Live from Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by the inimitable Jade Warshaw this hour. Open phones at 825-5225. If you want to jump in, we'll talk to you about your life and your money. Remember, it's just two people's opinion. Take that with a grain of salt. That's right. Be kind. Let's start off with Michelle in Hartford, Connecticut. What's going on, Michelle?

Hi. Thank you for taking my call.

Sure. How can we help?

My question is, should I be contributing more money towards my retirement or paying off my heat lock, which is about 160,000 at 3.99% for a year?

Oh, wow. What caused you to take out such a large heat lock?

I purchased a house last year and it needed a lot of renovation. My plan was to pay it off in cash, which I had, and not have a mortgage. But just in case I took out a heat lock, just in case I needed a little bit of extra. Instead of fixing it up little by little, I decided it was just going to be cheaper just to do it all at once, and I did. So I went over, obviously, over budget. And then also I decided to go back to school and take some classes for a side gig. So that went on as well. So that's how I got the heat lock Is it the only debt that you have? Yes.

Okay. And are you currently investing? I'm basically asking you if you're walking through our baby steps, are you investing 15 % of your income now, or are you doing any investing?

So I was doing the max. I was doing 19% in my 403B and then the max in my Roth IRA, which is seven something. Okay. And now I decided to try to stop doing that, and I'm doing 4% in the 403 and trying to pay down the heat lock. But at my age, at 56, I'm wondering, Is that a good idea, which I'd be doing? Because I'm not contributing to the Roth, I don't have the tax savings and all that.

You weren't getting tax savings from the Roth, anyways.

Good point.

Only in traditional- What about the 403, though? Yes. Is there a tax?

But I wouldn't do any of this for the tax savings. That's not what's going to get you to where you want to go. Do you have any savings right now? Just emergency fund, liquid cash?

No, I don't because there's always something coming up. That's another thing that I'm- What's your income? Something's breaking, about 100,000. Okay.

Is it just you? Yes.

Okay.

Rule of thumb, George, we usually talk about if the heelock is more than half of the value of the home, it goes into Baby Step 6. If it's less, it rolls you back to Baby Step 2.

So this would be a Baby Step 6 scenario?

Yes. Because what's the home worth?

About $450, $500.

Okay. Well, I think it would be with income because you make 100K. So if the heelock was like 50K, we could throw it in Baby Step 2. But because it's a large heelock, I'm just going to throw you back in the baby step four through six here. What I would do in your shoes, though, you're not even there yet because you have nothing in savings. That scares me because what happens when an emergency pops up, Michelle? We're going to go into debt to cover it, aren't we?

Right.

We got to stop that cycle. So what I would do is pause all investing in order to save up a six-month emergency fund. Then we can go back to investing, do 15 %. Whatever's left over, we start checking at the heelock.

Okay. Even the 4 % that the company How much is? Should I be doing that?

Even the 4 %. Because you're going to be there soon. I mean, you make 100 grand. How long would it take you to get 20 grand saved up if you got real intentional and paused investing?

Live on 50K.

A few months? Yeah. So we're not talking about six years of not investing. We're talking about 90 days.

Okay.

And then when you go back to investing, you'll be doing 15 %, throwing money at the heelock. How quickly could you pay off the heelock making 100K?

Let's see, probably, I'm thinking a year and a half.

I like that. I like that. That's you living on $50,000 a year.

Then you can go back to maxing out all your retirement accounts. You'll have catch-up contributions. You've still got years of work to go. You're still young in that regard. You said you're 56?

Yes.

So think about what could be 10 years from now where you retire with no payments and a big old nest egg at 66 after maxing out for a decade. So you're going to be in good shape. I just reprioritize the steps.

Okay. I just feel like I'm losing out on the savings part, the compounding.

There's part of this equation that at this point, you're at the point of acceptance, because the truth is, when you make these decisions, there's a repercussion. It would be wonderful if I could make a mistake and not have to pay the price for it. But in this case, making the mistake of the heelok, I hate to say it, but now because of that, you have to pull back on your investing. There's just There's a yin and yang to that that can't be avoided, and you just have to accept it for what it is at that point. But truthfully, what George and I are telling you is the best way to get a hold of this and still be able to build wealth. You're paying off the debt to build wealth, and you'll still be able to do all of that.

Okay.

Hope that helps, Michelle.

Is there any way to tell at my age, I've heard different things, I'm behind retirement. I'm okay with retirement. I don't really understand how much I should have at this How much do you have? 700.

700,000?

Yes.

Well, if you think about it this way, there's something called the Rule of 72. What that would mean is if we get a 10% rate of return on your money, average. We know it's going to go down, it's going to go up. If you follow the roller coaster, though, 10% annual average return, then every 7.2 years, your money would double. 700, if you didn't add anything to it and you got 10% over the next seven years, it would become 1.4 million. Okay. And that's without you adding a dime, which we know you're going to start maxing out. And so that tells me you're going to be just fine. You're going to have zero debt with probably closer to $2 million when all said and done. Okay. So I would say you're on track, but I also wouldn't get comfortable just yet.

Right. No, not at all. Okay.

Well, thank you so much. Yeah. Thank you for trusting us with your call. All right. Should we try another, Jade? I don't know, George.

We got a minute in some. Let's talk about mistakes and repercussions. Okay. Because we do hear that. Sometimes people call in and they're telling us the error that they feel they made and how can they get back on track. It's our job to help them get back on track. But then you can't help but look in the rear view and go, But if I do that, I'm missing out on. And a lot of times it is the feeling of, I feel like I'm going backwards to go forward. You're telling me to pause my retirement. You're telling me that I've got to possibly sell a vehicle, possibly downgrade in home.

That feels like a punishment. We generally only want to think about opportunity cost when it'll benefit us. That's right. But not when we go into $160,000 of debt. Because if you think about opportunity costs, it could be, well, if I avoid debt, I'll have all of my income at my disposal to max out retirement and retire early. But instead we go, Yeah, but I want this thing now. I want instant gratification versus delayed gratification. So opportunity cost just helps you think through, if I put money toward this or if I go into this debt, I can't put that money toward this next thing. That car payment can't also be invested. That's right.

And it's a cautionary tale for anybody listening. It's best laid plans. In her mind, it was like, I've got the money, but just in case I'll pull out this loan. And before you know it, it's like, You know what? Getting my education sounds like a great idea. I'll do student. And so before you know it, you've gotten off track. And the hard part is when you make a choice, it has a repercussion.

We love doing math, too, when it comes to investing, but never when it comes to what our debt is costing us. That's right. Through interest, through our income, robbing us of our future, and so you got to think about this. The time to do math is before we go into debt, not after, when we want to keep justifying our behavior.

That's right. The good news is it's not too late. It's never too late to make your situation better and to make some positive progress in the right direction.

Whether you're 26 or 56, it's possible to turn it around. This is the Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. You call up and we'll try to give you the right next step for your life and your money. Marcus has chosen to do so over in Denver. What's going on, Marcus?

Hey, how's it going, guys? Thanks for taking my call.

Absolutely. What's going on? Hey.

So recently engaged, we are going through some premarital process, some workbooks, and some finance questions that I'm not sure entirely what to do. I know the rule is when you get married, then you combine your finances. I currently have about $100,000 saved up for a down payment on a home. She has about $80,000. My fiancée has about $80,000 in student loans and $10,000 on a car. I know I could pay that off instantaneously when we get married and push the house down the road. She's not necessarily totally on board with that. I'm just not sure what to do with that when we say the idea is.

Why do you think she's not on board with it? Is it guilt?

Yeah, it definitely is. We've both worked very hard, and she knows how hard I've worked to get out of debt and save up for money. It's a little bit guilt-ridden that I'd give up all my… The cashier saved her down payment just completely into her.

