Live from the headquarters of Ramsay Solutions. This is the Ramsay show. It's where we help you win in your life, specifically your money, your work and your relationships. The phone number is triple 8825-5225. Triple 825-5225. I'm Ken Coleman, joined by my colleague and dear friend Jade Warshaw. And we are here for you this hour. It's a free phone call, America. And so we want to help you. Some of you are very new. We see this in the data, we see this in the reports every day. And we know that we've got some language that maybe you're not used to the baby steps. So we're going to get into that later this hour. That's going to be a lot of fun, just a basic breakdown to bring a lot of you into the conversation because this process absolutely works and we want you to understand it. So let's get to the phones. We start off with Anne in Sacramento. Anne, how can we help?

Hi, how are you guys doing?

Great, how are you?

Good.

So my basic question is my husband and I have recently decided to get very intentional with getting out of debt. So we're currently in baby step two. I'm very familiar with the steps. I used it prior to us getting married to get out of my student loan debt. So I'm very familiar with the intensity and everything. So five years later with not being super intentional with our budgets, we start to get on the same page. But my question is I wanted to do FPU. He wasn't open to it, didn't think that would be for him. I even asked for it for my birthday present. And then he recently decided, okay, let's try it. And last night was supposed to be our first class, but unfortunately the coordinator didn't show up. It was the virtual class. So now he's kind of put off on it and doesn't want to do it anymore. And I was super hopeful in that it would teach us both the baby steps together versus me just teaching it. And so I'm just wondering, do I keep trying to push to do FPU even though it's now a topic of contention, or just focus on let's just focus on our budget and getting more gazelle intense trying to get out of baby step two.

Look, man, I hate that that happened. There must have been some extenuating circumstances with that. But I would keep trying because what you said I agree with, as long as you're the one teaching him and it's kind of like if he's viewing that as you, even if you're not intending to, but if he's viewing that as you kind of like, this is what we have to do and here's the steps. And it sounds like his personality is not feeling that. So I would keep pushing to have Dave and the other personalities be the bad guy in that case and let us teach it to you. So I would follow up and find out what happened with that. But I would definitely keep trying for it because at the end of the day, here's what happens when a couple is trying to get on board. Get both spouses on board. If one spouse doesn't want to do it, you start compromising. And when you start compromising, it doesn't go the way you want. Because in our minds, we think, oh, we're compromising. That's a good thing. But it's not. Because what happens is you start just being ish.

And when you're ishing, you're not doing it full force. And before you know it, you've looked up and it's been five years and you still haven't really made any headway. And not only are you tired and you're frustrated, he gets the right to be like, see this thing that we tried didn't work right because you did it kind of half way and you never saw anything go through with it. So I would push to say like, we're doing this or we're not doing we're going ham on this. Because here's the thing. If he says no, the ish is going to hit the fan anyway, right? Because you're going to keep living out of control and pretty soon something great happens when your back is against the wall and the other walls are closing in, you realize you do have to make a change. So I hate for it to get to that point, but at the same time, sometimes when you split the difference on this, it becomes do you see what I'm saying? It actually backfires on you in the long run. So I would push to get on the same page, and that is in this case, him jumping over to your page, not you ripping a page out of your book and him ripping a page out of his book.

Does that make sense?

Yeah. And so he's definitely on the same page about getting out of debt. Like, I just started a second job and he's currently looking something that can also work with his current work schedule. So we're definitely on the same page about being more intense. But I want to go after that. I want to be on the same page with our three to six months. I want to be on the same page with basically all the baby steps. So that's what I was hoping FPU would be for, but now he's like, we need to get a refund call to get a refund.

No, I agree with you all.

That's a cop out. That's a cop out. I don't think he wants to be on the same page with you. Something's not adding up. And I'm not saying that you're not telling us the truth. I'm not sure you're getting the whole story because he either wants to be on the same page with you or he doesn't. And so if he wants to be on the same page with you and he wants to get out of debt, then you're going with this is a great plan. Whether or not our coordinator and whatever happened there, we'll get to the bottom of that. In fact, Austin, let's make sure we get customer service involved with this, with Anne to make sure that we get to the bottom of what happened because we want to serve you well there. But he's using this as a cop out. This is time for very serious talk. And this is a marriage conversation, not a financial conversation. I'm just going to call it and by the way, show him this. I don't care. Because, dude, let me tell you something. If your wife says that she's stressed out by this money situation, she wants this.

She doesn't feel safe, whatever's going on, and you're saying, yes, I'm in, and you're using this snafu or whatever happened last night as a I want my money back and I'm out. You were looking for any excuse possible, and I would dare say, my friend, you are manipulating her because you really don't want to go all in. And Jade already discussed the negatives of the ish, but I just think Anne, this is you saying to him, I need you to do this for me. I want you to do this. It's a marriage conversation. Jade, this guy is he's not all in. He's not on the same page.

No, he's not all know. It's interesting, this whole thing of I feel like we find that a lot, Ken, where it's two spouses and one is like, I'm totally on board, and the other one is like, I'm not. And the call we get so much is, how do I get my spouse on board? And it's always hit a point of they've know we've compromised and we've tried to work together on this and he or she doesn't want to go all in. And so we've just done the best we can. But you look up five years later and you've still just made no headway. In some ways, you've gone further into debt. And I love what you said, it's a cop out. And in some ways, compromising is a good thing. But in other ways, compromising is a cop out because you end up with one black shoe and one brown shoe and you look like a fool in the end and you're tired and you're worn out because you didn't do the plan as written and the plan works as written. It doesn't work when you do these various versions of it that you just pulled out of your you know what?

I think what's going on here is that I think he absolutely does want to be debt free, but he does not want to do what it takes to be debt. That's right now, there's a very big difference. We can love the idea of a better future, but not love the idea of doing what it takes to get said better future. That's the difference. That's the bridge between someone who is in any area of their life not happy with where they are. At some point, you got to go, you know what? If I want it that bad, then I want to do what it takes. He's not there yet, unfortunately. May take a little bit more pain and frustration to get him there, but Anne, we're on your team. Hang on the line, Anne. We're going to figure out what happened, if there was anything going on with our coordinator, and we can make good on our promise. But no, don't get the money back. Make him show up for the class. This is the Ramsey show.

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Welcome back to The Ramsay Show, where we talk with you about your life, specifically your money, your work and your relationships. I'm Ken Coleman. Jade Warshaw with me this hour. Triple 8825-5225, triple 825-5225. Matt joins us now in Bristol, Tennessee. Matt, how can we help?

Hey, thanks for having me. How are you guys?

Great.

What's going on?

Awesome. I just wanted to first thank you guys for everything you guys already do. I always joke with everyone saying that. I was raised by three parents, my mom, my dad and Dave Ramsey. And they just instilled that at me in a young age. And just want to thank you guys for everything you all do. Just the information you guys give out, but don't want to hold too much of your time. Just wanted to ask a quick question. I've been out of school for about a year, year and a half now. I currently live in an apartment and my lease is up in May. I've lived here about three years and absolutely love it. But I did make the decision to get a German Shepherd and space is a little bit small. It's funny because we actually made a trip down there in March and visited The Ramsey Show and went to Cookville and got him, and he's the best thing. He's awesome. I love him, but obviously that's a big demand of having a backyard and one day I want to be able to get one, but just doing it the right way. And like I said, my lease ends in May and just kind of want to take the steps of eventually going to getting a house.

I love that. So let's find out if you're even close. So I'm assuming you're debt free based on what you said about all the Dave Ramsey stuff. Do you have three to six months of expenses saved?

I do, yes, ma'am. I went to school, graduated after about eight years, graduated last May, and have just been working and doing as much overtime as I can and finally have all debt paid off and have about a three to six month savings plan set up just in case of emergencies. And just kind of want to I just don't want to go in because I know that now is a good time to buy one because it's not really going to get better. But then again, too, I don't want to go overboard.

Well, the best time to buy a house is when you can afford it. Right. So kind of scrap that out of your mind of is the market telling us it's a good time or is the market telling us it's a bad time? The best time and a great time to buy a house, no matter what the market says, is when you can afford it and you can put the right down payment down and all of that. So let's put that in our brains. Do you have three months or six months of expenses? Because it's just you, right?

Yeah, it's me. I have six months.

Great. Excellent. So what do you have saved in way of a down payment? Have you done any research to kind of find out what that down payment should be?

Well, I mean, I don't want to do anything below 20%. That's kind of where I'm at, and I think I'd be able to get that by that time frame. I've been living on a budget pretty consistently in the past about four months and have gone over it, but have been able to adjust and not make purchases that I shouldn't and just want to kind of gage on when that should be shown. I feel comfortable living another year here. I love where I'm and I think that I'd even be able to put an even much bigger down payment and maybe even get a little bit more, but I love that I just want to go about it the right way.

Yeah. So the first thing is doing your research to find out, okay, what am I looking at? Is what I'm looking at? Can I afford that? And so it sounds like you've done that. You want to put 20% or more. I think that's great. Our guidelines are somewhere between five and 20%. The 20%. Obviously, you are avoiding private mortgage insurance, which is great, and if you're able to do it up and beyond that, I think that's excellent. However, I would not necessarily let that keep you because it's going to be a moving target. The way the market is, everything's always going to go up. So you trying to be like, oh, I'm going to get to 40%. That could be an ever moving target. So once you get to I'm pulling the trigger. Once I get to 20, that's kind of the way I am with this market. I mean, if you wanted to wait it out, you could. But my point is, does that make sense? What I'm saying is that that target could move again by the time you get that extra 10% saved to where your 10% has now gone back to.

That's what I've been thinking about. Yeah, that's what I've been thinking about, where I save up and then the insurance rates go up and up and up, and it's almost as if I'm just kind of playing catch up when I'm not in any rush or anything. I know finance, that's not something smart to do, is be in a rush with finances.

That's right.

But it would be ideal to be in a house about a year and.

A half or so.

Excellent. And then, of course, as long as you're looking at 15 year fixed rate mortgages have you looked into that? You're not looking at 30 years, right?

Right. Yeah, I'm looking at 15 years. It's just a matter of being able to find something I'd be comfortable in without having to do 50% to 60% of my income.

No more than no more than 25% of your take home pay is what you're aiming for. And your take home pay is you don't have to worry about what it well, you shouldn't be what do I want to say? If you're investing, if you've already started investing 15%, it would be what it is before your investment dollars. Right. So it's 15% of that money, then your 15% is going away. That's what we're looking at. It doesn't have to be like 15% of your pretax after investment, after insurance. We're not looking at that. It's just your take home dollars, 25%. Does that make sense?

Right. Yeah. It's one of those things where it's almost as if I get on Zillow every night and just calculate stuff out. And I'm sure a lot of people do that, too, but it's just one of those things where I'll calculate it out and I'm like, well, that mortgage payment is going to be 30% of my income, but if I wait a year and a half, it could be 25. Or I mean, I may butcher that a little bit, but it's like 40 to 50 now, and then being able to afford it just based on the down payment. But with how the market is moving, I just wanted to kind of get advice.

Well, let me ask you about that, then. Ken can take the ball from here, but your income is what it is now. What do you see it doing in the next one to three years? One to five years?

It would most likely stay about the same, if not a little bit more, but not too much.

