Your Income Is a Key Ingredient to Building Wealth

Jade Warshaw joins me this hour. The phone number to jump in, because it is your show, America, is 888-825-5225.. That's 888-825-5225.. The fabulous Jade Warshaw, ready to go, warmed up. Did you do voice exercises in the green room?

There she is, pitch perfect, as always. She'll take your money, questions. I'll jump in. Then, hey, we've got some work questions, some mindset stuff. Hey, I'm struggling here.

I feel like I've got a lid on me professionally, which is affecting me financially. Any of those work-related questions I'll take on, and Jade weighs in as well. Let's go to the big apples, where we start. Julie is waiting on us. Julie, how can we help today?

Hi, guys. How are you? Thank you for taking.

So I'm calling. I've been listening to your podcast probably over the last year, and then since 2024, I've really been obsessed with it and looking into it every single day. That's awesome. I think I need to call it. So I'm calling because I feel like my husband and I have the baby steps all out of order.

Okay. We have debt. We have credit card debt. We have car payments. We have a mortgage, and we have student loans, but I feel like we have savings to pay off our credit card debt, but I'm just nervous that if we pay it off, we're going to plummet our savings, and then if there is an emergency, it's been hard since we bought our house to build our savings back up.

So I like having that cushion. We have a little over $30,000 in our savings and about $13,000 in credit card debt. So I'm like, we could just pay that off right now, but I'm nervous to just see it plummet, and then we have other payments too.

That's not actually your money. And so when you put it that way and you start to realize, listen, the debt that I owe, that's the real scary thing. That's the risk that I've created in my life, and until I give them the money that I owe them, they're not going to stop coming after me. And so the real question, then, is, what's scarier, to have these companies relentlessly coming after you for money, or to just give them the money that you owe them and get on with your life? Right?

Right. Yeah. Back to your point of kind of, I feel like we're doing the baby steps out of order. That means you know the right order, and there's a reason for that. I want to take a moment and explain the reason.

Yeah, but I think if you understand the reason underneath it, it'll make a lot more sense, and this is for anybody listening. We don't do it like this because it has a nice ring to it, right? We do it like this because it truly does work. So when you do the first thing, you have the $1,000 of security. Let's debunk that.

That is supposed to make you feel a little bit shaky. So if you were to take that $30,000 and apply it to debt, or in this case, take $29,000, apply it to debt, and keep $1,000 there, that is going to make you feel uncomfortable, and it should. So I want to validate that feeling. The hope is that you go, okay, I can't live like this forever. Let me tackle baby step two, which is paying off all that debt besides your mortgage.

And so that should light kind of a fire underneath you to like, let's keep going. Let's go as quickly as possible. And the funny thing is, okay, so your credit card payments, how much do you pay every month to credit cards?

Then you'll be able to start investing a full percentage into retirement. So there's a way that this works, because the thing is, if you don't pay off this debt, it's going to linger on.

And I'm also like, is it wise to tithe when I have debt? I know it's more like a spiritual heart thing, but...

So, even if you're not a Christian person, it is a great principle to just live by. So I would continue to tithe at the minimum 10%. I would continue to do that. I would pause all other investing for the time being. Again, the baby steps, it works for a reason, because here's the thing.

Let's pretend.

. Let's say that you say, I'm going to keep investing my money and I'm going to use this $30,000, though, and I'm going to pay off some of this debt. You're already out of order because you're continuing to invest, which means you're paying off your debt slower, which means it's going to take you longer to get out of debt. And if you happen to have a major emergency, do you want to know what people do? They look at their 401k and they go, Oh, well, maybe I can use that money.

As opposed to when you only have a thousand dollars saved, baby, you get what is known as creative and you start coming up with ideas and you do everything you can, because you've removed that false safety net from under you. And now it's just you and your money. But when you do it the right way, you're out of debt, you start investing and then your investments are actually your investments. You don't touch them. They stay there.

They grow. They compound interest, like they're supposed to. And now you're doing things the right way. So there really is all sorts of structural components in building this house the right way.

