You Can’t Outearn a Busted Budget

10:39Ken Coleman:To get a free quote, go to 800-356-4282. That's 800-356-4282, or go to Xander.com.

11:03Ken Coleman:all right crystal's up next in denver colorado crystal how can we help today

11:09Rachel Cruze:well i i am um i'm at a loss here i guess i'm kind of struggling so i was in a really bad car accident about, gosh, I want to say about four or five years ago. They did eventually pay out about$120 ,000. Now, I have utilized that money to pay off my home and to follow the Dave Ramsey way, you know, pay off my car, pay off the main necessities that I needed to try to get caught up. But now I'm suffering from this realization that, you know, all these extra bills are starting to come in and I don't know what to do with them. I can barely walk at, you know, barely work. I, I keep my part-time job, which gives me full-time payment on all my bills.

11:54Rachel Cruze:But now I have an excessive like a house tax payment that I didn't realize was supposed to be due in April. Um, certain little things like that. My car broke down. I'm like, what the heck is happening? I just paid everything off to try to get caught up. And I feel like I'm back behind again. oh man okay did you did you set any of that settlement aside for like three to six months of expenses do you have any savings no I don't have no savings I don't have no money to um for for my retirement I have nothing left okay um and you use some of this to pay off your home so your home is paid off yes I used 80 of it to pay off my home okay I used the other 10 of it to pay off my car.

12:40Rachel Cruze:So that was 90 right there. Yeah, yeah.

12:43Ken Coleman:What's the total right now, Crystal, of bills that are coming in that you didn't expect? So this is above and beyond your normal living expenses. Can you give us a total?

12:53Rachel Cruze:Probably about 4 ,000. I was just listening to what you guys were telling that other gentleman and I was like, Lord, I wish I could just grab a shovel and put on some stuff and go do that kind of work.

13:03Ken Coleman:So, but$4 ,000 is...

13:06Rachel Cruze:What's the disability, Crystal? You said you can only work part-time. Is that because of the car wreck, or is there something else health-wise going on? It's all due to the car wreck. My arm is pretty much broken. I'm a cleaner, so I go in, I'll clean the house for, you know, three, four hours at a time, and I get paid full-time. You know, it's a blessing to be able to do that, but the more work I pick up, the more my body deteriorates.

13:32Ken Coleman:Okay, Crystal, let's go back for a moment. We're going to dig in here. So I want to know the total amount of money in bills that you were sharing with Rachel and I to start the call. That number is$4 ,000?

13:45Rachel Cruze:In excess this month. Okay, so you have the tax bill on your home. How much is that?

13:56Rachel Cruze:$1 ,558.28. I just called them and they said they don't care. Okay. Okay. And then a car. Yep. Okay. And then something with your car. Correct. What was that? $10 ,000. How much? $10 ,000 to fix. How much is it worth right now? Like if it was fixed, how much would it be worth? About$18 ,000 probably.

14:22Ken Coleman:Okay. Okay. What's wrong with it?

14:24Rachel Cruze:I got myself a decent car, I thought.

14:27Ken Coleman:What's wrong with the car that's going to cost$10 ,000 to fix?

14:31Rachel Cruze:oh apparently i i didn't know but um you know the windshield is now broken i didn't know it had a stupid front camera that they got a fix so i called the insurance they're going to pay like five hundred dollars on that stuff well you don't need you don't need a camera you don't need a camera to drive it is it drivable it's drivable but it's affecting apparently the whole system in the car so apparently i have to get it fixed for it to for it to for the system to work what system i knew nothing about i didn't know i was purchasing such an extravagant car

15:06Ken Coleman:otherwise i don't think i would purchase it what kind of car is it

15:12Rachel Cruze:a honda okay i thought i was getting a good car you are hondas will run for you know 500 years i mean you can get from point a to point b but the system you're saying is the camera and other things, right? But your engine works. You can turn, I'm being for real, like you can literally turn the turn the key. You can drive. There's acceleration braking, like the basics to get you to and from somewhere is okay. Is that correct? Yes and no. So it will go. But when you push the park button, sometimes it keeps itself in drive. And apparently it's all due to the stupid electrical that is attached to that stupid camera.

15:49Ken Coleman:Okay. And how long ago did you buy the car?

15:52Rachel Cruze:oh gosh i probably i just bought it last year okay was it okay and did you buy it from a dealer no i did not okay you bought it for private sell private sell because it was ten thousand dollars less than all the cars that were available out

16:09Ken Coleman:there okay gotcha all right so let's keep running the numbers here so we've got a ten thousand dollar we're being quoted 10 000 for the honda to be fixed we've got 1500 for the housing tax what else is a bill that has come up on you that you weren't prepared for is there anything else

16:29Rachel Cruze:so primarily those two are the main ones that i've been stressed about all right if those two

16:35Ken Coleman:weren't in the picture right now would you would you be through your disability or through your part-time work, would you be able to cover all your basics? Yes. And you'd have margin? Yes. Okay. All right. A little bit of margin. Okay, good. Now we know what we're working. I believe so. Okay. So the real pressing issue is the$1 ,500. She's like, that one,

16:56Rachel Cruze:we need to get that paid. Got to get that one paid quickly. Yeah. So that's going to be your number one priority. And Crystal, what I would, I mean, this is the hard thing about money is it flows two ways. It comes in and it goes out. And so there's no other way to fix that issue. meaning money flowing in for a short period of time is probably going to be your best bet. And I know from a health standpoint, that's really difficult. And I'm not talking long term. I'm not talking, you know, five years of doing this. But if you can pick up more time with the cleaning, because like what you're saying is great.

17:30Rachel Cruze:It's physical labor, but it's for a short period of time and you get paid really well. So I think that this is like a great lane to stick in. I would stick in that lane than first is trying to go find something else.

17:40Ken Coleman:Or what else can you sell? Do you have things that you can sell to get at least$1 ,000 of the$1 ,500? Could you cover the whole amount by selling things that you already own?

17:52Rachel Cruze:I was trying to sell a couple of appliances here that are half broken, and nobody even wants those for$100.

17:58Ken Coleman:Well, I understand, sweetheart. I'm talking about something that I understand. But is there anything you can sell that's not broken or half broken?

18:08Rachel Cruze:No, sir. I live only by my means.

18:11Ken Coleman:All right. Are you plugged into a local church?

18:15Rachel Cruze:Yes.

18:16Ken Coleman:Okay. Have you told the church what's going on with you?

18:20Rachel Cruze:Yeah. Unfortunately, my church does not help with situations like that.

18:24Ken Coleman:Okay. All right. What about our friend group? What kind of a friend community do you have around you?

18:31Rachel Cruze:Really, I just have family, and I kind of mentioned it to them, and they kind of said, well, you better figure it out. And I was like, wow, all righty then. Okay. All right. So I'm on my own on this one.

18:43Ken Coleman:So we're running through the list of quick fixes. You're just going to have to grit through this and you've done it up to this point. I think you can do it. Yeah.

18:53Rachel Cruze:And I just want to encourage you that number one, with the car, I would go get a second and third opinion. Sometimes one mechanic at a dealership is going to quote you something. So I would go, honestly, go find somebody like in a local shop. I mean, anything, right? That get two or three opinions. And my guess is that$10 ,000 is going to lower to$7 ,000. I think you can find a better deal than what you have. Usually the first opinion is mostly the most expensive. So let's just pretend that's the case, Crystal. Do you think you could make an extra$300 a week? If I try really hard, I'm hoping to pick up another house somewhere here over there.

19:36Rachel Cruze:So Crystal, that's it. You've got to just back out the math and say, okay, I need to get this$1 ,500 in the next two months. And what I need, bare minimum. I need to get it in three weeks.

19:49Ken Coleman:Get after it.

19:50Rachel Cruze:Okay, so then let's do it. You can do it. Yeah.

19:54Ken Coleman:Because here's the deal. It's three weeks.

19:56Rachel Cruze:You can do it.

19:56Ken Coleman:You can do this. And this gets the tax thing out of your hair. Now you've paid the house off. You can cover things. You can figure the car out. You can figure the car out. I drive that car until it absolutely stopped.

20:07Rachel Cruze:Yeah. And Ken, I would say for the baby step purposes, you know, not to keep harping on Crystal's situation, but this is why we do say before you pay off your home or anything, you need to have an emergency fund of three to six months of expenses, cash in the bank that's there as your emergency fund, be funding some retirement. And then the house comes later because if she had six months of expenses, three months of expenses saved, this wouldn't, you know, be as big of an issue. So remember that savings, liquid cash, you guys, is really important in life so that you're not stuck in a situation like this.

21:03Ken Coleman:is probably tighter than ever. So if your business can't adapt in real time, you're in a world of hurt.

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23:00Ken Coleman:Jeremy is up next in Hartford, Connecticut. Jeremy, how can we help?

23:06Rachel Cruze:Hey, guys. Thanks for taking my call.

23:08Ken Coleman:Sure. What's up?

23:10Rachel Cruze:So we are, my wife and I just had a second child about a week ago. Oh, congrats. Are you alive? Thank you so much. I'm alive. We're awake and well enthusiastic.

23:19Ken Coleman:Yeah, very, very impressive. I wouldn't be able to put two syllables together. Good for you.

23:26Rachel Cruze:Let's wait until the end of the call.

23:27Ken Coleman:Fair point.

23:30Rachel Cruze:We bought a house in November, so about seven months ago now. And we decided that we prayed about it. My wife's going to stay home and raise our kids the way that we think is best and the way we feel pressed to do so, which is to love Lord. What this means is, of course, we're down to my one income. and the the biggest question i have i suppose is i rent a garage i'm very into cars they're my passion they're my hobby but i think what makes sense is to get rid of the garage so that i can afford to obviously raise my family the i guess my question or concern is what like am i teaching my kids that money is more valuable than good dreams singles um like i want them to grow up and think that kids means you have to give up things you enjoy.

24:20Ken Coleman:I think that's twisted. I think if anything, it depends on, yeah, I think it depends on, A, how you communicate it, because they're little right now, so they don't even know what you're doing. That's one. Two, if you communicate that for a season in life, when your mom came home, I gave up this garage and these cars because I couldn't do both. And so for a season, I sacrificed. So I think it teaches sacrifice. I think it teaches discipline. I think it teaches a very countercultural message of waiting on things, right? So I think it's all about how you teach that and how you... I don't think in any way it's teaching them that you've given up your dreams but my question is what's me jeremy it's it's teaching them you're an adult

25:15Rachel Cruze:and you sometimes you gotta make tough decisions adult decision to go from two incomes to one income so that means we don't get to do everything we like because you guys are more important in this season i mean you don't even say like we just talked to so many people and they don't live in adulthood if you will like they you know it's all of it and you're like you can't do that that's not how the world works and so yeah no to me i'm like it's common sense it's the opposite it's like oh no, actually we're making trade-offs and still living within our means to actually make the decisions that are truly valuable, right?

25:45Rachel Cruze:I mean, to you all, you're choosing, not really, but sort of the value of raising your children and your wife being a stay-at-home mom, which is the most incredible gift for cars. So if anything, it's like - How much money is this costing?

26:00Ken Coleman:Like to me,

26:01Rachel Cruze:I'm like, that is great. And your kids aren't even going to know it because by the time they even understand what's going on, Jeremy, they're going to be seven, eight, nine, 10. And you guys are going to be in a completely different financial situation. So I wouldn't know. I would not worry about this at all. In my head, you're being an adult. And that would be the lesson that my kids would learn. I don't know. Am I a boomer? Who am I right now?

26:25Ken Coleman:No, I mean, that's like the least

26:27Rachel Cruze:Gen Z thing I feel like I could ever say.

