Intensity and Intentionality Are the Keys to Building Wealth
2023-11-20 01:47:26
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, this is The Ramsey Show. It's where we help you, America, help you win in your life, specifically with your money, your relationships, and your work. The phone number is 888-825-5225.. It's a free call, 888-825-5225.. I'm Ken Coleman.
John Deloney joins me this hour, and we've got the good doctor is in here, so this is your mental health and relationship expert, and then I'm in the workspace here at Ramsey, so we don't have a money personality on, but that doesn't mean we aren't going to take money calls, because we are going to take your money calls, your work-related calls, and then mental health. By the way, they all work together. John and I were talking about this the other day, about how, if your work life is sucking, you're going to drag that home with you, and if your home life is on fire, you're bringing that to the office. So all the calls, money, relationships, work, mental health. today, we want to help you.
You ready to go?
Yeah. And, by the way, if your money's not going well, there's no way you can be well.
That's correct. No matter what you're doing.
If you're driving to work, and you don't know if you have the money to put gas in your car, your work day is not going to be great. It all works together, man.
That's true. Absolutely right. So let's start it off with Barbara in Reno, Nevada, they tell me. Not Nevada. Barbara, how can we help?
Hi, Ken. Hi, Dr. John. How are you? Good.
We're having fun. What's going on with you today?
Well, first, I just want to appreciate you saying Nevada, right?
I got to tell you, I said it wrong enough to finally get it right. It's Nevada. Even though I want to say Nevada, it's Nevada.
Awesome. So the reason I'm calling is because I have committed plenty of financial infidelity, trying to help my father, who's disabled. He has little to no income. And it's becoming a problem, obviously, in my marriage, because we're now in phase step two. We're wanting to, you know, knock all this debt out, but at the same time, still kind of emotionally tied, like, wanting to help my father, but like wanting to stay faithful to my, you know, my finances.
So what has happened up to this point? Give the good doctor here a bit of a sample of what financial infidelity has looked like up to this moment.
So my father's come to me for loans, and, you know, we're not talking like big numbers, like thousands of dollars or anything like that, but, you know, maybe like the hundreds range, but like we're, my husband and I are kind of like low income, so it's a big deal. when we loan out, you know, a couple hundred dollars or whatever.
What's your combined income?
Right now, it's, we're a one income household, and we're shy of $39,000..
Why are you a one income household?
So I'm a stay-at-home mom right now, but I just, I got, I had a work injury. And so I've been kind of stuck at home, you know.
What kind of work injury?
So I hurt my back at work.
Can you get a job working from home?
I was, I'm looking into it, but the main thing is that, like, with my dad, it's kind of become a little bit of like, I don't, I don't know if emotional manipulations become kind of like a strong...
Nope. I don't know if that's a strong term. Listen, I just want to stop right there. A hundred percent of this is on you.
Yes. Okay. I agree.
I agree. So what your dad is doing, what he knows to do, which is to ask you for money, and he gets it from you. Right. And so if you cut that off, or if you say, Hey dad, it's not a good time. He's going to use whatever tactics he knows.
And if he was on the phone, I would say, stop doing that. But the fact that he gets an exchange, money comes from your account to him, he plays no part in that. You give it to him for whatever reason. Okay. So whether he's manipulating you, being mean, whatever, you are handing him the money.
And at the same time, you're choosing to lie to your husband about it.
You're absolutely right.
So I want you to take full ownership of the same ownership as, and the reason Ken's asking you about what does this look like? And I'm asking you about working from home. is it's real easy to get into this. Well, I can't do this and I can't do this, but I have to do this. And I just think there's a big box of bull crap to most all of that.
Yep. You can get a work from home, job. Millions and millions and millions of people have done it.
Yeah. In fact, her answer to your question, you asked her point blank, can you? And you said, Barbara, I'm not picking on you, but your response was, well, I'm looking into that. When the answer was yes or no, and the answer is yes, unless the kids are eating up all of your time, but you work prior to the back injury. So the question becomes now, how long before the back is healed?
When does the doctor say you can now resume whatever your previous duties were? The point we're asking here is, is you've got to make some changes. Number one, we need more income. At this point in Reno, Nevada, in 2023, with you, have the ability to work at home or in the office, your choice, there's no way you guys should be making 39,000 gross. That's separate issue from you giving your dad money.
But either way, we've got to make some really clear changes in our life.
It's also easy to get buried by shame. You do one, you don't tell the truth one time, and then that piles onto this and it piles onto that.
So what I want you to do is to begin to think of yourself, imagining yourself standing up on your own two feet and saying, I'm taking control of all of this. Now, has your husband asked you point blank, where's all this money? And you're like, I don't know. And you've lied to him? Or have you just done this thing quietly?
So my husband and I started talking about it a few months ago, maybe more than that. Because, obviously, like, things started to get tight. And it was like, oh, well, how come we can't, you know, afford that. And then, you know, I had to kind of complain about it. And so now we're kind of on, you know, I've told him, like, I'm going to put my foot down, because you're absolutely right.
I, the onus is on me. Like, I'm the one that needs to have the backbone to be like, you know, I'm sorry, dad, I can't. And that's true, because we don't have the money. But I do agree with you guys. I definitely need to get a, you know, a job from home.
I'm not opposed to that at all. So he, to answer your question, my husband is aware, he, you know, we've, I've made, we've made an agreement together that I'm not going to fall back on that. I'm not going to, you know, feel, what's the word? Like, I'm not going to do that anymore.
Barbara, one of the things that you guys probably should do is a budget. If you guys done an every dollar budget using our world-class app, or the point is a zero-based budget where we're going to spend every dollar on paper, because this is an extra layer of accountability. If you're both communicating on the budget, then the agreement that you just made or you mentioned has more teeth. Have you guys done this?
Yes. So we have a budget. We actually need to plug back into the dollar, every dollar app. Yeah.
Because there's not a line item for dad anymore.
Right.
Or, if there is, or if there is, you agree on it. We're going to sit at 50 bucks a month. And that's what we've agreed on. If my dad was disabled and could not eat without support, I would have a hard time not helping. Okay.
Yeah, of course. But I would have to sit down and be honest with my wife about it and not lie and hide about it. And maybe I can't send him 500 bucks like I want to, but I can do 50.. And I would recommend you and your husband getting on a phone call with dad. So you're both on the same page and say, dad, we've done a budget.
We can no longer afford to support you. We can do this, or we can't do anything. And that's the way it's going to be moving forward. So you're both on the same page. Dad can't pull anybody's heartstrings, and then y'all can get lined up and go forward together.
But you got to get a job ASAP.
Thanks for the call, Barbara. Don't move folks. More of your calls coming up. This is the Ramsey Show.
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Welcome back to the Ramsey Show. I'm Ken Coleman, joined by Dr. John Deloney. We are here for you this hour. The phone number to jump in is 888-825-5225..
That's 888-825-5225.. Let's go to Omaha, Nebraska, now, where Jack awaits. Jack, how can we help?
Hi, so I'm 19 and a couple months ago I had gotten back from vacation with family and my car, well, my previous car was a Ford Fusion 2017.. I bought it for $15,000.. I took out a loan, probably not the best idea. And within a couple months I had the engine overheating all the time and head gaskets started blowing. So that car I had to like end up fixing, which ended up costing around like two to three grand.
