Money Issues Aren't the Problem, They’re the Symptom

27:29Have you thought through this? yeah um i i'm doing online school um there are only prerequisites right now so um i uh i work in the evenings i work four to ten and my aunt is watching him basically exclusively um while i'm at work okay and then um uh just i want to see what i can do like grind out as much as i can school work get ahead as much as i can and just save as much money as i can okay Well, you've already pulled out the loan, but for the future, can we just quickly cover the fact that that's not the way to get ahead financially? Because had you called us a week ago before you did this, I would have said, let's press pause on the psychology degree and let's get our life stable.

28:18And I'm loving that you got into a local church and the church is helping you, but taking out a loan for living expenses is not the answer. And so I would not do this much further. I want Jade to kind of jump in here and walk you out of this deal. But is there just quickly, is there a specific question you had for us today? Because I understand your situation is tough. But before she covers that and going forward, is there anything else that you were specifically asking? just what what are my next steps like now that i have taken out the loan now that like just what can i do from here to give my son the best possible outcome okay perfect all right so i i really want ken to hit the work part because right now you said you're working from four to ten how much are you bringing home what's your income right now let's see if that's a livable wage?

29:09Right now I average about 200 good days. I make a little over$300 a day. Okay. And what's that breakdown to a month right quick? So I just started Wednesday. I don't have that like off the top of my head, but I'm making So like around 4 ,000 bucks? Around, yeah. Okay. So the first things first is you're in the hotel right now. So first things first is we need to say, okay, what do we need with our 4 ,000 bucks a month? Where's an apartment near me? I want you to do some apartment homework and find out what's near you that you can get 4 ,000 bucks a month. Okay. So where you are, I'm not sure, but see what you can find, even if it means, you know, finding somebody at that church that's maybe renting out, you know, a rental space, room over the garage, get really, really creative and don't just take the first option that comes to you.

30:03So that's thing one, finding a place to live. And then you've got the support of your aunt. And I want you to really talk with her and make sure she understands what she's signed up for, which is, hey, life's going to be tough for me for a while. I need to know I can count on you. And really make sure you're building into that relationship because she's your lifeline right now. So that's thing two is making sure that you are really opening up the lines of communication with her and making sure she understands what she's in for. And then after that, I'm inclined right now because I think you did the school thing out of fear and out of like trying to find a way out.

30:41I don't think you have a clear path there yet. If I were you, I'd turn around and give that money right back. Yeah. I was going to ask if you could do that. I didn't know. Pay it right off. Take the money, turn around, pay it right off and be done because you haven't given it to anybody yet. And that's not the way that you want to buy a car. It's going to cause you so much headache because you're making an income. You just need to give it a chance to play out. That's right. So give that money back. And then Ken is going to set you up with when you're able to decide if you even need to go to school.

31:08Kelly, let's give him, Anthony, we're going to give you my book, the Get Clear Career Assessment, Find the Work You're Wired to Do. Take 18 to 20 minutes on this and let's get some results and start ideating on what a path looks like in the near future, not right away. But here's the deal. The reason I told you to take a deep breath is. You've been through a lot, but I can tell you, you've landed well. And the ant is a saint. And now it's doing exactly what Jade said. And let's work as much as we can. I mean, as much as we can. I love giving the money back. Pause all education and let's get stable because you need to heal and getting healthy and stable will allow you to get clear and confident on your future.

31:50Hang on. We're going to take care of you.

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33:43All right, let's go to Chrissy, who's joining us now in Texas. Chrissy, how can we help? Hi. Hi. This is Chrissy. Christy. Yes, I know. Hi, how are you? Thank you. I'm not doing too well, but thank you for taking my phone call. Okay, we're here for you. What's going on? My husband was not able to be on our home loan when we bought our home, so his mother volunteered herself and co-signed, so her and I are on the mortgage. He committed suicide in December, so that put our family in a huge... um my son and i were both there when he did it oh my gosh i'm so sorry i don't even know what to say i couldn't i couldn't work for months um my son and i are both in therapy um i have ptsd i have complex grief i have trauma-induced psychosis um so it's just but i am working like i couldn't work for the first three three and a half months but i'm doing great now like with therapy therapy's helping so much, but I am working.

34:42I am. Um, so with her being on our, on our mortgage, um, I need her to sign off on anything. Um, so my mortgage company has been amazing. So they, I let them know exactly what happened and they have, they have, uh, they put us in forbearance for a little bit. Um, and then they were putting us in like a loss mitigation where they've decided themselves that they were just going to forgive what was owed. I mean, a few months that I had, oh, they were just going to forgive it. And it was, I just had to sign it. My mother-in-law had to sign it. So this was back in end of March, beginning of April. So she had to sign it.

35:20And she, I sent her the papers a few times. She kept missing the deadline. So I'd have to get them reprinted by the mortgage. I just got a letter from her lawyer yesterday. She's not going to sign them. Why not? There's, there's no reason. Well, the reason from the lawyer was that, um, they said they don't think that I can make the payments, which I have, I was, I was like, my husband had actually been depressed that whole year. I was making all the payment. What is the payment? It is$2 ,100 a month. And how much do you earn? I earn between 5 ,500 and 6 ,000. That's, that's, I mean, that's between, um, and then now I, now I get social security.

36:02And how much is that? $2 ,400. Okay.

36:08So is it mother-in-law or your mother? Mother-in-law. So I'm tracking. So what happens? Let's just assume we can't change her mind. What is the arrangement now with your mortgage company? They know all this. It seems like they've been very kind to you and they know what you're up against. Have you told them, hey, my mother-in-law is not playing ball, and she's not going to sign. Right, and they've given me the option to refinance, of course, him passing away in December, those few months that I wasn't making any payments. I wasn't making credit card payments. The crazy thing is I have caught up on most of the credit cards.

36:47I've paid off any bills that we were behind. I paid off my vehicle. But you said they gave you the opportunity to refinance. That's what we want so you can get her off the loan. They won't allow me because I don't have a 620 credit score because my credit went down when I wasn't paying bills. Okay, so what's the other option? Sounds like you talked to them, so what are they saying? Yeah, foreclosure. And I'm trying to keep my home. I've got children. I'm trying to keep my home. What do you have to do to get out of foreclosure? I have to pay whatever I'm behind. How much? Right now, with all the fees, it's like$18 ,000.

37:23You have any cash at all? I do, but nothing near that. I mean, and I just get off a vehicle. Well, no, no, we're trying to work through this. So listen, we're trying to work through this. So I just need, I know you're under it right now, but we're just trying to work through this. So let's go one question at a time. How much cash do you have? About$4 ,000. Okay. So we need$14 ,000. Well, next question. Before we land on this being the right option, was there trauma in that house? Trauma, yes. Yeah, he committed suicide in the house. Okay, which is why I'm going to suggest that we sell this house.

37:58Yeah. I like that. You don't need to live in this house. And this is a trauma-filled house. And right now it is a major source of stress. You need to sell the house. And then you're free and clear of the mother-in-law. Whatever. If there's proceeds that come out of it, you guys split it, go your separate ways. And you need to start over and create a new life that is not inclusive of this house. I'm just afraid that I can't afford to purchase a house. I bought it with two income. I understand. Well, let's walk through that. You will, because here's the thing. You just got through explaining to me why you can afford a$2 ,100 a month mortgage.

38:33And you can. You're making$8 ,000 a month now, including the Social Security. Now, here's the thing. It's going to take some time, but you're rebuilding life. It's not like you just pushed pause and now we're pushing play again on a fully built life. You're starting over because you've had this major trauma take place. Let's look at the numbers, though. um and by the way i'm glad you jumped to that i was reacting to what you said i think jade's right the best thing for you to do for multiple reasons emotional and financial sell the house so i'm with it let's play this out how much could you sell the house for have you looked into this uh when we bought it um it appraised for 275 i bought it for 205 okay but that's not okay so i don't think you know what it's worth today do you i don't know all right so here's the deal Do you have a real estate professional that you've already used before and you know and trust?

39:22I do, and I've reached out to them. I'm waiting to hear back. Okay, great. So here's the deal. So step one, they tell you what they think the market bears for that, okay? So you owe how much on the home? I couldn't tell you that number. I just know what I'm behind on. Well, you need to go get that number. That's your number one homework is for you to find out what you owe on the house and what it's worth. And then from there, you can find out, okay, if we sell this house for what they say it's worth or it's somewhere near it, lowball. I want you to lowball everything so that you're pleasantly surprised.

