You Need To Do a 180 From the Life You’ve Been Living

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by my co-host, Rachel Cruz.
She's also the co-host of another show we do together called Smart Money Happy Hour. The number to call is 888-825-5225.
You jump in. We'll talk about your life, your money.
We'll help you take the right next step. And we'll try to make it entertaining, too, because, you know, life's too short.
Yeah, yeah yeah and money's fun all this is fun yeah

the world is heavy and we're out here just making the light of it all and showing you some a path forward some hope so jeremy's going to kick us off across the border in ottawa canada what's going on jeremy oh just trying to keep one foot in front of the other about yourself that's right my friend how we help? Well, hopefully with some answers to some money problems. But in a nutshell, I uprooted my family and moved, ended up taking about a 65% pay cut.
And now everything's just starting to pile up and pile left and i i want to know if it makes me a deadbeat father if i uh if i move back to my old job where i'm making north of 150k versus south of 50k just to keep all the all the bills paid and food in the fridge what was the reason for you to uproot them and take this pay cut It was clearly a big enough reason that you guys decided to do this. Just to keep the family together, be a little bit closer to my partner's family.
They're super close, but... Okay, and now you're realizing we can't sustain this financially.
With our lifestyle, our bills, and our much lower income, this is stressful for us, even though we're closer to family.

Exactly.

When you moved away, how far away are you from where you guys moved?

Because when you said to go back to my job, does that mean move again to go back to the old job?

Or you could do something different with where you guys live now?

It's 3,000 miles.

And I was told if I go back, I'm going back by myself. Whoa, like an ultimatum? Yeah.
Does she understand what's going on financially at all? How is she feeling? Is she stressed about it? uh she knows that it's not, but she's kind of blind to it. And she just took a different job to work less hours, too.
Which isn't helping anything. Okay, when you say she's blind to it, does that mean that she doesn't have all the information, or she has all the information, but the way she's processing it is not correct in reality.
I think she's just ignoring the issue. Okay.
How much are you guys in the whole month financially with after everything's paid? How much, how much more do you need? I don't know. She doesn't tell me what, what her expenses are.
Okay. So you guys don't have any finances combined? No.
Are you legally married or just cohabitating? Just we're common law. We got two

little ones. Okay.
And bank accounts are separate. Do you guys Venmo each other for the mortgage?

How does this work? I take care of the mortgage in one vehicle and she does the rest. Okay, and she's not feeling the stress of this financially? Just you? No, she is too.
Because apparently she hasn't been able to make her minimums either. Okay, so it's sounding more like a relationship issue, Jeremy.
It sounds like you guys just aren't doing well as a couple in general. I don't know if money's the main issue.
I think it's become a symptom of it. But you guys, it doesn't sound like you guys communicate well or have the same goals or do this life together very well.
It seems very separate, even from an emotional standpoint. Is that right? It's getting there, that's for sure.
Well, it sounds like you went along with this to appease her, to be closer to family, knowing full well you guys were going to be in the hole financially. And I don't know if you didn't make that clear, or if she just was blind to it, as you said, and just going, I don't care, we're making this move.
We'll figure it out. That's pretty much.
Well, I don't know who your God is, but you need to come to Jesus' conversation where you go, listen, you're clearly not doing well financially. I'm not doing well financially.
This family's not doing well financially, and life is too short to live with this kind of stress. So if we're going to stay here, we have to make it work, and here's what that's going to take.
And that's when we lay out the finances together, get on a budget together and figure out what the hole is and how we're getting out of it. And that might mean you need to find a higher paying job.
She needs to work more hours. We need to combine bank accounts.
That might be some of the next steps you take. Okay.
And if that doesn't work, should I jump back out to my old jobs just so that I know that my kids are fed? I mean, that's the noble thing to do. I don't think it helps your marriage at all or with this common law situation you have going on.
So you're going to grow further apart while keeping the kids fed. And so I'd rather keep the kids fed.
Can you keep the kids fed, though, where you guys are to be able to work on the relationship and get a higher-paying job where you are? Or can you sell the car and make other sacrifices to cover your four walls for now? The car's upside down by about 15. Do you know what she makes at all? She's supposed to make $85 a year, but she has a habit of not going to work.
Wouldn't you get fired? If I don't show up to work enough, Dave says, all right, we're going to find someone else who can actually do this job. Well, she works in health care, so they're begging for people to work there.
And what do you do? I'm in the construction. Okay.
What were you doing before when you were making six figures? I was working in a mining industry. And that industry obviously doesn't exist where you're at? No.
Is there an equivalent or is there a better construction job up the ladder that you can aim toward? I've progressed up the ladder in my company a little bit already. And the next step would be to become a supervisor.
But that's at least a year and a half out out because i've asked my boss for more hours and if he would be able to give me give me a wage increase and he just said that i'm i'm not there yet okay so jeremy i think what it comes down to is you guys aren't paying your bills i mean what what's happening financially there's an issue So the adult thing is that you both sit down together

and say, here's what it takes to run our household.

And we have to make X amount every month for this to happen.

And we don't get to decide that we don't feel like doing that.

That has to happen.

So either we're cutting our freaking lifestyle

and taking everything off the table and doing nothing

in order to feed the kids,

or we're going to have to decide different jobs.

We're going to have to choose to move back.

Like,

Thank you. and taking everything off the table and doing nothing in order to feed the kids.
Or we're going to have to decide different jobs. We're going to have to choose to move back.
Like we don't get to just sit and not make money and not pay our bills like that. Like we can't do that.
So that's not an option. We're adults and this is part of life.
And so that's one thing. But the other thing I'm very concerned about, Jeremy, is the relationship.
I mean, I mean, it, it sounds bizarre to me that she's so in the clouds that she wants nothing to do with you financially.

And she's made that very clear.

My question is why?

Because long term, this is not a sustained relationship.

You cannot live your life on two separate pages financially.

Because what that is, it's an indicator of how your relationship is in general.

And you guys are going to just keep moving further and further apart.

And you guys have two kids together, so it's worth the fight.

But you first, from a tactical standpoint, have to get enough money in to pay the bills.

And you both have to come to that understanding.

And if she is so in the clouds in that, then she may not be a great partner long term

because she's probably in the clouds on everything else.

