
There’s Always a Way out of a Financial Spiral
The Ramsey Show- 61 views
- 14 Jan 2025
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Ken Coleman & Jade Warshaw answer your questions and discuss:
"Should I buy less healthy food to save money?"
"What should we do with a large financial gift?"
"I just started college and I hate it,"
My sibling got an inheritance and I didn't..."
"We're $500k in debt and the interest is killing us"
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Welcome to the Ramsey Show, America. Thrilled to have you with us. We're here to help you win in your life. We want you to win with your money, win in your professional life, and win in your relationships. Alongside Jade Warshaw, I'm Ken Coleman. The phone number to jump in is 8888. 825. 5225. 888-825-5225. Let's get to the calls. You ready to go, partner? You got a little something in the throat there.
A little for clemed, but I'm ready to go.
Cleared the throat. Let me clear my throat, she said. There it is. We're already getting it started. We're going to have a lot of fun today, by the way. Just a sheer warning to you. We're going to have fun while we coach you up. Lauren starts it off in Knoxville, Tennessee. Lauren, how can we help?
Hi. I just have been tracking I've spent my budget for the last year asking friends who have similar families as me living in the area how much they're spending on groceries every month. I am over by a couple of hundred dollars every month. I've tried to bring it down, but I just am not willing to compromise on certain healthy foods. I've already made several compromises the past couple of years. I just want to know, how much should I be willing to compromise on healthy food in order to keep a budget?
Look, you call the right place.
This is a great question. I can't think of a better person to be sitting beside on this one because I'm in the middle here. You are. I don't know where I'm at on this. What are you going to say? I'm going to lean on you.
I'll tell you what I think. First off, I want to know what your numbers are. I want to know more about you before I go into it. It's not going to change my answer. I just want to know, what are you spending on groceries? How big is your family? Family of four?
Yeah. So we are a family of four. I've got a five-year-old... Sorry, a family of five, new baby. He doesn't really count. So family of five, I'm spending $1,300 a month. When we first moved here, I was spending it at a really nice store, and when that got too out of hand, I moved down to a store that didn't have as good of quality stuff. When that got too out of hand, I moved to a different one. So for some reason, I just can't kick the $1,300 a month.
Okay. What baby step are you on to?
We don't have any debt except for a mortgage, and we've got some savings and return.
Hold on. Spin 1,400. Hold on.
Okay. Don't get too excited over here. I'm just saying- This is clean food. What's your income? Combined income.
Just barely, we moved up to 120.
Oh, yeah. Listen. It's not an issue. It doesn't change my answer in the way that, A- What is your official declaration? My official stance on this is when you're working the baby steps, you don't sacrifice your health long term for it. Getting out of debt is not excuse to eat crap. It's not you eating ramen noodles every night because we got to live, Ken. We can't be out here with high blood pressure and the gout and all these things that holding us back.
I love that you dropped. I love the gamut. High blood pressure to gout. I mean, you covered it all.
I'm saying there's a logical point where it becomes unhealthy. I agree with you.
But let me ask you this because you're the queen of cutting costs, and you eat as clean as anybody that I know.
I I'll try my best.
I get to tell. This is my statement.
Okay.
Of the people that I know, I don't know anybody that eats cleaner than you. Okay. All right? Now, here's the question.
Yeah.
Is it worth digging a little bit? First of all, she's fine on margin and percentage there.
You're totally fine. 1,300 is good. Before you get into this, Ken, let me just back you up, Lauren. If you look at the FDA standards, for a family of four, it's usually somewhere between $800 and $1,200. Now, they break it down on It's almost like a good, better best for a less expensive budget, a median expensive budget. For people who can spend a little bit more, that's the way they break it down. For the folks who can spend a little bit more, it's usually between $800 and $1,200. That's right.
You're right there. Here's the question I have. Lauren, I'm asking a question on your behalf, if you'll allow. Okay. If you were going to sit at Lauren's table tonight and you were going to do an audit. Where would you be looking to try to shave money on what is already a reasonable thing for healthy food? I'm not trying to get you to endorse anybody. No. But is it online? Are there different brands? What would you be looking at to help her so that she can double down and go, All right, I got some Jade hacks here to maybe see if I can save a little bit. It doesn't sound like she might be able to.
I'd be looking for the convenience items. For instance, most people are looking to... Most people, if they have the money, they're looking to save time. That's the next thing. It's like, I can spend the money in order to save more time. Lauren probably has spent more money to save time. I'd be looking for things that are prepackaged, like snacks. When you have five kids, you want to just be able to throw the things in the kid's lunch. You might buy the snack things that are prepackaged, the prepackaged things in nuts, the prepackaged, that deal, as opposed to, Okay, I'm going to buy the big Sam's Club package of cheesy smiles or whatever.
Like 300 carats.
You know what I mean? I'd look for convenience items I'd then look for in the freezer section, so I'd be looking, Okay, is she buying frozen waffles to get breakfast on the table in the morning? That's where- Are frozen waffles healthy, though? There's some that are better than others.
Lauren, do you get frozen waffles?
No, everything I make is generally pretty homemade. We have chickens, we do sourdough.
But for you, you're probably splurging in the area. I'm just guessing you're probably buying more non-GMO, more organics, higher quality. Where's your biggest expense?
What would you say is your biggest expense?
We stopped doing it because it was so expensive. But I really, really care about buying from local farms and dairies because I like how they treat their animals better, and I think that the chemicals and things aren't in there as much. Yeah, I think- But we stopped doing that because it was $10 a gallon.
Yeah. What you're probably going to find is it's their trade offs that you're making. Even when Sam and I were in $460,000 of debt, back then, I would spend $60 a week on groceries. Remember, this is back in the day. But what you're talking about, everybody has a set of values that they care about, whether it's I don't want the red 40 and the yellow fives, or I'm trying to avoid the dyes, or I want to buy local, or I care about clinics. You might not be able to afford to do all of it, but if you say for meat, specifically, I really care about that, and because of that, I'm willing to skimp in other areas, it's a trade-off.
But are you saying that Lauren can go back to that same budget? Lauren, this is why you called. I'm I'm hearing Jade's okay with that number.
Once you're in baby steps four, five, and six, and you're able to not be in that balls to the wall mode, I think that as long as you're doing the things that cause you to be a financially responsible adult, you're investing 15%, you're putting extra on the mortgage, you're putting away for the kids' college. If you're still doing all those things and you have the margin and you say, Yeah, I'd love to be able to splurge on this milk from next door, whatever, the eggs from- Ten dollar a gallon milk from farmer Roy. I don't know. But I'm saying that's what... Because some people will go out and go to a really nice meal at a restaurant, and they'd rather do that. At this point, it's really about how you enjoy spending your margin and what the value set is for your family.
You guys have worked hard, Lauren, to have this margin to then eat for life. I like this. This is really fun. I got to tell you, I'm telling Lauren, I'm telling you, I'm telling the entire audience. Tell us. Guess what I signed up and Stacy for in February?
Wall Pilates.
A sourdough class. Oh. I'm going to go learn how to make sourdough, and I get to come home with the mother. Is that what they call it? Did I get that right?
In more ways than one, Ken. Well, Two mothers.
Come home with two mothers. How exciting is that? I'm so excited. You and Sam got to come over. Guess what I'm going to make for you guys?
I'll take whatever lofi you need. Sourdough pizza.
I'm going to make it on my big Kamado Joe for you.
I'm going to hold you to that, and I want all of it to discard.
I'm learning how to make salad.
That's good, Ken. Keep me posted. Blog about it.
