My Husband Won't Stop Lending His Mom Money

10:57Jade Warshaw:Hi. So my husband and I, we're both 25. We have two kids. And we are kind of living paycheck to paycheck when I feel like we shouldn't be. We're trying to figure out what's the best way to kind of pay down our debt, as well as still put money into the savings account to help, you know, have an extra layer of cushion. Okay. Okay. Tell me a little bit more about how much debt you have and what type of debt it is. So without our mortgage payment, it's about$60 ,000, mainly credit cards, vehicle loans, and some medical bills. Okay. How much of it is the car? Uh, our vehicle. So our, his truck payment is about 40 ,000 and mine's about 4 ,600.

11:52Jade Warshaw:Okay. So 40 ,000 is the total amount that you owe on his car. What's the total amount that you owe on your car? About 4 ,600. Oh, 4 ,600 total. Okay. I hear you. All right. Um, I, when I look at this and you tell me, Hey, we're living paycheck to paycheck, the number one glaring obvious reason I see are the cars. What's his monthly payment and what's your monthly payment? So the car payment is$378 a month and the truck payment is about$600 a month. There you go. Yeah. What difference would it make if you cleared that out and had an extra almost thousand bucks a month in your life? Yes, a lot. And it's also, I think also daycare because we spend a little over a thousand a month on daycare.

12:38Jade Warshaw:Yeah, daycare will get you. But that's not something that we can really change right now. The thing that we can really change and affect is this car payment. Tell me about you guys' income. What do you bring in every month and what does he bring in? So together, roughly$7 ,600. I just got a promotion a couple months ago, so our income went up. And we had to buy a vehicle. It didn't necessarily have to be the truck. But, you know, right now we're trying to figure out what's the best way to pay this down, because I will probably need a car here in a couple of years, maybe a year or two, because my car keeps breaking down.

13:17Jade Warshaw:Yeah. So let's solve for that then. I mean, what I would do. I mean, yes, you're right. You have to have vehicles to operate life. So I agree with that. However, when you're, you know,$60 ,000 in debt, clearing out$40 ,000 of it, which is a vehicle, makes a humongous difference. So if he sold that vehicle today, what could he get for it?

13:41Jade Warshaw:Possibly$35 ,000,$40 ,000. So he's up. We just bought it in October. Even better. Even better. You won't be as far upside down on it.

13:51Ken Coleman:Do you have any money saved?

13:53Jade Warshaw:We have about$6 ,000 in our savings and about$4 ,300 coming within the next month or so from our college scholarships we get.

14:03Ken Coleman:So we're going to have access to$10 ,300 that is above and beyond your income. And that's coming quickly. We've already got six. Well, are you familiar with our baby steps and how they work?

14:18Jade Warshaw:Yes. So I purchased the book last year. So we saved up the money and we've been trying to pay down the lowest amount of debt we've had.

14:27Ken Coleman:But if you're familiar with the baby steps, baby step one is how much in the bank?

14:33Jade Warshaw:A thousand.

14:34Ken Coleman:All right. You got six thousand.

14:37Jade Warshaw:Yeah.

14:38Ken Coleman:So, Jade, what does she do with the five? We got good news for you on this truck.

14:42Jade Warshaw:Let's roll through this. Yeah. Let's pretend, yeah, that you only get thirty five for it. okay, you've got the five to put with it so that that's a clean break right there. And then to your point, if you've cleared 600 extra dollars a month, theoretically, how quickly could you save for a cash car? If you said, for a split second, I'm going to pause the debt snowball and I'm going to stack up some money as quickly as possible. How quickly could you stack up five or$6 ,000? I think making$7 ,600 a month, I think you could do it pretty quickly. So that's really the play here. Anytime you have debt, I'm going to find out ways to clear it very, very quickly because the faster we do this, the more motivated you're going to be to continue.

15:27Jade Warshaw:So in a world where you sell that car, now suddenly instead of$60 ,000 of debt, we've got$20 ,000 and you've got more money per month to knock that out. I think this is kind of like a win-win. And then you have this$4 ,300 coming. That goes towards your car fund. Does that make sense? Okay. On a scale of one to 10, be honest with me, how excited are you about that solution? I'm kind of in the middle. I'm a little nervous because right now my biggest, well, not the biggest concern, obviously, but my car is one because I don't want to have to buy two new vehicles and go into two car payments again.

16:10Jade Warshaw:Well, that's what I'm solving for. So let's roll through that.

16:13Ken Coleman:Hold on a second. Before you roll through this, where did you hear that we want you to have two car payments when Jay just spent a couple minutes telling you how to get rid of the only one you have?

16:24Jade Warshaw:No, I heard that. It goes through my mind because we have really bad luck with vehicles. Okay, I'm glad you're saying this. Here's what I want to talk about. So we gave you the advice. it's normal to very, very quickly get very emotional about it, right? Because, oh, we've had bad luck with advice. Oh, or I'm sorry, we've had bad luck with cars. Oh, you know, I have to think about how to tell my husband this. Oh my gosh, you know, what about security, right? Your brain starts going through all those emotional plays. So I want you right now to tell me the top three things that Ken and I are going to dismantle that in a completely logical, unemotional way.

17:02Jade Warshaw:How about that? Okay. Okay. So first thing you said is we've had bad luck with cars in the past. Ken, what you got?

17:10Ken Coleman:So have I. That's just life, right? So this idea that you're stuck in this bad luck thing. No, you're not. You're just a part of the human race. It's a little bit of the human lottery, right? I mean, you go look at a mechanic, any mechanic place in your local area, and you're going to see a steady stream of cars. Probably not a bad idea to go, oh, I don't have bad luck. I'm driving an imperfect machine, and there's thousands of other people in my zip code. So I think it's mindset is how I would dismantle that and go, all right, now how do I prepare for not bad luck? Or have better odds. Have better odds.

17:44Ken Coleman:How do I make the odds better? Well, I'm going to put enough money away that I can take care of a basic mechanical issue and keep moving forward. Is it a little bit of a step back every time? Absolutely.

17:55Jade Warshaw:Or you can do a lot of great research on the front end to make sure you're making better choices than you've made in the past. That's right.

18:02Ken Coleman:Take longer to buy the next car, right? Get it checked out by a mechanic. Buy a car that has better odds, right? Absolutely. We can name the brands, and you can look them up, that can do much better. I mean, I'm a guy right now that's got three teens, okay? I got more cars than I had ever thought that I would have owned. All of them used. Very used. And I'm driving a used car. And I do the research, and I get these things checked out by a mechanic that I trust because I got two teens right now driving every day. Yeah.

18:34Jade Warshaw:And I'll tell you what I do. I have a Christian Brothers in my neighborhood. It's a local mechanic. I'll bring, when we're looking at used vehicles, you can bring them over there and they'll give it a once over for you and check it out so you can feel good about the purchase. So, okay. That was the first thing. Next idea that could be a potential issue could be what? Just the idea of downgrading vehicle because other people see it.

18:58Ken Coleman:You're driving a car that stinks.

19:00Jade Warshaw:Yeah. Everybody saw you get a new vehicle and now suddenly you've gotten rid of it. So I got to solve for that.

19:05Ken Coleman:You know what you do? Drive around the corner. If you're ashamed of the car, and I've been there, okay? When I first got married, I had a Ford Taurus, okay? And it had no AC. And one day on the way to work, the felt on the top of the ceiling of the car just fell down on top of my head at a stoplight. I was very embarrassed. The dignity, loss of dignity. It was very embarrassing. I got home that night and I couldn't afford to fix it. So you know what I did? I got a staple gun out. Come on, Ken. Three shots, took care of that business. And then, but I was embarrassed. So guess what? I always had a good excuse or a creative way of getting out of driving anybody to lunch.

19:43Ken Coleman:That was pretty creative. Number two, if I had to go to a meeting, I pulled around the corner and walked and just acted like there was no place to park. Perfect. There are some creative psychological things you can do to not be ashamed of the hoopty. Yes. For a season. So I think that's kind of, I'm addressing that because I think that's part of it is our pride.

20:04Jade Warshaw:The point is what we're suggesting, you are going to feel an emotional backlash immediately. But I want to challenge you to work yourself through it because chances are it's just that first feeling of, because you don't know what, it's fear. It's fear is what it is. You've never done something like this before. You've never done something this drastic. You don't know how it's going to play out. but we do. We've been teaching this for a very long time.

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21:56Ken Coleman:okay folks one of the best things to do for your finances is to have a really really good tax pro in your corner they'll help advise you on the best moves to make for your situation maybe your small business and if you've had some big life changes in the last year so go to ramsey solutions.com slash tax pro. RamseySolutions.com slash tax pro. And these agents that you will see there have been vetted by our team. They're going to teach you the way that we would teach you. And this is a good move if you've never done this before. So do that, and you'll be better for it. Eric is up next in Phoenix, Arizona.

22:32Ken Coleman:Eric, how can we help?

22:34Jade Warshaw:Hey, how's it going? Good. Thanks for having me.

22:36Ken Coleman:Yeah, you bet.

22:38Jade Warshaw:Pretty good. So I'm going to bet a bit of a pickle. My mom co-signed a lease with my brother. about four years ago. And he's in and out of jobs. He doesn't really like working in corporate, even though he had the opportunity to do so. And now he can't afford it. And he wanted to get it repoed, which she said no. So she's been asking for help to pay bills. And so now the car's just kind of sitting. It's being used. But we had asked her to sell it by we, I mean, my other siblings and I. But she doesn't want to sell it. Why? She's kind of on the water, so even if she does send it, she won't get much for it.

23:18Jade Warshaw:Okay. How much do you guys, well, let me say, how much does the mom and the brother owe on it? About 20 grand left on it. Okay. What's it worth if they sold it? It's in such bad shape. You kind of ruined it. Sorry? You said somebody ruined it. She ruined it or he ruined it? He ruined it when he was using it. Just wrecking it? He just didn't take care of it. Maintenance. Yeah, it's been wrecked a couple times as well. Why are you calling? The interior is terrible.

23:44Ken Coleman:Because mom has asked him to help out. And brother, because brother won't. Yeah, so she was in an accident last year as well. She was?

23:51Jade Warshaw:So he's been taking care of her while she's been going to rehab and into physio and stuff like that.

23:56Ken Coleman:Understood. What could she sell the car for today?

24:01Jade Warshaw:Maybe five grand, honestly. Oh, gosh. If she's lucky.

24:05Ken Coleman:Okay. um well this is first of all this your brother is in a season of life where he is impersonating a deadbeat and so deadbeats only wake up when they're forced to wake up but the problem is mom's name is on this and she refuses to help herself correct

24:29Jade Warshaw:Kind of. The main reason she doesn't want to necessarily take it back to the bank or maybe just get a repoed, which I've heard is not an option. Repo is not an option, and we can talk to you about that, why that is, but continue on. Yeah, so eventually she says she wants to get a house soon enough, which I personally think she can't afford. So the biggest thing for me really is just continuing to help feels like enabling. I don't know how to approach her in a sense like, okay, in as much as we've been helping this entire time, there's a couple things she could do. What else have you been doing to help?