And then there was one issue after another. And by July of this year, I had to trade it in and was about $8,000 under on that car loan.
And everybody that was helping me find cars and everything ended up telling me that it would be a great idea to get this Hyundai Tucson 2020, which probably shouldn't take other people's advice that aren't in a great position, but I did, and now I'm having a car payment that's right around $500 a month, 6% or 7% interest and overall loans $28,000.. And I'm just curious what you guys think the best route would be to get out of this situation.
Okay, do you have any cash at all?
I've got a thousand cash, then I've got right around $18,000 in investments.
What kind of investments?
Stock market, just normally ETFs like S&P 500, BTI and QQQ and stuff.
Okay, well, because these are stocks, this is not a retirement account, because people call all the time on the show and they'll ask us, should I take money from my 401k or retirement accounts to pay off debt? And the answer is no, because you're not getting dollar for dollar there and you're hurting your investment strategy. But in this case, with the stocks, as volatile as they are, we absolutely in this case, would say, yeah, cash out those stocks. That's 18, of course, you're going to take a little hit on that, but that's going to allow you to make a huge dent in this car. And then my guess is you could knock this thing out with that kind of a headwind.
What kind of income do you make?
Right now I'm making about 700 a week after tax.
Okay. All right. So what do you do for a living?
HVAC and then I got a part-time gas station job.
All right. Is that part-time gas station job included in the 2,800 net per month?
Yep.
Okay.
What are you doing for HVAC? You'll make 2,800 bucks.
I was going to say, I'm surprised you're not making more money.
I had some HVAC guys out and I sneezed and they charged me $2,800..
Right. So I'm a first-year guy, I've been here for four months now, and I'm just working on new residential buildings. So I'm just making a base.
Are you in an apprenticeship?
Yep. Yep. So I'm going to be starting school, actually two weeks from now.
Is that the only debt you have?
Yep. Oh, 200 on credit cards that I pay off. I don't carry a balance month-to-month.
But-.
All right. John, you want to take a look? Go ahead.
Oops, sorry.
No, no. Go ahead.
I am thinking about canceling the credit cards because the cash back, it's 1%. Yeah.
That's a game you're going to lose.
100%. That's a game that smart people came up to come after your money. I'm not saying you're not smart, but you did buy two dumb cars in a row. So you're smart, your track record on money is not. Cancel those cards immediately, dude.
Right. Just get rid of them. Yeah. Okay. And I would sell all your stocks.
And this is what we call a knucklehead tax. And you're 19 years old, dude, I've made stupid decisions with money way, way older than you. So you've learned your lesson here. Don't take money advice from broke people. Right.
Don't borrow money on depreciating assets. It's just such a dumb, dumb thing to do. And- Right. Man,
when you start this apprenticeship, are you going to go up in salary? That's so low. I don't know how you're eating, is what I'm saying.
Yes. So I started off at $15.50 an hour the first two weeks, and they bumped me up to $16.50.. And then, just last week, they bumped me up an extra 50 cents.
Okay.
I think you've got a path forward. Is that what you want to do? You want to be in that HVAC space?
Oh, yeah, because I know that there's definitely money to be made after. probably... It takes some years, and then you kind of try to really start making good money.
Let me tell you what I would do if I were you. I would bounce on the gas station job as soon as we replace the gas station job. So you need every nickel coming in right now because we want to knock this out. But with your skillset, you're handy enough, intelligent enough, two things that I'm not, to fix an HVAC system. There's a lot more hourly opportunities for you out there, using your hands, working multiple jobs.
If you're a laborer for an electrician, or... I don't care. I would be in those trades working as much as I can, because if you take that stock, the stock dividends, you're going to cash the stock out, I would pay this truck off and you're going to be out of this thing pretty quickly if you get very serious. The question is, can you put $1,000 a month? I'm just taking a minimum, $1,000 a month towards this debt.
Could you do that?
Yeah. Yeah. Because my only expenses right now, I don't have to pay rent because I live with my dad.
So right now, my only expenses is phone, bill and car and insurance.
Yeah. I mean, be working like a madman and knock this payment out. So get rid of the stocks immediately, put it towards the car loan, and then get that car loan on a whiteboard or on your mirror. And that's the number. And you go, okay, if I put $1,000 or $1,500 or $1,200 or $2,000 a month, then I'm paying this thing off.
And the nice thing is, you got a decent car, a pretty nice car actually, and you've paid it off. And to John's point, you're not going to go down this road again.
Hey, here's what I would do if I were you, to Ken's point. This Saturday, right after Thanksgiving, actually, Friday after Thanksgiving, Black Friday, I would print off 500 flyers that I will do all sorts of, I'll hang your ceiling fan, I'll put up your Christmas lights, I'll help you get your tree in and I'll throw away your tree when we get done. And I would quit that job. Dude, you can rack up some cash because you know what my wife said the other day over Christmas break? Hey, I need you to hang these two ceiling fans, I need to change these three light fixtures out.
And, dude, if some kid knocked on my door, some 19 year old knocked on my door and said, hey, I'll do that for 350, I would hire you right this second, right? To come in on a ladder, hang a ceiling fan, and you know how to do all that stuff.
You want to drive to Franklin, John and I have jobs for you.
Right now. I'm kidding. Right now.
Please don't do that. Don't drive here.
Yeah, we've had people do a lot of stuff.
We've had people take us seriously. I just realized.
Exactly. But listen, I would go flyer your neighborhood the day after Thanksgiving, and I'm telling you you're going to get some jobs, enough to quit that secondary job and you're going to be in people's homes. You're going to be practicing some of those skills you'll use as an HVAC guy. It's going to be fantastic work.
Yeah, you can do this, man. So you've got it. And here's the deal.
Sell all that stock today.
Get rid of the credit cards. Okay? Let me just walk you through. How long have you been listening to the show or watching?
Oh man, at least a little bit before I was 18.. So probably like a year and a half. All right.
So are you familiar with our baby steps?
Yep. All right.
Then that's what you're doing here. You're in baby step two. You've got the thousand dollars in savings. Don't touch that. The stocks.
Okay. And then you're getting after it. Two and three jobs, like John said. And once you get the car paid off, now you're going into baby step three. Let's get three to six months of your expenses in the bank.
And then, after that, 15% of that check, my friend, and then you're off and running. You're going to be a millionaire. A millionaire HVAC guy who maybe owns his own company and creates jobs. Okay? Right.
That's how close you are to changing your life. You got it?
And when you do this, you're going to start a company and I want you to take care of the 19 and 20 year olds who come and join your company. When you hire them, I want you to sit down and walk them through what financial freedom actually feels like. Because you're going to be on the other side of this. Love that.
Jack, you can do this. We're cheering for you. No more listening to people who are broke on their car ideas. That just never works. But he's going to have a paid off Hyundai pretty soon.
Yeah.
And it's 2020.. It's going to last another decade.
It really will. It really will. Great stuff. All right. He is Dr.
John Deloney. I'm Ken Coleman. And this is the Ramsey Show. Don't move, America. More of your calls coming right up.
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Welcome back to the Ramsey Show. Dr. John Deloney joins me. I'm Ken Coleman. And we are here for you this hour, 888-825-5225..
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You absolutely better believe it.
That's why I head to the woods and bring food home myself, because I got one teenager.
