You And Your Spouse Have To Be on the Same Page
2023-11-03 01:58:00
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Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by my good friend, Dr. John Deloney. What up? That's doctor with two PhDs, in case you're wondering.
And George with two lenses in his one pair of glasses.
That's all you need. Sorry, I don't know what to tell you, John.
I know. How are we doing?
I couldn't spend my life in academia. It just felt so grueling.
Oh yeah, you should see on the other side of it.
Here you are now.
When you and I had the same job.
We're both YouTubers. Joke's on you.
It feels so good. Man, I showed you guys, didn't I?
Well, this is a real treat, John. It's been a fun week pre-launching my new book, Breaking Free from Broke. I'm a first time author.
Pre-launching?
Yeah.
You're launching.
Well, it's not launched into the world yet, but you can pre-order it. There you go. That's what I was trying to say.
You can triple stamp or double stamp when it comes to pre-selling this incredible book, dude.
Yeah, it's been fun. The response has been awesome. And if people are wondering, what is this about, Breaking Free from Broke? Here's the question I get. How is this different than the Total Money Makeover?
Well, the Total Money Makeover has been around for decades. And I follow the principles in the book and I lay out the baby steps real quick. But this is not the baby steps. rehash. This is me unpacking the financial industrial complex that is keeping people broke.
And I hit every excuse and justification with a lot of empathy. And I want to talk at people, with people, not at people. And given the book that I wish I had when I was in my 20s and now in my 30s, this is what people are really dealing with. Here's how the system is designed to keep you broke. Here's how to get out.
And I did it and 10 million did too. There's the social proof.
And I think what's helpful about this that is going to be helpful for me and honestly helpful for me, and helpful for, it's a book I can hand to my son, who's 13,, who's just now entering into the system, right?
They're already going to start sending him credit card offers.
Oh, for sure. Already getting college stuff. It's a zoo. But when Total Money Makeover came out, you had your neighbors. That guy had a nicer van with the wood on the side of it.
And there was a guy at your church who had a thing. And then you had a buddy who had a friend who was a banker that said, hey, you need to get an adjustable rate mortgage, that kind of thing. Now it's coming at us a thousand different directions, all at the same time. You don't have real estate. You don't have passive income.
You don't have crypto. Oh my gosh. You're just putting money. So much FOMO. It's everywhere.
And I am an old man and I can't escape it. And so we talked about it the other night. For those of you listening, I count myself pretty fortunate that I get to sit by Dave hours a week. And he's somebody I call a buddy. So if I'm about to buy something or I'm thinking through something, I can just ask Dave Ramsey, which is pretty amazing.
And I've also called George Campbell on his cell phone.
When Dave didn't pick up, he was like, I'll try, George.
Nah, Dave. I don't call Dave when he's on the golf course. But hey, George, help me walk through this thing because I'm thinking about doing this. And if I move this over here. And so you're somebody that I trust with my family's money.
And so I'm really grateful to have this book in dealing with the things that we're all dealing with all at the same time. right now. It's exciting.
I appreciate that. Yeah. I've said that the gap between financial stress and financial peace is littered with myths and traps and distractions and noise. And I just wanted to cut through all that and tell you the truth and go in depth and hit every objection that you've. Before.
you can even get to it. I just want to get there. Yep. I hear you. Here's what the truth is about money, with tons of research, with tons of humor.
So I'm excited to get this book in people's hands and help them break free from broken, unchained and untethered from this broken financial system, and deprogram and unplug from the matrix. So if you want to check it out, you can go to ramsysolutions.com slash store and preorder today for just 20 bucks. And we're going to bribe you with a hundred dollars in free bonus items, including access to my newest talk. Show me the money. Exclusive access to an online private event and Q&A with me in January, as well as an enhanced audiobook.
John, we're doing a real fun produced version of the audio book and ebook. You get that all for free, on top of three months of every dollar premium for new users only. So hey, that's not enough. I don't know what it is.
When does this, when does X hit the stores?
It hits the streets January 16th, January 16th.
Okay.
We'll get the ebook to you a few weeks early if you preorder as well. So there, it won't be there in time for Christmas, but it's worth getting for folks for Christmas with a little printout.
Well, I was just thinking, um, my book, Building a Non-Existence Life, that's, that might be hard to buy for Christmas to be like, Hey, uh, I was thinking about what I could get you and...
Well, you're in good company, John, with a book called Breaking Free from Broke. You're falling apart.
So here you go. But this is a book that I could order, and I could order 10 of them for all my cousins or all my nephews or all my grandkids. And there's Christmas and I could have the little card and hand it to them. And then, kind of, when the smoke clears from Christmas, they're going to get it in the mail a couple of weeks later and they'll go, yeah, all right.
When it's new year, new me. Yeah.
And I think that's, I think, I don't know. I'm just excited for it, man. I think it's going to be, I actually think it's a great Christmas gift that will show up right when all the smoke clears from Christmas and people are holding those credit card statements, or they're in a house and their parents are banging their head against the wall. Why'd we do it again? Why'd we do it again?
And you're 19 or 20 and you're heading back to college. This will be perfect.
I appreciate that, man. That's very kind. Well, go check it out at ramsaysolutions.com slash store. I guarantee you'll love it. If you don't, I don't know that you can get a refund, but you can yell at me on Twitter or whatever you guys want to do.
That's fine with me. Um, but, John, before we get to calls in the book, I lay out a lot of the things that people that I've heard on this show when they call in and they say, but John, what about inflation and the housing market and the cost of higher education and the fed? And did you see the guy in the white house, what he's doing? And there's all kinds of really good reasons as to why you can't get ahead and why it's someone else's problem. And something I've been telling myself and other people is that it's not all your fault, but it is your responsibility.
And that I feel like crosses over into your world, because in your new book, building an on anxious life, one of the choices you have to make every day is choosing reality. And that comes to a point where you have to say, there's a lot of things I can't control. And the one thing I can't control is the guy in the mirror. And that means he's going to do something about it.
I get that question on my show a lot, like, Oh, I'm supposed to just sit down and tell my husband. It's like, yes. Would you know how hard that's? Yes. But do you know how hard living your life, scared to come home, is, right?
You know how, how hard your life is, um, struggling with nutrition and exercise programs, but I get it. It's, it's a matter of choosing your heart. So, yeah, for folks like me, who grew up with two parents who are freaking amazing, who love me, but who didn't have the tools and didn't have the plan, we're just literally doing what the next right thing. they were told. And I didn't have a plan.
Um, yeah, it's hard to suddenly submit yourself to a plan that's not sexy and not shiny. It's way more fun and way more adventurous to be like, Ooh, okay, I got to get this in a portfolio. And, bro, you have no portfolio business. You owe 40 grand, right? Or in my case, a hundred thousand dollars of student loans.
You don't, you don't need to be thinking about passive income, right? So having a plan like this is so rad, and it comes down to that. Choose your heart, man. You can live a life where you can't breathe and your body won't let you sleep because you owe money, or you can choose your heart and say, okay, for three years, I'm going to work four jobs. It's going to be miserable.