Yeah. Then I wouldn't creep much above that 25%. It would be different if you're like. Yeah, I'm getting a certification, and that's going to cause my income to rise. And if you're like, hey, some of these are looking up to 28, 29. That's a little bit different. But I would not creep past much more past 25 if you don't see a path to increasing your income anytime soon.

Okay.

Yeah. Matt, I think you're itching for this house more than you're letting on. You keep coming back to it. And I'm just going to speak truth to you as an older brother. You need to stay off Zillow. Because the more you're on Zillow, the more you let me just tell you, basic psychology here is we act on what we focus on, and if we're looking at Zillow all the time, the itch just keeps getting itchier and itchier and you just want to scratch it. And I'd stay off zillow. I would stack up cash. It's just you and the dog, right?

Yes, it is.

Dude, I don't want you going 25%. I think you need to relax. I think you need to be like, it's just me and the dog, and you're fine. And I would save up more money. I wouldn't be in any hurry.

Sure.

If you want to go for a year and a half, bust it, go make some side income. If your income is somewhat limited, you have the ability to do that. But the more you're on Zillow, the more this becomes something you feel like I've got to fulfill and I'm not fulfilling this desire. And you're single with a dog. And I wouldn't be in a rush to get a house. I just wouldn't. The more money you could save, the better, because you're not in a rush right now to where you have to get a house, as Jade said. So I would just relax a little bit. I can hear it in your voice, like, oh, I got to do it. I got to be a grown up. I got to be responsible. I got to get a house. We don't know what your life's going to be like a year and a half from now. Let's say you got that money that you want for that down payment a year and a half from now. And let's say that somebody else, a significant other, a potential mate, a life partner comes along. Now everything is we start at ground zero in my mind because I'm not going to buy a house.

I would never buy a house if I knew that I wanted to settle down with somebody until I found that said somebody. That's me.

Really?

100%.

That is controversial.

No, it isn't. It's just my opinion.

But you don't I'm not telling everybody.

Else to do that, but no, I get it.

But it's interesting because there's a lot of unknowns there, right.

But I'd rather not be locked into a mortgage. I'd rather be stacking cash, living on less than I need to make.

Look, wait a minute, King, because I'm walking down this road now.

Let's run down the road.

You wake up five years from now. No, this is good. This is good.

I started it. Trust me.

Because you wake up five years from now and Mrs. Wright still hadn't come around the corner. Are you still waiting to buy a house even if you've got the money?

Maybe not right now, but we're not talking five years. We're talking now. Which is exactly why I wouldn't buy the house in a year. If he's dating, if he wants to settle down, I wouldn't buy right away. But that's not a principle. It's not a Ramsey principle. I'm espousing.

No, I got you.

Me, personally, this rush to buy, it's dangerous. And cash is good. It gives me options. Renting's good when I'm playing the field, you know what I'm saying? This is the Ramsay show. Fake it till you make it. It's popular career advice, but it doesn't work for very long. If you don't love what you do, you can't fake the enthusiasm and energy you need to win at work. You also can't fake your physical health and energy. Everybody knows we should eat more fruits and veggies. But fruit, chews and veggie tips don't count. If you aren't winning physically, I promise you're limiting your opportunities to win professionally. Folks, I know you're going hard right now to pay off debt and get ahead professionally, you need another gear. And that's why Balance of Nature will help you. They help me. They give me the benefits of fresh, whole fruits and veggies in just seconds. The blend of 31 different fruits and veggies is powdered in an advanced process that locks in the nutrients. So go to balanceofnature.com and enter the promo code Ramsay to get 35% off your first order and lock in a lifetime price as a preferred customer.

That's balanceofnature.com with the promo code Ramsay for 35% off your first order. Welcome back to the Ramsay show. I'm Ken Coleman. Jade Warshaw is with me and we are here for you. Triple 825-5225. That's triple 825-5225. Let's go to Nate who is now joining us in Salt Lake City, Utah. Nate, how can we help?

Hello, my friends. My wife and I, we started our journey with Dave Ramsay about twelve years ago. And it's been a wonderful thing, let me tell you. We love Dave and we love listening to your show. We made it all the way through baby step three. We had three to six months in, expenses saved up and then it's been a little bit of a rough year. A couple of months ago, I lost my job. We've also got some medical bills. Thank you for that. We've also got some medical bills that stacked up and so we are back on baby step number two at this point. And we're looking for a little bit of advice on how to navigate these next couple of months as I'm on the job hunt.

Are you bringing in any income at all right now or are you still on do you have?

I have a little bit of residual from my previous employment. A couple of months of money they set me up with just to help with that transition.

Okay.

Our company was bought out and I was downsized and they took care of me, but it's not going to last forever.

Sure. Just so we can walk through this, how much more time do you have with that paycheck coming in?

About three months.

You got three more months before that goes away. And is it the same amount of money you were making before?

Yes, sir.

Okay, good. All right, so what specifically are you thinking about? What are you guys wondering about?

Well, we've got, like I mentioned, some medical bills, about 2500 in medical bills. And then just as we were making decisions to keep the lights on and things, as we were dealing with this rough year, we also ended up not paying our Tithing to our church for a few months. And so we'd like to make up that difference, which is about $2,500 there, too.

I love your heart.

So $5,000. What is $5,000? If I sent you a check for $5,000, which, by the way, I'm not going to, but if I did, what would that do for you mentally and emotionally in light of this? Call?

Well, that would take a lot of weight off, but the discussion my wife and I are having is do we take this residual income I've got and do we stuff it into our baby step, which got dropped back down to $1,000? Do we build that up or do we work on our debt? Snowball while I'm doing this job?

Hunt so is the only two debts, the 2500 in tie that you're considering a debt and the 2500 in medical, or is there other debt?

Well, we've also got our mortgage, but that's less than 25% of our income. But those are the only two because we've been working the system for a while.

Yeah.

And we'll put the mortgage off, we'll leave it for a baby step six where it belongs.

Why don't you work and go make $5,000 while you're searching? Yeah, why don't you just go get A-J-O-B? Doesn't have to be in the same career field, but why don't you just go while you're connecting, networking, applying, why not go make $5,000 on the side? I'm going to call it on the side. You're still getting your severance. And get the 5000 that you want to pay the Tithe and the 2500 for Tithe, the 2500 for medical, and then be all good. Why not do that?

I'm absolutely open to that now. We've got a little ten month old at home, so as soon as I go find a job, it's got to fit in around either daycare or my wife's schedule. She works, too. She's a teacher, so I'm absolutely open to that. I've been looking I've called in on a couple of temporary opportunities but haven't found anything that fits in with that lifestyle.

What do you mean lifestyle? You need a full time job anyway. What does that need to look like? What's the schedule?

It means my full time job has got to pay at least $2,000 a month to cover that daycare.

So your wife's income basically covers everything except $2,000. That's what you feel like at the very least you need to be able to make per month.

Yes.

Okay.

Are you watching the baby right now? And she's working? Is that what you yes, I am.

She's in the high chair in the other room.

Got you. That explains because I'm telling you to go get ajob. Why don't you work nights?

Absolutely. I'm open to that.

No, not open. Do it. There's a difference between I'm open to it and get busy, man. Go work at Walmart from six until midnight. Yeah.

You'll make 2000 a month while you're.

Searching for the full time job. Brother, I'm trying to save you some money. Now, you can do it your way, but my way is better because you get to keep that severance money for living expenses. Go make $5,000 on the weekend. Listen, your ten month old does not have a concept of time. I'd be working Saturdays. I'd be doing whatever to come up with $5,000 to remove this weight. You use the word weight, the baby doesn't know when you're there and they don't know, they're not going to remember that. It's like you're a bad father.

Nate, you're in storm mode right now. And so I know that you have these debts sitting here that you're like, man, if I could just get this money, I could pay them off. Until you get something stable where you're bringing in the right amount of income to supplement your wife's income so that you guys can keep your life going, these are bare necessities. We're talking about daycare and things like that, right? So I would take this severance money and I'd hang it back and put it with your emergency funds right now. Because if you don't get out there, like Ken said and make money, do you want to know what's going to happen? You're not going to have enough money to cover your basic bills next month. So I would not push ahead trying to do these baby steps because you don't have enough money coming in to cover your bills. So like Ken said, you've got to get out there and you've got to get any job that will take you while you're on the search, know whatever that ideal job or dream job is. And you want to know what? Let's talk about this from a little bit of an emotional standpoint because there is something to be said.

Like you said, you've been listening for twelve years. You got so far down the path with the baby steps and then this thing just kind of blew. You backwards, and it's like, oh, man, we're failures. And it feels like that, but you're absolutely not. The moral of the story here is the big bad wolf huffed and puffed, but he didn't blow your house down, because you did have those things in place, and you're not back deeply in debt. You're trying to pay back Tithes, for crying out loud. You know what I'm saying? It's not like you've just been blown to smithereens. And I think you've just got to forgive yourself and go, look, we did everything right. We had three to six months of expenses in place, and I lost my job, and that money was there when we needed it, and now we're just building it back up. Right, right. I love it. Don't get down on yourself. Just get out there, and it's about what you do next right now.

Yeah, I agree. And I wouldn't feel the pressure to pay all 2500 in Tithe back right away. Just manage the situation. Be a good steward of what you have right now. And I think that's the key. Really interesting. Again, I see a pattern here. And again, love Nate, but this idea, if I'm open to it, I'm open to it. I got to tell you something. If you want to change your life, you have to grab it by the neck and wrestle it down. I'm thinking of the jeez. I'm going to upset some of the animal rights activists, but I watch those rodeos every once in a while on ESPN, and they hop off and they grab the little calf and they wrestle it down to the ground. That's the idea. At some point, waiting for change to just fit beautifully into the existing schedule we have will get you in a situation where you wake up 510, 15 years down the line going, man, I never made that change. Where'd the time go? I mean, get after it. Get after it.

You bring up an interesting point. I've been reading this book about negotiating, and in the book he says, when people say yes or you're right. You're right. You're right. Yes. The chances of them actually implementing that change is almost nothing.

Really?

The phrase that you're looking for them to say is that's right? When they say, that's right, that means they understand what's going on and they understand how they've been thinking, and they see that you understand it, too. And when you hear the phrase, that's right, that's when you know there's a change that's about to implement. And the whole time he kind of was, yeah, yeah, you're right, Ken. You know what I mean? And it's kind of funny, because now when I hear that, I'm like, I don't know if they're going to do it. So, Nate, I hope you get to the point of saying, you know what? That's right. That's right. I do need to get out there. I do need to get a job. We're not failures. We just hit a rough patch and that's right.

All right, so I've got something for you, Nate. Hang on the line. We're going to give you the Get Clear work assessment just to give you some extra clarity and affirmation on the type of work that you were designed to do. And then the book From Paycheck to Purpose, which is the guide to the next gig for you. Hang on the line. We appreciate the call, Nate. So happy for you in that ten month old, but get busy, my man. Let's take advantage of that severance, not just use it. This is the Ramsay show.

What we teach at Ramsay boils down to taking control of your life. It's all about personal responsibility, and if you own a gun, that's even more important. So I recommend becoming a member of the US. Concealed carry association. You'll have immediate access to liability insurance, education and training to protect your loved ones and defend your rights in the most responsible way. Go to uscca.com slash Ramsey and join today. That's uscca.com Ramsay.

