Break The Borrowing Cycle

0:00Brought to you by the EveryDollar app, start budgeting for free today. Normal is broken, common sense is weird, so we're here to help you transform it your life and your money from the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey Shom Jade Worshaw. Next to me Rachel Cruz will be taking your calls about life and money for the next hour or so. So if you want to get in, get in where you fit in the number is triple 828255225 Rachel, you're ready to get into it. Oh yeah, let's do it Jay. Alright, let's go to the line where we've got Ethan online for what's going on Ethan from St. George Utah. Hi, how are you guys doing? Doing alright, how can we help? Okay, so I've got a question. Me and my wife we just got married at the beginning of May and we moved past baby step one and we're on baby step two and we recently found out that she's expecting in late

1:04April, early May. Oh, congratulations. Thank you and I was just curious. I've got about $20,000 liquid cash but I'm in about $62,000 in debt. I've got about $8,000 on a truck loan and then I've got about $54,000 on a piece of property that we just signed on. And I was just curious is it alright for me to keep like a $20,000 to $25,000 emergency fund temporarily until the baby comes? Absolutely. I mean, that's exactly what we would teach. We kind of call that stork mode over here which is the idea there's a baby coming, the stork's coming, you get it. And so there's some uncertainty during that time and so financially to pause what you're doing on the baby steps and stack up money to prepare for that is really the wisest choice because the truth is there are a lot of unknowns. I mean, gosh, God willing, we hope that you go in, have the baby, there's no

2:05problems, no nico stays, no extra expenses, but you never know what's around the bend and just have the money for that. I always like Ethan for people to have a good bead on what they're out of pocket maxes, what they're deductible is. And I really feel like that's a fair amount to kind of have the goal of stacking up and getting ready for a baby. And then after the baby comes and everything's all good, yeah, you can push play on the baby steps. Yeah, Ethan, how much money could you put away each month between now and then? So between my wife, we make about 90 to $100,000 a year take home. And right now we don't have to pay rent or anything and we will start having a parent in either October or November. So realistically, we could put away $4,000 or $5,000 a month. Is that with rent? That is with rent. Okay, I don't know, okay, Jay, tell me this because we do talk about store commode, but you already

3:06have $20,000 Ethan in the bank. You got an $8,000 truck and then you have this piece of property. There's a part of me that I would I would I would keep the 20 grand if you want to bump it up next month to 25. And then I may work on sell on the truck just because it's eight grand and you guys have, I don't know, $4,000 coming in for the next eight months. So there's a part of me that I'm like, you're going to have, gosh, 70,000 sitting in like you'll have a lot in there. So part of me just says get the eight grand take that take care of that once you have your fully your emergency fund funded where you want it to be before the baby. Yeah, because normally people don't have this amount sitting there in baby step two Ethan, you know, like when we talk about the baby steps, baby step one is $1,000. Yeah, for sure. And then you throw everything else at the debt. So usually if people get pregnant baby step two, they only have a thousand dollars. So we're like pause everything. You know, save up an emergency fund between now and then. But because you guys have that 20 grand sitting there, I don't know, it's a part of me that say cash flow paying off the car by the end of the year. I think you should,

4:08like I said, as long as you are covering what really could just be your out of pocket maps. I think that you're good for the year. I think that's a lot. And that's usually like 10 or 12, like I guess if you're insurance, depending on the quality of your insurance, but just check that. And then I love Rachel's plan. I think that's excellent. You can do a little bit of both and be covered both ways. Gotcha. For sure. Awesome. Well, thank you guys. Yep. Absolutely. I'll answer my question. And I was just curious on that because I've listened to quite a few episodes and wasn't 100% clear on that. But I got my answer. So, well, thanks. Good luck. Good luck with everything. Yes. The new parents. So good. Thanks for the call. Drew is next in Minneapolis, Minnesota. Hey, Drew. How can Rachel and I help today? Hi. How are you? I'm really good. What's up? I am curious to hear your guys' perspective on what I should do with my house. So they gave some context. I recently bought it. I moved in around the end of June.

5:09I've been some terrible wicked game violence in the area. Oh, I decided considering finding married in a few months. And I do not want to bring my future life into that home. Did you not know the area when you purchased it? Are you new to the area? How did that not well enough? Not well enough. So I will fully admit, like I did not do enough research as I should have to fully investigate that area. But, yeah, I mean, some of those were pretty bad soon after I moved in. Sure. Yeah, I don't blame you. Yeah. I'm not. Right. Yeah. I don't. So I put it back on the market. Currently it's been on there for two weeks. And there's been one showing one open house, one person that came to the open house. So really, two people have visited it in the last two weeks. I listed it for, well, I bought it for 268 with celipade 7K.

6:10So 261. I put it on the market for 205. It's now listed at 268. So what I bought it for. My realtor and I were contemplating with the lack of interest in the home and the current market to explore the option of buy down. And or even other options such as renting or just dropping the listing price. Yes. Before we do that, I mean, it's only been on for two weeks, which is if you go to our real estate hub, Ramsey Solutions dot com slash real estate. If we type in Minneapolis, Minnesota, we can see that like median days on market for your area is 39 days and you're at 14 or 15. So you're not. There's no reason to panic just yet. But I do want to ask the question. The type of violence that was taking place was this like all over the news and everybody knows it's your area or was this kind of isolated

7:11and just the folks around you know about it. You was on the news, yeah. Okay. So you feel like that specifically is impacting people wanting to purchase. Because now everybody knows like this is a bad neighborhood. I see what you mean. I don't know exactly if that would play into the disinterest in the home. Is it a great question? I haven't really considered that. Well, I don't know either and I'm not suggesting that it is. I more so was asking you if you felt like it it were. Yeah. But yeah, 39 days is median. So I would say give it time, right? Yeah. And then there was shootings next to you. So I'd give it an extra 20 on top of that. Give it, give it two months. You know what I mean? Just give it, give it two months. And yeah, I would be a little bit more patient than jumping in because you probably don't want to rent it. Definitely not. Yeah. And then all these other programs get pretty messy. So I would be patients.

8:11And if you want to move out in the meantime, you'd be paying rent and a mortgage. I don't know if you want to do that. But you'll probably be fine. I mean, I don't know. I would think you're okay. I understand you don't want to bring a family there. So yeah, I would and check out our real estate agents too. Drew because our trusted real estate pros are like the top of every person. Or these real estate agents, they're amazing. And so maybe just talk to two of them and just kind of get some fields and see if they know because they're in another area. See what they think. Hey guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And healthcare is one of the biggest expenses in most family's budgets. And that is why I recommend that you check out Christian healthcare ministries.

9:14CHM isn't insurance. It's a health cost sharing ministry. That means members help pay one another's medical bills. And they've been serving Christians since 1981. CHM programs start at just $115 a month. And here's why that matters. If you are paying more than you need to for healthcare, that money could be going toward paying off debt, building your emergency fund or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now new members can receive a 50% credit towards their first month of membership. Go to CHministries.org slash budget and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. All right, back to the phone lines we go. We've got Caleb who's in Dallas, Texas. Hi Caleb, you're on the line. Hey, thanks for having me on.

10:15Yeah, you bet. How can we help today? Yeah, so my first job here out of college, and I just got a commission check today. My account for $12,000. My first job here. Good for you. And I have about a thank you. I have about $34,000 in student loans that I'm trying to pay off by October of 2020. I'm going to have a $34,000 job here. I'm going to have a $34,000 job here. I'm going to have a $34,000 job here. I'm going to have $12,000 in student loans that I'm trying to pay off by October of 2020. I have about $12,000 in savings as well. And I'm just curious how to attack these loans with that commission check. I want to put all of it towards my loan share. I got a mix of the good salary, may ones, and then government loans as well. Well, gosh, number one, congratulations on the commission. That's really, really great. You got the $12,000 saved. If I were in your shoes, I would walk the baby steps, which is the plan that we teach. And the first three steps are the ones that I would focus on if I were in your shoes.

11:15The first one is we really just need 1,000 saved while we have the debt around. So let's drop the $12,000 saved down to 1,000 and put the remaining 11 on the student loan. And then let's take whatever you don't need from the commission check. So once your bills are paid and everything is cool with your budget, whatever margin is left over, let's also throw that at the $34,000 student loan. And my guess is you're going to be done with this well before October of 28. Unless there's something that we're missing, like, are you still needing to pay for? Are you still in school doing tuition? Is there anything else that's like eating up this $12,000 in commission that you're going to be earning? No, I don't believe so. I have my, I have a base salary as well. That throws up to about like 40,000 after taxes. And I've been using that to pay like my monthly rent and all that kind of thing, groceries, etc. So I'm pretty set there in this commission check. Yeah, I can pretty much go towards all those loans. There's like four of them that are government that are pretty low percentage interest rates.

12:16And that's two that are private that are like 11 and a half percent pretty high. So I'll probably, I'll put in all the down towards the highest interest rate ones, but I've also seen some advice to just attack the small ones and get those out of the way too. Yeah, it's more, it's more efficient long term to actually, which is weird because it goes against math, but to pay off the smallest debt first. So if you list out all six, what would be your smallest? I'm just curious. More would be about $2,200. Okay. And then what's the next one? Yeah, $3,200. Okay. And the next one is about $3,500. Okay. And then $5,000 and there's two of those. Private ones are $8,000 and $11,000. Okay, so what's great is you could knock three out by, you know, by when you get your commission check because you'll get that you have $12,000 saved. So just knock the three little ones off. You may have some going towards that $5,000 and then start working down from there. So yeah, it is actually more efficient just to get those out of the way because all those payments,

13:16those three payments now are freed up to then snowball on top of that $5,000. So you'll have even more moments I'm going in. Okay, I love it. And then I dropped on the savings amount too, as well as I can get it. And just attack it with the rest of that as well. Exactly. Yep, that's it. You're going to be out in no time. Yeah, well done. Well done. Yeah, appreciate it. No, thank you. Yeah, it's a, it's a good decision, but I guess all I got to go for it. I know. It kind of, it's one of those like, that is part of paying off this deck because you get a $12,000 commission and you've worked hard for it. And then you're like, I feel like I got to go, I got to work on my mistakes. For sure. I got to go in the past and pay it off to enjoy your future. But the great thing is you'll look up, I promise you Caleb. Gosh, in 12 months and you're going to be completely up for you. You'll have a fully funded emergency fund and you start getting those checks after, after being a year in commission roles too. Yeah, more, more. Oh my gosh, you're going to, and there's going to be no payments and you literally have your whole income to give and invest and keep moving through.

14:16So that's awesome. Yeah, and two highlighting, I mean, there's that side what you just said Rachel, of not being able to live in your income because of the mistakes. But then there's the, he's got to turn around and drain the 12,000 of savings and a lot of people feel a connection to that. That's right. And now it makes you feel like you're going backwards. You know what I mean? Right. One sense of the word. But man, when you, when you don't have those payments because we say it all the time, but it's true, you're largest wealth building tools you're income. And when your income's all yours and it's not going out to six different loans every month, it's amazing what happens when you actually start earning interest and start investing to that money instead of paying student loan companies, you know, Sally May and the government and paying interest on those. And I also think of it, you know, when you've got this cushion of savings, he's got 12,000. We talked to people gosh, with even more 20 or 30,000 and we're asking them to drain it down. It's kind of like if you've ever lost weight. Yes. After the fact you're like, gosh, I didn't realize like how I felt when I had this on me,

15:17but now when I lose the weight of the debt, I feel so much better. So much so much. And then like, it's 10 pounds. If you go pick up a 10 pound weight, you're like, oh my god, this is so heavy. I can't believe this was on my body. Yes. Yes. Carrying it. And so it really is, we've never had people take their money, pay off their debt, and then go, gosh, I wish I had never done that. That's right. And so it's worth it every time. Let's go to Elizabeth who's in Scranton, Pennsylvania. What's going on, Elizabeth? Hi, yeah. So my husband and I are just trying to figure out. It seems like we can never quite make it to the next paycheck. You know, I do budgeting. Like I handle all of our finances. So I do all the budgeting and it just, it seems like it just never, I don't know what we're doing wrong. Okay. How much are you guys bringing in? And how much is your account every month income wise? Every month is about 80, about 8,000. 8,000. How much are your expenses? Okay. So this is part of the problem here.