Well, you got one and he's got the hollow leg already, I'm sure. Today's question of the day is sponsored by Neighborly, your hub for home services. When you want to repair, maintain, or improve your home, stop wasting time scrolling through pages and pages of providers. Neighborly is all you need to remember for a nationwide network of local home service professionals. Visit neighborly.com slash Ramsey to find a reliable helper near you.
All right, today's question comes from Marie in Arizona. Marie writes, my husband charges me 41% of my pay for rent and utilities. Huh?
What?
Wow.
Lovely fella.
I think we can stop right there.
I do too.
Wow.
Do you want me to read the rest?
You and I are friends. We hang out. We do. You know how rare it is that I'm speechless. And I'm just trying to think of what it would be like if I sat down with my wife and said, I've done the math.
You owe me. Anyway, I work 30 hours a week and only make $35,000..
There's so much wrong here. We went through FPU, so I have been debt free for years, but my husband has never really been debt free. You didn't go through FPU. I used about $80,000 to pay my husband's debts to help him be debt free several times over the past seven years, but he doesn't stay debt free. He even racked up $14,000 behind my back.
I refuse to pay the debt off after that. I don't have the money to help him, nor do I want to. We keep our money separate now till he cleans up his debt and learns to handle money. It's hard for me to save money when I'm paying him that much of what I make, but he said if I had to go rent an apartment, I would pay that much or more. Oh, geez.
Or more. I feel stuck.
Wow.
This guy needs the wiffle ball, bad treatment.
Yeah, there's very rare...
Smack him around a little bit.
This whole thing is a wreck. Marie, if I was you, or you were my sister, or you were my close friend, I would tell you to head directly to a marriage counselor or a therapist by yourself, not a marriage counselor, because he's not going to go, because you're married to a seven-year-old who has access to adult toys and adult financial institutions. And I would ask, how do I begin to separate myself from this marriage? Because this is somebody who has cheated on you over and over, and over and over again. Over and over again.
And there's no way this doesn't just keep happening. And so, you're right. If you have to go rent an apartment, you'd pay that much more. Anyway, cool. Then that's what I'm going to go do.
And it's very, very rare that I tell somebody that, but this is somebody that I guarantee you, I'd be willing to, I don't have a lot, but I'd be willing to bet what I got that this isn't the only thing that he is cheating on you. This is not the only way he's cheating on you.
Does this feel abusive to you?
Yeah, 100%. This kind of behavior doesn't happen. if there's not an alcohol issue, if there's not a drug issue, if there's not somebody on the side issue, if there's not some emotional, psychological abuse, this is a wreck. This doesn't happen in a vacuum like this. And so, just the language you're using tells me you have had to separate yourself from this marriage while being stuck inside of it to keep yourself safe and keep yourself fed and keep yourself housed.
And it's time for you to be able to breathe and to walk in your own home and drop your shoulders instead of tensing up even more. So I'd go sit with a professional and begin to ask that question. And if he comes around and says, oh, she's serious, then good on y'all. I always love a last second. Everybody decides we're going to be grownups.
But, Marie, you're an abusive mess here and it's time to go sit with a professional, ASAP.
John, I'm not a fan of separation and certainly not divorce. I know there are cases where it needs to happen. This one feels like I'm glad you told her to go see a therapist. My question, putting you on the spot, is, yes, for her. But I would tell her, tell me if I'm wrong, push back here.
I'd tell her in the course of doing that, to go ahead and separate for the point of there's no longer going to be you paying him 41% of your pay for rent and utilities. We're going to separate until he gets a worth of reality, because this is crushing her. They're already living separately. Do you have a problem with that?
No.
That feels like he needs a wake up call.
A 30 day separation just to let the smoke clear is often really good. When you do that, you want to have, for lack of better terms, a contract. Here's when I'm coming back. Here's where we're going to meet for lunch to talk after 30 days. But yeah, this guy's living a delusional life that she has continued to duct tape together for him so that he can keep flexing and walking around Arizona as though he runs stuff.
It's time for her to get out of this, because this kind of crap escalates and it just gets worse and worse. It's tough. I hate this for you, Marie.
Thank you for the question, Marie. Brian is up next now in Jackson, Mississippi. Brian, how can we help?
Hey, guys. Thanks so much. I hope I've got kind of a fun question here for you. I'm excited about it. So my 16 year old son started off cutting yards, actually this past summer cut enough yards that he's sitting with a couple thousand dollars in his bank account.
He bought a zero turn mower so he could cut more yards faster with his own money. He's done an incredible job, all that while being in band in high school and doing band camp and all the practices and everything that he has with that. So he's doing really awesome with it. And now, because of his hard work, ethic, the church that we're at has hired him to be their custodian, which is about maybe a 10 hour a week job. And he makes $200 a week.
So he's got an opportunity, as a 16 year old kid, to make really, really good money between that and his yard business.
Way to go, dad.
Yeah, you're dad of the year too, man, because that kind of stuff doesn't happen in a vacuum. He's watched his old man work really hard. So good for you, man.
Well, thank you. Thank you. I appreciate it. And he does really well. When he gets busy, he hires his younger brother, younger sister, to come help him.
Hey, Brian, we've got about a minute and a half. We want to help you out. What's your question?
My question is, I've talked to him about investing everything with that. He doesn't know for sure what he wants to do about college, but he's got grades and bands, things that'll help, a lot of scholarships. But he wants to do something good with this money, whether it's college, whether it's 10 years down the road for a down payment on a house, whatever it is. He wants to be smart because he's going to be making more money than the 16 year old me.
So I'm trying to help him, guide him along with it.
I would get him a high yield savings account, not just your bank savings account. I would shop around. My wife and I've got a great high yield savings account that's paying us close to 6% right now. So I would park that money because of what you just said. He's got a lot of options.
And so I wouldn't be investing that right now. I'd be piling it up, stacking it up in a high yield savings account to get the most out of it. Right now, interest rates are in a really great place for that. So show him how that's working. Just keep feeding that engine.
He's tasting it. He's seeing it. And I'd keep feeding it to show him, hey, right now we're going to stack it so that you can use it any way you want to, as we get a better view, if you will, of his future. But you're a good dad, Brian. It's a good kid right there.
I've got to get me a zero turn. The problem is I have a postage stamp of a yard.
It's a lot of fun.
I'm coming out to your house this weekend. This is The Ramsey Show.
Welcome back to The Ramsey Show, where we help you win with your money, your relationships, and your work. All three of those need to be in sync for you to live a fulfilled, peaceful, enjoyable life. And we want to help you do that. The phone number is 888-825-5225, 888-825-5225.. Dr.
John Deloney joins me. I'm Ken Coleman. And we are here for you this hour. Let's go to St. Louis, Missouri.
Roy is there. Roy, how can we help?
Hello.
Hi.
Well, I guess let me start with the worst. I was recently diagnosed with a rare cancer. I have about three and a half to five years life expectancy. My wife and I, before the diagnosis, I knew this was coming. At the time, I had no insurance.
We got a medical divorce, and we put...everything that I had of value went to her. So the home was in both our names. It is in her name. We had two rental properties that are now been moved to her name. Also, a small business that we have that was moved to her name.
