Don’t Fall Into the American Nightmare of Debt

Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help people win in their life, specifically their money, in their work, and in their relationships. The phone number to jump in is 888-825-5225, 888-825-5225.. I'm Ken Coleman, Ramsey Personality, and I'm joined by Ramsey Personality and my good friend Jade Warshaw. She's our money guru on today's show. I'll help you out in areas of work and income, getting that income up as we team up together to take your questions.

I'm ready to do it, Ken.

Come on. Ready to go. Columbus, Ohio is where we start. Nick. is there.

Hey, Ken. Hey, Jade. How are you guys doing today?

We're having a blast. What's up?

So, my wife and I are in a bit of a pickle. Some background real quick is. we just got married a few months ago. We had a really expensive last year with weddings and our wedding and all that. We got through it all.

Where?

It's in Italy. Ah.

I love that.

Always. Oh, my goodness. So, and she's supposed to be part of the bridal party, too, which is even more expensive, because you got the dresses and the activities and the la-ti-da. How much debt do you guys have?

We have about $97,000 left.

Okay, $97,000 left. And who is this person to you? Whose wedding is this?

It's one of her best friends. Not family or anything, but...

Like recent best friends or best friends from high school or from college? Like, is this person in her daily life, day to day? Yeah.

I would say, I mean, they've been best friends for the last four or five years. I wouldn't say since they grew up together, like they didn't grow up together.

Is she the maid of honor?

No.

Okay. So she's not the maid of honor, which means she ain't the best friend. Unless the girl has a sister.

It does matter in this.

It does matter. Okay. Right. I'm going to shoot you straight here, because I don't think that you guys can afford a trip to Italy and I don't think that you can afford all of the things that goes along with being a bridesmaid, because in 2023, these bridesmaid prices have gone through the roof.

Yeah, what are we talking about? Do we have a price tag? I'm curious.

It's the parties. It's everything. It's everything. So what do you think it's going to cost?

So, um, the whole thing is about four days, I believe that's the minimum, the minimum like stay. And that's not even including travel. I priced out to about 6,000.. That's if we just did the four days.

And that's for the two of you?

I mean, yeah. Flights. I can't find anything under, uh, like four grand for two flights.

Right. And then there's tuxedo dresses. Is that everything included?

Yeah.

The next question I have is, do you have $6,000??

We don't. We did save a little bit of our, um, we got some money from the wedding and we put most of it towards our debt.

So what's the pickle? Because that implies to me that you, maybe you guys aren't on the same page. Is that true?

Yeah. I mean, she's all in on going, and I'm kind of on the, we can't afford it side, but I don't want to come between.

Let me ask you this, because if it were me, if I were you, um, and the script was flipped and it was my husband who wanted to go for his friends, I would say, what would you think about us throwing a really nice bridal shower, or, in this case, groom's party, for your friend here stateside? And we can do that. And that way we're finding a way to participate, doing something nice, but we can also keep it within a much smaller scope and not bust the budget.

That's Jade, the financial expert and the very disciplined person who changed her life. You're legit, but come on. I want Jade the woman on this. Okay. So if he says that to his wife, I think she goes, sorry, pal, that's not a viable option.

I have a different one. They've got to find a way to meet in the middle.

I got one. I got one.

Okay. Hit him, Kim.

He doesn't go. He says, babe, this is your dear friend. I know that it would pain you not to go. It's a big deal, but, babe, we are in financial-.

It's still $3,000..

He can go make $3,000..

In June.

Okay. Between now, no, I'm okay if you don't like this, but-.

I don't know how I feel. I'm still marinating.

Well, good, because I am trying to help this man in his marriage, and I am asking you, as a woman, to get real. If this were you and Sam, and this was your really good friend, and you were in, come on now.

All right, Kim.

He has no option but to work his butt off. He can sell stuff, make some money, come up with, and I don't think it's three grand. if she goes. I think he can.

And Nick, we're arguing this for you.

You've got to say something. Hold on. Go ahead.

If it's any consolation, we're putting about $1,000 a month towards our debt.

Exactly.

This is a cash flow situation.

And for me, I'm like, if you can just go out and earn $3,000 for a wedding, I'm like, all I see is your debt going from 97 down to 94.. That's what I see. I'm like, look, with almost $100,000 of debt, how long have you guys been working the baby step two? How long have you been in it?

It's been like two and a half months.

You're just getting started.

All I see is his wife resenting him for years to come when she's looking at Instagram and seeing the wedding pictures. No, she's not.

She's not. Because what I-.

Get her on the phone. I'm telling you, I'm right on this one.

