If You Want to Build Wealth, Stop Acting Like Everyone Else

Speaker 1 This is the Ramsey Show. Welcome, America.

Speaker 1 We're here to help you win with your money, win in your profession, and win with your relationships alongside the graceful, the fabulous Rachel Cruz, fresh off of her first inaugural ball, I might add.

Speaker 1 We might hear about that. We might not.

Speaker 1 She joins me. I'm Ken Coleman, and we're here for you.
The phone number is 888-825-5225. 888-825-5225.
And these are serious topics, but we like to have some fun. We do our best to smile

Speaker 1 and coach you up because we want you to win. So it's going to be fun today.
You ready to go, partner? Let's do it. She's ready.
Megan joins us in Des Moines, Iowa. Megan, how can we help today?

Speaker 2 Hi, so excited to talk to you today. I listen every day, so this is kind of surreal.

Speaker 1 I am calling.

Speaker 2 I'm looking for some advice on bringing up estate planning with my multi-millionaire in-laws who are unwilling to have a conversation with my husband and I, but state that he and his brother will both be taken care of when they pass.

Speaker 2 How do we inquire so we know where the assets are in the event of long-term care or their passing?

Speaker 3 Wow.

Speaker 1 Man. Sounds like you've tried and they're not interested.

Speaker 1 So I'm not sure that there's some unique strategy we're sitting on top of because it sounds like they're like, Look, you're fine, we'll let you know when we're gone. Sounds like

Speaker 3 essentially.

Speaker 2 Yeah, it said 50-50. You know, it's just my husband and his brother.
And he said, you know, you're taken care of.

Speaker 1 Let me ask you this: what is it that you all want to know? Let's just assume that they were like, Sure. What is it that you're looking to discover?

Speaker 2 Well, mostly there are multiple properties involved, as well as a business that my father-in-law owns.

Speaker 2 And we have no idea, because we're not in that specific field, what we would need to do in the event of, you know, potentially selling that or his passing.

Speaker 2 So, yeah, that's our major concern.

Speaker 1 All right. So, that reveals the answer to my next question, Rachel, was going to be why?

Speaker 1 Like, why do you want to know what it is that you want to know? And it seems like you guys are trying to be thoughtful, strategic.

Speaker 5 Yeah, and how have the conversations gone so far? Because you obviously know that they're not interested in talking about it.

Speaker 5 So who has brought them, who has brought up the idea of having these conversations to them?

Speaker 2 So my husband has brought them up. He is the oldest, and we have a young family, so he's kind of more thinking about the future for those reasons.

Speaker 2 And they've also made it very clear that they do not want me involved in the conversations.

Speaker 1 Wow.

Speaker 2 So that throws another added bonus.

Speaker 1 I am not sure.

Speaker 5 Do you have a good relationship with them now?

Speaker 6 Barely.

Speaker 2 I mean, we're not best friends, but it's not, you know, adversarial.

Speaker 5 And what about his brother? Is he married?

Speaker 2 He is not.

Speaker 1 Okay.

Speaker 1 I think you got to take a sign here. And I'm going to go back to my line of questioning.
Yeah.

Speaker 1 So to the best of your ability, you guys need to just run a scenario, feels like to me, where you go, all right, let's say they give us this property. and that property.

Speaker 1 What would we need to know to be able to be prepared to make the most of that? Go ahead and run that exercise out. You don't need to know which ones.

Speaker 1 If you know the whole portfolio and you know that you could get, and I'm getting, I mean, let me just walk you through this. How many properties are we talking about total?

Speaker 2 Three properties. Two are rentals.
One is a, you know, a main home which they live in, and the total is about 2.5 million.

Speaker 1 Okay, great. And they are owned assets.
Go do your homework on those three properties. What is it that you feel like you would need to know if you were to come into ownership today?

Speaker 1 Whatever you told us your concerns were, go ahead and figure that out.

Speaker 5 Yeah. And I think, too, Megan, you know, you can only control what you can control.
They're not, they're, I mean, you guys have kind of asked them and they're not going to give it.

Speaker 5 So yeah, like Ken said earlier in the call, we don't have some secret like line to give you that suddenly they decide to tell you everything.

Speaker 5 So what I would do, what I can control, if I was in your scenario and this was my parents is my sibling because that's where they can, that's where the, the budding heads could start to happen, the fractured relationships.

Speaker 5 It's not the parents, because if they're gone, they're gone. Who's left is him and his brother.

Speaker 5 So if I were him, I mean, I would get in a room with his brother and be like, hey, let's just play, like to your point, let's play out some scenarios just so we're, we can, so we can plan out as much as we can with the information we have.

Speaker 5 And then both, and then that's all we can do.

Speaker 5 I mean, so I would just make sure that that relationship is, is in a healthy place because the calls that we do get a lot on here are when a family member dies and it's handed off to siblings and their adult siblings with other kids.

Speaker 5 It starts to get messy and all this. So if you can shore up that relationship,

Speaker 5 that's what you can do. But yeah, I mean, we can't, you can't force them to tell you guys.

Speaker 1 And we're on team, Megan, okay, Megan. So take this the right way.
I'm on your team, okay?

Speaker 1 They've made it clear for some reason, and I'm not a therapist, and nor am I a mind reader, but it's pretty clear to me that they've made it clear that they don't want you involved.

Speaker 1 So they're feeling something, whether you did something or not. That's not the point.
The point is they've laid out a boundary.

Speaker 1 I feel like, and I don't, and it doesn't matter why, we don't know and you may not know, but you need to respect the boundary boundary because it's only going to create what Rachel is saying, some tension.

Speaker 1 So you need to go, you know what?

Speaker 1 A, they're not my parents. B, they've made it clear to my hubs that they don't want me involved.
So you know what? I'm not involved. And that would be my advice from a relationship standpoint.

Speaker 1 Let this go because I can tell you that we can feel it on you right now. There's some angst that you have.
You can hear it on you because this is irritating to you. And that's okay,

Speaker 1 but you got to deal with that because you don't have any control. Rachel nailed that.
So sorry, we can't give you a hack.

Speaker 1 I mean, other than, you know, hiring some former CIA operative and get everything.

Speaker 5 Yeah, and I think, you know, the family money dynamic, you want to, you want to weigh it in carefully, especially as an in-law. And like my in-laws are so wonderful.
They, they are very open with us.

Speaker 5 And every other year, we get together as a family. And his dad has even said to the in-laws, like, I want your thoughts and opinions.
I mean, he's, I mean, they're very kind in that way.

Speaker 5 But I still am very aware I'm not their kid. Like, like, like, there's, you know what I mean? Like, there's still a, and even like, I think even within the Ramseys, like, they know everything.

Speaker 5 And, and again, mom and dad would love and appreciate and respect the opinions of the in-laws for sure, but there's still just that small level of just social awareness of like, okay, these are not my parents, or, you know, I'm the in-law that I think is appropriate to, I don't know, maybe people disagree with that, but I think there's a level of like, when you are their kid in blood, there's, there's a, a level of holding that they have that an in-law never will.

Speaker 1 Yeah, I mean, did what went off in your head when you heard her say, they've made it clear that they don't want me involved?

Speaker 1 I'm just curious, your female intuition and also your professional intuition.

Speaker 1 What did you think?

Speaker 5 That it's obviously not a great relationship.

Speaker 1 That's what I thought.

Speaker 1 Because then you asked her and she said, fairly. It's okay.
Yeah, when someone asked me, if you ask me, do you have a good relationship with somebody?

Speaker 1 And if I drop fairly on you, you know, it's probably not going well.

Speaker 5 I don't don't think it's great it's certainly not great and I think there's some and I will say though too fairly I will say too it depends on the day the that generation the parents generation too is a more private generation right you think about late boomers um even into the generation you know before them like that so so so in her defense they could just be very private people I agree that don't feel comfortable regardless of whether they have a relationship or not and her reasons were to say but I think I think they can get their the reasons why.

Speaker 1 I think they can plan for it either way. You know, it's fun.
People call us like this. They want to know what we think.
But you know what? We want to know what our audience thinks.

Speaker 1 We have a new audience coming in all the time, growing audience. And it's really important if we're going to serve you that we hear from you.
So our listener survey, it's an annual thing we do.

Speaker 1 We need to hear from you. We really do serve you well.
We want to hear from you.

Speaker 1 So tell us what you like, what you don't like. The whole nine yards.
Be nice to Rachel. You could be mean to me.
It's okay.

Speaker 1 Text the word survey to 33789. Text the word survey to 33789 or go to ramseysolutions.com/slash survey.
And you can click on the link in the show notes on your podcast app or YouTube.

Speaker 1 And here's the deal: if you sign up today to tell us what you think, you're entered to win a $500 gift card. So there's a little bonus of motivation.
All right. We want to hear from you, America.

Speaker 1 Quick break, and then you hear more of us. This is the Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show. I'm Ken Coleman, and Rachel Cruz is joining me.
We're here for you, America. You got a question about your money? You got a question about your income?

Speaker 1 That's what you got today. You got two people that love to weigh in on that, and we work together to help you.
So 888-825-5225. That's the number.
Let's go to River. Now see,

Speaker 1 that's a great name.

Speaker 1 If my name was River Coleman, I'd be far more credible.

Speaker 5 You can see the success so much more.

Speaker 1 I'd have a lot more Instagram followers as well. But alas, alas, my name is Ken, but I'm already jealous.
River in Columbus, Ohio. River, I'm jealous, but happy to talk to you.
How can we help?

Speaker 8 Hey, what's going on, guys?

Speaker 8 So, yeah, I kind of have a mess.

Speaker 3 I'm 20.

Speaker 8 My fiancé is 23. Together, we have roughly $151,000 in debt.
That's between student loans and an $18,000 truck,

Speaker 11 auto loan.

