Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically in your money, in your work, and in your relationships. I'm Ken Coleman, joined by my fabulous colleague and friend, The Jade Warshaw. Getting the polite golf clap from our studio audience there, like you had a nice part put.

Very nice people out there today. I'm just going by Jade now. Oh, just Jade? Yeah, just the first name only. Like Prince.

Well, I will I'll say this. You have the personality, you got the charisma, and the name to pull that off. I don't. If I just go by Ken- Ken. I get the jokes. Ken. I am Kenuf, though.

You are Kenuf. You See what I did there? You're enough there, Ken.

You see what I did there? The Barbie movie has ruined my name forever. But hey, I digress. The phone number to jump in is 888-825-5225. 828-825-5225. And As I mentioned, we do have some folks joining us in the lobby today, and it's a great way to mention that if you'd ever love to come watch the show, we come out a couple of times an hour, say hi, take pictures, sign books, tell jokes, whatever it is. We have free drinks in the form of coffee and teas and things of that nature, bake goods.

Listen, I'm going to start baking some goods so that they can get out there in the lobby. That's well.

I thought you might bake a good for your co-host and friend.

Not today, Ken.

No sampling of food today.

Not today, I'm speaking the other part into existence.

But it's blowing up on the Instagram at Jade Warshaw, and occasionally, they put one on my feed at Ken Coleman on Instagram. But I will not be sampling any food today, unfortunately. Next time. But the good news is we will be coaching and answering questions. John is going to lead us off in Santa Barbara, California. John, how can we help? Hey, guys. Thanks for having me. Sure. What's going on?

Well, I've been looking at paying off my mortgage. But with the high yield savings rates right now and having that money earning interest for me, I keep doing this dance of, should I just pay it off? Should I put a little bit more lump sums towards it? I've seen what you guys might think towards this.

How much do you have sitting there? How much is it going to take in order for you to pay off your mortgage, if you were to?

I owe $280,000 on the mortgage.

Is that exactly Is that really what you have in your high yield, or is it more?

I have $500 in my high yield.

Let's go. Way to go. Can I just ask a couple questions? How long did it take you to save that?

Probably 12 years.

Wow. That's amazing. That's amazing. I'm just curious, what caused you to save that in a high-yield savings account? Because the rates haven't been what they've been for 12 years or 10 years.

I've had it in low… I'm I'm sorry, like a low-cost index funds and stuff. But it's just over the last couple of years, I've moved some stuff around, and I needed to buy the house. I had to come up with a down payment. That's where it all ended up right now.

Sure.

Okay. I'm assuming there's no other debt. It's just your home, correct?

Just my home, correct.

Okay.

Can I ask real quick, Jade, what's your investment portfolio look like?

Well, I have it broken out into two different buckets. I have my retirement accounts, which is all low-cost index funds.

How much do you have there?

My retirement side is 565. Cool.

Fantastic.

How old are you? I'm 48.

Way to go, John. Tell me about the other bucket. So 565 in retirement, what's the other bucket? How much in there?

The other bucket is my high-yield savings brokerage bucket that when I bought the house- Oh, that you already gave us that number, correct?

Yeah. Okay, so you have over a million dollars between the retirement and this high-yield savings account.

Mm-hmm.

You owe $280 on the house?

That's correct. Listen, if I'm you tomorrow… Here's the thing. I can tell… This is a numbers guy, though. He's very low risk. He likes very methodical. You can hear that in the way you're speaking about this. Even if you didn't have- And I was just going to say- Go ahead.

I was just going to say, and the thing that is my interest rate on the house right now is 2.8. And I know everyone gets excited about the two, like, Oh, you've got such a low interest rate. You're not If you want to pay that off, keep that and just keep it.

Listen, 2 % is a great interest rate, but 0 % is better. So my thought here, if I'm you, even if you didn't have the other money in retirement, by the way, if If you just were like, Jade, I've got 500,000 in savings. What should I do? I would tell you today to pay off your home. Because here's the thing, and my screen says that it says that maybe you could keep that money in the high yield savings to keep gaining interest. But my thing is this, number one, if you reach over and you pay off that mortgage, number one, you're going to be free. There's a calculation there that can't be quantified until you feel it. Because most of us have never felt what it feels like to have a paid-for-home, so we really don't know the opportunity cost there because we've not experienced it. That's number one. Number two, if I'm thinking about this, I'm going, Okay, if I pay off my mortgage today, that frees up what was my mortgage payment. What would it look like if I just took that same mortgage payment plus whatever other money, and I'm dumping that into whatever investment you choose?

I probably wouldn't continue to put it into a high-yield savings account. I'd probably put it into other investments that are going to have a better rate of return, 10%, 12% annualized. I would do that to move because you're still going to reap the benefits of interest, which is really what you want to do, and you're going to have that peaceful feeling of having a paid off home mortgage.

Right. I appreciate you guys. It's a dance you do. I know that I'm in a position to do that, and then you're always like, Well, if I do this, but then what if I do that? It's always a dance.

Hey, John. I got to ask you a question. Jade gave you great advice. We're past the advice stage. Why'd you call? Were you leaning one way or the other? Why'd you call?

I think I just wanted to hear some perspective here.

Yeah, but which way were you leaning? Which way are you leaning?

To pay it off.

Here's the good news. Matches up with my friend's advice. Do it. Stop thinking about it.

The good news is this. You're not locked in. If you're like, Jade, I'm worried because if I take your away, I'm locked in. No, you're not. If you pay off your mortgage today, John, and you're like, Man, I hate this. You want to know what you can do? Go back and get another mortgage. If you hate the feeling of taking- See what she did there.

Do you know what I'm saying? That was tricky, Jade. You're not locked in. That was tricky. I like that.

But it is good to know that. I mean, it's funny to say it, but it is good to know that you can always go back when you make these decisions like, Wait a minute, that wasn't good. This is one of the few financial decisions that you can actually go back and say and undo it if you don't like it.

Let Can I throw one more at you, John. How much is your house worth? If you sold it today, give me a rough estimate.

1.5..

Bro, so here's the deal. If you pay it off and you go, Man, I want to get a better... You can sell that sucker and go wherever you want to go. Dude, pay this off. That's what you wanted to do. Jade said you're right, and I hate to admit this. She's like my workwife. She's usually right.

Listen.

She's usually right.

I'm usually right. I I think you should do it. I love conversations like this when all roads lead to financial freedom. Listen, that's called options.

Sell it. Wow. 1.5 mil.

My guy, he's doing it right.

Two-eighty left. Go ahead, my friend. That's a great investment. That is absolutely guaranteed. Great call. Hey, don't move. She's Jade Warshaw. I'm Ken Coleman, and this is The Ramsey Show. Not only do ID Thiefs commit crimes related to financial fraud, but now we have deal with home title fraud.

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It's just the smarter way to protect yourself. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me, and we are here for you this hour, 888-825-5225. Jade is our resident financial expert on the show today. I'll help out with any work questions, mindset questions. You're trying to get through these baby steps, maybe trying to get a bigger shovel to get through them faster. Love to take any of those calls because I can tell you this, your income is your greatest wealth building tool, so I'd love to help out on any of those Questions, 8888-825-5225, 8888-825-5225. I just see it on the screen and I want to go. What is it? Your old stomping grounds. The Miami, Florida area is where we go next. Mateo Aios is on the line. How can we help?

Hello there. How are you guys doing today?

Good. What's going on?

All right. I just have a couple of questions. I work, I have a job, and I make around $87,000 dollars per year. And my wife owns a marketing agency company where she makes around $85,000 per year. So basically, our household income is roughly $170,000 per year. And we do have some debt. So I would like to know how would you guys would tackle this debt? And I also have another question, which is, how much money should we save for taxes monthly for the company?

Cool. So let's start with the We'll take the taxes first so we can actually think about what you'll have left over for your debt. Both of you are self-employed. I know you said your wife, that was her business, but yours is your business as well, right?

No, she's self-employed, but I work for a company. I'm actually ahead of supporting my company right now.

Okay. If I were your wife, my husband and I were also self-employed. My husband still is. He runs our business. We always set aside 25% to 30% every quarter. It's part of his business sheet, and that's part of it. It just automatically goes out, and 25 to 30 %. And that way it's like, out of sight, out of mind, you're not touching it. And then when it's time to file those quarterlies, it's there ready and waiting. And then we have a bookkeeper that helps us with everything else. So I strongly, strongly recommend those two practices, having somebody to help you with your books and you just knowing every quarter, you've got to set aside X amount of dollars and making sure as much as you can, making making sure that the money that you're paying yourself in payroll is very steady, that you're not just pulling out money for this and pulling out money for that, but deciding, Hey, this is what we pay ourselves out of her business, and it's consistent, and that just makes it easier on everybody. So that's my first piece of advice for your first question. Does that make sense to you?

Yeah. So basically just 25 to 30 % monthly because it really fluctuates the number of clients that we get. So it's possible that right now it's the $7,000 per month, but next month could be around $10,000 to $12,000. It depends on the number of clients we get, right? That's right. So just set aside 25 to 30 %, would you say, monthly?

Every month. Would you say monthly? Yeah, every month because whenever you're receiving that money, set that portion aside, because like you said, every month is different. So rather than saying, Hey, every month, I just put $700 aside, that's not going to work. It's got to be based off the income that you're actually bringing in. And so that's what I would do.

Is this her first year in business?

This is actually her second year.

I think Jade's right. It's a good rule of thumb, but I think you've got something to work off of. Did you do your taxes yourself, or did you have a tax pro do these taxes on her business?

We had someone to do our taxes, yes.

Well, I would also consult that text person and go, Okay, based on last year, where did we go? Did we pay too much? Did we take too much out? Do you recall that?

The very first year was a break-even year because we had a lot of cost. To pay the employees and also the office and- So you didn't pay anything? No, because we broke even the first year.

I think Jade gives a great rule of thumb, but I'd also be consulting that tax professional every quarter. My point is, Jade gave Great advice. Start there. But I would also be watching that because I ran a company as well as my wife and I did, and we were checking in quarterly.

That's good. And watching that. Sometimes it's more expensive because you're paying for more of their time. Depending on what I think whatever you want to spend, I think that's up to you. But Ken makes a good point in making sure that you're just... Make sure you're getting all of your service out of them.

Yeah, I just wanted to maximize the dollars, so I didn't want to hold back too much or hold back too little. That was the only reason I was checking in. That's true.

That's a good point. A lot of times by the final quarter, you're like, okay, you can start to see.

Well, you start dialing it in. To your point, I think you make a good point, but we weren't spending a half day, or it was maybe You one quick phone call. Yeah, that's true. It was not a heavy fee. That is a good point. On to the debt.

Got that wrapped up, squared away. Okay, so now with the debt, how much debt do you guys have?

