Own Your Mistakes and Decide That You’re Going To Be Different
2024-03-22 01:56:19
The Ramsey Show believes you can build wealth and take control of your life—no matter what stupid mistakes you've made with money. Join as Dave Ramsey and his team of experts answer your questions on the top problems holding you back. Listen now or ask your question live by calling 888.825.5225 weekdays from 2–5 p.m. ET. Learn more at www.ramseysolutions.com
Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and build actual, amazing relationships. I am your host, Jade Warshaw. I am joined by my buddy, my friend, Dr. John Deloney. He's also written a couple of really awesome books.
We're going to be taking your calls all hour about your life, your money. Feel free to give us a call. The number is 888-825-5225, and we will chop it up with you. Hey, let's get right into it. We've got Elsa in Detroit, Michigan.
What's going on, Elsa?
Hi there.
Hi. How are you?
I'm here. How's your day?
My day's going good, but I want to know what's behind the sound of your voice.
Yeah, you sound nervous. You all right?
Yes. Yes, I'm fine. I'm here. I'm just wanting to get some advice from you guys.
Okay. Yeah, you got it. Tell us about it.
Well, I've been a stripper for 10 years, and I now know better. I know the dangers and how bad it is to work there. I've realized how unstable that world is, and I'm 29,, so I just want out, but it's me and my financial goals right now, and I have some debts to pay off. I have a dilemma. I just don't know if it's worth me staying there to pay everything that I owe or just get out and find a normal career, find a normal job right now, and then, little by little, go on to move on to something better, go on to my university dream,
and move on with.
my life.
Is it true what you said, that you kind of made it seem like only your debt is keeping you in that lifestyle? Is that true? Because you just laid out that the back half of that was this beautiful scenario that didn't involve the dangers and lifestyle that you laid out at the beginning of the conversation.
Yeah, I didn't know. Yeah, that's the only thing that's keeping me, really. Yeah, it is.
How much debt is it?
It's about, let's see, it's about 12,000 medical bills, and then it's about another 12,000 credit card debt, and then I have 18,000 left in my car.
Okay.
Where do you live?
Detroit, Michigan.
Do you have a home? Do you have an apartment?
Yes, I have an apartment. I live by myself. It's just my dog and I. I've never really been the typical dancer that has three, four girls living with her, or has a pimp. No, I've actually, I've been smart in that aspect, but I've become friends with girls that have that lifestyle and I've now been, you know, it's just been dangerous for me and I just don't know, I don't know if it's worth me staying there.
No. I think that's your answer. No.
Yeah.
That's your answer. You said it's dangerous. What I'm looking for, what I was waiting to hear from you, was, I want to get out of this, but I can't because of, and then maybe there being some danger to you, like bodily danger to you, because of the people that you're associated with. I was waiting to hear something along those lines, but truly, truly, truly, Elsa, if you're telling me that the only reason is because of this debt, then I want you to know that when you told me those numbers, I didn't break a sweat. My heart rate didn't increase at all.
We take hundreds of calls a week, thousands of calls over time. Millions of people have called this number, and when you told me that debt, I was like, oh, okay, Elsa can do that. She's capable, she's confident, she's smart. There was no part of me, based on anything that you said, that would make me say she can't go out and get, to your words, get that education, get a job and go and work in a profession that doesn't cause you to take off your clothes or do things illegally. There was no part of me that thought, I don't know for Elsa, I only had confidence in you.
Well, thank you. It's just, it's so hard to have confidence in oneself whenever you've been there since you were 18,, 18, 19 years old, and you were told many years, like, you're only here to please men, you're not worth it, you're not good enough, you're not, you're not this, you're not that. And then you don't have a mom or dad to tell you any different. You know, I don't have, I don't, it's hard. It's hard to believe that I can make it by myself in the real world with a normal career.
It's just, it's so hard.
Where are your parents?
Well, my dad, my dad, passed away when I was three and my mom, she's just not in my life.
Do you have anyone else counting on this money, or just you?
What was that?
Do you have anybody else counting on this money, or is it just you?
No, just myself. It's just me and my dog, and that's it.
If you were to give me a number, how much money do you need a month to make your minimum debt payments, to make your rent and to get some food for you and your dog?
Well, my rent's $1,800, plus food. I don't know, I spend $120 a week, I guess.
Okay.
My car payment, I don't know, I guess $3,000, $4,000?
. Is that?
It's not crazy.
No, that's not crazy at all.
So, you called us, okay? So, here's my promise to you. All of us, every one of us, finds ourselves at some season in our life in the dark. And we don't know which way is up. We've done something that we don't think we can come back from.
We found ourselves in a job that we can't quit. We have found ourselves 10 years into something that has compromised who we are, and yet we don't see a path out. And there's nobody that we can see that has a light at the end of any tunnel, anywhere. And then you call us.
And what Jade and I are telling you right now is, we haven't been in your particular situation, but we've been in our own dark rooms, and we reach out and call somebody that we trust and they say, you can't see it yet, but I promise there's a path out.
And that means the first step you take is going to have to be a scary one, because you won't see where you're stepping. You're just going to have to trust Jade, you have to trust me, and you have to trust that millions of people before you have walked this path.
It's going to be scary. Are you in?
Yes, of course.
So what does it look like for you? Let's say you come off this phone call today and you say, you know what, John and Jade, I'm going to take that first step and I'm going to leave this profession behind and find a different profession. What does that look like for you? What's the first step to you saying, I'm not stripping anymore? Is it walking into the club and just saying I quit?
Is it as easy as that? Tell me a little bit more about that.
That's so hard to match to just not go back to that club anymore. It's so hard because I'm just, I have everything written down here, my whiteboard, and I'm seeing these numbers go down little by little, you know, and I'm just...
Yeah, but you know what else is going down and down, and down and down?
Your sense of self, your sense of who you are, your sense of purpose, your sense of your ability, your own ability to breathe, to be okay with who you see in the mirror. And that's way more important right now than a dollar amount. Hang on the line here. We're going to hold you over because we want to continue this conversation with you. I'm really proud of your bravery and your vulnerability.
We're going to figure this out. Okay, hang on the line.
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You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. And first segment, we had a caller on from Detroit, Michigan, Elsa.
She was explaining her situation to us. Right now, she's in the stripping industry, and she's making a lot of money doing that. She's got $42,000 of debt, and she's not sure that she's ready to leave that profession in order to kind of pursue that life that she's always dreamed of, going to school, getting a, quote, normal job, and getting into, you know, a lifestyle that's not full of danger and scary things. So we've got her on the line. And Elsa, did I get that right?
We're kind of just trying to figure out what's your next step forward, right?
Yes.
Cool.