And when you get the picture, the vision of how quickly your life changes and you get ahead, like Jade just laid out, this is a no-brainer. It's nothing to be insecure about. This is our answer, Chuck.

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Welcome back to the Ramsey Show. Thrilled that you're with us, Erica. The phone number to jump in is 888-825-5225.. We're going to talk about your money. We'll talk about your work.

We'll talk about your relationships. All three of those areas are intricately connected. And when you're not winning in one, we tend to see that you may not be winning in others. And if you're in a four alarm fire in any of those areas, we're here to help as well. Jade Warshaw joins me.

I'm Ken Coleman, with Ramsey Personalities. We are your host today, 888-825-5225.. Julian is up next in New York City. Julian, how can we help?

He didn't just want to give it to me cash. And he wanted to essentially help me buy a new car. And I'm 20.. I'm in college. And, realistically, financially, it wouldn't make a really big dent for me to put an extra 10 to 20 into a car and potentially get a $60,000 to $70,000 car.

And I was wondering, if it wasn't a stupid financial decision, do you think that would be potentially a good decision for me to make, given that I'm 20, and it wouldn't hurt me financially?

in August, in the fall. And I was just wondering, given that I've worked so hard for the last two years, I feel that I deserve it, and I'm excited to drive around in a nice car and not have to drive around in the Subaru. But I don't know, I guess other people, kind of seeing that, I don't want to look like the kind of person, like my parents, bought me a really nice car, you know what I mean? Even though it is mine.

I wouldn't put any extra money into that. But let me also say, if you can listen to this program, Dave talks about the ratio, Jade can break that down, when we talk about ratio to what you make. So for you to spend $20,000 on top of the $50,000 based on what you make and what you've got in the bank, it's a no brainer. So if your concern is, I'm worried about what others are going to say, because I'm young and I'm driving a nice car around. First of all, I don't give a crap what they think.

And secondly, you've got a legitimate story. You're not a trust fund, baby. There's nothing for you to be ashamed of. You've worked really hard to get to this point where you're making incredible money, young man. You've been frugal.

You have no debt. Man, I'd say enjoy this bonus. I have a question, though. I have a.

This is a no-brainer. That's excellent. This is a no-brainer.

. If it ends up being $50,000,.

. I love it.

Let me make sure I got all the facts, so that was pretty straightforward. Way to go, young man. All right, let's go to Andrea in San Antonio, Texas. Andrea, how can we help?

There are three builders in the neighborhood building homes and apartments. There are several streets of brand new homes for sale. The builders have their own financing companies, so on top of having lowered the prices of the new homes for sale, they are also offering lower interest rates to potential buyers. We don't think this scenario will change in 2024.. The expenses for this home total about $1,100 per month.

My husband has been employed for seven months now, and I just got a part-time job. So with my part-time job, I'm guessing that our income is going to be about $5,000 a month starting this month. Okay. So we're nervous because we've been digging into our savings for several months now. My husband is a software engineer, so we thought that he was going to be able to find another job quickly, but it's been seven months and he hasn't found a job.

. So the $1,100,? what is that, like taxes and insurance?

We only had two complaints from potential buyers. One was that there was no bathtub in the master bathroom, and the other was the location. They thought it was too far and there are no grocery stores.

We think it's the competition.

You bought two homes in cash. $1,100 shouldn't be breaking your world right now. I think it's because you guys' income is so low, and I know your husband's looking for work. You guys got to get that income up. That's the biggest fire that you need to put out right now, because when you're earning the right amount of money, suddenly this $1,100 on two properties that you own, you're going to start to look at that as a blessing instead of a burden.

Right now, it's a burden because your husband is.

You don't need two houses either. So you guys are close, but this is just some hustle right now in a couple different areas. Thanks for the call. This is the Ramsey Show. We'll be right back.

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The phone number is 888-825-5225.

. And Jade, across the studio, through the glass, on the debt-free stage, in the lobby are some folks. And that means we've got a debt-free screen coming your way. Gary and Melissa, welcome. Thanks.

