You Can't Stumble Your Way Into Financial Freedom

Doing nothing with your Medicare plan could cost you hundreds or even thousands next year. Chapter can help you avoid that. Go to AskChapter.org slash Ramsey. Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Rachel Cruz, Ramsey personality, number one best-selling author, co-host of the Smart Money Happy Hour on the Ramsey Networks, and my daughter is my co-host today. Open phones at 888-825-5225. Hernan is with us in Tampa. Hi, Hernan. How are you? Hey, Dave. How are you? Better than I deserve. What's up? Amazing. I'm 25. I just moved to Tampa, Florida. I'm making $2,000 a month across three jobs, and I want to build an online coaching business. I have 3K in savings, and I don't know if I should just be saving first or investing everything into building my business right now. Okay. Tell me about the coaching. What are you. What are you coaching people to do? A fitness hybrid training, where it's just running and lifting weights at the same time. Okay. And brand differentiate yourself for me, meaning if I'm your customer, which I'm probably not, Rachel might be, but if I'm your customer, why am I talking to you online rather than the 8,000 other people on YouTube? 20%. Yeah. Well, I'm 25 years old, and I've struggled a lot with being consistent in the gym and started a 75-hour journey, which has sparked my passion again for it. I know the struggles of being on and off with the gym and being able to get back into it and not overwhelm yourself with everything, because it is an overwhelming journey of getting into shape. So you have a story of starting and stopping and failure that other people can empathize with, and you're going to use that to connect to them and help them on their journey. Did I get that right? Yes. Good. Let me tell you what's beautiful about this. You articulated a brand position fabulously. It didn't take you a second. You didn't have to think about it. You spit it out. You have spent time thinking about this, and it has paid off. So really well done. Is part of the 2,000 you're making every month doing this in person, this kind of training, or is it just like odd jobs? Is it you're doing just to pay bills? No, it's just odd jobs to pay bills. Okay. So you're not making any money on this yet? No, this is starting fresh. Okay. So how will you acquire your customers? Through my ideas through Instagram, through posting content online, giving them value, and hopefully getting my first two to three clients just to get some testimonials out of them to have proof. Okay. So is there, I mean, in my mind, you working out and creating content for Instagram, if you have a phone, is free. You don't need to spend money to do that until you get customers. And when you get customers, they give you money. Then there may be a couple of things you could do to push some of those reels or enhance some of those reels or something to get people to see them that aren't seeing them yet. Yeah. How much is the online? The online? Online coaching. How much are you charging? I don't have a price yet, honestly. It's starting to build in now, but it honestly ranges around $1,000 to $2,000, I believe, depending on how long you want to coach them for or they want you to coach them. Okay. And why are you not working in a gym as a personal trainer? Honestly, Dave, I did try to go to the gym once and I didn't get a job. I didn't get a job. I didn't get a call back. And that's just honestly the truth. I haven't gone back to doing it. Yeah. You're going to have more than one rejection with customers the rest of your life. So I think it's a good base of operation for you to be around people doing the stuff you're doing all day long. And it also gives you a place to, you know, to shoot some of your Instagram stuff and show some examples rather than just in your garage. And by the way, you need a job because you're not making any money. And it's going to be a while before this actually monetizes. So I want you to go do this. I don't think it's going to cost you much money. I don't think investing money into the business is the answer. I think getting an income while you grow this side hustle into a business. Yeah. And just be cautious because there's a lot of chatter on social media about, you know, buy my course on how to build a course. And of course, it's all this, you know, a lot of courses. And some people make great money doing it. But don't fall for something that feels too good to be true as well, because there's a lot of effort and work that goes into it. So move at the speed of cash, Hernan. Don't go into debt for any of this. And if you can, before you purchase, you know, someone else helping you in any level of investment in the business, I would do my due diligence to make sure that what I am buying or purchasing is going to help me and has helped other people. Because I think there's a formula. There's a smart formula. Yeah, but I really wouldn't do any of that until you're making a bunch of money. And right now, what you have is some really good theories. You have a great brand position. I told you that. But you've made no money yet. You have no proof that this is anything but a theory. So the next stage, and when we're launching a product at Ramsey, whether it's a coaching product, a digital product or whatever, we want to see some social proof. And social proof is people tell you they will do all kinds of things. But when you actually ask them for their money, that's when you find out if you got something or not. Because they're not going to give you their money until you have proven value to them. People trade money for time and value. That's all they trade it for. And so, you know, when you start actually getting money on your theory, now it's not a theory anymore. It's a business. But you haven't got a business yet. Right now, you've got a theory. And I think you might have one. And I want you to go do it. But while you're doing on this, to give yourself some patience, you need to be making some money at a full-time job. And I love having a full-time job in the vicinity of what I'm doing. What you're going to be doing. Rather than I'm going to go work at Costco and I'm working on my other thing, my personal trainer coaching thing on the side. No, I want you to be in the training business. Be around trainers. Be around talking to people about this. Be all up in this industry. Be learning from people that are doing it wrong. Find you some anti-mentors. You know, find you some mentors. And so, yeah, you need to go to work at a gym and you need to keep, there's a bazillion gyms in Tampa, Florida. Somebody will hire you as a personal trainer. If you tell them your story and, you know, you may learn some techniques of teaching while you're working there that will help you further this theory of yours into an actual business. So that's what I would tell you to do. But no, I would not spend any money growing this business to Rachel's point right now because you don't have a business yet. You have a theory. And I don't want to pay somebody to take my theory to market. You take your theory to market. That's your job. And you can do it. I really believe in you because I, the thing is, the thing about you was you could actually articulate with no hesitation what it is you're trying to do. And that is very unusual. I have people come in that work on our team and they go, you know, we got this need out there and I think we could do this or this. And they're not nearly as dialed in as you were just then. Yeah, and the testimonials, I think specifically with, I would say, I mean, physical fitness, I mean, probably any service, but especially with that is one of the promises that you said or one of the motivations is that it's so hard to stay start and stay with it and stay consistent. So if you can find a few clients and over the course of six months be like over six months, they've stayed with me because of this tactic, you know. Here's your before and after shot. Yeah, a level of testimonial too, I think is going to give you credibility because I think that's probably what you need starting out. Yep. Very good. If you're serious about building a business, you need an easy way for customers to buy from you. 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Hey, Dave. Hey, Rachel. Thanks for taking the call. I'm calling today to ask the question about should we drain or take our emergency fund down to a level to pay off the mortgage? We've been following the baby steps and doing that for a long time. We've been doing that for a long time. Our kids will be in a Ramsey babies effectively, and they'll be the beneficiary of all this. Wonderful. And so it's truly just a question for my wife. We've done this for so long, so budgeted, and all these things are happening. And now we've got to take that final step to pay off a whatever 2% mortgage or something. So what's the balance? What's the balance on the mortgage? 280. Okay. And where do you have $280,000? Uh, we have, we've sold something. We've sold some projects. We started a business a few years ago, and we have some projects that were acquired by a major public company. And so we have some earnouts that we've already received three out of the four payments, and we have one final payment coming. And so we've been accumulating that. And then separately. Why were you not already chunking that on the mortgage? Oh, just, it's all happened so quickly. Oh, okay. So it's very recent. It's only happened. How much do you have saved, Nathan? Correct. And how much do you have in the account today in those accounts? In total, we have $190,000, and then we have about $136,000, $156,000 maybe in non-retirement brokerage accounts. Mm-hmm. Okay. So that is, what, $340,000, right? Yeah, $346,000. And you need $280,000. So why would your emergency fund disappear? Well, it wouldn't. It's just. When I talked to my wife and we laid it out, we were discussing, you know, what level of emergency fund, right? Well, emergency funds should be three to six months of expenses. In what world is $66,000 not that amount? It 100% is way more than that, but it's more just the reality of the decision. Well, the reality is you're not touching your emergency fund, which is how you asked the question. It's not accurate. Yeah, but seeing that amount of money in the bank. That's different than. For you, Nathan, it's like. Do I take my emergency fund down to pay off my house? That's not an accurate-ass question. That's correct. It's more the emotions of draining an account that has a lot of money in it, and you're thinking, do we really. And I'm fine with it, but my wife has, you know, she's more hesitant, you know, in your mom and your wife's phrase, or her feelings are, you know, she's. Feels good. Yeah, there's safety in. Well, here's a couple things to think about, and yes, I would write a check out of the $346,000 and pay off $280,000. $280,000 and have $66,000 still sitting there by nightfall. No question about the answer to the question, but then let's talk about, you know, the actual feelings that go with that and the sense of all of those things. Two things come to mind. One is, it is a valid thing, and we're seeing it more and more, we're understanding it more and more, that it's weird the way your brain works. When you pay off a mortgage, it does not feel the same as when you have that same amount. It does not feel the same as when you have that same amount in a pile. Like, you're diminishing this pile and putting it over on the house, and it feels like it's gone. Yeah, because you're kind of like losing that. It feels like it's gone, but it's not gone. It's not gone. You just moved it into equity, but so math-wise, it's really not gone. You just changed it from a brokerage account to a paid-off house. That's all it is. So now we have real estate instead of the other. So, and, you know, the mathematics don't tell you that, but the feeling is I'm diminishing one thing, and I don't feel like I'm getting as much on the other side. That's the thing one. Thing two is, when you pay off your house, on the positive side of the ledger of this discussion, you're going to feel different. She's going to feel different, because you've never been there. And I've talked to literally tens of thousands of people over the last 40 years that say, it's like I could breathe again, like somebody was standing on my chest and they got off. And I didn't even know it. I got so used to it. And that's how I feel a little bit. I feel a little bit that way now. I can see that I'm about to be able to take a deep breath. I can still feel that call from the guy that had to pay restitution for being a bank robber. I can feel it. It's, I mean, we've done this through business school. So many things. Yep, exactly. Now, then the other one is, and this is for your wife, is I have told tens of millions of people, tens of thousands in person, but millions indirectly to pay off their house. And I've been criticized for almost everything I do from the time I wake up to the time I go to bed. But no one has ever called me ever and said, I hate you. I hate the fact that I paid off my house because of you. I've never had that one. No one is ever mad at me for that. They all talk about it as before they do it. It's like, oh, why would I get rid of 2%? Dave, you're