Okay, so I wrote down three here. The credit card debt is around $6,000. Then we have a personal loan that is around $13,000, so $600 monthly is our pay. Then we have a car loan for $13,000, and we pay $3,500 monthly. I would like to know if on these two that we are paying monthly, should we just keep paying that or should we increase the payment to try to get rid quicker? What would you guys say?

The best way to pay off debt is to use what we call the debt snowball method. There's other methods out there, but this is really the best, fastest, most motivating way. What we do there is we pay minimum payments on everything. You have to satisfy that minimum payment so you're not late or delinquent or anything like that. Then you list the debt debt that you have from smallest to largest. In this case, it sounds like the credit cards are the smallest debt that you have. Any money that you have above and beyond those minimum payments, you throw it at one debt, and that's the smallest debt, and you knock it out as quickly as possible. Then when you knock that debt out, it frees up that minimum payment that you put along with your other margin, and you start throwing at the next smallest debt. We're only paying off one debt at a time, as opposed to trying to put a little here, a little there, a little there. Does that make sense?

Yeah, it does.

Then you can move a lot quicker that way. It's nice because you feel that excitement of when you pay off a debt, you're like, Yes, I did it, and now you want to go do another one. That's what I would say.

Okay, that's perfect. If that makes sense.

Hey, real quick question on the car. What do you think that car is worth? Are you upside down in it? What's going on with the car?

Basically, this car was a Corolla, a 2020 Corolla that we got. The car actually appreciated because we got in the very good timing. Right? So the car now is worth around 18,000 to 17,000. I don't even know if maybe it's a good thing to maybe sell the car.

That's what I want Jade to weigh in on. What do you think, Jade?

Is it your second car? Do you already have another car, or do you have- Yeah, there's This is the second car.

That's my wife's car. So I drive another car.

And the other car you have is paid off?

No, it's a lease that I have. And it goes into.

Oh, you didn't mention that. You didn't mention the lease.

I'm sorry.

Listen, debt is money That you owe to anyone for any reason. For those of you listening, that's not to get onto you, Mateos, but a lot of people, they're like, I don't have any debt, just my student loan. And I'm like, No, that is debt. Okay, so tell us about this car lease right quick.

So this one, that's my car, and it's $450 a month. And it goes until June of this year. That's when I'm done with the car.

Okay. So in June of this year, you're out of that lease. We're not redoing it. We're not... That's it. No. So are you going to try to buy the car? What was your plan to do at the end of that lease?

Just turn it in? Yeah, just turn it in and try to get something cheaper per month.

No, no, no, no, not per month. Okay. I'm glad that you said this because we're getting to the root of it. The whole thing, and this is not just for you, so don't think I'm griping at you, although I am griping at you a little bit. The point of this is to create a new lifestyle because we can never solve a problem while simultaneously creating it. So if we say, I want to get out of debt, if that's what you're shooting for, then you have to stop creating the problem, meaning you have to draw a line in the sand and say, I'm no longer borrowing money anymore. If debt is the problem, I have to stop it dead in its tracks. For anybody listening, not just Mateos, your first order of business when you're going to pay off debt is you say, I'm not borrowing money anymore. That's it. That's how we live our life. Then after that, you can start to actually make changes that will stick and that will actually solve the problem. In Mateos' case, he needs to trade in that lease. But since he knows the time is coming in June, he can start saving up some cash here so that when June comes, he can just give back that lease and say, Thank you for the time.

I'll never do that again. But by the way, here's $5,000. I'd like to buy that car over there in cash. The feeling that he's going to feel a freedom and just control is going to outweigh everything, Ken. No more payments.

I agree. I'd sell the car, by the way, the $18,000 value. That is rare that a car goes up in value. I'd get out of it now, get a decent little car, get you A to Z for five grand. This is the Ramsey Show. This episode is sponsored by Better Help.

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I'm Ken Coleman. Jade Warshaw joins me. The phone number to jump in is 888-825-5225. Before we get to our question of the day, my co-host wanted to add a little something. You had a little something.

I did. I wanted to clarify from the last caller because he was saying that his wife was self-employed and he wanted to know how much to set aside for taxes. We were talking about it, but I don't think we clarified, Ken, that the money that he's setting aside, the 25 to 30% that he's setting aside every month for the quarterly taxes, that's of his payroll. It's not of everything that the business brings in. That's why I was saying, if you can have your payroll set as the same amount, it makes that a lot easier. I think that's also what you were saying, if it's like you can regulate it a little bit easier. That's right. Just a clarity, it's of your payroll, not of the whole.

There you go. Yeah, good stuff. All right. Our question of the day is brought to you by Neighborly, your hub for home services. Winter is rougher in some areas of the country than others, but there are things that make sense to do no matter where you live. That's why Neighborly has a helpful winter checklist that you can download for free. Check Check it out at neighborly. Com/ramsey.

Today's question comes from Naomi in Utah. Is it greedy or ambitious for me to work towards reaching a specific number goal of making $20,000 a month? I work as an insurance broker. We are expecting a little boy in March, and we have $15,000 in debt. I want to help my family get out of the financial hole. I have put us in with student loans and help save for a house. This has really been weighing on me because I want to financially, but I don't want to become greedy if I am meeting this monthly goal. I love this question, Ken.

Do you? I think it's very straightforward.

I love it so much, but I think a lot of people deal with this, and there's a lot of angles we can talk about this. Number one, the answer is absolutely not. It makes you a woman who is loving her family well, that you want to step up and pay off your debt and make sure that life is good when baby boy arrives and make sure that you're pulling your weight in your home. I think that's great. Not greedy at all.

But it is ambitious. By the way, ambitious is great. It's a great quality to have because what I see with this is you've got a very clear goal and a very clear why. That ambition is fabulous.

A good point to add to that is, and I want to say this for anybody, you may have heard Dave say this, and it's so true, money only makes you more of what you already are. It's completely amoral. It's nothing until you add yourself to it. If If you're an ambitious person, it just makes you more ambitious. If that's what makes you tick, if you're generous, it makes you more generous. If you're stingy, it makes you more stingy. You just have to filter it through who you are. If you start to notice qualities that you don't like, or the people around you are pointing out qualities in you that you don't like, you have to really take a long look in the mirror and be like, Okay, this money, me earning more money, is starting to magnify a quality that was always there. I just didn't it before. That's teaching point number one, Kenneth.

Oh, dropped a Kenneth on me. I thought I got in trouble.

Listen, if we really go, I'm saying Wayne. I'm getting to the middle name. But, Ken, I think that what she's saying, this goal of making 20,000 a month. It is ambitious. I don't know what you make currently, so I don't know if this is a long ways away. I don't know what it means for you to get to this goal, but I do want you to make smart goals. Fair enough? Let's Let's really sit down and if 20,000 is really achievable and it's something that you can get to and figure out what your time frame is, so let's get very clear and specific about this goal. But I think it's a great thing. Definitely not greedy. I think it's your reason for wanting to I view this is noble.

I like teaching lesson number two, and here's what I would add to that. You've got to be careful that if you make 5,000 a month right now and you set a goal for 20, that can be a very intimidating and very quickly discouraging mountain to climb. So to your point, it's like going, I know I need to lose 100 pounds, but if my mindset is always on losing 100 pounds, which is a long and difficult journey, then there's a greater chance that I fall off because it's just so daggum hard, which is why Dave was so brilliant by coming up with baby steps. That's right. He built in this idea of momentum because I accomplish something that's doable. Yes. Let's be honest, for some For people, $1,000 is difficult. That's right. If you're thinking about paying off $380,000 all day long, as opposed to going, No, baby, step one is. This is the idea, and that's why we talk about it. I loved your advice there, and I think that's the key, because if you go, Oh, I got to make $20,000, and then month three and month six, you're not even close, you can start to feel like this is impossible when it's not.

It's like, Okay, what do I need to do to make 25% more?

Yeah, you got to break it into those bite-size chunks. Yeah. So great advice. I like that.

All right. To the phones we go. Christine is joining us, and I think this is Cordelaine. I think it's how you say that. That's right. Is that right? Christine, did I say that right?

You did. Good job.

Well, I'm hooked on phonics.

Oh, no.

How could we help?

My husband and I have been considering selling our house. We We relocated just over a year ago up here. We were previously living in Oregon, realized we didn't want to raise a family there, moved here, bought another… This is our second house. We sold our first one. Then my husband got a job that was great paying, but as soon as it snowed, he was laid off, and then it was for five months.

Wow.

With the work that he was doing and the company he worked for, he couldn't go find a temporary job because they could call him until late morning, about 10:00, I think it was. Every single day, they could still call him in to work. They did every once in a while, so he wasn't able to go find work elsewhere.

That's like a carrot dumbling.

It was not fun. That's awful. He doesn't work there anymore.

By the way, real quick lesson. I know you've learned this, but I do want to point this out. He could have left. He could have left. He should have left in the future if this happens. I'm just talking to him right now.

He's listening in the other room.

Good. What's his name? So I can make this more- His name is Daniel. Hey, Daniel, you're a good man. You're a hard worker. But this is something you need to learn from. Never again let a situation like that hold you hostage. You got to go do what you have to do to take care of you and that amazing wife. That's the idea here. Don't ever let that happen to you again. You just go get busy, and we keep some income coming in as much as possible, and then we look to level up. Just a quick little… That's a tough situation, and it's a bit manipulative, but that's not why you called. Christine, why are we thinking we need to sell the house? Walk us through this.

Okay. Before we moved up here, we were in baby steps four, five, and six. Great. We were prepared for a layoff, not prepared for something that long. Then In April, my husband had to have his appendix removed.

Yikes.

He's literally right when he went back to work. It was great.

It was a good time. Oh my gosh. That's horrible. By the way, I've had that happen to me, and that's not fun.

Oh, that's horrible. It was not fun.

Yeah, been there, done that.

Now we have about $3,000 left of medical bills. After that happened, then my husband realized, I don't want to go work for that company anymore. So we quit. We started a small LLC where he was doing material delivery, some construction things with his brother, which was great. It was great at the time, but came fall.

Was it replacing the income fully that he was making before?

It was not fully replacing what he was supposed to be getting from his previous employer. There's a lot of things that happened with that employer. We ended paying $1,200 a month in insurance, so that really took a huge hit on us that they told us they were going to work with us so they wouldn't have to pay that, and then they didn't. So we lost that.

Okay, Christine, so here's where we're at. That music means we have to step aside, pay some bills, but we're going to put you on hold because we got to come back. We got to get to the bottom of this debt and why the house may or may not be the best move forward. Okay? You hang on, and we'll be back. This is the Ramsey Show. Don't move.

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Welcome back to The Ramsey Show. I'm Ken Colemanman. Jade Warshaw joins me. As we went into our last break, we were talking with Christine. Her husband's on the phone in another room, and they have been through some ups and downs, layoffs, some stuff like that. They've gone through some medical stuff, and Jade is getting to the bottom of where we are financially. So we're going to bring Christine back in. So, Christine, here's what I want you to do. Tell Jade what your financial numbers are. Just give us just the facts and what you're trying to solve by maybe selling the house. Right.

