Break the Paycheck-to-Paycheck Cycle

What's going on, Donovan?

So if you decide that it does return on investment, what would it look like for you to pay your way, and what does it actually cost?

But...

Honestly, if I was in your situation and I had a wife, I had a kid, I had a dream out there, for you, it is to go to grad school. For some people it's to start their own business. You can fill in the blank on what that is. To me, you have to take care of the necessary things financially and start on, we always say, the firm financial foundation, where, financially, you are not in a shaky place. But when you have debt, Donovan, you're in a shaky place.

You owe someone something. If something were to happen, you have to pay this debt back. But when you don't owe anyone anything, there is a level of freedom there. There's less stress. There's options.

You don't feel this urgency, that, oh, my gosh, I have to do this, this, and this, and that starts to limit your options just mentally. So, if I were you, I would work really hard. I would be working nights. I would work some weekends. I'd have your wife pick up an extra, I mean, I would do whatever you could to get rid of this $56,000, which is going to take a lot, but you don't have rent, there's some expenses you don't have, but it may take a year or two to do that, and then I would save up some money on the side to be saving for, to be able to cash flow grad school.

Because what's going to happen, Donovan, I'm telling you, you're just 26,, okay, or 24, and I know it feels like I know what I want to do, I need to keep pressing forward in this, but when you just have some patience and you wait, even if it's three years, okay, and I know that's not, that is not fun, but you get to be 27-year-old Donovan, and you're either saying, get me this degree, I know this is exactly what I want to do, I have the money for it, I'm not putting myself in a bad place financially to do it, we're doing it wise, in a wise way, and I start this path, and I make 30 grand more, the raise, it all happens, and it's great. Or 27-year-old Donovan wakes up and he's like, golly, things are shifting, we have another baby on the way, we actually want to move, back home, like, you know what I mean, like, things start happening in life that may cause you to make different decisions. And so, if I were you, I think the safest, wisest route is to slow down, get this debt paid off, and then save up and go through grad school.

Put that, I mean, you're almost there, does that make sense? Like, you can literally do that with any of these side hustles.

that starts whispering to you, and I really don't want that.

John Deloney, they did that. They lived in the dorms. Yes. And he went through school, and all, I mean, that's what they did. And so I would look at some other options that could fast forward this plan too for you, Donovan, but slow and steady, it's always the way to go.

So, to be able to take that money and quickly, you know, put it towards a debt snowball. Come on, somebody. Love it. Donovan, you're making the right move. This is The Ramsey Show.

This is The Ramsey Show. My name today is Jade Warshaw, joined by Rachel Cruz. The phone lines are open, so give us a call. The number is 888-825-5225..

She's in New York, New York. What's going on in your world, Caitlin?

great to be talking to you. I have an interesting question. I'm looking for guidance in how to approach, moving to the next step. with someone I'm in a relationship with, and they're maybe not on the same page with me financially. We're very happy, but I'm sensing that there's a lot of guilt and embarrassment around their finances.

What he has divulged is not the best news, and so, you know, I'm personally not where I would like to be financially, but I'm very actively working towards my goals. My question is, you know, what advice do you have in approaching him in the right way, but also, like, still getting the information that I need to know, which is, like, can he change his habits? Does he actually want to?

And, you know, I would love to move to the next step and move in with him. or, you know, move our lives forward in that way. And I have personally, you know, a lot of debt and student loans. And so I wanted to be upfront with him with, like, what my situation is and what I'm working towards. But I didn't get the same amount of information from him.

So I figured it maybe wasn't good. And after some, you know, follow-up conversations, that is correct. So what he has shared is, like, his income. He has, he's taken out a loan on his 401k. Okay.

That was one thing that was, like, a bit concerning to me. Sure. And then, you know, in terms of.

So it's almost like you being very forthcoming with what you've done. And I did this. And here's what my plan is going forward. And I'd probably start asking questions around his philosophy with money and with debt. And you can kind of open that with, like, listen, I don't have to tell you, you know, I have this debt and I've just kind of, I think I'm done with debt.

