Live from headquarters of Ramsey Solutions, it's The Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warsaw. I am joined by one of my favorite co-hosts, Rachel Cruz, Bestselling Author Host of The Rachel Cruz Show. We are joined together, joined forces to answer your questions about life, money, relationships, the holiday season, whatever is sticking in your crawl, we are going to help it come out of your crawl as we take your calls. Give us a call. The number is triple 8825-5225, and we'll chop it up with you. Let's go straight to the phone lines. We've got LJ from Tulsa, Oklahoma. What's going on, LJ?

Yes, thanks for taking my call.

No problem. How can we help?

I'm new to all this. I just recently heard about you all because some friends are talking about a concept of debt snowball versus a debt avalanche.

And it got me curious. I started looking and researching all up and found out on the baby steps. And I got some savings, but I'm trying to pay off debt. So I'm looking all the places to get my hands on money to help pay debt off.

And.

I have a 401(k) that they call the target date4, 4, 1, k from a previous job. Is there any downsides or is that a good place to look at getting money to help pay off debt since I'm currently in 4 or 4.57 at my new job? Yeah.

I love the fact that you're looking for ways to pay off your debt, and I love that you feel that it's urgent for you to quickly get your debt paid off. But I would not pull from retirement savings of any kind in order to do that. The fact that you once had a 401(k) and now you have a 457, that's not really a license to do that because it's still retirement money. And so there's still penalties and fees if you were to dip into that money. Not to mention, that's not truly the solution, right? We don't want you robbing from Peter to pay Paul. I think the solution for you is probably going to be finding that money either by picking up extra work or cutting back areas in your budget.

Lj, your 401(k) that was with your previous job, is it still there? Have you rolled it over into a traditional IRA?

It's still with the company.

That I left it with. Okay, so I would recommend actually taking that out and just rolling it over to a traditional IRA. One of our Smart Ves or Pros in your area can help you do that. But yeah, I wouldn't leave my 401K with a job that I'm not at currently. So rolling that over just to IRA is one move you could do. It won't help with the debt payoff, but it will help with your investing overall picture.

Okay. So not to put it with the new 457 government.

Program that I have? No, I would keep it separate and just a traditional IRA. Yeah, so that you're not paying taxes. And then how much debt do you have, LJ?

About 33, $60,000.

Okay. And how much do you make a year?

I count my mortgage. Me and the wife combined to make about 90.

Okay, that's great.

Look, you can be out of this dead in a year. I mean, if you guys decided, Hey, we're going to live on $60,000, you're out in 12 months. That's not including extra side hustles, which you could easily decide to pick up.

Right.

What do you think about that?

That actually sounds really good.

It would be awesome to get out of all.

This debt. Does it seem possible? When I said that, did you go, Oh, yeah, we can do that? Or was that like, All right, Jade. What did you think?

Well, it sounds great. I just thought it would take more like two or three years.

No, the good news is you can do this really quickly. I mean, just looking at the numbers and like I said, you guys cutting down your lifestyle, which is going to take you guys getting on a budget, which are you already on a budget?

A.

Loose one. A loose one. What are you using currently?

We just run our numbers through.

A big sell spreadsheet.

Yeah. Well, I want to get you guys hooked up with every dollar because it is the best budgeting app that is out there and it'll help you get a really clear picture on what your numbers are every single month, and it'll help you set those goals, you can really get in there and see to the date when you're going to be done paying off your debt and you get to adjust that money and adjust those payments in order to get it done either faster or push it down a little bit. That's our gift to you today. Look, I'm really proud of you. That's a really, really great call. Thank you so much for the call, LJ. Look, you can do it. I think a lot of people, Rachel, do think that, Oh, I can get out of debt, but it's going to take me all these years in the future. But then when they really start crunching the numbers are like, Hey, I can do this even faster than what I would. What I thought I could.

Exactly.

All right, let's go to Kevin. He's in Houston, Texas. What's going on, Kevin? Let's make you a quick one.

Hey, how are you doing?

Doing.

Good. How are you? I'm so glad to finally talked to you guys.

You, too.

I'll make it short simple. I just paid off $10,000 in credit card debt. I'm on baby step number two.

Good for you.

So my next loan to attack is my truck loan. And it's my only thing I have left, but it's a high one. It's around $83,000 left. It used to be $94,000, but now it's at 83,000 because I make extra payments every month.

What truck is this?

This is a souped up Ford F250, Lariat.

Is it for work purposes?

No, it's just pure luxury. I'm one of those that just has the trucks for luxury. I don't pull nothing.

How much do you make a year, Kevin? It's the cost that I would want it.

I make about $14,000 a month.

Okay.

Yeah, give or take. Sometimes it could be 10, 12, 14.

Depending on how much I want to work. I'm selling it.

I'm selling it. I would. Kevin, $83,000 in a truck? That has debt that's going down in value that you're paying interest on?

Wow. Yeah. It took me a while to get it because it was like I had to.

Preorder it. I believe it. I'm sure you did. Yeah, I bet.

And so I do want to add it to the debt snowball, but I'm trying to figure out how to go about it if I should just pay more every month or just save up.

One giant sum and just pay it off. No, you want to be paying on it? Yes. As you get extra cash flow, you're throwing it at the truck. But I would run the numbers, Kevin. I would Kelly Blue Booket, run a scenario, look on Craigslist, look at local dealerships for other trucks. And just for a second, just think, Oh, my gosh, because how much is your payment?

It's about $1,700 a month.

Oh, Lord.

Sell it, Kevin. Kevin, run the numbers. Okay, go to ramsysolutions. Com and pull up our investment calculator. If you invested $1,700 a month, if you invested that, Kevin, do you know how much money you would have? I wish I had my computer on. I would do it right now.

Oh, my God. I'm a skeleton. I'm dead. I am just... Wow. And do you have other debt besides this or is this going to be it?

This is it. This is really my only payment I have a month is because all my other expenses are paid for.

Wow.

Kevin. Rachel, you keep the conversation going. I'll do the investment.

You got to go. We got 30 seconds. Okay. I mean, Kevin, I'm not going to sit here and convince you. You're a grown man. You can do what you want. But our biggest goal is that we want your money working for you, not against you. There are so much of your income and hard. You make incredible money. I mean, 150 to 160 a year that actually you'll be building wealth for your family. You could actually be changing your legacy and building your wealth with this versus sending it to a Ford Motor Company or wherever it is going, right? So there's power and letting your money work for you versus it working for a car dealership. And that's what you're doing right now with this truck.

Wow. If you did $1,700 a month, $2,225,000 after 25 years.

Twenty-five years, you could have $2 million.

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Com or call 800-356-4282. You're listening to The Ramsey Show. I'm Jade Warshaw, joined by Rachel Cruz. Give us a call. The number is triple-88-25-5225. We'd be happy to hear from you. We'll go straight to the phone lines where we've got Caleb in North Carolina. What's going on, Caleb?

Hi.

My.

Question is, I.

Work with my dad after.

I'm done.

With school two or three times a week.

And I.

Make $80 a week.

I want to.

Know what I can do with my money right now to set up myself for my future.

My goodness, Caleb, how old are you?

I'm 12.

Wow, that's so impressive. What work do you do with your dad? We go to people's.

Houses and fix washers, dishwashers, refrigerators, and microwave, and stuff like that.

Caleb, let me tell you, not just the money you earn is helpful, but knowing how to do all of that later in life in about 10 years- I know, right? -people will be very thankful to be your friends because not a lot of people know how to fix all that stuff, Caleb. So I love that you're even learning that trade now. That's amazing. Amazing. Well, I would love to hear what Jade would say about this, because we both have kids, Caleb. So we think about this a lot for our kids. But the fact that you're earning money like this, I think, is fantastic. So I think the first conversation I would have looking to the future, the big purchase you'll probably have in your future is a car when you turn 16. So I'd ask your parents what their plan is for that. If they were thinking about if they would have the money that they were going to plan on maybe buying you a used car, or if they were going to expect you to maybe pay for that, or maybe they would match what you save. But I would probably have a conversation, first and foremost, about a car, which seems far away.

I know, you're 12 and 16 seems far. But there's really, besides just buying some things that you may just want for fun, I think working towards a big purchase is a really great goal at your age.

I'd agree with that. Yeah, I use every dollar.

And I.

Have my financial plan.

For.

December. This guy. I'm going to put 80.

Percent of my stuff into...

80.

Percent of my.

Money.

Into savings, and then 10.

Percent into.

Ties and 10 % into fun money.

Wow. That's good for you. Caleb, so what do you spend money on right now as a 12-year-old? What are things that are fun for you to spend money on?

Well, to be honest, I like going... I spend it on video.

Games, to be honest. Yeah. Hey, that's great.

That's great. That's great.

Good for you, Caleb.

Wow.

Very impressive.

And your parents, look, when you get off the phone, give your parents a big hug because they have really taught you well. And for those listening, he is doing right. You do three things with money: you can give it, save it, or spend it. So he's decided to save 80 %, which is- A lot. That's a lot.

That's great. And then you're giving 10 % and spending 10 %. And in your case, yeah, I think spending on video games sounds wonderful. I don't have anything to add to this, Caleb. I just want to say thank you for your call. You're doing such a good job. Come over to my house and fix the dishwasher.

You know what I'm saying? Or be a co-host here and help some people out because you're doing real good for 12 years old.

Wow, I know that's right. Shout out to the parents.

Glad you called in. I know. Well done. Great. Thanks for calling, Caleb.

Thank you so much. Oh, my goodness. Let's go to Lauren in Dallas, Texas. What's going on in your world, Lauren?

Hi. So my mother-in-law lives with us. She's going to be moving out in June when our lease is up. Our rent is $2,400 and she pays $800 of that. I'm getting a raise in January, which will increase our income about $550 a month. My question is, since we're paycheck to paycheck right now, should we use the raise to save for a security deposit, a moving expenses, and move somewhere less expensive in June? Or should we use the raise to pay off debt until the lease is up and then stay in our current home come June?

The lease is up in June.

How much you guys make a month?

Currently, about 106. With my raise, we'll be up to about 115.

A year? Yes. Okay.

And what do you take home each month? What do you see when you take home your check each month?

About.

55.

55? Okay, good. How much debt do you guys have?

Quite a bit. With cars, credit cards, medical debt, student loans, all that were at about 100,000.

Okay, 100,000. And you said it's cars, medical debt, credit cards, just normal.

Yeah. Well, with your current income, $2,400 a month for rent, I mean, that's bumping up to close to half your income. So this is two of an expensive place, Lauren, where you guys currently are. So if your lease is up in June, I mean, you probably can't... I don't know if you can break the lease or what if you can move out sooner. But I would work towards looking for a new place in June, especially since your mother-in-law is not going to be living with you guys. Find the cheapest place that you can. And then from there, start working the debt snowball. But between now and then, I would start the debt snowball, though, Lauren. What is your smallest debt out of everything you listed?

