Stop Giving Your Paycheck To Lenders

brought to you by the every dollar app start budgeting for free today normal is broken common sense is weird so we're here to help you transform your life from the ramsey network in the fairwinds credit union studio this is the ramsey show i'm rachel cruz hosting this hour with jade warshaw and we are answering your questions so give us a call at triple eight eight two five five two two five we can't do this show without you so give us a call and we'd love to chat all right let's go to lauren kicking us off in philadelphia oh hi lauren welcome to the show hi thanks for having me yes absolutely thanks for calling in how can we help um so my husband and i were currently struggling to make ends meet because my husband is waiting to buy my dad's business and we have a good amount of debt that feels like we're never going to get out of because we don't have that much margin so i'm just wondering if what we should do so there's no margin you're trying to get out of debt and you're trying to buy a business simultaneously yeah okay how much debt are you guys going to go in for the business we're not sure i think it's going to be more of like a payment plan like for say seven to ten years of like giving it's my dad's profit giving yeah giving off the profit so i guess let's start there um what would you need to what is it going to cost to get the business so i'm not even sure it's more like my dad is just not ready to sell and he said it would be five years and now it's been six and he's still not ready and so he just keeps like giving us just enough money to kind of get by but he's not ready to sell and he doesn't even have like exact numbers to give us do you work in the business are you employees there right now my husband is yeah okay and he's not getting paid a full-time he's not getting paid for full-time no he he is it's just it's just not enough to kind of make ends meet we have we just bought a house that's around 48 of our income okay so that it so the reason we bought the house it's my parents neighbor's house and they kind of convinced us like hey once you buy the business the mortgage won't be such a huge stretch for you so we think you should kind of take the leap um without a plan from your dad who doesn't have an exit plan at all and nothing written down no contractual no so what does what does your husband earn every month working full-time at that business uh it's around 7 000 okay and when you said the comment earlier of um what your father-in-law gives you like he doesn't give us enough money what did that mean is there an additional amount of money that he's giving you no well since we bought the house he kind of gave my husband a little bit of a raise so that we can just kind of get by with our monthly bills but was it a one-time amount or it's a was it truly a raise that is ongoing it's going to be ongoing um it hasn't even started yet he kind of just came up with that okay what will that be about a thousand a month okay so that puts you down at eight thousand a month what about you how much do you earn elsewhere i'm primarily a stay-at-home mom um but i work a couple hours a week um so i would say in a month i make around four hundred dollars okay okay so the biggest problem the biggest problem aside from dad not selling the business yet aside from some of these other things is you guys made the choice to buy a home that you couldn't afford and i know that there was some money on the table being talked about but i mean it's just the classic example of counting your chickens before they're hatched so some of that is on you guys and i think from this point forward you guys have to go okay let's cut them out for a second and let's just us make the decisions about our life our marriage our money because if we keep listening to them we're going to number one be waiting around forever we're going to be making decisions that don't make sense for our actual money and it's just going to keep unraveling so i think yeah and making decisions about the reality of what's actually happening lauren right like we can you can talk all day about x y and z but until something is actually happening or there's a there's an active plan right give me it would be one thing if you're like yes he's selling the business at the end of this year right starting in january we got two months we got to get through right like or something like that like if there was there if there was a reality to the situation but your your dad and what i'm scared about is what i have in my head is all these small businesses that we coach the the letting go and the transfer of ownership of a business number one can be very complicated from not only a personnel standpoint but a financial standpoint i mean all of that there's there's a lot that goes into it and the fact that there's not even a plan in place to start tactically actually doing things and moving things out of your dad's name it this could be another two to three years lauren before your dad gets to decide what he wants to do does that make sense yeah yeah and i have a feeling it will probably be like two to three years if not more yeah which meant that buying that house based on the possibility of owning a business that again we don't even know the numbers around just yet i mean that's the other big kind of elephant in the room is you guys don't even know what the business is actually worth my guess is you haven't looked at any financials so i would table that for now and like i said before right now we're just looking at the situation as it is so let's talk about debt how much debt is there uh you and your husband about 91 000 what's what's it in credit cards student loans car loans um i have student loan that's like 63 000 and then we have our car is about 16 000 um but it's kind of a loan to my in-laws so um we aren't even paying that right now because that doesn't fit into our budget so they kind of told us we could stop for now and then about 11 these are the same i just want to get clear these are the same people with the business and now it's the husband is it your husband's family yeah my husband's family have the car loan the business are very in tangled with money and family oh i i don't like it yeah i bet you don't how long have you guys been married uh five years okay yeah i think i i know i've said it but you guys need to start that process and be very intentional about it and honestly in many ways so you owe them the 16 000 there's a big part of me where i would move that closer to the top of the list just to get untangled in that and then also with the dad going back to your dad giving an extra thousand dollars i want to know like this is not you just like being my buddy and giving me a thousand bucks like is this in my in my payroll it's part of my paycheck like try to make those clear boundaries and i'm getting a raise because it's on my merits not because well i need to help you guys out with your rent and your mortgage a little bit right does that make sense and like yeah clear those lines a little bit yeah um i mean it will be like in in his paycheck but it definitely is not based on merit i think he's overpaid for the job already um but i think my dad just i don't know if maybe he feels bad that he's not ready to sell the business yet or he's not planning to sell it for a while and so he just wants us to be able to get by until he is and that i think that's a conversation i i would have is dad i'm really trying to create some boundaries and some clarity um and rachel you could probably speak better to this like understanding those hats of like when we're here it's like me and you mom like daughter and dad and when we're here it's like employee employer and my husband is also an employee and like clearing that yeah and i'm i'm curious about your husband lauren because the the the language of he's probably getting overpaid maybe he's gonna wait around for a business that may or may not sell like what does your husband want to do with his life because is is he excited about the type of business he's in yeah and like he's had other job opportunities where he could do something like that and he's like i'm gonna do something like that and i'm gonna make as much as or more money okay okay health benefits and all of that but he wants to he wants to own the business and we're kind of just going on this like promise that at some point he will yes okay so i think i would have some clear conversations with your dad both of you or him specifically of hey we're waiting on this i would love a time frame that we're working towards just for the health of the business and then you guys need to do a budget and possibly start working overtime to get this debt paid off and first to the in-laws so that you're not owing more family money if your business is making seven figures or more you should be proud of that but that growth probably brought a mess with it systems that don't talk to each other it's impossible to track down your numbers because they're scattered everywhere that's a visibility problem and net suite has solved that problem problem for more than 44 000 businesses like yours net suite brings financials inventory crm and more into one place and their ai tool net suite next builds ai into everything automating busy work like forecasting demand and chasing down overdue accounts it's not complicated to use you just ask it questions like you're talking to a person and you're not starting from scratch because net suite is built on leading practices from thousands of businesses pre-loaded and ready to go ramsey solutions switched to net suite years ago it helped us know our numbers and we've never looked back if your revenue is at least seven figures try net suite next for free at netsuite.com slash ramsay that's netsuite.com slash ramsay or click the link in the description up next we have mike in baltimore hi mike welcome to the show hi thank you for having me yes my wife recently started a part-time work from home nursing job but she's considering taking a 13-week local care care contract paying $35 an hour full-time after taxes and $2,400 a month in daycare for our two boys we have about $3,800 extra per month to put towards debt is it worth temporarily putting our kids in daycare and taking on extra stress to aggressively pay off debt or should she stick with her current job how much debt do you guys have we have a good deal we have $80,000 in a home improvement loan a $54,000 personal loan and $32,000 of student loans okay so it's $166,000 yes okay and what do you make we bring in $1,200 monthly so this $12,000 monthly $12,000 monthly and then if she takes this other opportunity that's a limited contract it'd be an extra $3,800 every month for 13 months is that what you said for 13 weeks 13 weeks so it'd be about three months and then can she renew it if she likes it can she do it again potentially there because she's a nurse and she has a lot of experience there's always potential for contracts and since we've been working the baby steps she's been very eager to find extra opportunities to chip away at her debt more so tell me i don't know if it would be that exact contract but there are always opportunities opportunities how much money are you guys able with the $12,000 that you bring in how much are y'all able to have a margin to throw at debt in general like $5,000 $4,000 $2,000 towards debt $2,000 okay so if she does this it's about $4,000 a month for the next three months there's like a an opportunity to pay off $12,000 extra in debt that's kind of what's on the line and then i mean what's the what are you guys think the downside is to sacrifice that three months like i said we've been getting a lot more intense so we actually just sold our second vehicle recently good to pay off more debt but with this job because the contract wouldn't be remote it would be a more local thing we would either have to figure out a weird shared commute with dropping off our boys dropping me off at work yeah her going to work okay and then the way back or we would have to figure out like a cash car or like a temporary rental car so that that would cut into the $12,000 i mean to get something reliable at least $5,000 right so now you're looking at this and you're more at like $7,000 uh i i am almost always on the side of finding ways to bring in more money especially when it's a short-term sacrifice for a long-term gain how old are the how old are the kids like specifically we have a four-month-old and almost a two-year-old okay um mike i'm curious out of $12,000 why is only two going to debt could y'all live like you make $60,000 and throw six at it because i mean at this rate you're going to be getting out of debt in seven years by just throwing $2,000 at $166 so i'm just curious from a from a standpoint of man so our minimums we pay almost $3,000 so then we pay $2,000 extra so we're paying about $5,000 a month towards our debt towards debt okay right but even still that still doesn't seem right how much is your mortgage our mortgage is $3,500 okay that's fine let's see here i'm just doing math yeah there's so where's the other $3,500 going because i'm accounting for the $5,000 that's going towards debt that's minimums plus extra $3,500 uh is uh mortgage you guys aren't yet paying for daycare i'm assuming you're doing you know insurance which is a major expense i'm assuming that's coming through somebody's work so where is the other $3,500 is the question i don't think we'll be able to like go line by line with you here right but what i would do i don't know do you guys have an every dollar budget we do okay so when you go on the every dollar budget which i want you guys to do tonight go through it with a like a fine tooth comb and figure out what's eating this up my guess is it's being eaten up by groceries you know a little bit overspending in groceries a little bit overspending in subscriptions a little bit overspending on fun a little bit overspending on you know things for the house whatever that is because other than that it's kind of the basic four walls from there it's your utilities and this and gas and i just can't see how i get to $3,500 from there yeah and i'm not saying it's going to be astronomical amounts but i think there's probably another $800 in there a thousand bucks in there but you can do yep yep because if you could um yeah you said you're throwing $2,000 i mean yeah