Ditch Your Debt and Get Back to Peace
2024-06-04 01:57:29
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From Ramsey Network, it's the Ramsey Show. I'm your host, Jade Warshaw. Next to me is George Camel. on this show. We teach people to build wealth.
We teach them to have awesome, amazing relationships and do work that they love. So if any of that applies to you, you can give us a call. The number is 888-825-5225 and we'll chop it up with you. We'll give you our best advice. Again, this is about your life, your money.
And, you know, when Ken is here, we can do that career stuff too, George.
That's true. We can try to help with that.
We'll try to help. We'll do our best with that. We know a little something, something.
We have careers.
Do we?
We got here somehow.
Somehow. Started from the bottom, now we're here. All right. Let's go straight to the phone lines. We've got Aaron.
He's in Des Moines, Iowa. What's going on, Aaron?
Hey, guys. How's it going?
Chilling. How can we help?
All right. So, basically, for the past couple of years, I've been selling shoes on, like eBay and Go and stuff like that. And recently I had a buyer reach out to me on eBay saying, hey, can I pay with Karna, which is, you know, buy now, pay later. And when it came down to it, I made the sale. And that basically meant that I knowingly put someone into debt, and I felt weird about that, you know, buying stuff, I mean, expensive Jordans with debt.
And I just felt weird about it. So I just figured I'd reach out, you know, see what you guys think on this. Do I have a moral obligation here? Obviously no legal obligation, but yeah, that's pretty much it.
I mean, let me think.
You didn't do anything. I don't want you to take, like. they chose to purchase shoes on credit, whether it was from you or someone else, they would have done it.
And half the time you wouldn't have known if they had used a debit card or a credit card. Correct. Right. So there's that piece of it. Um, it doesn't, it doesn't bother me.
I mean, I know here, I can say here at Ramsey Solutions, a lot of our, um,
products, you can like, I think on every dollar policy online, because we have a whole piece about that. because people go, Dave accepts credit cards. They're like, no, we don't. But sometimes we can't, the system can't tell what a debit or credit is. That's right.
And so you're probably can sneakily find ways around it if you wanted to go into debt to buy something.
Yeah. I don't think that's on you. I think you're trying to run your business and do your life. And if somebody says, Hey, I want to pay on Klarna and you're like, Hey, you really should pay cash after that. It's like, dust your, dust, the dirt off your shoulders and move on.
If it's bothering you personally, I mean, everybody's moral, uh, compass, I should say, is a little differently. If it's really bothering you, then next time, if someone tells you that or reveals that information and you don't feel like you should take the sale, then don't do it, that's really all there is to it.
But there's a lot of people in sales roles that are wonderful people with high character, and they can't define how someone's going to make that purchase. If you're in car sales, you can be a great dude who wants to help people get the right car, but you may not be on the finance side where you can be like, Hey, you really shouldn't buy this car, bro. You make 40,000, you're about to buy a $50,000 car. Yeah.
We can't police people's decisions.
Unless you're in the lending business and the debt business, which you're not, I would still sleep well at night knowing that you haven't done anything wrong. Yeah.
Does that help you?
That makes sense. Yep. That's perfect. Thank you.
Absolutely. That was a good call. And I know you love, you're, you're big in the shoe game. You and Sam Warshaw, no stranger.
I am not big in the shoe game. My husband is big in the shoe game, but he makes sure that the drip is dripping.
Let me just say some of your shoes, Jade, they, it's like my, they're worth my 401k. That's all I'm saying. There it is.
They can't see it.
Stealth wealth.
I wouldn't know. It's not worth your 401k, but everybody has their live like no one else. So later you can live like no one else. And shoes happens to be mine. Let's go to Julie.
She's in Dayton, Ohio. What's going on, Julie? How can we help?
Uh, really? I called in for a question about my daughter. She's one month old. Um, but to be honest, I've got other goals as well. And I was kind of curious about accounts that I could open up for her in the future, like the five to nine college or a custodial Roth, uh, just some investment opportunities for her in the future that I didn't have an opportunity for when I was growing up.
I love that question. Go ahead, George. So you're wanting to leave a legacy and there's a few options here. Number one, as you mentioned, the five 29 plan, which is going to be for college expenses. And I think that's an account.
Every parent should open when their child is born. That was one of the first things I did when my daughter was born nine months ago. So that's a great option. They're a state specific, but you can choose any state, which is really cool. And so you can do some research on which one is the best for you.
You can reach out to a SmartVestor Pro through our website, who can help you navigate that. Outside of college, the custodial Roth can be a great option as well, where they'd have access to it once they turn, you know, 18, that becomes their account. And you have 18 years of growth on that money. So what are your goals for her? What are you trying to do for her?
Uh, really probably, you know, I don't know if she'll choose college. So it would be nice to have an account that she could get into as soon as she turns 18.. So maybe that custodial Roth, that sounds like.
Well, the good news is, with the five 29 plan and the new secure, you know, 2.
0 act, you can actually roll over a portion of your five 29 college funds into a Roth IRA. So if she doesn't use it for college, she's still able to use that money as she pleases in that retirement account. But remember, there's still going to be penalties if she withdraws it early for retirement. So this is really way future thinking. Yeah.
Um, and really where I'm at financially is like, I have a house. I want to pay that off. Um, I got married last year, got pregnant right away. So we're kind of in that new form of our life. I'm 34 years old.
He's 32.
. Um, but it's, it's kind of ridiculous, because combined, we've got quite a bit in savings and, you know, I've got, I think, a, a debt on my house of three, 17,. he's got his house that he's got as a rental. And I think we owe 60,000 on it. Cool.
Um, and so combined, uh, in the baby, which we're, uh, maxing out our HSA this year. So I think it's $7,000, that would be it. Or pool combined debt is 384,000.. And then we've got 143,000 in savings, which is kind of silly, because, yeah, it's not being invested or anything like that. It's really grown quickly.
If I were in your shoes, I'd probably hold back six months of expenses. And then whatever's left, uh, you have a couple options. with that. I mean, you've got these two houses, this rental. What would be six months of expenses for you?
I'm just curious.
I think we spend maybe about, we live off of maybe 3,500 a month, I think.
Okay.
So let's call it 4,000 a month. for six months. That's 24,000..
So if you rounded it up and kept 25 K kind of as your six month fund, and then you look at it, you've got 118 left, which gives you some options. I mean, you could, uh, you could pay, you could put it towards your personal residence if you wanted to. If you guys really love this rental, you could pay it off in full and then put the rest towards your primary mortgage. You guys have some options here. Are you investing, uh, 15% of your, your gross incomes?
Yeah, that was the next thing I was looking at. I think we're at 12% for each of us, so we could always increase that a little bit, for sure.
Bump it up to 15.
. And then here's, what's really cool. You pay off that rental instantly. That still leaves you with 58,000 to play with, to throw at your current primary mortgage.
And now you're at 275 on that.
And now you've freed up the rental income as well. And now we can really make some headway on that primary mortgage. So that's what I would do if I was in your shoes, Julie, while putting some money in the 529, while investing 15%, whatever's left over, that margin, plus the proceeds from your savings, let's knock out that mortgage.