It's going to be miserable. And on the back end, ha ha, suckers, no one will own me but me. And that's where millions and millions and millions of us are right now.
That's very freeing. Yeah. If you want margin, if you want options, if you want peace in your life, you want freedom. with your time and your money, you're going to have to work for it. And you're going to have to bridge that gap between financial stress and financial peace.
And there's so many myths and traps along the way. So I encourage you guys to check out my new book, Breaking Free from Broke at ramsaysolutions.com slash store. I hope it helps as many people as your books have, John.
Well, listen, we see it all the time. Nobody's coming for you. And it's easy to go. What do you do now? This is the roadmap.
Pick it up.
This is the Ramsey show.
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Welcome back to the Ramsey show. I'm George Campbell, joined by Dr. John Deloney. This is your show, America. Give us a call at 888-825-5225..
Tristan is up in Cleveland, Ohio. Tristan, welcome to the show.
Hi. I recently had 319K in student loan debt forgiven.
Whoa.
I have about 33... I know, right? I have 33,000...
How long did that take? I'm curious.
Ten years.
Okay. Ten years.
Public service loan forgiveness.
Cool.
Good for you.
And so I currently have about 33,000 in personal debt. Me and my husband, we refinanced a family home we inherited for about $50,000.. And at this point, I'm thinking about us buying a new house, renting out our home. Wanted to get you guys' thoughts on that.
So you have this $33,000 personal debt. Any other debt?
No. That's it.
How much money do you guys have in the bank?
About $22,000..
Okay. So the question is, how quickly can we get rid of this debt and get an emergency fund saved up before we jump into this dream of home ownership?
Okay.
Because that's my worry, is you go into this broke.
Buying a house. Yeah.
Because it feels like you have 22 grand, which I assume was going to be your down payment?
We actually... The down payment would only be a total of like $15,000 total.
And what would the mortgage be?
About $2,200 a month.
And that's on a 30-year?
Yes.
Okay. What's your household income?
Household income is about $200,000 a year. Personal is about $150,000..
Awesome. You guys have a great income. So what is the urgency to jump into the house purchase right now versus waiting a year from now when we've cleared the deck, we have no debt, fully funded emergency fund, and a bigger down payment?
I have a three-year-old, he's going to be turning four soon, and we live in a really bad neighborhood. Lots of violence.
Can we go rent in a better neighborhood for a year while we do this?
Renting right now is going to still run you about $1,800 a month.
You make $200,000..
Here's how I know you can do that, because it's exactly what we did. I had a two and a three-year-old, and we lived in a residence hall full of college students. The smells are still stuck in my nose. And we weren't ready to buy a house, so we moved, and we moved into a 900-square-foot rent house. Was it fun?
No. Did my wife cry? Yes. Did we end up having a real down payment for a home a year later? Absolutely.
Here's my worry, Tristan, is that if you do this right now...
By the way, next year, around August, I'll get a lump sum payment from Incense That Occurred. It'll be about $25,000..
Awesome.
Well, let's add that to the down payment.
August of next year, you'll be able to put a big down payment down.
I think you're itching to get out... What was that?
Get out on the $15,000 down payment option now, because they're willing to take 3.5% down.
Of course they're willing to.
Please don't put 3.5% down on your house, please.
You make too much money to be making broke people decisions. And my worry is, if you continue down this path, five years from now, you're still going to be broke, because we never really cleaned up the mess or changed our behavior. But we could fix this really quickly. I mean, this is a very solvable problem, making $200,000, and you have $22,000 to throw at the debt today. So let's say you drain that down to $1,000..
Within the next two paychecks, you've paid off your debt. Maybe four paychecks. after that, six paychecks, you have an emergency fund. Now we can start saving up for a down payment. With no payments in the world, how much could you save up a year?
$100,000?.
I think we should... I'm only bringing home about $7,000 a month.
Because of what?
The income.
It's just how much I actually bring home. I make $142,000 a year, but I'm bringing home about $7,000 a month. Are you...
Do you have investment contributions coming out?
Yes. Retirement and so forth. We have a 403B. Okay. So...
I would pause that until we get this mess cleaned up, because that's going to free up a big chunk of change for you, isn't it? If you pause the contribution?
That's a good idea. That's a good idea.
So now we have maybe $8,000 coming in every month, who knows?
Or nine.
And just... You've heard this story before, and I just want to reiterate it, because you hear the horror story, and it's not a horror story, this is reality. I bought a house out in the country that was completely redone from top to bottom. And it flew through the inspection. And in the four years since I bought it, I've had to replace the roof, I've had to replace an air conditioner, I've had to replace a hot water heater, and I've had to do some wiring issues, because it's out in the country.
And so if you put $15,000 down on it for 3%, and one thing goes wrong, you're back in the hole another $10,000, another $20,000..
And so George and I aren't trying to be mean or ruin, dash your hopes. You know what we're really trying to do? Give your...
Maybe some problems in the future.
Well, we're just trying to give your baby the greatest gift a parent can give their kid, which is a home full of peace, not a home full of anxiousness. Because when you have peace, then you can hold your kid accountable, and you don't lose your mind because you have no margin. When you have peace, you and your husband get in a spat, which me and my wife do on a semi-daily basis. And we both can respond rationally, not emotionally, because I'm also... I can't...
I haven't slept for two weeks because I can't breathe about the roof payment and the air conditioner payment and the hot water heaters on the fritz. You see what I'm saying? We're trying to create peace in your home. That's the only way this country heals, is house by house by house. And you make 200 grand, you have won the cosmic lottery.
If you will just take 18 months and do this the right way, you will change your family tree forever. And that stress you have that has set your soul on fire, I gotta get a house, I gotta get a house, I gotta get a house, your kid will never feel that, because they didn't grow up with that chaos. You see what I'm saying?
All right, I gotta get out of this debt.
It's about... Hey, this is about freedom and not like American flag under ruse. This isn't like an Instagram post. This is nobody owns your home, but you.
Do you think we should sell our current home, which still has about 100,000 left in equity?
You just told me you're in a crime riddled neighborhood. I would sell it and go rent for a while and take whatever equity and pay off the debt, get the emergency fund and use that for the down payment fund.
Yeah.
Thank you, guys.
Jay-Z said, brush your shoulders, if I'd be out of that neighborhood, I'd go. But I'd rent a house until I can afford it.
Yeah.
Okay.
Thank you so much. You got it.
You're welcome, Tristan. Yeah, again, I'm not beating up on Tristan. I'm looking at future Tristan, 15 years from now, and I'm going, they can have a paid for house.
A couple of them.
And be baby steps millionaires, or they could be paying on a mortgage for the next 30 years while hanging on to debt and probably going further into other types of debt because they bought a home before they were ready, which means they don't have margin.
They got to get an air conditioner replaced. Oh, the transmission fell out. We got to get another car.
And these aren't hypotheticals. That'll probably be the next call on the show, John. This isn't just, well, they're just being Eeyores. We're telling you, we're here to help you guys when life happens, when you thought it was going to work out perfectly and it didn't.