even $3,000 a month right and yeah i mean at this rate like i probably would go job to job for her and i kind of like the idea that she has some flexibility because i know with a new baby and stuff that's not fun right of having to put two little ones in daycare um because how much will how so you said after daycare though she could bank around $4,000 $3,800 yes yep um because that's a bit i mean you know what you could do is do that for three months and then if she needs like two or three months at home again take a breather break and then get back go back yes um i would i would do that because if you can even get to the point so you're already doing $5,000 if you can do another three somehow with you picking up extra work her picking up extra work and get this into you know or even $7,000 instead of $5,000 and get this more into like the two-year range that would go a very very very long long way for you guys yes absolutely yep so i think you guys have to you know i i've again the short-term um sacrifice of these contracts being so short right and that an ending i think gives a lot of flexibility so they can kind of map out and say hey for the long term what does this feel like what feels doable yeah but it's i mean 166 is a lot of debt um when you're throwing only two groups two extra thousand at it you know and that's the this is the prime example of debt costing you your options in life you know i think every mom wants the ability to make that choice of am i going to go back to work or am i going to stay home and feel completely in control of that and these are the examples guys of when we say that debt robs you of it robs you of your money obviously but it robs you of your options and the type of life that you want to create temporarily right until you fix it that's right all right let's go to jake in montgomery alabama hi jake welcome to the show i'm doing good how are y'all hi we're doing great uh thanks so much for calling in how can we help so i'm 20 years old and i've been working at this job for about a year and they called me about setting up my 401k i was wondering what's the best way to maximize it and to go about it oh that's great so you're 20 years old uh what kind of job what kind of job are you doing i work on generators okay awesome and do you have any uh any consumer debt uh i got a truck payment you do okay how much is that uh payments about 266 a month and i owe about ten thousand dollars on it ten thousand okay great um how much do you have any money in savings uh yes ma'am about three thousand three great and how much are you making in the job i make seventeen dollars an hour and i work about 40 hours a week so it's about eleven hundred every day two weeks okay after benefits and all that okay so you're bringing home right about three thousand eleven hundred every two weeks oh so 2200 yes ma'am okay okay where are you living i live with my parents okay okay great um so yes the 401k is definitely something to do because if you can start investing early that is going to help you so much but doing it in an order is important so we'll walk through what you'll probably end up doing you'll just come you know i'll first answer your question to set up to set up the 401k uh yeah you'll contact hr and they'll sit down with you and you'll be you know there'll be some forms some things that you'll be filling out and they get to contribute a percentage of your income and if they have a match jake do you know if they do six percent six percent okay so we recommend investing fifteen percent of your income and you're going to be able to do that into retirement and so you may want to be putting yeah some of that you may not do you know you'll probably do fifteen percent of your income however that ends up being with the match is one thing but i first jake wants you to get out of debt so pay 2000 on your truck this month pay it off build up an emergency fund of three months of expenses and then do your 401k so maybe in a few months to do it but You'll contact HR as the short answer, and they'll sit down with you. 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Let's go to David in Charleston, South Carolina. Hi, David. Welcome to the show. Hey, thank you guys for having me. Me and my wife love listening to the show. So thank you again for having me on. Yes, absolutely. So, yeah, our philosophy, me and my wife's philosophy is just to, from a quote we heard from one of our financial advisors, is just to give all you can and then save all you can and then enjoy all you can. And so I just read the book Die With Zero recently, and I was just curious at what point does continuing to accumulate wealth become less important than intentionally enjoying it and giving it away? And how do you balance the Die With Zero philosophy with biblical stewardship and kind of building generational wealth at the same time? Yeah, it's a great question. I read that book, too, and I loved elements of it, honestly, and it kind of shifted my thinking in some ways. Right. Yeah. They're definitely not, I mean, the generational wealth thing, in their perspective, would be that you give your kids everything before you die, right? Right. And so they can start building their wealth, which is partly, I very much, I kind of love that. I mean, we talk about changing your family tree, and a way to do that is if your kids, from a character perspective, can handle it, but if you have gained enough wealth and your kids are at a place and you're able to start them off on the right foot financially, whether that is a big down payment for their first home, whether that's maybe even, you know, replacing a car for them after college, you know, if there's a way to be like, hey, instead of you going backwards with your money and going into debt, what if we helped set you up, and then from that point on, you continue to build your own wealth, right, instead of paying the bank. So that idea is great, but also, like what you're saying is that, you know, a good man leaves an inheritance to his children's children. Like there is a longer mindset as well. So you could say, well, if your kids received money from you, even while you're living, they could be investing that money for their kids, right? So you're still doing it, or you're not giving them all of that, right? And they get it when you pass, right? So it's kind of the two ends of the deal. I think it's just you, David, being intentional, on what you guys want to create. So to Rachel's point, if you just make a plan and say, okay, having a clear goalpost of saying, here is the amount in the bank that we think is enough. Like this is the line that we draw. I'm just arbitrarily throwing out a number here. When we have $5 million in the bank, we know that that's enough because we'll be able to draw our lifestyle from it. It won't touch the nest egg. And that's the amount that we want to, upon death, have there in that inheritance format. Right. Format. And then we work backwards from there and we say, and then from there, anything above that, here are the things that we'd like to do. And just literally make it a list and plan that out with your spouse is, we want to do the down payment. And here's the percentage that we're hoping to do for each kid or for, you know, if you only have one kid. The other thing we want to make sure that we, maybe we want to pay for weddings in cash. And here's the amount and getting very specific. And we want to do, you know, 50 grand for each wedding. And then, you know, what's the other thing? College for sure. I mean, baby steps. We'll walk you through that. Yeah. But I think just the idea of having a clear plan, because I do think that in baby steps seven and beyond, it can start to feel like, okay, when, when's more because you're just packing it away. And if you have a high income or if you already, you know, had a good sum of money, there does become a point where you go, do we need to keep doing that? Yeah. What else can I do? Yeah. Or why else am I doing this? Right. So, yeah. So the, and so the giving the saving and the spending, elements like what your financial advisor said is, is spot on. And so I think just increasing to those over time allows you to enjoy it. So if you're increasing your spending and you're increasing your giving those two specifically, the Alco, knowing that there's enough saved, right? Like I'm talking about, like, if you do have that big number and you're good it's kind of a discipline to say, we are going to do this every single year. Here's the amount we're going to enjoy. And here's the amount we're going to give. And sometimes you have to kind of force yourself to do it because it doesn't come naturally. No, absolutely. We just, we just really have a heart of generosity for others. And I just, I do just have, I have one daughter, she's actually in third grade and I'm just trying to, um, even start those principles now, you know, we even got y'all's little bank about, you know, given saving and enjoying too. And, um, I think the best thing from the book I love was just the memory dividend about just making those special memories. Yeah. And Rachel, me and my wife, we've been took you up on it, which y'all did about going to see, I took her to go see the Backstreet Boys at my wife and, uh, um, she just absolutely loved it. And I've been out, but that was a, I was zero moment as well. I said, like stay at the wind and do all this thing. So it's just fun to, I think, to enjoy. I think that's what that was. Zero has given me is enjoy the journey while still leaving generational wealth. But I just wanted to, just to share that with you guys that, um, what's your, what's your net worth, David? A net worth is about. It's about 4.8 million, almost five, not quite. Okay. So yeah. That's great. House, house and everything. Yeah. Just working. What'd you say? With the house. Yeah. Yeah. With the house. Probably about, probably about, we owe probably about, um, we have about a million net worth on the house. We have about 600,000. I'll tell you a story about it in just a second. And then we, uh, probably about 3.6 million, like in investments and liquid. Okay. And the reason we haven't paid that off, and I know that's necessarily, the Ramsey philosophy is I was able to get a, um. I'm not a veteran, but I was able to get a VA assumable loan at 2.25%. And so we were able to, when we moved from Mount Pleasant to Dano Island, it was just a great opportunity to do that and to capitalize on that loan while still packing away the rest. And we're really disciplined to do that. But I know there's a lot of peace of mind about paying it off too. But anyway, that's just been a blessing from the Lord too, with that too. So. Do you have those numbers? Um, you know, obviously you've amassed a really nice net wealth, net worth at a, what sounds like a young age. I don't know. How old are you? I'll be 47 and, um, 47 and, um, December, I sell medical devices and I've just been very, I've been, I've been blessed and I just know it all comes from the Lord. You know, I, I just try to stay, you know, hungry, but very humble too about it. And, um, but anyway, just, just very grateful me and my wife just try to be just really grateful and just try to have a humble spirit about it too. So have you guys set a number? I mean, have you, I'm just curious, have you sat down and gone, Hey, like this is going to continue. I mean, I'm sure it's invested well, this is going to continue to double every, you know, every seven years. If it's having a rate of return of 10%, um, when this gets to X number, like, have you guys sat and talked about what that goal number is, what you want to do with the excess? I'm just curious. Yeah, no. Great, great question. So we haven't necessarily set a number on the amount on the, like the dollar amount, like I want to end with, but what I've done is I've tried to set a number on the retirement. Like I'll be 57 when I retire, my wife will be 49. And my, and the reason I picked that is my daughter will go to college then. And we love to travel. We love to see the world, but I just thought that would be a great time for me to walk away. Of course, maybe leave some money on the table, but I think we'll be well, well set up then just for the investments that we have and things like that by then. So it's not necessarily a number, it's more of an age just so we can walk away healthy and be able to still minister to our church. And I'm an elder at our church too. And um, it's just, we just love serving. So that's, I think. I think it's more of a number than a, than a dollar amount. Okay. The number of an age to the dollar amount. Yeah. Well, I think. It sounds like you guys are talking about it, which is good. And I do think, yes, enjoying some of it is important, even at this stage. Because what can happen is over time, those habits start to form where the money almost becomes a chokehold on you. Like, I don't want to lose anything. And so you don't spend, you don't give. And then you get to the age of retirement and you're like, oh, my gosh. I didn't even. I didn't enjoy my life. Like what he's saying. And I don't even have the muscles of how to do this well because it's scaring me to death. Because money has such control over me, right? And so that open hand mentality, David, is very, very important. So, yeah. So I think having some big lofty goals for your daughter to set her up well in life so that she can invest early. And she can start building her own wealth, I think, is a key. So how you do that is going to be something that this money will be used for. And then also, yeah, have a budget that's realistic for your lifestyle. And say, hey, we're going to go on some nice trips. If we love to do that and we want to make that a priority, cash flow it and enjoy. If you've been sitting on a great business or product idea but not sure how to actually make it happen, I've got two words. Do it. You can be up and running by Black Friday and Shopify can help you. Get there. With their ready-to-go templates, you can build your website quickly and easily. And their mobile app lets you run your business from anywhere. Track your inventory, handle payments, and provide customer support all from a coffee shop or a card table in your living room. Starting a business is hard. I know that firsthand. But Shopify can make it easier. And with the holidays around the corner, the time to serve your future customers