Math Is Important but Behavior Change Is What Matters

This is the Ramsey Show. It's where you hang out, America, to talk about your life, specifically your money, your profession, and your relationships.
Alongside the incomparable, the inimitable Jade Warshaw, I'm Ken Coleman. And we're here for you this hour.
888-825-5225. 888-825-5225 is the number.
You ready to go? You're in your spring quarter way. Yes, I am.
I like this. Spring has sprung in the Nashville area.
All right, that means we got a little extra energy for you folks today. Jade's going to help out on how to save, how to invest the money, and I'll help out on how to make more money.
So it's quite a combo, if I do say so myself. We start off with Darlene in Missoula, Montana.
Darlene, how can we help today? Hi, how are you? Good. I called in on the show just to try to see what kind of help we could get and guidance in regards to my other half has been hiding some things financially, and I'm having difficulties with that and trying to get to communicate with him to resolve so we don't lose our house.
Uh-oh. What happened? Is this a new revelation? Well, he's always not been real good with money, but, I mean, he does try his best.
And even though we're just engaged, we don't have our finances together. He pays his things on his own, and I pay things on my own.
We've never really sat down and gone over our finances with each other, but it's just he's got himself in a predicament.

Well, but hold on a second.

I asked you this, and it kind of feels like you went a different direction.

I asked you, is this a recent revelation that he's not been honest with you?

I love that your finances are separate.

They should be.

That's exactly what we would tell you if you asked us that.

You aren't married yet.

So my question is, is this something new that you have found out, and how'd you find out? Well, I have to say yes and no. I know he's not been that great with money, but to this extent is new.
How I found out, I'll try to keep it short, but you know how you have you connect with your vehicles, and I was pulling up in our driveway from running to Aaron and his phone actually connected. He was on the line with, I guess, some loan agent from his loan company.
And I heard something about a forbearance or a deferment. And so I sat in the driveway and tried to listen as long as I could.
And then the call disconnected. And then I came in and went downstairs and confronted him, and even though I confronted him on this, he still continued to lie about how far behind he was.
Okay. All right.
Well, thanks for sharing that. That helps Jade and I in trying to encourage you, because this is less about him lying about the finances.
This is just about him lying. So we've got money problems.
And you guys are about ready to tie the knot. When is the big day? We haven't really set a date, to be honest with you.
I've been comfortable with just the engagement the way that it is. And I just, I want things to be more stable.
All right. So how can we help you? So now we've got a good idea of what's going on, and I'm troubled.
If I could play big brother for a moment, I'm concerned because this is a real problem. We know that financial issues cause a lot of marriage stress, number one.
It's well documented. And then number two, there's dishonesty here.
And so I'm very concerned. So how can we help you best today? What can we do? Well, I mean, I obviously don't expect any type of relationship or marriage counseling.
I do know I'm good with money. I think everybody can always be better with money.
What I want to do is to be able to get him to sit down and to be completely honest about finances in general. No matter how bad it is, we really need to get to the root of the problem and to be able to sit down and look at his finances, my finances.
I agree. What happened when you confronted him? And depending how the confrontation went, it feels like that would have been a time to kind of come clean with everything.
Did he not? What happened when you confronted him? When I confronted him and he knew that I heard the conversation on the phone, I tried to sit and Google in front of him what deferments were and what forbearances were just to educate myself. Because you weren't sure.
Yeah, and if I try to figure out what he was actually doing and what his plan was, and when I started reading off and trying to figure out whether forbearance is added on to the back of your loan, to the end of your loan, or if it's a balloon payment. And I looked at him and I said, well, forbearance to say that you have to be four months behind.
I said, you just said you were a little bit behind. And what did he say to that? He said, no, I don't want to be that far behind at all.
Well, then there was another lie. He was already four months behind.
Okay, so let me ask this, because there's two things that I'm sensing going on. Number one, your boy was caught in a lie, and you probably came in hot and heavy.
I would, too. Like, I'm not saying that you shouldn't have.
I would have been like, say, what? So I understand that you probably came in there really strong. And so for some personalities, that's like shutdown mode like it's like i i i like the the cartoons so he he may not he might have just been trying to get through the situation which is probably why he wasn't giving more information that's thing number one but did you guys come back later on in calmness and be like okay let's sit down and talk because here's what's gone on.
And when that happened, what could you derive from that? Because it is possible. People don't always know, when people don't know what's going on with their money and they get behind, sometimes they're still like, okay, what's going on? How many months in it? He might not even understand it.
So have you guys sat down now calmly to talk through everything that's going on?

We have a few times. Yes, it's been little conversations.
And when it kind of gets a little bit more heated, we step aside a little bit and take another day and then sit down and look at it again. So we both don't get so upset or he doesn't feel attacked or any more ashamed.
And he says he feels like a failure. and okay so you guys are talking about it and it kind of does i mean can you can jump in here it does kind of sound like what i would expect a situation like this to sound like because contrary to popular belief money stuff is not a light switch like it doesn't it's not one conversation and over it does tend to spread into many conversations that have a life of their own because the truth is he has made a mistake.
I'm not trying to sugarcoat that. But there's a lot of shame around the choices that people make with money.
And so it can take a while to really be able to talk about it in a way. And I think what you're saying seems right.
You talk about it a while. When it gets too hot and heavy, you cool it down, come back to it later.
Like that, what you're describing really does sound like you're on the right track. And what I would be listening for is as long as you don't feel like he's still hiding things, then I think that you're on the right track.
And this is just something that you guys are going to uncover and it's going to be a continued journey. Yeah.
However, I agree with all of that, but I think this ought to be premarital counseling. Yeah.
Yes. Because you actually need a professional who can help you navigate his feelings.
His feelings are very real and as a result, very powerful. In other words, there's a lot of shame.
What I heard is he's ashamed and he needs to know that you aren't judging him. He needs to know that you aren't holding an ultimatum over his head, but that you don't feel safe because of the way he does money.
And this is about us moving forward, having a healthy and prosperous marriage, not what you've done now or what you're dealing with. I'll help you.
I'll dive in going forward. Hey, babe, I'll handle the finances and you don't have to worry about it because it's my thing.
It's my jam. That has to be facilitated through a real marriage pro.
And I could not recommend, I think your next steps are, hey, we're doing this for us so that there's no judgment. Sit with me in there.
They'll keep me in check so that I don't shame you. Come at it that angle and just say please do this for us and it's gonna be okay no shame no nothing no condemnation i think that's the play but i do believe that this is premarital counseling there's not a money issue right now it could be but it's actually not and and that's why i would do that so thanks for the call dar for trusting us.
I think it's going to be okay if you approach it that way and you guys stick through the therapy. Quick break.
We'll be right back. This is The Ramsey Show.
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That's chministries.org slash budget. Welcome back to The Ramsey Show.

So glad you're with us today, America. Alongside Jade Warshaw, I'm Ken Coleman, and we're here to coach you up.
888-825-5225. That's the phone number.
Sarah's going to join us now in Atlanta, Georgia. Sarah, how can we help today? Hi, yes, sir.
I'm 56 years old. And first of all, thank you for taking my call.
You bet. I'm 56 years old and I have four grandchildren that I am now raising.
I was in a perfectly good situation before I got the kids. I had money in the bank.
I was working for an airline and I was doing really well. And I got the call either come and get the kids or they're going to state.
Oh my goodness. Needless to say, I came back and, um, I had to spend everything I had.
Yeah. And, um, I took the kids,

got a place as quick as I could. Cause I, I was,

I gave up everything to travel. My husband passed away.
My husband,

I mean, my mom passed away. So it was like, it was only me, you know?