So, you know, John and I, we had a couple minutes to just talk on the break, and we were thinking, you know, for you, it's not as easy as just walking into a club and saying, that's it, I quit. Right? It sounds like you've got some feelings tied up in this. This is your community. It's the only thing you've known since you're 18..
Right? So it's not just that easy.
And Elsa, do you have a bunch of people in your life telling you you're crazy, the money's too good, you're an idiot, you're whining about nothing?
Yes. Actually, just a month ago, the manager sat me down and said,
you're crazy for wanting to leave this industry. Why don't you just take two days off? Because I worked 40 days straight. I was so focused on this one credit card that I owed about $9,000, and I brought it down to like $500 in those 40 days.
How much debt did you start with? Can I just ask that? What did you start with?
It's just credit cards that I coveted. I moved. I used to work in New York and then Vegas.
So it's like you pay it down and run it up again, pay it down, run it up again? Yes.
And I just, I wasn't, I would always, I kind of always did that.
I mean, can I just ask, what are you making? Like, what do you make on an average week? What do you make an average month?
Maybe $3,000.
. A good month, maybe $45,000 to $5,000..
Listen, listen, I'm going to say this, and I don't mean anything by it. That's all right. Like. it's fine. But you could easily go out and get another job to replace that.
Like. I feel like there's an erroneous part of your thinking. that's like, man, this money is so good. There's no way I could make that like on the outside. And I'm just sitting here telling you like, yes, you can easily.
John?
Yeah. I'm going to ask this. almost the same way. I would ask somebody who's ready to stop drinking. Because here's what this is going to cost you, Elsa.
It's going to cost you everything you've known since you were 18.
. It's going to cost you a bunch of parasitic, awful people who have, are basically pseudo family, but they're not. They're leeches or predators. It's going to cost you all of it.
And it's going to change your day to day. It's going to change. You have to get up and you're going to have to go to a regular job and you're going to have to interact with quote unquote regular people in the light. And you're going to have to learn to not feel socially anxious about that. And it's going to take some time and some practice and it's going to be uncomfortable.
And if you do it, you're going to wake up in eight months and you're going to easily be making, you're going to be working a couple of jobs, but you're going to easily be making $4,000 over the course of a month.
And you're going to start to accumulate something that you have never had. And that is dignity and self-worth and a pride in yourself.
Is that worth it? Because if you're not ready for that, that's okay. We love you. We'll still be your friend. We'll hook you up with FPU, but none of this changes.
And you know how this ends, right?
Well, yeah, it's taking a toll on me.
I know it is.
I'm having nightmares.
I know it is. Are you done?
I'm just so scared.
Are you done?
If you're done, we'll help you out. We'll give you everything we got.
I want to leave this strip club just as much as I want to breathe. I want to go to bed early and be in bed at 7 or 8..
Let's make it happen. Listen, we're going to give you three, four, five steps, whatever steps, it is, little by little, that you can take today and make changes today and throughout the rest of next week.
The physical effort that it's going to take is going to be a lot less than the mental effort.
Because, to John's point, like you said, this is all you've known. But physically, for you to say, okay, I quit. Or tonight I'm going and I am applying for every job I can think of. I don't care if it's a Kroger grocery store. I don't care if it's McDonald's.
I don't care if it's Amazon, stocking shelves. Whatever it is, you apply for it and take the first job you get. And then you can always upgrade later. Take the first job you get out. I think that's step one, huh, John?
I want you to have two jobs by the end of this week. Will you commit to that?
I will look for two jobs.
No, no, no.
You look for 50 jobs. You're going to accept two of them. And you're going to start at 7 or 8 in the morning. And you're going to get done about 6 o'clock at 7 at night. And then you're going to go home and you're going to play with your dog.
And you're going to go for walks. And nobody's going to chase you.
And then you're going to go to bed. And you're going to practice going to bed. Because you have never done that. Not in your entire adult life have you gone home and just watched a TV show and gone to bed. Right?
I just crashed. And I crashed for 12, 13 hours. I'm just so exhausted. I hate wearing those heels. I hate it.
Then be done with them. Wear running shoes like I'm wearing right now.
They're amazing, right? When you get off the phone, you're signing up for Uber. And you're signing up for Instacart. You have an $18,000 car. That's thing one.
And then I want you to go down the street to two, three different grocery stores. Apply. Get the job. Just like that. Just like that.
There's nothing.
Now you can't go, well, where should I apply? What should I do? I just gave you five options.
So I should get a normal job, even though it's going to take me longer to pay this.
It's not going to take you that much longer, girl. You told me you're making $3,000 a month. You're not Scrooge McDuck on that. All right? Like, I want you to stop saying that that's like this pinnacle.
It's not. And I'm not saying that to be ugly. I'm just telling you the facts. It's not a ton of money. That's not a ton of money.
That's what people make when they call our show and we tell them, you need to make more money. That's what that is. And so I don't, I'm not going to subscribe to that with you that you were just doing. Okay. And you're about to do a lot better.
Like, you're a lot. You're about to do so much better. And I know that you said earlier, no one, no one, has told you that you're worth anything, but I let John and I be the first to tell you, man, you're worth so much. You can do so much. You're just so valuable and there's so much talent inside of you and you have so much to offer.
We see it and we hear it. just talking to you. We truly do.
And if you need to borrow some of our self-belief for a minute, go for it.
Borrow it.
But listen, yes. Go, get two jobs tomorrow, or start this afternoon, but start tomorrow. And the moment you sign on job number two, I'll start tomorrow. You make a commitment. I will never walk back from that club again, ever, ever.
I'm going to block the people on my phone. I am out. I am out. I am out. If I have to change apartments, I'm going to change apartments.
I am out. And there's going to be a season of loneliness. You can go get involved in a local group. You can hang out with people at your new job. You can go to a local church.
You can figure that part out, but we're going to start cold turkey. We're out. I'm out. I'm out. I'm out.
And we're going to give you all the tools you need. We're going to give you a budgeting tool to help you budget your money. We're going to set you up with coaching. We're going to give you Ken Coleman's career assessment so you can figure out what your path is toward doing what you truly want to do, career wise. On our end, we're going to make sure you have everything.
I'll talk to you separately on my show about how to get into the college that you want to get into.
We're going to walk with you.
We'll hook you up with a financial coach so they can walk you through your budget. You think $3,000 a month is a lot of money. It's not.
No, no, no. I said I make $2,000 to $3,000 a week.
Oh, okay.
So $6,000 to $8,000 a month. Yeah, that's a good salary.
That's a good salary. But looking at what your lifestyle is, A, it's not necessary.
It's not sustainable.
And B.
I'm not living a fancy lifestyle.
I know.
I'm actually frugal. I know.