and hear your first sale is now. Just go to Shopify.com slash Ramsey. If you get started now, you could be launching your business before Black Friday. Go to Shopify.com slash Ramsey to start your free trial today. That's Shopify.com slash Ramsey. Our question of the day is brought to you by Ask Ramsey, your free AI tool that provides personalized money answers based on Ramsey principles. So visit RamseySolutions.com slash smart money. All right. Today's question comes from Spencer in Arizona. She says, My husband and I have two children in their early teens and prioritize family vacations over saving for college. Taking vacations. Vacations with our family is the main way I get to connect with my children. At home, we are in the rat race of school, sports, and other activities. While I understand those are important, I resent the time away. I'm sorry. I resent the time they take away from us as a family. We pay $10,000 a year for each child to attend private school. And we intend to contribute the same amount to their college education when the time comes. Are we making a giant mistake by choosing vacations instead of college savings? Okay. I'm hearing. I'm hearing several things in this question, and I'll try to separate them out. First off, I want to say, if you have the ability to cash flow college or further education, whatever that looks like for each child, then suddenly the need for a big chunk of savings goes down. However, I do like having that chunk of savings in case something were to happen with your job and you could no longer cash flow it. So that's something you have to balance, I think, fairly, not being so fear-based that it's like, something's going to happen, I'll lose my job, but also just knowing, okay, a lot rides on that. So that's thing number one. Thing number two is I hear you saying that you resent the very lifestyle that you have signed up for, which is what you called a rat race of school, sports, and other activities. And my thing is, if you resent it, then change it. Because you're saying yes to all the other activities, all the sports. If that's adding stress to your life and it's not a life that you are enjoying living and that you're, building resentment, that means you need to make some major changes. Sit down with the family and go, this is not working and figure out why that is. Is it because you're the one who's carting everybody around? Is it because you're the, like, figure out why that is and try to solution that instead of using that as a crutch to make a decision that you yourself are kind of saying is maybe not the smartest or best decision. Yeah. It sounds like your values are all out of whack. You and your husband, I would sit down and say, Hey. Here's what we want in our family is as John Deloney always says, how do we want the house to feel? Like, what, what do we want this to be? We want, these are people, you know, these are the kind of people we want to be. What does that look like? And then you build a life and decisions around that. And so maybe it is doing one sport, a season versus doing two sports and in a musical instrument, right? Like you cut down on things or cut down on this intensity of the things they're in and, and pull back some. I mean, that, that is okay. Yes. Pumping the brakes and changing things is okay. And, and so I would say, yeah, looking at that, listen, vacations, I agree. I think, I think being important, yeah, being away with family, but that can look all a lot of different ways. And I also would say their education for the future and setting them up well to be adults who go and succeed is also very important. And so if you can do both and connect with them and have the time and the space for you guys as a family. To have connection throughout the weeks, you're not going to be at this like drought place of like, I have to have a vacation in order to connect with my family. That's pretty, that's not a good, that's not a good place to be. Like if it's this idea of the only time I can connect is when we're on vacation. Something needs to shift in your life is what I would tell you at that point so that you have margin and you can, you can enjoy. And then you can actually put your money towards things out of the abundance of, you know, feeling like, okay, I'm at a good spot. And I'm gonna make these decisions out of that, not out of desperation that I'm grasping for straws. I agree about that. And I agree that, you know, if you're a family of four, let's say everybody get, everybody should feel like they're participating in that life together. Not that you're just the one that's facilitating everybody else's life. Does that make sense? Yes. So it's like if the kids are doing sports and activities, and that's something that for them is like, this is a non-negotiable, I need to have this. This makes me feel like I'm, you know, living my best life. Then mom also gets to have those things, whether it's, I need one family dinner every night. Yes. Because that's my time that I connect with you. And that makes me feel like I'm living my best life. That's right. And if dad has like, I gotta go do that, right? Like everybody should have their portion of that family life that gives them and makes them feel fulfilled in what they're doing. So I think that you have like permission to take up that space. And then to vacation, man, you could do a $5,000 vacation or you could do a quick trip, you know? Yes, that's right. So make it happen. All right, let's go to Seattle. And we have Lee. Yeah, on the line. Hi, welcome to the show. Hi, guys. I'm really excited to talk to you. Oh, well, thank you for calling in. Yeah. So my question is about how to best set my son up for his future. He's 10 and he's already extremely entrepreneurial. He has a successful business mowing lawns in our neighborhood, which he wants to expand on. And he also sells 3D prints. Oh, yeah. We know that life. Yes. And I would love to set him up with some type of investment account. For him as an adult. I know Roth IRA is best since he has a type of earned income, but I'm struggling because he does have a diagnosis, which could shorten his life expectancy quite a bit. So I want him to be able to enjoy that money, whatever, whatever we're able to. And I would invest for him. It's not his money. We'd be putting, you know, kind of like your dad did for you. Sure. Yeah. But I don't want him to have to wait until he's 60, you know, if that's a possibility for him to be able to pull that money out. So just trying to get a. Yeah. Trying to get a read on what I should do. It's a great question. Yeah. Can I ask this and answer whatever you feel comfortable with? I'm just trying to get a gauge for him. Is this something that you see in his life in the next couple of years? Or do you think he'll be able to make? It through college and into some adulthood or what kind of time frame was given to you guys? And I'm and I say that was such a heavy heart as a mom. I'm so I'm so sorry. That's even a conversation and a reality for you all. Yeah. It's something I'd rather plan for than not know, you know. Yeah. So it's very variable. Each. It's a heart and lung disease. He will at some point need a full heart and lung transplant. That is all just up to his body and how he prefers. Progresses and then, you know, life expectancy with heart and lung transplants are not always super great. You know, they give them five to ten years and then you probably need another one. So it's kind of this constant thing. His doctors say there's no reason to believe, you know, he won't live perfectly fine into his young adulthood. You know, obviously everything is variable, but, you know, there are people with his specific disease that live into their elderly ages. It just depends on the person. But it is okay. I got you. OK. Yeah. I was just trying to gauge it for his future things that could be in the nearer future that he could be saving for with this. I'm definitely looking at right. I'm definitely looking at adulthood for him. He's going to have a business. I don't know what kind. He's going to rival Elon Musk one day. I love it. That's his brain. Yeah. So at this point, since he's 10, I mean, if you do a if you actually do a Roth IRA, you have to file taxes, I think. And that would be money that you can't get out till 59 and a half. So I probably wouldn't go down that route. And the you know, the reality of as a 10 year old, because I mean, how much money are we talking that he has? He so he has over a thousand dollars just in his own savings account. He probably made, I would say, about 500 this year. OK, so it's not, you know, it's amazing that a 10 year old's, you know, doing that. But, you know, it's not 60 grand we're talking about. So what I would probably do, you know, is talk to him and you and, you know, and obviously you and your husband of what are some things coming up. Like I know like when he turned 16 for a car, start saving for her. That's what my kids are doing right now. Like that's what we're pushing towards of having a savings for paying for half their car. I don't know if you guys are doing the baby steps in college. Right. So like those are usually the two big, big expenses that are realities that will be coming up in the next eight to 10 years. And then also just having some money available in general. Is always a good idea, cash, right? Like you can think of it as like a little emergency fund. So that's more all in the short term savings. But I think are probably a reality for this amount of money that we're talking about that he's doing. Now, if you did want to do something more where you're putting money in for him, you could open up, you know, and up my accounts, have a mutual fund in there or do a brokerage account. And it's kind of you're putting your money in for him. But you're saying, hey, I'm going to be probably giving him this at some point, maybe when he's 25 or something. And you on your own are saving on the side. Yeah. If that that's a possibility. But for his own money that he is earning, I would put it towards something that he's going to need in the foreseeable future, you know, the next eight years so that he can contribute to it. If you're frugal like me, you're looking for every extra dollar you can squeeze out of your budget. But when was the last time you looked at the bills you have on? Like your phone plan, you might be paying 100 bucks or more every month. And for what regulatory cost recovery charges, telco recovery fees? What even are those? And the good news is there's hope. You could be paying just 25 bucks a month if you switch to Boost Mobile. That's right. With Boost Mobile, you get unlimited wireless for twenty five dollars a month to help you save money for other more important things. And that twenty five dollar price is locked in forever. No hidden fees. No surprise charges like customer proprietary network information. Notification costs. Nope, not happening with Boost Mobile. Plus, with Boost Mobile, you get to keep your phone and your number with no long term contracts. Guys, switching to Boost Mobile is the smart move because it's one of the best ways to get more out of your budget. So go to Boost Mobile dot com slash Ramsey and make the switch today. That's Boost Mobile dot com slash Ramsey or click the link in the description. Twenty five dollars forever requires customers to remain active on Boost Mobile unlimited plan. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Up next, we have Chris in Oklahoma City. Hi, Chris. Welcome to the show. Hello. How's it going? Hi, we're doing great. How can we help? Yes, ma'am. First, I just want to say thanks for allowing me to be on the show. I am currently a single father with two beautiful little girls, and I've been facing some debt with about twenty eight thousand dollars in credit card debt that I have. Um. Have enrolled into a consolidation loan plan, and I'm also having to being able to live by paycheck to paycheck and having to take out advances to be able to survive. And I'm slowly trying to come up with a plan based on y'all's recommendations and everything, following you guys as baby steps and whatnot to get out of that problem. Firstly, trying to eliminate having to take out advances slowly. At a time to get to a point where I don't have to rely on those anymore. For sure. Is it because your income is not where it needs to be? Is did some major expense come up? Like what caused you to get to this point? So I my income is actually really, really good. I just have I have a car that I have a really high interest on. That is like one of my things that I'm having to pay for. And it's like a 13 percent interest rate. What? Oh, I owe about thirty seven thousand dollars on that left and about eight forty six a month. OK, what it's costing me and then other than that, and then the advances that I have to pay back every month, I take about a thousand, maybe, maybe a little more a month to to make up for to be able to survive, survive in a sense. Yeah. How much do you have a rent or mortgage? It's a mortgage. How much is that? My mortgage is nine seventy thirty five. And how much are you bringing in a month, a month, about anywhere from seven to eight? It differs because I'm also currently in the National Guard. OK, so so I mean, your mortgage is so low for that income, which is amazing. And then I'm, you know, an eight forty six car. No, I mean, gosh, I'm not a fan of car notes, but it could be a lot worse. And then you've got these ankle biter credit cards hanging around. Where's the mass of this money going? So I would say like the mass of it. Is well, at first, before I had had enrolled in my and to be a debt program consolidation thing, I I was having to pay minimum fees and that was crazy amount. And so I got enrolled. So I want to say about fifteen hundred a month in minimums. OK, not bad. Right. And then I had to I got enrolled into a JG Wentworth. That's who I used. And now I got that all. So I'm down to two to twenty eight thousand dollars is what they are going to try to get to where I can. So here's what I've got. I've got eight thousand a month and then I'm making I'm taking out the twelve hundred for the credit card minimums. I'm taking out the eight forty six for your car and I'm taking out the nine seventy for the mortgage. And that's leaving me with four thousand nine hundred eighty four dollars. It's basically five thousand dollars