Brought to you by the EveryDollar app, start budgeting for free today. Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm Dave Ramsey, your host, J. Washall, Ramsey Personality, number one best selling author is my co-host today. The phone number is triple eight, eight, two, five, five, two, two, five. The call is free, and some say the advice is worth exactly what you pay for it. Nick is with us in Philadelphia. Hey Nick, what's up? Hey Dave, I'm just out in a couple questions concerning how to get out of debt. Okay. So I am a sanitation worker. I've been working 75,000 a year. I just got married about two months ago. Congratulations. Thank you. Our combined is she making there from 20 to 25, so close to around 95,000. Okay. I am currently in $41,000 in debt across personal loans, credit cards, and a car loan. Okay. How much of it's car? Car, I'm halfway paying off my car. It's about 15, 15 and a half almost. Okay. And what's the rest of it again? 21 of it is personal loans and five of it is credit cards. Okay. What kind of personal loans just at the bank? So when we got when she got pregnant a couple of years ago, it was a really quick thing. We had to move out quickly, and I had to cover the maternity leave and all that stuff. So I took out a quick little six-rain loan, so I could be secure. And then we moved into our apartment and just have the delay to help her. And then I just what I started doing is I just started racking up personal loans because I was stupid with my money. And would get credit card that need to take out another one, another one. Then I took out one to get her. So what happened the other day that stopped your friend? And you said, I got a call Dave and Jade and we got to change what happened? I just live in paycheck to paycheck and it's something ain't working. Yeah. And it doesn't make sense to me. I just should not be having it. You're a good man. You're a good man. Thank you for calling. You are while we're here, brother. Okay. So how old is the baby now, too? She'll be two on Friday. What does your wife do and why does she not work full time? She works four days a week. She is a. Makes a dollar an hour. Wow. Yeah. That's a lot of time working and not a whole lot of money being made. What's what's the type of work? She's a dog trainer. She makes. It's a baseball commission. She can make anywhere between 20 to 25. And she's not working as much as you said. I almost wonder if she could dog train on her own and make more money and set her own clients and set her own pay. Because she'd probably. Here's the thing. She'd probably do more. She'd probably do more money in less time doing that freelance. And she could probably make that a side hustle and get another job. Yeah. I mean, I'm also looking to get back into. I also. I don't know if tax tariffs are the. I'm a delivery driver, so I work on get cash under the books. Well, I haven't been doing that for the first two months because I had issues in the summertime, so they let me go for a couple months. Why are they paying you off the books? Why can't you have a job where you're paid above board? I don't know. I don't know. I need people to shop and they're very delivered at. They've always paid under the books. Okay. All right. All right. So here. One part of the equation, the reason we're poking at that, is the income part. The other part is the out-go part. Okay. So we're going to. We're going to get up above this problem because what happens is when you get down in the weeds, you get lost. And it becomes overwhelming and really, really scary and that end chaotic. And that's kind of the way you were feeling right before you called us. So what I want to do is I want to get in the drone and I want to get up above the weeds. I want to get up above the situation and say, okay, there's two parts, income and out-go. You and your wife sit down the night and start talking seriously about what we can do to add to your good $75,000 job that is reasonable with a two-year-old in the house. What can she do to double, triple, quadruple her income? What kind of side hustle can you have that has integrity to it and that doesn't get you in some kind of a bind later? And that is steady, sounds like these guys come and go. And then on the out-go side, we're just going to sit down and say, all right, gang, we're two grown-ups with a baby. Game on. Because that's why you called Game on. And we're going to say beans and rice, rice and beans. No eating out unless you can't see the inside of a restaurant unless you work there. Do you have a budget, Nick? No, not really. Okay, though there we go. Let's start with that. We need that. We're going to start with every dollar budget, Jade. Yeah, we'll give it to you. We'll make sure the phone screener picks up and gives you that. But here's the thing, you've got to do it tonight with your wife. You both sit down, you fill in the numbers, you make sure you're both in agreement on how we're going to spend our money. And that's it. That's how you do this going forward. And the biggest number to look for when you plug in all your numbers, Nick, because the goal is to go through and think of all the things you might spend money on. And at the top, it's either going to be in the red or it's going to be in the green. Whatever is in the green is your extra margin. That's what goes to your smallest debt. Okay, after you make minimum payments on everything, whatever's green, that number goes towards the smallest debt. We're going to do them smallest to largest. And that's how you guys are going to work this out. Yeah, let's do that. I actually just worked away a good like five six hundred dollars of credit card debt. Okay, good. Do you have any money saved? We have the remaining of our wedding. Okay, which is how much? I want to say around five thousand. Okay, good to know. So here's what I would do. Get rid of all your credit cards. Tonight, pay them all off and chop them up. That's your wedding gift. Oh, I like that credit card debt free. And if I gave you a wedding gift and you were a sharp young couple and you had a new baby, and you told me that that's what you did with your wedding money, I would be very proud of you. That's what I want to do with it. Hang on. I think you just blew his mind. We're going to put you to action, man. What you've been doing sitting on the sidelines and letting all this crap happen to you. And now you're about to happen to it. That's what's going to get called proactive. And it's one of the seven habits of highly effective people, according to Mr. Covey, Dr. Stephen Covey. And so check it out. You happen to things. It's still things happening to you. Most people in America, Nick, are right where you are right now broke, chaotic, disorganized because all these banks and car companies are more than willing to happen to you. Their job is to screw you and they are better at your job at their job of screwing you than you are keeping up from having. So not today, today it changes. Nick's a dad, Nick's a husband, and we're going to get on it. We're going to get grown up land, no eating out, no vacations, no buying nothing until we get this debt cleaned up because if you didn't have any payments and you had two good solid jobs, y'all be making some serious money. And that's where you're headed. You're going to be in a position. Think about what to be like, Nick, if you had no payments. Holy, that's what's going to happen if you do what we teach you to do. We're going to show you how. It's possible. Hang on. We'll pick up and get you signed up for every dollar. It's our gift to you. Oh, there's another wedding gift. 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4282 to get your family protected with term life insurance. That zander dot com or 800 356 4282. Candy is with us in Philadelphia. Yeah, hi, Candy. How are you? Hi, good. Thank you for taking my call. Sure. What's up? My husband, I are 53. We have no debt. We have a fully funded six month emergency fund. Our investments were contributing the 15% most is in a traditional and some is in the 401(k) through his work, which is a traditional way to go. We have a house. Yeah, we have a house fund. It's almost 250,000 a year ago we sold our home that we raised for kids and we're basically empty nesters. We decided to rent for the past year just if you were our youngest ended up, but we're looking to move to Northern Virginia, which is a per se area. At this point, I'm just concerned about being my age and possible. I'm going to have to take a somewhat of a mortgage, obviously, 15 year. How do you feel about like I'm hoping it would only be about 200 or so? What's your household income? We're a little 205. How much of the 250, didn't you say you had 250,000 saved? Yeah, she going to Northern Virginia and you're thinking you're going to spend 450? Yeah, I know. Is that what you said? I know it's probably nearly 40. No, I mean, 450 in Northern Virginia is not much. Yeah, that's not. So you would have to look on the outskirts. Yeah, we're looking to put out down. Okay, yeah. 250 down, take out a 200 mortgage. Is that the plan? That's what I want to ask you. Yeah, and your household income is what? I was hoping 205. Okay, and you're how old? We are 53. Okay, I'm worried about being behind in retirement investments. That's my concern right now. How much is in the 401k's? The traditional has 585,000 and the 401k has about 24. Are they both traditional? So should I open or lost with the extra that I put in? If your company offers a Roth 401k, I would switch my contributions to that. Did you say 53 or 63 years old? With the traditional? How old are you? 53 or 63? Oh, we're 63, five. Sorry, five three. My hearing, I'm sorry. All right, so 53, you got plenty of time. Okay, so you've got 600,000 bucks plus, it'll be a million to when you're 60, it'll be 2.4, when you're 70, if you're invested in good mutual funds, and that's if you don't add anything to it. So you're fine on retirement, you're doing fine. You keep adding to it, you're going to millions of dollars at retirement, and you're going to have the house paid off. You're going to pay it off how quickly if you take out 200, making 200. You guys have done a great job of diligence and excellence so far. So I'm going to guess four or five years, you got this thing paid off, does that sound right? I, yeah, I could easily put a lot towards it, yeah. Easily be able to double the payment every month if you wanted to or more. Yeah, totally. Yeah, okay. It doesn't, you're not setting yourself back in net worth. You're increasing your net worth because the house is going to go up in value and the debt's going to go down. So if you took out a $200,000 loan on a car and the debt went down slightly when the car went down in half, then you'd be setting yourself back. But a house is going up in value. So you're not setting yourself back. What you are setting yourself back in is cash flow because you're going to have to dump someone this mortgage to get rid of it. But that's not setting yourself back. It's going to actually cause you to accelerate faster, especially when you get it paid off. I'll okay. Yeah, I would do this, I would do this plan. I'd put it on a 15 year fixed rate or a 10 year fixed rate, one of the two and I'd pay it off in four or five. Totally, totally reasonable. Yeah, absolutely. I think I'd do that. Yeah, you're going to be fine, Candy. That's awesome. The good news is with people like you that if you just are smart enough to ask the question, you're already on the way. Right. And you're already dialed in. You've got everything else dialed in perfectly the way we teach. Okay, great. 15% going into and 15% going into retirement today. 