My point that I'm making to you, Elsa, is you don't need that much money a month. You told me your rent's $1,800 a month. You've got $42,000 of debt. Right now, an average income is going to be just fine for you. That's what I'm saying.
If you can get $4,000 a month, I'm happy for you. You're making steps in the right direction, and then that income is going to go up and up and up. And right now, that money's going somewhere. It's being piddled away on debt and bad decisions because you haven't known how to manage that money. We'll teach you how to manage your money, and you can make less money.
go further when you know the correct way to manage it, and we're going to help you with that.
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You're listening to The Ramsey Show. I am Jade Warshaw, joined by your other host for the day, Dr. John Deloney, and we're here to talk about your life and your money. So if you have a question, if you want to talk about budgeting, you want to talk about why your spouse never sticks to the budget, if you want to talk about student loans or paying for college, whatever it is, give us a call. The number is 888-825-5225, and we'll help you out.
That's what we do here at Ramsey Solutions. We're really just existing to help you with your life and your money, and that goes through a lot of different aspects, whether it's your mental health, your well-being, your career. It spans all these different areas, and because of that, we're offering a really, really cool live event coming up here in May. It's the Total Money Makeover Weekend, and a lot of you are probably familiar with the book Total Money Makeover. It's kind of what started all of this.
It's a process to get your life and your money together, and it works through the series of baby steps. It's what we teach on every single day, day in and day out here at Ramsey Solutions, and we're doing an event surrounding that. It's the Total Money Makeover Weekend. It's going to be here in Nashville or Franklin. here at our headquarters, Ramsey Solutions.
We have a really, really cool event center. It's up on a hill. It's beautiful. It's brand new, and that's where the event's going to be. It's May 10th and 11th, so you can come up there.
It's one weekend, and you're going to get a crash course on all of the things that you hear us teach about, and it's going to be all the personalities spanning all of those different areas of your life and your money. So it's going to be myself, Dr. John Deloney, Ken Coleman, of course, Rachel Cruz, George Campbell, Dave Ramsey, the GOAT himself will obviously be there. And I'm really excited about this event, because it really doesn't matter where you're at in your money journey. You could be at baby step one or baby step seven or not really sure if you want to dip your toe into the water.
yet. This event is for you. There's going to be so much information. If you've ever been to a Ramsey event before, this one is about to blow it out of the water, totally different. We're just taking a completely new take on things.
It's going to be really, really cool, so don't wait to get your tickets. Our Platinum Plus tickets are already sold out. Whenever I say Platinum Plus, I feel like a rapper in the 2000s. Whenever the Platinum Plus tickets are sold out, but you can still get Platinum or VIP if you get them now. So get your tickets.
You can get them at RamseySolutions.
com slash events. Do it today. I'm excited, John.
Bling, bling.
Bling, bling.
Every time I come around your city.
John, just when I thought I could have no more respect for you, you go and do something like that.
Pinky ring cost of our city. Let's go out to Leah in Los Angeles. What's up, Leah?
Hello. Hi, Caden, Dr. John. Thanks for taking my call. While I'm calling with a question, I am trying to find out if it makes financial sense for me to put off buying a house or maybe not buy one at all.
Why?
Because you live in Los Angeles and there are a billion dollars.
Listen, I just want to know. She might make $5 million a year. I don't know. Let's hear it.
Okay, so a little background. I'm 45, happily divorced, no kids. It took a long time, but I made it to baby step number four. That means all credit cards, car payments, all paid for. All right.
I now max out my 401k every year. I have an emergency fund for about six months. Good job. Thank you. But that said, it doesn't translate too much.
My 401k is only about $250,000.
. Okay. My emergency fund is around $40,000, sitting in a high-yield savings account. Okay. I am never, ever remarrying, and I don't plan to have kids.
So I'm just waiting for.
Hey, hey, listen, listen. Just real quick. Jade and I will both commit to coming to your wedding within 24 months. That type of, like, I guarantee it. You will be married in 24 months, and we're going to do our best to be there.
All right. Keep going. Keep going.
Okay. So $250,000 in retirement, $40,000 saved, all your debt's gone. That's not good enough for you. Tell us more. Yeah.
Well, I think, you know, conventional wisdom says it's a waste, you know, obviously, to spend money on rent instead of paying for a mortgage. But I travel extensively for work. I don't know when or where I'm going to eventually settle down. So it seems to me like maybe it's better to keep stocking away money instead of trying to split down like a mortgage payment plan.
Well, let's break up that way of thinking. Okay. It's not so much that rent, throwing money away. People think of rent as throwing money away or it's a waste. And that's not true.
Obviously, if you're renting until you can buy, it's just you buying time. Like you're buying the ability to buy a house the right way, right? That's what you're doing when you're renting. It's not you throwing money away. But on the other side of that, I kind of want to make you understand that when you are renting, for most of us, myself, John, everybody, for most of us, the biggest line item on our budget is where we live, right?
Whether it's a mortgage or it's a rent, it's housing is the biggest line item. And as long as you're renting, that line item is not stable. It has the ability to fluctuate. It has the ability to change. And in most cases, it's just going to go up, up, up.
And how old did you say you were, Leah?
45.
45.
. Here's what I want for 70-year-old Leah. No house payment.
And so when you think about stability, you think about risk. And as you get older, and I can imagine coming out of a divorce, I can feel it in your bones. You're playing catch-up in your mind, and you're playing, I will never be dependent again in your mind. So if you play that game all the way to the X factor, all the way out, don't be reliant on a landlord, like Jade said, who's going to make your rent go up and down at their whim or whatever.
Because at that point, you are throwing money away.
If you were my sister, I would tell you, the greatest gift you can give yourself right now, and you're already well ahead of the game in terms of your finances. By the way, if you keep that $250 invested properly, then it will double every seven years. So it will be $500,000, be half a million dollars when you are 52.. When you're 59, it's going to be a million dollars. When you are 66, it's going to be $2 million.
You see what I'm saying? So you're better than you think you are. Okay. What I want you to think through, though, is, what age do I want to be when nobody's going to tell me, you know what, your rent just doubled. I don't want that to be part of your equation.
But also, Jade, I want to honor the fact that she, you don't know where you want to live yet, do you, Leah?
No, and honestly, just seeing my parents and my in-laws, what they have to do to maintain their homes, it just seems like way more work than it's worth.
Get a patio home.
Yeah.
Get a condo. Yeah.
I think you're coming up with excuses. I mean, don't get me wrong. Home ownership definitely does have something that comes with it, right? But you don't have to have this giant expansive yard. You don't have to have water features and hedges that are cut into animal figures.
You can keep this very simple. You can have a condo. You can have a place that's got an HOA, and there's something to be said about that. And, you know, yeah, if something happens with AC, you're responsible. If something happens and you get a water leak, you're responsible.
