Your Future Self Deserves Better Choices Today

Speaker 1 Live from Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

Speaker 1 I am Rachel Cruz, hosting this hour with my good friend and best-selling author, Jade Warshaw.

Speaker 1 And we are answering your questions so give us a call at triple eight eight two five two two five we'll talk career relationships money anything and everything so give us a call we're gonna start off this hour with Chris in Dayton Ohio hey Chris welcome to the show

Speaker 2 hi thank you for having me absolutely how can we help

Speaker 3 So my wife and I recently had our first child. She is a daughter, which is

Speaker 2 awesome.

Speaker 3 Thank you and my parents live in Columbus Ohio which is about an hour and a half away and naturally they would like to see us and their grandchild more

Speaker 3 we are looking to upsize our home and we were looking in the Dayton area originally because cost of living we can afford it they then offered to give us an additional the difference between the

Speaker 3 prices of the home in Dayton to Columbus that would go towards our down payment making it affordable if we moved to Columbus. That sounded good, it would be a gift, not like a loan.

Speaker 3 Um, but then they mentioned that they would have to make it even and change the will slightly so that money was even with my sibling.

Speaker 3 So, I got an extra a hundred thousand, my brother would get a hundred thousand on the will, etc. Yeah, then I started booking it as like an interest-free loan against myself in the future.

Speaker 4 You're saying because

Speaker 4 you're saying because if you had received it as inheritance, you would have done what with it?

Speaker 3 Well, it's not that I would have received it as inheritance, I would have done anything with it.

Speaker 3 It's just that it looks like I'm borrowing from my inheritance, which is weird because my wife and I worked really hard not to be in debt at all.

Speaker 2 Well, I wouldn't think of it as borrowing.

Speaker 4 You're just getting a piece of it earlier

Speaker 4 for something that you want to spend it on.

Speaker 4 It's not a loan.

Speaker 3 So you think that's fine, man?

Speaker 4 I do.

Speaker 4 It feels like a gift.

Speaker 1 Very much so. And as long as are your parents in a good financial financial situation to give you this cash and it not hurt them.

Speaker 2 Yeah. Yeah.

Speaker 4 Listen, I hope that one day, I mean, one day I will be there when my kids buy a house and I'll be like, here's some cash to put towards your down payment. That's what I planned to do with Sam.

Speaker 4 And so I don't think there's anything wrong with this.

Speaker 4 If it's a place that you want to be, it keeps the payment where you had it originally. I mean, Rachel,

Speaker 1 no, not at all. I mean, I mean, and if again, you trust there, no strings attached, you know, that it is a free and clear gift.

Speaker 1 Um, and what's interesting, Chris, there's a book called Die with Zero, and it's a really interesting read.

Speaker 1 And one of his takes that majority of people cannot do, a lot of people are not in your parents' position to have the cash flow to do something like this.

Speaker 1 But he was saying in the book, if you did, that actually your kids would benefit more from your money in their 20s and 30s than they would when they're 60 and 70 when they receive the inheritance.

Speaker 1 So it's actually, I would see it not as borrowing against your inheritance, It's actually putting you in a better position 30, 40 years ahead to get you, getting your house paid off that much faster to invest that much more for your kids.

Speaker 1 Does that make sense? Like it almost is a better use of that money the earlier you get it if you do something wise with it, like put it towards real estate. Does that make sense?

Speaker 3 Yeah, that makes sense. And we are in our late 20s, so that kind of checks out.
Yeah.

Speaker 1 So, um, this is great.

Speaker 4 I love this for you. I feel like this is exactly what it's all about.
Like it's all about having your money in order so that you're able to put the next generation in a better position.

Speaker 4 And so this is really money doing its, doing God's work, doing what it should.

Speaker 1 Oh, well, I hope that helps, Chris. And I would say, too,

Speaker 1 you know, to something to think about for yourself, Chris, is, you know, are you in a position emotionally to be okay with being given money?

Speaker 1 Because I know that there's a level, you know, not to stereotype, but, you know, even some dudes, like, I don't know, there's, there can be something to feel weird.

Speaker 1 I'm like, oh my gosh, I'm getting helped by my parents. But what I would say to that, again, if the relationship is healthy and good, like put the ego aside, receive the gift.
Yeah.

Speaker 1 Because that's, yeah, I mean, I think you're, I think it's fine.

Speaker 4 I feel like it could definitely feel different if it's, if you're the, I'm not trying to enforce gender roles on anybody, but I feel like it could feel different if you're the guy and it's like the mother, your, your wife's family in law.

Speaker 4 Yeah, I feel like it could feel different.

Speaker 2 There could be a difference. Totally.

Speaker 4 Listen, a gift is a gift. It's a blessing.

Speaker 1 Yep. That's great, Chris.
Awesome. Okay.
Up next, we have Catherine in Portland, Maine. Hey, Catherine, welcome to the show.

Speaker 2 Hi, thanks for taking my call. Absolutely.
How can we help?

Speaker 3 So we live in a single-income household. I'm a stay-at-home mom.
We do have side hustles,

Speaker 3 but basically we've been in a like rent, wash, repeat cycle our entire marriage, four or five years.

Speaker 3 where we are debt-free.

Speaker 3 We are able to save a few hundred dollars every single month

Speaker 3 and we're trying to save for a down payment on a house.

Speaker 3 But pretty much what happens is we either get hit with like we had my daughter two years ago, so we had a big medical bill or we had to buy a new car,

Speaker 3 you know, new to us,

Speaker 3 but it's like that savings gets depleted and it basically takes us, you know, a couple years to save up,

Speaker 3 you know, double digit money and then we have to spend it on something big.

Speaker 3 So I just see that happening again in the next couple of years.

Speaker 3 Like we have our cars, but when I look at saving for a down payment i think it's going to take at least five to seven years maybe longer and i'm looking at our cars and i'm like well we're going to need to buy a car

Speaker 4 i mean what you're talking about advice on how to do that What you're talking about is so common, whether it's saving up for a down payment, Rachel, or if it's just, I'm trying to get three to six months saved, whatever it is, I find that when your income is low, you've got to do something that's going to create momentum so that you can like build up that speed to get over that wave, right?

Speaker 4 And so for you guys, it might look like building up income, working extra for a season so that you can really get past those hurdles that you see and kind of get that footing under you.

Speaker 4 Because the truth is, all the things that you're talking about, I mean, that is life, right?

Speaker 4 Cars break down. It's time to replace the, you know, having babies.
Yeah, having babies. I mean, all of that is just kind of part and parcel to life.

Speaker 4 And when you have a lower income, you're right. It does, it feels like two steps forward, one step back, right?

Speaker 4 So you're going very slowly um and i challenge you to say where where is an area that you can pick up work i mean you said you're a stay-at-home mom it sounds like you have a two-year-old what could you do to add to the income what could your husband do

Speaker 3 yeah i he's working overtime i have side hustles i don't i'm especially how much you guys make in a year catherine

Speaker 3 about 65 000. okay

Speaker 4 And then, yeah.

Speaker 4 The other question is where you're renting now, what percentage of your income? Because it could look like, okay, okay, we're going to sacrifice where we're renting now.

Speaker 4 Maybe we go to a smaller place and that frees up enough margin that we can get this done a lot faster.

Speaker 4 So, I would just challenge you to look at some of those areas that maybe you thought were untouchable because we all have those areas that we kind of like hold close. That's like, I'm not changing.

Speaker 4 You know, this is my apartment. We're comfortable here.
I'm not moving, or this is my schedule, it works for me, I'm not changing it.

Speaker 4 And unfortunately, a lot of times our opportunity rests in those areas where we're comfortable.

Speaker 3 Yeah, so let me ask this too. So in like the baby step list, it says

Speaker 3 to

Speaker 3 me.

Speaker 1 Oh, sorry, Catherine, you're good. You're good.
Go ahead.

Speaker 3 Sorry. In the baby step list, it says that you pay off your debt and then you start investing in retirement.
So like my husband and I,

Speaker 3 he works for the state and because of that, he has to opt into like the state retirement system.

Speaker 3 And we're like, okay, so we're.

Speaker 1 okay. So sorry, Catherine, I'm gonna have to put you on hold because we're about to hit a hard break.
So, yeah, if it if it is

Speaker 1 dictated to you, then cut that in half, and half of that would go towards your 15%, if that makes sense. So, sorry to cut you off to get you there, but um, I hope that helps, Catherine.

Speaker 1 Thanks for the call

Speaker 4 for free tools and resources to help you reach your home goals, go to ramseysolutions.com/slash real estate or click the link in the show notes.

Speaker 1 Welcome back to the Ramsey Show. I am Rachel Cruz, hosting this hour with Jade Warshaw, and we are taking your calls at 888-825-5225.
Up next, we have Richard in Tampa, Florida. Hi, Richard.

Speaker 1 Welcome to the show.

Speaker 3 Hi, thank you for taking my call.

Speaker 2 Absolutely. How can we help?

Speaker 3 The reason I was calling is I

Speaker 3 just recently changed my Fidelity 401k account, and

Speaker 3 I've actually brought it up to 75% of my income. And

Speaker 3 we have a military pension and my wife works. And so, but my question is, we recently purchased a brand new motor home, and that is our residence.

