Discipline With Money Leads To More Control

28:03Okay, like let me start by saying that. That's what we suggest. That's what we would tell most folks to do because most folks don't have the money to pay outright for cash, which is technically the best way you could buy a house. Okay, so I want to say there's nothing wrong with a mortgage. but in your case, I kind of feel like it might feel like taking a step back. You tell me if I'm wrong. No, for sure. And that's kind of, so my husband and I are kind of on two pages. My husband would like to, yeah, save up the cash, continue maxing out our 401ks and just, you know, slowly build up our cash.

28:40And then, you know, a year or so before we are estimated to have that cash, kind of start that building process. Yeah. What's the timeline? What do you want to have it done by? So, like, he says, like, 2035. So that's, like, nine more years. Oh. My concern, yeah. So my concern, though, this is where the discussion comes into play. So the current home we're in that's worth the 170, the 180, is a three-bedroom, one-bath. We have no children at the moment, but we're hoping to start a family soon. Okay. And the kitchen's quite small. We have one bathroom. And so, I mean, like, I know it's doable, but my concern is I work from home and also I work part side from home.

29:25I hear where you're going, Crystal, but here's the thing. We're just setting up an idea, a plan today. You can always reassess it, right? You can always, because the truth is there is no baby yet. There's no inconvenience yet. It hasn't caused you a problem working from home yet. But so what I think you can do is look at this and go, OK, let's set the plan first of what our ideal situation is and what the smartest play forward is. Then we can start to factor in, OK, here's some things that might cause that to affect our timeline. And then you can start making contingencies for that. So what I would say is, OK,$550 ,000 is what we're spending.

30:04We've got a nine-year horizon. Are you OK with nine years or are you thinking more like five years? I'm thinking closer to five years, but I just don't think we're going to be able to have like the 100 % complete amount of cash. I think if we probably sold the current home we're in because we have the cash, most of it at least. And I like that for you. I think you run out both of these scenarios in your mind and with your husband, Crystal. I would do a nine-year play and I would do a five-year play. Obviously, the five-year play would cause you to sell the current house that you were going to use for a rental.

30:37and then I would say, well, what happens if being in this house with a kid does start to pose a problem? Then maybe instead of taking out a mortgage for, you know,$400 ,000, you're only taking out a loan for$150 ,000. Do you see what I'm saying? So you have options. This plan can morph over time, but I want you to start with a plan and start with an end in mind, and then you can make changes from there.

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32:38Guys, we love hearing people's stories about how they're winning with money, and we have an encouraging review about our EveryDollar budgeting app that I want to read to you. They said, hey, this app allows me to keep my budget and my goals organized. I love the projection on when we will be debt free and my estimated net worth. And it gives you something to work towards and gives you a light at the end of the tunnel. Man, that's great to hear. We really love that, guys. Really good things are happening when you're intentional with your money. You get to live like no one else so that later you can live and give like no one else.

33:09So make sure you start every dollar for free today in the App Store or on Google Play. Love that. While we're at it, let's get to our Ramsey Show question of the day. that's brought to you by Y-Refi. Defaulted private student loans can leave you feeling stuck and overwhelmed, but Y-Refi helps you explore refinancing options with a low fixed rate and a payment based on what you can actually afford. Visit Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Remember, may not be available in all states. All right, today's question comes from Denise in South Carolina, and it's a good one.

33:43Denise writes, I'm 76 and I have two children, a daughter that's 45 and a son who's 47. My will divides my assets equally, which is how I want it to be structured. My daughter is and always has been irresponsible with money. I'm now considering putting her share, about$500 ,000, in a trust to provide an income for her without giving her access to the principal. Is this the best way to provide for her or should I just let her have the same payout my son will get and let her blow it all on concert t-shirts? Number one, don't hate on the concert t-shirts. I know. I've got my own opinions on this.

34:20What do you think, Jade? I think that it's her money, meaning it's the 76-year-old. It's Denise's money. And I think she knows her children, and I think she gets to decide how she's going to divvy it up. And if she has discerned that one of her children is responsible with money and can handle it being dispersed to them and that the other needs a little bit more guardrails, I think that that's her choice to make. yeah you get to do what you want with your money um because you don't want it to be harmful right right and the challenge here is i've gotten this question before and someone's like my son is an alcoholic or my daughter's struggle with drug abuse on right and this is one i just don't like how she spends her money she buys concert t-shirts and whatever and i'm sure i know she's playing but um you get to do whatever you want with your money and that means if you're going to take that responsibility, you have to take responsibility for being honest about what your plans are with your money before you pass away.

35:24And that means you have to be responsible for your daughter getting mad at you and not liking you. Yeah. Don't let this be a surprise from beyond the grave. Yes. Otherwise your son, who I'm assuming is responsible, gets all the blowback here. Mom's always treated you different. And so your refusal to have this hard conversation about what you're doing with the money and how you're structuring it will make in concrete that your son and daughter will never have a relationship either. Don't do that to anybody. And so if you're going to have the courage to say, this is my money, I'm going to spend it how I want to.

35:58Great. I love that. And that means have the courage to do the relational hard thing, which is tell the truth. I like the idea of saying, here's what I want this money to go to. and if you want to put it all in a trust and say I'll pay off both of your mortgages I will like put this in retirement I mean in accounts for kids your kids college for my grandkids college I like that but again it's your money do what you want to do with it all right I think that settles it I like that response let's go to Alex who's in Tampa Florida Alex how can we help out today yeah thank you guys so much for taking my call no worries how can we help yeah So me and my wife are expecting our first baby in the middle of June.

36:41So pretty soon here. And we are currently on baby steps five and six. And I just had a question as to what the best way to manage handling both of those steps are while being proactive with both, but putting one in front of the other. We're definitely trying to get the house paid off soon, but also want to be able to set our son up for a good life. Yeah. I mean, obviously, for those listening, baby steps four, five, and six are to be done simultaneously. So baby step four, you're investing 15 % of your gross income every single month when you get it. At the same time, you're also putting aside a designated amount, whatever you decide, for furthering your kid's education.

37:25And that could be in an ESA. That could be in a 529. That could be you just throw some money in a brokerage account. It's up to you. And then also simultaneously, you're denoting an amount that you're going to put extra on your mortgage. And again, with that, you get to decide how much and you get to decide the frequency on which you apply that money. And it doesn't always have to be the same. I like patterns. So, you know, I like to set up a reoccurring pattern. But Alex, for you, you can do this the way you want. So are you telling me that – tell me right now what the plan is and how you're thinking about changing it.

38:00Yeah. So I mean, I think the plan is to just put obviously, you know, an extra like twenty five hundred dollars towards the mortgage each month. And then, you know, probably, you know, a few hundred dollars every month towards like a five twenty nine plan. I love that. I love that. Why does that bother you? What are you concerned? There won't be enough money for education. yeah i think coming up with the amount to do um each month for like a 529 or for you know um the baby in general is it's kind of a hard thing we've been trying to come up with like a number and i think that's one one area we've been getting stuck with i mean for college yeah yeah just just take a million dollars and know that will probably cover semester one and books right like yeah who knows what it will be in 20 years, right?

38:49Or 18 years. There's some projections that you could run if you wanted to get super nerdy. But to John's point, it's still extremely, I mean, it's unknown, right? All of that's a big guess. But you could run out some projections and say, my kid's going to go to college. And I don't know, I'm not going to do the math. But in 2040, what will the cost of tuition be then? Right? You could do some things like that and run it backwards. But then there's also the variables of you might have kids that aren't cut out for college or they want to do trades or they start their own business when they're 19 or they started implanting chips in our head in a few years.

39:22We've all been beamed up. Like there's a lot of things that could happen by then. So I think what you're doing, let me just say, I think what you're doing right now is working really well. And I think you continue to ride that train. And unless you look up and you go, Oh my gosh, it looks like he's looking like the type of kid who's going to go to college. Let's amp it up a little bit, right? Whatever the plan is, you can always make changes to that plan. And I think that's the biggest part of this question. I don't know about you, John, but I feel like the biggest part of college, more so than having the amount set, I think conversations about expectations trump dollar amounts any day.

40:05It does. As a planner who lived inside the college system, I came up with a number that I wanted to try to hit. And then I, regardless of what college costs are going to be, this is the number I can come up with. And then I, my son's just turned 16. He's a sophomore. We had big conversation and we have conversations all the time, but we had big conversation about two months ago. In two years, regardless of what the cost is, this is what we're going to have. And we even went down as far to say, if you get this on your ACT and you get this much scholarship, I'll write you a check for this much when you graduate.

