Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by my good friend Ken Coleman. This is your show, America, so make it happen. Give us a call at triple-eight, 825-5225, and we'll help you take the right next step for your money, your work, and your life. My friend Ken here, he is the expert on helping you get to that work that you love, helping you get that bigger shovel, help you work on that greatest wealth-building tool, your income. Please call in with your questions for Ken as well.

Absolutely. We love being together. People, a lot of chatter out there on social media. So much chatter. A lot of chatter. We really do like each other. We have some fun, little jokes here and there, and we're going to have fun today. You said to me right before we started, Let's have a little extra fun today.

That was my encouragement to you since you're a fuddy-duddy normally.

Your words. It's a great word. The youngsters don't know what that means. But we're going to help some people today, so let's get to it. Fun and practical advice. That's what we're all about. How about that?

All right, let's do it. Miles joins us up first in Nashville, Tennessee, right down the road. Miles, how can we help you today?

Hi, yes. Thanks for taking my call. Question, I was in an accident on Thanksgiving. Oh, no.

You okay?

Yeah, I'm okay now. So the vehicle is a total loss. And at the moment, I don't have the funds to purchase another car. Now, I am currently using a family member's car just to get back and forth to work, but I don't want to use that for an excessive amount of time. What suggestions do you have that you recommend before I proceed?

Well, what the heck happened with insurance?

Yeah, so the insurance paid out, the gap insurance, essentially it paid out what I owed on the vehicle. I broke even. Now I'm starting fresh all over again with another vehicle.

What.

Income are you making?

I do about 45 a month.

Is that before tax or after tax?

Before tax, I'm sorry.

Okay. How quickly can you save up money for a car? Be realistic. What's that number?

Honestly, I couldn't really tell you. The reason being is because the vehicle was part of the biggest expense that I had, so I haven't even gone a full month of seeing what my income would look like without that, without the expense.

What was your car payment?

The car itself was about 270. But then because of the type of vehicle I had, I paid 400 bucks a month in insurance. I was, I guess, collective, right at 600 a month.

Two, 70 plus the four. You're talking you've freed up 670 a month plus gas.

Plus.

Maintenance and repairs. We can at least put that towards the savings on top of whatever margin we can find with this income. Do you have any other debt?

I've got some older debts and personal loans and credit cards that I've been actively paying down. Now I'm probably right at 10.

Total, for all of that. 10,000 in debt still? Correct. I'm assuming nothing in the bank, paycheck to paycheck right now?

I got about maybe 1,500 in savings at the moment.

Okay, that's a start. Let's say you've got this $1,000 startup, Remember to see fund. You have 500 bucks left over, and now we're going to get to the point where our one singular goal, we're going to make minimum payments on the rest of our debts. Right now, we got to get you some transportation. That might mean you're going to go down to your mechanic and go, Hey, guys, I'm looking for the most beater of the beater cars that someone gave it to you for parts, and you guys are trying to just fix it up and sell it. Do you have anything like that? Hanging around. I'd be calling every mechanic and dealership, independent dealership around to see what they have and what the lowest price car is. You might find one for three, four grand. You could save up three, four grand in a few months if you freed up that payment plus the margin you have from your.

Income and get busy. You're making those payments.

Selling stuff, extra.

Side jobs. Making more money. Right now, you're trying to come up with 20, 30 hours a week of hourly work to get this car funded. I'm pulling up. I love to do this. This is my favorite thing to do. Use cars for sale. In Nashville, under 5,000.

Well, I tell you this, Miles, I have confidence because I helped a Ramsey team member here get a car for two grand not long ago. Right. It's not a flashy vehicle, but it's running. It's still a.

Lot of- What were you driving before?

A 2018 Sonata.

All right. How long can you drive this family vehicle?

They're patient, and I can tell they're patient, but I want to get it back to them relatively quick.

Because I don't want.

To-what does that mean? Would they be okay for four months if they didn't have this vehicle?

I'd probably say maybe two months max.

Okay, well, I would get real good clarity with them say, Hey, I'm trying to save up. Here's my goal. My goal is to get you this car back in a few months. What's the urgency? When do you guys need this back by? Let's get some real facts.

Yeah, get clear. I almost wonder if they wouldn't be willing to have you pay for the car a little bit.

What's this car worth? Could you buy it from them? Or is it too nice of a vehicle for you right now?

So we talked about that as well, about the opportunity of me buying it. They declined on that because they want to keep it as a backup vehicle in case stairs goes down. They only have one.

Vehicle as well. What's your commute like as far as work goes?

10 miles, so not far at all. Like I said, worst-case scenario, I could walk if I have to, but I know it's going to be getting pretty cold here pretty soon.

Sure. But you could also, if you had to Uber for a few weeks, that's not going to be a.

Deal breaker. No, Uber. You can walk. I'd rather walk than Uber.

Have you walked 10 miles, Ken?

Have I walked it? I've never walked 10 miles. I've walked.

10 miles. There we go. I'm just saying, walking 10 miles in 28 degrees in Nashville.

I'm making a point. Sure. It's the principal. He doesn't need to be spending Uber money to get to work.

I'm just saying, worst case, if he loses this vehicle, it's not a deal breaker.

You know what? I sound like the curudgeon. You're right about the walk. He said it. I just went with it. I'd get a bike. You can bike in 10 miles pretty quickly.

I had a buddy of mine that lived on my bedroom floor because he needed a place to crash and he would bike to work at TGA Fridays back in the day. He survived to tell the tale.

It's been done before. This guy is in a situation here where he's got to scramble. You can come up with it. But I'm telling you, I'm looking at cars right now.

Well, I can tell, Miles, you wanted.

3,500 will get you a decent car for a season.

Yeah. I'd start looking around, start doing your homework while working these side jobs. But my guess is within three or four months, you've got a Beatrice car, and that's okay. Six months after that, you can upgrade that by a few thousand bucks, and you're going to be out of debt soon, and this will be a blip in the grand scheme of your life. But I hate that you're going through this, man. But I'm glad you also got rid of the car payment. That's a rough way to do it, but you just freed up $700 a month, my man.

Yes, sir, I appreciate it. Thank you for.

Taking my call. Yeah. Best of luck with situation. There's a lot of local dealerships and mechanics, Ken, that I think would be happy to let go of a vehicle that has been sitting on their lot that needs some work. But I.

Mean, listen, the bottom line is if you're looking for cars under three grand, they're all over the place.

Facebook marketplace. Yeah, it's true. They're out there, man. Oh, man, cars. Freaking cars.

If you thought he's going to have to get some really good.

Walking shoes. I'd probably buy a.

Bicycle before he walks. How long would it.

Take you to walk 10 miles? My little legs? I'm going to give it at least 45 minutes. Is that fair?

I don't know. I think you speedwalk. You could beat that.

I'm.

Not a marathoner. I would love to see you walk 10 miles.

I'd outwalk.

You on any day. Not a chance. Guarantee you I'd.

Outwalk you. That's for another episode of The Ramsey Show. But for now, more calls coming up. We'll be right back.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Kahlman this hour. The number to call is triple-8-825-5255. Ken, I erroneously said that I could walk 10 miles in 45 minutes in a previous call.

That's really walking fast.

I just looked up the average time it takes to walk a mile. It's about 20 to 30 minutes a mile.

I was going to say the world record for the fastest mile is what? I'm not sure about that, but the average walking speed is about three miles an hour.

That's average. You don't know my speed walking ability.

But the fastest mile of all time, I think it's just under four-minute mile, I think. But we were all discombobulated because I was just generally saying... I was playing the boomer roll. I should walk. All I could think as soon as he said it, I went, I did 17 and a half miles in seven hours. There's no way he's going 10 miles in 45 minutes. George is a quick one, though.

He's quick. They're little, but they are quick, my friends.

Them feet's be nimble.

Them feet's be nimble.

I love it. Oh, it's too much fun.

We're already having fun. Let's see if we can screw some more stuff.

Up, Kim.

All right, here we go. What do you say? Let's go to Renee in Miami. What's going on, Renee?

Hi, how are you? Thank you for taking my call.

We're doing well.

Good, quick question. I've made a little bit of money this year. I don't really have any debt other than maybe 15,000 that I owe on a car. I have a really good accountant that has advised me to open up a few different accounts to put some of that money in. I have an escort that I opened this year. I'm right now trying to consider, do I need to hire a financial planner by the end of the year in order to help me to diversify and put some of my income in these different buckets?

You have a pile of money sitting in the bank right now. Is that what you're trying to figure out what to do with it?

I do. All right, so hold on. I thought I heard you say you don't have any debt except for $15,000, and I'm confused because that's debt.

Well, it's a car. If I could just pay off the car, I'm assuming. But right now.

Because I'm- So what's been holding you back from paying off the car?

Trying to decide if I want to keep that car or not.

But the debt can go today. You can make the car decision later. Yeah, you're exactly right. Okay. How much money are we talking that you have in the bank?

About 150.

Okay. So you got 150,000. That's pretty much everything to your name in liquid cash? Yeah. And what's your income?

This year, gross about 200.

Awesome. Good for you. What do you do?

I'm in the middle.

Of state. Nice.

Way to go, Renee. Fantastic.

Okay. Thank you. You got plenty of cash, so you shouldn't be holding on to the car payment just because you're not sure if you're going to keep it or not. You have enough cash to pay it, be debt-free. That's what we teach. We want you debt-free before we start investing.

Okay.

If you became debt-free today, and then you put some of this money aside for an emergency fund, let's say that leaves you with about $100,000. Is that fair?

Yeah. Okay.

With the 100,000 left, are you a homeowner right now? Do you want to be?

I'm not right now, and I do want to be next year. That's the next step that I'm going to take in the new year.

Okay, awesome. You're in real estate, so you know the stuff inside out. But what I would do, you don't necessarily need a financial planner right now. It's good to start that relationship and you may want to open up a Roth IRA because you're on the cusp of getting ready to start investing that 15 % as soon as we clean this up, get the emergency fund in place. I assume if I'm you, I'm going to use all of that extra money for the down payment on this home. I would leave it liquid in a high yield savings account in order to do that, which means you don't necessarily need a financial planner today.

Okay, so my accountant, because again, I'm sitting here at December 15, and they've advised me to open up HSA, 401(k), a Roth, and a high yield savings.

Awesome. Those are all good things. There was no red flags on any of those. I think you are on the cusp of being ready to do that, in which case I would start that conversation. There's a SmartVester program where you can get connected to investingpros@ramseySolutions. Com. I would advise you to do that if you want to start to get the ball rolling, figure out which investment options make sense for you as a solopreneur, self-employed person. But you're there. But the thing is with real estate people, what I found, Renne, is that they tend to want to get fancy and complicated instead of just following a simple, proven plan. Okay, got it. The what you don't want to do is go invest this money because someone told you you can make a lot more. You can turn your 100 into 300. Instead, I want you to use it toward your very soon-to-be financial future of being a homeowner, which is going to get real expensive real quick, especially in Miami. Right, yeah. You may need more than 100,000 down in order to afford a house in your budget.

What's your car payment right now?

Like.