stupid and you're wrong and you're crazy and all this. And it's like, but when they actually do it. No one ever regrets it. And so, and the joke is, if you pay off your house and you hate it, Nathan, you can go get another mortgage. Right. That's what I've shared. I think I know it's 6%, but the interest would be a little different, but, but, but, you know, so I would just say, honey, we have $66,000 left in the bank and we don't know anything else on our house. We've got to do this. Everything else that Ramsey has told us to do, we went and did, and it worked and they're not steering us wrong here. Yeah. And you're probably not going to like this, but I'm like, even if you wanted to slow step and be like, let's throw a hundred grand tonight at it, throw a hundred grand and let's wake up tomorrow and see how we feel. You know what I mean? Like, like nothing's on fire right now. You guys need to pay it off because you would have no mortgage next month, which is crazy. I know you would disagree. No, I get your logic, but the problem is you don't get the feeling of reducing it that you do a paying it off. No, I know, but I think. There's no relief. No, it's not relief, but I think it is a, another step to show. Confidence of like, okay, we are okay. Okay. I'm okay. Cause it's the amount that's being diminished in the bank that is scary looking. Yeah. If you had $66,000 in the bank and a paid for house, would you go borrow money on your house so that you have more money in the bank? No. And this is the same thing in reverse. It's exactly the same thing. Every day you don't pay this off. It's like you're borrowing on your house to put money in savings. It's exactly the effect. And so needs to be paid off tonight, but, but we're going to get hurt. We're on board and I appreciate that. And we'll be empathetic and gentle and persuasive and all those things and do it. Yeah. Well, and run the calculations of how quickly you can build at 66,000 back on top of when you don't have a mortgage payment. You haven't even gotten all your payments from your business sale yet. Yes. You still got more money coming. Yep. Yep. So it's not, you're nowhere near the edge. Yes. And well done, Nathan. That's a lot. That's a lot of work on your, your part to get, to get to this place, you and your wife. So you, you're there. And it's interesting. It's a study listening. So out of the abundance of the heart, the mouth speaks, right? The Bible says that. So the words we use tell us what, where our heart is. And, um, you know, it took a minute for us to figure out that he actually was asking the wrong question because his heart feels like he's actually getting into the emergency fund. And once we got into it, he's not, or maybe she feels that way. And he was recasting what she was saying. I don't know. He may have been asking the question on her behalf, but it's interesting that, that the feeling is that they're getting into the emergency fund and they're nowhere near it. Yep. Yep. And yet that that's, it's touching that same place. It's, it's this feeling of security from a pile of money instead of security. Mm-hmm. From debt-free. And once you've been a hundred percent debt-free, you won't trade that for a pile of money. I mean, the stuff that I own that I could go borrow money on and make a pile of money, I could do it by the end of the day and have a big old pile of money and have all the debt to go with it over on the stuff I borrowed on. But I wouldn't trade that piece for any pile of money. The piece, the piece I can, I always feel like I'm up in the mountains and it's a cool morning and the sun's out, and it's cold air into your lungs. It's like 46 degrees. I love that. That's how it feels to me when you pay off your house. And nobody hardly has that feeling. When you do have it, you won't trade it. ♪ Thank you. There are a lot of things you probably shouldn't ignore. Your check engine light, that weird smell in your fridge, the smoke detector that's been beeping for six days, and maybe most importantly, your phone bill. The things we ignore have a funny way of costing us the most. 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That's BoostMobile.com slash Ramsey. $25 forever requires customers to remain active on Boost Mobile unlimited plan. ♪♪ Are you sick and tired of working hard and having nothing to show for it? Work my fingers to the bone and all I got's bony fingers. You ever been there? I've been there. No fun. You don't have to live that way. Our EveryDollarBudget app helps you find extra money every month. You'll feel like you got a raise when you start doing a proper plan. It also builds you a personalized Ramsey-based plan to beat debt and build wealth. In just 15 minutes, you're going to find thousands of dollars in hidden margin. Don't be normal when you can live like no one else. Start EveryDollar for free in the App Store or Google Play. Thomas is in St. Louis. Hey, Thomas, how are you? Howdy, Mr. Ramsey. How are you? What's up? I have a couple questions. I'm getting married in about a week. We're 100% debt-free. I'm on baby step number three. And I'm debating leaving a stable job with good benefits to go risk an entrepreneurial opportunity in another state to do window sales as a window representative to potentially make a lot more money. What are you doing now? I'm an HVAC technician. I'm four months into the trade, and I'm bringing in $3,800 a month. Okay. Where did you hear about the window opportunity? My cousin is a manager down there in another state in Idaho. He's running a window company, and he's making considerably more than I am, and he has reached out. Well, I kind of reached out to him, but. Dave's pondering. Yeah. Okay. So what I want for your first year of marriage for your relationship is stability and predictability. And this sounds like a wild adventure. And I do like wild adventures. I don't want to do those on my first year of marriage because I want you guys to invest in each other, not in a wild adventure. You are in St. Louis. Where is she? She's out here. We're living separately right now. She's living in a hotel, working for a hotel, and then we'll get married and be living here in St. Louis. So if you go to Idaho, she has to get a job too, right? Yes. Have you talked about that? We did. We have, and she's okay looking at any job, Costco or just something random, hopefully to get medical insurance, especially if kids come along. Because this job doesn't offer benefits because you threw in benefits, with your current job. Right. Current job has awesome benefits, and the sales rep doesn't, but for higher. How long has your cousin been doing it? He was on and off with other companies, and I think he's been with this company for two years now. And he doesn't own it. He's working. He's a manager there. He's working for the company, yeah. How big of a company is it? It's growing. It's not a huge sales company, but it seems really stable. His first. His first year there, he brought in 198,000 in the year, and then doing better and better each year now as he's climbing management and has extended offers to me to come out and work with him because he thinks I can do well in sales, but it's just nerve-wracking. Mm-hmm. Yeah. So are you trained as a HVAC tech? You know what you're doing, so if this thing goes sideways, you could go to work for an HVAC company there? I'm getting trained. I feel pretty well-versed, but I'm not 100%. When does the training end? You don't have a set of credentials to walk into another HVAC company and get a job. No. No. I soon will, though. I'll be getting my certification in a couple weeks. Okay. Then you would. Okay. Yeah. Yeah. Well, obviously, complete the certification. Okay. The only. I don't know why. I just have this hesitation, Thomas, just a little bit of when things feel too good to be true, sometimes they are, not always, sometimes they are, though, and so I appreciate your patience on making the decision that you didn't just hear 198 and just be like, let's just jump ship and go. So, yeah, there's a part of me that I'm like, yeah, you go try it because you have the backup of the licensing to be able to plug into another trade, which is awesome. Finish up your certification for sure. So. The thing that's bothering me, the thing I keep hesitating, I never want to tell people to not go make more money if you can. I think that's a wonderful thing. I don't think it solves all problems, but it solves some of them. And so if you can go from making $40,000 a year to making $140,000 a year, it does change your life. That's the temporary thing, and that's. But what it doesn't do is it doesn't give you a $150,000 a year. It doesn't give you a $150,000 a year. It doesn't give you a $120,000 a year track to run on because you're not, you're very likely, you know, you said you're what, 20 how old? 21. 21. It's very unlikely that you will be selling windows at 31. Right. Even if you're making $198,000. It's very unlikely that you'll still be doing that a decade later. For sure, two decades later. So at 41, for sure. So the question is. The question I'm always asking is, where is this taking me? And it could be, maybe we need to rethink it, I don't know. I'm a big fan of people learning how to sell because salespeople are some of the best paid people on the planet, and more people in marketing and sales end up as CEOs than any other trade. It's the fastest track into the C-suite, into running a business, running your own business, running someone's business, because you're developing people skills and persuasion. The ability to persuade. And not the ability to talk, apparently, but the ability to persuade. I was going to say the word, but. But the. That's a great point, though. Where is it taking you? Not just making more money. I don't want to just go make more money and end up being something I hate. In a place I hate, because my cousin called me. That's a dumb reason to do a career, you know? I know. It's like, because, I mean, I like my cousin, but I'm not going to do something because he said do it. I mean, there's like. Nothing he's going to. No. So, no. But, I mean, I'm not saying he's a bad guy. I mean, that's just. But this just sounds like somebody dangled a carrot, and now you're the horse jumping after the carrot. So, I want to think through where this is taking me. Who do I want to be at 35 years old, and how does this help me get there? And if the answer is, I'm going to go over there and make $200,000 a year for four years, and then I'm going to move to X that I've always wanted to do. Or we're going to open a business doing Y that I've always dreamed of, and I'm going to use that $600,000 swing to do that. That's an okay answer. You're going to pick up a load of fuel, and the fuel is going to take you to your dream. And that's okay, if that's what you're doing. But I want this conversation to go beyond, I'm taking a new job because my cousin called me. And because of the money. There's a lot of people that they get a big bump in salary, and they go work for a company, and they're miserable. And they're just like, oh my gosh, I liked this other company. I wasn't getting paid as much, but it was a better fit. You know, that happens. Not always, but you just, if money's the only motivation. I love the idea of stacking a basement full of cash and learning a skill called sales. And that's going to take me on my journey this way, and define this way. Define where you're going with it. That's a better way of doing it than I'm just randomly going over there to make more money in another place, and I just go. got married, oh. this sounds like stress um sounds like tough times on the uh the new bride's gonna leave her her job at the hotel and work at costco oh wow yeah i'd have a plan b thomas and also a timeline that hey we're gonna give it one full calendar year and if this isn't picking up to x y and z that we thought you know if i were her i probably would want some level of um because it's so new is there an out or are we going to be stuck in this dream from the cousin forever and ever even if it's not working so there's always kind of a i like having multiple options so even with that even if you choose to do this here's kind of the parameters around that to go do something else if we need to but if you're out there and you're 18 or 19 or 21 and you want to learn sales as a skill i'm going to encourage you to do that before you do a whole lot of other things like 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fair wins smart bundle including the all-new live like no one else debit card at fairwinds.org slash ramsey that's fairwinds.org slash ramsey insured by the ncua today's question of the day is brought to you by why refi if you've fallen behind on your private student loans you don't need more shame you need a plan why refi helps borrowers explore refinancing options with low fixed rate payments based on what you can afford go to why refi.com slash ramsey might not be in all states today's question comes from hope in north dakota my husband wants to retire next year and we're trying to get out of debt so we don't have any financial worries in the future we are less than fifty thousand dollars away from paying off our mortgage plus we have two car loans and three credit cards the house and the cars don't