So here I'm going to live my life. And, uh,

so I had to come back and I had to try to get a home.

I had to try to get the furniture. I had to try to get, you know,

Thank you. live my life and uh so i had to come back and i had to try to get a home i had to try to get the furniture i had to try to get you know and i was getting all this to keep them out of the system

and now it's been five years and i am like broke i don't know what to do oh sarah well first of all

you are such an amazing grandma i'm telling you um you stepped up and um we're gonna help you

Thank you. You stepped up, and we're going to help you.
We're going to help you. So give us the scenario.
Where are you financially? Did you accrue any debt? A lot. Walk us through that.
I went from having $63,000 in the bank and was going to put more, you know, as I was traveling. But all that's gone because I had to get a lawyer.
I had to get the house. I had to get furniture.
I had, you know, and it was just, I spend it all, okay? I get it. It's okay.
We want to get you out of this. What's your debt? I went from that.
Real quick, Sarah, tell me, where did you used to live? Where did you travel from and where do you live now? I live in Georgia now. And when they called me, I was in Paris.
Paris. France.
Paris, France. Yeah, but I was traveling.
Yeah, I didn't live anywhere. She didn't have a home.
Got you. Okay.
I was confused about that.

So now you're in Atlanta.

How old are these kids?

These kids, the youngest is six.

Then there's eight-year-old identical twin boys and then a 12-year-old little girl.

Okay.

Okay.

She's got a ways to go.

Now, do you have full custody of them now and all that's settled?

Yes, all that's settled. Okay.
All right. And now it's all on me.
So I'm mama, you know, basically. What are you doing for work? You're not doing the travel agent thing anymore.
No, I can't. I was working with a local company and then they let me go.
So I went from having around $4,300 income down.

I mean, from $6,500 having income down to $4,300.

And this is where I lost it.

This is where I'm, like, losing everything because I don't have enough.

So what are you doing now?

What's for work?

I'm pet sitting.

I'm doing pet sitting.

I go to people's houses and pet sit.

The reason I don't do a regular 9-to-five type job is these kids are special needs. Oh, okay.
Yes. Is that why you lost your job before? That is, yes.
That is the reason why I lost my job. Okay.
So you're in Georgia. Is there anybody, is it, it's just you and these kids? There's no other family.
You mentioned your mom passed. Yeah.
Okay. No other family other family it's just me and how many of the kids have special needs all four okay they're they were born on drugs and so a lot of medical stuff still going on a lot a lot of medical and a lot of emotional behavioral okay and so where's where's where's most of your money going? Is it for therapy and the medical stuff? I'm guessing that's extremely expensive? Yes, that, well, they do get Medicaid, thank goodness for that.
You know, that does help. Okay.
But most of the money now, since I had to get a mortgage, it goes to the mortgage and I had to get, you know, the mortgage right now is off the chain. So what is it? What is the mortgage? I do a 6.25% now, and my mortgage is $1,748 a month.
That's most of it right there. And is it a house? That's just a mortgage.
Yes, it is a house. Okay.
Whereabouts? Actually, I'm in like southwest area of Georgia. Yeah.
And the reason I'm asking, because I know that area very well, I lived down there for a long time. So I'm just curious.
So you're south of the airport? I am. Yes, I am like near Albany.
Okay, gotcha. All right.
All right, let's walk through the debts really quick because we don't have a ton of time left and we're going to get you some help here, but let's give Jade a quick snapshot of your total debt. We know the house.
Well, let's just quickly get that. How much is the house worth today? Do you have any idea versus what you owe? It's worth $235,000, and I owe $217,000.
Okay,

so you don't have much there. Okay, and now go through the rest of your debts, smallest to

largest. Credit card debt, I got several of those.
All of them together is around $6,100.

I pay $385,000 a month. Okay.
Furniture bills, I pay $8.47 a month. Is that a one-time purchase, the furniture bill? You just put it on a loan or is it something that's like a rent-to-own deal? It's sort of like a rent-to-own deal.
Okay. How do we get out of that? Because what are you paying a month? $8.47.
Okay. $8.47 a month.
Now, is there a way to get out of that? because that that's going to be a revolve like you're going to be in that forever if we don't if we don't get out of it now and that's a lot of money yeah it's it's another year on it okay get out of it 47 a month i don't know how okay that's your homework one of the things that i want you to do getting off of this call is to find out how I can get off of this because this for a whole nother year is a lot of money. I'd rather you just go over to Walmart and make it happen for $847 in one month and to continue paying this.
How much furniture does that include? All the beds, the couches, the kitchen table. It includes everything in the house.
I had to get something. So this is how I did it.
And then after the year, you'll own it? Yes. Okay.
It's $5,229 total to pay it off. Okay.
Keep going down the debt. What else do you have? I have, basically, that's's all the debts is the furniture bill and the credit cards and then my stupid butt got some payday loans I'm going to work on what do you own the payday loans 2400 total okay 1320 a month okay so yeah you're right those payday loans those will suck the life out of I want those at the very, very top of the list.
Do whatever you can to get those things out. I really, really want, and I know that this doesn't happen overnight, but if you find the right folks, it can.
I really want you to get plugged in in a church or into some community because you can't do this alone. I mean, you are running on fumes already.
So you've got to get somewhere and you've got to tell your story. That's right.
And you've got to let people hear what's going on, people who care. I want you to get to a local church.
I want you to get plugged into a life group and I want you to start saying what's going on because anybody else that hears that is going to go, if you came into my life group today, I'd be like, what can I do instantly? Do you see what I'm saying? So getting people around you is paramount to making this work. Okay.
And by the way, because we're running out of time, I want to set her up, Christian, with one of our financial coaches, please. Let's gift her a session so that there's just a little bit more time.
and they can help you with a plan because we just cannot cover all of this in the small time we have with you. Secondly, Christian, you've done this before.
Also, let's figure out what churches we know in the area where she lives specifically. We will also make some connections to this church for you or churches.
and I cannot what jade said is absolutely the number one thing you got to do right now now the coach will help you our coach financial coach will help you uh and come up with a game plan but you've got to go tell your story because people's hearts will break with yours and you will get help you've got to be okay to say I need help. Yeah.
No shame in your game, Sarah. You stepped up.
help. You've got to be okay to say, I need help.

No shame in your game, Sarah.

You stepped up.

Okay.

You did what you did.

No one's judging you, including us.

Everybody just wants to help.

Got to have some help.

Yeah.

So hang on the line.

Christian's amazing.

He'll take good care of you, Sarah.

Help is on the way.

Keep your chin up.

There's a plan.

This is The Ramsey Show.

All right, Dave, you have some strong opinions. Possibly, yeah.
I think so. Okay, because you really prefer credit unions over big banks.
So why is that? Well, credit unions, for one thing, are 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.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.
So I find very few credit unions that aren't very customer centric. Yes.
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.
You know, that's why we're partnering with them because they've got a scope to be able to handle the Ramsey audience and 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. Yeah, absolutely.
And you're right, their customer service is unbelievable. Winston and I just signed up, and we got an account.
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.

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 so, so appreciate that.

So, again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy. 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. Hey, you guys know how much I hate banks in general.
And so for me to do this is a big deal.

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.
Yeah, you guys, it's so easy to

join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey to learn more.

