Stop Stepping Over Dollars To Pick Up Nickels

We are here for you. Give us a call at triple-a 8 to 5, 5, 2, 2, 5. Fran joins us in New York City to kick us off. Fran. Welcome to the show.

All right. Thank you. When my husband and I got married, we combined everything and I took care of pretty much everything financial, paying the bills, ordering things, Whatever and the only thing that he did was he was in charge of it, the investments, And that worked really well for 50 years, and Then he passed away. I'm smart enough to know the things. I don't know, and I don't know anything about investing, and I Need help.

How do I find someone?

Who can help me without ripping me off? That's a great question. I'm so sorry for your loss. How recently did you pass? That?

eight months ago. Oh, Can I just say, as our new friend Fran, The heaviness of this season. I know it's extra, extra heavy. I'm sorry, Thank you, I hate it for you. so you guys were married 50 years, 50 years in eight days.

Wow Well, what a amazing Legacy and journey you guys have been on together, and I'm guessing, over 50 years of investing, You've got quite the nest egg.

It's probably just a little shy of two million awesome. Do you know what it's invested in? what kinds of accounts? where they're located, you know, what kind of paper trail? oh, I have.

I have all of the paper trail and and.

We've. we've had, you know, some IRAs, some Roth, some investment accounts, it's a whole variety of things. And then he worked for New York City and they happen to have an incredible 401k, you know, in plan and the. From that alone. I transferred over into my name a little shy of a million just from that.

So you've got access to all the accounts, you know where they are, you know, the account numbers. all of that is in your possession. Yep, right, It's. it's everything that was only in his name, from work or wherever has been transferred to me. So the good news is it's already being invested in things.

You don't have to go and choose all of these from scratch. Is your question more? How do I handle this going forward? Do I need to change any of the investments? I don't know where to get started.

Okay. Well, I have, as I said, I have all different kinds, and you know, he was. he liked to Not put his eggs all in one basket, as it were. So we've had, we have, a bunch of little IRA accounts. What I want to do is Consolidate everything and a lot of the things that he did invest in in terms of His non IRA things, is just regular investment accounts.

Okay, are things that I was not happy with, and I know I want to change all of that, because he had a different philosophy than I do, and you know. Well, I think, at this stage of the game, you want. you want to manage all of the risks that you can. you do want? To be well diversified.

We don't want you investing in single stocks and unproven investments. Sticking to mutual funds and index funds is going to be your best bet. And so, when it comes to how to move forward, I work with a professional. It's the same reason I don't handle, you know, the electrician work around the house. I'm not capable, and even if I could watch some DIY videos, I'd probably screw it up and hurt myself.

And that's the case for most with investing, right? So we yeah, we call these people SmartVestor pros. through a SmartVestor pro program that we have at Ramsey, We can connect you with investing pros that can help you take that right next step and give you guidance when it comes to investing. and I've got one. Dave Ramsey has one.

and The key here is you want someone with a heart of a teacher, like you said. you're scared of getting ripped off. You don't want to walk in somewhere and you hand up a bunch of money and they go and it's gone. You know, what would you do with this money? You've worked so hard, you and your husband, to build this legacy and nest egg and I totally understand that you want to make sure you You're wise with it going forward.

well, I've spoken to a number of Financial advisors and they all pretty much say the same thing. where fiduciaries were going to invest in you, in diversified products that align to your risk, you know risk level and Surprisingly, not one of them has said just give me your money. I'll take care of it. And if we do, okay, fine, It's not. oh, well, Oddly, no one who said that to me.

Well, they all like to keep their jobs and not have the SEC bring down their necks. so it makes sense. But I've got a great blog. I'm gonna. I'm gonna make sure our team sends it to you and it's called questions to ask a financial advisor at your first meeting.

So make sure when we hang up, I'll make sure our team sends you that link. We can also put it in the show notes for today's show if all of you listeners out there want to check that out. But it's really that it's asking about their investing philosophy, asking them how they're gonna get paid? How will you measure and evaluate performance? those types of questions are the wise ones to ask in just vibing them out.

Do I want to work with this person? Is this someone I trust? is this someone that I get a good vibe with? and those are some great steps to take and you Can connect with a smart Vesta pro at Ramsey. solutions.

calm, here's started. Here's the. the one thing I think The reason I use the smart Vesta Pro, Besides the fact that they've been vetted, is it's an orientation to a problem. Most of the time when I call a plumber, I'm asking a plumber to tell me what's wrong and how much it's gonna cost them to fix it. When you go see a financial advisor out of a book, what you're doing is you're saying I want to invest and they're gonna say Well, what are your goals?

like a personal trainer, and you're gonna say I want five million dollars, or, in your case, I want to make sure I'm comfortable and have enabled to pay my bills for the rest of my life. great, When you sit down with a smart Vesta Pro, they are a teacher first. You won't leave that room, not knowing exactly what you're doing and why you're doing it and how it all works.

and That is different than just all you. just trust me. We'll put it in here. We'll take care of it for you. Oh, didn't work.

or it's different it is. I am gonna co-pilot this thing with you. I am an expert, but I am also a teacher. Here's what's funny about smart Vesta pros. I'm, I have a 20-year.

Nope, 30-year friendship with my smart Vesta Pro. We were friends ever before he ever got in this business and before I ever started letting him keep my money. After I hired him, I said he said hey, I'm gonna walk you through how this works, and I go. I honestly don't care. I trust you like, just make it work.

and he said That's not what I do. What I do is I will teach you. so either we don't work together. I was like, are you kidding me, dude? Like you're my friend for 30 years.

He goes either I teach you how this works, or we don't work together, and I was like, all right, Teach me how this works. And so that's their orientation, and I really appreciate that. you're gonna walk into that office not knowing up from down. You're gonna walk out an expert in your own situation, which I think is awesome. That's a great reminder.

You call the shots here. They don't choose it for you, They recommend, and then you get to decide, and it's all on you. So if someone's making, they're saying hey, just trust me. I'm gonna do it. No, you got to figure out exactly what they're doing, why, and you call the shot.

Thank you so much for the call, friend. So sorry for your loss. We'll connect you with that blog article.

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This is the Ramsey show, I'm George Camel, joined by dr John Deloney. if you want to talk about your life, your money, your relationships, your emotional well-being, your mental health, We are here for you this hour. The number to call is triple-a eight to five, five, two, two, five. Rachel is up next in Ohio. Rachel.

Welcome to the show. Hi, thank you for having me. Absolutely. How can we help today? So I am currently a stay-at-home mom.

I am looking to get back into the workforce, however, Right out of high school, I went right into the Air Force because I didn't know what I wanted to do, wasn't able to get my GI Bill because I Got injured, but I've been kind of going from job to job to job, trying to figure out what I want to do. The job that I really liked doing was being a bank teller. So I kind of want to get into that. However, I know that I have to have a good credit score Because they do a credit check in order to get a job. So I was wondering if, in that case.

Do you guys? Still say to close all your credit cards and how would you go about that needing a good credit score in order to get a job? Great question. Well, number one. I actually talked about this in my new book breaking free from broke and the whole section on credit scores.

because I've dug into this, Because this is a question we get a lot. people like to push back and go. I can't get rid of the credit cards. I got to keep my score because of jobs. They, they do a credit check.

But the caveat here is what they're looking for is a mismanagement of money. They're looking for a bad or low score. I have yet to see someone who says hey, They did the credit check and I had no score and I didn't get the job. What they're really looking for is someone to make sure that you don't have delinquencies, That you're a person of integrity when it comes to money. And so I would just talk to them and say hey, listen, You're gonna do the credit check.

You're welcome to do that. Here's what's probably gonna happen. It's gonna come up as indeterminable. Here's why I don't have any debt, and that's a principle I live by and I would love to work here and I think I'd be a great fit. I'm a person of integrity and character who just lives a debt-free lifestyle.

Have you tried that? I haven't tried that. No, but that's um, That sounds like a good solution. That's my guess. now Someone could prove me wrong out there where they go.

Nope, I didn't have a credit score and they said we can't give you the job because it's some sort of bureaucracy, Stupid policy, but in most cases what I found is the credit check just exists to see if you have a terrible score, Which you don't. Now I am currently on baby step two. So we are paying off the credit cards, Which will have the credit cards completely paid off by the end of January, and then head to the car. So you already have a credit score? Yeah, so this is not a problem.

This is a hypothetical. Yeah, it's just a bad credit score and I've had issues with. I've Lost a job opportunity because it was bad in the past, but we are working towards eliminating that completely through the baby step. Great Well, here's what will happen as you pay off your debt. The score is going to get better and then it will disappear After about six to twelve months with no open accounts, we're talking no credit card accounts open, nothing.

The credit score will become indeterminable. Okay, so you can also pull your credit report for free at annualcreditreport.com And that will show you all of the accounts you have open out there, because maybe one you forgot about anyway. Oh gosh, I didn't realize that was still open. I got to go close that, but yeah, This is a. you're gonna be okay.

And again to your point, the low credit score can't hurt you. the no score I found is not an issue. whether you're renting an apartment cars, you name it. They're looking for bad money management.

Okay, perfect, thank you so much. Yeah, I hope that helps, Rachel. Thank you so much. Let's move on to Landon in Jackson, Tennessee. What is going on with you, Landon?

How can we help today? Hey, what's up, guys? I appreciate y'all taking my call. Sure. How can John and I help?

so my wife and I are 26 and We are wanting to start doing small, small, small flips. And I'm just, you know, Basically, in my small town, you can get a small property for about 50 to 100 thousand bucks and flip it for 250, And so we're wanting to start doing small flips like that, but it honestly just kind of terrifies me. But basically, what I'm asking is what I guess, What is my net worth, need to be at in order to be safe in doing that? and also it, you know, make sense, Mmm, so you want to get into house flipping because you could 5x your money very easily in this town. Well, I mean not necessarily because I want to 5x my money.

I love real estate. I'm a realtor.

Career, and it's, you know, Something that I grew up watching my parents do, and I'm not a. I'm not a fan at all of the the current Tick-tock trend of finance refinance. buy it over and over and over, and so do you have the money to do these flips and cash? Debt-free, okay. How much, how much do you have right now, as far as my portfolio goes?

So how much do you have in cash?

In liquid cash about 300 grand. awesome way to go. What are you making from being a realtor every year? This year I did about 450 in commissions. Oh, my goodness.

You're crushing it, dude. And this is in Jackson. You're talking. This is small town about 45 minutes outside of Jackson, small town. That's not going to Jackson.

Yeah, I think I think you make sure you're investing in your, in your retirement, And you're holding off the appropriate Taxes. if you are 1099 doing this. Yeah, Or if you're under a broker, they'll send you to be fine. But I all that. yeah, dude, buy a house $50,000 and pay for the reno and cash.