40:44Yeah, incentive. So it's just being honest. And I'm in a fortunate situation. If you're in a situation where that number is$10 ,000, I'll be able to come up with$10 ,000. Tell your kid as early as possible, this is what I will have to contribute. and so if you don't want to pay anything then we're looking at two years free community college and we'll figure out the rest yes you're gonna have to work two jobs etc or like so it's being honest about all of it yeah i i love that and that's exactly right even if you have zero dollars to put aside my parents and i've told this story before i'll tell it again they told me early on they were like hey you don't have a college fund and we're not taking out student loans like we're not taking out parent plus loans and you're not taking out student loans either um and so that told me it was like, okay, I have scholarships.

41:31And they told me they were like, you better be good at sports or you better be smart basically because you're getting scholarships. And that seed was planted and that was what I worked towards. Now I was an idiot and I took out student loans just to pay for life, but I had full rights to college. And so the point here is talk to your kids early and often about whatever the plan is for college. If you don't have money and you know you're not going to have money, set the expectation. Hey, you're going to community college because college choice is the number one factor for being able to go to school and go to college debt-free.

42:01So you're going to community college, you're going to a state college, you're working, you're doing work study, we're not taking out student loans, you're getting scholarships. This is the way it's going to be done. And if you do that, they're going to then morph their life to go down that path as well.

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43:45Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. alongside the incomparable, the fabulous, the lovely Rachel Cruz. I'm Ken Coleman. So excited that you've joined us here on the Ramsey Show today. And some of you are going... We are not Jade. We're not. What happened to Jade and John? And I have great news. They're both healthy. They're right out here to my left in the lobby of Ramsey Solutions. We got a camera on them so that the audience who's been watching are going to watch. Oh, there they are. There they are. They're okay. They're safe. They're sound. And Rachel and I...

44:19We should have had them in here. We should. But Rachel and I just, I mean, about an hour or so ago landed from Los Angeles. Yes. We had an event last night. Yeah. And in Seal Beach, we learned that. Yeah, don't say LA. Seal Beach. Seal Beach. Yeah, close to Anaheim. But had an event there last night. Awesome crowd. So fun. Phenomenal. It was kind of our last tour stop of doing Ramsey Show Live, which was so fun. And yeah, we got up early, early, early and landed and we're back in the studio. And because we made the efforts and the intentional decision to do that, because we have some bittersweet news to share with our audience, Ken.

45:00We do. We do. So there's no other way to say it than just to say it. But today, this show will be the last show that I host of The Ramsey Show because my season at Ramsey is over, and it's been a phenomenal season. And let me just be very clear. I am doing what I have coached people for many, many years to do. When an opportunity comes to you, you should listen, and then you should weigh it. and you should weigh it based on, is this something that I believe I have the talent to do? Is this something that I can enjoy? Will I love this work? And then finally, does it create a result that I care about?

45:43Can I measure all of those things and say, okay, this is something. And then you have to ask, is this a challenge that will push me? Will it push me in ways I haven't been pushed before? And what's on the other side of that? And without getting all the details because of right now I cannot get into details. And it doesn't matter. But stepping in a completely different lane. Yeah. Stepping into work that is an extension of what I've done, but no longer in a public personality role. Yeah. And so here we are. And I want to say, I had to tell Dave a couple weeks ago, and it was such a sweet time. We spent a couple hours together.

46:23And I told Dave, and I want the audience to hear this, this opportunity that I'm so blessed to take would not happen if it wasn't for Dave believing in me. And that's huge. And we've had so much fun, and we've helped so many people. And so as we began to discuss, okay, what does that look like? Dave and his grace and his goodness said, finish. Finish strong. And so here we are. yeah and so we flew back which is so weird it's very weird a couple of weeks since we've known yeah but today's uh and today yes and it is it is so it's so bittersweet yeah um because from the bottom of our hearts i know our team and you know john and jade are oh my gosh i don't want to get i've i don't yeah let me see hold on i know hold on one second um Yeah.

47:16Everyone. Jeez, now you're doing it. No, I was going to say, though, everyone is so happy for you. Thanks. We really are, Kent. We are cheering for you. You're going to kill it. But we're going to miss you. How am I supposed to talk? I know. It's, Ken Coleman is one of these people, y 'all, that he's, like, we've all said it. George, John, and Jade, and I, and Ken, we've been on a text thread for the last couple years, obviously. And the word that keeps coming up consistently, Ken, for you is the glue. We say Ken is our glue. Every personality loves hosting with Ken, this show specifically. On our schedules, when you get the email for the week and you're like, okay, who am I hosting with?

47:59We love hosting with each other, obviously. We all love each other. But when it's Ken, it's safe. You're just like, oh, okay, good. He's like your big brother. And you're like, okay. when we're on stage together. He can have chemistry with anybody on stage. He's a masterful interviewer, which is what he did even before he stepped into a Ramsey personality role. He's so good at connecting with people. And that is a gift, y 'all. If you have been on stage with people that are awkward and hard to talk to, it's awkward and hard to talk to. John's raising his hand out there. No, but Ken can bring the goodness out of anyone that he is with.

48:33And the fact that we've gotten to stand and sit beside him for so many years it's gonna yeah there's gonna be a whole and we're gonna we're dearly gonna miss you well I never had a sister always one and one true story I was nine years old one day I said to my dad I really want a sister and I've got two Rachel we've known each other a long time and the other one is out there in the lobby Jade Orshoff I mean, just like, I love these two. They're so, so great. Great women, great friends. And, you know, it's, geez, I didn't know you were going to do this. I didn't know I was going to cry either. We're just tired.

49:20So here we are. We got up at 4 a.m. this morning. We don't even know who we are. I do want to say this to the audience because we're going to continue the show. We're going to coach people. It's one of the loves of my life outside of my family and my friends is to meet people where they are. And it is the highest honor to have someone open up to you. You guys know. To trust you in a public setting. My goodness. and the privilege to just be a small little encouragement to people is, man, and to get paid for it. And it's just been such a high honor. And that's the honor to Dave and I. And I'll tell you, Dave and I cried, and then I went and hugged Miss Sharon.

50:23You should tell them what actually... Should I tell him that story? Yeah, do it, because that was funny. Oh, this will be good. Now we can laugh together. Yeah, yeah, yeah. This is good. So I spent two hours a day, and we just walked through it all. And then I said, I got up, we hugged, and I said, can I go tell Miss Sharon? And he said, of course. And so he walks me into the kitchen, opens up the door from his, he's got this fabulous smoking room above his garage. And we smell like an ashtray. We were smoking cigars. He says, Sharon, Ken wants to talk to you. And she said, oh, I'm in my house coat, Ken.

51:02And I love that she called it a house coat, by the way. It is a house coat. That's a Southern thing right there. It's not a robe. It's a house coat. And I said to her, I go, let me see that, because I think that's the robe that Stacey and I bought you. And sure enough, it was. Yeah, Ken bought Sharon this thing. I gifted Sharon and Dave my favorite robe. Of course, that's what one does for friends. And she had it on. And she did. And I was like, how serendipitous it was. So I came over to her and we had a sweet moment and got to give her a hug. And she was just so sweet and so kind. And so this is, again, it's really, really bittersweet.

51:34And I'll say this, folks, sometimes you get opportunities you don't know what God's completely up to. And I don't know how it's going to all play out. But, you know, it's time. It's time to walk through it. So to all of you who've said kind things, emailed, so many of our team are out there. They're making me cry. This is crazy. I love all of y 'all. And we're going to take a quick break, try to get ourselves together and then do the thing that we love to do, which is meet you where you are today and coach you up.

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54:00All right, we're going to go to Hunter who's joining us now in Chattanooga. Hunter, how can we help you today? How are you guys? We're doing well. What's going on? so i'm a bit conflicted on what i should do as far as paying off my truck you know i've been listening to y 'all since right after i bought it and i know y 'all say to attack attack attack at the debt but my uncle who is like another father figure to me really he says that he thinks i should wait for at least a year or two to build some credit before i completely pay it off Oh, yeah. So keep the debt around so your credit score stays somewhat at a good score is what he's telling you.

54:45Right. Okay. Do you know how a credit score is calculated, Hunter? And do you know why you use it? Why you would need a credit score? I mean, I know it helps with like interest rates, I feel like, on loans, but I don't know. I'm not a genius. I'm 20, so I don't know everything, right? Totally. Yeah. So the way mathematically your credit score is calculated, it has to do all with debt. So it's all the different types of debt you have, how you pay on those debts monthly, if it's on time, if it's not. I mean, all of it is centered around debt because you're right. They use that score when you go into more debt.