39:51So, Christy, you don't know the numbers, but let's say that you said you bought it for 205. How many years ago? A year ago. One year ago? Okay, so you're probably going to break even. Yeah, you might break even. But here's the thing. You may come away with a little bit of cash. Who knows? I don't know. But you got to get those numbers. So that helps us there. So maybe renting is going to be the more, I think that's probably the best play for you. It's fine. Renting is great. Renting is a preparatory phase for you to buy a house. That's what it is. It's time for you to do your research. It's time for you to save up money.

40:23And in your case, it's time for you to just have a moment because when you're renting, do you know what's not your problem? Anytime the AC breaks, anytime the roof breaks, anything, it's not your problem. And you need a life right now that is very simple with very little problems. And so I think renting is a great option for you right now in the interim. There is a time when you're going to buy a house again, and it's going to be a joy-filled time. But right now, it's time for healing, and it's time for simplification. And the numbers that you gave, Jade and I, you can easily afford a nice house once you get a down payment.

40:59So it's going to take a little bit of time. But again, you're bringing in plenty of income to afford a decent house in your area. So be patient. Continue to work on getting healthy and your family getting healthy. And then there's a day coming where you're going to be able to have a nice house. But, yeah, the mother-in-law thing is toxic. Jade's 100 % right. That's the right play. We're pulling for you. What you've been through is so tough. Thank you guys very much. Thank you all very much. We're working through it as best as we can. You're doing great. I was actually considering bankruptcy. No, you don't.

41:38Because you didn't tell us. I mean, is there other debt to speak of? You told us about the house. What else? Oh, this is actually easy. This isn't easy. There's like two credit cards that don't have a whole lot to them and paying them down. Good. They don't have too much on them. Good. Good real estate agent's going to help you out of this deal. And make sure you're communicating with the mortgage company. Go, here's what's going on. We're going to sell the house. It's time to move on. They're going to get their money. They've been great to work with you. but make sure you tie up that end and forget the mother-in-law.

42:06No more communication on this. Forget it. There's some bad blood on that deal. That's not just that she's concerned that you can't make the payment. Yeah, that's right. Something about that feels really bad. And by the way, I feel horrible for her. I mean, this is her son. So I'm not casting judgment on her. This is a horrible situation for everybody left behind. But we want to make sure that you hear us, Christy. Like you can actually get out of this. sell the house, take your time, and just heal. Yeah. Okay? Thank you so much. Call us back if you need us. Call us back. Call us back. That was wonderful.

42:42Thank you very much. Yeah, we're walking with you on this, okay? Kelly's going to take good care of you. You've got to get back on and either the pep talk in two weeks. Whether we're on here or not, someone's going to help you, okay? Bless you guys. All right, we love you. We're thinking about you. Oh, my goodness. Well, there's real life right there. That's the tragic side of things. But the wisdom that you gave her, I just want to recap to our audience. What Jade said was, hey, when you've got trauma that has been forced upon you, don't complicate it with money decisions. Simplify, simplify, simplify.

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44:53This is The Ramsey Show, where America hangs out to have a conversation about their life, specifically their money, their work, and their relationships. We're so glad you've joined us today. 888-825-5225 is the number to jump in on the conversation. 888-825-5225. And sitting alongside the incomparable, the fabulously talented Jade Warshaw, I'm Ken Coleman, and from hour one to two, I got a wardrobe change. First time I have ever done this. And Jade's husband, Sam, who's become very, very dear friend, presented me with the latest Warshaw Entertainment tee. And it's a boxy tee. I'll be honest. The only one I have.

45:38That's right. You look good. I think I'm pulling it off. Styling and profiling. My shoulders could be a little broader, but I can't do anything about that. Hey, Jade gave me a hoodie that's a little big for me. If you want to try it on, see if you can wear it. Oh, okay. All right. All right. But I'm bringing this up because if you don't know Jade and Sam's story, they paid off nearly$500 ,000 in debt. They literally live what we teach. And how they did it, they were traveling on cruises. Both of them were fabulously talented in entertainment. But then as a result of all those crazy cruises, tell people how many cruises you think you guys did.

46:15Oh, lordy, lordy. A quick guess. What do you think? For sure about 40 weeks a year. 40 weeks. What does he put? Sam is drawing a number in the air. 2 ,000? 2 ,000? 700 cruises. 700, okay. Hey, I can't believe I lip read that. That was amazing. I suck at that. My wife thinks I'm terrible at lip reading. But anyway, as a part of that, Sam learned the business of booking the very talent that you all were and now has a great company. Yes. And it's your company as well. Yes. And I'm proud to promote it. You are... Warshaw Entertainment. So if people... Who would call Sam? What are they looking for?

46:48Anybody who's a musician. if you are a musician by your own right. If you're a comedian, we take comedians. We take dancers. Ken, you going to audition or what? No, Sam would never book me for anything. Well, no, I could emcee. I'd be pretty good emceeing on a cruise. It is official. I'm known to be good on a mic, untold. I mean, we were friends before, but you're the big homie now. Like, this is different. Oh, no, I love the Warshaw. So I'm representing here, by the way, for free. But we're over at your house tomorrow night. So maybe I get an extra beverage. Yeah, and we'll get one for you too, James.

47:19Don't worry. James, we'll break out the good stuff for you. Since the hoodie didn't fit, I feel bad about that. I'll take the hoodie. I'm a hoodie guy. Kim, you bring up a good point because that does speak to my point of view when you guys call in and you have a bunch of debt. That's why I'm always saying sometimes the nine to five, you know what I'm saying? Like the paycheck doesn't cut it and you have to go out there and create something that will cut it. You got to hustle. And you can do that. So when we tell you all to get a second, third job, we've done it. All right? You don't want to hear my war stories either.

47:47I do want to hear them over a cigar one night. That can be arranged. Nathan is up in New Hampshire. Nathan, how can we help today? Hi. So I'm calling because I've got about$43 ,000 of credit card debt. And I was potentially considering one of those debt repayment programs where they kind of settle your debt for a lesser amount. I just wanted to get your guys' take on that. No, it's awful. We're going to help you. Yeah, we wouldn't suggest that. Could I be a little more clear? Was I a little fuzzy? Yeah. I mean, at the end of the day, those places are not doing anything for you that you couldn't do for yourself.

48:29And you can actually do it in a more integral way. So in essence, what they would do is you'd pay into a pot and they'd let those payments sit while your other payments become delinquent. and then at that point they'd be able to make a deal and secure a lower, you know, a lower deal for you. And that's kind of the way it works. But of course it's laden with fees and things like that. So again, there's part of this that you can do on your own. For instance, if you do have any of them that are delinquent or in collections, you can go ahead and secure a deal for pennies on the dollar with those. And then for any that are remaining, we're just going to work the debt snowball with them.

49:05And we can talk more about that in a minute. What I really want to get from you is a bigger picture of your finances right now is the 43 ,000. You did say 43 ,000, right? Yeah, it's about 43 ,000. And actually, all of it except for I have a$3 ,000 loan that I've been paying on for like the last year since I started working again. And that's the only one that's current. Everything else has been in collections for a few years now. I had a pretty significant life event. I kind of just went off the rails. I went into homelessness and stuff, and it's just not a good season for me. What caused that?

49:45Was it a little job loss or medical deal? What happened? Yeah, I went through a pretty painful divorce, and then a month after my divorce happened, my dad died. I did not fare well through all of that. I understand. Okay, but you feel like you're stable you feel like you're in a good place now yeah yeah so um my current situation i i am i'm living rent free with a friend who's letting me exchange uh work on his house for for housing okay how long will that last and uh um it's it's indefinite you know it's it's a god thing okay um you know he's christian christian dude who uh has taken in a couple of different people over the years.

50:34Unless he meets a lady. So it's not indefinite. Yeah, well, and that's what, yeah, that's what I keep telling him. I'm like, I wish that you would just meet somebody so that I have a reason to move out. My point of saying that is I want to make sure that you're on proper financial footing if and when that happens or just anything changes and, you know, you guys decide you want to part ways. So you've got the 43 ,000, 40 of it is in collections, 3 ,000 of it still paying, what's your income every month? So I just actually, today was my last day working for Liberty University Online Academy. And on the 25th, I'm going to start working for a local paper mill.

51:15And that's going to be$26 an hour. It's roughly, well, it's 40 hours per pay period, but they do shift work. I'll get eight hours overtime in each pay period. So what will that be a month with the overtime and everything? I haven't actually run the numbers on that. I just know it's an$8 an hour pay increase from what I was making as of today. Okay. So let's say you're bringing home$5 ,000, $6 ,000 a month. Does that feel right? Yeah, I think it'll be about that. Okay, so with that, what I need you to do is you need an every dollar budget. Do you have one yet? Because if you don't, we'll give you one.

