming in that can be used for that purpose.
So it goes back to Ken's question, which is, how suited do you feel to do that?
And more, the bigger question is, your 23, is this what you want to be doing with your life?
If not, we need to talk about that and how to offload this to the right person.
OK, the dilemma I'm in is I like to work.
I just don't like the stress.
OK, what's causing you the stress, the debt or the work?
The debt, the work, I'm good at the work.
I was working with my dad in high school.
So I'm fine with the work.
I was involved.
I was involved with it.
I know it inside and out.
OK, but let's go back and stuff.
Let's go back.
I appreciate that.
But let's go back and stuff.
You, at some point, needed to borrow, or you thought you did, rather let me stipulate.
You thought you needed to borrow $100,000 from family just to keep this thing afloat.
We're not even talking about the initial $100,000.
This company is not healthy, true or false.
Regardless of you being there and dad being there, somewhere along the line, this company
started taking on water in the form of debt because you didn't have enough revenue.
Am I right?
Yes, you are.
OK.
That would probably do to my bad decisions, but it is real.
Well, there's part of this.
I have just a logical technical question, really.
If you exit this business, if you say, you know what, I'm not suited for this.
I'm going on.
Will your dad and family view the $200,000 as money you personally need to pay back?
Or will they view it as that lives in the business?
And it's up to whoever or whatever goes on with the business to cover that.
How will they view it?
And how do you view it?
That's what I was thinking is the $100,000 that's personal.
That's going to stay with me regardless.
Even though it went to the business, just because you raised it.
That's going to.
Yeah.
Yeah.
The other $100,000, if I were to, you know, sell the business or other options, the vendor
debt is going to stay with the company.
See, I disagree with that.
If you are able to show the receipts, literally, of how that money was raised for the business,
I don't think that that's the case.
I don't think that that debt does follow you.
You're running this business and that's how you raise money right away, either way, my
friend, the only way out of those stresses, a lot of hustle and I, you're going to have
to get somebody else that helps dad.
You have gotten to take this company on your back, learn from your mistakes, go get some
advice from people in your world and you're going to have to take a real shot at this to
get this better.
But if in about three to six months, something doesn't turn around with your overactivity,
and we're going to have to shut it down, you got to know into hold them and know into
fold them.
Great song.
You should check it out.
I think it's a great lyric because I think this is your situation and you got to make
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Hi, yes, I was wondering if my husband and I can afford to buy a new model wine Tesla.
Okay, I like these questions.
Walk us through the potential doubt.
What would be causing a lack of certainty?
My husband thinks I'm being careless and not thinking about our retirement, but I think we
have more than enough for retirement.
And I think we're oversaving.
It's time for us to actually loosen up the belt a little bit and enjoy life.
I like the sound of that.
Tell us how much is your nest egg.
Okay, so right now we have over one million.
It's spread out between our 401, our raw, our brokerage account.
We also have 11,000 emergency fund, 20,000 right now that we already saved up because we're
planning to go to Europe to experience Christmas market this November.
We don't have any debt except for our mortgage.
That's we still owe 380,000.
Okay, the value of the home is 1.5.
Okay, we have we have lots of equity and then
and then right now and we still owe car car for we still owe about 15,000.
We have another model Y, but my son, he's driving soon and I want to give him the old model Y
and bias and new model Y.
Got you.
And when you said over 1 million, is it like 1.1 or is it like 1.8?
Like how much over 1 million?
So 700,000 for pre-tax 401k, we have 129 on our Roth.
We have 200,000 on our brokerage.
And then 11,000 rainy day fund and the 20,000 for the truck.
Okay, so here's where I'm at.
I think you've done extremely well and I want you to hear that first and foremost.
You guys have really set yourselves up.
How old are you?
We're 47.
47 excellent.
Good job.
Excellent.
I think that you could be in a better position before purchasing this vehicle.
How much does a model Y cost?
Right now it's only for it's 41.
41,000 and what's you guys' income?
280.
Okay, so my biggest, I mean the glaring thing here is
why haven't you paid off the first model?
Why it's 15,000 for crying out loud?
I think because he says because of the interest is low.
Oh, come on.
It's the money.
Just put it in your, you know, just just waxing out our retirement and our Roth
because right now the market is we get a
box 14 to like 18% returns.
So you're going to do you consider yourself Ramsey folk?
Like are you?
Are you?
No, I've been paying extra on my mortgage.
No.
Okay.
Take us back to the take us back to the show or the part in a Ramsey book where
where we would be okay with you not paying off the car.
I'm just curious.
Do you have a page number or an episode number?
I should reread the book again.
Yeah, you said we live by the note that except for more
Gage, but then spoiler alert.
It's not in there.
We're we're we're we're we're being hard on you, Diane.
No, I'm not.
I'm having a blast.
Well, my husband tells me what he wants to do is the 20,000 that we say that
for traveling is pay off the Tesla and we're not going to go traveling this year.
Okay, great.
I've been saving I've been saving for so long working over time to really go on that trip.
Well, here's the thing.
I think you can do I think you can do both.
Let me tell you how I think you can do both.
I think you have more money here than you think.
It's just how are we going to allocate it?
So let's go back to la la la la.
Okay, 20,000 saved cash over and above your emergency fund.
So yeah, let's say we take 15 of that.
We pay off the first model.
Why now we have 5,000 left and we keep that in our vacation fund 5,000.
By the way, how much is the vacation going to cost total?
15.
Okay, so we got 10 more to save.
Now tell me what do you guys bring in every single month again?
Take home 15,000, 15,000 a month.
And when is the vacate?
Yes, I'm planning November.
Thanksgiving.
Okay, got plenty of time to do that just out of your take home.
How much is your mortgage?
Payment, including taxes and insurance.
It's 2,900.
But where's the problem?
35.
There's no problem.
Here's what it is.
Here's I'm going to tell you what it is.
You guys have a very loose budget.
And so the 15,000 is going here.
It's going there.
It's, you know, you go out to eat.
You do a little of this, a little of that.
If you just got very intentional and said, okay,
and that before November, we need to save up $10,000,
making 15,000 a month and the only debt is your mortgage,
which is 2,000, should not be a problem at all.
The model right.
Oh, if we paid off the model right, I think it's okay.
Now when we start talking about the second model, why?
I don't know.
Is that, is that used or is that brand new,
the 41,000 that you quoted?
We're looking at brand new.
Okay.
What if you just said, hey,
instead of us taking the hit on an EV, by the way,
why not let somebody else take the hit
and buy one that's slightly used?
Sure, but I'm looking at the tax,
or the what I call that, the tax reduction.
If you, if you bought like no taxes on tax,
if you bought new cars made as a USA.
I don't even know, I'm going to be honest.
I don't know what you just said,
but all I'm thinking about is how you're going to be able
to have your vacation and your model,
why and not take a major hit on your used vehicle.
That's what I'm thinking.
Now you can go back into the math on whatever rebate it is
that you're talking about.
But in this position,
I would not advise you to buy this car
outright brand new in this position.
No, and I think the vacation's more important to you, isn't it?
Yes, I would like to build
good memories with my children while we're healthy.
Okay, now that's the mindset,
because I don't think you're going to listen to a word
we said about financial advice,
to be completely honest with you.