How's that hit you?
And then my other, my other thought is, um, keeping the rental. We don't know if we want to keep it or not. It's been a good area. We've got a good renter right now, but he just moved out. I think it was, we started renting it in July of last year.
And I think you have to be like three out of five years living there. And then you kind of have to figure out if you're keeping it or selling it.
So, well, I pay it off. And after that, if it's still a hassle and you guys don't enjoy it anymore, just sell it and you can invest the proceeds or use it toward a different piece of real estate. I like that plan.
I like that plan too.
Good problems to have. They're doing it really well.
They're great problems to have for $60,000.
. I'm definitely keeping that rental around, especially when they have the cash to pay it off. Cause I know some people are like, shouldn't they sell the rental and use the money to go towards their primary mortgage? Not necessarily in this case. I'm telling people what I would do.
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You are listening to the Ramsey show. I'm Jade Warshaw. Next to me is bestselling author George Camel, writer of the book Breaking Free from Broke.
A great one. What an honor.
A banger, as they might say. All right, give us a call. The number is 888-255-225.. We'll take calls all afternoon long about your financial situation. But in the meantime, let's talk about these Ramsey Trusted Pros, George.
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She helped us move here. She helped our friends move. And it's so funny because in all the in the midst of all the crazy things that can go on in the real estate world, like you, know how you want to make an offer on a house. But if you already have a house, it's contingent to sale. Right.
And all the other people will do these crazy things, like you should do a bridge loan and you can do this to get into that house. It's great to have someone on your side that knows what we teach, because they're not even going to try it. Like they won't, even they won't even bring forward things.
They're not going to be like, hey, what if you did a HELOC and you kept? no, not going to steer you toward bad financial decisions.
That's right. And so that's super duper important, especially if you're navigating something like real estate, especially for the first time. So check that out. You can find a trusted real estate agent for free at RamseySolutions.com slash agent. So get into that.
All right. Let's go to Zachary in Indianapolis, Indiana. What's going on, Zachary?
Hi, how are you guys?
Doing great. How can we help?
So I am just wondering what is the best way to get into budgeting without getting overwhelmed and giving up?
Well, that's great. That's a great question.
Are you saying that because it's already happened?
Yes, I've tried two times, both times that I tried. It was a really stressful time period for me and my now wife. And so it was really hard to get both on the same page. But I think now that the waters have kind of died down, we're willing to dive into it headfirst. And I just don't want the same mistake to happen again.
What do you think was causing you to give up? Was it just you were overwhelmed with other things to do and you forgot about it or?
So the first time that it happened that I wanted to get into budgeting, we just had a newborn baby that was born two months early. So he was spending a month in the NICU.
And so I was really head on about it. Like I had just discovered you guys, like a month prior, and I was on this big kick, and she was just like, yeah, yeah, whatever. You know, I'm worried about this right now. Well, you guys are in a crisis, rightfully so, yeah.
Not a great time to start a new financial habit when you're dealing with something scary like that. That's right.
Yeah, definitely. And thankfully, he's very healthy. He's been out for a couple of months now. Right. But both times I've tried around.
like the middle of the month, it starts getting a little overwhelming and I've kind of just given up looking at it and stuff.
And is it because? do you think it's getting overwhelming, because you're going over budget? Because so the hope is that.
Did reality not match your plan where you went, oh, my gosh, we spent five hundred dollars on groceries. We said it was going to be two hundred. Right. What is causing?
Yeah. So a lot of it is mainly like when I go to list, like all of our expenses and stuff, halfway through the month, there's always stuff that keeps popping up that I.
didn't think about. So it's the unplanned pieces in the budget. And for that, you know, I love to have a miscellaneous line item. that's sort of a little catch. all.
You don't want it to be for sloppy behavior. But when there's that little thing, it doesn't throw you off the whole plan because you had a random 10,, 20, 50 dollar thing happen.
Are you using every dollar? I am. Yeah. OK, so when it comes to every dollar, you know, George is exactly right. I always tell people with every dollar, one of the three keys to staying focused and staying on it is you want the the budget to be detailed.
That's number one. So that's that's. the first issue that you're facing is when that month begins, you're really going through and thinking of every possible thing that you could possibly spend money on. I mean, that's everything from grandma's birthday to if your kids are signing up for sports and they need soccer cleats. Right.
Anything that you can think of. that's out of the ordinary, or that's going to be part of that monthly flow. And then the second thing is you've got to be realistic. Right. You know, now you're a family of three.
So your grocery budget might change or there's certain things in your household that might change. Those numbers might go up a little bit. So, really being realistic about the state of things. Inflation, right? Inflation, not inflation.
I thought you just added another syllable.
Inflation, that's something that a lot of people are facing. And as much as we haven't wanted to, we, you know, some of us have had to up those categories. And so detailed, realistic and finally just accepting the flexibility of it. You know, there are every once in a while going to be things that pop up that you totally forgot about. You know, it's your turn to bring treats to kindergarten class.
Right. And so you got to pop into Kroger or pop into Publix to get that. And that's totally fine. But I do think that if that's happening regularly and all the time, then you're you're missing out on number one, which is the be detailed part. So that's kind of the way it goes.
And so I think, you know, once you're married, one way to really nail that is if you're sitting down with your spouse, because I know when I sit down with Sam, there's things that he thinks about and knows about, that I wouldn't would have forgotten to.
put on the budget. There's plans I didn't know were happening this month. And my wife is like, oh, yeah, I told you. Right. Remember, one time for three?
I real quick, I was in the back of the closet and I yelled, oh, yeah, I forgot. We have to bring food for that thing. That's right. So that's how it goes in a marriage. So that's why communication is key.
Sitting down and doing the budget ahead of the month happening on paper, using the app, and go, OK, what's everything we can think of as the month goes on? You can be flexible. You can make tweaks to the budget to account for things. And maybe we spent less in this category, so we can add it to this category. Yeah.
And so it's a little game of Tetris. But the goal is to have margin to actually hit your financial goal. So what is your next financial goal?
Getting out of debt. Perfect.
Love it. So the key is, hey, we said we were going to have an extra 500 bucks to throw at the debt. Is that true, based on our current budget and based on how we're spending? So is that where you're getting thrown off, where you're going, we don't have any money to throw at debt. It just disappeared.
More like. so we plan to put some extra money towards some of the debt and we'll get. we'll do like a little bit, but not as much as I originally planned. And then, when we, when we do, plan to put a lot extra, we start getting worried about what if this comes up, or what if this comes up, you know, and you know, I like overshooting.
I think you guys are under undercutting your numbers. I think that you need to do the opposite and kind of overshoot them a little bit like let's it can. it can be small things like utilities. Maybe it's usually seventy, eight dollars. Just go ahead and put it on there for 80..
You know, if you think that you might spend three hundred and twenty five dollars on something, go ahead and put it at three hundred and fifty, like overshoot it. And I think for you guys, that's going to help you. And then it's better to look at the budget and go, oh, my gosh, I have a little bit left over than to say, oh, man, like we went over in every category. And then does that make sense? Because it doesn't sound like you guys are in.