52:01I don't. Okay, so we're going to give you an every dollar budget. It's the best budgeting tool out there because not only is it going to help you understand what you're spending your money on every month, it's going to help you find margin, okay? And when we give this app to people, I want you to understand this very clearly because this is going to blow your mind. When we give people this app, it's going to help you find up to$9 ,000 of margin in the first 15 minutes, one-time margin, which means this is money that maybe you've been allocating in other places that are best suited for your debt situation right now.

52:34So that's the average number. Maybe you'll find five. Maybe you'll find four. Maybe you'll find 11. But you are going to find money and margin to put towards this$3 ,000 loan. and hopefully knock it out really, really quickly. And then from there, the app is like having me or Ken in your pocket. It's gonna tell you what to do based on if we were there with you. So we're gonna give you that for free to try for a little while. And yeah, it's you walking the debt snowball. Once you find out, okay, every month I have$4 ,000. You should have a lot because you don't have rent. I have$4 ,000 I can put towards this debt.

53:07How quickly can you pay off$40 ,000 with 4 ,000? Plus, you're going to settle this for half, right? So let's call it 20. Really, really fast. Okay? So hang on the line. We'll get you set up with every dollar and walk this through one at a time. You know what will help people get out of that fast? What? If it's getting me out of their pocket, they'll get out fast.

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55:05all right let's go to will in milwaukee will how can we help hi yes thanks so much for taking my call yeah sure so i'll give you the quick backstory uh i'm 28 years old. My wife and I are debt-free except the house. We have about$180 ,000 in our retirement accounts. When we go do projections on what that's going to turn into when we're 67, it's north of $8 million, even if we stop contributing. So we're contributing about$4 ,000 a month right now. And my question for you guys is, would it be unwise for us to start reallocating that$4 ,000 a month to help pay off the duplex that we're living in right now and eventually pay cash for the next one, all with the goal of creating some income that we can use to supplement in the years leading up to retirement.

55:50That's a really good question. So let's play this out based on what portion of your income is the$4 ,000. Is that 15 % of your... It's right around 15%. Okay, of gross? Correct. Okay, so you're proposing, hey, instead of putting this to retirement, I'd like to put this towards, yeah, the real estate dream. Correct. Okay, I would not do that. Now, if you were investing more than 15%, I would say, yeah, let's pull it back to 15 % and put the rest on the property. But it's so important once you've reached the point that you've reached, right? You've paid off all of your debt and you freed up your biggest wealth building tool in order to do that.

56:31And so I love the idea of diversification. And you're doing that, right? If you're investing 15 % through your 401k, through a Roth IRA, you are diversifying that amongst your different funds. But you're also, if you're putting anything towards your mortgage, which you are, that is a forced savings account, which is also an investment. So you've got that working with you. Anything above and beyond that, I think it's going to throw you off track because here's the thing. You are going to retire one day, right, when you're in your 60s or your 50s or whatever you decide. And you're likely not going to sell the house that you're in immediately and use that money to retire on, right?

57:10You're going to be living there. So giving time for your 401k or your Roth IRA to compound over time so that you can live off of that is important. And so if you stop contributing to that now, do you see what I'm saying? You won't enjoy that growth in the future. So that's why we say at Baby Step 4, invest that 15 % of your gross income and then anything above and beyond that. Now we're putting extra on the mortgage and we're paying off the mortgage. And once that's done, anything above and beyond that, now we can put it into new real estate properties that we can purchase. Does that make sense?

57:45That does. Yeah, I guess my fear is struggling with money from 50 to 67, having a stacked retirement account and just counting down the days until I can touch that tax-free. Oh, I understand. But wait, wait, wait, wait, I don't. Why would you be struggling? Because he doesn't have a bridge is what he's saying. But what about your income? there's there's definitely our income i guess it it just feels like 67 and beyond are kind of covered i'd like to start working backwards and cover us from 45 to 67 now well okay well i did have a question again i don't understand that reasoning but let me go back for a second i thought i heard you say that you guys are living in a duplex that's correct so when you asked the question to us so you're living in a duplex you're living on one side and renting out the other Yes, sir.

58:36How much do you owe on the duplex? $4.30 and some change. Okay. And your question was, should you take that fourth out? So you're saying, do I stop baby step four, 15%, and go all in on baby step six? Is that what I'm hearing you say? That's correct. Yeah. No, I agree. Jade's right. No, we don't just stop. And you're going to be thankful for that because, dude. But to that point, I guess I'm not understanding why you think that you're somehow going to be better off if you have two properties. He wants income producing things beyond 59 and a half. I totally get it, but I'm playing out the call.

59:20Okay. What you said to us was, should I do this and get another property? So now you would have really two properties. the one you live in spitting off some rent, and then another property spitting off some rent. Am I still on the same page? Yeah, that's correct. Okay. How much would you anticipate that spitting off an income? Real number. So if we pay off the place we're living in right now, it would spit off$2 ,500, and we would ideally buy a similar place that would spit off$5 ,000 a month. Okay. So that's$7 ,500 a month. That's correct. Okay. And how long is it going to take you? I'm going somewhere with this.

59:57I'm with you. How long would it take you to get to that place where you are now generating$7 ,500 a month from those two properties? How many years? Roughly eight to 10 years. My point exactly. You'd be better off continuing to do what Jay told you to do. And, and let's work on baby step six. All right. So let's pay it off. That's fine. But, but let's stay with the process. And so you're not going to take that 15 % a month and not invest it, continue to invest that. But if you're wanting to make more money, I think you'd be better off just following our plan and think about how much of a raise you're going to get when you get done with Baby Step 6.

1:00:40So let's just take that. How long before you're done with Baby Step 6 and you paid off this current home? Four years is the goal. Okay, so four years. So in four years, you get a nice raise, correct? correct yeah okay that's 2500 a month if i was paying attention yes okay and then what about our income what do we both do what are our jobs i'm in sales and my wife is a physical therapist you're in sales sales is is the greatest industry in the world for rate making more money what kind of what are you doing i sell a feed additive for cows well i don't know anything about the feed additive market.

1:01:19But tell me, is there room for growth? There's room for growth. I guess my dilemma is I don't want to do it forever. I'd like to do sales in a different industry. Great. Oh, this is a great idea. So you know what we do there? We start today on building that bridge. What industry would you like to be in? I'd like to be in the real estate business. Real estate. Great. Yeah. So now let's go get our real estate license. How long will that take and how much will it cost? It's in the works right now, a couple hundred bucks, maybe six months left. Okay, great. And when you're done with that, I want you to call Buffini and Company, my good friends, Brian and Dermot Buffini and that company.

1:01:58They're the number one real estate training company in the world and do everything that they offer and you're going to become a high performer. And now we're going to be looking back on this phone call on this day and we're going to go, man, I was selling myself short by trying to make an additional $7 ,500 a month and shortchanging myself when I'm older and I'm going to be crazy wealthy. So I love your spirit. I love your aim. You're just misguided in your plan to get there. So work the baby steps and let's go make more money. If I want more money now before I'm 67 and drawn from retirement, I'm going to go make more money.

1:02:34And here's what's great. Will, you've already got a great plan to do that. Real estate, there's no cap on that. No cap. Plus, here's the other thing. Once you get to the point where you, to Ken's point, if you continue to grow your income and you're still investing 15 % of that, what's going to happen is you're going to start maxing out your 401k and you're going to look for somewhere else that you can invest. And maybe you'll look over and do like a little brokerage account that if you do decide to retire from your job early before 59 and a half, that will spit off some money for you as well.

1:03:07So all of this has a win-win potential over the long haul. Ken, you're a magician, by the way. Why? Because you crafted that call. You just, you turned it in. Oh, boy. You did a little abracadabra, and it turned into a work. Wow. It turned into a... Well, you know, I appreciate the kind words. Will, are you tracking with me? I am. Yeah, that makes sense. Yeah, listen. Great. Your hunger is where it needs to be. Now, let's just put all of our focus on winning in the transition to real estate, crush it, enjoy life, and you're going to be a very, very wealthy old guy. Love it. It's going to be fun.

1:03:40got it yeah thanks for the call yeah i well thanks i don't know what i didn't think it was very magical it was just like wait a second you saw the yeah he's all focused on in the hat i'm gonna try to use my baby step for money to max out and i'm like that's not that big of a play yeah let's get more money i'm not sneezing at 7 500 a month but it was going to take eight years that's facts and oh by by the way if he's a real estate professional next year he should be making $7 ,500 a month. Clock it. Easy. You know, so anyway, there it is, folks. Don't outthink all of this. I gotta tell you, I love when people call and they think that there was a caveat in the baby steps.

