Stop Letting Excuses Keep You Broke

22:41Jade Warshaw:So we're both doing 15 % 401k through work. We take home 5 ,800 every two weeks combined between the two of us. So around like 11.5k a month. And so of that right now, we're targeting 3 ,000 for the house and then 450 or so for 529 for our son who turns two in a couple months. Um, we want to have another, yeah, for the, for the 529. Yeah. Um, yeah, so those, but we, we keep chafing kind of against it. And I'm wondering, is that just because that number is really high and we should keep fighting for it? Shoot from the moon, you land amongst the stars or should we try to pull back somewhere else?

23:25450 is a lot.

23:26Jade Warshaw:I feel like that's kind of a lot. And also it all depends on how quick, the problem we're solving for is how quickly do we want this home? So I think that's the guiding principle here. I agree with John, 450 is a lot. I mean, it depends on how long you plan on doing that. What's your target amount? All of those questions I would ask, but I think first things first is making sure we're not focused in the wrong area. And I really do think the house needs to kind of wag the tail here. Let me ask you this, dude. You talked about some of the people you listen to on the show, and some people are very aggressive.

24:07Once you don't owe anybody any money, we're talking about building wealth so that when you get in your 60s, 70s, and 80s, and 90s, and maybe even beyond by the time we all get there, that you, because you were diligent when you were younger, you're able to take care of yourself and your family in those years, right? As my buddy Arthur Brooks says, we way over index our 20s and 30s and we forget about our 40s, 50s, 60s, 70s, 80s, and 90s, right? So the question that people have to ask themselves after they're out of debt is what kind of life do I want to have? And I want you to own a home so that nobody can come in there and take it away from you.

24:50So that come what may, me and my family have a house. We have a place that we can put a flag on front of. I want you to have some retirement savings. I want you guys to have some fun too. I want your kid to be able to go to school, whatever that looks like. I don't know if he's going to have some college robot teaching your child. Like, who knows, right? But the question you and your wife have to ask yourself is what kind of life do we want? And I'll tell you, there starts to get some variance in there. In my house, I have, I'll call it pathological, a psychological problem with owing people money.

25:20I don't sleep. It keeps me up. I spin out all the time. And so for me and my wife, there was, I'll call it a panic on my part. She's like a walking Xanax for me. And so it was much more intentional on her part, but we focused on getting a house and getting a smaller house than we could have qualified for from a mortgage standpoint and we got it paid off as quickly as we could so that I could have some peace because I was solving for peace, right? And so you and your wife asking each other, what kind of life do we want to create together? And then you're talking just math problems at that point.

25:51Jade Warshaw:Yeah. And let's run out some of those numbers. Let's run out the math that plays next to what John is saying. So if you say, hey, we're going to get a house in the area, what's that cost you? What's that look like? Dollars wise. So in, yeah, in D.C., I mean, you know, the county that I grew up in in Maryland, I mean, you can't you can't sneeze in there without spending half a half a million bucks. I mean, it just it's gotten crazy expensive. So like looking out, you know, you can you can find, you know, four hundred, five hundred thousand dollars if you're willing to drive a little bit to work.

26:24Jade Warshaw:You know, some of these details are kind of hard to forecast because there's career changes involved in making this happen. Right. Sure. but let me let me let me call this out you and i were told a lie you and i were told if we just go to school and or and or we just get a good job and if we get a good ride or die spouse that we can live wherever we want we can quote unquote follow our passions at this work job thing and it would all work out and that's not true the truth is you me jade our families everyone listening to this has to make uncomfortable choices. Do you want to go back and live where you grew up, where you were raised?

27:08You have this picture of your head of the perfect childhood. That's amazing. Here's the math problem associated with that. And if that math problem costs you the life you want to have, going out to dinner, going to concerts, being silly, like buying your kid the nice basketball shoes if they mix a team, like those kinds of things, then we're going to have to be sad and grieve the fact that we can't do everything that we, what we want because the world didn't hand itself to us. You get what I'm saying?

27:36Jade Warshaw:I hear that. And part of our calculus for trying to move out there is we're basically alone here in terms of, we have a, you know, we obviously have a son. Sure. We want to, we want another child and we just, we don't have really any help out here. I totally, I can be around family. I get that. I can get that. Yeah. Well, let's put our, let's put our heads around the numbers and then that'll help you make the choice on this because if you say, hey, we're in baby step three, right now you guys are investing 15 % and you're saving$3 ,000 a month. But if I plug in, and I'm just on the Ramsey Mortgage Calculator, you said in the DC area, it's around half a million, so$500 ,000.

28:11Jade Warshaw:If I plug in current 15-year fixed rate interest rate, 5.9, let's say you get that. And I know this is in the future, so I'm just, this is napkin math, okay? But in order for that to be a fair portion, 25 % of your $11 ,500 income, that mortgage with everything all built in, HOAs, home insurance, taxes, insurance, it can really be no more than$2 ,800,$2 ,700 a month,$2 ,900 on the highest, right? So if I am solving for that, you're going to have to put down at least$230 ,000 to$240 ,000. Right now, we're saving at a rate of$36 ,000 a year. So taking that data, we can say, okay, if we want to do this, if we're serious about doing this in the next, I don't know, three to four years, we've got to be serious about saving more.

29:00Jade Warshaw:So I would be okay with you backing down the 15 % that you're investing for the next three years even. I wouldn't surpass three years because I don't want you to miss out on time in the market. But do you see what I'm doing there? Yeah, I really hadn't thought to touch that. And we do have about$55 ,000 towards this in a specific account. Good. And then I do have 125 ,000 in a managed brokerage that I'm hoping not to touch. You're burying the lead. You're there. Start with that next time you call. You have it. You're away. Look, ask Ramsey told me to try to avoid touching it. I get it. Hey, don't let that let that become generational and see if you can get there without it.

29:44Jade Warshaw:It's just in the brokerage. It's not retirement. I thought that was weird. It is. It's not broker. Sorry, it is not retirement. Yeah. As long as it's non-retirement money, I totally would be interested in touching that for this reason, because this is a mate. Owning a home is a major part of building wealth. And so for that reason, it's not like we're sacrificing wealth building in that way. Did you put in there, I want to buy a house and I put down 15 % in retirement and. This thing knows my life story. Well, then that's a glitch in the matrix that I got to get. I got to get with the team and we got to get that fixed because yeah, if you said, I have this money in a brokerage account.

30:20I'd say, yeah, don't touch it if you can avoid it. But if you want to buy a house, that's what that money's for. That's exactly what that money's for.

30:26Jade Warshaw:Yeah. So if you pulled back even for a year and made that 36 ,000, I don't know, 50 ,000, you're there in two years.

30:38Right.

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32:22All right, let's go out to Roanoke, Virginia and talk to Chris. Hey, Chris, what's up, man? Hey, how are you guys? We're doing great. How about you?

32:32Jade Warshaw:Good. I really appreciate you. I'm a big fan. The term salt for peace has changed my life and I's view on finances. That's awesome. Thanks for doing that again. You got it, brother. Yep. So our question, my wife and I make about$200 to$250 a year, and we own five homes. They all have mortgages. I thought you were solving for peace, dude. That's a lot of houses. Yeah, I know. That's why I'm calling you, bro. Okay, gotcha. So our primary residence has$290 on the mortgage, and then our rentals have$91,$95,$125, and$139. We have$250 grand in cash. Do you snowball the rentals or do you pay off your primary?

33:13Jade Warshaw:Well, I am interested in paying off the primary. I want to know what each of these, you told me what you owe. I'd love to know. Can you go through and say what they're worth? Sure. The 91 is worth about$150. The 95 is worth about$150. The 139 is worth about$200. And the 125 is worth about$160. And is there one of them that is a pain in the butt that you, like, tell me which ones that you're like, If I had to sell, it'd be these ones, and here's why. Yep. So the$125, we would sell because it's an HOA. I made a lot of mistakes over my life. I'm a real estate professional, and we've narrowed it down to just seeing family homes.

33:51Jade Warshaw:That's what we're good at. So the$91, the$95, and the$139, we're going to keep, but the$125, I would sell. Okay. And so there's$75 in equity there. Maybe when everything's all said and done, what do you think you'd take home? um on the 125 if we sold it you probably only take 30k home okay 160 okay and so that gets you with the cash 250 that gets you pretty close to what you owe on the primary yes correct even about 10k short okay so is that what we're trying to solve for is just getting that primary paid off would that be enough for you and then cash flow and the rest to pay off We went back and forth so many times doing this, my wife and I, on whether it's do you pay off your primary residence or do you pay off the rentals and leave and get better cash flow on them?

34:41Jade Warshaw:So ultimately, they're all going to be paid off anyway. We're not buying anymore until we get to that point. But you have this huge chunk of money right now. Yeah. And let me tell you, nobody, my renters are not going to be paying, living in a paid off house while I live in a house with a mortgage. I could tell you that right now. You know what I'm saying? My wife would appreciate that. Yeah, like you guys are the ones working hard. All day, every day, I want my primary mortgage paid off. Here's why. And this is just life experience. Whenever the stuff hits the fan, right? When there's a diagnosis, when there's, not to say that there'll ever be a COVID ever again, but you know what I'm saying.

