Does Your Life Need a Radical Shake-Up?

Thank you. 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 George camel, joined by Rachel Cruz. This is the Ramsey show.

Hey, thanks for your call, guys. How you doing? doing? Well, how are you? Okay, I'm just wanted to talk to you today, and we're concerned that we probably look better than we are.

But this whole thing is in one mortgage. Yes. Okay. What's your household income? To 10 Canadian.

Because the variable rate we're up to six point two percent now, so it's gone up the boat just under four thousand.

Wow, and what's your take-home pay?

Take home on. that is about About 11.

Months, okay, All right. I mean it's a, that's a hefty mortgage, even with your great income. I don't know that it's a fire right now. You don't have any other debt, right? No, everything else is clean.

Well, now that it's gone up like that and saving for general repairs and the four kids very little we're gonna train. We're just trying to rebalance and bring it down to the bare bones.

This week. Okay. So the other seven thousand is just disappearing into expenses.

Yeah, no debt. Well, yeah. Yeah, it's, it's you know, yeah, are you investing? Yeah, sorry, we do have retirement. We got, we get a match at work.

It's a total. you're investing out of your household income.

We are on on mine It's 4% to get a 6% to get a match at my wife's is 4%, So it's kind of like an average of 5% total.

Okay, Man, I'm still wondering where all the leftover money's going.

No groceries about 2300, I mean all the other insurances and things.

Okay. Well, it's your original question. There's no way to really split this debt up if it's in one giant mortgage. We're just gonna attack it. You would be what we call baby step six if you have a fully funded emergency fund.

It's just kind of month to month. So very little. we just throw that up.

You're straight up, paycheck to paycheck, even making 210.

That's correct. Oh, yeah, so, Jeff. I think that's probably your biggest problems. It feels like, oh my gosh, We're on the edge, because you kind of are on the edge if you don't have that savings. so I do think that buffer of Six months put away is gonna ease some of this tension.

Sure, if we could rent the house and actually take an apartment that was cheaper. I mean that would create a cash flow benefit, would it If we could rent the place for about the same price as the mortgage?

Yeah, I mean in a perfect world, Yes. But then suddenly you have renters and you still have a mortgage on it, and if the renter doesn't pay, it's up to you, or If something breaks, it's still up to you. I mean, you're still owning a house. I think that the passive cash flow that real estate Provides is somewhat of a lie. It's not very passive.

I would work my way to aggressively attack this mortgage, and that might mean we've got to get our income up, Even though you're making great money. It might mean a season of getting our income up, getting our expenses down. if you looked at your budget outside of your mortgage, What would you say are the biggest expenses eating away that take-home pay?

2,300 is attributed to groceries. $250 for dining out. You know utilities are safe. 400 electric and water. how many kids y'all have?

for.

Okay. Whoo. Now. I know Canadian food prices are insane. is 2,300 normal over there.

Yeah, we're pretty. I think we're pretty conservative, but I mean 2200 is everything, and you know Anything that the house consumes, like soaps and food and that sort of household essentials. all that. Yeah.

Well, I think, Jeff, I think y'all's first goal to feel some level of traction and peace is that emergency fund? I think that will really Do something to you guys a sense of confidence that you're not living on the edge, because you won't be. But that would be the next. that would be that that would be the goal. I tackle, and then you guys, I would up some of your.

Yeah. And the other thing I would do, Jeff, which may hurt right now because it's free money, is pausing your investing until you have this Emergency fund in place, right? It's gonna speed that up, Number one, but it'll also put a fire under your belly to really get some financial foundation under you and get back to investing Into the match. and I want you investing beyond that, because investing 4% You may not not have a great retirement if that's all you do, for the rest of your life is treading water.

Yeah, for sure. Is there a way to get a list of good mutual funds, the long-term growth ones, that it talks about that on?

The website. Well, we just split them up into four categories. We don't actually list any specific funds because it's so dependent on your investment vehicle, Which you know firm you're in brokerage you're investing with, but we've got that resource. You can go to Ramsey solutions, comm, slash, investing. We've got a whole investing hub over there to help you out with that.

You.

This show is sponsored by better help. 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, to comparison is wired into us. but comparison can also become the thief of joy, because we can feel like we're not enough and begin acting and thinking in ways we Would never think otherwise. when all gets to be too much, think about contacting better help.

So, George, I don't know if you've been having the Christmas discussion in your house. you got a new baby. Oh, yeah, so I'm sure the first Christmas it's gonna be. it's gonna be a special one.

His list is very long. Is it very long even for a two-month-old? She's just like her mother.

She likes nice stuff. I know, and we all do. I know we've been talking to our kids about it and always trying to temper the expectations, because that contentment piece of teaching your kids about this stuff is really important, because Even people listening that are on baby steps two and three, you're getting out of debt, Maybe you're saving up your emergency fund and it's gonna be a season of sacrifice. and we're right in the middle of the holidays, And so that means the holidays may look a little bit different this year. But the good news is is that the gifts that you do give can actually bring a lot of meaning.