Speaker 1 That's it? Just the student loans and the truck?

Speaker 1 Yes. Okay.
Okay.

Speaker 12 That's it.

Speaker 8 My student loans, I have,

Speaker 8 I think it's like $33,000 and the rest is her. I think she has like $120 some thousand.
But yeah, it's confusing. It's all through Sally Mae.

Speaker 5 Yeah.

Speaker 5 What was her degree in?

Speaker 8 So she's a multimedia journalist. She's a news reporter at a news station in West Virginia.

Speaker 5 What did she get her degree in?

Speaker 5 Mass media?

Speaker 8 Multimedia.

Speaker 5 Yeah, did she go out of state to a private college?

Speaker 5 Where did she go to school?

Speaker 1 She did.

Speaker 12 Yeah, she did.

Speaker 1 And how much is she making now?

Speaker 8 So she's making $18 an hour. I'm making $18 an hour.

Speaker 8 But her commute is like an hour and 20 minutes.

Speaker 1 Oof.

Speaker 5 Okay, so how much are you guys bringing in a month after taxes? Like, what's hitting your paycheck right now? Or like what's hitting your bank bank account? You guys together?

Speaker 13 So

Speaker 8 together. So we aren't joint accounts yet.
So right now, my situation, I'm bringing in roughly

Speaker 8 $2,400 a month.

Speaker 8 She's around the same.

Speaker 1 Okay.

Speaker 5 What are you doing for work?

Speaker 8 So I work at a credit union and,

Speaker 8 yeah.

Speaker 1 Okay.

Speaker 1 What do you want to do where what are you aiming for

Speaker 1 you know i'm not really sure i'm still in school um i'm a junior in college right now getting my bachelor in business administration i'm paying this semester out of pocket trying to cut good good the loans out and the reason i asked the question where i'm not trying to solve that problem right now but i am trying to figure out what do we what can we do to get more income Because that's a part of this equation.

Speaker 5 Well, and she's not making

Speaker 1 neither one of them. Yeah, I mean,

Speaker 1 you're very limited right now. And that's a part of this equation.

Speaker 3 Yeah, and

Speaker 8 I did just get a promotion, too.

Speaker 8 So I'll be making $21 an hour starting in the middle of February.

Speaker 1 Okay, so help Rachel out. She'll walk you through this, but I know you guys are.

Speaker 1 What is your debt? What is yours? Is yours $155, or is that both of you?

Speaker 8 That's together.

Speaker 1 Well, but you guys aren't together. And so just to help Rachel separate what your debt is versus the fiancé's debt.

Speaker 5 Well, yours is 33,000 student loans, right?

Speaker 5 Yeah, and his is one or hers is 120.

Speaker 1 Mine's 30,000.

Speaker 8 Yeah, mine's 33 student loan, 18 truck.

Speaker 1 Okay, I got that part. I misunderstood.
Okay, got it. Never mind.
All right. So we got the breakdown.

Speaker 5 Yeah, but is she making close to what, 30,000? That's where that's what I'm trying to understand.

Speaker 1 Like,

Speaker 3 yeah,

Speaker 8 yeah, she's making roughly like $31,000.

Speaker 1 Okay.

Speaker 5 So, I mean,

Speaker 5 here's the fast track of it all, which you're probably not going to like. But if getting out of debt is your number one

Speaker 5 idea,

Speaker 5 you guys both have to make more money. And if this is her dream and what she wants to do, is she only on air for a certain amount of time? Like, what are her hours? Is she an early morning

Speaker 5 anchor or reporter, you said? She's midday.

Speaker 1 Midday. Midday.

Speaker 8 She's nine to six.

Speaker 1 There's no money in that industry at this point.

Speaker 5 Well, that sounds good. I mean, like, I don't know if for a short term, there's a shift and you go find something making $45,000, right? I mean, like, you're just like even $15,000 a month

Speaker 5 with a side hustle, which I know crushes her dreams. And this is, this is not to pick on your wife, River, or you, but America, this is, this is what we're talking about.
We talk about student loans.

Speaker 5 She took out $120,000 in student loans to make $30,000 a year. Yeah.

Speaker 1 With very limited opportunity. Opportunity.

Speaker 5 I mean, I mean, honestly, and so there is a, there, there is a

Speaker 5 lesson to be learned always.

Speaker 5 But for you guys, I mean, you're in it now. So obviously you can't go backwards.

Speaker 1 So, I mean, if I were her, I'm like, you know what?

Speaker 5 I'm going to do anything for two to three years.

Speaker 1 It's actually a really good thing.

Speaker 1 So, River,

Speaker 1 is she one? And by the way, do I understand this and support this? Yes. Is she one that goes, I want to take my shot and I want to go to New York, LA, I want to be in a top 10 market one day?

Speaker 1 Is that her thing? Is she really ambitious for that? Is that a clear goal?

Speaker 10 She really is.

Speaker 1 Okay, then.

Speaker 1 so that means i don't yeah so here's my point so if she were if she were if i were coaching her one-on-one i'd say all right so you do have to stay in the game however you are going to have to work other jobs do some freelance publicity do something when you're not on set to increase her income she's got to at least look for a 25 to 40 percent bump through some type of

Speaker 1 industry adjacent work in this season yeah i don't i wouldn't recommend she drop out if her goal is to do that.

Speaker 1 Is to move up in market, which, by the way, that's how you make more money is you go from Columbus to San Diego. Well, you go from reporter to anchor.

Speaker 5 I mean, like, there's that right there.

Speaker 1 That's the last. Yeah, for sure.
But that takes time and they're limited positions. That is a hang on and be really, really good at your job.

Speaker 5 And I would go, I mean, I could be wrong too, but I feel like that's a hard industry to have any level of freelance. You may be better waiting tables from

Speaker 1 seven to

Speaker 1 ten of them.

Speaker 5 You know what I mean? Like, yeah, yeah, yeah. So, um, so it's just the income problem, River, for you guys.
I mean, you just have to up your brain.

Speaker 14 It absolutely is.

Speaker 8 Um, so, and here's a question: so, the loans, her loans, are broken down to like four or five different loans, and they $22,000, $20,000, they're attached with a 12% interest rate.

Speaker 9 Um, I was thinking, you know, it's probably best to, you know, refinance these loans, get it consolidated,

Speaker 8 and

Speaker 8 kind of go that route.

Speaker 5 Yeah, you can for sure.

Speaker 5 I mean, I would say that's the only type of debt I would recommend consolidating are student loans because you usually don't go back into that debt.

Speaker 5 A lot of people play this game because they think math is their problem and interest rates are their problem, but their problem really is

Speaker 5 the behavior, right? The secret of getting out of debt is not the smaller interest rate, even though that can help you to a degree.

Speaker 5 The real secret of getting out of debt is this intensity, this gazelle intensity we talk about, where it's like no lifestyle, nothing.

Speaker 5 You're working insane amount of hours and you just get it paid off, right?

Speaker 5 And so I think that, so I wouldn't put a lot of hope, but again, I would, yes, if you guys can get a better interest rate, again, it's the one type of debt, I would be okay with you guys consolidating, but don't have your hope that because you consolidate, it's going to be, it's going to be okay.

Speaker 5 Do you know what I mean? Like that, there still needs to be that level of grit with you guys in this because

Speaker 1 yeah, yeah.

Speaker 5 But yeah, if you, if you get a better interest rate, for sure, River, I think that that's a, that's a fine move. But again, math is usually not the problem.

Speaker 5 And I always want to reiterate that when we're getting out of debt,

Speaker 5 it's not that. It really is this, this hope in who you guys are as a couple and teaming up and saying, okay, this is what our life's going to look like for the next three years.

Speaker 1 Yeah, I appreciate the call, River. And again, you guys can do this.

Speaker 1 It is not easy. Yeah.
But it is simple.

Speaker 5 For sure. And I mean, to just loosen the burden a little bit, that $18,000 truck, it's right on the border of selling or not.
But

Speaker 5 if you can get that down,

Speaker 5 even if you're underwater, $2,000 to $3,000 and go get a beater, I mean, that's just, that's taking a chunk off too. So be careful about that.

Speaker 1 Well, if you look at the data, we didn't ask, but if you look at the data, Rachel, I believe the number is the average car payment in America right now is like north of $750,000.

Speaker 5 Yeah, a new one is $781.

Speaker 1 So let's just play off of that. So let's just imagine that his car payment is somewhere between $500 and $700.
I don't think that's a stretch.

Speaker 5 No, no.

Speaker 1 That's a massive raise for a young man like this who's about to get married. That's right.

Speaker 1 If you split the difference and go 600,

Speaker 1 I don't have to take my boots off to add this one. That's $7,200 a year.

Speaker 1 $600 toast 12.

Speaker 1 Yeah, you know, I don't have to use my digits. I can do that quick multiplication.
I paid attention.

Speaker 1 I paid attention to that level.

Speaker 5 Old man Ken jokes.

Speaker 1 Yeah, I know.

Speaker 1 You like them once you get them. I know.

Speaker 1 Once you get them.

Speaker 4 She likes them.

Speaker 1 Sometimes I have to explain it during the commercial.

Speaker 5 River, we're cheering for you all.

Speaker 1 Come on, River. We can do it.
Keep on flowing. This is The Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show alongside Rachel Cruz. I'm Ken Coleman.
We're thrilled to have you with us. The phone number to jump in is 888-825-5225.

Speaker 1 Today's question of the day is brought to you by YReFi. YReFi refinances defaulted private student loans.
Defaulted means when the borrower cannot make the required payments.

Speaker 1 So if that's you and your student loan, contact YReFi. They can offer a low-fixed rate loan built for you.
Go to yrefi.com slash Ramsey right now. That's the letter Y

Speaker 1 R E F Y.com slash Ramsey. It may not be available in all states.

