Live from the headquarters of Ramsey Solutions, this is The Ramsey Show where we help people win in their life, specifically their money, in their work, and in their relationships. The phone number to jump in is triple-88825-5225, triple-88825-5255, 225. I'm Ken Coleman, Ramsey Personality, and I'm joined by Ramsey Personality and my good friend, Jade Warshaw. She's our money guru on today's show. I'll help you out in areas of work and income, getting that income up. We team up together to take your questions. 888-825-525, you ready.

To go? I'm ready to do.

It, Ken, come on. Ready to go. Columbus, Ohio is where we start. Nick is there. Nick, how can we help?

Hey, Ken. Hey, Jade. How are you guys.

Doing today? We're having a blast. What's up?

So my wife and I are in a bit of a pickle. Some background real quick is we just got married a few months ago. We had a really expensive last year with weddings and our wedding and all that. We got through it all. We combined our finances and we started tackling a big mountain of student loans and various smaller loans together here the last few months. So we're in the middle of Baby Step Two, and we recently got invited, and actually, my wife was asked to be in the wedding. We got invited to a wedding out of the country.

Where?

It's in Italy.

I love that.

Always. Oh, my goodness. And she's supposed to be part of the bridal party, too, which is even more expensive because you got the dresses and the activities and the Latida. How much debt do you guys have?

We have about 97,000 left.

Okay, 97,000 left. Who is this person to you? Whose wedding is this?

It's one of her best friends, not family or anything.

Like, recent best friends or best friends from high school or from college? Is this person in her daily life day to day?

Yeah, I would say they've been best friends for the last four or five years. I wouldn't say they grew up together, but they didn't grow up together.

Is she the maid of honor?

No.

Okay, so she's not the maid of Honor, which means she ain't the best friend unless the girl has.

A sister. Right. It does.

Matter in this. It does matter. Okay.

Right.

I'm going to shoot you straight here because I don't think that you guys can afford a trip to Italy, and I don't think that you can afford all of the things that goes along with being a bridesmaid, because in 2023, these bridesmaid prices have gone through the roof. Yeah, what.

Are we talking about? Do we have a price tag?

I'm curious. It's the parties, it's everything. What do you think it's going to cost?

The whole thing is about four days, I believe. That's just the minimum stay, and that's not including travel. I priced out to about 6,000. That's if we just did the four days.

And that's for the two of you?

I mean, yeah, flights, I can't find anything under four grand for two flights.

Right. And then there's tuxedo, dresses. Is that everything included?

Yeah.

The next question I have is, do you have $6,000?

We don't. We did save a little bit of our... We got some money from the wedding and we put most of it toward their debt. We did save about 3,000 of it in case we decided to go to Italy.

What's the pickle? Because that implies to me that maybe you guys aren't on the same page. Is that true?

Yeah. I mean, she's all in on going.

Yeah.

Because it's her friend. I'm not me. We can't afford it side, but I don't want to come between- Let.

Me ask you this, because if it were me, if I were you, and the script was flipped and it was my husband who wanted to go for his friends, I would say, What would you think about us throwing a really nice bridal shower, or in this case, grooms party, for your friend here, Stateside? We can do that. That way we're finding a way to participate, doing something nice, but we can also keep it within a much smaller scope.

All right, come on, pal. That's Jade, the financial expert and the very disciplined person who changed her life. You're legit, but come on. I want Jade, the woman on this. Okay. If he says that to his wife, I think she goes, Sorry, pal, that's not a viable option. They've got to find a way to meet in the middle. I have a.

Different one. They've got to find a way to meet.

In the middle.

I got one. Okay, hit.

Them, Kim. He doesn't go. He says, Babe, this is your dear friend. I know that we're paying you not to go. It's a big deal, but, babe, we are in financial.

It's still $3,000.

He can go make $3,000? When is the trip?

In June.

Okay, between now... No, I'm okay if you.

Don't like this. I don't know how I feel. I'm still marinating.

Good, because I am trying to help this man in his marriage. I am asking you as a woman to get real. If this were you and Sam, and this was your really good friend and you were in, come on now. All right, Ken. He has no option but to work his butt off. He can sell stuff, make some money, come up with, and I don't think it's three grand if she goes.

He can. Nick, we're arguing this for you.

He's got to say something. Hold on. Go ahead.

If it's any consolation, we're putting about a thousand a month towards our debt.

Exactly. This is a cash flow situation. Exactly. For me, I'm like, If you can just go out and earn $3,000 for a wedding, I'm like, All I see is your debt going from '97 down to '94. That's what I see. I'm like, Look, with almost $100,000 of debt, how long have you guys been working the baby step two? How long have you been in it?

It's been two and a half months.

You're just getting started.

All I see is his wife presenting him for years to come when she's looking at Instagram and seeing the.

Wedding pictures. No, she's not. She's not because what.

I- I get her on the phone. I'm telling you, I'm.

Writing on this one. She's going to be mad for a minute. But here's the thing, Ken, I don't even talk about my wedding on a weekly basis, a monthly basis, or a yearly basis. It's not even her day. -then you're the exception.

-she's going to get over it. You're the exception? She's going to get over it already.

Ken, Coleman, you looked at your.

Wedding album. Man, I'm a dude. But this is a woman. Weddings to women is a whole different ball game.

I'm a woman, too. I just gave you the perspective.

I just don't think you're keeping it real. Do you think I'm not that... Well, okay. The man is calling us with a money and relationship question, and I am trying to help him with both.

Look, nick, what are you leaning towards? After you heard Ken and I chop it up, what do you think?

I'm between pausing the debt and saving up some money and just going the minimum that we need to be there. We also postponed our honeymoon. We didn't do a honeymoon because we honestly we underestimated how expensive Italy was going to be that was supposed.

To be. That's the thing. You didn't do your own honeymoon to do this.

Okay, do it.

He's on the phone talking to us. I want you to understand you're grown, so you're going to walk away and do what you want and whatever makes you sleep at night. However, what I do want to tell you is you're just getting started and the choices that you make now are setting the tone for your whole baby step two journey. The moment that you start saying this is the exception or that's the exception, you're creating a rule. I agree with that. You're creating a rule with this decision.

I agree with you. I'm trying to help him out. I know you are, Ken. Because I got the feeling we're running out of time with him, but I have the feeling his wife is really like, I'm going.

She wants to go to... Everybody wants to go to Italy and everybody wants to be in their friends' wedding. I'm not saying that that's not.

The case. No dude in the world. Any dude's like, Sorry, pal, I can't afford this, but women is a different deal. I want to see you sit down and have a candlelight dinner conversation with Mama and see where she's really at. Then if you really have to split the difference, my option is a viable option. Not stop paying the debt. I don't want him to slow down. I don't know, Kim Colman. He's going to cashflow it on top of paying the debt off. I know. I wish I was as hardcore as you. I'm not. This is The Ramsey Show. Fake it till you make it. It's popular career advice, but it doesn't work for very long. If you don't love what you do, you can't fake the enthusiasm and energy you need to win at work. You also can't fake your physical health and energy. Everybody knows we should eat more fruits and veggies, but fruit chews and vegetable chips don't count. If you aren't winning physically, I promise you're limiting your opportunities to win professionally. Folks, I know you're going hard right now to pay off debt and get ahead professionally. You need another gear, and that's why Balance of Nature will help you.

They help me. They give me the benefits of fresh, whole fruits and veggies in just seconds. The blend of 31 different fruits and veggies is in an advanced process that locks in the nutrients. So go to balanceofnature. Com and enter the promo code, Ramsey, to get 35% off your first order and lock in a lifetime price as a preferred customer. That's balanceofnature. Com with the promo code, Ramsey, for 35% off your first order. Welcome back to The Ramsey Show America. We're thrilled you're with us. We're here to help you with your money and your work questions today. I'm Ken Coleman, and Warsaw joins me. Our question of the day is brought to you by Neighborly, your hub for home services. When you need to make repairs, schedule routine maintenance, or get local help for home improvement projects, go to neighborly. Com/ramsey, your source to find and schedule reliable home service providers in your area.

All right, today's question comes from Dalton in Kentucky. My wife and I have been stupid over the last year. We moved across the country for a job and immediately purchased a home while still having student loans. After finding the reality of our new job was not accurately displayed in the interview process, my wife and I made the move back to our home state, both of us having higher paying jobs than before. However, we were financially wrecked from letting the dream become a nightmare and have to receive financial help from my parents. We have just said no to a car loan for four... Let's see. We have just said no to a car loan for $45,000, for a $45,000 our vehicle and feel empowered again to start the baby steps. That's good. My question is, how do we start and find the motivation after backsliding for the last year? Now, this is an interesting question because he says they backslid, but he doesn't really explain exactly what all they did because it sounds like you turned down the car loan, which was great. It sounds like the big mistake here was you moved for a job, you bought a home, and then you had to come back, I don't know what, tail between your legs and go back to your home state.

Now, unless you took a major hit when you moved from the home, I'm not seeing where you made a bunch of mistakes because it says, Look, we both went back to our home state and we have higher paying jobs than before. I'm struggling to see, Ken, what they... Look, if you say you backslid for a year, then I believe you that you backslid for a year. I don't know exactly what that looks like, but what it sounds like is you understand the baby steps and you understand the Ramsey principles, and you know what you've done. This is really just your wake-up call to go, Okay, we made a mistake. It's not about what I did, it's about what I did next, and now you're back in Kentucky. Now it's time to get after it again.

Yeah. It's funny when somebody asks, How can you find the motivation? We get those questions a lot in different aspects of the work we do here at Ramsey. The root word of motivation is motive. Most of the time we use the word motive, it's in a legal context. Most of us, we hear the word motive in some type of a legal drama, whether it's a television show or a movie. What are they trying to do? The prosecutor is trying to prove to the jury that the defendant had a motive to do whatever it is they've been charged with. They're going, What's the motive? They had motive to act this way. When we look at it that way, I'm breaking it down a little nerdy word exercise to then say, Well, motivation is just the act of moving forward on something that you want to happen. That's right. So motive is about emotion. If I want to be free of debt, free of these mistakes, free of whatever he's talking about, free of shackled to a credit card or a carpet, whatever it is, I can't live the life I want, meaning I'm too stressed out because of debt, or I can't do some of the things I want to do because I don't have any money.

So focus on that feeling. That's very good. That emotion, and I'm really nerd.

Now right now. Come on, you're a thespian, Ken.

But emotion, again, we've got the wordemote, motive, emote. I'm just saying you want to get motivated, focus on that emotion that is nagging at you, driving you crazy that is not allowing you. The emotion is a result of, I'm not where I want to be in my life. So whether it's losing weight, getting a better gig, a job, getting out of debt, getting out of a bad abusive relationship, what motivates someone to act is the feeling. You change the way you feel, you'll change the way you act. I've got to get into that negative feeling to then pursue what I need to do to get the positive feeling. I'm not trying to get all psychology on it.

But that's.

How we get motivated.