Speaker 3 And so we have no other bills other than the motor home itself. And we weren't sure whether or not I should be investing like I am into my 401k.
I didn't mention that I am I'm 58.

Speaker 3 I would like to retire at 62 as well as my wife. So we're just a few years out from that.

Speaker 3 And so we're just going. I wanted to get the money into the market as early as I could in this new year.
And so we're, you know, I just upped it up to 75%.

Speaker 3 I wanted to see if that made good sense or not, if it did make good sense.

Speaker 1 How much do you have currently in your retirement?

Speaker 3 I have $117,000 in my 401k, and my wife has about 13,000 in hers

Speaker 3 and

Speaker 3 yeah I guess that's about it and then we do have our high yield savings that we're using for we have money in there for our

Speaker 4 emergency funds and the 75% what what what does that amount to every single month that you're putting away

Speaker 3 well right now it I I haven't seen my pay slip but I'm somewhere in the in the proximity of sixteen hundred to eighteen hundred every two weeks is going into that okay okay and then I'm I'm getting a paycheck of like three $390, hundred

Speaker 3 close to $400

Speaker 3 from KD. And I put that into the high-yield sales.

Speaker 1 And then you're using your wife's income for you guys to keep afloat bills and stuff. Is that right?

Speaker 3 And the military pension.

Speaker 2 That's correct.

Speaker 1 Okay. And the military pension.
Okay. Okay.

Speaker 1 You know, I'm not mad at a catch-up, considering your age and you guys want to retire in the next, you know, four, five, six years.

Speaker 1 Because you don't, I mean, $117,000 won't get you into retirement. So I understand

Speaker 1 the aggressive catch-up

Speaker 1 to get there. My only concern, Richard, is: do you guys own a home as well as having the RV?

Speaker 3 No, we don't.

Speaker 3 We actually sold our house a couple years ago and relocated to Tampa.

Speaker 2 Okay, where did that money go from the sale of your home?

Speaker 3 Well, we paid off our car and then

Speaker 3 we bought another camper and we paid cash for that. So, that wiped us out of all that.
So, we became debt-free at that point. Okay.

Speaker 1 And, and so So I'm just thinking, okay, so my only hesitation is,

Speaker 1 and again, you can do this later through your investments after you retire. But one thing to consider is that the one line item in your budget going into retirement that we want stable

Speaker 1 is housing. And I just wonder if a camper is going to be literally your housing until the end of life.
And it probably won't be.

Speaker 1 So I would be thinking towards we're going to have to buy something

Speaker 1 very small and inexpensive, but coming out of this retirement savings eventually, and again, it may be in 15, 20 years, but think about the market continues to grow.

Speaker 1 So housing is only going to get more and more expensive.

Speaker 1 So that's my only concern about this plan in general is something that just to be thinking about that, you know, your primary residence is something that's going down in value in a mobile home or in a camper, and you probably aren't going to live in that, you know, for the rest of your life.

Speaker 1 So I would be putting, I would be thinking about housing long term.

Speaker 2 What's your pension? Right.

Speaker 4 What will you receive monthly?

Speaker 3 Right now,

Speaker 3 well, with disability, it comes out to $2,500 a month.

Speaker 4 Okay. And what do you, at this point in you guys's life, what's kind of that number that makes your budget run? Just kind of your

Speaker 4 normal month-to-month budget?

Speaker 3 Yeah, our month-to-month budget, and this includes putting, we have money that goes to our grandkids. We save for them.
And then we also have

Speaker 3 extra extra that my wife has out of the budget. But it's $50, like around $5,500.
But that also, out of that, there's $800 of it that goes into savings.

Speaker 2 Okay.

Speaker 3 Into savings. So it actually could be a lot worse.

Speaker 4 It'd be like $4,800, maybe.

Speaker 2 Or $4,600.

Speaker 3 Yeah, something like that. Okay.
What it costs to operate.

Speaker 2 And that includes the...

Speaker 3 the payment of the motorhome. And

Speaker 3 we do use the every dollar. We're religious about that.

Speaker 3 We love that app.

Speaker 4 what's the motorhome payment

Speaker 4 thirteen thirteen hundred dollars a month okay yeah I agree 100% with Rachel unless you guys have decided that this is just your way of life forever and you have just given the finger to home ownership

Speaker 4 I agree with what Rachel is saying I think you do want to stabilize that and you probably want to get into something that you not only that you can afford right now but you'll be able to afford in the long run if your income changes, if you stop working, that sort of thing.

Speaker 4 And so you guys have a lot to think of here because 2,500, while it's a stable amount that'll be coming, it's not very much, right?

Speaker 4 And I do want to, I mean, at this rate, if you keep saving at the rate that you're saving, yeah, you'll be close to a million, a little less, $850, maybe.

Speaker 4 And so I see why you're trying to kind of speed that process up.

Speaker 4 Now is the time that I'd be putting the pedal to the metal and bringing in as much income as I possibly could to save up, not only for a down payment, but keep investing that 15%

Speaker 4 and get this thing done.

Speaker 3 So are you saying that you would recommend that I back off my contribution or would you leave it at 75 and go

Speaker 3 or are you saying

Speaker 4 well I just don't see how you're going to be able to save up for a down payment on a secure home at 75%

Speaker 4 unless you see a way that I don't see.

Speaker 3 No, no,

Speaker 3 I get it. I agree with you.
I just I wasn't sure whether or not I needed to back down my my contribution to the My Fidelity account and then go aggressive.

Speaker 3 I have contemplated that, but I can't do that.

Speaker 4 I mean, you could do up-to-year catch-up contribution, which is still not going to be 75%, I don't think.

Speaker 4 What's in the high-yield savings? What do you have in there?

Speaker 3 We have $14,000 in that.

Speaker 2 Okay.

Speaker 4 So that's a, I mean, what is that? Six months of expenses? Is that five months? What is that?

Speaker 3 That's probably about five months.

Speaker 4 Okay. So I'd keep that just like that.
And yeah, I mean, it's really going to be you balancing

Speaker 4 how much much do we need to save for a home and then doing kind of working backwards and saying okay this is what we need to save how long will it take and at this savings rate and then you say that takes too long let's you know come back further truly if you're walking the baby steps truly what you would do is you would back it all the way down to 15 percent save up for that down payment and you would start like knocking away at that home payment until before you upped your um you know fidelity contribution yeah and how much is left on the camper debt wise well we we just bought it.

Speaker 3 We've only had it for about three months, so

Speaker 3 it was expensive.

Speaker 3 We have about $150,000 left on that. Okay.

Speaker 4 Yeah.

Speaker 4 The problem is what Rachel and I are asking you to do, you're kind of investing on two ends. You've got your retirement fidelity investment, but when you buy a house, that's also investment.

Speaker 4 It's something that's going up in value. So while it may feel like you're pulling away from your 401k or fidelity investment, you're actually kind of diversifying in that way.

Speaker 4 Whereas now you're putting money into something that's going down in value. And do you see what I'm saying? So Rachel and I are giving you two income tracks as opposed to just one.

Speaker 3 Yeah, that makes good sense. I like that.

Speaker 2 All right. I hope that helps, Richard.

Speaker 1 Thanks so much for the call.

Speaker 2 Thank you for taking my call.

Speaker 3 Yeah, thank you so much. That's good guidance.

Speaker 3 I appreciate it.

Speaker 1 Absolutely. Well, thanks so much.
And, you know, and

Speaker 1 when we talk about that you should not own anything with motors and wheels that is more than half of your annual income.

Speaker 1 Richard's going against that, but this is where he's primary living, which again, from a long term, I don't recommend because unlike real estate, if you go and buy, you know, a two-bedroom condo somewhere, it's going to go up in value.

Speaker 1 That's right. Where a camper is going down.
And so to put all your eggs in that basket at this age, it is scary, Richard. And so, yeah, I mean, I don't think I realized you owed that much on it.

Speaker 1 So almost backing down, paying that off or not.

Speaker 4 I wouldn't pay it off.

Speaker 1 I just, I think they need to get into a house sooner than later like as quickly as they can afford or even selling the camper and realizing renting yeah yeah i don't know i don't know there's some some options to look at well thanks richard again for the call this is the ramsey show

Speaker 1 With the last caller, we were talking about real estate and what that looks like to start saving up towards a home.

Speaker 1 And you guys, when it comes to buying and selling your home, there's a lot of decisions it can feel very overwhelming but you don't have to go that through that process alone we created ramsey's real estate home base so this is a place with so many resources and tools like calculators start-to-finish guides how-to articles a podcast a book a video course like everything around the subject of real estate because again buying and selling it can just it can be an overwhelming process and the more information you have that you understand and you know the more clarity you're going to have walking into that, which is huge.

Speaker 1 Like you, you want to be armed with so much information before you go and buy or sell your home.

Speaker 1 So make sure to check it out at ramseysolutions.com slash real estate or click the link in the description if you're watching on YouTube or listening on podcast.

Speaker 1 Because if you need. some next steps towards your home buying or home selling process, make sure to check it out.
One of my favorite things on it is the dashboard. They have the U.S.