350. The reason we want you to pay that off today is because A, you have the cash, and now it gives you more options because you can sell that car right now if you want to, you can hang on to it. It's not costing you money. In fact, you give yourself a $350 raise per month right out of the gate. But doing what George said, get the emergency fund in place, then you sit down and you figure, Okay, what do I want to save for the house? What's my investment? The investment strategy, we teach 15% of your income after you've got your debt paid off and after you've got your emergency fund set up. But you're already able to do that. It's just moving the money around today, literally today. It's instantaneous.

Which is awesome.

That's the.

Great news. This is not a six-month journey to do all of this. You're going to be there real soon, Renee, so keep it up.

Awesome income. Good job. Great income. Way to kill it.

Let's go over all the way across the country to Spokane, Washington. Sandy joins us there. Sandy, how are you?

I'm good.

How are you guys? We're doing great. How can we help today?

Sure. I am a homeowner, and I had a piece of property that was deed to me 20 years ago, and I decided I was probably never going to live on it, so I sold it while the market was up, and I got about 170 for it. I paid off my car and all the other debts that I had. Now I'm basically debt-free, except for my house payment. But I also don't have much of a retirement because I've always worked in jobs. This never worked out. I'm 53, so I'm not a spring chicken. I have this money sitting there, and I'm not sure if I should put it on the little IRA rollover account that I have from a job a long time ago that's got $1,500 if I should put it on the house. I also have now my student loans due because during COVID, I got my master's in business. I'm just trying to figure out where are the best places to put this $130,000 that I have.

Well, first order of business, you just let the cat out of the bag. You still have some debt, Sandy. You've got those student loans to pay.

Well, student loans. Yeah. Well, literally, my first payment is due this month.

Okay, what's left on the student loans?

I didn't have anything. Yeah, right.

What's.

Left on them? It's 18.

Okay, so what would you have left after you pay off this $18,000 in student loans? How much money?

About $1.10..

Okay, what's left on the mortgage?

$1.90..

Okay, awesome. You have an emergency fund on top of that, or is this it? It's all tied up in this $1.10?

Yeah, no, because it's all dumped into savings. Out of that one-thirty that's in savings, I guess 10 of it would be my emergency. Okay, so I'm probably 100, to be fair.

We need to bump that up. I can't get my student loans off. 10 feels real low for you for an emergency fund. I would lean towards 3-6 months, maybe on the six-month side. Are you single, married?

Yeah, I'm single.

What's your income?

Not enough. Well, I was working at a job and they laid me off, and I took a $10 cut and pay. What do you- That was two months ago. Right now I make like under 45 a year.

Okay, what were you making prior? So prior to that, you're making over $50?

Yeah, I was making $30 an hour. Now I'm making $20.

Yeah. If I were you, George, I'd like her Emergency Fund to be based on the $30 an hour.

Yeah. Look at your household expenses today as they stand and multiply that by six, and that'll give you that number that you need to keep aside from the savings.

Then we got to get back in the game. You've got a master's degree. That's something. Hang on, Lai, I'll tell you what I want to do. I want to give her a little bundle, a little Christmas bundle. I'm going to give her the get clear work assessment. It's going to really help you with a great job description, an ideal job description for you based on what you do best and what you love to do. I'm going to give you the book, From Paycheck to Purpose, which will help you get there once you know what it is. I'm going to give you the book The Proximity Principle, which is how to connect with people to get the opportunity knocking on your door. All three of those gifts from me and Uncle Dave.

Love it. Sandy, once you get the emergency fund, I would max out that IRA for the year with some catch-up contributions that you have at your age and throw the rest of the house and begin that journey. This is The Ramsey Show.

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To learn more today. Welcome back to.

The Ramsey Show. I'm George Camel, joined by my friend Ken Coleman. The number to call is triple-8-825-5225. Well, Ken, we've got some news here, and it's not Ramsey news. This is national news from CNN, what the Fed's looming rate cuts would mean for you. People are starting to get a little excited at mortgage rates taking a dip for the first time in a long time. They've dropped from 7.03% down to 6.38% in the last two months for 15-year fixed loans. Here's the article from CNN. At the moment, rates are historically high, making all these loans and credit card rates and lending super expensive. But there's some economic projections that the Fed would significantly lower the predicted rates by this time next year, implying three rate cuts next year. A reverse course for rates has all kinds of implications for consumers. It goes on to say, lower rates could make borrowing cheaper. That includes mortgage rates. Fed chair, Jerome Powell, on a press conference caution that we're far from a hard landing scenario, but a turn to lower rates could soften the blow that higher rates have taken on the US economy. They go on to say, Hey, this isn't all good news.

Us savings rates, which have been near their highest levels this century, would come down if the Fed starts cutting rates. You've been enjoying your 5% in your savings account, that could come down. But there's also good news because mortgage rates could come down, which has been a tough thing because a lot of people are hanging on to their low interest mortgages, which means less inventory, which means prices go up on top of interest rates being sky high. It's been a tough time for want-to-be homeowners.

Well, as we sit here right now, the 30-year fixed mortgage rate has dropped to 7.07%. As you said, the 15-year is at 6.31. This is today's numbers right now. But the reason the mortgage rate is dropping is because if we look at the treasury yield and the bonds and all that jazz, when you start to see the demand slow down there, then you're going to see mortgage rates drop. What are mortgage rates going to do over the next year? It's hard to say, but if you see things start to move into the sixes and low sixes, you're going to see the shock wear off for a lot of people who are like, I remember when it was 3.0, nothing, or whatever. I think that's going to be interesting to watch. As the real estate market goes, so goes the American economy. When we look at housing in the form of people refinancing. We saw a spike in refinance last week when things got on set. People were already going, they bought six months ago 100%.

I'll go down from eight.

Down to seven or whatever. 100%. Refinancing drives the mortgage industry. Housing starts, which means builders, people selling, buying homes, and then doing the restoration to either sell it or the restoration after they buy it, that drives a lot of the economy. It's going to be very interesting to see what happens. But right now, we get some really good economic news in the last 48 hours. It's really interesting to see what's going to happen, but I think you're going to see the real estate market really pick up. What's going to happen, though, is I don't know if prices will drop quickly because right now there's such a low inventory and there's this pin-up demand, you might see another.

Rush again. You might see a temporary spike in home values and prices.

I mean, selfishly speaking, that's what I want to see. But I'm not a young couple, and I know a lot of young people are going, Man, the price of homes just continues to go up. I think that's still going to be the case for a while. I say all that to say this, I would not wait. I would not have the mindset. If I'm able to buy now, I would not wait a year or two years because I don't think we're going to ever see. Well, I shouldn't say ever. That's a dangerous word. I don't think we're going to see the interest rates that we saw over the last five years for a.

Long time. Yeah, twos and threes. For those of you that want to be homeowners, this could be huge for you because even a small percentage change, that can mean big savings. We're talking thousands and thousands over time, so no one knows for sure what will happen. But if you've been sitting on the sidelines and you're wanting to be a homeowner, do it when you're financially ready and don't try to time the market. As Dave has said, date the rate and marry the house. You can always refinance if and when rates do come back down. If you're debt free with an emergency fund and you have that down payment and you can get that mortgage where the payment is no more than a quarter of your take-home pay, it's time. Go ahead and do this now. Otherwise, if you have the mortgage become 60% of your take-home pay, we've had those calls, that's heartbreaking. So don't do it under pressure. Don't do it if you're not financially ready because you'll end up house-poor. But you can find a home within your budget, and you can do that with one of our Ramsey-trusted real estate agents. These folks are experts.

They know the market like the back of their hand. They care about your financial goals. If you want to connect with one for free, go to ramseysolutions. Com/agents. All right, let's go to the phones to Portland, Maine. Justin joins us there. Justin, how are you doing today?

I'm doing great, guys. How are you?

Doing great. How can we help?

Well, first off, you two are two of my favorite personalities.

Two of, Ken.

Two of? Yeah. Well, that was not a compliment. You started with, You're my two.

And then you went- I took it as.

A compliment. -two of my favorite. There's only five of us. Okay, we'll.

Take it. George, my only complaint with Smart Money Happy Hour is that it's only once a week.

I'm sorry. We're doing our best out here. Blame Rachel Chris.

Hey, Justin, inside baseball, George is only allowed to have one drink a week. That's why we do that.

They keep me limited. He can't handle more than that. We stick to the mocktales for.

That reason. Thank you, Justin. You're very kind. We appreciate it.

What's your question today?

Yeah, short question, just to make it simple then we can move on if we need to. So should my fiancé and I move closer to her new job, even though rent is higher? Yeah. So basically, my fiancée and I are pregnant. Baby is due in April, and our wedding is next October. Right now, we have pause baby step two and are in super-stork mode because of the two-stork modes. Our finances are separate, but to keep it simple, our take-home pay is 6,000 a month, and we are currently saving 2,400 a month for stork mode. With our current rent being 1,100 with everything included, moving closer to her work, which her new job is about an hour away from where we live, and the rent goes up to about $1,400 to 1,800 a month plus utilities.

That's a long way to drive an hour, huh?

You know, Ken, I knew talking to you, you have that sentiment. Here's the thing, right? I live in Maine and the snow. She's okay with the drive, and that's awesome. But I don't know how I feel.

About it. Yeah, I don't like it.

Is she going to be on some maternity leave?

She is, yeah. Once the baby comes, she'll be on six-week maternity leave. I guess that's another layer to it.

I just wonder, can we punth this? Can she make the drive for a few months, then she's on maternity leave, then we can have this discussion in the summertime to move?

Yeah, it's not a bad idea.

That's.

One option.

Okay, so let's run the numbers on this with George, though. It would be how much more to your budget for both of you if you made the move to this new apartment? Was it $300 more? Did I get that wrong?

Yeah. The total increase, again, things are split. But the total increase is between $300 and almost $700 more, depending on what we can find. There's not a whole ton of rentals. There's a good amount. There's just not a whole ton. A lot of the times, the more expensive you go, the more utilities are included, but then.

It's paid off. All right, so practical question. These numbers you're giving me, is this based on apartments that are right there close? So instead of an hour, they're five minutes away? Because I'm wondering if we could pull back and go if it's a 20-minute drive or a 15-minute drive versus an hour, that's significantly better. But I wonder if the cost is different.

Yeah. If we were to be five within 10 minutes, it's going to be over two grand. The numbers I'm looking at are giving her a half-hour commute, which I'm much more.

Comfortable with. Okay, got you. You're already thinking that.

But I mean, 1,500 out of six, that's 25%. You guys are right on target as far as those numbers go. It hurts because it's more than you're paying now, but it's not going to crush you guys financially.

Okay. Do I factor utilities into that or is that.

Added on? That would just be your actual rent. Utilities would fall outside of that 25%. You'd be okay. You guys have the margin to do it. But also, I wouldn't wait until October to get married. You're about to bring a baby into this world together, go to the courthouse, and then have a celebration later on when you guys are debt-free, man.

This is why you and I should have an online license. We could have done the ceremony right here on.

The show. On the air, Justin. That would have been fun.

We need to look into that, guys. I would love to do that, but I think.

That'd be great. You're doing great. You're saving $2,400 in the stork mode until baby and mom are home healthy. That's going to get you guys 10 grand right there. If they're healthy, throw it at the debt. Continue on. We're going to move on with.