35:19Jade Warshaw:When somebody loses their job, when things shift and change, the number one thing that people want to protect, John, is their house. That's the number one thing they look at is they go, oh my gosh, as long as my house is secure, I don't want anything to make me have to give up my mortgage, no foreclosure, right? That's the scariest thing that we can imagine is the place where we lay our head to be in jeopardy. And so that's why I say what I say, which is take this cash and pay your house off first. And do you have, I'm assuming you have a fully funded emergency fund, right? Yeah, we do. About 30 grand is six, seven months.

35:54with the having five houses or four houses right now hopefully you'll sell one of them and you'll have three house or yes four houses left um yep i'll just i i'm biased right now i seem to tell you i had a day a week ago where i got it before work i took one vehicle with one of family members to one shop i took another vehicle to another shop and had another family member drive me back. My primary air conditioner in my house went out. My well wasn't working. So the house had no water in it. And it all happened on the same day. And after I've unwound all of that, just let me tell you, it's very, very expensive.

36:41So you've got that times three, three or four. And so your emergency fund, I would want to hang on to some more cash because you're, you've got a, unless you've got retained earnings on each one of these uh rental houses which i doubt you do i mean if the air conditioner goes out on these things you got to pay for it right

37:00Jade Warshaw:right yeah well that brings me to the next point like you paying off your first mortgage that was thing one but the next step that i would take because i'm i'm all with john on solving for peace is now i'm looking at mortgage number two number three and number five and i'm going okay amongst these, is there one that I can sell to make good on the other properties? Because my goal would be to have as many of these paid for as possible, as quickly as possible, even if that means letting one go. Because again, we're cutting down on the risk. And I know what it is that you're trying to do, but you do have a lot of risk right now.

37:39Jade Warshaw:So my question to you is, really, how well are these cash flowing? They break even at best. realistically the um oh yeah i mean after the mortgage you gotta figure you set aside for your expenses and we do have retained earnings for things like that that happen in the business yeah how much um the only one about 40 grand i just don't know that these are a success i think they're just something you have listen the only one we are absolutely opposed to selling would be the one for 139 so ultimately if tenants leave you know it's more difficult to sell property with tenant in it if tenant leaves, we're not opposed to selling the 91 or the 95 either.

38:19Jade Warshaw:And I love that. I actually think that's really good. This is what came to my mind when you told me this. I bought a pair of jeans and they were expensive, but they didn't fit. I put on too much weight and I didn't get rid of them because I spent over a hundred dollars on them. And I felt like I needed to keep them, even though they're of no use to me. They don't make me feel better about my life. And every time I go in the closet, I'm like, come in. And that's the way these properties are. It's like you bought them. They're not cash flowing. They're a pain in the butt. They're keeping you from paying off your current mortgage.

38:55Jade Warshaw:Just accept it and end it. Toss out the jeans. You're one of me a week ago from having one air conditioner, a roof on another, and then somebody trip on a driveway. And this whole house of cards you built up is over. Like you're in a mess. You know what I mean? and so going back to the salt for peace here's a fun and again like I'll tell you my friends who are in the banking industry laugh at me because they tell me I'm too risk averse whatever well they'll actually say like how do you stage dive off of a stage at a punk rock show but you won't even do like right so I'm risk averse on some things but not on others but here's the thing I want you and your wife to just imagine you don't know anybody for your primary house It's yours.

39:40You don't owe anybody on this one mortgage or maybe two on these other two houses. And you don't owe anybody anything. And so you're making 230, 240 a year. And 100 % of that is your money minus what the government takes. Is that going to give you the exhale that you're looking for in your own home? Do you get what I'm saying? Will that take the edge off the electricity of the angst of what about this and did you get this and hey this guy called and what is there just this motion this notion of like we got peace in our house now and some people like the electricity in their house man that's how they choose to live and i'm not their guy but but good good on them dude i got friends like that but like you said when you when you first called like as for me and my house dude i love owning properties i've got properties i like them but i just don't want worry about them.

40:33So you're saying, so pay off the primary and then sell these as the tenants

40:36Jade Warshaw:leave until you just know that anymore. And I would roll that equity. Jade, I'd probably baby step to these because these are big debts you have outstanding here. So yeah, I would sell what I could and reverse engineer it until I've paid off the remaining three or the remaining two or the remaining one if I have to. And then I would take that cashflow and start building them back up. You're not buying$600 ,000 properties. And so it would take you another year or year and a half to save up another$150 ,000 to buy another one of these houses, right? Yeah. So with the money that we have now, pay off the primary.

41:10Jade Warshaw:Then go back to Snowball. And sell them when they come up. And I would go ahead and sell number four since you identified that right off the bat. I'd go ahead and do that as quickly as possible. Yeah. Pay off the primary. And then, like you said, as those leases go up, knock them out one by one. sell them off. I appreciate y 'all. So I got to know who won, you or your wife? Oh, we were on the same page. We both wanted it. We both wanted to pay the house off. Good. Absolutely. All right. Good deal. Look at me and Jade bringing families together. Look at this. Usually, Jade, it's one or the other, but I like a united family every now and then.

41:44Jade Warshaw:This guy's a smart guy. Yeah. Well, and what I love about him is he's really smart. And then he got all, he did all the smart things that smart people tell you you're supposed to do? And then he heard the message. What if I felt different though? And if I'm doing all the right things, why doesn't my home feel more at peace? And he's going to solve for peace.

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43:31Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm John Deloney, joined by Jade Warshaw. Let's go out to Minneapolis, Minnesota and talk to the great and powerful Laura. Hey, Laura, what's up?

43:45Jade Warshaw:Hi, guys. So my question is, I have three kids. We are currently in baby step number two. We use the EveryDollar app and we budget for what we call Adventure Day. A couple of times a month, our kids still get fun memories, just in a smaller, more intentional way while we're still paying out debt. And my question is about teaching contentment and financial responsibility at young ages. I have a five-year-old who especially notices when his cousins get really big, extravagant gifts, and he doesn't understand why we don't do those things right now. He will be heading into kindergarten this fall, and he'll see even more kids with more experiences and things that he doesn't have.

44:29Jade Warshaw:And so my question is, what are some age-appropriate conversations or ways that we can talk about money, comparison, and contentment so that he understands why we're choosing to be responsible and that he's not missing out while we still work on baby step number two? Okay, so I'm going to reframe a lot of this. Is that okay? Yes. So he is missing out. and contentment is a lifelong journey that I would never, it's not developmentally appropriate for a five-year-old to have the understanding of contentment and innate joy when I've got used shoes and my cousin just showed up here with rocket shoes, right?

45:15And he is missing out because that kid's got rocket shoes and he doesn't. And so instead of trying to shift his, you should be, you should be feeling this way instead of what your body's telling you, sit with them in that frustration. Because you probably know, you probably have friends and family members that have a nicer car or newer clothes, et cetera. And you know how that feels too. And so it's not about taking a five-year-old and trying to disassociate them from their body, from their own feelings. It's showing your five-year-old, six-year-old, 10-year-old, I'm not scared of your feelings and I'll sit in them with you.

45:54Do you get the difference there?

45:57Jade Warshaw:Yes. And so a conversation we have a lot at our house is like when we go to Dave Ramsey's lake house, Dave has us all out once a year and we all go ride the jet skis and do all the wild stuff and then we'll come home. And my son was with us during the days when we were trying to figure out how to keep the lights on. But my daughter doesn't have that lived experience. And she's like, dad, why don't we have a lake house? Can we get jet skis? And so we have the conversation, like, as for our family, this is how we do life. And we're so blessed to have friends that have this cool stuff. And that doesn't mean that she doesn't want a lake house.

46:31And that doesn't mean that she doesn't think her dad's cheap. And that, you know, she's allowed to have those thoughts. She's 10, right? But the conversation always comes back to, as for our family, here's what we do. and you have to be able to hold that space when your kid gets frustrated with you and they get mad at you why can't i have this and why can't they're not going to understand complexities of budget when they're five six seven eight nine ten um they will understand mom and dad hold firm and they still love me you get that where i see most parents struggle here is it begins like you want to be able to give your kid nice stuff right you want to be able to give your kid some of these things and then you start feeling less than so it's you being able to hold your own like no we're making the right decision for our family now and into the future yes i love that mindset shift but yeah i i always want to caution parents when kids have big feelings and when they get when they get really sad really mad or really frustrated it's easy to a treat them like an adult don't talk to me like that or you shouldn't, whatever.

47:38And it's also easy to turn into a moral issue or a character issue. I like to look at it as a tools issue. This kid's feeling big kind of ways and they don't have the toolkit yet. So my job is to give them the tools. And that tool comes from, I'll sit right here with you. And by the way, not every behavior is acceptable. You can't talk to me like that. You can't throw things. You can't break things, but your feelings are fine. I'll sit here with you and i'll tell you man it's i jay don't know if i hate it i hate it when my son or daughter's upset with me i still don't like it you know what i mean yeah but it's my job to sit in it with them

48:16i feel that yes i hate that feeling as well yeah can i tell you i'm proud of you thank you for putting a stick in the like like just planting a flag in the ground and saying And as of now, we're going to weather this storm because the future is worth it. Y 'all are worth it in the future.