And we would not have jobs if everybody's plan always worked out. The fact that it rarely works out is why we're employed, right?
Absolutely. So, Tristan, when you're ready to buy a home, here's, here's an easy formula to know when you're actually ready. When you can have a mortgage payment, that's no more than a quarter of your take home pay on a 15 year fixed rate mortgage, which means it's probably going to be 30% higher than that 30 year payment. But you know what? If you do the 30 year payment before you're ready, you're going to stay broke a long time.
And we found people that follow the baby steps, they end up paying off their mortgages in about seven years. And so this whole like, well, I'll just do a 30 and I'll pay it off early. Or you go 30 years and then refinance and get a HELOC on the second mortgage and you just keep the debt ball in the air for the rest of your life. And you call us at 65 or 70 and say, I still have a mortgage. I got all this debt.
I want to retire. What do I do? The best thing to do is get a time machine and make better decisions in the past. And that's, we're here with past Tristan, trying to help her make future decisions that will set her up to build wealth with less anxiousness.
This is literally breaking free from broke.
Derek, thank you for that book plug, John.
I'm just saying, like, this is what this is. This is somebody making 200 grand who's going to wind up broke. This is how you break free from it.
There's just no excuse. And we've seen the stats. People making six figures, one out of three, paycheck to paycheck. With a six figure income, there is no excuse in America today to be broke making that kind of money. We've got to break free.
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This show is sponsored by BetterHelp. This is Deloney, and I'm always railing against social media, especially in the summer, because everyone uploads the highlight reels of their perfect bodies and perfect vacations and perfect kids. And I know they're not real. And I also know that I'm blessed beyond my wildest dreams, but I still find myself wishing my life was like other people's. And, based on the data, I know this is happening to you too.
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This is the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Well, hey, you know what time of year it is? It's the annual listener survey.
What time is it, George?
I knew it wasn't on anyone's bingo card for me to say annual listener survey for the Ramsey Show. So here it is, guys. We want to know your favorite parts of the show, what you like, what you don't like, what you want to hear more of, more about, whatever it is, we want to hear from you. And there are two ways to participate. You can text the word survey to 33789 or you can go to RamseySolutions.com slash survey.
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Especially if you say that John is your favorite part of the show.
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The number to call is 888-825-5225.. Victoria is up next in Phoenix. What's going on, Victoria?
Hi guys. Good morning. Thank you for taking my call.
Sure. How can we help?
We bought a car last year when the market was really bad for cars, with the purpose of we plan on visiting all 50 states with our boys. And now it's like, okay, the road trip plan sounds like fun, but we are upside down on our car. We owe $42,000.. And if I Kelly Blue Book it right now, it's only worth privately like $30,000 to $32,000..
Sorry to hear that. What's your household income?
It's last year, we ended the year with $100,000, but we have to pay, last year we paid taxes about $13,000.. This year, we're going to be making more, my fiance is going to be making more than $100,000.. But we're guessing for taxes, we're going to have to, we have right now a side $10,000, aside from our $10,000 savings, but we're guessing it's going to be somewhere around $15,000, $16,000..
Okay. Is he self-employed or contract work?
Yeah, he's self-employed. Okay. So we see our full check every week. It varies between $2,300 to $2,900, but again, we have to put aside for taxes.
Okay. What other debt do you have?
Just the car and our house. Our house is at $135,000..
Okay.
We're in a 15-year house.
Why are you calling about the car? Are y'all trying to get rid of it? Are you just frustrated by it?
I just don't know if, I'm just trying to see, is it a good idea that we have this car for this purpose?
No, I think it was a terrible purchase, but you've already made it.
It's like if you bought a house and you're in it now, we're not always going to tell you, go, sell the house, go, sell the house. That's the case with this car. It's a lot of your world and a lot of your income, but it's not violating the principles outside of you going into debt for it. It's kind of like if you bought a share of a stock of a company and you bought it at the height, and now the stock took a dip. Well, you didn't actually lose money until you sell that stock.
The same thing is true with this car. You can just ride this out, drive this thing till the wheels fall off, pay it off as fast as possible, and go, that was a stupid mistake, we're not going to do that again.
Okay. That's what we were aiming towards. I just wanted to get a professional opinion, like, okay, what should we do? I had listened to other videos on YouTube, and some of the videos were like, hey, use that saving, pay the difference of whatever.
You could do that. Do you guys have $10,000??
We have the $10,000 savings, but that's just like our emergency fund. I really wouldn't want to be left with zero, and then, if something happens, and my fiance is the only one that works, to be stuck in a really tight spot.
Well, what we teach here is the baby steps, and so baby step two is pay off all consumer debt using the debt snowball, then baby step three is to get the emergency fund in place. So you're already out of order here. So if you wanted to take that $10,000 and get out of this car, you'd need a little bit more money than that to get a different car, of course. But at this point, you may be better off just paying that thing off as fast as possible, making six figures. How quickly could you pay off 42K?
If we, I think, if we stuck to it, I think we could do it in like, in a year.
That's what I'm talking about.
And you'll have what I would call a knucklehead tax, and that is the gap between what you're upside down because you bought a car at the height of the market, because you thought you would joyride America, and it didn't work out. So you have to be like, that was dumb, like that cost us 12 grand in depreciation, but all right, we won't do that ever, ever, ever again.
But that also means sacrifices, like maybe we're not traveling the country this year because that's going to cost a lot of money. We may have to hang on to that dream.
OK. Could I add another question to this?
Sure.
So he's been working, so he's self-employed and he's a barber, and roughly every hour he makes like $60 an hour, and his manager he's been working with for about six years. now, they want to open up another shop and he wants to open up another shop and wants to have my fiancé as half owner. OK. So obviously now he would keep a higher percentage and he'd be making more per hour. He'd keep all his cuts.
But should we pay off this car first or save up the $50,000 first that we would need to put in to make this barbershop, to get it going?
You are broke. OK. You're not in a position to buy into a business right now. OK. Does that make sense?
Like, it sounds like an awesome deal, probably great. Your husband probably crushes if he's making $60 an hour. That's that's George Campbell haircut.
100%.
I don't spend that much. I'm, jeez, that's amazing. But, like, he must be really good at what he does. And I bet any person who wants to open a shop wants to open a shop with a guy who's that good and who works that hard. And you're broke.
OK.
Fair?
So the car first. Nope. Fair enough.
So here's the thing. You've got to make a decision now. Is this dream about starting this business more important than having a nice car? Because if that's the case, you could drive a beater, use your $10K, cover the difference on the loan, sell this thing, drive a beater car, then save up an emergency fund, then save up $50K on top of that to get this business going. That's a sacrifice.
But we can't eat or have our cake and eat it, too. We're going to have to do things one at a time with focused intensity, because trying to do everything at once is only going to slow you guys down in the long run.
Yeah, that's what it feels like right now.
But I want this. Hey, have him tell that guy, I can do this deal. 18 months from now. I'm going to be in a really good spot to do this deal. But until then, I can't do it.
