Facts Are Your Friends...Not Feelings

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21:38Dave Ramsey:Breonna? Breonna? I don't know how you say this. Breanne? Breanne? Yes. Is it Breanne? Yes. Hi, how are you? I'm Dave. Good to meet you. Welcome from Indianapolis. What's up, Breanne? Yeah, so I just had a quick question. A little bit of a background to my question is, I am a 20-year-old college student that currently has no debt. I have almost a$1 ,500 emergency fund, and I am someone that's also trying to get better at budgeting. My question is, what advice do you have for somebody that is looking for somebody who is on the same track for a life partner? Is it too much to ask of a guy to have an emergency fund, to have no unnecessary debt to be able to budget?

22:27it? And then how do I explain that to people who think I'm just being too picky when all I want to do is be able to be smart financially? I love this question. I love that you're thinking about this. Is there somebody that you're seeing now or there's nobody in the picture right now? Well, about three months ago, I just ended a relationship that was a bad idea emotionally, mentally, and financially. Okay.

22:53Dave Ramsey:So three strikes you're out. What I'd be looking for more so than dollar amounts, I'd be looking for someone who has the same financial philosophy as me and is working towards the same goals as me. And we might be at different points along that path and that's okay. But if we see eye to eye on money and just the basic philosophy of money and debt and spending and wealth, that's a really, really good sign. That being said, I'm not interviewing every guy I go on a date with. I'm not interviewing them on the first date, right? Because there's also opportunity for people to evolve. And so I'm looking for the things that show this person is interested in personal growth.

23:39This person is interested in growing and getting better, not necessarily changing towards me, but getting better. yeah because the relationship i just got out of there was no no sense of knowing how to do a budget unnecessary purchases for a vehicle and just multiple i don't know what we call red flags sure yeah yeah and that's fine is it too much like is it unrealistic to have some financial

24:09Dave Ramsey:expectations for it i don't know financial expectations are the question it's it is it is it's not what we would recommend that you say okay you have to have a ten thousand dollars emergency fund and be doing a monthly budget let me see your budget or you're not or you're not available no that's not that you're not eligible no that's not what i would say i would not tell my own kids to do that and i did not and i'm freaking dave ramsey okay so um my kids were taught to look for someone like jade said that's into personal growth they have character they have some maturity because a lot of times financial irresponsibility just complete irresponsibility is just tied to immaturity it's like it's like a four-year-old in the cereal aisle uh i'm keeping my four-year-old grandson taking him to the to the fair and he has a complete meltdown if i don't give him what he wants that did not happen by the way but it would be like dating that person right And so give me what I want.

25:07Dave Ramsey:I want it. I want it. And I get it. I'm going to go into debt and I'll get whatever I want. And I don't need to. I mean, you know, and you just hear this kind of pattern in their emotional or lack in their emotional maturity or lack of it. And so maybe they don't have an emergency fund. Maybe they didn't come from the exact same background you came from, but they're going somewhere and you can see that and you believe that. That's what I'm looking for more than let me see your budget and let me see the balance on your emergency fund account. I agree. That's very good. You know, and because you can get a budget and an emergency fund in about 20 minutes.

25:43Dave Ramsey:That's right. And I also want to say this because this is just part of, I think, dating people and meeting that person is you have to go on dates to get to know that person. You're not going to be able to avoid getting to know someone and liking someone and then maybe they don't meet the standards. And so there's a little bit of heartbreak. Sometimes you can't avoid that. And that's just part of finding that person. so this is not something that you can figure out the prerequisite and save yourself from it on the first date if that makes sense you have to go through the process a little bit and that's just yeah it's been so long ago i forgot so you got dave i'm not gonna i'm not gonna no really i mean i've been married 45 years all i remember is i chased her till she caught me That's all I remember.

26:34Dave Ramsey:So, oh, my gosh. Tommy's in Dallas. What's up, Tommy? How are you? Very good. Very good. Thank you. How can we help? I have a question. I'm an 84-year-old man. I'm still working. I have an office that I have other people run for me, so I don't have to do a lot of work. But I have recently gone through a divorce, and I'm looking at trying to recover. And I have a good income, and I have some debt. And my question is, which comes first? Should I pay off the debt and then stack some money away for retirement? How much debt do you have? I have$20 ,000,$20 ,760 in debt. And what is your income?

27:39$278 ,944.

27:40Dave Ramsey:It seems like you could pay off that$20 ,000 fairly quickly, couldn't you? I could. You probably have the money in the account right now to pay it off. I do. Okay. So if it's me and I paid it off, it would give me peace. I'm solving for peace. Yes. I mean, I don't think we're working with a 30-year time horizon here that you're going to go build wealth. You're 85. No. I'm 65. I don't think I'm working with a 30-year time horizon. All right. So, you know, I'm making decisions today on what give me peace or what influences and helps my family tree that I want to change. So long term with the kids, grandkids, that kind of stuff.

28:25Dave Ramsey:So how long were you married? 20 years. Wow. Oh, man. So you got married at 65 to that lady. And at 85, y 'all get divorced. That's wild, man. It is. What's in your nest egg? Not much. I have about$100 ,000. That's it? Mm-hmm. How much do you have in savings? $50 ,000. Okay. All right. Well, what was the$20 ,000 in debt? That was a credit card for$3 ,600, a car for$13 ,000, and a personal loan for$4 ,100. Wow. So when you are not going into this office at all, will you continue to rent it? Is it something that you still own that you'll continue to make income off of after you retire? I continue to make income as long as I'm in the picture.

29:24That's when I step away, walk away, income ends. So I'm hanging on as long as I can.

29:32Dave Ramsey:Yeah. Well, what I would do then is hang on as long as I can. And I'd write a check today and pay off the$20 ,000, and I would not borrow another dime the rest of my life. And then I would start setting some money aside, adding to that$100 ,000, which gives me the ability to step away. The bigger that number, that$100 ,000 number becomes, the easier it is to step away when you want to. Yeah, that office rental, is that a building that you own that you can sell? He's going into the business. Okay. It's a business. I own a business. Yeah. When he goes to the office, it's going to the business. Gotcha.

30:02Dave Ramsey:Yeah. All right. And so, yeah, that's what I would do. I would build the emergency fund. And then, you know, and she makes a point, when you step away, is there not some way to sell your ownership rights at that point also to someone? They ought to be worth something if you're making$270 ,000 out of it. So I don't know how you're structured or what you've got there, but that's a good question to go with it. First thing I do is pay off the debt. Second thing I do is start stacking cash in a good investment and adding to that$100. While you're making$270, that's pretty easy to do. And third thing I do is assess if there's anything in that business that, and we don't know that because we weren't talking to you long enough, that you can sell and make money on.

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32:36Dave Ramsey:If you're sick and tired of being sick and tired and you're ready to get off the rat wheel, don't be a rat in a wheel. That's normal. There's only one way to do it when it comes to money, and that's actually tell your money what to do instead of wondering where it went. That's called a budget, and the best way to do that is with every dollar. Now, this is not simply a budget, though. The budget's just part of it. It gets you started on working the entire Ramsey plan, and then as you work the Ramsey plan, the EveryDollar app's going to teach you how to walk those baby steps the shortest distance between where you are and being a millionaire, a debt-free millionaire, by the way.

33:13Dave Ramsey:In just 15 minutes, you're going to find thousands in hidden margin. You're going to feel like you've got a raise. Don't be normal. Normal sucks. Start your EveryDollar app for free in the App Store or Google Play. Skylar is in Richmond, Virginia. Hey, Skylar, what's up? Hey, Dave. How's it going, man? Better than I deserve. How can I help? Yes, sir. I am 19 years old. I have an eight-month-old daughter and a fiancé. I'm making about$10 ,000 to$11 ,000 a month consistently for the last eight months. Doing what? My question for you today is pressure washing and exterior window cleaning. Wow. By yourself.

33:54Yes, sir. Pull it by myself. I've thought about hiring technicians. I'm trying to go as long as I can without hiring people. But my question for you is how do I get out of debt at 19? With the money I'm making, my problem is I don't feel like we're seeing the money that I'm bringing in. I have about$58 ,000 in debt. That is from two cars,$1 ,600 in credit cards, and a$3 ,500 personal loan. Okay. Is part of the reason you're not seeing the money you're bringing in because you're not subtracting expenses out of what people are paying you? I mean, do you have it separated in the right ways? Yes, ma 'am.

34:36I think the problem is not a budget. I watch you guys a lot, and I've been talking a lot to the fiancé. We are on a complete scattered budget. We know what the bills are, and then it's constantly going to Walmart, buying this, buying that, eating out seven times a week. Her or both of you? Both of us. Okay.

34:56Dave Ramsey:All right. Well, let's stop for a second, and let's make sure we've got some basic structures in place that statistically tell us you have a higher probability of winning. You have a baby, you're 19, and you have a fiancé. When is the wedding scheduled? The wedding is scheduled at the end of this year, and we're not looking to spend a lot of money on a wedding. Honestly, I think what she wants to do is just go to the courthouse, get married like that, and then maybe have a little get-together. How about next week? Yeah, if it's a courthouse, how come we can't do it now? Next week. That sounds good.