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Welcome back to The Ramsey show. I'm George Camel, joined by my good friend, Mr. Ken Coleman. The number to call is triple-8-825-5225. Well, hey, it's Christmas time. Merry Christmas to all of our listeners out there. Of course, we love to give great gifts around Christmas time. If you want some for your family, we've got a killer sale right now. The $12 sale is happening where you can get best selling books like The Total Money Makeover, Babysteps Millionaires, Own Your Past, Change Your Future. Ken Coleman's got some books on there for just $12 each. We also have some new stuff in the Ramsey Store. Rachel Cruz has a new kids book that is just going bananas, Ken. Is it? It's called I'm Glad For What.

I Have. Oh, it's a cute book.

It's a sellout. That's great news there. Our friend, Jade Warsha, has a new book called Money's Not a Math Problem that just released.

Hand me that bright orange one right there to your left, because this is the one that- This is the Crem de la Crem. I'm a little excited about this bad boy. Look at that. Look at this guy right there. They managed to somehow put you on a book cover. Your whole body got on there.

He took a whole team of editors.

To make this happen. Breaking free from broke. That's right. George's first book, this book is so good, and I'm proud of my friend. Let me tell you something, folks. I've watched George live this out. I've watched him live it out, his whole journey to Ramsey personality, what he does, paying off his house. I've been there watching the whole thing. I love this dude because he's the real deal. This book is going to help so many people just get away from the game, The Matrix. That's what I love about this book. That means a lot. It's all the financial wisdom that you would expect, but it's extremely practical. Because it's practical, it's hopeful. This is an absolute must-purchase if you've got someone in your life that just has no stink and clue about the financial game. They just don't get the game. They don't understand that they're just victims in a great marketing fix that broke as normal in America. They don't get it, but they want something a little snarkier, a little bit more their speed. I think this is a must get for every college kid in your life who's coming out and they need to understand it because George speaks the language.

The parents never learned it. This is a great way for the parents and their kids to go, All right, I got to learn the truth about money. George cuts through the noise. That's what I attempted to do here with a lot of research and, of course, snark.

You hand this to them and they go, Well, this is no boomer talking.

To me here. No.

Look at that little hipster. You look cool. You got your gap jeans outfit on.

Ashkosh, begash, jacket.

You look so cute. It's so great.

I aim for.

Cute, Ken. Look at that. So anyway, don't get that. That's available at ramsyslusias.

Com. Yes, it's on presale right now. We also have, Ken, some limited edition autograft copies. I signed a few hundred of those, and there's still some available.

Can you call that a.

Limited edition? Well, there's only a few hundred, and after that, they're gone.

You're never going to sign a book again? Never again.

It's special. You go in the Ramsey Store, you can search for Breaking Free from Broke or search the word Autograft, and you'll find it in there.

By the way, all my books will forever be signed if you want them. I'm not going to limit myself to the people. I have a man of the people. You just made a promise you can't keep. I have a man of the people. I will sign any book.

Your mouth just wrote a check that you can't cash, my friend.

I don't even know what that means, but we'll see.

I've heard it said before. Okay. Go check all of that out, ramsaysolutions. Com/store. Now is the time you can still get some gifts, especially the digital ones, in time for your loved ones for Christmas. Marie is up next in Louisville. That's how we say it, Ken. Is that right? The great state of Kentucky, the Commonwealth of Kentucky.

There it is. Somebody's been paying attention. I appreciate that.

Marie, welcome to The Ramsey Show.

Hi. Thank you guys so much for having me. I'm still learning how to say bullvull the right way.

There you go. That sounded pretty good.

Well, I've had a lot of practice since moving here. I've been here since June. But anyway, thank you guys for having me. I am just looking for a little bit of guidance on just how to attack the debt that I've got myself into over the past year. I'm 27 years old, and this debt spiral really started probably the end of 2022. I ended up ending a relationship with a person I own the house with. I won't do that again. I'm not married to in the future, but I really didn't have any debt before then besides some student loans. And ultimately, I assumed the mortgage and ended up taking what was in savings and buying him out of the house when I assumed the mortgage. But then fast forward to this year, I had to relocate out of state for my job without a whole lot of warning. It was harder for me to save at the time because I went from splitting bills 50-50 to everything being on me. And so at that time, I had probably piled up a lot more debt in my just getting ready to sell the house and fixing things in preparation to move.

And with a mentality that like, hey, when it sells, I'm just going to be reimbursing myself. And as you can imagine with the market, I had it listed for about five months even after I had moved. And I was paying rent and utility in my new city here in Louisville, and then also paying the homes expenses between June and November to not being able to save there either. So during this time, I also totaled my car, so I had to buy a new car, too, just ironically. But anyway, so with all of this, my mindset was just in the place that when I sell my house, I'm going to replenish my savings and pay off all this debt. But that wasn't the case. So I now do have a renter in the house to at least alleviate myself from the responsibility of having that mortgage paid, the expenses for that home being covered. But just obviously the quick fix to my debt solution would be to sell my house and get that money, but that's not the situation I'm in right now. I'm just trying to get some advice on how to attack that debt.

How much debt do you have now outside of the mortgages?

Outside of the mortgage, it's 69,000 total. The breakdown is 24,000 in car, 12,000 in personal loans, $9,000 in credit card, and then $24,000 in student loans. Before all of this, I had just the student loan.

What's your income?

I make between $140 and $160.

Good.

For you.

That's what we.

Like to hear. Marie, why can't you sell the house in the other state?

Does your.

Real estate agent suck, or is the home just overpriced?

I went through two different real estate agents, had it listed for the five months, and did decrease the price of the home. I just think the area that I was in, there was way more inventory sitting on the market than there were houses actually being closed and sold, and I decreased the price often, did a lot of analysis around that. I think that it was probably just poor timing, and I wasn't really in control. If I didn't have job change, obviously, where I had to relocate out of state, I would have stayed there. It was just an unfortunate situation. I wish I had the.

Answer to why- How much equity do you have in that home?

The home is worth about 380, and I owe about 195,000 on it.

I got to tell you, kiddo, with the interest rates starting to drop, I'd be talking. I'd be finding another really good real estate agent. I'd be thinking about that with you, George, because it's out of state. You don't want to be a long-distance landlord.

I want you to be debt-free. You can claw out of this pretty quickly, making 160, paying off 69. This is a solvable problem, but you could also leapfrog it. Go to ramseysolutions. Com/agent, Marie, and connect with one of our Ramsey-trusted real estate agents. These folks are rock stars, and they'll be able to help you figure out why this thing hasn't sold. Because with inventory, I know you said it's hotter in your area, but overall, people are Jones-ing to find a reasonably priced home and find a home under 400 in today's world, that's solid, is hard to do. I think this thing can get sold. It's going to help you get out of debt faster. But the key that you want to focus on right now is this debt snowball. How much money do you have in the bank right now?

I have about 4,000. I've completely stopped using the credit cards and since becoming a landlord, had about an $8,000 cash bill I had to pay that wasn't covered by homeowners insurance four days after my.

Tenants moved in. Well, that's the problem is you're trying to get out of debt, but you're also a landlord, and so you have to have this little side emergency fund right now to cover those expenses. I wouldn't tell you to deplete that to pay down debt in this weird season that you're in. But the rest of your income is going to go toward debt. You got to cut your lifestyle down to nothing. If you want to end up selling the car, that's okay. The car is not a huge part of your world and income right now, but it would alleviate some stress. But you're going to focus on the credit cards first. That's your smallest debt. Make minimum payments on the rest. Once the credit cards are knocked out, move on to the personal loan and then onto the student loan and car loan. You can do that. Most people do it in 18-24 months. I think with your income, could you live off of less than half your income right now and throw the rest at the debt?

Yeah. I mean, I only use my debit card anyways since October, so I think that yes, I can do that for sure. I just need the budget and put a plan together and-.

I love it. Yeah. If you can throw seven grand a month at this debt, it's gone in less than 10 months. That's the math on it. But now we have to get our behavior to line up with the math. That's the hard part of being a human. Thank you for the call, Marie. We are wishing you the best with this home sale. Again, ramsysolutions. Com/agent is the place to go to get connected with a Ramsey trusted real estate agent. That puts this hour of The Ramsey show in the books, my thanks to Ken Coleman and all the folks in the booth keeping the show afloat in New America. We'll be back before you know it. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by bestselling author and host of The Ken Coleman Show. You guessed it. Ken Coleman joins me this hour. The number to call is triple-8-825-5225. If you've got a question about your money, your work, the intersection of that, your life, we want to help you take the right next step.

Ken is my favorite person to.

Host with- Oh, thank.

You, George. When it comes to work questions.

Oh, I see how he did that. I watched a long time. You see that? He pulled me right in and and thought it was a Hallmark card. Nope. Just a sticker. But hey.

You fell for it. Here we are.

We're at the end of the year. A lot of people are thinking about, Do I start a business in 2024? Do I start that side?

Do I finally quit that job?

How do I makemore money. Forget the quitting the jobs. If you want to make more money? Forget the quitting the job. Do you want to make more money? Who doesn't? I'm your guy. Let's go. Let's get that shovel bigger so that we can get through the baby steps faster, live the life we truly want to live. That's what I'm here to do. Any of those calls today, let's take them.

Let's do it. Lizzie kicks us off in Austin, Texas. Lizzie, welcome to the show.

Hi, thank you for taking my call. I just found out I was pregnant with a Howard Miracle Baby on Friday.

Wow! Wait a second. How is this a miracle baby? Give us the story.

Because unfortunately, we've had two miscarriages in the past 13 months, and we were actually going to start doing IVF. We'll save up for IVF, but we actually got back into the FPU, and we're like, you know what? We're going to put that to the side and let's just tackle the debt because we have an overwhelming amount of debt, mainly business debt. But because everything is personal collateral, I do think it's all personal debt anyway.

You would be correct. You're right. Your name's on it.

Well.

Congratulations. Exciting.

I haven't even told my husband because I don't even know. I feel like I can't even be excited.

You told us before your husband?

You told these two clowns and millions of other people before him. I hope he's in a hole somewhere safely that he can't hear this.

When do you plan on telling him?

I'm planning to tell him for Christmas because I have been doing the blood work and everything just to make sure everything's going good and that we don't have an unfortunate event again.

Oh, my goodness. I don't think this is a good idea. I don't think it's a good idea to put this out there on the show and then wait until Christmas to tell him.

I'd sit him down tonight with a smile on your face and say, Listen, I know we've been through a lot. You're not going to believe this, but.

Here you go. I feel like we should conference call him in and tell him right now. That's what I think.

Yeah, I wouldn't wait for the morie moment for him to go, You are the father. Yeah. I'd go ahead and tell him now.

But.

That's just two guys' opinion.

I'm actually going to meet him here probably in about an hour before he goes into work.

Yeah, that's a lot for you to carry. That's your little.

Secret for the next 10 days. It's a long time. I want to get to the debt stuff, but I've got to say, you have got to tell him today before he gets into the... I feel guilty. I'm a mess right now. Our live studio audience is in a get. They don't know what to do either. Don't you all feel like, We should tell this guy. I can't bear this. This burden is too heavy.

The funny thing is, too, is that he predicted it about three weeks ago, and I'm like, No, no way, and it's too soon anyway. And turns out he.

Was right. Well, that's what you sit him down and say, Hey.

This guy called.

A shot. Hey, honey, your crystal ball was correct. You'll never believe it.

Okay, Lizzy. This is the craziest thing that's ever happening on the show, George.