It's gonna be 3x as more, as expensive as you think it's going to be, and probably take three times as long. yeah, and just as long as you and your wife have a good plan to Stay married after after the reno, then yeah, knock it out. I mean, I don't think there's a magic number. I think the number is don't get yourself in trouble. and If you're buying a $50,000 property and you're gonna put $50,000 into it and you have that in cash and you're gonna sell it for 250..

It's a look a great deal.

Do you have your primary home paid off? I do Wow. Yeah, that's amazing. What's your net worth? Just or about eight hundred fifty, seven, fifty to eight hundred.

Awesome. Yeah, this. if you're doing it with cash, which is rare these days because it's so countercultural as to everything You've seen on tik-tok you are doing it the right way with a whole lot less risk, and so the key is paying cash for the property, cash flowing all the renovations and Making sure on the front end that you're getting a deal. That's where you're making. your money is on the front end, On top of some on the back end, if you do it the right way.

But you know, make sure you're doing your due diligence of what this project is gonna take, because, like John said, you get into this Thing and you realize, oh my gosh, this is gonna be 50 grand more than I thought and the contractor dropped out. I got to find a new subcontractor for the project. all of that stuff is gonna add some stress and headaches. So just be prepared for that, but you told me you love it. You love this stuff.

So start small and go from there and learn along the way. sure, for sure. Okay, cool. Appreciate you. Yeah, proud of you, man, John.

that was not how I thought that call was gonna go. see, usually, judger I. I had some prejudice, and here's why most of the people that are younger that call into the show are Broke up to their eyeballs and they saw the tik-tok of the guy who's like dude, you don't even need your own money to get into real estate investing and buy my course and I'll show you how. and All of a sudden I call the show and go hey, I'm out two thousand dollars for this course and I made a terrible financial decision on this property. or they watch HGTV and they watch Chip Gaines run a saw and you're like I could do that.

if we're getting that, he's like a Artisanal craftsman, and my favorite is when they're like, I'll just do all the repairs myself. Exactly. That's a dangerous, dangerous scenario to be in. so do not recommend that at all. All right, John, that we got a lot going on in the Ramsey solutions comm store right now.

And one of those things that the $12 sale where you can get best-selling books, Total money, makeover, baby steps, millionaires, your book. own your past. change your future. Just 12 bucks and many of John's questions for humans, conversations cards are as low as 10 bucks right now And the Christmas edition is back. these sold out early last year.

So don't, don't be angry. I told you you're gonna miss out. So go check it all out. Ramsey solutions comm Store. while you're there, you're gonna see a whole bunch of new stuff as well.

That's really exciting. Rachel Cruz launched, launched her first ever illustrated kids book called I'm glad for what I have. our friend Jade Warshaw just dropped her new book. It's a quick read called money's, not a math problem. We're so excited about that launch.

And of course, I'd be remiss to not mention that I've got a book on pre-sale. My very first book called breaking free from broke is on pre-order right now in the Ramsey solutions store. You can get all of that at Ramsey solutions comm slash store. I've been loving someone. once someone sent me a message on.

they said I bought ten Total money makeover audio books because they're on sale and I'm gonna gift it to people in the Ramsey baby steps community to help them On the journey, that's cool. I was like, that's the kind of generosity we need around here. I like fantastic. so get the gift for everyone in your life And if you've lived these principles out, go, pay it forward. Ramsey solutions, comm slash store is the place to go.

We'll be right back.

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Welcome back to the Ramsey show. I'm George Campbell, joined it by dr. John Deloney. We want to help you, America, take the right next step with your money in your life. So if you've got a question, give us a call at triple, eight, eight, two, five, five, two, two, five and John, we found that most money questions usually intersect with some level of Relationships and mental health, and it just gets messy and intertwined real quick.

And so, as we dig in, I love that you're here to help people really unpack the other pieces, not just the numbers on paper. But how do I deal with that in-law that's pressuring me to go on the trip? And how do I deal with the brother? That's strange, but now wants the money because he feels like he deserves all of that gets intertwined. Yeah, there's always a relational aspect.

They're an emotional health aspect, money, scary, and especially nowadays when it's so expensive just to exist, right? It's just expensive to exist, and You either have people denying that. it's like just don't eat avocado toast, Which is in nonsense, and the other side of it is just elect the right person and all this goes away. It's like that's nonsense. And so there's an emotional Component to all of this.

right? Yeah, so yeah, If you got emotional relational stuff going on, give us a call to 888-825-5225. Well, John, let's get to our question of the day. brought to you by neighborly, your hub for home services with 19 service brands nationwide. Neighborly's provider network has trusted local service pros to handle multiple different services in and around your home.

visit neighborly.com Ramsey to find and schedule service today. Just just buzz in through this question real quick. It's fantastic. Feels like a common core math equation. It does.

today's question comes from Alex in Virginia. I'm just gonna tell you up front Alex, buy the car, Just buy the car. All right. Here's your question Would you recommend buying an electric vehicle like a Tesla just to take advantage of tax credits? Our gross household income for 2023 will be two hundred and thirty thousand dollars.

Our tax liability would be nine thousand. We will get two thousand as a child tax credit. that leaves us with a seven thousand dollar tax liability. This is the only year where I can take advantage of federal tax credits of seventy five hundred for eat, for electric vehicle purchase. I have no other debt but mortgage a hundred ninety thousand dollar balance.

I Already have a decent functioning car. I hate the fact that federal government is taking taxes from responsible folks like us and Giving it as a credit to people who will probably go in debt to buy overpriced EVs. here's a pro-tip, Alex get out of other people's heads and stop Making up stories about why other people are doing whatever it is they're doing, and, as I tell my seven-year-old daughter, you deal with you. if You want a new Tesla, you have the money and you've got cash. go buy it.

George drives one, Rachel Cruz drives one. I will drive one one day. I'll buy a truck first for all of us, but I'll get one. I've been in both Rachel's and George's. They're awesome, And I'm not gonna buy anywhere between forty and eighty thousand dollars, Depending on the model, on top of the seventy five hundred hard credit.

Just to show those people who I made up stories about. you see what I'm saying? You're just causing yourself a bunch of angst. if you want a Tesla, go to Tesla. You could also donate money that you might get back in a return.

you could just give it, be a person of generosity, or you could sit down with a tax professional and Work some of this stuff out. All I have to say is, no, I would not buy it, George, just for the tax credit What I recommend. someone buy in a car that they want if they can afford it. Absolutely well. And then the ending was funny, because he's wanted to stick it to the man, to the government, For giving the credits to those who get the overpriced EVs by buying an overpriced EV.

Yeah, he'll show that, I'll show him, and then you're gonna pay sales tax on that vehicle to the tune of the tax credit that You just got back, which then goes to the government. Anyways, okay. This is make the math math, John, It's not math, and we had to his point. He makes 230 K and he's got no debt with the mortgage. So the parameter around knowing if the car purchase is wise is number one.

Are you doing it for the right reason? are you doing it as a flex, or do you just want to enjoy the vehicle and you're paying for it with cash and The total amount of all of your vehicles? everything with motors and wheels doesn't add up to more than half of your annual income. So if all your cars are gonna add up to over a hundred fifteen thousand, Yes, it's a terrible financial decision for you right now, But I don't think that's gonna be the case. get the Tesla because you want the Tesla.

don't do it for the tax credits, Don't do it to stick it to the man. end of story. Ta-da. Can we move on, John? Can we move on?

Tax credits? man, they'll get you. pick the stepping over dollars to pick up nickels. That's what Americans are great. I'll show them.

All right. Elena is in San Diego. Elena. Welcome to the Ramsey show.

Hi, George, hey, John, can you hear me? Okay. Yes, how can we help? Well, thanks for having me I.

Started paying off that. my husband and I. we started a Ramsey where I'm babysit to about a year ago And We're posed with this question If we should sell our house to pay off the rest of our debt or most of it. so some history and historical information here, my mom has a rental property and She lives with us. her tenants are going to be leaving in the next three to four months.

and she said, why don't we move to my house and you guys can Pay less? you just cover the mortgage and it's significantly less, and then you can either rent your house or sell it. and so My husband wants to sell the house because he's done with my gazelle intensity And I'm wondering if we should just rent it or if we should just sell it and get on the other side of it. Yeah, a Lot of layers to this financial tiramisu. Let's break this down.

No, it's good. It's good. So there's a relational component, because that piece you just dropped a little bomb right there of my husband is done with my gazelle intensity and The other piece of this is it sounds like it's about to get real messy moving into mom's, but we don't actually own it, We're just paying her the mortgage amount we get to keep ours, and now we're landlords, but we still have the debt. And so this I don't know that it's just on paper. This is looking like a rose.

I would walk carefully either way, but how much debt do you guys have? So We've paid about 140.. We still have about 340. is that non mortgage debt? That's student loans?

340 in student loans. Good God, who's the surgeon? Anesthesiologist? But still did you go to private school? So I know I sat on interest with these low payments.

Ah, So that ballooned. it's probably more than you took out. Oh, Over $100,000 more in interest. Is this why your husband's done with this program?

So we've gotten into this and it's been a good year, but I mean I I can just keep going. but he's like He's ready to be done with that. What's your household income? So our household income is about 190 200,000.. Is that what both of you working?

That's what both of us. Okay. So what? what are you on track to pay off your debt by? right now?

I'm shooting for three years. Did you have a big year just because you had a couple of great cases, or is this? is this typical?

No, I sold everything. You sold your practice. I Sold. no, so I'm in-house. I don't have a practice.

I sold. we sold our car and we sold a bunch of furniture. We sold just all kinds of things. and then I do real estate on the side.

Okay, let's talk about the mortgage. what is your mortgage payment every month compared to your take-home pay?

Mortgage right now is about 2,800.. Okay, and what is your take-home pay? Take home pay a month is about 11,500.. Okay, so, the mortgage is not killing you guys. It's about 25%, which is great.

That's in our Parameters which tells me you've got, you know, not, of course, you have huge payments. What are your minimum payments every month right now?

So, Right now, based on you know, whatever income driven repayment type that they have, The minimum payment for all of the student loans is about 700. that's the problem. I would get out of this plan unless you guys are shoveling so much on top of it that you're actually Solving the interest problem. And so I wouldn't sell the house quite yet. I don't know that, mom.

and do all these numbers. in three years You'll be debt-free and you can make different decisions and do it at a place of peace instead of fear. So that would be my goal for you. Yeah, if you think he's frustrated with the baby steps, move in with his mom and pay her mortgage. They're gonna set your marriage on fire.

