Your Future Depends on What You Do Today

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Speaker 2 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 amazing relationships.

Speaker 2 I'm Rachel Cruz, hosting this hour with my good friend and best-selling author, Jay Borshaw. And we are here to to answer your questions.
So give us a call at 888-825-5225.

Speaker 2 We'll be talking about your life, your work, your relationships, your money, all the things. So give us a call.
So first up this hour, we have Marie in Huntsville, Alabama. Hi, Marie.

Speaker 2 Welcome to the show.

Speaker 3 Hey, Rachel. Thank you so much for taking my call.

Speaker 2 Absolutely. How can we help?

Speaker 3 Well, I have four kids. My oldest is 18 and looking at college this fall.
I am trying to, I'm wrestling, me and my husband are wrestling with how to instill the wisdom that we want him to have.

Speaker 3 He's had a job since he was 16 on and off

Speaker 3 around school and things like that. But we recently told him he's got to start paying for his own gas in his old truck that we helped him pay for halfway like Dave teaches.

Speaker 3 And it just feels like it's a big burden on him.

Speaker 3 We're going to pay for his schooling, but he's got to pay for all extras. And after two years, he has to pay for even his schooling.
So we're really trying to teach him.

Speaker 3 We want you to start learning really how to save and manage your money. And I just, I don't know.
Am I being too harsh? Is it too much? He's just got a door knocking job right now.

Speaker 3 He has a full-time job lined up, but it's not started yet for this summer.

Speaker 3 I just, I'm trying to strike that balance between being too harsh and helping him. I just don't know.
So I wanted your advice.

Speaker 2 I mean, I'm hearing, I'm listening to what you said, and I feel like a lot of it's on the right track.

Speaker 2 He's, you know, he's had a job since he's 16. You've got, you've been forward with him with, hey, we're going to help you with education up until this point.
Here's what we expect.

Speaker 2 I think setting expectations is such a big part of this.

Speaker 2 and a huge part of college making sure we know hey this is the college you can afford here's the percentage we're going to pay here's what we expect from you and it sounds like you're doing all that my question for you would be

Speaker 2 what have you seen that's giving you pause? What have you seen that's making you feel uncertain about whether he's going to you know be able to carry this out going forward?

Speaker 3 Well, I guess what we've seen is from the beginning, we've always said we want you saving.

Speaker 3 75% has always been our rule.

Speaker 2 Wow.

Speaker 3 But just because that we just set up to be able to pay for cars and things like that. So he did real good.
He bought his old truck. We met him halfway.

Speaker 3 But really, since then, it's been hard for him to meet that. Something comes up, things like that, which is understandable.
I know he's a teenager.

Speaker 2 75% is a high percentage of savings.

Speaker 2 I'm just letting you know.

Speaker 2 Yeah,

Speaker 3 I know, but they're full, like when they have to pay for everything.

Speaker 3 I just want them to get there and, you know, have some spending money and maybe not have to work when they're in college. But right now, he doesn't have anything really.
Sure.

Speaker 3 And so we've recently even said if you can't figure it out with paying for for gas and saving 75% and giving, that we might even pull paying for insurance and let him take a year off of having a car.

Speaker 3 Hey, and we don't want to do that.

Speaker 2 Marie, Marie, you're not letting him have his full income at his disposal to do the things that you want him to do.

Speaker 2 75% is a high amount. Like even if you think about the three things you can do.
But if he's money, if he's giving the other 10%. 10%, he's got 15% of his income, Marie, to do what he needs to do.

Speaker 3 Right.

Speaker 2 So am I being, so is it no you're too yeah you are i think i think you are i think i think you're being a little too legalistic about it because at 18

Speaker 2 at 18 he's about to be off on his own and so he has to start to learn mistakes and maybe one month and i'll tell you this happened to 16 year old rachel when i got my checking account mom and dad were pretty hands off we turned 16 we got checking accounts and they put a they put they did put a small amount of money in every month but i it was not enough to do what you're saying even though they expected us to that we weren't allowed to ask them for money so if we wanted more, we had to go work.

Speaker 2 And we did. So, we went and did babysitting.
I started even doing live events, traveling. Like, I mean, I was

Speaker 2 doing stuff. Um, and there were times where he that Rachel, 16-year-old Rachel, would look up and it would be the 25th of the month, and I didn't have anything else on the calendar for work.

Speaker 2 And my tank was almost empty, literally. And being like, I can't, I don't have enough money for gas.
And like, well, did you budget? And I was like, No.

Speaker 2 And I had to have real-life consequences of T9 texting friends. That's all we had was T9 on

Speaker 2 our cricket phones to say, can you come pick me up for the football game? Right. I mean, like, so he needs to learn real life experience.
And I'll say this too, Marie.

Speaker 2 I think

Speaker 2 a mistake parents make when it comes to money and kids and kids, especially launching into the real world, is I think we want to equate it and we want to make it easy to say.

Speaker 2 And I'm not saying you're doing this, Marie, but just in general, like, I'm going to make them pay for their schooling because that's what my parents did. And it teaches them responsibility.

Speaker 2 Or I'm I'm going to make them do this. Um, and I'm not doing this for them because it's going to teach them responsibility.

Speaker 2 And that black and white thinking does not always work out because I know people that pay for their college and they're deeply in debt and triple with money, right?

Speaker 2 Like, it does not equate responsibility. And so, what I would be talking to him more and asking questions and being curious about is more of his character, right? Does he have self-discipline?

Speaker 2 Does he show up to work on time when he's supposed to?

Speaker 2 Is he responsible? Does he have self-control when it comes to spending?

Speaker 2 Like, these are the elements that you want to see magnified and how you money, how you manage money well as a 30, 40, 50, 60-year-old. That's the determination.
That's right. And so.

Speaker 2 And he's going to make mistakes and you can't stop it. You can't stop the mistake.
Yeah. And you can't pad him from it.
Yes.

Speaker 2 So we can't like set up enough rules where he's going to be perfect with money. Like that's just not a guarantee.
So I think you guys have done a fabulous job, Marie. Hear me say that.

Speaker 2 You've been so intentional. You've really like, you've worked hard.

Speaker 3 Well, we're trying, but I balance, like you said, it's hard.

Speaker 2 But I would lose. yeah.
So I would, I would loosen it.

Speaker 2 Only, I'm just saying that through my experience of being a teenager with Dave and Sharon Ramsey is they gave us more freedom to like figure it out, like do what you want to do because it's under their roof still, right?

Speaker 2 And then at 18, um, yeah, I mean, and beyond,

Speaker 2 you had to manage and budget and be wise with money.

Speaker 3 You wouldn't threaten to take their car insurance if they don't. aren't wise with their money this summer.

Speaker 2 I wouldn't because he's had, you've had such a very, very conservative amount of his money that he's even able to devote to that. So loosening the purse strings on how you do that.

Speaker 2 She let him have it. Let him have no money.
Yeah, let him have it.

Speaker 2 But what Rachel is saying is so true. I heard somebody say this and it's so true.
You don't teach your kid what to think. You teach them how to think.

Speaker 2 So right now you're saying, you've got to save 75% and that's how to do it. How to do it, but teach him what, which is, hey, you've got to create a budget.

Speaker 2 With the budget, you've needed, you need to be able to do three things. Give, give, save, spend.

Speaker 2 You get to figure out how much of that that you're doing, but just know when the spending time comes, you need to have enough there.

Speaker 2 And that way you're kind of like slowly removing your, you know, kung fu grip on how much he is saving. Does that make sense? Yes, it does.
Yes.

Speaker 3 And that is the goal. Absolutely.
That's the goal.

Speaker 2 And if you did that, Marie, if you went to him this afternoon and said, okay, we are not telling you how to manage your money anymore.

Speaker 2 We would encourage you to give, save, spend. And we want you to do all three things as your parents.
That's That's an expectation.

Speaker 2 But you have to figure it out. Do you think he has the capability and the tools and the maturity to do that? Do you think he could do it?

Speaker 3 I think he definitely can.

Speaker 3 But I mean, we're still an 18-year-old at times. Sure.

Speaker 3 He's definitely light. There's ability there for sure.

Speaker 2 Yeah. So I think, yeah.
So I would say I would.

Speaker 2 Want to have the confidence that he can do it under your roof on his own because when mistakes are made, you're there to help guide and direct. Not to shame and all of that, right?

Speaker 2 But to guide and direct. Because the truth is, you're not going to have that control over him in the next few months.
If he's graduating this May, that's he's going to be long gone.

Speaker 2 You know what I mean? In four months. So he's got to figure it out.
And under your roof, is the best safety net, Marie. You guys are doing a great job.
Thanks for the call.

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Speaker 2 Up next, we're going to New York, New York, and we have Tony on the line. Hi, Tony.
Welcome to the show.

Speaker 3 Hi, how are you?

Speaker 2 We're doing great. How can we help?

Speaker 3 So

Speaker 3 very quickly, my question is, I'm looking to buy a new home.

Speaker 3 I would like to be putting 50% of my take-home pay towards the mortgage of that home. I know you guys say to do 25%.
So before you say no, I'm hoping to you hear out my

Speaker 3 details on the numbers.

Speaker 2 Okay.

Speaker 3 So my wife and I have a relatively high income.