55:23So our line of thinking here at Ramsey is to live a debt-free life, to not have debt. So you don't need loans. You don't need to get a personal loan or another car loan. You don't need debt because you live on less than you make. You have a plan. And that is how you live your life with money is debt-free. Now, one hang-up people have is a mortgage. And a mortgage is the one type of debt we won't yell at you for. But you can do manual underwriting. So you can actually still get a mortgage with a credit score that is undetermined. So people that don't have a credit score, you can still get a mortgage.

55:56So all of that to say, Hunter, if you are a person that says, I don't want debt, you know, I'm not going to be going into debt, then you don't need a credit score. You know, my credit score is undetermined. Now, if you have a mortgage, obviously that will still come into play. but all that to say yeah having a credit score is kind of a moot point if you're not going to live with debt but if you want to live with debt and you know you're going to be getting loans in the future then maybe you would need it but how are you wanting to live Hunter not what your uncle says and not what other people say how do you want to live with your money that was my thought I didn't you know I've been listening to y 'all like I said since after I bought the truck so I definitely don't want that I don't like it and I was Also going to ask, how would y 'all suggest paying it off?

56:48Because I'm at just over$9 ,000 left on it, and I have probably$13 ,000-ish total. Great. Is that your only debt? Yeah, that's the only debt I owe. Nice. Yeah, well, we would tell you to pay it off today when you hang up, because you're still going to have money left over in savings, right? And so that would be completing baby step two, since it's your only debt. And now, you know, you're on your way to baby step three completion. And, you know, there's just no waiting on it since you've got the cash. What a wonderful thing to be able to do, right? You can just get it out of your life right now.

57:26What's your car payment every month? I want to say it's$271. So now that's$271 raise that you just gave yourself. Yep. So, yeah, I think you can respect your uncle, and I'm sure he is a good man. But when it comes to money, we just have different philosophies than your uncle. So you'll have to choose under which one you want to choose, a debt-free life? Or are you going to keep a debt around to keep a credit score to stay in the business in the cycle of debt? And because he's a father figure, I would tell you, you can honor him. You can say, hey, uncle, this is what I'm going to do. And since you guys are so close, he's going to weigh in on it.

58:07and you can honor him and say, hey, here's why I'm going to do this. And here's why I don't need a credit score. And you can explain that to him. And I think all he wants is the best for you. And it doesn't sound like he's not going to be supportive. It's just that he has influence over you. And so the way to do this is to just honor him, explain it the way Rachel just laid it out in your words. And I think he'll be fine. And more importantly, you're going to be debt-free and a lot more cash in your pocket as you start to make your way through life. How old are you? just 20 oh man you're 20 oh yeah hunter that this is a this is a lesson and i will tell you so many people listening i'm watching right now in their 40s 50s 30s are like i wish i had done this at 20 if you can just avoid debt hunter and you just and you have a plan you start saving and investing and and start working the baby steps i'm telling you you will be a multi-millionaire when you before retirement.

59:05Like it's wild, the numbers that can happen. That's your homework assignment, by the way, Hunter. Go to RamseySolutions.com and click on the investment calculator. Super simple. But you're going to be in that position and just start putting in some numbers, realistic numbers, and watch what Rachel's talking about happen before your very eyes. You're in great shape. Thanks for the call. Let's go to Dotsie. Well, we just left that area of California out there. Oh, there it is. Near Anaheim. Dotsie, how can we help today? Hi. Okay. Sorry, I've been waiting a long time. I'm so excited. So basically, my husband and I got out of debt in February of this year.

59:42One of the reasons we were able to get out of debt is we switched over to CHM Ministries for our health insurance. The only problem is they have a policy that if you are pregnant, your due date has to be after 300 days of being a member. Well, it turns out we're pregnant and our due date is before that time. So they can't cover the pregnancy and birth. And so my question is, how do we cash flow this? because we just got the estimate from our midwives about what the cost would be, and it's$24 ,000, which is not something that I think we can handle. Our due date is in October, so we have six months to kind of come up with a solution.

1:00:29I was thinking home birth. I'm a low-risk pregnancy, thankfully, so I'm thinking home birth, birthing center, something that's not a hospital because that's where the main chunk is coming from. Okay, so just give us a quick update. If you were to not have the baby at a hospital, how much would come out off of that total? Yeah, so I checked one birthing center that I'm actually going to go to a consultation today. That would be around$8 ,600 for the entire thing. Could you guys get$8 ,000, call it$8 ,500 before October? I think so. So, however, it's still with pregnancy. I know Rachel knows this and you have kids, Ken, but with pregnancy, there's always the risk, even with a low risk pregnancy.

1:01:19Oh, yeah, for sure. I would have to be transported to a hospital. And so how do we prepare for that emergency? Yes. Well, what I would say first, Dossie, is we want you and your baby to be safe. So whatever that looks like for you all in a situation is you need to go forward with the safest option, right? Life is the most important thing in this equation over money, okay? So you guys need to make the best decision for you all. But because of your circumstances, you're going to have to know ahead of time, hey, if this happens, plan A, plan B, plan C, here's probably what we're going to owe in medical bills.

1:01:56And it is so difficult because medical bills, you know, a lot of people face that. That is part of their debt snowball. And so what I would say is whatever you can save between now and then and save as much as possible, save over the$8 ,000. I mean, just as much as you can. And then I think my goal would be for you to be healthy, for baby to be healthy. And then we pick up after, you know, everyone goes home and everyone's good. Then we look at our financial situation then. But yeah, that is a hard one. I wasn't sure about that. Yeah. Yeah, because in a situation like that, I love that they went with Christian Healthcare Ministries, but this is one of those deals where life has thrown you a curveball.

1:02:41Yep. And you're going to have to make do on that. And that's tough. Hopefully everything goes well. I love that you've done your research. I had no idea that there were like birthing centers. This is like breaking news to me. Wait, what? You didn't know this, Kim? Well, the way she said it sounds like it's at a strip mall or something. Like a birthing center. Like you just roll into the parking lot and you're the 230. So it's basically like it's not a home birth, not a hospital. It's the middle option that people feel. Is it like a clinic? Yeah. I mean, I think so. I didn't go to a birthing center for, but it's people that don't want to do traditional medicine.

1:03:17I appreciate that. And they want to do a different route. It's more of a natural route, I would say, is the birthing center. is the home birth even less money I guess yeah you're just just at home yeah I mean it's like pioneer woman that's why I'm saying like do the safe option of what you believe in and then you can worry about the money after

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1:05:24All right, we're going to go to Indianapolis where Beth is waiting for us. Beth, how can we help today? Oh, hi. Congratulations, Ken, on your new venture. Thank you. Rachel, I love your show with George. It's really relatable and fun. Oh, thank you, Beth. We should have had a cocktail today, shouldn't we, Beth? This was the day. I know. I'm like, what a day to call in. They're both bawling. I know. I know. I'm going to bring more sadness. I know. We're going to try to, don't bring it up again. I might start crying right now, Beth. We just never know. You never know how it's going to go. Thank you for listening.

1:05:58How can we help? Yeah. Oh, I'm just, I've really started to notice how close retirement is. I'm basically 56 in a couple of days. And I only have$27 ,000 in my 401k currently. and I am just nervous and wondering, you know, if you've had experience with callers who've been in this position and if you followed up with them in 15 years, if they're living comfortably. That would be a good reality show. We should have done that. We should do that going forward. Okay, so Beth, from a financial perspective, how are you financially do you have debt do you still have a mortgage kind of where are you at that's right okay i am on um step two the only that i have is my mortgage um it's 155 k um house value is about 250 270 k okay um and i have a roof loan uh 15k okay uh debt that i really stupidly signed up for a 20-year loan.

1:07:16I just wasn't, I don't know. I just wasn't aware of everything three years ago, and now I am. And I've run some calculators, and I can save about$15 ,000 in interest if I attack it going forward. So that's my plan. Okay, so your$15 ,000 from the roof is really your baby step, too, because we don't count your house. inside of Baby Step 2. So it's really just that$15 ,000 roof. Do you have any other savings besides this$27 ,000 that's in your 401k? No, it's been week to week for my entire adult life. Oh, wow. Wow. Single income. Oh, 66k. So, you know, it's not terrible. I've just been the sole financial provider for a couple of, well, they're not kids anymore.