George, help me out on this. It doesn't sound like you guys are just willy nilly spending. It almost sounds like there's an accuracy issue more than it is. You guys. I mean, am I wrong there?
We do have a little bit of problems with, like just spending carelessly.
What are the categories? you would say we busted on these categories? Yeah. Yeah. Is it Amazon?
Is it Target? Is it groceries?
It's mainly like for for me, I try to stick to it as much as I can. I mean, obviously mine, it's my guilty pleasures, food, everybody, eating out. Yeah. Yeah. Like working a long day and being like, I don't feel like cooking.
Let's just grab something, you know, for my wife is, we have a three year old as well, and she is really big about. she wants her to have all the stuff that she never was able to have growing up. So like when she wants something, she she had a hard time telling her no, or maybe next check or something.
It's a three year old. They're going to have a tantrum regardless.
That's right.
I remember mom saying no, but she will remember watching her parents not fight about money, having a peaceful, strong, healthy marriage. So that's what I would be aiming toward versus serving a three year old's tantrums. That's true.
And I mean, the other piece of grace on this, which you all know, I rarely offer. the grace is you guys are in a crazy time. Like you have a newborn, you have a three year old. There are more times where you don't want to cook. And let's just be honest about that.
So, again, being realistic on that budget, but still making headway and progress on the debt, is what you're looking for. There's no perfection here, only progress. This is The Ramsey Show.
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You're listening to The Ramsey Show. I'm your host, Jade Warshaw. Your other host for the day is George Camel, author of Breaking Free from Broke, host of The George Camel YouTube show, which is always popping off, George.
We're having a good time over there.
You are. I like, when you guys invite me over.
It feels like we're unchaperoned, like in the parents' basement, just having a good time. It's a house party.
It really is. Like kid and play.
A lot of jokes, a lot of humor, a lot of good information.
Love it. Love it. If you haven't checked it out, do so. It's on the YouTubes and you won't regret it. Let's go to Burlington, Vermont.
We've got Allison on the line. What's up, Allison?
Hi, Jade. Hi, George. It's an honor to talk to you all. Thank you so much for taking my call. How are you guys doing?
We're doing great. How can we help?
Awesome. Yeah. So I've been with my boyfriend for about four years. We've lived together for three years, put our finances down the middle. That's worked pretty well.
I did the bookkeeping end of it. Now we just found out we're 12 weeks pregnant, which is really exciting. Wow.
That's cool. OK.
It's exciting. And we are planning to get married, you know, in the next couple of years.
Hold up, hold up, hold up.
Why? Why are y'all waiting so long? You sound like you're a great couple.
Yeah, I mean, we are. You know, he was originally going to propose, like this summer with his idea. And now that we're pregnant, he doesn't want to propose because I'm pregnant. And I guess I get that.
But like, how do you get that?
Make it make sense.
It just feels like I don't know, I mean, obviously I want to get married and I've been telling him it's nice to be engaged before we announce we're pregnant. But yeah, I'm just trying to figure out how we like keep our finances separate if we're going to have a baby and not be married.
It's going to be hard, which is why George and I are, if you were watching on YouTube, why we have these looks on our faces.
I am perplexed.
We're flummoxed.
Befuddled.
What if you just got the.
. OK, and I know this is not romantic, but what if you just got the piece of paper? So the legality and those protections are there. You don't tell anybody. And then, when the time is right and he wants to propose and do all the romantic stuff, you still get to have that fun, too.
OK, yeah, I get that. So like we just get married and don't tell anybody. But then we have a baby and everyone thinks we're still separate.
Yeah, it's literally a piece of paper. Yeah. What I remember when my husband and I were engaged, and, you know, you have to go down to the courthouse and have them sign the paper. Once that happened, I was like, wait a second. Like, this is the real.
this is the real deal. But everything else is the party and fun. And nobody knows. Nobody even knew when we went and did that.
I mean, everybody knows you already live together. They're about to know you're having a baby. So I don't think this marriage certificate is going to really be the thing that shocks them.
Fair enough. Can I ask a follow up question to all this then?
Go for it.
So if we end up getting married, which I'm really hoping, I can convince him, or, you know, explain all of this to him, maybe play the episode for him. You know, I've been living debt free. I've got a good rate for one K. We've got a four or six month emergency fund. Well, I personally thought that saved up have an additional twenty four thousand set aside that I've been saving for a down payment on a home.
Nice. Again, that's great. My boyfriend, however, you know, he doesn't have a lot of savings. We have like a combined savings account. We've both been contributing to equally.
What's in that?
They just get a lease on a truck in March, which I did not love. It's a big, big amount of money. And I was worried when we I think it was fifty five thousand.
You like these.
What does he make?
He makes what, like fifty thousand.
Oh, my goodness. Wow. Was this before or after you were pregnant?
This is before. OK.
Hey, how much is in that savings that you guys said that you had together? And I'm guessing that's separate then from your emergency fund.
Correct. Yeah. So the savings we have together is about thirteen thousand right now. OK. And I have my private savings of twenty four thousand and then a six month expenses on top of that.
How much is the six month expenses? Twenty four thousand as well. OK, so good job. A. Have you guys had these conversations about your views on on debt and managing money as a couple?
We have, and I, when we were looking for a replacement truck for him, you know, I agreed he needed to get rid of the truck because it was having a lot of maintenance issues and it was time. He was upside down a little bit, but I haggled with the dealer and got got them to offer us what it was worth, at least, or at least what the note was. So we cleared that. at least. Good on you.
But I just I was trying to get him to like not get a full size truck, because at the end of the day, that was what was the big, the big note.
But he did it anyway. And why do you think he did it anyway? And what was his kind of attitude towards you, even though you were like, no, don't do it?
I think he just saw me as like trying to like take away his manhood, which was not the goal.
He is a child who's about to have a child. This is a problem. He needs to grow up. He's about to be a dad.
He thinks it's like a great thing to have in case we need to tow something.
Or, you know, just in case we have to tow something.
I'm about to tow him down to the courthouse for this wedding.
Oh, boy.
So, if we get married, though, how do I like, how do I get rid of this lease? Like, you, can't just pay off a lease.
There's three ways to get out of a lease. None of them are going to be fun. There's early lease termination, which comes with a lot of fees. You have lease transfer, which is like trying to get someone else to buy your timeshare, or someone else takes over the lease. The last one is probably the most probable for you guys, which is a lease buyout.
You pay the difference between the lease payoff amount and the current value of the car.
Gotcha. Then you would sell it. So you would do that and then sell it. Because a guy making 50 grand should not be driving a $55,000 car.
Yeah. Yeah.
Is the math mathing for you?
It's nothing. No, absolutely.
You're very financial responsible. I'm hoping that you rub off on him.
Well, that's my biggest concern, Allison. My concern is and I'm not trying to put doubts in your mind, but my concern is that, based on what you said, if you take George and I's advice, like, let's say, you get off the phone, you think about what George and I said and you go, yeah, like, I want to get out of this lease, especially if we're getting married. My concern is that you'll bring that to him and it'll kind of completely get like ignored. And that, for me, is. I'm going to call that a red flag for me, because finances is such a big part of marriage.
