Live from the headquarters of Ramsay Solutions, it's the Ramsay show where we help people build wealth, do work they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with Jade Warshaw. And we are here to take your calls. And you can call us at triple 8825-5225 and we'll be answering your questions on life and money and career, relationships. All of it? All of it. So let's get to the phones. This hour we have Amy in Pensacola. Hi, Amy. Welcome to the show.

Hi, how are you?

We are doing great. How are you?

Good.

How can we?

Really excited to be on the phone. So I have a bunch of questions, but my husband and I are definitely in need to help with overall financial plan. We have more than over a million dollars in debt.

What's it in? Yeah, what's the debt in?

Well, we went through a really long school life.

Okay.

Student loans. So our student loan was a million when we graduated.

Oh, my gosh. Wait, you can't just cruise past that. You got to tell us more.

What are your degrees in, Amy?

So we are both in dental college. Well, we actually didn't have any loans for college. Dental school. We had loans. Specialist residencies. We actually didn't have loans because my husband served in the military. So they pay for that. So just dental. Four years of dental loan. We have a million dollars together.

Okay. But you earn a lot of money, right? I sure hope so.

Now we came down to like 750. We're proud of it. But since he's in the military, we don't actually earn that much money. But the good news is he's getting off of military and we're going to start a new job where our minimum.

Income will be about six hundred k. Okay, wonderful.

That's good. Is this a business that you're opening a practice together? Is that what it is?

Actually, no. So we wanted to make sure our life is in a little bit less of a death before we even think about opening our own.

Sure.

That will require a lot more capital.

You just said we, so I didn't know if you were working together or you're just going out and getting separate jobs.

No, we are working together in a.

Practice together, but we don't own them.

And combined, you'll be making $650,000.

That will be a minimum?

Yes.

When does that start? Summer.

Okay. So soon. And these are guaranteed jobs and salary. Like, this is what you're going to make?

Yes. So it's a per production. So that's going to be a minimum. And if you make more. You're going to get more.

Well, that's the great news of this story, Amy. So for you guys, I would work to live on. Throw everything at this debt and you get it paid off in a year and a half and be done, and then go right off into the sunset making $600,000 a year debt free.

Like, your numbers sound really big, but ratio wise, it's the same as the person who calls in and makes $60,000 a year and has $100,000 of debt.

That's right.

It sounds a lot because a million dollars is just a big number, but the ratio is the same. How are you living right now? Tell me about your numbers right now. What is rent cost? What are you bringing in right now?

So that's another question. Thanks for asking because that will be my next question because we now technically own a house but not pay off.

Okay.

So we are planning on. Well, in the beginning, before I started listening to you guys show, I wanted to either rent this place and buy another place in our new job will be because we have to move and buy another house. But then I was thinking that our student loan is so high, we decide to sell this house, pay all the mortgage.

If you sell it, what will it bring?

Doesn't bring much because our financial advisor told us to pay as minimum as possible. So we actually didn't pay that much off.

Okay.

We bought this not that long ago, actually, not even three years ago. So we are trying to sell this and then buy another house.

Amy, talk in real numbers because right now you're saying it's all kind of up here. I want to know real numbers. If you're moving, give us more details. If you move, where are you moving from and then where are you moving to? If you sell the house, how much will it bring and what do you plan on doing with that money? Like, give us a few more details so we can really dig in with you.

So we have a mortgage, too, left for about three hundred and seventy k. Okay.

So you owe 370. If you sell it, how much will you take home, do you think, after the sale? Maybe forty k. And that's after fees and whatnot from the realtor and everything like that. Okay. So the 40K, you're thinking you're going to roll that into a new mortgage when you move this summer for this job? Is that what you're thinking?

We were thinking that, but now we're thinking that maybe we should just rent a place.

I'm thinking that, too.

And that's $40,000. More to the student loan. Yeah. Make some progress. Yeah. So, Amy, here's going to be your struggle. It's not going to be income. And usually when we're talking to people like this, we're like, you got to get side hustles.

All this.

All this. And honestly, with what you guys have, you can have this paid off in a year and a half, but your problem is going to be, Amy, that you guys are going to. If me and Jade were in this position, I would just tell you, like, both of us with our spouses, our decisions would probably be very similar. We're getting a one bedroom apartment. We're living as cheap as possible for two years. And, Amy, the biggest struggle that's going to happen is you're going to get into this new job, into this dental world, where people are making insane money, which is great, and they should. They do great work, but they're going to be living insane lives. I mean, to make $600,000 a year, the trip season. Yeah. The trips, the trips, the cars, the out to eat, the parties, the gay. I mean, everything you could imagine, Amy, is the world you're about to step into and you're not going to be a part of it. And you're going to say for a year and a half, 18 months, 24 months, we are not going to live like we make 600,000. We're going to live like we make 60,000.

And I'm telling you, the faster that you can just stay in this mentality and get through this, Amy, the unbelievably better part this is going to be, not only are you going to appreciate that 600,000, even more.

Right?

But you're done with this mess. I mean, yes, your shovel is big and a million dollars is big, but it's a million dollars, I think to anyone, it's a gasp. It's a lot. And if you just act normal in this, you're going to keep this around for five, six years, and you'll make the payments and you'll figure it out. But it's just going to be floating where we want more intensity and be done. And then you can go get a bad a home. I mean, you can get so much.

Here's the upside.

So much with this.

The upside is you're moving somewhere where you're brand new and you don't know anyone and you don't have any heirs to keep up. Do you know what I'm saying? It's harder if you had called us and it was five years later and you were in this job making 650. You had the house, you had the cars. You were used to this lifestyle, and you had to cut back. It'd be difficult, but you haven't even got into it yet, and you don't know anybody yet. There's no standard to keep up. You can fly under the radar, do your thing, and then after a year and a half, you can pop out like, what's good? Let's take a trip. Let's spend some money.

Amy, the faster you get rid of this, I'm telling you, the faster that burden lifts. And you guys, I'm so glad you found us. I know you're a new listener, but I'm telling you, this is the proven plan. So do it. Do it. Well, we're excited for you, Amy. Congrats on the big education and the big salary, but make some right decisions here. This is the Ramsey show. Hey, guys.

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All right, Jade, my favorite season in life is coming up. Do you know what that is?

Tax season.

Tax season. I'm just kidding.

We're both just kidding.

Yeah, it's the worst. And what's so hard, too, Jade, is taxes can be so confusing. I mean, there's all these terminologies. Do I work with a pro? Do I do it myself? It just is a confusing thing.

Yeah. And if you buy what some tax services out there are saying, they think that you'll never be able to get a grasp on this, Rachel. They think that you're just not smart enough. You need know, use them, and they'll tell you the truth. But we think that you deserve the truth, and we're going to tell you the truth. And so here's today's tip. If you're ready for it, you have two choices for claiming tax deductions, and understanding the difference can save you big bucks. So basically, we're saying we're going to teach this to you. You can understand it. It doesn't have to be like this big mystical equation. We can help you through this. So two choices for claiming tax deductions and understanding these differences. You can either take the standard deduction or the itemized deduction. You've probably heard those two phrases before. Both options can lower your tax bill. But which one is the best? That depends on your tax situation. So let's take a closer look, shall we?

Yeah. Okay.

Taking the standard deduction is the easiest one, and it's the one that most people do. It subtracts a set amount from your taxable income based on your filing status. So let's say that you're single and you make $65,000 a year. The standard deduction is going to knock off close to $14,000. So you're just going to pay taxes on what's left, which is $51,000 of your income. It's like a freebie, right? It's like a discount. It's a coupon, if you will.

Yeah. And you can just take it and go, whatever it is.

That's right.

Take it. And then you get a little bit more work on the next one.

Yes. The next one is the itemized deduction. And this does take more work. That's because you actually have to subtract all of your deductible expenses from your taxable income. So you're doing this one by one. So you're looking at things like medical expenses, charitable gifts, state sales tax. I'm already starting to fall asleep right now as I'm talking about this. If it adds up more than the standard deduction, so if it's more than 14,000, based on your tax bracket, it's worth it to itemize. So that's how this thing works. For more help in making sense of these income taxes and filing with confidence, you can go to ramsaysolutions.com tax. That is ramsaysolutions.com tax.

So great. Well done. Well done. Itemized.

What do you do?

Standard deduction? We itemize.

I itemize all day, baby.

Yes. Do you? Yeah. Do you all keep up? Well, I feel like I could be writing off more if I kept up with stuff. But it's like the big chunks, like our charitable gift, that kind of thing that we for sure just do. But I was just talking to Winston about this the other night. I was like, man, I should keep receipts more and all of it. But to me, sometimes I'm like, oh, if it's $20, is it worth actually doing it, but people that do it and who have jobs in areas where they can take some of those deductions, it's worth it.

You have to be a real bean counter. You have to be like every, which is the way my mother in law is. So that's perfect. She does her taxes.

It's great.

It's great.

All right. In regards to the phones, we have Tord in Hartford, Connecticut. Hi, Tord. Welcome to the show.

Hey, how you guys doing?

We're doing great. How can we help?

Yeah, so basically, I've been financially stupid for many years, and today my car actually got repossessed, and I was trying to.

Today, literally today. I'm sorry.

It's all right. My biggest question is, I have enough money. I don't have any savings right now, but I'm getting a lump sum for my unemployment, about $4,000. And I don't really have any bills. I'm a truck driver. I'm over the road. I don't pay rent or anything like that. So it's very easy for me to save a bunch of money. My question would be, what is the best approach to this? Should I owe about $18,000 in the car? I think it's worth about. They were selling a used law, about 16, 17,000. From my research, from a credit standpoint, since they already repoed it would, my best course of action is to have them to sell it and then have me pay the difference, which I'd be able to do, or should I get it back?

How many payments behind are you? Like, how much is it going to cost you to get it back?

Four. About four payments behind. So minus $2,000, I was paying $500 a month.

Okay. Was it a voluntary repossession toward.

No, I was expecting to get the unemployment lump sum a lot sooner to pay it, and I just didn't get it in time.

Can I ask what's caused you to be late on payments in general? What got you into this cycle of being late for car payments?

Yeah, I've been suffering with addiction problems for many years. I was a closet addict, okay. No one really knew about it, so I was just doing the bare minimums to survive and support my habit.

Okay.

And I'm now been sold for two months and trying to get everything back together again.

Wow.

Congratulations. That's huge. We talk to a lot of people who have dealt with addiction in their story, because it does usually lead to a lot of financial issues, for obvious reasons, and we always want to applaud those of you that have worked this part of your life. Because I think that's the biggest celebration, honestly, even more so than the money. I mean, the fact that you've stayed clean for two months and you're walking this path and doing the work. Yeah, we very much applaud. So we want to be able to help you with the money side, which is why you called.