So there has to be some big decisions that are going to be really difficult,

but you both have to step up as adults and decide to face it together. You spent years trying to get everything just right for your family.
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Welcome back to The Ramsey Show. I'm George Campbell joined by Rachel Cruz this hour.
Phone call is right there. Just pick it up, dial it, 888-825-5225.
And if you get through the screeners, you'll be lucky enough to talk to Rachel Cruz herself and get some financial wisdom. That's my goal at least.
I'm hoping to call in very soon. All right, let's get to our question of the day, Rachel.
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All right. Today's question comes from Sid in Nebraska.
What's your advice about retired senior citizens purchasing a house? Between Social Security and pensions, my husband and I have an annual income of about $125,000. 000 in cash and a little over 500 000 in our ira accounts we are going to buy a house for about 450 000 should we take money out of our iras to pay for the house or keep it invested and take monthly distributions to help pay off the mortgage in less than 10 years this is like a common core math riddle.
It's very exciting. Okay.
So the house is 450. They have some cash, 200K.
So that's great. That would be a serious down payment if they took that minus an emergency fund.
And they could take some from the IRA and pay cash, but that would deplete their nest egg. So they would have to live off of social security and pensions for the rest of their life, which we don't know how old they are, how many years they'll live.
I don't have a crystal ball. But it sounds like between the Social Security and the pension.
125Ks. That's not bad.
I could live off of that. Yeah.
So it depends. They live in Nebraska.
Don't know what the cost of living is there. But I do like the idea of they could take on a mortgage because they're paying rent right now.
Either yeah yeah totally so if they could at least have a fixed expense of a mortgage and then knock that out over time and if times get tough they have the money and they can leave the money invested let it continue to grow yeah and seven or ten years from now let's have a goal to have no payments in the world yeah I think that's it I think you do still have an aggressive goal of paying it off because as quickly as you can pay it off,

that's going to leave those investments

to continue to grow

versus feeling like...

In a perfect world,

I'd say let's buy the house with cash.

Right, right.

There's not a ton of that

to go around right now.

If they had a $3 million nest egg plus this...

Or, I mean,

not even looking at $450,000 house.

I mean, if you're retired,

get something smaller too.

Do you need a three bedroom at this stage of life? Right. You can downsize.
I think that's the move. But I like the way they're thinking.
And I don't think there's a wrong option here. But the goal is let's have no payments as soon as possible.
Yes. It's great.
Glad we agreed on something today, Rachel. We got there.
Always disagreeing, George. So much disagreement.
All right, Amy's up next in Savannah, Georgia.

What's going on, Amy?

Hey, guys.

How's it going?

Pretty good.

How are you?

Good, thank you.

Thanks for having me.

Absolutely.

I am looking for your top investment recommendations to an entrepreneur in her 20s.

Ooh.

Nice.

What do you do?

I have an online business. It's digital marketing based, but we work with influencers.
Oh, that's great. I have multiple other online business ideas as well as a brick and mortar and want to get into real estate investment.
So, just looking to set myself up well while we're young. Fantastic.
Are you married? Yes. Okay.
And what is the household income between what you take home from the business? 75. 75? Yes.
Okay. What part of that is yours from the business? That, so we both work full time for our business.
Okay. We take home together from the business.
Is it just you two working in the business or do you have other employees? We have four other contractors on our team. Cool.
And so what is your next goal? Do you guys have debt you're trying to clean up? Do you have savings you're working on or are you in that investment phase where you've already got those two? Yeah, we're on step four. So we've got the emergency fund.
We've got all the debt covered except for the mortgage. And so I really, you know, you hear all the advice, retirement accounts, life insurance, stock market, real estate.
And I just want some narrow direction on where we should be investing. Yeah.
Well, we have very simple instruction when it comes to investing, and that's mutual funds and real estate. That's pretty much all Dave Ramsey does.
That's the only thing I've done. Rachel may be fancier than me.
I don't know. No, not fancier.
No requirement, no retirement account needed. No, no, you do need retirement.
That's what's within the retirement accounts. And you have options as a self-employed person that I want everyone to know.
If you're self-employed, you're a freelancer, contractor, you don't just get to say, well, I don't have a 401k, so I guess I'll never invest. You have the option of a solo 401k, if it's just you and your spouse.
You have the option of a simple IRA or a SEP IRA. So those are some options you can look into.
And I'd be working with a financial advisor to figure out which one you can legally do for your situation.

Yes, I think the goal, Amy, for you guys is to invest 15% of your income into retirement.

And so that's going to look like, from a business side, what George is saying.

Yeah, there's SEPs, there's solo IRAs.

There's different options for entrepreneurs when it comes to investing for retirement.

Then there's also just your traditional, like just a Roth IRA.

And anyone can open up that.

You can put in, I think, $7,000 a year per person. So you can do that as well.
So those are two great avenues to be putting that 15%. And then anything above that, once you guys are at a point that the house is paid off and all of it, that's when you can get a little bit more expanded when it comes to investing.
So that's when you'd max out those retirement accounts because those are just great from a tax perspective. A lot of those grow tax-free, which is fantastic.
Or real estate's another great option down the road. And we always talk about paid for real estate.
So it's not starting big and fancy. You're actually starting pretty slow because it's at the speed of cash.
And it's only after you've got your primary house paid off. Yeah, this is after, yeah, this is a baby step seven.
Yeah. But for right now, Amy, that shooting for that 15% of your income going into retirement specifically is going to be the best bet for you.
Perfect. So what about like a separate mutual fund through Fidelity or something like that? Just like a taxable brokerage account? Yeah.
I wouldn't worry about that. I, you know, the wisest thing to do is to take advantage of these tax advantage accounts first, like the Roth IRA.
And then put extra money towards the house. Do you guys own a house? Yes.
Okay, so I would put extra money to pay that off first before I opened up just like a mutual fund account. And then again, once the house is paid off, that's one thing Winston and I did.
We opened up with just a separate mutual fund account that we just kind of had in there just to put extra money in, you know, if we had it. So yeah, so there's definitely those other options.
That's more of a baby step seven item. Once you get the house paid off, then you can increase your investing and then those taxable accounts become part of your wealth building plan to maximize it.
But if I was in your shoes, Amy, I would just open up two Roth IRAs. Both of you put 15% in there.
That's a little over 11 grand between the two accounts. And within the Roth IRA, once you have money in there, you have to actually purchase funds.
And that's where we talk about those gross stock mutual funds. Got it.
Okay. Can I ask you a real estate question? Sure.
Yeah. So we've purchased our first home in the forethought of turning it into a rental after the fact.
So what is your advice on how long to live in it? Can we move out of it before it's paid off to buy something else? What would your recommendation be there? I wouldn't. I mean, I would get to a point that you would be able to cash flow the next purchase.
Because, yeah, I mean, because if anything, it's if you went and got another mortgage and had a rental, then the rental payment, you know, is paying the, is going to eventually be paying the mortgage of your primary house. And so.
You're just adding another layer of risk and headache. And I'll tell you what I did.
I just sold the house and used all of the equity toward the next one until you have that house paid off, then you can focus on cash flowing that next purchase. So that's the simplest, most peaceful way to go about it.
But again, if you scroll TikTok, you're going to see a lot of people going, oh my gosh, no, keep it as a rental every time. Why would you let go of it? Yeah.
And I love the question though, Amy, because I think, again, we're all for real estate investing, but I do think there is this like romanticized idea of having rental property. And it's not that passive.
I mean, there is so much that goes into it. You have to deal with people, you're dealing with stuff breaking.
I mean, like you have this massive asset. And if you don't have a lot of cash flow to cover some of those things, it just ends up being a real headache.
And so again, the most peaceful thing to do is what I would do is, yeah, roll all your equity into the next house. And like Winston and I, which I know this is, these years aren't here anymore, but this was about a decade ago.
But we got a condo, George, for $44,000 in foreclosure. Simpler times.
It was far out of Nashville. Crappy, crappy condo.
We went and redid it and all of it. And we kept it for about a decade and then sold it.
So like, you can start really, really small. Start small.
Don't feel like you have to go big. And again, it's not as passive as you think.
It's a lot of work. It's a lot of work.
Good reminder. And if you want free guide, complete guide to investing, go to RamseySolutions.com slash guide.
Anyone listening out there, it's our free guide for investing. RamseySolutions.com slash guide.
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Welcome back to The Ramsey Show. I'm George Camel.
My co-host today is Rachel Cruz, and the number to call is 888-825-5225. Well, the holiday season's here.
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Let's get to the phones. Lindsay's up next in Louisville.
What's going on, Lindsay? Hey guys, how are you all? We're doing well. How can we help today?