Like, I don't think I'm going to borrow money anymore. I've started listening to, you know, I don't know how much you guys share as far as what you're into and podcasts and things like that. But I think it'd be hard to be dating someone that you've been with for three years, and they don't kind of have a bead on what you're, you know, what your interests are, whether it be hobbies or finance or whatever. So it seems like it could be pretty organic to bring up the conversation of, hey, you know that podcast I've been listening to? I'm really, like, starting to get into it and maybe asking him more generalized money philosophy questions first, as opposed to what do you plan on doing with this 401k loan kind of thing?

Does that make sense?

Like, they've never even heard of another way how to live. And so there is something to be said about. once they have some information, kind of what Jade's saying, then be able to say, okay, so what does this look like now? Because the truth is, I'm like, I mean, Caitlin, I would still be in a relationship with somebody if they had student loan debt. But the key is that they want out and they don't want debt to be part of their life.

It's a value system thing. Do you know what I'm saying? So, like, to me, it's, you know, Winston, like, when we were dating, he, like, had a credit card and his philosophy was like, oh, I'm going to use all the rent and all the utilities on the credit card. And then, and I'm like, well, I can't, like, I literally can't.

And I know we were young and you're probably way more set in your ways, Caitlin, and so is your boyfriend. But the point is, it is a value system conversation. at that point. What do we value? And out of your value system is where money becomes a tool.

Because money is just a tool. It's just a tool to live your life. And you want to be able to live your life in a pretty similar way. or you're going to continue to or you will butt heads if you guys continue a relationship and open up the store. So, yeah, for me, that would be my my number one.

And I think the empathy route, like what Jade is saying, is so true, because you're not perfect. Caitlin, I'm not perfect. Jade's not perfect. None of us are. But I think the key is like, hey, you know, and maybe he is probably feeling a lot of guilt and shame.

And the truth is, Caitlin, he's probably not happy with where he is financially.

to become free and talk about your. why? Caitlin, why do you want to be debt free? Is debt, you know, are you losing sleep at night? Is it stressful?

Do you have to stay in a job you hate because of it? Like? it's those kind of conversations to have. It's not just like what Jade said, the 401k loan. You know, there's so much under that, too.

Maybe some relationships. you can have that one conversation and it's like, all right, we, we, it's settled. But I mean, I can tell you what Sam and I, these conversations were months and like, depending on the level of guilt that's there, or shame. These are conversations that you're just looking for a little bit of forward movement with each, with each conversation. Like, hey, he seemed a little bit more open this time.

or hey, he seemed like he divulged a little bit more this time. when I brought it up. He didn't go, you know, like you're looking for that little, those little steps forward that you're like, OK, their mind is open and I can see that he's trying his best. But if you're seeing no forward movement, if it truly doesn't look like like look, he's not interested. I bring this up and every time it's like, you know, OK, you know, but does that make sense?

It may not be something that you get done in two date night dinners. You know what I'm saying?

it's a value conversation where I just want to make sure I ask the right questions and we have the right conversations to like make sure we're on the same page. Like we do look at money the same way. And, you know, if we were to move forward with making financial decisions together, like, do we have the right tools to kind of explore, like what, what our thoughts are together?

he has all this stuff. And I don't, even though I do this for a living. He is way more of that nerd. So also, hear me say he there may be a sense of him that is just naturally a free spirit. And that is who he is, too.

Like, I don't want everyone to think that everyone has to be obsessed with money and can't wait to talk about 401ks all the time. And it's so exciting about the new tax code, like that may not be exciting to everyone. And that's OK, too. So I think it's. it's the bigger value system that together in a relationship, we are moving in the same direction with our lives.

And you could plug in, you know, family, you could plug in spirituality, you can plug in all this stuff. And it's just a healthy, balanced relationship. And money is a piece of that.

But I still find myself wishing my life was like other people's. And, based on the data, I know this is happening to you, too. Comparison is wired into us. But comparison can also become the thief of joy, because we can feel like we're not enough and begin acting and thinking in ways we would never think otherwise. When all gets to be too much, think about contacting BetterHelp.

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Like, there's all these tough conversations to have. And when do you know when you're dating somebody, when you get to that point, that's like, okay, this is, I've hit my point, right? Like, we talked to somebody who was in a relationship for three years, and it's like, okay, maybe now's the time to start looking at this, talking about this. But it's hard to know, especially if you might see a little bit of progress, and you're like, yes, this is progress. Maybe we're going on the right direction.

But what would you say, Rachel, is, let's call out some red flags of if you see this, this might be pump the brakes.

