Stop Letting Fear Drive Your Money

26:51I don't give it away in payments every month. And therefore, if I'm not in debt, I don't need debt, which means I don't need a credit score. Okay. It's a new way of thinking. I know that it is because people don't talk about it. It is. It's scary. It's a scary new way of thinking. But, yes, I see your point. Tell me the fear. It's not scary. What are you scared of? It goes beyond the rent. Because so college will only be four years. And then after that, it'll be he'll probably want to buy a house. And I know it's a lot harder to, you know, obtain a house with no credit score and save up for. OK, so let me let me let me break in.

27:41And I want my colleague to tell you about that fear. Go ahead. Explain it. What if I told you that's not true? Jennifer, I love this call so much. I'm so glad you're with us because you are every woman USA right now calling in. The truth is credit scores, they benefit from us, right? They benefit from us being in debt. They make money off that. When you get a credit card, when you sign up for a loan, there's a little thing called interest. And so there's a lot of people making money off of that. And so that's why you don't see on TV people advertising zero credit scores because nobody's making money off of that.

28:19and so this whole thing is a product but the truth is you can buy a house this it's no harder you can buy a house with a zero credit score it's called manual underwriting and it's the same thing like I told you at the apartment complex all they do it's it's literally the same process but all they're instead of looking at your credit score they're looking at your actual money and they're going okay I've never heard of that I know but it's true do you want to know that I bought my house with manual underwriting, I had a zero credit score. And so just to clarify, not just for you, but anybody listening, a zero credit score is not the same as a bad credit score.

28:56A bad credit score is you haven't done well borrowing money. And so you have a bad credit score or a low credit score. A zero credit score is just as good as a high credit score. It simply means I don't borrow money. And if you were to look at my credit report, it would say indeterminable. and so there are plenty of places churchill mortgage is one that we talk about all the time they're everywhere in the united states except new york and alaska and they do manual underwriting and literally all they look at i'm going to tell you right now they look for 12 months of trade lines and that could be you pay your cell phone bill you pay your utilities that sort of thing online or i'm sorry on time they look for 12 months of your rental history so if he goes to rent.

29:38He just needs to show 12 months. I paid my rent on time. And then they want to see your, I'm sorry. I just said, uh, okay. And then they want to see what you made over the last year. And they'll ask for your pay stubs, just like anything else. And then they go, okay, great. And if he happens to be self-employed, they might ask him for his tax returns, but that is it. And I just want to clear the air for anybody. You're, you're helping so many people right now because a lot of people don't know that this is a thing and it 100 % is. And once Once you know that, all of a sudden it's weird because, Ken, the credit score don't mean a thing but a chicken wing at that point.

30:15It's so true. And I love what you just said. The zero credit score tells people, hmm, this is somebody who's very solid with their money. And that's all they care about is how they're going to get paid. Yeah. So when you prove, as Jade, you know, really laid out well, that you can pay and your son's got nothing to worry about. So that fear is natural, Jennifer, but it's because you've never heard what she just laid out. Most people never have. But she's right. Good. Do your homework on it. Check her on it. I promise you. Oh, yes. It's popular view these days. Fact check us. I think you'll like what you see.

30:46This is the Ramsey Show.

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32:22They'll work with you to explore a payment plan tailored to your situation. You can go to whyrefi.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey. It may not be available in all states. All right. Today's question comes from Randy in Delaware. He says, I've been seeing a lady for over a year and she has borrowed over$1 ,700 from me that she has not paid back. Randy. Ooh. I'm a single father with over$20 ,000 in debt. My wife passed away and I'm living on just my salary. I have a nine-year-old son and my daughter is 24. I am serious about this lady, but it bothers me that she has not fulfilled her promise to pay back my$1 ,700 after nine months.

33:09How do I approach her about this concern? Randy. Listen. Oh, man. You know what, Ken? Randy. Sometimes I read these questions ahead of time, and sometimes I don't because I just want to feel the impact in the moment. What are you feeling right now? I'm feeling impacted. Yeah. How? Well, it's two parts to this, Randy. There's two parts to this. A, you lent her the money. And whenever you loan money, there's always a risk, right? There's a risk that the person's not going to repay it. That's the biggest risk. And then the secondary risk is that because they don't repay it, or even if they do, it will affect the relationship in some adverse way, right?

33:47Those are the two biggies of why we say don't loan money. And you hit the nail on the head on both of them. Number one, she's kind of being a scrub and not paying the money back. And how are you supposed to feel good about this relationship? Because now it has the ability to create like a little bit of bitterness. You take her out on a – Randy takes – let's call her, you know, Sheila. Randy takes Sheila out on a date. Let's call her Sally. Randy takes Sally out on a date. He's not going to feel good about picking up her steak dinner. He's already bothered. He's already bothered. Okay, I'm going to talk to Randy like I would be talking to Randy.

34:23Randy, if you showed up here and we had a cup of coffee, I would look at Randy and I'd say, Randy, I'm going to tell you what the problem is. You are serious about this woman, Sally, aren't you? And he'd go, yeah, I'm serious about her. I'd go, yeah, and she knows it, doesn't she? And he would go, she knows it. She's not paying the$1 ,700 back ever because Sally, is that her name? Sally. Sally. Sally Sheila. Sally Ride. Sally is banking on closing the deal Is this what you think? I know I know what's going on He has made her feel like she's the one He told us in a simple email That he is serious about her She knows he's serious She thinks the 1700 is already their money And he's going to forgive it Because he's going to put a ring on it I don't know Sally could be a rolling stone Sally could be a rolling stone That's like hey Sally is I'm just here for a little while.

35:19All right. Let me flip this for a second. I might get in trouble for this with you, but I'm going to do it. Okay. Get in trouble. If you and Sam were dating, okay, this is not you and Sam real life, but this is you and Sam. Okay. This is male, female. Got you. Got you. I'm with you. Sam loaned you$1 ,700 and you had not paid it back. Same deal. Nine months. You're a human being. This isn't a Jade or Sally. This is a human being and a woman who feels like her man is serious about her. Are you going to be in a hurry? Is any woman going to be in a hurry to pay the$1 ,700 back? I think if I really was like.

36:00If you think that you guys are going to be an item and get married? If I was dating Sam, that means I'm like, I've got respect. And not that I would ever do this, but if I had borrowed money, I feel like it's a great opportunity for me to show what type of person I am. You're going to pay that back if you think you're going to be two instead of one? Come on. This is a human question. I'll tell you. It's hard for me to put myself in that position because I can't even imagine being in that position. I'm going to tell you what's going on. This woman feels like he's in love with her. And because he's in love with her, she doesn't have to pay the money back because it's their money.

36:39There's a guy in the lobby with his thumb up in the air. He knows I'm spitting truth right now. But then why would they even like... That's why he should have never lent her the money. But why would they even come up with those terms if they were on that level? At that point, it's just like... There's no terms. Well, he's clearly saying like she was supposed to pay it off within a term because it's past nine months. No, it wasn't a term. He's saying here, it's been nine months. Where's my money, honey? Yeah. But the problem is she said to him in a moment of weakness, I need$1 ,700, baby. But my point is this.

37:11My point is... Gave it to her, and now she's never going to pay a bank. Ken, you don't go 2015 Rihanna talking about pay me what you owe me, don't act like you forgot, to the woman you love and want to marry. You don't do that. I know. That's what, well, but that's the point I'm making. He needs to reconcile the fact he's never getting this money back. So he needs to close the deal. Close the deal. And then get rid of the resentment. Or it's going to end badly is what I'm getting at. My point is, is I'm not throwing shade at Sally, Sheila, or whatever you called her. I'm saying, I think this is a pretty typical human behavior when you're in a pretty close relationship.

37:49He's the last person she's thinking about paying back. Oh, here's my other point. You don't borrow money. I know. Yeah. He's already done it. He has. So I'm saying to him, pal, you need to marry this woman. I think. I'm just going out here on a limb. Because he's not getting the money back. Okay. I'm the exact opposite. I think she's a rolling stone. I think that he's vulnerable because he's gone through a lot and found a nice-looking lady. And she might have taken a little bit of advantage, but she has no aim to stick around. Okay. Would you also agree she probably has other debts? Yeah. That are much bigger than what she owes this poor schmuck.

38:24That's what I'm saying. He's never getting the money back. Okay. He's not getting it back. That's all I'm saying. He's not getting it. He ain't getting it. Hands up if you agree with me. In the lobby. Look at this. Wow. You guys are really giving this lady a lot of credit. I'm giving her zero credit. I'm just saying she's never paying it back. That's what they agree with me. No, she's not. I agree. She's never paying it back. But I also don't think they're getting married. Raise your hand if you think they're going to actually end up getting married. Okay, see, there you go. There you go. Well, now, in this case, this changes everything.