left. So food, you know. You think about that, you know, living expenses. So even if that's twenty five hundred of everything, you you should have twenty five hundred left. Do you know where it's going? Yeah. So I mean, so the thing is, is my girls, they you know, they're all involved in sports and I try to give them the best of the best and whatnot. And it it has been not not necessarily every month, just that. But I have like I have I'm trying to conquer a bad habit of. I'm overspending on things like eating out, eating out and buying, you know, things that are a necessity at the time. OK, so now we're getting somewhere. Now we're getting somewhere. Do you mind if I ask what caused you to be a single dad? Did you have a divorce? Did she pass away? Like what happened? Yes. So the mother, she decided to leave me. And yeah, we got a divorce. And so she moved away. And so now she's not really present as much anymore. So I wonder if some of that spending. Is to try to like heal that wound for them a little bit. And it's like this was really traumatic for all of us in response. I'm going to just try to, I don't know, kind of fill that void with spending. Because twenty five hundred in excess to the point of needing cash advances and things like that. It does feel a little bit extreme, I'd say. Because I mean, three. Yeah, because three thousand bucks, Chris. I mean, in ten months, three thousand dollars toward this credit card debt. You're out of credit card debt. In ten months, I'd probably just sell your car and pay the difference. Thirty seven thousand dollars. That's a lot of money going towards, you know what I mean? That's another probably year to pay that off. I mean, you could have a two year get out of debt plan. You could have a year get out of debt plan. It's kind of, I guess, you're choosing. But it only works right if Chris controls Chris. And so that's where the portion of the behavior that is so, so important to address and figure out exactly what Jade's saying. And why the need to spend, what is happening, the dopamine, like what's the thing that it's like medicating almost, right? To feel good. And probably out of a level of just survival. Like I can imagine having to, you know, being a single parent. I always say that single parents are heroes. Yes. Because if I had to do with my three kids by myself, I'm like, I would be going through Chick-fil-A, I think, every night. Just because I'm like, I don't want to cook. I'm exhausted. Right. So there's a reality to it. But I also. See you spinning out and in crisis financially that's causing so much stress. And almost this like, I would imagine a level of just like shot to the ego and dignity of being like, I have to get an advance for my work to even pay my bills. Right. And I think you're stronger than that, Chris. I think you can provide a more stable, peaceful life for you and ultimately your girls. But you're going to have to make some big decisions about what is going on inside of you. And get that healing because you will forever just be spinning in this until you can really find a way out. that root the root cause of a lot of it how old are the girls uh 10 and 9 well one's about the time 10 so okay yeah I think that I mean they're obviously at a very resilient age too and I I do think that there's areas I don't know if you have every dollar if you don't we'll hook you up with that for free and like just try it for 30 days and really get in there like really put all your numbers in and I guarantee you you're gonna see exactly what Rachel and I are talking about which is there's this huge excess of money that's really been kind of going to all these different places but you're gonna actually see oh my gosh it's at Chick-fil-a it's at Target it's on Amazon like that's where I've been spending this money then the next 30 days you can start to since you've identified it you'll be way more aware and awareness is like 50% of the battle here absolutely once you see oh my gosh I cannot believe I spent $800 on Amazon on what that's gonna be a wake-up call I think for you and then with 10 with the 9 and 10 year old I'd probably sit down and go hey guys I gotta tell you I've been I've really been spending a lot of money I've been saying yes to just about everything you've asked me for and you're not in trouble but I got I'm gonna start pulling back a little bit and here's the things that we're gonna start spending money on here's the things I'm not gonna be spending on money on coming up and just set that expectation even with them yes because if they're if they're in a habit of wanting something and going to you and you say okay yeah sure let's go get it right there's gonna be a shift in that and then you're gonna have to get back to that right just like what Jade is saying yeah and Chris every dollar they're adding new features constantly and there's a new goal feature yeah but your goal and it'll show you your intensity score yep and or your focus score and and it really does really map out like hey here's my goal and yours will be getting out of debt my goal is to get out of debt in 18 months right to keep the car and just just do it all and you're gonna be able to really see okay how much of my income is really helping me towards my goals and you're gonna get to make some really good decisions and I think it's gonna be good for you Chris I really do having that control and peace versus chaos and stress getting my identity stolen was one of the most nerve-wracking experiences of my life I thought strong passwords and two-factor authentication made me pretty hard to scam but it didn't and that was more than 10 years ago before AI made scams even trickier now criminals can fake websites clone voices and run scams in ways that are harder to detect making you more vulnerable than ever before now thankfully when my identity got stolen I had Xander ID theft protection in my corner they already had great tools to monitor things I would have never thought to watch like my home title and any bank or retirement accounts I wasn't keeping my eye on and their protection plan went way beyond just alerts they had a dedicated recovery advocate that did all the work they had to do to make sure that I was safe and that I was safe and that I had all the work of restoring my identity which would have taken me so much time and a lot of headache so I went from feeling panicked to feeling protected so don't wait until you're dealing with identity theft to get protection in place get it done today go to xander.com to protect yourself that's xander.com or click the link in the description next up we have mary in houston texas hi mary welcome to the show hi guys thank you for having me yes absolutely thanks for calling in how can we help um I I I think I'm about to be divorced and I want to find out if uh taking money out of my IRA for to pay for my credit card debt and I want to find out if I'm going to be able to get it it's a good idea oh you know so I want to have some guidance on how to prepare my finances for this okay so a divorce is that what you said mary yes yes I'm so sorry oh okay where where are you in the in the process do you have a lawyer um an attorney uh no no uh I just found out um my husband and I have been married for over 30 years and um I just found out that he's been seeing someone for about two and a half years and oh oh gosh that's devastating or he doesn't want to work on it so oh mary I am so sorry oh that's terrible how long ago did this information come out about two months two months ago okay did did he move out no no no we're still living this house um but um about four years ago we both decided that we were going to live on one income and save the other income so I'm paying for everything you know the house the cars insurance everything and we've been saving his income but um uh about like three years ago he wanted to buy land in his hometown and start building a house um and he wanted to buy land in his hometown and start building a house and uh money came out of that savings account that from his income so um I I really don't have access to see how much money we have there I know on my side I don't have any I just but you're working though everything you you do yeah I'm working okay what do you earn what about work what do you earn I make about 65,000 okay okay well and that land it's in your name as well right Mary the land that he took the savings and went and bought no it's under his name money well you guys have been married over 30 years right so my guess is you know going back to your first question I I would wait and see what happens with this divorce I wouldn't be moving a bunch of money I wouldn't be taking money from Roth IRAs I wouldn't even be paying off credit card debt or any debt everything needs just yes uh has he filed divorce or have you actually filed divorce have the papers been filed no no the papers haven't been filed but um I wanted to work you know enough but he he said no he doesn't want to yeah and uh the person that he's in lives in in his hometown so where we were building so you're still in the house with him is he still in the house or has he moved moved on no he's still in the house he's still in the house okay so honestly Mary if he I one of my things to him would be like if you want a divorce it's it sounds like it's killing you him being in the house with you but you know he's actively having a relationship with someone else and plans to be with him is that what he's saying yes okay and there's no there's no plans to just like separate spaces until that decision is made yeah we kind of make plans to separate spaces okay well what what's probably going to happen in every state has different divorce law so I do want you to go hire an attorney Mary okay I I because it's happening um yeah and so you getting ahead of it being proactive is going to be very very important and taking um kind of like a you know understanding okay here's how much we have how much is the land worth and how much is the land worth and how much is the land worth how much is what's your current home worth is it paid off uh I have five more years on it about five years how much is it worth like four uh I'm thinking it's about 280 280 okay and then what is in what's in all your retirement accounts yours and his how much do you think uh I opened a Roth IRA about um in 2022 I only put like 12,000 on it and it only has 14,000 my job doesn't offer for a 1k but he has a 401k and I'm sorry I don't know how much okay okay well I um my my fear is I don't want him move I don't want him moving any money around or getting in a place you know where he because I because in I don't know again what the law is in Texas but even if it's like 50 50 I don't know what the situation is but so these assets will be divided Mary so just because your income specifically went down you don't want to have to pay the bills and everything and he was supposed to be saving his so he's gonna have to reconcile if he's gonna choose to live on that land that he bought and that house and move in and it may be a swap where you keep your current house and he moves um I mean you know I a divorce attorney is gonna help you walk through every single level of this but but for you right now I would not make any big moves I would not be paying on debt I would probably just be stacking cash away for you Mary um and he's gonna have to reconcile if he's gonna choose to live on that he needs to be chipping in on bills right now if he's gonna be living there even if it's just for one or two months like he needs to be paying his half because you're no longer in a you're the deal is different you know yeah gosh I'm sorry this is happening to you I know it's really really tough do you have good family and friends around Mary um fortunately no um we have a grown kid that lives inside of the house already but That was it. She doesn't know. She doesn't know. Okay. Do you have a, are you involved in a good church? No. No. Okay. I would, I would look in your area and find you're going to need some just emotional support, Mary. And so whether that's a good counselor that you plug into and start to see or a good community, you know, it's not always the case. I know every church is not perfect by any means, but, you know, most of their hearts are to help those who are in need, right? And in this situation, it may not be necessarily financial for you, but you're going to need a support system and a community around you is going to be really important during this. I don't want you walking through this alone. And so plugging in somewhere, I think, is going to be a great benefit to you, Mary, in this process. And having someone on your side. That's why. Is it a good attorney who's going to be able to speak logically to you about what to do and guide you through? Because it might get, I pray it doesn't get messy, but man, I would, I want, I want you to be protected in this process. Because unless he comes back and begs for forgiveness and say he's changed his mind, he's, it sounds like the reality is happening. Oh, that's tough. Yeah. That's a tough one. And, you know, I think it makes sense. I think it makes it harder, too, when it's the other spouse and then you're still commingling and it's just kind of like, is this, you said you want a divorce, but now here we are. I think if she can be, to your words, proactive and get on top of that, because in Texas, it's not necessarily a 50-50 split. It's not in Texas. No. So it's, it's done by community property. So what, what they're viewing as community property within that marriage. So if he had. And it's been 30 years. It's been 30 years. So probably most of their stuff is, but if there was, you know, inheritance beyond that or investments that were done before. Like those are the sorts of things, but a good lawyer will help her split that out. Yes. Sit through those things. I mean, something like this, too. I mean, it's just, it's, it's true grief. I mean, you are really going to be in a grieving season. It's like a death, like that, that the marriage is, is over. And so it breaks your heart and it's, and it's so, so difficult. But Mary, I just want to tell you, you know, this is, this is going to be your next chapter of your life. And, and, and you can make it a beautiful life. And there's going to be a lot of hard days and that's okay. And I would, I would encourage you to, to be in that present and