Don't do that. Thanks for the call, Elena. This is the Ramsey show.

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This is the Ramsey show. I'm George Campbell, joined by dr. John DeLone, it's your show, America. So give us a call at triple eight, eight, two, five, five, two, two, five. Lila joins us down the road in Nashville, Tennessee, up next, Lila.

What's going on? Hey, George. Hey, John. Happy holidays. Thank you so much for taking my call.

Oh my gosh, okay, so I'm 20. I recently discovered your show through a repost on tik-tok and I was immediately hooked. boom, I took the assessment on. yeah, I took the assessment on the Ramsey website and found out that I'm on step four. But my boyfriend and I are living paycheck to paycheck and just making things work, by the grace of God.

To cut a long story short. I Graduated high school with an associate's degree, debt-free, and I'm a dependent of a veteran. So I received benefits and I came to live in Nashville to go to school here, enrolled at Belmont, But with only three semesters left on, this calculation by the Veterans Association Suspended my benefits and I was forced to take a leave of absence from the school. So what? and that was paying for my housing.

So now I'm working full-time, making just under $16,000 a year to cover my basic needs, and I'm transferring to MTSU for in-state tuition And I'm planning on scholarships and the Pell Grant and paying the rest out of pocket to avoid student loans. I also have no credit history and no idea how or when I should start to do that. I'm worried about weathering the economic storm that the housing market is facing and I just need some Trustworthy advice on how I can set myself up for some success. given up my circumstances and our pets heads are falling off, It feels like it's all coming down. Lila.

You do it. Are you doing? Okay? You're a neighbor. Yeah, I'm just.

I was actually thinking about coming down, but I thought you know, maybe I'll give it a call and first try. All right, so I'm gonna give you some very, very, very specific.

Advice. but George is going to talk to you more a broader picture, And the only reason I could give this to you is because I've been on the inside, okay? When I was a dean of students at Belmont in particular, they had a program and I don't know if it's still there Where they took care of the other? Part of a veterans. whatever a veteran needed, they took care of it.

Right. Yeah, I had that, but the VA miscalculated my benefits and said, instead of the two years that I was supposed to be allotted, They said that I had only, I only had six months left and that I don't have any benefits less. Have you applied for a recalculation? have that yellow ribbon? Yeah, I did, but the process just takes so long.

and Glenn from VA, the VA office at Belmont, said that I should just kind of give up. really, Yeah, I've never heard that before. I trust the person. I don't know who's running it now, but I trust that person. I've just never heard that.

Yeah. Oh, no, she's wicked smart. She knows what she's talking about. That's why, Yeah, that does suck, because it's one of the best programs I've ever seen in the United States that they have at Belmont there. were They really grateful.

Yeah, I'm so grateful that I was able to come and have a whole year at Belmont, And the only reason I chose to come to Belmont was because I was so lucky that they have that yellow ribbon program. That's astounding. once my benefits were suspended. There was just nothing I could really do about it other than, you know, Find a cheaper education. All right, so we're gonna pick.

we're gonna. I'm gonna pass it over to George. I'm gonna take two things. one. I respectfully would challenge you to not give up.

I also respectfully challenge you to take a breath. You're gonna be alright if you're making, and I'm gonna say something that's gonna offend people. if you're making $16,000 in Nashville, Tennessee, you're making a choice to make $16,000. I took my daughter to breakfast the other day and at the McDonald's it was starting at $20 an hour. So if you make 16 grand, you woke up today and decided I'm only gonna make 16 grand, and unfortunately for you, I see the signs and I talk to people, because this is my town too, and this applies to everybody You might have to get uncomfortable.

You might have to get a couple of jobs for a six months while you figure out this VA stuff, and the VA doesn't have A great track record of always just dotting all their I's and crossing their T's, but I would not just bail on a world-class education that they're gonna take care of you the way Belmont takes care of their veterans and.

Just sit in my house to be like, ah, it's all coming down. It's not. it's a mess, but it's not all coming down Right. So one of the problems you're having right now. It's an income problem.

It doesn't sound like you have extravagant bills. You're living a super luxurious life. You don't have a bunch of debt payments. You told me you're debt-free, We're beans and rice and you have an emergency fund in place already. Yeah, and I've got.

I've got six months or more than six months worth of savings. Wonderful. Did you guys? you have, you have a I'll never go into debt again. fund is what that is.

That's debt insurance, Because you're not gonna have a repair that makes you here instilled in me as a child. Never go into debt. good. Well, that's good. At least that's a good kind of fear.

But there is a sort of scarcity Mindset right now of I don't know how we're gonna pay next month's bills. You're gonna be okay. Yeah, we need a path out with long-term, you know, income increasing. Let's talk about this boyfriend situation. Are you guys like splitting the bills?

How is this working? Yeah, so we live together in a two-bed two-bath with, or two-bed two-and-a-half bath with a roommate, And we split it three ways, 800 each Okay, and you don't have any finances combined, right.

No, okay. Good. Let's keep it separate.

We need to increase your income, because right now, Yeah, do you know your monthly expenses off the top of your head? what it takes to run your yeah, your life. Yeah, so I pay $900 in rent and utilities and then I've been Honestly scraping by with a little bit less than a hundred dollars a week and I'm not putting any money into my savings, Except I have this app called Albert that takes like a few dollars.

Those apps exist to take your money, not make you money. I know they, Investing apps, will take your spare change. In the year 3,000, you're gonna have a million dollars in that account. I'm ditching that. you need to be investing 15% of a solid income into a solid retirement plan.

That's gonna be your path to building wealth and getting out of the cycle. So you're a one. right now is to get a job that pays 15 bucks an hour, 20 bucks an hour, 25 bucks an hour. that would change your world, wouldn't it? to double your income now?

I work as a. right now. I work as a stagehand for IOTC, and when work is good, it's good, But we need something stable. It's the holidays. You need stable work, a lot of it.

Yeah, so I'm I'll get a retail job before doing seasonal work. where there might be work, there might not be, and so Hospitality is always bumping. They're always looking for solid people. You sound like a rock star. So I have full faith that you're gonna find a great job and make great money.

Yeah, but Lila, tell me if I'm wrong, George, She sounds like a rock star that is trying to play all the instruments on stage at the same time. You don't like it. one-man bands are rarely good. Yeah, they're all. yeah, the one-man bit like Like, like a little bit of you Like, like.

what are you doing over there? It's pretty good, right? So hey, um, are you gonna marry this guy? Yes, when? When?

well, the thing is, he's a VA dependent and he is going to school completely for free because both of his parents are. This is the longest answer for a date I've ever heard. Sorry. What's the date? Okay, if he loses his dependency status, Then, if we get married, he loses his education benefits.

So after he gets a degree and what were you studying? That sounds romantic, so.

I'm studying. I oh my god. Don't make fun of me I'm studying music, business and minoring in tourism and hospitality.

It's fine. I'm not mocking you at all, man. Do you have a career goal? Like? what do you want to do?

Now? what degree I want to? I have a very clear dream I want to bring sustainability to music festivals and stop wasting so much For events, and I want to have a green, just music festival. Okay, That's a very clear goal. So I would also, in the meantime, start to get connected with people who work on music festivals.

There's a lot of that going on in this town. I go get a job at the Ryman and at a Brooklyn Bowl and work all day making money and then work all into the night Working in the music industry around artists and sound guys and doorman and all those people Seven days a week. tell your boyfriend. You'll see him after you graduate, when y'all get married. Okay, but get after, but just get after.

like only make 16,000. You're a Nashville freak in Tennessee, one of the hottest economies on planet Earth. Don't choose to make 16 grand and don't give up on this VA stuff. call them and call them and call them. I just wouldn't walk away from Belmont right now.

Keep fighting, Lila. I'm gonna send you two great resources. One is our friend Ken Coleman's book, the proximity principle. The other is dr John Deloney's newest book, building a non-anxious life. I think both of those will be of service to you in the season that you find yourself in.

so hang on the line. Our friend Eve is gonna pick up. she's gonna make sure that we send you those two books. That puts this hour of the Ramsey show in the books, we'll be back before you know it.

Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I'm George Campbell, joined it by my good friend. Dr John Deloney, and we are here for you to give you some advice, some wisdom, whatever we can do. Remember, it's free, but we are here to help you win in all areas of your life.

The number to call is triple eight, eight, two, five, five, two, two, five. Cassandra kicks us off in Tucson, Arizona. Cassandra. What's going on? Hi, how are you?

We're doing? well, how can we help? so, My husband and I, we Started a rental car business through Tarot. Not sure if you're familiar with that or not. I'm very familiar, Yes, so I can almost guess where this is all going.

Yeah, so we financed and three vehicles that are now completely underwater and.

In Tucson, it's become pretty saturated. So we're not doing as well as we had started off doing, because we started off doing really great. Now it's since probably January. It started to kind of taper off and then the cars got into some accidents and then there was no income from this business. So now we're personally backing it when we have like no money to back it.

And so now it's racking up credit cards and my husband's second job that he has is having to fork out the money to pay for things, when in reality that money should be going towards the credit cards because he's.

When he contracts, work out, he has to put on a card and then gets reimbursed. So now we're not being able to reimburse what he put on the card, because now we have to pay car payments and insurance.

whoo before, before George.

Digs into the math here. I Just need to ask you, before we start talking. Are you willing to change your entire posture on this deal?

I Want out. okay, is that what you mean? Well, I want out. I know you want out, but the way you're talking about it is all of these things are happening to you.

Everything was perfect. and then all these things happen to us. and what both George and I and any of my colleagues here would say is when you leverage Your soul, when you leverage a business that you can't cover, You are at the whims of the cosmos as to what happens, And so I've never seen somebody Successfully victim their way out of a problem like this. I've only seen people say well, that was dumb. We did something that looked good on the back of a napkin at a Mexican food restaurant a good one, by the way, in Arizona and it didn't work.

and so We're gonna have to both get two jobs or three jobs, because we have three cars that we can't afford. we have five cars actually, and We're gonna have to figure this out, and we will never, ever, ever, ever, do this again. I've never seen somebody just be like well, Then this happened, and this should be going to this, and this is the only way out. is you have to change your posture, Which is we gambled, we put it all on red 17 and it landed on black 29. we lost it and now we got to pick up the pieces and go from here.

Does that make you get what I'm saying? No, right, I get it. I'm only telling you that because I love you, but there's just no way to slump your shoulders through this. Y'all are gonna have to say we did it and now it's time to come out swinging the other way.

Okay, you ready? Yeah, all right, lay it out for us. What is your current income if we take Turo away? Without Turo. It's about 94,000..

Okay, and what's the total debt load? It's about a hundred and ten thousand. How much of that is the cars? Uh?