That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to the Ramsey Show.
I'm Ken Coleman. Jade Warshaw is alongside 888-825-5225 is the phone number to jump in.
All right, it is possible to break the cycle you've been stuck in. I'm just telling you, it's possible.
It might seem as though you're just never going to get out of it, but it is possible. And we're talking about your money and your relationships.
There's such a tie there. Dave Ramsey and Dr.
John Deloney are hitting the road to show you how to break out of the cycle. It's called the Money and Relationships Tour.
They're going to talk about raising great kids, handling money fights,

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The dates are

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Kansas City on May 9, RamseySolutions.com slash tour is where you get the tickets. Or if you're watching on YouTube or listening via your favorite podcast app, click the link in the show notes.
It's the Money and Relationship Tour. Dave Ramsey, Dr.
John Deloney coming to a city maybe near you. So go check out the details and get your tickets now colton is up in denver colorado colton how can we help hey mr coleman hi mrs warshaw how are you guys doing today well i just feel about 15 years older now it was very formal mr coleman and mr warshaw with you today folks we're here to take care of business what's's going on, Colton? How can we help?

We appreciate the respect. Jade feels she doesn't know what to do with that.
This is wonderful. First lady.
Y'all deserve it. I've been following Dave Ramsey from the student program that I took back in high school back in 2016.
Okay. All right.
So I was wondering if I can afford to go on a vacation to Japan next year. Ooh, I love these questions.
I particularly like this question because full disclosure, Japan is on my top five list of places to go. Interesting.
That I've not been. Okay.
So I'm a little interested in this. All right, Colton, how much is it going to cost? Well, you know, I've been budgeting for it.
I'm looking at it and planning on taking it October of next year. Okay.
So I got some time to save for it and budget for it. And I'm estimating the cost to be around 4K.
4K. All right.
Okay. And do you have any debt? Nope, nope.
I paid off my truck last year in July, and I have about 15 grand in savings right now, and I estimate that to be about 35 grand in savings. Is that your emergency fund? That is my emergency fund.
That is everything. And so what is a fully funded emergency fund as we define it, three to six months? What's that for you? For me, so I still live at home currently.
I'm moving out in July, and I estimate my expenses to be about $2,100 a month to $2,400 a month. Okay, so you've already got, so the $15,000 is a fully funded emergency fund and then some for you.
Yes. And you're going to be able to cash flow between now and next October easily the $4,000 to cover the trip, yes or no? Yes, I should be able to, but I'm also wondering if it's too much of my net worth because $4,000 relative to $30,000, $35,000 is a good chunk of money.
Yeah. Yeah, but that's not, we don't have a net worth calculator as your vacation.
The bottom line is, do you have any debt? The answer is no. And do you have a fully funded emergency fund? Yes.
How long is the trip? Are you investing 15% of your income into retirement? I haven't started investing yet. my company doesn't do a 401k match, and I'm still just bulking up to move out, and that's why I've been saving probably about 70% of my take home.
Here's my deal. I'll get out of the way and cede my time to my financial expert partner over here.
I just see no issue with you coming up with four grand, even if you're investing 15%, which you need to be doing. You coming up with four grand between now and October 2026 is a non-issue, my man.
So I would say go to Japan. How long's the trip? Me and my friend are still working that out.
He's coming along to also paying all cash, show'll be good to go doesn't that have to do with your work like how does that conflict with your work is all i'm asking uh you know what uh thankfully my job offers me generous amounts of pto um and i do mean generous amounts of pto i have a 24 days to burn this year so your only question then was just your only issue was net net worth like hey is this too big of a piece of my net worth to do this yeah no it's not no no and you only live once bro the fact that you're paying cash for this yeah you're young how old are you i'm uh 24 i'll be about to turn 26 by the time we take the trip in october my birthday's end of October or so. Okay, so my only caveat is I would be moved out of my parents' house before I went and did this.
Like to me, at your age, that's really important. And so I would not want this trip to push me from not doing that.
That would be my only piece to this. No, it's not going to push me from that.
I'm moving out in July um i'm moving out to a college town not to go back to school that's just where i want to live um it's going to be laramie wyoming and uh you know that's where my expenses and rent fits and do it do it so all right so listen i'm going to preview my talk on the ramsey cruise what talk what's it about it's about tell you it's, it's the answer to why he's calling it. Okay.
My talk is for decades, Davis said, live like no one else. That's the baby steps.
Yeah. So that later you can live like no one else.
And then he eventually added and give like no one. Right, right, right.
Okay. But living like no one else, but the crux of my talk, because all these people on the cruise are baby step four

and higher, is don't get to the end of your life after you're doing all this hard work to live like no one else and not actually live like no one else, which means when you're 24 and debt-free, come on, going to Japan for four grand because you can and you come back with a great experience and no stress. That's living like no one else.
Is our talk the same? Because I feel like I'm talking about the same. I'm talking about being in your spending era and my guy is in his spending era.
I'm not talking about the money part. I'm going to say on the other side of all this hustle, now we go from intensity to tensionality and let's talk about the regrets of the dying.
I going to share the regrets that okay the regrets of the dying what we know from from tons of studies tell us some of them can you without yeah without i won't give the whole talk but it's i didn't live true to myself like i tried to please everybody else oh man yeah i didn't spend enough time with friends i didn't spend enough time. Like these type of things.
And so I'm going to equate it to now that you have financial peace, what is living like nobody else look like? And I'm going to actually spin. I love that.
I'm going to flip the regrets. I love that so much.
So instead of a regret, I'm going to go, here's the flip side to this regret. And I'm going to name it.
And now that you have the money and the freedom to pursue this,

get to the end of your life and reminisce, not regret.

That's the final.

That's very good.

So I would say, Colton, I believe in this so much.

That's the talk I'm doing, essentially.

And I think at 24, being debt-free, if you don't go to Japan,

it's the type of thing you might regret one day.

And where none of us are promised tomorrow. So while I living this is from the the broadway show redwood with adina menzel that station i just saw there's a song and there's a lyric in the song that says live while you're living okay and i'm gonna go ahead and borrow that i probably botched that lyric i'm with you i thought you were going to sinatra no i just think that when i'm living live yeah that's right live and i think this is this meets all of the requirements for us saying you know davis said for years don't let your vacation come home with you i agree yeah by putting it on a credit card but he's got the money and why wait that i think what can what ken what you're saying is so so smart and so true we see that with home buying we see it with vacations it's kind of like people are gun shy to actually like you said live and i'm like you have the moment take it no one is no people only want your time they only want to suck things from you and take things from you people rarely will push you to do those things yeah there will always be an excuse like why you got to work more why you can't go why you can't do it just go this is my new qualifier colton jay and everybody else when when given an opportunity i sit there and i think is this something that if i'm an 85 year old man in my final days that i'm gonna look back on and go i wish i'd done that man i tell you what i'm glad that my talk comes before yours because they're kind of similar hey Hey, if there's karaoke on the cruise, will you sing that song you just talked about? Yeah, Ken.
If, if, if Jade works with me on it, like she's got to make sure that I can get all the keys. Me, me, me.
Yeah, yeah, yeah. She's a pro.
If she coaches me, sure. Maybe doesn't do that with me.
I don't know. Based on the last time we heard you sing, Ken.
If I can do like a Kirk Franklin version, like Kirk never actually sings, but he surrounds himself with great singers. That's more me.
I say a couple lines with some hope while you're singing. This is the Ramsey Show.
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Welcome back to The Ramsey Show. I'm Ken Coleman.
Jade Warshaw joins me. and we're here for you this hour, 888-922-722-722-722-722-722-722-722-722-722 question today brought to you by why refi with why refi, you can take control of your defaulted private student loans with a plan that works with your monthly budget.
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It may not be available in all states. All right.
Today's question comes from Catherine in Indiana. She says, how do I rationalize having a thousand dollar emergency fund when I could be using it to pay off debt? I've lived paycheck to paycheck for 25 years, and I've always managed to cash flow any