But if I can get through to you on this,
then I feel like I got a win for you.
So I think you've got to go, wait a second,
what's more important to me?
Because I can't do all three,
because I think you and your husband are on different pages.
Is that true or false?
Correct.
Okay, so.
Do you think since we hit our goal,
which, which was one time?
I think your husband's right.
I think your husband's right about everything,
except for the fact that he doesn't think you guys can save up
enough cash between now and November to cash flow the vacation.
That's where he's wrong,
but he's right on everything else.
So if I'm you and life is short,
that vacation is going to be something that you will look back on
the rest of your life,
you will not look back on this new model why.
Now you won't.
You just won't.
Because listen, I mean this.
This is not a disrespect.
Folks like you who love fancy technical cars
that drive themselves,
you get over cars like that because the newest models out.
Okay?
Guys like me, all I want are classic cars that no one can track
and they smell a little bit more than every other car.
And you feel every second of the road.
I don't give two craps about an electric car.
Never going to.
It doesn't feel like a car.
So here's the deal.
You buy that car and don't go on vacation.
You will regret that.
But if you cashflow your vacation,
pay off the model.
Why you won't have any regrets at all.
No, you may not believe me, but I'm right.
And that's the mindset.
Then what about what about for a car that my,
my son will should be.
I will be driving.
I think you can.
I think you can cash flow after you paid off.
I think you can cash flow.
Another vehicle, whether it's a model.
Why whatever another used to you,
but only secondary to funding that vacation.
Because the vacation is where your heart is at.
I think in the next 12 months,
you can do both.
Let me put it like that.
I think so too.
But vacation is the highest priority.
True or false?
Yes.
I really would like to go on Thanksgiving.
So then you got to give up.
So you got to, you got to get on hubs as page then.
And this is where we compromise.
And to Jade's point, you'll get your fancy electric car
down the road.
And let me also clarify.
Because how old is the boy?
The son?
He's turning 16.
Okay.
Can I just tell you you are the priority here,
my friend?
So if you pay off the model, why?
And it's not time for you to buy another one yet.
Guess who's driving it?
You.
That's a great.
You are driving.
It's your car.
He will be strong.
I drove a Fred Flintstone car when I was 16.
Like I had to stop the car with my own feet.
I had to accelerate by digging my heels in.
This kid doesn't need a model.
What are things?
I do have my old 2005 G30 car.
Great.
That my husband would like to get to myself.
But it has over 160,000 cars.
My car!
I drove a car that had 275,000 miles on it.
It was such a piece of crap.
Same car I'm talking about.
I can drive down the interstate and play tricks on my friends
by pulling the key out of the ignition while driving it.
Please, he can handle it.
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[♪ OUTRO MUSIC PLAYING [♪
All right folks, if you're debt-free,
the live like no one else cruises your chance to celebrate,
hang out with us in day for new sessions
on building wealth, live episodes of our shows,
and the world's largest debt-free scream.
I remember when they did it last year.
It was pretty wild.
And next thing I'm walking through the ship
and I was trying to get to at least one of the areas
and then there it is on the screen.
Dave is up there with the captain,
got the microphone.
You know, he looked like he was in charge of the ship.
Yeah, and everybody screamed at once.
Really, really fun.
And you could secure your cabin with a $600 deposit
and join us in the Western Caribbean March 2027.
Click the link in the show notes,
or go to RamseySolutions.com slash events
to book your cabin today.
All right, Jeff and Leonora are up in Pensacola, Florida.
And I screen tells me that you amazing people
are baby steps millionaires.
Is this true?
And that's just very true.
Wow.
Well, first of all, congratulations,
and welcome to the show.
Thanks for being with us.
Well, thank you.
Thank you.
We were actually on the show 10 years ago.
No way.
What for a debris screen?
No, I'm not.
We called it for the millionaire.
Okay.
And I called the day if I was retiring that year.
And he said, well, close back in 10 years.
And that's how you've been doing.
So we are 10 years later.
Oh, wow.
Well, that's fantastic.
All right.
Well, let's get some details here.
What is your net worth?
Well, you'd like to say it's an excess of $2 million.
You'd like to say, what does that mean?
Well, there may be a little bit more in there
that's promised to our endowment
to things like that that we don't really consider
our money anymore.
Okay.
I'm just going to play the place to be the way.
Okay.
So we, uh, we said $2 million
and our minds is our money.
Got it.
And what is the mix that creates the $2 million?
We have about a million six
and, uh,
missile funds and 401k's
and then, uh,
then, uh, real estate.
Uh, Jeff, I don't know what's going on with the phone here.
Uh, we're having a hard time understanding you.
Your phone's kind of coming in and out.
Oh, all right.
Well, um, you need to speak close.
So that's why there it is.
Leonora is on top of it.
That's great.
So 1.6 and mutual funds.
And what is the other 400,000?
The mortgage?
No, no, no, no.
It's real estate.
We don't, we don't carry mortgages.
We don't carry any debt whatsoever.
Right.
I mean, the equity.
Oh, gosh.
I'm going to say half a million dollars.
Okay.
An equity.
Perfect.
Fantastic.
And, uh, what is your income or what was your income?
Give us kind of your lowest income ever
and then what you guys may have finished out at your highest income.
Our lowest income ever was probably, uh,
30, 40,000, uh,
50, okay, um, and it grew to an average
between the both of us of, uh, I'd say 150, um,
towards the end of our saving years.
Okay.
Great.
And what did you guys do?
With both medical professionals,
I'm a trauma nurse and a paramedic
and my wife, Redara, uh,
she's a registered nurse.
Okay.
Wow.
Now, you're a director for years as well.
Oh, fantastic.
Okay.
And your age is right now.
I'm 68.
I'm 71.
Okay. Great.
And any of this money inherited at all?
No.
Uh-huh, the chuckle.
The knowing chuckle that we ask
just so people realize you can actually do this
without inheriting money.
Wow.
Really fun.
Uh, what would you say to young people, uh,
who, you know, are just getting started?
Maybe they're a young couple.
Maybe they're in, in the medical profession,
you know, and they, they don't,
they wonder, is this possible?
What would you tell them they need to do
to actually get where you guys are?
Well, I would say no amount is too small
to start saving and to clear all your debt.
My husband, that was his,
his clarion call, no debt.
And, um, and a lot of that, he,
he learned from Dave Ramsey
and, uh, and listening to him
and reading his books.
And we lived by that rule.
And, um, because we were,
we had lots of debt when we were young
when we were first married.
And, uh, very little, very little.
We pant the mouth, as they say.
But, uh, we just struggle to make sacrifices,
but you have to have your eyes on the prize.
And it wasn't always easy,
but it's without fail,
hard work, determination,
and commitment, uh, you can do anything.
I love it.
And we just saw an awesome picture of you too
on a cruise ship.
Uh, so what is describe what life is like now?
On the other side of all that hardship
and discipline that you talked about?
Well, basically right now, we still survive
just on our social security checks,
believe it or not.
Okay.
But everyone's in a while.
We splurge and we've splurged and turned up
about five cruisers this year.
That's awesome.
I'm sorry.
I said, that's incredible.
Yeah.
Yeah, we've been to the South Pacific
and Fiji and all those islands
and place it up there in Alaska
and a number of different destinations.