No, but I'll tell you about it. All right, quick break. We're just getting started. We're having a blast. We're going to help you out. That's probably one of my favorite calls that I've had in a while on the show. That's fun. Really interesting. Don't move. We'll be right back. This is the Ramsey Show.
Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something?
Well, I used to be one of those guys. I didn't even think about it. One of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. I immediately went and got term life insurance.
That's a gut punch.
For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them, and they don't know what to do next. Terrifying.
You're going to have a crisis here. You got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander. Com or call 800-356-4282.
Welcome back to The Ramsey Show. Thrilled to have you with us alongside my friend Jade Warshaw and Ken Coleman. If you're ready, you're finally ready. Some of you have been listening for a long time, some of you for a little bit, some of you brand new. Welcome to all. But if you're ready to We're going to manually make change in 2025. This is the year. You said, All right, we're making changes. This is a must. January 23rd, we've got our free livestream, Take Control of Your Money, hosted by Dave Ramsey and my friend Jade Warshaw. Jade, I I feel like I shouldn't talk about you when you're right here. You guys were meeting. I walked by the other day, and I heard you guys having a meeting. This thing is on the rails. It's ready to go. It's out of the oven. It's baking. What's it going to be? January 23rd. Take control of your money. You and Dave got some fun cameos as well. Why should people come to this?
This is where you get the how to. This is where you get the practical steps. Jade, I'm ready to do it. Just show me how, and I'll take the all. That's what we're going to do. We're going to show you how to get control of your money once and for all in 2025. We're going to walk you through how to make that happen, how to do a budget, how to pay off your debt. We'll talk even a little bit about investing. This is an event you don't want to miss. To wrap it all up, we're going to do a Q&A at the end. Rachel Cruz is going to join us, George Campbell is going to join us, and we're going to take your questions from you live and help you out right where you are, meet you right there.
Now, they should be charging you fine folks for this, but they're not.
It's a free.
It's a free event, and this is really cool. When you sign up for this free event, you also are entered into our cash giveaway that night, or at some point, five people. Yeah, that night. Okay, five people who actually attend this free event, this livestream event, will win $4,000 each. That's a lot of money. You sign up at ramsey solutions. Com/livestream, ramsey solutions. Com/livestream, or you can also click in the show notes to go to this event. I don't know why you wouldn't do this, because for some of you, you want to kickstart your goals. Coming to this event will do this. However, for large- Listen, if I I'm going to slide $4,000 over here to you right now, Ken Coleman, what are you spending it on?
What's it going towards?
Well, if you're sliding it over there, maybe it's- It's Dave's money.
I'm just sliding it your way.
Maybe it's a fun night out, maybe try to squeeze in a budget weekend. Trip.
Okay. Yeah. I like that.
Maybe I spend it on Valentine's.
All right, Stacey Coleman. Listen, let me know how it goes.
I mean, that's a pretty fun little trip.
$4,000 is nothing to sneeze at. That could be something that pays off your debt. That could be- That's right. I'm not in the baby steps. I'm finishing out your- Of course.
That was my answer.
Of course. That could be you finishing up your emergency fund. Maybe you're in baby steps four, five, and six, and this is what will get you over to do your little kitchen remodel. It's worth it. Sign up. That's all I'm saying. All right.
Cierra is up in Atlanta, Georgia. Cierra, how can we help today?
Hey, how are you all doing?
Good. How are you?
Doing good. Me and my husband, we're actually in Baby Step 2. We just learned that his parents have money put up for us, so we're about to be able to wipe out all of our credit card debt. I've heard you guys say, just put the cards up or shred them. Do we just let them fall of our credit, or do we close them? We're both a little iffy on that part.
Cut them up and close them.
Do the both.
Done. You don't need them anymore.
How much money is this that you're getting?
Right now, it is 14,000, but then they're going to add an extra 4,000 on top of that.
What's it for? Why are they giving you this? I mean, that's a blessing.
It is. It definitely is. My husband has the company that he works for. He has got his parents' company in to do some work for the company that he works for. They've been doing really well working together, and so this is just a thank you to him.
Nice. Thank you. Wow. Here's Here's what I want to caution you about. I love when people get big sums of money, whether it's an inheritance or a gift or just something goes their way. But the cautionary tale here is there was a habit that got you into 14,000 of credit card debt. We want to make sure that we're examining those habits and what caused that to happen, because while it's really great to get a gift like this and be able to pay off that debt, the worst thing ever would be to not change your habits and over time, accumulate that debt again.
Right. The only credit card debt that we have is about $8,000. On top of that, we have two car loans, a side-by-side loan, and then personal loans. The rest of that will flow over into our next one, like the baby steps. We're going to make all those credit card payments and just roll them over.
See, now, in this case, and I love your call out, Jade, but I think in this case, Cierra, I'm commending you and your hubs for putting the entire 18 grand towards the debt snowball because that in itself is pain.
Oh, yeah, that's pain.
When someone gives you 18 grand, you go, and you got to go, Oh, there it goes. And so I think- Man, you're impy. They'll feel it. They'll feel it. And You guys are on your way. This is a real blessing. I mean, Jade chose the right word there. This is such a kickstart to this. What will be left in your debt snowball once you apply the 18? Run those numbers.
What's going to be left is about $127,000. But that's- Hey, can you- That includes the house? No, we rent.
Oh, okay. Well, then can you tell us about the cars and the side-by-sides? Maybe we can give you some more help that you didn't come for.
Yes. The side-by-side, we still owe about $20,000 on. What's it worth? My car. I have no idea. My husband deals with that.
What about the cars?
My car, we still have 32 on it, and it's worth about 23. His truck, we owe 45. And I think the last time he checked, it was worth between 18 and 23.
Oh, man. Why? Such a hit on these vehicles. Yeah. Is that rolling negative equity? What's going on with that? Is that what happened?
Yeah, that's negative equity right there. That's why we haven't gotten rid of it.
Listen, I would... One thing I would consider before you pay off these credit cards, I might consider getting out of these vehicles because tell me the payment on both of them.
My truck is about 5:50 a month, or my car is about 5:50 a month. His truck is about 8:17.
Man, oh, Man, let me tell you something. That's a $1,500. I would consider getting out of your car, that $10,000 that you're upside down. I'd pay it and use whatever cash you have left or even less to get a beater for you, five or six $550,000, and then you cleared up $550 you have a month, and you're out of that debt completely. Is $550 more than what you're paying on those credit cards combined?
So monthly on all the credit cards combined, it's about 44.
I'd do the car deal.
I'd get out of that. You put all that money towards the car?
I'd get out of that upside-down vehicle because it's just going to continue to go down in value, and that gap of being upside down is going to get wider and wider. So I'd make that deal and get out of that car, and then I'd be really thinking about how to get out of his. Look for private sale to see what it's worth, private sale, and see if there's anything you can do to close that gap. And it might be the side-by-side. Selling that side-by-side, selling that by side, if you can get something for it, it might help you close that gap. But these vehicles are what's killing you.
Oh, yeah. I know it.
I know you do. You're like, When you told me 18 for this $45,000 truck, that's shocking.
Yeah, it's somewhere in between there. He's looked, I've looked, and I'm like, I don't know what to do. I was like, We're going to have to pay out more.
