Debt Won’t Fix What Discipline Can

21:13Manage your workday challenges or any challenges with BetterHelp. Visit BetterHelp.com slash Ramsey to get 10 % off your first month. That's betterhelp.com slash Ramsey.

21:50We do every week of the month and they're all hosted by one of the Ramsey personalities. Matter of fact, Rachel, you did one today. Just did one before the show. That's right. I did one yesterday. George is doing them. We're all into it. And we show you how to stick to your budget. And here's the most important part. We show you in real time how to find$9 ,000 of margin using every dollar so that you can get ahead of debt and start building wealth. I know I just said a lot, but trust me, you can ask us anything during the Q &A live. and if you're interested in that you can sign up for it right now for free at ramsey solutions.com slash webinar very very good all right let's go to eric he is local nashville tennessee hey eric hey guys thank you for thank you so much for having us yeah you're you want us is there someone else on the line oh my wife's nearby oh hi eric's wife everything y 'all do so i love it

22:45Rachel Cruze:Tell her we said hi. How can we help today? They say hi. Super quick question. So we are planning an international trip next year. We are committed to all of the things that y 'all teach. This includes not having credit cards, period. So we are going to do that. No credit cards for that trip. Now, the thing that our trip advisor person is giving us is they're coming back to us saying, hey, well, what happens if you go there with just a debit card and your debit card gets hacked? That's the particular fear they're throwing at us. And I'm just curious, you know, mechanically, what would you all recommend?

23:30Again, we are not going with the credit card, so we're not even touching that. But what would you all recommend if the fear they're throwing at us is what happens if it gets hacked? Well, I mean, I can say... With our kids, we're bringing a couple sons with us. Yeah, yeah, yeah. I mean, what we're solving for, I mean, the basis of what we're solving for is if something should happen, you need money. That's really what they're saying, right? Is if somebody steals all your money here, you need to have money elsewhere in order to cover it in the meantime. And so that's all it is. So if you say, hey, I'm not using credit cards, I'm just going to have a pile of money in my account.

24:06and I know if something should happen with my debit card, and I'll get to this in a minute, let's just say something happens and it takes 24 hours for that money to come back and be replaced, then I have an emergency fund and I have some savings that I also can have access to. And that's all I need.

24:26Rachel Cruze:Yeah, because what other accounts do you guys have besides your checking? Oh, what accounts do we have? Checking, do we have the savings? We have savings. We have a couple things. Okay. So like we have a high yield savings account with Fairwinds and we have a Fairwinds debit card with that account. So I would have, you know, that's, you know, you would have one or two, three different accounts that you can use a different debit card for. Yes, exactly. If you're worried about that. Which I guess is fair. Yeah. But I would give your bank a heads up because we ran into an issue. It was in Florida.

25:03Rachel Cruze:It wasn't even international. And the bank, like, it was like this whole, like, limit thing. It was this whole thing. And we hadn't told the bank. And so our car did. It took us, like, 45 minutes to get on the phone with the bank and figure it all out, which was annoying. It's super annoying. But it's for your protection. They're like, hey, somebody's spending a lot of money in another area that's not typical for you. So, yeah, they throw the flag on that. So, just, I would contact your bank. And then, Eric, the other thing to look out for, it depends on your bank and account. but we do get dings sometimes with international fees.

25:35Rachel Cruze:So like if you swipe it with certain merchants or whatever, you know, I know when we travel, we've like to Mexico or something, we've like come back into the EveryDollar app and it's like$2.99. That's right, that's right. You know what I mean? Like a fee randomly. So just be aware of that. That's the other thing to think about. Yes, they do. They get you. I think the other part of this question that he wasn't saying, but I do think that a lot of people think, Rachel, is that debit cards don't have the same protections as a credit card. So let's say you have fraud on your account. The big fear is that, oh my gosh, if you have fraud, then a credit card company is going to give you the money back instantly.

26:10But the truth is, a debit card company will give you, if it's a debit card, you'll get the money back instantly as well. And you can check the fine print if you look at your Visa debit card. It does have the same protections. But you do need to report it within, I think it's 48 hours or 24 hours. You have to report it. and I can tell you I have never had um a problem with that it's always been I call and I say hey this looks like fraud and they say okay and they'll they'll give you the money back and ask

26:41Rachel Cruze:questions later yes so well and honestly too to your point about the protection the way banks work today I feel like at least our bank they are way more on top of it than they were five years ago I feel like I get texts a lot of like say why did this transaction sometimes they're scams so you You got to make sure it's your actual bank. But our bank, I don't know. I feel like they do a really good job at it. But they do. Very good question. All right. Another local call. We've got Annette in Nashville, Tennessee. What's up, Annette? How can we help? Hi. Hello, Annette. What's up? How can we help?

27:14Rachel Cruze:Oh, I'm so sorry. I didn't hear you say that. Oh, you're great. You're great. My husband was injured at work, and he received a$100 ,000 cash wealth settlement. and it was through Workman's Comp and we had to take the company anyways. We had to file bankruptcy because they wouldn't pay. Workman's Comp wouldn't pay. So we did have to go to court and we were successful. Now, my question to you is, do we take that$400 ,000 and take it to the bankruptcy court and pay off as much as we can, take half and put the other half in the bank and start saving for our future? What would your recommendation be?

27:55Rachel Cruze:How much is left? I have$150 ,000. Okay, left to pay. Yes. Okay. And we have to pay the most back because we have$250 ,000 equity in our home. We bought it cheap and fixed it up, and then it skyrocketed. And so we're paying back everything. But right now we're paying$1 ,400 to$1 ,500 a week. so everything that my husband makes goes straight to bankruptcy every week oh gosh yes I would I would catch up on this immediately so yeah I would throw it there because you want all this you want all of this cleaned up Annette to be able then to move forward and think about the future like what you're saying when you try to do 18 different things you're not going to solve for peace doing that because you're still going to have this bankruptcy looming so as soon as you can get that in the rear view mirror as soon as possible the better off this is going to be.

28:53Rachel Cruze:So you take the full amount and put it on there. Yes, I would. Yeah, for sure. Are you working too, Annette? I am working, but at the time that he got injured, I had just opened my own business. So I'm at three years in my own business and I'm doing okay, but I don't, you know, I only pay myself not a lot. What's not a lot? Four to 500 a week. So it's not, I make sure all my bills are paid and I'm building the business and it's coming along. What kind of business is it? Fitness. I opened a fitness gym. Okay. Interesting. Okay. I'm glad that the business is growing. I just wonder, is there, you know, when it comes to these equations, I said this earlier today, it's good that you've got this chunk of money in, but it's almost like pretend that chunk of money hadn't come.

29:42What would you guys have been doing to pay off this 150? And you would have been getting busy out there. So would your husband. I work four jobs right now. I run this business and I teach 25 classes a week. And then I teach outside of this and I'm also a DJ as well. And all of that brings in the 400 a week? No, that's just from my business. So that's on top of all the others. So I'm still doing all those. What's the other stuff bringing? um well you know djing is like here and there so i would say that's about five thousand a year and then uh the other brings in 400 a month four to 600 a month the other classes okay i just at other places i just wonder if you're gonna be putting your time somewhere where it's

30:29Rachel Cruze:a little bit more valuable yeah from a money perspective 100 100 yeah so i'd probably look at some priorities annette from the time management perspective of how many hours you're doing all of this a lot and yeah where you could be I don't know working at Target I don't know like run some numbers just to be like if I put in this amount of money of this amount of time versus what if I was making 30 hour you know 30 dollars an hour somewhere else or I don't know so just kind of run some numbers yep exactly that's a lot you're doing a lot Annette and don't get me don't hear us wrong we love your dream of having a gym you're in it now it's just maybe there's a way to reallocate that time.

31:08Maybe you hire someone to teach some of the classes and give them a cut of it and figure it out like that so you have more of your time back.

31:30statistics show that half of americans don't have enough life insurance or they don't have any at all i don't understand this john why don't people want to take care of their family they think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And you're telling me for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

32:01Me too. They don't know what to do next. Me too. I mean, you're going to have a crisis here and you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. And take care of your dadgum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad. Yeah. To just miss you. That's exactly what it's supposed to be.

32:30It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Xander.com or call 800-356-4282.

33:03Well, if you're a listener to The Ramsey Show, we really appreciate you. We're glad you're here. Matter of fact, you're the reason that we have jobs because without you, there would be no show. So we're grateful to you. And if you like the show, the biggest thing we could ask you to do is just share it. And there's a lot of ways you could do that. Maybe there's a clip that you like to share and you could do that. Maybe there's, you know, you slide into somebody's DMs and you put it in there. There used to be a playlist. Do we still have the Ramsey, the playlist that we can share? We do. It's still out there on YouTube.

33:33All right. So if you go on YouTube, there's the Ramsey 101 playlist that you can share. And it's a great way to share it because it kind of curates the videos for you so that if somebody is kind of getting into the Ramseyverse for the first time, they're getting the information in the proper way. So keep sharing the show. It helps us out. All right. Let's go to Edna, Lexington, Kentucky. Hey, Edna, welcome to the show. Thanks so much for taking my call. You bet. How can we help today? Well, so I guess I need marriage advice and financial advice. So my husband and I have actually been together for over 10 years, but I finally married him last June.