So I have a quick question. My boyfriend and I have recently moved in together and we've been

together for about a year now. I'm very early on in the baby steps, so I have about $700

in my $1,000 fund. Good for you.
And yeah, it's a big deal. So I have about 30 grand in debt.
And this was all accumulated before we got together. He has his own debt.
I don't know all of it, but it's definitely not as much as I have. My question is, do I focus on my debt alone and he focused on his debt alone? Or should we combine these and tackle them together? I just don't know what's right.
So keeping them separate is what we would recommend because you guys aren't legally married. So combining finances to someone that you're not married to can get really messy really, really fast.
So, yeah, I would definitely keep it separate. So I would work two completely separate baby steps.
So you have your 700 with your debt, he has his. And then if you guys ever did get married, then you would combine it after you say I do rings are on good to go, combine it all and you can work out of one account.
But yeah, what we have found Lindsay is just that, you know, if or when, you know, breakup happens, and and so much of either his assets your assets end up getting entangled with each other and you're using your income to pay off his debt he's using his income to pay off your debt and it really from a individual standpoint you've made no progress um or or less progress than you would have made if you just worked on your own, if something were to happen and you guys separated.

So, yeah, that's what we would say.

Can I ask a harder question, Lindsay?

Yeah, absolutely.

When are you guys getting married?

Well, we have talked about it.

It also is kind of weird because I just got out of a 15-year relationship,

well, not recently, but a while ago, and all of our debts were combined like his debts were my debts you know and then because we guys married separate we were yeah yep yep totally yeah it's just a little different i was like man what if something happens we're only paying off his debt and i look you know i'm coming out behind that's right there's a thousand things that could go wrong with this situation and that's why we recommend. You'll have legal protection.
You'll have the marital unity of going, all right, it is we now. It's our one account, our one pile of debt.
And that is the best way. When you get to that point, you will find that it does accelerate, but now is not the time to do that.
So if and when you guys get married, combine, and we hope both of you are on your journeys and keep each other accountable. Is he on board with this plan? Yeah, yeah.
We've been kind of flirting with the idea separately, obviously, for about three years. I think you make it a competition.
You know what I mean? No, that's great. That's actually a great idea because everything's a competition.
How about this? You pay yours off first. He's got to pop the question if he's serious about this.
My gosh, it determines on the... He pays his off first.
He has to pop the question. Don't listen to that, Lindsay.
I'm kidding. But yeah, don't let debt hold you guys back from getting married either.
That's another thing that comes up is they go, well, we want to wait till we're debt free to get married. Get married when you feel like it's the right time to get married and the debt will take care of itself if you guys are on the same page.
Awesome. Awesome.
Awesome advice. I do have one more quick question.
I already know the answer to this, but I just want to see what you guys think. Okay.
Tell us the answer after you're done because I'm curious. I have about, okay, I have about 20 grand in student loan debt.
I plan on going back in January. Obviously, I don't want to take out more debt to do that.
So I'm guessing the right answer here is pay out of pocket. Yes.
Why are you going back? What are you getting back? What kind of degree? It's a social work degree. So I'm going to be a therapist.
I have two years in. I need pretty much two more to even be taken seriously, four more to actually get anything done.
So yeah, that's kind of my thought process. What's it going to cost? Ooh, that's a good question.
I'm going to university, so I'm sure it's going to be up there. I went in Denver for one semester and it cost me 10 grand to walk in the door.
Well, I would caution you to make this as affordable as possible

because I don't know if you know, but like social workers,

they're not out there flexing with their crazy high income.

So I don't want you to go spend 50 grand to go make 35.

Okay.

And so if you're going to even cash flow it, find the, is it the only way?

Is it the best way?

As our friend Ken Coleman would say.

And if that means an online program, a community college,

they really don't care where you went. They just want to see that you did the work, you got the experience.
Okay. Okay.
That's great advice, too. Thank you guys so much.
Absolutely. Thanks, Lindsay.
We helped at least one person today, Rachel. We're off to a great start.
All right, let's move on to Stefan in St. Paul, Minnesota.
What's going on? Hey, Rachel. How's it going? Great.
How are you? Doing great. Hey, so a little bit about me.
I am 20 years old, and I still live with my parents. Out of high school, I went into trades, and I currently work for a solar company where I do day-to-day operations.
I'm their lead designer as well. So I guess my question for you guys is, you know, I'm at that stage where I would like to move out and I have a good chunk of money saved, but I'm wondering if I should wait another year or two and put a big, large payment on a house, or I should move out now and slowly save up and wait till the time is right to buy a house.
I mean we're I'm usually more on the side of moving out and now if you had a very very specific goal with a very specific time frame saying you know maybe you had $15,000 in debt and you're like I mean if I you know I'm working three jobs i'm going to pay this off here but i'm saving money on rent but in six months i'm moving out after the debt's paid off like if there was like something that was more specific for you um then maybe considering it but but the fact that it's just to save up for a down payment on a home um i don't know there's something to be said about just living on your own and figuring out life. There is something within your character that changes when you have to be the one responsible completely.
And now that you're an adult and you're working full time, you're making great money. I think it's better for you to be out on your own.
Now, you're 20 years old, so you're still pretty young. You're not 28 or 30, 32.
I moved out at 20, Stefan, if it gives you any, and I moved across the country, finished school, all that. But in your shoes, I would think it's wise to rent.
It's kind of like you don't want to go for your first car when you're 16 and get a Lamborghini. It's just too much car.
The maintenance is too expensive. You're not prepared for it at that age.
So similar to becoming a homeowner at 20,

I would say it's a lot going on right now

when your frontal lobe is still developing

and you're trying to figure out life.

But it's a great way to stair-step it and go,

all right, I know how to pay bills on my own,

still having to take care of my own life.

There's a sense of independence.

There's a maturity that happens.

And that's why I think it's wise to rent for a year or two

or however long it takes.

But to move out though.

Yeah.

Before you.