Speaker 5 Today's question comes from Chase in Missouri. I'm new to investing and was playing around with the investment calculator on your website.
I found that if you invested $1,000

Speaker 5 for my baby at 10%

Speaker 5 and never put any more in she could retire at the age of seventy with over a hundred one million dollars not a hundred million one million is that right and if so why isn't this common practice

Speaker 5 um i don't have my investment calculator pulled up but

Speaker 5 uh over 70 years are you gonna pull it up ken i'll i'll do my best yeah dude yeah ramsey investment calculator um

Speaker 5 Yeah, I mean, I mean, compound interest is powerful. And over 70 years, I probably wouldn't be surprised if you put no more in at 10% of a rate of return.

Speaker 5 And so why isn't this common practice, you ask? Well,

Speaker 5 I mean, there's maybe a couple of reasons. One, I think parents

Speaker 5 don't have $1,000 to put in. I think there's a level of margin that people are trying to find.

Speaker 5 I mean, also, you know, when you are investing for a child,

Speaker 5 you know, the recommendation of you having to be really over it because a minor can't open up their own account.

Speaker 5 So it would be your name in it and you know, um, being able to transfer it to them long-term is an option too. So, uh, and investing, I would say, too, 960.
So here's what we got.

Speaker 1 I put in

Speaker 1 the current age of one.

Speaker 1 He may be thinking zero, but you know, I just did quick numbers. Retire at 70.
You only put $1,000 in and you never contribute monthly.

Speaker 1 And you're on this number, you are getting an annual return of 10%. So I could drop that to 8% for the cynics.

Speaker 1 And let's see what that does.

Speaker 1 So it's a lot different. $245,000.

Speaker 1 So there you go. But yeah,

Speaker 1 the question holds. Why don't more people do it? Because they don't understand compound interest.
How many years at Ramsey have we taught that simple lesson of compound interest?

Speaker 1 And then just most people don't even think about it.

Speaker 5 Yeah. And I think in investing overall, it can be an intimidating factor of money.
And if you don't feel like you fully understand it, you're less apt to probably

Speaker 5 go into that world, I would say.

Speaker 5 But there, yeah, there's power in that. And then always, you know, I think about 40% of Americans can't cover a $400 emergency in cash.
So to have $1,000 that's not for you and your emergency fund,

Speaker 5 you know, there's a lot of people that don't have it. But I agree with you.
I mean, Chase, that you know.

Speaker 1 By the way, I adjusted the number to zero. I didn't know if the thing would let me do it.
So a newborn baby, it would get to $1,065,261 at the age of 70 at a 10% annual return. So there you go.

Speaker 1 There you go. It was correct.
You know, I usually let the money personalities do that, James, but I feel pretty good there after a test run right there under pressure. I'm so proud of you.

Speaker 1 I'm glad you did it.

Speaker 1 I'm having fun with this, folks, because if I can do it while hosting a show with my squirrel running around in my brain, you need to be going to ramseysolutions.com and start plugging it in.

Speaker 1 Use the investment calculator. Imagine how much fun you can have with it when you're not hosting a show while doing it.

Speaker 1 So it's great. I think that was a wonderful exhibition there.
Madison is up in Phoenix, Arizona. Madison, how can we help today?

Speaker 9 Yeah, my question is, first of all, thank you for taking my call.

Speaker 1 Of course.

Speaker 13 My question is, should I pay off my house while continuing to look for work?

Speaker 1 Tell us about the look for work first. And

Speaker 1 what is your bridge right now as far as income? You got savings you're living off of? Give us some help. There is no income.
Zero income. There is no income.
Okay.

Speaker 13 Correct. I had been out of work

Speaker 13 almost a year, so I had set money money aside.

Speaker 9 I've been following the Ramsey program.

Speaker 13 I set money aside enough to get me through whatever I needed to get to, and that year is coming up.

Speaker 6 So I have...

Speaker 1 Have you been paying off your house through that emergency fund that you had set aside?

Speaker 1 Meaning.

Speaker 13 That was just money for housing and bills. I have a separate emergency fund as well.

Speaker 6 Oh, okay.

Speaker 1 So what I'm asking you, though, is I'm just curious, that money you had set aside, had you been paying your house payment,

Speaker 1 paying it off, or working on that up until this point through that fund? Yes, ah, yes.

Speaker 1 Well, no, I wouldn't be doing. I would, I mean, we would tell you to slow down, pause everything.
You got to get some employment here. I love that you had an extra rainy day fund.

Speaker 5 Yeah, how much do you have saved, Madison total?

Speaker 13 Um, I have, let's see, what were the numbers here?

Speaker 13 I have about

Speaker 13 almost $4,000. $4,000.

Speaker 1 That's your emergency fund?

Speaker 13 Well,

Speaker 15 so

Speaker 2 there's

Speaker 13 $1,900 left for what I had just for the housing expenses.

Speaker 3 Right.

Speaker 13 And then I have $2,000 in an emergency fund. I just broke it down individually.

Speaker 5 Okay. And you asked if you should pay off your house.

Speaker 1 How much is left on your mortgage?

Speaker 13 $72,000.

Speaker 5 What would you pay it off with?

Speaker 5 Are you saying putting extra towards your house above the mortgage?

Speaker 1 No, paying it off. No, that's the right question.
Madison, you don't have any income.

Speaker 5 Well, where would you get the $72,000 to pay it off?

Speaker 13 So that's in I have enough to pay it off as well.

Speaker 1 Okay, you buried the lead. So you have $72,000 somewhere else?

Speaker 5 Yes.

Speaker 5 Okay.

Speaker 5 How much money do you have total?

Speaker 1 Like everything. What's your net worth?

Speaker 5 Cash. Sorry.
Not net worth. Just cash.

Speaker 3 Okay.

Speaker 13 So I don't have a calculator in front of me, so I have $72,900, and $2,000.

Speaker 5 Okay, where is the $72,000 currently? Is it investments or just a savings account?

Speaker 1 It's in savings.

Speaker 5 Okay, what were you going to use that for? What was that fund for in general?

Speaker 9 I had designated it for

Speaker 13 I had it designated in separate accounts. So say, for example, I needed a car

Speaker 1 where I could pay off a car.

Speaker 5 Okay, so you had that. Do you have any retirement?

Speaker 13 I do.

Speaker 5 How much do you have in that?

Speaker 9 About $250,000.

Speaker 1 Okay, good. How old are you?

Speaker 13 I'm in my mid-50s.

Speaker 1 Okay. Okay.

Speaker 1 That's going to be okay. If you were to never touch that,

Speaker 1 by the time you're in your 70s, that's going to be a really nice number. Here's what I'm confused about, Rachel.

Speaker 1 Madison, why aren't you working? I understand it's hard sometimes to get back into market, but to go 12 months with zero income doing something and you're whittling down these other two accounts.

Speaker 1 I'm just not sure, I don't understand why, why you're not working.

Speaker 13 That's what I don't understand either.

Speaker 1 No, no, no, no. Let me rephrase.
I'm confused because I have a what field were you in?

Speaker 13 Medical, and I also have a degree in law enforcement.

Speaker 1 Well, what were you doing? What was the last job you had 12 months ago?

Speaker 13 I was working in the medical field.

Speaker 1 Doing what?

Speaker 13 As an administrative, I held an administrative role.

Speaker 1 Making how much?

Speaker 13 Around $50,000 a year.

Speaker 1 Okay. My point is, you don't sit around, and not that you're sitting, let me rephrase that.
You don't just keep applying and do all this.

Speaker 1 And if nothing's happening, you don't just keep pulling money out of the savings account. I'm proud of you and glad you had it.
But you need to start to happen to life, and life is happening to you.

Speaker 1 I don't understand what that skill set, why you aren't applying for multiple different types of jobs. I don't care if it's a shift manager at Home Depot or at Banana Republic or I'm driving.

Speaker 1 I'm doing something. You have got to be bringing in income because I guess you don't need a whole lot.
Like, what is your, what do you need to actually survive each month to cover your bills?

Speaker 1 We only got about a minute. So give me a real quick answer.

Speaker 13 I would say $1,300.

Speaker 1 You need $1,300 to survive.

Speaker 1 Correct. Go make $1,300

Speaker 1 in February doing something.

Speaker 1 Now, I want to bring it back to Rachel to answer the the bigger question. She's got $72,000 in the bank.

Speaker 5 No, I wouldn't until I have a stable income coming in. I agree.

Speaker 1 Yeah. Okay.

Speaker 5 Yeah. To make sure that you can eat and everything.
But yeah, I would,

Speaker 5 you know, you've set yourself up really well, Madison.

Speaker 5 And I just don't want you to continue to be in this rut that you've been in to a degree for a year because what's happening is it's just like everything's shrinking, shrinking, shrinking, shrinking, shrinking, shrinking.

Speaker 5 And I want to stop that momentum and let it go the other way. And to Ken's point, it's not like a crazy amount.

Speaker 1 $1,300.

Speaker 1 That's the greatest. You can do this, Madison.
And you know what? There's lots of things that you can do.

Speaker 1 Hold on the line, Madison. Can we give her a copy of my book, The Proximity Principle? Read this and do this and go get paid.
This is The Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show alongside Rachel Cruz. I'm Ken Coleman, and we're here for you, America.
Thank you for being with us. Hey, we just had a wildly successful virtual event last night.

Speaker 1 And that leads me to tell you we are coming back with part two of what was a successful event last year. It's a two-night virtual event known as Investing Essentials.

Speaker 1 This is with Dave Ramsey and George Camill. This was a wildly successful event last year because people know that investing, Rachel, is very confusing.
It's intimidating.