48:37Jade Warshaw:And that's really the only tool that I have that I keep repeating. And I just feel like I keep repeating that and telling him, like, not today, but someday. We will get there. Someday for a kid is abstract. Yes. It's why Christmas feels like a thousand years for a five-year-old, and it feels like 30 minutes for me. I feel like I was just buying Christmas presents, right? And we're already entering into the fall season here, right? Summer's almost over. Can I also float out there that part of this, though, kids want whatever it is that they don't have. Yeah. It doesn't even have to be a money or a standard of living thing.

49:18Jade Warshaw:my kids uh i introduced them to original nintendo because i had one in the attic and i was like i'm gonna see if they like playing they love it it's so it's so old but they were already arguing about who got the controllers and it's not fair that he gets to play more and it's unfair that right and it's it's an old game but it's just because somebody else had it that now they want it and that's developmentally appropriate yeah for young kids i think it probably has less to do with lifestyle than it does to do with it's just a thing I want and don't have. And I think because adults understand what money can get and not get, we make it more about lifestyle.

49:58Jade Warshaw:Exactly. Yeah. And so I would probably back off not today, but one day, because you're confirming we're less than now, but one day we won't be less than. And maybe shift the conversation to, yeah, they've got, they got, they got a cool four-wheeler and maybe when we get to go visit and we can ride on that four-wheeler. But our family, we like to go on walks. And we like to go fishing. And we like to do, I love how intentional you are with your kids. They're going to get special laser beam time from their mom and dad. I promise you, for their nervous system, for their brains, for their relationships down the road, you're putting in some major deposits in their relational bank accounts.

50:44Yeah. You still there?

50:46Jade Warshaw:I'm so yes thank you so much she was letting it marinate she was letting it sink in are you tearing up hey we're on your team I'm so proud of you I can hardly even it's amazing what you're doing for your family thank you so much you betcha Jade I'm still haunted by that hey dad can I have this and it's like nah and it's harder now that I could and I'm choosing not to. Yeah, that's true. Because it's not a part of a value set or it's because we don't need anything new or I don't know. I don't know. And I'm just going to say this just in the spirit of being old school because I feel like I'm getting older and older.

51:29Jade Warshaw:When I was a kid, we didn't get nearly this kind of treatment. It was just like my dad would just be like, we ain't got no money. And that was that. And we just adapted. So on the one hand, I get it. And on the other hand, I'm like, they'll be strong. They'll be fine. fine especially for parents and baby step two you can't buy them all the stuff you can't buy them all the fancy birthday parties whatever but what laura's doing but i will give you a half a day of directed time that if i got it it's magic magic way more important than any old plastic trinket you can buy

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53:34All right, let's go out to New Orleans, Louisiana, and talk to Desiree. Hey, Desiree, what's up?

53:41Jade Warshaw:Thank you all so much for taking my call. Yeah, thanks for calling in. What's going on? So my husband and I need to get a new car, and we're debating between getting a$10 ,000 older vehicle or a$25 ,000 newer used car. We currently have both would be paid for in cash, either option. We have another vehicle that has 130 ,000 miles on it, and my husband drives, he commutes for work, and so he puts about 27 ,000 miles on a car per year. And so I'm expecting the current car that we have to go out within the next like three to five years. Why? And so I'm kind of aware. You're talking to two people that drive their cars into the dirt.

54:29Jade Warshaw:Is it like a Ford Fusion or something? No, I mean, it is a Toyota. Is it a square Kia? A Toyota? It hasn't even started yet. It is, but I guess I did the math, and I was just thinking, like, with it at$130 ,000. Oh, no. That Toyota's going to last longer than y 'all. Yeah. Okay. Yeah, buckle up on that one. Y 'all have the cash to pay for it. Do y 'all have an emergency fund? We do, yes. So we have a$40 ,000 emergency fund outside of – so we have$28 ,000 saved in addition to our$40 ,000 emergency fund. Good. Um, so, so what's the, if we were to go, y 'all have the money, y 'all have the cash. What do you, what's the, what's the congestion in your heart over this decision?

55:14Jade Warshaw:I guess my big, we've always had a larger emergency fund. And so it bringing us down to like what I would consider our true emergency fund is. The 40 ,000? And so, yeah, yeah. Understood. And then if this car were to go out or, I don't know, something were to happen, I would have to actually pull from. Where else? Where else? And this is the pot talking to the kettle here. Give me another thing totally not money related where you're anxious about a future thing happening.

55:54Jade Warshaw:Not money related? Yep. Thank you. I don't know. I guess. Are you a worrier? No, I don't think so. I think it really just comes down to having the financial. We're not able to save as much as we used to. So we have two kids now. And so we still save, but there are months where we don't. And I mean, we're budgeters. But if you use some of this$40 ,000, it's going to take you a while to build it back up again. And you don't want to do that. Yes. I get it. Yes, I think that's that. So if you solve for peace, which one do you want to have? Would you rather have a nicer car and less money in the bank account that you're just like you snuggle in every night?

56:36You check your bank balance and you go, ah. Or would you – I mean a crappier car in that or – not a crappier car, just an older used car. Or do you want a newer used car?

56:49Jade Warshaw:I guess I don't look forward to if we were to do the – like a$10 ,000 vehicle that's like 10 years old. I don't look forward to like hey what's the and like are there any underlying issues with it that we're not able to see like at purchase price rather than spending the money up front. Let's look at a bigger picture of your money so what do you guys bring home every month and what do you bring home every year? Yearly we bring home um 130 ,000 and then monthly we bring home 8 ,000 a months. Okay. So what we, let's use this to kind of be our framework and how we think about this. So two things are true.

57:27Jade Warshaw:We do have a framework for cars, things that go down in value, and we don't want any more than half of your annual take home to be tied up in cars. So for you, that's somewhere around 60, 65 ,000, uh, and you're nowhere near that. So that's thing one that kind of gives me a green checkbox that, okay, we're not, we're not breaking any rules of. we're not being unwise. We're not being unwise here. The second thing that I want to bring up is you've got$40 ,000 saved, which you yourself has said, like that's six months of expenses. Like that's a full emergency fund. Something that I find, and I want to call this out with you because I think it'll help the greater audience is when we teach our seven baby steps, the first three, right, get$1 ,000 saved, pay off all of your more consumer debt using the debt snowball and save up three to six months.

58:15Jade Warshaw:Those are intended to be extremely intense. We sacrifice everything. We give up what we want to do those things. But then once you cross that line, now we're going from intense to intentional in the same way that you had to practice what it feels like to say no, to cut back, to change your habits. Once you cross over into baby steps four, five, and six, you have to do those same things only in the opposite direction. Now we have to practice what does it feel like to actually enjoy my lifestyle in a responsible way because I'm now a financially responsible adult? What does it feel like for me to know what my limits are and feel good about making that choice?

58:52Jade Warshaw:And instead of doing the easy thing, because the easy thing to do is just avoid and go, that feels weird. I'm just going to buy the thing that's less expensive. That's what I know to do. Right. But that would not be really enjoying what you're working so hard for. So I actually, in your case, I would push you to enjoy the work and the money that you have. And I'd say, hey, you're no longer in this season of life where you have to drive the cheap hoopty. Not that$10 ,000 is cheap, but the less expensive hoopty that's got, you know, already has 100 ,000 miles on it. You've actually earned the right and you have it in your margin to get the$25 ,000 car and feel really great about like, hey, this is the nicest thing I've ever bought.

59:32Jade Warshaw:What about that? Yeah. And as a guy who has commuted in multiple different states in multiple different jobs with used Toyotas, I like the idea of my wife and our two kids being in the$25 ,000 car. That's just me. I would like that. How does that make you feel? I think a relief. Oh, yay. I think just because I want to make sure that we're making, like what y 'all said, a wise decision. Yeah. And so. This is what it's about. I got to tell you, like, this is this is what it's about. We get a bad rap around here for it's like we're cheap and you got to you got to live. You got to live low forever.

1:00:15Jade Warshaw:And I'm like, no, man, you make the transition. I was just seeing that recently. It's kind of come out all over the place. Like Dave Ramsey's stupid because he wants you to sacrifice your whole life. You've never gone out with Dave. You've never had dinner with Dave. You've never been to a party with Dave. Yeah. Buckle up. You've never been out to dinner with Rachel. You've never been out to dinner with Jade. Like, dude, the only person is George. He's the worst. But other than that, I mean, when you, when you, the whole purpose of sacrificing like bananas in your first, second, third baby step is so you can have finally have a real version of the life that you want.

1:00:52Right. And it's not unrestricted. Even Dave has to keep a budget. Right. But like, it's not unrestricted, but inside of that, dude, it's the best man. man. So yeah, you guys have worked your butts off. Y 'all saved a whole bunch of money. You got two young kids. Yeah, I'm with you. I'd get the nice car.

1:01:08Jade Warshaw:Yeah. And this is something I think we're saying this because I think we've all struggled with it to a degree because it's true. Your brain is in one form. Like you have to be a certain way to do baby steps one, two, and three. And you have to do a complete, in many ways, an about face because in baby step two, you have told yourself spending is bad. Spending is not good. And then you have to train your brain to be like, you know what? All spending is not bad. This spending is good. This is fair. You know, like you've told yourself anything extra, we don't want it. And now you have to go back and say - Desiree, let me call this out with you because you sound like me.

