Brought to you by the EveryDollar app, start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Campbell, my co-host today, Jade Warshaw, and we're taking your calls at AAA8255225, join the conversation through our questions about life and money. Stacy is in Sacramento to kick us off. It's going on, Stacy. Hi Stacy. Oh, sorry. Hi. You're Stacy. I'm Stacy. I'm sorry. That's okay. Okay, so here's my question. I am newly remarried. I am also married to a divorced man. We live in two separate states at the moment due to custody reasons for 50%. We each have custody of our kids, but we see each other half of them. I go there for half the month. He comes to see me for half the month. So we see each other a lot. But we're wondering how to co-mingle our finances, because we still need two separate bank accounts. We still live in two separate states. We need to file separately in two separate states. And I get child support that I don't necessarily want to co-mingle with his fund so that we can keep that separate from my kid. But you guys always talk about how when you're married, you should have a joint checking account. So we're just curious. I'm curious. How would you set this up so that we can be financially responsible? I have access to all of his bank accounts, he has access to mine. What would you suggest? When the custody stuff is cleared, will your kids live in the household with the two of you or will they, what will be their end result with the children? So what's going to happen is my son will graduate in five years. And so then I will move with him permanently. Oh, so this is going to go on for five years? Yes, it is. Then you would move to be near him. Yeah. Okay. So, and does he, he has children as well? He does have children. Okay. And is he in a custody battle too, or he's just, that's just where he lives? But he also has 50% custody of his kids. Got you. Okay. And those variables will not change for the next five years. No, they will not. They will not. How much child support do you get? I get right now 1200 a month. Okay. Okay. So if let's just play this out, you guys combine into one joint checking account, even though you've got double the bills essentially, right? He's got to cover his household bills. You cover yours. Couldn't you just put that in an every dollar budget and you have a line item, $1,200 child support, or do you have them all listed out for all the things the kids need? Yes. It does change about every year though, so that's something we have to factor in. But also like taxes, how would we do taxes, since we technically live in two separate states? Well, that's something in my state, he owns a house in his state. They're still married. So that's still something I would sort out with your tax pro on how best to do that. But the budget is actually simpler than it seems. Because it still is, you guys taking that once some of money, which is your two incomes combined, and figuring out the best split amongst all of your expenses. And if you really want to make sure that all $1,200 are kind of going towards your household, so to speak, I think that's actually really easy because obviously your entire rent or whatever your mortgage is, I mean, that alone is helping to take care of the kids. So, you know, grocery budget, all that stuff is helping to take care of the kids. I wouldn't necessarily whittle that down to like a direct thing like they're a kids field trip. They're backpacks, right? Just your whole lifestyle, having money going towards your entire lifestyle is funding the kids lifestyle as well. Okay. Okay. Okay. So as far as taxes go, you combining accounts wouldn't affect taxes. What's going to affect your taxes is how you guys decide to file, if it's married filing jointly, if it's separate, if it's head of household, and then you'd file for the income that you created in that state. That's right. Okay. So that you can work out with a CPA or good tax pro. You can jump on ramesysolutions.com and find one in your area. But I still think it's worth this is a very interesting scenario. We can call out, this is strange, this is not the norm. And so I love that you guys are even considering combining finances. Yeah, we're just trying to figure out do we have like a combined finances, which is kind of like our play money. And then we each because I can be self supportive of just my income and he can be self supportive of just his household. And then do we have a joint checking for when we, what bills do you actually split right now? Like what is actually nothing you're both here, but we're both. Yeah. I support my household. He supports his household. Well, the reason I still like combining in is because there's going to be margin left over and you guys are going to have shared goals together, whether it's a savings goal and investing goal, a vacation goal, all those things that you want to do with that extra money. And so I do like being housed under one area because then you've got the transparency. You can just see it in a way that I think is going to set you up in five years when you are under the same household versus having to kind of like shift that entire mentality of I've just been taking care of myself with my money. So I'm also thinking long term as well. Yeah. Yeah. Yeah. Yeah. Both kinds of emergency savings? Yeah. Fantastic. Mine is much smaller than his. Do you want it to be bigger? I would, but for the time being, I'm okay with it. Are you both investing? He is and he, the pre-empt is that he will put into my 401K every year, that is part of our pre-empt. Oh. Okay, so his income is going to your 401K? How does that work? So he'll just, he's self-employed, so he'll just put a portion of his income into we've made a 401K for me, so he'll put a portion into his and then max out mine every year. Oh, do you work for him or do you also self-employed? I'm also self-employed. Got it. Interesting. So it's not a traditional employer 401K. You are the employer. Yeah. Wonderful. So which makes it that we can move back and forth? So I see him about 10 days out of the month, he sees me about 10 days a month and we fought back and forth. Yeah. I mean, again, I still am a proponent for the one account that shared because then there's the expense of you guys going to see each other and traveling and again having that on one budget with a shared income and then you guys can make the decision together. What makes sense, you know, spending X amount on flights or, you know, all those little, you know, new wants things that go into planning, especially five years a long time. You can build some serious wealth in five years if you both were aligned and got serious and combined the finances. So that's my greater fear is that you just kind of both get a little bit in your own world a little bit lazy and instead of going, hey, we have this shared goal. What if we could save up this much? What if we could invest in this much? Well, so I have a question. Can you just bought another property, another investment property? Do I put my name on that mortgage with my other question? I mean, I would. I'm viewing this marriage as a normal marriage in every fashion except the fact that you guys have kind of this custody thing going where you're going to have to travel. Other than that, I'm going to view it the same, which is we, but everything we do from here on out is a joint venture. Yes. If we see a house, we do a house together. If we buy property, we buy property together. XYZ. Was this a joint decision to buy the investment property? Yes. Yes it was. Okay. I think it's fair to have your name on the deed that mortgage is less important if you want to put your name on there because you have to refinance into it, but putting, having your name on the deed will make it actually feel like it's yours because then legally it is. So that would be nice. And that is our joint income together. Great. Fantastic. And now we can both attack this mortgage together and knock it out together. I think all of that will create a better marriage and cleaner finances for the time being. I love a good sale. I also love the holidays. But if you're like me, sometimes those two don't mix well because six promo codes and a commercial later, it's so easy to convince yourself that you need just one more scented candle or a waffle maker shaped like a Christmas tree and some flannel pajamas. The temptation to spend more than you budgeted for is real. That's why I love having a bank that keeps my free spirit in check. And for me, that's fair wins credit union. With our smart bundle, you can choose a Ramsey themed debit card that says live like no one else. It's a great reminder to stick to your goals and what you're working toward, especially in a season that wants you to spend instead of save. You get a no monthly fee checking account and a high yield savings account. You can even open up additional savings accounts like a holiday fund for gifts so you can finally pull the trigger on that waffle maker because staying on track for the holidays doesn't mean giving up your free spirit. It just means being smart about it.
So get your live like no one else debit card by opening a smart bundle today at fairwinds.org/ramsy. That's fairwinds.org/ramsy. Ensured by the NCUA. Carlos is a Eugene, Oregon up next. Carlos, welcome to the Ramsey Show. Hey, thank you so much for having me. It's an honor. We're happy to speak with you. What's going on? So my name is Carlos and I'm actually, I live in Medford, Oregon. And I work for the city of Medford and me and my wife, a fiance, soon to be wife. I just, I'm trying to look for ways how to basically put money to the side. Or even if it's $20 on my paycheck every month or $40. I'm trying to figure out, you know, I'm doing all the right things I feel like that's right. It's like not eating out, making dinner at home. You know, we feed our boys, feed my wife, we have, you know, repair, mortgage and everything. And I'm just trying to look for ways how to save money and stop living from paycheck to paycheck. So there's no margin. After you've paid everything, you've handled all your business. There's just nothing left. Yes, and but this is the crazy part because I've been watching Dave Ramsey since I was like 13 or 14 and I'm 26 now and I have been noticing little by little. And I'm sorry if I get too specific or talk too long. I'm just very honored and just very shocked right now that I'm even talking to you guys. I've been noticing I've been having, you know, like $200 left to $400 left and now right now every, you know, paycheck that I'm getting and I pay everything else me and my wife or fiance, you do split the mortgage and I do take on a lot more of the, you know, that that we have and all the day. Margin, as in I'm sorry, can you what's left over today or margin left over today's $800 that's great and so you have debt still. Yes, I do have debt. I do have a oh six Chevy Silverado. It's I owe about $4,500 left on that had it for two years and then I have my fiance's a 2013 Chevy Tahoe that I bought. I bought her my own 19 on it and now I owe 13 and you guys are. You're fully combined finances at this point. Yes. Okay, we can talk about that but keep listening the debt. So you got $4,500 on one 13K on the other, what else? And then I have just one credit card. I believe it's my capital one all I owe is I mean it's not that much I owe left like $200 left on there because I've been paying it down little by little. I used to owe 1300 on it, but now I only owe 200 and then so here comes the issue. Back in the past when my fiance was pregnant, I did have a 2014 Dodge Ram, I believe it was a 2014. I just for some reason the insurance and it was finance and but the insurance kind of got messed up with the bank and I had to pay it like it was $1,000 a month for car insurance and it was just very hard to look for any insurance. Is that still the case? Nobody's paying 12 grand a year for car insurance. What was that? Are you still paying $1,200 a year to this day? No, no, so if they know it stopped about two years ago because I didn't do it anymore, it was just very expensive. But let's help you today Carlos. Let's focus on right now. So even though Carlos has been listening for 13 years and it went out the other year because you've been going into debt over those years. Are you ready to actually get on the plan? Are you ready to actually listen? Yes. Okay. What do you make a month? I make about 3,800 a month. Good. Does your fiance work or is she home with the boys? She does work part time. She is in school right now to become a nurse. What's she bring home every month? Probably about 2,900. Okay. Good. Now we're going to give you every dollar so that you know these numbers like the back of your hand. You'll be able to plug both of your income in there. You'll be able to notice trends with your money. But more importantly, you'll be able to focus your margin, which is the extra money after you've covered all of your expenses. You'll be able to focus that margin on your top goal. And George and I are telling you right now your number one goal is what? Pay off that day. How much do you have in savings? Pay off that day. Right now I have about, let's see, $6,000. You got six grand in savings? Okay, Carlos. Why don't you reach over and pay off that $4,500 loan in the credit card? Which, yes, that would be. No, I want an answer. Why? Not which, yes. Why aren't you paying it off today? You're telling us you're struggling with margin. We just showed you how to free up two payments yesterday. And you've been listening since you were 13 years old. Oh boy. And you make 6,700 a month. So you're telling me your expenses are about $6,000 a month just to cover the bare bones bills without even eating out. Yes. There was some hesitation there Carlos. I think it's time to do a budget. And we're picking on you because we love you and you've been listening along. Yeah, we've earned the right. No, no. So your homework tonight. Yes, I feel like I've had just a hard time, you know, over the years. You have. You've had a hard time, but today, again, focused on today, which is today I'm seeing an income of gosh, over $6,000 a month. And not, not a ton of debt to your point. It could be much worse and a lot of margin, but it could be more margin. With the amount of money that you're bringing in, I think you could probably be putting $1,000 or more towards debt. Every single month, along with this $6,000 so that we can knock out not only the car, but really get moving on this Tahoe. And you guys are free in no time. And then yeah, now you can save up three to six months of expenses. You know how this works. Honestly, that yeah, that's actually now when you're, you know, saying it that way and hearing it from someone else's point of view. It's, it's wow. Yeah, I think you're just caught up on the past. I think that you got a. A lot of life has happened. Get the dirt off your shoulders and move forward and go, here we are today. We've got these boys. I've got my fiance. We're getting married soon. I got money. Let's clear the path. You guys got a wedding day. Is the wedding paid for? We don't have a wedding date yet. We were just, we were going to get married this year, but we wanted to wait until, you know, she finished a school because she's getting luckily, getting all her school. What's that got to do? What school got to do with getting married? You're already living together. You already got kids. You may as well make it legal. Right. No, you do have a good point, but she's getting, she's getting all her school and like everything financially paid for already. So we just didn't want to like ruin that if we were to get married because she has financial aid. Yes. Okay. There's a real answer. Thank you. Yeah. So basically she gets all her school and paid for. So we would hate to like, you know, mess that up or interfere with that because obviously when you get married, correct me if I'm wrong, they probably. It's going to be like one income for both of you, you know. It's going to reflect differently. I understand what you're saying. I don't agree with what you're saying, but I understand what you're saying. Okay. So the good news is Carlos, you can free up two of your debts today. The credit card in that small car loan are gone. Right? Okay. Now you're left with 13K and you free it up that car payment, which is how much per month? I only pay $182. Okay. So you just free it up that plus the credit card. So that's another 200 bucks. On top of your 800, you said you had at the beginning of the call. Now you got a thousand bucks extra to throw at that 13K. So worst case, if you did nothing after this call and just took the thousand toward it, you'd be done in about a year. Completely dead free. Okay. And I think if you did an every dollar budget, you'd find even more margin and I think you'd probably be done in like eight to ten months. I'm going six Carlos. Wow. You think you can do in six months? Can you throw two grand a month this thing out of the six to seven hundred dollars? Let's go with six. Let's go. I like that. Let's light a fire under you and know that we're watching Carlos. Call us back in six months when it's done. That's your challenge. We want the where they know. Oh, I will. Because it took you, I mean, you've been listening to 13 years. So I think it's time. We try out the plan. See if it actually works. Yes. And honestly, I've I've gotten so much better. I feel like, you know, saving money and actually like spending money wisely and forgetting all these little things, purchasing these little things. That's good. You know what Carlos, I also work on your career because I think you're a sharp guy. And I think this government job has got you pretty comfortable. I think making more plus spending less will create some unstoppable momentum with your margin and your budget. So I'm rooting for you to do it all, man. Get married. Improve the career. Get out of debt. Life is so much better on the other side of that freedom.