Thanks. All right. Where are you guys from? From Belle Point, Minnesota. Belle Point, Minnesota.

Is that near Minneapolis? Just south Minneapolis. Okay, good. Boy, are you just excited to see the sun this time of year? Yep.

There, it is. All right. So all this way to do a debt-free screen, very exciting. So let's hear the numbers. How much debt did you pay off and how long?

We paid off? $165,000 over 47 months. Wow. And what was your range of income? We started at about $160,000 and ended at about $200,000..

Oh, what led to the bump in pay? We just leaned into our careers. We both earned promotions and stuck to it. What do you mean by promotions? He moved from a factory position to a safety manager, and I just kind of took different roles at my current company.

And what are you doing? I'm a client relationship manager. Okay, fantastic. That is awesome. All right.

What was all this debt? What did the $165,000 get comprised of?

Yeah, we used it to remodel our basement and then kind of kept it and kept it going. Okay. All right. So tell us, 47 months ago, what happened? What was the catalytic moment to lead you on this journey?

Yeah, so he was going back to school. It was his last semester, and we had found we were kind of, we were trying to cash flow it, but we'd get a little short, so we'd pull a little bit out of the HELOC. We were getting kind of sloppy, and his last semester came up and the tuition payment was going to be due, and we finally said, this is it. We're doing it in cash, and we had about two and a half months before that was due, and we did it, and that was kind of our biggest victory as we got started.

A couple years before, it was a 401k loan. It just kind of, things, we were just, it was a shell game. We were just kind of moving the debt around, and it just got tiring.

Tell.

Do you do the ice fishing in Minnesota? Do spearfishing? I learned about that. I don't want to go down the rabbit hole for the rest of the people who don't care, but you talked about camping and all that. I heard about how you do the ice fishing.

It's like a whole thing. It's like a whole experience. Everybody goes out and all that jazz. It's fun. No, I don't think it is.

I'll be honest. I heard it described, and I didn't think it was fun at all, but much, much love to you on that. All right, so let's talk about this. Was there a beginning point that you guys said, okay, we'd heard a little bit about this Ramsey stuff. Now we're going to do it.

Was it hard or was it, we were on the same page. What was the beginning of that journey like? when you finally said, all right, we're committing? How, I mean, was it hard for you or did you just roll right through it? It was a little bit of getting on the same page.

We started with that first goal of getting that last tuition payment. And then from there it was adopting the budget, which I wrote out, the budget. I'm the nerd. It took him a little bit to get into the budget, but once we started rolling, then we were both fully bought in. Yeah, it was reluctant.

at first. It was, you had the idea of getting on. that budget was a little rough. But once you saw it start to really work, that's when I bought in all the way. So relate to that a little bit,

Because I love talking to people who don't like budgeting and changing their minds.

Tetris. All the little pieces equal to a certain amount of money. And we had that sitting on our refrigerator. And then every time we were paying off any amounts,

Melissa was really good at filling in those spaces. I like to fill it in. So you like to feel.

We did. Oh, you didn't tell us that. Wait a second. I was digging. That's the juicy part.

I was trying to figure out how big was that credit card. Listen. You paid your house off?

That makes a little more sense. Yes. We just got into it. Guys, I need you to shout that from the rooftops.

on the way? I would say we've got some family that was walking the journey along with us. And then my parents. We just like to talk. money.

You know, there's more that's caught than taught. And it was those conversations that just kind of kept us focused and motivated. Wow.

What do you do? Don't say ice fishing.

And then we're going to talk about them for a second. We've got, tell us who they are and the ages. Yeah. We've got Charlotte's 13.. Kelvin is 11 and Caleb is seven.

Okay. And so how quickly did you bring them into this journey? And then how involved were they in the conversations around this? Because you just said, Melissa, that you and your family talk about money. I'm guessing these kiddos have a pretty good idea about what we're about to do.

Yeah. Yeah. Oh yeah. They do. They listen to the podcast with us a lot of the time.

They were pretty good soldiers. Nah, they're pretty good. They're pretty easy.