That's pretty wild. All right. But it's an honor that you trusted us with this secret and millions of listeners.

Let me gather myself, Lizzy.

Tell us- The reason I feel like we can't be excited or I can't be excited is because we have 50,000, 50.5,000 in personal, personal bill debt. On top of that, we have $651.5 thousand of business debt that is all tied to our personal.

Oh, my God. What business debt is it?

Construction debt, and it's anywhere from credit cards to personal loans to 80 % of it is probably friends and family. I say friends and family, but honestly, it's more like loan sharks.

Well, it sounds like your friends made a bad investment.

Those aren't friends.

Is this business still afloat? Is it doing well? Where is it?

It is doing well in the sense of... And it's combined debt of my business with my ex-business, which is also a construction business, but I keep wanting to sit them down. And that's the other issue, too, is that I keep wanting to sit them down and talk numbers, but it just ends up being a big ordeal. We get into an argument and we just can't seem to come eye to eye. And I showed them the plan of what I... Because we started doing a few again and I'm doing the everyday dollar. Not only I got the everyday Black Friday deal, a dollar Black Friday deal for the personal finances. And then on top of that, I'm also for the business. So I got two of them.

What's the household income?

The household income for just my husband and I with his W2 income, my W2 income and the business income is about $18,3003. $18.300 a month.

A month? A month. And that's gross.

And that's gross. That's where we take home, yes.

Okay, are you guys paying your taxes? Are you putting money aside for that? How's that working?

Sure, and that's the other thing. Included in the numbers I gave you that we're in debt, I'm assuming right now we probably owe about $15,000 to $16,000 worth of taxes.

Okay, that's going to go to the top of the debt snowball. Oh, my gosh. That's going to be the first thing you pay off, is the IRS debt. And then we're going to continue on down, smallest to largest balance. This is going to be years and years of sacrifice.

One quick question on this. You said W2W2. This company that's got the $600,000 in debt, is that separate from your day jobs, your normal jobs?

That's separate from our day jobs. My husband already works 14-16 hours a week, and I do the same thing on top of that. On top of that, that's including me managing the construction company.

Who's working for you? When you say manage the construction company and you're working 14-16 hours days, who are you managing?

I am managing… We have a group of… I used to have about 15 people. I cut it down to about eight. I weeded out the people that I feel like instead of making me money, I'm putting.

Money too low down. Okay, so you're like a general contractor, essentially.

I'm a general contractor, yes.

You're both working 14-16 hours a day.

Correct.

Is there any collateral that you guys could sell as part of this business? Equipment, is the real estate? Yeah. This is going to take a decade to get out of at this rate.

Well, I crunch the numbers, and if I put 1,200, 500 towards the business debt and my dad puts 1,200, 500 towards the business debt, we'll be done in.

28 months. Your dad is half partner in all of this?

Well, the 651, half of it is his. However, well, I say his rhetorical, I don't want to look at the correct words, because at the end of the day, it's under my name. Out of that, probably only 20 % is under his name.

So no.

Matter what, I.

Have to pay. But he's paying half. This is like a Common Core Math question, Lizzie. We got to sort this all out. I'm excited for the baby, but you're right, we got a mess on our hands. It's going to take some drastic choices for probably 5-10 years to clean this up. But I hope it's faster than that. We are wishing you guys the best. Congrats on the baby. Tell him today. Please don't let him find out from this show. This is The Ramsey Show.

This.

Episode.

Is sponsored by BetterHelp. Hey, it's Dr. John Deloney. This time of year can be great, but the holidays can cause anxiety for a lot of people, especially about giving gifts. Maybe your family makes super thoughtful, handmade things, or they demand you buy really expensive things, or maybe you just like experiencing time together, or you all just pick up random gift cards last minute. No matter how your family does gifting, remember to take care of yourself. Whether it's going easier on yourself during tough moments or treating yourself to a day of rest from everyone and everything, remember to give yourself some love this holiday season. If you're thinking of starting therapy, give BetterHelp a try. Betterhelp is flexible because it's online, so it can fit into your busy holiday schedule. Just fill out a short questionnaire to get matched with a licensed therapist, and you can switch therapists anytime for no extra charge. In the season of giving, give yourself what you need.

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The Ramsey show. I'm George Camel, joined by Ken Coleman. The number to call is triple eight, 825-5225. Today's question of the day is brought to you by Neighborly, your hub for home services. There's never a good time for appliances to break down, but Mr. Appliance, a neighborly brand, can fix them and help make sure they're running properly. Go to neighborly. Com/ramsey to learn about upfront pricing from Mr. Appliance.

By the way, I was called Mr. Appliance in my early college years.

For as much as you were a handyman? Is that where.

That came from? I just love these names. I'm jealous because I.

Can't fix anything. I could see if they called you Mr. Toolbag. That one, I think.

Is more appropriate. Mr. Toolbag, I get you. All right. I'm getting applause. I get you. All right.

Today's question. I'm getting applause from the studio, the booth guys.

I like that. Okay, glad you guys are paying attention today. That's good. Today's question comes from Joseph in Oregon. I work in biotech as a data scientist, and my company is experiencing financial struggles with cashflow. I was just hired in this role about six months ago, and I'm wondering if it would be too soon to begin looking for another job. I left the job that I had before this one after one year because my manager was extremely toxic and the company culture wasn't good. Will two employment stints in around a year be a red flag on my resume? Let me just answer that one while we're here. Yes. Is it something you can overcome? Yes, you can overcome that. But is it a red flag? Without question. For what it's worth, I really enjoy my current role, team, and company. With that being said, I just got married to my wife two months ago, so I want to make the best financial decision for my family moving forward. Would it be wise to begin looking for another job, or should I wait to see what happens with the company in a year? I think, Joseph, you have a lack of stick-to-itiveness.

That's a made up word. It's a quality. It's like a little bit resiliency and a little bit of patience mixed together, that stick to itiveness. What I see here is a pattern of I don't like what's going on right now, and I'm immediately going to pull the escape hatch. I'm out. I see that a lot with younger generations. There was a phenomenon that happened in the marketplace in 2021 and 2022 when we saw four-plus million people a month leave their jobs for about a year and a half. It was extraordinary. Never seen those numbers before. They call it the great resignation. You may have heard about that in the news. Well, a year later, we began to hear a term called the great regret, where it was millions of people who left during the great resignation. The grass is greener over here. I can get more money over here, and that makes a lot of sense on paper. Well, what happened is they made the move, and it wasn't the right move, and they began to regret leaving. I think you might regret leaving this company right now. I think it is other than a Slam dunk where you've got a better gig and you aren't having to walk through all of the, I was at this job then I left and I was at this job.

Listen, if your company is going through financial struggles and cash flow, you need to be looking as a backup plan anyway. But just to immediately go, Oh, I'm going to leave now. I don't think you have to. Do I have some options in this case, George? Yes. But let's just see how it plays out a little bit. He doesn't mention anything in here that he feels like he's going to be on the chopping block. Nothing like that.

If he was on the line, I'd ask, has there actually been layoffs? What has been said from leadership as far as the struggles? I'd ask more questions. But I think when it comes to the employer, you're right, Ken. It's a red flag to the employer. They're going to ask, and so you better be ready to answer honestly and tactfully, Hey, what happened? You had two jobs in the last year. Well, one was this. It wasn't a culture fit. This one, they had financial struggles. I'm not going to- I left.

That just makes you look a little flighty. Here's the thing. You know when we get on the plane and they say, All right, we got to go through the instructions, and if we have to make a water landing, and they tell you all the things. I think professionally, you got to have a plan. What would happen, it's that deal. How would I exit if I was forced to exit? But in this case, a full-on search, I don't think I would do that in this case. Listen, there's a lot of people out there that need to hear this. If you go through a storm in your workplace, it's possible it's just a storm. It doesn't mean like it's the new normal. I think there's a big difference, and I think a lot of younger people are susceptible to this. Listen, when a big storm comes through, here's what we know, it blows through, the sun comes up the next day, and we move on. I just think that many people would do better to weather a storm or two or three before they pick up and just move on. I think you get into a pattern of moving, changing companies.

Every time something doesn't go your way, it can very quickly turn you into a vagabond. I think that's dangerous.

That's good wisdom. Appreciate the question, Joseph. Good stuff there. Let's head to the phone lines, Payton awaits in Chicago. Payton, welcome to The Ramsey Show.

Hey, thank you. Good afternoon.

Hey, how are you doing? How can we help?

Yeah, I'm doing well. I'm sitting pretty well in regards to my income and my debt, my investments. However, I have the opportunity to return to graduate school, but I'm not sure if that's a good financial decision for me, considering I'll probably end up taking out student loans to pay for it.

Did you say you have debt right now?

No, just my mortgage. Okay.

What are you going to graduate school for?

That would be for a master's in engineering, and it's in MIT.

Wow, that's impressive. And Laura, I'm guessing you're in engineering now full-time? Correct, yes. Okay. What are you making now?

I'm making about $152,000 a year.

Amazing. Would this help you, I assume, get a big bump in pay? Or are you looking to switch in a different field? Or would you just Excel in that field and get promoted there?

Yeah, I would hope it would have a pay increase. My larger hope, though, is I'm currently an individual contributor, and it's not looking like I have a clear path in my current company to become a people leader of technical people.

Which is.

What you want. Exactly, yes. So my hope is that following this graduate degree, which is a joint program between engineering and business that MIT offers that I more easily find myself in that trajectory to go to a supervisor of tactical people.

What would it cost for you to cashflow this?

Probably around $90,000. Okay.

Total?

Yes. I'm actually currently enrolled in the program. I'm a semester in my next semester, and then a year following that is what I would need to pay for.

Could you somehow save up 90 grand, pause all investing and just stack it up, making 152?

Yeah. I'd probably have to sell some of my investments to.

Get to that 90 grand. But that was outside of retirement?

Yes, outside of retirement. I would.

Do that.

Do you know why we're suggesting that? Before we tell you, I'm just curious, when someone hears us say things like that, does that make any sense to you at all? Because if it doesn't, that's okay, but I'm just curious.

Yeah, I think I follow that train of thought. I also have the converse train of thought that maybe it makes more sense to leave that money there and accrue the gains in the mutual fund that it's in right now for that year instead of pulling it and then feeding it again. It.

But- Okay, so let's fast forward.

Because it's a short amount of time.

Let's fast forward to the end of the program and your 90,000 in debt. Have you run the numbers on what that payment is going to look like when you got to start paying that back?

No, I have not.

I would. I would fast forward to the end of the line with taking out a loan and think about what money am I going to be making. Do you have an idea about what money is realistic for you with this degree?

I would love to be in the neighborhood of $200,000 starting.

I know you'd love to, but is that realistic?

Yes, for an entering supervisor.

Great. Okay. If you do your homework on this, George, all I'm saying is I like people to fast forward to the end of this thing and go, Okay, what's going to look like even with that salary paying 90 grand back? Oh, yeah. As opposed to waiting, using your advice of.

Cash flow. How much do you have in investments outside of retirement, Payton?

I have about 38,000 plans.

The 38 plus your future income to save up, you could easily cashflow this in the next 12 months. That plan excites me. How quickly making 200k with no debt could you restock 38,000 in an investment account pretty quickly?

For sure, yeah.