She's going to be mad for a minute. But here's the thing. Kim, I don't even talk about my wedding on a weekly basis, a monthly basis, or a yearly basis. It's not even her day. She's going to get over it.

You're the exception. She's going to get over it.

Kim Coleman, you looked at your wedding album?

I'm a dude. But this is a woman. Weddings to women is a whole different ballgame.

I'm a woman too.

I just gave you the perspective. I just don't think you're keeping it real.

Well, okay.

The man is calling us with a money and relationship question, and I am trying to help him with both.

Look, Nick, what are you leaning towards? After you heard Kim and I chop it up, what do you think?

It's just I'm between pausing the debt and saving up some money and just going the minimum that we need to be there. We also postponed our honeymoon. We didn't do a honeymoon because we underestimated how expensive Italy was going to be. that was supposed to be our honeymoon.

See, that's the thing. You didn't do your own honeymoon to do this.

He's on the phone talking to us.

I want you to understand. you're grown, so you're going to walk away and do what you want and whatever makes you sleep at night. However, what I do want to tell you is you're just getting started, and the choices that you make now are setting the tone for your whole baby step. two journey. The moment that you start saying this is the exception or that's the exception, you're creating a rule.

I agree with that. I agree with you.

You're creating a rule with this decision.

I agree with you. I'm trying to help him out. I know you are, Kim. Because I got the feeling, we run out of time with him, but I have the feeling his wife is really like, I'm going.

Everybody wants to go to Italy, and everybody wants to be in their friend's wedding. I'm not saying that that's not the case.

No dude in the world. Any dude's like, sorry pal, I can't afford this, but women, it's a different deal. So I want to see you sit down and have a candlelight dinner conversation with mama and see where she's really at, and then, if you really have to split the difference, my option is a viable option. And not stop paying the debt. I don't want him to slow down.

All right. Today's question comes from Dalton in Kentucky. My wife and I have been stupid over the last year. We moved across the country for a job and immediately purchased a home while still having student loans. After finding the reality of our new job was not accurately displayed in the interview process, my wife and I made the move back to our home state, both of us having higher paying jobs than before.

You know, it's funny when somebody asks, how can you find the motivation? We get those questions a lot in different aspects of the work we do here at Ramsey. And the root word of motivation is motive. And most of the time we use the word motive, it's in a legal context, right? And so, most of us, we hear the word motive in some type of a legal drama, whether it's a television show or a movie.

Come on, you're a thespian, Ken. I'm ready for it.

But emotion, again, we've got the word emote, motive, emote. I'm just saying, you want to get motivated? Focus on that emotion that is nagging at you, driving you crazy, that is not allowing you... The emotion is a result of, I'm not where I want to be in my life. So, whether it's losing weight, getting a better gig, a job, getting out of debt, getting out of a bad, abusive relationship, what motivates someone to act is the feeling.

I like that, Ken. You do have to think about your motive. My two cents to add to that is I think that people look at motivation often as a... They need that in order to start. And I'm like, listen, motivation is really a byproduct of having started.

Good question, though. Thank you for the question. All right, let's get to the phones. We'll go to the Big Apple. Jason is on the line there.

Hey, guys. Thanks for taking my call. Quick question. I live in New York City with my wife. I'm 37 years old.

Well, listen, let me be the first to say, we are a no debt, you know, that's our philosophy, no debt. But the only debt that we're never going to, you know, get mad at you for taking out is a home mortgage, when you do it the right way and within reason. So if you, you know, if it's your principle in life that you, just like Dave Ramsey, does not borrow money, not even for a home purchase, OK, so if you want to go to that level and if you've decided, hey, I'm Jason and that's my standard, I'm not going to take that away from you in this moment. But I would like to introduce you to the idea, if you're open to it, that look, taking out a small amount for a mortgage is not a bad thing. If you would like to be open to that.

It would be a pretty small mortgage, probably between four and five hundred thousand.

OK, and what would be the cost? Like, are you putting anything with that money?

We'd be putting a significant amount of money down, and I guess I forgot to say we are apartment in the city. We we've been saving up for a very long time. We bought our apartment all cash. Wow. And I'd be using all that that equity to buy a house with a mortgage on top.

Jason, give me two numbers. What's the purchase price of the house you're talking about and what's your combined?

income? Yeah, so our purchase price is two million and our combined income is about five hundred fifty thousand.

All right. That's what Jade needed.

OK, yeah. So I mean, you're paying one point, five million in cash, which is amazing. Yeah. Incredible. And then you've got a really strong income.

Yeah, because of your income and the size of the down payment. Do you understand what we're saying, Jason? So this is not a crazy move.

OK, it just it's. it scares me. I've never been in debt in my entire life, so it scares me to death.