trouble me too much but the cards have a 25 interest rate so we're not making much headway on getting them paid down even with extra payments should we take out a home equity loan and pay off the cards then throw everything at the loan and pay it off as quickly as possible we have no intention in keeping any credit cards going forward and have agreed to just pay cash from here on out uh no hope i would not do that because the problem is you're just moving your debt from other debts and so there's no real progress happening yeah you can play the interest rate game but the truth is if you focused all of your energy didn't pay more on the house didn't pay extra on the cars you throw everything in the credit card and you work your way down honestly by the end of it you didn't say how much uh specific credit card debt you guys are in but ideally it'll be less than a year when all that's paid off so the interest isn't really what matters at that point it really is the focus intensity that's going to get you guys far and then possibly selling these cars and setting yourself up because um yeah going into retirement with two car loans three credit cards not too much on the mortgage you got fifty thousand so i mean you guys are getting close on that but um you're not going to be able to get ready for retirement it's not a retirement year next year for your husband hope you guys need to get your husband's not going to get to retire next year you're not ready you're broke you have two stinking car payments and credit cards coming out your ears that you can't figure out a way to pay off you don't get to retire while you're doing that and make less money you need to make more money so he needs to double triple his hours and you guys need to quit spending like you're in congress this is out of control so the deal is this you you presented two things in the email that are juxtaposed with each other we're trying to get out of debt so we won't have financial worries in the future but the cars and the credit cards don't worry me so much well they ought to worry you that'll worry you so much they're sold you sell them because keeping your husband from retiring so the problem is you're not worried that's what that's why you shouldn't do this you need to get worried you need to get fired up and wired up you need to get pissed off that you're this old and still in debt well why because you keep buying cars on payments that's why sell them get you a couple hoopties and let your husband retire oh now i got personal see but yeah when you need to get worried that's the problem with this email you're not bothered no what bothers her is a 25 interest rate not the fact of debt but she acts like that's the reason she's in debt no she's in debt because they keep spending yep and keep buying crap they can't afford with money they don't have that's called debt that's where that comes from and so when you got you got to get upset about this stuff and go city bank has been screwing me ford motor company has been screwing me i'm tired of getting screwed i'm gonna do something about this i'm gonna take control of my life away from these stupid bankers and until you get that kind of thing going you're not gonna get out of that because you're not gonna cut deep enough sell enough work enough to clean up the mess because it's all okay i'm it doesn't bother me that much well of course it doesn't bother you you're gonna stay right there then you know it doesn't bother me much well then you're gonna keep it that's that's until it bothers you you're not gonna fix it john's in macon hey john how are you i'm good mr dave how about yourself better than i deserve what's up i had a question for you um so i just completed a college internship i'm 21 years old and they have offered me a full-time role in sales and ag sales but the caveat is i have to move off for a year before i can come back home to kind of get me out my comfort zone and i understand that but my question is should i rent while i'm gone or should i buy a large size camper and that way i'm putting money into something my own besides renting you should rent you should rent okay yeah but see listen if you're gonna go out and make sales calls and you slept in a bed in an apartment you're gonna look different than if you slept in a camper that's right and see it's not i was going with it's out right rent so you don't have to you know well yeah dave's is your your your sleep score john that's what that's what no it's your rumpled clothing yeah yeah no ironing board fits in a camper okay so the you would look fine john i i would think you would look john uh why did you take this job what does it pay uh intern with them i know but why i mean you took an intern but they're running you out of town and putting you in an uncomfortable bad position are they paying you to make the up for all this how much are you going to be making making 70 grand okay and your degree is in what ag you got a degree in agriculture yes sir and you're going to come back there and sell for them after a year in your hometown yes sir that's right okay this may be a naive question is that a normal process i've never heard of it but um it's not it's it's a company process and they were very upfront with me about this i mean i accepted this role um and it's just it's a company process and they were very upfront with me about this i mean i it's designed to get me out my comfort zone because i have a lot of connections back home and i guess they're this is not just me this is a everybody out there where they want to see what i can do where you don't know anybody yeah that's right yes they want you to get your knuckles raw from knocking knocking doors i'm i'm up for that i like that but yeah rent just rent an apartment john don't go get a camper because you're going to get a loan on it you're paying interest it's gonna go down value it's yeah it won't bad idea this is this is you don't need a used camper when you come home that's not a good idea you don't need a used camper when you come home that's not that's not a plan no um it's a i appreciate your thinking about and looking at other options but just get you an inexpensive apartment and work all the time and and you know uh stay like you're still in college stay away from happy hour and work all the time and get your couple roommates and keep your expenses down and go make make your 70 grand and this is boot camp i got this my one year trial by fire and then i get to come home and have a great life and make good money with the commissions i make off my connections and my family uh you know the people i've grown up with and all that so uh and you're going to get the advantage of a family network and a uh so forth in a small town which is wonderful good for you sounds interesting okay but yeah no camper yes apartment one year no big deal good sleep score john yeah good job good sleep score what we're worried about the sleep score you're talking about him no i'm actually i'm just yeah i in a sense yeah that's that good i guess i hear i know you're talking about appearance scott's in minneapolis hey scott how are you yeah how are you doing dave and rachel better than we deserve how can we help well first off i just want to thank you you guys have been a real inspiration to my family um we've learned a lot and i think thank you because of listening to your guys's uh steps and ways of doing things um so long story short we have a daughter that's in high in high school she's in her senior year she got accepted to a private school and she's in her senior year she got accepted to a private school and she's in her senior year she got accepted to a private school um out of minneapolis we um both contribute a full uh 20 into our roth or our 401ks with each of my life my wife's work and my own we also contribute uh the max to our uh roth 401k or roth iras cool for a run for a run out of time on this hour what can i help you with so what we're looking to do is she has a we did the math on this and it looks like she's going to have about 17,000 dollars in her pocket and she's going to have about 17,000 dollars left over uh after a four-year degree which is something we can wash out we've got about 60,000 dollars in our emergency fund right now we own our vehicles watch your question the question is should we have her go to this school with that balance or i know i know you guys have always talked about possibly not having a balance when you're done with school but that was she'll be 17 17,000 dollars in the hole with tuition is what you're saying yes that would be the leftover that we've done the math on okay you can't cover that yes we can oh we don't want her to know that okay if you want to pay for college and that's a college everyone's in agreement with and you want to pay for it go wherever you want to go yeah but if you feel like it's a stupid idea because it's too expensive for what you're getting and you want to just say this is a stupid idea it's too expensive for what you're getting it's not going to do with seventeen thousand dollars y'all have done well enough seven thousand in your problem but we need to actually speak into is this a good education decision sounds like you don't think it is it sounds like between the lines let me tell you what i get asked all the time when should i get term life insurance how much do i need is it affordable those are the right questions to be asking so let's take a quick review the fact is term life isn't a baby step so if anyone is dependent on your income you need to have 10 to 12 times your income in life insurance now and most people are surprised by how affordable term life really is even if you're not in perfect health look i understand the hesitation since most insurance companies make it more of a hassle than it needs to be not at zander insurance they're not an insurance company they're a broker that works for you that means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family for almost 30 years i've recommended zander for straight answers competitive rates and coverage that actually protects your family call 800-356-4282 or go to zander.com for a quick and easy quote that's zander dot com welcome back to the ramsey show in the fairwinds credit union studio rachel cruz is my co-host today sherry is in los angeles hi sherry how are you i'm good thank you for taking my call sure what's up well my husband and i are getting closer to retirement age and we have 735 000 in combined ira and 401k accounts way to go we have a yeah that's that is a positive for sure um we do have 150 000 in cash that's in the bank that's obviously a waste and i just started to panic thinking oh my gosh we gotta we gotta get get things rolling here and invest that excess cash and i'm just not sure where to do that as we we're not contributing to our ira and one other 401k that we're separated from service from that employer but that we've never rolled that over to ira so we do have sounds like it sounds like you've kind of got some cleanup to do yes like pull all these things together and point them towards a single strategy exactly yeah i would just jump on jump on ramsey solutions.com and hit the smart investor pros in your area the the brokers the financial advisors that we endorse all have to have the heart of a teacher and they're going to have to have the heart of a teacher and they're going to have to have the heart or we don't put our name beside them in other words they're going to sit down and not tell you what to do they're going to teach you what they would do in your situation and explain to you why and then you will decide if you want to do that or not that's the proper way to go at this so it sounds like that some of those things just all need to be rolled into uh good growth stock type mutual funds in general i spread my portfolio and rachel and winston have spread theirs across four types of mutual funds growth growth and income aggressive growth and international we put about a fourth in each we want to move as much toward roth as we can move because it's growing tax free and we don't have mandatory withdrawals at 73 called rmds required minimum distributions okay so that's a couple of things you may want to kind of target but they'll teach you all of that when you sit down with them because they're going to give you advice that's consistent with what you'd hear on the air on the air also or we wouldn't put our name beside them is it are those are those other accounts that you're going to be able to use sherry that you mentioned with old employers was that included in the 735 number that you gave us or is that more that's included okay okay so that's just total yeah and how old did you say you were again how old 50 uh i'm 53 and my husband's 57 oh you guys are gonna have so much money oh gosh i hope so oh no you will so let me kind of give you a rule of thumb just to prove it to you it's very interesting if you take a number and divide it into 72 it tells you how long it takes a lump sum to double so if you made 10 it takes 7.2 years for it to double so if you're in a decent growth stock mutual fund portfolio your 735 is 1.5 and you're 60 it's three when you're 67 and it's six when you're 74 oh if you do nothing else so i'm not kidding when i say you're gonna have a lot of money you're doing really well but you