There's a part of that. That is very real. My husband and I faced that. He felt bad that he had more student loans than I. But There's part of that that if you put it in any other term as far as cleaning up a mess ahead of time, any other personal mess, you can't make perfect before you get married. Do you know what I mean? Absolutely. You don't feel the obligation to fix it completely yourself before you come to them. We're imperfect people and we make mistakes. I think when you frame it in that way of why are you categorizing money in a completely different light than all of the other aspects of our marriage, where we're basically taking each other as we are and we're working together to go forward. I think when you put it into that framework, it changes the way you think of it and you're like, Oh, yeah. Okay, that makes more sense. You're taking me with my mistakes, you're taking me with my flaws, and we're working together to improve ourselves in our marriage.

And accepting that blessing of, wow, this person worked really hard to save this money, and they're willing to use that to give me a clean slate. I mean, not to get theological, but that's a beautiful picture of the gospel. It's beautiful. We came in with all the debt, and he's got an unlimited savings account. He's like, I got you. It's like, I can't accept this. I need to work for it. There's a piece of that that exists. Also, it's a lot easier to go into 100 grand a debt versus saving up 100 grand. That's right. There's also that piece that she's feeling of, he works so hard for this. But the truth is, if you looked at a cons list of what she's coming in this marriage with, 100 grand. You look at the pros list, her. You know what I mean? That outweighs any level of debt. You guys working together, this is going to be like a blip in your lifetime where you look back and be like, Oh, remember we cleaned up that debt real quick, and then we started building wealth together. And yeah, it delayed our home buying by two years.

Who cares?

And big whoop. And so I think this is harder for her to grapple than you because it sounds like you are like, I'm willing to go ahead and pay off the debt, and we'll restart the down payment process.

And then for her, and I hope she does listen to this call, the flip side of it, which is the pretty obvious, is it's way better to have someone who says, Oh, yeah, it's just money. I'm happy to pay this off and start, My money is your money, and your debt's my debt, and I'm happy to be one with you on this, and we're paying it off together with the money that we have once we get married. That's a lot better than having a jerk that's like, No, you got to pay off your debt. I'm not marrying you until you bury that debt. You know what I'm saying? That is terrible. If you were like that, she wouldn't accept that either. It's like, if you have to choose between A and B, I'm choosing A with flying colors.

All right. Well, you know how those guys roll? We're very direct and to the point, so I'll try to frame it a little bit more differently.

Have her watch this call. Also, I'm wondering, what will your household income be once you guys get married?

Once we get married, in a year's time, I'll gross 220, and she'll be about 55 to 60. Nice.

So-ding, ding, ding, my friend. So think about this. Mathematically, if you want to help her out, just go to a piece of paper, a napkin math, and go, All right, we're going to pay your debt down. It leaves us with 10 grand. We still need a little emergency fund, maybe. Okay, we make 275 at that point, how quickly can we save up 100 grand? Probably eight or nine months.

Yeah, pretty quick.

I think showing her how little of a problem this really is, it's not derailing your home ownership dreams for a decade. No.

Yeah.

You're just taking a step back to catapult forward.

Yeah. Okay. Well, I'll try to frame it, if we can.

Yeah. Have you guys gone through Financial Peace University as part of your premarital?

We haven't. We're doing a couple of workbooks. We haven't done FPU yet.

If I gifted it to you guys, would you go through it?

I would pay for it because I appreciate you guys and services.

Oh, that's so kind. Well, I can't let you do that today, but you know what you can do? You can pay it forward. You can get it for someone else. But I'm going to gift that to you today, Marcus, because I'm a Marcus fan. I think Financial Peace University is a huge part of premarital counseling. It doesn't encompass everything with premarital counseling, obviously. There's a lot of other pieces. But as far as finances go, I cannot think of a better way to get on the same page, learn that language by going through all nine lessons together. Because me trying to convince someone else about the thing I'm excited about, I'm like, Jade, you got to... I know. This guy Dave, he just like, sell the car. And you're like, What? What happened?

Yeah, I know.

And then you watch the lessons, you're like, I got to sell the car. And it becomes your idea versus this thing they threw onto you. So that's a very different vibe. And that's why I encourage couples, whether it's premarital, postmarital, whatever, go through a financial peace university if you're trying to get someone on board. And it's the most cost-effective way to make your marriage better and build wealth together.

I agree. I concur.

We nailed it. All right. Alex is in Chicago up next. What's going on, Alex?

Hi, guys. Can you hear me? Yeah.

Loud and clear.

Okay. My main question is debating whether I can leave my job in December or if I should sign up for another little group of second shifts for getting a head start on my emergency fund.

Okay, so there's no debt you're working on an emergency fund. Is that what I understand?

Okay. Starting in November, I started paying them about $82,000 of debt. It was $72. By the time I started the Ramsey plan, I had a total of $82, and now I have $19.4. Nice. At the end of the year, I should have, Okay. And now I have $19.4, and at the end of the year, I should have about $5.5, and if I quit my job in December, my debt payoff will be the same in February.

Okay.

I'm thinking about keeping it for Like a head start on my emergency fund, but I'm also completely exhausted and hoping it's less than- Are you saying just quitting your second job?

Are you keeping your full-time job?

Yeah. So right now I work about 52 hours a week. I work 40, and then I work like an extra four hours a week, and this is three times a month. So I work about 44 hours, and then I work an extra eight.

Is it the work or the type of work? Is it the fact that you have an extra job or is it the nature of the second job?

It's more the nature of the second job because I'm a therapist in an acute care setting, and it's a very physical job. And I'm like, What do you make from it? Because I'm super tired. What do you make from it?

What do you make from it?

My base pay and my primary job is 4.3K. I work weekends on my primary job, so I have 5k with my weekend pay. And then with my second job, I do 5.6. And then I do work overtime at my primary job.

So that is 5.9..

Wait, your second job is bringing in more than your full-time job? Yeah.

No, I'm just explaining that I actually… That's my monthly income incrementally as I add on more hours.

Oh, so you're making an extra 600 bucks from the side job?

Yeah.

Got you. It's about 250 net per shift, and I work about eight shifts every three months. So- So 12- Go ahead.

I'm just trying to understand. Just give us really clear what you bring in from the side job every month. Because what I'm getting at here is if you're telling me it's the nature of the job that's the problem, and it's given you 1,200 extra bucks a month or whatever that is, I'm pretty sure you could probably- It's about 750. Perfect. I think that you find another job and replace that income because a lot of times the burnout is not on the hours itself. It's the job that you're doing during those hours. It sounds like you've been going hard for a really long time and you just need to change a pace.

Yeah. If you did something that was more enjoyable, even less, you'd be okay. But I wouldn't just slow down just yet. You're so close. Keep the Gazelle Intensity up until you're through Baby Step 3. But I do think we need a shift in the meantime. Just shift the plan a little bit. This is the Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Listen, time is running out to book your cabin on the Live Like No One Else Cruise. It's setting sale March 22nd through the 29th of This is not your average cruise. This is a premium Caribbean. Are you Caribbean or are you Caribbean? You've been on a lot of cruises.

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Hey, how are you all doing?

Doing well. How can we help?

Yeah, so a little bit of preface. I've worked at a company for several years now, small business. Almost every, not almost, every year I've been there so far, at the end of our fiscal year, my boss, who wholly owns the company, issues bonuses based on how well the company performed our fiscal year, and I've gotten it every year, like I said. Now, this year, all of a sudden, no bonus ever came. There was never any mention or communication of bonus that's not going out this year. Then all of a sudden, out of the blue, I see that my boss has bought a brand new car. That's not really the size of the point, I guess. So my question is, is that ethical/can they do that, not issue bonuses and not even communicate it? And then the two-punch question is, what's the best way to approach that conversation with my boss?