34:15Rachel Cruze:Not this past June, but a year ago. Good for you guys. That's great. Yeah. I'm still a chicken and I haven't combined finances, so I'm sure I guess I said about that. But we just come from completely different worlds. I was raised Amish, so we raised our own meat, we grew our own vegetables. We had milk cows, all the things. And he grew up very much cereal, microwave dinners, going out to eat, all that. So just financially, we're not in a grant, really. And I know that should have been taken care of before we got married. But I have recently been trying to get him involved in the Dave Ramsey programs and the baby steps.

34:58And even, like, I bought him an edition of the Total Money Makeover. And I don't even think he's opened it. I mentioned going to the East University, and he's like, all right, so we're going to spend money to save money. I was like, yeah. So I today purchased the Everdollar Premium, and I sent him an invitation to it. But I guess I just kind of, after I sent it, I'm like, maybe I should get some advice on how to have that conversation.

35:29Rachel Cruze:Yeah, my number one question is, the way you guys explained your differences growing up makes total sense. It was like in a food category. I milked a cow. Yeah, I milk cows. You're like, I milk a cow. He goes to the store. So from a financial perspective, what are the big differences? What are you bumping up against? He thinks if you can finance it, you can afford it. Okay. I think if you don't have cash, you can't afford it. Okay. Okay. Yeah, that's big. Which I do. I own my house. I have no debt. And he doesn't now. That was one thing that, you know, I was like, you're paying your truck off.

36:05we're getting out of this before we get married. So between us, we have no consumer debt. But when we met, he had a very little equity in his house and owed money on his truck.

36:16Rachel Cruze:Okay, that was 10 years ago. So what's he doing now financially? We own a tire and service center together. And we've had a lot of life happen. Okay, so besides debt, is he in debt currently? no he's out of debt other than our house we i own a house and we just recently bought a farm okay is he suggesting you go into debt for something else right now no but like he won't like i'm all about doubling up payments and let's you know get this you know we have he has no savings and he's uh 20 years older than me so he has no savings i am the only one that has savings How much do you have? Probably$35 ,000.

37:07Yeah, I have. So here's the tough part. You said earlier in the call, I feel like I heard you say, obviously you've been together 10 years, married one, and you haven't combined finances yet. And I thought you were sounding like you didn't really want to combine finances. Well, I do, but I'm scared to. But you're scared to, and yet we're having conversations as though we're combining finances. So it's almost like I wonder if that's feeding into how you're talking about it versus it being more of I want us to be together on the same page. I want us to finally be one. We've been together for 10 years.

37:45I just wonder if it's a shift in how you're talking about it. But talk about the combination as a way to become one first instead of as a way to pay off debt, pay off the mortgage, save money, like that sort of a thing. Do you see what I'm saying? Yes. So talk about it from an intimacy standpoint first. I'm sorry. Pardon me. I was saying talk about it from an intimacy standpoint first. And then as that conversation continues to happen, then we can start to see the advantages from a numbers perspective.

38:17Rachel Cruze:Yeah, for sure. Because I think possibly the problem thus far with the communication has been, to Jade's point, situational and, you know, with purchasing or I want to do a budget and you're not signing into the app. I want you to read this book. You're not reading this book. It's it's more about action. Right. If that makes sense versus starting more with you, Edna, of like, okay, why do I feel fearful? Why am I hesitant? What do I want? What do I like actually talking about more what's going on with you and bringing you to the table and saying, hey, listen, I love you. Obviously, we were together for 10 years.

39:02Rachel Cruze:We are married now. And my hope and prayer, I don't know, I'm making this up. This may not be the case for you. is that I always saw the future with my husband, that we would be one and that we could trust each other. We'd be on the same page. We'd be on the same team. As we walk this road of life, like we are hand in hand. And you're always gonna have your personality. I'm gonna have mine. So Edna, you may always be a little bit more nerdy and always be more conservative. He may be a little bit more of a spender, more of a free spirit, but the personality differences isn't changing the direction of where we're going.

39:32Rachel Cruze:And that's the safety I want in a husband. And I want to know that we are united on these big topics of raising kids and money and spiritual, our spiritual lives. Like, I don't know, all of this, if we're on the same page, that gives me security, right? You're telling him this. But I fear that because you don't seem interested in a topic that I'm really nervous about, I don't feel like you're listening to me, right? Like, you make it more of a marriage issue. It's coming out as money through the lane of money. but to your point it's not a money issue you guys are just missing each other completely or he's just a jerk and doesn't really care what you think Edna which hopefully you didn't marry him if that's him no yeah so I think he definitely not yeah so he cares for you right so I would go about it more from you and this tip John John Deloney said this years ago and I just love it he's like whenever you go into any level of conflict you never use the word you you're doing this you're not reading the book you're not signing up for the app it's all about you Edna you have to enter that conversation about you.

40:34Rachel Cruze:And I would tell him before too, like I wouldn't make this a casual thing. I think you've kind of been casual about it, but I would say, hey, tonight, can we have like a big conversation about money? Because I, and kind of prep him of like, hey, I just have some things I want to share with you and tell him it's about money. So it's not so secretive. He's like, oh God, what are you going to tell me? You know, but actually have a very intentional sit down together. And I just wonder if he's a good man, You know, if he starts to actually say, OK, gosh, she is really worried about this. And, you know, he may not get on board that night 100 percent, but at least he can have a level of empathy to enter in with you in this.

41:12Rachel Cruze:And you guys can start this journey together slowly. But you can start heading in the right direction where it's it's less about throwing a book at him, you know, and more about what's happening with you, Edna. I agree. What you said, Rachel, is exactly right. I think a lot of times, and not just with Edna's case, but in general, we want something from our spouse and we start with these actions of like, it's almost like giving them hints of what we want them to do versus, like you said, sitting down, having the conversation. That way, it's all laid out on the table. And then from that point on, anything that we do, we can link it back to that conversation and say, remember when we talked about this?

41:48Yep, yep. now, now I can say I found this FPU class or I found this book and you've got that conversation to kind of link it back or tether it back to. So it's not just, cause a lot of times we, we could be in one mental space, our spouses in another and they're just going on about their life. And next thing you know, you mentioned something about paying off the house and they're like, what? Yeah. She's like, I'm doubling up payments.

42:10Rachel Cruze:And he's like, golly, what's happening? Yeah. Where'd this come from? Yeah. Right. Right. So give him, give him some of that grace too. in it. But I think getting on the same page is going to be your number one and then everything else. But the good thing is to add in your case, you know, it's not like he's racking up all this credit card debt and spending all this, you know, spending stuff he doesn't have. Like, it sounds like even from an action standpoint, he's in the middle. It's just getting on the same page mindset wise. And it's going to be key for you guys.

42:52Rachel Cruze:When you go through a job loss or job change and lose your employer-sponsored health insurance, there's no better time to try Christian Healthcare Ministries. That's right. There's another option besides COBRA to take care of your family during that time. Because if you didn't know, the cost of COBRA has gone up a lot in the past few years. And CHM is an affordable, biblically-based alternative to health insurance. So do your own research. CHM is a great option that's potentially a third of the price of COBRA. It's a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over$11 billion in medical bills since 1981.

43:33Rachel Cruze:And the support you get from CHM goes beyond helping you pay for medical bills. Members become part of a family that prays for them when they have a medical event. Try getting that with COBRA. So if you're going through a job loss life change, or just want to explore other options to save on healthcare, CHM might be perfect for you. CHM programs start as low as$98 a month. So find out more at chministries.org slash budget. That's chministries.org slash budget.

44:18From the Ramsey Network, you're listening to The Ramsey Show. We're talking about your life and your money all day long. I've got Rachel Cruz here next to me. I'm Jade Warshaw. Let's get right into the phone lines where we've got Wendy from Atlanta, Georgia. Hey, Wendy, how can we help today? Hi, Dave. Thanks so much for taking my call. We have a 15-year-old daughter, and she is a social media influencer. we've made her older siblings buy their own cars and they probably had six to seven thousand dollars to buy a car when it was time but obviously her situation is going to be much different and we aren't necessarily in agreement as to my husband and I as to how much money we should allow her to spend on her car.

45:09What is she earning? This is crazy. It is crazy. Her manager says that in the next year, she'll make a hundred thousand dollars. Currently, she has a fully funded Roth IRA. She has$32 ,000 in the brokerage and she's averaging about$8 ,000 to$10 ,000 a month right now. Wow. So what does she want to spend on a car? To get what she wants, she'd want to spend around$50 ,000. Wow. Okay. I can understand your conundrum. Can I just ask, honestly, is that more expensive than your car? Yes.

45:58Rachel Cruze:Wow. This is something. Yeah. Okay. Oh my gosh. This is juicy. And this is this is this is how I would feel as a mom. And I don't have a 15 year old. Let me just say that. I have a 10 year old. So I take this with a grain of salt. I always hate giving parenting advice when there's I won't even say this is advice. This is like what just came up in me, Wendy, as a mom. We'll just be we'll just be girlfriends just chatting. I like that. What rose up in me is less about the dollar amounts and more about what I am. um what am i what am i helping her as a mom see that is important in life and she's in an industry which i'm not mad about i'll link a dress or two i'm not mad at the influencing world i'm really not it's how i buy half my clothes as i see someone you're also a lot older and you've had a lot more maturity to grow over time it can be it um it's like the it can be a very vain self inward looking type industry in general.