Speaker 3 but we're living well below our means. So every month we're saving

Speaker 3 easily what it would cost to be putting 50% of our income towards a mortgage.

Speaker 3 So combined, my wife and I are at about $3.50 a year.

Speaker 2 Okay. And how much of that do you take home?

Speaker 2 Like per month, what do you guys are bringing home?

Speaker 3 Right around somewhere between 18 and 19.

Speaker 2 Okay. Okay.
So you want to buy, have a mortgage that's $8,000?

Speaker 3 Probably closer to $9,000, yes.

Speaker 2 Okay.

Speaker 2 And keep pleading. And so we currently own.
So keep pleading your case.

Speaker 3 So we currently, so we currently own a home. It's an apartment.

Speaker 3 The mortgage on that one is about $5,000. So we easily make those payments.
And then on top of that, we are saving another $5,000 a month.

Speaker 3 This is, you know, that $18,000, $19,000 that we're taking home. That's after doing our 401k, you know, maxing out our 401k contributions, all of our, you know, all of that previous.

Speaker 2 When you say maxing out, is that 15%?

Speaker 2 Or you could give more and still max it out is what I'm saying.

Speaker 3 It's, I mean,

Speaker 3 the 401k contribution is like $23,000 a year, but we do both, we both do that. So it's $46,000 a year that we're contributing to our 401ks.

Speaker 2 Okay.

Speaker 3 So that's probably right around 15%.

Speaker 2 Okay.

Speaker 2 Keep going.

Speaker 3 So

Speaker 2 you're basically saying we are doing everything we should be doing and we don't spend anything. So we just have all this money and we'd rather spend it on a mortgage than something else.

Speaker 2 Exactly. You know,

Speaker 3 I have a car that's eight years old,

Speaker 3 fully paid off. We have no interest in another one.
We don't spend money on clothes.

Speaker 2 So my question is, Tony, yeah, if you guys have all this, could you put a larger down payment somewhere? And then that would lower your mortgage payment?

Speaker 3 So we're still, you know, we are, we do have about $300,000 that we're looking to put as down payment.

Speaker 3 You know, in addition to the income that I gave you, that's like my W-2 income. I do have a small consulting business where I make

Speaker 3 a very varied income every year. That's kind of unpredictable.
So, like, all the money that I get from that is just going towards the down payment fund.

Speaker 3 And then, once we do buy a second home, we would be

Speaker 3 dumping any money I get into that towards the principal.

Speaker 2 What's that? Hopefully, paying it off faster. What's the split on your income? Who makes what?

Speaker 3 I make

Speaker 3 probably about $250, and then my wife makes somewhere around $125.

Speaker 2 Okay. So here's where my mind goes.

Speaker 2 I can understand what you're thinking, which is as your income goes up, the percentage feels like it goes further, right?

Speaker 2 That 50% that you have left over feels like it goes further than if somebody were making $60,000 a year and said, hey, I want this to be 50% white. Do you see what I'm saying?

Speaker 2 So I understand where you're going there. Where my mind goes is

Speaker 2 I am of the mind where there's certain ratios that they're just locked in because if life changes, you're still protected.

Speaker 2 So if something happens and your wife is like, hey, now I'm going to stay home. And or if, do you see what I'm saying? Like if something changes.

Speaker 2 Y'all have kids, Tony?

Speaker 3 We have two already. So both, you know, they're both actually entering school.
So my wife's thinking about, you know,

Speaker 3 being more aggressive towards her career now.

Speaker 2 Yeah. They're both.
Which I hope she

Speaker 2 should. I just go towards if something changes, where does this put me? And these are just things to play out with your wife.
Where does that put me?

Speaker 2 The other thing I think about is just in general, percentage-wise. Okay, if I'm putting 50% towards my mortgage, and then if I'm giving 15%

Speaker 2 in my IRA contributions, Roth IRA 401k, retirement. And then let's say I'm a generous person.
So I'm giving at least 10%. Now I'm at 75%

Speaker 2 and I haven't saved for kids college. I haven't put extra on my mortgage.
I haven't done any of those other things. And so suddenly, no matter what, that pool does start to shrink a lot.

Speaker 2 And that's kind of where the methodology of that comes from. And I don't think that you have out-earned that feeling, if that makes sense.

Speaker 3 Okay. All right.
I mean, we did already take care of the kids' college, if that helps. So when they were both born, I put $70,000 into a 529 max out

Speaker 3 basically just to take that huge tax deduction.

Speaker 2 And so, how much will they have when it's time? You've played it out. I know you have.

Speaker 2 He's run his numbers, Tony.

Speaker 3 I'm banking on them each having at least 200.

Speaker 2 Okay.

Speaker 3 You know, go to the school they want, and I won't take out any.

Speaker 2 So, what do you want from us?

Speaker 3 Some sort of validation that I'm not crazy for thinking about putting half of my income towards a mortgage.

Speaker 2 It's just a, it's just a high percentage, Tony. I mean, regardless of what you make or what you're doing, it's just a high percentage going to one factor.

Speaker 2 And great, it's going to a great factor because it's, you know, your home and, you know, you're, you know, but, but even paying it off faster is going to be less because of how big the mortgage is going to be.

Speaker 2 Right. So it's a little bit of that idea of people like, well, I, well, the bank said I can qualify for X.

Speaker 2 I'm like, well, of course they did, you know, but in reality, like, what is the wisest with the pool of your paycheck when it hits your account to be able to live a full, well-rounded life to be giving, investing, saving, traveling, paying the house offer, like kids' college, which I know you have that taken care of.

Speaker 2 But like, there's so many things in life to do. And for half of your income to be going just to one asset

Speaker 2 just feels like, it feels constraints, right? And you can. And Tony, you can do it if you want to.
You can. Yeah, you're growing.

Speaker 2 But, but like to Jade's point, other two, like a smaller percentage of your income going to housing, again, it frees it up to be able to

Speaker 2 do other things.

Speaker 2 And if life happens, or when I should say life happens, I think we're probably a little jaded because majority of the calls on this show is, oh, well, I had a family deal that went south or

Speaker 2 I have a kid that's sick and someone needs to stay home.

Speaker 2 The job that was supposed to always be there, suddenly a pandemic hits and now that entire industry is wiped away.

Speaker 2 And now we have to figure out, it just puts you at a level of risk that is unnecessary. But Tony, if you are willing to take that and you want to, I have a feeling you're going.
Thank you.

Speaker 2 It's his life.

Speaker 2 You get to decide that, right? But what we've seen is what is the wisest way to handle your money. And that is the, that is the percentage that feels the wisest.

Speaker 2 So what I would probably say to you is, listen, if you guys are this disciplined and if you're not in a rush to move, just wait two years, pile up all that money, put in massive down payments. Yes.

Speaker 2 And then you're able to pay it off faster, pay off your home quick,

Speaker 2 very quickly. And again, it's not eating deeply into your income.
Yeah, you got to play both sides of the equation. If you say to yourself, we make so much money that we could afford to have 50%,

Speaker 2 then that means you also make so much money that you could save up a higher down payment so, so fast.

Speaker 2 And Rachel, my mind always goes to obviously when people call in, when the rubber meets the road, or you know, the worst happens. The thing that people are most concerned about is keeping their home.

Speaker 2 Oh, yes. That is the thing.
Like I go back to 2020 and when everything shut down and I know in our life,

Speaker 2 we were in entertainment at the time. And the first thing I thought about is, oh my gosh, like, I hope we get to keep our house because there was no work for those who are in entertainment.

Speaker 2 And we did the 25% rule.

Speaker 2 So, yes, I know COVID is an extreme example. It will never happen again.
Like, please God.

Speaker 2 Of course, I'll knock you on wood. But what Rachel is saying is that what you're saying is right.
Like, something, there's always something that comes around the corner that we don't expect. Yeah.

Speaker 2 And, you know, it's interesting.

Speaker 2 And again, New York, and if you are in the city, you know, if you're in Manhattan or any, any of the boroughs close to, you know, in New York City, it is some of the most expensive real estate in the world.

Speaker 2 So we do get a lot of people that are like in the Bay Area in California or this, or, and it's like, we can't afford it. But what it's, but so I hear that.

Speaker 2 I understand, which means there's going to be more patients. And again, we always say like, you're not exempt because you live in California.

Speaker 2 Like the math is the, you know, the percentages are the percentages.

Speaker 2 But they're for your good. They're not so we can win.
Yeah.

Speaker 2 And that's the thing, too, is, you know, again, we hear how much a house, we do usually get people that call them like it's 50% of my income is our mortgage.

Speaker 2 And I am so stressed and I don't know what to do, right? They're in a different position financially than you guys are, Tony, for sure, those calls.

Speaker 2 But my thing is, if that ever is a situation, I would rather be on the conservative side. Cause at the end of the day, it's just a home.
So like, let my money be a tool to create peace and not stress.

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Okay. Okay.

Speaker 2 In honor of Financial Literacy Month, today's question comes from Austin at Thomas Downey High School. He says, can you successfully build wealth without attending college? Oh,

Speaker 2 yes, 100% you can.

Speaker 2 Definitely. I think.
probably where that question comes from is, yeah, as a society, I do feel like we push everybody kind of down similar similar pathways.

