Simple Habits Create Lasting Peace

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, and I'm Rachel Cruz hosting this hour with Jade Worshaw, and we're taking your questions, so give us a call at AAA8255225. We'll talk about your life and your money. All right, first up, we have Willow in Springfield, Massachusetts. Hey Willow, welcome to the show. Hi, thanks for hearing me out today. Yeah, absolutely. Yeah, absolutely. First time caller. You know, so my question is about changing habits. I'm kind of an imp, what kind of, I am an impulsive spender, I like to eat out. And I noticed, so a couple of years ago, I really got intense and got, you know, I had a second job. I worked like seven hours a week. I paid probably like 25K off and debt. Nice. And yeah, it was nice, and then, you know, a couple of years later, I realized I'm pretty much right back where I was. And what really got me to think that is, someone from the show did, I, now we have a smart dollar through my work. And someone through your show did a little pod or a webinar. And, you know, that made me realize, wow, I got so intentional, or I got so intense, but not intentional, you know. So how, when you really want to get down to it, how, how do you change those bad habits? And if you know you can work hard, you can get all those hours that you want to get. I mean, Willow, I would boil it down to, why are you doing this to begin with? Because if you don't have a good reason why, yeah, you probably won't stick to it or, and I just was talking about this on social media, I just don't think that if you, if you don't have the personal buy-in, like your own specific reason for doing the plan, you won't do it. It's easy to hear Rachel or George or myself or Dave say information to you and logically you kind of know like, yeah, that makes sense, that, that sounds right. But it's kind of like if you don't have that personal buy-in, that personal reason for it to be right for you, something that you must do that is really that urgency inside of you, you won't do it. It's kind of like when you go to the doctor and they tell you you need to start eating healthy. And you're like, yeah, I got it. And then next thing you know, you go through, you know, the drive-through and get McDonald's, right? There's no personal buy-in. You haven't felt that pain or you haven't made that association with why it's necessary for you to make those changes. And that's probably what's missing for you. I mean, if I were to ask you why, you tell me why, why is this a necessity for you? I'm so tired of like living paycheck to paycheck, I'm just so tired, you know, of renting a room with everybody, with a bunch of other people, you know, I just, I would love a house someday. What'll happen if you don't? What'll happen if you don't get your life together? Where do you see yourself in ten years if you don't do this? If I am right now, you know, yeah, stuck. And your main reason for being stuck and your head is overspending, is that what you would blame it on? It's kind of how you open the call, so I'm just curious, or is it? I really think so, because I mean, I make okay money, I'm on a projection to make better money throughout my life, but it's just like, even when I, if I start making more money, I'll just want more of it. Spend more of it. Yeah, yeah. And so, you know, it's interesting because spending money, and I would say saving money as well, there's a motivation and a reason we do both. And in the extremes on both ends, they're unhealthy, right? So you have a saver on one end, and all they do is save. And they live their life, or they end up hoarding, not enjoying their life, and their money ends up controlling them in a negative way, because they have no freedom from it, because it's become this thing that is deeply ingrained of security, or whatever it is for them, of why they do that on this side. And on the other side, Willow, which I can relate to, because I'm more of a spender, so I'd be probably more in your camp of what is spending, give me? Like, what is it that it gives me? Is it the initial purchase and buying, because we know, you know, three, through research and studies that it does, it kind of, it gives you a hit, it gives you something, right? And so my question to you would be, what is that deep motivation when you are spending? Is it out of any level of achievement, accomplishment, you feel value when you buy something? Is it because you're bored, you don't feel like your life's good enough, and if you buy this next thing, it's gonna, it's gonna do good for you. Is it laziness? I don't want to cook, so I'm gonna go out, like, what would be the name? It might be all the above. All the above. Yeah. So, definitely lazy, I don't want to come home after a long day in cook, and then when I have to eat something out, it's like, wow, this doesn't really taste good, I could probably make this better at home, you know. Yeah. Exactly. So I wonder for you too, if there's, and I hate to just put it on such a tactical level, because I do think money is so emotional, and it reveals so much about us, but even from a tactical side, there's a planning aspect, I know for me as a spender that I have put into place, and it's not perfect, you know, I'm not 100% all the time, but I've created these small habits around my spending that help me spend, and when I spend, I feel good about it versus regretting it, right? So, for instance, like, food, right? And I think we all can feel that, Jade, and I understand that, like, yeah. It's so hard. Like, what does it look like on a tactical, again, we're going tactical here, to look ahead and say, okay, what nights, am I going to be home? What can I plan? What do I need to buy? Like, what are the things that I have to do to force myself in this one area of my spending to have a plan, and to actually stick to it, and you've got to stick with it for, you know, three or four months to kind of get in a new rhythm of that. If I want to buy some-- My therapist said the same thing. Do what? My therapist said the same thing. Oh, there you go. I'm just there, but it's Rachel here for you, Willow. And for me, too, like, buying stuff, I mean, even for my kids on Amazon, I got in such a terrible habit, like, they would want something, and I'm like, I'd look up, you know, jewelry for my girls or something. He's like, we want new necklaces. I'm like, okay, it's just 6.99. So, for Amazon, it's cheap, just, like, ship it and do it. And when that becomes the norm, that's what I-- my body expects. So I don't have to deal with them, hearing the word no, and dealing with this, like, you know, if there's tears or whatever, and having to actually step in for me and parent, or if I want to buy myself something, and I'm like, hey, what's my motivation for buying this? And then stopping and actually having to deal with myself, right? Like, spending can be such an escape for me sometimes to not actually deal with what I need to deal with. And that can be, again, something small with, like, a parenting thing, or I didn't plan well. So I'm exhausted, so I don't want to cook. I mean, you know-- Yeah. Or clothes, like-- Just an avoidance of discomfort in general. Yes, that's right. So I do wonder if there's a-- you've developed a life and a habit where money gets you comfort even though you're, at the end of the day, not getting the ultimate result for your life that you're wanting. I could see that. Okay. No, this all makes sense. Thank you. Yeah. Absolutely. Yeah, I don't know. I hope that helps, Will. But I do think asking the questions underneath of why, why. And you ask it three or four times to actually, like, why, why, why, why, why, why, and even in periods of my life, I would always ask, you know, if nobody sees this purchase, do I still want it? Mm-hmm. As an Enneagram 3. And so, you know what I mean? I was like, man, for a season, there was like, uh, who that feels good, because X, Y, and Z, I know someone will probably see it and say something. Well, that doesn't get you very far in life, right? Right. And so cutting that off at its source. But when you start to actually unwind the spending and your money habits of the person underneath it, uh, it changes the game. Yeah. I think in his case, I think they're definitely, I could hear that there was the convenience, like, not wanting to deal with. I could hear that there was, it sounded just like some insecurity on, like, what my life would look like without these purchases. And I think that if he continues to work with this therapist, I think he'll be able to unwind that even more. Yeah. Because at the end of the day, you have to be able to trust yourself to say, I'm going to do something and trust that you'll be able to make good on your promise. When it comes to your health insurance, one of the biggest mistakes you can make is believing your stuck in a one size fits all plan that costs too much and covers too little. That's why I recommend health trust financial. For the only Ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you, whether you've changed jobs, welcome to new baby or had some other life event, health trust financial shops, multiple top rated insurance carriers for you. Then they help you understand your options so you can make a smart decision instead of guessing. I recommend health trust financial for more than 20 years because they work for you, not the insurance companies. So they offer unbiased advice, visit healthtrustfinancial.com to connect with an advisor today. That's healthtrustfinancial.com. (upbeat music) - Next up we have Jim in Cleveland, Ohio. Hi, Jim, welcome to the show. - Thank you very much, thank you. - Absolutely, how can we help today? - I am 67 years old and I went through divorce here not too long ago, and pretty much like B.O. And so, I don't have any savings through retirement. I'm a sole proprietor, contractor, and I stay busy, unfortunately, thank God. And I'm just trying to figure out what's the best way to move forward and try and catch up for some last time. I got my son through college without any debt. And I basically started over, I have about $23,000 in debt like credit card, medical, and a personal loan. - Okay, okay. - Did you, during the divorce, did you obtain any assets or like a home or anything? - Well, I do have my home and it is paid off. - That's good, how much is it worth? - So, I would say probably 150 to 160,000. - Okay, gotcha. - And you said you're a sole proprietor, what do you do for work and how much do you bring home on a given month? - Well, I do construction, new construction, remodeling, and obviously it varies depending on, but I would say on average, I would say four to 6,000 a month. - Okay, and do you currently have a budget? Because, I mean, for a single guy, 6,000 bucks a month isn't bad, especially with a paid for home. I just wonder if we need to reallocate that money and make sure it's going to good places. - I honestly really don't have a budget made up. Some of that money goes to liability, insurance, and. - For the business? - For the business. - Okay, are you keeping the money separate? Sorry, are you keeping your personal money separate from the business money? - No, I am not. - Okay, so we definitely need to start doing that. That'd probably be my first course of business, is just going down to the bank and opening up a doing business as account and just keep that money. So that way you actually know what you're earning from the business because if you don't, Jim, you're gonna be thinking that you make four to 6,000 dollars, but after expenses, maybe it's closer to 3,000 dollars. We won't know until you separate that money. And then from there, my second course of business would be to do a budget. Once you've separated that money and you can say, okay, after all my expenses, here's what's left in the business, I'm gonna transfer that over, pay myself. Now I'm making the budget based off of that money. So we'll give you every dollar to get you started on that and knowing that number is gonna be key because that's where your margin is gonna come from. Do you have any money saved anywhere? - I do, I've got the thousand dollars. - Okay, good. - That, so. - Anything else? - Just my equipment and I have musical instruments, stuff like that. - Okay, you wouldn't mention it if it wasn't a lot. How much do you think you have in musical equipment that you could liquidate? - I probably have somewhere around eight to 10 thousand, I would say. - I might do that, I'd probably do that immediately 'cause that knocks out half of your debt if you can get 10,000 for that. 