Speaker 1 housing market trends and they keep it updated.

Speaker 1 And it's just constantly kind of a, kind of a pulse of what's going on with interest rates, median house home prices in America, total days on the market,

Speaker 1 how many homes are for sale around the country. I mean, it just kind of gives you the snapshot picture of the real estate market.
So, again, you can go to ramseysolutions.com/slash real estates.

Speaker 1 All right, we're going to the phones and we're going to Andrew and oh, Cheyenne, Wyoming, one of my favorite, one of my favorite country songs.

Speaker 1 Hey, Andrew, welcome to the show.

Speaker 2 Hey, thanks for having me. Absolutely.
How can we help?

Speaker 3 Hey, so I'm on my wife and I, we're on baby step two,

Speaker 3 and it kind of took us a little bit to get there, mostly because we've been we've been pretty sick, both of us, for the past few years.

Speaker 3 And we're seeking some medical treatment to hopefully nip this in the bud,

Speaker 3 hopefully in a few short months.

Speaker 3 But the medical treatment that we're looking at that was recommended by our doctor is experimental and it's not covered by insurance, and the treatment is going to be between ten to $30,000.

Speaker 3 So we're kind of in a position where we

Speaker 1 oh no, Andrew, are you there, Andrew?

Speaker 2 Oh no. Oh man.

Speaker 1 Andrew, we'll give you one more second. Oh,

Speaker 1 yep. That's a bad line, I think.

Speaker 2 We're going to.

Speaker 2 Oh, there you are. I'm back.
Yes.

Speaker 2 Sorry. Oh, you're good.
You're good. My phone's a little weird.

Speaker 3 So,

Speaker 3 yes, I don't know if my wife and I should actually

Speaker 3 take out a loan or not. We really don't want to, especially since we're

Speaker 1 talking and share as much as you feel comfortable, but what's going on health-wise?

Speaker 3 So

Speaker 3 we got pretty sick from

Speaker 3 the home that we were living in.

Speaker 3 And so

Speaker 3 it's been Yeah, so it's just been a lot of stuff that's been going on where a lot of the treatments have been not either FDA approved or treatments that have been getting us better.

Speaker 3 We are better, but it's just been a really long process. So the last time we talked with our doctor, he said that we should try and do like a hyperbaric treatment, which seems great.

Speaker 3 He's had really great success with it, but the only problem is that the payment has to be upfront.

Speaker 3 And so that's the only issue.

Speaker 2 And insurance,

Speaker 1 this is obviously something more like in a natural bent, I'm assuming. So insurance isn't going to cover it.

Speaker 3 No, insurance won't cover it.

Speaker 1 Tell me, just health-wise, are you guys able to, are you able to work? Are you able to function? Like, how are you guys? You said you're doing better.

Speaker 1 I'm just trying to get a gauge about how urgent this

Speaker 1 is for you guys.

Speaker 2 Yeah.

Speaker 3 So, so we are better and we are both working right now. We make about, I want to say, close to $70,000 or $80,000 right now a year.

Speaker 2 Okay.

Speaker 3 The only problem with this is that the longer we put it off, the worse it'll get. Sure.

Speaker 2 And And so just.

Speaker 4 What's your margin every month? Like, what are you right now putting towards debt and baby step two that you could put potentially towards saving up for this or doing one at a time?

Speaker 3 Yeah, we're able to put

Speaker 3 close to $600 or so a month into debt.

Speaker 1 And how much debt do you guys have?

Speaker 3 Right now we have about,

Speaker 3 I want to say about $20,000 in student loan debt and then about $50,000 in a

Speaker 3 in a business loan.

Speaker 2 Okay.

Speaker 1 Man, this is so hard because I do feel like they're just from my own, not my own experience, but people within my close circles of friends and family even that I know, you know, when you get something, it's like autoimmune or mold or whatever, that it can end up feeling, Andrew, like there's always something else we have, like there's a long line of things that are continual.

Speaker 1 And so what I, you know, always just think about and kind of caution is I would number one, maybe get a second opinion. I'm sure you know your doctor well and trust them.

Speaker 1 But, you know, I mean, we're talking about $10,000 to $30,000, right? I mean, if it was $2,000,

Speaker 1 that's one thing. But I mean, you're, you're talking, you know, five figures going in with treatments.
And so is that a piece or

Speaker 2 all in?

Speaker 3 That would be for us combined.

Speaker 1 And is this ongoing or is it kind of a one-time?

Speaker 3 Lord willing, it'd be just a one-time, like, you know, one, one to two months worth of treatment. So it'd be

Speaker 3 20 sessions is like, is about $100,000 on the high end. So we hope to be done in about a month.

Speaker 1 Okay. So, you know, what I would probably do, because again, I feel like this can sometimes feel like a never-ending cycle.

Speaker 1 I would,

Speaker 1 and because it's not a, and I know you guys are saying, I don't want want to downplay at all the sickness because I'm sure it's just miserable, but it's not a life or death.

Speaker 1 Like, okay, I have to save my child right now because, you know, there's a, you know, like, it's not this, it's not an urgency, but it is something for the betterment of your health you want.

Speaker 1 So what, you know, what I would probably strive to do is whatever I could to get, because 10 to 30 is a big range. So I would get as close to that 10 and I would talk, negotiate doctor's bill.

Speaker 1 I mean, I would do whatever I could. to get it down to that 10.
And you guys are, you know, I would work to save a thousand a month.

Speaker 1 I would be okay okay right now because it is a health issue, maybe to pause the debt snowball, stay current on your bills, but I would bump that $600 a month up to a thousand

Speaker 1 and save for 10 months. And then starting October, November, Andrew, start this treatment.
And then hopefully by this time next year, you're through it, you're done.

Speaker 1 And then press play on the baby stuff.

Speaker 4 And maybe one of you goes at a time to see if it's helpful.

Speaker 2 Oh, that's a good point.

Speaker 4 You know, I know you're two different bodies with two different sets of, you know, but that might be a good way to say, listen, I did it. It did nothing for me or I did it.

Speaker 4 And it really, really helped. That might give you some confidence going into the next treatment.

Speaker 4 It's just a thought. Like, I don't know what you're facing.

Speaker 4 I don't know if it's headaches or every time you eat, you know, whatever it is, if it's something that's truly debilitating, but if it's just,

Speaker 4 and again, I'm not, I don't want to downplay it either, but if it's something that's more of an annoyance that you're learning to live through, that gives you, you know, there's a little bit more timeline there to get this done.

Speaker 1 For sure. And the sense too, that,

Speaker 1 you know, you don't want to prolong it too long because of what you're saying, you know, it can come back and get worse unless you have this treatment. So getting to it, right?

Speaker 1 A level of urgency, but it's also not like we have to do this next month. The only option is a loan and we're done.

Speaker 1 Like, if you can, and it's not debilitating because you guys are working and all of that.

Speaker 1 I would, yeah, I would find something because I, and I would cash flow it. And the other thing, Andrew, that's interesting is when you are working with cash,

Speaker 1 even when we're talking about, you know, health situations, it does force you. This is why I like cash forces you to look at other options, other decisions.
Like sell something.

Speaker 1 There's just other parts of your brain of problem solving versus with debt it's like here's a chunk of money this is all we're gonna do we don't really have to pit the brain power to think through other things

Speaker 1 it's just here but when you're paying with cash and you're working and saving hard like i don't know it just it forces other things to come to the surface of other options and choices that's awesome um but yeah so again i'm so sorry that is that's that stuff that is like and that's and that has been i don't know i don't know if you've ever i've just had people and it's like you you go to the next thing and then it flares up again i don't know it just feels like it's like whack-a-mole a little bit sometimes with different things.

Speaker 1 So I do want you guys to get that treatment, but

Speaker 1 because

Speaker 1 it's not life or death right in this moment,

Speaker 1 I would calm down. I mean,

Speaker 1 I would pause a little bit and save up for it.

Speaker 4 That's difficult. I remember when Sam and I were getting out of debt.
This was before the days of Obamacare and you had to have insurance or

Speaker 4 penalized. We didn't have insurance.
And one day he was pulling our luggage out of the back of the Jeep and it got caught on his finger and he broke his finger. Oh, no, and we didn't have insurance.

Speaker 4 And I was like, listen, head over to Walgreens,

Speaker 2 tape it up, tape it up. It's crooked to this day.

Speaker 4 And you know, he plays insurance.

Speaker 2 It wasn't good.

Speaker 1 Take care of yourself. Take care of yourselves.

Speaker 2 This is not insurance.

Speaker 1 This is the Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show. Up next, we have Michaela in Kansas City, Missouri.
Hi, Michaela. Welcome to the show.

Speaker 3 Hi, can you hear me right?

Speaker 1 Yes, we can.

Speaker 2 How can we help?

Speaker 3 Hi,

Speaker 3 so I have a kind of indirect financial question, if you will, not necessarily about my finances, but a conversation I would like to have about finances and my family.

Speaker 2 Okay.

Speaker 3 So just a little bit about my situation. I am 22 years old.
I'll be turning 23 on Sunday this upcoming week.

Speaker 2 Uh-oh. Happy early birthday.