In my mind, I'm picturing Clark Griswald when he doesn't get his bonus. That's exactly how I feel.

I literally was about to say that.

If you've come to expect it, yeah, it's disappointing if you don't get it. And it's even more disappointing if it wasn't communicated. I could see you wanting that. But at the end of the day, my bigger question is, how is the business doing? Because it might be that they're suffering and there's not that profit in order to hand out bonuses as it were. That's my first question. Also, I think you know that you can strike from the record that he bought a brand new vehicle because that's neither here nor there. But how's the company doing?

Well, I mean, as far as I've been informed, and I'm not in the finance department or anything like that, we continue to see year-over-year growth every year that I've been there. And as far as I can tell, the business seems to be doing well. We recently expanded the office space and blew out a wall and took over the space next door. Anyway, I guess all the signs that I can point to show- Was that part of it?

Is they had to reinvest in the business and therefore the bonuses went toward those goals?

Potentially. But that being said, I think to someone like myself who's an employee who's not involved in the big-time decisions like that. Here's what I think. You see all these things were I'm spending money on, and then all of a sudden, when it comes time, then I'm expecting my little bonus.

I don't get it. How much of a bonus are we talking, by the way?

Last year, it was $10,000.

Okay, that's decent. And what's your salary?

$90,000 a year.

Okay, so that's a big chunk.

I think You're asking, is it ethical? Yes. If they want to say, We don't give bonuses anymore, yeah, that's their prerogative. What I think really is the problem here is the communication within the business. I think that's what's really caused an issue here because I think if you can approach things with people upfront and say, Here's what's going on. Here's what we're going to... I know here at Ramsey, everything is just laid out on the line all the time. We're always having staff meetings. It's very clear what the goals are. It's very clear what's going to happen.

They cover, Here's what the profit sharing is going to be next month. So there's no surprise. Really what's happening here, it's just poor leadership, poor communication. It's not unethical, it's not immoral. Because they could shut the whole business down today, and that's their prerogative. That's right. I wouldn't get in a tizy over this or take it personally, but I would in your next one-on-one with your leader, say, Hey, can I get some clarity on what happened with the bonuses? I noticed that didn't happen this year and it wasn't rolled out to the team. If they can't answer that or they get dodgy, then you got to go, Can I trust this place? Because if they lose integrity and you lose trust, it's time to go. That's just going to plant a seed of resentment in your heart. But it could just be, Oh, dang it. You're right. We should have been more clear about that. It could have been a brain fart.

How big is the company? How big is it?

About 20 employees, small business.

Oh, so I feel like there would be even more…

I could see things- Are all your coworkers talking about this? This has got to be the water-cooler talk.

Yeah. I mean, yeah, this is definitely the water-cooler talk, no doubt about it.

And no one has bothered to ask leadership.

Well, so here's the funny thing is we have, obviously, a management structure, if you will, hierarchy. And I approached both the two upper-level managers who both deferred me and said, That's the boss's decision. I have no say in that. And like I said, the business is wholly owned by one individual.

So they both- Interesting. 20 employees. I imagine you interact with the CEO go?

Yeah, I mean, every day.

Is it?

Okay. Could you set up a meeting with him?

Yeah, just ask. With her?

Yeah, I mean, I definitely could. I think it's just, like I said, this is the water-cooler talk, and I figured I.

I think, you know what? I would own up and go, Listen, this has been floating around. I don't want this to turn into gossip, but people are going, Hey, what happened here? I think it would be a great move for there to be a communication around this.

It's not in an entitled way. It's just in I think for everybody's good. To your point, there's not chatter about it. I understand that we struck this from the record, but the worst thing ever would be for people to be like, And look, he's driving a brand new Mercedes. That's our bonus is right there parked in the front lot. That's terrible. That is a recipe for disaster. Terrible.

Well, unfortunately, that is the reality of the situation. Like I said, we can strike that from the record, but you hit the nail on the head there.

People put two and two together. Well, I hope that helps, Mac. I think this comes down to poor communication, poor leadership. Wouldn't take it personally. I wouldn't go hiring a lawyer to go after your bonus, but I would at least have the benefit of the doubt of the CEO and management to go, I need an answer. That's not okay that this was basically presented to us as part of our comp plan and then just disappeared. And so I would at least go down that road. Next up, we've got Jeremy in Maken, Georgia. What's going on, Jeremy?

How's it going, guys?

Good. How are you?

I'm doing just fine. I guess my phrase would be better than I deserve.

There we go.

I love it.

How can we help? I've been listening to the show now for probably a good month and a half, two months, something like that. I have heard of Dave Ramsey and the baby steps and all that for a number of years, and I didn't really start listening and paying attention to it until, like I said, about a month and a half, two months ago. Then when you really start paying attention to it, if you're new to it, you realize just how poorly you have done and what you need to improve on. I think that's a self-evaluation thing of understanding that you can always do better. My wife and I, we've been married for 15, 16 years now, two kids, good paying jobs and whatnot. But we're trying to figure out the right way to do a budget other than knowing what bills that we have and then just eyeballing it as we go each month and wonder, where did everything go? That's the biggest struggle right now. We're okay as far as bill pay and stuff like that, but it's month to month. We're not putting anything back like by the way we should in savings.

So it's, realistically, how do you How do you create a budget?

Well, I mean- As elementary as that sounds. No, it's not elementary at all. It's one of those things that it sounds easy to do when you talk about it, but when you really start to do it, you realize there's a lot of nuance there. So the first question is, I mean, obviously, are you using EveryDollar, which is our budgeting app? I am not. Okay. I think that's the first place to start because I can tell you from experience, I was a person that did paper budgets. I got the ledger out. I had a notepad. I tried that for a while. Then I tried the spreadsheet thing. But the thing with the spreadsheet is it's only on your computer, and So if you want your spouse involved, they have to touch your computer. And most people don't want somebody to touch their computer. So every dollar is the best way to start. So we'll make sure to get that to you for free. And then from there, you can actually go on to YouTube. George and I did a- It's up right now.

Perfect. Where is it, George? The Ramsey Show highlights YouTube channel. We'll make sure to link it in the description and show notes of this episode. We made a budget in under seven minutes on the show, and we did it, and it was an iron-clad budget. And so that'll give you a great start for anyone watching who's going, It feels overwhelming. Listen, if we can do it in under seven minutes, and we weren't like geniuses, rifling through. We were just going through the process. Every dollar makes it easy.

And we do webinars, so stay tuned for those if you want even more.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. All right, Jade, producer James put this on the desk, and this is big news. Usa Today headline, You need to start paying your student debt. No, really.

It's time. Yeah, it's funny. The time's nearly up for federal student loan borrowers to start repaying, or else they're going to face credit score consequences soon. If you remember, President Joe Biden last year offered a 12-month on-ramp to repayment so that financially vulnerable borrowers who miss monthly payments during the period are not delinquent and it's not reported to credit bureaus. That on-ramp is set to expire September 30th, and anyone who doesn't begin making payments in October risks a hit to their credit score. So if you just remember, student loans were on pause for ever for years and years because of COVID, and then that finally lifted, and it was like, oh, my gosh, payments are due again. And then as soon as that happened, it was passed. But if you're not ready to pay, you don't have to pay yet. You get this on-ramp, basically another year where if you don't pay, nothing happens. Figure your life out. Get ready. Again, you cannot defer the inevitable. It's going to happen And at this point, it's due, guys.

Well, the problem is a lot of people, once you start living your life without a certain payment in it, you get used to that. Just like if you become debt-free, you're like, Wow, this is nice. I got margin to do other things. The problem here is it's going to be a shock to a lot of people's budget when that $400 student loan payment is all of a sudden due, and they didn't make any tweaks to their lifestyle and their budget. They haven't made progress financially. So you've got to do a budget today just to figure out, where is this going to fit in? What do I need to cut? Do I need to go make more money in order to make this payment? And by the way, don't just make the minimum payment. You'll be paying on it for 20 years. You got to throw extra at it. So that's where the debt snowball comes into play in all the margin-driving activities that we talk about.