38:57See, I wasn't even going that far down the road. I was telling him to cut his losses. Yeah, he does. But now, if they cut their relationship losses, he needs to do that sooner rather than later. Agreed. But I think he's smitten. Yeah. Well, she's shown a piece of, I feel like she's, if what you're saying is true, I feel like she's shown a piece of herself. Because there's a little integrity there. Because they're not married yet. He hasn't even proposed yet. It'd be one thing if it was his fiance. He hasn't even proposed. If you borrow money, you should pay it back. Whether it be to a credit card company, your grandma, whoever it is, if you borrow money, pay it.

39:31But relationship one-on-one here. You shouldn't even borrow money or lend money to your fiance. You would agree with that? I would agree with that. I am a, like, I have a hard line on that. I think that if you would like to give someone money and you have the money to give, you should give it. In his case, it doesn't even sound like he didn't, he clearly did not have the money to give. That's why he made it alone. And I think that's when you get into hot water is if you don't have it to give, sometimes you can't give it. Yeah. And that's just hard. you know when people you love are asking if stacy and i were dating and she asked me for money i'd say honey you gotta marry me because it's all yours at that point anyway until then i'm not loaning you a nickel i mean i'm just telling you i'll tell you what sam warshaw did do this is terrible this is a bad this is oh this is don't do this this is he okay my car i was driving a jeep liberty and the the ac and the heat on it was bad and so when winter came my heat wasn't working and he got in my car and was like you've been driving around like this and i'm like yeah he's like i'm gonna get you a car and i thought he was being a hero he co-signed a car for me this is pre you guys getting out of debt no we weren't even married we weren't even married oh you were dating yeah he co-signed a car for me we were just we were just about to get engaged your story yeah this is all part of you and that's what i'm saying like seeing the light That's why I'm saying you might be right that he was smitten because I think that a guy like Love Goggles will make you do anything.

41:03That's what Sam did with you. Yeah. But it's a good thing I married. That's a fact. I married him. Otherwise, he would be up a creek. Here's the problem with our guy. What's this guy's name? Randy. Randy. Listen, here's the problem. Every guy wants to be a knight on a horse. Exactly. Knight in shining armor. And it's one of our kryptonite problems. And this girl bat her eyes at him. And she cried. And he swooned. wound and gave her$1 ,700 and he might as well lit it on fire. All right. Not getting that money back. Just don't do it ever. It muddies any relationship, whether it's romantic or any kind of relationship.

41:38Don't give friends or family alone.

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42:44welcome back to the ramsey show in the fairwinds credit union studio dayton is joining us now from vancouver dayton how can we help today hey there guys um yeah calling in just i'll make it as brief as i can um it's a bit of a mindset kind of thing um my wife and i quite a few years ago we had We had quite a bit of debt, about$22 ,000, and we had worked hard to pay that off. And then since then, we've had three kids, bought a house, and a lot of things have happened and racked up quite a bit more debt. My mindset question to you is, what are some ways that we can kind of protect ourselves from doing this again?

43:21We're just starting the baby steps, and we don't want to get out of debt and then get back into it. There's a lot of shame around sticking to our budget, looking at our finances and stuff. So I'm just wondering if you guys can kind of help us with the mindset of getting out and staying out. So my first question would be, back in the day when you paid off the$22 ,000, what did it look like to pay that off? Was it painful or was it kind of like we're going to do this and once it was done, it was done? Initially, it was kind of painful. Like, I can't believe I did this. Credit card company saw me coming from a mile away at 18.

43:59and then I just worked I was at a job where I could work tons of overtime so I pretty much worked seven days a week 60 70 hours a week kind of thing and we just we worked through it and it felt really good when we got out of debt it was it was a grind getting through it how long did that take I was able to pay that off in about 11 months I think it was so without giving us too long of a story, what happened? Because you said, and then things happened and we accumulated debt again. What type of things? Well, in that window, pretty much right after that, we got married. And then we had our first child.

44:41And then we had our second child. And then I did a career change that cost me quite a bit of money to go to school down in Texas. And then we bought a house. and then we had a third child and you know when you buy a house to make it what you want it you end up spending money thinking that it's going to be okay so what kind of career change was this what are you doing now uh i'm a firefighter now and what did that cost you uh it cost me about twenty thousand dollars to get into that do you still have a loan on that i know so well yeah i guess it's part of my one of my line of credits um i used to get into that and so i'm hearing one of your line of credits and that's what we did to make the house great for three kids yes

45:29interesting yeah um i'm just thinking about what you're saying and first off you haven't paid off the 103 yet right so you haven't allowed yourself to go through that process i'm one i'm a person that i think everything is in the process the first time it took you about 11 months The truth is the debt wasn't that drastic. It probably was uncomfortable to pay it off, but you were able to do it. I think now because more is on the line and you're going to feel this one a lot more because it's you, it's your wife, it's your kids, and you're going to have to change your lifestyle, which you're going to feel that.

46:04I have a feeling that this one is going to stick a little bit more. However, you asked, what's the mindset that you need? And I think I hear the mindset that got you into it. And I'll try to give you an idea of the mindset that got you out, that's going to keep you out. Which is, I think, Dayton, a lot of times when we're in our life and we've got our money, we start to develop kind of an I deserve mentality. and it's not, it doesn't have to be ugly. It's just kind of like, I work hard. I deserve to spend, right? I deserve to spend money on the things that I want. I deserve to have the lifestyle I want.

46:42I deserve to have the car and the house I want. After all, I've worked hard. And if we're not careful, that can really, really, really do us in because that's what's happened to you. You listed it. You're like, well, we had kids and then I wanted this career and then I wanted this house. And it's kind of like, what other thing would cause you to go into debt other than the fact that you think you simply deserve to have those things, right? I mean, is that fair enough? Yeah. Yeah, I would agree with that. And then the other side of that I deserve is you're also seeing what other people have. And it's like, well, how do they deserve that?

47:15I deserve what they have because the people around me have the house, the people around me have the car. And so you're making that comparison and you're trying to keep up with the things you see. Is that fair enough? Yeah, yeah, to a degree. I mean, like I never, we don't buy any nice cars. We don't have any car payments or anything like that. It's been, but yeah, totally lifestyle, like wanting to do things with the kids, wanting to make sure they got a nice space, pretty place, you know, that kind of stuff. And so I think the mentality going out of it, and don't get me wrong, I think coming out of$103 ,000 of debt is going to change you in a different way than coming out of $22 ,000 of debt is.

47:49But I want you to adapt the mentality of what you truly deserve, which is you truly deserve to have a good night's sleep without debt over your shoulder, right? Ding, ding, ding. You deserve to feel good about the money that you earn and that it's enough for your family and not feel like it's not, you know, because the opposite is what makes you go out to get debt. The opposite is what I'm contributing is not enough. What I'm bringing and earning is not enough. Therefore, I must. And then you go to all these debt sources. But you deserve to feel good about the life you're providing for your family.

48:22Dayton, I want to flip that. She's right. But let's just for a second, let's be real gut level honest with each other, the three of us. What are the emotions you're feeling, the negative emotions attached to this debt and those debt payments and that interest and all the things that you now obviously regret, which is why you called today. And you said, how do I keep from doing this again? What is the most negative emotion? Describe it. Well, I would say it's like massive amounts of shame because I was in a good position and I've made good money for a lot of years. And I'm back to making good money now.

48:54And it was a lot of shame to like look at the finances. I knew they were getting out of hand, but I literally, like, every time I think to open up the banking app or do my budget, my immediate thing is like, oh, don't do that, man. Like, you're just looking your failure in the face, right? So that would have been how it got out of hand for sure. How much stress? How much pressure do you feel? Oh, lots. Like, especially now looking at my new two-month-old baby and, like, thinking, like, because I'm the sole income earner in our family. Thankfully, my job allows for that. What if I told you I could snap my fingers and take away the shame and take away the stress?

49:35Well, how would you react to that? I know it's a fantastical question, but how would you feel? How would you feel? I know it would make me feel better, that's for sure, if I'm not carrying that baggage around, right? Okay. Right. So my two cents on this is the way that you keep from ever doing this again is to, in these moments, on a daily basis, remind yourself how awful this feels. And I don't ever want to feel that again. Like that, to me, if you talk to somebody who's lost a ton of weight, somebody who beat some type of an addiction, and I've been able to interview people like this, I know people in my personal life.

50:11if you trace their story of when they recovery you know we've heard Dave say this for years on this show on stages it's the I had it moment you know you've talked about that you talked about it earlier in the show today I think you have to bottle this emotion not to stay with it and I really want you to focus on getting out of that shame because we all carry shame and it's powerful but I do think you need to sit with it long enough to go I don't ever want to feel this again And it's actually really simple to never get back in this again. You can get out of it. You've done it before. You're going to do it this time.