29 on 129 thousand, on 138 on another and 20 on another. Okay, and do you know what all those are worth? Yeah, one's worth 19,000, one's worth 21,000 and one is worth Yeah, 19, 20,000 and 12,000.. Okay. Do you guys have any money, liquid cash?

I Emergency fund, okay.

And you guys have car loans on your own personal vehicles, no, those are paid off. We did our debt-free scream a few years back and now here we are again.

Free. alum, I know I am completely ashamed. Well, you're gonna get out of this and one day it'll be a funny story. you tell your kids, that's right. But right now there's a lot of pain and fear as to how we're gonna get out of this.

Yeah, the good news is you guys have a good income and without Turo, which I assume was taking up some time, Could you guys pick up more work, more jobs? He cannot. he's already tapped out. What is he doing? He's an executive chef and then he's also a contractor for a company And he travels quite frequently for that one.

Is that doing similar chef contracting or what? It's different? It's it's through, it's for like. he's working with chefs for the job, but so still in the same field, What are you doing? I'm an administrative assistant for him at his executive chef.

What do you make? Me? I make about 16,000. I think I'm confused. Why would you work for him when you can go make double or triple that elsewhere?

I have. we have three kids and No help. So I need that flexibility. Okay, so you're, you're staying at home with the kids while doing this administrative work for him part-time. Yeah, that makes more sense.

Okay, I was worried. I was like you need to find a job. Okay. Yeah, All right. So if we can clear a hundred grand here and we can pay off, you know, 5060 a year living off nothing, this becomes a solvable problem to just pay this all off.

The other way to approach it is can we find the difference, you know, go to the credit union and go hey, I need a difference for this loan so that I can get out from under this bad underwater car situation. Then you have a smaller amount of debt to pay off.

Okay, but you're not keeping these cars anyways, And so I like the idea of getting out as soon as you can from these underwater vehicles. But the only real way to do it is to come up with the difference, and you either need to do that through savings And cash, or you need to go get a small loan from the credit unions to cover it. Okay, or if he travels a lot, Maybe you sell one of your paid-off cars and he can uber to and from the airport. And I know your first thought is well, we can't do that. But here's the deal.

you're gonna have to either just make peace with, you're gonna be paying this off for four or five years, or Something has to be different, because the math is not going to change. Right, so somebody at your local church will watch your kids for a discounted rate, or you get a job at a local daycare center where they pay you 32 grand a year as a assistant administrator and your kids go for free, or None of this is what you want. But this is what is. this is just choosing reality here. or Y'all make peace with it, or you sell his car and you pay off the difference between two of these underwaters, and now you're down to just one of the cars and You see what I'm saying?

You begin to knock it out real quick. There is not a path forward without discomfort, and the question is which discomfort are you gonna choose the day-to-day discomfort of not doing much of anything for the next five years, or a Really uncomfortable right now, With the opportunity to get free in the next 12 to 18 months, And then we're gonna save up some money down the road and never do this again. Thanks so much for the call, Cassandra, sorry, you guys are going through this. this is the Ramsey show.

Welcome back to the Ramsey show. I'm George Campbell, joined by dr John Deloney, the number to call if you want to jump in with your question about money. mental health relationships. We are here for you at triple, eight, eight, two, five, five, two, two, five. Well, John, as I do, I got myself in a hot water on the internet Thanks to a video.

that are we posted on YouTube. shorts, You know, and Instagram reels and tick-tock, and all that in the video was simple. We get a lot of flack about telling people. Hey, go, get a used car, Avoid the car payment. There's used cars that aren't $30,000, because that's.

the big argument is, why would have I used, John, when I can just go get a new car for the same Price, if not cheaper than a used car? that hurts my brain. And so I did a video and I just pulled up, you know, the auto trader website went. Here's a used car $5,000 in my area. It's possible and The.

I want to play it for the viewers and for you and get your take on this. Do we have that video?

So I got a lot of flack on the Ramsey show for telling people that they should be buying used cars instead of new cars. And they say to me well, George, used cars are just as expensive as new cars And you can't find used cars under 15 $20,000. and then I just look at something called facts and data and go Nope, here's a car for $5,000, and I looked in my area, and there's a 2008 Honda Accord EXL for $4,999. now, is it the sexiest car known to man? No, but it's under 150,000 miles.

It's got leather, It's got all this the sunroof, all the features you a boy could want, and it's gonna get you from A to B without something called a car payment. There it is, John. I did not know that was gonna be that controversial. It reminded me of there's no jobs in this town. Yeah, not, unless you want to work 40 hours a week.

That's what it felt. So that one thing I got roasted for was saying under 150,000 miles, because it had a hundred and forty nine thousand 127 miles. the trunk that I drive, that's under 198,000 miles, John, that's a deathtrap. You're so brave. You're the Bear Grylls of our drivers.

You're so brave. Oh, so yeah, One guy at least was honest in the comments and said you are correct. This car will last well over 300,000 miles if service regularly. He who laughs last owns this car. So there you go.

That's part of it is people are going. if the car has over a hundred thousand miles, I have to throw it away and get a new one. John. It's like the iPhone came out. Mine's two years old.

It's trash time with I. I think there's some some, I'll say ancient merit to that. I think with the cars our parents drove, there was an understanding that once it crosses a hundred thousand miles, It's you need to start looking right? I don't think that's the case anymore. I Tried to get my Corolla to not live and it wouldn't not live.

You can't kill that. my old Tundra that I drive now back from a couple of centuries ago won't go. It's just gonna drive for eternity, right? So it comes down to you. set it in there.

Is it the sexiest car alive? No, and have we wrapped our heads around this as an identity? It's a madhouse. Well, when all of your friends are driving, you know Brand-new cars with leases on them and luxury vehicles and you roll up in the o8 Accord, It's not exactly turning heads, at least not for the right reasons. But you know what?

It's really nice. John, is you don't have a car payment weighing that car down. It just drives different, differently, when you don't owe $700 a month as a flex on your friends who honestly you need better friends if that's, if that's the environment you're in. But here's some stats that I. this is all from my new book breaking free from broke, John.

I did a whole chapter on car loans unpacking this, but I broke down the actual stats on this average Transaction price of a new car over 48 grand, used car almost 33 grand. now, Let me remind you, the average household income in America is $71,000, so most people have multiple cars with multiple loans on them. that is now outweighing their income, and They're wondering why they're broke. because they're sending $1,200 to Ford Motor Company every month to the lending office. Wondering well inflation, John.

It's just a real problem for me. And then they're wondering why they're anxious and stressed because Ford Motor Company owns Them with, by the way, a depreciating asset, a car that's worth less money. every day you drive it, Oh, yeah, and interest rates are at record highs. The average loan terms keep getting extended out. We're almost at 70 months now.

average payments are now over 700 bucks for new cars. and so that. and then here's the crazy stat consumers with monthly payments of a $1,000 or more is now at an all-time high of over 17%. one out of five people have a monthly payment on one car of over a thousand dollars, it's insane. and The other thing I got in the comments, John, where well, good luck buying a $5,000 car.

You're gonna need to put 5,000 into it and repairs tomorrow because that thing's gonna break down. I'm like, you know what your new car is the moment you drive it off the lot. It's a used car that's gonna have problems because you're driving it and you don't drive like Jeff Gordon. So the other piece of the equation that's interesting is insurance is more expensive on newer cars. who would have thunk it?

It's gonna cost more to replace the car. that cost 50,000 versus your $8,000 car. So you're gonna save money on insurance. you can afford the repairs when you cash flow the $5,000 car and then you don't have a payment to worry about. and Then you upgrade over time.

We're not saying drive the 2008. You know a cord with a bumper hanging off for the next five years or ten years. just upgrade as you have the cash.

also, I was coming out of my Back field the other day and I was laughing about something that my son was doing and I wasn't paying attention. And George and my truck that I love. I Just raked it down our fence just all the way down. Sounds like a you problem. It is very much a me problem.

It's not beautiful, but these repairs that everybody talks about, I'm, I'm not repairing an old truck. Nope, right? And so if I was a brand-new Lexus, you're right. I would take it to a dealer and have them look at it and repair it, and it'd be a million dollars. I'm not gonna repair it.

So even that argument, If it's a Honda Twitter, the engines not falling out, right? And in fact a number of cars now will last, And you choose to do things differently with your money. when it's your car, You don't have to get it fixed, because that's just what I have to do. I just don't get it fixed. And so is it beautiful?

Nope. Does it get me where I need to go every time? Yep, right, who cares? who cares? who cares?

Well, a lot of the decisions we make around cars are a reflection of who we're trying to be. It's more about the brand association than it is about utility. Hmm, and so that's become a problem, because now we're like well, my buddies all have the truck. so I got out do them with an even bigger truck, and That truck is a thousand dollar payment on it that you couldn't afford. and people with car loans often have other types of debt, too.

It's not just the car loan. They've got their student loans hanging around. They've got the credit card balance that's been hanging around. There's personal loans, medical debt, maybe on top of a mortgage. That's too big.

So all of this just compounds and adds more stress. and, as you've seen from this hour, John Car cars are underwater all over America right now. What they paid for it is now not. it's not what it's worth, and the loan is still 40k, But the car is only worth 25.. What do I do?

You just don't have that problem when you have it paid off. You want to get real. controversial hit me when I got my first job as a high school teacher I.

I Drove a car that didn't have an air-conditioner in Houston, so I had to wear an undershirt and Hang up my dress shirt that I wore aired out. No, I just hung it up in the backseat and when I got there I would then put it on that way, wouldn't get wrinkled. when I got there, Here's, I'm telling you was that ideal? those awful was awful, But it was mine, and I wasn't willing at the time To sell my soul for this idea. I can't do it.

I can't that word, I can't the phrase, I can't. it's not true. It's I won't. I won't do it. That's fine.

You're gonna go into debt and sell your soul, cuz you won't fine. But there are people all over the place figuring it out. figuring it out. You can, you can deal with it. Well, if you guys want to learn more about this, I have a whole chapter in my new book called breaking free from broke on car loans.

Unpack what I call Carmageddon John, which is the disaster and crisis we find ourselves in. I unpack how depreciation works on these cars. I Unpack the logic of if you just invested that car payment, you could be so wealthy it would blow your mind To where you're gonna go. I'm never having a car payment again. And then I also show people how to buy a car the right way, the tactical steps To go buy a car with cash, with peace, with confidence, because nobody wants to get screwed on a deal.

And so there's a right way to do it to do your research, to negotiate All the different ways you can buy a car in today's world. I walk you guys through that in this book And I hope it helps people avoid the trap of car loans and the myth that will always have a car payment. No, You won't not if you just get out of the cycle once and for all by paying cash for that car and upgrading Over time. so if you want to check out that book. It's on pre-sale right now at Ramsey solutions comm Store.

it's called breaking free from broke. This is the Ramsey show. We'll be right back.