47:00Rachel Cruze:I'm not saying that's your daughter. I'm just saying the industry, the industry, right? Hollywood has an industry influencers has energy, like everyone, everything has pros and cons. Um, so as a 15 year old, what I want to facilitate in her is that our stuff cannot own us. And that's from a debt perspective, but it's also from an identity contentment perspective. Our stuff is not going to make us who we are. And the moment we live in a world where our stuff starts to define us. And if you took all the stuff away, if you took the hair extensions and the eyelashes and the cars and the clothes, who am I?

47:38Rachel Cruze:Who am I? Take everything away. Who am I? So like I would be pushing a message so hard, Wendy, to her of this is incredible. Number one, what she's doing, like her tenacity to go out and do stuff. And she I mean, it's amazing. It's absolutely incredible. So I don't want to squash this entrepreneurial side of her, but there's just a lot of caution and flags that this is going to be the first big purchase that she makes that could go take her down a road to say how much does stuff influence who I am as a person and to have the restraint to say, I want this$50 ,000 brand new car, but also I'm going to understand that I am 16 years old.

48:20Rachel Cruze:I'm going to have a level of common sense with my life. And I don't need a$50 ,000 car at 16. And it would show a lot of maturity and a lot of confidence as a mom to her if she was like, you know what, mom, I get it. Like I want a$50 ,000 car. What does she want? Is it like a, I don't even know what that would be. A cheap Wrangler. A Wrangler. okay it's that what if we went and bought a used jeep right right like going by a used version like what does that do to your identity does that make sense like i'm trying to i'm trying to kind of poke on the triggers of what i don't want to be magnified for her as an adult in her 20s so like how do you make a purchase that that doesn't influence it i think what you rachel i think you're spot on on that i also think there's part of it and again there's there's part of this that's hard to put into words.

49:13There's also part of it where it's just about building a maturity. You said building a maturity level, but it's almost like her following, right? She didn't immediately start with a million followers. She had to work to build that up. And as you go through those stages, your character also builds to be able to hold it a little bit more and a little bit more and a little bit more, right? And so I think the same can be true from a financial perspective, right? With large purchases. With large purchases, when you're gifted large amounts, there also has to be a part of your personality that can carry that.

49:47Because here's the thing, if she does a$50 ,000 car, there's a lot that's going to come with that. There's going to be expectations from her friends. There's going to be things that she feels like, now I have to be here or I'm projecting this to the world. Now I have to be here. It's almost like, and again, I don't have kids this age, but it's almost like when I was in eighth grade and I wanted to start wearing makeup, I didn't have a bad reason for wanting to do that.

50:12Rachel Cruze:I just wanted to improve my, the way I looked as a eighth grader. But my mom saw ahead and was like, hey, you're just not there yet. Like you bringing makeup is going to bring a different type of attention. It's going to bring more, you know what I'm saying? There's more that goes along with these things than meets the eye. So I'm with you on not doing a$50 ,000 car, but I think it's fair for her to have more than a six or seven thousand dollar car 100 to reflect the work she's done 100 yeah so maybe it looks more like i don't know what's reasonable for a 15 or 20 yeah what's a yeah 20 25 i don't know what's reasonable for a 16 year old that has the cash too like which is incredible and she's buying her own car so like i want to reward part of that in her but i think for a teenage girl and that whole world and all of it I'm like I just want to where I can steer the motivation in a healthy way so that that is what's magnified as she gets older versus just being like oh my gosh you can afford you know like you can afford it so just get it and I went to a degree I have restraints on myself I'm such a spender I love clothes I'm such a spender where I'm like I probably could go out and get more but I'm like for my own dignity and my own sake like in my own contentment I have to say no to myself sometimes even though I can financially afford things sometimes that I'm like I don't does that make sense like there's something there for her at 15 that I just want to protect I agree and I'm looking at our audience out here and I'm like are we on point are we saying things that make points or are you like no you've missed it wait should she get a$50 ,000 car at 16 is there any hands up all right okay we okay we got a good we got a good sample size.

51:53And it's most adults out there, by the way. What about like$25 ,000? I feel like, is that still too high?

51:58Rachel Cruze:Oh, we're getting some down low. Oh, we're getting some lower. $20 ,000? $20 ,000? All right. Okay. So you guys think she should stick to the$7 ,000 to$10 ,000 range? Okay, this is like the price is right. We're getting mixed reviews. They're like$10 ,000. I'm going to give her some money to spend. I'd be okay with$20 ,000,$25 ,000. Honestly, I would. Okay, and And let me say this to Wendy. It's got to be in cash. And you said her manager said she could be making$100 ,000. That's not money in the bank. That's a good point. So it needs to be reasonable with what she has now. I don't know how much money she has right now in that account.

52:34Rachel Cruze:Yeah, that's true. Wendy, we just monologued. I apologize. But it also reflects our teaching, which is even at$100 ,000,$50 ,000, that would be too much at this point. She'd be right at the line. And so even from a rule of thumb perspective, not just from a, I don't know, quote, kind of like morality. Yes. Good call. Thank you for the call, Wendy.

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54:42thanks for listening and being with us on the show today we're going to go straight to the phone lines where we have shana in portland oregon hi shana how can we help today hello hi how are you guys we're good how can we help you Awesome. Well, I'm a single mom by choice. I will assume to be an empty nester as my son heads to college this fall. So that focuses me on retirement.

55:07Rachel Cruze:And my question is, can you help me with a goal on how much to pay on my house between now and retirement? Because it's my big focus area and piece to prepare to be ready. So how much do you have remaining on your mortgage? My mortgage has$370 ,000 remaining. Okay. And what's your income? It's in the mid-six figures. $150 ,000? $150 ,000-ish, yeah. Okay. And what I'm getting to, without asking a bunch of questions, what I'm getting to is figuring out your margin every month because that's really what's going to speak to how quickly you can do this. So are you currently putting away 15%, investing 15 %?

55:57Rachel Cruze:Yeah, I'm clearly on baby step six with a margin right now of about$1 ,100 to$1 ,200 a month. Okay. So what I would do if I were in your shoes is I would look on the calculator, like how quickly can I pay off my debt calculator? You can find that on RamseySolutions.com and basically say, okay, it's your choice, right? Because we always say that at this point, it's all about intentionality. You don't necessarily have to be intense, but it just sounds like you want to know the exact numbers and know the game plan. So you can decide, OK, am I putting 600 extra or am I putting 800 extra? And how does that affect how quickly I get this done?

56:36And then it's really up to you how that looks like. And I mean, that can also be very seasonal. I know for Sam and I, there's some seasons where we're like, oh, we're going crazy and all the money's going to the mortgage. Then there's times where we're like, I'm just going on vacation. I'm not hitting it like this today. And you get to make that choice. The point is that you're consistently paying more than just your normal monthly amount.

57:04Rachel Cruze:How old are you? I'm 55. 55. When do you want to retire? Do you know? Do you have an age? 60. At 60? Okay. So five years. So that's not going to, I mean, yeah, if you put, what is that? Six. Yeah. I'm just thinking if you put a thousand bucks extra a month, right. And being able to kind of extrapolate that and say, okay, it's not going to make probably a massive dent in 370. That's right. How much do you have in retirement right now?

57:41Rachel Cruze:Retirement, about 1.5, targeting 2.5. by the time I hit 60. Okay, that's great. That's actually good to know. Yeah, that's wonderful. Yeah, I guess my question is... Because you can use some of that. I mean, be aggressive with your income now, but also while still funding that 15%. And then once you get to retirement, you can use some of this to pay it down. I mean, yeah, if you made it a point to pay off half between now and then and get it down to, I don't know, 150. And then you said, and I plan on by then taking 150 of the 2.5 million and finishing it off, I think that'd be just fine. Absolutely.

58:20Rachel Cruze:And so I guess that would be my question is, because I can work the numbers, but it's that energy to put in extra work or take on a second job to pay down more. And so what would you guys do? Would you take the tax hit on the back end of those retirement funds if I do take it out to pay off half of the house? Well, I... Half of the mortgage? Well, you would wait till... Or not. um because how many how what percentage of the 2.5 will be in a Roth versus traditional it's all traditional okay that's that's yeah you're gonna have to pay the tax burden on that then of course right um well okay yeah so I all that to say Shauna I think let me say this overall looking at your numbers you're going to be fine even if you took you know um I don't know a hundred and I don't know by the time you get to retirement 200 out that's right and paid off the house but you had to pay taxes all of it your house is paid for you're good and you'll be fine into retirement even with what's left so either way you're fine I think the question would be for you what do you want like do you want to work an extra job to put towards the house so that you don't have to take out as much at retirement or what because either way you're going to be fine I think that's more of a personal question of what do you want to do with the next five years?

59:39Rachel Cruze:I mean, you're going to be an empty nester, you said. And remember this, too. Your income should continue to go up. So hopefully you could put$1 ,500 away with some margin in the next two years. So remember that, too, as part of the equation. You'll be able to pay off more than what you think you will be today. And can you start with the Roth IRA instead of continuing to contribute to traditional funds? can we start building over there instead of continuing this route? And then it just creates a little net. It reduces cash flow up front for the house. So that was kind of my back end. If you did an additional Roth IRA is what you're saying.