50:44But to never get back in it, he goes, I don't ever want to feel it again. And I have total control as to whether or not I ever feel this way again. And I think that will be really helpful. So get your chin up. Walk the baby steps. You can do this. Throw off that code of shame. You're not a deadbeat. You're not a jerk. You're not a loser. You're not a bad man. You made a bad financial decision. Walk into the club, pal. You're going to be okay.

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52:00Exclusions apply.

52:15the ramsey show continues i'm ken colman jade warshaw is alongside triple eight eight two five five two two five is the phone number laura is joining us now in los angeles laura how can we help hi um i my husband and i already know a lot of debt from small business we started and i need you to guide me how to get out of it I guess all right give us some numbers okay so we're talking if we're combining personal and business it's about like 150 okay how much is from the business though I'm just curious um well I would say all of it because we put in from personal into the business but just the bit like the credit cards would be like 90 000.

53:03okay and what's the rest of the the debt they're all they're all credit cards all of its all 150s on credit cards yes oh my word we even opened up personal loans to pay for the credit cards so we can have more space for the credit cards it's a mess so how many credit cards total um i would say there's about seven seven and then you said you have personal loans open too is that included in the 150 or is that what is that yes that's included in the 150 okay so your thought is like hey we use these personal loans to pay down the credit card to clear up more space so we can borrow more on the credit card exactly what's the what's your income situation are you guys still working in the business no no we it took us a while but we brightened up to part to close that business well it's still open but it's not running okay so what's your income my husband makes about I would say 120 and I make 80 we each have jobs.

54:16Got it. Okay. So we've got$200 ,000 combined income. Correct. Okay. Do you have any other debt outside the 150? I know she asked you that, but I'm just totally clarifying. This is all of your debt. Well, yeah, we have a mortgage, a car, if that's what you're asking. Yeah. We want to know. Total debt. Tell us about your cars, your student loans, anything that you owe money towards that you make a monthly payment towards, we want to know about it. So go ahead and tell me your mortgage. I'm just curious, what do you owe on it? I would say we owe it like$400 ,000. So monthly, I paid$3 ,300 for mortgage.

55:02The car, I paid$700 a month. I think there's like$19 ,000 left on it. we have a leased car that's$400 a month my son's school is$850 a month is that private school or is that daycare? private school okay how old is he? four okay okay keep going my school one is$400

55:37so our personal loans his is 1600 a month mine is 850 a month okay and how much but that personal loan is included in the 150 you told me earlier yes okay tell me um when you guys get your paychecks like after everything's taken out what do you take home every month what's your check look like both of you combined mine uh yeah mine is about two thousand and his is about oh no that's on every other week so four thousand about nine thousand for him okay that's the good news so 13 net and just a real quick question i don't want to get bogged down on this but why is the four-year-old in a private school?

56:24Because I don't want him to learn anything. Right. But is it pre-K? Yes. Okay. So he doesn't have to be in pre-K. I'm just wondering, right out of the gate, there's some money there, yeah. There's some money to be saved on some home care maybe versus, but there's bigger issues going on. but y 'all gotta y 'all gotta like cut back big time big big time there's the bumper stickers that jade's about ready to walk you through well i think that's i mean jumping off with with ken's point could be a good place to start you know the only way to get out of debt is there's two methods you could invoke here you could work more right to have more margin uh you could also cut back on your budget to find more margin or you can do a combination of both um and to ken's point that school might be a great place to start because I don't know what you were going to say as far as like I don't want them to learn certain things I it might be some of the same feelings that I have and my kid is in private school but for right now it's okay um or in there in daycare and for right now it's okay so it might be worth it for you to invoke that when they get a little bit older could be that it's your kid yeah I was gonna say I yeah and I may step on toes here but since we're here, I'm going to go ahead and say it because I know a lot of Americans are thinking this.

57:44So I'm going to go ahead and say it. Get in there. You might have to put your hat on. I don't remember anything from my 12th grade year. Your four-year-old, no matter what they're trying to teach the kid. I mean, I get it. I'm not in LA. I get it, but I don't know. I would be looking to save$800 a month tonight. Yeah. I mean, at the end of the day, what matters most is what you teach them at home. Yeah. But again, I know we're really getting into your personal life. I know, and I got to be careful. I'm not judging you. I'm just saying, you know, the four-year-old, we could cut that. That's$800 a month.

58:15That's$9 ,600 a year. It's a lot. For where you're at right now, it is a lot. We just want to highlight that it is a lot. Next thing is I'm looking at possibly both of these cars. I want to know about how you can get out of this lease. When is this lease over?

58:35Very soon. I would say like four months. Okay. And then your option, you just turn the car in and you're out. Yeah. Okay. So I would do that. Don't try to buy back the car or nothing like that. Just get out of the lease. And in the meantime, do you have any money saved? No, everything is gone. Okay. Then what I'd be doing, knowing that this lease is about to come up, I'd be like, we got to stack up$3 ,000 because when this lease goes away, we need to be able to buy a car in cash. And that's what that, that's kind of the car plan. And so write that down in your notebook as when we turn in this lease in three months, in three months we'll also be buying a$3 ,000 to$4 ,000 car.

59:12I know you have the margin in your budget to do that. Okay. So that deals with one car. Let's talk about the$19 ,000 car. Do you know what that car is worth? The payment was kind of high. Didn't you say it was like$700? Yes. I think we bought it at$50 ,000. Okay. Do you know what it's worth now? I don't. Okay, that's your second piece of cart homework. I want you to go on kellybluebook.com, look at private sale, because it sounds like if you bought it at 50 and judging by the height of your payment, I feel like you've been paying this off kind of fast. Is that am I wrong? No, you're. Yeah, you're right.

59:53OK, so you might actually you might not be upside down. And if you're not, I would still get out of this and get into something cheaper because the seven hundred dollar payment, you need that money. and so now we've just found$1 ,100 in your budget with these cars and you need every dime of that to go towards paying off this credit card debt. The good news is, I mean, you guys have a good income. It's not wonderful for LA, but it's wonderful for the rest of the country. Yeah, and it's doable. And again, not telling you what to do with your kid in school, but if we take the$800 on top of that, now we're right at the doorstep of$2 ,000 that we found in your monthly budget.

1:00:31That goes a long way to paying off$150 ,000 in debt. Okay, because now you're looking at if we just take$2 ,000 a month that you found and you put it towards debt, that's$24 ,000 a year. That's a long haul, right? And this is a drastic change of your lifestyle. You're not going on vacation. You know, you aren't going out to eat. You guys are going to have to really hustle. But again, my co-host today, this is a woman who her and her husband and paid off half a million dollars. She needs a little pep talk as we go into the break here because mindset-wise, what has she got to be thinking right now?

1:01:10You've got to be thinking. The hard part is you're making a good income and to not be living in that income feels like, oh man, I've been working hard. But the time will come when you do get to do that. So just hold on. If you clean up this mess, you're going to enjoy your income like you never have before. Right now, you've kind of faux enjoyed it with all these things on payments and it's not all it's cracked up to be. But if you walk through this journey, you're going to get to enjoy the fruit of$220 ,000 plus a year with no debt and payments. You can send your kid to the school that you want to and you don't have the stress associated with it because you'll actually be able to afford it.

1:01:47You can do it. You can. Appreciate the call. All right, quick break. Jade Warshaw, Ken Coleman. This is The Ramsey Show. We'll be right back.

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1:03:05Welcome back to the Ramsey Show America. Thrilled that you are with us. It's where we help you win in your money, in your work, and in your relationships. I'm Ken Coleman. Jade Warshaw joins me this hour. The phone number is 888-825-5225. And Jade, across the studio, through the glass, on the debt-free stage, in the lobby are some folks. And that means we've got a debt-free screen coming your way. Gary and Melissa, welcome. Thanks. Thanks. All right. Where are you guys from? From Belle Plain, Minnesota. Belle Plain, Minnesota. Is that near Minneapolis? Just south Minneapolis. Okay, good. Boy, are you just excited to see the sun this time of year?

1:03:43Yep. There it is. All right. So all this way to do a debt-free scream. Very exciting. So let's hear the numbers. How much debt did you pay off and how long? We paid off$165 ,000 over 47 months. All right. Wow. Wow. And what was your range of income? We started at about a 160 and ended at about 200. Oh, what led to the bump in pay? We just leaned into our careers. We both earned promotions and stuck to it. What do you mean by promotions? He moved from a factory position to a safety manager, and I just kind of took different roles at my current company. And what are you doing? I'm a client relationship manager.