I'm good. And you're like, you don't want to grow or stretch or, like, hear something different. Like, to me in life right now, that feels so prideful. Yes. So, with money, and we get this call a lot with people that, as we're talking about non-negotiables.

So I guess there's a little bit on the other side of this. But this idea that, you know, we talk, and they're like, well, you know, he just tells me, like, he didn't want to talk about it. He's not going to talk about it. Or she won't even enter the discussion. I'm like, that's exhausting.

Like, that's exhausting. So you can have your non-negotiables, but be humble about it.

Mm-hmm. Right?

Yeah.

Mm-hmm. Like, maybe they've been very open about their money up until this point. And you're like, yes, everything's going good. But then when you start thinking about, okay, when we get married, how is this going to work? Because my thoughts are that we would combine our money and kind of have our goals together.

And if they're saying, oh, really? Because I've worked really hard for my savings. And. Yep. That, for me, is a red flag.

Yeah. So these are, you know, these are tough conversations, but I would urge people to start having them early. If there's one thing that I can say that I kind of feel like I learned in my marriage is we didn't talk about that dating. Like. Yes.

Our dating time was very fun and not a lot of like. I mean, we talked about heavy stuff, but somehow the financial stuff just wasn't really in there. And then, after the fact, it was like, oh, wait a minute. Luckily, there were certain things that we just naturally aligned on. Thank goodness.

Yeah. But yeah, have those conversations.

And they view that as you're not supporting my dream, or you're not, you know what I'm saying? Like, you. don't believe in me. You don't believe this is going to work and we'll be able to pay it off. That right there, that's a very tough conversation to have.

Yes. Don't get me wrong. I still stand my ground because I feel like I'm not like, can we do it over time? Is there a way to not leverage debt?

Hello.

There's these seven baby steps that you can take that build on each other to ultimately get you to this place of financial peace, right? And so the advice that I'm going to give you is based on that. So the first thing that we want to kind of create this secure platform for you is you just need $1,000 saved, right? So if you can just out of that $20,000 raise, or out of your bank account or whatever you have of money now, if you can just set $1,000 aside, and just, okay, I've got that there. And then the second baby step is, yeah, you pay off your debt, because when you pay off debt, you're eliminating that risk.

You're eliminating that financial uncertainty that's in your life. and that's usually the point of stress that people feel is, oh, my gosh, I've got to make these payments or these debt collectors are calling me or my payment is due, right? That's usually the source of stress that people feel when it relates to their money. So in your case, I would say if you've got this extra money, congratulations. Let's put it to whatever baby step you're on, so that you can keep going in the right direction to get to that ultimate financial piece.

And it sounds like in your case, you would be on baby step two, where you are paying off the debt.

And then with the $20,000 will come, so that'll be about $80,000?.

But yeah, listen, I'm proud of you. I think that you're doing all the right things. You've got good instincts and good intuitions. Yes, you're doing great. Taking great care of your family.

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You probably have questions. And, Rachel, we are here to answer those. We have a live stream coming up, guys, January 11th. That's a Thursday night, okay? It's at 7 p.m.

It's completely free.

It's actually called Break the Cycle live stream.

We're going to talk a lot about navigating money anxiety, bad money habits that keep you stuck, some practical tips on what to do to start this new year off. So I hope you join us.

So for something big, a big expense like college, I would want you to go through it completely and just know, hey, I have money. I'm able to cash flow this. And then, when you graduate and you get a job, I would build up an emergency fund of 36 months of expenses, and then I would look to invest. And when you're investing, you want to do 15% of your income into retirement. And so that's, you know, for your 401K at work, for the job you'll get when you graduate, to your Roth IRA, open that up.

So, yeah, I would honestly not advise you to invest right now just because college is such a big expense. I want to make sure you get through it debt-free.

Like, we've never done that. But we own our own business, and we're the only two employees. And for the past few years, we decided we should tie the 10% off of our gross income from our business, and we've definitely done that at the expense of putting money into savings, which I'm so... I love giving. I think it's important.

Sure. But the last few years, after COVID, we lost some clients.

You know, we're making way less than our usual income, and so basically, now we're looking at our budget for 2024, and we really want to live the way that God wants us to live. And, I mean, we've always tithed, like I said, but we're wondering, like, would it be wrong to tithe 10% on our personal income rather than our business income?