And don't get me wrong. It's something that you work at and get better at as as a couple. It's not something that just clicks on like a light switch. But I do want you guys to start having these conversations. And I want you to make it very clear to him how important this is and where you hope to be in the future, and that you want to be on the same page and not you say something and he ignores it and does it anyway.
Fair enough. Yeah, absolutely. Yeah, I felt differently about it when we did it, because it was his note. But now we're like in a combined bias. is now my financial burden.
Exactly. And so here's the deal. No longer will you guys make decisions where you're both not aligned. If you're not fully in alignment, you both don't agree, it's the right move. Then it doesn't happen.
He doesn't get to veto your vote.
OK, so that's the rule. How old are you two?
We're both. 28.. OK, cool.
The good news is the good, and bad news is you guys have got money laying around to get out of this lease. And I hate that. it's probably going to cost you and you're going to end up with, you know, having to pay some stupid tax here, probably in more ways than one. But the good news is you do have the money to do that. And I would, I would do that and sell it off once you can get out and get something much, much cheaper.
The rule of thumb here when it comes to cars is you don't want it to be more than half of your combined. take home pay. So he's at 50.. What are you at? I'm at 80..
OK, so we don't want this to be. if we take 130 and think half of that 65, that's where you're at.
Total for all vehicles.
So my truck's only worth 10 grand. So if we could technically keep this truck, then if we were married, our combined vehicles are only 65..
If you wanted to and pay it off, it's a lease, though.
But here's the problem. You're about to deplete your six month emergency fund and your 24,000 for your down payment fund to reverse his stupid decision. So the question is, do you want to have an emergency fund and a home sooner or do you want to delay your adult life while trying to take care of a baby because he wanted his truck? Right, that's the decision you're trying to grapple with here.
Also known as a truck.
A truck. Is it a big truck?
It's your big truck.
What color is the truck? Yeah, it's gray. Big white truck.
A big white truck that can tow things.
Oh, my goodness. Well, Allison, you're, you're super fun. I want to be able to help you guys out. So we're going to give you financial peace university for a year. And I want you guys to watch all nine lessons together.
And I want you to have a conversation after each lesson and get aligned on what your future money goals are, and get aligned. That debt is not going to be in your future, because your life is too important. This baby's life is too precious to be playing kid games.
That's true. And she knows what diligence will do. I mean, she's sitting here. She's got 24K saved. She had 24K starting her down payment.
She's debt free. We know that this way works. And in some way, you're going to have to explain this to your future spouse in a way that's not condescending. That's not you looking down on him. But in some way, you're going to have to go.
I've been doing this thing and it's really been working for me. So your way hasn't worked as well. So there's there's some conversations that need to be had, and they won't necessarily be difficult, but they will be worth it. This is the Ramsey show.
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You are listening to the Ramsey show. I'm Jade Warshaw. Today I'm hosting with George Camel, George Camel. It's never been better.
Some call it a blessing. Some call it, I call it a blessing. Some call it work.
It's a little bit of work. But the two of us will be taking your calls all hour long. Triple eight, eight, two, five, five, two, two, five is the number. Give us a call and we will do our best to give you the best advice on your financial situation, your money, whatever it is that you're going through, your life and money. Give us a call and we'll hook you up.
Can I just say our advice, while I feel like is is the wisest for your financial future, it can sometimes come across harsh.
Yeah.
And just know that we want the best for you. I have no bias. I want you to live a great life. And I'm just telling you what I would do if I was in your shoes. And a lot of times that means doing really hard things that suck, that are not fun.
That's facts. And I think you and I together, because you're kind of a no nonsense. I'm a no nonsense. It might be, you know, you call it your own risk is all we're saying.
Yeah, I mean, I am very nonsensical. Yeah. When it comes to your the advice I give you, I'm going to tell you the truth is if you were my best friend.
Yeah, well, I think part of that, George, I think we're like that because we've walked through so many of the scenarios that people call in and are asking about. And so we're not just talking about it from head or book knowledge. We're talking about it from experience as well.
And so there's a lot of it would do what we're telling you to do. That's right. Jade has lived it. She paid off almost half a million dollars between her and her husband over seven years, a lot of sacrifices made having roommates while y'all were married.
Bro, ten out of ten would not recommend.
And there's some people who are, who are single, who are like, well, I don't want a roommate, Jade. I'm like, you're saying. you're a 25 year old dude. Get a roommate.
You know what? And that's what it is, George. I think there is a low BS-ometer like we. we can sniff out the BS very quickly. And it's like, wait a minute.
You just don't want to be uncomfortable, or wait a minute. You're just scared, or wait a minute. You're giving a lot of excuses, right? And I think we can sniff it out because we've been there and we've had to work through those kind of mental hang ups, because there are. I mean, there is a level of discomfort that goes hand in hand with walking the baby steps, but it's sacrifice now.
It's that temporary sacrifice. So that long term.
But it's weird. Most people would rather be in a low level of pain for 25 years versus just doing something hard for a season.
I think it's just the fear. I think it's a fear of the unknown, because, think about it. If you, hopefully, this analogy works out, I'm going to go with it. Like, if you go to the doctor's office and it turns out that you need a procedure in order to be healthy, right? But you've never had the procedure before.
The first thing you think about is what?
Is it going to hurt? Yeah. Is it going to hurt? How long can I put this off for?
How long can I put it off? And in many cases, people delay the care that they need because of fears about a pain that's probably very temporary. And then after that, they can go on to live a healthy life. But they're so worried about that. first, like initial.
What's it going to be like if they put me under? What if I wake up? What if, you know, and it's like you're just freaking yourself out. But it comes like it turns out that we actually are very adaptable as human beings and we have pain tolerances and we can do hard things. And what doesn't kill you makes you stronger.
What doesn't kill you makes you stronger. Yes. On the harmony. That's what I'm talking about.
Great. I'll work on that. But I think comfort is the enemy of growth. And Michael Easter wrote a great book called The Comfort Crisis. Yes, George.
And I think that's what America's come to. You hear these calls. You're like, how did this person make these crazy decisions? Well, they wanted what felt good in the now. They wanted to be comfortable now.
They wanted the lifestyle now, instead of delayed gratification, which has now become a virtue, that if you can get there, you're going to have the most wonderful life of abundance and joy and peace. So just wanted to put that filter on. Don't call the show to justify your bad move. Don't try to bounce around ideas. We are telling you this because it's your in your best interest.
And we have lived it. And we would do the same thing if we were you.
That's right. And George just has a snarky personality.
I can't help it. It's a defense mechanism.
A sarcastic fellow.
I'm working through it, guys.
All right, Larry, enter at your own risk. Larry, from Lubbock, Texas. What's going on, Larry?
I'm actually. I need some honest opinion.
Yes.
I am struggling with the idea of staying at my current job, which would mean most likely taking over the former position from from my current boss.
Or going back to my old job that has better benefits, better pay,
but has proven to not respect their employees.
Oh, why would you ever go back to that? No amount of money is worth that.