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Getting better, so remember, the next time you or a loved one have a health issue, you need Solace in your corner. They'll fight the system so you don't have to. Go to solacehealth.com/ramzie, or click the link in the description. Checking your eligibility only takes about two minutes. That's solacehealth.com/ramzie. You must be 18 or older, and remember, advocates do not provide medical or legal advice. (upbeat music) If you're new to the Ramsey show, you'll hear us talk about the baby steps a lot. And that's because they are the framework we use to answer every single money question. It's the filter we use. So if you wanna learn more, we've got a link in the description of the episode wherever you're watching or listening. Jim is in to pick a Kansas up next. Jim, what's going on? - My question's on investment. I've been a Ramsey person since 2009. Help me get out of debt. Kind of slow to start investing. I really started investing slowly and then better at first in about 13 years ago. Over several jobs, a 403B out of reconciliation. So I'm able to, as I move one job to another, I just roll the accounts into the next account. My question is, I've been tracking how much I've totally put in, kind of set it in, forget it. And I've put in about 250,000 over the last 13 years, obviously starting at zero. And right now it's about 400,000. Am I compared that against what I'm seeing in the market the last 12 years? It seems low and I don't know whether it's low, I don't know whether I'm reading the numbers right. You guys often talk about it doubling every seven years when it's seen on like 12% interest. And so I just, if it's low, I don't really know what to do. I don't know how you change those investments or how do I know for sure that they're performing well? - Have you looked under the hood to see what's actually being invested? - Yeah, I hit the accounts. And I told the broker, aggressive when I started several years ago, I don't live in the same city anymore and I just kept it with the same money man. So it's just mutual funds. It's just a variety of mutual funds. - So you got a guy. - Yes. - And you're not able to look and kind of see what the annualized rate of return has been on those investments over the course of the 12 years. You should be able to see that. - The problem is when I try to look at the over the years, it's because I've rolled into other accounts that only shows the most recent. So I started my most recent job five years ago. - What's the most recent? Over the last five years, what have you averaged? - So the last five years that looks like it was about 10 to 12. - Okay. - But when I look at the total, I would think if I had invested 250 that I, I feel like I should have more than 400,000 at this point. - I mean, it is to your point since you've been rolling it over and maybe those investments, what you've had at invested in has changed slightly. It's very possible that in the earlier years, maybe the rate of return wasn't so great, but it sounds like where they are now, 10 to 12% is okay. I mean, that's kind of the target that we talk about all the time. - I just, I'm 45 and I don't want to set it for 15 more years and then look back and have been losing percentage over there. - Which brings us to the bigger part of this conversation. The bigger part of this conversation is you can't just give it to a guy and hope that they've got it unlocked. You've got to understand what it's invested in and you have eyes on it, you're watching it, you're making sure it can't be 12 years later. Now I look at it and go, that doesn't seem right. That's a lot of time lost. That maybe you could have made adjustments. So let's not do that going forward is what I'm saying. - So how do you, do I just call them and say, I want to better understand like each one of the, it's in like seven or eight different mutual funds. And I just, I don't know what any of them, I have never been, but I don't know what you're doing. - What you need to do is map it against the Ramsey Principle, which is four types of mutual funds. Essentially you're looking at large cap funds, which are the largest companies, mid cap, small cap, which is more of your aggressive growth and then international. So 25% across all four is what you're looking for. - And when you select those funds, you can look and see what their track history has been. - You can see the expense ratio, what the 10 year return is. You can see any other fees that are involved. The fund management team, if there's been change in that. But what you want to look at is just make sure that you're not in any bonds or target date funds, because sometimes they'll put you in those because they're going, well, you're 45. Well, you got to start slowing his role here. He's not a young man anymore. - Or your first time investor, we don't want to scare you away. He's probably has low risk tolerance, something like that. - So you just need to tell him, hey, I want to be in 100% equities. I want to be all stocks inside of mutual funds that are diversified across these four types. - And that'd be appropriate for my age. - I mean, I'm not a good friend of age. - Even whenever, tire, I'm going to stay in 100% stocks, because I might live to be 95. So I'll have cash on the side to live on. If the market takes a big dip temporarily, but in the long term, I want to stay in 100% stocks. - And I'll be honest with you, Jim. I'm a big, and I think you're doing that now. You're listening to the show, you're calling in, but that personal buy-in of making sure you understand things. You're taking time to research, what does it mean? What did George mean when he said a large cap fund? What did he mean when he said diversification? You really taking the time to dig into that is good, because it's your money. It's the biggest asset that you have. And so all of that is going to help you when you go into those conversations with your smart vester or with your investment professional to understand what they're saying. And then you're not going to feel like you're bothering them when you're asking questions, because it's going to feel more like a conversation. - Yeah, because you know someone I knew, someone I was friendly with, and he sold it to me when I was still teaching. And you trust these people, and then I didn't do my diligence. So if I find that I'm not getting, is there a way to move all of the, to move away from someone if you don't feel like I'm getting - Always. - Yeah, you can fire him and say, hey, thank you for the last however many years, but I need to move on. Thank you for your services. - Okay, that's really good to know. And I will take all that in there. I got some Google in to do. - Yeah, I do. - Well, help you out too, there's a great investing guide we have, it's totally free. If you jump on ramsysolutions.com/guide, and we'll drop a link in this show description for anyone else that wants to access that. But that's a great primer for understanding, what are we talking about when we say investing, a diversification and large cap, and what should we expect? And how do we not lose our money like it's a vending machine? So those are all good questions to be asking, and I'm glad you're finally going to get in the driver's seat, Jim. That's an exciting moment. - All right, Martha is up next in Houston, Texas. What's going on, Martha? - Yes, hi, I'm excited to be on, and I am glad that David's not on the call with me, because I know he doesn't like Teslas. - Oh, and there we go, you're right. He would not like this call at all. (laughing) - But I'm happy to take it. - The question is, thank you. My question is, I'm happy my husband and I, we just wrote the last check to, or to pay off our 2023 Tesla yesterday. - Awesome. - Yeah, so my question is, should we plan, I say long term, maybe three to five years to just save between now and then for a used battery, a refurbished battery, or a new battery, or should we just plan to, you know, knowing the battery's gonna eventually go out, right? Should we just start planning to save for a used car when the battery goes out? What makes you think the battery's gonna go out? - Yeah, what's the average time on this? - It's a long time, and there's no guarantee it's just gonna go kaput. So I'll give you this example, Martha. My first Tesla, I bought, I think, 2022, and it was a 2013 with six figures of miles, 166,000 miles, and I sold that thing to another team member just last year. And it's still running great, it's at, you know, 75% battery capacity, and so I don't believe in this like, well, every 10 years, the battery's gonna die. So what I would do in your shoes is just start a sinking fund for car, and one day, if that does happen, you guys can decide, hey, is it worth just replacing the battery or should we just get a different car at that point? - What's it cost? I'm just curious, what's it cost to replace a battery? - Probably 15 grand or so? It's not cheap for the actual battery that holds, you know, the charge. - Wow, yeah, yeah, yeah. - Yeah, but it's a 12 volt battery that's like 200 bucks. So you might have to replace that. That's not a big deal. It's the big one under the car that you wanna be more worried about, but truthfully, I think it's paranoia more than reality that the battery is gonna die.