'Cause the first step here, you've got the baby step one which makes me think you're familiar with our steps. The next step is yet to clear out this debt and I would liquidate the musical instruments as quickly as I can. And then in the meantime, with whatever margin you're finding in your budget, really getting after this $23,000 of debt, tell us about your vehicle. - It's my work being. - Okay, is it paid off or does it have a note? - Oh yeah, it's paid off. - Okay, and that's the only car you've got, only vehicle? - Correct. - Yeah, I mean, Jim, I mean, just because of your age and situation, I think as aggressively that you can do this, the faster you could do this, the more upside you're gonna have on the end of saving for retirement. So, let's just pretend you did sell some stuff and that could be anything and everything, right? Maybe, and you get 10,000, that's 13,000. And if you could find an extra 2,000, which maybe mean working more jobs, finding that income 'cause your income is gonna be key here, is to be throwing that. And if you found 2,000 month, you're out of debt and everything in five months. And then save up an emergency funding. By this time next year, you could be in a totally different spot financially. And then the thing from there is to start investing. And that's where 15% of your income will go. And yeah, and it probably won't be to the, just because of the time. I mean, there's just a limit of time and income to a certain point that you're gonna have to realize, okay, with social security, anything coming in that I will have at some point in my life, how much do I need to live off of every month and getting to that number with your investments that you can live off of that? And again, it may be another five-ish to six years, which I hate. These are always tough calls, especially when someone has gotten to that point of for sure retirement age. But then up to the point of physical work is tough. And the older you get, that is much harder. And so the reality of all of that, Jim, really is gonna depend on the thing of you of getting clearing this debt, getting some cash in the bank that's there, just for expenses. And it could be three months. You don't have to do the full six months because your house is paid for. - Thank goodness. - It's just you, like, yeah, get at least three months, but do all of that very, very quickly. And then start throwing some money and investments. And that would be my goal. But it's a, and it's possible, Jim. Like, we hear stories all the time and people do in this. So, but I do think for other people listening and watching, you know, it's a cautionary tale of realizing, like, you know, life is gonna happen, it's gonna keep moving. - Yes. - And so where you are today, and this includes Jim, the decisions you make today, they affect your future. And so you can either choose to ignore it and, you know, not think much about it until it's too late, or to say, no, I'm gonna do something different. And it's not too late for you, Jim, right? Like, you're not at the end of your story, but it just means it has to go that much more aggressively to see some movement. - I think we hear, I think we hear that a lot. There's people who call in and they've kind of been around the water cooler, they hear the information, they've listened to Ramsey for a long time, or maybe they, maybe you just watch the show out of just entertainment. And you get a kick out of seeing what other people are going through. But if you're not actually applying this in your own life, that time is ticking. - That's right. - With Jim, it totally, it's a look on the other side when you don't make that move. And just life happening. - You know, the divorce, absolutely. - That is just life happening that maybe you didn't see around the corner, and all of these things, they really have the ability to affect our lives. But financially, if we do the things that, if you do the things that we teach, you're prepared for those things. And you can kind of handle those storms when they come. And I mean, gosh, if you need, if you never had a reason to get started, this is the reason. I mean, it's like the caller that we took prior to. - Yeah, that's right. - You know, gosh, lock in. - If you don't change the habits, yeah. And for those of you that are new, we do teach on the seven baby steps. It's what Jim mentioned. Baby step one is getting $1,000. And then baby step two is paying off your debt. But when you go down the line, four is invest in retirement. Baby step four, baby step five is fund your kids college. And so the fact that he paid for his kids college is wonderful. That's such a feat to put your kid through. But we always say, invest in your retirement first. Like your kids may or may not go to college. They have ways to pay for it, make decisions with their higher education to do what they need to do. But at some point, you're going to retire. At some points, you won't be able to work. You're not going to be able to work. And so taking care of yourself first and that baby step four, a 15% of your income, that is not selfish or wrong. That's wisdom. And then out of that, if there's more to fund kids college. But Jim call us back if you need us. But I think honestly, in 12 months, if you do this, you get out of this debt quickly. You get some savings and you start investing. All of that could happen in the next nine to 12 months for you, I really do believe. And then you'll start to see some progress, for sure. [MUSIC PLAYING] 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 Fairwind's credit union. With their smart bundle, you can choose a Ramsay-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. Insured by the NCUA. Learning to control your money, like we just talked about, is it's so important in having a tool that walks beside you in that process is everything. And so every dollar is an amazing app. You guys, you can download it for free at the App Store or Google Play. And I'm telling you, having every dollar with you, not only for the budgeting side of your life, but even walking through the baby steps. I mean, all of it, knowing and watching your progress and marking your progress and knowing what's going on, it helps you. And I mean, we live on our phones all day. Let's be honest. So it's really to have something that's accessible to you and that you're able to see and keep track of, like all of that intentionality is what pays off. So again, go download every dollar. You can start for free in the App Store or Google Play. All right, let's go to Bob in San Francisco. Hi, Bob. Welcome to the show. Hey, thanks for having me. Absolutely. How can we help? Kelly. Yeah, so I'm relatively early in my career. It's been about a year. I work in tech as a software engineer, and the field is pretty up and down. There's a lot of layoffs. I've had friends that have been laid off for several months or a year, kind of just comes out of nowhere. So my question is, I've been saving up like 30 or 40% of my paycheck for the past year and working some other jobs before that. But sometimes I feel like I'm not saving enough just in case something like this happens. And I don't really know how to balance kind of spending the money that I have versus I kind of always feeling like, hey, I need to save more just in case something like this happens. And yeah, in long term, I don't know what to do. It sounds like the biggest thing. It's showing itself in what you're doing with your money, but it sounds like the bigger problem is if you were to lose your job or to get laid off, you don't sound like you have confidence that you could get another one in a reasonable time frame is what I'm hearing. Because you could say, oh, I'll save for six months. Well, that's not enough. I'll save up for a year. Oh, that's not enough. Do you see what I'm saying? So am I right about that? Is you're just concerned that, oh my gosh, if I get laid off, will I ever be able to find something? Yeah, I think that's my-- Yeah, I think you've gone to the core of it there. Yeah, because how much do you have saved just curious? In terms of how long it may take, it's not-- yeah, I feel like I don't have a lot of confidence that for sure within three months, I'll find something for sure within next number of months. How is AI affecting your industry? Yeah, it's heavily affected. Pretty much everything I do looks very different than what I was doing, maybe seven months ago, eight months ago. Right, is it? And I think that also plays a role in it as well. Is it taking your job or is it changing your job? I think a bit of both, but there's just so much uncertainty that it's very hard to show, because every month something drastically changes. So I think for you-- I think that adds to the anxiety of it. I think for you, yes, I think it's really wise for you to-- I mean, I'm always going to suggest three to six months of expenses. Obviously, if I were in your shoes six months, and depending on your baby step, if you're in baby step seven and you want more liquid cash, I think that's totally your bag as well if you want to do that. However, I think the thing that I'd be more concerned with is going, OK, in my field, what does it take for me to be ahead of the curve? Is there knowledge that I need to have? Is there something I need to be learning? Is there something-- do you see what I'm saying? And figuring out what it takes for you to be really just assert yourself into that and make sure that you know, OK, like this is where the industry is going. Here's what I'm going to need to know how to do with AI. Or if you do see, man, I just-- It's not going to exist. I don't think it's going to exist. Now is the time to start going, OK, what am I going to pivot to? And I think that if you start solving that problem, instead of the dollars and cents side of it, I think that's actually going to give you more peace, because you can't out-save this. Yeah, that makes sense, yeah. Yeah, that's not really a money problem. Right, I mean, don't give me wrong. It's better to have savings than not have savings. And if you have six months of expenses, I think that's fabulous. That could give you the runway that you need to do the next thing, right? But hopefully, you don't even have to touch that and you can just look ahead and go, OK, what am I seeing? Is the trend? I mean, I don't know a whole lot about your field, but I got to believe that AI is making a major impact scarily so. And if I were you, I'd be looking out on that horizon, going, OK, what do I need to shift to? Do I need to move careers in general? What does this look like? And I'd be getting way more peace of mind behind knowing what my next career move would be versus having more money in the bank. OK, yeah, that makes sense. Is there anything adjacent Bob to what you're doing now that would be applicable still in this new world in technology? Are there other fields, other friends, other contexts you have? Were you like, OK, that side probably isn't moving as much. And they're always going to need X, Y, and Z. Or can you even answer that? Yeah, honestly, I'm not sure. I feel like if I knew that, I'd have a little bit more peace, but it's just the uncertainty of it all, and even things that are potentially adjacent. Because they share the same commonality of being potentially fragile. Yep, so I would take Jade's advice for sure and find something that you enjoy and that you're still good at, which is a scary, terrible thing, because she's a year in to a career field that was booming, right? I mean, text still is, but it's just ever changing, like what you're saying. And so I think there's a reality. And also, Bob, I want to make sure that there's-- and I don't think you're being your rational, but sometimes fear can cloud us so much where something is so magnified. But you actually look at the facts and you're like, OK, well, maybe my position with this specific company in this way probably isn't going to be affected like my friends because X, Y, and Z, or you look up and rational, you're like, oh, no, it is. So then that's when the decision has to be of, OK, what do I need to change to to make sure that I'm, yeah, prepared? Because it's, yeah, that's a real thing. All right, let's go to Ali and Knoxville, Tennessee. Hi, Ali. Welcome to the show. Hi, Lee. Oh, thank you so much for taking my call. You're so welcome. Thanks for calling in. How can we help? So my cousin, I have been dole income and have been working towards buying a house for the past couple of years at London. Ali, can you talk directly into your phone? Sorry, you're breaking up. Oh, I'm so sorry. Can you hear me now? Yes, thank you. OK, my husband and I have been dole income. And we've been working towards buying a house. We paid up all of our student loans and everything. And so for the past two years, we've been just pocketing everything that I make and just letting off of his paycheck. But I'm having our first baby in December, and about to stay at home. So my question is, how can we still work towards saving a house if we lose that dole income? Sure. Well, it'll be a little bit harder. Can you take me off speaker, Ali, or am I on speaker? Oh, yes. Perfect. OK, thank you. So what I would say is your home purchase needs to be around what your husband makes then. And so it's going to probably limit some options possibly depending on how much you guys have saved. We have about 50 saved up. OK. Yes, so if you want to go to ramsysolutions.com/realestate, there's a-- we have a mortgage calculator on there. And so you can actually do some-- moving some numbers around on that for you guys, because depending on what your husband makes is what I would plug those numbers as, that this is our income. Here's our down payment. And plan around that. Don't plan as a household income of what it is today if you're for sure not going back to work. And so that is-- go ahead, Jade. I was going to say, what does your husband make? 31 right now. He recently made a career change and he's been working in IT. So he's obviously still looking for other jobs, too, and applying for jobs that might pay a little bit better. Did you say 31? Yeah. And what were you making? I'll make 38. Okay. Yeah. I mean, to be honest, that's going to be a tough, that's going to be a tough ask. I mean, obviously, I believe you that he's going to go up and what he's earning. But I mean, if we're just looking at median listing prices, I mean, that's a, that's a steep climb from 31. What's the time? 3100 a month. Sorry. Oh, month. Thank God. Okay. Again, pregnancy brain. No, you're fine. That's all right. Well, still close to 37. I mean, yeah, it's still around 37. So it's, yeah, you guys are going to have to do that, that research to look in the market and to see what you guys can afford and when you can afford it. And staying home, amazing. Just know it's probably going to push your timeline on the house. You're probably going to want eventually. And so you just have the patience of saving for a little bit longer in order to get the value of what you guys want at to be a stay-at-home mom. Hey, this is Dr. John Deloney. I take my sleep seriously because better sleep means better health. And if you've been losing sleep or waking up sore because you've got some old, thin, gross mattress that wasn't designed with you in mind, it's time to make a change. I love Helix mattresses. They make mattresses for real individual people, whether you're a side sleeper, a back sleeper, whether you sleep hot, or if you and your partner have completely different sleep styles, Helix has a mattress designed just for you. I want you to get online and take the Helix sleep quiz. It takes like two minutes and they're going to match you with a perfect mattress that