Speaker 2 It's kind of like, yeah, you go to middle school, you go to high school, and then you go to college and then you get married and then you get a car and then you get a house.

Speaker 2 It's like, yes, all of the kind of these social targets that we try to hit.

Speaker 2 The truth is, though, you don't need to attend college in order to be successful. The truth is, you do need to be a continual learner.
right?

Speaker 2 You do need to make sure that you're extending your education in some form of fashion. That could be trade school.
That could be you getting some sort of a,

Speaker 2 you know, internship or studying underneath someone or learning on the job you know plenty of people get a great job and they're just able to work their way up because they've got that on the job training so whatever it is it's just making sure that you have the skills to do the work that you say you would like to do and that is not always a college pathway matter of fact i find a lot of times rachel in creative arts it's hard for college programs to keep up because things are always changing right if you want to be a you know a photographer it can be hard for a university to keep up with cutting-edge technology or, you know, if you want to be in film and things like that.

Speaker 2 So there's a lot of different ways that you can do this thing. And college is not always the pathway.
No. And we do find trade schools have becoming even more popular.
Like there's such a demand.

Speaker 2 And what they're paying in some of those fields is incredible.

Speaker 2 And even to your point, like we've even had callers on here, you know, they went to code school for two years and they're making $175,000 right now. You know, you're like, it's great.

Speaker 2 So yeah, I think the life can look so different.

Speaker 2 Yes. But I will say that like that time period between 18 and 21, there still is a big growth time, right? Of deciding, like,

Speaker 2 what do I even want to do? Do I have to use it? I think that's the hard thing about college.

Speaker 2 You do feel shoehorned into like, you got to pick a major, which is difficult because you may not know at that age, but yet it still gives you an environment to semi-grow up in and start to like know responsibility and all of that without having to like fully go straight into like the corporate world.

Speaker 2 Right. So there's, there's pros and cons to both.
We are not against college by any means, but we are against being stupid when it comes to going to college from a financial standpoint.

Speaker 2 So, don't go $200,000 in debt for an undergrad

Speaker 2 in English that you, you know, you, you can't make any money, right? So, it's just, you have to be smart about the ROI. That's the biggest thing.
And it depends on what you might want to do. Yeah.

Speaker 2 Some careers, you have to get a degree, right?

Speaker 2 I read this stat that says, if you're into entrepreneurship and you're like, maybe I want to start my own business, only 44% of entrepreneurs have a college degree,

Speaker 2 which is just an interesting interesting little tidbit there. There you go.
It's a great question. All right.
Next, we're going to go to Boston, Massachusetts.

Speaker 2 They just had the Boston Marathon last week to Paul. Hi, Paul.
Welcome to the show.

Speaker 3 Hey, thanks for having me.

Speaker 2 Absolutely. How can we help?

Speaker 3 Well, I am in baby step two. I'm paying off.
I have about $10,000 left.

Speaker 3 And I'm looking to be engaged.

Speaker 2 Nice. Congratulations.

Speaker 3 Thank you. I'm wondering what the best way is to go about setting up for a ring and whether or not I should pause my debt snowball or try to do them simultaneously.

Speaker 2 It's a great question. Okay, so how much money do you make, Paul?

Speaker 3 I make about $5,000 a month.

Speaker 3 After death take home. Usually around $5,000.
Yep, after debt take home.

Speaker 2 Okay, perfect. And how much debt do you have?

Speaker 3 It's $10,250,000 and some change.

Speaker 2 Oh, that's great. That's good.
I'm glad you didn't say $100,000. That may change my answer a little bit.
And how much are you looking at spending on an engagement ring?

Speaker 3 Well, part of the good news is I have a family heirloom.

Speaker 3 So it wouldn't be much because

Speaker 3 I just want to change the band. and maybe add something, but it shouldn't be much.
I'm thinking about trying to set aside $5,000.

Speaker 2 Yep.

Speaker 3 But just to have extra in case, because I really don't know how much it costs.

Speaker 2 Yeah, so you haven't priced anything out and looked specifically.

Speaker 3 Yeah, I haven't gone in in person to see what it costs

Speaker 3 to actually change that and get an hourly rate or an estimate at least.

Speaker 2 Okay. And when do you think the engagement, when do you want it to happen? Are you like, if I had the ring, it happened tonight?

Speaker 2 Or are you like, eh, we're going to, I don't know, maybe in the next two to three months? Or what are you thinking?

Speaker 3 Well, originally I had thought at the end of this year because by then I'll have paid off all of my debt.

Speaker 3 But being that it's not necessarily a lot of debt and

Speaker 3 I'd love to be engaged sooner if possible.

Speaker 2 Yeah.

Speaker 3 But, you know, I kind of just, I want to do it the right way. I want to do it smart so that I'm not, I'm not, I feel, I almost feel guilty bringing debt into the relationship, if that makes sense.

Speaker 2 Yeah. No, I hear that totally.
Well, we always tell people not to pause big life events.

Speaker 2 So getting married, getting engaged, having having a baby, like all those things, do those regardless of the debt, right? The debt can always get paid off.

Speaker 2 But when those moments come in life, like seize the moment, right? So get engaged. But

Speaker 2 from like a financial standpoint. Yeah.
I think, well, A, there's still a big unknown, right? You need to find out how much it's going to cost to do the things that you want to do.

Speaker 2 And then that'll give you kind of a starting place. But yeah.

Speaker 2 The average person spends about $5,500 on an engagement ring.

Speaker 2 That's kind of a national average, which really is keeping in line with what we would say here, which is to spend about a month's salary on it, no more than two months, which is about what you make.

Speaker 2 So you're kind of right in that normal threshold there. So the next step is, yeah, go to the jeweler and find out what it would take to do the new band and everything like that.

Speaker 2 And my guess is you're probably going to be right there or maybe under since you've already got the stone.

Speaker 3 Yeah.

Speaker 2 Unless you wanted to add a little something, something. Yeah.
So I would be okay with you.

Speaker 2 I don't want it paused for too long of a period of time. So if there's like a side hustle you can pick up or something.
Yeah.

Speaker 2 But you could be saving for that on the side while I would say simultaneously throwing something at the debt just to keep the momentum going.

Speaker 2 But yeah, but that's probably what I would do. Just split it in half.
Let half your margin go to debt, half go to saving.

Speaker 2 And if you feel like, golly, I need to speed this up, see if there's extra income you can make to do that. And don't feel guilty at the end of this.

Speaker 2 If you still have a little bit of debt, that's going to come into

Speaker 2 the,

Speaker 2 listen, it's not going to be 10,000. And that's pretty pretty good based on the things i hear around here so

Speaker 2 i wouldn't beat yourself too much too much up yeah definitely i mean this is um it is so it is so normal it is so is your fiancé uh will she have any debt going into the to the marriage uh no she actually she paid off all her student loans um well i shouldn't say no she does have two two credit cards which usually she has around a thousand dollars all together on those.

Speaker 3 I mean, she, I would like to, she, like, we've talked about our finances a little bit. Um,

Speaker 3 and she, she's really interested in trying to combine our finances and, and work towards, you know, being debt-free.

Speaker 3 Um, but we're trying not to,

Speaker 3 we're not combining finances before we're married. We want to, because we have had family members who, who unfortunately have been divorced, and we, we just want to make sure we do it correctly.

Speaker 2 Yeah, that's exactly what we would say too.

Speaker 2 Don't combine until after you're married, but have, you know, a full picture of both of you guys from a financial standpoint with numbers going into the marriage?

Speaker 2 Which sounds like you guys, you know, are talking about that. And then just the value system, too.

Speaker 2 Like, that's the other thing we bump up against a lot: couples struggle getting on the same page after marriage when it comes to money, especially if one of them has changed course and they're like, oh my gosh, now I want to be debt-free.

Speaker 2 And it's been, we've been married for 10 years and that's never been a goal. And now it is.
You're kind of shifting a big perspective.

Speaker 2 So the fact that you guys can start on the same track, you know, from a mental standpoint, right a value standpoint is a huge advantage paul for sure yeah that that that money piece is big uh getting married money piece is big um how you want to raise your kids is big what you guys believe like as far as like religious views how we want to you know all of that stuff if you can start digging in on that better now than later for sure yeah so great paul well congratulations so exciting it's one of the most exciting things

Speaker 2 it is a great time of life yeah the engagement and the wedding the marriage, the kids, everything that follows. It's a beautiful life, Paul.
So I'm excited that

Speaker 2 you have someone. So, yeah, I wouldn't stress too much about it.
I'd say, yeah, do what you can. Buy that band cheaply.
If you can, it'd be nice. I got a great stone, apparently.
It's awesome.

Speaker 2 Thanks, Paul, for the call.

Speaker 2 All right, Dave, you have some strong opinions.

Speaker 2 Possibly, yeah. I think so.
Okay, because you really prefer credit unions over big banks.

Speaker 5 Well, credit unions, for one thing, are

Speaker 5 non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.

Speaker 5 So you get better interest rate on savings, cheaper checking, and so on, that kind of thing.

Speaker 5 And but that's what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.

Speaker 5 So I find very few credit unions that aren't very customer-centric.

Speaker 2 Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.

Speaker 5 They're the right kind of people with the right kind of values. And they've done a really, really good job with customer service.
And the deals that they're offering, the Ramsey tribe is incredible.