She took my retirement from a job and what we had put together back. And we have about $26,000 in credit card debt combined together, and I have a student loan for $7,500.. We have about $125,000 put back for retirement and about $10,000 in cash. So my question is, what debt should we... We also have HELOC.
I'm sorry. HELOC for $40,000.. My question is, what debt should we approach first? And if I were to die before my debt was paid off, she would be not responsible for it.
Are the rentals cash flowing? Are they paid off? Are those also debt?
They're debt. They pay for themselves. They cover the mortgage. They cover insurance and taxes and some basic upkeep each year.
So walk me through. I just want the full picture here before John and I weigh in. Give me the two rental homes, the debt plus what you think you could get for them today. Let's go rental home one.
Rental home, one, we owe, I guess, or she owes, around $40,000, and I believe it would bring $120,000..
Okay. Number two?
Rental house number two, about...old about 43, and it should bring about 120 as well. They're both exactly the same size, square footage, same footprint.
And let me make sure I heard you correctly. Those are spitting off just enough to take care of your basics. You're not really in the profit once you look at improvements and things of that nature.
Maybe altogether a piece, maybe $1,000 a year, they clear.
$1,000 a year, both of them combined?
Clear, yes. Okay.
Well, okay.
And let me make sure I got everything else. You have. the lowest debt you have is a $7,500 student loan. Next is the $26,000 credit card debt, if I got that right? Correct.
And $40,000 in...
Excuse me. Thank you. You're welcome. Thank you. Okay.
So, and we have $10,000 in cash. Are you familiar with our baby steps? before I walk you through this? I don't want to...
Yes. I've been listening to this show off and on for several years, and I'm all over the place on the baby steps.
All right. So, let me just give you the basics, because this is going to walk you through what we would tell you to do. First thing we say is we put $1,000 in the bank, which is just a basic starter emergency fund. You've got 10K right now, okay? Then we would say, baby step two is we go smallest to largest debts.
We pay off the smallest debt first. That's for momentum purposes, so that means we would take on the $7,500 student loan. Whatever the minimum payment is on that, we would roll that into the credit card debt next, once we paid off the $7,500 loan. So we go smallest to largest. That means debt one that we go after first, the student loan, debt.
two, the credit cards, debt. three, the HELOC. Does that make sense so far? Yeah. Okay, great.
So, based on what you've given me, we've got 10,000 in cash. We're going to take 9,000 of that, leaving you 1,000.. You still with me?
Yes.
And we're going to pay off the student loan as soon as the phone calls over. That still leaves you $1,500.. You're still tracking with me? Yes, I am. Excellent.
So then we're going to take the $1,500 left over and we're going to put it on the $26,000 total debt. So if those are multiple cards, then you would go at it that way. Do you understand what I'm saying? So is that all one card or multiple cards equaling 26?.
Two different cards.
All right. What is the debt on each of the two cards?
One is around $11,000 and one is around $15,000..
Okay, great. So we're still in order. So we're going to go, we pay off, we take the nine out of savings, pay off the student loan. We have $1,500. we put towards the $11,000 credit card, all right?
And now that knocks that down to $9,500, if I'm keeping score properly, all right? So now you're off and running. Now, John, I would sell one of these rentals immediately, if not sooner, and I would wipe out the rest of this, just given the situation with your health and what you guys are trying to do. That's what I would do. You don't have a lot left on these homes, but what I would do is sell one.
Now this is me. John can weigh in here in a second. I'd sell one of these and if they're both worth around $120,000, your numbers, $40,000 is what you got left on the first one. So that leaves you about $80,000 minus your realtor fee. So let's just say I've got $65,000, $60,000, I'm going to pay off the rest of the debt and, if I can, most of the other rental home.
See what I'm saying? I'm cleaning all this up so that my wife has no debt at all as soon as possible. We're not going to wait three years. We want to get after this now. That's what I would do.
John?
I mean, I can't emphasize this enough that you're, like you mentioned it, you're all over the place. Who gave you, this is, I've heard of this on the periphery, but you're the first person I've talked to. Who walked you through this medical divorce?
I had been reading about it and we went and talked to a lawyer, and that's what we kind of came up with. At the time where I was diagnosed, I did not have great insurance at all. And when treatment started in 2022, me not being able to work, I had nothing. I eventually qualified for Medicaid, which has taken care of all my medical debt so far. And I just wanted to protect her.
And I had been reading where people, where spouses had died with hundreds of thousands, if not millions, in medical debt from an illness. And I knew about this illness in 2021.. So I was trying to prepare her and myself for a worst possible outcome.
I'm just trying to picture myself having to sit down with my wife and come up with either side of a pretty grim calculation, right?
And I'm 56 and she's 62.. So she doesn't have quite a few more years to work. And of course, we don't want my outcome. So I was just trying to protect her the best that I could. I didn't want everything we tried to save over the years.
just go away.
Are you confident that they won't come after her anyway, or at least try, tangle her up for years in legal proceedings?
According to our lawyer, they cannot come after her. Because, whatever debt I incurred now, if I had medical debt, you know, I'm just me.
Wow. What a... Does that make sense? Yeah. It's just such a disastrous state of the world we live in right now that that's the choice.
But that's not the purpose of this call. And so I just want to tell you, we love you. And I hate that you're going through this. I mean, you're staring on a very short runway here. And I want to applaud you for being noble and trying to think of everything.
I cannot tell you this enough.
Minimize every and all variables. Sell everything you can. Pay off everything you can. Your wife may not want to be a landlord after she loses you. At least give her that rental house paid off.
At least give her her current home paid off. Pay off all of your debts that you can. And that means, yes, like Ken said, sell one of those homes. Clear up every single variable possible. Even if it's not as advantageous, you want to give your wife as smooth a sailing as possible.
Tough call. Thank you, sir. We were praying for you. This is the Ramsey Show.
Live from the headquarters of Ramsey Solutions, this is the Ramsey Show. It's where we help you win in your life, specifically with your money, your relationships, and in your work. 888-825-5225 is the toll-free number, 888-825-5225.. I'm Ken Coleman, joined by my colleague, good pal, Dr. John Deloney.
We're here taking your questions. We'll take your money questions, but when we're together, we love to take those work questions, those relationship, mental health questions. All of this stuff is intertwined, so no shame in your game. today. We're here for you.
888-825-5225.. Tucson, Arizona, is where we start this hour. Michelle is there. Michelle, how can we help?
Hi, there. Thanks for taking my call.
You bet.
So, my husband and I bought our house about three and a half years ago, and it's a custom in my dad's culture to buy the house for their kids, but he couldn't afford it at the time. And now, three and a half years later, he can afford to pay off our house for us, and I'm just wondering if I should take that money and pay off the house or do something else with it.
What culture?
Lebanese culture.
Okay. And so, how much is the payoff?
About $320,000..
And he's got the cash?
Correct.
Man, that's not in my culture, I was going to say. I need to call my culture committee and get that thing switched, man. That's incredible.
John, can you take the rest of this call? I'm going to go step outside and call my dad.
You're kidding. I got a high five when I bought a house. My dad was like, get him, guys. That's amazing.
So, is there any, so let me ask this. I think I understand your question, but it feels like there's a question behind this question. Yes. Are you concerned about something? Are you wary of how to do it?
Tell us what you're rattling around in your head.
Are there strings with this money? Yeah.