So we have a big income problem. Our mortgage is 2,150 a month. Then in our budget, our bills, what we owe comes to about $4,000 a month.

Well, what I'd like for you to go through is list out your debt, what you owe the entire balance. For instance, if I said you'd say we have a car and we owe $14,000, or we have... Go through all your debt so I can see how this is.

We have only medical debt. Okay. It's 3,000. Yeah. It's supposed to be 150 a month is what we're supposed to be paying.

No. What you're supposed to be doing... Sorry. No, go That's what you're doing. I'm revving up. I'm revving up, Christine. What you're supposed to be doing is paying off the debt. We're never seeking to have the lowest payment possible unless it's a debt snowball situation and we're paying minimum payments. If you're telling me the The only debt you guys have is this medical debt?

Yes. How much is it?

It's $3,000?

Here's the income problem.

Me and my husband- No, answer that question first.

Yes. But I heard the income problem. The income problem is you're only making $2,150 a month, and I'm struggling- Wait.

No, that's the mortgage payment.

Oh, that's the mortgage payment. What are you making? I'm sorry. What are you making?

We are making just under $3,000 right now.

Okay, so I wasn't far off. Okay, just under. Is that 2,500 or is that 2,900? That's about 29.

Okay. That's take home?

That is our take home. Goodness gracious.

Who's doing what? Who's working?

We are both working part-time because I feel scared for my husband to go back full-time.

Why?

We have two small children at home.

Okay.

Last winter was not a good winter for me.

Because of?

Moving to a new area, not knowing anybody.

Okay, I feel that. Being alone. I feel that. Being alone.

Then when he would work, he would leave in 4:00 AM, and I would have no idea when he's coming home.

Okay, so you've got some real trauma based on that situation. It was very uncomfortable for you. That fear is you're holding him back going, I don't want you to go. I don't want you to leave me here.

Yes. Okay.

All right. Why aren't you working full-time?

I think because he also doesn't want to be home full-time because he wants to be the provider for our family, and I don't want to Is that away from him? Well, you are.

How old are your kids?

One and a half and three and a half.

Okay. So real talk, real talk, real talk. When my husband and I moved here from South Florida, it was very difficult. My husband works from home. We have two small kids similar to you, and we don't know anybody. We didn't know anybody. We didn't have any friends. I'm the one going into an office every day, so I get to be around people. My husband is talking to himself in his office upstairs. You know what I'm saying? There's nobody there. I relate to what you're saying. There is a real loneliness about that that is worth noting. I understand that, but it can't be to the point where you tell this man he can't go to work. You just have to realize, honestly, Christine, that you're in a season, and some seasons suck, and some seasons are really hard, but it truly is just a season, and it will get better, and it will start to open up. And honestly, by you keeping him at home, it's keeping you from embracing that season and making yourself get out there, get to know people, learn the area, figure out what your new normal is. I'm not going to lie to you.

That's tough. We're over here, Warshaws are still trying to figure out our new normal, and it's been a year and a half. I just want to- Don't worry.

We're going to play pickleball with Stacey and Sam. We'll do some of those. Hey, you know what?

I just want you to know that it's a real thing, but don't let it hold you back. Just embrace it and go, This is where we're at right now. The good news is, you You guys don't have a lot of debt, and it can be gone in a month if you guys would just work.

Well, Christine, listen, you've nailed it. You have an income problem, not a debt problem, but you actually have a deeper problem. You've got some real trauma, and you've got some real fear, and you're making this harder than it needs to be. I understand how hard it was. Very, very understanding to what you went through. But what you guys are doing now is making this thing way harder than it needs to be. Let's just talk about the mindset here, Christine. He doesn't have to take another job that has him leaving at 4:00 in the morning and you not knowing when he's coming back. That's right. We got a false narrative there. Bad experience. What do we learn from that? Not going to do that again. Not good for Christine. Not at this season with the littles. So Hubs needs to get a full-time job. Got to. I mean, and if he can't get it quickly, he's got two part-time jobs to equal full-time. And you need to work, and you guys are going to be okay Let me tell you something. If there was a person on the planet who was not ready to have three kids under the age of three, it was me.

I survived it. If I can survive it, not lose my mind, then he can. When you're working, he can handle it. But we got to figure this out because a infusion of income- If you don't, you're going to lose your house.

You won't even have the choice if you don't.

Which makes it even worse. Stop the bleeding now. Stop the bleeding. It's a bandaid. The bandaid is income. That's simple. You guys could pay off three grand in no time, but it's time to work. You need to start channeling that fear into some fuel to say, never again are we going to get in this situation. You guys got to a point where you were in a babysit four, five, and six. That's to be applauded, and it can be repeated. Do you understand, Christine? It's time. Time for you to be a big girl and for your husband to be a big boy, and we're not going to let fear keep us paralyzed.

You got Yes, sir.

All right.

Christine, we love you, Christine. We're pulling for you.

We do. Sweet, sweet, sweet.

We had to give her the tough side, the rocky exterior.

Yeah, because here's what's encouraging about that.

They have no…

Their debt is so small. $3,000. Now, I think they went through their emergency fund, which I wanted to get you to weigh in on that.

Their thing one is keeping their house. Their thing one is keeping-100%.

Keeping that house. But do you I agree that too many people rely on the emergency fund when there's a job loss as opposed to going, No, that's to replace the HVAC. I'm going to go work, do something. I try to guard our emergency fund like I'm the Archangel in front of it. I don't ever want to use it. I think you're right. I don't think you should use it for job replacement.

I'm going to say it like this. I think that it is there for if you lose your job, because here's the thing, it might take a few minutes. Not for long. But it might take a little minute if you're like, Hey, I had this wonderful corporate job. I was making 70,000 a year.

I'll give you that. How long is too long to use the emergency fund?

Well, here's what I wanted to say. You're always supplementing it with something. You're going out and doing some type of work until you find the next work. That's what I'm getting at. I'm going to go two and three jobs to not use it. Yeah. If you're contracting your own work a little bit, you're picking up some Instacart type stuff, and it's supplementing you, but you need a little bit from the emergency fund just to make it meet.

Little bit.

That's what it's there for. I'm not going to be mad at someone for that.

I didn't know I was so hardcore on that.

But I feel the sentiment of that. I don't want it touch it, but I get it if you do. I don't want people to view it as a failure when they have to use their emergency fund for an emergency.

Okay, you know what? Great point. I don't want to judge anybody that's done it. I would rather take on the older brother coach role and go, Hey, I have always viewed it as the HVAC that goes out in the middle of winter, and it's eight grand or twelve grand. I don't look. No, no, no, no.

Don't touch it. How can we do it without?

Well, here's the deal. If I rely on the emergency fund, it takes away some of the urgency to go get paid. You're right, Ken. That's all I'm saying. I'm not judging. I'm coaching.

I think you're right, Ken. We need to have that Ken Coleman mindset. There we go.

Wow, this is very exciting. Hey, Jade agrees with me. I'm going to take a break while I can. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions. This is the Ramsey Show. It's where we help you win in your life, specifically with your money and in your work and in your relationships. The phone number to jump in to get coached up is 888-825. Com. I'm Ken Coleman. Jade Warshaw joins me this hour. 888-825-5-225. We'll take your money questions. Jade will lead you through those. If you got any work-related questions, Hey, I need a bigger shovel. I I need more money, and I feel like maybe I'm limited or I need some ideas. You want to start a business? Any of those type of questions, we both weigh in on those as well. So thrilled to have you with us. Let's get this hour started with Faith in Cincinnati, Ohio. Faith, how can we help?

Hi, I'm fan-grilling a little bit. I'm so excited. Thank you.

Well, you got to have faith.

You got to have faith, the faith, the faith.

There it is. Look at that. That was seamless. She didn't even know I was going to do it. Faith, what's going on?

I recently stopped my business, I guess, or sold it.

I have all of my equipment, which I am now selling for $3,000. I'm I'm going to get the $3,000 in a want some tomorrow.

Sweet. I've been following the baby steps pretty religiously by the book, and I'm on Baby Step number 2.

Currently, right now, I have four credit cards total, but my lowest is 600 and then 3000 exactly. Okay. So the question comes in where I'm going to get this 3000 tomorrow.

And I know usually we go First you pay off the 600 and then you'll go on to the 3000. However, since I am getting exactly the 3000, and the minimum payment on the $300 credit card is 130, versus the is only $29.

I was wondering if it would be smarter to go ahead and pay off the $3,000 in full.

That way I have that extra $130 each month where I had paid that off, and then it would really help me pay the $600 off quicker. Listen, it's a $600 difference, so the minimum payment is based on what the balance is on the card. If you pay off the $600 one first, and then you turn around and pay the rest on the $3,000 one, it's still going to knock your balance down to almost nothing, all but $600.

Right.

If we're splitting hairs here, which we are splitting hairs, I would still do it the correct way just for the feeling of I'm done with this one, and now I'm going to the next one. Honestly, what we're doing here is we're teaching ourselves to submit to a plan and a way of life that's different from the way we've always done things. That's what's at the crux of why I'm telling you do it that way. Because like I said, we're talking about two bills here, Ken. It's not like we're talking about a long list of debts. Like I said, it feels like splitting hairs, but there's something to that that I think is worth noting of saying, You know what? There's a plan that I said I was going to follow. I'm just going to submit to the plan. The plan says smallest to largest. I might have my thoughts of thinking why it should be different or why my situation could be different. But there is something to be said for that practice of submitting to a plan and doing it for the purposes that the plan says, which in this case is to feel that quick win, and the interest doesn't have anything to do with it, and the monthly payment doesn't have anything to do with it.

It's just those quick wins piling up. That's why I would do it that way.

Awesome. That sounds great.

Thank you guys so much. Yeah, you got it. Listen, what I want to clarify here, listen, if she goes home and she's like, Listen, I want to do it that other way because I like that, lightning is not going to strike her. But I just told her that- I agree with you.

She's still going to have $600 to pay off. Exactly. It's one way or the other.

It doesn't matter.

But I will say, I agree with you, Jaden, because you could almost hear the psychology in her voice as she was like, If I pay off the three, I only have to do $29 a month. That's the whole point when Dave devised this thing. Yeah, it's not about the monthly payment. You don't give yourself this little out to go, Well, I only have 600 left on this, but it's only 29 a month, so I could fudge here. That's why. It's all mindset.

It's all mindset.

So great advice Let's go to Warren now in Houston, Texas. Warren, how can we help?