1:08:13Technically, they're 18 and well, 32. And she did do, I had my daughter in private school, high school, she went to public school K through eight, but it was just a much better fit. So anyway. Yes. Okay. So what I would tell you, Beth, is, yeah, you'll probably still be working, I would say, for the next foreseeable future. Are you in a pretty steady position of your job? Like if you had to work another 10 years, are you in a good spot? Oh, I'm so fortunate. I work from home for a major insurance company. So it's quite secure. Okay, great. How much, so you are paycheck to paycheck, so there's not a lot of margin that you have to throw at this$15 ,000.

1:09:02So that's the first goal I would have for you is to get$1 ,000, put that aside in a high-yield savings account. You can open up with Fairwinds, actually, like there's a smart bundle, And so they have a great high yield savings account in that smart bundle. So Fairwinds is a good spot. You can just put your$1 ,000 over there in that high yield savings. And then we got to figure out, okay, how do we work extra? What expenses can we cut? There may not be a lot to cut. So it's probably going to be from the income side, which actually Ken probably could speak to some of that. But getting your income up and having a goal.

1:09:35I mean, Beth, if you could have a goal to make an extra, I don't know, two grand or something. You know, you just think by the end of this calendar year, if that$15 ,000 is paid off and it's done, then we can really start looking to cash flow and emergency fund and start throwing a ton at retirement because that's going to be huge. But the faster you get out of this$15 ,000 roof loan, the quicker you can get to saving more for retirement in that 401k. One of the things I wanted to know is you said you've been living kind of paycheck to paycheck. And so I'm wondering, is there anything you can cut?

1:10:07And I'm not going to make you list it out for us, but it's more of a general question. Do you feel like you could be tighter or are you as tight as you can be on spending? Well, I personally, for myself as the mom, I'm very frugal. But I do give in quite often to my teenage daughter, especially the first two years of high school. You know, their eyes are big as foster plates for everything they see on social media. But I just finally wised up to myself. And for the past two years, you know, she's pretty much paid for anything. But anyway, since she's 18, just to be honest, once that'll be a huge.

1:10:50So what kind of. OK, so let's just run some quick numbers. You don't have to lock these in. But what kind of margin would you now have? Even if we just said today, you're not other than the basics. How much could you put extra towards the snowball? Well, I'm planning, like, once she's kind of not, once high school tuition is gone and I'm not spending on her, I can probably put$800 to the roof loan monthly. And then after my other expenses, I think I would have about$300 or$500 left. Okay. So let's just say for conversation, okay? And again, you need to do your own exercise on this after the call.

1:11:32But let's just say we came up with$1 ,000 a month. And I think we can find it in those numbers you just gave us. I think so, too. Absolutely. So now all of a sudden that's$12 ,000 a year just on what's coming into you now from your day job. Okay? So now we move into, okay, what can you do? What is your profession? i um i work for a health insurance company um i just review hospital contracts i've actually been with them for since 1998 which is why it's so probably shocking to you that i only have 27 000 in my no no we certainly understand i guess what i'm trying to get at here is is If that's clerical-type work or administrative-type work, could you pick up, to Rachel's point, 15 to 20 hours a week at this stage of your life?

1:12:27You have the freedom because your youngest is 18. Yeah. Extra, extra. So here's where we're going. Could we make, and I'm putting out some general numbers, Beth, that aren't too big so that you can hopefully grasp this. But let's say you made an extra$2 ,000 a month. Okay? Now that's, see, now you're with us, right? So now we're talking$24 ,000 gross on top of$12 ,000 a year. And I just wanted to put real numbers to Rachel's advice because she gave you a wonderful plan. But you're going to have to get super intense because you are 56 or soon to be 56. And so we want to get that nest egg up. And so you want to be in a position where you're throwing a lot of money away.

1:13:09And let's say we get through the loan and now we get to the emergency fund and now we're just straight baby step four where you're just throwing money. You know, how much could you invest? You have to ask yourself, how much could I invest on the other side of those two steps? And now you've got a chance to stack cash for the next 10 years. Yes, and that is my goal. and I do have a couple of applications out for part-time jobs. Oh, good, Beth. Because my life is about to be freed up. It's just going to be a whole new world. And what's crazy, too, is if you keep throwing that extra money and maybe you get a raise with your$66 ,000, all of that, you could have your home paid off in four-ish years, too.

1:13:53And so if that, how much is your mortgage payment a month? Oh, my gosh. Well, it's$1 ,100. And my mortgage would go until I'm 82. two? That does not seem right. Yep. Nope. So we're going to pay, we're going to continue kind of a little bit of this intense, you're gonna have some intense years coming ahead, Beth, because we got to play a little bit of catch up. And so after this, yep, after the roof's gone, funding 15 % of your income into retirement, throwing some at the house, get that house paid off in three to four years if you can. And then you can look up and be like, okay, now I'm going to just like throw everything at this.

1:14:30And then, and I mean, we're throwing years out there, but You do all this in five years, and then you work another five, and you throw more cash at retirement. That's a decade long that can change completely your financial future, Beth, because you're doing something completely different than you ever have. So, yeah, call us back if you need us, Beth. But we're cheering you on, and the numbers are there. It's just going to be kind of the sweat equity, if you will, the hard work to make it happen.

1:15:29All right, folks, buying or selling your home is a big deal. You know that. And there's a lot of clickbait stuff out there that can get you trapped, give you some opinions that are going to hurt you. A lot of headlines that aren't even accurate or up to date. And we're here to make sure that the latest trends are easy to understand. So if you want to know what happened last month, the average 15-year fixed mortgage rate ticked up a bit to 5.56, but still below 6%. Median home prices went up to$415 ,000 last month, which is typical in a spring market. So that gives you an idea of some of the headlines, and we want to make sure you're getting accurate information for the decisions you need to make to learn more about the housing market trends.

1:16:09And you can get free tools that will help you buy or sell. Go to RamseySolutions.com slash market. That's RamseySolutions.com slash market. All right, Lauren is up next in Salt Lake City. Lauren, how can we help you today? Hey, thank you guys for taking my call. So my question is, should I move out of my parents' house when I have debt? Oh, that's a good question. Wow. Tell us more. How much debt? So I, yeah, I'm a real estate agent and I've been a realtor for about three years. This is the first year that I'm consistent. So I'm like making money now and I have about$10 ,500 in credit card debt.

1:16:51I don't have student loans and I've been listening to your guys show for a while. So I started the beginning of the year with 20K in debt. And I know it's a lot because I live with my parents. Nice. Don't charge me rent. And so I calculate all of my numbers. I just have them here for you guys. So right now I have about$11 ,000 cash that sits in my business account just because I don't really know what to do when I get my cash, especially with my job and income. I would say I make around$40 ,000 to$60 ,000 a year, but it's variable. And like I said, this is my first year consistent. How many houses did you sell to achieve that number?

1:17:36I'm just curious. What number? What you made? No, what you made. I know it's your first year. I was just curious how many houses you sell to make that income. Yeah. So I live in Salt Lake City, Utah. Our median home price is$515, and for this year, I'm already at about four houses with one pending. Okay, but what I'm saying is, is that going to put you ahead of what you made last year? Correct, yes. I'm already on track. Last year, my income was all over the place, because I was kind of still working part-time at another job. I worked for a builder, and then I got right back into residential. So now I'm a solo realtor.

1:18:22So from about December to now, I'm only doing real estate. Great. And a modest guess, what do you think you'll sell this year? If you were to project out. Really? Yes. I think I will make around 50. Well, that's also me being like, you know, this is my first year consistent. I'm maybe a little scared, but I'd like to say 50 to 60 ,000 for the year. Okay. Perfect. We just want to know kind of what your income situation is because it's important to how you get out of this and how quickly. Yep. Okay. So you're keeping the$11 ,000 cash you said in my business account. Are there business expenses you have or is this more when you said, because you also said in the same breath, I just don't know what to do with all my cash, so I'm just putting it away.

1:19:07So when you say business account, what are you using this money for when it comes to your business? So you're absolutely right. I just sit in my account and I have like automatic transfers that do my car payment, my phone bill. So you have a car payment. My monthly expenses. You have a car loan? Yes, I do. Okay, how much is the car loan? Yes. So I owe$19 ,000 on my car. My car payment is$380 a month. Okay. So it's not really a business account. It's just your, it's a type of checking that you're living off of, right? Pretty much. Yeah. Yeah. Okay, so if I were you, how old are you, Lauren? I'm 26.

