Stop Borrowing, Start Building Wealth

[MUSIC] Brought to you by the EveryDollar app. Start budgeting for free today. [MUSIC] >> Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm Rachel Cruz hosting this hour with J4 Shaw. So give us a call at AAA825-225. And we'll answer questions about your life and your money. All right, first step, we have Justin in Knoxville, Tennessee. Hi, Justin, welcome to the show. >> Hey, how are you? >> Hi, we're doing great. How can we help? >> So I'm just trying to figure out we've got a little over $100,000 in debt. We get married in a little over a month. And we are aiming to be as close to debt free as possible. Obviously not with the house, but trying to get everything else paid off to where we can have more freedom to do the things that we want to do. >> So how much of the $100,000 is the house and how much of it is like consumer debt? >> Now the house is another 205, the 100, a little over 100 is our cars and credit cards. >> Oh, okay, okay, so break it out for us, tell us about the cars, tell us about the credit cards. >> So we've got, in her car we have about $50,000, $54,000 in my truck, we've got about $49,700. >> Oh boy, gosh, a lot of debt on cars. >> I hope you guys make a time. >> Yeah, what do you all make Justin? All your household income be combined in everything in a month? >> Combined a month would be around $13,000. >> All right. >> And after tax. >> After tax? >> Okay, and then the credit cards are just another, what, like, five? >> Yeah, we've got $2,800 on one, $2,500 on another, and then $600 on one, and $1,700 on another. >> Okay. >> So, a little over $6,000, and split the $2,400 card. >> So I thought I heard you say, and maybe I misunderstood, I thought I heard you say, I'd love to have as much of this paid off before the wedding as possible. Did I hear that correctly? >> Not before, but we're going to start on it now, whatever plan we have, and just getting it done as quickly as possible is what we'd like. >> Well, I asked that because, I mean, I'm looking at these cars and I'm thinking, oh my gosh, what an easy offload of almost $100,000 of debt. >> Yeah, and bring home $130,000, $160,000. So, yeah, the cars, the cars just, and they need to go. >> Yeah, and so, what we kind of, you know, planned out in our head is the snowball on the credit cards. >> Mm-hm. >> It then double and triple on one car until it's paid off, and then moving it all over to the other car. >> I mean, here's the problem with that. So, what Rachel said earlier is she was hinting at a rule of thumb that we have here, which is things that are going down in value, things with wheels and motors, should really be no more than half of your annual income, gross, right? So, if you're around $130,000, is that right? >> Together, we're a little over that. >> So, you're talking about me. >> Okay. >> She makes $105,000 a year. I make $56,000. >> Okay, so what? >> We're around $160,000 close to it. 160, okay, still, that is way more than what I would say, because half that puts you at $80,000 in cars, and you're at $100,000 in cars. >> Yeah. >> Over $100,000. How much could you sell them for? >> Right. >> Her's probably $59, probably $38. >> Okay, so you're under water on both of them. >> Do you have any money saved? >> Yeah, we've got close to probably $60,000 in savings. >> I love that. Is that for the wedding? >> That's just kind of for everything. So, the house is a new thing. We just got our house put on some family property, and we've spent probably $30,000 in what we had. So, we had a close to $90,000 before we started on the house. >> Mm-hm, and we're in the 50s now, are close to 60s. >> So, here's what I'm hearing. What I'm hearing is, and I love that you're calling now that you guys are starting a marriage fresh, because you really need organization. I think that you guys have good intention, but everything's kind of everywhere, and there's not a solid plan around it. And I would love to see you go into the marriage with a very clean perspective on how we feel about debt, how we feel about savings, how we're going to operate our lives going forward. And I would personally love to see you guys start that on a fresh foundation. If you said in the next 30 days, we're really going to be serious about selling off these cars, you have the money to clear the deficit, right? And then you have the money to turn around and buy something reasonable and cash for both of you. You could both spend $15,000 on a car and still have $30,000 left, which is a great starter emergency fund. It's probably around, you know, gets you close to the three months of expenses point. So, and then meanwhile, you could cash flow paying off the credit cards, and you truly could go into the first month of your marriage debt-free. - 100%. - How amazing would that feel? - Yeah. - Justin, do you guys-- - Yeah, absolutely. - Do you all both feel this way, who's kind of driving this idea of changing your financial situation? Is it more you, or is it hers, or both of you guys? - It's both of us. We're not in a hard spot, like we have the cash flow to pay the debt. Our big thing is like, we want to be able to not have to worry about making so many payments monthly. You know, it feels like we're always spending $5, $6, $700 here. - Yeah. - And then our big $1800 mortgage is a big thing, which we plan to refinance that in a year or so and get it lower. The thing is, that's not-- the mortgage shouldn't feel that way, because the mortgage is actually a fair piece of your $13,000 take home. The reason it feels like that is because of this debt, specifically, probably your car payments are what feel astronomical. When you add that all together, suddenly that $13,000 is whittled down, and you don't feel like you're being able to enjoy it. - Yeah, Justin, how much are you guys paying in car payments per month? - So my truck, the $49,000 that is at $584, is in her car, which had a start of $85,000, that we pay $980 a month on. - Good, nice. - Plus insurance. - Yeah, plus insurance, we pay $390 a month in insurance. - So y'all are $2,000 a month, basically, in cars. That's more than you pay for your house. - Right. - That doesn't sit right with me. Does it sit right with you? - No, and that's what we've-- that's a big reason why we've been talking about, first of all, getting all these cars paid off and then figuring something out with the vehicles. - So what do you think you're going to do? Because Rachel and I laid out our point of view, what do you think going off this call is your first course of action? - Talk to her about her car. Her is a big one. I would imagine. - Justin, yours is close. - Yours is close. - Yeah, why don't you marinate on this a little bit longer? Because I think you'll find that what Rachel and I are saying is the quickest course to what you asked us early on, which is you said, I'd love to go into the marriage with as little debt as possible. And Rachel and I gave you a solution to do that. - Yep, pay off those credit cards, sell the cars, just sit and start and start new. Just start fresh. Hey guys, it's Rachel Cruz. When it comes to life insurance, most people fall into one of two camps. The ones who make a plan to protect their family and the ones who hope everything will just work out. But hope isn't a financial plan. When you get married or have kids, your money decisions aren't just about you anymore. 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And I was wondering if they did a good idea to do, to put a mortgage on the house to pay off some of my debt. Okay. For the sole purpose of paying off debt. And to renovate the house, actually. And to renovate the house. Okay. How much debt do you have? Currently around $45,000. Apparently. What do you mean? You're like, that's what they're telling me. That's what they're telling me. Yep. So $25,000 of that is a car loan, $20,000 in credit cards. Credit cards. How much do you make a year? About $85,000. $85,000. Okay. So you mentioned that there was cash, $38,000 cash. I mean, what would cause you not to put that on the $45,000 of debt and then just cash flow the other, you know, $7,000 or whatever's left. That's good. I was planning on paying off the credit cards with that. And then fixing up a few things and repairing it, repairing the truck. So that's where that was going to go. It was to pay off the credit cards and then keep the truck loan and then pull out like $100,000 to pay off the truck. How much do you own the truck? $25,000. Oh, okay. Okay. And how much does it cost to fix the truck? So I was going to do about $3,000 to $4,000 of work. Okay. And is that urgent? Like, is this a car that you drive every day for work or is this just one of those third vehicles that's just sitting in the driveway that you want to get fixed? Probably it's not urgent, but it just needs it. So, you know, you take care of the truck. So it doesn't be worse. So it's not like a truck. Paul, are you planning on living in this house? Yes, I'm currently living in the house. Okay. Gotcha. You're right. You're currently living there or you're planning on it. What did you say? Currently living there. Currently living. Okay. And you said it needs work? It does need to be updated and plumbing fixed. And so I estimate, you know, to hardwood floors and just like a total not a total renovation, but just bring it up. So the the biggest thing I see so far, Paul, is you have used debt to get what you want in life, right? Whether it's cars, you have 20,000 in credit card debts. You're wanting to go into more debts to pay off debt and to do this. And so what ends up happening is you end up living in the cycle of just payments of continually going to debt for it to be the thing to get you what you want versus Paul going to Paul and getting what you need from from you, which is going to take longer. It's going to take a lot of work and more patience. But at the end of the day, when you eventually eliminate debt from your life, not only does peace and sanity and a good sleep at night happen, but also you get to keep your $85,000 income versus it going out six different directions like it is now. So my goal and Jade's goal for you would be to not only not take out this mortgage to go deeper in the cycle you've been in, but to become a free man and to have autonomy over your money and actually get out of debt and still get what you want. So that's what I want to lay out for you, is this is what this is what I would do and Jade, you can concur or push back so far I concur. Yes. So I would take your $38,000 in cash and I would pay off the credit cards tonight. You'll have $18,000 left. I would either use some of that cash to fix the $3,000 you need on the truck and then throw $15,000 at the loan, get it down to $10,000 and then say, you know what, I'm going to throw two to three thousand a month at this and get it paid off in the next three months. Super fast. So we're in at the end of August, you got August, you got September, October, November, by Christmas, Paul, you're completely debt free. And then you're going to start building up an emergency fund over the course of January, February, March and get at least a three month emergency fund. And then we're going to look at the house. So we'll attack the house next spring and we're going to cash flow it. Yes. We're going to see what we need urgently and we're going to save up and fix part of the plumbing over on these three bathrooms that need it the most. And then the next and then the next and then the hardwood floors can come next fall. And we're going to just live a life and pace our life decisions based on what we can afford, not what we can borrow. Yeah, I mean, Paul, this this 400,000 completely free and clear house is such a blessing. What a gift. Yes. It is a clear blue, perfect blessing in your lap to turn around and put debt on it. It almost feels disrespectful to the blessing. If I can say that I don't want to overstep, but it almost does because that person worked hard to be able to leave that legacy gift and for it to be debt free. And so there's a part of that that that I see that it just doesn't it doesn't feel right for you to turn around and take out debt. I mean, am I off base there or do you feel that too? That's you know, you're on target. Yeah, I think what Rachel laid out and I just want to call this out because there's a part of all of us that wants what we want when we want it, right? And probably when you received this, it was like, oh gosh, I can do so much now I can do this and this and this and this. And it's exciting to be able to do the things you want and some of the things that have probably been on your waiting list for years. And it's like, oh gosh, I can finally get to this, but to slow down and do it right and to make sure that you're not adding any lack of gain to yourself, right? Right? You want to be able to keep moving forward and not cause anything to go backwards. And one of the things I say all the time over here is you've you can't solve a problem while simultaneously creating it. So you do the very first step you have to take is decide. I just don't I'm not going to borrow money anymore. And that's Paul, if there's not one thing that I would say leaving this call, is that needs to be your mindset? I'm not borrowing any money anymore. And I don't need to. That sounds good. That's why I call it. Yeah. I mean, honestly, this is a it's kind of a fork in the road of what you get to decide this huge gift of a home. And are you going to continue the blessing of it to bless your life, to keep you to have a level of peace and sanity and control? Or are you going to continue to fall pray to the idea that debt has to be part of your life? And that you see an asset like we see an asset like this at 400,000 our house and we're like, oh my gosh, like, you're done. Like you're like, there's nothing tied to it. Like what a gift. And then some people see and they're like, oh, it's basically a chinching. It's like a little miniature bank that I get to go borrow from and really know. No, because that turns the gift right back into the problem of sitting there with $20,000 of credit card debt and a 20, you know, and a borrow line or 25,000. And I think there's an intentional intentionality play on the way of thinking on both sides of this because we're sitting here saying the intentional thing to do is draw a line in the sand and say, by principle, I'm not a person who's going to borrow money. And there's a very clear intention there. What I find with folks who do borrow money is there's not a clear line. They don't say, you know, for me, $100,000 of debt, that's that's what I think is a fair amount of debt for me to carry. Right? There's no, it's just kind of like, well, if it's 50, if it's a hundred, if it was $12,000 on a card, there's no clear line. And we're challenging people to say, be intentional. Like if he had called in and said, you know what, I just like I like having $50,000. That's the way I like to do my life. I have $50,000 of debt. I would almost have more respect for that because you, at least you've made a clear choice. Yeah. But debt is sneaky and it does cause us to just kind of like go with the flow. And Dave says it, you know, you can wander into debt. And that's just what it is. You just wander in. Yep. But we're telling you don't wander out. Be so clear. Draw a line in the sand. I don't borrow money. Yeah. And Paul, listen to yourself. You wanted to have this debt paid off in some capacity, right? And you're using more debt to do it, which we don't agree with. But the idea you want it paid off just proves that you don't, you don't want it. You don't want it. You don't want it. And so listen to that. Like there's an inner voice in there that's saying, giving you a message of like, okay, I want this gone. I don't know how to get it gone. I just want to gone. And we're saying, Paul, you, you take care of it. Keep this asset debt free, the house. And you make some strategic decisions in your budget and with your margin, to pay it off. (upbeat music) If you or someone you love is dealing with a complex health issue, navigating the healthcare system can feel like a full-time job that you never signed up for. Several months ago, my family experienced multiple emergency healthcare situations, and little did we realize what kind of nightmare we were in for beyond the medical issues, dealing with different schedules and signatures from different providers, scheduling appointments, decoding all of the medical jargon, figuring out medical billing and the mountains of paperwork. 