16:17The expenses not including like food or food budget, which I know it should, that should be top of the list, but not including that. Our regular basic expenses are about 7,069. What are you all paying? What's, what's your mortgage? Mortgage is, it's five fifth. I mean, it's like everything. It's just everything is like skyrocket. Mortgage is five, 50 a month, which is nothing. I know. Oh, yeah, that's great. Okay. Yeah, we got in with 3.4% interest. So we're great with that. Yeah, that's great. Okay. Yeah. And then there's just all the other basic living things like a electric insurance. Do you have a care? Or you can't do that. No, I don't work. My, I have a state home mom. Well, there's going to be some $6,500 going. Yeah, I mean, there's a lot. I mean, it's like our house, our house, and my husband is technically considered self-employed. So we have, we have liability insurance, house insurance, car insurance on three cars. That's $360 a month. Is that our car part of his business? No, it's my son's car, my son who's college.

17:18So what's the total of car insurance and gas? What is that total? On I three. I have, it's all like together on the policy. What's it total? That's $660 a month, not including the gas. The gas I put in our, you know, kind of a food. So again, we're at like 11 or 1200. We've still got thousands of dollars to account for. And you said that's not even including food. Usually food is one of the bigger ones. So there's got to be something in here that's what I'm just going to say out of the usual or sloppiness. Yeah, I'm trying to figure out. Are you guys just spending or? We're really not, I mean, we're not big spenders. So we do, we tie it. So that's $600 a month. Our heat, we put aside $300 a month taxes for the house. Our houses, our taxes are not escrowed. It's $600 a month. Our electric bill is $500 a month. Life insurance to 220 a month. That's a little high.

18:18The life insurance. One of the parmes is a, yes, they are term policies. One of them is a return of premium policy. So that's why it's a little higher, I think. Cash resting. Okay. I mean, so everything is kind of like $500, $600. And there's no debt. Do you guys have debt payments? We do have, we have two credit cards. One has just over $2,000. One has about 1500. And then we have a car loan that's at 1900. $1900? Oh, I know. I'm sorry, 19,000. Sorry. 19,000. What do you pay a month for that? The car is 384 is the minimum. Is the auto pay the $1,400 credit card. I try to pay 800 a month on that just to get it. So it sounds like there's a lot of ankle biders. What I would do, do you guys have every dollar? Yes. What I would do tonight, I would go through every dollar. And I would just look at everything and say, is this a necessity? Do we need this? And do we need it to this extent?

19:19Like if it's something you're paying $600 on, do we need to be spending $600 on this activity? Because at $8,000 a month, I have to believe. And your mortgage is such a small percentage. There's no one in day care. Those are the big ticket items. If there's insurance, that's probably the biggest one. If you guys are self-employed. But again, for you, that would be taking the place of something like day care realistically. So I think there's just a lot of items that you can scale back and find some margin. You need to be a detective and figure out what the problem is. But go in there knowing that there's a solution. Don't tell yourself there's nothing you can cut. Most people spend years changing their money habits, but never think twice about how their bank probably works against their values with nuisance fees and endless debt products.

20:20If you're being weird by sticking to the baby steps, you deserve a bank that helps with that. That's why Ramsey partnered with Fair Wins Credit Union. They built the smart bundle specifically for Ramsey listeners, not for everybody else. And it includes up to 10 high yield savings accounts, so you can set up different funds for different needs and goals. And now they've introduced the Live Like No One Else debit card. The original debt is normal, be weird debit card is still available too. And every time you reach into your wallet, your card is a daily reminder that you follow a different path. Listen, if you're living like no one else, your bank should back you up. Check out the Fair Wins smart bundle, including the all new Live Like No One Else debit card at FairWins.org slash Ramsey. That's FairWins.org slash Ramsey, insured by the NCUA.

21:35Well guys, everyone needs insurance, but the truth is it can be hard finding pros who aren't just looking to make a buck, and agents who actually know their stuff. Ramsey trusted insurance pros are vetted and coached to make sure that there are experts in their market, and there are experts who have your best interest at heart. So go to RamseySolutions.com slash Coverage to find the type of insurance that you're looking for and connect with a Ramsey trusted agent to help you do it. All right, we've got Cordell, who's in Little Rock, Arkansas, up next. Hi Cordell, how can Rachel and I help you today? Hi guys, thanks for taking a call. You bet, what's up? So, Little Back History, back in 21, I saw the show and made my mic premiered in 21, and Pat Debt's kind of just caught fire. I was like, well, I can be a millionaire by the time I'm 50. So, I had a very nice check at the time, sold it, got $30,000 cash off it, paid her vehicle off, she had coast on for someone else's vehicle before,

22:39paid down off, paid her credit card off, cut it up in front of her, which was a heartbreaking thing, but we both decided to do it. With that week paid off our cell phone, just to eliminate every debt we could. That was in 21. Yes ma'am. Okay. And this is a truck that we don't have kids yet, but I was like, one day I'll give it to him. Oh wow. It just missed a lot to me. So, we've been budgeting going through, and our second year marriage, she wanted to go to nursing school, go back, and we paid as we went, got her through that, she's registered nurse now, and then she, her car, wink of put, and as a gift for graduating, pasting her in-collects, everything she needed to do, she wanted a Denali, which probably wasn't smart as a dad. Because you didn't pay cash.

23:40Did not pay cash at the time. You want to celebrate getting a possibly a $90,000 job with a $90,000 car. Can you walk me through, like Rachel, can you walk Rachel and I through that corridor? Because you're sitting here telling me what a struggle it was and what a sacrifice it was for you to sell that truck to pay off all that debt. How in the world did you get to there, from there to like, yeah, like 80 or 90 on a Denali feels right? So, really, I think I just gave in to her and we had about 20 grand in cash sitting there. And I was like, this is your dream car. She's going to be making good money. I make pretty good money. Well, no problem paying it. And then, you know, we're already paying a thousand extra on our mortgage amount. We're going to afford this. Okay, so you got it. What did you end up spending legitimately? A $68,000 and a $40 on it right now. Okay, so you owe $40.

24:41Yes, ma'am. What else? So the only other thing I have is my mortgage and right now, 120 on it. My dilemma is, I've, we've worked really hard at saving money. And right now, I have $6,400 and much-checking. I've put 10,000 of my emergency fund. I just put 10,000 in a CD. I can pull it out at any time, but just so we don't touch it. And then, I've really been wanting to get a truck. And so, I went on the road this year from April to August. I saved up about 75,000. Okay. And now I met the dilemma. Do I buy my truck? Well, where's her money? Where's her money? What, you just gave me all your numbers? What is she making as a nurse? So she makes about 75 years of nurse before taxes, and I make 110 before taxes. So, 185 a year combined. And I'm not trying to poke holes in what you're doing.

25:42I'm just saying you saved up 75,000 for a car, but there's only 10,000 in the emergency fund. Yes, ma'am. So, this year, the 75, that was an extra. That's added onto my annual. There's like a bonus. I did that in five months. I had to travel around the US to do that work. No, and I commend you for saving up the money. I'm just saying, don't you think it's strange that you're earmarking more for this truck versus stacking up a proper emergency fund? What kind of truck do you want? It's a Denali ultimate. I like your cars. Gosh, I mean, what? It's not bad. It's like having a nice car is not bad. It's not, but I'm struggling with the mindset. Yes, your priorities are kind of all out of whack a little bit. And see, I guess that's why wife is encouraging me. She's like, I know you haven't had a truck in four years, which I haven't had a truck in four years.

26:43I'm so sorry. I'm just kidding. If George was here, he'd be a lot me. Yeah, truck guys. But what do you say? Tell us the real problem. First off, it was like, man, we owe $40,000 on my wife's Denali. Now we're over here. You're trying to buy a truck. You're trying to do yours and cash. It sounds like which is fine. But don't you want to get out of the current debt first? Absolutely. So what, when I say I was going to fire about it to get out of debt, I'd sit it down, put the numbers in front of her to see it. And I was like, hey, if we put it, if we pay an extra grant or a mortgage every month, you know, we'll save 70 grand at the end of the interest. And this and that. And so I guess I feel she's encouraging me to get my truck. I feel guilt. Yes. Well, hey, can I ask this quote out? Is it a brand new truck is going to cost you $75,000? They're about nine.

27:43I knew it. Okay. Okay. So listen, you'll have too much car. You make 185. These two cars combined are going to be about what you make a year. Yeah. So you guys can't, you have champagne taste in beer pocketbook. And I had to save your pocketbook of 168 a year because it's good income. But you can't afford this. This is out of, this is, I'll be honest, this is classic middle class America right here. That, that, that this isn't the for real. For real. And is that you're, is that you want, you want the nice truck, the brand new thing, and you make good money. Right. But you would rather have a depreciating asset going down in value because it feels good than actually prioritizing your financial life, which would look like getting out of debt, having cash saves in the bank, investing for your retirement. And then what we have left, we can figure out what to do. And we're going to buy a used car because you guys are not net worth millionaires.

28:45And so you have to, you have to look at these cars that the function is, it's not your identity. It's not who you are. It is to get you to point A to point B. And if it's a, if you're, if you're making a ton of money and you can afford that, that's great. We're not mad at it. But it has to be in a, in a reasonable sense. And you guys are just out of, out of, out of reason. Well, and, no, I'm looking at this going, I just wanted to be worth your time because you, you said in painted a picture that I felt, which is man, you guys really sacrificed in 2020, 2021 to win. Like you cut deep in order to do that. And if you go forward with this, you're taking all of the air out of that. Like you're taking all of the meaning out of that sacrifice and you're going back to square one. And so all that sacrifice will have been meaningless because now we're just back in dead again. And I said it yesterday on the show and I'll say it again, when you choose this path, the very first step that you have to take before you even start the baby steps,

29:45is you have to draw that line in the sand and say, I'm doing this because I'm not a person who borrows money anymore. I'm not a person who does that. And so you guys stepped over your own line when you did her car. And now you're stepping over another principle of the plan that you say you want to work when you do what Rachel said. And it's like you're buying more car, basically, than your income can afford. So I'm more in the, I'm trying to protect you and your wife because you guys have worked so hard. And I think I don't know. But what I'm sensing is like in our city and our town, we're like killing it. And we got these cars and there's like a facade that's attached to this. And I think that you guys are starting to play into that. And I think you have to be really careful. And you're feeling like I have a good job. She has a good job. I we deserve to have this. And I just want to remind you that I actually think that you deserve a life of peace with no payments. I think that you deserve to have the comfort and security of a fully funded emergency fund.