Hey, man. So essentially, in a nutshell, my wife quit working because we decided it was going to be best, and we're going to try to make it work for her to stay home and just try to live off my income. And that income is 62,000. She was a registered nurse, so that income going away, there wasn't nothing, obviously. How much? I'm looking at a pile of debt, and I'm just trying to get out from under it and just get- How much was her income when she was a registered nurse?

How much did she bring home when she was a registered nurse?

She was roughly $30 an hour, maybe right around the same, about 60,000 or so.

You've taken a cut of 50%?

Essentially, yeah. That was a couple of years ago. We've been living off that for a little while, but like I said, it was a hit.

Okay, so because we've got about three and a half minutes, quickly lay out for Jade what your actual debt is, smallest to largest.

The smallest would probably be student loan, 3,200. My wife's car is about 5,300. My truck, about 8,000 left on the note. Medical, about 10. I also have an investment property that's got about 90,000 on it Okay.

And how much is left on your personal mortgage?

I got a tractor that's about 2,300.

2,300 on the tractor? Yes. Okay. And then go back and tell me, sorry, I talked over you, the property, what do you owe on it?

The investment property was 90,000.

Okay. And then your personal mortgage, what do you owe on it? Just curious.

I don't have a mortgage.

Oh, you guys are renting?

No, we own the house.

Oh, you own it? Outright. Okay, great.

What's the investment property worth?

Ballparking, if I had to guess, probably 120 if it was on a high end, maybe 130.

Okay, got you. Listen, if I'm you, you could sell the investment property, but there's part of me that feels like, Are you guys on a budget?

As far as what?

You're not on a budget.

There's your answer.

Like a general day to day budget? Yeah. I got a budgeting app that I've done recently, and I started putting things into that.

So yeah, it's the budget things out. Okay, you're starting a budget. I'm happy to hear that. I hope that you're using the every dollar budget because it truly is the best way to budget. But I think when I'm looking at these numbers, I'm going, Okay, the debt is not astronomical. I really truly think that you guys need a plan for your money. $60,000, $62,000 you're bringing in. Your highest debt is a $10,000 medical debt, and then your truck is $18,000. That makes it $18,000. The rest of it is just little ankle biters. So I might be of the mind of, is your property Property cash flowing, or is it just not really doing much?

It's cash flowing. It's about $6,000 a year.

I have a radical idea. Sell it? It's radical. How long has the wife been home?

About two years now, so I have a daughter that's two, and I have a relatively- I got to tell you something.

The hard conversation that I'm having with my wife in this situation is, go back to work, the kids will be fine. It's such a small amount of debt. I know. If we double our income, you can work the debt snowball fast. I know that's crazy.

Then you can keep the income property. Am I crazy, Jay? No, that's right on right.

For a small amount of time, just to pay this debt off.

Look at his split. Doink.

I think it's a tough conversation. Kids will be fine. You need that income. That's the fastest way.

Rn, come on. It's either that or get rid of the income property.

Yikes. This is The Ramsey Show. Welcome back to The Ramsey Show, America, where we help you win your money in your work and in your relationships. I'm Ken Coleman. Jade Warshaw joins me. We are here for you, 888-825-5225. We're going to get coached up. Nothing to be scared of. We're going to take good care of you, give you some honest coaching, and cheer you on. 888-825-5225. Okay, before we get back to the phone, Jade, I saw a headline the other day, and I didn't dive in.

Yeah.

But I know you have, and I know you've got an opinion. Listen. I am seeing that now In our outrage culture, some student loan borrowers are going, I'm not going to pay. I'm going to protest. Wow. Now, that's one thing to protest in the streets over a political candidate. I'm all for that. Or some civil society problem. But this is not that. You borrowed the money, and now, am I hearing this right? Am I reading the headline right?

Yeah. What? Listen, that's my take on it as well. Some student loan borrowers are refusing to pay out of protest. The article says, Millions of borrowers with existing student loans still have not made a payment since the bill has resumed in October after a three-year hiatus. Some admit that they're refusing to pay for spite, strictly out of protest. I'll show you. In an Intelligent. Com survey conducted this month, 1,000 federal student loan borrowers. 25% of those people said that they had not made any payments at all. 9% of that 25% said that they were holding off on paying their bills intentionally in an effort to pressure pressure the government into canceling their debt.

That's going to work.

Oh, man. 44% said they believe their protests will lead to cancelation of some federal student loan debt. And 28% think that it is likely that this boycott will convince the government to cancel all student loan debt.

That's like me believing if I commit to leg day, that I'll be able to dunk a basketball.

Listen. It's not going to happen. Listen. Ken Coleman.

I don't have the fast twitch. I don't care what I do. I can't dunk a basketball. When I hear this- What is happening?

I only hear it in a whiny voice. Make it stop. You nailed it. I only hear it in the voice of my three-year-old when she doesn't get her away. It's time to let it go. Can we just let it go, guys?

You let it go. Let it go. Let it go.

It's time to let it go and finally accept the fact that these student loans are here. But I understand. Let me just say, Ken, I understand why people are starting to feel like maybe there's a way. You remember on Dumb & Dumber? Yeah. So you're saying there's a chance, right? Yeah, one in a million. Yeah. What's happening is this administration does keep dropping these little breadcrumbs of forgiveness that is making people feel like maybe there's a chance. I know earlier this month, Biden- That's a Great point. Yeah.

Biden did one- Because that was dangled for well over a year.

It's still being dangled. Biden just did another one that says that they're going to forgive people who have $12,000 or less of student loans. That's the headline, but the underlying part says, And they've been paying for 10 years already. I'm like, If you have $12,000 of student loans, and it's taking you over 10 years and you still haven't paid them off, there's something wrong with you, not the government at that point. Just throwing that out there because you can do that with Instacart. You can pay off a $12,000 student loan in one year with Instacart.

You got to show me how to set up an Instacart on the commercial, bro. Listen.

I hear a lot about it. The problem is people are thinking to themselves, I can get away with just not paying my student loan. If I don't want to pay it, I'm just not going to pay it.

I think I'm going to try this with my taxes this year. I'm going to tell my accountant that I'm protesting in hopes that the IRS will see the error of their ways. I think it's that ridiculous. I think it's the same level of ridiculousness.

But this is the perfect situation where we apply that adage of it's drinking poison and expecting the other person to die. Because the The government is in their office with their feet up on the table eating a ham sandwich while you're destroying your credit, you're making it hard, next to impossible for you to ever buy a house, you're setting yourself up for them to harness your wages.

Okay, I'm glad you're talking about this because the real, real is what? How long does this protest last before they start cracking on them?

Well, the first thing that happens is when you don't pay your bill, it's like, Okay, you're late. Then it goes into- Fees. There's fees, 6% in some cases. Then you go into default. If If you stay in default for long enough, then you go from owing what your missed payments were to owing the entire balance right up front. It escalates very quickly. What happens there is when that takes place, it's like, all right, you're not going to be able to ever qualify, not that I think that you need to, but you take yourself out of the running to ever qualify for any payments, forbearence, deferment ever again because you've pooh-poohed on it and said, you've basically given the government the finger. And so at that point, you've truly screwed yourselves in many ways. And I'm like, Can you imagine you go to work and you don't even get your paycheck because they're able to garnish a certain percentage of your paycheck?

That's what people don't realize. Yeah.

They can hold your passport.

You know what? While you're protesting, while you're protesting, they can do those things to you.

And the thing is, you think that these people are losing sleep over this in the government? They don't care about that. They don't care about you.

In fact, they make you a poster child for vengeance. Listen. I'm telling you, there's nothing... You know that old phrase? How does it go? It's nothing like a scorned woman. What's that? I messed that up.

It's something along the lines. Something about a woman scorned?

A woman scorned. Let me tell you what's worse than a scorned woman. I don't know. A scorned bureaucrat. Oh, gosh. I'm telling you, you take a DC insider, they're all about regulation. You hack them off. That's it. They're coming for you. I promise you right now.

Listen. There is no protest. It's over. I just need people to understand it's over. I do want to appeal to some folks because I get it. People feel cheated, Ken. They feel lied to. They feel lied to, and they feel like they're owed something. I totally get that. Anybody who's had student loans feels that. You feel like, Hey, I did what my parents told me. I did what everybody told me, and now here I am. I shouldn't have to deal with this alone. I just want to remind you that you can't blame your way to a better life. You have to start working and pushing your way out of that because otherwise, you're just going to stay there. You're going to get resentful. You just become fated glory.

I like that.

I got a question for you. It's like when you were good at high school basketball, you were good at basketball in middle school. I was. And people, you just keep reliving it and keep replaying. It's like, let it go, man. Yeah, really. Right now, you're a loser. That's why I shouldn't be playing pickup.

That's exactly why I don't play pickup at lifetime because the glory Days are so far gone. The glory Days are over. I can't even remember them. All right, now I have a question for you. Okay, because I think you make a very good point that these people feel lied to. But how should those people feel that way when you got people like me and my wife who paid off our student loans, and let me give you one other demographic, the youngsters that are signing up for student loans as we speak.

Well, everybody feels like they're the exception, Ken, and I get that. Some people are like, Listen, I signed for my loans. I know I signed for I knew it was going to be 60,000, and I understood. Other folks feel like, Listen, my parents signed for these loans. I never really understood. Some people feel like they were never taught how interest works when they were 18. There are true and valid reasons to feel cheated, and I never want to take that away. But the fact of the matter is, you may never get that apology. You may never get somebody giving you what they owe you. That is just a tough and hard reality of life. And then you have to look back on yourself and go, Okay, what am am I going to do about it? Am I going to wait for somebody to take responsibility in my life for my life, or am I just going to go, You know what? You screwed me. That wasn't right, but I'm going to go ahead and clean up my life because I'm not waiting around for the likes of you, government, to do what I can do myself.

That's really just the attitude that I want people to take on for themselves. All right. I'll tell you. We know that can be done. We see it every day.

I gave you the shot. You did a great job. I'm going to be a little bit angry about it. All right. I'm tired of the fairness doctrine. I'm tired of the fair crap. Let me tell you why. I feel that. For those of you out there who don't think it's fair that Uncle Joe didn't come through, let me tell you about fair. It's not fair that I paid my student loan off and you thought you weren't going to have to pay yours off. Let me tell you what else. It's also not fair that a whole host of young people every year has had to sign up for student loans.

And make it clear, Ken.

It's not fair that they have to pay and that I had to pay, and you, Snowflake, don't have to pay. I'm sick of fair. Life isn't fair. Life is hard. Life sucks. Life can be great on the other side of hard and suck. You know how I know? Because I've had it hard and I've had to suck. Come on, Ken. And my life is great right now. Around the world and back to now. So I'm tired of fair. Life isn't fair, you little Snowflake. Get inside or you're going to melt. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. The phone number for you to jump in to get some advice about your money, your work, and your relationships is 888-825-5225. 888-825-5225. Minneapolis, Minnesota is where Craig is joining us. Craig, how can we help?