Probably a credit card.

Okay, which is how much? How much do you owe on that?

Two.

Thousand. Okay. So yeah, I would make it a goal to start chipping that away and working extra. And I guess is the 115 a year include you and your husband's income? Yes. Okay. You're making good money, but you also have a good amount of debt, 100K. So I'm going to say that there's probably going to be a season of side hustles and earning some extra income. Do you guys have kids?

Yeah, we have three.

Okay. So that's always a tricky thing to navigate. And, Jade, I know you and Sam did that with kids, too. And so that adds a dynamic that's very real that makes it difficult. But I think for you guys to be as focused as possible and map this out. But I sadly, Lauren, I can't in good faith tell you to stay where you are when half of your income is going to be going to this rent because you guys will not be able to get traction of paying off this debt.

No, definitely not. I agree wholeheartedly. Have you priced some cheaper apartments in your area?

Yeah, we have two dogs also, so we're in a house right now. I feel like we need to stay in a house just because our family is five with two dogs. It's a little chaotic in an apartment I can imagine. So we're on the outskirts of Dallas where it's cheaper, but I'm not sure what we can find that's going to fit us that's going to be cheaper.

Yeah, you're definitely going to need to find something otherwise. I mean, it goes one or two ways. You either see your income going up substantially, like 25 % more to where this knocks down to where it's supposed to be, or you find an apartment or a home to rent that's 25 % less.

Yeah, and Lauren, and remember, this is temporary, which I know it's like... It's easy on our side of the desk to be like, Go find another place to move. And you're thinking of all the logistics and uplifting your family. I know it's a lot. Yeah. Yeah, I mean, it is. It's a lot. So there's either going to have to be what Jade said, substantial income raises that you guys are just working extra. But I don't want you to do that to have to float a necessary payment like rents, right? If you're doing that to pay off debt, that's a seasonal thing. But I don't want your lifestyle currently where you guys... You just can't afford where you live. And so I think that there is going to have to be some really hard conversations. And it's one of those things, Lauren, choosing your hard. And we talk about this a lot. Where you are now currently with money is hard, right? You're feeling the stress. You're feeling like, Oh, my gosh, we have so much debt. I don't like this. That's hard. It's also hard to move and to downsize and to make some tough decisions with schools and the logistics of your family.

That's not fun. That's hard. But at least at the end of that hard, there's a level of peace that comes because you can actually breathe and get some control. Where this hard that you're in, if you just stay where you are literally physically in that house, but also where you are financially, it's going to continue to have this hard. And I would choose the.

Ladder hard. I would, too, because like you said, that intensity that you put in, that's not supposed to be the way your life is lived. Right. Right. Everything you do is like, I'm just working to live. I'm just working to do this house payment. And then you're going to hate your.

House because- Oh, it's taking you away from your kids. Exactly. Yeah, it's a burden, not a blessing that we talk about a.

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You're listening to The Ramsey show. I am your host this hour, Jade Warshaugh joined along with bestselling author and author of the new book, I'm glad for what I have. Yes. Yes, that's right. Love it. Rachel Cruz is sitting next to me today, and we're taking your calls about your life and your money, so give us a call. The number is triple-8-825-5-225. I have to tell you guys, it's always an exciting day when someone pops into the office and is like, Jade, have you seen this latest video on TikTok? And I'm always like, No, I haven't because I don't hang out on TikTok. But I'm always very entertained on what they bring. And so today there was a video that came across Rachel, and I was like, This is crazy. You haven't seen it yet?

No, I'm not.

But I thought it would be cool. And James was like, Hey, we need to watch this and we need to see you guys' reaction to it. So go ahead and give it a whirl. I feel like my husband and I are doing everything right. We both have good jobs. I'm a nurse.

I'm a registered nurse.

I work.

Full.

Time. He works full-time. We just got paid this past Friday, right? We paid the mortgage, bought some groceries and put some gas in the car.

Guys, it.

Is Tuesday, and we have like two or three hundred dollars to last us until next Friday. We don't live in a big house. We live.

In a.

Little ranch. It's 1,100 square feet, three bedrooms, one bath, us and our two kids. I'm so stressed out. This isn't how it's supposed to be. Growing up, we were told, Go to college, get a degree, work to support your family. Here we are. Did that. Now what? Now what?

A man. Wow. Man.

Listen, you should know that we did edit down that video quite a bit because it was pretty long. Okay. And she's emotional the entire time. And she also does mention, Rachel, that she works full-time as a registered nurse. Her husband works full-time as well and does side work. They have two kids is what she says. And she says in the video that we just got paid on Friday.

Paid the mortgage?

Yeah, just mortgage, gas, and groceries, and now to only have $200 to $300, that's like the...

Yeah.

That's crazy. Look, I have my take on you. You tell me yours.

Whoa, okay. My knee-jerk is I feel like we get callers like this a lot. I feel like the state of money is not always pretty, and it's really stressful.

We even talk to people in baby steps four through six, and they're like, Oh, my gosh, it still feels tight because we're having the fun kids. And all of that is real, but they're not at a breaking point at what she is at. So my natural reaction is, How much is the mortgage? How much are you guys making a month? What other debt? So you just got paid.

And you.

Only have three to it. So that.

Means that you pay - Because if they really only did groceries, gas, and mortgage -.

That means, yes.

There's a ratio that could be off somewhere.

Yes. And if you only have $200 to $300 left in your account, that means the other paycheck you got 15 days ago is gone too. What is that going to? Are there other payments? You know what I mean? As it starts to decrease that.

Much- Well, let's look at this in a real way. Okay, so let's say she got paid on the 30th, which is the first for most people. And if they paid their whole mortgage, that's most people's biggest bill. So if that's gone, and then that they spent half their grocery money, half their gas money, then I'm like, Okay, the next check is if they've got two kids, we don't know how old they are, let's say they're in daycare age, maybe the next biggest chunk goes to daycare, then the other half goes to gas, other half goes to groceries. My question still is, if you can only pay three things, then there's a ratio that's off. Yes. We say 25 % for housing.

But also, I would want to know where else is that? So where did the 15th paycheck from the month before? Yes. Where is that all going? Yes. Is there payments? Two car payments sitting in the driveway? You know what I mean? Yeah. I want to know so many other things.

I mean, she says, quote, we did everything we've done everything right.

Which I feel because that is a sentiment.

What she said is, you're told.

Go to college. In fact, when I went to school, which was 15 years ago, there was no even talk of, hey, let's look at price tax. It was really go where you can get in. You go and you'll get a great job working 40 hours a week. Everything's going to be fine, right?

And she says, I don't know if it was in this video because I've seen both versions. Did she say that she's going to school full-time, too? No. She's going to... Okay. So that wasn't in the clip, guys. She's going to school full-time as well.

Which is a big expense.

So here's my take. This is just me. She says, Okay, I'm working full-time, going to school full-time. Papa is working full-time. He's got a second job, plus two kids. Forget finances. I'm just crying every day anyway, because that's just a lot. Let's be honest, that's just a lot in life.

Well, I'll be overwhelmed, the number of.

Hours in a day. So part of me also feels like there could be a piece of this that's like, if she's going to.

School full time- Stress is somewhere else, too.

Yeah. I'm like, stress will make everything seem worse, right? Yes. And when you feel stretched on your time, it makes everything harder. Those $300 that they have all of a sudden just feels like even less, right? Because like, I don't want to cook tonight, and I don't want... There's a lot that feeds into that. And so part of me just wonders, well, I have two thoughts. A, I'm like, are you paying your way through school? That's a big piece of the budget. Or are you going into debt for school? That not only adds to debt, but also stress. So I just see a real domino effect that seems to be taking place. And part of me wonders, Okay, do you guys need to pull back in some way? Maybe you need to wait on school. Do you know, is it going to ROI the money you think it's going to ROI? There's so many things. Listen- I'm going to say this. -at the end of the day, she needs to call us. We need to help her with her budget. Honestly.

Well, and I'm like, because we're on The Ramsey show watching this, but I automatically want to be like, How much are the car payments? How much are the debt? Because that's always our thing. But, Jay, and again, this may not be her situation, but statistically speaking, could easily fall into this scenario where there's two $600 car payments in the driveway, and that's $1,200 that's gone every single month out of a pay check. There are real things that could be happening behind the scenes, numbers wise, that could actually free her up.

I.

Believe they are. I would want to know. Yeah, because if you're a registered nurse, you're making great money. And if your husband's working full-time and on top of that working a side hustle, there's some -.

And if you're in a state where the nurses don't make a a lot money, maybe you need to to because that pay changes depending on where you live. Yeah, that's true. And so plenty of people all the time are in jobs where theoretically they should be earning more, but they happen to be in a place where they're just not earning that much. And so in this case, I feel like that could be at play. But I don't think that we heard this part either in this this clip. She also goes on to say, Someone needs to do something about this. And she starts talking about the state of the the economy. And she say, Don't comment to me about Trump and don't comment to me about Biden, but this is an economy problem and someone needs to fix it. Maybe if we all band together, someone will fix this, and someone will hear us and come help us. I'm like, If you're to the point, and this is not criticism, by the way, I'm saying this as a person who is... I had that same I've had at a moment in my Jeep Liberty with my husband when I told him to pull the car over because this cannot go on any further.

Seeing her cry through tears, like I know what that is. Yes, yes. And I felt that. But at the same time, you can either look at that as a moment of, Someone come help us. Someone needs to do something, or.

Go, I need to.

Do something. I can't keep living like this. My husband and I have to change. Where is that side of it? It?

It's the complete flip of the perspective. That's a great point.

That's a great point. Point. You know, I'm not trying to be ugly or compassionate, but the fact fact probably no one's going to knock on your door and go, I'm here to save you. No one's going to do that. The government.

Look.

They're just going to keep on ticketing and keep on... And I don't want you to keep living like that. So my guess is there's probably not a real budget in place, because when there is a real budget, you can see, like you said, if those ratios are off, if you're like, Wow, we're paying 50 % for this this 1,100 square house. Too much. You'll be able to see those numbers.

Yeah, and I think... I think you're you're right that idea that you have to advocate for yourself. No one is going to come save you. And that's true with your health, with your... I mean, all these areas of life, not just money. But you do get to a point as a grown up where you're like, Oh, my gosh, I felt this with my kids at the doctor or or I'm like, Oh, there's no one. It's me. It's me that's having to do this. So there's a moment where you have to be the advocate for yourself and and advocate for change. And it's hard. But what she's she's a lot of people people because it it been a hard year, you guys. It's been a hard year, but we also want to look at the numbers. This episode is.