250 sitting in an investment account from the last house is sold. You've got an emergency fund in addition to that. You've got no consumer debt, no debt at all today. And you're going to make this move to be with family. This is why you work to be near family. Absolutely. Well done. Well done. And then the mandate is that that little turkey has grandkids. If you move to Northern Virginia for that little turkey, that little turkey needs to have grandkids. That's your job, little turkey. The number of my friends and my age group that are following kids, oh, wait a minute, they're following grandkids around the country moving from places they've lived for 40 years is amazing to me. You'd probably do the same thing if you had to. Yeah, Sharon would and then I'd have to go with her. That's how it works. They've just done. Dave loves Tennessee. That's all right. I bless America. He lodges in Indiana. Hey Elijah, what's up? Hey, Dave, how you doing? Better than I deserve. How can we help? Yeah, so my boss put me on the Ramsey plan just a few weeks ago. So I've been reading the books. He's an apple, that good stuff. But just the other day, I went back in using my credit card. So I can explain why I did that. Forgive me, Father, I've sinned indeed. Yeah, there was some pain on my sink and I didn't want to gouge the surface with a metal scraper. So I found my credit card actually works really well. That's funny. OK, well played, well played. You got us, OK, you're real to San, we're hooked. Yeah, there was some frost on the windshield. All right, well, so I do have a question. And it's about money gifts. So in a situation where a friend or a family member gifts you money for like a specific purpose, should you just use the money for that specific purpose or is it kind of disrespectful or dishonorable to instead just throw that money at debt and try and get out of baby step two? I don't think it's dishonorable or disrespectful. It'd be one thing if they said, here's some money for you to, we do a family vacation and here's the money for you to go on the vacation with us, right? That feels a little different than just happy birthday. Here's a couple hundred or however much money cash. How much was the gift and what was it for and who was it? So my fiancee's parents give you this $5,000 to help cover wedding costs. Oh, OK. So they're paying for the wedding. In part, yeah. They wanted to just see how much were you planning on spending on the wedding? We had a $10,000, $15,000 sort of window that we wanted to stay in. And that's more than $5,000, so where's the problem? The problem is I've sort of paid for a lot of things myself. And if we could use that money to make the wedding like a little nicer-- Oh, wait a minute, wait a minute. So the wedding budget, you had already covered some of it and they refunded you. Oh, that's a good way to look at it. I guess that's one way to look at it, yeah. Well, if we had a $15,000 wedding budget and they put in $5, and I've already paid $12,000, I'm pulling my $2,000 out. It's a refund. Yeah. I mean, that's fine. OK. Nothing wrong with that one, all right? Did they say-- did they give it saying-- You have to spend this on top of what you've already done? Was that specific? Sorry. Did they say $10,000 to $15,000 is not enough? We think you need a nicer wedding. Here's $5,000 more. Well, they just love helping and being involved with the wedding, and they felt like they weren't doing enough. So they're just like, you're like, have some more money. Oh. Oh, wait a minute, wait a minute. That sounds like code for your fiance was whining that she wanted something she didn't have yet in the wedding. So mommy gave her some money. We're cutting corners, yeah. So what does your fiance think about this money? Every wedding. Otherwise, they're $400 grand. Yeah, when you said to your fiance, hey, I'd like to use this money to pay off some debt. What was her response to that? I haven't asked her yet. Oh, no. OK. Let's pretend this call never happened. All right, let's go through a couple of possible scenarios, and then you go work it out in the real world. OK. Scenario number one is that you guys are in agreement. We're going to spend $15,000, and you've already prepaid some of it, and you're going to refund yourself for the $5,000. That's perfectly fine. I don't think that's what happened. Scenario number two is your fiance was whining to her mother because she wanted a better XYZ for the wedding. So her mother said, oh, I'll give you some money to do that. well now you're gonna. to deal with your fiance, not your mother-in-law, you better get some clarity on communication your brother. This show is sponsored by BetterHelp. Hey, my friends at BetterHelp just released their annual state of stigma report. It's full of all sorts of data about why so many people avoid getting the help they need for their mental and emotional health challenges. And here's a data point that stood out to me, more than three out of four Americans reported anxiety or depression symptoms just within the last few weeks. If that's you and you're carrying stress, anxiety or depression or symptoms of anxiety or depression, just talking to someone can help you more than you realize. I want you to contact my friends at BetterHelp. BetterHelp is an online therapy platform that matches you with one of their 30,000 plus licensed therapists based on your goals and preferences. 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[email protected]/Ramsey. Hi. How are you? I'm Dave. Good to meet you. Welcome from Indianapolis. What's up, Brienne? Yeah. So I just had a quick question. A little bit of a background to my question is, I am a 20 year old college student that currently has no debt. I have almost a $1,500 emergency fund. And I am some of the goals trying to get better at budgeting. My question is, what advice do you have for somebody that is looking for somebody who is on the same track for a life partner? Is it too much to ask a guy to have an emergency fund to have no unnecessary debt to be able to budget? And then how do I explain that to people who think I'm just being picky? What all I want to do is be able to be smart financially. I love this question. I love that you're thinking about this. Is there somebody that you're seeing now or there's nobody, there's nobody in the picture right now? Well, about three months ago, I just ended a relationship that was about idea emotionally, mentally and financially. Okay. So. The restructure. Uh-huh. What I'd be looking for more so than dollar amounts, I'd be looking for someone who has the same financial philosophy as me and is working towards the same goals as me. And we might be at different points along that path and that's okay. But if we see eye to eye on money and just the basic philosophy of money and debt and spending and wealth, that's a really, really good sign. That being said, I'm not interviewing every guy I go on a date with. I'm not interviewing them on the first date, right? Because there's also opportunity for people to evolve. And so I'm looking for the things that show this person is interested in personal growth. This person is interested in growing and growing and getting better, not necessarily changing towards me, but getting better. Mm-hmm. Yeah, because the relationship I just got out of, there was no, no sense of knowing how to do a budget unnecessary purchases for a vehicle and just multiple, I don't know what we call red flags. Sure. Yeah. Yeah. And that's fine. Yeah. Yeah. That's too much like is it unrealistic to have some financial expectations or like a financial expectation? I don't know. I don't know. I don't know. I don't know. Financial expectations are the question. It is it is honorable. It's not what we would recommend that you say, okay, you have to have $10,000 in emergency funding, be doing a monthly budget, let me see your budget or you're not, or you're not available. No, that's not, that you're not eligible. No, that's not what I would say. I would not tell my own kids to do that and I did not. And I'm freaking Dave Ramsey, okay. So my kids were taught to look for someone like Jade said that's into personal growth, they have character, they have some maturity. Because a lot of times financial irresponsibility, just complete irresponsibility is just tied to immaturity. Mm-hmm. It's like a four year old in the cereal aisle, I'm keeping my four year old grandson taking him to the fair and he has a complete meltdown if I don't give him what he wants. That did not happen by the way, but it would be like the dating that person, right? And so give me what I want. I want it. I want it. And I get it. I'm going to go into debt and I'll get whatever I want. And I don't need to. I'm, you know, and you just hear this kind of pattern in their emotional or lack and their emotional maturity or lack of it. And so maybe they don't have an emergency fund. Maybe they didn't come from the exact same background. You came from, but they're going somewhere and you can see that and you believe that. That's what I'm looking for more than, let me see your budget and let me see the balance on your emergency fund account. Mm-hmm. I agree. That's very good. And because you can get a budget and an emergency fund in about 20 minutes. That's right. And I also want to say this because this is just part of I think dating people and meeting that person is you, you have to go on dates to get to know that person. You're not going to be able to avoid getting to know someone and liking someone and then maybe they don't meet the standards and so there's a little bit of heartbreak. Sometimes you can't avoid that and that's just part of finding that person. So this is not something that you can figure out the prerequisite and save yourself from it on the first date if that makes sense. You have to go through the process a little bit. And that's just. Now, it's been so long to go out for God. So. You guys. Steve, I'm not going to, I'm not going to, no, really, I mean, I've been married 45 years. All I remember is I chased her till she caught me. That's all I remember. So. Oh my gosh, Tommy's in Dallas. What's up, Tommy? How are you? Very good. Very good. Thank you. How can we help? I have a question on the 84 year old man, I'm still working. I have an office that I have other people run for me so I don't have to do a lot of work. But I have recently gone to the divorce and I'm looking at trying to recover. And I have, I have a good income and I have some debt. And my question is, which comes first should I play off the debt and then stack the money away for retirement or how much debt do you have? I have 20, 20,000 dollars, 2760 dollars in debt. And what is your income? 278, 278, 9.4. It seems like that you could pay off that 20,000 fairly quickly, couldn't you? I could. I, I, you probably have the money in the account right now to pay it off. I do. Okay. So if you pay, if you pay, if it's me and I paid it off, it would give me peace. I'm solving for peace. Yes. I mean, I don't think we're working with a 30 year time horizon here that you're going to go build wealth. You're 85. No. I'm 65. I don't think I'm working with a 30 year time horizon, all right? So, you know, I'm making decisions today on what give me peace or what influences and helps my family tree that I want to change. So long term with the kids, grandkids, that kind of stuff. So how long were you married? 20 years. Wow. Oh, man. Oh, man. So you got married at 65 to that lady and at 85, y'all get divorced. That's wild, man. Yes. What's in your nest egg? I'm not much, um, over that 300,000. That's it? Mm-hmm. How much do you have in savings? Oh, 60. Okay. All right. Well, what was the 20,000 in debt? That was a credit card for 3600, a car to 13,000 and a personal loan for 4,100, you know. Wow. So when you are not going into this office at all, will you continue to rent it? Is it something that you still own that you'll continue to make income off of after you retire? I continue. I continue to make income as long as I'm in picture as when I step away, walk away, and come in. Okay. Well, I'm hanging on as long as I can. Yeah. Well, what I would do then is hang on as long as I can, I'd write a check today and pay off the 20,000 and I would not borrow another dime the rest of my life. And then I would start setting some money aside, adding to that 100, which gives me the ability to step away. The bigger that number, that 100 number becomes, the easier it is to step away when you want to. Yeah. That office rental, is that a building that you own that you can sell? He's going into the business. - Okay. - It's a business, I own a business. - Yeah.