Speaker 1 And so in this event, we're going to cover everything

Speaker 1 through the maximizing your 401k and mutual funds. And then Dave is going to give his personal playbook on how he invests in real estate.

Speaker 1 So this is not an Instagram reel with eight cuts and cool music designed to get you to click a link. This is a tried and true investing strategy that Dave has done for many decades.

Speaker 1 So that's also a popular part of this.

Speaker 1 It is happening March 4 and 5. So put that on your calendar or go ahead right now to ramseysolutions.com slash events, ramseysolutions.com slash events, and you can sign up tickets start at $199

Speaker 1 March 4 and 5. So that will be fun.
Love to see you there. All right, Bobby's up in Atlanta, Georgia.
Bobby, how can we help today?

Speaker 4 Hey guys, how are you?

Speaker 1 Good. How are you doing today?

Speaker 4 Doing all right. So my fiancé and I are getting married in April.

Speaker 1 All right.

Speaker 1 And she, thank you.

Speaker 4 She was born and raised in Scotland, and she still lives there.

Speaker 3 So we've been long distance for about almost eight years.

Speaker 1 Where in Scotland? And

Speaker 4 she's on the west coast. So she's basically right on the water about 40 minutes from Glasgow.

Speaker 1 Oh, man. Wow.

Speaker 5 I love Scotland. Are y'all going to move there? Yes.

Speaker 4 No, she's actually moving here to Georgia.

Speaker 1 Well, she's really training it out.

Speaker 1 Downgrade for her. Bobby, you must be a very convincing or charming young man.
Maybe very handsome, too.

Speaker 4 I'd do my best, or at least I've fooled her well.

Speaker 1 That's right. Hey, real quick question, and we'll get down to the important stuff.
But America wants to know, is the wedding in Scotland, and are you going to wear a kilt?

Speaker 4 So, yes, it is in Scotland.

Speaker 1 And

Speaker 4 it's right on one of the locks there, and I am not wearing a kilt.

Speaker 5 How many kilts will be at the wedding, though?

Speaker 1 I'm a little disturbed.

Speaker 5 No, I bet a lot of the attendees will wear kilts. True.

Speaker 4 Actually,

Speaker 4 you would be surprised because half of her family is English. And of course, all of my family is American.

Speaker 1 And so there's only probably going to be 25% of the people there there wearing kilts well 25% is pretty good I'll take it and Bobby I know I'm not getting an invite but if I was to be invited the Coleman line the crest or your pat your like the plaid I would wear one

Speaker 1 I really would with the high socks I'd commit to the whole

Speaker 1 bagpipe down the down the aisle that's great all right well we are we are having bagpipes down the aisle so

Speaker 1 there is that Bobby listen I could be talked into hosting the reception Email my team. We'll talk about it.
We'll see if we can make it work. All right, Bobby, this is great.

Speaker 1 So you guys grew up, different money culture, the way you looked at it. I don't know.
Well, that's what he said.

Speaker 5 No, he said that she grew up in Scotland.

Speaker 1 It's different. Okay.
So

Speaker 5 what's your question, Bobby? She's correcting me.

Speaker 1 I knew where he's going.

Speaker 4 So,

Speaker 4 yeah,

Speaker 4 she doesn't know what a 401k is, doesn't know what a Roth IRA is.

Speaker 1 But

Speaker 4 she's sort of familiar with the baby steps just from what I've talked to her about it, and she knows who Dave Ramsey is.

Speaker 4 But I'm trying to figure out what's the best way to kind of get her on board with the baby steps and kind of,

Speaker 4 she's a little bit nervous or hesitant about the intensity of the baby steps.

Speaker 1 Sure. Okay.

Speaker 1 So there's that and then the culture. Yeah, for sure.

Speaker 5 Okay. So I would start high level with you guys and just being agreeing on value systems at which money will play in on the relationship.
So a value system would be,

Speaker 5 you know, when we have money, or do we want to be giving some of this money? Is that part of our plan? Do we,

Speaker 5 how much, you know, is savings something that she gives her a level of security, right? Is there, we want to be a bad person.

Speaker 1 Is that a tool or is it a disease?

Speaker 5 Yes, yes. How is debt playing in? So, less, like, I would go less baby steps and more just a little bit of that value system because that's a human thing, not an American thing.

Speaker 5 So, you can look at money because they have money in Scotland. So, it's just like,

Speaker 5 let's together get off the street.

Speaker 1 Do they say they have money over there? And then

Speaker 5 how we implement it over here, how does that look? So if we both agree, yes, savings is important. She may be more of a spender naturally, right? And that's okay.
Opposites attract.

Speaker 5 But yes, we want to be saving for the future. We want a good retirement.
So what's the best way to do that in America?

Speaker 1 A 401k, a Roth IRA, right?

Speaker 5 These vehicles at which you can do that.

Speaker 5 And if we have debt and we want to live without debt and not have payments, because that gives us peace and because we can use our income to go on great vacations and use our income to save for the future and to give, like, that's why we want to be out of debt, right?

Speaker 5 So you kind of start high level and then from there, the baby steps is just a plan to get you from point A to point B.

Speaker 1 Do you guys have debt? Right.

Speaker 4 We do not. We are debt free.

Speaker 1 Oh, that's great. So that fast forwards everything.
For sure. So now it's emergency fund? Yeah.
Right. Right out of the gate when you guys get married.

Speaker 5 Yeah.

Speaker 4 Is she on this, is she agreeing that you guys want to work together together as a team like does she see this as a topic of life to say like yeah bank account yeah like absolutely we're gonna we're gonna do pretty much everything together okay um yeah and kind of right now she's kind of the breadwinner i'm i'm currently not employed because i'm i'm finishing up my flight instructor rating nice um and so i'll be a flight instructor pretty much immediately after we get married but right or yeah right what will your uh what will your starting salary be do you have any idea

Speaker 4 um So it's going to be an hourly position, but ballpark, I'm hoping around 50 grand.

Speaker 1 Good.

Speaker 4 35 would be like the absolute, absolute low.

Speaker 1 Okay.

Speaker 5 How much will she be making?

Speaker 4 We don't know yet, just because we don't know what she's going to be doing.

Speaker 1 She professors.

Speaker 4 Yeah, so she has a degree in international event management. So that kind of means she can do weddings.
She can do corporate events.

Speaker 1 Let me tell you something. Atlanta, Atlanta, if you guys are anywhere near the Atlanta area,

Speaker 1 that's a big event town. So that's good news for her.
Right. It's good news for her.
Yes. Yeah.
So

Speaker 4 she's done everything under the sun, whether it's social media or event planning or serving.

Speaker 1 Like we're totally not worried about her finding a job.

Speaker 5 Amazing. Okay.
So how much are you guys?

Speaker 1 I'm going to try to kick your coverage for you.

Speaker 5 How much are you guys bringing in

Speaker 5 to the marriage just money-wise? Like, how much does she have? How much do you have?

Speaker 4 So I, on my side, we have about 38,000 in savings and that comes from and that comes from an inheritance.

Speaker 1 Okay. And then

Speaker 4 she's bringing probably over just shy of 10.

Speaker 1 Okay.

Speaker 4 But both of us have very little

Speaker 4 expenses because we both live with our parents right now and it just didn't make sense for us to move into apartments each and then have to move again.

Speaker 1 I love that much.

Speaker 5 That's great. And so when you guys get married, I guess you'll be renting probably for a year or two.
Is that what you're thinking? Yeah.

Speaker 1 Yep. Okay.
That's the plan. Perfect.

Speaker 5 So, yeah. So I, I mean, I think you guys are probably more on the same page than you realize.

Speaker 5 So I would sit down together and just say, okay, yeah, let's let's like figure out, you know, the next couple of years and what we want our goals to be.

Speaker 5 And we, we have a goal of making a hundred grand, 50 and 50 or something, right? Kind of have like an income. you know, goal.
And then from there, we want to put some away for retirement.

Speaker 1 I think she'll love the emergency fund concept. Yeah.
You know, like just big picture. I thought your advice was really great.
Well, thank you, Ken.

Speaker 1 I mean that to like, they don't need, they're already advanced in the baby steps in that. Yes.
Like they're going to start at baby step three. Yeah.
And we build that.

Speaker 1 I think any woman, any human wants that safety. So explaining that concept to her, you're already halfway there, it looks like.

Speaker 1 And so the investing part that Rachel's talking about, I mean, and then saving for kids college and all that stuff.

Speaker 1 I would just ease her into it, man, and just focus on the positive vision stuff because you don't have a problem that you're trying to fix right out of the gate. I thought it was great.

Speaker 5 And yeah, and I think, you know, making it a goal for a house. I mean, you guys are in a position that your emergency fund is pretty much done, I think.

Speaker 5 And then beyond that, like, okay, let's like run some numbers and dream. Winston, I just did this last week.

Speaker 5 And it's always a fun thing to do where you're like, all right, let's just dream

Speaker 5 how much do we think we want for a down payment?

Speaker 5 And then you put it in Excel or a calculator or whatever it is, like, how much do we need to save every year? How much do we need to save every month?

Speaker 5 And you kind of start having these goals towards towards these dreams that you guys, a life that you're building together, which is beautiful. Hold on the line, Bobby.

Speaker 5 Taylor's going to pick up and we're going to give you Financial Peace University for you guys to watch these lessons together because that was really helpful for her.

Speaker 1 So fun.

Speaker 5 Yeah, just to kind of get these concepts of American way of doing money.

Speaker 1 By the way, a nod to our Scottish friends: if you look, if you're watching, see this green sweater I have on.

Speaker 1 You can't see below the desk, but imagine me in a blue and green kilt right now that matches a sweater. I didn't think it would look great.
I'll be honest. This is the Ramsey Show.