What's your motive? I like that, Ken. You do have to think about your motive. My two cents to add to that is I think that people look at motivation often as a... They need that in order to start. Right. I'm like, Listen, motivation is really a byproduct of having started. You get that reward of, Oh, I did it. You get that hit of what, dopamine or whatever, and you're feeling good about yourself. Then you go, Hey, this really works. Then you have motivation and action, which is like, Okay, I want to keep going with this. If you're sitting around, you can go Kins route, which some people are able to just up and motivate themselves and get going. They feel that emotion. It's enough to drive them. Then there's other people who is like, Listen, you need to start regardless of how you feel. You just need to up and start and take it one day at a time. Don't look at the whole dotgum journey. Look at one foot in front of the other, and then tomorrow is a new set of choices that you get to make. But if you're sitting around waiting for lightning to strike you and for the current to go through your body, and then you got the spirit and you move, that may not happen for you.

Motivation is a product of after you start, you feel it and you want to keep going. All right.

Good question, though. Thank you for the question. All right, let's get to the phones. We go to the Big Apple. Jason is on the line there. Jason, how can we help?

Hey, guys, thanks for taking my call. Quick question. I live in New York City with my wife. I'm 37 years old. We have a kid. We've got one more on the way within the next couple of weeks. Wow. We're thinking about moving to the suburbs. We have no debt. We're in a pretty good financial situation. I'm thinking about taking out a small mortgage, which goes against everything I have ever learned in life in terms of getting into debt, and it scares me to death. We have our budget, we can afford it. But again, it's money that I'm going to be paying to a mortgage that I can be saving and use in the future. So my question is, if I can.

Afford.

Something, how do I know if it's a decision? And am I making a mistake by taking out a mortgage right now?

Well, listen, let me be the first to say we are a no-debt. That's our philosophy, no debt. But the only debt that we're never going to get mad at you for taking out is a home mortgage when you do it the right way and within reason. If it's your principle in life that you just... Dave Ramsey does not borrow money, not even for a home purchase. If you want to go to that level and if you've decided, Hey, I'm Jason, and that's my standard, I'm not going to take that away from you in this moment. But I would like to introduce you to the idea, if you're open to it, that look, taking out a small amount for a mortgage is not a bad thing. If you would like to be open to that, how much are you talking about taking out?

It would be a pretty small mortgage, probably between $400,000 and $500,000.

Okay, and what would be the cost? Are you putting anything with that money?

We'd be putting a significant amount of money down. I guess I forgot to say we are an apartment in the city. We've been saving up for a very long time. We bought our apartment all cash. Wow. I'd be using all that equity to buy a house with a mortgage on top.

So what's the- I buy a.

Beautiful house with the equity.

That we have.

Absolutely. We don't need it. Again, I would just be mad at myself 20 years down the line if I said, Why did I.

Take the.

Mortgage when I couldn't.

Afford it? Okay, Jason, give me two numbers. What's the purchase price of the house you're talking about and what's your combined income?

Yeah, so our purchase price is two million, and our combined income is about $550,000.

All right, that's what.

Jade needed on there. Okay, yeah. You're paying 1.5 million in cash, which is amazing, incredible. Then you've got a really strong income to where, look, chopping down a mortgage of $400,000 to $500,000 when you've got a $550,000 mortgage, especially since you are now moving out of the city, so your cost of living is going down. I, Jade Warshaw, would 100% do that, and I would sleep like a baby.

Yeah, because of your income and the size of the down payment. That's right. Do you understand what we're saying, Jason? This is not a crazy move.

Okay. It scares me. I've never been in debt my entire life, so it scares me to death.

Then don't do it. Most people don't put down three-quarters of the amount of the loan.

In cash. Yeah, you're a unicorn just by those numbers alone with your income and the amount you put down. But listen, if you don't feel.

Right about it- Don't do it. I mean, if you don't feel good about it, a $1.5 million house is amazing.

Why? Ask Kim, how much longer would it take to save up to pay cash for something like that? Those houses are still.

Going to be there. That's right. That's good, Ken.

You've got options. You've got options, Jason. I think you got to trust your feelings. Talk it out with the wife, make sure we're on the same page on all that. But you financially for taking out a mortgage, you guys, you easily meet our criteria is what we're telling you. Thanks for the call, Jason. All right, don't move. She's Jade Warslaw. I'm Ken Coleman. You're listening to The Ramsey Show. What we teach at Ramsey boils down to taking control of your life. It's all about.

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Welcome back to The Ramsey show where we help you win with your money, in your work, and in your relationships. I'm Ken Coleman-Jade, Warsaw joins me. We are here for you this hour. The phone number to jump in is 888-825-5225. That's triple 828-5225. Let's go to Tampa, Florida. Connor joins us. Connor, how can we help?

Hey, guys, how are you doing?

Great. What's going on?

I'm interested in pursuing a graduate degree. I am 24, single, no dependents. I've completed baby steps three, and my question is paying for that graduate degree without going to student loans. So getting some guidance.

On doing that. How much is it going to cost?

A master's program is looking at about $45,000, and a PhD is looking at double that.

Are you planning to pursue both or just considering both?

I'm going through the process of figuring out what program is best for me because I really want to be able to work.

What do you want to do?

I want to be a professor in international relations.

All right. Does that require a PhD?

To become a professor? Yes.

This is the only way for you to teach at the level you want to teach, you have to have a PhD.

I would start off with getting a master's or going full into a four-year PhD program.

So yes, that is the route. Which is most efficient? Could you jump straight to the PhD? In other words, I don't know this world, the higher ed world like you do. Do I need the masters if I can go straight to a PhD?

It wouldn't necessarily you would need the masters, but I'm trying to work full-time while also paying for this program part-time. So the programs I've been finding out there is it looks like it'd be easier to get the masters program first and then jump to a PhD program full-time.

I get that. But my point is, does the masters help you make more money in the meantime? Is that why you think you need the masters?

I'm a teacher, so it would give me a little bit of a bump, but it would not give me a big bump for finishing that PhD.

Then I wouldn't do it. You're asking, I wouldn't do it. It's not giving me enough bump. You know what it's doing? It's delaying the action needed to get into the PhD program. If I'm going to cash flow it, meaning can I do it as I go or do I need to press pause and just save up the money for the PhD program, which you said is how much again?

It's be looking anywhere from like 90-120, depending on which school you.

Go to. I mean, if it were me, I would skip the masters. I'd start busting at work in as much as I could. This is a long-term play, and I'd save up the money. To me, the masters is effort that doesn't ROI. I could be using that time to work extra, to tutor, to take a different job, get out of the education space and get a higher paying job. I've got to come up with a way to cashflow this PhD because the PhD in this case is the only way in the arena. Why spend the time, effort, and money on something that isn't necessary.

Understood.

Unless I'm missing something. I'm not trying to put you in a corner. I'm just going to walk through this logically so that I'm putting all my effort into getting that PhD. That's the ticket.

No, I understand where you're coming from.

Jade, any thoughts on that?

I have two thoughts. A, how long does it take to get the PhD? Full time.

You're looking at four to five years.

But did you say you're doing part time?

My idea was to keep working my current job and to pursue a master's program, then jump into the PhD program because the master's program, I can work and pay off as I go with the amount of current cash I have.

Right. But if you take Kins route and you go straight to the PhD, are you doing that full-time? Or are you having to do like that? Yes. Okay.

Yeah, that would be full-time.

And the question is, can you afford, what is it, $22,000 a year for the next four years? Can you afford that?

Currently, no.

So then my question for you is, what's the plan? Because we can't enter into this without a plan to being able to pay for it, or else you will do what so many other people do and default to student loans thinking that's your only option.

The plan is patience. You've got to wait a little bit. You've got to wait. Yeah, we're spreading out. You've got to work. You got to work and that means you got to wait. If you wait, it's worth the wait, I can tell you, because you're going to come out of this. See, here's the deal. Can I play another little numbers game with you, Connor? Are you willing to do this? Sure. Let's say you do what most people do and you take out a loan for this. You're going to be how much in debt?

90 to 120.

He's going to cash flow.

I said about 40 to 50 grand in student loans are probably taken out.

Right, okay, so 40 to 50. How much are you going to make? What's a reasonable salary you're going to make if you get this professor job right out of being a PhD? What's the salary going to be?

80 grand. So 80 grand starting out.

Now I want you to fast forward. I want you to fast forward to this reality, because I believe you'll get there, and I know you can get the loan. Now you're going to be making 80? This thing you've been working for years for, going full-time all the time to put in there, and then you're making 80 and you owe half of your gross pay?

More.

You see what I'm saying? I do. You got to fast forward. Nobody ever fast forward into this discussion because everybody goes, You're going to get a PhD and you're going to be Dr. Connor, so and so, and you're going to have this awesome international relations job at this great campus, but you're going to be broke and you're going to be miserable. I'm asking you to wait. I'd rather deal with the emotion of patience than the emotion of misery. They're very different emotions.

Let me add one to that, Ken. You're working hard right now, and you're going to be working very hard to get this PhD. Let's pretend that you go through with your way where you take out the 40,000-50,000 in student loan debt. You work your way through this program. We're fast forwarding, like Ken said. Here's the way you're going to feel. Relief. I finally got this PhD. I finally got through. The last thing you're going to want to do is buckle down and live on beans and rice, rice and beans to pay off $50,000 of debt. What so many people do is go, I've worked hard. I'm entitled. I should be able to just come home, kick my feet up, enjoy my paycheck. I'm just telling you, you're not going to want to pay off this debt. That's when people get into trouble because it starts ballooning. It's like, All right, I'll get to it later. I'll get to it later. One thing with student loans, if you try to get to it later, it'll get to you.

Let's see, dream for us a little bit. What would be an ideal job after getting to the PhD? Give me a university that you're... Give me a city, a university. Talk me through that.

Either I'm from Florida, so either UCF or be a top-tier, Ivy League institution. Yeah.

Okay, so imagine being in any of those places and the positive side of this is you waited, and now you're making $80,000, and you're comfortable. You're comfortable. You can actually enjoy your life. You don't come home after a full day of teaching and stressing out about the bills. That's what I'm asking you to wait for. I'm asking you to wait for the gig, but the gig without pressure. That's worth waiting for. It's my take, Connor. But listen, Jade and I are the rare people they're going to tell you this. Everybody else is going to go, It's fine. It's the price of admission. That's just false. It's half truth. Yeah, it's the price of admission. You got to pay the 90-120. I don't question that. But you don't have to loan it.

That's right, Ken. Yeah, we're going to tell you the hard truth. We're going to look not just at right now, but like you said, Ken, at the future. That's where the decision is made right there.

So, Honor, how's your stomach right now?

No, I'm just taking in you guys at a device.

Indigestion, a little stress? You feeling some peace about this? What are you thinking?

I've made no decisions yet, so I'm really just trying to figure out. I have your guys at a device.

And then everybody else. Well, here's the deal. We are in the minority, my friend. At the end of the day, this is up to you. But I'm asking you to press fast forward and play that out and really sit with those emotions. Most people don't do that. They deal with it when it comes, and then they're like, God, well, that sucks.

Look, when I was in elementary school, there was a poster on the wall that said, In a world of followers, dare to be a leader. When you go to school and pay cash for it, you are leading, my friend.

Connor, I think Jade just double-dog-dared you, as we used to say at elementary school. We'll see what he does. Will he be one of the masses, or will he be one of the few leaders who does it differently? That's the question. We'll talk about it on the break. Don't move. We'll be right back. This is The Ramsey Show. No matter what time of.