1:00:19Rachel Cruze:So if I paid into a Roth 401k. Yeah. Instead of continuing to do your 15 % into traditional funds, could you max out a Roth instead? and in addition to yeah absolutely so i can play with a roth option as well yeah i'm just saying going forward so you have those funds so you're 15 uh it's going to be i mean you'll you will be able to max out a roth and then and then some and then the extra would then fall into would trickle you know over into the the traditional is what i'm saying yeah but yeah and it will mess up some of your formula because it's going to be after tax dollars going in. So that's what you're saying.

1:01:01Rachel Cruze:So mess with that too. But I think again, I appreciate the detail in it all because I think it's very fair. Great question to ask because housing is the largest expense that we have. And if you could go into retirement with a paid off house, that's just incredible. But I think for you, maybe it's a goal too, Shana, that you're like, okay, maybe I'm going to work a little bit more extra and I'm going to try to have half of this paid off going in. Have some level of aggression with it, because I think that's fair. But also, I would not feel like a failure if you go into retirement at 60 with$2.5 million and a$200 ,000 mortgage that you can pay off with it.

1:01:38Rachel Cruze:So I think you're going to be great. Yeah. And just in case you were wondering, it's the mortgage payoff calculator. We can probably link to it in the show notes. So you can play around with that. Or if you're listening and you've wondered the same question you can play along uh with that calculator all right let's take a couple social questions rachel we haven't done one of those in a minute um oh hannah from facebook says how long should adult children stay on their parents cell phone and car insurance plans oh man we george camel and i talked about this and actually i think john deloney was on an episode of smart money happy hour i don't think it's released yet but we did a whole recording and this got brought up and my mom heart went out.

1:02:21Rachel Cruze:I don't know why subscriptions drive me nuts. Like if people share Netflix accounts with their parents, like get your own Netflix. But for some reason, the cell phone plan doesn't bother me. I don't know why. I wasn't expecting that. I don't know what I was expecting. I was expecting that. I don't know why it just doesn't. I don't know. It just doesn't bother me because I think as a family plan, it's just, you just get a better rate. I don't know why, Jade, it's the number one thing okay I don't know why the cell phone does not bother me that's so funny because Amelia I don't know and we have a whole family plan and I don't know I'm like I just don't like I'd get a rush to get her off I would want her off my Netflix account before my cell phone and it makes no financial sense I don't get it I don't know I don't know um I get um so when I met Sam and we were getting engaged he was on his mom's like verizon yeah or whatever and was that such a turnoff you were like i drew a line in the sand i was like here's a couple of things that must happen today how old was he how old was he uh that we've been 23 23 oh okay he's still pretty young yeah 23 and i was like your mom is still you're still on your mom's like i'm so judgmental but so funny so which is fair it's how it probably should be okay okay well we have a few we have a few young people in the booth saying that they're still yeah you're still on it okay no listen no judgment no shade isn't it yeah but again every other every other part of life I'm like no be on your own but for some reason the cell phone plan just doesn't like cut me to my core I mean the insurance you can be on medical insurance till 26 is that right with Obamacare and stuff when all that went through so yeah be on that till 26 that doesn't bother me car insurance no you gotta pay your own car insurance yeah that's yeah yeah usually you're doing that like in high school i feel like that's the yeah that's the thing parents pay then if you have a debt on it parents pay the note you pay the insurance yeah yeah that feels good

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1:05:44you are listening to the Ramsey show hey thanks for hanging out with us uh let's see buying or selling your home is a big deal guys and we believe that and with all the clickbait headlines and conflicting data out there it really is hard to know what's actually happening in the housing market. So we're here to make the latest trends easy to understand. Median home prices actually stayed steady last month at about$441 ,000. There you go. The number of homes for sale hit 1 million for the second month in a row. And buyers have more competition and have more options in negotiating power, while sellers face more competition.

1:06:25The average 15-year fixed rate also held steady at 5.95 % last month. And if you're debt-free and have a fully funded emergency fund and a solid down payment, now is a great time to buy or sell your home. To learn more about housing markets and trends and to get free tools to help you buy or sell with confidence, go to RamseySolutions.com slash market or click the link in the show notes if you're listening on podcast or YouTube. All righty, let's get to the phone lines. We've got Chandler in Dalton, Georgia. Hey Chandler, how can we help today? Hey, I was wondering if I, I guess, took the right steps on purchasing my first home.

1:07:03Tell us about it. So I am 21 years old. When I turned 19, I bought three acres of property. I've been kind of clearing and setting aside. And I recently just went out and bought a mobile home, which I know y 'all aren't too fond of. But considering the market and realistically the payments right now, I didn't know if there was a better option. And I just wanted to be able to live comfortably. And I just didn't want to see. I didn't know if it would end up going under or not. Well, yeah, the mobile home is going to go down in value. But let's talk about the land that you have it on that you purchased.

1:07:42How much land and what did you pay for it? Three acres. It's three acres and I paid$35 ,000. and that was cash. Oh wow good. Okay and then the mobile home what'd you spend on that? So it wound up being a$90 ,000 loan but I put 10 down so I only had to borrow 80. Okay so you owe 80 on the mobile home. What's your ultimate goal? I mean I'm guessing your ultimate goal is to save up and to be able to build a house on this land? um eventually honestly i'd like to find more property in the future i'd really like to have around 10 acres um currently i guess i'm just trying to figure out i don't this whole life thing is getting kind of strange it's a little bit older i get um i'd like to be able to pay it off as soon as possible but also be able to enjoy myself at the same time okay so yeah the part that you said earlier when you called was like you know you guys aren't huge fans of mobile homes.

1:08:43It's just, it's simply because they go down in value and it's hard to build wealth when you're tied to something that's constantly going down instead of up. So if you said to me, Jade, you know, I, my goal is to have the thing paid off. I just want to live freely. I might've said, spend less on the mobile home and just, you know, pay for it in cash, but you're locked into 80 ,000. How quickly can you, can you pay it off and be done with it? i'm honestly not sure um i'm i'm expecting hopefully maybe in five to ten years i know that's a wide range but yeah i think that's how old are you chandler hustles uh 21 you're 21 okay and what do you earn what's your what's your yearly and monthly income um right now it's uh $52 ,000.

1:09:29That's pre-tax. And I bring home about$800 a week. So I do what? $8 ,000,$16 ,000,$32 ,000. Yeah. So my goal, if you say your goal is to pay it off, then that's my goal for you to pay it off. Now, me, if I were you, I would have thought, and it's not too late to do this, but is there a way that I can get into something less expensive so that I'm not going to lose as much of my shirt on and then I can be putting aside money to save for, you know, a down payment on building something. Right. That would be my ultimate goal. Okay. I just think that... I'll definitely look to see, I guess, I'm not really too set on moving per se, because I honestly don't know what I want to do, but I agree with, you know, going down from 80.

1:10:20I can see where that's, you know, depreciation of it and as far as the future would go because I'm fairly sure even then I could come out without losing money. But I'm not sure I would even make any. Because I'm imagining you also have another vehicle, right? Like what you drive every day? Yes, I have two. Uh-huh. And what do you have loans on those? They're paid for? No. Okay. But those are also going down in value. right? That's going down. Those other two vehicles are also going down in value. And eventually, you'll have to replace those. So I'm just trying to get you into a situation where there's just more value in where you're putting your income.

1:11:01I love the goal of eventually having more acres. But I do think if I were you, I'd want to get into a stable living condition first, before I start investing in more land with my cash.

1:11:13Rachel Cruze:Yeah, and I would be thinking through, okay, what can I do now to start just saving in general for the future? So do you have any savings at all? I have about$17 ,000. Okay, that's great. You're doing really great for$21 ,000. Can I just say that? Thank you, I'm trying. You know what I mean? I probably wouldn't have made this specific decision on the housing. But overall, like you had$10 ,000 to put down. You have$17 ,000 saved. I mean, like you're really moving and going. Are you investing at all into any level of retirement or into the market? No. At this exact moment, no. I just started a new job.

1:11:56Okay. Which is, I've worked here before, but I started doing it when I was in high school. So it was on an internship and I really didn't pay well. So I left and then came back and there was a significant raise. Okay.

1:12:13Rachel Cruze:That's great. It feels pretty set in stone. I'm still in the 90-day grace. So in turn, when it's time to start investing in the 401k and whatnot, I'll be able to do the match. Okay, great. Yeah, so that's kind of your next, you said. Something about all this adult stuff is a lot. So I'm just adding another to your plate, though. But for real, Chandler, the way you're moving, I don't want you to lose grounds from a future standpoint. which again we're not in any rush you're 21 you're fine but the sooner you know you get a roth open and a 401k you start putting some money aside because jada i would treat this like a baby step six or would you move it to baby step two i think that i would move this to baby step two because it's going down in value you would do and you would pay it off before even yeah i'd either pay it off or like i said if you're looking i i don't know the mobile home market well yeah but if you start looking and say man i actually probably could have gotten something for 40 that gets the job done I might try to make that sale and make that swap just so that you're again right you're half the time I will say I was looking in like the base price on one that you could get into is probably around 50 to 60 but that didn't I don't think that includes included closing costs or warranties okay okay I made sure to get a good warranty on everything that I got online.

1:13:37That way everything is covered if need be. And also, I do a lot of side jobs just trying to make as much as I can to get somewhere. Yeah, and listen, I'm always thinking ahead. I'm thinking about the future Mrs. Chandler that when you meet her, she might be like, I don't want to live in a mobile home, so I want you to be ready when that season comes. I've met her. I just haven't. I got to, I'm trying to do it right. I'm trying to get her to, I want her to be special. You know, I don't want to go. I know it's all different to some, but it's like, she keeps on me. She's like, go buy a$100 ring. Like, go to the pawn shop.