1:04:23Okay, fantastic. That is awesome. All right, what was all this debt? What did the 165 get comprised of? By the time we finally got down to just writing everything out, we had a HELOC that we had been leaning on. We had a car, and then we had a credit card that we were just kind of paying off every month. So that was probably the smallest and easiest one to pay off. Okay, so pretty good size HELOC. Yeah, it was about$40 ,000. Yeah, we used it to remodel our basement and then kind of kept it and kept it going. Okay, all right. So tell us, 47 months ago, what happens? What was the catalytic moment to lead you on this journey?

1:05:00Yeah, so he was going back to school. It was his last semester. And we had found we were kind of, we were trying to cash flow it, but we'd get a little short. So we'd pull a little bit out of the HELOC. We were getting kind of sloppy. And as last semester came up and the tuition payment was going to be due and we finally said, this is it. We're doing it in cash. And we had about two and a half months before that was due. And we did it. And that was kind of our biggest victory as we got started. That's awesome. So you're funding education out of the HELOC. A little bit. Yeah. Cash flowing it. But then we were kind of filling the gaps.

1:05:33We were just being sloppy. There was no reason for it. Yeah. So what was kind of like you hit the moment of like, listen, we're not going to do this anymore. We're going to start paying cash. What how did you find Ramsey? Like, how did you find like this? And this is the way we're going to do it going forward. Yeah. We knew about it before that. We just weren't following it. We kind of thought we were doing good on our on our path. You know, we were kind of budgeting. but then it was just like just tired of the revolving debts like this year it was a HELOC a couple years before it was a 401k loan it just kind of things we were just it was a shell game we were just kind of moving the debt around and just got tiring it does get tiring so you're working the baby steps is this you're getting on a budget is this you guys picking up extra work or is this like listen we're just tightening up on the budget we're just getting very clean on what we're doing tell us about that yeah it was pretty much just us tightening it up as much as we could cutting out any unnecessary expenses.

1:06:26We didn't have any side hustles, but we tried to do more experience-based activities with the kids. You know, we do a lot of camping, going up to the cabin, stuff like that. So just try to cut out those unnecessary expenses. Do you do the ice fishing in Minnesota? Do you guys do that? We do, and I guess spearfishing is probably more than ice fishing. I learned about that. I don't want to go down the rabbit hole for the rest of the people who don't care. But you talk about camping and all that, And I heard about how you do the ice fishing. Like, it's like a whole thing. It's like a whole experience.

1:06:56Everybody goes out and all that jazz. Yeah, it's fun. No, I don't think it is. I'll be honest. I heard it described and I didn't think it was fun at all. But much, much love to you on that. All right, so let's talk about this. Was there a beginning point that you guys said, okay, we heard a little bit about this Ramsey stuff. Now we're going to do it. Was it hard or was it we were on the same page? what was the beginning of that journey like when you finally said all right we're committing how I mean was it hard for you or did you just roll right through it it was a little bit of getting on the same page we started with that first goal of getting that last tuition payment and then from there it was adopting the budget which I wrote out the budget I'm the nerd took him a little bit to get into the budget but once we started rolling then we were both fully bought in yeah I was reluctant at first it was uh the idea of getting on that budget was a little rough um but once you saw it start to really work that's when i brought bought in all the way so relate to that a little bit because i know a lot of people dislike budgeting right they hear the word budget they think it's a punishment they think it's something that's holding them back uh what changed that for you because i i love talking to people who don't like budgeting and changing their minds so the one thing that was neat is Melissa printed out this kind of like detris, debt, Tetris.

1:08:18Uh-huh. like all the little pieces equal to a certain amount of money. And we had that sitting on our refrigerator. And then every time we were paying off any amounts, uh, Melissa was really good at filling in those spaces. I like to fill it in. So you like to feel the milestone. Like you want to feel the milestone. You're celebrating. It's kind of a fun process. And it was a way to see that work. And we did the same thing with our house where we printed off a picture of like balloons holding up our house and each one was a certain dollar amount and now wait a minute did you pay the house off we did what oh you didn't tell us that wait a second i was digging i was like 165 i was trying to figure out how big was that credit card listen you paid your house off wow okay okay okay that makes a little more sense yes we just got into it guys i need you to shout that from the rooftops.

1:09:10Yeah. You guys are like, ho-hum. All right. Now, who are your biggest cheerleaders on the way? I would say we've got some family that was walking the journey along with us. And then my parents, we just like to talk money. You know, there's more that's caught than taught. And it was those conversations that just kind of kept us focused and motivated. Wow. That's awesome. So what's next? You got to pay for a home, no debt, life is good. What do you do what do you do to celebrate and don't say ice fishing well we came here okay um and then we've got some fun projects for the house now that it's all done we've kind of it's time to have some fun there yeah and you don't have to take out a heloc to do it that's the best part speed of cash that's so fun all right i see the kiddos over there um let's bring them up and then we're going to talk about them for a second we've got uh tell us who they are and the ages yeah we've got Charlotte is 13, Calvin is 11, and Caleb is seven.

1:10:05Okay. And so how quickly did you bring them into this journey? And then how involved were they in the conversations around this? Because you just said, Melissa, that you and your family talk about money. I'm guessing these kiddos have a pretty good idea about what we're about to do. Yeah? Yeah. Oh yeah, they do. They listen to the podcast with us a lot of the time. We have the game at home. We've played that a few times. You know, our debt trackers were up on the fridge, so they saw it the same as we did. So it was really a family journey. They knew kind of what the goal was and why we did things the way we did.

1:10:40Okay. And no griping, no complaining. They were pretty good soldiers. No, they're pretty good. Okay. Pretty easy. That's awesome. I love it. Well, this is really exciting. Well, listen, before we do the screen, I want to let you know we're also going to give you some gifts here. One is Dave's Total Money Makeover. That's for you to give to someone else because you guys have actually done this. And then Baby Steps Millionaires, Dave's latest book, and that's where you guys are headed probably pretty quickly with the income you guys have. So those are our gift to you. All right, let's do this. Is the team ready?

1:11:11The kiddos, have they been practicing? They're old enough to – I've got to hear you guys. I don't want to hear all those different tones coming out. Let's do this thing. We've got Gary, Melissa, Charlotte, Kelvin, and Caleb, all from the Minneapolis area. They paid off$165 ,000 in 47 months, starting out making$160 ,000 and ending at$200 ,000. Let's go, team. Let's hear your debt-free scream. Three, two, one. We're debt-free! I heard them all. I heard them all. Did you? I heard every voice. You're the professional musician. I picked up all three voices. I don't know what you call them. I heard all of them.

1:11:50There was no harmony, but I heard all three. Well, you're tough. You're a tough one to – it's like a judge from American Idol. That's right. I would never want to do that in front of you. But this is a great example of how a family's tree, as Dave has said, for decades changes. So very, very cool. True that. Awesome stuff. All right. Don't go anywhere. We've got to take a quick break. Jade Warshaw, Ken Coleman with you. This is The Ramsey Show. We'll be right back.

1:12:26so

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1:14:09Welcome back to The Ramsey Show. We're here to help you win with your money, win in your work, and win in your relationships. 888-825-5225. 888-825-5225. Thrilled to have you with us. I'm Ken Coleman, and Jade Warshaw is alongside. All right, so what do we got here? We got a Ramsey Network app question. Is that right? Now, is this audio, James, or am I reading this question? Just reading this one. Okay, I'm sorry, folks. I didn't do my production notes, and I thought, I'm not going to try to fake my way through it. I'm just going to ask my erstwhile captain in there. And sometimes we listen to these, sometimes I read them, and I didn't pay attention to my notes.

1:14:52Kids, this is why you study before you take the test. All right? All right, today's Ramsey Network app question. By the way, the network app, I just want to say this very briefly. This is fantastic stuff. We'll remind you later in the show, but we have just exclusive content over there that only people who have the app, and you can get it in the App Store or Google Play, can listen. It's just a part of the show that no one else can get. We'll remind you about that later, but fantastic app and a lot of great content over there. So this question is from Jane. She asks, after many stops and starts in college and throughout my career, I realized I'm passionate about filmmaking, in particular helping to fight and advocate for people who don't have a voice.

1:15:28I've since learned that it's hard to make money in this profession. Can you give me some advice on some things that I can do where I can actually earn a living? Oh, my, my. Wow. That's an open-ended question there. Well, here's the quick advice is you need to find work, different types of gigs in many different lanes that all have one thing in common, that allow you to use what you do best, that's your skill, to do work that you really, really enjoy that produces a result that matters. So you say you're passionate about filmmaking. Okay, we love the artistic filmmaking. and then you add in the specifics of you the results that you want to produce from filmmaking ideally would be to fight bad things to advocate for people who don't have a voice so there is an activist an advocating type of film or art that you want to put out so for instance this could be documentary filmmaking obviously we see a lot of this yeah and so someone has told you or you have listened or you have uh started the process of trying to get into filmmaking and what you've discovered and what she's discovered jade is this thing called a ladder yeah gotta make yeah and on the lower rungs of ladder jade we don't make a whole lot of money peanuts sometimes yeah and so if i might could i go back into the way back machine way back take us way back back in time I'm 31, 32 and realized that I really want to go into broadcasting, but I do not have a degree in broadcasting.