I mean, you're right, but who cares about a 401k match?
if there's a sole tax to be paid. every day you walk in there? You sit in your car going, oh, here we go.
Were you the foreman at the old job?
No, I was just a just a heavy equipment operator.
Why is it that becoming foreman at your current job is not giving you a pay increase?
No, becoming foreman at my current job would probably give me a pay increase, but it would probably only give me about as much as I would be making going back to my old job, which is I work for the county. I do. I do road construction.
OK, so foreman gives you the same pay as the old job. So tell me now, why would you not? Take it. What's the benefit in going back to the old job is what I'm saying.
Well, it would require me taking the job from a guy that I mean, I kind of respect, but he's in way over his head and he's causing a lot of damage to this county and he doesn't even realize it.
At the old job?
No, at the new job.
At the new job. OK.
Oh, so you're not. I didn't realize that. So it's not. you're being offered this. You're kind of.
is this you stepping up and kind of saying this guy doesn't know what he's doing? Is that what's happening?
Yeah, this would require me stepping up and talking to basically the commissioner and saying, you know, I can improve this place, but you have to give me the help.
A revolution. OK. Well, what's wrong with just having that conversation and seeing what happens?
Um, nothing's necessarily wrong with it, but I don't really want to stir the pot. if he's just going to kind of keep in the blind and keep with the current current pace of things. Um, you know, that would still. that would still require me morally to find somewhere else to go.
Who's between who's? OK? So he's the foreman. You're at your job. Who's between you guys that you go to?
Nobody. And since I've gotten here, he's, I mean, it's. it's been obvious. he's coming to me with every project, every road that we work on. Like he's.
it's very obvious that he doesn't have it, have the knowledge, and he's relying on me.
So he's out of his debt.
Yeah, and I'm tired, tired of doing his job and not getting the pay for it.
So you're getting resentful. You don't like the old job. It sounds like you're between a rock and a hard place here. You don't really want to do either of these things.
I mean, no, my overall is to not do either of these things.
So what is your goal? If I snap my fingers, what would be true? Would you have a totally different job?
No, I'd still be doing this, but my own, my own company. Oh, be private.
So what would that look like? Tell us realistic steps that.
Can you go work for another private company and learn the ropes?
I mean, yes, and that's kind of what I'm doing here, but the the reason why I chose these is because it gives me the time off to be able to spend with my family, excuse me, it's been hard for me.
It gives me time to be able to spend with my family after a hard divorce and trying to just start over.
I think that plays into your decision. It's a bigger decision than just pay or a boss. You got to think about what needs to be true five years from now to where this is a sustainable life. I enjoy what I do. My family's taken care of.
Our goals are being met.
And that might mean that I could do that.
I could do that at either of these jobs. This is more of just a I want to get. I want to move up from here.
I think that you're limiting your options between this job or that job, the old job or the current job. when there's a whole world. You're in construction, right? Yeah. OK.
There's a whole world.
Are there more than two construction companies in the area?
Yes, but like I was about to say, most of the construction or contracting crews around here, you know, they're required. that you work seven days, you know, six, seven days a week. You know, you're working 12 hours a day. And I see time with my family is really important to me.
So there's a sacrifice to be made there where you may not be able to do that kind of work. if this is a priority for you to be working, you know, 45, 50 hours a week instead of 70..
Suppose you treated that like a short term deal and said, I'm going to go and work for one of these companies. It's short term, because ultimately you're going out on your own and then you're going to start your own client base. I think if we look at this and realize nothing here is for life and nothing is long term, then you can choose the right setup to get you where you're wanting to go quicker, so you can kind of pull the dock, the boat close to the dock and make that leap into kind of being your own, your own man on this. And I think it's very possible. you're just going to have to zone into one of those options.
This is The Ramsey Show.
From the Ramsey Network, this is The Ramsey Show. I'm Jade Warshaw, joined by George Camel. We're going to be your hosts for this hour. We're going to take your calls about your life and your money. If you want to talk to us, give us a call.
The number is 888-825-5225 and we will take your question. Actually, your call will be screened first for quality assurance.
For all of our safety.
That's right. And then it'll trickle down to us and we'll talk to you on air. So, if you want to do that again, the number is 888-825-5225.. Let's go straight into the phone lines. We got Jackie, who's in Green Bay.
What's up, Jackie? Well, are you there?
Let's try again on. Let's see if we can get her back.
Jackie, what's up? Can you hear me? Yes. I picked up the wrong line, I'm sorry. You bet.
How can we help?
OK, so sorry, I'm really nervous.
That's OK. Take your time.
My call is kind of regarding my teenager. He's going to be 14 next week and he's going to start working. And he's got a really great mindset and he knows he wants to be debt free. And he sees my husband and I start going through the process of Dave Ramsey and the steps and everything. So his plan right now is, he's been telling me he wants to spend 10 percent, give 10 percent and then save 80 percent.
So we kind of talked about opening up a bank account. And he says that he would rather open up his green light or cash app account and then work through investing and like investing into stocks and stuff, because that's kind of what he sees his YouTube friends and stars doing that he idolizes. So I don't really know how to have this conversation with him, but I don't feel like that's the best place for a 14 year old's money to go. But I don't really have any other ideas for him, because he wants to build money with, you know, and invest in what he's got and kind of grow his wealth. So I guess I'm just looking for some advice on how to have this conversation with him and what ideas to give him.
Well, he does have a great mindset. He just has poor execution on this. Yeah, it's great that he wants to build wealth at an early age, but he's seen a lot of people get a little starry eyed over investing in what you could do. And is he wanting to invest in single stocks? What has he told you he's actually wanting to invest in?
He just says that he wants to invest in stocks. I know Cash App and his Greenlight account both have the options to invest. Greenlight, you have to do it through a parent, but it's you have to pay a monthly subscription to then invest in it, which just seems strange to me.
Well, that's the part that I wanted to highlight. is, I mean, at 14, he can't invest in stocks on his own. You have to be there to say yes to that. So, at the basis, it's just you saying, no, we're not going to do that. There's a way to do this.
And this is not the way. you almost have to treat it like anything else that a kid might want to do. that, you know, is not good for him. And it's just like, no, but you got to say no without like to George's point, without squashing their spirit, because there's a part of this that's really great. And I think that you have to find a way to nourish the good part of it, which is like, yeah, there is something to be said about investing.
You want to make good financial choices for the future. And I think this is the opportunity for you to teach that. I don't think that this should be viewed negatively. Let's view it as a time to say, yes, investing is so awesome. Here's the way to do that.
And here's the steps we're going to take. And here's what that looks like. And you guys have the ability to step in and be the authority on that, as opposed to the TikTok bros.
And the way I would do that is I would set up a custodial Roth IRA. He's excited about that. It's something you would manage until he's an adult, 18 or 21,, depending on what the law is in Wisconsin. And that at least allows a buffer for him to avoid making terrible mistakes, which I don't know. if you've opened up an app.
They're not exactly wonderful for good decisions. They are designed to take your money, not make you money.
So you did.
And so that's what I cover this in my book, Breaking Free from Broke in the Investment Traps chapter. Would he read my book if I sent it to you?