Well, you know, he's, the house is in our name already, so he can't, you know, take the house. The house is in our name, so it's not like he can give us the money and, you know, take the house or anything. But he does like to brag about giving the money, but that's not really, you know, I'm not too concerned about that. I just wondered if there was like a way to invest that money and take, you know, and make like an income off of, monthly income, off that money. I mean, I don't know.
I'm not very smart with investing.
Well, let me ask you this. Well, first of all, the answer is yes, of course. What was the amount of money? again? Three, what?
$320,000.. Okay.
So, the question is, is dad giving you a gift of $320,000 to do whatever you want with, or is he giving you $320,000 to pay this house off so that he can tell everybody in my culture this is what we do and I've now done it?
Correct. Second one.
Okay.
So the first, that takes the question off the table that you asked us, it's not an option.
Yeah.
And by the way, I would not, if somebody, if I had $320,000 left on my mortgage and somebody gave me a gift of $320,000, I'd take it. I would put it on my mortgage.
That's a massive investment.
That's the ultimate investment. Then you have freedom. You can do whatever you want. You have no house payment. Right.
And then everything you spend on a house payment, you can invest however you want to for the rest of your life, because you don't have a house payment.
Yeah. Yeah. It's pretty neat.
Have you ever been in a house that you owned that nobody else could take from you? No. Yeah, exactly.
But hold on a second. I got to bring the good doctor in on here. Now, I may be reading into this, Michelle, tell me. I do not mean being wrong. I have three teenagers and I've been married 25 years.
Basically, my whole life I've been wrong, okay? But it feels like when we're telling you this, John's laying this out and you're like, yeah, that's pretty neat. It doesn't feel like you think this is neat. Am I right or wrong?
Well, I mean, it would be nice if we had the money to pay off our own house.
Of course it would.
Of course. Do you feel, then that is not, okay, now I think we got something.
Is it ego?
You don't want this. You want to feel like we did it.
Right. I mean, my dad bought me a car when I turned 18.. He's like, you're not touching my car and that's my car and don't take my car.
All right. Okay. That's the strings we're talking about. If he's going to give you that, and then he's going to say, whoa, whoa, whoa, you put your daughter in a nicer school than that. And you and your husband say, no, no, we decided on this public school.
And he goes, no, no, no, no, no. I paid your house off. You put that kid. If that's going to be the life you're signing up for, I wouldn't touch that money. Because then you're trading, you're trading, um, being a slave to a mortgage company, to being a slave to somebody who just gave you $320,000 and thinks they have a, they just bought a claim into your life.
Yeah. I mean, he says he wants me to have peace of mind and he's, he's a lot, he's actually changed a lot, especially having grandkids. now. He's a lot softer around the edges.
So, but you wouldn't be calling us if there, if you were not nervous about taking this check.
Well, of course. I mean, that's a lot of money.
Yeah. But is this, how serious is this? Is this him telling you, you think he's going to weigh in more, uh, and you want him to stop weighing in? or is this, or is this just, I don't, I want to be a big girl and do it on my own. Which one is it?
Or is it both?
Well, I, I, I mean, I would like to do it on my own, but at the same time, I'm not going to tell somebody you can't give me $320,000..
All right. But then answer the other issue. Are you, is, you think he's going to give him more, uh, entree into your life to make a comment here and there if he does this?
I mean, maybe a comment here and there, but I don't think he's going to, I think he's.
gotten a lot better. So you called to get our opinion. Yes. Of course. All right.
I'll give you mine real quick. Um, that issue lies with me. If I had an opportunity, my dad, because of his culture, and wanted to give me the money and this was something he did, I would take it and I would go, you know, if he makes a comment at Thanksgiving or makes a comment at Christmas, or he comments on the kid's school, the kind of car we buy, I'm just going to smile and wave. My favorite line from the movie Madagascar, a little penguin. smile and wave boys.
I just going to take the high road and go $320,000. debt free house, $320,000.. I don't know. I'm going to, I'm going to take it to my professional friend there.
That's what I would do, unless you know. So I'm thinking of Dave Ramsey came to me and said, Hey, uh, John, you've been a faithful employee for X number of years. I'm going to give you $350,000.. Oh. And, by the way, um, you're now on call 24, seven, three, 65..
I wouldn't take that money. I've been on call for 20 years. I've lived that life. I'm tired. I want to go be with my family.
So I would tell him, Hey, thanks. I appreciate that. That'd be. the money would be awesome. I could do some great things with it, but it's not worth selling part of my soul.
If he called me in and said, Hey, here's $350,000, you've been a great, faithful employee. I loved your work. And I just, I just see you here for the next decade and just want to honor you and your family. I would do somersaults out the building and probably my shirt would fly off as I ran to my car, screaming and yelling and cheering. I'd be that happy.
Okay. And so only, you know, what the strings are with this money.
Right.
And if it, if you're saying no, because I just want to do it myself, that's ego.
That's what I'm saying.
Flush that down the toilet, man. Yeah. That's how people stay chained to, like car payments and, and student loans. That's ego. My kid got into this school.
You can't afford that school. We're going to make it work because that's ego. If it is, no, my dad becomes a third adult in our household. I'm not touching that money.
And I, by the way, if it, if that's, if it's not a resentment thing, I would do it. And I, if I would put up with all of his stories, let him crow, you know, sing, yell, scream about how he paid your house.
I don't care. What. if you were able to give your kids through and Twitter? I would, I would be so happy. I'd want to tell everybody.
A hundred percent. I was able to help my kids out like this. Yeah. That's legacy.
I don't hear anything, Michelle, that says you shouldn't take the money. I'd take the money. I really would. Uh, maybe, maybe do a little monopoly money, humble pie, and eat it.
I would pay the house off instantly. I go, dad, this is great. You're the best. You're the man.
I'm calling my dad right now.
Me too. Wow. This is the Ramsey show.
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Welcome back to the Ramsey show. I'm Ken Coleman. I'm joined by my colleague, Dr. John Deloney. The phone number to jump in is triple, eight, eight, two, five, five, two, two, five, triple, eight, eight, two, five, five, two, two, five.
Okay. So our fearless leader, old captain, my captain, James Childs. He emailed John and I earlier today, he goes, guys, there's a viral video that I want to have you guys weigh in on. So James set this up for us because we've not seen it yet. So what's going on?
Yeah, I came up in one of our content meetings this morning and it seemed like the perfect thing for you, because it revolves around work. And it's one of those things where you watch it once and you have a certain reaction. And then, as it sinks in, you're kind of like, there's a deeper thing there. So I didn't want to set it up too much more than that, but all right, let's roll it.
Work until we have to die just for the privilege of being alive. We have to work somewhere just to afford a house that we're never at, because we're working. to afford the house is the meaning of life to work and pay taxes and then die. On top of that, we also have to work to afford our vehicle to get to work in other places and afford gas just to get to work. And we also have to pay taxes for our roads to drive on to get to work.
And then we have to work for our children to go to school to learn how to work, so our children know how to work for their children, so that their children can go to school and.
go to work.
Like, somebody tell me that this is fair. Like, is it lazy to just want to enjoy life? Like, why do we have to work?
Why?
I'm stressed.
I just checked my student loans because I need...
Interesting. So this went viral, you said? Yeah. Okay. Well, okay.