And, um, you know, so we're just,
we, we understand our mortality
to be in our ages that we got.
So we're going to spend a little bit of it.
Well, we're so proud.
You guys are heroes.
We're so proud of what you've accomplished.
That's awesome.
Jeff and Leonora.
Thank you so much.
Our baby steps and millionaires today.
Thanks for sharing your story.
I love it.
And there's so many young couples
that could aspire to that.
And here's the love about that, Jay.
You know, Leonora laid it out.
There wasn't any fancy strategy.
All right.
No, it was just gods and grandma's ways
of handling money.
The same theme that we've had
on this show for decades.
So thank you all again for sharing your story.
Really, really fun.
Let's go to Nick and San Francisco.
Nick, how can we help?
I'm doing great.
Thank you for taking my call.
Sure.
What's going on?
I live in California.
And as you can imagine,
housing is extremely expensive here.
And I was wondering if it makes sense
to buy a rental property
before buying like a primary property?
What would be the purpose of doing that first?
Is it a size issue?
Like, is it a rental is way smaller
than what you need?
But at least it gets you in the door.
What's the play here?
I mean, my my thought process is,
I mean, in my area, I'm looking at maybe 700,000
even more.
This is by a starter home.
When I was looking in other states,
the buy a rental home for, you know,
much cheaper, much, much cheaper.
And I was, I would be able to buy it out, right?
And I'm looking to make money off that.
What are you doing for a living right now?
Just renting somewhere?
I live in a rental apartment that's owned by my family.
And I pay about 600 a month,
that's plus utilities.
Do you have to live in your area
or are you able to work from anywhere?
I have to live in my area.
Okay.
Why would you think about buying a house out of state
and dealing with all that headache?
Is it, yeah, what do you think is going to happen?
You're going to turn a quick profit.
I'm still trying to understand.
No, I'm just looking, I mean,
I'm just looking for it like in the long term
to see if it makes sense.
I mean, I have money to buy a property.
How much?
And I have 300 to 350,000.
What do you make per year?
I make 130,000.
So help me understand.
You've got 350,000 to spend.
Something in your area would cost 700,
so you could essentially put half down.
I'm still trying to make sense of what
the out-of-state rental property would do for you.
I'm just sort of looking at the fact that,
I mean, I'm looking at the fact that property taxes
and insurance are much cheaper there.
And I'm just looking to see.
Well, are you moving there?
But is it for an investment?
No, you're not going to move.
Yeah, for an investment,
because I would invest that money.
I wouldn't buy a house.
I wouldn't buy real estate in another state.
If you're looking to earn quick compounding interest,
I would not invest in another property in another state.
I would simply drop it in an S&P 500 index fund
and let it sit for the next five years.
You're free.
And keep adding to it,
you know, and just kind of have a five-year horizon on this.
And before you know it, you'll have a 700,000-dollar property.
Hey, folks, if you heard about Ask Ramsey,
if you haven't, it's our free AI tool that's built and trained on proven Ramsey principles,
and today we're going to break down some of the most asked questions from this week.
There are some questions around life insurance.
But the most asked question was around retirement accounts,
rules and options for contributing to multiple types of accounts,
IRAs, 401Ks, 4 or 3Bs, TSPs, so many of the acronyms.
And the main question is, what are the best options for me
and in what order?
Okay, so again, this is two Ask Ramsey people are diving in there.
And so here we go.
Match beats Roth, beats traditional.
So the workplace match is first, right?
So whether that's traditional or Roth option, 15% up to the match.
That includes four or three Bs and TSPs.
Then you go next to Roth, whether that's an IRA or a 401K max that out.
And then back to the workplace option to finish out the 15%.
Taxable investment accounts should happen after the 15% if you want to invest more.
So Ask Ramsey can actually help walk you through what options work best for you in your specific situation.
And go today, ask your question at RamseySolutions.com or click the link
in the description if you're listening on podcast or YouTube.
So there it is, Ask Ramsey, just type it in and there it goes.
Tony is up next in Houston, Texas.
Tony, how can we help?
Hey, I can hear you loud and clear.
What's going on?
Hey, happy Friday.
So I'm in a situation where recently I recently got a good well-paying job right out of college.
But my family has some debts and they are asking me to pay the debts for.
What?
No.
Goodness gracious.
Hard pass.
So when you say you've got a good job with good money, tell us what that exactly what that means.
What are you doing and what do you earn?
Okay, so I'm a machine learning consultant or telecommunication company.
I'm earning 285K per year.
How do they know that?
And they know that.
You told them that information.
Oh boy.
That was a two jades point.
Jade, make a great point here and you made this point earlier.
So I got to follow up.
How soon did they ask or did they ask for you to help them with their debts come after
you told them about this new gig or were they already pressuring you?
No, they were not.
They were very supportive and I thought they would just be, you know, be like, yeah.
So once they found out about the new rays, they said help us.
Yeah, and that has three cars and he's asking me to pay all of them.
And I hear fund your sister's college too.
I see that on the screen.
What?
Yeah, yeah.
Let me tell you what I would tell them.
You want to make it 285 million?
I know.
What's 285 after taxes?
Does it take care of those problems?
Is this, can I ask straight up?
Is this anything culturally related that we need to know about?
Or is this just people who are off their rocker?
Well, I am Asian.
Is there an expectation for the sons to pay for the parents?
There's no expectation usually.
I mean, I thought, you know, we would be just dealing with our debts and things.
I'm like, obviously, like I'm open to helping them.
But there's nothing there is no tradition there that you feel like they are relying on that
you no longer believe it.
Do you see what I'm saying?
No, there's no tradition, no culture.
Okay.
So let me ask you a question, Tony.
Why do you call us?
Because when I immediately said no, you went.
So we want to help.
But why do you call?
How can we help you?
The thing is, I love my family and I currently live with them.
But the thing is, this situation is, and it really is taking a toll on my mental health.
Yeah, how can we help you?
I think you got to move out, Tony.
What's your question?
I kind of want to know your opinion.
Do you, would you, if you were in my shoes, would you just?
I would move out, Tony.
Tony, I would move out.
You are grown first off.
Money aside, what you make, career aside, you're grown.
So it's time to move out.
That's the one.
And not pay them a nickel.
And not pay them a nickel.
And thing too, by you moving out and separating yourself from their expectations,
you get to go home and eat a sandwich and not ever think about this again.
Work versus being in their house.
Like you said, every night at dinner, they're going to bring it up.
In the morning, you know, when your mom sees you before you go to work,
she's going to admit, right?
Do you see what I'm saying?
So you're keeping yourself in that, that guilt-ridden environment.
Take yourself out.
Remove yourself from the conversation.
Yeah, there is nothing.
For us to say, you will resent your family, the very family you love,
you will resent if you capitulate to their manipulation.
Don't do it.
It's, it's going to burn the bridge that I'm afraid of.
No, it's not.
You, you will not, here's the thing.
I know I just got very hot-handed, very, very quickly.
You are not burning the bridge, Tony.
There is absolutely nothing wrong with saying,
I went to school.
I earned this income.
This is my life.
There is nothing stopping sister from doing the same.
And mom and dad, it's never been my responsibility to pay off your mortgage.
Re-cars.
And that's where I stand.