Speaker 3 Thank you. From 2021 to 2024 is when I accured all of my debt to around 30,000.

Speaker 1 Okay.

Speaker 3 And so my question is, I would like to

Speaker 3 I've been taking care of it since September of

Speaker 3 last year to now, which originally was

Speaker 3 $37,000 plus, but since then I've taken care of about $7,000 to $8,000 of it.

Speaker 2 Good for you. That's great.

Speaker 3 Thank you. My concern, though, is that while I occured this debt, neither of my parents know anything about it or about my financial situation.

Speaker 2 Do they support you financially in any way?

Speaker 3 So, yes and no.

Speaker 3 My father, he doesn't live with us, but he is supportive of me. If I were to need some financial situation or some financial help, he would.
And I live with my mother and my grandmother.

Speaker 3 But considering how much I make, I make enough where I think I'm okay enough without asking for help.

Speaker 4 Yes. What caused you to go into the debt if you were in this or were you not in this living situation before? Either way, what caused you to go into the debt?

Speaker 3 Before, if you would have asked me that question, I would have made up a lot of excuses, but I've worked on it enough and made enough accountability to say myself.

Speaker 3 Come 2021, I had kind of moved out from my mother's house and lived with my ex. And so it was through some immature purchases on my end and his end.
I had set up a joint account for the both of us.

Speaker 3 And so

Speaker 3 he was taking out most of the money between how much we were both earning. And I was

Speaker 3 more so the breadwinner compared to what he was making. And

Speaker 3 I was okay with it. I would have just liked a heads up because I was working about maybe 60 plus hours a week.

Speaker 2 So he was using

Speaker 1 your money plus going into debt under your name.

Speaker 3 Yeah.

Speaker 3 I was really stupid at the end of the day

Speaker 1 Mikhail you're familiar we all make mistakes yeah mistakes are reshame it yeah it was just I was just trying to more of a clarifying question making sure I understood the situation okay so my next question is why do your parents need to know

Speaker 3 well the reason why is because my mom and I have been talking a lot more and one of my biggest goals for this year is to be more open and honest with the people in my life, my loved ones, my parents.

Speaker 3 And I want more instead of like a

Speaker 3 child-mother relationship since I am getting older, I want more of an adult relationship with my mom.

Speaker 3 The other two really big concerns are

Speaker 3 since I worked these two jobs, my mom has been open about like what she sees in me and how they're both physical labor jobs, and so she says how exhausted I look and how tired I look.

Speaker 3 And

Speaker 3 the other part is our grandmother lives with us, but she has Alzheimer's.

Speaker 3 And so on top of working two jobs I try to help my mom as much as I can with my grandmother

Speaker 4 so are you saying that they're wondering are you saying that you kind of want to give them some context as to why you're working so hard at the jobs you're doing is that what you're saying

Speaker 3 yeah I am so why tell me I'm sorry the other big thing was with everything going on politically my mom has made it quite

Speaker 3 known to me how concerned she is about me and my family's well-being and she has said um consistently on numerous occasions if things were to go from push to shove she would like for us

Speaker 3 to leave the country

Speaker 2 cool and so

Speaker 3 with us with her bringing that up continuously having some experiences already are you guys from

Speaker 4 do you have a non-U.S. background? Is that what you're saying? Are you concerned about immigration? Is that what you're saying?

Speaker 4 No.

Speaker 3 When you say force to leave the country, African-American. Okay.

Speaker 2 Oh, I hear you.

Speaker 4 Okay. Enough said.
Here's what I'm thinking.

Speaker 2 Here's what I'm thinking.

Speaker 4 I get what you were saying earlier. You're talking about a lot of different things.
So let's talk about first the financial side of things. A.

Speaker 4 If you want to give somebody context without giving them a ton of details, that's fine. You can say, listen, I've got some debt I'm trying to pay off.
That's why I'm working so hard.

Speaker 2 If you don't want to tell them the whole 30,000, hold on.

Speaker 1 Here.

Speaker 1 Do you want some more?

Speaker 4 I've got water. Sorry, guys.

Speaker 2 I'll take over for a second.

Speaker 1 Thank you. Go ahead.

Speaker 1 Give me a wave, Jade, because she's got some good stuff to say. Yeah.
So

Speaker 1 echoing on what she's saying is that you can have a deep relationship with someone

Speaker 1 and be able to kind of share what you're going through of like the struggle of like, oh yeah, you know, I do have some debt I'm trying to pay off. That's why I'm putting in these hours.

Speaker 1 And this is the why behind it. And I do agree, you don't need to walk alone when it comes to your money.

Speaker 1 So having somebody in your life that has context and knows what's going on, I think, is important. It doesn't have to be your parents.

Speaker 1 And I wouldn't say your parents have to know every detail of your life in order to have a close and great relationship.

Speaker 1 But if you want that peer-to-peer mentality too, Michaela, you are your own person as well.

Speaker 1 And so, if your mom, you know, has, you know, and maybe you share in her fears or not, I don't know, but she can have her own, you know, set mindset of, you know, what's going to happen for her future or what she thinks may have to happen.

Speaker 1 But also, Michaela, you know, you're 22 years old. And so you get to make some decisions and decide for yourself, hey, here's, you know, here's the reality of my life too.

Speaker 1 And just because my mom goes one way, I don't have to go that way either. Unless you do think that, right? And you may have context in that, which is totally fine.

Speaker 1 But I do think you are your own standing person at 22. Your parents

Speaker 1 don't need to know these things, but I understand opening up and wanting them into what's going on with your life, I think is great. And if you want to tell them the number, tell them the number.

Speaker 1 Like you didn't, you know, we always say like debt is not a sin. It's not a salvation issue.
You know, it really wasn't some like big moral failure. Yeah.
Yeah. You made some mistakes.

Speaker 1 You look back and like, well, that was stupid with my ex. Why did I do that? But listen, we all make mistakes.
Like things happen in life, Michaela. So you're 22.
Do not beat yourself up about it.

Speaker 4 I couldn't have said it better myself. Rachel said it while I was in a coughing fit and she covered it.

Speaker 2 I don't know, Jay. You can probably have a lot better

Speaker 2 to add.

Speaker 4 That was it. She covered it.
That's exactly it. I won't repeat it, but I think, Michaela, you know what you have to do.
And just listen, above all, don't be influenced by somebody else's fears.

Speaker 4 Like if they have fears and concerns,

Speaker 4 they're

Speaker 4 able to have those. Everybody gets to have the emotional train that they want to have.

Speaker 4 And if you feel the same way, fine. But don't let it, if you don't, don't let that fear kind of lock you into something you should or shouldn't be doing with your money.

Speaker 4 Okay.

Speaker 3 Thank you. Thank you, Trulie.

Speaker 3 I'm sorry. I'm really trying not to cry.

Speaker 2 That's all right.

Speaker 1 What is it?

Speaker 1 What is making you want to cry?

Speaker 3 I don't think I would cry.

Speaker 2 That's okay.

Speaker 3 My mom and my dad are really big people in my life, and

Speaker 3 I really, really look up to them.

Speaker 3 We're not super rich, but I get my really hard work ethic from them.

Speaker 3 And so they told me what I know about finances, and I felt really, really dumb getting where I am.

Speaker 1 I see.

Speaker 3 Don't worry that you should be disappointed in me

Speaker 3 with where I am.

Speaker 4 oh my god I am so sorry no that what you're talking about is so real like the guilt that we feel over previous mistakes that we've made with our money the guilt that we feel having not met expectations that we feel were put on us or maybe that we've put on ourselves what you're talking about um Michaela is such a real thing and a lot of times when we think about getting our money under control, we kind of think it's just this light switch that we flip.

Speaker 4 All right, I'm getting on a plane. That's it.
And I just do it and I feel nothing nothing until it's over. And that is simply not true.

Speaker 4 You go through a wide range of emotions and guilt and shame is one of them. But I want to tell you, Michaela, you may have made mistakes with your money, but you are not a mistake.
Okay.

Speaker 4 You are not a problem, a problem. You are not a burden.
It was just something you went and you went through it. And let those emotions go through you.
Okay.

Speaker 4 It's when you get stuck in them that they become a problem.

Speaker 1 Yes. Yeah.
It does not define who you are. Your past mistakes don't define who you are, Michaela.
So know that. There's freedom in it and opportunity ahead.
Thank you so much for the call.

Speaker 1 Thanks to all the guys in the booth. Thank you, Jade, for a great hour.
This is the Ramsey Show.

Speaker 1 Live from Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

Speaker 1 I am Rachel Cruz, hosting this hour with best-selling author Jade Warshaw, and we are taking your calls about your life and your money. So give us a call at 888-825-5225.

Speaker 1 Starting us off this hour in Los Angeles is Lori. Hi, Lori.
Welcome to the show.

Speaker 3 Hi, Rachel and Jade. Thank you for taking my call.
I am beyond thrilled to have the two of you answer my question.

Speaker 2 Oh, well, I'm so glad you called. How can we help?

Speaker 3 Okay, so I have a scenario that I have not heard, and I have been wanting to pick your brain for a long time.