fits how you actually sleep. Helix is not just a show sponsor for me. I sleep on a Helix mattress. Helix mattresses are the best. The best savings of the season are happening right now on Helix mattresses. Go to helixsleep.com/ramsie for their best of the web, offer, and get 27% off site wide. That's 27% off site wide at helixsleep.com/ramsie. That's helix, H-E-L-I-X sleep.com/ramsie. With helix, better sleep starts right now. Next up we have Andre in Greenville, South Carolina. Hi Andre, welcome to the show. Hey, thanks for answering my call. I'm too sure what you guys do. Yes, for sure. Thanks so much. How can we help? Hey, so I've been having a lot of fun listening to all the best of Reals and all that good stuff on YouTube. I can't help but see a pattern over and over where that of any kind shape of form, no matter the circumstance, is almost never a good idea in the landscape advice that I'm picking up on. I'm in business and I can't help but feel like people in business live in a different world and the reality of what I see on a day-to-day, what I've experienced, and most of the advice feels like it's very good for people that work at Typical Man 5 and then we just do structure their whole financial thing. And I understand that slavery to the vendor and all that. My question is, when you use leverage debt to make money, why is that bad? When if you didn't do that to begin with, for instance, me myself, I wouldn't even be in business to begin with. And if I tried to cash pay my way to having my business, it would be years and years before I could even start it. While using that, I'm already growing my clientele, I'm growing my yearly income, so on and so forth. Well, I mean, first off, I thank you for hanging out with us. Thanks for listening to everything. And thank you for your question. I think that's a very good question. One of the questions I have for you is, what kind of business are you in? And I want to know how much you've borrowed to this point. So, the circumstance changes from this to this and so I'm an excavation contractor. I have my own dirt moving equipment. And I do full-type prep turnkey for reconstruction essentially. And then does various grading and dirt work in general. But in my industry, anything you touch, it's $1,000 in repair. And basically $100,000 for any piece of equipment, everything is very top dollar. So how much debt do you have to this point? The debt that I have to this point is based on, you know, what I have finance on my equipment is one thing. Yeah, how much? My question. No, it's my question. It's because it's going to form my answer for what you asked us. Right. I understand. But I'm trying to, I'm trying to understand the system and process and why it doesn't matter. Right. And I'm going to, I'm going to use your situation to explain my answer. So how much it just helps to speak in pictures. How many, how much debt do you have on your business? So just strictly business that I'm going to roughly say I am at 60. Okay, 60,000. Well, that's not bad. If each equipment is $100,000, you've obviously cash flowed something or paid something off. That's not terrible. The thing is I didn't buy it brand new. Perfect. Great. I would have I would have been much higher debt. Right. Smart. Okay. I bought things that are used, but still relatively large. But there was, let's hang out there because this is going to form our answer. There was a reason that you didn't want to leverage yourself to a certain extent. And there is a reason that you're like, you know what? I'm going to buy used where I can. I'm not going to go crazy with this. And part of that was number one, the more that you pulled out, you would start to feel the weight of that. And then you would start to feel the pressure of, you would start to feel the pressure of, oh my gosh, this business better be able to pay this back. And if it doesn't, I'm going to be screwed. And at that point, that's where you start to feel really just a foundational shift of why you're running the business the way you're running it. When you have debt on a business, it will cause every move you make to be considering that debt. Oh gosh, I have to pay this back. I have this lean out. I have this loan out. I have this right, this interest. And it starts to really shape how you're doing business versus decisions you make. Yes. Versus when you're going slower, you're moving at the speed of cash to your point. Maybe you're buying the used one instead of the brand new one. Now you can actually make choices that are informed by your business, by the customer, by serving people well. And so it does change your mentality. And if I never got the debt, I wouldn't even be in, because I wouldn't have been able to purchase even. Well, you would have done, well, Andre, I would, I would push back a little bit on that to say, if this was your dream, you would have found a way to do it. Whether that's renting equipment for a season. I mean, to tell to sit there and tell us that it would be absolutely. A couple of real real life examples. I mean, Andre, I don't, I don't know. Do you want our help or no? It's fine. We just have people on the phone that are like they have issues. I just don't feel like my question is actually answering. Okay. Here's the answer. The answer is there are people in the world who choose to operate on debt and there are people who don't. You get to choose. There's plenty of successful people who have debt and there's plenty of successful people who don't. That is the truth. And you just get to choose around here. We love the identity of complete freedom, complete control, complete peace. We just like that autonomy overall. Andre is what we're going for and to live in a life in a culture where a bank is constantly at your back and call and you have to make decisions around them and paying them. And if you don't, you're screwed in your family to need because you go bankrupt. And so that level of risk a lot of people have decided I'm not going to associate myself with that. I'm going to live in a level of peace even though that means I have to go slower and make different decisions. So ultimately it's that. Is there some math you can play in there? Sure. But ultimately Andre, we want you to go to bed at night and not have a care in the freaking world versus knowing if this happens and AI robots take over your industry and here you are upside down. What are you going to do? I don't know. But I'll just say this. We sleep good at night. We're not going to borrow. And this business that we're sitting in right now built a hundred percent debt free. And guess what? Do you think Dave Ramsey wanted to go buy a bunch of crap that he couldn't afford to get it going bigger and faster? Yes. A hundred percent. But the discipline at moving at the speed of cash changes you. And let me just tell you to Andre go to on trade leadership. We coach literally hundreds of thousands of businesses to do this and do this well and transition legacy wise thinking long term like all of this has wisdom in it. So that's all we can say. I don't know if that helps you. And you know what? If it doesn't, we can still be friends. It is fine. It's not the end of the world. It's not a sin. I'm not saying you're going to go bankrupt tomorrow, but you're choosing a life with risk. And that is what debt is. You're choosing that where other people choose autonomy and peace. So you can do what you want. Totally fine. All right. Let's go to Kat and she's in Canada. Hi Kat. Welcome to the show. Hi, how are you? Thank you for having me on. Absolutely, how can we help today? So I finished medical school and started my residency in July, so I'm getting paid for the first time. Awesome. Yeah, thank you. I've accumulated a lot of student loan debt through medical school. My question is about how to go about paying that off. So I got really into Ramsey principals this year since I started making money, so I started budgeting seriously for the first time. I completely stopped using my credit card and I saved my $1,000 emergency fund right now. Thank you. Right now, I'm just paying the minimum payment on this student loan and my goal is just to have it not get any bigger for now. And I know that based on the baby steps, I should be intensely attacking this debt with all the extra money I have. But I was wondering in a situation like this where I'm a resident and I know that in five to six years, when I finish the residency, I will get a substantial increase in pay and will likely be able to pay off the debt in two to three years at that time. I was wondering if it's okay to not go full loan baby step two right now and wait until I finish my residency and get my full salary to really attack it. Well, what will you be doing with your margin instead? Well, I'm saving for right now mainly just saving for a few things of future. I'm hoping to probably get married in a couple years, so I'm saving a bit for that. Are you engaged? Not quite yet. Okay. Yeah, so I would say, be throwing this at the debt because the great thing is for some reason, Kat, if all this works in your favor and you get out of the student loan debt or you take a big chunk out, instead of taking three years to pay it off when your income increases, it's going to take you six months and then you're going to have a massive income. And I'll tell you this too, when life happens and you're on baby step two, there's a point that you can kind of give and take a little bit to save for a wedding. There's some things you can do if life starts to happen and make those adjustments, but I think you're going to look down the line and be like, wow, there was five years of income. I don't even know where it went. Where it could have been actually picking at the student loan. And then when that big increase comes, it's going to take you so much of a shorter time and then, oh my gosh, Kat, you'll be making good money with no debt. Yeah, absolutely. That's a no-brainer. A lot can happen in five years. Pay off as much debt as you can. If you've ever been really sick or been the caregiver to somebody who was, you know how broken the healthcare system can be. Man, nothing is easy. Finding the right doctor, sitting on hold for hours or a gosh, trying to understand copays and treatment plans and weird medical terms that no one really explains and so much paperwork. But what if you had someone to do all of that for you? Someone to take the burden off your shoulders. Solace Health pairs patients with a personal advocate whose entire job is to fight for you. And these advocates are covered by insurance nationwide. They handle the paperwork, fight denied claims, and make sure you're not getting lost in the system. Solace advocates are experts who average 16 years of healthcare experience. And they serve people who are going through a healthcare challenge. Now, if that's you or a loved one, please reach out to Solace so everyone can focus on what really matters. 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/ramz or click the link in the description. Checking your eligibility only takes about two minutes. That's S-O-L-A-C-E-Health.com/ramz. You must be 18 or older and remember advocates do not provide medical or legal advice. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Next, we have Rebecca and Memphis, Tennessee. Hi, Rebecca. Welcome to the show. Hello, how are you? Hi, we're doing great. How can we help? Yeah, so my situation is that I am a very recent company nester. 41. My phone is a college student now. Raised them on my own. Oh, good for you. Rebecca, amazing. Thank you. Thank you. Because of that, I have always been financially behind. Just trying to make sure that he had everything he needed. I'm wanting to be very active in sports. Might I add that he's in college now on a athletic scholarship. Oh, good for him. Thank you. I don't have to pay for college, which was a huge relief, definitely a blessing. So now, my question is, how can I get myself on track? I don't, I've always lived from paycheck to paycheck. I don't have any savings whatsoever when I left my last two employers due to getting a new job in another company. I did not roll over my 401k because I've always needed money. So would you cash it out? Yes, I was cashing out. Okay, so to this point, give us kind of where you are today. Is there a debt? Is there savings? Kind of give us a leo the land. So no savings whatsoever. I am now at a company where I feel as though I can move up and retire from and so I've started with their pension plan, but I've only been here for years. So of course, it's not, you know, a lot in there, but I'm about 50,000 in debt, about 30k in student loans, about 5,000 in credit card debt, and the risk would be personal loans, which a big chunk of that personal loan, about 8,000, was because, um, spent on attorney fees, you know, after my son said he, you know, filed for a full custody and tried to take him on that. Yeah, yeah, yeah, after he came of, you know, how much do you make right now? Right now, right now, I am at 66 and I do get annually and I do get a one C bonus. And like I said, this is my, you know, first year, and it was about 28, 26, 2700. Okay, and you said you're investing. How much are you investing? Every check. I think I honestly don't know what is, I think I may do $25 of paying check and I get a weekly. Okay. Okay, so I mean, to your point, as a single mom, you really were just doing everything you could for your family and making sure that everything was covered. And but now you're able to look out and go, okay, what do I need to make do to make sure myself? You know, everything is good for you. And you've got this great job. You're finally, it feels like you're finally in a place where you feel secure to, on a foundation that you can actually build from. So let's do that. I, you know, I understand the temptation. I think for you, the temptation is to want to go straight to saving for retirement at 40 years old. I think we start to feel that, like the time is starting to tick. But if we still have the debt there, and if we don't have any savings, what will end up happening? Yeah, what will end up happening? Rebecca is