That is the, the barrier and the, the boundary that I'm putting in place.
I really hope you guys can understand that because that is perfectly logical.
And it makes perfect sense.
Period.
You're done.
And if it burns the bridge, that's on them.
You can't do anything about this.
I feel for you, but only to a degree.
Because I'm telling you, we, see,
Jay and I are sitting in the inviable position of not having any emotion attached to this.
That's right.
In our audience, we got people in the lobby.
They're shaking their head.
No, Tony, no.
Because we aren't attached to this.
And so none of us have the fear.
And I honestly think that the best thing you can do in a situation like this
is call family members' bluffs.
Yes.
Call their bluff.
And so move out today.
Don't pay them a nickel.
Tell them why.
Tell them you're happy to guide them on, on what they should be doing
if they're willing to listen.
But absolutely not.
And, and I'm sorry, we got to cut it there.
I love that you say go home and say, what kind of sandwich?
For, you know, up on me.
I don't even know.
See, what you're so fancy.
It's like a nice.
Nobody in America knows what you're talking about.
Like a nice bun.
And there's like pork and like,
greens.
Bon me.
Anybody?
You guys know what that is?
Bon me.
Bon me.
Hell he does.
Yeah.
And there's like, like nice mayonnaise in there.
Barbecue sandwich.
I don't know.
It's Vietnamese.
It's delicious.
Or.
Boy, I got to tell you, this is exciting.
Now I'm glad I asked.
Because now I have a new sandwich I need to try.
Or you could do maybe he's eating a BLT,
like just a bacon lettuce tomato.
Well, you know, I ask.
Because this is tough emotionally.
I'm having a little fun.
But I love how you kind of say good.
And I actually think when you take a decision like this
and take a stand, you need to emotionally eat.
And I'm 100%.
You know what my emotional go-to sandwich.
Tell me right now.
PB&J.
Oh, really?
And I'm going to chase it with a glass of milk.
Like I'm 10 years old.
I know you hate milk.
But I'm just saying.
PB&J.
Listen, Stacey ain't coming anywhere near that mouth
after peanut butter and milk.
Get out of here.
What are you talking about?
So judgmental.
I'm just looking out for Stacey in all of this.
That's all.
All right, America.
You guys can comment what's your favorite emotional sandwich?
You're going to go with the BLT.
BLT.
BLT.
Kelly the producer.
Let's get Kelly the producer in here.
What's your go-to emotional sandwich?
You've had a rough day
and you're going to eat a sandwich to feel better.
What is it?
Turkey with bacon for sure.
Extra crispy.
Oh, I like that.
Any condiments?
Homemade ranch.
Ooh.
Always with the homemade ranch.
Honorable mention.
Meatball sub.
Okay.
Okay, I feel like that's pizza.
Uh, I'm not sure if that's a sandwich.
I think that's pizza.
I think it's pizza.
Do you know what I mean?
You just...
You don't think so.
You think that meatball is a sandwich?
I'm flabbergasted that you would not call
a meatball sub a sandwich.
Flabbergasted.
Hey, it's got the sauce.
It's got the cheese.
You're putting cheese on it?
Absolutely.
Not to relic.
It's a meat.
It's a meat pizza.
It's it's all that is.
Oh, wow.
You know what I mean?
It's the same.
It's got all the same ingredients.
It's on a bun versus like a sandwich.
I'll tell you what I'm going to.
A Philly Philly cheese.
Hey, okay.
Now listen.
Now you're about some business.
Yeah.
Now you're talking about some business.
I need the Philly.
You know what I mean?
Yeah.
Yeah.
That's what I need.
That's good.
Need that.
Need that protein.
The extra cheese.
Some pepper.
The pepper.
The deal with all my emotions.
I like that.
All right.
There you go, folks.
Emotional eating is what we're suggesting.
This is what people come for.
A great life advice.
And then a good conversation about a sandwich.
With a side of homemade ranch.
Way to go, Kelly.
Welcome back to the Ramsey show in the fair winds credit
union studio alongside Jade Warsaw.
I'm Ken Coleman.
Thank you for being with us.
The phone number to jump in.
It's AAA 825-5-225.
AAA 825-5-225.
Huntsville, Alabama is where Denise is waiting.
Denise, how can we help?
Hey, thank you, boss, for taking my call.
I appreciate it.
You bet.
Here's the, here's the sort of it.
I'm 54 years old.
I've been a widow twice.
Oh my god.
And I have no retirement saved.
And my income does not, it doesn't cover my expenses.
I had credit card debt.
And I got, I ended up having to call a national debt recovery
to turn those over to them.
And it wasn't even a lot of debt.
It was just $10,000 that me and my past husband
had incurred paying his medical bills.
So after he died, it left me with that debt.
And I had one income instead of two.
So I went ahead and turned those over.
And I just recently paid one of the smaller credit cards
that I just refused to turn over.
I paid it off.
I don't have a lot of debt, but it doesn't.
I'm just not able to pay my bills.
And I've sold everything that I could sell that I can live without.
My downsize, I got rid of the truck and downsize to an economical little
Mazda 3 that I drive to work, worked 45 minutes away.
Okay.
What do you make?
I make $16 an hour.
So I ended up going home, depending on the week.
It's anywhere from 1,500 to 1,000.
Okay.
Every two weeks.
And the little Mazda 3, is that paid for?
It is actually not paid for yet.
I still owe like 2,500 on it.
And I only bought it for 4,000.
It's got 200,000 miles on it.
But it's a decent good card.
What do you do for a living?
I am a front desk.
I take copays, collect, I work for doctors office basically.
Okay, gotcha.
Okay, can you walk us through your debt?
The remaining debt you have, go smallest to largest.
Smallest to largest.
Smallest would be, it can I just go down the list the way I had wrote that.
Sure, sure.
Yeah, yeah, yeah, go ahead.
I'm sorry.
The house is $800 a month and I still owe $124,000 on it.
Okay.
I don't think I could rent cheaper, the payments are $800.
No, no, no.
I don't even think I could rent cheaper than that.
No, you can't.
You're doing good there.
The health insurance, I don't have to go through the market.
And it's for me and my child, it's $50 a month.
Well, I don't need your monthly bills.
I just want to know your debts.
Oh, my debt.
I'm sorry.
Okay, that's all, that's all fine.
What I have left in debt is the car, which is about it, $2,500.
And I already got rid of the credit card, the other credit card.
But then I have that $10,000 that I've turned over to the national debt recovery.
Okay, that's actively being,
they're actively covering that.
Yeah, they take $100, they just started after Thanksgiving last year.
They start, they take $150 out of every paycheck for 29 months.
Oh, boy, can you, can you get out of that?
What's the penalty for counseling that I want?
I'm actually not sure.
I want you to check into that.
Okay, you, you might be on the hook for some fees.
But all they're going to do is stack those $150 payments off to the side.
And they're going to let this default.
And then they're going to try to make a deal.
That's what they're going to do.
And that's honestly something that you could do yourself if you chose to do.
But I don't know that you need to do that just yet.
That's going to tank your credit.
It's not good.
And like I said, there's usually a good amount of fees attached to that.
So I would, if you can get out of that,
and it's reasonable, I don't know how much you've already paid in.
But I would get out of that pretty much immediately.