First off, you're giving.

and Sam. You know, when we first started our business, we were the only employees, and I will be honest, like, for us, at this stage in our life, we wanted to give the extra, and we gave 10% of the gross of our business. And, I mean, you can't outgive God, and so we saw the fruit from that, but as we continued on and things changed, we were like, okay, like, we now give 10% of our gross payroll, like, what we take of the business, like, what we take home, just like anybody else would, right? Like, if you work for Walgreens, you get your check, and you tithe off of what you receive and the gross amount of what you receive. typically, and I don't even want to get, like, Rachel, too funky, fresh on the gross or the net.

It's like, just give.

It's not this tit-for-tat, gross or net, business. Like, that's not why God wants us to give. It's not that legalistic. It's not that granular. It is the position and the posture of our hearts, and that's what he's looking for.

because he knows when we give, that selflessness starts to occur, and you have a richer life. I'm not talking about money. I'm talking about you have a richer relationship with your spouse because, as you're giving, you're becoming selfless, and you become more of that in your marriage as a parent, as a friend, as an employee. I mean, like, it affects you as an entire human being, when giving is a part of a habit of your life. So that's my philosophy of why God has called us to that, and it's a beautiful thing, and it's something that, regardless if you are, you know, a person that is spiritual, or, in the evangelical, you know, Christian, space or not, giving, regardless of where you land spiritually, we always encourage, because that will do that, whether you believe in a God or not.

So for Kat, I really appreciate your diligence and, you know, wanting to do the right thing, like you said, but I think you are doing the right thing. I think it's the posture of your heart, so I would not get bent out of shape, and I do think, Kat, you will feel something from the Holy Spirit that may say, tithe on your business, and be obedient to that, but he also may say, you're okay, and what we teach is tithing on the income you bring in, like what Jade is saying. So that's where we always advise people. Give on your income, but he may, you know...

I really do.

I mean, come on now. Guys, this has been such a great hour. Thanks for your calls. We'll be here next hour. Give us a call.

This is the Ramsey Show.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships. I'm your host, Jade Warshaw, joined by your other host, Rachel Cruz. We'll be taking your calls all hours, so give us a call. The number is 888-825-5225.. We'll talk about whatever it is that's on your mind, especially in this new year.

I'm sure you've got so much that you're trying to accomplish. This is the season of setting goals, right? And I'm sure so many of you have money goals, financial goals. You're trying to save money. You're trying to get out of debt.

You're trying to start the new habit of budgeting. And if that's you, we've got the perfect encouragement for you, because we're about to get into the time, Rachel, that people already start moonwalking, right? Y'all are already moonwalking, and I'm like, wait a minute. It's only the 5th. So you need some encouragement, and we've got that for you.

January 11th. Write this down. Like George Strait said, January 11th. This is Thursday, all right? 7 p.m.

We're doing a free livestream event, and it's actually live. It's not prerecorded, like some of these folks are doing. It's actually live, and we're going to be giving you the tools you need to break the cycle, and y'all know what I'm talking about. There's been a debt cycle. There's been a paycheck-to- paycheck cycle, and you're ready to get free, and you're like, Jade, Rachel, how do we do this?

We're here to help. It's free, guys. You can register at ramsysolutions.com slash, break the cycle, and when you register, you can enter to win a $1,000 giveaway. We're giving that giveaway away to 10 different winners, so be sure to do that. That's the break the cycle livestream, January 11th at 7 p.m.

Be there or be square, as they say. Let's go to Atlanta, where we have Paige on the phone line. What's going on, Paige?

My question is, so. I have the EveryDollar app and the Baby Steps app on my phone, and so I'm on step number two, the debt snowball, and my situation is kind of unique in that I'm only 26 years old, and my mom is disabled and my dependent now. She got really sick a couple years ago, and we finally kind of got out of the craziness of the last couple years into, like, a zone where I feel very fortunate to be now, where her health is better. She lives with me and not in a facility, which that was a lot of money, and, you know, she's not doing hospital trips and things like that anymore, fortunately, hopefully, fingers crossed, but with that, you know, she has debt. I have debt.

So my plan, I'm trying to tackle kind of both of our debts, and I manage both of our finances. I mean, we live together. We basically share finances and manage medical everything, basically.