it goes to the office, it's going to the business. - That's it. - Going to the business, yeah. All right. And so yeah, that's what I would do. I would build the emergency fund. And then, you know, and she makes a point, when you step away, is there not some way to sell your ownership rights at that point? Also, to someone, they oughta be worth something if you're making 270,000 out of it. So I don't know how you're structured or what you've got there. But that's a good question to go with it. First thing I do is pay off the debt. Second thing I do is start stacking cash in good, in a good investment, and adding to that 100, while you're making 270, that's pretty easy to do. And third thing I do is assess if there's anything in that business that, and we don't know that, 'cause we weren't talking to you long enough, that you can sell and make money on. (upbeat music) (upbeat music) - As a dad of young kids, I'm starting to think a lot more about the world to growing up in and how I'll help them make sense of it as they get older. And that's why I like WorldWatch, a video new service for pre-teens and teens. Because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days, that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. WorldWatch's 10 minute videos help young people understand what's happening in the world through a Christian worldview without all the outrage, negativity, and noise that is everywhere these days. The reporting is factual, engaging, and designed specifically for pre-teens and teens. And WorldWatch creates opportunities for something every family needs more of, meaningful conversations. Instead of just reacting to headlines, kids learn how to think about what's happening in the world and parents get a chance to keep those conversations going at home. Because when my kids are old enough, I want them informed, not overwhelmed. And right now, you can get a 30 day free trial. Just go to worldwatch.news/ramsie or use promo code Ramsey to get started. That's worldwatch.news/ramsie. (upbeat music) If you're sick and tired of being sick and tired, and you're ready to get off the rap wheel, don't be a rat in the wheel, that's normal. And there's only one way to do it when it comes to money, and that's actually tell your money what to do instead of wondering where it went. That's called a budget. And the best way to do that is with every dollar. Now this is not simply a budget though. The budget's just part of it. Get you started on working the entire Ramsey plan. And then as you work the Ramsey plan, the every dollar app's gonna teach you how to walk those baby steps, the shortest distance between where you are and being a millionaire, a dead free millionaire, by the way. In just 15 minutes, you're gonna find thousands and hidden margin. You're gonna feel like you got a raise. Don't be normal, normal sucks. Start your every dollar app for free in the app store or Google Play. Skylar is in Richmond, Virginia. Hey Skylar, what's up? - Hey, how's it going, man? - Better than I deserve, how can I help? - Yes sir, I am 19 years old. I have an eight month old daughter and a fiance. I'm making about 10 to 11,000 a month consistently for the last eight months. - Doing what? - What I'm asking for you today is pressure washing and insuring when they're cleaning. - Wow, buy yourself. - Yes sir, pull it by myself. I thought about hiring technicians. I'm trying to go as long as I can without hiring people. But my question for you is how do I get out of debt at 19? With the money I'm making, my problem is I don't feel like we're seeing the money that I'm bringing in. I have about $58,000 in debt. That is from two cars, $600 in credit cards and a $3,500 personal loan. - Okay, it's part of the reason you're not seeing the money you're bringing in because you're not subtracting expenses out of what people are paying you. I mean, do you have it separated in the right ways? - Yes man, I think the problem is not a budget. I watch you guys a lot and I've been talking a lot to the fiancee. We are on a complete scattered budget. - Okay. - I know what the bills are and then it's constantly, going to Walmart, buying this, buying that, eating out seven times a week. - Her or both of you? - Both of us. - Okay. - Well, let's stop for a second. And let's make sure we've got some basic structures in place that statistically tell us you have a higher probability of winning. You have a baby, you're 19, and you have a fiance. When is the wedding scheduled? - The wedding is scheduled at the end of this year and we're not looking to spend a lot of money on the wedding. Honestly, I think what she wants to do is just go to the courthouse, get married like that. I don't maybe have a little get together because-- - How about next week? - If it's a courthouse, how can we do it now? - Next week. - That sounds wonderful. - Statistically, she and you have a higher probability of your marriage working, your relationship working, and your wealth building working, and your career is taking off as a married couple than you do is too shacking up, thinking there's a courthouse five months in the future. Okay, so I'm just giving you the data points. And so if you were my little brother, that's what I would tell you to do first. This weekend, we're having a wedding and a get together. Okay, now, then let's move on. With your business, you are kicking butt 'cause you are not afraid of hard work and you're showing up on time and you're pricing yourself reasonably, I know all of this 'cause you're making freaking $120,000, $130,000 a year as a pressure washer, buy your freaking self. You're incredible. - Way to go. - Very proud of you. - It's a lot easier to wake up about eight o'clock. - You just get it, you got it. Somebody taught you how to work, young man, and I'm proud of whoever that was. You are a good young man, this kid has a good dad, and you're gonna have a good future. All right, now, here's how we run a business. First thing is if you do have a separate checking account for the business. - No sir, my dad's only done, he just started doing that each half. - Yeah, you need to do that today. Go down to the bank. You don't have to have anything except your social security number. It's called a DBA account, a doing business as account. It's a Skylar so and so, DBA doing business as Skylar's pressure washing or whatever the name of your company is. It's all it's gotta be, okay. Then here's how the math works and it's gonna help you get organized. 100% not a dime less of the money that you get from a customer for doing a job goes into only the business account. Got it? - Got it, not what about? - Just a minute, just a minute. Let me finish, I'll walk you through it and then you're gonna ask, okay? Then the second thing is nothing comes out of the business account except you and the business expenses. You don't buy groceries or lights or car payments out of the business account. I'm gonna get there in a minute, okay? So what expenses do you have at the pressure washing company? You have gasoline, you have to buy for your pressure washer and your truck that pulls it, right? - Yes sir. - What other expenses do you have? - Chemicals, you know, like mop squeegees. - Right, right. You write a check for those or use the business debit card for those. You don't buy anything else out of the account. So in business, your revenue minus your expenses equals profit. Follow me? - Yes sir, profit this month was nine times. - Good, perfect. Now when you take, if you wanna leave a little bit in there for next month's expenses, that's fine. So when we take $8,500 out of that account or $8,000 out of that account, we leave a thousand bucks or something in there. We don't want too much in that account so enough in there to run the business. And we take $8,000 home, we write a check to Skylar that he's gonna deposit in his personal account. Oh wait, taxes have to come out. And taxes on self-employed business, your size are about a fourth of your net profit. So on $8,000, that's gonna be $2,000. So you write a $6,000 check you put in your personal account and a $2,000 check you said in a savings account for your quarterly estimates. Remember this and go back and watch it on YouTube. Your quarterly estimates have to be filed on this and you have to file and pay your income taxes quarterly and they're gonna be about 25% of your profit. So now you're not gonna get behind with stinkin' IRS and mess up this whole thing. Now I got $6,000 in my account to now start working on $58,000 worth of debt. Now we sit down and say, all right, I got a budget this month of $6,000 and we put that in every dollar. - Yeah, I think that was your problem having one account you and your fiance were seeing, oh my gosh, there's $12,000 in here. - We can eat out if we want. - Yeah, and we can do whatever we want. - We can't eat out unless you sell both cars. - Uh-huh. And now that Dave has separated that for you, I think you guys are gonna have a more realistic approach that combined with every dollar. Now, I just wanna know, you said you have two cars. we might be able to.
clear some of this out really fast. What are the cars worth? - Yes, I have a truck that's really used for the business. Not being smart, I was 18 when I bought it. Not being smart, I saw it at the lot, saw it on the papers, paid 32 for it. And the Kellyview book is 16.5 and it has a salvaged title. Yes. - Okay, what about the other one? - The other is her car. It's a little bulk to our repair 24, it's worth 20. - Okay. - That's a lot of cars, you mean for what you're earning, you're right on the line, but it sounds like you're interested in being debt-free, so I'd work on either knocking these out or selling off at least one of them. - Yeah, I'd get them paid off very, very quickly. Here's the good news. You guys aren't used to making this kind of money. So quit spending it. You know, you're just spending like you're in Congress, man. So your dad's right, get your every dollar budget out, write it down, put everything down, and dude, you're way too smart to be acting this way, all right? And so you're way too good at the other parts of this. So we give every dollar a name, $6,000 at the top. Every dollar has an assignment and don't go out to eat again. She gets to cook. - My last question is, should I tackle every extra dollar on payments or is that it's by the bullet and get rid of the truck of the car? - You might get rid of the car, but let's just attack the debt for a month or two and see how it feels. After fighting it and fighting it and not going out to eat and not going on vacation and not doing anything except paying off debt 'cause you've made a mess that you can clean up fast if you lean into it, but if you screw around with it, you're gonna be looking like this when you're 35. Then you don't wanna do that. - The good news is for your truck, since it is your business truck, you could use your business money to pay it off. - Nah, no, I would just pay it off out of it. It's a person I sign for personally. It's just started this business, it's not a, yeah, yeah. - I just knock it out, let's just knock it out. It's not a, okay, you can't, there's nothing you can ride off on it anyway at this stage except maybe depreciate it and that might be a nightmare. So, no, let's just lean into this thing and take $6,000, $7,000, $8,000 a month after taxes and let's attack the $58,000, how fast can that be gone? Crap, man, six or eight months, you're done. But you live on nothing, dude. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too much time chasing information instead of making decisions. That's why we got NetSuite. NetSuite brings your financials, inventory, CRM, and more together in one place. More than 44,000 businesses run on NetSuite, including Ramsey. And now they're taking the next step with NetSuite next, making it easier to put AI to work across your entire business. NetSuite next helps you make the most of your time, automating routine work like forecasting demand and following up on overdue accounts. With NetSuite next, AI is built into everything you do. So you can ask it questions, just like when you're talking to a member of your team. And right now, you can try NetSuite next for free. If your revenue is at least seven figures, go to NetSuite.ai/ramsey. That's NetSuite.ai/ramsey. (upbeat music) - Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. Jadwashaw Ramsey personality, best selling author, number one best selling author is my co-host today. Alice is with us in Raleigh, North Carolina. Hi, Alice, how are you? - I'm good, how are you? - Better than I deserve, what's up? - First of all, I can't believe that I'm talking to you guys right now, and I am so anxious. So if I sound completely dumb, please forgive me. You'll be fine, we've never lost a patient. - Okay, okay, so my question is, how do you get over the fear of not being ready, financially ready to start a family? - Okay, tell me what that means, you're not financially ready to start a family. - Okay, so my husband and I are in a little bit of debt. We've paid off a lot of our debt, and I'm very proud of us so far, but we still have funds to work on. We have a $20,000 student loan that's mine, and then we have a $45,000 student loan that's my husband, but he's about six months away from the public student loan forgiveness program, so right now we're kind of just paying the minimum monthly payment on that and hoping that forgiveness comes since we're so close to the end. And then the only other debt that we have is our house and our mortgage. - How much have you paid off so far? - Of our student loans? - No, you said you paid off a bunch and you're proud