1:19:4626, okay, great. And you've already paid off$10 ,000 in debt already this year in four months. Correct. That's amazing. Okay, well done. Okay, so here's probably what I would do. You have$11 ,000 cash. If you do the Ramsey plan and you do the baby steps, I mean, by today, I would pay off the credit cards because your interest rate, how much is that on the credit cards? Yeah, so my interest rate on my credit card is 27%. Ouch. Yes, be done. Be done because you're paying so much in interest. I would pay that off today, Lauren, and you're going to have$1 ,000, which is going to freak you out, and that's okay because you're making some money.

1:20:29and then I would be okay with you. Ken may have a different opinion. Because of how quickly you have paid off debt, I would be okay with you staying maybe through the summer at your parents and continue that same trajectory and then come fall, even if you still have some on the car loan. Because if you're kind of at that same pace, you'll probably have around$9 ,000 left on your car. I probably still would look to see, hey, let me go rent somewhere because there's just something good about being 26 years old and out on your own. So at some point I would have a deadline to say I'm going to move out.

1:21:06It doesn't have to be tomorrow. And maybe you kind of through the summer. And one reason I'm okay with you staying a little bit longer is because you actually are doing what you said you're going to do, which is to pay off debt. Because a lot of people call in Lauren and they're like, well, I'm living with my parents. We're like, okay, well, how much have you saved or paid off? And they're like, not a ton, maybe like$1 ,000 over three months. And we're like, what are you doing? Like you're supposed to be saving rent and you really are putting your money to something good that's productive, right?

1:21:34It's not just like upping your lifestyle. So because of that sacrifice, I'm okay if you stay a little bit, but I don't want you to stay, I mean, past probably four to five, six months. I agree. Yeah. Lauren, what you don't want to happen is that you fall into this rut of the comfort and it doesn't have the same psychological intensity of being out on your own. And I think you need this right now. I like the safety, but I do agree 100 % with Rachel. And I'd love to know, what do you think the real estate market is like right now, residential homes in that area? Is it cooled? Is it just kind of, you know, moving along on an average pace?

1:22:16Is it above pace? Where is the market? I would say it's an average pace. I don't, obviously, like interest rates are going higher. But in Utah, I'm seeing people get two to three houses under contract a month. So I know our market is active. You know, we do have a really good career base in Utah. So people are making money. Good. Okay. The reason I ask that is you, as a real estate pro who is full time, you can make yourself very, very wealthy. And so, you know, we talk about gazelle intensity on this show all the time, right? And in your case, I want to see you getting mentored by some real estate agents in your area that would be willing to take you under their wing.

1:23:01And you are trying to fill up your pipeline with everything you've got in you. Because if you were to sell five or six houses in one month, what a major infusion of cash that would be. Yes or no? Yeah. Yeah. And then you get that going. And so you could fast forward this entire process and you're only 26. six. So, um, because you're in a decent market, uh, by your own, uh, admission here, uh, I would be working like crazy to sell house list. I mean, I'd get in on every deal I could get in on because every time you get a commission check, you are just moving through the baby steps. And I love that for you.

1:23:40Love that for you. A hundred percent. Yeah. And you're in a great industry. I don't think I mentioned, so I do, I did follow the baby steps. So I have about, I would say like$1 ,600 saved. And that's not on top of the$11 ,000 that I have sitting in that account. So I'm trying to get something in there. I just didn't know what to do with that cash that I have on hand. Yep. That's where I would get out of debt. That's your number one goal right now is to be debt-free. So any money you have. And you have no expenses. Like there's no. That's the good news. You know what I mean? You're not paying rent, utilities, all of that.

1:24:16Now you will eventually. So you need to be thinking through, okay, when you do make that step, you need to do kind of a mock budget before just to know because it'll slow down your debt process, right? It will slow down how much you're putting towards that because you're going to be paying rent and all of that. But that's okay because there is something about this dignity of being 26 and holding yourself, right? And you can, Lauren. You can. You can afford it. so yeah I think if you just make a timeline plan on when you're going to move out put some numbers and then make some big goals like what Ken was saying you can I mean you could go crazy and just say what if I had this crazy goal of selling this what would that look like and put it down on paper

1:25:22Welcome back to The Ramsey Show, coming to you from the Fairwinds Credit Union studio alongside Rachel Cruz. I'm Ken Coleman, thrilled to have you with us. The phone number to jump in, 888-825-5225, 888-825-5225. Daryl is going to start us off in Columbia, Missouri. Daryl, how can we help today? Hey, guys. I've got a question for you. I don't owe – me and my wife have no debt except for our house, and I'm debating on paying off the house. In order to do that, I have our emergency fund that has$22 ,000 in it, and then I have another savings account that has$28 ,000 in it. And I know that doesn't equal up to$70 ,000.

1:26:09Yeah, I'm going to have a few more jobs come in in the next couple months that will get me to that point. And I'm wondering if I should, you know, trade in my savings account to pay off the house. To pay off the mortgage. Well, that's exciting, the fact that this is even a possibility. So how much is left on the house? $70 ,000. $70 ,000. So you're calling us today wanting to know if you can get ahead of this deal when we know in a couple of months that you're going to have it to be able to pay it off. So it's the difference between paying it off today or close to because you don't have a full 70 there.

1:26:43So that's an interesting question. What's going on? You just nervous you're not going to be able to get it done or like what's the equation? Well, OK, so there's a few other things going on. We've been in this house for eight years now. We've actually gone through the process of dividing up my property. and I do plan on building a house, another house on the north part of our property. Along with that, I am also in need of a truck. But at this point, I've just kind of looked at our mortgage. I'm like, man, I've got$70 ,000 left on the mortgage and I've got this much in savings. I'm almost there to paying off the mortgage.

1:27:27I'm just not sure what the right next move for me is. So is the$22 ,000 your fully funded emergency fund or is it the$28 ,000? The$22 ,000. Is that three months or six months? I think that's closer to three months. Okay. Okay. Yeah, I don't know, Rachel. He's just living on the edge. Daryl's just like, let me just— First of all, Daryl, you're doing it right. You know, if I'm you and you need a truck and you've got this additional cash beyond—what kind of truck are you looking to buy? What would the cost be? I'd look at the truck and the cost of$30 ,000. Okay, so you're almost there. Something finally that would be maybe reliable.

1:28:10Okay, what's your truck worth now? Well, if you sold it or traded it in, probably not a ton, but what would it bring? I had an old Suburban that I drove around, and I just sold her for$3 ,000. For three, okay. So you don't have a car right now. I was happy to get rid of her. I love that you affectionately called her. What a gal. What a gal that Suburban's been. Her name is Veronica. I love that. We knew she had a name. I wasn't going to say this until Daryl said this. So we had two Suburbans as the kids were growing up. You probably saw them in the parking lot from time to time here at Ramsey.

1:28:43And the first one was Betsy, the bird. And then we had a, it was kind of silver. And then we went to a black Suburban and we called him Bruce. So I like that Daryl has a name, Veronica, for the... Veronica's gone now. But, Darrell, how are you getting around right now since you sold poor Veronica? I have another small car that I use. Okay. What do you think here? I mean, he's so close to paying the house off, but he needs a car. Yeah. I mean, how bad do you need this truck? Could you wait another six months? Or are you like, no, I need to get it now? I'm on the fence. I'm doing – so I don't really necessarily need a truck for my job that I work at.

1:29:23However, I do have a side job that I do. I'm a professional land surveyor. And so I do use my car. I take all my service and that, and I go, use that. Okay. So if we ran a couple of scenarios and said, let's say that$28 ,000 went to the truck, we're not going to touch the emergency fund. So that's off the table. So you're back now to kind of flat. So between now and in a couple of months, you said you have some jobs coming in. How much will you make off those jobs in the next couple of months? Um, close to, close to 10 ,000. To 10. Okay. Okay. So then you're down to 60 ,000 on the mortgage. And then how much extra, how much extra do you throw at the mortgage every month?

1:30:04We are doing, I'm looking at my wife and I, she's shaking her head. Not much. A couple hundred extra a month. And our mortgage is only, you know, principal and interest is like 670 is the payment. Okay. I think actually we put a thousand in there and you know, the other part of that goes to And what's the financial windfall that you mentioned a few minutes ago that you're expecting in a couple months, which would have gotten you over the 70? How much is that? Do you have an idea? Oh, how much am I planning on making? Yeah, you mentioned that. That was the extra jobs. The extra money you were thinking.