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The Ramsey show. I'm Jade Jade This is Rachel Cruz, and we are taking your calls all hour. Give us a call. The number is triple eight, 825-5225. We'd be happy to hear from you. Let's go straight to the phone lines where we've got from New York. New York. What's going on, Diana? Hi, ladies.

I'm well.

I'm just outside of New York. I'm in Connecticut. I am calling because my husband and I, we've been married 11 years. We have three.

Amazing kids.

And we are struggling. When we first got married, my husband really struggled. He was laid off from a job just before our our wedding, and was unexpected. We were given the choice when we had a wedding. I have super savvy, money-savvy parents. And I just thought that the lifestyle would somehow continue. And we were keeping up with the Joneses and we chose the wedding over the down payment for the house. We were paying higher rents.

And it put us in a position.

Where we made very.

Bad.

Decisions with credit cards. And we've honestly been struggling just ever since. Income-wise, we're in a good place right now.

But we.

Had two kids, 11 months apart within the year of getting married. And now we have a little.

Girl that's just about to turn four.

But we still have that credit card debt from six, seven years ago.

And we're.

In debt and we're.

Living paycheck to paycheck.

No matter how much we make, it just never seems to be enough. And I.

Just.

Really want to get smart with our money. And I just feel like we're in this big hole and we can't get out of it because of our past. And we.

Have about $65,000 total worth of debt.

And we don't even touch 45,000 of that. And because we have poor credit, we pay high interest rates for our cars and and have along. And we were just finally on the path to homeownership. And two years ago, two months before we closed on our house, my husband was laid off again. And fortunately, we never missed a beat.

A.

Paycheck, he was re-employed within two months and.

Ended.

Up income-wise getting more. But at that point, we had no choice we were going to to the house. So my mom, fortunately, stepped in and took on the.

Mortgage for us.

So.

You're.

In the house now? We are in the house now. And who's.

Paying for it now?

Yeah, we are.

We're safe. Okay. Like I said, my parents, fortunately, are...

What.

Is the mortgage? What are the opposite of of Can I get a few particulars from you? Sure. Okay. How much are you you guys - Let's start with... Yeah, ahead.

Yeah, how much are you guys making a year?

My husband makes about 125, and I make about about 25. And then.

Each have a few.

Occasional side hustles, but they're seasonal. Seasonal. So month, we bring in anywhere between 96 and 9,600 and and 10,500. A month a month. Okay. Okay. And you go through and list out each debt that you have that totals up to 65,000?

We have about.

45,000 in personal loan. We have 14,000 on a car. Fortunately, we're able to... Before we purchased our.

Home, we got rid of his car because.

He went.

Fully remote.

During the pandemic. Okay. And so we're a one car family now.

I did get into, unfortunately.

A car accident. And so the car that was paid off was totaled.

We probably made a.

Mistake by buying a car worth more than what we had. But we've got $14,000 in the car loan remaining.

And we put about about.

Down when we.

Bought.

The car two years ago. Okay, what other debt? So we've got the 45,000 personal loan, loan, on a car. Yeah. And then about about I would say, in credit card debt, and probably about.

About.

In medical. Okay, so you've got a really good income. This is good. The $65,000 of debt. And the one thing I also want to ask you is your mortgage payment. I wanted to know how much your mortgage payment is every month. It's It's Okay, not a problem.

After we.

Pay our bills, it just seems like every month, anytime we.

Get ahead, just.

Like with HomeOil, once we get a delivery, we're back to zero.

Plus.

We have poor poor so we.

Have nothing.

To float us. To be honest with you, when I look at your debt, there's nothing on here that I go, Oh, my gosh, gosh, drowning in payments. You've got a lot of debt debt here. I also wonder if you guys are spending spending where your spending is out of control. Because I'm looking, I'm like, okay, a $4,000 medical debt, $5,000 in credit cards. If you're paying minimum payments and you're making $10,500 a month, that's not what's sinking you, right? Your $14,000 car is not what's sinking you. Does that make sense? Yeah, I'm definitely the one causing that, and I recognize that. I definitely have a hard time with not keeping up with.

The.

Joneses. And I'm definitely the spender.

And I'm.

Definitely the cause of, I think, a lot of that, too. We tend to eat out a.

Lot because we're.

Busy with with the and we're working, and paired with trips to Marshalls and Home Goods. And that, girl, that's where the money is going. And I'm glad that you recognize that it's you doing that. The question is, what's going to happen to change that? Because here's the thing. You could pay off all this debt, but if you don't get your spending under control, you're still going to spend away all the money that you're supposed to be using to do things like save and invest. Invest. And is going to be an ongoing problem for you, even if you guys manage to pull yourselves out of debt over time. Time. Got to get a handle on that. I'm guessing you're not on any real budget. It's just pay the bills and everything else is up for grabs thing?

Yeah, I try.

A budget, but then something happens or we need home oil, heating oil, oil, I have a rare eye condition, a contact lens tears, and I need a contact lens that weirdly isn't covered by the insurance company. Company. And just like one thing after another, it seems. Seems. And any we get a nest egg, it just seems like something pops up. Okay, well, that's where your budget is going to help you, because if you're doing a good budget, you're going through every single dollar and you're assigning it with a purpose, and you're choosing. Budgets include more things than just rent, mortgage, utilities. It includes things like a trip to the eye eye or my contact contact or a miscellaneous category for things that... There's always something that pops up in the month that's like, I didn't know this was coming, but I've got this little cushion here just in case. Case. And so what a good budget boils down to. But But Itry to stress it I cannot stress it it enough. The end of the day, the budget is a tool. It's something that we pick up and then we wield it and use it and follow it or don't follow follow it, right?

The budget doesn't do the thing for you. At some point, you do have to be like, I'm a grown woman. I'm a grown woman who has the ability to say yes or say no. And it sounds like you're to that point.

Yeah, and, Diana, and you've said it twice on this call, so I'm going to just say what you've said is keeping up with the Joneses, keeping up with the Joneses. You've said that a few times. And money, we can talk about the numbers a lot, and that's what we're good at on on show to help you solve that. But what Jade said earlier was exactly right that until until you, Diana, something in there with you. And I can say this because I'm a spender, and I get it. But I think being able to pinpoint what is it in me that is causing that? What is the insecurity in me? Because it's not other people's fault, right? They're living living lifestyle. But what we have to realize is comparison will always be in us. I was talking to Dr. John John about this. There's a core part of humans. Comparison is a real thing. Even back with our ancestors, when they had to hunt and they had to figure figure out things like, constantly sizing up things in your life, and people had to do that for survival. That is a part of who we are.

We are naturally bent to look around and see. But the problem is when we look around and see, and suddenly we say, Oh, my gosh, I want what they have because what they have is going to fulfill something in me, deep within me that's missing. And that's what I have to have. So there's some core emotional parts of this, Diana, in in you and in your story that I would love for you just to dive in. If you hold on, Austin will pick up because I want to give you my book, Know Yourself, Know Your Your and Love Your Life, Not Theirs.

It's about comparison.

Give her mine, too. Because, oh, yes, money is not a math math Jade's Quick Read. So this is so true for a lot of people, Diana. But if you can get Diana under control and actually start mapping out a budget, I think you guys are going to see a lot of progress. But it's hard, but you can.

Do it. You can do it. We're pulling for you, Diana. This is The Ramsey Show. 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 actual amazing relationships. I'm your host today, Jade Warsaw, joined by your other host today, Rachel Cruz, and we are taking your calls. Give us a call. The number is triple-eight, 825-5225. We would love to hear from you. I think it's really great, Rachel, that we're both on the show together because the fact of the matter is we both have really great books out at this time. Rachel, your first kids book ever, which is so exciting. Yes. I'm glad for what I have is available for pre-order now. That's super exciting.

Exciting. For now. It's not pre-order. It's out. Oh, it's out now. Out and about.

I'm reading this copy all wrong.

You're good. No worries. No, you're good. You're good. Yes, launched beginning of November of this past month. So, yeah, it's been so so great talking to so many parents, talking about contentment with kids is a really important conversation to have. So hopefully this book launches into that conversation.

I've really enjoyed on your social seeing everybody everybody them reading it to their kids. And - Sweet, yes. Yes, I love it. Love to see it. Thank you. So if you haven't gotten your copy, get your copy today. It's out there. It's a great Christmas present.

Now, yours is pre-order.

Yes, mine's still on pre-order until.

December fifth. Okay, it's coming soon. Oh, Jade, I'm so.

Excited for you. And it's really great because if you do order it while it's on pre-order, the book that I came out with is called Money is Not a Math Problem. And if you order it now, you get three months of every dollar premium for free, which is our budgeting software that we talk about about here the time. And most people are trying to get their money on track for the New Year. So this is a great time to to it so that you get every dollar premium with it. So that's that. Order it today, it's it's bucks. Come on, on, ten Love it. Go ahead and do that. Let's go straight to the phone lines where we've got Brenda in Dallas, Texas. What's going on, Brenda?

Hi. Yes, my dad, he's in his his 80s, I have determined that he's been scammed out of thousands of dollars by a fake publishing company. And so I recently persuaded him that it's a a scam. I still feel like he's very vulnerable because they'll just keep calling and keep calling with a new scam and all of those things. A year ago, he got a call out of the Blue to republish one of his books. And so they asked for money upfront. And since then, they've even withdrawn without permission from his his account once got his account number. Oh, wow.

How much money are we talking?

Right now, it's almost almost Oh, wow.

Brenda, do you guys have contact information for these people? They're stealing money. This is illegal. Have you contacted the police?

No, I haven't really known what road to go down legally. What I have been doing is we canceled his cards and got new cards, and we put in fraud information with the bank. And he recently agreed to add me to his bank account. I mean, he wants to leave a legacy for his family, and he's written these books, and they're wonderful books, Christian teaching teaching books. Just hard for him. He's not a child that I can tell what to do. He's a grown adult, and I don't want to take away away that. He's very vulnerable. He's easy to persuade, and they just keep calling with different tactics.

I.

Guess my question really is, because he's written another book, and he didn't tell them, fortunately, but it's ready to go and be published again. He's basically told me, Can you find me a safe place where I can publish this book? In some respects, I want to just shut the door and say don't do that anymore. But writing is his outlet.

Well, sure. When you're saying publishing, Brenda, do you mean just printing copies of the book?

Printing copies of the book and making it available on Amazon. That would probably check all the boxes.

