Start Telling Your Money What To Do

10:19Jade Warshaw:So currently, I'm just in a little bit, I feel like, in a dead-end situation, and I don't really know what to do to get out of it. I'm currently about$6 ,500 in debt with personal and credit cards. I have no savings at all, and I have a$1 ,250 a month car note that I'm kind of stuck with at the moment. Why are you stuck with it? It's a lease that I signed about 10 months ago for three years, and I wanted to get out of it. I went to the dealership, but just the fees to get out of it are just insane. So I decided to keep the car for the moment. Who gave you the fees?

11:07Dave Ramsey:The dealer? Yeah. Yeah. Who'd you sign the lease with? What company?

11:13Jade Warshaw:It's with Visions Credit Union.

11:16Dave Ramsey:It's who?

11:17Jade Warshaw:It's with Toyota. It's with Toyota, but they did it with Visions Credit Union.

11:22Dave Ramsey:Okay. And so you signed a lease. You got a lease through your credit union.

11:28Jade Warshaw:Well, it was through Toyota Financial. They hooked me up with Visions.

11:31Dave Ramsey:Oh, Toyota Financial set this up. That's who screwed you. Okay.

11:36Jade Warshaw:What's the early termination fee? Do you know what it is? It was like seven something, like seven grand something, because I also drove a lot with the car too. So I didn't go over the limit of miles,

11:51Dave Ramsey:but for how long I've had the car, I drove it more than I was supposed to. Okay. That's not how it works. so someone they're trying they're continuing to screw you all right so you need to call you need to call toyota credit and ask them what the early buyout on the lease is what can i pay you off today for that's like the early payoff on a debt it does not include the interest through the entire 36 months. Okay. And there should be no fees on that other than just what does it take? What is the check I need to write today? Okay. What car is this of Toyota?

12:35Jade Warshaw:It's a 2025 GR Corolla.

12:39Dave Ramsey:Okay. So look that car up and figure out what it's worth and then get the early buyout price. Have you looked up what it's worth, by the way?

12:52Jade Warshaw:It's worth about$38 ,000.

12:54Dave Ramsey:Okay. So you could get about$38 ,000 if you sold it. Let's pretend that when you get the early buyout on the lease,

13:07Dave Ramsey:$1 ,250 a month for 36 months?

13:11Jade Warshaw:it's it's um 700 a month but my insurance it makes it 1250 so it's insane

13:19Dave Ramsey:okay that's different information hun your insurance is a different thing okay it's not your car payment your insurance is not in your car payment you said you had a 1250 car payment you do not you have a 750 car payment okay now that makes the numbers better that makes them worse. It makes me understand the numbers. I didn't understand them at 1250. I couldn't figure out what Toyota had done to you. All right. So anyway, you find out what the early, if the car's worth 38 ,000, you find out what the early buyout is. If I write you a check in full today, okay, then let's pretend that's$34 ,000.

13:59Dave Ramsey:You could simply go to the credit union and get a car loan for$34 ,000 and pay off the lease, then you would owe$34 ,000. You follow me? Yeah. Or it's$42 ,000. So it's more than the early buyout on the lease, but it has nothing to do with the mileage. This is simply the financial part of the transaction of what can I pay my loan off for early. That's what this is. and you compare that to the car. Now, if it takes more than$38 ,000 to buy it out, let's call it$40 ,000, then you've got to arrange with your credit union to borrow$2 ,000 and sell the car to someone for$38 ,000. And you sell it and you buy out the lease early, which is paying off your loan early.

14:54Dave Ramsey:And that's how you get out of a lease early. And it sounds like you desperately need to do that.

15:01Jade Warshaw:Yeah. Okay.

15:03Dave Ramsey:How old are you?

15:05Jade Warshaw:I'm 25. Okay. Yeah.

15:11Dave Ramsey:Okay. So the number one mistake that 25-year-olds make is an expensive car with a big car payment and a big insurance payment. So you're like a normal 25-year-old, but you have discovered that sucks and you don't want to be that anymore.

15:28Jade Warshaw:Yeah, that's right.

15:29Dave Ramsey:Okay. So you didn't do anything that almost every 25-year-old in America hadn't done. But the trick is you've really got to concentrate and not just – listen, if somebody screws you, like you went on that Toyota lot and Toyota Financial screwed you, then don't go ask them how to fix it. Because they're not – that's like the wolf in the hen house, dude. You don't even know what that means. Okay, but that's like –

15:54Jade Warshaw:Yeah, I get you.

15:55Dave Ramsey:Yeah, it's like asking an alligator if he's hungry. You know what I mean? It's like seriously. Right. Yes. Yes. Come on in. I will eat you. Yes. I will help you. I will screw you again, says Toyota Financial. Yes.

16:06Jade Warshaw:Right. Well, good thing he called us because now I feel like he's got the next moves to get out of this. It just took him a second to get there.

16:14Dave Ramsey:Yeah. Yeah. Rudy, I would expend an amazing amount of energy to get out of this car.

16:19Jade Warshaw:Yes.

16:20Dave Ramsey:And not just accept laying down that this is your fate for the next 36 months.

16:26Jade Warshaw:And part of that fate is after this car is sold, now he's in the real business of driving a beater, driving something that's$3 ,000 or$4 ,000. Really the ugliest car and the oldest car that you can find that still runs is what you're going to be driving for a while until pay the debt off.

16:41Dave Ramsey:You need a car that has to have a name. It's so bad you have to name it. Bertha. Old Blue. Bessie. Whatever it is. If it doesn't have a name, it's too good a car. You need a car that's so nasty that you have to name it. And then you walk out and you kick it in the door and say, all right, Bessie, we're going. Start up. Start up, Bessie. Here we go. You got to have the blue goose. You got to have whatever it is, right? And that's for a short period of time. But if you will drive like no one else, you can bank$1 ,250 a month. In 10 months, that's$12 ,500. That's going to feel good. Then you can get rid of old Bessie.

17:23Dave Ramsey:Right, because your insurance is going to go down, too. Yeah, because you don't even get insurance for Bessie. Poor Bessie. She's not even worth health insurance.

17:32Jade Warshaw:No, she's not even worth replacement costs.

17:36Dave Ramsey:We're just going to put a bullet in her if she pulls over to the side. That's it. Yeah, that's it. I mean, this is the way you have to think. And I did that. I drove a piece of crap when we were broke and getting out. And then I got a little better piece of crap, and it was so much better that I didn't think it was a piece of crap. Although it was a piece of crap still. Yeah, I mean, and that's what you do for a little while so that you never have to do it again. It's not a way of life, but it's how you get out of these messes that we all find ourselves in when you wander into the finance office at Toyota Credit.

18:09Jade Warshaw:We've all done it. We've all done it. I remember when I met Sam, he had a Jeep Grand Cherokee, and he had finally made the final payment to pay it off.

18:20Dave Ramsey:And they're not a good car.

18:21Jade Warshaw:It's not a good car, but he paid it off.

18:23Dave Ramsey:It breaks.

18:23Jade Warshaw:And I'd never seen anybody who didn't have a car note.

18:27Dave Ramsey:And don't you know, he went right down there to the Hummer dealership and bought an H3. Because we couldn't stand not having a car payment.

18:36Jade Warshaw:Well, the thought was, once your car hits 100 ,000 miles, it's going to start breaking down. It's going to start messing up. Not a Jeep Cherokee.

18:44Dave Ramsey:Once it hits 10 ,000 miles, it starts breaking down.

18:46Jade Warshaw:Yeah. And so we've all done stupid things. But the point is, I remember the feeling of then selling that H3.

18:52Dave Ramsey:you're used to riding pretty nice y 'all were y 'all were miami vice man y 'all in miami riding around

18:58Jade Warshaw:in the hummer and then had to sell that and you get used to it my point in telling that story is it feels nice to drive a new car it is a hit to the pride when you have to start driving something older and sell your things but you do get used to it human beings are very flexible at the time

19:16Dave Ramsey:it is a hit to the prize. Later on, it's a badge of honor.

19:21Jade Warshaw:It is, yes, Dave.

19:22Dave Ramsey:I'm a grown-up and I did what it takes to be a grown-up.

19:26Jade Warshaw:And I don't care what you people think about it.

19:29Dave Ramsey:Amen. High correlation between people who don't give a crap what other people think and those that build wealth. If you're worried about what other people think, you're going to be poor most of your life.

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20:34Jade Warshaw:So it was pretty much painless. Plus, I added a notch to my dad belt right there between installing car seats and bedtime stories. Listen, being a dad never stops, and making a will is how you make sure your family's covered even when you're not there. So get your will done today at MamaBearLegalForms.com and use the promo code RAMSEY to save 20 % off when you check out. Again, that's MamaBearLegalForms.com, promo code RAMSEY.

21:16Dave Ramsey:Dustin is in Chicago. Hi, Dustin. How are you? I'm doing good. How are you? Better than I deserve. What's up?

21:25Jade Warshaw:So I am recently married, and I have a baby coming in August. And about a year ago, I was a single guy living by myself, not really having a care in the world. and one day changed my life, and God blessed me with a beautiful wife and a 2B daughter. And I am on the wrong side of$37 ,500 in total debt, and I want to dig myself out and build a future for my family, and I know you're the guy and the crew to talk to.

21:58Dave Ramsey:Good for you. Congratulations. Congrats. Thank you. Sounds like a great life you got laid out. We just got to get rid of the mess on the$37 ,000. So what is the$37 ,000 owed to?

22:10Jade Warshaw:So I owe$26 ,000 on my pickup truck, and I owe$11 ,500 in credit card debt. And I rent from my father. Rent's cheap. But the bills add up because basically now that she's cut down on work, my wife, it's all about her and the baby now. And I've got to make sure that I take care of them. and money's super tight right now.

22:37Dave Ramsey:Yeah.

22:37Jade Warshaw:What are you paying for rent? So rent is actually$750 a month.

22:42Dave Ramsey:What do you make?

22:43Jade Warshaw:I make, well, gross is$63.5. My take-home after taxes and insurance, because she's on my insurance, it's about$3 ,015.50 a month. And there's no investing coming out of that, right? No, just, well, my 401k that I pay a little into and then my company matches very little. That's exactly what I mean when I say investing. What percentage is coming out of your money? I believe it's like 3 % or something.

23:13Dave Ramsey:And you have a pickup you can't afford, right?

23:16Jade Warshaw:Yeah, yeah. When I was single, it was right there on the cusp of what I could. But now that I've got to man up and do what I've got to do, I know this is coming. So yeah, that's definitely on the table.

23:31Dave Ramsey:So when are you selling it? uh apparently as soon as i can okay apparently because all of a sudden your life gets good

23:40Jade Warshaw:you got eleven thousand dollars in debt then get you get you a beater car for a little while for

23:45Dave Ramsey:just for a little while you don't have to do it for your whole life and then you then you lean in and you stop your 401k to what little is going in there and you clean up everything did you get a tax refund last year i did but it was very small it was it was about four hundred dollars okay so you're not overpaying on your taxes, we don't think, but you might be with a baby on the way.