1:30:37Oh, yeah. Was that the$10 ,000? Yeah, that was that extra$10 ,000. Oh, it's just$10 ,000. Okay. All right. I got you. Okay. So that's scenario one, Daryl. you buy the truck and then you take the 10 ,000, throw it at the mortgage and you just kind of keep chipping away at the mortgage. So that's option one. Option two is you get a$20 ,000 truck, throw an extra eight at the house, right? You can change that up a little. Or you throw all 28 and then you'll have the 10. So yeah, you're close to 40 at that point, only$30 ,000 left. So yeah, I mean, there's not really a wrong, I don't think there's a wrong scenario here.

1:31:16I think it's kind of just what you want to do. And we don't say to be intense during paying off your home. So you're okay. Yeah, you're so close. If I needed a car, I'll just tell you what I would do. If I was in your situation, I had the cash for the truck, I'd get the truck. Unless I don't need it. And if you don't need it, to Rachel's point, then again, get it on the other side of paying the mortgage off. But you're in such great shape. What is your wife? Is your wife sitting there? Oh, she's sitting there. That's a good one. What does she want to do? What does she want to do? Well, she's a little, She's a little nervous about paying off the house.

1:31:47Why? Because we have a good interest rate on it. And we're also obviously planning on building another house. I wouldn't worry about the other house. Is the other house for you guys? Yes. I think we'd plan on moving in it and then either renting this out, the one we're in now, or selling it. Now, see, now that changes this conversation a little bit because do you really want to be a landlord? And how much you, you know, I mean, is that really something you want to do? Or would you rather just sell the current house and then go build the new house? Like, what do you want more? Those are good questions.

1:32:27And I don't have answers. Well, that's why you need the answers. In my head, you're jumping ahead. I agree. With that second house. This is a steak dinner, candlelight, maybe a bottle of red. and you two sit down and weigh this out and go, okay, do we want to have the current home we're in as a rental property? Now it becomes obviously real estate investment for you that's cash and you don't owe a dime on it. Or do we want to move quicker into building another house? Do I need the truck now? Lay it all out there and get everybody's opinions in the middle of the table, you and your wife, and then just do the old school pros and cons and come up with the list and then execute on it.

1:33:08Yeah, because the truth is, Daryl, in five years, I think you're going to end up in the same place. I think you're either going to go down this road or this road or down the middle. However you get there, you're going to get there. And so there's not really a bad option here. So yeah, it's kind of whatever you want to do with the 28 ,000. If you want to get the truck, get the truck. If you want to throw out the house. Yeah, but you guys, you and your wife agree on it and say, does this get us to our long-term goals faster or slower? And that may be the difference. Real quick, Rachel, lady to lady, talk to his wife about that interest rate fear she has, what would you tell her?

1:33:41Oh, I would have way less fear not owing anyone anything than having a mortgage payment. So that's my rationale.

1:34:11Hey, good folks. Dr. John Deloney here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what? Ramsey Solutions is hiring. If you're ready to join an amazing team that's all about changing lives and spreading hope, we want to see your application. Right now, we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. Check out all our job postings at RamseySolutions.com slash careers. That's RamseySolutions.com slash careers.

1:34:54Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. Excuse me. And today we're going to break down the most asked questions from this week, Rachel. We had some questions around retirement savings, paying off debt. But the most asked question was around emergency funds. So the main question we got was, where is the best place to store my emergency fund? That's a good question. We get that a lot. You know, and I get this a lot in the social media world, like my DMs. I get a lot of questions about, because we always talk about a high yield savings account is the best place because the money you can get to it if you need it.

1:35:36But also it's making around probably three, four percent, depending on the account versus less than one percent just in a traditional savings account. So a high yield savings account is where it's at. And we love Fairwinds Credit Union. We've been partnering with them and they obviously are the studio sponsor of the show. But they honestly probably have the best deal because they're doing a smart bundle where you get a no-fee checking account. And then you can get up to 10 high-yield savings accounts. So for all the nerdy people, like a George Camel who loves all his different savings accounts for each little thing that he's doing.

1:36:10And you can do up to 10 with Fairwinds. And you get the debit card access. It's such an easy interface. Like their app and everything is great. So that's what Winston and I use. We use Fairwinds. We love them. and that's a great place to put your emergency fund in their high-yield savings account. Love it. So if you'd love to submit your question, go to RamseySolutions.com or click the link in the show notes if you're listening on podcast or watching via YouTube. Let's go to San Diego next where Tom is waiting. Tom, how can we help? Hey, so I have a question. I'm 52. My wife and I are in a pretty good financial position.

1:36:47I recently separated with my company about a year and a half ago and I'm deciding if trying to start my own company over at this age or just go work for someone and take a couple years and be fine. You know, coming from running a small business, it's tough to sell and get out. So I don't know if I want to grow something like that. What would you grow? Do you know what you'd start? So I'm a plumber by trade and a mechanical and builder. So it would be in that field, which I have about 37 years of experience in. I love that. And my guess is 37 years of working for a good company, right? Well, actually 17 years of it was being partners in a company where I was the minority partner and we had disagreements on where the company was going and I wound up this odd man out.

1:37:35Well, but I'm guessing that you had eyes on all the books. You have a pretty good idea how to run a company that you're talking about, correct? Oh, yeah. I was the vice president of operations. I built all the accounting software, all the integrations and everything. So what I'm hearing, Rachel, I'm hearing want to, and I hear you got the how-to. So now it's what is it going to take to get started? And I'm assuming you've run some numbers on that. So what do you think it's going to cost to start one of these companies? I don't know if it's cash out. Oh, Tom, we got you in a wind tunnel here. Say that again.

1:38:11You broke up really bad. Oh, I said the biggest problem is cash out of pocket for funding all these projects that owners don't want to pay up front. So you wind up with huge up front costs. And my wife and I own two houses and have some money in the bank and don't have any debt. So you want to start playing that game at this age? No, and I don't think I don't think you have to play that game. I'm going to poke on that a little bit. Are we talking about plumbing? Let's pick let's pick one. Let's pick one discipline. Let's pick one trade for this conversation. So let's just put it this way. I specialized in health care, building hospitals, and remodeling hospitals as a general and as plumbing and mechanical systems.

1:38:54Okay, but I'm saying this business, let's say you have all the cash in the world to start today. What is the business? Probably plumbing and mechanical systems, you know, HVAC and plumbing systems. Okay, and it would not be for residential. It would be corporate, correct? Yeah, mostly commercial. Commercial, thank you. I couldn't come up with the word. So if it's commercial, so what you're saying is, yeah, and that's really good money. And you're saying you would have to front because what they're doing is they're going, you go buy all the supplies, everything, and then invoices. That's what I'm understanding?

1:39:25Yeah, and the invoices are 30, 45 days before they pay 60 days. You know, the contracts, they take a retention payment, so 10 % out. Exactly. I got you now. Yeah, and those are big jobs, the commercial jobs. My father-in-law owns a heating and air company, but he does some commercial, mostly residential. But, I mean, they have crews. So will you hire? If you went down that route, do you have people that you know that you're like, oh, yeah, I could hire these guys for this crew? I mean, because you're starting – I mean, that's a big operation. Yeah, that's what I'm like. Or, you know, we have – we own two homes.

1:40:00Okay, let's go down that route. We have a million and a half bucks in the bank. You have how much? A million and a half bucks. But is that retirement or cash? It's 401k in cash. Okay, well, we're not going to touch the 401k. No. How much cash? Parcel that out. About$900. You have$900 ,000 in cash. Okay. Between my wife and I. I understand. And then what, if you sold one of the homes, what would you clear on one of the houses? Well, the one in San Diego, we probably wouldn't sell 2.4. Well, but I'm trying to get... If we own it outright. Right, but I'm saying to come up with some capital, I would absolutely look at selling one of those houses if the sale of that home gave you that startup that you needed, that startup cost.

1:40:44Yeah. And if you want to do it, do you want to start all this? I mean, I don't know, but... That's a question. Risk-reward is what's got me perplexed on it. Well, I know, and that's why we're... For being in a pretty good financial position to take a big risk. What's your income right now? So we have some income property. We have about$10 ,000 a month coming in. That's your only income is their properties. You're not working. Right now, I've been out of work for a year and a half. And I'm still getting paid off from my old company, which they're buying me out. All right. Well, Tom, we're having the hardest time with your phone, so I'll boil it down to this.

1:41:19Appreciate the call. We can't make that call for you. What you heard us do was walk through what your options are to come up with cash if you wanted to launch this company. But I thought Rachel was very insightful by just putting it to you. And you're still going, I don't know if I want to do it. And so I will tell you, Rachel, if someone presents this to me and I'm coaching them, I'm going to say, all right, Tom. And this is, by the way, your wife's got to be in on this conversation. And I think we have to look at the effort, the risk, and the capital outlay. Those are the big three. And there are emotions.