And that's where you guys are headed, probably pretty quickly with the income you guys have. So those are our gift to you. All right, let's do this. Is the team ready? The kiddos, have they been practicing?

They're old enough. I've got to hear you guys. All right. I want to hear all those different tones coming out. Let's do this thing.

We've got Gary, Melissa, Charlotte, Kelvin, and Caleb, all from the Minneapolis area. They paid off $165,000 in 47 months, starting out making $160,000 and ending at $200,000.. Let's go, team. Let's hear your debt-free scream. Three, two, one.

We're debt-free.

But this is a great example of how a family's tree, as Dave has said, for decades, changes. So very, very cool. True, that. Awesome stuff. All right.

Don't go anywhere. We've got to take a quick break. Jade Warshaw, Ken Coleman, with you. This is The Ramsey Show. We'll be right back.

I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

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Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. The phone number for you to jump in is 888-825-5225, 888-825-5225.. We'll take your work, questions, your money, questions today.

And don't forget, your income is your greatest wealth building tool. And now more than ever, I'm telling you, if you're not making what you want to make, the opportunities are there. We want to help you spend that money wisely as well. 888-825-5225.. Let's go to Oklahoma City, Oklahoma, and that's where Jacob is.

Jacob, how can we help?

Marriage, in your case, is just the piece of paper. And I don't want the comfort of that to cause you to push that date even further, because that piece of paper is really important for you guys, protection wise. So just a little note there. So when you graduate, you're going to be making upwards of $200,000 to $240,000 combined. And you guys probably won't get married till the fall.

So the question is who's paying for the wedding and how much do you need to save up? That's the first question.

That's cool. Yeah. So I'm coming down from that high and I'm trying to think about all this stuff. And this stuff is obviously piled on top of me. where those type of questions.

I think I am obviously going to be paying for the wedding. I don't really know. I've heard tradition that the father's supposed to pay. But when I shook his hand and talked to him and got her blessing, I never even thought about that stuff. I was fully thinking that I'm going to pay for this wedding.

And husband to be, what will you chip in? And that way, you kind of, at the very least, you can know your own numbers. Now let's deal with this debt, because you've both got more than half a year to make some serious headway on paying off your debt. Are you earning anything while you're finishing up school?

. Go ahead. I'm sorry.

I mean, with that salary, it's possible that you can both get into this marriage and you both only have your student loans to go. So that's what I'd aim for. And of course, like Ken said, we're having that conversation with the dad, not you, but she is, about whether they're contributing or not to the wedding.

It's your rainy day. If something happens, it's only $1,000.. It's low on purpose. That means that as soon as you guys get out of school or anything beyond your basic payments and minimum payments, you both need to establish the $1,000.. You got it?

And then you take on your.

. Baby Step two is to take on your individual debts, smallest to largest. Baby Step three is, once you've paid off all debt, is to then accumulate three to six months of your living expenses. Baby Step four is now you're going to contribute 15.. You're saving 15% of your income to retirement.

Baby Step five is you're funding kids. college. Six, pay off the house. Seven, live and give like no one else. None of those are relevant to you right now.

We're going to give you the program. We're going to get you all connected here so that you guys can go through FPU on us. That's our wedding gift. Are you okay with that, Jade? I love it.

But that's where you got to be right now. I mean, right out of the gate, Jade, they got to each individually. tackle this until we come together, right?

as though you don't know what will happen because you don't.

I feel very generous.

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Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your money, in your work, and in your relationships. Alongside the fabulous, the incomparable Jade Warshaw, I'm Kent Coleman. Welcome aboard this hour. We're here to coach you up.

We're going to have some fun. We will shoot you straight along the way. The number to jump in is 888-825-5225, 888-825-5225.. Kevin in Reno, Nevada, starts this hour off. Kevin!

So I thought I would call and get some more information about it,

Whatever this path is, it's not a good path. But can I just make?

Yes, yeah, we don't have any debt, and we do have six months worth of cash. Just happened to have it. I didn't know those were baby steps, but now I do. So that's pretty sweet.