24:06Jade Warshaw:Yes, that's true.

24:07Dave Ramsey:Yeah, so you may get a bigger refund. We'll have to wait and see. I don't want to monkey with that today.

24:13Jade Warshaw:But I would pause the 401k today.

24:15Dave Ramsey:I would pause it today and sell the pickup today.

24:17Jade Warshaw:And just for clarity, that is just a pause. It's not stopping forever. It's pausing until you clear out the truck, you clear out the$11 ,000 of debt. And I'd like, I mean, following the baby steps, you do need to save three to six months of expenses. How good would it feel to know that you had your wife coming home, the baby, and six months of a cushion just in case anything would happen?

24:37Dave Ramsey:No debt and$10 ,000 in the bank.

24:39Jade Warshaw:It would be a godsend. Right. Yeah.

24:43Dave Ramsey:It'll be godsend and he sent Dustin to do it.

24:46Jade Warshaw:I couldn't have said it better myself, yes.

24:48Dave Ramsey:So clean her up, dude. That's the thing. So we're going to send you every dollar budgeting app, premium version that we're going to pay for and give it to you as a baby gift. So you and your wife sit down tonight and you look at that app and you lay out exactly where every dollar is going. And you say, all right, the 401k is stopping, the pickup is leaving, and now we're going to attack the$11 ,000 in credit card debt and beans and rice, rice and beans. And she needs to work as much as she can without putting herself or the child in danger because we need money.

25:20Jade Warshaw:And let's talk about that because, you know, this has been all angled at you, Dustin, But this really is you and your wife joining arms together and doing this together. So rather than you getting off the phone and, you know, putting on your cape and doing this, you're going to have to have a conversation with her and make sure that she's on the same page and agrees with this strategy and agrees with the intensity and agrees that this is what needs to happen next. That's a big part of this.

25:47Dave Ramsey:Paula is in Dallas. Hey, Paula, what's up?

25:50Jade Warshaw:Hi. Yes. Thank you for taking my call. Sure. I basically have a predicament, I guess. We are new to the Dave Ramsey philosophy and all that. And we now coming down to the numbers, we have bought a manufactured home back in 2022. And we still owe about$98 ,000 on that. And the interest rate is 8.95. so we feel like we definitely shouldn't have done that decision but we're in it now and we just started making 80 ,000 this year and so but we still feel like one this is not our forever home two we feel like we could definitely free up some money in the housing area area because It's basically our mortgage is$1 ,070 a month, but we need a place to put the house in and we didn't have that.

26:52Jade Warshaw:So we put the house in a community where they charge about$950 a month. So it's about$2 ,000 that we have. What's it worth to pay the home? I'm not sure, but that's the thing. I feel like if we were to sell, I didn't know that they depreciate, I believe. So I don't think that if we were to sell, we would break even, if that makes sense. It does make sense.

27:17Dave Ramsey:You need to get rid of it. Every day you own it, it's going down in value.

27:21Jade Warshaw:Exactly. And I think that's what's, like, we feel stuck because we feel like...

27:26Dave Ramsey:You're going to be more stuck the longer you wait.

27:28Jade Warshaw:Yeah. So the point of that is there's not a good... The point of that is this is going to feel bad. It's not going to feel good. you're going to feel the weight of the mistake when you look at the appraisal and see what it's actually worth but dave is exactly right waiting is not going to solve the problem waiting is going to make it more painful yeah i agree which is why we called we will we thankfully had spiritual parents who guided us through the process of just you know um creating a safe place for us for talking about budgeting and all that because we did not do that at all the past couple years and with my husband's job, they actually provide every dollar premium app for free for employees.

28:11Jade Warshaw:Neat. What kind of margin do you have when you open up every dollar? What kind of margin do you see? I mean, well, it's a zero dollar based budget, right? So we assigned everything to it. Right. So after you've paid the essentials and you've got money that you can kind of decide, here's what we're going to do with the extra. How much is the extra and what are you currently doing with it? Because I'm trying to find some money to help offset the possible deficit here. Yeah, thankfully we don't have any debt on cars. We don't have any debt. We did the whole paying off our debt. So we're in maybe step 3A margin-wise.

28:54Jade Warshaw:I mean, it's just like$100 maybe. Okay, and what do you have saved? $1 ,400. $1 ,400. Okay,$1 ,400. Which is why we feel like the housing is such a big part of our check that we can't put towards saving or putting it towards if we sell it, we can put the rest of it, if that makes sense.

29:13Dave Ramsey:Yeah, you're probably going to be in the hole, and you're probably going to have a loan for the amount that you're in the hole, and you're probably temporarily moving into a rental so that you stop the bleeding.

29:26Jade Warshaw:Okay.

29:26Dave Ramsey:But every year you own this, you're losing$10 ,000 or more.

29:33Jade Warshaw:Yeah. Yeah, I agree. So the conversation really does need to start today.

29:38Dave Ramsey:Yeah, like how are we getting rid of this house? And start talking to real estate agents, start talking to people in the mobile home manufactured world. Who's going to come pick this up? Who's going to buy it? What are we going to sell it for? How are we going to get rid of it? What's the process look like in Texas? and then you also get rid of the$950 lot rent.

29:59Jade Warshaw:Yes. And by the way, if there's more questions, we have a really cool tool. It's called Ask Ramsey. If you have more questions, which I know you do because there's a lot of nuance to this, go on there and keep digging deeper. What I don't want you to do is stop because of a lack of information. I want you to keep digging in on your situation and it's going to point you to all the resources that you need because we can only, you know, We can only do so much in this short call to help you.

30:26Dave Ramsey:Ladies and gentlemen, mobile homes are not a bargain. They go down in value. It's not a class thing. It's not an I'm a snob thing. It's a math thing. It's a car you sleep in. Don't buy one.

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32:22Dave Ramsey:Tabitha is in Toronto. Hi, Tabitha. How are you? Good. How are you? Better than I deserve. What's up?

32:30Jade Warshaw:So my question is, how do we live confidently in the stage that we are financially and know what that looks like? I'm married. I'm 25. We have a little boy. We live just off my husband's income. I stay at home with him. and we're on baby steps four and five while kind of sitting on a down 15 percent of a down payment for a house and we kind of see people our age drowning in debt and kind of feel good about ourselves when we see them but then we have everyone else basically judging our financial decisions because we don't own a house and they make us kind of feel like like who or because we don't.

33:05People that are older than us, parents, people who own houses, and we don't. Okay.

33:12Dave Ramsey:Like your mother?

33:15Jade Warshaw:No, not really. Kind of both sets of parents, no particular parent. And then so then we kind of feel when we have margin in our budget and have some comfortable margins, you know, safe to go on vacation, all that thing. Like my husband needs a new phone and we feel bad to we've spent because we have our mindset that we're poor and not really sure maybe where we are in the baby steps because we don't own a house. So I hear two things going on. I hear you just needing some clarification on where you are in the baby steps, but then I hear a lot of comparison, whether it be positive or negative, just a lot of comparison to other people, whether it be we're doing better than these people or these people, we need to impress them.

33:57We need to care about what they

33:59Jade Warshaw:think in some way. So those are the two things I hear. We can help you define what baby step you're on, but the comparison part is something that you're going to have to think through because the only reason you have to compare are one of two reasons that I can clearly think of. One is positive and one is negative. One is you can look at other people and draw inspiration, right? You can look at them and go, okay, that's pretty good. And then the other thing, if you're looking at them, it's because of competition. And that tends to be negative. And so... I don't think it's competition for us. So let me stop you a second.

34:37Dave Ramsey:Okay. When you say we feel judged, okay, that's your feeling. True. They either are judging or they aren't judging. but you can choose to feel judged or you can choose to not feel judged. That's just a choice. You're just going, you know, I, I, you know, I, there's lots of people that judge everything we do here on the air. Right. And, and the number of times, the number of times I care is precisely zero.

35:10Jade Warshaw:True. Exactly.

35:11Dave Ramsey:I just don't care because I'm not really taking a poll from people that don't have a vote in my life. And so I have a set of values and a set of practices tactically that Sharon and I engage in, and they work, and they're taking us to where we want to go. And if someone doesn't like that, I guess they're just going to have to have their own little problem party over there. Yeah. Because I'm not really taking – you don't get a vote. Now, if you're not confident in your values and in the habits and the patterns that you're engaging in, if you're not confident it's going to get you to where you want to go, then that's a different thing.

36:02Dave Ramsey:That's between you and the value or the idea.

36:06Jade Warshaw:Right.

36:06Dave Ramsey:But if you're following, for instance, the baby steps in detail from the book The Total Money Makeover, if you're doing that in detail, well, you're following what, you know, somewhere around 10 or 15 million people have done. And so if your broke friends don't like it, well, good. That's like fat people making fun of your diet.

36:27Jade Warshaw:True. True. I'm going to send you a copy of my book, What No One Tells You About Money, because I talk a lot about this very thing in the book, and I think it's going to help you. It'll also help you, by the way, identify exactly which baby step you're on.

36:41Dave Ramsey:Yeah, exactly. So I think it's pretty simple. You defined it. You're on baby step 3B. You're out of debt. You have an emergency fund. You're saving for your house. And if you don't put money in retirement for a little while, up to a maximum of three years is what we teach, and you want to throw 100 % of your extra money towards the house down payment, that's fine. If you want to throw some of your extra money and still do some retirement, People do that. Both of those we call baby step 3B. But this is the point at which you do save for a house. And it does take normal people a little while to save for a house.

37:15Dave Ramsey:Most people don't just go, woohoo, all of a sudden, I just bought a house. It's not like you're, you know, running down and picking up a pack of gum. This is a house. So it takes a minute.

37:24Jade Warshaw:Yeah, I just I go back to the comparison thing. The point of comparison is to either learn best practices to draw inspiration. It's not to make yourself feel good or bad. That's not the purpose of it. I think that that's a very thin line that you have to walk. If you're looking at other people, and that's making you feel good or bad about yourself. I think you've crossed the wrong territory. territory. The point of that is to look and say, what can I learn from that? What can I be inspired from from that? Is there a best practice from that?

37:59Dave Ramsey:Yeah, exactly. That's it. But if there's a, if someone is judging me and I'm unsure, then that goes a lot further than someone who's judging me and I'm sure.

38:10Jade Warshaw:Absolutely. Cause then I don't care.