25:11Jade Warshaw:Because it sounds like you've already been down that road. it's mostly just um bills and you know rent and stuff like that i still live at home but i just got married so i'm moving out is that because of the accident or that's just always been ongoing it's been ongoing but more so after the accident and who's we i thought i heard you say we've been helping uh my siblings and i uh my other younger brother and then i'm older are your siblings that

25:39Ken Coleman:have been helping with the bills are they all in the same opinion of you that you just said which is, I feel like I'm helping and it's enabling. Do they have the same feeling?

25:50Jade Warshaw:Somewhat. My older sister, yes. My younger brother, I'm not too sure. He doesn't say much.

25:56Ken Coleman:Listen, you asked a question and I'm going to answer the question that I heard. And that is, how do I approach her on this? How do I handle this? And this is you going, Mom, I can't do this anymore. Here's what you should do. If I were you, this is what I would do. And you lay it out and say, I'd sell the car because every day that she doesn't sell the car, there's like another calamity that's probably going to happen to this. And I feel like this entire car represents a lot of the calamity that your brother creates and no one is willing to do anything about it. And so I, if I'm you, I go to mom and I go, mom, sell the car today because we got to at least get five grand for it.

26:30Ken Coleman:And that at least lessens the debt by 5 ,000. And then we have a$15 ,000 problem. You've got all these other financial problems that are more important than this stupid car. so mom here's how I'm going to help going forward I can't help you financially anymore I've got to move on I suspect that you don't have the finances and the margin to be able to keep helping her anyway without hurting you true or false true so that's the conversation mom I can't even if I wanted to I can't so here's how I can help I'll be willing to list the car sell the car I'll be willing to have a conversation with younger brother and grab him by the nap of the neck and just absolutely as only a brother can lay into his butt and with both hands with both dexterous very well done jade and and you like use both hands clap him on both ears okay now here's the deal and that's a lay it out and move on and say you got to help mom yeah and i think all the siblings should unite on an intervention outside of that jade that's what i'm thinking of What else did I leave off the table?

27:37Ken Coleman:What would you do here?

27:38Jade Warshaw:There's a part that can help relationally, I think, early on, if it's possible. You said mom co-signed for brother, which makes me think mom has better credit. I wonder if she can refinance this and get him off of it so that at least you're separating that relational tie. And then from there on, she can make whatever choices she's going to make with the car separate from the brother. that might unmuddy the waters just a hair as she decides what she's going to do next but other than that I think Ken is exactly spot on I have nothing to add

28:14Ken Coleman:this is tough so selling the car would be private sale

28:18Jade Warshaw:to get the most money yeah and what she can do and you can advise her of this if her credit's alright in the process of getting him off the loan when you're in there, you can say, here's what we want to do. We need a loan for the difference because ultimately we're going to sell this thing. So we need to get him off of the loan in the process. And then we're transferring it to a personal loan. And when she does that, if she wants to add a little something to it to get something in cash, that's fine. But I think because of the nature of how much she owes on it, she's probably, you know, she would end up basically back in$20 ,000 of debt.

28:57Jade Warshaw:So I think the bigger part here is to get the brother off of it. And then maybe, maybe, and I don't know what your lifestyle is, but maybe that's a way you could help her out, which is, Hey, while you're saving up for your next vehicle, I can help if you need a ride, you know, in between the Ubers that in the bus rides that you'll be taking, I can help with that. Maybe that's something you can offer.

29:17Ken Coleman:Yeah. And then we need to caution, mom, you're nowhere near buying a house, not even close. Are you renting? Is she renting now where you've been living with her? Yes. Yeah. No, she is not thinking about buying anything. We got to get her healthy. Do you feel like her long-term physical prognosis is good where she can get back to work?

29:39Jade Warshaw:It's been better. She's going to extend a little bit because she's still in some pain. So maybe by July, maybe she'll be. What is she living off of?

29:48Ken Coleman:Is there some type of a disability or insurance that she's getting? What's going on there?

29:53Jade Warshaw:Yes, she had gotten disability for a little bit and then she was pulling some out of her insurance. I think life insurance. I think she borrowed against that. Oh my gosh, mom. Wow, okay. Yeah, this is tough. Tell me, and you can be vague, but the nature of her injuries, How serious is this? And how old is she? Because I want to know really honestly what she's going to be able to get back to doing work-wise. It was pretty bad. She got rear-ended while she was stopped at a light. And then she's around mid-50s. So it's pretty slow progress for recovery. What was she doing beforehand? What was her job and what was she earning?

30:41Jade Warshaw:she was doing a bunch of different things but she at the time she was doing uh uber as a side gig and then okay i think the ways that you can help her are as following help her uh get brother off the loan that's thing one thing two is i want you to help her with the career side of things we're going to give you kin's uh find the work you're wired to do assessment uh it's a book that'll help you and there's an assessment inside. Help her go through that because it sounds like she needs to create stability in her career or create a career so that she can create stability in her finances going forward.

31:19Jade Warshaw:I hope she's well and I hope she recovers very, very quickly.

31:22Ken Coleman:And I would just add, you siblings need to get together and essentially fire this brother from her life for a while.

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33:12Ken Coleman:The Ramsey Show question of the day is brought to you by Why Refi. When your private student loans are in default, your progress stalls out. Why Refi helps you restart by refinancing defaulted private student loans into a low fixed rate payment that fits your budget so you can stop spinning your wheels. Visit yrefy.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states.

33:36Jade Warshaw:All righty then. Today's question comes from Nicholas in Illinois. He says, since I discovered your show last year, I've sold my truck and almost all my furniture. I've worked three jobs, escaped$35 ,000 of debt, and now have$15 ,000 sitting in the bank. Well done, my man. My mom wants me to open a credit card so I can go to Italy with her. to visit my sister without losing any of my recent progress. Wow. I have the money to pay my way, but she's insistent on me getting a credit card. How do I explain to her that although that seems like a smart move, it's really not? Nicholas, my guy, you haven't told us how old you are.

34:20Jade Warshaw:So I don't know if you're 18. I don't know if you're 35. I don't know how old you are, But the answer remains the same. I don't think you have to explain anything to your mom, nor listen to her advice. I think you can very politely say, thank you for your insight and move on.

34:39Ken Coleman:Yeah. This is a very perspicacious young man. I don't know if I said that right. There's a word I recently...

34:44Jade Warshaw:What are you trying to say?

34:45Ken Coleman:He's got good insight. He picked up on this temptation issue.

34:50Jade Warshaw:Perspicacious? Yeah.

34:51Ken Coleman:Have you ever heard that before? I like a good word.

34:53Jade Warshaw:It's like one with keen insight. Yes, it is.

34:57Ken Coleman:So this guy gets it, right? So mom is playing the emotional game, okay? She's going, okay, I'm so proud of you, son. You did a good job, but I don't want you to have to use any of that cash. So let's just go to Italy. And she thinks he's getting ahead and she doesn't understand that it's a millstone around his neck. And he gets it. She's projecting her fears on him. Here's what you say. Mom, I'm sorry. This is my money, my life. I don't agree with you. Like, I disagree. This is hard for young people, by the way. You know, certainly late teens, early 20s. Mom and dad have so much influence. By the way, this is a kid who respects his mom.

35:40Ken Coleman:Facts, yeah. So question about it. And so it's very, very hard where when you're beginning to strike out on your own, he clearly has on some level, certainly has with his money. And then a parent comes in and says, do something. And again, whether it's money or something else, and a parent makes a strong suggestion. Yes. It's really hard to go against your instinct. Your whole life you've tried to say yes so you don't get in trouble. And now you're in a place where you go, that doesn't make any sense and I'm not really going to get in trouble. except for if I do what mom says, I'm actually in financial trouble.

36:12Ken Coleman:It's really confusing. And so I'm kind of expanding this to our very large audience on this to say, hey, young people, look, when you finally figure this stuff out and you agree with what we teach, at some point, you're going to have to go, thanks. I really appreciate your insight. I disagree. I'm not going to do it. Here's why. And then confidently walk away.

36:34Jade Warshaw:Here's my argument. Do you even have to explain why that's my thing because my you don't have to that's a that's a credit very good

36:42Ken Coleman:point so my answer to that is he doesn't have to but i think it's expedient to do so in other words you can honor your parents and still say no that's right and i think in this case i'm always going to say honor them once if they keep coming back go i'm not actually going to have this conversation.

37:02Jade Warshaw:Okay. Let me crack the door open on another piece of this puzzle. And you've got two older boys. So I think that you're the, what was the word you use? Perspicacious? Yes. You have a perspicacious. You're really leaning in on my work. I appreciate that. I'm just trying to reuse it for you. Okay. So you've got two older boys. How much, and we don't know how old Nicholas is. how much of this is due to oversharing? Because I know I got to the point pretty early on where for my parents to know how much money I have that I sold my truck, that I got 15 ,000 over here, that I don't have credit. That's a lot for a parent to know for a grown adult.

37:42Ken Coleman:That's a really good question. I don't know the answer. Could be. And I think it's a very good point to say, if let's say he's in his early 20s, yeah, he doesn't need to be sharing all that information. If mom says, hey, we want you to go to Italy, he goes, all right, let me check. Let me see if I can do that. And he says, yes, that's a very good point. In other words, at some point, you've got to create your own financial independence by not sharing all that. It's just your business. It's a very good point. It's been a long time, but I don't think when I went to college and I started working - Did you share?

38:16Ken Coleman:That I was sharing with my parents how much I had in the bank account.

38:19Jade Warshaw:I definitely did not. I might say something like, hey, I'm thinking of getting a new car. I have$10 ,000 to spend. What do you think I should get? I might say something like that. But for them to just know all my business out in the streets like this guy here, definitely not.

38:37Ken Coleman:That's a very good point. Create a boundary there. Let's go to Grace in Atlanta, Georgia. Grace, how can we help?

38:43Jade Warshaw:Hi, I'm 29 years old. My husband is 30, and we've been going back and forth on whether we are ready to buy a house or not. He believes we should save more money before we can put down 20 % and have plenty of emergency funds after that. But I think we're ready.

39:02Ken Coleman:And what is your financial position? If you're ready, what do you have to put down?

39:07Jade Warshaw:I think we have the 20 % down. I think his biggest concern is that I bought a house during COVID, but that house is currently being rented. And so the mortgage is being covered plus a little bit more. Oh, he's worried about taking on two mortgages. Absolutely. And I agree with him. Why wouldn't you get rid of your existing mortgage and put that money towards the down payment and security on your family home with him? Well, because at the moment it's being rented and it has been for two or three years. When's the lease up? I believe at the end of this year. Okay. That's what I would do.

39:52Ken Coleman:I would move into that house. You've already bought a home and you got renters and you have basically dodged a major bullet thus far, sounds like. In other words, you're barely making enough to cover the mortgage, yes?

40:05Jade Warshaw:oh well the oh yes i think i make like three hundred dollars okay that's a whopping three

40:13Ken Coleman:thousand six hundred dollars a year grace you're getting rich on that one and that doesn't include your actual expenses on said house correct which if you hold it long enough you hold it long enough you will end up going in the negative in one year maybe two consecutive years in a row i am not negative i am positive that will happen and so if it's me i'm i'm gonna move into this house at the end of the year and now we're building equity you're already building equity which is great but now you live in it i would not buy another house well i want to know i want to know about

40:50Jade Warshaw:that current house what is the mortgage on it what do you owe every month on it you were the renter so we haven't so the we currently we did not buy a second home we are wanting to buy a second home. I understand. I'm talking about the current rental. What's the mortgage on it? Oh, I have$200 ,000 left. Great. What do you pay every month? Every month,$1 ,200. Okay. And what's you guys' income, you and your husband? I get$100 ,000 every year before taxes, and my husband makes$130 ,000 before taxes. Excellent. Okay. So even if you, to Ken's point, if you, you know, after the lease is up, like, renters are out, you guys moved in, or if you wanted to sell it and get something that suits you guys' needs, I would 100 % do that deal in two seconds.