OK, I think that's enough time. The plaza that they want to open in, it's not even set to be running until fall of 2025..
So here's what. here's what George and I want you and your husband to do. I want you to sit down and stop talking so much. And I want you to get out a pen or an Excel sheet. And I want you to put this plan to paper.
Here's how much money we make, honey. You're going to have to cut hair for a year on Sundays, too. You're going to have to work late. You have to do till 10 o'clock at night cuts. And honey, I'm going to actually get a part time job, also for just 12 months.
And I know we had this dream that we were going to like. So I was always going to be with the kids. But for this particular season, we're going to work like maniacs to get out of this thing. But I want you all to look at real numbers on a real piece of paper, and you'll get a plan and you'll swear by it. And then you'll go get married and you'll do this thing together.
Fair.
Super fair.
OK, very cool.
OK, sounds like a plan. Thank you, guys.
All right.
Hey, George, this is one of those.
This is one of the unforeseen things we talk about all the time. And we talk about choosing freedom, talk about having margin. It's rare. I'm not going to lie, it's rare.
But if you are really good at what you do and you work really hard, this crazy thing called opportunity shows up. Sometimes you plan for it. Sometimes it drops out of the moon. And imagine they hadn't bought this car. because let's go, take the boys on every state.
What if they just had a beater car? And then the guy comes to them and says, hey, $50,000, buy in. You can be a co-owner of this place. You're amazing what you do. And we're about to make you really wealthy.
And now they can't do it because they have passed decisions, because they chain themselves to a depreciating asset. Don't owe anybody money. Margin and freedom.
Margin, freedom and options, baby. That's what this plan is all about.
You never know when that call is coming.
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This is the Ramsey show. I'm Ramsey personality, George Campbell, joined by my good friend and colleague, Dr. John Deloney. Hey, if you're a new listener to the show and you want to dive deeper into the lingo, into the Ramsey baby steps that we talk about, you can go to ramseysolutions.com and click on the get started button, and we'll help you figure out the next best step for your situation, for your financial journey, based on where you're at today. That's ramseysolutions.com slash get started.
Hey, big news. Mint is shutting down.
Yes, I saw this news. This is wild.
The financial app, one of the competitors to every dollar, if you will, is shutting down, which is 4 million people suddenly finding themselves without a budgeting app. And, lucky for them, we have the greatest budgeting app on planet earth. Every dollar.
Ready for you. Here's what that means for all of you who feel financially homeless because you were using Mint and now it's shut down and you're like, what do I do? The good news is there's an even better place you can go, because, truthfully, Mint wasn't a great financial app for budgeting. All it did is shows you what happened. Every dollar shows you how to plan for what's coming up, which is how you actually break free from broke and find margin.
So if you want to start budgeting for free, you can download every dollar in your app store and go to everydollar.com and get started. And we have a great onboarding process that makes it super easy. And in fact, John, I'm doing a webinar for every dollar next Friday. That is November the 10th, around lunchtime, walking people through how to set up your first every dollar budget, how to use it to find margin. Because that's the exciting part.
We don't budget just because we want to nerd out. So that we can hit financial goals. And so that's a huge part of it. And we're going to show you exactly how to do that in this webinar next Friday. So you can go to everydollar.com slash budgeting to sign up for that free webinar.
I encourage you. We get thousands and thousands of people sign up for those. And the feedback has been awesome, because rarely do we get an hour to really walk through the visuals of here's what to do, answering your questions and giving you some hope for your money.
It's you coach people. And hey, I want to say this. The sign of a truly mature person, a truly grown up person is being able to say,
I don't know how. I need some help. I need some coaching help. I have had mental health conversations with people in my family and myself, where I've had to go. I had all those classes and I need to get some different perspective.
If you're sitting there wondering, can I say the words out loud? I don't really know how to budget, or I get the idea of budgeting is so stupid and so easy. And yet I never have been able to figure it out. Be a grown up, be an adult, be somebody who is humble and says, for the sake of my family and the sake of me, I'm going to put my pride down. And I'm going to show up to one of these webinars and learn how to budget.
You can log in as anonymous, log in, let George be your coach and do this. And for those of you who are sick and tired of texting your spouse back and forth, did you spend $31 and 14 cents at whatever? I thought you would get the EveryDollar app. And if you've got friends who are unment, who are like, oh my gosh, send it to them. Send this stuff to them.
Those are your friends and they may not even consume the show. They may not listen to anything. They may not know anything about EveryDollar. Send it to them. Is it three months for free?
Oh, yeah, for free. Yeah.
You can start a free trial as well.
Yeah, do it. Do it, do it, do it, do it. This is one of those moments, man, when you can help millions of people just by hitting forward text, right?
And here's the best news. Unlike Mint, we don't sell your data and shove credit cards and loans down your throat, which is, by the way, their entire business model. How do you think Mint is making money? And so I'm happy. I'm actually elated that Mint is shutting down for a lot of reasons.
But one is that it wasn't actually helping people. It was just real slick fintech that, you know, people, everyone used it. Guess where they're pushing people, John? Credit Karma. And you get what's coming to you when you sign up for Credit Karma to track your stupid credit score.
That's the name of the company. Credit Karma.
Wish I was in that marketing meeting to tell them, this maybe is not a great name, but hey, I don't run things.
I got a great idea for my new restaurant.
Yeah. It's called Diarrhea's. We welcome all of you, soon-to-be financially homeless folks, from Mint over to the warmth of every dollar. We got stew, you know, on the stove. We got cookies baking in the oven.
We're ready for you, John.
Some of the mama camel's baklava.
Hey, don't tease me with a good time.
Okay. You made that weird.
Kelly. Daniel knows. She's had my mom's baklava. It's world class.
Sorry. Let's go out to Lane in Dallas.
Lane is in Dallas, Texas. If he's still... I'm sorry, Lane. How are you doing?
Pretty good. How are you all today?
Good. Are you still glowing about your Rangers?
I mean, yeah, I'm not going to the parade. I'm working, trying to get that extra overtime in.
Good for you. As an Astros fan, I don't think you need to go, but that's another conversation. So what's up?
So me and my wife, we've been currently trying to work on building our budget, trying to get out of all of our debt. And then we kind of had this conversation last night when we were looking at the Excel file, and I'm sitting here trying to plan out, to an extent, roughly every paycheck, this is what we need to meet this goal. And she has real bad anxiety and she just doesn't want to deal with any of that. But she wants me just to be like, hey, here's this amount. This is what we can spend on this, and just let her go with that.
I have, I'm sure it exists out there and people feel free to put it in the comments. I've never heard a successful marriage conversation about money that begins with one person saying, hey, honey, want to see the Excel spreadsheet? Ba-ding! And have the other person be like, oh, sweet. This is going to be awesome.
I've never seen that.
No, we were just sitting about talking about our finances, because today was payday for us. So we were talking about what needs to go where, and then we pulled out the spreadsheet, because we've been trying to go through all those baby step goals and we just now recently got the $1,000 in savings. So we were trying to look at the debt.
So how much debt do you have?
Working towards that. So we have about $82,000, I think, roughly.