if there's no savings and they're still debt, anytime there's an emergency, you will go to the 401k and you'll start to drain back out what you've put in. So we need to change that behavior and, and do it in a different order. The first thing that we need, and if you don't have this, this is your homework. You just need a thousand dollars cash. If you can just keep a thousand dollars cash somewhere that you can get to it, that way if you, you know, come up on a flat tire, if something happens and you need a quick repair around the house, you can go to that and you don't have to put it on a credit card and you certainly don't have to pay, you know, pull it from your 401k. So that's just going to kind of give you this buffer from, from debt and from, you know, from, to protect your, your 401k. After that, after the thousand dollars, the next thing is let's try to tackle this debt and I know that that's probably not what you want to hear, but every dollar, including what you're currently investing. Let's pause that temporarily and let's put every single dollar onto this debt. And we'll make sure that you have every dollar so that you can see how much margin you actually have, but now that you've got a son going to college and you don't have kids at home, also Rebecca, I would look into any kind of side hustle, extra work. I mean, if you can put 2000 a month towards this debt, Rebecca, you know, you're, you're going to be done so fast, so fast. Okay. And it's probably not what you wanted to hear because you've been scramble, like you've been working hard. Yeah. I've been running around, you know, like a headless ticket. - Uh-huh, yeah. - But, you know, like I said, the reward for me is not having to worry about college expenses. - Right, right, yeah. Well, in two years, Rebecca-- - It's a good idea. - Uh-huh. - Mm-hmm. - Well, I was gonna say in two years, your life could look drastically different in the sense of getting out of debt and then starting to build that emergency fund. And I've just ran some quick calculations to say, okay, if you think your income's gonna continue to grow. - So let's pretend that you put 1500 away in retirement, you know, at 40, 43, 44. And you give yourself to about 65 for it to grow. That's gonna be 1.8 million at retirement. But that's 1500 a month going straight to retirement at age 44. - Starting at age 44. - Putting that away, right? But in order to do that first, you first have to get out of this debt. So there's kind of that motivational domino effect, right? That if you're like, like, 2000 a month. - I'm sorry, let me ask this. So with opening enrollment, currently, my job is going on right now. So are you saying I do not need to contribute-- Like, I don't need to contribute myself to my companies 401(k) because they do. - That's right. - I'll just-- I work for FedEx. - Okay. - So-- - If they want to put money in there and they don't require you to match it, fine. Like, if they're putting money in and you don't have to match it, great, that's free money. But if it's a required match, like you have to put in an order for them to match it, yes, I would say temporarily. Let's not put any of your money in until you get out of debt. Once you're out of debt and then you save up three months of expenses, then you can start putting your money into that 401(k) or into that pension plan. - Okay. - So real-- how much would you fill based on my salary? How much would you save once? - 15%-- - For every one now. - Yeah, once you're out of-- So first things first, we pay off the debt. We save up three months. And then you can start putting Rebecca, 15% of your gross income. - Yeah. - So if you make 66,000 a year, 15% of that every month. And I think you'll be up at that point two years from now. Hopefully you're making 70 or so, right? And so you can look and be like, okay, around probably 10,000, 1,000 bucks a month, that's gonna be great for same-for-retirement. (upbeat music) - If you're frugal like me, you're looking for every extra dollar you can squeeze out of your budget. But when was the last time you looked at the bills you have on auto pay like your phone plan? You might be paying 100 bucks or more every month. And for what? Regulatory costs, recovery charges, telco recovery fees, what even are those? And the good news is, there's hope. You could be paying just 25 bucks a month if you switched to boost mobile. That's right, with boost mobile, you get unlimited wireless for $25 a month to help you save money for other more important things. And that $25 price is locked in forever. No hidden fees, no surprise charges like customer proprietary network information notification costs. Nope, not happening with boost mobile. Plus with boost mobile, you get to keep your phone and your number with no long-term contracts. Guys, switching to boost mobile is the smart move because it's one of the best ways to get more out of your budget. So go to boostmobile.com/ramzhi and make the switch today. That's boostmobile.com/ramzhi or click the link in the description. - $25 forever requires customers to remain active on boost mobile and limited plan. (upbeat music) (upbeat music) - Next up, we have Josh and Charlotte. Hi, Josh, welcome to the show. - Hi, how are you doing? - Hi, we're doing great. How can we help? - So I had $4,000 in credit card debt and I had to lease right now that year and a half left on that my mom coast on for me 'cause I had no credit built up at all. I was just wondering, what should I do? I'm 20 years old, I work in HBAC. It's a slow season right now. So I'm not giving a ton of hours, but when I hit summer, I'll rack up a lot of cash. What would you recommend me doing? - Okay. - For my next step or when the lease is up, do I buy cash with a car with a cash or can I go to a car with a cash with what I think of that? - Yeah, when is the lease up? I think it's gonna, it's gonna be July of 20 with the 28th. - Oh gosh, a while. I might try to get at that lease sooner if you can, especially 'cause your mom is on it. What's the car worth? - About 30,000. - Okay, and have you looked to see like what the buyout would be? - Yeah, so I looked about a month and a half ago and it was, I think they said 12,000. Okay, so if you bought out the car, no, no, no, not to get, not to buy out the lease to buy the car, like if you wanted the car. - Okay, to buy it out. I think at the end of the lease, I think it'd be 15,000. - Okay, but that's in a year and a half too, right? - Right, right, right. - I'd want to get out of this just about anyway. I can't, 'cause 20, 20, it's a long ways from now, 'cause what are you paying every month? - Three, 53. - Okay, and your mom's on it? - Yes, ma'am. - What do you bring home every single month? - It's around, if it's slow season, slow to around, like, I don't know, maybe like, 30 grand, maybe. - Okay, where are you living? - I'm living with my sister, I pay her rent. - Okay, how much do you have leftover after rent, food, utilities, all of that? - After all that, I think it's around like two grand. - Is what you have left? Okay, that's great. - So in two months, the credit cards are gone. No problem. - Right. - Yeah, do you have any money saved, Josh? - I had $1,000 saved, but I got let go of the job, and I had to use that for my car insurance and my car payment. - Okay, okay. Well, at least they are for an emergency, so that's good. - At least you don't have to go $1,000 deeper into debt. So it did its job, so yeah, so build that back up, and then I would work, and since it's slow season, if there's nights that you can be working somewhere, I mean, right now would be the time to grind it out. I mean, this is hustle time, because if you can get out of debt, get some emergency fund, kind of a buffer, and then I would save to see if I can get a cash car for $6,000 or something, right? And then you can get out of this lease sooner, 'cause I want you to be able to purchase something if you can. - Yeah, if you can buy out the lease and then turn around and sell the vehicle and break even on that sale. Yep, that's the ideal situation here. And then you can have, in the meantime, you're saving up a couple thousand dollars cash, and you buy yourself a $5,000 car or what have you. I mean, that's amazing. Now you're not paying $400 a month for the next, you know, two years on this lease. - Right, right. So that's the game plan. - All right, I think, yep. So I had a second kind of job, like I'll do it ash on the side, like when I get off work early, like how do it ash? Or my nephew has like a long care business to all help him out sometimes. He'll give me some cash or whatever, just like some fun money or whatever. But I probably need to start saving back all that, sort of like just spend getting on, 'cause I can play golf, so I go and play golf, you know. - So just remember this, like. - Every week or so. - There's three things to do with money, give, save, and spend. And in your season, you're gonna be saving a lot, because you've got to get out of this debt. You're gonna be saving up the money, throwing it at the debt. Then saving up the money, making an emergency fund. All of that. And, I mean, you're at the age where starting those habits now is so, so, so important. - That's what I was gonna say, yep. - And just realizing that this is not the life you want. Like you don't want the life of signing up for debt every time you want something, and then having to grind, grind, grind to pay it back. Like that's, it's not very gratifying. - No, I mean, 20-year-old Josh, if you get this stuff, you live unless then you make, you learn to put money away in savings, you eventually start investing. All that, even just those simple things. Those simple things will change your life. Like you will be a different person financially, if you choose that. Or you just choose a route that everybody does, and it's like pay check to pay check. I use that to get what I need, all that. I mean, in at 20, you're making some pivotal decisions of who you're gonna be, 'cause untangling 12 or 15 years at 35 of habits that you've had that long, it's much harder. It's doable, very doable. But some people have a crash and burnout session in order to make that happen. And you can avoid a lot of that. There's a lot of preventative stuff you can be doing now, Josh. So I love it. If you hang on the line, Christian's gonna pick up, and we're gonna give you every dollar for a year, 'cause I do want you to start budgeting and this $3,000, you know, it may not sound like a ton, like it's life changing, but the way you're living right now, if truly $1,000 is all you're living off of. - Yes. - $2,000, $24,000 a year that could be going towards something for future Josh to figure out, which is what we love, love that. So the give-safe spin model is big, but not when you're broke. So you really do have to, you gotta buckle down, Josh, and this time get out of this debt. All right, let's go to Jessica and, oh, she's in Charlotte. to. Hey Jessica, welcome to the show. Hey guys, how are y'all? How can we help? Okay, so I'm probably going to be all over the place because talking to you guys is making me very nervous. I don't know why because you're just so smart and I'm not. But I'm going to try to break this down. Simple. So my husband and I, 23 years ago, took out a whole life policy when we were young and not very smart. And we've been paying on that at $85 a month for 23 years. So we are at a point in our life now. We were both government workers. We are retired. We have a pension. We're not old enough yet to get our social security. But we have all of our, all of our stuff set up to where if either of us died, the other one continues getting that monthly, we get left now so that the spouse will continue getting what we're getting now. That makes sense. Okay, yeah, North Carolina, that's how it works. And then when we both turn 65 or whatever, we'll get the additional income of our social security. We have no debt. We have no mortgage. Our cars are paid off. We don't have any debt. So we're doing pretty good. My question is with this whole life policy, we have seven years left on it. At the end of the seven years, which is three years, seven years, we will, we will get $30,000, which is what we paid in. If either of us were to die within that seven years, the policies worked 125. So my question, I'm trying to tell him, had we known, Ramsey, 30 years ago, we could have been taking that $85 a month and we would have. Yes. Hundreds of thousands of dollars more. Right. Which is what this insurance company has made off of us and I get it. But we're at a point now where can, if I cash this in and get $14,000 in the seven and invest that and continue paying the $85 a month towards it, can I still, would we still have that $30,000 at the end of seven years or should we just keep paying it? No, I would not keep paying it. Do you know what the surrender charges would be? None. There's none. None. So you just, yes, 100% Jessica, close it. Stop it. Yes, don't keep putting something into a bad product. Don't keep keep it around. I get the surrender. I guess there are some surrender charges because I'm only going to get 14,000 if I cash it in. Right. But you're going to be paying close to 7,000 still with all these. Yeah. Yeah. So that means you're only, so that's, we're talking about $7,000 difference at the end of the day, which is nothing in your life right now, Jessica. That's nothing. You got paid for everything. You were fine. So I would, no, I would stop the madness. You got to stop it just because you've paid into this for 23 years. Doesn't mean you need to keep going. I mean, if you to your point, if you had just invested that $85 for 23 years, it'd be nine, it'd be $95,000, it'd be $90,000 instead of $30,000, right? So how do I talk him into that? Because he's saying, well, in seven years, we're going to have $30,000 if we just keep paying it. You have to think a bit from the law. It's a loss. You're, you're continuing the loss. You're not gaining anything. You're continuing a loss. And you don't want to do that. It's a, you're not considering what you could be doing with that money. And that's where he's