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Must be 18 or older. Advocates do not provide medical or legal advice. (upbeat music) (upbeat music) - All right, we have Matthew up next in Houston, Texas. Hi, Matthew, welcome to the show. - Hi, how are y'all? - Hi, we're doing great, how can we help? - Okay, so I feel like I'm running into what might feel like a common thing among younger people today, I'm not really sure, but making decent money, just looking like it's paycheck to paycheck. - Yeah. - And I assume it could be a budgeting thing and whatnot, but essentially I'm just walking through what we have here. So we have 35,000 in consumer debt. We spend $2,400 a month on a leased or a rented house. We have two car leases at 300 a month per car, which I'm sure you guys are gonna not like. You know, all of our main internet phone utilities groceries and maybe like $6.50 a month and insurance and whatnot. I make 92 five annual and my wife works as a nurse, PRN, about three to four times a month, which is about 450 maybe a shift. So I guess my question really is, is there any way we can kind of get out of this hole that's killing our ability to like invest in our kid's future and you know, have equity in almost anything, most notably at home and you know, what are your opinions on the best options for doing so? - Yeah, what's the 35 in debt? You said consumer debt. Is it, does that, that doesn't include the leased cars, right? So is it suited loans, credit cards? - Yeah, it does not. And it's actually a consolidation loan that we got to lower interest rate. So we were paying maybe like 24 or 25% and you know, I made a decision to, or I guess email wife made a decision to consolidate all that and to you know, one big chunk of debt and it kind of lowered our payment by like $300 a month. Do you have any help with the cashflow of it? - Okay, so that's just one large chunk. - Yeah. - So if I can for a second, the hard part about consolidating debt is you get, you might get the interest rate, but you lose the benefit of a debt snowball, you lose the benefit of being able to focus on something small and kind of check them off your list as you go and get feel that momentum. And the other part of that, and I just wanna say this, 'cause this is helping other people, Matthew, not just you, but those listening is, you know, the point is to pay as much as you can on the debt, not pay as little as you can on the debt. So that's just, that's a teaching moment for everybody, but I do wanna know with your 92,000 and with her nursing, what do you guys bring in every single month? - I think it's around gross, it's around 66, if she works three times a month. - And what would cause her to not work three times a month? Like what causes her schedule to be less solid? - Right, so we haven't done daycare or anything like that, so she's usually at home with the kids. We have two kids, two young kids, a toddler and an infant, and so she usually works on Fridays so they get a half day at home. - Got it. You know, sometimes she may not be able to work four times or three times 'cause we're traveling to her parents, stay on her inner city or something like that on the weekend, things like that. - Okay. All right, so yeah, I mean, what's going on here is basically what we would tell everybody, there's really two places that you can start. The first place you need to start is with a budget, right? I think that you have a sense of your numbers, but the way you were talking about them, doesn't make me feel like it's something that you guys are doing month to month that you're both all in on. - Yeah, because you should have close to four thousand, everything you just listed out, there should be four thousand dollars left. Now I know that didn't include food and a couple of other categories, right? But I think if you guys had a really solid budget and you will give you every dollar as our gift to you, to really be able to look line by line and say, what can we cut out? Because hopefully you could throw an extra two, for sure. Two thousand, 2,500 a month at this. And if she decides to pick up some extra work when she, where she can, that's just gravy on top. And you guys will just be slowly, you know, kind of chipping away at this 35,000. But my hope for you, Matthew, is that if you go all in, then that means you would even be working extra. You would be, you know, obviously helping cut the expenses, but like whatever, whatever more you can do, makes it go faster, right? So say you did three thousand a month. You guys will be done in 10, 11 months of this debt. - Right, okay. And I've played around with every dollar a little bit. Like it's more like, you know, obviously we don't have the premium one and I appreciate you guys for offering that. And I just, you know, when I start putting, I'd go, I'd backtrack a little bit and I'd just kind of put in numbers from previous months. And it just seems like the surplus just melts away. And then you know, that's probably not paying attention. - So as it would, if you are pulling in numbers from last month because you guys weren't on a budget last month, yeah. So you have to say, this is how much we want to throw. This is when we want to get out of debt, which means we have to throw this amount every single month, which means we have to find that every single month in the budget, which means we're going to be cutting things. - Yes. - We're not going out to eat, we're cutting subscription. Like we are cutting gym members to everything to get this one magical number every single month. That's going to be thrown into debt. And then in 10 months, Matthew, you can put some of that back in. You know what I mean? Like it's not like it's gone forever. But you guys have to have an aggressive change to see progress. It's just chipping away a little bit here. And like, okay, we'll cut that and maybe this-- - Yeah, you're just trying to avoid that. - And you just feel like, yeah, you're not making any traction. That's why we are pretty intense on the sacrifice side of getting out of debt so that you feel momentum happening. 'Cause if you don't, it just longates it and it's exhausting. - Well, yeah, it's like, it's like anything else. If you want to make progress in an area, you're going to feel the pain of that progress. Like if you lift weights. You can't just lift two and a half pounders. You're not gonna build anything. You gotta feel it. And so it's the same thing with this. I think Rachel is exactly right. So for instance, just to give you a real picture with kind of real numbers. If you look back, what is it August? So if you look back for July and say, what did we spend on groceries? And you found that you spent $1,200 on groceries. Well, then you then this month to side, we're only going to spend $950 on groceries. If you look back and you say, oh my gosh, we spent, you know-- - 600 bucks a day now. - Yes, this month, we're only spending $150. Like, hard, like, hard stop right there. So those are, and you are going to feel it. You're gonna feel like a child crying because you're not getting your way. Honestly, you will. And it's gonna be one of those things where like, you look at each other and it's like, oh my god, like this sucks. - Yes. - Truly, and one of you, I don't know who, 'cause I don't know your marriage. One of y'all is gonna be like Eve, trying to get the other one to do wrong. And one of you is gonna have to be strong. I'd be like, we said we're gonna do this. And it's gonna feel like that for a couple of months until you start seeing, not to mess up the analogy, but until you start seeing the fruit of what you're doing. And then when that happens, you're gonna go, okay, this is worth it. And it gets easier and a little bit easier every month. But if you guys do this, something really special happens, Rachel, I don't know if we talk about this enough. You're just gonna become people who, you do what you say you're gonna do. And there is such a trust there that's built between couples when it's like, we shake and agree on something. And then I actually see, like, he held up his side of the bargain. I held up my side of the bargain. And what that's gonna do for your marriage beyond just the money and the debt payoff, Israel. something Matthew and it's really worth you guys just going just tentos into this thing. Yeah and that you're both people that can the phrase is so overused these days but it's just true that can do hard things right like you're going to run into stuff that's not easy. We just had our parent teacher conference with our third grade class yesterday last night and they had this phrase and she talked about like the suffering that happens but it's good like they're gonna run into things we all do that it's like it doesn't come easy and it's frustrating and you just want the answer you just want the you know the quick way out and that's not how life works and so when you go through it together though in a marriage and you're like wow we can do that like we can do things that are really difficult there's a tolerance that's built up there that's just it's good for your marriage like there's something that is so unifying in that Matthew for you all instead of just kind of like placating this idea of money you're like no no no we're going to be people of intentionality yeah and you said at the beginning of the college I think it's awesome that you're doing it for a reason you're like we want to save for our kids future we want to be people that our kids have a better life than we did and and and that's a noble goal right absolutely so we really do believe in transformation Matthew and I think you guys can take what you've done do a 180 and say you know what we're gonna we're gonna crush this yeah and it may not be the popular thing in our neighborhood and and you sound like a smart guy Matthew very well spoken and so I think you know this stuff in your head it's just when it goes from there to your heart and you lock arms with your spouse and say okay we're in this together yeah and we didn't talk about those leases but go on ask Ramsay and ask him what would we say to do with those leases and it'll tell you exactly what to do yep and everyone you can download every dollar for free in the app store google play if you want to check it out if you're behind on your bills doing more of the same isn't going to fix it you need a different plan and that's why I tell people about guardian litigation group if you've missed payments if collectors are calling non stop or if you're getting letters about legal action that's your signal and it's where a lot of people wait too long because the longer you wait the fewer options you usually have and once it turns into a lawsuit things can get more expensive and more complicated fast guardian litigation is a law firm not a call center from day one you are assigned an attorney who represents you so if a creditor moves forward you're not caught off guard and you're not hit with surprise legal fees guardian litigation only gets paid when the debt is negotiated and the client accepts the settlement offer this is about stepping in early while you still have leverage don't ignore the problem take control of it go to guardian lit dot com slash Ramsey right now that's guardian l it dot com slash ramsey attorney advertising results may vary in no specific outcomes guaranteed up next we have Katie in green bay hi Katie welcome to the show hi there ladies how are you hi we're doing great how are you fantastic thanks um calling in today just my husband and I are in baby steps six and we're looking for advice about prioritizing cash flowing some major renovations on our home overpaying it off early um knowing that we intend to sell our home and relocate once our youngest graduates high school in about eight years we want to maximize that sale price okay um wait years as a wild you think you could do both you could do renovations and probably have it paid off in eight years i don't think that we'd be able to do both this is an old farmhouse it needs some major upgrades um that we not only want to be able to enjoy while we live here but to be able to make it competitive um lots of new construction new subdivisions that are kind of growing around us um so we will just kind of wondering if it would be wise just to prioritize those renovations knowing that we would definitely be