Speaker 2 Yeah, absolutely. And I love it.
The things that we teach, they so line up with. And you're right.
Their customer service is unbelievable. Winston and I just signed up and we got an account.

Speaker 2 And I'm not kidding. It took less than five minutes.
It was so user-friendly. Like the step-by-step approach was unbelievable.
And then the next day, my phone rings and it says Fairwinds on my phone.

Speaker 2 So I answered it and talked to someone there. And they said, yeah, they give calls to every new customer.
And so, again, they just really care about your experience. And I, I so, so appreciate that.

Speaker 2 Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs.

Speaker 5 Hey, you guys know how much I hate banks in general. And so, for me to do this is a big deal.

Speaker 5 Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.

Speaker 2 Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So, go to fairwinds.org/slash Ramsey.

Speaker 6 Fairwinds is federally insured by NCUA.

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Speaker 2 If you are listening to this on podcast or watching on YouTube, we mentioned in an earlier segment, Jade, that, you know, about college and school and all of it.

Speaker 2 And it is Teacher Financial Literacy Month. Or Teacher Appreciation Month and Financial Literacy Month.
And we

Speaker 2 just appreciate teachers around here. I know Jade and I, we both have kids in school.

Speaker 2 And when you have teachers who are part of your own story from being in school, and now if you have kids that are in school, they're just such a gift.

Speaker 2 Like these teachers are just absolutely incredible. We love them.
So we do want to honor them. So make sure to enter our teacher appreciation giveaway at rs.com slash teacher.
Yes.

Speaker 2 And we want to celebrate you. So make sure to check that out, teachers.
All right, let's go to Sarah in Philadelphia. Hi, Sarah.
Welcome to the show.

Speaker 3 Hi, thanks for having me. Absolutely.

Speaker 2 How can we help?

Speaker 3 Okay, so

Speaker 3 just really quick. So when I turned 18, I got married to a man who's about 14 years older than me.

Speaker 3 We ended up getting a divorce. It was like a really controlling situation.
But in the midst, I did get pregnant right as soon as I got married. So I have a baby now.

Speaker 3 She's going to be five months in May.

Speaker 3 And

Speaker 3 so he doesn't help financially. I did stay home after I had the baby, but I was leaning on him financially.
And even when we were together, I didn't go to school.

Speaker 3 So the good part is I don't have any debt or anything, but the bad part is like I don't have like a career path because I went right into being like wife and mother and everything

Speaker 3 and now I just like need help with like yeah do you

Speaker 2 where's your your parents your family situation through all of this from when you got married to now

Speaker 3 so um we got married and like my parents were not super happy with the idea of me getting married. Not because they didn't want me getting married young.

Speaker 2 I think in the circumstances. Yeah.
And they probably picked up some things around town that they probably didn't like being a 34-year-old, you know.

Speaker 3 Exactly. And then

Speaker 3 so we ended up

Speaker 3 getting a divorce. So I'm staying at my parents now because he's getting out of our house.
Okay. Wow.

Speaker 2 Wow. Yeah.
I'm sorry. Yeah.
And he, it's okay.

Speaker 3 Actually, his family has been, not his family, his brother and his brother's wife have been great throughout this.

Speaker 3 They let me stay in their house for two weeks without like charging me anything. They were super helpful.
When everything happened, they were like, listen, whatever you need, we're here for you.

Speaker 3 Like his brother will, his brother's wife will call me every day. His brother was always like, hey, if you need any help with the baby, like we're here.

Speaker 2 It's great.

Speaker 2 You do need that community right now.

Speaker 2 Like if you have that to depend on, I would, because the truth is, if you are going to get out of this, it's going to require you working some hours, like working a full-time job probably to support your family and child care is going to be a huge piece of this

Speaker 2 so the question then becomes is what can you do for money right

Speaker 3 yeah so thankfully i'm staying home with my mom like my parents are thankfully well off so like it's a place that i can stay and i don't have to worry about like well what about the bills we're about you know my parents are like okay with all that stuff it's just like i just don't know where to go from here what you know it's not like i'm in any danger right now I just don't know.

Speaker 2 Yeah, the next steps for you. Right.
In life. Yeah.
Turning, because you'll be, yeah, turning 20 and all of it. Okay.
So I,

Speaker 2 just because of what you've gone through, Sarah, from a divorce standpoint, having a child, and I never want to minimize someone because of their age, but I am going to say because you're 19.

Speaker 2 I mean, like you're a kid, right? You're still a teenager, technically 19, right? So

Speaker 2 all of those. factors, I do want to give you so much grace.
Like you're still a teenager.

Speaker 2 You're still figuring out how the world works, let alone the responsibility and the events that you've walked through through a divorce already. Right.

Speaker 2 So, like, just we have a lot of time here, Sarah. There is no, I do not feel like this is a rush situation.
Uh, there's a lot, a lot of grace here.

Speaker 3 I'm like sliding down

Speaker 2 like a hill, you know? Oh, yes. Yeah.
If you feel probably out of control, so I understand that. Yes.
But you're not sliding down in an unresponsible way financially or something, right?

Speaker 2 You're, you're fine. Okay.
So I just want you to. No, yeah.

Speaker 3 Like, I have I have no debt. If I have a lot on credit cards, it's like $40.

Speaker 3 Like, I have no debt.

Speaker 2 I have money saved up. I think I don't know what to do.
Yep. Is the divorce final? Is all of that done? Any legal bills or anything outstanding there? So that's finished.

Speaker 2 And does he have any responsibility like from the divorce? Any child support coming in?

Speaker 2 She has to file still. I'm sorry.
Oh, okay. She has to file for child support.

Speaker 3 So this is only, yeah, this has only been a month. I have to file still.

Speaker 2 File for divorce or child support?

Speaker 3 Yeah. file for just divorce.

Speaker 2 Oh, you're not. Okay, so it's not even.
Okay. Yeah.
Okay. All right.

Speaker 3 Yeah. So yeah, that's why I'm like, I feel like everything is a good idea.

Speaker 2 Do you have a good lawyer? Do you, do you have someone?

Speaker 3 I don't.

Speaker 2 Legal representation? Okay. So that would be step one.
That's going to be step one. Yeah.
Is to find

Speaker 2 someone in your area who's who's. who's a great divorce lawyer.
I mean, you're going to want somebody

Speaker 2 there supporting you and representing you. So I would honestly, Sarah, I would make that step one is to find that person.

Speaker 2 Um, because when you file, all this is about to, it's about to snowball into a lot of things, and um, and you're going to probably you or your parents will be paying for some of this too.

Speaker 2 So, so that would be my first goal: find somebody and then figure out, okay, from a money standpoint, how is this working? How, yeah, how much are we going to have to have?

Speaker 2 Because that's going to allow you to know

Speaker 3 where he hasn't helped with the baby since she was born.

Speaker 2 And he might, he might, even more, It'll probably take a court order for him to. And even still, he might not.

Speaker 2 And so for you, I think.

Speaker 3 Yeah, I'm just trying to figure out like what I do without, like, I'm trying not to depend on him at all.

Speaker 2 Don't know. Well, don't depend on him.
Don't depend on him right now. What Rachel said is right.
First step, you get the divorce lawyer. Second step, you sit down with mom and dad and say, okay,

Speaker 2 we're getting the divorce lawyer. How do we pay for this? And find out what help you have and what help you don't have.

Speaker 2 And in that same conversation, that's also a good time to figure out, okay, mom and dad, like this thing is happening. I don't live with him anymore.

Speaker 2 And kind of figure out what, create a plan and a vision for the future, right? It's how long can I stay here? What's that got to look like?

Speaker 2 And guys, everybody set really clear expectations of what that means. Do I, do, can I stay here? for a year? Can I stay here and really talk this through?

Speaker 2 Because then when you know what the plan is, you'll feel better. And then you'll know what you can actually focus on.

Speaker 2 If you know that you have 12 months and then at the 12-month point, your parents expect you to either start paying some sort of rent or I don't know what you'll decide, but then that will inform, okay, what do I need to do?

Speaker 2 What do I need to do next?

Speaker 2 Yeah. And I would say, too, you know, because we always do talk about that expectation, like what Jade's saying.
And in this case, Sarah, you know, maybe

Speaker 2 that expectation is dependent upon your next step and how long the divorce takes.

Speaker 2 It may even be of if you need to go back to school.

Speaker 2 And while you're in school, you can stay with them. Right.
So it's kind of mapping out. And again, this is not in a rush, Sarah, for you.

Speaker 2 I really don't feel like you have to do all of this tonight by any means, but this is kind of your next big steps is finding the lawyer, filing, starting that process.

Speaker 2 And then in the meantime, because it's good for you, Sarah, to be thinking through what does my future look like, to Jade's point. So what is the next steps? What does it look like?

Speaker 2 And just paying a broad stroke of like, okay, if I'm 23, what does it look like for me to self-sustain? That's right. To pay rents, all that.
Do I need a college degree to do that?

Speaker 2 Do I love, you know, accounting? And I probably need to go get, you know,

Speaker 2 a degree in that.

Speaker 3 I've already worked as like a secretary for several construction businesses. I like doing that.

Speaker 2 Okay. So admin, yeah, administration is probably really high up in your skill set.
Yeah.