30:48I think you deserve the feeling of actually working hard and it meaning something at the end of the day. Not just shiny vehicles. And not letting your emotions drive you. I mean, you know, children do it feels good. And adults devise a plan and follow it. And so following a smart financial plan is going to help you long term more than a denolli will. Talk that talk. This show is sponsored by BetterHelp. I know a lot of you out there are trying to keep it together all the time. You show up to work, you pay the bills, you smile at the right times. But then no one sees you snap at your spouse or lie awake all night running through everything you'd wish you'd done differently during the day. Just because you're functioning doesn't mean you're okay. Talking to someone else is a great way to process what's happening in your life and get to the root of your challenges.

31:48That's where BetterHelp comes in. BetterHelp matches you with one of their 30,000 licensed therapists. Someone you can be real with and finally put down some of the weight you've been carrying and come up with a plan for getting well. They can help you get perspective and see the other side of your situation and help you with a plan for moving forward. BetterHelp Therapists to all follow a strict code of ethics and if the first therapist isn't the right fit, you can switch for no extra cost. Asking for help before you hit a wall isn't weakness. It's wisdom and strength. If you're exhausted from always having to hold everything together, trust a BetterHelp therapist to help you carry the load. Go to BetterHelp.com slash Ramsey for 10% off. That's BetterHelp, H-E-L-P. Good-com slash Ramsey. Alright, well let's get right back into it. We've got Colin in Boston, Massachusetts. Hey Colin, how can we help out today?

32:51Hey guys, thank you for taking my call. No problem. What's up? I'm a 26 year old from Massachusetts and I bought a voucher pad condo two years ago and recently got married. My wife and I were looking to see if it's feasible to get a house next year without going a house broke. If you guys can provide some financial planning for us. Gosh, I love that question. Congratulations. You're thinking about doing the house. The first thing I want to know about is your financial situation. Do you guys have debt? Do you have savings? Tell us a little about that. Yeah, so we owe about 228,000 on the condo and there's about 84,000 and equity on that. And the only other yet that we have is $8,000 on her car, which we're going to pay off in the next month.

33:55Okay. And then on top of that, I have money and how you have savings just kind of sitting there. And I guess I'm wondering if it makes sense to just put that money directly towards the mortgage and build up more equity. How much is in there? There's about 40. 40. And I also have three to three to six months in emergency savings too. Oh, so much is that separate than that? Yeah. Oh, good. Okay. And how much is the three to six months? We'll call it about 15,000 and that's three months or six months. I'd give it a, that's about four and a half. Okay, sweet. What price home are you guys looking at or in your area? What would it be? Yeah, and that's true. That's pretty expensive. I mean, a house that we would get is probably around 500,000. Okay.

34:55Yeah. And median listing price, by the way, in Boston. And I don't know if you're in Boston proper or if you're like out in the outskirts, but for Boston, it's 1.2 million is the median listing price. So it's, you're not wrong when you say it's expensive. How far out are you guys? About 20 miles. Okay. So you're not far out. All right. So if I'm running your numbers on our mortgage calculator and anyone that's interested, you can go to Ramsey Solutions.com and do that. Okay. It's looking like it's going to be about 4,300 for your mortgage payment. And how much do you guys bring home a month? That's around 5,000 take home. Okay. So now this is where we kind of get into the tough part because, I mean, you said it right and I think you have the right idea. You don't want to be house poor. You want to go into this with your home being a blessing and not a burden, which is what we teach. And so it's going to be really important for you to make sure that this payment, when you do buy a house, is no more than 25% of your take home pay.

35:55Yeah. So how much, and the condo you said, you guys have $84,000 of equity. But how much is it worth? The Zilla lastment is like a hundred or sorry, 318. 318. Okay. Okay. Yeah. I mean, honestly, Colin, I would say put where you are, keep paying down, you know, get this car paid off. I would keep, you know, working to pay down the mortgage so that your equity continues to build up. And unless you guys can find something cheaper, but I mean, honestly, I know it's going to be, it's going to be difficult. You just have to, in order to own a home, sadly, in that area, you just have to make a ton and it may not be feasible in the next couple of years until your income goes up to get something that's worth purchasing. Right. So that you do have to buy a lot of patients in this process. Yeah, which is, which is not funny. What are your careers?

36:55I do marketing for a general contractor here. And I don't know if you're going to like to hear this. No, but she went down to part time now once we got married. And. Because of a child or just. For us. Sorry, say that again. Because of a baby or just because. Just for like life choices and, you know, we're falling into our biblical roles here. And you know, it was just the job that she's in. She's, uh, she worked at it. A tax firm and, you know, tax season gets extensive with overtime. And on top of the, uh, over time she was planning our wedding. And so that got extensive and so her job was able to allow her to go down to part time. Yeah. So make bringing home 50,000 a year in Boston. You're probably not going to be a homeowner doing that. So. So you can't really, you know, have your cake and eat it too, you know, having her work part time and.

37:56Having a realistic expectation of owning a home. So that's, um, that's just, that's the reality. Now if she was making 50, you're making 50, then you're up to, you know, we can. Talk. Then we can, um, or yeah, yeah, like if she brings home 5,000, you're bringing home 5,000. That's 10,000 a month. And I'm like, okay, all right. Let's see if we can get something, you know, in the 3,000. I don't know. And then you have some more money saved and, you know, then it really starts moving the numbers. But what's keeping you in such an expensive area? I mean, it sounds like the nature of your jobs, you could do something like that in a less expensive area where you could. Have, have more of what you're looking for, which is. A wife working part time, you working full time and a home. You know what I'm saying? Yeah, I guess my job is based out of Massachusetts. And so that's the reason why we're staying here. We don't want to stay here long term, but for the short term, it, you know, it makes sense for us to stay here.

38:56But I'm saying the nature of the type of work you're doing, could you do that elsewhere? Obviously you're working in that area now, but could you do that in a, in another area? Yeah, for another employer I could. That's what I'd be thinking about. And I'm not saying that you have to make that move immediately, but I am saying that what Rachel said, which is, we need to sit down and talk you and your wife about our values and what we truly want our life to look like. Not just for the moment, but even long term. And if we start seeing things long term that we can't do where we are today, then we have to start making a plan for what that will look like as we go through life. If we say, gosh, we really want to be homeowners, that's important to us. Well, we might not have to do it this year and next year, but eventually knowing we want that and knowing the kind of trajectory for our income and knowing that we live in Boston. Well, gosh, we need to start thinking about a plan for what that means for us. And if we can't do it in this area, what would be the plan for us to do that in another area? Because it looks like different jobs in different areas.

39:56Well, and I'll throw this out, Colin, not to project on you, but because of your earlier comment, I'm going to assume when you have babies she's not going to work. So that means it will be your income dependent upon when you buy this house and the house is long term. So if you guys are wanting a child in the near future in the next three to four years, you have to do the math then based on your income. And what that's going to be to. So remember that because people get that is a hard place that when people buy a home on two incomes. And then they start a family and one of them wants to stay home with the kids, which is a wonderful thing. But when that happens, then suddenly that income leaves in the lifestyle that you've chosen. Yeah, usually based on two incomes. That's why even doing all of this pretty conservatively gives you gives you more options. And we see that a lot. That's that's a very, very good point that you make Rachel. When you're buying a home, a couple of things to consider. We tend to talk about it from the monetary perspective because it is usually one of the biggest investments you'll make. And we're always saying, hey, 15 year fixed rate mortgage. That's the best way to buy a house.

40:58As far as if you're going to take out alone, of course, we want it to be no more than 25% of your take home pay. We hit on that take home pay just after tax, not after insurance and investing just after tax. But a really smart part of that that Rachel mentioned is you have to think about the long term. And if you can think ahead of time and go in the future, we know we're only going to have one working spouse. Making sure the house that you buy today meets that parameter of one income. And you can run that you can run those numbers and see yeah, or become told because we've had friends like this. We were actually talking about some friends that lived in Nashville. And it was a nicer, you know, price home and one of them ended up saying home. She ended up saying home after they had kids. And they just knew when that happens, we're going to move homes. And we're going to move to a different area. Not only for family, but just also, you know, for the environment, but also to probably get a smaller place. Yes. Because we know we only have one income. So it wasn't a surprise. Yes. So there's like a forethought in this adult-like planning that is, yeah, that's very important.

42:00So we said adult-like planning. It's adult. It's adult. It's adulting. It's adulting. It's adulting, and it's minus. And you know what, Jade? I do. I'm going to throw it out there. Could it? The proverb's 31 woman. She works eagerly in his business-minded too. My daughter. And this is why. You know, I think it's all it all belongs to. So Colin, you guys push hard for the life you want, but be wise when it comes to the money. Here's something that keeps a lot of parents up at night. Kids are growing up with more access to information than ever before in history. But most of the content is calculated to keep them distracted, make them mad, and keep them scrolling. Not help them think for themselves. Worldwatch exists to be the antidote to the algorithms. Worldwatch is a video-new service built specifically for preteens and teens. They're daily 10 minute videos that explain what's happening in the world through a factual Christian worldview. No outrage, no noise, just clear reporting you can watch together, and that your kids can actually understand

43:03so they can come to the dinner table, engaged, and curious instead of worked up or zoned out. And I love that Worldwatch doesn't talk at kids. It gives family something to talk about. Because when my kids are older, I want them to be able to think for themselves and separate news from noise. And right now you can try Worldwatch free for 30 days. Click the link in the description or go to worldwatch.news slash ramsy and use promo code ramsy to get started. The ramsy offer includes your first full month free on top of the standard 7-day trial. That's worldwatch.news slash ramsy. All right, welcome back to the ramsy show here in the fair winds credit union studio. I'm Jade. This is Rachel and we've got Jack who's in Houston, Texas. Hey, Jack, how can we help out today? Hey, thanks for taking my call. I'm worried about asking this question after the finale question.

44:07The finale debacle. Yeah, we're not mad at nice cars. Yes, remember that. Yes. You have a clean slate. Okay, that's great. Well, I specifically wanted to ask you guys this question because I know how tough you guys are about spending money on depreciating assets like cars. But that's exactly the kind of feedback I need before I convince myself that buying this car is a good idea. But I'm just trying to figure out if I can responsibly purchase an $80,000 sports car. It would be a car kind of just for the weekend. And then I would like to keep my current cars as Bayley's. But yeah, how much are they worth the other two? The other so I drive a 2020 the end of the M340i.

45:07I purchased it about three years ago for 50,000 out the door. And then my wife drives a 2020 tough model Y that we got a family deal on. And that was we only spent about 18 grand on that. Okay, nice. Perfect. And then we have a third car that I kind of drive. It was basically my life's old car that ended up keeping because it wasn't really worth that much, but it still worked. So I drive it here and there. Okay. And what's that worth? Anything notable? Maybe like four or five thousand. Okay. Okay. And how much do you guys make a year? So I make about 175 a year and my wife makes about 70,000. So around 245 combined, including four one came actually and average bonus. Okay. So following our parameters, we're kind of of the mind.

46:11Okay. If you're making 245, no more than half of that. So 122 in cars would be kind of where you'd be sitting. Is it fair to say you're about 72 now? 135 135 with this new cars. What I would say probably right? Well, yeah. So I mean, if you go like what I could sell the cars for today. Yeah. Yeah. Yeah. It would be less than that. But yeah. Yeah. That's great. Yeah. I mean, you'll be right at that. Depending on what they're all worth now. Right at that one. 22. I would say. Yeah. A little bit. Yeah. Give or take. It's not going to be anything that we would split hairs over. I don't think. But the question is, do you have the 80,000 saved? And ready to go? Yes. So. I guess. In terms of like cash, no, that I could sell some stock to cover the cost.