1:17:03I had no experience in broadcasting. I just had what I thought was the gift of gab, but I mean, hadn't tested it. Yeah. I have three little kids. You know my kids. I do. They were littles. And that means I got to provide. And fabulous wife and a puppy and the whole nine yards in the house. And so the reality was, is I began to do the work like Jane had to discover, okay, what does it look like to work in the film industry? What does it look like to work in broadcasting? And what I found out pretty quickly was on those lower rungs of the ladder, it wasn't going to feed the family. So what I did is what my advice for Jane is or anybody that's listening is, is I had to have a day job that took care of business.

1:17:47and I was then going to have to part-time get into broadcasting, get a little experience here, get a little experience there, and over time step into it slowly. In other words, embrace the latter. So you've got to have something else to fall back on while you're trying to get into filmmaking. So I wish that the device was clearer. I wish it was better. It's not. If that's what you want to get into, any type of artistic form of telling stories or whatever, If you could find other causes, maybe you go work for a nonprofit, you know, and you actually then begin to do video work for them instead of going into the film industry and then telling stories.

1:18:28That's about all I can ideate on there. You want to add anything to that without having her on the phone? Yeah, I agree. I think you're right. There's a part of this. You have to pay your dues. And I do think when it comes to the arts, when you're first starting out, there is a part of that dream that you have that you do have to generalize in the beginning because you got to take opportunity. And it's kind of like music artists. When they first get signed, they have to, you know, the machine decides what they're going to do. It's not until they're in it for a while that they finally get to go.

1:19:00Now I do the songs I want to write. Now I do it my way. And so it might be a while for her before she's doing what she labeled here as, you know, helping people fight and advocate for people. Just understand it could be a while before you do it exactly the way that you want to do it, and that's okay. You know what song I'm thinking about? I don't. I did it my way. How about that? I got to sing. Yeah, my grandpa used to sing that. I love that. There you go. James is so happy right now. Good. Good job, Ken. Yeah, I thought it was on key. I really thought it was on key. A little bit of a crooner kind of feel there.

1:19:32We're going to move on quickly. Paul in Hartford, Connecticut. Paul, how can we help? Hello, guys. How are you? Good. What's going on? So, basically, I'm kind of in a predicament right now. Last week, we were at a family reunion. My dad came up to me and he just basically asked me to take a loan for him of$20 ,000. For what? Just casually. Yeah, just casually. For what? um he says he has some business going on he didn't give me any details uh i know i don't need to take the loan out okay i just want to know how to basically you know turn him down without having any issues um okay clearly and quickly hey dad pops listen thought about it for about two seconds uh no not gonna do it love you dad you're awesome not happening what would you add to that I thought he was going to say, I just want to ask you guys what was wrong with him.

1:20:38Well, I think he's kind of wondering that too. Yeah, listen, I'm glad that you know that you're not going to take out this loan. I think the way to do that is just simply say, Dad, I don't borrow money, and so I can't help you borrow money. That was much nicer than the way I said it. Yeah, right. No, Paul, seriously, Jade's right. I think you're respectful. Yeah, be respectful. But you're like, Dad, I don't believe in debt, and I can't do this. I'm so sorry. If you want to be really polite and really respectful, I just roll differently in that situation. Like if a family member, especially my dad, comes to me, I'm going to be like, Dad, you know what my honest answer would be?

1:21:19This is not what I'm recommending. But I literally would have been like, if he rolled up on me at a party like that, I looked at him and went, do you have a fever? Should you lie down? Can I get you a cold rag and a glass of water? Have you lost your ever-loving mind? That's what I would have said to my dad. Is this normal? Has he asked, like, is this a habit that he'll kind of hit you up for some money here and there? Not me, but some other family members, yeah. Okay, because it felt so casual. I wondered if it was normal. Yeah, is it that he wants you, I'm just curious, is it that he wants you to just fully take it out in your name, or does he want you to co-sign, or what is it?

1:21:52Fully take it out in my name. Oh, my gosh. Yeah. That's different. Okay. Yeah, I mean, you just got to say no. And at this point, resist making it about the details. I know I just asked details, but resist making it about like, Dad, you didn't even show me a plan or you didn't even tell me what you want to do. It's not even about that. It's just, Dad, I can't take out debt for you. I'm sorry. I don't think Dad has a plan. I think if he'd asked for details, his dad would have told him a fish story. I just don't think there's anything there. Yeah, Paul, listen, we're having a little bit of fun with what is a really tense situation.

1:22:26I just think you've got to take the high road, really high road, but do not have a conversation about it. To the extent that when you tell him, you make it clear to him, there is no conversation. This isn't like he gets shot at a little bit of a negotiation on this. How will he react? Honestly, I was just shocked. I didn't react at all. I was just shocked because it's a huge amount of money. How will he react? How's he going to react when you tell him no? uh i'm not sure but he's not gonna be happy oh you're sure that chuckle was a chuckle of experience yeah it's uncomfortable come on man yeah yeah this is tough sorry man i hate that that happened that's that's awkward yeah it's an awkward situation let me let me take this above paul real quick give our audience 20 seconds on why they should never loan family any money as a general principle oh well what dave ramsey would say is it makes thanksgiving different.

1:23:26Dinner tastes different. I've done it, by the way. I've borrowed money from my mother-in-law who is a wonderful, generous woman, and it's not on her. It's on you feel it. No matter what, it doesn't matter how great or nice they are. You feel the weight. Don't do it. There you go. Great hour, Jade Warshaw. Thank you, America, for listening. This is The Ramsey Show.

1:24:09Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Alongside Jade Warshaw, I'm Ken Coleman. Steve is now joining us in Columbia, South Carolina. Steve, how can we help today? Yeah, hi, Ken. Hi, Jay. It's great to be speaking with you guys today. Yeah, good to talk to you. So I'm on the cusp of finalizing a divorce, and we came to a mediated settlement. And as part of it, basically there's a 50-50 split of the 401k. But then I also have to come up with$100 ,000 in cash in 90 days to buy her out of the house. And then additionally, there's a$150k lump sum alimony payment over five years.

1:24:49So kind of two questions is basically, how would you guys recommend coming with the$100k? because I got some advice from the lawyers that I didn't really appreciate, and clearly they weren't part of the Ramsey program. And then I treat the alimony payment going forward. I treat it as a debt in the baby steps or as like a line item in the budget going forward. Why don't we address that one first, Jay? Tell them about where that goes in the budget. The$150 over five years, have you calculated it out and seen what that looks like monthly? Yeah, it's about$2 ,500 a month. Can you afford that? and it and it fits yeah okay good so yeah that's a line item on the budget um i would do it that way especially if you can afford it what's your income about 180 a year okay good so it ends up being about about like eight eight thousand a month okay okay so the 100k in 90 days to buy out the house yeah why'd you agree to that uh so it's it's definitely definitely the house uh it's um uh in terms of everything else available in the area uh there's there's no way i'd be getting anything close to this and um but i'm talking about the term the time like do you have a hundred do you have a hundred thousand dollars yeah so that's exactly it i think i think it was a matter of kind of signing it and not really paying attention to that 90 days.

1:26:18I've got about$55K in cash right now. Okay. Well, that's a good start. How much is your car worth? So, not much. It's a 2007 Subaru Forester. What happens if, let's come at this thing from another angle. I'm trying to figure this out for you. What happens if in 90 days you don't have$100K? What is the kick in the contract? What agreement? It's just part of the court order. I think it'd be going back in front of the judge. I think that's your best bet. This was a bad negotiation on your part or on your lawyer's part because you can't get the money in 90 days. When this goes back in front of the court, you need to have a better plan of what that is.

1:27:06Why not sell that? I was going to say the same thing. thought was basically kind of part of the quadro from the rest of the 401k. So my half of the 401k used part of it to be able to pay her off. That was your plan? That was the original thought. And then, again, the lawyers even suggested doing a home equity loan, which I flat out just rejected. I thought that was a bad idea. Because you have to put yourself, you have to reverse the situation and say, if I were in any other setting would I borrow from my 401k to buy a house no you wouldn't would I take out a personal loan you know to to up the ante on my house no you wouldn't um and that's the way I'm looking at it I think that you either need to give yourself more time if this is like something that you're like I love this house I don't want to give it up I'm never gonna have a house like this again you either need to give yourself more time I mean I've talked to people where there's years to come up with the money.