41:38Ken Coleman:How much is that house worth?

41:41Jade Warshaw:About$300 ,000, maybe$310 ,000.

41:43Ken Coleman:So you walk away with$110 ,000. How much do you guys have saved right now for a down payment?

41:50Jade Warshaw:I have$147 ,000, but that includes... No, no, no, don't give me that.

41:55Ken Coleman:How much do you have that's set aside just for a down payment?

41:58Jade Warshaw:Just for a down payment? I would say$47 ,000 and my husband about$15 ,000.

42:07Ken Coleman:Okay. So we're separate finances. We don't have time to cover that one.

42:11Jade Warshaw:We'll talk about that later.

42:12Ken Coleman:I think you guys either move into that house or you sell it. And now you guys have about$200 ,000, if I'm doing quick math, or just under$200 ,000 to put towards another home. That's the play. Yeah. Not keep both houses, not create another mortgage, and then play this roulette game of landlording.

42:32Jade Warshaw:And just to set the record straight, what you're aiming for more so than the 20 % down, what you're looking for is for that payment to be no more than 25 % of your take-home fee, all included.

43:03Ken Coleman:Tax season is coming up fast, which means a lot of you are paying more attention to your money and maybe realizing the holiday damage. So if you're trying to clean up the budget and start

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43:44Ken Coleman:Welcome back to the Ramsey Show and the Fairwinds Credit Union Studio. I'm Ken Coleman. And Jade Warshaw is alongside. And Peter is on the line in Ottawa. Peter, how can we help today? Hi, how are you? Good, how are you? I'm doing fine, I'm doing fine.

44:04Jade Warshaw:I'm 23 years old. And I'm trying my best to manage a business. And I'm having trouble with it. Well, actually, I'm having trouble with the decision that I want to keep doing this.

44:20Ken Coleman:Is it your business, or are you managing it for someone else?

44:26Jade Warshaw:It's my dad's business, but I've been managing it for like two years now because he's not well.

44:33Ken Coleman:Okay, and so what is your dilemma? I'm just stuck in a lot of debt that I don't know how to get out of, and I don't know if I want to keep doing this.

44:45Jade Warshaw:the job on the other hand i don't know i don't know what else i would do with you know okay with

44:51Ken Coleman:myself okay so i'm glad you share it that way so i'm gonna do a quick analysis tell me if i'm right feels like our biggest problem is the 200 000 in debt the secondary problem is i don't want to run my dad's company the rest of my life that's the secondary problem is that a good way of laying it out?

45:08Jade Warshaw:I do want to run it. It's not that I don't want to run it. It's just I don't know how to.

45:15Ken Coleman:You don't know how to run it? Yeah, because clearly I'm not doing that good of a job. That's good self-awareness. Okay, and the company's not doing well?

45:25Jade Warshaw:It was up until my dad got really sick. Like really, really sick. And I had to take care of him for about two, three months and the company didn't run without me.

45:36Ken Coleman:Okay, and now where are we at?

45:40Jade Warshaw:We're at, I just had my warehouse closed out for three months for nonpayment of the rent. And I just got it open with some negotiation. And how's your dad? He's doing better. That's why I got back to it.

45:56Ken Coleman:Okay.

45:56Jade Warshaw:I mean, he's still sick. That's part of my, you know. I understand.

46:01Ken Coleman:But I'm leaning in here to say it sounds like you were doing OK running it until you were the only caretaker or felt you were the only caretaker for your dad. And at which point you weren't doing hardly anything at all. It doesn't sound like you were clueless is that you were not present. Is that true? That is. OK, so let me ask another question. If you're back involved and dad is not as sick and he might be well enough to guide you, do you feel confident you can get this thing back on the tracks?

46:39Jade Warshaw:I am confident. It's just I don't know how to put it on paper. I don't know how to plan this.

46:46Ken Coleman:You don't know how to plan. And the reason I'm leaning into this is because this is your sole source of income right now and you have a lot of debt. so we got to figure out where you need to be spending your time so you can make money because it's money and cutting and jay's going to come in and walk you through where you're cutting but i'm trying to get an idea of what is before you to where you can make money so one more follow-up when you say you don't know how to put it on paper can you be specific what do you mean

47:12Jade Warshaw:uh it's just how to manage the debt that i'm in so i'm 200 000 total in debt but a hundred thousand of it is like a vendor debt, which I'm not worried about. As I make orders, I cut it.

47:27Ken Coleman:Is any of this personal debt?

47:30Jade Warshaw:The other hundred thousand is, it's not personal, but it's like taken from family and friends. Okay.

47:39Ken Coleman:It's your debt though. It's not the company's debt.

47:41Jade Warshaw:It's not the company's debt. It's my debt.

47:43Ken Coleman:Okay. And then the other hundred thousand is the company debt? It is the company debt, yeah. Okay, well, okay, these are two different situations, so that's good for us to know. What are you paying yourself, or what are you getting paid?

47:59Jade Warshaw:Up until three months ago, I was paying myself enough to, you know, around four thousand a month, enough for my rent and expenses.

48:10Ken Coleman:Okay, all right, I want to bring Jade in here because we got two lines of debt here. One is the company's debt and one is your personal debt.

48:18Jade Warshaw:And that's where I don't know if it's, I'm sorry, but I don't know if it's going to be different, but the a hundred thousand that's personal, I took it to help the company. I don't know if it's any different. So you borrowed money from family, you personally borrowed the money from families and friends to use that money for the business. Yes. Okay. So then it's all business debt. I mean, okay. Now we got, we get it. We, it was all for the business. Let me put it like that. Okay. So the only way to clear this is to bring in more revenue that can be converted to using to pay off the debt. Correct?

48:51Correct.

48:52Jade Warshaw:So what do you see? Do you see possibilities to do that? Are you, I don't know what the nature of the business is. What do you guys do? It's a used clothing business. I sold them into categories and ship them out to Africa. Oh my gosh. Okay. Very interesting. I know nothing about that world. I'm going to tell you that straight up, but I can tell you right here, what I'm, the way to pay off debt, right, is you have to have more money coming in that can be used for that purpose. So it goes back to Ken's question, which is how suited do you feel to do that? And more, the bigger question is you're 23.

49:30Jade Warshaw:Is this what you want to be doing with your life? If not, we need to talk about that and how to offload this to the right person. Okay. The dilemma I'm in is I like the work. I just don't like the stress. Okay.

49:48Ken Coleman:What's causing you the stress, the debt or the work?

49:51Jade Warshaw:The debt, the work. I'm good at the work. I was working with my dad in high school, so I'm fine with the work. I am involved. I was involved with it. I know inside and out. Okay. But let's go back a step.

50:04Ken Coleman:Let's go back. I appreciate that. But let's go back a step. You at some point needed to borrow or you thought you did rather. Let me let me stipulate. You thought you needed to borrow one hundred thousand dollars from family just to keep this thing afloat. We're not even talking about the initial one hundred thousand. This company is not healthy. True or false. Regardless of you being there and dad being there somewhere along the line, this company started taking on water in the form of debt because you didn't have enough revenue. Am I right?

50:35Jade Warshaw:Yes, you are. That was partly due to my bad decisions, but it is true. Well, there's part of this. I have just a technical question, really. If you exit this business, if you say, you know what, I'm not suited for this, I'm going on. Will your dad and family view the$200 ,000 as money you personally need to pay back? Or will they view it as that lives in the business and it's up to whoever or whatever goes on with the business to cover that? How will they view it? And how do you view it? That's what I was thinking is the$100 ,000 that's personal, that's going to stay with me regardless. Even though it went to the business?

51:14Jade Warshaw:Just because you raised it? Yeah, yeah. The other$100 ,000, if I were to sell the business or other options, the vendor debt is going to stay with the company. See, I disagree with that. If you are able to show the receipts, literally, of how that money was raised for the business, I don't think that that's the case. I don't think that that debt does follow you. You're running this business and that's how you raise money.

51:42Ken Coleman:Either way, my friend, the only way out of this stress is a lot of hustle. And you're going to have to get somebody else that helps dad. You have got to take this company on your back. Learn from your mistakes. Go get some advice from people in your world. and you're going to have to take a real shot at this to get this better. But if in about three to six months something doesn't turn around with your overactivity, then we're going to have to shut it down. You've got to know when to hold them and know when to fold them. Great song. You should check it out. I think it's a great lyric because I think this is your situation.

52:15Ken Coleman:You've got to make the decision sooner. You're going to keep digging deeper.

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53:52Ken Coleman:All right, let's go to Diana in Las Vegas. Diana, how can we help today?

53:57Jade Warshaw:Hi, yes. I was wondering if my husband and I can afford to buy a new Model Y Tesla. Oh, I like these questions.

54:08Ken Coleman:Walk us through the potential doubt. What would be causing a lack of certainty?

54:14Jade Warshaw:my husband thinks i'm being careless and not thinking about our retirement but i think we have more than enough for retirement and i think we're over saving it it's it's time for us to actually loosen up the belt a little bit and enjoy life i like the sound of that tell us how much is your nest egg okay so right now we have over 1 million it's spread out between our 401 our raw our brokerage account. We also have 11 ,000 emergency fund, 20 ,000 right now that we already saved up because we're planning to go to Europe to experience Christmas market this November. We don't have any debt except for our mortgage.

54:59Jade Warshaw:We still owe 380 ,000. The value of the home is 1.5. okay we have we have lots of equity okay and then um um and then right now and we still owe um car car for we still owe about 15 000 we have another model y but my son um he's he's driving soon and i want to give him the old model y and buy us a new model y got you and when you said over 1 million Is it like 1.1 or is it like 1.8? Like how much over 1 million? So 700 ,000 for pre-tax 401k. We have 129 on our Roth. We have 200 ,000 on our brokerage. And then 11 ,000 rainy day fund and 20 ,000 for the travel. Okay. So here's where I'm at. I think you've done extremely well.

55:56Jade Warshaw:And I want you to hear that first and foremost. You guys have really set yourselves up. How old are you? We're$47 ,000. $47 ,000. Excellent. Good job. Excellent. Thank you. I think that you could be in a better position before purchasing this vehicle. How much does a Model Y cost? Right now, it's$41 ,000. $41 ,000. And what's your guys' income? $280 ,000. Okay. So my biggest, I mean, the glaring thing here is why haven't you paid off the first Model Y? It's$15 ,000 for crying out loud. because he says um because of the interest is low oh come on what he wants to do is the money just put it never heard that one before you know just just maxing out our our retirement and our Roth because um right now the market is we get about 14 to like 18 percent returns diana do you consider yourself ramsey folk like are you are you no i've been paying extra on my mortgage.

56:58Jade Warshaw:No! Okay.