able to get it out in the end what's the price tag like of all the things that you're wanting to do whether it's floors kitchen bathrooms roof whatever what's it all going to cost when you look at the whole whole scope of it um we've kind of done some budgeting and things you know trying to try to estimate some we can do a lot of this work ourselves we would hire contractors to do some of the majors the plumbing the electric electrical and things like that but a lot of the cosmetic things we are able and capable to do ourselves we've already done many projects here already um a pretty big it's it really be hard the way we've kind of done it so far is we i don't know let me stop you on that because you're telling me that if we do these projects it will keep us from having the margin to pay off the house early if you tell me that i'm looking at this going okay then this is a hefty price tag but then when i asked you you're kind of back back pedaling on it if you were to look at this not not even even the projects you're going to do yourself right there's still materials there's still things involved that you have to spend money on so if you i'm not i'm not scared so if you if you tell me the number we want to we want to help you work this out sure i guess um that is some research that we have been doing with each project so i definitely the kitchen definitely needs to be upgraded um both bathrooms the idea would be uh modest flooring throughout the whole home and then kind of just the curb appeal um and we're just trying to know that in order yeah and all that adds good value to resale everything you everything you said which is great so um price tag wise how much do you think all that's going to cost how yeah how many square feet is this house um it's just over three thousand okay so is it fair to say like this is like a like 40 for the kitchen 10 per bathroom and maybe another 10 to 15 for the floors is that fair um i would say that that would be a little bit of a yes a great estimate maybe running into some issues being that it's an old farmhouse you always run into those project issues so let's say a hundred seventy five to a hundred thousand and how much is very fair and how much is left on the house Katie to pay off we um we owe 250 to hold the current current value um let's just our our real estate agent current wealth assets is between um as it is currently is between five and six okay so this would definitely you would get you would i think you would get more than a hundred thousand for sure um price-wise right after these renovations added to add it to it so um and this is an eight year play is that did i hear that yeah that would be our eight year planning to at the very least downsides from this big home but our plan is to completely relocate out of state okay there's time it just depends on what you guys's income is what money you have saved so tell us a little bit about that um we have approximately between one and five thousand dollars in margin to be able to do this um each month okay our monthly net income is drastically variable we own a small business that is very seasonal um so our it does vary um but we have all let me see we've got all the like i said about upwards of five thousand dollars a month to do some of these these projects and things okay so i tend to veer on the side of Rachel how much is the mortgage payment by the way just your normal mortgage payment our normal mortgage payment is twelve hundred dollars that per month which falls below our twenty yes well below our monthly income so here's let me let me give you a little framework of how i view these things and i think Rachel will land the plane very nicely so when i think about big big expenditures um i run them through kind of a financially responsible adult checklist and these are the things that i must be doing in order to do set expenditure right number one you've got to be on a budget that's i've got to be living on a budget that's what i do that's a green check free i believe you're on a budget number two i've got to be out of debt and the thing that i want to do obviously can't cause me to go into debt green check on that number three i've got it be carrying the proper insurance says i have a will life insurance health insurance i've done all that nothing's pending there that's the next check the third thing and this is the big one and i'll go out of order so i said the big one for the end the the the fourth thing is i need to prioritize generosity if you're doing that consistently it does it's not going to cause me to stop prioritizing generosity green check now the fifth one and this is the one where i think you have a problem is i also have to be prioritizing saving and the way that we talk about saving around here is baby step three got to have three to six months of expenses baby step four i must be investing 15 percent it cannot cause me to stop investing 15 percent and the third one which is getting you i have to prioritize prioritize saving in my forced savings account which is my home i need to be putting some extra bit because this is the plan i said i'm following i need to be putting some extra bit on my mortgage because that's my forced savings account and so i actually think that you have the margin to do both it's just going to take you a little longer okay yeah but i would be okay with you guys cash flowing some renovations you know and slowing down a little bit on paying off the house in order to do that because if you if you guys save or you literally, it makes me always nervous doing renovations like month by month, from a money perspective, because stuff comes up that's a high dollar sometimes and you're like, oh crap. And then it kind of puts you backward. So I almost would take six months or so, a span of time. And I have like 30,000 like in the bank. And so we then we can press go and then continue to save on top of that. But you guys kind of all this done, Katie. I mean, I don't know from the renovation side, but from the money perspective at five, but I know it's not always five grand a month, but it could be anywhere from 18 to 24 months to be able to cashflow all of these. And maybe you start with the big, you know, you do the kitchen first. And then after that's done, you know, and if you do have to pause and save up a little bit more to do a bathroom, you just, when you do that, you are kind of living in a construction zone for about 18 months. So if you're okay with that, but I do think, I don't think I'm off base to say that that is gonna add value. That's putting equity back in, which is a great thing. You guys aren't doing a pool, even though I love a pool. You're not gonna get the money out of for that, right? So if that's what you were saying, I'd be like, if you wanted to, just know. But for me, this is even more of a plus because you're hitting the things that every homeowner looks at. Bathrooms, kitchens, floors, paint, and landscape. Like when you do that, you are adding value back to your home. But I do think like doing that in phases to Rachel's point, it's like, okay, we're gonna spend six months, we're gonna save up for one of the bathrooms or whatever your rate is. And then you take a moment and you're like, you know what, let's do an extra mortgage payment or two. And then you go back and go, okay, now this next span of time. So you're not stopping your progress on the baby steps. You're just spending span of time, spans of time on the things you want, but then you're jumping right back into it. And I think that's a fair way to do it. - Yeah, keeping it going throughout it too. - Yeah, that sounds like a great balance. That's kind of how we anticipated it stacking the cash and then having it so we can cash for individual projects as we go and then going from there always anticipating if they're gonna take longer and cost more than we can. - There you go, yeah, that's true. - And I do the reality. - That's good. - Rachel, this is probably your world more than it is mine. But I do think knowing that you're gonna want to move on from the house, but you also want to enjoy it. I feel like that's something you have to think about when you're making certain choices that you're not overrenovating, that you're not overly personalizing it. - That's right. - Knowing that you're gonna want to get out of it. - Yeah, some of the worst stuff is people take a garage and turn it into something else and it's no longer a garage, but a garage is such a big feature for selling a home or they take a bedroom and they knock out the wall and make it, you know what I mean? Like there are things that you're like, okay, that, just know, you can do it for you because you love it and that's what you want. But if your goal in the back of your mind is knowing you're out in eight years to your point, making a little bit more generic selections. - Yes. - And not the like crazy specific ones, even though I'm sure Katie, your taste is great. And you're in the farmhouse world where I think most Americans want to be. - Yeah. - If you want to free up margin in your budget, one of the first things you should do is take a hard look at your monthly bills because every dollar you overpay is another dollar you don't have for reaching your financial goals. And overpaying for your phone bill, well that makes zero sense. And it's why I recommend Boost Mobile. Their unlimited plan is just $25 a month forever. No contracts, no hidden fees, no surprise price hikes. If you already have a phone you love, you can keep it and keep your number when you switch. And if you're skeptical, Boost Mobile offers a 30-day money back guarantee so you can try it risk-free. Listen, your phone bill should fit your budget not the other way around. Reaching your financial goals is easier when you can pay less for the same service. Switching to Boost Mobile now is just a smart money move. Go to boostmobile.com/ramsy and make the switch today. That's boostmobile.com/ramsy. $25 forever requires customers to remain active on Boost Mobile and Limited Plan. (upbeat music) Welcome back to the Ramsy Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz, hosting this hour with Jade Warshaw and we are taking your calls at AAA8255-225. All right, we have Matthew and Providence Rhode Island up next. - Hey, how's it going? Thanks for taking the call. - Absolutely, how can we help? - So just give you a little backstory of what's going on. Me and my girlfriend, we had a daughter. She's not my fiance. So she moved in with me and she has a lot of credit card debt. $75,000 in credit card debt. So, and that was kind of, you know, she worked full time at night. I worked full time during the day. We get a lot of babysitting helps so we don't have to pay for babysitters. So that's nice. - Yeah. - Where does that come from? - That's a lot. - Yeah, sure is. Some of it was like, before I met her, she was working like 70 hours a week. So she was working during the day and then at night. And then so she's kind of, I think used to a lifestyle that, you know, and then started working half those hours and, you know. - Oh, I see. - And so that calls the credit card debt. - Okay. - Yeah, and then obviously she got pregnant and her job kind of closed down for a while, you know, doing renovations. And then I just think it snowballed. I didn't realize she was putting like, formula, diapers and stuff on a credit card. Like because we were, we were moving in together but we weren't like, we're not like integrated to get, you know what I mean? Like I wasn't sure exactly how she was doing and I knew she was working, but I didn't know. - How bad it was. - Yeah, okay. So. - Yeah, yeah, exactly. - So you got 75,000 credit card debt or she does. What other debt do you guys have? - I have, well, I have no credit card debt. We both have 13,000 left on our cars. - Individually or together? - Individually, she has 13 on hers, I've 13 on mine. - Okay, okay. - Yep, yep. So, yeah, so basically that's kind of been like in the background and, well, you know, she had a baby, she was a full-time student. - You are saying she had a baby though, right? - Well, we, of course, we have a baby. I mean, you know. You're not really taking care of it. - Yeah, you're not really taking care of it. So it feels like she's taking care of everything, right? - No, no, no, absolutely not. No, no, no, no, no. I pay for, so let me get to the rest of it and then it'll make more sense. - Please help us out. - So I'm getting there, I promise. - Okay. - Okay. - Yeah, so what point is she was in the middle of like finishing her degree when we met. So she was, you know, full-time student, full-time, well, you know, mom, I mean, we split duties, but still it's a lot, you know. And then full-time employee. So, you know, it was just a lot all at once. - Yep. So. - How old's a baby now? - So she's 18 months. - Okay, 18 months. So you guys have started to get a little bit of a rhythm, a little bit of a flow going on and you're looking up saying, hey, this, this debt, this is the problem we need to start solutioning that. Can I ask one question? I just want to make it. - Yeah. - Yeah. - Is this your fiance or your girlfriend? - She's my fiance now, yeah. - She is your fiance. - And we just got engaged. Yeah, we got engaged you in 30. - When do you all get married? When's the wedding? What date? - Well, we're still kind of unsure about that. Next year, sometimes we can have a small. - Matthew, you know your base, you're basically married. You guys lift together, you have a baby together? - Yes. - Oh, what is, I know, this is, yeah. - What's the purpose of waiting? - Is the question. What's, oh, oh, well, we want to do a church wedding. You know, we're Catholic. We want to do a church wedding. So, well, I'm Catholic. - Wait a minute. - When it takes 18 months to get a church wedding? - No, I guess not. But just, just like I said. - Matthew, we need a little urgency. We need a little urgency in life. We want this debt paid off. We need to get together. We need to make this official. We need to, like. - But you can't roll the Catholic thing back in when it matters on getting married, but it didn't matter before. (laughing) - This is unfair, 'cause this is how I'm bad, and this is not how I think. - We're on your side, we're on your side. We truly truly are. - She's totally on board with the timeline. I know, I find it good when people yell at me all. - What if you did this? - It would yell at me all the time, 'cause I say, like, I'm