battery is just going to die on you, especially for a newer one. Yeah. Yeah. Okay. Well, that is what I needed to know. And, by the way, I love y'all's Tik Tok. I'm a huge fan. And I think you, Martha, for being on Tik Tok. I think all the haters on there, they just don't know what's good. Oh, Martha in the comments section on Tik Tok. Letting them know what's up. No, that's right. That's fantastic. Well, from one Tesla driver to another, thank you for the call, Martha. That's fantastic. Just save up, you know, because the thing is, now cars are becoming like iPhones. It's just going to become obsolete technology, which is crazy to think about. That's terrible. That's just the way the world is going, Jade. So at some point, you might want to go, "You know what, I got an iPhone 8, it's timed upgrade to the 16." I've had this iPhone. I don't even know which one it is. You know, I keep my stuff to the wheels fall off. Well, you know what I respect? We get people that visit us from all over the country and the lobby and we take pictures. Uh-huh. And when I see a single lens, oh, that's somebody who's serious. I'm like, "Man, that's someone who knows rice and beans." Serious. Who knows? Sacrified. Suffering. Two of us. A single lens. Hold it down. It's almost unhinged. It's, it's, it's extremes. And iPhone 3G still holding up in 2026. It's impressive. It really is. This episode is brought to you by BetterHelp. Every year you tell yourself you're going to handle the holidays differently. You're going to stay calmer. You're going to feel more peace and then it's the same old pattern, the same family tension and you're cranky and you're tired and you find yourself snapping at people that you love. You still have time to get ahead of everything and understand what's behind your reactions. Therapy can help you build a healthier plan before you actually need it. When you're ready to have that conversation, I recommend BetterHelp. BetterHelp is an online therapy platform with more than 30,000 licensed therapists to cross its network. If your first therapist isn't the right fit, you can switch at any time for no extra cost. And get this. If thought about trying therapy with BetterHelp, insurance options may now be available nationwide through participating providers. And eligible members have an average copay of just 23 bucks a session. Listen, you know what's coming this holiday season. This year you have time to make a plan before the holiday chaos by preparing differently. Go to BetterHelp.com/RAMSI to check out your payment options. It's
[email protected]/RAMSI or click the link in the description. I'm 29 years old, I've had a pretty volatile, crazy, hectic, up and down rollercoaster of a life since graduating high school. I have no debt through a lot. I have a bachelor's degree, a whole list of master's degree. I've done a lot of crap, I've done a lot of stuff, I'm finally kind of getting my footing here. I work as a door door salesman, I make about 300 and projecting 330, 335,000 for a year. Wow. What do you sell? And I just started, I feel like I'm outing myself and the outfit that I kind of created, but I sell roofs and I sell solar. Okay. Okay. I just started working 2 years ago, before that I was a bit of a bum, I was a no-mad, I lived in the back of a motorcycle working odd jobs throughout North and South America. I work as a commercial fisherman, bartender, bouncer. You have lived in all your lives. Yes, teacher. Yeah. Okay. What's wrong with that? That's cool. You've done a lot. That's, like, I'm told, and coming back here I came back and sort of doing an plasma, borrowing my grandma's car and living in her attic, that was two years ago, two years ago, three months ago. Wow. So this is a brand new life for you, a guy making 330 grand. Is this utilizing your master's degree, is that why you were able to kind of hit the ground round? No. No. It's not at all. I got a master's in education, I got my bachelor's in management information systems, never used it for a single day. So how can we help you today? Like a question. Yeah. The question for you guys is, I still, I still feel pretty empty and I still feel pretty. I'm trying to figure out, is it, is it a knee problem that I'm just destined to kind of just be a bum? Well, I was going to ask you, I was going to ask you how you're doing because when you're listing out all of the things that you've done, it let me know. I was thinking to myself, wow, this guy's adventurous. He really just likes to experience whatever life is putting in front of him. That's, that was the narrative that I created. I was thinking, oh, guys, this guy's a lazy bum. Now, if you were, only you know that for sure, but that's not what George and I were thinking. And I was actually going to ask you, when you said, we've got a stacked resume and more skills than I ever hoped to have. Yeah. You were doing sales for two years. I was going to ask you how have you done with that because that feels pretty stationary based on what you've been doing. Yeah. We're do our sales. So it's like the front lines on it's like the, it's like the no man land of any company is knocking on a door and getting someone who had no idea what the product was to commit to a contract that's worth tens of thousands of dollars. But you're good at it. You're good at it. You're good at it. Are you living in a, like a house now, are you renting somewhere? I own two duplexes. I bought three houses last year. I didn't know what to do with the money. I don't know what to do with all it really don't, I don't, I don't, I, I went the same clothes every year. You're not motivated by money. I phone. Are you single? No, not. That's okay. Yeah. I don't have any family members. My mom passed away. One of the kids, my dad disappeared and like I, my brothers are all elsewhere. And I'm just feeling like, is there something wrong with me? I don't think so. I think you're a person who is not motivated by money and that's totally fine. Some people are not. So there's nothing wrong with that. And you're clearly a people person because you're able, or you're able to win friends easily because you're able to do sales really well. I just think you need to transfer that and find some community to get around you. Because when you have like person to person relationships that are lasting, it does add a lot of meaning to your life. It adds meaning to your money. It adds meaning to why you get up in the morning and do what you do. Even just having a couple of really great friends. So it sounds like, I mean, I don't know, but it sounds like that's the component that's missing. But I'm almost, almost like quest of making money and making as much as I've, I guess it's stressful. It's exciting and addicted to the adrenaline of it. Okay. I do kind of like it. But also it feels like we're in a very unstable time in American history with the dollar, with the debt and with words going on. What does that have to do with you, Tom? Well, it just feels like I'm preparing for, I could make a million dollars a year and I'm not going to feel stable enough to have a community. I'm wondering if you'll stay in that line. This has nothing to do with stability. I think you're going to realize you can make a million dollars a year and still not like the guy in the mirror and still have no purpose and still have no community. And there's always going to be things in life that you can control and there's going to be things in life that you can't control. But I wouldn't be spinning my, and don't get me wrong. This is a lot easier said than done and it depends on your personality type. You're clearly the type that's having some anxiety over the state of the world. But my advice remains the same, which is focus on the things that you can control, focus on the things that give you joy, focus on the things that are going to build the life that you ultimately want to build. And I go back to the community piece because you do need people around you. Otherwise, the more you're kind of left to your own devices, the more you're kind of ruminating on this stuff over and over and over and I kind of think that's what's happening here. It's going to be Tom Hanks and the volleyball man. That's going to be you on the shore going crazy and isolation. Wilson. So I think there's a couple of homework assignments for you because you've already realized what do I do with all this money? So my question for you is then what? Those three words are really powerful to ask yourself, whenever you have any goal in life and then what? Well, I want a Lamborghini and then what? Then I'll be super happy, then I'll be successful. Like, I want you to complete that sentence for anything you want to do in your life. And I think part of it is needing that community, needing that purpose. I think also, I don't know where you want your faith journey, but I think getting connected to a local church and exploring that would be very fulfilling for you and a great way to meet people. That's true. That's right. It's a great book. Our friend, our doctor Arthur Brooks, just released this one called the Meaning of Your Life, Finding Purpose in the Age of Emptiness. I feel like it's going to hit you square in the face. It's going to be the perfect book for you. And he explores. Okay.
All of these things and you know, I've talked to them at a degree of what money can and can't do and he tells us Hey money really can't buy happiness now buying Experiences with people you love is one of the best uses of money So we know that and we know that just spending it on stuff doesn't bring happiness Investing and saving actually can bring happiness. You can make you feel secure And so I think they're all wise things and it's a good reminder There's only three things you can do with money give it save it and spend it and I think you've realized I can spend it and have a good time for You know in a short amount of time I can invest it and save it That's an adrenaline rush, but I think the giving side might be something to explore and not just giving with your money But what can you really sink your teeth into career wise that would light you up even if it made $60,000 a year instead of 300 That was my next question for you is if I'm going to start my own I already have I own the little team out here that does this kind of work I own a real estate company now that you know all started happening has passed two years I've just been investing in this and buying real estate now and I'm trying to figure out Do I start my own company and I don't really love selling solar and just being honest with you I'm good at it. I like making people laugh and telling stories and hearing stories But really, I don't love the idea of solar What would the company do if you started your own company? Let's let's go back to our sentence and then what you start a company and then what yeah We'll give you the book we'll give you King Coleman's book find the work you're wired to do I think that will help you get some clarity around at least the career aspect of this and I agree with George whole Hardedly man step foot in a local church I think you'll find a lot more than what you bargained for I think you'll find the community I think you'll find some sense of purpose and I think you'll even the more you get around people you'll start to figure out like What your path is and I think that you will be able to thrive from that being alone. It's not good for man to be alone Sure, yeah relationship helps too much time of you guys I just thought I would just I can't fake you can't fake safe. I wouldn't fake it No, I wouldn't either but you're said you're an adventurous guy. You've tried everything I would just try it. You got nothing to lose you might make a friend or two regardless of you have like a spiritual transformation and so I would try all of those things that you got a great path ahead of you You're a really sharp guy you're only 29 most people don't even start asking these questions until they're in their 40s and 50s and 60s So you're early man. You got so much time. So give yourself some grace If you're a business owner time is money and nothing drains both faster than a hiring process that doesn't work You need qualified candidates who actually want your job, but sorting through applications can cost you dozens of hours You don't have and that's where zip recruiter comes in zip recruiter automatically puts the most qualified most interested candidates at the top of your list Their new feature lets candidates tell you in their own words why they want your role So instead of guessing who's genuinely excited you know you get to skip the sorting and go straight to the people worth talking to at Ramsey solutions we can get behind that we only hire people who believe in our mission because a paycheck gets someone in the door But belief is what keeps them there zip recruiter helps you find those people faster and that's why I recommend it And listen to this four out of five employers who post on zip recruiter get a quality candidate within the first day So try zip recruiter for free at zip recruiter dot com slash ramsey that zip recruiter dot com slash ramsey meet your match on zip recruiter Welcome back to the Ramsey show and the fair winds credit union studio. I'm George Campbell here with Jade Warshaw Taking your calls at triple eight eight two five five two two five Brandon is in Denver Colorado up next. What's going on Brandon? Hey guys. Thanks so much for taking my call. Sure. How can we help? So my question is about baby step three. Um, so technically I'm still on baby step two. I'm gonna make my last That payment as soon as I get off of this call fantastic Way to go man. Yeah, I have a I have a thousand dollar Car payment left on my car. Wow, and I'm just I'm ready to pay that off and how much will you pay it off in total? 13,000 It was It was a really dumb mistake. I made straight out of high school. Um, I bought a car brand new car 22 person interest rate, but that's completely done with now. Wow way to go. How old are you now? I'm super relieved. I'm 24 now So took it took four years to do but Here I am now. So now that I'm on baby step three My question is how much should I save like how do you know three months or six months or in between I Love that question. I think it's a common question and it's a good question to ask so I look at a couple of things I look at are there dual incomes and if there's not dual incomes are there multiple streams of income for one Individual that would be something that I'm looking at obviously there if there's more streams then Maybe going down to three months is okay because there's just a little bit more security in the income I'm looking at health if you're a person who is in good health versus a person who may be is having chronic health things going on And you're in and out of the doctor and there's things that have the ability to affect the amount that you're able to work Obviously if that's the case then get me to six months, right? So those are the types of variable bulls that I'd be looking at are you a single guy? Yep, I'm single. Okay, and one income stream just one one job Yeah, I have one job one income. I make about 3,000 a month. Okay, then if I were you I would aim for six months for that reason another factor I might look at is your age if you're A little bit older and you're getting a late start at investing. I'd be okay with somebody you know saving three months So they can get started on investing a little bit sooner and then maybe with whatever margins left They can build that six months over time So those are the types of things that would play into that decision, but for you. I think six months is great How much would that be do you know your actual monthly expenses right now? Yeah, so my my wrench right now is pretty high Like I said, I take 3,000 a month In my rent is 980 a month, so it's almost a third of my take home. Okay, but what do you do for work that I'm So I do a construction and I make about I'm right now. I'm at 23 and hour Okay, I've been there for four years, so hopefully I'll go out a little bit here soon All right, so your rent is 980 and so you can 3,000 cover all of your bills? Yeah, I actually have about 700 margin each month. Okay good and so I mean on that margin How quickly could you get that saved up? I mean there's nothing stopping you also from getting a side hustle if you wanted to speed up the process Right think about this 15,000 dollars that'd be about five months for you if 3,000 bucks is what it takes So at a thousand bucks a month if you were sucking that away it would take you 15 months to save it up So if you want to speed that up and say man, I'd love to have it less than 12 months Well now we need to find a little bit more margin to accomplish that And that would be my goal right now Right now I have 4,000 saved and that's with my last Carping it being that free. Okay, great So you're a third of the way there which means 11 to go and I still hold fast to if you can add more to it by side hustling or picking up extra You know work at your job. I would do that because remember when we're talking about baby steps one through three For anybody listening the key is Going quickly like you want to be very very quickly gazelle intense those ones you want to go as fast as possible And then when you get to 4,5 and 6 then you can you know kind of lay it back and be a little bit more intentional It's not about speed as much great question Brandon. Thank you Charles is in St. Louis up next. What's going on Charles? Good afternoon. Thank you for taking my call. Absolutely. What's going on? So me and my wife are considering selling both of our high mileage vehicles Do you kind of repair that are needed for both and just buying one slightly used car? Would you recommend selling both of those and going down to one vehicle and if so, how much should we spend? Well, what's your family dynamic like do you guys need two cars? Would it be a real hassle to go down to one? It wouldn't be a hassle right now. I'm working from home and my wife goes into the office No kids right now, but planning for one in the next year I'll be I'll be straight up with you Charles. I love the idea of doing this Especially if the whole point is to get out of debt faster. How much debt do you have? Currently have no debt and the only thing we have a mortgage. Okay, so the the point is to pay the mortgage off quickly. Is that the big goal? Not really we're also a military family. So planning hopefully the The PCF cycle maybe in the next three years we're going somewhere else so maybe bringing it out after three years So what's the big goal for the money saved on undoing?