But I think you can handle that, especially at the expense of having a paid-for living situation.
Jade, do you think, maybe because I'm thinking about this in terms of debt, like 30 years of debt, you know, that's what it sounds like to me.
It's not debt. It's an investment. Let me say this because this is not just you, Leah. This is a lot of people listening. We talk about investing a lot, right?
We talk about Baby Step 4, 5, and 6, and you're investing in your 401K. But don't forget, real estate is an investment, guys. It is not the same as debt. Real estate is a forced savings account. When you pay your payment, it is not going down a black hole.
It is going towards equity. It is another form of a savings account. And the great thing about it is the interest that it pays is great. When property values go up, that's your interest making payments towards you. So it is an investment.
It is not throwing money down the drain. Now, to your point, you have to treat it like the ocean. Like you need to have a proper, you know, fear and respect of it, because there is a situation where, if you buy a home in the wrong way, it is a burden and it is not a blessing, right? And so, if you do choose to do it, Leah, I want you to make sure that you're following our parameters so that it is a great investment, it is peaceful for you, it is something that you enjoy having, and, like John said, something that you will eventually own. And to add to that, most people, when we look at most millionaires, Leah, their portfolio is between three areas.
It's their home, which is usually one of the biggest portions. It's their 401K, their retirement investments, and just their cash sitting around. And so home ownership is key. 67% of millionaires that we've surveyed, and we've done the biggest survey of millionaires ever, 67% of them own their homes. It's a big component to this.
So I don't want you to be afraid of it. I just want you to have the information going in to where you're getting a home payment. It's no more than 25% of your take-home all-in on a 15-year fixed rate. If you do that, you're going to be sitting pretty. This is The Ramsey Show.
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What's going on? You're listening to The Ramsey Show. I'm your host, Jade Warshaw. I'm joined by Dr. John Deloney.
We're taking your calls all afternoon long, really, so you can give us a call. The number is 888-825-5225, and we'll be here to help you talk through whatever it is that you're going through. It could be something with your spouse. It could be something with your family, whatever it is. Money touches all these areas of our lives, so make sure that you are giving us a call so we can help you through it.
We've got Jessica, who's in Chicago, Illinois. What's going on, Jessica?
Hi, how are you?
I'm doing good. How are you?
I am happy but terrified. I'm going to tell you why.
Okay, let's hear it.
So we just found out that we're pregnant with baby number two.
Oh, yeah. All right.
Yes. So my question is we are in the baby step two right now, and I know you say to usually pause and go into stork mode. What happened was when I called insurance, they just said we're going to put you back on pregnancy Medicaid, which usually means everything is covered and free. But after a traumatic birth with our first daughter, I kind of want to go with a midwife and a home birth. Now the minimum, because nothing is going to be covered through insurance, would be $5,200.
And I'm like, well, do we just use the insurance and have a hospital birth? Because that chunk of money would be pretty big towards her snowball.
Or do we put aside for the birthing experience that we want?
What was the traumatic birth the first time around?
So, well, I've actually had two births. My first one was I have an open adoption with my first daughter, and I actually hemorrhaged to the point where I was almost bleeding out. about four days after. The second one, I had a subchorionic hemorrhage, which is where you bleed while they are in utero. And it was just so painful and so intense.
It was nothing like my first birth, which was actually pretty okay.
Okay. What will a home birth solve? Because you've got two hemorrhaging. And the reason I'm asking this level of specifics is I'm all about, people at the office make fun of me. I'm all about homeopathic everything and, like fight the man.
I got my own gardens and all that stuff.
But if this is something that is part of your values and what y'all want to do, great. Knock your lights out. It's just going to come at a cost. If you're doing it to try to avoid a, some sort of malpractice issue that you ran into the first few times, then that's another issue. And it doesn't sound like you're solving sounds like the first issue and you're trying to make it okay by saying what was bad these other times.
So we're going to do this one instead, instead of just saying, this is what we want to do this time.
Well, it does more align with our values. It's one of those, if I would have known then what I know now, I would have loved to home birth all of my babies with a midwife. So it is, you know, you grow up, you change. It is realigning more with our values to go through a midwife and have the baby at home.
Listen, I'm with it. The whole point of stork mode is that you save up for whatever cost the baby could increase. And so if you can pay for this in cash, if you know, for a lot of people, the 15, 5,200, that would be likened to their deductible if they hit their deductible. So at any cost, most people are going to have to pay that much. You mentioned Medicaid.
Can you tell me more about that?
Yeah. So I've been on the state pregnancy Medicaid for both of my previous pregnancies and everything has always been covered. I've never received.
Is that due to lack of, is that due to lower income?
It was due to a lack of income from my first cue when we, so we went through marketplace this year and me and my husband did not qualify, but our daughter did qualify for the Medicaid. And when I called insurance, they just, they didn't even ask me questions. They looked at our marketplace and they're like, Oh, we'll just put you back on the pregnancy Medicaid.
Okay. I look further into that, because if, if you don't qualify and you take it, you're going to have to pay at the end of the year anyway, but you're going to have to pay them. Okay. If you take the money and you don't need the money, it's going to be back on your tax bill and it's going to be back. They're not going to let, just let you take it if you don't need it.
If your income outweighs it,
but your husband don't have a job with insurance.
No, they don't offer insurance or his job. No. Okay. And then I'm a 10 99 so.
Okay. Okay. In any, in either case, if you decide to do this, make sure you're paying cash for it. Like I said before, that's the whole point of stork mode is to save up for baby and it's your prerogative how you want to birth the baby.
Yeah. I mean, that's my take on it.
It's just going to come at a cost and you're going to decide our values and in, in situation a, B or C is going to come at a cost of X, Y, and Z. And I think where Jade, where people get frustrated, is we really only want to eat organic foods or we really only want to do home birth. So we really don't want to go to a traditional doctor. We want to go to a homeopathic doctor, but my insurance doesn't cover it. It's going to cost this.
Okay. That's a choice. It's just going to cost X, Y, and Z. And it's going to take you a year longer to get out of debt. If that's, if that's your values, it won't matter at all.
Right. But your values are your values, are your values. I agree. I mean,
all of this is about trading. You're trading one thing for another. And in some cases it's trading what you want now for being in debt a little bit longer, honestly. So let's go to the phone lines. Thank you for the call, Jessica.
That was a good one. Let's go talk to Heather in Atlanta, Georgia. What's going on, Heather?
Thank you so much for taking my call. I was wondering if I should sell one of my rental properties to pay off a pretty chunky IRS debt that I have. Ooh, tell me about the rental.
I would sell my child to get rid of the IRS off my back. What do you owe?
At this point it's down to 47.
. I started with 150 and have just been throwing money, throwing money, throwing money at it. And we've got it down to 47..