Yes. Okay, I'm just gonna pull this up, because I love doing this. So let's pretend, let's see, I'm pulling up an investment calculator, because what I want you to see is that this is a terrible investment. Fair enough? Yeah, absolutely.

Because I'm just trying to understand, give me one second, Ken, help. You're just going to tell a joke? You keep the conversation going.

we think it's a bad idea?

if something were to happen to you. It's not there to be what builds you wealth, and I'm about to prove that here. So you said that you've been investing $400 every month for six years. That's so much. Okay.

That, for me, there's a lot of ins and outs to that conversation. But just simplifying it, that's the most staggering piece of information that you're going to receive from this, is the fact that whatever growth you've accumulated is going to die with you.

No, no. This is going to be more fun. You're how old?

. Okay. He's 36.. Do $400 a month between age 36 to, let's call it- 66. 66.

So 30 years. I just want you to see, Kevin, why we really prefer this type of investing.

You're grossly off pace.

Okay. Which we just proved with the-. I mean, we just forecasted exactly what you did, the six years, and you're not even close.

Not to mention- Yeah.

And then I would say, from now on, I'm taking 15% of my gross monthly income, and I'm investing it in good growth stock, mutual funds. And what we teach here is a mix of four, growth, growth, and income, aggressive growth, and international. And you could do that. Listen, if you just said, hey, I don't care about that, I would even be happy if you just invested 15% into index funds. Anything.

but this is basically what I'm telling you. Okay. Because, rate of return wise, you're going to far outpace this. And if you're like, let me just try to play through a scenario that I think people care about, because I know people like to borrow against this money and blah, blah, blah. I would say, invest that money into retirement.

But if you're like, listen, I want access to it. And I want to invest my investments or something like that. You put in a brokerage account to where you can get to it. All I'm saying is anything that you're doing, anything that I'm saying is better than what you're doing. What you're doing is probably the worst possible way to invest your money in an insurance product.

And so, like I said-.

It's so cheap. And you're going to be covered. And remember, the whole point of this, ultimately, is that we're self-insuring. And so, if you're walking the baby steps, as we teach, by the time you're 50 or 60, you will have accumulated so much wealth because you're going to be investing from this point on 15% into retirement. You're not even going to need life insurance, because at that point, you can assume the risk.

Because remember, the whole point of that was to cover the risk. Now, you'll be wealthy enough to assume that risk on yourself. And so, this is how this works.

Does that make any sense? If it does, this is not the show for you. This is the Ramsey Show.

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Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. We're here for you, America. 888-825-5225..

If you're new to the program, we take your money questions. We take your work-related questions. We take your relationship questions, because they kind of all blend together. In fact, it's rare that we take a call like that where there's not some work component, some relationship component. So, we're here for you, America.

888-825-5225.

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This is the very job where you may be taking a $10 to $30 an hour pay cut. I don't consider that stable. We're talking about a wobbly table. at best. At least one of those legs is wobbling if you're potentially going to lose that kind of income.

Secondly, and I've said this a million times, benefits play to our safety gland. Obviously, everybody needs, and health insurance is obviously a tremendous value. However, when you start comparing insurance plans, I would always take the better job, meaning better pay, better environment. I enjoy the work and I've got a ladder for growth, which means financial growth. I'm going to take that better opportunity over the better healthcare plan and whatever else the benefits are.

Usually, it's just not a huge difference. I never give anybody advice to take a job on benefit packages alone, because, trust me, that's going to wear off pretty quickly. In this case, let's say you stay at this current job that you think is stable and I think is wobbly. You take a pay cut, but you love those benefits versus, let's go out and let's have a backup plan. When we get on a plane, the lovely flight attendants and folks get up there and they tell us about where we go in case of an emergency landing.

I want to have that same exit pattern laid out for myself. professionally. I'm telling you, I've always practiced that. I still practice that. In this case, if I knew this and I'm you, Dalton, Jade, I'm immediately going, okay, where does my skillset and experience allow me to potentially land?