If no payment is received within 90 days, your account will be considered seriously delinquent, and it can be reported to credit bureaus. And so this is really, really important. I like your advice, George. If you don't have a budget, start today. Don't wait around for something else to come and possibly take this off your plate. Well, what if they extend it again?

I'll wait till after the election and see if they give us- Don't. Yeah, please don't. Don't do that.

Anyway, I hate this, but- People are hearing us talking about, Well, it could hurt your credit score.

I thought you guys didn't care about credit scores. Listen, we don't care about the credit score as a scoreboard, but the truth is a bad credit score will hurt you financially. We want you to have no credit score. That's a cool thing to have because you're debt-free, but you don't need to not be paying your debt and having to hurt your credit score because that will hurt your insurance rates, that will hurt your ability to rent. If you're going to buy a house, that's going to hurt your ability to buy a house. The key is to have no score, not a low score. So make sure you pay your bills. If you need help with this debt payoff stuff, keep listening. We are here to help you guys get out of debt once and for all. Yeah.

Just a quick thing here. People say, Well, what's the consequences then if it's not just the fact that your credit gets messed up? There is consequences for defaulting on your loan. It not only It impacts your ability to borrow money, even if you're going to do something like buy for a house, because we do say it's okay to borrow for a house. That part does matter. But if you allow that to remain in default for too long, the entire balance can become due at one time. It's called acceleration. Once that happens, you're no longer qualified to do any deferment or any other types of payment plans because you've basically said at that point, We can't help you. And so you don't want that. If that happens, you lose eligibility for additional federal aid. Not that we would want you to go back into student loan debt. But again, it's reported credit bureaus, and it can take a really long time to be able to purchase or sell things like real estate that bothers you, your tax. And here's the one I think That really will make people be like, No, your tax refunds and federal benefits could also be withheld.

If you're a person that's like, My tax return, that's going to break me free. If you don't pay your student loans, they can hold that because- Uncle Sam holding that hostage.

Yeah.

Again, of course, they can take you to court and they can sue you. So please get on this. If you need help, we're here to help you. We're not mad at you. We just want you to get out of student loan debt because it is holding you back.

All right, let's go to Kaylyn in Annapolis, Maryland. What's going on, Kaylyn?

Hi. So more student loan.

Yay. A student loan call. How perfect. Yeah. I don't have any yet. Speak directly in your phone for me, Kaylyn. I'm having a hard time hearing you. Is this better? That's a little better, Okay.

I don't have any yet. I am thinking about getting my BSN. I own a home care agency, and I don't need the BSN, but I do want to be able to help my patients as much as possible and be there and work with them. We have a lot of hospice patients, so I don't need to go into debt for it.

My business can pay for it, but it also is going to be about $100,000 I was just wondering what I should do.

What's the upside for you getting it? You're saying you don't need it. In your mind, is it just so that you feel credible, or is there a financial upside in any way?

I can absolutely not have to pay more nurses.

When we do assessments, if we get a call from a hospital and they're doing a discharge, I won't have to pay the $75 to have a nurse come out.

I can do that myself.

If you run the numbers on things like that, how long would it take you to break even on this? Is it worth it to you?

It would take about three and a half years. About six months after I get my BS in, I could have it fully paid off.

Wait, if it's going to take six months to pay it off, why not just wait six months and save it up?

Yeah, I thought you said your business would pay for it. I assumed cash.

Well, it would take about three and a half years to pay it off. Then I would get my BS in in three years.

So six months after I get my BS in, it would be completely paid off. When I was thinking about the profitability of it, you were telling me it saves me $75 every time. My point to that was, Okay, how often do you make that money and how long, based off of that small subset of money alone, would it take to pay this off?

How How many times a year do you have to make that $75 payment to a nurse?

I mean, it depends.

Sometimes we get 10 billable hours a day. Sometimes it can be 15 billable hours a week. It's different. That's the numbers I would want you to run out because ultimately you want to go, How worth it is it for me to do this? Is this $75 something that over the course of a month amounts to $3,000, or is it something that amounts to $250? And really decide, How worth it is that? And is there another way that I could recoup that same amount of money that doesn't cost me $100,000? That's where my mind would go.

Got you. Okay.

But either way, I'm doing this debt-free when you have the cash to do it. If you need to cash flow it, Hey, I can cover this next semester and the next semester, and you want to pay that out of your own business, I still think you should pay it out of your own... You're investing in yourself at that point through the business. Is that what we're talking about here?

Yeah, absolutely.

I'm not planning on taking out the...

I'm going to use some FAFSA. I'm not planning on taking out loans for it.

I want to pay it all in cash. So it would just be an asset for myself, for the business, to do it on my own and just pay for it as I go.

Okay. What does the business make? What is the net revenue per year? And then what do you take home?

I am taking it About 120.

It's about $2.25 to $2.75 each year.

What's happening with the other money?

Our employees, so our contractors, our staff.

Okay, but I'm saying after everyone's paid all expenses, what is your net before you take anything home?

About $2.25 to $275.

Okay, so there should be $100,000 laying around each year that you could to invest in your nursing program, right?

Right. Yes.

Okay.

So, yeah, I would do it and just make sure it's cash flowed. If it's something you're passionate about that will eventually help you with this business long term. Remember, you're still trading your time for money. If it's something where you want to grow the business and you want to delegate to other nurses, then just keep doing what you're doing. No need to go through the program. But it sounds like you want to be a part of this.

Oh, absolutely. I want to be as hands-on with our patients as possible.

It's just it's such a blessing to be able to be there and do life with them.

I love it. God bless our nurses. And congratulations on running a successful small business. Very cool. Crushing the game and doing it debt-free. That puts this hour of The Ramsey Show in the Books. Thank you to Jade Warshaw, my co-host, all the folks in the booth keeping the show afloat, and you, America. Until next time, save intentionally, spend wisely, and give generously.

Before we get to the next caller, I got some good news for you. Even when this portion of today's show runs out of time, there's still plenty more for you to tune into. Just head on over to the Ramsey Network app to finish today's show for free right there on the home screen. If you don't have the app, just search Ramsey Network in the App Store, Google Play, or simply click the link in the show notes for an easy download. You never know what call is coming up next, so be sure and check out the Ramsey Network app.

From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by the one and only Jade Warshaw, and we're taking your calls at 888-825-5225. Be brave, be bold. You call us. We'll help you take the right next step for your life and your money. Seth kicks us off in Fortworth, Texas. What's going on, Seth?

Hi. How are you all?

Doing well. How can we help today?

Basically, to give you some background context, I grew up very poor. I didn't have both my parents in the picture. I was homeless at 17. I'm now 19. I live with my friends and their family. I had a family member that recently passed away. I didn't know him, but I somehow inherited some land that he had. I'm roughly going to get around 120,000 to 140,000. And basically, I don't know what to do with this money. I don't know. I want to be able to make sure that it's going to make me financially free. I don't know if I should put it into a business. I don't know if I should invest it. I don't know.

That's what the land is worth, 120 to 140?

Yeah, but the low-end will be 120. The high-end will be around 140.

Okay. Are you working right now? Yes, sir. Okay. What do you make?

I make roughly around 30,000 a year.

What do you do?

I'm a delivery tech for a medical company. I deliver hospitals. Okay, cool.

Around here, we teach a series of baby steps, and it's just to see where you are financially and what your next step is in order to get ahead financially. The first question is, do you have any money saved, and do you have any debt? If so, what is it?

I don't have any debt, but I also don't have any money saved. I just been living paycheck to paycheck.