emergency. I have a hard time rationalizing putting money in the bank now when I could put it towards credit card debt.
I can't get past this feeling that having savings is for those people and not me. Fascinating.
That is fascinating. I mean, let me tackle this from a couple of areas.
first and foremost, I want to say that when I first started the baby steps, I felt the same way. I was like, oh, you did.
Yes. You were so intense because this says intensity to me.
Let me tell you, I specifically remembering arguing with Sam because he was like, Jade, we have to walk the steps the way they're written. And I was like, but we need this thousand dollars to go towards our credit card payment.
Like I. Which I understand that.
Yeah, because you're desperate. And so you're like trying to like put out the fires and stop bleeding, stop the bleeding.
So I validate the way you're feeling. However, what changed my mind is kind of what you said here, which is for 25 years, you've been living paycheck to paycheck, which means your way hasn't been working.
That's right. That's really.
And so I had to do the same thing. I had to go, here's the thing.
I'm in $460,000 of debt. My way and my instincts have not served me well up until this point.
But was there? Okay. But I also know you.
You're probably one of the most principled, convicted people I know, and that's a compliment. Yes.
So what changed? Was it something that Sam said? What made you finally go? And I know you just kind of said it, but there had to be something before that. No, no, no.
There was an I've had it moment. There was an I've had it moment.
What was it? So the I've had it moment was we continue. Because we didn't have the thousand dollars, because we were trying to put out fires as they came, we weren't making as much progress as we should have been making and not having that extra little bit of money when when unexpected things come up i just felt like we were taking you know two steps forward one step back to like just going very very slowly and i just remember one time just being like pull the car over like i can't we've got to figure this out and when did that, we kind of looked at the baby steps and it was kind of like an audit.
It was like, okay, what are we doing versus what the steps tell you to do? And what we found is there were a lot of inconsistencies and the $1,000 emergency fund was one of them. It was like, okay, you're supposed to have $1,000.
We didn't have that. When you budget, you're supposed to have a cushion line item.
We didn't have that. Because I was like $0, zero, zero based budget is $0 in the account.
I felt that. Like, sure.
And so these are the things that we do, especially when you have a lot of debt, especially when you're trying to go quickly, you kind of think, ah, that doesn't apply to me. Yeah.
And all you see it as money that you could be spending, but I'm telling you, Catherine do the thousand dollars. Very personal answer there, which is powerful.
Yeah. You felt her.
I did. And I also understood the third part of this, which is if you've never, so many people struggle with saving.
If you've never been a person who has had savings or you've never been able to make it stick, right? You put it in and then you pull it out. It feels like you'll never be able to do it.
But if you just take that money, you set it aside, you put a lock on it, you will find that savings is a muscle that you build. And you're probably right now just, you don't have any muscles.
And so you have to just work at it and you get stronger and stronger. And that becomes something that you do become good at.
Love it. Really good question.
Better answer. Love it.
Let's go to Austin, who's now joining us in Salt Lake City. Austin, how can we help? Hey guys, how's it going? Good.
What's going on? I had a question for you. My wife and I are currently on baby step two.
We do have two cars that we have about between the two of them, about 20,000 on one and just under 10,000 on the other um we're looking at downsizing right now just to help put more toward other debts and kind of get rid of those big payments but i know on one of the cars we're probably about three to four thousand dollars upside down in it and so i'm trying to figure out we we do need two cars with our kind of work and and my kids school situations we we really do need two cars to survive. But I don't have the cash to, like if we were to sell my wife's car, I don't have the cash to cover that upside down amount, that $3,000 to $4,000 to get the lien.
So what's the best way to go about this? Yeah. Well, quick question.
How much do you owe on that car? So is hers is between 19 and 20 i don't remember the

exact amount i think it's like 19.4 is it a good car it's a decent car yeah it's a it's a pretty nice suv that we like um we have three kids so it fits all the kids and all this stuff that we need and what is that the one that's upside down yeah yeah that's the one that's upside down what other debt do you have? We do have about $60,000 in student loans as well. Other than that, we don't have anything else we're currently renting, so we don't have a mortgage, no credit cards, nothing else.
What's your income? I have my main job salaried at $75,000, and then I have a couple side gigs that bring in about $5,000 to $10,000 a year what do you see like on a on a normal month what do you see on the pay on the paychecks? My direct deposit's about 54 and then between my side gigs it really fluctuates month to month but we've currently budgeted at that 5,400 amount because my other side gigs are pretty like it's not consistent it's kind of up and down and it ebbs and flows. I mean, how quickly using the side gig, how quickly, if you really said I'm going to focus in on the side gig, how quickly could you save up 3K since your budget is based on the 5,400? How quickly could you do that? It would be probably two to three months.
Okay. And what is the side gig? I'm an architectural drafter, so I work for a home builder.
That's my full-time gig, designing house plans. And then on the side, I do it as well.
Jade, I don't know where you're at, but I'm leaning towards, I think you should just pay this car off. I definitely think that you could pay it off.
The only thing that's throwing me a loop is the $60,000 in student loans. If it was just the cars, I'd be like, say less, like pay them both off.
The $60,000 student loans is what's bothering me. Can I dig a little deeper and ask you, what's the payment situation? Are you on the save plan? There's a lot changing with student loans right now.
So I just kind of want to know where your head's at on those. Yeah, great question.
So currently we are on that save plan, but with the insurity of like whether that's actually going to be approved or not so all of mine and my wife's loans are currently in forbearance so we're at zero interest zero payments right now um and so we haven't been paying on them for the last few months to put more toward our our car loans and um and do that so that's currently where we're But I'm also like, I don't want to just let those