confused. You could be investing that money, invest it for the next seven years. If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem. And NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place. And their AI tool, NetSuite Next, builds AI into everything, automating busy work like forecasting demand and chasing down overdue accounts. It's not complicated to use. You just ask it questions like you're talking to a person. And you're not starting from scratch because NetSuite is built on leading practices from thousands of businesses pre-loaded and ready to go. Ramsey Solutions switched to NetSuite years ago. It helped us know our numbers. And we've never looked back. If your revenue is at least seven figures, try NetSuite Next for free at NetSuite.com/ramsey. That's NetSuite.com/ramsey. Or click the link in the description. One thing around Ramsey is we love books. We love to read them. We love to write them. And we're so excited because our friend, Dr. John Deloney, is now his newest book is on pre-sale building the marriage you want. You can pre-order it now because here's the deal. Whenever you get married, you're not having a vision of like, okay, let's just be roommates and just deal with kids and work and schedules. And we look up and realize, my gosh, I don't even know if we know each other. But that is one reason that John wrote the book because so many people experienced that. So he wrote building the marriage you want and he explains how and why marriage can feel so hard, but why yours still matters and how you can make it great. There's practical tools to reconnect and to build a stronger marriage. Let me just tell you, John, even doing our event money and marriage together over the last few years, his insight and delivery and his wisdom around the subject you guys is unparalleled. It is so good. It is so, so good. And so we all can have a marriage tune up, right? So even if you feel like everything's fine to this point of like, oh my gosh, I don't know what I'm doing anymore. This book is for you. Anyone married out there. If you know someone that's married, this is a great purchase. So you can pre-order now for $20, $4.99 and you can get up to $100 dollars of free bonus item. So you get the audiobook, which I'm loving. I'm loving audiobooks these days. Yes, me too. Love me. Yes, you get the e-book as well. That will be delivered two weeks early, and you get instant access to a video that he created, Dr. John Deloney on Connected Communications. So get your copy now at ramsysolutions.com/store. And if you're watching on YouTube or listening on podcasts, we'll leave a link below. But you guys go pre-order this book today. It's amazing building the marriage you want. I'm so excited for that. So, so good. So we are just talking Jade about whole life insurance and term life and all of it. And insurance is not the most exciting fun topic in the world, but it's information that people need. And if you don't realize what you're signing up for, you could be stuck into decades of paying for a crappy product, essentially. Yes. I mean, I go back to that call that we just took and the lady said, okay, we're paying $85 per month and they'd been paying it for 23 years. And at the end of the 23 years, there was only $23,400 to their name, which I mean, if you do the math on that, that's less than a one percent return, number one, that's horrible. And then she says, oh, and then the payout, if somebody dies, the death benefit is only $120. And so the thing that you guys have to remember is, with whole life, there's always two pieces of it. There's the cash value that you're paying into. That's the investment portion. And the rate of return is really poor. Usually it's somewhere between two to four percent. Hers was like 1%. Terrible. And then there's the side where it's like, okay, here's the death benefit if you die. And so for her, I was trying to get her to understand like, there's an opportunity cost here. Because if she took that same $85 and they invested it themselves over that same 23-year term, that would have been closer to $90,000. If they invested it for the full 30-year term, that would have been $192,000, which is more than they would have gotten from the cash value and the death benefit combined. That's right. There were only differences. They don't have to die to get the money. They can just invest their money and live and have it. So we suggest guys term life through Xander insurance. With term life, you're only paying for the death benefit. You're not paying for a cash value. There's no investment portion. You're simply paying a low premium that somebody who's dependent on your income if you pass away, they're protected. And that's all you need. Yes. And term life is so inexpensive. Especially, you know, if you're healthy and even on the, you know, the younger side of life, if you have a young family, there should be no excuse. Like, getting term life insurance, it is so crucial. I think it's some of the saddest calls we take of someone passing away and the mom or the dad is left and like, they have nothing. They're having to go back to work. Keep life afloat versus having a pile of money if something happened, right? And obviously, that's not going to bring your loved one back. But in the grieving process and all of it, you guys, that is that's a gift to be able to slow down and to have and to have those resources. So and do it. Do it right away. It's not a baby step. It's not something to wait until you're out of dead. It's not something to wait until, you know, things feel better. Whatever that is because, I mean, the truth is, Rachel, I mean, everything's expensive. And even though term life insurance is way less expensive than a whole life, it's still an expense. And it's still something that people are like, gosh, another thing to pay for. That's right. That's right. I mean, you got to have it. If something were to happen, I mean, all of these things are always unexpected. So if something were to happen to you, you want to know that your family's covered 100%. All right, let's go to Caitlin in Pittsburgh, Pennsylvania. Hi, Caitlin. Welcome to the show. - Hi, thanks for taking my call. - Yes, absolutely, how can we help? - So my question is, my fiance and I decided to do a small, immediate family-only wedding so that we can prioritize buying a house. My parents were really mad about this decision whenever I told them because they expected our entire family to be invited. Well, it'd be nice to have everyone together the cheapest cost that we could find for a wedding of that size in this area would be around $30,000. So we're just calling to see if we're making the right decision. - So the wedding with everybody would cost you $30,000. So what you're saying? - Yeah, yeah, exactly. - And the wedding that you guys want is gonna cost around what? - It would be probably around $10,000. - Around $10,000. And are the parents paying for it? Would they be willing to pay for the $30,000 wedding? Or was that gonna be on you guys? - It would be enough. - Oh, well, come on now. - Sorry, Caitlin, they don't get a vote anymore. - Yeah. - And they'd be one thing if they were gonna pony up the cash. Okay, that's what we thought too. - How do you feel about that? Is that out of character for them? Or is that like in my head, my parents would be like, Rachel, you gotta cut the lists too big. It's getting too expensive. You don't even mean like, so to think that your daughter comes like, hey, I just want an intimate, small wedding and be responsible financially, you would think most parents would be applauding that. And, but I mean, I know that weddings bring out a lot of emotion to people, but sorry, I'm just curious. Is that that shock you, that that was their response? - It didn't shock me that much, actually. - Okay, okay, I was expecting it here. - Okay, so conflict and you having a set of values and decisions that are different than them has become more, has become semi-normal. - They always taught me to be very frugal. So it was a little bit surprising from that aspect whenever I told them the cost that they were still upset, but I did know that they would want everyone to be at the wedding. - When you say everyone, is this like all the cousins, all the uncles, all the aunts, or is this like, I mean, your immediate family is gonna be there. - Yeah, my immediate family would be there, but yeah, it would be around, my family alone is around 60 people, and then my fiance's family is around 40 people for cousins, aunts, uncles, grandparents. - So it'd be, you'd have to have a 100 plus wedding in order to make everybody happy. - Yeah, exactly. - I mean, the truth is, I think that anytime you go against what somebody's expectations are, like they're gonna feel it and they're gonna make their, their thoughts known, and then at that point, you just have to decide, do I care or not? Or is this something that I'm going to make a priority? And it sounds like for you, it's not. - Yeah, that's great. - And that's okay. - Yeah, it's fine, you're the one paying for it, and it's your experience, and it's your wedding. It's your money, and it's your wedding. - How old are you, Kaelin? - I'm 29. - Okay, so yeah, so you've lived enough life on your own to be pretty confident in your decision-making. You know what I mean, and that you're your own person. And that's the hard thing, parents, family, friends, and life, all of it. Like, it's not everyone is gonna understand every decision you make in life, but if it comes out of a place that you feel confident that you're in line and have self-integgity with your own values, then you can go in much more with your shoulders back, knowing this is what I want. And you're 29, you're a woman, Kaelin. You know what I mean, yeah, I feel like it's a little different. If you're 21, and you're like, oh my God, I should have heard my parents' feelings or something, I don't know, you're 29. - I do wanna say this, though. Like, I wanna be fair. Like, I can totally understand, and I'm gonna caveat this. I can totally understand. I think a mom and a dad probably have something in their mind that they're envisioning, whether it's walking down their, you know, walking their daughter down the aisle, and they see something in their minds, and so I can appreciate that. But if what they see in their minds costs 30 or $40,000, they should be saying, hey, here's 30 or $40,000, would you be open to this type of wedding? We've always envisioned this. And that's a different conversation. - Sure. - Absolutely. And they can be disappointed. Like, they'd be totally fair to say, man, we had this envision, it's not happening, but whatever you guys wanna do, giving them the dignity, it's when they freak out, and they're all mad about it, I'm like, you can't get, you can't get. - And let me tell you, a bunch of those aunts and uncles and cousins are totally okay. Not a, listen, they don't mind. - I'm telling you. - Especially the uncles. I think all the men are okay to skip every wedding from this white floorward. So you might be giving them kind of a gift. - We don't have to travel, we don't have to buy a dress, or a suit. (upbeat music) - Hey, George Camel here. A few years ago, someone stole my identity. And let me tell you, that is not a quick fix. It takes hours on the phone, piles of paperwork, and a whole lot of stress trying to untangle the mess. And even after that, there's this nagging paranoia because your information is already out there. And the truth is, you can do all the right things and still become a victim. That's how common identity theft is. And that's why I'm glad I had Zander's identity theft protection. When my identity was stolen, their team stepped in right away. They were monitoring my information and caught the issue, and their US-based recovery specialists helped handle the calls, the paperwork, the cleanup, so I didn't have to do it all on my own. Zander also includes up to $2 million in the stolen funds and expense reimbursement. And with the family plan, your kids are covered for free. You work too hard to let identity theft steal your time, your money, and your peace of mind. So go to zander.com to enroll today or call 800-356-4282. [MUSIC PLAYING] Next up, we have Nicole and San Francisco. Hi, Nicole. Welcome to the show. Hi. I'm so grateful for both of me to take my call. My question is, I have the opportunity to buy a home. But does it make sense to buy a home so close to retirement in a high cost of living area? OK. Well, what's the financial situation? What do you have? How much money do you have? How much do you have to for a home? All the things. Yeah, so in total, I have about $114,000 in total for all my investments, but about 115,000 in a brokerage account. The housing of an opportunity to buy is $870,000. And I'm at age 50 right now. When you say opportunity to buy, is there something-- is somebody giving you this house? Is there something special about it? What's causing it to be a quote unquote opportunity? Yeah, great question. In this area that I now live in, homes are very high in price. And there's typically 15 to 30 people putting bids on homes. And so in this particular circumstance, it's a friend of a friend that is saying that they would give me the opportunity to buy the home. And we would not include real estate agents, but rather a real estate attorney. So it would be more direct. And I would have more of the opportunities to buy the home directly from them without going out through all the process of trying to outbid. And you'd only put 115 down, or how much are you planning to put down on this $870,000 house? I-- you know, that's where I don't want to make a dumb decision. I was thinking, do I borrow from my 401K to help with a 20% down payment? How much is in your 401K? Right now, I have a 600 and 19,000 in my 401K. And then I have an IRA and a Roth IRA. And I also will have a pension from my work. What's in the IRAs? Yeah, for the IRA of 43,000 and then the Roth 36,000. OK. And then you'll have a pension too. Yeah, Rachel, I'm looking at these numbers. And I just, Nicole, I can't in good faith tell you that it's a good idea for you. How much do you make a month, Nicole? How much are you bringing in? Yeah, I bring in just over 11,000 for my growth income is 211 each year. And currently, I'm paying like, I have $4200 in rent. And so I suggest where I'm a bit of like, oh, I feel like it's not going towards something that will be a long-term asset. So let's show you some real numbers. Because I think that showing you real numbers will help you get your head around what's possible. So I've just got our mortgage calculator plugged in here. I don't know if you'll be able to watch this later. But if you tell me, OK, if I plug in $870,000, which is what you say you want to spend-- let's see, you should be able to see it-- $870,000, which is what you say you want to spend. And if I put your down payment, $115,000, that's what you have in cash. And I'm assuming the whole amount, I'm not even leaving anything out for three months of emergency, which is what we would advise. And then I'm running that out. Right now, I've got it at 6.6%. Gosh, I mean, that puts you with everything. And of course, it's guessing on taxes and home insurance. That puts you at $8,200,000. 