47:13So I could buy them cash. And half of the dilemmas. You know, obviously I could use this money on probably something a lot better of an investment. We've been considering seeing a. The raw department in the back of our property. I think that's what I would say. I think that's what I would say. I would say that's what I would say. But that would be around 150 grand. And obviously we'd be able to rent that out. And they would appreciate over time. Is that what the stocks were for initially? Like when you. When you guys have sat and looked at, oh gosh, we have this much money in stocks. Were you thinking, oh, this garage apartment. And then suddenly now here, you're like, well, maybe I can get a sports car. No, yeah, not really. I would have enough to do both, but I. You know, it's more so a matter of like. Here, can I ask you a question, Jack? Okay. If $80,000 disappeared from your accounts,

48:13I don't care where they are stock anything but retirement. I don't care if that's bank accounts. CDs stock. High yield, wherever 80,000 could be. If that just disappeared tomorrow and you looked in your accounts and 80,000 was gone, would you notice like would you feel it or or no? I think. I don't know. I maybe just the way I've been raised. I feel like no matter how much money I had, I would always feel it. Okay. How much do you have in savings on retirement? Non-retirement, including house equity would be. No, not house equity cash. What do you have in savings? Just cash in stock. About one point. One point two. Oh, one point two. And that does not include retirement.

49:13That does not include the time and does not include equity in the home. You're doing something burger. Well, yeah, you shouldn't feel 80,000 out of one point two million. Yeah. Gosh, I thought you were. I should ask this from the beginning. I know both of us. Barry the lead. Yeah. This is what Ken Coleman would have said is a nothing burger. Okay. There's nothing to discuss other than you getting this car and what color? Yes, you can afford this car, Jack. I would like a black one. I guess it's mainly like the dilemma of a could use that for the garage apartment that would generate more income. So here's the thing with money, especially when you get to this point where you are financially. For the rest of your life, there's going to be opportunity costs. Okay. When you get above that idea of like, hey, once you're debt free, you have a fully funded emergency fund. You're funding retirement. And then you actually start putting some money away on the side beyond that 15% of retirement.

50:16Even once the house is paid up, right? Like you start actually generating a lot of savings. Your entire life from then on out will be an opportunity cost. And so here's the thing, you cannot live in that mindset at this point. Now, did not only guy has to live in that mindset because that's where he's at financially. But to the point that you have this amount of money for the rest of your life, it's like, well, we could go on this nice vacation and spend 20 grand. But also, we could invest that and it's going to be this and it doesn't have to be an investment. That's right. So everything will always have that opportunity cost. So you kind of have to get over that. Yes, you are going to spend things for just pure enjoyment. And that it is what it is. So as long as you are giving, you are saving what you obviously are. And you need to be spending some. You need to be living life and enjoying it with some of this hard earned money and not just hoard it. So there is a release that's actually a healthy thing when it comes to a part of spending. So, um, so yep, we are, I'm a green light, Jade.

51:18Yes. And I'm a green light too. And Jack, just note, every time you open the conversation, start with the 1.2 million. When you're calling a financial show, say, I have 1.2 million saved. I'd like to buy an 80,000 dollar car. Yeah, well done. Really, really great. Are you guys completely debt free? You said equity on the home. Is it paid off? Uh, yes. So, I mean, I, I fully am aware that the situation I'm in was I'm very blessed that my family was able to kind of help me get on my feet when I first started my professional jobs out of college. And, uh, and I've just been able to very aggressively save. Well done, Jack. You've done a great, great job. So yeah, you enjoy that sports car. Do some date nights. Yeah, man. Take your wife out. Yeah. Have fun.

52:28Hey, I want to talk to you for a second about love and not love like in Titanic or something. I mean responsible love, the kind of love that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is by having term life insurance. If you have anyone depending on you, a spouse, kids, anyone, you need term life insurance. Term life insurance gives your family real protection if the unthinkable happens so they can spend their time grieving and not worrying about how the bills are going to get paid. Zander is a broker who works for you, shopping the top companies to find the right coverage options for your needs and your budget. In many cases, there are options available with no medical exam and instant approval. My wife and I had term life insurance through Zander for years long before I worked at Ramsey because we trust them. Getting term life insurance is a way of saying, I love you when you can no longer say it yourself.

53:32Go to zander.com or call 1-800-356-4282 to find the coverage that fits your family. All righty back to the phone lines we've got Richard who's in Columbus, Ohio. Hey Richard, how come Rachel and I chip in today? Hello, how are you? Good. What's up? I am struggling with the question. I'm a young entrepreneur. I am currently a junior in college, making my way through. However, I kind of found success in my business early. I started it after I graduated high school. I'm currently making $130,000 a year, same with my business partner as well. Good for you. What are you doing? Yes, so I do affiliate marketing.

54:32Yes. So basically I just promote products and then promote those on social media and then people see those products and they buy it and then I get a small commission. For you. Absolutely. And you're a junior in college doing this. I am. That's amazing. Well done. Well, what are you studying in college? Seems like you got it on my leg. I'm doing business management. Good for you. Good for you. Man, okay, so sorry I interrupted you but I was just curious. What's your question? So my question is, I've been finding it harder and harder as I'm going through each semester of college to kind of stay on top of schoolwork and focus. I don't have any debt with college as my mother works at the university so I get a discount there. 50%. So that's a very big draw to stay in. But I'm also like wanting to focus my efforts on, you know, I have another kind of business I'm wanting to do as well on top of doing this other. I'm just like, would it be worth it to stay like push through school or I guess do school less maybe just an associate's degree.

55:40I only have a car payment that I'm going to have paid off in around nine, nine months so I'm not really I don't have any debt. And I am very good at investing. I've so in the two years I've done this. I have about $51,000 investment portfolio that are not retirement and my retirement account I have about $35,000. Good for you. Roth and how much is your how much do you have in your car? How much do you owe? Yeah, so I just bought a Toyota 4 runner. That was kind of my dream car. I've always wanted it and I've saved up for about six months and I put about half down. So currently I owe $16,000 on that. Okay, let's pay that off. Other than that though, gosh, you're you're really killing it. I'm really, really proud of you. A lot of people. I mean, you're accomplishing so much in just a short period of time. I think the two things that stand out to me was Rachel. Rachel said was let's pay off the car.

56:41I think you did. You could have gone really crazy on this and I think you tried to exercise like some reasonable like reasonability on it and I'm glad that you did that. But I'd like to crank that even more and just say, hey, a guy in your position doesn't need to borrow money. And let's just let that be your lifestyle. My guess is that you built your business without debt and let's just go through life without debt. You make a lot of money. You don't need to be slave to any lender. So that's thing one and I wondered about the degrees. So you get the 50% off because your mom works at the university. The part that I see is how much are you? What's the other 50% that you're paying? Like how much do you have to pay intuition? And I'd be weighing that out with the idea of, okay, realistically, what do I see myself doing? Do I feel like I need this degree? Because you're very entrepreneurial and college is not necessary necessarily a necessity for everyone. In that level of education and that type of education is not necessarily a necessity for everyone.

57:44Yes. Are you do you have two more years left, Richard? I do. So I'm in my junior year just started. I kind of took less credit hours this semester to work a little more. But like I said, I just find it really hard to focus on school. When I'm like, when I plan, when I graduate and get my degree just to go back and work full time for myself, which is, you know, it puts getting a degree hard to do. I'm a paying probably about $4,000 a semester for school. That's with the discount included. Do you feel like you're learning anything or do you feel like you're like, I already know that like I already am doing this. There's some things I learned, but I just not really. I'm kind of sitting in classes falling asleep. Yeah. Okay, I may have a different take. Tell me, I would finish. I think you are because you're how old you're 19. 21. 21. Oh, sorry, 21.

58:44You're 21. You have your entire life. Your entire life to build businesses, make money, get in there. You're already halfway done. If this was your first semester, I might change my mind. You're halfway done. And I'll be honest too. There's a little bit of me because I mean, we play in that world just a little bit. And it's ever changing, right? So what the world looks like with affiliate marketing today, we don't know. Maybe it gets bigger. Maybe AI takes everyone out. I mean, we genuinely, we don't know. And there's something to me, especially when it comes to business management, to have something that it's not that you fall back on your degree by any means. I know a lot of people don't even use their degree. But it's like that extra step that you took. You finished what you started. It's not costing you a ton. It's another year and a half, basically, your halfway through this semester. So what is that? It's $12,000. If you were my kid, and that feels weird saying, because we're only like 15 years difference.

59:47But I would encourage, like if you were my brother, I think I would tell you, finish out college, get your degree, your halfway done. And again, you have your whole life ahead. And the truth is, too, there may not be a ton to learn, but I don't know. There's a value in... There's more to it than that. Yes. You're right. I don't know. So I just think you have your whole life ahead of you to do what you want to do. And there's something about this investing in yourself. A little bit of this just finished what you start, too. M-hm. Mentality. Did you want to go to college, or did you feel like people were pushing you to go because you had the discount? I initially did want to go to college. I was originally going to go into the military, and then that fell through. So then I just decided to go full on to this business, which was very successful. And then college was kind of just a... It was there to just be doing it, because the 50% discount is really nice, especially

1:00:47with commission rates these days. And then my whole family all has college degrees, and they're all pushing me to the youth. I wonder if you would have more pressure. Being a business owner later on and not having your degree if you're halfway through. Yeah, I think 100% Rachel would ride with you on this. If you had said to me, I never wanted to go to college. I feel like I'm just going because I have the discount, and I feel like this or that. But the fact that you set out to do this, and I think I'm with Rachel on the principle of, let's finish what you started, because you did say this is something you wanted to do. I do see the 50% discount and go, hey, it's here today. It might not be here later on if you ever want to finish. And I think in your world, fairly the 12,000 that I think it's going to cost you to finish, the last semester and the last two... You know, the other semester of your junior year and the last two of your senior year, I think that's well within a small percentage of what you're doing, that it's not like this big sacrifice for you to pay it. And so for those reasons... I'm end. For those reasons. What do you think?

1:01:47I mean, does that sit right with you? Or are you like, Deck, gum, and I was really hoping it would be. It's going to be frustrating if you take our advice. So I think you will be sitting in classes and being like, oh my gosh, what am I doing? But I think you'll look back though, when you're 40 years old and having your degree, when you're starting it. It's not just the education. I mean, it's relationships, it's learning to do things that we don't always want to do, but we do it because it's a responsibility. There are so many things that you take away from college that is not the grades. That's right. You know? And not you just sitting in a classroom and learning. I know. And that's like the biggest debate right now. And it continues to be, which is good. I think we need to push on this notion that everyone just has to go to college. I agree. So I am for pushing that notion because it is the conversation these days, figuring out when people start at 18, because some people get into real estate. Yeah. They get their license take up. Some people go to trade school. Yep. I mean, it's just, it looks different for everyone.

1:02:48And to your point with AI, I do think that it's an unknown because it's like, gosh, if I invest this money, will this career field even exist? I know. I thought it was. I don't want to bank on something at 21, even though he's making such good money. So it's easy to be like, oh, this will be my life forever. And it may not be. Like it's just the internet world is the ever changing world. And so we know that well in our jobs. Yep. Yeah. When you take your car to the shop, you're probably thinking two things. How much is this going to cost me? And is it going to get done right?

