Don't Let Fear Drive Your Financial Decisions

9:23Dave Ramsey:Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

9:40Jade Warshaw:Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

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10:33Dave Ramsey:Protect yourself, protect your income, protect your family.

10:44Dave Ramsey:sherry is in richmond virginia hi sherry how are you hi thank you good good how can we help

10:51Jade Warshaw:um so my question is uh what to do with my flesh fund so i was speaking to my husband probably like eight months ago and i was like hey how do you feel because we have all these ramsay envelopes and we have a vacation fund but it's used for something else it's kind of like a vacation but But I was like, hey, what if –

11:09Dave Ramsey:I'm sorry. You don't use your vacation fund for vacations?

11:12Jade Warshaw:We do, but it's like sports trips and stuff for the kids.

11:16Dave Ramsey:Okay.

11:17Jade Warshaw:So that's kind of –

11:18Dave Ramsey:So we declare travel sports to be vacations, okay?

11:22Jade Warshaw:Well, okay. So I went to him and I was like, hey, he knew I always liked vacations and taking my kids on vacations either to the beach once a year or planning a big trip every two years and saving for it. So I was like, what do you think about me making this flush fund? He's like, so just to do what you want with it? And I was like, sure. So eight months later, I've got about$9 ,400 in there. And all from working overtime, it's not for my salary. It doesn't take away from the family whatsoever. And I was like, hey, I think this is more than enough for all seven of us, but I think I can take us on a pretty good vacation.

11:59Jade Warshaw:He's like, yeah, we don't need vacations. Okay. So I sat on it.

12:04Dave Ramsey:Why do we not need vacations?

12:07Jade Warshaw:Well, because he wants to create generational wealth. And that's giving the kids money.

12:12Dave Ramsey:Yeah, but I thought we already had a budget that included saving for generational wealth.

12:21Jade Warshaw:Well, that's like retirement. Well, that's generational wealth. Are you doing the things – one of the indicators of being able to spend on extravagant vacations is that you're doing the other things that make you a financially responsible adult, right? So if you're already out of debt, right, you're already a person who budgets, you're already a person who's saving for the future through things like investing your 15 % by having that fully funded emergency fund. if you're doing those types of behaviors, you have life insurance, you're generous, all those things. Yes, you can turn around and take a$95 or$9 ,400 trip.

13:01Jade Warshaw:But if you're not doing those things, you do need to go back and reassess. So why is it that your husband is saying no? Why do you think he's saying no to this? He wants to put it back into kind of what we have going on with both of our salaries. He wants to include it. I'm like, no, it's not included. It's overtime. So it doesn't take away from anything. But then I sat on it for a couple of days and I'm like, you know what? I think I want to help my son out with college more. No, here's the problem. I'm going to point to the problem. The problem is you guys aren't aligned and you weren't using our money as our money.

13:39Jade Warshaw:You're doing something over here. Then there's money over here that's allotted for something, but it's not really being used for that. Then there's money over here that he has a plan for. I think what will really help you guys is getting aligned and saying, first off, our money is our money. It's going in one big pool. It's in one checking account. And with this money, here are the things that we've decided our priorities. Right. So if thing one is, to his point, yes, let's make sure we're putting the right amounts for retirement, which is wealth building, generational wealth, whatever you want to call it.

14:11Jade Warshaw:Right. That money is going there. And that's been earmarked for that. Then after that, you guys can also say, look, there's money left. We've covered our 15%. There's more money. What do we want to do with that? Do we want to take a vacation? Maybe the answer is yes. We put a little money there. Does that make sense? Yeah, and we have all of that going on. No, you don't. Otherwise, you wouldn't have called.

14:32Dave Ramsey:No, you don't. You have your own little world over here that you created with overtime, and then you're pissed because he wants to reach into it. You're not doing what she said. What she said is all the money goes in one pile. We decide together before the month begins where all the money is going to go. His, yours, ours, overtime, nobody. And if you have a slush fund, it's because there's a line item in that budget that says we're setting aside a certain amount for Sherry's slush fund, which is perfectly fine to do. And, by the way, it's perfectly fine to put$9 ,000 aside and go on a vacation in that budget.

15:10Dave Ramsey:but not having this little side world over here that we have that's a fantasy world based on your overtime, and then we get to just fight over what we do with that later. That fight should have occurred when that money was in the pile with all the other money, and we say, all right, are we putting enough aside for kids' college? Are we putting enough aside for retirement? Are we putting enough aside for a vacation? And you ought to be doing all three of those.

15:34Jade Warshaw:Right. So I think the bigger issue was when I went back and said, okay, I've thought about it. I want to help my son more with college because throughout the years I haven't made as much money, and I've saved as much as I could, but it hasn't been a lot. And so he's like, yeah, what number do you have? So I gave him a number, and I was like, well, it's not going to be enough. I want to put my overtime there to help my son so he's not coming out in so much debt.

16:01Dave Ramsey:I don't want you to. I want you to quit treating your overtime separately. This is the third time we've said this. It's not a separate issue.

16:11Jade Warshaw:That's why I called. I wanted a different perspective.

16:14Dave Ramsey:It's part of the overall pile of money in the household. And if we, your income and his income, plus or minus overtime, is not enough to fund the kids' college, we have a different issue.

16:28Jade Warshaw:You guys have a blended family? Yeah. Okay, so I think that's where the separation is coming in. You're thinking this is my son from a previous time. I can put money on the side to deal with that issue. And I think you just have to view this, again, one pile of money.

16:44Dave Ramsey:I want him to view that boy as his because he married you. Okay. Like the two of you. When he married you, he took on the responsibility of loving you well, which includes loving him well. Right. And I want him to look at that, regardless of what you have made or what his income is versus your income. All one big pile of money to live our life. Our life is I have a son that was with me when we got married, and you said for better, for worse, and it includes him. And, you know, we are doing this together. We are loving this kid well. We are going to send this kid to school. We are going to save for retirement and have generational wealth.

17:24Dave Ramsey:I agree with that. It's a great goal. We are going to go on a nice vacation. I agree with that. It's a great goal. So all of the goals are fine. The process you're using is what's causing your disagreement. Because you're still trying to run around over here, not making as much as him, but going ahead and pouring on the hours to take care of your son from a previous marriage because he isn't. Or you don't feel like he should have to. I disagree. I think he should have to. When he married you, he married that kid. And this is you better love them both better love them all just alike treat them all just alike.

18:01Dave Ramsey:This is how the Brady Bunch operated. That's why they stayed in their little squares. And so, you know, this is what we do. So you guys have all that you're both saying correct things and neither one of you are afraid of work. You know, so the correct things are I want to build generational wealth. I want to provide college for the young man. I want to go on a nice vacation. All of those things just need to become line items in the budget. Now, here's where the rub is going to come when you do that. You, Sherry, are the natural spender. Your husband is the natural tightwad, the saver. And for him, God sent you to him so he learns to have fun.

18:42Dave Ramsey:God sent him to you so you retire with dignity and don't have to eat dog food. Oh, boy. Because you're going to have money saved because of this man. He won't let it be any other way. And you're there to make sure he has fun. because this guy don't know how to lighten up. He'd live in a cave, collect lint, and only come out on triple coupon Thursday. You know, lighten up, dude. Let's go on a nice vacation. You guys make a lot of money. I can smell it. He does. And when they all combined, including this overtime.

19:08Jade Warshaw:It's quite nice.

19:08Dave Ramsey:And she made$9 ,000 in 10 months. Yeah, they're doing all right. Or 12 months in overtime.

19:14Jade Warshaw:Mm-hmm.

19:15Dave Ramsey:That's great. None of you are afraid of hard work. You're good people. So let's just sit down and say, okay, these are things we're going to agree on. and in the overall picture, what number are we going to put on each one? And I want you to go on vacation, and I want you to fund the boys' college, and I want you to build generational wealth. And you can do every bit of that when you lay it out and use the baby steps. So quit living separate lives off to the side, folks. It does not work. All it does is create strife, anxiety, and we're still measuring against the past. We're still saying, you know, I brought this child into this marriage, But he was there.

19:52Dave Ramsey:It was not a secret. It was part of the package. And you're worth it. You guys are worth it to go on vacation. So everybody does get to win. It's just a matter of how much and when and in what order.

20:20Thank you.

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21:25Jade Warshaw:It's a huge difference. That's banking that actually supports the baby steps instead of working against them. So if you want to bank someplace that's both faster and wiser, check out Fairwinds. Go to fairwinds.org slash Ramsey. That's fairwinds.org slash Ramsey, insured by the NCUA.

21:59Dave Ramsey:One of the best things for you to do for your finances is to have a really good tax pro in your corner that you can trust. They'll help advise you on the best moves to make your situation or your small business, especially if you've had some big life changes this year, to make them the best, the least taxes. That's the whole goal here. Pay as little tax as possible. Go to RamseySolutions.com slash tax pro to find CPAs and enrolled agents who have been vetted by the Ramsey team, and they are Ramsey trusted. Ray's in Nashville. Hi, Ray. How are you?

22:32Jade Warshaw:Hey, Dave. Thank you for taking my call. And as a longtime listener, thank you for your valuable advice throughout the years. Well, thank you, sir. The reason I'm calling, about 40 years ago, I was a pilot in the Navy, and I took out a$50 ,000 servicemen's group life insurance policy. It was about$50 a year, I believe, and back then,$50 ,000 actually was a lot of money. Throughout the years, I kept the policy. After the first Gulf War, I got hired by a major airline in 1991. one. And as the years went on, I continued with my group life. And then when I was in my 40s, I picked up a 30-year term policy for$500 ,000, which will hold me until I turn 74.

23:20Jade Warshaw:In this last December, I turned 65. And by law, I was forced to retire as an airline pilot. So So I am now retired with a fixed income of my pension, Social Security. My wife took an early Social Security at 63, partly because she needed an insurance policy, a medical insurance policy to gap her until she gets on Medicare. So the status that I have right now, I have no liens. I have no loans at all. My house is paid for. Way to go, right? We're empty nesters. School has been – all the colleges behind us. I have about a million and a half in my 401K and IRA, and I have quite a bit of cash. And so my question is, after I turn 50, the group life policy, it seems like the premiums just go exponentially higher and higher.

24:17Jade Warshaw:And I'm sure you're very familiar with this. And then 65 is another tier that it hits. My question is, when I was flying, I felt as though I wanted to have as much insurance as I possibly could. I was doing international flying. Things can take place overseas, and I wanted to make sure I was fully insured that my wife would have a good nest egg in the event that something happened. So now that I'm not flying anymore, I'm questioning whether it makes sense to continue this group life policy. It does not.

24:53Dave Ramsey:It does not seem to make sense at all. And the reason is very simple. If you canceled both life insurance policies and you died tomorrow, your wife's got a million and a half dollars plus a pile of undisclosed number cash. I think she's okay, dude.

25:11Jade Warshaw:Well, here's the thing. She has longevity in her family, and her mother is 97. And the way she lives and eats, she's going to succeed me by 20 years.

25:21Dave Ramsey:100%. 75 % of the ladies outlive their husbands. That's not the point. The point is, how big is this pile of cash you mentioned?

25:31Jade Warshaw:It's about a million cash. Oh, boy.

25:33Dave Ramsey:So we have$2.5 million. Right. If that were invested in a decent mutual fund, and let's just pretend for easy numbers, it produced 10 % a year. without touching the principal, the 10 % would be$250 ,000. I think mama's okay, honey.

25:54Jade Warshaw:Well, I'll tell you, she's going to live to be 100 in it. She can't make it on$250 ,000? Even if she went into...

26:02Dave Ramsey:Can she make it on$250 ,000 a year? I'm sure she could. It's my point. You're self-insured because you've done an extremely good job, Ray.