So, you know, I put all the debts into the Baby Steps app where and put, like, the money that we can put on a monthly basis towards the debt, and we can pay a little currently because she's got some insurance policies as well as her retirement. right now, for the next two and a half years. We can put, like, $2,600 to $3,000 a month towards our debt, which kind of totals like $90,000, and that's a combination of her credit card debt, her medical debt, my credit card debt, my student loans, and my car.

So...

But I am curious because you are two separate people, and so I do want to know, out of the $90,000 of debt, what's yours and what's hers?

And I have, like, $7,000 or $8,000 in credit cards.

And then, as far as I know, my mom has $30,000 in credit cards, $18,000 on one card, about $7,000, another, about, you know, $7,700 on another. We fortunately have had one card, like, I don't know what the proper word is, but, like, pardon us or whatever, and just alleviate it.

Or what do you make per year?

I'm a little bit inclined for you to have two separate snowballs here. And for your mom to have her money, and you put your mom's money at her debt, and you put your money on your debt. And you're just the one stewarding all of it and making it all happen. Yes. But I don't want you combining them and combining the money, because you are two separate people, with your names on two separate sets of bills.

And at the end of the day, even though you've combined your lives in many ways, you're still two separate people and you're not married.

I have to do this. That changes your behavior, Paige. And that's what we're all about here is your behavior has to change. And by you doing the work and paying off that debt, that's going to cause the behavior change. So I want you guys to be cutting up these credit cards.

I want you to be selling the car. You guys really have to clean this up. You're in a dire situation of, like, there's a lot of mess here. But you can get it cleaned up. You really, really can.

But you have to change the way you've been viewing it. And so, Paige, you're doing an amazing job, taking care of your mom. Absolutely incredible. But your money habits and where this has led has gotten you guys in that spot. So that has to change.

That has to change today. Cut up the cards.

You're listening to the Ramsey Show. I'm Jade Warshaw, your host, joined by Rachel Cruz. And we are taking your calls all hour long. The number is 888-825-5225.. Give us a call, and we'll chop it up with you.

You know, we're always looking at what's going on in finance, what's going on on social media, what's going on in the news, and what the trends are, because this is what people are talking about. And we want to be talking about what y'all are talking about and what's important to you guys. And so I saw initially an article come across my email that was talking about this. And then there's TikToks. And it kind of started popping off a little bit.

So I was like, we need to talk about this. And it's essentially, Rachel, this idea that if you make $74,000 a year, Gen Z doesn't think that that's middle class. Like, they don't think, they don't agree with that. And so I don't want to say much more. I want you guys to watch this and decide for yourself.

And then we will discuss.

First of all, $74,000 is much higher than the average income. Most Gen Z-ers are probably making anywhere from $40 to $50, maybe $60.. But let's use $74,000.. The take home after taxes, 401k, and health insurance is $4,300.. The average college monthly payment on a loan is about $500..

You're down to $3,800.. Let's say this person is financially responsible, decides to split a two-bedroom apartment in a medium-sized city like Orlando, so that their payment is $1,200 a piece, $200 for utilities, so $1,400.. Now, unless they're going to have Lucky Charms and Peanut Butter and Jelly, their groceries are going to cost about $600. if they're trying to get chicken, beef, and some healthy stuff. You have a $400 car payment, $200 insurance, $150 for gas, $100 for a cell phone, leaves you with $950..

This is no savings, investment, no emergency fund. Let's give them at least $300 to go on a couple dates or to hang out with their friends for the month so they can enjoy life a little bit. They're left with only $650, a bachelor's degree, 74k salary. You are splitting a two-bedroom apartment with a friend and only have $650 left a month. It would take you years to save up the $30,000 that you would need for a down payment on a house with the closing cost, but even if you could get that down payment saved, you would still need to make $120,000 a year to be considered for a $400,000 loan.

The middle class, the goalpost, has been moved from 70k to $120,000 in just the past two years.

Can I be 100% real talk?

That's $900.. $600 for groceries for a single person. I think you can do it at $500.. So that's an extra $100 that you take out. So there's an extra $1,000..

So that's really $1,600 extra.

Yeah. I think, I think we're okay.