57:00Ken Coleman:Take us back to the show or the part in a Ramsey book where we would be okay with you not paying off the car. I'm just curious. Do you have a page number or an episode number?

57:15Jade Warshaw:I should reread the book again. Yeah, you should. That's how we live by. No debt except for mortgage. Spoiler alert, it's not in there. we're playing we're uh we're being hard on you diane no i'm not i'm having a blast well my husband tells me what he wants to do is the 20 000 that we saved up for traveling is pay off the tesla and we're not going to go traveling this year but okay great i've been saving i've been saving for so long working overtime to really go on that trip well here's the thing i think you can do i think you can do both let me tell you how i think you can do both i think you have more money here than you think.

57:52Jade Warshaw:It's just how are we going to allocate it? So let's go back to 20 ,000 saved cash over and above your emergency fund. So yeah, let's say we take 15 of that, we pay off the first Model Y, now we have 5 ,000 left and we keep that in our vacation fund, 5 ,000. By the way, how much is the vacation going to cost total? 15. Okay, so we got 10 more to save. Now tell me, what do you guys bring in every single month again? Take home$15 ,000. $15 ,000 a month.

58:24Ken Coleman:And when is the vacay? Yes.

58:26Jade Warshaw:I'm planning November, Thanksgiving. Okay.

58:29Ken Coleman:You've got plenty of time to do that just out of your take home.

58:31Jade Warshaw:How much is your mortgage payment? Including taxes and insurance, it's$2 ,900. Where's the problem? There's no problem. Here's what it is. I'm going to tell you what it is. You guys have a very loose budget. and so the 15 000 it's going here it's going there it's you know you go out to eat you do a little of this a little of that if you just got very intentional and said okay and before november we need to save up ten thousand dollars making 15 000 a month and the only debt is your mortgage which is 2 000 should not be a problem at all the model right oh if we paid off the model y yes and now when we start talking about the second model y uh i don't know is that is that used or is that brand new, the 41 ,000 that you quoted?

59:17Jade Warshaw:We're looking at brand new. Okay. What if you just said, hey, instead of us taking the hit on an EV, by the way, why not let somebody else take the hit and buy one that's slightly used? Sure. But I'm looking at the tax, what do I call that? The tax deduction. If you bought like no taxes on tax, if you bought new cars made in the USA, I don't even know. I'm going to be honest. I don't know what you just said, but all I'm thinking about is how you're going to be able to have your vacation and your Model Y and not take a major hit on your used vehicle. That's what I'm thinking. Now, you can go back and do the math on whatever rebate it is that you're talking about.

59:56Jade Warshaw:But in this position, I would not advise you to buy this car outright brand new in this position.

1:00:04Ken Coleman:And I think the vacation is more important to you, isn't it?

1:00:08Jade Warshaw:yes i would like to build good memories with my children okay then so healthy okay now that's the

1:00:14Ken Coleman:mindset because i don't think you're going to listen to a word we said about financial advice to be completely honest with you but if i can get through to you on this then i feel like i got a win for you so i think you got to go wait a second what's more important to me because i can't do all three because i think you and your husband are on different pages is that true or false

1:00:32Jade Warshaw:Correct.

1:00:32Ken Coleman:Okay, so.

1:00:33Jade Warshaw:He thinks since we hit our goal, which was one million, I'm being careless.

1:00:38Ken Coleman:I think your husband's right about everything except for the fact that he doesn't think you guys can save up enough cash between now and November. Sure you can. To cash flow the vacation. That's where he's wrong, but he's right on everything else. So if I'm you and life is short, that vacation is going to be something that you will look back on the rest of your life. you will not look back on this new Model Y. No, you won't. You just won't. Because, listen, and I mean this. This is not a disrespect. Folks like you who love fancy technical cars that drive themselves, you get over cars like that because the newest model's out.

1:01:16Ken Coleman:Okay? Guys like me, all I want are classic cars that no one can track and they smell a little bit more than every other car and you feel every second of the road. I don't give two craps about an electric car. Never going to. It doesn't feel like a car. So here's the deal. You buy that car and don't go on vacation. You will regret that. But if you cash flow your vacation, pay off the Model Y, you won't have any regrets at all. Now, you may not believe me, but I'm right. And that's the mindset.

1:01:46Jade Warshaw:Then what about for a car that my son will be driving? Pay it off. I think you can cash flow. After you pay it off, I think you can cash flow another vehicle, whether it's a Model Y or whatever, another used vehicle.

1:01:59Ken Coleman:But only secondary to funding that vacation because the vacation is where your heart is at.

1:02:04Jade Warshaw:I think in the next 12 months you can do both. Let me put it like that.

1:02:07Ken Coleman:I think so, too. But vacation is the highest priority, true or false?

1:02:11Jade Warshaw:Yes. I really would like to go on Thanksgiving.

1:02:14Ken Coleman:So then you've got to give up. So you've got to get on Hubs' page then, and this is where we compromise. And to Jade's point, you'll get your fancy electric car down the road.

1:02:25Jade Warshaw:And let me also clarify, because how old is the boy? The son? She's turning 16. Okay. Can I just tell you? I drove a piece of crap. You are the priority here, my friend. I know. So if you pay off the Model Y and it's not time for you to buy another one yet, guess who's driving it? You.

1:02:44Ken Coleman:That's a great boy.

1:02:45Jade Warshaw:You are driving. It's your car. He will be strong.

1:02:48Ken Coleman:I drove a Fred Flintstone car when I was 16. Like, I had to stop the car with my own feet. I had to accelerate by digging my heels in. This kid doesn't need a Model Y.

1:02:59Jade Warshaw:That's actually the other thing. I do have my old 2005 G35 Infiniti that my husband would like to give to myself. It has over 160 ,000 miles. Who cares?

1:03:11Ken Coleman:I drove a car that had 275 ,000 miles on it. It was such a piece of crap. Same car I'm talking about. I can drive down the interstate and play tricks on my friends by pulling the key out of the ignition while driving it. Please, he can handle it.

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1:05:16Ken Coleman:All right, folks, if you're debt free, the Live Like No One Else cruise is your chance to celebrate. Hang out with us and Dave for new sessions on building wealth, live episodes of our shows, and the world's largest debt free scream. I remember when they did it last year, it was pretty wild. And next thing I'm walking through the ship, and I was trying to get to at least one of the areas. And then there it is on the screen. Dave is up there with the captain, got the microphone. You know, he looked like he was in charge of the ship. Yeah, I remember. And everybody screamed at once. Really, really fun.

1:05:49Ken Coleman:And you can secure your cabin with a$600 deposit and join us in the Western Caribbean March 2027. Click the link in the show notes or go to RamseySolutions.com slash events to book your cabin today. All right, Jeff and Leonora are up in Pensacola, Florida, and Ice Cream tells me that you amazing people are baby steps millionaires. Is this true? That's very true. Wow. Well, first of all, congratulations and welcome to the show. Thanks for being with us. Well, thank you.

1:06:22Jade Warshaw:Thank you.

1:06:23Ken Coleman:We were actually on this show 10 years ago. No way. What for, Debt Free Scream? No.

1:06:30Jade Warshaw:We called it for the millionaire deal, and I told Dave I was retiring that year, and he said, well, call us back in 10 years and let us know how you've been doing. So here we are 10 years later.

1:06:41Ken Coleman:Oh, wow. Well, that's fantastic. All right, well, let's get some details here. What is your net worth? We'd like to say it's in excess of$2 million. You'd like to say. What does that mean? Well, there may be a little bit more in there.

1:06:55Jade Warshaw:that's promised to our endowments and things like that that we don't really consider our money anymore. Okay. Because we made a pledge to give it away. Okay. So we settled on$2 million, and our minds is our money.

1:07:08Ken Coleman:Got it. And what is the mix that creates the$2 million?

1:07:12Jade Warshaw:We have about$1.6 million in mutual funds and 401ks, and then the remainder in real estate.

1:07:23Ken Coleman:Jeff, I don't know what's going on with the phone here. We're having a hard time understanding you. Your phone's kind of coming in and out. Oh. All right, well. We need to speak closer, that's why. There it is. Leonora is on top of it. That's great.

1:07:39Jade Warshaw:So 1.6 in mutual funds, and what is the other$400 ,000, the mortgage? No, no, no. We don't carry mortgages. We don't carry any debt whatsoever. Right, I mean the equity. oh god i'm gonna say a half a million dollars okay in equity perfect fantastic and uh what is

1:08:03Ken Coleman:your income or what was your income give us kind of your lowest income ever and then what you guys

1:08:07Jade Warshaw:may have finished out at your highest income our lowest income ever was probably uh 30 40 000 to 50. Okay. And it grew to an average between the both of us of, I'd say, 150 towards the end of our saving years.

1:08:31Ken Coleman:Okay, great. And what did you guys do? We're both medical professionals. I'm a trauma nurse and a paramedic, and my wife, Leodora, she's a registered nurse. Okay, great.

1:08:43Jade Warshaw:We were an ER director for years as well.

1:08:46Ken Coleman:Oh, fantastic. Okay. And your age is right now? I'm 68. I'm 71. Okay, great. And any of this money inherited at all? No. The chuckle, the knowing chuckle that we asked, just so people realize you can actually do this without inheriting money. Wow. Really fun. What would you say to young people who, you know, are just getting started? Maybe they're a young couple. Maybe they're in the medical profession, you know, and they wonder, is this possible? What would you tell them they need to do to actually get where you guys are?

1:09:25Jade Warshaw:Well, I would say no amount is too small to start saving and to clear all your debt. My husband, that was his clarion call, no debt. and a lot of that he learned from Dave Ramsey and listening to him and reading his books and we lived by that rule because we had lots of debt when we were young when we were first married and very little, very little we pant the mouth as they say but we just struggled you make sacrifices but you have to have your eyes on the prize and it wasn't always easy, but it's without fail, hard work, determination, and commitment. You can do anything. I love it.

1:10:19Ken Coleman:And we just saw an awesome picture of you two on a cruise ship. So describe what life is like now on the other side of all that hardship and discipline that you talked about.

1:10:31Jade Warshaw:Well, basically right now, we still survive just on our social security checks, believe it or not.

1:10:37Ken Coleman:Okay.

1:10:37Jade Warshaw:But every once in a while, we splurge, and we've splurged to turn up about five cruises this year. That's awesome.

1:10:45Ken Coleman:I'm sorry?

1:10:46Jade Warshaw:I said, that's incredible.

1:10:48Ken Coleman:Yeah. Yeah, we've been to the South Pacific and Fiji and all those islands and places out there and Alaska and a number of different destinations.

1:10:59Jade Warshaw:and you know so we just we understand our mortality to be in our ages that we are so

1:11:05Ken Coleman:we're going to spend a little bit of it well we're so proud you guys are heroes we're so proud of what you've accomplished that's awesome Jeff and Leonora thank you so much our Baby Steps Millionaires today thanks for sharing your story I love it and there's so many young couples that could aspire to that and here's what I love about that Jade you know Leonora laid it out there There wasn't any fancy strategy, right? Nope. It was just gods and grandmas ways of handling money, the same theme that we've had on this show for decades. So thank you all again for sharing your story. Really, really fun.

1:11:37Ken Coleman:Let's go to Nick in San Francisco. Nick, how can we help? I'm doing great. Thank you for taking my call. Sure. What's going on?