Calm again, slash store, to check out the $12 sale. and what's cool is that when you go to Ramsey solutions comm slash store? You'll also see the Ramsey cash giveaway. We have going on. That's $500 weekly prizes, a $5,000 grand prize You can enter every day for your chance to win.

I mean, I know we need to be grateful and stuff, but I do kind of skip it. We are your Christmas up.

I know Thanksgiving decorations didn't make the cut this year. This weekend is our Christmas decorating. I love it. Well, let's get to the calls. Dustin is up next in Charleston, West Virginia.

Hey guys, thanks for taking my call. Sure. My wife and I, we We feel that we make too much money to have to, you know, Each month worry that are we putting enough in savings? Are we doing the right thing with our money? The Interest rates have went back on student loans.

And budgeted doing our budget, right? Okay. Yeah. So how much student loan debt do you guys have?

She has two hundred and three thousand right now. What's her degree in?

Anesthesia. Yeah, and is she? how much is she making? a year? Combine, we gross about 340, combined 340..

We have Your vehicles and we have. we also have two mortgages. We have a mortgage on our house and then we have the farm. mortgage, land, mortgage separate. We rent an old mobile home on the farm that covers.

That payment though. Okay. So how much? and the cars? how much debt on them?

They're the one. they're both a little over 50,000.. We owe them 50,000 each. Okay, each. Yeah, and.

Then how much? and then any other consumer debt besides the mortgage?

No, we got mortgage vehicles, student loan. Okay.

Yeah, Yeah, and I I mean I can I with these numbers, I'm like, yeah, you you owe as much as you make a year. So it is gonna feel, it's gonna feel tight, is, do you guys have any savings?

We probably got 25 right now. We've just, You know, like I said, we weren't as responsible, maybe, as we should have been when interest rates were off the student loans, You know.

Right, just doing whatever you want.

And now you now, every month, you're committed to paying that. you're thinking, maybe I should have been more responsible for the past two years. Totally. Um, so how much you know, how much should we think about having in savings? Should we go a different route on?

Um, we both max out for one. Okay. Okay. Well, that's gonna free up a whole bunch of money if we pause that temporarily, wouldn't it?

Yeah, but you know, should we do that or?

If I had $300,000 in consumer debt, I would definitely pause investing. and here's here's the reason, because I know you're going. listen, You guys are smart people. You're really good at math. The truth is making $340,000.

Less than that would be. Yeah, that would be good. It's just you know, so maybe Paul's what we're putting in in retirement.

Yeah, I would pause all investing, Dustin. I would take your $25,000 in savings, and this is gonna make you feel real uncomfortable. I would take it down to a thousand and I would throw 24,000 at at this debt. and, and if I were you, Dustin, I'm like if it's $100,000 in cars, even though your income can somewhat justify it, We don't want it more than half of your annual income. so it technically could justify it.

we could probably clear 10 on each.

So you'd make 20 grand total? Yeah, and use that. you could buy a used car for 10 grand to putz around in for now.

Yeah, I mean, you know, like our family, my wife, my wife's family, I guess, you know, they got used to. so you look at that and my wife's they're always working on those cars. So what is? how much is the benefit?

Well a reliable used car.

Yeah, yes, yeah, they're so expensive nowadays, that's you know, that's the. I think that's yeah, you purchased a really expensive car.

So you definitely know.

$12,000 Honda Civic. that's gonna get you guys around for a year. I'm not something to live to drive it for 10 years, but be driving it for a year. Dustin, I'm like because what you guys need there's. there's a radical mindset shift that that needs to happen for you guys.

They're great. They're angry at Dustin going. Oh my god.

I could be doing so much with that income, and they're still feeling stressed like. this is crazy. so there needs to be. there needs to be a radical shakeup. Dustin, you guys were you and your wife.

And it's only working for the bank right now. You'll get there fast, man. If you follow this plan, this is the Ramsey show.

So.

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Welcome back to the Ramsey show. I'm George Camel, joined by Rachel Cruz. This is your show. So give us a call at triple-a eight, two, five, five, two, two, five. We'll talk about your life, your money.

Am a single mom of one. I live with my family and I make 53,000 temporarily from home, But I have a 12 year old felony. So sometimes I Cannot pass background checks for the jobs that I want. So I'm not sure what to do at this point. Like, should I still try to go to school or still try to become an entrepreneur?

What are you doing right now for work? I am a fraud.

Case-manager.

Okay, and you said it's temporary. Yes, it's a contract. Okay, would you want to do that full-time?

Yes, I love what I do, okay, is there more opportunity for it? Yes, there are more opportunities. I just I Failed one opportunity with a big Ford company because of my background, though.

So I don't know. tell me again why you're not passing the background check. I have a 12 year old felony. Oh, okay, 12 year old felony. That's still on your record.

I'm not sure. It's a lot of money to try to get it removed.

Okay, and then you're saying should you go to school? What would school do for you? What would be the goal with that?

I don't have a degree. So I feel like I would Beat the competition as far as having a degree. and maybe computer science or accounting, That's that's all I know. It's like accounting and office administrative. Okay.

I don't know that a degree is what would make you stand out. I mean someone's paying you fifty three thousand dollars a year now without a degree, Which tells me you have skills.