Couple things. John, I can see the tendency for some to just, you know, lay into this young lady and the snowflakery and these things. And I've seen some of these before and have made those comments, but I got something a little different here. I don't see lazy, spoiled entitlement, although I could understand if some see that. I see a little bit of desperation and I think I see a whole lot of no understanding.
And that's not her fault. Here's what I mean by that. I don't think the adults in her life, and I'm not just laying out the parents here, but we adults in her life, whoever we is, we've not done a good job of explaining that there is contribution that is involved with work. Yes, we've got to work for provision. Does that suck?
Sort of, kind of, if that's the way you look at it, right? But I didn't see, I saw sadness. I saw a lack of, what is the whole point of all this? I want to enjoy it. She goes, should we enjoy life?
I think the answer is emphatically yes. But I think when we see work as just this thing to get a paycheck, and it's gonna suck.
and I got to just muddle through it. And the way she laid it out, I do think that's the way a lot of people look at work. I mean, we did a curriculum at Ramsey Solutions that we talked about this with high school students and I asked about the dream job. I said, what does that mean to you? And to a kid, they said, it's this idea of this thing I'd like to do, but I have no chance of doing it.
So if you look at that, then the idea of enjoying work and showing up and doing something that is meaningful, when you do your show and you meet people in a place of pain and you step in with them and you give them hope, I mean, that's rewarding. And I just don't think she's been taught that there is a reward to work beyond a dollar. I think we've failed in that regard. I'm going to say that.
Yeah. And I think if the only places you work are soulless, giant corporations that you know, the only thing you're contributing to is a few people at the top getting rich. You're not, you haven't connected what you do to, you're not solving a problem for somebody. You are a cog in a machine, you are a car in a traffic jam, then that sort of desperation rings true. And I get that.
I've had to explain to people who aren't in our ecosystem,
I've had to go develop hobbies because I like work, because I've always tried to be about solving a problem for somebody. And I like doing that. And so it, it, here's when I get crossways and when I've just sitting with people who struggle with mental health challenges, when I have a day off and I plan, quote unquote, I'm going to do nothing. I'm just gonna do nothing. tomorrow.
Inevitably, about 11 o'clock, I am about a thousand calories more in than I normally am. I feel miserable. My neck hurts because I've been laying cockamamie, watching some stupid show that, like we were not made to do nothing. You say this better than anybody. We're made to contribute to something bigger than we are.
And this is a voice I think generationally that I wish politicians would listen to. That's right. We don't have a lost generation of quote unquote snowflakes. We don't have a, cause. if you, if you work with these, they work hard and they weirdly care deeply.
They just have come to understand, Oh, we are playing somebody else's game. We're contributing to nothing other than getting our boss another retirement home, and I'm out. I'm out.
They've done the math, John. They have. They realize that the average American, that they don't walk around saying this, but they've watched their parents and grandparents work what amounts to about 90,000 hours in their lifetime.
And they get laid off.
They get dropped.
They get, they get cancer and there's like, Oh, that's it. This is it. This is what we...
I think this group has a chance to transform work as we know it.
Absolutely.
But, as I've said a million times, if you spend the majority of your day using what you do best, these are things you're good at. To do work you enjoy, to produce a result that you care about. That's really rewarding.
And you can't wait to get up and go do it again.
You can't. You and I both, we share this. I mean, you stick us on a stage where we're answering questions with real people. We'll stand up there for hours.
Well, you and I fly across the country and leave our families. That's how much we love it.
100%. And so what is that? So that's, for us, that's helping people with that. But for other people, it's welding. For other people, it's teaching.
For other people, it's being in a hospital and being bone tired and taking one more surgery, because you know that you can help and you love it.
I sat with some guys from Hiller Electric, I don't know if I called them out. They came to my house when our power went out, and my power is connected to our well. So we had no water, we had no power. And those guys wake up every day and say, we can help a family have a better day today. That's right.
And they just keep going and going. They have purpose. Is it hot? Yes. Is it exhausting?
Yes. Is it the worst? Yes. And there's a purpose tied to it. That's right.
And so I think, here's my dream. I wish every leader, whether you have five people working for you or you run a huge restaurant chain and you have 50,000, you're not just making burgers. You're helping this person find a little bit of margin in time and eat so that they can be with their kids. If you connect even your front level employees to how we're helping somebody today, you just become a part of it.
Here's what I wish I could do. I wish I could hop in the car with her and go, hey, tell me what you're really good at doing. Yes. And we'd hear some awesome things and we'd say, who are the people you really want to help? Or what are some of the problems in the world that make you upset?
and you would be rewarded if you solve those problems? And you begin to paint a picture that she has a unique design plus a unique story that tied together, she's got something where she goes, I would actually be really rewarded and fired up to go. do that. Oh, and, by the way, make some money, have some life balance, leave work at work.
Yes.
Go home. Love of my friends. Travel the world.
Yes.
Do some cool things. Give some of that money to somebody.
Or, like Tara, the person who takes care of our calendars. If you ask her, what do you put on earth to do to be the best executive assistant who ever lived?
Yeah.
Those kinds of things make me want to pull my fingernails out.
I get it.
And every day she wakes up and she's like, I'm going to go make this, I'm going to do the best job I can, and then these guys are going to get where they need to go and they're going to get to be with their families. And it doesn't matter what jazzes you up, it doesn't have to be an Instagram reel. But go, find that thing.
Culture, what we've done here and adults, what we've done here is we've given these kids the wrong picture of life. It's not work 90,000 hours, hope to have enough leftover in your 401k that that's when I get to enjoy life. And it's not work- We're painting an incomplete picture.
To buy the fanciest car- And get you to the job, right?
No, it's work for contribution and adjust your lifestyle to that. I keep coming back to every time we have these discussions, to the largest millionaire study ever done by Ramsey Solutions and teachers, a median salary in the United States right now of 61,000 and arguably one of the worst workplaces in America right now. They're leaving in droves, but they're everyday millionaires. Why?
They make peace with the Corolla.
That's it. That's it. You nailed it.
They make peace with the Corolla. That's it. It's a great car. Get me to and from. I'm going to help kids.
And they're fine with it, because they know they're turning on light bulbs every day and kids that they're teaching are changing the world. Appreciate the video, James. That really is a big, grand discussion.
Try to track her down on Instagram. Let's have her on the show.
Wouldn't that be great to actually have her on? That's a brilliant idea. This is The Ramsey Show.
Welcome back to The Ramsey Show. I'm Ken Coleman. Dr. John Deloney joins me. 888-825-5225..
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Download the free app for iOS and Android or go to EveryDollar.com, EveryDollar.com to get started. All right, let's go to Alberta, Canada. Kim is with us now. Kim, how can we help?
Hi, thanks for taking my call. My question is, how much of my income should I set aside each month to start and build a business so that I can leave my nine-to-five?
Okay, give us a little bit more of your side business picture. How much is it making? How much are you making in your day job?
So I haven't started the business at all. Oh, okay.
All right, so let's look at your current income. So what do you make?
Sure. So I make $130 a year and my net monthly, after I pay all my expenses, is $6,000..
Okay, so $6,000 left over after all expenses. And do you have any debt?
I have no debt. Wow.
Okay, what is this business that you're looking to start?