1:11:45Jade Warshaw:I live in California, and as you can imagine, housing is extremely expensive here. And I was wondering if it makes sense to buy a rental property before buying a primary property. What would be the purpose of doing that first? Is it a size issue? Like, is it a rental is way smaller than what you need, but at least it gets you in the door? What's the play here? I mean, my thought process is, I mean, in my area, I'm looking at maybe$700 ,000, even more, to just buy a starter home. when I was looking in other states to buy a rental home for much cheaper, much, much cheaper. And I would be able to buy it outright.

1:12:33Jade Warshaw:And I'm looking to make money off that.

1:12:37Ken Coleman:What are you doing for a living right now? Just renting somewhere?

1:12:42Jade Warshaw:I live in a rental apartment that's owned by my family. And I pay about$600 a month SES Plus utilities.

1:12:52Ken Coleman:Do you have to live in your area or are you able to work from anywhere?

1:12:58Jade Warshaw:I have to live in my area.

1:12:59Ken Coleman:Okay. Why would you think about buying a house out of state and dealing with all that headache?

1:13:05Jade Warshaw:Yeah. What do you think is going to happen? You're going to turn a quick profit? I'm still trying to understand. No, I'm just looking. I mean, I'm just looking like in the long term to see if it makes sense. I mean, I have money to buy a property. How much? And I have$300 ,000 to$350 ,000.

1:13:24Ken Coleman:What do you make per year?

1:13:26Jade Warshaw:I make$130 ,000. So help me understand, you've got$350 ,000 to spend. Something in your area would cost$700 ,000, so you could essentially put half down. I'm still trying to make sense of what the out-of-state rental property would do for you. I'm just sort of looking at the fact that, I mean, I'm looking at the fact that property taxes and insurance are much cheaper there. And I'm just looking to see. Are you moving there? But is it for an investment?

1:13:59Ken Coleman:No, you're not going to move.

1:14:00Jade Warshaw:Yeah, for an investment because.

1:14:02Ken Coleman:I would invest that money. I wouldn't buy a house.

1:14:05Jade Warshaw:I wouldn't buy real estate in another state. If you're looking to earn quick compounding interest, I would not invest in another property in another state. I would simply drop it in an S &P 500 index fund and let it sit for the next five years. And keep adding to it, you know, and just kind of have a five-year horizon on this. And before you know it, you'll have a$700 ,000 property.

1:14:40Thank you.

1:15:18Ken Coleman:Hey folks, have you heard about Ask Ramsey? If you haven't, it's our free AI tool that's built and trained on proven Ramsey principles. And today we're going to break down some of the most asked questions from this week. There are some questions around life insurance, but the most asked question was around retirement accounts, rules and options for contributing to multiple types of accounts, IRAs, 401ks, 403bs, TSPs, so many of the acronyms. And the main question is, what are the best options for me and in what order? Okay. So again, this is two Ask Grams. People are diving in there. And so here we go.

1:15:57Ken Coleman:Match beats Roth beats traditional. So the workplace match is first, right? So whether that's traditional or Roth option, 15 % up to the match. That includes 403Bs and TSPs. Then you go next to Roth, whether that's an IRA or a 401k, max that out. And then back to the workplace option to finish out the 15%. Taxable investment accounts should happen after the 15 % if you want to invest more. So Ask Ramsey can actually help walk you through what options work best for you in your specific situation. And go today, ask your question. at RamseySolutions.com or click the link in the description if you're listening on podcast or YouTube.

1:16:38Ken Coleman:So there it is. Ask Ramsey. Just type it in and there it goes. Tony is up next in Houston, Texas. Tony, how can we help? Hey, can you hear me? I can hear you loud and clear. What's going on?

1:16:53Jade Warshaw:Hey, happy Friday. So I'm in a situation where I recently got a good well-paying job. right out of college. But my family has some debts and they are asking me to pay the debts for. What? No.

1:17:13Ken Coleman:Goodness gracious. Hard pass.

1:17:16Jade Warshaw:When you say you got a good job with good money, tell us what that exactly what that means. What are you doing and what do you earn? Okay. So I'm a machine learning consultant for a telecommunication company. I'm earning 285k per year. Nice. Do they know that? And they know that. You told them that information?

1:17:40Ken Coleman:Oh boy. To Jade's point, Jade make a great point here. You made this point earlier, so I've got to follow up. How soon did the ask or did the ask for you to help them with their debts come after you told them about this new gig or were they already pressuring you?

1:17:55Jade Warshaw:No, they were not. They were very supportive and I thought they would just be You know, be like, yeah. So once they found out about the new raise, they said, help us. Yeah. And Ed has three cars and he's asking me to pay all of them. And I hear fund your sister's college too. I see that on the screen. What?

1:18:17Ken Coleman:Let me tell you what I would tell them. You aren't making$285 million. I know. What's happening? $285 after taxes doesn't take care of those problems.

1:18:27Jade Warshaw:Is this, can I ask straight up? Is this anything culturally related that we need to know about, or is this just people who are off their rocker?

1:18:38Jade Warshaw:Well, I am Asian, so. Is there an expectation for the sons to pay for the parents?

1:18:47Jade Warshaw:There's no expectation usually. I mean, I thought, you know, we would be just dealing with our debts and things. Obviously, I'm open to helping them. But there is no tradition there that you feel like they are relying on that you no longer believe in. Do you see what I'm saying?

1:19:07Ken Coleman:No, there's no tradition, no culture thing. So let me ask you a question, Tony. Why'd you call us? Because when I immediately said no, you went, so we want to help. But why'd you call? How can we help you?

1:19:27Jade Warshaw:The thing is, I love my family and I currently live with them. But the thing is, this situation is, it really is taking a toll on my mental health. Yeah. How can we help you? I think you got to move out, Tony. What's your question? I kind of want to know your opinion. Would you, if you were in my shoes, would you just... I would move out today. Tony, I would move out. You are grown first off. Money aside, what you make, career aside, you're grown, so it's time to move out. That's thing one. And not pay them a nickel. And not pay them a nickel. And thing two, by you moving out and separating yourself from their expectations, you get to go home and eat a sandwich and not ever think about this again.

1:20:12Jade Warshaw:Versus being in their house, like you said, every night at dinner, they're going to bring it up. In the morning, when your mom sees you before you go to work, she's going to, do you see what I'm saying? So you're keeping yourself in that guilt-ridden environment. Take yourself out. Remove yourself from the conversation.

1:20:27Ken Coleman:There is nothing else for us to say. You will resent your family. The very family you love, you will resent if you capitulate to their manipulation. Don't do it. It's going to burn the bridge, though, I'm afraid. No, it's not. No, it's not. You will not.

1:20:48Jade Warshaw:Here's the thing. I know. I just got very hot-handed. very quickly. You are not burning the bridge, Tony. There is absolutely nothing wrong with saying, I went to school. I earned this income. This is my life. There is nothing stopping sister from doing the same and mom and dad. It's never been my responsibility to pay off your mortgage. Three cars. And that's where I stand. That is the barrier and the boundary that I'm putting in place. I really hope you guys can understand that because that is perfectly logical and it makes perfect sense. Period.

1:21:26Ken Coleman:Done. And if it burns the bridge, that's on them. You can't do anything about this, I feel for you, but only to a degree. Because I'm telling you, see, Jade and I are sitting in the enviable position of not having any emotion attached to this. That's right. And our audience, we've got people in the lobby, they're shaking their head, no, Tony, no. because we aren't attached to this and so none of us have the fear and i honestly think that the best thing you can do in a situation like this is call family members bluffs yes call their bluff and uh so move out today don't pay them a nickel tell them why tell them you're happy to guide them on on what they should be doing if they're willing to listen um but absolutely not and and i'm sorry we got to cut it there i love that you said go home what kind of sandwich uh for you know up on mi i don't even know see what you're so fancy what is that nobody in america knows what you're

1:22:21Jade Warshaw:like a nice bun and there's like pork and like greens bonnie anybody you guys know what that is bonnie ellie does on me and there's like like nice mayonnaise in there a barbecue sandwich i don't

1:22:35Ken Coleman:know it's vietnamese it's delicious or boy i gotta tell you this is exciting now i'm glad i asked because now i have a new sandwich i need or you could do maybe he's eating a blt like just a bacon lettuce tomato well you know i ask because this is tough emotionally i'm having a little fun but i love how you kind of say good i actually think when you when you take a decision like this and take a stand you need to emotionally eat oh 100 you know what my emotional go-to

1:23:00Jade Warshaw:sandwich tell me right now pb and j oh really and i'm gonna chase it with a glass of milk oh

1:23:06Ken Coleman:like i'm 10 years old i know you hate milk but i'm just saying pb and j listen stacy ain't coming

1:23:13Jade Warshaw:anywhere near that mouth after peanut butter and milk get out of here what are you talking about so judgmental i'm just looking out for stacy in all of this that's all all right america you guys

1:23:27Ken Coleman:can comment what's your favorite emotional sandwich i'm gonna go with a blt blt blt yep kelly the producer let's get kelly the producer in here what's your go-to emotional sandwich you've had a rough day and you're gonna eat a sandwich to feel better what is it

1:23:41Jade Warshaw:turkey with bacon for sure extra crispy oh i like that any condiments homemade ranch always with the homemade ranch honorable mention meatball sub okay okay i feel like that's pizza

1:23:56Ken Coleman:uh i'm not sure if that's a sandwich i think that's pizza i think it's pizza it's pizza do you know what i mean just you don't think so you think that meatball is a sandwich i'm

1:24:06Jade Warshaw:flabbergasted that you would not call a meatball sub a sandwich flabbergasted i think it's got the

1:24:10Ken Coleman:sauce it's got the cheese you're putting cheese on it absolutely mozzarella it's a meat pizza it's it's all that is oh wow you know what i mean it's the same it's got all the same ingredients it's on a bun versus like a sandwich i'll tell you what i'm going to a philly philly cheese

1:24:25Jade Warshaw:okay now listen now you're now you're about some business yeah now you're talking about jay

1:24:30Ken Coleman:i need the philly you know what i mean yeah yeah that's what i need that's good need that need that protein, the extra cheese, some pepper to deal with all my emotions.

1:24:40Jade Warshaw:I like that.

1:24:41Ken Coleman:All right. There you go, folks.

1:24:43Jade Warshaw:Emotional eating is what we're suggesting.

1:24:44Ken Coleman:This is what people come for. Great life advice. And then a good conversation about a sandwich with a side of homemade ranch. Way to go, Kelly.

1:25:19Ken Coleman:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Alongside Jade Warshaw, I'm Ken Coleman. Thank you for being with us. The phone number to jump in is 888-825-5225. 888-825-5225. Huntsville, Alabama is where Denise is waiting. Denise, how can we help?

1:25:40Jade Warshaw:Hey, thank you guys for taking my call. I appreciate it. You bet. Here's the short of it. I'm 54 years old. I've been a widow twice.

1:25:50Ken Coleman:Oh, my gosh.