1:14:19And I'm like, look, I understand, but I want her to be special for you. It's only going to happen once.

1:14:24Rachel Cruze:Oh, there is a Mrs. Chant. Okay. Okay. So this changes things a little bit. Where does she want to live? She is 100 % on track for her mobile home. She's excited. Okay. I told her. Listen, you hit the nail on the head when you said everybody's different. They have different preferences. If you're in this home, you guys are happy. She's happy. Yeah, the biggest thing is let's get out of it as quickly as possible into something that you're building. You may not end up paying it off. I'm not saying that the goal is to pay it off, but I am saying that the goal is to stay obviously current on it while you're saving for a down payment to build something that's secure on your land.

1:15:03that's what I would do, Chandler. Thank you so much for the call. It's a good call.

1:15:07Rachel Cruze:It's great.

1:15:44Are you staying on track with the baby steps? That is the question. And the baby steps is part of the Ramsey plan that we teach around here. And if you're wondering if you're on track, you can take the quiz to check your progress and receive a personalized plan just for you. Simply head to the show notes and click the link that's titled, Are You on Track with the Baby Steps? And complete that quiz today. Mary is in Salt Lake City, Utah. What's up, Mary? How can we help today? Well, about a year and a half ago, my husband got involved with some online investment deal, which turned out to be a scam.

1:16:20He gave away all our retirement. And then he borrowed another about$250 ,000 more to get out of it. So I wake up every day worried. But my question was about tax. I'm worried about next year's federal state taxes. Are we going to start owing a lot of money? We're sort of going okay. We got two jobs each. We paid off a lot of the debt. We're working on it. We paid off about half of it. But I just keep worrying the other shoe's going to drop, and I worry about taxes. We paid last year's taxes. We were able to pay our federal taxes, I think, and then we got a refund, a federal refund, which we used to pay our state taxes.

1:17:17But I'm just wondering, you know, how should we proceed from here?

1:17:23Rachel Cruze:gosh mary oh i'm so sorry how old are you guys well that's the problem i'm 75 he's 72 i'm i'm so sorry oh mary okay um so your your worry is about taxes is what you're saying first and foremost and well i'm thinking yeah everything like we're doing okay we're paying this stuff up. We got a reverse mortgage on the house, which gave us some money. But that was another, that was$250 ,000. Now that is against our equity. Yeah, you went back in equity. Oh, gosh. Okay. So can you tell me how much was in the retirement that was lost? I hate to rehash it. Well, that's the thing. I think there was about a little over$500 ,000.

1:18:19Okay. And that was not this year. That was the previous year. So you said you already paid the taxes on him liquidating that. Is that correct? I guess so. You know, the thing is, every time I talk to him, I can't handle it. But he told me we were able to pay the 2024 taxes. Okay. So this started in April 2024. So we paid the 2024 taxes. This year you did that. You did that in January this year. Right. We did that in January. So you should be off the hook for the largest amount. If everything happened the way you said it did and that money was spent and used up in 2024 and maybe 2023. I'm not sure.

1:19:07Rachel Cruze:Yeah. Do you have evidence of that, Mary? Like I would want to see documentation here on out from him. I know he's saying that's a good point, Rachel. But I'm like, I just want to make sure that things are actually happening the way he says. Because to pay taxes on that, I mean, that's a lot of cash. I mean, if you liquidated half a million dollars from your retirement. Well, is that what he borrowed the money for? To pay taxes? No. No. He tried to get out of this thing, I think. And they kept saying, oh, well, you need to pay these fees and you need to pay this tax. So he kept borrowing money and giving to them thinking it was getting them out of this scam.

1:19:51But in reality, he was just giving them more money. Are you working? Are you is you or your husband working with the tax professional? No. OK, today. And we're going to make sure Kelly's going to pick up. We're going to make sure you're going to get hooked up with one of our Ramsey Trusted Pros. We'll find a tax provider in your area that's going to help you.

1:20:10Rachel Cruze:And a financial coach on us just to get an hour with to sort through all this. Because depending on, to Jade's point, because he borrowed money for what? Like, I know he liquidated the retirement. Why did he borrow$250 ,000? Because they told him the scammers. Oh, it went into more of the scam, the$250 ,000. Yeah. Yeah, they kept saying, you know, oh, you've got to pay this. Have they been sued? Who is it? I mean, is it a company? Is it a person, like a financial advisor? Like who? No. Yeah, where did you find them? Okay, so my understanding is some guy he used to work with back then called him and said, hey, I've got this great thing going on.

1:21:03Do you want to get in on it? and I'll have my girl call you, which she did. And he started investing. Now, the investment went through a cryptocurrency. So he had to give it to this account and it turned crypto and then it went. Now, we reported this whole thing to the, I don't know, the FBI and the police and the Justice Department or something.

1:21:30Rachel Cruze:Because sometimes there can be lawsuits out of all of this. I don't think we can find these people. He's done. Okay. Yeah. I mean, we have the information. We gave the information. The$250 ,000, Mary, was that when you said he borrowed$250 ,000, was that a personal loan or was that against the house? Was that the reverse mortgage? It was many things. He had$69 ,000 from a company, you know, to borrow. I don't know if I could say names of companies. The bad thing is he borrowed$88 ,000. My son gave him$88 ,000, which he turned in. He's a big crypto guy. He did a personal loan from somebody for$30 ,000.

1:22:19He took personal loans. He ran out of charge cards.

1:22:24Rachel Cruze:The$250 ,000 is beyond the reverse mortgage, the money you guys got out of the house. Well, then when this all happened, we got a reverse mortgage to pay some of this off. Okay. Got it. Okay. Listen, you've got, this is way more than we can unravel in this few minutes. You've got, just promise me, promise me that when we give you this help that you're going to take it. And please, please, I just. The taxes is not what I would, I mean, I understand that you would worry about those, But for you guys in your future, I'm like, there's just, there's bigger things happening. And I know the urgency for you is the taxes next year.

1:23:03Rachel Cruze:But getting, you'll get answers with the tax professionals. They look at all of it to make sure what was paid out of that specific retirement account for me. And then obviously that you guys are keeping up with your, you know, paying state and federal, which is what you're doing. And you're working. You've got money coming in. You've probably got Social Security coming in. How much is coming in every month for you, Mary? Well, our Social Security is about$5 ,000, a little over$5 ,000. And then our part-time jobs, you know, it's so hard to say. We're maybe$5 ,000 a month between all of our part-time jobs.

1:23:47In the winter, when the resorts start opening, we have a job there which pays well, and so we'll be making more money. But we are working as much as we can. I had a garage sale today. I just got$218 this morning. So all of that goes to paying charge cards, bills. Listen, Mary, you're a gangster. Your attitude in all this is stellar. The fact that you're willing to go back to work, you're doing garage sales, you're doing a lot. I am proud of you. I'm sorry that this happened. We're going to make sure that you get everything you need in your corner so that you guys can keep fighting through this.

1:24:28It sounds like you do need a budget. You need every dollar. We're going to make sure you have that, the best version of it, so that you can see where every dime of this hard-earned money is going to go because you're going to need it.

1:24:39Rachel Cruze:And guys, listen. Please listen. If something sounds too good to be true, it is. And I know people always kind of rag that our advice is like so boring and it's just not new and all the cool new things. This is why. Yeah. This is why. Please, just like be boring. Be boring. And if there's something that's like, oh, my God, this is amazing. There's a spirit of greed in that, too. It should be a red flag. That's right. Okay? Slow and steady wins the race, you guys. Don't fall for this crap. In the crypto world, it's everywhere. Everywhere. It's everywhere. And they prey on the elderly. This is it.

1:25:14Rachel Cruze:This is literally it. So, oh, so sad.

1:25:45right now. And with foundations and personal finance, your students can learn how to budget, how to save, how to avoid debt, like real world money skills that last a lifetime. So learn more by going to ramsysolutions.com slash foundations. That's ramsysolutions.com slash foundations.

1:26:14from the Ramsey network you're listening to the Ramsey show I'm Jade Warshaw next to me Rachel Cruz continuing to take calls about your life your money and like I said everything in between you can get involved in the show by dialing 888-825-5225 and our producer Kelly we'll pick up and try to get you on that line. Let's go straight to the phone lines where we have Olivia. She's in Tulsa, Oklahoma. Hey, Olivia, what can we do today?

1:26:42Olivia, are you there? Are you there? I'm going to put her on hold. Oh, you're there.

1:26:48Rachel Cruze:Hey, just in the nick of time. Yes. Hi, Olivia. Hi. Thanks for taking my call. My husband just finished DSM school in May. We didn't take out any additional debt for him to go to nursing school. Once he finishes orientation in December, his estimated gross income will be about$88 ,000 with the opportunity to make$100 ,000 if he picks up an extra shift every pay period, which would net us about like$70 ,000 after tithe and taxes. Cool. We'll get a$10 ,000 sign-on bonus that comes in for installments over his first year of employment. he would like to go back to school in two years for a doctorate in nurse anesthesia which is a three-year program it would increase his earning potential to 250 000 the cost of tuition is 100 about 125 000 which you can get covered by going into the military or getting accepted into a rural medicine scholarship program however you're not allowed to work in years two and three of the program.