35:35That sounds wonderful.

35:36Dave Ramsey:statistically, she and you have a higher probability of your marriage working, your relationship working, and your wealth building working, and your careers taking off as a married couple than you do as two shacking up, thinking there's a courthouse five months in the future. Okay? So I'm just giving you the data points. And so if you were my little brother, that's what I would tell you to do first. This weekend, we're having a wedding and a get-together. Okay, now, then let's move on. With your business, you are kicking butt because you are not afraid of hard work, and you're showing up on time, and you're pricing yourself reasonably.

36:14Dave Ramsey:I know all of this because you're making freaking$120 ,000,$130 ,000 a year as a pressure washer by your freaking self. You're incredible. Way to go. Very proud of you. It's not easy. I wake up about 8 o 'clock. You just get it. Somebody taught you how to work, young man, and I'm proud of whoever that was. You are a good young man. This kid has a good dad. You're going to have a good future. All right. Now, here's how we run a business. First thing is, do you have a separate checking account for the business? No, sir. My dad told me that I need to start doing that ASAP. Yeah, you need to do that today.

36:49Dave Ramsey:Go down to the bank. You don't have to have anything except your Social Security number. It's called a DBA account, a doing business as account. It's Skyler so-and-so, DBA, doing business as Skyler's Pressure Washing, or whatever the name of your company is. That's all it's got to be. Then here's how the math works, and it's going to help you get organized. 100%, not a dime less, of the money that you get from a customer for doing a job goes into only the business account. Got it? Got it. Now, what about— Just a minute. Let me finish. I'll walk you through it, and then you can ask, okay? Then the second thing is nothing comes out of the business account except you and the business expenses.

37:38Dave Ramsey:You don't buy groceries or lights or car payments out of the business account. I'm going to get there in a minute, okay? So what expenses do you have at the pressure washing company? You have gasoline you have to buy for your pressure washer and your truck that pulls it, right? Yes, sir. What other expenses do you have? Uh, chemicals, uh, you know, like mops, squeegees, right. Those things go out. You write a check for those or use the business debit card for those. You don't buy anything else out of the account. So in business, your revenue minus your expenses equals profit. Follow me. Yes, sir.

38:18Profit this month was nine five.

38:20Dave Ramsey:Good. Perfect. Now, when you take, if you want to leave a little bit in there for next month's expenses, that's fine. And so when we take$8 ,500 out of that account or$8 ,000 out of that account, we leave$1 ,000 or something in there. We don't want too much in that account, but enough in there to run the business. And we take$8 ,000 home. We write a check to Skyler that he's going to deposit in his personal account. Oh, wait. Taxes have to come out. And taxes on a self-employed business your size are about a fourth of your net profit. So on$8 ,000, that's going to be$2 ,000. So you write a$6 ,000 check you put in your personal account and a$2 ,000 check you set in a savings account for your quarterly estimates.

39:07Dave Ramsey:Remember this and go back and watch it on YouTube. Your quarterly estimates have to be filed on this, and you have to file and pay your income taxes quarterly, and they're going to be about 25 % of your profit. So now you're not going to get behind with the stinking IRS and mess up this whole thing. Now I got$6 ,000 in my account to now start working on$58 ,000 worth of debt. Now we sit down and say, all right, I got a budget this month of$6 ,000 and we put that in every dollar. Yeah. I think that was your problem having one account. You and your fiance were seeing, oh my gosh, there's$12 ,000 in here.

39:45We can eat out if we want. Yeah. And we can do whatever we want.

39:47Dave Ramsey:You can't eat out unless you sell both cars. Uh-huh. And now that Dave has separated that for you, I think you guys are going to have a of a more realistic approach that combined with every dollar. Now, I just want to know, you said you have two cars. We might be able to clear some of this out really fast. What are the cars worth? Yes. I have a truck. That's what I use for the business. Not being smart. I was 18 when I bought it. Not being smart. I sold it at the lot, signed the papers, paid 32 for it, and the Kelley-Bee book is$16 ,500. Yikes. And it has a salvage title. Yes. Okay. What about the other one?

40:21the other is her car it's a little bulk wagon it's uh we paid 24 it's worth 20. okay that's a lot of cars uh you mean for what you're earning you're right on the line but it sounds like you're interested in being debt free so i'd work on either knocking these out

40:38Dave Ramsey:or selling off at least one of them yeah i'd get them so i'd get them paid off very very quickly here's the good news you guys aren't used to making this kind of money so quit spending it you know you're just spending like you're in congress man so your dad's right get your every dollar budget out write it down put everything down and and dude you're way too smart to be acting this way all right and so and you're way too good at the other parts of this so we give every dollar a name six thousand dollars at the top every dollar has an assignment and don't go out to eat again she gets to cook my last question is should i tackle every extra dollar on payments or should i just bite the bullet and get rid of the truck or the car uh if you might get rid of the car but let's bite let's just attack the debt for a month or two and see how it feels after fighting it and fighting it and not going out to eat and not going on vacation and not doing anything except paying off debt because you've made a mess that you can clean up fast if you lean into it.

41:43Dave Ramsey:But if you screw around with it, you're going to be looking like this when you're 35. And you don't want to do that. The good news is for your truck, since it is your business truck, you could use your business money to pay it off. Nah. No, I would just pay it off. It's a personal. I signed for it personally. It just started its business. It's not a, yeah, yeah. I'll just knock it out. Let's just knock it out. It's not a. Okay. You can't, there's nothing you can write off on it anyway at this stage, except maybe depreciate it. And that's might be a nightmare. So, um, no, I, I, let's just lean into this thing and take$6 ,000,$7 ,000,$8 ,000 a month after taxes.

42:20Dave Ramsey:And let's attack the 58 ,000. How fast can that be gone? Crap, man, six or eight months, you're done, but you live on nothing, dude.

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43:51Dave Ramsey:Welcome back to the Ramsey Show. in the Fairwinds Credit Union studio. Jade Walshaw, Ramsey personality, best-selling author, number one best-selling author, is my co-host today. Alice is with us in Raleigh, North Carolina. Hi, Alice, how are you? I'm good. How are you? Better than I deserve. What's up? First of all, I can't believe that I'm talking to you guys right now, and I am so anxious. So if I sound completely dumb, please forgive me. You'll be fine. We've never lost a patient. Okay. So my question is, how do you get over the fear of not being financially ready to start a family? Okay. Tell me what that means you're not financially ready to start a family.

44:37Okay. So my husband and I are in a little bit of debt. We've paid off a lot of our debt, and I'm very proud of us so far, but we still have some to work on. we have a$20 ,000 student loan. That's mine. And then we have a$45 ,000 student loan. That's my husband's, but he's about six months away from the public student loan forgiveness program. So right now we're kind of just paying the minimum monthly payment on that and hoping that forgiveness comes since we're so close to the end. And then the only other debt that we have is our house and our mortgage. How much have you paid off so far? Of our student loans?

45:18No, you said you paid

45:19Dave Ramsey:off a bunch and you're proud of that. What did you pay off and how much? We paid off our credit cards. That was about$6 ,000. And then we paid off both of our cars. I lost my mom last year and I got some inheritance money and we were able to pay like$50 ,000 worth of car payments off. And, yeah, that felt really good. So what's your household income? It's about$110 ,000. So if you make$110 ,000 and you have a$20 ,000 and a$45 ,000 student loan, why can you not have kids? Because I just feel like there are so many things that I would want to do if I became a mom. Like stay at home? Well, I would love to stay at home, but I just know that that option is not possible.

46:10I think that's where we, I think that's the first step in this is clarifying what that means to you and having a really clear picture of if I want to have kids, this is the way I want it to look and solving for that.

46:24Dave Ramsey:And so it's not the, you know, she's exactly right because you're not. It's not the debt. The debt's not the problem. It's not the debt and it's not the kid. It's what you want to do because there's a kid. Yeah. And what's the income breakdown? The, I think I heard you say you make 110. What do you make and what does he make? We both make around$55 ,000, so it's pretty split down the middle. So you already have a mortgage, right? I think I heard that. Yes. Our mortgage with taxes, insurance, and everything is like$2 ,200 a month. All right. So yeah, that's the game you've got to play is if I want to have a child, I want to stay home.

47:00Now I've got to run out the budget on$55 ,000.

47:03Dave Ramsey:Or if I don't want to stay at home and I want to do other things associated with the kid, Maybe it's the other things that are the problem and not the kid. Right. My biggest concern is, like, I want to contribute to a 529 plan, and I don't want— Well, get out of debt. Finish getting out of debt and then do it. Yeah, we're trying to. Well, I mean, you'd have 20 years to work on that. The kid's just born. The kid's not even born yet. Right, right. I know, like, daycare and things like that, like, it's such a common, like, thing that's so expensive for people. And so I'm just like, ah, it's a lot.