what's going on and not just push it down. But also that there's hope on the other side. And a lot of people have gone through this and they've created an incredible life for themselves. It takes a long time in a very, it's very difficult, some long days, but it is possible for you, Mary. So give us a call back if you need anything. But again, Mary, finding a good attorney, I think is going to be a really important step for you. In this reality. It's almost annual enrollment time and you wish you could save money on healthcare costs, but every year it's the same story. And you can't even control your choice of doctors. CHM is not insurance. It's a health cost-sharing ministry where members literally share each other's medical bills instead of paying into a big uncaring system. CHM programs start at just $115 a month. And while insurance premiums keep climbing, CHM isn't raising their prices this year. And you're not locked into an enrollment window either. So you can sign up right now before you watch your program. The premiums jump again. Y'all, Ramsey has trusted CHM for over 15 years because their mission is simple. Christians helping Christians cover their medical bills. Visit chministries.org slash budget and use promo code Ramsey for 50% credit towards your first month's membership. chministries.org slash budget or click the link in the description. We are mentioning having a goal with your income to know where it's going and to actually make progress. Well, every dollar helps you do that. Not only do you track your progress and you get personalized recommendations, but you're able to plug in of, hey, here's what I want to do with my income. My goal is to pay off debt. My goal is to get savings, which is majority of people that are in every dollar. That's some of their top goals just to get kickstarted into, hey, I want control of my money. And so it helps you say and see visually, hey, this is where I need my income to go to make these goals happen. And it walks with you through that. And then the budget's there to support that, to say, hey, here's some margin and let's figure out what we can do. So make sure to check out every dollar. You can start it for free by downloading it in the App Store or Google Play. All right, Jade. When it comes to. The one type of debt we don't yell at people for. Yes, mortgage. The mortgages. There is something so powerful about putting extra money towards it. And because it's usually such a large number, even something small, even a large or even a small amount of money towards it can make a massive difference. Yeah, we have. So in the baby steps, baby step six, you're putting extra. And we don't say what the frequency is. How much it has to be. But a great place to start is saying, OK, I'm going to make a 13th mortgage payment. I'm going to make one extra payment over like in a year. And that can save you no matter if you have a 15 year fixed rate, which is what we suggest. Or if you have a 30 year, it can still save some substantial amounts of interest and substantial amounts of time off of your actual loan. Yeah. So, yeah, it's pretty wild. One extra mortgage payment each year makes a massive difference. You guys. Now, we recommend a 15 year fixed rate with your payment being no more than 25%. Instead of your take home pay and a 30 year mortgage. It may lower your monthly payment. But over time, the amount of interest you pay if you stay in that loan for 30 years is just outrageous. And so getting out of debt quickly, even your mortgage is is a priority. And so we're able to thanks to our mortgage payoff calculator here. When you actually plug in and say, you know, I'm going to make one extra mortgage payment a year. And if you do that on a five hundred thousand dollar mortgage. At a six percent interest. Here's what's wild is you'd have your mortgage paid off February of twenty fifty one. And you're going to save a total in a hundred of a hundred and twenty seven thousand three hundred and seventy three dollars. Just an interest. A hundred and twenty seven thousand dollars is saved on the 30 year on the 30 year. And you're going to pay it off five years and seven months faster. And that's by just doing one mortgage payment. One extra payment every single year. Wow. That that's actually those are very shocking numbers. I was like, I know this stuff, but even I'm shocked by that. Just one extra payment. OK, so then on the 15 year fixed rate, same same amount. Five hundred thousand also at a six percent interest rate. If you make the extra payment, the 13th mortgage payment now. OK, you're saving over thirty six thousand dollars in interest and you're saving one year in 10 months off of your payment, which is pretty like. That's extreme. Yes, yes, that's extreme. So if you were ever wondering, hey, when you guys teach baby step six, how much should I put? Man, this is a really great place to start. Imagine what it would be if you did two extra mortgage payments right here. Yes. And so we know that for most people, their mortgage payment is that biggest line item in your budget. And in baby step six, your focus is let's get that paid off, because when you do the amount of wealth that you can then build, I mean, gosh, it goes off the charts. You can give generously, invest, create margin and just go. Go on to accomplish so many more money goals and find that piece in your life that you're looking for. Yeah, but those small little hacks, if you will, they can make a big difference, you guys. So, again, just making it a goal and saying, hey, we're going to do one extra mortgage payment a year once we're on baby step four, five and six. And then as your income grows and over time, you could look up in five years and be like, oh, we could do two extra. Absolutely. And be good. We could do three extra. Right. And it just starts to shrink it down. And we do find the people that are intentional about paying off their mortgage, they're paying it off in seven years. So, yeah, there's a reality to it, y'all, which is amazing. So, if you want to put your numbers in, because everyone's numbers and situations are going to be different, check out our free mortgage payoff calculator. We'll put a link down below. But plug your numbers in and mess around with it and be like, okay, how fast can I pay this off? And how much am I going to save in interest, I think, is always an encouraging thing versus sending it to the bank. I get to keep that money. All right, let's go to John in Bowling Green. Hi, John. Welcome to the show. Hey, how are y'all? How can we help? So, I'm 30 years old, and I'm married, and I have a young child. And we, my wife wants to stop working. She's been a teacher for several years now. And when I inherited a large sum of money when my father died. When I was 20. I was 15 and we, thank you. Uh, I haven't touched that money and I've just let it grow and grow and grow. And now we've gotten to a point where, uh, my wife wants to stay home and, uh, neither one of us make very much money. So I'm trying to decide whether we need to start drawing from that investment account or not, or whether I just really, uh, I'm a, I'm a youth pastor. And so I'm trying to figure out whether I need to get a second job or whether I would start drawing from that account. And I really just dig in and pour into that ministry. How much is in the account? Uh, 2.4 million. 2.4. Okay. And how much, how much do you make a year and how much is she currently making? Uh, I'm making about $40,000 a year and she's making 46. Okay. And if your income gets cut in half, cause that's basically. What's happening. How much extra money would you guys need every month to live how you're living now? Uh, about $5,000, $5,000 a month. Okay. Um, do you know what that 2.4 is invested in? Uh, mostly mutual funds. Okay. How's it, how is the rate of return been good? Like if we were to ask you, like, what are these, what's the average? Renewalized rate of return on that over the course of those years? What, what would you say? Uh, it's been about 10%. Okay. Um, you know, there's part of this, uh, this was an inheritance for you and I'm, I'm big on kind of like give, save, spend when it comes to things like that. And I think you've done a really good job of, you know, you just kind of set it over there, acted like it never existed and it's grown to this extent, which is really good. Um, on the one hand, I don't think there's anything, um, wrong with pulling small amounts of this to make that dream happen. However, there's a piece of this conversation that I do think needs to be addressed, which is, do you guys plan on having more kids, uh, saving for kids college and just like the idea of earning a livable wage to where there is margin that you can continue to grow your life outside of that money? I think that's going to give, does that make sense? Give a sense of purpose for you guys and make sure that this doesn't get dwindled beyond because you guys are only 30. And if you start to creep into taking more from it than you're earning an interest on it, which I don't know why you would, but I'm just, do you see what I'm saying? I think that's a fine word of caution. Yeah. Cause I mean, if it's, if it's bringing in 240,000, right. If, if you're right now at 2.4, 240,000 a year, and then that will, that will continue to get bigger as that principles growing, right. With compound interest. And so what you're going to be able to say is, okay, say we need $50,000 a year. Can you afford to do that? Absolutely. You guys are fine. But what Jade's saying is it starts to creep and creep and creep. And if there's a bad year with the market, right. And it only grows 5%, right. Or like the, the ups and downs are big. And so that's the reality. But, um, I do think it's good for you all as a family though, to self-sustain just in general, um, to a degree, I think that there's a level of that. That's. It's just good for your personal confidence. Yes. Yeah. There's something about that that I think is good. Um, I probably wouldn't, I, you know, if your wife wants to stay home and not teach, teaching is a big job and you guys have $2.4 million in there. Yeah. I think her staying home and do you need to go work three extra jobs, John? No, you don't. My, I think my biggest word of caution is just be aware, um, of Azure drawing out this money that we don't want to continue to inflate our lifestyle. And if something happens where we look up and we're drawing more than what we had originally talked about in five, six, seven years, there may be need to be a career change, right. Just to say, you know what, I'm going to supplement some of this with my income. Um, but I do think that her coming home, I would have zero problem with that. Absolutely. Yeah. When was the last time you felt like you had a job that you didn't want to do? When was the last time you felt confident walking into an auto repair shop? I mean, in the first place you're stressed because your car is acting janky and then you hand over your keys and hope you can trust the person who's fixing it. You deserve to feel confident that your car is going to get fixed, right. And at a fair price. That's why I'm a big fan of Christian brothers automotive. You never have to wonder if the repairs are legit with their digital vehicle inspection. You see exactly what their technicians see. So you get the honest info. You need to make smart decisions. And every repair they make is backed by their nice difference warranty. That's three years or 36,000 miles, whichever benefits you most. I take my car to Christian brothers because I don't feel stressed. I feel taken care of. And that gives me a lot of confidence when I get back on the road. So schedule your service today and get 10% off your visit at cbac.com slash Ramsey, or click the link in the description that cbac.com slash Ramsey, 10% off up to a $250 value. Next, we have Caitlyn in Toledo. Hi, Caitlyn. Welcome to the show. Hi. Hello. Hello. Well, thanks for calling in. How can we help? I figured out how we are supposed to purchase potentially two new cars while we're working through the debt snowball and also expecting our first baby in February. Oh, wow. A lot going on there, Caitlyn. Okay. So what's going on with the cars? We both drive old vehicles. I have a 2010. His is 2008. They're both 220,000 miles. I know for sure mine has about $1,500 worth of outstanding repairs that aren't. It's threatening, so we haven't put the money back into the car. And then he has an exhaust issue. He has an appointment to get it looked at. That could potentially be another $1,000. So we know that they're old. We know that the repair was coming or the replacement, but it's just not really worth it for us to put all of that money when we could be looking at new cars. But then we're also very addicted to the debt snowball right now. We're trying to get rid of as much debt before baby girl comes as we can. Yeah. I don't know if you can afford to be looking at new cars. I'm going to ask a question. I want you to give me the most honest answer that you can. Do you think that having a baby coming in February is what's causing you to look at these cars and go, I need something new? Because it sounds like they're kind of doing what old cars do, which is, you know, you got to replace them. You know, you got to repair them here and there. They've got high miles. They're not fun to look at. They're not always fun to drive. Is there something with the baby that's causing you to look at these and want to upgrade them? And why both suddenly? Or is it, can we upgrade maybe one? Yeah, there's definitely that motherly instinct where I'm like, you know, if I'm down on the side of the road and I have my baby in the back and I want something a little bit more secure, I do know neither of us are looking for new, new cars. If we were going to get something, it would be, you know, Facebook marketplace or something that just has less mileage on it. So if we were- New to you. New repairs, it would be, yeah, new to us cars. How much debt do you have? We are about 40,000. Okay. And do you guys have any money saved? Like if you're in stork mode, have you stacked up any money? We have the initial $1,000 emergency fund. And then I picked up a job as a server at a restaurant and all of the tip money for that, my cash and card tips are cashed out at the end of the night. We've been putting all of that money in a safe. And that's