Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Jade Warshaw. I'm joined today by best selling author Rachel Cruz. Thank you for being here with me today, Rachel.

So great, Jade. It's a good show.

Is all hour. We're going to be taking calls about your life and your money, so give us a call. The number is triple 8825-5225 we'll take your call, and we will give you our best shot at advice. I think we do a pretty good job, but I guess at the end of the day, it's up to you. So let's go straight to the phone lines where we've got Jason from San Jose, California. What's going on, Jason?

All right, thanks for taking my call. The problem that we're having is my wife and I can't decide if we're in baby steps three, four, five, or six. And we seem to be moving in and out of those baby steps.

Okay, tell me more.

Well, we make about $320,000 as our household income. We've got two mortgages, one on our primary home, with about $220,000 left to pay on it. Then we have a rental property that we break even on every month, and we've got about 300,000 left on that we both save for our retirement. And we max that out every year to get the matching contributions. I have ESPP, along with other investments that I place, and then we have college funds for our kids. And the issue is. So my wife manages all the month to month daily checking operations, and she wants to have the six month savings in, you know, in a savings account tied to the checking account. And I keep explaining to her and showing her that, hey, we've got all this money elsewhere. You know, money market funds and, you know, stocks.

And what's in the money market?

The money market has about 100,000 in there.

Okay. Would you say that that's more than six months of expenses?

Oh, yeah, definitely.

And so you're saying she wants money on top of that? It sounds like she just wants a little slush fund so that when. If you go over a budget, it's all good, right?

No, because we do use the money app, and that's working out well. She just wants to have access to it.

Yeah, well, I don't know if it's. Yeah, I don't know if it's much access. I just wonder, Jason, because in your head. Yeah, there's money there, but it's kind of attributed to whatever may be needed. And I think for her, there could be a level of safety of saying, hey, we're going to open up a, you know, a new account in this money market account, and we're labeling it the emergency fund and we're going to have six months in there. And that's it. And like that, that's what it's titled. That's what it's labeled, and that's what it is and nothing else. Because when you start to say, because I could even feel that, like, yeah, there's money here or there and there's some stocks and it's like, okay, but how can I get to it if we really need it? I think it's more of a security thing for her. And I think, and I think that level of organization, too, is really healthy and good. And so what you could do, Jason, seriously, and this is what we tell people for your emergency fund. It's its own account. It's over here. You don't touch it unless you need it.

But it's designated specifically for that. And would that help her, do you think, if you just say, yeah, we're going to take some of this hundred thousand, have another account. We're not touching it. But it's here if we need it?

I think it would. But the question is, you know, the follow up question to that is, do we stop the baby steps four, five and six?

No, because you have 100,000. You haven't the money in that money market account. That 100,000 could be it.

Oh, I see.

Is it just because it's the same place where, like, all your, where all of your retirement is and, like, where all your investing is? Is that why she's not viewing it as an emergency fund?

That's right. Yeah. And, you know, we've had issues come up. Like last year in the rental, we had a flood that we had to deal with. And we went into, you know, we went into one of the accounts, we pulled the money out. We paid cash. There was no issue.

Yeah, because we've got peace.

Yeah, but then did you go back and replenish that? Because in her head she's like, oh, my gosh, we've used that. Is it here? I don't know. I can see what she's saying. Cause that's how I am. Like, we have a high yield savings account, Jason, my husband and I. And so we'll put extra savings every month in this fund. But underneath it, like when I go into ally.com, we have one line that says, like, savings. We have one line that says emergency fund with that amount of money, and I need those separate. Like, I need to know. There's this, there's this here, and we don't touch that. But everything else is just extra savings on top of what we need. You know, if something happens at a rental, if we need, if we're going on a trip or something, like, here's money we spent. Here's money we just don't touch. And it's here just in case crap hits the fan. And that feels good to me with the distinction. Like, even Jason, this may sound crazy, even to the point that I'm like, if we're talking about money, I'm like, well, babe, how much is in the, is in the high yield?

He'll give me the number. And I'm always like, does that count the emergency fund, or does that count the emergency fund? Are you adding those together? He's like, no, I never add them together, for your sanity. And I'm like, thank you. So.

So you don't think we should slow down on paying off the mortgage early?

No, you have, you have the money.

You have the money. So I would take that. What? That I would take part of that hundred thousand that you have in cash or somewhere else, I don't care where, you get it. And get a six month emergency fund in a new account and labeled emergency fund. And I think that will ease her, her tension. I really do. I think that would be, that's what I would do. That's what I would want. Personally.

I just want to make sure we're covering this because the screen says we can't save up an emergency fund. And is there something we're missing here? Is it just as simple as relabeling this money?

Yeah, it is. It's because she wants, you know, in the regular checking savings account that are, you know, in the day to day operations. She wants to see the savings account be the six months.

And she is wrong about that.

We want to do that. Then we got to stop, you know, we got to stop on the, you know, the extra mortgage payments we're making. We got to stop on the 401K payment. We got to, you know, we've got to stop those other baby steps to rebuild that, that six month savings.

Well, I think you're, I think you, but I think you guys both have a place where you need to concede a little bit, because to her, what she wants is I wouldn't keep the emergency fund with the normal checking and you know, like, we have. We have ally, where we do all of our savings, and then we have, like, chase over here that has, you know, other things. And so I wouldn't keep it with your normal day to day funds, but to your point, I mean, we recommend all the time you can keep it in a money market or you can keep it in a high yield savings account. So whatever feels right. But to Rachel's point, you do have that money. And so I think that you guys both have to give a little intake, a little. You have to be willing to pull it out of a money market because for whatever reason, that's making her feel some type of way, and then she's got to be fine with you putting it in someplace else. It has a nice rate of return. You know, Ally is a great one.

We used to say back when cash was, like, the prevalent thing of the emergency fund and be like, you know, don't put it in the sock drawer where the pizza guy can get it.

That's right.

Like, kind of that joke that, like, it can't be so accessible that you just go and you can just get it.

You know, you want to forget about it.

Yes.

You know, we feel really blessed because we don't argue about this. This is just like, you never argue about money. We don't have to. What's the best approach, you know?

Yes. Yep. I think. I think for her to know she can get access to it if you guys need it for an emergency, number one. And number two, for her just peace of mind that there's extra money over here. It's for this. It's not going to get tied up in some stock deal that you're doing, Jason, here. That right? Like, it's like there's a level of, like, that's for the emergency fund and we don't touch it. And I think.

Okay, now, one. One quick question. Now, do you pay off your primary first or your rental?

Primary.

Primary.

Okay.

I want the place where you guys lay your head at night to be completely debt free and peaceful.

Perfect.

Awesome.

Thank you so much.

Thank you for the call. That's a really, you know, that's an interesting thing, Rachel, because I do think that when it comes to savings, you know, you do have to keep it a little bit. It's got to be enough out of reach to where you don't, quote, accidentally spend it. But at the same time, it's got to be liquid enough to where if the water heater goes out and you can't cash flow it, you can get to it. So you don't want to invest it.

And you made a good point earlier that, and I don't think this was her from what he was saying. But you also don't want to have a bunch of money so that you can be lazy with your budgeting and you spend more than you make. But it's okay because we got ten grand over here. We'll just get. Yeah, don't, don't let it be a cushion for your everyday expenses. It's a cushion between you and life when the big stuff happens. That's your emergency fund, not to cover lifestyle.

That's right. This is the Ramsey show.

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You're listening to the Ramsay show. I am Jade Warshaw. Next to me is Rachel Cruz, and we're going to be your hosts for the next couple hours. Hey, our month long sale is almost over, so don't wait. Every May, we do a really fun may sale for you guys. And so tomorrow, May 31, is going to be the absolute last day to participate, the last day to shop the sale and get our best selling products that have literally helped millions of people. So if you stop by, you can get bestsellers like baby step millionaires for under $16, which will help you learn how ordinary people build extraordinary wealth. I would be one of those people. I love baby steps millionaires. All right, next we've got building a non anxious life for less than $18. Another great one by doctor John Deloney. You can learn the six daily choices to have a more peaceful, joyful, and non anxious life. Also a banger. Love that one. All right. And finally, from Ken Coleman. From paycheck to purchase. From paycheck to purpose. For under dollar 16, you can discover seven proven stages to finding meaningful work and increase your income.

Hurry to get these best selling books and gain confidence knowing that you have a plan for your money and your life. You can do this@ramsaysolutions.com. store and remember, the sale ends tomorrow, May 31. So go do that today. Love it. All right, let's go straight to the phone lines. We've got AJ. He's from New York City. What's going on, AJ?

Hi. How are you? Thank you. Rachel and Jade.

You're welcome. How can we help?

So my question is, and this is going to go against everything Ramsey has taught. I want to buy a sports car.

Okay.

Tell us so far you're not against what Ramsey teaches. Now, where are you at?

He drives a raptor and he's a car guy.

Yeah. Yeah.

We're not against cars, he said. But it's. It's a brand new car. And he said, you can't buy a brand new car unless you're a millionaire.

Do you know why we say that?

I've read, I've went through financial peace and I've done a. Have. I've done everything right.

Do you know why we would say that?

Because it's gonna make me in debt. And I know.

No.

I went to the dealership and I started. I got sick out of my brain. I couldn't purchase it.

So wait a minute. Are you trying to buy this brand new car on payments, or are you trying to pay cash for it?

Wait, Jade, can you tell me why? Maybe I missed something. I didn't let you finish what you were going to say. I'm sorry about that.

Oh, no worries. There's kind of two ways to thinking about it. Number one, the first thing is. Yeah. If you're going to buy a car for sure in cash, whether it's brand new or used, then the second part of this is what you mentioned, which is Dave would say not to buy a brand new car until you're a baby steps millionaire, where your net worth is a million dollars. But the reason for that is because when you drive these brand new vehicles off the lot, they depreciate so quickly, within the first four years, you're losing sometimes up to 60% of the value. And so most of us can't afford to just put that kind of money in a pile and burn it. Right. We need it for other things. We need it to build our net worth, and we need it to help pay off our home and all of these other things. And so, logically speaking, most of us can't kiss that kind of value drop goodbye without seriously feeling it. And so, essentially, that's what Dave's talking about when he says that. So I just have questions for you about your personal finance situation.

So my personal financial situation. I mean. So I'm buying. So the car I'm looking into is a Mustang cobra, which is insanely priced at $110,000.

Yeah. Okay.

Yeah, I know. It's very. And they also have a dark horse, which is a little bit cheaper, but they're, like 8900.

So what do you earn every year?

So I don't have a resale value. So I took a step back this year. I pushed the pedal off the gas, so I made 240.

Okay.

For. Since actually, right after. Actually, Covid is what actually got me. And, I mean, I'll get into the backstory later.

What's your net worth for the past three years? What's your net worth?

Define. I mean, define net worth like, it's.

What you own minus what you owe.

So thank you.

I think. I didn't. That's why I was. I was, like, calculating my house, how much I own, like, right when you ask that question. I was calculating how much I owe on the house. So it's a 440,000. I bought the house for 440.

Okay.

I owe 180.

Okay.

But now the house is worth 740.

Okay.

I have 500,490 something in my roth, okay. Which I invested since I was 21.

Do you have the cash for this?

If you have the cash.

If you have the cash, buy it. You're fine.

I just don't want to use cash.

All we had to hear was. All we had to hear was the car in the. The savings. So you're there, and it's less than.