this. Not really a goal that we have. It's just we don't need a liable vehicle. Is that what it is? Yeah. We're in just to get a more of a live vehicle since since we do have some repairs coming up. Okay. So let's say are you going to do the repairs and then sell or just sell as is what the repairs needed? Thinking selling as needed right now. How much could you get for both of them by doing that? I think you get about about four thousand. Okay. How much do you have saved for this upgrade car on top of that? We could we could do about about 40,000. Whoa. What's your household income? Household income after taxes is about about 160. Okay. Fantastic income. That's a pretty that's going to be the nicest car you've ever had probably right. And you have 40K sitting there ready to go outside of your emergency fund. Out of emergency fund. Yes sir. Way to go. Good job guys. I like this plan. Yeah. That's not too much of your world. We always say make sure your vehicles and things with motors and wheels add up to no more than half your annual income. Now that doesn't mean you need to go get an eighty thousand dollar car because you make one sixty. You know, but I think it's a reasonable car for your world as long as that income is sustainable. What kind of car are you thinking about? Right now we're looking at the Subaru sent seven passengers just for future needs. You never know could don't have to buy a vehicle and you're really planning ahead. Let's keep this thing for a decade. Yep. Well, we have three or four kids. That's fun man. That is. You guys have the ability to do it. You've created the margin. You don't have any debt. You saved up. You're paying cash. It's all green checkboxes here. Or should we or should we just get the cars fixed and keep them? Well, that was my other thing. I was like, if it's, you know, too grand to keep the cars, it's not like they go bad after a hundred thousand miles. There's just some more maintenance and repairs. You guys can afford to do it. So if you're happy with the cars, you enjoy them. Just do the repairs and keep your 40 saved for that rainy day and for that future car fund when you do have a kid and life changes more dramatically. So now they're here and over there or you could just fix them and then you'll hopefully get that out when you sell them either way. So you got a couple of options here. All of them are good because you're doing it the smart way. Thanks for the call. If you're waiting for rates to drop before you buy a home, here's what nobody tells you. When rates fall, every buyer who's been sitting on the sidelines makes their move at the same time you do. That means more competition, higher prices, bidding wars, all that. That's why I tell people to talk to Churchill mortgage before they do anything else. Churchill gives you a strategy so you're not at the mercy of the market. They can show you what you can afford, not just what the bank will approve. And with their certified home buyer program, your financing is completely secured before you shop, which means when rates drop and everyone rushes in, you're already ahead of the crowd. You're not scrambling for pre-approval while the house goes to someone else. My husband and I bought both of our homes with Churchill and having a real strategy, not just a rate we were waiting for made us ready when it really mattered. So start your search with Churchill. Click the link in the description or go to ChurchillMorgage.com/RamseyOffer for an exclusive Ramsey audience offer. www.churchillmorgage.com/RamseyOffer Andy is up next in Baltimore. Andy, welcome to the show. Hey, thank you guys for taking my call. Absolutely. I just need some financial advice. Really, I was in a, well, I'll get to the point real quick. I was in a major motorcycle accident three years ago that left me and my wife, like I'm in a wheelchair. My wife has a traumatic brain injury and not to mention before all this, I used to work at the Port of Baltimore, making around 120,000 years. Now we're both on disability. You're bringing in around 70,000 years and it's just me, my wife, and three kids. Wow. Okay. So sorry, Andy. That is quite the uprooting of your life. How have you guys been making it these last three years? How has that journey been? It's definitely been really, really tough, but we spent six months after the accident in the hospital. And what's kind of crazy about all of it is I was in a coma for six weeks after accident. My wife was in a coma for five weeks. Wake up out of a coma to find out not only am I paralyzed, but my wife's actually, she has the brain injury and also she's pregnant. Oh my gosh. Yes, two weeks pregnant. And mind you, we stayed in the hospital six months. My first son got the liver healthy. It could be nothing wrong with him. And then I tried to also, too, like when we got out the hospital, we had a little bit of family help up here, like helping us out with the kids and all. But of course, you know, they can't stay forever. So everybody had to go back to their regular lives and everything like that. And I'm not so now it's just me, my wife, in a three-story town home with three kids, and the port will not let me come back because I'm in a wheelchair. And the work I used to do before this was all physical. Yeah. What are the ages of the three kids now? 13, 7 and 2. Okay, 13, 7 and 2. And obviously your wife has the TBI. You're in a wheelchair. You can't go back to work at the port, but is there another type of work that you could do from your chair that would allow you to bring in some income to supplement the 70K? Yes. And I'm available like to all open options. The only issue is I don't have a background like this far as I call this background. So any job I get, I'm going to start out of no $20 now, right? And then as soon as I start making that, then disability will drop. What's the limit that you can earn before your disability drops? 16, 600 gross a month. 1600 gross per month? Yeah. And I said anything over that, they said they start counting. I think the kids are supposed to go. Okay, so what if you started there? And what of you just said, Hey, we're making 70K. We've had a complete life upside down moment. And if I can bring, if we can bring in an extra $1,600 a month to supplement our income, that would allow us to do XYZ and you guys fill in the blank. And if it allows you to do what you need to do, maybe you hold off there for a while. And then maybe there comes a period of time when you go, you know, I think we've adjusted to this new lifestyle. I actually have my eyes on a career path that I think could earn me more than $70,000 a year. I want to go after it. Maybe when the time comes, you do. But I don't think that you have to make all these decisions and decide that today. You're going to go out and pursue something that's going to earn you over 70K necessarily today. If you don't see anything out there, I think it's okay to adjust and start start small. You've got a guaranteed cushion right now, which is nice as you try to launch into the next thing. So tell me about the 70K. Is that all SSDI? Yeah, that's so, uh, well, that we get SSI for the kids. I think they get like 900 a month of the piece for the kids. And then I think I get 1900 and my wife gets 12. Okay. And that makes under 70K for the year. Uh, yes. And then also too, I was just going to, um, throwing there that I do have, I got 50K in the bank. And I do have 50 grand in the news at the port. The problem is at the port. If I touch that, they won't 18%. You're saying if you cash it out. Yeah. And I've tried my butt off. We're trying to get down there and get back to work. How is the how's the annuity structured? Um, um, I'm not, I'm not too sure about that. Okay. Like that, but like, yeah, I'm not sure. I mean, I, I know like, well, it's working. So like the way it got accumulated, like that is every hour I work, the company will put $5 in retirement. And then you would put $5 into it to match it. But you can't take that and roll it over into an IRA without it triggering penalties. Is what you're saying? I'm not sure. It sounds like it'll take an 18% haircut if you try to withdraw the whole thing. Roy, I mean, you could definitely, you could sit down with a smart investor pro just to double check it and make sure that that's actually the case. What I really want to know from you today is what's you guys's budget look like? What this money coming in from SSI and SSDI? Is there any margin left at the end of the month? Yeah. So that our monthly expenses are around around about 45 to like 4700. And, and mind you, the disability month, I put us like right over five grand, I feel like we got a little bit of lead way, but I mean, you don't see it that much every month, but I feel like the bank account monthly stays around about the same. So it's around three or four hundred a month. Is that fair? Yeah, yeah, yeah, around something like that. Yeah. Okay, so what I would suggest, and I don't know if you have this already, do you guys happen to have an every dollar budget? No, we don't. Okay, we're going to give you that for free. We'll give you a year subscription for
for sure for free. And I think if you guys sit down tonight and you plug in all the numbers, again, the 1900 to the $1200 to the $900. And then all the expenses that you guys, you know, spend money on. And something that will help is go back and look at last month's bank statements. And that'll give you a real clear picture on this is what we spend on groceries. This is what we spend on, you know, picking up food. This is what we spend on all the different things. Fill those numbers in the budget. And I think you're going to understand and see, okay, that three to $400 in margin. This is kind of how it's been getting eaten up. And you guys can make some intentional decisions around not doing those activities or how often you're going to do those activities. That sort of thing. Do you guys have any debt? Yes, we have 18,000 left in Cardipale. And then I have $3,000 on the $25,000 credit card. And that's it. Okay, good. I'm so glad. And a house too. I do have a house. I pay 265 for $2.30 an hour. I probably can sell it for three hundred. Well, I don't think we need to sell anything just yet. How much is your mortgage payment? It was $16.98 a month to the next 17 month. Okay. So I would just chill on the house right now. Again, you guys have had a lot of changes happening. It's a reasonable part of take on pay. So nothing's on fire there. And it sounds like you get your expenses under control. The key for you guys is making sure that you can live off the 70K with room left over to still live life, save for the future, all of that. And if you can, it sounds like you can pay off all of your consumer debts today with what you haven't saving. Yes, I can. I just didn't know if that was the right thing. I get nervous about taking the lunch on money and dropping it on something. That's all. Well, the good news is it's not all of it. You've got 50,000 in the bank and you've got $21,000 of debt here. So you'll still have a nice cushion. 30K left over. And with the three to four hundred dollars in margin, you could build that up to six months. And I think if you do that, you'll really feel a sense of security. And like I said, there's still an opportunity for you to go out, pick up a little side hustle. Maybe it's a customer service gig or something and pull in another $15,600 a month. And that would really feel good, I think. Now you've got some money you can start to invest. And you free up all those payments on the debts, which is also nice. So I would definitely pay it off. You're not going to be in a lurch. You guys have margin left over. You'll rebuild the savings. I mean, it sounds like 30K is plenty for your emergency fund anyways. So that's a good spot to be. But I'm so sorry about your situation, Andy. That's heartbreaking. I mean, if he could start to pick up a side job, I mean, they've been living off the three or four hundred dollars of margin. Let's pretend he gets a side hustle for 1,500. He starts investing a thousand of that into a Roth IRA. I mean, that's a great, a great goal to have and it just keep working still creating a stack. Yeah. And the truth is I just pulled up the statj a one in four people will become disabled before retirement. So a lot of people, we talk about term life all the time. Yeah. If you were to pass away, what's going to happen? And so we talk about having that in place. But long term disability, important is crucial. And luckily, you know, Ramsey covers team members here with long term disability insurance. But if you don't have it, reach out to Zander today because this is not a situation you want to be in where you're hoping to get SSDI because that can be slow. It can be hard to get. 65% of the initial claims were denied in 2009. Average benefits about 1,600 bucks a month, which is less than 20k a year. So a lot of times it's just not enough to supplement and replace your income. Oh, that's a hard lesson, Andy. But we're wishing you guys the best. Then clear on the debt and figuring out this new life. If you're looking