1:04:21Old Dave didn't think about this one right here. And it just, they work. The baby steps work. They do. And if you're a new listener, save yourself the time and energy of calling us up and trying to re-engineer them. It ain't happening. It's not happening. You're wrong. we're right and so therefore let's just cut our losses that was the perfect i said it ain't happening you said it's not happening

1:05:08All right, the Randy Soap question of the day is brought to you by Why Refi. Defaulted private student loans can wreck your peace of mind, your finances, and your relationships. Y-Refi offers hope with custom refinancing based on your unique situation and ability to pay. Visit YRefi.com slash Ramsey today. That's the letter Y-R-E-F-Y dot com slash Ramsey. It is not available in all states. Okay, today's question comes from Greg in Minnesota. He says, we're on baby step three and saving for our three to six month emergency fund. We are consumer debt free and just purchased a home last year. That is within our budget.

1:05:44I'm looking for advice on whether it's okay to add Botox for my wife into our budget or if that should be held off until we have three to six months saved. I've heard Botox is expensive and I don't want to stray from our system by adding on any ongoing payments to our budget. Our current home income is$150 ,000. and we currently have$35 ,000 in our emergency fund and any insight would be appreciated. Okay. How much does Botox cost? I don't know, Ken, because I don't need it yet. Hey, okay. Well, look at you. She's fabulous. Black don't crack. Knows it. All right. Yes, you just said that. I love it.

1:06:32Can we say that? You just did. I mean, I did. You just did. And I have no problem with it. All right. Here we are. He's got$35 ,000 saved. Now, I don't know. He says his income is$150 ,000. Yeah. So three to six months there. Let's see. What are we talking about? What's a net on$150 ,000? Oh, it depends on the state. But let's just say you're bringing in, I don't know,$12 ,000 a month. Here's what I want to remind people about with the baby steps. And when it comes specifically to baby step three, it's your basic budget. Okay. It's not you trying to 6X your income, if that makes sense. Do you know what I mean?

1:07:11like what you bring home for that month. That's not what we're talking about. We're saying, okay, when I do my budget, there's the things that I need to do. And then there's some of the things I want to do. And then there's all the extra miscellaneous. When you're doing your emergency fund, it's kind of what must be true to make the household run. That's what we're looking for. So my guess is that he's pretty close to being there. Now, Botox. Here we go. I've done a little research. What do you got, Ken? um this is of course you know some ai chat gpt stuff here we go the average cost for regular botox treatment can range now this is where this gets crazy but this gives you something to work with can range from 200 to 1200 per session so me thinks that the hundred dollars per session how often though how often uh well it just says per session so this comes down to your vanity It's not like, you know, okay, generally prices range from$10 to$25 per unit.

1:08:08And most people require between 20 to 60 units for common treatment areas like forehead lines, crow's feet. Let me tell you something. But how often do you get the units? Is it like every six months? No, no, it's up to you. There is no... Yeah, Kelly is saying like every six months is kind of... Oh, is that right? Every six months? Yeah, give or take. And I have a couple of friends who have said something like that. But I think that boils down to, again, how vain you are. And listen, 20. Or how deep your wrinkles. Okay, I got people in the audience out here going three months. Every three months?

1:08:36And is that cost like seven? Do you use it? You're every three months? Oh, this is great. We're talking through the glass. We're getting real-time info. It's real-time info. Okay, so run the numbers on every three months. Every three months. And let me ask you a question. The$200 to$1 ,200 per session, how close to that are you? Are you on the low end or high end? I can't read it. About$700. okay so let's say let's just pretend she's spending seven hundred dollars every three months yeah you got a budget for it you got a budget for it and i think that you know they've got their house they're in baby step four this is the time where you can do you start to live your life because you're out of debt and they've got three to six you don't have a problem with that number do you based on what we know about their income i don't as long as they're not going into debt for All right, here's, let me go through the framework about knowing how to spend.

1:09:32Okay, so it's kind of these five questions that you ask yourself. So the first one is, am I a person who's budgeting? Do I budget my money? Yes, I budget my money. Okay, that's a green light. Next one is, am I a person who's out of debt and lives a debt-free lifestyle? Yes, that's a green light. Next question is, do I have the proper insurances in place? If you do life insurance, all your other insurances, yes, that's a green light. Next thing is, am I a person who's saving for the future? Well, yeah, you are. You've got your three to six months. You're about to start on your baby step four as soon as that's done.

1:10:08Yeah, you're a person who's doing what we teach in line with baby steps. And finally, am I a person who's prioritizing generosity? If you're doing those five things now, it means that if you have something pop up like this, should I take that little trip to Disney? Should I do the Botox? Should I get a new couch? Likely, as long as it sticks in your budget and you're not going into debt, because we already said you're a debt-free person, the answer is likely yes, because you've proven that you're a financially responsible adult. And this is just called fun things that you get to do when you're a financially responsible adult.

1:10:41So I, me thinks, the answer is yay. So Kelly, by the way, I was doing more research as Jade was breaking that down. You're right. the typical effects of Botox last three to four months. So if we do the three month thing, way to go, Kelly. I know you don't need it. She's young and very young and looks lovely. Excellent. I needed to make sure I mentioned that. I think she was making that. Have you tried it? No, I'm not putting that in my face. You wouldn't try it? Why? Wrinkles on a man are signs of failure or wisdom. Why is that? I'm not ashamed of either. It's so funny. When guys get older, they're like, the age is like, oh, yes, this is a good thing.

1:11:23I'll tell you what else I'm not doing. I'm not coloring my hair either. Never? Never. Okay. I'm not going to do it, man. You're going to go silver fox. I don't want to offend anybody that does the Botox, but it cannot be good for you. I do feel like it looks better when men get their face pulled too much. Let me tell you. It's a little weird. All right. I'm going out on a limb because I don't mind. Go for it, Ken. This is my opinion. Testify. This is not a Ramsey show official opinion. Okay. But as a guy, I don't think Botox makes ladies look better. It makes them look like they have Botox. That's when they've done it incorrectly.

1:11:59In other words, I look at them and I go, she... No, no, no, no, no, no. No, I love it. Listen, I love Landman. It's one of my favorite shows. Demi Moore. Okay. Demi Moore is beautiful. She's older. It's very obvious to me that Demi Moore has got the Botox. Because she went too far. When you do it right, no one even knows. How do you know? Because I'm a woman. can't call me not done it but i know the women who have done it and when they do it right no one is they're none the wiser all right so i'm gonna i'm gonna revise my opinion okay for those of you women who aren't doing it right we know because when you laugh nothing changes nothing and i don't think that's normal i feel like i'm looking at a um a madame tussaud uh wax museum figure okay that's not natural let's go deeper in the hole because we're in it now natural beauty we're in the hole now ken no i'm not no not you we because we're talking about it we're gonna take it a step further i like where this is going okay this is question of the day the why refi folks are getting their money's worth i'm telling you right now so i do think that when you do botox and invest in getting it right you can do it if you're doing it right no one really knows and you started early enough to where no one knew you had wrinkles that disappeared in the first place i'm cynical now the thing we really need to talk about is these lip injections oh no that's completely obvious it looks like you got stung by a bee and you've having a reaction that's what i've been saying it's it's ridiculous so what we're saying is let's reallocate this money women no more lip injections reallocate that money what i'm saying is that is a foreign substance yes or no yes it's a foreign substance it it it's a paralysis it it paralyzes the muscle that's what it is i just gotta tell you we all know and so if the point is to try to look better and it's not no you all are failing not all i think the people who do it right i'm trying to tell you there's people who do it right i okay i just say i'm just saying i i why can't we just be natural because we can't you're right we can't say something this new segment is called kinsplaining and it's going to be a regular thing we do.

1:14:05Kinsplaining. I like it. Kinsplaining. Okay, how do you feel about I'm pro-woman on this. How do you feel about a man who gets like hair plugs or like does something like that to improve his appearance? I got a different position on that because you can tell. Because if it's back here, no, if you get it back here, you can't. Now, if you get a hairline, like my hairline has been receding for quite some time, I'm very aware of it. But if I show up next week and it's an inch down here, we all know something's not right. But if it looks good, Ken. I would support you till the end. But that's my hairline.

1:14:36It used to be there. So that I go for. Because the hairline was there, I'm restoring it. Your lips never looked like a raft. Ever.