Half of your annual income. It's less than half of your annual income. So just pay for it.

So, no, we would not have financial responsibilities. Like. So I had then the reason to buy this car. It's because I've been. I had a divorce, and I was going to therapy, and my therapist asked me, when were you the happiest? And I used to have a sports car before my marriage when I got my divorce.

And I would just go on the bad motivator.

That's bad. That's a bad motivator.

A car is not going to make you happy. Cars are fun. Things are fun. Like, things that we can buy with money are fun. And you might have a bit of happiness for a moment, but that's not going to be the thing that's going to make you happy. But what you called for was to say, hey, can I a. Can I afford to get this car? Based on your standards? The answer is yes, net worth wise, and then, you know, looking at your income wise, percentage wise. But the other. The third caveat of that is you've got to pay cash for it. And if you have some liquid cash sitting around, that's not your three to six months emergency fund. The answer is yes. But if you don't have that money sitting around, you need to save it up and then you can pay cash for this car.

Yeah. And the challenge of the emotional side of it, AJ, I mean, when your therapist said, when were you the happiest? And you remembered a sports car, it probably wasn't because of the actual car itself. That doesn't bring the monetary value of happiness and joy. It may have been where you were in your season of life, right? The people that you were around, maybe your job, your career, like, depending on where you were during that time, but it's not the object that's going to do it. And so, again, that's another caveat. When you're buying large purchases. Check your motivation, you guys. I mean, ask yourself, is my expectation of this item thinking that it's somehow going to change me or make my life so much grander and so much better because it doesn't like you may be, you know, sitting in a prettier kitchen if you buy a new house, but at the end of the day, it's still your life. It's still you.

You're still you.

You're still you. And so, yeah, I mean, we're not mad at cars, like we were saying earlier. And, yeah, Jade, you walk through all the situations that he needs to have in order to wisely purchase this. And other than that, you guys, like, it's a car. It's a car. So I don't like the motivation of it, AJ, and it's coming out of a lot of pain. And the reason for it, I think, is going to leave you in a lot of disappointment and you'll be out 110k, where you could buy a $60,000 car that's not brand new and have some fun and that's fine, but it's not the thing that's going to be the pivotal change in who you are.

I agree with that. It was like, at first it sounded like maybe it was just going to be a fun discussion, but digging deeper, it did feel a little bit more. Like, it was almost like he was anguishing over it, too. Like, should I do it? Should I not do it? If I do it? And it's this, and there's this option and that option, and I. Yeah, I mean, financially speaking, you're probably fine. But I agree with you, Rachel, 100% items cannot fill voids.

Yeah. Yeah.

You know, it's temporary fun. But speaking of temporary fun, I also want to reiterate the fact that, you know, we have a lot of rules and guidelines and guardrails, Rachel, when it comes to money, but. And sometimes we kind of get a bad rap. People think that we don't know how to do the flip side, which is like, sometimes you do get to have fun. And you, the whole point of building this foundation is so that you can do things like buy the car that you want to buy and have the home that you can afford and would like to have, and, you know, take the trips that you want to take. And so I really want people to hear us say that there is a time and a place to do that. And when you do it, do it big.

Yes. Yes. You know, and you do it with more freedom because you have more control over what's going on financially.

So, yeah, we're not Scrooges.

That's right. That's right.

Yeah. AJ, if you can afford the car, do it, but don't do it if you think it's going to fill a void and take you back to a place in time when you were happy. There's only one way to financial peace, and that's to walk daily with the Prince of Peace. This is the Ramsay show.

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This is the Ramsey show. Hey, we're happy to hang out with you guys, taking your calls all afternoon about your life and your money. So give us a call. Anything from budgeting to planning for a vacation to a spouse that just doesn't seem to get it. Give us a call. I'm Jade warshaw. Next to me is best selling author Rachel Cruz, host of the Rachel Cruze show and smart money happy hour. If you don't know, now you know. All right, let's go to the phone lines where we've got parley in salt Lake city, utah.

Hi, guys. Can you hear me okay?

Yeah.

It's such an honor to talk to you guys. I have so much respect for you both. I'll get right into it. I have about $30 to $35,000 in debt, and I've been working for a company that's a shop. I work in a shop, and they build stuff for, like, some of the different lds temples and, like, some of the apple shops around the world and whatnot. And I feel like I've hit a brick wall, and I wasn't making enough money, so I started a lawn company, cutting grass, and I make about the same cutting grass part time as I do with my full time job. And it's on to the point at my day job that I wake up. Like Ken Coleman always says, I'm dreading Mondays. I'm depressed. I can't stand my job. I work with some pretty pathetic people that I have no respect for, really don't know how to treat people kind. They have pretty profane mouths, and. And it's going to the point where it's really difficult for me to want to go to work anymore.

So.

Yeah.

Are you applying for other positions in your skill set?

I have been. I have been trying to apply for other positions, yes. So kind of what I'm. Where I'm at right now is if I get my license to go to be a subcontractor, I can make more money than I do right now. Right now, I'm making $29 an hour.

Okay.

And if I get the licensing to become a subcontractor, I could probably get closer to. Closer to 40.

Okay. How long does it take and what does it cost to get the license?

So it's gonna. It's about 30 hours of class work, and I believe it's about $2,000.

Okay. Do you have any money saved?

I just have $1,000.

Okay. So you're in, baby. Step one.

Yes. Uh huh.

And how long does that take to get the. To get the license?

It's 30 day class.

Okay. Well, it sounds well worth the investment. I mean, you'll be making $11 or more at an hour for two grand. So there's. There's a part of me. Yeah, probably that I may pause the debt snowball just for a bit and save up that 2000 and then go get this license and then, and then start again.

Is it just you or do you have a family?

I have a fiance and. And her two daughters.

Okay, so you guys aren't married yet. Does she have that as well? And when do you get married?

She. She does. She has a debt. She has about $6,000 in credit card debt and about $15,000 to her parents.

Okay, and when do you guys get married?

We're supposed to be getting married in October.

Okay. And you guys are saving up, paying cash for that? Everything's looking good on that side.

It's probably going to have to be delayed. I kind of want to just do something at the, the court and then, and maybe delay the ceremony and the party and all that till later.

Because of the debt?

Yes.

I mean, I would definitely talk that over with her because she might have something else planned in her mind. Listen, I like this idea of you getting the license. How quickly will that parlay into, like, you making this income? Is it because you're, in essence, you're striking out on your own?

Yes. I'm not sure exactly. So, so another quick thing is I took the Ken Coleman get the assessment, and it talked to me about doing stuff in communication, like talking. I feel like I'm really good with communication and talking to people and what and whatnot. And I feel like my years and experience in the construction industry, I would rather do, like a, like, project managing or something in communications to where I can. I can do that.

Okay, well, that's different than the license. So here's what. Let's solve the immediate problem. The immediate problem is you work in a toxic work environment. Nothing is stopping you from applying for a couple of things and getting set up and getting out of there. You might not be making exactly what you were, but combine that with the other side jobs that you were doing, and I think you're going to be fine. Um, and you really just doing.

Is cutting grass.

Yeah, cutting grass. Keep doing that and maybe take on more clients so that you can get out of this toxic work environment. And I have a feeling that once you get out of that environment, it's going to kind of, like, clear the clouds a little bit, because right now you're in a mode of, I just, I got to do something. I got to find something. Is it this? Is it that? And there's probably a little bit of, um, just lack of clarity there in general. Because I think when you're in a toxic environment and when you're in debt, it just causes you to have to do things out of necessity instead of out of what you truly want to do. And so maybe if we can clear one of those off the list and say, okay, I'm out of the work environment, that's good. Make sure on paper, you've got the plan for this debt, even though you're not tackling it yet. It'll kind of help, you know, relieve the stress of that a little bit. And then, you know, and then if.

There'S a real opportunity for. Because the communication thing, I think, is a. Is a dream idea that you may have to work into. But if you're. If there's a real step, though parley of doing some level of contract work with this license, and I'm talking about a realistic step. You've talked to somebody, you know that they need that position. You could have. You could be in that position in 60 days after, you know, you save and you take the exam and all of it. Like, I would want that not just to be a dream of, like, ooh, that always sounds great. Cause I don't want you to stop the debt, snowball. Quit your job, go take this test, and then you're like, oh, I have my license, but nobody's hiring. And, oh, gosh, you know, you want to make sure there's actually opportunity there, but I'm sure there is. And so I would look into that. But I would not stop the debt, snowball, until you actually have a plan of, okay, I could save up this amount and this amount of time, and there's an actually opportunities at x, y, and z place for me to plug into, so just make sure that's it.

But, yeah, the work environment thing. I'm with Jade. I would be applying other places. I would be upping the.

You take a pay cut.

Probably slightly. Yeah.

I mean, the way you described it.

Take a pay cut and then, like, do add more. More like, jobs for my yard.

Yes, that's. Yep. That's what I would do. Yes. Because it's not like you just hate your job and you're like, oh, my gosh, I hate working on spreadsheets all day. I'm so bored. It's like. It's the whole thing that you're, like, miserable in your life. Right. So I think that there's just other opportunities out there for you to be making as much as you are now, though, because that's another thing. Don't just assume because you're switching jobs that you're gonna make less. Have the.

Yeah, yeah.

You know, have the belief that, yeah, I could switch jobs and make just as much and cut more grass and make more money.

I've been told my whole life I'm not. I'm not good enough. And I wouldn't be able to. Like, this is all I can do. And so I'm scared. I'm scared to do something different. Because I don't know if there's anything. I mean, with my yard business, I do really well with that. And. But I'm just scared. I'm scared to leave something that I absolutely hate.

I think that you're going to shock yourself. I think that you have a unique set of skills that you have to offer. And there's only one parley. And I think that when you get out there, because here's the thing. You've been in that toxic environment that probably hasn't done much for the state of your self esteem. And I think breaking free of that and literally taking the time to pour into yourself and, you know, change that negative talk in your head. I would tell you to get connected with Doctor John Deloney. Matter of fact, Christian will pick up, and we'll give you a copy of. Own your past, change your future. Because I hate that no one's told you how unique and how valuable and special that you are. And Rachel and I know it. It's just up for you to figure that out. And I think that you will. I think that the more that you kind of take that slack and really put your. Your effort into it, I think you're going to see. Listen, you're resilient. You have great skills. You care about values. Like you truly value hard work. And you have integrity.

We can hear that just being on the phone line with you. So I'm excited to see what happens next. The book he was talking about is find the work you're wired to do. That's got Ken Coleman's assessment in it. If anybody else is interested in finding the work that they're wired to do. This is the Ramsay show.

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You are listening to the Ramsay show. And hey, thank you for listening to this show. This show is bringing hope to so many people, changing millions of lives. I'm one of those lives. And so I just have a special appreciation. And by the way, if you want to show your appreciation, something that you can do that's so easy it'll cost you nothing. Just share the show, whether that's you sharing it through text, whether it's you liking and subscribing, because when you do that, it does share it through the algorithms. It makes it more readily available. And so when you do that, it just gives more people access to the life change that we know is within this content that we share day in and day out. So thank you for listening, thank you for liking, thank you for subscribing, and thank you, thank you for sharing this show. We really, really appreciate it. It helps us owe so much. So keep doing that. And in the meantime, we're going to go to the phones. We got Brenda. She's in Jackson, Mississippi. What's going on, Brenda?