Yeah, an experience. Yeah, cuz I mean honestly, Danny, there there will be some career paths that will require a degree, for sure. Accounting, you know things like that, but yeah, they're gonna probably want to see that. but there's a whole other world out there that Don't require college degrees, and you can still make a great living doing it. So If I were you, how old are you?

Yes, I have 40,000 in debt just because of my car and you know, 3,000 in Credit cards, but I plan on playing the credit cards down just to improve my credit, but I do have an expensive car.

Okay, what's the? what's the car worth? I?

Haven't got it appraised yet. Okay. What's what do you owe on it? I? Owe 37.

Well, I would, Kelly, blue, book it when you get off the call with us.

Okay, and if you can get what you put into it, you know, without being underwater, I'd get rid of that car and drive something cheap for now. Do you have any money saved?

Yes, I have $2,000 saved. Okay, good for you. Good start.

So here's that your game plan for the next few months, because you're living with family. So you don't have any bills, right? No, no big bills. So what if we could use that wonderful? $53,000 salary and we start throwing, you know, a thousand two thousand dollars a month into that savings account?

$740.. Yeah, so if you could imagine that just being back in your pocket, right? I mean, there's a race. Yeah, because your car payment DNA is very high compared to your income. So I would say it's pretty much a requirement.

Thank you.

Thank you. Oh, hey, Deanna. We're pulling for you. Hang on the line, We'll send you Rachel's new kids book and man, a single mom alone is a warrior. Yeah, but one with it has that kind of background that has overcome so much and that is doing so well.

well, I Have. I'm embarrassed. I have messed my finances up pretty much my whole life. I'm 59 years old and want to take better care of my wife, who Has been had to quit her job. We don't have her income anymore.

Yeah, how much are you making a year?

This year is my worst year. It's only gonna be about sixty two thousand, and it's because of many, many doctors appointments. She can't go alone. She can't, yeah, do these things alone. We have nobody to help us.

And how much debt do you guys have?

We have about twenty six thousand dollars in medical. Okay.

Well, we're gonna help you, David. We're gonna take a short break, But I want to carry this over because there's a lot to unpack here and I want to make sure that we serve you, Especially while you're going through such a difficult time, and before we go to the break, I want to let you know that you can release the shame and the guilt and the baggage. We've all made mistakes, man. That makes you over 12 years old. The Big thing is what are we gonna do now?

I Have got some good news and some bad news. The good news is that people have started buying life insurance to protect their families at levels not seen since the 1980s. The bad news is many of them are still buying crappy cash value type plans. I don't care what you call them whole life, universal, variable, adjustable, flexible. They're nothing but a waste of your money.

Welcome back to the Ramsey show. I'm George Campbell, joined by Rachel Cruz. Before the break, we were talking to David in Gainesville and we still have him on the line. Let me recap his situation. his wife has been through it health-wise, can no longer work, is dealing with a cancer diagnosis and He makes 62.

Two credit cards are in collections.

Okay, and what about your? are we able to put food on the table? cover the renter mortgage of the utility bills?

That's one of the embarrassing things. I can put food on the table. We have no rent. I Drive a truck for a living and we live in the truck. you live in the truck.

Yes, sir. What kind of truck is this? Is it a livable situation?

It's a semi. It's a Eight by box.

How long have you guys been? we're been doing that, David.

five years, four years, excuse me, four years. and is that?

purely a finance because you don't have the margin to pay a rent or a mortgage? or is that because you guys are on the Move all the time and it's like what you?

Decide just to do some bad places that I work. We made a move to Florida and And we have a fifth wheel printer that is in a In an area that we stay in on the weekends, but there's. there's no rent there. It's the company that I work for. lets me keep it there.

Okay, is there? do you think it would be prudent to find a more stable living situation for her?

We would love to, but I've got the finances so messed up that I I'm not saying I can't afford it. I just don't know where it goes. I don't know why I don't have it.

So you make $62,000, what is your monthly take-home pay?

Monthly take-home. it see, it varies, and a lot of that's because the doctor's appointments. if this wasn't an Normal year, it would be around.

Around five grand a month. Okay, so you're making closer to. that's a good year, though. So these days is it closer to three grand a month I?

Don't know. that's where we're having trouble too. We don't. We don't understand, because if one week we've had two doctor's appointments, I miss out on so many loads that my paycheck is like $500 when it's normally take home 1300 1400.

And David for these doctor's appointments because you're having to miss work. Is it, is she able to drive herself, or is it that she actually needs? she needs you to visit? She can't physically drive.

She's no longer able to drive. She can't stand very long. Okay, it's busy.

She just can't be alone. Yeah, and you guys have no family. Where where is your family right now? Do you guys have any closest?

Closest family would be my father in Illinois. He's 90 years old. Yeah, and we have a 41 year old daughter in Illinois that.

Do you guys have a nice but not much help, okay, okay.

It's gonna be here's gonna be really big. and, David, a question on the insurance side and medical bills Are you able to cover those future bills that she have? health insurance?

We have health insurance, the what the medical bills are or what's out of pocket, okay, we've.