38:12Dave Ramsey:Yeah. Then I'm like, uh, you know, beautiful thing. You have the right to be wrong. It's called freedom, you know? And so I'm going to keep going and good luck with that. Good luck with your wrong thinking there. And I just keep moving on. I'm not really taking a poll. I'm really not. And well, Dave, you don't care what other people think. Exactly. Exactly. Exactly. I love other people, but I don't care what they think. There's a difference. I'm not taking a poll. And so, um, and sometimes losers are in your family. You know, sometimes Debbie Downer is your cousin. Absolutely. You know, everybody's got crazy in their family and if you don't think so then it's you everybody's got crazy in their family and so you know that's just part of it and just go well that's crazy crazy aunt so-and-so right and you crazy uncle so-and-so you don't have and you know they're sweet but they're crazier in a bean you know it's just like it's all right then you don't get a vote crazy so-and-so and loser so-and-so you know look at your life who would want to be who would aspire to be that no thank you.

39:16Dave Ramsey:You don't get a vote. No, thank you. I'm not living like that. And so this is best practices. If you want to emulate or copy a series of habits, character traits, and so on, then find someone that's winning. That's right. Okay. So for instance, we had a pastor come and do a devotional for us a while back, 87 years old. And he walks in the room, you could see peace, the peace of the Holy Spirit on his face. And towards the end of the devotional, he said, so what I'm going to do is I'm just going to give you the book of Hebrews. And for 17 minutes, I clocked it and I sat and watched him word for word in my Bible.

39:57Dave Ramsey:He did the book of Hebrews.

39:59Jade Warshaw:Just recited it?

40:00Dave Ramsey:From memory.

40:01Jade Warshaw:Oh my goodness.

40:02Dave Ramsey:And so, you know, I could aspire to be that guy. That's somebody that I... That's inspiring. That's an inspiring guy. Very. That's an amazing person to be when you're 87. I want to be him when I grow up. You know? And I'm thinking, but, you know, versus so-and-so who's got all this, their life looks like a junk heap because of their decisions and the processes and the values that they have, and yet they have an opinion. You know? You really have to stop and think about this, folks. I mean, really. If your broke friends are making fun of your financial plan, you are right on track.

40:38Jade Warshaw:That's a good point.

40:39Dave Ramsey:That's it. And so, you know, if you're, and just look, if someone is, if they're worth$10 million, we might sit and listen a minute. Maybe.

40:51Jade Warshaw:But the person worth$10 million is usually not going to be the one inserting themselves in the conversation.

40:56Dave Ramsey:They're not judging anybody. They're usually the cheerleader.

40:59Jade Warshaw:Yeah.

41:00Dave Ramsey:Yes. I'm so proud of you.

41:03Jade Warshaw:You know, I love, you know, Jefferson Fisher. Yeah. I love the way he approaches those conversations when people kind of say judgmental or condescending remarks. And you can just throw it right at them and say, did you mean for that to sound judgmental? Did you mean for that to sound condescending?

41:19Dave Ramsey:Were you trying to be hurtful?

41:20Jade Warshaw:Yeah. Were you trying to be? I love it. I've tried it. And let me just tell you, it works.

41:25Dave Ramsey:It just zip it. It zips it right up. It sure does.

41:27Jade Warshaw:Shut it down.

41:28Dave Ramsey:I just wish I could be as calm and nice as Jefferson.

41:32Jade Warshaw:Yeah, because he smiles when he does it.

41:34Dave Ramsey:He just smiles. He's so peaceful and calm. I just did his podcast the other day. We got to spend several hours together. I just love the guy. But he's just ridiculously nice. It's shameful how nice he is. It's inspiring. It's inspiring.

42:11Hey, you guys.

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43:30Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Michelle is in New York. Hi, Michelle. How are you?

43:38Jade Warshaw:Hi, Dave. Good. How are you?

43:40Dave Ramsey:Better than I deserve. What's up?

43:42Jade Warshaw:Okay. So I have a question regarding my mother and her credit card debt and who is liable for her non-payments of credit cards.

43:54Dave Ramsey:Only her.

43:55Jade Warshaw:Unless you're a cosigner. No. No. But she's accumulated$45 ,000 over five different credit cards. And I only found this out after my father passed away in July, going through stuff. So she doesn't have any income besides the Social Security. She's already been sent three letters from three debt collectors. And one actually went to a summons, is now in court, and has sued her for the balance.

44:29Dave Ramsey:Does she own a home?

44:31Jade Warshaw:The home is transferred, so she does not own the property since 2006.

44:38Dave Ramsey:Whose name is the property?

44:42Jade Warshaw:Mine and my brother's.

44:46Dave Ramsey:That was done in 2006?

44:49Jade Warshaw:2006, yes.

44:50Dave Ramsey:And she ran up the debt after that?

44:52Jade Warshaw:Yes. Okay. I mean, I'm sure it's a culmination of, I mean, I don't have all, I have all the credit cards.

45:01Dave Ramsey:Does she have any other assets at all? Does she own anything?

45:05Jade Warshaw:Vehicles? She doesn't own anything. A car? No, she never drove.

45:12Dave Ramsey:How old is she?

45:14Jade Warshaw:85.

45:16Dave Ramsey:How long has it been since she charged on the cards the last time?

45:20Jade Warshaw:So last time was probably August, the beginning of August of 2025, and then I told her to stop making the payment in September.

45:35Dave Ramsey:Well, she had to choose between food and paying the credit cards. Who are the cards with who issued this 85-year-old broke widow credit cards?

45:44Jade Warshaw:She has Amex. She has a Citi MasterCard, a Citi Visa.

45:51Dave Ramsey:So Citibank and Amex have screwed an 85-year-old widow. They issued her a card at a high interest rate, and she has no income but Social Security.

46:05Jade Warshaw:Correct. Correct.

46:06Dave Ramsey:This is the American Express we know and love. Yeah, this is Citibank. What's in your wallet? We screw widows. Yeah.

46:17Jade Warshaw:Well, I didn't make any attempts to reach out to any of the credit card companies either. I don't care. Like to say. She doesn't have any money to give them anyway.

46:25Dave Ramsey:Yeah. Now, I would explain to her that if she ever borrows money again, she's stealing. Right, right. Because she has no ability to pay it back.

46:35Jade Warshaw:Yes.

46:36Dave Ramsey:So she has to stop this on a moral basis.

46:40Jade Warshaw:well now that i'm involved it's that kind of is because i'm not allowing that to do and i have

46:46Dave Ramsey:her on i have her on a short leash okay and you're watching over the money yes i am does she have

46:52Jade Warshaw:enough in her social security to to handle the things she needs handled including like food utilities all that or does she need it covers as she has a surplus of maybe like three hundred by the end of the month.

47:06Dave Ramsey:Okay. Well, I appreciate you watching over her. So the answer to your question is if someone passes away and they have zero assets, their debts simply don't get paid. Debt's are not inherited in the United States. Okay. So you do not inherit debt. It's impossible. Now, for that reason we asked all these questions was if she owns a house, When you die, what you own stands good for what you owe. Your assets stand against your liabilities. And what's left over is called an inheritance. In this case, she doesn't own anything. Right? Correct. And so these people will simply not get paid upon her death.

47:52Dave Ramsey:By the way, you cannot garnish Social Security either. So sue away. She's what we call judgment proof. um, sue away. And then if you guys want to talk to city or Amex, it's up to you and offer them 10 cents on the dollar to just go away just from the hassle standpoint. And the family just put together a little money and get rid of this. And she's not ever going to borrow again. And the cards are all cut up and the accounts are all closed. That would be a nice thing to do, but I'm under no moral obligation because these people loan money to an 85 year old widow who's on social

48:32Jade Warshaw:security they got what's coming to them okay okay yeah when american express and city bank does this

48:41Dave Ramsey:kind of thing and they do it every day they loan money to people who can't pay and they know they can't pay and and they know they can't pay and they don't care and they and your mother's your Her mother sits awake at night wringing her hands because she has honor and she wants to honor her obligations, but she has no ability mathematically to because these people screwed her.

49:01Jade Warshaw:And that's probably the reason why if you can't settle, I would, because there is an emotional tax. Get it off of her.

49:08Dave Ramsey:Right. So she's not seeing the sheriff at the front door with a summons.

49:12Jade Warshaw:Exactly. Right. So the one that did issue the summons already is American Express.

49:19Dave Ramsey:Yeah, of course. Yeah, they're some of the nastiest humans on the planet. We work with them all the time. You can tell they're lying if their mouth's moving.

49:32Jade Warshaw:So I didn't know if it's something that needs to be responded to. You can if you want.

49:38Dave Ramsey:It's up to you. What's the balance on it?

49:41Jade Warshaw:The Amex at the time without any interest that's now accrued was$9 ,385.15.

49:50Dave Ramsey:Do you and your husband want to give them$1 ,000 to go away?

49:57Jade Warshaw:I mean, if it was to go away, I would.

49:59Dave Ramsey:Okay, then call them.

50:01Jade Warshaw:But do you call the lawyer or do you call the American flag?

50:03Dave Ramsey:Call the lawyer if you want. You just call the lawyer and go, hey, you're suing an 85-year-old woman who's on Social Security. You get nothing, honey.

50:11Jade Warshaw:Do you have the money to do it?

50:13Dave Ramsey:And if you've got extra money laying around, and my husband and I are willing to give you guys$1 ,000 just so you piss off, but otherwise piss off.

50:22Jade Warshaw:Okay, and they can't resell it to somebody else? They can sell it. They can do whatever they want.

50:26Dave Ramsey:Oh, no, not if you do that. You need to get it in writing. That's why I said that you can tell they're lying if their mouth's moving. So be sure you get it in writing and do not give them any access to any. Don't give them any information on her, nothing about her. This is my mom. She's 85. She's on Social Security. She has no assets. She's judgment-proof. proof our financial coach said to tell you to piss off but i decided i'd make you an offer of a thousand dollars and see if you'll go away and i'm your financial coach i just told you that

50:57Jade Warshaw:so you can tell them i said that okay okay i hate those people this is the stuff they do to regular

51:04Dave Ramsey:people every day and then we dance around and go i need an amex card because i get a gold card or a platinum card and I'm somebody based on the metal in my plastic.

51:17God.

51:20Jade Warshaw:It's not good. Hey,

51:22Dave Ramsey:you don't want to read the Bible and read what happens to people that messes with orphans and widows. These are not two sets of people you want to mess with. God is not happy with you when you mess with these people. Widows and orphans are protected class. Hello? You don't want, you just don't want to be under that microscope. It's not a good place to be. You want to be on the other side. You want to be blessings to widows and blessings to orphans. This is the side you want to be on of this equation. Well, you get what you pay for.

52:14Dave Ramsey:Okay, guys, let me ask you something.

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53:33Dave Ramsey:Well, house prices continue to go up. Last month, the median house price, that's the middle house price in America, went up to a little over$425 ,000. That's typical for the spring market that we continue to see bumps and increases, even in a fairly slow market like we got right now. If you want to learn more about housing market trends, because you're thinking about how do I get ready for this, when it's time to jump in, all that kind of stuff, we've got all kinds of mortgage rate updates, price market, market upgrades, market trends, all kinds of stuff at RamseySolutions.com slash market. Help you buy or sell with confidence.