For him right there. Okay, yeah. Yeah. And of that's not crazy inexpensive. I mean, it's not crazy expensive. You could do that. It'll take some work work on your end, to help find the printer and all of that. But if that's his wishes, yeah, he doesn't need to be going through a third party. Unless you think like, Oh, my gosh, it's like C. S. Lewis's or whatever that he actually could get signed to a legit publisher and do this. I don't think that's really what he wants to do necessarily. Well, and I.

Don't think I would trust it at.

This point. Yeah. No, no, no, I know. I know. So yeah, I think you guys need to print some copies and have a few boxes to give to the grandkids. I think you can probably put it on Amazon. That... I mean, we do that stuff here at Ramsey. Yeah.

And the main thing that he's asked me is, Can you find me somebody that can be like my agent? And in respect to that, I feel like if he had somebody that he knew was a legitimate, trustworthy publisher, then he would be less likely to fall into the trap of those that are untrustworthy and pursuing him constantly. Thought about getting him to change his phone number and everything, but... What if.

He got around... It sounds like he's trying to do a lot of this in a vacuum. What if he got around some clubs and started getting to know a group of writers to where everybody's looking at each other's stuff and everybody's sharing contact information. It's a little bit more of a trusted environment where it's like, Have you used this guy? Yeah, I've used this guy. How did you get your book on Amazon? That's how I did it. And it did a community community as opposed to, I'm just going down the Yellow Yellow and I'm going to pick a publisher. That does feel very... You don't know.

What you're going to get. And he's 80 years old, Brenda. Brenda. Do do you think his motivation... What do you think this is in him? Has he always wanted to do this? It's not to crush his dreams. There's also a reality that you're 80.

Right. This may not be your big break.

Right. I don't understand if there's there's an part of him trying to be somebody. Is there anything like that? Or is it just genuinely he loves what he's writing about, and he wants it available for people to read? I'm like, I wonder what his motivation is in all of it.

Well, and his first book that he wrote is a teaching book on Christian foundations. The driving point behind creating the book was to use it in a church setting. He did use that for years, and at some point, he wanted to take that material and put it together in a book form. And I think his desire now comes from all that happened with that years ago. And so now he's written another book that's similar to that and yet another one. And he lost his wife, my mom, in January. And he just really needs something.

To to grab.

Onto get.

Them focused. Yeah. So what I would do, Brenda, if if I were you, I would sit down with him and say, Hey, dad, listen, here's what's happened. You have been scammed out of almost $20,000. We can't keep doing this. It's not wise, dad. So any big money decision that's happening, anytime you want to spend money, will you just run it by me? I just want to talk through it, make sure that I can maybe run course for some of this to be able to help you. Because I want you to... If you have this dream and have this content that you want published and out into the world, we can get that done. We can do that. We also need realistic expectations of what things are in life. Life. And don't want your legacy to go down the drain financially by making bad mistakes. I'm going to honor you in that and help you in that as your daughter. But also, let's be wise at any big financial decision, dad. Team up with with and let's talk it through together. What we teach at Ramsey boils down to taking control of your life.

It's all about personal responsibility.

And if you own a gun, gun, even even.

More important. I recommend becoming a member.

Of the US Concealed.

Carry Association. You'll have immediate access to liability, insurance, education, and training to protect.

Your loved ones and.

Defend your rights in.

The most responsible way. Go to to us. Cca. And join today. That's usca.

Com/ramsey. You're listening to.

The Ramsey Show. I'm Jade Warshaw, your co-host today, joined by Rachel Cruz, your other other for today, give us a call. The number is triple-8-825-5225. And if you are into Spotify, you probably received your annual Spotify-wrapped results, which is pretty cool, where it'll just basically tell you what the top things you listen to. If you're into podcasts, it'll tell you the top podcast you listen to on their platform. And it's been really cool because since those results are in, we've noticed that we're number one on a lot of people's charts, which is really, really cool. So we want to know if the Ramsey show made your your Spotify list. And if it did, let us know. That would be so great. Share your your Spotify results and tag us on social for a chance to hear your name mentioned on the show. That's so cool. And a a lotof I know, Rachel, I've seen you repost some. I reposted some. Yeah, and they're fun. And so here are some of.

The users- And you're on the main image. I know. There There we go. There we go. There we go. There we go. There we go. There we go. There we And so it's Dave, Jade, and George, right?

I love it. Look, luckily, they got my good side. I'm so excited.

It's a.

Great picture. Here are some of the usernames of people who have shared that we were in their top podcast. Hopefully, I get these right, guys. Okay, we have Nicole M. M. -nicole M. -litch. Her username. This one is Jade Pettabroadbent. There we go. No relation to myself. Blake Permenter, Aaliyah Fitz, chrissy_305, Katie Irene183, which some people might might remember on the show from being the horse girl that George said she had to sell her horse, Allie Kens. I'm going to try this one, but it's not going to be good. Toxic Kitty. Toxic Kitty. Looks like the sound of that. I don't like the sound of that. Then we got, Hear Morgan Roarer. Love it. Guys, keep sharing your playlist. We will say your names on the live radio podcast, and and we'll say them right. So if I didn't get it right, please believe me, I tried. Still, share them with us, whether it's in the comments or the little paper airplane on Instagram, we'd love to see that. All right, Rachel, should we go to the phone lines? Lines? Yes, let's do Let's do it. We got Jake in Cincinnati, Ohio. How can we we Jake?

Hey, thanks for taking my call. Follow the baby steps. Everything's great. For people that are listening the first time, they definitely do do work, follow them, of course. Love it. Question, I'm a school teacher, so we're at the point now we're looking at the investing of the baby steps, and 14 % of my income goes straight into our school's pension plan. We don't don't have choice through the state. And I was wondering if the advice changes to people like me that don't really get to control that. Do I just do an extra one % outside of that or what you guys' advice would be?

Yeah.

So with a pension, we usually say that you want to take that percentage and just cut it in half, so 50 %. So seven % of it's fine. I would then fund my own seven % because the thing with the pension is you don't have really a choice on where that money is invested. And the powerful thing about retirement investing is that you have the ability to look and to choose the mutual funds and all of that. So we want more of that on your side. Side. Jake, with that 14 %, I would drop it in your your seven %. So that means you'll have eight % that you're going to want to invest to get to that 15 % in retirement. So that's what I would do.

Does that make sense for you, Jake?

Yeah. Perfect. Just eight % into a Roth IRA, max it out.

And then then the from there. That's right. That's perfect. Perfect. Yeah, job, Jake. Awesome. Well done.

Thank you so much for the call. All right, moving on on along. Got got who's in Tulsa, Oklahoma. What's going on, Andy?

Thank you very much for taking my call. I'm calling today for sure advice, helped with my 25-year-old daughter, who a year ago had $30,000 in the bank and her own business. But she walked away from that and went to another state to join a fellow that she had met up with. Unfortunately, two weeks ago, she came back home. The relationship went poorly. She's down to $1,500 to her name. She has broken a lease at an apartment, which she's going to owe $6,004 and a credit card that she has $6,500 balance balance both in her name only because he had horrible credit.

But.

Those we're just going to deal with. We're just going to deal with those. Yeah, he talked her into putting everything in her name alone. The worst one is at age 25, a major car car gave them a car loan. They bought a car for 66,000. They They ran up to 80,000 by adding on warranties, etc, etc. They borrowed about $70,000 from this car, again, in her name only. And she stuck with this thing. She doesn't have the money. She can't take the apartment on her own. She can't own this car on her own. She simply doesn't have the wherewithal. It's an 84-month loan at 9.59 %.

And the total amount is is.

That was purchased for for There's a 70 owing on it. Unfortunately, I booked it, and the Kelly Blue Book on the car is about about to $40,000 as a private party. Party. So horribly upside down. As her dad, I'm saying, look, take your lumps, pay the apartment, pay the credit card, but let's turn this car back into the bank and just take the hit on your credit report.

Like a.

Voluntary possession? Is what you're suggesting? Exactly.

That's what I'm thinking. It'll be one event, not many, and she can explain it and she'll just have to live it down. But there's no worthy way she can even sell the car for Kelly Blue Book value and then make up the difference. Like I said, a year ago she had $30,000, and now she's down to 1,500.

Well, before we do a voluntary repossession, because that is an atom bomb. Let's be honest about that. That's going to follow her around in a similar way that even a bankruptcy would for quite a while. The other debt that she has, the $6,000 lease thing, the 6,500 credit cards, that's not something she can't easily overcome. The $70,000 car is a lot, and there may be some other options there. But let's talk about her her because I know she got out of this relationship, but she's still able to earn an income. What does that look like for her? What's her profession? Can we get some numbers in that area?

A year ago, she had her own business doing eyelashes, eyebrows. At one point, she was earning more than I am. But she walked away from all of that. And to be perfectly honest, I have no understanding whatsoever how these two two making money. They were doing online coaching for physical training and fitness and nutrition, etc.

But to be honest.

I don't understand it. So just like influencing and and stuff, Right.

And I clearly doesn't work.

Okay. So she's not earning anything right right.

She's not earning anything right now. So Andy, and where's the guy in all of this? She left town.

But is he- Yeah. So she's come back home home two weeks ago. It ended up abusive, both mental and physical. Physical. I'm sorry. So there's that.

Side of it. Yeah, for for sure.

Is real. Real. Yeah, back in the state that they were in, but I heard he's mobile. I don't know. He's gone to the wind.

Okay, so we're starting clean slate without him. So yeah, Andy, I think think for her, I one of the best gifts that you could give her, especially considering what she just walked out of, is any level of confidence that she can have back in herself. Because when you're in a relationship like that, when she was in there for a year, I think you said, that tears down who you are as a person. And And so something about, this is not the fix all, but for her to go back to something she knows she's good at, so the eyelashes, everything, the cosmetic stuff that she was doing, if there's a shop, if there's some type of business that she doesn't own, I don't think she's in a place to start her own thing, that she could go and just start start even if it's 30 hours a week, but that there's some consistency in earning an income. And we're not going to be in a rush. All these numbers are here. We're going to work through them. But there's part of her building back that dignity and that confidence in who she is. And I think her living with you guys for a bit, I think, is a really wise thing, especially from what she's just come out of.

I'm okay.

With that. I'm 100 %.

Percent. Yeah. So I would say, Jade said, the the bomb of the car repossession, I almost would just try to sell it for that $40,000, take that $30,000 hit. So she's going to have a loan of that. She's going to have a lot lot of here.

Yeah, she's she's to get a loan for.

That difference. Yes. Yes. But there's going to be some years of working through this. But obviously, I'd rather be in this situation than where she was. That's right. But there's just some things that she's going to have to really slow walk financially. But I also think it's possible for her. I mean, I really do. I think it's going to be a long road ahead, but I think that there is a way.