Okay. What kind of debt is it?
So I have $42,000 in student loans. That's all me. I have $17,000 on my car. We have a $7,000 personal loan, about $3,000 in medical for our son that was just born in March, May.
Okay.
And about $14,000 in credit cards.
Oh, how much do you make, man?
Together, we bring home about $7,000 a month.
Okay. Well, step one, we need to increase our income and also decrease expenses. And the compound effect of that will give you margin to throw extra on top of your debt. So here's what I want you to do. Let's skip the spreadsheet.
I'm going to gift you three months of every dollar premium, and she can log in on her phone and you both have this app. And this is our sheet music that we're playing from. And what you're going to do is list out your income for the month, followed by all of your expenses, list out all of your debts separately as minimum payments. And that's going to show you how much money you either have left over to throw at the debt, or you might be in the red and you might need to find some income or cut some expenses. But the good news is every dollar is just a mirror.
It's not the boogeyman. It's just reality, which can feel like the boogeyman. But once she faces that, and now you go, all right, here's the gap. If we could find $400 a month, we could pay off our debt this much faster, which gets us to this goal even faster. That will start to get her excited.
versus a spreadsheet. We got to start painting a picture of what the future is going to look like. And the budget just becomes our daily GPS to get there.
Anybody who's sitting with somebody who they start to do a budget and they just get super anxious. That's me. We had money challenges growing up. And so my body put a little GPS pin and conversations about money, because they were always stressful. They were always loud.
They were always scary. And then, as an adult, when my wife and I found ourselves up to our eyeballs in debt, my body started sounding that alarm. It's been to that place before. And here we go again. So if your wife is feeling anxious, instead of trying to solve that with a spreadsheet, I would close the computer and hold both of her hands and say, hey, your body's trying to get your attention about something.
Telling you that you're not safe. What are you scared about?
And maybe she's going to say, hey, when I was a kid, money was really scary around the house and it just remembers. Or maybe she's looking at all this debt and how much money you do or don't have in this little baby that's brand new and just saying, I don't know how all this works. And that's where the Baby Step Plan, getting a plan often helps with that anxiety.
Hang on the line, Lane. We're going to send you three months of every dollar premium. Two features specifically I want you to check out. Paycheck planning so that you know exactly when and if you're going to run out of money. Financial roadmap where you guys get to start to dream together and see what the future looks like if you follow this plan with Gazelle Intensity.
This is The Ramsey Show.
Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help you build wealth, do work that they love and create amazing relationships. I'm George Campbell, joined by Dr. John Deloney. This is your show, America. Give us a call at 888-825-5225..
It's been an amazing launch week, as we've celebrated the launch of my new book, Breaking Free from Broke. It's now available for pre-order for just 20 bucks, and we're going to bribe you with $100 worth of bonuses to make it worth your while, including an enhanced audio book read by me, the ebook, access to my newest talk from our smart conference event, and so much more. So please go check it out.
Signed t-shirts that you've already worn, I heard.
We're not doing that one yet, John. We'll work our way up to the merch.
One person, one lucky person is going to get, you're going to tattoo their name on your arm?
I think that's more your audience, that's what they're looking for.
I think this is the perfect moment for a crossover.
I don't think my target demo is tattooed guys, you know? That's cool. if they are. I don't know if they're out there.
I think the fintech community is...
I think mine's more like former Apple Store employees. That's about my speed.
That are like, ah, the sun, ah, the sun.
But I'm really pumped about this book. I've been working on it for a year straight, and the whole point of it is to help people have more money and less stress. And I do that by first exposing this toxic money system, the way we've all stumbled into it. Some of it was our fault. Some of it was well-meaning guidance counselors and teachers and parents and who knows what else?
A TikTok video that you took some advice from. And so I just want to just crush through all that noise and tell you the truth about money and hit every objection in your mind and then show you a path to break free from that and have more time and money than ever before. So that's it. If you want to check that out, if that sounds interesting to you, go to ramsaysolutions.com slash store and pre-order today. John is up next in Fort Collins, Colorado.
John, welcome to the show.
Ah, yes. I just am looking for some input on possibly changing jobs. I have about $20,000 in debt. I like where I work. We're on page step two.
Um, but we're making things work as is, but it's tight financially. I have an opportunity to make a jump to where I get a sign-on bonus, um, of like $5,000.. And then, on top of that, I'm making about, um, five, uh, five to six dollars more an hour, um, plus more overtime, but I would be gone more. My wife stays at home. She homeschools and takes care of the kids.
So this would be a, um, stress on her being at home with the kids more. Um, my, my, my guess, whatever I want to do, is when I leave this job, cash out my 401k and pay off all the debt. And that would give us breathing room. No other side of that.
No, don't do any of those things you're talking about.
Severing your leg off may make you weigh less, but it's not the solution to the problem.
How much, how much do you make in your job right now?
Um, anywhere from, uh, 5,500, um, to 6,500 a month. That's what I take home.
And you owe 20,000 bucks than y'all are free and clear.
Yeah. 20,000 is what we owe.
And what's this new job going to, going to net you? What are you going to bring home every week from it?
Um, anywhere from like 65 to 75 a month.
So it's basically going to be a thousand dollars extra a month.
Yes.
I will tell you, I would much rather see you keep the job that you love, that allows you to be with your family, that gives you peace and on a daily basis, day in and day out. And you and your wife sit down and say for the next six months, I'm going to get up at five o'clock in the morning and drive people to the airport via Uber or Lyft. And I'm going to drive in the evenings when I get off. And I'm going to earn that extra 12 grand on my own and knock this stupid stuff out. Okay.
Because you're making a long-term shift decision. You're changing the entire dynamic of your family for 12,000 bucks. If you told me a 20 grand, I would say y'all need to sit down and have that conversation. But just a thousand bucks a month feels like a million dollars to you right now. Cause you can't breathe.
But I think there's some things y'all can do right now that doesn't upend your family so much.
Okay.
Does that sound right?
Yeah. And that's kind of what I'm looking for. And that's probably the advice I need.
Or are you just exhausted, dude, and just ready for this to be done?
Well, I mean, yeah, I mean, I am exhausted, but at the same time, this is a job that I do like. It's close to home, but the job that I would be going to is a job that I did before. And it caused a lot of stress on my family. So it's like the financial stress of trying to get out of debt.
If you told me you were 50 or a hundred grand in debt, and...
You're going to double your salary? It may be different.
Right. Dude, I'm all about, like, I just got through with it. George and I were just talking off air. Writing a book in our jobs and doing our own shows, plus TRS, plus, being on the road, traveling, doing speaking gigs, plus doing internal video shoots for the business units and rams. When you put a book on top of that, one group of people suffers the most, and that's our families.
Because that stuff is done in the mornings, before everybody wakes up, and it's done at nighttime. And it just erodes things. And when you're on the road, you're writing in hotels, so you get home exhausted. It's just chaos. And then you have to go on the road and sell it.
But here's the deal. It's a season. And it comes with a reward at the back end. Hey, it's going to be a banana's year, and then we're going to get, hopefully, if it sells well, we'll get a little bit of income windfall. And then we don't do it again for a couple of years.