It. It feels good stitching things.

You sound like you're in very good spirit. You sound super positive.

Thank you.

So you owe $2,000 in back payments. What about the cost of the repo and everything like that? What are those fees associated?

I don't know at the current moment. I know Connecticut state law is $25 per day for storage. That's the maximum.

Okay.

If I was to do it right now, it'll be about $2,500 but I doubt I'll get my unemployment check within the next two weeks.

What other debt do you have? Tell me more about your financial situation.

Well, that's a good part. Since I've been really bad financially, I was never able to get loans for anything. I only have about 8000 consumer debt.

8000 of consumer debt?

Yes.

Okay.

Is that credit card mixture of credit card not paying cell phone bills regular.

So you have things that are in collections or like that you're delinquent on?

Everything's in collections, yes. Everything.

Okay?

Yeah.

Rachel?

Well, I know for me, I think a goal would be to get this car back because you're going to be able to sell it. Well, I mean, you'll only be in the whole $2,000 and it's an asset for you, right. Versus it just going off in the wind and you owe $18,000. I would do what I can to talk to them and say, hey, in the next two weeks, are you sure that you're going to get this check in two weeks? That's my only fear. You thought you were going to get it earlier and you did it.

It's the government. I'm not sure.

Yeah. Are you working now?

Yes, I'm working now.

How much are you making a month?

I make about 80,000 a year. So about five, 6000 a month.

Okay.

So the unemployment was just back unemployment pay like it was a lump sum they owed you on top of what you're.

Yeah, I've been trying to get it for two months. So it's been a while. I was unemployed for about two months. I still haven't gotten anything. It's been a back and forth.

How many months ago were you employed. How long have you been making consistently $5,000 a month on your own?

I've been here for a month.

Okay. So what I would do toward, I mean, if I were you, because like you said, it's the government you're dealing with. You thought you were going to have it two months ago. You don't. I would hate for you to depend on something that you don't have control over for a big asset like a car that you could be able to get back and sell privately and take the difference and all the things. So if I were you, you said you have no expenses. I mean, I would try to save, I would work extra. Do what you can to save that 2000. It probably ends up being 2500 after all the fees that you're going to have with it, those back payments, and try to save that within the next two to three weeks. And if you get the unemployment check.

As well, it's great.

That's gravy. Yes. But I would make a plan on my own. And again, this may be you working outside, doing some extra work, even outside of your day job. I mean, doing what you can because I think owing 18,000 without an asset and you're starting from zero to pay, that just seems so much more defeating than getting it back. Right. Working a month. But I would call them, contact them, make a plan, put it in writing.

And before you get off the phone, Christian is going to pick up and give you every dollar. That's a budgeting app, so you can see what to do with this $5,000 that you're making every month. Thing one, like Rachel said, get the car back. And thing two is get current on all of your bills, cell phone, water, all of your utilities. Get current.

Yep. And Christian, throw in a total money makeover book as well to get you on this plan because we're cheering for you toward you've done the hard work. You can do this. This is the Ramsey show.

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So many of the callers that we have been getting, I just like in recent months have been new to the show. So many people say have just started listening in the last month or two. And so usually when that happens, it's because somebody they know has shared the show. Maybe they've youtubed something about money and we come up on the side. But whatever's going on, if you enjoy the show, will you share it with your friends and family? It's one of the best ways to get the word out because we want to help people all over the world now, which is amazing that we're know just here in America. Jay, thanks to the Internet and are and YouTube, we're all over. And we hear from you guys literally all over the world who want to get in control of this idea when it comes to your money and the tool that it is in your life and how to put it in the right position in your life. Because for so many people, it is such a struggle and it's the thing that controls them. And we want that narrative flipped for you. And so again, one of the ways to bring that hope and to have other people hear about this is sharing the show.

So share with your friends and family. Subscribe as well. Leave a review on any of the podcasts or shows that you listen to because we read those. We want to know your feedback. So we are here for you, you guys. That is our job. We sit in these studios day in and day out because we want you to get control of your money, your relationships, your career and all of so. All right, we're going to go to the phones, and we have Joey in Manhattan. Hey, Joey, welcome to the show.

Hey. Hi, Jaden, Rachel, thanks so much for taking my call. I also just want to say I'm a huge fan of you both and the show. So I really appreciate it.

Well, thank you, Joey. We appreciate that. Thanks for listening. How can we help?

Yeah, so my question is, essentially, since I turned 18, I've been so fixated on just putting pretty much all my money into retirement accounts and, like, stocks. And it seems like I blinked and now I'm 23 years old, still living at home, and I essentially have not enough money to move out and or buy a house because they're so expensive. So my question is pretty much, is it okay for me to stop putting money towards retirement to save up cash quicker because I feel like I'm losing out if I sell the stocks. But that might also be an okay route to go, too.

Yeah.

Yes, to all of it.

So you've been living at home, you've been stacking up lots of money, putting almost all of your income into retirement savings. What do you have in stocks right now.

So just in stocks and mutual funds, it's around 31,000.

Okay, so non retirement is about 31,000. Do you have any other money saved anywhere else?

Yes. So I have about a little over 5000 in a high yield savings. And then also just $1,000 as like an emergency fund.

Sweet. So $6,000 that we could call an emergency fund. And then do you have any debt? I'm guessing no.

I do, unfortunately. I have 19,000 from college. I know. That's the kick in the bucket for me.

Okay, so just the 19,000. What about a car?

No, other than that, I have no debt.

Okay, and how much do you make? What do you do for a living?

I'm in advertising, so I make around 62,000 per year.

Okay. What do you bring home of that pre retirement?

It comes out to about a little over 45 and change after everything.

Okay, so that's good. You have a good income starting out for yourself, not a whole lot of debt. And you've got some money laying around, which is good. If I woke up in your shoes tomorrow, Joey, I probably would liquidate the non retirement stocks for sure. And I keep the $1,000 set aside that you have, and I'd take the stocks and some of your emergency fund, I'd pay off the 19,000. And then with what's left, I'd say, okay, this is the beginnings of my three to six months of expenses. And so the way that I would calculate three to six months of expenses for you, since you live with your family, is I would start looking around at places that I want to rent and I'd go, okay, if I were to rent this place, how much is it going to cost me? Along with food and groceries and everything like that. And I would build a three to six months of emergency fund based on those numbers. Because the fact is, at some point you are going to move out and you're going to want that emergency fund to cushion that lifestyle. Right?

That's true.

Fair enough.

Yeah. So as we're looking at these numbers, I think you'll have to pay some taxes when you cash out the stocks. But I would go ahead and just do that. And you have 5000 in the high yield. So I think with everything left, you'll probably have, I don't know, around 15 ish thousand. So that could just be your starter emergency fund, as Jade said. As you start pricing out some other things, you may want to bump it up a little bit more. But I would keep that in a high yield savings and with your $1,000 emergency fund, so you'll have anywhere from $15,000 to $17,000 and keep that in a high yield savings, kind of earmark that as your emergency fund. And then, yeah, I think, Joey, your next best step is to be looking around and yeah, you may not want to buy right now, whether it's going to take you just forever for a down payment, but renting and I think getting out, I think that's a great plan. Once you kind of hit that adult stage in life and you have your own job and all of it, you're kind of itching and you're a smart guy.

I mean, you've been investing a ton, which is amazing, but I would just let that money work for you. And since it's not retirement, honestly, I would not put them in single stocks. I would just do something safer with an emergency fund. And then once you kind of figure out, okay, where am I going to live, then that's when you can press play again on retirement and start putting 15% of your income into that.

So if you had an ideal timeline, what would it be to get out of mom and dad's house? Because I always like having a clear. I mean, the numbers are going to speak to that.

Yeah. Ideally it would have been yesterday because mom and dad spaghetti and meatballs are getting old, but probably in the next year or two.

Okay, so what I would suggest in that year or two is start paying your mom and dad something so that you can show renters history, which is going to be helpful to you. A trying to get a place on your own that you'renting or if you do decide at some point that you're going to come out of this and buy. Being able to show twelve months of rental history is really important, especially if you've paid off this car and you've gone to the point to where your credit score disappears because you don't have any other money borrowed, that's going to be really important for you. Does that make sense?

Okay.

Yeah. So in terms of renting for my parents, is that something that they would have to claim on their taxes? Like, how does that go on record?

I would just. It's going to be something that you're going to be able to show. This money came out of my account, whether I wrote them a check for $300 or whatever it was, and they cashed it and it was for rent. And so you're going to be able to show that as a renter's history and it's just something that whenever you buy a house or even sometimes try to get an apartment without a credit score, they want to see that you've.

Paid some level of history.

Some level of history. And that's just going to be helpful for you.

I never thought about that.

Yeah, and I probably would, too. Joey, maybe be a little bit more aggressive on your timeline of getting out of your parents house. Maybe do it in six months, eight months.

Love it.

Because I think it's just good for you. And then that's when you have to start making these real decisions where you're like, okay, I have rent due. Is this salary going to support me? Do I need to be looking? You start making other critical moves in your life to keep you sustained, which I think is really important. So thanks for the call.

Rachel, real talk. Let's go back in time. You're 23 years old. There's no winston in the picture.

No, there is. Well, let's pretend there was. I was a baby when I got.

You're just a single shoddy. Are you dating or going with a guy who lives at mom's house? Parents.

It would be a want situation. I'm not like a black and white deal breaker. Yeah, it's not like, absolutely not. But, yeah, there's a little piece to the puzle. Bit of like a.

Okay, all right, you want to know more? I want to know more.

Versus if it's like, oh, no, I'm out on my own, doing my own life. Have my own life. Have my own say. There's a level of responsibility there that I think that's another thing when you live with your parents, it's these parts of life that you don't even think about, that you have to think about when you're on your own. I mean, it's everything from having milk in the refrigerator to, I mean, whatever it is. But there is so much that you're like, oh, my gosh, I have to problem solve a lot in life, a lot more when it's this situation.

23 years old.

What about you?

Well, let's move the timeline now. He's 26.

Oh, yeah. Joey's 26. Yeah. Joe, you got to move out.

Once the timeline, the older it gets, it's like it becomes less of like a.

Yes and more of like a. And you know what? The saving grace, where we sit today in 2024, the housing market's crazy. The rent, all the right people. We do live in a crazy time.

But, like, a roommate is different than living with parents.

Oh, yeah.

I'll take a roommate all day.

Get a roommate. Joey. That's a great idea. I know we have to keep it real. It's tough out there. Joey, you can do this, though. We're glad you called. This is the Ramsay show.

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Welcome back to the Ramsay show. I am Rachel Cruz, hosting this hour with Jade Warshaw, and we are taking your calls. Up next, we have Tate in Montgomery, Alabama. Hi, Tate. Welcome to the show.

Thank you, guys. Thanks for taking my call.