of that. What did you pay off and how much? - We paid off our credit cards, that was about 6,000, and then we paid off both of our cards. I lost my mom last year, and I got some inheritance money, and we were able to pay like $50,000 worth of car payments off, and yeah, that felt really good to have that way. - So what's your household income? It's about $110,000. - So if you make $110,000 and you have a 20 and a 45,000 dollar student loan, why can't you not have kids? - Because I just feel like there's so many things that I would want to do if I became a mom and like, - Like standing with the five. Well, I would love to stay at home, but I just know that that option is not possible. - I think that's where we, I think that's the first step in this is clarifying what that means to you, and having a really clear picture of, if I want to have kids, this is the way I want it to look, and solving for that. - So it's not the, yeah, she's exactly right, because you're not, um. - It's not the debt, the debt's not the problem. - It's not the debt, and it's not the kid. It's what you want to do because there's a kid. - Yeah, and what's the income breakdown? I think I heard you say you make $110,000, what do you make and what does he make? - We both make around $55,000, so it's pretty split down the middle. - So you already have a mortgage, right? I think I heard that. - Yeah, so our mortgage with taxes, insurance, and everything is like $2,200 a month. - All right, so yeah, that's the game you've got to play is, if I want to have a child, I want to stay at home. Now I've got to run out the budget on $55,000. - Or if I don't want to stay at home and I want to do other things, associated with the kid, maybe it's the other things that are brought, but the problem is not the kid. - Right, my biggest concern is like, I want to contribute to a $5,29 plan and I don't want it. - We'll get out of that, finish getting out of debt and then do it. - Yeah, we'll try and do it. - Well, I mean, you'd have 20 years to work on that. The kid's just born, the kid's not even born yet, so. - Right, right. It's just, I know like, daycare and things like that, like it's such a common thing. - Here's what you got to do. - Oh, it's good, they're for people, and so I'm just like, I don't know. - You've got to run a foe, but you've got to run a foe budget. Running a budget and seeing the actual numbers is gonna give you real answers to your questions. Right now, they're just a bunch of things floating around in your head and you're thinking, I think it's this, it might be this, it could be that. Just give real numbers to it. And you can do that, you can run the budget as it is, looking at your margin and saying, okay, looking at the margin we have now, working extra, this is how quickly we're gonna pay off the $60,000 in debt. Once we've paid off the debt, this is how quickly we can have the three to six months of expenses saved. Once we do that, after we start investing 15%, this is how much money we can put in the $5.29. These are all numbers you can know this evening. - Your child is going to be fine. You make enough money if you pay attention to the money and you continue on the track that you're on, you guys are gonna be fine. You make enough money to have a child. What you may not have enough money to do, it's been 462,000 on a nursery. - Right, right. - I mean, like go nuts, okay? Or 46,000 on a nursery, either one. Neither one is gonna work. This is a very small human. They don't even know what's in the nursery. It's only the mother that does. The father doesn't even know what's in the nursery. So, and people go bananas. So, if the things like that, and you feel like, well, we'd have to get a bigger car. No, you don't. It's a very small human, they'll fed in that car. They don't take up that much room. Their car seat takes up more room than they do. - But if you do, and you have to decide, what are you thinking that you're going to stay home? Because that is the biggest part of this conversation. Because if you do, that does reflect on your comfort of living with the $2,200 mortgage. So, you guys have to look at, okay, if you make that choice, what's your husband gonna do? Are you gonna work part-time? There's gotta be something that you do so that mortgage doesn't become half of your take home. - Yeah, so, the answer to your overall question is, facts are your friends. When you don't, Jade is exactly right. Lay out a budget for the way you see this going. And the budget will look at you and say, no, you can't spend that on an luxury. And here's your daycare budget. Go out and shop some daycares. Talk to five or six or 10 daycares. Get actual numbers. Not what your friends said, not what you heard on the internet, because both are liars. And so, let's go find out what's really going on and what the real cost is. [BLANK_AUDIO]
honestly diapers and formula, they're not that much. - Diapers wasn't the thing. I don't feel like there's too much emphasis on diapers. - Everybody goes crazy talking about it. I mean, it's like-- - I feel like the other things, everything is-- - I think our kids got like two years worse than all the baby showers. - Yeah. - I think we had a warehouse for diapers, but-- - But all that being said is I think it's, what she's trying to do is plan for this, and I-- - If you plan for it, you're inside, you'll go down. - Yes, planning for when you're going to have a family is so important, and that's exactly what you're doing. That's what this is called. That's what it looks like. This is what it looks like to plan for children, is what you're doing. - But if you use some common sense in your choices-- - Yes. - That is mathematically sound, you should have no trouble, and you're eligible based on the numbers you gave us today to be a responsible person and have a baby. - Okay, let's play this out because I have to say this, 'cause we get this call. What there is the potential for is, I have this baby. Now I wanna stay home, now I'm down to a $55,000 income with a mortgage that's $22, and I never paid off the $60,000. - Can do it. - Now that is the call that we get, and that's the person calling and stressed out. - The answer is sorry. - Exactly, and that's the part that I just wanna call out is, there are things you can do to make this a better, easier process for you, and if you have the ability to do that and you would like to do that, it's a good thing to do. - Yeah, like get the debt paid off. - Yes. - For example, build your emergency fund. - Yes. - The further along the baby steps you are, the easier this all of this is gonna pay. - Yeah, that's right. - But you can't just go, oh, I'm really sad. I'm really, I'm really sorry. And you get to go to work, you make, you know, play grown-up games, get grown-up prizes. - I know that's right. - So that's how it works. Okay, that's the deal. But the actual child thing of, I can't afford to have children, I mean, if you got, you know, too many kids, and you just keep spitting them out, you're gonna have trouble, okay? That's not the issue. But you need to think about, you know, what is a reasonable process here with the income that you have and, you know, a typical family size and you will be fine. (upbeat music) (upbeat music) - I'm all about practical ways to save time and mental energy, especially during the summer when life gets busy. Between vacations, camps, deliveries, travel plans, online shopping, and trying to keep everyone organized. My mental load can get pretty full. That's one of the reasons why I love "Delete Me." Most people don't realize how many data broker sites have their information online, like old addresses, phone numbers, and even family connections. And that can put you at risk of being a target for spammers and scammers. But removing all of it yourself can turn into a giant project. That's why "Delete Me" is amazing because "Delete Me" handles it for you. Their privacy team of experts removes your personal information from hundreds of data broker sites and they keep monitoring it throughout the year. So far, "Delete Me" has saved me about 90 hours. I would have spent myself removing my information. And honestly, it feels so good knowing that someone is in the background helping me and I don't even have to think about it. So this summer, give yourself a vacation with one less thing to manage. Get 20% off annual plans at joinselleepme.com/ramsy. That's joinselleepme.com/ramsy. Alex is in Rochester, New York. Hi, Alex, how are you? I'm doing well. Thanks for having me on. Long time, listen, I appreciate you. I find the time to get me on today. Our honor, sir. How can we help? So I have a question for you. I think my wife and I are in a phenomenal position based on how old we are and everything that we've been able to accomplish so far. But I have one point of contention with her. I think you'll agree with me. But I want to make sure I'm not violating another rule while I try to accomplish this. So my wife and I are disagreeing about paying off the one vehicle that we have a note on right now. So we paid off for a vehicle. We have my car. It's about a $60,000 balance on it. I'd like to pay it off of what we have in savings. But I want to make sure I'm not violating any other rules based on our income, so on and so forth. It's 150K a year. OK. And did you say you had your mortgage paid off? Did I hear that? Yeah, we were able to pay off our mortgage when we sold the business and also did well on selling our first home. So it's just a small car. Did you buy the car after that? No, I bought the car before. Why did you not pay off the car, too, while you were at it? Well, I wanted to. That's what I'm saying. So she wants to keep a car payment? What's the difference between the car and all the other debt? She wants to keep the cash. She wants to have more in our savings. And I think we have way more than we need in savings. How much is in savings? 150,000. OK. So she-- it makes her feel uncomfortable to take 60 of the 150K to pay off this vehicle and be completely debt-free. Correct. As with anything, I mean, there's more to story. So we had a second child. And at the time, we were concerned about medical bills. We'd gone through a fertility, so we didn't pay off-- we didn't want to pay off the car at that time. But now I think we're in a position. Babies, healthy, and I think we're in a position where we could pay off the car and be completely debt-free. And I think at that point, there's really nothing else for us to do than give them to the 50%. Make sure we're fun in the 5.29. And you make 150 a year? Correct. We're just on my cellar. She stopped working back in October. Which is another thing that happened that changed. So if you run out the numbers, pretend that you pay-- let's just pretend you pay off the car today. You have 90,000 in savings. How quickly, if 150 is the magic number, how quickly could you get back to that? Yeah, well, again, I don't want to get back to that. That's part of the contention as well. Because I'd like to shift anything additional to-- I agree with you. I agree with you. OK, let's back up. Let's back up a second. I can show it to her. Where you guys should be is your emergency fund should be about $30,000, maybe 40. Yeah, I should have 50 in investments and no car payment. That's where you should be. Agreed. OK, and so now what we've got to figure out is why we're not there in her mind. So if we have no car payment and we have 50,000 in investments, that we can get to on a one-days notice. If it's in a good mutual fund with a Smart Vestor Pro, you can send them an email and you'll have the money in 24 hours. OK, maybe 48, but somewhere in there. So it's not like it's not liquid and accessible. And it's going to be making a good deal more than that stupid savings account. And I've got $30,000 or $40,000 sitting there in $40,000 in this case for an emergency fund. And we've got no debt. Now, what's the problem? Yes. That's what I want to ask her. And I would-- Because it sounds like it's mythology in her head. I would play this out with her because there's something that's causing her to freak out. And you should probably ask her the question, what is the worst in your mind that you see taking place? And what would it cost? And how could we-- and why could we not handle that with this arrangement? The roof blows off the house randomly, right? What truly in her mind is the worst thing? And that's how you run this back and help her see. I mean, even medical bills with a child with issues when they're born. You've got freaking insurance. Your maximum amount of pockets, probably 20 grand. And you're sitting on 150 worried about it. Yeah. Yeah, no, I totally agree. Well, what we got to deal with is facts are your friends. And we need to say, OK, with these facts, explain to me what the fear is. Jad's right. And then let's get into it. Rather than just fighting about, no, I don't want to pay off the car, OK? Bokewrap. Now, why? If we have 50,000 investments in 40,000 and no debt in the world, and we make 150, Jad's right. What is the scenario that you're worried about? That you've dreamed up this catastrophized in your head? And let's talk that through. And then you go, oh, OK. And so an example of that is my wife and I were considering a large generosity gift, OK? For us, what's a large gift? And she's like, I'm kind of nervous about this. And I went, OK, well, let's just pretend that we took that much money. And we put it in the middle of the floor, and we burned it. Are we OK? Oh, yeah, yeah, we got this and this, and this, and this, and this, and this, we're OK. So what is it you're nervous about? I guess I'm playing tapes from the old days. Oh.