Welcome back to the Ramsey show. I'm George Campbell and joined by dr. John Deloney. This is your show, America. So give us a call at triple 8, 8 to 5, 5 at 2 to 5, if we'd be happy to Attempt to give you the right next step in your money life, your relational life, your emotional life.

We are here for you. Shekhinah joins us up next in Portland, Oregon. Shekhinah. Welcome to the show.

Hi, hey, how you doing good? How are you? We're doing well, how can we help today? Um, so, I just was wondering if you guys could help me and my husband. We're just trying to Figure out how to stay in our budget and also save money, but also pay off that at the same time.

Anything else you want to do? No, that's it. Just pay off debt. save live, spend, Go on vacation. Okay, this is a pony and get a pony.

It's a common problem. Yes, Okay, So tell us about your, your financial state. is this the first time you guys have gotten on the same page with money? your first time budgeting. how new are you to all this?

I started budgeting probably like two months after we got married. I Got one of those like budget planners, where you have like the separated money and you went like super nerd on this. Yeah, that's fun, where's he? is he like, okay, you do that, that's fine, but I'm gonna do what I want with money.

No, actually, he doesn't really spend money. that much wonder. you married well the bills. Yes, he's a pretty awesome guy. I love him a lot.

So is the problem, as the great Taylor Swift asks you, I?

Honestly, don't know if it's not him. there's only one other person. Yeah, I well.

I Don't know. So what do you think is the problem right now? You said, how do I stay within my budget? tells me you're not staying within the budget. You're overspending, You're not living on less than you make.

Yeah, what do you attribute that to? Is it? do you have too many bills? Is it all the debt payments? What would help you get out of the cycle?

I think it might be the debt payments. and also I'm thinking, maybe either budget is too high or Um, well, the budget is not really nowhere, it's not aspirational, the budget is just reality. So what is your take-home pay every month? So my husband brings home 4720 before tax, but after tax it's about 35 to 3700 a month. Okay, and are you working outside the home?

No, I'm a stay-at-home mom. How many kids?

We have one and then we have another one due in March, Part a. well, now's the time to get your money, right? Yeah, got another line item in the budget coming. Okay, so we're trying to make this all work off thirty seven hundred dollars. thirty five hundred bucks.

Yeah, that's tight. Yeah, to live in. it could be a little more than that. We actually live in Woodland, Washington, okay, But he works in Rainier, Oregon. And so the Oregon taxes he has to pay those Ouchy.

so how much debt do you guys have total?

All together. It's about thirteen thousand six hundred and twenty. and what kind of debt is that? It's car loan. and then we just went two thousand dollars in debt because we were offered a house last minute And we needed something bigger, because what we were staying in was getting pretty tight.

Hold on, you had to. I'm confused here. What was the second? debt?

Is $2,000, and it was towards the deposit first and last month deposit for our new house. I would just make you're renting this house, Yes, what's the rent? 1,200, okay, So, you know, it's high compared to your take-home pay. It's not the thing that's crushing you guys, and it doesn't sound like a ton of debt comparatively to your income. So if you were able to throw, let's say, a thousand bucks a month at this debt, It would be gone in a less than a year, right?

a little over a thousand bucks. Yeah, Yes, are you able to do that right now, or do you need more margin?

So we're able I think that we'll be able to pay off that $2,000 by the end of January. Okay, that's what we're trying to do. And then we're just trying to figure out how to put towards more money toward our car debt. Because right now that monthly payment is 257. Okay, because we bought a used car from a dealership, so it was a higher price used car, but.

My husband has good credit, so we were able to get a lower finance payment. Okay. Well, we're gonna work the debt snowball. Do you guys have a thousand bucks in the bank right now? No, that's what we're struggling to get right now.

Okay, that needs to be your a1.. We're making minimum payments on the debts. We're not eating out. We're not doing anything except for getting that thousand bucks. and because you guys have a baby coming, I would pause debt payoff and just stack up as much cash as you can until baby and you were home safe.

Okay, so I'm actually it's. I know it sounds weird, But I'm telling you to pause the baby steps for a few months until we get through this. we call it stork mode And we get you and baby home. How much could you save up in the next four months? I Think in the next four months we could probably nothing but safe.

Yeah, we could probably save about three to four thousand. good, So that'll give you four grand that you'll have in there and we'll get to the debt. as soon as that's done And you guys are healthy and safe. We can use the 3,000 of the 4,000 and start attacking that debt. Okay, I think your problem right now is you're trying to do a lot at once.

you're pregnant, There's a lot of emotions going on and You guys are scared because you got another baby coming and life's already tough. And the key is the budgeting method that you use makes all the difference. So what are you using right now? a budget? So right now we have a budget for our food Rent, but how are you doing the budget?

every week or every month? on paper, we budget. Yeah, I will. I do it in my notes on my phone, but I budget for food, gas and Tithes for our church. Okay, We're gonna hook you up, John and I, with an app called every dollar to where you both you and your husband can log in and see this, have Visibility, and I'm even gonna give you the premium version for a year so that the transactions come through automatically connecting to your bank.

There's a paycheck planning tool so that you know, you've got all the bills covered before the month is over. If you're willing to use it, I'll give it to you. Yes, we will definitely use it. Awesome. I also think you're.

what does your husband do for a living? He is a CNC journeyman Machinist, okay.

Man. that sounds like a pretty compressed salary for that level of skill.

Yeah, he's looking. he actually me and him just talked last night and he's wanting to look into going into engineering. Would that require more schooling?

He said it were, and I told him it wouldn't be a good idea if He did, because he already has a degree in college. What's the degree in? and He has one in English, I believe I don't remember what his other degree is. and then I have my music degree and They're both going unused right now. Yeah, yeah, there's not a lot of English majors that become engineers.

But also, I'll say I went and got another degree because it was right for me and my family, and it has transformed The entire Deloney family tree. Okay, so, just because you already have a degree doesn't mean you need to go back and get education You need. you don't need new education. You often need to go get new education. You just have to be Intelligent about what you're doing and how you're doing it.

Okay, Yeah, and that means paying cash, not going into debt and having a goal in mind of what that career is on the other side. Yeah, and I told him I don't want I. I think it's funny that you guys are telling me this, because last night I was telling him like I think we should save as much as we can first Before we try to pay off our debt, because then we'll just keep going into more debt, it's true, but Something has to give. Either he has to work this job full-time and then go to a local Walmart and throw boxes until 3 in the morning. It to help you guys.

You can't have him home all the time. You can't have him not trying to get more education so he can further his career. you can't have him not doing this and not doing that and not doing this, or you you can't not go get a job and Put your kids and take. you can't have all these things. We're not gonna do and Then drown under this debt and be so sick to your stomach all the time because about this money issue.

so you either have to make some short-term sacrifices that'll be brutal and Will cause one or both of you to have very different lives So that you can be free on the back end, or you're just gonna choose misery Ongoing. it's gonna be tough, tough, tough, tough. Hang on the line. We're gonna give to you every dollar premium. Thanks for the call, Shekinah I.

Know you work hard for your money and the key to keeping more of it in your pocket is by making a plan for your Spending with a budget, and every dollar is the budgeting app that I use personally, Because it's perfect for looking every dollar you make in its little president face and telling it exactly where you want it to go, Just like you told that guy in traffic exactly where you wanted him to go. and even better, Every dollar walks you through the entire budgeting journey. So you always know your next right step. Download every dollar for free in the App Store or Google Play today.

Welcome back to the Ramsey show. I'm George Campbell, joined by dr. John Deloney. Hey, if you enjoy this show, do us a quick favor. It is free and it won't take you much time.

and that is if you like the show, consider hitting the subscribe button, the follow button, leaving a review, sharing it with your friend, Texting it to the family group chat and just let them know. Hey, I've been enjoying this show think you guys would enjoy it as well and Been loving seeing the, the Spotify rap. John Amazon Music has a name, just one, that one top podcast of the year, And so it's an honor. and now we don't. we don't take it lightly that you guys decide to spend so much of your time hanging out with us and being inspired by the callers and sometimes avoiding some of the mistakes they make.

we So appreciate that all of the many, many thousands of listeners out there. Appreciate you guys. Let's go to the phones. Tina joins us in Jacksonville, Florida. Tina.

What's going on? Hey, thank you for having me on the call. so we were just starting the program. my husband and I and I threw a very bad series of mistakes with car trade, car trade, car trade and now serious negative equity, and My husband. I talked about it and we are willing to do whatever it has to take to.

you know, we're gonna sell the car. We found a dealership that's willing to buy it, but we've got to cover the negative equity. So I tried to take out a signature loan through my credit union and we were declined. So now it's like what do I do? What's my next step?

Do I try to divvy it up amongst credit cards? Do I just bite the bullet and pay off this car? Do I try and take a home equity loan? Where do I? where do I go?

Well, any option that involves moving the debt to other debt. I Hate that. I have to tell you, this is not going to solve your problem. If think about it like this, you have a bullet wound in one in your foot. Shooting any other part of your body will not fix that bullet wound in your foot.

So you got it. so here's the. here's the options you have that don't involve debt. number one. is you guys save up the difference that you owe and then sell it so you can cover the full amount that's owed?

or You said you got declined at that credit union. have you tried others? did they tell you the reason? is it due to your credit score?

Credit score. Okay. So your credit score is shot because of. was there? delinquent payments?

No over utilization? Okay, with our house and all of our credit. We're about half a million in debt. Oh, my goodness, How much consumer debt do you guys area? I'm sorry.

How much consumer debt do you have outside of the mortgage? We have a hundred and twenty seven in credit card. 127 and credit cards. Yeah, 127,000 credit card. What did you put on these cards?

Stuff for the house, helping out our kids.

Vacations that we shouldn't have gone on. what's the interest rate on these?

The majority of them, you know, they vary between 12 and 18 percent.

What about this situation? I'm asking you this not to beat you up, but I really want to know where you're, where your psychology is. You're half a million dollars in debt. The fact that you're considering trying to clean up some of your debt issues with more debt, Like at what point? what does it stop for you?

Right because We want to retire in five years and we do it. It's not possible, right, if we don't change, and so I'm willing to you know, do whatever it takes. What's your household? I've been looking to a couple of the shows and you know David said take out a personal loan to pay off the equity, sell that car, get a beater car, you know, lower your debt, Total debt. So that's what I thought we could do, but it doesn't seem like, And I don't trust my own decisions clearly, because if I did I wouldn't be here.

So what is your household income?