1:41:57There are logistics. there are consequences to walking through that checklist, Rachel. 100%. And if we walk through that checklist, those are the big three. You guys can get as specific as you want. But if we walk through those big three and we go, I still want to do it, if this is you, Tom, and then your wife goes, okay, I'm in. Yep. Then I say, go for it. Yep. But let's mitigate the risk, Rachel. 100%. In other words, we got to say, I'm risking this much. Yeah. And at the worst case scenario, we only lose this and we're still okay. Yeah. My, my only, you know, thought, and I think it's more of a personality thing, Ken, because at this point, money wise, they're fine.

1:42:37Like he can go get another job, but yeah, all of it. But at this point, it's a personality passion thing of, yeah, I still want to get up and grind it. Because when, when I, when he first said plumbing, electrical, I thought, okay, you know, he could probably start a small plumbing company, get it one or two guys under them. They can go do some residential. he's like oh no I'm doing hospital hospitals and massive commercial properties so starting that to me in my head went from a two to like a you're right a nine ten like that's a lot yeah but also it's doable if that's what you want in kind of the second half of your life Tom to grow something and sell it and you know that's if that's exciting and fun that's great or if you look up and you're like I'm 52 in four years I'm probably gonna want to retire I may go work for someone make some good money.

1:43:24Yeah. Still make some good money doing it. And then chill. But that's a personality thing too. I agree. Because that's a lot of effort. Remember that effort bucket? That's a lot of effort. He's got a good paying job and he's clearing 10 grand in real estate property. Right. Right. So Tom, I am a, listen, I'm always going to be the guy that says, if my heart is telling me to do it, then I'm going to try to mitigate the risk involved because there's always risk. But we're all for jumping into a new idea, aren't we, Ken? That's the theme of this show. We are. The last person I worked for before Dave, John Maxwell, famously said you've got to give up to go up.

1:44:02And I think this is a situation where if you want to go up to start this business, you and your wife will be able to be on the same page about what we're giving up. Yes. There's always a trade-off.

1:44:44Dave Ramsey:Dave Ramsey here. Most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the Every Dollar Budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan step by step. Look, most people hearing this will just keep hoping something changes, but not you.

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1:45:49All right, folks, how you doing in your insurance? You know this. The right insurance acts as a shield around you and your loved ones if disaster strikes. Also protects that bank account. We've got a free insurance coverage checkup that will allow you to figure out, am I overinsured or am I underinsured? Both are great revelations. We'll help you out. Go to RamseySolutions.com slash checkup. RamseySolutions.com slash checkup. So, all right, to Eric, we go in Des Moines, Iowa. Eric, how can we help? Hey, guys, thanks for taking the call. So I feel like I'm in a position to start investing, but on paper, it doesn't feel like it as well.

1:46:29So I've got an income of about 156 to 200 ,000 years, self-employed, a life stay-at-home mom, got two kids, one on the way, our primary home, and I have a rental property as well. The rental property is worth about$425 ,000. The primary home is worth about$330 ,000. And the mortgages are$304 ,000 at 2.75 % and$208 ,000 at 6.5%. And then I have about$54 ,000 in debt to my parents, although I will caveat, I've got a great relationship with my parents. If anything were to ever happen, I'm confident they would just say either pause payments or they just forgive it. Um, anyway, um, rental property, it's cash flowing.

1:47:17Uh, my rent is, uh, I charge 2 ,500 a month and my cost at a month is 2000 bucks. So, you know, I've got about 80 to$85 ,000 in cash. It's in the bank. So I'm trying to figure out, I feel like I should be putting money. Oh, sorry. In a Roth IRA, it's got about a hundred thousand dollars in it. Okay. So I'm trying to figure out, I feel like I should be investing more, but yeah. You got a lot going on, Eric. My gosh. Okay. Okay. So let's, okay. First off. I tried to give you the quick version. No, it's great. No, we needed all those numbers. My, my question is, is your rental property worth more than your primary home?

1:47:51Yeah. Yeah. So I bought a bachelor pad, um, before I got married, uh, got married and I had a kid and it was not a good fit for a, for a house. So yes, my rental property was my own house a while ago. Okay. And then. And how much do you owe, how much do you owe on it? How much is left on the mortgage? $304 ,000. $304 ,000. Okay. $280 ,000. And how much is on your primary home? How much do you owe? $280 ,000 on the primary. $280 ,000. Okay. And the only debt you have consumer-wise is the$54 ,000 to your parents, right? No car loans, no credit card student loans, none of that. Correct. I did pay off my wife's student loans.

1:48:36That was a checkbox. So we did that. I was hoping to feel a little bit more relief from that. Yeah, so you touched on this real quick. What is this burning desire? With all the stuff you've got going on, you feel like you need to be investing for retirement. Is that what I heard?

1:48:54Yes. I used to be putting away a bunch of money. When I had a standard W-2 job, I was investing. Obviously, I've got$100 ,000 in Iraq and 401k. Maybe it's$120 ,000. I don't know the exact number. But I stopped doing that ever since I've become self-employed. Right. with this rental house and everything going on. I've got, I technically have the cash, but we're trying to save up about$100 ,000. My wife's not a big fan of the current house that we're in. How familiar with the baby steps are you? Admittedly, I went through FPU a long time ago, but that was pre-everything, so not a ton. Yeah. Okay.

1:49:37Gosh, okay. So I always run these scenarios, Eric. Eric, if I woke up in your shoes, okay? And you called our show. So if I woke up in your shoes, Eric, here's what I would do. I'd pay off your parents tonight and that brings your savings down to$28 ,000, which I would count as probably your fully funded emergency fund. You may want to throw a little bit more in there, but we can just set that to high yield. We're done. Wife is not happy in the home. And I would run for simplification personally of where you guys are. I probably would look to sell the rental. You'll make about 120, probably 100 after fees and everything.

1:50:18The home you're in now, you'll have some equity. I mean, you could throw possibly 175-ish at a new home and you guys start, you know, having that over here. And then you go and you start investing 15 % of your income. And you guys, do you guys have kids? Three. Okay. Two and one on the way. All right. Oh, my gosh. Yeah, and start working, you know, putting some money away for college for them and just start working the baby steps. But that's me, Eric. Again, everyone has a different thing. Well, I think I can feel on you, Eric. It's a lot. The stress that you have in your life. And a new baby coming, too.

1:50:54Am I feeling this or is it just bad pizza? What's going on? Oh, no. Actually, I love this. I love all of this, managing and keeping track of all this. Okay, so you do love the— But you do— Okay. Yeah. So you may not feel it like what I'm feeling, but you do want to simplify a little bit. Or you're trying to at least strategize on how do I invest for retirement, and you just can't do all of this at once and do it well. I'm worried that if I – I always hear if I had$100 ,000 early on in a retirement, it'll grow even if you don't invest in anything. So I feel like I've checked the box of investing, but I feel like I should still be investing.

1:51:33I've got cash to do it. Yes, you should. You should. You should. From a cash flow. But you're tapped out with everything else going on. Yeah, the goal is to be funding 15 % of your income into retirement consistently, continuing to build up that. So that's – but that's after you're debt-free with an emergency fund, which could happen tonight, you know. So if you walk through the baby steps, yeah, I think there's a non-negotiable here that the$54 ,000 needs to be paid off. And even if it's a great relationship with your parents, all of that, be done. Just be done with it. You'll have your fully funded emergency fund of$28 ,000.

1:52:02So that's a non-negotiable. Now, the negotiable part, which is where we could maybe be different and that's okay, is do you keep the rental property or not? But you need to be investing 15 % of your income into retirement and then looking at this rental property. And what you and your wife want. What do you guys want to be in five years? Do you want to be landlords and still have this property and hopefully be paying it off? Because you need to be paying that. You should be paying that off even before your primary home. Yeah. But yeah, it's just a lot of real estate and depending on what you want to do, Eric, right?

1:52:36If you want more money in the market or some there. Do you enjoy the rental property? Yeah. Well, luckily I've got great tenants right now, but I know that could theoretically change. Yeah. And I'm handy. So any repairs and stuff, I'd all do myself. Yeah. So having a second home long-term is good with both of you. That's like part of your portfolio that you're good with. that's correct i feel like that's what i'm investing in right now but yes yep so um so yeah the only change up i would do is is start putting 15 away into your that's gonna be your roth and then do you have a 401k at your work yes yep so those two those two buckets need to start being filled consistently 15 of your income and then above that is where you start paying off this real estate.