Well, then I mean, don't do it.

Most people don't put down three quarters of the amount of the loan.

Yeah, you're a unicorn, just by those numbers alone, with your income and the amount you put down. But listen, if you don't feel right about it, don't do it.

I mean, if you don't feel good about it, a one point five million dollar house is.

amazing. Why ask him, how much longer would it take to save up to pay cash for something like that? Those houses are still going to be there.

That's right. That's good, Ken. So options.

You got options, Jason. I think you got to trust your feelings. Talk it out with the wife. Make sure we're on the same page on all that. But you, financially, for taking out a mortgage, you guys, you easily meet our criteria is what we're telling you.

Hey, guys, how you doing?

Great. What's going on?

Yeah, so I'm interested in pursuing a graduate degree and I am 24, single, no dependents. I'm on... I've completed Baby Steps 3. And my question is paying for that graduate degree without going to student loans. So getting some guidance on doing that.

How much is it going to cost?

Master's program is looking about $45,000 and a PhD is looking at double that.

Are you planning to pursue both or just considering both?

I'm going through the process of figuring out what program is best for me, because I.

What do you want to do?

I want to be a professor in international relations.

All right. And does that require a PhD?

To become a professor? Yes.

So this is the only way for you to teach at the level you want to teach. You have to have a PhD.

I would start off with getting a master's or going full into a four year PhD program. So, yes, that is the route.

Which is most efficient. Could you jump straight to the PhD? In other words, I don't know this world, the higher ed world. like you do. Do I need the master's if I can go straight to a PhD?

It wouldn't. necessarily you would need and need the master's, but I'm trying to work full time while also paying for this program part time. So the programs I've been finding out there is it'd be. it looks like it'd be easier to get the master's program first and then jump into a PhD program full time.

I get that. But my point is, does the master's help you make more money in the meantime? Is that why you think you need the master's?

I'm a teacher, so it would give me a little bit of a bump, but it would not give me a big bump for finishing that PhD.

Then I wouldn't do it. You're asking. I wouldn't do it. It's not giving me enough bump. And you know what it's doing?

If you're looking at anywhere from like 90 to 120, depending on which school you go.

to. I mean, if it were me, I would skip the master's. I'd start busting it, working as much as I could. This is a long term play and I'd save up the money. And so to me, the master's is effort that doesn't ROI.

Understood. Understood.

Unless I'm missing something, like I don't want to, I'm not trying to put you in a corner. I'm just going to walk through this logically, so that I'm putting all my effort into getting that PhD. That's the ticket.

No, I understand. I understand where you're coming from.

Jade, any thoughts on that?

How long does it, I have two thoughts. A, how long does it take to get the PhD?

Full time, you're looking at four to five years.

But did you say you're doing part time?

Well, my idea was to keep working my current job and to pursue a master's program, then jump into the PhD program, because the master's program, I can work and pay off as I go with the amount of current cash I have.

Right. But if you go, if you take Ken's route and you go straight to the PhD, are you doing that full time or are you having to do like that?

OK. Yeah, that would be full time.

And the question is, can you afford, what is it, twenty two thousand dollars a year for the next four years? Can you afford that?

Currently, no. Currently, no.

So, then, my question for you is, what's the plan? Because we can't enter into this without a plan to being able to pay for it, or else you will do what so many other people do in default to student loans, thinking that's.

your only option. The plan is patience. We've got to wait a little bit. Got to wait. Yeah, you got to work and you got to.

Ninety to one twenty.

He's going to cash.

I said about 40 to 50 grand in student loans are probably taken out.

Right. OK, so 40 to 50.. And so how much are you going to make? What's a reasonable salary you're going to make if you get this professor job right out of being a Ph.D.? What's the salary going to be?

Eighty grand. So, 80 grand starting out, starting.

Now, I want you to fast forward. I want you to fast forward to this reality because I believe you'll get there and I know you can get the loan. So now you're going to make an 80.. This thing you've been working for years for, going full time, all the time to put in there. And then you're making 80 and you owe half of your gross pay more.

And let me add one to that, Ken.

What's the dream for us? a little bit? What would be an ideal job after getting the Ph.D.? Give me a. give me a university that you're giving a city, a university.

Either I'm from Florida, so I UCF, or be a top tier, you know, Ivy League institution.

Yeah. OK, so imagine being in any of those places. and the positive side of this as you waited and now you're making eighty thousand and you're comfortable. You're comfortable, you can actually enjoy your life, you know, you don't come home after a full day of teaching and stressing out about the bills. That's what I'm asking you to wait for.

That's right. That's right, Ken. Yeah, we're going to tell you the hard truth. We're going to look not just at right now, but, like you said, Kenneth, at the future. And that's that's where the decision is made, right there.