And if you sell it, what will it bring?
If I sell the, if I sell the property,
we have, we have a few. My, my concern, you know, is if I sell it, one of them, if each, they all, have substantial equity now,
my thought is that kind of backstory. is we started getting these rental properties to help find either a, um, supplement future retirement with rental income, um, or B sell them and have a paid for retirement home.
Listen, I'm always, here's where I stand on this. I mean, obviously you bought these properties long before you found Ramsey, I'm guessing, but I'm not going to. ha, I am not going to have rental properties paid off while I live in a home with a mortgage. That just doesn't make sense to me. If anybody's going to feel the peace of living in a mortgage-free home, it's going to be me.
That's the way I feel. So how many rentals do you have? And then tell me about your primary residence.
So, um, we have, uh, I have a primary, we have a second home and then we have, uh, four rental properties.
Okay. So primary second home and four rental property properties. Tell me about your, tell me about your primary residence.
A primary is on a 15 year. Okay. It's, uh, the rate is two and a 2.125..
Just tell me what you owe and tell me what you want.
Okay. Um, I owe about one 80..
Okay, cool. Now tell me about your second house. What do you owe on it?
Um, probably about one 80.
About one 80.
. Okay. Now let's go through real quick. Sorry, I'm in a rush. I want to make sure we get before the time hits.
So rental property number one, you owe 47 K. What would it bring if you sold it?
That was the IRS debt.
Oh, that's the IRS debt. Okay. Um, then tell me about rental property number one. What would, what do you owe?
I owe, uh, so the first one. I owe, um, about one 90..
You owe one 90.
. And if you sold it, what would it bring?
Um, I would, I would gross probably a hundred thousand. Okay. Um, you know, and then I got to pay taxes on that. Sure. So my thought is, I'd probably met 50,000..
Okay. Now tell me the same thing about rental property number two.
All right. The second one, um, I owe roughly about three 90..
Uh-huh.
Um, and.
Here's the thing. At the end of the day, I'd hate to cut you off, but we're, we're up against it. At the end of the day, you are going to have to sell some of these off. I would be willing to part with whatever I have to do to be completely debt free from the IRS and be completely mortgage debt free. You've got too much money and too much equity laying around to be owing money on a primary residence and to be owing money to the IRS.
The whole idea here is that you own these properties outright. I would even sell a property, a rental property, so that I can own the other rental properties outright. You see what I'm saying? So the key is to clear the debt and own it outright. This is the Ramsey show.
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 am your host for the day. Jade Warshaw. Your other host for the day is Dr.
John Deloney, host of the Dr. John Deloney show, author of building a non anxious life. Number one, bestselling author. Let me add that, John, you know, I got to get your accolades straight. It's too many.
I can't count.
I prefer just Jade's friend. That's the best one.
Shut up. Come on, John. Take those accolades. I'm gonna put them out there. All right.
We're taking calls about your life and your money. So give us a call. The number is 888-825-5225.. And we'll chop it up with you. We got Brendan in Virginia beach, Virginia.
What's going on, Brendan?
Hey, guys, how you doing?
Doing good. How are you?
I'm doing good. I'll cut right to the chase. So my wife and I were living at my wife's parents' place. right now, rent free. We have a high yield savings account.
We've been fortunate to save up 60,000 in it. I have 8,000 in student loan debt. My wife has 30,000.. I made the decision with her that we would, you know, we're not going to pay that off fully. Cause we want to save up for a house, cause we also have a baby on the way.
That's due end of June. So we want to get out of here at some point and just buy like a smaller, cheaper house and just have as big of a down payment as possible.
I'm disagreeing with much of this. I'm having some disagreeable moments.
That's why I called, is you know, should, should we just let that continue to be there? That student loan debt, and then just save up for a huge down payment on a smaller, cheaper house.
Here's where I agree with you. I agree with you that I don't want you with the in-laws. when, when baby comes, I feel like that's just, it's probably already starting to get uncomfortable and I feel like adding a baby to the mix could make it even more. Am I right?
Yeah. It's like a, that and a little bit of a blessing.
Yeah.
But, but you guys got to get out of there. I mean, I get it. So I'm with you on that. However, here's where our paths go in different directions. I truly, truly, truly believe, Brendan, that it's not going to be a blessing for you to get into a home while you still have debt and other financial obligations that require your income around.
Does that make sense? You've done a great job, saving up 60,000, and it kind of, I mean, to your own, the way you sound, it kind of sounds like, it's like we saved up this money. It's enough to get us something that'll get us out of our parents' house. And I really don't think that buying a house should feel like that necessarily. So I'm wondering if it, if it were me, I'd wonder what it looks like to say, okay, let's look at some places where we can rent.
If being around family is important, let's see if we can find something that's affordable in our range around our parents where we can rent that still allows us to make headway on our debt. And then I would want to pay off that debt fully. Now here's, I don't want to hurt your feelings in this way, but I I'm about to hurt them. Um,
the 60,000 that you have saved and earmarked for a place,
technically you owe that to the student loan companies. And technically that's their money.
Don't hold their money, dude. Pay them up.
It hurts. I know it hurts. It hurt me. When I, when I wanted to say it, I felt that feeling in your stomach, where you're like, I don't know if it was a burrito. Like.
I felt that in my stomach because you saved up that money and you thought it was for a house.
But imagine you were with your buddy and you, like y'all, were on a double date and he looked at you with that big, wide eyed, like, Oh no. And he didn't have money for his wife and you paid for his dinner. And he's like, I got you. I'll pay you back. And it was like 200 bucks.
It was a nice dinner. And then you were at his house and you saw an envelope with like $400 of cash in it. You're like, what is this? You owe me 200 bucks. And he's like, no, no, no, no.
I'm, uh, I'm saving to get us something. You would think, bro, that's my money.
Give me my money.
Same thing. You, you told somebody, um, Hey, if you help me go to college, I'll pay you back.
Yeah. And they're like, all right, we got you. And that money's sitting on your counter and you're like, no, no, no. This place for us.
It's tough.
Yeah. Yeah. It definitely hurts. I mean, I like the big, uh, I like the big number in the saving account. I like thinking about, you know, the mortgage being very cheap.
That's kind of what my wife and I were debating.
And it will be, you're going to get to that point. You're going to get there, but we're proposing a path that gets you there in a safer way, less risk. because here's the thing you've got to, you've got to be, um, reasonable on both sides of the equation. Like. it's got to be balanced reasoning, right?
Cause you're saying, man, I love the security and $60,000.
. Like, if you love security that much, then you will love a debt-free life. You know what I'm saying? Like, if you love it, does that make sense? Or if you are risk averse, if you're like, ah, just, I don't like, we're taking risks, Jade, then I'm like, well, then you definitely don't like having debt around.