26:14Jade Warshaw:You know what? I've listened to your tutelage throughout the years, and we were debt-free as early as we could. And that's probably the best message that you send.

26:26Dave Ramsey:Well, thank you, sir. I appreciate that. But I just want to tell you, all these years, you've been living on less than you made. You got out of debt, and you've invested. And now you're sitting on$2.5 million. You win the prize. You did it. You're a Baby Steps millionaire. You're incredible. Very well done, sir. And the point is, is that good financial planning that creates this kind of net worth with no debt makes you become self-insured. Okay? I'll give you another example that's not on your plate. Okay? I'm 65. Okay? Sharon and I have it all written out. We have hundreds of millions, in our case, of net worth, and we're not going to a nursing home.

27:11Dave Ramsey:something happens i'm just gonna hire full-time staff and put them in my house i can afford it i can hire an md and put them in the spare bedroom right it's not a problem because i'm self-insured through this i'm not being arrogant but the point is the money creates enough money to cause you to be able to live out your golden years the way you want to live them out and you're in that situation without ever touching the nest egg without being irresponsible or rash.

27:37Jade Warshaw:What do you think that is, Dave? I feel like there's many times where we will present a mathematical equation of how someone will prosper. We can say things like, hey, you'll have enough money to be able to do this, this and that. And there's still like, the light doesn't go on of, yes, that's true. What is that? Where it's just, it's almost like, because even in this case, I almost felt like he didn't believe us. And there's been many calls where we've painted out this elaborate picture of what someone's life can look like. And it's just like, it's almost like they don't believe us when we say things like, hey, folks are paying their houses off.

28:13Jade Warshaw:Hey, if you do this, you'll have a million dollars or you'll have$3 million.

28:16Dave Ramsey:Well, it's not a good, it's a grotesque metaphor, but it popped into my head. Okay. You've been fighting cancer for five years. And, you know, they go in and do an operation and the doctor comes in and goes, we got it. you don't need you don't need radiation you don't need chemo we got it and you go yeah but i'm fighting cancer no we got it you did it you won yeah but i'm fighting no no we got it that's the conversation yeah it's just take because you're into such you're in warrior mode and the battle's over lay the sword down you know you're just ready you've been living like no one else now it's time to live and give like no one else.

28:59Jade Warshaw:And trust that the process works. Put the sword down.

29:01Dave Ramsey:You won. Battle's over. There's no one left to kill. Everybody's gone. You know, and it's just, but you're still out there just swinging because you're just in that mode and it, yeah, but you're okay. But you're okay. Yeah, but you're okay. Yeah, but you're okay. It worked. And it just, it's like when you run through the finish line, it takes a few steps to slow down. You don't just suddenly come to a stop. Yep. Yep. And I think that's the only psychology thing, the only way I can answer the psychology of it. He really wasn't arguing with us. His brain is just in save and invest mode and make sure everybody's okay mode.

29:39Dave Ramsey:Everything he did was to take care of his family. I was traveling overseas, internationally. I wanted to make sure I had life insurance. Everything was serving his family. It's a wonderful spirit. Yeah, yeah. And he's like, I want to make sure. Yeah, but you're okay. Yeah, but I want to make sure. Yeah, but you're okay. And that's a wonderful place to be because that's the kind of person who gets there is they get this, the blinders on, and they're not listening to all the outside world, and they're able to focus and get out of debt. And they're able to focus and put money in that 401k. I mean, that guy's a star.

30:11Jade Warshaw:Yeah, he is.

30:12Dave Ramsey:What's interesting was we took the call earlier from the 41-year-old.

30:15Jade Warshaw:Yeah.

30:15Dave Ramsey:And we told him he'd have two and a half million. Yeah. Ray's got two and a half million.

30:21Jade Warshaw:That's true. Yeah.

30:22Dave Ramsey:And he's 65. I mean, you know.

30:25Jade Warshaw:They're reflections of each other. Yeah.

30:26Dave Ramsey:Yeah. It's like proof text, right?

30:28Jade Warshaw:Yeah. It really does work.

30:30Dave Ramsey:Yeah. This is what we're doing. And well, what if, yeah, what if? I mean, what if you don't save any money? You know, you're not going to have any money. Hello, there's a direct correlation between people that save money and people that have money. Who knew? And so, yeah, you know, I don't have anything in investments just because you don't invest. Hello. Yeah. Yes. But Ray's an investor, man. He's a stud. He's done the whole. He's stud.

30:52Jade Warshaw:One million dollars cash.

30:53Dave Ramsey:Yeah, that's a little cray cray right there. You need to get that invested, Ray.

30:56Jade Warshaw:Yes, you do. Yeah.

30:58Dave Ramsey:Wow. But it's, I'm so happy I was able to continue doing this show so long that now I'm seeing these people. Yeah. Who are asking me the question, I've got too much. What do I do now? Yes. That was not a question in the early days of this show I thought I would ever hear.

31:16Jade Warshaw:Right. They started with you and now they're finishing with you and you see the product of it.

31:20Dave Ramsey:Yeah, my car got repoed, Dave. I'm like, that's the only question I got in those days.

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33:04Dave Ramsey:Sally is in Hartford, Connecticut. Hi, Sally. How are you? Hi, I'm good today. Thanks for taking my call. Sure. What's up?

33:14Jade Warshaw:So my question is about debt relief in a low-income situation. Okay.

33:24Dave Ramsey:What's your income?

33:27Jade Warshaw:I get Social Security disability. I'm 64, and I have been getting Social Security disability for two years. Which is how much? $2 ,700.

33:43Dave Ramsey:Oh,$2 ,700 a month. Okay. What's the nature of your disability?

33:48Jade Warshaw:No, a year. $2 ,700 a year.

33:50Dave Ramsey:Oh,$2 ,700 per year. Okay.

33:53Jade Warshaw:Right. And that includes a small pension.

34:01Dave Ramsey:Okay. And so you're making$2 ,500,$2 ,300 a month. Okay. And how much is your rent?

34:11Jade Warshaw:it's about$1 ,700 a year a month rather and I live in New England so it's just the rent up here

34:21Dave Ramsey:crazy crazy I don't care I don't know how that math works 2300 minus 1700 equals Sally doesn't have food. Right.

34:34Jade Warshaw:So I have about$80 ,000 between an IRA and an equity account. And I keep drawing off of that, you know, to make ends meet.

34:52Dave Ramsey:What's the nature of your disability?

34:57Jade Warshaw:it's been everything physical a lot of physical stuff heart problems uh mental disability depression i mean i'm being honest you know so uh what what keeps you in new england

35:18Jade Warshaw:I have one adult daughter who lives in the New England area. Okay.

35:31Dave Ramsey:Do you have other family anywhere in the country?

35:35Jade Warshaw:I'm sorry?

35:36Dave Ramsey:Do you have other family anywhere in the country?

35:40Jade Warshaw:I do. I mean, my ex-husband is nearby, and he's been very helpful. But my question is, I have this$9 ,000 credit card debt, which, I mean, I pay basically. Is there any way, what kind of credit card relief is there? There's not any.

36:07Dave Ramsey:You borrowed money on a credit card, and the only credit card relief there is is if you file bankruptcy, which you're certainly not going to do on$9 ,000. There's no magic pill that says you're disabled, so they forgive the credit card debt. There's no such thing.

36:26Jade Warshaw:I also don't think that that's the biggest concern. That's not your core issue.

36:30Dave Ramsey:The core issue is you're draining down the savings. What are you going to do when the savings is gone?

36:34Jade Warshaw:I am. And that's why I'm trying to hang on to that. How much are you pulling off of it? I live as smoothly as I can.

36:42Dave Ramsey:Yeah, but that doesn't matter. You make$2 ,300 and your rent is$1 ,700. Those numbers don't last.

36:49Jade Warshaw:How much are you pulling off that$80 ,000 every month, Sally?

36:56Jade Warshaw:Sally?

36:57Dave Ramsey:How much are you taking out of your savings every month, Sally?

37:00Jade Warshaw:Well, a year, I try to keep it like between$4 ,000 and$6 ,000 a year. But last year, I had to have my transmission replaced, and that was$8 ,000, you know, for that.

37:19Dave Ramsey:Yeah.

37:19Jade Warshaw:And that was cheaper than buying another car.

37:22Dave Ramsey:Okay, so here's what I want you to figure out, and this is not going to be easy, okay? but there's three or four levers to pull, and everything I'm going to tell you is going to be hard. But they're not going to be as hard as the plan you're on, because the plan you're on, you're going to run out of money, and you're going to have a problem.

37:41Jade Warshaw:That's my fear.

37:42Dave Ramsey:Yeah, I know, I know. I'm not trying to scare you. I'm just saying the plan you're on sucks. We need a new plan. But the other plans aren't going to be without pain, okay? So plan number part, there's three or four things, and you need to do somewhat of all of them, okay? I want you to come up with some kind of a self-employed idea that you can do with the limitations that you have to create some income. That's thing number one. Just write that down. I don't care what it is, and as long as it makes you smile and makes you$1 ,000 or more a month. The second thing is you've got to move. You cannot afford a$1 ,700 rent, period.

38:23Dave Ramsey:and we need to create the third thing is we're doing those two things so we create a monthly budget that is sustainable meaning it will last okay and so if you had $3 ,500 coming in because you had a little bit of side income and if you had no payments and if you had a rent that was half of what you have now you can do that without touching your savings and that is sustainable. That will last. But the numbers you're giving me won't last. And you know that that's why you called and it's terrifying. I'm sorry you're there. I'm sorry you're there. But if you don't act on it, it's going to get more terrifying.

39:04Dave Ramsey:And so we've got to do those three things. We have to create a sustainable situation that the income minus the rent minus living expenses doesn't need savings to be used. Then number two, we're going to do that by getting affordable rent, and we're going to do that by getting, and it may mean moving to another area of the country. I don't know. But$850 rent is available out there in America somewhere. Okay. It might not be in Hartford. I don't know Hartford that well. It's an expensive little town and Connecticut is a highly taxed state. So it's very possible. I don't know. But I want you to think in those terms.

39:44Dave Ramsey:We have to get rent and income added to this equation, better rent price, better income added to this equation, so we don't have to touch this savings. And then you're okay. You're going to be fine. Then you can write a check out of the$80 ,000 and pay off the stupid credit card and cut it up. That's right.

40:01Jade Warshaw:That's right.

40:01Dave Ramsey:And it goes away. That's number four, is when you've created a sustainable situation. But today, I would tell you just pay off the credit card. But if you stay in this situation with this income and this rent, you're still going to burn up your savings. The credit card's not your problem. Your problem is your income versus your life, the way your life is set up now. Yeah, that's right.

40:23Jade Warshaw:Yeah. I mean, a thousand dollars would change your world.

40:26Dave Ramsey:We're scared with you. We want you to win. And what I'm telling you to do, to move to an 850, that's painful. What I'm telling you to do, to come up with some kind of side hustle where you babysit dogs or you do whatever, you iron people's shirts or I don't care what you do, whatever it is you're going to do for a thousand bucks a month. Okay. It doesn't take a lot. That's not a lot, but neither one of those things are easy. They're painful things that I'm asking you to do for you. But, um, you know, you, you've got to, uh, if you don't address this, it's going to unravel on you.

40:59Jade Warshaw:Absolutely. Yeah. That money's going to run out. Um, yeah, this is going to be a major move out of the comfort zone major. And you know, I think the other thing is I sense that you don't have a large,

41:17Dave Ramsey:strong community, group friends. And so I want you to search out a good local church there in Hartford, and I want you to sit in the pastor's office and introduce yourself to them and tell them your story and ask them to help you plug in with some of the other ladies there in the church, not so they give you money, but so you get some people that hear your story and that you are seen and you feel good and you feel whole. Connection, connectivity to community, especially when you're battling something that's having to do things that are uncomfortable is necessary.