26:29Ken Coleman:No, I think it's great. We both said the same thing, but you're retorting. I want to hear this retort. Well, so part of the reason I'm slightly concerned, so this is now, I started a new career pass,

26:42Rachel Cruze:I guess, a few weeks ago at the same job, which was the intention was to do this years ago, but they kept kind of kicking the can down the road, so to speak. So the raise we got, I have now, because I'm in training, is very minimal. So we are, I mean, we've given up a lot in our budget already. We're past the four walls, but like not far. at all past the four walls for the time being, supposedly. It's only a few months. The thing that scares me, I guess, is I don't know. So I rented Double Deep Garage Bay four minutes from my house for$350 a month on a commercial lot. So they don't care if I run a business out of it for$350 a month.

27:23Rachel Cruze:I surely, outside of the blessing of God, will never find that again. um you know my concern i guess is i don't have like high prospects i don't know that i'll be able to get something like this back um okay all right so i got it let me let me dive in let me

27:39Ken Coleman:dive in all right let me ask some questions like i'm a bad lawyer on a tv show i think we can get to this okay because ready all right because i get where you're going you're trying to convince us and we don't have any numbers all right do you make any money on this garage this 350 a month expense do you fix cars up for other people or are you just messing around with your own cars

28:00Rachel Cruze:so it used to be a like i'd run a business after work but now with a second child and kind of improve my marriage uh i'm home more often so the last few probably months i haven't done work out of it it's just a place to keep my project now okay let's go back so when you

28:14Ken Coleman:weren't with the second kid or the new baby how much money were you making above and beyond the $350 through this garage doing car stuff? Probably like a grand or two, just enough to keep enjoying it. And how many hours a week was that prior to baby to get to that number?

28:36Ken Coleman:A week? Probably 10. 10 hours a week. Okay, so you've cut back because of new baby, and so we're now not putting the 10 hours in. So as it sits right now, it's a$350 expense. There's no income, correct? Correct. Correct. And what are you projected to make after your training period in the new job? Supposedly. Supposedly. Do you not believe these people? There's got a heavy dash of cynicism on that statement. I've heard it twice.

29:03Rachel Cruze:Well, the position I'm in now was supposed to have years ago, but they keep changing management. I get it, but let's play this out. The current management didn't promise me.

29:10Ken Coleman:What have you been told after the training period? How much more income per month or per year will you be making?

29:17Rachel Cruze:they haven't told me a number but based on the colleagues i'd be working with if i guess low it

29:23Ken Coleman:should be near 90 000 100 000 somewhere on there 90 000 in addition no no full-time that that year okay what are you making what are you making to this prior to this point what's your income minus the wife about about 60 and how much was she making she was making about

29:43Rachel Cruze:well she was self-improvement about 40.

29:46Ken Coleman:Okay so with this theoretically with this raise you would almost be back to where you were with her her income. Yep. Okay I'm not trying to tell you.

29:55Rachel Cruze:When will that happen?

29:56Ken Coleman:Yeah what's the timeline on this? About five months from now now at this age five months from now. All right there's all my questions. That's good. I think it okay thank Thank you. It paints a different picture in that. Yeah, it does. If I'm you, now this is where this could be great. Rachel could hate this idea, and I welcome it. But I've heard what I needed to hear, Jeremy. Load it. All right. And I think this is a conversation between you and the wife, and I think you find 10 hours again. You got to give her the time. See, I knew you were going to do that, Rachel. I'm not saying it. He's got to help out at home.

30:33Rachel Cruze:But here's the reality. I'm not done with my thing yet. Keep going. Keep going. I'll be quick. Keep going. I would find the 10 hours.

30:40Ken Coleman:I would find the 10 hours and I would start making money on the garage again so that this is a completely moot point.

30:47Rachel Cruze:Is it 10 hours a month or a week?

30:49Ken Coleman:A week.

30:50Rachel Cruze:Okay. A week. Can I? Okay. Mom of three. Realistically. I'm listening. Okay. Realistically. You work, Jeremy. What time do you get home from work? Typically five, 4.30, five. Beautiful. I'm handing babies off. I'm like, hello. That's fine. You can do that until nighttime.

31:09Ken Coleman:And then he goes to the garage.

31:11Rachel Cruze:No. I've got my husband watching a show with me. And then on Saturday, no, you're not going to the garage from 7 a.m.

31:19Ken Coleman:to 6 p.m. and have a hobby. I said have a conversation. This doesn't feel like a conversation. This feels like a confrontation. And if that's how it's going to go. This feels like the exact conversation I have at home.

31:29Rachel Cruze:Jeremy, I could not in a season. Well, she's going to react the way Rachel reacted.

31:32Ken Coleman:Let it go. Get rid of the garage.

31:34Rachel Cruze:Okay, Ken, what would Stacey feel? If you worked every night.

31:37Ken Coleman:I think if it was important to me and it made money, she'd be fine.

31:40Rachel Cruze:Every Saturday you'd go for 12 hours. You basically. Didn't say that.

31:43Ken Coleman:I said, fine, 10 hours spread out over seven days.

31:46Rachel Cruze:That's a lot. There's not that many hours.

31:49Ken Coleman:Oh, there's plenty. There's not that many hours. 24 in a day. Everybody gets the same amount.

31:53Rachel Cruze:Not right now, Jeremy. I wouldn't.

31:54Ken Coleman:I'd at least float it.

31:55Rachel Cruze:10 hours a month. You saw what I did.

31:58Ken Coleman:I floated and got smacked. Question is, are you willing to do the same?

32:07Thank you.

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33:41Ken Coleman:All right, let's go to Anna, who's joining us in St. Paul, Minnesota. Anna, how can we help?

33:47Rachel Cruze:Thank you for taking my call. We did the baby steps. We have no debt. We're less than a month away from my husband's retirement. Wow. Now we want to use our 401k as part of our retirement plan, but we just don't know where to go and whose advice to trust, and we don't want to run out of money. Yeah, that's a good fear. How old are you guys, Anna? I am 60, and my husband's almost 67. Oh, great. Okay. How much do you guys have in your 401k? It's just a little over$450 ,000. Okay,$450 ,000. And is that all the retirement you guys have, or do you guys have a Roth IRA or anything else? um i have a little but not very much i didn't work very much okay um and any other accounts or is that the 450 which you guys will be living that is that is it for the little and their social security and i do some odd jobs okay okay um do you guys have you guys run a budget on how much household expenses and all of that you need a month?

34:55Rachel Cruze:Yes. Okay. Between about$4 ,200 a month. $4 ,200. And how much do you guys get from other funds like Social Security and all of that? I think it's, let's see,$3 ,400 a month. Okay, great. So you're not looking at, you know way too much to pull out just to sustain life besides like a trip or something but just like what you guys need month to month I mean it's not yeah it's not that much uh that you're looking at so yeah when it comes to the actual running the numbers and everything um a couple of things one I would sit down with a smart investor pro I would have a financial advisor in your corner just to look over especially where you guys are age-wise and stage of life to be looking over your whole financial picture.

35:47Rachel Cruze:So everything from estate planning, anything with taxes, these investments, your home, I mean, all of that, they really can get a good picture and help you get a really detailed plan that will make you feel, I think, really secure because you're gonna be seeing numbers and knowing exactly what's going on. So you can go to RamseySolutions.com and check out a SmartVestor Pro. We have many in your area, Anna. So I would do that. And then also, I mean, honestly, when you're looking at the math of it, we don't know exactly what the market's going to do year to year. But kind of one of the one of the rules with investing, if you think if you don't touch the principle, then in this 450, it doubles every seven years.

36:29Rachel Cruze:It's kind of like the rough math you can play. So it'll be nine hundred thousand in seven years and then one point eight million. And that's really, you know, not touching that principle is going to be key in order for that math to work out. But you guys can, you can even just go on RamseySolutions.com and our investment calculator and plug in some of these numbers too and to know, okay, if the market on average is making, you know, you can do, you know, 8, 9, 10, 11 % on what your money probably will make on average over the long haul. you can see how much interest is going to be gained and you guys living off that.

37:07Rachel Cruze:Cause I think the key really with investing, if you want this to go the furthest is not touch that principle. And it's really that interest that you guys are using to be living off of. And the encouraging thing, you know, is that you guys, there's not going to be, there's not a ton that you're needing month to month. I mean, it's like not even$2 ,000. So I think you guys are going to be completely fine, but I do, I think you would feel better. or I would feel better if I were you is to be able to look at everything, my whole financial picture. And honestly, a smart investor pro could sit down with you and do that.

37:38Rachel Cruze:And so that's what I would do. I recommend this for everyone is to get a, someone, a financial planner in your corner, because it is so helpful to look at the bigger picture. And that's really what they're going to be able to walk you through and do, but just know, you know, on the front end that you guys know what your expenses are, which is great. You know, what's coming in outside of investments and then to know, okay, we're not needing a ton month to month that we need to live off of. So you're not even really going to touch the principle when it comes down to it, which is great. Yeah.

38:07Ken Coleman:And I think Rachel's absolutely spot on. I would only add that when you're sitting with a SmartVista Pro, you really want to look at this number and you want them to help you project to where you understand what a low output would be as far as interest, medium and high. And then I personally would go, okay, let's just do our planning on what a low number would be.

38:28Rachel Cruze:Be conservative in it.

38:29Ken Coleman:To Rachel's point, to be very conservative so that we're not touching the principle. And so then I would do whatever it takes, part-time job, cut some expenses here and there, just to leave that nest egg, leave that alone if you can, for as long as you can. We have money in a money market, too, for our emergency, or like you said, if something comes up, we have about$60 ,000 in that. Perfect. So that's going to keep you from most likely touching anything for emergency. That's a pretty good amount. So again, you're looking at your month-to-month expenses, what do we live comfortably with, and we're going to make up the difference so that we try to not touch that principle.

39:10Ken Coleman:And that's the goal. But you've got to get with that smart investor pro, somebody who you trust, who explains it to you in a way that you guys go, oh, totally get this. Here's what we think we ought to do. And then we make up the difference. So you guys are in good shape. You just, what's missing from this equation for you going forward is knowledge. Just really understanding the numbers.

39:32Rachel Cruze:And Ramsey Solutions with SmartVestorPro is somebody they endorse to go talk to?

39:38Ken Coleman:Yeah. So if you go to RamseySolutions.com and you click on SmartVestorPro, these are independent financial folks. It's just that we have vetted them so that they're advising people, right? Within our values, but we don't give investment advice. We can't do it. We don't do that. So these people are trusted in the sense that we know that they give advice that Dave has given for decades. And then you vet them yourself as well. So you go meet with three or four, sit down with them, and you got some chemistry there. I'm sure you really trust the lady that does your hair, Anna? Yeah. I think it's the same process, however you came about picking her.

40:18Ken Coleman:I know Rachel's very finicky with who touches her hair. So that's a process, whatever you want it to be.

40:24Rachel Cruze:Yeah, but have somebody, and I remember that, has the heart of a teacher is what we always say, not the heart of a salesman. And these SmartVestors bros should have that. But I want you to fully understand after meeting with them to the point that you can teach someone else what you're doing, right? Like I want you to be able to know that. So ask questions. If you get a weird feeling about somebody and you don't like them, don't use them, right? Trust your gut in it. But having someone in your corner, I think, is one of the best things that you can do long-term for you guys just to help. And we meet with ours once a year, Ken, Winston, and I do.

40:56Ken Coleman:We do the same thing.

40:57Rachel Cruze:And we look at everything. And there's something about having a third person that knows every number, knows where everything is invested. And they can even make changes in a great way to help you even more. You know what I mean? Some of this stuff could be in really low-risk investments, and they could maybe up it a little bit. And you can even make more, depending on what everything's in. So having someone in your corner in that way is smart.

41:19Ken Coleman:Yeah, and we can't underestimate enough this process. When we say go meet with three or four different investment professionals, we mean that. That's not just a rule of thumb. The reason is because chemistry matters, trust matters, all of that. And I joke about the person doing your hair, but I think it's the same thing. It's like you're just not going to go to somebody who you don't like or you don't think is going to do a good job. or every time you make a request, they talk you out of it. We just have to apply some common sense here. And I don't think we can really accentuate that enough that, to your point, do you understand what it is that your investment pro is telling you that you should do?

42:01Rachel Cruze:Yes, yes.