47:37You've got to run a faux budget. Running a budget and seeing the actual numbers is going to give you real answers to your questions. Right now, they're just a bunch of things floating around in your head. And you're thinking, I think it's this. It might be this. It could be that. Just give real numbers to it. And you can do that. You can run the budget as it is, looking at your margin and saying, okay, looking at the margin we have now, working extra. This is how quickly we're going to pay off the$60 ,000 in debt. Once we've paid off the debt, this is how quickly we can have the three to six months of expenses saved.

48:07Once we do that, after we start investing 15%, this is how much money we can put in the 529. These are all numbers you can know this evening.

48:15Dave Ramsey:Your child is going to be fine. You make enough money. If you pay attention to the money and you continue on the track that you're on, you guys are going to be fine. You make enough money to have a child. What you may not have enough money to do is spend$462 ,000 on a nursery. Right, right. I mean, like go nuts, okay? or 46 ,000 on the nursery either one neither one is going to work this is a very small human they don't even know what's in the nursery it's only the mother that does the father doesn't even know what's in the nursery so and people go bananas so if the things like that and you feel like you know well we'd have to get a bigger car no you don't they'll it's a very small human they'll fit in that car they don't take up that much room their car seat takes up more room than they do But if you do, and you have to decide, what do you think, are you thinking that you're going to stay home?

49:08Because that is the biggest part of this conversation. Because if you do, that does reflect on your comfort of living with a$2 ,200 mortgage. So you guys have to look at, okay, if you make that choice, what's your husband going to do? Are you going to work part time? There's got to be something that you do so that mortgage doesn't become half of your take home.

49:26Dave Ramsey:Yeah. So the answer to your overall question is facts are your friends when you don't. Jade is exactly right. Lay out a budget for the way you see this going. And the budget will look at you and say, no, you can't spend that on a nursery. And here's your daycare budget. Go out and shop some daycares. Talk to five or six or 10 daycares. Get actual numbers, not what your friends said, not what you heard on the Internet, because both are liars. and so let's go find out what's really going on and what the real cost is and honestly diapers and formula they're not that much diapers wasn't the thing i don't feel i feel like there's too much emphasis on diapers everybody goes crazy talking about it i mean it's like i feel like the other things everything is i think i think our kids got like uh two years worth at all the baby showers yeah i think they were we had a warehouse for diapers but um but all that being said is I think it's what she's trying to do is plan for this.

50:24And I, I commend that.

50:26Dave Ramsey:Your anxiety will go down. Yes. Planning for when you're going to have a family is so important. And that's exactly what you're doing. That's what this is called. That's what it looks like. This is what it looks like to plan for children is what you're doing. But if you use some common sense in your choices. Yes. That is mathematically sound, you should have no trouble and you're eligible based on the numbers you gave us today to be a responsible person and have a baby. Okay, let's play this out because I have to say this because we get this call. What there is the potential for is I have this baby.

50:58Now I want to stay home. Now I'm down to a$55 ,000 income with a mortgage that's 22 and I never paid off the$60 ,000.

51:06Dave Ramsey:Can't do it. Now that is the call that we get and that's the person calling and stressed out. The answer is sorry. Exactly. And that's the part that I just want to call out is there are things you can do to make this a better, easier process for you. And if you have the ability to do that and you would like to do that, it's a good thing to do. Yeah. Like get the debt paid off. Yes. As an example, build your emergency fund. Yes. The further along the baby steps you are, the easier this all of this is going to be. That's right. Yeah. But you can't just go, oh, I'm really sad. I'm really sorry. And you get to go to work.

51:41Dave Ramsey:You play grown-up games, get grown-up prizes. I know, that's right. So that's how it works. That's the deal. But the actual child thing of, I can't afford to have children. I mean, if you've got too many kids and you just keep spitting them out, you're going to have trouble. That's not the issue. But you need to think about what is a reasonable process here with the income that you have and, you know, a typical family size, and you will be fine.

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54:07Dave Ramsey:Alex is in Rochester, New York. Hi, Alex. How are you? I'm doing well. Thanks for having me on. Long time listener. Appreciate you finding time to get me on today. Our honor, sir. How can we help? So I have a question for you. I think my wife and I are in a phenomenal position based on how old we are and everything that we've been able to accomplish so far. but I have one point of contention with her. I think you'll agree with me, but I want to make sure I'm not violating another rule while I try to accomplish this. So my wife and I are disagreeing about paying off the one vehicle that we have a note on right now.

54:43So we paid off her vehicle. We have my car. It's about a$60 ,000 balance on it. I'd like to pay it off of what we have in

54:53Dave Ramsey:savings. But I want to make sure I'm not violating any other rules based on our income, so on and so forth. What's your household income? It's$150K a year. Okay. And did you say you had your mortgage paid off? Did I hear that? Yeah, we were able to sell a payoff for our mortgage when we sold the business and also did well on selling our first home. So it's just this one car. Did you buy the car after that? No, I bought the car before. Why did you not pay off the car, too, while you were at it? Well, I wanted to. That's what I'm saying. So she wants to keep a car payment? What's the difference between the car and all the other debt?

55:36She wants to keep the cash. She wants to have more in our savings, and I think we have way more than we need in savings. How much is in savings? $150 ,000. Okay. So it makes her feel uncomfortable to take 60 of the 150K to pay off this vehicle and be completely debt free. Correct. As with anything, I mean, there's more to the story. So we had a second child, and at the time we were concerned about medical bills. We'd gone through infertility, so we didn't want to pay off the car at that time. But now I think we're in a position, baby's healthy, and I think we're in a position where we could pay off the car and be completely debt-free.

56:17And I think at that point, there's really nothing else for us to do than give me to the 15%, make sure we're funding the 529s. And you make 150 a year. Correct. Yep. Just, it's, we're just, just on my salary. She stopped working back in October, which is another, you know, thing that happened that changed. So if you run out the numbers, pretend that you pay, let's just pretend you pay off the car today. You have 90 ,000 in savings. How quickly, if 150 is the magic number, how quickly could you get back to that? Yeah. Well, again, I don't want to get back to that. That's like part of the contention as well, because I'd like to shift anything additional to, you know, obviously in the market.

56:55I agree with you. I agree with you. Okay. So part of why I'm doing this is to have this recording I can show to her.

57:01Dave Ramsey:Let's back up a second. Where you guys should be is your emergency fund should be about$30 ,000, maybe$40 ,000. Yeah. And you should have 50 in investments and no car payment. That's where you should be. Agreed. Okay. And so now what we've got to figure out is why we're not there in her mind. So if we have no car payment and we have$50 ,000 in investments that we can get to on a one day's notice, if it's in a good mutual fund with a SmartVestor Pro, you can send them an email and you'll have the money in 24 hours. Okay, maybe 48, but somewhere in there, okay? So it's not like it's not liquid and accessible, and it's going to be making a good deal more than that stupid savings account.

57:51Dave Ramsey:And I've got$30 ,000 or$40 ,000 sitting there,$40 ,000 in this case, for an emergency fund, and we've got no debt. Now, what's the problem? That's what I want to ask her. Because it sounds like it's mythology in her head. I would play this out with her because there's something that's causing her to freak out. and you should probably ask her the question, what is the worst in your mind that you see taking place and what would it cost? And how could we, and why could we not handle that with this arrangement? The roof blows off the house randomly, right? You know, what truly in her mind is the worst thing?

58:27And that's how you run this back and help her see.

58:30Dave Ramsey:I mean, even medical bills with a child with, you know, issues when they're born, you've got freaking insurance. Your maximum amount of pocket is probably 20 grand. and you're sitting on 150 worried about it. Yeah. Yeah, no, I totally agree. Well, what we got to deal with is facts are your friends, and we need to say, okay, with these facts, explain to me what the fear is. Yeah. Jade's right, and then let's get into it, rather than just fighting about, no, I don't want to pay off the car. Right. Okay, bullcrap. Now, why? If we have$50 ,000 in investments and$40 ,000 and no debt in the world and we make$150 ,000, Jade's right.

59:12Dave Ramsey:What is the scenario that you're worried about, that you've dreamed up this catastrophized in your head? And let's talk that through. And then you go, oh, okay. And so an example of that is my wife and I were considering a large generosity gift, okay? For us, what's a large gift? and um uh she's like i'm kind of nervous about this and i went okay well let's just pretend that we took that much money and we put it in the middle of the floor and we burned it are we okay oh yeah oh yeah we got this and this and this and this we're okay so what is it you're nervous about uh i guess i'm playing tapes from the old days oh okay hey, that's fair because our tapes in the old days, the best of in the Ramsey house sucks.

1:00:06Dave Ramsey:It was bad. You don't want to play those tapes, right? And that's fair to say, oh, some of that bankruptcy stuff when we were 28 and the lights got cutoffs coming up in my throat when we start talking about giving a gift with that many zeros on it. Totally fair. That's a great conversation to have. But all that is is admitting that where we are is different than where we were. And just as Deloney says, just because your body is reacting doesn't mean that those are facts. No, and it's a good time to remind yourself of the facts. Facts are your friends. And the facts are that your family is in great shape.