sitting at about 700 right now. Okay. So in this situation, I think there's a couple of variables on the table. There's the vehicles, there's the baby, there's the debt and the challenges you want to kind of tackle them all. But the truth of the matter is Caitlin, right now, the number one thing that you need to be doing honestly is pausing the baby steps and doing what you've been doing, which is stack up as much money as you can. I'd probably throw it in a high yield versus throwing it in the safe. And the goal is, you don't know. I mean, there's, like I said, it's a variable. So there's an unknown with this kid. The goal is that this baby comes home happy, healthy. You do too. But if for some reason more money is needed to be spent more time in the hospital, you want to know that there's cash there. So if I were you, all money that was going to the debt beyond minimums, let's stack that up. I would say when you get to your deductible, that's a fine time to maybe stop. Yeah. How much, how much money could you guys put away each month if it wasn't going to debt? If you were staying current on your debts, but you were just not paying extra on it, how much would be, how much could you save? How much could you stack away each month? My income's variable, but we've been consistently putting an extra thousand dollars a month on the debt. So I would say a thousand comfortably. And then we also have, before we decided to do debt snowball, we were trying to do, you know, retirement and HSA accounts and everything. So we do also have $1,200 sitting in the HSA to help with our deductible for the hospital. Okay, great. So there's the $1,200, the 700. Do you know what your deductible is? It was $1,500. I'm still on my mom's insurance. And so for my portion, it'd be $1,500, but her, She just got notified that her insurance is changing, and I think that's going up to $6,000 per person. $6,000. Because you should have $5,700 hopefully by February if you're putting $1,000 a month away and you guys already have $1,000 and an extra $700. So I would make that my goal, Caitlin, like what Jade is saying. Put just as much cash away. And then when February comes and you guys are good, you know, probably by March 1, you guys can look up and be like, okay, well, let's take all the extra that's sitting in this account and throw it at our debt. And the beautiful thing is, yeah, that could be, you know, five-ish grand that just kind of kickstarts this debt snowball back again. Or to the car. To the car, yeah. If you get to February and that thing is like not rolling, now you have $6,000 to buy a cash car. And I think that that's a fair. That's a fair statement. Like if you get to the point, obviously these 08, 2010 cars, they're not worth anything. So honestly, any repair that you do is probably obviously more than the car is worth. So you do hit a point where you have to decide when it starts getting ridiculous. And if you've hit that point and you've been like, gosh, we did the $1,000 repair and now here comes another $1,000, yeah, it's time to move on. But that kind of, it's like that's on your honor, you know. Yeah, that's right. You know when that time has come. If you've done $1,000 in the year and maybe it's $1,000 a year, that's not that bad. I'd probably hang on to it if you can. But if it's getting like to be every couple months, you're shelling out hundreds and hundreds, then it's time to move on. Yeah, probably time to sell. So yeah, so our order, Caitlin, is stork mode first and foremost. And then any extra money you have after that, if one of the cars is just done-zo, then that would be time to replace the car. Which means that money, you know, instead of going to debt, is going to replace the car. But that's okay because it's a need, having transportation. And it'll just take you guys a little bit longer to pay off that debt. But that's okay. You're going to get there. And I know you guys are motivated. So instead of, you know, paying it off in, I don't know, a year and a half and maybe two and a half years through this whole journey of having to replace, you know, two cars, having a baby in the middle of it. And we get a lot of people that do a debt-free scream. And they're like, yeah, in the middle of it, we had medical stuff. We had this. We had a cash flow renovation because our pipes burst. Or like, you know what I mean? Life, man. It's life, yes. Yeah. But I'm proud of you guys and glad that you are focused. All right. Let's go to Chris in Milwaukee. Hi, Chris. Welcome to the show. Hello. Thanks for taking my call, ladies. Yes. How can we help? I'm a middle-aged 55-year-old, you know, looking to retire maybe a little earlier than 65, probably, you know, like early 60s. But we are looking at possibly putting an in-ground pool in. And my heart tells me go for it. But yeah. I'm just making sure that this is not a bad financial decision for us. How much will it be? It's going to cost about $150,000 all in. Okay. And how much do you guys have? How much is your net worth? Liquid right now. Like, well, I would say $225,000 I have in a $225,000 I have available cash. I have $1.1 in a 401k. And then we would. We're selling some property that we have that would cover the cost of the pool. So that was kind of what our thing was. Oh, gotcha. We would sell this little lake property that we have and then put it into a pool in our backyard so that we can have family and friends come over, grandkids come over and enjoy it. I actually like that. Is there any other debt that we should know about? No. My house was free and clear. No car debt. No credit card debt. That's great. Then I say. We live pretty responsibly, you know. I say enjoy the new pool. Okay. Yeah. That's amazing. I've been kind of teeter-tottering back and forth and not sure if this is the right financial decision. No, I think you're fine. I mean, yeah. Number one, it's covered. You got $225,000 available to you now. $1.1 sitting in the bank. And if you don't touch it for seven years, which might be a good goal, it'll double. So you'll have $2.2 as you go into retirement. How much money do you make now? This year is a little more, but I'd probably average about $200,000. Okay. And are you married? I am. Yes. What does he make? My husband's retired. Oh, he's retired. He's retired. What's he have in his retirement? Not very much. How much? 60. Okay. So, I mean, as long as you both. Know that going into retirement, you may have to support each other, which I would recommend combining your efforts on that. And I mean, for you with that great income, since everything's paid off, I would be investing above the 15% that we recommend just so that you can bolster that, that nest egg even more for your goal of retiring at 62 or, you know, early sixties. So, I mean, I think that's a great way to start your retirement. I am Rachel Cruz here with Jade Warshaw, and we are answering your questions at 888-825-5225. This show doesn't happen without you all, so thank you for calling in and asking your questions. We are here to help. All right, we have Amy on the line, and she is in Dallas, Texas. Hi, Amy. Welcome to the show. Hi. Hello, hello. Thanks for calling in. How can we help? Well, I'm engaged for my second marriage, and we're in the process of building our families and purchasing a home together for our six kids. My fiance has a rough financial past, but we did take Financial Peace University together. We recently combined our finances, But I discovered some small debts that he was hiding and being untruthful about. This made me think, should we move forward with a home purchase right now? And are adults that have had some serious financial mistakes in the past capable of true change? Oh, well, yes, I do think that 100 percent mature adults specifically are capable of true change and adults who want to change 100 percent are capable of that. My question would be my questions are around how much was the debt that he was hiding? Not much. It was about fifteen hundred dollars in a buy now pay later. type thing that was actually being deducted from his paycheck which is why i didn't see it and then five hundred dollars on a high interest credit card okay and then my next question is um you guys are engaged but you're not married yet but it sounds like there's a lot of visibility into each other's um finances so my i guess my question is was he intentionally hiding it like Like, was he, I'm not going to tell her this, or was he just in his financial life and was like, I'm in my money doing my own money because I'm not married, and you just didn't know about it? He was on the $500 credit card. He was intentionally hiding that. Okay. The other one, he said he wasn't hiding it, but he didn't really think of it. it had been coming out of his, um, paycheck and he did not, he hadn't made any new purchases on it. Okay. Wow. A buy now pay later going directly from your paycheck. That's wild. Um, what was his reasoning for hiding the credit card? Did he tell you? Um, yes. So going further, he was introduced to an app where, um, I'm not sure what it's called. Um, you kind of make bets on, let's say tennis or different things like that. Yes. So, um, he had started doing that. He ended up sharing it with me and it just wasn't fully transparent. He did delete the app because he was like wow that's dangerous and he was kind of like immediately addicted to it yeah yeah the number one growing addiction right now okay so he felt a little shame hid that but then came clean deleted the app um the next thing then is now you're feeling some trepidation on whether you want to buy a house with this guy because of this or is it just simply because we're not married yet and it's not time to buy a house together. Which one is playing a bigger role? We definitely want to buy a house together because with the children we're struggling with, we have two separate homes and we're wanting for everyone to be in one household to be able to take care of everybody together. But it's more just the past. I mean, his past includes bankruptcies, repossessions, foreclosures. closures so it's big things and um i think i was feeling good about everything but then just with the recent yeah um discovery of those debts i was just very nervous i mean how long have you been how long have you dated and how long have you been engaged um we've been dating for two years and we've only been engaged for a month okay and right now you're living separately right yes i i gotta tell you i would because there's kids involved i would continue to live separately until you're married that's a huge i would advise that even if you didn't have children but especially since you do and especially since there are some major um there are some yeah trust broken trust yep uh when's the wedding amy we're trying to figure that out um we were his son might be going into the military so we're trying to figure out we want to do it before he goes off and so um we're trying to figure it out we're thinking probably this spring we're going to do something simple but also since we're now you know this is our second um marriage we don't need anything paper this on our own so yeah i would yeah and i know you you said that we've combined finance all that i i wouldn't wear that i would keep separate i would not buy a house with someone i'm not legally married to that's going to be a mess amy and i think there's it's okay to slow it down like there's no there's no rush for you guys um especially now that a little bit of trust has been broken and i don't know what you need from him to rebuild and him taking the steps to rebuild some of that trust but um but but this is if i'm him this is like a one it's the part of my life that i'm not really great at i've made some big mistakes foreclosures you know it caused all of this turmoil and now i'm about to get married to a woman and you know like if i'm him that's what i'm thinking of like i have to take care of her and make sure that everything is good i'm going to be above par i'm going to be extra extra transparent i'm going to be extra cautious because this is a very sensitive subject over here and i'm going to i'm going to tread so lightly so the fact that he's not going to be able to do that i'm going to be able to do that he went and got a credit card and you know started sports betting i'm like man i mean of course it's not you know it's not fifty thousand dollars but it's not a good sign but it's not a good sign it's just a it's a it's a lack of of character and i don't know if you guys have talked about money in that way how i just kind of described yeah how he needs to so safely hold this subject um and if y'all have any broke that trust i'm like man have you amy sorry can you ask that again have you guys had clear discussions on kind of like financial expectations on what the marriage is going to look like are we going to do debt are we going to have full transparency like have you do you feel like there was a fair enough expectation set that his actions went against that yes um yes definitely i mean we have our all of our finances on spreadsheets we have planned um everything just going through financial peace we did that last year okay um we reason we combined finances which i feel like it's been good because it did change his habits and spending habits dramatically right but that's it's it's there's a protection there this is somebody you're not married to and it's also somebody i mean let's be honest you're still he you're both still in the audition phase like you're not married yet and to rachel's point this is the time to be on your best best good behavior and he's not done that and so this is a good time to be where you're at which is we're engaged we don't combine our money we don't buy a house together and let's walk the steps in order take our time and make sure everybody's protected and for you to feel good amy that's like the number one thing in this yeah you work your butt off for your money but your money's never going to return the favor if all you do is hope for the best if you're ready to learn how to make your money work for you check out the smart vester program smart vester can help you find advisors who specialize in retirement planning charitable giving advanced investing strategies and more whatever your goals your pro will take the time to explain your options so you never have to invest in anything you don't understand head to ramsey