Speaker 3 My question is basically simply what is the next best move to make based on your advice? And my situation is

Speaker 3 I am 63 years old.

Speaker 3 I have moved back into a property I've owned for 28 years to establish, I had it, it was a rental property. I moved back in to establish it as my primary residence to save $80,000 in taxes.

Speaker 2 Woo!

Speaker 3 Ah, okay.

Speaker 3 Because of

Speaker 3 it not being my primary residence, I wouldn't, okay.

Speaker 3 Now, I don't own another property.

Speaker 3 I have

Speaker 3 $50,000 in retirement. I have

Speaker 3 an account that has $200,000 non-retirement.

Speaker 3 I spent $30,000

Speaker 3 plus,

Speaker 3 well, actually, $40,050,000. I've spent $60,000 so far, and I'm a year in.

Speaker 1 Like your living expenses. Is that what you're saying, Lori? It takes $60,000 for you to live.
Is that right?

Speaker 3 Oh,

Speaker 3 I spent $60,000 above and beyond what I bring in on my income because I actually put the house on the market

Speaker 3 because I thought this is ridiculous and upside down and against my

Speaker 3 money philosophies. And it fell out of escrow twice because there was a repair.
Just, you know, things happen in real estate. So I had to spend

Speaker 3 my money. Okay, okay, let me.

Speaker 1 Okay, so you used $60,000 above and beyond your living expenses to fix up the house to sell. Is that what you're saying?

Speaker 3 Well, part of that was fixing it, and part of that was,

Speaker 3 you know, just

Speaker 3 an additional to just keep the house running with insurance and,

Speaker 3 utilities and whatnot.

Speaker 4 So, what is it costing you now to live there? Like, what's the payment?

Speaker 3 Okay,

Speaker 3 okay, so it costs me $3,800 to maintain the house. A month.
And

Speaker 4 a month. Okay, and that's rent, and that's what is that, rent and utilities, or is there something else we need to know about that goes into maintaining it?

Speaker 3 Okay, so that includes my mortgage, property tax, insurance,

Speaker 3 utilities. That is everything.

Speaker 3 I am also will tell you I am a huge fan of, you know, our budgeting. I just lost it.
What's

Speaker 3 the coming out?

Speaker 2 Every dollar. Oh, my God.
That is great.

Speaker 2 She's like, I know it, and I love it.

Speaker 3 Okay, so I have,

Speaker 3 I am telling you, the two of you, I know every penny that I spend and that comes in.

Speaker 3 So I am so organized here.

Speaker 4 So you're paying $3,800 every month with your mortgage all in, all included.

Speaker 4 What's your top line of income? What are you bringing in every single month?

Speaker 3 Okay, so I bring in about $90,000.

Speaker 3 My income can fluctuate, but I'm going to say that it averages, and this is on the

Speaker 3 conservative side, $90,000 a year. Okay.

Speaker 2 What's that look like monthly for you on a good month or a normal month?

Speaker 3 It looks like probably I'm going to say let's just say

Speaker 3 $6,500, $6,500,000. Okay.
Okay. And

Speaker 3 here's a couple of things that are important to know. I don't,

Speaker 3 I thought at some point maybe I would, you know, pay this house off and stay here, but I don't want to be here.

Speaker 1 Okay. Period.

Speaker 3 And I will also throw in an expire

Speaker 3 because of the expenses, because I don't want to live in the area. It's far from my kids and my grandkids.
Where do you want to be? And

Speaker 3 I want to be closer to where they are, or

Speaker 3 I am willing to go a little outside of the area to stay within my personal comfort financially.

Speaker 2 Okay. Right now,

Speaker 4 sorry, I'm moving you along so I can make sure that we

Speaker 2 answer you.

Speaker 3 I'm fine. Okay, what that would look like is

Speaker 3 right now, honestly,

Speaker 3 creating some more more freedom for myself, freeing up the equity that I have in the house, getting accounts set up properly, renting for some period of time and something as

Speaker 2 and where and what location, Laurie?

Speaker 1 Is this still in California or is this like Arizona? Is this Missouri? Like, where are you talking?

Speaker 3 Well, unfortunately, those grandchildren are in California.

Speaker 2 Okay.

Speaker 3 But, you know, and it's maybe outside of Los Angeles because, you know, I'm in a fire zone, too.

Speaker 4 So, Lori, what's your main question? What can we help you with today?

Speaker 3 My main question,

Speaker 3 Jade, is

Speaker 3 it does it make sense for me to sell the house before it hits the two-year mark

Speaker 3 as primary residence? I would be foregoing about

Speaker 3 $70,000 to $80,000 of tax,

Speaker 3 you know,

Speaker 3 but I've already spent $60,000 and I'm going to spend another 30 or 40 for the rest of the year.

Speaker 4 And I'm choking.

Speaker 4 What's making you feel like it's to the wire that you have to do it, that you would even consider doing it below the two-year mark?

Speaker 3 Because it feels financially absolutely so uncomfortable.

Speaker 4 Right, because it's more than half a year.

Speaker 1 And what are you fixing when you keep saying

Speaker 1 you're going to be when you say I'm throwing an extra $40,000 at it, is that because it's almost $4,000 a month to keep it afloat, or is that an additional $40,000 on top of just maintaining it?

Speaker 3 No,

Speaker 3 that's an additional. So I'm going to go ahead and get it going.

Speaker 1 And is that because it's a broken down house?

Speaker 1 What's the extra $40,000 going to be going to?

Speaker 3 That's going to be just covering all the nut because exactly.

Speaker 4 You're only making $6,000 to $6,500. You're paying almost $4,000 a month for housing.
So

Speaker 2 there's no way you can keep that.

Speaker 1 How much will you, how much will you, if you sold the house today for what you you want, ideally, how much equity would you be walking away with?

Speaker 3 I would be walking away with about 1.1 or 1.2

Speaker 2 million

Speaker 3 million.

Speaker 1 Wow, okay. And it'd be 80,000 in taxes.
Is that what you were saying? Because of capital gains?

Speaker 2 Well, no, the tax.

Speaker 3 The taxes would be because I bought the property for such so low amount. Right.
But the overall with everything said and done is still going to be like $300,000 of taxes to pay.

Speaker 2 Okay.

Speaker 3 So it's like under that category of math is not a feeling. It's like, as you can hear, I am like struggling every month.
You're exactly

Speaker 2 you're exactly right to feel this.

Speaker 4 I mean, this is far exceeding the amount that we would say it should be. I don't know.
I don't see how you can keep this going without going into debt. I'd sell it.

Speaker 4 You're going to take the hit on the capital gains. That's fine.
You made money. And then truly, you've got to get in a situation where you're getting that payment.
That's 25% of your take-home.

Speaker 4 Whether you're buying or renting for a season, still don't let it exceed that. Yeah.

Speaker 1 And Lori, if you have the ability to get in a small condo to buy with this equity, I would do that versus renting long term because eventually you're going to have to buy something.

Speaker 1 And the sooner, the better. Thanks, Lori, so much for the call.
This is The Ramsey Show.

Speaker 1 Welcome back. We are taking your calls at 888-825-5225.
I'm Rachel Cruz, hosting with the wonderful Jade Warshaw. And we're going to go to Portland, Oregon next.
And we are talking to William.

Speaker 1 Hey, William, welcome to the show.

Speaker 2 Hey, how are you doing?

Speaker 1 We're doing great. How can we help?

Speaker 3 Hi, so I have a few questions.

Speaker 3 So I'm looking at going into trade school. Well, trucking.
I don't know if that's considered a trade, but trade school, I guess. And I don't have enough in my savings.

Speaker 3 I just have enough for the emergency fund.

Speaker 3 I'm currently on baby stuff number two. Okay.
And I have $24,600

Speaker 3 roughly in debt.

Speaker 2 Okay.

Speaker 3 And so I was wondering if

Speaker 3 I know you guys generally not to take out student loans.

Speaker 3 And this is not, it's not a huge student loan, but it's still money.

Speaker 3 It'd be $6,500.

Speaker 3 And I was just wondering, should I pay off my debts first, which would take me around two years?

Speaker 1 what would be the jump in income, realistically, from what you're making now to after you graduate?

Speaker 3 It would go roughly from 60 to 120, so double.

Speaker 2 Okay, okay, that's a good investment.

Speaker 1 How long is school for?

Speaker 3 It would be roughly for about two months, and then trying to get a job after that.

Speaker 2 Yeah. Wow.

Speaker 1 How long would it be to get into, you know, because I know with that, it's either you own a truck, you work for a company.

Speaker 2 Like, what kind of route are you thinking about?

Speaker 3 Yeah, so I would be working for a company and I've already talked with the owner.

Speaker 2 Okay.

Speaker 3 And roughly around 100 is what he's going to be starting me at.

Speaker 2 Yeah, that's right.

Speaker 2 How quick can you make the 6,500?

Speaker 4 How quickly can you save that if you paused your snowball?

Speaker 3 At my current amount, probably in around four months. Okay.
Three, four months.

Speaker 2 That's great.

Speaker 1 I mean, honestly, William, that's probably what I would do. And the only reason I would say to pause your snowball to do this is the immediate jumping income and trucking for the most part.