So I would say, absolutely, move out. You're out of debt with an emergency fund? I currently have about, I currently owe about $7,000 on my car, but I worked a side hustle over the summer, and I'm ready to pay that off at the end of the year.
Awesome. That would be my goal.
Let me get the debt paid off. Let me get a little savings going to prepare for the deposit that's going to be required for rent, some furniture for my own place.
And then I would say, Mom, Dad, it's been awesome. Thank you so much.
Yeah, and I would have a money goal between now and February if you decide to move. Whenever you're deciding to move, have a goal of an amount you want and a time frame.
And I think it would be very mature of you to sit down with your parents and say, hey, here's my plan. You know, I'm going to be here for four or five more months.
My plan is to save up this. I'm going to pay off my car and just give them the dignity as parents to be like, yeah, I'm an adult and I'm moving off and well done, mom and dad.
Thanks for all the help. And I'm a man now and I'm making my own money and living in my own spot.
I'd be teary-eyed if I was that parent going, I did a good job raising my son, Stefan. Stefan.
We're cheering you on, man. This is awesome.
Great job. What a fun rite of passage to move out of the house and get your own place.
Even if that's renting, it's the wise thing to do. This is The Ramsey Show.
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This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz this hour and a very special, yes, some would call it a cameo.
Ken Coleman joins us. I like what you did there.
For this segment. A cameo.
This is what we call a callback. So you guys took a call on the Ramsey show and it became legendary.
Dave reacted to this call and we got an email from them back and we wanted to give you guys an update. So tee it up, Rachel.
Yeah, so we got a call when Ken and I were on the show probably a few months ago and it was a mom who got her daughter tickets to the Taylor Swift concert and she was like, well, if she sold those tickets now, she could pay off all of her student loan debt. What should we do? And I'm like, you go to the concert.
I mean, I feel like you live once. This is insane.
Go to the concert. You can't get tickets for it.
If you got tickets, you go. You figure out the debt later.
you didn't go into debt for the concert but the tickets are bought just go and enjoy and then ken over here became a swifty and said the same thing and you were shocked well here's the deal i asked one quick question of the lady she said uh if we sell them we'll make somewhere in the 10 grand range and we'll put it towards it i said are you are you planning to spend that amount of money out of your own pocket to help your daughter with her student loan? And she said, no. And then I said to Rachel shock, I think I go make a memory with your two daughters.
Life is short. Yeah.
And she acted like I was the Grinch who got a heart. I couldn't believe it.
So then the comments on YouTube were like, well, and the comments were like, Dave would never give this advice. They're giving the wrong advice that David would.
So then when Dave was on the show a week later, we played the clips. I was like, Dave, you tell America, were we wrong? And he agreed with us only because it was a gift from the mom to the daughter.
And he said, you can't undo a gift. You can't like make her now sell it.
Now he said, if your daughter called me, then maybe I would make her sell. But I think we do have a...
Do we have a clip we can play, James? Okay. My daughter is 22, and she just graduated from college with some student loan debt.
And about a year ago, she was able to get on the presale and buy three tickets for her, my older daughter, and myself to go to a Taylor Swift concert in Indianapolis. We got them for like $209 a piece.
So now I'm seeing these resale prices. Oh, it's crazy.
Oh, it's crazy. It's insane.
Yeah. And so I told her like, why don't we sell those tickets and you can knock down so much of your student loan that you'd be so far ahead? She says, absolutely.
It's non-negotiable. It's a bucket list item.
She's like probably you, Rachel, a Swifty. And this is, you know.
And it's her money, right? No, it was my money. Oh, okay.
It was my money. I paid for them.
But, you know, I mean, this is, and for me, too, I'm looking at, like, you know, she's iconic. I would love to go to her concert.
My daughter, of all the people that she could take, she wants to take her sister and me.

You know, I mean, that's great.

It's going to be a fun thing.

Oh, my gosh.

What would your take be?

What Rachel is now walking us through.

What do you think you could make on these tickets?

I'm thinking they would average out between three, four grand.

A ticket.

Yeah, per ticket.

I agree.

So her student loan debt is $24,000?

Correct. And that's what you would want to put the money towards? Absolutely.
100% of it would go to there. Would you be putting $9,000 plus towards her student loan if you hadn't bought these tickets? I would not.
I wouldn't resell these tickets. Here's the deal, Jill.
You weren't planning to cut a check for $9,500 to put on your daughter's student loan. Ever.
I was not. So my whole point is...
This is like a windfall, right? If $9,500 fell into my lap, I might do that. I get it.
But this is your daughter's and it's a once in a lifetime concert.

Oh yeah, I agree.

You go, Jill, go to the concert.

You weren't gonna do this anyway

and I think your daughter said absolutely no way

and I think it creates an unnecessary tension.

She's 22, she needs to pay the thing off herself anyway.

There's a lot of reasons.

I want our audience to know, I'm not just,

I just think when I look at something like this this this is about the emotional not the fight there we go man you i mean that's some common sense wisdom right there and here's the update jill emailed back in we got this yesterday this is a sweet note can i read this email yeah because i can't i'll cry okay that's true i was pretty amazed that my call and question garnered so much, and the follow-up with Dave and Rachel was great. Love that.
I wanted to send an update because we went to the indie concert this past Sunday, and it was just as amazing an experience as Rachel indicated it would be. Taylor Swift really puts on an impressive performance, and the crowd and energy was fabulous.
I had a wonderful weekend with my daughters. Like Ken advised, I made great memories with my daughters.
I'm attaching a couple photos. You're seeing them on the screen if you're watching on the app on YouTube.
Look at this one. Read what that says.
And look at this bracelet, the friendship bracelet that is now TaylorMadeFamous. What's it say? Ken says, make memories.
And I got choked up when I read this the other day. I did.
Did you ever think that you'd make it to a Taylor Swift friendship bracelet? No, and it wasn't about that.

That's actually like a really cool bucket list thing

though. Yeah, but it wasn't that I was included

in that. It was that I had a

little teeny tiny, really fun and entertaining

small infinitesimal

play in that mom

making memories and I just think

that you don't know if you have tomorrow

and I think I got choked

because I got one little girl

and if Josie said, Dad, take me to Taylor Swift

I'm going to go deliver

I'm going to go deliver garbage. I might steal something.
Who's ordering garbage? I'm just making the point you do, and you would do it for a little me. 100%.
Come on. I got a little choky.
It's a little dusty in here right now. What is the TLDR spark notes here is she didn't go into debt to do it she did not it was a gift yeah she wanted to be generous and make a memory yes and because that the tickets

the value of the tickets i think there's a lady in the front row that's a little cry she's crying

is are you crying i think she's laughing at you ken oh you're not crying maybe she's kind of

laughing at me no one knows she was crying i think she was see she wow see that's special it was a