So after the car, the $2,500 and after this $10,000, is there anything left?
Is there any other debt?
No.
No student loans, no nothing like that.
Okay, so the good news is, the good news is your mortgage is awesome.
The $800 a month you're right.
You can't rent cheaper than that.
And the good news is you've got $12,500 of debt,
which under the circumstances, I don't know why I was expecting,
but I thought it was going to be a lot more.
Now, the problem is, if you have a month-to-month income issue,
and there's no margin, that $12,500 of debt feels like a mountain
just because you're struggling to eat, right?
Yeah, I want you to, so let's dive in with Jay.
Jayde's the budget queen.
Give us, what do you think you're spending too much money?
That's just it, and I don't know.
I've went through...
Let's look at it.
You make $3,000 a month, give or take, right?
Yes, right and less than that, actually.
It's more like,
and I work two jobs, so it's more like, I mean, this is like a job.
It's about $2,500 a month.
Then it's an income crisis.
It's what you have, because no matter what you do,
that $2,500 is not going to feel like enough.
It's very hard to live on that.
You're working two jobs.
I only heard the one job that's $16 an hour.
I do the $16 an hour, and then the same company that you asked me
if I would clean your office for $120 every Friday.
Okay, so that's after hours, that's the second job.
Yes.
But none of them are 40 hours a week.
The $16 an hour job is 40 hours a week,
and they let me work over all the time to try to help me.
Well, that's good news.
I mean, I feel like all I do is work.
I go in at eight, and I don't get home till soon.
I know, but I think we need to get you a higher hourly.
That's the part I do.
I think that's the transition.
But I also...
I believe, if you'll let Jade walk you through this here
for a couple of minutes, a lot of detail,
I gotta believe there's some budgeting issues going on.
Yeah, let's try to find it.
So after, let's say you were making $2,500 after the $800,
that leaves you with $1,700.
Then you said for each you and your daughter,
did you say it's $50 bucks a month for health insurance?
Yep.
So $100 total?
It's $50 a month.
Okay, both of us.
Both of us are in there for $25 a person.
Oh, okay.
So that takes us down to $1,600 or $1,650.
What next?
What else?
The water is $35.
Uh-huh.
What else?
180.
Okay.
Progressive car insurance is a hundred.
Okay.
I have a woman Gerber life insurance is that my mother got on me
that if I pass away, it gives my child $10,000 to bury me.
It's $7 a month.
Okay, we're going to cancel that immediately,
but it's $7.
Okay, what else?
And then, of course, now I have the new national
debt relief of 100 feet.
One penny out of every penny.
Okay, fine, what else?
Cell phones are 90.
Okay.
Do you do like a consumer cellular or who are you with?
We're with cricket.
Okay.
Okay.
Good.
Next.
That's just for two phones.
Internet's 90.
And then I have a life insurance that I've
that since both husbands passed away and left me with nothing,
I couldn't even hardly bury them.
I didn't want to leave my child like that.
So I took out a life insurance plan of $250,000.
Free.
And I pay $6 for me.
Is it term life?
Did you do it through Zander?
Yeah.
I did it through shield.
Okay, I want you to call up Zander and check it through with them
and make sure it's the best possible option.
If not, you might be able to pay a little less because you said
you're paying $2.48 a month or a quarter.
I pay $69 every three months.
Okay.
Okay.
$2.54 a year.
Okay.
We got about 40 seconds.
Right now, I'm seeing you with $900 extra dollars.
So what are you spending on food?
We don't.
I'm honest.
We spend something.
If I have a little bit left over, we spend about $100 and 10
if we have anything left over.
Okay.
So that leaves me on my checklist here.
That means you got $830 some dollars to spare.
We're going to give you every dollar and you're going to plug this in
and you're going to do just what I walked through with you
every single item.
That money is draining somewhere
and you don't have the margin for any drains right now.
And I believe that you do need to find something
that's going to pay you on a higher hourly rate than $16 an hour.
That is where your primary struggle is.
You're not going to be able to side hustle your way out of that low core income.
Hey guys, George Campbell here.
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and not what you actually need?
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Riley is up in Chicago.
Riley, how can we help?
Hi, thank you for having me on the show.
I'm 28.
My wife is 32.
She's been married for five months now.
We're moving.
We currently have about $100,000 equity in our current home
and kind of wondering what we should do with that equity,
whether we should just roll it into the next house,
pay off a debt, and then use the remainder as a down payment,
or pay off debt, and then do some remodeling on our new home.
Oh, I love this idea.
So, $100,000 in the equity, how much debt do you guys have?
So, I currently have no debt.
I'm 100% debt-free.
My wife has about $70,000.
She has a car loan for $10,000.
A personal loan that she got to remodel
the house that we're currently in,
and that's for $10,000.
And then about $50,000 in student loans.
Okay.
Okay.
So, yeah, I like the idea
of since you guys happen to be moving,
you have this equity,
and you are newlyweds,
so it's really a fresh start.
I like the idea of taking that $100,000,
taking 70 of it to pay off
the existing debt between the two of you.
And then what I would do with the $30,000 is I'd say,
how much of this 30 constitutes
three to six months of expenses for us?
What would you say?
Well, if the new house and everything
would probably be close to
$10,000 to $12,000 probably.
Okay. So, we'll say maybe half,
to be fair.
And so, that leaves you with $15,000.
Now, the question is,
does that leave you with enough of a
down payment for a new house?
Or what would you do?
Yeah. So, I have,
we have $80,000 cash in the bank
that we're going to use
for a down payment already.
Okay. So, you could add the other $15,
with that cash and have $95.
Yep.
Okay. It does, now,
if you put the $95 down,
does that get you where you want to be
mortgage payment-wise?
Yeah. So, we're going to do a 15-year mortgage.
And that gets us,
it's like, I think,
went to the math like 27% of our monthly income
would be able to mortgage.
And that would be everything
in escrow, property taxes, all that.
I love that. I'm okay.
I'm not going to split hairs on that.
I love that for you guys.
And then,
how quickly could you then,
I mean, it sounds like there might be work
to do on this house,
because you mentioned renovations?
Yeah. We kind of just want to do
a kitchen remodel on the house,
and then everything else is
we can kind of just do as we go.
But the house is moving ready right now.
How quickly could you save up
to do that Renault in cash?
Probably a year.
I've over time opportunities at work,
so it's easy for me to come up
with extra cash if I need it.
Listen, you are at very analytical,
very logical.
This is easy.
This is the easiest call I've had all day.
Thank you.
Well, there's no argument.
I do have a question
of the way you worded things.
Do you two have separate finances?
It doesn't sound like it,
but the way you said it earlier,
it did sound like.
Yes, and no.
Like we're kind of,
we're slowly combining our finances.
I guess the way we have a setup now is
out of our paycheck,
we put, you know,
a certain amount into a shared account,
and then all of our household income,
vacations, food,
all of our living expenses comes out of that.
And then we have our separate money for,
you know, if I want to
buy a toy or whatever,
you know, like a four-wheelers
don't build something like that
or if she wants to do her air,
whatever it is,
then she can do that with.
Can I suggest a tweak to that?
Where you guys still have that
personal autonomy?
What if you put,
what if you put all the money in one account,
all of it?