Speaker 2 So finding those kind of things and then backing out from there and saying, okay, you know, would I be able just to plug in with one or two businesses around to be able just to start working, you know, maybe in the next six months?

Speaker 2 And that's great. Or do I need to go go back to school, right?

Speaker 2 And then, with your parents being that safety net for you right now, how much are they willing to be a safety net financially for you right now?

Speaker 2 And from a time housing perspective, like what Jada said. But, Sarah, stay on the line.
I'm going to get you Ken Coleman's book, Find the Work Your Wired to Do, because that'll help in that mindset.

Speaker 2 And I think it could just be refreshing to you to have a level of grasp and control over your future.

Speaker 2 But I am so sorry about all of this, and we just pray that it's a smooth process for you from here on out. Thanks for the call.

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Speaker 2 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 amazing relationships.

Speaker 2 I am Rachel Cruz, hosting this hour with my good friend and best-selling author, Jade Warshaw, and we are answering your questions about life and money. So give us a call at 888-825-5225.

Speaker 2 And if you can't get through, we've been hearing some of that rumbling. So it's just the lines are full all the time.
So we have an entire messaging system that you can leave the message.

Speaker 2 The producers can call you back to and hopefully even schedule you maybe for a future show. So we'll see.
Definitely. But again, the number is 888-825-5225.

Speaker 2 All right, let's have Kate kick us off this hour in Washington, D.C.

Speaker 2 Hi, Kate. Welcome to the show.

Speaker 3 Hi, guys.

Speaker 2 Hello, hello. How are you?

Speaker 3 Doing all right.

Speaker 3 Just had a quick question about my 401k.

Speaker 3 I'm 38 years old. I was diagnosed with stage four breast cancer in 2020 and have been doing really well on maintenance therapy since then.
So feeling much better now.

Speaker 2 Okay. I'm so sorry.

Speaker 3 Yeah.

Speaker 2 It's been a journey. Yeah.

Speaker 2 Are you single? Do you have a family?

Speaker 3 I am married, but I don't have any children.

Speaker 2 Okay. Oh, my gosh.
And so, how are you? And you're doing okay right now, you said?

Speaker 3 Yeah, things are going well. I've been on a maintenance line for about four years.
It seems to be doing a really good job.

Speaker 2 Really good. Gosh, Kate.
Yeah, that's great. It's tough.

Speaker 2 So, how can we help?

Speaker 3 Well,

Speaker 3 obviously, with a stage four diagnosis, there's a lot of questions that come up about longevity and finances and all of that. And I'm just curious

Speaker 3 how to handle 401k contributions

Speaker 3 in the light of the fact that we're dealing with something that may

Speaker 3 make my life shorter than

Speaker 3 most other people.

Speaker 2 So what are you doing currently? Let's start with that. Kind of give us a snapshot of where you are financially.
Do you have any debt? If so, how much?

Speaker 2 And what are you contributing so far to a 401k, if at all?

Speaker 3 yeah so um personally i make about eighteen thousand dollars a year um my husband and i have a mortgage and we have some car debt but we'll be paying that off at the end of the year um other than that we don't have any uh credit card debt we don't have any major outstanding

Speaker 3 um issues with any of that um

Speaker 3 And I tend, I'm contributing to the 401k now, but it's not the full 15% that Dave recommends in his baby steps plan.

Speaker 2 Okay.

Speaker 2 And earlier you said you make 80,000. What's your husband make?

Speaker 3 About 100,000.

Speaker 2 Okay, so 180 total.

Speaker 2 Okay. And the car is the only thing between the two of you, and you're contributing to a 401k.
Is he contributing to one as well?

Speaker 3 Yes, he's

Speaker 3 significantly more than that, like what's recommended.

Speaker 2 Okay. For his plan.
And so do you guys, as a couple, do you kind of

Speaker 2 view your finances together or do you kind of do it separately and you're just telling us separately for this call?

Speaker 3 Oh, no, we definitely do all of our finances together.

Speaker 2 Okay, cool. Um, okay, so technically, if we're talking about how can we kind of set you up in the best possible way, um, the first thing, yeah, we would clear out that debt.

Speaker 2 So, how much do you owe on the car?

Speaker 3 Um, between it's two cars, uh, between the two of them, it's I think

Speaker 3 maybe $19,000.

Speaker 2 Okay, so logically, I mean, you could clear those out pretty quickly. Yes.
Within the year.

Speaker 3 They're already on track to be paid before the end of the year.

Speaker 2 Perfect. And then after that, yeah, do you guys have any money saved anywhere else?

Speaker 3 Yes.

Speaker 3 Following Dave's steps, we have our three to six months savings plan in place.

Speaker 2 Oh, so you already have that. You already have that.
Okay. So essentially, you could.
Pull from there, pay off these cars, and then stack it back up. That's probably what I would do today.

Speaker 2 stack it what do you mean stack it back up so you said you have three to six months already set aside yes so is it more than 19 000 oh yes okay so i'd probably pull that money out today and pay these cars off and then i'd stack back up to where you had it

Speaker 2 okay does that make sense that way you're free and clear today that is stress off of your plate that you never have to think of ever again

Speaker 2 Right. Right.

Speaker 3 Do you need becomes, what do we do in terms of spoiling contributions to my account?

Speaker 2 So at that point, now we're into baby step four, where we're putting away 15% of your total income.

Speaker 2 So however you guys want to divvy that up, if he has a better match or something like that, you could do, you know, do his first. But the goal is of your gross total annual income, you're doing 15%.

Speaker 2 Yeah. What is the doctor? But you're saying from a health standpoint, Kate, right, that should I be contributing if I'm not going to be able to use this money at 59 and a half?

Speaker 2 is that what you're thinking have the doctors given you any um

Speaker 2 indication do you i mean do you have any did they give you any expectancy of you know people live like this for the next for 20 years or have they get you know what i mean

Speaker 3 um yeah it's tricky right because we don't um in the cancer universe it's very hard to tell um

Speaker 3 we have people who live a long time and people who don't and the idea of course is that you're always wanting to be one of the people who lives in the right time. Right.
But,

Speaker 3 you know, I'm just thinking about my husband and taking care of him so that if it turns out that it's not

Speaker 2 setting him up so that he'll be all right. Yeah.
Really tough. Well, you know, what I,

Speaker 2 from talking to you, I, and again, you're, you're in these appointments.

Speaker 2 I mean, I've, I, I feel like I want to be so sensitive to what you're hearing and your appointments, but if I were in your shoes and from what you've told me on this call,

Speaker 2 I think from a

Speaker 2 disciplined standpoint, I think you guys are going to be in a really good spot. I mean, you guys are already, you know, have a great plan in place, right, to

Speaker 2 be moving forward on the baby steps. And so if that 15%, if you kind of just felt in the back of your head, like,

Speaker 2 I don't know, like if I'll, if I'll see that money and I think we could maybe use that in a mutual fund or something, you know what I mean?

Speaker 2 If there's another way to invest that and it's not specifically in a 401k or a retirement account that locks it up till you're 59 and a half without penalty, and there's another investment vehicle that you would rather use, thinking maybe, you know, if something were to happen and, you know, something turns, you know, for turns south and we were like, we're going to use some money to go do something with, right?

Speaker 2 That you don't feel like it's locked up where you're like, oh, gosh, because if it is in the 401k.

Speaker 2 Yeah, it's locked away till 59 and a half. Yeah, and you could take it and he could take it out or you could take it out with some penalty.

Speaker 2 So it's not the end of the world by any means, but to get the most use out of it um if you were to ever use it before 59 and a half it would be a different investment vehicle does that make sense kate i feel like i just talked in a circle but no it does and that's incredibly helpful just thinking about if it's you know if we're not putting it in one place then maybe there's

Speaker 2 more yeah and i don't think there's a wrong yeah i don't think there's a wrong answer jay i'd be curious because i see like if you did the 401k and you said you know what i'm gonna just have high hopes for my life and i pray that i live till i'm 75 80 85 right right?

Speaker 2 With this for the rest of my life and I'm going to beat it or I'm going to go into remission, right? And you just were like, I'm going to go 401k. Nothing bad's going to happen with that, right?

Speaker 2 And then if something did happen, Kate, then either you could pull it out with penalty and at that point in life, you know what I mean? It doesn't, I mean, it doesn't matter.

Speaker 2 Or you, or you pass it on to your husband and he could use it later. Yeah.

Speaker 2 My brain is just thinking about if some treatment popped up that your insurance didn't cover and you wanted to go for it to have some cash there that you could go to Switzerland and do some sort of infusion.

Speaker 2 Do you see what I'm saying? That's where my brain goes. So decide how much that is.
And yeah, I'd put that aside.

Speaker 2 And have that liquid instead of in a 401k in another investment, not liquid, sorry, but just another investment vehicle, like an index fund, Vanguard, or a mutual fund or something versus it tied up in a 401k.

Speaker 2 Thanks, Kate, for the call.

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Speaker 2 Up next, we have Marty in Spokane, Washington. Hi, Marty.
Welcome to the show.

Speaker 3 Thanks for taking my call.

Speaker 2 Absolutely.

Speaker 2 How can we help?