1:27:53We currently have$200 ,000 in student loan debt with varied interest rate. We have$4 ,300 in credit card debt with a 25 % interest rate. We've been married for three and a half years. We're trying to start a family that's been trying for about 11 months with one miscarriage at the seven-month mark. And we have a 2007 Toyota, which has like one to two years left of life in it. we're wondering what to put our money towards first between saving up for baby the car needing a new to us car and the debt and then once we pay off the car and save up for once we save up for a new car save up for the baby and pay off that credit card debt should we start saving for him to go to school since it would increase the size of our shovel significantly to 250k or should we pay off our student loan debt before sending him to school.

1:28:47Rachel Cruze:What's the 200 student loan debt? Whose was that? Half of it's my student loan debt and half of it is his. Okay. What do you do? Currently I work part-time as a nanny. I make about$900 a month, just a little extra on the side. What was the degree for? I did a grad degree in art therapy, but I did it out of state. So I'm not, I wasn't able to get that degree. What's art therapy? Jump through a bunch of hoops. Yeah. Well, what is that? Well, like what kind of job is in art therapy? So I would be like a licensed therapist. I would be a licensed therapist. Are you a licensed? Did you get your license?

1:29:30Rachel Cruze:Did you get the license with the$100 ,000 tuition? No. So you can get your license in some states, But the state that I'm currently in doesn't let me get licensed right away without having to pay like additional, like a couple thousand dollars for additional classes here in my state and having to like do a bunch of testing and go through, jump through a bunch of hoops. What does a person who does finally get that certification, what kind of money do they earn? I'm thinking, I can't remember. I'm just trying to decide, is it worth paying the couple of thousand for you to get your art therapy license so you can actually work in your field?

1:30:09yeah i could also like work as an unlike not through a license i could work in a community center and say like i can do therapeutic art with your clients i just can't be like a licensed therapist if i do that okay um which that would be determined by the company okay so getting my license here in oklahoma uh it would take me like five years to get there and if he goes to nurse So here's what I would do, Olivia.

1:30:35Rachel Cruze:He's making 80, going to be making 100, because I would definitely take that shift. You guys are in debt. If I'm you, I'm applying for jobs and I'm going to be a receptionist at a dental, you know, place. I'm just like, you're going to go and make it a goal to make$50 ,000 a year. You need to go do something, Olivia, really. because you guys have over$200 ,000 in debts and have a dream of other big things, which is amazing, that's going to cost money. So we need money coming in. So he's going to be working an extra shift. Can he pick up an extra, extra shift? I mean, nursing is like an amazing field to be in because you guys are dual income, no kids.

1:31:22Rachel Cruze:You're in the dink phase. And so take advantage of it, Olivia. start working your butts off because yes I want all of this debt paid off before you guys get a second degree okay even though it's going to cause a shovel to be bigger the shovel will be bigger you know when you guys start working extra and you work in two jobs right I'm like you can start making the shovel bigger now and so that's what I would focus on save up 10 grand for a crappy car when the Honda goes out in two years, create a sinking fund where you put, you know, $500,$600 a month away for a sinking fund. And then on the side, yeah, let's be trying for kids.

1:32:03Rachel Cruze:And I'm going to say when you get pregnant, that's my prayer for you, pause everything. You guys save up cash when that happens. We call that stork mode. And pile up a big part of cash. You guys still working, working, working, working, working, working, working. Baby comes, all right, everyone good. Okay, whatever's left in the savings, we're going to throw at the debt. But my goal for you guys would be, gosh, I mean, if y 'all could make, I mean, try to get this paid off. I don't know, Jade. Is this crazy to say? Two and a half years? I don't think so. Because if she starts making 50, that means you're making 150.

1:32:37But if you live on a half, where are you guys? Yeah, you're in Tulsa, Oklahoma. Yeah, you live on 75 ,000. That's average income, you know, median income. So if you live on that, and so that means you're putting the other 75 towards your debt, you know, I get it, minus taxes. I think that you guys could do this. No, I don't think you're crazy.

1:32:56Rachel Cruze:Two and a half years? Yeah, two and a half years. Make some crazy goals, Olivia. Crazy goals. And then in two and a half years, then in two and a half years. Does it make sense for me to get a job, like a full-time job while we're trying for babies? Yes. I'm not going to tell them I'm not going to be there? Yes. Yeah. Because you don't know what the future holds. and you can still work for the eight of the nine months that you're pregnant. So, you know, there's a lot that can take place in nine months money-wise with you at the full earning potential. You're not currently expecting, are you? No.

1:33:27Rachel Cruze:No, okay, yeah, yeah. So I would. Now, if you were expecting, you would have to, you know, I would be forthcoming with an employer probably, you know, in that case, just as good courtesy. Yeah, okay. I don't know. I don't know. Whatever. It depends. It depends on where you go to. That's fair. All that to say. All that to say, you can work and try and have the baby. And that's great. And then you got nine months of work. We're both moms. We've both expected a difference. Listen, here at Ramsey, because I know what kind of company it is, I'm being forthcoming. You know, that's fair. But every corporation.

1:34:04That's right.

1:34:05Rachel Cruze:That's true. That is true, Jade. That is true. And you don't legally have to say it. You don't have to say it. Yeah. So anyways, but you're not pregnant right now. So be applying for jobs and go work your tails off, Olivia. Get this paid off and then continue to live on nothing, on nothing to save up$125 and take them through the program. And if you guys are in your early 30s doing that by the time all this is said and done, it's great. It's great. You're living a great life. Rachel, Rachel, you got a little spice today, Rachel. I'm here for this. Well, in that one, I think we can do, I think we can be a little.

1:34:38Rachel Cruze:I like it. A little snappier there. Thanks for calling, Olivia.

1:35:10you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more. And when you're ready to get the coverage you need, you can connect with a Ramsey trusted insurance pro who will only get you what you need at the best price. Go to RamseySolutions.com slash insurance, RamseySolutions.com slash insurance.

1:35:47You know, investing may seem complicated or confusing, but it doesn't have to be. The Ramsey Investing and Retirement Hub is packed with interactive tools and resources that can help you get informed and not be intimidated. You can check it out at RamseySolutions.com slash retire or click the link in the description if you're listening on YouTube or podcast. Lisa is in Cincinnati, Ohio. Lisa, how can we help today? Hi. Hi. Thank you for taking my call. My husband and I are baby step millionaires for probably about eight years now, yes. Nice. The house has never been paid off. Actually, we sold a house and bought another one in the meantime during this.

1:36:32But my question is, I loaned, well, we did. We loaned$50 ,000 to my daughter because she needed to do some upgrades on her house. And she is now selling that house, so she's going to pay us back with the equity that she has in it. My question is, should I, my husband has, we both have a list on what we want to do with$50 ,000, and it's things we want to buy, but should, or should I put the$50 ,000 towards our mortgage that's the only debt that we have. There's a couple of things in this.

1:37:09Rachel Cruze:How much do you guys owe on the mortgage? $300 ,000. Okay. How much do you guys make a year? We are both retired, and we bring in about$7 ,000 a month. Okay. And how much is in retirement?

1:37:31I have that. Um,

1:37:35890 ,000.

1:37:36Rachel Cruze:Great. 890. That's great. Good job, guys. Um, I think you could, if, if, if you were both in agreement that that's what you want to do with this money, I wouldn't have, cause it's almost like, it's not like a windfall. Like it was money that was already yours and you kind of took it away to do this and now you're just getting it back again. Um, so if you wanted to put the whole amount, you totally could. Is there anything else on your list that you would do with the money? Well, my husband wants a side-by-side, which I think is a total waste, but, you know, that's what he wants, so I've got to kind of please him, too.

1:38:10How old are you guys? One thing. I am 61, and he's 63. Okay.

1:38:19I would like to at least put away$2 ,000 per grandkid for, I don't know, just for future college or something, which I don't know where to put it. And that would be only$8 ,000 of it. And then, like, I would like to take a river cruise for me and him just to have a big splurge of a good vacation for us both. Yeah, I would do that. How much is a side-by-side? It depends on what you get. Of course, the most expensive would probably be$25 ,000, but you can probably get one for about between$15 ,000 and$20 ,000. I know I've looked at used ones, and you don't know what you're buying with a used one, if it's really going to work that long or anything.

1:38:57So I'm for a brand-new one. I see, and I'm for a used one. I'd be for used side by side. I'd be for maybe you decide. I think if you both say, hey, we both want to put the 8000 aside and 529s for the grandkids, you know, we'll get with the parents and figure out what that is. I love that idea. And I like you guys deciding on maybe one really cool thing, whether it's the river cruise or the side by side deal. And then I like another portion of this going towards the house. that way you're kind of you're giving you're saving and you're spending you're doing the three things that you would do with money and you're doing it in a fair what i think is a pretty fair ratio i think okay uh do you like side by side like are you into that whatsoever you're like no yeah i mean i could go with it well kind of i had an accident on one shit i don't like him a lot but um i could go with it but i just don't feel like we have six acres that you really can't travel the whole six on a side by side so i just feel like it's a waste for the little bit of yeah okay you know I don't know I don't know how I would split this my other thought would be

1:40:00Rachel Cruze:do you take one of those big purchases the river cruise or the um side by side and you guys cash flow that cash flow it yeah it would be nice to have a bigger chunk on the mortgage yeah and just to throw a good amount on it early like as early as possible which would be now versus in like you know 10 years or hopefully won't take you 10 years but um I don't know there's a part of me I would cash flow one of the big purchases and you guys decide what to do with that. Yeah, I would not do the side by side and the river cruise. I think you have to decide. Yeah, and then cash flow the other one. You can do them in these baby steps, both of them eventually.