1:00:42Dave Ramsey:Your family has done a wonderful job, such a good job that you covered all the infertility issues. You covered her quitting work. You covered any issues that came up with the child that was born with issues. you you've covered and your debt-free house and everything but one stupid car i mean you guys have done great y 'all are amazing you're in the top one percent of americans so yeah so that's a fact now what are the what are the fears and what is the thing we're believing that's the boogeyman well let's turn on the lights and see if there's really a boogeyman come look under the bed yeah there ain't no boogeyman under the bed okay let's look in the closet no boogeyman in the closet can you tell i've been keeping grandkids yeah and so you know i mean it's like but uh this is a what are we afraid of yeah facts are you know and and it's not to uh speak down to her in a condescending way that's not what i'm doing no it's to get to understand to the root of it you need to uh as a grown-up woman who's staying at home with your children as a result of our financial decisions you need to have a grown-up adult reason for this not just a i don't like that bull crap let's have a let's have an adult discussion here because here's the thing that 50 000 bucks in investments would be a hundred thousand if you'd have put it in an investment back then because it would have doubled when y 'all did this since then so you've lost 50 000 for screwing around with a stupid savings account that's expensive yeah that ain't okay you know and so i'm we're gonna have this discussion that's called opportunity cost folks when you miss out on an opportunity yeah yeah yeah that's that's that's scarier than letting go of the 60 000 missing out on all that money yeah and um but i'll tell you what happens and it happens at my house too y 'all probably don't do this but sometimes you come you get to arguing about something like that and you finally go it ain't worth it oh yeah i'll just just leave the stupid 150 over there it's not the right thing to do it's wrong but it ain't worth it I did that with life insurance a few years ago.

1:02:48Dave Ramsey:Oh, yeah. SWI. Sharon wants it. There's no reason I should have had life insurance. I had millions and millions and millions of dollars. And if I die, she had millions and millions and millions of dollars. She was fine. And but she said, I want life. I want a million dollars on you. I'm like, why? So you got another million. I mean, why am I buying this stupid life insurance? And it wasn't that expensive. It was like, I don't know, a thousand bucks or something. I'm like, whatever. It ain't worth it. I'll just buy it. SWI. And then one day, finally, she went, I don't think I need that. And I went, oh, you didn't need it four years ago.

1:03:19Dave Ramsey:But there we go. Okay.

1:03:44Thank you.

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1:05:17Dave Ramsey:Today's question of the day is brought to you by Why Refi, when private student loan payments started getting away from you, well, it can feel like you're paying for decisions you made years ago because you are. Why Refi helps borrowers explore low fixed rate refinancing options and payments designed around your current situation. Visit whyrefi.com slash Ramsey. Might not be in all states. All right. Today's question comes from Cooper in Maine. He says, our household income is$225 ,000 and our only debts are$9 ,000 in student loans and our$300 ,000 mortgage. We pay$150 a month on the student loan and her employer matches our payment.

1:05:59Should we include this loan in our snowball and make larger monthly payments when we get to that point? Or should we keep taking advantage of the employer benefit and let this thing ride for another two years? Three years. Yeah, two plus years. Yeah. Well, first of all, you said your only debt is the$9 ,000 in student loans and the mortgage. So you're not debt snowballing the mortgage with the student loans. You're just paying off the student loans. And yes, I would 100 % go ahead and knock this out. You make freaking$225 ,000 a year. This should be done in one month. It should be gone out of your life forever.

1:06:39Not squeezing out two or three plus years to save.

1:06:43Dave Ramsey:Of$150. I mean, gosh, what is that? Yeah. Yeah. Are you clipping coupons too? I mean, my God. It's just not necessary. No. It's amazing how our, like in the name of math, we do some of the dumbest, smallest, little dinky butt things and act like we're financially sophisticated. Well, yeah, because your body is paying the tax. I'm getting a free airline mile, which you will never use. You fool. 78 % of them are not redeemed. That's the actual number. Eight out of ten never get used. And yet you went into credit card debt in the name of airline miles. And see, this is the kind of stuff people deal with.

1:07:25Dave Ramsey:Or the guy who's like, I get 1 % back on my Discover. That means for every$100 ,000 you overspend, they give you 1 ,000 back. On what planet does that make you a millionaire? Yeah, that's interesting. 100 out for one back. Hello, are you in Congress? What in the world? Who thinks that works? a very good point all of a sudden you're interested in 150 but when it was 225 000 when it was time to take the debt you didn't care about the money exactly oh my yeah pay it off yesterday you probably have the money in savings right now quit screwing around with don't major in minors madeline is in los angeles hi madeline how are you hi i'm good thanks guys for taking my um question sure um i guess this question is coming more out of fear than anything um because uh for the last 10 years i've been in real estate prior to that i used to work in uh dental uh practices and uh being that the current state of the real estate market is what it is right now.

1:08:39I'm feeling like I'm back in, you know, that dental field where I capped that, you know, whatever,$20 an hour back then. And I guess that's where my question is coming from. I need to know if I'm doing the right thing, What is your question? My money, and I have way too many accounts, and I feel all over the place. How many accounts do you have? I feel like I'm not doing the right thing. I have two CDs, one IRA, two business accounts, another just savings account, sitting there doing nothing. And cash that I don't know if I should put the cash into more of those accounts.

1:09:30Dave Ramsey:How much money in cash do you have?

1:09:35I think it's like 80. 80? What are you trying to accomplish by having all these separate accounts? Is that your way of diversifying? What are you telling yourself by having all those? Um, yeah, and I really didn't know that I could have a step IRA. And then I just thought, okay, well, I'll just put them in CDs. And I did well in my last 10 years. Yeah, in real estate, and I have two rentals. And basically, that's where my income is coming from right now. And that's why I feel like I'm back in the dental office, you know, because now I have to pay a mortgage. Where I live, my condo is paid off and the rents are what's keeping me afloat.

1:10:26I pay the mortgage and then I'm back to my income. I'm not sure what this has to do with the dental, but let's go through the numbers and see if we can simplify this. So you've got a paid off condo. That's great. The two rentals, do you carry mortgages on those? One mortgage. Yes, I just paid off a HELOC that helped me build the ADU that I rent, you know, from that. So how much debt do you carry on the rentals total? Rental. 360. Okay. And then the$80 ,000 in cash, what's in the savings account? Combined in IRAs, it's almost three. No, no, no. Just the savings account. What's in the savings account?

1:11:07Oh, the savings that's in, that's like 30. Okay. And then what's in the two CDs?

1:11:17There's three CDs. That's almost three, almost 300. 300 ,000. Okay. And when do those mature? When do they reach their target date? They have different dates. Some are on five months or six months. How old are you? I'm so nervous. That's okay. Don't be nervous. How old are you? I'm 50. I've been a single mom. What's your best year in the real estate business? My best year was 2020, 2021 through 24, 25. I sold in nothing, like zero. And 26, I sold three copies. Why did you sell zero? In 25? I was exhausted. I was burned out. I was building my ADU in 24. I got the occupancy, Certificate of Occupancy in 25.

1:12:13I was burnt out. I was so tired. I'm a single mom. Everything is on me. My daughter is amazing. She just graduated from CSUN. Why were you burnt out?

1:12:26Dave Ramsey:You made more money than you ever made in your life. You were tired. That's why. You were tired. Why were you burnt out? I hustled, like, big time. Yeah, that doesn't kill you. Every day from 7 a.m. to 11 p.m. So why not cut your hours back to normal hours instead of going to zero houses sold? Just cut the number of houses you're selling back. Well, I didn't do that on purpose. I think I was working. You said you quit because you were burnt out. That is on purpose. And you said you're mostly living off of the rents, the rentals. Okay, go ahead. Here's what I would do. I am because I don't touch anything.

1:13:07There's two parts to this question. There's two parts to this, Madeline. Number one is, if you feel like you need to cut back on working, you can do that, but you still need to be working in some way. I don't think there's any reason that you shouldn't be selling any houses. I think that there's just something there that you've got a mental block there. As far as this money, I think there's ways that we can clean it up. I would take the$300 ,000 and I would invest them. You can do a SEP if you want. You can do an individual 401k, maybe get with a smart investor and decide what the best option is for you for retirement.

1:13:38I think the savings for you, I would keep six months of savings and a high yield savings account. If six months for you is around 30 to 40K, that feels fair. And then the rest of that cash, I'd put it with the 300 ,000 and I'd invest that. And then if you want to simplify even further, I'm not sure, but you might get to the point where you sell off one of these rentals to pay for the other. And that way you have one paid for in cash rental that's generating cash and then your own condo is paid off. How does that sound? I know I said that fast.