sit there without making payments on them. But we are starting with those smaller car debts as well to, you know, get rid of those.
Yeah. The student loans, those feel like a major risk right now.
Safe plan, a lot of people have been on that to kind of curtail a higher payment. But there's a lot of talk about that being rolled back and the payment amount being due going up.
And so I would hate for that to catch you off guard. For that reason, I could be interested in downsizing the lower car or the $20,000 car.
What's the $10,000 car? What type of vehicle is that? It's a sedan. It's a Subaru Legacy that I drive and um I I do so that's my commuter car I commute about 35 minutes every day um I could sell that for pretty much what it's worth I'm not upside down on that one at all but I would need something so I don't necessarily have the cash to go buy another cheaper vehicle yeah I wouldn't get rid of that another question I would not get rid of that one.
Here's where I'm at. I like that you're using your skill set to make money, like extra money on the side, but it feels like it's a slow go.
I wonder if there's something else that you could do that you can make a lot more money a lot faster. Because I think that if you're going to hang on to this $20,000 car, you've got to have a number in your head that you're committed to.
Like every month, we're bringing in an extra X amount of dollars. So it's probably you and your wife sitting down.
How many kids did you have again? We have three. Three.
And what are their ages? Six, three, and one. Okay.
All right. I think it's you and your wife sitting down and saying, honey, what margin of time do you have? And looking at the other and saying, okay, well, what margin of time do you have? And then putting your heads together and say, this is the amount of money that we're agreeing on that we need to bring in extra every single month so it's steady.
And if you can do that, then you can keep this car, but just know those student loans are waiting for you in the wings. Yeah, that's right.
But they can do this. I mean, this is doable.
So you got options there. I like it.
All right. Good stuff.
All right. Fun hour.
It went fast. That means I think we were having fun, Jade.
Yeah, we were. Okay, good.
All right. That would have been awkward had you said no.
Well, I'm just kidding. I know.
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This is the Ramsey Show America. We're thrilled to have you with us.
You're welcome. We want to coach you up to win with your money, to win in your profession and win in your relationships.
888-825-5225 is the number. The chuckle you heard in the background was none other than my good friend and co-host Jade Warshaw.
She's going to try to keep me on track as well as give you great money advice. So pray for her.
Well, you said you're welcome. Well, you thought it was like, like we're blessing them with our presence and i was thinking you are welcome got you like you are welcome here with you are welcome here on the show we want to help you i hear you yes kim i have to work better i think my personal brand is is is making you think one thing uh-huh no i'm just happy to be here let's go to margie in Chicago, Illinois.
Margie, how can we help today? Hi, thanks for taking my call. Just wanted opinion and see your thoughts on where we are today.
So I'm 60 years old. I work full-time still, and I bring home, I'm a 1099 contract, but it is a renewing contract.
It's just everybody's 1099. And my husband is 68 and he's retired.
Um, and he brings home, I make 90,000 and my husband brings home about 6,200 with social security and pension. Um, I think we're on the right track, but he feels that we have enough money to, he's not a big spender, but it's the nickel and dime where we go out to dinner, the some unnecessary purchases, small purchases.
Is it in the budget? No. You know, I did write in initially in an email and we don't have a budget.
So I know that's going to be do the $1 thing. But we do manage to get into savings every month.
We both manage to make sure that there's enough for my income tax that I have to pay on because I'm 1099. How much do you bring in? I bring in 90,000.
Oh, a month? 7500. 75.
Is that after the taxes or before? Well, that's before and then I divvy it up into the bank accounts taxes and then we are able to save for the top dollar Roth that we put into annually. What's yours after the taxes come out? Oh, geez.
After the taxes, it's probably like $4,300 cause that's income and property tax. Um, so we have, um, virtually no debt.
We have 9,000 left on our mortgage, no car payments, no credit cards. Um, we have like 16,000 in our emergency and then like 50,000 in our high yield account.
Okay. So, and I just keep saying, and we have six, 600,000 in retirement.
Okay. But I just keep saying, we still can't just foreverlessly, you know, always go out.
It's expensive to go out to dinner. And he thinks I'm so frugal and I'm like, no, we still need to stay to save for retirement because I do want to retire.
Well, I think that I think that the the crux of all of this is without a budget, everything's a guess, right? It's like, I think that this is probably not good. Or I think that we don't have enough.
But you really don't know. Or you think that this is outside of our range.
But you really don't know because there's no set limit that's really telling you. So I think thing number one is if you guys get a budget and every dollar budget, it's going to take a lot of guesswork out of what you're saying, because it sounds like you bring home $10,500 every month.
That's a lot of money, especially for people who don't have debt. And so I think that if you guys do a budget and in the budget, of course, you're adding the things that are very necessary right your mortgage and your 15 that's going towards retirement and all of the other little you know things that you guys are paying for and if you just say okay and our restaurant budget is is five hundred dollars a month and our um you know saving for vacations we're putting away this much a month I think that that's going to be eye-opening for you i really do because you guys clearly have done a fine job saving you've done a fine job getting your emergency fund you got 50 000 in the hysa which by the way what's that 50 000 earmarked for um just for a lack of another word anywhere else to put it it's not earmarked for anything it's just it's just their extra money yeah the 16 000 an emergency is over abundant abundance from what you guys talk about but that's in case we want to do something for the house or we want to i don't know we don't even really touch it we just it grows and then we move it over to high yield so okay and that's just because there's we can't give any more Yeah.
So we can only do the 16. So, so you've got a couple options.
I love that you've got the emergency fund there. That's exactly what it's there for the 50,000.
Yeah. Maybe that's there for fun things that you want to do.
If you want to take a trip, if you need to do something for the house, that's there for that. Um, you know, if, if you feel like it's too much, you could invest some of it into a brokerage to where it's still gaining a better interest rate over time.
You don't have to, but you could. What are you investing? What's the dollar amount that you're investing every month at this point? I'm sorry.
I'm confused by that. Did you tell me that you're still putting money into investments? Oh, I just do a one-time dropin after um the first of the year because you've up to like april so i just get that to our financial advisor 16,000 eight for him my husband and eight for me okay 16,000 every year okay okay got it okay so you're doing that i mean i could give it to her monthly if i wanted to i could give it to her monthly.
If I wanted to, I could give it to her monthly, but yeah. Okay.
Then, you know, I think that, I mean, tell me if I'm wrong, but I think a budget is what's going to unlock all of this. I think so.
I think at the heart of the question though, Margie, from what I heard, it was you're trying to get you and your husband on the same page. You're using frugality and you want a little bit more of a plan.
You want to get ahead a little bit more. And he's going, man, I kind of want to enjoy life.
We got enough. Is that the tension? It is.
And I keep saying every time he wants to go out or, you know, we have a couple of kids with a grandchild and, you know, if we all go out to dinner, that's easily $200 in a week. You know, we're more than, you know.
Okay. So let me, so I think everything that Jade said is spot on.
And I think that what she's saying is absolutely the key to you finally getting you and your husband on the same page with the budget. If you treat this budget for him as not this frugality play, but actually an intentionality play.
In other words, he's just, he's kind of it's tension every time you try to say hey i'd like to be a lot tighter all the things i mean jay gave you the way to do it but i think to get him on board it's less of a message of being tight and frugal it has a i think it's got an emotion on it that he doesn't like and i don't think it's to break through. This is my hunch.
But if you come at it and say, hey, this is going to allow us to spend like you want to spend, but still we make the progress in these areas over here. And I think by doing what Jade told you, so it's everything she said, all I'm saying is the way you couch it.
This isn't manipulative. It's just speaking to his desire to live.
He wants to live. See, I hit the nerve.
That's why you're laughing. Well, yeah, because we're not, we take one vacation a year.
We're not travelers, but we do enjoy a vacation. I think that you're doing better than you think you are.
Because when I plug your numbers and I go, okay, she's 60, he's 68. He's going to bring in 6,200 forever until this point on.
If you continue that on for the next seven years, you're going to have what you're doing right now. With the investing that you're doing right now, you'll have almost $1.4 million.
Right? So if you just lived off the interest, which was 140,000, I'm not accounting for inflation. That's far more than you're earning now.
So you don't even have to live. You could live off of 70,000 and be exactly where you are now.
You are good mama. And just meet him in the middle.
The budgeting is for planning and intentionality, but give him some space. Give him his, you know, fund, whatever that is.
You guys put it in the budget, and that way he's got some margins, and you guys are okay. Fun stuff.
Really fun call. All right.
We got to take a quick commercial break because we got to pay them bill. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all i don't understand this john why don't people want to take care of their family they think they're not going to die or something well i used to be one of those guys i didn't even think about it and one of my buddies said hey the only reason to not have life insurance is if you hate your wife and kids and i immediately went and got term life insurance that's a gut decades, Dave, I've sat across people who've lost a spouse.
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Welcome back to The Ramsey Show. I'm Ken Coleman.
Jade Warshaw is with me. We're here for you,