1:28:08Not that I want you linked to her for that long, but... Do you have kids? Adult kids. So she's in college now, but yep. Okay, so where's your ex going? She's just going to go rent somewhere? Starting a new career in another state. Okay, I'm going to come back to this because I... Now again, I've never walked through this before, so Jade and I are kind of on the same page here. Well, I'm thinking about you could do maybe a cash out refi. I don't know if there's, because you have to take her name off it anyway. I would sell the house. And do you have any equity in it at all? Yeah. And that's basically what I'm buying out of.

1:28:43How much equity do you have in the home? About 200K in equity. So why wouldn't you, I mean. I don't understand given that equity stake that you have. This is just a house and it's got a bunch of pain attached to it you are single you got all this money that you that you're gonna have to pay out uh over five years i i personally and again i don't know what you think about this i view it a little differently i know well because i'm giving you another train of thought i'm not going to advocate for my point of view i'm going to say if it were me i'd sell the house if if are the kids involved exactly what's been going on in my brain so to sell it no no no just the back and forth so there's yeah like you said there's i like a clean start in this situation there's there's that but then there's also i mean you did make a good point earlier where you said with the market and when you bought this house you might not be able to get something like that again and i do feel that if emotionally there's not the attachment that ken and i think there might be and you want to keep the house yeah standard is you would refi get her name off of it and then you would pull the cash out when you refi and then she would get her portion the only reason i kind of disagreed with ken's sentiment initially is because the hundred thousand is her money it's not you giving a hundred thousand of your money at this point now that is her money because you're separate so there's a different way to look at that it's like hey i'm just i'm just giving her her money i'm not giving away my money if that makes sense um right so that's if you want to do the 90-day deal that's how you would get it um but ken has a good point do you really want to be in this house or is it worth it to you to maybe get less house and have a fresh start that's the question only you can answer that yeah or rent for a bit right i mean your life's not over.

1:30:38Yeah, I definitely know that it's starting over, but yep. Yeah, and it's not over. It's starting over, so there's a whole lot of new things coming your way. So again, I don't want to advocate for it. That may be too aggressive. How long were you married? 20 years. 20 years. Oh, listen. Ken may have a point. The kids? Do you have kids? Yeah, remember they've got the... Oh, that's right. That's right. Is it just one? College. Yep. Just one. Ooh, yeah. You got your work cut out for you in terms of sentimental thoughts versus fresh start thoughts. I mean, you make a good income. I've been working through those.

1:31:15I'm not advocating, but I am going to say, because I like when you push back. So keep pushing on this. But in your shoes, if you sell this house, then you're able to pay her her money and have that done. Set aside, put it away, get it over with. That's what I would do. I would want a clean break if I could do it. And I'm just looking at the numbers. You're going to have to pay her$100 ,000 in 90 days, and then you got$150 ,000, which is alimony, over five years. That's a lot of money coming out of your pocket. It could be nice to have a smaller. And I'm just saying I might rent for a year, reset my life.

1:31:54I don't think renting for 12 months is a bad idea for a guy in your shoes. get rid of the house move on into a new chapter of life and another okay i'm gonna throw something else in there and this is soon so don't don't be mad at me but you'll move on at some point and meet another lovely lady i'm expecting you want to bring her into that house or do you want to bring her into you know fresh start steve yes we'll see about that one but sure i i know i jumped ahead but do you see what I'm saying like there's begin with the end in mind is what I'm saying yeah I I don't know I don't know why I feel that way but that's what I would do in that situation and just start you're not wrong Ken start fresh get her the hundred thousand that's her money to your point and now work on the rest of it oh divorce sucks hate that for you yeah me too

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1:33:37You're listening to The Ramsey Show. I'm Jade. Next to me is Ken Coleman, taking your calls this hour about your life, your money, your business, your relationship, your career, whatever's on your mind. We'll be here to help. We'll go to Los Angeles, California, where we've got AJ on the line. What's going on, AJ? Hi, Jade and Ken. How are you both doing? Great, if I do say so myself. Yes. What's going on? Awesome. Awesome. Well, first of all, thank you guys for taking my call. I'm calling because I'm starting a real estate media business here in California. I'm very excited for it, and I have support from friends and family.

1:34:15Just the one thing that keeps bothering me, I guess I could say, is just a fear of AI. I have this fear that AI could essentially replace my work and could make it less valuable. And I really just wanted your guys' opinion on it. Yeah. Be more descriptive. Give me a 30-second description of what your company's service is going to be. What do you do for folks? Yeah, of course. Do real estate? There we go. It is a new company, but we're going to specialize in video work and more lifestyle work for agents who sell higher-end properties just to help elevate their brand and make it stand out from the rest of the market.

1:34:56So you're a production company, and you're going to be shooting video of their homes, the inside of the homes, outside, making the homes look great, but also making them look like those big shots on those reality shows. Selling sunset. Selling sunset. Thank you. Yes. That's what you're going to do. But you're a video production company. Exactly. Okay. So AI. How is AI going to affect the video production industry? Have you done any homework on this? Have you begun to see trends? So I've just seen things where editing work is being replaced, where a lot of the background work is being replaced, like stuff behind the scenes.

1:35:34So I'm just seeing that trickle in to that part of it. I'm not really seeing it on the front end, but it kind of worries me. Well, but let's keep playing this out. So I'm leading you down a path here. So if AI tools allow you to do the editing or your team to do the editing quicker and better, does that replace you or does it enhance your business? I would say it enhances the business. Yes, it does. Absolutely it does. And so what you have to look at is Okay, so I had cigars with a very successful movie producer About two weeks ago, Jade And he told me, point blank And this guy, he's producing the latest rock movie That's coming out next year So this guy's big time And he said to me, and was showing me on his phone A full movie trailer That was AI start to finish Not one real person in it That's wild.

1:36:35All right, now, I bring this up to say, in this case, if I was an actor in the actors' unions, and that's already happening, that's why the latest strike happened in large part, what is AI going to replace real actors? Because if you can do a blockbuster action film and not pay an actor$20 million. That makes me so mad. I'm getting angry sitting here, Ken. So AI would threaten actors, no question. Yeah, 100%. And he told me as much. I'm getting mad. You cannot replace creative people doing creative things. I'm just putting that out in the world, not to you. And he doesn't want to, by the way. He's not pro that.

1:37:13He's just going, somebody's going to do it. It's going to be crazy. So everybody's going to have to adjust. All right. Now, all that to say. No one will ever connect to it. I'm just saying. I'm putting that out there. To AJ, someone's going to have to always do the filming. Someone's always going to have to consult the realtors on their brand. AI cannot do what a human doesn't program it to do. Make sense? Yeah. So I would run it through that. Instead of just letting your fears run wild, go, wait a second. Will the human touch be more needed than ever in my industry? And I think the answer is yes.

1:37:47It is yes. AI cannot do what you're going to do. And the truth is, let's put it through, you know, obviously AI is new territory for a lot of folks. But in many ways, it's not right. There's always been a tool available to do something easier. That's right. And as professionals, we get to decide, are we going to be the person who picks up the tool or not? Right. And so there's always a vacuum cleaner. Some people don't want a vacuum. So they call a housekeeper. There's always. Or you get that one that just roves around. Yeah, that's right. That's technology. Roomba. Yeah. And so, I mean, right now there, there, there are more apps than ever before to make, you know, uh, digital, uh, digital media and all that kind of stuff.

1:38:29But some people are like, I don't want to learn how to use those apps. So they still go to, to, uh, companies that'll do that for them. So the point is, as long as there's tools, there's always going to be people who go, I don't want to learn how to do that. And you're still going to have the available, the ability to do it for them. Here's what, last point on this. AI folks, for our large audience, if you learn how to work with AI and use AI and also find yourself in industries where the human touch will always be premium, then you're going to be fine. Yeah, I like that. It's going to make us want human more.

1:39:04It is, Ken. It really will. I, you know, I'm a creative at heart. I hate the idea. I hate that I'm hearing music that is by... I know. not real people. I hate this idea of not real people being actors. I'm like, people need people. If there's nothing we didn't learn from 2020, it's that people need human touch and human contact and humans create art and art is a reflection of culture. And there's, I can't understand what the world would be like if that continuum was disrupted. Anyway, this is another conversation for another time. But anyway. If it gets to that, you'll find me somewhere uh at my own restaurant james uh in the caribbean serving people listen be me spinning yarns telling jokes spinning yarns all right let's see if carl has a yarn to spend in in in sacramento carl spin us spin us a spin us a yarn okay all right can you hear me yes what's up Awesome.