54:10Dave Ramsey:RamseySolutions.com slash market. And, of course, you click in the show notes if you're listening on a podcast or YouTube. Jenna is in Utah. Hi, Jenna. How are you?

54:20Jade Warshaw:Hi, I'm doing well.

54:22Dave Ramsey:Good. What's up?

54:25Jade Warshaw:My husband's grandpa wants to buy us a car, and my husband thinks this is a great idea to help us on our financial journey, and I think it's a bad idea. He says I'm just being too proud.

54:40Dave Ramsey:Why is it a bad idea?

54:41Jade Warshaw:Yeah.

54:45Jade Warshaw:Well, the stipulation on this purchase is that we would have to buy it from a dealership. So it would have some kind of warranty. We don't have any money to contribute to this purchase because we just replaced the main water line to our house. Is he buying it in cash? I believe that's the plan. And he would be willing to spend$19 ,000. And I'm just worried. That's a very precise, weird number. It's the amount that he was told by his financial person would not put him at risk for taxes or something. I'm not sure.

55:27Dave Ramsey:Oh, it's a gift tax. Gift tax. That is correct. Okay.

55:30Jade Warshaw:I want to know deeper.

55:31Dave Ramsey:Actually, is he married? Oh, no, you're married. So it could be double that. His financial person's wrong. He could actually give you$38 ,000 because he could give you$19 ,000 and give your husband$19 ,000. Is he wanting you to finance this, or he just wants to give you the cash, and he wants to go buy a car?

55:50Jade Warshaw:He wants to go buy the car.

55:52Dave Ramsey:Okay. What is the downside of this for you? Why are you saying this is not a good idea? I'm concerned that I—I guess it does sound silly.

56:07Jade Warshaw:That it's not going to be a car that I'm really going to like. I've been trying to save up for a nice car. I want to get a big SUV. And I don't want to have a car that I feel like I have to keep driving year after year because it was a gift. Are you a two-car family? my point in asking that is what stops my point in asking that is what would stop the car that grandfather buys reverting to your husband and then you when you're ready to buy the car you want buying the car you want the car that we have right now barely fits all of us and so we could get another car yeah my point is whatever car you get now is probably better than the cars you have.

56:57Dave Ramsey:Jenna, there's something else going on. You're not telling the whole story. Guy's trying to give you a$19 ,000 car and you're bitching about it. I don't understand. Do you not like him? I can't figure out why. You don't like him? Is he going to come over to your house and visit to make sure you shine the car? Yeah. Is he a jerk? What's going on?

57:14Jade Warshaw:No, he's a nice guy. He has been a little critical lately, but I mean, I don't like him. He's been critical.

57:22Dave Ramsey:Unsolicited critical.

57:24Jade Warshaw:Yeah.

57:25Dave Ramsey:And yeah, you're afraid that if you take a car from him, that gives him permission to be full-on critical. Yeah. Yeah, that's fair. That's a fair concern.

57:35Jade Warshaw:You don't have to take the gift. If you think there's going to be strings attached, if you think it's going to add strain, you don't have to take it. But at the same time, if somebody is just blessing you and it is your pride or it is something that you're coming up with in your mind that's going to block this, we want to see that clearly with you.

57:53Dave Ramsey:Wait a minute, too. When you're talking about buying the car you want, are you talking about buying that car on payments?

58:01Jade Warshaw:I'm sorry, what was that?

58:02Dave Ramsey:When you're talking about buying the car you want to buy, apart from Grandpa's gift. We're not taking Grandpa's gift, and we're not taking it because he's critical and he'll be hypercritical if he gives you a gift. And because you want to go buy a car that's big enough for your whole family because the car you have barely now holds your family, and you want to buy a car that holds your family, are you talking about taking out car payments?

58:23Jade Warshaw:No.

58:24Dave Ramsey:You're going to pay cash for the car of your dream that you were talking about a while ago.

58:29Jade Warshaw:Yeah, I would like to spend about$30 ,000 on a car. You don't have$30 ,000. How close are you to saving that? We are set back to zero after replacing the main water line.

58:44Dave Ramsey:So I would like to spend$30 ,000. I have no money. How does that compute?

58:51Jade Warshaw:No. So what I wanted to do was get a small car for my husband now and then sell it in a year or two when we have more money as we've been saving. but I'm worried that if we want to sell a car, especially if it's the car that we've been gifted in a year or two from now, that that's not going to go over well. I'm going to be honest with you. I think that there's just as much issue on your end as there is on granddad's end. I think you both have something that is contributing negatively to this equation.

59:26Dave Ramsey:I have to say I don't want to take grandpa's$19 ,000 gift because I want to buy a$30 ,000 car, but I have no money. This is not a logical sentence. Okay.

59:39Jade Warshaw:That's fair. That's fair. You know, that's my husband's concern is that I'm— Is he concerned? It's not pride.

59:47Dave Ramsey:So here's what I would do. With what I have heard, and I'm not sure—still not sure I got all of it, but with what I have heard, I would suggest that you either don't take the gift and just start saving and work your plan and say, thank you, Grandpa. I appreciate that very much. Or you visit with your husband or your husband visits, not you. You don't say a word. No. He visits with his grandpa and says, Grandpa, we would like to take the gift, but we have to know that it's a true gift. And the gift cannot come with criticism from you critiquing everything we're doing in the future. You can't come over here and tell us how to live.

1:00:30Dave Ramsey:If that's what comes with the gift, we can't take the gift. And we have to be able, Grandpa, I appreciate the gift and honor the gift. But if we take the gift, it's a gift. And if I want to sell it a month later, I might. Okay. And so if you're not good with not coming over and sticking your nose in our business, Grandpa, and you're not good with the fact that I own a stinking car and if I want to trade it later, I feel free to do so. If you're not good with those things, if that's not going to go over well, to use your phrase, Grandpa, then I can't take your gift. That's my two stipulations. And I do appreciate the offer.

1:01:04Dave Ramsey:But if the offer comes with me being trapped in the car and you coming over here and sticking your nose up my business all the time, this ain't going to, I don't need the car. I like that. Now you can be a little bit nicer than that, but that's the message needs to be delivered. And if grandpa goes, no, honey, y 'all do whatever you want. I just got some extra money. Y 'all are struggling young couple. I love you. And I just want you to win. And I'm trying to help. If you want to sell it next day after I give it to you, that's fine. But I want you to get a good solid car those babies can ride in and be safe i wanted to have a warranty i don't agree with that it's a dumb idea but if he wants to do that it's his gift that's fine is the husband concerned whatsoever that this is a bad idea no he's used to this family script where people stick their nose in where they're not supposed to so he didn't bother him a bit yeah no it doesn't bother him at all

1:01:47Jade Warshaw:yeah got it got it you get used to your family's dysfunction and you don't smell it

1:01:52Dave Ramsey:right yeah that's we all do i mean we all have that and so yeah you know so yeah but but if he if your husband is willing to do that you don't need to say a word because you'll be the wicked witch of the west you'll get painted up as the ungrateful little woman that married his grandson right you don't you don't need that paintbrush so just just i think she might already be painted

1:02:14Jade Warshaw:up like that. Just be very, very quiet.

1:02:19Dave Ramsey:Yes, there's wabbits. Be very quiet.

1:02:21Jade Warshaw:From 10 years and things are getting better. Good. Okay. Okay.

1:02:25Dave Ramsey:Yeah. So anyway, yeah, I think you just back off and, but also not taking it and it's not because you're prideful. It's because I see boundary danger.

1:02:38Jade Warshaw:You want to preserve the relationship.

1:02:40Dave Ramsey:Both things are boundary violations. I'm not a boundary violation because it won't go over well. And you're going to come over here and tell me how to live my life because you gave me$19 ,000. No, thank you. I'll pass. That's not pride. That's wisdom. So walking away from this, unless those two things are cleared up, is a good idea. I agree with you. And it's not because you're prideful.

1:03:14Thank you.

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1:04:47Dave Ramsey:You know when you change your life? When you finally say, I'm sick and tired of being sick and tired. And you yell, I've had it! That's when you change. Until then, it's all theory and discussion and intellectual exercise. But nothing changes until you get really, really, really, I've had it, I'm sick and tired of being sick and tired. If you're tired of working so hard and getting nowhere, well, you've got to do something different to get something different. Hello. If you don't like the cake you're making, it turns out chocolate, maybe you ought to change the recipe. Or maybe you wanted chocolate.

1:05:28Dave Ramsey:I want chocolate, actually. So if I keep getting vanilla, I need to change the recipe, right? So if you don't like what's happening, you need to change something. And one good idea is jump on every dollar and start laying out a game plan for changing your life. It's called a budget. It's called a plan. It's called a strategy. It's a tactical move. And you don't have to live this way. Normal's broke. The EveryDollar budgeting app helps you find extra money every month, builds you a personalized plan, you get out of debt, and you become wealthy. It really does work. In the first 15 minutes, you're going to find thousands of dollars in hidden margin.

1:06:03Dave Ramsey:You're going to feel like you got a raise right now. It's free to download the EveryDollar app and get started. You can do that at Google Play or in the App Store. But it's not really free. Because you have to say, I've had it. And when you say, I've had it, that's not free. It's going to cost you something. We're not going to charge you because it's free from us, but it's going to cost you something. Get ready to pay a price if you want to win. No one wins without paying a price. Bree is with us. Bree is in Grand Rapids, Michigan. Hi, Bree. How are you?

1:06:41Jade Warshaw:I'm well. How are you?

1:06:42Dave Ramsey:Better than I deserve. What's up?

1:06:45Jade Warshaw:um so my husband and i worked diligently to be on track to retire at 55 if not sooner cool um until we've realized that we i can't touch my retirement until 59 and a half and now i'm not sure what to do with my money how old are you i'm 30 he's 33 well you got plenty of time don't you

1:07:07Dave Ramsey:You sound like you're freaking out. So what are you going to do from 55 to 85? Nothing?

1:07:18Jade Warshaw:I don't know. I would love to have the ability to do nothing. You want to be work optional. Yeah, exactly. Okay.

1:07:27Dave Ramsey:How much do you have in your 401ks and so forth now?

1:07:32Jade Warshaw:So combined, we're at about 530.

1:07:35Dave Ramsey:Excellent job. Okay. And what do you all make?

1:07:40Jade Warshaw:About$170 ,000 a year.

1:07:42Dave Ramsey:Excellent. And you're debt-free except your house or including your house?

1:07:47Jade Warshaw:Except our house.

1:07:48Dave Ramsey:Okay. And what do you all own the home? About$100 ,000. How much?

1:07:55Jade Warshaw:$300 ,000.