Hey, thanks for taking my You bet.

What's going on?

I've got a question about contributing toward educational expenses for my kids, and I've got it needs my advice on two different sides. I divorced in 2020 and really leaned into the Ramsey principles that was able to pay off $80,000 to $90,000 of debt. Way to go. I'm sitting in a much better situation financially. For my first marriage, I had four children, and then I remarried last year to a woman with two children from her previous marriage. Wow. As it relates to educational expenses, her children should have their education covered, one, because my wife was in the military and because she didn't use her educational funds, her mother could wrap that over and put that into her daughter's name. That's great. That covers that side. On my four kids, there is no saving. There's nothing for them. They're 16, 14, 8, and 6. So feeling a little pressure on that. I'd like to start doing something. I have a really good income. I'm about 160. My ex-wife has a very similar to maybe even slightly higher income than I do.

Okay, what But has not followed any of the same principles which led to trouble in our marriage and all this other stuff.

She doesn't have her debt paid off. She doesn't have all this other stuff. She's spending like she's in Congress and new boats and campers and blah, blah, blah, blah, blah, right? So A, should I even approach her to say, Hey, I'd really like to do something for the kids, knowing that she's probably going to say, Hey, I can't do that because I have my own stuff to pay for. And if I choose to want to do something for my kids, how do I not have resentment toward her that she's spending your money having fun, and I'm trying to better the future of the children?

Why would you care if your ex-wife resents you because you're putting money- No, he's saying him resent her. Oh, I misunderstood. I apologize.

Me having resentful toward her is that I'm sacrificing to better them, and she gets to be the fun parent and do all the trips and- Well, you got to rise above that.

Yeah.

Why? Yeah.

It still sucks. That's going to come out in the wash, though. As they get older, they're going to see the reality of what's really gone on here. Right now, they're young and they don't know the difference, but just trust me, that'll come out in the wash. What I would say is it can't hurt to go to her and say, Listen, I'm thinking about the kids college. Here's what I'm thinking about doing. Is there anything that you'd like to contribute? If she says yes, take what can get. If she says no, then move on. Dust it off your shoulders and keep rolling and don't even really give it another second thought and feel good about the fact that you are doing what's right and you are providing for your kids. Let's just talk about what that looks like on your end since you're most likely going to be the one providing the most, if not all. What could that look like? You said that you've paid off 90,000 of debt. Is that all your debt gone or do you still have some to go?

No, I'm free and clear.

Okay, perfect. Do you have some savings for yourself? Three to six months?

I've got three to six months expenses. Last year, we bought a new to us vehicle for my wife. We have a networth, probably in that 6,000 to $700,000 range. Just for clarity, we're 37 and 39. Okay. We're in a better spot.

Are you investing 15% towards retirement?

Both of us are investing 15% in a Okay, so here's the deal.

You got a 16-year-old is too late for the 529. You're not going to be able to do enough for it to matter. What was the second age? Fourteen. Fourteen. Yeah, you're in that situation there. You're looking at scholarships and cash flowing and all That's what we're looking at. Now you're looking at the youngsters, and it comes down to what, Jade? The line item of what he can actually do each month for the littles?

I just want to make sure. It sounds like you and your current wife are on the same page with money. Is it just you putting your income? Or are you guys in agreement that we're both paying for this?

Yeah. That's where it gets in. We've combined everything together. We're living as one. We have a different mindset as it relates to how life works with money and kids and everything else, because while she had a family that had a lot of money, they were very controlling with it. She has this negative side viewpoint of money, where I'm like, money is opportunity and everything else. She has a hard time with me saying, Hey, I want to pay for my son's car insurance. She just has that- She feels like they need to make their own way.

Is that what you're saying?

A little bit. My 16-year-old works 14 hours a week on top of school and everything. So he's making money, but he has a life and a girlfriend and everything else. So where struggle a little bit is because I make 4X her income, I make 160, she makes 40. She already feels inferior with money. So when I'm trying to do things and trying to make smart financial decisions, she feels like I'm taking the reins, and because it's my money, then it's my decision.

You guys need a marriage counselor. Craig, listen to me. You guys need a marriage counselor. You guys got to get on the same page with this stuff. She's dragging baggage in. You got baggage.

Yeah, I agree.

Jade, give the financial advice, but I just have to say that.

I think that I can tell you what I think numbers-wise, but I truly agree with Ken, and that's normal. We're not saying that in a like, You need counseling. Listen, I go to counseling. Everybody needs counseling. We're just saying that in a way that it's easier to just iron this stuff out when you have a mediator there and that they can have an unbiased view of what's going on. It really does help because I do think that, especially in this conversation, because it does involve kids' college, and they're going to be able to look back on this and say, What did my mom and stepmom do? You want to feel like you're entering that on one accord so there's no intentional negativity that the kids feel as to how their college is being paid for or anything like that. That being said, I do think that you need to start planning for this now and starting to set aside money now out of the budget. However it is that you guys budget your money now, I hope that you get it on one accord. But for now, just start putting that money aside. You guys do need to get on the same page with this sooner than later because I think it's going to make it...

The deeper you get into this, if you don't deal with it, it's going to start erupting even more and causing. Right now, it's bubbling underneath the surface because nobody's in college yet. But when that day comes, you're going to start to feel it if you don't deal with it now.

That's right. I'm actually less concerned with you feeling resentment towards your ex. Now, I'm starting to worry about resentment towards your current wife. I agree. That's what I'm concerned about. That's the one that's more important because you guys are joint and you're on this new life. I think Jade's right. I'd get control of this now. This is not an emergency. It's not a fire, but she's got some trauma over money. Let's just be honest. That's not her fault. She comes from a controlling family. I do think that you guys having a healthy conversation with the therapist, like Jade said, I think that's going to be huge because you are feeling this pressure and this duty to fund your kids. If you feel in any way that she's holding that up, that's not good.

Yeah, I agree. He also needs to start thinking through with himself and bring the wife into this conversation, what it is going to look like for the kids college. Are you planning on paying a full way for all four kids? Are you planning to do half and half? Start up with, realistically, what the financial plan can be, and you need to start talking to the 16-year-old about it now. If you're saying to him, Listen, this is my max amount that I'm putting in. You need to have a state school. At the very least, start having those conversations about the expectation so that when the time comes, there's no, I didn't know that, or, You never said that, or I just assumed you don't want that. So really be clear about what the situation is going to be. No one said that you have to pay a kid's whole way through your college. Let me make that clear. Great stuff.

She's Jade Warshaw. I'm Ken Coleman. Don't move. More of The Ramsey Show coming right up.

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Welcome Back to the Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. The phone number for you to jump in for your coaching call is 888-825-5225. Jade, you got something?

Speaking of coaching calls, Ken, we are doing something that's never before been done. This is a brand new idea that we have, and it starts next week, Tuesday, January 30th. We are going to do a Ramsey show after-hours situation, where we are going to stay after the Ramsey show. We broadcast three hours every day. Who's we? Am I invited to this? This one ain't you, Ken. This one is me.

I had a feeling I wasn't invited. I never get invited to these things.

This one is me and George Campbell with a K. We are going to stay after and answer all your questions about budgeting. And not only are we going to answer questions, but we're literally going to have every dollar, which is the world's best budgeting app, we're going to have it pulled up, and we're literally, whatever the question is, we're going to exactly show you how to do it. Oh, a live demo. Not really a demo. If somebody pulls up and is like, Listen, how am I supposed to do sinking funds? We're going to show them how to do sinking funds. If they're like, I don't have enough money in my budget, what can I do? That's cool. We're going to show them how if they make an extra $500, how it's going to affect their budget, show them long-term planning. We're going to show them financial roadmap, all of that stuff. It's very interactive. It's going to be very fun. It's going to be for an hour. Again, the first one is Tuesday, January 30th. It's right after the Ramsey show, so 05:00 PM Central Time. If you're watching on YouTube, which is the best way, you can even call in.

You can put your questions in the chat, you can call in, and there's going to be somebody feeding us the questions. I think it's going to be awesome. It's real-time. Sounds fun.

Yeah. Sounds fun. Very helpful, by the way. Yes. You're going to do it in every dollar? Yes. Yeah, by showing them how simple it is.

Okay, good. That's great. You'll see us on the screen, and then you'll see every dollar right there. There's no excuses.

Everything is- Hit the sign up details one more time. I think it would be good.

Well, you don't have to sign up. You just have to be there. It's Tuesday, January 30th, and it's right after the show. So just go on to our YouTube channel.

Just get to the YouTube channel for the Randy show.

And you'll see it on there as a last stream. All right.

Book it, folks. Make the appointment.

It's free.

I love it. Let's go to Greg now in Chambersburg, Pennsylvania. Greg, how can we help?

How are you doing, guys? You guys are awesome.

Thank you. You, too. What's going on?

I just want to say thank you. Yes. I've taken your course probably a couple of years ago, me and my wife, and we got $90,000 paid off in two years. Nice. Well, basically, we fell off the wagon. I got a settlement from an accident. We'd made some stupid decisions. Now we're back in the dead about $55,000. Wait a minute. We bought vehicles, we bought time share. Wait a minute. We've done all kinds of stupid stuff.

Was it we?

Yeah, it was we. Why? I take some credit for it, too.

Tell us what happens where you pay off 90,000 and all that hard work. With the settlement. Then you decide to just start borrowing again. What's going on?

I don't know. We just got away from it. I guess maybe having that money just got to us a little bit.

More money, more problems.

I'm not sure.

How much was the settlement?

Basically, it was $42,000, $43,000.

Wow. Okay.

And basically now, my wife just recently, We need to get back on the budget. We need to get back on the budget. I was like, You know what? If you want to go full force and do this, then yes.

Yes.

I'm all in.

Okay.

Okay.

Go ahead. No, No, I'm with you. I'm like, If you're going to do this full force, let's do it. I just want to make sure that we figure out what it was that caused you to pay $90,000 off and get a windfall of over $40,000 and somehow end up in $55,000 of debt. There is something I wish Dr. John Deloney was here to help us uncover, but I want to make sure that... Listen, I want you to go ham and pay off this debt again. But more than that, I want to make sure we get to the bottom of how the heck this happened, right?

I totally agree, but I suggested to my wife that we sell her car, Carvana will give her 25K and put my truck in it because it's $672 a month on the payment.

Okay.

I'm with it. I want to try to eliminate that, but it's basically… We get rid of the timeshare, obviously, but it's hard to convince her to be on board with all that. Why? She's down with. I don't know.

And that I don't know, is the most important thing in this entire equation, because we got to know. Because you can try to do this alone, but it's not the right way to do it, and it won't last because she's going to keep putting you guys in debt.

Basically, my question is, what is your all suggestion? Am I wrong for asking this? No.