1:40:05So I'm 45 years old, married, nothing safe for retirement, regrettably. I do not own a home. Okay. So currently renting a home. I have about$250 ,000 in a high interest savings account. Okay. and I started a small business about five years ago which I currently still own uh but obviously getting older without you know any uh backup on the investment or even a home yeah is worrisome um so I've and obviously and I'm married and I don't want to leave my wife without a home or you know without some resources in case something were to happen to me Sure. Does she have resources in her name? No. Nope.

1:40:53Okay. No, she's same situation. She has a good job, but that doesn't last forever. Okay. So anyway, so I've decided it would be a good idea to sell my business where it's at so I can start playing catch up on some of those important items. Okay. If you sold it, what would it bring? So after taxes, so after I pay capital gains to Uncle Sam, I'll probably have net about$500 ,000 left. Okay. So combined with my$250 ,000, I'll be at about$750 ,000 liquid cash that I can deploy in one direction or the other. My first thought is— And then what would you do for work? I'd probably go start another business.

1:41:38Probably the same thing. um and you wouldn't need capital for that you could just go right to it yeah i'm still going to have a lot of the the purchase isn't he's not going to be purchasing all the assets so i'll still have some of the assets so i can literally start the same business okay and what do you think you'd earn i'm sorry i'm just trying to get the numbers before we hit the clock no problem obviously day one i'd be at zero but i think i could probably get to about I could probably get to about 4 ,000 net within six months. Okay, good. I could probably, within a year, I could be, you know, comfortably, you know, 6 ,000 to 7 ,000 net probably within a year.

1:42:16Okay, good. Worst case scenario, things didn't go well because I am pretty established in my industry. I can go work for another company if I saw a change weren't really gaining traction, and I could probably get a job pretty easily making, you know, 80 to 100 ,000. Excellent. So the question is, what do you do with the$750 ,000? Exactly. Yep. So I'm in, as you guys mentioned, I'm in Sacramento, so nothing's cheap in California. And so just a small, modest home in my area, looking at about$550 ,000. Okay. Well... Nothing special, but it's a roof over the head and, you know... The truth is, you're going in the right direction.

1:42:56I'd want to stabilize. That's the biggest line item on all of our budgets. It's rent or mortgage. So I'd want to stabilize that as quickly as possible. You've got the money. If you can pay for something in cash and not have a payment, I love that for you and start investing the rest. When you get this money together, you need to be investing 15 % of your gross every single month. This is The Ramsey Show.

1:43:25when you're tired of feeling stuck with money there's just one solution to get different results you have to do something different no one accidentally wins with money you have to have a game plan and that begins with our get started assessment go to ramsey solutions.com start Answer some questions and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with RamseySolutions.com slash start.

1:44:09You're listening to The Ramsey Show. I'm Jade. He's Ken. Give us a call. The show is live, so if you want to talk to us, call in. 888-825-5225. We'll take your call about your life, your money, and Ken will hit you up with that career advice. Although you do jump in on the money, and you do a good job, Ken. Oh, yeah. You know, there's a microphone in front of me. That means I'm going to say something. And it's going to be good. All right. We hope. Lee is here. He's from Washington, D.C., our nation's capital. What's going on, Lee? Hi. Thanks so much for taking my call. I was actually calling because I recently, yesterday, I was laid off from my job, and I was contemplating if I should pay off my credit card debt, which I was initially going to pay off before I got laid off, but I'm wondering if I should change my priorities.

1:44:54What happened? The company, so I worked at a startup, and they just couldn't afford to continue to pay me. I had just started that job in July, July 1st, so this is the first month. I got the job through internship because I was interning with them for two months, and then they hired me on, and now they've laid me off because they couldn't afford to pay. Well, first of all, I'm sorry about that. That stinks, and it's happened to all of us. What were you doing for them? Software sales. Okay. So I was a self-development representative. What's your confidence level? I'm sure your brain has been running 100 miles an hour.

1:45:39What's your confidence level of getting another sales job or something else in that field or just anything? What's your confidence level in the next 30, 60, 90 days? I'd say in the next – I think that I could confidently say that I could be placed in the same role with a different company, at least in the next 60 days. Can you survive from a cash standpoint? What's your cash situation, your bills, and everything that you've got responsibilities for? I do. Yeah, I can survive right now. I have about four months' expenses saved. Do you have any debt besides the credit card? Yes, I do. Okay. Yeah, I mean...

1:46:26Jade, walking through that whole situation. In this situation, I hate that you got laid off and you're kind of in a transition. And so we would tell you to pause the baby steps. So for all intents and purposes, you're on baby step two, which is you have debt and you need to clear out your consumer debt. And so because this kind of storm has happened, we'd say pause that, stack up as much cash as you have. It sounds like you have four months of expenses, but you also have debt. And so if I were you, I'd continue to make the minimum payments on all your debt because you want to stay current. You want to stay on top of things.

1:46:58But I wouldn't pay anything over it until you land that next position. Okay. And can I please, please, please, please ask you to get to work very quickly? It doesn't even mean, you know, if you've got some things that are working in the industry, that's fine. Play out the interview process. But I would be doing some type of part-time job or maybe something full-time until I had something. Something that's just a gig kind of a thing. The gig economy. you know and keep keep keep income coming in here's why let's say that this thing plays out like you think it's going to and within 60 days uh you're you're back and up and working now all of a sudden we're right back in the baby steps like jay just told you and now that four months worth of expenses is all going towards the debt but i want you to keep income coming in in this time.

1:47:49That's where you actually turn a really sucky situation into a better situation by going, all right, I got laid off. That sucks. Taking a pay cut, but I'm at least bringing money in. And Jade, if he could, let's say, make enough money in a gig to take care of his four walls, and I'll let you explain that, then I like his position once he gets back up on the horse. That's excellent. Matter of fact, I might keep a little bit of the gig while I get back on the horse so that you can pay off this debt as quickly as possible because that's the goal. I want you to, once you land the job, the money that you have in savings, I want you to use that to pay off the debt.

1:48:27That's the baby steps. Baby step number one is you keep$1 ,000 or you get$1 ,000. You stash it away. That's your starter emergency fund. Baby step two is you pay off all of your debt except your mortgage using whatever extra money you have laying around and to Ken's point, side hustling and doing all those other things. So you said you have four months of expenses. At this point, if I were you, that money goes to the debt. And then after the debt is cleared up, you save back up that four months of expenses or up to six months if you wanted to. And then you move on from there and you start investing at baby step four.

1:49:00So that's how I would run this if I were in your shoes. Very good call. Let's go to Maggie. She's in Tampa, Florida. What's going on, Maggie. Hi, thank you for calling for taking my call. You got it. I'm getting, yeah, I'm getting a little like anxious. We were, my husband's 76 and I'm 69 and we just bought a house. We wanted to downsize from the one that we had that was bigger and I'm getting a little anxious because the house is taking a little long to sell. It's been on the market for six months. So you sold one and you moved into another house before you sold the other one? Yes. And so are you about to be paying two mortgage payments?

1:49:43No, no, no. The other one is paid off. Okay, good. The one that we're selling is paid off. Okay. Okay. So we thought it would sell really fast, but with the market, the way it's going, it's been a little longer on the market. How long? About six months. What is your real estate agent telling you about your current listing price? Oh, we just lowered it some. When was it? It was at$5.75, and we just lowered it to$5.69. Okay. So I just saw this headline today. Today. We're seeing the Florida housing market begin to contract a little bit. Yes, it is. Because it was exploding. And now we're seeing it contract.

1:50:29In fact, many people feel like it was overpriced, overheated. And so you're in Tampa, which is the Tampa area, which is certainly one of the better markets in Florida. So I think if you've got a really good real estate agent, and if you don't, I would highly recommend that you go to RamseySolutions.com slash agent and talk to some of the trusted pros there on that site that we know. Because in this current market, I think patience is the game. and and and listen six months for a house listed in tampa i don't think that's crazy at this point it's not right if your pricing is right yeah yeah i agree okay i agreed tell me tell me is there anything on fire though because of course everybody wants their house to sell was the plan to take the proceeds from this sale and put it on your current house or did you buy your new house and tell me more about that no i put i put some down so we owe 326 000 because the house has 430 okay so we just want to we just want to pay the house we don't want to have that i don't want to pay the bank any interest sure but you're not we didn't have to but what jade's asking you is are you in a financial squeeze because this thing has not sold you no we're not all right then be patient this is all about making sure your pricing is right and then just hold Yeah, just hold.