1:25:51Jade Warshaw:I have no retirement saved. And my income does not cover my expenses. I had credit card debt and I ended up having to call National Debt Recovery to turn those over to them and it wasn't even a lot of debt it was just$10 ,000 that me and my past husband had incurred paying his medical bills so after he died it left me with that debt and I had one income instead of two so I went ahead and turned those over and I just recently paid one of the smaller credit cards that I just refused to turn over. I paid it off. I don't have a lot of debt, but I'm just not able to pay my bills. And I've sold everything that I could sell that I can live without.

1:26:49Jade Warshaw:I got rid of the truck and downsized to an economical little Mazda 3 that I drive to work. I work 45 minutes away.

1:26:58Ken Coleman:Okay. What do you make?

1:26:59Jade Warshaw:I make$16 an hour, so I end up bringing home, depending on the week, it's anywhere from$1 ,500 to$1 ,000.

1:27:09Ken Coleman:Okay. Every two weeks. And the little Mazda 3, is that paid for?

1:27:16Jade Warshaw:It is actually not paid for yet. I still owe like$2 ,500 on it, and I only bought it for$4 ,000. It's got 200 ,000 miles on it, but it's a decent, good car.

1:27:26Ken Coleman:What do you do for a living?

1:27:28Jade Warshaw:I am a front desk. I take co-pays. I work for a doctor's office, basically.

1:27:35Ken Coleman:Okay, gotcha. Okay, can you walk us through your debt, the remaining debt you have, go smallest to largest?

1:27:41Jade Warshaw:Smallest to largest. Smallest would be, can I just go down the list the way I have it wrote down? Sure, sure. Yeah, yeah, yeah.

1:27:49Ken Coleman:Go ahead.

1:27:49Jade Warshaw:I'm sorry. The house is$800 a month, and I still owe$124 ,000 on it.

1:27:55Ken Coleman:Okay.

1:27:56Jade Warshaw:I don't think I could rent cheaper. The payments are$800 a month. No, no, no. I don't even think I could rent cheaper than that. No, you can't.

1:28:02Ken Coleman:You're doing good there.

1:28:04Jade Warshaw:The health insurance, I have to go through the market, and it's for me and my child, it's$50 a month.

1:28:10Ken Coleman:Well, I don't need your monthly bills. I just want to know your debt.

1:28:14Jade Warshaw:Oh, my debt. I'm sorry. Okay, that's all fine. What I have left in debt is the car, which is right at$2 ,500. Okay. And I already got rid of the credit card, the other credit card. But then I have that$10 ,000 that I've turned over to National Debt Recovery. Okay, that's actively being, they're actively covering that? Yeah, they take$100 ,000. They just started after Thanksgiving last year. They take$150 ,000 out of every paycheck for 29 months. Oh, boy. Can you get out of that? What's the penalty for counseling that? I'm not sure. I'm actually not sure. I want you to check into that. Okay. You might be on the hook for some fees, but all they're going to do is stack those$150 payments off to the side and they're going to let this default and then they're going to try to make a deal.

1:29:00Jade Warshaw:That's what they're going to do. And that's honestly something that you could do yourself if you chose to do. But I don't know that you need to do that just yet. That's going to tank your credit. It's not good. And like I said, there's usually a good amount of fees attached to that. So I would, if you can get out of that and it's reasonable, I don't know how much you've already paid in, but I would get out of that pretty much immediately. So after the car, the$2 ,500 and after this$10 ,000, is there anything left? Is there any other debt? No. No student loans, no nothing like that? Nope. Okay.

1:29:34Jade Warshaw:So the good news is your mortgage is awesome. The$800 a month, you're right. You can't rent cheaper than that. And the good news is you've got$12 ,500 of debt, which under the circumstances, I don't know why I was expecting, but I thought it was going to be a lot more. Now, the problem is if you have a month-to-month income issue and there's no margin, that$12 ,500 of debt feels like a mountain just because you're struggling to eat, right?

1:30:01Ken Coleman:Yeah, I want you to – so let's dive in with Jade. Jade's the budget queen. Give us – where do you think you're spending too much money?

1:30:11Jade Warshaw:That's just it. I don't know. I've went through... Let's look at it. You make$3 ,000 a month, give or take, right? Yes, less than that, actually. It's more like... And I work two jobs, so it's more like... I mean, I guess it's a second job. It's about$2 ,500 a month. Then it's an income crisis is what you have, because no matter what you do, that$2 ,500 is not going to feel like enough. It's very hard to live on that.

1:30:36Ken Coleman:You're working two jobs? I only heard the one job. That's$16 an hour.

1:30:40Jade Warshaw:I do the 16 an hour, and then the same company, they asked me if I would clean the office for$120 every Friday.

1:30:49Ken Coleman:Okay, so that's after hours. That's the second job? Yes.

1:30:54Jade Warshaw:But none of them are 40 hours a week? The$16 an hour job is 40 hours a week, and they let me work over all the time to try to help me.

1:31:04Ken Coleman:Well, that's good news.

1:31:05Jade Warshaw:I mean, I feel like all I do is work. I go in at 8, and I don't get home until 6. I know, but I think we need to get you a higher hourly. That's the problem.

1:31:12Ken Coleman:I do. I think that's the transition. But I also, I believe, if you'll let Jade walk you through this here for a couple minutes, a lot of detail. I got to believe there's some budgeting issues going on.

1:31:23Jade Warshaw:Yeah, let's try to find it. So after, let's say you're making$2 ,500. After the$800, that leaves you with$1 ,700. Then you said for each, you and your daughter, did you say, it's$50 a month for health insurance? Yep. So$100 total? Yeah,$50 a month. Okay. Both of us. Both of us are in there for$50,$25 a person. Oh, okay. So that takes us down to$1 ,600 or$1 ,650. What next? What else? Water is$35. Uh-huh. What else? Electric's$180. Okay. Progressive car insurance is$100. Okay. I have one of them Gerber life insurances that my mother got on me that if I pass away, it gives my child$10 ,000 to bury me.

1:32:06Jade Warshaw:It's$7 a month. Okay, we're going to cancel that immediately, but it's$7. Okay, what else? And then, of course, now I have the new National Network relief of$150 coming out of every paycheck. Okay, fine. What else? Cell phones are$90. Okay. Do you do like a consumer cellular, or who are you with? We're with Cricket. Okay, good. Next. That's just for two phones. Internet's$90. and then I have a life insurance that since both husbands passed away and left me with nothing, I couldn't even hardly bury them. I didn't want to leave my child like that. So I took out a life insurance plan of$250 ,000 and I paid six for me.

1:32:48Jade Warshaw:Is it term life? Did you do it through Xander? Yes, I did it through Shield. Okay, I want you to call up Xander and check it through with them and make sure it's the best possible option. If not, you might be able to pay a little less Because you said you're paying$248 a month or a quarter. I pay$69 every three months. Okay. Okay. $250 for a year. Okay.

1:33:10Ken Coleman:We got about 40 seconds.

1:33:11Jade Warshaw:Right now, I'm seeing you with$900 extra. So what are you spending on food? We don't. I'm honest. We spend something. If I have a little bit left over, we spend about$110 if we have anything left over. Okay. So that leaves me on my checklist here. That means you got$830 some odd dollars to spare. We're going to give you every dollar and you're going to plug this in and you're going to do just what I walked through with you. Every single item. That money is draining somewhere and you don't have the margin for any drains right now. And I believe that you do need to find something that's going to pay you a higher hourly rate than$16 an hour.

1:33:49Jade Warshaw:That is where your primary struggle is. You're not going to be able to side hustle your way out of that low core income.

1:34:28Ken Coleman:Transcription by CastingWords insurance pro who will only get you what you need at the best price. Go to RamseySolutions.com slash insurance, RamseySolutions.com slash insurance.

1:34:54Ken Coleman:Hey, if you're working the baby steps, the best and fastest way to do it is by using every dollar. It's more than just a budgeting app. Now the plan is built right in. You can track your progress, get personalized recommendations and coaching right there in the app to help you out. It's almost like having one of us right on your phone. It's really fantastic. Start Every Dollar for free today by downloading it in the App Store or Google Play. Riley is up in Chicago. Riley, how can we help?

1:35:26Jade Warshaw:Hi, thank you for having me on the show. I'm 28. My wife is 32. We've been married for five months now. We're moving. We currently have about$100 ,000 equity in our current home and kind of wondering what we should do with that equity, whether we should just roll it into the next house, pay off debt and then use the remainder as a down payment or pay off debt and then do some remodeling on our new home. Oh, I love this idea. So$100 ,000 in equity, how much debt do you guys have? So I currently have no debt. I'm 100 % debt free. My wife has about$70 ,000. She has a car loan for$10 ,000, a personal loan that she got to remodel the house that we're currently in, and that's for$10 ,000, and then about$50 ,000 in student loans.

1:36:13Okay.

1:36:14Jade Warshaw:Okay. So yeah, I like the idea of since you guys happen to be moving, you have this equity and you are newlyweds. So it's really a fresh start. I like the idea of taking that$100 ,000, taking$70 ,000 of it to pay off the existing debt between the two of you. And then what I would do with the$30 ,000 is I'd say how much of this$30 ,000 constitutes three to six months of expenses for us. What would you say? um well with the new house and everything would probably be close to 10 to 12 000 probably okay so we'll say maybe half to be fair and so that leaves you with 15 000 now the question is does that leave you with enough of a down payment for a new house or what would you do yeah so i have uh we have 80 000 cash in the bank that we're going to use for a down payment already.

1:37:08Jade Warshaw:Okay. So you could add the other 15 with that cash and have 95? Yep. Okay. It does. Now, if you put the 95 down, does that get you where you want to be mortgage payment wise? Yeah. So we're going to do a 15 year mortgage and that gets us, it's like, I think went to the math, like 27 % of our monthly income would be our mortgage. And that would be everything in escrow, property taxes, all that. I love that. I'm okay. I'm not going to split hairs on that. I love that for you guys. And then how quickly could you then, I mean, it sounds like there might be work to do on this house because you mentioned renovations.

1:37:41Jade Warshaw:Yeah, we kind of just want to do a kitchen remodel on the house and then everything else is we can kind of just do as we go. But the house is moving ready right now. How quickly could you save up to do that reno in cash? Probably a year. I have overtime opportunities at work, so it's easy for me to come up with extra cash if I need it. Listen, you are very analytical, very logical. Cole, this is easy. This is the easiest call I've had all day. Thank you. There's no argument.

1:38:10Ken Coleman:Love it. I do have a question, though. The way you worded things, do you two have separate finances? It doesn't sound like it, but the way you said it earlier, it did sound like it. Yes and no. We're slowly combining our finances.

1:38:22Jade Warshaw:I guess the way we have it set up now is out of our paycheck, we put a certain amount into a shared account, and then all of our household income, vacations, food, all of our living expenses comes out of that. And then we have our separate money for, you know, if I want to buy a toy or whatever, you know, like a four wheeler snowmobile, something like that. Or if she wants to do her hair or whatever it is, then she can do that. Can I suggest a tweak to that? Yep. Where you guys still have that personal autonomy? What if you put all the money in one account, all of it, and then on the budget, you designated amounts of money, like equal amounts of money for you to spend how you want and equal amounts of money for her to spend how she wants?

1:39:04Okay.