70 for your payments for your payments every month and even if I were to drop that down I would never suggest a 30 year But even if I dropped it down it's still at six thousand six hundred It's still more than half of your take home pay So when we look at that that's kind of like the sobering wake-up call of Well, not only living in the San Francisco area, but just what it kind of takes to Make a down payment now if you were in a lower cost of living area and we dropped that down to you know A $450,000 house right even a $500,000 house now. Maybe we're starting to talk about something But I think for where you're at and knowing gosh. Did you say you're 59? No, I'm 50 so I have you know, at least another decade or 15 years last but right But if you're having a house that's cutting into 50% of your income You're not gonna have any margin to pay it down or pay it off and you'll have that mortgage Yeah, for all the way into retirement And I think what's hard and Nicole sometimes about these situations is it feels like Just because it's a good deal doesn't always mean it's a good deal for you And but but homeownership is something That we do want you working towards right and I understand you're like oh gosh I'm 50 I'm paying $4,000 a month in rent like it's just it is it's a frustrating Reality, but I think doing this right now with what you have saved and everything I don't think I'm good faith I can tell you that that's gonna be a smart move long-term But you can start to you can start to think about okay, obviously For this portion of your life up until this point. It's been a value for you to live in San Francisco whether it's for the people the job for whatever reason you've lived there if you decide that Purchasing a home is going to be like that top value in your life Then you've got to start thinking about okay What would it look like for me to relocate somewhere where I could actually make that possible? Could I find a job there? Could I right? So I'm just wondering is that something is buying a house? So important to you that you'd be willing to relocate to an area where it's possible Yeah, it's a great. I you know, I recently divorced at the beginning of the year So I did read I located myself to a more expensive state so I did own a home before and I guess is the other option if I do want to own a home and think about retirement down the road Would it also make sense to maybe looking to purchasing a home and and you know the state? I came from which was Nevada or another state with more affordable housing and You know, I'd stay here for right now because I am so grateful. I'm around my family. I can still work remote all of the things that You know are good after you know being divorced and all of the things. Yeah So could that be another option? I guess would be I just want you know think about looking at investing in a property In in a place that you know, I would feel comfortable. Maybe you were tiring and later down the road But I could still no Yeah, I hear you I hear you my only fear is being a long-term or a long-distance landlord's really difficult and The location at which you buy could look drastically different in 10 years And it may not be where you want to be anyways in 10 years So I would rather you invest this money let it grow in the market and then when you're ready to buy a house You're like all right. I got you know all this because how much are you able to save a month? I'm just curious Really only 3000 a month Okay, I don't have any debt and You know babysits changed my life 15 years ago. So I've also in the process like I have everything paid off for my kids and their tuition So yeah, it really the work that you all do is awesome. Well done Yes, yeah, well, let me just say if you just put that 115 and instead of a down payment in San Francisco when you continue to invest you invest that invest 1500 a month That's going to be close to 700 thousand dollars In 10 years and that's a conservative right like you could be put in 2000 you could just be thinking okay I'm gonna have this index fund and it's gonna be my house funds and in 10 years Where's it gonna grow to and I'm gonna cash it out and buy a house with this specific right? That doesn't touch your retirement or anything So I'd feel better about you doing that right now Nicole and just investing so you have options I'm just I don't want to lock you into real estate where you may not want to be and You don't know you know at all what's gonna what's gonna happen and your investments are probably gonna Go at a faster rate grow at a fast rate and I say this during a tough stock market Weak or two I understand but overall overall I think you'll probably get a faster rate of return in the market then with real Estates. Yeah, absolutely and I mean frankly, you just can't afford that house right now Yes, yeah, okay. It's all totally makes sense thanks for your perspective Yes, and Nicole I'm sorry about the change in life earlier this year with the divorce and everything that and that feeling of just wanting to Plant roots and and make some big decisions for yourself. I'm sure it's just right there. I could imagine That being part of the motivation - because your life has changed so much so but I'm I'm so impressed by you of What you've done thus far. I mean like it's unbelievable. I mean you have almost a million dollars really cool You know what you mean 750,000 in retirement. You're sending kids to school debt free I mean you're doing amazing Nicole amazing, and I think you would think yourself later of having a bunch of money in the market Versus buying this house right now I agree Welcome back to the ramsie show in the fair winds at credit union studio up next we have Cindy in Orlando Hi, Cindy welcome to the show Hi, hello. Hello. How can we help? Yes? Absolutely. Thanks for calling Thank you This is one of dad's daughters and she's in debt her and her husband are in debt and we want to get out of debt It's you Yes, ma'am. Oh not your daughter. I was thinking. No God daughter god daughter. Oh, yeah There's a lot of those for sure for sure and you're one of them. All right, so what's going on? well We're retired and our income every month is $2,324 and A roof we owe on a roof in a home equity loan the roof is 30,599 dollars Mm-hmm, and the home equity loan is 58,000. Oh, what did you what did you get with the home equity loan? Just things to fix the home up with Okay, and how old are you guys? We're in our 60s. What's 60 what? I'm 69. Okay Okay, and you're looking for a way you have nothing in retirement the only income you're making is about 2,300 a month Yes, ma'am. Okay. How much is your house worth? It's about two 244,000. Okay. How much do you owe on it? It's we don't have a mortgage. Oh good. Okay, so that's paid off. Okay. It's paid off. Okay But you got the home equity loan. Yeah, I've cried out and then the $30,000 roof. Oh, okay Yep, well, that's that's a tough one. I mean, 88 that well I was gonna say I mean that I mean you could make a drastic move and say hey this house has some equity in it and we're gonna go buy a condo that's half this and pay this debt off or we're gonna have to make an income and and do something to get some money in How much of your 2,324 does do these two payments take up? One it's probably about 600. Okay, and what about cars? What do you do you have paid off vehicles? Yeah, we don't hit we don't owe anything on a car truck. We have a truck. We have one vehicle It's a truck and we don't owe anything on it and they're in good working condition. Yes, okay, because Yeah, I mean to Rachel's point you're either gonna do something drastic with your home Which I don't even know if there's something available. Yeah, it's true in your area for that or You're gonna have to look for ways like what can I do at 69 years old that would bring an income to just start hammering away at this Okay, yep, and no, sorry. I think I did ask this and you just double double checking no savings anywhere though, right? No, no, okay. Yeah, cuz I mean if even if you throw a thousand dollars at this it would take you seven years to pay it off Which feels It feels big, but I mean it's almost a hundred thousand dollars in debt. So right at your situation I mean, I would that that would be aggressive to put half of your What you're making? I don't think you could look. I don't think you would be able to financially do that But if you're if you guys could work somewhere. Yeah, two or three days a week's ending Which I know it's not what you like it's it's it's kind of like a rock in a hard place So it's just the math side of it all so either income goes up or Something changes with the equity in the home and you guys just say long term, but I'm with Jade I mean it's probably gonna be a hard hard reality, but I love that there's a paid-off home because that's one thing we do want in retirement, but you got this 88,000. So either you guys buckle down and say, "All right, we're going to try to bring in each 2,000 a month while you're in good health, while you're in good health, and that's 4,000 we knock it out in two years." And so that's probably what's going to have to happen if you want this out. So I'm so sorry, though, that's not fun. All right, let's go to, is it Marissa in Orlando, as well, back to back cities. Hi, welcome to the show. Hi, it's a polystyping with both of you. So my next one and I, we have a question. So we paid off our mortgage about two to three months ago. Amazing. We have now two properties, both mortgage-free, and I wanted to know, so we've maxed out our 401k, our Roth IRA, with big dealers, kids, college, all, you know, we've left on every change. Yeah, we've got 330 in retirement now, and about a hundred thousand dollars just getting on the bank, and now we have all this money coming in, and then we don't know what to do with it. How old are you guys? We're 42 and 47. Oh, wait a go. So the question is, what percentage of our net worth should be in real estate? I love real estate, and my husband is a little yes. He's a little if, so what you said? Yeah, so funny. Well, I think it would, I think it's a pretty personal take. You know, some people don't want to deal with real estate at all, and they have nothing except for their primary residence and everything's in the market. You have someone if Dave was sitting here. A lot of his stuff is real estate. He loves real estate, and so a lot of his money's tied up in real estate because he loves it that much. So I think it's going to be a decision that you guys make together. And again, it's kind of a personal feel. I like the, I like the diversification of it. I don't like to be too heavy real estate for too long, or for me, even too much in the market. I kind of like, I like the idea of both if you're able to, which it sounds like you guys are. And so there's, we don't have like a set percentage. It's kind of more based on you guys personally of, if it's, you know, of course paid for all that. I mean, that, that's really the game changer and at all, and you guys have that. So it would be you and your husband sitting down and you guys getting to agreement within your marriage and your family of what do we want, what, what feels comfortable to us? How much margin is it, Marcia, every, every month? Oh, right now we're about 15,000 a month. And is there a property that you have your eye on? I do. I do. But then that's the issue. It's something up, like in another state, where I will be kind of a kind of a cabin type of a thing. And I think that's why my husband is a little bit, you know, like a, like a, like a second home, like a vacation home. You will be kind of a vacation home. Okay. Yeah. Well, the good news is, the second property is here in the same state. Then it's rented. It's been rented ever since. The good news is, no matter what you do, you're going to have to put money aside for quite a while. So you guys have some time to think about it. It's not like, yeah, after one or two months, you'd have the money to buy this. Right. So you can start socking that away in whatever brokerage account or wherever you guys keep your real estate money and then spend some time thinking and talking about what that next purchase is. Yeah. But I would look at your entire household income and still be investing into that retirement account at 15% of what you guys are bringing in. And I would include the rent and that as well. You know, if everything coming in, we're going to invest 15% into retirement because we want that stable and good for sure. And then anything above and beyond, you know, make a, make a five year goal of, hey, let's find another property in four to five years. And what do we have to put away each month? And if that's a goal that you guys decide as a couple to, to go after, I think, I think it's wonderful, but you guys are doing it the right way, for sure. I finally get to announce that my brand new book, Building the Marriage You Want is available for preorder. If you and your spouse have been feeling like roommates lately, like