Speaker 1 I know people can kind of get a little bit into the weeds if you own your own truck. I mean, I know there's some expenses that can happen, but the path you're doing is very predictable.

Speaker 1 It's not like you're going to school to get a master's in psychology and you're hoping to do X, Y, and Z. And it's a little ambiguous

Speaker 1 because it is such a short amount of school. And because it's pretty guaranteed,

Speaker 1 that's one reason why I would, or two reasons why I would say

Speaker 2 I would pause.

Speaker 1 And how old are you?

Speaker 2 Young?

Speaker 2 I'm 23. Yes, for sure.

Speaker 1 I would do that, William. Honestly, I would not for sure take out loans for it.
I would save.

Speaker 1 And for you to be able to pay off $24,000 with $100,000 to $110,000 on the road where a lot of your expenses are paid, like sleeping, right?

Speaker 1 Like you're going to have lower expenses too, just because of the lifestyle.

Speaker 1 So you'll be able to knock out that $24,000. I mean, you can make an aggressive goal and say you're going to do it in six months and live on half of what you're making or, you know, something crazy.

Speaker 4 Yeah, you're used to living on 60,000, so why not?

Speaker 2 Ooh, I concur. Great.

Speaker 3 Yeah, that's kind of, yeah, that's kind of what I was thinking: was once I get that jump in income, change absolutely nothing. Yeah.
Just because I have more doesn't mean I have to spend more.

Speaker 2 Yep, that's right.

Speaker 3 And then just knock it out. But also, my other question was: so out of that $24,000, $20,000 is auto loan.
And I was wondering, should I just sell the car?

Speaker 2 Oh, tell us more.

Speaker 4 What's it worth?

Speaker 3 It's worth roughly 36 to 38. It's a 22 Highlander.

Speaker 4 No-brainer.

Speaker 2 Yes, today, William. Today.

Speaker 4 And with what you get with it, you're going to be debt-free.

Speaker 2 Yeah, you'll pay for it. And he'll pay for debt free.

Speaker 4 And you can pay for a cash car or whatever. Oh, yeah, pay for a cash car.
Yeah.

Speaker 2 Wow, this is a good conversation. Thank you.

Speaker 1 Yeah, you're rare, William, in the sense that your car is not underwater.

Speaker 1 We talked to so many people that have bought in the last few years when cars were so up in value and they bought high and now they're trying to sell.

Speaker 3 And so you're yeah, I'm a very big, yeah, I'm just like when it comes to cars, like I was doing the research for months. I never buy any warranties and never did any of that.
Yeah.

Speaker 3 And I would not buy over MSRP, even though I did buy in 2022 when cars were like crazy high and they were doing markups everywhere.

Speaker 2 But it's holding its value that well, huh?

Speaker 1 I mean, you Kelly Blue booked it, and that's what you're seeing?

Speaker 3 Well, Kelly Bluebooked Private Party, it's tell me around 41, but I've had it on Facebook Marketplace for about 39 and no luck so far. So

Speaker 4 you're thinking 36? Is that what you're saying?

Speaker 3 36 is what I get through CarMax as like an instant offer.

Speaker 4 So if you, let's just say you did that, I'm not saying that I would do that, but I mean, that gives you, you're going to come out of this with $15,000 or $16,000.

Speaker 4 That gives you enough to pay off the remaining debt. That gives you enough that you could pay for school and buy a junk.

Speaker 4 a junker and you're only going to drive that beater car for a little while because you're going to be making a hundred thousand or maybe you'll drive it for a little while because you're on the road.

Speaker 2 Yeah.

Speaker 4 Wow. I love that this Highlander is breaking you free.

Speaker 2 This is great.

Speaker 3 Yeah, that's kind of like my original choice was like a BMW 750 and those just think like a rock. So I'm pretty glad I didn't do that.

Speaker 2 Well done, William.

Speaker 3 Also, I am a little like still disappointed myself that originally my budget was $3,500 or $35,000, sorry. And then I went and spent $55,000.

Speaker 4 Well, you'll never go into debt for a a car again. You've learned your lesson.
And with what you're setting yourself up, the next time you buy a car, it's going to be in cash.

Speaker 4 And it's not going to be a junker. It's going to be something that you've, you know, vetted and looked at and used and nice, right? You're setting yourself up to be able to do that in the smartphone.

Speaker 1 Yep. And then when you get that first paycheck, it's all yours because you're debt-free because you sold the car.

Speaker 4 Boom.

Speaker 1 All right, let's go to Josh and Boise. He is up next.
Hey, Josh.

Speaker 3 How are y'all?

Speaker 1 Doing great. How can we help?

Speaker 3 Good.

Speaker 3 So I've got a couple questions. So, first off is my wife and I recently moved to a remote town in Idaho where there is no

Speaker 3 major companies and there's no handymen up here either.

Speaker 3 So my wife and I decided this year, we're on baby step two currently and we've kind of decided that this year might be a good year for me to start a handyman LLC.

Speaker 3 I've already got all the tools to do it. The only thing that would cost me out the door is the initial startup through the state for the LLC paperwork and the filing fee and all that.

Speaker 3 So that's roughly about $500.

Speaker 3 The downfall is I'm having a really hard time finding business insurance as well as the only thing it would cost me running this LLC is my time and my fuel. That's all it would take.

Speaker 3 So those are my two main questions. Is starting an LLC at this point in our life a good idea, a bad idea? And then

Speaker 3 as far as business insurance, I don't know what to do anymore.

Speaker 4 So is the problem that when you're looking for business insurance, you're just not finding anybody who will offer it? Or is it the price? Tell me more about that. And also,

Speaker 4 have you,

Speaker 4 yeah, tell me that first.

Speaker 3 Okay, so I've been told by multiple companies that because I am too much of a jack of all trades, that they won't cover it because of the fact there's too many things that I can do.

Speaker 3 They're telling me that I need to specialize in one or two specific skills.

Speaker 3 But the downfall is if I specialize in flooring, then I can't do trim. If I do trim, I can't do painting.
Stuff like that. And I think that's a good idea.

Speaker 2 It sounds like a general contractor type.

Speaker 1 I mean, I know it's not that

Speaker 1 intense, but that's what it's sounding like.

Speaker 4 Is that the problem that you're calling yourself a handyman and you should be titling the type of work you do differently? Is that what they're looking for?

Speaker 4 I'm not an expert on business insurance, so I'm just asking questions to see if we can drill it down.

Speaker 3 Yeah, no, it's fine. So I could get my general contractor's license.
It's not overly expensive,

Speaker 3 but they do require you to put down one or two specialized skills specifically instead of having a large array of certain things.

Speaker 4 And maybe that is what you do in order to kind of get your foot in the door, because I feel like the more you're in this world, the more you're going to learn.

Speaker 4 And it might be a good idea for you to start small.

Speaker 2 I would...

Speaker 1 Oh, go ahead, Rachel. Well, I was asked, what's the biggest need? If you were to drill it down to two things versus jack of all trades, what do you see as the most lucrative?

Speaker 3 Well, there's a lot of flooring up here that needs done as well as everybody around here has got a piece of wood busted broken somewhere

Speaker 3 so it's

Speaker 2 it's i mean it's a little yeah and i don't want to be um

Speaker 1 i don't want to sneak around the law or anything but my question is yeah could you just do could you could you go flooring and trim and then if someone's like oh gosh well i need you know this help too you're like oh yeah i can fix your toilet too for an extra hundred bucks or i don't know like could is that plausible just as a freelance type work

Speaker 4 yeah it probably could be yeah i'd I'd get into some, I don't want to sound like I don't understand the internet, but I'd get into some chat rooms or like get on Facebook, get in some forums and ask people, hey, what license did you do?

Speaker 4 How were you able to be a handyman or a kind of jack of all trades and also be insured? And see what people who are doing it, how they're insured.

Speaker 1 Today's question of the day is brought to you by Why ReFi.

Speaker 1 Now, we don't recommend refinancing on everything but for distressed private student loans there is why ReFi and we trust YReFi because they help you with a low fixed rate interest rates that you couldn't get anywhere else and it really helps you stick to your budget and help you and helps you get out of debt faster.

Speaker 1 Learn more at YReFi.com slash Ramsey. That's the letter Y.

Speaker 1 R-E-F-Y dot com slash Ramsey. May not be available in all states.

Speaker 4 All right, today's question comes from Melody in Virginia. She says, my husband and I are in our early 40s and got married last year.
While we were dating, my husband bought a house for us.

Speaker 4 I participated in the whole process and he paid the down payment and the mortgage until we got married. We have joint accounts.
All that we make goes there and we treat all income as ours.

Speaker 4 We worked together to pay off the debt we brought into the marriage. My husband recently became very ill and agreed to do some estate planning.

Speaker 4 I asked him to add me to the house, deed, and mortgage, but he wants to just stipulate in his will that the house will be mine if something happens to him.

Speaker 4 I don't care about the house itself, but while, but while I made sure to put him as a beneficiary for everything that is mine, he has friends and family as beneficiaries for what is his.

Speaker 4 Am I wrong in feeling off about this whole situation?

Speaker 4 Yeah. I would definitely feel off about this.