I would rather you move forward debt-free, and it's going to give you more options, more peace, and more freedom every time you work that plan. I didn't ask your age, but it sounds like you're young. You got plenty of time on your side. You're clearly brilliant. You're going to retire a multimillionaire. I just want you to be debt-free in the meantime, and you're going to do it. I have full faith in you. Congratulations. Call us back and let us know how that path is going for you. Thanks for the call. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman. The number to call is triple-88825-5225. Let's go to Atlanta up next. Dawn joins us there. Dawn, Merry Christmas. Welcome to The Ramsey Show.

Thank you. Thank you for having me.

What's going on?

I am 53 years old and just started the program about two months ago. Because of where I'm at in my life with some of the debt needing to build an emergency fund, etc, I'm doing steps two, three, four, and five.

At the same time. That sounds like a lot of things at the same time.

Yes.

How is that working for you?

Well, I would love to just focus on two, but I have a child who's in college right now, another one who is going to college in the fall next year. So I'm real time making payments and I did not have any savings for college.

Why do you feel like the burden is on you?

My parents paid for my college. I feel necessary to do the same.

Well, your story is different, isn't it? You're not in a place to do that. Are they going to in-state schools or community colleges?

The first one is going to in-state. The second one.

Will not be. Okay. That was a decision that you both made, or they just made?

We agreed with that decision, myself and the child.

Are they sophomore, freshman?

I've got a freshman in college. I've got a senior in high school, and then I have a freshman in high school.

Okay, so we got one on the way in, one that's in there, and one that's got a little bit of time. Correct. Okay, and how much debt do you have?

I have $20,000 or $30,000.

In.

Debt. It's made up of car at $21,000 and an interest-free credit card at $9,000 until April 2025.

Okay. What's your income?

$225.

That'll do.

Hello.

Awesome income. Let's just play this out. If you do it the Ramsey way and you focused on one baby step at a time, what do you think that would do for you? Because you'd be out of debt within a few months. You'd have the emergency fund a few months later, you'd be maxing out retirement at that point a few months later, and then you'd still have time to cash flow college.

Well, the way I've worked it out and the numbers, I don't see how I can pay off that debt in a few months, that $30,000.

Why not?

Other bills that have to be covered.

Well, college bills, let's say we put those aside and let's say we're not putting anything in the emergency fund, let's say we're not investing at all, wouldn't that free up a whole bunch of money to throw out the debt?

Right. Correct. If I wasn't putting anything in the emergency fund, that would definitely help me.

That's why we tell people to work these baby steps one at a time. Right now you're doing Dawn's plan, and I wish you the best, but I tell you with confidence that our plan works when you work it the way it's supposed to be worked, which is one at a time, focused intensity until you get to baby steps 4, 5, 6. Making at 25, you're going to be there really fast. This isn't a whole lot of debt you're dealing with.

Dawn, are you buying what he's saying?

I am, yes. The concern is not having anything in an emergency fund.

But I'm.

Concerned about emergencies.

Okay, perfect. So glad because I wanted you to poke holes in what he's saying because George is right.

You should poke holes.

But listen, you have enough money in your salary to be able to deal with most emergencies. If you had to pause baby step two, which we tell people to do at times if something big is there so that you can cash flow it, but you're going to spend more time doing it your way than you'll ever spend doing it our way. Because you're barely making any progress trying to do all those steps at the same time. You can see that, right? Your money spread so thin.

But.

If you do what George said, you're going to knock that debt out really quick, and the next step is piling up that emergency fund and the money that you make, the income you make, you're going to be able to do that very quickly.

I mean, you're bringing home $12,000 or $13,000 a month.

It is my my net is about $9,000.

That's not tracking.

What I net. How?

You're taking 50% home? You're taking 50% home?

I'm so sorry. The net is, because I just gave you over one period, it's 9,000 because of the 4 and K, the HSA.

We're going to pause all of that, which is going to put a bunch of money back in. That would take it probably to $12,000, I'm assuming.

Yes. What's an emergency that you would be really scared of happening? Give us a realistic emergency.

Well, the medical, any medical with my children.

Well, they'll put you on a payment plan and you pay when you can with medical.

So give me another one.

If I lost my job.

Okay. But again, we don't use emergency funds for job loss. We tell people, look, emergency funds are for things like medical emergencies, a car accident, where you've got to pay more on a deductible, your HVAC system goes out. You don't want to be living off of your emergency fund if you can keep from it. Do you have to dip into it in a job loss situation? Sure. But the idea is we want you to get back to work, anything and everything to not deplete that. Here's the point I'm trying to make. I want you to think of your biggest, scariest, emergency monster, and I'm telling you, with your income, you should be able to handle it. Isn't that fair, George? Am I being too.

Aggressive there? Don, if you look at your bare bones expenses, what does that add up to? To just cover food, utility, shelter, transportation, insurance?

Yeah, probably 6k a month if I got rid of.

Some other things. Some of the luxury. Yeah. That leaves potentially another six that you could start throwing at this debt. You're really smart. This is easy math. In five months paying 6k, you're completely debt-free in five months.

Because I feel like I need to be maxing out that.

4k.

At.

15%.

Because I don't have much time to catch up at this point in my life.

You don't have time to keep playing this game where you're treading water. Imagine making 225 with no payments in the world, and now you're maxing out every retirement account known to man for the next 10 years with catch-up contributions, you're going to be okay. That's right.

You're not losing ground, Dawn.

I tell you all this to trust the process. I know it's hard, especially when you're in your 50s, and it's harder to change habits and behavior and look at things a different way. But I have met people who have been 60 and 70 and they've just committed themselves to this plan and it has worked and they're able to retire with dignity. For sure, you're going to be able to do that with your amazing income.

If I had 21 or 19,000 in some stock.

Not.

Retirement, would you recommend just getting rid of that and putting that towards the debt?

Yep, I'd sell it, and I'd be aware of the tax implication that may be there when you sell it on the gains. But I did the same thing, Dawn, to pay off the rest of my debt.

Okay. Now there's no tax implications.

Because the.

Company took.

Care of the taxes.

Wonderful. Nice. How much could you make on that sale?

You said it's 19?

Yeah, right now the value of it's 19.

Do you understand that just means you're debt-free a month or two from now? Right.

It's amazing. In my brain, I've been thinking of that as helping with emergency.

If there was an emergency. Were definitely said your debt- You have to drop this gut. You're doing great.

What if we said your debt was an emergency? You need to get that out. How about that little mindset?

That's a way to look at it. Good job. I'd say being 53 without a full emergency fund while playing with debt, that is the true emergency. That's why these baby steps are all about intensity for a short season. What we're asking here is, Don, for 6-8 months, you're going to be focused on this, then we can start looking at investing again and helping the kids cash flow this. But the kids are going to be all right. They have an awesome mom. They're able to work part-time. They're able to hustle and get scholarships and grants and choose a different school and take a gap year. You got to put your own mask on first. That's you working the baby steps on your own right now. But we have full faith you're going to get there. I'm going to gift you one year of every dollar premium and financial peace university to help walk with you and encourage you along the way. So hang on the line.

We'll get you that. Sell it.

Sell the stock. Do it. This is The Ramsey Show. If I were the person who makes fitness analogies, which thank goodness I'm not, I would say the Ramsey Christmas Cash Giveaway is almost to the finish line, and so are your chances of winning the $5,000 grand prize. To enter, just go to ramseysolutions. Com/giveaway and come back daily for more chances to win. While you're there, it's not too late to get meaningful gifts for your loved ones or yourself, no judgment, for as low as $10 right now. Go shop the sale today at ramseysolutions. Com/store. That's ramseysolutions. Com/store. Welcome back to The Ramsey Show. This is a show for you, America, to help you take the right next step with your life, your work, your money. Give us a call at triple-8-825-5255. I'm George Campbell, joined by Ken Coleman this hour. Let's go to the phones to DC. Ryan joins us there. Ryan, what's going on?

Hey, guys, thanks for taking my call.

Absolutely.

Hey, I wanted to get you some advice and some help from you guys, something we're struggling with. Me and my wife are wondering how we can continue tackling baby step two while I support her in wanting to stay home with the kids, and she's transitioning into a part-time job, which pretty much cuts her salary in half.

Okay, what's the current income?

So currently, right now, with no overtime for me, I'm making about 4,000 a month, and then she's making $4,900.

Okay. She's wanting to go part-time or she already done that?

She will be going part-time. We have baby number two on the way, so he's due in February. She will get some paid leave with her job to help take care of the baby. She's going to attempt to go back to work after that, but we know it's not really going to work out. So come June, July is when she's going to transition into staying home with the boys and working part-time.

Does she have a plan for that? Because you said that you need. Okay. What's she going to be making? Yeah.

She's going to make probably about 2,000 a month. She'll be working for her mom's travel agent company. Okay.

You post it as we're struggling, we're having some challenges. What exactly are you wanting us to jump into on this? The budgeting side of this, or is this a marital relationship conversation?

Oh, no, this is a budgeting conversation. We downloaded the Every dollar app back in actually November first. So we've been at it about a month. We've gone from $168,000 in debt down to 109. I've followed those steps, took the savings down, which was a gut check. But with my job, I travel a lot and I can get copious amounts of overtime, so it does help. And so really just trying to knock down the debt hole that I got us in before this happens, before we lose the... Or if it's.

Even possible. How long did it take to get that debt knocked out? 168-109?

One month.

Because you took the savings out?

Because you took the savings out. Yeah, Yes, sir. We took the savings, I sold stock. The little savings we had right before the babies come, and we just went all in. Now we're just tackling it. Pretty much any overtime I get over that 2,000 per paycheck is going directly to debt.

Is that net income that you shared with me?

Yes.

Sir, it is.

Okay, all right. You bring home about 50k net, and she's bringing home about 60k net.

Yes, sir.

But overall, it'll go down to 72 if this all works out. Yeah. Okay. It's going to slow down your debt pay off dramatically with her taking a pause and then going part-time. That's a consequence of you guys deciding, Hey, she's going to stay home. It means the debt may take six months longer than we wanted it to.

Yeah. I guess that was me wondering if that was okay because we had this whole plan. If God's wanting her to stay home and she feels like that's what she wants to do, I'm going to make it happen if I got to pick up all the overtime.

I need. Well, you would need to dramatically increase her income. I'm going to make it happen. Because here's the thing. Average, it takes people 18-24 months to pay off consumer debt. Looking at these numbers, you still have 109 to pay off. I don't know how much you're able to throw with the debt every month, but let's say, how much could you think you can do now once you go part-time?

With.

The overtime, I'm typically bringing home close to 5,000 per paycheck.

But how much can you throw at debt?

Our expenses are only, let's see, I'm looking at it here, $5,200 per month.

Only? You're bringing home five and your expenses are 52. You're about to be broke, my man.

No, the $5,000 per paycheck if I'm doing OT. The monthly expenses are to.

$5,000 and then.

The monthly- Is that sustainable for the next 12 months for you to do overtime?

Unfortunately, in my job, you can't avoid the overtime with the government.

Okay, well, I would devise a plan to where you can knock out $109,000 in about two years. Okay. Whatever that looks like. With her working part-time, you working overtime, if it's going to take four or five years to knock this out, this is a bad plan. It's just too long.

George, I'm wondering, is there any lifestyle change you guys can make?