41:51Jade Warshaw:Well, and there's opportunity there. The more people you're around, people get to talking and somebody says this and it sparks an idea and you go, oh, I could go do that, right? Yeah. Like all of my major opportunities.

42:02Dave Ramsey:We live in our house and live in our guest house and babysit our dogs. Yeah. And you do that for 600 bucks. But we didn't introduce ourselves trying to get something from them. It just happens. But those things happen when you're in community. Yeah. And people know your need and they know you. And they know you're trustworthy. Yeah.

42:19Jade Warshaw:Your transmission goes out. Oh, I know a guy who can fix that or my uncle.

42:23Dave Ramsey:Instead of 8 ,000, it's 4 ,000. That's right. That's right. Yeah. So that's number four. I want you to search out a good local church and sit down, have a meeting with a pastor. Again, not to ask for things except to connect me into community. I need more friends. I need more connection. And connection is valuable.

42:54Jade Warshaw:If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian Healthcare Ministries is a great option to think about. CHM is not health insurance. It's a health cost-sharing ministry, a biblical community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self-employed, between jobs, or you just need something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community.

43:29Jade Warshaw:And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM is offering new members a 50 % credit towards their first month of membership. Get started at chministries.org slash budget and use promo code RAMSEY. That's chministries.org slash budget and promo code RAMSEY.

44:07Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, Jade Walshaw Ramsey personality. Number one bestselling author is my co-host today. Christine is in Cleveland, Ohio. Hi, Christine. How are you?

44:21Jade Warshaw:I'm well. How are you?

44:23Dave Ramsey:Better than I deserve. What's up?

44:26Jade Warshaw:um hey so i wanted to get um your advice and perspective um my boyfriend and i we want to be married and we're not running down the aisle tomorrow but we're working towards it and having conversations good and one of one of the more in-depth conversations that we do still need to have is financial but before before we like even jump into that like i want to make sure that i'm coming at it from a really grounded mindset and perspective, like within myself first. So like, it makes absolute sense to me that like, when you get married, you combine your finances together with your spouse. But I'm noticing in myself that I have this little nagging fear of don't become like fully financially dependent on your partner, because what happens if like everything goes wrong.

45:16Jade Warshaw:And like that fear gets even louder when I think about potential future scenarios where like if I decide I want to leave my career and stay home with the kids, like that's something I'm open to. But at the same time, like this fear gets a little bit louder. And so like I don't want that fear to be in the driver's seat for these really important conversations that like genuinely I'm excited to have.

45:40Dave Ramsey:Wow, you are very wise in your approach to this. I love your wisdom.

45:44Jade Warshaw:I love that. I also think it's valid. I think a lot of women feel that way, especially certain types of women who do like to go out and maybe it's never been your mindset to be like, oh, I'm going to be home and maybe I'll stay home with kids. But you like to go out and you like to be doing your thing out there. What I tend to do in those situations is I really go back to the facts of it because it really is somewhat of an emotional argument. because if you think about it, let's go back to what you said. Well, I'm afraid I'll lose my independence. What if basically I stop working and he's the sole income earner, right?

46:22Jade Warshaw:Right, yeah. Is that the biggest? That could be a fear. So what you would be worried about is you're at home and what he wants to get a divorce and you're out here and you've exited the workforce for however many years, right? So now you're struggling to get a job, right? I like to play out the scenario to as much detail as I can. Is that right? Oh, yeah, me too. Yeah, that or like you hear about like financial abuse where people are like, well, all the cards are in his name and he's cutting me off. Okay, so those are two different things.

46:53Dave Ramsey:No, I think they're the same thing. In both cases, you have to have a voice. And that's the preventative medicine.

46:59Jade Warshaw:Right. And one of them is I have a hard time seeing the second scenario, which is any sort of abuse. Because the fact that you guys are talking about this ahead of time, the fact that you're being proactive, the fact that you're not the type to shy away from being a part of it, I don't think you're going to worry about that at all. Right?

47:15Dave Ramsey:The first time something smelled funny, you would raise your hand. Yes. You're not going to be eight months later and go, well, it kind of felt bad. You're not that person. You're like, wait a minute, Bubba. That's you.

47:28Jade Warshaw:Yeah. Definitely. And then number the first one that we're going to reverse now is the idea that, OK, what if I exit the workforce? What if I'm out for 10 years, you know, and something goes wrong with the marriage? I'm left, you know, having to create this whole new world for myself. Right. So that's when I would go in and I would really think about it. I'd say, OK, well, what what's the job that I'm leaving? Is there any way that I can continue to stay connected to that? Maybe you're in health care. You keep your certifications up. There are certain things that you can do to remain relevant, but there's also this idea that you can always, if you're the same person, you're smart today, you'll be smart 10 years from now, right?

48:06Jade Warshaw:You're resourceful today, you'll be resourceful 10 years from now. So the assumption that you will somehow go down in value over time and you won't be able to get a job and you won't, do you see what I'm saying?

48:19Dave Ramsey:And of course, you're well aware, you get half of everything. Yeah. So if there's a million dollars in his 401k, half of it's yours. If there's a million dollar paid for house, half of it's yours.

48:33Jade Warshaw:But the scary part is.

48:34Dave Ramsey:So you're not going to be without as long as you've had a say in and are aware of and you're both voting together and you both are emotional owners of all the decisions all the way through. So my wife, Sharon, has been a full time mom since Denise was born 40 years ago. Mm hmm. Talk about vulnerable. Except that she has an equal vote and has had emotionally, practically, and legally the entire time. I can promise you, if you interview her, she will not say she has ever one time felt vulnerable. Quite the opposite.

49:12Jade Warshaw:Yeah. And that's so beautiful. And so I guess, like, coming back to, like, when we're just starting to have these conversations, like, I mean, like, what are some, like, advice that you might give to, like, how do we start these conversations? So, like, I have full faith and confidence in him. I don't expect him to, like, have a curveball. Agreed.

49:37Dave Ramsey:You wouldn't be dating him. Oh, whoa.

49:39Jade Warshaw:Right, right. Date bombs. So like, I guess, how do we step through those kinds of conversations just to, you know, do the groundwork to make sure that we are on the same page and setting ourselves up right for we have this equal vote, you know, that sort of thing. I think that you do exactly what you're doing, which is you lead with your heart and what you want for the future. So you start by saying things like, you know, I want our marriage to last forever and I want us to have full transparency. I want to be able to be completely vulnerable with you. And you start that way because who can argue with that?

50:13Dave Ramsey:Yeah. And I want both our votes to count. Yes. And because two is better than one and, you know, all that. And then you go, okay, let's talk through some of this because the number one cause of marriage problems and divorce is money fights and money problems. So let's go ahead and figure out if bears kill people in our neighborhood. it's the number one thing they die of, then we need to figure out how to keep the bears away. Right. So, you know, what are we going to do? What are we going to do? Well, OK, let's look at debt. Let's look at savings. Let's look at the way you grew up, the way I grew up.

50:48Dave Ramsey:Are you a natural saver, a natural spender? Are you a natural glass half full, glass half empty, abundance or scarcity? And you start to go through some of those things and generally opposites attract. So celebrate the differences. And not one of you is wrong, one of you is right. but if you're the natural saver, my wife's the natural saver. We celebrate that at our house. I'm also the natural spender. We celebrate that at our house. She gets to do stuff because I'm there, you know, and so we celebrate that. And so, you know, Rachel and Winston, Rachel's the spender, Rachel and Winston is the saver at their house and so on.

51:25Dave Ramsey:So anyway, you just start working that through. And, you know, it's almost a part of pre-marriage counseling to go in depth on what do you believe about giving, saving, spending, fun, retirement wealth, insurance? What do you believe about these things? And let's talk about that and talk about the feelings that come around all of those things and then start to go, okay, I'm going to have to come your direction from my natural tendency. You're going to have to come some of my direction from your natural tendency. And we're going to find a really cool, strong point at the third point on the triangle from there that's better than either one of us were by ourselves.

52:08Dave Ramsey:Thus, we're getting together. So you're going to be great. You ask a question so well and you ask the right question.

52:15Jade Warshaw:Yeah, you're going to be intentional. Your brain is going to remain turned on. I'm not concerned about you.

52:20Dave Ramsey:I'm going to send you a copy of Rachel's book, Know Yourself, Know Your Money. Both of you could read it. It'll help you with the discussion.

52:52Dave Ramsey:Getting married changes something in you. It sure did in me. When you say I do, all of the sudden life isn't just about you anymore. It's about we. And one of the most grown-up things you can do for that we is to make a will at MamaBearLegalForms.com. See, being a grown-up isn't just about jobs and rent and splitting up the chores. It's about having a plan so the person you love is protected. And a will isn't about dying, it's about deciding. It puts your wishes in writing so no one has to guess, and judges don't have the final say. That's why I recommend Mama Bear Legal Forms. With Mama Bear, making your will is easy.

53:35Dave Ramsey:It's completely online, no lawyers required. You can get it done in about 20 minutes. The price you see at the start is the price you pay with Mama Bear. So if you're serious about being an adult, do this today. Go to MamaBearLegalForms.com. Use the promo code RAMSEY and save 20 % on your will. That's MamaBearLegalForms.com, promo code RAMSEY.

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54:53Dave Ramsey:Start EveryDollar for free today in the App Store or Google Play. Brian is in Los Angeles. Hey, Brian, how are you? I'm good, Dave. How are you? Better than I deserve. What's up?

55:05Jade Warshaw:Hey, so I was just calling for some advice because I'm kind of at a crossroads right now. I've kind of achieved my most immediate financial goals, and I kind of don't know what to do. moving forward. Okay.

55:21Dave Ramsey:What do you mean?

55:23Jade Warshaw:Yes. So I got about$350 ,000 liquid. I have two healthcare businesses that are grossing about$750 ,000 a year. And I have a wife and a kid, and I'm paying about$60 ,000 to$80 ,000 in taxes at the end of the year. I have about$300 ,000 in equity on my house with$900 ,000 left on the mortgage. We don't have any credit card debt or anything like that. The cars are paid off. I was just wondering, like, in my situation, you know, with this$350 ,000 sitting in a checking account, you know, Chase and the people who I'm banking with, they're kind of calling, wanting me to move the money around, but, you know, I've worked hard to save it up.

56:09Dave Ramsey:I'm not sure really what to do with that. Yeah, you're Chad Clampett. Mr. Drysdale's calling.

56:15Jade Warshaw:That's funny.

56:16Dave Ramsey:You don't even know what that is. Look it up. Okay. I'm only 30, so I think I'm going to do it. Yeah, you'll have to look it up. It's the Beverly Hillbillies. It's an old show. Okay. Anyway, the, oh, my God. I was with you, Dave. I have immediately become irrelevant. No, I was with you.

56:30Jade Warshaw:I was with you.

56:32Dave Ramsey:So, way to go. So, you're making your income off the$750 gross is somewhere around$250, right? Yeah, it's about$15 ,000 to$20 ,000 a month.

56:44Jade Warshaw:That's about after taxes, including distribution.

56:47Dave Ramsey:No, I'm talking about your taxable annual income from these businesses is around$250 ,000, isn't it?

56:56Jade Warshaw:Yeah, something like that,$250 ,000.

56:58Dave Ramsey:About$20 ,000 a month. Yeah.

57:02Jade Warshaw:Okay. That's after tax. I've pulled in about$20 ,000 a month with distribution. distribution. And see, I'm taking$7 ,000 a month in W-2 for myself, and then my wife is about$2 ,500

57:15Dave Ramsey:in that W-2. So I don't even know if that is... None of that matters with what I'm talking about. What I'm talking about is what your real taxable income is. So we know it's 10 on W-2, and then you have profit on these businesses that you own. You know what profit is, and that profit is also taxable, and the total of all of that is 60, and in a 30 % bracket, that means you're making around $250 ,000, maybe$300 ,000 a year, okay? Somewhere in there.