Speaker 3 I just recently found out that when I go to file my taxes, I am going to owe roughly $140,000

Speaker 3 in taxes due to an early withdrawal I took out of a 401k last year okay

Speaker 3 and

Speaker 3 to put down on a house

Speaker 3 so my question i'm trying to figure out where the best place to pull money from either a home equity loan um really don't want to do a payment plan with the irs but i just don't know the best path forward did you know that this would be that you would have to pay taxes on that money when you pulled it out did you know that this was coming

Speaker 3 so i there's no blame. I did

Speaker 3 talk to

Speaker 3 several individuals when I pulled the money from the 401k about how I wanted to pay all the fees and taxes up front. I didn't do my part on the research and I was misinformed that it had been paid.

Speaker 3 It was all caught up and I didn't realize

Speaker 2 you're going to be near that much.

Speaker 3 And I didn't realize it hadn't been done until I went to file my taxes.

Speaker 2 Oh, gosh. I'm sorry.
You know, Marty, honestly, I'd probably go pull a personal loan for it. I think I would rather owe a bank than the IRS at this point, especially for the amount it is.

Speaker 2 It's going to take you a while to write pay it off. Because how much do you make a year?

Speaker 3 Roughly $130,000.

Speaker 2 Oh, man.

Speaker 2 How much did you pull out?

Speaker 3 I pulled out $400,000 because I wanted roughly $300,000 for a down payment because I want to pay the house off. I've been going through the steps.
I don't have any other debt.

Speaker 2 Did you pay the house off? Is the house free and clear?

Speaker 3 No.

Speaker 3 No, I still owe $250,000, $2.56 on the house.

Speaker 2 Gracious. And do you have any money in any other investments that are not retirement, non-retirement investments?

Speaker 3 I have a, no, I have a Roth and a traditional

Speaker 3 IRA. And then I have about $60,000 in savings, which is my savings fund.

Speaker 2 Okay.

Speaker 3 And I don't know if I should tap into that.

Speaker 2 I don't want to not,

Speaker 2 I would.

Speaker 2 I would. I would for sure.
Yeah.

Speaker 2 Yeah. To Rachel's point, I would clear that down to a thousand bucks today.
And

Speaker 2 you'd have about an $80,000 loan at that point. And because I was going to say, even with your income, I don't know if you'd qualify for a personal loan in a bank.
I mean, depending on the situation.

Speaker 2 So

Speaker 2 I'd try it, though, once you've knocked it down.

Speaker 2 Yeah. I would rather have an $80,000 loan than a.
$140,000. So yes, Marty, that savings is what we would say would go.
Because I would put this in baby step two

Speaker 2 in the debt snowball, and you have no other debt. And so, but I would, I would, I would earmark this like that.
I mean, that, that, that's,

Speaker 2 especially IRS stuff, you want them out ASAP. So, um, yeah, I would pay down as much as I could right now

Speaker 2 and then take the rest out

Speaker 2 just from like a credit union or a bank and do a personal loan versus having a payment plan with the IRS. And it's going to be easier for you to manage because the IRS, like, they're hard to contact.

Speaker 2 They don't contact you via email. They, it's only mail.
Like, the way they do it is. And they can do stuff with like garnishing wages.
Yeah, it just makes me nervous. I don't like it.

Speaker 2 And from an interest, I would not do it. I would not do an HELOC.
I would not put that in the house.

Speaker 2 No more debt on that. On that.
I would not put the home at risk there. And with HELOCs, the interest rates are sometimes insane.

Speaker 2 So I think, I mean, my best bet would be, it would probably be a personal loan. I think that would be

Speaker 2 the best route. Yeah.
I said no more debt, but I meant no more leveraging very important things for debt.

Speaker 2 No more borrowing from your 401k and no more leveraging your house for sure. Oh, I'm sorry.
Does that help?

Speaker 3 It does. And that was where I wasn't sure if taking the equity of the home was better or just trying to get a personal loan.
Yeah.

Speaker 2 For sure. Yeah.
Yeah. I would go the personal loan route.
And again, we're not big on the, well, we real, we rarely talk about like borrowing money, but this would be a case.

Speaker 2 You're already in the hole. So rather be in the hole with a bank than the IRS at that point.
And, you know, and your credit card interest rates and stuff could be be up where to 18, 20.

Speaker 2 You don't want it on a credit card, you know, like don't put it on the credit card, you know. So, again, personal is probably going to be your best bet.
So, I'm true. Oh, this is that's terrible.

Speaker 2 I'm sorry, that's bad information. Yep, that's not fun at all.
I'm sorry about that. All right, let's go to Justin in Chicago.
Hey, Justin, welcome to the show.

Speaker 3 Hello, thank you for having me on.

Speaker 2 Absolutely. How can we help?

Speaker 3 So, my question is, I'm wondering when to call it quits on a struggling business.

Speaker 3 Um, I've been helping my uncle with the family business doing masonry restoration, the construction company for about four and a half years now. And when we're working, we do great.
We're efficient.

Speaker 3 We're ahead of schedule. We're

Speaker 3 under scope on material. We do great.
And the clients are very happy, but that's when we have the leads.

Speaker 3 And often all of our profits go to chasing down more leads that then just kind of coast us to the next one or the next one. Feels like I'm a hamster on the wheel.

Speaker 2 Never gaining that traction.

Speaker 2 Are you guys behind on anything or is it pretty much like you're just kind of making it and there's not much profit 100 dead free we're just yeah catching up month to month okay so is it because it costs you so much to acquire leads is that the problem or it's just that you're not making enough after a job to do more

Speaker 3 um we are just struggling with lead acquisition i guess um

Speaker 3 We neither of us are really big experts in marketing specifically. So we've tried all sorts of avenues.
And over the past five years, nothing really seems to produce continuous leads.

Speaker 2 Are you working with, are you partnering with the other businesses in your area? Like, are you

Speaker 2 partnering with realtors and partnering with interior designers and partnering with people who are

Speaker 2 working with people who will need your work? Does that make sense?

Speaker 3 We've tried reaching out,

Speaker 3 but we,

Speaker 3 the type of work that we do, specifically restoration work, is very like residential focused

Speaker 3 So homeowners and like current existing homeowners that need to fix their house or superintendents and

Speaker 3 occasionally general contractors that do restoration work and we've done a lot of business and business cold calling cold emailing you know even going up to businesses and Trying to build those relationships, but it feels like we have a curse on us that nothing is working out.

Speaker 2 Yeah, did you guys start this four and a half years ago or you just came on board four and a half years ago?

Speaker 3 I came on board four and a half years ago.

Speaker 2 How long has the business been going? I've been doing it for 25.

Speaker 3 Oh, 25 years.

Speaker 2 Yeah. And how's, I mean, how's he been? Has he been making a good living? And then it kind of just went downhill the last few years.
And just like, um, from a lead standpoint, or how has he survived?

Speaker 3 He was on the wheel long before I was.

Speaker 3 So

Speaker 3 I came on with some experience working with a general contractor before,

Speaker 3 helping him with his estimating payroll and, you know, kind of construction bookkeeping. And I thought I could help him and while I have been able to increase um our growth profits

Speaker 3 the lead generation part just still isn't happening is still a struggle

Speaker 2 um is there any part of you that you want out just in general like are you enjoying this or are you like no i want to make this work because it's such a it's been such a great thing

Speaker 3 I've been I've been doing a lot of entrepreneurial stuff you know since high school and I do enjoy taking part of building a business, but it is a bit exhausting.

Speaker 3 Me and my wife are on baby step three. We have a four-month-old, and I'm starting to think about our personal financial future and how much longer can I go on

Speaker 2 this business.

Speaker 2 Could you hire a marketer? Do you have, I mean, could you guys hire somebody to help in that area?

Speaker 3 Yeah.

Speaker 3 We tried that.

Speaker 3 about we started about six months ago

Speaker 3 and we just had to let him go because it was not working.

Speaker 2 Yeah, there was no more, you weren't getting the leads you needed kind of thing.

Speaker 3 We weren't getting the leads we were needed.

Speaker 2 Yeah, so

Speaker 2 Henry Cloud wrote a book called Unnecessary or Necessary Endings, not unnecessary, necessary endings.

Speaker 2 And it's, and basically one of the points of that book that I think is so good is like, when you just don't have hope that the future is going to look different, that something needs to end.

Speaker 2 And so he talks about it more from a relational standpoint, but this is kind of more of a business standpoint.

Speaker 2 So if it's been the struggle for four and a half years and you don't see something changing from a marketing standpoint and whatnot, you know, there, then maybe that's a discussion you and your wife kind of have.

Speaker 2 But the problem I have with it, Justin, is that like when you guys are doing the work, you're doing great. You're not losing money on the actual

Speaker 2 business end, right? When you have a job, you're doing it. Yeah.
You're doing it within scope and smart and everything. Maybe there's just not a huge demand for the type of work that you're doing.

Speaker 2 Maybe you need to pivot into something that more people want within masonry. Yeah, within the same skill set.
That's a great, yeah.

Speaker 2 So maybe it's more expanding and not narrowing the business idea because the business itself seems like it's doing great. It's just getting those leads.

Speaker 2 That's important.

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Speaker 2 I would really encourage you to get on a budget and also join our team because they are hosting a free budgeting training session this month. There's a couple of them you can actually look into.

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Nice. All right.
Jade, look at that.