So, Connor, how's your stomach right now?

You know, I'm just taking in your guys' advice.

Indigestion, a little stress, you feeling some peace about this. What are you thinking?

I haven't. I've made no decisions yet, so I'm really just trying to figure out, you know, I have your guys' advice.

I have everybody else. So, well, here's the deal. We are in the minority, my friend. So at the end of the day, this is up to you. But I'm asking you to press fast forward and play that out and really sit with those emotions.

Look, when I was in elementary school, there was a poster on the wall that said, in a world of followers, dare to be a leader. And when you go to school and pay cash for it, you are leading, my friend.

Connor, I think Jade just double dog dared you, as we used to say at elementary school. We'll see what he does. Will he be one of the masses or will he be one of the few leaders who does it differently? That's the question. We'll talk about it on the break.

Hey, guys, thanks for having me on. How's it going?

We are having a blast. What's happening with you?

So I'm 24.. I have $260,000 in student debt.

Oh, where's my Tums? I got to look for them.

Wow. Where'd you go to school and what'd you go to school for?

So yesterday I took my last law school exam. I went to Syracuse University College of Law. I take the bar in February.

Nice.

Personal injury is the job I accepted after I passed the bar.

And the reason I'm asking this, I'm going to get out of Jade's way, but I am curious. What do you think your first year, since you accepted the job, I'm guessing they talked about potential money. I'm just curious what you think you could make in those first 12 months.

Yeah, so I already signed the contract. The base salary is $80,000.. And then there are bonus offers, but I don't know what that entails. So somewhere between 80 and 90, I would imagine.

Okay. So what's your question?

I have two questions. One is paying, is putting myself in that much debt for a law degree worth it, given my starting salary?

Well, shoulda, coulda, woulda, my guy.

Yeah, I know. I know, hindsight's 20-20..

Hindsight's 20-20.. So we're here now. We'll just accept where we're at and we'll move on from here. So let's make it worth it, right?

My answer is it better be.

Okay.

That's what I'm saying.

Yeah, we're going to make it worth it. So what was the second part of your question?

How to tackle this debt. So 60 of it is private student loans from undergrad and 200 of it is federal loans for law school. Okay. So should I tackle that 60,000 private, higher interest rate loans first and pay very little on the 200,000? Or should I kind of pay it all equal at the same time?

Well, my first question would be to you, is this your only debt period? Like, do you have any other debt besides student loans?

No, no credit card, no personal loans. My car's paid. I rent, no other debt.

And then my next question to you would be, do you have any money laying around for savings? Do you have any money in stocks? Any other money that you could get to? that's not retirement savings?

Nothing significant.

Well, what do you have?

Like $5,000 in my bank account. Okay.

I'm glad you told me about that. Okay. So I'll, since you asked, I'm going to walk through our series of baby steps, and this is exactly what I would do if I were in your shoes. And, by the way, I was in your shoes. My husband and I paid off 280,000 student loans.

The $60,000, I'm sorry, is in a private, just a, it was a private student loan. Right. Um, that I, I'm not paying on that yet. I still have a few months because I'm just finishing law school, but I think it will be just one payment.

It'll be probably one payment. But if you look closer, it's probably divided over semester that you took it out. So when you do that, that would be technically that $60,000 loan is going to be the first one in your debt snowball. Okay. But with the debt snowball, you make minimum payments on everything, but you put all the extra money on the smallest debt.

Yes, it does.

Okay. So you got to do it like that. And then you're going to see those 3,000 gone, 4,000 gone, and you're going to knock them out really fast. So that's thing one. The second thing I want you to consider doing is while you're paying off these student loans, this is the only, only, only time that I would suggest doing some sort of a IDR with the federal loans, so that you can get them to the smallest possible balance, so that you can have more money freed up to throw at your smallest debt.

Okay. Yep.

This is not a long-term play. This is not you kicking the can down the road. This is you going, Hey, a federal government, I want to make these loans as low as possible because I have to make minimum payments on everything. I have more money freed up to put on my smallest debt. In this case, it's that private student loan.

I am not. I am not. I have, I have a girlfriend who we're, we're moving, planning on getting engaged soon. She is in medical school. Ooh.

Um, well, first of all, you are single until you, until you get married, you're single, so don't combine, don't combine finances either. So, so when is that, what do you think the marriage date is going to be? What it real, I mean, just give us an idea.

We do, we chat about it a lot now. We're thinking a couple of years from now.

Oh boy.

Okay. So, while you're separate, you're working your snowball, she's working her snowball and you're, you guys are, pinky, swearing that you are going ham on your, you know, respective debts, right? Yeah.