Yeah, you might end up having to just write it out and pay for it. But check on the side by side. Make sure you're checking Kelly Blue Book again on that truck for private sale, just to see. Because at the end of the day, here's the way you want to filter it through your brain. Ken, if I have a loan for $45,000, but I can come out with a loan for $18,000, I'd rather owe 18 than 45. When you're thinking about, do I take a loan to get right side up on this vehicle or to get out of this vehicle, it could be worth it to you. It's not making it gone completely, but if you can do that and still have another 5,000. Would you rather owe 25 than 45? Now you got yourself a $6,000 beater and you're out of the vehicle. That's the way I want you to filter through this math. It's not always going to equal zero. It's just going to be, is this a better situation for me?
Yeah, to lower that monthly so that you can put more money in the snowball. That's what you were prescribed in there. That's right. All right, very good. All right, quick break, and we'll be right back with more of The Ramsey Show.
Hey, what's up, guys? It's Jade Warshaw, and I'm just going to cut to the chase. If anyone knows about paying off student loans, it's me. Okay, my husband and I had $460,000 of debt, and $280,000 of it was student loans, so I know the pressure that you feel when you have that debt weighing you down. But I also know there's a way out because we did it, and you can, too. Getting out of student loan debt starts with taking control of the situation, and Laurel Road can help. Laurel Road offers a free 30-minute consultation with a student loan expert to go over your repayment options and help make a plan based on your specific situation to get your student loans paid off fast. Okay, truth be told, refinancing is not the move for everyone, and my advice is that you should only consider it if you can get a lower rate or a shorter term. But if refinancing is your next move, I think it should be with Laurel Road. They offer low competitive rates and terms that could help you pay less over the lifetime of your loan. Plus, they offer interest rate incentives like an auto pay discount.
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Alongside Jade Warshaw, I'm Ken Coleman. This is The Ramsey Show. We're here for you. We want to help you win with your money. We want you winning in your professional life, and we want you winning in your relationships. 888-825-5225 is the phone number. Let's go to Boise, Idaho. Bryce is joining us there. Bryce, how can we help today?
Hey, how are you doing?
Good, Bryce. How are you?
Good.
How can we help?
Last spring, I graduated from high school, and I worked throughout the summer and then went straight to college due to some family issues. I didn't want to be home. S I'm starting college. I'm past my first semester, and I'm absolutely hating it. I'm not sure I really want to continue going to college, and now I have debt, and I don't know what to do.
Okay. How much debt do you have? I took 3,500 in subsidized student loans and $2,000 in unsubsidized loans for just this year, plus some scholarships.
I have a total of 5,500 in student loans right now. Okay. It would more than double next year.
Right. Well, I don't think there's going to be a next year. Don't you agree? I mean, we. I want to encourage you first. $5,500 in student loans, cake. Okay? Not fun. I'm not minimizing how it makes you feel. But in the grand scheme of things, you being able to pay off $5,500 in the near future, extremely doable, and we'll talk you through that. I want to talk about the transition. I heard you say that you went to college essentially just to escape a really not-so-great family life. True? Yeah. You made this decision on your own. Is that also true? Yeah. All right. You can also make the decision to leave on your own and no one's really giving you grief about it or it doesn't matter, correct? Yeah, I got to get grief for it, but it's not really something I care about. Not a big deal. In other words, your mom and dad didn't pressure you to go to college, yes? No. Okay, great. I'm a big fan of not going to college in two instances. One, if the degree isn't the only way to do what I want to do, or if the degree isn't the best way to do what I want to do.
In this case, you're presenting to Jade and I as though you don't know what you want to do, but I got a feeling you might have some ideas. Is that true?
Some, but not too positive.
All right. Give me the most positive idea you got. The top of the list. We know it's not your favorite list. We know it's probably not going to stay at the top of the list, but I'm just curious right now, what's at the top of the list? Let me put it to you this way. I really want to know what's at the top of your list is. Then, okay, if we were guaranteed we'd be successful at it, would it still be on the list? I'll ask you that in a second, but I'm preparing your brain. First, what is at the top of your list?
Some Flyfishing Guide up in Montana, probably.
Flyfishing Guide in Montana. Fantastic. All right. Now, let's ask you that question. If I guaranteed you, and a snap of my fingers, you were going to be very successful at being a Flyfishing Guide in Montana, would you pack it all in right now and head that way, or would you still have questions? No, I would leave everything and go do that. All right. Now, so then tell me, Then what you meant by, Well, I got a list of ideas, Ken, but it's not real positive. Is it that it's not positive because you think it's a long shot, dare I say, a fantasy to become a successful fly fishing guide? Is that why you said it wasn't positive? Yeah. Okay. What makes you believe that you can't be a fly fishing guide in any state but Montana?
Just oversaturated. There's a whole bunch of them.
I want something I can do is full-time in a career, and they don't pay too good. Okay, great. Great answer, young man. Now, why is it that fly fishing is at the top of the list? Describe why. Give me 10 seconds. Don't make it sound pretty. Just tell me your guts. Why is that attracting you? I've been doing it for five years, and it's something that my grandparents got me into, and it's just one of my favorite things. But would you say But you also love being outdoors? Yeah. Would you also say that the idea of wearing a white-collared shirt and khaki pants and working in a cube sounds like misery? Is that true?
Definitely. All right.
You love nature, hunting, fishing, I'm guessing. Is this true? Yeah. All right. You know what I would be doing? I love that you've already gathered information that the fly fishing guide industry is pretty saturated, and for a variety of reasons, which we don't need to discuss, it's very hard to make a However, would you say that there are multiple ways for a young guy like you who doesn't need a ton of money to get in and get started in other, and let's call it field and stream type stuff, to borrow a magazine title, whether it be the hunting or expeditions. But anything that is outdoor, whitewater rafting to fishing, to hunting, does it have to be fly fishing for you to get the same thing you get out of fly fishing? Yeah. Yes, it has to be? I would say so, yeah.
Why? Can I ask why? It has to be specifically that.
I like being out in the woods, but everything I do, just every time I see water or something. I just have a connection to that.
I don't really have. You're telling me you couldn't get involved with anything else on the water in some type of stream or lake or something like that?
Can I cut in?
Yeah, I know what you're thinking.
Go for it. Can you cut in? This might be something that came with age, Bryce. I'm an old head. But let me tell you, when I first started in music, I knew I liked entertainment. I knew I loved being on stage, and I knew I had a voice. My options, I didn't know all the options out there, but I thought that I was limited to one or two things that would make me happy in that career. Then something that happens, and you probably have the vocabulary for this, but what I found is as you start walking down the road and you turning those door handles, other opportunities present themselves, and you try them out and you realize, Oh, gosh, I never would have known that this would scratch that same itch and really be a better fit for me down the road. I'm just saying you do want to open up your your eyes a little bit to other opportunities.
Yeah, Bryce, you're going to have to take some advice from your older bro and older sis on this one because we've been down this road. I understand at this point in your life where you go, that one thing I really, really love is fly fishing. When I'm doing that, I'm at peace. By the way, that can still be true, but it might be a hobby. It might be a hobby. It might be a little side hustle. But if I were you, I would head West, young man, and I would start working for an outfitter. I'd start working in that industry, fishing, because part of me wants to go, I think you could be pretty happy if you head down to Florida and you were on one of those deep sea fishing boats, and you're helping people pull a big old giant, whatever, out of the water.
Deadliest catch.
Yeah.
Well, that's next level.
You're going to scare the boy. You're going to scare him. But, Bryce, I think you have to... Here's my point. To summarize this, yes, I would drop out of college. You don't have the money for it, and you don't have the need for it. You don't need a degree to do what you want to do. At this point in your life, you need to be away from family anyway. I think there's some wisdom that you've got. I think you've shown some maturity there. I would go explore, and I would jump from... In this case, I'm fine with you jumping from job to job, thing to thing in that industry so that you figure out, because Jade, you would have never guessed in a million years that you would have gone from where you went, artist, volleyball player in college, you're all over cruise ships, and now you literally co-host the second largest radio show in the world, one of the top podcast in the world. You didn't see yourself sitting at this desk ever. It was never in your bingo card. Never.