1:03:49What you need is a mechanic who will give you transparent information so you can make the best decision for your car and your wallet. Christian Brothers Automotive is the official auto repair shop of the Ramsey show because you can trust them to take care of your vehicle the right way. Their digital vehicle inspections let you see exactly what their technicians see giving you confidence on which repairs are urgent and which ones can wait. Plus every repair is backed by their nice difference warranty three years or 36,000 miles with a guarantee like that you can walk away knowing that your car and your wallet are taking care of. Schedule your service today and get 10% off your visit at CBAC.com slash Ramsey or click the link in the description. That's CBAC.com slash Ramsey. 10% off up to a $250 value. See store for details. Well today's question of the day is brought to you by YRIFI.

1:05:01When private student loan payments start getting away from you, it can really feel like you're paying for decisions that you made years ago. YRIFI helps borrowers explore low fixed rate refinancing options and payments that are designed around your current situation. Visit YRIFI.com slash Ramsey and remember it may not be available in all states. Today's question comes from Courtney in Georgia. Up until the last few years, I would get paper statements from my bank and use them to balance our checkbook each month. Now with everything online, I just check our balances daily but don't really balance my checking account. Do any of the Ramsey personalities double check their bank's math or do you just trust that the online numbers are accurate? Oh my gosh, I had like a 15 year old Rachel like Twitch. Because dad made us do that all quick and quick and quick. Yes, I do. Put that CD in your computer and we had our little checkbooks and we had to balance our checkbooks every month as teenagers. And I'm like, it's like trauma to this free spirit.

1:06:04It was like, it was worse. It was so worse. It's a great question though. Of course he had. And Courtney had wicked. Yes, she probably did. Gosh, I don't know why that made me laugh so much. I think because I had the exact same experience and so it was exactly that. I'll tell you what I do for it. I mean, honestly, I do every dollar. I track our transactions in it. So I know I honestly probably know more of what's happening in our budgets. I check that more and then in every dollar our account is linked. So if our account starts to get low like towards the end of the, like because we get most of our commission stuff on the 15th, really low on like the 30th. So we have a full month from 15th to 15th for us. So when it gets to be like the 10th of the month, if you will start to look. Yeah, then I will be like, okay, did we have a big purchase that that it's not been accounted for yet? Because sometimes it won't update till like Tuesday.

1:07:04And if it's been over, but usually it will show up in our banks app. And it's like great. It's a different color. So I'll double check that. If I feel like our balance is getting too low to be like, okay, I want to make sure that we're, you know, on track with this. But that's what I do personally. Honestly, the budget for me is kind of my quote unquote balancing the checkbook. I know it's not against my bank statements, but it's against what we've planned and what we've planned. We know we have the money for it. Does that make sense? Yes. I'm with you. I can say I do not check my bank statement. I have not downloaded a bank statement in quite a while. I do trust that when I see the transaction coming through every dollar. Usually I'm like, yeah, I went to publics for $13.81. Like, yeah, that is true. And then I just track it. And I'm with you. Since I track my transactions, not every single day, let me be honest, but very often, I can start to see if it seems like we're about to go over a budget in an area. And then it's like, if or if we did, I, you know, it'll tell you like if you've already run over.

1:08:06Then, then I'm starting to pay a lot more attention and go, okay, I need to like shift this around or we need to pull back. So I kind of do it like that. And then at the end of when you close out your budget, everything's already tracked because you've been tracking throughout the month. And then the close out is just, hey, did you stick to your amounts or didn't you? Yes. Yes. I think that's kind of, I care mostly about tracking the transactions and the close out and kind of seeing how we did. And are there trends there? Like, are we constantly going over grocery budget? Are we constantly? Yes. I'm not, I'm not, I'm not locked into the statement and making sure the balance is perfectly to the decimal point. I have a friend who's like that though and I'm, whoo, that's too much for me. All more power to you, you know, you know, you got the energy to do. Yeah, but for real, every dollar really is great, you guys in that sense. Because I think we have shifted because of everything online. And this kind of gives you more of a real time, more budget mindset than like a bank statement.

1:09:06Yeah. So check, check, check. It should make it easier that you don't have to do all that. Exactly. Yeah. So if you guys do want to check it out, you can download it for free in the App Store, Google Play, or we'll put a link down below. But check out every dollar if you haven't done a budget because it really will help sync all of that. And you sync all your accounts. That's the other great thing. If I need to look at the balance of our accounts, I click on accounts on every dollar and it has our money. Yeah. It has our high yield savings, our checking. All of that is just right there in every dollar. That's very helpful. And you know, I do want to hit on this because I think about how my budgeting practices were when we were in $460,000 of debt and going through that. And then I think about how our budgeting practices are now that we are not in any debt and life is a lot easier financially. And I do think there's little things that change. Like the principle of budgeting doesn't change. The principle of living on less than you make. The principle of tracking your transactions. It doesn't change, but I do feel like you're not down to the nitty gritty.

1:10:07The tactical change. Synth. Like you were. And I actually, I think this is a great post from LinkedIn because it just goes to show like no matter how well you're doing, no matter if you're making hundreds, hundreds of thousands or hundreds of millions. It's really important. So Logan Ryan, you guys might know that name. He's an NFL player played on lots of NFL teams, but more notably the two Super Bowls with the Patriots. He says he made, this was a LinkedIn post. He says he made close to $80 million in the NFL. And he says, never spent a dollar of his salary. He retired at 33 and lived off of what the market pays him. So he just invested the money and basically lived off of the interest. It sounds like he says most guys who hit that number are broke a few years after their last paycheck. And I know Dave talks about that all the time. And I think he's a pro athlete who makes so much money and then they truly end up bankrupt and broke. 100%. It's just sad. Logan Ryan goes on to say he says, I've watched it happen up close, growing up in New Jersey, two loving parents that worked super hard.

1:11:11But then when he got drafted in 2013, it's like that feeling never left him. And so he just was like, I was suspicious of every dollar I spent. And I lived on a strict budget, lived off what my portfolio paid me. And he still like works with a financial advisor and just asking questions and learning. So it really just goes to show a lot of people think Rachel that if you earn more money, that's the solution to your money problems. But this just goes to show and I can even say from my own experience, if you learn to manage your money when you don't have any, that's how you really know. That's right. And then when you earn more, then you're like, okay, I know how to manage this. It's not going to come later. It comes at whatever point you're at today. That's exactly right. Yeah, the money just magnifies your financial habits and your mindset around money. So if his is a very conservative mindset around money and he's like, I'm going to live over here. And then he starts to make in 10 million, 20 million, right? Yeah. That conservative mindset just continues to expand. It just makes you more of what you are. And that is why it is so crucial, so crucial that we, yes, we talk about the dollars and cents on the show.

1:12:16But also it's the character of who you are during whatever baby step you are. And that's a little bit of that beauty of baby step two, the sacrificial season is so difficult and all of it. But man, when you learn to live without, when you learn to be content, like all of these things are so helpful. Yeah. It's a helpful setup for when you actually start building wealth as your income increases. So I know I do always love this. Logan Ryan Well done. Because the story of this professional athlete, it's to lottery winners and all the above. It's not great because if you don't have great habits, yeah. Again, it's going to be, so if you're not good with money and you win a lot of tickets, just blow more of it. It's just got it. Yeah, you're going to be not good money with a lot of money. Yeah. And I got to believe there's two, I know you talk a lot about this. I got to believe there's a contentment play to this as well. Just knowing how to be content, whether you have a lot or a little in knowing what that boundary is of,

1:13:20I actually, like, this is not going, more of this is not going to make me happier. That's right. It's just, yes. It's available to me, but it's not going to make me happier or, if anything, I can start to become a headache. The more and more stuff you have and you have to maintain, more money, more problems, you know. More money, more problems. I did my version. More. More money, more problems. I'm such a hip hop girl, Jay. You feel it? You feel it? I do feel it. One of my favorite things is when these sides of Rachel come out of my favorites. Like, let Rachel get spicy. But we were talking about this at the break and we think it's so fascinating. I came in, I grabbed a tea on the last break and I walked out, I was like, change, you know what I was thinking about? It's just the last two colors we had with cars, right? You got one guy and cannot afford the nice new truck. No, 90,000 are trying. 90,000 for all. Another guy wants to buy an $80,000 new sports car. The people that actually have the money and can do it are like, should I write these? It's people that can't that are like, I got it. I got it. And I'm like, it's such a fascinating mindset.

1:14:20So, the emotional part of money rises as important as the numbers. Absolutely. Well said. When you're trying to hire, you don't have time to dig through stacks of resumes, hoping someone halfway decent floats to the top. That's the world's least fun game of where's Waldo. What you do need are qualified candidates who won't waste your time because you can be sure they actually want your job, which is why I love the way Zippercruder is helping small business owners right now. Zippercruder has a new feature that finds the kind of people who will go the extra mile for you. Candidates can now tell you why they're interested, may passionate about your role. And Zippercruder Smart Matching Technology automatically puts the most qualified, most interested candidates at the top of your list. So, instead of sorting through a pile of just okay, you're seeing the right people faster.

1:15:24In fact, four out of five employers who post on Zippercruder get a quality candidate within the first day. That's not a coincidence. It's because Zippercruder goes the extra mile for you, just like the candidates you want to hire. Try Zippercruder for free today at zippercruder.com slash ramsy. That's zippercruder.com slash ramsy. Meet your match on Zippercruder. All right, let's go back to the phone lines. We have Micah, who's in Philadelphia, Pennsylvania. Hey Micah, how can Rachel and I contribute today? Hey, thank you guys so much for taking my call. No worries. What's up? I have a question. I'm a state home mom. I worked for five years and then I have a two year old and a one year old. And we want to have more kids someday. And I have a 401k from when I was working.

1:16:24It's kind of pathetic. It's like $15,000. But it was with the company I worked for, got bought out a few times. So I consolidated all of that into one account. But now I just have this account that's in a Raymond James, like, and so my husband. He has a TSP account and he is going to change jobs next year. So he'll be getting, I think, his new company that he's going to work for, has a JP Morgan account. And so we are going to babysat for turning just consolidate and like simplify our life. And I'm just kind of asking, what am I supposed to do with this 401k that's kind of like often like ball all ends? With he's going to grow his, but it is minus going to sit there until I'm 65. Like what am I supposed to do? Didn't you say you already moved it into, did you already move it into an IRA with Raymond James? I, well, it's a half of it is a Roth IRA and the other half is a 401k.

1:17:28Okay. So I would take the 401k and I would roll that into, I would do a direct roll over into an IRA. If it's, and you can do that by, by kind. So if it's a Roth, you can do it into Roth IRA. If it's a traditional, into a traditional IRA. And then with his TSP, when the time comes, I'm not sure if he can roll that over, but if he can, you can do that. But they're all going to be separate. They're not going to go, they're not all going to go into one IRA together. They're going to be individual ones and that's okay. How much, how much is in the 401k? I think it's like seven, that also. Okay. Okay. Guys, I'm, what I'm thinking is because it is such a small amount, rolling it over into maybe a, putting everything into one Roth, which means you will pay taxes on that seven, that's not a lot. But it's not a lot. But it's not a lot. So I almost would just roll it over to that Roth IRA and have one Roth IRA that's sitting there with all 15,000. And again, you will pay some out of pocket taxes to make sure I'll have the cash for that.

1:18:29But for the long term for it to grow, I, I think I would, I would probably focus on that because eventually for a lot of people, you know, making that transfer from traditional to Roth is a good idea. If there's time because you're going to have so much growth, how old are you, Micah? I'm 30. You're 30, okay. So what's crazy is, if you did just leave it in and you didn't touch it, that 15,000, and you didn't add to it at all, for the, in 35 years when you're 65, it'll be almost $700,000. So you say it's like, oh, what a little, you know, a thing and it does. It kind of just feels like, and it's just 15 grand, you know, the potential. But the potential. So honestly, I, I think I would pay taxes on the seven, roll it over to the Roth IRA and just let that thing grow. And I'm mad at that. And yeah, and God, let it turn into $700,000 for retirement. Perfect. Okay.