need to get all of this stuff you can't be sitting in cash they'll be using some of that in retirement you got maybe maybe depending on you know what's going on what else well you may be drawing down on some of it at at some point i don't know but that's also you probably will be adding to it between now and retirement too so those numbers aren't going to be that far off yeah for that reason so anyway the let's get the cash working let's make sure that those old uh junky leftovers from the other jobs are all pointed in good mutual funds everything's dialed in on roth as much as it can be within reason and you know we've got a good portfolio of loans and we've got a good portfolio long track record high product producing mutual funds that you feel really really good about and then you can really just you know watch this thing cruise and you're going to do great okay well with that being said i've been our goal is to have our house paid off when we do retire good and i've been bringing extra towards that every month good saying that we're going to be okay financially should i be putting this extra money into the house or should i be using that to invest no you need to get the house paid off because there's two things that causes people to get their first one to five million dollars of net worth one is a juicy retirement program which you have and two is a paid off house we find the average millionaire that we find that becomes a millionaire say they got a 1.7 million dollar net worth we find you know 800 000 on the house and they got another six or seven 800 000 in their 401 case and that's that's the typical first two million dollars that somebody builds yes but you are investing 15 percent of your income until then yes yeah in retirement yes but no more okay everything else goes on the house and we're going to get this all working what's your household income um we make 242 combined yeah so you got you got another how much is left on the house two i mean 330 okay and i've been paying a thousand extra a month but according to the mortgage calculator if that's accurate if i paid twenty four hundred dollars extra a month which would be an extra 1400 which i could do we'd have paid off in seven years i would do that and so that's not too aggressive no no there's no such thing as too aggressive get it paid off unless unless you're not having fun in life because you're aggressive but i still want you to go on a cruise i mean you're making a quarter million dollars a year so enjoy your life but put 15 of your income away and throw as much at the house as you can get the house paid off as soon as possible and then with the house paid off and you've got by then several million dollars saved invested um you know you're in a really really good spot at like It's like 60 years old here. well that is a relief i was starting to panic so there's no reason to panic but i but i do believe in tuning up things you know this is a good piano let's get it tuned up so it plays a good song okay you're doing a good job let's just do a little bit better excellent job so and and that'll also give you the comfort the emotional peace because you got your hands around the neck of this thing making it behave right now it feels like it's a little bit drifting and that's bothering you as much as the actual numbers yeah so when you're on top of it and you're telling your money what to do there's a sense of power when things are drifting away there's a sense of powerlessness that's right and anxiety that goes with that because yeah by 60 i mean a paid on paid off house and then if they're investing 15 over the next seven-ish years and that would have two million dollars yeah it'd be close to two million plus the house that'd be worth probably three million dollars and then if they're investing 15 over the next seven-ish years three million dollars yeah you know i don't know what the house is worth but you know guessing a million so um yeah that's she's in great shape you've done a wonderful job by the way just this is this is what you aim at i took a call earlier in the week from a 64 year old that had 40 000 he didn't know what he was going to do he's a security guard he's worried about eating so that that's the other side i mean so you know uh that's a cautionary tale for the rest of us to you know get ready it's coming christmas is in december retirement's in your 60s 70s whatever i mean it's coming the other option is death so you probably ought to plan you know i mean this is this is what you need to do so uh this is the thing and it the it's amazing how fast it comes at you all of this so um yeah you feel like you have forever when you're in your 30s and yeah i who knew you know it's just like just like that and now i'm a grandpa of a 13 year old how does that happen of teenagers now i'm thinking about being a great grandpa you know oh my gosh stay alive dave stay strong i'm working on it i'm working on it i'm working on it i'm working on it i'm working on it i'm working on it i'm working on it i'm working more complex there was a time when ramsey solutions had too many disconnected systems and not enough visibility across the business we wasted too much time chasing information instead of making decisions that's why we got net suite net suite brings your financials inventory crm and more together in one place more than 44 000 businesses run on net suite including ramsey and now they're taking the next step with net suite next making it easier to put ai to work across your entire business net suite next helps you make the most of your time automating routine work like forecasting demand and following up on overdue accounts with net suite next ai is built into everything you do so you can ask it questions just like when you're talking to a member of your team and right now you can try net suite next for free if your revenue is at least seven figures go to netsuite.ai slash ramsey that's netsuite.ai slash ramsey andrea is in raleigh north carolina hi andrea how are you i'm okay well dave how are you better than i deserve what's up yeah so i want some advice on if i should buy a car if i'm already in debt i am about sixty nine thousand six hundred and forty four dollars in student debt i just finished my master's degree i drive a 1994 f-150 and drive about 30 minutes to work so i i'm thinking i need a new car i just started a new job and i make sixty five thousand dollars a year cool what's your master's in landscape architecture good for you okay good for you good for you good for you all right thank you how long you been driving the f-150 for about two years drive it for two more okay you're broke do you have any money saved andrea i do yes i have about nineteen thousand six hundred and some change okay and nothing's wrong with the truck it's just old it's just old i have had some issues with it and you know that uncertainty of driving 30 minutes every day and not being sure if something's going to happen to the truck it's just but nothing i mean nothing it's not like there's one specific thing that you're like it's about to go down it's just the idea that something might right right okay exactly yeah i keep driving have happened but i you know just keep repairing it and throw and throw uh 18 000 at this debt too yeah yeah we teach you to pay everything down to a thousand dollars don't borrow anymore live on beans and rice and attack your debt and clear your debt you believed in investing in this master's degree and so far you've gotten a 65 000 job as a result of it hopefully that's going on up from there to make your theory of investing in this education correct so i want to see you making a hundred because of this master's and i want to get some master's paid off as soon as possible this is not a pet it's a student loan kill it right exactly and that's how i feel the cars that i'm looking at are all within the 37 000 range 37 000 you have 19 you're going to go in debt while you're trying to get out of debt and so that's why i was like i don't think that this is the right position for me to make right now 3700 isn't the right decision 37 000 is 10x a bad decision no no no right no yeah well well that was my question you know i feel like i knew the answer to it yeah here's the thing if you will get in the business if you'll set your head to say my number one wealth building tool is my income and as long as i'm giving that away in car payments and student loans i'm going to be what's known as a middle class broke person but you can make 65 75 85 95 000 as your career expands here and become a millionaire if you'll stay get out of debt and stay out of debt because you're not giving all your money away to other people every month right and with my 19 000 you guys are saying you know pay everything but a thousand dollars yes i do have my company that matches five thousand dollars and 401k no i'm not worried you do not need to be putting money into a retirement plan you're broken in debt okay gotcha get the debt cleared up as fast as you can yeah andrea when you walk the steps we call them the baby step so it is that thousand dollar emergency fund baby step two is paying off all of your consumer debt so that'll be your next goal and hopefully you can do that in two years and then you want to save up a three to six month emergency fund and by that point you're probably going to be simultaneously saving up for a car for a car and then you pay cash for yes and that emergency fund and then after that's done and that emergency fund is in place and if you're single and you have a great job you could do a three month emergency fund it doesn't have to be six months and then from there you start investing so yeah you'll be you will not be investing probably for the next three three and a half years you'll start investing we tell you to put 15 percent of your income into retirement so that is that five percent match and also a roth ira so you will have plenty to catch up on so just because you're not getting that five percent match in the next three years you're going to more than be okay because you're going to be funding 15 of your income into retirement because you have that margin so those are the baby steps really we walk we walk people through hey andrea if i give you a book that shows you how to do all this will you promise to read it yes all right i'm going to give you the total money makeover it shows you how to do all those baby steps let's give her every dollar and we'll set you up on our budgeting app rachel's talking about and it helps you walk the baby steps too on that yeah it's going to guide you through the baby steps as well and uh and reinforce this idea that with no payments you have money to invest with no payments you have money to invest see what we've done is we all make most americans make pretty good money they just give it all to a car they give it all to sally may you know sixty nine thousand dollars in student loan debt and we give all our money away and then we wonder why they have tall buildings and we're broke and they have samuel jackson saying what's in your wallet well apparently my money is in your wallet that's what apparently we can go with there if you're using that stupid city bank card right so um that and whoever it is what's the other guy bradley cooper is that the one that lives in the lobby or something i don't know it's all that stuff so we're going to give it all to sally may that one the other day, the Citibank guy that lives in the, Citibank man lives in the lobby, I think it's Bradley Cooper, maybe. Oh, no, no. They didn't get Bradley. I don't know. It's some actor. Oh, man. These actors are now all bankers. Jennifer Gardner, I know. Yeah, Jennifer for sure, which is real disappointing because I was a fan. Oh, stop. You're still like Jennifer Gardner. I know. But I can't stand the, you know, anyway, these companies are screwing you guys. That's what it amounts to. Yes. And they're paying a pretty person to tell you to do it, regardless of who it is. And so I don't know if Samuel is pretty, but. Oh, it was, no, it was Dan Levy is what I'm seeing. Citibank commercial where he's in the lobby of the hotel. Is this what you're talking about? No. Oh, different. Different one, I think. No, this guy lives in the lobby of the bank. Capital One. Oh, wrong one. Not Citibank. Capital One. Okay. Thank you. We'll figure it out in a minute. All right. Will is in Atlanta. Hey, Will. Who is it we're mad at? What's up? Hey there, Dave. How are you doing? How can I help? Hey, well, thank you. First off, thank you for taking my call. My, even when I was a kid, my dad was watching your Fox business show, you know, back in 2009 when all that was going on. And I took a financial literacy course that they had set out for you in high school. Wow. I've always really respected your work and everything. Thank you, sir. So that's why. Yeah, no problem. That's why I wanted to talk to you today. I'm 25 years old and I've been married for two and a half years and we're doing okay. Uh, financially. Um, but there's two things I wanted to really get your advice on and that's, we have a $17,000 car loan, uh, left from a car we purchased two years ago. And, um, on the flip side, we want to know how we can maximize our cash and income. We already have in the bank and that we do make. How much do you have