Welcome back to the Ramsay show. I'm Ken Coleman. Jade Warshaw is alongside Triple 8825-5225, Triple 825-5225. Hey, we have a lot of folks that are joining in on this conversation on all the different platforms. Podcasts. YouTube. Of course. Radio. SiriusXM. And if you're new to all this and you're kind of wondering where do you sit in this journey? These seven baby steps, you just want to get caught up. We've got a great resource for you@ramseysolutions.com called Get Started. Just go to the main website, ramseysolutions.com, click on Get Started and it's just a couple of minutes and it will allow you to see where you are in the baby steps, get you caught up so that you can truly get started to changing your life. Also, if you are enjoying the program, would you subscribe, leave a great review and share? That all helps us spread the good news. Triple 8825-5225 Caleb is up in Seattle, Washington. Caleb, how can we help?

Hi, folks. Thanks for taking my call. How are you guys?

Great. What's going on?

Just short and sweet. I have about $50,000 in my savings account and roughly 13, $14,000 in a couple of debts. And I'm just wondering if I should pull that trigger and pay that debt. And after the fact, how am I wanting to invest this savings towards like a future purchase or retirement? Just kind of confused. Doing all the research myself has been really stressful.

The answer is yes, you should do that. And now Jade is going to tell you what you do after that.

Yeah. So where's that money sitting now? That 50,000, it's currently in a high.

Interest savings account getting about 4% interest.

Great. Yeah, that's just where it should be. And I would pull out the 13,000 or 14,000 and I would pay off this debt and then assuming I don't know what your month to month expenses are, but I'd like for you to keep whatever is remaining, at least for three to six months of expenses. Is it just you or are you married?

I'm currently single, but I live with my mother, so we share the bills together. We currently rent our home, and I recently just took over expenses from my grandmother, who kind of moved to a different home. So I'm taking over the rent, power bill, all of that. So I think my monthly expenses are roughly 2500 a month, and I bring in just over 5000.

Okay. So I would set aside whatever three to six months of expenses is for you. You're a single guy. I know you're living with your mother, but you're single and at some point you're going to branch out. So three is fine. But whenever you go to branch out, which we're going to get to in a minute, I'd bump it up to six and then whatever is left. Are you doing baby step four? Are you investing 15% of your income at all?

Yes. Currently that's 15% of my paycheck goes towards a retirement account.

Okay, great.

Company provided.

So now we can get back to the other question. How long is this living situation with your mom going to be? Because it's not going to be long, right?

I wish I had a definitive answer. We're mainly here for the sake of stability. She's going through stage four kidney failure. So just a stable home. We know our expenses. We've known this landlord for 20 years. I've lived in this house for maybe 15. And we know him, so he keeps our rent low just for the sake of being helpful, being a good Christian man.

Okay.

So I would say maybe a couple of years at max. I do have a girlfriend. I haven't considered popping the question, and I haven't thought about making that step. I'm almost 25.

You're just taking care of your mom right now, right? Yeah. So let's give you some action steps getting off the phone today. Number one is the first thing you're doing is you're paying off that debt, and then what you're doing is the money that is left. I want you to kind of divide this in two separate areas. I love, by the way, this is not an ad or anything like that, but I use Ally for my HySA, and I like it because they've got these different buckets. And so you could say, okay, I'm going to put my three to six months in one bucket over here, right. And in whatever bank you have, do whatever you want. But the idea is I've got this money set aside for my three to six months over here, and I know exactly what that amount is, and I know that I'm not touching it unless there's an emergency. And then whatever's left, I want. You creating a baby step three B, which is you just putting aside money because eventually you are going to want to buy a house, and eventually you are going to want to maybe you marry this girl, maybe you don't.

But with any extra money, I want you being intentional about putting money towards a down payment as well, with anything extra that you have coming into your monthly budget and even whatever is left out of that savings after you've put away your three to six months.

Okay.

Sound like a plan? Three step plan.

That's a great plan. I love it. Thank you. You break it down really simple. Makes it a lot less stressful.

Oh, good.

Dude, you're good hanging out with your mom like this.

Who's taking care of her while you're working?

So I work from home currently, and my mom is a part of a state program that sends caregivers out to kind of look after her, make sure she has what she needs. And when they're not here, it's kind of I'm here to get her something to eat or something along the lines of that.

Okay, that's great.

All right, well, you're a good man, and so sorry that she's going through that and sorry that you were having to see that and provide that role, although I know you're more than willing to as a loving son, but that's tough stuff. So thank you for the call. Let's go to Ethan now in Newark, New Jersey. Ethan, how can we help?

Hi. My name is Ethan. I have around $75,000 from inheritance, and I just want to know what I can do so I don't blow it. I have around a few thousand in my Roth IRA, and I'm making around like, $1.6 thousand monthly. I'm a waiter.

Okay.

How did you inherit the money?

Well, it's actually a crazy story. So my dad, I guess you could say so my great aunt, she was not fond of the family, and she didn't leave the money to anyone, so it ended up going to not that family and to all the grandchildren.

Wow.

That's your share of what all the grandchildren got?

Yes.

Okay, good for you.

Cool.

And did you tell us you're making $1,600 a month? Did I understand that correctly?

Yeah, roughly. It ranges okay.

So you mentioned you had a Roth IRA, and then you said I'm making $1,600 a month being a waiter. Correct?

Yes.

Are you doing anything at this point to further education? What's that look like?

Well, right now I got this money around the end of my senior year, so I wanted to take a gap year. And so that's what I'm doing right now. I'm planning to go next year to one of the local community schools for an X ray technician job.

Okay.

And then overall, though, further education besides that would be just like, trying to learn other ways to make money. I opened a website trying to figure that out, but I'm just trying right now.

Yeah, no, my screen says, what should I do with this money so I don't blow it. So I think that's hilarious, and I think that's a good way to be thinking. My a one, two, three for you would be somewhere along the lines of this. Well, first, where are you living? What's your living situation?

Well, I'm 18, so I'm just living with my parents.

Okay, you're still with your parents. Okay. So my first thoughts on this would be there's nothing that you need to do that's of major need right now. Like you said, the biggest thing is don't blow it. So I'd put it I'd probably drop it in a high yield savings account for a moment because you're going to need to pull out this money when it comes time for you to get your X ray tech education right. How much does that cost?

It's actually not that expensive because it's through a community college and they have a good apprentice program. So it would be no more than $6,000.

Okay. $6,000. And then you're going to want at some point, you are going to move out. And when that happens, you're going to want three to six months of expenses when you move out, and you're going to need, like, first and last month's rent and all of that. So I kind of would love for you to do some research on what that's going to look like, because my guess is you're 18, and at least in a year or maybe a year and a half, you're going to be moving out on your own. So let's start looking at what that might cost and what that might look like, and then we're setting that money aside, and you're going to talk to your parents, and you're going to say, look, I really need accountability. Do not let me blow this money. I'm not buying a new car. All right? You're not going to find me in the club like 50 Cent, right? You're not doing any of that. You're going to sit on this. It's going to make money for you in that HySA until it's there when you need it.

Good stuff. I'm not sure Ethan knows who 50 Cent is. You could find me in the club.

Yeah, everybody knows that.

I don't know.

All right.

This is the Ramsay show.

Listen, folks, this show has always been about you and for you, so we want to hear from you right now. The Ramsay Show annual survey is live. Text survey to 33789 or go to ramsaysolutions.com survey. When you fill out the survey, you'll be entered to win a $500 gift card. That's survey text it to 33789. Thanks for helping us understand how to serve you best.

Live from the headquarters of Ramsay Solutions. This is the Ramsay Show. It's where we help you win in life, specifically with your money, in your relationships, and in your work. Thrilled to have you with us. I'm Ken Coleman. Jade Warshaw joins me. The phone number to jump in is triple 8825-5225. That's triple 825-5225. Let's get it started this hour with Kendra who is in Denver. Kendra, how can we help?

Hi, how are you?

Good. Kendra, what's going on?

I just got married about a month ago.

Oh, that's exciting. Way to go.

Thank you. We combined all of our finances and we had a plan to pay for the wedding, and that plan did not go accordingly. So we ended up going into a bit of debt on top of some preexisting debt. So now we're just kind of looking for advice as newlyweds to what happened off right and get out of this.

What happened?

We were living with family, so we were able to set some money aside. We weren't really paying rent, and that plan faded and we ended up moving out and getting into a house, which of course in Denver, the rent is skyrocketing.

Wait y'all up and bought a house?

We actually rent a house.

Rent a.

That kind of took our wedding budget away from us. But we weren't really willing to compromise on the wedding, which was not a good financial decision by any means.

So we went into debt. How much money did you take a loan out for this wedding?

We took about 32,000.

$32,000 for a wedding?

Yeah.

Please tell me it's not on, like, credit cards. How did you pay for it?

We started with credit cards, and I did have some savings, so we paid for part of it as we went. But 32,000 is actually on personal loan.

Wow. What did you spend that on? I'm just curious because I've been married a long time and I had no idea. Weddings, I know that they can be outrageous, but what did you spend that money on? I got to know the venue by.

Itself was about $7,500. And that's no service or anything? Just the building, basically.

Okay.

Photographers, videographers, everything is I wondered if.

You just rented a shrimp boat to bring the shrimp in for the reception. It was so expensive. My gosh.

So you had some money that you paid cash with, and the 32,000 wasn't the overall cost of the wedding, that was the overage that you went into debt for? Correct.

I think our wedding was budgeted at right about 35 total.

So you didn't spend any of your real money, credit card debt?

Well, we had some preexisting credit card debt, so we were paying for stuff kind of as we went and paying that off as we booked vendors.

Okay.

So much for the honeymoon period because now you all going to have to bust it to pay this off.

Yeah, no kidding.

Yeah. Okay. There's a big red flag here for me. Like, there's something that's glaringly. Glaring? It's red light, and it's the fact that early on, you guys were hit with a fork in the road. Like, do we lower our budget and get what we can afford or do we just say, to heck with it, and put the pedal to the metal and go into debt? Right. So I'm worried because and I'm worried, too, that there was credit cards involved and all this stuff. So you guys have a mental mind shift that must happen. Do you see what I'm saying?

That's the bigger in our spending.

Yeah. So that's almost a bigger deal for me in this moment than the debt is you guys looking at each other and going, okay, how do we want to live our life from now on? Like, what type of people are we going to be? What type of adults are we going to be when it comes to money? And this is a conversation, this is the next date night. Are we going to be the type of people that we see a vacation we want and we see a TV or a car that we want and we go, you know what? We can afford to just take out the payments. I mean, we'll just pay it off. Or are you going to be the type of people that go, you know what, from here on out, drawing a line in the sand? We don't bar borrow money. And that's first and foremost, you guys both need to look at each other and say, are we going to be the people who decide that we don't borrow money anymore?

Yes, we have had that talk.

And what's the answer?

I think we're on the same page.

You think?

From watching the videos and stuff online?

I got to tell you, you think.

You'Re on the same page?

She is on the page, ready to jump into it.