Absolutely. How can we help?

Well, first off, Rachel, you and George only on smart money happy hour. Just to throw that in there.

Oh, I'm so glad. That's a fun podcast. We have fun on that show.

Me and my wife, we're on baby step two. And in the past seven months have paid off almost $21,000 in consumer debt.

Nice.

Very good.

Congratulations.

Thank you. And so we've got two car loans left, and we're trying to figure out if we should just stay intense like we are, and we can be done according to the debt snowball calculator by next April. Or if we get the bug of being even more intense and think about selling one and trying to pay cash for another one. And I just wanted your thoughts on that.

Yeah.

Okay, give us some numbers. What do you owe on the first car? What's it worth? And the second?

Okay. The first one, we owe 29,000. And I'm actually upside down in that one. About between eight and ten grand. I could sell it and make probably 20 on it. Okay, and the other one? Let's see. We owe 21,000, and it's worth about 30.

Oh, wow.

Okay. And how much do you guys make a year?

150.

Okay.

What's with car number two? That it's worth so much more than what you owe on it. Did you put down a big down payment?

Yeah, we actually bought a kind of brand new car right after Covid hit and found a good deal and traded in. Family got bigger, so we traded in for a bigger one and had a really good equity on the car we traded in.

So that one feels like the no brainer to me, since there's money to be made on it. Right?

Right.

I mean, honestly, Tate, there's a part of me I would probably keep. The one that's upside down, it's 30 grand. But you guys make 150, and, yeah, you're not out of sorts. With the amount of debt that you owe compared to your income, we don't want it to reach over that 50% of what you owe. And you guys aren't there. You make 150, you owe about 50 on your cars. So, again, if you guys wanted just to buckle down and say, hey, for the next nine to 1011 months, we're going to pay off these cars, and we're going to stake gazelle intents and all of it. But you've paid off 21,000 so far, which is incredible. But you got another 21,020, 9000. So it's like, how much do you love these cars? Or how much do you just want to be done? So if I were you, I would just be done with the 21,000, make nine, go buy a car. Be done. Sell them both.

Yeah, my wheels are turning. I'm just giving you options. I'm not saying that you have to do this, but I'm wondering what it would look like, because, basically, the amount that you could sell car number two for is the amount you're upside down in the other car. So if you wanted to clean slate this in some way, but that would cause you to have to buy two new cars, or at least one decent one that fits the whole family. And then you're starting with cash, and you're just building up from there. You're not in a rush. So there's time to think about that. Like, in the next six months, how much money could you save up to replace one of these cars in cash?

Let's see. Probably around 10,000.

So that's kind of interesting to me. There's some interest in saying, okay, if we continue paying our payments and maybe even a little bit more on all these for the next six months, we can look up and say, okay, we feel good about this. We've got 1015 grand saved. Let's sell car number two, let's take the money from that, and let's clear the upside down on car number one. And then let's buy ourselves a $10,000 van in cash. And now we're off to the races. We have not a payment in the world. And now in the next six months, we can save up another $10,000 in cash flow. A second vehicle, which would cause you to have a six month limbo when you're a one car family.

Yes.

Just interesting to think about. You have options.

Yeah. Because at the end of it here, in a year, you have either a newer $9,000 or newer, quote unquote newer to you, $9,000 car and a paid off car in twelve months. Or what? Jade said you're out of debt that much faster. And in twelve months you have two cars, again, that are new to you, but you're out of debt faster. So it's kind of like, do I want to be out of debt faster or do I want to be saving for a car faster? But in a year, you get to the same point, hopefully still having two cars.

That's right.

And no debt. But which avenue do you want to take? It is interesting math. It kind of is like one of those. Is it a coincidence or is it not that the.

It's about a little bit of what you're valuing in the moment. How old are your kids?

Five and two.

Five and two? Yeah. I mean, listen, when you have the option, it's good. Whoever's driving the kids around most might be like, I am fine with paying off this car that I have because it's a nice car and it does what I want to do, and I'm fine paying that car off in the next six months or however long it's going to take, as opposed to the plan that I laid out. So you and your wife have some things to talk.

And we. What's funny is we have talked about all these scenarios. We're just trying to find a. Oh.

You wanted us to say you need to do.

I'd do the one that I laid out. But I'm not saying it's right.

I'm just saying Jade would do that. I would probably lean towards paying off the second. I wouldn't want to be stuck with these two cars. And it take a year, 14 months to just be paying off a car. I would do one drastic move if it were me. So I would probably pay off that second car, get 9000, get another car for that, and then work my butt off and pay off that first car, the 29,000, because what kind of car is it?

The 29,000?

I'm just curious.

It's a Toyota Camry.

Okay.

I just have a hard time with 30,000 for a Camry. I don't know why. I do. I'm like, let's get something else.

Some dumb decisions led to being upside down in the Camry.

Okay, I see. You know what? Now that I'm thinking about it, I do like Rachel's option. Because you get one car paid off, basically as soon as you can sell it, which is great, and you get it replaced with a cash car. And then the other one. Yeah, you can save up and work.

Because you guys make great money. You make 150. So again, you're not crazy outside the bounds of the car loan. Even if you wanted to keep both, Tate. I mean, not to keep mudding the water for you. Again, from the mathematical standpoint, you guys could just work hard and pay these two cars off. But what Jade and I are saying is that amount of sacrifice for a car is not worth it for me. I would cut that time in half because I don't want to sacrifice my life that long for a car. So I'm going to drop one of them, pay the other one off.

Yeah.

And keep going.

Not for a Camry. I can't sacrifice for a Camry. I could sacrifice even a jeep wrangler. Rachel. There you go.

I don't know if we helped you, Tate. We may have confused you even more. But again, you're not going to go wrong. You're doing the plan. You're doing it well. And the point here is that you're actually working a plan, Tay, and you're going to look up in twelve months, your life is going to look different. It's just a matter of how fast you want to do it. So, yeah, I think getting one of them off the plate just feels like a whoo.

Okay.

We're making it because you know how hard you've worked to pay off that first 24,000, $21,000 that you guys have already paid off. Right? I mean, it takes a lot of intentionality, a lot of work just to do that. And the question is, do you want that?

Again, listen, I'm of the mind of anybody listening, if you're in debt and you have a car worth 20,000 or more, and you can sell it and you're not upside down, and if you could possibly make a profit, I'm taking that deal just about every time, because it's easy money to get back. And $20,000 is a lot of money. Sometimes we think, oh, it's just a car, it's $20,000. I'm like, no, if you have $60,000 of debt, you sell off a $20,000 car. Now you're only in $40,000. I'm taking that bet every single time.

It's not a bet.

It's a deal. I'm taking that deal every single time.

Yeah. Because if there is a silver lining when it comes to the car debt, if you're not upside down, is there is an asset to sell. Right. Like with credit card debt. Yeah. You can look around and see the crap that you bought that maybe you can try to sell, but sometimes you paid for an experience that you can't sell that a vacation or something. So that is when you have those assets that you're able to offload to get you further in this process. It is. And it is amazing to me, Jay, the amount of people we talk to who have done this, they've sold the car, they've done the sacrifice. One of the comments that we hear a lot is, like, we just didn't realize that we didn't need all this stuff to begin with. Right. When you live without it and actually know that you can have an incredible relationships in your life, you can have all these other parts of your life that are great without all the crap you realize, oh, my gosh.

Okay, fine.

We can do this. We can do this. So we are cheering you on, Tate, you've got this. You've got this. Well, thanks to all the guys in the booths making the show happen. Jade, thank you. Always being a great host with me, and thank you, America. We'll be back live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with Jade Warshaw, and we are answering your questions. So give us a call at again, it can be about your money, it can be about your career, your relationships, your life. And we are here to help you sort out the problems, the thoughts that you have, and hopefully get you to a good conclusion. So starting us off is Danielle in Hartford, Connecticut. Hey, Danielle. Welcome to the show.

Hi, Rachel.

Hi, Jade.

I first have to say I'm so incredibly thankful for the opportunity to speak to my dream team. So thank you for taking my.

Are we your dream team?

Danielle, I love that.

We love you at the end of this call.

I'm so glad. I'm so glad. How can we help?

Yes, we took some notes just so I don't forget to kind of paint the full picture. But here's the situation. So my husband and I are currently on baby steps four, five, and six. And we agreed that you both would be the voice of reason for our current dilemma. Okay, so there is a home in our neighborhood about six doors down that the sellers approached us about. They knew that we were looking to potentially move and get a bigger home, and we love our neighborhood. So it kind of all worked out.

This was about six months ago that.

They approached us, and when they approached us, we stopped throwing money at our current mortgage and started stashing away cash. So we have about $100,000 in savings right now.

Good. Sorry, go ahead.

No, just saying good job. Oh, thank you.

So I'll give you the numbers in a moment. But our question is, is this transaction Dave approved? And if so, what's the best way.

About going about it?

So our current home is worth about $450,000, and we have about 110 left on our mortgage at 2% interest rate. We're looking to purchase the new home for 650 with, of course, today's interest rate. The caveat is that the sellers are looking to close by May 1, and then they want to remain in the home for 60 days thereafter. So we would obviously have to stay in our current residence prior to moving, and we couldn't sell our home and then roll that equity into a down payment like we originally had hoped, putting us in a similar position as we currently are and allowing us to kind of pay off our mortgage in about.

A year or so.

So you'd have to carry two mortgages at once to make this deal work, correct? My answer is no.

Your answer is no.

Based on that alone, I wouldn't even need to hear any more numbers, even if you could easily afford this next house, blah, blah, blah. Because they have to close May 1, and because your deal has to be contingent on the sale of your house, and that's not possible. You could put your house on the market and see if it closes by May 1. And if it does, now we can talk. But there's no way I would carry two mortgages.

Okay.

And that's my concern, because we're so close to being done with our current mortgage that I just don't want us to be.

My question is, Danielle, you said you have $100,000 saved, correct? We do, yes. Okay. And you have 110,000 left on your home, correct? Correct. So part of me is, like, just pay off your house.

Loving it.

So that's been my feeling, and I've just been very torn because the home is a little bit bigger. It's a nicer property. There's a pool on the second home. We're still looking to cash flow our kids colleges and retire with dignity. So that's why I'm calling.

So now the question is, is it better to have a home that's a little bit smaller, that's completely paid for and it's yours? Or is it better to upgrade and possibly have a little bit more of a mortgage? Again, correct.

How much do you guys make a year? About 500. Okay. So if I'm getting this math correct, Danielle, if I was in your shoes. So we're in February right now. You got March, April, May, you got three months. Plus, they are needing to stay in the house another two months. Is that right? Really?

Two months you've got, because you've got all of March, all of April, but.