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The Ramsey Show. Thrilled that you were with us. I'm Ken Coleman. Jade Warsaw joins me. The phone number to jump in is triple-8-825-5225. Jade is our resident money expert and I'm the work expert. Those two issues go together. Hey, if you're feeling like 2024 is your year, you feel like I want to make a change, I want to make some more money, but I'm in the baby steps. Ken, how do I do that? I love those kinds of questions. Or just anything related to your work will take those… Jade, not Wade. Jade will wait in, is where I was going, on those as well. We're always thrilled to take your questions. Whatever you want to talk about America, we're here for you. Triple-8-825-5225. Let's go to Brandon now in Buffalo, New York. Brandon, how can we help?

Hey, guys. Thanks for having me on. How's it going?

We are having a blast. What's happening with you?

I'm 24. I have $260,000 in student debt. I have no.

Other debt. Wow, wow. Where's my tums? I got to look for them.

Wow.

Where did you go to school and what did you go to school for?

Yesterday, I took my last law school exam. I went to Syracuse University College of Law—I think I took the bar in February.

Nice.

What law are you going to practice?

Personal injury is the job I accepted after I passed the bar.

The reason I'm asking this, I'm going to get out of Jade's way, but I am curious, what do you think your first year since you accepted the job, I'm guessing they talked about potential money. I'm just curious what you think you could make in those first 12 months.

Yeah, so I already signed the contract. The base salary is $80,000, and then there are bonus offers, but I don't know what that entails. So somewhere between 80 and $90,000, I would imagine.

Okay.

Okay, so what's your question?

I have two questions. One is is putting myself in that much debt for a law degree worth it, given my starting salary?

Well, it's a little late.

Well, should have cut it out of.

It, my guy. Yeah, I know. I know, hindsight is 2020.

We're here now. We'll just accept where we're at and we'll move on from here. Let's make it worth it, right?

My answer is it better be. Okay. That's what I'm saying.

Yeah, we're going to make it worth it. What was the second part of your question?

How to tackle this debt? 60 of it is private student loans from undergrad, and 200 of it is federal loans for law school. Okay. Should I tackle that 60,000 private, higher interest rate loans first and pay very little on the 200,000? Or should I pay it all equal at the.

Same time? Well, my first question would be to you, is this your only debt, period? Do you have any other debt besides student loans?

No, no credit card, no personal loans. My car is paid. I rent. No other debt.

Okay, good. Then my next question to you would be, do you have any money laying around for savings? Do you have any money in stocks? Any other money that you could get to that's not retirement savings?

Nothing significant.

Well, what do you have?

Like, $5,000 in my.

Bank account. Okay, I'm glad you told me about that. Okay, so since you asked, I'm going to walk through our series of baby steps, and this is exactly what I would do if I were in your shoes. By the way, I was in your shoes. My husband and I paid off $280,000 of student loans, okay? This is what we did. We set a thousand dollars aside of our money. We didn't have much, but we set a thousand dollars aside and we said, This is our rainy day fund. This is our starter emergency fund. It's not much, but if something goes down, it's there in the pocket waiting for us, okay? Then we took any money above all of that, and we decided we're going to throw that at our debt snowball, and that's baby step two is you pay off all of your debt except the mortgage using the debt snowball method. Now, here's how that works, and I want to be specific with student loans because it can get a little hairy. With student loans, a lot of times you'll see, Okay, I've got one big loan. It's $30,000 and there's one payment. But if you really look closer, it's divided maybe into four or five or six or seven loans where all of that one payment that you make, it's getting dispersed across those six or seven loans.

What I want you to do is log in and really make sure you're looking at the loan in full, because what you're going to end up doing is listing these loans in order from smallest to largest. What's important about knowing that is, let's say, okay, so you said you've got a $60,000 personal loan. Right now, is that just one payment that you're responsible for? One monthly payment?

The $60,000, I'm sorry, is in a private... It was a private student loan. Right. I'm not paying on that yet. I still have a few months because I'm just finishing law school. But I think it will be just one payment.

It'll be probably one payment. But if you look closer, it's probably divided over semester that you took it out. It is, yeah. So when you do that, that would be technically that $60,000 loan is going to be the first one in your debt snowball, okay? But with the debt snowball, you make minimum payments on everything, but you put all the extra money on the smallest debt. So on that $60,000, you're going to need to look and go, Okay, it's divided into four little ones. What's the smallest one? And you're going to have to call in and say, Hey, I already made my payment for the month, but here's $800 extra dollars, and I want it to go to this specific debt. Because if you don't tell them that, they're going to spread it across all those little ones, and you're not going to make headway. Does that make sense?

Yes.

It does. Okay, so you got to do it like that. And then you're going to see those 3,000 gone, 4,000 gone, and you're going to knock them out really fast. So that's thing one. The second thing I want you to consider doing is while you're paying off these student loans, this is the only time that I would suggest doing some IDR with the federal loans so that you can get them to the smallest possible balance so that you can have more money freed up to throw at your smallest debt. Does that make sense?

Okay, yeah.

This is not a long-term play. This is not you kicking the can down the road. This is you going, Hey, federal government, I want to make these loans as low as possible because I have to make minimum payments on everything. I have more money freed up to put on my smallest debt. In this case, it's that private student loan. And then that's how you do it. You work through, you pay off the smallest one, then you take all that money, you throw it at the next smallest debt, and that's how the snowball goes. And it's going to blow your mind how much progress you're going to make on this, especially with your salary. Are you a single guy?

I am not. I have a girlfriend who we're planning on getting engaged soon. She is in medical school and also has a.

Significant debt. Hold on. Okay, so she's got the medical debt.

Well, first of all, you are single. Until you get married, you're single. That's right. Don't combine finances either. What do you think the marriage date is going to be? Just give us an idea.

We chat about it a lot now. We're thinking a couple of years from now.

Oh, boy.

Okay, so while you're separate, you're working your snowball, she's working her snowball, and you guys are pinky swearing that you are going ham on your respective debts, right?

Yeah. For the older people in the audience, I needed interpretation on what she meant by that a couple of weeks ago. That means getting.

After it. Getting after it.

Now, what's her med school debt going to be or is it at this point?

It will be total of about 200.

Oh.

Boy. Did you use to watch Sanford and Son? And he go.

I'm coming to you. I'm coming to you. I need my own sound effect. I'll just make it myself. I'm just going to grab my chest. That's a.

Lot, man. It's a lot. But you guys can do it. You can do it. What's her salary going to be coming out? Do you know?

She's hoping around 200.

Okay, that's better. That's good.

Okay. Okay, I got advice for you, my friend. You need a police scanner. Invest in a police scanner, and you are at every accident there is, you need to get a fat bonus. Is there any commission on you bringing in new business? There is. There is, exactly. I'm serious. I'm not joking. She thinks I'm joking.

You told this man to chase the ambulance.

Listen, he's in personal injury. You can't afford commercials. You're the low man on the totem pole. I would literally figure out what... Now, police scanner may be ridiculous, but makes sense to me. I'd be showing up at every scene of an accident, making sure everybody's okay, and right before they go home going, Hi, my name is Brandon. Your neck is stiff. That would be like, Dude, I got to get out of debt.

Yeah, I hear you. I must say, for now, at least the job I just accepted, I represent the other side. I represent the defendants being sued by these people. But I can still get a commission on bringing.

In new clients. No, you know what? I'd show up at the same scene of the accident, and instead of the person that's got the stiff neck, you're going to the other guy who thinks his life is over. Listen, I'm.

Your guy. Like, He stopped short, Daniel.

I'm going to.

Fight for you. He stopped short.

I'm just saying.

Wow, it's good, Ken. Yeah, he needs to make extra money. You're right.

I mean, I would be everywhere. I would sleep with one eye open, police scanner in one ear. I mean, man, I don't know. I'd get after it. Hey, good hour, Jade Warshaw. Hey, don't move. We're coming back. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you, America, win in your life, specifically your money, your work, and your relationships. All three of those are tied so closely together. If you're not winning in one, you're probably losing in a few, if not all. We want to help you. I'm Ken Coleman, Jade Warshaw. Join me. She's our money expert. I am your expert in work today. We'll take any and all of those questions. Triple-8-8-2-5-5-2-2-5 is the number. Triple-8-825-5225. We start this hour with Jason in Salt Lake City, Utah. Jason, how can we help?

Hey, Ken. My question is mostly for you, it's what you would do in my shoes. I currently am renting, and I can afford a house and/or a condo in cash, or a condo in cash, but I am enjoying my rent where I live. I love the place I live, and I don't necessarily want to buy a house or condo yet. I'm wondering what you would do if you were in my shoes?

I would do exactly what you're doing. With the evidence you've given me so far, if you enjoy where you're living and financially, you sound like you're in really good shape, how much cash do you have?

I have about $550,000.

Are you single?

I am.

Yeah.

How old?

Twenty-seven.

What do you love so much about renting this particular place? Give me more on that.

Yeah, I got a great view, and it's nice that I don't really have to worry about anything. After I pay my rent, no maintenance or anything like that. I'm concerned, though, I don't... Obviously, I want to get married and have kids and whatever, but I know if and when I buy a house, that may change when I'm married. I was thinking the condo route, and you get the HOA fees and all of that.

No, you don't want a condo. Saving. When you get the wife and the kiddos, the condos, that's not the ideal situation, especially where you are. How much do you make and how much are you saving and then how much are you investing? Give me the answer to those three questions.

Yes, I make 120. I max out all my other, my 4, 1, K, and HSA and all those. I think I can put in 30 %, and then I invest the rest into my brokerage account.

So the 550 that you have, is that in the brokerage or is that across everything?

Yeah, that's in the brokerage. Very good.

How did you save that up so fast? How long did it take you?

Some of that is from my parents. And then I would say hit the DNA lottery, so I've definitely paid for my school and I've definitely worked hard as well, but I haven't had any debt or anything like that.

Good. Yeah, because he's investing so much, I mean, he's solid. Listen, don't feel the itch. I would not feel the itch if I were you to buy at this stage of your life. You're going to buy. I think that when your family situation changes and all that, I'd keep stacking cash because you're going to be able to pay for whatever you want cash.

At the rate you're going. I may feel contrary to that, Ken. Well, of course you do. I may feel a.

Little contrary. If I say Yang, you say Yang. But I'm fine with that. I just don't know why he has to... He likes where he lives. He likes the view. He's in great financial shape. He's not married yet. Why should he buy a house?

Well, I don't think you should feel rushed. Don't get me wrong. I don't think you should feel rushed. But my questions would be okay. How long have you been renting for the last seven years? For the last... How long have you been renting and living on your own?

Yeah, on my own, about, I guess, four or five years, and I've been renting. Yeah, but I had roommates. This is the first, almost coming up on a year where I've been on my own and I have not had a rebate.

Okay, so you've rented for five, six years. What's your rent?

I'm sorry? How much do you pay in rent? $1,400. Okay, that's not bad. That's fine. I'm going to give it back to Jay. Jay disagrees with the year.

I want to hear this. Well, then my next question, so I'm just gathering more facts before I really form. My next question to you is, is there a lovely lady in the picture is all I'm asking.

There is not.

No, I am single.

I'm single. Look at... If you know...