57:43Jade Warshaw:Yeah, my bracket is 37%.

57:45Dave Ramsey:Okay, then you should be, yeah, you're probably making$300 ,000 then. Okay, so that's good. Way to go. Congratulations. I do want you to get more on top of your numbers on your business. It scares me that you don't know what you make, and that you somehow bifurcated that under what you're doing on W-2. I don't have that problem here, and I make a lot more than that on this place. So I know exactly where my income's coming from and how much it is. So I want you to know that. Then I want you to take a whole bunch of this$350 and pay down your mortgage. I want you to get your house paid off fast as you can.

58:21Dave Ramsey:And your instinct on not listening to a bank who was trolling you was very wise. The last thing you want to do is listen to Chase or J.P. Morgan for anything, or Fifth Third. You don't want to listen to them for anything. This is just where I deposit money and where I run my checking account and my debit card. That's the only place I use them for. I'm not using a bank for investment advice. They don't have good investment advice. They give you banker advice. They give you good banker advice. So you need to sit down with a good broker to do your long-term investing. But we teach people at your stage, and way to go.

59:05Dave Ramsey:You're doing extremely well, Brian. Obviously, you're a bright guy. I mean, idiots don't generally make$300K. And so you're doing really, really well.

59:16Jade Warshaw:What's the purpose of the$350K set aside in cash? How is it earmarked? It's just what I've been saving. And I'm at the stage now where, you know, I ran everything to chat GPT. That's what the kids are doing, you know. And everything came back that I need to interview some CPAs because I really don't know.

59:36Dave Ramsey:No, you don't need to listen to chat GPT either about investment advice.

59:40Jade Warshaw:But I do want to know, is that your personal money or is any of your business retained earnings part of that? Like how is that? How is it? So that$300 ,000 is a mutual checking account that me and my wife have access to.

59:55Dave Ramsey:Good.

59:55Jade Warshaw:And then that's not including the money that is in my businesses that will hold it for six months. Good. So I include that.

1:00:04Dave Ramsey:Good.

1:00:05Jade Warshaw:But I don't include that as my money. Good. That's my doomsday.

1:00:09Dave Ramsey:That's why you need retained earnings in the business. So what we would teach you to do is to get a good investment advisor that has the heart of a teacher. and we'll sit down with you and your wife and teach you about some good ways to put some of this aside. You need to get some 401ks of some kind going and some Roth IRAs going of some kind. And there's several things you can do in your situation depending on how your companies are set up. And then you're going to have an emergency fund of three to six months of expenses set aside. So some of this$350 ,000 will still be sitting there. And you could call it$50 ,000.

1:00:44Dave Ramsey:You have a$900 ,000 mortgage, I think you said. So I'm going to throw$300 ,000 at that. And then I'm going to say, how fast can I pay off that$600 ,000 and have a paid-for house out of this wonderful income I have from this company? And you're living very frugally, so you're doing a great job. And so, you know, let's pay that house off in three or four more years. And, I mean, in the meanwhile, start some investing for your retirement plans, and you're going to become very, very wealthy. you're not going to become very wealthy just dumping 350 in a high yield savings let's talk

1:01:18Jade Warshaw:about why though because somebody listening is like well that sounds pretty good to have 350

1:01:22Dave Ramsey:thousand dollars and just sitting in cash it's not bad it's better than not having it right but i mean there's somebody listening going well why do i need to invest that i i i'm i'm afraid

1:01:35Jade Warshaw:of investments i'd rather just have it sitting in my account it's not losing money is it and so that's the person that I want to speak to because I do think that it probably feels good to have money there, but you have to think about what that money's doing over time. And if it's not in a high yield savings account and it's just in a regular savings account, then you're really earning nothing on it. Even if it's in a high yield, maybe you're at 3.5, but if you invest it, you can have a better rate of return over time. I think you said earlier, 11.8 % has been the average return. Yeah.

1:02:06Dave Ramsey:In the last three years, the average has been north of 20%. Yes. But that's not normal. But let's just say, for instance, you took the last three years, okay, 20 % of$350 ,000 and you made three instead. So, but 20 % would be$60 ,000 a year, right? Yes. $70 ,000 a year. Okay. And, and, and could have made$70 ,000 a year for the last three years. That's a lot of

1:02:29Jade Warshaw:money.

1:02:29Dave Ramsey:And so that's another 210. But instead we made 3.5. Yeah. I made 3 % on it. And so, I don't know. More than. It's like nothing. More than half. Yeah. In other words, you lost tens of thousands of dollars per year by not having it invested. And that's what financial people, like I was trained, call opportunity cost. You miss the opportunity to make an average of about$70 ,000 on that for the last three years. Not to mention if you'd left it in there, you would have made 20 % on the 70 and then 20 % on the 140 on top of that. But we're not even talking about that. And that's not normal. That's not every year.

1:03:11Dave Ramsey:But it's actual facts in the last three years. That's what it would have been. And so instead, you made 3%, which is like$9 ,000 per year.

1:03:23Jade Warshaw:It's a big deal.

1:03:25Dave Ramsey:That's the missed opportunity on your money. Because when your money is one place, it can't be another. It loses the opportunity to go to work.

1:03:38Thank you.

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1:05:24Dave Ramsey:Nicole is in Tulsa. Hi, Nicole. How are you?

1:05:27Jade Warshaw:Hi, good. Thank you. How are you?

1:05:29Dave Ramsey:Better than I deserve. What's up?

1:05:31Jade Warshaw:Thank you. So I have listened to you guys since I was about 17. I'm almost 38 now, and you guys have just changed my life just tremendously. So I just am so, so grateful. My most basic question is I am currently working on my doctorate program. I work full time, and I just have very little margin between my schedule and my budget. And I'm getting just burned out and just wanting to hear from the experts on what you would recommend just to keep staying the course and to, you know, just keep at it. How much time do you have left in this situation of working full time?

1:06:18Dave Ramsey:How much to finish up the doctorate?

1:06:21Jade Warshaw:So I have about 16 hours after this semester, so I'm pretty close. but just, you know, pull the teeth to get there.

1:06:30Dave Ramsey:And then dissertation, right?

1:06:33Jade Warshaw:That includes the dissertation, but I have it almost completely written.

1:06:38Dave Ramsey:Oh, okay. But you have 16 hours of classwork also?

1:06:43Jade Warshaw:Yes, sir.

1:06:44Dave Ramsey:Okay, cool. So what are you going to do, one semester, or how long does that take?

1:06:50Jade Warshaw:The trajectory is about a year and a half, That's just how the coursework falls within the school that I'm at. Okay.

1:06:57Dave Ramsey:So it's not a real heavy course load then.

1:07:00Jade Warshaw:It's not. No, sir.

1:07:02Dave Ramsey:Okay. And so you run a full-time job, 40 hours? Yes, sir.

1:07:06Jade Warshaw:Yes, sir.

1:07:07Dave Ramsey:So what do you make?

1:07:09Jade Warshaw:Right now I make about 50.

1:07:11Dave Ramsey:Okay. And you can't live on that?

1:07:14Jade Warshaw:I can. I've got a very, very tight budget, but I have about probably, you know, 15 30 bucks left over at the end of every month is it just you just me okay um i i want to know more about the money uh you said you've only got 15 or 30 do you have debt i don't know so i'm in baby step four um so i and i've saved up um already for the school so um i have just about what I need to finish that above my six-month emergency fund. Probably my biggest hurdle is just my rent. How much? I'm sitting at about$1 ,200 a month for that. It's not as bad as I thought you were going to say.

1:08:03Dave Ramsey:So you said four. You're putting 15 % of your income away in retirement?

1:08:09Jade Warshaw:I'm not right now. So you're not in four. Okay.

1:08:13Dave Ramsey:All right.

1:08:13Jade Warshaw:Okay. So there's a couple parts to this. The first part of your question is how do I stay motivated, which just sounded more like a just an emotional space of staying motivated till the end. And then it sounds like there's also a financial component, which is also my budget is tight. Right. Correct. I mean, in this case, let's talk about the budget first. In this case, it sounds like every square inch of your time is accounted for. Am I wrong or am I right? You're beyond right. Okay. So then the next place we can look is, is there anything that you can cut out of your budget? Is there anything that is worth changing for the next year and a half to make this thing better?

1:08:52Jade Warshaw:I'm looking at your rent, but I think to myself, you're probably in some sort of a lease. You've got a year and a half. I don't know that that's worth shaking loose.

1:09:03Dave Ramsey:So what do you do for a living? Sure.

1:09:07Jade Warshaw:So I've been working in the mental health field for the last eight years or so. So I've been working in the health field.

1:09:15Dave Ramsey:Doing what?

1:09:17Jade Warshaw:Right now I'm doing case management. I have been doing therapy. I shifted that just to have a little bit less stress to be able to kind of keep myself going.

1:09:27Dave Ramsey:And your Ph.D. is in counseling or what?

1:09:30Jade Warshaw:It's actually in ministry. So it's merging the Christian field with therapy, trauma, all of that.

1:09:38Dave Ramsey:And what are your plans to do with that?

1:09:41Jade Warshaw:Sure. I'd like to merge it within therapy as well as shift into ministry as well. So I know it's not a real high-paying degree, but I know with therapy, shifting into that, I can nearly double my income.

1:09:56Dave Ramsey:I don't know why you couldn't do therapy through the lens of ministry and make excellent money.

1:10:01Jade Warshaw:Mm-hmm.

1:10:02Dave Ramsey:I don't know why you have to take a back seat just because you use the word ministry in the sentence.

1:10:09Jade Warshaw:Sure. And that's definitely part of my goal is to be able to do that.

1:10:14Dave Ramsey:Yeah. And with a Ph.D. you can teach as well.

1:10:17Jade Warshaw:That's part of the goal as well.

1:10:20Dave Ramsey:Okay. We want to make sure we monetize all of this hard work off the back. and don't in the name of saying I'm holy or I'm doing ministry accept less than your worth in the marketplace. Instead, go be worth that in the marketplace, and that is a ministry. So you serving people in the counseling or mental health space with a faith-based element is hugely valuable and sought after, by the way. So that's not something that you have to make, you know,$60 ,000 after going to all this work and doing a PhD. Don't do that. So anyway, I just want to pep talk you there. I think you can do a lot with this.

1:11:02Dave Ramsey:And I want you to go make$100 ,000 plus, okay, when you're done with this PhD.

1:11:07Jade Warshaw:I think there's the motivation to continue right there.

1:11:09Dave Ramsey:Then it's worth it. Then it's worth it to just push on through. But, you know, you've gotten this far and the light is at the end of the tunnel. lay out a detailed track that says on this date i will be done dissertation will be reviewed and completed the um classwork will be completed and they're going to put doctor in front of nicole's name okay on this date lay that out and then you start to go you can almost put that on the wall as a thermometer and then just every month you check it off and work your way through you know like like you were in kindergarten or something but it's good for you to visually see the feedback that we're making traction, we're heading in the right way, we're going to be okay, that helps.

1:11:52Dave Ramsey:The reason I was asking about all this is because you're doing your coursework and your casework Monday through Friday, if there's anything you can do on Saturday to add$1 ,500 a month to this situation, it's probably going to make your life a lot better. And you're not going to die from fatigue because you're young and you've got the ability to push through these things. Nothing we're doing here is out of control. And it's not forever.

1:12:18Jade Warshaw:And if you can make it something, if you can make it a side hustle that you enjoy doing, like if you're flipping furniture, right? If you enjoy arts and crafts, that's a great thing for you to do. Flip a piece of furniture, make 1500 bucks off it. Right. Or if you enjoy, you know, working with your hands, do something that also feels like a little bit of a hobby that you enjoy while you're making money. I think that'll make it easier for you.