For the older people in the audience, I needed an interpretation of what she meant by that a couple of weeks ago. That means getting after it.

Getting, getting after it.

Now? what's her med school debt going to be? Or is it at this point?

Uh, so it will be total about 200..

Oh boy.

Oh.

Did you used to watch Sanford and Son and he'd go, I'm coming to meet you.

I'm coming to meet you.

I need my own sound effect. I'll just make it myself. I'm just going to like grab my chest. That's a lot, man.

It's a lot, but you guys can do it. You can do it. What's her salary going to be coming out? Do you know?

She's hoping. she's hoping around 200..

Okay. That's better. That's good. Okay.

Okay. I got advice for you, my friend. You need a police scanner, invest in a police scanner. And you are at every, every accident there is. You need to get a fat bonus.

There is. I'm serious.

I'm not joking. She thinks I'm joking.

You told this man to chase the ambulance.

Wow. There's a reason. He's in personal injury. You can't afford commercials. You're the low man on the totem pole.

Yeah, I hear you. I must say, for now, at least, the job I just accepted, I represent the other side, so I represent the defendant being sued by these people, but I can, I still, I can still get a commission on bringing in new clients.

No, you know what? I'd show up at the same scene of the accident. And instead of the person that's got the stiff neck, you're going to the other guy who's like, thinks his life is over. Go, listen. I'm your guy.

Like he stopped short.

I'm going to fight for you. I'm just saying, you know, it's good.

Can. yeah. He needs to make extra money. You're right.

I mean, I would be everywhere. I would sleep with one eye open police scanner and one ear. I mean, man, I don't know. I'd get after it. Hey, good hour.

Hey, Ken, my question is mostly for you. What you would do in my shoes. Um, I currently am renting and I can afford a house and, or a condo, uh, in, in cash and, or, or a condo in cash. But I, uh, am enjoying my rent where I live. I love the place I live.

I would do exactly what you're doing. Uh, with the evidence you've given me so far, if, if, if you enjoy where you're living and financially, you sound like you're in really good shape. How much cash do you have?

I have about five, 50..

Are you single? I am. Yeah.

How old?

Uh, 27..

And what do you love so much about renting this particular place? Like, give me more on that.

Yeah, I got a great view. And, uh, it's nice that I don't really have to worry about anything. Um, you know, it's all after, after paying rent, no maintenance, or anything like that. And I'm concerned, though, you know, I don't, obviously I want to get married and have kids and whatever, but I know once, if, and when I buy a house, that may change when I'm married, so I was thinking the condo route, but, and you get the HOA fees and, and all of that.

No, you don't want a condo where you get the wife of the kiddos, the condos. That's, that's not the ideal situation, especially where you are. How much do you make and how much are you saving? And then, how much are you investing? Give me the answer to those three questions.

Yes. I make one 20.. Um, I max out all my other, uh, my 401k HSA and all those, uh, I think I can put in 30% and then I, uh, and then I invest the rest into my brokerage account.

So the five 50 that you have, is that in the brokerage or is that across everything? Yeah.

That's, that's in the brokerage. Yeah. Very good.

How did you save that up so fast? How long did it take you?

Yeah. So some of that is from my parents. Um, and then I've, I've, I would say, hit the DNA lottery. So I've, I've. definitely, you know, they paid for my school, and I've definitely worked hard as well, but I haven't had any debt or anything like that.

Because he's investing so much. I mean, he's solid. Yeah. I listen, don't feel the itch. I would not feel the itch if I were you to buy at this stage of your life, you're going to buy.

I may feel contrary to that, Ken. Well, of course you do. I may feel a little contrary.

If I say Ying, you say Yang, but I'm fine with that. I just don't know why he has to, he likes where he lives. He likes the view. He's in great financial shape. He's not married yet.

Well, I don't think you should feel rushed. Don't get me wrong. I don't think you should feel rushed, but my questions would be okay. Like how long have you been renting for the last seven years? For the last, how long have you been renting and living on your own?

Yeah, on my own, about four, I guess four or five years. And I've been renting. Yeah. But I had roommates. This is the first, almost coming up on a year where I've been on my own.

Okay. So you've rented for five, six years. What's your rent?

I'm sorry? How much do you pay in rent?

1,400..

All right. I'm going to give it back to Jay. Jay disagrees with me. I want to hear this.

Then my next question. So I'm just, I'm just gathering more facts before I really form. My next question to you is, is there a significant, is there a lovely lady in the picture is all I'm asking?

There is not. No, I am single.

And so my-.

Look it, look it. If you know anyone.

Hold on, single ladies in Salt Lake, there's your invitation.