So you've got to let that, that way of thinking, it's got to work on both sides of the equation. Right. Fair enough.
Yeah. So yeah, that's fair.
You know, I, I, I realized that you called in and I blew up your entire plan. And I, I feel a slight bit of, you know, sadness about that, but ultimately I'm happy for you because I think it's truly going to put you on the best path. Again, less risk. You're going to be able to pay off this debt quickly. I mean, you're going to pay off all of it with the 60,000..
You'll be debt-free tomorrow, if you want to be. Yeah, that's crazy.
And then you'll still have some money that you can call. So I'm assuming that you know the baby steps, but in case you don't, the thousand dollars saved is number one, you'll have that. Then you pay off all the consumer debt. That's baby step two. You can knock that out tomorrow.
Then baby step three is you save up three to six months of expenses, which technically, you'll have just about after you've paid off the debt. That's what will be left. Then you save up for the down payment. So you will have knocked out three baby steps in one fell swoop. And now it's like, okay, we're going to rent a place.
We're going to save. We're getting the benefit of being out on our own. We're getting the security of having no rent. And now you also have, it's kind of like right now, you've kind of got a foot on your neck. That's like, you got to get a house.
You got to get a mortgage. You got, and it's making you go quickly and make these decisions. But now you have something really luxurious, which is time. And you can just take your time and save, take your time and pick a spot, not just have to go with whatever is there. Does that make sense?
I kind of like that. Yeah, it makes sense. I see, I see where you're coming from. I was just, I guess, that low mortgage number, especially during this time of like high, high interest rates, was the thing that was keeping me from doing it and getting excited about, you know, it's like, if I have 60 now, I could have 80 in like two, three months. And then that's, you know,
half of a small, cheap house. That is true. But again, with no debt, you're going to save up that money even faster. And I, like, the time is going to pass. If you saved 60 before, you can save it again, and you will.
And so are you married, Brendan? Yeah, I'm married.
My wife and I have our first child on the way to end of June.
So that's how much of this is, Oh, just a pressure. Do you feel in your home? Like we've got to get a house, got to get a house, brought to start a family. We've got to get a house.
Um, it's, it's not really that, I guess it's more so, um, I'm thinking of, like, you know, I have, that, that equity in the house, um, cheap, cheap rate for the house, for the mortgage. That's cheaper than rent. Probably, you know, if we get something small and, and, uh, you know, crappy, um, that's kinda, that's kinda where I was coming from.
I don't want to think of small and crappy for my new young family. I want to think of freedom. first. I want to be free and nimble, and then I want to do things on a firm foundation, man, not, not small and crappy. Um, let that be for your high school gym physique, not your mortgage for your new family.
Pay me what you owe me. Don't act like you forgot. This is the Ramsey show.
You are listening to the Ramsey show. I am Jade Warshot. Next to me is number one, bestselling author, host of the Dr. John Deloney show, the man himself, Dr. John Deloney.
We're taking your calls all afternoon long. The number is 888-825-5225.. We're here to help you with your life and your money. That is what we do. There is, if you didn't know it, sometimes you just see us.
There's two giant buildings here full of genius type people who devote their lives to making sure you have all the resources that you need to finally take control of your money for good. And so when you hear us say things like, we're going to walk along with you or we're going to help you do it, we truly mean we're going to help you. It's really crazy. I mean, these buildings, number one, they're giant. Number two, they're paid for in cash.
and number three, they're full of people. Like I said, who are just so good at what they do. We've got financial coaches and people who make apps like every dollar, and book publishers who published your books, John, and my quick read. It's just really a really cool system that's going on here. So just know that when you talk to us, you're talking also to a clan of people who are cheering for you and want only the best for you.
So just putting that out there, the Ramsey show question of the day comes from Kenneth in Georgia.
All right, Kenneth asks, I borrowed $35,000 from my father, but only repaid 7,500 because of my expensive lifestyle. What? You only repaid $7,500 because you're a person who lacks integrity, but we'll go from there.
That's crazy.
When he updated his will before he passed, he deducted the remaining $27,500 owed from my portion of the estate. I need the rest of my inheritance money. I live in a semi-expensive neighborhood and I am not in good health. What should I do? Number one,
you picked the wrong two people to write into brother.
I'm sorry.
You need to move. You need to get over yourself and you need to go to your local church and ask for forgiveness from both.
Entitlement.
My God, almighty. Good for your dad for deducting this amount of money that you didn't pay him back because you lacked character and integrity, not because of your expensive lifestyle, but because you chose to live expensively over. you chose over your word that you gave your dad. And he deducted it from his estate. Good for him.
That was part of the agreement. You didn't pay it back. So he did the next right thing. He shouldn't have loaned you the money in the first place, but he did. You live in a semi-expensive neighborhood move.
You can't afford your neighborhood move. That is not your money. Don't refer to it as your money ever again. It's not yours. It goes to whoever else he designated it to.
Why? Because it's his money. Not yours. And I'm going to say, something's going to get me in trouble. So I'm going to be quiet.
What do you think, Jade?
I say go for it. No,
I'm just, I hate this entitlement. I hate this. That's mine. I hate this. I hate, I can't stand all of this.
I just, it's nonsense, nonsense, nonsense, nonsense. As though my choice to drive a fancy car and live in a big house overrides math, and it overrides character and overrides integrity. And, more importantly, it overrides my relationship with my dad. You know what the most important thing is? That I got expensive lifestyle.
Shut up. Shut up.
Debt never matters to people until it's debt that's owed to them.
And it's not debt. It's not debt.
That's the thing. Like, but I'm saying like. for him, it's easy to look at this 30, for Kenneth, it's easy to look at this $35,000 that he borrowed and go, I don't need to pay that right away. Like, it's no big deal. I can, I'm only going to pay 7,500 of it.
But if their tables were turned and someone owed him $35,000, he'd want the money today. Well,
let's be real clear about this. He, my dad, deducted the remaining balance owed from my portion of the estate. This is not your estate. This is your dad's estate. And it's his prerogative to dole it out.
However he wants to, he could give you a fish tank and a hammer and a high five. And that's what would be yours. You, because you're an entitled brat, looked at how much he owed. You probably tripled it. And then you spent that money in your mind.
And then, when it didn't come to you in the form of a check, you got, you threw a little temper tantrum and you said, well, I want my money. It's not yours. It's not yours. He could leave all of his money to your brother or to your sister, which is what I hope he did. And look at you and say, you're not, you were not a son that honored your word.
And so I'm going to choose to spend my inheritance. I'm going to choose to divvy up my estate in a different way. He's allowed to do that because it's his money, not yours. Never was yours, never will be yours. So stop referring to it as your portion of the estate, as your inheritance money.