Hello. Hi, Jaden. Rachel. Thank you for taking my call.

You bet.

Me and my husband are having a little bit of a disagreement about a job that's coming up. Me and my husband are in baby step three, so saving up for that three to six month emergency fund. My husband and I just run a little side gig of handyman service. We have not been formally trained or anything, but we work on our own house and so do it for friends and family that need help. The job that's coming up this weekend is for a missionary friend of ours. The wife doesn't work and the husband works two small part time jobs and they had a leak in their bathroom and they knew about it but didn't deal with it for a couple of years. So now the damage is pretty extensive. So my husband wants to charge them about $10 an hour for us to do the work. They will cover the materials in addition, and then. But I want to charge our standard service, which is about $50 an hour.

Oh, okay.

He says that they're poor and so we shouldn't charge them. And they have told us that they don't really have the money to do it, but it's getting to the point where their shower is about to fall through the floor.

Did they come to you because they figured you would give them a discount? Like, have they given any indication that it's like, oh, they'll probably give us a discount?

Not necessarily, but they know that we're going to be cheaper than a regular contractor that's going to come out and do it.

I mean, Brenda, how long would the project take? How long would the project take?

Two to four days, depending on how expensive it is. Once we get into it, if it's worse than we think it is and.

If you did it, that would be the only thing you could work on for the two to four days.

Yes, but it's time that my husband has off anyway, so it's not like we're taking off additional work.

Yeah, I mean, if you feel like you're being taken advantage of, that's one thing for sure. That doesn't feel good ever to anyone. But we also, when we talk about giving, you know, there's giving in money, there's giving in time, there's giving in talents, and maybe it's a thing. Your husband's like, yeah, I just feel called to help this family, and they're in a really rough situation. They don't have the money to fix something like their water. Like, I mean, it's kind of a need, it's a necessity. And I mean, if he wants to do it, and again, I think it's a one off. If it becomes a pattern where he constantly is using his time and keeps losing money continually. Maybe like a red flag, but for two days, if it's something that he wants to do, I mean, I get you guys around, baby. Step three. I understand it. And again, if you're being taken advantage of, like, that feels gross, right? Like, there's a level there where you're like, oh, I don't know, that feels right. And. But I feel like if he wants to do it out of just who he is, and he can and y'all aren't paying y'all, it's no out of pocket for y'all, it's really just time at that point.

I don't know. I could see it, but I'm more of, like, the emotional side person when it comes to that stuff. We're like, yeah, absolutely. We can do it, but I don't want it to be detrimental to you guys. But I don't think 20, I don't think two days is detrimental.

I mean, I'll tell you what my husband and I do, because I'm always the one that's like, let's give this much. And he's like, cool out. Like, let's pull back. Like, let me look at the numbers. And so what we always do is we agree to pray about it. Like, you go over there and pray about it, I'll go over here and pray about it. And then when we come together, it's like, one, two, three, say it. And still I'm always the one that's trying to do the most. And he's come up a little bit, you know? And so then from there, we just kind of meet in the middle. So maybe it's, you know, you want to charge the whole $50 an hour. He was doing ten. Maybe it's like, hey, maybe getting off this call, you're like, fine, I'll just do what he wants to do. But if you're not, like, go pray about it. Give yourselves 24 hours or whatever time you have and then meet in the middle. Like, you'll either come out on the same card or it's something that you have to meet in the middle. And maybe it's like, okay, we're not going to charge 50, but we're going to charge 25 and we're going to give them half rate, whatever it is.

Yeah, or maybe it's a time thing, too, that if you guys get into it and it's going to take a day beyond that, that you guys may say, hey, there's a point that we're not going to be able to continue this because of x, Y and Z and letting them know that upfront. Have you guys asked their budget at all?

We know they follow. We know they've heard about the Ramsey plan and they agree with it, but we also know that they, they don't have the money.

Yeah, but did they say that to you guys, like, we don't have money to fix this?

Well, not necessarily, but they told us that they might put, like, we, we said we would need money up front to pay for the materials. And they said, well, if we don't get paid this week, like, if Mark check isn't big enough. We'll just put it on a credit card. And that's when my husband was like, no, we don't really have to that much.

Yep. So again, I think, you know, we.

Didn'T put them in this position. They knew about this leak for years, and they did nothing about it. Sure could have been a cheaper fix.

So, yeah, yeah. You know, so, yeah. And again, I think if there are people in your lives that you continue to enable and continue to give and give and give and give and give, and they don't check. I mean, like, there's a level that you could start to be taken advantage of, for sure, but if you haven't had history of that or history going forward. And he just feels this, like, tug on his heart of, like, I just feel like, you know, I want to do this not because I have to or because I feel bad. Like, you know, they mean, like, there's bad. There's not great motivations always. Like, it needs to be something that he's like, listen, I see this family. I know I can do this. I'm gonna give them two days. I'm gonna give them a significant discount. They need the help. And I feel called to do that. Like, that may be what he wants to do. You know what I mean? But I do think. Yes, I hear you, Brenda, that it doesn't feel right. There's not a level of justice there. She's not working. She could go and get a job and bring in money.

Like, I hear all of that. Totally.

What's the real numbers here? Cause you gave us by hour. Like, what, how. How much money is this equating to?

So if it was my fee, it would be $1000 to $1,500, not including materials. And we don't upcharge on materials at all. Okay. And if it was my husband's, it would just be $200 flat.

And who covers the materials? They do.

They still cover the materials? Yes. So it's about $300 in materials and then an additional $200 for labor. So $500 total.

Okay, so we're talking about the difference between, like, $200 or $1,800.

No, $1,500 or $500.

Okay, so it's a.

It'd be the same either way.

So it's a $1000 difference. You know, I wouldn't tell you what to do. I mean, I can sit here and be like, listen, if you guys have the money, do it. But at the same time, you and your husband have to be on the same page. And that's something that Rachel and I can't do for you. So listen, take my advice. Go home and give yourself a quick little bit of time, and be like, we're gonna pray about it. We're gonna take. You get 24 hours. I get 24 hours. We're gonna reconvene, and no matter where we hit, we're gonna meet in the middle. And then there is some bit of give and some bit of take. Because I would be feeling some type of way if I was like, this is my, this is my vacation time. Like, we were supposed to go away with the family and do something fun, because then it's not only the time, but it's the value of the time too. So there are.

Yeah, if he's having to take PTO and all. Yes. I think that there's yes. Wise ways to go about it. But if you're self employed, he's doing his own thing, and he has two days that he has to go and help. I don't know.

I think service is a great way to give.

Yes. And it hurts sometimes more than money. Time is so valuable. It's so valuable.

Oh, yeah. Oh, that's a conundrum. But, you know, I always like to live to lean a little bit on the side of generosity. I mean, you have to do what you can afford and what makes sense for your family. But, yes, generosity is very, very important. That does it for this hour of the Ramsay show. Thanks for hanging out with us. Check us out next hour. Live from the headquarters of Ramsey Solutions, it's the Ramsay show where we help people build wealth, do work that they love, and create actual amazing relationships. That's what we're all about. We're taking your calls all hour long. Myself, Jade Warshaw, joined by Rachel Cruz. She's the best selling author of the book I'm glad for where I am, which is the sequel to I'm glad for what I have. I sometimes have to look at it, Rachel, because I'm like, it's a little wordy. I'm glad for what I have. I'm glad for where I am. And I guess at some point, maybe there'll be another one.

Yes, there might be another one, love. It might be a generosity one coming. Coming down the pipeline. But, yeah, the kids books, they've been fun. Yeah, I can't wait for that.

That's excellent. So we're taking your calls. You can give us a call. The numbers triple 8825-5225 and we'll hook you up with our best advice. All right, we've got Ginny she's in Austin, Texas on the line. What's going on, Ginny?

Hey, guys. Thank you so much for taking my call. So my husband and I need help. We were on baby step three but then we bought a house. So now we're back to baby step one. And our key question is should we sell our home that we bought a year ago or sell one of the cars that we have fully paid off? And some context here would be we have 30 debt and 30,000 in debt. 10,000 of that is a credit card. We have about 10,500 in a car loan and the rest, which is a little over 8000, is for the IR's taxes that we owe from this past tax season. And his income fluctuates. So there are some months where our mortgage payment is. It reaches about 50% of our monthly take home pay. Other months it is in between 20% to 25% of our take home pay. So what would be the best way to tackle the debt and what do you recommend?

Help me understand a little bit of what happened here. Because you are in baby step three, you buy the house and arguably, depending on the month, it can be pretty costly for you guys. But what caused you to go into. What caused the car debt and the credit card debt? And I guess the IR's was poor planning. But what caused you to slide so heavily back into the mud?

Yeah, so as far as the car, we only had one at the time and we needed a second vehicle. And the only thing that we had was the emergency fund. But I guess we didn't have enough of every month expenses. So I know that we were. We pretty much depleted that and had to take on some things on the credit card and also just poor decisions.

Okay, so then let's talk about this mortgage. So you said sometimes it's 25% but it could be as much as 50%. Tell us about the work and why it's fluctuating. Such.

Correct.

Yes.

So my husband, he is self employed. I am on a fixed income but I also can get a little bit more income here and there because I have a license to sell in real estate. So there are some months where we make about 11,000. Other months we make about 6000.

Yeah. I mean, honestly Jenny, this, this kind of sounds just like the stereotypical lifestyle creep scenario. I mean, you guys were fine. Yes. You were one car family, but everything was going. I mean, you had money in the bank, you didn't have debts. And then suddenly whatever it is changed that we need to buy a house. We need another car. Oh, my gosh. We didn't plan accordingly. So even our expenses, month to month, we don't have the cash for, for our income. So now we have to supplement credit cards. I mean, it's. It is that classic lifestyle creep that we're seeing everywhere. And again, people, we want to blame inflation, we want to blame all of this. But, you know, do you, do you understand, like, when you guys look back three years ago, that you felt financially in a spot of like, okay, our heads above water, we don't have any payments. We have an emergency fund in place. And that, that level of peace, that. That's what you want to get back to, right?

Yes.

So that's probably going to mean going back in lifestyle, because that's really the only way that this is going to be fixed, I think. I mean, yeah, you guys can continue to try to up your income for sure, but this $10,000 in credit card debt, a car loan, I mean, all of this is. It's continuing to. Yeah, it's continuing to hang around your neck. So I'm wondering. Yeah. If you guys just rushed into the house, tell me what the thought process was when you were buying the house.

Yeah, I do feel like we rushed into it because before we were renting and our lease was coming up to an end, so we were considering renting again, but we wanted to see if we could qualify for the home, and we did, but we actually ended up using down payment assistance. I was running the numbers on our house and conservatively, it's worth around 310 right now because we bought it last year and we owe about 295. And the loan as well as DPA, which would be close to $12,000.

Okay. And no savings right now?

No, not at this time.

Okay.

Yeah. I think that the pattern here is an opportunity presents itself and we take it regardless of if we can afford it or not. Because the truth is, you couldn't afford to get this house if you had down payment assistance. Yeah.