42:01Ken Coleman:Because if you don't understand it, don't agree to it.

42:03Rachel Cruze:That's right. Yeah, the fully. And I think, too, this can be an intimidating industry to kind of tap into if you're not used to meeting with someone because there's kind of a jargon. There's a language. There's all this stuff around it. But again, the people that we want our listeners to be sitting down with and advising is someone that's not going to turn their nose up. They're not going to make you feel dumb or stupid for asking questions. They are going to be extremely humble people that are going to help you and be advised in the right way. They're not going to try to sell you on a reverse mortgage or doing something so stupid that it's within the values of, yes, let's get our house paid off.

42:45Rachel Cruze:Let's live below our means. Let's, you know, here are my financial goals. Like, Anna, like, what are you guys wanting to do? And how can we make this$450 ,000 stretch as far as we can to do the things that we want to do with our lives? And so someone that's on your team in that corner, that's what we're looking for.

43:00Ken Coleman:Thank you for the call, Anna. You guys are in good shape and just a little bit more knowledge. Here's what happens. I'm telling you, when we get clear on any issue in life through knowledge, we have confidence. And when we have confidence, we're willing to make good decisions and move forward. You guys are going to do great. Thanks for the call.

43:28Ken Coleman:Okay, Rachel, the internet officially knows too much about all of us.

43:32Rachel Cruze:So much, George. I mean, our names, our addresses, even our relatives' names. And what's crazy is even if you opt out, data broker websites can still get your info.

43:41Ken Coleman:Don't like that. And just a year ago, get this, the average person had about 300 pieces of personal data floating around online. Now it's over 600. It has doubled in a year.

43:50Rachel Cruze:Guys, that is so concerning because that info then can be used in phishing scams, impersonation, and even harassment. That's why George and I both use and love Delete Me.

44:00Ken Coleman:Yes, Delete Me scrubs your personal info from hundreds of these data broker sites, not just once, but all year long. and there's real privacy experts behind the scenes doing this, not bots. So this is digital hygiene we all need.

44:12Rachel Cruze:We all need it. And then they will send you a detailed report showing exactly where they found your data and what they removed. And you can even request custom removals if you have something specific you want them to look out for.

44:23Ken Coleman:Exactly. And this is not being paranoid. This is staying protected. And so far, Delete Me has removed my info from 240 listings and saved me 94 hours of time it would have taken me to do it.

44:33Rachel Cruze:I love it. And you guys, in a world where strangers can Google your grandma and get enough info to scam her in just two clicks, Delete Me gives you peace of mind.

44:42Ken Coleman:Yes. So go to joindeliteme.com slash Ramsey for 20 % off. And that discount brings their annual plans down to about$9 a month. So go check it out. Joindeliteme.com slash Ramsey.

45:05Ken Coleman:This is The Ramsey Show, where America hangs out to have a conversation about their money, their work, and their relationships. The phone number for you to jump in today is 888-825-5225. 888-825-5225. Alongside the incomparable Rachel Cruz, I am Ken Coleman, and we're here together to help you out. Luna is going to start us off in Lafayette, Louisiana. Luna, how can we help?

45:31Rachel Cruze:Hey, y 'all. Okay, so I get$725 a week to cover groceries, diapers, lunch out, eating out for my family of five. And I'm frustrated with myself because it seems like I can't, it's hard to make that work. I'm always asking my husband, hey, can I get an extra transfer of$100 here or$150? And I'm just really frustrated with myself. And I think he's, or I know he's also frustrated and doesn't understand how$725 doesn't work. And he also doesn't understand how I'm not saving some of that that I get every week.

46:19Ken Coleman:Yeah, I was getting ready to say, when you started listing out all the things that the$725 was supposed to cover, I was like, the eating out part is not even possible after all the other things.

46:27Rachel Cruze:Do you think it's an issue that your husband gives you money once a week? And you don't have access to money? Except having to ask him for it? And he doesn't understand why you're not saving?

46:40Ken Coleman:Is that what you think is going on? Is that an allowance?

46:43Rachel Cruze:I don't think it's an allowance.

46:44Ken Coleman:Is it an allowance?

46:46Rachel Cruze:Okay. He's never said allowance and I've never said allowance. Is that what it is though? You have a different account and he puts in$725 a week into your account, Luna. Is that right?

46:57Ken Coleman:yes oh wow good pickup i thought this was just like a line item in the budget oh so he gives you 725 and he's expecting you to save some of this money in your account okay luna i think we got some other issues does that feel weird to you

47:15Rachel Cruze:you know we've been married for 15 years in august and he has always been the one who's handled the money. So it doesn't feel weird.

47:27Ken Coleman:Do you guys have a budget meeting?

47:31Rachel Cruze:No, we don't have a budget meeting.

47:33Ken Coleman:You have no idea what his income is? Okay. It's, I do.

47:38Rachel Cruze:I do. What's your household income? Do you have access? Can you log into his account, Luna? Yes, I can log into his account. I can log into our Edward Jones account. He's been a broker for seven years. I think that - A broker? A real estate broker? A real estate broker, yes, for about seven years after he got out of the Navy. And I think$400 ,000 a year would be the average income. The only debt we have is our primary residence. Our house is worth about$1.2 million, and we owe$500 ,000.

48:12Ken Coleman:So he's making about$400 ,000 a year. Yes, on average. And you know how real estate is. Sure. And he's giving you basically$3 ,000 a month. Yes. All right. Well, I don't know what the specific thing you called about, but I'll go right in on the thing that you laid out first because Rachel's boiling over here. I can feel a source of heat to my right.

48:35Rachel Cruze:I don't like it.

48:36Ken Coleman:I get it. I don't either. But one of the things that I think might help is for his frustration, he's not dealing in reality, minus the whole weird relationship thing that's going on with this deal. But I would show him I'd start delivering receipts. Have you ever done that before? when he gets frustrated, go, hey, look, Sparky, let me show you what I spent the$750 on this week.

48:58Rachel Cruze:Yes, I've said, hey, can we go through my, yeah, I used my debit card. And I have said, let's go through my checking account. I mean, it's public, Walmart, it's food. But he's not willing to do it? Not really, no.

49:14Ken Coleman:Okay, well, there's part of it. So now we have another relationship issue. It's weird. I even said, oh, I'm sorry to interrupt. No, go.

49:22Rachel Cruze:I've even said, hey, this Monday through Wednesday, I want you to go to the grocery store, and I want you, whatever meals you want, I want you to buy the food. Because it really is food, and I feel like things like haircuts or buying my three children clothes that they need.

49:39Ken Coleman:You sold me. I know, because I'm plugged in enough to know. I was frustrated with myself, though.

49:47Rachel Cruze:Yeah. I was like, okay, what? $7.25 a week? Why can't you make this work? And it's just been hard.

49:56Ken Coleman:Well, this is counseling. I think this is therapy. I know, Luna.

50:00Rachel Cruze:I'm like, do you? I'm hearing you say all of this. And do you feel like completely isolated and making decisions completely apart from your husband, who's supposed to be your partner in life, that's supposed to be in the trenches, and you guys are doing life together, and he's pushed you off on an island and said, little one, stay over there. And if I decide and I grant because I am so wonderful and apparently know everything, grant you the money, then maybe I'll give that to you. Like it's so disconnected. Like you emotionally have zero support. And the fact that he's not even interested in what you're saying makes me feel like there's like a lot of marriage stuff there, Luna, where I'm like, it's just not loving.

50:44Rachel Cruze:It's just that's just not a loving way to treat your wife. And let's say you were, mate, let's say it was absolutely ridiculous, Luna. Let's just pretend. Okay. I don't really think it is, but like, what if it was? Then, then at least like as a husband, at least sit down and help me problem solve what's going on instead of just leaving me out on my own. Like there's just, that's not connection. That's not doing life together. That's not.

51:06Ken Coleman:It's like he's shaking his head saying, do better.

51:09Rachel Cruze:And it's, and I'll tell you this, Luna, and I don't like it. I don't even like saying it loud because it's kind of weird, but all of this, we hear this a lot. Husbands giving wives allowance or even wives. My wife only gives me$400. It's a parental type relationship in that way. And that is not a marriage. A marriage is two adults coming to the table and getting to make decisions together for the good of our family.

51:34Ken Coleman:All right. So what would you do? I want you to put yourself in Luna's shoes. What would you do today if you're in her shoes?

51:42Rachel Cruze:I would say I want you to close your checking account. I'm closing mine. And we're going to the bank and opening up one joint account because I'm sick and tired of doing this on my own. I'm sick and tired of you accusing me of something that is not realistic and not reality. And not only are you accusing me, but you have zero empathy or zero interest in coming into my world and being interested. And I don't feel loved. I don't feel supported. And that does not make me feel taken care of. What would is having a husband that sits down across the table and genuinely, genuinely wants to hear what's going on and where I'm struggling and to say, we are on the same team.

52:15Rachel Cruze:And Luna, you get to make the exact same decisions as I make because it's our money.

52:20Ken Coleman:Love it. First of all.

52:21Rachel Cruze:How do you feel about that, Luna? Oh, yeah.

52:23Ken Coleman:That's great. Because then I have another question. Luna, how's that feel? Is that too much for you? Do you even want that?

52:28Rachel Cruze:I don't even know if you want that. Oh, no. That would be amazing. That would be.

52:32Ken Coleman:What if he blows her off? What if he goes.

52:36Rachel Cruze:Then you have a marriage issue, Luna.

52:38Ken Coleman:Then what would you do?

52:39Rachel Cruze:I'm taking you up a notch. I'd go see a therapist. I'd go get a third party involved.

52:43Ken Coleman:You'd lay the law down.

52:45Rachel Cruze:Yeah, because I need help in my marriage. I agree. My husband is not on the same page with me.

52:50Ken Coleman:I think she has to be prepared for that stuff.

52:51Rachel Cruze:And if it's not there, Luna, the problem that we see consistently, because this is the one piece of advice. What I'm giving you, a lot of people give us hate for, give us so much crap for saying combine your finances. People hate this. But the problem is when you start to isolate yourself in different parts of your marriage and to say that's yours, this is mine, that starts to become the marriage. And that is not what we signed up for. When we stood on an altar and said, I take you as my husband, I take you as my wife for better or worse, richer or poorer. Like we are in this life together. That's what marriage is.

53:21Rachel Cruze:And when you start to freaking separate everything constantly, it plays into parenting. It plays into decisions with in-laws and holidays and sex. Like name it all. that's the state of your marriage. It's just coming out as a money and control issue that he has and I would get to the root of that.

53:36Ken Coleman:I can count on one hand, James, the amount of times I've sat next to fired up Rachel and I like it. More please.

53:54Ken Coleman:Let's be real. Buying your first home can feel like reading Ikea instructions upside down. It's confusing and stressful. And you have no idea if that cam bolt is supposed to go there. And if you try and buy a home with some click-and-go lender, well, good luck. Because you're just another line on their spreadsheet. So here's the thing. When I was buying my home, I didn't want to just be a loan number. I wanted a relationship with a real person. Someone who was willing to answer all of my questions along the way and understood my goal of paying off my mortgage fast. And that's why I love Churchill Mortgage.

54:25Ken Coleman:They don't rush you. They don't try to sell you more house than you need. They listen. They walk with you step-by-step and offer guidance so that you understand what you can actually afford. So they teach you how to do it the right way so that you have margin and peace with the goal of becoming completely debt-free. So if you want rock-solid advice on how to buy a home the right way, connect with a Churchill loan specialist today at churchillmortgage.com. That's churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender.

55:15Ken Coleman:All right, Nico is up in Morgantown, West Virginia, home of the West Virginia Mountaineers. Nico, how can we help?

55:22Rachel Cruze:Hey, I was hoping to get some advice on kind of setting myself up to mitigate risk in moving from a full-time job into being self-employed.

55:32Ken Coleman:Love this question. I've gotten this hundreds and hundreds of times in my time here, so let's walk through this. What are you currently doing, and how much are you making?