1:14:09Dave Ramsey:It doesn't cost much to exist at that level. And you need to be working. You don't have to work 7 to 11. No, but you can do something. But you could work from 9 to 4 and do a lot of house sales because you're good at it. You just talked yourself into the corner of saying, oh, oh, I'm dying. You're not dying. Yeah, go back and listen to this call. You just need to slow down. You don't need to quit, though, because you have the potential to earn a bunch of income. And so, yeah, what I would do is go to Ramsey Solutions and hit SmartVestor Pro. Sit down with them. They'll help you put some of this cash together and do some real investing.

1:14:43Dave Ramsey:But that only works if you're not sitting on your butt trying to live off the rentals at 52. Go to work, girl.

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1:17:09Dave Ramsey:If you're not sure where to start, text quiz to 33-789, and we'll help you figure out which option best fits your particular situation. Amanda is in Minneapolis. Hi, Amanda. How are you? Hi, I'm doing well. How are you? Better than I deserve. What's up? So thank you for taking my call. So my husband and I are on baby step number five. And before we kind of go into saving for our children's future, we were kind of met with a mandatory kitchen renovation that came up. It was a kitchen back from the 80s. And, you know, we had rotting cabinets and appliances were falling apart. And it was time. And so we felt with our finances where they were, we were able to save up.

1:18:03We did about a 25K budget for that with about 5K in fluctuation in case something came up. But the problem with that is that we experienced a huge mold problem that we had no idea. And so my question in this goes into we have about 30 saved up for the renovation, and then we have another 30 in what we call our emergency fund. And my question is, should we be going into our emergency fund? And just to give a little bit more detail, we were told last Friday, I work for a big corporation, that layoffs are coming. And then our manager followed up shortly after and stated that our group was not safe.

1:18:55And so my question is, should I be... Right now I make about$1.05.

1:19:03Dave Ramsey:What do you do? I work for MedDevice. What do you do? Sourcing for the big MedDevice company. What's your husband make? uh he makes about 135 okay so did you start your job hunt last friday my job hunt uh no you didn't you laughed hey the guy told you he's getting ready to fire you you need to listen okay you need you need you need a job by next friday making 120 what's the mold and then give them the finger as you walk out the door corporate america's trying to piss on you you better get ready okay it's coming it's coming i mean they're not kidding when they say your group's not safe that's code for pack your desk yeah okay what's the mold remediation cost uh right now they have told us it's looking about an additional 12 000 based on the rotting that they continue to find as they move forward.

1:20:10So if you said...

1:20:11Dave Ramsey:I have mold-remediated many, many, many properties. The one thing I have found about it is it's a very emotional subject for the property owner, typically. And the mold remediation companies have a spectrum of work that they can do from safe to crazy and drama. And so that industry does not have good credibility. Because in other words, I hear stuff anywhere from 30 ,000 to 4 ,000 and 4 ,000 absolutely will fix it in that case. And I've personally experienced that taking bids and remediating molt. But it's so it's like your children are going to die. And so that's where they start. Right. And it's a problem.

1:21:03Dave Ramsey:And so And I've got, you know, we've got rental properties and the renter calls us up and go, my children are going. No, they're not. We're going to remediate it. And remediate simply means get rid of mold. That's all it means. So I want you to get three more bids on this mold issue because anytime someone says that mold has taken over the house, I always want to make sure that really happened. And is there something else we can do? And, you know, what's the process we do? Basically, we need to be rid of the mold and we need to seal so that it doesn't come back and get rid of whatever water problem it was that caused the mold in the first place.

1:21:41Dave Ramsey:Have you identified that part of it? Yes, it was a renovation that we did about five years ago that caused it where a storm came in and it just caused a major leak. And so we know where it came from. It's already been dealt with. Okay, good. So we just got to tear out whatever rot there is and seal it and do the proper remediation. And that might not be$12 ,000. It might be. It might be. $12 ,000 doesn't sound completely unreasonable. But I'm guessing you've already torn the – you've got no kitchen right now, right? Yeah, there's nothing there. We have no kitchen. No kitchen and no job. This is great.

1:22:20Dave Ramsey:What a great week. And so, yeah, you've got to put it back. You don't have a choice. Yes. Okay. So I want you to get three more bids on the mold and the mold-associated rot repair. Get some more bids. It's different than the kitchen guy. You may or may not use the kitchen guy after that. And then if it is 12, you've got 30. You've got 30 in your remodel budget, right? Correct. And you've already given them some of that, right? Yes. We've put down about 90 % of our money already. on work that hasn't done on work that's not done uh well it was to get everything kind of delivered and yeah don't take 90 to get it delivered oh that's scary it is scary i hope they i hope they meet your standards yeah so they have so they have 27 000 of your 30 correct oh boy okay can't breathe okay um and right now you've just got a hole in the wall no cabinets no nothing nothing okay um gulp all right so um well be careful how you talk to this contractor because he owns your butt um so uh in terms of getting the other bids on the mold and stuff, but I would get some other bids just to say, I need to make sure we're safe and make sure our numbers are right because I think I'm losing my job.

1:23:56Dave Ramsey:Just tell the contractor that and then get some other bids. And then you have how much in your emergency fund again? 30. 30. So it's 30 and 30. The two numbers are both 30. Okay. And you need 12 of that in addition the way it's bid out today to be able to finish the mold remediation and put the kitchen in. Correct. And just a question. Which leaves you$18 ,000 and your husband makes how much? 135. Can you live on your husband's income when you get laid off if you hadn't gotten your new job yet? I hope so. Okay, good. All right. Have you plugged that into a budget just to see what it looks like temporarily?

1:24:38Yes. Okay, good. And it's scary. We have two kids in daycare, which is obviously not cheap. Our mortgage is about$2 ,500 a month.

1:24:47Dave Ramsey:It won't be there if you're not working. Yeah. I mean, if you're sitting at home and we're living on his income, the kids are at home. Yeah, take him out for a couple months, yeah. So, all right, so here's thing. Thing one is get more bids and finish the kitchen,$12 ,000 or less, okay, leaving you$18 ,000 and his$135 ,000 to live on when you get laid off. Thing two is go get a job. Right now, as fast as you possibly can, making 120. And then quit and go, well, my group left. That's what my group did because we saw it coming. I mean, yeah, your group is not safe. That's some scary butt words right there.

1:25:33Dave Ramsey:Yeah. All right. So there's something about that process that makes people think it's not going to happen to me. Maybe it'll be everybody else but me. Yeah. No, I'd be trying to get a job now while you have a job. Get out of there as fast as you can. And your mentality is good. And make more money somewhere else. As fast as you can. Well, I got to get severance. My severance is, see, you wouldn't want to be you. I'm done getting out of this place.

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1:27:25Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Jade Washaw is my co-host today. Greg is in Seattle. Hi, Greg. How are you? I'm doing good. Actually, better than I should be. Amen. How can we help? Well, I'm 70 years old, retired. I have an$81 ,000 mortgage. Is there any reason I should not pay that off? Nope. You should pay it off. Well, I guess if you only have$81 ,000, how much do you have in your nest egg? about 150 that's that's your total nest egg to live on let's take that cash 150 okay no no no no i said nest egg what is your net worth that's a um about 1.8 million now look at this that's what i thought i kind of smelled that way to go greg congratulations i don't guess you inherited that did you no i uh i worked for it the old-fashioned way i earned it yeah uh right try to check pay off your mortgage today greg okay let me ask let me ask it another way okay let me reverse it on you there's sometimes when i'm making a financial decision I use this reverse engineering thing to check my logic, okay?

1:28:51Dave Ramsey:You got$150 ,000 in cash and a$1.8 million net worth. I heard that right? Correct. Okay. And an$81 ,000. Okay, so if instead you had called me and said, Dave, I have a paid-for home. By the way, what's your home worth? About$600 ,000. Okay, I have a paid-for$600 ,000 house, a$1.8 million net worth, and I have$70 ,000 in cash. I'm thinking about going and borrowing$81 ,000 on my house, so I've got$151 ,000 in cash. Okay. You wouldn't have made that call, would you? No, I wouldn't. No, I wouldn't. I guess one reason I made the call is my interest rate is 3.875. Yeah. But you didn't get rich on borrowing on your home to invest.

1:29:48Dave Ramsey:You got rich by avoiding debt and investing steadily. Okay. Am I right? You're correct. Because you're not a debt guy. The only reason this debt's around is because it was so cheap, you just made you think about it twice. The other debt you got rid of years ago. Correct. Yeah, yeah. That's how you got here because you're what we call a baby steps millionaire. You follow the stuff where the principles that God and Grandma talks about that you and me grew up with, only most people didn't do them even then. And you're one of the unusual ones that did. And so now you're what we call sitting pretty.

1:30:25Dave Ramsey:Well done, sir. I'm so proud of you. Yes. Debt free. Greg's debt free. Yeah, and he worked for it. How did you get that money? I worked for it. So he's one of those guys like me when somebody says, you're so lucky, you just want to smack them. Oh, yeah. No, I'm blessed, but I'm not lucky. Luck came dressed in work clothes. I know that's right. That's how it came. Luck knocked on the door and said, you got some calluses handy? Put your hand to this. And that's where that came from. Yeah. It's not accidental and it's not random and it's not a lightning strike. Greg followed the age-old principle of living on less than you make and investing it.