1:15:09Buying or selling a home is a very big deal. And with the clickbait headlines and conflicting data that's flying all around, it's hard to know what's really happening in the housing market. And we want to always, here at the Ramsey Show, be on the front of all this junk and tell you the truth, not just use clickbait stuff. So median home prices stayed steady last month at about$441 ,000. The number of homes for sale hit$1 million for the second month in a row. And the 15-year fixed rate also held steady at 5.95 % last month. So if you're debt-free, have a fully funded emergency fund and a solid down payment, now is a good time to buy or sell to learn more about the housing market trends and get free tools to help you buy or sell with confidence.

1:15:53We got you covered. Go to RamseySolutions.com slash market. RamseySolutions.com slash market. Or you can click the link on the show notes in podcasts and YouTube. And by the way, I want to just mention, we give you a lot of information every show. The show notes, the show notes, the show notes. All right. I call it James Child's Treasure Trove. All right. He's got it all there. He just has it there for you. So don't ever fret if you don't hear us properly or you forget what we told you about. The show notes have it all. Lucy, you like that? I thought that was pretty good. I don't know how I feel about that.

1:16:28I can tell you he did not like it. Lucy is up in Akron, Ohio. Lucy, how can we help? Hi, guys. Thanks for taking my call. If I disappear suddenly, it's because my son had another blowout. Oh. I'm pulling him on my hip right now. What? Okay, she's got a little baby on her hip. A blowout? Yeah, he's a month old. Oh, bless his heart. It can't sit in there. Hey. In case anything goes wrong. Listen, we can handle a blowout. We got it. In fact, if we heard it, it would really wake America up. That would be even more fun, which I'm here for that. That doesn't faze me at all. All right. I make no promises.

1:17:08Okay. So the question we have for you is my husband and I, we want to buy a 12 or even 15 passenger van. It's future proof for our family. The problem is right now we only have two kids. We have a toddler and Will over here is an infant. And you already want a 15 passenger van? You got a major plan. problem i'm more concerned less about the plan of the van but the process of having that many kids you got a little guy that's experiencing blowouts on your hip let's take our time mom what are we in a hurry for yeah by the time you have the 13 seriousness stop this madness of planning for something that doesn't exist yeah by the time you fill the van the van's gonna be old like it's gonna be 15 years old that's part of why i'm calling the other part of it is we do have reasons why we're looking for a big, like a literally big vehicle.

1:18:03We have a collection of seven uncles. Seven uncles? The only one under six foot right now is 14, and he is rapidly approaching six foot. So we have big family genes. Also, my youngest two siblings are 11 and 14. Hold on. They just started at a very... Go back one beat. I'm lost on the seven uncles. Seven six-foot-tall uncles. How often are you transporting these uncles? That was more for context of how big our children will likely be. Oh, shut up. You thought she was going to drive the uncles around? I was concerned. Listen, what's crazier? What's crazier? What is crazier? Me asking about if she's driving the seven-foot uncles or her assuming she's going to have 15 seven-foot children 15 years before they're even born.

1:18:51Yeah, Lucy. Fair point. Fair point. Now that Jade has caught up with the same call that I'm on, I think she's right. What is that? Again, you literally, I went, this is what happened. I want you to hear what happened. Jade, Ken, should I buy, should my husband and I buy a 15-foot passenger or whatever for 15 kids? We only have two. Okay. And I went, well, that's a little silly. Maybe we shouldn't be thinking about that. And your response was, well, here's the other reason. We have seven uncles that are all six foot or taller. So we're going to need a lot of leg room. And thus, that's why we, these kids are babies.

1:19:25Right. I have more reasons to get to, though. Okay, go ahead. You're 0 for 2. You've got two strikes. What's the third reason for a massive van? Well, first of all, I run a youth group. So I would like to take the kids to places, all in one vehicle, to make it easier for everybody. That's not your problem. That's not your problem. That's the church's problem. somebody needs to donate a van you're correct i know that's three strikes what's next i'll give you up to five let's go for reason number four that you need to empty your emergency fund for this which is not an emergency none of these are emergencies and not only are they not emergencies they're bad reasons give me two more so we want to go on we want to go on vacations We want to be able to tow a pop-up camper and perhaps, like I said, take the younger siblings and have space for them as well.

1:20:21And the other problem is the other cars that we have are in varying states of disrepair. And so we're trying to plan ahead for that. Okay. So those are a little bit closer, but again, not a reason to – none of these are emergencies. And none of this is a good financial decision right now. If we can't afford to tow a camper, then we change our vacation plan and we go rent a place, a cabin in the woods. So, I mean, like, I don't know why. Jade is, she's gone. The church giggle is in full effect. Lucy, do you understand what I'm saying? Like, none of these constitute doing what you think you need to do.

1:20:58Like, let's just be patient. Let's fund these things. So where would you put yourself on the baby steps right now? we are about at baby step four we were investing seven percent and we temporarily brought it to eight or not eight percent that didn't make any sense zero percent so we could stack the cash for the cars because of the condition that they're in right now okay so our so so our next step is we need to plan for a car so we've got a sinking fund going to take care of the first car situation correct or are we going to have one correct we do that's the play right now not the gigantic van now when the day arrives god bless your soul if you've got 12 kids then we deal with that but not right now no we've got to continue the baby steps and then along the way if we've got to replace a car then that's what we begin to focus on but don't change the formula okay because we We want you to continue to win even when life stuff happens.

1:21:59And we need to never touch the emergency fund unless it is an absolute four alarm emergency. You with me? I am. I am. Okay. I can tell you about the other cars if that helps understand why we're looking at a car now. Yeah. Okay. Okay. So do you need to replace the car now? Are we in that kind of a situation? We have multiple cars that are not running. we have a 2010 ford focus which is the most reliable thing we have right now uh and it started shifting a little weird so we're a little a little wary what does that mean when you say it started to be weird is that it's making a clink clink noise the brakes don't work i mean what does that actually mean it's had a couple funks it's had a couple funks when it went to shift so it makes us worried about the transmission okay i forget how many miles it has on it, but I think it's like$200 ,000.

1:22:51It's a lot. All right, real quick. What's the second car? 2007 Toyota 4Runner that's going to the shop on Sunday. What's it going to the shop for? It is singing opera on the highway. We don't even know what the problem is. So it's making a high-pitched squealing noise. Not even squealing. It is changing pitch as we brake, but then not when we brake. It's very weird. Okay. My dad's a mechanic. He doesn't even recognize it, hence the shop. Okay. So there's part of this where I just feel like you are going to extremes on many of the things that you're saying, right? You jumped straight to the 15 passenger van.

1:23:31We jumped straight to this. And now we're assuming that you take these cars to the mechanic and all hell will break loose, right? Maybe it's just a normal repair. By the way, a Toyota 4Runner, It might require some work, but those are known to drive forever. How many miles you got on the 4Runner? That's exactly why we bought it. How many miles you have on it? You know, my husband is listening to the live, so he might text me how many miles it is. Oh, hi. I don't remember. Okay, here's my point. But it is also higher in mileage, quite high. Okay. Well, again, you guys have the money. It's otherwise good.

1:24:06But here's the thing. You have the money set aside to pay for those repairs. And so if that buys you time on that, great. And then let's take a look at the Ford Focus and go, what's the cost to fix that? We probably have the money to fix that. And now we then begin the discipline process of a sinking fund to replace one and then the second car. That's the focus, not a gigantic van that we actually don't need, but we're going to try to talk ourselves into because we'd like to drag something along behind it. But let's just stay simple right now because you've got a lot going on and take care of that little guy and his sour stomach.

1:24:42Hope that all works out.

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1:25:53This is the Ramsey Show, where America hangs out to talk about their money, their work, and their relationships. and we're glad you've joined us today. 888-825-5225 is the phone number. 888-825-5225. Alongside the incomparably fabulous Jay Borshaw, I'm just Ken. Isn't that the name of the song in the movie? Just Ken. I'm just Ken. Hey, thrilled that you guys are with us and we're going to get started right here with Andrew in Seattle. Andrew, how can we help? Hey guys, and thank you for taking my call. Sure. So I've got a kind of question. I've always been kind of money. I wouldn't say illiterate, but me and money were never big friends.

1:26:38So I've been following your plan for about three months, midway to my snowball. So my question is, I'm 56 years old, and I've stopped my borrowing case so I could basically get my snowball rolling. I've got two debts left to pay off. One is a credit card of$6 ,300. The other one is my car loan for$24 ,875. So my question is, once I get the credit card paid off, which is going to be somewhere around January, the card is going to take me another year, maybe a year and a couple of months to pay that off. Should I put my money back into my 401k prior to paying off the car? because with my age, I haven't put a ton of money into my 401k.