1:39:05Jade Warshaw:Yeah, basically the same, just a little bit. Yeah, it's just creating, I don't know how long you've listened to the show, but I can tell you just today we've had two calls where because the spouses, they had separate accounts. It kind of created this feeling that I can kind of do what I want over here and I don't have to tell my spouse. And over time, things were done that felt like it was crossing the line for the other spouse. So what happened? So, you know what I mean? So putting it in one account says, hey, this really is our money. And I know and I'm just making up numbers here. And I know that I have five hundred dollars out of that that I spend on what I want.

1:39:46Jade Warshaw:And she has five hundred dollars out of that that she spends on what she wants. And then from there on now you've created transparency. And so for for instance, for my husband and I, I I'll be honest, I rarely am like, what'd you spend your money on? I don't care. every once in a while it just comes up and he's like oh i bought this new thing and i'm like oh great and i the assumption is and i know oh that's what he spent his money on but do you see what i'm saying there yeah it makes it more of yeah instead of it makes it more of our money the whole pot there you go yes there you go this is the easiest call your wife good wonderful she no arguments

1:40:23Ken Coleman:yeah this is great and yeah and riley you guys got it together but just to really put a put a pin in all this, the hour, there's a real powerful emotion of unity when we talk about hour. And by the way, the data bears it out. Yeah, absolutely. So I don't need to get on a pulpit on that one today. Evan is up in Roanoke, Virginia. I know where that is. Evan, how can we help?

1:40:50Jade Warshaw:Hey, thanks for taking my call. You guys are my favorite. When you guys are together, it's one of my favorite combinations. That's very nice.

1:40:57Ken Coleman:We just high-fived Evan in honor of you. Thank you very much.

1:41:03Jade Warshaw:We're in FPU week number five. Wow.

1:41:10Jade Warshaw:Did you cut out Evan? Uh-oh. I think our high-five slapped him so.

1:41:17Ken Coleman:Okay, we'll see if we can get Evan back. In the meantime, let's go to Robert in Daytona, Florida. Robert, how can we help? Hey, how you doing? Good. You know what? We're having a blast. What's going on with you today?

1:41:31Jade Warshaw:So I have a little bit of a strange little question here, and a career change. I'm kind of curious as to how to transfer careers. I'm kind of on the top of my career right now, so I'm making the most amount of money that I can right now. But if I'll be switching to the second career, I'll be staying all the way down on the bottom. I'm making about$125 right now. my wife is making about 35 if i switch careers i'm i'm going to be dropped to about 25 000 a year doing what well i'm a mechanic right now and i'm looking at flight instruction um i'm going into

1:42:11Ken Coleman:aviation okay well could you even do that is it even possible have you set your life up to where

1:42:17Jade Warshaw:you can take that big of a hit i spent 65 000 worth on training so far i didn't ask you that

1:42:24Ken Coleman:I asked you because I understand I've taken this call many, many times because pilot, the schooling is outrageous and they can just charge through the absolute teeth on this. So is there not a way to be more patient and save, save, save so that we're not taking a big hit here? Because dropping from 135 to 25, the question I have, we have limited time. is your life set up to where you can take that big of a hit a hundred thousand dollar hit and

1:42:55Jade Warshaw:not be starving yes or no um well that's kind of why i'm calling um i have about we have we have about 20 000 in savings that's not enough and we have about 15 000 and like investments that's not enough what matters is your month to month if you can eat every month on what you bring home between me and my wife is going to be really, really close. I mean, you're going to be down to$55 ,000. So what you need to do tonight is a mock budget. So what is that going to look like? $3 ,700 a month? About$32 ,000. How long is the program?

1:43:33Jade Warshaw:I'm already all taught and everything. I have enough hours to start my career.

1:43:38Ken Coleman:Okay, well, how long then will you be making$25 ,000? That's a very good question. A year, two. You better get the answer to that. and then you do what Jade's talking about. Yeah, do it tonight. This is all about numbers meeting up with calendars. So if I'm going to make that for one to two years, I need to know, is that the gospel truth? What is the range? One year, two year. It could be anyone there. Okay, great. Now that's$25 ,000. So how much money do we have to save up before I take that role? And you may have to press pause, Robert. It sucks. You have to press pause going into that until we have the money saved up to make up the difference.

1:44:13Ken Coleman:That will determine whether or not you can do it. Do I have the cash to make over for the shortfall? Really simple. Starts with a budget first.

1:44:42Jade Warshaw:If you've been working the plan, paying off debt saving and changing your family tree, I'm proud of you. And if you're in Baby Step 4 or beyond, it's time to celebrate.

1:44:52Ken Coleman:The Live Like No One Else cruise is back March 14 through 21, 2027. Join the Ramsey personalities

1:45:00Jade Warshaw:and me as we sail to Half Moon Key, Cozumel, Jamaica, and Grand Cayman on the ultimate debt-free vacation. Cabins will sell out just like last time. Lock in yours with a$600 deposit at ramsaysolutions.com slash events.

1:45:34Ken Coleman:All right. We've got on the debt-free stage in the lobby here at Ramsey Solutions, Alvaro, did I say that right? Absolutely. Fantastic. Welcome, and you're here to do your debt-free scream, I guess. I am. All right, let's go. Let's get the details. All right, how much debt? It was$90 ,493. Okay, and how long? Took 20 months. 20 months, okay. And what was the range of income?

1:45:58Jade Warshaw:I started at$73 ,000, and currently I'm at$92 ,000. Way to go.

1:46:03Ken Coleman:What led to that?

1:46:04Jade Warshaw:I'm an occupational therapist, and I did a lot of side hustles in the meantime. I tutored, repaired glass for phones, dog walked, you name it. I did it. Love that. What kind of debt was it? All student loans. Hey, okay. Whoa, okay.

1:46:21Ken Coleman:Very fun. Okay, so what happened 20 months ago? I graduated from grad school and I saw the bill and I started seeing how much interest

1:46:32Jade Warshaw:was going to accrue. And I did the calculations and in interest, if I did the 20-year plan, it was going to to be$75 ,000 extra on top of the student loans. Essentially, they would have doubled. So I was like, I can't do that. And during this time, I was having no interest accrued. So I was like, I got to go at it. I got to go at him. So I made a deal with my parents. And I asked them, hey, can I live at home for a year? You guys don't charge me rent. But after that, you can charge me double rent of whatever you wanted. So I can aggressively go at this. So they helped me through this journey. And then after that, they saw how aggressively I was going at it, that I wasn't going out.

1:47:10Jade Warshaw:I was doing what I needed to. And they're like, we're going to let you finish off your student loans. They dropped the double rent? They did. Nice. Just the 20 months.

1:47:18Ken Coleman:That's great. Good parents. So, okay. Give us an average, or if you know the exact amount of what you were paying monthly to get there, 90K in 20 months. I can do an average, but I wonder, was it that clean? Were there certain months over the 20 months where you were able to put more? What did it end up looking like each month paying off debt?

1:47:36Jade Warshaw:It was about 5 ,000 a month, 5 ,000 plus. And what was your take home? It wasn't much. It was like 55, 5 ,600. Wow. And those were basic things of like, I'm going to help with the groceries. I'm going to get gas. The biggest goal was my side hustle to pay like the principal. But then after that, my main job was really just get after it. Cause I knew that was the biggest way. Yeah. I love this. This right here is a gleaming example of when it makes sense and how to do the, I'm going to live at home for a little while to get this debt paid off. Excellent. Well done. Wow. So what was the hardest part?

1:48:12Jade Warshaw:I mean, obviously you're seeing your money go out the door and you're living at mom's house. What else was hard? Being able to, or finding the courage to delay gratification and saying no, saying no to a lot of things I wanted to do that in the moment I was like, I'm looking at the future. I'm looking to see what I can accomplish later because right now it does stink. But in the future, I know it's going to be so worth it. And it has been. So the keeping, understanding the logical part, yeah, you know what I have to do. I got to say, but keeping the promise to yourself is the hardest part. Absolutely.

1:48:41Jade Warshaw:Wow. So here's my thing. I have, you know, I'm on social media. I hear people talking all the time. And when you mentioned paying off student loans, the automatic mindset is that's impossible. I want you to talk to, because how old are you?

1:48:54Ken Coleman:30.

1:48:55Jade Warshaw:30. I want you to talk to the 27 year old, the 30 year old who just finished grad school, just finished undergrad and is like, yeah, I'm just going to kick the can down the road forever. I haven't even calculated the interest. They just need to do it. It's, it's a mindset. It's a mentality. And it really does spread into every aspect of life, your work, the way you decide to go about having friends, like those intentional relationships and those intentional things that you choose to do in life, they carry on. So that's why this was so important to me because I knew that if I can be dedicated as I have been in the gym or in my nutrition or whatever aspect that might be, it carries out into being just a better person and you being able to portray that in your personality and whatever encounters you have.

1:49:40Jade Warshaw:Oh, you have figured out, you have unlocked something so important. You have figured out that discipline begets discipline. Absolutely. Yes.

1:49:48Ken Coleman:Have you always been that way or did you develop it as a result of the urgency with this process? Different seasons

1:49:54Jade Warshaw:of life definitely led me that way. I was growing up being an athlete and then I got to school, stopped doing that for a little bit, but then I found that purpose. And once you find that purpose and you know what you're looking for and what you want to be, there's no stopping you. That's right.

1:50:07Ken Coleman:At what point after you're paying$5 ,000 a month does this go from being, I can't believe I'm doing this to look at what I'm doing? Was there an emotional shift if you understand what I'm asking?

1:50:18Jade Warshaw:Oh, yeah. It's really like a countdown because I started with 90 ,000. So it was like I start at nine and then we get to eight, seven, six, all the way down. And once we get to that final zero and you're just on the bare minimum thousands, it's like it's coming. It's going. I love everything about this.

1:50:35Ken Coleman:I do. So 30 years of age. Okay. And now you're on the other side of this. Yeah. How has it changed your perspective looking forward? Because you're a young man.

1:50:44Jade Warshaw:Yeah.

1:50:46Ken Coleman:It's a great feeling because I bought my Beyonce's ring, paid if we're in cash. Oh, we see it over there. Okay, hold it up there so we can get, there we go. I love it. I need some sunglasses.

1:50:59Jade Warshaw:And then on top of that, it's just like, I have no fear. Like, Ken, thank you so much for just what you do. Because because of you, I was able to leave a toxic work environment and just feel proud of being able to work and do what I do and have passion behind it. And then there was a quote that Jade once said with Dave. Receipts? He's coming with receipts. I love it. She said with Dave, weird is being independent in a culture that teaches you to be dependent. And that hit me because it really does. And when you're debt free, independent, knowing that, hey, I need a day off tomorrow and I can take that.

1:51:34Jade Warshaw:There's no greater feeling and no greater power knowing that you did that to yourself and you can do that. Yeah. Autonomy. I am. I'm overwhelmed. You've done such a fantastic job. And you dropped a major key. I don't know if people were listening. Because, you know, people are going to listen to this and be inspired by what you're saying. There is a great motivation tactic that you shared, which is when you have an even, like a nice countable number, like 5 ,000 or 10 ,000, right? It makes it easier to see that number go down in a pattern that is motivating to us. So a little major key there. I'm proud of you.

1:52:07Jade Warshaw:What happens next? Life. I started my own business for occupational therapy. I'm a mobile practice. So just growing now, being able to give people the treatments that they desperately need and not having to rely on insurance or anything along those lines, because I want to give people the opportunity to live their life and be able to regain all functions.