1:31:08Dave Ramsey:I'm so proud of him. Way to go. Very cool. Very cool. Gabby's in San Antonio. Hey, Gabby, how are you? Hi, I'm doing good. Good. What's up? Hello? What's up? So I recently got laid off of my job two weeks ago. and previously before that I had um last year actually I had the company closed that I was working for they had been and I had been laid off for nine months so I was just starting a new job and I was starting to get settled and I had moved to be closer to work and I really enjoyed that new um city um since I grew up in a rural area and I was budgeting and starting to get to the swing of things.

1:31:58I had even gotten a part-time job for the weekend to make sure I had a buffer in my budget. And then I got laid off. What kind of work do you do that you've been laid off twice? IT work. The first time it was because the company shut down. Again, it was based off in a rural area and it was a government job. They closed off. And this time around they just decided not to move forward with me after the six-month probation why um it was due to a project that i didn't know how to do and i felt like um and and i would ask the manager for help and uh i didn't get the help that i needed on that project and um nor did i get all the information clearly for that project so he based off my six-month probation on that one project.

1:32:56Okay.

1:32:57Dave Ramsey:What kind of IT work do you do, hon? That one was a network. So I was dealing with switches and things like that, which when I first started, I told them that I was willing to learn, but I was not, that's not what I, I would do help desk and other things like that. So they still hired me on, even though, I mean, they knew my background that I would do, you know, hopped at six computers, things like that, but that was a higher level. And they said, okay, no, no, you can learn it. Of course, I wasn't. They expected me to do the project without training me. Okay. The way you've approached this each time, I don't want you to ever tell anybody that again.

1:33:44Dave Ramsey:Okay? Okay. Three times you blamed them, and you took a job knowing that you didn't know how to do the job. and then you did not force help and you're blaming them. Yes, they are also at fault. I don't really disagree with you. But if you're ever in an interview and you blame your former employer for not training you, you won't get the new job in the interview. You've got to have some personal responsibility. Does that make sense? You follow my logic here? Yes. So I want you to reframe that in your head and go, this was a bad choice. I should not have taken the job. And I certainly shouldn't have settled in like I was going to get to keep it forever, knowing that I didn't know how to do the job and that I was, you know, there's a gap between your knowledge and your ability to perform.

1:34:29Dave Ramsey:And that's that's OK. We all have that in something. But then and this company was not set up to do that. And you're young and you're just starting your career. So you don't know yet you're learning the hard way to be forceful on before I take a job doing something. I don't know how I have to be forceful about the processes that are in place to make sure I can learn fast enough so you don't fire me later. And that's, you know, that's part of the interview process for you. So I think your position is simply this. You need to get another job. Yep. And you learn from these last two things. Okay, I had a rule thing that folded up because it was government supported.

1:35:09Dave Ramsey:Learned something there. Took a job I didn't know how to do. Didn't work out. Learned something there. So now let's go do it again. I think you still have a good knowledge base in IT, and I think you land yourself a new one. Hang on, we're going to send you a copy of Finding the Work You're Wired to Do with an Assessment in It. I want you to take that and see if this is really the stroke where you want to go with your life. And if not, if you want to go a different direction, that's okay too. But you're young and you're learning, and this is an experiment. We found two things that didn't work.

1:35:40Dave Ramsey:Now let's find one that does.

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1:37:04Dave Ramsey:Well, we wish we could get to every single calling question on the show. We can't. Sorry. there's just four lines and just three hours i mean all we do we love you we want to get to you but uh we could do this 24 7 and still not get to everybody but guess what we can now because we have something that's 24 7 it's called ask ramsey it's free it's a free ai tool and it's built and trained only on ramsey answers ai can only spit out what you feed it so we only feed it ramsey and it only spits out Ramsey. How cool is that? You get an answer the same exact way we'd answer it right here on the show.

1:37:43Dave Ramsey:Free. Ask Ramsey. Ask your question today at RamseySolutions.com. Ask Ramsey is the tool or click the link in the description. You're listening on the podcast or the YouTube, and you'll find out exactly what we would say about that. Sarah's in Boston. Hi, Sarah. How are you? I'm doing great. Thank you. Thanks for taking my call. Thank you. How can we help? So I'm just wondering if I am missing anything here. My husband and I, we make about 90 a year. I do stay home with our three young kids, and we have a two-family house, and my mom is going to be moving in upstairs. Who was upstairs before? we had a renter before who was there for four years okay so it is a duplex it is a it is actually two sets of utilities two two operating domiciles correct yes okay cool all right and mom you're gonna let mom live up there is she supposed to pay your rent or what yes so the plan is that she would pay us$2 ,000 a month.

1:38:56My concern is that that is a part of our income, and long-term, does that make sense? Because she is 64, and she's planning to retire next year, and I'm not sure that I would be going back to work anytime soon. Our youngest is one. Our oldest is five.

1:39:19Dave Ramsey:I don't think you're working. It has anything to do with it. Are you saying she won't have any income after she retires to pay the rent? Is that what you're concerned about? No, I think she will have the income. I'm just concerned about never being able to increase it. Okay. I don't know if that's something. Okay, so 30 years from now she could be 95 and paying that. Yeah. Okay. So is she selling a home to move in there? Yes. So she's going to have a big lump sum. Why is she not just purchasing something for herself? She wants to be close to the grandkids. Purchase something close to the grandkids.

1:40:06Either that or be treated like a normal renter where the rent goes up periodically.

1:40:11Dave Ramsey:Yeah, but if she's 65 when she's 85, I wouldn't have wanted her to... If she just called and said, I want to rent from$65 to$85, I would tell her not to do that. I would tell her to buy something for her own good. Right. So that was a thought I had, too, is that she moved in temporarily as she looked for, like, a condo or something. Yeah. Another reason why she's moving in is to downsize because my two brothers were living with her, and recently both of them moved out. Good, good. So how much is her home selling for? right now it's off market starting off market 765 is it paid for no what does she owe on it maybe five something okay all right so she could put a 265 or 200 000 or whatever down payment on something that is smaller maybe a 400 000 a nice condo that's near you so she can be near of the grandkids, and then her life is stable.

1:41:16Dave Ramsey:She's not stable as she moves in with you unless you take the hit and don't increase the rents. That's my concern. I think that, Mom, here's what the plan is. The most you can stay here for your own good is two years. During that two years, I want you to purchase something that's good for you, for you to go forward and have a great retirement in? Because here's the thing. You tell her you talked to a financial coach, and he told you that, because I am, okay? Because for her, if she just asked me, if you hadn't called me, if she called me and said, hey, I'm selling my house, I'm going to move in with my daughter, I would say, do that only as a temporary measure, and get out of there and get you a condo, three or four hundred thousand, put down the 260, 250, whatever, get the condo paid off.

1:42:08Dave Ramsey:So when you go into retirement, you're living in a paid-for property, and that stabilizes your most expensive part of living, which is housing. But I will say, I mean, I'm just, this is a caution to you. Even if you put the caveat out there that this is only for two years, the minute you welcome her in there, there's a risk associated with that. Because if she gets comfortable and you guys get comfortable and you get lackadaisical on your own deal, this gets messy real fast. Yeah, I've already seen it in the past. And I think my other concern is she enables a lot of other family members. Listen, don't do it.

1:42:44You've already said enough that you have enough misgivings about this. Don't do it.

1:42:49Dave Ramsey:Okay. Tell her to go rent a one-bedroom somewhere while she looks for a house.

1:42:56Dave Ramsey:You think this is going to go sideways. You keep saying it in different ways. I'm just nervous. No, you think it's going to go sideways. You're nervous for a good reason. You've observed your mother's enabling. You've observed her inadequate behaviors around money, and you think it's going to end up in your lap, and you're right. Yeah, listen to your gut. Okay. Yeah, it's not mean. Mom, I think you need to own a house. I don't think you need to be a renter. And to encourage you to do that, I want you to rent a one-bedroom. I found a really cool one over here in the neighborhood. I'm going to rent mine out.

1:43:28Dave Ramsey:You shouldn't be paying$2 ,000 a month for rent. I want you to rent something cheap while you look for your new house or new condo so you're not spending much on rent. I'm going to charge too much over here and it's not going to be good for you. And I'll help you. I'll coach you. And, you know, we want you to be around the grandkids. We want you around. But it's not going to be good for you to be upstairs. And so for so many reasons. So I'm going to help you not do that. And just be kind and forceful and say no. Because you told us four different ways why you don't think this is going to work.

1:43:57Dave Ramsey:We kept trying to say, oh, you could do this. You convinced us out of it. And then it's like, no, that's not going to. So you know what this is going to be. You just know, and you want someone to say out loud. So, okay, you talk to a financial coach, and they told you not to do it. I'll be the bad guy. There you go. I'll be a bad person. It's Jade's fault. Yeah. Tell her Jade said. I'll take the blame. I'll take the hit. You can get the hate mail, Jade. That's okay. I'll take it. I can handle it. You know, the funniest one was the first two years I was doing talk radio show, a lady called in. And she goes, we've been married three months and my mother-in-law's coming to visit for a week and we don't have a couch.