1:07:56Dave Ramsey:$300 ,000. Okay, good. Okay, cool. You're doing so good. There's nothing to panic about. Now, so the answer to your question from me, and I'll let Jade chime in too, has two parts. One is I would continue to work the baby steps first and foremost, and that's putting 15 % of your income away in retirement, 59 and a half accessible accounts, which you're worried about, and get your house paid off. You're going to do that in plenty of time when the house is paid off then to start funding a bridge because the bridge is not that big a bridge. You're only talking about four years, and so we only need 400 grand.

1:08:34Dave Ramsey:and how fast can you build up 400 grand really really fast when you start putting your whole house payment away right yeah so i mean really you probably need 300 grand because it's actually going to be earning because you're going to put it in like an s &p 500 and so if you start that uh you know you're probably going to pay off the house in the next four or five years the way you're going and you've got 15 and by the way in seven years you're going to have a million uh no in about about five years because you're adding to it you're about five years you're gonna have a million in your 401k and um worst case is something comes along and stubs your toe and you're sitting there at 50 and you have five years and you still don't have any bridge money built and you still think you want to get there and but you by then you've got three million dollars in your 401k we'll stop your 401k for a little while and just build your bridge how what split would you do i'd do 100 if you did that but here's the thing that scenario is not going to happen because the you would have to have something pretty severe happen to cause you to have not had the house paid off and then start putting the house money aside because if you start putting your whole house payment away you know you start putting what 40 000 bucks a year away, you're going to have$400 ,000 in about 20 minutes.

1:10:00Dave Ramsey:It goes really, really fast.

1:10:04Jade Warshaw:Okay, and you just would put that in a stock fund?

1:10:07Dave Ramsey:Yeah, just an S &P 500. You want to put it in something that's called a low, like an S &P 500 index because it's a low turnover ratio. If the mutual fund is not in a retirement account and they sell the stocks inside of it, it creates taxes every year. But if it's in a low turnover mutual fund, meaning they don't sell the tax, sell the stocks inside of it very often, like hardly at all, like a 5 % turnover ratio or less, which is what an S &P 500 index fund would be, they're not going to turn those stocks over. They just sit on them. And so that will grow without taxes until you sell it. And so it grows at capital gains rate and not already in the income rate when you do sell it if you keep it over a year.

1:10:49Dave Ramsey:and it grows without taxes. Because, see, if you buy a stock, if you buy a mutual fund or anything, and it's not, you don't, you buy a stock in Home Depot and it's$55. I made that up. I don't even know what Home Depot is. But, okay, it's$55 and it goes to$155. You don't pay taxes on the$100 in growth until you sell it. And the same goes true of a mutual fund where they're not selling the stocks. You don't pay any taxes on it until you sell it. And so you could start that at$50 and you will be just fine. but I think you're going to be there way earlier than that. And, yeah, you should look at building some wealth outside of retirement accounts because you're going to easily have$10 million in retirement.

1:11:28Jade Warshaw:Right.

1:11:29Dave Ramsey:Yeah, you guys are killing it. You're doing so good.

1:11:31Jade Warshaw:All this money that I can't touch. How did you do it? How did you save so much money so quickly, so young? Did you avoid debt? Like what was the? Yeah, I mean, my husband and I both avoided debt. I had a little bit of student loans that I paid off pretty quick. And then he just, we're frugal.

1:11:51Dave Ramsey:Okay. Well, here's the thing.

1:11:53Jade Warshaw:We turned over a house.

1:11:54Dave Ramsey:Two times.

1:11:55Jade Warshaw:We made a couple hundred.

1:11:57Dave Ramsey:Yeah, very good. You are doing way better than the emotion that is in your voice two different times in this conversation that said, the money is trapped. And it's like too much drama in that. Okay. You've got it. You've got, you're okay. you're going to be wealthy you're okay you just need to follow a plan through and and there's no like there's no alternative we're going to be trapped all this we're gonna have 10 million dollars and it's trapped oh darn i hate it when that happens you know so you're be okay yeah get the house paid off and then start building some other wealth and the numbers never turn out like you're projecting when you're 30 they you know it's good to project out because it gives you piece and says, I'm going to retire with dignity.

1:12:44Dave Ramsey:I don't have to eat Alpo, right?

1:12:46Jade Warshaw:Yeah. And I would go on to RamseySolutions.com and look at the investing calculator. And then you can run out and say, okay, at the current rate, we're investing 15%. How quickly do we need to pay off our mortgage so that we can bump up that 15 % so that we can still put 15 % in the 401ks and then put another percentage.

1:13:07Dave Ramsey:And then put it in the brokerage. And put that in a good S &P and let that sucker ride.

1:13:12Jade Warshaw:And then once you see, but once you see the numbers, then you can say, okay, I have a plan. I don't have to be dramatic.

1:13:18Dave Ramsey:You're going to be okay. You got lots of times, lots of times in the next 20 years that you can stop adding to your 401k and still make your bridge. Absolutely. Okay. And still end up with millions of dollars. So don't stop now. That's way premature. And here's the other thing. It's okay to have, quote, work optional, which means you financially are able to do things. But work's really not optional. You need it for your brain. You should do something with your life. You're way too talented to sit on your butt and binge watch Netflix. You should do something with your life. And so work optional is fine, but then go work, okay?

1:14:02Dave Ramsey:I haven't had to work in decades. I work because I love this.

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1:15:13Dave Ramsey:From day one, you're assigned an attorney to represent you. So if things do escalate, you're not scrambling and you're not hit with surprise legal fees. Guardian litigation only gets paid when the debt is negotiated and you accept the settlement offer. This isn't about shortcuts. It's about dealing with the problem before it gets worse. Go to guardianlit.com slash Ramsey today. That's guardianlit.com slash Ramsey today. Attorney advertising. Results may vary and no specific outcome is guaranteed.

1:16:05Dave Ramsey:Phillip is in Memphis. Hi, Phillip. How are you? Good, Dave.

1:16:10Jade Warshaw:How are you?

1:16:11Dave Ramsey:Better than I deserve. What's up?

1:16:14Jade Warshaw:Hey, so I racked up a little over$30 ,000 in debt, and I was wondering if I should try and pay it off or just file for bankruptcy. Because I'm kind of living paycheck to paycheck with all that debt.

1:16:27Dave Ramsey:What do you owe it on? What kind of debt?

1:16:30Jade Warshaw:uh credit cards personal loans i have a couple things in collections now what caused you to fall on such a hard time that you were putting that much debt on credit cards and personal loans did you lose a job or uh no i started gambling last year okay you ran up 30 000 in one year

1:16:54Dave Ramsey:You ran up 30K? Wait a minute, stop. You ran up 30K in one year?

1:16:59Jade Warshaw:Yeah, I was winning pretty big, and then I just started losing. Apparently not. Is this sports betting? No, this is in person, sometimes online casinos. No sports still. Okay.

1:17:12Dave Ramsey:How long has it been since you gambled?

1:17:17Jade Warshaw:Two days.

1:17:18Dave Ramsey:Mm-hmm. Okay. So let's be real clear. You identified in the first minute and a half that I know you that you have a problem gambling and that it has run you up close to bankruptcy, and yet you continue.

1:17:37Jade Warshaw:Yes, sir. I'm just trying to chase the win.

1:17:39Dave Ramsey:I'm sorry?

1:17:42Jade Warshaw:I'm just trying to chase the win back. Have you considered being some help?

1:17:47Dave Ramsey:You're trying to take the win back. Is that what you said? I'm just trying to win the money back. Yeah, yeah, okay.

1:17:59Dave Ramsey:So you have all the symptoms of someone who has a gambling addiction.

1:18:05Jade Warshaw:It's not an addiction because I could stop right now. Then why don't you? Because he's trying to win, and you've lost$30 ,000,

1:18:16Dave Ramsey:and you're talking to me about bankruptcy. This is illogical, hon. You've got to figure out what causes the problem and stop what causes the problem. The debt is not the problem. It's the symptom. The problem is the gambling. And so if you file bankruptcy on this and you continue to gamble, you did not fix the problem. You're under the illusion that you're good at this and you're not. You suck at it.

1:18:47Dave Ramsey:you're$30 ,000 in the hole

1:18:49Jade Warshaw:I just want to be out of the clear so I can stop living paycheck to paycheck

1:18:52Dave Ramsey:and the way you do that is you stop first and then

1:19:00Jade Warshaw:never go back again

1:19:01Dave Ramsey:never go back again you need to get online and get in touch with Gamblers Anonymous and you sit in a group and you need to never play cards again you can't handle it, you're not good at it it owns you right now.

1:19:16Jade Warshaw:The only problem I see with it is just the number, but I don't think it's really like an addiction or anything. You called us, and based on your logic, we both think that you do have an addiction. So there's something about you that trusts us, otherwise you wouldn't have called in. Ask ChatGPT, and they said to file for bankruptcy.

1:19:41Dave Ramsey:Yeah, and ChatGPT just knows everything. It's kind of like God. No, it's not.

1:19:48Jade Warshaw:I'm going to get a human answer because all my friends didn't say it.

1:19:51Dave Ramsey:Because the ChatGPT didn't challenge you on what's really going on. It just said you had$30 ,000 and I'm living paycheck to paycheck. And ChatGPT has never had to live 30 years later still filling out forms that says, have you ever filed bankruptcy? And for the rest of your life, you have to say yes.

1:20:09Jade Warshaw:And if you do it, sure, it could clear your debt. You're not bankrupt.

1:20:13Dave Ramsey:You're gambling too much.

1:20:15Jade Warshaw:And if you don't stop that, then you'll be right back where you started. So that's not the solution to the problem.

1:20:20Dave Ramsey:A hundred percent chance you're going to be back in debt again after your bankruptcy if you don't stop the gambling. A hundred percent. You don't see that, do you? You think you file or you just quit gambling?

1:20:33Jade Warshaw:I mean, what if I just put my cards in collections?

1:20:37Dave Ramsey:Yeah, what if you stopped gambling?

1:20:43Jade Warshaw:I mean, that could work, too. Yeah, that would work. I could get back faster.

1:20:49Jade Warshaw:How old are you?

1:20:52Dave Ramsey:24. Okay. All right. Here's the thing. 100%. I've been doing coaching with people with financial problems for 10 years longer than you've been alive, for 35 years. And one of the things, sadly, I've gotten to spend a lot of time with, Phillip, is people who are addicted to something. Because if you're addicted to cocaine, if you're addicted to pornography, if you're addicted to gambling, if you're addicted to something, 100 % of addicts are broke eventually. a hundred percent probability if you're addicted to something it eventually causes you to be broke and it'll usually also cause you to lose all of your relationships too and so you've got two people here that know what we're talking about that love you we're not trying to get anything from you we're not making a dime on this there's no uh there's no poker chips in the middle of the table there's no bluff it's just two people looking at you telling you the truth.