1:19:29Yeah. And because that's what I was wanting to say, well, if I'm not working in contributing, like, what's the point even? Yeah. It's going to be a step up. Yeah. Compound interest. It's your friend. So yeah, it'll just keep growing and growing. And what, what you said Rachel is so important, you know, we talk about Roth conversions. And a lot of times, especially with larger amounts, it's a baby step seven activity. Because you're right. There is taxes that they're going to be on the hook for when, when tax time comes. Yeah. But with the 15,000, they'll probably cover it. But it is so important to, if you're able to make that transition to Roth, it's so important. Because when you think about how this money is going to grow over time and that's such a good example of it, that $692, let's just say $692,000. Let's just say it was even more than that or it's money that they'll never need to touch and retirement. Yeah. With it being traditional, there is going to be a required minimum distribution. And so when you look ahead at your own retirement planning and you go, gosh, this is not even money.

1:20:29There might be money that you don't even need, but you're required to take a distribution. And then if it's money that you're going to pass on to your errors and you go, gosh, they're going to be required to take that distribution. And they're going to have to then pay the taxes on it. But if you turn around and you're able to convert the majority of your wealth to Roth money, then that money is growing. It's growing tax-free and you're able to pull it out as needed. You don't have the required minimum distribution. And you're not paying taxes on the money when you pull it out. That's right. Because it's already been covered. And so that, to me, is just a huge, it's a huge wealth planning thing that I think people sleep on. They're not really thinking about it. It's something to hold in your head. To noodle. Yes. Because I mean, for her, yeah, it would be about 1,500 in taxes today versus let's just say that 300,000 of it, if it was left in traditional, as she's going to be pulling it out. Yeah, I mean, it would be probably around 100,000 at that point. Yeah.

1:21:29Or 70,000, about 70,000. So 1,500, 70,000. Yeah. And when you think about it, okay, yeah. And then when you roll it back to it, let's just say it's an inherited IRA. That same person, they've got, I think it's 10 years to pull out. And can you imagine having to, like, if you have a substantial amount, you're having to pull out that money at such a high rate to drain it. Yes. Oh, none of that. None of that. Let's be thoughtful people. We love a rough. Yes, we can do a rough. Do it. Yes. All right, let's go to Jordan, who's in Seattle, Washington. Hey, Jordan, how can we help today? Hi. Well, actually, this question is concerning my mother-in-law. She's underweight 85 years old. Blindsided us with a request from her financial advisor, who's advised her to get a reverse mortgage. Oh, boo. It's better. To buy stock. No. Yeah, it is. It's insane. What is he high on?

1:22:29Man. Yeah, I know. That's wild. Even got better. Now we find out. So this is about two weeks ago. We find out that she set up and sent over a mortgage broker to her house who laid out a reverse mortgage, second mortgage. The house is free and clear, but he called it that or an equity line of credit. So for her to put that money into the market to try to make money, does she need money month to month? What's her reason for doing this? Well, yeah, that's when we can't pin down. She's probably, it's close to 2700 a month in her social security. She literally, she has a tiny car payment, owns the house. Yeah, there's a car. So we have been taking out $1,000 a month out of her investment account and tells me she has roughly $35,000 left in that but tells us that she's losing money in that.

1:23:34So we're not sure where all that money is going on a monthly basis. But she's scared. And of course we think if she's if this is that, if they're hurt, the other elderly people who live by themselves and are trying to find out or you know, balance their finances are having this happen to them. It's horrible. Jordan, is she asking for help from you? Is she saying, will you help me and she's telling you all of this? She's telling us so she's asking for help but at the same time. So my wife is her mom. Okay. And her other daughter, everybody's telling her, no, don't do anything. Just stop. We'll figure this out. Of course, offering to you know, she really feels like it. So the house come live with one of us. We it's open to you, but it sounds like now she's leaning towards 150,000.

1:24:34No, or line of credit. Oh man. Is she have sound mind. Would you say from like from an age? Okay. So she's good. She's sharp at 85. She's sharp. It knows what she's doing. Okay. It's just that doesn't strike you a strange that all the people who love her saying, please don't do this. And this one guy is like, do it. And she's saying, okay. Yeah. I'm wondering if you guys can lay out a plan. To show her, hey mom, here, here's what would happen. Yeah. When this goes down the road this way, here's what you need to do. Fire your financial advisor. Let's figure out how we can make $3,500 a month work for now. And if, and if you all, I don't know how, where you guys are from a financial standpoint, Jordan, your wife and, and her sister. But even if you guys have to supplement a couple hundred bucks for a little bit, just to kind of get her feeling secure again. I think that's totally fine. I think that's totally fine. Right, to make her feel good again and confidence, but she needs some more information on the right way to do it.

1:25:36Not just the wrong way. When it comes to your health insurance, one of the biggest mistakes you can make is believing your stuck in a one size fits all plan that costs too much and covers too little. That's why I recommend health trust financial. They're the only Ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you. Whether you've changed jobs, welcome to new baby or had some other life event, health trust financial shops, multiple top rated insurance carriers for you. Then they help you understand your options so you can make a smart decision instead of guessing. I've recommended health trust financial for more than 20 years because they work for you, not the insurance companies, so they offer unbiased advice.

1:26:38Visit healthtrustfinancial.com to connect with an advisor today. That's healthtrustfinancial.com. Welcome back to the Ramsey show here in the Fairwinds Credit Union studio. I'm Jade. This is Rachel. Let's get back to the phone lines. We've got Austin and Raleigh North Carolina. Hey, Austin, how can we help today? Thank you for taking my call. I really appreciate it. Absolutely. I do. My question today is if what I'm not my wife and I can afford for her to get a new job. We're just going to take a pity cut. Okay. To lay it out for us. Why are you thinking about this? Well, my recover reasons. One being the drive. She currently works about an hour away. With the main reason. Yes, with two hours and a half at 19 month old. So he has to run the car two hours a day.

1:27:39Which is not ideal. But the other reason which is kind of driven to call you guys is my wife. She has a bit of a like a hostile work environment. She's not saying there's a bit of quote unquote like clicks going on with the office and she's never been one of those girls. They pretty much kind of like, you know, believe, quote, I'll believe her. And I just I can't. I can't. What kind of job is this? What does she do for work? She's a nurse navigate here. So she works at a hospital. And so she works with all other nurses and like you know, he's in that kind of thing. Okay. Okay. Is there a hospital near you guys that's not an hour away that she would go get a different job or what is she thinking? Yes, but the problem is where she works at now. She makes. I mean, she would have to talk about a $20,000 pay cut to move closer to where we live.

1:28:42Okay. What's the full salary? So she go from what to what? So she makes right out of a hundred right now. So she would probably go anywhere from 75 to 85 range. Okay. And depending on the job, where are you guys out financially? Do you have a lot of debt? Do you have savings? Kind of. We have we have about 75,000 in consumer debt. Which is primarily my fault. Actually, actually, it's all my fault. What was it? Gambling student loans. What'd you do? Well, student loans. I have about 19,000 student loans and about 56 on my truck. Okay. Wait a second. Well, this might be an easily solved predicament if we really want to start talking about the debt. I do think it's okay. I think for the commute alone, honestly, the two hours every day and with the two month old,

1:29:46when you said she has to drive that with the two month old, are you saying that the daycare is near her job or like what? Yeah. Oh, wow. So she drives. Okay. Yeah. That is. It's a lot for that alone. I might consider. I would definitely consider finding a job closer. My bigger question is, are we assuming that it has to be a long term pay cut or is there a way for her to work back up to that same salary in a living closer working closer? I mean, maybe in the future. It's just difficult to see. Her job. She actually loves her actual job and her boss loves her. The doctors love her. But it's just the other employees doesn't make it invisible. She's going to cry today. And I'm. Yeah. Totally. No way to the right. So you guys will be short. Probably what? 1500 a month ish with this change. Up to where it comes out. So, I mean, we have we have the 1500 in margin. We together, we bring in about two, 10 salary and then I have like a side hustle. I do. I make about 30,000.

1:30:52That's a good month out of the year. Nice. Okay. So you can handle the hit to your budget. Um, does this affect. But I mean, decrease. Yeah. Right. Yeah. But also you're not factoring in if she gets a raise. If you get a raise. Uh, if you guys make some big moves, like, you know, maybe sell them the trucks and some cheaper. You can finagle this. And it kind of be like, Hey, if we're making this decision over here, that means we're going to have to make these decisions over here. Um, it's kind of that trade off, but it's a, but it's worth it. It's worth the trade off. Yeah. Um, for my trip, you'll think I should sell my truck. How much did you get for it? Let me, okay. I can't about 10 grand upside down in it. And I also drive an hour each day to my down. So, um, I think I think I'd be looking at how quickly you can pay it off. Like if you can get this done, if you guys can buckle down and buy it.

1:31:52And you guys can buckle down and be like, man, we're not going to this, this truck out. And technically the student loans should be first. But if you look at the 56,000 alone and you're like, man, we can, we can knock this out in the next 18 months. And if we add the student loans to it, like two years or less, I might say you could keep it. It's not more than half of you guys income together. I'm guessing with your wife's vehicle. So on that parameter. And if you can do it two years or less, I feel like you have the ability to keep it. So, what's to do with you guys's values and how quickly you want to be debt free? Could you all pay off? I mean, how much money could you put with her new salary towards debt? Like 3000, 4000, 2000 a month? I'm not right now. We put about three or four, like three or four thousand. So we, uh, when we got our emergency fund and. Yeah, so we can probably knock it down. Like you said, really? 15 hundred. So we probably do this $2500 range. Are you investing?

1:32:54Yeah, so I put it so I'll look at the government. I put my TST match. I put 5%, she gets 5%. Okay. But into our, you know, sorry for the case, but besides that, I mean, I've got my $7,000 and I say even the count. Okay. So let's roll this back. Let's roll this back, Austin, because I think that if we can lay this out for you in a way that makes sense, uh, it'll help you kind of change some of the things that you guys are doing, how you handle your money. Because investing usually is a very good thing, but there's a good, better, best way to do it. And there's a time to do it that makes more sense. Uh, having the $7,000 savings, I love savings, but again, good, better, best. And so I think the best way for you guys to tackle your financial goals here is to work our baby steps in order. It's the same plan that I used to pay off debt with my husband. We've all done it. It works, it works wonders. All right.

1:33:55So what I would do in your situation is I would temporarily pause investing. You guys are putting aside 10% of your $210,000 income. That's a lot of money. And if you can imagine that money back in your monthly checks, well now all of a sudden you have the full power of your income to pay off this debt really, really quickly. Because the debt itself is not, it's not an overtaking amount of what you guys bring home. So if you have all your income, you can tackle that super fast. So I would temporarily pause investing. I would knock that savings down to $1,000. You just need a little buffer there because once you throw that $6,000 debt at the $19,000 student loan, gosh, now there's like $12,000 left with your income, that $12,000 student loan should be gone in three months. Just gone. And if you tighten the straps, it should be gone in like two months, like really get after it. And then after that, it's like, all right, let's now we can think about this truck. Get the truck paid off in 14, 18 months. You might decide maybe you do want to sell it. That's totally up to you either way, but that intensity is going to be what drives you guys's decisions.