Speaker 1 This is the Ramsey Show. Thrilled to have you with us.
We're here to help you win with your money, win in your profession, and win with your relationships.

Speaker 1 888-825-5225 is the phone number. Alongside the lovely, talented, and my friend Rachel Cruz, I am just Ken,

Speaker 1 but I am Kenuff, they tell me. Ken Coleman, your host today, there's a a little Barbie reference.
Did you catch that one?

Speaker 5 I did.

Speaker 1 I appreciated it. Gotta pay attention to

Speaker 5 just the pop culture.

Speaker 1 Yeah, I try. I try to embrace the pop culture

Speaker 1 as much as I can. It's good.
Being middle-aged. All right, let's get right to the phones.
Richmond, Virginia, my old stomping grounds.

Speaker 1 Used to live there when I worked for the governor of Virginia, in case you were wondering. Jake is there.
Jake, how can we help today?

Speaker 14 Hey guys, thanks for taking my call today.

Speaker 1 I appreciate it. You bet.
What's up?

Speaker 14 All right. So me and my wife, we have a question about paying off our debt.
So currently, my wife and I were in our upper

Speaker 14 20s and we're facing quite amount of student loan debt. It's about $150,000.

Speaker 14 Now, we don't have any other debts, and we've paid off a good amount so far. We've paid off about $30,000 in total.

Speaker 1 All right.

Speaker 14 But we recently came across

Speaker 14 an amount of money in our savings. We have $30,000 saved up.

Speaker 14 And what we really would like some guidance on is how much of that to apply to our loan. You know, we're in the stage of life where we kind of want to think about a family, possibly a home,

Speaker 14 some car issues coming up, but we know that we have a good amount we want to apply to this debt to get it taken care of. So I wanted to get you guys guidance on

Speaker 14 what you think about putting that towards the debt.

Speaker 5 Sure. How much do you guys make a year?

Speaker 14 So gross, we make together around $200,000.

Speaker 1 Hey, nice. Very nice.

Speaker 5 So what's your plan as of now for the $150 to be paid off? How fast do you think you guys can do it? 18 months?

Speaker 14 Well, yeah, we were hoping within three years. 18 months would be ideal.

Speaker 5 Yeah, I mean, if you guys lived on 70, and then I'm thinking if you apply this 30,000, you could, you could knock it out pretty quick.

Speaker 1 So to answer your, yeah, to answer your question, you just swallowed really hard. Did you hear me? I was like, what?

Speaker 1 What?

Speaker 5 Because, yeah, 200 is gross. So you guys are probably coming in at what 130 after taxes?

Speaker 14 Probably right around there.

Speaker 1 Right around there.

Speaker 5 And if you lowered it to 120 and you guys, you know, lived off of 70, that would take you two years. Maybe if you did some extra work, incomes go up in general.
Yeah,

Speaker 5 18 to 24 months. So, yes, to answer your question, I would apply $29,000 of that $30,000, keep $1,000 for an emergency fund, and I would go all hands on deck.

Speaker 5 I would not be thinking about a house while you have this debt.

Speaker 5 If you guys decide to start a family, which we encourage people that, yeah, if getting married and starting a family,

Speaker 5 don't not do those things because you have debt, right?

Speaker 5 So if you guys decide in six months, like we feel like, gosh, it's time to start a family, then if that's the case, I would pause everything, not pay extra on the student loans, just keep them current and be piling up, you know, a big savings.

Speaker 5 And in nine months, you guys can put a lot in savings when you do that. And

Speaker 5 then, you know, when baby comes and everyone's good, just apply that nine months of savings to back to the debt. So that would be a time deposit.

Speaker 5 And then, you know, as car stuff starts coming up, and if you know, like, you know, a good amount ahead of time, then you,

Speaker 5 you know, be thinking about that. But if you don't have to replace a car while you have debt, I wouldn't.
I mean,

Speaker 5 I describe those things all the way through.

Speaker 1 What do you mean by car issues? Can you be more specific?

Speaker 14 Sure.

Speaker 14 Yeah, my car currently has, my wife's car is good. My car currently has around 350,000 miles and it's kind of gone out on me a few times this year.

Speaker 14 So I feel like it's really riding it to its last leg, but I feel like that might come up soon.

Speaker 1 You think? 350,000 miles? What brand of car is it?

Speaker 14 Yeah, it's a Toyota.

Speaker 1 I will tell you. Those Toyotas.
Those Toyotas.

Speaker 5 We're a Toyota family. Toyota, Lexis, like

Speaker 5 in that family.

Speaker 1 Yeah, I would say. The best cars you'll ever have.
Yeah, I'm not trying to endorse it, but you hear that a lot.

Speaker 1 Of course, our friend George would say Toyota. No, Toyota.
He doesn't know how to say it. Toyota.
And Hondas.

Speaker 5 We'll give Hondas a shot tip.

Speaker 1 I would say, say, Rachel, I'm glad we brought this up because I think this car is literally a moment away from dying.

Speaker 5 How much could you sell it for?

Speaker 1 What?

Speaker 14 I've been told.

Speaker 1 2,000.

Speaker 14 I've already tried. 2,000.

Speaker 1 I've been told. $1,000.
$1,000.

Speaker 5 $1,000. How much?

Speaker 14 Less than $1,000.

Speaker 1 Yeah, okay. You're out of your mind.

Speaker 1 $3,000.

Speaker 5 People may want a great Toyota that has lasted, Jake, from Richmond.

Speaker 1 I'll bet you it looks like it's got 350,000 miles on it, too. Am I right, Jake?

Speaker 1 Yeah, you know.

Speaker 5 Okay, so, Jake, so what I would do, for real, though,

Speaker 5 if you feel like it is on its last leg, which I get, 350,000 miles, it probably is.

Speaker 1 Try to rip somebody off for $3,000.

Speaker 5 But I would go get a $6,000 car. I would not go spend $20,000 on it.

Speaker 1 100%.

Speaker 5 Go get a beater again that maybe has 200,000 miles. And for 18 months, two years, just drive that car.

Speaker 5 And then after you you guys are out of debt, that's when you can think about stepping up with cash into something else.

Speaker 5 But I would use as much of this money to put towards the principal of your student loans because that's going to help you guys so much. I mean, it really will from a mathematical standpoint.

Speaker 5 So I'd rather drive a crappy car.

Speaker 1 Oh, no, no.

Speaker 1 This is my favorite thing to do.

Speaker 5 Ken is on his laptop, Jake. Just so I can give you contacts.

Speaker 1 I really enjoy this.

Speaker 5 He is on a car website.

Speaker 1 I got used cars for sale. He loves it.
In Richmond, Virginia. Are you in the greater Richmond area? Look at that $4,000 car.

Speaker 5 No, No, it's a Dodge. We got to get the guy a Toyota.

Speaker 1 I'm not going to give him a Dodge Avenger. Okay, but

Speaker 1 for crying out loud. Okay.

Speaker 1 I mean,

Speaker 1 listen, some of these cars,

Speaker 1 I want to make the point that it's not a complete beater here. Let me just, this is worth.
Okay, here we go. A 2014 Chevrolet Impala.
All right.

Speaker 5 10 years old, 4,000 bucks.

Speaker 1 $4,000. $142,000 miles.
It's a Chevrolet. Yeah, there you go.
It's not the greatest brand in the world, but they're not expensive to fix either.

Speaker 5 That's true.

Speaker 1 And

Speaker 1 Heaven Impala is a famous song, famous line. I'll let the audience figure that one out.
But I know you don't know it. I'll share it during the break.
It's too much to try to explain to you.

Speaker 1 It's an age thing. She just doesn't, she doesn't get it.
But anyway, that's the example there. And I really am having fun with this, but people don't realize what you can get for under $5,000.
Yes.

Speaker 1 And let's be honest, he's driving a turd.

Speaker 5 It's a Toyota.

Speaker 1 It's done its job. Yeah, yeah.
But it's going to die soon. And so for four grand, you get the Chevy Impala.
Is it good looking? I'm not going to lie to you.

Speaker 5 It's not different colors. It's just a silver car.
You would never know.

Speaker 1 Yeah, I'm saying the Impala, the 2014 Impala is not a car that you buy for status.

Speaker 5 Sure.

Speaker 1 But that's okay.

Speaker 5 And that's why you get it. That's why we do it.
We get it for

Speaker 1 A to B.

Speaker 5 A to B. That's all we're looking for, yes, for this time period.

Speaker 5 So, yeah, so I would put as much as you can Jake that you guys feel comfortable with um again with the car replacement and an emergency fund everything else needs to go to this and then you guys are in a perfect position too Jake

Speaker 5 to to go and earn some extra money on a side hustle before kids it is absolutely it is the time to do it it really is because you know and we talk to families all the time that get out of debt with kids right i mean that's that is a lot of our audience but it's hard like when you have a full day of work you pick up your kids and then you have to go to another another job and this, you know, and a spouse has to stay home and do bets.

Speaker 5 I mean, like, it just gets really complicated and it gets more and more tiring and more difficult. And so you guys are in a perfect season for six, eight months.
Like go work extra, right?

Speaker 5 Bring some of that in. What do you got? What do you got for us, Ken?

Speaker 1 James, I got a snappy looking 2012 Mazda 3 touring, only five grand, 130,000 miles. And it's got a nice little blue color to it.

Speaker 1 You kind of feel good about yourself, zipping into wherever it is you got to go. So again, I make the point.

Speaker 1 and uh quick commercial break i'm going to teach rachel about this famous song lyric that involved impala and we'll be back this is the ramsey show

Speaker 1 Welcome back, America. You have joined the conversation here on the Ramsey Show alongside Rachel Cruz.
I'm Ken Coleman.