watching my daughter, and they're like, "You're not watching your daughter, "it's your, you know, I'm like. " - I know, semantics. - Yeah, yeah, yeah, yeah, yeah, yeah. - But it is not semantics when we're gonna talk about your money, because the way Jaden and I are gonna answer it is that it is gonna be separate. There is no combining right now, because you don't have any legal protection. She doesn't have legal protection financially, neither do you, you don't, until you guys are legally married. - I know. - So our advice is gonna. - I know what that looks like. - It's gonna be different though, Matthew. I know, but here we say, what we're about to walk through is going to look different, because you don't have a wedding date set. And I'm not trying to box you, put you in a box, Matthew, 'cause I like you, you're fun, but this whole semantics thing is real. - And you may call in two years and be like, I don't know, you know, this happened and this, so until you guys are married, you would give you one set, a plan one way, and then there's gonna be another plan until you're married. So here's what we would say, because. - Well, that's another piece I guess I haven't really thought about yet, like I trust her fully, and I know like, and that's the thing. not quite married yet, but I understand, you know, with her being my fiance, that's why we're kind of, you know, really trying to deal with this, just the emotional stress that she's carrying from this. Like, well, so, let us give you a solution. Let us give you a solution because all that you're saying, the emotional stress, the dollars, the all of this stuff, I think Rachel and I, there's two routes here. I want to simplify it for you because it feels like a lot floating around your head. There's two routes. The one route is you can say, we're not married yet. Therefore, everything is separate. Ah, this is my baby. I, I am devoted to my child, but financially, our lives are separate. That means her debt is her debt. And my debt, that means your only debt is a $13,000 car and you're paying it off and we can give you the set of steps to make that happen and give you financial piece. The other choice, which I actually feel is a better choice for you if you do say this is the woman you want to marry is you can go to the courthouse, you can fill out the piece of paper and be married on paper so that you can legally combine and work together. And then later on, when you can afford to have a party and do the church wedding and things like that, you're doing that as a, just as a, you know, a show and a party for your friends. Yeah, I guess, I guess I just don't know, I guess I just don't quite know the others. I don't know the difference as far as like what the benefit to, you know, as far as financially being married versus not. So that, that you, I'll, I'll paint you as the, it would be the, the quote unquote, victim, right? Yeah. If this happens is that you take your income, you throw, you know, $80,000 over the next 18 months at this credit card debt and then she looks up and she's like, listen, I don't want to do this. I'm taking the baby and we'll figure out custody later, but we're done. You have no legal protection. But she don't know. Listen to our show. The craziest stuff happens on the show that people call it, and I know you think that I listened to you guys. I know you're the exception to the role, Matthew. You are special. I know. I know. Yeah. Well, maybe a little, but no, not really, but, yeah. No, but, well, well, think about it this way. I think about it from a perspective of like faith, you know, I just have faith that like, I'm, I'm kind of, what do you want to do? Maybe you're right. Maybe you're right. Maybe you're right. Maybe you're the woman who's husband has a gambling addiction and talk about faith. Yep. I mean, we all do. I love Jesus. We got some faith, but we're also going to be smart. Yeah. We're going to be smart. And, and there's no legal protection, Matthew. And so keeping it separate. But I think what Jade is saying, combining everything is the best thing for you guys. And you're basically married, Matthew. You're basically married. Just go do it. Go do it. One of the biggest mistakes home buyers make is talking to a realtor and shopping for houses before understanding their real budget. And that's how you end up falling in love. With a house you can't afford and trapping yourself in a bigger payment than you can handle. That's why you should talk to Churchill mortgage first. Churchill shows you what you can actually afford, not just what a bank will approve. And with their certified home buyer program, your financing is completely secured before you shop. So you won't miss out on your dream home while you're waiting for pre-approval. I've recommended Churchill for 30 years, because they help you buy a home the Ramsey way. So here's your plan. Contact Churchill. Know your numbers. And then when you find the perfect house, you're ready. Go to ChurchillMortgage.com/ramseyoffer for a special offer only for Ramsey fans. That's ChurchillMortgage.com/ramseyoffer or click the link in the description. Our question of the day is brought to you by Why Refi. Missed private student loan payments can leave you feeling like your financial goals are on hold. Why Refi helps borrowers explore low fixed rate refinancing options that fits your budget so you can move forward with a plan. Visit whyrefi.com/ramsey. May not be available in all states. All right. Today's question comes from Sierra in Georgia. She says, "In the past year, I've had a few occasions when I feel like my friends are expecting me to spend money on vacation or going out when it doesn't align with my budget. I'm on baby Step 6 paying off the house. So it's not that I never vacation or go out, but I can tell they are confused when I explain that something isn't in my budget. How do I politely say that without hurting their feelings while keeping the door open to spending time together at another time?" Here's the thing. The idea of it hurting their feelings, I think, is where I am a little bit confused because if somebody says to me, "Oh, let's go to such-and-such restaurant," and they go, "Actually, that's too steep for me. My feelings aren't hurt. Usually I would be the one who feels a little bit like, "Oh, yes, no worries." You know what I mean? I wonder if their feelings are hurt or if you're just interpreting their reaction in a way that's projecting something else. Yes. Then I think the simple answer to the question, honestly, Rachel, is to not really care that much what people think and just to say, because if you're saying what I think you're saying, which is, "I can't spend that this month," or "That's a little too expensive for me," or "That's just not in my budget this month." I think those are perfectly fine responses. I don't think you have to necessarily go into detail of the why behind why you can't go. Especially if it's something that is just more of a lifestyle difference because sometimes you may be on baby step six and it's like, "Oh, you're on baby step six. There's no debt. You can still go out and have a good time." And that's all true. But if your friend group isn't a completely different income level than you, and they're wanting to do things that your income just doesn't afford you to be able to do as regularly as they do, I think that's totally fair. And even if that's the case, if they're good enough friends, I would just say that. I'd be like, "Listen, I don't have it. You and Bob have it. You and Bob are in the high six figures. I'm right here. So thank you for inviting me, but I can't do that as often as you can. And I have buddies that I would 100% say that too." Yeah. And I have friends that have crazy work hours. And so there'll be times that we're all getting together and doing something. And I'm sure she's always keep asking me. There will be a day I can. So I think that's even okay to say. It's like, "Hey, I can't right now, but ask me again." But continue to keep me looped in. Yes. This isn't a rejection or a no to our friendship. I just financially literally cannot do this. But let me know next time because I would love to hopefully join in. Right? Yeah, absolutely. And if the only time you hang out with your friends is on vacation and going out and spending a bunch of money, some expensive friends. Right. Right. Right. There's so much that you can have of just not going. Yeah. I mean, like, I don't know. I feel like half of our hangouts are in our homes in our guards, you know what I mean? So hopefully the friendships are built and you have more quality time with them outside of just going out and vacation. But that's true. I hope that helps Sierra. That is, it is tough. It is tough when you, yeah, either it's, they're choosing to live a life beyond their means and you're choosing not to and or you're exactly right. Or they just make a different income. Yeah. That's true. And there's a reality there. And so kind of facing the music sometimes with this stuff. It's not fun. But it leaves you maybe with a little bit of like, uh, angst, but I think you would have way more angst and chaos. If you just said, you know what, forget it. I want to do what I want to do, spend what I want to spend regardless of what I make. Yeah. That's going to cause a problem. More harm on the other side. Well, I do want to attack it from the other side real quick too because I do find that some of us baby steppers get a little too intense on baby step six. True. And we keep our foot on the gas from baby step two. And it's like, we want to keep that same intensity. And we, I would say, actually, if that's you, Sierra, you do, you need to enjoy your life and you need to go out and have fun. And I understand if you're like, I got to pay this house off. But you do, you got to live life too. Like this process is designed. It's the seven baby steps is designed for a certain purpose. And the truth is after you get past baby step three, you do get to move from intensity to intentional and a lot of us forget to make that transition. And it's so important. That's a great point. Yeah. Don't be crazy, girl. Have some fun if you're not having fun. All right. Let's go to Jack in Atlanta, Georgia. Hi, Jack. Welcome to the show. Oh, thank you so much for taking my call. Absolutely. How can we help? I just need affirmation that my idea for retirement is not crazy. And I want to sell my house, invest the money, and actually just go ahead and rent the rest of my life. I mean, I'm about to turn 62, about to collect the social security. And I just am I crazy? Why are you wanting to do that? Because you're worried because you don't have enough in actual investment dollars in the stock market. actually the opposite. I have no debt. I actually have worked out where I have money in like little buckets everywhere to where I should be able to bring in between 10 and 12,000 a month. That including the money I would get from my house which is paid for and get into a secure investment bringing in about 2000 a month. And all that would give me total of about 2.25 million dollars in other investments a lot in the stock market that I really don't have to touch and I can continue to let grow. But I also don't have that, you know, the house or not house payments but the escrow, the upkeep of it and the things of that nature where maybe my wife and I can just travel and kind of like what you're saying a minute ago about just enjoy life. So it almost and it almost sounds like you're more interested in downsizing and having something that requires less attachment like maybe like a town home or something where you're not in charge of the upkeep that you can kind of travel and you're not worried about the property itself because the truth is and we'll get into this a little bit more. But having a personal residence is a big piece of of security on down the line for a couple of reasons. Obviously, we know it's a major portion of people's portfolio when they're building wealth as a baby steps millionaire. But the second part of it is you're keeping what for most people is the biggest line item on your budget. You're keeping it stable because rent is going to continue to go up and up and up, Jack. And there's part of you that wants to have that stability of saying but my mortgage wants it's paid off. It's just that I know what the taxes are. I know what the, you know, the insurance are. And so that's the piece of it that would make me go, I would love for you to own something that's yours that can remain stable. Okay. Because over the course of time, Jack, even if you were just pulling out what your investments were making and not touching the principle, but you just kind of like basically took out the growth of 12,000 a month, that when you think about it in 20 years, which you easily could be alive, rent, oh my gosh, would be who knows how much right in 20 years of the type of living situation you want to be in. And so for me, that is such a question mark. And it's such a big deal and you guys aren't maybe not going to want to travel when you're AB2. You maybe really do want to settle down and have consistency somewhere. And then trying to get into the market in 20 years and where houses prices are going to be. And if the investments don't grow at the rate, you think they're going to grow. There's just, there's a lot of risks to me. So I do wonder if you sold your house, Jack, how much would you sell it for? A little under 600 is what my, the comps would be my neighbors have recently sold theirs. Okay. Yeah, I just wonder if you took half of that and bought something small, right? Just to have that's yours to come back to and that you always know is there. And when you guys don't want to be traveling and moving and everything, there's just that there's a place. So that's probably what I would do. Some people are going, they are kind of taking this trend of just renting, and for that. And in some cases I, I could understand, but I think even even, I mean, 2.2 millions amazing. Yeah. But even with that over the course of, of 20, 30 years, yeah, I don't think I would trust the, I don't know, I don't like it. Yeah, I think there's a time where you want to put down to own something, even if it's a condo to have some foot in real estate that's yours that you do now in the present. And then yeah, that, so that's what I would do, Jack. If I woke up in your shoes, I would still have something. But again, maybe it's a significantly less valued property than you have now and you invest the difference. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too much time chasing information instead of making decisions. That's why we got Netsuite. Netsuite brings your financials, inventory, CRM, and more together in one place. More than 44,000 businesses run on Netsuite including Ramsey. And now they're taking the next step with Netsuite next, making it easier to put AI to work across your entire business. Netsuite next helps you make the most of your time, automating routine work like forecasting demand and following up on overdue accounts. With Netsuite next, AI is built into everything you do. So you can ask it questions just like when you're talking to a member of your team. And right now, you can try Netsuite next for free. If your revenue is at least seven figures, go to Netsuite.ai/ramsey. That's Netsuite.ai/ramsey. We wish we could get to every calling question here on the show. But if you do have a money question, head over to our website and use Ask Ramsey. So this is our new free AI tool and it's built on trained and proven Ramsey principles. So all of the articles and the shows and so much of the content that we put out on a daily basis out of here is all within that engine. So when you're asking it, it's basically like you're asking us here on the show. Yep, so make sure to check it out. Ask your question today at ramseysolutions.com or click the link in the description if you're listening on podcast or YouTube. All right, let's go to Micah in Little Rock, Arkansas. Hi Micah. Welcome to the show. Hey, how's it going? I appreciate you taking my call. Absolutely. How can we help? So I am about to turn 25 and I have lived paycheck to paycheck for as long as I've been an adult out of my office. It's like 19. I don't have a ton in debt, but I don't want any. Obviously, I zero the ideal number. Without with my truck, I have it's like 44,000 total in debt without that is like eight to most of it is a vehicle. I am a firefighter in a group right around Little Rock area and I met probably about 3,200 a month from that job and then I have a very small sometimes unadventful little side gig as I do some power washing. So that's unpredictable. I've had months where it's 1,500 bucks, you know, on the side or month where it's a few hundred. So that's really hard to I try not to put that too much on the budget because it's unreliable, but basically my question is just I feel like I'm so close to being in a good financial spot with a girl we're not engaged, but every plan to be and to be married and I'm wanting to make sure that before I do all that and you know, I want to make sure that I'm in the best financial spot. Personally, then I'm not carrying any of this into marriage, you know, about a year down the road. Yeah. Well, from just a debt income ratio perspective, the truck is pretty glaring. Like a it's a big it's a large. It's how it's how much a month? It's 609. 609, so what you said? Yeah. Yep. Yeah. So that's that's your ticket out. I mean, I'm going to say it, but I'm like, man, for you, a thousand bucks difference and I know it's 609, but if you if you got on a tight budget and found foreign works, it's a thousand bucks extra a month. It's just there. So for me, I'm like, I, I don't know, I probably I'm selling the truck. I certainly would. I thought of that. And I'm not opposed to it. Like I do like the truck, but I'm smart enough to know that, you know, this is a very small price to pay for setting myself up for, you know, being a financial aid. Yeah. Because here's the numbers. I just ran them real quick, Micah. You're 25. Let's say you retire at 67 and you just invested that truck payment every month. Okay. So instead of having a truck payment, let's just pretend you just invested that. So you paid yourself at 67. You'd have $6.5 million at retirement, just by doing that. Not that much. Just some change. Just some 6.5 million change. But that's like, but that painful opportunity cost to pay just for a truck. Yeah. Like that's the wildness of how normalized debt is paying someone else versus paying yourself cost you $6.5 million. Unbelievable. One decision, Micah. That one decision that changes your whole life. Yeah. Well, here's the tricky thing about it. So I've had this truck for maybe six months and probably a little less than that. I drove a little Hyundai accent, a little good gas car. It was like $420 a month, which is I think pretty average. It's still sucks. But for that kind of car, it seemed to be what was average. But I sold that. I still owed on it, even with what they gave me. It was about $3,000 negative equity. And they put that on this loan. Yeah. So you're upside down. Still So it's only 3,000, right? 3,000? Yeah. You could get that. You could get your hands on that. Yeah. Hopefully. I mean, with the power watch. And you never know. There's some jobs. I mean, that could be-- Well, then you need to-- You're waiting tables the other night. I mean, like-- Yeah, pick a different side hustle. That's solid. Yeah. That's what I've been doing. It's looking around and applying to places. Because it needs something consistent. Yeah, power watch. When it's good, it's good. But when it's not, there's nothing to do. Exactly. You need to have a couple of side hustles in your-- Quiver that you can pull from whenever you need one. And I think if you do that, you're going to be out of this in no time. Because you just need $3,000, right? I mean, if you look around your apartment, maybe there's something you can sell to start to get the first 1,000, right? So really try to go very quickly into doing these. Because this is $609 on the line here. And then after that, how much did you say the other debt was the credit cards, I think you said? Credit cards is the next biggest one. It's like $4,400 on two credit cards. One is $3,500 limit that's maxed out. And the other one is whatever the remainder of that. So $500 on that. So what's wild is if you could find-- gosh, I mean, 1,000 a month, let's just say. And between this credit card debt and all of that, I mean, that's 9, 10 months. You'd be out of this stuff. And that's just $1,000, Michael. If you went and said, what if I did 2,000, right? You cut that timeline in half. And that's what the identity change for you is. You're a guy right now that's kind of normal. You got a nice truck. You got some credit card debt. You're making some side-- but you just feel like, gosh, even with the sidehouse, I'm living paycheck to paycheck. That's a pretty normal profile of people. But when you change what you've been doing and you say, I'm not a person of debt. Even on cars, nothing is normalized. I'm not doing it. I'm not going into debt. I'm going to pay myself and instead of paying banks for the rest of my life, I'm a person that has money saved on the side. And I'm a person that budgets, and that I know where my money's going, and I'm intentional with every single dollar. If you're bringing in $6,700 a month, you know where every dollar is going. And I guarantee you, after living a life like that for about 18, 24 months, oh, yeah. You will create such stability and peace and discipline in your life where money no longer is an issue because you've tackled it. You're the one that's controlling it. It's not controlling you anymore. But it has to-- there has to be kind of this-- not laxidazle mindset. Do you know what I mean? There's a level of intensity of change that has to happen for you to get out of the orbit of normal. Yeah. Not to mention, your lovely lady is going to take note of this and go, wow, this guy's got his life together. Yes. He looks like he knows how to handle his business, you know? Yeah, and the great thing is that we're not married. Of course, that's the intention down the road a little bit. But we are both sitting down and going over each other's separate budgets together and just kind of airing stuff out and then making sure that we're both on the same track of, you know, we're saving up to go low. This is probably two years down the road. So we're trying to get a jump on it. That we can't be super aggressive in the saving right to second, but the plan is, you know, we're both on the same track trying to make sure we're getting our money right and saving up and doing all this stuff. So I definitely want to put myself in the best scenario. And yeah, I guess saving that up, getting out of being upside down the truck and selling it. I mean, it's not that attached to it. It's nice, but I'd much rather just be-- I mean, you make around 70,000 and you have a $44,000 truck. So it's too much, even with the negative equity. Like, I don't care. That's just too much debt to have on a truck because of even your income. So I would, yep, I'd for sure. I'm going to upload a little more than I could do with this. Yeah, no, that's OK. But you know, just know that the faster you go on this, when people have a debt-free journey in front of them, the faster you go, which means the deeper the sacrifice allows you to go faster, the more likely you are to see it through till the end. If you just, you know, kind of wander through it and I'll do a little bit here, but I don't want it to be-- you're more likely to just get comfortable with status quo. And it's like, you want to finish this. You've said that-- and I think you have a really nice why, which is that relationship that's sitting there in front of you. And so really just lean into that. And to Rachel's point, what do you want your life to feel like? What do you want those first months of your marriage to feel like? What do you want? My husband, do you want to be a time man? Do you want to be? I mean, there's a lot there. Yes, there is. Well, thanks, Micah, for the call. Again, the number is 825-225. Give us your call about your life and your money. [MUSIC PLAYING] [MUSIC PLAYING] If you're serious about building a business, you need an easy way for customers to buy from you. Yeah, that sounds obvious. But a lot of business owners leave money on the table, not because their product isn't good, but because the buying experience is broken or complicated. Shopify fixes that. With Shopify, you can build a professional storefront and get it in front of your customers fast. No coding, no technical headaches. And when your customers are ready to buy, Shopify's purple shop pay button is one of the best converting checkouts in the world, which means fewer abandoned carts and more sales. And if you hit a snag sidekick, Shopify's built-in AI system is there to answer questions and keep you moving. You've got enough to think about just running your business. The last thing you need is to lose sales because the buying experience lets you down. All you need is the idea. Shopify handles the rest. Start your free trial at shopify.com/ramsy. That's shopify.com/ramsy. Shopify.com/ramsy. [MUSIC PLAYING] Up next, we have Rachel in San Francisco. Hi, Rachel. Welcome to the show. Hi, Rachel and Jade. I'm so excited to talk to you. Thanks for taking part call. Absolutely. How can we help? My husband and I have been married for 11 years. And we are in baby step two. We started at $152,800 in debt about a year and 1/2 ago. Since then, we sold a car. I got a new job and moved into our RV. So I can put as much money as possible towards the debt. And we are down to $18,800. Wow. Good. Nice. You're all good job. That's amazing. Thank you so much. Yeah, we're on a 6% APR key lock. That's our last piece that we're paying off. And my new company restricted stock units just released. And they're worth $18,200. Oh my God. Perfect. But the stock has down 100% from last year. So I'm hesitating, selling. I know you guys must tell me to sell it. I just needed to call in and make sure what-- What kind of industry is the company in? Tech. OK. So a little volatile, I guess, is it the industry, the type of tech that you're in, or is it the specific company that you're like, eh? It's the type of tech that I'm in is volatile. And the whole industry is down right now. OK. Yeah, I asked Ramsay. And somehow got to a potentially phased exit strategy. But I don't know that that's what David recommends. Yeah, pulling some out as you kind of a little bit at a time and see every six months of something changes. Yeah, it wouldn't be a bad plan, necessarily. But I feel like trying to time the market is never good, because what sucks Rachel's and Mike Golly in five months, it could be down another 100% or up 100%. Either way, you're like kicking yourself. So it's like, oh my gosh. What's your amount of margin that you're throwing at the debt every single month? About $8,000. OK. Oh, so you guys would be out in two and a half months. Yeah, we're so close. Oh, OK. It-- I wouldn't do single stocks anyways. So I'm like, there's still a piece where I'd be like, yeah, get rid of them. Because this is exactly the reason. It's because it's one single piece of-- it's one single thing. And your whole world is rising and falling by that one company. Yes. So I probably-- I would probably just cash out, Rachel, honestly, even though it hurts that it's down. But I think trying to time something in a volatile industry is just like there's no one has-- you know-- has to know as one. And I guess if you do know You'll go to jail a few inside or training if you like no, it's happening. Oh gosh, but no, so I yeah I probably would just sell I would keep that momentum of you know six seven grand a month that you're throwing at this debt or did you say 8,000? 