Okay. Just let George and I just give you a run-through of this, and you can see yourself in it. The first baby First up would be for people that don't have any money saved to get $1,000 saved. Then after that, then they go through and pay off whatever debt they have besides their house. You don't have any debt, but not really any money saved. Then after that, you're saving 3-6 months of expenses. So you said you make about $30,000 a year, you live with friends. What would six months of expenses look like for you?

Six months, probably maybe, I don't know, like 10K. Maybe 10K?

Maybe 10K.

Okay, I like that. Do you pay rent right now?

I do. Okay.

What's your rent?

I pay a thousand a month.

Okay. Right now, this is just so you can get your head around it. You'll go back tonight and you'll really look through the numbers. So your first goal would be, Okay, I need 3-6 months of expenses. Then after that, we start talking about a longer term strategy. Okay, am I investing? So you mentioned you make $30,000 a year. Does your job offer any of 401k or any way to invest, something like that? That's what that would be about. So you can start looking into that. And then the baby steps walk on along. There's seven of them. And at the end, by the end, you've bought a house, you've paid it off in cash. And so that's the framework that this all rests on. And you've got a nice chunk of money. So typically we'd say, Okay, let's walk it through the baby steps. And what does that look like? For you, because this is the most money you've ever had, I would suggest that you drop it in a high yield savings account for a minute, sit on it, and learn as much as you can about how to handle money. I think being on the Ramsey show is a great way to start.

George, I think we send him Financial Peace University to really get his head around how this can help him and what it means. It really breaks down the baby steps further for you.

I'll also send you my book, Breaking Free from Broke, that will walk you through this process and what it looks like beyond that. How do you build wealth? What are some of the investment traps to avoid? Because the problem is it's easy to get starry-eyed when you see a big pile of money and what you do with it. And you're going to have a lot of voices in your life telling you, Bro, you got to start a... Bro, you should buy a really nice car. And the temptation is going to be to squander this money. And six months from now, here's what happens with most people that inherit a lot of money, it's gone within six months. And I don't want that for you. So I would sit on the money as long as you can until you're out of the paycheck-to-paycheck cycle and you feel like you can actually carry the weight of this inheritance. Yeah.

And if there's anybody that you trust, that you're I'm like, This person has been a good person in my life. They're a good accountability partner, I'd let them in on what's going on because what my mind goes to, I think about athletes all the time. A lot of athletes come from an upbringing that was tough. Maybe there wasn't a lot of money or food in the house. Then they're making this amazing salary, and it's easy- A $10 million check. Yeah. I mean, they're going broke off of $10 million and $20 million. Here you are. You explained, Hey, my background, I'm not used to having money. I've been homeless. There is a part of this, to George's point, that this can feel like a million bucks, but it's not a million bucks. You'll be shocked how quickly this money can go. We want it to be spent on the right things. I personally don't want you to leave this call and go, I'm going to do this because Jade and George said to do it. I want you to understand the things that we talk about and the things that we teach so that when you do get ready to make a move, and I'm telling you, I think you're going to make the right move, that you'll know why you did it and it will make sense to you.

So financial peace is very important. We'll make sure to give you every dollar, which is foundational to everything we teach. A budget is part and partial to everything we teach. It is the foundational thing. You cannot manage your money successfully without a budget. The people that we talk to that are successful with money, they all have budgets. That is something that's so important, and every dollar is going to make it really easy for you, Seth, to be able to see what you're bringing in, figure out what you're going to spend that money on, and create a rhythm in your life that feels comfortable with how you're using your money. Once you've done that, then it's time to start factoring in, Okay, this $120,000, how can I apply it? What baby step am I on? I've proven consistency here, and I think that's what you really need.

Seth, let's talk about your own personal growth, because I'm more concerned about you going, What is the thing that Seth wants to do? You've overcome so much just getting out of homelessness and going, All right, I'm working now. I've got a roof over my head. I'm paying rent. I got my bills I got no debt. But what does 24-year-old Seth want to be doing?

I'm not entirely sure yet. I was maybe thinking, with this money, I know you all said this shit on it, but I don't know if I... Because I also don't have a vehicle. So I was maybe thinking, should I use this to buy a vehicle, a little cash car to get me from point A to point B? I like that.

The key is little cash car. We're talking used, probably $7,000. And here's what happens. You go in the car a lot, they go, Oh, man, you deserve this car over here. And it's brand new.

And you know you have the money sitting there, too? Yeah.

So don't tell them you got money. Just walk in there saying, Here's my budget, $7,000 out the door.

What do you got? Bring a check for the amount, the max that you're going to spend.

That's going to also change the types of jobs you can get because you're going to need transportation if you switch career paths here. Do you need to go back to school? Do you need to get further education to do the thing you want to do. You're going to get the Kit and caboodle today. I'm also going to send you Ken Coleman's new book, Find the Work You're Wired to Do. It includes an assessment called the Get Clear Career Assessment. I want you to take that, and that's going to let you start dreaming based on your skillset, what you're passionate about, what you're wired to do, the impact you want to have. I think that'll get your wheels spinning. But I wouldn't go sink this money into a business.

No, I would not either. Okay. Hey, keep in touch with us. Call us back. You can call us anytime, and we're here to help you. And engage with us on social media because you need this content in your life. Hearing it one time is not enough. You need this on repeat, over and over and over.

Absolutely. I'm thinking 15 to 20K is your emergency fund, and that next 100K, that might be a down payment one day as you grow in your career and you can take the weight of a home. That'd be cool. Man, going from homelessness to a homeowner, that's a cool story.

He's a winner. That guy's a winner.

I can tell. I'm rooting for you, Seth. Thanks for calling. This is The Ramsey Show. This show is sponsored by Better Help. This is the season for Halloween. It's October. We're wearing costumes, and we're wearing masks. If you haven't started planning your costume yet, get on it. While you're thinking about it, I want you to be honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work. We do this around our friends. We do this around our families. We even do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life, and it's the worst. If you feel like you're stuck hiding behind masks and costumes all the time, if you find yourself hiding from your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn, and you can accept all the parts of yourself over time and start living an authentic life. Masks and costumes should be for Halloween parties, not for our emotions and our true selves.

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All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're someone you can trust to have your back from the first call to closing day. Find a Ramsey Trusted Agent near you at ramseysolutions. Com/agent. Ramseysolutions. Com/agent.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. 888-825-5225 is the number to call if you want to join the show. Well, Jade, our team here at Ramsey, we've got a great blog article section on the site, and they put this one out there. Can young people buy a home in 2024? These five millennials proved it's possible. Wow. Very cool. So we all know the article goes on to say, Home ownership in America has gotten drastically pricier over the last four years. Median home sales jumped to $420,000. Typical interest rate in a 30-year was hovering around 7%. It's dipped down a little bit since then. It says, After all, millennials represented the largest group of home buyers in 2023. 26% of adult Gen Xers even own a home. That's cool news.

That is cool news.

Here's a story. In 2023, Lopez grew tired of renting, decided she wanted to buy a house near her apartment in the suburbs of Houston. She said, There wasn't any out that I could get the number I wanted. And once she set her savings goal 20% down, which is awesome on a traditional single family home, they got to work. She dialed in her budget, set up a separate savings account with an automatic transfer every month, and avoided unnecessary spending along the way. Quickly realized her initial goal of buying the single family home was out of reach because the monthly payments would be too big. A lot of people found this out the hard way. Yes, that's right. As home prices and interest rates jumped up, that same home they wanted was now way out of reach.

But the key is you can't give up. And she didn't. It didn't stop her. Says she shifted to looking at condos and townhomes, both newer builds and fixer uppers, which we say change her expectations. And after continuing to say for a little longer, she started working with a Ramsey-trusted real estate agent and bought her first house in March of 2024.