Let me start looking for options so that I got options. Healthcare and the benefits usually take care of themselves. No, I would not stay, take a huge hit, which could be 50 grand. That's.

What's that called? Because in money, let's say, you have a piece, you invested in a job opportunity or a business or a property, and it's failing, but you keep pouring money into it. We call it sunk cost fallacy, because it's like, I've come this far. I may as well keep writing it out, even though all signs point to the fact that this sucks. What is it called in a career, when you feel the need to cling onto something that is sinking?

It's losing you money. It's not good.

I'm going to take a big pay cut and it's going to suck. Or I'm dealing with a toxic leader, or I've got gossipy coworkers and I hate going in, but I'm going to keep doing it. because the fact that I'm miserable doesn't matter, because at least I know what I'm up against and I know what I got to deal with and I got to bite a hold my nose. You pick the analogy versus going, I got to face my fears and step into the unknown of what else could be out there. And I leave one place that I'm miserable in to go to a place where I might be uncomfortable for a little while, but ultimately better off.

So I think the dynamic there is, what you've so expertly pointed out is our comfort factor. You've seen the motivational posters and who knows who said it, but life is on the other side of comfort and all that. And that's what's going on with. people will stay in a job like this with those sunk costs because they go, at least I know it. And you can see the fear in this question.

This person is rationalizing. This is an otherwise very sharp individual, this dude. And he's rationalizing, swallowing a $50,000 pay cut, rationalizing. Well, the benefits are good. Dalton, I'll bet you.

the benefits are good at other companies as well. And you don't take a $50,000 hit. So I think at the core of it, what do you think? I think it's fear of the unknown.

It's good. Yeah. Good's. the enemy of great. Yeah.

And it's like, it keeps you from getting to that best. It's like at Home Depot, where they have the good, the better, and the best quality, the paintbrush. And you're like, you go with the one that is, you know, it's not good quality, but you're like, well, it's not going to cost me much in the moment. So you go with that. Then you get home, you start painting and you're like,

I know, but I'm pointing out that you make a very good point here. Don't scrimp on the paint, scrimp on the wine. Is that what I'm hearing? I'm only learning from you.

That's what my pastor used to.

Men in black style. Well, here's the deal. It's over. I tend to lean always towards the better. Always.

. Here's where the analogy is.

Let's see here. Let's go. This is a quick one. The investing question from Brandy in New Orleans. Poor Brandy.

She had to sit there and listen to that last minute. Brandy, what's your question?

We're trying to figure out, are we going to.

. We have 8% taken out for our state pension plan. They take 8%. Are we taking 15% on top of the 8%? Are we doing 7% to meet the 8%?

Are we putting them in a 403B or are we putting in a Roth IRA?

Like a 401K, it's got some good investment options that you get to select?

Because they're taking 8% of your money, you don't get to choose with that pension and it doesn't have a great rate of return. So let's pretend that each of that for you guys counts, instead of it counting at 8%, count it about half and then do the rest, whatever's made up into your 403B. Make sure you're choosing a good mix, growth, growth, and income, aggressive growth, and international, and you should be set. So again, instead of counting it at 8%, count it at 4% and do the other 11 into that 403B.

Welcome back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. The phone number for you to jump in is 888-825-5225.. That's 888-825-5225..

Let's go to Cincinnati, Ohio, where Heaven awaits.

Heaven, how can we help? Yes. So, hi, how you doing? I mean, I'm talking to Heaven. I don't know that it gets much better than this professionally.

Now, I'm feeling scared and stuck. I really don't know. I don't want to keep depending on people to loan me money for me to pay back, and just stay broke. I'm just sick of constantly being in a cycle. So, if you could offer any help or anything, and I heard about the class, but I don't.

I want to ask you really quickly about your job and possibilities, before Jade takes over on the debt, because she can give you the plan. Okay. I'm just curious,

I work at a middle school. I'm an IA.

Or am I right about that? So, I have my associate's in psychology,

$779.

. You get two of those? I get two of those a month, and that's after taxes, and I have health insurance and whatnot. Okay. All right.