8,000 yeah, and I'd take it as a gift pay off your debt and then build up a great emergency fund and then man You guys are just yeah, you're way ahead of the game and that so I think that's just what I would do. I would just see it as an 18,000 dollar gift and agree call it a day. Yeah, okay, thank you. Yeah, the 6% HELOC really just it's such a low APR it's hard to let you it go. Yeah, but you would have let it go anyways and You would have just two months, three miles, yeah, yeah, okay, that's the kick I needed. I think yes, I know and and with your 8,000 Think about it like this with your 8,000 margin. You would have the money that that stock lost in two months. That's right. Yeah, I mean like you guys are doing Yeah, 100 really well. That's a good point 100% of 18,000 is 18 like yeah, you're gonna get that back with the work ethic you Guys have changing your life Rachel is not going to be the stock as you guys now if it was a hundred and 18,000 right? That's a yeah, but it's 18,000 and you and again, you can make that in two to three months. It was just the margin you guys have so I don't Think it's that big of a deal. Yeah, I would agree with that 18,000's a gift. It's great, but I don't think it's a it's not going to be the Thing that makes your breaks you guys because you guys have already done so much already, which is just insane. So well done. We're so proud of You Rachel for real like that is that's wild really really well. How much how well you guys have done. All right, let's go to Dan in Philadelphia. Hi, Dan. Welcome to the show. Hey, how's it going? How are you? Good. Awesome. How can we help today? So this is my situation. I'm 33. I'm single. I have pretty much always like paycheck to paycheck my entire like adult life. And I'm just kind of over it at this point. So I have 9,000 in a car. I have 53,000 in student loans. And I have 15,000 in a legal case that I am paying. So I bring home about 4,400 a month right now. And just the area that I'm in, I've cut so much out of my life. Like I've gotten rid of like all my subscription. Like we're we're doing like the all these shops. Like we're doing everything possible to cut everything out. But the area that I'm in is just so expensive. Where are you crazy? Oh, Philadelphia. So I'm in I'm in like the Philadelphia area, but I'm really in like South New Jersey. What's keeping you there? And I like I have friends here and like my family's here. But aside from that, like I have friends in other cities. Do they earn what you earn? Your friends and family? Do they have? Do they earn around 4,400 dollars a month, living in that area? Yeah. And like and I like I work a remote job. Like I work in hospitality doing revenue management. So I can go wherever I want. So you don't need to be on the struggle bus of living in an expensive area on 4,400 a month. Yeah. Like if it's just crazy to like, I mean, like the majority of the people that I know are here. Is it crazy to like uproot my life and go somewhere? No, it's not because you it's a pretty simple equation and I'm not going to say that it's easy to do, but it's a simple equation here. You've got to find ways to either bring more money in or to reduce the amount that's going out. And for you, you've reduced the amount going out already as much as you can. Exactly. So now we have to focus on other things. And for you, I mean, how much is your rent? I think 1690 for a one bedroom. Okay. That's that's a lot for a one bedroom for you with no. Like I have I have friends in San Antonio. I have friends in Columbus. Like I'm looking at rent there. And it's like a thousand bucks. Yeah. That's a big deal. Get an extra 600 bucks a month. I mean, Dan, that's we laugh about the exit of South of California, but a lot of people do it because of taxes and how expensive it is. They can't own a home. Right. They're just like we can't. And just what it feels like. And so there are places that you just say I cannot afford to live in this city with the income I'm making. And yeah. And that's a that's a very real adult decision. Now, is it do you have to do that? No, you could do what you're doing. It's just you're not going to financially thrive because you're in an expensive city. But if you say, yeah, but that's okay for for the time being because of friends and family, then that's a choice you make, right? It's a you don't get both. Yeah, or you say, Hey, for maybe the next two to three years, I want to live somewhere else. See how I feel with this margin and actually not that money brings happiness, but the fact that you can pay your bills and free and enjoy life. Like sometimes that's worth it to find a a cost of living a city with the cost of living that's lower than what you're experiencing right now. Yeah, now the type of work you're doing is that are you are you kind of have you hit a ceiling with that or are there other opportunities in that area that can expand your income. No, there's there's definitely more opportunities. So I used to work in hospitality, management, like on property and recently moved into this role. Okay, I work like balance. It's nice. But so I'm new to this like niche part of the field, but there are plenty of other opportunities as I continue to grow and develop my own skills. So that's another place that you can look. You know, you mentioned it sounds like you maybe took a bit of a pay cut to have a better work life balance. But again, that was a trade off you made. And so maybe that's a trade off that you make back and you work on site for a while, even though you have to go in office and even though you write there's these things that aren't as convenient for you. But it might be worth it for you to knock out this debt. If you were able to find work in San Antonio, that's on site, lower cost of living, make your earning more right suddenly your whole world opens up. And it's not to say that you have to do that forever, but certainly do it in the time it's going to take you to pay off your debt. Yeah, for a couple of years and there's a lot of options of that brings me to that free and you have margin in your life. Yeah, there's a lot, there's a lot more options that suddenly open up that actually could bring you some peace. Hey, this is Dr. John Deloney. 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That's 30% off exclusively at Helix sleep dot com slash Ramsey with Helix better sleep starts right now. Welcome back to the Ramsey show in the Fairwinds Credit Union studio. I am Rachel Cruz with Jade Worshaw. We are answering your questions at AAA 825 225. All right, let's go to Lindsay and Chicago Illinois. Hi, Lindsay. Welcome to the show. Hi guys, how are you? How can we help? Good. So my husband and I of 14 years did all the way up to step seven. Um, he didn't decided that he wanted to divorce. So my question is, how do I rebuild financial security alone? With a fraction of what I wouldn't say at home on for 14 years. So it's like a baby deer out here in the real world for me right now. How can I get back to a place of comfortability and financial freedom because I have to get into debt since he filed for divorce. And I'm having just lost right now. So I'm just looking for something inside and some direction on where to go from here. Okay, I'm so sorry. Any kids? We have four kids. Okay, and are they shared? Are they with you? They are primarily with me. They see him occasionally last year. He pulled in about $236,000. We have paid off over $100,000 worth of debt together and had about almost $75,000 in the bank when he filed for divorce. I got none of that. Um, what did you get? Yeah, what did you get? I walked away with nothing. How the divorce is still the divorce is still going through hasn't been finalized because he's fighting me for full custody. Why did you get me anything at all? They just won't order him. to pay me anything. Why? Who want the court system I've continuously asked for what is your attorney say in maintenance? I don't have an attorney. Where is the problem? Lindsay, you need to get an attorney. I don't know the divorce law in in Illinois but majority of states you have protection of assets. Right. Right. Yeah. I just honestly I can't afford it. I make $3,300 a month. I have to ask my dad, my mom, for help most months with things. And do your dad and mom help when you ask for it? Are they willing to help? Yeah. Yeah. Okay. So if you said to them, mom and dad, I got to get a lawyer because I'm about to walk out of a 14 year marriage with zero. Nobody in your life should say that that's a good idea. Have you signed anything, Lindsay? No, no, no, I haven't. They have like, they have like an extra $100 a month. It's not, they're not wealthy people at all whatsoever. Tell us it's not like I can call them and say I need, you know, $500. What about the home? Tell us about the home you lived in. Did he get the house too? He, oh gosh. Okay. We lived in an RV for seven years to pay off debt and do all the hard things. And then as soon as we were debt free and it looked like life was going to kind of be what we had been dreaming about. That's when he decided that he wanted to start a new family to someone else. And we did not have a home. We didn't have a full other assets per state, just money in the home. Just the 75,000. No retirement. Does he have a 401k? He does. Yes. What I will be going after we haven't even got to the mediation part. Like he, you're saying we, who's we? Um, but like him and I like, okay. He refuses to. So you haven't even been to mediation. What caused you to think that you weren't getting anything? Well, I mean, just like up to this point. I'm not. I'm not sure. Okay. I feel like shaking out how to survive in the meantime. Okay. Okay. That's what I know. Okay. I will get some. Yes. Okay. That's a different story. No, that's good. That's that's hopeful. That's hopeful. I thought that for some reason. Yeah. You close this up and just walked away with nothing. But you still need a lawyer. You, you, you, we need a figure and you can pay those fees when it's all done. But I would find, yes, for the sake of your children too, because you're going to want to fight, fight this to make sure that he does not get full custody. If that's what he's wanting. Um, so, so in the meantime, what kind of worker are you doing to bring in the 3300 a month? Um, so I am a cake. I door dash with my kids. I work at home job so that everything I do, I can do with the kids because I have them. Okay. Um, how old are your young guys? Seven. Seven. Okay. Are they in school? Well, they'll be starting schools back. They are, they just started school. Okay. That's a good thing. And how old's the oldest? Yeah. Uh, 14. Okay. Okay. Okay. So I think from, um, the work hours perspective, um, finding something that is, I would look for something stable with good benefits, um, for insurance purposes, um, you know, all of that. And I'm just thinking out loud. I mean, anything from work from home, if you're able to, um, even a receptionist job at a dentist office, you know what do you mean? Like any type of lines with the kid's schedule? Yes. Um, and it's there's a friend of what I do from now on a medical clinician. Okay. I, yeah. And I work about, um, 12 to 13 hours a day, I mean, depending on like what job I'm doing. Um, so how are you on the, what are you making then? How are you bringing in how many 3300? Well, my main job, um, is I only make $15, $16 an hour. Okay. And then my other ones, I really depend on like the cake decorating is people take orders. Yep. Um, and uh, Dordash is another one that I, so we've got a, um, kid home for an hour, baby fat by my oldest, but I try not to do that with them and then taking them Dordashing pass a certain hour just really isn't safe. And so there's a lot of, um, I think that I think the finding your core job, I think we've got to start brainstorming on what we can do that can get you a higher pay than 15 an hour. If there's something out there with your background, with your skill set, uh, one thing we can send you is King Coleman's find the work you're wired to do. And I think that can start generating some ideas of what might be out there with your education with your skill with your prior work experience. Um, because that's going to be a big part of this, but yeah. And again, Lindsay, I, I, I, I hang my hat on you. You building the second chapter of your life out of a horrific heartache. It's, it's terrible. I'm so sorry. I mean, it is, I, oh, it's just horrible, horrible. So you are what it's going to be to change your life. But also, Lindsay, him making $236,000 a year, him paying child support, some alimony, like all of that is a very real thing because what you did in that household for 14 years to keep you guys afloat does have value. Yes. And states honor that to a degree. I don't know the specific divorce law and Illinois. So I'm not going to speak out of turn here, but you need to find an attorney, Lindsay. And you may spend months after, you know, repaying or doing what you have to do. But I would, I would fight for those kids. I would fight for what you deserve in this because you deserve something. Absolutely not. Don't go quite. Kind, kind person. And in these, this is battle. Like it, it, it, it's so sad that it turns divorced as though I get turns marriage into a business deal and you're a business partner. Lindsay, that's how you have to think about this. And you deserve your cut of the business of what you guys created in that household. And that's going to be helpful. But again, I hang my hat on you number one to change your life in the second chapter of your life. But then also you, you are owed something. So you need to fight for that. Okay. So here I say that. And if you need anything, please call us back in that process because we, we're here for you, Lindsay. We're so, so sorry. Hey guys, George Campbell here. Our big investing essentials event is just one week away. It only happens once a year. And trust me, you don't want to miss this. If you're tired of sorting through all the conflicting investing opinions online, then join Dave Ramsey and me for this two night virtual event to learn Dave's playbook for investing and wealth planning. We're going to break down 401k's mutual funds passing on wealth and more. So join us next week, September 1st and 2nd. Ticket start at $199. Do not wait. Get yours today at Ramsey Solutions dot com slash events or click the link in the show notes. One of the biggest mistakes that people make is thinking that they can skip having a will because they're too young, they're too healthy, they don't own enough. But listen, a will helps protect your family. It gives clear instructions and can keep your loved ones from having to guess what you wanted during a difficult time. So while they're already mourning, having a will laid out makes that process so much easier. So if you're ready to create one, go to momabarelegal.com. And if you're not sure where to start, you can text quiz to 3, 3, 7, 8, 9. And we can help you figure out an option that is best for your situation. But again, anyone, I would say 18 and older, you need a will. Now this show, we obviously love to do. It's our jobs. We have been doing it. But one of the best parts is seeing the transformation that happens and when people call in and they say, you know, even, hey, I just started listening a couple months ago. I'm already on baby step three and you can already