And then on the budget,
you designated amounts of money,
like equal amounts of money for you
to spend how you want
and equal amounts of money
for her to spend how she wants.
Okay.
I mean, yeah, basically the same,
just a little bit.
Yeah, it's just creating.
It's creating.
I don't know if you've,
how long you've listened to the show,
but I can tell you just today,
we've had two calls
where because the spouses,
they had separate accounts,
it kind of created this feeling,
it created this feeling
that I can kind of do what I want over here
and I don't have to tell my spouse.
And over time,
things were done that felt like
it was crossing the line for the other spouse.
So what happened?
So do you know what I mean?
So putting it in one account says,
hey, this really is our money
and I know and I'm just making up numbers here
and I know that I have $500 out of that
that I spend on what I want
and she has $500 out of that
that she spends on what she wants.
And then from there on,
now you've created transparency
and so for instance, for my husband and I,
I'll be honest,
I rarely am like,
what'd you spend your money on?
I don't care.
Every once in a while,
it just comes up and he's like,
oh, I bought this new thing and I'm like,
oh, great, and the assumption is
and I know, oh, that's what he spent his money on.
But do you see what I'm saying there?
Yeah, it makes it more of,
yeah, instead of,
it makes it more of our money
than the whole pot.
There you go, honey.
Yes, this is the easiest call.
Your wife,
good, wonderful, she,
no arguments.
Yeah, and yeah, and Riley,
you guys got it together.
But just to really put a pin in all this,
the hour,
there's a real powerful
emotion of unity
when we talk about hour.
And by the way, the data bears it out.
Yeah, absolutely.
So I don't need to get on a pulpit on that one today.
Evan is up in Roanoke,
Virginia.
I know where that is.
Evan, how can we help?
Hey, thanks for taking my call.
You guys are my favorites.
When you guys are together,
it's one of my favorite combinations.
That's a very nice,
we just high-fived Evan in honor of you
thank you very much.
I am, we're in FU week number five.
Wow.
All right, did you cut out, Evan?
Uh-oh.
I think our high five slapped him, so
okay, we'll see if we can get Evan back
in the meantime.
Let's go to Robert in Daytona, Florida.
Robert, how can we help?
Hey, how you doing?
Good.
We're, you know what, we're having a blast.
What's going on with you today?
So, I have a little bit of a strange little question here
and I career change.
I'm kind of curious as to how to transfer careers.
I'm kind of on the top of my career right now,
so I'm making the most amount of money that I can right now.
But if I'll be switching to the second career,
I'll be staying all the way down on the bottom.
I'm making about 125 right now.
My wife is making about 35.
If I switch careers, I'm,
I'm going to be dropped to about $25,000 a year.
Doing what?
Whoa.
Well, I'm, I'm, I'm a mechanic right now
when I'm looking at flight instruction.
I'm, I'm going into aviation.
Okay.
Well, could you even do that?
Is it even possible if you set your life up
to where you can take that big of a hit?
I spend $65,000 worth of training so far.
I didn't ask you that.
I asked you because I understand I've
taken this call many, many times
because pilot, the schooling is outrageous
and they can just charge through the absolute teeth on this.
So is there not a way to be more patient
and save, save, save
so that we're, we're not taking a big hit here
because dropping from 135 to 25,
the question I have, we have a limited time.
Is your life set up to where you can take that big of a hit?
A hundred thousand dollar hit and not be starving?
Yes or no?
Well, that's kind of what I'm calling.
I have about, we have, we have about 20,000 in savings.
That's not enough.
And we have about 15,000 in like,
investments.
That's not enough.
What matters is your month to month
if you can eat every month
on what you bring home.
Between me and my wife is going to be really, really close.
I mean, you're going to be down to 55,000.
So what you need to do tonight is a mock budget.
So what is that going to look like?
3700 a month?
How long is the program?
I'm already old taught and everything.
I have enough hours to start my career.
Okay, well, how long then will you be making 25,000?
It's a very good question.
A year, two.
You better get the answer to that.
And then you do what Jade's talking about.
Yeah, this is all about numbers meeting up with calendars.
So if I'm going to make that for one to two years,
I need to know, is that the gospel truth?
What is the range?
One year, two year.
It could be anywhere there.
Okay, great.
Now that's 25,000.
So how much money do we have to save up before I take that role?
And you may have to press pause, Robert.
It sucks.
You have to press pause of going into that.
Until we have the money saved up to make up the difference.
That will determine whether or not you can do it.
Do I have the cash to make her for the shortfall?
Really simple.
Starts with a budget first.
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All right.
We've got on the debt-free stage in the lobby here at Ramsey Solutions.
Alvaro, did I say that right?
Absolutely.
Fantastic.
Welcome, and you're here to do your debt-free screen, I guess.
I am.
All right, let's go.
Let's get the details.
All right, how much debt?
It was $90,493.
Okay, and how long?
It took 20 months.
20 months, okay, and what was the range of income?
I started at 73,000, and currently I'm at 92,000.
Way to go.
What led to that?
I'm an occupational therapist, and I did a lot of side hustles in the meantime.
I tutored, repaired glass for phones, dogwalked.
You name it, I did it.
Love that.
What kind of debt was it?
All student loans.
Hey, okay, okay, very fun.
Okay, so what happened 20 months ago?
I graduated from grad school, and I saw the bill,
and I started seeing how much interest was going to accrue.
And I did the calculations, and in interest, if I did the 20-year plan,
it was going to be $75,000 extra on top of the student loans.
So essentially, they would have doubled.
Right.
So I was like, I can't do that.
And during this time, it was, I was having no interest accrued,
so I was like, I got to go at it, I got to go pound.
So I made a deal with my parents, and I asked them,
hey, can I live at home for a year?
You guys don't charge me rent, but after that,
you can charge me double rent of whatever you wanted,
so I can aggressively go at this.
So they helped me through this journey.
And then after that, they saw how aggressively I was going at it,
that I wasn't going out, I was doing what I needed to,
and they're like, we're going to let you finish off your student loans,
and then after that they dropped the double rent.
They did.
Nice.
Just the 20 months.
That's great.
So here we are.
So, okay, give us an average, or if you know the exact amount
of what you were paying monthly to get their 90K and 20 months,
I can do an average, but I wonder, was it that clean
where there's certain months over the 20 months
where you were able to put more?
What did it end up looking like each month?
Pain off debt.
It was about 5,000 a month, 5,000 plus.
And what was your take home?
It wasn't much.
It was like 55, 5,600.
Wow.
And those were basic things of like, I'm going to help with the groceries,
I'm going to get gas.
And the biggest goal was my side house was to pay like the principle,
but then after that, my main job was really just get after it,
because I knew that was the biggest way.
Yeah.
I love this.
This right here is a gleaming example of when it makes sense,
and how to do the, I'm going to live at home for a little while
to get this debt paid off.
Excellent.
Well done.
Wow.
So what was the hardest part?
I mean, obviously, you're seeing your money go out the door
and you're living at mom's house.
What else was hard?
Being able to, or finding the courage to delay gratification
and saying no, saying no to a lot of things I wanted to do
that in the moment, I was like, I'm looking at the future,
I'm looking to see what I can accomplish later,
because right now it does stink,
but in the future, I know it's going to be so worth it.
And it has been.