1:44:39Dave Ramsey:And I said, well, you don't have any money. You can't buy a couch. And she said, yeah, but my mother-in-law's. I said, tell your mother-in-law, sit on the floor. And she said, what do you mean? I said, you don't have any money for a couch. You need to be a grown up. No couch. Yeah. And she's laughing and she's like, she's not going to like that. And I said, she's going to love it. She's going to love it because she used to have to do that. And she used to have to put up with a mother-in-law. Sure. And you be kind and you say, we got no couch because we're broke and we're getting out of debt and we're going to get a couch later.

1:45:09Dave Ramsey:I'm sorry. We appreciate you coming to visit. You don't have to stay in a hotel. Welcome to the camping chair. And so I go out to dinner that night. Lady comes over to me and she goes, hey, I was your caller today and this is my mother-in-law.

1:45:25Dave Ramsey:And the mother-in-law is laughing. She goes, you were right. That's so funny. It's so awkward. It's hilarious. Oh, yeah, that is awkward. This is my, I was your caller this afternoon. When you're doing local talk radio, that stuff happens, you know? Oh, man. I was your caller about the couch lady and this is the mother-in-law. Oh, man. You told her to sit on the floor. Yeah, that lady's going to call up Jade and say, hey, I want to meet you. You wouldn't let my daughter rent to me. Yeah. We'll meet you in a back alley. It's all right. I'm pretty strong. I can take it. you don't feel threatened do you no no she's probably what she's 60 i can take her you can take her hey hey hey ageism i love it oh that's that's a new story i've never heard that one dave oh that's a good one you do talk radio long enough you've done a lot of dumb things i can just tell you well that wasn't dumb it was just interesting but yeah too funny

1:46:52Dave 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.

1:47:36Dave Ramsey:If you didn't know, you're more than welcome to visit us at our headquarters where we do the show from. We're on the glass in the lobby, and generally speaking, there's 50 to 200 folks out here, closer to 50 today, watching the show. I think school's back in. And we've got a big lobby, big bookstore. We've got free homemade chocolate chip cookies and coffee for those visitors. And you can sit and watch the show. We do it from 1 to 4 Central Time every day, Monday through Friday. Also in that lobby is our debt-free stage. And guess who's on the stage? It's Kevin and Ashley. Hey, guys. How are you?

1:48:13Dave Ramsey:We're great. How are you? Better than we deserve. Welcome. Where do you guys live? We live from South Bend, Indiana. South Bend. Very cool. And how much debt have you guys paid? We paid off$30 ,000. All right. Cool. And how long did that take? 12 months. Good for you. That's quick. And your range of income during that time? We started with$30 ,000 and we're at$65 ,000. Wow. Way to go. What do y 'all do for a living? I'm an administrative assistant for a women's ministry. And I'm a full-time seminary student. And then I also work part-time for the school. Ah, very cool. So how'd you pay off$30 ,000 making$30 ,000?

1:48:48Well, we lived in a family friend's basement, so that brought our rent down. And we were just on the same page, and we just knew that we wanted to pay off our debt. So we got a few extra part-time jobs.

1:49:00Dave Ramsey:But did you let Kevin eat at all? Lots of bean soup. Whatever was in the basement. We had a lot of 15 bean soup. 15 bean soup. Okay, well, that's not as much as a 20 bean soup. There we go. Wow, look at you guys. So, I mean, you really, you're acting like broke college kids to knock out this debt. What kind of debt was it? $23 ,000 of it was student loans. $7 ,000 was a car. Very cool. Okay, so now you're free and you're continuing in seminary. Yep. And you're continuing as an administrative assistant. And so the plan is to get out of seminary and go into, be a pastor or what? Yeah, so I'll graduate in about two and a half years and then would be a pastor.

1:49:45And then I've also talked to the school about staying on there. So, but I'm willing to serve wherever God calls me. So pastoral role would be great.

1:49:53Dave Ramsey:Good to be available. Good for you. And educated. There we go. Both. Very good. Congratulations. So what put you on this track? What made you decide to go all Ramsey? Yeah. So finishing up college right after we got married, we had the debt and the car loan and we were making payments and realized we were just making no progress. and we said we're just never going to be done making these payments and that was discouraging and we had listened to Ramsey the show a little bit and uh we just said we need to sit down and talk about this and figure out our money with a real plan and so we got every dollar and uh we were like we're just gonna go for it and so we we made our first budget because we said someday we want to have a house and we we want to have things some things that we want and that would be good for raising a family and we want to go out on a date every once in a while and so we made a budget and started doing it so what about the friend's basement did they approach you or you approached them uh we approached them i had known them for a while and known that they'd housed some other people who were especially looking to go into ministry so um i just said hey we need somewhere cheap to live are you guys available and they said yes so that's where we Well, there you go.

1:51:09Dave Ramsey:All right. Very cool. So is it cool to ask what they're charging you? Well, we're actually not there anymore. So that was like the first step. We were there for a little less than a year. Okay. That knocked the debt out. So we're out of the basement. Now we're out of the basement. Yeah. Okay. I love that. Good. Yeah. Ashley's happy. In a real apartment now. Yeah. No more basement. No more bean soup. I love that for you. Life is so much better. I like it. We're free. Okay. This does set you up, though. I mean, you guys really, you sacrificed at a time when things were already pretty lean because you're in school.

1:51:47Dave Ramsey:And then on top of that, you sacrificed even more to go ahead and clear the debt so that when we can come out, we'll come out swinging, right? And there's a lot of stuff you'll be able to do now because you don't have this weighing you down. But it was kind of an inopportune time to attack this. Agreed? Yes. Yeah. But you both did it. Ashley, did he have to talk you into it or did you talk him into it? At first, I was a little bit hesitant, but it didn't take very much. You're like, I'm committed to this. Let's get rid of this mess and get it behind us. How does it feel to be 100 % free? It feels really great, Dave.

1:52:26It feels freeing and we are able to save for a home now. And when I finish seminary, we know that we're going to be ready to move wherever God calls us to serve. So it feels very freeing.

1:52:39Dave Ramsey:You know, as a person of faith, as a fellow Christian, I've run into this a lot over the years of people who are serving one way or another. One of the places I run into is like young people that want to go on the mission field. But I've got$187 ,000 in student loan debt. You know, and well, you're not going on the mission field because you've already you already made that decision accidentally when you decided to go so far in debt. You couldn't breathe because on the mission field, nobody's going to give to you to pay off your student loans. They'll give to you to eat and, you know, maintain a household while you do mission work.

1:53:13Dave Ramsey:But nobody's excited about supporting one hundred eighty seven thousand dollars of student loan debt. And so you really do get to live out in that setting. You mentioned twice wherever God calls me to serve, wherever God calls me to serve. You're living out that scripture where Jesus said, it's tough to serve two masters. You will love one and hate the other. And what that means, of course, you know, as a seminary student, is that you've got to make a choice. And I've got to pay the bank or I've got to go where I feel like God's calling me. And I can't go because I've got to pay the bank. And so the borrower truly is slave to the lender then.

1:53:49Dave Ramsey:And you can't listen to God's voice as clearly, or at least you can't respond to it as clearly as you can now that you've set yourself up in this situation. It's very cool. I'm very proud of you. Thank you. Who was cheering you on? Parents and grandparents. Really? Yeah. They helped us out in any way they could, and they were just always there for us. And we did laundry at their house. That's fabulous. Yeah. Very cool. Good for y 'all. Well done. Well done. Well, we're proud of you. I know they're proud of you. congratulations and so how long before seminary is finished two and a half years two and a half i think you said that but i want to make sure i heard it okay very good and paid off thirty thousand dollars in 12 months making all right here we go kevin and ashley south bend indiana making paid off thirty thousand in 12 months making anywhere from thirty to sixty five thousand and lived in the basement whatever it takes to get debt free count it down let's hear a debt-free scream Ready?

1:54:47Dave Ramsey:Three, two, one. We're debt free! All right! Yeah!

1:54:55Woo-hoo-hoo-hoo! I love it!

1:54:59Dave Ramsey:Well, um... A major sacrifice. I can't tell you how many people I know that are people of faith, Christians. You do too. We've both experienced it and watched it, that God has blessed them financially. They've done really well financially. And they let somebody live in their basement. or let somebody live in their condo. Yeah. And I've got one friend, he has one condo that's just dedicated to missionaries when they're home. That's really cool. He just leaves it open and they have a place to stay when they come home. That way they don't pay a hotel, they don't live in a hotel, which is not as fun as a condo.