Speaker 1 Excited to have you with us today, taking your money calls, your income, profession-related calls, because that goes together. Let's get right back to the phones.

Speaker 1 Madison, Wisconsin is where Tyler joins us. Tyler, how can we help today?

Speaker 16 Hey, Ken and Rachel, thanks so much for taking my call.

Speaker 14 You bet.

Speaker 16 Yeah, so my wife and I are about $42,000 in debt.

Speaker 9 And after watching Rachel's message at Fresh Life, it really kind of motivated us to really go hard at the debt.

Speaker 9 And so, yeah, we're very thankful for that because that

Speaker 16 shifted our mindset a lot.

Speaker 16 And so one thing we're going to do, and we were kind of going down this path anyway, but we're selling our house that we're in right now.

Speaker 12 And initially, our plan was actually to sell our house, buy a new house in a different area.

Speaker 16 And now we have decided we're actually going to sell the house, move into an apartment

Speaker 16 because we're going to net around 200,000-ish

Speaker 1 with the sale of our house. Oh, wow.
Okay.

Speaker 9 And yeah, and so basically we're trying to figure out the best way to handle that because I think the obvious route is to take that, throw

Speaker 9 everything at the debt that we have, about $42,000. So take $42,000, throw it at the debt.

Speaker 10 That would leave us with about $160,000 left.

Speaker 16 And ultimately, we do want to buy another house in one, two, three years.

Speaker 16 But I just don't know the best way to handle how we handle that money as far as do we put the rest, you know, aside for down payment, do we put any anything?

Speaker 5 Why are you guys selling

Speaker 5 to move to a a different area?

Speaker 2 Yeah,

Speaker 8 we moved.

Speaker 16 We got kind of lucky as far as timing for this house, and we bought it in 2020.

Speaker 10 And yeah, we just moved here for my wife's job.

Speaker 16 And honestly, we hate the area. And

Speaker 10 my wife's job, she's not working at that job anymore. So it's the location isn't relevant for us.

Speaker 16 I work from home, so really location doesn't matter. And so we're just kind of hoping to move to an area that we like a little bit better.

Speaker 1 Okay, how far?

Speaker 5 I'm just curious from where you guys currently are to where you want to be. Is it like a 30-minute difference or is it like a 10-minute?

Speaker 10 It's about two hours.

Speaker 1 Oh, like a totally different area.

Speaker 5 Okay, I'm sorry. I got you.

Speaker 1 Yeah. Okay.
That's great.

Speaker 5 So, um, so yeah, Tyler, I would for sure, um,

Speaker 5 yep, when you guys get um that 200,000, I would, yes, apply it to the 42. Go ahead and pay off your debt that day.
I would set some money aside.

Speaker 5 At this point, for you guys, do you have, do you all have any kids?

Speaker 9 Yeah, yep, we do. I have a nine-month-old baby.

Speaker 5 Oh, okay, okay. And you guys, do you guys both have pretty stable jobs?

Speaker 16 My wife is a stay-at-home mom,

Speaker 16 and I am self-employed, so it's pretty, my income is pretty variable.

Speaker 5 Okay, so for because of that, because of the kid element, and it's on one income, and it's a variable income, I would probably just put aside six months of an emergency fund. Absolutely.

Speaker 5 We always say three to six months, but three would be, you know, if it's, if you're single or if you don't have any kids and you both have pretty stable incomes, you could do more of the three.

Speaker 5 But because it's a little bit, just to give you guys some extra safety. So I would figure out your monthly expenses, multiply it by six, and out of that 150,

Speaker 5 put that aside. And I would just open up a high-yield savings account.
This is what my husband and I did, and label it emergency fund. And you don't touch it.

Speaker 5 And then I would leave the rest, which would be what? How much do you think an emergency, a six-month emergency fund would be for you guys?

Speaker 10 Yeah, so we actually, good news is we we actually already have that taken care of.

Speaker 10 But it's about 30,000.

Speaker 9 So yeah, we actually have that already apart from the 200,000.

Speaker 1 Oh, wow. Okay.

Speaker 5 That's fantastic. Okay.
So, yeah, so the 160 that's left then, I would just keep it in a high-yield savings, honestly, Tyler.

Speaker 5 I probably, I would not invest it because you guys are going to use it for a down payment in the next, you know, two to three years at the latest, probably.

Speaker 5 So, yeah, I would, if it's not more than five years, if it was more than five years, I would invest.

Speaker 5 But you guys are in in a position, and you may even pull the trigger faster, you know, if you see a great house. Cause the sooner you get in the market, honestly, the better it's going to be.

Speaker 5 And you guys will have a

Speaker 5 great down payment. So I would just put it in a high-yield savings and just let it be there.

Speaker 6 That's, that's really helpful.

Speaker 16 So this might be a dumb question, but I was kind of doing research into that.

Speaker 10 Like, what classifies something as a high-yield savings?

Speaker 16 Like, we have. Our savings account right now.

Speaker 10 I don't know if it's classified as that or not, but it's.

Speaker 5 Yeah, it'll be pretty apparent. It'll say high yield.

Speaker 5 So a high-yield savings, a money market account and that it will say it and you know just this is not a plug it's just what we use we use ally bank usually an online bank is going to be better for high yield savings you're going to get probably get a little bit of a better rate of return versus a brick and mortar standard bank so we we have our checking with a kind of a local bank uh that has brick and mortar and then we have an online high yield savings we just have it through ally i know there's a couple of companies that are out there but you can even just google and honest and and i don't know there's there's a lot out there just make sure that there's no because some some banks you know if they're online you know will charge you like weird fees and like so kind of look into the fine print and just you know get a great option but something like ally is totally fine yeah appreciate the call and good job good job young man i mean

Speaker 1 taking great care of your family love that you got all that cash and now you're going to be debt free pretty soon so don't talk yourself out of that don't let anybody talk yourself out of that rachel set you up really well so really really happy for you as you kind of start a new chapter really fun let's go to columbia south Carolina.

Speaker 1 And Kevin is joining us there. Kevin, how can we help today?

Speaker 12 Yeah.

Speaker 9 Hey, thank you guys for taking my call.

Speaker 17 My question is,

Speaker 17 I pulled a large sum of money out of my retirement investments to build a home.

Speaker 17 I'll give you a little backstory. My wife and I are both over 59 and a half.
She's retired, draws a pension of about 42,000 a year. I make about $142,000 of my salary.

Speaker 17 And we have got

Speaker 17 about $1.85 million in investments, some pre-tax, Roth, and then some non-retirement

Speaker 17 investment accounts. And in that $1.85 million, there's roughly $200,000 in cash.

Speaker 17 What I'm happy to do is to try to pull some money out of my retirement investments to fund the house, but not cripple myself in retirement.

Speaker 1 How much money are you thinking about pulling out?

Speaker 17 I need about $750,000 for the purchase for the construction of the home.

Speaker 17 So part of that would be funded by the $200,000 in cash, still leaving us a fully funded emergency fund.

Speaker 17 And then the balance we would pull out of them in the most of it is we could out of the raw off and then the balance would have to come out of the pre-tax accounts.

Speaker 1 What is your current situation as far as a home? Do you own your current home?

Speaker 17 We own our current home. We have no debt.

Speaker 17 We're going to tear the house down of the property that we're on because

Speaker 17 the value is in the land, not in the dwelling and sort of build our dream home oh on your current on your current home

Speaker 1 that's correct yeah so yeah so we're going to just tear down what we what we currently reside in move out and then build a home beyond this what's the total cost of that going to be you said 750 plus plus or is it 750 yeah

Speaker 17 it'll be 750 is what the contract price will be similar to probably 10 for contingency money so you know somewhere 825 to 850 we're thinking Okay.

Speaker 5 And have you guys run out numbers? Because that's going to leave you, you know, 1.2 left in retirement.

Speaker 5 And have you guys run numbers on that or how long you're going to be working, just making sure that you guys are in a good spot long term?

Speaker 17 Yeah, we feel pretty good about that. We figure we'll have somewhere between 850 to 900K left in retirement investments.

Speaker 17 And then, you know, given the rate of return, you know, banking at 10%,

Speaker 17 hopefully for average units, we feel like we'd be very comfortable.

Speaker 17 We hadn't anticipated anticipated pulling any kind of money towards or pulling Social Security money until we get

Speaker 17 full retirement age or even 70 if it permits. So we feel pretty comfortable.
We don't say we don't have any of the debt.

Speaker 1 Yeah,

Speaker 17 it makes me nervous tapping into retirement funds.

Speaker 5 Yeah, for sure. And you know what, Kevin, I would sit down with the Smart Vestor Pro because I would want to make sure that what you're pulling out principal-wise,

Speaker 5 which avenue is better through like the Roths or a 401k, you know, if that's a better play or just any standard mutual funds you guys have, because some of these gains on, you know, the, the, the pre-tax investments, you're going to pay capital gains on some of that too.

Speaker 5 And so there is a little bit of a strategic play that in the next, you know, 30 seconds, I'm not sure if I, I'm going to be able to answer that.

Speaker 5 So, um, so yeah, I mean, I think from a number standpoint, you're not being irresponsible at all. Um, but that next step is, yeah, how, how and which investments to take out of.

Speaker 5 And I would talk to to your financial planner

Speaker 5 to make sure you're doing that from a tax perspective, the wisest way.

Speaker 1 No, agreed. But because you still got earning potential, still got a really nice nest egg that will continue to grow, and this is a part of your retirement strategy.

Speaker 1 So, for using the funds that way for a paid-off house, I don't think there's anything scary here, but make sure you do your homework. This is the Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show. I'm Ken Coleman, and Rachel Cruz is alongside.
Thrilled to have you with us. Glad you're with us wherever you are, however you are watching.