55:44Rachel Cruze:I am an animal control officer for the county, and I make about$33 ,000 to$35 ,000 a year. We have an undetermined amount of mandatory overtime that we have to do on call weekends.

55:56Ken Coleman:Okay. Do you have any debt?

55:59Rachel Cruze:I just finished paying off my credit cards as of the end of June, and I have about$7 ,000 left on a truck loan.

56:08Ken Coleman:On a truck loan. Okay. And are you done with their credit cards?

56:12Rachel Cruze:Yes, they are. Zero dollar balance.

56:14Ken Coleman:And you're going to cut them up, get rid of them?

56:17Rachel Cruze:Yep.

56:18Ken Coleman:And we got$7K on a truck loan. What's the truck worth? The truck is worth probably about$10K. Okay. It's an old used ranger. Okay. And then what's the business that you want to – are you already running it on a side hustle level, or is this something that you would start from scratch?

56:37Rachel Cruze:Yeah. Yeah, I've been running it, and it kind of was an attempt at full time for a little while, and I had a whole bunch of mental health stuff that I was dealing with at the time that made it not functional. What is the business? It's custom woodworking.

56:54Ken Coleman:Custom woodworking. Oh, nice. Okay, and how much money were you making profit before you went through the tough stuff?

57:03Rachel Cruze:uh in in that i i kind of was already going through some of the tough stuff at the moment where i transitioned into doing that because before that i was uh self-employed as a as a professional musician um and so doing the music stuff i was making about about 25 30 as well

57:22Ken Coleman:so have you ever made any kind of income on the woodworking yes yeah absolutely give me an idea

57:29Rachel Cruze:But it was, I want to say during the most profitable stuff, probably about$10 ,000 or$12 ,000 a year. But that was with only probably working about three months out of the year or so.

57:43Ken Coleman:Got it. Okay, so here's my rule of thumb. I just wanted to kind of get an idea here. But my advice for someone who wants to go from day job to working for themselves is very few but very clear rules. Rule number one, I want you to, in this case, you don't really have enough of a track record to get to step one for me. But I want someone to have six months at a minimum, 12 months ideal of the income that they pay themselves, excuse me, that they make in the day job. I want that to be in the account of their dream job. In other words, the company you own, this woodworking, let's call it Nico's Woodworks.

58:30Ken Coleman:And let's say you make, you said you make about$34 ,000. So I would want six months of your income currently as animal control, minimum, in Nico's Woodworks bank account. Ideally, I want 12 months. And the reason is, is when you go from this day job where you can count on a check, Rachel, and you come in, I want you to be set up for cyclical, seasonal, whatever, where you're the chief everything officer and you got to go get the client and then you got to go do the work. You got to hire the crew. And so the reason I like the six to 12 months of your current salary in the bank of your self-employment situation is it gives me some breathing room.

59:08Ken Coleman:I think the worst thing someone can do, Rachel, is put all this pressure to survive.

59:12Rachel Cruze:That's it. I was going to say the urgency.

59:14Ken Coleman:It's just too much when you're trying to start something. So that to me is the minimum. And then I will leave once I've got that six to 12 months in the bank and I've got a pipeline of two or three jobs waiting on me. That would be an absolute ideal scenario. Now, you're not there. So I would tell you, you're an animal control guy until we get back in this stuff and you can get half, let's just call it, let's call it$17 ,000. $17 ,000 minimum in your account. I really prefer you to get the full$35 ,000. That'd be kind of fun. And I think it would require you to be patient, which I think patience is a virtue when you're starting your own company.

59:54Ken Coleman:But that's the advice I give so that there is no interruption of income and there's not all the stress to survive because all of a sudden the dream becomes a nightmare. And that's why I give that advice. But you're not there yet.

1:00:08Rachel Cruze:Nico, with your woodworking, did you have to turn down jobs? Like, did you have like a good word of mouth situation where people were coming and asking for projects and you just didn't have the bandwidth to do it? There have been ones that I haven't booked because people are coming to me and not kind of recognizing the costs of custom work like that. And there have been stuff that I've had to turn down, yes. Okay. But mostly it was an issue of not having the bandwidth to be able to be putting the time into it. Now, have you addressed that? Sustainable.

1:00:45Ken Coleman:Have you addressed the mental health challenges that held you back? Yes.

1:00:49Rachel Cruze:Yeah. Yeah. They're currently in the works of continuing to be addressed, but they're a whole lot better than they have been.

1:00:57Ken Coleman:Well, see, I would add that to the mix. I gave you a financial rule of thumb. I would also add in there, you know what? I want to make sure that whatever I'm doing, if I'm working with a therapist or a professional or a medical situation, that I've got a pretty good prognosis on that recovery as well. Because you will always have that waiting for you. Don't rush this is what I'm getting at.

1:01:20Rachel Cruze:Yeah, and this is very much like I'm aware that this is not going to be a tomorrow or next week or a month from now kind of a jump.

1:01:28Ken Coleman:Perfect.

1:01:29Rachel Cruze:I'm definitely ready to wait a number of... See, we don't like jumps.

1:01:33Ken Coleman:I love that you said the word jump. Remove the jump. Yeah. Everything I gave you was about walking just effortlessly, carefree into the future.

1:01:41Rachel Cruze:Yeah, you made a comment you had to turn down. or some people didn't do the job because of pricing. Do you feel like you're going to have the clientele to pay for what you're doing? Because you're right, I mean, custom woodworking, you pay a pretty penny for it versus going on Amazon or something. Do you think that there's enough there, enough demand to keep? I do think there is. I think that it's going to be a continual effort to try and kind of get my way into some of those circles. Yeah, yeah. Um, certainly, which is, which is another part of the stuff that I'm hoping to, you know, work with a, work with a small business coach and stuff like that to be able to.

1:02:23Ken Coleman:I'm going to give you a book called the proximity principle, which I wrote, which is basically for this. And it's very simple. The whole book can be broken down into this. The right people plus the right places equals opportunity and a fun little book. We'll give it to you, whatever format you want. And I want you to read it. It won't take you long, but it's going to help you identify the five people that I write about in the book that are doing what you're doing in the world that you want to be doing it. And that will bring more opportunities for you. So that'll be my gift to get you started.

1:02:56Ken Coleman:Fine. If you want to do a business coach down the line, I wouldn't spend any money on that yet. Let's just get out there and get our toes back in the water like you did before. You only made$12 ,000 over a year. That's not a lot. You can acknowledge that. It's not a criticism. them. That's just a, we never really got a chance to launch. And, and I want you to really play this thing out. Sounds like your, your head is very level right now. I'm proud of you for that, Rachel. He doesn't seem like he's got all this angst. He's got some experience here. He's got a vision. And I think you're all set up for this.

1:03:28Ken Coleman:Just take your time. Take your time. It's great.

1:03:32Rachel Cruze:Thanks for the call.

1:03:33Ken Coleman:You know, that's the real challenge for so many entrepreneurs, For so many people.

1:03:38Rachel Cruze:I know.

1:03:38Ken Coleman:We know this from new data, by the way. 70 % of Americans, Rachel, identify as wanting to work for themselves.

1:03:44Rachel Cruze:Oh, wow. Seven out of 10.

1:03:46Ken Coleman:Fun quiz. How many, what's the percentage of people that actually do work for themselves in the United States? Take a wild guess.

1:03:53Rachel Cruze:Small business owners.

1:03:54Ken Coleman:7 % want to work for themselves. How many actually do? What's the percentage?

1:03:58Rachel Cruze:I'm going to go 20%.

1:03:59Ken Coleman:No, six.

1:04:01Rachel Cruze:Oh, my gosh.

1:04:02Ken Coleman:So that shows you. Yeah, it's good. It's really hard, number one. Number two, it's really scary.

1:04:09Rachel Cruze:Yes.

1:04:09Ken Coleman:I mean, it's one thing to sit there under the tree with a lemonade and going, I'd love to do this for myself. I know. And then moving forward on it. And it can break you financially, which then breaks you emotionally.

1:04:21Rachel Cruze:That's right. That's right. No, it can definitely be a huge risk. But stuff with our entree leadership and then your stuff can. I mean, like, really, it touches on all of that, which is great.

1:04:30Ken Coleman:Proud of you, Nico. You got this, man. Keep moving forward.

1:04:45We'll see you next time.

1:05:15Ken Coleman:All right, folks, we'd love for you to help us keep growing. We're getting new people joining all the time. YouTube, podcasts, wherever you listen to podcasts. Of course, radio, Sirius XM, all over the place. and you can help us grow by liking, subscribing, and sharing. We appreciate that very, very much. Jason is up next in Boston, Massachusetts. Jason, how can we help?

1:05:37Rachel Cruze:Hi, thanks for taking my call. You bet. My wife and I, we're 42 years old. We have two boys, one six and one three. We bought our house in 2021 for about$1.3 million. We locked in at$2.7 million, very low rate. but frankly my wife and I we travel a lot for work and the house is a real drain on my time and energy I move tomorrow down sides like a townhouse more of a new built townhouse in the area we live in now but my wife hasn't because we've put down some roots the kids are entering public school one is going into first grade next year and one will be going into kindergarten in a couple years townhouse i'd like to move in like from what i've seen around here a new build would cost like between 1.5 1.8 um but it's it's really the lifestyle issue not so much the financial issue um that i'm thinking making the move so um would this be a good idea and how i can how can i process

1:06:40Ken Coleman:with my wife uh more effectively how much would you make if you sold it your current house uh

1:06:46Rachel Cruze:So right now I'd say it's probably worth about$2.5 million. We'd probably make between$1.3 million and$1.5 million. And your problem, Jason, it's not the mortgage a month that's stressing you guys out. It's the upkeep. Is that what you're saying? It's the upkeep because we both travel a lot. And I like to do a lot of things myself. I'm very hands-on. I always grew up with the attitude that no one's going to take care of my house as well as I do. in the people I've had work on my house. It's been, you know, a managing process to make sure that, you know, doing the right thing and stuff like that.

1:07:23Rachel Cruze:Can you, okay, give me a picture a little bit. Like, are you on multiple acres? Is this just cutting the yard and doing landscaping, fixing heating and air? Like, what is the upkeep specifically? Are you on a farm? Do you know what I'm saying? Like, give me a picture of it. No, no, we're on about an acre of land. the house is about 4 ,000 square feet. So it's a lot of outside the lot of upkeep, cutting the lawn, making the property look nice. It's every day of something, right? We recently had the 8-track replaced. There were problems with that. We've had every project we've done to this house, there's been issues and a lot of managing.

1:08:07Rachel Cruze:Just on top of keeping track of two young children and the demand of our jobs.

1:08:13Ken Coleman:So the appeal to you is I go in a townhouse and I don't have to do anything except for HVAC. I'd have to pay somebody to come out and do that or I'd try to do it myself. So this is all about convenience for you because you just feel overwhelmed with all the stuff you have to manage. Is that what I'm hearing? Correct. Okay, here's the challenge. Here's the challenge with that. And I'm dying to know what Rachel thinks, but I had to jump in and just say simply put, But to me, it makes no sense. And I think that your income is going to validate what I'm feeling. But I'm going to go ahead and jump out, then I could be wrong.

1:08:43Ken Coleman:I think for you to sell this house, take every nickel of what you make on it and buy a townhouse with that. Because you said the townhouse is going to cost you$1.5. It makes no sense. Now, let's see if I'm right. What is your combined income? You said you both travel for it. What's your combined income?

1:09:04Rachel Cruze:It can vary a little bit, but usually between$3.50 and$4.00 in a year.

1:09:08Ken Coleman:Bro, pay somebody to do this crap around your house. Get a yard guy, Jason. Stop. Put the pride down, Jason. Your wife is right. By the way, you're not going to win this with your wife, and Rachel will explain this. She has a female perspective that I won't understand, but I understand the outcome, and you won't win this with your wife. Not to mention, I don't even think it's a fight worth fighting. I think it's silly. I think you'll regret this move. That's what I think. And you got to let it go. Listen, you need to take on the persona of somebody like me. I can barely hammer a nail. And I am fine with it.