America, 888-825-5225. Let's go to Newark, New Jersey.
Jeremy is there. Jeremy, how can we help? Hey, how are you guys doing? Great.
How are you, sir? Better than I deserve. Oh, I like that.
I should use that. Yeah, right? Okay, so basically, I'll try to make it quick.
Right now, I am working a job in construction. Last year, I I made about 150,000.
Um, but I have an opportunity, I guess you could say in the same field, the same construction. But the thing is, I'll be making significantly less money, I guess in the first couple of years, but then it'll kind of even out.
And then I'll at some point make more after I think like four years. Um,

the new position would, yeah,

the new position would be a lot less labor intensive,

a lot easier on the body. Okay.
Um,

people that are in my role right now in my current company,

maybe the guy who's been here the longest has been there for like 10 years maybe the people

i talked to in the other position have been there for like 30 40 years okay so so it's gonna be easier on your body as a pro uh looks like it has more longevity is a pro a 40 cut is not a pro and no and i i'm a guy that has entertained things like this before um

um A 40% cut is not a pro. And I'm a guy that has entertained things like this before, but for years.
So to me, the question and the only question that I need an answer to on this is, can you absorb that? Is it taking you to a different state or cost of living? Or you've got so much margin in your life that 40% won't really be obvious in a painful way. That's what I need to know.
Can you sustain that? I would have to cut a lot of stuff, which I'm perfectly fine with doing myself. Are you single? I'm not single.
Me and my girlfriend have been dating for a few months now. Well, you're single as far as I'm concerned.
She doesn't want me to take it because she's used to it. Right.
My point is, you're not in a marriage situation and you don't have kids, right? Right. Do you have debt? I'm sorry? Do you have debt? All I have is a car loan that I actually got once I got this job.
I got a little excited making the extra money. So before this job, I was making maybe like $40,000 to $50,000 a year.
Okay, so this was a big jump for you, a major jump. So what are you making now? Well, my salary, I guess if I were to work 40 hours a week, would be around 120.
I guess last year I did a little bit of overtime, so I made 150. Oh, okay.
Yeah, I just, I'm going to tell you that you need to be looking for other opportunities that don't require a 40% cut. I understand the physical toll on the body.
I do get what you're saying there. I see the longevity play.
If I were in your shoes before I did this, I would be making sure that there were no other better options. And I don't believe that that's the case, Jade.
I just don't think that's the only option he has. I'm just trying to understand.
So you got this gig that it's paying more than you were making and you got excited, got the car. This other thing came along.
Were you looking for something else? And if so, what was the main driver? Was it the physicality thing that you were like, I can't keep doing this to my body. I got to get out of this.
Is that what happened? Or did that just happen to be, you know, part of this? Well, I work in construction. I'm an operator, right? But I'm not, like, running.
I'm not. How do I say? I'm not running in, like, an excavator or anything like that.
I'm more operating, like, a truck. I'm just getting.
What I'm trying to get at is for you to tell us why you want to leave this job. Because if you can't articulate a clear reason, then what's the point of leaving it? Yeah, I don't feel like you're in an emergency situation is what she's getting at.
Like this feels like. No, no, no, it's definitely not an emergency situation at all.
It's more like what can I see myself doing in the long run? It'll be part. Oh, so I should mention also this is a union job.
It'll be part of the same union, just a different kind of like sector, I guess you can say. Well, I'm going to tell you right now, I am never going to tell somebody to take a 40% pay cut and sit four years in that pay cut to get to move up in a union.
It's too risky. I'm not going to put my future in the hands of the union.
Sorry. I'm going to catch hate for that, but that's just what I believe.
It's okay. I get it.
It wouldn't be a 40% pay cut for four years. The first year would be 40, then next year 30, next year...
Oh, buddy, you buried the lead. You didn't tell us that.
Oh, sorry. Yeah, yeah yeah so it raises 10 every year 10 percent yeah well yeah i go up 10 every year until i'm at the 100 percent um i personally wouldn't okay here's forever here's my ruling i'll let jay get the last word on it um because i i've i've heard enough i personally would not do this um however, from giving you advice, if you believe this is your best ladder for the future that you want and you can absorb the cut 40% one year, then it's only 30, and if you can absorb that not going to debt and you got enough margin to live comfortably, then I wouldn't hate it, but I would not do it that's it sounds like i'm splitting the baby but i'm not no i get it this is what do you say i want to know i want to know what you owe on the car i want to know what you owe on this car oh okay so on my car i owe about 30 um my plan was if i were to do this i would want to pay off my car before i even consider doing it okay um i I'm fine with that caveat.
You scored brownie points right there with Jade. You scored some points.
I'm fine with that caveat because what's the payment on the car? Actually, the payment on the car is about $700 a month. Exactly.
And so you're going to feel that. That's $8,400 a year, pal.
Yeah. Yeah, you're going to feel that if you take this other job.
And so that would be my, you know, caveat to this is, yeah, pay that thing off. Would you do it personally? I'll be honest.
I don't feel like you've made it very clear, Jeremy, what this job is really going to do for you. I'm not sure that, and I'm sure maybe you know it deep down inside, but you didn't make it really, really clear to us.
So I'm still struggling with why it feels like something you need to do. I feel like it's something that I could see myself doing longer than what I'm doing right now, especially with like...
Yeah, but see, that's great. Like I said, my...
Okay, I'm interrupting. I'm sorry? I'm interrupting because my partner figured it out.
She got to the core. You're just looking at this as this is good.
This is good long-term. We want great for you.
What's going to make Jeremy get fired up on a Monday morning 20 years from now? I don't think this is it. Am I right? Well, I'll be honest.
This has been the only job I've ever had, like the woman right now, where I'm actually excited to go to work. And when I look at the other people doing their thing, I look at them like, I wish I was in their position.
And even though I love my job so much, I still kind of wish I was in their position. Okay.
That's all that we're getting at. Okay, now, Ken, you can.
Well, I mean, that's what you were getting at. And kudos to you.
That's what's what i teach and i believe it's like is this the long-term play and a long-term play that we go i'm excited about this not it's a good job it's okay i love my job yeah so you do love your job okay all right then we've spoken with like half of what it is now i would still love

it if it's the difference between i love it or i love it more than you go with you love it more

yeah all right yeah well there you go get your house in order financially uh before you take

this move because you don't want this you don't want this to be you don't think okay this is

going to be fun and then you get in and you go oh this is a lot harder than i thought this is i call

it my half marathon decision i thought oh this will be a great test yeah and it'll be fun training and it'll be all these things yeah and then your boy got no it wasn't your boy got into it and was like i'm a grown man why am i out here running for two hours on a sunday afternoon instead of laying on my couch watching golf yeah but i didn't it wasn't it wasn't grit was worth it to me. There wasn't anything.
In other words. There was no payoff for you.
I thought I'd be motivated to do it, and I was motivated to get through it. Big difference.
Yeah, there is. You know what I mean? Yeah.
I'm not like you. You, this woman, folks, she is an iron woman.
I mean, you can just go run marathons.

Like, no big deal.

Ran a marathon.

Yeah, but the way you train, you're too disciplined for me on that.

I'll play pickleball for three, four hours.

Now that requires a lot of discipline. I'm not going to go running on the road somewhere for no purpose at all.