They'Ve got to close March, April, May, and then they're going to be in the house June and July. Correct. Correct. So you have five months. Okay. So what I would do, Danielle, I would pay off your house. I would take that money. I would pay it off. And then you have five months to just continue to save and have some money stashed away. And then when you go to move in, move in. And then that means the equity, ideally you would sell your house at 450. For what? It's. I mean, what could you sell your house for? About 450. Okay, 450. Yeah. So then you have a $200,000 mortgage making $500,000.

Listen, it sounds good, but it is hard to go from no home payment to. Yes, but 200, no mortgage to mortgage.

Yeah, but at $200,000 making $500,000, you could have it paid off in a year if you guys lived on $300,000. You have your house paid off in a year. Yes. You have your house paid off in.

A year with the steps in doing it. I'm worried about carrying the two mortgages.

But it sounds like you're, you wouldn't have to.

I would pay it off.

Got it.

Okay. Yeah. But again, and what Jade said earlier is a really valid, valid point, though, is to have this discussion of, like, what do we want? Right? Because I can tell you, my in laws, they actually upgraded house when they were empty nesters and they live on land now. They have a bigger home. So when we all go in, it's wonderful. And they love it. They love it. And so they did the opposite of downsizing like some people do. And it worked for them. That's what they valued. And that's great.

Right.

Where other people are like, oh, no, I don't want this much work for a house.

True that.

I'm going to go down and that's what they value. Right. So as long as the numbers work, which in this plan, they would, I wouldn't want to carry two mortgages. I would go ahead and just pay off your house and then sell it. And then, yeah, you'll have, golly throw all that at the house. And then you have $200,000 that you owe at that point.

So let's go back and clarify one little piece because she said the neighbors have to close by May 1. Right. So even if you pay off your house, let's say you pay your house off and you decide, yeah, I do want to get the house that's six doors down. She'd still have to sell within before closing period in order to get even if she bought her current house outright, you'd still have to close on that to get the cash to buy the next house.

Correct.

So I still don't want you think, hey, this house is paid for. We can still do this deal and take the mortgage on the other one. Even though you have a house that's paid off. Does that make sense?

Yeah.

Either way, you still got me nervous. Whether you pay off the house or not, you've still got to sell it and close and get that money before you make the next house.

And then what do we do between.

May and that 60 days where they remain in there?

I guess we would have to have.

The same contingency in our sale.

Yes.

The dominoes would have to fall pretty perfectly.

One lender mentioned a heloc, and I.

Was even worried about. That's what I'm saying.

I don't want you to feel desperate about this.

Yes.

You're in a great situation, and I don't want your want to get this house to cause desperation and to cause that to make a bad decision when you're in such a great financial situation.

I appreciate that.

Very.

Good advice.

Yes. I'm so glad that you called. I know if the dominoes fell perfectly, it's a beautiful story. Like, oh, gosh, we get what we've, you know, we're not in a crazy financial situation in that point. We can know pay it off, but the dominoes have to fall really well.

The average days on market right now is what might make or break this.

Yes, that's fair. That's totally fair. So great. Well, thanks for the call, Danielle. This is the Ramsey show.

This episode is sponsored by Betterhelp. Hey, this is Dr. John Deloney. And some people think relationships have to be easy to be right. Sometimes that can be true, but more often, great relationships get that way because both people put in the work to make them incredible. Therapy can be a place to work through the challenges you face in all of your relationships, whether that's with friends, people at work, your significant other, or even how to get along with yourself. And if you're thinking of starting therapy, try betterhelp. Therapy isn't just for people who've experienced trauma. It's great for building skills so you can become the best version of yourself. Betterhelp is completely online, so it's flexible enough to fit your schedule. Just fill out a short questionnaire to get matched with a licensed therapist, and you can switch therapists at any time for no extra cost. Find the path forward to making all of your relationships incredible. Visit betterhelp.com Deloney today to get 10% off your first month. That's betterhelp he lp.com deloney.

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Love this. All right, today's question comes from Rob in South Carolina. He says you often warn listeners to beware of lifestyle creep. I totally get that as a concept, but I think I may have the opposite problem. We are doing well and our baby steps multimillionaires, very good. But we could have better options for our future if we cut back even more on our expenses. Or maybe I feel that way because for many years I spent way beyond my means and was just totally stupid with our money and I'm afraid I will relapse. How can I get over this mental block and start enjoying our success? Wow. I love this. Listen, I think I can relate to this a little bit. When you've kind of screwed up with your money and you've had to go back and fix all these mistakes and you feel like you've lost time and now you've done all of that work, you're on the flip side. It can be hard to turn that switch off and say, okay, let's enjoy some of the fruit of our labor and let's enjoy the lifestyle that we've created because of our smart behavior.

And there's part of this here where I do feel like you need to trust yourself and trust that you've changed your behavior and that you've become a different person and live your life in a state of confidence as opposed to in a state of fear. Because I think if you're doing all of these financial choices with fear as your driver and fear as your motivator and kind of like penance as the driver, I think that it turns something that's supposed to be really beautiful and really great into something that's kind of negative, and I don't deserve it. And it kind of sucks the joy right out of it. And the whole purpose of doing this is the later, it's the so that, and there's joy on the other side of that. And I really want you to experience that in the right measure. What would you say, Rachel?

Yeah. Well, with money, we always talk about giving, saving and spending, and you want to do all three for a reason. Number one, generosity. I mean, it brings joy to your life unlike anything else. And that's why we always say, live like no one else. The leader, you can live and give like no one else. So that giving is so crucial. I think saving is so crucial so that you have a future, so that you do have that security, and you're being wise. You're changing your family tree. There's a legacy that's changing a mindset with delayed gratification, and that's important. And honestly, Jade, I think the spending aspect is not just to enjoy your life, but it also is so that money doesn't have this handle on you, this hold on you. There is something about opening your hand. Generosity can be that visual as well, but also letting some money go, because you can almost become this hoarder. And there's a level of unhealthy control in that extreme that is just as damaging as someone that just goes and spends everything. And what I think is so important is keeping money at its proper place.

And I think in our world today, it becomes something that we put our identity in. We put our worth in. It's become so elevated, almost like a God that we worship so much. And when that's the case, that's an unhealthy view of money. Money should be down below. It's a tool to create a life that you love. That's what it's there for. It's not a thing to worship or to run after. It is to create peace in your life, give you margin and be able to help people. And so in order to do that, I think that some savers to an extreme, it can be held up here. It can be this level of, I'm putting it in an improper place. So I think spending, you have to build another muscle that actually gives you some freedom in a weird way I'm saying this as a spender.

I agree with what you're saying.

Yeah. There is something there that is so powerful. And so from a tactical sense. We talked to a lot of people, Rob, that have the same situation, a lot of people that have gotten out of debt. I even said that you felt this even in your. And so, you know, create a budget. Know a little bit at a time, month after month, up just a little bit. You don't have to go extreme. But practice spending. I mean, practice forcing yourself to go out to a great dinner. Yes. And go and spend some money and go have a great dinner. Get two appetizers. Like, go and enjoy. Right. You can start small and you'll start to see. Okay, again, it doesn't have a hold on fear.

It's not lifestyle creep. Here's the way that I define lifestyle creep even in my own life. And, Rachel, you speak into this, too. If you're doing the things that make you a financially responsible adult. Right. You've paid off your debt. You're budgeting every single month, you're carrying the proper insurances, you're investing for your future. And like Rachel said, you're practicing generosity and you're challenging yourself on generosity. If you're doing all of those things and you still have money left over to increase your lifestyle, it's not lifestyle creep.

It's just you're doing good.

You're just doing well, and there's nothing bad about that. And you should be able to increase and creep up your lifestyle if you're increasingly doing well and you're doing those, what I call five pillars of financial, personal finance, that's kind of the, if you're doing right, then you get to do right, like, you get to do good.

Hope that helps you, Rob. So, great. All right, let's go to the phones. And we have Devin in San Antonio. Hi, Devin. Welcome to the show.

Hey, thank you for taking the call.

Absolutely. How can we help?

My question is, should I stop putting into my retirement fund for the next year or two to completely get us paid off all our debt?

How much debt do you guys have left?

We have $43,000.

Okay.

How much consumer debt or mortgage debt?

Consumer debt. We have mortgage debt, but we are actually in the process of downsizing our house as well.

Okay, great. How much do you guys make a year?

So we make around $110,000.

Okay.

And if you stopped contributing, how much have you calculated how much you will have back in your paycheck?

Yes. So depending on my overtime due, to being working as a firefighter. It could be around 700 to 1000 a month.

Wow.

Nice. Amazing. Well, Devin, yeah, I mean, that's exactly what I would do. I mean, honestly, regardless of the numbers, I was just more curious to see how quickly that gets you out of debt. But, yeah, whenever you are getting out of consumer debt, pausing retirements. When we're saying pausing, you guys, because you'll press play later, don't worry. But you pause retirement because any extra income you can have in your paycheck, and again, that includes pausing retirement. If you got a huge tax refund this year, go and change your exemptions to get some cash back in your paycheck. That's overtime, that's cutting expenses, whatever it is, to have more margin to throw out the debt is what we are focused on. It's the number one thing. And so investing is part of that, which it freaks a lot of people out, Jay, when they hear the math and they're like, oh, my gosh, but my 401k, that's free money. They're going to match it. But there's something about this focus, intensity, and getting out of debt that much faster that then you're going to up your retirement savings to 15% of your income, which a lot of people don't even do that.

They're doing the match.

Yes, a lot of people, they're doing 4% of their income. So you're going to be able to definitely catch up and be fine financially, even if you pause for a year, which is what we would recommend.

Okay, perfect. Because that was my biggest thing. My wife was 100% due, and I was just a little hesitant to do it just yet.

What causes you to be hesitant?

My biggest thing was, okay, to catching up, and she was telling me that, hey, in the end, you're going to be putting that extra in and you'll catch up within a year or two.

Yes, that's exactly right. Yeah. And that's a lot of people's fear. And the great thing is, Devin, I mean, it's one year. How old are you guys?

We're 30.

Oh, yeah. You got plenty of time, Devin, you're good. I'm on your wife's team on this one.

I am, too. And, you know, it's kind of funny. You have to look at it. You almost have to be fair, intellectually fair, if you will, because a lot of people are nervous to stop contributions because they're like, I don't want to miss out on this money. I don't want to miss out on this money. But I'm like, as long as you're making debt payments, you're missing out on all of that money that you're putting in payments every month. We have to think about it in both settings. You're either missing out on money in the form of car payments and student loan payments. And for most people, that's thousands of dollars every month. And we're worried about the 3% match and the $200 over there. So it's kind of like we've got to align on both sides of the equation. And, I mean, the truth is, when you start investing, I'm really proud of people for wanting to invest and being forward thinking in that way. But if you do it before you're out of debt and before you have the right amount of savings, your retirement investment becomes your emergency fund. And people dip into that and have to pay the taxes and fees because of it, and they form bad habits because of it.