in the bank now? Uh, currently. But for between me and my wife's savings, we have almost, uh, 13,000 in our joint. I have 85,000 in a money market. Pay off your car today. Let's uh, pay off your car today. Will, do you remember the class you took? I mean, I will say I wasn't that smart in high school. No, no, you can say it was boring and you had to. It was boring and you ignored it. It's fine. I didn't really like you, Dave, but I thought I would start out being nice on the call. Anyway. Now pay off your car right now. Yeah. You have $85,000 and $17,000 car loan. You understand. Okay. Instantly. Instantly. And never borrow money on a car again. No. And we had a, um, she had an old car at the time and in retrospect, it did the, it did have a few problems here and there. I don't really want to hear that. I don't want to hear your excuses. Just pay off your stinking car, man. Pay off your car and never borrow money on a car again, ever, ever. If you want to be rich, if you want to be poor, keep a car payment, poor people drive big old cars with big old payments on them and walk around with stress. They don't have financial peace. Two words that don't go together like airline service. So I mean, you got to think different, man, break the cycle, break the cycle, break the cycle. I don't care what's going on. Don't get a car payment. I'll ride a bicycle before I'll get a car payment. Yeah. Okay. Okay. Okay. When you're trying to hire, you don't have time to dig through stacks of resumes hoping someone halfway decent floats to the top. That's the world's least fun game of Where's Waldo. What you do need are qualified candidates who won't waste your time because you can be sure they actually want your job, which is why I love the way ZipRecruiter is helping small business owners right now. ZipRecruiter has a new feature that finds the kind of people who will go the extra mile for you. Candidates can now tell you why they're interested, nay passionate, about your role. And ZipRecruiter's smart matching technology automatically puts the most qualified, most interested candidates at the top of your list. 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It's just Ramsey straight up. If you don't want a Ramsey answer, you shouldn't ask Ramsey. If you do, you should ask Ramsey. It's completely free. You can do it at RamseySolutions.com or click the link in the description below. Hey, I'm doing well. How are you guys? Thanks for having me on. Sure. How can we help? Well, I am just trying to figure out how to get my husband on board with one paying off our debt and just really like getting that gazelle intensity. I don't think we've really had that. It just doesn't feel like, yeah, he's really there and he's the moneymaker right now and I'm doing the best I can. But I kind of want to control things, you know, human nature. So what's the pace look like? What are you wanting to do? What is he pushing back against? What's the. I think he says he's on board, but our biggest expense is eating out. I mean, it's a lot. And so it's like, I'm like, could we not eat out? You know, yeah, yeah, I'm down to bring it down. But like, it's not really, it's not really happening. I just did our first budget last month. So we did have expenses. We didn't really exactly hit everything, but he's not unwilling. I just feel like he doesn't participate that much. Okay. You've made a mistake that is unusual for ladies to make. Usually the man makes the mistake you're making. Because you're hard driving and I love you. I think you're awesome. But what you did is you started talking about what we're going to do and what we're going to do next. And I think that's what you did. We're going to do this. We're going to do that. What we're going to do instead of why. Yeah. And so I want to sit down tonight and turn off the television, put the kids to bed, and let's have a dream date. I have a dream. Why? I would, because the debt scares me to death. The idea of having no retirement scares me to death. The idea of having a car payment the I want us to dream about what it would feel like to have no payments and have a big old stack of money to be able to travel and to be able to do the things that you want to do, honey. What would you do if we had a big stack of money and him dream with you? And then we've got a why, a reason to not go out to eat. That's true. And it changes the motivation. What would it be for you, Jocelyn? What's the reason you want to get out of debt? I mean, we don't have much, honestly, like on the scale of things. We don't have a lot of money. We don't have a lot of things. But I want to be able to save up for a house. And right now, I honestly don't know, even if I go back to work, like I'm a nurse, but right now I'm at home with our one and a half year old son. Like I can make a decent amount. But from what I'm understanding with numbers, I'm like, we don't have a down payment. And homes here, you could get a tent for probably more than we could afford, you know? Right. How much debt do you guys have? Honestly, we've got, oh my gosh, I just spaced. We've got just a, personal loan with my parents because they bought my, our truck off of us. We were in over our heads with it. Like we owed more on it than it was worth. So we've only got $8,700. Okay. And that's it. That's your only debt? Yeah. Well, I just got him to pay off the credit card. I was like, please, let's pay off the credit card. Okay. So that's paid off. How much do you guys make a year? How much does he make? Right now, he's bringing home $7,500 a month. Good. Okay. It's not bad at all. Okay. So I think you just sit down and you say, okay, let's talk about, what our, what it feels like in the future to have a stack of money and own our own home and not owe my parents and not owe my parents any money when we don't owe your parents don't owe anyone anything and we're stacking money for a down payment on a home we're building a life for this one and a half year old that's going to change his whole life and uh and i want us to to have a home i want us to be able to do this or that well you know i mean would you join me in this dream and then let us sacrifice to hit the dream it sounds nice yeah i want i want to i want to dream in high definition let's start talking about i remember we were in a rental house and um rachel was eight and um no yeah rachel was eight rachel was seven or eight years old and we were in a rental house that we because we sold our house to get the rest of our debt after the back of the house and we were in a rental house and we sold our house to get the bankruptcy cleaned up and uh my wife hated that rental house and um she said i we have to get a house i this is life is too short and i'm gonna pray for a white kitchen and a three-car garage for our two cars in our boat and i'm gonna pray that we can do that and and in the school system over here where the kids are going to school already and um i'm gonna pray for that and um you know we were on this little weekend trip and i got an email from a real estate friend of mine and it was in the early days that they actually started putting pictures on the internet of a house that's how long ago it was and the dadgum thing had a three-car garage and a white kitchen that's crazy because we had dreamed in high definition with great detail and we were both agreed that's what we were pointing at and we had pulled the money together to do that and when we came home from that little weekend trip we didn't even go home we drove straight to that house to view it with a real estate agent and then we went home and we bought that house by the way it's the house that rachel grew up in and so that that's the kind of stuff but you're you're together well it makes it makes it feel real to a detailed thing it's not this vague thing of i just want to have a pile of money right no no that's not good enough it's not good it's a life what's the life that you want what is the money by you yes the money is the tool to create the life that you want what is that what is that life that you want what is that look like for you is it the white kitchen is it the you know the certain school district whatever it is but i think and john zeloni talks about this too you do you really do as detailed as you can create that it just makes it tangible that it's not vague and it's not out of reach but it's like no no this is the type of house that realistically because you guys were being real you weren't like we need a four million dollar house we had the money for yes that's right so it's like it's a realistic in there but but to to pinpoint it and to have those details and it's and i would say too jocelyn to to i always love a timeline like map it out and you guys be like hey let's have a goal to be out of debt in three months what do we got to do to make that happen okay from there building up that emergency yes and you actually start painting it and looking ahead and be like oh my gosh in five years he's going to be starting kindergarten we may have another baby uh what does life look like in five years how much money do we think realistically we have saved up what type of house can we buy and i'm just really sorry i'm going to go to nursing then to hit that next goal yeah totally yeah go back to go back to work for a little bit i'm going to take er weekends now to hit the goal of buying a house yes or there was a mom in the lobby earlier and she was saying for 22 years she stayed home and that was their number one goal and because they did the baby step she that was her goal to stay home they did that was the dream that was the high definition dream that's a good dream so uh exactly yeah whatever it looks like but and to jocelyn you were super super broke and we've been so scared for so long sharon's dream at one point was i want to have enough money to go to the grocery store and fill up the buggy and just the bike and not southern southern southern fill up the shopping cart shopping carts the shopping cart the buggy the buggy yeah and i have to look at prices i want to fill the whole thing with food and not feel like i broke the family yep that doesn't sound like a big goal but that's a lot of money you can well today yeah yeah but oh my gosh it's more that feeling of freedom well it's a clear i want to get to this place i can see it yes it's very clear it's not a dollar amount it's what the dollars do hey guys it's rachel cruz if you're working the baby steps every major expense deserves a second and health care is one of the biggest expenses in most 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and you can get the 60% off the membership offer on your chm health insurance policy holly is in austin texas hey holly how are you i'm pretty good how are you better than i deserve what's up um i'm just wondering um how you would approach um how can i better encourage my fiancee to try to um continue to better our income without him feeling like i'm telling him he's not making enough money where's this where's this feeling coming from holly do you feel like he's not making enough money oh he's making plenty of money so um about a year ago we started getting really serious about paying off our debt um following the baby steps um trying to get set up to where we can start saving to build a house right now we're living in a house that's not a house that's getting on his you're not married no we get married um our marriage date is uh exactly a year from now well you don't buy a house or pay off each other's debt until you're married um our debts combined right now that's done for about a year and a half that's really dumb you're gonna have a nightmare in your hands that's really no no no no no please do not do that with somebody you're not married to yeah if you're not married to somebody you're not married if you want to get married this weekend you can start acting like you're married but you're not married this is a disaster what's the combined debt holly cars um yes so it was two vehicles and then um a credit card and then a car hauling trailer okay and are these both in both of your names yes oh please have a celebration one year from now and get married this weekend you are so vulnerable that your goose is cooked if something happens here this is so scary you have no idea the mess you have potentially made this is really really dangerous how much do you make holly um i make about 40 000 a year 45 and then he makes about this is all take home and then he makes about 75 000 a year take and what is it you want him to do better about when he makes twice what you make not necessarily doing better um he was told um about i would say four to six months ago that he is making the best he can make at his shop right now and you know he goes in on the weekends he works late during the week and um i've kind of tried to encourage him to you know possibly seek a different shop or a higher position at his job currently and um he feels like i'm not being appreciative and i was just wondering how you would go about encouraging um kind of like when is the end of the road of trying to increase your income yeah um i'm trying to figure out is he is he enjoying his job he does he enjoys he's a body tech um body shop technician okay um he does enjoy his job he's had a couple of problems just with like co-workers and stuff