You're a good dad. This is The Ramsey Show. Hey, what's going on, everybody? You are listening to The Ramsey Show. Hey, thanks for listening to The Ramsey Show. And if you like this show, we'd always love it if you like, subscribe, and share it with somebody who you think could benefit from it. I'm your host, Jade Warshaw. And I'm joined by Rachel Cruz today as we take your your calls, us a call. The number is triple-888-255-225. And we'll talk about the things that are concerning you, everything that relates to your life and your money. It could be relationships with your kids. It could be your career. It could be the holiday season that is upon us, Rachel. I was talking to James during the break because I saw a article that said 25% of Americans are still paying off Christmas from last year.

Oh, my gosh.

While simultaneously plan on spending more.

This year. This year just keeps going. Keeps going.

I find that to be very interesting. Rachel, I'm going to hit you with a couple of facts, and I want want you to react, let's get into this. So the stats say that on average, Americans are going to spend $875 on Christmas. And that shakes out to a little over $600 on gifts for immediate family, coworkers, then another around around on decorations, miscellaneous things, and then another another on just random, Oh, that guy over there needed a gift, thing. What do you think about that number?

It doesn't sound terrible to me. It doesn't sound...

I thought it would be more.

Yes, I would have thought at least 1,200. In my head, I thought it'd be over 1,000. For the average family? Yeah. But also- But with all of that, that's not just Christmas gifts. This is the whole holiday season.

This is the holiday season, yeah.

And part of me goes, Okay, 875, couldn't we have stacked up a little money throughout the.

Year to make that happen? I know. That's right.

Think about that, guys. Okay, so then I read this stat, 48 % of Americans start shopping before the end of October. Oh, wow. People get started early, and I'm like, Okay, that spreads it out a.

Little bit. Right through at least three months. Yeah.

But they're putting it on credit cards.

Yes, it's going into into going on debt.

Okay, so this is the kicker. Here's the kicker. 61 % of people have said, and this is very very as of October, 61 % of people have said, Hey, we're living paycheck to paycheck. Four out of of people are saying, Man, we are worse off this year than we were last year. Year. So they're saying, Life is hard right now. Finances are hard right now. But when asked, they still plan on spending more more year than last year. That for me, and I'm like, Wait a minute. Wait a minute. What's happening? Happening? And they come through with with stat that says, says, 74 of Americans say they feel stressed about their money. I'm like, What is happening? You're making this choice.

Yes. Oh, my gosh. See, that's what's funny is I'm like, and it's such a human behavior thing that it's like, once you have your mindset to something, you're like, Oh, I'm going to do it. Regardless of what the other numbers are saying, I'm going to choose to continue following this plan. And you're just like, Wait, no, no, no. You can stop right now. You can stop and pivot. Well, here's here's - Ross on friends with friends with Pivot. And he's like, Pivot. We can all pivot our plans if your numbers are not adding up like up like if you're still paying Christmas from last year. Yeah.

Let me tell you what I'm hearing in my heart that I know someone is saying. I know someone is like, Jade, the year has been so hard. I feel like I can't spend money on anything. I just need a little joy. I just need a little joy, Rachel. I can't give up Christmas, too. Let me just go hard on Christmas. And then when January first comes, I'll get back on track. And please, Rachel, don't take Christmas from me. I got to get my gifts. Come on, I got to get...

And what's And what's funny is the just be just be I'm some really sure sentimental things. Probably a lot of crap for the kids that they're going to play with for two days, and then they're moving on to the next thing. As you pointed out yesterday, out yesterday, Chase.

Adults don't need.

Gifts around to Aunt Rita who if Aunt Rita, quote Jade, needs the blender, Aunt Rita can buy the blender. That's right. So really, I'm like, it's either obligation. It's because you just always have done it. Yeah. I mean, right? There's a lot of this in play when you could actually say, Okay, let's just stop and reassess what's really happening. And we can get our kids some things, but it doesn't have to be that much.

It doesn't have to be that. What would happen if you got a family gift, like a ping-pong table, like something that it's one gift. You don't have to spend $400 and $500, but it's one gift that the whole family can truly enjoy. It brings everybody together. What would that look like? Especially if you're in debt and you're really trying... You're still paying off Christmas from 2022 or beyond. I just feel like there's ways that we can pull back and go like, do we want to stay on this hamster wheel? That's it. Yes. Keep creating debt. Or do we want to just do... Because really, usually it only takes one year to put that stake in the sand and be like, be right, this year is going to be different, and you can get so much traction from just one time drawing that line and be like, This year, we're not doing it. And there's.

Something about lived experiences that I think bring us back to what we've always done. It's like... We know it. We're comfortable with it. It's just what we do, and so we just go back into what we do. And to your point, if you change something different this year for Christmas, like you pull way back, or you stop giving gifts out to Aunt Rita, whatever it is, and you live through it, it gets to be February, March, and you think, Oh, okay, everyone's okay. Yeah. Everyone's fine. Yes, that's right. We all survived. And I could repeat that again, right? So it's almost like you have to go through the actual action of it to to assure yourself, you're going to be okay, and everyone else is going to be okay.

That's a word, Rachel, because it really is like a news cycle. News cycle. Something is really big in the in and it's the only thing anybody's reporting on, and then two, three weeks later, it's crickets. You never hear about it again. It again. And I feel like Christmas is that. Right now it's like, Christmas. There's only two paychecks till Christmas. And by the way, there is only two paychecks till Christmas. And it's the only thing we can think about. But you're so right. On December 26th, no.

One cares. I know.

It's over. Yeah. December 26th, it's over. And you can go, Wow, okay, that is over now.

It didn't matter. And honestly, and call me cheesy, but I'm being for real. I'm like, Even this past this past Thanksgiving, I'm I know Thanksgiving doesn't have gifts and all of it. But I'm like, When I look back with my kids, I'm like, The memories we have, we took bikes to an empty parking lot from a high school down the road, rode bikes around the parking lot because lot can now ride her bike. We went on a hike. We did puzzles. I forced my kids to kids to because I'm 80 years old and I love puzzles. So we did Christmas puzzles. We watched Home Alone 2. We saw We saw We had a friend's giving. Everyone brought appetizers and appetizers and we all had a great night and played a game. You know what I mean? You look back and it's like.

That's the good life. 100 %.

It's not all the crap that you clean out of your play room 18 months 18 months all... You know what.

I mean?

Yes, I do. So that's it. And so there's something to be said. Yes, stuff is fun. We are not against stuff on this show, okay? So yes, Santa is me bringing a new bike for one of the children. We're going to be having some fun stuff this Christmas. But yet, what do we all remember? We remember the time spent. And I don't want to seem like a like movie. But she's of it. But it's just true, you guys. It's true.

That is true.

Don't go into debt. Don't. Stop. Just stop. It's unnecessary. Go ride bikes in an empty parking lot with your kids and have an afternoon.

It might be the first time first ever done ever done Rachel, what you're describing, that is a is And for many, that is a complete mindset shift. I was on a webinar the other day about day about we were talking about, look, if your Christmas budget doesn't allow for it, you may have to cut back. And some of the people in the chat were saying, were we're not having Christmas this year. And like, Oh, I guess that does it for Christmas this year. I guess we can't have it. And I'm like- Because it's a gift. Because, yeah, that's what I'm saying. That's a mindset a mindset for a lot of people, Christmas is Christmas is never had it any other way. We don't know what it looks like to not have a stack. Everybody stack. That stack on Instagram where they're all stacked up the wall and all the wrapping paper is the same. And I'm like, Whose life looks like that? Did I.

Tell you my story about this last year? No, but.

Tell me.

Okay, I did that. I saw everyone posting their pictures. I thought that was sweet. And we were going to bed that Christmas Eve. I think Santa had come and the Christmas tree Christmas It was a sweet picture for me. And I took a picture and I did put it on Instagram. I just said, Merry Christmas, everyone. I hope you're having a great time. Happy Christmas. I hope you're having a great Christmas of your family. Jane, the amount of comments underneath that was like, I'm so glad you practice a minimal Christmas, Rachel. Minimalism is at the... All the stuff where I was like, No. Oh, I didn't think we did. Oh, my Oh, Winston, did we? So we? We did good. It made me feel good. Because there wasn't a ton, but I feel like we got good gifts for our kids. It just made me laugh because I was like, Winston, who knew it? We were minimalists. Look at that. I didn't even know it. And it was a great Christmas.

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The Ramsey Show. I'm Jade Warshaw, joined by Rachel Cruz. Give us a call. The number is triple-eight-eight-two-five-five-two-two-five. Let's go directly to the phone lines where we've got Monica in San Jose, California. Hey, Monica, what's going on?

Hi, thank you for taking my call. So I'm calling because my husband and I bought our first home in the Bay Area in September. I can go into the financial details of how it all went down, but essentially it was for 1.19 million.

1. What?

1.19..

Okay, okay.

We were able to put to down.

Wow. Nice. Yeah.

So again, if it's helpful, I can go into all the financial details of what the what.

The What's your question?

The question is that we hate the house. The house.

Oh.

What.

Changed? Oh, no.

Yeah, we're really unhappy.

Shoot.

Why? It's not a great layout for our lifestyle. Not a lot can be done to change it. It's a townhome, so there's restrictions on what you can do with an HOA. And not only that, it's a three-storey townhome. So it's just a big issue around layout, primarily.

Did you know that going in? Going in? Didn't buy a.

Buy Yeah, I know. We did know it. We were first time home buyers, and I think we really didn't spend enough time on thinking about the about the home. Really concerned about whether it was a good financial decision, and we spent a lot of time thinking about that. And this is a very competitive area for real estate. So we really wanted to be home buyers. And at the end of the day, the question is, we're already here. It's already done. Is it worth it for us to take a loss and try to get out of it as soon as possible, or should we try to try.

To you feel like it's going to be a loss?

Well, my husband is particularly very unhappy here, and I just feel just feel like he's it's causing a lot of lot of Financially, if you.

Sold it, why would it be at a loss?

Well, the value of the home is already dipped since we purchased it.

What's it at now?

And also, of course, the seller fee for working with a realtor, all of that, we would definitely take a loss. It's a matter of how much of a loss. We're just trying to think to does it make sense to stick it out? How long should we try to stick it out before trying to sell it?

I got to be honest. Part of me, I'm hearing what you're saying, and I can tell that it's really bothering you.

It's bothering your husband more than you, Monica. That's a little bit of my question is that he's unhappy and he's short and he's not...