So I want to make sure the right type of insurance to avoid going another 25 grand into medical debt. Have you hit your out-of-pocket max? Yes, okay. So that's good. At least for the rest of the year.

a vengeance. and then one and the credit cards and collections. David, I wouldn't Get a hold of them and see if you can settle, Because usually if it's within collections and get it in writing if they will, but you can tell them your situation, Like I don't have it, like I don't have the money, And if you scrape together, you know, if you have $2,000 in these credit card bills, It might take 400.. Yeah, and you scrape together four or five, six hundred dollars. You're like I can pay you now Something.

Medical debt. see if you can settle that. negotiate that, because you guys truly don't have the money. You're living in the truck right now. We're trying to take care of her, trying to work, and so I've, I have faith that we'll get.

Well, can I say two things real quick? Sure. I know that's gonna happen, because The Lord has provided Very well, and it was like a slap in the head. He said I've given you what you need. now.

David, that's beautiful. Thank you for that. We're gonna also, on top of giving you Financial Peace University on top of every dollar premium, We want to go one more step and give you a free financial coaching session With one of our Ramsey coaches, and so they're gonna walk you through this in a way We can't do here on air in a few minutes, but I appreciate the call. one last thing. We're gonna give you every dollar.

And she'll learn contentment from two months old. what a gift, what a gift is. what a great dad you are, George.

I've been told reading her, if I had a nickel, Rachel, for every, I'd have one nickel, maybe from you. Oh, that's fun. Well, we're taking your calls at triple-a 8 to 5, 5, 2 to 5. We'll talk about your life and your money. Jared joins us in Salt Lake City to kick us off.

Hi, thank you. Sure. What's happening? Um, well, I was just kind of wondering your guys's opinion, um, right now, me and my wife are Full-time employees at the family farm and.

Jared, I want to release you from any burden that you are feeling right now. You're carrying something that you don't need to carry. I understand why you're a great guy, But this is not your responsibility. this, this farm. It's not.

So I've discussed Moving away with my aunt and uncle and I'm kind of too afraid to talk about it with my grandparents.

But why does it have to be you? Are you the only person on planet Earth capable of helping?

Sometimes it feels like.

there and

They've probably made you feel that way. They're like you're so helpful. We can't imagine doing this without you. You guys are so great and you're married, right? Yeah, did your wife sign up to be a part of this family farm for the rest of her life?

Um, I Guess not, you know, we kind of want to move away and farm, you know, we're really passionate about agriculture, that's really what we want to do, but

Well, you're not doing.

A question. Why do you want to move away? What's the? is it just to kind of have your own thing? Is it?

Um, trying to have our own thing. You know, my dad doesn't work there. So the kind of writings on the wall there like I've worked my whole life, but I'd kind of just be an employee, you know, yeah, and.

Okay, she, you're working on the farm, too.

Yeah, you're severely underpaid. She makes ten thousand dollars a year. She working full-time.

No, no, I guess my wife doesn't work full-time. I guess I said that wrong, but she just kind of does. okay, I'm clinical stuff, you know, which works out good. It works out really well because we we have a Year and a half old and then we've got another one on the way. So it's congratulations.

Be a mom at the same time. Yeah. Yeah. So what happens? let's say, you snapped your fingers.

um, We would be Farming down south from us and we probably be just farming produce.

But that means you need to have some land. how would that work?

So Her. her family lives down south from us and we'd probably maybe move in with them for a little while and then I.

Want you to get your own place and have some independence. I want you relying less on family, because it's gonna add these weird, handcuffed situations like you found yourself in. So what would it take for you guys to live on your own? rent your own place, have your own financial stability and then do your own thing?

I've kind of looked at that. I need to get my CDL and then maybe Have a full-time CDL job. I lined up right when I get out of the farm and then Kind of use that money to buy some property. Okay. Do you guys have any debt?

Okay, so we can knock that out quick.

What were your degrees and leave it there to build the credit? Um, we didn't. we didn't finish our degrees out. Okay.

So what I would say, Jared, if I were you guys? you're 23,, you guys are figuring out life. You're starting a family and You've had a great opportunity working on the family farm, but you know in your gut It's not going to be the long-term play. So, Jared, you're gonna have to have the uncomfortable conversation. and here's the deal.

You.

Welcome back to the Ramsey show. I'm George Camel, joined by the Rachel Cruz this hour, and the number to call is triple-a eight to five, Five, two, two, five. This is a rare combo and Rachel and I get to host together. We we do host smart money, happy hour, another show on Ramsey Network, where we have a great time.

Usually with a cocktail in hand very different style, a little bit more relaxed on that. That's right. We're real uptight over here. We're gonna. we're gonna do the Ramsey show.

There's always Voices on for this show. Yeah, we put on our big-boy pants today. But hey, if you want to check out all of the shows, We got so many on the Ramsey Network with our friends Ken, John, Rachel. I've got a YouTube channel. So there's always something coming out from us.

Will you share the show and subscribe to some of these? put reviews out there? Really helpful when y'all spread the word, sharing it with friends and all of it. Again, we want people to get control of their money. And I think that's one of the best ways to do it.