So I'm kind of back and forth around two ideas. One is a digital marketing agency and the other is a property management company for vacation rentals.
Okay. And how much time do you see yourself having to put into those businesses? Think of A and B. So digital marketing, A, and let's call property management, B. How much do you think you have to put into those to get those up and running?
Much time. How much time?
I think that, yeah, probably, I would say at least 20 hours a week.
20 hours a week. And then how much money?
And how much money? I think that my startup cost would be $5,000 to $6,000.. And then I would have probably $1,500 to $2,000 each month, just depends if I wanted to run like targeted Facebook ads or something. that would make my cost go up.
Okay. And are you single? Married? What's your relationship status?
I'm single on my own. I rent a three-bedroom house for $2,300 a month, but then I rent out the other two bedrooms. So one is a larger bedroom with two twin beds, and I rent those out for $750 each. And then I have a third single bedroom I rent out for $950.. So my rental income is like $2,450 a month, and then I pay the landlord $2,300..
So-.
Yeah, you're doing great. My only other question is- I drive a used vehicle. Yeah, no, you're amazing. I know that. So, before I tell you what I think on this, the $6,000 that you have left over, after all expenses, does that include you investing 15% of your income?
That does not.
Do you have an emergency fund of three to six months expenses?
I'm on Baby Step 3 right now. Right.
Okay, so I would fully fund Baby Step 3, and then I would move into Baby Step 4 and be investing 15%. Once we achieve those two things, then I would save up, you're going to save up very quickly. the, I think you said $6,000, five to 6,000, what you think is a startup cost. I would save up the startup cost, and I would also save up six months of operations before I ever launched. I really would.
I'm very conservative on that, but the reason is, is because I want you to have stress-free startup for a side hustle. You know, it's hard enough to start a business. There's so many different potholes that we know that entrepreneurs go through in that first year of the business, and I'd love for you to be pretty stress-free to go, this is kind of burn it in the middle of the table money. I know that I'm investing in me and this business, and so I've got that set aside, and with the margin you have and the discipline you have, I think you can do that, and I want to get John to weigh in here, and that leads me to this last piece, which is, you've got to choose on these, and I would spend some time, I wrote a book called The Proximity Principle that I'm going to give you as my gift, and it just simply says this, in order to do what Kim wants to do, she's got to be around people that are doing it, and I want you to have to hang out time with copious notes from people that are running both of those businesses before you choose and before you launch. Does that make sense?
Mm-hmm. Like sit down, take them for a coffee?
So let's say John, let's say John right here was a digital marketing stud, and I mean, he'd been in business for several years, crushing it, I'd want to sit down with John, lunch and coffee, and I mean, I'm not doing much talking other than asking questions, and I've got a pencil and I've got a notebook, and I'm going, John, how did you start? What kind of cash did you have when you started? What were the hardest things you had to deal with? What were the traps? What are best practices?
I mean, I'm going to basically do a college level research paper on, ideally, a couple people that have won in those two businesses. Let me tell you why. I'm going to get all the information I need from my head, and then my heart's going to ultimately decide, I think. I think you do both of those, your heart's going to go ding, ding, ding, ding, ding, or eh, when you hear the good, the bad, the ugly. John, your thoughts on that?
Yeah.
How does that hit you?
Yeah, that's a good idea. I haven't sat down with anyone in property management. I know some people who run digital agencies, I could talk to them.
Here's what you're probably going to find. You're going to find either they say, I wouldn't do this again for anything, or they're going to tell you, like when people ask me about my job, I just tell them, I feel like I'm running a scam. I can't believe I get paid to do the work that I get to do.
Property managers are going to tell you, dude, it's amazing. It's a headache over here, it's really great over here, but incredible. Or they're going to tell you, please, for all that is good in the world, don't do this job. You know what I mean?
But if they say that, Kim- Ask them why. John's right. Follow up why. Because what you've got to, what I'm trying to do here, is get the head and the heart aligned. The head is the logic.
Gathering-.
Yeah, you think it's going to cost 5,000 bucks, you don't really know.
We don't know. And so we want to have a real good, let the brain do what it does best. Gather information, logically, walk through it, but then let the heart decide. And you might have someone go, well, listen, you can make this, you can make this, you can make this, but I'll tell you what, if I had to do it all over again, you know, whatever. And you go, I don't really care because I'm not wired like you.
I think I'd love that. So that's the process that I want you to gather, gather, gather, gather. And it's a selection process. Here's the other reality. You might sit down and do both of these and go, it's neither one of these.
Which, by the way, great, because you're still stacking up money and you've got an entrepreneurial desire in you to work for you. Yes? Yes. Then the selection is so important. But a lot of entrepreneurs get, we get enticed by opportunity A, opportunity B, and we go, is it opportunity C?
That's what I want you to do.
All right. Ken, I'm going to ask Ken a question. Kim, on your behalf. Is that cool? Sure.
Sure. Ken, how many people that you've talked to over the years are like Kim? They make an astound, a great income, six figure income. They've kind of figured out life a little bit. Not afraid to have roommates, to make the extra money, not afraid to, not tied or identity to a car.
And sometimes, when we get settled psychologically, we begin, we're wired. We're not wired for settling. We're wired for perseverance and we start looking over the next hill.
And I hear this all the time, quote unquote, if I could just do this full time, whatever this is. And there's this fantasy that if I wasn't doing this other thing, if I wasn't married to her anymore, if I wasn't living in this house, then, and what I always tell them is, whoa, no matter what you do, you go with you. And it might be fun to dream about, and she might even get one digital marketing client and be like, yeah, but she's making all this from a platform of, she makes $135,000 and has health insurance and has all this stuff worked out. How often do you have people jumping ship too soon to this? quote unquote magic land of doing this full time?
To the tune of millions. It's called the great regret. We all heard about the great resignation. What people didn't pay attention to is how many millions of people left for a better job, this better life, this better check, all these things.
And they went with them.
They got there and they were like, oh, that's not what I was looking for. So it happens a lot. And that's why, it's a great question. And that's why, Kim, I really want you to do the work, let the head and the heart connect and align. And when you get the ding, ding, ding, then we move.
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Welcome back to the Ramsey Show. I'm Ken Coleman. Dr. John Deloney joins me. And we are here for you, 888-825-5225,.
if you've got any work-related questions, you're not making the money you want to make, maybe you feel like you've been overlooked or you're feeling burned out. Those burnout calls, as you're thinking about next year, John, and I love those calls. There's really two sides to that coin. We'd love to take any of those calls. Your mental health relationship questions, Dr.
John, in session today, and of course, your money calls. Feel free to call us. We're here to help you guys, 888-825-5225.. Colin is up next in St. Louis.
Colin, how can we help?
Hi. I'm 25 years old, and I had a question on if me and my wife should pay off our truck or save the money. We have a two-year-old. We got married two months ago, and we have $6,200 left on the truck.
Our take-home pay per month is about $5,600..
But with another baby on the way at nine weeks, we don't know if we should go into stork mode or go ahead and pay it off.
Yeah. Well, congratulations on the little one coming. That's exciting stuff.
The baby's coming in nine weeks, or she's nine weeks down the road?
Nine weeks down the road.
Okay.
All right. So, we've got $6,200 left on the truck. Is that the only debt you have?
We have her car, but we are going on stork mode for her car, because it's a little further out.