We've cut—this will make even more sick. We've cut $2,000 out of the budget worth of those extra expenses, the subscription, the daily coffee meals, the nights out eating, and we've gone pretty much completely to we eat at home, and.

That's it. You've shaved off 25 grand a year right there. I think that's the most.

We've eaten out one time.

What's the 109 made up of? What debt is at?

That's me. Her student loans that she has doesn't account for anything. That's what accounts for some $15,500, and then the other $5,000, the last credit card. Actually, I got to take that off because we just paid that today, $5,112.

What's the chunk? What's the big one?

The big one is the deck. When we bought our house, we financed the deck. Then that was my fault. Yeah, we'll leave.

It at that. You guys got cars? I got no car loans.

Car loans?

She has one car. I do not. I get one for work.

Okay, what's left on her car loan? No loan on it. Oh, no loan.

No, sir. No.

All right. Real quick, George, I want to talk about his income because I hear that young man, I can hear the heavy breathing in this. I mean, I feel for you, man, and you're a good dude. One thing we haven't talked about in this conversation is your ability to increase your income, and I don't mean overtime. What do you do for the government or what work are you in?

I work for Homeland Security.

Okay. Is that the long-term play for you?

That's the second part to it. I didn't know if we'd have to get into it. I am looking at changing to a different position. I'm not going to do that until we are debt-free because it is a salary drop for the first year. But it's less time away in these not-so-good areas and more time home-.

All right, okay. I think that's great. I love that part. But what's the long-term potential of this job that you would take a hit in the first year? What does it look like? Is there a ladder for financial growth?

There is, yes, sir.

What kind?

You would move up every year. It's a good chunk. I'd have to have the scale in front of me, but it's the typical GS scale for the government. After three years, I'm back to.

125 a year. Listen, if I could play Older Brothers really quick, okay? Yeah. That's another government job, and I'm not anti-government jobs. Every time I say something like this on The Range Show, people come after me like, You're anti-government. Yeah, I am anti-government because I'm a conservative, and I think people should be free to live how they want to. There's the commercial. But you're not going to have as much financial potential working for the government as you could doing similar work in the private sector. That's what I'm trying to get at. My friend, you making $100,000, $120,000, $150,000, doing similar work in the private sector, I believe, is realistic. I think you should check it out. But just limiting yourself to G3 and then after a couple more years of good service, Uncle Sam lets me move up the ladder. You're just really limited financially, yes or no?

Yes, you are.

Well, my friend, let's do both. Let's get out of debt and grow professionally. How about that?

Yes, sir. How about we go get a fat raise in the next six months. Instead of taking a step back in a government job, I'm challenging you to think about it.

Yes, sir.

Ryan, the last part of this is you guys are in stork mode right now until baby and mom are home safe from the hospital, which means we're going to pause the debt pay off, make minimum payments, and stack up as much cash as you can over the next three months. Then once mom and baby are home and healthy, let's continue and throw all that at the debt. That will help you as well, give you some peace as you step into this new phase of the show. We're excited for you, man. That puts this hour of The Ramsey show in the books. My thanks to my co-host, Ken Coleman. All the guys and gals in the booth keeping the show afloat and You America will be back before you know it. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by my colleague Ken Colman. We're here to serve you, America. The number to call is triple-8-825-5225. I say America, but we've been getting a lot more international these days, Ken. A lot.

A lot of listeners calling in from all over the country.

Yeah, you got to be careful. You just defended the globe, George. I don't mean to. Just like that. We are very inclusive when it comes to advice about your money, your work, and your relationships.

That's right. Regardless of.

Where you live. Come one, come all.

The principles apply. Get out of debt, stay out of debt, have an emergency fund, build wealth for the future, and you're going to be okay. That works whether you're in Australia or the United States.

You know what we should do this summer? We should throw a shrimp on the barbie.

I think we should for our friend, Luke, who joins us in Brisbane, Australia. Is that how you say it? Is it Brisbane? Did I get that right, Luke? I'm trying to be better.

Yeah, that's it. That's it. It's Brisbane. Good morning. It's currently just after 7:00 AM Saturday morning.

I wish I talked like you, Luke. I got to tell you.

I really do. I feel like I'm listening to an Australian weatherman.

I do. I'm going to ask you extra questions because I want to hear you talk.

Northeasterly winds coming from the south.

No worries. I need to say, no-.

See, I need to say, no- They're Northeasterly. We'll get it later. Luke, how can we.

Help my man? Luke, welcome from Australia.

Okay, thank you very much, gentlemen. I love what you two do, and I love what Dave does and all the team that does. I've been listening to the show now for about three or four months. I'm 21, so I'm only really just getting into the whole big, wide world of money and working and all that full-time. I've been a bit of a Pickled situation at the moment. I've just broken up out of a near two-year relationship, and that's put me in a bit of a struggle. But one thing I've learned from that... As you know, the only way you can move is forward. I basically just want to tackle the one and only debt I have and get basically just some life advice on where to go from there, how to use my money, me just some general life advice for growing up, too.

I'm going to ask you then. Did you dump or were you dumped?

I was dumped.

Oh, man. I was worried about that. I'm sorry about that. How long ago did that happen?

A couple of weeks now.

All right. Listen, man, you're going to.

Be okay. You'll find love again, Luke. Yeah. We've all been there, man.

I got dumped pretty hard in college. Did you get dumped?

Oh, 100%. Yeah. You're in good.

Company, Luke. What's the one debt you have?

All right. To make it easier for you guys, I've converted all my things that I think I would mention. I've converted all that from Australian dollars to US dollars. What a blessing. The one and only debt I have is a really stupid car loan. I am currently owing about $20,000 on that.

Okay, what's your income? Usd?

Usd, my income is… It ranges. It's between 53,000 and 55,000.

What do you do?

I am a long-distance truck driver.

Oh, all right.

Cool.

I'm looking at doing a career change and then moving internationally. Because don't get me wrong, Australia is all well and good and it's really cool here and there are some lovely people here. I don't know. I just don't feel like it's for me in the long run.

So paint that picture for us. What are you doing and where are you living?

I live in Brisbane. I've got my debt and I'm looking at getting rid of that. Next year I have enrolled to go to Aviation College and go get my commercial pilot's license. That's the career change I wanted to do, and I wanted to be a pilot since I was like 12, 13 years old.

Good for you. Are you going to be able to cash flow that?

I am not, unfortunately.

How much does it cost? It's very pricey here in the US. What is it in Australia?

All right, so to get my commercial license plus my multi-engine rating, which will allow me to fly aircraft with two or more engines, and also getting my instrument rating, which is probably a great necessity of flying commercially in the long run, all of that totals up to about $108,000 US dollars.

Yeah, that sounds about right.

That checks out.

Well, we don't want you going into debt for this, Luke. You got to know that, right?

Yeah. I don't necessarily know how it works over there in the US. I know of it. I keep hearing a lot of callers calling and say they have private student loan debt from Sally Mayes or something. I don't necessarily know much more than that. I don't know if you can get it like… I know you can get scholarships because you can get scholarships as well over here. But the way that I'm looking at doing it is getting it through the government and then paying it back through taxes. So none of it comes out of my paycheck. However, when I go to do my tax return every year, because I don't know how it works over there, but in every pay slip I get, tax has come out of my pay automatically. I don't have to worry about paying my tax at the end of every financial year. I do a tax return still and.

For that- Correct. Yeah, if you're a W2 employee here, meaning your employer is going to pay that portion out, it'll get deducted and paid to the government automatically. Right.

Yes, that's standard over here. Unless you run your own business.

That's standard over here. But you're saying they add your student loan payment into your taxes, essentially?

Yeah, you pay it off through the taxes that you pay.

So it's essentially still a payment. You're just making it all at once at the end of the year through your tax return? So you might owe $10,000 on your tax return?

Yeah. Instead of me getting anything back on my tax return, all of that, which I would be eligible to receive back, all of that goes into paying for what would be my student loan.

I'm confused. You're saying there would never be a bill that you would owe? What if you don't get money back?

That I am unaware of.

Because here in America, you don't always get a refund. I've owed many years, and you got to pay that, and so I imagine- It's not free. This loan isn't free, so I don't want you to think that there's some, Well, it's all paid in taxes. I'll be good. No way.

No way. But I get a tax refund. Most people typically get a tax refund every year. I have always gotten a tax refund every year over here. I know there's been stories where people have worked a standard 9-5 job, and then for some reason, they owe 10,000 to the tax office. But I've never managed to grapple my head around that.

Well, regardless of how it works there, we want you to cash flow this. If that means you've got to move slower or you've got to increase your income or you've got to sell this car in order to cashflow this, that's the plan. Because taking on over 100 grand in debt is not going to make you a better pilot, and it's going to cause more stress when you get there.

Yeah, which is why I was thinking as well, whether I go through with it or whether I just delay it.

Just do it at the speed of cash.

What would it take for you to save $25,000 a year? I'm being aggressive there, but that gets you 100,000. What would it take? A young guy like you, you're driving a truck. What can you sell? $25,000 a year in four years. You got the money, and now there's no stopping you. Before you know it, you're up flying the friendly skies, flying to Nashville, coming to.

See us. Taking us for a ride.

We'll take you for a shrimp on the barbie. You do it debt-free? Shrimp on the barbie, free from me. How about that? Outback? Where are we.

Taking them?

Yeah, we'll take you to Outback. Authentic. Of course. Where else would I take in Australia? In the United States. Let's get the Blooming onion. The Blooming onion, man.

Luke, thanks for the call. It was a pleasure speaking with you. This is The Ramsey Show.

If you want to know.

How to keep more of your hard-earned money in your pocket, not the governments, then listen up. There are certain tax deductions and credits you can be qualifying for by the end of the year.

With help from an experienced and trusted tax professional. If you don't have one, check out our Ramsey Trusted Pros. They know the tax code.

Inside and out.

So you don't have to.

And they'll.

Help you file when tax season is here. Get a trusted pro by going to ramseysolutions.

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Ramseysolutions. Com/taxpro.

Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman. Hey, if you like the show, do us a favor, and it's a free favor, if that's any consolation. Please consider subscribing to the show wherever you're listening or hit the Follow button, leave a review wherever you're listening, and share it with a friend. There's a lot of little buttons you can click to share. You can just send a link if you're watching on YouTube. Tell them just verbally, go check out the show, wherever they listen to podcasts or get their shows. That means the world to us. You guys are our marketing plan, and you do such a great job and we're so grateful for spreading the word. All right, let's get to it. Jacob is in Charlotte. Up next, Jacob, welcome to The Ramsey Show.

Hey, thanks for having me. Absolutely. I just got hit with a pretty significant amount of dead that me and my wife are not expecting to have. Her parents were unaware that they were taking out student loans. I'm not sure how that happened, but we just got hit with an extra $15,000 for her undergrad on top of her $15,000 for her masters that we already knew about. I'm trying to figure out the best way to attack this, what I need to sell, what I need to keep in order to pay that off.

Ma'am, sorry to hear that. It sounds like there was a giant lack communication with how the parents were, quote-unquote, paying for college. She thought, Well, they've got to take care of. Little did she know they were taking out loans in her name.

Yeah, I think they thought they had it taken care of, too. Then we just are on the unfortunate end of that.