maybe this thing called our marriage has just run its course, like this is just the way marriage is. I get it. This book is me sitting at the table with you and you and your spouse helping you both take the next right step towards the marriage you both want marriage is still worth it. Order now for 2499 and get over $100 and preorder bonus items at Ramsey Solutions dot com slash store. We love to hear from you guys. You make this show possible. Everyone like calls in and asks their questions. So make sure that, yeah, you, you stay involved. You guys, you can call us at triple eight eight to five five to two five. And the, the show is our callers. It's you guys. And so if you have a question, give us a call. Get on the line and hopefully we'll be able to help you out. And then another option we do have for questions is ask Ramsey. And our question today is brought to you by ask Ramsey, which is our free AI tool that provides you with personalized money answers based on Ramsey principles. You can visit Ramsey Solutions dot com slash ask Ramsey. Yeah, today's question comes from Travis and Hawaii. He says, is the thousand dollar emergency fund and the three to six month emergency fund two different funds or does one build on another? Also, how are they different from having sinking funds for car purchases, vacations, et cetera? That's a really good question. They are two completely different things. So let's start with the thousand dollar emergency fund. You are correct. Baby step one does build into baby step three. So you do baby step one, you get the thousand dollar saved, you pay off the debt. And then on baby step three, you add to that thousand. And that's what you use to create your three to six month fund. The thought there is that if you ever have to dwindle that thousand dollar emergency fund, you go back and build it up before you start paying off more debt. So yeah, you do build off of that. And then the other part of the question is, is it the same as a sinking fund? How is it different? So emergency fund is four emergencies. The way that you think about an emergency is something that is totally urgent. It's totally necessary. And it's like, it can't wait. You have to do it. Did I leave anything out? Unexpected. Oh, yes, unexpected. 100%. So an emergency is not, I need new tires. If your tires wear out, that's going to happen over time. Now, if you were to drive over a nail suddenly, that should be an emergency, right? So you have to think about it like that. And a sinking fund is separate because this is something that we know is coming. We know it's like a Christmas sinking fund. We know that Christmas is there. It's the same time every year. Um, maybe you're going to a wedding. You know, it's coming up. You're starting to put aside small amounts of money into sinking funds. And I would say this, if you're in baby step two, you need to limit your sinking funds because you need to have most of your money going towards your debt every single month, not dwindled away in all these little $30 sinking funds. That's right. Yeah. Yeah. And the sinking fund is knowing and expenses coming. And there's like an end date to it. So it's like, there's Christmas or there's a trip or something like you know, it's coming and it's there. And you're just putting a little side every single month so that when the expense hits, you have the money saved. Yeah. But yeah, the, and the emergency funds, yeah, just like what you're saying, all together. And you guys, that step we hear for so many is like that baby step three. Yes. When that's done, oh, it feels so good. Then you get to start putting money in retirement and kids college paying the house off like all of that. And so there's a, there's a world of difference from a financial standpoint, I would say, and an emotional standpoint when you hit that and you get out of debt and all of it. Absolutely. Absolutely. All right. Let's go to tie in Destin, Florida. Hi, tie. Welcome to the show. Hi, thanks for having me. Yes, thanks for calling in. How can we help? So my wife and I were raised by normal people. So about a year ago, we found ourselves in about $100,000 in debt and divorce papers on the table. We found our auntie and you guys saved our marriage through a journey of getting through baby step two. Our daughter has started picking up one couple of things. She knows that we're in debt. She knows that we're trying to get out. She knows that we want to come do a debt free screen. Every time she sees one woman watching the show, she gets excited. She's only five though. So what are some age appropriate ways that we can look at teaching our daughter, her and her younger sister when she gets older about finances and how to be weird people? Yeah, it's a great question. Well, there's kind of two sides. I always think with my kids is I kind of bucket them into like tactical side of money and then there's the emotional side of money. And so with the tactical side, you know, You know, even at five, you know, doing chores, getting paid for them. And then eventually, you know, I'd say five, six, seven, I'm just thinking, my son just turned seven. So yeah, I mean, I think around his age, especially starting to, which we've not done yet with him, just some full transparency. But to do where, when they, when after they get paid, to start putting money in little envelopes. That's what we did as kids, some is in giving, some is in saving, some is in spending. And letting them physically budget tie, like with the actual money. And it's funny that that's really what it is, like they're learning, okay, I have to do all these different things with money. And reward them in that, you know, like let them give to where they want to give, let them have save and have a goal they're saving for. And something small, obviously at that age, like maybe it just takes a two weeks or three weeks to get what they're saving for. And then let them have fun and they can spend some of it, right? So you start to ingrain some of the tactical side of it. And then you'll start to, yeah, run into the emotional side of money, which is, I mean, contentments, you know, so and so's getting this and, you know, I want that too. And you know, teaching them that there's always going to be people in life that have bigger and better stuff than you start getting comfortable with it. That's what I tell my kids all the time. There will always be someone that has something better than you. That's just life. And so, again, whether it's gratitude, contentment, I mean, all these elements of money that allow them then to live below their means and do the give, save, spend as adults without debt. It all kind of, it kind of plays together. So I would say that that's an important thing. And then obviously tie you know and I mean, Jay, you have kids, so you know this, but more is cotton taught. I know, that's right. So what you're doing now, honestly, someone say it's just enough, like they're just, they're just seeing an example, right? Anything above and beyond just what you guys are doing is going to be just icing on the cake. I mean, yeah, the same way you said you were raised by normal people and you picked up on that behavior just by seeing that they're going to pick up on behavior just by seeing what you guys do. Right. Okay. So literally the same thing we're doing just on a smaller scale. I mean, sir, yeah, I mean, honestly, yes, I mean, absolutely. That's what I would. And then as they get older, I think my parents did good with this. They brought us in to money conversations, looking at statements. I remember of like investments, and it was nothing like crazy, but it was like, hey, here was like a, you know, a fund that we started and this is what it's at, learning what bills cost, you know, what it takes to run a household, how to do taxes, what compound interest is, right? So you can start to, to magnify and give them the knowledge of how all this works as age appropriately as they get older, but at five, honestly, time, I'd have them do some chores, let them give, say, and spend that money and tell them debt equals death, you know, just to stay away. I know. That's right. I was, I was brainwashed, uh, so that was, that was my upbringing. We are doing awesome time. I appreciate the advice. Yes. Absolutely. We're doing to, to hear from the, the marriage perspective, you know what I mean, like it's, there's something so healing about couples coming together and having a shared goal and a shared purpose for their lives that's, it's bigger than just money, right? It plays out in a sense that it's financial, but it's, it's so much more than that. It's so much deeper than that. And that's what they're experiencing. So Ty, I mean, I, I applaud you. I was talking to someone in the lobby earlier. I don't know if she's still out there, but she was like, I've been listening to you since I was, you guys since I was five years old, and I thought, Oh, God bless you. God bless you. But you think about, but you, you know, like when you're 2021, those kids, they look back and they're like, thank you for setting an example in a, in a way to live with this. And, you know, I used to say all the time that my dad's like the emergency surgeon, and I'm the preventative medicine, right? Like these two night and day stories of bankruptcy and heartache and having to figure out the right way. And that second gen, you guys, those of you that have little kids, like, let me just tell you, second gen, we're not perfect by any means, but there's a gift, like I was given a gift because we learn this at a young age and you get, you're not going to be perfect with money. You're not going to be perfect, but to avoid so many of the big traps that are set right before you, especially as a young adult that you can just see it. You know it and you go around it. And it's just not even a thing. It's just not even a thing. And so for all you young families listening, there's a beauty in that changing your family tree that's so real, and it starts with you. In your example, that Morris caught them tauts and those can be hard days and exhausting days. I know you and Sam's journey was long and hard, but what your kids now, these kids are never going to know debt. They don't even know, yeah, they know to avoid it. That's it. You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the Smart Vestor program. Smart Vestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to ramsysolutions.com/smartvestor to get connected. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com/smartvester Next up we have Sandraia in Calgary, Canada. Welcome to this show. Hi. Thanks for having me. Yes, absolutely. How can we help? I have a daughter. My oldest is getting married this coming summer, next summer. Congratulations. Congratulations. Thanks. Yeah. And every year my husband gets a good chunk of a tax return because Canada has this crazy system. And so we usually always put a massive chunk towards our mortgage because we're trying to pay it off really quick because we have a 17-year mortgage. He wants to pay a 15-year mortgage. He wants to pay it off in seven. So we're wanting, I'm wanting to pause it this year so that we can give her a bit towards her wedding. We can't pay for the whole thing. She, her fiance and her both have, you know, they both worked. They're both in school though, but they'll, they have a chunk to help pay, but I want to give a little bit more so that they can, you know, for those extra things, photography is expensive. Sure. Yeah. How much do you want to put towards it? I just want to give her $5,000, which isn't a lot, but that, that would mean that we can't put, we usually put 10 grand towards our mortgage extra every year. And we can't do that this year. And he, I'm just, is that reasonable? Yes. Totally. Yes, that's reasonable. Totally. Yes. 100%. Yes. Yes. Your daughter's never, she's going to get married once and if you're okay, we're able to contribute to this. Yes. Even. Yeah. I'm going to go out on a limb and even say if it was eight that like, yeah, if you wanted to do all of it. All of it. Yes. Well, I'm saying if you wanted to, the way that we teach the point is that you're on a, on a rhythm that you decide that you're putting extra towards your marriage, towards your mortgage. You're doing that. And then if, then you decide, hey, we're going to pause that temporarily to do something that we think is important, whether it's a wedding, a trip, you have the ability to do that because you're being intentional about that mortgage and putting extra on it. Yeah. True. Okay. Yep. Okay. You're good. Yes. Tell your husband you got the green light from the Rams. Okay. So, yes. He was curious what you guys would say. Yes. For sure. Yeah. That's a good point to remember that four, five, six, and seven, or four, five, and six, I should say, so you get to seven is intentional. So you don't have to be hard driving crazy, right? It's good to have a goal. I'm like, hey, it'd be great to have this paid off then we're going to work towards that. But also life's going to happen in the middle of it. And so, yeah, totally fine. All right. Up next, we have a, is it Adrian and Fort Lauderdale? Yes. Yes. Welcome to this. Sorry. So that was all question marks. Adrian and Fort Lauderdale? Correct. Sorry. Yes. Okay. Oh, welcome to the show Adrian. How can we help? Thank you so much. Thank you for having me. I'm calling because my wife and I have been aggressively saving to purchase at home, giving in Fort Lauderdale. Aggressive is a, it sounds aggressive, but it doesn't seem like a lot. But we're really, we're working towards it. And we do have a couple loans, not a lot, but just car loans. So, about six in one car and 24 and the other, but total saved. We have about 180 and 30 of that. I saved as like an emergency fund. I know I'm a little bit backward here and like all over the place. My question is should. Given that we're saving, you know, we're living with the in-laws, we're also up to small children. Should I just take money from that big lump sum, just kind of wipe out those car loans and continue forward? Is that like, smart? It seems like crazy to me, but also it