Speaker 4 The truth is, okay, so let's talk about the will thing first, because if you were like, hey, I'm not on the deed and there's no will, that would really be a problem.

Speaker 4 Just looking at it as that, because I'd say, well, if, especially since you guys bought this thing before you were married, it could go to probate depending on what state you're in.

Speaker 4 And it would take time for it to really iron out and go to you. The other thought is, but there is a will.
Then my next thought is like, have you seen the will?

Speaker 4 Because I want to see it with my eyeballs on it for real.

Speaker 4 So, because if not, depending on what your state, what your state is, again, there could be an issue there.

Speaker 4 Then there's the the relational side of what's going on here like why doesn't he want that and i also want to know well why are your friends and family on the other assets like what is it what could it be a 401k anything else that a savings account anything else that would have a beneficiary that would be in his name exclusively that she couldn't be on yeah yeah so what what stands out to me and i i i'm gonna read a lot into this but this is just what stands out to me you're in your 40s you've only been married for a year it sounds like there's something previous that's playing into this.

Speaker 4 Like maybe there was a previous spouse or a previous relationship and he has trust issues. Something is going on there.

Speaker 4 I find that when people are later in life in those relationships, there tends to be more walls up.

Speaker 1 Yeah. More experience, bad experiences that happen with life.
And because of that, people get protective and they want to protect themselves, which in one case is totally understandable.

Speaker 1 But also, as it plays out in the health of the marriage, it ends up being more detrimental than beneficial. And that's where you guys have to like really get on the same page.
So yeah,

Speaker 1 yeah, unless to your point that he promised his

Speaker 1 brother that he would help pay for the brother's kids college. I don't know.

Speaker 1 It's like there's something there that makes sense to you, but for you not even to understand why, that's a bigger problem to me. You need to know that.

Speaker 1 You know, Jade, I was stopped by somebody recently out and about, and she was very kind, but she was like, can I just ask you a quick question? I was like, sure.

Speaker 1 But she was saying that they, her and her husband are working their way out of debt.

Speaker 1 She has i think like maybe i can't remember the exact word maybe twenty thousand dollars left in her name because they were her student loans okay and they were going to go and refinance the house well um if they put her name on the deed in the in the refinance then they're not going to get as good of a rate because of her credit score and everything and so she was like we want to refinance but should we hold off till we're debt-free or could we go ahead and refinance and my name not be on the deed but i could put it on the deed after i'm you know get out of debt anyways it was this whole like situation and i you know and i told her i was was like, I mean, yes, you want your name on the deed eventually.

Speaker 1 And if it's not, it needs to be in the will, like what you're saying. But the, I think the ownership aspect of both being on the deed is important.

Speaker 1 But also in a short term, if it doesn't make financial sense, save the money and then put your name later if your name is in the will for it. You know what I mean? It just makes sense.
Yeah.

Speaker 1 Just in case something happens to him. Because the whole point, again, of sharing assets, yes, is from a tactical standpoint.
So we want to be smart about that.

Speaker 1 But it's also from an ownership perspective and a unity perspective.

Speaker 4 And depending on the state, I don't want to get this wrong, but depending on the state,

Speaker 4 let's say that the house was bought. It was bought pre-marriage.
It was bought in his name. Technically, let's say that he passed away and there was debt that she didn't know about it.

Speaker 4 That house, depending on the state, could be treated as an asset and they could sell the house to pay the debt. That's right.
So

Speaker 4 this is important. You know what I mean? It's important, A, to know your state law.

Speaker 4 B, it's important to make sure that these assets are protected because it's probably the thing that they have that's their biggest asset that has the ability to generate the most money for her if she were to sell it.

Speaker 4 So, this is this is an important issue.

Speaker 1 All right, let's go to Richard in Rapid City, South Dakota. Hi, Richard.
Welcome to the show.

Speaker 2 Hi, thanks for having me. Absolutely.
How can we help?

Speaker 3 Hi, so I was just let go from my job suddenly this past Thursday.

Speaker 2 Oh, gosh, I'm sorry.

Speaker 3 My question for that's we'll make it through. We're on baby step three with our expenses expenses saved up.

Speaker 2 Okay.

Speaker 3 But my question for Dave was, what should I be doing during this time? Should I be looking for a part-time job maybe to help bolster that emergency fund, make sure it doesn't run short or dry?

Speaker 3 Should we move out of the house? Are there any special considerations?

Speaker 2 What were you doing before?

Speaker 3 I was the director of music for a large, well-known church in the area.

Speaker 2 Okay.

Speaker 1 Do you see a position opening up and doing something similar anytime soon?

Speaker 3 It's kind of thin. It can take a couple months, three months, conservatively, to find a job that's so specific that matches my very narrow field of expertise.

Speaker 1 Yeah, for sure. Well, yeah, I would be doing something in the meantime.

Speaker 1 And I always feel like the transitional season, like what you're in, it is harder because, I mean, I think for a lot of people, you kind of have to go into it with a lot of humility, being like, okay, I was doing one thing and now I'm doing something I never thought I would be doing, but at least I'm earning a paycheck to keep us afloat.

Speaker 1 Because you're right, you don't want to sit there and just drain your emergency fund all the way down, you know, three to four months in. So keeping as much afloat as possible.
Does your wife work?

Speaker 3 She teaches some piano lessons here and there, but she really likes being the stay-at-home mom.

Speaker 1 Sure, sure. Yeah, so, I mean, Richard, I'd be doing anything or everything.
And again, it's probably, it's not going to probably be in your field of what you're saying short term.

Speaker 1 And it may not even be a job you thought you'd ever be in, but you're earning something and bringing something in while looking, simultaneously looking for something that you had, or

Speaker 1 stuff may have to just shift in your professional career.

Speaker 1 If you hold on the line when we get done with this call, Christian's going to pick up, and I'd love to give you some of Ken Coleman's material because he writes about this

Speaker 1 of whether it's a job loss that is sudden or expected or you decide to change careers because it's not what you're passionate about, you know regardless of your reasoning right um kind of relooking and just saying hey what other strengths are out there because like you're saying if it is a narrow field and if there's not a reality of you getting something very similar to what you're doing you want something that is full-time that is fulfilling but it may look different and maybe something more you know that you aren't you aren't thinking about so i'll give you yeah ken's book and he has um the get clear assessment um a code for that in his book and so you can actually take that and it's a great assessment.

Speaker 1 It's very thorough just to maybe just to get your wheels turning and thinking of other things.

Speaker 3 Yeah. Thanks for the advice.
Would you push me more in the direction of a full-time job or

Speaker 3 does it kind of depend on the situation?

Speaker 4 I mean, I'm of the mind to take any job until you get the job, whatever it is. You know, right now you're unemployed.
So let's get something just to keep you going.

Speaker 1 And if it is full-time with insurance and benefits, that's a bonus for sure. You know, And knowing that it may be short-term,

Speaker 1 but getting something that has kind of a well-rounded package, I think, would be ideal. And if not, you may have to go down to an hourly type job,

Speaker 1 which is fine too. But yeah, at least you're making something.
Yeah.

Speaker 4 Do you have six months of expenses? Three months, what do you have?

Speaker 3 We have about five.

Speaker 3 Okay.

Speaker 2 Yeah.

Speaker 4 I mean, I'd make it my goal to like in two months start, you know what I mean? Like put a goal out there because if you aim at nothing, you'll hit it.

Speaker 4 So give yourself a clear goal of here's a timeline I want to meet and it and give yourself contingencies. If this doesn't happen, then I'll do this.

Speaker 4 And really write out a clear plan so that you don't feel like you're just floating, but that you feel like you're making intentional steps in a real direction.

Speaker 1 Yeah, for sure. Yeah.
Richard, hang on.

Speaker 1 Christian's going to pick up and we're going to give you Find the Work You're Wired to Do by Ken Coleman with the Get Clear Assessment to help you maybe, yeah, in just a new direction, kind of take that narrow path and maybe expand it a little and see what else is out there.

Speaker 1 So good luck to you. I'm so sorry.
That's that is not fun. This is the Ramsey Show.

Speaker 1 So one of the best ways to make the most of your money is by sticking to a budget, creating a budget, sticking to it. It is the roadmap, you guys, for your money.

Speaker 1 And every dollar is the best budgeting app to help you plan to spend your money, track it when you spend, save for what matters most. And it is just amazing.

Speaker 1 So, keep a pulse on your spending and really make progress with your goals this year. Be intentional.
And every dollar, again, it is just, it is my favorite app.

Speaker 1 I was saying this in our live stream, and I'm not kidding. When I open my phone, you know how you like subconsciously go to things on your phone that you don't realize you're in?

Speaker 1 Mine is Instagram and Every Dollar. I end up in Every Dollar sometimes.

Speaker 4 I'm like, what? Every time. I open it instead of Spotify because it's

Speaker 2 exciting. Yes, I know.

Speaker 1 But for real, Jade and I both, we use Every Dollar. We love it.
It is, it makes it so easy. I just was doing our February budget.

Speaker 1 I mean, it's, yeah, it is great, you guys.