I think that- I just don't know what to do. You've had a moment. You've hit on your own accord. You've hit that I've had a moment of, wait a minute. We're going in the wrong direction, look at our life. You, on your own, have had that self-realization moment. She hasn't had it yet.

I don't know. Basically, she says it's time. It's time for us to be on the budget. But I don't think she wants to be full force. I think she wants to just- Why do you say that? Have pick it here and there because she don't want to hear the time share. She don't want to, I guess, maybe drive a lesser of a vehicle.

She wants to be on a budget so that she can manage the debt.

She just wants to manage the money going forward, but she doesn't want to have to give up anything in order to do it.

That's exactly right.

Maybe that's what it is. I don't know. Listen.

No, I don't buy it, Greg. You do know. You know what's going on.

She's being a princess.

A hundred %. She doesn't want to be responsible. She wants all the benefits without the hard work.

And you guys got a little bit of money, and you were able to floss it a little bit and show it off. And she doesn't want anybody to see you guys go in the other direction. I got a call of spade to spade on that, and that's what I think it is. I think that she's more concerned. This is just me, based on what you said. It sounds like she's more concerned on how it will feel and how it will look than what you guys will gain from doing this.

That's exactly what it is.

I'm not trying to bash her because I'm a cop for a lot of stuff, too. You know what I mean? Sure.

But I've done some stupid stuff. Greg, this is a marriage issue at this point because where this goes is this begins to divide you two. Listen, I'm not saying that this is a five-alarm fire, but this is a marriage conversation to say to her, Here's how I feel. See, don't make it about her. Make it about you. Here's how I feel. Here's what this debt does to me. Here's what these payments do to me. Walk her through it. This is how I feel. Do you feel this way? Maybe ask some questions after you tell her how you feel and say, How do you feel It's about how I feel? Because I think we got to get all the feelings out on the table so that we know what we're dealing with. This may be, I think it's at least a couple of sessions with a good marriage therapist to walk you all through how you're seeing things differently, and you both share your emotions on this. Let's see where she's at on this, because maybe you haven't framed it the right way.

I don't know. Well, I'll frame. I'm going to do Greg a favor because there are certain things that I can't say, or he'll be RIP. But I can say it because I'm here.

I like this.

I'm here. There comes a point in time where we have to become adults, and we have to act like adults. The child inside of us kicks and screams and wants what they want. But let me tell you something. If I went to Sam Warshaw, my spouse, and I said, Listen, we're wilding out right now. We paid off $90,000, and somehow we're in $55,000 of debt. It's time for us to act like adults and sell our stuff. If he said, Well, I don't want to do this, and I want to keep my car, though. I would be like, Boss up and sell your car. And that's what I'm telling your wife. It's time, Mrs, that you get on the same page You got to sell your car, mama. You got to give it up. And I know that your friends are going to see it. I know you're not going to be able to go to the Panhandle and have your weekend vacations and your time share. But you got to boss up and you got to do this the right way. And your husband wants this, and he loves you.

I say because it's worn me out. I mean, I've had to pick up a second job and all that. You know what I mean? I'm working from sun up to sundown. So it's exhausting, and that's where I'm at. It is.

I'm that exhausted. Greg, she's got to know how you feel, too. Jade's right, but you got to say, because if she wants to be married to you, then this will be a wake-up call.

That's the reality. Because you won't be able to go on like this forever. Wow.

That's tough. That's so tough. Greg's working sun up to Sunday.

Working during day and night.

Greg's afraid to put his foot down.

It's not like a man versus woman thing. It's we're adults. We're adults. Do adult things. Make yourself uncomfortable.

Great hour, Jade Warshaw. Always great to be with you. I want to thank James Childs and the crew behind the glass to keep us on the air. Thank you, America, for listening. This is your show. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically with your money, in your work, and in your relationships. The phone number is 888-825-5225. That's 888-825-5225. I'm Ken Coleman. My fabulous colleague and friend Jade Warshaw joins me, our money expert this hour. I'll help in any areas of work and pipe in, and we both weigh in on all the issues here that you've got before you. Here's what we know, you can win because there's a clear path, and we want to help you see what that is. All right, let's get to the phones. New Orleans, Louisiana. Man, that just makes me crave a little Cajun. A little bit of Cajun food. I don't know why. Poe boy. Yeah, that's very nice. Louis or Louie, how How do we say it?

Lewis, sir. Thank you. Lewis.

Excellent. How can we help?

Yes, sir. I appreciate you guys for taking my call. I just wanted to start with that. I'm actually calling in on behalf of my mom. About four or five A month ago, she was just completely misinformed about bankruptcy. We don't have really no financial… I just started listening to Dave Ramsey about a week ago and been learning a lot. She was misinformed about bankruptcy. With the info she got, she was convinced that that was going to be her best option for her situation. But what she didn't realize is that when she went to go see the lawyer, he basically let her know that she had to sell her house Which basically caused her to have a mental breakdown, and immediately she looked for option B. A little breakdown. My mom's all about just family. Other than human beings, her house is the most important thing to her out of anything. My mom and dad actually built that house with their own hands. My dad passed away in 2010, but the house was built in 2005. She would never sell a house She would never do that. So with that four or five months, she was like...

Because she thought that that's what she was going to do, it led her to... She did home improvements and had dinner work. She did some things that she would have never did had she not thought that would be wiped away, if that makes sense. Yeah.

So where is she now? The bankruptcy has taken place. They've sold off her assets.

No, she She found out about it, and she just left. She didn't do the bankruptcy. She just left. She didn't go through with the bankruptcy. So now we're looking for option B, which- So they didn't sell the house? No, she never did nothing with them. She went to see how it worked, and then they told her, All right, well, you have this and this and this. So they're going to definitely make you sell your house. And then once she heard that, her heart dropped, and she was out of there.

So nothing's happened yet?

Nothing's happened yet other than me reading the total money makeover and trying to beat everything in her head.

That's pretty much me. Okay, good. Keep going.

All right. So where she's at, I've been watching the show, I have an idea what you all ask for. So her consumer debt, which is the only debt she has other than the mortgage, is 100,000, okay?

Okay. Can you break it down?

The mortgage is just all credit cards, 100K, all credit cards, different credit cards, but just credit cards only. Okay. This is a course of... Leading up to this, last four months, she had probably a 700 credit score, so obviously, she could get credit anytime. That's what she would do. She would help people, let her family go on vacation. Mom, I need to borrow this.

But now she's deeply in debt because of it.

Exactly.

So what income does she have? What income does she have?

She makes about 4K a month. She brings home 4,000 a month. She has about 26,000 in cash saved. She also has another 9,000 in Bitcoin that she could liquidate. She has retirement for work. She has no student loans, no other debt. She has three vehicles paid off completely.

Do you know what each of those cars are worth?

She has a Slingshot that's probably worth about 16,000. She has a Corvette that's probably worth about 10,000 to 12,000. And then she has her everyday Yukon truck that I think she bought it for like, 6,000 last year or something.

Okay.

That's the three vehicles. And that's her daily driver, the third one?

The third one is the car she uses. My mom's a school bus driver, so she just needs one car. So my mom's one of those people. When I listen to the book, she's like, she don't want to That whole don't want to give up all the things I have. It's really do what you got to do. I know what she needs to do as far as... She should definitely sell a Slingshot, sell a Corvette, but she's like, It's only 8,000. That's not a big deal.

No, it is, because when we're looking at it, she's got $35,000 of money she can get a hold of, the cash plus the Bitcoin if she sells it off. Then she's got these vehicles, 34,000 in vehicles. Listen, that's $70,000 right there. Exactly. If she does that, now she only has $30,000 of credit card debt with her income, which suddenly this becomes a, quote, more normal situation and a much more easy to tackle situation. Here's what I want you to understand. Number one, you're a good son. You're great. And you get it. There's no argument from you. I can tell. The person we've got to get on board here is your mom. And so I can sit here and tell you, listen, make sure she sells these vehicles, make sure she liquidates that Bitcoin. Make sure she pays off this debt. Keep $1,000 aside. But you know all that. The question is, when you come to her with this, is she going to do it? And what are you going to do if she says no?

So basically, like I said, this is my mom. She's done a lot for me. So given the fact that how I know she is, that So basically, what I'm doing to help my mom... I don't have a house, and then I just rent. My bills are 1,700 for my monthly expenses for my house, right?

Okay.

My mom's expenses at her house are probably about 2,200, okay?

Okay.

So next month, starting March, my mom has a really nice-size house, and she's the only person that lives in the house. It's a five-bedroom house, and she only lives.

Please don't tell me you're about to move into this house.

That's what it sounds like.

And that you're going to pay that bill.

Right. So I'm moving into my mom's house. Yes. So I'm moving into my mom's house, and basically, I'm going to just, instead of paying the landlord that I have right now, my rent and stuff. No.

No. No. No. I got to put my foot down. If you're calling Lewis and asking us honestly what to do, it's not this. Your mom, I know you love her, and she's the most wonderful woman in the world to you, and she is, and she should be. But it doesn't take None of that takes away from the fact that she's an adult, and she has made these choices. She's not disabled. She's not without mental function. She knew what she was doing, and she made those choices. And it's very hard for us as kids to accept that. We want to say, well, they needed me. No, they were grown. And if you move in, you're getting yourself tangled up in a way that you don't need to get tangled, and you're going to end up setting your personal family back, trying to fix your mom's financial situation. Give her the information. You've been a good son. Keep being a good son. Give her that information. But also understand you cannot make her do this. And you inserting yourself in her life is only going to make it worse for both of you. It's called enabling.

This is the Ramsey Show. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right the way, you'll have confidence to make smart decisions.

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Welcome back to The Ramsey Show. Jade Warshaw joins me. I'm Ken Coleman. We are here for you, 888-825-5225. Let's go to Dallas, Texas, next. Adam is there. Adam, how can we help?

How's it going? Good. How are you guys doing today?

We're having a blast. What's going on with you?

Everything's going good. Everything's going good. Hey, so I was just calling because I wanted to get a little bit of advice. I am currently contributing in a 401k and a discounted stock purchase program with a company I work for, but I feel like it maxed out as much as I can do for myself. I want to to figure out what I can do more to make my money work for me and set me up for the future a little bit better.

Tell us more.

I'm 23 years old. I currently make about $85,000 a year before tax. I have no debt except for a car loan, which is about $10,000. Okay.

So you do have debt?

I do have debt, yeah. But no credit card debt, no mortgage or anything like that. I have $14,000 in a 401k and about $11,000 in savings and about $5,000 in that stock purchase program.

How familiar are you with our baby steps?

Not too familiar. I've browsed a little bit, but not too extensively.

Okay. What's your living situation? Are you renting? Do you have roommates? You bought something?

I'm renting all alone. I live in a studio. My rent is about $1,400 a month.