Well, here's where my mind goes to. I don't want you waiting to buy a home because I might meet a lady and we might get married. And that's probable. You probably will, but you don't know when that's going to happen. So I don't want that to be the reason that you wait to get into home ownership.

Are they the driving factors?

Not necessarily. No, but like, like Jay did at some point, I need to buy, you know, it's like, you don't want to rent forever.

I agree, but that's not the scenario. I'm going to tell you, I respectfully disagree with you.

And he's single.

He's got a great view.

He's single. He's got a view. But I, I just am thinking about over time. Here's what I know about you, Jason. You are a great saver.

He's going to pay for it in cash.

It's going to build up. He's going to save more money. He's the kind of guy that's going to have a giant real estate portfolio.

Then, all right. If I'm going to meet you in the middle on this one, I'd say it better be a smaller one, so that we just call it a real investment, not the home, because we don't know what his situation is going to be when he gets a woman. She doesn't like his house.

Well, no home is the home. Anybody who thinks this is the one I'm going to live here forever. No, you're not.

What do you recommend?

I think, listen.

A $300,000 house?

I would spend his money. $550,000?.

He's in Salt Lake City, Ken. I wouldn't spend all $550,000 on a single guy.

Jason, what's it cost to get what you need in Salt Lake City in the area that you like?

To get a nicer home, I would say around $550,000, but I could get one around $300,000 to $400,000 as well.

What's a nicer home? What is that? How many bedrooms?

Oh, I would say like a minimum of three bed, two bath homes.

Yeah, but you're a single guy.

But my point is- That's why I don't need that. That's why-.

You don't need that. And I'm not saying that he has to buy a house for his future family. I'm not saying that at all.

You want him to buy a $550,000 house cash as an investment property.

No, I'm saying I just want him to buy something that he can live in. I'm not saying he has to spend all his money. All I'm saying is that we know the correlation between homeownership and wealth building over time.

That's all I'm saying. I think he's going to get there. I just think in his single situation, but I thought you said spend it all.

Yeah, and his hair's not on fire. His hair's not on fire. But my thing is like, listen, all these markets are different. So in Salt Lake City, if you're trying to get a two bedroom, two bathroom condo or townhouse, and it's $400,000, that's a reality in a lot of places.

Do you have the option to buy the apartment you're in with the great view?

Unfortunately, no. I wouldn't.

Listen, I've been to Salt Lake. There's a lot of views. I bet you you could get a house with a nice view, too, or buy a condo or buy a townhouse with a lot. Listen, I love ownership.

And I don't disagree. I just, because he's single and he's sitting on all that cash, I just would preach a little bit of patience right now.

He's been patient for seven long years, Ken. That was my Titanic voice, by the way.

I like that. I like that. I feel like I see Rose, and, what was the guy? Jack? Rose and Jack bobbing in the cold, icy waters.

All right. You're listening to the Ramsey Show. Ken, I had to hijack the mic from you just for a moment.

It's okay. It's in good hands. What's going on?

Listen, a lot of you probably remember a couple months back, really back in the summertime, Ken. I kind of, I kind of went nuts on the mic because as a country, our spending had gotten completely under control, out of control, you know, we were looking at, you know, a trillion in credit card debt for the first time, and, you know, inflation, we were still dealing with that. And, you know, I just had to let folks know, listen, guys, we've got to get in control of our money and quit going on this roller coaster. And it's interesting because really, I mean, over the past, I'm going to go with. three years has been crazy, everything from COVID.

That's a great question. And it comes top down. If you look at what Congress is doing, both sides of the aisle, both parties are equally guilty, the American debt, our country's debt, it's kind of the entire attitude about debt from our leadership now is just, well, we'll.

figure it out, we'll figure it out.

Look at this, look what they threw on the screen right here. That'll make you break out in hives.

Yeah, that is making me break out in hives.

If you're watching, you can see this. If you're in our listening audience, James and the team has thrown up literally a, this is a ticker board. I don't know what else to call it, but it is a running total of our national debt right now.

Oh, that's painful.

And that's $33,915,000,000,000 and it's going up.

We're just watching it rise.

It's crazy.

Wow. That look, some of us need to do that same exercise with our bank account and look at it, look at, is your savings going down or is it going up? Is your investment going down? Do you even have anything or you do what I'm saying? You need to take a look at how you're spending your money.

Yeah. Have we begun to see any pain points in the data? Have you seen anything on the, the reemergence of student loans? They just started back in October. So we're still relatively we're inside of three months right here.

Listen, that's another part to this. And, you know, we knew that it was an issue because after student loans came back on the scene, it's like, listen, people are already drowning. Yeah. Right. They're already underwater as it is.