We evolved. I thought I wanted to be a recording artist, and then I got an opportunity to work on Cruise Lines, and I tried it, loved it, fell in love with it. What did it do for you?
Why would it help him? You see, you went on cruises and sang as a professional.
Yeah, I did, and I fell in love with it, but I also saw a lot of needs in the market there, and it sparked an idea to start a business. It's the business my husband runs to this day. It's his passion in life. Never would have gotten to that. That It helped me find The Ramsey Show, and it's what I'm doing today. We evolve as people. It's great to take that first spark and run with it, but you never know what it'll grow into.
And, Bryce, hear what she just said. You don't have to start a business tomorrow or next year. Just go work and go work in that world that you know you love. It's similar to fly fishing. Don't limit yourself, but get in that area. I promise you, with connections, it's going to take off. Hang on the line. Christie, let's give them a copy of my best-selling book, The Proximity Principle. This is a great read for you, young man. This is The Ramsey Show. Remember the good old days of the internet before it was a privacy nightmare filled with spammers, scammers, hackers, and fraudsters? Simpler times. Now, I don't have a time machine, but I do have the next best thing, delete me. Think of delete me as your online bodyguard, helping to protect you from the risks of online scams and data breaches. Here's how they do it. They scour the web to find and remove your data from these sketchy data broker websites. And this includes your name, your phone number, your email, your address, and more. And delete me will send you a detailed report of what they did and how much time they've saved you.
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There's two ways to participate in this. Text the word survey to 33789. That's 33789. Text the word survey to 33789. Or you can go to ramsey solutions. Com/survey, ramsey solutions. Com/survey, or we've got a link in the show notes. If you sign up to take the survey, you'll be entered to win a $500 gift card. That is our appreciation to you. All right, to the phones we go. Mikaela is joining us now in Salt Lake City, Utah. Mikaela, how can we help?
Hi, how are you guys doing? Good.
How are you today?
Good. My question is, we recently found out through my sister-in-law, my husband and I, that there is inheritance money we did not know existed through my husband's parents who got it from his grandma. He's one of nine siblings, and all of them that we know of have used that and money for paying for grad school. We did not know this was available. We paid our way through grad school. My husband graduated about three years ago. We are in between Baby Steps 3 and 4, trying to save up for a house. We feel a little… I don't know.
No, you feel a lot. Whatever you feel, it's a lot.
Wait, are you in the will and it just wasn't distributed to you or were you not in the will to get it?
We're not sure. It just slipped through my sister-in-law this past weekend on a family trip that grandma's inheritance money paid for her husband, my husband's brother to go through grad school. We asked, Oh, is this the same for all other eight siblings? She said, Yeah, you guys didn't know? I'm like, No, we paid our way through grad school.
Who's the executor? Who's in charge of it?
Probably, I would guess my father-in-law.
Okay. Have you gone to him? Or, well, not you, but has your husband, because I feel like this is his battle, by the way. Has he gone to the grandfather and said- No, to his dad. Yeah, to his dad and said, Did I miss something? Here's the thing, and can hold me back, but you can't go in entitled. You just have to I asked, you'd be curious, Hey, I was on a trip, and this was what I found out. I don't know, but it sounded like it was for everybody. If it is, I wonder if we were overlooked in some way. Can you give me more information?
I guess that was part of my question. We have not approached him yet, and my husband haven't, because I don't want to come across as needy or- Well, remember, you don't need to be involved in this.
This is not your deal. Your husband, now, if you got to give him a pep talk and fire him up and let him borrow some of your backbone, that's one thing.
Yeah, but you don't say anything to the in-laws on this.
Okay.
Because is it possible that the sister-in-law doesn't know what she's talking about?
It's possible. I guess that's part of the issue is they're quite a bit younger than us, and they own two properties. We are like- No, no.
I get all this. Everything we can- First of all, I don't- Save up for a house.
Wait a second. I detect something, and I'm not trying to call you out, but I detect the air of I'm not going to say jealousy, but I detect an air of we should have what they have or they shouldn't have all. Does that make sense? I'm not trying to I'm not going to put you on the spot. So let's talk about this then. Let's pretend that you said, Hey, we're not in the will. What gives? What if your husband talks to the dad and it's like, Sorry, Yeah, you weren't a part of this. What then would your attitude be towards it?
I think I'd be okay with that.
Okay.
No, you wouldn't. You would not be okay with your husband being the only sibling who didn't get some of this inheritance.
I mean, you'd at least have questions, right?
I would have questions, but I honestly don't think I'd have… I wouldn't ask any further.
Okay. Yeah. But I just want to call this out. I know you're It's going another angle.
You call it out, Kim.
I'm not saying you're wrong. I think she admitted that I couldn't hear her. But Mikaela, it's very natural for you to feel this way because your husband feels, though he might be wronged, When your husband or spouse, this goes both ways, gets wronged, we the spouse- We're on their side. We just really get affected. All of this is very normal. Glad you called us. We've already told you what we think, but your husband needs to sit with dad and soon and just ask questions. This is what my wife was told. Is this true? He gets to the bottom of it, and then you guys will have to deal with whatever that is. But make no mistake about it. Her comment about the younger sibling and what they have- That was telling. It's telling, but it's all coming from this one issue.
It is. I think that when you're in baby step two- We could use it more than them.
That's what this is.
Yes, that's what I'm getting at. When you're in a tough spot, you're looking around and you're just looking for anything you can hold to. I get it. I wasn't saying that in a way to be definitely not ugly towards you, but it's worth examining and going, Okay, to your point, what's my true feelings here? It's okay to have feelings. We then just have to make sure our response is the right way.
That's all I'm saying, Mikaela. I want you to feel okay to be angry. Yeah. Because if this is true, you and your husband have every right to be angry.
Ken, I've told you the story before. When Sam and I got married, his grandfather, there were stipulations on the will. He's allowed to make those stipulations because it was his money. The stipulation was, you got to marry someone else Jewish. And guess what? Jade Warshaw is not.
Really? Yeah.
Did you not know? What gave it away? No, I'm just kidding. But that was part of it.
Did he uphold that?
Did The grandfather? No, he did not get the money.
I mean, he stuck to his guns. The grandfather did.
Well, the grandfather passed away. What ended up happening later on- That's right. It's in the will. Yeah, it's in the will. But later on, his wife at the time said, I really like Jade, and we're going to make this happen. She amended it? They got amended, and not only for me, but the other cousins who decided not to go that route. How about you?
Hey, cheers to her, by the way.
Listen, I don't know if it was right. Dave might be like, No, keep it the way. The wishes are the wishes. Well, wait a second.
I don't know what Dave would say, but I'm not Dave. I got a strong opinion on that. If the grandfather leaves the money to his wife, yes, he had explicit instructions, but at the end of the day, he left it to her.
She was very- It's now hers. She was very solid on the fact that she said, If he had met you, he would have changed his mind. That's what she said to me.
I think she's right. But my point is, it's now her money. Yeah. She gets to decide what she's going to do.
That's facts.
Because he passed it to That's facts.
Yeah. I can understand, to your point, I can understand the feeling of having emotions around the thing. Tough stuff. Tough stuff. It's not easy. Yeah.