1:01:43Here's the deal. You know this about yourself. I know this about myself. If you went to the store and you and your husband bought a$10 ,000 car, you would get home and you'd immediately have regretful feelings. You know that. And if you go buy that$25 ,000 car, you're going to see your bank balance and you're going to have regretful feelings. So just knowing that no matter what I do, I'm going to have the little feeling monster inside of me be like, you know, you should have, you know, you should have just know that's coming and then say, gotcha. I got it. I feel it. I'm not even going to fight.

1:02:13I'm not going to fight it. And then I'm going to go do the next right thing after that. And that's emotional maturity. I have this feeling and it's real. And then I'm going to go do the next right thing. And it's getting right back on the same plan. But yeah, all you people out there to think Ramsey followers live boring, awful lives. Come to the Ramsey Cruise, man. It gets wheels off.

1:02:34Jade Warshaw:I can tell you that I relate to that. I put off buying a new car for the longest. I said in the other segment, my Cadillac SRX, it's worth $1 ,500. It's got over 200 ,000 miles on it. And I just would not buy myself a new car. I talked to Sam. He's like, I don't know, man. She won't. I won't. And then finally I did. And I did. And I'm like, what was I waiting for? I saw you roll up in your new car and I was like, whoa. They see me rolling. Dude, for real. They hate it. I'm just joking. But just do it. Enjoy when you can afford it.

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1:05:23Let's go out to Eric in Chattanooga, Tennessee. What's up, Eric? Hey, guys.

1:05:30Jade Warshaw:Thank you for taking my call. You got it, brother. What's up? My question is my wife is currently making about$75K a year. and our household take-home pay is between$150 and$175 a year. We're actively saving to buy our first house, but she got accepted into a program to go back to school, which would require us taking about$80K out of student loans. After a degree is done, she would be expected to triple her income. With our goal of buying a home, do you think taking$80K out of student loans is a smart decision, or would you recommend delaying school? What's the program that's going to triple her salary, that she's going to be making$210 the day she graduates?

1:06:15Jade Warshaw:It's CRNA school. She's a nurse currently right now in RN. Okay. So it would be a nursing nurse for anything. Sorry, drawing a blank. But there's data that shows that that's what her income will be right out of school? Yes, ma 'am. then i then it's so how long how long is the yeah i noticed the RNA is how long is the program it's a three-year program with a year of clinical in it so she gets paid during that year but it's very minimal what you make during that one year so is she going to be in school full-time so she's going to lose her 75 a year salary while she's doing this or is she going to work and go to school full-time?

1:07:03Jade Warshaw:No, she'll be in school full-time. I'm making anywhere right now. I work in outage season with my job, so it's not completely guaranteed, but I make anywhere between 85 and 100, but it should go up to around 150 here soon. I just started. So what I hear is, I hear this is a decision about what do we want to do the most? Because I think you can do a lot of this over time, but something's going to take the first seat, right? Right. You're either going to say right now we're focusing on the house and we're going to, you know, try to buy this house or you're going to say, you know what, putting the house to the side.

1:07:45Jade Warshaw:And right now we're going to focus on her going to school because what's off the table, at least in my book, is debt. A student loan is 100 percent off the table here. So we have to figure out, are we going to cash flow and save up$80 ,000 to go towards education, or are we going to save up$80 ,000 to go towards a down payment on a house? How much do you have saved for your house yet so far? Well, we're 21 and 22. We just got married a few months ago. We really just started our jobs not too long ago, so right now I only have$20 ,000 saved. But I already bought, well, we built a mini house with cash without paying.

1:08:23Jade Warshaw:okay that's what we're living in right now about 600 square feet um we don't have any debt we don't even have credit scores because we've never owned a credit card okay so let me let me tell you this i'm 25 years down the road from you more than 25 years okay and i understand what what it would have been like talking to 21 year old me i was dumber than a box of hammers you don't sound like that you sound like you're way ahead of where i was at 21 okay so i'm i'm pleading with my 21 year old self here through you. Is that cool? Yes, sir. If you and your wife will just make a scratch and claw commitment for 36 months, three years, 36 months, make one of those construction paper chains that just has 36 months on it.

1:09:14And y 'all will take that 20 grand you've got saved, actually you got emergency funds, so I'd hang on to that, and cash flow this school, that's coming up with $26 ,000 a year. And that means you're going to have to really contract how y 'all live, but you got a paid-for tiny house. You're just living small. At the age of 24, based on the numbers you gave me, y 'all will be making $370 ,000 a year. You know what that will make you at 24? Rich. Yes, sir. You know what house you can buy? whatever house you want. If you're 24 years old, making$370 ,000 a year, you at$150 ,000 and her at$210 ,000.

1:09:58Or$360 ,000, I'm sorry,$360 ,000 a year. It's just going to take you deciding at this early part of your marriage, as for our household, we don't borrow money because we always want to be in control of our lives. And I'd rather us have tuna fish sandwiches for dinner and us have eggs, like breakfast for dinner for three years than to ever be beholden to somebody else. And I've worked, I want there to be good CRNAs out there in the world. I've got young kids, right? I want them to be out there in the world and licensed and credentialed. I want that. And I want them not owing anybody any money so that they can make the next right ethical choice and not be stuck between some machine because they got to pay their student loans off.

1:10:47Jade Warshaw:you know what i'm saying well i guess my my main question would be and being concerned i completely understand what you're saying and you know my goal was to never really take out a debt besides my mortgage but here in a school is very competitive and she got in i'm sure she can get in again but i guess she's nervous about that too maybe the that what if they don't take her back in next time we want to apply i'll let you know our monthly take home right now is about 13 and we spend about 3 a month. Right, so why can't we cash flow it? Go! If you're only spending, if you have 10k of margin every month, there's no reason that you can't cash flow this.

1:11:28Yeah, go! Okay. Yeah, she shouldn't put it off. Plus you got 20 in the bank. You already have this, you already, you almost completely have the first year tuition in your bank account right now. Yes. And so that puts you basically a year up.

1:11:42Jade Warshaw:In the first year, I think we would possibly, because, I mean, semester's coming up soon, and we'd possibly have to pull out a small loan. No, you don't have to. I don't think you do. Why do you think that?

1:11:56Jade Warshaw:Well, let me think about this tuition. We've got$20 ,000 right now. We're making about$10 ,000. And all you do is put on a semester payment plan, and you pay them every month. Over the course of that month, they're going to charge you an extra$50 for that. and you cash flow it. So put it on a payment plan? Yeah, with the university. I'm not taking out a loan. Yeah, I was just thinking about paying it up front. I understand what you're saying. If you can pay it up front, that's great. Oh, no, you're doing a great job. No, you're doing awesome, man. Here's the thing. If you take debt off the table, you'll figure it out, is what I want you to hear me say.

1:12:36If that's not an option, you're like, okay, you got in. We're going to figure this out.

1:12:41Jade Warshaw:And if you had the stack of cash to just pay for the whole semester, that's fine. But what John was saying is making it more palatable so you can do it bite-sized every month with this 10K of margin that you have every single month. And by the way, you have the first semester's tuition is going to be about$13 ,000 or$14 ,000. You have that in your account right now, plus you'll have$6 ,000 left over. Write that first semester check, and then you all start living September, October, November, December. Remember, your Christmas is going to be different because y 'all intentionally are sacrificing for a whole lifetime of winning.

1:13:16They can never take her CRNA license away from her. This is a good degree, dude. I understand. But you're in a position to do it and never owe anybody anything. Which means if she gets pregnant year two and she looks at you and says, I don't want to be a nurse anymore. You're like, that's cool. We don't owe anybody any money.

1:13:36Jade Warshaw:the hard part about being 21 and 22 and having a lot of goals is you want to do them all at once yeah and it's like if i'm not doing them all at once you almost feel like you're failing or you're just not achieving well and also feel you can get that loan and then you don't have to change your lifestyle and i want people if you're going to make an eight thousand dollar investment like they're doing with that i totally support it's going to come at a cost how that cost be now not for the rest of your life Thank you.

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1:16:00all right let's go out to the 806 lubbock texas and talk to caleb what's up caleb hey how's it going this is yeah this is caleb what's up man how we doing all right good good

1:16:10Jade Warshaw:good so what's up oh sorry that was my turn to stop the question yeah um i got a question for you um i work in in safety for um a big solar company um out here well they're nationwide but i just happen to be in texas uh and my wife is starting um uh she's she's in an internship for the same company um but she'll be starting a salary position here in probably the next three months uh two to three months here um and it'll bring her a total income which sounds crazy to say for at least me now, but a little over$210K or$15K after all that's said and done, not including bonuses. I'm 22 and she just turned 21.

1:16:58Jade Warshaw:We don't actually enjoy our job at all. I actually don't mind my job, per se. I think the circumstances for my job, I really don't enjoy, where I'm located, the trouble and everything like that. Um, but I definitely don't enjoy, um, um, where I'm at personally and, and same thing with my wife, you know, she's going to be dealing with the same, uh, issues, issues that I have. Um, and we're trying to figure out if it's, is it the people or the tasks? I'd say it's people. And yeah, I definitely say it's the people. Um, it's not my favorite type of people. And there were blue colored workers, you know, all at the end of the day, but, um, and solar, it's kind of a funny thing.