So there's a way to do this in order so that it's actually retirement savings and that you can enjoy it at the right point.

So. Good. Well, thanks, Devin, for the call. Hope that helps. This is the Ramsey show. Welcome back to the Ramsey show. I am Rachel Cruz, hosting this hour with Jade Warshaw, and we're taking your calls. At next, we have Sharon in Springfield. Hi, Sharon. Welcome to the show.

Hi. Thanks so much for having me today.

Absolutely. How can we help?

Well, my husband's been handling our finances for the last. We've been married almost 20 years, and to the point that I really don't know what's going on in our finances, largely, I say in a lot of ways, he controls a lot of what we spend and how we spend it, and we'll have financial discussions and we'll talk about it, but I don't really have a full understanding of our financial picture when we make decisions.

Okay.

And I can't get him to sit down and make a budget. Now, we've been through the Ramsey programs. I think we've been through them twice. We've even been out of consumer debt in the past. But keeping a consistent budget is a problem. I am the breadwinner in the family, and I'm wondering if it's worth just pulling my money out of our joint account and keeping my money separate so that I can at least budget part of what our income is.

Why won't he budget? Like, when you say, hey, I want to sit down and do this, what's his reason? Is it he doesn't have time?

He doesn't think it's.

What's his problem?

I think a lot of it is just understanding how to plan for little things that come up with the kids, like costumes that the kids need for programs or posters that they need for school presentations, making sure we've got money for those little things. And, of course, there's more than just what the kids.

And he doesn't want to do that or you want to do that, and he doesn't think that's necessary to plan for those details.

He's hesitant about the zero getting all of the money and giving it a name. I hear that a lot. Take all the money, give all the money a name and that zero budget.

But it doesn't mean $0 in the account. Maybe that's what's making him nervous.

I'm sorry. Say that again.

So zero based budget doesn't mean $0 in the account, and that might be really clear, like, really important to make clear to him. Zero based budget simply means.

We've talked about that.

Okay, so he knows that.

So at the beginning of this call, Sharon, you mentioned that he's more the one that's controlling all the finances. What does that mean? Does that mean, do you have a debit card to your account that you share with him, and you go and buy the costumes for the kids, or how is the money flow happening right now?

I do have a debit card. I spend very little of the money out of the account without at least clearing it with him first because I'm so blind to what's there.

Why? Why do you feel the need to ask his permission?

Because we don't have a budget. So I don't know what money is there and how to use it.

Okay, let's get down to it. Because our screen says my husband has been withholding money, has been withholding finances from me for our entire marriage. And that sounds different than what you're saying, so help us understand.

Well, yeah, he does withhold all of the information about the account.

Yes.

So you ask permission to spend because you have no idea what money is in there, so you don't want to blindly spend with the debit card. Can you not log into the.

Do you have login information, Sharon?

I don't currently have the login.

Have you asked it for him? And what does he say?

I have asked him for it, and I have tried to look at it. Not here recently, but I have tried to look at it, and I'm so overwhelmed, like, I don't even know where to start.

So he gave it to you or he didn't give it to.

Didn't. He logged in himself.

He logged in himself and let you look over a shoulder.

Sharon, that makes me nervous. Yeah. I think at this point, I would be okay with you having your own account. But hear me say, Sharon, that this. It's going to fix one part of it, that you're going to have money to be able to spend, but it's not going to fix your marriage. This is a temporary solution to really dive into the deeper parts, because, Sharon, what makes me nervous is, and we've seen situations like this, that if you don't know where the money's going.

I.

Would be very highly concerned that there's stuff going on in other parts of your marriage that you have no clue about. Yeah.

You don't know what he's hiding.

Do you feel that?

Yes, in some.

I would. I would start laying down an ultimatum with this is. And for anyone listening right now, this is, regardless of Sharon is the breadwinner or not. Okay. So her making the money, great. But even if Sharon was a stay at home mom, my viewpoint would be the exact same, because as a married couple, as you guys, you are a team working together, and he has control issues. And sometimes, Sharon, and I'm going to just say this, and you can correct me in here, but sometimes it puts you in a dangerous situation with a lot of abusive husbands, they use a level of power and control that you can't even go to the grocery store. Has there been abuse in your marriage in the past 20 years?

Physical abuse?

No, never. Do you feel in danger? Do you feel like there's danger in your home?

No.

I feel like my husband is very insecure, and so he's trying to keep hold of the money so that I can't leave. I know that sounds terrible.

No, that's the truth.

That's very real.

What's going on? Yeah. Do you guys have kids?

We do. We've got two kids.

How old are they?

Almost nine and 13. They're both about to have birthdays.

Okay. Yeah. I would have an ultimatum conversation. And it is. You're going to give me all this login information.

Yeah.

And I want to see everything that's been going on. Any bills. Do you know how many credit cards he has?

I believe we've just got one active credit card.

I would ask him to pull his.

Credit report and pull yours.

I want to see both of your credit reports. I want the login information to all of our accounts, including retirement, including checking, including savings, any of those accounts. I want the login information. And I want them tonight. I want them tonight, because if not, tomorrow morning, I'm going to be at the bank at 09:00 a.m. And I'm opening up my own account. Because, Sharon, he has put you, and he has done this. You're not the crazy one. He has put you in this situation. So you're not being the bad guy here. You're protecting yourself.

So important. And if you ask him, hey, because of the state of our marriage, we're going to go to counseling. What would he say to that? If you said, enough is enough? We need to talk with someone, would he go or would he fight that?

He would tell me we couldn't afford it.

Okay.

How much do you make a year, Sharon? How much are you bringing in?

I know what my salary is. I make 105.

Okay.

I don't know what my actual take home would be. He's handled our taxes.

What does he bring home?

I don't know how that. I don't know exactly. I think it's around 60.

Okay. Yeah. Those are the two ultimatums. Counseling, and he's changing by morning. Or like Rachel said, you're going out and opening an account. And I just want you to know you're doing well for yourself. You're doing well, and you don't have to stay in a situation where someone is abusing you financially. And I'm just going to put it at that.

It's hard to hear.

Yeah, I know.

Yeah. Sharon, what we see so much is money issues are the symptom of a lot of things going on. And so the issue of you not knowing numbers and not having the accessibility to see what's going on financially in your home is a symptom of having a controlling husband. And there's only so much you can do. You can't change him. But what you can do is protect yourself. And if you stay on the line, Christian's going to pick up, and I want to get you with one of our certified counselors. Just spending seven minutes with you on a radio call, I feel like it doesn't do it justice. I want someone walking with you, Sharon, in this, because this is really important. This is really important. And I pray your marriage is healed in this process. It's going to be a really hard patch, but I pray redemption of that. I really do. I pray that you both come to the other side and are redeemed in this. But if not, I want you to protect yourself. This is the Ramsey show.

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Jade I want to just go back a little bit to the conversation we were having last segment about a wife. And she didn't have the knowledge of what was going on financially because her husband was keeping it from her. And we advise that she needs her own account. There needs to be some separation because there's a level of abuse there financially when you have to ask permission for everything. Those situations are on the fewer end of the spectrum than majority of couples we talk to on the show about joint accounts. Because we are promoters of having joint checking accounts. We think that that is one of the best ways to work together as a couple as you're working this plan, whether you're getting out of debt or seeing yourself as a united team. So majority of time, Jade, we get calls that they're in separate accounts and they're do we, do we combine them? Do we not? And so for majority of couples out there, joint accounts is one of the best things that you can do for your marriage. When you see yourself as a team and you work together, both sit down.

Yes.

Husband and wife sit down and do a budget together. Both have equal say in what's going on with the money. Both show mutual respect in that. And we are locking arms and we're doing this life together. We are married. We share a bed. We share kids, we're sharing our money. We're sharing our life. When we get married, we are sharing our life. And that is really our stance in this. But we always have an asterisk.

Yeah. I mean, you've got to be in a safe and healthy relationship for that to take place. And the fact is, some people are not in a safe and healthy relationship, and it can have been that way so long that they don't realize that it's no longer safe and it's no longer healthy, which is what we with the previous caller. And so there is something to be said for evaluating your situation. And it's not an excuse for, like I had posted about this a while back, Rachel, and somebody said, oh, well, my husband goes to target and just spends without telling me. So my relationship is no longer safe. And I'm like, you have to be able to read between the lines and understand what we mean by that.

Right.

And so when I wrote the book money is not a math problem, I came up with an acronym for that, for keeping your money safe.

Safe.

And I kind of say the s is you need to seek counsel if you are experiencing the a, which is addiction of any kind. So if it's gambling, it's pornography, something that's keeping them spending, spending, spending, if there's any kind of abuse. And as we saw in the last caller, a lot of people hear the word abuse, and they think, okay, this guy's slapping me around, or maybe they're talking down to me or calling me names, but a lot of times, it's that financial abuse like we saw there. They're not letting you in. They're not giving you the passwords, they're giving you an allowance. And you can only go to the grocery store and buy this. And that is a form of abuse. And when that happens, you've got to seek counsel. And then the e is for evaluate your options. And your options are like what Rachel said, you can form another account, and you can separate yourself for the time being. And if that person is unwilling to seek counsel with you, you've got to evaluate and say, what do I need to do next? Are there children in this situation? Do I need to make some hard lines in the sand?

And I just don't stand for abuse of any kind. So I have a really hard time telling anybody to wait that out. I'm like, I separate myself from that. You can always find inroads to get back. But if a person is unwilling to seek counsel on your marriage and your money, that's a hard line in the sand, and it's a hard thing to swallow.

Yeah. And to say it. Yes, and to say that. Right. But that's the truth of it, you guys. So as married couples out there, again, we are so pro working together as a team. But when one person in the situation is not working as a team and in that it's abuse, addiction, there are things there that put you in danger. That is when you have to protect yourself. And I'll say this, too. We talk to people on all different income levels, all different parts of the country, all different viewpoints on marriage and roles and a spirituality. I mean, you can get into all these nitty gritty stuff, but ladies out there, if you are a stay at home mom, you have just as much say at what is going on with the money in your home. Don't just yield that. He's going to just take care of everything. And so much more of this is less about man or woman, but personality. Because also, again, not to drag on the conversation, but I think it's important. One of you is going to be more excited to do the budget. One of you is going to be the one that's more of the nerd, we call it that they want to be.

Oh, my gosh, we can't wait for this. And the other free spirit. And sometimes the free spirits, we talk to the nerds and they're like, well, my wife never wants to do anything. And I'm like, well, listen, is she participating in it?

Right?

Is she part of the conversation? That's the goal here. One of you may not love it as much as the other, but that's.

Not what we're talking about.