And so you see what I'm saying? So if you're doing something for a season, dude, I'm all in. Work like a maniac. Just go guns a blazing. It's when you say, I'm just going to do this indefinitely, and I already have done this job before.
I know it's going to stress me out. It's going to stress the family out. For 12 grand? Man, you can earn 12 grand doing other things before or after the job you have now. Fair.
I would agree.
What's your job?
I'm a heavy equipment mechanic. I work for the fire department right now.
Oh, cool. So you're a handy guy.
Yeah, I guess.
Do you know how much you can make just doing handyman work in your neighborhood and posting on Facebook? And I'm not talking complicated stuff. We're talking changing light bulbs, framing up some photos, that kind of stuff. How much do you think you can make an hour?
I have never looked into it.
I'm going to tell you right now, because I pay these people, and it hurts my brain, that I paid them this much. $50 to $90 an hour is what people charge for handyman work in my neighborhood.
You want me to blow your mind even more? My friend Gustavo Menendez came to the United States. He married a missionary, and he was an engineer, but the U.S. wouldn't recognize his engineering degree because it was from another country. So he had to make money, and he had a truck and a couple hundred bucks.
And he now has an unfathomably successful mobile oil change business. where he comes to your office, he comes to your house, and changes the oil in your car in your driveway.
You know what I would pay for someone to come to my house out in the woods and do that? Because it costs me a whole half day of my life. to do that. I've got to drive an hour to the place. I've got to wait, and it says 10 minutes, and it ends up being an hour and a half, and I've got to drive an hour back.
It's unbelievable. And you, with your mechanic skills, could fill up Saturdays and Sundays and nighttimes and mornings with oil changes in people's driveways, and you would have your debt paid off in no time. It's about seasonality. And then I want you to start to ask yourself, what am I going to do in five years, in 10 years? Are you going to own your own mechanic shop?
Is there a path forward? I think that's the question you need to be asking. Do I love this work, and what comes after this? But, man, I wouldn't quit your job right now, not for 12 grand. I'd find that money.
Scratch and claw. Get it.
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Welcome back to the Ramsey Show. I told you what time of year it was. It's the annual listener survey time of year, but it's also Christmas cash giveaway time. That's here too. You could win one of our $500 weekly prizes, or the grand prize of $5,000..
That's just our way of giving away Dave's money. It's the most fun you can have with money, is giving away your money followed by Dave's money. So enter every day to increase your chances of winning. at ramseysolutions.com slash giveaway. You can also get some meaningful gifts for Christmas during our $12 sale.
We've got best-selling books on there for $12, like the Total Money Makeover, Baby Steps, Millionaires, and Own Your Past, Change Your Future for just $12 each. And John, this is exciting. Questions for Humans Conversations cards are as low as $10 right now, plus the popular Questions for Humans. Christmas edition is back. Those sold out last year, so get them while you can.
Hey, and we got a new one. We got two new ones this year. Thanksgiving. We're going to save your Thanksgiving. If you are already dreading Thanksgiving, just sitting around the table, staring at that one family member who will not shut up about politics, and has an opinion on every...
Every family has that one person that's still talking about COVID. Just can't let it go. Stop. I got you. Questions for Humans Thanksgiving.
And then we have a new one, and this was people were just asking and asking and asking for it. So we sat down with experts, kids and grandparents, and we have a grandparents and kids deck. That's fun. So if you take your kids to Thanksgiving or Christmas, you can go on a date, and their grandparents aren't just going to hand them digital babysitters. They can actually sit and talk and communicate.
Learn all about your parents.
I'll be home for Thanksgiving, so I'm going to give it to my parents and say, can you ask my two-month-old these questions?
Exactly. See if we can get her talking. It'll be perfect.
I want answers.
Hey, hold on, hold on. We're going to... I'm going to do a question with you.
Okay.
What are one or two things you'd like to be thankful for next year?
That I'd like to be. This is aspirational gratefulness.
Aspirational gratitude. That's right.
I think, my health. Things taken for granted. And with some recent family stuff, I'm like, wow, this is all we have.
And it goes quick.
We got one body, one health. So I want to make the most of that. I want to be more grateful for it. And, with action of steps. Excellent.
Like moving my body, like John says to do.
Here's another one. When did you last write a handwritten letter? Who was it to and what was it for?
I'm going to say my wife's birthday.
When was that?
Last year.
Gosh, I'm the worst.
Well, probably to a team member here. I do some thank you cards to the team. That doesn't count. You do it every day. I do a lot.
So listen, here's what I think would be really cool. She doesn't listen to the show, let's be honest. No. What if you wrote Whitney a handwritten letter, just telling her what an amazing job she's doing as a brand new mom?
That would get tears flowing in the best way.
You don't want to just make your wife cry. There's other ways you do that too. I've seen it. But I think just like saying, hey, I just want you to know, I see how amazing.
Because I say it a lot, but there's something about having it written on paper. that hits.
Yeah. That's good. All right, last one. What's the most binge-worthy TV show right now?
Oh, man. I'm going to do one that's not going to embarrass me. How about that? Fair.
It's Gilmore Girls. You love Gilmore Girls.
Well, I did just watch the Beckham documentary, which, for those of you who think I don't know about sports, I still don't. But I also watched the Beckham documentary. I know.
There's a soccer player next to one of your favorite pop stars of all time, Victoria.
I was watching for Posh Spice. I'm going to say The Bear on Hulu.
Ah, I keep hearing about this.
A great show.
Can I tell you what I stumbled into, that I'm exactly 10 years late on? Homeland.
Oh, that feels very Deloney. You think you're an extra on Homeland.
I dream of one day just getting a knock on my door in the woods and the CIA is like, we need you. And I'm like, I'm in.
Gosh, that won't come.
What a weird dream. The YouTubers came and like, hey, Deloney.
Look at us connecting, John, thanks to these cards. We're friends now. I wasn't even tempted to pull out my phone and ignore this conversation, because they were so good.
Questions for humans. RamseySolutions.com. Save your holidays.
Yeah. So reminder, the giveaway is happening at RamseySolutions.com slash giveaway and then check out the $12 sale at RamseySolutions.com slash store. And while you're there, you'll see my book there. It's not 12 bucks because it's brand new. Eventually we'll make it to the $12 sale, but it's worth adding to cart and maybe you'll hit free shipping if you get to, you know, 50 bucks.
So there you go. All right, let's get to Valerie in Atlanta, Georgia. Valerie, what's going on?
Hi, thank you both so much for taking my call. I greatly appreciate being here.
Sure.
Sometimes I try to use humor to get through things. So if I say something and y'all are laughing at it, but I'm serious, at the same time, I am new. I'm kind of Ramsey-ish, trying to be much more involved. I was on the Ken Coleman show not once, but twice. He didn't tell me I was a hot mess, but I've heard Dave Ramsey say basically some of the things that I'm experiencing, I'm a hot mess.
I have the mind of a gazelle, but I'm waddling around like a penguin. I can't get anywhere.