1:17:39Jade Warshaw:but it's kind of like bougie construction, building these solar farms out here. So not necessarily your typical blue-collar workers. And I don't know if that's quite the environment for my wife long-term as well, which is maybe also factoring into my concern here. Okay, but hold on. I've lived out in your part of the country for half my life, okay? So I know that area well. And I know there's some places where it's tough to be around some folks, and I know the aesthetic is pretty tough, and I know in the middle of the summer it's miserable, right? There's a lot of hot. It's hot. The wind is blowing, right?

1:18:15It's miserable out there, right?

1:18:17Jade Warshaw:Yes, yes, 100%. Okay, so I get that. And closer into city, it's a cool place to be, but also it comes with a lot of stuff. Here's what I want you to think about. You're 21 and 22. what would three years of y 'all doing this hard job in your early 20s and living on like minimal, just deciding we're going to, we're going to, the first couple of years of our marriage, we're just going to go all in hard on this deal. And yes, there's going to be goofballs that we have to work with. It's going to be not beautiful out here all the time. It's going to be miserable when it gets hot in the summer. And we're going to set up our entire family lineage because we worked really hard when we were 22 and 23 and 24.

1:19:04I just think the whole follow your passion thing is one of the most nonsensical moronic things. I don't want people to be miserable and I never want someone to work in an unethical place, but there's a, I don't know, man. I look, I look back at 20 year olds and I'm like, dude, this is the season to work like crazy to set yourself up. I'm, let me put it this way, brother. I'm living the life I have now, me and my family, based on working like a maniac in my 20s and early 30s. You know what I'm saying? Okay.

1:19:34Jade Warshaw:I would agree with John. I think most of us in our 20s and even into our 30s did jobs that we knew were not the end game and we knew we didn't like very much. The only difference is we weren't making$210. I wasn't making this kind of money. Yeah,$210. We were making$18 an hour or$12 an hour, whatever. Yeah. um what baby step are you guys on um i honestly have no idea i i don't know i don't know my parents actually met dave ramsey like 25 years ago and they've always raved dave ramsey and i did the stupid college or uh teenager thing and was like oh that's cool but i'll never have to like really think about money well let's see if we can diagnose you hold on i don't know how big is your truck oh it's i'm sitting in it right now it's pretty big is it is it a 250 or 350 no no it's a it's a 26 150 okay a 26 150 yeah that's nice it's nice oh my god does it have payments yes no no it doesn't have payments this is actually wow this is from work oh it's a work truck i don't i don't pay i know it's it's a personal vehicle and we have an option to buy it at the end of end of it and it usually ranges about 10 to 12k um with one of our fleets that we work with and so you bought it for for the it's a pretty sweet deal no i it'll be at the end of end of the okay so what's this what what is so bad about your life okay so i to throw a wrinkle on this i probably just stated this earlier i'm living in lubbock right now we moved to lubbock with my wife um but i work two hours away from lubbock um so that to fill the wrinkle we're not working in in lubbock i drive i leave at four in the morning oh my gosh every morning i don't get home okay but when she gets done with her internship are y 'all are y 'all gonna move out there no no there's nothing out here i i don't know if i don't know if i could say names on the show but i'm next to a really big ranch in west texas the eighth largest ranch i don't know if i want to in the middle of nowhere.

1:21:36Jade Warshaw:It's really just this ranch and two small towns of 120 people and there's no houses. There's no anything. No RV spots. We looked into everything. We exhausted every option. So you're in the car four hours a day? Yes, sir. I guess, ma 'am. Sorry, four hours a day. That's pretty bad. It is bad. That's a brutal commute. That's a brutal commute. But I also know there's other towns in between there. No, no. Legitimately, if you look at the I hope for that, between Luck and Nuttree, Texas, there's nothing. There's Spur, which is about 20, 30 minutes closer, but there's no houses for rent in there. Bro, you're going to be making$210 ,000.

1:22:20Go write somebody a check for$78 ,000 for their home.

1:22:23Jade Warshaw:Well, let me ask this. Can you do the same work someplace else? That's why I asked you earlier. Is it the people or is it the tasks? Are you able to do this type of work? Is it transferable? yes uh with this company specifically there we're almost nationwide um they're here i believe we're in like 26 states my main issue is i just started this position where i'm at with all this money which is why also i'm concerned because i've never been in charge of this much money yeah um you don't feel like you could ask to transfer no not not this early on because of where we're at specifically it's such a hard uh position to get people to come over here um our hourly people and our salary people so basically it's like you're locked in for the next two years here i won't lie i won't lie you have a tough four hours a day in the vehicle and it's hot that that's very tough now are you you and your wife are doing this separate or are you commuting together no we commute together so that so at least you're together yes i also don't pay for gas i don't want to make it seem like i'm paying for all this stuff i don't i have a gas card so let's get back to your baby step right quick let's get back to your baby step right quick because that that'll help us know if you really need to do this.

1:23:33Jade Warshaw:Do you have any consumer debt? Is that like credit cards? Yes. Credit cards, student loan, cars. I have no student loan. I have a car payment, which is going to sound so dumb, but I also have a Chevy Colorado, which I got right before starting this job. What do you owe on it? I was going to need a truck. I owe 17K on it. Okay. Anything else? Anything other than mortgage debt? Anything that you owe to anybody? No, just, I think I have like$500 on a credit card. and that's it. Okay. And do you have any money saved? That's not retirement money. I have, without looking actually into it, my actual savings only has$800 in there, but I don't transfer anything over for my checking account when I get paid to my savings account.

1:24:17Jade Warshaw:So I don't know off the top of that. I would assume with what's in my checking that won't come out this month. You know, if that's how people do it, then it's probably close to three or four K. Okay, before we hit the break, here's what I think is necessary. At the bare minimum, before you can quit this job, you have to do three things for me. Four things. Number one, you have to have a budget. You have to budget your money and you need to be budgeting your money for at least three months to see how much money you have and what it's going towards. So promise me that. Number two, you need to pay off all of your debt.

1:24:51Jade Warshaw:The$17 ,000, the$500. If you sell it, I don't mind. If you pay it off, I really don't mind. But you need to get out of debt. And number three, I want you to save up six months of expenses. And I'm going to add a fourth thing to the list. This is your fourth thing of homework. You and your wife need to have other jobs secured before you leave this job. And if you do those four things, I think that it's a smart way to exit. I would not come back to haunt you for that choice. And I'll just tell you right now, I can't remember what I, what I was doing when I was 21, 22. And so if you think about 30 year old, you or 40 year old, you that commute is going to be non-existent other than you and your wife got to spend a lot of time together.

1:25:36I still vote for two or three years of just sucking it up and making a jillion dollars.

1:25:57Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm John Deloney, joined by Jade Warshall. Let's go out to Savannah, Georgia, Savannah, Georgia, and talk to Robin. What's up, Robin?

1:26:11Jade Warshaw:Hey, how are y 'all doing? Thanks for having me. We're doing great. Thanks for calling in. What's going on? All right. I am 45 and I want to go back to school to be a physician assistant, but the only school that offers it near me is private. And it's$136 ,000. Per year for the entire program? For the entire program. Two years. Two years program. And so I talked to my husband about it. He thinks, well, he literally said, call Dave, see what Dave thinks. but he doesn't think that it's responsible. What's the difference in cost between a non-private institution? What's a non-private cost? The non-private, I think, is like, well, I called one, and they said that it was$40 ,000, and I'm not sure.

1:27:05Jade Warshaw:That has to be per year because I looked up another school, and it was the school I did my bachelor's in, and it was$40 ,000 per year. So$80 ,000 total? The cost is all over the place. Yeah, usually it's about half. Yeah. 60 % to half. Yeah, but the non-private school is a two-hour drive for me. And I would have to redo all of my prereqs. So let's back out a little bit. Why PA? What about the medical profession do you want to get into? um well i love the independence of pa versus nursing um but i'm kind of having a midlife crisis like i said and so one of the the things that i've been kind of looking at is um what makes life feel meaningful to me and i'm looking back at like high school years and it's always been when i went overseas when i was involved in some sort of missions work um and And so I've been thinking what would be meaningful to me in the next part of my life is if I have the opportunity to be hands-on with third world country and make a difference in that way.

1:28:22Jade Warshaw:But also it would have to be something that I could do here as a career sustainably and enjoy working. So this is going to be a strange question, a strange next question. What about this idea? Yeah. Had your husband, did your husband's first response be, that's not a good idea. Call Dave. Is it that he's seeing you struggling? Is it that he knows my wife faints every time she sees blood? Or is it we don't have the money? What is it about that? If I spend$140 ,000 on my next phase, then that's$140 ,000 we don't have for whatever else. Yeah, but that's a foolish argument because you're going to make a bunch of money being a PA.

1:29:13Jade Warshaw:Yeah, and what is whatever else? Right? What is whatever else? Like retirement, we started a little bit late for retirement. So we only have probably, excuse me, about$600 saved for retirement. You'll be fine. Yeah, y 'all are going to be fine. So you think that it would be... Well, here's the deal. You have these feelings. You're having what you self-diagnosed as a midlife crisis. You're having a crisis of meaning. All that stuff is important, and it's awesome, and it's good. Let's move that aside for a second. What you have in front of you is a math problem. Do you have$136 ,000? Or over two years, do you have...