But it's the idea that regard, regardless of who you are in the marriage.

You have equal say and equal access.

And equal access to your money. You guys, it's really, really crucial because that promotes health and that promotes openness and promotes communication, which is going to help in other parts of your life, in your marriage, not just money. So we want to create these good habits, you guys. And money's an avenue in that. Let's go to the phones. We have Helen in Las Vegas. Hey, Helen, welcome to the show.

Hi. Thanks for taking my call. And my question is simply this. I was ill these last four years, and I had to use my credit cards and 401 and all that to survive during that time.

Sorry. What was going on?

Well, still have issues. It's a cancer stage for me.

Sorry.

But anyway, I did get a settlement recently, and my credit cards are about $60,000. And I'm just wondering, my question is, should I just pay them off and get rid of them? I did look up to see if I could get some debt relief program or something like that, but it sort of looked to me like, you have to pay them. I don't know, and I don't want to quit paying the credit cards. Well, they do give you, like, I guess they give you some kind of help if you quit paying them, but I don't want to do that either. So I was wondering if I should try to take that money and try to make money, or should I just pay off those credit cards and just get the relief of not having to make those minimum payments on about ten credit cards every month.

Yeah.

How much was your medical settlement? How much did you get?

About 170.

Okay. Do you have any other money saved?

I used it all up.

Okay, so you cashed out retirement, everything. So there's nothing I had to.

Yeah.

Is the credit card the only debt you have?

Well, I mean, I have my house, and that's one of the reasons I didn't expect not to be working. So that mortgage is $1,800.

And what do you owe on the house as well?

A lot. All of it.

Really?

How much is that?

$400,000.

400. Okay. And are you working at all, Helen?

No.

How old are you?

71.

Okay.

So what are you living besides the settlement money? What are you living off of and what's kind of your monthly?

Are you taking $4,500?

Okay.

Social Security?

I would take some of this money, and I would pay off the credit cards, and I would take some of this money, and I would keep three to six months of expenses for you, maybe six months, because you're living alone and you've got this health condition. And then I would take the rest of it, and I would start paying off the mortgage. I'm just walking down the baby steps with you is basically what I'm doing. And so I'd love if you got to a point, you've got 4500. Do you have any other money in retirement or any other investment accounts?

No. Like I say, I have to use it all.

Yeah. And this house, Helen, is it size wise, location wise? I'm just wondering, downsize at your age?

Yeah.

If you're able to find another option for living, maybe to reduce not just the mortgage payment, but just the mortgage overall. If you can get to a place, a smaller living situation, that would relieve not just the 1800 payments, but also relieve just the total mortgage that you're going to have.

Well, with the cost of rents and everything here, it's just looking at another rent of $1,800 somewhere.

Right.

It's high. So it makes no difference that I live here, live out my life here now because of that price now. But my main concern was just letting go of $60,000 bin bamboom. If that was okay, if that's the right thing.

Yeah, I think it is, Helen. That's what I would do. And then be working to get that emergency fund and then putting the rest towards that down payment. I'm sorry. Towards the mortgage.

Mortgage. Get it paid off.

I'm sorry, Helen. Yep. Thank you for calling. Thanks to all the guys in the booth. Thank you, America. Thank you, Jade. This is the Ramsay show live from the headquarters of Ramsay Solutions. It's the Ramsay show where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with Jade Warshaw. And we are taking your calls at. Well, Jade, we're going to do something fun, something a little different this segment. And next we're going to start a segment called pick aside. And pick aside segment means that we're going to talk to a couple. We have Mark and Samantha on the line. And they are kind of in a disagreement of what to do about a situation. And so they're each going to have time to lay out their case, present.

It to us, Jade, the referees.

And then you and I are going to decide next segment, who's right? Whose side do we think? Yeah, I got my better paper ready. We cannot wait. Okay, so to start us off here with the pick aside segment, we have Mark and Samantha from Harrisburg, Pennsylvania. Hey, Mark and Samantha, thanks for joining us.

Afternoon, ladies. How are you?

We're doing, ladies. Great. We are so excited about this. I'm so glad you're both here because we can really get the.

We're.

We're still in negotiations. We just need know, impartial third party to kind of lean us in one way or the other.

I love it so much.

Okay, let's hear it.

Who wants to go first?

Well, I'll lay everything out for us. So here's the situation. My wife and I recently built a new home. So we've been in it for a couple of months now. And we're starting to receive estimates to build a patio in our backyard. Stone, nice pagoda, things of that nature. Now, we received the estimate of $50,000. We have a CD that's due to mature in July. And it should be roughly about $27,000 now, currently, we pay an additional $1,000 on the principal for our mortgage every month. So we're wondering, do we take that extra principal payment and say, for roughly 18 to 20 months, use that CD to pay cash for the patio? Or do we use that CD, put that on the mortgage to pay the mortgage off faster?

Okay. How much do you guys have left on the mortgage?

We have 109.

$109,000 left on the mortgage. And how much do you guys make a year?

Roughly 70.

70,000.

Okay. How much did you say the extra mortgage payment was that you're making every.

Month on the principal?

$1,000.

Okay.

$1,000 extra every month.

Okay. And any other debt?

No, we're on four, five and six.

Okay. That's great. All right, so who wants to do the patio? Who doesn't?

Well, I want to do the patio. Okay. Mainly my reasoning behind it is we recently lost a couple of friends here recently that are our age and don't want to put offer tomorrow and not enjoy today. So since I'm not willing to go into debt for this, that's an absolute no. That's a dirty four letter word in our house.

Yeah.

We can cash flow it, save roughly about two years. Cash flow it and enjoy the time we have with friends and family entertaining, because that's what we built the house for, is to entertain everyone.

And it sounds like you saved a lot of money for it because you said it's a new build. You've only been in it for a couple of months, but you only owe 109 on it.

Well, there's a little caveat to that, actually. My wife and I lost our house in a fire, so we were able to rebuild.

I see.

Rebuild the house without taking on any additional debt and keep the same mortgage, which we.

Oh, wow.

That's something.

And did you say, mark, you're going to save for two years in order to pay for the patio, or would you use the CD when it comes to maturity?

Well, it would be saved for the two years. Plus, with the added CD, we should be able to cash flow it.

Okay. How much is the patio?

Roughly about 50.

50,000. Okay. For the patio. Oh, I'm sorry. And the CD is the 27,027th, correct. Okay. I'm sorry. My notes, I had them flipped.

So it take you roughly a year to get the patio in two years to pay off the mortgage?

No, it takes us about two years. Well, yeah, roughly. My calculations using your guys'payoff calendar, if we just put the CD on the mortgage as well as our extra payment, it'd be paid for roughly in September of 27. So a little bit longer than that.

Okay.

September 3 years.

Okay. So, Samantha, we've heard from Mark in his scenario. So what makes you, Samantha, not want to do the patio and just want to go ahead and pay off the mortgage?

Well, I keep reminding him how Dr. John says how good your body feels.

Once you have no debt.

And I keep telling him, think how much we will enjoy this patio once we truly own this house. It's clear and free. Then we can sit outside and enjoy it. So that's basically my angle.

I don't want to have any debt.

And I think both scenarios are good, but I really want to pay off the mortgage. Not this way. You ladies.

Anyway, can I ask a question? Since you guys have paid off your debt and saved up your money, tell me something fun that you've done as a result of basically being in baby step six.

We just got back from a cruise about two weeks ago that we cash flowed.

Okay. So you feel like you guys are living, you're taking regular vacations. Is that fair?

Yes.

Okay. You both agree with that. So it's not like we're not stifling ourselves, right?

No, we're working our butts off, but no, we're not struggling by any means.

Also having.

Okay.

Okay. I'll take that into my notes, into my consideration.

Yes.

Okay.

One more clarifying question. If you threw everything at the mortgage, you'd have it paid off. You said, mark, in about two and a half years ish.

About three and a half.

Three and a half years. But then two years for the patio.

Correct.

Okay.

So in just a perfect world, in five and a half years, both are going to happen. It's just a matter of which one goes first.

Correct.

Okay.

It's great. Interesting. Okay, another question about the patio. Is it in phases? Is there some part of it that you can have now and save another part for later?

My only reservation with that is that it's always going to get more expensive. So that 50,000 then turns into 55, into 60,000 if we wait. But, yes, it could. But I don't think the original estimate will remain the same.

Oh, you're saying just because of inflation and price of goods and just things.

Going up over time and labor, things of that nature, it will get more expensive?

I almost guarantee you that as it goes.

Yeah. And what does the patio include? Be clear. Is it like outdoor kitchen and fireplace? Tell me more about it.

Yeah.

So it's a bunch of stonework, some raised planters. We're going to pipe a propane line in for a nice seated area with a propane fire pit.

Okay.

As well as a pergola. So we have a nice seated area to eat. And once again, just a nice outdoor entertainment.

What is it right now? Not the whole. What is it right now?

It is grass and gravel.

Grass and. Right. All right.

I've got enough to take my.

Okay. Okay. Mark and Samantha, hold on the line. When you come back, we'll tell you what we think.

I feel like we need a bailiff. Austin comes in and tells us.

Tells us what to do. So. Good. Okay.

We'll be back.

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All right, we're back with pick aside. And we had Mark and Samantha layout two pretty, I'd say, convincing cases. One with Mark, who wants to build a patio for $50,000. They have a CD that's going to mature next year. So that and their savings, they could cash flow it, build it in two years and it'll be great. Samantha, on the other hand, wants to throw all that extra money, pay off the mortgage. It'll take about three and a half years to pay off the mortgage. And she just said, how much? When you don't have debt, there is a weight that is lifted off and there is such freedom, such freedom when it comes to. Was that, was that a fair summary, you guys, on both sides? Yeah. Okay. Yep. Absolutely. Okay. We both have one follow up question.

I have one final question, and Rachel does, too. So mark this patio realistically, because you guys live in Pennsylvania, realistically, how many months out of the year do you think that you'll get realistic use out of this?

We should get a good seven to eight months a year out of it.

Really?

Okay, Samantha, my question is for you. On a scale from one to 1010, being I am obsessed with patios. One being I hate being outside and.

I never will use it no matter what.

Where are you on the scale of the patio of your excitement and your use and where you want to put $50,000?

Well, if we pay $50,000, you definitely should believe I will be using it.

Okay.

Do you want it, though? Would you be excited about having it and hosting out there? Is that part of your value and dream and like, oh, my gosh, how great that would. Yes. Long term, yes. Okay, so you are excited. Okay. Because I didn't want to make this decision. And then, Samantha, you feel like, oh, my gosh, we're spending all this money on something that I don't even care to. Yeah. So I wanted to make sure that you, at least would be excited for the patio. Yes.

Okay.

All right.

Let's say our answer on the count of three.

What are we going to say? Patio or mortgage? Okay. Ready?