The reasons, and feel free to elaborate, to elaborate, calling People they're like, Oh, the guy upstairs is smoking weed, or, My neighbors are violent, or, There was a murder across the street. Those are the reasons that I'm like, Yes, you need to move immediately. But when somebody's like, Oh, I just bought a $1.19 million house and I just don't like the like I'm struggling with that. I'm not going to lie. Is there something else that... Is it far from work? Is there a big commute? Is there something else that's really weighing into this that you're not saying?

Well, we moved from a home that was in the same community that we were we and it was fully upgraded, and we missed the opportunity to buy that home without a realtor is being involved. So it could have been like a directly buying from the owner situation. And so I think that's really weighing on us. And comparing this home to that is really hard because that was an upgraded home. This is not. And we're going to have to put some money into this home to make it as comfortable as that home was. It's also on a busier street, so it's really it's really we have a baby, and she's often being woken up due.

To the-.

Well, a sound machine can solve that. We can just get one of those white noise machines. I'm just being flat out on this with you. I don't know that this is a reason for you guys to move. I think this is a bit of... And I'm not saying you can't move eventually, but eventually, but.

To- To take a.

Take a loss, does it make sense? To take a financial hit. Yeah.

Yeah.

It doesn't, Monica. I mean, you call it call a financial type show, and so we do look at the numbers of this. I mean, it's not. I mean, if you guys have the money and you find something better and you guys just shake hands with each other and say, We're going to take the loss. We're going to call it stupid tax. We shouldn't have bought in the first place. We're going to go find something we want. You guys can. But financially, it's not smart. And what you have to understand too, Monica, is that there's a level with this discontentment that can be legitimate, I get that. But also that level of discontentment and who you guys are still moves with you. And so that is one is one would make sure to have with you and your husband to say, Okay, we're moving because we don't like the house, and no house is going to be perfect. And the next house we come to is not going to solve all of our problems. It's not going to be the thing that fixes everything in our lives. And I don't know. Does that make sense? There's a level of that discontentment that I'm hearing, and that can follow you.

Follow you.

It's more so that when someone is deeply unhappy every single day, and it's impacting your wellbeing to the.

Point that it's- That's it, though, Monica.

Why should he.

Be doing that? It shouldn't be impacting him because there's three stories. Three stories. Do you know what That's where I'm like, Oh, there's some stuff happening that's probably more than just the house in his life and what's happening. What's happening. I you're really that unhappy because of a layout of a house, then you're an unhappy person. There's person. There's something else.

Yeah, I second that. Second that. I husband and I moved from South Florida to here, Monica. And before we moved, we had done everything. We had completely renovated our house, made it exactly the way we wanted. But then we moved for a job and we moved here. Our house is nice, but it's not upgraded. It's not the way it was. And I could easily be like, Oh, man, that other house was so much better, and now we're going to have to renovate this one and $1.1 million. There's just some part of that where you do have to take a beat and be like, be we have a great home, and it's going to take a while to get it where we want it, or we're going to have to live in this home until we can afford to move to the next home. Yeah.

I guess the guess is, how long do we need to hold it before it makes sense to sell it?

Our rule of thumb is five years for a house to ride through the market. Well, we tell people to buy. If you're going to buy a house, make sure you're in it for at least five years. That's usually average amount of time for the market to go up and down, all of that. But again, we're in a weird market. And, Monica, hear us say, and I always give people this out on out show that you're a grown- Like you're grown. You're a grown-up. If you guys decide we're going to go take a $80,000 hit, then we're going to do that, right?

Because you're the one the one to sleep.

At night. But just hear us say, though, there is other stuff happening that's causing this unhappiness that will follow you. And that would be more of my of my we can't be content as a family of where we where And again, I understand like, understand the cabinets are old. I get that things aren't upgraded. I understand that. I understand that. But the environment of the emotional environment of the family and of the home, the fact that it is so tilted right now because of a layout in three stories, that worries me. I don't like that. So there's a part of me that wants you all to stick it out.

To have to - Figure out what the real.

Problem is. Yeah, to have to deal to where you guys are. And I know that's stressful as a wife and all of it. Yeah, you're in a hard spot, Monica, and I'm so sorry. So again, if you guys choose to... I pulled $80,000 out of the air, I don't know what it'll what it'll you all can and you can move. But if you're asking from a financial standpoint, five years is usually a good rule of thumb from a time frame perspective.

Well, it also makes me wonder. I'm like, okay, if they sell this house at a hit, they bought what they could afford. So what are the chances that they're really going to be able to get anything better than what they already have already You know what I mean? Yeah. So they could, I mean...

A better layout.

Better Maybe, but it might not be fully upgraded.

I don't know.

I'm sorry, Monica. Deeper Monica. Are involved are 100 %. That does it for this hour of The Ramsey show. Join us for the next hour. 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 actual amazing relationships. I am your host, your Warsha, joined by your other host, other author, host of the Rachel Cruz. Rachel Cruz, I must say the Ramsey Cruz show. It's great. Hey.

Very similar.

It's all the same. We're taking calls about your life and money, so give us a call. The number is number and we would be happy to talk with you again. Anything that has to do with your life, your money, Christmas gifts, whatever you can think of, we will talk about it as long as it has to do with do and Life and Money, so a call. We'll go directly to the phone lines here with Dorothy in Boston, Massachusetts. What's going on, Dorothy?

Hey, Jade. Hi. Hi, Rachel. My question today question where would be a really good place to start when someone knows little to nothing about investing?

I love that question.

Is it you? How to invest? Is it you? It is me.

I'm asking for a friend.

A right here.

No, it's great. Let me just tell you what I did. I knew that I wanted to work with a Smart Vester Pro or work with a professional, but I also wanted to have a baseline of knowledge going in so that I could follow them in the conversations and also have an idea of what I wanted because I didn't want to go into it with this idea of like, Okay, you just tell me what to do. I wanted to learn and understand it. And so for me, me, a lot of that was I started listening to shows like this and digging into that content. And on our website, our com, we have so many articles on investing and all these things that you can really sort through. And I think that that's a really great really And then I just spent time doing my own research, and then I called up a Smart Investor Pro, and I let them know, Hey, here's what I'm thinking. The financial plan that I follow talks about investing across four types: growth, types: growth, growth aggressive growth, and international. And international. Talk about putting about putting into each one. I agree with that.

I just really started that conversation and I let them know, Hey, I'm open to learning. I just want to understand how we're investing and how we're doing this. Doing this. And how I started. I started. Is Is that pushing any buttons for you?

Yes, it is. I'm not quite there yet to baby step four.

Four? Four, where we start.

Yeah.

But I just.

Want to have like- Some basic knowledge. -an idea.

So when someone's like S&P.

500 or whatever it is like, I'm not like one of those things. Yeah, totally. Okay, so let's just do a quick four-minute high-level investing school for you, for Oh, I love it. Okay, so when it comes to investing, we have the rule, we call it the kiss rule. Keep it simple, stupid. Is what we said, keep it simple. Yes, great rule. Yes, because people get very deep into the weeds of stuff, and they're all trying to do all this fancy stuff. So keep it simple. So, yes, you mentioned the S&P 500, the Dow Jones, when you turn on the news and you see the big chart with all the stuff, right? You get the ticker, I'm like, That's numbers. That's right. So what you're looking at is just basically the values of these companies. And so the S&P 500 is the top 500 largest companies. And so you're going to have Apple, you're going to have Ford, Motor Company, you're going to have Target. You're going to have 500 of the largest the And when you buy into those companies, you buy into the market. You can do S&P 500, which is not to get too complicated, like the index funds.

You can go into the stock market. But basically, what you're doing is you're buying a small portion of these companies when you go and buy a stock. Now, we recommend, Dorothy, people can buy single stocks where you put all of your money in Apple, or you put all of your money in Target, or all of your money in American Airlines. We don't recommend that. So some people's strategy is they go and they buy individual stocks, and they put their money and hope that a few of these companies do really well. What we teach, Dorothy, is to invest in mutual in mutual mutual funds are 90 to 200 of those stocks in one fund, okay? Okay. And so that's going to help spread your money out so you're not in single stocks. So that's how the market, the basis of that. Now, we can we can branch retirement investing. So you're going to hear things like a like which most companies offer their employees, and they'll do a match. So if you put in three % of your income, Dorothy, the company will match three %. Or some companies, it's four %, five %, six %.

Now, when you're opening a opening then you have a choice. The money that they have, where is that money going? And that's what Jade is talking about, is actually taking your money and buying mutual funds with it. Now, the specific mutual funds are the four types that she talked about. That's pretty deep in deep in the details of it. But that's the that's There's a traditional IRA and a Roth IRA, which is another vehicle for investing. And again, you can you can take a that account, but the money you have in that account, you want to actually invest. And that's where a Smart Vester Pro can help you. And then another term to remember, Dorothy, is Roth. Roth is your friend, R-O-T-H. Roth means it's after it's after So it's after you've paid taxes on your income, your income hits your checking account. You use that money to go and fund a Roth IRA, which the great thing about that, since it's after tax dollars, that means all the growth that's going to happen, compound interest in that account is tax-free because you've already paid taxes. Yes, which is beautiful. So whenever you see Roth, we want that.

We want Roth IRA versus traditional. And if your company offers a Roth a you take you too. Now, again, it's after tax dollars. So you're going to feel it a little bit little bit hurts a little bit more because you've paid the paid and you're like, Oh. But again, I don't want to confuse you, but that's just the basics. No, that's very clear. That we look at. But I would sit down with a with a Smart Vester Jade said, if you go to ramseysolutions. Com, you can find one in your area. And if you're anywhere near Boston, there should be multiple. And sit down and talk to them, set up meetings and interview each of them and figure out who you like just from a personal standpoint, who you enjoy, who's going to teach you. Because you want someone in your corner because it can get really granular really fast.

That's right.

And you want somewhat of an understanding, but you also have to know that these people, they do this day in and day out. That's right. So there's a level of trust you have with them, too, in this process.

Yeah. And I also want to encourage you or anybody else listening, people listening, people it in one take. That's right. Yeah, that was not... You know what I mean? I had a buddy come visit me, and she was like, Jade, explain this Roth IRA thing to me one more time. More time. Rarely get it in the first try. I remember the first time I was like, Wait a Wait a minute, now? What now? And it's want to go back and listen to it again. It again. Back and listen to this call again. Like I said, dig into some of those articles. Make sure you're setting up-time to talk with these people because it takes a minute for you to really understand it. Because like Rachel said, and it's true, it does get granular very quickly. Very quickly. And it's well, once I finished my Roth IRA, then what do I do next? And then if I have more money, where do I go next? And so before you know, you're really going down the line on this. And you want to make sure that you do have a clear understanding because.