start to see the progress and the change in their life. That is what we live for. We want you guys to win with money and getting this show in front of as many people as possible so that they can have not just the hope that they can make a change, but even the plan and the tactile steps on how to do that. So you guys are our best marketing engine. You really, really are. So we would love it if you would share the show. Make sure to tell your friends and family about it. Give us some comments, subscribe, all the things. It really does help us continue to grow this because we want people to learn how to live financially with a lot of peace and freedom and control. All right, let's go to the phones and we have Geneva in Denver, Colorado. Hi, welcome to the show. Hi, thank you for having me, guys. Absolutely. How can we help? Hey, okay. So I found your show a few months ago and I really liked it and have kind of done some of the baby steps out of order. So I just want some advice on how to best organize my life moving forward. Perfect. Yes. Sweet. So I'm 26 years old. Currently, my only debt at the moment is $10,000 in student loans, about $15,000 of those loans were paid off last year while I was fully like working full-time, which is really nice. But I recently decided to leave my job for several reasons and now the next step is I'm wanting to go back to graduate school and hopefully go into a different industry which I could be making some more money and be a little bit more happy and like passionate about my work. And so I had quit my full-time job. Now I'm working part-time and making $2,300 a month. My monthly expenses are about $1,800 a month. My tuition payments for my prerequisites right now are about $2,000 a semester and I currently have about like $7,000 in an emergency savings fund. So my main question right now is oh and my current student loans are in forbearance that end October 1st. So my question is is it a wise decision to make a big move and dump a lot of my savings at my student loans right now and pay those off quicker. One more piece of the puzzle, sorry bear with me. My dad has, my dad has you know really graciously offered to help me with my student loans and has been and so he has committed to paying another six grand of these loans off. Oh wow that's nice. It just has a gift. Over what course of time. Over what period of time is he going to pay this $6K? To be honest my dad is not the type to follow schedules. It's kind of like when he gets it he gives it and so part of that dynamic as well as like I'm accepting that like there may be a chance that that money doesn't come and I'll still have to pay it off but like sometimes it does you know which is a blessing. Okay so this is kind of like a thought that counts thing that maybe you get it maybe don't. I would not I would not wait around for that because it sounds like it could be a but I listen it's the thought that counts. So let me just get this straight. So the part-time work, are you doing part-time work because of school or are you doing part-time work because you quit the other job and this is just the only job you have right now because it's going to be hard on 2300. Yeah it's really both like one I needed to make sure that I had time and a schedule that would allow me to take the free requisite and then the other reason was because you know if this part-time work was a decent gig I could get to make that much money you know part-time. So how are you paying how are you going to pay the 2K per semester because you don't have any margin to live on. That's a great question. So the about 2K semester they've offered me subsidized student loans that I was like I could take it out there. Could you because you're calling us telling us that the debt is the problem. Yeah like even if it's like should I like even should I even like take a step back from classes now and throw all my savings or so you may want to pause the semester six months all of this changes. If you worked full-time you got to work full-time. Yeah you doubled say you say you made 5,000 a month you have 7,000 more like 36 more like 36 hundred a month. If you worked full-time. Oh sorry I just was saying my last income working full-time was about 36 hundred a month. Okay but you're doing part-time at 2,300. Yes correct. Is there a chance to double that. Oh yeah I can definitely I can definitely work more I can add more hours. I can get another job. So can we get to 4,600 a month that would be the goal. That's amazing. That's amazing. We could the the strategy I guess I'm going with is that I want to invest in trying to get a better job instead of playing the rat race but maybe I'm jumping. Well you're not playing the rat race you're what we're doing here and I'm glad that you highlighted that. What we're doing is we're prioritizing the most important things first. So what I heard you say so far is and these are in no particular order is it's important for you to pay off your debt. It's important for you to have a career that feels comfortable for you and that you enjoy doing and that you have passion about going to school and it's important for you to go to school. Those are the three things that we care about. So now let's list them in order of priority that allows us to eventually do all three. So eventually yeah the debt I do think is number one because this is just it's going to keep growing and growing especially as student loans if we don't pay it off. Not that it's a ton but let's just knock it out. So because of that since if we make debt the number one priority that means we have to work and so it's not you joining the rat race it's just you saying hey I'm going to work full time and I'm going to make $4600 a month so I can knock out this debt the faster I knock out the debt the faster I can get back to school which now has to be the number two priority. So once we pay off the debt now we can reverse everything and go okay now schools are priority which means if I have to work part time or a few less hours I can do that and then what school is done now of course we go back to prioritizing career again and you you work your butt off in your new career. Yeah here's what's wild is okay so we're we're heading into September okay so let's say September one you throw six thousand at your debt you keep a thousand dollar emergency fund okay because you got seven thousand saved you have four thousand left to pay if you go and work full time and you still live on 1800 which is your expense is what you said you could live on yes that's $3,400 of margin so you basically could pay off your student loan in a month and a few weeks okay we'll say let's say yeah six weeks we'll say two months September October just just to give you some grace starting in November you save that same amount so you have seven thousand dollars eight thousand if you include the thousand dollar emergency fund going into January and so you have for sure the two thousand paid off which is great you have a buffer of five thousand for an emergency fund and then and then if you want to cut back some hours or take night classes you could work full time and get these prerex right you just start to see the snowball of cash start to happen when you actually direct it and have a very detailed plan for it so you're yeah like you said you're on the you're going down the right road Jean I want to encourage you you are your mindset is is not off but when you're trying to do six different things it's really hard you have savings here you have some debt here you're trying to go to school here and if you just stop and say I'm just going to focus on one thing at a time I'm going to focus on paying off this debt check I'm going to focus on getting my two thousand for school for the next semester check oh and in the same month I have some extra cash I'm going to start saving for an emergency fund and you start doing it then the rat race doesn't become a rat race it actually becomes the thing that's helping you get what you want you go to school you start saving for after the prerex and you get a degree in what you actually want to work in and then you go find a job and we look up and you're 28 and just debt free and killing it so that's our hope for you so yeah you're you have the right mindset I would just detail it out and timeline it out so that you have a lot of clarity hey guys George camel here you ever feel like you make good money and still have nothing to show for it you're running into target for one thing and somehow walk out 87 dollars later with toothpaste and emotional support candles just me okay well that's the problem most people don't pay attention to how they spend their money so it does whatever it wants and that's why we created every dollar it's a budgeting app that helps you create a simple plan for your money every dollar simple it's clear and it helps track where your money is actually going plus you get daily lessons to do's and reminders along the way it's like having a money coach in your pocket your money's been freelancing long enough it's time to give every dollar a full time job go download every dollar for free on the app store or google play we're here in franklin tenancy where we do the show every day from one to four central time monday through friday here on the glass and the great thing is there's a some coffee and treats some people come from all over and watch we have a great we have a some great people here today so we're always grateful for that and then over on the side we have the debt free stage and on it is Ben and Natalie welcome you guys hello hello where are you guys from uh we are from puria illinois okay how far where is that specifically uh so a couple hours south of Chicago okay hostile so great well congratulations thank you thank you how much said have you guys paid off so we paid off eighty seven thousand eight hundred and sixteen dollars in eighteen months wow oh my gosh making what kind of money during that time so our first year of marriage we started out at thirty five thousand three hundred and forty one was our first year okay when we started paying off debt we started at seventy thousand okay and by the time we finished we were at a hundred and fifty two thousand amazing you guys oh my gosh in eighteen months okay what kind of debt was the eighty seven thousand it was all student loans yeah yeah I feel it I fell into my bones sorry that was a big response but yeah we're new jade would like that yeah I can't help it I can't stop it yep amazing you guys okay so what happened 18 months ago that you all were like we are so done with these student loans well I is primarily my physical therapy school is what our loans were so we when I went into PT school we were kind of planning on like once I was done we're like let's just pay it off right away yeah okay yes so you guys You're in school. I'm assuming when you guys got married. That's why it's 35,000. We got married, got home from our honeymoon and a couple of days later, she started her doctorate for our family. Wow. Okay. Just right in. Yes. How long did that take? Three years. It was three years. Okay. So you guys have been married by about five. It's a little over five. Yeah. Okay. Okay. Amazing. Yeah. So you guys were in school for a little bit. You came out of school and you were like, we're going to attack this debt. Yeah. We got this new salary. We're both working and we're just going to go for it. Yeah. It was the first year we were working. It was just me working. I didn't go to grad school. So it was just me. And so we just pretended that we didn't have Natalie's income. That's great. And we just said, you know what? This is all going to go towards loans and we'll get to enjoy it later. But we just pretended it was just my income for as long as we could. And it worked really well. Wow. Yes. I mean, how did you both align that this would even be the plan? Like what caused you both to get on the same page so quickly? So I, I mean, I grew up listening to the Dave Ramsey show. My parents would listen to it in the radio. And so I was familiar with it. And when she started school, we were pretty set on. Hey, when we're done, we're knocking this out. And it really, I didn't feel like it was hard for us to get aligned. We had a shared vision of we want to be generous. We want to be able to give. We don't want the stress of these loans. And it really didn't take much fighting. No. And I mean, it brought us together. It was awesome working towards the goal together. It was it was great for our marriage. That's amazing. So in that 18 months, what would you say was the most surprising thing about the deputy journey? And what was what was the hardest part of it? Yeah. I would say probably the hardest was we have a lot of like friends who were buying their first house or like going on vacations. And we were like, we're not doing any of that because we want to get this debt done. And so I think it was like a little bit hard to feel like we were out of place. We're just not doing what our friends were doing. Yes. But now we're like, we're debt free. So we can just save and do it. Yeah, for sure. Making 150 a year and just enjoy life with their payments. Yeah. Yeah. That's amazing. And what was the surprising part? Well, yeah, we can I think well, the biggest surprise was we were probably about three months away from paying off and we said yes to taking our foster daughter actually. And so that was kind of like a big like loop for us of like, okay, we need to really get this done because we got to finish. Yeah. Yeah. So right after we got her, we got her in December, we finished in March and then actually in July, we got a call for her sister. So now we have our sister. Oh, my gosh. And so I think like that was the biggest surprise that we weren't planning. But then we were so glad we had already made all this headway on our debt. And so now we can just enjoy our family and we're also adding a boy in December. Oh, that's over. Oh, my gosh. Oh, you're pregnant. Oh, my gosh. So, yes, so we'll have three kids in the span of 10 months. So that's probably the biggest surprise. That is a lot. That's not just a surprise. Holy smokes. Wow. Oh, my gosh. How great though. And how amazing that you did all of just like the hard charging work before all of this. And now financially it's like, okay, we don't need have to think about it. You know, you have a great job. You know, you guys are working hard and the money piece, it doesn't