solutions.com slash smart vester to get connected ramsey solutions is a paid non-client promoter of participating pros learn more at ramsey solutions.com slash smart vester up next we have tony in san antonio hi tony welcome to the show hello thank you for having me yes absolutely thanks for calling in how can we help so right now i'm working in a warehouse making about 20 bucks an hour but i want to start getting into maybe flipping houses and wondering if i should quit my job and get a loan and go all in oh that was it that went that went fast i wasn't expecting that sorry um okay okay i love the idea of you being interested in real estate i like the idea of you being interested in flipping houses i don't love the idea of you going all in going into debt on something you've absolutely i'm assuming never done before and no yes and creating so much risk tony so now you're gonna probably see some great uh social media clips or youtube clips of people doing this like i make five hundred thousand dollars every month you know doing this i'm telling you this is one of the riskiest things that you can do it really is because depending on how the market is depending on contractors depending on your experience depending on what you find in the flip how much you pay for i mean it can start to snowball so quickly into disaster lands unless you know what you're doing and you don't have the financial risk which means you're doing it with cash so um so i think the bigger question is what does tony want to do with his life that's actually going to give him strength and peace versus a lot of risk and a lot of stress right and so that career change i think is a good pivot but i don't know if it's all i don't think a career change um for going into debt is going to be a smart move yeah i'm curious tony what caused you to and you can be totally honest because it'll help us craft our answer what caused you to choose flipping in your mind is that i can make a lot of money fast is it i've just always loved real estate like what was the thing that kind of caught your attention about that that way we can kind of help in that direction fast say it again uh i guess just trying to make money fast like buy it uh work on it in like three to six months and then flip it for maybe double or okay so making a lot of money fast is important to you so now i can ask why are you feeling strained financially are you feeling behind are you feeling like you've got debt that you need to pay off and you need big chunks what's informing that um i've been working in a warehouse almost for seven years and i just it's getting boring it's killing my body i want something that's not so hard and i killing myself every day fair enough how old are you tony i'm about to be 25 and like three weeks okay great yeah did you uh go to college by chance no no okay i was gonna see what your degree was in um what do you what do you enjoy in life i'm just wondering from like a career standpoint what is a type of field that you could get into um that sounds exciting to you that sounds really fun working with my hands i like fixing things if there's a problem i'd like to fix it myself if i can yeah are you are you good at like if something's broken like a i don't know the dryer or something or the dishwasher are you are you already naturally pretty good at knowing things like appliances and different stuff yes um i'll take it apart i'll mess with it and try to fix it the best i can if not well then go to youtube and see what youtube has to say yeah i wonder if the trade like different trades are a good route for you like i wonder if you'd be interested in plumbing or like you know i don't know i don't know if you're interested in plumbing or electricity or anything that you can put something together make sure it works properly install it like something like that is is that on or you're like nah that's not quite it no not really i kind of because like i've been working in the warehouse so long i kind of wanted to start something on my own doesn't have to be flipping houses specifically but something i can work at my pace because i have a son too okay i'm with him okay so something that you could be self-employed potentially and so i think this is all really really good and then i think knowing that all of this kind of has a bit of a long tail on it so let's just pretend you did decide i'm just making this up let's pretend you're like you know what like i do i the trade i would gravitate most to would be plumbing and let's say you did you know you got your license you worked for a company for a while but then were able to build your own business and it's something that you own and operate and do on your time and grow at your pace, that seems like something that would fit you. And I think that there's a pathway for that, but I think there's a part of that in knowing this is going to take time to build. It's not going to happen in one year. It's maybe a three-year play in being able to commit to something that's going to be maybe a two or three, maybe even a five-year play to get to where it is that you want to ultimately be, which is owning something of your own and operating that. Right. And just knowing there's going to be some grind years in that. Ken Coleman has a really great resource. It's called Find the Work You're Wired to Do. Actually, it's an assessment. So you take an assessment. It'll help you define kind of the things that you're passionate about, the things that really make you tick, and then it'll give you a result and you can take that result and it'll give you options of work that you're wired to do. Yeah. And so I think that'd be a really good resource for you. And just, I would say to you, Tony, commit to that journey. Like this is a journey of you finding yourself and what you want to contribute and what that unique contribution is that you want to make to the world. Yeah. And Tony, I do want to encourage you, you know, this, it's so easy to fall into this mindset of, I want something very quickly, right? Whether it's the business Jade kind of just laid out. It's like, well, I want that in one year, or I want to make money, a lot of money really fast. There is a caution to a mindset that it's almost this, you know, the quote unquote, get rich quick schemes. This thing that looks so good and so, oh, so doable. And it's going to be so fast and I'm going to do it. The best things in life, Tony, I promise are the things that are slow. And we always kind of say here at Ramsey that we don't sell microwaves. We sell crockpots with building wealth. It takes a long time. to do it with stability and do it with wisdom, it does not usually happen fast. And so I just want to caution you in that in anything in life, whether it's business or money, relationships, I mean, anything, anything that is really, really good and that has stability to it usually takes a long time to build. And that's very frustrating. You can hear you because you're like, I have a son. I've been in this dang warehouse. I'm so tired of it. Like I want to be successful. I want to win. Like all of that is, it is so good. But also it could, you could easily with that mentality fall into a trap and create a lot of chaos in your life that would not be good for you. And so it's not the exciting path, if you will, but it is the more stable path of going slow. And so I would probably stay in your job. I would make the most of what you do. Right now, and then look up some, some trade, you know, if it is a trade thing or Tony, I even thought, at least as a side business for a second, you know, there's so many apps now for handyman. Like if you can do things and go into people's homes and fix stuff, people will pay good money to do that. So I'm wondering if there's a side of that, that you're really good at, you can start making some income on the side there, maybe while you still keep your full-time job, just because that's the responsible thing right now. And then get yourself in a position, whether it's you're in trade school or maybe Ken's book kind of opens up your eyes to a whole new avenue, you weren't thinking, um, and you step into something else, but I just would not be urgent about it. Okay. And I'll go, I'll go a step further and give you, so your first homework was the Ken Coleman book, but the next homework, I think that you need to put some intentionality behind, what does it look like that once a week you sit down and you spend time fleshing that out. And it's not just something you kind of think about sometimes on the way to work. I'd like to do something different. Maybe it's flip houses, but like spend time drafting out a plan. And do you see what I'm saying? And, and invest in, invest in yourself. And the first part of that is just literally spending the time to think and have ideas and write them out and write the, the, the drawbacks to it and the things that would be good about it and what you think the timeline would be and research ideas really put time into that. And that's going to give you excitement while you're working this job that you don't really like. Okay. Awesome, Tony. Well, I, I appreciate your attitude of, of wanting more, right? It's like this idea of like, I, I, I don't want to be just stagnant. I want some growth in area, you know, areas of your life. And that is not a bad thing. You just have to direct it in a path that again, is going to create stability and not chaos. The Ramsey cash giveaway is back. And this year we're giving one lucky winner $10,000 in cash. Plus we're giving away $500 every week. Just imagine what $10,000 of breathing room could mean for your family this Christmas. Come back and enter daily for more chances to win. And there's no purchase necessary. Just go to ramseysolutions.com slash giveaway. That's ramseysolutions.com slash giveaway. One of the most memorable weeks last year, Jade was on the live like no one else. Ramsey cruise. I knew you're going to say that. I know. So we actually have another one coming up you all this coming March here in a couple of months. And we are going to set sail in the, is it the Western Caribbean this time? And this is one of the most memorable weeks of our life. And we're going to have the most fun weeks, honestly, that you can have, because we talk about living like no one else, sacrificing, saying no, doing what you can to get out of debt and having a fully funded emergency fund. And then once you're on baby steps for and beyond, it is time to celebrate and it's time to enjoy your money. And so we have created this whole experience, a week long Caribbean cruise. We have the entire ship. So everyone on the ship is Ramsey people. Yes. Which means the nicest, kindest, most wonderful people are there. Like-minded. They are. Yes. And so we are the, I guess you could say we're part of the entertainment, Jade. We are. I won't be singing. You might. I might. I'm hosting karaoke apparently. Oh, there you go. There you go. Yeah, me and George. But we'll be having content every night. It'll be Dave Ramsey, myself, Jade, Dr. John Deloney, George Camel. We will all be there and on the boat for the week. And so come hang out, have a little vacation and learn. Learn some stuff too. It's kind of different. It's a different experience because there is that content piece that we continue to talk about and what to do with your life and your money past baby step four. Yeah, I'm actually excited. I met with John and I were meeting earlier this week discussing our, just like what we want to deliver to you guys. And it's number one, it's brand new. And I think it's really going to be helpful. So I'm excited. It won't be things that you've heard us say before. It won't be something that you could, you know, pick up watching the show. It'll be special for you. Absolutely. Yep. So some great memories are made on the live like no one else cruise. So if you're on baby steps for beyond again, join us March 14th through the 21st, 2027 book your cabin now at Ramsey solutions.com slash events. All right, let's go to Jesse in Fort Lauderdale. Hi, Jesse, welcome to the show. Thank you so much for having me. Yes. Thank you for calling in. How can we help? I'm actually calling because I just, um, recently listened to the show and I was like, the total money makeover book by Dave Ramsey. And I have been trying to get out of debt for some time now. Um, I just recently listened to the book and I just want to know what's the best way to be able to start the baby steps when I have been so, um, dependent on buy now pay later apps and taking advances from my paychecks. Um, you know, I don't have any kids. I really don't have much holding me back. And it's not about working. Cause I do, I work full time and I actually, um, just recently started applying for part-time jobs, but I'm just not really sure where to start when I have debt up to my head. Yeah. I mean, it does sound like, so there's, there's two parts to the equation and it sounds very, very simple and it's simple to understand, but can be harder to do. So I think you understand the part that you've got your income and when it comes to paying debt and starting the baby steps, there's two things you can do. You can increase your income, which is sounds like you're doing by getting more, more work, part-time work, side hustle work, uh, or you can cut back areas in your budget. And generally when people are feeling strapped to the extent of having to do advances, having to do buy now pay later, there's usually an income part that has to be addressed. And so for you, you've got the part-time work, but I'd also be looking and going, okay, the full-time job is that worth the 40 plus hours that I'm putting into it for the pay that it's giving me? Because I'm not going to be able to do it. I'm not going to be able to do it. I'm not You've got to make sure, do you see what I'm saying? So what are you earning from your main job? 70,000 salary yearly. Okay. So that's great. And then you look at your budget and go, okay, what are the things that I need to cut out that were causing me as a single person to get to the point that I'm doing buy now pay later advances? I'm taking on more debts. What's going on there? Um, like, like Ramsey says, it's always the car, you know, unfortunately I had, um, had to get out of my car, my previous car, because it was giving me too much problems. And so I ended up having to get a loan and getting a finance car. Okay. How much is it? $36,000. Okay. And my monthly payments are $788. Okay. Um, insurance alone is almost $400. So, you know, between that and then my rent is $1,630. You know, that's, that's a pretty big chunk of my monthly income. What's your take home from the 70? Um, from the 70 monthly take home is $4,300. Okay. And are you doing any investing? No. Okay. So you have a lot of car. Yeah, you do. You're right on that kind of border, Jesse. Have you looked at how much it's, how much it's worth if you sold it? Um, I got it. It's a 2025. So I had gotten it because that's the only one that's I was able to get to. Unfortunately, my credit is not at the best. Um, so the value, I know they go down, you know, every year. So the value of the car isn't even worth, but the actual car, sure. Um, what I owe on it, what is it worth? Do you know? I want to say anywhere from 15 to 25 at this point. No. And one year, one year. Yeah. I mean, I've, I drive about an hour to and from work. So I put, I put quite some mileage on it already. How much? Uh, I am currently, I want to say 35,000 miles. I want you to double check the value of it. If you haven't gone on Kelly blue book and look at, look up private sale just to double check that. And I don't know, did you roll anything negative into it? I did have some negative equity, but I'm saying about $4,000 for my previous car. Okay. That'll do it. Yeah, that will do it. Okay. All right. So we've got the car 36,000. Obviously we know about the buy now pay later. Is there another, is there that's eating your lunch? 