Speaker 2 We're going to go all the way to Berlin,

Speaker 2 Germany.

Speaker 2 International. Yeah, talk to David.
Hi, David. Welcome to the show.

Speaker 3 Yeah, nice to meet you guys.

Speaker 2 Yes. Sorry for my English.

Speaker 3 And thank you for having me.

Speaker 2 Yes, absolutely. How can we help today?

Speaker 3 Yeah, at first, I want to tell you a bit about my situation.

Speaker 3 I'm at baby step three

Speaker 3 and starting for the fourth one. And I'm asking for advice living with my mom at 30 years old in one house.

Speaker 3 I help us to

Speaker 3 pay off the mortgage. It's about 70K.

Speaker 3 And yeah, should I

Speaker 3 put my energy in our

Speaker 3 relationship and the house? Or should I live on my own and create my own

Speaker 3 lifestyle?

Speaker 2 Yeah, so you are contributing right now to the mortgage. Is that what you said

Speaker 2 yes okay and is that like kind of your rent for living there is that kind of what she's charging you are you just doing that because you think that it's you know a great um nod to your mom to help her with the mortgage

Speaker 3 no no uh she is helping me because the cost of living uh outside is is more than uh uh than i i paid at home okay gotcha so we are helping each other uh so i wanted to force her uh to to put more

Speaker 3 payments into mortgage. And

Speaker 3 that's my goal, but I don't think it's working out. And so I want to ask for advice.
What should I do? Should I stay at home and build my wealth?

Speaker 2 Or should I?

Speaker 2 It's only her name on the deed, right?

Speaker 2 And on the mortgage, right? Yeah. Okay.
And would she be able to cover the mortgage

Speaker 2 on her own when you move out?

Speaker 3 Yeah, but the uh the l the lifestyle uh I would say uh I would say so she's single and uh I want to yeah, I I'm paying uh a little uh a lot of the bills.

Speaker 2 Okay, so y she's dependent upon your income to a degree.

Speaker 2 Yeah, okay. Oh, interesting.
Yeah, so that can be that can be tough. And are you wanting to move out, David?

Speaker 2 Are you like, okay, I'm ready to be on my own, but I don't feel like I can and what's stopping you is that that dynamic?

Speaker 3 Yeah, I I wanted to to save money.

Speaker 2 Yeah.

Speaker 2 Absolutely. I want to be

Speaker 3 because at the at the dead end, when anything is happening,

Speaker 3 the mortgage will be the same when I'm alone. So

Speaker 2 I have one sister,

Speaker 3 but there is some time to

Speaker 3 get together and make...

Speaker 3 make the house debt-free.

Speaker 2 I mean, I think you have to sit down and talk to your mom and say, Here's here's

Speaker 2 here's what's going on. I understand that you're dependent on me and what I've brought to the table financially for the mortgage and for lifestyle.

Speaker 2 But I gotta, like, I need to move out and live my life. And now you guys can start that now, now you put the reality on the table, right? It's not just this thing that you guys aren't talking about.

Speaker 2 You've said it, and then you guys can start a timeline of here's what I'm gonna start to do. I'm gonna start to look for other places.

Speaker 2 Maybe she can start to look for, I don't know, maybe there's some sort of a situation where somebody could rent a room out of her house i don't know but i think that you guys have to start figuring out figuring out what that is because the truth is is she is she healthy

Speaker 3 yeah for sure uh she she is uh retiring and uh she has her own business okay with uh yeah

Speaker 2 that's great that lets me know she's an independent woman she's able to take care of herself she just hasn't had to yet you know what i'm saying like she has not had to bring in the extra money and she hasn't had to do that because you've been there.

Speaker 2 But if you step away, my guess is she'll figure out a way to make it work. And that's not necessarily on you.

Speaker 2 Yeah, because you kind of mentioned earlier her lifestyle is

Speaker 2 increase her lifestyle spending because you're taking care of the mortgage. So she's going to have to probably shift her priorities.
How much do you make a year, David?

Speaker 3 Yeah, around

Speaker 3 62K in a dollar. I have to

Speaker 2 write it down

Speaker 3 from euro to dollar.

Speaker 2 Sure, sure. And out of that income per year, are you able to rent somewhere for a bit? Like, are you able to self-support yourself with that amount in Berlin? I don't know.

Speaker 2 I don't know the economy over there.

Speaker 3 Yeah, it's a little bit other situation because the health care is about

Speaker 3 health care and the taxes are in that 62k.

Speaker 3 So

Speaker 3 I get home

Speaker 3 39 or 40. The taxes here are a little bit higher.

Speaker 2 So,

Speaker 3 yeah, for sure.

Speaker 2 But you can self-support yourself. You can support yourself.

Speaker 3 Yes.

Speaker 3 But on the debt end, I don't have

Speaker 3 really margin to put in myself and my retirement plans at the dead end.

Speaker 2 Okay.

Speaker 2 Do you have any debt right now, consumer debt?

Speaker 3 No.

Speaker 2 Good. Enthusiastic.

Speaker 3 I'm staying out of debt. And

Speaker 3 I thought about a car, but

Speaker 3 as long as I was thinking about it,

Speaker 3 in my mind, oh no, I'm not sure.

Speaker 2 Okay, good for you. Is there a track that you could start earning more money? Like, do you see a career trajectory where you're, you know, in the next five years, earning more money?

Speaker 2 Or is this kind of, do you feel like this is it for you in Berlin?

Speaker 3 So I recreated my career in sales. So I went to

Speaker 3 I was looking for a hotel degree. I get it.
And then corona hits and I started a sales career. So I'm improving on that.

Speaker 3 I want to go further. I'm a sales manager for energy resources for healthcare and hospitals.

Speaker 3 So yeah, I will make more money.

Speaker 3 That is about

Speaker 3 70, 80,000 here in Germany. So maybe I should go to America and make some more money.

Speaker 3 The numbers are killing me.

Speaker 2 Listen, that's always an option. I think the main thing to take away is I would not pay more on your mom's mortgage.

Speaker 2 And if she wants to pay extra on her own mortgage, you know, that's her prerogative.

Speaker 2 But the main thing is, I would be looking for a way to move out, even if it's into a small apartment, a small one-bedroom, something where it's really modest for you, but at least you're kind of able to separate yourself from that dependency that you guys have on one another.

Speaker 2 And then, yeah, it's up to you to get to decide what you do. I mean, the world is your oyster at that point.
Yeah, come to the States. Yeah.

Speaker 2 So, yeah, David, I would have a conversation with your mom, you know, and she's been, you know, you've contributed a lot, but also she's allowed you to live with her. That's right.

Speaker 2 So give her, you know, some, it would be respectful to give her at least a notice of maybe two or three months. I think, yeah, that's just to say, hey, I'm going to be looking for a new place.

Speaker 2 And by July, I think I'm going to be moving out. So I just want you to be aware.
So if you need to start shifting some things,

Speaker 2 you know, and if your deal was that you

Speaker 2 go ahead.

Speaker 3 I will be clear

Speaker 3 at that point.

Speaker 3 So

Speaker 3 don't

Speaker 2 worry about that.

Speaker 2 Don't worry about that, Rachel. He's going to lay it down.

Speaker 3 I am very open-minded, but thank you.

Speaker 2 Yes, no, you're great. Yeah.

Speaker 2 So yeah, that's what would be my advice david is to yeah have that conversation with your mom and then yeah get it get a small apartment i wouldn't probably buy anything right now you know just like get yourself settled you're 30 kind of figure out okay this is where i'm at here's like the career and like what jade said if you can see a trajectory of your income going up that's wonderful because you can use some of that to maybe save and pay for a property down the road and or start investing and saving for the future for yourself but i think this first step is is to move out so um i would do that But yeah, good luck to you, David.

Speaker 2 Very good. And he is very convicted, Jade.

Speaker 2 I asked him about that debt, and he gave us an enthusiastic no.

Speaker 2 We could hear it all the way here in America. David, you're doing great.
We're excited for you.

Speaker 1 Listen, guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now.

Speaker 1 You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went.

Speaker 1 So, if you're going to start winning with money, you have to get on a budget. The easiest way to get started and stick to it is with the Every Dollar Budget app.

Speaker 1 It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what? It's free, so no excuses.

Speaker 1 Download Every Dollar in the App Store or Google Play today.

Speaker 2 This show, I'm proud to say, because it's all of you listening and watching, continues just to grow and grow and grow.

Speaker 2 And we are so thankful for that because that means more and more people get to hear about how to take control of their money. This is why we wake up every day.
This is what we want.

Speaker 2 So the fact that more people are listening and watching is so wonderful. And so many times that growth really does happen because

Speaker 2 those of you listening and watching are telling your friends and family about the show. So please continue to do that.

Speaker 2 Word of mouth is always huge and people that trust you, trust your judgments and know that, yeah, you're a trustworthy source. So

Speaker 2 be telling your friends and family, share it on social media, all the things.

Speaker 2 It really does help continue to grow the show because we want to spread the word about how to have peace with your finances, Jay. That's right.
Yes. We want peace in this area of our life.

Speaker 2 So let's go to Tony in Philadelphia. Hi, Tony.
Welcome to the show.

Speaker 3 Hello. Thank you.

Speaker 2 Absolutely. How can we help?