Okay, that's fair because our tapes and our the old days the best of and the Ramsey House sucks It was bad. You don't want to play those tapes, right? And that's fair to say oh some of that some of that bankruptcy stuff when we were 28 and the lights got cut off coming up in my throat when we start talking about giving a gift with that many zeros on it That's a great conversation to have, but all that is is it meeting that where we are is different than where we were and just as Deloney says just because your body is reacting doesn't mean that that those are facts. No, it's a failure reminder. It's a feeling Facts are your friends and the facts are that your family is in great shape Your family has done a wonderful job such a good job that you covered all the infertility issues You covered her quitting work you covered any issues that came up with the child that was born with issues You you can't you've covered and your debt-free house and everything but one stupid car I mean you guys have done great Y'all are amazing you're the top 1% of Americans So yeah, so that's a fact now what are the what are the fears and what is the thing we're believing? That's the boogie man. Well, let's turn on the lights and see if there's really a boogie man come look under the bed Yeah, they know boogie man under the bed. Okay. Let's look in the closet. No boogie man in the closet Can you tell I've been keeping grandchildren and so you know me? It's like but this is a what are we afraid of? Facts are shut you know and and it's not to Speak down to her in a condescending way. That's not what I'm doing. No, it's to get to understand to the root of you You need to as a grown-up woman who's staying at home with your children as a result of our financial decisions You need to have a grown-up adult reason for this not just a I don't want to Bull crap. Let's have a seven adult discussion here because here's the thing that 50,000 bucks in investments will be a hundred thousand if you to put it in an investment back then Because it would have doubled when y'all did this since then so you've lost 50,000 dollars for screwing around with a stupid savings account That's expensive That ain't okay You know and so I'm we're gonna have this discussion and that's called opportunity cost folks when you miss out on an opportunity Yeah, yeah, yeah, that's that's get that's scarier than letting go of the 60,000 missing out on all that money Yeah, and but I'll tell you what happens and it happens at my house too y'all probably don't do this, but Sometimes you come you get to arguing about something like that and you finally go any worth it Oh, yeah, I'll just just leave the stupid 150 over there. It's not the right thing to do is wrong, but we're not worth it I did that with life insurance figures ago. Oh, yeah SWI sharing once it there's no reason I should have had life insurance I had millions of millions of millions of dollars and if I die she had millions of millions of millions of millions of dollars She was fine and but she said I want life. I want a million dollars on you. I'm like. Why do you think so? You got another million? I mean why am I behind the stupid life insurance? Hey, wasn't that expensive? It was like I don't know a thousand bucks or something. I'm like whatever it ain't worth it. I'll just buy it Yes, W.I. and then one day finally she went. I don't think I need that now when oh you didn't you didn't look four years ago But there we go. Okay Hey guys, it's Rachel Cruz. If you're working the baby steps every major expense deserves a second look and health care is one of the biggest expenses in most families budgets and that is why I recommend that you check out Christian health care ministries CHM isn't insurance. It's a health cost-sharing ministry. That means members help pay one another's medical bills and they've been serving Christian since 1981 CHM programs start at just a hundred and fifteen dollars a month and here's why that matters If you are paying more than you need to for health care that money could be going toward paying off debt building your emergency fund or reaching your next financial goal and your monthly cost isn't based on your medical history or where you live Y'all a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM and right now new members can receive a 50% credit towards their first month of membership. Go to CHministries.org/budget and use promo code Ramsey. That's CHministries.org/budget and promo code Ramsey. Today's question of the day is brought to you by why RIFI, when private student loan payments started getting away from you, well, it can feel like you're paying for decisions you made years ago because you are. Why RIFI helps borrowers explore low fixed rate refinancing options and payments designed around your current situation. Visit YRIFI.com/ramsey might not be in all states. All right, today's question comes from Cooper in Maine. He says our household income is $225,000 and our only debts are $9,000 in student loans and our $300,000 mortgage. We pay $150 a month on the student loan and her employer matches our payment. Should we include this loan in our snowball and make larger monthly payments when we get to that point? Or should we keep taking advantage of the employer benefit and let this thing ride for another two years. Well, first off, yeah, two plus years. Well, first of all, you said your only debt is the $9,000 student loans and the mortgage. So you're not debt snowballing the mortgage with the student loans. You're just paying off the student loans. I would 100% go ahead and knock this out. You make freaking $225,000 a year. This should be done in one month. It should be gone out of your life forever, not squeezing out two or three plus years of $150. I mean, gosh, what is that? Yeah, are you clipping coupons too? I mean, my God. It's just not necessary. No. It's amazing how in the name of math, we do some of the dumbest, smallest little dinky butt things and act like we're financially sophisticated. Well, yeah, because your body is paying the tax. I'm getting a free airline mile, which you will never use. You fool. 78% of them are not redeemed. That's the actual number. Eight out of 10 never get used. And yet you went into credit card debt in the name of airline miles and say this is the kind of stuff people deal with or the guy who's like, I get 1% back on my discover. That means for every $100,000 you overspend, they give you $1,000 back under what on what planet does that make you a millionaire? Yeah, that's interesting. 100 out for one back. Hello, are you in Congress? What in the world? Who thinks that works? It's a very good point. All of a sudden you're interested in $150, but when it was $225,000 when it was time to take the debt you didn't care about the money. Exactly. Oh my. Yeah, pay it off yesterday. You probably have the money and savings right now. Absolutely. Turn around with don't major in minors. Madeline is in Los Angeles. Hi, Madeline. How are you? Hi, I'm good. Thanks guys for taking my question. I guess this question is coming more out of fear than anything. Because for the last 10 years, I've been in real estate prior to that. I used to work in dental practices and being that the current state of the real estate market is what it is. Right now I'm feeling like I'm back in, you know, the dental fields where I kept that, you know, whatever $20 an hour back then and I guess that's where my question is coming from. I need to know if I'm doing the right thing is I have what is your question money and I have way too many accounts and I feel all over the place. How many accounts do you have? I don't know if I should put them the cash into more of a much much money and cash do you have? What are you trying to accomplish by having all these separate accounts? Is that your way of diversifying? What are you telling yourself by having all those? Yeah, I really didn't know that I could have a step an hour and then I just thought, okay, well, I'll just put them in.
cities and I did well my last 10 years in real estate and I have two rentals and basically that's where my income is coming from right now and that's why I feel like I'm back in the dental office you know because now I have to pay a mortgage where I live my condo is paid off and the rents are what's keeping me afloat I pay the mortgage and then I'm back to okay my income I'm not sure what this has to do with the dental but let's go through the numbers and see if we can simplify this so you've got to pay it off condo that's great the two rentals do you carry mortgages on those a one mortgage yes I just paid off a healer that helped me build the ADU that I rent you know so how much debt do you carry on the rentals total rental that's three three sixty okay and then the eighty thousand in cash what's in the savings account combine the neither it's almost three no no just the savings account what's in the savings account oh the savings that's in that's like thirty okay and then what's in the two CDs that's the there's three CDs um okay that's almost three almost three hundred three hundred thousand okay and when when do those mature when are you when do they reach their target date uh they have different dates uh someone are on five months or six months how are you so nervous that's okay don't be nervous how are you i'm 50 as soon as in the mom what's your best year in the royal state business my best year was 2020 2021 through 24 25 I sold in next week like zero and 26 why did you sell zero in 25 um I was exhausted I was burned out I was building my ADU in 24 I got the occupancy certificate of occupancy in 25 I was burned out I was still a tire I'm a single mom I everything is on me um my daughter is amazing she just graduated from she's done and um why were you burned out you made more money than you ever made in your life you were tired that's why you're tired why were you burnt out um I have felt like big time yeah that doesn't kill you every day from seven in to 11 p.m so why don't I cut your hours back to a normal hours instead of going to zero houses sold just cut the number of houses you're selling back why didn't do that I'm perfect I think I was I was working you said you quit because you were burnt out that is on purpose and you said you're mostly living off of the rents yeah the rentals here okay show yeah go ahead oh here's what I would do I am because I don't touch anything there's two parts to this question there's two parts to this metal and number one is if you feel like you need to cut back on working uh you can do that but you still need to be working in some way uh I don't think there's any reason that you shouldn't be selling any houses I think that um there's just something there that you've got a mental block there as far as this money I think there's ways that we can clean it up I would take the 300,000 and I would invest them you can do a step if you want you can do an individual 401k maybe get with a smart vester and decide what the best option is for you for retirement I think the savings for you I would keep six months of savings and a high yield savings account if six months for you is around 30 30 to 40k that that feels fair and then the rest of that cash I'd put it with the 300,000 and I'd invest that and then if you want to simplify even further I'm not sure uh but you might get to the point where you sell off one of these rentals to pay for the other and that way you have one paid for and cash rental that's generating cash and then your own condo is paid off how does that sound I know that's a cost there's a cost much to exist at that level and you need to be working you don't have to work seven to eleven no but you could work from nine to four I mean and and do a lot of house sales because you're good at it um you just talked yourself into the corner of saying oh oh I'm dying you're not dying yeah go back and just slow down you don't need to quit though because you have the potential to earn a bunch of income and so yeah you can do it what I would do is go to Ramsey Solutions and hit smart vester pro sit down with them they'll help you put some of this cash together and do some real investing but that only works if you can you're not sitting on your butt trying to live off the rentals at 52 go to work girl when you're trying to hire you don't have time to dig through stacks of resumes hoping someone halfway decent floats to the top that's the world's least fun game of where's Waldo what you do need are qualified candidates who won't waste your time because you can be sure they actually want your job which is why I love the way zippercrooter is helping small business owners right now zippercrooter has a new feature that finds the kind of people who will go the extra mile for you candidates can now tell you why they're interested may passionate about your role in zippercrooter smart matching technology automatically puts the most qualified most interested candidates at the top of your list so instead of sorting through a pile of just okay you're seeing the right people faster in fact 4 out of 5 employers who post on zippercrooter get a quality candidate within the first day that's not a coincidence it's because zippercrooter goes the extra mile for you just like the candidates you want to hire try zippercrooter for free today at zippercrooter.com/ramzy that's zippercrooter.com/ramzy meet your match on zippercrooter one of the biggest mistakes people make is thinking they can skip doing a will because they don't need one i'm too young i'm too healthy i don't own anything not as the case not as the case not as the case you can die at any health or age and anything you have will be dictated by the government lord help you if you don't have a will including where your kids go yeah so it helps protect your family it gives clear instructions and can keep your loved ones from having to guess what you wanted during a difficult time or from going at each of those throats if you're ready to create a will go to mama bear legal dot com if you're not sure where to start text quiz to 33789 and we'll help you figure out which option best fits your particular situation Amanda is in Minneapolis hi Amanda how are you hi i'm doing well how are you better than i deserve what's up so thank you for taking my call so my husband and i are on baby step number five and before we kind of go into saving for our children's future we were kind of met with a mandatory kitchen renovation that came up we it was a kitchen back from the 80s and you know we had rotting cabinets and appliances were falling apart and it was time and so we felt with our finances where they were we were able to save up we did about a 25k budget for that with about 5k in fluctuation and case something came up but the problem with that is that we experienced a huge mold problem that we had no idea and so my question in this goes into we have about 30 saved up for the renovation and then we have another 30 in what we call our emergency fund and my question is should we be going into our emergency fund and the in just to give a little bit more detail we were told last Friday I work for a big corporation that layoffs are coming and then our manager followed up shortly after and stated that our group was not safe and so my question is should it be right now I make about 105 what do you do I work for med device what do you do sourcing for the big med device company what your husband make he makes about 135 okay so did you start your job hunt last Friday my job hunt no you didn't your last hey the guy told you he's getting ready to fire you you need to listen okay you need you need a you need a job by next Friday making 120 what's the mold and then give them the fingers you walk out the door corporate america is trying to piss on you you better get ready okay it's come it's come I mean they're not kidding when they say your group's not safe that's code for pack your desk yeah okay what's the mold remediation cost