But in this case, and this is what I don't like for her, I don't like that Sister-in-law dropped that on vacation.
Do you think there was a little intent behind it?
Is that what you're saying? I don't know, and I don't want to go that route because I don't think that's helpful to Mikaela. What I What I'm saying is I would immediately go into the father if I'm her husband, because we don't know if sister-in-law knows what's going on with the nine other siblings.
You know what?
It's very possible- Or that's usually the eight other siblings.
Unless she knows of a reason he could have been withheld, which we didn't ask her. That makes sense to me. It's very possible he just got overlooked. I don't buy that. Whoever the executor is, just, you don't buy it.
Well, now that you say that, I have three kids, and I remember Well, I'm going to tell Stacy, because we had three under the age of three. That's happened quickly for us. Yeah, it did. I remember going as they got older, going, I'm glad we didn't have more than three. I don't understand how parents who have six, and seven, and eight, and nine, how do they do it? Now, I could see Maybe this happened. Maybe there's some money just sitting over there waiting to be collected.
Maybe he's the middle child.
I don't think so, though. All right. Good hour. Thanks for the call, Mikaela. This is The Ramsey Show.
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Welcome to the Ramsey Show, where we help you win in your life. We want you to win with your money. We want you to win in your professional life. We want you to win in your relationships. I'm Ken Coleman. Jade Warshaw is joining me, 8888-824. 828-825-5225. 828-825-5225 is the number. Let's start in Casper, Wyoming. Marissa is there. Marissa, how can we help today?
Hi, thank you for taking my call. My husband and I are working on baby stuff number two and realized that we might be paying some stupid tax. We started at $133,000 in debt about six months ago and have paid off $16,000 already. Way to go. However, my husband and I disagree about what we should do with our lease vehicle. Our original plan was to finish paying off our lease and then purchase it outright. That would be $42,000 in total. My husband thinks it's a good idea to get rid of the car by selling it back to the dealership and paying the difference of about $9,000. Doing this would help us get out of debt eight months sooner, but a more idea would leave us in a vulnerable state because we would only have my husband's old truck, which needs about $5,000 in work and has $440,000 miles. My question is, should we get rid of the lease car to get out of debt sooner?
Yes, but not necessarily with the idea of only leaving you with that old truck. I think it's a combination of both of it. You say if you finish paying out the lease in order to purchase it, is it an additional 42,000, or is that what it will be, have been altogether?
Yes. The 42 will be altogether. It'll be 26,000 after the lease period.
Okay. So you'll pay an additional 26,000?
Yes, ma'am. For a total of 42.
Then to get out of it, you will pay 9,000, but you'll be only left with a truck that's got 442,000 miles. What would it look like if you got out of the lease and then you got a second beater and paid maybe $6,000 for it? Now you're back to two vehicles, but you're still $10,000 less I'm just talking about on the extra portion of the lease, not the…
Okay. We reached out to the dealership. Originally, we tried to try one of the lease swap options. We've had the car for just a year, but we've already used $2,000 worth of miles because we planned on purchasing it. The dealership did offer us $28,000 to basically get the car back. Again, we would have to pay the $9,000. We do have $9,000 saved, so we're stuck there. My husband also works from home, and he has a work vehicle as well in the event that he needs to travel or go anywhere. Okay.
So he has a work vehicle plus the old truck?
Yes, ma'am. My point of view of it was like, why will we get rid of the car? We're already on plan to get out of debt in two years. The car is already factored into that. But my husband is like, oh, well, Dave would say, get out of the car because you're going to save $42,000. And My question- Well, you've already sunk half the cost in.
You've already sunk more than half the cost in. So I see what you're getting at. Let me ask another question to get at it another way. What's your income combined?
It's 160,000 yearly. I don't work. I'm a stay-at-home mom. I have three boys. Just had a set of twins a year ago. They're 18 months, so it's only his income. He makes, again, 160,000 yearly, and after-tax, it's about 9,500 monthly.
You know, You have options here. Neither of you are wrong. It's just what you guys decide to do together. Because you are on the track to pay this off in two years or less, and because it's no more than 50% of your annual take-home pay, I'm inclined to say you could keep it. You've already sunk a lot in. And honestly, when you play out the difference, it's a $10,000 difference. It sounds like if I'm doing the numbers as quickly as I can in my head, it's up to you guys. And at the end In the sense of it, you're left with a nicer vehicle, a newer vehicle, and then you've got the old vehicle, then you've got the work car. Whereas if you were to get out of this, like I said, in order to really get into something, you'd be paying 9,000 plus maybe another 8,000 for a vehicle. So the difference is pretty negligible. It's pretty negligible. I'd probably keep it. Ken?
And are you saying that... Well, I agree with you, but are you saying that because of momentum?
I'm saying that because The- You can go either way.
I agree. But why do you choose keep it?
Because they've already... I'm saying because in order to keep the car, it's as if they were going to go out and buy a 26,000 car today. If she called me and said, Hey, I owe 26,000 on this vehicle, I'm filtering it like that. If you called me today and said, I owe 26,000 on this, I'm $9,000 upside down, what would you do? I'd say keep it because it's essentially, mathematically, it's the same thing. You'd have to pay the $9,000 difference, and you'd have to get some cash aside to get you a beater. Once you add all that up, it's going to be a $10,000 difference. You could say anything to get out of debt faster. I'll take $1,000 is better than... Owen, 123 is better than Owen, 133. You might say that, but because your timeline is regular and you've got a good income and there feels like there's momentum here, I'd keep it.
That's where I'm leaning. Momentum That is the deciding factor. With us both agreeing that either or, that's fine. But there's a momentum play there. To your point, 10 grand in the grand scheme of things here.
Knowing that she said, Listen, the other car, they know $5,000 of work is coming up. It felt like it was eating away at that margin even faster, if that's accurate.
All right, let's go to Jaden in Albany, New York, see if we can get a call in here. Jaden, how can we help?
Thank you guys for taking my call. Sure. I'm getting ready to be… I'm going tomorrow for a job. I start in two weeks. I'm going to be traveling. I have to cover my own hotels. Would it be worth it to get a little tow mind camper, no more than $5,000 instead of paying for hotel rooms every week?
What are you estimating your hotel spend will be?
I'm going to be saying at each job site for about 4-6 weeks From most hotels I know, they're around the $80 a night for what I'd be looking for.
Yeah, probably. If that's what I was looking at, you start running the numbers on $80 a night. With the toe behind. Normally, we're not fans of RVs and things like that, but in this case, he's saving a lot of money. I feel like that's a good move. Unless I'm missing something, you start running the numbers on those four Four to six weeks, if you run the average five weeks, that's seven nights, right? You're looking at 35 nights times $80, and you're doing that multiple times? Yeah, I probably would do something like that.
Are you paying for it outright or are you going into debt for it?
I pay for it outright.
You pay for it outright? How long are you going to be doing this job? Is this what you do for four to six weeks out of the year or four to six weeks every… What's the frequency see that this is happening?
I would be working in the Albany area. Some weeks I would be working in Florida. Some weeks I'd be out in Washington State. I'd be a for the Boiler Workers Union.
But you said 4-6 Four to six weeks. Is that for the whole year or you're doing that? No, it could be four to six weeks, go to another job site. Got you.
Four to six weeks. He's going to rack up some money pretty quick.
I'm not into those things because they go down in value, but I would be looking for a creative solution. Let me put it to you like that.
Well, a little $5,000 one that he pays in cash, and it saves him thousands of dollars long term. Yeah. Yeah. Boys, staying in $80 a night hotels, I'd rather stay in something that I know. You know what I'm saying? You've seen an $80 night in a hotel lately?