15,000 student loans with growing interest. Um, and about less than $5,000 in credit card loan. I'm not, I wasn't too big on credit cards when I was younger. Um, and I kind of messed up with my credit with the few that I did have. So the balances aren't on those are pretty low. Okay. And what's the total of them? Um, I want to, I don't have an exact total. I want to say between three and 5,000. Okay. On credit cards. Okay. So, I mean, I think you figured out the name of the game, which is, the only way to pay off debt is with income. And unfortunately I wish it were an easier answer. There's just not an easy bucket or an easy button for you to press. You've got to just work and work. So with this part-time job, how much will that add to the 4,300 that you're already bringing in? Um, it'll add about another 800 a month, maybe 1100 the most, depending on how many hours I'm able to get. Do you think you're able to squeeze out a thousand out of your, your normal job and put 2000 towards this debt every month? I'm hoping to. Yeah. What's your every dollar budget say? What, like what's your margin with the 4,300? I've been playing with my every, um, every dollar budget because I haven't had a set one just yet. Seeing as I've been trying to get caught up on my current bills in order to be able to set up that budget. Um, you know, unfortunately my car is a few months behind on payments. I've been trying to catch up on those payments. I want to stop you because that's exactly the time that you need the budget. If you're not able to get caught up on those payments, you're not able to I gotta get caught up. I gotta make everything right before I make my budget. That's it's not that at all. It's going to help you. Yes. Yeah. The budget will help you get on top of those payments that you're behind on. So all you would do is where it says what you owe. That's the number that you would plug in as, as you're doing your budget that month, let's pretend you owe, you know, $700 to buy now pay later. You would just plug that in the budget. And then you're going to actually be able to see, do I have the margin? Can I live the life I've been living and still have the margin to do that? And then you're going to be able to see, do I have the margin? If not, now I get to choose which categories need to shrink in order to make that happen. So my biggest homework to you, Jesse would be tonight, make the every dollar budget. Don't put it off because it truly is. If you set an hour aside tonight and make this plan, it's going to give you such clarity to know, all right, no wonder it's been taking me a long time. I'm setting these goals just verbally. But when I look at my money, the money's actually not there to do it. But if you make the budget, you'll be able to see, okay, this is the plan that I have to follow in order to make this happen. I cannot stress enough how clutch the budget is and how necessary it is for you to even just get that first step of getting everything even. And to know exactly where everything is. And to definitely understand, because I'm huge on budgets as well. I don't mind writing everything down, but I always feel like something just comes up, you know, unfortunately, whether it's a vet bill, whether it's a car, you know, expense or something. Well, you got to have the $1,000 saved first. I mean, if you don't have the $1,000 saved, you're going to have to have the $1,000 saved. If you don't have the $1,000, you got to do that, bar none. Absolutely. So that emergency fund is going to be there. But also in your budget, you need to write a miscellaneous category. It doesn't need to be huge, but there needs to be some money in there. So when things come, it catches it and it doesn't screw up the whole budget. But hey, stay on the line. Christian's going to pick up and we're going to give you every dollar and we're going to give you the subscription version for free for a year and help you walk through this, Jessie. But we're here for you. Give us a call. Back. People ask me all the time, George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional and more effective spending. So if you're a budgeter, you're going to have to cut back and save more money. How much money are we talking? Well, the average EveryDollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download EveryDollar for free and start saving more money right now. So if you're a budgeter, you're going to get a clear picture of your spending. And if you're a I've seen that in action. Yeah, I could have. I've witnessed that before. We've seen that. We've seen that. Oh, my gosh. Oh, it's one of our go-to proverbs, though. Yeah, for sure. In another translation, it's in a, yeah, in the house of the wise, there are stores of choice food and oil. A foolish man devours all he has. Wisdom, y'all, from Solomon. Don't spend and use everything you have. Save. Saving is a good thing. All right, let's go to, oh, no, I'm going to butcher this. Leilani, I'm going to say, in Honolulu, Hawaii. So magical. Hi. Did I butcher your name or did I get it somewhat right? No, you said it correctly. Beautiful. Oh, good. Good, good, good. It's beautiful. Okay, how can we help? So my main question is, I retired from the military. I don't have a lot of savings, but I have about $30,000 in a TSP account. I turn 65 next year. So I'm really, really late in the game. But I'm wondering, should I just turn it over to a Roth IRA or should I use it to pay it on my debt? Well, I'd say first and foremost, you're going to want to, yeah, take it, that conversion, not to a Roth IRA, but a traditional IRA. Oh, a traditional? Okay. Yeah, because with the Roth, you'll have to pay taxes on it. And we don't really recommend doing that until you are completely debt-free, including your house. And so just rolling it over to a traditional IRA is what you're going to do. Okay. But I probably would do. You're how old again? I'm sorry, what'd you say? I'm about to be 65. 65, okay. In a few months, yeah. So you'll be able to, and you're not currently working for the government now, right? No, I am not. Okay. So yeah, I'd probably just roll it over to a traditional IRA and you'll have control over those investments and figure out what to do. What are you going to do in retirement? Do you know? Well, I have a lot of debt. I don't, own a home. I've owned and sold several homes throughout my life, but nothing really locked in. I retired with about 10,000 monthly income, but I have about 111,000 in debt. So I got a little retirement job that pays me about 1,500 extra a month. And I'm using that to try to clear out my baby step two at this late time in my age, but that's what I'm doing right now. Well, the good news is you've got a good, retirement income plus the side job. Is it just you or do you have a spouse? Is there anybody with you? I do have a spouse, but my spouse is definitely not interested in paying down debt at this time. So that's an ongoing conversation and not ideal, but I'm doing what I can with what I've got. Yeah. And that's good. So the 110, is that between the both of you, or is that just your debt? That's just, that's just my debt. Okay. The, the other debt is, about, I think it's about 99,000 in debt, which includes IRS and credit card debt for my spouse. And the income on my spouse's side is about $5,000. So I know we could wipe out our combined debt. Yeah. Well, I think probably in a few years, but I mean, I think you're right. I keep having those conversations with him and hope that he gets on the same page. But in the meantime, I would be doing what I can do to solve this problem. And there's a part of that where if you start to make progress, which you will, and he starts to see, man, my wife over here without my help paid off $110,000 of debt. He ought to feel sheepish. He ought to feel some type of way for not jumping in. Yes, for sure. But yeah. And I think from this point on really saying, okay, what can I do? What can I can control? And at this point in life too, it's like, okay, there's only so much, right? Not everybody's willing to change. That's right. But what am I able to do? To help the progress on my side. So my spouse sees it. All right. Let's go to Michael in Buffalo. Hi, Michael. Welcome to the show. Hi, thanks for having me. Yeah, absolutely. How can we help? So basically I have a massive student loan debt. So I am a dentist. So I took out a lot of, a lot of student loans. So I'm kind of just trying to decide what I'm going to do. I'm going to do a lot of things. So I'm kind of just trying to decide what's the best way to handle them. I've been thinking about doing the public student loan forgiveness because I do apparently work for the government. So I didn't know if that was the smartest way to go or not. I mean, how much student loans did you take out? So right now in total, it's about 390,000. And so you said you're working for the government. Do you make more? I mean, would you make more working? Or you want to work for the government to get the loan? Is that what you said? Yeah. So yeah, the loan forgiveness is like a 10 year. Yeah. Yeah. But you said you have to work for the government in order to get that, right? Did I mishear that? Yeah. So just, I would caution you. I never suggest that. Nobody here at Ramsey suggests that. And the reason is if you dig in and do the research on that, the forgiveness rate is so very low. It's like 97% not forgiven. And it's like, oh, I'm going to do this. I'm going to do this. It's like only 1% to 3% actually goes through the PSLF is notoriously low, low, low, low, very low percentage, 1% to 3%. There will be two presidents later and who knows? Yeah. I mean, honestly, there's just a lot that can change really quickly. And that's just so much to leave in somebody else's hands. Michael, how much are you making now? It's $200,000 a year. Yeah. I mean, gosh. Well, let's get into it. Could we act like we. Make 80? Is it just you? No. So I am married with four kids. Okay. Okay. Does she work? No. Okay. Could you live on 100? I mean, I feel like plenty of people call in here. Oh, yeah. Family of four, they make $100,000. And just quick napkin math say, it's going to take me three years to do this. If we tighten everything up and maybe my wife works part-time, maybe I. Pick up a little something? Or you get. Yeah. And hopefully your income goes up too over those years and be throwing everything at it. I mean, you could be out of debt in three to four years if you really, really buckle down and did it, right? Versus going and working somewhere. That you don't want to be. That you don't want to be for 10 years. Yeah. Yeah. I mean, our margin's pretty tight. It is at $200,000. It's tight? Yeah. Why? Your house? My mortgage is pretty high as well. It's about $3,500 a month. So I think you've done something here, and I'm just going to call it out because these are the conversations you're going to have to have with your wife. You had this career path that's like, awesome, we're going to make a lot of money. We're going to make $200,000. And you went out and took out a mortgage based on that and didn't factor in the fact that there's an almost $400,000 mess here that would need to be cleaned up. And so that's what's kind of got you shot in the foot right now is an almost $4,000. Fair enough. Right. So, I mean, that's going to eat into the sacrifice level here, big time. Mm-hmm. Right. How old are you, Michael? 29. Okay. Yeah. We see this all the time with doctors, lawyers, dentists. I mean, you take out so much in student loan debt, and you make a great income, and you act like you're making a great income, right? Right. You actually run the numbers. You're broke, right? You're $400,000 in the hole. And so, yeah, there's going to – you know, you can do what you want. I think our way will feel much – you'll feel more pain in the short term for a short amount of time. Yeah. And then for the rest of your life, you're free, and you can do whatever you want. And so there's short-term sacrifice involved. But going from a lifestyle of being used to $200,000 – Yeah. It's going to – you're going to feel it. But, again, it's kind of that – it's that choice. It's the choice you make in life of like, okay, am I going to set myself up well for the future and make these sacrifices now, and it's not going to be fun? We look like we've been doing so good. They need to go backwards. And you have to go backwards, and that's a hard ego shot, right? That means, you know, driving different cars possibly, not going on vacation, not living the life you've lived, but only for three years, get this cleaned up, and then the rest of your life, you're debt-free. But that may be a hard sell. It's a hard sell. It's a hard sell. All right, Jade, great show. Thanks to everyone in the booth. And thank you all for listening. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.