1:27:31I've only got about$150 ,000 in total assets so far, plus a mortgage. What is that$150 ,000 of assets? So I've got about$100 ,000 in an IRA from another previous employment, And then with this employer, I've got a 401k of roughly about$58 ,000. Okay. I can appreciate that feeling of wanting to take advantage of that compound interest as quickly as possible. But, yeah, you have to remember that this debt, as long as you have this debt in your life, it's going to keep you from going further faster. And so by paying it off, we're allowing us to focus all of our resources and all of our intentions at one thing at a time.

1:28:22And because of that, it's going to allow us to go faster and accomplish more. As opposed to saying, well, I'm kind of going to pay off the debt, but I'm going to also keep investing over here. You got to think about it. The way I like to think about it is if I have a pitcher of water and several glasses that I have to fill up. It takes me forever to fill up the glasses if I put a drop in each one as I go. But if I just go ahead and fill one up, that one's full. I can set it to the side. It's done with. And now I can focus all of my attention on filling up the next glass. So that's kind of how I like to think of it.

1:28:54Let's talk about this in real numbers for a minute. It kind of bothered me that you said it's going to take you till January to pay off the$6 ,000 in credit cards. Tell me more about what your margin is and what you're making every single month. so i'm in the snowball i'm putting about uh 1800 towards the credit card once that's done i'll be putting 2000 towards the car um so i have roughly right now about 1800 to play with to push towards these debts um the car loan itself is 395 a month so once the credit card's done i'll have that$1 ,800 plus the$300 and change to put back towards the car. Okay.

1:29:40And that's about as flexible as I can really get past all my other normal bills. Are you side hustling? I pay a mortgage. What's that? Are you doing a side hustle, picking up some extra money? No, I don't really have time to do that. I mean, I wish I could. I wish I had like a passive income that I could actually do. No, not passive, but explain to me more about, so you're 56, are you single? No. Okay, so married? So I have a housewife, yeah. Okay, a housewife. Is that your wife or is that a position? Yeah. So I have a wife. She's currently not working at the moment. Why isn't she working? So she's trying to get together a photography business, and right now it's very sparse here.

1:30:34Right. So here's what – and Ken is going to say the same. Matter of fact, why don't you say it, Ken? Well, I'm going to immediately go, what has she done in her work past that she can leverage from a skill and experience standpoint to go make some decent money right now? This speeds us up fast. If she's making somewhere between, let's just lowball it,$35 ,000,$40 ,000 a year, that's a game changer, you would agree? Oh, I totally agree. Well, let's press pause on the fledgling photography business. And she can mess around on the weekends at night and take pictures and get better and, you know, all that kind of stuff.

1:31:10And not like completely, you know, abandon it. But as it relates to a business, you know, what has she done in the past? What kind of work has she done? She was doing quality control in like an insurance company that basically moved out of Washington. What was she making? It's photography. What was she making? Like 40 grand a year? Yeah. Somewhere around there. Dude, are we not on the same page here? We totally are. But you have pause. I totally am on the same page with you. What's your pause? I've always paid for the home and our bills and everything, and she's kept her bills and whatnot herself.

1:31:53So currently, you know, I'm handling it all. So that hasn't changed. It's mainly my retirement I'm trying to push towards. So when I know that I'm retired, I've got enough nest egg for her to survive, even if she doesn't have work. So here's the thing. we can if you can continue to silo it off and it's and make it it's my job to do this i'm the one who's going to do this you're cutting off 50 of your inning income potential because she's your partner yeah what i heard you not say is that ken you and i are on the same page but my wife is not on that page is that it i wouldn't exactly say that no i she's she's definitely wants to and she feels bad that she's not.

1:32:45Well, let's not feel bad about it, but let's feel motivated to go and let's get a job. She needs to get a job. Yeah, because here, let's just play this out for a moment. So you told me you were concerned about retirement. You got a thousand bucks in the IRA or a hundred thousand bucks in the IRA, 56 years old. So let's just pretend, let's pretend this year you were able to knock out the debt because your wife gets a job and you kill it. You find a way to bring in some extra income as well. And you guys pay off the 6 ,000 in credit cards and you're able to somehow knock out the$25 ,000 car between now and let's say February.

1:33:20Right. And then you turn around and say, you know what, we're going to start contributing a thousand dollars a month into our retirement. If you do that from age 56 to 67, you're going to have about$550 ,000. Okay. That's, that's pretty good. But that is with her working and her adding to this, right? Because the hope is that you guys can continue to increase your income. And instead of investing, I don't know,$1 ,000 a month, maybe you can bust it up to$1 ,200 a month and you can get that closer to$600 ,000, right? So every little bit counts in this equation to getting you guys to a point that you can retire with dignity.

1:34:03But she's a big part of that. She's 50 % of the puzzle here. That's right. So, hey, let's band together. And boy, these numbers change very, very quickly on all sides, right? We cut off the debt faster. We start piling retirement money faster. Let's do this together. Lock arms and let's go.

1:34:42It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding will on their laptop between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes. Just go to RamseySolutions.com slash Will's Quiz. RamseySolutions.com slash Will's Quiz.

1:35:31Hey, if you're tired of living paycheck to paycheck and feel like you can't get ahead, We'd love for you to join one of our free EveryDollar trainings. We have a new training every week this month, and they're all hosted by one of our Ramsey personalities. We're going to show you how to stick to a budget and find$9 ,000 of margin using the EveryDollar budget app. It's fantastic. If you have any questions during the live Q &A, you get a chance to ask them. That's always fun, and it's free. You can sign up at RamseySolutions.com slash webinar. RamseySolutions.com slash webinar. Bob is joining us now in Ohio.

1:36:07Bob, how can we help today? Yeah, hi. I want to know what my next step should be. My wife and I, we've been doing the baby steps for the past year and a half, and we are almost done with baby step number two. Awesome. We have about$4 ,000 of medical bills left, and then it's just our mortgage. That being said, in March, my wife got let go from work, and she's got all these health issues with clotting disorders and seizures and such. So she's not currently working. And last month, we found out that my 13-year-old has a malignant brain tumor. Oh, my gosh. No. So sorry. Um, so he's, he's going through chemo.

1:37:10Um, and I guess my question is with my wife not working, um, should we, should we stop with the baby steps for now and just pile up cash or? Yeah. Yeah. You guys, you're, you're getting hit hard right now. Um, and the baby steps are really important, but during times like this, yeah, you got to hit pause. And right now the sole focus for you guys is getting well and fighting cancer and fighting, you know, the things that your wife is dealing with as well. The good news is you guys understood the assignment several months ago, a year ago, and paid off the majority of your debt. And it's put you in a really great position now to be able to push pause and to be able to focus on health.

1:38:01um what is when let's talk about what it means to pile up cash and kind of put some some real numbers to that so what's your family out of pocket max every year um all right when you say out of pocket max you mean the the maximum amount that you'll pay uh beyond your deductible for some people that number is the same as their deductible for some people it could be slightly more okay so actually when my wife got laid off um we had insurance to her work now we have uh state medicaid i think okay okay so we we don't have a deductible or co-pays um and as far as i know um all of his chemo treatments are going to be covered good That's great.

1:38:53We just have to make sure, you know, we get the pre-authorization. What was she making and what was she doing before she was laid off? So she was an accounting coordinator, and I think she was making about$19 an hour full-time. Okay. And with all those health issues that you mentioned for her, is she able to work? So her neurologist says that she shouldn't work right now. and she's not allowed to drive because of her seizures. Okay. What about your income? What's your income? My income is$20 an hour, so roughly$40 ,000 gross. What do you do? Mechanic. On cars? Yes. Okay. Is there overtime options for you?

1:39:44There is overtime, but I work at my dad's auto shop. so and it's just me and him it's a very small business the the business itself can't afford to pay time and a half right um let me ask you this is if uh and i'm not suggesting this but i but i gotta poke in on this how can we make more income right now um if you were not working for your dad in this small shop, what could you make in your area as a mechanic? Could you make more? I could. And would you have time and a half options there? Yes. That being said, before my son got diagnosed, I started flipping cars, buy, fix, and resell. Yeah. And I just sold a car and that put about$6 ,500 in our account.

1:40:51All of that, was that$6 ,500, all of that was profit? No. How much of it was profit? About$2 ,500. Okay, and how long does it take you to flip a car? Well, so it was a new venture and that was my first flip and it took about three months. Okay. I want you to pause the flip situation just because there is risk involved. And I know I'm not even going to suggest that you leave your dad's shop. But I do think you've got to consider over time what I mean by that is working for somebody else, finding some side projects where you can do mechanical work. I think that will help with this process because where I'm going with this is to the extent that you can, replacing your wife's income is a goal.