All right, let's get to the phones. Danielle is in Los Angeles. What's going on, Danielle?

Hi. Hi, you guys. I hope this is a fun one for you. Thank you. We needed a soft toss here.

Push on the mortgage. What's your household income?

We were at about 300k a year. That is good news.

Okay, and outside of the retirement. What kind of equity do you have in the home a?

Lot. our home is probably worth about 1.6 Million if we were to sell it, but we're not. I mean, we're not moving.

We have young kids, though, but you've got about 1.2 plus million in equity in the home. Yeah, okay. That's good. But I want to have all of the equity. Sure.

Yeah, and we're thinking that we would probably spend about 60k, which sounds ridiculous to us, on a car. But because we've never, we've always bought used cars. Okay, but yeah, I'm guessing. I'm wondering if, like, it's just not worth it to do.

That. yet. We should catch up or at least shovel this into. y'all need a new car, Danielle. What's your current?

Because I drive a boring gray van and I want something more fun, honey, Yeah, that would still fit my family. So yeah, okay. We may have different answers on this, Rachel.

I feel like there's some middle ground here where we can get you a Great car and we can shovel a bunch of money into retirement. How much for the gray van? Could you get?

How much, what do you mean? I give you? so how much could I get if I sold it? Uh-huh. I mean, I probably like, oh, It would be like, oh, no, no, no, it'd be more, probably like 25 Years ago, but if you're not driving a hoop low mileage, beautiful.

It's that boring.

Now I would yeah, you can get 25 for it, which is awesome. Yeah, you know, I would probably throw another. you know, I'm just throwing numbers out 1520. Go, get a great you. I would get a used car.

Specific model that's coming out next year. It's an electric van. you know the VW buzz fans that are coming out, that are so cute and They're electric, and it would fit my family and it would fit our lifestyle. And how much is it going for 60?? Well, there's no, it.

It's really specific. Yeah, well, you got time. is the car even available?

No, okay, coming out next year. I'm planning ahead. I'm a planner. It's good.

I feel like I'm. I'm the type where, if I eat my vegetables and I finish my plate, then I can have some dessert, and So I feel like for you. you're in a similar boat where, if we attack some of the mortgage, We put some of this and maxed out our retirement accounts for the year. I would feel good about money left over going toward upgrading the car, And if it's a year from now, maybe we start a sinking fund separately for the car.

To save, to get what you, what you want. It's not like you guys. I mean we get people call on the show and their cars breaking down. they have to get a new one or they have to Sell it because they have too much car debt and they have to find another one. You guys aren't in those dire straits.

The. the low amount that we have in retirement doesn't scare you. I mean it scares. How old are you guys? How old are you guys?

So let's say you had 12 more working years making $300,000. I think you can have a fine retirement if you max out all retirement. do catch-up contributions. You may use a tax, a taxable brokerage account, outside of that, if you start to run out of options. So you guys will be okay, but that's like we're getting on a plan here.

Out of a hard year, Danielle, with a cancer scare and everything that you guys have walked through. Yeah, so there's a level of an emotion for you. That is understandable, But it's also you feel this like, oh my gosh, I just want to have fun. Like, can I just please just have fun. and you're looking for an outlet to do that.

I think you're right, but I do wonder, but I'm like.

You know, for this man, I'm like, I don't know. It's there again. You're not violating any principles here.

So we're not gonna yell at you. if you do it, you'll be okay, But I think, because of your own fear, that you haven't done a good enough job with a fireman.

You would enjoy the new car. at this point. You're gonna have some guilt. Yeah, because it feels like more an emotional purchase, Then like a rational one, you know.

Yeah, I Think you're all. that's very much right. That's exactly what I wanted to do. I wanted to feel really great.

Yep, and, and that's totally understandable. But see, if you can celebrate, go and spend $400 at an amazing dinner in LA, That's true. and go, you know, Go big like, go, do something that you're just like. Oh, I want to like kind of scratch that spending itch, because I get that I feel that I love to spend.

Rachel's not scared to spend. I have a little more of the guilt. So this was a very balanced call here, But, Danielle, thanks for letting us talk it through with you. We're honored to take the call. so glad to hear that this cancer is behind you and we hope it stays that way.

I know have my color palette, but we're going Navy this this season, very excited about it.

Very close, a good Navy, very classy, so you can check that all out. It's a one-stop shop for all of your Christmas Shopping. just go to Ramsey solutions comm slash store to check it all out. Let's get to the phones. Sean joins us in Irvine, California.

Hi guys, how you doing?

Doing great.

Good, good. Good. So I just had a quick question. So I currently, you know, I'm not in, I'm not in debt. really that much, really just from school and a Surgery that I had, but that not.

With that much? are you trying to impress us, Sean cuz? it's not working so far.

No, no. No, it's scary. Okay, cuz I need to get, I need, I'm gonna buy a house soon. Why and?

What was that? Why?

Because where our rent is just going out of control that I'm paying right now, it's almost amounting to a new house payment, a Mortgage. if I just paid like $1,000 more, I'd be in a mortgage. How much do you make? So? I make about $90,000 a year.