but nothing uh he's not enjoying his job he's not enjoying his job he's not enjoying his job he's not enjoying his job he's not enjoying his job he's not enjoying his job um he is 25 and i am 22 um yeah i probably honestly holly i would i would focus in more on not only figuring out what to do with your 40 000 and we start paying off some of these debts and start working your journey separate than him because you guys are not married um and it's one thing to tell him that you see potential in him and what he's doing. But he may be very content with where he is right now, and he's not making a bad living, you know? No, not at all. Yeah. I'm just curious how those conversations go, because he's not feeling appreciated, apparently. Yeah, it's kind of back and forth. Sometimes he has a lot of feelings towards him wanting to better himself, wanting to become a shop manager, potentially, or starting his own business, as far as that goes. And then other times he's kind of down in the dumps about it. I do think that when they told him he was making the most he can in his shop, he was not very happy about it. And he really wanted to move, and then he kind of changed his mind. Yeah. Well, I don't think there's much that you're going to be able to do to change his mind. I think the only thing. You can do as a. Fiance. No, as a fiance, you can't do anything. As a wife, the only thing you could do would be to. You don't have the leverage from the fiance position to lift or to do anything, because you're still in the negotiation phase, believe it or not. So you're barking up the wrong tree. But once you're a wife, then the thing you could do would just be say, honey, I think. What I see. What I see in you. I see that you could run your own business, and you'd have to learn some skills that you don't know yet about running a business, because being a body shop tech is different than running a body shop. It's a different set of skills. You have to learn the business parts of it, the marketing and the accounting. Sometimes being 25, doing what he's doing, and really getting good at it. It's not a bad thing. It's not bad. It's like he's. But if we started planning and said, okay, five years from today, we have a goal of you opening something. Let's start saving towards that, and you start reading books, about business and learning about business. I think you could be. I think you can make three times what you're making and own your own shop and have guys like you working for you. And I think we can get there, and I think you can get there. And as your wife, I would love to help you do that. I honestly think you're doing it from the wrong position, and you're not listening to me. So that's okay. You go do what you want to do. But I'm telling you from having sat in this seat for almost 40 years that you guys are. You are playing with fire. And if you don't get burned in this, I'll be shocked. And so please do not buy a house for someone you're not married to. You are doing what we call in legal terms a general partnership. And if he dies and there is no will, you will own a house with his mother. This is the kind of crap you're playing with that you don't even know about. And you think I'm just being mean and telling you to get married. But you are really walking across the lake of fire and asking to fall in it and get your butt burned. You are playing with about four different things there that are going to take off your head if you guys aren't lucky. You might luck your way through this, but you might not too. And so please, if you're going to own cars together and buy houses together, get married first and do your celebration a year from now. But you're not listening. So you're not going to do it. No, I can tell. Really. I've been doing this a while. You never know. You never know, Holly. So I think you can encourage him from that position to go do something with his life. But, you know, yeah. I don't know. Something wrong in the air. Something wrong. No, they're just 22 and 25. No, there's something wrong in the air. No, I think they're young. Sorry, that sounds demeaning, Holly. But you're young. And what she doesn't see either is that, you know, engagement, there's zero legal protection for either of you. And he or you in four months could be like, I think I'm done, you know, and you walk out and that's it. And then for the rest, And now you own a trailer that tows cars. For the next three years as you're trying to get out of debt and date and all of this, you got the ex. And I mean, it's just, it is not worth it. It's not worth the risk. Keep your money separate. And that's for other people listening, right? I mean, Holly, they're in it. But like, when you are dating, keep it separate. Do not combine finances. And then once you are married, even when engagement, but once you are married, yes, combine. It is so funny to me on the show. I don't know why it is like this. There's so many couples like that that are dating, engaged, and everything's combined. And then we talked to married couples and they refuse to combine. And I'm always like, how is this? How is this happening? It's so bass-ackwards. Oh, I know. But yeah, there's just, it's the protection. There's just not, there's not any. And, oh, and the worst is the co-signing. And then we get the call and they're like, I co-signed with my ex-girlfriend and she's not paying anymore. And I can't find her or the car. Yeah. And I mean, it's just like, they're just, there's so much life that can happen. And when you're not legally married, you get to just walk out. You get to just leave. At least with a divorce, you're having to go through a court system and, you know, have a wall. The judge will make you pay it then. Yeah. But there's a lot up in the air, Holly. So, I'd lock it down if I were you and get married. This weekend. One of the biggest mistakes homebuyers make is talking to a realtor and shopping for houses before understanding their real budget. And that's how you end up falling in love with a house you can't afford and trapping yourself in a bigger payment than you can handle. That's why you should talk to Churchill Mortgage first. Churchill shows you what you can actually afford, not just what a bank will approve. And with their certified homebuyer program, your financing is completely secure before you shop. So you won't miss out on your dream home while you're waiting for pre-approval. I've recommended Churchill for 30 years because they help you buy a home the Ramsey way. So here's your plan. Contact Churchill. Know your numbers. And then when you find the perfect house, you're ready. Go to churchillmortgage.com slash Ramsey offer for a special offer only for Ramsey fans. That's churchillmortgage.com slash Ramsey offer. Or click the link in the description. Welcome back to the Ramsey show in the Fairwinds Credit Union studio. Rachel Cruz, Ramsey personality. My daughter is my co-host today. Erin is in Charlotte, North Carolina. Hi, Erin. How are you? Hey, guys. How are you? Better than we deserve. What's up? First of all, I just want to tell you you've changed our lives. Like, we're in baby step two. And I mean, you guys, our marriage, everything is just on such a trajectory that I never could have thought that a few years ago we'd be there. So thank you to you guys. Thank you. Well done. Way to go. I'm going to cry. No. So, okay. So currently, we're in baby step two. We have paid about $76,000 down in the last two years or so. Way to go. Thank you. We have about $33,000 to go. Okay. Now, our question is, we have a mortgage on the house now. Our plan is, once we get everything paid, get our emergency fund, we want to take a couple years. Our plan is to buy a house, a new house in a different location. We kind of want to move out in the country a little bit. And our plan is to save, we want to save, take about two or three years, save hopefully up to about $150,000, $200,000, you know, depending on, you know, life and situations. But, so, to use on a down payment on the house and plus the equity in our house now. Yeah. So what were your, how much equity do you think you'll get out of that house at the time you move? You know, unfortunately, I made a lot of stupid tax decisions, as you would say. We refinanced the house way too many times and the last time right before we started the baby steps. So, unfortunately, the mortgage we have now, it's only a few years old. It'll be two or three years from now, you said, right? Yeah, yeah, true. So it's going up in value in Charlotte, North Carolina, isn't it? I, you know what, I don't know. I guess we could see what it's going to be like then. But right now, we owe $243,000 on the house and the last time we had it appraised about three years ago, it was at about $310,000. So, it's probably worth $400,000 a day anyway. Yeah, well, hopefully, fingers crossed. But my question is, at least by then, it's going up like 2%, isn't that what? Okay. Yeah. Okay. Well, that's good. So, my question is, the money that we're saving in the next few years, should that go into a high yield savings account or should we be putting that money on the principal of our mortgage since we're going to sell anyway and use that on the down payment of the house i put it on the principle of your mortgage all of it yep really okay above your emergency fund yes you wouldn't save any cash or like um you know not for the move not for the move okay um okay yeah that's kind of what i was thinking and i know sometimes they say you should have you know a certain amount of cash what's your uh for closing i mean i mean you may want to have a little bit for the actual mover and the closing some closing costs or something like that but you're going to get all the money out of this house when you sell it it's not like you're giving the money away or spending it it's going to be there it's just stored where you can't get to it and what's your mortgage interest rate what's your mortgage interest rate uh it's 4.99 okay which is more than your h than your high yield savings is paying true so it's almost like a forced savings account aaron yeah yeah as you're as you're putting it in you're like we'll get it out yes in equity but it's not sitting there for a beach vacation to grab or you know what i mean like you really you it makes you it forces you into that goal and if your plans turn left and you end up staying there and paying off the house then you didn't lose any ground true yes that's a good point too yeah i don't i don't know that that's going to happen i think you probably will live your dream because you've been executing on the other part of it beautifully so i think you're probably going to play through so i think two years from now three years from now you sell this house it's going to be 450 500 somewhere in there and um probably based on the numbers you're giving me anyway and you will have reduced the principal dramatically during that time so you're going to walk out with this big fat check to buy this house in the country with that's going to be beautiful and you will have been making 4.99 on your money not bad really for that situation and you won't accidentally go buy a bass boat with it so not that you would because i don't think you would but um he might do that i don't know you wouldn't i can tell race is in new york city hi race how are you living the dream how are you doing better than i deserve what's up so i just graduated from law school this past may and took the bar and i have some law debt or student loan debt that i need to pay off and i'm planning on paying it off as fast as possible good and i was wondering would it be worth it to refinance the loans i have to get a better interest rate or does that even matter since i'm just planning on paying it off as soon as i can what's the balance um 104 when do you think you'll pay it off how fast um we've got it calculated out to i think two and a half to three years okay and what's your current interest rate so it's separated in between six loans the highest rate is is just a little over nine percent at nine point two percent i believe and when i did something through sofi today um it said they could give me a rate of just under six percent if i remember correctly but i'm not sure your aggregate is not six percent already do you not have loans that are below six no none okay no none of my loans are below the lowest is seven i don't trust so far any further than i can throw their stadium so i want you to get i want you to get some other people to look at it all right okay and um so they didn't pay for that stadium by giving you the best deal so uh the stadium sponsorship so um you know um but student loans at race are the one area that we would consider refinancing you get one shot these are federally insured right yeah yeah you get one shot so shop around and check on it and try to find a company what's the company we used to have a lot of money we used to have a lot of money to endorse it's gone um they were a good little company i can't think of their name off the top of my head but we had one on here for a while that was doing that and they were they were dependable um but here's the thing let's pretend that you can go from six to nine on the entire thing at why refi on your why refi no yeah no why refi doesn't do it that's private yeah it's private