Okay, great. All right. Sorry, I'm just writing I missed down. Okay, great. Listen, I think that you're 23. Honestly, for 23, I'm glad that you don't have a bunch of debt laying around. You know the $10,000 on a car, not bad. I love that you've got some money saved. I love that you're interested in investing and thinking about your future. So very good in a way of, I don't know, just the practices that you've kept. So I'm looking at this, and for me, it's cleaning it up and it's just making it a little bit more neat and getting a little bit more organized so that long term, it's going to serve you the best. Fair enough? Mm-hmm. So if I were you, when I look at this, I go, Okay, I see debt. And when I see debt, I immediately want to clean it up. So my first thought is, Let's pay off this car. You've got $11,000. The car is $10,000. If I were you today, I would pay off the car because for me, debt equals risk. Why have risk when you have the cash to be debt-free and have that piece? I would reach over and pay off that car loan today.

So when I say that, what does that make you feel?

I actually thought that crossed my mind a couple of times, but the way that I was thinking about it was, okay, would I rather have this money in this account that makes about 5% a year, or would I rather have it tied up? Well, it's not your money.

That's my biggest thought is we think it's our money, but it's not. Just because we're choosing not to give somebody their money, it's still theirs. Got you. Does that make sense? I do think reframing your mind of going, Okay, networth-wise, it's not really my money because I owe it. I'm just choosing to hang on to it. It's a false sense of security. What I would recommend if you are... Because we're going to get to that savings point because I know you're like, Listen, I'm earning a nice percentage on it. What I would do, once you've paid off that car, how much is your car note?

It's about $500 a month.

Okay. Suddenly, that frees up $500 a month that you can start to throw back into that high-yield savings account and build up that savings. For real, this time it's yours. You can build that up to six months of expenses. I think how quickly you could do that. Now, you'll have 11 or $12,000 sitting there, and it will actually be yours, and you won't have a car note. I love that plan.

Let's keep it going. Jay just walked you through baby steps one through three, right? Mm-hmm. $1,000 in savings for emergencies. This is baby step one. Baby step two is paying off debt, smallest or largest. You've got the one debt. You pay it off quickly, immediately, actually, as Jade said. Now, watch this. The $500 that she just walked you through, that you're going to start building up that emergency fund 3-6 months. Now, all of a sudden, that goes into you investing 15% of that income. At your age, how old are you again?

23. 23.

You started the question, how do I build wealth for the long term? Jay just told you. But you've got to own Baby Steps 1, 2, 3. For you, you're at Baby Step 2. You're immediately in Baby Step 3. The $500 car payment that you're going, Well, why don't I keep it? It's such a low. That goes into your investing, your 401k plus 15% and all that stuff. All of a sudden, my friend, Jay, paint a picture for him. He's 23.

I'm plugging these numbers in now. You told me that right now you've got 14,000 in your 401k? 401k. Okay. In your 23? Yes, that's correct. In 40 years, you'll retire at 63. Let's do an annualized rate of return of, I don't know, let's say 8% for all the haters. Be modest. All right. Let's just pretend that you're doing $500 a month every month. All right. Let's see what this calculates, too.

Boy- He's going to be excited. Listen. Should I do a drum roll?

Listen, drum roll that out. When you decide to retire at 63 years old, you're going to have $1.9 million.

Wow.

Just by you putting your car payment $500 a month.

That's just the $500 on top of your $14. That's what she did. So The answer to your question is, you're maxing out your 401k. What's your max yearly contribution? You're maxing that. You're going to max it, and then you're going to invest. That's just the $500 a month that we cleared up. Listen. My friend, you're loaded.

You will have only If you only do the $500 over that course of time, you will have only put in $240,000 of your money, and it will have grown to $1.914 million. That's at 8%. Listen, I don't know about you, Kim, but I've been looking at my annualized rate of return, and it's juicy.

All right? I am very excited. We're having our meeting next week, our annual meeting with our smart investor pro, the person that we work with, and it's exciting. Listen, Adam, I don't know if you caught that. That's if you do nothing else. That's if you do basically nothing else. You're in a situation- That's $500 a month.

That's $500 a month. All I did here is there's a million investment calculators. We here at Ramsey have one. Pull up that investment calculator and just plug in those numbers. Have fun with it. I put your starting amount in, 14,000. I put in 40 years because you're 23. Most people retire in their 60s. So I put 40 years. I put 8% rate of return. I said that it compounded annually. This is you putting in $500 a month, so you can check those numbers.

Got you to 1.9, Adam. The answer to your question is live on less than you make and invest. That's the big- Stay out of debt. Yes, stay out of debt. Kill the debt, live on less than you I'm excited. Adam, did we answer your question?

Yeah, you did. This is separate also from the 10% that I'm… This is just $500 a month, right? This is separate.

Yes. That's not even you at 15%. We didn't even get your 15% number.

Wow. We're just showing you- That makes it- Yeah, we're showing you the power of the compound interest. You can't be playing small ball with your little interest rate on your car.

Listen, That's a joke. Jay just blew your mind.

Blue your mind.

Listen, I blew my own mind because I'm looking at this like, wow, I'm excited for you. It's not even my life. Very, very good.

Adam, what are you going to do? What are you going to do when we end this phone call in 30 seconds? What are you going to do?

I'm going to go ahead and pay off my car loan. I think that's what I'm going to go ahead and do.

Tell him what he's won, Jay.

He's won $1.9 million.

It's that simple, though.

It is. I love that. He literally was the example that we tell people all the time. $500 invested monthly over the course of 30, 40 years, you're going to be a millionaire. And in his case, two millionaire.

Bananas.

It's Bananas.

B-a-n-a-n-a-n-as. I can't spell it.

That's impressive.

I tell you what, I can talk live on the air. I could do all the things. That one word is the only word I'm not sure about when I spell it on the air, which I'm not going to. You did a great job. Don't try it. Great advice, by the way. All right, well, we've just helped Adam see a clear path to be in a multimillionaire. What can we help you do? Call. We're here. Don't move. This is The Ramsey Show. Okay, guys, I'm just going to say it. It seems like a lot of tax software out there wants to keep you in the dark about how simple tax filing can be so they can pressure you into add-ons that drive up your bill. But Ramsey SmartTax is the classic blue jeans of tax software, not skinny, not bedazzled. It just makes things simple, easy, and exactly what you need. And you can save up to 70% compared to other tax software. And if you register for Ramsey SmartTax today, you'll get free resources to help you feel confident about filing. Just go to ramseysolutions. Com ramseysolutions. Com/smarttax, and see just how simple tax filing can be.

That's ramseysolutions. Com/smarttax. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me, and we are here for you taking your about your money, your work, and your relationships, 888-825-5225. Noah from Kansas City is up next. Noah, how can we help?

Hi. This is a weird question, but I just came out of Trade School as a welder. I have zero debt. I'm going on to my first job here in May on an offshore oil rig, and I just don't know how to split my budget up to make good financial decisions coming through as I get out of Trade School here. Right.

Hey, before Jade takes over on the budget, I'm just curious because I want America to hear this. What did Trade School cost you, and then what is your starting hourly rate or salary? Do you know?

I outright paid for my Trade School, and it was about 5,000 for two years.

Fantastic. And what are you going to make?

I will make, I think it was 75 grand as an apprentice. Listen.

All right, Jay, help this man spend that money wisely because he has no debt.

I just wanted to say, America, you've been told for decades that a college degree is the only way to success. Noah, how old are you, Noah?

I'm 20 years old.

20 years old. He's apprenticing, Jade, for 75K.

Making more than some of these folks with their degrees sitting on the shelf. All right. Very, very good. I'm just going to ask a I have a couple of questions because I have in my mind offshore oil, but I don't really know.

Is that a platform in the ocean?

You go away for a couple of months and then you come back, right?

Yeah. How this is going to work is I'll be working seven, 10 to 12 hour days for about a month straight, and then I'm off a week to just go and do whatever I want on land.

How far away… You go to the oil rig, that's out of one of these ports, I'm guessing. Then where do you live in relation to where you have to get onto the oil rig?

That's the thing. I will be most likely living at a hotel, but my company does pay for those hotel rooms while I'm off work, just so I don't have to commute back to Kansas, to Louisiana, and back and forth.

You're living on the rig, I guess, until you take your off week?

Yes. And all that's covered?

Yes. Everything's covered, from food to rooms to even laundry is even covered.

So on for a month, off for a week, and when you're off for the week, everything's covered. So are you cutting all ties then? Are you like, Listen, I have an apartment. I'm letting it go. I mean, that's what I would do. This sounds very much like I used to work on cruise lines. Obviously, your work is far more dangerous, but it's the same idea. You just go away and they pay for everything. And I just got rid of my apartment. I sold my car. We sold our cars. We offloaded a lot things because we didn't need them anymore. So I'm guessing you're doing the same?

So I do have a actual pretty nice truck that I have paid off already. Okay, good. So that's about 20,000 sitting here. I was living with my parents while I went to Trade School. I agreed with them. They agreed with it, especially as long as I got out of the house, as soon as I came out of Trade School, they were good with it.

And you're doing just that. So the question is with this truck. You know it's paid Is it going to be in a place where it's secure and taken care of? It feels weird to just have it sitting in the parking lot of a hotel for months on end. What's your plan there?

Honestly, as soon as I get out of Trade School here in about a month or two, I'm just going to sell it, buy a little beater car.

A little beater?

Yeah. Dude, I am like in this situation. You're going to save- I am so happy right now. So much money. Listen, my site's for you. Do you have any money saved yet? Any money saved at all?

I've got seven grand sitting in savings, and then about 2,000 in checking.

Okay. So how does he do a budget, Jade? I mean, he's got some spending cash.

My guy is stacking, just stacking, stacking.

So this is a very different budget because he has very little living expenses.

Yeah. I mean, it's great that they're covering your living expenses. I'm sure. Is it to a point or is it no matter what, you turn in a receipt, they cover it? Is it a stipend that you get?

No, I pay for my car insurance. I pay for phone bills. It's just the only thing I don't pay for is- Food and lunch. I'm not even home enough to eat groceries. I mean, just paying for it.

Okay. Yeah, but We need to ask a very good question, though, Noah. In that week off, do you have a per diem or are you just spending whatever you want? I'm steak dinner. I'm at Ruth Chris one night. Morton's the next. That's what she's getting at because that's where we got a bill.

We have 150 a day per diem.

Okay, perfect. That's probably just enough for you. What I'm doing, you have a budget just like everybody else. Yours just has very little line items, which is awesome. You're going to put on that budget, that every dollar budget, everything you can think of. You're going to put your income at the top, and then you're going to put your insurance, whatever else you pay for, a haircut, new shoes, whatever those things are that you can think of. Put it all on the budget, but you're just going to see a whole lot of margin there. But here's the key. I don't want it just sitting in your We're going to have a plan for that. Number one, you are going to be investing 15% every single month. You're going to stack up this savings a little bit more. Let's say stack up your savings to 25,000. I'd love that for you. Then start investing 15%. Every time you get a paycheck, 15% goes into a Roth IRA first and then into your 401k. Do they offer you anything like that, a 401k or anything?