And people, people get mad at our house formula. But you guys, this is exactly why. Because the bank doesn't care. The bank is going to give you any amount of money, basically is what it feels like, way overextended. And then people take it, you know, and this is not me yelling at you, Jenny, but just in general, like, this is what happens. You go sit in the office and they're like, well, look, this is how much. And they slide that number over and you're like, holy crap. Sure, we'll do that. We'll get this we'll get a house and it'll be great. And then you look up and you can't even pay the bills, and you're depending on Mastercard at that point, you know? So, I mean, yeah, selling the house would be the last thing I would do, Jenny. I would. I would try to up income. I would sell the card, cut up the credit cards, get these taxes. I mean, $8,000 in taxes. There's a chance that you'd probably have to go just get a personal loan for that, just to get the IR's out of your life. But, I mean, this is.

You guys, like, working hard?

We actually. So we have two cars. One is paid off and the other one has a loan. But the vehicle that's paid off, it's worth around 80,000 to 20,000, according to Kelly Blue book. So I guess, should we sell that vehicle that is paid off and just kind of liquidate the money that we have there?

How much you owe? You owe 10,000 on the. On the car with the loan?

Yes, there's.

And then what would it. What would it sell for that car?

That one ranges maybe around 80 00. 10,000.

So you'd break even on that one?

Potentially, yes.

Like, if you sold it for ten, you owe ten. So it would just be a break even, right?

Yeah. And that monthly payment is 209.

But you're saying if you. If you paid. If you sold the paid off car, you'd get 18k. Is that what I heard you say?

Yes, 18,000 to 20,000.

So then you could pay off the existing car and then pay off the IR's. Yes, I might do that. Mm hmm.

Okay.

Yeah. Right now. Yeah. Is what you want. Yep. So that takes care of car and taxes. Then you got $10,000 in credit card debt that you guys need to tackle. And then if your income does not come up or that. Or if the. If the high months, Jenny, when you guys have a really good month, putting some money aside in savings for when the down month so that it's not eating up 50% of your income, you can take some of that from savings, and you guys have a good plan, like the. We call it the mountains and valleys. You can do that, but that. You can't sustain that for a long time. And your income has to. Has to come up for you to keep this house. If not, it's gonna. It's gonna suck you guys dry money wise. So. So, yeah, I mean, unless the income comes up, I would sell it. But if you guys can get your income up. You can keep it.

This is the Ramsay show.

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You are listening to the Ramsey show. I'm Jade Warshaw, joined by Rachel Cruz. We're taking calls about your life, what's going on with your money, all hour long. So feel free to chime in. The number is triple 888-25-5225 and a nice gentleman named Christian will pick up on the line and get your story straight with you and get you ready to come on the air. And then you'll get to talk to the two of us. So if you want to do that, we'd be happy to hear from you. In the meantime, let's talk about the Ramsay show question of the day. Today's question comes from Andy in Kentucky.

Yeah. Andy says, I recently found several debit card options that give customers 1% return on how much money that you spend. It sounds like a good alternative to using credit cards, since I would still get rewards, but I avoid going into debt. What are your thoughts on this? Yeah, I mean, if it's a debit card, I'm all about it. There are some banks that are trying to be competitive in this space and do more of this. So you may see more and more of it come out. Yeah, I mean, I think it's fine. Our big rule of the credit card, though, you know, why we say spending your money, is that you're not going into debt. And a lot of people's motivation to sign up with credit cards is because of these rewards and these points and all of that. And what ends up happening is you spend more, you end up spending more, statistically speaking. And for some people, just like our last call, you get in a hard spot and you're going to be spending the credit card in the back of your head, you're like, well, at least we're getting these points, these airline miles, right?

And you're playing this, this whole game, which is going to eventually get you into trouble. And so a debit card really does keep you on the safe, in the safe lane, because it's just your money that you're spending now. If you spend too much. You know, there's overdraft fees and all that. So you have to be careful with that. But. But I would. I would base where I bank more on the bank itself. You know, we like more local type. And again, if there's a perk or something like, that's fine, but that would not be my motivation to change banks or to do something different with that.

I agree. I think if it is your motivation to change, then you might be the one that gets caught over spending to get the 1%. I'm like, 1%, thank you.

But spend $500, get $5 back. You're like, oh, my God. I spent a mozzarella sticks at Sonic.

It's just not exciting.

It's just not really gonna change your life. Yeah, sorry about that, Andy.

Do what you will.

Yeah.

They make you feel like it, though, don't they? I mean, they're like, cash back 1%. You're like, you actually do the math, and you're like, oh, my God. Okay.

You gotta spend a lot to get a very, very, very little bit. Yeah. Yeah. It's probably not for me. All right, let's talk to, sorry, Jenny or Andy in Kentucky.

Sorry.

We kind of pooh poohed on that. But you can do what you want to do. I just don't think that 1% is enough to get out of bed in the morning. All right, let's go to Anchorage, Alaska. We've got Cameron on the line. What's going on, Cameron?

Oh, not much. I'm just having a good morning up here. Things are starting to warm up in Alaska.

Yay. I'm happy for you. Is it the light season or the dark? When does the dark season end?

It's. Yeah, it's the light season. So this is when everything happens. Everybody wakes up and gets out and about.

I love that for you. How can we help today?

Yeah. Well, I used to have an airplane, and that's kind of typical of Alaskans. We. We buy airplanes. Like, maybe Californians buy teslas.

Is it, like, the kind that can land on the water?

You know, it was capable of that, but, no, I never owned a float plane. It was a standard wheel plane. It had skis and stuff for, like, winter time. But, no, it wasn't a float plane, so. Those are expensive.

So you sold it? Yeah.

So I sold it. Yep. So I sold it. I kind of lost interest in it. We've had two children since. Since I bought it. And I actually sold it for more than I bought it for, which is kind of insane. Yeah. Planes appreciate like maybe classic cars, I guess.

What did you sell it for? Can we ask?

I sold it for 135, which is quite a bit more than I bought it for in five years. So I'm planning on paying, you know, taxes on that. So I'm set that aside. But I'm guessing probably I'll end up with like 120 free and clear after that according to my tax guy. So I'm trying to decide what to do with the money. I have some options. We have a mortgage. I thought about throwing it at my mortgage but I do have kind of an interesting side hustle that I have an opportunity to invest in and I've kind of wanted to invest in for the majority of my life. And I just kind of want to see commercial fishing. I grew up commercial fishing in Bristol Bay, Alaska. My family has been in it since about 1911. A lot of heritage there, a lot of my cultures there. So. But I went off and I went to school back when fishing wasn't very good. And my plan at some point in time was to buy an airplane and to be a commercial fisherman again maybe. But yeah, I guess I lost interest in the plane. But I do have an opportunity maybe to get back into it.

Seasons haven't been good so prices are back down. I might be able to afford.

Listen, I hope my first thought, let me tell you my first thought is you bought the plane and you lost interest. I would hate for you to invest in commercial fishing in the news interest, but that's just me off the top. So let's get a picture of the rest of your finances. What else is going on with your money? Do you have any other debt? We use a series of baby steps. So I kind of want to see where you're at in the baby steps and then that'll inform our answer.

Yeah, sure. So we have no debt except for our mortgage.

Cool.

Well, and how much you guys owe on the mortgage?

350.

Okay. And then. And you guys are investing in retirement and everything?

Yeah. So my wife has two options for her job for kind of standard four hundred one k. And then she also invests in a 457 b. And then I have a 403 view of my job.

Okay. And how much is it going to take to get into this commercial fishing?

So I have the boat already. It needs a little bit of work. But the permit, it's a limited entry permit system. There's only about 1800 permits in this area of Alaska so it does fluctuate based on the market. Right. Now two years ago permits were $260,000 but then there's a really terrible season. Prices went down drastically, and this last year, they were about 130.

How does that make you feel that you're investing? When, like, how often does the season fluctuate?

Oh, all the time. When I zero five. My dad and I bought in when I was a little kid, and we bought a permit for $35,000. So it can definitely go up and down. So you kind of have to take a step back and look at ten year timelines in the last ten years. You know, the average, you know, there's seasons where you don't make anything. How long you want. I'm sorry.

How long is the permit good for? How many years?

It's per, it's a, it's, it's a, it's a limited entry, so when you buy, you own it, it's yours.

Okay. So the one that you guys bought back in the day for 35k, that's just, your dad's like, you're not still.

Yeah, he sold it two years later for 80. So that's, so that kind of is an example of the crazy fluctuations. And I've been waiting for a long time to invest back into this fishery, but it's all about timing. You know, when the seasons are down, that's when you want to buy in.

And.

Are you wanting to do this, Cameron, full time?

No, this is, it's a one month kind of commitment at the end of June. I'm actually going out there June 20 to fish with my family. And usually you get done around July 12. And what can you make about a month?

What can you earn in that one month?

Oh, boy. That, so there was a record harvest in 2022, and there's not the record.

Like, what's the normal?

No, absolutely. I would say the average is maybe $50 to $70,000 in that month.

Okay. That's an average. So it would take you, like, a ten year average?

I would say. Yeah, but there are years where it's zero, so.

Yeah. And this would just be on the side. Like, this doesn't affect your full time job or anything like that. Like, you could get time off to do this.

Oh, yeah.

Okay. Yeah. I'm like, yeah. And how much would the permit be again? Say that number again for this year?

Well, you know, they just announced this price increase this year because last year was really rough. We only got fifty cents a pound for salmon. And then this year, they, because they wanted to convince fishermen to come back because it was such a terrible year. Last year, they put it at a dollar. So the permit prices shot back up.

Did I hear you say 100? 3170.

Yeah. Yeah, 131. It went from 130 to probably about, it's probably around 151 70 right now. But there are no availability. Everyone bought back in when they heard the price.

Well, here's the, here's the thing. You've got 100 and 3120 to work with. And so I'm not taking on debt to do this. If you could get it for 120, I'd probably do it. And if your wife agrees, that's a big caveat to all of this, for sure, I think that you guys will keep chugging away at the mortgage because I think that you should be intentional about that. But I think this is a really cool, that you, cool way that you can make that happen.

Something your family's done for decades. Yeah. If you and your wife are on the same page, we're good with it. You pay cash for it.

You are listening to the Ramsey show. I'm so glad you're here with us. I'm Jade Warshaw, joined by Rachel Cruz, bestselling author, host of Smart Money, Happy Hour and the Rachel Cruze show. Hey, guys. I'm so excited. And Rachel, I'm glad you're here for this announcement, particularly because we've been doing well. Last year, I think, was the first time in a while that you guys did an in person money and marriage getaway.

Yes.

And it was off the hook. Like, it went, it went hard in the paint.

It was so good. We was such, it was such a great weekend to the point, Jay, that we put the tickets on sale for next year there. And they almost completely sold out just at the event. So majority of the people coming were like, return people that were returning. And so then the fall event sold out. We have one in October, and tickets are already gone.

They're already gone.

So we decided, okay, it's obviously a hot topic, money and marriage, kind of a couple's getaway. So we just announced that we're doing a Valentine's weekend, 2025, another event. So you can make sure to check that out@ramsaysolutions.com. events. It's myself, doctor John Deloney. Jade, you were a guest on the last.

I hope you were there. Can I come back?

We're going to invite you back. And it was such, yeah, it was such a great, such a great weekend. I think the mindset, too, of just getting away and Nashville is such a fun city, and we really tailor the way we build this event is like, we want a great experience. We want a great weekend for you guys to enjoy and have fun. Also to learn and be motivated for change. Be encouraged in the places of these two areas of your life that you want to be encouraged. Tickets start at $699, and the early bird pricing is still happening, so you can save up to $350.

Wow, that's big.