1:34:59And then from there on Austin, we're saving up three to six months of expenses. So you have a cushion under you and you're never in this type of situation. Again, where it's like, can we do these things? Do we feel secure? And then from there on, yeah, turn investing back on and go be wealthy. And I would have our chains jobs. Yes, for the 100% and then also the toxic environment. Yep, I would take $1,200 out of my paycheck for that piece of mind. Whether you're a small business owner or an individual, doing your taxes is not fun. It's like an algebra test where if you get anything wrong, the IRS can make you pay with actual money. But if you work with a Ramsey trusted tax pro, you don't have to be a tax whiz because they are. They know taxes like the back of their hand, which makes filing super easy. So work with a Ramsey trusted tax pro and get back to doing what you love, which probably isn't taxes. Visit Ramsey Solutions dot com slash tax pro and fill out the referral form to get connected to a Ramsey trusted tax pro today.

1:36:18All right, we've got Mary who's in Houston, Texas up next. Hey, Mary, how can Rachel and I help today? Hi, guys. I'm 54. I'm retired Navy with 100% disability. And my husband is 57 and he's on SSDI. We are debt free. We own our own home, but it needs major repairs, which we plan to cash flow. We have 300,000 in the bank and we have two investment properties. One that we actually live in because that's how bad our primary home is. And one that my parents live in. My real question though is, do we, since we have a steady income for the rest of our lives? Do we need an IRA? Because we don't have, I don't have any kind of investments currently other than our investment properties.

1:37:20What is the $300,000 in? It's in high yield. Okay. You know, honestly, what I would probably do, Mary, is sit down with a smart investor pro and just run the numbers because that 300,000 because you guys still are relatively young. And if you just put that 300, do you guys contribute to that every month? No, what? So really, this all just happened in the last three months for us. Okay. We actually sold another piece of property and we got debt free, got the money in the bank. And now we're, okay, what do we do now? We have this steady income for the rest of our lives. What is the income? What is between the disability and the SSDI? What is it equal to every month? A little over 11,000. Oh, wow. That's great. So what I would probably do, Mary, again, if you want to sit down with an investment professional and like really look at this in detail, I probably would encourage you to at least get a meeting and talk about it.

1:38:22But if you just stick that $300,000 in the market and you just did, you know, a mutual fund and index fund, anything similar to that. And 10 years, that's going to end up being almost $900,000 in just 10 years without adding. And that's not a high yield savings. Remember, that is actually putting money in. So I would probably throw that in an index fund. Yeah. And you can do that Vanguard. I mean, anything. Maybe keep some of it in a high yield for an emergency fund. But it sounds like what you guys are bringing in and come wise is what you're living off of, which is great. Have some some more cash available still for an emergency. But then also, I now I'm remembering sorry, you said that the house needs major repairs. Are you guys wanting to just sell that house and live where you guys are in the rental or what are you wanting to do? No, we want to fix it. My father and law bill our primary home. So we want to fix it. What's it cost to do the repairs? It will probably cost us a little over 100,000. But it's worth twice that at least.

1:39:30Okay. And we plan to cash flow it, you know, and stay in this house. I mean, if it takes me five years to fix my other house, then it takes me five years to fix my other house. All three houses are paid off. No, the my investment, the one I live in actually has a 15 year mortgage. How much? How much is my mortgage payment? It's 3000. How much is the total amount of the loan? Oh, the total amount is loan is 350 and it's worth and it's worth 475. What about the one that your parents live in? The one my parents live and also have a mortgage on it that they pay. It's literally just. But it's but it's in your name. So how much is the total loan there? Total loan there is 72 and it's worth 129. Okay. And then finally, you guys is personal residents.

1:40:32We own it out, right? Okay. So that one's paid off. Yes. And it's worth 250. Yeah. I think even more reason to invest that money like Rachel said, because you guys are carrying some risk with these properties. Specifically, the rental one and obviously the parents went to. I would just like having that money there. I would like it growing because if you want to reach over at some point and pay them off because of the growth, you would have the ability to do that. So for that would be my number one reason of like, yes, we have to make sure that there's money that's growing for us because we are carrying a level of risk in our life. So I think that's a really good question. Okay. How do you plan on doing so the repairs? It's all going to be cash flowed from your 11,000 dollar income or are you planning on taking out something out of that 300,000? If I needed to take out of the 300, I would, but currently I don't plan to. I plan to cash flowed out of our money income. Yeah. I like that idea. Well, thank you so much for the question. That's a good one. Next up, we have Olivia in New York City. Hey, Olivia, how can Rachel and I help today?

1:41:35Why? So I'm engaged and we're currently negotiating our prenup. And there's a very large financial disparity between us. So his disclose net worth is over 100 million. And it's primarily from a business that he built before we met. I, you know, I absolutely want him to protect what he built before me. And I'm not asking for like ownership of any of those assets, but basically in the prenup, it's stating that like everything that. All of his current income and, you know, after we get married, everything is going to remain separate. So yeah, so I'm trying to figure out like if let's say we're married for 10, 20, 30 years, like the vast majority of his wealth accumulated during that time is going to continue to remain entirely in his name. Have you asked about making it to where it's the stop is when you guys get married. So everything he had before the marriage remains his and then what you build together.

1:42:38It has a fair 50 50 split or whatever is so that you're protecting yourself in case something happens. Have you said that to him? Yeah, he does not want to do that. Because he makes, yeah, he's making around 12 million a year. So he feels like, you know, I'm coming into this marriage like you're ready built all this before me. So yeah, he doesn't want to do a 50 50. Because he wants to do any person because he want to do any percentage of what you guys. What happens once you say I do whether he earns more or even 20% yeah because what happens Olivia and I think you feel this because we've gotten this call where. Yeah, dude leaves. There was a pre-nut in place and now she has no assets. No, no savings because she didn't work because he provided a great life. And now she has nothing to her name and so that that's where the pre-nut ends up hurting women right in that in that position.

1:43:42So exactly that's what I'm scared of how long have you all been dating? We've been dating a year. Okay, and we're engaged. Yeah, we're getting married in two months. How much of a deal breaker if you can't get this locked in in a way that you feel protected as well. Have you decided where your go no go line is on this wedding? Yeah, I think like, you know, I want him to kind of like meet me not even like halfway but like kind of like say like okay, like I'll give you this or that just to feel like you're financially secure if we. We'll end up not working out down the line. Yeah, even 10, I mean, even 10% right is 1.2 a year right like from his income. Do you have a lawyer? Do you have one? Yes, yes, I have a lawyer. She told me not to sign it. She said that he needs to come up with something that like we need to come up with basically something that would resonate with him right now.

1:44:50Like he's basically saying he would give 30,000 a year to like he would put 30,000 a year into a brokerage account for me. And then the other thing that he was offering was 10% of the future of the appreciation of the future family residents, which the lawyer felt was unfair as well. I think that's unfair too. Just the appreciation of the fees. Yeah, I'm sorry that's happening. Yeah, and I wish we could give you a thing. Yeah, I'll tell you what he basically where he's coming from is that he said if we divorce like the child support will be so much that you won't need any more money. Like he's he basically said it would be a half a million. I just think that he's setting a lot of the terms and it sounds like he's doing the majority of the talking. And I understand it. It's his money and go ahead. Ultimately, it feels like you're not taking we're not even married yet. And I feel like you're not taking care of me.

1:45:51Yeah. If something bad were to happen. And if that's how he's feeling before the marriage, I would go slow. Olivia push on it. Olivia go slow. Hey guys, Rachel Cruz here and I am so excited to tell you that the brand new 2027 Ramsey goal planner is available now. This is the only planner with exclusive monthly content from John Deloney Jade Warshaw and me to help you set clear goals and actually stick to them all year. But here's the thing. These sell out every single year. So don't wait. Order your new 2027 Ramsey goal planner for 49 97 at Ramsey Solutions dot com slash store. That's Ramsey solutions dot com slash store. Hey, if you love the Ramsey show, make sure you're letting us know what you think in the comments. And by the way, if you watch the show regularly on YouTube and you've never subscribed or you've never followed us or you've never, you know,

1:47:09you're going to have a little plus button on the podcast. Please do all that that helps all of us. And if there's an episode that you particularly like, make sure that you're sending it to someone who you think could need it or could use it or could benefit from it. That is something that benefits not only us, but it benefits the people around you as well. And it cost you nothing. By the way, I don't know if you guys knew this but Ramsey solutions is taking over an entire cruise ship here coming up in a little while March 14 through 21st 2027. Join us for the live like no one else cruise Rachel is going to be seven nights in the Western Caribbean. Do you say Caribbean or Caribbean Caribbean? Caribbean. Okay. What are you Caribbean? I got to go with Billy Ocean. He said Caribbean Queen Caribbean Queen. Oh, you know what? I don't know. You're a cruiser back in your day back in the day. She was a time girl. Sing along cruise lines. Miss Jade Warsaw. A wonderful voice, little Whitney Houston action. That's right. So good. You never know what could happen. I mean, we're all going to be on this cruise doing a thing. I said karaoke with Jade. Get ready. All you know, when I do karaoke, it's fun to do like songs like the worst songs ever.

1:48:13I get knocked down. Right. It's like stupid songs. But anyway, we're going to have a good time. We do have a good time on this cruise ship. It's more than a vacation though. I feel like it is like an immersive Ramsey experience. I mean, obviously all the personalities are going to be there. Dave's going to be there. But we've got new teachings this year. So come for those. The world's largest debt free screen. We're going to have live tapings of your favorite shows smart money happy hour. The Ramsey show all of that and so much more. So here's a thing. You need to have paid off your debt. If you've paid off your debt, everything but the house, if you're on baby step four, this is this is your deal. This is for you. Okay. All the inclusive pricing starts at $2,105 per passenger. I got to say that's not too shabby. That's pretty good. It means all your cabin, your cabin, your food, entertainment taxes, tips, everything included. Yes. Not bad. Well, and let me just say this. The ship is really nice. It really is because I genuinely I'm like, I going on a nice vacation. Y'all know me. I love I love a bougie hotel. I like. But I'm like, they have a they have a good sushi restaurant.

1:49:14Home in America. Yes. Take restaurant. Great bars. We're sipping martinis. Haven't happy hour people going to get in good food. Like that's my that is my favorite type of vacation. So fun. I agree. And it is it's it's classy. It's beautiful. Like it is a great. It's a great spot and great memories. We grew up cruising. Mom and dad love a cruise. They may or may not be on one right now. Are they over another and on the other side of the world. Yes. Mom and dad they love they do love a cruise. Yeah. And we grew up doing them in the memories that you have. Like even as a family like bring your kids like it. There is such a great experience. So it's very special. Yeah. Please join us. Be our guest. Actually, don't be our guest. Pay your own money and come with us on the cruise. Click the link in the show notes or go to Ramsey Solutions dot com slash events to book your cabin today. And celebrate. Yes. All right. George is in Tulsa, Oklahoma. Hey, George. What's going on in your world. Hello, Jay. Hello, Rachel. If you guys are having a great day, I think we're taking my call.

1:50:17So we're a completely debt free, including the house and have a fully funded and emergency fund and currently have 500,000 and a brokerage account invested in index fund. So we're going to have a free call. Yes. And 650 in retirement. We are thinking about building our dream home and using the 500 K toward it. But I'm not sure if this is a wide financial decision or just a large luxury purchase. Okay. So the 500,000. Do you guys have a separate fund for like an emergency fund, right? Yes. 500,000. Would you have to use the equity in your current home to help with that process? Or would you just take this 500,000? What would you do? That's a great question. We would probably need to most likely sell this house because the house that we're thinking of building it around 650. Okay. Okay. That's great. How much equity do you have in your current home? About 350, about 350. Okay. Awesome. Yeah. So I mean, you could do this a couple of ways. George. I mean, you could.