Speaker 3 I'm looking for some help in advising my daughter and son-in-law. Specifically, should they take their sizable savings and use it to pay off their sizable debt or not?

Speaker 2 Did they ask you what they think they should

Speaker 3 do?

Speaker 3 I think we're pretty open in our family with money. This is just a...

Speaker 3 Little bit of a, they were recently married.

Speaker 2 Okay.

Speaker 3 They're in their mid-20s and they're good young adults and thoughtful with their money.

Speaker 2 Okay.

Speaker 2 And they came to you and she said, you know, dad, what would you do in this situation? Well,

Speaker 3 it did come up in conversations with us. It was, you know, what should they do? She came at the time of their wedding, she had about $100,000 in savings

Speaker 3 with no debt.

Speaker 3 Her husband had about $10,000 in savings and about $100,000 dollars in student loan debt

Speaker 3 no other debt so as a young married couple put them together they've got about a hundred and ten thousand dollars in savings and about a hundred thousand dollars in student loan debt

Speaker 3 um i've been debt-free for a while so i'm a little unfamiliar territory

Speaker 2 with

Speaker 3 what they should do on one hand they could take their savings and pay off the debt and be debt-free yeah I mean that sounds great that does on the other hand they'd have no safe they'd have no savings at that point and that just makes

Speaker 2 well they'd have 10 000 they'd have ten thousand of savings but it makes you uncomfortable or them

Speaker 3 yeah

Speaker 3 them

Speaker 3 probably more my daughter because she's been raised on

Speaker 3 have a emergency fund and save for things before you buy it so yeah are you struggling with do i take the savings that we have and take it down to nothing here along with the other side of it can i can i interject for a moment here's the thing yeah we're i feel like we're talking about the wrong thing.

Speaker 2 So yeah, you're, you're right. If, if, if we're talking about the money side, 100%, I'd say, yeah, they should take the 100,000 and pay off the 100, 100,000 of student loans.

Speaker 2 They'll have 10,000 of savings and they can stack that up to six months of expenses really fast, right? That's what we would say. Yeah.

Speaker 2 Like from the money standpoint, Tony, that's what they should do. Yes.
They need to pay off their debt.

Speaker 2 But what is really striking me in this call is they're newly married and it feels like, and I listen, I don't want to overso, I'm just telling you, I'm trying to call a spade a spade.

Speaker 2 It feels like you're the third man in the relationship. And I kind of feel like that's going to cause problems going forward.
So I am of the mind of let them figure it out.

Speaker 2 And if they truly do ask you, that's different. But I don't think that it would be healthy if you're kind of in her ear over there or in his ear over here.

Speaker 2 I feel like you have to kind of let them be a new couple.

Speaker 2 That's just me. And Rachel, Yeah, Rachel, you might say something a little differently, and that's fine.
No, I mean, yeah, I mean, again, Tony, it's the relationship standpoints

Speaker 2 always get sticky with money when it comes to

Speaker 2 parent,

Speaker 2 adult-child situations. And we see it a lot.
So I think what we're kind of just cautioning is if this was your daughter calling,

Speaker 2 that would be one. That would be different.
If the son-in-law was calling and we're talking to them, it's their money and their problem, right? So they need to be figuring this out. They're adults.

Speaker 2 They're old enough to get married. They're old enough to figure this out.

Speaker 2 But again, if they came to you, Tony, and said, you know, dad, we need a lot of help. Will you sit down with us? Here are our numbers.
Here's what we need to do.

Speaker 2 That is, yeah. But the, the, um, the, yeah,

Speaker 3 I would say that's part of it. I mean, we do, we have been open and have had conversations.

Speaker 2 Okay. Okay.
Here's an are you ready for this extreme story? You ready for this, Tony? So my, I remember I was married probably, and we were probably right at six months.

Speaker 2 And I was 21 when I got married. So I'm 21 and a half.
And Winston and I, I remember being up at mom and dad's house. I was by myself.

Speaker 2 And I was having dinner with them because Winston had something that night. And I remember asking my dad, Dave Ramsey, I love this dad.
A question about mutual funds.

Speaker 2 And I said, we have money in a high yield. Should we go ahead and transfer this to a mutual fund or leave it in a high yield?

Speaker 2 Like it was a very pretty simple answer, but I didn't know what he would recommend. Tony, he wouldn't answer my question.

Speaker 2 He said, what would you, well, what does Winston think? And I was like, well, we don't know. So we're coming to you to ask.

Speaker 2 He's like, well, you just drive down this hill and you guys decide what you think you should do. I'm like, but I'm asking you, Dave Ramsey, what to do with my money?

Speaker 2 Do I need to call in and like scam the show and like change my name?

Speaker 2 But I think that the learning was now 15 years later, looking back, he was giving dignity to my husband to say, you and my daughter need to figure this out.

Speaker 2 I am not going to swoop in and save the day all the time. You guys are smart.

Speaker 2 smart you guys can figure it out and again it was not a and i would say this in this situation this was not a life or death money situation right they're not asking gosh we're going to cash out all of us all of our stuff and we're going to go into crypto and you're like oh can i just yell probably not a good idea right it wasn't like it's you're not they're not doing something extreme should they pay off this debt is it a lot of debt yeah they also have a lot of savings they're going to be okay but i just wonder from a relational standpoint if it's if there is something to be said tony of you know you you gave her away away and, you know, you could decide.

Speaker 3 I was, yeah, I was trying to get prepared for the conversation as we talk about it more, but it's an interesting, there is the Dave approach, as he did with Rachel and say, let me know what you guys do.

Speaker 2 Yeah, I love that approach. I know.
I mean, I was frustrated at the time because I thought it was like, will you just say mutual fun or

Speaker 2 just give me the simple answer?

Speaker 2 And again, every relationship's different, right? And Winston may do something different with Amelia if Amelia comes and asks.

Speaker 2 I mean, I don't know, but I think it's the overstepping boundaries that we don't want. We want them to be developed into their own couple, giving themselves the dignity.

Speaker 2 And there's probably a little bit of you, Tony. I'm going to say this too.
There may be a little bit of you that's like, oh, I don't like that he brought in all this debt.

Speaker 2 I was debt-free. My daughter was debt-free.
And now she has to use her hard-earned savings to clean up his mess. And that's frustrating as a dad to watch.

Speaker 2 So there could be a little bit of that brewing in you as well.

Speaker 3 Yeah, yeah, I think I'm good there. It just, it is what it is.
I think I've heard Dave say lots of times on the show that, and then the preacher said, you are one.

Speaker 2 Uh-huh. Uh-huh.

Speaker 3 it is what it is like it's they view it as the two of them they have savings and the two of them they have

Speaker 2 that's good that's wonderful but i'm being disciplined and feeling that way about it also that's good good i'm glad it's like my son says it's a taco burrito conversation not choose

Speaker 2 not choose yeah yes but if she came to you tony and your sweet daughter is like dad please what would you do in this situation you would answer if you were following ramsey's plan yes you would take that $100,000, you pay it off, you'd have $10,000, which is pretty great compared to the normal, you know, normal people out there, normal Americans that have a negative net worth because they don't have savings and they have $100,000.

Speaker 2 So they're in a great position in that way. They get to continue to build that $10,000 up to a fully funded emergency fund and go.
go about their life. And it's great.

Speaker 2 So I know we're probably a little hard on you, Tony. I don't mean to be, but I think it's the right thing.

Speaker 2 I think I love what you said because at the end of the day, it is kind of that dignity to the spouse of saying, hey, like,

Speaker 2 especially the dad-daughter relationship, would you say? Yeah. And for this, the husband coming in, like that's, that role has got to shift like this.
And it's,

Speaker 2 it's tough to do that. But I think you have to pull your hands off in order for that to make the transition it needs to make.
Yep. I know, man.
That's hard.

Speaker 2 And I think that's going to be a hard as a parent.

Speaker 2 That has to be a daily damage. Especially if the dad and daughter are very close.
Yes. Yeah.
Yes.

Speaker 2 And I, but I think that sets up a beautiful precedent going forward because I feel like I've, you know, known situations and that wasn't the case. And there was, there was an overlap a lot.

Speaker 2 And later, breaking that, 10 years after therapy, trying to break that relationship, like that's even more painful. So it's a good precedent to kind of start.

Speaker 2 But Tony, I do appreciate your heart and looking out for them and all of it. But tell them to call the show and we'll chat to them.
We'll chat with them too. So thanks, Tony, for the call.

Speaker 2 And that puts this hour of the Ramsey Show in the books.

Speaker 6 Hey, what are you still doing here? You know, the rest of the show is happening on the Ramsey Network app, right? So you got to jump over there to continue watching. You can download it for free.

Speaker 6 Just go to your app store, type in Ramsey Network. It's completely free.

Speaker 6 And I'll drop a link in the show notes to make it easy for you. So if you're watching on the app, you're in luck.
But if you're watching anywhere else, this show is over for you.

Speaker 6 So jump onto the app and let the fun continue.

Speaker 2 All right. By the way,

Speaker 5 go on now.

Speaker 6 Don't make it weird.

Speaker 6 Okay, I got nowhere to go, so you need to go.

Speaker 2 Okay. Bye-bye now.

Speaker 4 All right, this is getting weird over there, guys.

Speaker 2 So, what do we do?