1:29:5870 grand and 70 grand?

1:30:02Jade Warshaw:Yeah. I mean, and my mom just passed recently and she left like 80 ,000. So there's that, but we were going to, you know, give that to our son, give him a leg up. So that would be taking away from him.

1:30:17Jade Warshaw:I really think that I'm looking at this and I think it's important that people do to quote Ken, do the work they're wired to do. And I think it's important that you have a career that gives you meaning. And some people find that later in life. I also think your 40s is when you really start to be like, okay, like I'm, this is who I am. And this is what I'm doing. And this is the contribution I'm making. And then when you get into your 50s, like that's when you're really just kicking it, right? Right. I think going back to the retirement, you have six hundred thousand there. If it's invested well, if it's making at least 10 percent in seven years, it's going to double and you're not going to stop contributing it to it.

1:30:59Jade Warshaw:You're going to keep contributing the 15 percent. Right. No one is saying stop doing that. So you're going to be fine there. But you do have this money in front of you and you do have options. Some of them may be uncomfortable, but you do have the non-private option. And if you did that, then you'd have the cash to cover it through this inheritance. And nothing says that you can't continue to put some money away for your son. I think there's a way to tick all the boxes here, but there is going to be some level of sacrifice if you choose to do this. whether it's, okay, we're not giving our son a lump sum of 80 grand like we thought, or I'm going to have to be in the car for four hours a day.

1:31:35Jade Warshaw:That's different than I thought, right? There is going to be some give and take on this, but I do think that it's worth it to pursue the thing that you know in your guts you're supposed to do. Now, if you don't know in your guts that you're supposed to do this, that's a different conversation. Yeah. Before I did anything, I would spend$3 ,500 and go as an assistant on a medical missions trip. Because what used to give me life was mowing. I could spend all day mowing people's lawns, mowing my lawn. I love it. Now, man. So if I look back at 18, 20, 25 year old me, I was like, dude, you don't used to give me life this.

1:32:15That used to be always my stock answer. If I won the lottery, no one would ever see me again and I'd have a huge lawn business. I would not do that anymore, right? Because it used to give me life. And when I think back on those days, I romanticize them. It's not real anymore. So before I did anything, I would spend the money and go spend 10 days doing medical missions as an assistant, handing a surgeon gauze and doing whatever I need to do in a third world country and see, is this still what lights me up? And if it is, can you get that from coordinating medical missions? Can you get that from 50 other avenues before I go back to quasi med school.

1:32:51Jade Warshaw:I love that. Right. If you want to be a physician's assistant in the States day in and day out, deal with, um, managed care, deal with insurance companies and help people day in and day out. And then a couple of times a year go overseas. If that's who you want to be for the back half of your life, then yeah, do y 'all have the cash. it's a worthy investment and you're not you're not robbing peter to pay paul here and we're going to give our son a leg up in other ways right um but man there's there seems to be a bunch of other steps before you're just like you know what i don't know i don't know uh let's put 140 000 in two years of my life down on the table that just seems like a huge a huge bet without knowing convincingly this is what i want to go do so step one let's give you ken's book find the work you're wired to do and let's do the career assessment that's inside of that.

1:33:44Jade Warshaw:And that's going to help you kind of put the pieces together. And then in the book, it's just a little short read. He walks you through what to do with the results. So I think that's thing. One thing too is if, if that's, if everything still points to kind of this field ish, then do exactly what John said and test it out in multiple areas. There's nothing that stops you from testing this before you invest any money into it. And so I think those two things are your homework that must be done first. before you sink even a dime into this.

1:34:44Jade Warshaw:You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid, non-client promoter of participating pros.

1:35:21Learn more at RamseySolutions.com slash SmartVestor.

1:35:38our why refi nice talking john listen the words get stuck in the old mind sometimes the why refi question of the day our question of the day is brought to you by why refi when past due private student loans keep pulling you backwards it's hard to focus on what's ahead why refi helps borrowers with low fixed rate refinancing options that fit your budget so you can focus on the future again Visit whyrefi.com slash Ramsey may not be available in all states.

1:36:09Jade Warshaw:All right. Today's question comes from Keith in Tennessee. He says, I found out today that my brick and mortar bank allows children with a joint account to get a debit card as young as three years old. Wow. I was mortified thinking of a preschooler walking around with a card in a world of marketing. Okay. At what age do you think it's appropriate to give a child a debit card? Keith, I think you're overthinking this. I mean, I'm just saying, obviously, we're not giving a three-year-old. I think a fair time is when they get their first job because then they actually have a little bit of money to speak of.

1:36:47Jade Warshaw:I think I got mine when I was 15 or 16 when I started working at Kroger, bagging groceries. And my mom was on it. It had a checking and a savings, a debit card attached to it, checking and a savings. And I'm trying to think what else. I think there was, she, she could see the transactions I was doing and it was just a great way to kind of like be connected on there. But yeah, I, I mean, what say you 16, whenever they get their first job. Yeah. I think when, yeah, when my son started working, um, yeah, we got, he has it online, so it's a till account, but yeah, so we can transfer money back and forth.

1:37:22But now that he's in school, when he goes on school trips and things, it's easier just to make sure he's got eating money and stuff like that. But, um, yeah, if, if somebody was to get a debit card and hand it to a first grader. That's madness. Like, right. And there's no point no, or a second grader or whatever with the debit card. There's just no, there's no point to it. But yeah, I'm with you. I think when, when, when kids are getting their first job,

1:37:46Jade Warshaw:yeah, you get your first job, then it teaches. I mean, you can do all the stuff together. It's like, okay, we go down to the bank together. We open up the account. Obviously mom or dad is, you know, listed on there just to be able to see what's going on. And then it's a great way you start teaching budgeting, you start teaching just that basic next steps in managing money. I'm so old, Jade. My dad, I remember it was like a cool day we had, but he took me and got me my first savings account, but I had a checkbook attached to it. But it's because I had a mowing business. And I think I was 10 or 11, but I had to ride my bike to the bank to deposit checks that I got from customers or to get cash out to do whatever me and my knuckleheaded friends wanted to do.

1:38:24Jade Warshaw:Isn't that so funny? George and I were talking about this on the previous show. Just checks in general is crazy work. The fact that it's a piece of paper that you just hand out to people that has your account and routing number on it. Oh, well, now that now that it can all be done electronically, it is it is mad. It's crazy. And the funny thing is there's this real circulating on on Instagrams and TikTok where it's, I guess, Gen Y. And they're like, if you can read what this says, you can have it. And, you know, when you write a check, it's like If you write a check for$3 ,100 and 26 cents, it says it's written out$3 ,000 and then it has zero over 26 as the change.

1:39:03Jade Warshaw:The kids don't know what that means. So no one can read the check. They're like, what is this? I don't know what it is. I saw it was a website about two or three years ago that said like how to write a check. And it was a website for young adult men, like how to shave like your granddad and how to shine your leather shoes, but it was like how to write a check. And I was like, oh gosh, I'm old. Yeah. I still write two checks every month. For what? I deposit into an account for my kids and I write a check and it's a strange, this is going to sound ridiculous. And I know this is nutty. It's a, I'll call it a spiritual discipline for me.

1:39:39I want to stop and pause and write this check that's going into an account for my kids that they don't know about. Okay. And it's a moment. And then I still, to this day, write my giving checks to my church on a check.

1:39:52Jade Warshaw:I can respect it, John. And there's one guy that I hand him to, and he's like, it's you. He smiles and says, thanks, man. Give him to Davis. Or we'll put it in the box. But let me tell you why. I sometimes will hand it to, but usually I give those checks to one of my kids to tell them to go put it in the box. So they know mom and dad. They can see, oh my gosh, mom, what are y 'all doing? Or dad. And I can, I remember a couple weeks ago, I leaned over and my daughter looked at the check and I said, she goes, dad. And I said, remember, it's not our money. And she's like, oh yeah. You want to know what, John?

1:40:28Jade Warshaw:I'm so glad you said that. And Kelly, I'm taking a detour here because the people need to hear this. You know, I'm so glad you said that because I ran into something very similar in my life. So I think the way that the world is so digitized, it's harder to show your kids the things that you're doing so they can learn from it because everything's on our phone. So if we're doing something on our phone, they don't necessarily know that that's what we're doing. So case in point, you writing the check, if you had just gone on your phone and did the little Apple Pay or Zelle, however they do it, they would have no idea that mom and dad are generous and this is a monthly rhythm or weekly rhythm that we have of generosity right so taking the time and doing it the the manual way same thing with like i don't know i'm just gonna go ahead and say it like the bible app on your phone i'm like you want to know what let me get back out this paper one because my kids need to see me opening up these texts and seeing the text that's what my mom used to do so it's like well let's see it jade even in my house like over the last couple of years, my wife has started reading more and more on her phone.