What am I doing?

I'm just trying to run back to the place where my car is.

It doesn't make any sense to me. But I digress.
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This is the Ramsey Show. I'm Ken Coleman.
Jade Warshaw is with me and we're here for you triple eight eight two five five two two five so uh i gotta give it to you jay we've got a fun email we got from nate in michigan and uh this is fun it's kind of related to a segment you've done before asking for a friend yeah asking for a friend it's whenever you want to know something that you feel you should know at this point in life.

Right.

You don't want to be today years old where you find out about something that you feel like you should have known forever.

And so instead of putting the heat on you and saying, hey, can you tell me about this?

You put it on a friend.

Yeah.

The imaginary friend.

Asking for a friend, right?

So Nate from Michigan is asking for a friend.

Listen, his name is probably not even Nate.

Yeah, that's fine by me. He says, I just wanted to know the true meaning behind the phrase cash flow.
OK, sometimes it seems like it means simply the that we pay cash for something or, for example, we cash flowed the building of our house. Right.
Other times it seems like it's a phrase that's being used in a business sense, right? Is the business profitable?

Just wondering what that means.

Okay, so this is good.

He's right.

We do kind of use it in two different ways.

Yes, 100% cash flow when we're talking about personal finance.

It means being able to use the cash that's flowing in and out of your pocket to pay for

things, right?

So if I said, oh, I bought a new car and I cash flowed it, it means that I used money that was out of usually it's monthly cash flow and said, yeah, I have enough in my monthly money to cash flow this. I don't need to dip into savings.
I didn't need to borrow any money. And I used the cash that I had on hand.
But there is also a cash flow that we would say in business sense, and it's much different I would just say that in business sense when we say cash flow we're talking about the movement of money in and out of the business right so we're talking about that flow of money it could be things like inventory or supplies or operating expenses or product sales it's money flowing in and out of the business and again all of those things are things that we're paying for with the cash from the business. So and it's happening over a period of time.
And so it's still this idea that whatever it is that we're paying for, we're using cash for it, whether in a month's notice or over time with cash. So hopefully that provides clarity.
I mean, obviously, the best way to take control of your cash flow is to have a budget. And when you do that, you can see how much cash flow is at your disposal.
So you could do that with every dollar if you don't already have it. It's a good, good thing to have.
And I got to tell you, anytime you can cash flow something, it just feels better than pulling it out of savings. I know the savings is there, but I despise.
I'm with you. With a deep soul hatred.
Yes. Pulling money out of the big fund, the emergency fund.
I agree. I don't like it.
It's not even. I try to cash flow everything.
Yes. Yeah.
Even something that is a legitimate emergency, I'm like, no. Yeah.
Oh, yeah. Never.
Yeah. I get it.
That's how I got a free roof, by the way. Yeah.
Tell us more, Ken Coleman, about a free roof. Short answer is, had to replace our roof.
Not thrilled about it. But hit me with the free part.
So I started thinking, I got to get this situation. I don't want to pull out of that.
So I was like, so the guy comes up, once he wants to do the roof, I said, look, here's the deal. We're very connected in the neighborhood.
You do a good job. I help you get business.
How do you feel about that? He says, tell me more. We talk.
Then he says, all right, I'll tell you what, I can get it to a point where it's just your deductible. So I thought, okay, I like that.
So he calls insurance up because insurance had previously denied us. He gets on the phone with him, makes the case.
That's great. Insurance says we'll cover it.
Then it's a deductible. So I go back to him and I go, how about you guys eat my deductible? I get the free roof.
And in turn, I promote your company in my neighborhood through some social and through some key people that I know. Yeah.
He says, I'll do and guess what we've got him four different roofs so I've I've I just thought I don't want to touch then I got aggressive like so I went from I don't want to come up with better ideas and I didn't want to have any cash come out so I like took my shot well the worst he could say is no yeah so guess what he's now had four roofs that I'm aware of that came directly from us. Now he's in the neighborhood.
So I'm just saying. Next on the list is you start taking a cut.
Where there's a will, there's a way. Yes, sure.
Where there's a will, there's a way. That's true.
That is very true. That's the point of it.
Forget the details of my story. You're exactly right.
I started trying to get creative with how I wouldn't have to touch my emergency fund. Because it came out of the blue.
Like it was a problem we didn't know about. So now I'm like, come on, man.
Ken, good job. That's all I can say.
Fun stuff. Sean is on the line in Denver, Colorado.
Sean, how can we help? How are you guys? Doing well, sir. What's going on? Good, good.
So my question is, my wife and I, we had a couple issues with the bank and our mortgage, and our mortgage rate is actually increasing to a point that it's, this is the second time it's increased, and it's getting to a point that the monthly payments are getting a little steep. And so we do have about $35,000 in savings.
Not sure if that's usable in this case, but not quite sure what to do next. Is this an adjustable rate? So it actually started out as a 30-year fixed.
We were at 3.8%. And the bank called us a couple days before closing and said, hey, we accidentally wrote up your loan documents for a stick built home and you guys have a manufactured home.
So we're going to have to rewrite those. So they did.
And we had to sign again. And that was about a month's difference.
So our rate went from three point eight to four and a half. And then about a day before closing, they called and said, well, you know, our bank sells these mortgages and nobody wants to buy this one.

So we're going to have to drop you guys again.

But they had a third solution.

And my wife actually works for this particular bank.

And part of the employee benefits package is they help you get into a first home.

Okay.

Which sounds good.

And so what they did is they said, okay, we'll go ahead and we'll get you guys a mortgage. We'll keep you at the four and a half percent.
Okay. And in two years or excuse me, in three years, you guys can go ahead and refinance with us.
We'll keep your rate and we'll lock you in for 30 years. It'll be great.
Okay. And so it's the end of those three years now and um should have read the loan documents a little closer they they aren't going to keep the rate it's actually going up um oh man oh man so it had to lock in at whatever the rate is like is that the current rate yes yeah yes oh man so i mean it, we're still at the point that it's, it's, um, you know, affordable.
Um, well, tell me, tell me numbers wise what it's gone up. It went from what to what? So we were paying 2,500 a month.
Um, and now it'll be 3,500 a month. My guy.
Wow. Okay.
Yeah. Yeah.
So the bottom line is how would the 35, would the 35,000 even help you? Cause you're going to have to refi theoretically. Can you? Yeah.
And so this, this is only good. What they did was, um, they came back and said, Hey, you know, we, we did make a mistake in the beginning for you guys.
So what we'll do is we'll only raise you 1% this year and then 2% next year. And we'll extend your loan for two years.
I tell them the pound sand.

That's like I said, I made the mistake,

so I'm only going to penalize you on my mistake this much.

But you're still going to feel it.

They're just spreading it.

It's like spreading out your punishment.

They're not doing you any favors.

You get one whooping today and then you get one whooping a year from now.

Is there something with the type of house because it's a manufactured house that that's why nobody wants these loans? I think so. Yeah.
Because there's only one buyer for this bank that buys manufactured home loans and they ended up being, they were full at the time. They couldn't take any more loans.
So that's what happened as well. Do you have any equity in this house at all? You know, it looks like it, when I look at the estimate online, it says it's gone up about $100,000 from when we purchased it three years ago.
If it was me, now Jay, tell me if I'm being too aggressive here, but I'd get out of this house instead of keep messing with this. If it's true that he's only got one lender who will play ball with him, he's going to keep getting jacked around here.