That's self-aware at least, Valerie. I appreciate that honesty.
So how can we help? If Ken Coleman couldn't help you, who can?
What's going on?
I'm sorry. Oh, you're good. You're good. So you're 58 and you sound like you're scared to death.
And he's thinking, yeah, John, you can help me. And that's why he hooked me up with you. He said I really probably needed to talk to you. I wanted to come to the book signing. We don't have any money.
So basically, I'm married to somebody much. I'm trying to talk fast. And if I talk too fast, let me know. But I'm trying to get it all in because it's a big mess, a huge, huge, big mess.
Go for it.
Had an accident four years ago.
Ken coached me along a little bit about trying to get a better paying job. I was making six figures. I'm not even making but $16 working a big box retail now. And it's extremely stressful. And the hours are from 11 to 8..
So I can't really get a serving job at night or do other things. But anyway, long story short, I've been doing a lot of trying to get a new job. I've been in counseling twice a week because I had to learn to walk again. I had to learn to get out of bed by myself. My husband was by my side.
This happened in another country, in the Netherlands. But when I came home, I couldn't do anything. And he was still stuck in the Netherlands. I was back here in the state and couldn't do anything by myself. I had to go to therapy and everything.
This happened about four years ago. So I'm a financial wreck. 58. no savings don't even have. I can't even pay my bills.
My money doesn't even cover my bills. But I'm so anxious. And sometimes, honestly, I do still term life insurance policy, because Dave says term rather than whole. I do have that. And I feel like I'm worth more dead than alive.
I mean, I can't get out of this mess. I just don't know.
Where's husband?
Husband is 75.. Can't work here in the states legally. And he's retired. He is somewhat on the same page. He does help a little bit every month.
Very little, because he's still got a place. It's a long story. But he does not even have a green card in our country because that's $5,000 we don't have.
So you're the sole income for the house, making $16 an hour. How much debt do you guys have?
We have as a couple. I mean, it's me. This is all prior to us being married. $47,000.. Go over that.
That's why I'm in such a horrific, horrific shape. And Ken told me to talk to you guys, because not only am I anxious every day and nervous, and just a financial wreck, $20 of that is two parent plus loans. I'm $14,500 upside down in my truck. Have tried to work out a settlement. Don't know.
I mean, like, I can't even buy a hoopsie. There's no way to even go out and buy one of those to get, you know, to do the side hustles. I'm not an excuse maker.
No, you're stuck. Hold on, hold on, hold on.
Yeah, I'm stuck.
A couple of things. You're stuck.
And you ain't going to hear that from George and I that we're going to clown on you. You're in an absolute mess. And I want you to make complete and total peace with your body. If the anxiety alarms weren't ringing off the hook inside your body, I would tell you you need to go to a physician immediately. Your anxiety right now means your body is working about perfectly.
It's perfect. Okay, so, hang on the line. We're going to roll this call over. We're going to go to break and then we come back. We're going to walk you through some potential challenges and some potential opportunities.
This is a mess and this is very, very hard. Okay, stay with us. We'll be right back, right here on the Ramsey Show.
Welcome back to the Ramsey Show. We were on the line with our friend Valerie in Atlanta. Let me recap her situation for you. She's 58,, her husband's 75.. He can't work in this country and they can't afford the green card.
They're $47,000 in debt between a parent, plus loans and being upside down on a truck. And she's making $16 an hour work in retail and feel stuck along with a baby. An accident that has left her kind of picking up the pieces. So, Valerie, are you still with us here?
Yes, sir. I am.
Did I sum it up accurately?
Pretty much. Yes, sir.
Okay.
Yes.
So hey, I want to jump in here, and I know that you have been repeatedly hit upside the head over the last four or five or six years, right?
Yes.
And when that happens to us, often we develop some pretty amazing defense mechanisms. And so I want you to do me a favor. And I want you to tighten your hands really tight right now. Can you do that? Can you squeeze both your hands as tight as you can?
And then I want you to relax them and open them up completely. Okay. Drop your shoulders. I'm going to rattle a bunch of stuff off for the sake of time. And then I'm going to hook you up with a couple of things at the end of this.
Okay. But I want you to think through some of these things. All right. Thing number one, I want you to write a letter to your former self that used to make six figures.
That woman is haunting you right now, because you used to be incredible, right?
Yes.
Yeah. And I think you still are. You're hanging in there. You're a boxer, that's on the ropes, but you're still hanging in there. And all you can remember is when you used to be champ.
And you can't see that, actually, the fighting that's going on right now, you're actually stronger and tougher than you used to be. Okay. I want you to write her a letter and say you miss her, but she's gone now. And so what we're going to do is we're going to deal in the reality that we have here. We're going to shift that identity to who we used to be, to who we are.
And we are scrappy and tough now. Number two, I want you to have a hard conversation with your kids and let them know. I signed these parent plus loans. I can't pay my bills to eat. And I want you to tell them this is embarrassing.
This is hard. This is scary. Whatever words you want to use, but that you need them to help with the cost of their college education, at least for the foreseeable future.
And they might tell you, forget you, mom. We're not doing that. You're right. I signed my name on it. And if you want to watch your mom drown, then you can watch that.
But I need some help. The third thing is I drove by this morning. My daughter and I went to breakfast and I drove by a McDonald's and on the sign, it said 20 bucks an hour.
I want you to take all of the imaginary pride you have. And I want you to. you are locked into a eight o'clock to 11 p.m. job, or whatever time you work right now. I want you to be very honest about your local area.
And it might be working at fast food. It might be working to fast food jobs, McDonald's in the morning, Taco Bell's in the evening or Arby's in the morning, or whatever. I don't care, because right now we've got to get that income up.
OK, it's going to be a swallowing of pride that you it's going to be. I just hurt for you. And you're going to come out on the back end of this so strong. The next thing I want you to do is I want you call the Social Security office and see what the status is. Have you already done that?
What do you mean?
If you have a disability that prohibits you from doing the work that you should be able to do, you may be eligible for Social Security early.
Oh, well, I can. actually, I'm going to tell you, four years later, I am walking now. I'm getting out of bed by myself and I'm fine. mentally. I'm a mess.
OK, but physically I can be real. I can actually work. now. I've been applying. That's why I can get some help with your mental state, you know, ask John for some advice on being so anxious.
And why do you think you're a mess?
Um, I'm a mess, because, well, I feel like I'm a failure. I mean, you're asking me the total picture. I feel like I'm a failure.
OK, not true. Hold on. Not true. Go to the next thing. What's the next thing?
I feel like I'm not good enough.
OK, not true. Go to the next thing.
My kids, I feel like I'm a failure to my my grown kids. My kids are grown.
That's false. That's not true. What you've just told me is a lot of feelings, and you're being run by your feelings, not by data.
And so it's an old cognitive behavioral technique that any counselor should have had you do, which is to write down these feelings that are burying you. And then I want you to demand evidence from them. Is that true? I feel like a failure to my grown kids. Is that true?
Did I raise them?