No, no, who's it? You kept saying our, our rent, our rent. Oh, Sorry, you kept saying our rent is going up. Who's the hour? Is there?

Well, yeah, cuz, I have like a hundred and seventy thousand dollars saved up for this.

Why are you hanging on to debt when you have a hundred seventy thousand sitting there?

No, I don't. So the whole, or sorry, The hospital bill is interest-free. so If I'm not paying interest on it, I figured not to. so what do you owe? and medical bills?

Well, I want to know from Sean. What do you, what are you calling us for? What's your? what's your number one question? Should you buy a house?

No, no, look, what's lenders like seeing how much credit cards I've have I have. is there a problem With See me having so many credit cards. Do I need to close some? I don't want to close any, because it's you know, I know it hurts your credit score.

Okay, but I'm Sean, you called a kind of a different show, Just so our advice is going to be probably opposite of what? You usually hear, because we are not fans of credit cards. We're not even fans of a credit score. We're not fans of keeping around debt. We want debt.

So, okay, so we're so.

Lenders, why do you want more credit and more lenders? You just told me you were frightened by a hundred thousand dollar line of credit.

Well, no, no, no, but like, let's just say okay, So let's say I need to get something for my my business right, some huge purchase. That's gonna help me make money in the in the long run. Okay, save up and pay cash. So move at the speed of cash. if I pay that cash, though, yes, if I essentially draining my, my, my savings and all my.

No, what's draining? your savings is making payments to 14 different lenders. You're gonna spend the money. Anyways, we're just telling you do it up front when you have the money, So you don't make stupid decisions that there's no risk.

And that's the other thing is you add on so much risk, especially in a business. We actually have a business conference going on right now with small business owners from all over the country, and it's amazing, Especially in small business, that people out leverage themselves and when something doesn't work, the amount of stress that is caused on that.

It never ends up good. And so we teach them to run their business completely debt-free. And so even for this company, Sean, we have a thousand team members and we only have business debit cards. We don't have a single dime of debt on this place. It's a three hundred million dollar paid-for building and we moved at the speed of cash.

Yeah, and to Sean, the part of this you have to understand is that is that debt? There's a weight that you carry with debt, and everyone does. and now, in our culture today, It's so normal that people get used to what they carry around. But there is a freedom that is caused when you don't owe anyone anything, and that Autonomy is what's missing in our culture today. and that autonomy of being able to make your own choices, Being able to have options because no one you don't know bank is in your life There's.

I personally done manual underwriting, Sean, without a credit score, after I cut up my cards and between Rachel and I, we have zero credit cards. That's what it amounts to, and our wallets are lighter and our souls are lighter for it. This is the Ramsey show I.

Hey, thanks for having me on. So I kind of have a loaded question. I'll just give you a little background info real quick. So my husband and I finished baby step three and we want to buy a home. so we don't throw away our money on rent essentially.

That was a loaded question, Esther. a lot to unpack there, So, how old are you two?

So I'm 22 and my husband is 23.. Okay, and you're in baby step three.

Yeah, when, when will you be done with that three? Oh, you're done. Sorry. We just finished.

Okay,

So now we're on to what we call baby step three B. You want to save up a home down payment and you're gonna do that? How quickly do you have a goal?

Our goal is within a year. how much can you save in a year?

Okay, so, Esther I, When it comes to buying a home, timeline wise, I wouldn't buy one that I'm not there at least five years. So if you guys won't even qualify for something and you're only gonna be there too. I would, I would probably rent Until he's out of the Air Force and you guys know. would you guys be stationed and move around, do you think for for a good? season?

Yeah, yeah, you would be. yeah, Do you guys recommend like? do you guys not recommend buying a home and then renting it out?

No, because you're gonna move and now you're gonna be a long, a long-distance landlord, and then you're gonna want to buy something else and then you're not gonna have the money to do it, because it's all tied up in This mortgage that you still have and so you can see how it creates this weird cycle of risk and stress. Yeah, so I'm gonna pause on this dream. I want you to be homeowners, but, Rachel's right, I want you to think long-term and not just what's gonna help us in the next two years. and you said these words at the Beginning that I want to call out, because I've heard this from many, many people. you said we're throwing away money on rent.

Homeownership can really be, and you buy at the top of the market and then you know Who knows, and then you guys go to sell it in two years and you don't know where it's going to be. So there's just not enough time for it to fluctuate up and down, to have some kind of sustainability, To write out any weird ups and downs. So yeah, I would. I would still be having the dream, though, Esther. And if you guys, how long will you guys be?

Yeah, I mean, I'm assuming it'll be at least 10 years. Okay, so it'll. it'll be a while, Yeah, but with that money, would it be, would it be silly to upgrade our cars?

What, what money do you have? Do you? what do you have in savings? or you're just talking about future savings? Yeah, future savings, yeah, I think upgrading your cars, I think, is great, and again, in 10 years You guys will be in your mid 30s.

Tion joins us up next in Washington DC. Tion. What's going on?

Hey, how you guys doing? I'm excited to be on. So I have a question. I recently acquired Or inherited some rental property or property. I also have my own rental property, But I do also have some debt.