Oh, I know you are. I think you're on the page. I don't think he's anywhere near the book. He's in a magazine.

He's in a magazine. He's in a truck magazine. Where is he?

Is that true?

He's not that.

He's not that. Okay, good.

So real quick, what's the debt? Not just the wedding, total debt. And then what are your combined incomes?

Yes.

So total debt, I calculated it about we're just under 90. I think it's like 88,000.

Okay.

And can you break down the type of debt combined?

Sure. We have two vehicle loans. Those are both about 16,000 each. I have student loans, which luckily is only about 8000. Could be much worse. And then credit cards combined, we have about 16,000 left. And then the personal loan for 32 on the wedding.

Who gave you that money?

Just like, sofa loan or something like that.

Personal loan. I misunderstood.

Okay.

And what's your combined income?

Right now, I'm estimating about 130. Has kind of varied.

So you guys can do this, but you got to get dramatic with it. You got to get real dramatic. What was your question for us? Did we answer what you wanted us to answer? Did you ask it? What can we do here?

Really just kind of looking for advice on where to start.

All right, so I'd start with the cars. Do you have any equity in those cars?

Not really.

You're upside down?

I don't think we're really upside down, but we'd probably break even or be slightly upside down. Like $1,000 or $2,000. Not anything major.

First and foremost, debt snowball. Like Ken is right. I'd be looking at these cards, but first, we're listing them smallest to largest. So the $8,000 student loan technically is first in your snowball. However well, actually, that's not true. Your credit cards, what's the lowest? I'm guessing it's not just one credit card for 16,000, right?

Yeah, one is about a $10,000 balance, but then the rest of them are all pretty small.

Okay. So we'll list them smallest to largest and knock out the smallest ones first. So that's the overarching game plan of this, and that's how you're going to feel motivated to keep going. So tonight you guys get off the phone and go, okay, let's put these things in order. Smallest to largest. That's thing one, then next. Do you guys have a budget? Are you on a budget at all?

I've kind of just started writing stuff down.

All right, well, we're going to make sure that you have we're going to make sure you have every dollar, which is the world's best budgeting app on the planet. It's going to help you guys get control. You're both going to be able to see it. It's going to be on both of your mobile devices, on both of your laptop computers so you can see it. You're going to be able to see your money each day in real time what's going on with your money. So make sure that Austin picks up to get you that. And those are the two keys. Find out what's going on with your money and find as much margin as possible so you can throw that at the smallest debt, and that's how you work through this debt snowball. You guys can be clear of this in 24 months.

James Jade I got to talk about a new idea during the break. Should I spend it? It's calls about wedding budgets, and I'm the judge. This episode is sponsored by BetterHelp. Hey, folks, it's Dr. John Deloney. This time of year can be hard, and seasonal affective disorder is real. When I moved to Nashville, the time change caught me off guard. It got dark at like 430, and I was ready for bed by 06:45 p.m.. Things weren't as fun. Even the food lost its flavor. Now I know how to prepare my body. When things get dark, I go outside to enjoy nature. I stick to an exercise routine, and I intentionally connect with people. Another thing I did is therapy. Therapy can be a bright spot even when the sun goes down too soon. Something positive and interactive to make us feel grounded and give us the tools to manage the way seasonal change can affect our bodies. So if you're thinking of starting therapy, give BetterHelp a try. BetterHelp is flexible because it's totally online, so it can fit into any schedule. Just fill out a short questionnaire to get matched with a licensed therapist.

You can switch therapists at any time for no charge. Find your bright spot this season with BetterHelp. Visit BetterHelp.com deloney today to get 10% off your first month. That's BetterHelp. He lp.com deloney. Welcome back to the Ramsay show. Jade warshaw is alongside. I'm ken coleman, and we are here for you, america, talking about your money, of course. And then I'm the work personality here on the ramsey team. And if you think about your income related to work, the environment, you're in the opportunity to grow so that you can increase your income. I'm the guy to take any work related questions as well. So let's get those in. Triple 8825-5225. Temecula, california, is where Jennifer is. Jennifer, how can we help?

Hi. Thank you for taking my call. I need some direction and guidance because I'm feeling a little lost.

Okay.

So I was in a car accident and received a settlement check, and it's $250,000. So I got into a trade school to pay for my education and I hated it, so I withdrew from the program and now I'm currently looking for a job. I just feel lost.

What was the trade?

It was an LVN program.

Help me out. I'm drawing a blank.

Nursing.

Oh, gotcha.

It was just really accelerated and I wasn't grasping the information with how quick.

The program was gotcha. Now, why did you choose nursing?

I thought it was what I wanted to do.

Why?

I've always had a desire to help people. When my grandma was sick, it was nice being able to help, and now I'm just feeling a little discouraged.

Sure.

I'm in my thirty s. I have a son who's 14, and I need to preserve my settlement. So I don't know what direction well.

I'm going to have jay jump in on that, on what to do on the settlement and make sure we maximize that. But I'm curious on this nursing trade school, had it not been so accelerated, maybe different environment. And if you don't know the answer to this, that's okay. But I want to dig on it. Do you think that it would have been a better experience had it been maybe not so accelerated?

Yeah. I think after my accident I'm not the same and accelerated is not for me. So maybe something a little more slower.

That's the key. Because here's what's going on. You got a lot going on. Number one, I know.

Yeah.

You had the accident. There's some challenges with that. Then you identify this trade going to nursing. I've always loved serving, being a caregiver. Is that a fair description of you? A caregiver?

Yeah.

And so you identify this opportunity, you get in it, and it's just overwhelming, and you're going through a range of emotions right now, I suspect one is probably frustration because you had some excitement about it. The other is probably a little bit of discouragement, as you said, because maybe you feel you're not good enough. And I don't think that's true. So that's why I'm locking in on this right now. I don't know that you need to be bewildered, because I still think there's a theme here. It may not be nursing, or it may be nursing, but it's a different program. I just don't want you to get thrown off course because this was a very difficult challenge and you couldn't meet the challenge. I was never good in school. I was never a good test taker. And yet there's a lot of good things I can do and a lot of good things you can do. So what about different caregiving options? What about other jobs that are caregiving but they aren't as nuanced as it relates to the training maybe for being a nurse? Have you considered that?

I have.

I think I'm just trying to see what is out there. I'm trying to good. Kind of take this opportunity to be like, okay, this is a clean slate.

Yes.

What else is out there? What else can I do? But it's so overwhelming with a child.

What's overwhelming about that right now? Talk to us.

I feel just the weight responsibility on my shoulders.

It's just scary. Yeah.

Do you have no income coming in?

No, since I quit my job. But I am looking. I'm actively looking because that's priority number one.

That's what I want for you. So a couple of things, and I want to bring Jade in on the settlement and make sure we don't spin this. But to that end, I just want you to get a decent job where you're valued it's, a safe setting, and you're making some decent money, and you're taking care of you and your child. And let's take the pressure of picking this purposeful path off the table for now. I think you're already on the right path, but I want you to just let's leverage every relationship you have to get a good job with some decent benefits and let's just breathe. Okay. Coming out of the accident and everything, jade's going to give you some great advice on that. Now, coming back off of getting stable, getting the money invested, I want you to then begin to just because you've got a job now, you begin to look out there, what are the type of jobs that allow me to be a caregiver? I spend most of my day using what you do best, and you've got some great compassion and empathy for people. Probably just a tremendous communicator listener, and you're going, okay, what are other types of jobs that don't require me to go into nursing?

And let's just see what's out there, because what's intimidating, Jennifer, is the fact that. You can't name for me right now two or three other options, but I could give you one. So could you work in a nursing home? Nursing homes are always looking for very good people to come in and help, probably make some decent money, decent benefits. That's just one option. Doesn't have to be that. Okay. But you begin to identify there are multiple paths that I can go, and now all of a sudden, it's not. So want to we're going to give you some resources. I'm going to give you my assessment, the get clear work assessment. Jennifer, you promise me you'll take it?

Yes, I promise.

Great. It's going to spit out some very detailed information for you about you, give you a purpose statement and give you some direction. I'll give you my book from paycheck to purpose. That'll walk you down the path after the assessment. But Jade, come in and let's talk about this. $250,000 she's got.

Yeah. So is everybody fine after this accident?

Yes.

There's no ongoing health or anything like that? Health issues, surgery.

But I'm okay now.

Okay, let's get a quick financial snapshot. Do you guys have any debt? Anything saved? Like, what's it look like?

I save. I'm a really good saver. So 10,000 in my checking. I paid off my car and credit.

Cards, so no debt.

Awesome.

Cool. No student loans, no debt of any kind. Just 10,000 sitting in your checking account. And you're calling that, like, saved money? It's not month to month money. Okay. No. Cool. What's your living situation?

I rent a room, which is 900.

So your 13 year old son is not living with you?

Yes is.

Yes, he is. Okay.

Yes.

So first things first is, like Ken said, we've got to start looking for a job. And then as soon as you secure a job, I want you to start looking for a place to rent that's not one room, like a reasonable place for you and your son to live. Okay? Okay. And so you're going to start doing that. You're going to start pricing that out, and we're going to choose something based on what we're projecting our income to be once we land somewhere. Right. So this is going to require you to do some research, okay. Because what I want you to do is I want you to kind of walk through do your best to walk through the baby steps and the ones that you can't quite get to, let's at least plan for it. Right. So you have no debt. So let's put aside out of that 250,000 plus the 10,000, let's put aside what we think would be about six months of expenses for you and your son once you get an apartment, once you get stable, what you think that will look like. And we're going to put that in a high yield savings account.

Aside not don't keep it in your checking account. Keep it someplace else. And then we're going to get that job and we're going to start looking. Once we get those benefits, we're investing 15% of our income and we are going to start looking, just be in the market for what it might look like to buy a house one day, start doing the math. And we're going to put some of that money aside, and then we're going to work with the SmartVestor pro on the rest of this money. Austin will pick up and help you get connected with the SmartVestor pro. Because I want this money out of sight, out of mind, gaining interest for you so it's there for you when you need it upon retirement.

Good stuff. We're rooting for you. You're going to get there. I promise. Jennifer you're brave single mama. Love the single moms out there that are doing so much. We're here for you. This is the Ramsey show. Welcome back to the Ramsey Show. We're coming to you from our worldwide headquarters just south of Nashville, Tennessee. I'm Ken Coleman. Jade warshaw is with me this hour. The phone number to jump in is triple 8825-5225. And out in the lobby, by the way, we have a fabulous studio audience today from all around the country hanging out in the lobby. And we invite you to come anytime you'd like to watch the show. And on the debt free stage in the lobby, next to the fabulous audience that I was talking about are Chris and Amanda. Welcome, Chris and Amanda. How are you doing? Great. Where are you guys from?

Rochester, New York.

Rochester, New York. All right. Did you see the guy over there with the bills shirt on?

That would be my father.

Okay.

All right, good. We got a member of the bills mafia in the lobby, so that's always exciting. All right. And you guys are here because you paid off some debt. So tell us, how much debt did you pay off?

We paid off $48,835.

Yeah.

Wow. And how long did that take?

It took us eleven months.

Wow.

Getting after it. And tell us your range of income during that time.

We started out around 72,000. By the end of the journey, we were down. We got up to 90,000.

Way to go.