All right, well, it's up to you guys now. It's all in her name, right? Yeah, it is. These weren't like parent-plus loans that were cosigned?

I think her dad's cosigned on it, but it may clear they're not going to help.

Okay, cool. Well, what's your household income now?

Right now, we make a combined about $110,000. We own a couple of rental houses, and we net about another $15,000 with those. It's all over $120,000.

Okay. Is this all of the debt, the consumer debt, these two student loans?

So no, she's got a car loan as well, and that's about $17,000.

Okay. Then you have a bunch of mortgages.

Yeah. We've got the two rental houses, and then we've got the house that we live in, so we have three mortgages, but those are pretty well taken care of on their own as it stands.

For now, on paper. But, man, you got a lot of risk in your life as a young couple.

Yeah.

How old are you two?

We're about 25.

All right. Well, the good news is making 120, knocking out 47,000 in debt is not a huge math equation. The question is how little can you live on and how much can you throw at the debt to knock this out as quickly as possible? You said you're willing to sell some stuff. What do you have that you can sell?

Well, I was thinking about my first thought is if we sell the house that we live in, we would knock after taxes a little over 50,000. That would knock out the debt pretty quickly, but then that'll leave us in the position to have to rent or use our savings account to buy.

Another house. I'd rather you sell a rental before you sell the place you sleep.

The only thing about that is the rental houses have a 2.7% and a.

3.2%. Oh, my goodness.

What is that? Jason, if we're going to argue about.

Interest rates. Why do you think that changes the equation?

Because he'll never get a 2.7% interest rate again.

I know. I was wanting him to say it.

I think because the cash flow on those houses is just so good.

That I don't want to get those up. Okay, let's run through it.

Hold on. You just told me you're netting 15k a year.

It's not much.

That's amazing cash flow to you?

I mean, as a.

25-year-old with.

No, you.

Make $110. Dude, you make way more money than that. You know what, $15,000 divided by 12 is? It's not very much a month. That is not amazing cash flow.

That's the profit after taxes, after the mortgages are paid.

Still, you're acting like $15,000 is a lot of money. That is not a.

Lot of money. You could make that in a side hustle.

Easy.

I just don't want you to get starry-eyed. I understand I'm not trying to beat up on you or having some fun, but man, people are just get so stuck on these interest rates instead of thinking about a bigger picture, which is how do we live with no debt and our greatest wealth building tool back in our life, our income? Instead of, hey, what's the spread on this and what's the interest rate? I can make more if I invest this. If you can figure that out sooner rather than later, because you're 25, you got lots of time on your hands to let compound growth and wise decisions guide you to some big wealth. But right now, the truth is you guys can pay off this debt. You're looking for the shortcut of selling your own house to do that. You don't need to. What you need to do is sacrifice and have some behavior change.

Well, should we cut into our personal savings account to pay off some of it?

Well, now you need emergency funds for these two rental properties, don't you?

Yeah.

We can't necessarily just deplete our savings because this has some consequence when you get rental properties and you have risk, and you got to be ready to cover those.

What I don't think you see is, Jacob, is you're over-leveraged right now. George is going, You guys make enough money to pay this off. Your first response was, Should we cut into our savings? It's like you're not getting it. I'm not being tough on you. I'm just saying, You have the income, you have the ability to pay the, what is it, $47,000 off pretty quickly with some hustle. Even if you don't agree with this on the rental properties, you got yourself in a lot of risk. You don't have any margin right now, and you're celebrating $15,000 being the kickoff of those rental properties. So something's got to change. You have to decide what do you want to change. But paying off $47,000 at the income that you guys have is not hard to do without just-.

Without selling.

Any property. Yeah, you don't have to sell anything. Just get hustle and pay it off. Cut expenses.

Make.

Some more money.

I'm looking at it this way. You throw $5,000 at the debt, it's gone in 10 months, correct?

Yeah.

Do you have $5,000 of margin to throw at the debt.

Per month?

Yeah, I think we could make that work. I love saving money, but right now we need.

To get rid of that. But you also called us saying, Dude, I'm overwhelmed. Right now we just found out we have an extra 15,000 of debt. To tell me that this debt isn't weighing on you, whether it's the mortgages or the consumer debt, would be a lie. I'm just trying to get you to look at the reality of it going, We can solve this pretty quickly, either with our income or by selling one of these properties, and we're going to lose our precious cash flow, which will knock it, I'm guessing, in half, right?

Yeah.

But you'll be back. If you do this a different way or the right way, you'll be back to being a real estate mogul paying cash for properties with some sweet cash flow.

But.

Right now you guys are super young, over-leveraged, like Ken mentioned, and trying to figure out some loophole to get out of this debt. But you're the solution, your income.

Jacob, I want to challenge something you just said because I do think it's the way you're thinking about all of this. You're a smart guy, hard worker, you're going to be successful. We're not worried about you. But you said, I just love saving money. How can you love saving money when you're- Giving away- -over-leverage and you're giving your money away to other people? I don't think that you're a contrarian, but I'm just trying to point out that that's what I'm hearing the audience is hearing. You're going, I just love saving money. That's why I don't want to pay off my debt. Does that make any sense when you hear it back?

Yeah, I think when I think about it, I love saving money so that I can invest it in other places rather than spend it on consumer things.

Right. But my point still holds. The best way for you to save money is to eliminate debt.

Yeah, add up those payments. And then- More margin. -if you could invest all of those payments instead, look at what that would turn into over the next 35 years of your life, and that will cause you to get out of debt real quick. Yep.

Margin, my friend. Margin. Really think about personal, financial margin. Not the margin that they talk about in Wall Street movies and TikToks and all this. I mean, real financial margin for you. You got to understand that concept. When you get that, that's freedom. Game-changing freedom.

You guys got kids, Jacob?

No, not yet.

As soon as you do, you're going to be thankful that you got no payments. Because go back and listen to some of the calls we've taken where people are going, We have a second kid on the way, but we have all this debt, and I want her to stay home. But it's really hard for us right now. Man, you're too successful and smart to ever deal with that problem. This is very solvable, but there's only two options, and they both require sacrifice and behavior change.

George- Pick your poison. I got three teenagers. They're very expensive. I can't get them out of the house fast enough right now. I'm kidding. I'm kidding, kids.

Your son, Ty, could be on Man Vs. Food. That guy could.

Down a ribby pretty quick. I was telling you, the amount of food I go through is insane. It would frighten you.

Young parents. Be ready. Have some financial peace. That's always the best plan of attack. This is The Ramsey Show.

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Com/smartvester. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramseysolutions. Com/smartvester. Welcome back to The Ramsey Show. I'm George Camel, joined by my good friend Ken Coleman. Hey, the Ramsey Christmas Cash Giveaway is going on right now. You could win one of our $500 weekly prizes or the grand prize of $5,000. Just go to ramseysolutions. Com/giveaway. You can enter every day to increase your chances of winning. While you're there, be sure to check out our $12 sale on some of our best-selling books, tools, and products at ramseysolutions. Com/store. Ryan joins us up next in New York. Ryan, what's.

Going on? Hi, Jordan. Can you hear me?

Good afternoon.

Good afternoon. My question is, I have an $8,000 bill that just came up and it needs to be paid by the end of the year. It's basically a lookback policy that needs to be paid for liability. So what I'm trying to figure out, could I just simply take the money out of my money market account? I have about $10,000 on my money market account, which I have considered to be my emergency fund, which is dwindled down over the years and it's down to about 10,000. Or would I be better off decreasing my 401(k) contributions or reduce the amount that I'm paying extra on my mortgage each month. And then the other option is if I have an open $25,000 money equity or home equity that I could take at eight %.

Of.

That expense. So we're going to go into debt to pay off debt.

That doesn't track. Exactly.

Exactly. Let's not do that one. If the only cash you have is that 10k liquid to your name. Is that what you're telling me?

Well, as far as something I could take out with any penalties, basically just the money market account, that's spendable cash.

Okay, yeah, I would use that, but you immediately need to restock that and get it to a full emergency fund of 3-6 months of expenses. Is that the only debt you have currently other than your house?

No, my home, I have that down to under 150,000. So that's something that I'm hoping to pay off within the next couple of years. But yeah, no other significant debt beyond that, just the typical credit card that come in. But I always pay them in full every month.

I'd cut those cards up, man. They have not been serving you up to this point, and they will not in the future. So that's going to be your best bet.

I've never paid any interest on them. I just use them for groceries and gas, and things like that.

Well, you can never pay a dime an interest and still retire broke. That's America for you, and that's where people are at. I'm proud of you. I'd rather you never pay a dime an interest and pay thousands, but it's not a wealth-building tool, and it just makes credit card companies rich. That's one of the- credit.

Card is paying for your typical expenses with gasoline and groceries and Amazon. How can you live without a credit card at all?

Well, I've done it for a decade now, and I've lived to tell the tale, and here's how I do it. I use a debit card. If you're worried about privacy and that thing, you can use a website called privacy. Com to create virtual debit cards. It's tied to your account, but it's a virtual debit card number that if was stolen, you'd be fine. That's one thing. If your debit card has a Visa or Mastercard logo on it, then you have their zero liability policy with your debit card. You're fine. But as far as the bill, pay that down, get the emergency fund back up to where it needs to go, then begin investing 15 % if you're not already. Are you there or are you not investing that much?

In which account?

Your retirement accounts.

The retirement, I've been maxing it for a couple of decades now.

Oh, good. Okay. Yeah.

No, I've maxed it. That's my one priority is to always make sure I'm maximizing my 401(k) every month.

Wonderful. So beyond your 15 %, I assume you have a great income if you're doing that.

I'm doing okay. We don't have crazy expenses. I have no need to travel, that thing. We pretty much just have a list of priorities, and my priority is to obviously be comfortable in retirement.

And having no debt. And so your next thing to solve there is getting rid of that mortgage. So beyond investing, I'd start attacking that mortgage once we have the emergency fund, once the instead's paid off. And so that will set you on the path.

So as far as my second option, what I mentioned, possibly decreasing those 401 contributions or maybe not paying extra $500 a month on the mortgage, would you just stay away for a minute?

I would stop paying extra on the mortgage for now to restock the emergency fund. But right now, I would instantly just get rid of this bill with that cash that you have on hand and restock it. It's not worth pausing investing when this is a very quick, temporary thing.

Yeah, okay.

But I would pause the mortgage payment until you have that six months saved and expenses. That's going to give you some great peace as you head into retirement, and it will allow you to never have to go back into debt again and not have to worry about these ankle biters that come up. Thank you for the call, Ryan. Appreciate it, man. Aden is up next in Dallas, Texas. What is happening, Aden?

Yes, sir. I am 15. I have around $25,000 in cash and $10,000 in equity, and I'm not sure.

Where to go from here.

Wow, 15. How did you get the cash?

I've.

Started with $400 since I was about 12, and I've just had this thing for dirtbikes.

Then ever since I bought my.

First dirtbike for $400, I've been flipping them.

As of now, and now I have $25,000 from flipping dirtbikes.

Flipping dirtbikes. Heck of a story. Give me a quick rundown on how much you're spending and then how much it takes to fix them and then flip them. What's the average? What would you say?

Right now, I'm.

Averaging.

Around.

$1,000 to.

$2,000 in.

Each flip.

My most.

Recent one was actually I spent $5,400 and I made $7,000 from it.