1:09:43Ken Coleman:I've come to grips with it. Winston, Rachel's husband, is a friend of mine. He can do it all. Guy has a real tool belt with tools in it. I can't even buckle a tool belt. And I'm okay with it. I pay somebody to do that stuff for me. Guys come and cut my grass every Friday. It's great. I'm adding to the local economy. me Rachel am I wrong with that combined income I'm with you you know keep some of the stuff you

1:10:08Rachel Cruze:want to keep doing because you enjoy it Winston likes to tinker so I feel like he's always like turning around I pay somebody to tinker yeah he's doing something but I'll tell you he sold his lawnmower we moved into our house this was five years ago because he was so determined to do the yard work and to mow the lawn because he wants our kids to see I mean it was like this whole thing and then he just realized you know we talked about it and I'm like you can but also you could get your time back on a Saturday or a Sunday and hang with us as a family. Yeah. And everyone's going to be okay. And can I tell you, Jason, it took probably five-ish months, probably five or six times where he finally was like, this is nice.

1:10:48Rachel Cruze:Yeah. Okay, this is nice. And so I know, Jason, I'm so sorry. I'm on your wife's side.

1:10:53Ken Coleman:Me too.

1:10:56Rachel Cruze:Okay. I'm a big opportunity cost guy. Yeah, I would, you know.

1:11:01Ken Coleman:opportunity cost then why in the world do you think that selling this gargantuan house that's got a ton of equity in it to put all of that into a townhome you think that's a good opportunity cost i have no mortgage i understand you could pay all this current house with that

1:11:20Rachel Cruze:income uh you could how old are the kids jason you say three and five uh there'll be three and six this month three and six okay and one's already in school right right um your wife and you like your school like are you guys happy with where you are we we love the school system it's the best of the state yeah that's a mess okay i think you're i think i think you're good jason i would just it's not worth the trade and again if you had called jason i'll give you a scenario where i would say you guys oh i like this you know is that we got you know we have people that call all the time that they bought a house in 2022 at the height of the market and they they and then now your wife wants to stay home and your income's going to be cut in half and your mortgage payment now is bumping up in boston to 50 of your take-home pay every month you guys are overwhelmed you have two car payments you have credit card debt still have student loans and you're like we just can't make any traction i'm losing like that scenario we would be like all right we gotta we got to make some big changes here.

1:12:24Rachel Cruze:But Jason, everything you laid out, I hate to say it. I mean, you called more a primary, primarily a money show and finances isn't the issue in the situation. It's just convenience. And then you go down the list and the convenience again.

1:12:38Ken Coleman:Well, he pulled the mortgage card at the very end of it.

1:12:40Rachel Cruze:But if he said, yeah, but that's, that's not our big thing. But the Ramsey thing, you know, you pay it off at baby step six. You're I agree. And again, Jason, if you had said we're on a 20-acre farm and I can't keep up the work and it's exhausting. We're paycheck to paycheck. And our chickens are everywhere and our cattle and it's just too much. And we can't, we don't tie. Like, do you know what I'm saying? I'd be like, that's a lot. If you're traveling, I wouldn't want to deal with that either. But it's a yard, Jason. You got a yard.

1:13:08Ken Coleman:Yeah.

1:13:09Rachel Cruze:Pay someone to mow the yard.

1:13:10Ken Coleman:There's HVAC companies, man. those dudes come out and imply that and you're sitting inside drinking an orange palm or watching golf. That's what I do. Hey guys, it's right around here. Let me show you. I walk out, I show them where to go. I got the money, pay them when it's done. Great guys. Don't care at all whether I can turn a wrench, which I can't. So, um, I get some of this, but I guess what we're having more ego, I think, Jay, I mean, honestly, it's pride. yeah pride it's a hundred percent pride and i also think appreciate which we do to agree and i and i also think there's a little bit of fear and i think that you're gonna have yeah i knew it of what of what your kids not what are you afraid of uh go ahead it's okay you're safe it's just the anxiety of home ownership just afraid of you know No, just afraid of it being gone tomorrow.

1:14:05Ken Coleman:Gotcha. Oh, you just want, okay. But you're not overextended. No. Yeah. And you have a big emergency fund? Yeah, we have about$100 ,000 in cash savings. Dude, you're fine. You're fine. Take a deep breath. And please hear your wife on this. Hear why she doesn't want to move. And then just say, yes, dear. And move on. You're not saying yes to you blindly.

1:14:32Rachel Cruze:You're using some logic. Listening to her heart. It's logistic. Yes. There's a logic side that it makes sense.

1:14:38Ken Coleman:Let's talk about nesting, okay? Hello. That's a thing I didn't realize.

1:14:42Rachel Cruze:And when your kids are in school, too, and you get emotionally attached, that's a hard change.

1:15:18Ken Coleman:all right folks graduation doesn't come with a gps we have a lot of students recently graduated they're walking into the real world with no clue as to the direction they want to go professionally. That's why we launched the Get Clear Career Assessment, Find the Work You're Wired to Do, Student Edition. This is a assessment and then a book that is designed to coach you through your assessment results on what you do best, what you enjoy doing most, and the results that you want to put into the world. And that will help you build a real plan and see a path with confidence. It's$34.99. You can get a copy today at RamseySolutions.com slash store, RamseySolutions.com slash store.

1:16:02Ken Coleman:Rebecca is up in Los Angeles. Rebecca, how can we help today?

1:16:07Rachel Cruze:Hi, I was looking for some advice. So I recently moved to California from Baton Rouge, Louisiana with my husband. And I wanted to know if it would be okay if he were to become a stay-at-home dad. Well, why wouldn't it be okay? Well, I'm just, we're pondering over the thoughts.

1:16:32Ken Coleman:Right, but what do we, yeah, give us the, is it good, is it bad? Give us the pros, the cons that you're wrestling with.

1:16:40Rachel Cruze:Okay, so it's good. I'm an oncologist. I make around$525 ,000 a year. Okay. which is about$43 ,000 a month. We have no debt at all. We don't even have a credit card. But we just don't know if we should do this.

1:17:04Ken Coleman:But what's making you have pause? Let's just take your side of it. What makes you go, I don't know. I think I need to call the Ramsey Show. What are we wondering? Because, well, it's not the money,

1:17:17Rachel Cruze:but it's the thought that people are going to look, because most people who have the stay-at-home parent, it's the mom. I'm worried about the cultural change, and I'm worried about, let's say, he was on the PTA. Other kids saw my kid's dad there, and they started just talking. Okay. I don't even know what they would say. Gotcha. I get it. I get it. I understand now.

1:17:46Ken Coleman:Now, does he share that same concern?

1:17:53Rachel Cruze:He, not very much so. Was this his idea? So it was my idea, but he has supported it.

1:18:07Ken Coleman:Why was it your idea? What were you thinking?

1:18:10Rachel Cruze:Well, before I was able to start, well, before I went back to school and became an oncologist, he was always making way more money than me, and I always thought I would get to. But now I'm nearly doubling what he's making. No, I'm over doubling what he's making. Do you want to be a stay-at-home mom, Rebecca? I do. But that's when the money comes in. Because right now he's making... What is he making? About$175 ,000. What does he do? He is a project manager at a plant. Okay.

1:18:57Ken Coleman:Well, wait a second. I'm confused. How you became an oncologist. That's a very specific path. And so when did the shift happen? And I'm fine with it, but I'm just curious. When did you want to become a stay-at-home mom, and then why are we moving to L.A.?

1:19:13Rachel Cruze:So, basically, I was going to be a nurse practitioner. I got done with college and everything to get there. I was a nurse practitioner for one year until my mother got breast cancer. Okay. And I saw what she went through, and I really just wanted to help women who were going through what I saw my mother doing through.

1:19:46Ken Coleman:I get it. Totally. Wow.

1:19:48Rachel Cruze:Rebecca, how old are your kids? My kids are two and five.

1:19:57Ken Coleman:Okay. Okay. But why L.A.? Just real quick, I'm trying to get as much of this picture as I can. Why Los Angeles?

1:20:05Rachel Cruze:Yes. So basically, in Baton Rouge, the most I was going to be able to make was around$300 ,000, which is great. But we're actually outside of L.A. So I saw this job and I was like, at the time, I didn't have kids, really. I was pregnant, but I didn't have kids yet. So I was like, let's do this. Okay, then you have babies and you're like, oh my gosh. Yeah. Okay. So, you know, nobody. Okay. So, Ken, I would love your thoughts on this. Okay. Cause number one, the situation, if the dad, if your husband ends up being a stay-at-home parent and your only concern is what people think, you got to throw that out the window, Rebecca.

1:20:48Rachel Cruze:That's easier said than done, but you can't live your life like that. Like that's exhausting. People do it all the time. Get some in debt with a lifestyle. I mean, like all the things, like just seeing other people, thinking what they're going to think about you. So easier said than done, but I put the blinders on for that. my second thing is and this is a little bit more of a bigger picture concept but you know you live one life and there's a life you want to live and if you're able to live and do the things you want to do the golden handcuffs of a big salary is not always the best choice now is there a world Rebecca where maybe you say hey I am gonna I don't even I don't know I don't know if this is an option.

1:21:30Rachel Cruze:I'm going to pause and I'm going to stay home till the kids go back to school. And then maybe I'll jump back in. I don't know if it's like, hey, I'm going to work four years. We're going to save X amount. So that way we can both basically retire and put$2 million away and call it a day and right off into the sunset and do whatever we want. Like, you know what I'm saying? Like, like you have a, you do have an incredible opportunity to use this money as a tool in your life to do the things that you guys want to do. But when the tool becomes the handcuffs of a life, that's where it sucks the joy out.

1:22:01Rachel Cruze:Where I feel like in America, people just applaud it. People would hear this usually, Rebecca, and be like, oh my gosh, incredible. Go make a crap ton of money for the rest of your life. And who cares about any other desire? But you're like, I want to be home with my kids too. So I'm saying use that money and that income for whatever period of time it's going to be to magnify what you want to do. Does that make sense?

1:22:22Ken Coleman:It does. I have more questions than comments still. If – how should I put this? I mean, if you could go home today, like Rachel said, press pause on being an oncologist, and money wasn't an object, would you do that? 100%. Yeah. And is it true that the only reason you're in the area that you're in outside of Los Angeles is because of the salary with that job? Yes. Okay. And if you could make that salary in Baton Rouge, how quickly would you be in the moving van?

1:23:06Rachel Cruze:I would be dumping everything I owned. I thought so.

1:23:10Ken Coleman:All right. I've asked enough questions to tell you that I think life has changed and you chased the dollar. Nothing wrong with that. No shame in your game. But I would go back to Baton Rouge and I'd be a stay-at-home mom if I were you. And I'd have your husband go back. He can go back and make that money. Now, I know there's some planning. I'm not trying to make this sound so simplistic. But I think Rachel's absolutely right. I could not agree more with her. And I just heard your heart on this issue. um, you're living a life you don't want to live right now. Now it's really good pay. I know.

1:23:46Rachel Cruze:That's the only good thing I heard in this entire scenario. I know. Can I tell you, there was a couple at Money in Marriage two years ago and she was a, like a scientist or something. She was, she did something just like crazy smart. She was making nine, almost a million a year. And she stood at the microphone at Money in Marriage with just tears because all she wanted to do is just be home. But she feels like it would be so irresponsible to walk away from something that insane. Most people could never, would never do I understand that. And we, John and I both coached her. They were debt free.

1:24:13Rachel Cruze:I mean, everything. And we were like, do it. Walk away.

1:24:15Ken Coleman:Yeah.

1:24:16Rachel Cruze:And they came back. Oh, no, they went on the Ramsey cruise. I saw them on the cruise.

1:24:19Ken Coleman:Oh, it was fun.

1:24:20Rachel Cruze:And they, I was like, how are you? And her, the life in her eyes, Rebecca, she was like, it was the best decision I ever made. Yeah. And so we get these golden handcuffs, Rebecca. And I know we're making it sound quick, like you're saying, but.