1:40:36Rachel Cruze:But I would just probably pump the brakes on one and you guys decide together. And the kids, yeah, you could do that for eight grand if you wanted, for sure. Yeah, thanks for the call. That's a really good question. It's the one thing that we didn't talk about, which I probably should have mentioned, was the gifted$50 ,000. I wouldn't gift any money anymore, Lisa. Or the borrowed money, I should say. Oh, yes, yes. I wouldn't borrow or lend money anymore. From now on, let's just do gifts. It sounds like this is going to end fine and end well, but in the future, I wouldn't do that. Thanks for the call.

1:41:14That's a good one. Let's go to Brian. He's in Phoenix, Arizona. Hey, Brian, how can we help today? Hey, how are you both doing? And so glad you took my call. Oh, of course. Happy to help. What's going on? Yeah. Cool. So basically, we're in baby step three. Just got there, paid off about$100 ,000 in debt. Amazing. And so start, thank you. So starting to build up that emergency fund. But I got married, or we got married about six months ago. Congratulations. No, anybody. Thank you. Thank you. didn't really tell anybody because we didn't we weren't at the point to like have a wedding and stuff so that's coming up okay we've got a wedding coming up and then of course want to do a honeymoon as well and so my conundrum is can I pay for the wedding and the honeymoon which is going to have you know some upfront costs to get things booked and whatnot while we're in the middle of saving

1:42:08Rachel Cruze:for baby for our emergency fund oh yeah that's a great question okay how much do you guys have do you have any level of an emergency fund right now like any amount of money just for that not for wedding or not for honeymoon yeah I mean just a thousand like I've got 10 grand um but it's kind of earmarked for the wedding and for sure some of the like the venue fees are coming up pretty quick in the next couple months just based on the timing of when it's going to happen yeah for sure um here's what I would say Brian I yeah cash flowing the wedding and then I mean I would want to go somewhere do some level of destination but also only having a thousand dollars in the bank and like going to the Caribbean just makes me nervous I don't know there's a part of me that I'm like I would want maybe to get away to a degree yes and then build up some of that emergency fund and then you guys take a one-year anniversary trip or something you know like the destination doesn't have to be I know we've we make it such a big deal as like a honeymoon and like uh-huh it's a thing and I get that.

1:43:10Rachel Cruze:And I think getting away together is great. I just don't think I would take a big extravagant trip without having money in the bank saved. Yeah. And there's two parts of this. So, and I might be saying this wrong. I got married 18 years ago, so things have changed. But what if you, it's almost like, you know, that you're going to get money from the honeymoon, like from the wedding. What if you did a trip, but it's just not like the day after the wedding, right? Like, cause you know, you're going to have money come in. I know a lot of people when they do their registry, they have like the little honey fund.

1:43:41And so you can give your gift to the honeymoon fund. And then that money's there for you to then take the trip that you want to take, even if it's you planning it. Do you see what I'm saying? How much do you guys make a year

1:43:52Rachel Cruze:together? Yeah, I do. I do see what you're saying. And I actually have kind of a caveat to what you guys are saying, but I agree with that. And it makes me nervous as well. I make I make 160. I'm the breadwinner. That's great. I make 160 a year. I've actually been like door dashing too recently just to get like an extra thousand bucks a month. Why doesn't she work? Here's some, she's in between right now. She was, we were running like a dance studio. So we had like a dance business going, but it started kind of wearing us out in like late nights and stuff. And so she's going to go back to doing hair.

1:44:24She has her cosmetology license. So she's getting that transfer over from the state she moved in. And so that we'll get that additional income. Now, here's another thing to add. I guess I maybe should have added it in the beginning. So at the rate I'm saving, I will, my plans, like forecasting this, I will have the emergency fund saved up for by the time we have the wedding. It's just that right now I have to like, I have to put all this money out, right? I've got the 10 grand that I've got saved is going to go out the door next month. And then I'm going to have to book. Okay, I hear you. We're going to do like a Mediterranean cruise in Europe is the plan.

1:44:59Rachel Cruze:Got it. amazing okay great great so yes keep at it let's just cross our fingers we don't lose a job and uh i think you're good yeah if you're if you're earmarking it sounds like you have a plan and so yes you could be putting money towards the wedding and honeymoon while also simultaneously saving for the emergency funds emergency fund will be full by the time the wedding and honeymoon get here so you're good to go okay great plan

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1:46:49Rachel Cruze:Today's question comes from Sarah in New Jersey. I am$70 ,000 in debt. I used to work full time and we lived off my income, except for$700 my husband gave me monthly for rent. My husband is extremely disciplined. He has a high paying job and has been saving for a down payment while I have been living paycheck to paycheck. Our finances are separated. Yeah, sounds like it. And I was laid off last year and have been working part time to pay for child care and my debt. I am always in the negative in my account and I can't keep up. We have our dream house in our grasp, but I don't know if we can make it work.

1:47:29Rachel Cruze:I am using every dollar to cut expenses and has sold a bunch of stuff to pay down debt. I don't want my husband to lose his dream house because of me. I really want to know from an expert if we can make this work. I'm so sad by this. Yeah. You know? I know. Okay, so Sarah, I mean, can you make it work? I mean, you can, but it will take you on a road that continues to feel this way of you being stressed out financially, him being disciplined and doing his own thing, and you guys are completely on two separate planets. It's not even like, oh, we both make the same. it's like socially he's here and you're here like what do you like classes like you're in a different class what do you do with that i mean yeah sarah this is not a healthy outlook and habits around having a healthy marriage it's not and so um i don't know if there's something on your end that he's seeing that he doesn't trust i can't i don't know what his take is right but i think you guys need to sit down together and say, hey, if we have a dream, it's our dream house is what you guys are saying.

1:48:49Rachel Cruze:We have a dream to get this together. How can we most efficiently get this, what we want together? And the most efficient way is to say, hey, all the chips are on the table and we're going to figure this out together. But that would mean not buying a house right now because y 'all have debt. So no, you can't get the dream house now. But if you continue your way, I guess he could with his salary do it but I would not advise to keep doing what you've been doing because you guys are going to keep getting what you've been getting which just feels so so separate I just can't imagine I mean and this is this is I'm not intending to sound judgmental at all but I there's a lot missing from this that we'll never know because she didn't call in but I I can't imagine a world where let's just pretend, you know, Sam Warshaw was making a bunch more money and I was not making.

1:49:43And, and you're living paycheck. I'm living the paycheck page. And he's just watching it happen. Like you do know what I mean? He's watching me struggle and he's watching me stress out about this and him not responding to that.

1:49:57Rachel Cruze:And is he not paying for childcare either? Are you going not 50, 50 people? Cause she's saying I have to pay for childcare. Yeah. Yeah, yeah, I there's something about that for me that just out of marriage respect and care and love level is just off. Yes, that a husband would sit there and watch his wife. Yeah. Be in that. Yes. Yeah. Yep. And again, maybe there's something on your end that you're not telling us, Sarah, why he's doing this. I don't know. That's a great. Yeah, Jade, I'm with you on that. Yeah. So important to be on the same page. Oh, goodness gracious. Let's go to Ian in Portland, Oregon.

1:50:33Ian, thank you for the call. How can we help today? I live kind of in a multi-generational situation. We have five acres, and it's me, my sister, and parents. And I was wondering, I recently started a new job, making about$1 ,400 a week. Currently, no debt, anything, cars paid off. but in trying to figure out how to I've had credit cards before so didn't go well so I don't use credit just trying to figure out where to go from here to get out on my own and yeah and start building to be able to retire by 55 if I wanted to okay well let's let's take the first

1:51:22Rachel Cruze:step of moving out of your parents I think that's a great first step so we would say that your rent or mortgage should be no more than 25 % of your take-home pay per month. So, you know, we're looking at you for, you know, probably around, what,$1 ,500-ish? Can you get an apartment in your area for that? I could. Okay. I'm not ready. I don't want to immediately move out because I don't need to. I'm more than welcome. It was set up this way so that I'd be able to live there until I'm ready to buy something. Okay, well, how old are you, Ian? Currently 35. And 20 has kind of messed things up. But you don't think it's time?

1:52:09It's fine.

1:52:12Rachel Cruze:Ian, Ian, Ian. Yes? You need to move out. You're a 35-year-old man. I don't care if mommy says that you can stay as long as you want. You're 35. No, no, that's not what I'm saying. that I'm saying my personal, I want within the next six months to a year to be out. And we're saying, why wouldn't you go? We're saying like six weeks. Like, why don't you go? Yeah, instantly. Yeah, go, go. Because, and I see, you're wanting, it sounds like, let me try to get in here. It sounds like you're wanting the perfect scenario of I leave when I'm able to buy a house. That's what it sounds like. And we're saying the conditions don't have to be perfectly favorable for you to leave.