1:21:58Dave Ramsey:You're not bankrupt. You need three extra jobs, a detailed plan, and quit gambling. And you have a problem gambling. You're getting a high from it. You're getting a dopamine hit. And you're going back and you're saying all the lines. You know what addicts always say? I can stop anytime I want. You know what addicts always say? I'm waiting on the next win. I'm waiting on the next high. These are classic. If you read addiction literature, it sounds like your verbiage, Philip. And so, I mean, we're not professional counselors, but dude, I've worked with thousands of addicts. And it's really distressing to hear the way you're talking.

1:22:46Dave Ramsey:I'm scared for you, hon. I'm scared for you. If I could put my arm around you and pray for you right now, I would. So I will be at the commercial break. I can promise you that. But you're not going to get a good quality of life until you stop this, because it's not blessing you. It's not bringing good things to your life. And it's costing you money, and you're believing a lie. The mythology in your language is enormous. So please get some help. Go see Gamblers Anonymous Stop Now Now Stop now And go be the man you're supposed to be Which is a guy who's productive And prosperous And is worthy Of the hand of a good woman And becomes a great dad someday And go be that guy Don't be some guy who's looking For the next win that's such a pitiful statement oh you can do this i promise you you can do it and we'll help you you call us back we'll always tell you the truth even if you don't like it sometimes especially if you don't like it but um you're not you're not bankrupt thirty thousand dollars is not enough to file bankruptcy on you there's lots of ways you can pay that off stop paying your cards, work your way right through it.

1:24:12Dave Ramsey:You can get with guardian litigation. They'll set up a plan, do it all, but they will not set it up for you if you're, if you have symptoms of addiction because they know that you're not going to follow through. You can't do a plan when you, when you need, when you, when you've continually going back and losing money every night. Can't get out of a hole while you're digging at the bottom.

1:24:34Jade Warshaw:Oh, no, you can't.

1:24:36Dave Ramsey:So guys, uh, just to recap a minute and set Phillip's case aside for a second. Um, the fastest growing addiction in America that is destroying more households than anything else is online porn. It has gotten completely out of control. It generates more revenue than 100 % of the professional sports put together, including NASCAR. Baseball, football, soccer, basketball, NBA, MLB, every single sport, billions and billions of dollars of sports added up, don't keep up with the porn industry in America. And the number of people who are losing their families and losing their lives to it is astronomical.

1:25:23Dave Ramsey:The second fastest growing right now, gambling. And the reason it's the fastest growing is online accessibility on both of those. Porn and gambling, by far the fastest. And sports betting among young men in their 20s, it's destroying them. Destroying them.

1:25:58Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studios christine is in oklahoma

1:26:04Jade Warshaw:hi christine how are you i'm good how are you doing better than i deserve what's up So I had a question related to my career. I'm in my first year as an attorney. So I graduated last May, took the bar, eight months pregnant, passed the bar, had my baby in September, started working too much later. and I'm currently working right now and I really don't like it. I took out 115K in student loans to get this degree and I really liked law school, but I am not liking it right now. What did you love about law school? I loved learning about the law. I loved the reading. What I'm struggling with right now is a lot of the billable hours.

1:26:54Jade Warshaw:The job I'm in is a pretty fast-paced, high-earning firm, and so the billable hour requirements are pretty high. And with a nine-month-old, I'm just really struggling. Is it the – so it's not the work, it's the pace that you have to do the work because of the baby. Yeah. I would like to be home with her more and have more flexibility. And I think when I went into law school, I wasn't planning on having a baby until a couple years down the road into my career. and I wasn't anticipating feeling so much more like I just want to be home with her. I mean, that's fair.

1:27:32Dave Ramsey:You're obviously married. What does your husband make?

1:27:36Jade Warshaw:He makes about$60 ,000,$65 ,000. He's a high school teacher and football coach.

1:27:41Dave Ramsey:Yeah. And you make what at the high-powered, high-billing law firm?

1:27:46Jade Warshaw:I make$105 ,000 based, and I got a sign-on bonus of$10 ,000.

1:27:51Dave Ramsey:A bonus of 10?

1:27:53Jade Warshaw:Yep.

1:27:54Dave Ramsey:And you've been a lawyer since September?

1:27:57Jade Warshaw:Since, yeah. Well, I passed the bar in September, and I started working as an attorney in November. That's when I went back to work after the baby.

1:28:05Dave Ramsey:All right, so seven months.

1:28:06Jade Warshaw:Have you explored other options where the pace is not quite so fast or the hours aren't as high?

1:28:16Jade Warshaw:I'm just not sure. Being in my first year. For one, I'm in Oklahoma, and a lot of the jobs that aren't as high billing don't pay as much. And with my amount of student loans, I thought maybe I could last a year or two, get them knocked out, and be done with it, and then go do whatever. I mean, how quickly can you pay off$15 ,000 on$170 ,000?

1:28:40Dave Ramsey:$115 ,000.

1:28:41Jade Warshaw:Oh, I'm sorry. I misheard. And I saw it on there. Okay. $115 ,000. Yeah. Yeah. 115, and then my husband has like 12K, so around 130. I mean, I think I could get it knocked out pretty quick. I mean, it wouldn't be less than a year, though. No, it wouldn't. I mean, with that amount.

1:29:01Dave Ramsey:It would take 18 months, yeah.

1:29:04Jade Warshaw:Yeah, because we could, I mean, go ahead, sorry.

1:29:07Dave Ramsey:There's two things we can do. One is I think you're extrapolating the situation that you're in to all lawyers, and all lawyers don't face what you're facing. So there's other ways to utilize the law degree and make a good living. Maybe not make what you're making at this instance seven or ten months into your career. That's possible. you're not going to make more than that. You're probably not going to make this if you did something else. But, um, yeah, but, but you can't go postpartum and say, I'm going to throw away the amount of years and the amount of money invested into this. Um, you know, just based on the fact that I'm pretty stressed out at this particular moment.

1:30:00Dave Ramsey:Instead, we have to look at other ways to dial the stress down without going all the way to zero. Yeah. And so if you can't, and I can't put myself in your skin, only you and your husband can prayerfully consider this. If you can't suck it up and run the gauntlet for 18 months and clear the student loan, then the second thing, and that's actually the best thing. I agree. But that's very hard to do. And I'm not saying everybody can do that. And I'm not saying you have to. I'm just saying that's option one. That's actually plan A. Okay. Plan B would be how can we utilize the law degree, maybe make more, but maybe make a little less and be in a situation where I can actually breathe.

1:30:53Dave Ramsey:and I'm not just about to punch everybody out because I'm so stressed out all the time and I'm trying to raise a baby. And so that's cool. That's fine. So that's position B. But I'm not going all the way to position Z where we do nothing.

1:31:10Jade Warshaw:Yeah.

1:31:11Dave Ramsey:You gave up the option of being a full-time mom sit at home with the baby when you made the decision to go$115 ,000 in debt. You gave that up.

1:31:21Jade Warshaw:I agree 100%.

1:31:22Dave Ramsey:Okay.

1:31:23Jade Warshaw:And I don't want to not work. I've never been that type of person that can just sit around. I mean, that's kind of why I went to law school. You need option B. You need an option that will allow you to.

1:31:32Dave Ramsey:Well, and here's the thing. If you can get a real clear picture, like actually go interview for the job for option B, and you know it's there, sometimes if I have at least that I don't I don't feel as trapped and then I can gut something out

1:31:51Jade Warshaw:for a little while longer yeah because you know if you have to pull that but if it feels like this

1:31:55Dave Ramsey:is extended for 10 years it feels like it's forever I just can't do it I lose my hope you know yeah yeah so I agree yeah um and and yeah I yeah I think that's probably the way to go there So, guys,

1:32:16Dave Ramsey:Christine's obviously a very bright lady, and I'm glad we were able to help her. Setting her particular situation and her particular self aside for a second, this is how the student loan crisis occurred. This is how we have almost$2 trillion now in student loan debt out there. because we told people that your life, if you go get an education, your life is going to be exactly what you want it to be. And it never works out that way. I talked to a lady not long ago who was making$400 ,000 a year as an MD, and she had a special needs child. and now she's faced with this desperate desire to be at home with a special needs child versus her four hundred thousand dollar income and her six hundred thousand dollars in student loan debt and so she's trapped between this in that situation that's a more extreme version of what Christine is facing.

1:33:27Dave Ramsey:But as Christine so eloquently said, they don't tell you this when you're in law school.

1:33:33Jade Warshaw:No, they don't.

1:33:34Dave Ramsey:That as soon as you hold that baby in your arms, things change. Things change. And you can't anticipate this until you're in it. And you can't see that coming. It's impossible. They don't tell you this when they say, oh it's you just you're gonna make so much more money because you got a degree yeah when you're

1:33:57Jade Warshaw:in your late teens and mid-20s you're not thinking about the day you might have a baby you're thinking about getting your education and doing whatever it takes to do you're not thinking about all the

1:34:07Dave Ramsey:that's a positive thing that could happen but all the negative things that can happen absolutely the tragedies that can come across your path and those things happen to people every day yeah so Yeah, don't sign up for these trips because you get trapped. The borrower is slave to the lender, and Jesus said it's hard to serve two masters. You'll hate one and love the other.

1:34:43Dave Ramsey:Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:35:33Dave Ramsey:Today's Ramsey Show question of the day is brought to you by Y-Refi. Defaulted private student loans can derail your money plans, but Y-Refi helps borrowers explore refinancing options. They'll help you get on track again. Learn more at YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:35:59Jade Warshaw:Okay, today's question comes from Keith in California. He says, my wife and I are in baby step two with$10 ,000 of remaining debt. We generally agree on our budget, but we have one reoccurring disagreement. I spend about$40 every three months on a haircut, which fits our budget. My wife would prefer that I visit a professional barber every month at a cost of around$110 per visit. Her argument is that it makes me look better. It helps my professional image. And I love this one. It makes her feel better when my hair and beard are styled. I don't think the barber is a waste of money, but my concern is that a 110 monthly bill doesn't seem to fit our budget or align with the intensity of baby step two.

1:36:46Jade Warshaw:Is this the type of expense that should wait until we're debt free? Or is it reasonable to include it in the budget because of the personal and professional benefits? I have some opinions on this.

1:37:00Dave Ramsey:I can't wait. Because I don't. My first thought is, this woman is desperate.

1:37:09Jade Warshaw:There's something that she's trying to be nice, but it sounds like you're really in the need of some grooming to be done. That's what I mean.

1:37:18Dave Ramsey:He goes and gets a$40 haircut. They don't groom there.

1:37:20Jade Warshaw:Every three months? Three months, that's a quarter. That's a long time. And his beard, I'm imagining this guy with a long beard. You know, if you don't condition your beard, it's scraggly, starts smelling weird. I think that this is a desperate woman speaking. However, you are on baby step two. Is there a way? Here's what comes to mind.

1:37:42Dave Ramsey:I don't have a point of perspective, so I have to interrupt you. Okay. What does Sam spend?

1:37:47Jade Warshaw:I think it's probably around$110 or so.

1:37:51Dave Ramsey:A month?