for extra cash in your budget to knock out the baby steps faster, start with your bills that are on auto pay like your phone plan. If you haven't looked at your phone bill in a while, you're probably paying 100 bucks or more every month when you could be paying just 25. That's why I want you to switch to boost mobile. You get unlimited wireless for $25 a month and that price is locked in forever with no contracts and no hidden fees. How much would that save you every month? How much faster could you get through your next baby step? Plus with boost mobile, you get to keep your phone and your number. So nothing else has to change except how much you're paying. Switching to boost mobile is a no brainer because it's one of the easiest ways to free up money in your budget. Go to boostmobile.com/ramsy and make the switch today. That's boostmobile.com/ramsy or click the link in the description. $25 for ever requires customers to remain active on boostmobile and limited plan. Taylor is in St. Louis up next. Taylor, welcome to the show. Hi, thanks for taking my call. Sure. How can Jaden and I help? So a little background, me and my husband have been budgeting with the every dollar app for about a year now. Awesome. Actually, yeah, we just renewed our subscription, but last year he was traveling. We do live off of his income specifically. And actually, last year I was babysitting in home. So we were having a little bit of supplemental income. And we were making significant amount of money that we were able to obviously pay off two of our debts in the process and really turn down some others. But this year we've made a big adjustment because he's no longer traveling. And now I am going to school and not babysitting. Therefore, we're strictly living off of one income. And his income is a little erratic considering he is hourly and he's also union. And so there's some weeks where he rings out. And it's just not a very consistent income. So my question is like, what's like a low month? It's a great month. A great month is probably around 8,000. What's a bad month? A low, bad month would be like three to four. Okay. And how much when you do your every dollar budget, like how much do you guys need to have to just kind of keep the ship rolling? Not all the bells and whistles, just what's that bare minimum number? I would say a good week because he gets paid weekly, a good weekly income to be able to pay like all the bells, including like fast and groceries would be about a thousand. So $4,000 a month is what you need to make your budget run. Yeah. So even on a low month, you could scrape by. Yes. Okay. We do not live on any sort of credit cards. We definitely like make ends meet. Good. Do you guys have any debts left? We also have three children. Well, that's why I asked about the what it actually takes to make your budget run because if you tell me, hey, it takes $4,000 that covers rent, groceries, gas, all this, all that. Now we may not be going to the movies that that month, but that's what it takes for us to do what we need to do. That's pretty great. Yes. The bigger question then becomes how often does he see a month that's above $4,000? Because then it's like we got to see margins sometimes. Otherwise, we're not going to be able to accomplish any other money goals. Yes. And that's so like some of our time is obviously we've had a great year this year, none to come of round days. But as winter is approaching with this new job, he's made me aware that this specific company is known to like sit there and then pretty frequently if it's even just a little bit of bad weather. So could he do something else that day? For example, I do have an uncle that he has his own electrical business that he has offered to let him obviously help him on those days. But it should definitely not like enough money to be able to make up for the day that he's missing. What's the type of work he's doing specifically your husband? He's a heavy machinery operator. Is there another company? Is there someplace else where he could do that type of work where it's a little more steady? I mean, there's a ton of companies, but he works for the union. So like he can basically hop company to company. But we prefer him to stay union just based on the fact that at the family of five, we don't even have to consider paying for insurance because it's completely paid for. True, but if you and I'm just floating out ideas, if there was another opportunity that was non-union and it paid more, it was more stable. It was eight grand a month guaranteed. Yeah. Now you could budget for the health insurance or that's maybe subsidized from the employer. So it just might be worth looking at the options for the long term if this is going to be a stressful way to live. But the simplest way to budget when you have a regular income is to have a peaks and valley fund where on a great month, you know you don't need it all. So let's set some aside over here in savings and then we can pull from that when we have a really low month. Yes. And that's what we've been doing. I guess I'm just getting a little nervous for the winter time. Well, if you've got that money there, I mean that's going to make you feel a lot better. The next question I have for you is you're schooling at what point will you be finished and what will you be doing and what will you be earning?
I'll be finishing about two years, I'm actually doing nursing, and so I'll be making anywhere between 70 and 120. Okay, great. So we've got two years of kind of grinding it out. It's not forever. If you do what George said, it's tough. I'm not going to lie, I've always been on an irregular income and it does have its challenges to it. You have to be on top of it. Maybe a little bit more than someone who has kind of that steady nine to five paycheck. But I think if you do all of this, it's going to work out. In the months where it's tough, just do that prioritized budget where it's four walls first. Maybe you have a month where there's only three thousand and you're like, man, I really don't want to pull from that peaks and valleys priorities first. If there's a couple of things that you can cut out a little bit more to not have to dip from that peaks and valleys, that's even better. I'm so proud of you guys for making this work. That's a hard challenge to still do a budget because a lot of people think, well, my income's not consistent, so budgets aren't going to work for me. No, you need a budget even more in that case. It's been a challenge, especially while his parents are very frugal and they also make a significant amount of money and so they really like to involve us in things that require a higher income. Oh. A lot of times we have to say no. Yeah. That doesn't sound very frugal. That's maybe for that. Yeah. For them. Yeah. Well, thanks for the call, Taylor. I'm proud of you guys for sticking to that budget and you'll get the hang of it. It takes a little bit a couple of months. You guys have been doing this a year now, so you clearly know your numbers. That's half the battle. Jalen is up next in Atlanta. Jalen, welcome to the show. Hi, nice to be here. How are you? We're doing great. What's going on? Hey, I'm Jalen Martinez, I'm 27 years old and I live in Atlanta, Georgia and three years ago, I made a big mistake about a car at 2023 to a camera at a 19 percent interest rate and a $814 car payment. How much was the total cost of the car? The total cost of the car was $61,000. Oh. They make $61,000 cameras. I didn't know that was a thing. Yes. And that was the bigger mistake was not the $61,000, it was the $61,000 on a camera. That's pretty wild. Okay. So it's been three years. Where is it at now? What's left on the loan? So I pay $28,000 on it and I still owe $27,000. How much do you make? I make $57,000 a month. Good. All right. And what's your question? Well, I've been watching the show recently and I want to get out of debt, but I don't have any other means of transportation. I do believe that I will be okay without a car for a while. I am a truck driver, so I'm not home very often. And the reason that this question has sparked my interest is because I recently had a dealer offer me a $23,000 for it when I was doing my oil change. You owe $27,000. If a dealer would offer you $23,000, I wonder if you could private sale it for the exact cost that you owe. Have you looked into private sale? See what it would be worth? I haven't looked into private sale yet, but I did ask some other dealerships and the $23,000 was the highest offer I got. Okay. Have you done like the, you know, Carvana, CarMax, all of those as well? Oh, no, I haven't done those. I'd get offers from everywhere and that'll give you at least you'll know your sort of floor. About at least I can get this. Then go see what your car is worth, you know, and Kelly Bluebook for private party value and you might find you could sell it on Facebook Marketplace for $26,000 and only be $1,000 underwater. Do you have the difference in cash? I do have the difference in cash, yes. Right. I like this plan. I would sell that thing. It's just too much of your world. For a guy making $68 to have a car that you bought for $61,000 is wild and so. But then when he has the payment freed up, he can save up very quickly to get a $5,000, $6,000 beater that you can drive in the meantime when you're not on the road. Sock away $1,000 a month. You got $12,000 in a year. It's awesome, man. Way to go. No mistake. If you're living like no one else with your money, you're probably being smart with your entertainment choices too. The truth is finding entertainment that's high quality and the lines with their values is not easy. That's where Angel comes in. They make movies that check all the boxes. Values driven, quality, and as I'll get to in a minute, affordable. And it's why I'm excited to see Angel's latest movie, Angel in the Bad Man in theaters now. It's a classic western with a big name cast. You got Tommy Lee Jones, Zachary Levi, Neil McDonough. 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And a lot of times, nobody gets married planning to become roommates, but life gets full kids, work, pack schedules. And just like your money, if you're not super intentional, it just becomes kind of lazy, sloppy, and you don't want to become roommates. And that's why John wrote this book, he explains why marriage can feel so hard, why you are still matters and what you can do to make it great. And he gives couples practical tools to reconnect and build a stronger marriage. You can pre-order right now for $24.99 and lock in a bunch of free bonus items, including the enhanced audiobook, early access to the e-book, and access to his exclusive video, Dr. John Dallone, Unconnected Communication. Get your copy now, ramsysolutions.com/store, or if you're watching on YouTube or podcast, just click the link in the description. John Dallone is in Raleigh up next, what's going on, Michael? George, how you doing, man, having me out? Great. Thanks for the excitement. Woke me up. Awesome. Awesome. That's what I'm talking about in this afternoon. Look, I got a big question for you. I completed all of seven baby steps. My wife and I, we worked really hard for 10, 11 years on this. Wow. Way to go. We are finally able to get debt free at the beginning of this year. There's your mini one for now. But the second part of this one here is, unfortunately, a month ago, I lost my job. And the craziest thing about this is how much peace I have over the whole ordeal. But I've been in traveling sales for the last click here. And my biggest question is, you know, I was making about 120 a year. And we were doing pretty good. We're living off about half of that. And then we were talking, I mean, everything towards our house, our son's college, you know, and we were able to invest. But I don't know if I can give you all my numbers and you can see kind of what picture I'm in right now. Sure. So you were making 120. You lost the job. Was that the only income source for the household? Yes. Yep. Okay. Yep. So our house, we paid that off earlier this year. And it's probably worth about 450. That's great. We have about 300 invested across, you know, different 401ks, a couple of different broke ridges. But we got a 20,000, about 20,000 in our, our son's college fund. All right. And then about 60,000 in our emergency fund. Good. So my biggest question here is, you know, after losing this job, I mean, I have, you know, so much peace over the hill. Do you, I've been praying for a long time that the Lord would kind of help me out and find something where I could stay local instead of travel, I used to travel the whole east coast here as a travel ensalesman. What were you selling? Ag chemicals. Yep. Yep. Okay. So the, the ag scene is kind of tough right now. Just with some terrorist situations and, and the ag economies a little bit. But do you want to stay in sales? Well, no, that's the, that's why I'm calling to kind of see if it's all right to transition into something. I have career passions other than agriculture. I mean, I do love agriculture, but what do you want to do? I want to jump into.