Listen.

Then you just advertise. Hold on, single ladies in Salt Lake, there's your invitation.

Well, here's where my mind goes to. I don't want you waiting to buy a home because I might meet a lady and we might get married. That's probably will, but you don't know when that's going to happen. I don't want that to be the reason that you wait to get into homeownership. I also don't want the reason that you wait to get into homeownership to be because of, Oh, these rates, they're so high. I'm just going to wait till rates to go down. I just want to make sure that those aren't the driving factors.

Are they the driving factors?

Not necessarily, no. But like Jade said, at some point, I need to buy. It's like you don't want to rent forever.

I don't know- I agree, but that's not the scenario. I'm going to tell you, I respectfully.

Disagree with you.

Here's why. He's single. He's got a great view.

He's single. He's got a view. But I just am thinking about, over time, Here's what I know about you, Jason. You are a great saver. You're great at getting after a task. My thought is like, Listen, you buy a house, you own it in cash. You have the ability to build wealth so quickly. He's going to have this equity working for him. He's going to pick a place that he loves. I don't pay for it in cash. I think he should win. He's going to pay for it in cash. It's going to build up. He's going to save more money. He's the guy that's going to have a giant real estate portfolio. Regardless whether you start in three... Don't get me wrong, I'm not saying he has to be rushed and buy a house tomorrow, but I'm saying, Listen, if I were you in the next two years, I'd be thinking about owning a home is.

All I'm saying. Okay, then all right. If I'm going to meet you in the middle on this one, I'd say it better be a smaller one so that we just call it a real investment, not the home. Because we don't know what his situation is going to be when he gets a woman. She doesn't like his house.

Well, no home is the home. Anybody who thinks this is the one I'm going to live here forever, no, you're not.

What do you recommend?

I think- A.

$300,000.

House? I would spend his money. $550,000? He's in Salt Lake City, Ken.

I wouldn't spend all.

$550 on it. It's a single guy. Jason, what's it cost to get what you need in Salt Lake City in the area that you like?

To get a nicer home, I would say around $550, but I could get one around $300 to.

$400 as well. Okay, so you could do- But what's a nicer home? How many bedrooms?

I would say a minimum of three baths, two baths homes.

Yeah, you're a single guy.

But my point is-.

I know exactly that's why I don't need that.

That's why- You don't need that. I'm not saying he has to buy a house for his future family. I'm not saying that at all.

You want him to buy a $550,000 house cash as an investment property.

No, I'm saying I just want him to buy something that he can live in. I'm not saying he has to spend all his money. All I'm saying is that we know the correlation between homeownership and wealth.

Building over time. That's all I'm saying. I think he's going to get there, I just think in this single situation. But I.

Thought you said spend it on- His hair is not on fire. But my thing is, listen, all these markets are different. In Salt Lake City, if you're trying to get a two-bedroom condo or townhouse and it's 400, that's a reality in a lot of places.

Do you have the option to buy the apartment you're in with this great view?

Unfortunately, no.

Listen, I've been to Salt Lake. There's a lot of views. I bet you you could get a house with a nice view too, or buy a condo, or buy a townhouse with a lot. Listen, I love ownership.

I don't disagree. Because he's single and he's sitting on all that cash, I just would preach a little bit of patience right now.

He's been patient for seven long years, Ken. That was my Titanic voice, by the way.

I like that. I like that. I feel like I see Rose and... What was the guy? Jack, Rose and Jack, bobbing in the cold, icy waters. Very interesting. Yeah, you're not wrong to buy a house. It would be a great move for you. But I also like the freedom. Ken, you're not wrong either. Go get the lady and we figure out the house and you're stacking cash on the way. Get after it, young man. What are you waiting on? There's a lot of fish in the sea. What are these guys waiting on these days? This is The Ramsey Show. All right.

You're listening to The Ramsey Show. Ken, I had to hijack the mic from you just for a moment. It's okay.

It's in good hands. What's going on?

Listen, a lot of you probably remember a couple of months back, really back in the summertime, Ken, I went nuts on the mic because as a country, our spending had gotten completely out of control. We were looking at a trillion in credit card debt for the first time, and inflation, we were still dealing with that. I just had to let folks know, Listen, guys, we've got to get in control of our money and quit going on this roller coaster. It's interesting because really, over the past, I'm going to go with three years, has been crazy. Everything from COVID and then we saw the housing market just change abruptly. I mean, it's really been a roller coaster. You're looking at inflation, you're looking at mortgage rates, just so much change. Now here we are into the holiday season yet again, and people are still spending as though nothing's wrong. They're spending like nothing's wrong. But when you really look at the stats, it's crazy. I mean, again, here we are. Over the summer, it was like, Oh, man, we hit a trillion of credit card debt, and now we're at 1.08 trillion. It's just climbing up 1.54 billion year over year.

That's unheard of, unbelievable. Now we're seeing interest rates. Obviously, it's more and more expensive to borrow money, so interest rates on credit cards upwards of 20%. Wow. These numbers are going just... They're going mad. Now we're starting to see the results of our spending choices. We all got into houses in 2021 that we couldn't afford. Everybody bought cars because there's a shortage and it's too expensive to buy used, and everybody bought cars they couldn't afford with car payments, $700 a month, $664 a month, $882 a month. Maybe I called your number there. We're finally starting to see, okay, the dust is settling a little bit. The dust is settling. We're hearing it with, How could I possibly to afford to buy a house? It's the interest rates, and we're blaming the interest rates as though it's 1984, right? And it's not. It's 2023. If it was really bad, we'd be seeing 18 and 16 and 17 %. But we're losing our marbles over this three % increase or four % increase. I'm like, Is that really the problem? Are mortgage rates really the issue? Or is it the pattern that we've created with how we're borrowing money and living on more than we make?

It's a great question. It comes top-down. If you look at what Congress is doing, both sides of the aisle, both parties are equally guilty. That's right. The American debt, our country's debt. The entire attitude about debt from our leadership down is just, Well, we'll figure it out. We'll figure it out. Look at this. Look what they throw on the screen right here. That'll make you break out in hives.

Yeah, that is making me break.

Out in hives. If you're watching, you can see this if you're in our listening audience, James and the team is thrown up literally a... This is a tickerboard. I don't know what else to call it, but it is a running total of our national debt right now. Oh, that's painful. That's $33 trillion, $915 billion, and it's.

Going up. We're just watching it rise.

It's crazy.

Oh, wow. Look, some of us need to do that same exercise with our bank account and look at it. Look at, is your savings going down or is it going up? Is your investment going down? Do you even have anything? You know what I'm saying? You need to take a look at how you're spending your money, because like I said, we're seeing these numbers coming in. More and more people can are defaulting on their car payments. More and more people are taking 401(k) loans, whether it be for hardship or for other things. The average that they're taking out is $5,000. $5,000 that they're robbing from their future self to pay for what?

We don't know. Yeah. Have we been going to see any pain points in the data? Have you seen anything on the the reemergency student loans? They just started back in October, so we're still relatively inside of three months right here.

Listen, that's another part to this. We knew that it was an issue because after student loans came back on the scene, it's like, Listen, people are already drowning. They're already underwater as it is. And so, of course, Biden administration rolls out that 12-month on-rent period where they said, Listen, if you're not ready to pay your student loan, you don't have to right now. We'll give you 12 months. We're going to continue to add interest, but you won't be penalized if you won't pay it. I'm like, Listen, you are being penalized. That's interest rising, okay? But the point here is something has got to give. Something has got to change in your life because the numbers don't lie. The math is math-ing. Whether you like it or not, we're looking at this and we're going, Okay, you're deeply in debt. You're piling it up and you haven't changed your ways. Just recently, Ken, the other day I did a media response and they said, Jade, what do you think about doomsday spending? I said, Well, what is that? They said, It's people looking at the current economic situation and going, That really sucks. I'm tired of dealing with it.

I'm tired of looking at it. I'm just going to live my life. It's basically another version of YOLO spending or revenge spending.

Oh, okay, I thought this was the preppers.

This is different. No, this is different. This is people looking and going, I'm just tired of the roller coaster. I'm tired of having to cut back because of inflation. I'm tired of having... So I'm just going to forget it, double-make-sure. I'm just going to spend my money. Wow. I'm like, Really? That's the response? You're going to keep running into the fire? It's consuming you. It's consuming your future. It's consuming your bank account. You can't even pay for your kid's college, and you're just going to keep spending? That is not the solution. No. It's not. Here's what I think. I think it's the beginning. We're about to come into a new year, 2024, and I think that you have a decision to make. That decision is you can either continue to bury your head in the sand and go, This sucks. I don't like it, but I'm going to keep doing my thing. I'm going to keep spending for Christmas. I'm going to keep getting new car loans. I'm going to keep living my life because, quote, I deserve it. Or you're going to go, You know what? I don't have any money. I argue with my spouse about money every single day.

Yesterday, I yelled at my daughter for asking for lunch money. Gas is a struggle. Groceries are a struggle. I never go on vacation without putting it on my credit card. My daughter is going to go off to college and she's going to have to take out student loans. You're going to look at the reality of your life and you're going to go, What can I change? What do I need to change? You're going to write it down. You're going to make a list. For once in your life, you're going to make a plan and you're going to stick to it. Luckily, we're here to help you with that. In the new year, we're going to have so much. Listen, I talk about every dollar all the time. I talk about Financial Peace University. In the new year, this is your chance because I know who I'm talking about. I'm talking to the people who circle around the Ramsey network. You all circle around, you watch the show, you come to events here and there, but you've never actually done the thing. You've never actually gotten on the plan, stuck to it, gotten on a budget, stuck to your budget.

This is your chance. Are you going to keep taking out credit card debt? This is your chance to cut the credit card up once and for all and be done with it. This is your choice. This is your wake-up call. What we're looking at, it's a nightmare. It's not a dream. Being in debt, not living paycheck to paycheck. 67% of Americans are living paycheck to paycheck, but they're not ready to do anything about it yet. You can make that choice. That's all I'm saying, Ken, people have a choice to make.

Well, I think you make a very compelling case that this is an issue, whether it be money, your weight, substance issues, relationship issues, in a job you can't stand. We as humans would rather be miserable than uncomfortable. Yeah, that's right. What you've presented here is an unbelievably, overwhelming case that people would rather be miserable financially than uncomfortable, meaning making the sacrifices, living on a budget, not buying a brand new car. That's uncomfortable to do things differently than you're doing now, but you're miserable. If you can understand that I think the case that Jade is making here is you're okay being miserable.

Until.

You get to point where you go, I don't want to be miserable with money anymore. I'd rather do some things that are very uncomfortable to not be miserable. You and Sam did that. You embraced the amount of money you paid off, almost half a million dollars. You were uncomfortable.

You have to hit that moment. The stuff's got to hit the fan in your life to where you go, This is embarrassing. This is embarrassing. I remember my sister went into the hospital, and I couldn't go see her because we didn't have the gas money. And she was just three hours up the road, Ken. That's miserable. That was embarrassing. And some of you guys need to get embarrassed about what's going on with your situation and go, I am a grown woman. I am a grown man. I need to stop living like this. Think about the last thing that you needed to do and you couldn't do it because you couldn't scrounge up $26. That'll move you to change.