seems like the best decision, especially, you know, get the income ratio and be able to, you know, open up, you know, it's about 700, like 750 a month in car payment. Mm-hmm. That's right. Yeah. How much do you guys make a year? I make 91, and my wife makes it out. I think total is like, 15. Okay. Okay, perfect. I mean, I would totally do that, Adrian. I think you have the right idea, which is, gosh, if I, if I reach into, I've got 150, or I mean, I guess the whole 180, if you think about it in terms of the baby steps, if I reach over, take 30 to pay off the debt, then set aside 30 as the emergency fund. And now you're down to 120 that can be saved up to go towards this house. I would do that. And now you have $750 a month that's freed up. You can use that to, you know, start funding some cash cars here, because you're going to have to reach in and do something, like, you know, for you guys to drive. How much do you want to spend on? Well, I guess you're going to pay them off, never mind. But yeah, I would definitely do that. And then you've got the 750 saved up that you can start checking away at this house fund some more. Right. Yeah, because I mean, that's the, that's the positive side of doing it is that all the payments go to the house fund. So you just freed up. I mean, man, you can go really fast. I'm such a rounder upper. I'm like, close to a thousand bucks, you know what I mean? But genuinely, I'm like, you just keep, yeah, throwing money away and you'll get there that much faster to replenish it. And you go into the house buying process. Oh, so free. And yes, and it is, it is so worth it doing it this way versus for some people, which will you guys have a ton saved. So well done on that. But some people go in with not a lot saved, very small down payment, big mortgage and debt. And it's just a recipe for disaster. But I just love what he's doing. Like they obviously have the mentality of it's worth sacrificing. Like it's worth the long term short term sacrifice for a long term gain. And I think that is what you have to have in today's market. All right. Let's go to Christine and Pittsburgh. Hi, Christine. Welcome to the show. Hi, I'm so happy to talk to you guys today. How can we help? I'm looking for some detailed guidance and direction on transitioning into retirement. Okay, we basically, we did FQ 17 years ago. And the one thing up you saved our financial life, but the one thing that I've done well or that we've done well over the years is we did save for retirement. So no, I'm sitting on all this money in five different accounts. And I have no idea what to do with it. Well done on the saving. What do you have? Can you list out what you have in your investment accounts? Sure. It's a total of around 1.3 million. I've got five 401Ks. So basically one for every employer. I never I never rolled any of them over because I wasn't sure exactly how to do that. Okay. And then my husband has a Roth IRA with so many in it as well. So what's in the five 401Ks total? Hold on a second. It's it's it's almost all of it. Okay. So the 1.3 million doesn't include your house. Now it doesn't include my house. I do still have a mortgage on the house. We owe about 74,000 on the house. It will be paid off before we retire. That's great. Yeah. Well, I can tell you whether dead. Well, if I were you to Christina, I would sit down with a smart investor pro and I would combine a lot of this just to make it simple for you guys. I mean, having the five 401Ks all of it, you can just roll everything into a traditional IRA and let that grow. You'll pay the taxes on it, but you would do the same with a traditional 401K as well. But that's probably going to simplify your life and a smart investor broken up. You do that. But yeah, the withdrawal rates. This is always a a 10 not a tension point, but it is we're probably a little bit more aggressive here at Ramsey talking about it because it could be, you know, up to 7% to withdraw a year where kind of the standard in the financial space is more like 4%. If you will. And again, we get that 7% because overall on average, the market is doing 11 to 12% on average, 11.8% since it began, if you will. So if you kind of look at that and say, okay, there's a good argument, say 7%, you'll probably be fine. You'll be fine. And again, some financial advisors are going to be a little bit more on the conservative side at 4%. Yeah, yeah. So yeah, it always makes me laugh because I feel like this is one area of Dave's actually more aggressive and less conservative. I feel like everything we do is very conservative and safe and this one. It's like, you got it. You can do it. But I would sit down with the smart investor pro and kind of simplify everything and talk to them. They'll put you in some good funds. You can look at the tax implications and everything, but you can go to ramseysolutions.com and find one in your area Christine. But you guys have done a fabulous job. I mean, we applaud you. Well done. Guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now. You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're going to start winning with money, you have to get on a budget and the easiest way to get started and stick to it is with the every dollar budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what? It's free. So no excuses. Download every dollar in the App Store or Google Play today. All right. Our scripture of the day comes from Micah 6/8. He has shown you a mortal. Oh, mortal. That's that's some biblical language. They use a mortal. What is good? What does the Lord require of you to act justly and to love mercy and to walk humbly with your God? That is a good one. Micah 6/8. Winston Churchill said, "Sometimes doing your best is not good enough. Sometimes you must do what is required." That could have been used on some of the collars. I feel like. Do what is required. Do it is required. Do it. All right. It's good. A Cassidy in San Diego, California. Hi, Cassidy. Welcome to the show. Hi, Rachel. How are you guys doing? We're doing great. How can we help? So my question today is when do you decide to continue taking a paycheck from a job that in hindsight is kind of like the American Dream. It's corporate. It has great benefits for one K, that type of thing. And even yet, when you can't stand it any longer. Oh, no. Are you miserable? That's like a lack of a better word. What makes it so bad? So I'm a personal banker for a large financial institution. The biggest thing for me is a lot of the services and products that we provide. It doesn't sit well with me all day. I'm pushing credit cards and loans and I have been following daisers. I have no more consumer debt. I'm just trying to stockpile cash as much as I can. And pushing credit cards makes me deeply ill. I can't do it. And then my commission isn't as great. So my paycheck isn't as wonderful. And then the other side of it is the type of people I deal with is just like I don't like dealing with other people's money to begin with. It's hard. Like everyone's protective over their money and as they should be. But it's really, it's just I literally, I can't get out of bed in the morning. It's like an hour to even just find the strength to get up. So what do you want to do instead? I used to work for a large company, like a large fund-boss company and I did like events and all this stuff. And I had a life altering event where I went like $30,000 in the hole with medical bills and had no insurance and had a figure. all that out and I was able to get myself out of it, thankfully. But my family was like, "Kathy, you should really go into like a corporate job. Like you work at 9 to 5 and the pay is great because it's guaranteed. I have those health benefits and I, you know, they're matching my 401k. But you don't like the work. That's the thing. You said you can hardly get out of bed. I don't know how to like get my transition. Well, I would start applying. I think it would be unwise to just jump ship. No. Right. Tomorrow and just put in your notice. But how quickly do you think you could find something else? I mean, could you find something the next 30 days, 60 days? So I've been applying for the past like four months and I haven't gotten like a single callback. I've just gotten constant rejection letters. I've been working my resume like four or five times. I don't want to like jump ship. I've done that once before when I was younger. Yeah. I was blessed to have my parents help me. Let me tell you this. Our friend King Coleman always talks about the proximity principle. And it's more these days about who you know than just putting in an application or a line. Right. And so if you do that, yeah, it ends up kind of in a black hole. So what I would, what I would concentrate on is who are the people that I know or people that I know that know people, right? It could be someone's cousin or I mean, I don't know. Like be thinking at the box, start talking to people and say, Hey, where can I get an in, a personal in and a company that I would, I would feel good about, right? Because yes, as much as your value system is bumping up against this job, I do want you out because I don't want you living in a miserable situation for the rest of your life, right? You're working life. So I want you out. But, you know, but I also will say, you know, nothing immoral necessarily is necessarily happening. You know what I mean? Like we do talk to some people and like there's fraud or people are still, you know, and you're like, I just got to get out because this is like an illegal situation that I'm in. And this is more just going against your value system, which I would listen to and it sounds like you are. So that should give you maybe some urgency to make some connections and to say, Hey, where can I go? Where is this urgent step next? Because I don't, I don't know if there's another way to do it well until you have something landed, you know? Absolutely. But, you know, we'll give you Ken's book. He wrote a book, which is great. It's got, find the work you're wired to do. And there's a great assessment in the back. And it may, you know, that may just help you just have maybe a different idea of like, Oh my gosh, there's like these other fields out there. I wasn't even thinking about it, but my skill set and my passion, you know, and, you know, end up in this category that I never even thought about. You know, so if anything, maybe it's a springboard of some new ideas. So we'll ship that to you. Cristian will pick up and we can get you a copy of that. But I will say, like, yes, applying for places, excellent. But the best thing you can probably do is, who do you know? Where are your connections? That'd be my homework. Make a list of 10 people. And I would call them. I would not text them. I would, I would call them. I take them to coffee. I would make an impact. Yes. So that when they're thinking, because it's always like, who do you think of in a conversation? And it's like, Oh, I just had coffee with her. Yes. It's that kind of thing. So I, I would make it, make it a point to make a meaningful connection. Don't just text them. Don't just pop in their DMs. Like, call them on the phone, invite them somewhere and say, here's what I'm looking. What do you know? And just make that part of your process. Yeah. And I would not stop applying either. Like I would still continue, put your application in. But again, the most success we see these days is, you know, about who you know or who's somewhere that you want to be. And you're like, how do I get, how do I get there? Right? It's the people around us that make, make a big impact. So yeah. So, but I, I want that for you in the next 60 days, just to have the motivation to get up. That's a miserable way to live, right? I mean, you want to enjoy your job. And when you don't, then yeah, that's, that's a reason to, to move on. So I hope that helps. Cassidy and good luck to you. Let's go to Kate in St. Louis. Hi, Kate. Welcome to the show. Hello. Thank you. I had a question today around how old do I have to be to retire? I'm 55 and I'm married. And I have, I have a, both my husband and I work. And I have questions kind of around the, my 401Ks and the rule of 55. And I'm kind of asking these questions now because I work in sales outside sales. And my current employer is currently systematically going through and laying self staff off. So I don't think I can stay where I'm at. How much do you guys have? Yeah. In 401K. I have in a, a, a not work 401K when I rolled over into, I guess you called a personal one from previous jobs. I have 1.3 million in that one. And then the one I have at work right now that's tied to my job. I only have about 95,000 in, because I haven't worked here a super long time. And then my husband, he didn't do as well with the savings. This is the second marriage for both of us. And anyway, he had, he was one of those that cashed it in before. So he has about 95,000 in it. But he's 48 and he loves his job and plans to work till he 65. How much does he make a year without bonus around 115? Can you all live on that? Well, that's what I, I think I already know they answered my question. I don't think we can. Well, I don't think I want to quite yet. That's fair. That's fair. Yeah. How much do you like? You know, the last two years, I've made right around 100,000. And then the few years prior to that, it was more like 70 to 80. My job with commissions and bonus can kind of vary quite a bit. I wonder if you could go to like more of a work at will, like part time. Yeah. Instead of like completely, I bring in zero income and I'm pulling as much as I need off of that nest egg. You're only 55. Sure. I got to believe there's something that you want to contribute at a level that's maybe not as strong as it has been, but it does bring in an income to where you can let this money continue to grow. Yes. And you're not 59 and a half yet. So you can't pull without that penalty. Well, thanks for the call, Kate. Thanks to everyone in the booth, Jade. Always fun. Thanks to our great audience today. They are amazing. They've been amazing. And remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace. Christ Jesus.