the health care scene. So, you know, some of my education has been towards that. And with about maybe three or four months of clinical work, I can jump into a health care field that allows me to, you know, offer hope and healing to people. But the catch is, it doesn't pay a whole lot to start out with. You know, it's kind of one of those things where you got to jump into it. And maybe after a couple of years, you might be up to 80 or 9. What kind of role is this? What would your title? It would be a medical lab technician is the role. Okay. And so you can kind of jump up with the degrees I have into a medical lab scientist, you know, after a couple of years of work here. Is there any other education that's required? No, I know. I've kind of, I've been taking, I've taken classes, you know, I mean, I graduated from NC State. Oh, 15 years ago, and had a strong career in agriculture, but I'm kind of jumping into this health care profession, but I've taken classes all along just because I enjoy taking classes. And it's kind of been always something that I've been interested in just for personal health. I mean, I'm really into personal health, but I just want to help people, man, that's at the end of the day. Well, you guys were used to, when you were making 120, you said you were living on half that. So you're, you're used to living on 60. And the good news is you've, you've set yourself up beautifully. I mean, you have no debt. Your home is paid off. So is 80,000 the highest end that this pays or? Yeah, I mean, it's, it's probably 80 with 80 to 100 somewhere in there. I mean, it's never going to be something without what I'm used to. I mean, I don't think that's a horrible thing. You'd be in a career field that you, that hopefully that you learn, you enjoy and that you love. You're making 80 to $100,000 a year with no home payment. Nothing else going on. Yeah, the key is, do you have enough margin after covering household bills that you still can fund college fund retirement, save for the vacation, upgrade the car and have a great life? So if you can do that, making 60K as a lab tech, that's great. And then try to, you know, increase your income and grow your career from there. But I mean, you guys have created a situation where you've earned the right to do what you want and try it out. Now, the key is, what are you going to do in the meantime? Are you going to go get another sales job? Oh, no, that was the, that was kind of the question. Can you go get a lab tech job tomorrow? So I do have a little bit of a, you know, severance where I can, you know, do the severance or do the clinicals while I'm okay using the severance. How much is the severance? I was about four months. So like the time frame, the Lord is really working these things and that's so four months, you can finish your clinicals and get a job. Yes, cool. That's not a bad plan. I mean, I just would try to not touch the emergency fund, but if you're saying you can live off the severance, cover all the household bills and more while doing the clinicals and cash flow, all of that and land a job four months from now, go for it. Yeah, that's great. Awesome. That's what I feel like and I feel like that's what the Lord's steering me towards, but at some days, I kind of get a little disheartened when you kind of just think about the financial situation as far as like, you know, we were pumping the savings pretty hard, you know, and that kind of did feel good at the end of the day. And when, you know, you listen to Dave Ramsey, when I listen to Dave Ramsey all the time, it's all about living and giving like, you know, one day, like no one else. And I just was, you know, feeling concerned. Some days like, well, I'm not going to be able to be as, you know, generous to certain things that I have in the past, but I am going to have a lot more time to invest in my child and, you know, you're going to be a present day. I mean, you've been on the road. So this is, this is going to be a great life change, even if this is for five years. And maybe you go, all right, I did that. That was great. I want to try something else. You're young. You got time. You've got margin. Those are the key ingredients here. And so I would definitely pursue this with the hopes of, I think you can make one 20 again. And it might be, you know, there might be a different career path there, but healthcare, the sky's the limit. So I would go for it, man. Way to go. Thank you for that call. That's a tough one, Jade, because a lot of people, we took a call earlier from a guy making $330,000 doing door to door roof and solar sales. Yeah. So if he takes another job that doesn't suck the soul out of him, he might be making $100,000. And that's, that's the reality. That's okay. There's more to life than your income and your income is certainly not your, your value. And it doesn't denote, you know, we always say your net worth is not your self worth. And so I think that this is one of those things where you said it beautifully, when you've worked hard, you've paid off the mortgage, you've invested the money, you've done all of those things that make you a financially responsible adult. You've earned the right to do the thing that maybe earns you a little less in life, but you're a lot happier person because of it. Yeah. And, you know, maybe once the kids are out of the house, the wife goes back to work. And now you increase your income on the second half of your life and you're able to do all the things that you wanted it to do and give like you want to give. Yeah. Absolutely. So it's all about your budget, your lifestyle. And if you can keep that low like he did, yes, we don't need 120. Now if you make yourself live on 120 and you increase your lifestyle, it's going to be really hard to go down to 60. Yes. It's real hard to go backwards with your lifestyle. So that's my caution to anyone out there. As you make more money, try not to just go spend it all. Now you can enjoy some, save some, give some. But if you're always riding the line, yeah, if we spend exactly how much we make, it's going to be a tough life, no matter where you end up. So good reminder from Michael and we're wishing you the best with this next phase of your career. If you've ever thought I don't even know where to start with life insurance, you're not alone. And that's exactly why I recommend Zander Insurance because the insurance world will throw everything at you, confusing words and add-ons like writers, whole life crap called an investment, return of premium and it's all total junk. And most of that confusion you feel is by design. When you're confused, you make bad decisions, expensive decisions. But Zander doesn't play that game. They cut through the noise and help you get simple, affordable term life insurance that actually does what it's supposed to do. Protect your family. They shop the top term life companies to compare your options on the coverage that your family needs, no more, no less, no pressure, and no upsells. Just clear answers and the protection you need. If you've been putting off getting term life because it feels overwhelming, stop worrying and get it handled the right way. Call 800-356-4282 or go to zander.com. That's zander.com. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell here with Jade Warshaw. Open phones at AAA825-5225. Melissa is in Phoenix up next. Melissa, welcome to the Ramsey Show. Hey, I'm so grateful you guys took my call. I have a quick question about the baby steps. I've recently completed baby step two and was preparing for baby step three. I had a little discussion with my family and my brother reminding me that I had co-signed a solar loan for him several years ago. But my question is, you had to forget about that and why is he reminding you? That's even scarier. So my question is, he says that there's about $30,000 left on it. Do I now just start paying all that loan because I've co-signed on it? I have no-- Is he not paying? I believe that he is. He's absolutely making the payments. He's current on it and everything. Okay. Do you have an emergency for that? Do I let him? I do not have an emergency. You're starting baby step three. You did say that. Yeah. I wouldn't start paying it. Now, know that it is your debt and in the case that he does stop paying, it's going to be on you. But at this point, he can continue paying it and he can refinance it and get your name off of it, can't he? How bad is his credit? I honestly have no idea. I did not even think about that. That's a great idea. Look into that and look into a co-sign or release as well. I don't know if he's doing better financially now. The fact that it required a co-sign or tells me something. Yeah. At the time, but you said this was years ago? Yeah, it was about seven years ago and as a matter of fact, the company he had installed is no longer in business, but the finance company is. They're going to collect. Well, I was going to say for some reason, he's not able to refinance and you're not able to get off this. I would make sure that when you save up that emergency fund, I didn't make sure there's at least 30,000 in there. So if for some reason, it doesn't sound like you see this happening, but if for some reason he stops paying, it becomes a problem. You could reach over there and pay it off and clear your name out of this. And then just go back to baby step three. Yeah. It temporarily puts you back into baby step two if something were to happen with this co-sign loan. What's been the conversation lately around this? Why did he bring it up? Oh. So we had a discussion. I was like, "Oh, I'm going to be debt free in November." And you said, "Oh, I'm already bit free."
whatever, whatever. And I said, "Oh, that's crazy." Because you already paid off your solider, it was like $90,000. And he's like, "Oh, no, I didn't." So that's kind of how it came up. And then I said, "Oh, yeah, we need to look into that because I think I co-signed on that." But I knew I co-signed on it. But I wanted to be gentle about it. So he doesn't have debt except the solar alone. Is he making extra payments toward it to get rid of it faster? I don't know. I didn't ask him yet. Are you a homeowner? I am. Okay. I mean, obviously, as long as there's, if you've paid off all of your debt, your credit score is not going to roll to zero because this is an open mine of credit. And so just know that's going to affect you and the things that you're going to want to do going forward because now you've got a credit score. And there's this thing on your credit score that it's not even fully in your name, but it is affecting you. So that's kind of the bigger part of this. And that's probably the part that I'd bring to him and say, "Hey, I'm really trying to do this no credit score thing. If you can get me off this loan, I'd really appreciate it. I realize your interest rate might end up being higher, but I have my own goals and it's time for us to part ways." Also, just side note. What the flip is going on with people paying $90,000 for freaking solar? I don't know, but our guy from the other hour was the one-sided to me. That guy making 330 grand. He's making money off of it. He sure is. He'd ROI 15 years later once you break even on your electric bill in sanity. Okay. Andres up next in Harrisburg, Pennsylvania. What's going on, Andres? Hey guys, thanks for having me. Sure. I guess I'll go a quick one here. So once I were 28 years old, and outside of our house, the only debt that we still have is around about $30,000 towards our student loans, as they are ours, my student loans. At the same time, so I realized I did yours that's a little bit backwards order. We have an emergency fund already of about $15,000, and another 30 invested in an investment account, so another 30,000, that we've had that for a little bit over a decade now, and that's on average brought in about 10% every year. And the student loans are broken up into multiple, but on average it's like 4.3% interest rate. Doesn't make sense to use our investment account or some of our emergency fund to knock out our student loans now, or just kind of like keep chipping away at it. Not doing minimum payments, but it would take me probably a year and a half, or whatever, so knock off the rest of it without touching the investment account or the emergency fund. I mean, well, I definitely would not touch the invested money. Is that retirement, or is that just taxable brokerage account? I've spoken up into a couple of different things. It was something that would set up whenever my wife's father passed away because of her a decade ago and started out as a small amount and has just done well. What type of account is it? Yeah, are they IRAs? Like what is it? I think some of it is IRAs. I'd have to look at the breakdown of it. All I know is that in the breakdown it's done about 9.8% on average each year. If you're very caught up on these interest rates and on these compounding rates, if there's any money that's in a brokerage, if there's any money that's single stocks, any money that's not tied to retirement, honestly, that money's up for grabs. The 15,000, I would touch that money to start paying this debt off. I keep a thousand there. The way we teach Andre is to make sure that you have a thousand dollars saved. That's baby step one. Then baby step two is to pay off all of your consumer debt first. Then you turn around on baby step three and save three to six months of expenses. The reason that we teach it that way, it does feel a little bit. It's hard for people to reach over and pull a lump sum of money. But the reason that we do that number one is it allows you to have the full power of your income, obviously, at your disposal, to tackle debt. It also acts like an insurance so that when you finally do start to invest, that money is invested money. You won't need to reach over for it to pay off debt. You won't need to reach over to use it to pay for an emergency. There's method to the madness. I would suggest you do it that way. Gotcha. Dig into our emergency fund, even at least to grant in there. Also, if there's stuff in the investment account that isn't tied to retirement, you said that's up for grabs. That's up for grabs. Obviously, there's probably going to be some taxes on it. It'll be minimal. It'll be minimal. If you pulled out 15 and it's long-term capital gains, it's going to be zero to 15 percent on that amount. We're talking hundreds, maybe a thousand or two on that. I wouldn't worry about that, but I would definitely do it to become debt-free today, and then rebuild your emergency fund with all this newfound margin. You freed up the student loan payments at the very least. Are you guys currently investing? I have a 401K. How come? Originally, at my first job, we worked investing towards it. I was gnashing up with it. Once we started getting a little bit more intentional about saving towards knocking off our debt, I stopped contributing to our 401K. We're kind of doing the emergency plan. Once you guys are debt-free, if you follow through the steps, baby step two, knock out consumer debt with the debt snowball method, baby step three, fully funded emergency fund. Now we can go back and do it in order, three to six months expenses. Then once you have that, start investing 15 percent of your household income, which is what? What's that number for the year? Let's see, after taxes, we're probably bringing around 90K. So before taxes, it's going to be six figures. So we're talking over $15,000 a year invested for the rest of your life. You are going to be a multi-millionaire, and you're not going to be trying to arbitrage against interest rates from student loans and investment accounts. The Ramsey Cash Giveaway is back, and this year we're giving one lucky winner $10,000 in cash, plus we're giving away $500 every week. Just imagine what $10,000 of breathing room could mean for your family this Christmas. Come back and enter daily for more chances to win, and there's no purchase necessary. Just go to ramseysolutions.com/giveaway. That's ramseysolutions.com/giveaway. Our question of the day is brought to you by Ask Ramsey, your free AI money tool that provides personalized money answers based on Ramsey principles. Check it out at ramseysolutions.com/askramsey. All righty. Today's question comes from Jordan in Rhode Island. He says, "My wife and I have been following the baby steps and have questions regarding investing in baby step four. Is it better for us to contribute each time we get paid or save up to do the max contribution at tax time?" I'll tell you, I am a fan all day long of every single month taking 15% of that gross setting it and forgetting it. If you work for an employer and they have a 401k, you just set it up with HR. It's happening automatically, so it's not this thing that I'm having to do on my own. It's called dollar cost averaging. That way, you're experiencing the ups and downs of the market as it's happening in real time. I think another advantage to that versus waiting until the end of the year and doing this lump sum is as you're acquiring that money, there's things that have the ability to creep up. There's always a trip to the Caribbean that sounds real good. The year marked this for investing, but now the car could use a repair and the home renovation. I do like the idea of having that discipline to just do it every single paycheck no matter what. You're right, the employer side, I think is the most powerful because it gets taken out of your paycheck to where you can do nothing about it. You don't even feel it. It's gone, you got to live off the 85 now. Yeah, and you get used to like, this is my paycheck, you're not hunting around for the rest of it. Like, oh gosh, I really feel that. You remove the room for human error. Yeah. Of gone, well, maybe we'll invest, maybe we won't. So, and the sooner you invest, massively, and research will show, you're going to have a bigger number at the end. The sooner you get that money into the market versus waiting and stair stepping it. Great question, Jordan. Yeah, it is. All right, Lindsay is up next in Charlotte. What's going on, Lindsay? Hey guys, all the time. We're just hanging out having a great time. Excited to talk to Lindsay. Thank you so much. Thanks for taking my call. A long time with an efforts time caller. And my husband and I went through FPU six years ago. Awesome. Totally changed our lives. We were able to pay off $180,000 of debt. We're now debt free, going into baby step four. We're actually weeding FPU at our church now. Just it's changed our life so much. And now a little, I'm doing a little conflicted about baby step four. So I'm just looking for some guidance. Okay. What's the conflict? Okay. So, I was in military for about 12 years. And during that time, I was always contributing. They did a 5% match. So right now, we have about $130,000 in our OCSP. And when we're kind of looking at how much we want to say for retirement, we know the rules say 15%, and very much of a rule faller. So that's kind of what I think I should be doing. But at the same time, if we put the full 15%.