All right, we're here to help you change. Quick break. Don't move. More of your calls coming up. This is The Ramsey Show. Welcome to The Ramsey Show. I'm Ken Coleman. Jade Warsaw joins me in studio. The number to jump in on the conversation, it's about your life. We'd love to hear from you. Triple-888-255-225. Triple-888-255-225. Let's go to Emma, who joins us in Milwaukee, Wisconsin. Emma, how can we help?

Hi, thank you both for the work that you guys do and taking my call. I really appreciate it.

You bet. What's going on?

Yeah, my question today is about my career. I recently have been promoted into a new role. I love it. My last roles within my organization have both been brand new roles. This last role, I actually helped promote and I helped facilitate the job description and what I'm actually doing for the company today. My question is, how do I know what I'm worth in the market outside from this niche environment and this specific organization?

You mean what your salary range is outside?

Correct, yeah.

Well, this is not a perfect science, but you can have some good science around it. What you have to do is, to the best of your ability, you got to match up your job description, even though you created it custom for your current organization, which by the way, I want to give you mad props for that. That's really awesome that you did that. That is not done very often, and I admire you. But if you could take your job description, even the language that you use, but begin to look out in the marketplace and match that up, and I think you could probably match that up. I'll try to help you a little bit. How would you describe your current role?

Yeah. My current.

Role is.

Development and training in a sales department on a very basic level, that is what I do. I know there are those roles out there. I do believe that I could find something somewhat.

Similar to that. Yeah, that's what we're doing. We're going to look at sales leadership roles, sales training roles, and you just begin to look at those job descriptions out there, and as those companies are describing their roles, how much do they match up with what you're doing, and now you're looking at your area of Milwaukee, Wisconsin, you're looking at your years of experience. It's not apples to apples. Companies are going to look at experience, and they're going to look at specific skill sets. If you just take the matching up of the job description plus your experience plus your skill set, and you can see what the marketplace looks like. Then if you wanted to go a step further, you could always reach out to a recruiting company because recruiting firms are looking for people all the time. It doesn't mean you're signing up with them. It doesn't mean you're looking for a job, but you go, Look, what's the market out there for me? That's how you can get a much closer idea.

Awesome.

Thank you very much. Yeah, appreciate the call. All right, let's go to Lily in Indianapolis. Lily, you're on The Ramsey Show. What's going on?

Hi, Ken. Hi, thank you for answering the You bet. I appreciate all the advice you give to the listeners. My question is.

Whether.

It's smart decision to use cash to buy a new car, to upgrade, I guess, from my current car.

What's your current car worth and how much are you trying to upgrade?

Currently, my car is worth about $20,000.

The new car.

We're looking at is close.

To $64,000. Oh, wow, $64,000.

Okay. What's the car?

It's a Lexus SUV.

Okay, well, let's see if it makes sense. Do you guys have any debt? We don't have any debt besides a mortgage. Okay, no debt besides a mortgage. Do you guys have three to six months of expenses saved up?

Yes, we have a.

Rainy day.

Fund close to $70,000.

Okay, excellent.

We have a set aside bucket of money to work with.

Around $48,000. Okay, so the $48,000 is separate from the 70?

Correct.

Okay, and then what do you guys earn? What's your annual income combined?

Household-wise.

300k a year. Okay, so we always say you don't want your vehicles to be any more than half of your annual income. For all intents and purposes, you have $150,000 to work with here. If you've got a vehicle that's $65,000 and your husband's got one that's 65 or $70,000, you're good. The question here is, is this a used vehicle or is it brand new?

It's a brand new one.

Interesting. Then my next question is, if we're talking about doing a brand new vehicle, we always talk about... We suggest not buying a brand new vehicle until you have a million dollar net worth, because at that point, you can take the hit, right? Because we know that brand new vehicles lose 60% of their value in the first 3-4 years, right?

What's the model? I'm sorry, what's the question? What's the model of the Lexus SUV? Is it a GX?

It's the MX hybrid.

Mx hybrid. All right, keep going, Jade. I love doing research. I know you do. Because Jade's right, I want to show you the real numbers. By the way, is this a 2023 you want to get, the '65?

2024.

They're going into 2024.

The new new? It's a Lexus MX.

Yes. Okay. So, Lily, do you have a million dollar net worth?

I think so. We ran some numbers. I think we do. My husband would say 100%.

Yes, I'm always on the cautious side. What's making you feel cautious?

Just my nature.

What is it? Like he's counting money that you don't want to count? What is it? I have.

A business, which is.

Doing well.

I just don't know how the business will grow 5, 10.

Years from now.

There's the unknown.

Okay, but I mean net worth, meaning when you subtract what you owe, which is nothing, what you own minus what you owe, right? So if you said, I have no debt, so you're looking at the value of your home, whatever your home is worth. Then you're looking at what you have invested in various investments accounts, and you're looking at what cash you have. Now, you could include your business if you at some point plan to sell it and you have a valuation on that, you could include that. But yeah, that's the question. Because if you have a million dollar net worth and you have cash to buy a brand new car, I'm not going to be the one to stop you. I'm going to congratulate you and clap you up. But if you don't-.

I did some homework, Ms.

Jade. All right, Ken is going to.

Tell us the- I'm the teacher's aide for this segment.

Yes, Ken.

Coleman, go for it. Jade is absolutely right, Lily. This is Nashville, but I would guess that Indianapolis may be even a little bit cheaper, but not crazy. Here's what I've got. I've got a used 2022, the index, 19,000 miles for 41.9. Whoa. I got a-.

That's a $23,000 difference.

Yeah, I'm going to do better. I got a used 2022, same model, 21,000 miles, only 2,000 miles difference, 37.9..

I'm just saying- 19,000 miles is new.

That's a new car. Here's what we're saying, Lily. We just want your money to go further. This isn't going to break you. But paying $65,000 for this model for a 2024, you realize you're getting ripped off because these cars, this is a two-year-old car, not even two-year-old car I'm giving you right here. That's right. You're saving a lot of money. I like the $41,000.

Price point. But I don't want her to feel bad if she has- Of course, no guilt. -if she's got the million dollar net worth. I want her to inhale that new car smell until her eyeballs roll in the back of her head. You know what I'm saying? I want her to enjoy that moment if you've got that million dollar net worth, because then you can take the hit and it is what it is. Not me.

I feel like I'm getting ripped off. I'm getting gained.

Well, you're agreeing to take the hit. You're right. Yeah, you're going to pay. I'd like someone else.

To take the hit. Yeah, and here's the thing. With these two cars here, Lilly, we've someone else has paid the stupid tax. I'm just trying to make my case here. Listen, it doesn't matter if I'm right. I'm just saving you money. You can't hate me, Lilly. Yes.

So, Lily, let's go back to the core- I'm a man of the people. Let's go back to the core question, because my screen says, Is it smart for me to buy a $65,000 car, or should I invest some of that money? As long as you are investing 15% of your income every single month, as long as you have a million dollar net worth and as long as you can pay cash for that brand new car, for me, the answer is yes. For that reason, I'm in. I agree. I'm in.

You can do it. You're a big girl, Lilly.

We believe in you. But if one of those things doesn't check the box, then we have to adjust.

If you don't want to pay us stupid tax, go Kinsroe.

I like it, Ken.

That's good. I got to get the last word in there. I can't help myself. Really good stuff. Hey, Lilly, you're awesome. You're doing great. Enjoy whatever car you're going to get. This is The Ramsey Show.

What's up, guys? It's Jade Warshaw. Now, tell me the truth. Are you just watching the expenses rack up and wondering how on earth you're going to make it through the holidays? But I've got the secret ingredient that's going to help you find some breathing room. It's an every dollar budget. Guys, this works because you make a plan for every single dollar and you know exactly where you stand before the month even begins. You can get started for free. Just head to everydollar. Com or download the app from the App Store today.

The Ramsey show continues. Thrilled to have you with us. We're here to help you win with your money and your work. Today, I'm Ken Coleman, Jade Warsaw, joins me. Oh, it is the season. Tis the season, Jade. Christmas around here is always really fun as we get to do some great things for you. You find folks part of our audience. We've got two things. One, it's not too late to get involved in the Ramsey Christmas Cash Giveaway. If you don't know what this is, one of our weekly prizes each week is $500, and then you're entered to win the grand prize of $5,000. You can enter every day for your chance of winning at ramseysolutions. Com/giveaway. But while you're on the website, over in the store, we've got our $12 sale, the Christmas special. All of our best-selling books, just $12 each. There's a meaningful gift for just about anybody on your list. That's ramsysolutions. Com/store, ramsysolutions. Com/giveaway. Make sure that you are signing up for a chance to win 500 bucks and maybe even $5,000. So get to the website. I don't know what you're waiting on. All right, let's go to Fayetteville, Arkansas, next.

Elizabeth joins us there. Elizabeth, how can we help?

Hey, thank you for.

Having me on. You bet. What's up?

I'm not sure what I should do. There's two sides to what's going on, I guess. Do you want to hear the marital side part or the financial side.

Part first? Let's hear the marital side part first.

Okay, so I'm going to start back to a year ago. I left my ex-husband, which was financially abusive, and I got out. Since then, it's been a... I've been keep getting thrown back down, I guess, is what it would be.

Do you mind telling us briefly what financially abusive means?

Yeah, I had a budget of $50 a week for groceries for my family, and that's the only access of money I had.

Wow. So it totally.

Controlled you. Totally controlling. Wow. What was you guys' income?

He made about $70,000 a year. I read Dave Ramsey's books about four years ago, and I got so pumped, and I brought it up to him, and he just despised Dave, and it shut me down and he wouldn't let me in on anything. I even wrote out a strategy for him like, Hey, if we do this and this, this is what we're going to be projecting to getting out of debt. Because at the moment, we had, I think, a car debt and a couple of other things, credit cards probably. Eventually, we did get out of it, luckily. But now I'm back.

In debt. Okay, so tell us what's happening. You said you keep going down. Give us a picture of what's going on with you right now, the finances?

I scored a job right after I left him in December, and I started in January of last year. I was there until about April. Between then and April, my idea was I have six months. I'm going to save up enough for a retainer for a lawyer, and I guess do it myself, like file and everything on my own cash. But he beat me to it. About 30 days later, I got served and I had to take out a credit card for a retainer because I had zero money. I got an apartment within, I don't know, January 10th is when I got my apartment. I pretty much got everything set up on my own by myself. I don't know how I did it, but I did it. It's just been back and forth. I got let go. I was pregnant at the time when I did leave.

Oh, man, oh, man.

Yeah, I was about 13 weeks pregnant, I think, if I can remember correctly. I got let go in April for budget cuts, I guess.

How are you living now? How are you making ends meet? You've got the baby now. You've got your place. How are you covering the bills? I'm surviving. Yeah.

I have child support, but it's really iffy, it's not set amount. I have... I have that.

And then- How much is that? I was able...

It's supposed to be 700 a month.

But it's not. You can't count on it yet is what you're saying.

Not quite, because I look back and some months I had 400 and some months I had 600.

Okay, so he's not consistent with that. What are you bringing in every month?

Well, after I had the baby, I got on a contract gig for about 200 a week, and I paired that and the 200. And then at the time, I had.