And I am telling you. I'm not going.
Got to get those Lysol wipes. This is The Ramsey Show.
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Turn that mic on. All right. Today's question comes from Carlos in Texas. My parents both work, and I'm fortunate that they have provided well for my sister and me. They have always planned to pay my way through college like they did for my The problem is that I want to pursue a career in medicine. I know that it's extremely expensive. I know that it's an extremely expensive choice, and I don't want my parents to be paying off my education forever. I will start applying to colleges soon and have applied for scholarships, but was wondering what else I could do as a 16-year-old to start earning on my own to help them pay for my education.
Anything and everything. Yeah, all of it. When you're 16, you got a wide-open list, but you also have a lid. There's certain things you're just not going to get. That's everything from I'm bagging groceries or working at my grocery store. I am providing some type of specific services, babysitting. That's a good one. I am pressure-washing. I'm cleaning trash cans. I'm scooping dog dodo. I remember years ago in the Ken Coleman Show, I shared a story of a 14-year-old who started a pooper-scooper business in his neighborhood and bought himself a $14,000 boat.
Holy He smokes.
Wow. Fourteen. That's something. Went around and said, Hey, do you have dogs? If you do- I'll get it. And you're tired of scoop in the poop, this is what I charge. I come by every week, and he just went door to door. There's a combination there of moxie. Some people are like, I'm going to help this young man out.
Yeah, sure.
But then there's just a thing where you went, you just eliminated something that every dog owner wishes they didn't have to do. They love the dog. 100%. I love my dogs. Let me tell you what I don't love. Pooping and scooping. Pooping the pooper. What can a 16-year-old do? Anything that you can do, do it. At this point, and you got a wide array of things, your hourly jobs, working for companies. Scholarhips. Yes, scholarships. Full-time job. I would just get after it and set a goal. Set a goal that's reachable, reach that goal, and then start upping that goal. In other words, it could be intimidating for anybody, but certainly a 16-year-old to set a goal, I want to make $30,000. No. Set a I got to make $10,000 as quick as I possibly can. Get a little poster board out. Stack 500 there, I stack 1,200 here.
Make the little thermometer.
Yeah. I think that's what I would tell. What would you add to that? Because you're very enterprises I love what you said, Ken.
I think that's exactly right. Yeah, I think applying for scholarships becomes your secondary full-time job. If working is full-time, there are so many scholarships out there, and now you're still young, you still have time to You add things to your scolastic resume to be eligible for more, if that makes sense. I think those two things combine. I also think sitting down and having a conversation with your parents about what the parameters are, what the limitations are. If I'm going to medical school, what does that mean? What can they afford to pay for? Is that the type of schools that you're looking at? Really having clear expectations is going to be a big part of this as well.
Yeah, love that. All right, let's We go to Jerry now in Kansas City. Jerry, how can we help?
Hey, thanks for taking my call. Sure. What's going on? I'm a little nervous. You're doing great. I'm 57. I want to know what I need to do to retire. I put a little bit into the work retirement. I think got maybe 30,000 in it. I only owe 27 on my mortgage, 27,000.
What's the house rate? That's right.
Been working What's it worth? Maybe 150. I don't know. Honestly, I've had it for a while. I just got divorced for the last seven years, and I'm just trying to get banks right now.
What's your income?
57,000.
Do you have any debt at all other than the house?
I do not. I do have my three to six months emergency fund.
Great. Okay, good.
What do you do for a living?
I work for the state of Kansas. I'm a barbershop inspector.
No way. That's cool. How many barbershops does one inspect in a given week?
Honestly, it just depends on what part of Kansas I'm going. If I'm going to a city or going to Western Kansas where it's all wind chill time.
I do the whole state. Well, I'm going to turn you over to my colleague. She's got her retirement calculator handy, ready to go, and she can walk you through that. But one of the things I would just Just put in your mind to think about after this call and over the next couple of days is, how can you increase your income? At 57, I know you can, but at 57, I'd like to see you dramatically increase your income. I really would. What I mean by dramatically is I'd like to see you try to get it to six figures. Now, you may have to do that through two jobs. But I just think you've got this opportunity right right now have such low expenses, it sounds like to me. You have no debt. You almost have a paid-for house. You're in a position now that if- My positions are about 2,000 a month. Exactly.
I have about a thousand a month to play with right now.
That's just right now. I am really in favor of you. Jay is going to give you some real numbers, but I would circle a number, and I think Jay will help you at the end of this call, have a number in your mind and go, If I earn this much and I put all that into retirement, I think you could be surprised what she comes up with. With that, I pass the But I want him making more money because I think he's got a chance to really make up ground.
Yeah, I agree. Right now, you said your budget is you're spending 2,000 per month, but you've got a margin of 1,000, so 3,000 is what you're living on right now, right?
My brain home, yes. Yeah.
Okay. The idea here is, the idea is when you retire, whatever that nest egg is, there's a couple of things here. You want to be able to live off the interest and not really have pull from the principal, right? That would be ideal is what we're looking at. Then the other part of that is the way that you make that an even less stressful situation is you just lower your general expenses, which you've done a really good job of doing, and paying off the house would be the final nail in that tree there. Tell me again, because I was putting numbers in, your house is worth 150. Did I hear that?
Yes, I would guess. I don't know.
And what do you owe on it?
What the market is.
What'd you say you owe on it? Twenty-seven. Okay, so you'll be done with that in no time. But to Ken's point, you're going to have to increase your income because at this point, if you're just investing 15%, like we say, off that gross number, if you continue to do that, let's say you stop working at 68, you're going to have about $260,000 in retirement. If we're talking about just living off the interest, 10% of that, that's not a living for you. We need to essentially double that. If you do what Ken said, and then you go from putting $712 a month into retirement, and you go to putting $1,400 a month into retirement, well, suddenly that doubles what you have there, and you're closer to $450,000. Do you see what I'm saying? This really is an equation that is tied directly to your income. It is, at this point. Directly.
It is at this point. The great news is, Jerry, you have such a little expense, and you sound like you're very frugal. This is increasing your income. Here's the deal. A guy like you, that state job, I know you have a lot of travel there. I would start thinking about transitioning out of that, but I know you probably love those state benefits, and you're probably counting on some of that. But I would really look at that experience that you have being an inspector, your detail guy. I just think kicking the tires to see what other career path similar to that work, but in the private sector would pay, and/or some part-time work or contract work. Because if I could double my income and you were to put the doubling away. You're going to really be comfortable.
Yeah, especially for you. At one point, you'd be able to invest beyond the 15%, and that's going to be a huge for you. Because listen, Social Security, we don't know what's going to happen with that. We already know in the next 10 years, benefits could be significantly less. So we don't want to depend on that.
But you can do this, Jerri. The best is yet to be for you. But I do think it's setting your eyes a little higher on income and investing yourself I think you're going to be very, very, very stable. All right, quick break. We'll be right back with more of The Ramsey Show. This show is sponsored by Better Health. Hey, folks, we all have stories, the family and cultural stories that we were born into, the stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. While we can't go back and change any of our old stories, the is waiting to see what you and I are going to write next. As we enter 2025, I want to encourage you to examine your old stories and be intentional about the new ones you're writing. I'm not talking about goals that are going to be long gone by February. I'm talking about writing new stories that will change your life forever for the better. If you're like me, therapy can be a great place to explore the old stories, even heal from them, and begin to write new ones.