Hey, they're grownups. They can see you however you want. They may not be true either. Right. I want you to take these thoughts and I want you to write them down, all these feelings and challenge them.
Take them head on. And if you can't see the forest from the trees, call your kid. Hey, I've been really wrestling with this idea that I'm a failure. Is that true?
No, Mom, we freaking, love you. We miss you.
And I want you to take those on. I don't think your body's screwed up. I don't think you're a mess. If I had a 75 year old spouse, my wife was 75 and I loved her and she couldn't work and she was drowning in her own shame and she was getting older and I was terrified and I had this wreck and I used to be a six figure earner and now I'm making 16 bucks an hour. I'd be anxious too.
Every person on the planet would be anxious. That's why I don't know that the anxiety is the thing to go solve right now. I think the thing to solve is fighting, going to war against these negative, bullcrap feelings, because they're not true. You're not a failure. You're still standing.
You're absolutely incredible. You have fought back from not being able to get out of bed and now you're working. Now I want you to see that worth more than 16 bucks an hour, because you're worth more than that.
I want you to hang on the line, because this isn't just a one and done thing. We're going to do a couple things. Number one, I'm going to hook you up with three, nope, six. I'm going to hook you up with six months of free counseling with my friends at Better Help. You can do that from home so you don't have to drive anywhere.
It's online. The second thing is we're going to hook you up with three sessions with a financial coach, with Ramsey Financial Coaches, for free. They're going to walk through your budget specifically and they're going to help pull you apart and show you that it is that bad and here's some ideas. or it's actually not that bad, or actually maybe it's in the middle. You're going to get some data, some facts.
The third thing is I'm going to send you three months free of every dollar. The app that you can track your money and you can begin to get some little wins, little bits of control over this thing, slowly and surely.
Anxiety comes when we project the future is going to be a certain way and it scares us and we start trying to solve it in the present and it's an imaginary future. You have to head into that anxiety. I'm terrified about what comes next. Cool, I'm going to go figure out what comes next. I'm terrified.
I'm not going to have enough money. Cool, I'm gonna go get a second job and a third job, because now I can get up. I'm terrified about my feelings. Cool, I'm going to see a counselor and I'm going to use CBT techniques. I'm going straight after these feelings that aren't true.
We're going right into the storm and we're going to hook you up with people to walk with you. Thank you for being brave. Thank you for the call. You are awesome, awesome, awesome.
Good stuff, John. Thank you for that. One last thing, Valerie. The first thing you buy is food. The next thing you need to buy is shelter.
The next thing is utilities. We're paying for light, paying for the water bill, and the next thing is clothing, basic necessities. That's it. That means the car loan folks, they can kick rocks and pound sand because you don't have the money to pay. The student loan companies, they can also kick rocks and pound sand because you don't have the money to pay.
You come first. The creditors, they can wait. And I love John's advice about getting the kids to pitch in, even though it's legally on you. I think the kids need to step up and help mom in her time of need and we can get you outside of this upside down truck situation. You need to go over there and say, listen, you got a bad loan on your hands.
I need the difference to get out of this mess. And you're going to have to fight that to get out of that mess and get you something you can drive to work. But we're rooting for you. America is rooting for you. And John hooked you up with so many resources that I hope helps you take the right next step.
This is The Ramsey Show.
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All right, today's question comes from Monica in New Hampshire. She writes, I have a question about the debt snowball. I feel like I've been doing it all wrong. My two debts are my car loan and student loans. My car loan is $8,500..
My student loans total a whopping $120,000, but this is split over 16 different loans. 12 of the loans are lower than the car loan. My loans are in deferment since I'm in school, but interest has started. Should I stick with tackling the car loan or turn my gazelle intensity to the smaller student loans? Thank you for your help.
Ooh, this is like a Common Core math riddle.
Jane has 16 loans. Except there will be an actual answer to this one.
Yes, we can actually solve this puzzle here. Okay, so, loans are in deferment, you're in school, interest has started. Should I stick with tackling the car loan? I assume she's working while in school, which I like, that there's income coming in at the same time. Or turn the gazelle intensity to the smaller student loans.
This is what I did personally, so I'll tell you what I did. I had 12, 13 different little loans, and it was so much more freeing to see them as little ankle biters and list them out smallest to largest than it was to see $120,000 in student loans.
So- Baby steps.
I would do it. You can do it in a spreadsheet, but what's really helpful now, I didn't have every dollar back then. But with every dollar, when you list out your budget, you can list all of your debts, smallest to largest. It does it for you, and you'll list out your minimum payments, your loan balances, and that will show you what to tackle next and how much margin you have in your budget to throw with that smallest debt. So absolutely, let's tackle the smallest one first.
Let's knock out that little one. You have 11 more student loans to go. Then the car loan will sit in the mix. Then you'll have those last four student loans, and you're going to free up so many payments along the way that you get this thing called hope and momentum and motivation, and that's what keeps you going, and it's why I love the Debt Snowball.
Yeah, there's something powerful. You can spend nine months knocking that car loan down to $3,000, or you can spend nine months and you have 16 loans, and now you only have six, and there's just something psychological about that. We say that all the time. It's 80% behavior, 20% math, right? And so the psychology, the behavior, part, these tiny little wins over and over and over again.
So I love that advice, George.
Well, and 12 student loans are lower than that $8,500 car loan. So that tells me you're going to knock these out so fast, and you're actually going to get there faster. And the math, people like to argue about the debt avalanche and paying the highest interest first. The math is negligible, but what isn't is the psychology that will get you to the actual finish line. And so, love it.
Way to go. Call us up when you're debt-free, Monica. We'll celebrate with you. All right, Logan is in Atlanta. up next.
Logan, what's going on?
Are you with us?
Yes, sir.
What's going on?
Hey, so I have a question. I'm 20 years old, and I do travel construction work, and my company has a 401k-type plan, not exactly a 401k. I'm not sure what they called it, but they decided to cancel it and actually handed me everything that I contributed this morning. And I was wondering what I should do with that money. I'm on step two.
I recently just started the plan. A friend recommended it to me. I got the $1,000 last week, and now I'm, yeah, so I'm looking to see what to do with that money.
Awesome. How much is it?
So it was a 20, every $20 you put in, they only put in 10.. So until I got my debts paid, I was only putting in about 40 bucks a week. So it's only $800..
Okay. And what's your debt total?
Did they keep their match? Did they just keep their money?
So it's like this deal where, until 15 years, you're not 100% invested, and I was only-.
Until 15?.
15 years?
Yeah.
And you're still with this company? Yeah.
You work for the mob?
Well, I'm only about a year into this company. I'm 20 years old.
Yeah, dude. You're young enough that you don't realize that they are taking so much advantage of you. You're working for unethical people.
I've never heard of it taking 15 years to vest.
Yeah. The percentage, it goes up every year or something like that, but-.
So they held your money for a year. They made interest on your money. They matched your money, and then they're like, eh, we're not doing this anymore. Here's your money back. We'll keep the interest we earned off your 800 bucks, and we're going to keep the money that we're going to match 15 years from now.
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