1:51:51I definitely don't want you to put a price that's too low because you're anxious and you just want to move it. You know, you're not. I agree with that. You're not. Everything must go. You're not in that mood, in that mode. So just, you know, you got to know when to hold them. Sit tight. I'm going to do a little bit of fork. I'm no real estate pro, but as you know, I pay way too much attention to the headlines. OK, forecast for us. I pay attention to what the Fed is doing and what they're saying. We are in a presidential election I would not be surprised Given where we are right now We're seeing unemployment tick back up Over 4.1 The latest job report We're starting to see a softening in the labor market All of this in a presidential election This is exactly what the Fed set out to do Jerome Powell is on record as saying We've got to raise interest rates And it is going to cause pain In the employment market And pain in the employment market Okay.

1:52:47And then when we see interest rates high for the home industry, mortgage rates, this creates a cooling of consumer demand. Of course. And consumer confidence, which then in turn, theoretically, drops inflation. So all that to say. Put it in more layman's terms because the cooling is happening because everybody's holding on to their money. That's exactly right. Okay. And so what's happening is people are also sitting and waiting to see what happens in the next quarter or the fourth quarter as it relates to mortgage rates. I think you're going to see a slight rate cut in the third or fourth quarter, and I think you'll start to see people move back into the housing market.

1:53:23So I would sit tight if I'm in a position where I'm listing, I'm going to list it and stay with it. But I think you're going to see an increase in home sales as we look to the end of the year. All right. I love that because that's been the issue. Not enough homes on the market, not enough supply to meet the demand. You heard it first. You heard it hear from Ken Coleman. Let's see, is he correct? This is the Ramsey show.

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1:55:04Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw is alongside. The phone number is 888-825-5225. Our scripture of the day comes from Luke. Luke 9, 23. Then he said to them all, whoever wants to be my disciple must deny themselves and take up their cross daily and follow me. Our quote is from Mitch Albom. One half of knowing what you want is knowing what you must give up before you get it. Okay. Sounds like a recipe for getting out of debt, taking control of your life in any area. All right, let's get to the phones. Laura is in Columbia, South Carolina. Laura, how can we help? Hi.

1:55:42I was listening to y 'all during the pandemic when y 'all were talking about community college. I took y 'all's advice, went to community college, got a merit scholarship to university. I'm a senior. What the thing is, is I'm disabled. I've never worked a day in my life. Most jobs are not possible for me to do, and I've always known I'd have to work with my brain instead of my body. I'm scared to enter the workforce, and as a consequence of putting my all into college, I accidentally won a fellowship that affords me the right to go to almost any state school and even Ivy League if I wanted to.

1:56:18Wow, wow. I don't know if I should give up disability, go to grad school, or stay on disability, or no, excuse me, give up disability and enter the workforce and don't take up the scholarship and don't go and don't pursue my education and continue it further. Or I don't know what to do. Okay, let me just, okay. If I give up disability, I give up my income. All right, I'm so glad you called. Do you mind telling us what is your disability and what kind of work can you do? Because you've obviously done an incredible job in school and you're very bright. So what are your limitations? I have a genetic bone and joint disorder.

1:57:02It also causes me to faint. If you're familiar with Ehlers-Danlos Syndrome and postural orthotic ticardia, I have those. I can't stand or sit for a long period of time. I do most of my classes on the computer. So I would be looking for a job in local, regional, government, or nonprofit work. Okay, let me ask you this. Preferably remote. Okay, let me ask you this. If you did not have those physical limitations, knowing what you know about yourself, what would be something that you would love to try professionally or something you know you'd enjoy doing?

1:57:38um i would like to work for the state or federal government on education policy so you really love education policy yes sir okay um and if you were to get one of those jobs can you do that remote or can or would you have to do like because i'm thinking state government jobs and those are those are not remote have you have you looked into that? I have. That's the pipe dream, the realistic dream. There's a remote job for a nonprofit somewhere. I failed to mention, I have no debt, but if I took the scholarship, it would cover 75 % to almost any state or Ivy school. All right, so let's dream here.

1:58:21What if you just picked an Ivy League school, assuming, again, you could do everything online, yes? um a few yeah okay that's what i thought so what would that that higher ed degree be what would you get a master's phd okay you know who you are 100 and i love that you love policy and you're talking to a policy wonk okay i mean i'd make jade's eyes roll back in her head if i start talking policy and James would turn my mic off. I know what you, I know you, I see you, I hear you, Laura. So I'm going to tell you something. Uh, it's 2024. I'd like to see you before you make either decision. Cause you, you kind of asked Jay and I, okay, should I do this, this or this?

1:59:10Um, I think you need to do some more research here. And I think the research is solely around if I were to, to take those scholarship, that scholarship offer, and I were to get that master's in public policy, with my physical limitations, is there a way? I would want to know that. I would want to know the multiple ways. You understand what I'm saying when I say it that way? Yes. Okay, good. I'd want to know that first. Now I'm going to say something else. I also think that the timing is right, and I think you're going to have to work at this, because I think there's some small-minded people that would hear about your situation and they would consider that a polite nuisance.

1:59:57But I think there's some big-minded, big-hearted people who would go, you know what, let's figure out a way to do this. You know what I mean? Because I understand for you the idea that you could faint at any moment. That's very, very humiliating for you, I'm guessing, correct? Right. Yeah. Yeah. So, um, so you have to be 100 % remote. Is that correct? Or is that just the preference? I'm trying to work every day on physical therapy. Um, right now I could pull, I'm not even going to say I think I could hold down a part-time job because I don't think I could. Just physically. Right. If it was remote, maybe, but, um, I'm trying my best.

2:00:39Can I tell you something? How did you? The undergrad degree I've got is worthless. Yeah, I know. But I think it proves something to you. How many hours a day were you putting into the undergrad work?

2:00:55Sweetheart, if you can put 10 hours into a undergrad degree from home, you can put eight hours into a job from home. 100 percent there's nothing different it's you standing at a computer it's you taking calls it's you flipping books it's you highlighting things it's you reading all of those things i mean am i wrong no that's why i brought in jade i wanted to see if my colleague is hearing what i'm hearing i just hear a freaking workhorse who doesn't believe that she can actually do it but you've actually already done it i guess is what we're trying to say to you i'm scared to enter the workforce because I'm afraid that I'm going to give up all my benefits and I'm going to be homeless.

2:01:34Okay. There we go. Okay. Now we're getting somewhere, but you can acknowledge to us that you can work eight hours a day remote. Yes or no? With my brain, a hundred percent. That's what we're saying. Yeah. You've already done it. You've proven it. We're on team Laura right here. We're trying to cheer you up. So let's talk about the fear piece. Okay. You have no debt. Do you have an emergency fund? No, I have about $40 in my bank account and that's usually where it sits. Okay. And what is your benefit? What's your disability payment coming into you every month? About$1 ,500. I live out the school food pantry.

2:02:11Okay. All right. So I'm on public housing. Jade, let's do the calculator here. I'm going to, I'm going to have Jade help me out here. So if she's making somewhere between$18 to$22 an hour, let's just do$20 an hour just for round numbers. Because with your, with your skill set, so you do the math 20 times 40 and so you're going to be here's my point you're going to be making more than your disability payout and you're going to we're going to teach you how to build an emergency fund and and we can walk alongside of you I want to get you set up with one free session with one of our financial coaches to help you see what my path looks like as I begin to make real money and you're not going to be homeless.

2:02:57See, that's one of the things about that disability payment. It will make you feel like I can't ever get rid of it when what it's really doing is holding you back. That's right. It's the ultimate crutch. I think that taking out of the equation, the things that you want to do and what you love to do, there's a lot of jobs out there that you can work on your time. You can be remote and you can make the money that Ken is talking about, $20 an hour, 40 hours a week, you know, four weeks out of the month and bring home$3 ,200 instead of$1 ,500. So I think that just opening up your mind and going, okay, like there's, there's possibilities here.

2:03:35You coming up with work on your own, figuring out other things that you could do within the parameters of what you enjoy doing. I think there's a lot of options out there. I think fear is blinding you from seeing all of those options, but you're more than capable beyond capable you've proven that so that part is a that's been established i wonder laura and jade what's the timeline um maybe she gets a job and she stacks some money how soon would you have to say yes or no to these scholarships um with i would say before february i would graduate in may i would have to move out of state by june i'm gonna challenge you we did this once before you started off the call saying that you heard us tell you to go to community college.

2:04:18You did it. You crush it. Here's the next challenge. Go get one of these remote jobs that Jade is talking about. Could be customer service. Yeah. Could be anything. Let's just stack some money and just prove to ourselves how much money we can make before February and then make your decision. Laura, we believe in you. You're crushing it. We sure do. Good hour, Jade Warshaw. Always fun to be with you, my friend. Thanks, James Childs and our fearless band of merry men behind the glass. This is The Ramsey Show.

2:04:57We'll be right back.