What did you do to bump it to 90?

Lot of overtime.

What do you guys do?

I'm a mail carrier. Postal service.

Nice.

And I'm a stay at home mom, so he's really been working so hard for our family.

Wow. So were you a stay at home mom through the whole eleven months? Yeah. Wow. Way to go.

Thank you.

That's something.

That is something. All right, so what happened? What was it eleven months ago? What happened to make you guys get on this journey and you to work so hard?

Chris well, it all started with a whole life policy. I actually was at work and I was loading the truck up next to a coworker who I had mentioned that I was leaving early that day to go sign the paperwork for the whole life insurance policy. And that's when his eyes lit up and went big and said, you got to stop doing that now. You got to listen to this show and read this book. And I was a know, yeah, all right, I'll give it a chance. So I listened to the show for a couple weeks before I even mentioned it to amanda or anything. And then once I read the total money makeover, it was game over. And that's when I came home to her.

Yeah, he came home and he's like, I've never made this much money in my life. This is the most I've made, and I'm hitting a wall. I'm working 40 to 60 hours. We don't see each other. I can't keep going on like this. We can't keep going on like this. We need to do something. And we were, like, taking out of our savings to pay for bills and do things every month, and we were living paycheck to paycheck, and it just shouldn't have been that way.

Working too hard to feel that broke. Definitely.

We were just spending too much money. By the end of the month, we had a nice savings. We thought we were just draining it every oh, wow.

Every time you stack up the money, you were pulling it back out for bills.

Yeah, we got a tax return, and we kind of put that away into the savings that was going to be our account to vacation and stuff. Yeah, but then it just went every month. It was just too then then when.

Chris comes home and he's like, hey, I have the solution for all of our problems. It's a guy on the radio. What was your reaction to that? Were you like, yes, I'm on board. Say less. I'm doing it, or were you, like, waiting?

What are you talking about? Who's telling you that? Of course I was kind of, like, questioning and asking all the questions and not completely. And then he brought the book home, and I didn't read it. Sorry, but I hadn't read it. But then I didn't want to see him so frustrated and stressed out, and I was feeling it too. I was just like, tell me more about it, and let's do this.

I'm on board. I love that. So what kind of debt was this, anyway?

There was six credit cards and two cars.

Two car loans?

Yeah, six credit cards. Wow.

Did you sell the cars or did you pay them off?

No, we paid them off.

Nice.

I still got the car.

Okay. Very nice.

My parents were like, we want to help you. We're alive right now. We have the money. Let us give you the money. And I'm like, no, I don't want to take money from you. And we actually had transferred our balances over to 0% credit cards, and we were going to start doing it that way and pay off as much as we could and everything. And then we found this.

And you realized all that was just the run around.

Now, I heard you say, Chris, that you were already working crazy hours when you came home with all this. Did you add more hours?

Yes, I did. I was working probably 10 hours a day, and then once COVID hit, overtime was unlimited.

Wow.

There were so many open spots. So I was doing probably 12 hours a day.

Wow.

Six days a week.

Wow. So what did you guys do? And once you got on board, did you just immediately start slashing the budget? Did you sit down, create a budget? What did that look like?

It was the budget. We've never had one. I never had one growing up. I don't know. You've never had one growing up?

I was like, budget. I can do this in my head. Like, we don't need a budget. Budget. What?

Yeah.

No.

Oh, gosh. So when you realized, okay, because obviously the crux of all this is the budget. And once you realized that, what was your reaction like? Because I know for me, I used to be like, a budget.

Come on.

No, I don't think so. So what was your reaction to that?

So it felt kind of suffocating. I'm more the free spirit, and he's more like, okay, we got to save. So it was kind of a little suffocating at times, but we just communicate and we talk about everything, and we just keep open communication and we work the budget.

It really opened up how much we were spending on know, spending money on things we didn't need. We were going out a to. When you're working a lot, it's hard to be home. Make so.

So what do you say to people? Because, I mean, Ken can attest to this all the time. People are like, I don't want to be on a budget. It's going to ruin my fun. It's going to take me out. Speak to that person who's got $48,000 of debt and they're fighting the budget. Tell them.

So I would say just live. Well, that you say it all the time. Live like no one else. It's hard at first, and your mind kind of just shifts when you start to get out of debt. Little by little, you get excited about it, and then the budget is not so hard, and we really focus on what's the most important to us at the time, and we budget that money for that. And then I don't know. We ate out a ton, so we slashed a lot of that out. No more coffee, no Starbucks, no anything like that.

And you're alive to tell about here.

What was the most extreme thing you did on cutting the food budget? Did you do rice and beans?

We did a lot of pasta.

Yes, pasta, pizza, pierogies, all that sounds delicious.

That doesn't sound like you're suffering at all.

No, that sounds delicious.

We weren't suffering.

So you're not sick of pasta? No, still eat it to this day. Okay. I like that. All right, great. Now what about support system?

We have a huge, huge support system.

They all came to join us today.

All right. Tell us who all is here because they're beaming with pride.

I know. We got my parents, my brother Brendan, who's in a wheelchair.

Okay.

Then I got my brother Shane, my father in law Kai.

Wow.

My aunt Nancy and my sister Kelly.

Fantastic.

Behind here is my mother in law who's taking care of our baby right now.

So fun. So everybody was supportive. They weren't going, you guys have lost your mind. They were supportive. No, I mean, that's great. Yeah. How much of a difference does that make to have somebody supporting you?

It's big to have somebody cheering you on.

Yeah.

It's hard to do it by yourself.

Yeah.

Wow.

So what's it feel like now?

Feels great.

Amazing.

I could cry.

I know.

It feels awesome being here.

Yeah.

Being able to celebrate with our family. And it's amazing that everybody could get off of work or take the time off and it really means a lot to me.

How old are you guys?

33 and 35.

You guys are going to be millionaires.

We hope so.

That's the goal. You will be.

No, you are. You are on that path. You guys can really dream now. You have nothing holding you back.

Thanks to you guys. This program that you guys put out.

It does work, but you guys did the work and that's the difference. So fun. All right, so tell us about the little one. Let's get her in here. What's her name and how old?

Sawyer. She's 16 months old.

She has no idea how awesome her parents are right now and her future. That is so fun. Look at sweet Sawyer. Is she going to freak out when you guys scream?

Yeah, we're not sure what she's going to scream too.

So a couple of things. We're going to give you a bundle here. We've got the baby steps millionaire book and we've got, of course, total money makeover for you to gift to someone else. And so that's our gift to you guys. So let's get to it. Here we go. We've got Chris and Amanda from Rochester, New York. They paid off 49,000 in eleven months, making 72,000 up to 90,000. Let's hear your debt free scream.

Three, two, one word debt free.

Sawyer had a little delayed reaction, but now she's she's kicking and clapping and she's excited. That's what this is all about, jade a legacy, changing your family tree. And we just got to hear another story. Don't move. More Ramsey show coming up.

Are you a small business owner who feels stuck in the daily grind of running your business? Well, you're not alone. We've helped thousands of business owners just like you get unstuck with learnings from the entree leadership stages of business. Our free assessment will tell you which stage your business is in today and what you can do this week to get out of the daily grind. So don't wait. Go to Ramsaysolutions.com bi Z quiz to take our free stages of business assessment today.

Welcome back to the Ramsay show. I'm Ken Coleman. Jade Warshaw is alongside. And we are here for you. Triple 8825-5225. So you've got money questions? Of course we're here for you. How about something that's related to your money and that's your work? Are you bored out of your skull? Are you burned out? Are you getting overlooked? Want to start something on the side? Work for yourself. Any work related questions? I'm the work personality, if you will, here on the Ramsay Network and on the Ramsay Show. So excited to have all of you with us. Triple 8825-5225. Let's go to Devin in Kansas City. Devin, how can we help?

Hey, guys. How you guys doing?

Good. What's going on?

Hey. So should me and my wife increase our house rent payment when we will have just paid off our debt? And I can get into that more if you'd like.

Yeah, tell us. So you just paid off all the debt in baby step two? Is that what I'm understanding?

So we will about the time that we have our contract renewal. So in about February, March, we're expected to pay off the rest of our debt, and right about then is when we're supposed to sign a new lease for our rental. But we're wanting to upgrade in house size because we've just added to our family recently.

Tell me about that. Tell me about that. How many people in the family have just been added?

We only have three right now, so me, my wife, and then a four month old. But we're wanting to expand eventually, so we're trying to find a balance between rent payment is going to be much higher, but we're also wanting to save for a house and also baby. We're trying to figure out how to balance it out.

All right, we're going to jump in. Okay. So it's you and mama and baby.

Yes.

Okay. And what are you living in now? Give me square footage or bedrooms. Just tell me what the size of your current apartment is or house.

Right now we rent a house that's a single layer, 950 square foot, about three bed, one bath, one car garage. We're wanting to try and get two car garage, maybe a basement if we can just a little bit more room. We were blessed with a bunch of house gifts when we got married and whatnot and got way too much stuff for a tiny little house. These are all luxuries and whatnot.

What do you pay for that?

We pay 1025 right now a month.

Which is really good and if you were to upgrade, what would you be paying?

It'd probably be more around 1400.

Okay, so we're going up 300 and some OD dollars.

I'm not worried about that, Jade. I was worried he was going to say it was closer to 2000.

No, I'm not that crazy.

I don't think you need to move. I think you got a stuff problem. I would stay.

I would stay too, because you agree with me. Usually I'm Mr. Once in my life.

Yeah, I was going to say because I'm Mr. Like keep it tight and save now for the house.

Because here's what you have to ask yourself, like long term. Not even really in the short term, you're going to want to buy a house. You said yourself that you guys are trying to save for it. So $400 or $375 each month is a lot of money.

It is.

And here's my thought. I'm like a four month old that's little that's like a football that doesn't take up much space. And your wife, she's not pregnant yet.

Well, you got three bedrooms still.

Nine more months.

I don't care how small it is. You have three bedrooms.

Yeah.

This house is just driving her nuts. There's other things our neighbors aren't great. There's other things that go along with it. We just don't like the area per se. We're not going to get this deal anywhere else.

Well, is that true? I don't know.

Well, from what I've been, we got this house in 2020. So it was kind of like right before everything really jumped up. So about the same square footage is going about $1,300 right now in some areas locally.

Okay, I hear what you're saying that there's reasons and look at the end of the you're grown. At the end of the day, you're going to get off this call and you're going to do what you and your wife think is best. And I'm not mad at that.

Okay, hold on, let me jump in because I want you to keep going, but I got to ask you, how.

Am I supposed to keep going, Ken?

Because I'm going to ask a question and let you keep going. I'm not taking to I think this is a happy wife, happy life situation and you are the resident wife at the desk. She's not. How does he handle that?

Here's the problem and it's not a problem, it's the reality. She has a four month old, so everything is going to get on her nerves. Am I right, Devin?

You are right.

I've been there. When you got a four month old, you notice everything's a problem. You can't even have the wrong look on your face, devin because that's going to be a problem too. You know what?

So I've been there.

I think that it could help them to just take a breath because everything's new. They have a four month old. Everything's new and everything's annoying, y'all are still tired.

Cranky, cranky. And we're not talking about the four month old.