1:55:31Dave Ramsey:When they come home for three months or something like that. Which is a short term. And that's all he does, it's what he does with the whole thing. And sometimes he has weird stuff happen, but most of the time it's just a great joy to be able to be generous. So that other couple that's living like no one else so later you can live and give like no one else, they're on the other side of that letting this little seminary student couple, brand new marriage, have a place to stay for almost nothing. Not fancy, but we're not trying to be fancy. We're trying to get out of debt. Yeah, getting the job done.

1:56:03Dave Ramsey:And that's truly beans and rice. Only they did 12 bean. 15 bean. 15 bean. Have you had 15 beans still? I didn't know there were 15 beans. well i wouldn't i wouldn't that's not a southern thing to make soup out of 15 beans that's not something i've run into we'll have to learn about that when we talk to them yeah we will we will have to learn about it's a different when i said beans and rice i didn't know i meant 15 that's to a whole different level yeah yeah a lot of 15 bean soup but um in the south i guess we'd have pinto beans yeah white beans and cornbread black eyed peas that counts as yeah yeah we're We're getting close.

1:56:40Dave Ramsey:We keep counting up. We might get to 15. Tuna fish. Oh, go away. Get away from me. Gross. I knew that'd get you. It just runs a little chilled on my backbone. It's a scary sandwich.

1:56:57Dave Ramsey:I love it. Cat food. Hey, I'm proud of them. Great, great young couple. How fun is that? Way to go, guys.

1:57:20We'll be right back.

1:57:33Hey, what's up guys? It's Jade Warshaw. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events and all the extra gas and grocery runs. Money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the Every Dollar Budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go.

1:58:06Download EveryDollar in the App Store or Google Play and start for free today.

1:58:26Dave Ramsey:Our scripture of the day, Colossians 3.17. And whatever you do in word or deed, do all in the name of the Lord Jesus, giving thanks to God the Father through him. John F. Kennedy said, I would rather be accused of breaking precedence than breaking promises. There we go. Shooting sacred cows instead of breaking my word. I like it. Jeanette is in Pittsburgh. Hi, Jeanette. How are you? I'm good. How are you? Better than I deserve. What's up? So my husband found out about two weeks ago that he's going to be losing his job at the end of December. And my question is, should we stop contributing to his 401k now?

1:59:13Or should we wait until his time is done before we stop contributing? And then also, what should we do after he's done with the company? How should we refinance or roll over that money to make money for us?

1:59:30Dave Ramsey:Good question. We teach to always take your 401K with you and roll it to an IRA. And so what I would tell you to do is go to RamseySolutions.com and find a SmartVestor Pro, which is someone in the investment business that we recommend. They'll have the heart of a teacher. And then you do what's called a, when he leaves, you do a direct transfer rollover. Now, what that means is, is that you sit with a SmartVestor Pro and you say, I want to put the 401k in these four mutual funds. And I want to roll it over into an IRA and those four mutual funds. And you sign all the paperwork. The paperwork is then sent directly to your husband's HR or former HR department.

2:00:19Dave Ramsey:and they will send the money directly to the mutual fund. That's called a direct transfer. You have to do it that way or you're going to get messed up because if they send you the check, they are required by the federal government to withhold 20%. How much is in his 401k? He has about$200 ,000. Okay, and so they would withhold$40 ,000. You'd get$160 ,000, But you're required when you do a rollover from a 401k to a Roth to put all of it into the 401k or into the new IRA within 60 days or you will be penalized. And you don't have all of it in the scenario I'm talking about because they sent 40 of it to the government on withholding and you won't get it until April.

2:01:11Okay.

2:01:12Dave Ramsey:So don't do that. let the money be direct transferred and pick out the mutual funds we suggest and i personally do jade does sam jade and sam dave and sharon put ours across four types of mutual funds growth growth and income aggressive growth and international and i put a fourth in each so about 50 000 in each now uh what does he make a year um he is making about 48 000 okay what's he do uh he's uh he's a warehouse um employee so he works for a communications company but he he does you know doing taking all the stuff in and taking it back out why are they laying over by off um i think they're just looking to close down that warehouse um there's kind of a merger going on and how long has he been there 26 years wow sheesh they're offering him a severance i mean And he is going to get a severance.

2:02:11How much? 39-week severance at his current rate.

2:02:16Dave Ramsey:Okay. So at least we have that. And then as soon as December comes, we're going to start looking for a job for him. No, no. We're going to get a job now, between now and December, that starts at the end of December. But you start looking now. Okay. You know how fast Christmas is going to be here? You blink and it'll be here. Yes, I do. Yeah, don't blink and go, well, we got 39 weeks. No, listen, here's the plan. The day he gets laid off and they put him, sign him up for the severance, a week later he starts the new job. That means you just gained a signing bonus of 39 weeks. That's right. Okay.

2:02:57Now, should we stop contributing now to his 401K and work on paying off our debt? I mean, we do have a little bit of debt.

2:03:04Dave Ramsey:Oh, you should have already done that regardless of being laid off. I'm sorry. Yeah, how much debt do you have? I mean, no, we're definitely trying. I mean, I've been trying. No, you're not trying. You haven't stopped contributing to it. Well, the problem was I was let go last year unexpectedly, and that kind of— That doesn't keep you stopping to contribute to him. No, what Dave is talking about is the best way to pay off debt quickly is to temporarily pause your investing so that you have all of your income to throw out your debt so that you can pay the debt off as fast as possible. So in your situation, no matter how much debt it is, go ahead and – it's a temporary pause, right?

2:03:40Pay off the debt, and then once you've stacked up three to six months of expenses, now we can press play on investing again. Do you guys have any savings? No, not really. I've been really just trying to pay off the debt, and then, like I said, I lost my job, so we kind of got set back a little bit. How long ago did you lose your job? I lost it last November, but I got a new job in January. So I've been, you know, trying really hard. My son just got married, so we were helping them with the wedding as well. So there was just a little bit of a delay there. But we are definitely back on track. Like, he's gotten a second job.

2:04:17We're just trying to pay this stuff off. So Jay's right.

2:04:21Dave Ramsey:Temporarily stop all investing and saving. And focus every ounce of energy you've got on reducing debt. How much debt have you got? It's$13 ,000 in credit cards, and then we still owe on our house. Okay, so only$13 ,000 and you're done. The feeling you've got to have around this is a never again feeling, because you experienced the job loss last November. He's experiencing the job loss now, and that would feel completely different if you had no debt with six months saved, wouldn't it? Right. So that's what you've got to tell yourself, is there's going to be another storm at some point in the future, and when that happens, I'm going to be ready.

2:05:00I wasn't ready last November. I wasn't ready this time, but the next time I'll be ready and that preparedness starts today, right? Okay. Yeah. Yeah, very good.

2:05:10Dave Ramsey:So, Jeanette, I want to reiterate because I really think you drove by this on me. Get a job. Have him get a job now. Start working on it now. Do not wait because it's going to sneak up on him. And December is not a good month to look for a job. No, it's not. Right. Right. So September for sure. I want to have several good leads, if not already figured out. It says, OK, I'm going to have to start late. I can't start until January because I'm getting 39 weeks severance. Unless you want to pay me for the 39 weeks, I can't start early. But I really want to come to work here and I want to come in January.

2:05:45Dave Ramsey:And he starts shopping around and looking for that position. It's going to take a little while to land something. He's not used to doing it. It's been 26 years since he went on a job interview. Right, yeah. So don't wait. Just because there's severance doesn't mean he gets to sit on his butt. No, no, no, he definitely doesn't want to do that. I know, but he's going to be sitting on his butt if he doesn't have a job. I'm trying. So we've got to line him up a job. He's got to be ready to go January 1st if they lay him off. You know, first week of January, they lay him off last week of December. Wow.

2:06:21Dave Ramsey:But 39 weeks of severance. So six months, seven months, eight months, which is not much for 26 years. Yeah. And if you're not careful, it can make you kind of lull you to sleep a little bit. It acts like it's a lot of money. Oh, I got eight months. No, you don't. Yeah. You get to put that eight months in your pocket, extra money to build wealth with, and turns this job loss into a blessing. That's right. The goal is not to have to touch that. That's the goal. That's the thing. And turn it into a signing bonus by getting your timing lined up and your dominoes lined up and then push that end domino and go, go, baby.

2:06:53Dave Ramsey:go here we go go go get it get it get it let's go and that that makes all the difference in the world but um the human tendency is to act like december's a long way away 39 weeks is a lot of exit ramp right right i'm okay everything's okay and you're gonna look up and it's gonna be december the next year and you're gonna be going well that's when we went through the hard patch yeah because i didn't get off my butt and go get a job now consider it a blessing to know oh and by the way if someone offers him a job for 75 000 this week forget the severance gotta go get it take it that's more than your severance is gonna be take it yep he might he might figure out he's worth more than they've been paying him for the last five years this could be if you treat it right the biggest blessing has happened in years because it pushes you out of the nest and makes you go fly oh yeah you gotta you have to believe that that's it's a possibility it's as big a possibility as a crash.

2:07:49Dave Ramsey:Yeah. But you better get after it while you can. It's good stuff. That puts us out 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.