1:52:28Ken Coleman:All right, hold on. If I heard you right, so are you doing a old school cash for your business? No insurance filing at all? That's the goal. But, you know, there's stipulations and everything, but that's my goal. Yeah. And is that you're basically like, okay, this gets you this and you kind of lay it out like a menu so people know? A la carte. I got to say, I just, I don't want to go on a rabbit trail, but this to me is the future of personal medicine. 100%. I think it should be. But I digress. But I'm proud of you starting your own business. Okay. So obviously your lovely fiance is here. Who else alongside her walked through this with you and were your biggest fans?

1:53:07Jade Warshaw:Honestly, it was a journey by myself for the most part. There's not a lot of people that really helped me, but there's a lot of wisdom that was passed on. Because when I first got out, I always asked, what did you guys follow? How do I do this? And it was always the older generation that helped me and said, hey, listen to this, listen to this guy. And it just helped. It helped tremendously. Moral of the story, hang around older people. I was just thinking the same thing. It's good to be old.

1:53:32Ken Coleman:That's awesome. All right, this is fun. Are you ready? Yeah. Okay, here we go. Well, we got Alvaro from Dallas, Texas. He paid off$90 ,000 plus in 20 months, making from$73 ,000 all the way up to$92 ,000 and all those other jobs. Alvaro, it's your moment. Let's hear your debt-free scream. Thank you, Lord. I'm debt-free! There it is! He didn't even need a countdown! No countdown. Just a thank you, Lord, which I prefer. Kind of like that. Put his own stamp on it.

1:54:01Jade Warshaw:I'm going to go out on a limb. You're not all fired up. I'm going to go out on a limb and say, that's one of the goats. Of debt-free screams. That's a goat right there.

1:54:10Ken Coleman:Now that's a fun game for our hardcore Ramsey fans. Do they have their top five debt-free screams? That's a goat. You're saying it's in the top five.

1:54:19Jade Warshaw:Yes, because A, he's young. Okay. Two, he figured out the whole live at home thing and did it flawlessly. Okay. Number two, he started a business of his own. number three he understood a major principle which is it's not just about paying off the debt it's about when you have discipline and when you have freedom in one area of your life and you've mastered it you have to let it go into the other areas you don't just get thin and get your body right now you do that in your spiritual life and now you do it in your marriage and now you do it with your money he understands that you can't stop alvaro i'm telling you that right now i gotta tell

1:54:56Ken Coleman:you pal you got my co-host fired up she could run through a wall right now i better go open the door We're going to go out and see him and celebrate with him.

1:55:22Ken Coleman:How many times have you started January saying, this is the year I'm finally going to get my money under control.

1:55:28Jade Warshaw:But then months go by and you still feel broke. You work too hard to keep living like that. Look, there's only one way to move the needle on your finances this year. You've got to have a plan. So start by downloading EveryDollar. EveryDollar is way more than our world-class budgeting app. In 15 minutes, we'll build you a personalized plan to free up extra margin in your budget and use it to beat debt and build wealth. You'll find thousands of dollars on average just the first day. And you'll get new steps and new lessons every day that help you stay on track and create unstoppable momentum. Don't waste one more day feeling broke and stressed.

1:56:10Jade Warshaw:Get your plan in just 15 minutes by downloading every dollar for free today.

1:56:30Ken Coleman:Our scripture of the day comes from Psalm 20 verse 4, let God grant what is in your heart and fulfill all your plans. Our quote today from John Maxwell, the reality is that you will never get much done unless you go ahead and do it before you are ready. Alrighty then. There's a word. It is. All right, Evan, we got him back, hopefully, in Roanoke. Evan, do we have you? I'm here. Fantastic. Thank you guys for taking my call again. Hey, it's okay. We were worried about you, man. We didn't know what happened. So we're glad to have you back. My wife pulled in the driveway, and the Bluetooth picked up in her car.

1:57:06Ken Coleman:Oh, no. Classic. Dude, that happens to me all the time. Yeah, it's really irritating. All right, what's going on? So we are in FPU week number five.

1:57:18Jade Warshaw:So we're just starting, you know, going through the, you know, but we are on baby step two. And I have a question about possibly, do we need to go back to baby step one and reevaluate it? Because as a backstory, we have two small businesses that we run. I do a cabinet business and she does horseback riding lessons. And we have 15 acres and 11 horses. and our income last year after after all expenses was 130 and we have a thousand dollars set aside but my question is given that something could come up with a horse that would be you know possibly ten thousand dollars if a for a vet bill what what should we hold in reserve for that for for emergencies like that in this situation?

1:58:10Jade Warshaw:Well, first you need to separate it from your personal monies. So if these are two separate businesses, there's got to be a line item in her business budget that when she brings her revenues in, some of her expenses, some of her money goes toward creating retained earnings or like a stockpile of cash, basically an emergency fund for her business. So that's going to be something she needs to build in that's reasonable to the work that she does. And that's something that you need to build into yours as well. And that happens before you guys take your payrolls. Does that make sense? So it's not going to be part of your normal every dollar budget.

1:58:49Jade Warshaw:That's going to be part of her business building over here to the side. Okay. So, so personally, we should just keep, keep it at a thousand personally. And then, and then on the business side, like realistically, you know, how much should, following these principles, because obviously, you know, my business is about 18 months old and hers is like three or four years old. So she's in the, she, my portion of it was 85 last year and she was at 49. And so as far as like operating under the, under Ramsey principles, how much should we hold in reserve for our businesses? And because, you know, We're paying ourselves the profits.

1:59:37And so how much do you hold in reserve on this business?

1:59:42Jade Warshaw:I would probably say somewhere around three to six months of operating expenses for you both is what I'd be looking to do. Now, for her, she's going to have to figure out what that is. I'm not sure that she has an accurate picture. Based on the fact that there's nothing held aside, I don't think you guys have an accurate picture of what salary you can actually pull. because that's a significant amount of money that needs to be budgeted for every single month out of her budget. Does that make sense? It does. And we do have separate, like every, you know, we have a personal and then two business accounts.

2:00:17Jade Warshaw:And her gross last year, you know, just because the overhead on horses is a lot. So her gross was 226 and her net was 49. My gross was, yeah, my gross was 210 and my net was 84. Yeah. I mean, I think just the nature of the business that she does, because it's live animals and it's horses specifically. I mean, I think that's always going to be the case that her spend is going to be higher. But my point is, I think this can continue to go. But the biggest takeaway for you is to go, OK, the money for her business overhead is not coming out of our personal budget. It's coming out of her, the P &L for her business.

2:01:00Jade Warshaw:Does that make sense? It does. And so I guess, do we put, you know, because we have a plan that right now our plan to pay off the debt is going to take 27 months. Okay. And so$70 ,000 in debt in 27 months. What this means is, yeah, that's going to take longer. If you want to get these businesses in a stable position, it means your personal debt's going to take longer, which means you're probably going to have to do some things on the side to bring in extra money to account for that. Right.

2:01:31Ken Coleman:Okay. I mean, Ken, am I missing anything here? I agree. Your advice has been great. I will only add this mental thing. You were touching on it just here. Jay gave you great advice. It's super important that you don't let the intensity, and I love that you're in week five of FPU, right? So you're in it. It's like training camp, you know, and you're just walking through it and you're fired up. Don't let that intensity put you in a situation where you don't shore up your businesses. That is your income. and jade really was all over that and i would just say make sure you go i got to make sure that i've got those retained earnings set up in my businesses plural and if that makes my debt payoff a little longer it's okay it's okay but then i'm going to make up for it as jade is saying so the mindset is let's not hurry at the expense of like gazelle intensity does not mean gazelle foolishness good right and i think that thank you i'm getting this is very exciting it's rare that i get this so i i that would be my word for you is i love the intensity but let's shore up everything else and and and and then we we deal with it as it comes as if as far as the payoff date okay so the fact you guys got these businesses you want to just keep those things stable because if you don't and something happens now you're up a creek now you're in big trouble yeah And we're also blowing up our timeline.

2:02:57Ken Coleman:So it's not about the timeline. It's about how we finish across the line. So appreciate the call. You're a sharp young man. You guys seem like you're doing great. We'll get Kelsey in real quick. Kelsey, how can we help?

2:03:11Jade Warshaw:Hello. I like that gazelle quote. I wish I could write it down, but I'm going to remember that.

2:03:16Ken Coleman:I'll tell you it again. Oh, you already got it. Okay, gotcha. Very good. All right, go ahead. We got about two and a half minutes. We'd love to help you. What's the question?

2:03:23Jade Warshaw:Okay. In regards to prenuptial agreements, I've been listening to you all for less than a year, and I know that you all don't recommend one unless you have big financial disparity, which can protect me or us from Cousin Eddie's. My boyfriend and I plan to get married. It'll be our second marriage. But I wanted to see what your thoughts are on prenups. If there is no big financial disparity between us, but we have Cousin Eddie's.

2:03:54Ken Coleman:What do you mean? Be more specific. What are these cousins or who are, I mean, what are we talking about?

2:03:59Jade Warshaw:Like, so I guess I imagine Cousin Eddie's as being the ones who are looking for money. Okay. Opportunities. Yes.

2:04:11Ken Coleman:And this is not a metaphor. You're telling me you've identified some family members on his side that you think will come asking for money.

2:04:19Jade Warshaw:Yes. And they have before. Will he agree with them? Will your spouse agree with the cousin Eddie? No.

2:04:26Ken Coleman:Okay. You don't need a prenup for that. Yeah. You need boundaries. Okay.

2:04:29Jade Warshaw:That's just you and your husband having the, yes, Ken, you and your husband saying, we're not going to loan money to these people. Okay. Yeah.

2:04:39Ken Coleman:That works. Yeah. But I mean, I mean. Oh yeah.

2:04:41Jade Warshaw:No, he would be on top. He'd be all for that.

2:04:44Ken Coleman:Oh, okay. Yeah.

2:04:45Jade Warshaw:Perfect. Yeah.

2:04:46Ken Coleman:Yeah. Boy, that is interesting. And good on you, by the way, identifying that and bringing it up to him. And so, yeah, complete same page. If we're on the same page that no matter who it is, because we took a call earlier today, a young man gets a massive job. Yes. $285 ,000 salary. Tony. Tells his mom and dad as one would do. And they immediately asked him to help pay off debt, pay for his sister's college. So, you know, Jade and Jade, before we took the call, Jade touched on this. He was like, I wouldn't be telling family about all these income things. So it's very interesting. We've seen this today.

2:05:25Ken Coleman:I love that you guys have figured this out. But yeah, make sure the husband is absolutely in lockstep and we don't share any financial information with any of these folks.

2:05:33Jade Warshaw:So I feel like there's a Southern phrase for that, that opportunistic. You always have a Southern phrase, like a vulture on a jackrabbit. We're like, I don't know, something silly.

2:05:44Ken Coleman:I love that you gave that a shot. No one in the history of radio or podcasting or YouTube has ever said that.

2:05:50Jade Warshaw:Coin that phrase.

2:05:51Ken Coleman:So I think you've done something great. Kelsey, thank you so much. I think you've got a lot of wisdom. No prenup here. Just great communication and a fabulous word to learn. No, and that will work. Hey, remember everybody, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:20Thank you.