percent, it kind of slows down some other projects and stuff we want to do around our house. And so I guess my question overall is, you know, how much money do we need in retirement? I also have a pension, which I know we're not supposed to count that, but you know, I guess it feels like if we put the full 15 percent in with what we have now in my pension, that we will just have so much at retirement, and that we're not able to use some of our income like right now to do some things we want like with our kids and our family and things like that. Well, let's run some numbers. So how old are you guys? 34. You're 34. And let's just pretend, I mean, for you, what would be an ideal age to retire? Between 60 and 55. Okay. So I'll put 60 on here. And what would you say is 15 percent? What's 15 percent of your gross income today? We make about 200,000, so it would be about 30,000 a year. Okay. 30,000 a year. What I'm basically going to do, and I've got the, I've got the Ramsey Solutions calculator pulled up, and what I'm going to do, so that's 2,500 a month, plugging that in, and 11 percent rate of return. And so that gives us $6.6 million. So what we're looking at here is we go, hey, let's pretend that rate of return continues, somewhere between 10 and 11 percent. So that's $660,000 that you could ideally pull off of that nest egg. That feels like a lot of money. Agree or disagree? Agree. That's 60,000, and I mean, this is napkin math, that you could pull off it. The nest egg doesn't change. So there's part of that where you go, that's exactly what I want. I want to be able to leave a legacy. I want to be able to do that. But then the other part that you're saying is, well, when is enough enough? $6 million probably sounds like plenty to you. Right. Is that the question? Yeah. I imagine having knowledge money in my life. Yeah. Now a picture of what inflation will be. Yes. Now there's 26 years from now. And what life is going to cost and what your retirement dreams are going to be and what you can and can't do based on how much money you have. And so there's a part of me that goes, we can look at the history of the stock market and go, okay, 10 or 12 percent is what we'll get. What we don't know is what life is going to cost, what health care looks like, what our careers look like. What inflation will be. Can we work until this age? What if we want to retire early? And so having options is always going to set you up for the best life. And for that reason, plus the discipline of just having the muscle build of we invest 15% of whatever income comes our way, that's where I go. How can we accomplish these home renovations without messing with baby step four? Yeah. I just want to reiterate. George couldn't have said that better because we love the calculator to project out and give us hope and go, okay, there's hope for the future. But the truth is, you don't know what's going to happen next week. And so doing that today to set yourself up for the future is so, so important. So what are these renovations going to cost? The main thing is we live in a home with an unfinished basement and we have two kids and one on the way and our older kids are four and six. And so we would love to be able to finish out the basement and make it a family space. Have more room for like for hosting when our family, our, our house is kind of like the gathering point for family for Christmas and holidays. And so just wanting them to be able to have a space for their friends to come over and kind of being that house like, you know, so it would probably cost between $70 and $80,000 to like fully finish out the basement because there's nothing done with it right now. So that's kind of where we're like, you know, I'm trying to reason of myself. Maybe we only put 10% into retirement and put the rest towards the basement until we can finish that and then go to 15%, but then I feel bad because I'm not following the rules. Well, don't feel shamed that there's not meant to be legalistic. It's meant to create this parameter and create a baseline because we know that if people invest 15% and they're in their 20s, 30s, 40s, they're likely going to be multi-millionaires and retire with dignity. So you, you could, I mean, there's no law saying you can't invest less or go down to zero for a short period of time. My challenge to you would be how do we come up with 70 grand in the next 12 months without touching that? And now that it becomes a new problem, we can kind of reverse engineer it. So how much do you have saved currently for this project? Nothing because we are just now entering into like, baby step four. Okay. So we don't have any, yeah, emergency fund is fully funded and now we're kind of on that teetering line of like, how much do we put into retirement versus save for this project? Yeah. How much margin is there after? Let's pretend you have put 15% aside. How much margin do you have left over to do what you want with? If we put 2500 a month towards retirement, we'd probably have an extra maybe 1500 a month in margin. Okay. So based on that, and let's say it does cost 70 grand, 1500 bucks, it would take you four years to save up. So even without investing, let's say you were able to do, let's say you went down to, you said 10%, so 20, 20 grand a year instead of 30. Yes. Okay, so that would give you an extra 833 bucks a month, right on top of your 1500. So that means you could save up in a year, 28 grand. So it's still going to take you a couple years. So either way, it's not like this investing or not investing is the maker break of you guys doing this project in the next year or not. It's still going to take a while to save up that amount of money. So what is the urgency? Is it, we need it by next Christmas? Or is it, hey, this can wait? It's just going to be a little bit tight for the next couple of years in the house. Yeah. There's no urgency. I think we would love to have it done while, again, while like the kids are in the house and while the whole family can enjoy it, my goal would be in the next five years. So if we could do it in the next five years, I think that would be great. Then I would make a stretch goal and say, let's say based on our math, it would take you less than four years to do it while investing 15%. What if you said, hey, we're going to do it in three years. And that means our income is going to need to go up or expenses might need to slim down, but let's set a three-year goal to save 70 grand. Let's say let's 25 grand a year. It's two grand a month we need to find in our budget to throw towards this high-yield savings account for this goal. That's the stuff I like to do to make it real to me. And once you guys align on that, it's going to show up in the budget. You'll be amazed at how you find the money when it matters to you and make it a priority. Hey guys, Dave Ramsey here. Every day on the 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 anytime 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. Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck and agents who know their stuff. Well, Ramsey trusted insurance pros are vetted in coach to make sure they're market experts who have your best interest at heart. So go to RamseySolutions.com/coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent. Maddie is in Columbia, South Carolina up next. Maddie, welcome to the show. Hi, thanks for having me. Sure. Well, briefly, I depleted my retirement fund and my savings fund over the past two years while I was out of work being a full-time care ticket to my mother and I'm just returning to the workforce and I really could use some pointers on how to quickly rebuild my retirement and savings. So I don't have to work until I'm like 80 or 90. Wow. How old are you? 43. Oh, okay. Good. You got plenty of time. Yeah. That's some good news. You're not in retirement right now with no retirement. So how much did you deplete over those two years? What was the amount? Around 35,000. So not an enormous amount, but was I 401K's IRAs? 401K and a little bit of savings. Is there any left in there? Maybe a thousand at the most across the whole of them. Yes, ma'am. Do you have any debt? I do. I total about 28,000 in debt. Okay. And now that you're back to work, what are you doing and what are you earning every month? I'm an assistant. Sorry. You broke up on us, Maddie. Say that again. I'm an information systems analyst for a local technical college. What do you mean? 65K a year. Great. Okay. What kind of debt's the 28,000? My car loan is about 11,000 in debt and a credit card is about the other 17,000. Is that across multiple credit cards? No, it's just one card. One card, 17. Okay. So your car loan is your next smallest debt? Yes, sir. Hmm. Well, when's your first paycheck today, actually?