And if you want a vip level ticket, get that, because those are always the first tier to sell out. So make sure to check that out. So again, it's February 13 through the 15th, 2025. Valentine's weekend. Money and marriage after Gianteloni and myself.

Yeah, we're so romantic.

So romantic.

One of the things I loved about the event, because I was there just as a spectator, I got to do my little thing for a moment, but I watched, and you guys are so open, like, there's no holds barred. Like, all the conversation is very real. And so if you don't want fluff, this is the event for you. No fluff zone.

No fluff zone here.

All right, I'm excited. All right, let's go to Mike. He's in Pittsburgh, Pennsylvania. He's got a question for us. What's up, Mike?

Hey, ladies. How are you? Good afternoon.

Great. How can we help?

Hey, I got a quick question for you, and that is simply, how do we, my wife and I bridge the gap to retirement. So maybe different than some of your callers. 49 to 50 years old, became debt free at the age of 32. So kudos to my wife for pushing us to get to that point. Currently, right now, we have $2.1 million in savings, which is tied up mostly into our 401s. I'd say half of that is in our 401 ks, Roth iras. The other sub million million ish is in Vanguard as well. But we have access to $154,000, roughly in emergency funds. And the question is, at 50 years old, how can we retire? How can we get out of our corporate jobs? I am in medical sales, she's a VP of finance, and we have a $300,000 combined income per year, and we're ready to go. Enough's enough. How do we transition from our career, corporate lives into that retirement life that we are desperate to seek?

So my first question before we get into those numbers is, okay, so you want to leave your jobs and not do that grind, but you're going to do something to bring in money at a less intense pace.

Yeah. So here's a funny thing. Over Covid I developed, we created a little ice cream shack from the ground up. That ice cream stand is pretty much self sustaining. We do about $150,000 a year in sales, which is open five months out of the year. It's somewhat profitable, but also designed in the aspect of being able, hopefully, to break even that we can shuffle money to. We have 15 year old twin daughters.

Can you clarify? That's top line? That's not profit?

Yeah, no, that's correct. That now you're 100% correct. That is 150,000 in sales. That is not top line. It is being managed by a manager, our employees, and again, small operation, but still pretty productive.

What does it bring you for cash? What does it bring you in cash?

That's a great question. We are right now, with pretty much hands off filling in here and there. We're roughly $30 to $50,000 a year.

Okay. Sorry to break in. I just wanted to clarify that that's.

A fun little thing, just to start in Covid and make an extra 50 grand a year.

I know, right? So.

Well, the fact of the matter is, that's when online shopping became rampant and our kids found out about online shopping, and we were like, hey, if you want to learn what a dollar is, let's make you work for it. So they work. We pay them a handsome little salary because it's a great way for us to shuffle money out of the business to them, number one. Number two, working on Roth Iras for them as well. Different things that we can and use our business side of things to move money their way.

That's great. So let's. Let's just spitball this. Pretend that you and your wife walk away from your $300,000 income. You're. You're taking 50,000, hopefully, a year from this ice cream shop. Is there anything else that you'd be doing? That's my first question. And then my follow up question quickly after that would be, what do you think that you would need to take home yearly in order to enjoy your life at this point?

Yeah, it's a great question. And our neck of the woods cost of living is relatively dirt cheap. Being debt free ultimately helps us do that. What else would I be doing? Golfing and whatnot. But no, literally, it's time to get away from the corporate life that we currently live. And I would say, how much do we need? I would guess 50 to 75,000 a year, maybe at most. Maybe at most. But don't forget, we've got 15 year old twin daughters that we've got to put through college in four more years.

But you have the save. Do you have investments set aside for.

That small amounts, I think they each only have maybe 30, $35,000.

How much do you have in non retirement? Mike, you said you had a vanguard that you could get to. You said a million in that?

Yeah, there's about a million in that and about 154 in emergency.

Okay. Okay. Is the 154.

It's in my local bank money market account.

Okay. I'm just thinking. I'm thinking numbers wise, that's a really hefty emergency fund. Mm hmm. Would you agree? Yeah. So you could lower that?

I don't disagree, but it's how we've worked our lives is we lived off of one salary. We lived off of her salary. My salary went into. And once it got into the checking account. Bank account.

Yeah.

Once it got to a certain level, we just simply clicked transfer. Moved it to vanguard.

Transfer.

Moved van.

Okay, so, yeah, so, I mean, yeah, I would be looking at kids college for sure. I mean, that the vanguard accounts that you guys have, I mean, if you need $750,000 for just your lifestyle of 75, that doesn't include anything that this ice cream shop is bringing in, so it'd be even less than that.

Do you know what your rate of return has been?

We've actually done pretty decent. So, out of the $2.1 million year to date. So you can do the math for me, because I'm not that smart. We have captured, I think, $85,000 in returns from January through the end of April.

So. Okay. What I would do. Sorry, Rachel, I should have broken on you. 401k in personal, though, here's the thing. Like, initially, what you're looking for is that you can live off the earnings, right? And so if you've been averaging an annualized rate of return, not just for that year, but for all of the years combined, and if it's an annualized average of 10% or greater, then that's great. Of course, you would need to account for inflation and things like that. But, you know, we can spitball numbers and be like, yeah, you should be able to do it. But I really would sit down with a smart vestor pro just to make sure, because you do.

Because you can't touch the 401k or Roth, really, until 59 and a half. So, yeah, you guys have about ten years that you'll need to float. And like Jade saying, not touching principle.

How do we bridge this gap?

Yes. So, I mean, it would be either using the earnings off of the vanguard, or it would be. I mean, you could dip into the vanguard if you really wanted to. But I also think Mike, you got, I mean, golf and all that. It is so great and fun and all of it. But I do think that you guys may get three years into it. Just, like, let's start something else. Like, let's find another way to spend time and bring in some money, too. So I think you don't have to go from corporate, 40 hours a week crazy job to nothing. Kind of like what Jade was saying. Maybe just for a season, you guys take off and relax. You have the bandwidth to do that. And then maybe in, you know, 18 months, you're like, okay, let's find something else that maybe we can just kind.

Of just do to make $25,000.

Yeah, that's right.

That's not a lot.

That's right. Yeah. Yeah. To bridge that gap until you guys can hit that retirement age to really add than the rest of this money.

I love that idea. Rachel, just take a nice vacation. Break a hiatus, if you will.

Yeah. Do a year, 18 months. That's great.

And then get a side hustle making twenty five k a year. And you don't have to touch that money. This is the Ramsay show.

There's still $3,000 up for grabs in the Ramsey cash giveaway, but not for long. You've got until May 31 to enter. And the more you enter, the greater your chances of winning. If you like free cash, enter every day@ramsaysolutions.com. giveaway plus, don't miss your chance to get 20% off of our best selling books and tools. Sale ends May 31. Go to ramsaysolutions.com store and save big on your favorites today.

Open phone lines at 888-825-5225 give us a call with your deepest, darkest money, secrets and situations, and we'll do our best to sort through it and hope you find the best next right step. That's what Kate from Orlando, Florida, is doing, so let's go to her. What's going on, Kate?

Hi. Good afternoon. I need your help specifically to find out what do we sell or liquidate to purchase our retirement home? My husband and I are both federal retirees. I've been retired for about a year. We have 2.3 million in assets, cash, investments, home and properties, and we have 15,000 in debt.

What kind of debt is it?

Excuse me?

What kind of debt is the 15,000?

My husband just bought a 2024 f 250, and he paid monthly cash for it. And he has $15,000 debt on that, and he's going to pay that off in.

Can you just reach over and pull some of that cash somewhere. Do you have anything liquid that you can pay it off with?

We do, and he said he wanted to keep it for the gap insurance, something about getting a loan and to ensure that it had gap insurance in case it got into an accident or something. It would cover the value of the truck.

I don't see what one has to do with the other. But what's your main question?

I want to buy a $700,000 retirement home, and we have two homes. We're going to sell one. It's worth about 280,000. And then we need to find or free up $420,000 because my husband does not want to hold a mortgage. He wants to be free and clear, which is great. I agree with. He said that he would hold a mortgage for two years, but he preferred not to. So out of all of our funds that we have, I'd like to know how do we go about or what's the best thing to liquidate or sell in order to come up with the other $420,000?

I said you had two properties. Is that right, Kate?

Yes, we have two other one. It's worth about 280,000. We're going to move into the other one. It's also worth about 280,000.

Okay.

We've just renovated it. We're going to move into it and then sell. Update this one and sell it.

So when you sell. When you sell whichever one, what are you going to clear on it?

We're going to clear 200.

8280. Okay. And so you're saying you need to find another 400? 2020. Okay.

But will you sell the other property, too?

My husband really wants to keep that for retirement for when we're 80, you know, and it's a much smaller property. It's 1100. It's in a great area. So the worst house on a nice block.

And so why don't y'all just move there now?

We are. We're moving there next week.

I know, but why are you. Why are you wanting to buy a $700,000 home?

I want a larger home. It's a small home, but I want a larger home with room and I want a pool.

How are you going to be splitting your time?

What do you mean, splitting our time?

Is it like I'm splitting half of my time in this great $700,000 home? Maybe it's on a lake or whatever. And then I live here part of the time because I just can't see the point of having two personal residences.

We will be either renting it out renting. Out renting out the smaller home. The 1100 square foot. We're going to rent it out, or Brbo. One or the other once we find the $700,000 home. Okay, well, let's move into that full time.

Can you sparse out the 2.3 million, like, how it's where it's at?

Yep. I have 34,700 in cash.

Or we do.

We have 1.27 in our retirement account.

Okay.

I have an $11,000 Roth Ira. I don't think I can get to that for another couple of years, though.

We wouldn't.

And then we have one point, or about 1 million in properties. That includes the two houses. And then we have three pieces of property.

Tell us about the three other pieces.

We have one large piece of property at six acres. It's probably worth an estimate. We estimated it to about 400,000.

Okay.

And then we have a smaller piece of property. It's about 40,000 here locally. And then we have another five acres out of state that's worth about 38,000.

So why wouldn't you just liquidate that first piece of land for 400?

Oh, because it's a gorgeous piece of property.

Listen, you told me you want a $700,000 house. Something's got to give.

I know, I know, but is there any way we can make this work without giving up that piece of property?

Well, where do you think the money would come from? Like, if you looked at these numbers, what is it that you've got your eye on?

Well, we had thought we had put a bid in on a house for cash. We were going to take it out of our retirement accounts, but we would pay. We'd have to pay the interest, and it would put us up into the $32,000.

What are you going to live off of? What are you going to live off of?

We have a combined $9,000 retirement or, excuse me, $9,000 per month pension.

Okay.

How old are you guys?

I have $9,000.58 and he's 61.

Okay. Okay. Well, that makes a good diff. I mean, that's a difference. That helps it, for sure. Here's. Here's what I would. I almost want to just. Are all these properties paid for?

Everything's paid for. Outright?

It is outright.

Okay.

Okay. I mean, I almost. The other two. I mean, you could free up 78, 80,000 in these smaller two properties just to give you some wiggle room in this, you know, for 20. I mean, man, that's. I mean, that's cashing out I mean, not quite half of retirement, but that's a. That's a good bit of your retirement, even though I know you're getting the pension and all of that, which is.

Great, but I have a hard time touching that nest egg. Right, that 1.2. Yeah.

Right. Because what's your lifestyle right now, you guys? How much do you guys spend a month? What are you living off of?