1:52:52You could leave as soon as you find an apartment, which could really be in three or four weeks or three days you know yeah true and it and you should because good for you because let's let's we're we're your buddies like we're your friend that you sit down and they tell you the gosh darn truth all right so we're gonna tell you the truth is you should have done this a long long time ago that's why we're pushing you to do it now and there's nothing stopping you we see no reason that you shouldn't do this immediately for you not for us

1:53:21Rachel Cruze:for you yeah this is a dignity play here and forget the the money side like this is for you like this is this is good for you to be out on your own i mean are you dating not currently because you know yeah yeah we do know so there's another reason we want love for ian and and jade almost dumped sam warshaw because his mom was paying for a cell phone let alone living with them so yeah you yeah i would uh yeah ian let's get out let's get out let's get an apartment the world is your oyster your parents are going to be heartbroken because they've set this whole scenario up it sounds like it's going to be a big conversation is it or are they going to be great being like are they going to cheer you on or are they going to cry uh it would be definitely a difficult conversation yes yes which is another reason why we need to it's it's like a sticky web like the longer you stay in it the harder it is to get out of it because everybody's pulling you back and there's probably some real i'm going to just say it too ian i don't know some relational codependence probably going on i mean there's some stuff there so um yes as your two friends if we were sitting down and talking to you in person this is exactly what i'd say to you i'd say ian come on man you can do this you can do this you can do this so yeah i would get out a hundred percent and start renting uh save up for a down payment on a home and uh i know you said you have no debt which is amazing you're not using credit cards it's so good so good get some cash you know for a um to have an emergency fund and i think kind of just yeah feel how that feels to pull up to your own parking spot out of the apartment and i don't know there's just something really great about that it's freedom you you get to see who you are in life.

1:55:11Rachel Cruze:Yes, without zero dependent. There's like not a safety net there. Like you got to stand on your own. And there's something about that that is so good. So good for people. And so if you want to move home for, not you, Ian, sorry, but America, if you want to move home for a season because there's something, like you graduated college and you need to move home for a few months while you find your first child. I don't know. There's times, what? I'm not black and white about that. Yeah, yeah, sure. Me neither. But when we're 35, you got to go. You need to fly and be free. I don't know why I cringed to quote Dave but I'll quote him because he said an eagle that doesn't leave the nest eventually becomes a turkey and we don't want that for you, Ian you're a good man and those dating apps are going to do wonders for you knowing that you're out on your own yes

1:56:09you Thank you.

1:56:40And then Dolly Parton, love her, said, find out who you are and do it on purpose. Oh, I love that. I love it. You know, she collaborated with Beyonce on a tune on Cowboy Carter.

1:56:53Rachel Cruze:I don't think I knew that. Yeah, she did too. Did she play it at the concert? Yes. Yes. Yeah. Two tunes. They're really good. Anyway, love Dolly. Moving on. Thomas in Myrtle Beach, South Carolina. What's going on, Thomas? So I'm currently a student at college. I got out of state and I was just wondering, uh, the best way to like tackle these student loans when I graduate, by the time I'm done, it'll be around 45 ,000. Okay. Um, so you're current, you're going to continue to take the student loans. Uh, yeah, it's, it's, uh, it's about the only way that, um, I'm pretty sure for out of state, they required it for this school.

1:57:33I have no idea, but no student loans are never a requirement. They're definitely a choice. I'm just wondering, what year did you say you're in? I'm third year, or fourth year, sorry. Oh, you're already fourth year. Okay, so it's kind of like the dean's been done. It's done. Okay. So what's your major in? And tell us what you've done research on, on what you think you'll earn when you hit the market. So I'm doing cybersecurity, and I have an internship lined up with this company that by the time I complete school, I'll work there for about 130. And I think the take home is like 92, 93. Good for you.

1:58:11Rachel Cruze:Good. Pay it off in a year, Thomas. That's that. Work a little extra, live on 50 and pay it off. Yeah. And decide, by the way, that you're not going to go back into debt again. You know, use this as a learning experience. Rachel and I, if you had called us four years ago, we would have told you not to go into debt for school. You're here now. You can pay it off. And Tom, sorry. And live like you're a college student, even when you're not in college. So this first year, making 130 grand out of college is amazing. You're going to feel like you hit the freaking lottery. Don't feel that, though. Feel nothing.

1:58:48Rachel Cruze:Have no emotion towards the money. Be numb inside, Thomas. Be numb inside and pay off the debt. Live still like you. Live with roommates. I mean, like, live like you are a college student for one year. Get this cleaned up. and then holy crap you're gonna make 130 000 that's right with no debt year two he's probably and you'll probably get a raise you know i mean like so just please please sacrifice as early and as quickly as possible don't drag this out don't go buy a new car like don't do it yeah because the tendency he sounds like a bro too thomas you hear him i don't know i feel like thomas is good i think you can get some like yeah live with your roommates eat nothing but crappy fast food for a year.

1:59:33Rachel Cruze:No, don't do that. Ah, see, I had Jade's organic, healthy lifestyle. Rachel's right. The tendency, the tendency is going to be, cause this is, here's what's going to happen. You're going to get your payment and you're going to go, oh, it's only a couple hundred bucks a month. That's no big deal. I can keep that around forever. Please. Rachel is 100 % right. Don't fall into the trap. Ooh, good call. And 45 ,000. That's good. That's doable. You can do this. Yeah, he can do it. If it's 145, we talk about that. That would be a little bit of a longer journey. 100. Pay it off quick, Thomas. All right.

2:00:06Speaking of Thomas, we now have Tom in New Jersey. What's going on, Tom? How can we help? Hey, guys. How are you doing? Thanks for taking the call. You bet. Real quick question. Actually, two questions for you. So I am pretty much debt free. I have a few thousand dollars left on a credit card. So I'm just about at the the baby step two and then i plan on moving on i kind of found you guys a few weeks ago and uh before that i was kind of wandering aimlessly just oh awesome well good for you you made progress in a few weeks a little bit of a debt but um two questions for you so i got on the every budget app and uh every dollar app sorry and um i got into splitting everything up And mortgage payments being a quarter of your income.

2:00:55My mortgage payment is just over$1 ,500 a month, just a mortgage principal and interest. And then I have my taxes bundled with it. So I started freaking out and I was like, oh, crap, this is way over a quarter. But are you guys including taxes escrowed in with the mortgage as part of your 25 % or is that over? Taxes, fees, HOA, everything. How much do you make a month, Thomas? Okay. Take-home is about$7 ,200 plus a little bit when I can get the overtime. Now, are you doing any investing? Yes. That brings me to the second part of my question. I do have a Roth IRA that's worth about $55 right now that I have been putting into.

2:01:44I also do blue-collar work. I have a pension and annuity uh which is somewhere north of 200 so um so i was kind of wondering you can add those back

2:01:56Rachel Cruze:in so any retirements add back into that 7200 so would that bump you up to what probably close to 78 8 000 i guess you don't you don't have a 401k do you total budget i do not know well it's it's It's what you take home. You can take out, but don't include things like investing or insurance. It's just minus your taxes. That's it. So your take-home pay. And then tell us what your mortgage is with HOAs, fees, insurance, all of that in. What is that? All of that added in with all the fees. insurance is uh 25 25 40 so you're a little i mean if if your take home really is 8 000 you're a little over but i think that it's survivable like it's i mean it's 500 bucks over i think that for what you're earning and i threw out 8 000 you did originally say 7 200 but i'm adding back in insurance you said you're putting some money into investing they're taking out money for a pension like all of that so i think i don't know that's a guesstimate but you look at your actual numbers and the thing is too I would not make yeah I wouldn't right now I wouldn't change your situation by trying to move houses and all of it for 500 bucks because also you're going to probably get a raise you'll probably be making more here in the next two three four years which will kind of equal it out which is great yeah so you're not you're not too far off yeah that's a good call you guys have you guys have one more second yeah of course when it does get up to um past uh building the emergency fund for three to six months to babysit for investing when I do have a pension and an IRA and an annuity that is contributed into from the union.

2:03:48What would I do with investing that has a 15 percent goal? Add those into the 15 percent? Partially. So we would usually count the pension as half. So let's say the pension accounts for 10 percent of your 15 percent amount. count yeah count it as five like count it as half simply because you don't have the same amount of control over the investments you might not i mean you and because of that the rate of return might not be as great we really don't know um what about this annuity business do you have to do that or can you put that money elsewhere um no unfortunately it is all bundled into uh into the package that comes in the union okay it's already bartered for so yeah so i would count part of that too

2:04:31Rachel Cruze:Half of that as well. Take 50 % of that to the 15%. So basically I would be putting 5 % into an additional investment. Yes, if that's what it calculates out to. Okay. Yeah. Good question. Good call. All right. Thanks, Tom. Appreciate that. Thanks, Aliyah. Thanks, Aliyah. Oh, I'm sorry. I didn't mean to cut you off. My finger moved too quickly for your voice. Good question. Well, and, you know, with the 25%, we say, again, it's, yeah, I mean, as hard and fast as you can do it, but knowing that life is going to change. And if you're already in a housing situation and it's just right above that, your income ends up changing too, which changes the percentages.

2:05:15Rachel Cruze:So just always remember that. But then, yeah, if it's eaten up 50, 60 % of your income, you got to get out. You're not going to be able to survive. So there's some bigger changes, yeah, that would have to occur if that was the situation. but there's also part of that where you know the rule of thumb is a rule of thumb but it's like if you're if your income is a lot lower you're gonna feel that 30 a lot more a lot more than the person who is earning more money you know so in his case i think yeah it being above he can make it work we believe in you tom all right that does it for this ramsey show thanks for hanging out with us we'll see you next time

2:06:01Thank you.