Uh, right now they have told us it's looking about an additional 12,000 based on the rotting that they continue to find as they move forward. So you said I have mold remediated many, many, many properties. The one thing I have found about it is it's a very emotional subject for the property owner, typically. And the mold remediation companies have a spectrum of work that they can do from safe to crazy and drama. Um, and so that industry does not have good credibility. Because in other words, I hear stuff anywhere from 30,000 to 4,000 and 4,000 absolutely will fix it in that case. And I've personally experienced that taking bids and remediating mold. But it's so it's like your children are going to die. And so that's where they start, right. And um, it's a problem. And so, and I've got, you know, we've got rental properties and the rental calls us up and go, my children are going, no, they're not. We're going to remediate it and remediate and simply means get rid of mold. That's all it means. So I want you to get three more bids on this mold issue. Um, because I, anytime someone says that they're that mold has taken over the house, I always want to make sure that really happened. And is there something else we can do? And, you know, what's the process we do? Basically, we need to be rid of the mold and we need to seal so that it doesn't come back and get rid of whatever water problem it was that caused the mold in the first place. Have you identified that part of it? Yes, it was a renovation that we did about five years ago that caused it. Um, where a storm came in and it just caused a major leak. And so we know where it came from. It's already been dealt with. Um, obviously, so we just got to tear out whatever rot there is and seal it and, and do the proper remediation. And that might not be 12,000. It might be, it might be 12,000 other sound completely unreasonable. So, but the, I'm guessing you've already torn the, you got no kitchen right now, right? Nothing there. We have no kitchen. No kitchen and no job. This is great. What a great week. And so, yeah, you got to put it back. You don't have a choice. Yes. Okay. So I want you to get three more bids on the mold. The mold and the mold associated rot repair gets some more bids. It's different than the kitchen guy. You may or may not use a kitchen guy after that. And then if it is 12, you've got 30, 12, you got 30 in your remodel budget, right? Correct. And you've already given them some of that, right? Yes. We've put down about 90% of our money already on work that hasn't done on work that's not done. Well, it was to get everything kind of delivered. And yeah, it don't take 90% to get it delivered. Oh, that's scary. It is scary. I hope they, I hope they meet your standards. Yeah. So they have, so they have 27,000 of your 30. Correct. Oh boy. Okay. I can't breathe. Okay. And right now, you've just got a hole in the wall. No cabinets. No, nothing. Nothing. Okay. Um, gulp. All right. So, um, I'll be careful how you talk to this contractor because he owns your butt. Um, so, in terms of getting the other bids on the mold and stuff, but I would get some other bids just to say, I need to make sure we're safe and make sure our numbers are right because I think I'm losing my job. Just tell the contractor that and then get some other bids. And then you have how much in your emergency fund again? 30. 30. So it's 30 and 30 to the two numbers are both 30. Okay. And you need 12 of that in addition, the way it's bit out today to be able to finish the mold remediation and put the kitchen in. Correct. Um, and just a question leaves you $18,000 in your husband makes how much? 135. Can you live on your husband's income when you get laid off if you hadn't gotten your new job yet? Yeah. Hope so. Okay. Good. All right. Have you plugged that into a budget just to see what it looks like temporarily? Yes. Okay. And it's scary. Uh, we have two kids in daycare, which is obviously not cheap. Um, our mortgage is about 2,500 a month. Um, it won't be there if you're not working. Mm hmm. Yeah. Um, I mean, if you're sitting at home or living on his income. Yeah, taking out a couple of months. Yeah. So, um, all right. So here's the thing one is get more bids and finish the kitchen. 12,000 or less. Okay. Leaving you 18,000 and his 135 to live on when you get laid off. The thing, too, is go get a job right now as fast as you possibly can, making 120 and then quit and go, uh, well, my group left. That's what my group did because we saw it coming. I mean, that, well, yeah, your group is not safe. That's some scary butt words right there. Yeah. All right. So, um, there's something about that process that makes people think it's not going to happen to me. Maybe it'll be everybody else but me. Yeah. No, I'd be trying to get a job now while you have a job. Get out of there as fast as you can and make more money somewhere else as fast as you can. Well, I mean, I got to get a severance. My, my severance is see you wouldn't want to be you. I'm done getting out of this place. Hey, what's up, guys? It's Jade. This back to school season, everybody's looking for ways to save money. But here's the thing. The best ways to find margin in your budget isn't on one time purchases like new shoes or backpacks. It's on the bills that show up month after month. That's why I recommend switching to boost mobile. Boost mobile's unlimited plan is just $25 a month forever. No contracts, no hidden fees, no surprise price hikes. And if you already have a phone you love, you can keep it and your number when you make the switch to boost mobile. That's my kind of budget win. You're going to ask in your family to give up anything. You're just paying less for something you already have. So if you're looking for ways to stretch your budget as the kids are going back to school, don't let a high phone bill eat up your money that you need for something else. Go to boost mobile dot com slash Ramsey and make the switch today. That's boost mobile dot com slash Ramsey. $25 forever requires customers to remain active on boost mobile unlimited plan. Welcome back to the Ramsey show in the fair winds credit union studio. Jade wash all is my co-host today. Greg is in Seattle. Hi, Greg. How are you? I'm doing good. Actually better than I should be. Hey, man. How can we help? Well, I'm 70 years old, retired. I have an $81,000 mortgage. Is there any reason I should not pay that off? Nope. You should pay it off. And well, I guess there is if you only have $81,000, how much do you have in your nest egg? About 150. That's your total nest egg to live on. Let's take that cash 150. Okay. No, no, no, no. I said nest egg. What is your net worth? That's about 1.8 million. Now look at this. That's what I thought. I kind of smelled that way to go. Greg, congratulations. I don't guess you inherited that. Did you? No, I worked for it. The old fashioned way. I earned it. Yeah. Right, right. Check. Pay off your mortgage today, Greg. Okay. Let me ask you another way. Okay. Let me reverse it on you. There's sometimes what I'm making a financial decision. I use this reverse engineering thing to check my logic. Okay. You got 150 in cash on a 1.8 million dollar net worth. Have you heard that right? Correct. Okay. And an 81.81. Okay. So if instead you had called me and said, Dave, I have a paid for home, by the way, what's your home worth? About 600. Okay. I have a paid for 600,000 dollar house with 1.8 million dollar net worth. And I have 70,000 dollars in cash. I'm thinking about going and borrowing 81,000 on my house. So I've got 151,000 in cash. You wouldn't have made that call, would you? No, I wouldn't. I guess one reason I made the call is my interest rate is 3.875. Yeah. But you didn't get rich on borrowing on your home to invest. Exactly. You got rich by avoiding debt and investing steadily. Okay. Am I right? You're correct. Because you're not a debt guy. The only And the only reason this debt's around is that
'cause it was so cheap, you just made you think about it twice. So the other day, you got rid of yours ago. - Correct. - Yeah, yeah. That's how you got here. 'Cause you're what we call a baby steps millionaire. You follow the stuff where the principles that God and Grandma talks about, that you and me grew up with, only most people didn't do them even then. And you're one of the unusual ones that did. And so now you're what we call sitting pretty. Well done, sir, I'm so proud of you. - Yes, that's free, Greg's that free. - And he worked for it. - How'd you get that money? I'll work for it. So he's one of those guys like me when somebody says, "You're so lucky, you just want to smack 'em." - Oh yeah. - No, I'm blessed, but I'm not lucky. Luck came dressed in work clothes. - I know, that's right. - That's how I came dressed. Luck knocked on the door and said, you got some calluses handy? Put your hand to this. And that's where that came from. Now, it's not accidental and it's not random and it's not a lightning strike. Greg followed the age-old principle of living on less than you make and investing it. I'm so proud of him. - Way to go. - Very cool. Very cool. (laughs) Gabby's in San Antonio. Hey, Gabby, how are you? - Hi, I'm doing good. - Good, what's up? - Hello. - What's up? - So, I recently got laid off on my job two weeks ago and previously before that, I had lost here, actually. I had the company closed that I was working for. I had been laid off for nine months. So, I was just starting a new job and I started to get settled. And I had moved to the culture to work and I really enjoyed that new city since I grew up in a rural area. And I was budgeting and starting to get to the swing of things. I hadn't even gotten a part-time job because I weekend to make sure I had a buffer in my budget and then I got laid off. - What kind of work do you do that you've been laid off twice? - I like IT work. The first time it was because the company shut down. Again, it was based up in a rural area and it was a government job they closed down. And this time around, they decided not to board with me after the six month probation. - Why? - It was due to a project that I didn't know how to do and I felt like, and I would ask the manager for help and I didn't get the help that I needed on that project and nor did I get all the information clearly for that project. So he based off my six month probation on that one project. - Oh, what kind of IT work do you do, huh? - That one was a network, so we're dealing with switches and things like that. But when I first started, I told them that I was willing to earn, that I was not, that's not what I would do, help desk and other things like that. So they still hired me on, even though maybe my background that I would do, helped us with computers and things like that, but that was a higher level. And they said, okay, no door, you can learn it. But of course, I wasn't. They expected me to do the project without training me. - Okay. - The way you've approached this each time, I don't want you to ever tell anybody that again. Okay. - Okay. - Three times you blamed them and you took a job, knowing that you didn't know how to do the job, and then you did not force help, and you're blaming them. Yes, they are also at fault. I don't really disagree with you, but if you're ever in an interview and you blame your former employer for not training you, you won't get the new job in the interview. - You gotta have some personal responsibility. - Does that make sense? You follow my logic here. So I want you to reframe that in your head and go, this was a bad choice I should not have taken the job, and I certainly shouldn't have settled in like I was gonna get to keep it forever, knowing that I didn't know how to do the job, and that there's a gap between your knowledge and your ability to perform, and that's okay, we all have that in something, but then, and this company was not set up to do that, and you're young and you're just starting your career, so you don't know yet, you're learning the hard way to be forceful on, before I take a job doing something, I don't know how I have to be forceful about the processes that are in place to make sure I can learn fast enough, so you don't fire me later. And that's, you know, that's part of the interview process for you, so I think your position is simply this, you need to get into the job, and you learn from these last two things, okay, I had a rule thing that folded up because it was government supported, learned something there, took a job I didn't know how to do, didn't work out, learned something there, so now let's go do it again, I think you still have a good knowledge base in IT, and I think you land yourself a new one, hang on, we're gonna send you a copy of finding the work you're wired to do with an assessment in it, I want you to take that and see if this is really the stroke where you wanna go with your life, and if not, if you wanna go a different direction, that's okay too, but you're young and you're learning, and this is an experiment, we found two things that didn't work, now let's find one that does. (upbeat music) Hey guys, George Campbell here. You ever feel like you make good money, and still have nothing to show for it? You run into Target for one thing, and somehow walk out $87 later with toothpaste and emotional support candles, just me? Okay, well that's the problem, most people don't pay attention to how they spend their money, so it does whatever it wants, and that's why we created every dollar, it's a budgeting app that helps you create a simple plan for your money, every dollar simple, it's clear, and it helps track where your money's actually going, plus you get daily lessons, to do's and reminders along the way, it's like having a money coach in your pocket, your money's been freelancing long enough, it's time to give every dollar a full-time job, go download every dollar for free on the App Store, or Google Play. (upbeat music) Well we wish we could get to every single calling question on the show, sorry, there's just four lines and just three hours, I mean we love you, we wanna get to you, but we could do this 24/7, it's still not get to everybody, but guess what, we can now, because we have something that's 24/7, it's called Ask Ramsey, it's free, it's a free AI tool, and it's built and trained only on Ramsey answers. AI can only spit out what you feed it, so we only feed it Ramsey, and it only spits out Ramsey, how cool is that? You get an answer the same exact way we'd answer it right here on the show, free, Ask Ramsey. Ask your question today at RamseySolutions.com, Ask Ramsey is the tool, or click the link in the description, you're listening on the podcast or the YouTube, and you'll find out exactly what we would say about that. Sarah's in Boston, hi Sarah, how are you? - I'm feeling great, thank you, thanks for taking my call. - Thank you, how can we help? - So I'm just wondering if I am missing anything here. My husband and I, we make about 90 a year, I do stay home with our three young kids, and we have a two family house, and my mom is going to be moving upstairs. And I think my roommate was upstairs before. Who was upstairs before? - We had a rent here before, who was there for four years. - Okay, so it is a duplex, it is actually two sets of utilities, two operating domiciles, correct? - Yes. - Okay, cool, all right, and mom, you're gonna let mom live up there, is she supposed to pay you rent or what? - Yeah, so the plan is that she would pay us 2000 a month. My concern is that we, that is a part of our income, and long term does that make sense, because she is 64 and she's planning to retire next year. And I'm not sure that I'll be going back to work any time soon, our youngest is one, our oldest is five. - I don't think you're working as anything to do with it. - Are you saying she won't be able to, she won't have any income after she retires to pay the two, the rent, is that what you're concerned about? - I think, no, I think she will have the income. I'm just concerned about never being able to increase it. - Okay. - I don't know if that's something. - Okay, so it's 30 years from now, she could be 95 and paying that. - Okay, so is she selling a home to move in there? - Yes. - So she's gonna have a big lump sum? Why is she not just purchasing something for herself?