Gosh, I wouldn't even know what we would. We're spending a month. I would say no more than twelve hundred dollars a month. And that's for four. Utilities and. Well, maybe food, maybe a little bit more than that. Maybe 1400 a month.

So you've got more than enough. Can I ask you not to toggle you back and forth, but going back to the land, what were your plans with that? Because when I mentioned it, you're like, oh, it's a beautiful piece of land. As though, like one day you were going to build something on it. But I'm like, well, you've got the seven. Get the $700,000 house we had planned.

To build on it, but we just got finished during a renovation about six months ago, and it literally almost killed me. And we're lucky we're still together. So.

So what's the plan on the land now then?

It's a play place. Four wheelers. It's. It's just a. It's a great escape.

Do y'all use it?

Yeah, we go down there a couple times a week.

Okay. Okay.

It's about 30 minutes away from our house.

Gotcha.

Yeah.

I'm just being honest. Okay. And you're gonna go away from this and you guys are gonna decide what to do. But the fact that you've got 1.2 in. In cash. Cash, like everything else, is tied up in properties, it bothers me to take a third of that and cash it out at this stage. I know, but you're getting the nine k. You'd probably be fine. But if it were me, if I were in your shoes, I would like the feeling of having that 1.2 in retirement. It's continuing to grow. And I would either do one of two things. I'd either sell the land and be able to buy this house outright, or I would do what Rachel said and I'd liquidate properties two and three. The one that's worth forty k and the one that's worth 30.

I would liquidate the 280. I would. I would take the house too.

Yeah, that one too.

Because here's the deal, too. You know, Kate, you're saying, yeah, but eventually we will want to move back to that. But you don't know that the $700,000 house, it's going to be paid for.

Yeah. That's a good thing.

Maybe you guys are fine. Maybe that's the. That's the forever house. Like, you never know. And if you wanted to move to a smaller home, which is the 280 home, you're going to sell what's going to probably be a million dollar house at that point and go get a smaller home and probably make some money, too. Right? So I would sell the 280. I would sell the other two properties. Two and three. And, gosh, that gets you to get you pretty close. Close to that 400. Yeah.

And then you can take the rest out. Yeah.

And then if you needed to take a little bit out, you guys could. Okay, that's what I would. Because I. You guys have just done a lot, which is really great. But if these two properties, you know, that you don't necessarily need sitting there and a house that you're going, you think you might. It's the same concept people do for their kids. Like, well, I'll buy this house and my kids can live in. I'm like, your kid is four. Like, when they're 24, they may not want that any, right? So much life changes. So much life changes. And I would rather you guys keep money building and building compound interests and working for you than not. So I would. I would try not to touch as much as I can in that 1.2. But you guys are in a really great position, Kate. Like, really, really great. You've done so many great things, and this is what it is, that you're living the dream. You really are.

I mean, it's a great discussion to have. Like, these aren't problems.

Yes. So good. Great job, Kate.

Oh, that does it for this hour of the Ramsey show. We'll see you next hour. Live from the headquarters of Ramsay solutions. It's the Ramsay show where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host today, Jade Warshaw. I'm joined today by your other host, best selling author Rachel Cruz. All hour long, we're going to be taking calls about your life and your money. So give us a call. The number is 888-825-5225 and we will do our best to give you our best shot at information and advice for you. I think it's pretty good. All right, Anna is here from Phoenix, Arizona. Anna, what's going on?

Hey, guys.

How are you doing good?

So the reason I'm calling is because my husband and I have kind of been having an issue with savings, and I have a different view on how we should save and what we use our savings for. I love my husband very much, but he has a bit of a spending problem. We will. I will start saving, and then it will kind of dwindle to nothing. Sometimes we don't have an issue with our payments. We make our bills on time. But it kind of got to the point where I ended up having to make a separate savings account, because if he sees it and he knows it's there, it will be gone. And I just. I don't know if it's the wrong thing. I don't know if I should give him, like, access to it, because this is a cycle, this has happened before where I accumulated savings, and then it kind of goes back down to nothing. And then I save again, and then it goes back down to nothing.

What's he spending on?

Hobbies, mostly, like fishing and hunting.

So he'll just go and just use the money. You guys don't have a discussion about it? He just goes and does.

We do have a discussion, but I think. I think he just gets a little excited and he kind of does it anyways.

I think even though you guys may agree, hey, we don't really have the money for this, or this takes us down to zero. And he still goes and buys fishing equipment?

Yes.

All right, and then what's your reaction when you find out about it?

Well, I get upset and.

Yeah, but he's a child. He's a child. I mean, he sounds like a. Like a. He sounds like my six year old. I'm like, dude, you got. You have a wife and kids. You can't spend all of your money.

So.

Yeah, Anna? I mean, I. Yeah, I mean, I think that there's definitely a fairness in saying I don't feel safe. I don't.

I don't feel like you're not valuing.

I'm going to be taken care of, so I'm going to have to go and completely make my other plan. But the. But the issue here is in all of that, right? Like, this is always the symptom of other things that are happening and things within him that are extremely immature, very impulsive, extremely disrespectful to you. And have you guys seen a marriage therapist or counselor?

We have, and it has gotten a little bit better. But like I said, it just kind of makes me a little bit nervous because he wants access.

How has it gotten a little bit better?

I kept the savings now for a.

Few months, so it's gotten better because. Yeah. You have your own account.

Yeah. And I've been able to keep the money there for a few months now, so.

But he hasn't gotten better. You've just taken upon yourself to kind of go off to the side because it's your only option, seemingly.

Yeah. And I think it's causing a lot of issues.

Yeah, I totally, no, I mean, I, Anna, you're not in the wrong in this. Right? I mean, like, you're protecting. Do you guys have kids?

We do. We have a six year old and a two year old.

Okay. Okay. Okay.

If we were to ask him, like, what are you guys financial goals? What would he say?

He would say that he wants to pay off his debts.

Okay. Have you guys, do you guys sit down and do a budget together?

Yes, but I think we have an issue sticking with it. I think that's the hard part.

Yeah. In it. Yeah. I mean, I mean, Anna, you, there's two ways of going about it. It's either that, you know, you keep doing what you've been doing of protecting yourself, but you're gonna further and further alienate the relationship. So what I'm saying is what you're doing, I would do. So it's not a, but over time, that ends up hurting the marriage long term. And so I want the marriage in a place where you guys are so unified, so in the same place. And that he resp, that he, I mean, it's a sign of disrespect, in my opinion. It's very, it's very unloving what he's doing to you. Very unloving. And, and, I mean, Anna, and this isn't to scare you, and I hate to even throw this out there. We just had so many calls recently like this, and then we're talking to people in their fifties, and the wife is like, I'm scared I can't retire. And you're like, he either grows up or you leave. Like, I mean, there's a point that you're like, I, you can't sustain a life when you have two children and then basically a third child that you're trying to parent as well.

Right. In a sense, like, with them emotionally. So, yeah, so I don't know. And I mean, I would give some pretty, I mean, and I hate just like, throwing out ultimatums here, but the problem is, is that you guys can't function like this in a healthy marriage long term. It's not gonna work. And so there's an ultimatum of, hey, we. Things have to start to change.

Yes.

And we need to start actually doing a budget and actually sticking to it. And that's him keeping his word that you guys sit down together and it's his debts, your debts. But I would go in and say, I want to do a team, a team aspect, but until I see change in you, I'm still going to keep this over here because I don't have a choice. But from here on out, let's put all the debts on the table. Let's put all the income on the table. Let's just look and see, and let's create a plan. And if things don't start to change by just your, both of your efforts, you need to pull in a third party. And I would go back to a counselor, but then there's a point, and I'm like, yeah, you can't. You can't survive like that.

You know, I 100% am with Rachel for you. Yeah. I think there's nothing wrong with creating that line in the sand and saying, here's what I need to see, and here's why. Because, Rachel, I mean, I'm not even rehearsal. Yeah, rehash what you just said. It's so unreasonable. And there is, you know, I hate to throw around the word expectation, but I do expect that when I'm in a relationship with someone, I have to see that goodwill of, like. Like, I want to see you trying. If I can't see any effort, like, you're not going to be perfect. And it might take a while for him to 100% get it on track, but I need to be able to see some movement. And the fact is, we haven't seen that. And you're like, no, I had to just move the money over here. And that's still a problem. So I'm like, oh, yeah, I drawn lines in sand.

Yeah, I know. And I'm saying all this as a spender. Like, you should see the Amazon packages show up on our door. Because I do. I spend money. I enjoy spending money. I enjoy clothes. Like, I have. Like, you know, so I get it. But I do it through a plan, and I do it with intentionality before the month, stopping, knowing, hey, I have this much to spend. Once I'm done, I have to stop. And you know what I mean? Like this. You can be a spender. He can have hobbies and have fun. It's not like he can't have a life, but you have to, on a basic level. Be able to support your family and not put them in a dire situation of draining all of the money to go freaking do your fishing, hunting, stuff.

Like that's a trick.

Like, that's a child. That is a child. And my assumption is usually Jade, and this is always a scary thing throw out there, but usually my assumption is when, when it's a level of immaturity of decisions being made there, it's probably trickled into other areas of your marriage, too. Anna. And so I'm so sorry. I would do what you're doing, though. I think there's a level of protecting you and your kids to make sure you have the money to pay the bills. But if you guys can't sit down and as a teenager, create a plan, like Jade said, lots of grace. Like as you start this whole new process of budgeting together and really trying to stick to it. But if he doesn't make changes soon, I would go pull in a third party. And then, and then there's going to probably be more serious discussions to be had. So I'm so sorry. I'm so sorry.

This is the Ramsey show.

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You're listening to the Ramsey show. I'm Jade Warshot. Next to me is Rachel Cruz. And I'll tell you what, Rachel, it seems like every time I turn on the news, especially like financial channels, Fox News, CNBC, I hear this word, this term being tossed around. And I think it's kind of a funny term. It's called spathing.

Yes.

I'm like, when people combine words, it's the worst. But it's like spending to save combined. And so CNBC came out with this article, but like I said, it's everywhere. And it says Americans can stop spaving. So here's how to avoid this financial trap. So let's kind of talk about what it is you're spending more to save. And it's kind of becoming a pitfall. Like you're just ending up spending too much.

Well, and I think. I think merchants know that if they can throw up a sale, you're more likely to go shop.

Right.

Because you feel like psychology wise. Right. That mentally. Oh, well, I'm saving money, and there's fomo. It's kind of like the girl math of like, oh, my gosh, I saved $50. And the question's like, well, how much did you spend? And you're like, well, well, but I saved $50. So, yeah, I think these, like, these sales, flash sales. Buy one, get one, free, limited deal time only, free shipping. I mean, they have a lot of this because they know people. They fall into it. Now, if you were originally gonna buy the item.

Yes.

And it happened to have a great deal and it's on sale, or you wait for a sale to buy the item or something. Right. It's a planned thing. Take advantage of it. It's fantastic. But I know for me, Jade, I go on my gmail and I refresh, and I have about eight emails from stores, and it's like 20% off. This, this, this. And I would have never known, never have known that J. Crew had a sale unless they emailed me.

I have to go through an unsubscribe.

No, I need to.

I love good american, and it's like, I unsubscribe, but then when I buy something again, I'm right back in. I'm like, come on, man.

I know.

You know. And so it is.