You're about to get yourself in trouble.

No, I'm talking about him. Okay, I'm deferring I'm not getting in the middle of that. That's why I brought you into that. Happy wife. Happy life.

Happy wife. Happy life does have something to do with it, but I think this is a question of what do you want most or what do you want now? Happy wife? Well, it sounds like what they want.

Most is I'm just keeping it real. I would stay.

I would stay. That's what I'm saying. But she wants to move, so happy wife would be her.

Well, I think we got to bridge the gap. We got to have a conversation with Mama and have her conversation with Mama.

And think about ask yourself, what do you want most? Do we want to be able to buy the home that we want sooner in life, or do we truly have to move? Because, again, Devin, moving is expensive. Like, folks don't talk about that. There's an expense there. You're now uprooting your life even more, so it has the ability to add even more stress because there's the whole interim before you get to that. Okay, we're settled. So you're about to crank up the volume on I got it. You know what I'm saying?

I think I got an epiphany. We'll see what okay, this is up for you and Deborah.

I'm going to take you to task on this.

And I'm fine with that. Okay. I think you have to sit down with your wife, and I think you got to literally on paper yes. Write down what the increase in rent would be. And so let's just say it's 350 a month increase from what you are because you've given us that range. And you write 350 times twelve equals and there's your first year and you just lay the numbers out and go if we were to save this money for a house, we can get there by such as you got to cast vision. You can't just tell her to, hey, babe, try to get through it, because to your point, she's tired.

I love that. And I think you got to it. I'll add one more to it. Once you get that number, you need to then run that back and go, how many hours of work is that? Because if we're going to replace this income, it means us working. Right? If you're going to say, hey, not only are we going to ratchet up our rent and it's going to cost us, I don't know, $20,000 over the course. $10,000 over the course of the year. Now, what does that look like, us working to replace that money?

It's a great call, right?

And now all of a sudden, you see what it is.

Yeah.

So I like this conversation, Devin. I like that you guys are thinking about it. I love that you called in the show.

Yeah, thanks for calling. Listen, young couples, if I could say anything about this, it's be patient. Think about the long term. I'd suffer a little early on. I would, too, to get to the right house in the right place.

Yeah. I just mean Dave says it, and I love how I love the analogy. Renting is camping. It's camping. And if you get too hung up and you turn it into glamping, then you're kind of defeating the purpose because it's a short term solution. It's a short term solution while you're getting yourself together until you can buy. Because ultimately that's the goal.

And I will say this. I have three kids. I mean, there is a day coming for a lot of young couples if you have that many kids, where you need more space sure. And there's a whole lot more expenses coming your way. I would be like, if you need Ken, you don't need it.

Okay. Yeah. Roll it out on the need.

Oh, you talk about what oh, yeah. We were in a smaller house when.

We grew up as kids. You know, we were living in small houses.

Oh, yeah. But I'm talking about, like, if you're in a little teeny house like that, then you need multiple bedrooms and bathrooms and all that kind of stuff. That does get to that point eventually.

Yes, but I still say the word need is you do want more than one bathroom.

Yeah. Well, when you have a teenage daughter and two teenage boys, they can't all share the same bathroom.

That's true.

That's what I'm talking about. That's what the Colemans were dealing with. Had to do it.

Look, let me tell you, we did.

It before they got to middle school because that was not a sustainable situation.

At one point, we lived in a duplex. It was me, my mom, my brother, and me and my older brother that would come home from college. One bathroom.

Ken, I admire that.

I don't. That was tough times.

I get it. But I get it. But I'm saying I know you can't do it. That's the whole point. Hey, listen, there's coming a time where you got to spend money on stuff if you don't have to. Now, when the baby's little, don't hey, good hour. Jade. Thank you so much. James Childs and all the guys and the gals in the booth keeping us on the air. Don't move. More Ramsey show coming up live from the headquarters of Ramsey Solutions. This is The Ramsey Show, where we help you win in your life with your money, your work, and your relationships. The phone number for you and your question is triple 825-5225. Triple 825-5225. I'm Ken Coleman. Jade Warshaw joins me, and we love being here for you and your questions. By the way, the Ramsay Show annual listener survey is live. We want to know what are your favorite parts of the show? What do you want more of? What do you want less of? What topics do you want us to cover? All these things. We want to know how to serve you best. There's two ways to participate. You could text the word survey to 33789.

That's survey. Text that word to 33789 or visit Ramsaysolutions.com surveyramseysolutions.com. Survey. Sign up today and you will be entered to win a $500 gift card just for telling us what you think. So be nice to Jade and I, please.

Well, speaking of survey, Ken, I have surveyed my comments on social media and we saw that people wanted to hear more about the baby steps. And so the team and I posted a video explaining, just briefly explaining baby steps one, two, three, and four, and it went bananas. And so I thought to myself, it brought in a lot. It brought in like 30 or 40,000 new folks, all new to Ramsay. And I thought it would be good to go through and really explain what we mean when we talk about baby steps.

One, just a fundamental simplicity of that video. And the plan went bananas on Instagram.

Yeah, you all showed up. Well, it probably wasn't you guys. It was new folks. So just when I think that everybody knows the baby steps, there's still people who don't know what it is. And that's great.

Let's do that. So this is great. So if you're new to the show, we have seven baby steps, and we're going to walk through the first three and some of the general questions around them. So I'm going to tee you up. You good?

Okay. Yeah. Rapid fire.

So baby step one is we want people to put $1,000 in a savings account for your garden variety basic emergency. So the question begs why $1,000? Is $1,000 enough?

No, $1,000 is not enough, and it's not intended to be enough. Hear me loud and clear. This is just temporary. At the end of the day, if you have $1,000 saved, as an American, you are ahead of the pack, because 56%, the majority of Americans could not cover $1,000 emergency without using debt. So if you have that, you're ahead of the game. 36% of Americans have $0 saved, so you're ahead of the game there as well. So, yes, $1,000, it's not enough, but it's enough to get you going. And so you're paying off your debt quickly, and then later on, you'll stock it up and you can do it.

Quicker than you probably think. What do you think? What do you think is a rule of thumb on how quickly you can assemble $1,000 for nothing?

Average person gets it done in 30 days because you're going ham, you're selling stuff, you're working extra hours. You are just literally pulling from everywhere you can to get ham. Yeah, go and ham sandwich.

I've never heard that before. If I say that, will I be cooler?

Your sons will probably be like, who. Do you know?

Well, they know I know you, so they'll clearly think it's you. Okay, great. I'm going to use that one this week. It's going to get some eye rolls.

Ham salad at the house, ham salad.

But I just say that just ham?

Yeah.

That's all I say. You're going ham.

Yeah.

All right. See, now I'm learning along with the audience, and everybody enjoys that. Okay, now, so where do they keep it? I said in a savings account that is separate from checking. Why do we say that?

Well, because, A, you get tempted by it. Some people are more tempted by that than very I see money and I'm like, well, how can I spend it? So keeping it in a separate account. I even like putting it in another bank, like an online bank. I've mentioned Ally before. We don't sponsor them in any way, but I love that. By the way, this account, we're not putting, like, debit cards and things like that attached to it because it's an emergency fund. We don't want to have easily accessible access to it. Right. So high yield savings account, if you can oh, I'm sorry. You know what? We're just talking about baby stuff. When you don't have to put in a high yield savings account. You can just sock it away. Put it in your sock drawer, put it in your normal savings account. That's fine.

Sock drawer.

Look, where I come from, you don't.

Really mean that, do you? $1,000 in a pair of socks.

Well, it depends on what neighborhood you live in.

Okay. All right.

Put it in the bank. Put it in the savings account.

Now, I think we got to get to this. What qualifies as an emergency that we're going to actually get into, the $1,000 hardly anything.

Hardly anything qualifies for an emergency. Number one, it needs to be completely unexpected, all right? Because some of you all are like, oh, well, Christmas is coming around the corner. No, completely unexpected. It has to be completely necessary, and it has to be urgent.

All right, real quick, real quick on this one. Why wouldn't baby step three, which is a three to six month emergency fund, why wouldn't that be the first baby step just to kind of ease our pain and our fear? Why would we not do that?

Well, let's take a look. I mean, we already said the stat, most people don't have anything saved. And the reason they don't have anything saved is because all of their money is going out of the door in debt payments. So it's hard to have the money in your budget when you've got a bunch of debt to stack up three to six months of expenses. And most folks give up or they keep dipping in and spending it. Right.

There you go. All right. Baby step two, which is we say pay off all of your debts. And it's very specific in baby steps. Two jade. We say pay the smallest debt first, then move up, if you will. So smallest to largest. Why do we recommend that?

Yeah. Because we want you to win. And a lot of times that smallest debt, right, it's just a $200 Capital One card or 1500 deal that you have with a credit card company or a little private loan. When you pay that off, you feel that win, and it's like it just excites your brain. And you're like, you know what? I can do this. And so you pay that one off and you have the extra money freed up, and you're able to throw it to the smallest debt after that, and you get that momentum, and you get to experience those wins. And it does work.

What's the average amount of time that we find it takes people to pay off debt in baby step two if they're going after it?

Two years or less.

Two years or less. Wow. Fantastic.

Two years or less. That's nothing.

It really isn't in the grand scheme of things. And I want to point out here, as the guy who's always focused on work, let me tell you something. You got to work. Work every debt free scream I have ever sat in on.

Yeah.

We have seen their income go up.

Yeah.

And the more income you make, whether it's multiple side hustles, two full time jobs, whatever your scenario is, the way to get out of the baby steps faster is to increase your income. Go work.

But Ken, break that down, because for some people, it's the core income, and some folks just need a side hustle.

That's exactly right. If we can't increase it via our core career. So if we can't get in extra hours, if you will, or overtime within that, we're going to go work multiple other jobs. Working weekends, we're working 80, 90 hours a week, depending on how intense our debt situation is. All right, that takes us to baby step three. Once we pay off all of the debt, how do we determine if we want to go three months, four months, five months, or six months? Because Dave has given us the range three to six months of expenses.

It's all about stability. So if you are a two income household and you both have really solid jobs and you're both healthy, three months is probably fine. If you're a single mom and you are a server at a restaurant or you have some volatility in your work, you probably want to lean towards six months. So we're looking at how many incomes are coming in, whether you're married or single. Like, maybe you're single, but you've got multiple income sources, maybe three months is okay. Look at your health. These are the things that we're looking at. And it doesn't have to be three to six months of your full budget. We're talking about what it takes for your household to survive. This is bare bones budget.

So, do we keep it in that high yield savings, or do we invest it?

Yeah, this is not going in the sock drawer. We're putting it in a high yield savings account. We are not investing this money because if something happens, you need to be able to get to it. So do not invest your savings account.

There it is, folks. Baby steps one through three. That's why we teach it that way. And don't forget, go get some work with some experience and skill set that you have to increase your income. All right? Good stuff. Way to go, Jade. Hey, quick break. Got to pay some bills. Even we have to pay the bills. And we'll be right back, folks.

Changing your family tree takes more than rice and beans and side hustles. It's also about transferring the big financial risks off your family by having the right kinds of coverage in place. That's why my team created the coverage checkup quiz. It only takes about five minutes to find out what types of insurance you need and don't need to protect your finances. Make this quiz one of your regular checkups, starting right now@ramsaysolutions.com. Checkup. That's Ramsaysolutions.com checkup.