Yes. Count it down.

Three, two, one. Patio. Were you surprised?

I'm surprised.

Did we blow your mind?

It's the opposite of what we. Well, let's tell them. I'll give. Yeah, Jade, you give your reasons, I'll give mine. And, Samantha, I just want to give you a hug right now. I'm sorry. We wouldn't.

I know. My reason would just be because you guys have done such a great job. And we say all the know, baby step four, five and six is really about intentionality. It's not about having to be intense. And what Mark said. You endured a fire. You've endured some loss. And I do think there is something to be said for making sure that you're enjoying the fruit of your labor. And I think that you guys would truly enjoy this. And at the end of the day, five years is going to pass. Both of these things are going to be done. It doesn't throw you off course. It doesn't take anything away. So that's my. For those reasons, I'm in.

Okay. And I would say, yeah, the timeline is really important. So if you guys said that you had, gosh, ten more years on either end. Right. So much longer on it, or you had six months. Right. If it was both extremes, I think my answer would be changed. But the fact that it's okay, it's kind of this perfect medium. To your point, Jade, it is about intentionality, not intensity. And here's my belief, too. I really think your income in the next five years is going to go up. And so I think you're going to be able to get that piece of paying off the mortgage faster than you even think as you stretch out this five year time frame.

That's a good point. Even now, your ratio of income to how much is left on the mortgage is so, yes, it's very healthy.

I would build a patio.

Well, I'm very surprised.

Do your happy dance, Mark.

Do your dance.

I'm happy. But I can see both sides of the coin as well, too. That for as hard as we work, that could save us two years of the hard labor in order to pay the house off faster, to have the peace of mind for it. But I can also get a little bit of peace of mind while I'm kicked up enjoying a sunset.

I know. That's Mark, you're a good man. You did not do the touchdown dance that I thought you were going to do.

I know. That's funny. So you both thought we would say get out of debt. Because I guess that's what we're known for, right? Is that what you were thinking? Yes, but I think that's really good that all of our hard work has gotten us to this point, has led us to this fork in the road. And it sounds like we can do.

Either because of our hard work and.

Because of our sacrifices. That's right.

Our intentionality.

And you know what's funny?

I'm actually smiling.

I can hear it. I can hear it in your voice.

And you know what's funny? Sometimes when you want something like Mark on his side and then we kind of open the door of like you can. Then sometimes you kind of second guess, do I really want it? Or was it more just this kind of intensity of wanting something I can't have or feel like I can't?

This story is not over.

And Mark and Samantha, let me add this note. If there were other personalities sitting in this chair, they may have given you other answers.

That is a fact.

I think Deloney would have said pay it off the house.

Deloney would have.

What do you think about George? What would.

George probably would have said pay off the house.

Ken would need to live a little. Ken would say build the patio.

Yeah, Ken would say build the patio.

But I think George and Deloney would say pay off the would. So you may have called on the wrong day. Samantha, I'm so sorry.

It's a good point.

You may have to call back then.

I know. You should do the exact same question and see what they say.

That was awesome.

You guys are troopers. Thanks so much. And y'all enjoy it.

Take a picture and show it to us when it's done.

I was going to say, yeah, tag us on social when it's done and we want to see. We can do that. Thank you, guys. But either way, you're not going to go wrong.

No, they can't go wrong.

In five years, you're going to have a patio and a paid for house. It's just which one is first. And again, you guys, when you get to that point of four, five and six, that's when you replace the furniture. That's when you can replace the car. That's when you can do. Some know, a lot of people go.

Straight through though, Rachel. It's like they feel that momentum of paying off debt.

Yeah. And it's not wrong. We just don't want you to burn out.

Right.

Because there is a part of living life. And Mark, I'll say this too, and Samantha, you can quote me on this. Don't go over budget, because whenever you're doing stuff around the house, Jade, it is the thing that just creeps. It's like, well, this stone is great, but if you get this stone, it's just a little bit more. But it's great. And then the kitchen appliances, I mean, you can really get in the spiral where you go down real quick.

That is true. And in two years time, you might find that there's more things that you.

I know. Just pay cash. Yep. Just pay cash with it. So great. Well, Mark and Samantha trooper. So great. Well, you guys, we are excited that we're actually going to be having an event here in Nashville at the Ramsay Solutions headquarters up in our conference center May 10 and 11th. And it's the total money makeover weekend, and it is happening. We love events around here. We love hanging out with you guys. And people travel from all over that come. And Nashville is such a great destination place. And so there are millions of people out there listening or watching right now. And maybe you're sitting on the sidelines. Maybe you're kind of like, gosh, I really want to jump. This is, this would be the event to really jumpstart you. This is the event to get the motivation. If you haven't started, maybe if you're in the middle of this process and you're like, man, I just need like minded people in a room. I need that extra motivation. This is for you. Maybe you're on baby step seven and you're like, we just want a fun weekend in Nashville, and we're going to hang out with the Ramsey personality.

Love that.

Because we're all going to be there for the weekend. And so again, we are really excited. We're going to have some talks. We want to be able to dialog with you guys in the audience. And John and I, john Deloney and I did this with our money and marriage event, which we loved, is we did so much. Q A. Because hearing from people, just like the show, where it's caller driven, hearing from people and their stories and their situations is so helpful for other people to learn. And so we're going to do a lot of that. We want to hang out with you guys and hear what's going on in your life. So again, lots of q and a's there. So with the first 500 tickets sold, you're going to get a copy of the total money makeover signed by Dave.

Nice.

And those are going fast. And you can get your early bird tickets for just $99 for a limited time so go to ramsaysolutions.com events for that. So again, you guys, it's the total money makeover live weekend here in Nashville, Tennessee, at the Ramsay solutions headquarters. And that's May 10 and 11th. May 10. That night, George and I, George Campbell and I are going to be doing the smart money Happy hour podcast, a live recording. And then the next day, Jade warshaw and John Deloney and Ken Coleman and myself and Dave Ramsey. We're all going to be there hanging out with you guys. So make sure to get your tickets again@ramseysolutions.com. Slash events.

Hey, you've been listening to the show. Now it's time to start doing no more excuses. Join me and the rest of the Ramsay personalities for the total money makeover weekend here in Nashville on May 10 and 11th. Get a crash course in everything we teach about money, including budgeting, beating debt, investing, and more. In just one weekend, you'll leave with a plan to put it all into action. It's game on, baby. Early bird tickets start at $99, so don't wait. Go to ramsaysolutions.com weekend.

Welcome back to the Ramsay show. I am Rachel Cruz, hosting today with Jade Warshaw, and we are taking your calls. Up next, we have Sam in Dallas, Texas. Hi, Sam. Welcome to the show.

Hey, thank you for taking my call.

Absolutely. How can we help?

Yeah, my wife and I currently, I guess I personally have a 529 account that has $700,000 in it. And I'm currently out of school. Me and my wife, we have one kid and then one on the way. And our question is, is it worth pulling $300,000 out to fully buy a home in cash? If so, we will be losing about $102,000 due to federal taxes and withdrawal penalties. I guess my question is, is that a smart move on our end? I'm 26, my wife is 24. And so that's kind of my question.

Okay, so you have $700,000 in 529 educational account?

Yeah.

Where did that come from? Your parents?

My grandfather, he spent money aside, and it just kind of grew over a lot. Yeah.

Do you have kids?

Overwhelming. I do, yes. My wife and I, we have one child, and then we have actually one on the baby on the way here in the next couple of months.

Okay. Yeah. Because with 529, obviously, it has to be used for education. It can be passed down to your kids. So their fund would be fully funded.

It can translate to retirement on down the line after a certain point as well.

Yeah, I think it's after. I think the account?

62 67.

Well, I think it has to. Yeah. It can transfer to a Roth IRa if the account has been open, I think 35 years, maybe.

That sounds right.

How long has he had it open, Sam?

Yeah, it's been, I believe, since 2010.

Okay.

Yeah. And I was told by my financial advisor, doubles every seven years. About seven to ten years within the market.

Right.

It doubles, yeah. How much? About four doubles. Okay. And where are you guys financially, Sam, you and your wife, are you guys renting right now? Do you own a home?

Yeah, we currently rent. Currently rent.

Okay. Do you have any money saved besides the $700,000?

About $35,000 in savings saved.

Okay. Is that retirement or is that just in a savings account?

In an account, yeah, bank account.

Okay, perfect. And then how much debt do you guys have?

Total? We probably have with our car payment, we have about $20,000.

$20,000. And how much do you guys make a year?

I currently make 65,050.

5065.

65,000.

Okay. A little piece of the puzzle here. I'm seeing here that there's a lifetime limit, by the way, of money that you can roll over from 529 into Roth, and it's not very high. It's only $35,000.

Okay. I was saying 35 years. It had to be open. I knew 35 was in there. $35,000. Okay.

Yeah.

Okay. Usually the case is not taking money out. I mean, this would be, in a sense, like, it's not retirement, so you can't use it. You can only use it for educational purposes. And on top of that, you only have two kids. And if it doubles, right, every four.

Years, that's just a lot of money.

It's a lot of money.

There's part of me that would rope off an amount for your kids that by the time they reach education, age, there's the right amount for them. There's the part that would rope off the 35,000 that you can contribute every single year up till that point. You can contribute it at the Max Roth Ira limit every year until you reach that maximum. Now, you might want to work with somebody to find out if it's 35,000 just for you or if it's your wife as well. So I'd ask somebody about that, and then, honestly, I might be wrong, but I think the rest I try to get my hands on, because if it's doubling and you're right, it would double every seven years, and it's just going to become more and more money that you're going to be taxed at 10% when you try to take it out. So I probably would alleviate some of this cash. And what would you do, Rachel?

Yeah, I mean, that's kind of where I lean. My only hesitation, Sam, is this is such a gift that your grandfather gave you guys. But when you enter in this amount of money, I just want to make sure that the house you guys buy, the lifestyle that. And I would use some of this to pay off your debt and get an emergency fund and all of it, before even buying a house. Use it to your advantage in that way, too. Which, again, just to be clear, for everyone, we usually don't recommend cashing out college, but because of the massive amount.

That's right.

That realistically will not be used for education for two kids is kind of the dilemma right there.

It's kind of like the way we talk about when people invest in stocks. We want people investing, but we don't want them investing in stocks. And when they do, we advise them to clear it out, even though they're probably going to pay a penalty and a tax in the form of taxes on that, so that they could pay off their debt or work their baby step. And in this case, it's very similar. It's like somebody had the right idea. They invested in 529, but they went way beyond the limit of what makes sense. So now, getting access to that is going to be better for you in the long run.