And I.

What are your opportunities? If you just think about what you have done, do you think about what is a better paying job, a path for you to where you are making $40,000, $50,000, $60,000, $70,000 a year? Have you thought through?

Yeah. So, here's the deal. And I have a juicing.

So, that's also going to be- All right. So, real quick,

And I'm going to tell you, you need to pursue that with the same abandon, that you need to pursue these baby steps that Jade's going to walk you through, because your ability to make more money right now, while living with mom, is huge. So, you've got to treat that as life-giving, like, I, have got to make more money. And if you can go, get something that will allow you to keep the IA job, and that's extra money, great. You hear me? But you have got to be crazy intense about making more money right now, and Jade's going to tell you what to do with it.

All right?

You're not going to be able to do too, too much until you get your income up, which is what Ken suggested. And I might also offer this little piece, which is, I want you to get your income up so that you can pay your debt off. I think that's really important. But I think the most important move that you're going to make in all of this, is moving out of your mom's house.

Because what you described to me was a cycle, and it sounds like a cycle that you're trying to break. And it's very, very hard to break a cycle when you're right, literally living in the midst of it. So it's quick. You know what I'm saying? Because you've got to deal with everybody else's mindsets too.

Because your mom has an opinion, you know, auntie comes over, she has an opinion, everybody's got an opinion. So I really want to get you in a place, financially, where you're able to remove yourself from that position. That's going to be so, so, so, so, so important. Because here's the thing, here's what I know. You start making some money, you start making some headway, and people see it.

Now you're the one who's got money. And now everybody's coming to you. And that just adds another layer of, all right, I got to tell these folks. now, I got to tell them, you know, I'm trying to do my thing. So just let that marinate somewhere in the back.

Your position as an IA, is it 40 hours a week, or do you have a good amount of extra time?

30 to 2.

30.

So you going over and picking up whatever it is, Instacart, I know folks who can make $1,000 in a weekend on Instacart, and that's not even including your afternoons after school. So I think that you can be double your income just by you picking up anything. Okay. Right. So that's what we're doing as we work towards this home healthcare idea.

You're 65,000 of debt. Can you tell me what kind of debt it is right quick?

pass, banks, but that's, it's the college and the car, that's most of it.

And that's about, that's about 700.

. I owe a bank about a thousand,

one bank, about a thousand, and a couple more banks about around that, much, like around 500.

What else?

I feel like I'm still, we're still missing a good chunk.

You got to come up with $2,000, any way you can, in any way that you can, that is legal. Cause. I want you out of this car payment, because $647 would be everything to you right now. Yeah. And, and, and you live close enough to work.

You get you a $2,000 car, or you walk, or you jog, or you get one of those razor scooters, but we're getting extreme. because, listen, Ken, when you have to break these cycles, you have to go into the extreme because all of that gravitational pull is trying, listen, that gravitational pull will break her ankles. So she might as well get on a razor scooter, but she's got to get free.

Welcome back America. You are joining the conversation about your life with you here on the Ramsey show. It's America's show, because we're talking about things that no other show talks about your money, your work, and your relationships all together. We want you to win. 888-825-5225 is the number.

The fabulous Jade Warshaw joins me. I'm Ken Coleman. I'm not fabulous. You're all right, Ken. But I'm here.

I'm all right. I'm all right. I'll take that. I'm all right. That's about as good as it gets.

I'll take it. I got three teens. I'm never right. I'm being told all the time. I'm cringe.

Oh, my daughter likes to tell me, dad, you're so cringe. Oh man. Yeah. I don't know what any of that means. Although every once in a while, you teach me a word here on the show that I take home and they kind of look at me like, where did he come up with that?

And I don't reveal my source. Tell your boys next time that you guys.

Stand on business.

James, I'll mess that up for sure. It'll come out completely different than that, but I'll try. Speaking of standing on business, Kathy is joining us. I'm confusing millions of people, uh, as we speak. And I, the great part is, I have no idea what it means.