A boyfriend. So 800 for you?

Yes. Okay. At the time, I had a boyfriend. And when I got let go, I told him I was like, I don't know what to do. I can't. I'm not going to be able to...

I'm not in my house. You were needing him to help you support. You were needing the boyfriend to help support, obviously, because you were bringing in 800. Yeah. Okay, what work do you do? I have to toys.

I'm in the marketing industry, so I'm a social media manager. I did DMer stuff for a fitness coach. Then now I found a job after I got let go of that one, the contract ran out. I found another one at an agency, but it's only for 60 days, and it's going up at the end of this month. I have an option to become an employee depending on how I do, if.

That makes sense. I'm going to let Ken get to you with the career stuff because I need you to be doing more that's earning you five times more money. And I know that you can do that. He's going to help you get there. Before I set him up, what I want you to see is two people can't live off of $800 a month. And even if the child support becomes consistent, you can't live off of $1300 a month or $1500 a month, okay? So the.

Income- I'm actually getting about 1,200 with this new job currently. Okay, but.

You still need $2,000 more because that's $2,000 a month. And $2,000 a month is $24,000 a year.

Yes.

So do we see-.

I have to drop the bomb on this one. Okay. After everything got finalized, my ex came up to me, and I don't know what his intention was, but essentially, he knew that my boyfriend was living with me, and he told me I'm basically in contempt, and I have to figure out what to do or he'll file for contempt.

What's the contempt?

I talked to my wife. I'm basically cohabitating with another male.

While you have the baby?

And my six-year-old, yes.

Well, yeah, okay.

Yes.

He can do that because if the tables look, I'm not trying to be harsh, but if the tables were turned, you'd be feeling the same way. Let me paint a picture of what I want for you. I'm just going to be blunt. I want a situation where you're not dependent on a man, period. Because right now, do you understand? Because they can come and go. You're bringing these guys. You don't want to be bringing these guys into your kid's life in and out, right? You're fresh off of a divorce. It's almost like I'm just telling you what it sounds like from my seat. It almost sounds like you just rushed into another relationship because you needed stability. Your stability doesn't come from them, okay? You need to go out and create the stability in your own life, and you need to get your community rallied around you, good friends, family. If you're not connected in a local church, I don't care what you believe in. Get connected in a local church because those people are not going to care what you believe. They're going to rally around you. They're going to love you. You're going to be a good friend to them.

They're going to be a good friend to you. You need people, not just boyfriends. Does that make sense?

Yeah, but my lawyer told me to... The judge is known for revoking children for reasons. My lawyer told me to either move them out or marry him, and so we had to do that.

Did you get married?

Yeah, we did, but we were planning on it. Anyways, and I talked to my therapist about it, too.

Okay, so now you're married.

I voted out for him.

Yes. Okay, so now you're married, so the contempt thing doesn't matter. You told it to me like it matters. It don't matter anymore. All right, come on, Ken. It doesn't now.

Yeah.

It doesn't now.

We had- We got a lot going on here, James, and we're running out of time. I rarely do this. We usually don't hold over for the hour, but we want to get her a financial coach. Hang on the line. You need a financial coach. But listen to me. Now that you're married to this guy, which would have been nice to know five minutes ago.

He.

Has got to be working 50, 60 hours a week. You have got to get some help with the babies, and you're working 40 hours a week. This is an income issue, and you've got to get more of it, and you got to keep more of it. We're going to get you a financial coach is our gift to you to help you get a budget and get set up. You better go get some work fast. Both of you. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help you win in your life, in your money, in your work, and in your relationships. Triple-a-8255. Com. 525 is the number for you to call in. We're here for you. I'm Ken Coleman. Jade Warsaw joins me. Triple-8-825-5255. All right, up first, going back to my stomping grounds, the 757, folks. Love Hampton Roads, Virginia Beach area is where Raven joins us. Raven, how can we help?

Hello. Hi, thank you for.

Taking my call. You bet. What's going on, Raven?

All right. I've been on our debt-free journey since December 2020, 2022. We started with about 70K in debt. Now we have 41,000 in debt, which includes a $38,000 car and $3,000 in student loans. However, we are outgrowing our house. We started looking at houses just to prepare to look for the future. We found a great location that's about 30 minutes closer to my husband's job. Next thing you know, we've picked a lot and put the earnings money down.

Next thing you know.

Look at that. Just happened. You guys had no control over that.

Isn't that crazy? No, none.

Girl, okay. I know there's a butt or there's a problem somewhere, so tell me what happened.

There's a butt. Immediately, we started crunching the numbers because I'm the one that got started on this journey down a days. But as of today, we owe $155,000 on our current home. We could sell it for at least $330,000 which would be a profit of about $160,000 after paying the realtor. Okay. And we have $50,000 in savings. So the new home costs $700,000. We're building a new house. Yeah, we're building a new house that won't be ready until July. Where? What area? Green Brier, Hickory area. I know.

That.

Area. It's basically Chesapeake.

Yeah, you upgraded, didn't you? Big time. Yeah.

Yes, we're very excited. It's a great school. It's a great.

Location, everything. So you're still in the current house. You haven't sold it. But when you do, you'll take $160,000 from that, right, in equity? Yeah. And then you're going to put that with the 150. So that's almost 300, a little over 300. And you're going to take that to put on this new property, which is a $700,000 property. Did I get that right?

Almost. So we owe 150 on the current home. And if we sell it for 320, we would profit 160, plus the $50,000.

Oh, $50. Okay, I thought you said 150.

They're really only going to have about $210,000 is what you would have, correct?

Yeah. Sorry, yes. You're putting $210,000 down on a house that costs $700,000.

Just about. So we figured we would use some of that to finish paying off the car and to obviously put it down 20 % for the down payment, save three months of expenses, which is about 20-25 with the new house mortgage. I think we should be free and clear, but I just want to get you guys to put.

This change. I'm going to get out my calculator real quick.

Why you do that? Okay. Are you in a contract? I mean, you can't get out of this? Or do we have.

Any wiggle? I mean, we probably could, but I'm sure we would lose.

Some money. So what did you specifically call us for? What do you want Jade to weigh in on here?

What's going on? The plan was to pay off the car, the student loan, before we bought a house. But we did that a little early, so I just wanted to get some reassurance that we're still on the right track.

Okay, so if we look at the numbers, okay, so you've got the $210,000 and you want to pay off the $41,000 in debt with that, right? Mm-hmm. That leaves you $169,000.

Okay. Well, if we pay it off then it would be around July. By then, we would probably only owe about $38 or...

I'm sorry, $28 or.

Less by then.

Okay, so $10,000 difference. Okay, so then let's say that leaves you with $179,000. Fair enough? Yes. Okay, and then you want to take out how much for your three to six months? $25,000?

Yes, about $20,000 to $25,000.

Let's say $25,000 because you're going to be a new homeowner. Okay, so that drops you back down. You said you want to put $20,000 down on this house. So what is that? About $140,000 that you need to put down? Yes. Okay, so that puts you... I mean, you're right up against it, but that puts you right there. Yeah, I mean, what's the question? What's your concern? Are you worried that you... What are you worried about? Because there's a sense of worry there.

Yeah, because I think we'll be okay. We've got a couple of raises coming in and starting the new year. We don't really know exactly how much that would be, but that would be about maybe a thousand more a month. Then get after it.

But I don't know.

But.

Here's the deal, Amy. But what she's worried about, I'm sensing your worry. Your worry is not what you're going to do with this equity and paying off the debt. What you're worried about is the percentage of your monthly income that this mortgage is going to be. That's what we need to be talking about. Absolutely. What's the mortgage going to be? It's going to be higher than... What's the mortgage.

Going to be? I was talking about $4,800, depending on the interest rate.

$4,800 a month? Yeah. Okay, and how much do you bring home every single month after taxes? Not after investing and anything like that, just after taxes.

After taxes, I bring home 28. My husband brings home about 64. That's before our raises that are coming up January.

Okay, so you're bringing home $9,200 a month, and you're basically at half.

That's too much.

That's why you're feeling crazy. This has nothing to do with you selling the house and paying off the debt and da, da, da, da. What you're worried about is you guys are buying a house that's going to be 50% of your take on pay every month. I'm just letting you know, you're going to feel that. And even adding $1,000 to it, that helps. But you need to be getting this thing down to 25%. You all got to do it fast because nothing will make a blessing feel like a burden quicker than not being able to afford it. I would absolutely hate that for you guys. Really, I think what this call is about, Ken, let's turn a corner. How can they get their income up?

Well, actually, I don't know. I don't know their situation. We got about a minute here. What professions are you guys in? Give me the really quick answer.

I'm in contracting with the government, and my husband just got promoted to Master Chief in.

The Navy. Yeah. Your incomes in those things are limited. Now you're talking about side hustles, and I don't think the side hustles is going to make the difference. I think there's too much house, and I'd walk away from the house. That's the truth. You guys are both in government jobs. The only way you're making extra money is going to be, and you have limited time, and that's not going to make up the difference, Jade, to get enough income in to get it to the 25 %. I hate to tell you this, but it's too much house. I wish I had another answer, but going and making more money is not this answer to this. You guys are going to be house poor. New house means new furniture, new problems, decorating, all the things.

You could put more down on the house and just pay off your debt the old-fashioned way. That's your only other option.

But even then, I don't know if it makes that much of a difference. Run those numbers. She gave you the ratio. I'd be patient. This is The Ramsey Show. If I were the person who makes fitness analogies, which thank goodness I'm not, I would say the Ramsey Christmas Cash Giveaway is almost to the finish line, and so are your chances of winning the $5,000 grand prize. To enter, just go to ramseysolutions.

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For as low as $10 right now. Go shop the sale today at ramseysolutions. Com/store. That's ramseysolutions. Com/store. Welcome back to The Ramsey Show. I'm Ken Coleman. Jake Warshaw joins me. We're taking your questions about your money, about your work. Professional advancement means financial advancement. Can I do that while I'm in the baby steps? Want to start that side hustle this next year. We'll take any of those questions. Triple-8-8-2-5-5-2-2-5, Triple-8-8-2-5, 5-2-2-5. Marisa is up in Houston, Texas. Marisa, how can we help?

Yes, hi. Thank you so much for taking my call. First, I guess I just needed some advice on what to do. Currently, I'm 30 years old and I'm thinking of changing my career, going back to school.

To what?

To nursing.

What are you doing now?

I'm a pharmacy tech.

Okay.

All right, keep going. I'm thinking of going back to school, but I'm stuck in between picking an accelerator program, which will cost me about $70,000.

Or- Hold on, I'm sorry. Did you say $70,000 or seven? $70. $70,000. Yes. For what?

For bachelor's in nursing.

Okay, got you.

All right. It's a one-year program, so I think that's why it's so much. Wow. I'm in between... For going for that program or going on to a associate's degree in nursing, which will be two years, and that comes out to be about 10K. But I would still have to go back to school another year. That's probably another 30,000 for a bachelor's.

That's a big difference.

Okay, so if I'm hearing you right, 10,000 for the associates, then another, did you say 30?

It could range from 15-30.

Fifteen.

To 30. Yeah, depending on what program I get accepted to for the bachelor's. Having my associates, I could get into a bachelor's nursing program, and that will be another year. So total will be like three years for the longer route.