1:41:33Um, and cause she used to have a Kindle and now she can just get an ebook on her phone. I thought she was just texting and texting and texting all the time. Doom scrolling. Yeah. I was like, Hey, who are you texting? And she's like, I'm reading a book. And that, I mean, it affected me even like, um, your kids and the people around you are just going to see you staring at the screen and they're going to make up what you're doing on that screen. so get analog yeah i i do i i still i still order checks i'm probably one of 10 people

1:42:05Jade Warshaw:you want to know recently i ordered checks and the reason was because of this place right here i had forgotten one of the receipts i needed to turn in and if you don't have the receipt i write a check to ramsey every month and they were like you gotta write a check i was like a check yep i write a check to ramsey every month because i always lose my receipts when i'm out on the road every time let's go to minneapolis minnesota and talk to jane jane we're right up against the clock so jump right into your question okay thanks for the thanks for taking my call guys you got so i am looking for uh what dave randy calls wife counsel you got it i have i think it's an iceberg question not not an icebreaker an iceberg question so i'm 43 years old i have 35 250 dollars in debt uh it is that that is exclusively what dave also lovingly refers to this stupid tax.

1:42:55Jade Warshaw:I have no mortgage. I paid off my home. I've got a 18 year old about to start college, but she already has her associates. I am wondering, since I'm doing this out of order, what is the best way to pay this off? Do I continue to tackle this monthly or do I just cash out some investments that some of it taps into a little bit of retirement? Or I'm not sure exactly what the right path is. So I'll pop there and let you guys talk, and then we can go on from there. I just want to make sure I wrote down the amount of debt correct. Did you say$33 ,000 or$35 ,000? $35 ,000. Okay. $35 ,000. And you did say you're out of order, so you've got no mortgage.

1:43:38Jade Warshaw:I think that's a great thing. Do you have any money saved, any cash money? Yep. So my net worth, even with this$35 ,000, is a little over$700 ,000. but all of that's in retirement except for I do have some in a brokerage and I have some in a high yield savings okay tell me what's in the high yield savings uh I've got 12 ,000 there okay and tell me what's in the brokerage brokerage is 16 okay I think there's your there's your debt right there how much do you make every month okay what's your monthly take home uh a lot But so the reason that this is an iceberg question is because job situation. I'm not sure how long I will have it.

1:44:21Jade Warshaw:My daughter has been I've been working over 80 hours or 90 hours a week for over a year. My daughter is tired of it. I'm tired of it. And where I live currently, the market is not very good. So all of this is reason to all of this that you're saying is reason to get this under control and get this debt paid off. because when you don't have payments, suddenly you have options and you don't have to work jobs that you don't have to work and you don't have to stay in situations that feel unsafe for you or unsustainable for you. So I would, I would reach over and I would pay off this debt and then I would stack up three to six months of expenses in the meantime.

1:44:59Jade Warshaw:And then if you have to transition jobs, you're in the perfect situation to do that.

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1:46:25We're taking your calls live, 888-825-5225. Let's go out to Indianapolis and talk to Veronica. Hey, Veronica, what's up?

1:46:34Jade Warshaw:Hi. How's it going? How are you guys? I'm good. Excellent. We're doing great. How are you? I'm good. So I just had a question. So my boyfriend and I are looking to combine our finances. When we get married, I am debt free except for my home mortgage. My boyfriend makes a little over six figures, but he does have 50 ,000 in student loans in addition to his car payments. So I own my own home and he owns his own separate home. He thinks once we're married, we should tackle his loans together and wants to get my house put in both of our names. But I would like to keep my home, pay off my mortgage, and just kind of have him finish off paying off those loans before we get married.

1:47:26Jade Warshaw:So how would you advise us to structure this? Okay. I mean, it sounds like he wants to get married now. I'm thinking probably in the next year, year and a half or so, we'll get engaged. Well, let me put it this way. When you get married, your stuff and his stuff becomes y 'all's stuff. Yes, I'm thinking maybe if we move in together, we would just be engaged and have a long engagement. So then I would be able just to pay off my mortgage and then he would live in the home, but to pay off like utilities. I think you guys are making it too complex. I think we can make this really simple and clean.

1:48:15Jade Warshaw:Do you want to hear what I'm thinking? Okay. I think the simplest, cleanest way to do this is until you're married, you have your things, your money and your residence. And he has his things, his money and his residence. And then when you guys get married, wherever you guys are at the point of marriage, everything combines. So if your home is paid off by then, it's our house. And yeah, you could add them to the deed. I think you should add him to the deed. It's y 'all's stuff. And even if it's not finished paid off, yeah, you still add him to the deed because it's yours and it's ours together.

1:48:56Jade Warshaw:And then if he still has a little bit of debt left, that's ours together and we'll combine our money and pay it off together. But I think it starts getting complex when you start doing unit things, but you're not a unit. So if we were to be engaged, would you guys advise that he move into my home because at that point we're not married we're just about to get married and then just have him aggressively try to pay off those loans while we're engaged i wouldn't because engagement is i intend to be a unit but i'm still not a unit yet so let the intention let the intention period play itself out because there's a reason that it's there let it play itself out until it's the intention is actually realizing oh we are a unit And then because if for some reason, if for some strange reason, because it happens every day and I would never, you know, project that onto you.

1:49:49Jade Warshaw:But if some reason, one of three things that could take place, number one is you start living together. You decide we don't really like each other that much and you've already got everything tangled up and mingled up. And then it's like, oh, man, that sucks. And then number two, what happens all the time is it kind of just gets comfortable. and before you know it, it's like, I thought we were getting married, but somebody just gets comfortable with this intention to marry situation and they just want to stay there. And then you end up calling me five years later wondering, how do I get this guy to budge or vice versa?

1:50:23Jade Warshaw:Maybe he calls and says, how do I get this girl to budge? And you've already commingled everything up together. And it's just a kind of a web there. Or the third thing happens, which is somebody starts to be codependent on the other. And it's like, I don't even know that I really want to be with this person, but we're all commingled together and my income is based on hers and she's already paid off some of my debt. So I kind of feel like I owe it to her. It gets messy. You're the expert on this. The question, all three of those things are excellent. And I'll tell you the, I just finished a two-year marriage project that ended up in a marriage book that I hadn't super intended to write, but I'm proud of it and it'll be coming out next year.

1:51:05One of the data points that surprised me the most was the everything from life satisfaction to net worth to amount of sex to health outcomes, even between the difference between cohabitating couples and married couples. And my wife and I have, we've talked, I've talked openly. We've been, today's our 24th anniversary. We've been right at eye for almost a quarter century. That's today. But there's been seasons where we're only married because of what a pain it would have been to go to the courthouse and unwind everything.

1:51:39Jade Warshaw:I know that's right. So here's why that's important. Even people will tell you in Hollywood, well, that means the relationship's over. No, that means there was a hurdle that we both put up to protect us from ourselves sometimes. And that's a good thing, right? So my bigger concern for you is if you're not ready for your stuff to be y 'all's stuff, then just be his girlfriend and pause the marriage talk for a while. Okay. Because if your identity as a homeowner is more important to you than your identity as a wife and a co-creator of an amazing future with another person where y 'all are creating a singular future for y 'all, that's going to have two independent people in it merging over time.

1:52:21But if your identity is more, I'm a homeowner, I'm a boss, I do my thing, that's awesome. You get to pick that. But don't try to do that and get married too. Because it's going to be you getting in a boat that is your marriage, but you're going to have one foot in your other life. And it's a recipe for getting yourself hurt, for getting him hurt, and y 'all ending up in drifting into two different oceans, right?

1:52:50Jade Warshaw:So are you saying like if we were to get engaged to still live apart? I would because you don't have the legal protection to unwind the relationship if something goes sideways. And again, like Jade said, I don't want to wish that on you, but Jade and I only have jobs because people's plans don't work out. Yeah. And I'd also ask, what's the rush? Why do you feel that you need to do that so quickly? I guess like I just wanted to be completely in depth before we like intertwine our lives together just to put us in like the best financial position to hopefully buy like a future home together in cash.

1:53:26Jade Warshaw:I mean, we both have homes of our own that I know we're going to appraise. And so I guess like the bigger picture would be to since I am on baby step six to be able to buy like my next home together with him in cash. OK, but here's all that matters. That means let's get married tomorrow and I'm going to help you. And together we're going to pay your stupid student loans off so fast. And then we're both going to sell our homes and buy this other house. Like, or I'm just going to sit here and wait on you to pay off your 50 ,000 delaying like this future house that we want to buy together. The end date may still be the same, or you may be able to accelerate it if y 'all get married and work together.

1:54:07but it almost sounds like you want to like you did this and so you clean up your mess and when your mess is cleaned up then you can join me is that is that is that part of it if it is it's okay

1:54:19Jade Warshaw:to say that i mean i just feel like i worked like really hard to where you know i'm at financially you know it took me a really long time to be able to get to baby step six i put 25 down on my home and so I've been picking up extra days at work but I also know how hard he works he also picks up extra days, weekends to be able to pay off you can look at it two ways you can look at it, I did all of this and so until you bring yourself up to my level I'm not going to engage in this future thinking with you, in this future action steps with you or you can say, thank God I worked so hard so that when we join, all we have to do is get over this$50 ,000 hurdle together and then we are off to the races.