These are your hard-earned dollars. Yeah. And, Dorothy, and for anyone listening, that Baby Step 4 is 15 % of your income into retirement. So retirement is going to be your 401(k) at work or 403(b) and a Roth IRA. Those are the two main ones. There's other things like an HSA and different and different you out those other two that are that are we talk about that here at Ramsey. But for most people listening, always remember, it's your 401(k) and Roth IRA, 15 % of your income that goes into those.

That's right. All right. All is The Ramsey Show.

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Com/ramsey. And today's question comes from, ready for this? Scrooge mom on a budget from Ohio. She requested this name. She said, Please address the topic of Christmas gifts for teachers. I hear my adult children talk about the cost of gift cards, etc, for their children's teachers. I raised four children. They had multiple teachers every year for year PE, speech, music, art, playground supervisors, cafeteria workers, homeroom, etc. Any given Christmas, I could have dropped hundreds of dollars on 30 plus teachers and support staff alone. They are hardworking professionals. And I'm trying to understand how this all got started and why it has gotten out of hand. I am more inclined to get a Christmas gift for those working on Christmas Day. Interesting. There. Yeah. So I don't know where this, quote-unquote, got out of hands. I don't know. And I think it's a really personal thing that whatever you choose to do what your budget allows. But I do think the expectation of just of in general doesn't need to be your expectations. You have to set your own for your own household. And Jade, what I have found with majority of my kids, majority of years, a lot of the room mom or someone will actually Venmo her money, and she'll get a big gift from the class.

Oh, that's great. So that works out really well, which is very nice. Now, I will say this is one my one I do go big on my kids specific teachers. So the kindergarten teacher and Amelia has third grade. She has two teachers. So I will, because I just appreciate them a lot. And again, our budget, it's something that I plan and I do. So that is one area of life that I feel like I'm more... I may spend more on a teacher than.

My parents. Oh, my God. Look, but that's.

Your choice. Yeah, and I want to, and I genuinely do. And I don't do it for all of them, even though there's so many people that help out and all of that. But I think it has to be in your budget. That's right. And the expectations for your family, not letting everyone else set it. But I think the group gift is always a great idea.

I like that. Look, I hope that's what happens with my son's kindergarten class, because I haven't heard anything yet. But I'm like, I'm do we do?

And I know teachers, I've heard from them, they don't want candles and all that.

Please, no candles.

So gift cards is a thing, right? So if you go and spend 20 bucks or whatever to get them a great gift card to card to going to appreciate that.

Appreciate that. I just say for the people, get them a gift card that they really can choose what it's spent it's Like Visa gift card, Target gift cards. That's good. Target and Walmart gift cards, I think, are fine because there's so there's so Amazon gift Amazon because there's so much to choose from. But don't come in here with a subway gift card because everybody doesn't like subway.

Or even Starbucks. Yes. I just feel like people...

Yeah. Yeah. Yeah. I think that I speak for the teachers when I when let them choose them choose their if you're going to do a gift card, make sure you make it a generalized- Yes.

And it is for me. It's a profession, and everyone knows that they're not paid, but they should be paid for the amount of hours and work and what they're doing. They're literally teaching the next generation. I'm not a homeschool mom. I mean, I would be a terrible, terrible teacher. And then Emilia is bringing home common core math now, and I'm just like, I literally have no have I can't do this. I don't know what you're doing. Oh, my gosh. I'm scared. I'm scared. So I really appreciate good appreciate good we've been so blessed, our kids' school, I mean, every teacher we have just loved. I mean, they're just wonderful. So, yeah, I had teachers out there to all you teachers listening and watching, or if you know a teacher, send them this clip because Jade and I both, as moms, greatly appreciate good teachers because, man, it's a lot of work.

They deal with a lot. I mean, I would say at the very least, if your holiday budget, if you're like, you're on the holidays, I'm stretched to stretched to make it a point to contribute at least at some point throughout the year. I would say that.

Yeah, or do baked goods. Do a loaf of bread with a letter. Some level of appreciation doesn't have to be through a present. Some level of level of they all.

Need it. Yes, it. Or just make it part of your rhythm because they need that stuff. Oh, love it. That's good. Sorry, Scrooge Mom. We had to debunk you on that one. All right, let's go straight to the phone lines. We've got Deborah in Dayton, Ohio. What's going on, Deborah?

On, I'm looking at starting building a real estate property portfolio.

Cool.

And I'm ready to do probably a baby step. I'm very, I would say, would say, about being in debt. I own my own home. We don't have a payment there. We own another home with no payment, but that's getting prepared to go on the market for rent here for probably around $1,600 to $1,700 to $1,700 I do own another smaller property that I that waiting for that refi at six %, and I owe about a 70K on that. My payments are about 600 and 600 for about for about to get somebody in there in I do that. And some things there. The debt that we only are carrying now is a truck that we got at zero % interest, and that was for our future uses. Future uses. Is probably about $1,200 a month.

What's the full amount?

Oh, how much did it cost? Yeah. Cost? Yeah. We're okay.

$95,000. Yeah.

We've been getting some expensive cars this show.

We like cars. We like motorcycles.

What else do.

You have?

What other? Just curious.

Four motorcycles.

Four motorcycles. Are they all paid for? Paid Yes. Okay. I'll purchase.

Range Rover, purchased.

Fully in cash. How much you guys make a year, Deborah?

A van, no, I just wait until I have it or we paid it off. Okay. So together I have an escort set up for myself. And my husband makes $110. I make maybe somewhere similar because I'm on a commission.

So you guys make $220,000 a year?

Yeah, roughly $220,000 to $220,000 Okay, $250.

Okay.

So we purchased the house a year and a half ago, remodeled ago, remodeled it took about $50,000 to get it up to what we want. So I'm very happy. I was very was to stay to where probably I could sell it.

Now for now.

You may have to come on with your question because we're right up against the clock. So how can.

We help?

We help? My question is I have probably $60,000 in my account, so I could pay off that rental property. I could pay off the off the interest, but I really want to maybe have money to purchase another small rental.

Okay, so if I were in your shoes, I would pay off the final rental that you have because your primary residence is paid for in cash. Home number two is paid for in cash. If you can pay off rental home number three, I would definitely do that. I would not buy any more real estate without paying cash for it. Also, you guys have too much stuff that's tied up, too much money tied up in vehicles that are going down in value. I would seriously consider scaling back on buying things with motors. It sounds like you have too many as it is. This $95,000 truck really deeply, deeply bothers me. But you guys have got a high net worth, so I'm not that concerned about it. Get it paid off as soon as possible. This is The Ramsey Show.

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The Ramsey Show. There are only two more paychecks till Christmas, so let us help take the calls about your life and your money and what you're doing with your money not only now but into the new year so you can get on a plan where you're actually making traction and paying off debt and saving money. We want to help you do that, so give us a call. The number is number I'm Jade. She's Rachel. We will take your call. Let's go straight to the phone lines where we've got Mary from Calhoun, Georgia. What's going on, Mary?

Hey, you all. Thank you for taking my call.

You're welcome. How can we help?

Okay, so my husband and I are I are babies with after watching you all for about a week now, we are on fire and you have helped us come up with a solution for our health situation. So we want to spend the next year or so saving up for our emergency fund. We would like to get $20,000 in that. And after that, we want to pay off our home as quickly as possible, investing everything that we have to get it done so that we can demo it and rebuild.

Wow. Okay.

I.

Okay. I know crazy. Why would you say no to your investment? But we live in a farmhouse that was built around 1880. And unfortunately, the additions that they did to it are garbage.

Okay.

And we didn't discover this until after moving after moving none of the bones of the house the solid enough for us to renovate it room by room, which was the original the original chip and doy again.

Okay.

But anyway. So It just need to know. It would have been hurting our family to not invest in retirement or any of our children's college funds or any of that while we try to get this pay-off as soon as possible because the damage to the house is pretty severe. We've got broken joists and there's rot, and it's not something that we should be sticking with for much longer. And we're hoping that if we can really pour our hearts into this at the at end, we can have our house paid off in about five years.

Well, Mary, look, I love the way you're thinking like, Hey, we want to do this. We want to try to do this really responsibly. I will say there's a reason that the baby steps baby listed as they're listed. I do have a couple of questions and holes to poke in your plan. Number one, your plan doesn't align with our plan, and so I just want to call that out. We would say, hey, after you finish baby step three, after you get your 20,000 saved, you do need to start investing 15 %. It would be one thing if you're like, you're we're saving for another down payment. And I'd say, Yeah, I do that simultaneously, no problem. And since you do have kids, I do want you putting away some money as well for their college. And you get to decide what that percentage is as far as the as college. But I do want you to start investing because five years is a long time to delay that process after you've already delayed it for paying off debt and saving money. And so for that reason, I would not do that. And that. And other thing that we can talk about is why you feel the need to pay the home off before you cashflow any changes to changes to you don't necessarily have to pay off the home before you cashflow any changes.

You could do them both intentionally if you wanted or one first and then the next.

The house just isn't worth putting money into. There's just really...

But if you paid off, you will have put the money it takes to pay it off. It then you will you.

Because the equity and everything, so. Yeah.

It's not like you're bypassing that step. If you paid off, that is money that you've put into the equity of that land and lot. And then if you choose.

To rebuild it- And then that house, and then you're basically demolishing the house. So the equity is... That's not tied up in the land and the lot, the equity in the house. How much would the house be worth if you were to sell it?

Our estimated home value is about is about $282,500.

Yeah.

And we owe we Okay.

And you think a complete a is what you guys want to do? Or would you ever look at moving? Are there any other options that you guys have looked at?

We love where we're at. We love our church. We live in a very small town and a very small community. Okay. And we do we do so it's not like school ties us down here or anything like that. But looking But looking house, it breaks my heart that it doesn't look like it's worth putting money into trying to fix it at all. I mean, we put we on it to make it livable and safe for our for and we just had it in fact.

Have you run any numbers, Marion, how much it would cost to build what you guys want?

So we found a house plan for free, and it's about it's about build that house. It's very small, and it's something we can build on in the future.

Okay. Yeah, well, I would not sacrifice retirement for this. I understand that this is a really exciting really and you guys want to do this. But I'm with Jade. It would be simultaneous for me. And there's a part of part too. I'm like, I would hate for you guys to still have $147,000 mortgage and then have to take out a construction loan on top of that. I mean, it's just going to take a little bit, little I think you guys need a little bit of patience. How much you guys make a year?

My husband's net is $60,000 a year.

Okay.

And that's including overtime and things like that. Okay.

I would say this, Mary, if the house is in terrible condition is what you're describing, is it safe for you guys to live in it for five years?

Yes, we can make it work for five years.

Okay, so it's safe.