Cool. How old are you?

So I make about 160.

Great, and how much debt do you have?

Okay, so the debt. so I have 53,000 spread out between three credit cards. Ooh.

But what's the, what's the? what's on the credit cards? just lifestyle or a?

little bit of lifestyle.

Also a little bit of lifestyle. It's fifty three thousand dollars worth the lifestyle. Well now, what else? is there other stuff, or is it just lifestyle?

So I also recently lost a parent. So I had to put a lot of you know, funeral expenses, okay On credit cards as well.

Is that where the inherited property comes into play? it is okay.

Okay, $53,000 in credit card debt. What else? what are you on your car? Yeah,

So I don't have any car payment. So I paid for a car in cash, okay, so no, no car payment. awesome. I do have a purse. Yeah, I have a personal loan for 1,800.

Then this property that you inherited, What's it worth and what's out on it?

So it's worth probably around like three hundred thousand, okay, And about seventy thousand left on it. Okay, and then you have another. oh, go ahead. Sorry. Oh, Yes, so I do have another rental property.

You think it's worth 110?.

It's worth about 200.. I would say 200,000.. Okay, and then what's your primary residence?

So no mortgage, okay, yeah, no mortgage. Yep. Okay. Awesome.

All right, I have a plan. I don't know if you're gonna like it.

Okay, clear at all, because if you got, if you could sell it for 300, no 70, the family ones 300, right?

Yeah, yours is, yes, 200 and you you owe 80. Yeah, you've 120 in that one. Yeah, so if you wanted to keep the more expensive one, yeah, You could do that. But one of these has to go. either way you could knock it.

But hey, Tian, when you clear out your debt like that, you can't go back into credit card debt for lifestyle. So this is gonna be a sweet. that's gonna help you, but Tian needs to change, Tian, or it's not gonna work. You're gonna be back in the same position if you're not careful. Yeah, you're too successful and too smart.

I'm excited for you, though, Tian. You got some good stuff ahead. futures bright my man. This is the Ramsey show.

Yeah, thank you for taking my call, and I am curious about debit cards that are store specific and if you feel like they're okay, or if you'd group these in The cards that you would give a plastic surgery.

What a fun question for Rachel. This is right up our alley. I'm gonna be honest.

I was hoping and praying that it would be you too, Cuz, I'm like, well, maybe there's a little grace here. your prayers were answered. were the nice ones. I know I have the target red card. I opened it almost 10 years ago, but I have the version that is Specifically a debit card.

Yeah,

Holidays coming up.

Yeah, so what's your? you're saying? Is it okay to use like? do you have Rachel and I's blessing?

Not necessarily, is it? Okay? but we've been going through our wallets and we've just been trying to do like a cleanup and looking at everything, and I got my New target card in the mail and I have to update it, and I just sat there staring at it.

Do you feel like you have a spending problem? are you guys in debt? What's your financial situation?

Oh, no, we are on baby steps four, five and six. So we're both employed full-time. We have a three and a half year old, a 12 week old. So we're in the stage of buying a lot of diapers, buying a lot of wipes. I.

feel that.

Yeah, so I mean and that's what, and honestly, that's where I bought my diapers and wipes blend with my target red card debit card, Because you would get the gift certificate you would get like the. I don't know.

It would be like the $10 off each purchase. then you get like gift cards. If you spend a hundred, you get $20 gift card all of that.

Which was great, because then I would just roll that back into diapers and wipes, because that's what I used it for. So no, I think it's great. I think I think any level of spending that has Convenience with it, and what I mean by that is like the Amazon app. I'm gonna target red card. I guess I'd say more.

Yes, exactly, If you find yourself going to Target way more and buying things you normally probably wouldn't buy, you're a normal woman. You can get 5%. We all do that at Target in there. So yeah, it sounds like you're a very reasonable, logical person.

I appreciate the question, though, because I think Oliver and I think too, you know, Blaine, I'm like I have to ask myself. Why am I spending the things I'm spending? Am I spending it to? fill some kind of void, to have some good level of excitement in life, to Want to feel cute in that outfit, like whatever the thing is like? what's the reason I'm spending?

Yeah, funny Amazon purchase. Blaine. I don't know if you've been through Financial Peace University. Have you and.

We have the full every dollar class. We've watched the first two, but we haven't actually participated in class.

Okay, so you already have it, though. I was gonna gift it to you. All right. Yeah, so in in, I believe less than five. I appreciate it.

Sure, how can we help?

Correct. Okay.

correct, and and probably You could probably pack another two on there. just medical bills. Sure. You know that we're that we're paying on. and Man, this house.

Insurance. we're up against a clock. Jacob. What's your? what's your mortgage payment?

So I'd make a hundred and seventeen a year before taxes, And our mortgage payment is twenty six fifty.

that feels a Little high. it may not be worth selling at this point, But what I would do is give it six months. see if you can decrease expenses, increase income, Before I go ahead and sell the house, but, man, if it's stressing you guys out that much, it's no longer a blessing, It's a burden, and for those reasons I would probably be out on this thing. Sorry to hear what you're going through, man. This is the Ramsey show.