Nice. I sold.

It for $12,000. That'd a boy.

That's phenomenal. That's around $6,000.

Wow.

George. How about this? How about this? I'm very impressed. You have this entrepreneur bug in you, it sounds like. You may not go the traditional route since considering you made 25k at 15. Yes, sir. How many years did this take? You've been doing this for a while?

Yes, sir, four years.

It's picked up this year mainly. The last.

Three months is.

Honestly when I made the most because I've averaged around $2,000 to $3,000. Then I finally got into it. Mainly, I'm like, Okay, I really want to do this. Now I'm making pretty good profit. Now I have $25,000 plus four dirtbikes right now. Yes, sir.

Fantastic. What's your equity? You said you had 10k equity. Is that in the bikes?

Yes, sir.

Okay. Well, you're asking us, what should I do with this money that's sitting in the account?

Yes, sir.

Well, for starters, I would just keep it in a high yield savings account for now so that I can grow at a decent rate for you, 4 or 5%, while you decide what's next. Now, at 15, truthfully, you got no clue what the next 10 years looks like. But one of the keys is to stay debt-free.

Yes, sir.

If you can continue buying these in cash and flipping them, that's going to be your best bet. But what does the next five years look like for Aden? Does he want to be flipping dirtbikes at 20, 25? Are you wanting to go to college and get into a career field?

Yes, sir. What I'm going to want to do, my.

Brother went.

Into the Air Force. I don't know if I want to follow him or if I just want to chill and do this as a little side hobby.

But what do you want to do with your life? That's my question. Yes, sir.

That's a big one. I don't know yet. Yeah, you're 15. Uncle George is being very intense right now. That's so intense with A to B. That's a tough one to add, the answer. I'm just wondering because.

He could follow this path. He could still be selling dirt bikes at 50. I don't know. I'm just wondering if he loves this, but it's not the dirt bikes itself necessarily.

Let me pull it back a little bit really quick. Are mom and dad buying you a car? Do you have to buy a car? Yes, sir, they're buying. They are buying you a car? Yes, sir. All right, so you don't need the money for a car. I can tell you don't need money for girls or spending cash. You're fine. All right, so the savings account. So what's next? It would be college or some type of a trade school or some type of training at 15. You just don't know and you don't need to know yet. But I just got a sneaky suspicion you're going to be an entrepreneur, my friend. Please don't let anybody talk you into college unless it is the only way or the best way to do something, because you're already showing us what the American dream is.

There's folks with a business degree that don't know.

What you know either. They can't make the money you're making if you stuck them out there on the main street and said, Figure it out. They couldn't do what you're doing. I can just tell you that's the truth. I think George is right. Does he invest a little bit? A little bit?

I would open a Roth IRA if I were you made it. I would. You got earned income.

I would.

That's one way to do it. I'd max one of those out for the year. In 45 years from now, you're going to call back and say, Dude, I'm a millionaire. Just because of that, I count a loan.

That's it. Invest that Roth and then save, save, save, save, save. The more you save, the more options you have, young man.

Yeah. You can have $100,000 at 22 or you could pay cash for your first home. I mean, these are the goals that we all have. I wish I'd go back in time and become Aden.

I wouldn't touch into college at all. I'd say go find out how to flip something else. That guy's going to be a multimillionaire.

Thanks for the call, Aden. This is The Ramsey Show. Our scripture of the day, Hebrews 13:16. But do not forget to do good and to share, for with such sacrifices, God is well-pleased. Charles Spurgeon once said deciding what not to do is as important as deciding what to do. Wise words.

Charles Spurgeon. You know who that is? Oh, yeah. All right. Then he called it the Prince of Preachers. One of.

The greats. I like that. Him and C. S. Lewis are up there, the all-time greatsC.

S. Lewis is not a preacher.

Well, I mean, as far as the writing goes. All I see. Their writing is masterful. All right, that works. Thank you, Ken.

It's fun. I'm a technical. I can't help myself on the history stuff. I got too nerdy. Well, you're a preacher, K. K. But I get what you're saying. You were saying overall voices of.

The faith. You could beat me in sword drills.

That's for sure. Boy, couldn't I.

All right, let's get to the phones. Leslie is up next in Birmingham, Alabama. Leslie, what's going on with you? Did I screw it up? There we go, Leslie.

Hi, how are you all? Thank you all so much for taking my call.

Sure. How can we help?

Yes. Really, it's just been difficult over the last few years to try to figure out the right mindset around this, and I know I'm messing up because I'm going into debt. I'm trying to get a hold of that. I actually called in a few weeks ago, so Ken may remember me. But basically, my son has some health conditions, and it's just hard to know the right balance between being frugal and doing things that are good for his health. For example, there's the whole idea of red dyes linked to hyperactivity. Okay, remove red dyes from food. That means you're going to spend a little more in some cases, just little things like that: asthma, get a waterproof mattress cover, that thing, little things like that. It's just how you deal with the anxiety and how you balance quality of life for your and being frugal. It's hard to figure out what's essential and what's not because you want the best for your child, but you also don't want to be in debt.

Well, let me step back then, and I understand this need as a parent. I really do. Because you go, you read an article this day, you read an article the next day, you see something on Instagram, and it's like, This is good. This is good. You go, I just want to give my boy the best I want to give him the best shot, and it's going to wear you out. You can get a different opinion on something different every day. For instance, we all see this in the news. One day, bacon will kill you. The next day, bacon is the key to long life. Who really knows? I don't know. I always stay in the middle because I just keep eating bacon. I'm in good shape regardless, because if that's how I die, it's a good way to go, eating a piece of bacon. Now, I got distracted. The question I have for you as a mom is, are you doing the best you can with what the doctors are saying that you need to be doing and providing him that care?

I feel that I am. You are. It's really just- You are. -trying to go above and beyond to take advantage of the latest research and all that.

I know, but my point is I think there's a point where you have to go, I'm doing the best I can, and what we're doing is enough. You are enough. You're doing what the doctors have said. At some point, you can't live in fear. You got to live with faith, and you got to move forward. I totally understand where you're coming from, but you can drive yourself crazy.

Leslie, let's get tactical. What is causing you to go into debt?

Well, there's car repairs that I didn't have any savings for that's piled up on credit cards and then moving expenses. But then a big part of it is just monthly expenses that I can't afford. I had a lot lower income. So what's your income now? I just got a better job, which is great. But it's 70, but I have a lot of debt.

What debt do you have?

75 in student loans and 25 in credit cards.

But how much of that credit card debt is these sheets.

This bed system? I'm just wondering how much is your son versus just life has hit you? Because I don't want you to confuse the two.

Yes, I've actually been wondering that, too. I should probably go and, I don't know, go and analyze the accounts and see what all... I feel like at least half of it, though, is buying really good quality food, air filters.

Supplements, things like that. It is. That's why you started the call that way. That's what's going on. Now, we've found a problem, Georgia, she doesn't actually know.

Well, that's where the budget's going to come into play. Did we gift you every dollar last time you spoke to Ken?

No, but I actually do have a budgeting app that I'm trying out. It's not every dollar, but I'm getting wine out of shot, but I might go to every dollar.

I'm going to give you every dollar premium because it's going to come with all the sweet, sweet features.

Why did I.

Not give it to her?

And it's so much simpler. Who was I on with, Leslie?

You're getting the heat of the moment. Who was Ken on with when you spoke?

Let's see. It was Rachel, That makes sense. You gave me the get clear assessment.

Oh, I gave you that. It was more for the.

Career side. I gave you for the work side, but we should have given you the budget. Okay, I want to make sure it's probably Rachel's fault. She's not as giving as I think, so I think that's probably her fault. I'm kidding, folks.

It's a joke. Well, Leslie, once we get off the line, hang on, Schuyler will give to you that every dollar premium app per year. But here's what you're going to do. You're going to list out every single expense and you're going to do an audit. This is not just what I want it to be. You're going to match it to reality of what things are actually costing you. Part of that is looking at your bank statement and going, Oh, my gosh, I spent $1,200 on food, and oh, I forgot that subscription we were still paying for. There's things that we can cut back on that's going to help. But the glaring issue here is the $100,000 in consumer debt, not the fact that we have to buy organic groceries. Part of this is, truthfully, we got to cut up the credit card. It's become a plastic crutch that is not serving you. If push comes to shove, how would you cover expenses if you didn't have the credit card. You would cut back in other areas or you'd go make more money, right?

Yes. I've actually just gotten on a plan that's going to, with a nonprofit, and the credit cards are closed and it's a much lower interest rate.

I just got a pay-off. Oh, no. This sounds like a scam, Leslie. Did you get in touch with one of these debt relief companies?

No, it's a nonprofit. It was actually recommended to me by Chase. By who? It doesn't ruin your credit or anything. By Chase, the credit.

Card company. Hold on, hold on. You thought a credit card company existed to serve you in any way, shape, or form to help you get out of debt? Listen to that. Just listen back to what you just said.

They don't make any late payments. They don't make any late payments. It doesn't mess up your credit at all.

I'm very concerned about what this program is, and I would go read the fine print to figure out how you got screwed, because I'm almost positive that it's not going to help you. But the key here is I want you out of this credit card debt. You may prove me wrong, but I've just never seen one of these programs that actually helps people get out of debt any faster than your own. The solution is Leslie and her income and her behavior change, not some gift from Chase Bank.

Yeah, it's a nonprofit, but yeah.

Well, okay, here's the deal. What George is saying is, I want you focused on the budget because you got to know how much of your expenses are going to doing everything you can for your little guy. Then you got to be able to start walking through that with your doctor and going, We've done the best with what we have to know and what they're going to keep doing and treat him that way. You can't pay for every theory or every hack or whatever to make his life. You just can't. You're limiting. If you're limited, he's limited. If you're stressed, he's stressed.

The best thing you can do for that little guy is to get out of this debt and have margin. That needs to be your A1, of course, while taking care of him and doing what you can do. But this is going to become a line item in the budget. The groceries might be a little more expensive because we can't buy the processed junk food anymore. We've got to get actual fruits and veggies and meats and whatever. You might need a bigger line item for shopping to get some of these things. But I don't want you to feel like this is a cycle that's forever. You get the waterproof mattress cover once. The bigger thing is getting out of this debt, getting a full emergency fund in place, then making 70k, we can manage to cover those expenses for this guy and get him to a better place health-wise. We're wishing you the best, Leslie, in this debt payoff journey. But read the fine print with whatever... I just don't trust Chase with a 39-and-a-half foot pole.

I don't think you should either. Hey, nice Christmas song reference.

Thank you. That's what the credit card companies are. They're the Grinches, stealing your Christmas joy.

You're a mean one, Mr.

Grinch. Now we're off the air. Thanks, F. C. C. I'm just kidding. I got so nervous. No, I wasn't nervous at all.

I just didn't understand the joke. That was.

Actually pretty good. I'm not going to lie.

I thought it was pretty decent given the fact I didn't know I had to prepare for that voice today. The studio audience all enjoyed it. I'm getting cheers and thumbs up.

Don't encourage them, America.

Thank you all very much.

Hey, that puts this hour of The Ramsey Show in the books. My thanks to Ken Coleman. All the folks in the booth and you, America. We'll be back before you know it. In the meantime, spend wisely, save intentionally, and give generously.

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