It's so. It's so, so tough. So I think a couple of things to do just to watch and be aware, because, again, if you have the cash, if you're originally going to buy it, this is great. Take advantage of the sale. George camel, he's the. He's the king of all of that. I feel like he watches deals when he wants to buy something and waits for it to go on sale.

But you have to ask, what did you come here for?

Yeah, but this is. This is more splurging. This is more that, that kind of, like, off the cuff spending, if you will.

Yeah. It's.

You have to be. Be careful of.

It says spending to save can lead to excessive buying habits and high interest credit card debt if you aren't careful. It says spaving encompasses all the ways that buying decisions are rationalized, which is, amen. I don't want to miss out on the sale. I mean, if I can get this one for free, I may as well go ahead and get this. And I was only coming for one pair of jeans, but if it's buy two, get the second. The third, 50% off.

Might as well get.

Listen, I fall for it every time.

I know, I know.

On the jeans.

So. So, yeah, something a couple ways just to work. Watch it. Because this is saving habits that really do affect, you know, it really adds up over time. So, number one, Jade, it's what you said, but I do, and I tell people to do this, I need to go back and do it myself, is unsubscribe. Right. So whether it's people you follow on social media and they're, like, a fashion blogger, and you just happen to, like, constantly see new things that are out there and it tempts you or emails, like, anything that's just around. Just. Just unsubscribe for a while. Yes. I think it's key. And then. And then also just have that dollar limits, like, on anything. Right? Like, have. That's why we love the budget. Because then if a sale does come up and you're like, okay, you know, I was gonna buy a pair of jeans. Can I afford another pair? Is it worth the deal? Was I even gonna do that in the first place? Right. So I think having that price point, too, in your head.

Yeah.

Is really important. It takes a lot of discipline then to stop, because it's so easy just to.

And here's the thing, Rachel, sometimes, okay, I'm about to throw a wrench in the plan, because sometimes I feel like there is a deal that pops up that you're like, this. This is beneficial. Like, this is good. And so I know, like, on the meal planning tip, I'll say, like, save for sales. Like, have a little fund that's there for you. Because sometimes they do have really great deals on stuff that, you know you're gonna eat, you know you're gonna use it. And so I feel like there is a way to kind of save for sales and have it there so that when that great opportunity pops up, you're ready for it and you've budgeted cash, basically.

Totally. Well, that's what I was gonna say, too, is take advantage of it. That'd be the third thing. So if it is in your corner to be like, oh, no, this is actually gonna be an advantage for me. Or, like, publix does buy one, get one free, man. But did you know that if you just buy the one item, they give you half off price wise?

No, I did. I was today, years old when I.

Found out that's what they do. So there's, like, deals within the deal. So you don't actually need the both items. You can just buy the one, and it's half off.

Listen, I feel sheepish. I really do. I am so shook right now. Oh, man.

You're welcome, Jake.

Thank you, Rachel. I am a changed woman.

Well, I heard about it years ago, and I was like, no freaking way. So, anyway, so, yeah, take advantage of the sales, because either you have the money that you're saving for it, or they have a little deal within the deal, and you can still just buy what you're going to buy, and you get a better deal off that, too.

You want to know who that's. That's excellent. That's excellent. Number one. But do you want to know who I think is the worst at this? But I also love them very much, is wayfair.

Oh.

Because they'll have the real price. They'll have the price. And then right next to it, in, like, purple, they'll have what the price used to be with a line through it. Yes. And then right next to that, you can tell I go on there a lot. Right next to that, they'll have, like, 65% off, but it never changes. And I'm like. And it doesn't tell you how long it's gonna last. So I have to say, that is the hardest one for me, because if I'm looking for something for the house, like, real talk was looking for a Murphy bed for our upstairs playroom. And the one I liked was 50% off. And, I mean, it's a decent amount of money. And I was like, sam, I think that we should get this because it's on sale. And then I had to tell myself, wayfair is always on sale.

Yeah, that's right.

It's always on sale. It's always there.

But it is a psychology game, though, right? Because you're like, oh, my gosh. You see the sale where the truth is. I mean, I don't know the. The whole situation, but I'm like, you know, you could have found another great Murphy bed somewhere.

It might not even really be a sale, but.

Yes, but that's it. But they trick you into making you think that when you see that red.

Flash through it, like, feels slashed prices.

What always gets me is the free shipping, because I'll be, like, $7 for free shipping. Or I could buy $15 more of.

You actually get something. Yes.

And you actually get an item. But you're in. There you go, spending ten more bucks for it. And that I never really needed. I don't know. It's hard, jade.

It is hard.

The temptation is real. So, all that to say, just don't get sucked into you guys. If you weren't gonna buy it in the first place, stick to your guns. Don't. Don't fall for the sale. Just because. Just because it's a good, good deal doesn't mean it's a good deal for you.

That's right. Oh, my gosh.

It's tough.

I am reaching to myself in this moment. I'm not gonna lie. I feel like I fall for this quite a bit. All right, I think we have time to take a quick one from Jessica in Boston. Jessica, we're up against the clock. What's going on?

Hi. So me and my fiance are going to be married next month, in which case our debts will be combined. I'm debt free, except for the mortgage on a condo that I have. And he just has about $10,000 worth of car debt. My question is, he owns his own construction company and he just became a contractor and he really wants to try to flip a house. So my question is, do we save for doing that project for him, or do we work towards paying off the mortgage or do we do both?

How much is left on the mortgage?

166.

166 on the condo. He's a contractor. Is he going to be working for somebody?

So he would be the head of the flip project. He wants to do it through his construction company and be the general contractor for the project.

Yeah, but he will be. I mean, if you guys weren't putting up the money, he would have someone else that he's just doing it for.

Oh, we would buy it with a mortgage, I think. Like.

Yeah, no, no, but I'm saying. Say that was off the table, though. And he's a contractor, though. How will he be working in general? Not with your money, though. Like, does he have a company? Will he go work for a company and their going to do construction on new builds or like. Like what. What's his job?

So he owns the construction company. So he would. He, like, owns the employees that would be doing all of the work.

Yes, I understand that, but I'm saying, if you guys weren't. Oh, no, you're fine. You're fine. If you guys weren't going to take a mortgage out, what would he be doing for work?

Oh, he would just. He has jobs that he goes.

That's what I was going to say. Okay, perfect, perfect. That's also.

Okay.

So what I would do, Jessica. Yes. Is pay off your home first. And is that the condo that you guys will be living in is yours?

Eventually, we want to own our own home and sell this condo, do that job to kind of try to help pay down the condo.

Gotcha. Yeah. Yeah. I would pay down the condo, pay it off, and then you guys save for the flip on everything else that he's doing. I would start small, and I say that as a wife of a flipper. So Winston's doing now. He has four right now, and it's. And it's taken us a while to, like, you know, build some inventory. But. But also, the beautiful thing is, when the market is not great, Jade and those houses sit for a bit. You're not stressed trying to pay a mortgage on something that, oh, and then you get rushed and you do a bad deal. We have so much patience because time is on our side. We don't owe anyone anything, so we're gonna wait for the deal. So doing flips with your own money. No mortgage is the way I would do it.

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You are listening to the Ramsay show. I'm Jade Warshaw, joined by Rachel Cruz. And we're taking calls about your money. And so many times, Rachel, the calls that we take day in and day out, they really boil down to people not having a plan, not going in with a prior set of goals, with their money not being on the same page as their spouse, with their money. Somebody's overspending, but there's no real parameters there. And we found time and time again that really the crux for everything that we teach about and talk about is it all goes back to the budget. I mean, we talk about a series of baby steps, right? Seven steps, really, to get you towards financial peace. But in order to make that happen, you've got to have a budget in place, a great budget in place. And we have that for you. The best budget app in the world. It's called everydollar. And it's the best way to make the most of your money. Because you create and stick to a monthly budget, this becomes a monthly habit, a daily rhythm in your life. Everydollar makes it so simple to plan your spending.

You can track your transactions, and you can have the ability to save for what matters most to you. And that's everything from an emergency fund to saving for a vacation. And you can do all of this in an easy to use app. It fits into your busy lifestyle, and it fits into your pocket because it's on your app, it's on your phone. Of course, you could use the desktop version as well. So use everydollar. It helps you keep a pulse on your spending. It helps you make progress. Instead of excuses, you can make progress on these goals with every dollar. So today, download every dollar. It's the free app. You can find it in the Google store or on the app store today. Trust me, it works. Do that today. All right, we've got chance. He is in Phoenix, Arizona. What's going on? Chance.

How are you guys?

We're doing all right. How about you?

Doing the best I can. So I just recently moved to Arizona with my wife, and a couple months ago, when we moved, we got sick. I was out of work. She's still out of work. We've built up a lot of debt. We have about $40,000 in total. 15 of that is credit cards, five of that is medical bills, and then 20, like, 20,000 of that is a car that I had to get rid of. We're three months behind on, like, actual bills, rent, car insurance, and phone bill. I just. We don't know where to start. We really. We're trying to get out of debt, but we don't know where to start.

What happened when you got sick? What do you mean by that?

When me and her both moved out here, we ended up falling, or we ended up getting Covid and I fell out of work for about two weeks, three weeks. My wife ended up losing her job due to not being able to go and work, and then she ended up getting hyperthyroidism. And she's just been dealing with all that stuff and trying to get all that figured out. She's just recently started, like, doing better, and she's searching for a job now. It's just more so. We feel like it's way too late for us to even get caught up at this point.

How old are you guys?

I'm 27. I just turned 27 a couple days ago, and she's 25.

And what kind of work did you get? Like, what's your specialty?

I work for the state. I build gas stations, do the testing on the fuel and diagnosis and repairs.

Okay, and how much are you making? A year?

Year. It's about 50,000, give or take three to 5000. Sometimes we get bonuses. Last, they just told me last year everyone got like a $5,000 bonus, so.

And what was she doing on it?

But it would be cool. She was working at a dealership doing like the rental part of it, working with customers and handing out rental cars.

What was she making?

She was making, I want to say it was 40,000 a year. So we were sitting pretty good.

Yep. And then you started just getting behind. Okay. So are you back to work full time?

Yep, I'm back to work full time. She unfortunately isn't. She's looking for a new job.

Okay. And prospect wise, do you think probably in the next 30 days she'll have something?

We're hoping.

Okay.

We're really hoping for that.

Yeah. But if not, she could go retail or something, right? She could go targets paying like 18 an hour or something. She do something though, right? Like if, in the next 30 days, if she needed to bring in a paycheck because you guys are in a pretty, I mean, a pretty serious situation. I mean, three months behind on everything. Yeah. You're gonna, you guys are gonna have to do, you're gonna have to do a lot more than what you were even doing just to get on solid ground because you can't start paying off this debt when you're behind. So we want, want you current on everything. So that will mean extra jobs. That's going to mean you working probably nights. Her probably working nights. Do you guys have kids?

No.

Oh, good. Okay. So that's helpful.

It's good. What's your living situation? Rent or mortgage?

Rent. And what's your, we're currently paying $1,100 a month.

And you're behind three months on that too?

Yeah. We're very, I'm very thankful that our apartment, our apartment complex, the landlord has been very like, on point helping us out and telling us we don't have to pay the rent just yet.

Okay.

So, I mean, we'll, we'll have to end up doing double payments in a couple months in the future.

Yep. Okay. So you were bringing home about 4000. So let's say, I mean, if she can get, you know, 2000 a month starting out, 3000 a month.

Yeah.

What do you think, Jade?