Welcome back to the Ramsay show. I'm Ken Coleman. Jade warshaw is with me. The phone number is triple 8825-5225. Triple 882-5225. Time for our question of the day, sponsored by neighborly, your hub for home services. Once the kids are back in school, it's hard to find time for home maintenance. But Neighborly is your source for home repair experts like precision door service or dryer vent wizard. Incidentally, that was one of my nicknames in high school dryer vent wizard. Little side hustle that I developed to make a little extra gas money. Okay. And it was self proclaimed.

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All right, today's question comes from Brian in Oregon. He says, I'm 22 years old, I'm married with two kids, dang. And I'm going to school for engineering. I work around 30 to 35 hours a week at my family's flooring business, and it pays the bills, but it won't get me the engineering experience that an internship would. On the flip side, an internship wouldn't cover the bills. So my question is, is it worth going into debt so I can take an internship to build experience for engineering down the road?

No. And it's also a false narrative. Brian, you don't have to have an internship to get entry level experience for engineering. You're going to school for engineering. So stay in school. Finish the engineering. And what is entry level for someone who gets an engineering degree? The answer is, you know, I don't know. Maybe you don't know, but you can find out. But there is entry level engineering jobs. That's where you're going to have to start. So we're not going into debt to go get an internship? You want to get job placement through the school that you're getting the engineering degree and then apply the proximity principle. I wrote an entire book on one little thought. It just says this in order to do what Brian wants to do, insert blank type of engineering got to be around people that are doing it and in places where it is happening. So while you're in school raising those babies, working 30, 35 hours, you're also on weekends and nights having coffee, having lunch, spending time with engineers who are way ahead of you in this world, and they're going to tell you their thoughts on how you get placed and how you get in.

And if you do it with a spirit of humility and hunger, there might just be some of those guys and gals that you meet with who will open up a door for you. So no to a loan in order to do an internship, no to credit cards in order to do the internship. You don't need the internship. What you need is connections.

Ken, let me ask you about something. So you just said get around these folks. Hopefully they will put you on and give you opportunity. Let's talk a little bit about gatekeeping.

Yeah, love it.

And this idea of I see this all the time, especially with social media influencers, people who start their own business and they feel like they've figured something out and they're afraid to share it because they're afraid if they share it, what they'll give up their piece of the pie and then that's, you know what I'm saying? What are your thoughts on yeah, well, there's your thoughts on that.

Yeah, there are some people that are going to be very scarcity focused. I don't want to help you. You could be competition. I don't want to use some know by connecting a young Ken Coleman to this person. I don't want to do that. I had people do just they don't want to use whatever capital is there to say, hey, would you connect with this young guy and have lunch with him or whatever.

Do we take it personal?

No, you can't take it personal. No, it's actually about them. They really do know Michael Easter was just in town this week. They have a scarcity mindset. Everything for them is I have limited this, limited that, and I'm not going to use my relationship capital to call somebody up and go, will you meet with so and so and so to your point of opening gates? You're going to have some people that aren't willing to do it. They'll either say no or they will ghost you. And that's unfortunate, but you can't take it personally. You just have to go for whatever reason, it's about them. They don't feel comfortable and that's all you can do. And then you go to people who are comfortable. And I've always been that person.

Well, I mean, but okay, as the person who is in need, like in want of exposure or whatever, where do you draw the line? Because there's been times where people have been like, hey, just contact so and so. And I'm like, they're further along than me. I don't want to sound like I'm using my relation. I don't want to use our relationship to try to get something from them.

Well, I get that. And I've had to get comfortable with what I think is the most underused question in the world. And that's, will you help me? It doesn't need to be smarmy. It shouldn't be too big of an ask. It should be a basic ask. But I will tell you I've reached out to people on social to do an interview or, hey, I'd love to touch base to do this, and nothing. And so I go, all right, yeah, I'm moving on.

But I mean, like an interview, that's something that has the ability to benefit both parties.

Yeah, but still yeah, they'll ghost you. They don't think you're a big enough deal. Who knows what they're thinking? Yeah, I can't fill in that gap that creates an unhealthy narrative. So I just go, all right, it's not meant to be. I interviewed Soledad O'Brien. Do you know her name? Soledad? Longtime journalist. And I interviewed her for my first book, one question, and I asked her about because she had made her way into media, and I asked her she dropped a bomb on me. I said, how do you deal with rejection? And she said, I learned how to turn no into not now or not here. And that to this day is one of the best pieces of advice I've ever heard anybody give me.

That's interesting.

So you just got to go because no is very final and no is very personal. Well, let me you just said no to me. You said no to me. I think I'm pretty good guy, whatever. And it's very personal, very final.

Let me add one to that because I just read something that said no simply means I need more information. I have a little bit of fear, and I need a little bit more information. What do you think?

Think that's fair, interesting. I think that's true. But in a situation where you want a job and you get a no, they may needed more information, but you're.

Not going to get too late now.

Give it to them. So I think that's probably squared. Yeah, but the point is it's not why they said no. The point now is what do I do with no? And I think for those of us who hear the no, we've got to now turn that into not yet, not here, and realize every no that I get, even if I'm moving forward, every no is getting me closer to the yes.

That's right. That's a word.

So I just think that that's now, by the way, it's easy for me to say that now with some gusto.

Right.

But I had to eat dust and eat dirt and eat nose and all that just along the way. I mean, I had a guy tell me once, you don't have enough talent to make in the top ten media market, so you shouldn't even be trying this. And I believed him. Yeah, for a while. You have too. You got some rejection stories.

Yeah, the rejection is real. But, I mean, it is it's all about how you use it as fuel and you can't let it stop you from asking again or continuing to make those movements forward.

Yeah, absolutely true. Triple 882-55-2251 thing I want to talk about really quick. This is very important. We talk a lot about budgeting.

Yes.

And how if you're going to win with money is this too strong of a statement? You cannot win with money if you don't know where your money is.

That is not too strong.

All right, so budgeting is a big deal and Every Dollar is our budgeting tool. It is absolutely fantastic. We're very proud of it. It is an amazing tool. We can connect it to your bank account if you want to go that far and to go along with encouraging you to budget. We've got an awesome thing coming up, jade and you're a part of this along with Rachel Cruz, and you're partnering with Every Dollar. What's going on?

That's right. So on Monday the 30th, talking about October 30, we are hosting one webinar, a budgeting webinar. Now, what Ken was saying is this is a series. I'm hosting them. George Camel is hosting them. Rachel Cruz is hosting them. But if you want to do a webinar with me, that's totally free, it's this coming Monday, October 30. The webinar is during your lunch hour, during your lunch break. It starts here at 1130 Central. It's free, guys. It's free to sign up. I'm giving you an hour of my time. Totally free. And if you really want to follow along, go ahead and download an Every Dollar budget. You can download that for free and you can follow along with us. We're going to tell you how to use this thing because this is how you win. These are the tools that you need in your toolbox in order to win with money. And Every Dollar is like a good power drill. It's like a sledgehammer. This is what you need.

Where do they go?

They go to EveryDollar.com slash budgeting to sign up.

All right, give me a little. Sing us out here with a little. This is how we do it.

This is how we do it.

Oh, I wish I could do that. I can't. Why did you know it?

Why did you choose Montel Jordan? Guys.

Because you said, this is how we do it. I'm picking up on what you're laying down. Isn't that what the kids say? I don't know what's happening. I'm going to take us a commercial break and learn how to talk cool. This is the Ramsey show.

Here's the thing about investing advice. You can find it just about anywhere, but that doesn't mean it'll always help you with your personal goals. Here's another option. Check in with a SmartVestor pro. These financial advisors can review your plan or help create one that's personalized to you. To find a SmartVestor pro in your area, go to ramsaysolutions.com SmartVestor. Go to ramsaysolutions.com SmartVestor.

Ramsay Solutions is a paid nonclient promoter of participating pros. Learn more@ramsaysolutions.com SmartVestor welcome back to The Ramsay show. I'm Ken Coleman. Jade Warshaw joins me, and we are here for you, america triple 8825-5225. That's triple 825-5225. And we've got a great studio audience here with us, as we do most days. Great to see all those folks out in the lobby and then in the lobby. But on the debt free stage is Gabriel and Ariana. How are you two?

Good.

And you guys?

Great.

Good. Did I say your name right?

Yes.

Okay, lovely. I didn't want to start off on the wrong foot.

You said great.

Oh, well, thank you. And you guys are from chicago. Chicago, the windy city.

Yes.

Fantastic. And what brings you down here? A debt free scream, I'm guessing.

Yes.

All right, let's get the numbers. How much debt did you pay off?

200. And hold on, let me get my cheat sheet here.

No worries. We can wait.

200. And is it on?

$285,302.

Holy cow. And how long did that take?

71 months.

71 months. And tell us the range of income during that time.

150,000 when we began to about 170.

Now, but it did fluctuate a lot in between.

Sure. What do you guys do?

I'm a firefighter.

Oh, thank you for that. Great service. That's great.

And I work for Chicago Public Schools.

Okay, good. And any overtime in there, I'm guessing? Is that what some of that is?

Yeah. Well, prior to becoming a firefighter, I used to be partners in a construction company, so that was part of the journey. And also the income fluctuation that she was mentioning.

Okay.

Yeah.

All right, great.

What kind of debt was this?

So we had $35,302. That was in my student loans, credit cards, and our family car, and then the 250 remaining was for our mortgage.

I was wondering. That's amazing.

Yeah.

Wow.

Dave says we're looking at weird people. He likes to say that. I don't think you guys look weird, but I get the point.

A paid off house in Chicago.

That's weird.

Come on.

Now I get it. So what happened almost six years ago for you guys to take this journey?

Yeah, one of our good friends at the church we used to attend was hosting the financial peace class, and we decided to take it, and our life just changed from that point forward.

Wow.

Okay, give me a little bit more.

Yeah.

What was going on to where you go, all right, because the way you said that, it was kind of like.

Yeah, we just walked on in there. Yeah.

So our very good friend, like, he said, they were giving these classes and they were people that we trusted and they were also following the Ramsey plan, and they were very good with their money. And we didn't really argue about money, but at the end of every month, we'd be like, we make good money. Where is it going to? So the class really just helped us to change our lives and to really buckle down and to make our money work for us.

Wow.

Let me ask you kind of an inverse question. Out of what you learned in that class, what did you push back on the most?

Probably the budgeting was hard for us because we didn't budget like she mentioned, kind of the end of the month, we just kind of be like, what happened with all the money?

Are you both free spirits?

That was probably the hardest part. And then when he was working in the construction business, the income fluctuated so much that it was very hard to budget. I see. But we're here.

What was the first debt that you took on? I'm just curious.

The first debt that we took on was right after the class. We did my student loans. We had like 4000 in credit cards, and then we had a $12,000 car loan, and that's the first thing we did. And then after that, we sold our house and we made a profit of a little bit over $86,000. So we used that to put 20% down on a new property and we bought the Ugliest house on the block.

Wow.

And yeah, we use the rest. We cash flowed $250,000 in a home renovation.

Wow.