You're even looking at, maybe, what friends and family members have. Like so many people, they come out of their parents' house and you've been living in this environment where there's nicer cars. The home is larger. And you immediately kind of feel like, oh yeah, I'm supposed to have that too. And I'm like, listen, these things take time.

It took time for our parents to get where they are, if that's what you're comparing it to. Yeah.

But the problem I have with it is, honestly, it's kind of his attitude of like, oh, Mark. Versus saying, well, I have $650.. What can I do now to better my life with that? You know what I mean? There's an attitude shift as well of how you view this.

You can view it like Eeyore, or you can view it like. this is an opportunity. So what am I going to do? What am I going to do different? How am I going to pay off debt so I can free up an extra $1,000 a month?

Yes. What's my opportunity here to do? What if I invested $300 of the $350 every month from 22? to run those numbers like, find the opportunity in it.

It's just. this is the way it is. There's nothing that's going to change. You're looking at the wrong piece of the puzzle. You've got to look at.

I was listening to somebody today that was saying that healthy people, whether it's in a relationship or just you as yourself, you always look at something and go, OK, what am I contributing to this? Like, if there is a problem, it's very easy to point out there and say it's because of that, that, that, that and that. But when you're healthy and have this area of maturity, you're always looking at and going, what can I own in this situation? Yep. And if you're finding yourself, even if it's not a $74,000 budget that we're looking at, if you're looking at your own finances and you just find yourself feeling trapped, blaming your job, blaming the fact that you have student loans, blaming your spouse, you have to stop for a moment and go, OK, wait a minute.

What am I contributing to the situation? Because here's the guarantee. If there is something that you're complaining about in life, I don't care what it is. at this point, I'm beyond money. If there's something that you're complaining about, I guarantee, I bet your bottom dollar there's.

there's something that you are doing, that's contributing, even if it's slightly, that you can tweak to make your situation better. And if you start to turn the dial up on that and start focusing on that, that's going to point to another thing that you can change. And you start focusing on that and that points to another thing. So it really goes back to that idea of whatever you're looking for, that's what you find. So if you're looking for problems, all you find is problems.

If you look for solutions, you're going to start to see, even if it's so small, like Rachel, you just went through all of this, like, OK, like, what would happen if you paid off your car? What would happen if you paid off your student loan? What would happen? And start asking yourself those questions. What can you contribute?

Listen, it's a whole different equation at that point.

Yeah. And you start to see a glimpse and you start to expect what you see. You become numb to it. almost. Yes.

And it's like, oh, this is normal. And if I don't have that, I'm not normal. I was talking to my mother-in-law at Christmas and she was like, oh, my God, you know, she just made a comment how all they did with their little kids at the time, they just all played in the driveway and all the cul-de-sac would get together in chairs. Now I'm like, there's memberships to things, like. there's all this stuff.

that's normal. But I'm like, that wasn't,

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You should talk to the TikTok guy that we were talking to. I can't convince my wife to increase it. Is it part of your budgeting system to increase the amount in the Envelopes as the cost of things goes up? Please help. Oh, Ryan, yes.

Tell your wife to put some more money in those Envelopes. If y'all have it, which I'm assuming you do, it's been 15 years. Yes. I mean, what we say is, once you're out of debt, you have the ability now, with your income, to do more with the three things you can always do with money. Be giving more, be saving more, and you can be spending more.

So increasing your lifestyle. I would do it by percentage points. So you guys, yeah, I mean, up everything by 10%, 15% for a little bit, right? And just feel that. Now, I also will say we were just talking about our personal line items in the break, because the TikTok video we just talked about in the last segment.

And I have not increased some of ours dramatically. We've increased our out-to-eats, our groceries, some with everything kind of going on and adding more kids. But ours is not dramatically.

different. It really isn't. Like I look at. I spend more on clothes. Again, by small percentages.

And so I think that's what you want to work in.

I got to raise this item. And so I do remember doing that. I think, if it's when it's gradual, like I think what she's trying to avoid here is lifestyle creep.

And that's a good conversation to have, because when you start earning more and you're like, okay, I'm doing better. I'm out of debt. Like, I've done all the things. Sometimes there is still that guilt that you face of, can I really spend this? Like, can I really do this for myself?

And I'm going to go with as long as you're taking care of business, the answer is yes. Sure.

So increasing it. But increasing the other areas too. Be increasing your giving and your saving. But doing all three with extra money is really important. So, yep, Brian.