I would not sacrifice retirement, Mary. I think that these five years are crucial for just compound interest and starting for the future. So if I were you guys, I would not sacrifice that. How old are your kids?

I have eight-year-old twins, a four-year-old.

And a six-week-old. Yeah, if you wanted to wait on kids' college, you could if you wanted. I would maybe put a little bit away for them. But I just think that this will be a slower process than probably what you're giving a giving a And who knows, too, Mary, in five years, when the house is paid off and the kids are five years older and all the things, life changes. You guys may make the decision of, Gosh, we may want to move just houses in general. Maybe we want to do something different. I don't know. So just know, between now and five years, there's a lot of life that happens. So, yes, I would aggressively pay off the house, but I would not sacrifice investing while doing that.

Doing I'd also be curious if you've had you've had a contractor or a home a come out and look and say, Do we need to start from scratch? Or, What can we do here? Because that just feels really like we're going to bulldoze our house and completely start over. Because you bought it for almost $300,000, so it's worth something. It's not like you're like, This house is worth $2,750. You know what I mean? It's not what I'm- We.

Bought it at $1.57, but yeah. But yeah.

Did I get I.

That's the home value.

Okay, okay. But my point is, yeah, it's - I'm not.

Sure I could sell it in this condition.

Interesting. Okay, well, I mean, it just feels really drastic. So I would get definitely a second opinion. And I think I like what Rachel said, which is in five years, you don't know where you're going to be. And you may be like, Look, I don't want to go through all that. That's a lot.

A lot. Then again, maybe you guys look up in five years and you say, Well, we have some money. This is the plan. We have some money in our 401(k) that we've been investing, and the house is paid off. And what do we want to do now? And that's the beautiful thing about being about being does give you options and choices. And if you guys want to go build something, I would just hate to lose complete value of the house. But if you want to stay on the same land and all of it, maybe it's what you guys choose to do. But I would just say, Mary, to have a little bit more patience and definitely not sacrifice retirements in this. And if the house does become livable for any reason, any reason, then, yeah, be prepared to go rent somewhere for a little bit and all that, because you probably have to do that during the building process as well in five years, six years when you guys decide to do that. So I hope that helps, Mary. Thanks for calling.

Yeah, that's a very good call. That's so interesting. We've had a couple of calls like that today, Rachel, where people have gotten into a into and then they've realized this is not all it was cracked up to be. We need to get out of out of here, I just want to turn and run and run or I'm ready to bulldoze the whole thing. And I just... I think it just goes to show planning and taking your time and really understanding what the steps are going to be long term is going to save you a lot of time, a lot of money, a lot of heartache. And it's worth doing that due diligence on the front end so that you don't find yourself at this place where it's like, I got to make a move a move then you lose money because of it, right? This is The Ramsey Show. You are listening to The Ramsey Show. I'm Jade I'm Jade host. I'm joined by Rachel Cruz. So give us a call. The number is number and we will do our best to help you with the questions you have concerning your life and your money.

Let's go straight to the.

Phone lines. Jake, do you have our scripture of the day? Oh, I.

Do have our scripture of the day.

Rachel. Tradition. I know. Well, I didn't even think about it until you were going into the fourth segment, and I thought, I the show. We don't want to break tradition. Have we ever skipped it? Oh, we have. Oh, well. Once or Once accidentally. We wouldn't have been the first.

Look, I'm glad you got my back on that. Look, I'm already thinking about other things. It's a.

Christmas miracle. Christmas miracle.

Only two paychecks to Christmas. To Christmas. We've saved, saved.

The show.

You did. All right, scripture and quote of the day. Hopefully, it's a good one. It says, Psalm 42. Look, this is you, Rachel. You, Rachel. Here we are. She lifted me out of the slimy pit, out of the mud and the mire. He set my feet on a rock and gave me a firm place to stand. To stand. Rachel, for.

Pulling me out. You're so welcome.

You are so welcome. Then we've got Reba got She said, To succeed in life, you need three things: a wishbone, a backbone, and a funny bone. Come on, Reba.

We didn't want to miss that, miss that, that's a good one.

I That's a good one.

I love it. Backbone, funny bone.

And what? Wishbone.

Oh, I love that. There you go.

That is so, so good.

You're welcome, America.

You're welcome. Rachel saved the show. She pulled us up out the slimy pit. That's what I'm talking about. All right, so now we can go to the phone lines, where Devon is waiting for us in Kansas City. What's going on, Devon?

Hey, I just had a question about... I want to see your opinion on dropping my car insurance to liability only with being in baby step two. It would save me about $700 a year, but my car is worth only about $2,500. So that's the dilemma there.

Yeah, I got to say, I don't think that I would do that. Do that. Liability, I mean, the bare the bare we would say that you would need at least 500,000 worth of liability coverage. I probably wouldn't drop it down because here's the here's the want to make sure you're covered no matter what. If you get in a in a pile-up, you want to make sure you are you are covered, right? And just one of those things that you never know what's around the corner. I find this a lot. You're not the only person, Devon. I think when we're in baby step two, we're so intent on paying off debt that we're willing to sacrifice everything to do it. And a lot of people erroneously think that insurance, because it is something that we add to our budget, right? A lot of people think that we do that after baby step two, and that's just not the case. We always say that insurance is not a baby step. It's something that you do the moment you find out about it, the moment that you get the knowledge and go, Oh, my gosh, I need life insurance, or, Oh, my gosh, I need the right coverage on my vehicle.

And there's a reason that we suggest these amounts these it really does protect you in case the worst happens and you run into somebody and the damage is far beyond what you ever thought it would be. And so those are the sorts of things that can really bankrupt people and put them in a really tough situation. So I would not do that. But I would use our coverage checkup and make sure that you have the right insurance, the right amount of insurance, and that you're getting it for the best possible price. I would do that.

Yeah, I'd keep liability at the highest that I can get it. I just didn't know if having the collision and the comprehensive, would it not be worth that much? That it was my fault in an accident, getting another $1,000 a car probably wouldn't be an issue because the car is not worth that much. So I didn't know if it would be good saving that amount because I'd be paying about $700 a year every year just for a car that's worth about $2,500.

And you can't drop it lower since the value of your car is lower?

No, the collision and the conference, how we said the comp, they are what they are. But the liability, I've got that maxed out as high as it can go.

Okay, well, if you feel confident that you could replace the value of your own your own Yeah.

And you've got 500,000 on the liability you said?

Yeah, I've got the max that I can do, I think, 500, 300, something like that. It's just that the portion the portion replacing my car, that part, I don't know if it's justifying because almost about three years, if I didn't get in a wreck and then be needing my car replaced, I'd be paying over the worth of my car pretty much.

I could understand that. Let's see. That's your That's I'm just thinking through that because they're usually together, right? Your comprehensive and your collision is collision or are they separate?

I think they're together for the for.

I can see what you're saying, and that makes some sense. I would still just check that coverage, check up just to see. You might be able to get it for less expensive, and that way you're covered on all three fronts. But I do understand what you're saying you're if my vehicle is only worth this much, I can cashflow that if something happens and I get in a wreck, right?

Yes. Yeah, that's what... We're in We're in Baby me and my wife, and we've only got $8,000 left to go. We should have that have that by April. So that's why it's like we're about to have more income coming in with another car being paid off. And then we'll be working on Baby Step Baby So it's just a weird timing, and that's what.

I'm trying to.

Figure out. Yeah. Listen, in your case, if you have the cash to replace the car, if something happens, you can remove the collision. But if you move to a more expensive car, just don't forget to add it back because you want to make sure you're covered in that case. Does that help you out?

Yeah. Yeah, it does.

Thank you, guys. You're very welcome. That's a really good question. Thanks for the call.

It ends up being that puzzle of figuring out, okay, what do I have? And always still wanting to be insured to a degree that you get that. That's another thing. So it's.

That puzzle. I mean, the liability is the most important piece because you want to make sure that you don't know what the nature of the accident is going to hold, and you want to make sure that you're covered in that area. So that's a really, really good call. Let's take another one. Let's go to Jason in Sioux Falls, South Dakota. What's Dakota. What's going Hey, Jason?

Hey, Pleasure speaking with you. My quick question quick my wife and I are expecting some hospital bills to arrive in the next week or two, and we were wondering, is there anything we can do now to take advantage of my of my are we too late for that? Should we just keep stacking cash?

Well, what are you expecting?

How much in medical bills?

I'm not sure the total, the total, that it's nothing more than what my health insurance deductible is, then it would be $4,000.

Be What other Baby Step are you in? I just want to get a picture of where you're at.

Yeah, we're in Baby Step Two right now. Right now.

How much is in your HSA right now?

Four hundred.

Four hundred dollars? Yes. Dollars? Yes. I mean, you could put money in that and use it. I mean, the health savings account is a great option for health expenses. I mean, that's what it's there for. That's right. So yeah, that's a great place to save some money versus you could just do a high yield if you wanted. But yeah, I'm trying to think the rate for HSAs.

I don't think that the rate is really the thing, because thing, because what I I think what I would I would double-check this, but unless you're investing that HSA that HSA you're not getting a return on it. It's sitting.

It's sitting but it's protected.

It's protected. But what you could do is save up the... How much time until this $4,000 thing takes place?

Maybe.

Two weeks. Oh, two weeks, okay. Weeks, okay. I was thinking- Oh, two Yeah, just throw it in the HSA then.

Once.

We.

Receive the bills.

Oh, got you.

Okay. Yeah, I would just filter it through there, and then you're at least going to get the tax shelter on that money that you use for those qualified medical purchases. What I was going to say is if this was going to be like-.

Long term. Six months or whatever.

Yeah, six or eight months, you could save it up in a high yield, get a little return on it, and then throw it over there. But, you know. This is in two weeks.

Yeah, just put any extra cash you have in that HSA. That's great.

I love it. Does that help you out? Sounds good. Awesome. Thank you so much, Jake. I didn't mean to cut you off. I thought you were done. Thank you for the call. I hope you got the information that you needed. I think we covered it.

So.

Good. I love an HSA, Rachel.

I know. Well, and what's so interesting, too, and I feel like even in the past few past for years using it with an investment. And so I can actually use it as an investment vehicle- That's right. -and beyond Baby Step 4, 5, and 6. That's right. So it's a great place to put money, whether you're in Baby Step 2 to actually use for medical that you need expenses. But also in the future, it's a great investment tool, too. Yeah, that's right.

Because when you're 59 and a half that money, you don't have to use it for medical expenses anymore. You can use it just for just for general. Price anything that you want. So that does it for this hour of the Ramsey show. Thanks for joining us. Remember, when it comes to your life and your money, you can tell me that you won't do it, but don't tell me that you can't. Thanks for listening.

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