1:24:31Ken Coleman:I think I'd make moves to go back. Go back into your homeland. I could hear it in you. Change your life. change your life. And then we're not worried about any of this other nonsense. That was funny is what you presented is not the issue you need to take care of. So glad you called. Really proud of you. You got more earning potential down the line. Go be a mama.

1:25:07Ken Coleman:Why is it that when warm weather hits, people start losing their common sense? They swipe credit cards left and right saying, I need a vacation. I deserve this.

1:25:19Rachel Cruze:But by August, they're stuck cleaning up a mess. Listen to me carefully.

1:25:24Ken Coleman:You don't need to spend five grand on beach trips and theme park tickets to make family memories. Here's the deal. Instead of having the summer you deserve, have the summer you can afford.

1:25:35Rachel Cruze:That means planning ahead with the Every Dollar Budget app. It helps you track spending and give every single dollar a job. That way you make sure the essentials are covered and have some fun without making a money mess. Look, you've got to start bossing your money around or else it'll always be the boss of you. Download every dollar today.

1:26:09Ken Coleman:This is the Ramsey Show, where America hangs out to have a conversation about their money, their work, and their relationships. The phone number for you to jump in today is 888-825-5225, 888-825-5225. I'm Ken Coleman. Rachel Cruz is alongside, and we're here to coach you up. Lane is going to start us off in Savannah, Georgia. Lane, how can we help? Hey, guys. I am 23 years old, and I am about$21 ,000 in credit card and personal loan debt. Uh-oh. How did we get there? uh like dave says uh dumb with money okay just buying stuff well what is it was it a one purchase multiple multiple purchases over i'd say probably the past six years i'd say and you called us today why um i have i struggle with budgeting just because there i have many things i mean i don't

1:27:10Rachel Cruze:really know. I've never had a good way of budgeting.

1:27:14Ken Coleman:I've tried every dollar, but I don't know. I think I'm scared to budget my money to pay off the debt. I don't know. I just pay minimum payments. Do you think you're living your life the way that your family lived their life with money growing up? Well, my dad was a business owner, so we never really had to worry about much, But I'm just, you know, I'm trying to match what they did when they had their money and I'm not there. Do you think that this is, and by the way, we're not trying to come up with this big bad reason because we've all been there. But I'm just curious, is this impulsive fun stuff for you over a period of six, seven years?

1:27:53Ken Coleman:You're just like, this is fun and this seems like fun and I want to do this and I'm just going to go do it. And that's how we got all these loans and credit card debt? That's right. Okay. That's right. And when you say it's hard to make every dollar work for you, describe as best you can what's happening when you try to go into every dollar and use it. Well, it's really just I don't know how much to budget for, say, groceries because I don't go grocery shopping every week or every month. Maybe sometimes I might buy enough groceries one month to supply me to the next. and I have a vehicle payment that I paid and some months it's supplied with other money that I make other places and not from my one income.

1:28:38Ken Coleman:Do you have a stable regular income? Yes, sir. What is that? How much do you take it home?

1:28:48Ken Coleman:After taxes, it's usually around$820 a week. Okay. All right. And then how much money do you make as additional irregular income? It just depends, right?

1:29:02Rachel Cruze:Usually, I mean, some weeks I'm making more money, some weeks I'm not making anything at all. And what are you doing? Are you working overtime on your current job or something totally different?

1:29:12Ken Coleman:Yeah, just overtime. Sometimes it's more, sometimes it's less. Gotcha.

1:29:17Rachel Cruze:Okay. So you're making around, what, 45 or so a year?

1:29:24Ken Coleman:Yes, ma 'am.

1:29:25Rachel Cruze:Around 40, 45.

1:29:26Ken Coleman:What do you think's going on, Rachel? What's happening here?

1:29:29Rachel Cruze:Well, I mean, Lane, I just don't think you're planning well. There's just a part of me that's like you're kind of just on a whelm, like, okay, I'll find money here, put something there. And there's not really a plan in place is what it sounds like, which is, to me, the reason why you got into all this credit card debt, too, is there's not really a plan. If you don't have the money, you just swipe it and pay the minimum payments and your interest rates on those credit cards. I mean, they're probably horrible, right? 22%. That's right. Yeah. So how many cards are there? There's five cards. Okay.

1:30:00Rachel Cruze:Lane, do you have the opportunity to work overtime as much as you want? Not really. It's more of kind of like a weekend basis. Okay. Okay. One weekend a month. Are you single? No. No. Are you married? I'm single, not married. Okay. You're single. Yeah, yeah. Okay, so Lane, here's, I mean, here's what I would do if I were you. Number one, and I would do it right now while you're on the phone with us, I'd get out your credit cards and cut them up. Get rid of them. I already did that. Oh, you did? Good for you. Okay.

1:30:36Ken Coleman:Did you close the accounts? I haven't paid them off yet.

1:30:40Rachel Cruze:Yeah, you got to pay them off. Oh, that's fair. So, yeah, yeah. No, but, okay, so what I would do is list out these credit cards, smallest to largest. So out of the five, do you know the balances on each of them? Yes, ma 'am. Okay, what are they? Well, not by heart. Okay. If you had to just guess, what would you say, probably? Like, first card is what? So the personal, one personal loan I have is at$5 ,500 right now. Okay. Okay. And then, yeah, the highest credit card I have is 4 ,100. Okay. So the other ones are probably, gosh, like little ankle biters, probably like a two grand, a two grand, a three grand.

1:31:26Rachel Cruze:Like, they're probably just kind of, they're probably small. And okay, so what I need you to do, because I think you can do this lane. I really do. I think that there's, there's a lot of hope here. Number one, I'd be taking as much overtime as possible. Like anytime it's an option, it's a yes. Yes, yes, yes, yes, yes. I would also go get a second job somewhere. Go wait tables. Go do something. Because here's the thing. We always say this. When you are in debt, you have to go completely scorched earth. You have no time to yourself. You have no expenses that are going out that are not food, shelter, utilities, transportation.

1:31:59Rachel Cruze:That's it. There's nothing. You're going to be eating turkey sandwiches for every meal at home. You're you're going to do nothing, nothing fancy lane, nothing. And this is going to be one of your biggest obstacles lane, because you have not had to tell yourself no in six years. You haven't had to say no. Something comes up. You're just like, well, I'll just do it. This is going to be the biggest discipline challenge for you. And so what I want you to do is I want you to make a budget and you're going to have your rent, your utilities, your food, and transportation. So your car loan, how much is your car for your car loan?

1:32:36Rachel Cruze:It is$869. Okay, how much is it worth? Or how much do you owe on it? $43 ,000. You owe$43 ,000 and you make$40 ,000? Lane. Lane. Oh my gosh, I got a feeling this is a giant truck. Oh, Lane. Okay, how much, if you sold it today, what would you get for it? Kelly Blue Book says it's worth$38 ,000. Beautiful. Sell it. So great. All right. you're going to scrape together two thousand three thousand dollars in the next 60 days lane okay doing whatever you can you're going to pay pay off the difference of this truck and well you got to scrape together a little bit more i don't know if a bank would give you a loan i don't even

1:33:17Ken Coleman:know if i want to like what other toys now that we're on this track real quick what other toys do you have that that are associated with this credit card debt any toys huh a girlfriend Oh jeez I wouldn't call her a toy We'll just move right on I meant like machines like bikes And motorbikes or boats And stuff like this is anything else you can sell I don't have any of that Really it's just like Game and console most of the Most of the credit cards I'll be honest are Say Vacations And stuff like I mean just Buying game and consoles You know you're broke It's only$20 a month. Yeah, you're broke, dude.

1:34:02Ken Coleman:You're playing.

1:34:03Rachel Cruze:You got to get out of this truck. Like, that's the number one thing. That's going to free you up almost$1 ,000 a month.

1:34:08Ken Coleman:Huge.

1:34:09Rachel Cruze:You have to sell this thing. You have to work. And tell your sweet girlfriend, honey, sweetie, you're going to be watching movies. She needs a job.

1:34:17Ken Coleman:Why is she on a gaming console? But it's not her business.

1:34:21Rachel Cruze:I know, but they're playing games. Why are they playing games? Go sell the gaming console. Yeah, and like nothing, bud. You have to grow up. You're 23. You can't be just saying yes to everything. That's what children do.

1:34:34Ken Coleman:I saw a commercial.

1:34:34Rachel Cruze:They do what feels good, and you've got to go scorched earth, man.

1:34:37Ken Coleman:I saw a commercial last night for spam. Didn't even know they were allowed to sell that anymore. Lane, go get you some spam. Lane, go get you some spam. Get some tuna. Get ramen. PB &J.

1:34:57Ken Coleman:Listen, your home is your most expensive asset, and now you're ready to sell, fast and for a lot of money. But in this wackadoodle real estate market, one mistake could cost you tens of thousands of dollars. Here's the deal. This ain't amateur hour.

1:35:11Rachel Cruze:You need a pro in your corner, someone who knows how to price your home right, market it well, and negotiate the best deal. That's where a Ramsey-trusted real estate agent comes in.

1:35:23Ken Coleman:To find one near you, go to RamseySolutions.com slash agent. That's RamseySolutions.com slash agent.

1:35:45Ken Coleman:All right, folks, we all know that buying or selling a house is a big deal. It takes up a lot of calories in our life, and you can really mess it up. It's a big, big financial transaction, and the Ramsey Trusted Program is the only way to find a top agent that you can trust that will help make this entire process a blessing, not a burden. You can find a local Ramsey Trusted Real Estate Pro for free at RamseySolutions.com slash agent. RamseySolutions.com slash agent. All right, Sue is up in Chicago. Sue, what is going on today?

1:36:21Rachel Cruze:Hello, Rachel. Hello, Ken. Thank you both so very much for having me on. You bet. So my question is, should I sell my purse collection in order to pay off my debt?

1:36:31Ken Coleman:Oh, my goodness. Tell us about the purse collection. This one hurts.

1:36:35Rachel Cruze:So I've been a collector since I was younger. And more recently in the past few years, I've gotten into purses and name brand purses, the vintage ones. And total, as of now, I have about 50 of them. And they're maybe about$10 ,000 to$15 ,000 worth of purses.

1:36:53Ken Coleman:Wow. Tell us about your debt.

1:36:55Rachel Cruze:Current debt is$4150, so$4 ,150 in credit card debt. And then I have $18 ,000 in student loans. Okay. And how much do you make a year? So I am my stay-at-home mom, but I do have a side gig. With my side gig, I bring in roughly about$1 ,500 a month. And currently, I'm trying to put all of that towards the debt. Are you married? I am, yeah. What does he make? After taxes and after investments, he brings in about$75 ,000 to$85 ,000 a year. Okay.

1:37:33Ken Coleman:And that's the only debt you both have, is the credit cards and your student loans?

1:37:38Rachel Cruze:Yes, and besides our mortgage, but that's it. Yeah. And are you guys tackling this together, like using some of his income where you can? Well, I feel guilty. I'm trying to just use all of my income because this was all of my spending. So I kind of told them, you know what, let me take care of it. And then after I'm done with this debt, then we can tackle anything else. Well, hopefully we won't have any more debt, but tackle it together.

1:38:05Ken Coleman:Rachel's shaking her head.

1:38:07Rachel Cruze:No, I know. Sue, I know you feel guilty, but the people that win with money the fastest, build wealth the fastest, get to their goals the fastest, they put everything in the middle of the table and they take all past mistakes all the things aside and they say okay we are in this together moving forward and so yeah I mean so that's what so yes when I sell the purse collection I mean maybe if there's one or two like sentimental ones that you want to keep but I mean I would do anything to get out of debt as quickly as possible I mean, this would be like if someone called and I just have a motorcycle that I love.

1:38:48Rachel Cruze:We'd be like, get rid of it. Like, I mean, you just, you really go scorched earth when you're getting out of debt. So let's split the difference.