1:41:41because that's a pretty big hit you just took. It is big. Right. I mean, it's half the income. That's exactly right. You're going through this. Now, I'm glad you have your son's bills covered. That's great. And it seems like you'd have her medical stuff covered as well. But we still need more income. Is there a cure in the future for your wife? Is there something that you guys are working towards where they can put those seizures on hold? Or is there a... well they've got her on medication and they're trying to figure out the correct dosage for that but also um they want to figure out what's causing the seizures first understand okay so she's got she's got some time ahead of her before she's back in the game and the neurologist said that said that she shouldn't drive for a minimum of six months after her last seizure okay okay understood so she's we're looking for work from home positions we're working looking for things that she can do on her own time yeah create her own schedule and you know If she takes a job and something happens and she's let go, then so be it.

1:43:01But I don't think we should allow it to stop her from looking for things. More income right now does a couple things. Number one, it stacks cash for whatever additional treatments may be needed that you would fund. But it also puts you in a good position that once we hopefully get the all clear here, that you're not only paying off debt, but you've got that fully funded emergency fund. okay so yes pause the baby steps for right now because you really only have the one four thousand dollar that's medical debt and i i wouldn't you know i wouldn't be opposed to you calling them up and telling them your situation seeing if they'll clear some of that yeah i i wouldn't i wouldn't be opposed to taking a stab at that they go look here's the deal okay this is what happened to my wife this is her condition this is what the doctors have told her and so and then she was laid off she couldn't she can't do a normal thing anyway and then here's what's going on with my son and we're going to take care of this at some point, but right now we can't.

1:43:59We've got to batten down the hatches. And let's see if we've got a really nice, sweet, kind, reasonable person on the other end of that phone that might work with you on that. But, yes, stack cash right now. But in order for you to stack cash, you've got to go make more or your wife's got to do something from home that she's able to do because your income just got cut in half. Right. And we did just, we just paid off the last of our credit cards last week. Great job. Good. And we called them up and explained the situation and they were willing to settle for a lower amount. Great. You could, I mean, you can try the same thing with the credit cards or with the medical debt.

1:44:38I just think that right now, even if they cut it in half, that$2 ,000 is money that you need to stack up and see if they'll just hold that deal for you. That's right. Will you just get this for me in writing? And as soon as things kind of pick back up, we'll send you the money, that kind of thing. I'm sorry that you're going through this. It's really tough. Hang in there, Bob. It's going to get better. And you guys have done the right thing. You're a good man.

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1:45:59Learn more at RamseySolutions.com slash SmartVestor.

1:46:17Hey, are you staying on track with the baby steps? You can take a quick quiz to check your progress and receive a personalized plan just for you. Go to our show notes, click on the link titled, Are You On Track With The Baby Steps? Complete the quiz, and that'll give you a quick update and next steps, and that'll help you if you feel like you've stalled out. Caleb is joining us now in Atlanta, Georgia. Caleb, how can we help? Hey, how are you doing? Good, sir. Thanks for having me on. Yeah, my question's pretty simple. My mom, my father passed away about a year ago, and my mom has just sold the house.

1:46:54And so she basically got a mom who's got about$1 ,200 in Social Security coming in, and it will have about$120 ,000 in the bank. And that's everything. No house, got to rent something. That's kind of her situation. So that money in the bank, no job, though she will maybe look for something, but it's all kind of new and figured out. I actually live in East Africa, and so it's not easy, you know, figuring out. So trying to give her some good advice, and I have my thoughts. Let's see what they say here. And so that 120, basically, you need to live on it, other than that, Social Security. And so what would you guys say is a good direction?

1:47:32Well, first tell us, what is she getting in Social Security? Twelve, about$1 ,200. Thirteen, I think it's$1 ,300 a month. How old is she? She's 72. Okay. So my dad didn't leave much. You know, he doesn't have, he didn't have 401k, didn't have any of that stuff. Sure. And so the hard part, the hard part with this is, all right, 1300 Social Security. She needs some place to rent. She's in a small town or is she in a metro area? Currently, she's living with my sister in Colorado. And so for numbers sake, she currently has an apartment that she's going to probably move into that will be about$1 ,700 a month.

1:48:16And who's going to cover the difference? Because she's got$1 ,300. Yeah, see, that's part of the conversation. Obviously, we'll help as much as we're not all in the greatest. And we're not in terrible shape. We'll help her. But it's, you know, that's kind of the question at hand. You know, she may get a job. Yeah. So the hope the hope is not to be pulling out of that. That is the goal. How old is she? But here's she's 72. The reality is she can't live on one hundred and twenty thousand. That's impossible. It won't accumulate faster than you're pulling off of it because there's a huge gap in not just the rent.

1:48:55But now she needs food every once in a while. She's going to need to go somewhere. Right. She's not going to just be cooped up in there. So the reality. And I think you know this. The reality is$1 ,300 a month isn't enough and$120 ,000 isn't enough. So she's either going to have to go to work and fill those gaps. Maybe she works at Walmart. Maybe she goes over to a grocery store. Or you and your siblings are filling those gaps for her. Those really are the, it sounds like those are the options that are in front of you guys. I'd even push a lot harder. I would exhaust everything, Jade, that I could on trying to find a cheaper living situation.

1:49:37The$1 ,700 a month, I know in the grand scheme of things, is not crazy, but it is not a good price for her. So I wonder if she finds another widow or whatever. Let's find a Golden Girls community and if they're looking for a roommate, Let's now if we split that cost or she jumps in and we get that rent to say 800 a month or less or something like that. That frees up 500 bucks. Yeah. That's what you need to be looking at. So, you know, we can't forget some of the simple things like that to go put the word out. She's living with her daughter, your sister. They're they're in that community. Let's ring the bell.

1:50:13Let's put the word out. My mom needs a roommate, you know, or if you're looking for a roommate, you know. And now all of a sudden we want to get to a place to where the$1 ,300 a month covers the four walls. That would be our goal. Yeah, because if I were you, that$120, I'd want that to sit somewhere and stay there because your mother is going to continue to age. And there's going to be a point at which maybe she needs some care. Maybe there's something that needs to happen that's going to cost money. and you guys are going to want whatever you can get your hands on, whether it's an in-home nurse to take care of or that sort of thing.

1:50:53And so for those reasons, that's why I would try to keep that$120 locked away somewhere. So that's part of my question. What would be your advice as to where to lock that away? Would you say mutual funds? Would you say high interest savings? What would be your advice concerning that$120? How's her health? You know, she's good. She's good. she's good at this moment you know they weren't the most consistent to go to the doctors and so she needs to do those things and figure that out because what you guys are saying is totally true and uh we're trying to figure all those pieces and i'm thinking well with this 120 here's what i would do jade i would uh i'll tell you what my take i want to know what jade thinks here i defer to her opinion on this but i would take 15 to 20 and i'd put that in a savings account and that's That's a pretty robust emergency fund for her.

1:51:44And then I'd invest that 100. I would get that working because if she lives 15 more years, that's going to double twice. I couldn't have said it better myself. I don't know if I would do, yeah, 15 is fine. Maybe that's too much. That might be a little high for her. Maybe I'd take 10. And yeah, I'd invest the rest. So yeah, the 10 and a high yield, invest the rest in just good mutual funds, nothing crazy. And that way it's there. I think that's exactly it, Ken. But I mean, this involves her getting to a place, her living expenses to where she lives off of the social security and then the grocery job.

1:52:20Yeah, she's a healthy 72 year old woman. She needs something to do. Yeah. And so anything she makes above and beyond that is she's stacking. I think that's actually doable. Now, I'm not saying it's easy, but I'm saying if I look for it, that's what I would do. If that was my mom and that was her situation and I couldn't cover for her, then that's what I would be doing. Yeah. The living, the living part is really important here. Yeah. Really, really important. And just buckle down and do your due diligence till you find it. Cause if you can, that's going to break this whole thing. Let me ask you this.

1:52:53If you were 72 and your husband passed, would you want to live alone or would you want a roommate? It's hard to say, but I could understand wanting some companionship, you know wanting a roommate but i could also see all of a sudden being like you know betty is betty you know doesn't wipe off the counter when she's done and betty you know she blares her frank sinatra too loud you know i mean i feel like i don't like to be alone right so like for me i i think i'd have to get a roommate i really do yeah i don't think i could do well alone yeah it could you know what i'm saying it could be a nice companion something to do you guys yeah and For us, that's the trajectory that we probably will be.