sweet thing i know and i think we turned ken into a swifty by accident i know i don't even know what that means but sure oh you are my daughter is deep in your heart i think you're there because it's always the tension on this show when we talk about money that we say you live like no one else so later you can live and give like no one else and so this mom was debt free the mom was responsible financially she had the cash to pay for these tickets like she did nothing wrong i mean nothing that we would say like oh my gosh you shouldn't do that but her daughter on the other hand right is the one with the student loans and all of it but it was a gift to her daughter and again it's this tension between we want to be wise financially you want to get to a place that you financially are at peace you have a solid foundation under you don't don't have debt. You have an emergency fund.
Like we take care of it. We are adults.
We're going to be wise with our money. But then on the other hand, hear me say this.
And all of you that have listened for a long time and are on baby steps, four, five, six, and seven, enjoy your life. Enjoy your life.
And everyone's like, oh, Dave, you know, saves all the time. Dave Ramsey doesn't.
He, he saves, but Dave spends. He ain't eating rice and beans no more.
Dave parties like, I mean, he is a spender and that's what we want for you too. We want you to be at a place where you have the money and you can enjoy it.
Downshift from the gazelle intensity to intentionality, budget for it. Yeah, the Ramsey message is not, oh my gosh, we're going to have to find coupons for every single purchase for the rest of our lives because we have to just save a ton and we're going to just die with all this money and we never enjoyed life.
No, it's the opposite. George, we're talking to you, by the way.
I know. I felt that.
It's the opposite. That was a personal attack.
Enjoy it. Enjoy life.
Enjoy life. Enjoy also using a coupon.
No, you enjoy counting your money. Oh my God.
You're the nice Ebenezer Scrooge. You're not a mean person, but you like counting your coins.
He likes to split appetizers at restaurants with people. Guys, this is true.
This is not about me. I'm like, there's a point, people.
This is true. There's a point that we need to just relax and enjoy.
That's you, George. Relax and get the appetizer and buy the Taylor Swift ticket.
You know what your advice would have been? If you buy any memorabilia or merch, sell it afterwards. I probably would have said that.
George would have sold the tickets. I would have said sell the tickets, invest in a good gross stock mutual fund from 22 to 62.
Is that really what you would have said in that situation? No. No, I probably would have been on Team Ken and Rachel and said begrudgingly YOLO.
Because, you know, it's the recipient. Even then you got to throw a begrudgingly on it.
Well, it's the recipient's deal. She gets to do what she wants with that gift.
If she wanted to sell it and pay off debt or do anything else, that's up to her. Absolutely.
By the way, I do want to point out that at the very end of that segment, you can go back and watch it on YouTube. And it was also on, I think, Rachel's Instagram.
And she collabed with me on that one. But I finished with a lyric from 22.
That's impressive. And the mom said she followed up.
What was it? It was something. I forget.
But it was a really. Down bad at the gym.
Yeah. I thought I was going to be a cool host and drop in a lyric.
And then mom came right back. And Rachel was so happy.
I don't know that I've ever gone to a commercial break where she was so emotionally just fulfilled. Yeah.
So much fulfillment in her face. You've got to watch the clip.
For those of you that were listening, we played that. You've got to watch her.
She's so excited and scared. I want to see you guys communicate only in Taylor Swift lyrics.
And just know, one of the joys of happiness, and they found this scientifically proven, Arthur Brooks talks about this, you actually can find joy when you spend money on experiences with people that you love. It brings actual joy to your life.
So George, let's book a guy's trip. I'm in.
He just talked about how you didn't have a lot of friends to travel. You, me, Deloney, Taylor Swift.
No. Oh, see, it was great until you said that.
Didn't know where you were going with that. We'll go canoeing with James.
Next time you guys host a show together, you better be wearing friendship bracelets too. Yeah.
Let me guess. We're going to go hunting and kill stuff.
No, thank you. I'll take Taylor Swift.
This has been The Ramsey Show.

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

I'm Ramsey personality George Campbell, joined by best-selling author and co-host of Smart Money Happy Hour, Rachel Cruz.

And we're taking your calls at 888-825-5225.

You jump in.

We'll help you take the right next step for your life and your money.

Alexis will kick us off in Phoenix.

How can we help, Alexis?

Hi.

So I am a single mom.

Well, I'm not a single mom.

I'm a co-parent, and I currently make $50,000 before taxes. So I bring home about $38,000 to $40,000 after taxes.
And my problem is I have $3,500 in bills monthly, but my paychecks, I bring home $3,000 a month. So I'm always $500 below what I need to pay my bill.
So I didn't know if it was smart to stop paying my personal loan or to stop contributing to my 401k. Like I don't want to hurt my credit, but at the same time, I'm like, maybe it's more important to, you know, tackle the bills that are non-negotiable.
Yeah. How much of the 3000 is,000 is debt? And how much of it is just bills for lifestyle? All of it is bills.
The $3,500 that I owe monthly, all of it's bills. My rent is, I pay $1,800 for everything in my house.
My car note is like $534. Car insurance is $200.
Health insurance is $150. it all adds up to.
Sure, sure, sure. Okay, so tell me the debt specifically.
So your car loan is how much total? 30,000. 30,000.
And you pay how much a month? 534. 34, okay.
And then what other debt? You said a personal loan. Yeah, I have a couple of personal loans.

I consolidated it. So I have one $2,500 one and I have a couple of credit cards.
So altogether,

that's another $10,000. So I'm $40,000 in debt.
And then just like my, the bills that I have.

Okay. $40,000 in debt.
Yes. Okay.
So how much is the payment for the personal loan, the $2,500?

$300. $300.
Okay. And how much are you paying in credit cards every month? I actually stopped paying, well, one of them is $50.
I paid $50 for the small credit card, the $500 credit card. The other two ended up going to collections.
Okay. So I haven't been making any payments on that.
And I, I've been thinking about just letting the other one go to collections. Um,

you know,

there's only credit.

Yep.

For sure.

Um,

okay.

So yes,

I would stop contributing to your 401k for sure.

I would stop any,

uh,

retirement savings.

I would press pause on that.