Can I ask a quick question? The 15-30,000 for the bachelor's, what denotes that? Can you just apply to programs that are cheaper?

No. Okay, so the associates, you have to take credit classes. That's basically all the requirements. You have to take credit classes. Then for the one year, the 30K, you have to have an associate priority in nursing.

Right, but you said the range was between 15 and 30K, and I was trying to understand what denotes that range.

Depending on school, some schools are cheaper than others, but I've looked around and depending on who accepts me, it can be from the cheapest I've looked, it's $15,000.

You'll just apply to the cheapest ones?

Right, yeah. Always, because Marisa, no patient will ever ask you how much you paid to go to nursing school.

Yeah, we're not even applying.

For the 30K ones. Don't even think about that. You've laid this out for us. The $70,000 bachelor's one-year program to me makes no sense at all because I'm guessing you cannot afford anything close to that. Is that true? What can you afford right now? How much money do you have to be able to put towards school?

Currently, I have about 14k cash.

Do you have any debt?

No, not debt. Well, small credit card debt, like 2,000, maybe.

But that's debt, sweetheart. Marisa, that's debt.

Yes, but I can pay it off. It's not accumulating any interest.

It doesn't matter. It's still debt. What other debt do you have?

That's about it, really. I don't have anything else.

Car payment?

No car.

Payments, no. All right, so you only have debt of $2,000 on a credit card and you have $14,000 in savings or is that in your checking?

That's in my checking.

Any savings?

Well, that's all I have.

Okay, got you. Her savings is in her checking account.

Well, here's the deal. I certainly would cash flow the two-year associates program because my question is, once you get that associate, are you able to do any nursing at all or no?

Yeah, I can. I believe once I get into the program or once I receive my associates, I can work in a hospital for about a year. Within that year, they do require you to get your bachelor's. I would.

Be working in- How much money are you making right now as a pharmacy tech?

Right now, that pay is about 40K and gross is about 55.

All right. Any opportunity for overtime?

Not really, yes. I take it as much as I can. I also work part-time. Right now, my full-time job is at the hospital, and I work part-time at a.

Retail pharmacy. Okay, so what are you bringing in total? So full-time plus part-time, is it the 55 or is it more than that?

I don't know, maybe about 60 because I work on the weekends. But another thing, too, is like I said, I'm 30. I'm not married. I don't have any kids, but I'm with my partner right now, we want to settle down. He's not forcing me to go to school. He says, I guess combined, we would be good. But I guess the nursing school is just for me to increase my income. But my question is, should I... Well, I guess like you all said, I should just go ahead and do the associate's degree.

No, go ahead and ask.

Your question. -and it'll take longer. Well, it's just because I guess in the next three or four years, we would like to have kids and buy a house and all of that. I guess that's fine between those two. If I should do the faster route, pay a little.

Bit more and- You can't afford the faster route. That's got to be off the table because you don't have $70,000. You don't even make that in a year. I don't say that to be negative. I'm just saying you need $70,000 in one year and you make 60.

If you do that and you take a loan out for that, Marisa, guess what? It's going to put everything else you dream of that you just mentioned: the home, the kids, it puts all that in jeopardy. This is not necessary. With the income you have, the fact that you are single, you've got some extra time, the boyfriend is supportive, I would cashflow the 10K for the two-year program, get you in the building. I wrote an entire book called The Proximity Principle, which says, I got to get around people that are doing what I want to do. If that gets you in and I cash flow and I'm in nursing, then the angle I'm going for, Marisa, is I'm looking for a hospital or a program or a clinic or something that says I'm willing to pay a good chunk of Marisa's tuition.

Let me just add, this is just all I'm saying. I'm not saying this is the case, but there is something to be said for a lot of people think. How many times do people call in and say, I got a whole degree in this field. I started working and I hate it.

Well, that's another thing. It's a very good point. Have you hung out with nurses, Marisa?

When she does that $10,000, she's going to be able to hang out with these people and see that she really.

Likes it. But I say, I grew with you so much I wouldn't spend the 10,000 until you spend time with nurses. Have you spent time with nurses? Like, really, as a nurse? The good, the bad, the ugly.

Yeah, I know what the work is. My best friend is a nurse. She's been a nurse for five years. I know nurses too.

It's tough.

It is tough.

I say that specifically because nursing is one of those fields that is like, You've got to be wired for this. So shelling out $70,000 a year and speeding through a program, getting into it and being like, Oh, wait, this is for the birds, you'll feel terrible. At least with the 10-year plan, getting the associates and then doing the year bachelor's, she gets to test it. But I hear you can. Testing it before then would be good, too.

Well, I think she has. I think you meet that. You know what it is and you know what you want to do. We're saying you're going to walk through this, not run. We're going to walk through it the speed of cash. Cash, cash, cash. You're going to be in. You're going to be a nurse. I really want you shaking the tree, talking to everybody about what programs will hospitals... Listen, there's a huge need for nurses right now. I talk about this every day. I want you to see what's out there as relates to somebody paying your tuition because they need new talent. They need new people in the building, and you represent that. No debt on this, no loan. It's not worth it, and it's not needed. It'd be one thing if it were like, There's no other way. Trust me, there's always another way besides taking out a loan. Really appreciate the call, Marisa. You don't understand how big of a deal it is to be a new nursing candidate. They are hemorrhaging people. They need people. You might be surprised, Jade, how many hospitals, organizations will say, You know what? We'll help you with your tuition.

That way you have no debt and you jump right in. Thanks for the call. All right, don't go anywhere. More of your calls coming up. This is The Ramsey Show. If you want to know.

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Com/taxpro. Welcome back, America. You have joined the Ramsey show. I'm Ken Coleman, and Jade Warshaw joins me. Jade is a little fired up as we went into our commercial break. She had about 30 seconds more that she said she needed to add.

Listen, if you call in the show, you need to know how much money you make. Listen.

Or she will.

Hang up on you. I think just in life, not.

If you call in the show, as a person. That's right, James.

In life. You need to know how much money you make. We talk about budgeting, we talk about FPU, we talk about the baby steps. The number one thing, you cannot do any of that if you don't know how much money you make. I mean to the penny. You need to know, every time when I get a check, this is the amount. Now, if you're self-employed or you have a fluctuating income, it's a little different, but you need to have a clear picture of what you think it probably will be based on what you've been doing. But you need to know how much you make. Guys, I say it all the time. Your income is expensive, okay? The money you make is expensive. Jade, what do you mean by that? I mean, you spend your time, you spend your energy, you spend your sleep. Some of you spend your sanity. Your income is expensive. It costs you. All right? Handle it with care, understand what it actually is so that you can make it work for you. That's it. Your homework for tonight is to look at your pay stub and memorize it. All right? That's it.

I can hear the audience.

I can hear the audience in my head. Yes, Ms.

Jade. Yes, Mom and Jayda.

I love it. Sorry. A couple of things here real quick. Coming off of that mini rant, my colleague here, look at her. She looks like a million dollars.

Right.

There. I look nice right there. Money is not a math problem.

Like a nice person.

A fun little short book here that she has written, The real reason you're broken, what to do about it. Really, really good stuff. This is now... Is it available? Actually, now, pre-order is gone. It's now go get.

It today. Listen, if you order it from ramseysolutions. Com, we will send it right to you. If you order it on Amazon, A, you're paying more money for it, and you have to wait until January second to get it. Go to ramseysolutions. Com and get it.

Get the book. It's really great. By the way, you music lovers will love that her chapters are titled, they're all-song. I just picked up on that.

Did you just get that? Okay, I love it. Do you recognize the songs?

Yeah, absolutely. Are you kidding me? Hey, now you're an all-star. Don't make me sing it. My favorite is Chapter4, Sledge, hammer. Sledge, hammer. Oh, we harmonized there. That's right. Wow. That was incredible. It's true. We did not rehearse that. It was great. She's very talented. Then speaking of fun books for the family, I'm glad for what I have Rachel Cruz's first. Where's our camera? Sorry, guys. I feel like David Letterman used to do this all the time I was growing up. There it is. I'm glad for what I have Rachel Cruz's children's book. It's all about contentment. Then our good buddy, George Camel, we got another money book out here. Look at George, Breaking Free From Broke. Great book. All of those books, ramesysolutions. Com/store. These are great gifts for you to give yourself and to others. Go get them at ramesysolutions. Com/store. All right, to Los Angeles, we go. Amelia is there. Amelia, how can we help?

Hi there.

I just wanted to ask today about budgeting.

Thank you so much for taking my call. Sure.

What's going on?

I used to live in an area with really low cost of living.

And so.

Since moving out here, I'm just finding.

That it's.

Really hard to save and put money into an emergency fund. I feel.

Like.

On months where.

There's no.

Emergencies and where we the.

Amount of money.

We're expecting to make that.

We do great on our budget.

And then I feel like half of the.

Months were just barely scraping.

By and having to pull.

Out of that emergency fund. I would just love some advice on how to budget in an area where it's a really high cost of living.

Yeah. I mean, on the one hand, I'm just going to say budgeting is budgeting. Whether you're in a low cost of living or high cost of living, the whole point of a budget is you're simply planning your money before the month begins. If the cost of living is an issue, that means you have an income issue, not necessarily a budgeting issue. Let's start with that framework. How much money do you guys make per month?

Total, me and my husband end up bringing in.

$7,500 a month. Okay, good.

Then he's a.

Student.

So he also gets just random payout for scholarship.

I would say three times a.

Year, we get.

About $5,000. Is that just refunds from the scholarship money?

It's just a little different each time. The school that he's at.

He has a.

Ta ship, and so he gets paid a monthly fee or not.

Whatever salary for.

Nine months of the year. Then he has some scholarships that are set and then some that the school... It's almost like surprise scholarships.

I don't really know why. There's a.

Letter he signed at the beginning of the year.

But we always end.

Up.

Getting a little more than what's on the letter. We don't really know where it's coming from. Okay, but does the money go into your budget or does it need to be going toward school?

That is.

On top of what.

We pay.

For.

The school.

The 5,000 is what we get after paying. Okay, so it's just a credit back to you. Yes. Okay, and how often did you say? Every quarter, every couple of months?

That's right. I would say three.

Times a year. We get the scholarship. Three times a year, and it's anywhere between $3,000 to $5,000. Let's just keep that on hold in our minds right now. I'm not going to add it to the budget just yet. Okay, so $7,500 a month. If you haven't downloaded every dollar, which is our budgeting app here, that's your homework for getting off the phone today. Do you already have it or no?

Yeah, I have the free version.

Okay, I want you to go to ramseysolutions. Com, and I want you to buy the book. Money is not a math problem. It's $10. But when you buy it for $10, you will get three months of every dollar premium for free. That's a backdoor way to get every dollar premium for free for a lot cheaper. Okay, that's the homework. Because on premium, this is what you need. Premium Features has something called paycheck planning. Basically, what you do when you first do your budget, you just go through and you assign every single dollar until it says you've gotten every dollar budget in green, right? Okay. That's what you do first. You're just assigning every single dollar. Once you've assigned every dollar with a category like this is for gas, this is for the mortgage, this is for groceries, it wants you to use every single dollar. When you've used every dollar, it'll say up there in green, you've done an every dollar budget. Now, that's step one. A lot of people stop right there and they're like, All right, I did my budget, winning. Then they wonder, Oh, my gosh, why am I still overdrawling? Oh, my gosh, why do I still not have any money?