Oh, okay. I thought this was the preppers. This is different.

No, this is different. This is people looking and going, I'm just tired of the roller coaster. I'm tired of having to cut back because of inflation. I'm tired of having, so I'm just going to forget it. You know, double make hair.

Well, and I think you make a very compelling case that this is an issue, whether it be money, your weight, substance issues, relationship issues, in a job you can't stand. We as humans would rather be miserable than uncomfortable.

Yeah, that's right.

And what you've presented here is an unbelievably overwhelming case that people would rather be miserable financially than uncomfortable, meaning making the sacrifices, living on a budget, not buying a brand new car. That's uncomfortable to do things differently than you're doing now, but you're miserable, and if you can understand that, I think the case that Jade is making here is you're okay being miserable, and until you get to the point where you go, I don't want to be miserable with money anymore, I'd rather do some things that are very uncomfortable to not be miserable, and you and Sam did that. You embraced the amount of money you paid off, almost half a million dollars, you were uncomfortable.

You have to hit that moment. The stuff's got to hit the fan in your life, to where you go, this is embarrassing. This is embarrassing. I remember my sister went into the hospital and I couldn't go see her because we didn't have the gas money. And she was just three hours up the road, Ken.

All right. We're here to help you change. Quick break. Don't move. More of your calls coming up.

Hi, thank you both for the work that you guys do and taking my call. I really appreciate it.

You bet. What's going on?

Yeah. My question today is about my career. I recently have been promoted into a new role. I love it. My last roles within my organization have both been brand new roles.

You mean what your salary range is outside?

Correct. Yep.

Well, this is not a perfect science, but it's, you can, you can have some good science around it. So what you have to do is, is, to the best of your ability, you got to match up your job description, even though you created it custom for your current organization, which, by the way, I want to give you mad props for that. That's, that's really awesome that you did. that. That is, that is not done very often.

Yeah. So my current role is, um, development and training, um, in the, in a sales department on a very basic level. That is what I do. And I know there are those roles out there. Um, so I, I do believe that I could find, um, something somewhat similar to that.

Yeah. So that's what we're doing. So we're going to look at sales, uh, leadership roles, sales training roles. And you just begin to look at those job descriptions out there. And as those companies are describing their roles, how much do they match up with what you're doing?

Awesome. Thank you very much.

Yeah. Appreciate the call. All right. Let's go to Lily in Indianapolis. Uh, Lily, you're on the Ramsey show.

Hi, Ken. Hi, thank you for answering the call. Appreciate all the advice you give to the listeners. Um, my question is, uh, whether it's smart decision to use cash to buy a new car, uh, to upgrade, I guess, um, from my current, uh, car.

So what's your current car worth and how much are you trying to upgrade?

Right. Uh, currently my car is worth about 20,000. on a new car. We're looking at, it's close to 64,000..

Oh, wow. Uh, 64,000.. Okay.

What's the car?

It's a Lexus SUV.

Okay. Well, let's see if, you know, let's see if it makes sense. Do you guys have any debt?

Uh, we don't have any debt besides a mortgage.

Okay. No debt besides a mortgage. Do you guys have three to six months of expenses saved up?

Yes, we have a rainy day, funds, um, close to 70,000.. Okay. Excellent. Um, we have a sort of a set aside bucket of money to work with, uh, uh, around 48,000..

Okay. So the 48,000 is separate from the 70.. Correct. Okay. And then what do you guys earn?

Uh, household wise, three, uh, 300 K a year.

Okay. So we always say, you know, you don't want, um, your vehicles to be any more than half of your annual income. So, and for all intents and purposes, you have $150,000 to work with here. So if you've got a vehicle that's 65,000 and your husband's got one that's 65 or 70,000, you're good. The question here is, are we, is this a used vehicle or is it brand new?

It's a brand new one.

Interesting. So then my next question is, we're talking about doing a brand new vehicle. We always talk about, um, we suggest not buying a brand new vehicle until you have a million dollar net worth, because at that point you can take the hit. Right. Because we know that brand new vehicles lose 60% of their value in the first three to four years, right?

I'm sorry.

What's the model of the Lexus SUV? Is it a GX?

Uh, it's the MX hybrid.

MX hybrid. All right. Keep going, Jade. I just want to, I love doing research on like, cause. I want to, cause Jade's right.

2024.. Oh yeah. The, yeah, they're going into 2024..

And it's a Lexus MX.

Yes. Okay.

So, I mean, Lily, do you have a million dollar net worth?

I think so. We ran some numbers. I think we do. Um, my husband would say a hundred percent. Yes.

Um, what's making you feel cautious?

Um, just my, my nature.