Monthly, we bring, we bring in. monthly, we bring in about 13,000.. Okay, good, And what is your total minimum payments on all of the debt that you have, consumer debt?

Okay, are you able to put an extra thousand, two thousand, three thousand, four thousand on top of that to pay it off? That's what we were gonna do, starting with the smallest first. But considering I owe almost 80,000 on this car, We thought we could get out of. you know, get rid of it, and that would take a huge chunk out. How much upside down are you?

About 22,000, and are you sure of that? because you said the dealership said they'd buy it for this amount. Well, the dealerships gonna lowball you comparatively to a private party sale.

So I haven't tried. private party The car. the balance we owe is about 80,000 and when I go through Kelley blue book, it's between 55 and 60. it's a value and the car dealership is offering us 58 because it's a 2023 with really low miles on it.

Okay, well, we want to get as much for this car as we can to shrink that gap. Do you guys have any money in the bank?

Just $1,000, okay ending in your hotel, it sell. Yeah.

We've thought about that, you know, so we're just getting started and we can start, you know, like selling off. and What's the house worth? in my list of things that I could get rid of I'm talking tools, guitars, Motorcycles. you guys sound like you bought some stuff with those credit cards, jet skis, everything. No, Nothing tangible that's worth anything more than like household goods.

Well, I'm at the point now I'm willing to sell my wedding set if that would all get us out of debt. What is the house worth?

The house Is worth if we go by Zillow because I don't have the comps but we go by Zillow it's worth about 424. and what do you owe on the mortgage?

273. okay. And what was your total consumer debt load? I'd cut you off. What's the total of all the consumer debt combined?

Everything is Not including the house. 233 Okay, This might be the car and student loans and credit cards. This might be one of those situations where you make the ultimate sacrifice of selling the house. You'll clear about a hundred fifty, maybe a hundred thirty after Fees, and that gets you down to a hundred thousand in debt, But also can get you out of this 20,000 of that. you sell that car and that knocks off another 80 off the total.

And what happens then is you're gonna have to rent for a while. it may be a long time. How old are you? at least you can get out of this?

59. okay it.

When my mom went back to school, She got her tenure professor job at the age of 57.. She just retired in her mid-70s. That may that that's not me. That's 100% what you're looking at. Okay, You're gonna have to go find a job and y'all just gonna have to work and scratch and claw.

consider selling the house, Even if it's just. let's sprint and get this 20,000 bucks to get rid of this car. Let's just do that. Let's go ahead and list it private sale, just to see what happens to. I get there's something.

The fact that a dealership would offer you more than Kelly blue book doesn't, doesn't Register with me, but I don't know enough about the car or anything like that. It doesn't sound right, but maybe maybe.

And then you and your husband have to decide are we gonna get one, two or three or four jobs? Do we want this? No, I don't see a picture. We all retire in five years, I just don't. and so I think, the quicker you You can grieve that and say we wanted this to be the case, but it's not going to be.

let's shoot for 75 instead of 65. Then you're gonna. it's gonna give you a little gas in the tank And you're just gonna knock this thing out. fate like item by item by item. It will not be how you drew it up and you have to.

You have to commit to taking debt off the table. It can never be an option for you, ever, ever, ever.

I'm so sorry. I'm sorry. You gotta learn this lesson. this way, Tina, We're gonna send you a financial peace University. It sounds like you're new to our gang.

We're gonna send it to you. We're gonna send you, for a year, the premium version of every dollar. it's gonna help you and your husband get aligned to do something Y'all have never done before, which is make a budget and make money decisions together. That puts this hour of the Ramsey show in the books. I'm George camel, He's John Deloney, want to thank all the folks in the booth keeping the show afloat, and you, America.

Thank you so much for listening. We'll be back before you know it.

Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I'm George Campbell, joined by my good pal. Dr. John Deloney, and we are here to serve you, America.

Give us a call at triple, eight, eight, two, five, five, two, two, five, and we'll talk about your life and your money. Ashley is gonna kick us off in Denver this hour. Ashley. Welcome to the show. Thank you.

Absolutely. How can we help?

This question is mostly about my daughter and we're trying to figure out how to help her.

She's 20 years old and she lives in a different state than us, mostly just because it's pretty expensive here.

But she's really struggling. We're talking get up the wazoo and We're having some issues with some drugs, as well as Making some poor choices where we have been in jail.

First short periods of time and We just don't know what to do. We want to help her. I mean we. she calls me every week to talk, But I know giving her money financially is not a smart thing because it won't get used appropriately. Is she asking for money on these calls?

She's mentioned it and at this point she stopped asking because We don't have it to give her. We're still working through Ramsey's baby steps ourselves and I said, honey, we just we don't have that kind of money. and to, If you really look at your finances, you will find the money. it's just about how you budget. What is she doing right now?

She in school. Is she working?

She was in school for a year and she dropped out saying it wasn't for her, which is fine. Not everybody needs a four-year college degree. I I believe that wholeheartedly, But she's working on a farm now, and she loves it. Is she still actively using?

Yes,

Unfortunately, and I wish I could give you different news it it's any sort of life change or behavior change is going to. Relationship change will have to come on the back end of her choosing to not be using anymore.

Yeah, I know what she was using was legal in Colorado, But it's not really legal everywhere and she just doesn't want to give it up. Okay, and I think it's causing some.

Behaviors. Yeah. Well, yeah, of course. It's so. the only way I've seen people this be people have Effective relationships moving forward is that y'all meet somehow in person, whether she comes home to visit you for the holidays or you fly out there.

you drive out there and You take her out, and I say this all the time and people can roll their eyes. The reason I tell people to take somebody that they love when they have to have a difficult Conversation to breakfast is twofold. number one. It changes the environment. if you have a conversation in your house the same old house that you got in trouble it when you were a kid or what.

it just changes the dynamic, and there's a lot of literature about the Psychological shift when you're in a different environment, that's number one. Number two, if you wait till dinner, you get these marathon conversations that don't end till 10 or 11 or 12 at night. If you start at breakfast, the Sun is up. It's 8 in the morning, It's 9 in the morning, is 10 in the morning and we could talk for a while and it's still sunshine outside. It still feels like there's some optimism and hope.

okay, but I think you have the conversation and say Me and your dad have decided we can help in this way or that way. That might be. she can come live with you as she goes to rehab. She can.

Stay with she. she can keep working on this farm and y'all will support XY or Z if she wants to, whatever y'all decide.

But it only comes on the back of. she goes through some sort of treatment program or goes to meet with a group, and Then she gets to hold all of the relational cards. And so the way you phrase it is.

we don't work well without you being whole and well, and You get to choose whether you want to be whole or well and with us or not. it will break our heart if you choose something else, but you get to do that because you're an adult, and That way she can't say they kicked me out. They don't love me, They, they, I did this thing and they drew a line. now you chose it and I'm, I'm so heartbroken. We'll be right here when you get back.

We love you. Love you. Love you. Love you. Yeah, that's the only way I've ever seen that be successful.

and then you and your husband have to grieve and weep bitterly because One of the people you love more than anything on planet Earth is an adult, and adults have access to Poor decisions, and it's heartbreaking to see adults that we love making decisions that we know are destroying their lives.

Yeah, I know it looks like she may be going back to jail and we've talked about this like she'll lose everything. we've talked about going out there and getting a storage unit and helping her pack it up just because We're like, what do we do? Like we can't not sit, like we don't have control over that part, But talking with her and just saying we will pay for a storage unit for this many months, but after that It sounds like you are more, You're more stressed about this than she is. What is the conversations been like on her side? because it doesn't sound like she really wants to change her life at this point Anytime she's gotten in trouble.

she'll call me really upset. Um, what is in trouble knowing?

I Naturally gotten pulled with the cops. I mean with the cops financially. After she got out of jail, she called me and said I don't know what to do like and.

And, contrary to popular belief, or what your friends might tell you saying, the set telling her if you're sober, Come home right now. I'll come, get you. I'll get you a flight. You can't bring drugs into my house and you can't come into my house if you're not a sound body and mind.

But if you're sober, come home, that's okay.

Yeah, I don't think that's enabling. I think that's love and that's connection, okay, It's connection with boundaries, connection with accountability, and then she gets to make a choice.

Yeah, I know she decided to leave at one point because we said we weren't gonna allow the drugs in our house. I didn't care if they were legal or illegal on this date. Sure. It wasn't happening. And so she made a hard, difficult choice.

She did, and it's she. it's not gotten better. It's gotten worse. Yeah, everything has Um, and it breaks my heart as a parent myself. You can't change another adult, You know.

It does help powerless, and I mean we've talked about trying to help her get out of debt by saying you can live here For free. meals are free. Obviously like room and board. This is not a dead issue. This is not a dead issue.

You're trying to find a thing that you can fix for her, But none of this stuff improves until she's sober.

Yeah, And right now I don't think she's willing to be she. I've told her that she and she's tried to negotiate different things with us, so she can come home and I'm like And it always just feels wrong.

and As a parent, she won't understand this because she's not on the other side of it. But as a parent, the idea that I'd have to tell my kid no, you can't come home unless dot-dot-dot, They'll never know how hard that is. I Think you're doing the right thing. So sorry, you're going through this. Ashley did it for you.

we're gonna send you a copy of dr John Deloney's own your past. change your future, so you can heal and grieve and Navigate this wild journey that you're on. So sorry, you're going through it.

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

Yep. Just 10 minutes. You've got this. pick up financial peace, kids at Ramsey solutions comm slash store. That's Ramsey solutions comm slash store.

Welcome back to the Ramsey show. I'm George Campbell, joined by dr. John Deloney. John, we got a lot going on around here, And one of those things is the pre-sale for my new book breaking free from broke. Did you see the actual?

this is the real one, John. we got it the other day. It feels just everything you hoped and dreamed for with. well, number one. It's got you on the cover.

That's really all I care. That's what America needs right now. I'm usually healing, John. They only put my face on it. So you got your whole BODY on here, which is impressive.

I'm not gonna lie there further that you zoom out for my face, the better it looks. I want it as small as it could be on the cover. So I agree. the team did a great job with it. It's a breaking free from broke, the ultimate guide to more money and less stress.

And this is my story 10 years here at Ramsey, 10 years going from broke with 40,000 in debt to baby steps Millionaire, unpacking all the traps. if you've listened to borrowed future or the fine print, the podcast that I hosted, It has that kind of investigative feel, with tons of research, with tons of humor, and by the end You're gonna have the ick, you're gonna want to shower and you're gonna want to break free from this toxic Matrix that we've all found ourselves in. as you listen to the calls on the show, You know exactly what I'm talking about. we are stuck in this cycle of debt because we have fallen for a system designed to keep us broke, and I will show you a clear path to break free and Have more margin, more options, more joy than ever before, and it's on sale right now for 20 bucks at Ramsey solutions Store, and we'll throw in a hundred bucks in free bonus items like the e-book, audio book, a free talk on video, an Exclusive online event and so much more. So I appreciate everyone who's checked it out so far.