1:12:39Dave Ramsey:You can do a little self-employed idea of some kind. Or you could stay right in the mental health field and do some kind of freelance casework of some kind. I don't care, but$1 ,500 a month would be a good trade for your Saturdays. And would give you some breathing room in the budget, which also helps you fight through the fatigue and go, I'm going to make it. I've only got this many more months. I've got eight months. I've got seven months. I've got six months. I've got five months. I've got four months. We're going to make it. and you start to, but you got to put it down in detail where your mind believes that this is going to be over, because it is going to be over if you plan for it to be over.

1:13:18Dave Ramsey:You don't want to be a perpetual student. No one, well, some people do. No one should. No one should. Yeah, that's a better way of saying that. Wow. Yeah, you got this.

1:13:29Jade Warshaw:A sacrifice to win. She's in it.

1:13:31Dave Ramsey:It sounds like that just, you know, the other thing I would do is make sure someone else in the Ph.D. program knows your story, what you're doing. Sit down and share this. Even if you just share each other's tears for a little bit or whine together. We're going to whine a little bit. We have a little whining session here. This is hard and I'm tired.

1:13:51Jade Warshaw:That's good. You need somebody to be able to talk to you like that.

1:13:53Dave Ramsey:That's okay. There's nothing wrong with that. It does give you energy because if you're fighting the dragon all by yourself, you can get burned. That's true. And you need the other people speaking into you and speaking over you, good things that is. So, I mean, that's what you do all day long for other people. You know, that's what a caseworker does. You speak life into the case, into the situation. You bring wisdom to the situation, perspective into the situation and keeps it moving. So, hey, I got a feeling you're going to do great. I want to hear how this whole PhD thing works out with your ministry in quotes.

1:14:30Dave Ramsey:Yeah, quotes. That's where it belongs.

1:14:38Thank you.

1:15:27Dave Ramsey:Today's question of the day is brought to you by Why Refi? If you've fallen behind on your private student loans and have stopped making payments, It can feel like every door is closed, but Y-Refi helps borrowers explore low fixed rate refinancing options that fit their budget. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:15:53Jade Warshaw:Okay. Today's question comes from Rachel in Louisiana. She says, my husband and I have five kids between five and 15 years old. We have baby step four in place through our jobs, but saving for college seems overwhelming with five kids. My husband and I are in our 40s with over$600 ,000 in retirement. Would you recommend reducing retirement contributions to 10 % for a season to throw more money at college? I wish I knew how old the others were.

1:16:22Dave Ramsey:I wish I knew how much they made.

1:16:23Jade Warshaw:I wish I knew how much they made too. We're missing some valuable information here. I think at first glance, and I wish I knew how much you already had saved.

1:16:33Dave Ramsey:I don't think you're going to make it.

1:16:35Jade Warshaw:Yeah.

1:16:36Dave Ramsey:Okay, here's why. Let's say you make$200 ,000 a year. If you reduce your retirement contributions by 5%, that's$10 ,000 a year. For five kids, that's$2 ,000 each. And you've only got three years before the first one gets there. That's$6 ,000. you've got eight years before the next one gets there. That's$24 ,000. So this 5 % does not fix your problem. It's not going to change it. Unless you make, you know, like$700 ,000 a year, which you don't or you wouldn't have been writing this email.

1:17:12Jade Warshaw:I agree.

1:17:12Dave Ramsey:So the, you know, you've got, you're going to have to skin this cat another way because you've got this idea that retirement is blocking it until you actually put the real dollars to it, not the percentages.

1:17:26Jade Warshaw:Yeah.

1:17:26Dave Ramsey:And then you can say that. Now, if you completely stopped it, it's not$10 ,000, it's$30 ,000. You know, that would help, but it's still not going to get you there completely. So what I'm doing is I'm going to begin having training sessions with the children on what college looks like. You want some help? You ready, set, go. Number one reason people take out student loans is not that they went to college. It's that they went to the wrong college. One they could not afford.

1:17:54Jade Warshaw:Love a community college.

1:17:56Dave Ramsey:Love a community college. Free in most states, near free in the rest of them for the first two years. Get your basics out of the way. Live at home.

1:18:03Jade Warshaw:Love working through.

1:18:04Dave Ramsey:I need the college experience. Well, you had to have other parents because we don't have the money for you to have the college experience. We're not financing college experience. We're financing education here. That's right. Number one goal, get the education, not play beer pong.

1:18:18Jade Warshaw:But you can work.

1:18:19Dave Ramsey:Oh, that's number two.

1:18:21Jade Warshaw:I love working through college.

1:18:22Dave Ramsey:After college choice, we could work. Love it. And guess what? But you can earn a lot of money while you're in college working. Everybody that worked while you're in college, raise your hand out there. All of them just raised their hands in the lobby. OK, come on. I mean, seriously, I work 40 to 60 hours a week. I was so glad to get out of school. So that it was so that all I had to do was work.

1:18:42Jade Warshaw:It's easier.

1:18:43Dave Ramsey:I had to work and go to school. Shut up. I wanted to graduate. I wanted out of there.

1:18:47Jade Warshaw:I know that's right.

1:18:48Dave Ramsey:So it's not a pleasant experience. It was something I was getting done.

1:18:51Jade Warshaw:And there's time for scholarships here. They've got time to. I mean, they got a five-year-old through 15. There's a lot of money there for scholarships.

1:18:58Dave Ramsey:Yeah, absolutely. So where you go to school, work while you're in school, get scholarships. These are the three big things. By far the biggest is where you choose to go to school because that first two years is anywhere between zero and$100 ,000 a year.

1:19:15Jade Warshaw:Yeah. Oh, gosh.

1:19:17Dave Ramsey:Think about it.

1:19:18Jade Warshaw:I'm mad because I did not take our advice. And I understand.

1:19:23Dave Ramsey:Well, you ended up with$200 ,000 in student loan debt. Yeah. Yeah,$265 ,000, right?

1:19:27Jade Warshaw:Yeah. Most, yeah.

1:19:28Dave Ramsey:Is that right? I'm not rubbing your nose, man. No, no, no. I'm just trying to remember.

1:19:30Jade Warshaw:I'm just saying most of that was from Sam.

1:19:34Dave Ramsey:Oh, okay. I wish we'd have gotten a hold of Sam. Okay. That's fair. We'll throw him under the bus since he's not here. Hey, Sam, next time I see you, I want to see the bus tracks. Okay.

1:19:44Jade Warshaw:He's used to it.

1:19:46Dave Ramsey:Yeah. But either way, either way, it's what you signed up for when you married him, too. That's true. So that goes with it. That is true. The thing is this. You can get a college education if you work while you're in school, apply for every scholarship in sight, go to a school you can afford, which includes probably the first two years you're in a community college, and certainly after that you're doing in-state tuition. And by the way, let me help you people with this. No one cares where you went to school.

1:20:15Jade Warshaw:They really don't.

1:20:16Dave Ramsey:No one cares where you went to school. If someone is hiring based on where you went to school, you don't want to work for those people. They're not smart people. 78 % of the Fortune 500 companies, the largest 500 companies on the stock exchange, 8 out of 10 of them, their CEO went to a state school. Hey, Harvard, hold my beer. I'm not paying Princeton MIT rates because it puts me into a job. There's no research that shows, not one iota of data that shows you're successful based on where you went to school. None. You can't find it. It's all BS. It's all people who are stuck on prestige, not education.

1:21:09Dave Ramsey:Don't get caught up in prestige. I'm telling you, it's not worth it. Now, if you've got an extra half million laying around and your kid wants to go to Vanderbilt, fine. If you've got an extra half million dollars laying around and you want to put your kid at MIT, I'm okay with that. Or Northwestern, I'm okay with that. But you've got to have the extra money laying around. This lady doesn't. And this lie that we have sold to people in America that where you went to school is equated with your success is absolute data-based bull crap. It does not exist. So choose a school you can afford, and you will get a good education.

1:21:52Dave Ramsey:You don't believe me? Last time you hired a lawyer, did you ask them where they went to school? You don't believe me. Last time you hired a cancer doctor, did you ask them where they went to school? Did you ask your dentist where they went to school? No, you didn't. You asked them if you're going to hurt me while you clean my teeth. That's all you wanted to know. you did you ask your veterinarian before he gave your puppy a vaccination where he went to school no you didn't and you don't have any freaking idea i rest my case boys and girls all you care about is do they have the expertise did they get the knowledge at the school that they went to to do the job i'm asking them to do that's the only thing you care about when i'm hiring i don't care where you went to school.

1:22:36Dave Ramsey:I've never hired a person based on where they went to school. And we got a thousand people working at Ramsey. We hire them based on, can you do the freaking work? Do you know what you are doing on the thing we hired you to do? That's all we care about. I don't know if any of the people sitting in the booth even have a degree, much less where they went to school. Or even if they got out of high school, one of them might not have.

1:23:05Dave Ramsey:I'm kidding. Not much. I'm serious, guys. This is a deal. Can you do the job? Are you a professional? Do you have the discipline? Do you know the stuff in your discipline? If you're an accountant, you should be able to do accounting. And you can learn to do that at a school no one ever heard of. Just as well as you pay$100 ,000 a year for. So it's bull crap. This is the message we gave our kids. That's we had kid training.

1:23:35Jade Warshaw:But then you have to add in the point that you're making this decision when you're 18. You don't even fully know who you are yet, which is where you get to the point where you're spending this crazy amount of money for a degree that you don't even know if you're going to end up working in that field. 50 % of folks don't even work in the field that they got their degree in.

1:23:51Dave Ramsey:Yeah. Also, Rachel, last thing. I'm going to give you one more piece of advice. download and watch tonight with the whole family five years old and beyond the YouTube documentary Borrowed Future. Award winning. We did it. When your five-year-old reminds you when they're 25 that you showed them this when they were five and they said, oh, I'm not going into debt to go to school, that nobody cares where I went to school. All I care about is getting an education to do the thing I want to do. When they remind you of that 20 years from now, because they watched this documentary and you didn't think they were watching it because they're five, they were watching it.

1:24:32Dave Ramsey:You believe me they were watching it. Ramsey kids will tell you. They learned stuff like this growing up. Where you go to school doesn't matter. What matters is the person in your mirror. Are you going to go out there, leave the cave, kill something, and drag it home? Your perseverance, your integrity, your tenacity, your raw intellect, your ability to pivot in the marketplace. These are the things that cause you to be successful. Your character, not freaking where you went to school.

1:25:28Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host. Jade Walshaw Ramsey personality. Number one bestselling author is my co-host. Sydney is in Augusta, Georgia. Hi, Sydney. How are you?

1:25:42Jade Warshaw:Hi. Hi, Dave. Thanks for taking my call.

1:25:44Dave Ramsey:Sure. What's up?

1:25:46Jade Warshaw:I'm wondering how I can help my husband finish paying off our debt and become a baby step millionaire as a stay-at-home mom of two.

1:25:55Dave Ramsey:Good for you. What's he make?

1:25:58Jade Warshaw:He makes$80 ,000 a year.

1:26:00Dave Ramsey:Very good. Very good. How much debt have you guys got?

1:26:04Jade Warshaw:We had about$67 ,000, and we've paid off$30 ,000 in the last year.

1:26:10Dave Ramsey:Way to go. Way to go. Wow. How'd you do that?

1:26:15Jade Warshaw:By a lot of couponing and scrimping and budgeting. Wow. So you were living on 50, 45? Yes. Holy smokes. Way to go.

1:26:26Dave Ramsey:Good for you. Good for you. That's how you do it. You want to know how to get there? That's how you do it. The only difference is you're probably going to dial back the intensity after you get out of debt. But all it is is you're intentional. You're doing this on purpose. How old are you guys?