Speaker 1 So you can actually download it for free in the App Store or Google Play or click the link in the description if you're watching on YouTube or listening on podcasts.

Speaker 1 Because again, getting great tools with you that are simple and easy and help you make progress. That is like, that's where technology is at its best when it's helping you.

Speaker 1 So honestly, yeah, make sure to check it out again. That is Every Dollar.
All right, let's go to Tanner in Tampa, Florida. Hi, Tanner.
Welcome to the show.

Speaker 3 Thank you for having me.

Speaker 2 Absolutely. How can we help?

Speaker 3 So I'm in the market of buying a house, and I'm looking at buying one. And I'm wondering, should I buy a starter home or should I save up for the home that I plan on living in for the rest of my life?

Speaker 2 Ooh.

Speaker 4 You know what?

Speaker 2 How old are you, Tanner?

Speaker 3 23.

Speaker 2 Okay.

Speaker 4 Yeah. You know what, Tanner? I'll be honest with you.
So much life

Speaker 4 in a five-year span, in a 10-year span, and a 30-year span. So I, I, as much as I love the sentiment, the truth is you have no idea what house you're going to live in for the rest of your life.

Speaker 2 Don't put that pressure on you at your age either.

Speaker 1 If you were 65, we'd be like, okay, maybe we can decide what house you'll be in, you know, for the next 30 years, but not at your age. So no, don't, don't limit yourself to that.

Speaker 1 Yeah, a smart move, I would say, would be get into something. You know, when I say as soon as possible, usually that means a couple of years of savings.
So it's not that urgent, but

Speaker 1 I would be getting in. So tell us about your financial situation.

Speaker 1 Do you have any debt? Do you have savings?

Speaker 3 I just got out of debt. I just paid off my truck.

Speaker 2 Oh, good for you, Tanner.

Speaker 3 I'm building up my savings.

Speaker 1 Awesome. How much do you make a year?

Speaker 3 Around $90,000.

Speaker 2 Okay, good for you.

Speaker 4 And it's just you?

Speaker 2 Or do you have? Okay.

Speaker 4 Listen, that's even another reason to think this through because chances are on down the line, you'll meet a Mrs. Tanner and she's gonna have a different expectation of where she wants to live.

Speaker 4 So, right now, I'm with Rachel. I would focus on something smaller, something you can afford.

Speaker 4 You know, the rule of thumb that we go by is, of course, you wanna have your three to six months emergency funds saved up, and then you're saving a separate down payment, no less than 5%.

Speaker 4 But if you can get it to 20%, that's great. And all in house, taxes, insurance, HOA, you don't want that payment to be any more than 25% of your take-home.
And so that's what we're looking at.

Speaker 4 If you can get a 15-year fixed rate, that is amazing. So that's kind of the standard that if we're saying like good, better, best, that is the best way that you could possibly buy a home.

Speaker 4 And then above that is just you paying cash, right?

Speaker 2 Yeah. And Tanna, also remember too,

Speaker 1 just because of your season of life, you know, from an age perspective, that you want to be in your house, you know, I would say for at least five years, four to five years to get kind of the market, if you will.

Speaker 1 So there'll be some ups and downs or not really. I mean, yeah.
And just you pay so much at closing to make sure that you kind of get enough equity built in that it makes sense.

Speaker 1 So are you in a pretty stable job? Do you think you'll be in the Tampa area for the foreseeable future unless something changes?

Speaker 3 Oh, yes, ma'am.

Speaker 3 My job, we travel, but we're based out of Tampa.

Speaker 3 Okay.

Speaker 3 I don't plan on leaving and I there. I'm hoping to get moved up soon.

Speaker 2 Okay, that's great. Yeah.

Speaker 1 Well, I would do exactly what Jade said.

Speaker 1 Start getting that emergency fund in place and then saving up a down payment. And yeah, you never know where life takes you in your 20s.
It's a pretty, it's a wild decade.

Speaker 2 Wow. There's a lot that can happen.

Speaker 1 A lot of change. But that's exciting, Tanner.
And let me say this from all the single ladies that work with me here at at Ramsey.

Speaker 1 They're always like, if they're going on a date with a guy, they're always like, he's a homeowner.

Speaker 2 It's a commodity.

Speaker 4 It's a

Speaker 2 commodity. It's hard to be a homeowner these days.

Speaker 4 And if you're a homeowner and a guy, it's extra points.

Speaker 1 It just means you're very responsible.

Speaker 2 I'll throw that out there for you, Tanner.

Speaker 4 Yeah, get after it, Tanner.

Speaker 1 And make sure to, if you want to go check out our real estate home base, you can go to ramseysolutions.com/slash real estate.

Speaker 1 And we have great agents there, Ramsey trusted agents that can help you in the Tampa area when you decide to buy.

Speaker 1 And also just some articles and podcasts, like just kind of start to learn up on this process of homeownership because the more knowledge you have, the better.

Speaker 4 Rachel Let's talk briefly about that forever home deal because I hear that a lot and in his case listen his Tanner's heart is pure like he just he's just a simple guy who just wants to settle down but sometimes I hear that and it's almost like an excuse to spend more or kind of like push the push that barrier.

Speaker 4 Do you know what I mean?

Speaker 2 Yes.

Speaker 4 Because like, this is my dream house. We're never moving anywhere else.
This is it. Uh-huh.

Speaker 2 Uh-huh.

Speaker 1 And you know what's funny? Even if it's not the quote-unquote dream house and your sentiment isn't lifelong,

Speaker 1 I've had a lot of friends, and their sentiment is, oh, yeah, we'll be in here until at least the kids go to middle school.

Speaker 1 And it's a 10-year house, but then they get four years in and they're like, oh, gosh, the schools weren't what we thought. The house is a disaster.
It's leaking. We're doing a repair.

Speaker 1 Like, you just never know. So even, I mean, it is something that you kind of go in with, like, you know, this is a big investment.
We're going to be as smart about it as possible.

Speaker 1 But also, don't feel like you're like crushing your dreams if you set out to think like, oh, we're going to be in this for x amount of time it life just changes there's no way to know yes there's no way to know it's a great point it's a great point um all right real quick let's go uh to gregory as we finish out this hour of the ramsey show and he's in washington dc hey gregory welcome hey hi how are you guys can you hear me yes we can how can we help

Speaker 3 hi uh good afternoon and My name is Greg. I'm 26 years young, and I have

Speaker 3 a lot of credit card debt, and on top of that, collections as well. So, in total, I have $13,105 in credit card debt

Speaker 3 split between four different cards and $1,760 with collections.

Speaker 3 My question is,

Speaker 3 should I pay the collections first,

Speaker 3 or

Speaker 3 should I try and attack the credit card with Discover? Because they are

Speaker 3 like giving me a lawsuit for attorney. So I don't know which one I should be paying first.

Speaker 4 Well, they're both, they're almost equally important. The Discover one, how much is it? What are you on the hook balance-wise?

Speaker 3 $6,031.

Speaker 4 Okay, and then just for clarity, the collections, it's $1,760. Is that what you told me?

Speaker 2 Correct. Okay.

Speaker 2 So, okay. Oh, sorry, Jada.

Speaker 1 How long has it been in collections?

Speaker 3 One,

Speaker 3 I have two in collections. One has been in collections for about a year and a half, and then the other one is in collections for around four months.

Speaker 1 Okay, do you have any money saved, like $400, $500?

Speaker 3 I have $9 saved, so probably not.

Speaker 1 Okay, what

Speaker 2 okay.

Speaker 1 So what I would do, Gregory, is if you can,

Speaker 1 I would be getting an extra job. I mean, I would be working 80 hours a week, getting any amount of money, because the ones in collections, you're going to have a better time negotiating those down.

Speaker 1 And depending on how long they've been, and especially the one that's been in in there a year and a half,

Speaker 1 it's been probably sold four different times to four different companies. It's some guy in a cube, and who knows where? I mean, like, it's just

Speaker 1 long gone, and they will be more likely to settle with you. Super cheap.
So, that would be probably my first goal.

Speaker 1 Um, and then, I mean, I would tell Discover, I'm gonna be keeping my minimum payments, but sorry, guys, I'll get to you when I get to you.

Speaker 4 Yeah, and listen, they might sue you, but you don't have anything,

Speaker 2 they have nothing to take.

Speaker 4 And so, this that process is really more at this stage, it's likely more of a scare tactic. So just there after these collections, it's the next thing in your debt snowball.
What's your income?

Speaker 4 What are you bringing in every month? Because you got $9 saved. Tell me real quick because we're about to head out.

Speaker 3 Right now, I'm making 21 per hour, but it's more so part-time.

Speaker 4 Okay, so there's your issue right there. And I think you know what we're going to tell you.
You've got to get up to full-time, a full-time schedule.

Speaker 4 Full time at 21 per hour, you can get some things done. But let's find a way to get that income up because that's really the key to this puzzle.

Speaker 1 Full-time and overtime.

Speaker 1 Greg, that's going going to be your forever young, if you will. This is use that young energy to be working.
Thanks to all the guys in the booth.

Speaker 1 Jay, thank you for a great hour and we'll see you guys at the Ramsey Network app. If you are on radio, stay tuned and we will see you next hour.