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Hey, Dave Ramsey here. Dr. John Delonie and I are coming to a city near you on the Money and Relationships Tour. You, the audience, will vote to choose the topics we talk about, things that impact your life, like investing in your future, money, stress in marriage, and more. We're coming to Louisville, Durham, Atlanta, Kansas City, Fort Worth, and Phoenix in April and May, 2025. Tickets are at their lowest price right now. Grab yours at ramsey solutions. Com/tour.
Welcome back to The Ramsey Show alongside Jade Warshaw. I'm Ken Coleman, 888-825-225. It's the phone number to jump in. We'd love to help you. Jade is going to lead out on any of your money questions, and I'll lead out on your income questions. We wanted to make more money so that we can actually do good things with it. As we've said on this show for many, many, many years, your income is your greatest wealth building tool, and I want to help you when it works, so we're making more money. Call away, and we'll do our best to help out. Luke is going to start us off in Atlanta, Georgia. Luke, how can we help today?
Hey, how are you guys doing? We're doing well, Luke.
What's going on?
My wife and I, we graduated college. We both borrowed about 100,000 in student loans. Now, each of us, just over the course of it, we've got 200,000 each in debt. So we've got about doubled interest. And just trying to see about refinancing, just what options, just some guidance It's a difference.
Just to clarify, you both borrowed 100,000 each, and over the course of time, both of your 100,000 have doubled, and now you owe 400,000. Is that correct?
Yeah. That sounds right.
How much time? I'm just curious.
We got our associates, which took two years, and then finished a bachelor's, which was two and a half, closer to three years, just like how the semester has worked out.
But it doubled in that amount of time?
Yes. Over the course, I don't know exact specifics of my wife's, but myself, and it seems like a bunch of people that I I know, they're in the same interest rate.
It's because your payment isn't covering the interest, and so your loan is not moving. You're paying payments, but your loan is not moving. The total is not.
It's growing. My minimum payment is 2,800 and something. I did the math, and only 500 of that is going towards the principal.
Yeah, exactly. Okay.
So 2,300 is is going to interest.
Tell me about your… Listen, this is a lot of debt. We're going to help you out. Tell me about you guys' income, because I'm hoping that you've got some jobs that are paying.
I'm a pharmaceutical rep. My base, I make about 130, but I am projected I should make over 300 this year. Okay.
What about your wife? Excellent. Excellent.
My wife, she stays home with our daughter, and she's currently pregnant again. She'll be just a stay-at-home mom with our children.
Well, let's see about that. What was her career before she stayed at home with the kids?
She was an office manager for a dental surgeon.
Okay. What did she earn doing that?
Probably like, 45.
Is that where her $100,000 degree was for?
Yes.
Okay. There is a part of this equation. We'll get to it in a minute. There is a very real part of this equation where she would be working in order to help out with this, and there might be a daycare situation. Because you guys have a lot of debt. I was hoping that you were going to say you made 300 and your wife made 200. You making 300 is really good, but just the $400,000 in student loans, I'm guessing there's debt other places as well, am I right?
No, we rent. I have a car.
Yeah, tell me about that.
I put zero down. I have good credit.
Yeah, but tell me, what do you owe on it?
Credit cards. What I owe on it? I think I owe $28,000.
Okay. What about your wife's car?
It's paid for.
Okay. Anything else? Credit cards, heat locks? Tell me any other debt you have because it plays into this.
Just student loans, and then just my car.
Okay, so 428 is what we're looking at. You're making $300. This is like the person who makes $60,000 a year but owes $160, right? The ratio is the same. There is going to be a level of sacrifice if you want to get out of this quickly. You could talk to my friends at Laurel Road. They offer student loan refinancing for high-income earners. You have the opportunity that maybe you could get a lower payment at a lower rate. What's your rate right now, your interest rate?
I have—is it 12 different loans? I think I have 12 because I went eat a spring, summer, and fall. Yeah, but they're all different. They're anywhere from 11. They're anywhere from, say, 11 to 14 and some change.
Listen, I talk to them because a lot of what they're offering is 5% and I would do that. I'm not saying that it'll happen and that you qualify, but I would definitely look into that because for you, it sounds like you could actually be a good candidate for that. Because what I'm always looking for with student loans is a way to lower those minimum payments so that you can focus more of your freed up money on the smallest debt and knock it out. Because with these student loans, even though you have this grand amount, it's still, like you said, broken into a bunch of littler loans. If you do the debt snowball, which is what we teach, you're listing all of those little loans from smallest to largest.
And knocking off the small ones, the bigger, the bigger. That's right. Because we already have. We actually, in high school, we did a Dave Ramsey, our math class. We took the whole Dave Ramsey course. We already have over $10,000 saved, but the payment's so much that it's like, if you If you don't pay more than just the minimum payment of 2,800, you're going to pay on it literally forever.
That's right. If you're not satisfying the interest within your payment, you're going to pay forever, and you're not going to see the loans go down. Because have you seen your balance go down? You told me you've seen it go up.
I've just seen it go up.
That means that is a clear sign that you, A, had it in forbearance for a certain amount of time and the interest continued to accrue, or the ratio of your payment is not actually satisfying the interest. The way to get out of that is to make sure your payment really would be your payment getting higher so that you're satisfying the interest and you're paying it off because money is going towards the principal. Again, I rarely say this, but I would contact Laurel Road and see if you can get a lower payment. The point of a lower payment and lower interest is not so you can keep your debt around forever and be comfortable with it. The point of it is so that, like I said, you can have the margin to pay it off faster. You're right, a $2,800 minimum payment, listen, Luke, I know how that feels. My husband and I had 280 of student loans, but 460 total debt. So I get that feeling. I'm right there with you. The good news is you've got a good shovel. I do think that it could be worth talking about your wife going back to work.
I don't know what the time frame or horizon of that is. But the solution to this problem is lowering your expenses, which let's talk about that for a minute. When you make $300,000 a year, in your mind, you should be driving the Tahoe. You know what I'm saying? In your mind, you should be going, I don't know, to a nice steakhouse. In your mind, you should be going on vacations, but that's not going to be the reality for you right now.
I want to lean in on something. You just said something I think it's good. Luke, if your wife, if you could just snap your fingers based on her degree, what she's done in the past, what could she make, ballpark, be conservative if she went back to work tomorrow? We had something sitting there waiting for her. What do you think she could make?
Probably 80 to 85.
That'd be a huge difference. Bro, I have that conversation because let's say you put every bit of that take home to these student loans, you're paying this thing off a lot faster than you think.
Yeah, that's what I actually just talked to her about that. The irony of this is she's a business economics guru, and I am an economics minor. Just going through school, we didn't qualify for Grants help or whatever. The only way we were getting through is doing it.
Oh, it's a racket.
Then you're like, Well, that was a bad idea.
You guys are poster children for this racket, the federal government, soap box warning, federal government has turned itself into a bank. It was never intended to be a bank. The Student Loan program, make no mistake about it, is a bank for the government to make money off the backs of the people it is supposed to serve. This couple is an example. I'd get real aggressive, try to knock it out quickly because this stuff, you just don't want it hanging around forever. Please, if you're listening to this, don't go get a student loan. This is the Ramsey Show. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? If you're ready to take the next steps toward your home goals, go to ramseysolutions.