What is it like? he's counting money that you don't want to count? Like, what is it?

Like we, I, I have a business, uh, which is doing well. Um, and then it just, I just don't know, you know, how the business will grow, uh, five, 10 years from now, right? There's the unknown.

Okay. But I mean, net worth, meaning. When you subtract what you owe, which is nothing, what you own minus what you owe, right? So if you look and you said, I have no debt. So you're looking at the value of your, your home, whatever your home is worth.

Ken, Ken is going to tell us the teacher's aid for this segment.

Yes. Ken Coleman. Go for it.

So, uh, Jade is absolutely right, Lily. This is Nashville, but I would guess that, that Indianapolis may be even a little bit cheaper. Uh, but, but, but not crazy. All right. Here's what I've got.

That's 24.. That's $23,000 difference.

Yeah. I'm going to do better. I got a used 2022, same model. Uh, 21,000 miles, only 2000 miles difference. 37, nine.

Oh, I'm just saying 19,000 miles is new.

That's a new car. And here's what we're saying, Lily. We just want your money to go further. Like this isn't going to break you, but paying 65,000 for this model for a 2024, you realize you're getting ripped off because these cars, this is a two year old car, not even two year old car. I'm giving you right here.

That's right.

And you're saving a lot of money. So I like the $41,000, but I don't want her to feel bad.

If she has, if she's got the million dollar net worth, I want her to inhale that new car smell until her eyeballs roll in the back of her head. You know what I'm saying? Like, I want her to enjoy that moment. If you've got that million dollar net worth, cause, then you can take the hit and you know, it is what it is.

I feel like I'm getting ripped off. I'm getting gamed.

Well, you are, you're agreeing to take the hit. You're right. Yeah. You're going to pay like someone else, to take the hit.

Yeah, I see. And here's the thing with these two cars here, uh, Lily, we've, someone else's has paid the stupid tax. I'm just trying to make my case here and I'll listen. Yeah. It doesn't matter if I'm right.

Let's go back to the core question. Cause my screen says, is it smart for me to buy a $65,000 car? Or should I invest some of that money? As long as you are investing 15% of your income every single month, as long as you have a million dollar net worth, and as long as you can pay cash for that brand new car. For me, the answer is yes.

For that reason, I agree.

I'm in.

You can do it. You're a big girl, Lily. We, we believe in you.

Yeah. But if one of those things doesn't check the box, then we have to adjust.

And if you don't want to pay a stupid tax, go Ken's route.

I like it, Ken. That's good.

Got to get the last word in there. I can't help myself. Uh, really good stuff. Hey, Lily, you're awesome. You're doing great.

Hey, thank you for having me on.

You bet. What's up?

So I'm not sure what I should do. Um, there's kind of two sides to, um, what's going on, I guess. Um, so, do you want to hear the marital side part or the financial side part first?

Let's hear the marital side part first.

Okay. Okay. So I'm going to start kind of back to a year ago. Um, so I left, I left my ex-husband, which was financially abusive. Um, and I got out and since then it's been kind of, uh, I've been, keep getting thrown back down, I guess, is what it would be.

Do you mind telling us briefly what financially, financially abusive means?

Um, yeah, I had a budget of $50 a week for groceries for my family. And that's the only access of money I had.

Wow. So it totally controlled you.

Totally controlling. Wow. What was you guys' income?

Um, he made about 70,000 a year. And, um, I read Dave Ramsey's books about four years ago and I got so pumped and I brought it up to him and he just despised Dave and it kind of shut me down a lot and he wouldn't let me in on anything, like I even wrote out like a strategy for him, like, Hey, like, if we do this and this, this is what we're going to be projecting to getting out of debt, because at the moment, like we had, I think, a car debt and, uh, some other, a couple other things, credit cards, probably, eventually we did get out of it. Luckily. Um, so now I'm back in debt.

Tell us what you, yeah. Okay. So tell us what's happening. You said you keep going down. So give us a picture of what's going on with you right now, the finances.

So I, I scored a job right after I left him in December or, and I started in January of last year and I was there till about April and between then and like April, my idea was I have six months, I'm going to save up enough for a retainer, for a lawyer, and I guess, um, do it myself, like file and everything on my own, for cash, like cash, but he beat me to it. About 30 days later, I got served and I had to take out a credit card for retainer because I'd had zero money. Um, and I had, I got a, an apartment within, like, I don't know, January 10th is when I got my apartment and I pretty much got everything set up on my own by myself, and I don't know how I did it, but I did it and it's just been back and forth. I got let go. I was pregnant at the time when I did leave, so I was about, yeah, I was about 13 weeks pregnant, I think, if I can remember correctly.