Hey guys, it's Rachel Cruz. when it comes to teaching kids about money, Moms tell me all the time just how overwhelming it can feel to get started. That's why I'm so excited to tell you about financial peace, kids. This toolkit was designed to make learning to save, earn spend and give money fun for both you and your kids. The best part it only takes 10 minutes a day.

Welcome back to the Ramsey show. I'm George Campbell, joined by Rachel Cruz. This is your show, America. You can call us at triple, eight, eight, two, five, five, two, two, five. want to remind you guys, in honor of Veterans Day, We're giving away financial peace University to 10,000 veterans Totally free now, through Monday, November 13th.

Today's question comes from Chris in Michigan. I know this may be a silly question to ask, However, if I hear your advice on this, I might feel much better. a couple of weeks ago I went to the grocery store To get a few snacks and items for the week and the total cost was $100 with coupons. then, on my social media, I started seeing reels and tik-tok videos about how bad inflation is today compared to the 1980s and 90s. they say that $300,000 is the new hundred thousand dollar in buying power for homes or to be considered well off.

Okay, so, Rachel, I've seen these videos. Yeah, there's this real estate guy out there who makes all these videos comparing the 1950s and 60s and 70s and the prices then versus what it takes now and the incomes now. Yeah, and how much more impossible it feels. Yep, And all it is is really rallying people up to get clicks and views and the data's skewed. I mean even on that video.

And I think there's a reality To like the real estate side of it, right? I'm like, it's yeah, houses are insane, interest rates are insane, But it's also perspective, because when you look back at certain times, even in the 80s, what interest rates were on houses, It was like 16, 18 percent, right? Yeah, for mortgages, and if it dropped to 12 percent, everyone went crazy. And so we're at. you know, that's seven ish percent.

Yeah, if you need margin, one of the things stealing from your margin is your debt, and so getting out of debt is a huge help.

If you're feeling the pinch and I would say this too, and I'm not a Historical economist, George, I know you may think that's I, but I'm not. But I would say life is like it is a roller coaster. It is up and down and there's gonna be good times. There's gonna be bad times. You know you look at away and what the housing market was.

So well, Rachel, you always say, you know Comparing your life to someone else's is always gonna and just kind of drink in your own poison in a sense. And so yeah, the same goes for comparing your life to the folks of the 1980s and the 70s, in the 60s. Um, first of all, do you understand the standard of life? We now have? y'all need to get a new iPhone every single year.

They were usually a one-car family. the square footage average square footage of what a home was. there was no marble countertops.

There was no white cabinets. They were all these small, dilapidated homes and dinky cars, and no one cared, but now we have social media belts.

So, over those days, George. Oh, yeah, walk around the van simpler times.

Rachel's walking around the van while it's going 90 miles down the interstate.

It's just. it was a different world, jaw in so many ways. And so, yeah to your point, George, if you just sit there and complain about it, Sure, it hurts and you're like man, that'd been nice to have bought a house five years ago, Sure, but you didn't. so you are where you are now. So what are we gonna do about it?

I can tell you what doesn't help boomers doing. scrolling Instagram is not gonna get you any closer to your financial goals. So you can hit heart on his thing and leave a comment. say oh my gosh, She's so right, life is so hard. Or you can just get up and go to work and take the side job and get out of debt and do the hard stuff To get to where you want to go, but I see both sides of this.

Bill, Continue to fill your feed with what you watch. That's right. So I opened mine up and it was all t-swift coming out of a New York Restaurant. all her friends, because obviously that's what I've been looking at recently. So there she always.

That's the positivity we need.

Hi, Thank you for taking my call. Sure. My husband, my husband and I went through the financial peace University several years ago and we are debt-free.

awesome.

Thank you, and we are we just We have a million dollars now.

Well done.

Yeah, so, but my question is we are both going to retire in about three years And we have some cash and we're trying to figure out where the best place would be to put the cash We have. about three hundred eight thousand dollars is just sitting in our bank, and A hundred thousand of that is earning about four point zero, seven percent interest. But the other two hundred and eight thousand we're thinking about putting towards maybe a rental property, because we don't have any of those. But just wanted to get your Advice on what might be the best place to put that sure. So you've got million in your nest egg.

What are those in what accounts?

So My husband has a work for one slash Roth account. that's got The three hundred and 360,000 in that and then our home is 364,000. We have 380 in cash and then I have a really small Retirement count of like 3200 from when I worked for a company before. Okay, good for you.

And you're going. hey, should I put it in real estate? Should I be investing this? What's your take, Rachel?

Yeah, I mean, I think you guys, at this point I would, I would continue to fund that 15% and to your into your Retirement, as you guys are working for these and you got paid for a house, right? Our house is paid. Yeah. Yeah, I think I think diversifying Yeah, and taking 200, and I'd pay cash for it. But also know, Linda, when you get into real estate, it sounds all great and wonderful and it is to a degree.

Yeah, I'm just parking a high-yield savings account. for now, when you're ready to pull the trigger on real estate or invest it, go for it. You guys are doing great. This is the Ramsey show.