Yeah, he would.
OK, if you said this is a prerequisite for you investing, you're going to read this book and you're going to write me a little book report on what you learned about wealth and investing.
A book report, George?
That's what I've done that before. Book report is where it's at. You got to make sure they retain the knowledge. OK, so if you hang on the line after we're done, I'll send you that book. But I wrote it with the younger generation in mind, to help them avoid some of these traps that we're seeing on social media that make it look so easy, because here's the problem, Jackie.
I'm out there on YouTube. I'm trying to do the dang thing, trying to help people build wealth. But nobody likes my advice. I'm like, hey, if you invest consistently for 30 years, you'll become a multimillionaire. He probably wants to make money now.
That's what it is.
He has the attention span of a gnat. He's been watching Cocomelon.
Yeah. Yeah, it's TikTok social media. The hard part with that is, you know, obviously, George, myself and people who really know what they're talking about are on there. But then there's a bunch of folks who are there. They maybe they personally had a good experience.
And so they teach it like it's Bible. And so really even helping him navigate that social media landscape and how to pick and choose who you're following and who you're listening to. It can't just be some guy in their basement. It's got to be someone who's got a track record, who's got like reputable, reputable content behind them. And, you know, even those moments are, I think, a really good teaching moment for this moving forward, not just the money, but the social media side of it all.
And the big key with all of this is you need to teach him that investing equals long term. Otherwise, it's betting. If you're trying to make money quickly in one, two years or even a day, if you're a day trader, that's dangerous. And there's a lot of people who have lost their butts on that. And there's all kinds of stories on the Internet.
They're much more quiet about it when they lose money. But when they gain it, they're making all kinds of videos. And those are the ones that he's seen.
And now they're experts, yeah.
Yeah. So tread with caution.
Those are the people he sees, for sure.
Of course, that's who I want to follow. The guys who are like, bro, I'll teach you how to win. Standing in front of a private jet. There's usually vested interest here. They have a course to sell you.
They're making money off of you. They're trying to lead you into something where they're trying to get your money because they've convinced you that if you invest their way with them, which is different than Ramsey, I don't actually sell investments. And so I'm not here telling you, hey, bro, I'll make you 10x your return if you give me your money. I would never do that.
That's a really good differential. Really, for anybody listening is, we're never going to. I mean, you guys just did a really great investing essentials two night event, the live stream. And Dave, Dave Ramsey really did talk about this. because a lot of people say, Dave, just tell us, tell us the codes, like, just tell us what you're invested in.
What's the ticker symbols? And we never do that because at the end of the day, we don't want you to just do anything because we told you to. We want you to understand what you're investing in. You understand it for yourself. You've chose for yourself.
It's not just, well, if Dave said it or if George said it, or, you know, John said it, I'm going to do it. That's really what we're trying to protect and guard against. And so, yeah.
And he's going to be just fine, even if he didn't start investing until he was out of high school and he's in college. With this mindset, he's going to be a multimillionaire if he can do it, avoiding debt.
And so that's definitely his mindset.
Instilling the actual principles, the disciplines, is more important than getting into the stock market at 14.
. So I hope that helps you, Jackie. I'll make sure to send you a copy of Breaking Free from Broke, specifically the investment traps chapter, and the wealth is patience chapter, which comes later, which is the right way to build wealth. And, Jade, I talk about the three stooges of wealth building in the book. Let's hear it.
It's fear, greed and pride. Oh, behind every bad financial move when it comes to wealth building are one of those three emotions. You were scared. So you bought gold or put this money here. out of fear.
You were starry eyed about how much money you could make. in greed set in. You were prideful and thought you're going to be the smarter investor and choose the right stock on the right day, at the right time. And you try to time the market and you get burned.
That's a good word.
So, if you can avoid the three stooges, what's the opposite of fear? Well, we need some confidence in our plan. We don't want to be scared. Power. Fear is a terrible financial advisor.
Instead of pride, let's have some humility and work with a pro and realize we don't have all the answers. Instead of that, that, what's the last one? Pride. Pride. Well, pride, and then fear and greed.
Greed. So, with greed, let's be more generous. That's. let's be more open handed. Let's not try to get rich quick.
Let's try to. let's try to raise all the ships.
Pride comes before the fall. That's right.
You don't want that. You don't want that financially getting biblical out here.
Pride cometh before the fall. A haughty spirit. That's right. A haughty spirit. This is The Ramsey Show.
You are listening to The Ramsey Show, part of Ramsey Network. I'm Jade Warshaw. This is George Camel to my right. Taking calls all afternoon. Triple eight, 825-5225..
This is a caller driven show, which means you call in. We answer your questions live. Every aspect of this show is live and in person. So I think that's very cool. Get involved by calling the number.
We got Ryan, who is on the line from Cleveland, Ohio. What's up, Ryan?
Hey, how are you guys doing today?
We're doing good. How can we help?
Question. My wife and I have been working through the baby steps and we both work remotely from home. But recently, my company provided me with a company vehicle that I use to travel. I do have to go out to locations.
And then we have two personal vehicles. One of them is paid for. And then the other one is my largest debt left in my snowball. And I just was wondering if it would be wise, since we don't drive as much, to get rid of, to sell that vehicle, to pay off a huge, you know, to get rid of approximately half my debt and then just use our own personal vehicle and then my company vehicle as needed if it comes up.
Yeah. So there's three cars. One's paid off. One has a note and one's the company vehicle. Correct.
So the one that has the note, what do you owe on it and what's it worth?
Oh, twenty three thousand. And it's worth approximately twenty eight.
So we get a little something, something on that action.
Which means, yes. And since you don't need another car to purchase, you could use that five thousand in profits to throw at your debts.
Absolutely.
So not only do you free up a payment and get rid of half your debt, you also start to knock out even more debt instantly.
Yeah. Why not do that? You know, I'm doing that all day. What other debt do you have?
We have approximately twenty five hundred left on the credit card, thirty six hundred on a student loan and fourteen thousand on a personal loan.
OK, so with the five K, obviously the credit cards are done and a good portion of the student loan is done. Any other cash laying around?
A small amount of savings. How much? We've been working through? fifteen thousand.
Fifteen thousand?
A small amount. That's all your debt.
I don't know where you come from. That's a lot of money from my neighborhood.
I'm very conservative.
Help us understand.
Well, you said you're working through the baby steps. You're working through Ryan's steps right now because, you know, the baby steps would say, let's use 14 of that 15 and knock out this debt, which looks oddly like that personal loan, which means, oddly enough, you could be debt free in like a month if you do all this.
I could. I'm just nervous, making big moves and trading my savings.
How conservative are you considering the fact you went 40 grand into debt?
Yeah, we got a lot of very conservative.
You can't be fiscally conservative while going into debt.
I understand. You're right.
You're absolutely right. I say to people all the time, Ryan, that it has to be balanced reasoning. You can't say, well, I'm very conservative and I avoid risk on, you know, when it's time to hold on to the savings. Cause, where was that reasoning when it was time to go into debt? And so that's kind of where that's, that's where we have to question and go, okay, what are we really saying here?