Just a few months ago. You know what's cool, Jade? We actually have Angela on the line because our team, the interviewer for the story, we said, Can we get her on the show? Angela, are you with us? Yes, I'm here. Love it. How's our favorite homeowner doing?

I'm doing great.

How are you all? Is it all cracked up to be? How has it been the last six months of being a homeowner?

It's been all right. We've had some challenges, but I'm in my home, and it'll eventually get to where I want it to be, but not today.

Well, tell me about that, because we've talked to a lot of people on the line who, again, it's this expectation shift that has to happen because the truth is the numbers aren't what they used to In this article, it says, your quote is, It's not pretty, but I have a home I can afford in a nice part of town. I'm not going to be renting anymore, and I'm actually building equity. I don't regret it. Tell us about that. Tell us about what your initial picture was, and then what you shifted it to, and why it's worth it.

Initially, I did want that traditional single-family home that was the dream. But once I started actually looking around online, I realized that I wasn't going to be able to afford that. I did start switching to looking at townhomes and condos, and then I still realized that I wasn't going to be able to have everything that I wanted. I had to decide, do I want something that's updated and smaller than I want? Do I want to live in the part of town that I want and maybe not get everything else that I wanted? I had to decide what was truly important to me, which was living in a decent community in a good part of town.

So location, location, location. You went, I'm willing to make other sacrifices and compromises, but location is the one thing I'm going to focus on.

Yes. You force-ranked your priorities there. Tell us, what was the full timeline of this from the moment that you were like, I want to dig into this to the fact to it actually happening?

I was probably saving for about three years. I got really serious about it in 2023. That's when I set my number goals. I I hit my goal at the end of December 2023, so I started looking online around then. I think I got my real estate agent in January, and we made the offer in February and closed in March.

Wow. That was using a Ramsey Trust agent.

Yes.

That's amazing.

For me, I think the glaring thing here is three years feels like a longer time. I don't think- Will the world exist in three years?

Depending on who's in the White House, Jade? We don't know.

Listen, George, you say it all the time. It's a microwave world, and a lot of things, it's more like a crockpot if you want it to actually happen for you. Talk to the person who is really afraid of a longer timeline and is wondering, Well, if I wait longer, the finish line, the goalpost is just going to keep moving. Talk to that person because you walked this out and you weren't afraid of a long journey.

Yeah. I mean, the time is going to pass anyway, right? Who knows, maybe at the end of that timeline, you're going to be in a better position than you were when you started. That's how I was. I'm making more money now. I could afford something better than I could have if I had brushed it and jumped the gun and tried to buy two years ago.

Yeah, very good. How did you get over the hub mentally? Because at some point, you're shaking your fist at the clouds. You're angry, you're frustrated, you're cynical. How did you get over that to just go, Fine, I'll eat my vegetables and I'll compromise, and get a townhome?

It wasn't a huge hump for me to get over personally. I just like to go ahead and do the thing and get over with. But it wasn't fun having to give up certain things that I had dreamed about. But I'm still fairly young. I'll get there eventually.

The article said you're 31. Is that still true?

I turned 32 over the summer.

Congratulations. And single? Yes. Nice. Wow. Just to show you, a 32-year-old single woman in America today- Houston, Texas. Can become a homeowner.

Yeah, and Houston is a big area. That's not the middle of nowhere by any means. You're in a Metropolitan area or a suburb of that. So really good.

Can you tell us what the house costs and what you put down to help people get an idea of what they would need to save?

It cost 170, and so I put down 34.

Wow. That's amazing. This is a great example, Jade, because people go, Well, the median house price is 420 grand. I go, Yeah, that's the middle, which means half of the homes in America are cheaper. Angela, you didn't go, Well, I need to get a $500,000 house for my first home as a single woman. You said, You know what? I can buy a more affordable townhome that's a little further out than I want. It's not as new as I want, but it got your foot in the door.

Yes, it did. Being single definitely was a challenge. There's only one income to try and make that My goal. Once I accepted that, then I was able to adjust my expectations and get it done.

It's really a great picture of, I was saying it a lot back when real estate was really getting crazy and it was really heating up, that property is a ladder, and it's real estate is a ladder. A lot of times we want to be at the top rung immediately, but it's like, no, you start at the bottom and you buy something, you get your foot in the door and you get on that top rung, and then you're like, okay, I can sell it, I make a profit, and now I can take the next step up the ladder. I think that you're a really good picture of that. This is just the first step on the ladder for you. I think that if you call back in 20 years from now, it's going to be amazing for you.

Absolutely. I got one more question, Angela. Just to get to reality, a lot of renters are going, Well, why wouldn't I just go buy a place? I'm paying two grand in rent. I'll just get a two grand mortgage and call it a day. What is the reality check of homeownership been like for you as far as expenses and maintenance and repairs?

Well, over the summer, I ended up having a leak in my AC condenser drain that cost me about a grand to get fixed, and I still haven't completely repaired the drywall. There's still a gating hole in my drywall. Things are going to pop up, things are going to happen, and it's already been, obviously, a little more expensive than I would have been if I had been renting. But I had money set aside for that. Good. I'm okay, but something's always going to come up, isn't it?

Yes, It is. Yes, it is. Just a good picture that it's not apples to apples. It's not necessarily cheaper. Rent is the most you'll pay, and that mortgage is just the beginning. But it is a huge blessing to be in a home that you can say, I work so hard, I earn this thing. It's going to be mine. I'm going to renovate it to my liking over time with cash. And then who knows? With millennials these days, Jay, we're moving every four years. So who knows, Angela, where you'll be four years from now. That's right. But you're on the path. Making money. And you just disproved this whole idea that it's impossible to buy a home in today's America. There's hope.

We see it. Angela showed us that it's actually not impossible. There's a way to do this. It might be a longer timeline, but it's happening.

Thank you so much for joining us, Angela. And if you want to check out that article, Can Young People Buy a Home in 2024? These Five Millenials Proved It's Possible. We will link it in the show notes and description of today's episode. I highly recommend you check it out and share it with a friend to give them some hope. That's really what I feel like this year, we all just need a little hope, a little good news.

I know that's right. If you're not talking about hope, I ain't listening.

We're done. This is The Ramsey Show. I know you work hard for your money, and the key to keeping more of it in your pocket is by making a plan for your spending with a budget. Every dollar is the budgeting app that I use personally because it's perfect for looking every dollar you make in its little President face and telling it exactly where you want it to go. Just like you told that guy in traffic exactly where you wanted him to go. And even better, every dollar walks you through the entire budgeting journey so you always know your next right step. Download every dollar for free in the App Store or Google Play today. This is the Ramsey Show. I'm George Campbell, joined by Jade Warshaw. 888-825-5225 is the number to call. Josh is up next in Chicago. How can we help you today, Josh?

Hey, how's it going, guys?

Doing well. How are you?

Good. A retirement question for you guys. My wife and I are on step four, five, and six, and she As a teacher, investing, or I guess contributing, if you will, a mandatory 9% to the pension program that they have. Now, I guess initially my thought is, Okay, we'll just invest another 6% to get her to 15. But with the variables that go along with that pension, I'm curious if we might need to be investing actually a little bit more than that.

What are the variables?

Well, the variable, the first one is I believe the first tier is 25 years in order to get the full pension, but you have to be 67. And every year earlier than that, it actually reduces 6 %. Until 62.

So you're saying she has to work for... Let me make sure I understand that. You were saying to get the full amount, she's got to work for 25 years, and you would get it at a minimum age of 67. Is that Correct.

Then if you wanted to take a partial pension, you can at 62, but it's going to be at a 6% per year decrease from the age of 67. So if you're 63, 6% for what? Three years, four years?

Is there ever an option for a lump sum? Just curious.

I'll be honest, I don't know.