John, When does it occur? streets hits the streets? January 16th is the pub date, and so pre-order before then and you'll get all of those goodies. This is the book. I wish I had that.

you know, everything you wish you knew about money. This is money 201 301 101 and it's conversational, because I don't know how to write. So I wrote like a fifth grader. It's very easy to read and conversational. All right, let's get to the calls.

Cameron joins us in my hometown, Boston, Massachusetts. What's going on, Cameron? Hey guys, thanks for taking my call. Thank you for having the accent. I was hoping you would have.

I'm just gonna say that I just wanted to start off by saying thank you for motivating me. As of now, I'm through baby step one and Yesterday I have paid off five out of six thousand dollars of my credit card debt. way to go, man. Yeah, it feels great. what credit card is it read?

What's that? What credit card is it? It was a capital one. Oh Man, are you gonna miss it? Yeah, Nope, because I cut it up.

Amen, man, I'm proud of you. How can we help today? You're gonna have to use cash at your Harvard boss. That's under right. John just offended all people groups right there.

somehow I love that, love that. Um, so, the reason for my call today, guys, is I'm 26 and I'm still. I'm living at home. I moved back in to help me out with finances and stuff. I still have a good bit of debt and I have a savings account which Would help me pay off my truck a little bit, but I'm also keeping it around because it's Basically like six months of an emergency fund.

So, basically, where I'm at today is, I don't. I don't know if I want to sacrifice that to dig into my truck Or keep it around for a house, because I'm obviously really trying to save up for a house And I don't want to see that money just just go. But but you're seeing that money just go every month. you, when you make a payment on a depreciating asset, I understand Just whether you want it to go today or later, but it's going Okay, and this, yeah, I'm gonna give you some hard news, and that is Cameron's plan Has not been working and it will not work in the foreseeable future If you continue to carry this debt. use this money to buy a house, which then depletes the emergency fund while you still have debt.

You got to do things in a certain order with focus intensity, And that's the Ramsey baby steps, And it's the same one I followed to get out of $40,000 in debt in 18 months and buy a house the right way, with peace, and you're gonna get there. It may take, you know, a few years longer than you wanted it to, but right now that money spoken for because it's got, you Know Ford Motor Company's name on it, because you owe on this truck. So how much do you have in savings? So after paying the credit cards off, I have about $10,000 left in my emergency fund. Okay, and six months of expenses is up around 8,000.

So I have the $1,000 emergency fund and then I have that other saving out with 10,000. So you got 11 K to your name and what's left on your debt? You got a thousand bucks on credit card. What else? I owe?

32,000 on the truck. Oh, what do you? why? how much money do you make? Um, this year.

I'm gonna bring home about 65. Dude, that is a lot of truck. for a guy with your income, It is a lot of truck. What do you need? for?

So I got into the electrical union. So it was a little bit of an impulse buy. I'm not gonna lie. Can it be a impulse sell like this weekend?

I I know it would be tough to part ways with, but I guess I could Sacrifice. are there not more trucks out there? There are definitely more trucks. So could you downgrade and truck and do it with cash?

I Could, I could. what if what would that truck sell for? if you did, you know, got the most you could for it? So the dealer would probably lowball me at like 26,, but I could put it up on Facebook and probably get 30. Okay, And you have the money as a side.

Could you get a cheap truck right now to beat around in and then upgrade later? Yes, this gets you out of debt, completely right, or do you have more debt? No, that's it. Just the 32 on the truck, bro. You're free.

I would be free tomorrow instead of trying to arduously pay this thing off. It's gonna take you a while to have $32,000 and it's just gonna continue to be worth less and less and less and less, which is also gonna delay you from buying a House, which you told us is your dream? Yeah, absolutely So. do you want a house or do you want a sweet truck? That's going down in value every day.

I Really would like a house, and if you meet somebody and she goes outside and sees this truck, You're like, yeah, that's right. This is my truck, and right now you have to take her to your mom's house. Not that cool. So what if? yeah, you just bit the bullet sold the truck.

you're debt-free. worked really hard to get your own place, Mm-hmm, By the age of 30, you're a total. I mean your life is so transformed. You wouldn't even recognize it.

Yeah, that would be. that would be nice.

so if I Sell the truck and still, you know, if I only get 30,000 for it, It's obviously okay to dip into the savings and cover the difference. Yeah. Yeah, you're free man. That leaves you with a K and you need it. You need a car still, so you're gonna get something It'll get you around for.

maybe, you know, 7k, leaving you with a thousand bucks. But now look at where you're at. You got no debt. You have all your income to your name and now we can restock this emergency fund up to six months. Then we can start working on that home down payment and we'll get another 30, 40, 50 K over time, And we don't have debt weighing you down.

You're gonna get there faster. You get to be your own bank, dude. Yeah, that sounds great to me. Are you a good electrician?

No, I'm an apprentice, so.

But someone's paying you $65,000 a year to do this. Yeah, yeah, I'm still. I'm still working my way, but I'm getting better and better. every day. I'm learning That's pretty good.

to be terrible, your job. talk to you today. I'm not good at my job, but I get paid $65,000. You get the radio. I go.

No, not great. Not great. No, I am, I am good at my job. I just don't know everything. obviously, every day I learn stuff.

So it's good. That's good. Well, I say that to say this nobody's hiring you because your truck. They're hiring Cameron because they trust him to do the electrical work needed to be done, Absolutely. And so the truck is for Cameron to feel good about himself, And I want you to feel good about yourself, aside from a thing that you own.

Yeah, are you dating anybody, Cameron? I Am. I've been with my girlfriend for six years and we're mutually Working hard. to you know, save up for this house. Okay.

I want to challenge you. Okay, will you do a 90-day challenge? Sure, you can have a couple days off for Christmas. Here's my 90-day challenge. you get done with your apprentice work and you're exhausted.

you high-five your mom, you give your girlfriend a shout and Then you go deliver pizzas in that cold winter, or you go bartend, or you go work security. you go do something for 90 days on top of your apprentice job and In three months, you're gonna be so tired. You can't see straight and you will have completely transformed your financial life in.

Unfathomable, fathomable ways people underestimate how much they can radically change your life in three months. go for it, game on go.

That's Ramsey solutions.com slash course.

I'm George Campbell, joined by dr. John Deloney. This is the Ramsey show. It's a free call at triple-a 8 to 5, 5, 2 to 5. it is that time of the year, folks.

in a few weeks We are going to be doing a special giving edition of the Ramsey show and we want to hear stories from you About how you have given general generously this season. Maybe a tip, that waitress a hundred dollars. you bought Thanksgiving dinner for a family who couldn't afford it. Maybe you bless someone in need by giving them a car, Or maybe you've been on the receiving end of generosity and had your life changed by it. We want to hear from you.

We want to hear your stories. We want to inspire others with it. So here's what you need to do Go to Ramsey solutions.com Slash, ask and put giving in the subject line, and our team will be reaching out and sourcing some of the best stories and sharing Them on the show. We do this every year at Christmas. That's one of our most popular shows and it's happening on December 18th.

I'll be on with our good friend Dave Ramsey and we'll be sharing those stories. So start sending them in today and let's celebrate, living like no one else, so you can give like no one else. Ramsey solutions.com slash ask. Iris joins us in North Dakota. Iris.

Welcome to the show. Hi, thank you for taking my call. Absolutely. How can John and I help? Um, okay, so, Recently I had search on YouTube on how to get out of that, because I'm a little bit deep in.

One of the major ones is I owe to the IRS, and I was just wondering If it was smart or not to dip into my 401k to pay for that. hmm, Do you have any other debt? yes, um, credit card, personal loans and My car.

Okay, well, answer your question, and we'll do. that's the short answer, and the answer is no. do not pull from your 401k To pay off the IRS. How much do you owe them?

Ten grand, a little bit under ten grand. Okay, and Have you been in contact with them? Are you on some kind of payment plan? Where does it stand? Um, Recently I logged back into my IRS account and I started making payments.

As soon as I get like some cash, I would just put it in there and try to pay it off. But I read through some information that that would be like the first one to pay off. Correct a side of my other debt. Yeah, So you want to make minimum payments on all of your debts? But the IRS debt goes to the top of what we call the debt snowball.

So we usually say hey, list all your debts, smallest to largest. attack the little one with a vengeance. Once you knock that one out, move on to the next smallest debt. But IRS debt is different, because the IRS can royally screw up your life and they can garnish your wages, And so we put that at the very top of the list. That is your a1 is to get rid of this debt.

You do nothing else. You don't save, you don't invest, you don't buy things. you pay off the IRS. So how quickly could you do that? if you got really intense and just focused on that.

Well, that's been my plan, because I recently found you guys and I did started to do the snowball and the baby steps. um, I did. I just recently did a baby step, number one, and I Saved $1,000. and in the meantime I have been paying little by little because I have two jobs. like I've worked non-stop and I get cash tips.

So any cash that I get, I deposit it and then pay the IRS.

So what's your income here? Well, it depends, because you know, as a server, it varies. But last year I made 70,000. awesome. I did serving.

I work in school and I do like Brideshare on the weekend. So if you went all out, you're working non-stop. all of these jobs. How quickly could you pay off the 10k while making minimum payments and just covering your basic bills food, shelter, utility, transportation? Could you do this in four months?

five months, I Believe I can. my friends think that I'm going crazy. I've been reading like the Ramsey Books and Rachel Cruz and I've been. I put a lot of stuff on sale and people are questioning my sanity.

I'm fine. I'm just trying to like, come up with the money and get out of this hole that I'm in Before I can, you know, continue with my savings and paying everything off. Hey Iris, you know, who's crazy. You're broke friends.

Your friends are Some of my stuff and she's like, are you okay, like your house, like you, bored so hard for it? I'm like, but you don't understand my situation because everything that I have most of it is on credit cards. Yes, Welcome to the gang Iris, Or the cult, as some call us welcome. This is a great. You know, you are.

you're free. You're heading straight to freedom.

Yes, I feel, I feel so calm, but same time. I just feel like I need to keep going and going and going.

So don't do not dip into my 401k, can I give you a great quote that will inspire you, Iris? Yeah, of course. It's the first quote of my new book breaking free from broke. This is how it opens. It's a CS Lewis quote when the whole world is running toward a cliff, He who is running in the opposite direction appears to have lost his mind.