yeah yeah yeah private only yeah um the uh question of the day yeah thanks uh for your private student loans though if they're in default check out why refi but race that's not your uh not your problem so the if you can move the entire portfolio is not at nine what do you think the aggregate of the portfolio is the average through the whole thing eight probably eight or a little under eight okay let's call let's call it eight and let's say you could refinance it to six that saves you two on a hundred thousand paid off over two years means at the end of the first year you would have paid off fifty thousand of it and so your average balance that you're saving two percent on is fifty thousand dollars and so that is one thousand dollars you're going to save through this whole exercise okay and you don't have a one that if you want to do it it's okay but you don't have a one thousand dollar problem you have a hundred and four thousand dollar problem correct meaning that if you're paying this off in two years to your point earlier the way you asked the question was correct race was it does it really even matter because i'm paying it off so fast and the answer it matters about a thousand dollars okay assuming you can't beat sofi's number and you might not be able to but um if you want to do it it's okay you get one shot at it but the important thing is to find the other hundred and three thousand during the two years by living on nothing not going out to eat and starting your law career on beans and rice rice and beans and get this mess cleaned up that's the important part that's 98 percent of the equation hey guys dave ramsey here every day on this show we help people work through real money problems and figure out what to do next now you can get that same kind of help anytime with ask ramsey ask your money question and get answers built on ramsey principles we use on the show whether you're making a decision or just want something explained ask ramsey is here to help it's fast simple and free to use go to ramsey solutions.com and try ask ramsey today that's ramsey.com kat is in des moines iowa hi kat how are you hi i'm doing well how are you guys better than i deserve what's up uh my husband and i are wondering if we should move forward on an opportunity for financial freedom um yes of course you should what kind of a question is that now what tell me about it what's the opportunity um so my mother-in-law would like to sell us her home and about 10 acres of land for what she has left on her mortgage um she wants to help us she knows we've been through a lot in the last few years and she is ready to move on from that property she's tired of maintaining it when she doesn't even live there how does taking on a mortgage equal financial freedom well the opposite right but we would be selling our home um in a different area of the state and if we sold it even for what we paid for it four years ago which it sounds like we would get more for it after talking to a realtor um we would be able to buy the land and property outright okay so you currently have a home that you owe how much on uh we owe 177,700 and it's worth what uh well when we bought it i mean the realtor told you the other day you think you can sell it for what uh he said to that what we bought it for would be easy but he's anticipating we'd get a little bit more he didn't give me an exact number so what do you think the number is going to be in real life when you put it on the market what's it going to sound like probably around 230 um it wouldn't be much more because we did okay 230 and so there's only 50,000 bucks okay minus some expenses so probably around 230 and so that's only 50,000 bucks okay minus some expenses so we're probably going to walk away with 40,000 and her mortgage on this land is only 40,000 she said 30,000 yeah okay and what's the land and house worth probably more than what our house is it looked like from what she's going to give you a $200,000 gift yes yes we yeah it would be a huge gift for us nice gift and what does your husband do for a living he is a machinist and he will be moving being a machinist there yes um so there are opportunities there but it is a lower income area which is kind of where we're The whole area is lower income? I'm sorry, what was your question? The whole area that you'd be moving to is lower income? Lower income than where we're at, yeah. It's not, there are opportunities, but they're harder to come by. Do you like the house cat? Would you guys have moved there if the opportunity, if this whole deal wasn't happening, would you guys willingly want to move there just for your own family? Yeah, I would say so. My husband has been on third shift, sorry, for a while. And I don't know, it's just been really hard for our family. We've been through a lot in the last year. What have you been through? He had emergency surgery in December of last year. Um, I, we had another baby, which is wonderful and amazing. Um, but I broke my ankle, so he's had to take, uh, less pay because his, his, uh, job doesn't pay FMLA. So he's had to take some unpaid time off because I was recovering from a broken ankle while heavily pregnant. Um, and on top of that, with him being on third shift, it's been, it's been really hard on our family. We have five kids and I homeschool and I've just watched my husband change. It feels like he's barely surviving. So moving to this land, you go with you. Right. You still got five kids and you still have a husband that's a machinist. Right. You're thinking you won't have to work third shift. Is that kind of the straw that. Yes, that's the hope. And he has to work third shift in order for you guys to live where you are today. He has not been able to get a job with similar pay. That is not third shift. So even through his job, uh, he brings home 1200 a week when he's not working overtime and he usually works overtime. So usually it's about 1600 a week. He's making about $60,000 a year. Yeah. Yeah. And the place that you're moving. Okay. Um, so here, here's the problem. I, I'm a little bit afraid that you think you're going to run away from all of these problems when most of them are moving with you. You've still got a broken ankle or had one. He's still going to be a machinist. And, um, now you're going to be in an area that's not as economically viable. And it might even be harder for him to make this kind of money. So, um, I, I love the beautiful generosity of your mother-in-law and that's all wonderful. Um, so, um, I mean, there's other options. Okay. Option one, stay where you are. Option two is take the deal. And the only way you would take the deal is if he first has a job, you cannot move over there if he didn't have a job first. Right. Okay. So he's got to go find a job and then we can say yes to mother-in-law. That's option two. Option three is she sells the property and gives you the money. And you pay off your house and your husband finds a better job in the area where you are. Okay. It's the same thing. You know, I don't think she wants to do that, though. I think there's still. It's the same thing. She still gave up the money. Why does she care where the money goes? Is it the property sentimental to her? Yeah. Her. So what happens when you want to sell it? you're stuck i don't know yeah i don't do that okay if you have to buy a property if you have to take on a property that you can never sell or never do anything with no thank you i'll pass okay if she but so only i mean i would i think it might be better for your husband to get a better job that's not you know in the area where you currently are and everything's already set up and just pay off your house with the proceeds of the sale of the farm um but it sounds like there's all kinds of emotional complications there that are going to be emotionally complicated so you're jumping from one fire into a frying pan because now you got mother-in-law breathing down your neck about everything you did with the house she gave you because it comes with strings attached yeah ropes attack hangman's noose attack gosh don't say that i mean really it's bad you cannot get rid of it you're stuck in it and well i gave you that house and and now you're stuck in the country and your husband can't find a job he loses that job where he finds yeah you got five kids you think you got problems now uh it might not that might be a trap you need to be on the front end it sounds great but if they're i mean and honestly cat i would i would assume you guys are going to be leaving friends and you know possibly a community of people of where you guys are and it's it's just a lot to think through um where the the knee jerk is oh wow we basically get a we get a house like that's paid off but then when you start untangling you've written this narrative in your mind that it changes your life and it really doesn't it might change it negatively uh and then somehow that this you know no mortgage is going to make everything okay and make all the things that are causing you to cry go away and all the things that are causing you to cry are going with you five kids and a husband that's a machinist i mean that and he's probably exhausted i mean i i can hear you just tired very very you're probably just tired all of it so i'm just wondering is is there a career difference you know a different decision in that and that clears all this versus a house and a house that you cannot sell that you can't sell yeah yeah yeah so i'm going to approach her and say i think we would love to have the proceeds from it how about that mom and that's not for you to do that's for her son to do by the way you're known as your husband you do not make that phone call Thank you. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance. Well, one of our favorite things to do is have a debt-free scream on the debt-free stage here in the lobby of Ramsey Solutions. We do this show, if you didn't know, on the glass in our lobby from 1 to 4 every Monday through Friday. And so folks stop in and have a free homemade chocolate chip cookie and some free coffee and hang out and watch the show happen. And occasionally there's a debt-free scream happening as well. The only thing that we like more than that is when it's one of our own Ramsey team members doing a debt-free scream. And in this case, one of the most popular guys in the building. Yeah, look up. Here, Rachel. Rizley. Rizley, one of my faves. Rizley. Thank you, thank you. Oh my gosh. Actually, Matt Rizley, but we call him Rizley. And Madeline, I don't think we've officially met. And Madeline, right? Yes. Welcome, Madeline. I know, congrats. Good to have you. And we've got like a hundred of your team members that are not working and watching you do your debt-free scream. Sorry about that. It's a celebration. Productivity in the building has gone down, caused by you. Congratulations, you guys. Well done. Well done. Hey, congratulations, you two. We're very proud of you. Well done. Well done. Well done. Well done. How much debt have you two paid off? It was $188,000. Oh my gosh. How long did this take? Five and a half years. Wow. And we don't ask incomes, because all your friends and coworkers are standing around. That would be a little strange and weird. Yeah. So, and awkward. So, what kind of debt was the $188,000? Well, you're looking at weird people. It was our house. Yeah! And what's your house worth? It's about $400,000. Boom! Look at Rizley. Way to go. Oh my gosh, you guys. Look at you, man. Well done. So proud of you. How's it feel to have a paid-for house? Amazing. Yeah. True freedom. Now, he's the senior director, folks, of media distribution in the Ramsey Network. And so, a lot of you that see things happen with a show somewhere on the internet, it's all his fault. Yeah. And so, he works really, really hard going through every single episode and making sure it's distributed. With all nerd probabilities and analytics and everything out there and does a great job. a great job. And so a lot of you have found this show because of the work of this man. And so we really do appreciate him. So how's everything? You've been here, what, seven years? Yep. A little over seven years. Working here. And how long have you been on this journey? Yeah, this journey started about 15 years ago. To condense that 15 year story into something really quick. I was a baby Christian. I was really skeptical of the whole Christianity thing. And I decided, hey, I've got something important in my life. Let's see if this prayer thing works. So I remember praying at the time, hey, do I go, Lord, to an in-state school and accrue no debt? Or do I go out of state with some friends and accrue debt? And the next day, I went to a men's event. And Dave, you were on the screen at Willow Creek, basically yelling at me to not go into debt. I can't imagine me doing that. And so it was a double whammy. You know, I realized prayer works. And also, I became a rabid fan from that day forward. And every week, I'm listening to the show. And then you come to work here. Yeah, it was a dream come true. Totally get dunked in it. Yeah. Well, and then you got to watch the show every day. You're totally dunked in it. Yeah. I have to analyze how this segment does. That's right. That's right. You're going to be looking at yourself. Okay, how long have you guys been married? Eight