So that's not including so it's no longer the ugliest house on the block.

No.

Yeah.

That's beautiful.

Wow.

That's so smart. So what would you say is the key to getting out of debt?

Being on the same page and just supporting one another, having a core of people also that are supporting you. Our family was very supportive. Our close friends were very supportive also.

And being content and just being okay with delayed gratification and knowing that while we did make good money on paper, at the end of the day, if we didn't take these steps, then we were not really going to be able to enjoy it at the end of the day.

That's right. Well, you don't have a payment in the world.

No.

What happens next?

We're just saving for our next investment.

I feel like you got to do something.

I feel like we're still on the Ramsay plan. We're so deep in right now. I feel like it's so normal. Why not continue until we get our next investment?

I'm giving you homework. This is baby step seven B is you need to go and do something fun.

There is a cruise in our future. We don't know when, but there we go.

We also added two kids while we were in the process too.

So when you say investment, what do you mean?

We want to have an investment property at some point. Yeah, I'm still working. We have three kids. And it's so funny because a lot of people say, oh, you paid your house. Sorry. That means that you don't have to work. And I don't feel like that's the case. I feel like we really were starting over. We have a fresh start, and it doesn't end here.

No.

We still have goals, and we still have aspirations.

What is your house worth?

I'll say about, like, $700,000.

Oh, boy.

And what do you guys have in retirement?

We had to kind of slow that down while we were doing it. I know we shouldn't have, like, 100,000.

Okay.

And we're both vested in our pension.

So you guys are just steps from being millionaires, and you guys are off and running.

Yeah, we're excited.

You should be.

And another part of our journey was there was one point where we were on one income, and it was because we had been following the baby steps that it was okay. And this had been our goal when we purchased the house. We said, we're going to pay off the house in five years. And because we had been on the baby steps plan and we had money in our save emergency funds, it didn't derail us from our plan. And we finished exactly when we said, wow, that's amazing.

You two are such an inspiration for so many people that are watching and listening today and will see the story in the days ahead. So one of the things we want to do for you is we've got a little bundle here for you. We're going to give you Dave's latest book, baby Steps Millionaires, because you guys are really close to that, and so that's yours. And then we're going to give you a copy of the total money makeover to gift to somebody else to pay this whole idea forward. And so that is our gift to you. All right, let's get the kids up real quick. Who do you have with us? Tell us their names and ages.

We have Eliana Velez. She's five months.

Yeah.

Okay.

And then we have Daniel and Nathaniel. They're outside.

Oh, they're outside?

They're making their way in.

They're making their way in. Okay. And how old are they?

How old are the boys?

Daniel is seven.

Okay.

And Nathaniel is two.

He is two. Wow.

Everyone that's not with us right now, he's had some important things going on with school.

Good.

He wasn't able to make the okay, good.

Well, here they are.

Change your family tree. That's amazing.

That's exactly right.

Daniel.

Hey, Daniel.

He'll be here one day for his that's right. Hopefully no debt, but his house paid.

Off has he been practicing the scream? The boys?

Yes.

Okay. Look at this cuties. All right, here we go. All right, gang, we are ready to go. We've got Gabriel, Ariana, Daniel, Nathaniel and Eliana from Chicago, Illinois. They paid off $285,000 in 71 months, including their house, making 150, all the way up to $170,000. All right, gang, let's hear a windy city debt free scream.

Make it loud.

Ready?

Three, two, one. We're debt free.

I love it. Fantastic. The baby's going. Why is everyone screaming? That's my role. Jade, thoughts on that? That lovely family and an unbelievable future.

Look. Don't tell me y'all can't do it. They did it. In the city of shytown.

Yeah. Unbelievable story. Wow. This is what it's all about, folks. You can do it. And we are here to help. Don't move. More ramsay show coming up. You welcome back to the ramsay show. I'm Ken Coleman. Jade warshaw is alongside triple 8825-5225. Our scripture today comes from one corinthians 13, six and seven. Love does not delight in evil, but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres. Our quote of the day from none other than the king, or maybe the king, depending on where you're from. Elvis presley. The truth is like the sun. You could shut it out for a time, but it ain't going away.

I like that. The king of rock and roll.

You know what I mean? You know what, boy? We've lost control. James is about ready to turn our mics off. Let's go to Alex, who joins us in Los angeles. Alex, how can we help?

Hey, ken. Hey, jade. Hope you guys are well.

We are. We're having too much fun. What's going on?

All right, I need some help. My husband and I have a car loan. It is our last debt. Other than our mortgage, it's about $39,000 left on the car. It's not our only car, but I also have about a little over $50,000 in some stock that I have with my company from, like, our stock purchase program. And I'm wondering if it would be a good move to sell the stock and pay off the car.

One or two, three. Yes.

Even if it's at a loss?

Yes.

To sell the stock at a loss because the market's down? Is that what you're saying?

Yes.

I mean, yes.

You can't control that. It could keep going down.

Exactly. And you need to get out of debt. And the fact of the matter is, we're cleaning up. Part of getting out of debt is cleaning up not just debt, but poor financial choices in general. And not to say, I mean, look, you invested your money in stocks. It's not necessarily the first place you want to go to make an investment. So we're kind of clearing the table here and resetting it the right way. And not only is that paying off debt, but it's also making sure that your. Money is invested in the right way. And so in this case, yeah, I would totally clear out those stocks, and I would pay off this car and you'd be debt free as soon as that money that cash clears.

How good is that going to feel? Alex, allow yourself to go there right now. Let's just assume we've just paid it off. You're on the phone with the creditors right now. We said, okay, Alex, the car is paid off in some weird voice like that. How would that feel?

Oh, my gosh. I just took, like, a big breath out.

Okay, see, we just role played right into that. This is the no brainer of the century.

Love it.

Okay. Hey, listen, you got to look at this stock as free money. How often do we get free money?

Yeah, I guess I'm just worried because we don't look at it ever, and it's just kind of a quote unquote emergency fund. I know it's not in the right place, but that's kind of our backup.

In case you know what this is. This is the get out of debt and change your life forever fund.

Yeah, it is. Okay, I'm just curious. At the high point or you said it's at a loss, what did you start with?

It was probably closer to 65.

That's what you put in to start.

It's been growing over the last couple of years. So when I was buying, it was at a higher it was lower, and then I think it went up to.

My question is, what was your initial investment? Where did you start? What have you put into it? I don't know. Do you see what I'm saying? You can look at and say at one point it was 65,000 and now it's only 50, but depending on what you put in it, you may have still do you see what I'm saying? Over the life of it, you still may have come out on top if you know what your basis is in it. But anyway oh, I need to look.

At it, but it sounds like I'm just going to sell it and pay.

Yes. Stop.

We don't want to think about it. We just want to do it.

There will be some left in it after I'd still have some money in there. Should I sell it all and then reinvest with a leftover into something else?

Just make sure you set aside some for taxes because there's probably going to be some taxes on that because it's adding to your income. So keep some aside and then whatever's there, I'd probably throw it in the emergency fund. Or you can throw it at your next baby step.

Yeah.

Okay.

I needed you guys to tell me this, so thank you so much.

Yes. You're going to be free, girl and.

Boy, that car is going to feel better. It's going to run better, going to look better when it's paid off. So that's exciting stuff. Very exciting. Don't overthink it.

Yeah. Just hear this.

Today, like, today you're in La. You still got time to make this happen. All right, let's go to Clarice in Tampa. Clarice, how can we help? I knew you were going to do sorry, I had to you just freaked me out. Clarice, I'm sorry for my colleague and her scary greeting.

That's okay. I'm used to it.

I know you are.

Clarice, how can we help?

My question is, I have some money saved up, and I recently learned about tax liens and deeds. So I want to know if I should use that money to get into that or if I should pay off my debt.

I'm sorry, I misheard you. You said you just learned about what?

Tax liens and deeds.

Okay.

Tax liens.

Yeah.

Okay.

To get into real estate.

Okay.

So should I use the money to get the properties, or should I pay off my debt?

We're going to pay off your debt. We're going to pay off your debt because I'm guessing you want to get these properties to cash flow to this whole thing. Yeah, that's big right now. It's big on social media. Everybody's like, this is the way that you can get in the I just.

Really want to get out of my career, honestly.

Well, I can help you with that without getting yourself into more trouble. You need to pay off debt, and we can get you on the right path. What are you doing, and what do you want to do?

I'm a nurse, and my husband and I were wanting to start a family in, like, two years when he comes home. So I want just more free time to be home with my children instead of have to go clock in at the hospital.

Sure.

How much money do you make right now as a nurse?

I make 130.

Okay.

I bring home.

That's really good. And so your big reason for getting out is more free time? Is that what I heard?

Yes.

How much debt do you have besides our house?

I have 14,000 on my car and 35 for student loans.

What about your husband?

My husband has no debt. He's military, and his car is paid off.

And what's his income?

He makes about 60 grand.

Is he deployed right now?

He is.

Okay, because you said two years. Is he deployed for the next two years?

No, he comes home next year, but next year, that's the time frame that.

We'Re planning on starting a family right now. I understand you want free time, but you need to pay off debt. You can't just go from your income to his income. He's not going to be thrilled with that right away, is he?

No, not at all.

Well, here's the thing, though.

So why don't we just do some nursing that's maybe a little bit different rhythm in a different place? You've got some options?

I do. And I'm trying to do that while he's gone, while I have the time, but I just really want to get out of it. So I was like, if I can get a property and use the money that I have in my.

You'Re creating more problems to solve a problem that's actually pretty easy to solve. Number one is you guys make $190,000 a year. That's a great income, and you got $50,000, $49,000 of debt. Right? You can knock that out so fast. You don't have kids yet. If you went on a bare bones budget, you would be out of debt in less than a year. Less than a year. If you guys decided, hey, instead of living on 190 this year, we're living on 100 and 4140. That's still double the average income. More than double the average income. So it just takes you guys quickly going, you know what? Let's knock this thing out. Let's be out of debt in eight months, in nine months. And then when you're out of debt, you suddenly have freedom. You go, okay, now what's the next conversation? If we have kids and we decide that I want to be a stay at home mom, we have to decide, okay, are we willing to live a lifestyle on 60? Maybe his income goes up slightly. I don't know what his career trajectory is, but can we live a lifestyle on $60,000? And if not, maybe that looks like, okay, is there something that you can do part time to where maybe you're not bringing in 130 anymore, but could you bring in another 60?

Could you bring in another $50,000? And so I think that there's a lot of conversations and a lot of ways to make this work for you, Clarice, but I'm telling you what is not an option, and please cross it off your list. Use a black Sharpie to where you can't even see through it. We're not going to buy real estate and go deeper into debt hoping that there's an opportunity to cash flow or rent, and we're certainly not going to do it on multiple properties. Trust and believe. That's a terrible idea.

Great advice, Jay. Thank you for the call, Clarice. And to the rest of you, thank you for joining us here on The Ramsay Show. Thanks to our fearless leader, James Childs. Hey, we'll be back before you know it. This is the Ramsay show.

If you're a leader, your personal growth matters for your organization, because whatever you lead can only grow as much as you do. I know from experience, I've been CEO of Ramsay Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business. Check it out on Apple spotify YouTube or on the Ramsey Network app.