So I would call your HR department on Monday and make sure that no more money is taken out. What percentage is that or what's the monthly amount that's taken out? $80 and then they go up to 6%.
So they're matching me to, I'd contribute to 4% they contribute to. Okay.
All right. So if we pause that, you'll get 80 bucks back in your life.
Here's what we're doing the math for. We're trying to find you margin and there's two ways to get it.
Spend less and make more. I think we need to do both.
And this car, Alexis, it is way beyond what we would recommend. We always say that you want anything with motors and wheels to be half or less of your annual income.
And yeah, you're making, you know, 50,000, you have a $30,000 car, you have too much car. So I would be getting rid of that.
Do you know how much it would be if you sold it? Kelly Blue Book it? No, I just got it this year. I got it in February.
2024. I don't know, but I know I will be upside down.
And I ended up having to get the car because the one that I had, I had to put it in a't the best car. Alexis, I want to show you something about your language that has gotten you to this point.
You said I had to. Okay.
Nobody has to get a $30,000 car. Right.
Now, I understand that you didn't have the money to pay for a car in cash, but it's these kinds of decisions where we take that off the table. We start to go, okay, what car can I afford? Well, I could afford a $7,000 car if I save up 500 bucks a month for the next 12 months.
That kind of decision and process will help you get to the point where you no longer ever touch debt again. Because if you think about it, this car payment is exactly the amount of money you need to stay current on all of your bills every single month and break even.
So yeah, and I would, and Alexis, I would do a private sale. You get the most money for it.
Yeah, I wouldn't like trade it in a dealership or anything. And so if you're, if you're underwater on it, then you will take another small personal loan and you can add a couple of thousand dollars to that loan as well, just to get a car to get you by.
But again, I'm talking about like a really crappy, not great car, like something really, really, really, really cheap, like five, six, seven thousand dollars. Because I would rather you have a $10,000 loan than a $30,000 loan right now.
So if you're underwater by five, let's say it's only worth 25 and you owe 30, then and then you're going to buy one for five. Well, that's a 10 grand delta we need find and so that's where rachel's saying go down your credit union get one personal loan so that we lessen the debt and get you out of that payment yes and then um what's the situation with your um with your kids you said you're co-parenting um what what is it what are like what do your weeks look like are you do you have the kids every day are you um split custody or how is that how's? Yeah, I have her four to five days a week.
But we're very flexible. We don't have a set schedule.
But he's very involved. He has the baby when I ever need him to have her.
Okay, okay. So yeah, because if I were you in this position, I see a way out.
You're going to be able to get out of this debt, even though I know it feels overwhelming. But if you think about it, if you go down in car, and we'll pretend your new loan is $10,000, yeah, you have some credit card debt, but then that's going to be $12,000.
How much is credit card debt? Do you have? Did you say total? $10,000. Okay.

So you're cutting your debt in half just by getting rid of this card, and that's going to get you out of debt twice as fast.

Yeah, I definitely thought, I'm definitely open to it because I definitely thought about it.

I just didn't know how I was going to, you know, eat up what I was over in.

Either you have it in savings or you need to get the difference in that personal loan.

Do you have anything in savings right now? Not as of this month, no. I'll end up using it all.
Okay. So your next goal, your A1, is number one, keep food on the table.
So your four walls need to stay covered before any other bills are paid. So your food, utilities, housing, transportation.
And if that means the bill can't get paid for the credit card companies, whatever. We'll deal with that later.
Then beyond that, you need to get a thousand bucks saved really fast to cover those little ankle biter emergencies. And then Alexis too.
Sorry, I know we're throwing a lot at you, but your rent, you're bringing home 3000 a month and your rent is 1800. So that's more than half of your, of your, of your take home pay.
So I, I don't think that's sustainable. That's going to be a really, really hard hole to climb out of in a sense versus if it was you know a thousand bucks right and i know that rent and more like the housing situation is less in your control it's so difficult so so difficult but again for a season for two years right like it's not going to be forever but for two years finding something that is way cheaper uh cheaper is something that I would look into too, because it's either getting your income up or it's going to be lowering your expenses.
And that's a glaring expense that I see that's not, from a ratio standpoint, is going to be really difficult for you to get ahead with keeping that more than 50% of your income going to rent. And so for now, right, Alexis, that might mean that you get a side hustle that brings in 125 bucks a month.
And that, I mean, 125 bucks a week, that's 500 bucks a month to keep you afloat, to cover all the bills. Yeah.
That might be what's necessary in the season on top of working, getting your core income up. And I would say still on top of moving.
Would you, George? I mean, I wouldn't- If you can find a place that's cheaper. Yeah.
Might be a little further out, Not as nice. Because I would hate to have a side hustle just to keep your living expenses afloat.
Because the goal is that your income keeps everything afloat that you need, your four walls, and anything extra is going at the debt. And so again, I think it's going to be difficult to do that with that $1,800 rent payment.
So I would look really hard, Alexis, for somewhere cheaper. I hope that helps.
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This is The Ramsey Show. Open phones

at 888-825-5225. We're heading to Tampa next to talk to Corey.
How can we help, Corey? Hi there. Thank you for taking my call.
Sure. What's going on? I'm contemplating selling my small business to accept a job that would increase my total income to try and get out of this debt that we're in as quick as possible and i'm just trying to make sure that i'm doing the right thing okay how much debt are you in uh right around a hundred thousand before uh my mortgage okay and what kind of debt is the hundred thousand um let's see we got 35 is allocated towards the a, it's a food truck.
Um, so that was a startup loan from friends and family members, um, about 30,000 in student loans, uh, 10,000 to fix the AC. Um, and then about 22,000 and, uh, or no, 25,000 in vehicles.
Okay. And what is this business worth if you were to sell it? I would estimate around $42,000 to just sell the trailer.
And then I also have a truck that I bought to use with the business that I could potentially let go as well. What's that worth? It's worth right around $13,000 and I owe $18,500 on it.
Okay. So you're about $5,000 underwater on that.
Okay. So you would get $55,000 essentially for selling this business? Correct.
And you need another $5,000 to get out of the underwater loan and you're about $100, K in debt. So this gets you out of debt twice as fast.
And what's the household income now? Right now, my wife just got a promotion. She makes 67 before bonuses with potential 12,000 in bonuses.
I make about 550 at a part-time job a week. And then the trailer, we really don't take a paycheck from it.
I just, whatever profits at the end of the month, I throw at debts, which is averaging between, you know, $2,000 and $3,500 a month. Okay.
So altogether, you guys make about $100K a year? Roughly. It's not including the trailer in any way, shape, or form, seeing as how I don't take a paycheck from it.
It's closer to like $85K to $90K. And what's the new job, Corey, that you're looking at? I would be taking a chef position at the part-time job now, which would get me up to 73 guaranteed with a potential 12,000 bonus as well.
Amazing. For the food truck itself, is it something you would go back to doing? If you were completely debt-free, would you still keep doing this or are you getting burned out? Well I kind of burned out on it.
I've been doing it for about two and a half, three years working seven days a week 70, 80, 90 hour weeks and just it was never supposed to be the end all be all it was supposed to be a stepping stone towards a brick and mortar location and it's just looking the reality of it. It puts it, you know, five, six, seven years down the road.
And I just don't think that I could put my family through that hardship. Yeah, totally.
That's mature of you. Yeah.
And I think, I mean, I think you're listening to your gut and I think you're, you're seeing kind of the tea leaves of what's happening, which I think is smart Corey really really smart especially when you talk about the food industry we've gotten calls of people um that go straight to want to go straight to the brick and mortar and take out a massive loan and the food industry is one of the highest ones that you know the highest parts of of small businesses that goes up and it goes down and it it closes more than any other industry yeah uh it's a, and as you experience with the food truck, it is just a, it's a tough, it's a tough world to be in. It's a lot of work, a lot of work.
And again, not always with the guarantee that it's going to be successful. So being a chef somewhere, I think sounds like the perfect next stepping stone.
You're going to get a 50 grand raise while getting rid of half of your debt. And you're still doing the thing you love.
You're still able to be in that world of cooking and food and hopefully innovating. Yeah.
I mean, to me, this is kind of a no-brainer, honestly, because I don't know, you kind of get to still live your dream but not have to deal with owning anything right now. Right.
So yes, I would. I would do it.
I'd try to get top dollar for your trailer and the truck. And do you have anything in savings? We have right around 2000 in our emergency savings.
And then I have about 2000 cash that just kind of floats around for expenditures. Okay.
You may want to wait another paycheck or two, get that 5000 difference that you're underwater on so that you have the money to actually get rid of the note on that truck.