Okay. Back to your first question about the percentages. So generally, we think about a percentage you could maybe Maybe count it as partial. If you're doing 9%, maybe cut it in half as you're trying to get to your 15%, because you don't have as much- Yeah, they perform poorly, and she has no control over it, unlike a 401k, where you can control the investments.

So we would just count that at half. So if mandatory is nine, we're going to say that's four and a half %. So she should contribute another eleven and a half % to get to her 15.

Got it. Okay. That's what I was thinking not necessarily directly exactly the percentage you guys were thinking, but more into an IRA, more into additional investing.

Does she have any other retirement options?

Within her school system, No, but she does have a Roth IRA that she's been contributing to regularly, and that we plan to keep going with that.

Yeah, that might get you there, depending on what her income is and what 15% looks like of your household income. But yeah, the problem with the pensions are there's really no control. What you see over time is if you can make 10, 12% in the market, you'd be lucky to get 6% in that pension when you actually look at the rate of return. The upside is, Hey, we get money for a long time. When we retire. It sounds like you guys are younger, though. How old are you two?

Thirty-one.

Oh, my goodness. You're going to be unbelievably wealthy if you're already on this track.

Hey, I have a question, and this is just for my own knowledge. So teacher's pension, if, God forbid, When something happened to your wife, do you still get the full... What happens?

Everything has to be in place. I have to be a beneficiary, and everything has to be filed. But, yeah, to my knowledge, I do get the full- Are there survivor benefits?

Yeah. Maybe at a lower rate?

Yeah. I'll be honest, I don't know the exact rate, but I do know that there are survivor benefits. Yeah.

Okay.

I've always been interested in that, especially when you framed it up as the 25 years, age 67, goes down to Partial. That's very interesting. My thing is like, if I'm investing the money, give me all my money. You know what I'm saying?

That's common sense. It's not how the world works. And you've got some retirement options, Josh, through your employer?

I do, yeah. I have a traditional and Roth 401k, and then I have a Roth IRA outside of that.

Awesome. And what's your household income?

It varies, but I guess if you base it off of our base salaries, it's about 110. I think we're on track with my commission about 150 this year.

Amazing.

I mean, if I'm in your shoes, I don't know if we said this, knowing what you have at your disposal, I would not go beyond the 9% in that pension. I'd be looking at all of those other areas to max out your 15% as a collective.

Yeah, it doesn't have to be she does 15 and I do 15. If you have better options, it's okay to say, Hey, we're going to shovel more into my Roth 401k, for example, and we'll get to that 15.

Yeah. If you can max out your Roth 401k, then She does a Roth IRA, you do Roth IRA. Anything to avoid putting more than 9% into this pension is what I would be doing.

Awesome. Thanks, guys. I appreciate it. Thank you.

Great question. I'd rather do a Bridge account. I'd rather do- I know.

I just don't like someone forcing If you're going to force me to do something that sucks.

Exactly. If you're going to force me to do something, it better be all good.

Make it amazing. All right. Amanda's up next in Milwaukee. How can we help Amanda?

Hi. Just want to say, first of all, the But listening to you guys has changed my life. I'm on Baby Step 2 and killing it, doing that. I'm excited to be debt-free. But my parents don't really have any financial skills. They're 63 and 65, both still working and no plan in sight for retirement. I don't know that they really have much saved. Still, when I go to visit them, there's always an It's an opportunity to spend money. So, Oh, let's go grab coffee or let's go grab dinner. And I've been really, well, I've tried to been really clear with them, setting boundaries, saying that's not in the budget. They know that I'm doing the baby steps in You're saying for you, it's not in the budget? Sorry?

You're saying for you, it's not in the budget, not for them? Yeah. Okay.

Correct. And I'm saying that's not in my budget. I am not looking to spend money this trip. I just want to spend time with you guys. In my opinion, they don't really have the money to be spending on these frivolous things either. I'm a pretty direct person, and I've tried to voice my opinion, but it's not getting through. I'm just curious your guys' thoughts on how to navigate these boundaries.

What's actually happening here is your parents aren't respecting the boundary line, and they keep going over it, which is going to continually hurt the relationship. Have you been clear that, Hey, listen, You guys are overstepping here. I've told you I'm not going to go do this thing when I come over. Ahead of time, before you ever get to your parents house, do you say, What are the expectations for the evening? Or do you show up and then it's this weird conflict?

But usually before I go, if we're going to the Tony Fair or something, I'm saying I'm happy to go, but I'm not going to be buying things or grabbing food at the vendor or whatever. I can still go and stay within my budget I have for myself, but I'm not going to go to Starbucks with you. That's not in my budget, and that's set ahead of time. Then there's still usually a, Oh, do we want to go to dinner? Then when I say, That's not in my budget, they offer to treat, which I don't want.

Because you feel bad because you know they're not in a great financial position, and you're like, I don't want them putting this on the credit card. Now, I'm a part of their misbehavior.

Interesting. Exactly. Listen, the hardest part in the world is when you want somebody to change because you can't make them to change. All you can do is control yourself. And then the next frustrating part is, I'm trying to control myself, and you're trying to push me in another direction. It's difficult. Yeah, you're going to have to... It's one of those things where you can only say it so many times, and then you're just going to have to accept a part of this of they might continue to just do the same thing over and over again. And then in those moments, you can... I'm going to tell a funny story here. There was an election cycle year where my mom couldn't stand one of the candidates. And every time she'd call me, she'd be talking about this candidate. I was like, Mom, I don't want to talk politics. I don't want to do this. I finally told her, I said, If you call me and you mention this candidate, just know I'm going to then in the conversation in the next minute. I just let her know, if you violate this boundary, I love talking to you on the phone.

You're my bud. Great. But if you do this, I'm going to terminate the conversation and don't get mad. So it's almost like you have to set the next thing in motion of Mom, dad, I've asked you to do this. I get it. You're going to be you. You're going to invite. But just know, if you invite me, here's what I'm going to do next. And I'm just letting you know ahead of time. So you're just communicating whatever that, I don't want to say, consequence, but whatever that effect is when they violate that boundary. And then you go about your business. You're like, I already told you, I don't have to feel bad about it. I don't have to feel guilty about it. And I would also encourage you to try not to focus on their financial situation because, again, you can't change it. Just focus on your own, focus on doing right, and let the chips fall where they may.

And hang on, we're going to send you an article from Dr. John Deloney on how to set boundaries, seven simple steps. And we're also going to link it in the show notes and description for you guys. I found it very helpful for my own life. This is The Ramsey Show.

Listen, tickets for the Live Like No One Else Cruise are selling fast. This is the ultimate debt-free vacation, and I can't wait to celebrate with all the folks who've worked their butts off and changed their family finally, trees. We will be sailing through the blue waters of the Caribbean with the Ramsey personalities and other special guests. A bunch of cabin options are already sold out, so hurry and reserve yours with a $600 deposit today at ramsey solutions. Com/events.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. 888-825-5225 is the number to call if you want to join. Today's Question of the Day is brought to you by YreFi. 93% of undergraduate private student loans are cosigned. So when you're delinquent, Nana and Uncle Joe, they're drowning with you. But there is a way out, and it is YreFi. They refinance defaulted private student loans that other places won't, and they give you a low fixed rate loan that is built for you. Go to yrefi. Com/ramsey today. That's the letter Y, R-E-F-Y. Com/ramsey. Might not be available in all states.

Okay. Today's question comes from Kayla in North Dakota. She says, I have $36,000 in debt between credit cards and a car loan. I earn $55,000 a year, and I was wondering if you could help me out with this situation. I'm aggressively attacking my credit cards to the point of paying them something on them every single week. The problem is I get anxious to get them paid off and send more than I have in my budget. I've been there, Kayla. Then I don't have any money, so I have to use the cards to get through the rest of the week. It's draining me mentally. How do I stop this habit? I have been there, Kayla. I have been in your shoes. It is the most frustrating thing. You're so excited to work the baby steps, George. You get that paycheck. You're like, I'm putting all of it on debt, doubling down.