1:38:54Ken Coleman:So let's say you said their purses are between 10 to 15. So let's say it's 12 ,500. So you get 12 ,500. And you said your total debt was?

1:39:02Rachel Cruze:About 60 total. In total, 22 ,150.

1:39:07Ken Coleman:Yeah.

1:39:07Rachel Cruze:I thought you said 40.

1:39:08Ken Coleman:No, no. The credit card is 4 ,000.

1:39:11Rachel Cruze:Oh, my gosh.

1:39:11Ken Coleman:4 ,100. Sorry. She wrote$41 ,000.

1:39:14Rachel Cruze:Yeah.

1:39:14Ken Coleman:Yeah. So you've got$4 ,100 roughly in credit cards and you've got$18 ,000 student loans.

1:39:20Rachel Cruze:Yes.

1:39:20Ken Coleman:All right. So the 12-5, you do the snowball method. You know our snowball method, correct? Do you know our snowball method? Debt snowball?

1:39:30Rachel Cruze:I'm pretty familiar with it. I mean, I just started listening to you guys a few months ago.

1:39:34Ken Coleman:So real simple, smallest debt. You list out all your debts. And in this case, you have$4 ,100 is your smallest debt. The next debt is$18 ,000. Is that one loan or is that multiple student loans?

1:39:45Rachel Cruze:It's multiple.

1:39:47Ken Coleman:Okay. So you would go smallest to largest. You list them out. Okay. So what is your debt situation? The student loan debt. What is that? Can you give us those amounts?

1:39:59Rachel Cruze:So one of them is about$6 ,000. There's another one for five and then the remaining balance.

1:40:07Ken Coleman:Okay, great. So it holds. So you got$4 ,100 is your smallest debt credit card. Then you got a$5 ,000 student loan. Then you got a six and then whatever's left, right? So if you sell the purses for$1 ,200, just a number that I'm using here, middle of the range you gave me, then you're knocking out a good chunk of this. You'll have like$10 ,000 left. About$10 ,000 left. And then you're making in your income, your side income, you're making about$1 ,500 a month, you said? Is that right? Correct. Well, Rachel, so then I'm bringing it back to you. How do we get hubs involved?

1:40:40Rachel Cruze:Yeah, hubby comes involved. And you guys are completely debt free, Sue. And instead of 10 months, it's in five months. You cut it in half so then you guys can start saving for an emergency fund together. Do you all have any cash saved at all anywhere? We do, actually. So we have the$1 ,000 emergency fund. And then we kind of skipped part two for a little bit and started saving up monthly. And we have about$5 ,000 in cash. Oh, amazing. We're knocking this out really fast. We're throwing that there. and then in two months, three months, you guys will be completely debt-free and you build back up your savings together.

1:41:16Rachel Cruze:So the exercise, Sue, I think of you guys, it's not just a tactical combining money and working this plan together, but it does something when you view yourself as on the same team. I mean, honestly, like, and I know he may be frustrated that you did this spending. It was a student loan before you even met him. Yeah, okay, so that was in the past. and so I'm like you know I'm not a sports girl I don't know why I'm thinking of this but I'm like if you're on a team you know the quarterback throws sometimes the wide receiver doesn't catch it bad play very good but it's a mistake and you get back up and you run the next one and so

1:41:52Ken Coleman:there's just something about this team mentality I'm so proud right now I could burst the Vols

1:41:59Rachel Cruze:I was looking at the Vols schedule UT Vols and I'm looking for football metaphor to coach and I said the right positions and everything. But yeah, I mean, see, like there's just something about when you guys lock arms together and you're both on each other's team, you know? And so there's something really beautiful there. It's amazing. So when we have couples that come and do the debt-free scream on the stage, majority of them say our marriage is so much better. Not I wrestled this thing to the ground by myself and I did it all. And then now we're doing it. No, it was like, we were all in this together and we, we, we won together.

1:42:33Rachel Cruze:We lost together, but like we, you have a teammate with you. And so from an emotional standpoint, I would say dive in and you guys work together.

1:42:42Ken Coleman:I thought you were a little kind on the purse situation. You said hold back a couple that she liked. I'd sell them all. I'd sell them all. She can start.

1:42:51Rachel Cruze:Do you have like one or two from when you were a kid and you were like, oh, that was. No, these are just recent purses. Oh, okay. I'd get rid of them. I'd like to dig a little further.

1:43:00Ken Coleman:Get rid of them. Sue, I'd like to dig a little further because I know collectors. They're in my family. And thankfully, I've broken the curse. What's your... True story. I come from like... Collectors. Oh, my gosh.

1:43:12Rachel Cruze:What do you want to dig deeper on her? Why is she collecting?

1:43:14Ken Coleman:I bet you she's got some more valuable stuff in the house. You got some other collectibles that you could sell?

1:43:21Rachel Cruze:Yes, in the garage, actually.

1:43:23Ken Coleman:What are they, Sue? Tell us.

1:43:26Rachel Cruze:I have all of my McDonald's toys and Barbies from when I was a child that were never opened. are they worth anything um yeah a few thousand there we go and by the way you're doing yourself

1:43:39Ken Coleman:a favor to get rid of all that crap get it out two thousand bucks boom right there what did i

1:43:44Rachel Cruze:tell you sentimental mcdonald's toys that's impressive anything else sue um no besides that i i think that's pretty much it um i'd like to get in your attic i'll bet you got stuff up in

1:43:58Ken Coleman:the attic i think you got stuff in that house that you don't even know about it is interesting

1:44:04Rachel Cruze:that there's something that we like get emotionally attached to our stuff what is that well i could tell you it's the hunt for collectors and you can it's all about the hunt yeah i gotta go find the full set it's like a game oh yeah that's what it's about my grandmother god bless

1:44:23Ken Coleman:died at 96 you wouldn't believe the amount of beanie babies she had beanie babies do you remember

1:44:30Rachel Cruze:those beanie baby people yes yes do you know what they are now are you ready for this i learned this i'm out of the game we have about 30 seconds jelly cat oh it's a type of stuffed animal in new york and apparently they are like huge thing and we got them for like our kids like we got them as like um baby shower gifts but we went in our local choice toy store here in nashville brilliant guy and they had to put them in the back because they said people were stealing them.

1:44:54Ken Coleman:Have you seen the waffle toy? They cook it for you in the toy store. It's a stuffed animal.

1:45:00Rachel Cruze:And it's jelly cat?

1:45:01Ken Coleman:One of the jelly cats is a waffle. So crazy. And they cook it on fake utensils. I don't get it.

1:45:05Rachel Cruze:I don't get it. This is the consumerism of America.

1:45:08Ken Coleman:This is the truth. This is a real thing. I know this because my wife told me that Josie likes these things. Yeah. No clue what a jelly cat. I thought it was a cat. Like a jelly belly.

1:45:19Rachel Cruze:They said like college students are getting them.

1:45:22Ken Coleman:Sue, get up in that attic. There's more stuff to sell.

1:45:49Ken Coleman:to keep you brainwashed and stressed out, from credit card schemes to mortgage myths to investing traps. So if you're not where you want to be financially, I can help you finally get ahead. You can get Breaking Free from Broke today at RamseySolutions.com slash store. That's RamseySolutions.com slash store.

1:46:20Ken Coleman:The Ramsey Show Question of the Day is brought to you by our friends at Y-Refi. If you're ready to stop drowning in private student loan debt, Y-Refi can throw you a rope. Talk to Y-Refi to see if refinancing your defaulted loans with a low fixed rate is an option for you. You can visit Y-Refi.com slash Ramsey. That's Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states.

1:46:47Rachel Cruze:Today's question comes from Derek in South Dakota. I'm a long-term follower, long-time follower of your principles. My wife and I are just, oh gosh, sorry. My wife is just starting her faith journey. We're working hard to pay off our car, which is our last debt, but she's struggling to understand why we would tithe instead of using that money to go towards the loan. I feel convicted to give, but I also want to be respectful of where she's at. do I continue tithing or would it be wise to give a smaller amount and put the rest toward the car so it feels like it's a win-win for both of us? I don't want her to feel like her opinion isn't valid if I move forward with tithing before she's on board.

1:47:29Rachel Cruze:That's a great question.

1:47:31Ken Coleman:Well, the first thing that popped in my mind, Rachel, was it appears as though Derek has been tithing all this time. So the way he says, you know, if I move forward with tithing, he's been tithing. She's new to the faith and she's also new to this plan. So she's wrestling with this. He's been tithing this entire time, or it appears as though he believes in tithing. So I would not pause tithing. I wouldn't try to split the difference. I would, if you feel convicted, you got to listen to that conviction. It's a part of your faith. And so this is where you got to get her on board and explain why you tithe, what's going on there.

1:48:10Ken Coleman:You've been tithing this entire time. And this is like any major marital financial decision, you've got to get on the same page with it. But when you try to split the difference when it comes to tithing, and again, I don't want to go into some theological explanation of tithing here on the show. But for people who understand tithing, it is a biblical mandate and it is not just sort of a suggestion. And so in that case, if you feel convicted about it and you don't do it, then there's a bigger issue there. And I don't think you have to sacrifice your faith and conviction in this situation.

1:48:50Rachel Cruze:Yeah. And I would even do the math side of it and just to show her, okay, if we stopped tithing, how much faster would we really pay this off? Because sometimes when you get down to it, it's like it didn't really make that huge of a difference. and you know here at Ramsey and we do teach that giving should be a part of your character and what you do regardless of where you are financially and we say that because we know as you continue to win with money and you guys get out of debt you guys start building some wealth the character of who you are during that time is what ends up being magnified and when you can start as a giver even with debt there is something in that that creates in you a person that is generous and this money that you will build over time will become a blessing and it won't become this golden handcuffed idol kind of thing where you become all consuming.

1:49:44Rachel Cruze:There's something about that generosity spirit living your life with an open hand that it creates joy and it does, it creates peace. Your perspective changes when you find things that you give to, that you love and there's something about that we always wanna cultivate. So it's more for me along those lines that I think are really important. So, yeah, I would stay with it. I understand your respect for her for sure. But you guys are kind of new on this. And I think, you know, there may be some give and take in other areas. But this is one I would be like, hey, I just I do. I feel I feel pretty strongly.

1:50:17Rachel Cruze:This is what I want to be doing. And it's not like you're, you know, going out and gambling it. There's a giving component that's really beautiful, you know, like there's something like really beautiful about it.

1:50:29Ken Coleman:Yeah, good stuff. Thank you for the question. Mary's up in San Francisco. Mary, how can we help today?

1:50:35Rachel Cruze:Yes, thank you so much for taking my call.

1:50:38Ken Coleman:You bet.

1:50:40Rachel Cruze:Thank you. I am calling. I'm just wondering how important it is to pay to have my credit monitored. I have a credit freeze. I do have thanks to Dave and his advice. I work minimal wage jobs, and I have amassed over a million dollars, and my home is paid for. Oh, my gosh, Mary. Well done. Yes. Well, it's been hard earned and a lot of sacrifice. I'm not complaining, but I don't want to compromise it at this point. But I'm just wondering how important it is to have a credit monitoring system. I pay about$300 a year for it. Do I need it? Here's what I would say. It's such a low cost to you where you are financially.

1:51:29Rachel Cruze:$300, you're not even going to realize it's gone. So if it's something for you that you feel like it's nice for someone else to do it and I can pay a service to do it instead of me do it, then I'm not mad at that. But I do want you to know, though, Mary, you can check your credit report once a year for free on different websites. So you can even just pull it up. And if your credit is frozen, then really no one's going to be able to get to it with an identity theft situation, even though we still recommend checking your credit report every single year. So you can do it for free just by logging on to a website, TransUnion or Equifax.

1:52:02Rachel Cruze:Like there's sites out there that you can do it once a year for free. And that's what we do. I mean, it's pretty simple. So it's not that complicated. But I would say at the same time, I don't know what company that you're talking about. But if they are reputable,$300 to you may be worth it. Where it's like, eh, I'll pay for this service so I don't have to do it. If you want to do that, then that's fine.