How does it feel? Overwhelmingly just relieving to have income again. And your single? I'm married with a small child. Okay. So that's add some income to this and also adds another layer to this. What's here? About a hundred K a year. Well, that changes the game. Are you on your own financially? What's going on here? You guys have separate finances? We do. He takes care of the household bills, but we don't have like joint savings or joint retirement or anything of that nature. Does he have his own debt? Not much. He doesn't really believe in credit or debt. Does he have does he have retirement funds? Do you know how much? Last conversation we had he has not started saving for retirement. Okay. He's a veteran. So I think he's been kind of focused more on that taking care of him if anything were to occur. So out of his hundred K, I'm guessing he has plenty of money left over, right? I would think so. Where's that going? Personal account. I was living. So let's say he has 30,000 extra dollars just sitting in savings for fun. You're saying he wouldn't reach over and go, you know, why don't we just pay off your debts? That's not going to happen. I don't believe so. I think he would help, but I think it'd be more of he want to see me take on the boat. Or what if, let me ask this question. What if you said, hey, let's pretend you pay off your debt and you start to save for retirement and you're putting aside, you know, 815 bucks, 15% of your income. And you said, hey, I'm putting away 15% of mine. And we put away 15% of yours to another 1250. And then we can have this big lump sum for us to retire together and make sure that we're secure. What would he say to that? I think he'd be able to do that as long as I could show him the numbers. We'll do the wins together, but we won't take the losses together. Unfortunately, yes. Okay. Well, listen, at least you know where you stand. I'm just, I'm just looking for all the variables here because you could be debt-free so much faster if you guys aligned on your money goals and decided we make $165,000 together. So a lot of money. You know, quickly you could pay off 28 grand, months, you know how long it's going to take you, a couple of years. And so listen, you're, you got a roommate at this point financially speaking. And so I would have a come to Jesus moment saying, hey, I'm back in the workforce now. I'm looking at my finances. I have all this debt over here. I don't know if we combined forces, cleaned up the debt, started building wealth together for the future. And maybe for the first time, God on a money plan together. What would he say? Um, I think if I could show, if I would take the initiative and start showing like, you know, here's my finances, here's how much I'm putting aside, um, I think he'd be willing to at least try to match that. Okay. That's a start. Yeah, that's a start. But I mean, he also makes almost double what you do. Does that bother you at all? Hey, how much he makes? No, no, no, that you guys are kind of totally separate and kind of like what I laid out earlier, which is we can maybe build wealth together, but we can't clean up a mess together. If it doesn't, you can say, nah, it doesn't bother me. But it does, but I can't really do much about it at the moment or just then just try to prepare, you know, and do the best I can with what I have. I mean, I think you should, I think you should do the best you can with what you have. But I would also encourage you to voice your opinion and say, hey, I'm just, I, I'm not happy with the way this arrangement is and it's not because I have debt. It's just because it doesn't make me feel like we're as close as I'd want to be. And I'd just ask him if he'd be willing to sit with the counselor and try to sort through that a little bit and get to a better place. It can't hurt. I think that would be beneficial, definitely. You know, plus you, I mean, you're coming off of a, gosh, if you're giving it, being a caregiver for somebody, you're coming off a really hard time. And just having that full support and knowing that you're like 100% partnered up, that's going to help both of you to feel secure. Yes, ma'am. So how much, how much margin do you have right now based on what you know about your paychecks? After you covered your bills or your half of the bills, however you guys do it, how much is left to throw extra at the debt? So I should have about 2400 a month left over after paying like what's necessary. Okay. So that would take you a year to pay off your debt at that point. Okay. If you're just throwing your 2400 at it and you got 28 grand, that would be a year. Now let's say he was able to throw an extra 3000 at it. Is that reasonable based on his income? Yes. Okay. So that would up it to 5,400. You're done in five months. You see the difference? Yes, sir. Now you guys are on the same boat rolling together instead of in two different canoes. What's going to happen? You guys will end up in different places in those canoes. By the time you get to retirement, you're not going to know each other and he's going to have a $2 million. You're going to have $300,000 and you're going to go, "Wait, can I also live for retirement with you?" And he's going, "Well, I saved my money or I didn't save any money and I want to live off your retirement." I mean, it's laughable, but it's an interesting thing to play out, Maddie, and that that might be something that I would spend some time thinking about. Let's pretend you never called in the show or let's pretend, you know, for whatever reason you enter retirement and you have zero dollars. He enters retirement and he's got his pension and maybe some nest egg that you don't know about. Are you telling me he's not going to reach over and say, "This is enough for both of us? I got you." I think he would make sure that the house and everything else, you know, flows. But as far as extra, you know, he's eating steak and you're eating ramen. You know meat, grumpy. But you see what I'm saying? We're laughing at it. But it is, it's an interesting mental exercise to kind of think, gosh, where is the line? Where's the boundary? What is it that we really have set up? Is it serving us? Is it good for the relationship? Is really the question. And so I think George laid out a really great financial plan for you and I agree. You should go after and achieve what you can on your own, but in the meantime, I would really push on this because this is such a huge part of your marriage and creating that life that you want together. And if you invest that 15% of your income once you're debt-free with an emergency fund, you're going to be okay. You're going to have a nice little nest egg. If you continue that on for the rest of your career and retire, you know, 67, you can retire with dignity, but you've got a marriage issue on top of retirement issue right now. Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com/realistate. That's ramseysolutions.com/realistate. Our scripture of the day proverbs 22 for humility is the fear of the Lord. Its wages are riches and honor and life. Our quote of the day comes from Patrick Stewart, who sadly just passed away, our producer just shared the news at 86 years old, one of the great actors of our time, Rest in Peace Patrick. If someone says give me one word of advice, I say be fearless. And knowing without any shadow of a doubt that what they have to give who they are is totally unique and not shared by anybody else. I like that. Beautiful words. I like Tim and Star Trek the next generation. Oh, that's right. And X-Men. I mean, so much. So much. So many great. Yeah. What a guy. Emily is in Nashville up next. Emily, welcome to the show. Hi. Thanks for having me on. I've wanted to call in for so many years now, and I finally decided to do it. You woke up the courage and you made it through the phone lines, congrats. I'll try and keep my extra question brief. But me and my husband, we bought a house about two years ago, and we've been paying extra towards the house every month to try and have the house paid off. Right now we're on track to pay it off in six years. Your houses are primarily our own debt, and then we also have a car as well that my company they paid a car payment for. So I don't necessarily count that too much as that. But my question is we've had a lot of people that have told us that, oh, you're doing it the wrong way. You guys would be set up so much more financial, financially better if you invested in stocks and you didn't pay down the house. I would like to know from you guys, would you continue to try to pay off the house or would you split it up and do both? I listen to everything my friends say. I do whatever they say.
trust them inherently. No, I, first of all, I just don't tell my friends. Yeah, why do they know I just don't talk about money with them unless they're soliciting advice for me. I'm not like sharing my journey, you know, financially with them. And I'm, I mean, it's me, you know, I do this for a living and I barely talk about it with my friends. So who are these friends and did you ask for advice? So they're more, I said friends in the question because it's more of like mentors that I have in my career and stuff and some of them are very far along in their careers. So I've asked about finances with them. And when I've asked my mentors who are very well off financially, they've told me that we shouldn't pay so much down towards our house and maybe invest it because right now we put about $3,500 extra a month towards the principal of the house. And we do 401Ks, but that's it. We don't really invest too much outside of our 401K. And I don't really know how to run the numbers to understand if it actually does benefit us more to put it up or if we could just try to keep being that free with the house. Well, let me ask you this question before we even get into that. When you said, I want to pay my house off, that's important to me. And we're going to start doing that with intensity and with gusto. What were you hoping to achieve? Was the number one thing the, the equity in the home, whatever your home was worth? I just want that to be fully to my name. Or was it a peace factor? I think it's more so peace factor so that we can be aggressive once the house payment is settled and all that. That way we can have a little bit more freedom to maybe take more risk financially elsewhere, whether that be investing or whatever else businesses who knows. And that makes total sense. That is a fair, that is a fair place, you know, placeholder to have for that. That's that would be my motivation. That's our motivation. That's why we teach that because there is a measure of peace that you get when you can say, I don't owe anybody anything. And it's not like you're not investing. You're still investing 15% of your income. And once the mortgage is done in six years, well, now gosh, you can go crazy on your investing and just blow it through the roof if you want to. But to your point, you laid out a strategy that you had and it makes complete sense. Now if your friends or your mentors have a different strategy, I will not stand here and say that there's only one way to earn millions of dollars and there's only like you can't build wealth if you do it their way. I mean, they've done very well. But our method is more about behavior and peace and your life than it is arbitrage and math. And what they're saying is, hey, your mortgage is three or four percent. You can make 10 or 12 percent in the market. They're right on paper. Absolutely. You could have made more. But to you, to Jade's point, it was never about that. It's kind of the same. It's the same mindset when a stay-at-home mom says, I know I could go out in the workforce and earn these dollars, but it's a value for me to be at home with these kids. For you, it's a value to have the peace of a paid-off home. And that's really what's driving that situation. It's not always mathematical first. Okay, that's helpful. Thank you. Absolutely. That was a great question. Great call. I like it. And it's not the first time we've heard something like this. It's a fair argument. My financial advisor or my friend told me it's stupid to pay off a three percent mortgage. It's a once in a generation mortgage. Yeah. And I'm going, you get golden handcuffs. You couldn't move if you want to because of your precious mortgage. I got a zero percent mortgage with zero dollar payment. I'll take that every day. And so you got options at that point. And it's more about that than it is the math on it. So great one. Zachary is in Des Moines up next. Zachary, what's going on? You with us? We're so sorry. Actually, I had my phone muted. I was going to say I thought you went to get your food out the microwave. We're here. That was still my bad. I was worried I was interrupting another call. It wasn't muted. That's so far from you. So no, I thank you for taking the call. I just wanted to call you guys. It's about an all-in-one loan that we're being offered. So my wife and I are very fortunate. We bought our house at a great time at a 2.3 percent industry. And we're saving a ton of money right now with what our house payment is. It's only $1,400 a month. We've had some kids. We've kind of outgrown our house unfortunately. And the market is kind of tough looking at interest rates. So the bank is kind of proposing all-in-one loan and I kind of understand it. And I'm trying to decide if this even makes sense for me right now. Or if we should continue to live where we live now, save up money over the next three to five years and be close to just buying a house we want out right. But the problem is we're just in a bad school district. So, okay. So what I'm hearing is you guys need to move for space for the kids and for schools. That's the most important pieces. What is that new house going to cost you? They're asking $5.95. They might come down to like $578. And this is an existing single-family home in Des Moines area? Yes. Okay. And what would the mortgage payment be? Let's say you sold your current home. You took all the equity plus any savings you had outside of an emergency fund through it at the new house. Have you factored in what your mortgage payment would be on a conventional fixed rate loan? On a conventional fixed rate around the seven percent range. It's coming out to be around $3,700 or $3,500 or $3,700 depending on the payment. And what's your monthly aftertax income? Aftertax is in their life and I aren't putting away $9,000 before expenses. Is that after healthcare premiums in 401k? Yep. Okay. So that means your 25% parameter would actually be higher than that. It's probably more like 10 or 11 if it's just aftertaxes but before other deductions. Would that be fair? Yeah. Okay. So at that point you're looking at about a third of your income going towards housing which is more than the 25%. Nothing's on fire there. Is there any way you could wait on this or is this we have to do this right now? What's the level? We can wait. We can wait. And that's kind of what I'm debating. I think the house that we found is the perfect house. We love the house. And I think the sellers are urgently trying to sell it and they haven't had any buyers. And I think we're just in a strong position. The house that might be worth $650 to $700 for $570. Can they throw in some credits in there and really sweeten the deal? We're willing to do like a buy down fixed interest rate to get to like a six and a quarter. But that's still about $3,500 a month in a payment. And after we've got $1,600 in daycare coming up here in January. I mean we've got $4,600 and just expenses just gas, groceries, electric, all that stuff. I take a look at the budget. Do a mock budget with this house and see what that would actually look like and feel like. And I would definitely not do this all in one loan. What they're trying to sell you is a HELOC. So you got a variable rate. Your home is the collateral. It's a 30 year home equity line of credit. That rate is going to be moving. I would definitely not do that under any circumstances. It's kind of what's called velocity banking. We run all of your life and expenses through this. All right, that puts the sour of the rain to show in the books. 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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