Yes, they do.

Is there a match?

I I don't remember the number off the top of my head.

Okay. If there is a match, your first contribution would be into that account up to your match, which is probably a certain percentage of your salary, right? And once you hit that, you can go and invest 7,000 into an IRA, a Roth IRA. And then after that, if you still have money that you're like, Listen, I haven't hit 15%, go back to the 401k. And honestly, you should be maxing out your 401k and a Roth IRA. If that hits the money for you. But after you hit 15%, if you're like, Listen, my next goal is to save up. At some point, maybe you're not going to want to do this again and you're going to want to have a home. Then you're going to just start socking money away for a down payment. You can do that in a high savings account, or if you think this has got a 5-10-year track record, then you can invest that money. But you, my friend, are about to be loaded.

This is what's crazy. This That message doesn't exist. There's no national marketing message. I know, right? You know why? Because the federal government, they don't make anything off of Noah. The college and university system doesn't make anything off of Noah. Come on, Ken. The man's going out there, and he is going to be worth What would you take a guess if he starts at 20? I'm so obsessed with what you did with our last caller. Can we blow Noah's mind as well? Yeah, let's do it. Noah, wait for this. Watch what she's going to do.

If you're taken home, what was your take home pay? 75,000? Yeah. What do you think, realistically, that you'll have to put aside? If you wanted to put aside some money for investments? For sure, a thousand bucks.

Honestly, if you guys make up a number, I can make it happen. I'm pretty easy to live with.

Let's just pretend it's a thousand bucks, and you said you're 21?

And this is modest. Twenty.

A thousand. You're 20. Okay. For 40 years, you have a zero dollar starting amount. We're going to put it there for 40 years, 8% annualized. You're putting a thousand bucks a month. Let's see.

Stop it. What's the number? Stop it. It's way more than I thought. I can't see.

It's 3.2 million.

Noah. Noah. Now, listen, she put in a thousand to teach you something. You should be putting two grand a month, minimum away, because you have no expenses.

You have no expenses. Who knows how long you're going to do this?

Double it. Hit the two grand. Put two grand in.

Noah, wait for it. Let's say you get to two grand because you have no expenses. Two grand a month. Let's say you put two grand a month for 40 years, which you totally will do because you're The income is only going to go up, okay? And you have no debt. You might slow down to save for a down payment. But if we put it at 2000, 6.4 million.

That's insane.

That's insane. You're at 60 years old.

Oh, I'm slow clapping for Noah.

Here's the thing. We're talking about 60. But at 50, he's still going to be there. At 40, where's he going to be?

Way beyond everybody else who's 40. With their fancy degrees, by the way, still Probably in student loan debt. Noah, let me tell you something. I'm going to tell you you're the American dream because there's no nightmare of student loan debt for you.

You sure are. Wow.

How about that, Jade?

You all better play around with these investment calculators and get your hopes up.

I could do that every call. Every call. Go, J. J. J. Show him. Show him, Jade. I thought that was fantastic. That's crazy money. Great stuff. All right, quick break. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. Our scripture of the day comes from Psalm 1:27, verse 1, Unless the Lord builds a house, the work of the builders is wasted. Unless the Lord protects a city, guarding it with centuries will do No good. Our quote from President Teddy Roosevelt, Far and away, the best prize that life has to offer is the chance to work hard at work worth doing. Oh, great. Great stuff there. All right, to the phones we go. 888-825-5225. San Jose, California, is where Luke joins us. Luke, how can we help?

Hey, how's it going? Good. I'm in a little bit of a pickle here. I make a pretty decent income. I'm able to save a lot, and I want to buy a house. But the trick is I live in California. So even the worst house in the neighborhood around where I live is going to be about $600,000 or more.

What does that get you, by the way? How big?

What's that?

How big is that house?

I mean, it's probably 1,500 square feet. Goodness great.

Wow.

Yeah. Even though I make a pretty good income and I'm able to save, it just feels like the goal of owning a home is so far away, especially if I want to go the route of doing the 15-year fixed rate mortgage. How old are you, Luke? And only do I'm 28 years old.

28? Are you single or married? I'm engaged. Engaged? When's the big day?

In September.

Does she work?

She does work. She's a small business owner, but she just started her business, so little setback in terms of what she had to invest in the business.

What will be your combined income?

This year, I would estimate probably A hundred and 70,000.

Okay. Listen, I'm thinking about this situation. I think everybody wants to own a home, and yours is a situation where you've got to just, like John Deloney would say, Dr. John Deloney, you have to face reality. When you look at your situation, you have to ask yourself, Okay, what do we want? We want to purchase a home. In reality, can we afford a $600,000 home? If right now, obviously, the answer is no, how long will it take for us to afford a $600,000 home? And are we happy with the fact that $600,000 only gets us 1,500 square feet? You have to really honestly make a checklist, and I would make a list of those questions, and I would write down my answers because there's something about seeing it on paper versus it floating around in the air above your head. And when you see it on paper, I think that it can help you go, Okay, do I want to stay in this area? What gets us to the life that we want? Because Because I can tell you, I remember my sister-in-law, they lived in California and LA for the longest, and she was a school teacher, and he worked, I think, at Nintendo.

They were like, Listen, we're never going to have the house and the life that we want out here. We just can't afford it, and we love our careers. They moved to North Carolina or they moved to North Florida later on. I'm like, Listen, that's the choice they made when they saw their life on paper. I would suggest you do that because that's really what we're looking at. Of course, I'm going to say, Yeah, save for a down payment. Try to get 20% down. Buy a house where the payment is no more than 25% of your take home. You've got to look at that and go, Is that possible with my income where I live?

Yes, that's the question, Luke. That's beautiful, Jay. That's the issue. You guys move anywhere else in the country, and all of a sudden, this is not daunting.

I think with my current income, to get to the 25% of my take home pay, I'd have to have maybe We have $400,000 down payment on that $600,000.

Okay, so let's run this out like Jade just laid this out for you. How long would it take you to save up $400,000?

It'd probably take, I don't know, 10 years.

Yeah, so now you're 38. So how's San Jose feeling for you?

Well, I don't even like the area that's really because my family lives here. I want to be around them.

Well, these are the decisions. You have to those pros and cons because we all want to have it all. I'm not saying that that's wrong or bad or anything like that. But again, in the vein of reality, there is going to be part of you that goes, Which do I want more? To live near my family or to be able to have a home that we can afford? Is there something that we can meet in the middle? Because it's not to say that you have to move on the other Coast and move to North Carolina, but maybe I go to Utah, maybe I go to one of these other states where maybe I can find something where I can still see my family on a regular basis. Maybe it's a six-hour drive or an eight-hour drive. But I won't lie to you, those are tough decisions to make, but they do have to be made. Otherwise, you're going to look up and you're going to be spinning your wheels and like, I never moved forward. Why didn't I move forward? It's because you never made that tough decision. If you decide, Hey, I want to be by my family, then you're also choosing something which is you're going to live in a very small home.

Yeah. And waiting 10 years, I would like to buy sooner, but that's not so bad.

Okay. Waiting 10 years? Great. Great.

Listen- That's not bad either or wrong.

If you want to stay in San Jose, then that is determined. It's like looking 30 years down the line. Now we come back, we work backwards into what is it going to take to have this life in 30 years. If you're in San Jose and you don't want to be in massive amount of debt, and good grief, why would anyone settle for the norm, which is to pay 600,000 for 1,500 square feet. Such a bad value proposition. It's crazy. I would never just accept the norm for a bad exchange. I agree. I'm always going to let value drive what I think should be normal, and I get to determine value. If you're willing to wait, great. But listen, I don't know what that's like, Jade, because to be fair, I never one time thought for a second when I was young about staying near my family.

I was just thinking the same thing. It didn't even cross my mind. I was literally, as I say, stroking my beard thinking, what must it be like to be willing to wait 10 years in order to live by your family? Because I'm like, How do I get out?

No chance.

I'm just kidding. I love my family, but you know.

I do, too. But we're wired the same way. I feel like you and I made the big decisions absent of whether it was near family or not. If it was a big decision and somehow family was near, bonus.

Yeah, bonus. I I moved here to Nashville. It just so happened that my parents live here. That was a bonus. I wasn't like, I have to move to Nashville because I have to live near my parents.

Well, you had already started and led an amazing life a long way away. I don't know.

Yeah. Listen, if he It's got to make sense for him. If he and his wife, they decide, Listen, we're willing to wait 10 years. Listen, Sam and I waited 10 years before we bought our first house. So definitely not poopooing on that. Now, the value The exchange for me was worth it because the way the market was, I'm like, Yeah, I'll live in South Florida. We'll get a nice piece of property. San Jose is very different. He's not wrong for wanting to wait. I would still be looking and seeing, Okay, where can I live that's within driving distance to my family? A 12-hour drive, a 10-hour drive, a 6-hour drive.

I was thinking three. I'd start and go, Okay, on a and go, All right, let's just look and see. It's 360 degrees. Start with 3 hours. That's an easy morning drive, evening drive, and start looking and go, Okay, I can still be very involved. Because I I really wonder, unless you're one of those families, and I don't know what this is like, okay? Unless you're one of those families that just likes being around to each other all the time, how much do you think he's going to see his family, even if he lives within 15 minutes?

Listen, I know families who see each other almost daily. I do. Yeah, but do you think the average family does that? I don't, but I do know that there's families that do that. I wanted to ask him, is it just his mom and dad, or does he have lots of brothers and sisters, or maybe culturally, certain families, you're all in one home, and maybe he's the one that moved out, and so he's still trying to stay close. I get that. And by the way, there's nothing wrong with that. Culturally, everybody does it different. We're just here about the money, so we're going to tell you the money stuff. Oh, yeah.

That's what would drive me. I'm not kidding. It would drive me to live somewhere else. I would go, It's just too daggum expensive when you're buying what amounts to a starter house- Yeah, for $600,000.for 600 grand.

Yeah, it's tough.

Forget it. It's tough. Forget it. Interesting stuff. Great call. Luke, I love your constitution. Me, too. That you're willing to wait. We're challenging you to not have to wait that long, but good for you. No debt, man. It's going to pay off in the long run. Jade Warshall, always fun, my friend, to be on the show with you. Thank you so much to James, the entire crew. Thank you guys for keeping us on the air. To you, America, thanks for listening. This is The Ramsey Show. Dr. John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life, but they don't have to define you. The Dr. John Deloney Show is here to help. It's a collar-driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids, and so much more. Listen to questions from our callers, or if you're walking through a tough situation and need some help, give me a call. You are never meant to do life alone, and that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey Network app. Remember, you're worth being well.