1:51:28Because we're okay. The mortgage is the one thing that we say, you know, we're not going to yell at you for now. Being on baby step seven. If Dave was sitting here today, he'd be like, no, you got to figure out how to go back. It's hard to go back. So you could, I can tell you what day, what dad would say he would say sell your home now, go rent for a year. Take that equity, take your cash. Don't even take out a construction loan. You just literally cash for the build and move in. That's probably where I would lean, honestly, just so you don't have to worry about it. But if you did decide, hey, we are going to take out a small loan to cover that difference. Get into the house. Maybe with again, move that construction loan over to just a conventional loan after you move in, sell your house then and then pay off that loan with the equity of the home. You could do it in that order to see you don't have to move twice. Yeah. That's the other part and I love that. And because we don't want to mortgage my wife does want to mortgage. Okay. Yeah. So we're meeting more towards that.

1:52:29The other idea we had was maybe just wait like so we own our business and we've been doing really good and that's where the 500 come has been coming from. We just put away our profits. So maybe in another year and a half, we should have the six to six. So good. Yeah. That's great. They maybe just take a beat and so you don't have to rush because I'll tell you George, we were in this position a few years ago. I'm not sure if the Russians have prices are going up. Yeah, they are. That's true. But just in a year. It'll be like, yeah, it'll be, yeah, maybe one, two percent. You'll see up. But that's. I think it may be worth it just to wait because my husband, I did this exact same thing and we waited. We had we had, we had saved for a long time and we did our build with cash. And I'll tell you, when you have that mindset going into these meetings, because it is fun. Like if you're able to build what you want, like it's, that's a dream for a lot of people, right? And it is so fun because you get to pick everything. You get to, you know, do the architecture and figure it out.

1:53:30But it forced us, forced us to stay in a budget. And there's things still. There's one thing we did not do because we literally didn't have the money for it. And we, it was a bother you to do this. Yeah, we went thing. One thing. We got to tell it. Okay, we could have had like a half basement and dug it out and it could have been unfinished. Oh, and it was like an extra like, I don't know. Yeah, I feel like I have four hundred or a couple hundred. Listen to me, couple 10. Yeah. It would have been a little bit more. It was. And we just literally did not have the money for it. And we were like, that's the one thing we kick ourselves for. We're like, man. But I'm saying of us to say, George, it is, it's a great exercise. And you go in on move day and you're, it's, that would be an insane thing to do for you guys to move in and not have a mortgage on a beautiful home that you guys have built for your family. And it's awesome. So whether you wait a year or if your wife is like, nope, we're not taking on a mortgage, which I applaud her for. That is kind of our MO here. Yeah, and you guys want to do it faster.

1:54:30Just move for a year, put some stuff in storage and a year flies. It goes so fast. So either way, either way, I think you're going to be fine. Thank you so much for your call. I appreciate everything you guys do. Yep, absolutely George. That's great. Thanks so much. Because after all of that, they're still going to have about around 200 left after the cell of the other home. They've done really, really, really well. But I think that is worth noting baby seven, baby step seven to be there. Have a paid off mortgage and then go back to a mortgage. That's got to feel like, like, besting. Yes. It's, it's within the bounds, I guess, of what we teach, but you know, I think that it would probably be a full deal. Yeah, we've known some people that have done that. And they just pay, and they pay it off quick. Like they're like really aggressive with it, right? To pay it off. But yeah, you probably, well, yeah, you're back in it and not always fine. But for the home, a home is the one kind of caveat to this whole no debt thing. Because it is such a large part of people's world. Yeah. But in there, especially in their situation, it's like if they did what you said, which like, hey, let's take a little of this, that we were not moving twice.

1:55:37Yeah. And then we can quickly pay off that loan once we sell the house. Yes. I mean, yeah, it's totally. Yes. We're splitting. And I'll say this George is from this is this is what we experienced too. I remember for a few years that we were so we were real estate heavy because we took almost all you know, to me, and you feel that we're I like being in the I like having money in the market liquidity. So that even forced us for a couple of years after there was probably about three or four years that we had aggressive goals to get money back into investments into like, I'll incident. Yes, because I don't like being super heavy one or the other. Yeah. So there's something about that to to remember when you make this move, but you'll be okay. You guys are you show a lot of diligence. George. So that's exciting. That's a that's a fun thing to do. Well done.

1:56:38You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person. That's why we created the live like no one else crews for seven days. We're vacationing with you and 25 hundred Ramsey people in the Western Caribbean with live shows us new content us and more. If you're on baby step four or beyond, come spend the week with us next March. Choose your cabinet Ramsey solutions dot com slash events or click the link in the show notes. All right, our Ramsey show scripture and quote of the day Isaiah 45 to says, I'll go before you and we'll level the mountains. I will break down gates of bronze and cut through bars of iron.

1:57:47James Clear said your success depends on the risks you take your survival depends on the risks you avoid. That's good. That's good. All right, Kathleen's in Montgomery, Alabama. Hey, Kathy. What's up in your world? Hi, how are you today doing good? How can we help? I received a well, give you a little bit of background. I'm 66 and started working full time the past year. Due to a crappy situation financially. Sorry. Anyway, yes, it happens, but anyway, with that being said, I've received a nice nasty letter from Social Security stating they overpaid me. And they're going to take half of my payment until starting in October till April of 27, which is seven months. And would that being said, I was advised through my church to ask for an SSA 632 because this is left right now less than 2000.

1:58:54And my fear is I can't get anyone's security. My is to send me the letter because I can't get on the website because I changed my phone number due to my ex. And I can't get into the website. So requesting the letter, I've requested it for two weeks now and twice in two weeks and have yet to receive that letter to make the accommodations for me not to pay this back is getting a waiver. My fear is next year, I'm going to get the same letter, but it's going to be more as me paying back. Why are you fearful of that? Well, a retirement age I was told would be officially 67 and I'm receiving my Social Security to help pay I bought a house to help pay that that's what I'm using for my house payment.

1:59:55And my other is basically surviving with moving into this new home, I had to unfortunately use a credit card that I'm now just snowballing and which is recent that I started snowballing this. And I of course put it away, don't spend it, you know, just and snowball the heck out of it. In other words, I could pay weekly and they get a weekly amount. So I need to snowball this. So going back to the overpayment of the Social Security, you're saying you can't log in to fill out the waiver or to fill out the form to say, hey, like give me this money back or don't take this money because you can't, because you can't log in. And I'm confused about that part. Is there a way that you can just print it off and send it in? No, unfortunately, I don't have access to a printer unless, well, I guess I can get it out to you. Well, I didn't even think of that. Thank you.

2:00:55Yes, man. If I didn't think to get the waiver, yeah, you needed a problem is I can't get into the website itself. It's stating that I wrote a phone number correct. It's stating that it has an old phone number. They need to send me, you know, text or something. Oh, for verification. It's probably what they're asking you. Thank you. Yes. Yes. Well, you know, I would call. Is there a number to call? I did call and I stated that I needed the waiver. What is it? Document sent to me. And I did this on October of the, oh gosh, excuse me, I'm sorry, September. This, this past Monday and then the Monday prior to that. So I would go down to the office and just have them create a new account for you, Kathy, with a new log in. That's all you need. But you can also, you can just download the form I just did.

2:01:55And you can fill it out and you can either upload it on the site or you can mail it in. Okay. Okay. Well, they stated that I could, I could print it out. But it's just getting in there to verify, you know, I don't know where to go to do that other than they're telling me, oh, you know, you've got, you already have an account. And it's associated with a phone number and I, the phone number shouldn't be the thing that's holding you back. I mean, you have your social security number and all your information for your identity. Yeah. So fill out this form online. Jade has it. As long as you have your social security number and the claim number that's attached to all this, I would go ahead, I would at least start. I would go ahead, fill it out, mail it in and then see what they say after that. Because if you have all the correct, and maybe go the extra mile, if you need to like have some form of identity that proves that that's your name and number. I don't know, maybe sometimes people want to see like government ideas. Yeah, government idea or just like some trade lines that prove that this is you, you could do that.

2:02:55But don't let that one thing stop you from doing this because it's a big deal for you. Yeah, yeah, it is. Yeah, because financially it would devastate me. Yeah, I can't afford it. Yeah, so yeah, so, and are you able to qualify for this? Is that what someone was telling you? I'm thinking that I can because it would create a financial hardship on me. Right. Taking that much money out of my account for security, it would devastate me not being able to pay my health savings. Okay. So yeah, and it generally applies if you agree that there wasn't overpayment, but if it wasn't your fault. And if you can prove that it would create a financial hardship, that's usually what they're looking for. They're going to want to know why it wasn't your fault. They're going to want to know your household income, your monthly expenses, your assets, and why it would be financially difficult for you. So I think that you have a pretty clear case on that. Okay. And so 100% move forward. Okay. Well, I, my next thing was I'm looking on this paperwork and it gave me a local number to make an appointment with them.

2:04:03It's great. And hopefully I can do that on my off day or my delayed day going in. Yes, for sure. Yes. Yeah. I think I'm on the right track financially. It's just this kind of. Yeah. Yeah. I mean, it's just frustrating. It's a bump in the road and having to deal with the government, which is always a trip. It's like going to DMV sometime. Yeah. Absolutely. Oh my gosh. So yeah, it'll take some effort, Kathy, on your end, but that effort is very much worth it for your situation. So don't give up. Yeah. And what the, with the government, you do, you have to be careful because in many ways it's hard. Like if you call them on the line, you're never getting through. Yeah. And they don't ever call you that's like they only contact you through the mail. So it can be like really, really frustrating, and especially when you're dealing with like your livelihood, which is your social security in her case, a major, it sounds like the major only part of her income. So it's a really big deal, but keep fighting, keep doing it. Let's go to some social questions, Rachel, because these are some of my favorites.

2:05:06All right. Where are they right in front of me? All right. So I think you're a contractor, right? Yep. With something like that, like the situation like that. So no, you will be paying taxes. So for sure, be putting money aside. It's actually one, one of the biggest problems we find with people when they are doing a side hustle, then they're like at 1099, and they don't put taxes aside, and the IRS bill comes. And they're like, show them. And then you got to move that to the front because that's basically adding to the debt. So yes, be putting some of that money aside.

2:06:06I love that. Okay, that's a good one. Jeff says, from Facebook, he says, we're just starting the baby steps, and I have a question about baby step one. Do we save $2,000 since the Emergency Fund has to cover both me and my wife? That's a new one for me. Or is it a $1,000 total for both of us? Yes. Well, we get a lot of people that are not always happy with this one baby step. But listen, the point of the $1,000 baby step is to get something really quickly in the bank. And for a lot of people, they don't even have a $1,000. So for some people listening, getting that is a big deal. And then that's just supposed to cover the ankle bite. Or like the things that just come up, and you're like, oh crap, I forgot about that. But if something really big does come up, and let's say you're throwing $2,000, $3,000 a month of debt, if something big comes up, pause the debt snowball, that money that was going to debt, pile that up, fix the big emergency for a month or two, and then get back on it. So it's supposed to only be there for a short amount of time. But yes, that $1,000 says Keith. Well, thank you so much for hanging out with us today.

2:07:07Thank you for everybody in the booth for making this show happen. And remember, there's ultimately only one way to financial piece, and that's to walk daily with the Prince of Peace, Christ Jesus.