1:53:34But this first, she's been, yeah, that's part of it. $1 ,700 isn't the long-term goal for sure for the roommate thing. At this moment, it feels like she needs that space and figuring out life. And we'll cover the difference. We'll make it work. Yeah. On our side, it's really, like I said, the$120. What would it be? You know, okay, if you put$120 in there, 4%, whatever, it's going to make$300,$400 a month, something like that. Or do you say, okay, do you put it? Not the 4%. Remember, we want you putting that in. You're saying put 10, 15 in high-interest savings and put the rest in the market. I get you on that.

1:54:11That's why I was calling to see what would they say because for me, I tend to be a safe guy. I'd be like put 50 in a high-interest savings and then put 50 in S &P. No, we need that 120 making as much money as it possibly can. Okay. Exactly. But I think the 10 to 15, that would cover you if, yeah, something popped up. I don't know. Maybe she needs a vehicle of her own or something, you know, that you must pay for. Does she have a vehicle, by the way? She does, yeah. Okay. She doesn't have any other debt other than everything that I've told you. She has a car that's paid for and all those things.

1:54:46There's not any debt looming. So if her car breaks down or if something happened, you know, it's an emergency fund. The same way that we would use the emergency fund for any other, you know, purposes around here. Yeah, absolutely. Okay. Yeah, so you got it. Help her with budgeting. You know, like get her if she needs it and just surround her there and get her situation where it's much more stable and controlled. And then I love the idea, by the way, of a 72-year-old, if they're healthy, doing some kind of work for a variety of reasons. So, yeah, thanks for the call, Caleb. And check on the kids.

1:55:16Make sure everything's okay there. Always love when we hear those calls. You know what I mean? I could see some poor guys trying to talk to us. The kids are playing kickball. Johnny got hit in the head, right upside the head. Remember those red kickballs? I do. That could really leave a mark. All right. Favorite golden girl. Hit me. The old lady that was cranky. I forget her name on the show. The little lady. Or Dorothy's mom. Yeah. Yeah. The sassy, kind of cranky lady. Ma. Ma? Was that her name? I mean, what's her real name? I can't remember her name on the show. Yeah. I don't know. This will not surprise you.

1:55:48Never saw a full episode. I'm clutching my pearls. Exactly. Wow. I'm not the demographic. Thank you.

1:56:19Our scripture of the day comes from Proverbs 19 verse 23, the fear of the Lord leads to life, then one rests content, untouched by trouble. And our quote of the day from Francis Chan, our greatest fear should not be a failure, but of succeeding at things in life that don't really matter. It's got some depth on that one. That'll make you think twice. Veronica joins us now in Texas. Veronica, how can we help? Hi. Thank you so much for getting me on. I love your show. And the last two years, I've really been following you guys, and it has helped me so much. I am a single mom. I'm 39 years old, and I have paid over$30 ,000 in debt in the last, I would say, four years, which has been amazing.

1:57:08Good for you. Way to go. Let's not just fly past that. We're proud of you. Way to go. Oh, my goodness. It's been a journey, but I am here, and I have two questions. And I have a vehicle, my first vehicle that I bought for my daughter when she graduated. I owe$3 ,400 on that. And I am in the process of trying to find a home. Right now, I live with family, and I have about seven months to move on. So they've allowed me to stay here for two years. And within the two years, I have been able to get my$1 ,000 in my emergency fund. And I also have saved$14 ,000 for a home. But I still have debt. I recently got my associate's degree.

1:58:04And so I have$6 ,000 in student loans. And I do have another vehicle that's about$14 ,000. and I have one credit card that has no interest, which I got my computer for school, which I have$1 ,500. My question is, I want to pay down that first vehicle. It's$3 ,400 if I would pay it today, but that means that I would take away from my home savings. That's right. But I would save about$1 ,500 in interest. And so I have been praying about this and it's just been, you know, I'm going to try to call the day rest. I'm glad you called. Listen, I'm glad you called. You said you paid off 30 ,000 in four years.

1:58:54That's no easy feat. I didn't ask you what your income is. What is your income? him? So to date, I make about$83 ,000. I am in the medical field. And I'm also my little brother's caregiver. Okay. So he he's been with me for 17 years. So I do get paid from the state for taking care of him. So how much do you take it home a month? What's a monthly snapshot for you with all those things combined? So monthly, let's see, it's about$1 ,650 a month for my job. I mean, every two weeks, so let's say$1 ,500. Oh, okay. And then$1 ,500, let's add$1 ,500 to that. It's about$4 ,800, but his Social Security allowed him to give me about$800 for him to have like room, like for him to live, if that makes sense.

1:59:57So$5 ,600 together? All together? Does that sound right? No, so he has$950 a month. Okay. And then I bring home about$3 ,500 a month. Okay. And the reason why I was able to pay off this$30 ,000 is because I had a job who paid all my bills for three years. I was on a contract, and they paid for everything when they sent me out to Austin. And I was able to, my entire income went on paying off debt that I had with my ex. Yours feels a little low. Are you putting anything in 401k or retirement right now? I am. Okay. How much? 401k. I have a 401k. They take out about$160 a pay period. Each time. Okay.

2:01:00So there's money there. Tell me more. And then this is another big question for me is$470 goes to my tithes and offerings. Okay, good, good. Okay, so now I have a better picture of what's going on. Here's the thing. You are correct in your thought earlier that you said, hey, I have$14 ,000 saved. I think I want to pay off this$3 ,400 card. Yes, because my advice to you would be, first and foremost, you're not in a position to buy a house. And if you buy a house right now, you are going to create a level of stress that you've not understood before. Because it's going to create a lot of financial burden.

2:01:45Because what I'm seeing right now, based on your habits, is you're not done borrowing money. And so what that tells me is if you buy a house right now and the AC goes out, you're going to get a credit card to fix it. If something happens with your back door and the lining comes off and you need somebody to come over and fix the door jam, and you're going to take out the credit card with the repairman. So this is going to continue to snowball. And then you're going to feel like a rat in the wheel, not being able to make traction. So for those reasons, I would put the dream of buying a home. Just just table it for a while.

2:02:18It's not it's just deferred for a moment. It's not to say that it's going to happen. okay so that means i've got 14 really 13 000 that i can put towards debt right now and what i'm doing ken is just we're just walking her through the baby steps and so i keep a thousand dollars aside that's baby step one that's just your rainy day fund in case something happens but yeah let's pay off this car and then on down the line now we've got another 10 000 let's pay off the credit card that's$1 ,500, and let's keep paying this off. Let's knock out those student loans. So I'm at six, seven, eight, nine, 10.

2:02:54I'm almost there. I've spent all my money, and I've paid off the car, I paid off the credit card, and I've paid off my student loans. That is going to make you feel fantastic. Am I wrong? Yes. Why am I wrong? I only have seven months. I understand, but that doesn't mean you have seven months until you have to move out. No one said you had to buy a house. It just means you have to find another place to live, which in my mind says, okay, you're looking for an apartment. And you can do that because the other thing you're going to do, thing two, as you're paying off this debt, like we said, because you can do that today.

2:03:33The moment that you can muster up the strength to know that I'm right, you can do that today. And then the next thing that I would tell you to do is you need to pause this retirement mama because you need that $320 a month because like you said you're trying to get a house you're trying to get a place or you know a place to live on your own so having that extra 320 not only is it going to cause you to pay off this car faster it's going to give you the money and income you need to be able to go into a rental go into an apartment pay first and last month's rent feel good about it does that make sense?

2:04:09Yes. So right now you're trying to do a lot of things at once. What I'm saying is let's focus on one thing at a time, knock it out, get it done. Does that make sense? Yes. No, it makes perfect sense. I just, um, I think I was just tired of renting and giving my money away. Totally understood. Well, hold on a second. That's where we're here. And I love that you shared that with us. Uh, I'm just going to jump in on this one little thought right there. And Because that's the mental shift you're going to have to make so that you actually do what Jade is telling you to do. You're not throwing your money away.

2:04:45That has become a cultural. It's a lie. It's a lie. And it's a statement because somebody out there created this idea that, well, when you're renting, you're not building equity. Thus, you are burning money. Well, that's not the case because as Jade laid it out for you and what you've been doing up to this point and renting further is not throwing money away. It's actually giving you options for the future. But if you strap yourself with debt, you can you can say all you want to. Well, I'm building equity. Well, no, you'll never see that equity if you if you go completely broke and you can't afford to keep yourself above water with the house.

2:05:25so renting is not wasting money and throwing money away. Renting is putting me in a position for the future that I want and it gives me actual freedom and options. Do you see it that way now? Yeah. You've got to believe that. Listen, because if you buy into the other argument, you're going to strap yourself with debt and it's not going to be fun. Yeah. So hang in there. Work the plan. Jake gave you great advice. It will work. This is The Ramsey Show.

2:05:58Thank you.