It's because they've left out a very crucial step. I want everybody listening to remember this. You have got to plan your paychecks. Some people call it cash flow planning. In every dollar premium, it allows you to do that. All that is, Amelia, is you're going in there and you're saying, Okay, I've given every dollar an assignment. I've told my money what to do. Now I have to tell it when to do it. I've got to set the dates because here's the thing. You might get paid on the first, but you don't know, do I have the money to pay the rent, the mortgage, the car payment? If you don't know, you have to plan it out. Otherwise, you are going to be overdrawing even though you've made a budget. Does that make sense?

Yeah.

Okay.

Can I jump in with a quick question? Come on, Kim. Amelia, I'm curious, are you guys double income?

Yes, for nine months of the year.

He's making about 4,000.

I'm making anywhere from.

3,500 to 4,000.

What industry are you guys in?

I'm a teacher and then he's a TA at a university.

Right now. The reason I'm asking this is I'm just curious, what does upward mobility look like for you guys financially over the next 24 months? Think two years.

Well, to be honest, the next step that we're hoping to take.

He is.

About to graduate. We have about six months of our current situation.

Where we are.

Trying to save while we're making more money so that when we move to.

A new.

Location.

We can have that emergency fund and then have our.

Down payment for a house.

Same area, though, Los Angeles?

We're moving away, yeah.

Okay, but here's my question, though. I appreciate that. Jade gave you great budging advice, but I'm just curious what the income increase potential looks like over the next two years. Because I've got a suggestion, but I'm curious what that… Are you guys going to see some raises? Are they minimal? I got about 40 seconds. Tell me real quick.

Minimal to pay.

Decreases, probably. Yikes. Yeah.

I had a feeling. I could say you guys need to be making some side hustle income, but the point is, is that you're just...

You're never... You're a rat in a wheel.

I just feel like we got to make better decisions where we live.

Man. Can I.

Just say that? Yes, Ken. By the way, everything Jane said is spot on and you can win with what... You guys have had months where you should be winning with good budget, so she'll help you. But I also got to go, It shouldn't be that difficult. Maybe we should teach somewhere else. Just a thought. This is The Randy Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warsaw joins me. The phone number is triple-8-825-5225. Our scripture of the day comes from Proverbs 18:15. An intelligent heart acquires knowledge in the ear of the wise seeks knowledge. Our quote from Abraham Lincoln, I do not think much of a man who is not wiser today than he was yesterday. All right.

Shots fired.

Ape, dropping the wisdom. Of course, there are so many quotes out there from Abraham Lincoln. Yeah. By the way, hold on, you just said shots fired. He was.

Salty in that quote. Too soon.

Too soon. He died by an assassin. That's what I was just...

You just went- Pardon the pun.

Yeah, he got shot in the.

Back of the head, Jade. Listen, I was about to say he was giving someone the smoke on that, but that's probably too soon as well. That's the.

Same thing. I love that you were shots fired. It took me a second. It was like a delayed reaction.

For me, too. It wasn't on purpose.

We apologize, Dave. Moment of silence. Okay. All right, to John, we go in Detroit, Michigan. John, how can we help?

How's it going? The company that I work for is a union company, and I'm a part of the union as an employee. We're negotiating our contract right now, and things aren't going great, so there's the possibility that we may be going on strike. I'm on baby step two. I knowI know based on what I've heard from you guys that maybe I should pause the baby steps and start saving cash for the possibility that I can't work. But I don't want to do that. I want to keep the snowball rolling.

Which tells me you've thought through this. Is there any a stipend? I know I'm not super familiar on unions, but I know that many unions will have a fund for these type of labor negotiations. My question is, do you have that? What would that be financially? How much of that? I'm struggling. How much of a percentage of that would it be your normal pay? Is that a pay cut? Walk us through that.

Yeah, it's a huge pay cut. It'd be a very small amount of money, just a few hundred dollars a week for gas and groceries.

So when you said, I don't want to pause the baby steps, I want to keep going, do you have a plan? Sounds like you do.

Yeah. So what I was thinking was I was going to bump my credit card up from its current position and pay on that. Then if, worst-case scenario, I do go on strike, I would have the liquid funds in the credit card if I had to.

No! You know what? John, did you really think- I want to.

Keep paying.

No way, John. Okay, you're playing games. Let's talk about what we really could do. Because I feel what you're thinking—I'm not going to lie, I get what you're thinking. On some scale, somewhere else, it makes sense, but on the Ramsey scale, it's bananas. Let's pull it back. My question for you would be, of course, I get it. You want to keep the Baby Step 2 snowball rolling. You don't want to lose momentum. If you do go on strike, are you allowed to work another job? Or can you not do anything?

I could work another job. I would not get that stipend pay unless I am-.

Yeah, but it's.

A payment of the line. Yeah, but it's a stipend.

Pay is not aligned. Yeah, but the stipend pay is not aligned. How much do you make? What's your take home?

Our household income is around $58,000.

What's yours, though?

Thirty-six of that is mine. That's what I budget. I budget on the low end. We're on the irregular income side. I'm on track to make 120 this year.

In the household. What work do you do that you would be possibly going on strike for?

It's manufacturing and distribution.

Okay. What I would do if I were you is I would start researching other jobs that I could pivot to to make up, I mean, to make $36,000 a year. It's three grand a month. Yeah, that's three. I mean, you could literally get a management position at Chick-fil-A and make that.

Well, I agree with Jade here. I think your play here is to get aggressive. Do you have an idea of the timeline as to when the strike would happen?

No, I'm not certain. We're not meeting with the company again for another month.

Yeah. Without saying anything, I pay attention to the stuff every day. I know what you're talking about. The can could get kicked down the road even a little further. It's going to be a month before they even start talking again. I think realistically, John, tell me if I'm wrong, I don't mind being wrong, that you've got about 90 days at least before anything were to happen in this scenario. Is that fair?

Yeah. That's why I don't want to pause the baby steps.

I want to keep saying it's wrong. Nobody's telling you to. We're not talking about pause the baby steps. We're talking about what do we do financially so that you can keep going in the midst of this strike, because I think that's the issue. You could keep going to baby steps if we have an income plan. I think there's two things to look at. I'll pivot quickly from this. I would be asking myself, if I were in your shoes, how can I make three grand a month using my skill and experience in the Detroit area so that I could start doing that now and I'm stacking that up. The second question I would be asking is, since it sounds like you budget really well, could you make it through a two or three-month strike on your wife's income only? What's the answer to that?

No.

All right, then. Now we know we got to focus on step one.

Yeah, I think it's all about having an income plan.

But if he doesn't, should he pause the baby steps? I think he should.

But why wouldn't he? That's my thing. I don't think that not working for two months is an option. I agree. Or three months is an option.

I agree. But I'm saying what I'm doing is I'm giving a full look at this thing. If he can't find the work and he goes on strike, then we would tell him to do that. I'm just saying fundamentally, when we tell people to pause baby steps is a true emergency situation where you've got to just take care.

Of business. I don't.

Think he's going.

To have to rely on that. You said he's got 90 days.

I think so.

I would say that if we're two months in and there's still not a plan of what you're going to pivot to, then maybe stop and pile up some cash. But I don't want that to be an excuse. I don't want there to be any excuses to not find this income. Does that make sense? I'll agree 100%. I don't want you moving the credit card in your debt snowball. Don't do that because that's going to tempt you. You've already been tempted to have that as your fallback plan, and I just want you to erase that. You need to pull a straight-up like Men in black and just clear that from your memory of.

Ever thinking- I like that reference. -of everything. You know what I'm saying?

I don't even want you thinking that the credit card could possibly be an option, John. Do you know what I'm saying?

Yeah, my only thought was that would be a liquid place that.

I could continue to pile of money. Think about what you're saying.

You got to.

Stop saying liquid. Think about what you're saying. Think about this now. You're so intent on wanting to keep moving forward in your debt snowball. If you're wanting to go forward, you cannot solve a problem while simultaneously creating it. You can't get out of debt while still having debt as an option to lean back on. You'll never go forward. So keep the intensity on wanting to keep the debt snowball going. The only way to do that is to say debt is not an option. Let me tell you something, John, when you do that, you will get so creative and you will start having ideas come out of the wazoo because you don't have a choice. Necessity is the mother of invention. That's why I said, Am I be that thought? Because when you do that, Okay, I have no choice. I have to provide for my family. You will go out, because I can tell you're a hard worker. You will go out and do whatever it takes to bring money in for your family when you take that off the table.

John, what is your skill set?

Equipment, service, so I'm a service technician.

So mechanical work?

Yeah.

My man. I'm asking you straight up. Is there not a lot of stuff that needs fixing that you can fix in the greater Detroit area?

Yeah, there is. It's just finding who wants me to.

Go fixit. John. Everybody. Sounds like there's some really nice money to be made. What if, John, what if we start today, tonight, contacting people, putting the word out. What if, John, you make an additional three grand a month over the next three months and the strike doesn't happen? I like it. John, are you with me?

I am, yeah.

You remember the old phrase? You sound like a guy who understands all these old phrases that they all make fun of me for saying on the show. Remember the old, Take the bull by the horns? You know that phrase?

Yeah.

Come on, John. Grab that bull by the horns and wrestle it to the ground.

I know.

That's right. Get after it. This strike should not be a blip on your radar screen if you approach it that way. Do you agree with me?

Hopefully, it never happens.

Hopefully, it never happens. Yeah, but that's right. Who cares if it does? We got a plan. Jade and I just came up with a plan that doesn't matter if it happens or not.

We're really excited about it.

Well, I'm fired up. Let me tell you why I'm fired up. Because most of these strikes never last very long at all. It's too expensive. They'll happen, but they don't go very long. If he has a plan for this, he ends up coming out on the positive side with cash, which means we dump all of that right into the baby steps and we move on. John, thanks for the call. Jade Warsaw, thank you. Great show. Thanks for harmonizing with me. I got to call my mom. She's going to be so proud. James Childs, our fearless leader. Thank you, sir. This is The Ramsey Show.

Hey, guys, I'm Rachel. And I'm George. And you've probably heard our voices before on The Ramsey Show. And do we.

Have a surprise for you?

Yep, we have our very own show, Smart Money, Happy Hour, where we talk about pop culture, current events, and of.

Course, money. George, it's a great show. And what else do we talk about? So much, Rachel. Not enough, and yet too much. We talk about guilt tipping because tipping is out of control and I won't stand for it anymore, which is why I'm sitting. I'm glad.

You were.

Taking such a stand. And we also talk about something else I'm passionate about Disney Adults. Oh, George. Why is it a thing? Listen, some adults still find the magic. Sure. We also talk about toxic money traits and girl math. If you don't know what those.

Are, you have to listen to the podcast.

Yeah, there's a lot there, you guys. It's pretty fun.

We keep you relevant is what I'm trying to say. We help you out.

So pull up a chair.

To the happy hour you wish your friends were having. We promise you won't regret it. And if you don't have friends, we'll be your friends. We will. We're great friends. So make sure to check it out.

On.

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