- She wants to be close to the grandkids. - Purchase something close to the grandkids. - Either that or be treated like a normal rent or where the rent goes up periodically. - Yeah, but if she's 65 when she's 85, I wouldn't have wanted her to, if she just called said I want to rent from 65 to 85, I would tell her not to do that, I would tell her to buy something for her own good. - Oh, right. So that was a thought I had to, is that she moved in temporarily as she looked for like a condo or something. - Yeah. - Another reason why she's moving in is to downsize because my two brothers were living with her and recently both then moved out. - Good, good. So how much is her home selling for? - Right now it's off market, starting off market, seven, 65. - Is it paid for? - No. - What does she owe on it? - Hmm, maybe five, something. - Okay, all right. So she could put a $265 or $200,000 or whatever down payment on something that is smaller, maybe a $400,000, a nice condo that's near you, so she can be near the grandkids. And then her life is stable. She's not stable as she moves in with you unless you take the hit and don't increase the rents. So-- - That's my concern. - I think that mom, here's what the plan is. The most you can stay here for your own good is two years. During that two years, I want you to purchase something that's good for you, for you to go forward and have a great retirement in. Because here's the thing. You can tell her you talked to the financial coach and he told you that 'cause I am, okay? And because for her, if she just asked me, if you hadn't called me, if she called me and said, hey, I'm selling my house and I move in with my daughter, I would say, do that only as a temporary measure and get out of there and get you a condo, 300, 400,000, put down the $260, 250, whatever, get the condo paid off. So when you go into retirement, you're living in a paid for property and that stabilizes your most expensive part of living, which is housing. - But I will say, I mean, I'm just, this is a caution to you. Even if you put the caveat out there that this is only for two years, a minute you welcome her in there, there's a risk associated with that because if she gets comfortable and you guys get comfortable and you get lack of a days of color on your own deal, this gets messy real fast. - Yeah, I've already seen it in the past and I think my other concern is, she enables a lot of-- - If they don't do it, listen, don't do it. You've already said enough that you have enough misgivings about this. Don't do it. - Okay. - Tell her to go rent a one bedroom somewhere while she looks for a house. - You think this is gonna go sideways. You keep saying it in different ways. - I'm just nervous. - No, you think it's gonna go sideways. - You're nervous for good reasons. - You've observed your mother's enabling. You've observed her inadequate behaviors around money and you think it's gonna end up in your lap and you're right. - Yeah, listen to your gut. - Okay. - Yeah, it's not mean. Mom, I think you need to own a house. I don't think you need to be a renter and to encourage you to do that, I want you to rent a one bedroom. I found a really cool one over here in the neighborhood. I'm gonna rent mine out. You shouldn't be paying $2,000 a month for rent. I want you rent something cheap while you look for your new house or new condo so you're not spending much on rent. I'm gonna charge too much over here. It's not gonna be good for you. And I'll help you and I'll coach you and we want you to be around the grandkids. We want you around. But it's not gonna be good for you to be upstairs. And so if for so many reasons, so I'm gonna help you not do that. And just be kind and forceful and say no. Because you told us four different ways why you don't think this is gonna work. We kept trying to say, oh, you could do this. - You convinced us out of it. - And then it's like, no, that's not gonna, because so you know what this is gonna be. You just know and you want someone to say out loud. So okay, you talked to a financial coach and they told you not to do it. I'll be the bad guy. - There you go. I'll be a bad person. - It's Jade's fault. Tell her Jade said it. - I'll take the blame. - I'll take the hit. (laughing) - You could get the hate mail, Jade. - That's okay, I'll take it. I can handle it. - You know, the funniest one was the first two years I was doing talk radio show, a lady called in. She goes, we've been married three months and my mother-in-law's coming to visit for a week and we don't have a couch. And I said, well, you don't have any money. You can't buy a couch. And she said, yeah, but my mother-in-law's, I said, tell your mother-in-law, sit on the floor. And she said, what do you mean? And I said, you don't have any money for a couch. You need to be a grown-up, no couch. - Yeah. - And she's laughing and she's like, she's not gonna like that. And I said, she's gonna love it. She's gonna love it 'cause she used to have to do that and she has to use to have to put up with a mother-in-law. And you be kind and you say, we got no couch 'cause we're broke and we're getting out of debt and we're gonna get a couch later. I'm sorry. Oh, you appreciate you coming to visit. But here's, you're welcome to the camp and chair, you know. And so I go out to dinner that night. Lady comes over to me and she goes, hey, I was your caller today and this is my mother-in-law. (laughing) And the mother-in-law's laughing. She goes, you were right. That's so funny. - But she's so awkward, so hilarious. - Oh yeah, that is awkward. - This is my, I was your caller this afternoon. And when you're doing local talk radio, that stuff happens, you know. - Oh, man. - How was your caller about the couch lady and this is the mother-in-law? - Oh, man. - You told her to sit on the floor. - Yeah, that lady's gonna call up Jade and say, hey, I wanna meet you. You wouldn't let my daughter rent to me. We'll meet you in a back alley. - Sorry, I'm pretty strong. I can take it. (laughing) - You don't feel threatened, do you? - No, no. She's probably what? She's 60, I can take her. - You can take her. - Hey, hey, hey! - Hey, Jason. (laughing) - Love it. - That's a new story. I've never heard that one, Dave. - Oh. - That's a good one. - A new talk radio long enough. You've done a lot of dumb things. I can just tell you, well, that wasn't dumb. It was just interesting, but yeah. (laughing) - Too funny. (upbeat music) (upbeat music) - Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. (upbeat music) If you didn't know, you're more than welcome to visit us at our headquarters where we do the show from, or on the glass in the lobby. And generally speaking, there's 50 to 200 folks out here, closer to 50 today, watching the show. I think school's back in. And we've got a big lobby, big bookstore. We've got free homemade chocolate chip cookies and coffee for those visitors. And you can sit and watch the show. We do it from one to four, central time, every day, Monday through, Friday. Also in that lobby is our debt-free stage. And guess who's on the stage, it's Kevin and Ashley. Hey guys, how are you? We're great, how are you? Better than we deserve. Welcome, where do you guys live? We live. We're from South Bend, Indiana. South Bend, very cool. And how much debt have you guys paid? We paid off 30,000. All right. Cool, and how long did that take? 12 months. Good for you, that's quick. And your range of income during that time? We started with 30,000 and we're at 65. Wow. What do y'all do for a living? I'm an administrative assistant for a women's ministry. And I'm a full-time seminary student, and then I also work part-time for the school. Ah, very cool. So how'd you pay off 30K, making 30K? Well, we lived in a family friend's basement so that our rent down. And we were just on the same page. And we just knew that we wanted to pay off our debt. So we got a few extra part-time jobs and just-- But did you let Kevin eat at all? No. A lot of-- whatever it was in the basement. We had a lot of 15 bean soup. 15 bean soup. OK, well, that's not as much as a 20 bean soup. There we go. Wow. Look at you guys. So I mean, you really-- you're acting like a broke college kid to knock out this debt. What kind of debt was it? 23,000 of it was student loans, and seven was a car. Very cool. OK, so now you're free and you're continuing in seminary. Yep. And you're continuing as an administrative assistant. And so the plan is to get out of seminary and go into the be a pastor or what? Yeah, so I'll graduate in about two and a half years. And then I would be a pastor. And then I've also talked to the school about staying on there. So-- but I'm willing to serve wherever God calls me. So a pastor role would be great. Good to be available. Good for you. And educated. There we go, both. Very good. Congratulations. [BLANK_AUDIO]
put you on this track, what made you decide to go all Ramsey? - Yeah, so finishing up college right after we got married, we had the debt and the car loan and we were making payments and realized we were just making no progress. And we said, we're just never gonna be done making these payments and that was discouraging. And we had listened to Ramsey, the show a little bit, and we just said we'd just sit down and talk about this and figure out our money with a real plan. And so we got every dollar and we were like, we're just gonna go for it. And so we made our first budget 'cause we said, someday we wanna have a house and we wanna have things, some things that we want and that would be good for raising a family and we wanna go out on a date every once in a while and so we made a budget and started doing it. - Okay. - So what about the friend's basement? Did they approach you or you approached them? - We approached them, I had known them for a while and known that they'd housed some other people who were especially looking to go into ministry. So I just said, hey, we need somewhere cheap to live. Are you guys available and they said yes. So that's where we started. Well, there you go. - All right, very cool. Is it cool to ask what they're charging you? - Well, we're actually not there anymore. So that was like the first step. We were there for a little less than a year. - Okay, and that knocked the dead out. - So we're out of the basement. - Now we're out of the basement. - Yeah, yeah. - You look good. - Yeah. - I actually was happy in a real apartment now. - No more basement, no more bean soup. I love that for you. - Life is so much better than I like it, we're free. Okay, this does set you up though. I mean, you guys really, you sacrifice that a time when things were already pretty lean because you're in school and then on top of that, you sacrifice even more to go ahead and clear the dead so that when we can come out, we'll come out swinging, right? And there's a lot of stuff you'll be able to do now because you don't have this weighing you down. But it was kind of an inopportune time to attack this. Agreed? - Yeah. - Yeah, but you both did it. Actually, did he have to talk you into it or did you talk him into it? - At first, I was a little bit hesitant, but it didn't take very much time. You're like, I'm committed to this. - Yeah, yeah. - Yeah, let's get rid of this mess and get it behind us. Does it, how's it feel to be 100% free? - It feels really great, they've, it feels free and we are able to save for a home now. And when I finish summary, we know that we're gonna be ready to move wherever God calls us to serve. So it feels very free. - You know, as a person of faith, as a fellow Christian, I've run into this a lot over the years of people who are serving one way or another. One of the places I run into is like people, young people want to go on the mission field, but I've got $187,000 in student loan debt. - Yeah. - You know, and well, you're not going on the mission field because you've already, you already made that decision accidentally when you decided to go so far in debt, you couldn't breathe because on the mission field, nobody's gonna give to you to pay off your student loans. They'll give to you to eat and, you know, maintain a household while you do mission work, but nobody's excited about supporting $187,000 as a student loan debt. And so you really do get to live out in that setting. You keep, you mentioned twice wherever God calls me to serve, wherever God calls me to serve. You're living out that scripture where Jesus said, it's tough to serve two masters. - Yeah. - You will love one and hate the other. And what that means, of course, you know, as a seminary student, is that you've got to make a choice. And I've got to pay the bank, or I've got to go where I feel like God's calling me, and I can't go because I've got to pay the bank. And so the borrower truly is, you can't slave to the lender then, you can't listen to God's voices clearly. And you can, or at least you can't respond to it as clearly, as you can, now that you've set yourself in up in this situation, it's very cool. I'm very proud of you. - Thank you. - Who was cheering you on? - Parents and grandparents. - Really? - Yeah, they helped us out in any way they could. And they were just always there for us. And we did laundry at their house. So that's fabulous. - Yeah. - Very cool. Good for you all. Well done, well done. Well, we're proud of you. I know they're proud of you. Congratulations. And so how long before the seminar is finished? - Two and a half years. - Two and a half, I think you said that, but I want to make sure I heard it. Okay. Very good. And paid off $30,000 in 12 months, making. All right, here we go. Kevin and Ashley South Bend, Indiana, making paid off $30,000 in 12 months, making anywhere from 30 to 65,000, and lived in the basement. Whatever it takes to get debt-free. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yay! - Yay! - Yay! - Yay! (audience cheering and applauding) I love it. - Well. - A major sacrifice. - I can't tell you how many people I know that are people of faith, Christians, you do too. We've both experienced it and watched it that God has blessed them financially. They've done really well financially. And they let somebody live in their basement or let somebody live in their condo. - Yeah. - And I've got one friend who has one condo that's just dedicated to missionaries when they're home. He just leaves it open and they have a place to stay when they come home. That way they don't pay a hotel, then for living a hotel, which is not as fun as a condo. When, you know, they come home for three months or something like that. - 'Cause it's a short time. - And it's all he does is what he does with the whole thing. And sometimes he has weird stuff happen, but most of the time it's just a great joy to be able to be generous. So that other couple that's living like no one else so later you can live and give like no one else. They're on the other side of that, letting this little seminary student couple, brand new marriage, have a place to stay for almost nothing. Not fancy, but we're not trying to be fenced out of that. - Yeah, get the job done. - And that's, you know, that's truly beans and rice only they did 12 bean. - 15 bean. - 15 bean. - I got 15 beans. - I didn't know there were 15 beans. (laughing) - Well, I wouldn't, that's not a southern thing to make soup out of 15 beans. That's not something I've run into. We'll have to learn about that when we talk to them. - Yeah, we will. We will have to learn about that. - It's a different, when I said beans and rice, I didn't know I'd met 15. - That's to a whole different level. - Yeah. - A lot of 15 beans soup. But in the South, I guess we'd have pinto beans, white beans and cornbread. - Black-eyed peas. - Black-eyed peas. - Black-eyed peas, yeah. - And we keep counting up, we might get to 15. - Tune a fish. - Oh, go away. Get away from me. (laughing) Gross. - I knew that'd get you. - Oh, man, he just runs a little chilled on my back bone. - It's a scary sandwich. (laughing) - I love it. - Capoo. - I am proud of them. Great, great young couple. How fun is that? - Way to go, guys. (upbeat music) (upbeat music) - Hey, what's up, guys? It's Jade Warsha. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events, and all the extra gas and grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're gonna need a plan, and that's what you'll get with the every dollar budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So, no more wondering where your money's going. You're telling it where to go. Download every dollar in the app store or a Google Play and start for free today. (upbeat music) - Our scripture today, Colossians 3, 17, and whatever you do in Word or deed, do all in the name of the Lord Jesus. Giving thanks to God, the Father through Him. John F. Kennedy said, "I would rather be accused of breaking precedence than breaking promises." There we go. Shooting sacred cows instead of breaking my word, I like it. Jeanette is in Pittsburgh. Hi, Jeanette, how are you? - Hey, so my husband found out about two weeks ago that he's going to be losing his job at the end of December. And my question is, should we stop contributing to his 401(k) now or should we wait until his time is done before we stop contributing? And then also, what should we do after he's done with the company, how should we refinance or roll over that money to make money for us? - Good question. We teach to always take your 401(k) with you and roll it to an IRA. And so what I would tell you to do is go to RamseySolutions.com and find a smart investor pro, which is someone in the investment business that we recommend. They'll have the heart of a teacher. And then you do what's called a 20 leaves, to a direct transfer rollover.
Now, what that means is is that you sit with a smart investor pro and you say, "I want to put the 401(k) and these four mutual funds and I want to roll it over into an IRA and those four mutual funds and you sign all the paperwork. The paperwork is then sent directly to your husband's HR or former HR department and they will send the money directly to the mutual fund. That's called a direct transfer. You have to do it that way. You're going to get messed up because if they send you the check, they are required by the federal government to withhold 20 percent. How much is in his 401(k). And so they would withhold $40,000. You'd get $160,000 but you're required when you do a roll over from a 401(k) to a Roth to put all of it into the new IRA within 60 days or you will be penalized and you don't have all of it in the scenario I'm talking about because they sent 40 of it to the government on withholding and you won't get it into April. So don't do that. Let the money be direct transferred and pick out the mutual funds. We suggest, and I personally do, Jayden, Sam David and Sharon, put hours across four types of mutual funds, growth, growth in income, aggressive growth and international and put a fourth in each, so about 50,000 in each. Now what does he make a year? He is making about 48,000. Okay. What's he do? He's a warehouse employee, so he works for a communications company, but he does, you know, doing, taking all the in and stuff in and taking it back out. Why are they laying over by off? I think they're just looking to close down that warehouse. There's kind of a merger going on and- How long has he been there? 26 years. Wow. Yeah. So they're offering him a severance. I mean, he is going to get a severance. How much? 39 week severance at his current rate. Okay. So at least we have that. And then I, as soon as, you know, with December comms, we're going to start looking for a job for him. No, I'm hoping we can- No, we're going to get a job now between now and December that starts at the end of December. But you start looking now. Yeah. Okay. You know how fast Christmas is going to be here? You blink and it'll be here. I do. Yeah. Don't blink and go. Well, we got 39 weeks. No. Listen. Here's the plan. The day he gets laid off, and they put him signing him up for the severance, a week later he starts the new job. That means you just gained a signing bonus of 39 weeks. That's right. Okay. Now, should we stop contributing now to his 401k and work on paying off our debt? I mean, we do have a little bit of that. Oh, you should have already done that. Regardless of being laid off. I'm sorry. Yeah. We're definitely trying. I mean, I've been trying. You're not trying. You haven't stopped contributing to it. Well, the problem was, is I let I was let go last year unexpectedly and that kind of. That doesn't keep you doing stopping to contribute. No. What Dave is talking about is the best way to pay off debt quickly is to temporarily pause your investing so that you have all of your income to throw out your debt so that you can pay the debt off as fast as possible. So in your in your situation, no matter how much debt it is, go ahead and temper, it's a temporary pause, right? Pay off the debt. Right. And then once you've stacked up three to six months of expenses, now we can press play on investing again. Do you guys have any savings? No, not really. I've been really just trying to pay off the debt. And then like I said, I lost my job so we kind of got set back a little bit. How long have you lost your job? I lost it last November, but I got a new job in January. So I've been trying really hard. My son just got married so we were helping them with the wedding as well, so there was just a little bit of a delay there, but we are definitely back on track. Like he's gotten a second job just for just trying to pay the stuff off. So we've got to temporarily stop all investing and saving and focus every ounce of energy you've got on reducing debt. How much debt have you got? 13,000 in credit cards and then we still owe on our house. Okay, so only 13,000 and you're done. The feeling you've got to have around this is a never again feeling because you experienced the job lost last November. He's experiencing the job lost now. And that would feel completely different if you had no debt with six months saved. Wouldn't it? Right. So that's what you've got to tell yourself is there's going to be another storm at some point in the future. And when that happens, I'm going to be ready. I wasn't ready last November, I wasn't ready this time, but the next time I'll be ready in that preparedness starts today, right? Okay. Yep. Yeah, very good. So Janette, I want to reiterate because I really think you drove by this on me. Get a job. You haven't get a job now. Start working on it now. Do not wait because it's going to sneak up on him and December is not a good month to look for a job. No, it's not. Right. But in September for sure, I want it to have several good leads if not already figured out and says, okay, I'm going to have to start late. I can't start until January because I'm getting 39 weeks severance unless you want to pay me for the 39 weeks. I can't start early, but I really want to come to work here and I want to come in January. And he starts shopping around and looking for that position. It's going to take a little while to land something. He's not used to doing it. It's been 26 years since he went on a job interview. Right. Yeah. So don't wait. Just because there's severance doesn't mean he gets to sit on his butt. No, no, no, he definitely don't want to know. I know, but he's going to be sitting on his butt if he doesn't have a job. I'm trying. So we got a lot of him off of job. He's got to be ready to go January 1st. If they lay him off, you know, first week of January that I am off last week of December. Wow. We got 39 weeks of severance, so six months, seven months, eight months, which is not much for 26 years. It's not much. Yeah. And if you're if you're not careful, it can make you kind of low you to sleep a little bit. Yeah. It's like it's a lot of money. Oh, I got eight months. No, you don't. Yeah. You get to put that eight months in your pocket extra money to build wealth with and turns this job loss into a blessing. That's right. The goal is not to have to touch that. That's the goal. That's the thing. And turn it into it. Turn it into a signing bonus by getting your timing lined up and your dominoes lined up and then push that end domino and go, "Go, baby, go. Here we go. Go, go, get it. Get it. Let's go." And that makes all the difference in the world. But the human tendency is to act like December's a long way away, 39 weeks is a lot of exit round. Right, right, right. I'm okay. Everything's okay. And you're going to look up and it's going to be December the next year. And you're going to be going, "Well, that's when we went through the hard patch." Yeah. Because I didn't get off my button. Go get a job. No. Consider it a blessing to know. Oh, and by the way, if someone offers him a job for $75,000 this week, forget the severance. Got to go get it. Take it. That's more than your severance is going to be. Take it. Yep. He might figure out he's worth more than they've been paying him for the last five years. This could be, if you treat it right, the biggest blessing has happened in years because it pushes you out of the nest and makes you go fly. Oh, yeah. You got to, you have to believe that that's the point. That's a point. It's as big a possibility as a crash. Yeah. You better get after it while you can. It's good stuff. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.
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