Speaker 1 Let's get right back to the phones. 888-825-5225 is the number.
Brandy is joining us now in Pendleton, Oregon. Brandy, how can we help today?

Speaker 15 Hi, thank you for taking my call.

Speaker 1 You bet. What's going on?

Speaker 15 I am Single Mom of several disabilities, and I'm trying to figure out how to make extra income to cover my four walls. I love what I do for work.

Speaker 1 What do you do?

Speaker 15 Divorce.

Speaker 15 I work in development for a ministry.

Speaker 1 Okay, and what kind of income do you make there?

Speaker 15 My take-home with child support, and my income combined is about $2,800 net a month.

Speaker 1 $2,800 net. Okay.

Speaker 1 And Brandy, real quick, can you try to adjust your phone a little bit? I feel like it's a little muffled. Let's see if we can hear you a little bit better if you take a look at that.

Speaker 1 Give us a little bit. Yeah, can you you hear me better? That's so much better.
Thank you.

Speaker 1 Okay, and so

Speaker 1 we know what your take-home is. How much additional income would be

Speaker 1 ideal? And I'm not talking some crazy dream number, but just this would give me some real breathing room to take care of the four walls. And

Speaker 1 let us know what that looks like.

Speaker 15 $2,500 a month.

Speaker 1 In addition to what you're making?

Speaker 9 Yes.

Speaker 1 Okay. So we want to to go from $28 to $5,300.

Speaker 1 Okay, that's great. I love that you have that target.
Are you currently, is that an issue because of debt?

Speaker 15 Debt and disabilities and just the parenting plan schedule that I have. So I'm divorced, disabled.
I've got two kids that are three and five years old.

Speaker 15 So one is in school and one is in preschool slash daycare.

Speaker 15 I've sold all my assets in the divorce. I got the house in the divorce, and my ex-husband got everything else.

Speaker 15 But I have to pay him $20,000 additionally for his portion of equity.

Speaker 1 Oh, okay.

Speaker 1 All right. So let me ask you this before we dive into the numbers, and Rachel's going to help me here as we get you out of this debt and all this.

Speaker 1 And I don't want to share anything you don't feel comfortable with, but what can you do?

Speaker 1 In other words, physically, with your disabilities,

Speaker 1 just tell me what you can do physically instead of going going through what you can't do.

Speaker 1 What are you able to do?

Speaker 15 I've been trying to do some side hustles. I do door dashing and photography and marketing services on the side, but I'm just not seeing enough income consistently to

Speaker 15 rely on that.

Speaker 1 Have you looked at freelance work?

Speaker 1 Because it's everywhere.

Speaker 1 And programming because that's your greatest skill is the programming. If you were doing what you were doing for a for-profit business, not a ministry, my guess is you might be making 20 to 30% more.

Speaker 1 Is that outrageous? What I'm saying?

Speaker 13 Yeah.

Speaker 1 Brandon. I agree.
Listen, I would be putting all my attention right now into freelance opportunities with your programming skills because that's going to pay you top-notch for your time.

Speaker 1 Of all the things that you could do, and when we look at exchanging time,

Speaker 1 For money, that's going to be your highest rate. You agree with that, correct?

Speaker 1 Correct. That's what I would be doing.

Speaker 1 Because when I look at that number of increasing your income by an additional $2,500 a month, that's what I would be doing. Now, I want to bring Rachel in.

Speaker 5 How much debt do you have? Yeah. How much debt do you have, Brandy?

Speaker 15 $64,000.

Speaker 5 $64,000. What is that? Will you break that out for me?

Speaker 15 That is $12,500 to my ex-husband, which he's willing to wait until I sell the house. It's not an area where we live anyways, and I need to come up with some money to pay off all this debt.

Speaker 1 Okay, pause

Speaker 1 the portion of the debt is

Speaker 1 a construction loan. Brandy, hold on one second.
I want to make sure Rachel gets this, that I get this.

Speaker 1 The home that you're going to sell, it's not the home you're living in, and it's in a different area. Is that correct?

Speaker 15 Yeah, I have a renter in there right now.

Speaker 15 That's part of my income.

Speaker 1 What do you stand to make? If you sold that today, what do you think you can make on that? Walking away.

Speaker 15 I paid it it off except for a construction loan, so approximately $110,000.

Speaker 5 Amazing. Is it on the market right now?

Speaker 15 I'm in the works of listing it right now. I'm just waiting for the realtor to put it on the market, but I updated the listing for her.

Speaker 1 And you owe your ex $12,500 out of the proceeds of that $110,000.

Speaker 1 Yes.

Speaker 15 I owed him $20,000, but I've paid it down to $1,200.

Speaker 15 I'm supposed to give him $5,000 every six months per court order, but he agreed to give me more time to just pay him a lump sum once the house.

Speaker 5 And where are you living right now, Brandy?

Speaker 15 Are you renting? I'm living I'm renting. I'm living in an area where my ex-husband lives and works, so we can co-parent, and it's also close to both our jobs.

Speaker 5 Okay, that's great. So you'll have $98,000 after the sale of this house.
And an average, you know, median days on the market right now is around 70 days or so.

Speaker 5 So hopefully in the next three to four months, your house will sell.

Speaker 5 So it is, this is short term in a sense, but that $98,000

Speaker 5 from there, I would direct you at because all your debt will be paid off at that point.

Speaker 15 Yeah, I'd like to get to baby step four.

Speaker 1 I think I'd be able to do that with the sale of this home.

Speaker 15 I think it's just the short term, but I'm trying to figure out.

Speaker 5 Yeah, so that's what I was going to, okay, that's great. Because Ken is right for the short term, for the next, I mean, make it a goal for the next six months to bring in an extra two grand a month.

Speaker 5 And you can because of the programming

Speaker 5 skills.

Speaker 5 You know, at the beginning of this call, Brandy, just where my mind was going, I almost was going to encourage you, even though you love your job, a lot of us love things, but we just don't make enough money to cover it.

Speaker 5 I was going to encourage you to maybe work somewhere else for two to three, four years just to get some really good financial gain under you.

Speaker 5 And then you can always go back to the nonprofit down the road. But

Speaker 5 there is something to be said that, you know, because what you're giving up when you're doing those side hustles is more hours of your time where you could be making that same amount in a shorter amount of time.

Speaker 5 Right. And so, um, so I, I mean, I don't know.
I know you love your job and I'm sure it's an incredible nonprofit and, and they do incredible work.

Speaker 5 And people that work in nonprofits, you know, there's such great work there. But when you are a single mom with a list of disabilities, there's only so much you can do.

Speaker 5 Uh, I, I, I mean, you need to financially get in a spot where you're taken care of and you have money saved in the bank, you're working for a down payment on a home.

Speaker 5 I mean, there's some stuff there that's that's real. Um, that I, I mean, it's some, it's something to consider.

Speaker 1 I don't want to push you into it, but um, yeah, absolutely, but I would consider it considered that.

Speaker 15 Um, my only issue with switching jobs currently is, other than what I love, what I do, um, my ex-husband works for a prison and his schedule changes every six months.

Speaker 15 And I've had to be kind of the one pen on the back burner to make my

Speaker 1 flexibility.

Speaker 6 I get you.

Speaker 15 They're not very flexible.

Speaker 15 Well, that's why it gets changes every six months, and the parenting plan pretty much changes every six months.

Speaker 1 I'm so sorry. But I tell you what, this is great news.

Speaker 1 Brandy, I'm sorry that you're a single mama. I'm sorry you're going through all this.
I'm sorry that you're dealing with these disabilities, but I wanted to encourage you. I'm so impressed.

Speaker 1 You're tough as nails.

Speaker 1 I am so impressed. And I'm also happy for you.
You're going to get out of this debt here pretty soon.

Speaker 1 I really believe that I want you to, if you try and keep trying and keep trying to sell your programming skills, I think we can get to that money goal

Speaker 1 of increased income a lot faster than you.

Speaker 1 Here's my point. You can do that at home.
And you know what I mean? And be around the babies.

Speaker 1 Not out in a car, driving around when you're already struggling with some physical stuff. Bless your heart.
I just really would like you to try that.

Speaker 1 There's so much skill set and experience that you have to offer to the world.

Speaker 1 I would go that route and I mean aggressive. And so, I mean, I would talk to anybody and everybody on social media, in your network, at the church, you know, wherever you're frequenting with the kids.

Speaker 1 Hey, I'm a programmer. I'm a single mama.
And I'm looking to do some contract work. That is okay.
There's no shame in that statement. And I think people will say, hey, I need some programming work.

Speaker 1 They may not be able to afford you as a full-time employee, but but pay you an hourly rate. Or know somebody who knows somebody who needs it.
So I would really encourage you to do that, Brandy.

Speaker 1 And we're rooting for you.

Speaker 1 Follow the baby steps. So excited to hear you say.

Speaker 1 Pretty soon, I'm in baby step four. And what a legacy that is.

Speaker 1 Rachel, it breaks my heart for the single mamas.

Speaker 5 I mean, they are the toughest.

Speaker 1 Toughest people on people. Oh, my gosh.

Speaker 5 I don't know how they do it. You guys are amazing.
Well done, Brandy.

Speaker 1 We're cheering for you, Brandy. This is the Ramsey Show.
We'll be right back.

Speaker 1 All right, America, we're back after a quick break. This is The Ramsey Show.
I'm Ken Coleman. Rachel Cruz is with me, and we're excited to have you with us.
The phone number is 888-825-5225.

Speaker 1 And

Speaker 1 the real estate market, Rachel, I know your hubs is in real estate. You know, Dave's in real estate.

Speaker 1 And you started thinking about where we're going in 2025, new year, what's going to happen, what's the Fed going to do, how does that affect this, all the things.