years. Eight years. Okay. So you've been working, this time with this guy who went Ramsey crazy. Oh, yes. To the point he comes to work here. Yes. And is has he been hard to live with during this time? No, not at all. My dad raised me with the money mindset. So so you guys were on the page. Yeah. Was this did you guys have consumer debt before this? Or was the whole the whole thing was just the house? Yeah, that's just the house. Okay, so you moved here, took the job and then later bought a house and then took five and a half years to knock it out. Yeah. Okay. Way to go, dude. Yeah. Way to go, man. Okay, so we talked about when you're paying off the house, we always say that's kind of like the intentional step, right? That you want to enjoy life and all of it. But the extra goes on the house. And some people go crazier, and they just stay intense. Where were you guys on that? On that scale? Would you say? We were on the intense side. We weren't we weren't gazelle intense. We went out to eat once a month. But once a month, you splurge you. But there was a piece that left us because this is the only debt that we've ever had. And so we were very intentional together. We would talk about money every week, almost every day. Hey, what's our goal? What are we going towards? And we really wanted to pay off this house so that we could live and give like no one else. So you're saying when you bought the house took on the mortgage, the piece left and you wanted it back? That's right. Okay, making sure I understood that. So good. Very cool. So what were things that you guys you mentioned the out to eat thing, but what did you what did you say no to? Honestly, a lot of trips and vacations. Both of our parents were in Jersey. So we didn't go home often. Yeah, is it worth it? I say so for sure. Yeah. Yeah. Now that you're free, how's it feel? It feels amazing. We honestly can drop off a hat, go take a trip and that feels freeing. Yeah, you can do anything you want to do. Yeah, payments. I mean, you do anything you want to do. It's pretty incredible. So man, talk to the person out there who's thinking about this. They're going I don't know if it's worth it or not. Is it worth it? It's so worth it. And there's nothing flashy about our story. There was no big paycheck or payoff. I didn't inherit anything. And so it was a daily choice to do something hard. And if you're seeing this or listening to this right now, you have a choice before you to do something hard and take that next incremental step because it gets easier over time. And so when we had a tough decision, it was, it was relatively easy because we were just on the same page about everything. And so I just encourage you guys to take the next right step when it comes to your, your money journey and that snowballs into the rest of your life. Yeah. Have you, have you run out the numbers of if you just invested the mortgage payment and where, where it's how many millions that's going to be? Oh yeah. Yeah. I'm old school. I have a time value of money calculator. Oh, I like it. Yeah. Yeah. An HP 12 C or something. Yeah. Okay. Good. I like it. Very cool. Yeah. So you can run that out. You don't even need the Ramsey calculator on the website and you can figure out that this is millions and millions and millions of dollars. How old are you guys? Well, we're 33. Oh, I'm 33, 32. Okay. So early thirties paid off house. Yeah. And we had a $400,000 house and we're kind of, I'm a loser. Uh, I, I, I had a goal of paying it off at 30, but, um, you know, I'm, I missed that goal, but I don't know. I have a house at 33. I think you're going to be okay. Yeah. Yeah. The extra restaurants were worth it. Enjoy your life. That one restaurant a month. That's what did it. No, no, that's not, you guys are impressive. I'm so proud of y'all. Thank you. Very, very well done. And, uh, we certainly love the work that you've been doing here. Uh, and the team loves working with you as, as, um, is obvious with them all standing out here to cheer you on today. That's very cool. So, um, pretty, pretty um, what was the driver? What was the motivation under this for you too? Yeah. Um, we have a very clear goal of, uh, where we want to be a long-term, um, early on. Um, it's really fun. I'm seeing the guy next to me. Uh, we wanted to support missionaries long-term and I'm looking at the guy who was in, in, in China and doing missions work. Um, and he came here to work here. I brought him. Um, but when he came over, I said, man, it would be great if we can house missionaries when they're in between things, or they're getting ready to go out to missions or they're coming back. And so someday we'd love to own a big plot of land, um, put some houses on it so that we can serve the kingdom that way. Well, you're going to be able to, that's no, that's a no brainer with the math, the way it is in your situation, just a matter of when that's all, it's not going to be next week, but you'll be there. You're going to be there before you know it. Well, congratulations. Okay. Now you got no payments in the world. What's the first thing you're going to do for you to, to celebrate big, something big. We're going to get Madeline a newer car. Yes. Good. Good. Madeline needs a better car. I don't even know what you got, but you need a better car. Yeah. Great. Good job. All right. Risley and Madeline. No, it's actually Matt Risley and his wife, Madeline. Let's make sure we get that right. 188,000 paid off house and everything at 33,000. That's a lot of money. Three years old. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. And little Liliana in there. My gosh. Precious. Beautiful. Precious. Beautiful. Precious. Beautiful. Precious. Beautiful. Precious. Beautiful. Precious. Beautiful. Dave Ramsey here for more than 30 years. I've been talking to folks on the air and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our every dollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the app store or Google Play. Our scripture of the day is Luke 637. Do not judge and you will not be judged. Do not condemn and you will not be condemned. Forgive and you will be forgiven. Robert Louis Stevenson said, don't judge each day by the heart of your heart. Don't judge each day by the heart of your heart. background. I'm 29. I'm married. I'm living in an apartment. my wife is out of a job right now and brings me to my question should i liquidate my brokerage account to pay off my truck what do you make i make 71 a year are you what does your wife what did your wife make when she was working she was at 75 000 a year are you able to live on yours we're doing all right will she get a job will she go back to work do you think soon we've been looking there's a potential opportunity but we haven't heard too much more about it okay how much do you owe on the truck i owe just about 26 000 how much is in the brokerage 28 000 okay if you guys are um not in the middle of an emergency and it sounds like it's kind of medium i would write a check today and pay off the truck there's no reason i'd have borrow on my truck to have a job a brokerage account and that's basically what you've done um the um the down you know it you may want to wait two weeks and get her a job and that would make it much more comfortable to do that um but it sounds like you guys are going to make it okay until she gets a job so it's not like you're going to need this money right right uh how much is her car worth oh it's a 2009 nissan so maybe 500 or for lucky okay okay i was just saying how long you've been married uh it'll be a year in october you should give her your car marshall i have to give you the i have to give you the unfair uh information that it's federal law wife gets the good car okay so yeah uh but yeah we're gonna have to move her up in car quickly as soon as uh you guys that's your only debt right that is the only debt i want to move her up in car with cash after she gets lands a new job you guys save up some money and let's get the emergency fund of three to six months expensive do you have other savings i have a roth ira and the 401k and then a little bit of cash in my savings account how much cash in your savings account four grand okay okay well that's a good little buffer too so you'll have six grand that you could get to if you needed it after you pay off this truck yeah pay off the truck though too into the savings and you we're building an emergency fund and we're building an emergency fund and we're building an emergency fund of three to six months of expenses as soon as she lands a job let's save quickly and move her up in car uh so that way you get to keep your truck and don't have to give it to her but uh i i want her to land a position pretty quick to bounce back emotionally from the job loss because she's got this huge potential i mean your household income doubles when she lands that back and so i don't want to um i don't want to jump into something bad and i don't want to take something for less so let's let's let's continue to work the network and find that next position as soon as possible but as soon as you're comfortable with it i would pay that off and if you're comfortable today living on your income then i'd pay it off today for sure steven is in st louis hi steven how are you doing better than i deserve i appreciate it how are you better than i deserve what's up um so i've been listening to you guys for for a few months now and i really appreciate all the really practical emotional and role clarity that you have with all of your decision-making processes so i was curious about a car as a lot of people on here are curious about um my wife and i kind of live in two very unique financial realities um i am a trust fund kid but i have not used it really apart from education um so a little bit about my wife and i's combined income is probably about seventy five thousand dollars a year and uh we just had a new little kid he is doing great now but at about two weeks of life he had to have a pretty major heart surgery and something and yeah no i appreciate that luckily insurance is covering the vast majority of it but i went a little bit more into dad mode and wanted to get more protective about things particularly about just wanting to make sure that we have the best safest car for him um so currently my wife primarily drives a 2015 ford flex it's been pretty through the ringer in its own career it has about 120 000 miles on it um i would personally be very pro into upgrading her into a newer car um something that is either pre-owned just certainly newer certainly has like the newest safety specs all of that sort of good stuff um just to make sure that her and the the kids are best taken care of okay what does you make so i make seventy two thousand dollars a year but you said that was the household income yeah yeah so my my wife used to work um we moved to missouri a couple years ago okay um and when we moved she left her finance job where she was making probably close to a quarter of a million dollars oh wow um yeah yeah so we were doing well we saved up a lot of money then um a lot of it is still primarily in like retirement funds so we heavily funded the roth ira and the 401k but you have no cash just on the side no no so we we have some cash all so bought a new house when we moved to missouri luckily we are debt free from all that when my grandpa who was so how much is in the trust uh so in my trust it's about 2.8 million and what is your draw on that um i don't touch it i've never touched it um but you have access to it um if i were to ask my parents they would give me access to it so your parents are the trust and it's at their discretion correct yeah correct and you're how old um young 30s and you're thinking about buying a car that's how much um probably no if we were to get a new car probably no more than like 50 or 60 000 okay uh we tell folks not to buy a car that is more and to have vehicles that total add up to more than half their annual income so no i would not do that okay but i do have i'm sorry wait a minute wait a minute we tell people not to buy new cars unless they have a net worth of over a million dollars and i'm i guess you do because i guess your net worth is 2.8 million okay and so pay cash for it um i is your fear like lifestyle creep that you're gonna start tapping into this and spend it dave is that dad is that your okay that's your that's your hesitation steven too are you scared to touch it are you just like oh my gosh this is so she's driving a three thousand dollar car why don't we go halfway and buy a thirty thousand dollar used car no so that's that's one of the other options and considerations yeah i think i think that's what i would do and i would do that more as an exercise in restraint than i would as an actual mathematical guideline because you've been really restrained about dipping into the i mean you're showing good discipline in that i mean and um you're not a trust fund trust fund kid in the sense of like a stereotype i don't think you're gonna destroy anything if you bought the 60 but i just like the restraint of i'm gonna buy used as half my annual income and i'm gonna stay with that and it's still enough to take care of this i'm not being emotional about the kid that puts us our the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus Thanks for watching!