I mean, with the hyperthyroidism, I don't, I know a little bit about that, but I don't know a lot. It's, it's, it's not keeping her from working at this point. Correct. Is she managing that?

Yes. Correct. There's a lot more that goes along with that. I mean, in Oregon, they had her on the wrong meds and all that. So it's really messing with her. Not helping her at all. But she finally got back on the right meds. She's on track and all that. She's been doing Doordash for about three weeks now.

Okay.

She's helped me. She's brought in about $500 in three weeks.

Okay. I agree with Rachel. I think that she can step it up a level. I love that she's doing Doordash, but I truly think she can get, like, an hourly job and get one of these $20 an hour service jobs relatively quickly and do. Do that in the meantime until she finds where it is that she wants to land and kind of figures out the normalcy with her help. Yeah. I think that at this point, whatever she can bring in, and you, too. I think that you're in a lucky position that there's not children in this relationship, because you guys can work all hours of the day, and it's not going to be fun to do. But I truly think you need to do that for. For many reasons.

Yeah.

And, yeah, it's only four season, but I think you guys confidence is. Is hanging by a thread right now. You got knocked out with, you know, being sick for several weeks, and then for your wife, it ballooned into something more serious, and you lost your jobs, and you've just been, you know, living on a prayer. And I think that you guys need us. You need some wins, and you need time to not be dwelling on this. And there's a really great place to keep your mind occupied when things are tough. And I. That's working.

Yeah, for sure.

And bringing in some cash.

Chance, talk to me about this $20,000 car. How much could you sell it for?

Unfortunately, I did try to sell it, but I couldn't find anyone to actually buy. I was searching for about three months.

So it's overpriced.

It's overpriced. But also, it was. It was a Volkswagen GTI, and it completely just broke down on me. When I went to go and get a quote to have it fixed, I got told it was $9,000 to fix it, and I didn't have that money. And at that point, I kind of just told the bank to come and take it.

Oh, shoot. Oh, so it was repoed.

Yeah. So I. I know I messed it up there, but, yeah.

Okay, so you owe 20 grand, but you don't have the car.

Yep.

Okay. Okay. So, yeah, what I would do, Chance, I think. I think Jade is right. I think for you guys to have some wins is really important. And so we're gonna give you every dollar premium, the budgeting app and financial peace university, because this budgeting app, it's going to help you guys navigate. Here's the money coming in. Here are our bills. Basic. Not catching up. Just basic. How can we pay rent this month? How do we not get behind on everything? And then that's going to probably show you some red. Your number is probably going to be red, and it's going to be red. And it's going to say, you need $2,000 more, whatever it is, to stay current. So that's going to help you see. Okay, how much more do we need to bring in to stay current, then? The goal would be that you cut all your expenses. You guys do nothing. Cut up the credit cards. I mean, there's nothing going out that is not your money, because you don't want to continue to dig in this hole and then be able to say, okay, well, how much more do we need to have margin?

Because that margin then is going to be extra money to start paying back some of these back bills. But I would be paying rents. I would be paying all of that. Before your debt. Before your debt. You guys need to get caught up first and foremost on your. On your necessities, which are your bills. So make sure you guys do that. But hang on the line. Christian's gonna pick up. But that's one of the best things you guys can do, is sit down tonight and do a very detailed budget and see how much more income you guys gotta bring in.

You're listening to the Ramsey show. Hey, thanks for hanging out with us today. I'm Jade Warshaw, joined by Rachel Cruz. Scripture and quote of the day. Consider it pure joy, my brothers and sisters, whenever you face trials of many kinds, because you know that the testing of your faith produces perseverance. That's James. One, two verses, verses two through three. Then Beyonce says, come on, Yonce. She says, if everything was perfect, you would never learn and you would never grow.

So true.

So true.

You need a lot of wise words from. From two different great sources. I know.

I like it. We got James and we got Beyonce, queen bee. I love it.

It is true. And I feel like we've taken some calls today of some trials, jade, in this show, and I think it is, though. I think it is something beautiful. That's what faith does, is it does give you hope, because trials are going to happen. It's not if, it's when. And they may all look different. It could be health, relational, financial, whatever that is for you. But there is. There's a belief in something bigger that's going on, and there's a hope in that that's really beautiful.

And it turns you into who you're supposed to be.

Yes.

You know, I think that's the great thing. It's like when you learn from these things and when you allow it to shape you, at the end of the day, you probably wouldn't take it back.

Because it changes the trajectory of so much. That's right.

Love it. All right, let's take a couple more calls. We've got Jenna, who's in Atlanta, Ga. What's going on, Jenna?

Hi, ladies. How are y'all doing?

Doing good. How about you?

Doing well. So I've been following along with the Ramsey program for quite a while now. So I have paid off all of my credit cards. My emergency fund. I know, right?

Yay. Yes.

My emergency fund, I have it saved up to 2.7 months, which equals out to be about 9.6 thousand.

Yeah, girl.

So now I know I've been working. I'm telling you so now. So my question, dealing with debt two on the debt snowball. So, as it reads, you know, you take your smallest one and pay it off and then escalate from there. Now, my smallest debt is sitting at 0%. So, backstory. When my ex and I bought the home that I'm currently in in 2017, because I had no debt until then, everything was paid off. No credit card debt, no student loans. Like, I paid my master's degree off in cash, you know? So the house that we bought, it really needed a lot of work when we bought it. And it took a couple of months for us to get stuff done before we could even move into the home. So once we moved in, my savings was pretty much so depleted at that point. And then in 2019, he and I, you know, we were done. He's left. And ever since then, it's kind of been one thing after another. So I ended up having to take out my first loan that's at 7.26% to pay for my attorney.

How much?

And I have it sitting at $9,500 right now as we speak.

Okay.

And then very shortly after that happened, my h vac system in the home just completely quit. I had been putting money into it to try and keep it working, and it just got past the point of being able to save it.

So would you shell out for it?

That was an $8,000 spend, but it was at 0%, and I have it down to 4500 right now.

Okay, what else you got?

And then I have a truck loan that's at 7.75%. I had a.

How much do you owe on it?

What do you owe?

I'm at 11,300 on it.

Okay.

The GMC that I had died on me.

What else you got?

What other debts?

I had surgery in December, so now I have a medical bill. How much is that? 15.56% at 14,014k.

Okay. Is there anything else?

Nope, that's it. Other than my mortgage, that is all.

Okay, but you did say that you have 9600 saved. Did I hear that?

Yes.

Okay.

And how much are you making a year, Jenna? How much you bringing home?

So last year, I'm salary, I was 78,500 with a net of 62. And then I got a raise in March of 84,000. So I don't know what my net is going to be quite yet. Okay. But I did get that, right.

Okay, that's great. Yeah, we'll say 75. Okay. So let's see.

I guess I'm just trying to tackle this in a way that decreases my overall interest. 0% I'm wanting to put at the back burner. You know what I mean?

I get that. I get that, you know, you started with the interest rate on a lot of these, and it's going to feel different that what Rachel and I are about to tell you, because you're very focused in on the interest rate, but the way we teach it, we're not focused on the interest rate at all. The way we teach it is we just want you to get a really quick win. And because when you get that win, I mean, literally, psychologically, your brain feels that hit of dopamine, and you get that feel good feeling that's like, yes, I did something, and that creates motivation for you to keep going. And so, psychologically speaking, and what has actually been studied to be the best method of paying off debt, a method that people will stick to and actually complete, is a debt snowball method where we're not considering the interest rate. We're just listing them smallest to largest. And perfect example of that is your first debt would be this $4,500 that you pay down. It'd be gone instantly.

Yeah, yeah. You could pay that off today.

And then half of the $9,500 debt.

Yep. It's down to, yeah, 4500.

And then you just keep a thousand saved for your baby step one. Yep.

And then you can knock that one out. And then what's left would be the car and then the medical. So you just kind of. You start working your way down, but you already have. You already can feel the progress being made even in that. So it's not. Yeah, I mean, because the truth is, if all this was just a math issue, people, we wouldn't be in debt.

Right?

We would just do math and stay in the green all the time. And so it really isn't. So there is something powerful about knocking some of this stuff out. So, yes, mathematically, I understand, and I see what you're saying. But personal finance, Jenna, is so much about behavior. I mean, we say it's 80% behavior. It's 20% head knowledge. So the head knowledge, the math piece is such a small percentage of you actually winning. How you're going to win, Jenna, is you. It's not a 7% versus a 5%. Whatever. Whatever. It's Jenna. Jenna's the one that's actually. What is the secret sauce? Like, you are the one that's going to be able to do this. So if I were you, Jenna, I would have your job. I would work. I'd work extra, find the side hustle to do three nights a week. I mean, if you really, really limit lifestyle and attack this stuff, I mean, you could be out relatively quickly. Honestly. Like, there's. There's so much there really kind of.

Where I got started with it, the position that I have, I'm a nurse, but I work for the insurance company and I was working my regular team and then I had an extra team that I worked on the weekend and then I got laid off of that weekend team because we lost the contract for that particular facility. So that that kind of got wrenched on in the system because I was making really good progress.

Yeah, that happened. Yeah. How much is. Yeah. Limited everything. How much is, like, your eyebrows anymore? How much is your mortgage?

My mortgage is 1100 a month. I have 166 left on it at 3.1%.

Okay. So, I mean, I'm just like, I'm just doing, you know, rough math here, Jenna. But gosh, if you're bringing home 7000, because if you're making. If you're probably, it's probably net 75,000 after your raise, you'll be bringing home a little over 7000. So I'm like, God, if you can get that 5000 paid off in two months.

Yeah.

Find that margin that could be knocked out and do the timeline on this too, because that can be June and July and then say, okay, let's, let's add another three months for that 11,000. So I'm going to work extra. You got, you got August, September, October, that's out. And then you got, you know, October, you got November, December, January, February. I mean, by February, that 14,000 could be paid off. Like, you could, you could be in under a year. Yes, less than a year, Jenna, all this could be paid off.

I'm hoping so. I'm really trying, y'all, because I already have, like, a plan in place for what I'm gonna do whenever all this is paid off. Like, I want to for myself.

I love 29 for put that effort into a plan of the step payoff. I mean, seriously, like, map it out, be detailed. Because what, what is so great, Jenna, is, and you probably, if you go on YouTube, can see some of these calls, but these debt free screams that come in, people come in with these charts, and they're charting, you know, every single day. They're so specific because they have this timeline of, I want to be out in x amount. And it's realistic. This isn't like, woo woo thinking, like, realistically. That's a lot of hard work. It's no lifestyle. It's working extra, all of it. But make a plan, Jenna, so that you can see your way out on this and do the smallest to largest game. Don't be playing the math game all the time. Do something that's actually going to encourage that behavior and get progress. So you're going to do great, though, Jenna. You really are. I think you're in a great position to make some big changes.

Hop onto every dollar and make sure you get the premium version so you can check out the financial roadmap tool so you can really see the timeline on all of those things. Not just the debt payoff, but even what you were talking about, the investing and the saving for the future. It's a great way to stay motivated. We're rooting for you. We know you can do this. This is the Ramsay show.

Doctor John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life, but they don't have to define you. The Doctor John Deloney show is here to help. It's a collar driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids, and so much more. Listen to questions from our callers. Or if you're walking through a tough situation and need some help, give me a call. You were never meant to do life alone. And that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey network app. Remember, you're worth being well.