What we're really saying here? is we just like the feeling of being able to say, I have $15,000 in the bank. It's kind of like, you know, that's really what it is. And once you realize that and go, okay, suddenly the logic that I had kind of falls apart when we look at this thing as a whole. Now, you know, now you just have to ask yourself simply, do I want to be debt free or not?
And how quickly do I truly want to want this to happen?
Let me show you how quickly you'll get back to peace. So how much money do you guys make a year?
190.
You make 190 grand and what are your total debt payments add up to every month right now?
Uh, right now they add up to approximately $1,300.
Okay. So lay this out with me. Let's say you completely debt free in a month, because you followed all the advice we just gave you. You make 190 grand plus. you freed up another $1,300 a month, which means you freed up $15,000 a year, plus all of the margin from your income, which doesn't have to go to debt payments.
How quickly could you get $15,000 back in that savings account?
Three months.
So, if you play this whole thing out in about three months, you're back to where you are, except you're completely debt free with this savings.
No, you're right. Sometimes you just got to hear it from somebody else.
That's right. Yeah. Good.
I mean this is such a solvable problem. It makes you excited for you. Most people that call in their cars underwater, they don't have any money in savings. And so you have a lot of great things going for you. We were just doing a few things at once instead of focused intensity, and uh, you'll never have to touch debt again.
Making a 190 with no payments.
Listen, just had to shift the old mindset there, which you know, sometimes you do get locked in. People do get locked into the feeling of having that savings. It's kind of a security. It's almost like, you know how the last segment, you said, the three stooges of the bad investing. It's almost like some of that kind of exists with savings too.
It's like you get hung up on fear and security. Like I would love for you to do a word play on that, George.
That seems right up your alley. It's like a little blankey.
It's like a little security blankey.
That's also, it's a, it's one of those heated blankets that's plugged in. It all takes a little bit of rain and all of a sudden that becomes an electric blanket. Oh, I thought this was good. I was about to say, cause I love a heated blanket. Get me out of those.
I don't want to get electrocuted. All right. Today's question of the day. Comes from Tom in Nevada. He says,
I received a monetary gift from a sibling and his wife 20 years ago, which was under the amount that required anyone to pay taxes. They offered it to me without any, my asking. And, while I was told numerous times by my sibling, this is a gift. Our relationship has changed over the years. And my sibling has told me to repay him and his wife back.
If they were in need, I would do all I could to help them, as they did me. But that is far from the case. Paying them back would not destroy my financial situation, but it would make a much greater impact on my situation than theirs. What advice can you give me in regard to this?
Where's judge Judy when you need it? I know this. Okay. So let me recap here. Um, sibling gave you the gift and now they're like, I want my money's back.
And you're saying what he's really saying is they're loaded. They don't actually need this money. Our relationship has changed. AKA things went South. We're not on good terms.
And this is a weapon that he's now using against me. Uh-huh.
And just, uh, just for the listeners. So if it's under the amount that's required by anyone to pay taxes, that means it's probably below 16,000.. Like, that's the limit on.
Yeah. It doesn't go toward your, your inheritance gift tax amount.
So this could be, this could be kind of a substantial amount. This could be like $10,000.. This could be $5,000, or it could be like $500.. We don't really know. She doesn't say how much it is, but.
I mean, it sounds like this relationship was over anyways. He has no real recourse legally. I mean, this was a gift and there's no way he can go back and say, he owes me this money legally. He wants to come after you. Uh, if, if I'm in your shoes, I'm going to say, thanks for the gift.
It was a gift. I'm not able to pay this back. And I hope you have a great life.
Yeah. It sounds like he doesn't want to talk to you anymore. About that. You don't have to, she doesn't have to lose a wink of sleep. This is the second question of the day in a very short period of time.
that, um, at least I've read where a family member has given another family member a gift and then, then decided, for multiple reasons, to say it's not a gift anymore. And that's just,
well, they use it to hold it over your head later in life.
And then it's not a gift. No. And let's, okay. So if you're on the receiving end, let's talk about it from this, um, point of view, George, if you're on the receiving end of someone who wants to give you a gift, you do need to not get all starry eyed and get all like, yes, or I needed this money or great. You really do need to kind of think about if you want to accept the gift, because you don't have to, there's a part of that, that you can go, tell, you know, is this the type of person who might hold it over my head later?
Is this the type of person who might want something in return, even though they say it's a gift? Is this the type of person who might, you know, make me feel some type of way or make it, make it seem like I owe them. So there is a bit of vetting that the receivee should do on the front end before they become the receiver.
Yeah. I love the quote, choose guilt over resentment. And right now I think what's going to happen is one of two things. Either he gives the money back and then Tom here is resentful that he had to give this money back, already ruined the relationship, or he doesn't. And instead he feels a little bit guilty about it.
Versus resentful, which is a little more, that's a poison you drink.
Yeah. I can get over some guilt. And truthfully,
this relationship has been over. I don't know what changed over the years. We don't know the story there, but it doesn't sound like. in any case, the relationship will be solved and magical and healthy again. Yeah.
If the money's given back. I don't, I don't think Thanksgiving dinner is going to be any better.
Yeah. I just need people to stop trying to control other people. You can't control people. And a lot of times we use money as the tool where we think we're going to.
Weaponizing a gift, a financial gift, is one of the most disgusting things a.
human being can do. Yeah. Yeah. This is, this is bad, bad.
I'm sorry, Tom. Yeah. I'm grieving the loss of the relationship more than this money situation. That's a bummer with a sibling. Yeah.
This is the Ramsey show.
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And we'll chop it up with you. We got Kayla, Las Vegas, my favorite city.
What's going on, Kayla? How's it going? Going well.
What's going on in Las Vegas?
Thanks for taking my call. Yeah. Very hot. And we're struggling out here. Oh man.
Tell us about it. Yeah. So just kind of long story short, essentially, we're in a really like drowning in debt. We've got about 50 grand in credit card debt, which we were like getting ourselves out of. And then eventually it just turned into, couldn't get ourselves out anymore.
And then living off credit card, trying to put food on the table for our babies. And then about 60K in student loans. We're in a hole with our, two of our Jeeps. We owe, we're. just, one is a $900 payment.
One's a $400 payment.
What's the full amount of the first Jeep?
40K on that. And we would be, it's worth about 31.. So we were in a bad car position and that was what they were willing to swap us out for. And essentially just really bad, bad situation. I'm going to say, Oh, mom, my husband's a teacher.
I'm going back to work in August to be a teacher. But we wanted to move out of state and we were almost to the point of wanting to just sell our house and take all our equity and put it in to pay off all the.
debt. Well, let's look at it. Yeah. So Jeep number one is 40K, but it's worth 31K. What about Jeep number two?
Jeep number two. I think we have about, it was 45 and I've had that for a long time. We have, Oh, about 17 on it.
17.
. What's it worth?
And then what was that? Sorry.
What's it worth?
I think that one's only worth about maybe 15 we got.
Okay. So that's not as bad upside down. Yeah. Then you said, so, it's credit card, student loans, two Jeeps. Then what do you tell us about your mortgage?