1:37:51Jade Warshaw:Mm-hmm.

1:37:52Dave Ramsey:Because I think George Camel spends somewhere around$1 ,400 a minute. I'm kidding. I made that up.

1:37:58Jade Warshaw:Well, George has more hair than Sam.

1:38:00Dave Ramsey:George Camel has, he's got serious hair. He does. And he works at it really hard. Yeah. I think the amount is not an abnormal amount that she's saying. That's what I was, because I don't have nothing to base it on, because I haven't been to a barber in 30 years. Yeah. So I don't know.

1:38:14Jade Warshaw:I don't think, I mean, what do you guys think, James? You're shaven.

1:38:18Dave Ramsey:James, you're well-coiffed.

1:38:20Jade Warshaw:I mean, I get my hair cut every five weeks and it's like 50 bucks maybe. 50 bucks. I don't know. Yeah. I do like a membership thing, so I don't know what it is every single time. So that being said, I think you could probably split the difference. I think you can go more than once a quarter, and I think that you can spend less than$110 a month. I think you could probably spend$60 or$70 and do it every month.

1:38:41Dave Ramsey:He is in California. Does that matter?

1:38:44Jade Warshaw:That might matter. He's having Esteban do his beard.

1:38:51Dave Ramsey:I can't tell if we're dealing with a ZZ Top beard here or what. But a smelly beard. I didn't run into that one.

1:38:58Jade Warshaw:You got to condition it with the oils. Yeah.

1:39:00Dave Ramsey:I didn't know.

1:39:02Jade Warshaw:If this is a point of contention, she's not digging what's going on there. Or you could shave the beard. That's half of the haircut. Go clean shaven and just do the top layer. You could do that. There's options here. I think you need to meet your wife halfway because, like he says, there are personal benefits, it sounds like, on the line. personal and professional. And for that reason, I'm going to say half the budget. What do you say?

1:39:35Dave Ramsey:The first thing that occurs to me is it's just not a lot of money we're talking about. No, it's not. And so, I mean...

1:39:41Jade Warshaw:Unless they don't make hardly any money.

1:39:43Dave Ramsey:Yeah, they live in California. So I don't know. I mean, it's not a lot of money difference. But I also see a lot of... I mean, you can get a haircut and have a professional image without going over the top. I suppose. I haven't ever done it, so I don't know.

1:40:00Jade Warshaw:I mean, he might be getting a really bad sports clips haircut for$40 once a quarter. And that can make you look...

1:40:09Dave Ramsey:Really? Unprofessional? Yeah, not the best. I guess they're not going to be a sponsor.

1:40:15Jade Warshaw:Sorry, sports clips. You know, when they accidentally cut off too much of your sideburns, it's not good. a bad haircut it's not blended yeah i you've never had a bad haircut so maybe you don't

1:40:32Dave Ramsey:yeah there's just so many things i could say they're not funny here but um

1:40:38Jade Warshaw:i would love to hear just one of them

1:40:42Dave Ramsey:i really i mean it's like the guy that called in the other day about hair replacement I missed that call. I'm not the guy to ask. Like hair plugs? Obviously, I did a pass on that one. And so, you know, I'm not the guy to ask. I'm not sympathetic or even empathetic. So this is so interesting.

1:41:03Jade Warshaw:Did they want to go into debt for the hair plugs?

1:41:05Dave Ramsey:No, we wanted to use the house down payment. Wow. That got a hard no. Yeah, yeah. I got to go back and listen to that one. House is better than shallow.

1:41:16Jade Warshaw:So the real discussion is if, I mean, there's a deeper discussion here. There's the money side of it. But then it's like if one of your spouses is saying that's an unattractive quality, I need you to do something about that. I feel like you need to run and run and fix that. What do you think?

1:41:35Dave Ramsey:Yeah. Yeah. I mean, that's why God sent you them. They take care of your blind spots. But yeah, but the thing that's bothering me, I - Is it the 110? It's cheap? No, no, it's this idea that somehow you can't get a good haircut except this one that makes you professional. And I'm just going, yeah, yeah, yeah.

1:42:00Jade Warshaw:Judging from the number, I think that he's probably getting the worst haircut you can get. And she's probably like, can you just go to a normal barber? Or do you have to go to the discount place? Can you just go and get a fine haircut? And can you just please get it done once a month, please? That's what I'm hearing.

1:42:20Dave Ramsey:I have no idea. Okay. He's like, it doesn't matter. I really just don't have anything to add that's intelligent. John is in Indianapolis. Hey, John, what's up? How's it going? Better than I deserve. Ask me something I know the answer to, please.

1:42:34Jade Warshaw:So I have completed Baby Steps 1 through 4. I'm on number 5. Good. Trying to figure out how much I should be contributing to the 529 account. I have$13 extra a month after my 15 % of my household income saved. so I'm really not clearing a bunch at the end.

1:43:04Dave Ramsey:Yeah, so you're really not putting anything in your 529. $13 a month is not going to do it.

1:43:10Jade Warshaw:How many children do you have?

1:43:12Dave Ramsey:Just one. Okay. What's your household income?

1:43:17Jade Warshaw:Single, 117.

1:43:18Dave Ramsey:Okay. All right. Yeah. Until some things shift around in your budget, you're probably just not starting your baby step five. That's okay. That's why it's after number four. four is first, five is second, six is next. I mean, that's why we have them in order. They're numbered that way for a reason and do them in that order. And you're not going to go the rest of your life and do nothing for college, but you may not be able to do something substantial for right now. And you can't open a mutual fund account for$13 a month. They don't have them. Right, right. So, yeah, I mean, that's just, if you want to pile that money in the corner or something and and have Junior a little piggy bank or something, that's okay.

1:44:00Jade Warshaw:How much do you need for a 529 account?

1:44:03Dave Ramsey:Well, I mean, what I would recommend people do, and I don't want you to do this too stringently today because you can't really do anything today, and we don't want you stressed out or anything, but if you wanted to actually have a mathematical target, you could just contact the University of Indiana, your state school, right, and say, or whatever, in-state school tuition, which is usually going to be right now in the 10, 12 grand range, something like that, plus room and board, times four. And so, okay, that's our target. And we've got a lot of years to get there, so we will be accruing some gains on the mutual funds, some interest, so to speak.

1:44:49Dave Ramsey:And so I don't have to have that much in actual dollars because some of it's going to be growth, and I'm going to put it in a 529. And then you could sit down with your SmartVestor Pro and figure out what per month you need to do to hit that target. But you don't have to worry about that today. You can't do it today.

1:45:24Jade Warshaw:Hey guys, George Camel here. You ever feel like you make good money and still have nothing to show for it? You run into Target for one thing and somehow walk out$87 later with toothpaste and emotional support candles? Just me? Okay. Well, that's the problem. Most people don't pay attention to how they spend their money, so it does whatever it wants. And that's why we created EveryDollar. It's a budgeting app that helps you create a simple plan for your money. EveryDollar's simple, it's clear, and it helps track where your money's actually going. Plus, you get daily lessons, to-dos, and reminders along the way.

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1:47:03Dave Ramsey:It's completely free. Take the free coverage checkup and find out if you've got the protection you need. Ramseysolutions.com slash checkup. Kristen is in Connecticut. Hi, Kristen. How are you?

1:47:17Jade Warshaw:Hi. Oh, my goodness gracious. Thank you all so much for taking my call.

1:47:21Dave Ramsey:Thank you. What's up?

1:47:23Jade Warshaw:So I am looking for advice. My husband and I, we were on baby step number two, working on three, and now we're back to number one. My husband is in sales, and that occupation requires work expenses to be paid up front, like out of our pocket. It does get reimbursed, but it takes a month. So my ask is, how do you recommend taking my husband and I's personal income, our family expenses, and separating it from his work expenses in addition without using credit cards?

1:47:57Dave Ramsey:What does the monthly expense run?

1:48:04Jade Warshaw:It can range because it really depends if he travels or not, which he travels a couple times a month. So the expenses...

1:48:13Dave Ramsey:In a month, it takes a month for it to come back. What does he spend?

1:48:21Jade Warshaw:Between, I would say between$3 ,000. Okay. All right.

1:48:26Dave Ramsey:And what's your household income?

1:48:30Jade Warshaw:Our combined is$374.

1:48:33Dave Ramsey:And why is$3 ,000 a problem?

1:48:38Jade Warshaw:Out of$30 ,000 a month. $3 ,000 to$6 ,000. Well, we are investing a lot. We do have a lot of bills. But, like, for example, I would say, like, an Uber. Last month, Uber was$800. And we have client dinners. That's$3 ,000 out of$30 ,000.

1:49:00Dave Ramsey:Why is that a problem?

1:49:02Jade Warshaw:Even if it were six.

1:49:07Dave Ramsey:You're spending a lot on other stuff. Yes.

1:49:12Jade Warshaw:A lot. I mean, there's a lot spent on restaurants. Right, but all it takes, Kristen, is for one month for you guys to set that$6 ,000 aside.

1:49:25Dave Ramsey:Put$5 ,000 in on a separate checking account and put a debit card on it and spend it down. Turn in the receipts. They give you$5 ,000 back from the company. They put the$5 ,000 back in that account. Spend it down. Turn in the receipts. They give you$5 ,000 back from the company. You put it in that account. All you got to do is fund it one time and prime the pump.

1:49:41Jade Warshaw:And then it recycles.

1:49:43Dave Ramsey:But you're acting like him being on the road and having expenses is your household problem. It's not. You have$30 ,000 a month coming in, and you've put a bullseye on this$3 ,000. Like, it's the problem. It's not. You guys got other problems. You're spending like you're in Congress at home.

1:50:02Jade Warshaw:We don't have$30 ,000 coming in. That's$360 ,000. It's because you're investing a ton. I get it. How much are you investing? Yeah, we're investing just about total like 15, oh, sorry,

1:50:24Jade Warshaw:10, oh, I have here 11%.

1:50:28Dave Ramsey:Okay, 11%.

1:50:30Jade Warshaw:Between our LERP, two IRAs, a LERP, a 529, two 401ks. Then I still don't think that's even the problem. I think the problem is exactly what Dave said.

1:50:40Dave Ramsey:That's$3 ,000 a month.

1:50:42Jade Warshaw:Uh-huh. I think you guys are just spending without a plan, and we'd love to give you a plan because I wish that you were investing 15%. How much debt do you guys have? So our credit cards are$10 ,000. I do have a student loan of about$90 ,000, and our daycare is$2 ,500 a month. The real kicker is our mortgage.

1:51:11Dave Ramsey:How much is your mortgage?

1:51:12Jade Warshaw:Trying to get around that.

1:51:13Dave Ramsey:How much is your mortgage?

1:51:14Jade Warshaw:$10 ,000 a month. How long have you been making this kind of money? Is this new for you or have you guys been earning like this for a while? It is new. He got promoted a year ago and then in January I got promoted. So I'm making an extra$13 ,000. So it wasn't always like this, but I think having a second checking account is a great idea. I would like to try that. When did you get the mortgage?