Well, I have a couple questions.

At the end of this three-year term, whether they do it all at once

or over the three-year, you get slapped a little bit each year.

Is that the end?

So we only have two more years, and then we have to, that's it.

The loan's matured, and we either need to refinance with them

or with somebody else. Preferably.
Do you love with somebody else properly 25 seconds do you love the house yes okay your choices are you find a way to get a thousand dollars more in your income because you can't if you don't do that this is going to drain everything so if you don't find a way for you and your wife to bring in 500 a piece every month that's sustainable, you can't keep this house because... Sell it.
Yeah. I'm all for selling it, man.
And rent for a while and get yourself a house that doesn't have these kind of limitations. Or maybe it's you paying off debt and freeing that up in monthly payments.
Yeah. This is the Ramsey Show.
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This is The Ramsey Show. I'm Ken Coleman.
Jade Warshaw is with me, and we're thrilled to have you. 888-825-5225.
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All right, to the phones we go. Patricia is joining us now in Long Island, New York.
Patricia, how can we help? Hi, thank you. It's great to be talking to you.
I actually just heard of Dave Ramsey like six or eight weeks ago, and I've been listening compulsively since then, and a lot of it has resonated with me. Great.
My deal is I went through a devastating divorce about 18 years ago. It left me financially stripped.
I've worked hard since then, put the kids through college on my own, and what's killing me now is the Parent Plus loans. I just paid off my car from having listened to Dave, so thank you for all that advice from your area.
And I only have one other debt, which is $2,000. So these Parent Plus loans are about $87,000, and I'm already not a spring chicken.
So the retirement years are scaring me to death, so I'd like a little direction. Okay.
I'm curious about the kiddos that you helped out with these loans. What are they doing now? Well, my daughter is now in a good spot, but she just began, so that's not, you know, they have their part of their loans and I have my part.
Okay, so the 87 is your deal, just yours? Yeah. Okay, all right, I'm sorry, I should have asked that right out of the gate.
Sometimes I'm wondering if parents are paying everybody else's or just yours, so okay, all right. So you've got the 87.
What's your income?

It's just under 70.

Just under 70.

Okay.

And that's your,

is that your only debt at this point?

You mentioned you paid off the car.

Is this it?

That and a $2,000 or something. Just these parent plus loans

and then another $2,000 loan.

Another $2,000 loan.

Okay.

And that's just a personal loan?

Yeah. Okay.
All right. And what do you have saved? Do you have anything saved? Yes.
I started a high yield savings account from you all's advice. I have a couple of IRAs.
an IRA, one is an RRA. I have

checking and savings. What's in your IRA? And what's in your HYSA? The HYSA is five because I just started it.
Five K? The two IRA about $40,000. $40,000.
Okay. And anything else, any other money anywhere we should know about? Well, checking is about $45,000.
Saving is about $290,000. When you say $45,000, you mean $4,500? Like, tell me real, $4,500, $45,000.
Sorry. $45 45,000, 45,000 in checking.
Yeah. Okay.
Another savings account is 21,000. Okay, good.
And that's pretty much it. Okay.
So the good news, what I'm really excited about, Patricia, is you've got money laying around, which we need. So if I'm, if I wrote everything down correctly, obviously the 40,000 that's in the IRAs, we can't touch that.
But you've got 45,000 sitting here, plus another 21,000. So that's giving me 66,000 right there.
Yeah, that's the majority of these bills knocked out. And technically, because you're in debt, I know you're not going to like this, but because you're in debt, that HYSA needs to go down to $1,000, and we can take the other $4,000.
And now suddenly, you've paid off $70,000 of debt in one day. Yeah, but here's the thing.
When you called in, you didn't say, my biggest problem is i'm scared to spend my savings my biggest problem is i'm afraid that i won't be able to you said the biggest problem is these student loans and you you're right those being around your neck is the biggest problem so if you can knock those out how old are you i'm 68 68 if you can knock those out and get them out of your out of your hair how much money a month does that free up in payments uh high 700s yeah high 700s yeah think how much you what you can do six you can live off that you can invest some of that like that really does clear things up for you now then once we pay off this debt now we have now we have to look at, okay, like you said, long-term, what's the retirement strategy? But A1 is we've got to get out of this debt because if we've got this kind of debt, who cares what the retirement strategy is? That's right. I know, I know.
I've just been living in worry. Yeah, so I think that- So long.
I think paying these off is going to be your best bet and it's going to be painful, but then we have to turn around and say, okay, what's your living situation? Are you a buyer? Are you a renter? What's going on there? I rent. You rent.
Okay. So your goals are to try to find stability in this situation.
So right now the debt is causing instability. Probably being a renter is causing a level of instability.
My guess is that when you retire, you'd probably want to buy something and have that as a fixed number on your budget. So I think those are the big goals here.
I think in your mind, you have to go, okay, I'm working. I'm working another six years or so, and I'm piling away as much cash as I possibly can to try to make that happen.

But first on the list is these student loans and, you know, making sure that you and your kids are

sticking to what you agreed to pay because are they sticking to their end of the bargain?

Yeah, as far as I know, we don't talk about it much, but...

I think you do need to talk about it because what would be...

Are both of their names on it or just yours?

Well, no, these are just Parent Plus loans for me.

Okay, because if they don't pay theirs, then it's still affecting you, right?

And at that point, it's like, well, what was the point of you even paying your part

if they're not paying their part, right?

Well, theirs are separate from mine. Oh, okay.
I thought you were saying that they had agreed to pay part of the Parent PLUS loans. Oh, no, no.
We split everything from the beginning. They have their loans and I have mine.
Okay, I see. Well, in that case, yeah, full speed ahead on paying off this $87,000, clearing your name on that, it's going to free up so much more income in your month-to-month mental space're going to have a lot more peace.
And then you can really clear and see clearly and go, OK, what to do with this forty thousand? The good news is it's tucked away. It's going to continue to grow.
It's not a lot of growth. But with that, with possible social security, you've got you've got your work cut out for you, but at least you're making steps forward in a situation like this.
There's always a measure of peace that can be acquired. So you're going from where you are now, you pay these loans off, you've got even more peace, you start figuring out long-term what you want your living situation to be, you've got even more peace.
And so we're just taking it one piece at a time. Yeah.
And listen, Patricia, there will come a point where, and you got to think about selling stuff, making extra money, and you go, okay, what can I do every month? Could I make $1,000 a month in additional money that would go towards the loan? Or is it $2,000? You start to play with these numbers, and at some point when you begin to deliver on this, you're going to see the momentum, and you will be able to get rid of this, which will give you a chance to retire with some dignity. So you're going to have to be intense.
But this is is actually very doable but a lot of intensity over a short amount of time will get you there yeah i've tried you know the side hustles and no you're listening you're doing it you're doing your car off how expensive was that car loan you told us about 17k come on so you're doing it it's not like you don't have any track record here. So get your chin up, Patricia.
All right. No, I know.
I've done a few things right and I've never been one who have depended on credit cards a lot. I don't like them.
You're a good lady. You're a good mom.
I've done a few things right along the way. Hey, no shame in your game.
I'm not kidding you. Shame will hold us back.
Yeah, that's right. breaking through stuff like this.
So you're okay. No shame in your game.
I'm not kidding you. Shame will hold us back.

Yeah, that's right.

From breaking through stuff like this.

So you're okay.

No shame in this show at all for you.

That's why we do this.

This is The Ramsey Show. Thank you.