Yeah. Probably more. after 15 years up it a little bit.

be willing to, like, your spouse can be into something that you're not into and they want to spend some money on something that you would never spend money on. Sure. And it's like, I feel like that's when it gets a little difficult. It's like, hey, we're making this money now. I'm really into this.

And, you know, my husband would be like, why would you ever? Like, do you know what I'm saying? Like, I remember being on here with Dave and we were talking about wine or something. And he was like, a $300 bottle of wine. I'm like, I would never.

Like, I spend $9.99 on wine, Dave. Like, I could. He was like, oh, go, get yourself a bottle. Well, I was like, I can't. I, like, I physically can't do it.

Like, there's certain stuff that I just. Yes. I can't do it, Captain.

And we're kind of at a crossroads on a few things. And we have 17 rental properties that we have acquired. They're all paid for.

This is what we're at a crossroads, because we were envisioning this. when we retire, you know, all of our rental income, which is over 200 a year, would just keep us afloat and not have to dip into what we've built over the years. Now I'm noticing that the rental income is just not growing like it should. And so we're trying to decide if we should sell the properties, which are probably worth around 3.2 to 3.5 million in total, and just put the money, you know, away and earn the interest off of it. because, you know, just in property taxes alone, like I just wrote a check for almost $50,000 just recently for property taxes on some of the property.

And so I'm just trying to make you know, and if one, if an air condition goes out or, you know, I mean, things just add up, and it's like that account doesn't build like I think it should build.

every year than what we would be actually bringing in.

So my question to you would be if it's less hassle, less work, and you're going to get a bigger return somewhere else, then, yeah, I would probably highly consider that. Or if you say, no, real estate is my endgame, it is my business. in a sense, it's my investment, because I want a percentage of what I, you know, I've bought this, this is the rental. I mean, the rent, basically is your income, it's what you're making, and your income has to stay at market value, and if that's how you run it, then I think we're having a different conversation. But it doesn't sound like you necessarily want to run it like that.

And for some people, they love the diversity, they love getting a property, getting a good price at the front end, and they're doing... I mean, it is part in their blood. That would be Dave. If he was sitting here, he loves it. But if it's a hassle for you, yeah, and if it's a hassle for you, and you don't love it, you don't need to be in it, in my opinion.

There may be a level, though, Kennedy, that you keep, maybe five of these or something, just for the diversification aspect. So I think having real estate as part of your overall, especially where you guys are financially, would be smart. So maybe you sell half of them, cut the expenses in half, pick your half that you love, keep those for a few more years. And then, if you look up, Kennedy, and you're still miserable managing these...

It only takes 10 minutes a day. Yep, just 10 minutes. You've got this. Pick up Financial Peace Kids at RamseySolutions.com slash store. That's RamseySolutions.com slash store.

Obviously, it helps us on our end, because it helps us in algorithms. A couple of weeks ago, Rachel, we were number one in podcasting on Spotify, which that list is always changing. In my heart, we're still number one.

Let's take it to the phone lines. We got Victoria in Austin, Texas. What's going on, Victoria?

I think you're thinking the right way. Number one, you're out of school. You're graduated. Do you plan on going back to school, or is this it? Like, are you going into your career now?

I mean, $13,000 in student loans. So my first things first, I'd be like, all right, I'm going to commit to walking the baby steps. And so I'm going to, you know, keep $1,000 set aside, and then the rest that you have, the $14,000, I'd pay off your student loan immediately coming out of school. That'd be my first order of business, and that leaves you with $2,000.. And then I'd just start saving up.

You know, I'd be like, all right, once you're, you know, stable, does that make sense? Because you're going to graduate. You're probably, I don't know if you already have a place. Are you living on your own? Are you living on campus?

You've got three to six months of expenses, and you've got money in order to get a place for yourself. And I don't mean buy a place. I mean, like, rent a place. But, you know, you have that margin in your life. How does that sound?

And so if you are just proactive with your income, and you budget every month, you know where your money's going, you avoid debt like the plague. You just say, you just draw a hard line in the sand and say, Victoria, just as a person, doesn't go into debt. I don't go into debt. And you can avoid paying interest, and you can avoid being owned by the banks, and your income is completely free. You invest early.