Speaker 1 And, you know, it can be really crazy. If you look at the 15-year fixed mortgage rate, for example, it's fluctuated between 5% and 7% for the past few years.
And

Speaker 1 most experts are predicting this is going to continue for most of 2025. I'm seeing that as well.
People kind of think, well, we're going to kind of be in a holding pattern.

Speaker 1 And so while today's rates might feel high,

Speaker 1 compared to what some of us have seen in our lifetime, I've seen much higher and obviously we've seen much lower. But historically, 7.5% is a historical average.
So,

Speaker 1 we don't want you to be sitting there trying to time the market. If you're financially ready and you can afford the monthly payments, now is a great time to buy your home.

Speaker 1 And so, to learn more about the trends and get real help as we walk you through what to do as you're thinking about buying or selling, go to ramseysolutions.com slash market.

Speaker 1 That's ramseysolutions.com.

Speaker 5 Yeah, I I think

Speaker 5 you know the two biggest myths that I feel like over the past couple of years we keep seeing that people are still believing is, well, rates will just rates will go back down. They'll go back down.

Speaker 5 They'll go back down. I don't know if we'll ever see 2%

Speaker 1 again. I mean, might be a long time.

Speaker 5 I mean, I don't, I mean, it's just not.

Speaker 1 I mean, it'll be a pretty dusty skeleton, I think.

Speaker 5 I mean, yeah. So, so again, it's not like it's going to go from six to two in six months.
Like, it's just not.

Speaker 5 So, if you're ready, you can always refinance if it does drop that that drastically, but it's, it's

Speaker 5 probably not. And the other thing is house prices are not going to take a nosedive.
You know, that was a big thing for a while. People thought like 2021, 2022, like, oh, it's a bubble.

Speaker 5 Everything's going to pop.

Speaker 1 Certain markets will. Have you seen Austin, Texas?

Speaker 5 Well, Austin is an anomaly. That is true.
Yes.

Speaker 1 But I can hear people right now that want to make sure we address their.

Speaker 5 But they are correcting. There's a correction.
There's a correction, but it's not going to drop. That's right.
It's not going to go down.

Speaker 5 You know, a million-dollar house isn't going to go to, you know, half a million idea. Like, they're pretty much stabilizing for the most part.

Speaker 5 It's softening to a degree, but again,

Speaker 5 it's not crazy. It's not this bubble that's going to pop and you're going to get all these foreclosures like we saw in 2007, 2008.

Speaker 1 I'm going to predict a Trump bump. Trump bump.
In the first couple of years.

Speaker 1 We might see

Speaker 1 kind of an interesting, chilled-out

Speaker 1 little easy roller coaster this year.

Speaker 1 A little down, but I think it's going to be very interesting to see in year two and three

Speaker 1 of his administration. Yeah.
What will consumer confidence look like? I don't have a crystal ball, but I just have a feeling. Yes.

Speaker 5 Well, someone should

Speaker 5 have perceived confidence, right? When people feel just good in general and they feel good about where the economy specifically is.

Speaker 1 What happens with regulation? What happens with tariffs? You know, what happens when you start to see more supply come on the market? Will builders, you know, will there be more lower income?

Speaker 1 I don't mean that, I'm sorry, not lower income housing, but will we see housing starts come in at

Speaker 1 a much more affordable rate? Yes. because all of these things are affected by sometimes macro policies that do, in fact, come out of the White House.
So, sure, it's going to be interesting to see.

Speaker 5 Yeah, it's good. Great.

Speaker 1 So, hang on. But the point is, if you're ready, jump in now, and we're here to walk you through it.
Kevin is up in Riverside, California. Kevin, how can we help?

Speaker 1 Hello. Hey, Kevin, you're live on the Ramsey Show with Ken and Rachel.
What's going on?

Speaker 17 Thank you for taking my call.

Speaker 1 You bet. What's up?

Speaker 7 So,

Speaker 17 I'm in $650,000 in debt,

Speaker 17 and that includes mortgage, personal loans, auto loans.

Speaker 1 Can you break that down for us real quick?

Speaker 1 How much is the mortgage? Yeah. Debt.

Speaker 17 The mortgage, I owe about $477,000.

Speaker 1 Okay. And now break down the rest of the debt for us.

Speaker 6 Cars is about

Speaker 17 $62,000.

Speaker 1 For two cars?

Speaker 17 for two cars.

Speaker 1 Okay,

Speaker 1 keep going.

Speaker 17 Credit cards,

Speaker 6 just me.

Speaker 17 I haven't done,

Speaker 17 my wife hasn't taken hers or brokers down yet, but my cards are about

Speaker 17 oh geez,

Speaker 10 I would say 25,000.

Speaker 1 Okay.

Speaker 1 Personal loans?

Speaker 17 Personal loans,

Speaker 17 small business, I would say $25,000.

Speaker 1 Okay.

Speaker 11 And then the rest in small loans like a firm and stuff like that.

Speaker 5 Yeah, which would equal what?

Speaker 3 I haven't broken that down yet, but it's pretty much the rest of my debt.

Speaker 1 And so how much debt, so that makes up the whole $655,000, if I'm doing quick math. Am I right?

Speaker 1 Yeah, I guess you're going to have to do that.

Speaker 1 I'm sorry. I'm trying to move us along, Kevin.
How much debt does your wife have?

Speaker 10 I'm guessing about $25,000 of our

Speaker 1 credit cards?

Speaker 17 Credit cards and personal.

Speaker 1 Okay. And you guys have separate finances, it sounds like.

Speaker 17 We don't. We actually make these decisions together, which is.

Speaker 1 Okay, you threw me off when you said her debts.

Speaker 5 Well, yeah, yeah, yeah, yeah. But you guys have like, yeah, it's different.

Speaker 1 Either way. So we okay.

Speaker 1 So we got 655 plus her 25. I'm trying to give Rachel a four.

Speaker 5 Okay, how much do you guys make a year, Kevin?

Speaker 6 We make $130.

Speaker 5 Kevin, what the crap have y'all been doing?

Speaker 3 I know.

Speaker 1 Oh, man. I'm sick of it.

Speaker 5 Just living. Just living.
Wow. Yeah.
You know, and normal. And let me say that, Kevin.
I mean,

Speaker 5 this literally is America. I'm like, this is is normal.
You're racking up, you know, credit card debts, two brand new cars. I mean,

Speaker 5 this is it. Okay, so what's gotten you to the point you said, I'm sick of it?

Speaker 5 What has, what's kind of, what's kind of brought, what's brought it to a head that even caused you to call today?

Speaker 3 We had a little girl seven months ago.

Speaker 1 Oh, wow. That'll do it.

Speaker 5 That'll do it.

Speaker 5 And how is your wife feeling right now?

Speaker 17 She's stressed to the moon in back.

Speaker 1 Yep.

Speaker 5 Yep.

Speaker 1 Where are you at? Emotionally up at night. Where are you at?

Speaker 17 I have a hard time connecting emotions to it, and that's probably why I'm in this mess.

Speaker 1 Okay, so

Speaker 1 what's the real need?

Speaker 1 We know what the problem is. What can we help you with today?

Speaker 13 Well,

Speaker 17 me and my wife work for my family business, and we work 40 hours a week. Well, I do.
She stays at home with our little girl most of the time.

Speaker 17 But

Speaker 9 I want to work more,

Speaker 17 but I feel like I'm a little selfish for wanting to work a lot more than 40 hours

Speaker 1 and not being home. All right, I'm jumping in because we got about two minutes with you or less.
You're not being selfish.

Speaker 1 In fact, I would say you're being selfish if you're not working 80 hours a week. And is your wife collecting a salary? You said we both work for the family business.
Is she getting paid to be at home?

Speaker 6 We collect salary.

Speaker 17 She works from home

Speaker 1 on her computer. So, great.
So, you need to be working like crazy.

Speaker 5 How much is your mortgage payment a month?

Speaker 9 $3,700.

Speaker 1 Okay.

Speaker 5 I mean, that's getting up to what, 40% of your take-home pay? Yeah.

Speaker 1 Yeah.

Speaker 5 Okay. So, here's what I do, Kevin.
So, this is going to be real quick. This is going to be very painful to implement.
It's much easier for me to sell you all this.

Speaker 5 I would put the house on the market. I would sell it.
This is way,

Speaker 5 way out of bounds.

Speaker 5 You have too much house. It's taking 40%.
And then think about all these other payments. You guys are barely able to eat.
I'm like,

Speaker 5 this is taking up so much. So if I were you guys,

Speaker 5 I would sell the house. I would sell the cars.
I would be working 80 hours a week and I would clean this up. That's what I would do.

Speaker 5 I mean, I would, would you get any equity from the home if you guys sold?

Speaker 17 There's about 30,000 in the house, which I feel like is all fees for putting it on the market anyways.

Speaker 1 Well, but again, if you can get out, even if it's a break-even, she's right. You saved yourself $3,700 a month, which you need to do.

Speaker 5 Because your income, the ratio of what you guys need to pay for rent and mortgage needs to be about half of where you're at because you're house poor.

Speaker 5 I'm like, you guys, you know, so I would cut up the credit cards tonight. You have to have, keep this feeling of, I'm done.
I'm done. I'm done.
I'm done. And you have to get dead out of your life.

Speaker 5 You have to stop. And I would be selling everything in sight, including those cars and get your head above water.
You guys have, you know, three to to four year journey here, but you, you can do this.

Speaker 5 Hold on the line. Taylor's going to pick up and we're going to give you guys Financial Peace University, which is our nine-lesson course.

Speaker 5 And you guys watch this together and just implement these steps. It's going to be hard, but worth it.

Speaker 1 This is The Ramsey Show.