have to be a stress point. Yeah, because of what you guys did. Yeah, we were talking this morning like we don't feel like we would have been able to say yes to our girls if we would have still had all this debt. And so just that the Lord sustained us got us through it so that we can be generous with our time and feel like we can just say yes and do that. That has been a really big blessing for us. Yes. Well, I'll tell you the foster care world. You guys are you're doing the Lord's work. You really are. Well, he is just stating us. Yeah, maybe up a creek. I know, but that is truly the hands of Vita Jesus in our in today's world. So thank you all for that's just amazing. Gosh, how incredible you guys. Okay. So married five years did this journey together. Yes. What would you tell couples out there that maybe are newlyweds that are younger. Maybe they're coming out of school. Some student loans. What would you say if they look at like, okay, I'm going to have this for 10 years. It is what it is. We're probably going to get car loans. We're going to just do the normal way with money versus kind of this extreme other side of like we're actually going to pay off debt and stay out of debt. What kind of encouragement would you give someone listening? Yeah, I mean, just get after it. It is so freeing. I mean, being done and just we like Natalie said it was such an easy yes taking our girls knowing we have this freedom. But I'm if you have that crushing weight of we owe this every month and somebody else has a claim to your income. You don't have the freedom to say, yeah, I want to be outrageously generous with your time with your money with your talents. And it just gives you margin to be generous. Yeah, it's just it's not worth kicking it down the road. I mean, the level of freedom, just our first day, I remember paying it off and I mean that whole day just walking around just felt lighter. It was just it was a Friday. We got paid. We made that final payment and I was like, oh my gosh, Natalie we're done. Because I mean, every week we would get paid Friday and we would just say, okay, huge debt payment. And I mean, we were down to the 1000 emergency fund and we just said, okay, we're going to scrape by for two more weeks and get paid and make another payment. And I mean, it was just how little can we live on and I mean, yeah, now getting to keep it and use it to bless and it's awesome. We were so thankful. Yeah, and I think too, I would just say like it can be daunting and seem like a really hard thing. But because we went through this hard thing early in our marriage, we now feel like we know how to go through hard things. Later on, like becoming parents and all the ups and downs that come with that. And so like I know what we went through this as a team and we've practiced that muscle and so we can do it for anything that comes our way in our marriage with the Lord. I love that. That it does. It's so incredible. It sustains. It does. You know, you start to build something together and that's what's so unifying about it. When you go through the hard together, that's the story that you all have. Incredible, you guys. Absolutely amazing. All right. So we got Ben and Natalie from Illinois. They paid off $87,816 all student loans in 18 months, making 70 at the start of this journey and ended at 152. All right. You guys count it down. Let's hear your big debt free scream. All right. Three, two, one. We're dead for you. Oh, I love it. Oh, my gosh. So good. I just love a story like that. I think it's just a reminder that if you're going through this journey, it's never just for you. In the moment, it feels like, oh, this debt is crushing me or this is, you know, you can, your world can close in. But when you go through this journey, so many people have the ability to benefit from your sacrifice. That's right. And I mean, we're seeing that in spades with them and their family and it's just, oh, incredible. I love it. Two foster girls and a little boy on the way. I mean, just it just unfolds. It feels like so perfectly. Well done. Well done. Well done. Well, congratulations, but an Adelae. You're awesome. Hey guys, Dave Ramsey here every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show, whether you're making a decision or just want something explained ask Ramsey is here to help. It's fast, simple and free to use. Go to Ramsey Solutions dot com and try ask Ramsey today. That's Ramsey Solutions dot com. All right, our scripture of the days, John 15, five, I am divine. You are the branches. If you remain in me and I and you, you will bear much fruit. Apart from me, you can do nothing. Amen. Hallelujah. I know. That's right. The evidence of fruit. That's what we look for these days. Do you have the fruit of the spirit? Peace, patience, kindness, goodness, gentleness. That's what we need. And you know who embodied that Jade? Ms. Dolly? Ms. Dolly. I had a quote from some guy. I don't know who it was. So I just, I'm going rogue. I just chat. She thinks he doesn't, I need a dolly burden. And quote, because this woman in a getmer here in Nashville and she just was a jewel to anyone and everyone her reputation is exactly what you believe she is. She was amazing. So the first one that came up, that's what I'm going to quote because I had to do it pretty quick. If you want the rainbow, you got to put up with the rain. That's a fact. That's what we teach every day. - That is it, it is it, that you're gonna, there's gonna be struggle, there's gonna be hard, but at the end of the day, what it creates is beauty. And that's the part that I think people miss is, when you go through a season of sacrifice, you go through a season of maybe marriage wise, you're combining accounts for the first time and you kept it separate for so long, 'cause you fought too much and you're like, you know what, no, we're gonna unite, and it's gonna be tough, there's some tough things, and when you push through those, just like our debt free couple, it's like on the other side of that, you're stronger, and you see the beauty in it. - Yes, and you don't always, and you don't always appreciate the beauty unless you have the rain. So, Dolly, we appreciate this. I love that, that's a great quote in my back pocket. - Yes, that's right. - All right, let's go to Marius in Detroit. - Yes, hi there, how are y'all doing? - Good to hear, thank you so much. Yep, so I'm 25 years old. I'm in a bad financial situation right now, they're my deal layout, so maybe you guys could help me out with that, so let me lay that out for y'all really quick. So, I have $9,000 right now in credit card debt. I'm a bunch, sorry, I'm behind on a bunch of those payments. I have a car payment as well. I still owe $21,000 on my car, and the car payment is $420 a month. My credit score is not at all, it's 480, and I've been self-employed for the last few years, so it went very well at one point, and it took a turn for the worst the last year or so. So, I have kind of played around with the idea of bankruptcy, but this is where there could be a way out instead of that. So, I've got a buddy that basically I talked to in the layout, all the details for me, you could get me a job that is basically ready for me to start in two weeks, they'll be paying $6,000 a month salary position. So, my question to you guys is, yes, thank you so much, I'm really excited about it. So, my question is, would that $6,000 come in every single month? So, I have the car payment, which I still owe $21,000 on, and I have the $9,000 the credit card that payment. How do you guys think I should juggle that? If I should kind of like save up and pay it all in bulk, or if bankruptcy is still on the table, they're like, what do you guys think? Well, I definitely don't think that bankruptcy should be on the table for you, because the solution is just income. And you don't need a massive income, you just need an average income would really solve this. And it's just you, or is there kids? Is there a wife, girlfriend? Is there anybody else in the picture we need to know about? No, man, it is just me. I'm not renting on my own apartment or anything. I'm staying with some family right now. Staying with family, okay. I don't have to pay rent. Okay, I have two questions real quick. One, how has the credit cards gone to collections yet? Yes, I believe so. They have, okay. Okay, and then the car, how much is the car if you sold it, how much could you get for it? So I did receive a, like, basically cash like rent off for four, but it's less than what I owe. I think it was 17 or 18,000. That's not bad. Yeah, was that from Kelly Blueook, or who, what was that from? That was, I brought it into, I think it was Echo Park or Caravanna. Like one of those, you could like rent trader car, and that's what they told me. That's good because that means if you did a private sale, you break even probably. Yeah, you may be able just a, yep, exactly. You may be able to get, okay. Just get that. So I'm wondering probably what I would do because you're gonna feel that 420 a lot. So I think my goals would be, and you can kind of do all this simultaneously. I would be contacting the creditors or the collection, whoever has the debt on the credit card, and you usually can, it may take a couple of calls, but you can sometimes settle with them if you have the cash. So I think I would have a goal, probably in the next few months. Once you start the $6,000 job, I mean, can you live off of 2,000 a month? Yes, I can. Because the only real extent out is that car payment. Okay, so you, okay, amazing. So let's just go crazy and let's say 5,000. I don't know. All your income except your food. Yeah, I mean, like seriously, let's just go, just for the heck of it, okay. So what I would do is I would save that. I would call the credit card companies in 30 days and say, hey, I have $2,500. I have $3,000. I could settle with you today. And over and over and over and over again. And hopefully at some point they're gonna make you an offer and you're like, that's great. And get it in writing. Credit card is done, okay, so check. The next month, I would save another $5,000, okay. And at the same time, be looking to sell this $21,000 car for around $21,000. If you're short a 1,000 or two, that's okay. 'Cause you're gonna have it. 'Cause you're gonna have extra $5,000 coming in. So do that and then save up some money and go buy a $5,000 car. Like you can do all this in three, very short time. A really short time. So bankruptcy's not even close. It's not even close. It's not even in your universe. So I wouldn't even consider that. You're just feeling overwhelmed. And you're young, you're 25. And you've just like the weight of your decisions just hit you like a ton of bricks, I think. And you're realizing I can't keep going on like this. And so it's good that that happened. That's how we learn and everybody hits that point financially unless you were brought up, like our debt free screen, unless you were brought up in the ways of Dave Ramsey. That's how we learn. And so I don't want you to beat yourself up about it or spend much more time, but I do want you to pivot hard out of this and do exactly what Rachel said. Because if you mess around with this, it's gonna stay on you. Every time you make that $420 car payment, things get harder and harder for you. So the faster that you do this, it is like I said, going from one direction completely to the other. And you're gonna feel the whiplash of that when you get that first paycheck and it's all going on to the debt. I do want to ask about that. How solid is that job? Like is this, this is not just a buddy being like, "Yeah man, I got something for you." Or is this like a legit real deal, not a scam thing? Right. Yeah, no, yeah, that's definitely an important factor. And yes, it is legit. It is for a fiber optic company that basically do underground drilling. Okay. And they need someone kind of like on the back end in the office because that job's like that. Like basically doing all the invoices, like managing crews, things like that before. And you have experience of that? Oh yes, man, I do. Okay, good, good, good. I love that. I love that you got that. I think this is great. I mean, honestly, as you call in, you're like, "I'm behind on credit cards. I got this car. I don't know what to do." With self-employed, you feel like you haven't had consistent income. And literally in the next three months, your debt could be gone. You could look up in April, Marcus, and you could have $20,000 saved in an emergency fund. Yeah, why wouldn't you? And then you go down the baby's steps. You've paid off your debt. You have an emergency fund. You start investing 15% of your income into retirement. And what's wild about all of this is when you actually like run the numbers out. And let's just say, yeah, through a thousand bucks a month, okay, of investing, which is a little bit more probably than at that point what we recommend. But let's just do it for fun. 25 is 67, Marcus. If you just, if you made that your habit, you'd have $10.7 million sitting in investments at 67, right? And let's say you're like, I don't want 67. Give me 59, all right. Let's see what 59 year old Marcus, 4.4 million. That's great. Like it's just, it is shifting from the mindset of, oh, I'm going to be paying people to, I'm going to pay myself. And that's all, that it to me always is so motivating. Absolutely. Make the banks rich, Marcus. And you can't call you Marcus, Marius. Marius, I'm sorry I keep calling you Marcus, Marius. I apologize, I apologize. But for real, like stop making other people wealthy, these credit car companies and car companies. I'm like, no, you, you can do this. So take advantage for sure of this opportunity of this job. And then also, you know, start dreaming about what 28, 30 year old Marius wants to be, right? From a career standpoint. And this should be a turning point for you. Not just in, I'm paying off my debt, but it's a new lifestyle change. Like who you are has changed. You're no longer, we say over here, the borrower is slave to the lender. And you're choosing a new identity to be a person that doesn't borrow money from this point on. And the power of what happens when you get your income back. Yeah, absolutely. Awesome. Well, great hour, Jade. Always fun hosting with you. Thanks to everyone in the booth and our wonderful audience that's here today. And remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace, Christ Jesus. (upbeat music)