Okay. And that way you're not having to take out another loan to clean this up.

And then I'd take that new job, man. And I would clean this mess up.
You're probably getting,

I mean, you'll be making what, 150K households at that point? Roundabouts. Yeah.
You know,

it's not guaranteed. Um, you know, so it's So there is a little bit of a fluctuation on it.
Sure. But making about 150 with 50K left to pay off, that's going to get knocked out real quick versus your situation now, which is we make 80-90 with 100 to pay off.
The math ain't mathin' on that one. So we do need some drastic changes.
You're willing to do it. You're burnt out on this.
And guess what? Later on down the road, you may decide to do this dream again, but you're going to do it with cash, with more experience, while making more money. And so I don't want you to, I know it's hard to grieve something that you put your heart and soul into, and I can tell you're passionate about it, but there's also wisdom in going, now's not the time.
Yeah. And, you know, we've just found Dave Ramsey and your whole system a few months ago, and we have made considerable progress towards our debt.
We always live in all of our debts from three years previous. We haven't gone into any debt in the last three years.
We were just paying minimums, and then we read, you know, Total Money Makeover, and we've started trying to get out of this debt we're still struggling with the budget somewhat you know i feel like there's still more room for cutting some expenses but it's just you know been a little bit of a struggle yeah and just to give you some some hope and i mean you guys have just been doing this a couple of months and even with the budget, we say it usually takes about three to four months to really get in the cycle of doing it. And it actually be correct that you can live on.
So you guys are just starting out. And the fact that you're so gung-ho about it, I mean, you're going to make great progress.
And the budget is easier to do when you have less debt, more income. The numbers will start to give you some hope instead of go, oh, my gosh, how are we going to fix this puzzle? And so we're wishing you the best, Corey.
Appreciate the call. Yeah.
And you know what? Hold on the line, Corey. Christian will pick up and we'll give you every dollar premium for a year on us.
And this is our budgeting app that hopefully will help get this a little bit more organized. It's a very, it's a great app because it's very fine tuned.
Like you get to see all the caters. Yes.
All right. Let's go to Kathy in Boston.

How can we help Kathy?

Hi.

Hey.

What's your question?

Okay.

I'm 67 years old and I'd like to retire in three years.

And I do have money in stocks and bonds and mutuals.

And I'm not sure if I should keep it there or if I should maybe switch to annuities or IRA CDs. I didn't know the best way to go.
Well, I mean, switching to annuities and IRA CDs, you're talking about really lowering your ability to make any money. And so you're just sort of preserving what is.
And if you're 67, there's a good chance you live to 87 if you're in good health, right? Yes. And so I want to see your money grow beyond the rate of inflation.
So what is your money in and how much? I have approximately $215,000, and that would be like Stocks, Bonds, Mutual, because I have it in three different places that kind of manage it. Okay.
What else? I, no. I do have Social Security.
Okay. And then I work, and I work.
Okay. So what's your plan to actually retire? How will you cover your expenses in retirement? Just with my investments and the money I have, and, of course, my Social Security.
What are your monthly expenses? Oh, let's see. Maybe $1,600 a month.
I mean, $2,000 would be way overkill. Okay.
And what's your Social Security payment going to be? $2,100 after tax. Oh, nice.
So that's enough to cover the baseline bills for now without more inflation. And I would leave your money invested in the market.

I wouldn't go to, you know, search for a 4% return when what we've seen in the market,

I just checked my 401k last year, Kathy, 37% return when I just left it in and didn't touch

it and left it in the overall market and gross stock mutual funds versus those less risky

but lower return things like those CDs and annuities. So I would stay on your plan.
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Pre-order today. Welcome back to the Ramsey Show.
I'm George Campbell joined by my Smart Money Happy Hour co-host, Rachel Cruz. If you like this show, you'll definitely like Smart Money Happy Hour.
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Stacey's up next in Atlanta, Georgia. How can we help you today, Stacey? Hey.
Hey. um well my problem is um my husband was out of work for two years

um you today, Stacy? Hey. Hey.
Well, my problem is my husband was out of work for two years. He invested in something that just didn't work out.
And so he had to go back and get a job. And we put all of our life savings, everything, retirement, everything into it.
So we have nothing. Oh gosh, Stacy? Yeah.
What happened? How much are we talking and what was this investment so um he actually um invented a product and it's still underway and epa just kept putting it back and putting it back and putting it back so um it's kind of stuck uh with california's epa and he just thought it would be like oh this will be a five-year plan me, I'm more of a realist. I'm like, this is going to take at least 10 or 11 years.
Well, I was right. And it's not fun being right.
And so he had to get a job. He's 61.
Nobody wanted to hire him. And he's a smart guy.
Somebody finally did hire him. He's making $135,000 a year.
Good. How much money did you guys take? How much money went into all of this?

We put a million into it.

Was this cash or did you take on debt?

No, we took everything out.

So you still owe a million dollars in debt?

No, no, no. We don't.
thank God. We only owe $80,000 in debt.
We have a house. Did he borrow on the house at all? No.
Okay. No.
Oh, Stacey. How long ago was this? Well, we've been in it for about 10 years, 11 years, yeah.
So over the course of that amount of time, it added up to a million. You were just dumping money into it.
There's nothing we can get out of this. Well, he put a million in, and then they would pay.
He was trying to pay and had investors and everything, but people dropped out, And it's just, it's been a shit show.

So what's your income? Are you working?

So I have always been a stay-at-home mom.

I raised my kids.

I had a special needs child who they said no one ever would graduate,

but we actually got him to where he has a skill.

He's a welder now, so that's huge.

Good for him, yeah.

But all my efforts were put there, so at one time I was capable. So your household income is now 135K.
You owe 80K in consumer debt, correct? Yes. Okay.
What's your question? In the house. We own the house.
Is it outright or do you guys owe anything on a mortgage? We own it. We owe $375,000 on it.
You owe that. Okay.
Yes. And And so, of so of course we've thought about moving we've tried to figure out where to move and god the house market is terrible um where we're at and so we're trying to figure out that i am working part-time i'm actually in my spare time an artist so i sell pieces for like 3,500 a piece for my art but there are a few, but it's one every two or three months.
That doesn't cut it. Sure.
And I have applied to over 314 places, 12 interviews, and repeat interviews only to not be hired because nobody wants a 55-year-old with no health education. So I just need to know, do I get a consolidated loan and put it all aside because the interest rates are killing us, and I'm optimistic.
A consolidated loan isn't going to solve any of your problems. You're just moving the debt around, and they're going to take an average of the rates.
So it's not really going to work any miracles here. Your best bet is to use this $135K of income you have, live on as little as you can, and throw the rest at this $80K until it's knocked out.