So the keeping, understanding the logical part,
yeah, you know what I have to do,
but keeping the promise to yourself is the hardest part.
Absolutely.
Wow.
So here's my thing.
I have, you know, I'm on social media.
I hear people talking all the time.
And when you mention paying off student loans,
the automatic mindset is that's impossible.
I want you to talk to, because how old are you?
30.
30.
I want you to talk to the 27-year-old,
the 30-year-old who just finished grad school,
just finished undergrad, and is like,
yeah, I'm just going to kick the can down the road forever.
I haven't even calculated the interest.
They just need to do it.
It's a mindset, it's an mentality,
and it really does spread into every aspect of life.
Your work.
The way you decide to go about having friends,
like those intentional relationships
and those intentional things that you choose to do in life,
they carry on.
So that's why this was so important to me,
because I knew that if I can be dedicated
as I have been in the gym,
or in my nutrition, or whatever aspect that might be,
it carries out into being just a better person,
and you being able to portray that in your personality,
and whatever encounters you have.
Oh, you have figured out...
You have unlocked something so important.
You have figured out that discipline begets discipline.
And so...
Absolutely.
Yes, have you always been that way,
or did you develop it as a result of the urgency
with this process?
The differences of life definitely led me that way.
I was growing up being an athlete,
and then I got to school.
Stop doing that for a little bit,
but then I found that purpose.
And once you find that purpose,
and you know what you're looking for,
and what you want to be, there's no stopping you.
That's right.
At what point, after you're paying 5,000 a month,
does this go from being,
I can't believe I'm doing this too.
Look at what I'm doing.
Was there an emotional shift,
if you understand what I'm asking?
Oh, yeah.
It's really like a countdown,
because I started with 90,000,
so it was like, I started at nine,
and then we get to eight, seven, six,
all the way down.
And once we get to that final zero,
and you're just on the bare minimum,
thousands, it's like, it's common.
It's going.
I love everything about this.
Yeah, I do.
So 30 years of age, okay.
And now you're on the other side of this.
Yeah.
How has it changed your perspective
looking forward?
Because you're a young man.
Yeah.
Uh, it's a great feeling,
because I bought my Beyoncé ring,
paid for any cash.
Oh, we see it over there.
Okay, hold it up there,
so we can get, there we go.
I love it.
I need some sunglasses.
And then on top of that,
it's just like, I have no fear.
Like, Ken, thank you so much for just what you do,
because because of you,
I was able to leave a toxic work environment
and just feel proud of being able to work
and do what I do,
and I have passion behind it.
Oh, and then there was a quote
that Jade once said with Dave,
receipt, he's coming with receipts.
I love it.
She said with Dave,
weird, is being independent in a culture
that teaches you to be dependent.
And that hit me,
because it really does.
And when you're that free,
independent,
knowing that, hey,
I need a day off tomorrow.
And I can take that.
There's no greater feeling and no greater power
knowing that you did that to yourself
and you can't do that.
Yeah, autonomy.
I am, I am overwhelmed.
You've done such a fantastic job.
And you dropped a,
you dropped a major key.
I don't know if people were listening,
because you know, people are going to listen
to this and be inspired by what you're saying.
There is a great motivation tactic
that you shared,
which is when you have an even,
like a nice countable number,
like 5,000,
or 10,000, right?
It makes it easier to see that number go down
in a pattern that is motivating to us.
So, a little major key there.
I'm proud of you. What happens next?
Life, I started my own business
for occupational therapy.
I'm a mobile practice.
So just going now,
being able to give people the treatments
that they desperately need
and not having to rely on insurance
or anything along those lines,
because I want to give people the opportunity
to live their life and be able to regain all functions.
All right, hold on, let's not.
That, if I heard you right.
Fabulous.
So are you doing a, like, old-school,
like, cash for your business?
No insurance filing at all.
That's the goal, but, you know,
there's stipulations in everything,
but that's my goal.
Yeah, and is that,
you're basically like, okay,
this gets you this,
and you kind of lay it out like a menu,
so people know.
All of a cart.
I gotta say, I just,
I don't want to go on a rabbit trail,
but this to me is the future of personal medicine.
100%.
I agree.
I think it should be.
But I digress,
but I'm proud of you starting your business.
Okay, so obviously,
your level of fiancee is here.
Who else,
long-sighted her,
walked through this with you
and were your biggest fans?
Honestly, it was a lot of self,
it was a journey by myself for the most part.
There's not a lot of people
that really helped me,
but there's a lot of wisdom
that was passed on from,
because when I first got out,
it was, I always asked,
like, what did you guys follow?
How do I do this?
And it was always the older generation
that helped me and said,
hey, listen to this,
listen to this guy.
And it just helped.
It helped tremendously.
The world's story hang around older people.
I was just thinking the same thing.
It's good to be old.
It's awesome.
All right, this is fun.
Are you ready?
Yeah. Okay, here we go.
We got Alvaro from Dallas, Texas.
He paid off 90,000 plus
in 20 months,
making from 73,000,
all the way up to 92,000
and all those other jobs,
Alvaro, it's your moment.
Let's hear your death free screen.
Thank you, Lord.
I'm debt free.
Hey, hey, hey.
You didn't even need a count.
No, count down.
Just a thank you word, which I can turn.
Yeah. Kind of like that.
Put his own stamp on it.
I'm gonna go, I'm gonna let him know.
I'm gonna go out on a limb and say,
that's one of the goats of debt free screens.
That's all, that's a goat, that's a goat render.
Now that's a fun game
for hardcore ramsy fans,
like, do they have their top five debt free screens?
That's a goat.
You're saying it's in the top five?
Yes, because why?
He's young.
Two, he figured out the whole live at home thing
and did it flawlessly.
Number two, he started a business of his own.
Number three, he understood a major principle,
which is it's not just about paying off the debt.
It's about when you have discipline
and when you have freedom in one area of your life
and you've mastered it,
you have to let it go into the other areas.
You don't just get thin and get your body, right?
Now you do that in your spiritual life
and now you do it in your marriage
and now you do it with your money.
He understands that.
You can't stop Alvaro.
I'm telling you that right now.
I got to tell you, pal,
you got my co-host fired up.
She could run through a wall right now.
I better go open the door.
We're going to go out and see him and celebrate with him.
How many times have you started January saying,
this is the year I'm finally going to get my money under control?
But then months go by and you still feel broke.
You work too hard to keep living like that.
Look, there's only one way to move the needle
on your finances this year.
You've got to have a plan.
So start by downloading every dollar.
Every dollar is way more than our world class budgeting app.
In 15 minutes we'll build you a personalized plan
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Mmm.
I can see if I can finish the show with all of the plug-in stuff.
This is perfect.
Our scripture of the day comes from Psalm 20 verse 4.
Let God grant what is in your heart
and fulfill all your plans.
Our quote today from John Maxwell, the reality is
that you will never get much done unless you go ahead
and do it before you are ready.
Alrighty, there's a word.
All right, Evan, we got him back, hopefully.
In Roanoke.
Evan, do we have you here?
I'm here.
Thank you guys for giving me my call again.
Hey, it's okay.
We were worried about you, man.
We didn't know what happened.
So we're glad to have you back.
My wife, my wife told him the driveway
and the blue tooth picked up in her car.