1:26:43Jade Warshaw:Uh, I just turned 30 and he's, I'm sorry, I just turned 33. He just turned 29.

1:26:49Dave Ramsey:Okay. Very cool. What's he do for a living?

1:26:52Jade Warshaw:Uh, he's in the army.

1:26:54Dave Ramsey:Oh, very good. Planning to be career or what?

1:26:57Jade Warshaw:Uh, we're not sure at this point.

1:26:59Dave Ramsey:The officer, I guess.

1:27:01Jade Warshaw:Uh, he's hoping to make, uh, what is it? Staff Sergeant pretty soon.

1:27:06Dave Ramsey:Okay. Good. Good. Yeah. All right. Fine. Well, good. Tell him thanks for serving this country. You too, because you get to go along for the ride. And so, well, you're number one. You've obviously been listening to what we teach. Your number one wealth building tool is your income. And if from age 30 to age 60 or 70 you invest 15 % of your income, you're going to be multimillionaires. I don't know how long before you reach the first million. But you could get on the RamseySolutions.com website, click on the retirement calculator, and play with some numbers to give you the assurance that you're going to be able to do it.

1:27:47Dave Ramsey:But as a stay-at-home mom that coupons and is tight on the budget and knows how to watch and make everything squeak, you're a home economist. You're cooking from scratch. The kids' clothes aren't wearing out. They're not sick all the time. and you're saving tons of money by operating your household the way you're operating it. And you can continue to do that without putting a huge strain on the family. Y 'all have been very intense. But when you get out of debt, I want you to lighten up the intensity a little bit, but I want you to just run the numbers. The two of you sit down with that retirement calculator tonight, and if you invest 15 % of your income from the time you're out of debt until you retire, it's at least$2 million right now.

1:28:32Dave Ramsey:that's where you'll be. Okay. Um, it may be three when you put it in, I'm not sure. Okay. But, um, yeah, I want you to do that. And then as far as being a baby steps millionaire, when you get the house paid off the value of the house, plus whatever you've got saved, I predict you're going to be there in about 10 years. So you'll have your first million dollar net worth in about 10 years. That's what it sounds like based on the math.

1:29:00Jade Warshaw:yeah is that okay we yeah we hope so i mean because we're also going to be looking at if he does not stay in the army moving back home and we know that's going to selling our house here which we're not attached to whatsoever and then buying land back home where's back home

1:29:18Dave Ramsey:in texas okay all right yeah so not unaffordable i hope no okay very affordable good yeah okay so And, of course, he'll need an income, a career for what he does after he leaves the military, right?

1:29:32Jade Warshaw:Yes. He's gotten several job offers that are very high paying for us.

1:29:37Dave Ramsey:What kind of income?

1:29:41Jade Warshaw:Making it probably about double from$160 to$180. That's awesome. You sound worried. What are you worried about? I'm not so much worried. I just I feel like I'm not really pulling my weight right now because I just take care of our kids. And my husband is just. Oh, wow. Yes. I say just.

1:29:59Dave Ramsey:You're raising the next Billy Graham and you just took care of your kids.

1:30:04Jade Warshaw:Yeah. But think about. Hold on. Hold on a second. Think about for a second.

1:30:08Dave Ramsey:Don't tell Sharon Ramsey that she just raised Rachel. OK.

1:30:12Jade Warshaw:Think about for a second all the tasks that you do inside the home and think for a moment what it would take if you were to. If you were to go away and you had to pay someone to do those tasks, wash all the clothes, wash all the dishes, keep the house clean, keep the kids clean, get them where they're going on time, pick them up. You'd have to hire a live-in full-time nanny to do that job.

1:30:35Dave Ramsey:We're talking Mary Poppins here.

1:30:37Jade Warshaw:Yeah. That is real economic and financial value. It is 100%. It's just baked in. You're just used to doing it.

1:30:45Dave Ramsey:It equates to around$50 ,000 or$60 ,000 a year.

1:30:47Jade Warshaw:Maybe more, depending on how many kids.

1:30:49Dave Ramsey:Yeah.

1:30:50Jade Warshaw:Well, my husband wants five someday. Listen, cha-ching.

1:30:54Dave Ramsey:Well, that's a different discussion. But the point is, you guys are fine. You are not a princess. You are a person who's content. You're adding value, tremendous value to your family, economically and emotionally, so that when he's at work, he's not worried about the home front.

1:31:13Jade Warshaw:Yeah, that's what he tells me.

1:31:14Dave Ramsey:Zig Ziglar used to call it the home court advantage. You know, when a team plays on their home court, they've got the home team cheering for them. They have an advantage of several points over the visitor. You know what I'm talking about, right?

1:31:26Jade Warshaw:Yes.

1:31:26Dave Ramsey:When you take care of the household, you're providing a home court advantage.

1:31:32Jade Warshaw:And you're playing a key role.

1:31:34Dave Ramsey:It's huge.

1:31:35Jade Warshaw:Key role.

1:31:35Dave Ramsey:It's huge. Let me tell you, the fact that Sharon Ramsey was there and was a solid rock and wasn't high maintenance allowed me to go do this Ramsey thing. This Ramsey thing wouldn't be there if I had to run home and do maintenance all the time. She never said, wait till your father gets home. They were hoping he was going to get home.

1:31:58Jade Warshaw:That's a relief. Maybe he'll save us. Daddy will save us.

1:32:04Dave Ramsey:No, I'm serious. I mean, there was no need. Yes, I did my part as the dad, but I'm telling you, the value that she did there is a thing. And I'll leave you this last one thing, and that is Proverbs 31. Who can find a virtuous wife, for her worth is far above rubies.

1:32:29Dave Ramsey:Wow. and her husband safely trusts her and he will have no lack of gain. You want no lack of gain? Get you a Sidney. I'm telling you, if you get a Sidney, you're going to have no lack of gain. You get a Sharon, you're going to have no lack of gain. And we just cannot say that enough. And the problem, and Deloney's talked about this before, Jade, and you and Rachel have done a great job of unpacking it as well. The problem is that in our culture today, guys can just go win. It's okay. Gals, they don't win even when they win. No, there's guilt and there's judgment. So if you go in the marketplace, you've abandoned your children.

1:33:12Dave Ramsey:If you go at home and you stay at home, you've wasted your life. Right. And you got guilt and shame coming from the stupid people in the culture, no matter what you do. No matter what. There's a no win. Or there's a win-win, whatever it is. Oh, I can be a great mom and work and be professional and produce in the marketplace. Or I can be a great mom and that is producing. Yep. Or I can be in the marketplace a lot and produce. And Bubba be changing some diapers. Hello. Yep. You know, I mean, this is all, there ain't nothing wrong with any of these scenarios.

1:33:45Jade Warshaw:Nope. You just have to be confident in the one that you select.

1:34:10Dave Ramsey:Listen up, folks. If you've got a complicated tax situation and you're putting off filing your return, it's time to talk with a Ramsey Trusted Tax Pro. Not next week, not April 15th, right freaking now. Ramsey Trusted Tax Pros know the tax code front to back. so they can do the heavy lifting to help you file on time and explain things to you with the heart of a teacher. But they can only do that if you get on their schedule before they book up. Go to RamseySolutions.com slash tax pro to find a full-time tax advisor who serves your area with excellence. That's RamseySolutions.com slash tax pro.

1:34:59Dave Ramsey:Well, we wish we could get to every call and question here on the show. So if you have a money question and want an answer for your situation, head on over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained only on proven Ramsey principles. If you don't know how AI works, it's artificial. It's not real. It's not intelligence. It's artificial intelligence. and it can only regurgitate the data set that you put into it. And so if your data set is skewed or screwed up or has bad information in it, it's going to produce bad information out the back. So this has not got that problem because we own it.

1:35:44Dave Ramsey:So there's nothing, no data set has been put into this except three years of calls off this show and how we answer the calls and all of Financial Peace University and all the articles we've written and all the books we've written, the Ramsey personalities and me. And they're all dumped into the data sets from all of those to answer your questions. And then the AI tool generates the answer, and it sounds really close, like exactly like you're listening to the show. It's not quite a smart aleck. I'm trying to get them to add my smart aleck in there a little bit or my mean side, like if I've had too much coffee.

1:36:21Dave Ramsey:But so far it's a little nicer than I am. But that's okay. We can go with that. Rachel's a little nicer version of me anyway, and Jade is too. So there you go. So ask your question at RamseySolutions.com or click the link in the description if you've been listening on a podcast or on YouTube. Ask Ramsey, the new AI tool, free, completely free. Give it a shot. All right. Troy is in Toledo. Hi, Troy. What's up?

1:36:46Jade Warshaw:Hi, Dave. How are you doing?

1:36:47Dave Ramsey:Better than I deserve. How can I help?

1:36:49Jade Warshaw:Great. My wife and I are self-employed. We're in our mid-60s, and we're approaching semi-retirement. My wife does all the financing and has put us in a very good position of life. I want to purchase an RV so we can start adventuring out. She wants to pay off the mortgage first.

1:37:12Dave Ramsey:How much money do you have that's a good position?

1:37:16Jade Warshaw:Well, we probably have like 1.25 in real estate. We have about 550 in neutral funds as far as our investment goes.

1:37:29Dave Ramsey:And how much is the mortgage balance?

1:37:34Jade Warshaw:About 425 on a 1.7 house that we just built three years ago.

1:37:41Dave Ramsey:And what's your income?

1:37:44Jade Warshaw:between we're self-employed um anywhere between three and four hundred a year

1:37:48Dave Ramsey:so you're gonna pay off the house in like two years right

1:37:53Jade Warshaw:no we're on a good track that we are approaching three to four she wants to push a little bit harder okay how much is the rv um we're looking anywhere between two and three hundred hopefully putting a hundred down okay oh financing yeah i would not buy it if i

1:38:12Dave Ramsey:I wouldn't buy it if I didn't pay cash for it. I would buy a used one instead of a new one because they really go down in value. Like unbelievable go down in value. That was a used one. And I would pay off the mortgage first. In the meantime, though, I don't mind scratching your itch. You have a great income. You've got a great net worth. You've done a great job. You're just not quite across the finish line. and I would scratch the edge just by renting one for the few weeks or weekends that you wanted to. I mean, you can rent that same$300 ,000 for nothing.

1:38:47Jade Warshaw:Yes. We have one, Dave. It's just not the one that... Oh, you already own one. Interesting. Yes. So would you be selling that one, taking the$100 ,000? Is that where the$100 ,000 was coming from? That's part of the$100 ,000, yes. Okay. And our concern is we're both relatively healthy, and yet we have some concerns that if we wait four or five years, We may not be in a position to do that.

1:39:11Dave Ramsey:Take the one you got and go on the road. Shut up. You have one. I know, but it's not a reliable one. The only difference is not that you don't get to go while you're healthy. The difference is you don't get to go in the style you wanted to go. This is true.

1:39:26Jade Warshaw:How old are you?

1:39:27Dave Ramsey:65 or 66, you said.

1:39:31Jade Warshaw:I'm 62. My wife is 67. 62 or 67.

1:39:33Dave Ramsey:Yeah, okay. Yeah, I mean, yeah, you're doing great. You're doing great. But do not finance stuff, period, on what might happen someday. And all you're talking about is an upgrade here. It's like, I have a boat, but I want a bigger boat.

1:39:50Jade Warshaw:Yeah.

1:39:51Dave Ramsey:And I might die someday. Yeah, you're going to die for sure. And you're going to get sick before you die. It's usually how it happens. But yeah, you don't go finance a boat to celebrate that idea. No. No, no, no, no, no, no, no. Now, she wins the argument.

1:40:05Jade Warshaw:Yeah, I agree. Definitely pay the mortgage off first. Throw the flag. Boom, you're done. Even after that, don't finance it.