So our mortgage, that was the other problem. We moved about two years ago into this house and we were thought we were going to be at one interest rate. And then, right before we closed, interest rates went up and we're at a $3,200 mortgage. And so then, um, my husband makes 90K, uh, he makes about 5,500,.
400 a month. Oh, Oh boy. That's where the problem is. A big problem.
Uh, and, and so then last summer we literally were to a point, like we were going to buy Costco groceries and then next day we'd have to go return our food because we had to pay the bills. And so we turned to like a debt relief program. And I feel like ever since then it's gotten even double worse, because now our credit is so bad and we can't do anything. It's like we don't see a light at the end of the tunnel.
It's you. Yeah. You're in a hard spot right now. There's always light, though, and there's always hope. So I don't want you to think that all hope is gone, because it's not, it's just going to take some time and some, a little bit of pain, possibly, and some discomfort to get out of this.
But I promise it'll be worth it. So, looking at, looking at all of this, tell us about your income.
So, with the 5,400 a month he makes right now, when I go back in August, I was staying at home because what we would pay in child care would have, yeah, I mean it wouldn't have made sense, but now, um, with the pay raise we'll be getting as teachers, I'll be making about 70 and then we'll be spending about half my check towards childcare. So I'll be taking home a little extra.
How much do you think?
Probably about 2,000.
Okay. So that brings us up to 70.. Okay. So that brings us up to 7,400, which helps this mortgage look a little better.
It helps give us a margin to pay off the debt. Cause. right now, what are your total credit card payments?
Oh, we, well, we put a lot of them in a program and I know ever since we weren't, yeah, yeah. So we, but I mean we're, one of them. we're being, I don't even know if I'm allowed to say the word, but three or four.
Um, yeah. So we're just, we just don't know what to do. Do we pull them all out of the program? Well, they're not all in the program, just half of them are.
What is this program doing? Do they tell you, Hey, don't make any payments, let it trash your credit. We'll negotiate. Exactly. Oh gosh.
Exactly.
And that's why we got sued, cause we weren't like responding and we thought it was being handled. And then it was apparent.
These companies are scummy. They're just as bad as the credit card companies, if not worse.
Uh, yeah. And we're just scared. We have a four year old and two year old and we, we, we know we're taking blame, but we just don't know how to, where, who to turn to. essentially. We're kind of silently struggling right now.
Okay. So for me, the big glaring problem, this mortgage is really eating your lunch.
60% of your take home pay is going to the mortgage. 25% of your take home pay is going toward these, just the car loan payments, which is 85% of your take home pay, which leaves 15%. And you still got to pay your student loans, the credit cards, put food on the table, cover insurance, utilities. So are you guys continually going into debt to cover the gap? Yeah.
Yeah. Well, yes and no, we don't use any credit cards right now. My mom helps us. Um, she helps us a couple hundred bucks a month where she can. Um, and then, other than that, we've really just tried to cut out almost everything.
And we've been trying to sell like some stuff around the house and that kind of thing.
What do you owe on the house and what's it worth?
Uh, so, so we purchased. price was like six 30, six 16 actually, I think. And we owe about four 60.. And I think we just looked into selling and they said we could probably list it for around six 30.. Okay.
That's good. Possible. Yeah.
So, after fees, you might net like one, 40 out of that. Yes. Which would clear all of your debt almost, or at least give you enough to get rid of the cars, get different, beater cars, get rid of the credit cards and student loans.
Have you priced out what, what, what it might be for you guys to rent a two bedroom apartment?
Well, we have not, because we have five dogs and most places.
Five dogs. Goodness, gracious. Okay. What would it cost to rent a house?
Uh, uh, probably about, I think they said we could get about 3000 a month to rent it.
That's not changing much for you guys. No. I mean, that's a $200 difference.
Could we buy another house with that credit? Or is that not possible?
You can't buy, you can't, you can't afford to buy a house. You have to have a down payment to buy a house and you need to have three to six months of expenses to buy a house.
Your debt to income ratio is out of whack. And so you're not going to be able to just go over. You need to put paws on home ownership and we need to clean up all this debt.
And, and I'm going to say something highly controversial and highly, you might just be like, Jade, forget you. Don't let these dogs keep you from doing what you need to do for your family.
If you need, to rehome these dogs to a wonderful family, who'd be psyched to have them and can take care of them.
And you can visit them, but do not let these dogs keep you from getting in the living situation.
If these dogs are eating and you can't eat because you've got to return your groceries to Costco, we got our priorities out of whack.
Five dogs is a lot of dogs for somebody who can't, who's struggling to afford groceries. Yeah. And I hate to say that, because we love our pets, but in this case,
A dog to every one of your family members for the next year until you clean it up and see what's next. Yeah.
So we have about 10K in savings. Should we start, should we put those towards all credit cards?
It helps. Well, it's almost the amount you're underwater on, on the car, which could get you out of the car. So I might just save up until I can buy a beater car, use that money, savings plus that new savings amount and get out of this car situation. That's good. Payments.
Yeah.
That'll give you a little breathing room there, but not much. That right there is excellent, but it doesn't take the place of the living situation.
I think we still got to get rid of this house.
Yeah. Unfortunately. So sorry.
This is tough. No matter what's next, it's not going to be fun, but I want to get you to peace fast as possible.
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You're listening to the Ramsey show and uh, I'm Jade Warshaw. Next to me is George Camel taking your calls. If you want to get on the line, George, the housing market, the way things have been, has got people feeling some type of way.
It do be like that.
And I feel like we've moved. and don't get me wrong. It's crazy out there. It's truly bananas, no matter where you are in the country. And I think it's taken people to a new level of desperation that we're seeing.
It's like, I gotta get a house. I gotta get a house. And some, some crazy trends are popping back up that we really haven't seen the likes of since 07, 08, the types of things that brought us into that, that busted the bubble. You know what I'm saying? Back, back, back in the great recession.
And, um,
Well, and we, we say the word house poor a lot on the show. And what that means is too much of your income is being taken up by your housing expense. And so if you make five grand a month, take home and your mortgage is $3,500, you're going to have a really hard time eating, building wealth, paying off debt, getting an emergency fund, going on vacation. And that's why we tell people, Hey, 25% is the limit. Now, what that means is sacrifices must be made.
We can't live in this area. We have to get a condo instead of a single family home. We have to get a roommate or two, but these are the sacrifices that you have to make in order to still accomplish your financial goals.
And that 25% is all in. I mean, that's everything. Taxes, insurance, HOA, like we're, we're talking about everything that could be comprised in there, because sometimes people try to separate it out and I'm like, no, it's everything in there.
And this applies for renting too. Yeah. If you rent, like this guy called in yesterday, he rents $2,100.. He brings home four grand and he was wondering why he couldn't figure out, he didn't have any margin and went over half your income is going to pay rent. Yeah.
So get her. He's a young single guy. Get a roommate. Anyways, let's talk about the scariest latest trend in the mortgage world.
Zero down payment mortgages return the return of the zero down payment mortgage amid high housing costs. George, I wanted to jump out of my skin when I saw this United. Here it is. United Wholesale Mortgage. It's U, U W M.
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