Invest and save up for a good down payment on a home later, maybe two, three years down the road. And you do that wisely, and you're investing early, and you do all of these things. Over time, Victoria, you're going to be great. You're going to do just fine. But I think your attitude towards money, it has to be proactive.

You have to own the fact that you have to be the one in control. And you learn this early, Victoria, and I still feel like I learn it even in my mid-30s. It's kind of this like reality swoosh that happens for me where I'm like, oh, it's up to me.

No one's making my annual doctor visit. I have to take care of myself. And now I have kids, and I have to take care of them. And no one's advocating for them. I have to be the one to speak.

So it's this idea that you really are in charge of your life, and that removes a lot of victim mentality. I think that removes a lot of expecting someone else to take care of you and to fix stuff for you. When you just kind of own it, Victoria, from the front end, that's going to do a lot. It really is. It's going to do a lot for your money.

So there's a lot of tactical things. Yeah, and if you stay on the line, Victoria, Austin will pick up. And I would love to give you one of my books, Know Yourself, Know Your Money, which plays out the baby steps within it, but also understanding why you handle money, the way you do. And you already have tendencies around money, Victoria. You already have habits around money that you may not even realize.

But understanding your why, why you handle money, the way you do, when you can learn that early on, you can create great money habits for the future, kind of what we're talking about on this call. So I appreciate you calling in because, man, it's so big. And all you, Gen Zers, out there, there's a lot of them that have been listening and finding us on TikTok and all the places.

It works in so many ways.

And there is part of that where your mind kind of goes to sleep.

on having it front of mind. Does that make sense? And there is part of that, that going through life, there has been seasons where I've been like, you want to know what? This might sound stupid, but there's been seasons where you're giving, you can automate it. And it's like, all right, I can set it and forget it, and it's not part of my day to day.

And it's like, oh, before you look up, it's like, I've been giving the same amount for two years, right? But then there's those moments where it's like, you know what? I'm going to take that off automation and I'm going to be actively part of this each month to where I know, okay, how am I feeling? What is my involvement in this? Even like paying bills.

There's certain bills that I'm like, you know, I don't want to like, back in the day, there was like, I don't want to automate that. Like, I want to see, I want to feel the money going out. I want to know and I want it to register in my brain that I just made a payment. Like, there's something to that.

Jacob in San Francisco, what's going on in your world?

No, it just paid off. Reach into your savings and pay it off.

So, yes, pay it off, be done with it, and be grateful, my gosh, that you have the money to do that, Jacob. That's amazing, that you're diligent and incredible. So just, yep, set it, forget it, and then go and invest and make money that way.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build well, do work that they love, and create actual, amazing relationships. I am your host, Jade Warshaw. I am joined by author and host of the Rachel Cruze Show, Rachel Cruze. We will be taking your calls all hour, so give us a call. Phone lines are open.

The number is 888-825-5225.. We'll talk about your life, your money, relationships and money, kids and money, whatever it is that is on your mind, we would like to talk about that with you and hopefully help you with that. So let's go straight to the phone lines where we have. Hunter in Philadelphia, Pennsylvania. What's going on?

Like, I just feel like there's a lot of factors in a seven-year window, and for that reason, I wouldn't rent the entire time. Yeah.

Love it. Because I really do think, you know, when you look over the scope of time with real estate, it's going to go up, right? I know there's been downtimes. I know all the things, but over the scope of at least five to seven years, you're going to see a return on that. Absolutely.

And then you can use that as equity when you go buy a home, and he goes and leaves and goes to Virginia.

You may have more flexibility to get money out when needed. with that. High-yield, you're not able to use it like a standard checking, right? That's right. There's a limited number of transactions.

Let's go, I know that's right. We found some great rates with high-yield savings. So yeah, that's the route I would take for sure.

Rachel, I think there's a lot that you can talk about when it comes to savings, because a lot of people struggle with saving money, whether it's for a down payment, emergency fund, or just in general, they've never built that muscle of savings, because it really is a muscle that you build over time. And I always, these are, we can go through a couple of tips that I think will help people. I definitely think that if you have savings, you need to put it in a separate location, like we just talked about.

Savings is something that I would set up. Like once you kind of know what your budget is, it's like, all right, this automatically comes out of my paycheck. The day that I get paid,

But it is, I like the automation factor in it, I think is really good because it creates the discipline.

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