That's you. you're going against the grain. You're going against what culture is doing, against what your broke friends are doing, And it looks like you've lost your mind, But instead you were running away from the cliff instead of towards it. So we are so proud of you. You're doing all the right things, but we've got to aggressively get this IRS debt out of off our back.

What's the rest of your debt? What's the total?

the total.

48, 6, 6, 3, and that includes my car payment or my car and a personal loan. What's the car worth and what do you owe on it? I? owe 13 on it and.

I think I bought it for 23.. Okay. Well, we'll keep the car. I was seeing if that was the the ankle biter we could get rid of, but it's not that much of your world. I would just aggressively pay it off in the debt snowball and I think you're gonna be out of debt.

I mean you got a total of 10k, plus the 48. you got 58 K in debt, you make 70.

That's how much I made last year, and this year I haven't done much of the right chair, But I've been picking up on the weekends, because that's when it gets the busiest. What do you want to do? What do you want to do for a long term?

I'm not sure yet. I had future plans, because I had plan on getting my husband here from another country, and I did, but things didn't work out. So that let me. but that left me in a little bit of debt and I counted on his. where is he like, on his income?

He's here now, but I'm not counting on his support financially, And that's that's one thing that I had in mind. But because he was gonna help me pay off like what, like one of the personal debts was that I I took it alone To get him here, you know, he is here, but We're separated now, so now I'm left with that and.

And I just need to get out of this by myself.

Sorry to hear that, Iris, that that definitely throws a wrench in your plans. Yeah, it's okay. I mean I've always been alone. So I know I can do this, but I know I've been really financially irresponsible and, honestly, I've never sat down and thought about all the debt that can accumulate Within the years and the interest and all the payments. like whenever I sat down and I wrote all these down in paper, That's when I am like, oh my god, where is all my money going?

Yeah, your money's making other people rich. Yes, that's the best reality. I had to cancel on my trips and I I was supposed to go on a trip for Christmas and I had to cancel that and, very worried, I had another Trip to go to Mexico for a campaign and I had to cancel that. and I'm just. I just have to say no to a lot of things, but I know that in the future, it's gonna be worth it, because I'm gonna be free and all All my hard work is gonna pay off.

Absolutely awesome. We were gonna give you some resources, Iris. Number one is every dollar premium and that's gonna help you. you said, hey, I put this on paper. I'm gonna help you put it digitally so you can carry it around in the palm of your hand on your phone to make a Plan, and I'm also gonna give you a copy of our friend Ken Coleman's book from paycheck to purpose, Which is gonna help you figure out what that next step is for your career journey, Because I think that's what you need.

You need something stable that you can dig into for the next 20, 30, 40 years that you love to do, that You get paid well to do as you build. Well, so get her the get clear assessment to boom. We're hooking you up, Iris. use it. Call us back, Let us know if we can help in any other way, and we'll celebrate your debt-free scream when you get there.

This is the Ramsey show.

This is the Ramsey show. our scripture of the day comes from Proverbs 16 24. Gracious words are a honeycomb, sweet to the soul and healing to the bones. Mark Twain once said never argue with stupid people. They will drag you down to their level and then beat you with experience.

One of my favorite quotes, John, it reminds me every time I jump into the YouTube comment section I go. this was a mistake. Should have listened to Twain on that one. I Think we'd all be a little better off if we listen to. Twain Agreed in life.

He was the original tweeter. I mean the man just spoke in tweets, but it's one of those reminders that, like we're not doing anything new, we're finding bigger ways to blow holes in the ship and sink it faster, but Human nature is human nature. Yeah, and that was before he had social media. He would have been a bad, dark time for Twain to be around today. No way.

He would have. he would have beat the cancellation. Let's get to the calls. I need some hope, John. Let's see if Cooper can provide that in Olympia, Washington.

Cooper, what is going on? Hey, how's it going? I appreciate you taking the call. Absolutely. What's going on with you?

Oh, I just got a little, hopefully a simple question. You can answer. so I'm 21 years old and I'm trying to figure out if I'm currently right running out of house. I'm trying to figure out if now is a good time to start looking at purchasing my own home or It'd be better to increase my savings, and whether I invest the stuff I have now to maybe further my down payment. I'm kind of a little bit lost because I got a new job.

And so I'm looking for what's the next step? Okay, give us a little bit of your financial picture. Do you have any debt? I'm debt-free. I I've got roughly like 25,000 in my savings account, that I've got 31,000 in a CD loan that I'll be pulling out in January.

And is that is 25?? Is that your emergency fund? Nope, that's, that's savings. That's everything I've got in the bank. Okay.

So do you have a separate emergency fund? I Do not have a separate emergency fund. Okay, let's call that your emergency fund. Is that about six months of expenses for you?

No, that's, it's 25,000 and I spend roughly.

Let's see three grand a month. so so much more. so 18,000, okay. So let's call 20 your emergency fund and we're not going to touch that. That's not going to be part of this home buying process.

So outside of 20 you have the the other five plus the 31 Yep, and then I. I have 12, 12,000 inside of a Roth, a van, a Vanguard Roth IRA That I started two years ago, but now that with my new job I have the option to use a Roth as my deferred comp and so I've just been putting all my money into that rather than my Vanguard Roth, and I didn't know if that was something that I should Pull out and use for that, because I'm not so sure certain how much 12 grand over, You know a long period of time is going to help out. I mean it would turn into a whole lot if you left it alone. I definitely would not unplug the growth and tap into that. I know there are some people say, hey, you can dip into your Roth and take out the contributions without penalty.

I wouldn't do that in your shoes. You're a young guy. You got plenty of time for compound growth to do its thing. I would use future income and current savings for this home purchase and you'll get there. What's your income?

Yeah, so it works a little different. so right now I make him like roughly 89,000, but I Have a step pace. over the next five years. I get a pretty significant increase and by roughly year five I'm on year one right now. Okay, year five, roughly, will be probably 115, awesome.

So we're gonna call it 90. for now, How much can you save making 90 with no debt if you just focus on saving up for that down payment? How much could you save in a year?

I'm bringing home roughly about 2,000 into my savings each month. So 24,000.. Okay, that's before overtime. I could bump that numbers up with overtime, for sure. Awesome.

So if we take your 36, we add 24 over the next year. that brings you to a total of 60 grand you have for a down payment.

Yeah, so what is your home? Well, the parameter that will help you with this, to figure out the math on it, is You want to have the mortgage payment be no more than a quarter of your after-tax income on a 15-year fixed? And you can use our mortgage calculator on our website to start crunching the numbers and what that does. it helps you figure out What kind of home budget should I be looking for and what kind of down payment do I need to accomplish that goal?

I see, okay. And then you know, as far as over this next, You know the year that I'm going to be going to be working, saving up for that down payment. You know, what? What should I be doing with my money? Because you know, I'm renting right now.

And so that that's a Little annoying, just because I know I'm basically burning money. And then I, I know that having my money just in a savings account is losing and losing valuable. They're like, oh Cooper, my money right now is in a savings account. Is it? and you know how much sleep I lose?

zero, it's in a high-yield savings account, you know, who else is George.

Okay, you gotta Unbelieve this narrative that renting is talk to. you're burning money. renting shows patience. It shows responsibility as you get your financial house in order, Because you know it's really burning money when you can't afford the mortgage, because it's 60% of your take-home pay, because you bid off more than you can Chew before you're ready. and now those are the calls we get on this show and the air conditioner goes out or the hot water Heater goes out, or whatever.

So I will tell you what I did as to how I got a huge down payment saved and how we paid off our house Early, we put the money in a high-yield savings account and I'll tell you, at the time It was a 2% interest rate on savings accounts and my wife and I were freaking out. We were like we are making money hand over fist with this, and now it's four or five percent, And so you can make some decent money. just holding money in a savings account. Don't invest it, Don't put it in a CD locking your money away with penalties If you take it out early, Just put it in a high-yield savings account and be patient and sign the lease for another year as you continue to rent and save up more money.

Okay, ideally I want you to put 20% down. I think, for a young guy making really good money who's debt-free, You should be able to put 20% down. avoid that PMI, private mortgage insurance and keep that payment to no more than a quarter of Your take-home pay. Hey Cooper. Are you the first guy in your gang to make this kind of money?

All right. Yeah. Yeah, I am. Okay. What about your family?

I would say my parents are. They definitely didn't start where I was at. Okay, you know, they're the retirement age now, And so maybe the last two years they were okay, getting roughly what I am now. So let's, let's round up and say you're making a hundred grand. There's this perception of, with people who don't have a hundred grand, that all of their problems would be solved with a hundred grand.

and If they had a hundred grand, they could buy any car they wanted, any house they wanted. and what are you doing? You make a hundred grand. you're renting. You're gonna drive a used truck.

You idiot. You make a hundred grand.

If you want to be a millionaire, you gotta slow down And you have to change. you have to not take money advice from broke people or For people who don't know what they're talking about on the Internet. If you will rent for 12 months And you will dump all this money after you pay your debts off into a high yield savings account and just be patient. This is just the slow pain of getting in shape. It's every day.

You're gonna wake up in a year and you will have transformed your entire family Financial picture.

Okay, go listen to anybody me. slow and boring dude. slow and boring. are you investing right now as well? Yeah, so How much?

what percentage?

So initially I was, so I started working in high school and I was that's what I was putting all my money into that Vanguard Roth. and then, You know, from high school to essentially this last February, where I got this new job, I just basically didn't you know work in 80 hours a week, trying to boost my savings count as much as I can, And so I was putting all my money into that Vanguard Roth. But now that I've got my new job, I'm just putting in $700 into my 457 B. Okay. I say that because it could.

if you're really Jones in to get a house, You can pause investing for a short time so that you have an extra 700 bucks to put towards the savings goal. Yeah, if that's gonna be a short period of time I'm talking a year to time. How long is that? Yeah, no longer than a year or two. if it's gonna be longer than two years to get this house, I would continue investing and you can split the difference.

Maybe you do 200 bucks or 300 bucks, But if you're really Jones in for a house, which I would caution to have patience and do it when you're ready, That's an option to speed this process up, because you're already working your tail off man, you're crushing it. I'm proud of you. You're doing the right things. Just don't get distracted and be the tortoise, Not the hare, that puts this hour of the Ramsey show in the books. my thanks to dr John Deloney, all the folks in the booth keeping the lights on and the audio going, and you, America.

Thanks for listening. We'll be back before you know it.

Hey folks, Dave Ramsey, here, you know budgeting doesn't have to be boring. You just need a budgeting app That's made with you in mind, and that's every dollar. the every dollar app has helped millions of people work the baby steps and take the stress out of planning and Managing their money. start budgeting with every dollar for free. right now.

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