It's not. Case closed. If you can't afford to live in your semi-expensive neighborhood, and you're not in good health, then you need to move. You need to get on the exchange and try to get some health insurance. You need to figure out something else to do, but sitting around complaining about money that's not yours and that never will be yours and, legally or otherwise, is a waste of your time and energy.
And I'll be quiet.
Standing ovation. Good job. That's my second Rihanna reference in a very short period of time.
Sometimes you need a couple of Rihanna references just to balance the world back out.
That was good. Okay. You're right.
If you, if you've been around me, I don't get mad. I don't get mad about hardly anything. I never do. In fact, I get too much criticism for not getting fired up about stuff enough.
I can see this. bothers you. I like it.
I can't. Cause this, this is our, our, our country. The government owes me. My professor owes me an A. No, it didn't.
You didn't do a work. You didn't do a work. My,
I,
I, I pay this whole attitude.
Yeah.
Shut your mouth.
Be quiet. Yeah.
I had a conversation with my son. He he's a 14.. He's going to be leaving middle school, heading to high school. And so we're starting to have more poignant. We've been having breakfast together once a week for years, and we're starting to move into a more of a poignant, Hey, here's kind of my thoughts on alcohol as you get into high school.
Here's my thoughts on sex. We talk about sex all the time in my house, as you can imagine,
but here's some more specifics. Like. I'm going to start being more specific about. like, you know, I believe in God, you know, Jesus is important to me. You know, my faith is important to me.
Here's what that looks like. And here's my seasons of doubt. And here's my seasons. when I walked. I'm real talk.
It's more intentional.
Yeah. Real talk.
And. We're talking about his grades recently. And he said, but I've been working so hard. And I said, I know, but you are entering into a season of life that for the rest of your life, effort does not as matter. Doesn't matter as much as the outcome.
And like. We have to see it in front of us. And this attitude of you just give me mine. Cause I can choose. I can do what I want.
And the effort. It's not real. Yeah. And this kind of nonsense is breaking up families. It's breaking up culture.
It's breaking up communities. And it's insane. It's insane. Can Kenneth be upset that his brother and sister got more money than him? Sure.
Be mad. That's fine. But move on with your life.
Yeah. Move on.
Move on with your life. You don't get to just live in an expensive area and be like, that's what I wanted. No, dude. No.
Yeah. That's a really good point. Be mad and move on, and don't let it steal your joy or steal your peace. Because what he's listed here, that's it's nobody else's problem. It sucks that he's not in good health, but that's not his dad's problem.
No. You know? And so there is something to that, John, I'm here for a rant. Anytime. Anytime you deliver one, I'll take it.
Let's see. We got Francine in Los Angeles. I don't know if we have time for it. She says, should I pay off my car loan or sell it and buy a cheaper car? Ooh, I want to know about it.
We might hold you on. Tell me about it, Francine.
Hello. So thank you so much for taking my call. I currently have a used car. I am a Ramsey. Relapser is what I like to call myself.
I went through the process and I was gazelle intense. I did everything I needed to do, but I had a specific goal in mind, which was to basically quit my job and have enough money to move away. Okay. I did that, decided it wasn't the best thing for me. And then I came back into my original field, moved back to the United States from Portugal.
And I kind of fell back into my old ways. So I currently have a used 2019 Mercedes in it.
Get the image. If you will. I'm putting my air quotes up. Okay.
I'm about.
What do you owe on it?
Upside down.
Okay.
23,000.
Hey, hold on the line. Hold on the line. We got to go to a break, but I'm going to come back and let's figure out what to do with this car. We'll help you out. This is the Ramsey show.
You're listening to the Ramsey show. We've got Francine on the line from Los Angeles, California. She's trying to decide if she should sell her car, what she should do. She's trying to get a cheaper car. She's trying to get out of debt.
She backslid from the Ramsey plan a couple of years back, and now she's trying to get herself back on the good foot. Francine, did I get it right?
You did. Absolutely.
Awesome. So you told me you've got. right now, you've got a good foot. You've got this 2019 vehicle. You owe 23,000 on it, but you're 9,000 upside down, which is definitely worth noting.
This is your only vehicle.
It is.
Can you tell me how much other debt you have?
So I actually was about $15,000 in debt, and I ended up paying that off in about three weeks.
That's awesome.
So this is my last bit of debt to tackle. Okay. On top of a house that I'm trying to pay off eventually. Okay.
Are you currently making extra payments to the house, or are you just making the mortgage payment?
So I pay the mortgage payment, which includes the taxes, about $1,800, and I'm paying $2,000.
. I don't live in that house because I got a job in Southern California, and that house is in Northern California. So I'm allowing my friends to rent it, basically, and I'm paying the difference. So I'm giving them a discount on the rent, because I had to move pretty quickly.
And then you're someplace else paying full rent.
Paying full rent, but my intention is, when this lease is up, to move from a two-bedroom, because I don't need two bedrooms, down to a one-bedroom, and that'll save me an additional $1,000 a month.
But you're never going back to Southern California.
Right? Not when I'm done with this job. Well, the Northern California house is kind of like what I envisioned to be my forever home. And that was my other question, if I could fit it in. Well,
let me go back. Let me go back. So, first off, because where I see a problem, I'm just going to call it out. First off, the goal right now is to pay off your debt. All right.
So you're paying extra, even if it's $200, towards a mortgage to try to pay it off quicker. Right now, we need to focus on the smallest debt at hand. Baby step two is paying off all of your debt, except your mortgage. So I'd stop making extra payment on the mortgage and put all that money towards this car. To answer your first question, I would not sell this car that you're upside down on.
I would pay it off. You've paid off 15,000 already. You can pay off another 23,000.. It's going to be painful, but it's your only vehicle. You need a vehicle.
And so that's thing one, before we go further in, can you tell me what your income is every month that you bring home?
It's 215 is my yearly. So I can bring home, take home is about 10,000..
Okay, great. So yeah, 100%, the car that you have, although I don't subscribe to going into debt for cars, it's within our realm of keeping the car. You're going to be able to pay it off in under two years. It's not more than 50% of your yearly income. So for that reason, I'd keep the car plus.
you're way upside down. So keep it paid off quickly. Now let's talk about this house, because I understand. It sounds like you have a dream wrapped up in this, but I would never recommend keeping a house in an area that I don't live in. And that I don't know exactly when I'm going to be back.
It'd be one thing if you're like, Hey, I had to go do this thing for six months. I'm going to be right back, but we don't know when you're going to be back. And you're letting people live in it at cost. You're not even making money on it. And you're turning around and paying rent someplace else.
It's just a lot of money going down the toilet.
Okay. I always thought because I'll never be able to buy back into that area. That's what's making me hold on to it. Cause I got it at a great price.