Yes. Hold on. I have categories for you, Sam, that. I'm just thinking out loud what I would do. Think about your kids college. And then maybe just for the fun benefit, because this is so much money. Think about grandkids and just say, what if each of our kids had three kids? And what if their college was. Go ahead and pay for it, because it can be passed down generously. So maybe you say, what would it look like to pay for eight kids total's college, two kids that we have now? And maybe if they. Each chapter. I don't know. I'm just throwing out a number. Right? Because, again, that would be a cool gift if Grandpa Sam had already paid. So think about that. Look into the Roth IRA option that you can go up to the limit every single year until you reach $35,000, and see if you. I want you to do that with that money, 35,000 of it, like Jade said. And then also see if you can open up a spousal Roth Ira. And if for some reason, because of married. I don't know if taxes, I don't know if that will be allowed.

But if you can roll it over into your wife's roth Ira, too. I would do that.

Okay.

And then taxes will be a bucket, too. Okay. So you have kids, college, grandkids, college for the fun of it. I don't know. I just like the legacy idea of it. Roth Iras for you, possibly your wife, taxes. Next bucket, Sam, is when you do cash out some of that money, after all that's taken care of, debt goes first, fully funded emergency fund goes second of six months of expenses. And then third, whatever's left can go on the house. So that's what I would do. But, Sam, I'm going to caution you, because we get this a lot when we talk to people that get an inheritance or they get a lump sum of money from insurance, and they've been having habits of using debt, debt being part of their lifestyle. And something like this is such a gift because it's going to wipe all that clean. And you guys get a blank slate, which is beautiful and wonderful, but your habits haven't changed because of it. So you and your wife have to shake hands and look each other in the eye and piki promise, we're not going back. This is not a get out of jail free card, and then go back to the lifestyle you guys were living.

I want you to be wise with this money, because what a beautiful gift your grandfather gave. Does that make sense?

Yeah, it does. I think that was our thought, is we really want to be smart with this money. We do want to be debt free. That is one of our goals. But I do also like the idea of categorizing it out and saying, hey, they have this much amount for our kids, and that doubles over time, throughout time and time. That being a gift for not just our kids, but also, like you guys were saying, grandkids.

How old are you, Sam? How old are you?

I just turned 26.

Okay, and when did you get access to the money? Sorry, I'm just reweighing this. When did you get access to it?

I believe I was last year.

Last year?

Okay, so you've been sitting on it for a year? Okay. Yes, I'm with it.

It's good. All right, Sam, I hope that helps. I know that was probably a lot of ways to go about it, but.

I think there's part of me that kind of wants them to do a little of the work. Like, feel it a little bit. If you wanted to, you could. If you were like, you know what? Whatever debt you have, pay off some of it. Like, work through it a little bit. Like, feel it a little bit.

For the habit's sake.

For the habit sake.

Yeah. To feel some of that stuff.

That money is not going anywhere. It's just growing.

Yeah. So true. So true.

Something to think about.

Yep. Thanks for the call, Sam. This is the Ramsay show. Our scripture of the day comes from psalm 119. Your word is a lamp to my feet and a light to my path. Ella Fitzgerald said, it isn't where you come from, it's where you're going that counts. That's good. I love it. I know. Not looking in the past. Looking straight ahead. All right, I'm Rachel Cruz, hosting today with Jade Warshaw, and we're going to finish out this show with Jessica in Los Angeles. Hey, Jessica. Welcome to the show.

Hi, ladies. Thank you so much for taking my call. So I'll just get straight to the point. I am married, and I am expecting our first child. And congratulations. Thank you very much. So once I go on maternity leave, I will not be returning to work. I will be staying home with my baby and my husband. And I, I did David Ramsay's financial university, and I'm all about saving, and it got me out of debt in my 20s. So I'm save, save, and my husband, he and I had very different financial upbringings, and he's like, no, we need to invest. Invest. And so my question today is, basically, he takes on margin debt, and that scares me. And I know nothing about investing, and so I feel very uncomfortable with the margin debt that he has in our brokerage accounts. And I just wanted to get a second opinion. Like, oh, no, that's normal. Margin debt is normal. But like I said, debt scares me. So just calling in, I'm like, I always tell him, like, you have to watch the show. Like, I'm all about Dave Ramsey. And so I was like, let me just call and get a second.

Well, I'm glad. I'm glad you called. So when you say margin debt, that he's taking on debt, he's taking maybe what he's gaining and then turning around and reinvesting it. Or when you say that, what do you mean?

Yes, he's borrowing money from the broker to invest it.

Yes, he does. So the dividend pays off the margin debt. It also pays off the interest, and then the dividend also pays off our car payments. So he takes, like, what Jody? I believe what Jody said. That's exactly what he does.

Okay. I would not take on debt to.

Invest.

Mean the way that we teach. We're just a zero debt foundation. Yes. And so to that end, I would say no. And then, to answer your broader question now, I don't know how your husband is going to react to this. I have a feeling that he probably, if he's doing this, it's because he feels very strongly about it, in my opinion. I don't think everyday joes do this. I think that they probably don't even invest at all. I think that's going to be your biggest headache, is I think you knew what we would say about this. The problem is, are you going to be able to get him to just. Hey, can you just invest 15% of our income? Do we have to do this margin debt thing? Like, what? Have you said that to him?

I haven't approached him with that. But he invests 50% of his income, and then 50% is what pays, like our household? Everything. So 50% pays our rent, bills, everything else. And then 50% is investing. So it's not 15, it's 50. Okay.

And you want to save some up for this baby? Do you have debt?

I'm all about saving. The only debt we have are cars, which gets paid by the dividends. So other than that, no debt.

Okay. So there's three different ways of thinking going on. There's the Ramsey way, there's your way, and then there's your. We. The way we would teach, and I think you know this, the way we would teach is we'd say if you weren't pregnant, the first step would be that you basically are paying off your debt first before you even started investing. But I kind of feel like I'm barking up the wrong tree even saying that, because I don't even know that your husband will go for that. But just to clear the error that's the right way, is pay off the debt first, save up three to six months, then invest 15%, save up for college, kids college, pay off your house, and then you can invest till the cows come home. 50%. I don't care. 70%. Whatever.

Yeah. What is he making when you say 50%? He's investing. How much is that?

He makes 181.

181. Okay, so 50%, though, is for your lifestyle? Yes. And how much are you making?

I make 85.

Okay. And what do you all do with your income?

Mine is invested. Mine goes straight to investing. We just live off of his? Yeah, it's straight into the brokerage account.

How much do you guys have in that brokerage account?

I have an individual. He has an individual, and then we have a joint. And so in my individual, I think I have 15,000, but partial of my income goes to individual and then also goes to a joint. We both tied. So it goes into multiple of our brokerage account.

Tell us the numbers, because that doesn't make sense so far. If you say you make 80 and he invests all of it, and then you have 15 in an individual account. So tell us all the numbers.

15 in yours. How much is in his?

Let me see. I'm pulling it up right now. I don't know what he has in his, but I can tell you in like 3 seconds. Let me pull that up. His individual is 141. I'm sorry. His individual is 49, and then our joint is 49.

So this must have just started because you're telling me that you invest 90,000 of his and 80,000 of yours, but these numbers don't add up.

We just started investing in September of last year.

Got it.

Okay. And how much do you guys owe on the cars?

This is very new. On the cars. We owe 45 total in both cars.

45 total in both cars. Okay.

Yes.

Okay. Jessica, I think what's happening, and it's easy to do because if you get in these circles of people, they're like, hey, did you know about this? And the margin and what you can do here? And you watch a TikTok video and you're like, wait, what? I can do that, too. There's all these ways to do it. And so what we teach has been a proven system. People would call it boring. Your husband may just think we are boring, old fashioned when it comes to money and the way to do it, but it's just the most proven, peaceful way to live with your money. It is how to build wealth the right way without playing all the games, using your income, not anyone else's, to fund your life, fund your future. And that's what you're dependent on. There's an autonomy that we teach of not owing anything. And what that brings, ultimately, Jessica, is a level of peace when you don't owe anyone anything. I mean, scripture is clear. The borrower is slave to the lender. There is a part there that you emotionally carry around when you sit there and play these games. So what I would do, Jessica, and again, I don't know if you guys would go for it because it's going to feel extreme on one end, but I would cash out one of the brokerage accounts of the 49,000, pay off the cars, have some money in.

It was my thoughts.

To pay off the car. Yes, I would do that.

You're right.

Go ahead and pay it off.

And then, Jessica, listen, he is all in the numbers. So what I would do is I would just lay out a very simple plan. Okay? You take this money, it goes to zero. But we have no debt, so that's off the table. We're going to take this other money, put it in a high yield savings account for an emergency funds, because we got a baby on the way. We had a life. And that's what this is going to look like. Then we're going to take this other brokerage account. Maybe we leave it. But here's what it's going to look like when we fund 15% of our income into retirement, which yours is going away because of the baby. But you're going to have $181,000. And I would do the math. Jessica, just for his sake, go ahead. And you can go to ramsaysolutions.com and use our investment calculator. Take 15% of that income and plug it in. And how old are you guys?

I'm 36. He's 33.

Okay. So do it. From age 33 to age 60, 315 percent of your income. And that's with your income not going up, the numbers you're going to show and do a conservative rate of return. You can do 10%, whatever you want to do, but run these numbers and show him that you guys are going to be okay. And when you do it this way, it's maybe slower, but there's no risk. There's no debt in the picture. And you guys are working as a team because there's a lot of separation here. I want you guys working out of one account. I want you guys seeing this really as one as well. In your language, even.

I appreciate it. I kind of feel like maybe I'm not too far off, because I know I have my thoughts about not having debt. And I was like, why know zero about investing? And my husband, he's a very intelligent man, but still, I think he feels like, no, this is a way we're.

Going to do it.

But I'm like, well, maybe he's right. Maybe I'm right. Maybe there's truth in both sides. So I really appreciate your lady's input and. Yeah, thank you. I appreciate that. I would love to say a prayer, light a candle, but I'd hope to reduce what we invest.

Yeah.

Well, just so you know, I plugged in the numbers for you. If you invested 15% of $181,000 for the next 30 years, from 36 to 66, you've already got 50,000 in one of those accounts. That's over $6 million. I'm just letting you know.

Yeah. And you're going to be fine.

That ain't bad.

You're going to be fine. So great. Jessica. Well, good luck with everything, baby, and all. We're excited for you. Thanks to all the guys in the booth for making this happen. Oh, and Taylor, there's a lady in there making this show happen. Thank you, Jade, for always being a great host.

You bet.

And thank you, America. And remember to take control of your money and create a life you love.

Dr. John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life. But they don't have to define you. The Dr. John Deloney show is here to help. It's a caller driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids and so much more. Listen to questions from our callers. Or if you're walking through a tough situation and need some help, give me a call. You were never meant to do life alone. And that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey Network app. Remember, you're worth being well.