1:51:44Dave Ramsey:You won't do anything to keep from facing the fact that you have a$10 ,000 mortgage that you can't afford. You worked really, really hard in this conversation to never bring that up.

1:51:56Jade Warshaw:Is that new? Did that happen after the promotions or did you have that before? So we had it before because we knew we were getting the promotions. But we can't sell the house until we've been here two years because we pay capital gains tax. Has it gone up that much in value? What's it gone up in value? I think it's projecting$100 ,000 a year. So we put$250K down, and we're looking at getting about that in return. Yeah, so there's no capital gains because there's no gain. Yeah, not right now. So you don't have to worry about that. So you don't have to worry about capital gains.

1:52:38Dave Ramsey:That's a false flag, too.

1:52:40Jade Warshaw:Oh, so we don't have to.

1:52:42Dave Ramsey:If you don't have a gain, you don't have capital gains tax.

1:52:48Okay.

1:52:49Jade Warshaw:Here's what I think. I think you guys have gotten way, way, way, way, way, way, way too comfortable and way, way, way, way, way too sloppy. And I think it's coming back to bite you in the butt. And what a shame because you make such good money, but you're not able to fully experience it because you guys have gotten so sloppy and you're just adding more and more to this mess.

1:53:11Dave Ramsey:Yeah. So here's what I would say, okay? Mathematically, his expense account is not your problem. Mathematically, because it's$3 ,000. dollars. Okay. Mathematically, 11 % going into investments is not that much. It's only$3 ,000. That's only$6 ,000 between the two. So you can cover both of those with$3 ,000,$3 ,000. And so those really aren't the issue, but they're all, but they're straining or they're exposing a budget that is desperately strained by a house payment that you probably can't afford. So here's what I would try. I assume you like the house, right?

1:53:54Jade Warshaw:The dream house.

1:53:56Dave Ramsey:Okay. Well, turn into a nightmare, but let's leave that to the set. Okay. I have been in sales my whole life. I grew up in a salesman's household. and for a long, long time as a salesman, I really thought, I didn't think this intellectually, but I acted as if I thought that I could out-earn my bad decisions, out-earn my stupidity. And so salesmen have a tendency to think that because salesmen are glass half full people. They're optimists. I'll go knock another deal down. We'll be just fine, honey. and this guy's obviously a very good salesman. He's even sold himself on getting into this mess but that salesmen have a tendency to those of us that are good at it and I'm in the same bucket that's how I can smell it.

1:54:50Dave Ramsey:We have a tendency to try to out earn our own stupidity. So what I want you to do is I want you guys to get on a very very tight budget. Stop your investing for a minute. get the$5 ,000 in a separate account on the debit card so you can control the business expenses. And then we don't have arguments over$800 Uber or dinner out with clients because he's closing deals. And he needs to do the$800 Uber and he needs to go out with dinner on clients because that's what's causing all this money to come in. And so we need to protect that. But we need to not spend the expense money on anything except business reimbursable expenses.

1:55:30Dave Ramsey:we need to stop investing temporarily, get the budget under control in detail, and see if you can afford to keep this house. I think you're going to find you can't keep it, but I want you to try to keep it first.

1:56:00Thank you.

1:56:07Dave Ramsey:You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com slash insurance.

1:56:55Dave Ramsey:Our scripture of the day, Proverbs 16, 28, a troublemaker plants seeds of strife. Gossip separates the best of friends. Teddy Roosevelt said, if you could kick the person in the pants responsible for most of your trouble, you wouldn't sit for a month.

1:57:12Jade Warshaw:Oh, wow. Plot twist.

1:57:18Dave Ramsey:You gotta love Teddy Roosevelt. Donald in Boston, what's up? Good afternoon, Dave. Afternoon. How can we help? Well, I'm 57. My wife's 64, and she wants to retire. in three years. And I do not have a financial advisor, and I'm worried about running out of money. So I've been looking around, and I ran into somebody who wants to sell me an annuity, which doesn't sound like the best idea. So I thought I would touch base and see what your thoughts on it were. Okay. You did not find a financial advisor. You found a life insurance agent that called himself a financial advisor. Because the typical financial advisor will not sell you an annuity except in very rare circumstances.

1:58:05Dave Ramsey:They're not super bad, but they're not super good. It's the only way a life insurance agent that doesn't have a securities license can get you into a mutual fund is through a variable annuity. And so they use that. So no, don't do that and don't use that guy. So talk about your situation. How much money do you guys have saved now? Well, in 401ks and IRAs, we have about$950 ,000. Way to go, millionaire! um not there yet that's awesome you are there i mean you own some other stuff more than that so you've got a million dollar net worth i'm proud of you what's your house worth uh maybe 550 it's paid off and it's paid off so there's your million four net worth million six net worth yeah way to go man proud of you y 'all start with nothing um yeah we were we brought up poor but i didn't discover you till 10 years ago when i was buried in debt and i owe pretty much my debt-free lifestyle to you actually so you did this whole thing in 10 years from 45 to 55 or 57 way to go man i'm proud of you so no hey man you got plenty money you don't you stay away from an annuity you simply need to get these 401ks all set up and your your huge nest egg set up to work for you now instead of you working for it you spent the last 10 years scratching and clawing and working to build it and now it's time for it to work for you So get online at Ramsey Solutions and get to a SmartVestor Pro and sit down and look at them and say, teach me.

1:59:36Dave Ramsey:Until I learn, I do nothing. So teach me. That's their job is to teach you. And once you understand it enough to explain it back to them or back to me, then you're ready to do some more investing and to move some of this stuff around and get it to working in your favor. You got plenty of time. So let me give you an example. Your wife wants to work how long? Three more years? Well, she'd quit today if she could, but I don't think we have the money.

2:00:05Jade Warshaw:What'd she earn?

2:00:08Dave Ramsey:She earns$60 ,000. What do you earn? $175 ,000, but that's new as of three years ago. Well, I mean, if she quit, why can't she live on$175 ,000? We could, but again, not understanding how much money I have. Oh, you're saying you don't have enough money in the nest egg. I'm thinking that we're going to run out of money when we're 85. You're not. You're not. You're not. Let's walk through it, okay? You're in great shape. Here's some numbers for you. Number one, I want you to go on Ramsey Solutions and pull up the Ramsey Calculator Retirement and look at it and start running some numbers back and forth to get your head around this, okay?

2:00:45Dave Ramsey:But here's a couple of things you can remember. Is your 401K and your retirement invested in good mutual funds? uh yeah like we teach yeah i don't okay so if they're averaging 10 percent that million dollars will double in seven years you'll be 64 you'll have two million dollars if you don't touch it between now and then okay and in and when you're 71 if you haven't touched it still which is not likely you will have touched some of it but when you're 71 the two million will be four million without adding anything to it that's what it'll do double every seven years if you're averaging 10 a lump sum will okay that's the math now if that's happening well you're roughly gonna have two million dollars to work with because you're gonna live on if you live on 175 between now and the time you're 64 you're gonna or 65 you're gonna uh and then you retire um you know, and you can do that easy, you're going to have$2 million sitting there waiting on you, plus whatever you add to it between now and then.

2:01:53Dave Ramsey:So you probably have$2,$2.5 million, okay? Now, if you pull off 10 % a year off of$2.5 million, that's$250 ,000 a year. Okay. If you pulled off half of that, that's$100 ,25 a year.

2:02:14Jade Warshaw:And you're not even touching the... And it's still growing.

2:02:18Dave Ramsey:If it's invested and it's making 10 % or 12%, and you're only pulling off 5 % or 6%, 7 % to get back to the$150 ,000, you're not even touching the money. You're only pulling off the growth. Does that make sense? It makes a lot of sense. So it's more thinking that you're going to tell me I was in trouble. No, you're not in trouble. You've done very well, my friend. You're a millionaire. I'm so proud of you. I'm so happy the stuff we taught you worked. I knew it did, but I'm just so happy it worked for you. So you're just awesome, man. You're one of Baby Steps millionaires. You're one of America's success stories.

2:02:56Dave Ramsey:You're proof that we can do it still. And you're proof that the communist college professor that's teaching people the socialism works is wrong. Okay? And so you're the guy, man. You did it. I'm so proud of you. So just keep being the proof. So you're going to have$2,$2.5 million if she quits the day and you all live on$175 ,000 and you keep adding a little bit to your 401k and you sit down with your SmartVestor Pro. And then if you want to live off of 5%, that's going to be$10.25. If you want to live off of 8 % and it's growing at 10 or 12, it's still growing. You're not even touching it. So this runs to the point that you make this amount of money the rest of your entire life, and you still leave two and a half million dollars to your heirs because you never even touched the goose.

2:03:45Dave Ramsey:You only lived off the golden eggs. And if you leave the principle alone and live off the income that it creates or some of the income that it creates, it runs in perpetuation to infinity and beyond, as Buzz Lightyear said, right? And that's it. So it just keeps going. mathematically. So just have a big enough nest egg that you can live off of some of the income that it's creating and you'll be just fine.

2:04:12Jade Warshaw:Love that. That's so exciting.

2:04:14Dave Ramsey:That's amazing. This is what happens when you get out of debt at 45 years old and tear into this. Of course, they're making two and a quarter between them.

2:04:24Jade Warshaw:Yeah.

2:04:24Dave Ramsey:They're kicking it. I mean, when you have

2:04:26Jade Warshaw:no debt and no house payment, that number that you need to pull off goes way down.

2:04:32Dave Ramsey:Boom. right boom way to go donald you inspired me today sir yeah that's it so that's what you're looking for so a good rule of thumb is if you can put it in the at the market is average 11.8 percent okay and so if you leave four percent in for inflation so it's growing you're not only not touching your nest egg but it's growing by four percent a year and you pulled off eight that's about the most you should do. And so per million dollars, that's$80 ,000 a year. So if you got two million bucks, that's$160 ,000 a year, if you did that. Okay. And in his case, that's about right. You know, 120, 160, somewhere in there without, you know, he's got continuous to grow by inflation.

2:05:21Dave Ramsey:So by the way, his 160 next year is going to go up because the balance has gone up and he's living off a percentage of it. So it's 164 and then it's 169. And so every year as inflation kicks, you're leaving 4 % alone, which by the way, if you go back and look at the CPI, the Consumer Price Index, which is the measure of inflation, you will see over the last 100 years or so, it's averaged right around 4.2%. I know Biden had 9.7, but we've had other years it was 3. It's averaged about 4.2%. I know Jimmy Carter had 10%. had, but Ronald Reagan had four. Okay. And so you can argue about who, what, when, where, but go back, just look at the numbers.

2:06:01Dave Ramsey:They're right there in the historical data. And you know, it's not a political math is not political. Very good. Donald score, baby. I love it. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:37We'll see you next time.