1:55:13If you view yourself in like a lifeguard stand at a swimming pool, looking down at him swimming and thinking when you climb up here, then you'll be up here with me. I'll tell you right now, your relationship isn't as on the same footing. But if you climb down off that stand and you pull him out of the water and y 'all climb up together, man, y 'all can accomplish anything.

1:55:36Jade Warshaw:And if you take that same way of thinking and you transfer it out of money into other areas of life, where spiritually when they get where I am or, you know, relationally where they get where I am, you start to realize that it's not really a wonderful way of thinking. It's two imperfect people trying their best to create a pretty amazing life together.

1:56:00Thank you.

1:56:19Jade Warshaw:The problem with online investing advice? You hear so many different opinions and you're left wondering if you're even doing it right. And that's why we created Investing Essentials. Join me and Dave Ramsey at this two-night virtual event to learn Dave's playbook for investing and wealth planning. We'll break down 401ks, mutual funds, passing on wealth, and more. So join us September 1st and 2nd. Tickets start at$199. You can get yours today at ramseysolutions.com slash events, or just click the link in the show notes.

1:57:07Today's scripture of the day is Luke 12, 15. And he went on to say to them all, watch out and guard yourselves from every kind of greed, because your true life is not made up of the things you own, no matter how rich you may be. Nathan W. Morris says, edit your life ruthlessly and frequently. It's your masterpiece after all.

1:57:28Jade Warshaw:Love that. Let's go out to Dallas, Texas and talk to Ross.

1:57:35Ross, I need to let you in here. There we go. What's up, Ross? Hey, how you guys doing? Doing great, brother. Good to meet you guys. Good to hear you guys. Yeah, great. Thank you.

1:57:45Jade Warshaw:I have a quick question about a Roth IRA. like an IRA account. I'm a freelance musician and I, uh, I'm poised to make like a decent amount of money for the first time after a few years of not making a ton. And I'm just trying to set myself up for retirement. Um, and I'm not, I'm kind of confused on like which type of, uh, retirement account to open a rock or I versus traditional. I love that you're asking that question. Um, is it, the first thing I want to find out is if it's time for you to start investing, if it makes sense for you to start that path yet. because there's kind of a good, better, and best way to look at this.

1:58:21Jade Warshaw:And so we found over time that the best time to start investing so that money can actually stay invested and you don't end up pulling it out for an emergency or anything like that is after you've paid off your debt and after you've stacked up three to six months of expenses. Have you done those things? We are currently paying off student loan debt and a little bit of credit card debt. Okay. How much do you have left to go? We got about$38 ,000 in student loan debt and about$2 ,000 or$3 ,000, I think, in credit card debt. Okay,$2 ,000 to$3 ,000. And how old are you? We started doing the baby steps recently.

1:58:55Jade Warshaw:Oh, good. I just turned 31. Okay, great. So what I would advise, and I'm going to tell you the answer to your question, but I would advise for you to pay off the student loans and the credit cards. Stack them smallest to largest and pay minimums on all of it, but put any and all extra money that you have to that smallest. It's probably a credit card right now, unless you have the student loans broken up into smaller pieces. But whatever the smallest debt is, that's the one that you attack first. And the reason for that is it's going to allow you to invest an amount that really is going to move the needle for you.

1:59:31Jade Warshaw:Because ideally, we want you investing 15 % of your gross income. That's where we want you. And if you can do that, that's the magic number that we have found that over time, if you do that, it really is going to build wealth for you and your family. and it's going to set you up for retirement in a major way. So that's kind of the underlying thing there. And then the second part of that is now we want you to save up three to six months of expenses because that's your emergency fund. That's kind of your insurance policy against debt in the future. If you've got, let's spitball, what would you say is six months of expenses for you?

2:00:08Jade Warshaw:Probably about$12 ,000. So if you had$12 ,000 just sitting in a bank, I mean, what would you really need to go into debt for, right? You know, the car could break down. You could do a roof repair. You could do a new AC unit. Hold on a minute. It depends on what kind of guitar he needs. What kind of musician are you? I'm a classical musician. Oh, so like... He's got like an upright bass. Yeah, or a violin. Like those violins can get real, real expensive. Yeah, what do you play, by the way? I play the trombone. Love that. How much is like a good OG trombone cost? Mine cost about$4 ,000. Okay. Okay, yeah.

2:00:50Jade Warshaw:So you got enough money. $12 ,000 really is like if you're saying that that's six months of expenses, that's super good. So now you have that money there. If anything pops up, you don't need to use a credit card. You don't need to go back into debt. So that's kind of your buffer against going back into debt. And then from there on, yeah, you're investing 15 % of your gross. So whenever you get that check, 15 % of the gross amount goes straight over into a Roth IRA. And I would suggest Roth because that's one where we're paying the taxes up front. That's really one of the biggest differences. Traditional, you pay the tax when you pull the money out in retirement.

2:01:27Jade Warshaw:And Roth, you pay the taxes up front so that later in retirement, you don't have to pay the taxes and the money is also growing tax free. which is so important, not just for you, but for your heirs. Because the goal is you're going to keep investing. That money is going to keep stacking up. And at some point, you're going to leave this earth and that money, whatever was left, is going to transfer you to your heirs. And guess what? They're not going to have to pay taxes on it either because the bill's already been footed. See what I'm saying? Yeah, totally. So that's kind of the nuts and bolts on it.

2:01:59Can I celebrate you as a musician thinking about this? Yeah, so good. I hang out with a lot of musicians and I've never had the IRA conversation before. So good on you, brother.

2:02:08Jade Warshaw:Yeah. Very, very good. That's impressive. You know what? It's because I hang out with punk rock musicians and he's a classical musician. So maybe that's it. I don't know. More thoughtful. I don't know. Hey, listen. The right insurance acts as a shield around your loved ones and your wallet if and when disaster strikes. Our free insurance coverage checkup helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps. Go to ramsysolution.com slash checkup to take the coverage checkup and find out if you have the protection you need. Let's go out to Louisville, Kentucky and take one more call.

2:02:47Let's talk to Andrew. Hey, Andrew, what's up?

2:02:49Jade Warshaw:Hey, guys. Thanks for taking my call. You got it, brother. What's going on? I recently graduated from nursing anesthesia school, and this is the end of an 11-year process for me. And now I'm at the point where I'm trying to put away as much money as possible and also get my mortgage payment down. I'm very lucky to have no student loans, and I'm really trying to see if I'm being a little too aggressive with it because I've been picking up a lot of overtime to try to make this my current plan work. How old are you? I'm 29. 29. Are you married? No, I'm not. So you're just cruising and crushing all by yourself?

2:03:27Yep, cruising and crushing. It's been a good six months since I got out of school.

2:03:31Jade Warshaw:Congrats on that degree. Really, really good. Well, thank you. And how'd you do it with no student loans? I was very, very fortunate. My mom and dad helped with my bachelor degree and my master degree. And I was a travel nurse for two years, which allowed me to save up enough to pay for my graduate or my doctorate program. All right. So hold on. I want you to change your story up a little bit, OK? And then we'll get to the answer of your question. Yes, you were fortunate and you had some help along the way. but unlike me, when I got my first big boy job, you made a choice and that was to save money because you had a different vision for your life down the road.

2:04:07And it allowed you to cashflow a really critically important, um, credentialing and education that now has changed your future in a pretty dramatic way. So yes, you get, you were pretty fortunate and you got some support, but you also, you made some pretty important choices on your own. And I'm proud of you for that too. That's good. So, well, thank you. Thank you.

2:04:28Jade Warshaw:So how aggressive are you? I mean, you're like, am I being, am I, am I going to ham? Let's decide how much are you putting aside, like percentage wise for retirement and how much are you saving towards your mortgage? So my mortgage currently it's a 5.4, 5.49%. It's a$3 ,100 a month mortgage and I'm paying $6 ,100 every month towards that. Through retirement funds, my employer contributes 8.5 % of my monthly take-home pay. So that ends up being around$2 ,500 that they contribute. I also max out my 403B and my 457. So that is right around$2 ,500 each. And then through a brokerage account, I'm putting a little over$1 ,000.

2:05:17Jade Warshaw:So total right around$8 ,500 a month, I'm putting. What percentage of your take home is that? Um, my take home is if I don't work any overtime would be 17 ,000 a month. Um, with the overtime I've been working, uh, that can be anywhere from 25 to 30 ,000 a month. Okay. So here's what I'm putting away a good amount. You are, uh, here's what I would suggest. I would suggest capping at, for the time being, I would suggest bringing your investing to 15%. So 15 % of your gross, okay? Not of your take home, 15 % of your gross. And that's a great place to start. You're going to build plenty of wealth like that.

2:05:57Jade Warshaw:And then whatever's left, if you want to be aggressive about paying off your mortgage, you can do that. Now, the question is how aggressive? Because we do want you to enjoy life a little bit. Go on some dates, dude. You've just spent 11 years in school. Go to some games, go have some fun, get some friends, Go bowling or trivia nights and stuff. You're 29. You have so much time. I mean, this is the time. Here's a question I want you to ask, okay? We're going to run out of time here. What kind of life do you want to have? And you've worked so hard to give yourself tons of options. I want you to have some joy in your life.

2:06:34Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This has been The Ramsey Show. Thanks for joining us.