Com/realestate. That's ramseysolutions. Com/realestate. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is joining me, 8888-825. 5225, is the phone number to jump in. We'd love to have you join us. Every day, we take calls on the Ramsey Show, and we don't know what happens after we hang up the phone. Did they take our advice? Sometimes we go, Maybe they shouldn't. Who knows? We don't always have great days, right? But this is fun. The latest episode of 90 Day Money Makeover is now available on our YouTube channel. Episode 2 features Sean. Is it Dara or Dara? Dara. Dara. Dara, who just cut their income in half after welcoming their new baby boy, and now Dara is working part-time. They're going to have to make other significant lifestyle changes to continue paying off debt, but they don't have to do on their own because, my partner over here, Jade Warshaw is walking alongside of them. This is so fun. This is like your version of Extreme Home Makeover. You're getting in with folks, sitting down with them.
I'm just guiding them.
Customers rolling.
Coaching them up. They're the heroes. They're the ones actually getting in there and making life changes. Really what I love most about it, Kim, is it's real. This is not a scripted show. This is not a full makeup, hair and makeup show. We're going into real people's lives into their house and seeing how real things play out. Because the truth is, you get the advice and then you sit down and you sit at the table with your spouse and go, Okay, what are we going to do? That's the truth. You pick on the A list of tough things. You go, Okay, let's do this one. Let's do this one. Maybe we're not ready to do this one yet, but we'll go. That's real. Yeah, absolutely. Very few people. I don't know. I feel sometimes that if we write a prescription, I don't know everybody that follows it to the T, but you can still make a lot of life change in a short period of time. We did that. Sean and Dara, you got to watch it. Their income went from 200,000 to 100,000 when she stayed at home with their new baby boy. They I make a lot of sacrifices to pay off a good amount of debt.
I won't give it away, but take a look at it. You can find it. Well, hey, you can find it on the Ramsey Network app, but you can also find it on the highlights page.
Ramsey Show YouTube channel, 90 Day Money Makeover is what you're looking for there. This is really fun. This will really inspire you. By the way, speaking of the Ramsey Network app, it's the only place to get the full episode. That's three hours of the Ramsey Show. That's the only place you can get all three hours. Download it for free using the link in the show notes or searching Ramsey Network in your app store. If you're on radio, don't worry. After this segment, we continue our third hour. Again, the Ramsey Network app, only place to get all three hours of the Ramsey show. All right, let's get to Bianca in Washington, DC. Dc. Mianka, how can we help?
Hi, I'm a single mom of two, four, and nine months old. Bless your heart. I have a mortgage, a car I'm upside down on. Yes, I have credit cards, student loans that I don't currently pay on. To be honest, I don't even know what the status is. And I just am looking for me for it, and I just downloaded every dollar and started filling out the budget. I'm cutting out things like Hulu. I've just deactivated it, which is hard. Good. I mean, I am ready to take those hard steps, but honestly, childcare in this area is like the Wild Wild West. I do get help with one daughter, but the other one, I'm solely on my own. So I'm looking at 1,700 a month. I make 1,15, but after health care for all of us and everything, it It just seems like, I don't know what I'm doing.
I don't even- Okay. Take a deep breath because it is a lot. Just take a deep breath and blow it all out. Okay, good job on the income. $1,500 single mom. Bravo. That's very good. You're right. Child care is expensive. 1,700 for the one feels… Now, I'm not in your area, so I don't… Maybe I don't know, but it does- That's 1,700 for both. Oh, for Okay, that's good. That is good. When you do your budget, when you put it into every dollar, what did you find? Were you in the red?
Yes.
Okay. How much were you in the red?
About 700.
Okay. Right now, is it credit cards that's covering that 700 in the red? Yes. Okay. Tell me more about the actual numbers on the debt. Can you tell me what you owe on your car?
On my car, I owe 11,402.
Okay. Do you know what it's worth?
Car max, say, 3,200.
Okay. Tell me about the credit cards. What do you owe on How much is that?
About 3,700.
Okay. 3,700. Student loans, what do you owe on that?
71,852.
Okay. That's on a zero payment right now? Yes. Okay. Then tell me about your mortgage. What do you owe on it and what's the thing worth?
I owe 276. Right now, I think it's worth a little under $400,000.
Oh, interesting.
I took maternity leave, but my job doesn't offer it. I did short-term disability, and I took a hit there. I'm in forbearance with my mortgage company that's coming to an end. So I've been making half payment. Okay.
So you're with forbearance. When does that come to an end? When do you start paying the full payment again?
Next month.
When you do that, does that mean you're going to be more than $700 in the red? Or is that 700 with the full mortgage payment?
That is 700 with the full mortgage payment.
Okay. Okay, good. This is a tough equation. Are there things in your budget that you can cut out? Because the truth is, here's the truth. Your largest debt, you're not even making a payment on it. We can, just for the purpose of this, put it out of our mind. If we do that for a moment, we go, Well, wait a second. Now I'm on the hook for $14,000 just with the car and the credit card. Let's look at it in smaller chunks and go, How quickly could I pay off $14,000? Okay, that's what we're solving for right now. With this child care thing, you've got a four-year-old, when do they go to kindergarten? Because a lot's going to pop off when you get one of these out of daycare.
She can go in 2026 because her birthday is late in November.
That late birthday. There is a light at the tunnel there. Let me tell you, I couldn't wait till my son went to kindergarten. There is a light at the end of the tunnel. It doesn't come as quickly as we want. I'm not trying to wish your time away with your little ones, but you know what I'm saying. Is there anything you can do to clear that $700? If you walk through your budget, is there anything? Because I'm talking about everything. Here's where I want you to look. Non-spending items, I want you to look at your withholding. Let's find out if we're getting a tax refund every month or at the end of the year, that's money that you could be having in your budget every single month. So do you get one?
I'm looking forward to getting one next year. I'm not absolutely sure because I did the exemption because I needed all the cash. So I just dug myself out of I had to hold because I had a tax due.
So this year, when you get your taxes back, that's going to be a tell-off for you. If you're getting back $3,000 or whatever it is, you need to go and change your withholding because essentially that $3,000 you could be getting throughout the different checks you get every month, right? Right. If that's the case, I want you changing that. Next thing, are you investing at all?
I have a 401k. I do the match. My company matches up to 4 %.
Okay, so how much is that, every check?
I think it is roughly around a little under 300.
Mama, there it is. We need that. A little under 300 every check. That's getting really close to $700 a month. Let's take that. We're going to temporarily pause that investing until we get this debt cleaned up. Then other places that you can look, obviously, you're starting the right thing with subscriptions, go through with a fine-tooth comb. Their first thing is to get out of the red, and then we can start talking about ways to increase the income so that we can start making extra payments. Focus on the car and the credit card. You can do this. Call us back if you need some help.
Thanks for the call, Bianca. We're cheering for you. This is Ramsey Show.
Hey, what's up, guys? Episode 2 of 90 Day Money Makeover is available right now on YouTube. This series follows real people as they take on the challenge of transforming their finances and their lives in just 90 days. In this episode, watch as they face new obstacles, celebrate wins, and push forward on their journey. And of course, I'll be walking alongside them every step of the way. Okay, now here's a little sneak peek of what the new episode is all about.
Me and Dara, back in November, have a new son, a baby boy. We have $87,000 in debt. I've been in debt since I was 18 years old.
I gave birth to him. I knew, I said, I cannot leave him with someone that I don't know. I don't care if we're eating rice and beans, Sean, I told him.
There was no going back.
When you guys called into the Ramsey show, it was like, I think that we should push them harder. Baby Jonathan being born is a wake-up call for us to finally change.
I can't go on another month.
Wake-up call. Over the next 20 years, this is important.
We got to get this right. You want to pay off your debt. You want to get your time back. You want to get your home. Nothing usurfs those three.