1:40:12Dave Ramsey:Victoria is in Washington, D.C. Hey, Victoria, what's up?

1:40:17Jade Warshaw:Hello. Nice to meet you guys. I just kind of started tuning in not too long ago. Cool. Which I regret for some financial decisions I've made in the past.

1:40:29Dave Ramsey:I thought you said you regret tuning in. I was starting to worry.

1:40:33Jade Warshaw:We all feel that way. I regret not tuning in sooner. We all feel that way. Well, I guess about a year ago, I was kind of drowning in minimum payments because I had racked up a good amount of credit card debt because I bought my house when I was 22, and I didn't understand the cost that comes with owning a house. And so about a year ago, I was looking through options, and I chose to do a debt settlement, which I didn't fully understand what that was, but they promised a low monthly payment that I could maintain, so I did it. And I'm currently on babysit two, and I should have all the two loans paid off by the end of this year.

1:41:14Jade Warshaw:And those two loans is – which I call the debt settlement a loan, but there's no interest on it. And then I'm finishing grad school, and I finished grad school at the end of this year. And so I'll have to start paying on my student loans, which are about$70 ,000, and that includes undergrad and grad. What will happen to your income when you finish grad school? Unfortunately, well, I'm also getting, I'm an engineer, so I'm getting my professional engineering license. I'm not exactly certain what they're, what I'm going to get. I'm hoping, it's not going to be a much of a large.

1:41:52Dave Ramsey:What do you make?

1:41:52Jade Warshaw:A big jump. I make 96.

1:41:55Dave Ramsey:Okay, so why are you getting all these licenses and graduate degrees if they're not causing your income to go up?

1:42:01Jade Warshaw:The graduate degree is more of a long term. hopefully get my income up. It's just that I'm so young and, I guess, inexperienced that it doesn't necessarily help me now, but it'll help in my career trajectory. How old are you? And then I'm 26.

1:42:16Dave Ramsey:Don't know if I believe that or not. I want you to investigate. I want you to investigate that, because one of the things we found is engineers have the highest probability of becoming millionaires of any career track. So that's really good.

1:42:31Jade Warshaw:I am civil, so we do make less than some. But that's another question I've been battling with is there's opportunities out there that I could leave my current job and make 70 % more than I do now. But I love what I do so much. I don't love it that much.

1:42:47Dave Ramsey:I could learn to love it a lot for 70 % more. You're talking about an$80 ,000 a year raise.

1:42:55Jade Warshaw:Yes, that's a no-brainer. Even if you just did it for three or four years.

1:43:03Dave Ramsey:Yeah, definitely.

1:43:04Jade Warshaw:So I am applying to that position. You never told us how much the first consolidation loan was for. That originally was for, it was for$40 ,000, and I think I owe$35 ,000 right now. Okay. And then my student loans are$70 ,000. And I guess my question is, I know that the snowball effect is supposed to pay off the smaller loan, But my student loans are going to have a 6 % interest.

1:43:29Dave Ramsey:Don't care about the interest. I care about you getting out of debt in 20 minutes. Take the new job. Make a lot more money. Pay off debt quickly. That's what I would do. Enlist them smallest, largest. If you pay it all off in a year, it's not going to matter.

1:43:43Jade Warshaw:Yeah, especially if you take the job where you're making double. You're making$180 instead of$96 or$160. And then you live off$60. It's just you.

1:43:53Dave Ramsey:Yeah, and just clean up the stinking mess. And if you pay it off in one year, the interest rates don't matter. They're irrelevant. Because there's no actual monetary creation by the interest rate that doesn't create any actual money. If you're going to keep it around like a pet for five years, now we worry about interest rates. But, yeah, you need to get in a tax zone. You are being classic engineer. You're overanalyzing. Hit this with an atom bomb between the eyes.

1:44:33Thank you.

1:44:55Dave Ramsey:Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems 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.

1:45:42Dave Ramsey:In the lobby of Ramsey Solutions on the debt-free stage, Patrick and Tiffany are with us. Hey, guys, how are you? Oh, we're fired up.

1:45:51Jade Warshaw:So excited to be here. Welcome.

1:45:52Dave Ramsey:Well, good to have you. Where do you live? We live in Rock Springs, Wyoming. Fun. Welcome to Nashville. Thanks. And how much debt have you guys paid off? $506 ,700. Wow. And how long did this take? 93 months. 93 months. And your range of income during that time? We started at$190 ,000 and we're now at$300 ,000. Cool. What do y 'all do for a living? I'm a maintenance manager in the oil and gas industry. Ah, okay.

1:46:20Jade Warshaw:Yep, and I'm in health care.

1:46:21Dave Ramsey:Good for y 'all. Well done. So I'm guessing with that period of time and that amount of money, you paid off your house. You got it. Look at it, weird people. Yes, sir. 100 % debt free. Yes. Way to go, you guys. So what's this house worth? About$650 ,000. All right, cool. And how much in your retirement this day? About$525 ,000. So you broke the Baby Steps Millionaire's barrier. We got her. You're in there. I like it. How old are you two? Both just turned 40 about a month ago. So you're 40-year-old millionaires in Wyoming. Paid for house. The retirement is underway. You're making$300 ,000. Took 93 months to get the house and everything paid off.

1:47:02Dave Ramsey:So how did you get connected to Ramsey? What's your Ramsey story? So Christmas of 2017, my dad and stepmom, they always get their kids theme gifts. And that year was finance books. So I received Financial Peace Revisited by Dave Ramsey. I'd never heard of you a day in my life. So January, crack the book, start reading it. And, man, it just made sense. You know, you weren't trying to sell me anything. You were just laying things out. I knew my sister got another book by Dave Ramsey, and it was The Total Money Makeover. So I asked her, hey, can I borrow that book? She said, oh, yeah, I'm not going to read that.

1:47:39Dave Ramsey:So I read that in like a week, and there's the plan. It's just laid out, and, man, I couldn't believe it. I'm just so excited. So I approached Tiffany, and she was a little reticent, but took her a little bit to get on board. And March 1, 2018, we started the plan. From reading the book, I found out you had a radio show, started listening to that.

1:48:01Jade Warshaw:And I remember the very first week I was listening, a couple from Connecticut called in with a debt-free scream. And I was just like, what is this? I was so confused. But continued to listen to the show. And about three weeks in, listened to a debt-free scream.

1:48:15Dave Ramsey:and afterwards you said Proverbs 22 7 the rich rule over the poor and the

1:48:20Jade Warshaw:borrower is slave to the lender and you repeated the borrower is slave to the lender like three times and man it hit me like a ton of bricks it took my breath away and I was just I was just got so angry because I didn't want to be a slave and I never realized I was and so from that point forward we were on fire

1:48:43Dave Ramsey:started coordinating fpu i took financial coach master training and just man we've just wow slept and breathed this stuff in it's an amazing program and i just love what it can do for people i never thought a million years i'd be in this financial position where i am today and i'm just so grateful for your teachings and just want to spread the word to everybody and everybody that i meet you know it's always i always make sure it comes up in conversation because I just, I can't believe what this has done for us. It's been amazing. Thanks. Well, Tiffany, when we're through with your husband, we'll send him back.

1:49:20Jade Warshaw:Good gracious. It is. It's a daily conversation where we live.

1:49:26Dave Ramsey:The body snatchers have come. How did you get into it?

1:49:29Jade Warshaw:How did you intersect through all of this? So he sat me down and was like, hey, I want to do this. And I said, hold on, you're putting me on a budget because you spend a lot of money. Time out here. Time out here. And so he was like, just give me three months. Three months. And so I said, okay. So we went through our first 90 days. And after that, like I found that I wasn't affected, you know, like I wasn't affected much. I was still doing what I was doing because I'm not the spender of the family. So it didn't really hit me much. So it was like, okay, we're going to do this and put, you're going to put yourself on a budget.

1:50:03Jade Warshaw:That's cool. And then it just kind of worked out. And, you know, there were a couple kinks at the beginning and trying to figure out how, because we did, we kept a pencil box in our closet with envelopes that said gas money and grocery money. And I can tell you, I was very frustrated the first or second time I was out needing gas and had to go home to get money to go back to the gas station. But I mean, slight adjustments and it's worked out really, really well for us. And it's got us through some really, really hard, hard times in our family. And we're just very, very grateful that he was turned on to you guys.

1:50:39Jade Warshaw:Yeah, it's lived a lot of life in eight years.

1:50:41Dave Ramsey:You know, Carly was one, our daughter, when we started the program. Our son was born March 20th, 2020, or March 14th, 2020.

1:50:52Jade Warshaw:About eight months in, he was diagnosed with a real aggressive form of leukemia. Oh, no. You know, he's been in a 10-month battle, and unfortunately he lost his battle in September of 2021. But he was such a battler, and we miss him. Wow. So we've been through a lot. But this, you know, was a good distraction after that, just something to pour into and to keep focused and keep going. I've dreamt of this moment for eight years. Ever since I heard the first one, it's like, man, we're going to get there.

1:51:23Dave Ramsey:We're going to do it, and we're here. I can't believe the heartbreak that goes with the process. So the highs are high and the lows are low. Yep. Absolutely. I mean, it's very real.

1:51:33Jade Warshaw:And we felt them both.

1:51:34Dave Ramsey:Yeah, it makes it surreal, bittersweet, and all those words, right? Absolutely. Wow. Wow, I'm so sorry. Thanks. And I'm so happy for you. Well, thank you. I'm so proud of you. Thanks. And I know you brought family with you. I met the parents a minute ago. They're happy and cheering you on. So who were your best cheerleaders? Who were your best cheerleaders? The one that gave you the book?

1:51:52Jade Warshaw:Yeah. Yeah.

1:51:53Dave Ramsey:Yeah. I think they never thought I'd ever, you know, take it to extremes, obviously. Did your sister ever come around?

1:52:01Jade Warshaw:That's what I was going to ask.

1:52:02Dave Ramsey:Not yet? Not yet. Not yet? Okay. They're Dave-ish, I think. Okay. Someday. Yeah.

1:52:07Jade Warshaw:They'll get there. They'll start seeing it, what your life looks like, and it'll happen. Yeah. Yeah. Now it's just amazing. You know, we spent the past eight years getting out of debt, and now we're excited to be able to live and give and do what we want.

1:52:18Dave Ramsey:So what's the first big thing you're going to do to celebrate with all this money? Because you're killing it, man. Well, we went to Legoland last week. Woo! There you go.

1:52:26Jade Warshaw:What a celebration, right? We get out of debt and go to Legoland. So exciting.

1:52:32Dave Ramsey:It's all about who wants to go. Absolutely.

1:52:34Jade Warshaw:We told our daughter once we hit this milestone, she could pick her on vacation.

1:52:39Dave Ramsey:And she did.

1:52:40Jade Warshaw:So she did. So off to San Diego. So what's the one you're going to do?

1:52:42Dave Ramsey:What's your next vacation?

1:52:43Jade Warshaw:We want to do, maybe go on some cruises. We did one for our 10th anniversary, and that was really fun. I think we'd like to do a couple of them, go to the Caribbean and stuff. Yeah, good, good.

1:52:54Dave Ramsey:You live like no one else later, you can live and give like no one else. You're 40-year-old millionaires. Wow. And 100 % debt-free. Do you ever think you'd say that? No. No. Not at all. Not even close. Yeah.

1:53:06Jade Warshaw:Nope.

1:53:06Dave Ramsey:I love it. I'm so proud of you. Way to go. And I know the family is, all kidding aside, they're beaming when I came out there and met them a while ago. So absolutely incredible. So very well done, you guys. All right. You're a coach, and Tiffany, you're on board and partner in this whole thing. What do you tell people the key to getting out of debt is and being a millionaire by the time you're 40?