Well, give me the whole debt picture, then, real quick.
Okay. No student loans. We're cash-flowing that, and basically just the truck and the car. I think we owe $11,000, $12,000 on her car, and $6,200 on my truck. But her car payment is basically $270 a month, and mine's close to $800..
Well, we normally give this advice, and we want to make sure we batten down the hatches. We want to be very smart for the baby. So what would you say? ... Do you know what your out-of-pocket would cost for the delivery and all that?
Have you done your homework to see, okay, what kind of cash would we need beyond insurance?
Yes. So, her insurance? ... She's a teacher, so basically her insurance is really good. It's $5,000 out the door, and we have that set aside already.
Well, what do you think, John? I mean, he's got the $5,000..
You never know other costs, so ... What do you do for a living, man?
I'm a carpenter.
Carpenter. So, let me throw option three at you, and I do this thought experiment just for myself. Me and my wife do it all the time. If I ever feel like I have an either-or, I always invent a couple of other options, just in case. Okay.
I'm not cornering myself on accident. So let me give you an option three. What if you continued, as a carpenter, to stack money up? We talked about this on an earlier call, and Friday after Thanksgiving, you wallpapered your neighborhood with odd jobs. So I tell you this.
My wife asked me to hang up a couple of ceiling fans and change three or four light fixtures, and then, at the top in our upstairs area, a light went out, so I got to get a big lighter to go fix it. If some guy knocked on my door Friday morning and said, hey, for a couple of 300 bucks, I'll do these odd jobs, I would sign it that second. And what if you put a number? ... You've got nine months, okay, eight and a half months.
What if you put ... Actually, that's not math, seven months. What if you put a number? I want 10,000 extra dollars. And honey, I'm going to put the gas pedal down, and I'm going to work odd jobs in the morning and the evenings, on the weekends.
And so when baby comes, we will have this cash stacked, and we're going to be debt-free on both cars.
Okay. So I guess maybe a caveat to that is, I do have the cash from odd jobs to pay off the truck.
Okay. And you also have the cash for the $5,000 out the door for the pregnancy and the delivery, correct?
Yes. We have $22,000 liquid at this point.
Dude, lead with that next time.
Yeah, hello. Pay the truck off. You're fine. I was going to just follow John and say, look, in your situation financially, I wouldn't stop paying on the truck or car at all. I didn't know you had it in the bank.
I definitely pay off both today, because that's $17,000, and you still got $5,000 left over, plus the $5,000 for the delivery. So you recovered for just a standard pregnancy. You're still going to have $5,000 left over. And what are you paying it? So your car payment, you're getting a big raise from those two car payments.
Yes. Bro! What are you doing? I think part of our problem is we're living with my parents right now. So she's ready to nest, essentially, or start nesting and looking at a house or something for rent.
Well, that doesn't change any of the advice we give you, because you don't need to be taking on renting and all this stuff. if you still got debt and you've got this little situation here. You could pay this off today, then you can go rent, right? Pay it off today, and then we go rent because you've got a nice deposit.
Get your wife an apartment for Christmas.
Get out of the house. Yeah. I love this idea, John, with the idea of the year. That's the Christmas present.
Merry Christmas. Hand her some keys to an apartment.
Oh, yeah. Buy a fancy box.
Have no debt. And then you're making, what, $6,000 a month, right?
$6,200.. It is. Oh, wait, wait, wait. Take home is $5,600..
Yes. Bro. Not including side jobs. Yes. Right.
Okay. John's already painted that picture. I mean, dude, you're a carpenter. Is that what I heard?
Yes.
Dude. You have more work than you could possibly do.
Yes. Hey, hold on.
You're making $5,300. take home with her job and your job?
$5,600 between the two of us, and not including ... That's me full-time and her full-time.
You're not charging enough, man.
And then the side jobs bring in anywhere from $5,000 a month to nothing.
You're not charging enough, dude.
Well, either way, you know your market out there. I'm hoping that you're charging what the market rate is in St. Louis, but listen, you understand what we're telling you to do? You cut the check for $17,000, a check for $11,000, and a check for $6,200 as soon as the call's over. Now you're going into a second trial with no debt at all, and you still got $5,000 in an emergency fund for baby step three, three to six months, so you already got $5,000 set aside in the Stork Fund.
You guys are okay, man.
And let's get that emergency fund up over the next seven months. I agree.
That emergency fund would be the insurance on anything that'll happen.
I'll let her know. I'll let her listen to this.
I'm so glad. I'm so glad. I was worried. We're worried because if we don't have a lot liquid, we feel like we're scared. We're terrified.
Dude, if you do what John said and put a flyer up all over St. Louis saying, experience, trade carpenter for hire, dude.
No job too small. You would be inundated. Put it on Facebook Marketplace in your neighborhood.
Okay. Hang Christmas lights.
Yeah. Anything.
Anything. I'll go get your Christmas tree and then I'll come pick it up after Christmas. I'd give you a million dollars for that job. Just kidding. I hate dealing with an old Christmas tree, but it's just like endless amounts of work.
right now. If you'll go out and get it. You sound like somebody who hustles, but here's a rule of thumb. If you can enter into this next kid, you've got $10,000 in the bank, plus the five that you've already set aside. So this is you earning another 10 grand, right?
And you're able to find an apartment that y'all can afford. Don't go get something knucklehead, but y'all have an apartment you can afford.
You're just good to go. You have no debt. You don't owe anybody anything. You got $10,000.. That's three months emergency fund.
You got a new place and you've got all the thing paid for.
Let me give you a little nugget here. I think this may help, Colin. If your girlfriend or wife, excuse me, if your wife is like, hey, I don't know about paying off the $11,000, just say, hey, babe, this is how much of a raise we're going to get when we get rid of those two car payments. And that's going to go towards your new apartment. Like Bob Barton did.
I see that. You see where I'm going? Because she may push back on that, but you got 22 in the bank. You're still going to have five left over, and oh, by the way, babe, it makes it easy for us to afford that apartment. She's going to be so thrilled to have her own nest.
That's how you win that deal. If there's a little pushback. Yeah. I don't know. I don't know if that's going to work or not, but it feels like it would work.
I just think it'd be pretty good.
She wants a nest.
It'd be pretty cool.
And I think that's a good move.
One time I rented a house. My wife and I thought, my wife thought she was coming to move into a residence hall and I rented a house and it's one of my greatest Christmases ever. I got goose bumps on that one. I put a Christmas tree in it and said Merry Christmas and pretty good.
You're such a romantic, Dr. Delaney.
That's what they used to call me. The romantic. The romantic. No one's ever called me that. Never.
Not one time.
Never. Never. Ever. Alright folks. Great hour.
Thanks to James Childs, our fearless leader. And my colleague, Dr. John Delaney. In you, America. This is The Ramsey Show.
Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, it's where we help you win in your life, specifically with your money, your relationships, and your work. I'm Ken Coleman, joined by my colleague, Dr. John Deloney, 888-825-5225, 888-825-5225.. I got to point out, John, we have a fabulous studio audience today, great looking group of people that have traveled in from all around the country waving at us, and I want to remind you, folks, that we're here Monday through Friday. Check the schedule at RamseySolutions.com, and we'd love for you to come by on your way to whatever you're doing, or if you just want to come hang out with us, you're welcome.
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