Oh, no.
So dad happens to meet all the time.
Yeah, it's really irritating.
All right, what's going on?
So we are in FPU week number five.
So we're just starting going through the, you know,
but we are on baby step two.
And I have a question about possibly,
do we need to go back to baby step one and reevaluate it?
Because as a backstory, we have two small businesses
that we run, I do a cabinet business
and she does horseback riding lessons.
And we have 15 acres and 11 horses.
And our income last year after all expenses was 130.
And we have $1,000 set aside.
But my question is given that something
could come up with a horse that would be, you know,
possibly $10,000 if a pervete though,
what should we hold and reserve for that?
For emergencies like that in this situation?
Well, first you need to separate it
from your personal monies.
So if these are two separate businesses,
there's got to be a line item in her business budget
that when she brings her revenues in,
some of her expenses, some of her money
goes toward creating retained earnings
or like a stock pile of cash.
Basically an emergency fund for her business.
So that's going to be something she needs to build in.
That's reasonable to the work that she does.
And that's something that you need to build into yours
as well.
And that happens before you guys take your payrolls.
Does that make sense?
So it's not going to be part of your normal every dollar budget.
That's going to be part of her business
building over here to the side.
OK.
So personally, we should just keep it at 1,000 personally.
And then on the business side, like realistically,
how much should, following these principles,
because obviously, my business is about 18 months old.
And hers is like three or four years old.
So she's in the, my portion of it was 85 last year.
And she was at 49.
And so as far as operating under the under-ranely principles,
how much should we hold and reserve for our businesses?
And because we're paying ourselves the profits.
And so how long do you hold and reserve on this business?
I would probably say somewhere around three to six months
of operating expenses for you both
is what I'd be looking to do.
Now, for her, she's going to have to figure out what that is.
I'm not sure that she has an accurate picture.
Based on the fact that there's nothing held aside,
I don't think you guys have an accurate picture
of what salary you can actually pull.
Because that's a significant amount of money
that needs to be budgeted for every single month out
of her budget.
Does that make sense?
It does.
And we do have separate, like every, every, you know,
we have a personal and then two business accounts.
And her, her gross last year, you know,
just because the overhead on horses is a lot.
So her gross was 2.6.
And her net was, was 49.
My gross was, yeah, my gross was, was 210.
And my net was 84.
Yeah, I mean, I, I think just the nature of the business
that she does, because it's live animals
and it's horses specifically.
I mean, I think that's always going to be the case
that her spend is going to be higher.
But my point is, I think this can continue to go.
But the biggest takeaway for you is to go, okay,
the, the money for her business overhead
is not coming out of our personal budget.
It's coming out of her, the P&L for her business.
Does that make sense?
It does.
And so I guess do we put that, you know,
because we have a plan that, right now,
our plan to pay off the debt is going to take 27 months.
Okay.
And so $70,000 in debt in 27 months.
What this means is, yeah, that's going to take longer.
If you want to keep these businesses
in a stable position, it means you're personal
that's going to take longer.
Which means you're probably going to have to do some things
on the side to bring in extra money to account for that.
Right.
I mean, can it, am I missing anything here?
I agree.
Your advice has been great.
I only add this mental thing.
You're touching on it just here.
Jay, give you great advice.
It's super important that you don't let the intensity.
And I love that you're in week five of FPU, right?
So you're in it.
It's like training camp, you know,
and you're just walking through it and you're fired up.
Don't let that intensity put you in a situation
where you don't shore up your businesses.
Your pride, that is your income.
And Jay really was all over that.
And I would just say, make sure you go.
I got to make sure that I've got those retained earnings
set up in my businesses, plural.
And if that makes my debt pay off a little longer.
It's okay.
It's okay.
But then I'm going to make up for it as Jay to say.
So the mindset is, let's not hurry at the expense of,
like gazelle intensity doesn't mean gazelle foolishness.
Good, right?
And I think that, thank you.
I'm getting, this is very exciting.
It's rare that I get this.
So that would be my word for you is,
I love the intensity, but let's shore up everything else.
And then we deal with it as it comes,
as far as the payoff date, okay?
So the fact you guys got these businesses, you want to just
keep those things stable.
Because if you don't and something happens,
now you're up a creek, now you're in big trouble.
And we're also blowing up our timeline.
So it's not about the timeline.
It's about how we finish across the line.
So appreciate the call.
You're a sharp young man.
You guys seem like you're doing great.
We'll get Kelsey in real quick.
Kelsey, how can we help?
Hello, I like that gazelle quote.
I wish I could write it down, but I'm going to remember that.
I'll tell you it again.
Oh, you already got it.
Okay, got you, very good.
All right, go ahead.
We got about two and a half minutes.
We'd love to help you.
What's the question?
Okay, in regards to pre-nuptial agreement,
I've been listening to you all for less than a year.
And I know that you all don't recommend one,
unless you have big financial disparity,
which can protect me or us from cousin Eddies.
My boyfriend and I plan to get married.
It'll be our second marriage.
But I wanted to see what your thoughts are on pre-nupt.
If there is no big financial disparity between us,
but we have cousin Eddies.
What do you mean, be more specific?
What are these cousins, or who are, I mean, what are we talking about?
Like, so I guess I imagine cousin Eddies
of the ones who are looking for money
and from family members and yes.
And this is not a metaphor.
You're telling me you've identified some family members
on his side that you think will come asking for money.
Yes, and they have the formula.
Will he agree with them?
Will your spouse agree with the cousin Eddie?
No.
Okay.
You don't need a pre-nupt for that.
Yeah.
You need boundaries.
Okay.
That's just you and your husband having the...
Yes, Ken.
You and your husband saying,
we're not going to loan money to these people.
Okay.
Yeah.
That works.
Yeah, but I mean...
Oh, yeah.
No, he would be on top.
He'd be all for that.
Oh, okay.
Yeah.
Perfect.
Yeah.
Yeah.
Boy, that is interesting.
And good on you, by the way, I've identified that
and bringing it up to him.
And so, yeah.
Yeah, that's a big advantage.
If we're on the same page,
it no matter who it is.
Because we took a call earlier today, a young man
gets a massive job.
Yes.
$285,000 salary.
Tony.
Tells his mom and dad as one would do.
And they immediately asked him to help pay off debt, pay
for his sister's college.
So, you know, Jade...
And Jade, before we took it, they called Jade,
touched on this.
She was like, I wouldn't be telling family about all
these income things.
So, it's very interesting.
And we've seen this today.
I love that you guys have figured this out.
But yeah, make sure the husband is absolutely in lockstep
and we don't share any financial information
with any of these folks.
So, I feel like there's a southern phrase for that,
that opportunistic.
You always have a southern phrase.
I know.
I always had a vulgar on a Jack rabbit.
I don't know.
It's so silly.
I love that you gave that a shot.
No one in the history of radio or podcasting
or YouTube has ever said that.
I'm not saying that phrase.
So, I think you've done something great.
Kelsey, thank you so much.
I think you've got a lot of wisdom.
No prenup here.
Just great communication.
And a fabulous word to learn.
No.
And that will work.
Hey, remember everybody, there's ultimately only one way
to financial peace, and that's to walk daily
with the Prince of Peace, Christ Jesus.
The Ramsey Show