But you're never going back to that area.
Okay. All right.
I mean, are you.
Uh, you know what? When I did my Ramsey math, I can pay that house off probably in about three years after I'm done with the car. Basically that's my last thing.
It's still long-term rental. It's still a long-term rental, though. Paying it off is great. And I love that. you have that aspiration.
Don't lose that. Keep that aspiration. But I, I don't want you to keep a property out of fear that you'll never be able to buy something else that cheap. Because the, the, the fact is, life gets more like the prices of things go up as time goes on. We rarely see the prices of things go down.
Like they go up incrementally, incrementally. And lately, of course it's been big increments, but they go up and hopefully wages start to rise and go up with it. Right. That's what you're hoping for. So don't let the fear of something become becoming more expensive, make you think I'll never be able to afford it again.
Because these things do have a way of balancing out. Obviously, it's always going to be, you can only buy what you can afford, but it balances out. Does that make sense? I don't want you to say, Oh, I'm never going to be able to have a house. You may not ever be able to buy a house that cheap, but you may be able to, you'll still be able to buy a house.
Does that make sense? Like my grandparents bought houses for $30,000.. I'll probably never be able to do that. It doesn't exist anymore, but I can still buy a house within a price range that works with my budget. Does that make sense?
Okay. So sell it, invest the money, and then eventually pay cash for a different house after I have enough. Yes.
Sell it, take some of the money, pay off all of your debt, keep the rest in a high yield savings account. Let it accrue interest. I probably wouldn't invest it. The only way I would invest it is if you think your horizon is beyond five years. And if that was the case, yeah, just drop it in an index fund, let it gain what it's going to gain.
But if you think that your horizon is less than five years, just keep it in a high yield savings account. right now, they're like 5%. And that's pretty freaking awesome.
Okay.
Thank you so much. Awesome. Thank you so, so much for the call. That was a good one. Let's go to Michael.
Who's in Baltimore, Maryland. What's going on, Michael?
Hello. Thanks for taking my call.
How can we help?
Hi. So a little bit of backstory. My, I kind of jumped into this thing, you know, headfirst. I, um, uh, with, you know, getting my debts paid off. I don't have a lot, but we had somewhere around 25,000 and it was just cars and a small, small credit card.
So I ended up selling my car and using that to start snowballing. Um, and we figured out basically that by June, uh, we'll have my wife's car paid off and this credit card gone.
Okay. That's great.
0%, 0% credit card. Um, so I feel like, um, you know, making good steps forward, you know, and then I'll, I'm going to, at some point here, grab a, grab a cheap car for cash. Okay. So we have the second vehicle.
So we're up against the clock. Get right to your question, brother, right up against the clock here.
Oh, yep. So my question is, is saving for the, is there a better way to figure out the best way to, to save for the six months emergency fund?
A better way to figure out how to save, like you want to increase the rate. You want to save it faster. Is that right?
Yeah. Cause, when I, yeah, when I did the original, based on the snowball, it looks like four years.
The only way to impact. the only way to impact the equation is with dollars. That's the only way. you, there's not a, a, a magic button that you push. If you want to go faster, you've got to find more dollars.
Yeah. That's side hustling or that's cutting back your lifestyle. That's the only way to make it go fast. How does your,
how does your, how does a six month emergency fund take four years to save up?
Well, my wife is looking at me funny about that same question. Just when we were looking at the initial, the initial snowball that we, that we seem to be starting.
Forget that. Forget the snowball. Forget the snowball. How much does it take y'all to live every month?
Expenses. What I'm looking at from what we did in the app is, 7,000, 7,500..
So 7,500 is a basic,
basic. take all your debts off the table, though.
Like if you're not making any debt payments and you're just got a mortgage, your food,
that's not bad. That's not including the debt payments. The minimum.
Okay. So keep that in mind.
So $35,000, it's going to take you four years to save up 35 grand.
No, when I was looking at it, I was figuring somewhere around 60.
Okay. 60,000.. Yeah. Okay. Tell me what,
real quick, real quick, real quick.
Out of all of the things.
Tell me what it takes. Tell me what you bring home every month and tell me, tell me what you bring home every month after taxes.
10,000.
Okay. Now tell me of that 10,000, what does it take to make your household run? And this is not including extra debt payments.
Uh, so that, that should be, it should be 7,500,.
7,500.
. So if you do that and you do,
and you do that three months,
bare bones, that's not $60,000.
Right. That's somewhere around 20, $8,000 for three months. for three months. Yeah. So I think that maybe start there and then see where you go.
And then, if you want to build it up to six months, there's a couple of factors that would make me decide between three or six months. And of course, it depends on job stability of both of you are working or not, whether you're healthy or not. And you can think through that. But remember, you always have room to bring your income up. And if you can do that, you should do it.
This is the Ramsey show.
You are listening to the Ramsey show. I am your host, Jade Warshaw. next to me is Dr. John Deloney. We're hosting all afternoon long.
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Hi, I'm just super stoked to be able to talk to the both. Bless you guys.
I'm excited to talk to you too. Yeah.
I started listening to you guys about a year and a half ago and just thoroughly enjoyed listening and applied the principles to our personal life. My husband and I, um, I wish I would have known these principles back in 2018, when my husband and I, and our daughter and her husband bought a chocolate slash coffee shop in a little cute little town in Joseph, Oregon. Okay. We have lots of people coming through in the season, you know, the tourist season.
Yeah.
But we ended up getting ourselves into some deep debt.
I was going to say a lot of people come through, but not enough people.
So who's in on the deal? Tell us who it is. It's you and your husband.
So it's my, my husband and I and our daughter and her husband. So, you know, we're both, we're all for owners in this. Okay. So I'll just give you a quick breakdown of our debt. We bought from the, um, owners at the time they carried the loan.
Um, the remaining business loan right now is 131,000.
. Okay. We also took a private, we have an uncle that, that was able to get a private loan for the building. We bought a building and did the major remodel, but we are in debt to that.
So the remodel, how much is that?
277,000 total debt. Yeah. I'm just going through. And then the other, so we have various, we have different businesses within this big building. So we were able.
then, then COVID hit and we were in debt. We'd put a whole ton of stuff to remodel on credit cards, which is stupid. I mean, I, a lot of this is stupid,
but that's part of the two. 77, right?
Yes.
Okay.
Um, the SBA loans, though, is where we just like, Oh,
that's where you went to town. So how much are the SBA loans?
Because of the 280,000.
. Okay. So we have a total debt of 688,362..
Okay.
Um, we gross the chocolate slash coffee shop. It's called Arrowhead chocolate grosses. Last year, they grossed 603,000.. The building,
because we're able to grow 600 and 3000.
What's what's net profit.
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