1:52:23Ken Coleman:Yeah. Good, good, good call. Thank you, Mary. Now let's go to Amber in Charleston, West Virginia. Amber, how can we help? Hi.

1:52:31Rachel Cruze:Yes, thank you so much for taking my call. My question is I purchased a home two years ago and was working a great job, had a really good income, divorced, had some alimony, and I was injured on the job. I injured my neck and my shoulder and had to go through surgeries and treatments for about a year and a half. I fell behind on my house payment. I put it in forbearance for six months. And the bank has now finally come back to me to tell me what they want to do. And it's$30 ,000. And pretty much I'm going to be getting a settlement. But I don't know if I should just short sale my house or just take the loss, you know, with my credit.

1:53:17Rachel Cruze:Or if I should keep it. I have travel nurses breaking out right now. you have travel nurses what renting out right now to oh the home you're not even living in the home i am i'm living in here also oh okay oh i'm sorry okay and you have people okay and you need these travel nurses to help pay the mortgage yes okay so it's just too much house for you amber so no i would not have the bank short sale i would just try to sell it i would go to ramsaysolutions.com slash real estate and we have some real estate agents that you can look up in your area and I would get that on the market as soon as possible and I would get it I would get it sold.

1:53:59Rachel Cruze:I've had it on the market for three months already. Oh shoot. It's just listed too high yeah and the bank now will allow me to try to short sale. Yeah I don't know usually that's not always it's not usually the best situation. I wonder from a real estate agent perspective do you you have it too high marked up have you have you marked it down at all just to just to be able to cut your losses we did we we lowered it two times and still nothing i mean have you run comps in the area is there is it um yeah you have what's the problem with the house interest rates that are scaring people away i mean could be but also people are buying houses still um okay how much is it worth yeah uh it's 375 ,000 okay I'm back 30 ,000 on it well how much do you owe on it total uh it would be like 395 oh so you are underwater on it yeah um man I know it's a hard one I know I know.

1:55:10Rachel Cruze:Well, my fear is you're running out of options. Yeah. I mean, my fear is you're running out of options if you can't get this sold. And the problem is the bank will take it and will short sale it and you'll just be in that situation. So are they giving you a time frame at all? September 1st. September 1st. OK, well, so through the summer and I may find another real estate agent, Amber, honestly.

1:55:34Ken Coleman:I try to sell this thing with every reckless abandon. and I'd try to sell it, you know.

1:55:41Rachel Cruze:Because you're going to probably get more out of it, what you're doing, than the short sale of the bank. So I may even change realtors and just see where you can market it in other places. But yeah, that's tough. But that would be what I would do. And then at the end, if there's no options, there's no options.

1:56:09Thank you.

1:56:23Ken Coleman:Our scripture of the day comes from Jeremiah 1 verse 19. They will fight against you but will not overcome you for I am with you and will rescue you declares the Lord. Our quote today from the Iron Lady Margaret Thatcher. You may have to fight a battle more than once to win it. Seems appropriate for the baby step process. Keep fighting. Tyler's up in Raleigh, North Carolina. Tyler, how can we help today? Hey there, can you hear me? I can hear you loud and clear. What's going on?

1:56:54Rachel Cruze:Excellent. Yeah, so thanks. I've been listening to your show for a few years. I just actually, about three months ago, finally paid off all my debt. Congratulations. Thank you. Yep, I had about$70 ,000 between student loans and automobile and credit cards. Right now, where I currently stand, I have about$20 ,000 in the bank. I have$50 ,000 in 401K. And then I have about$15 ,000 in an HSA. So besides that, no debt or anything. And I'm 33, and I just feel a little bit behind. Most of my friends have houses and kids and are much further well off financially. But anyway, so it's just two questions.

1:57:40Rachel Cruze:Just one kind of, how do you level set and sort of get past that anxiety around that? And then two, the big thing that I want to do next, I own a car too, so I'm completely pit off there. But I want to get a house, and I'm trying to figure out how much I should save for a down payment for a house for a single man who's 33.

1:58:03Ken Coleman:Well, let's address the I feel like I'm behind. That's actually a myth. Because you look at most 33-year-olds, the amount of debt they're carrying, you've cleared that hurdle. And so now it's all multiplication. You've had to slog through this, and I get that. And it feels like you've wasted time. But the reality is, is most 33-year-old dudes haven't come to the realization of what you have about debt, number one. Number two, they haven't cleared it up. So compound interest is a fabulous thing. And when it comes to compound interest, if you have life until you're 80, you're going to be very wealthy, my friend.

1:58:39Ken Coleman:So your catch-up is coming. That's the first thing. The second thing is, let's walk through the numbers. What's your income?

1:58:49Rachel Cruze:I make about anywhere between$130 and$150, depending on commission.

1:58:53Ken Coleman:Okay,$130,$150. Rachel, what do you think for a down payment for this young man who's making good money and he's debt-free?

1:59:01Rachel Cruze:Yeah, well, our rule of thumb, Tyler, is when you go apply for a mortgage, the lowest we want you to put down is 5%. And the payment on that mortgage should be no more than 25 % of your take-home pay. and that would be on a 15-year fixed rate mortgage. And the take-home pay is before retirement and health insurance and all of that. It's just really after taxes is what you're looking at. And so, yeah, I mean, I would do the math. I don't have the calculator in front of me. If I did, I'd pull it up.

1:59:37Ken Coleman:I can do a calculator. What do you want me to do?

1:59:39Rachel Cruze:Do RamseySolutions.com slash real estate.

1:59:42Ken Coleman:Oh, I was going to just do a good old-fashioned calculator. Oh, sorry.

1:59:44Rachel Cruze:Yeah, yeah, yeah. No, because we can type in the... down payment and kind of figure out what it would be. It may take a hot second here, Tyler, but we have about five minutes left. Let me ask you this.

1:59:55Ken Coleman:While I'm doing this, the question is, does he need to be thinking at 33 and single, a full house or something smaller? Oh, yeah.

2:00:03Rachel Cruze:I mean, you could totally do just, you know, a townhome or something because do you think he'll be in the Raleigh area for a while? Yeah, my goal is to retire here if I can. Oh, okay. Yeah, yeah. So, I mean, you're at the place financially, Tyler, that yes, that would be your next step is what I would do is, you know, the only thing that would throw a wrench in it, it'd be a great wrench. But if you married someone, you know, and it changed the plans, but you can always sell. And that's not in your future right now, right? You're not dating anyone that wants to move out of state or something. No, I work at a startup, so I work about 70 hours a week right now.

2:00:38Rachel Cruze:Oh, my gosh. Is that sustainable for you? Are you fine with that? um for for i've been doing it for seven years now so it is getting a little bit unsustainable but i want to see this thing through until we sell the company okay okay yeah yeah that's great well we'll keep that yeah in mind um so yeah so for did you get it i don't is this the cost of living calculator is that what the one is that you want no no it's the mortgage calc no mortgage calculator I'm trying to see how much he can afford for a oh I see yeah yeah sorry but yeah so Tyler it would just be and again I would have you know if you want to just go ahead and get into the market I think would be my goal it's not going to be your dream home that you're going to live in forever there we go alright I'm ready sorry user error

2:01:24Ken Coleman:what do you want me to punch in?

2:01:26Rachel Cruze:let's see

2:01:26Ken Coleman:home value what is he thinking?

2:01:28Rachel Cruze:yeah I don't know let's just play around with it let's say 200 ,000 that's what's in there okay down payment let's pretend Tyler you put down let's go let's go 15 grand okay just for the fun of it okay let's see okay and then 15 year fixed yeah yeah interest rate interest rate right now is 5.95 on a 15 year fixed okay all right what do we have what do I

2:01:56Ken Coleman:I just hit enter. You got the worst person doing this.

2:02:01Rachel Cruze:Scroll up.

2:02:06Rachel Cruze:I can't read that far, Ken.

2:02:08Ken Coleman:Oh, here.

2:02:08Rachel Cruze:You got it. Okay, perfect. All right. I should just give her my lap. Sorry. That's what we should have done. I know.

2:02:15Ken Coleman:I'm basically the senior citizen literally of the group. Oh, my gosh.

2:02:20Rachel Cruze:Because you're bringing home how much a month, Tyler, right now? After taxes. And everything, it's about$6 ,200. Okay. If it was before health insurance and retirement, how much do you think it would be? Closer to maybe$8? Yeah, yeah. Probably closer to$8. Okay. So, yeah, around$2 ,000. Okay. But that's about right. All right. So we're looking at a home value around$200 ,000. It actually ended up being just right. A$2 ,100 payment, which is about 25 % of your take-home pay before everything.

2:02:54Ken Coleman:Is that doable in Raleigh or the surrounding areas? Yeah, that's tough.

2:03:00Rachel Cruze:I probably would have to go out into a surrounding area just because so many people are moving here right now. It's like impossible to find a house.

2:03:05Ken Coleman:So that could determine your down payment, though. She's running numbers here on.

2:03:09Rachel Cruze:Yeah, so if you go to RamseySolutions.com and do the mortgage calculator, that's all I'm doing right now, just plugging stuff in. So, yeah, a$250 ,000 mortgage would be about$2 ,600, almost$2 ,700 payment.

2:03:22Ken Coleman:Look at it, populated it for me.

2:03:24Rachel Cruze:But yeah, yeah, it's all right there, which is great. I was over here looking for it. So I'd run some numbers, Tyler, on that and just see. And maybe, you know, you do a little bit more of a down payment, wait a little bit longer, whatever it looks like. What were you thinking?

2:03:36Ken Coleman:I'm curious, what down payment size were you thinking? Because you've already thought about this, is my guess.

2:03:42Rachel Cruze:Yeah, that's the thing. You know, I have some very fiscally responsible, my aunt and uncle, who are kind of my advisors here in Raleigh. Right. you know they told me you should put down about fifty thousand dollars just to be safe how long would it take you to get to that i mean it would probably take a year to be able to put that much away oh gosh that's a big down payment yeah so yeah yeah i mean fifty thousand i mean it's amazing yeah so you get around a 250 000 house yeah um and again running your numbers and get really clear on because you're also you know pulling that 6200 was from after retirement and health insurance and everything so i'd go back and run some numbers tyler and just say hey if i yeah what what's the true number that i'm bringing home before um all of those things are being taken out and what's realistic of that 25 percent of that take-home pay so that's do you think i'm crazy okay tyler

2:04:40Ken Coleman:I'm going to throw a scenario out here. This is what I think. I don't know what Rachel's going to say. She has no problem telling me I'm wrong. He's 33. He's single. Yeah. Tyler, we don't have any prospects on the horizon, do we, for a mate? Nope. I already asked him that. No. I know. All right. But I mean, I know you asked him, but it's like, is he thinking, oh, I'm just kind of mad? All right. So if it were me in that situation, I would save as though I'm buying something in a year, but I wouldn't feel any kind of pressure. Because what if six months from now he meets this gal and it's all of a sudden it might get serious?

2:05:13Ken Coleman:I just wouldn't be in any hurry to buy as a single guy. I'd save.

2:05:17Rachel Cruze:Yeah.

2:05:18Ken Coleman:And I know that's – I just –

2:05:20Rachel Cruze:No, I hear you. I don't think he's throwing money away. Well, and Tyler, I think – well, I'm with you, Ken. I think I'd be more with you if he was 23. He's 33. He's established. He wants to retire in Raleigh. Well, then why haven't you found the gal?

2:05:31Ken Coleman:You're 33. What are you doing?

2:05:32Rachel Cruze:It's not a dating show, Ken. Tyler's an eligible bachelor.

2:05:37Ken Coleman:I think we got too many guys that are getting to mid-30s and haven't committed.

2:05:41Rachel Cruze:All right. I'm not saying he's the guy. Ken wants a commitment with marriage, and I would do a house commitment in the next two years. Power Tyler. That'd be my next financial move. Okay, I like that. I'd get in the market. I can live with it.

2:05:53Ken Coleman:Two years. All right. This is The Ramsey Show.

2:06:07eller