Kathy's joining us in Milwaukee. Kathy,

I have a question on baby step three, getting my larger emergency fund. Okay. So we've, me and my husband are both on board. We paid off all of our debt and we started sinking funds. Do I include the sinking funds, like the balance of those in my three to six months?

No, because the sinking funds are going.

HVAC. HVAC. Right. And so sinking funds really doesn't fall into that. Sinking funds is just a way for us to save separate money.

So, in essence, in essence, you kind of have two savings accounts. You've got your emergency fund and then you've got separate money that you're saving up for things that you just want to do in life.

Okay. So even if it's.

So that would not be emergency fund. That would be separate savings. Okay. Does that kind of help you? So unexpected, completely necessary and urgent timeframe are the three boxes that must be ticked.

Thanks for calling the show. Appreciate it. Really fun. Let's go to Megan now in Salt Lake City, Utah. Megan, how can we help?

Ken, Jade, I can't believe I'm talking to you. This is awesome. We feel the same way about you. We really do. We can't believe we're talking.

So I have a question regarding how to manage and stay within the 25% of my take-home pay when my rent keeps going up. every year. It was 25% when I moved in, and now it has been increased to 28%. And I'm trying to save for a house. I'm currently in Baby Step 4, but I don't know if it would be considered 3B because I have a fully funded emergency fund, but I'm not doing 15% in retirement because I'm trying to save for a.

So there's a couple of.

It's kind of got you worried, especially with you trying to do this down payment. Do you see a course to where you're able to up your income?

Yes. I'm currently working a second job and I get a raise every year. that's around 5% to 7%. Great. And I won't get that raise until August, but I'm just kind of worried because I want to stay within the guidelines.

And I think David said you could go as high as 30%, but 25%.

I mean, I get it.

You're trying to accomplish a goal. You want every cent of that money to go towards a goal. But one of the realities of renting is you do have to deal with rent increases. And in this case, unless you say to me, Jade, and I know of a place down the street where I can rent for $850, my lease is up in May and I can go do it. Then I'm like, yes, go, do it.

So you're going to have to kind of decide a couple of factors. You're going to think to yourself, okay, how long, realistically, is it going to take me to save for this down payment? And I don't know how long you've been living in this apartment, but you can also look at historically, how often and how much have they raised the rent? If you've been living there for 10 years and they never raised the rent and this was the first time, then I'd probably be willing to wait it out a little bit. But if you're seeing every single year it's going up $100, $150 and you're like, listen, Jade, I don't know if I want to wait it out.

My term is about to be, or my lease is about to be up. Then you've got options there. You're not locked in, but I don't, to Ken's point, I don't want you to over freak out over the 150 unless it really starts to become a problem, because here's where I'm looking. I'm kind of looking long-term around the horizon, but on baby step four, if that, if this is going to take you more than two years to save for your down payment, after two years, I'm going to tell you, hey, listen, you need to start putting something aside, even if it's 5% or up to your match, because I don't want you pushing off retirement any longer than maybe a two, three year window to save for this down payment.

Yes. And I am doing a 5% match on my 401k with my employer. Okay. And because I put retirement off for way too long when I was in baby step two. Okay.

So I don't really want to stop retirement. And you don't have to. Megan? I was just wanting to, yes, Ken.

I'm kind of using the spirit animal, George Campbell, because if he were sitting here with me, he would be recommending that you have a roommate for a season. You want to get your own home anyway. And if you could get a roommate now, all of a sudden, this is a game changer for you. And especially if we can go 50, 50.. I love it.

Come on, Ken. I'd consider it. I really would.

That's what I'm trying to avoid. Well, you're okay. I don't want to move.

If you can find a cheaper place, like Jade said, great. But right now, I think more income is your play. This has not gone up really crazy. You're going to get maybe a five to 7% bump on your salary. Watch your budget, the extra income between your discipline and the extra income.

You're going to be okay. But don't freak out.

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically in your money, in your work, and in your relationships. 888-825-5225 is the phone number. 888-825-5225.. You're one call away from some hope.