1:53:25I'm just reminded of this old saying, and you love my old saying, so I feel like I got to give you another one. Yes, before we end, again, his old man sayings. If you chase two rabbits, you lose them both. And it feels like you're trying to chase all the rabbits right now. And it sounds like you're doing a good job, not criticizing you, But I think you have to decide, again, what are my priorities? What matters most to me right now? How old are you, Eric? 32. Yeah, you're— 33, excuse me. Oh, my man. You are really young. And, you know, you can have it all, but rarely does someone have it all at the same time.

1:54:09And that's my encouragement to you. I hope you hear encouragement, not criticism. But I think that's what you're facing right now. Yeah. Rachel nailed it. You two need to sit down together and decide what do we want right now and then what do we want in the future? And$600 ,000 in real estate debt, it's a lot. So whether you feel that or not, that's out there. You know what I mean? So depending on how quickly you guys say we're going to keep these, but we're going to pay them off in the next four to five years and get radical and do what we can to get rid of that debt, especially the rental property one.

1:54:45But yeah, I don't know, Eric. I, there's just always time to invest in real estate in my head. Do you know what I mean? And do it with cash and do it with cash. I agree. And there's just a lot of strain happening and in your life too, right? You got two little kids and a baby coming. On the way. Yeah. And I've been there and there's just something about solving for peace. When Dr. Tagaloni says that. Let's go. Solve for peace. And you know how to get that many times? Just simplicity. Simplicity. I know. But he's 32. I love it. He's trying to make. The hustle's great. I love the hustle. But I would downshift it into simplicity, and I think that'll be the piece that you're looking for.

1:55:21Thanks for listening, and I hope we helped you out.

1:55:45Dave Ramsey:and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com

1:56:29Our scripture of the day comes from Psalm 90, verse 12. Teach us to number our days that we may gain a heart of wisdom. And the quote of the day, they snuck this in on me. I don't even remember saying this. but it's my last segment on the Ramsey show. I know. So I guess we close with one of my quotes. So dream big, ask for help, embrace failure, take the shot and continue to climb one step at a time. Well, that's appropriate. Wow. Can. So quick, quick rejoin. We opened up this hour. Oh no, two hours ago. It's gone by that fast. this is my last time on the show as a co-host and I'm so glad it's with you ending 12 years of service alongside Dave, you so many amazing people here on the team and so it's quite weird, quite surreal it's bizarre we already cried earlier boohooed what a joy it's been.

1:57:38And I'm so glad that if I wasn't with Dave, who's out of the country, it's with you. And so thank you. Thank you for being here with me today. Thanks for all the great memories. We've had some incredible memories. It helped a lot of people. Yes, yes. And that's what's fun. Well, it's such a unique thing when you get to work and do this kind of work, which is a little unique together with people that you just love and you respect and you care for. And, you know, we were just talking, I think we met 18 years ago. You've known, I think Dave Longer. And I, you know, and your family was walking in and seeing Josie.

1:58:15I mean, I just remember, you know, Josie being that big and Ty and Chase and Stacey, who we just love so much. It's like the whole package. And I think that's what's the bittersweet part when we're the ones being left. He's leaving us, so we're being left. But you do, it's just the familiarity of who you are and what you bring to the table. So not only do I want people to know though, for real, that, thank God, all of our personalities I can say this about, but for you specifically today, you are what you get. and the people on this show that have followed you from the beginning of your journey here at Ramsey, or maybe they just joined in a month ago and you've been hosting here or front row seat, who Ken is in front of a camera, on a stage, in front of a microphone, is him outside of this with his family, with his friends.

1:59:11And that level of integrity is something you don't get all the time, especially in this kind of job. And so that, I want to say that, Ken, but also just, but focusing on what you have done these 12 years and everything from the books and the shows, I'm just curious from you, what has been, what's been one of your favorite things about your job? Like, what do you look back at? It's not even close. You're just like, it's that. It's this. It's not even close. It is when you experience a person on the phone in this format or at a live event, like we were at last night in Long Beach, California, when someone gets vulnerable enough because they're not where they want to be, many times in pain.

1:59:56Yeah. And they trust us. I remember the first time I did it, it's almost like you feel as though you're not worthy enough to try to help them. And then you get over that and then you begin to connect with them. And the highest form of work for me has been just meeting people where they are. So you look at a guy who's weeping, whether it be a small business owner or a lady, a single mom who's completely just underneath it. We had it on this last tour. Yeah. And I think that when you get to step into those moments, you think that you're helping them and you get done with it and you go, oh my gosh, that helped my soul.

2:00:39And here's where this ties in is because I do believe we were created to work. And I think we're uniquely and wonderfully made. And I think when you can do that, that for me, like I enjoy the pressure of being on the mic and all these buttons and, you know. In and out of stuff. Yeah, I love being fun. But I think at the end of the day, it's like what I've experienced at Ramsey that I will take with me and with so much gratitude that cannot be expressed is to do the work that I was created to do. And so the most rewarding is to talk to you folks. I'll miss this terribly. I'll probably just find some guy in the grocery store and go, do you need to be coached for a moment?

2:01:19Where are you with your proximity principle? Let me lay this out for you. Can I ask some piercing questions for a moment? That's the highest honor I've had. That's the work I've enjoyed the most is just being a small, and I do mean small, part of watching people transform their lives. I mean, the work we do here is about people, and that's the most rewarding. Yeah, I love that. I love it. Okay, so we said, because we boohooed the first time we even announced it. You started crying and just about killed me. I know, I came out of nowhere, and I was like, I think it's because I've been up since at 4 o 'clock this morning.

2:01:52But I do want to end this segment, not only honoring you can, and obviously all that you've done, but also the exciting next chapter in your life. And what's crazy about it, all of us personalities have kind of joked of like, well, he's living it out. He's been talking, this is what he coaches people to do. And then when it happens, and you get to make this next step into something that is different, but something that is so exciting for you. Yeah, because of the sensitivity of the announcement, I can say that I'm stepping into an executive role. And I will be taking the experience and the skill set that I have developed over time before I got to Ramsey and then honed it at Ramsey.

2:02:36And I'm going to be helping communicate. That's what I love to do is to communicate. I love words. You know how much I love words. Ken loves to talk. I love a good word. I do love to talk. He loves to talk. I do love to talk. And I'm going to be in an executive role, and it's a major step up. This is what I've preached to people. And this entire opportunity came to me, folks, through a personal relationship. It came through the real-life proximity principle of just being around high-quality people, and you have conversations. Two of my favorite things to do is to connect with new people and to get to know people.

2:03:16and I ask a lot of questions and I just didn't know that I was asking questions that created what is now an opportunity that, and I want to be very clear here, that God has completely opened the door. And then you're presented with, okay, I've got a great gig, but this is a great challenge. And I think it's probably core to who I am. I hope everybody that's ever heard me coach believes that this is authentic to who I am. When God opens a door, I think you'll walk through it. So it's tough, very sad, but also excited. The analogy I gave to our team is what I'll give to the audience. I feel like, you feel like when you read a good book, you're midway through the book and you start telling all your friends and family about it.

2:04:00Oh, this book is so good. Right? Yes, yes. And you're telling about it. And what you're doing is you're talking about the past. You're talking about what you've experienced as a reader on those pages. And then when you get home that night, you can't wait to crack the next chapter. And I think that's where I'm at. And I would close with this. You know me, I got to close with a challenge. To this audience, you come to us because Dave so long ago said this is about hope, right? Hope. And here I'm getting choked.

2:04:41So, my favorite scripture, Isaiah 40, 31.

2:04:51You can do it. I got this. You can do it. Take a breath. Those who wait on the Lord, and some translations, those who hope in the Lord shall mount up on wings like eagles. This is the description here is soaring. There'll be seasons of your life where you're going to soar. And then Isaiah downshifts and he goes, those who run will not grow weary and those who walk will not faint. And I think that's such a beautiful scripture for this audience. My final challenge is that no matter where you are on these baby steps, you are doing this because you long for freedom. The Spirit of the Lord, the Bible says, brings liberty, freedom.

2:05:32And so I would want you, no matter how hard it is, wherever you are, and however you're getting through these steps, don't miss what Dave based this entire company on in this show. Hope. Where does that hope come from? the Lord. He'll get you through. He's with you. He's beside you. He's in front of you. He's behind you. Trust him. Please give it a shot. I'll let you down. He won't. So as Dave has said for decades, remember, there's ultimately only one way to financial peace and has to walk daily with the Prince of Peace, Christ Jesus. It's been my honor. Love you all.

2:06:16you