And then like, Wait, I have to eat, too?

Yes. It happens. And I think what happens here is you're gung-ho, you're ready to go, but you've got to make sure that it's in the budget. So here's the thing. Every dollar premium has an amazing feature. It's called Paycheck Planning. You need it. And the reason you need it is because it stops this right here from happening. Because you're able to go through and go, Okay, with this check that I get on the first, I know I don't get it paid again until the 15th. So with this check, here's what I can do. I can do this, this, this, this, and that. You can go in and write, put in those line items and say, This is the date that I'm going to pay it. You can include things like extra payments. If you're thinking, Man, I'd really love to make an extra payment here. Then you can plan your next check. Okay, I get the next check on the 15th or 16th. Here's what's left in my budget. It will tell you, Hey, if you do it that way, you're going to go over budget.

High risk of overspending.

That's what it'll say, high risk of overspending. It's almost like a puzzle, George It's that you scramble and say, Okay, let me put it in another order. Then if you put it in another order, it says, Hey, if you make that extra credit card payment with that first check, unless you move groceries or unless you move your cell phone payment, you're going to go over budget. It's going to allow you to see Where do I put these puzzle pieces in in order to make this work? Now, for me, in general, I'm the person like, I make the budget, I'm tracking my transactions as the month goes so that I know that I'm staying on par with what I said I was going to plan. And then at the end of the month, once I've satisfied all the minimum payments and I see this cushy, nice amount of money of margin, then I'm like, Yes, I'm about to destroy this debt because I know I've satisfied everything that needed to be paid that's mandatory and that is important for the household for that month. So that's what I do. You've just got to just sit on your hands a little bit until you know.

Pump the brakes.

Yeah, pump the brakes. And two more helpful tips that are really practical. Number one is have a buffer in your checking account. So don't run it down right to the edge to zero dollars.

I used to do that, too, George.

Have 200 or 300 bucks in there where you go, This is my line. I do not go below $300. That is the new zero. That's where she's running into here.

You're dropping real facts. Let me tell you, I guarantee there's a lot of people out here who don't have a cushion. I'm embarrassed Just to admit how long it took me to realize that zero-based budgeting does not mean zero dollars in the account. No wonder Sam Warshaw would be just sweating all the time.

You'll be paying 350 bucks in overdraft fees every year by doing that. Yes, we were.

We were those people. We were the people who said, I'm going to work the baby steps. I'm going to put every dime towards debt and still paying overdraft fees and not understanding what's happening here. Where are we missing the boat? And it is. It's the cushion. It's planning individual paychecks, and it's just having a little bit of patience to go, When it's time to make this payment, the money will be there, and it is going to happen. It just may not be on this particular day.

Yeah. And the other piece here, she said, is, I have to use the cards to get through the rest of the week. No, you don't. Cut the cards up. Shopping. It's hard to use the drug when you don't have access to the drug. And so I think that happens with credit cards. It's still in the back of our mind that it's a safety net. And when you cut that safety net, you go, I'm going to make different decisions I'm actually sticking to this budget because I don't have another option. Burn the boats. Burn the boats. That's what you're doing. So cut up the cards. You can close the account. You still got to pay the debt, but you can tell them, Hey, I want to close this account down. I'm working on paying it off. So I hope that helps you, Kayla. Great question. Good stuff. And if you guys want to check out that Every Dollar Budget Jade mentioned, you can download Every Dollar for free in the App Store or Google Play, or click the link in the description if you're listening on YouTube or podcast. All right, Jordan is up next in St.

What's happening, Jordan?

Hi. How are you guys?

Doing well. What's going on?

Good. So my question is this. My wife and I, in the height of all the real estate craziness, purchased a house. And so we're at a seven and a half % interest rate right now. Obviously, they've come down, and people keep saying they're going to continue to come down. So my question is, is it worth refinancing now to drop it and paying all the closing costs? And then if it just continues to go down, just repay the closing costs again, or is it smarter to just hold off and see if this continues to drop rates, or what would you guys recommend on that?

I wouldn't be in a crazy rush. I wouldn't be like, Hey, you got to go out today and do it, because here's what's going to happen. The rate by the end of the year, probably going to go down again. And the next year could go down by another point by the end of next year. And I get that you're paying all this interest on seven and a half %. And so what I would do, though, is you can call our friends at Churchill Mortgage, and they'll crunch the numbers right there for and go, No, it doesn't make sense. It's going to take three years to break even. Or you might realize, hey, going from seven and a half to a five and a half on a 15, now that's serious savings. Two % my monthly payment. I'm going to save this much in interest. Based on closing costs, we'll break even on this thing a year from now. And so we don't know all the numbers to crunch, but I would at least get some info on that to give you some peace. What are your thoughts, Jade?

Listen, I agree 100 % with George. If I were in your situation, I think For me, I'd want to see... Obviously, the Fed doesn't directly affect mortgage rates, but there's some correlation there. I think that that's in our favor right now. We saw mortgage prices drop, I think, but they went up again slightly again.

The day the Fed cut the rate, the mortgage rates actually ticked up.

Yeah, they ticked up a little bit.

It's not a direct connection. There's a lagging indicator there. They tend to move in the same direction. That's right. It likely will continue to go down. I don't crystal ball, Jordan, so we can look back at this clip and laugh at how stupid I am. True.

I'd wait for after the election, though. I want to know what's going to happen. I feel like there's a lot of uncertainty in the air. And for me, this is just Jay talking. I would want to just let things settle a little bit so I can go, Okay, I'm not acting out of in any way. I'm acting out of, Yeah, it's cool, man. Let's go. So that's how I am.

Okay. Yeah, perfect. I really appreciate it. Thank you.

Absolutely. We've We've got a whole hub, Jordan, at ramseysolutions. Com/realestate, including resources about refinancing. We've got a whole blog articles that will help you crunch the numbers, do the math, all the things to think through, links to all the resources and tools and services and people that can help with this, whether you're looking to buy, sell, refinance, invest, whatever it is. Our team built a really great free hub with tools and resources. Just go to ramsey solutions. Com/realestate, and we'll put a link in the description as well.

George, tell us right now. Let's pretend. Okay. You're My mortgage rate is 7.6%. What are you doing? What are you doing? In my life? Yeah. Tell me your course of action.

I'm a nerd. So I'm always crunching the numbers. I'd be on the phone with my friends at Churchill going, Hey, can you actually show me how long it's going to take? Because I know we're going to be in the house this long. Okay, it's going to take me a year to recoup based on closing costs, but I can save this much my monthly payment.

Because you don't want to do it again. You don't want to turn around and be like, Oh, yes, they're down. I'm refinancing. And then February comes and you're like, Oh, another-Yes.

What does the future look like? What does the future look like? Do we plan on moving in the next two years? Because you got to pay fees for that, new closing costs for the new home. And so you have to make sure that you're going to be in. This is a long-term decision. So it's not a flippin, Hey, let's go ahead and refi.

Yeah, because every time you refinance, you're paying those closing costs unless you have a stack of cash laying around, which would be pretty cool if you could not roll that into the mortgage, by the way.

It might be a good move in Jordan's case, but we just don't know until we crunch those numbers. All right, for all of you listening to the show on YouTube or podcast, it's about to end, but more calls are coming up in the Ramsey Network app. You can go download it in the App Store or Google Play. We'll also put a link in the show notes so you can keep the fun going. If you're listening on radio, you're safe. Stay right where you are. More calls are coming up. So don't miss what's coming up next. Go watch the full show in the Ramsey Network app. It's totally free. Jump on to the App Store, and we'll see you over there. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show.

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