1:53:31Jade Warshaw:You know, the key, like they always say, is definitely the budget. But I think you get that fire in your belly. You get that anger and that drive, and you can change and do anything. So I think you've just got to get mad enough, and you'll change. You know, just like you always say, what you focus on is what you win at. And that's so true.

1:53:50Dave Ramsey:Simple advice, but it works. Amen. So nine years grinding it. Was it worth it?

1:53:56Jade Warshaw:Oh, absolutely. It's so worth it. Yeah. Anybody listening to this, just do it. Like Dave always says, just start. Just go. And man, it's amazing what it'll do for you.

1:54:08Dave Ramsey:I can't argue with the fact it worked. It's the way to go. Because you worked. You worked your tail end off. All right. Bring Miss Carly up. You said she's nine? Yep. Yeah. Come on, Miss Carly. You join in on the debt-free scream. Way to go, Legoland. I love it. That's a good suggestion. Well done. All right, Patrick and Tiffany and Carly from Wyoming. What was your son's name? Paxton. And Paxton, 100 % debt-free, house and everything, baby steps millionaires. By the time they're 40, count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

1:54:50Dave Ramsey:Woo hoo hoo hoo! This is how it works, boys and girls. Watch them. This is it.

1:55:20We'll be right back.

1:55:35Jade Warshaw:When I talk to people on The Ramsey Show, 90 % of the problems I hear come down to one thing, not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you. And that's why I want you to go download our EveryDollar budget app. EveryDollar not only helps you tell your money where to go with a budget, It also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life.

1:56:13Jade Warshaw:It's the same advice that you would get if you called the show. And it's right in your pocket. So don't keep living normal. Go download the EveryDollar app, answer a few questions, and get your plan today.

1:56:45Dave Ramsey:Our scripture of the day, Proverbs 14.30, A heart at peace gives life to the body, but envy rots the bones. Theodore Roosevelt said, I have never in my life envied a human being who led an easy life. I have envied a great many people who led difficult lives and led them well. Hmm. He would. He would. That's cool. Very neat. Jeff's in Austin, Texas. Hi, Jeff. How are you?

1:57:11Jade Warshaw:Good, Dave. How are you?

1:57:12Dave Ramsey:Better than I deserve. What's up?

1:57:14Jade Warshaw:Not much. So this call is mainly about my mother. She is on limited income. She makes about$1 ,600 a month from Social Security. And she hasn't made any afterlife plans. And we went to the funeral home recently, and they quoted us about$25 ,000 to$26 ,000.

1:57:37Jade Warshaw:I'm sorry. It gets better. So, you know, we don't have that kind of money. So they said, well, we could do this on a payment plan. Yeah, I bet you can. $600 for the next five years of your life. And I don't even know. Yeah, I don't even know if my mom has that amount of time. So I'm torn because these are her last wishes. Well, that's why I called in. I wanted to hear your opinion.

1:58:01Dave Ramsey:No, I mean, listen, I love people in my life, but the deal is it's not her. She doesn't have any money, right?

1:58:07Jade Warshaw:She does not have any money.

1:58:09Dave Ramsey:Okay, so she's not talking about paying for this. She's asking you to pay for this.

1:58:13Jade Warshaw:Well, she doesn't put it that way. She hasn't explicitly asked for it, but in a way, yeah.

1:58:18Dave Ramsey:But, I mean, that's the expectation. Like, she's not got a house that's going to be sold that pays for it.

1:58:23Jade Warshaw:She does own her house. It's in pretty bad shape, though, And honestly, I don't know what kind of money we're going to be able to get out of it.

1:58:30Dave Ramsey:Well, you're going to get$25 ,000 out of it?

1:58:33Jade Warshaw:I hope so. I hope at least that, yeah.

1:58:35Dave Ramsey:If she wants to spend her money on her funeral, I don't mind that. Okay. I wouldn't do that, but I'm not going to pay for it out of my pocket if I'm you. Okay. And I think that's absurd. I think she got sold by a salesman.

1:58:52Jade Warshaw:Yeah, they wanted$400 for a video that they were going to make with some of her pictures. Like, there was a bunch of add-ons and ridiculous things that they wanted to throw in there.

1:59:00Dave Ramsey:So, Mom, you did not live your life in a Mercedes, and you shouldn't die in a Mercedes.

1:59:06Jade Warshaw:And if she doesn't want to sell her home, then that's just because she doesn't. No, no, no. When she dies, it's no question. Okay. When she dies, sell the home. So I would pay for it up front and then—

1:59:17Dave Ramsey:No, no, no, no. You don't prepay a funeral ever. You pre-plan a funeral, but you never prepay a funeral.

1:59:23Jade Warshaw:You're saying that it's going to take some time from the time that she passes to get the money from the sale of the house. It's going to take a whole lot of time. Yeah, because her house is in horrible condition. So it's going to take over a year probably to get the sale of the house. And you're saying, how do I pay? We don't know that.

1:59:36Dave Ramsey:You could auction it the next weekend. I mean. Yeah, that's true. Because it's junky. Just have an auctioneer come out and sell the stupid thing and pay for the funeral. Yeah. But I really would advise her to spend money on the funeral appropriate to her situation. there's no gain spiritually in what you spend on a funeral. There's no gain for the people that are left behind that are grieving over what you spend for a funeral. And so, no, I really, I think she got sold.

2:00:07Jade Warshaw:Yeah, I think so too.

2:00:08Dave Ramsey:As a matter of fact, I would use a completely different funeral operator. I think this person's a slickster. Okay. Because if I own that funeral home, I don't sell that lady to a$25 ,000 package. Because this lady's broke. And asking you to put it on payments. I'm not doing business with this guy. Okay. I would go to a different funeral home and say, I want the cheaper casket. You can buy a casket at Costco. You know that.

2:00:39Jade Warshaw:Yes, I do. Absolutely know that.

2:00:41Dave Ramsey:And they're what,$1 ,300 or something? I saw it the other day. I couldn't believe it. That's crazy. Costco's got freaking everything. And if you buy six, you get a deal. No, I'm kidding.

2:00:49Jade Warshaw:This is getting worse and worse. But truly, the average funeral cost is somewhere between$7 ,800 and$8 ,500.

2:00:55Dave Ramsey:That's the average nationally. Yeah. And that's the average, including rich people.

2:01:00Jade Warshaw:Exactly. Thank you, Dave.

2:01:02Dave Ramsey:Yeah.

2:01:02Jade Warshaw:So it just gives you a clear indicator that you were being swindled.

2:01:06Dave Ramsey:I would set a budget of five to six grand if I were her. If I'm you, I'd be willing to pay that and be reimbursed when the house sells. I would not. And that's after she dies. You there?

2:01:20Jade Warshaw:Yeah, I'm here. I'm here. Yeah, I thought it dropped.

2:01:22Dave Ramsey:Okay. That's okay. So after she dies, we'll talk the funeral home and see how long you can wait to pay the bill. A lot of times they'll wait until the estate gets some stuff cleaned up. There may be a little bit of money in her checking or whatever. And you should have your emergency fund in place. And if you want to pay the$6 ,000 under the condition you're going to be reimbursed when the house sells, That's fine. I wouldn't do any more than that. That's plenty here. And I wouldn't do business with the people you did that to because that just creeps me out.

2:01:51Jade Warshaw:That's such a – you're 100 % right. That is such a hard conversation to have. That sounds like a terrible conversation. Yeah.

2:02:00Dave Ramsey:But, I mean, she can choose to do otherwise. Yeah, she can choose. But she doesn't have the choice to prepay it because she doesn't have any money. Prepaying a funeral, by the way, people, is really dumb. Never prepay a funeral. Preplan your funeral. That's wonderful. That's a gift to your loved ones.

2:02:17Jade Warshaw:You mean like buying the burial plots ahead of time?

2:02:18Dave Ramsey:If you want to buy the burial plot, pick the casket, pick out how the service, write everything down how you want it to go, and set the budget on it. And they can just write the checks when you die. Then that's a gift. People that are grieving don't have to make decisions.

2:02:30Jade Warshaw:Yeah, it's already been done.

2:02:31Dave Ramsey:Did mom want the Chevrolet coffin? Or did she want the Mercedes coffin? I don't know about mom. What would mom really want? Oh, brother. Write it all down. Don't bury me in the diamond. to wear it, you know, whatever. Write it all down. Tell people. That way when they're grieving, it's all planned. But do not write a check to the funeral home. Maybe buy the plots if you want to do that. But do not write a check prepaying the funeral home. Because from that point forward, you make zero return on your money except for the inflation rate of a funeral, which is about the normal inflation rate, about 4 % or 5%.

2:03:03Dave Ramsey:So you're making nothing on your money. Funeral home's got your money for, what, 5, 10, 15, 20 years? I don't know. That's a good and don't prepay just pay it when they pre-plan it is fine So I would say mom here's what I suggest. I love you I think a six thousand dollar funeral is fine. The average funeral in america seven and you don't have any money And I got to pay it when you die and it's got to be reimbursed out of the house And I need to see the will that says that and we can set all that up and i'll go to a different funeral home with you And we can pick out everything and plan it and you're going to be just fine and I'm going to make sure you're taken care of with dignity and we will all be sad either way.

2:03:43Dave Ramsey:Please don't spend the last$25 ,000 you have on this earth for a funeral home to have a profit.

2:03:50Jade Warshaw:Now, does your thought process on that, does that play out the same if you're wealthy, the opportunity cost on them holding that money?

2:03:59Dave Ramsey:For sure. Never prepay. I haven't prepaid. I don't recommend you prepay. If you want to buy plot, that's fine, but don't prepay a funeral. It's the worst deal ever. The younger you are, the dumber the deal is.

2:04:09Jade Warshaw:Well, yeah, because then they're holding the money even longer. Opportunity costs on that money. Yeah.

2:04:12Dave Ramsey:I mean, if you took$6 ,000 and you're 30, what's that going to be? It's going to be$600 ,000? Yeah. $600 ,000 over, yeah. $600 ,000 or$700 ,000 if it were invested. That's a good point. And what are you, King Tut? I mean, who needs a$700 ,000 funeral? I mean, come on. Okay. So no, you don't need that funeral. That's a bad deal. No, you just, opportunity costs a big deal on this stuff. And this is how these people make a living. Right. And they do really well. The margins are, as you might guess, based on this discussion, pretty incredible. Yeah.

2:04:45Jade Warshaw:Oh, boy. Yeah, because he was about to get sold.

2:04:48Dave Ramsey:Man, did get sold. Taking for a ride. Mama done got, Mama done signed up for the whole thing for her son to pay$600 a month for five, just a measly five years. Easy 60 payments. Oh, boy. Oh, boy. It's like a car payment on a casket.

2:05:02Jade Warshaw:It's a vehicle.

2:05:03Dave Ramsey:A hearse. Can't even drive it. Can't even drive it.

2:05:08Jade Warshaw:We're making too many jokes.

2:05:10Dave Ramsey:Well, I mean, you got to have some fun with this stuff. You do. I know. People are dying everywhere. That's right. That's right. We got to have some fun. All right.

2:05:18Jade Warshaw:So we've learned something valuable here.

2:05:21Dave Ramsey:Don't prepay your funeral. That's right. And if you want to pay a ridiculous sum for your funeral, you need to have that ridiculous sum in the bank. Don't ask your loved ones to pay for that. That's unfair. That is not right. Mom, you should not be doing that. And the funeral home sales guy ought to be smacked silly. That's just irresponsible at a minimum, immoral at a maximum. And so don't sell people stuff they can't afford people. It's not a good way to make a living. You should make a living otherwise. You should do something completely different from that. So, wow. Interesting question. It was a good question.

2:05:56Dave Ramsey:Yeah, very fun. That puts us hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:27you