Just keep throwing it at it, and you think it'll make a dent.

Yeah, well, here's the good news.

If you use the debt snowball method, smallest to largest balance,

ignore the interest rates.

I know that's hard right now because you see how much you're paying,

but as you knock out the little debt, you free up a payment.

Now take all the margin you were throwing at that,

throw it at the next smallest debt, you free up a payment. And you see that as you, you know, go downhill, the debt snowball is going to pick up more snow.
Stacey, how often can you paint? Because when you said I can sell a painting for $3,500, I mean, that's... If you can sell one a month, that's serious.
Yeah, I mean, I'm not kidding. That makes sense.
Well, I know. And I'm trying desperately to get there.
I have literally, you know, I've tried to build my own website on my own, did it. You know, I've been doing this.
I'm not good with social media. Well, get connected with your local art communities, art galleries.
Yeah. Do you have paintings sitting? Do you have paintings sitting waiting to be sold? Oh, yeah.
Okay, okay, okay. So it's not a matter of like, okay, gotcha, gotcha.
Maybe you could you could sell prints i mean there's a lot of options in the art world where you can make some good money and it sounds like you're talented yeah i it's just in the jobs you're applying i'm not an entrepreneur yeah yeah no you're good stacy i think yeah yeah um what kind of jobs have you been applying for i'm just curious has it just been oh my gosh name it, I've applied for it. So even like administration type roles? Everything.
Everything. Literally, I mean everything.
You know what you could, have you looked at online type jobs? Like I just wonder even for like as a virtual assistant, like usually moms that have raised kids can get crap done. Like they know how to schedule, they know how to run a household.
So I even wonder from like a virtual assistant like usually moms that have raised kids can get crap done like they know how to schedule they know how to run a household so I even wonder from like a virtual side you could do a virtual thing and paint and try to kind of get that going I haven't done that I have not done that virtual assistant I would look into something like that because a lot of people you couldn't even piece together a couple of jobs because some people just need someone for 10 hours a week. You know, and you could get, you know, two or three people that you're helping.
And then on the side, how old are your kids? They're grown. Now, the youngest is still, he's 21 and still living at home.
Do you have 20-something-year-olds? Yes. Do you have a daughter? okay daughter and well have have ask we have no family well I was gonna say well I'm thinking from a social media perspective ask one of your sons any of like their girlfriends that they know or people like friends and jump on the phone and learn some of this I'm not kidding like this is and you don't have to grow this like crazy account but but getting your, your paintings out there.
Cause Stacy, I really think that $3,500, that's a, I've got 450 followers right now. I'm trying to work toward get 500.
Cause then I can start getting payments for like affiliate, you know, advertising. These are the ideas when you start coming up with not what's the next piece of debt we can jump to.
Cause you're going to get out of this, but the only way out is to get out, not to switch it to a different type of loan with slightly lower interest. You guys are your best bet to get out with this amazing income, and that's just going to mean getting to work and living on less.
So do a budget with your husband tonight and go, what can we live on? How little can we live on out of this $135 so that we can get out of debt fast? And considering you guys have no retirement, Stacey, you probably will be, you guys probably will be working for the next probably 10 years or so. So we're going to give you Ken Coleman's material, his assessment.
Yes. Find the work you're wired to do.
It comes with his Get Clear Career Assessment. So take that.
And it's awesome because it will, as you fill it out, maybe spark ideas for you from a from a work standpoint um that could just kind of get your wheels turning on other opportunities to get some income in because i think that's going to be um your best bet and um and i'm and i'm so i'm so sorry that this happened i mean i i know you guys are adults and you guys made the decision and you're reaping the consequences of it. But it's really hard.
Oh, yes. It's good.
I'll throw that in there. I'll throw that in there, too.
I have been a little bitter about all this. I would, too, Stacey.
I would, too. But you guys, yeah, as a couple, you know, I mean, that's a hard pill to swallow.
It's a hard pill to swallow that you guys. But you know how to save you guys had a million dollars at one point so obviously i know we'll make it yeah you will you will well hang on the line we'll get you ken coleman's material in my contentment journal and we'll get that out to you stacy but it is it's it's it's a little bit of the grind um and it's swallowing that that that pill of bitterness of like man yeah what did we do hey, that was in the past.
And now you get to choose a different future. I'm choosing hope and choosing confidence.
Don't say, who's going to want to hire a 55? I would want to hire Stacey. She sounds very hardworking and talented.
And so you get back out there and you show them what you're made of, Stacey, and call us back when you guys are debt free. We can't wait to celebrate with you.
This is The Ramsey Show. I talk to people every day who want to know how to do better in two areas, money and relationships.
That's why I'm pumped to bring the Money and Relationships Tour to a city near you. Join me and Dr.
John Deloney for a night that will challenge the way you think about this stuff and possibly change how you live forever. Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth, and Kansas City.
Grab your tickets at RamseySolutions.com slash tour before they're gone. Welcome back to The Ramsey Show.
I'm George Campbell, joined by Rachel Cruz. Open phones at 888-825-5225.
You call in. We'll help you take the right next step for your life and your money.

Dan is up next in Chicago. How can we help, Dan? Yeah, I'm a pastor, and most of my ministry I've lived in a home that has been provided by the church.

And I'm getting ready to retire, and my wife and I've lived in a home that has been provided by the church.

And I'm getting ready to retire, and my wife and I kind of feel like we need to buy a modest home

in order to perhaps gain a little bit of equity and protect us from rising rents and things like that.

That's wise.

I'm sorry?

That is wise.

I like that. Why? No, it's wise.
Sorry. There is wisdom in that, Dan.
I like that. Okay, so you want to buy a house when you retire next year.
Yeah. How much money do you guys have? Well, we're going to have about $2,000 a month after the Medicare deduction in Social Security.
We've got about $350,000 in a 403B account, and we've got $50,000 cash. We don't have any debt.
Just didn't know what the right move for us would be. Is it better for us to go ahead and spend the money on rent, or is it better for us to try to find a home that's within our price range and then take on a mortgage? Well, I'll give you the good news and bad news.
The great news is you're going to retire with no debt and an emergency fund. The bad news is you don't have much money to put into a house as a down payment to be able to afford the mortgage because you said your income is going to be fixed at two grand a month in retirement? Yeah, plus whatever we withdraw out of our 403B.
And the 403B at $350, I mean, it's not a massive nest egg that's going to last us, you know, 30 years. And so how much money can you guys save in the meantime to get a down payment while you still are working? Well, we're saving right now about $1,300 a month.
Okay. And I'm planning on working, you know, another 10 or 12 months.
Yes, that'll be close to $15,000. Yeah, I mean, have you looked at homes? I know it says Chicago on the board where you're from.
I guess a suburb of Chicago. Have you looked at homes and what they're costing? Yeah, we're really in a small town about west of Chicago, and we feel like we can get a more than adequate home for us for, oh, you know, in the $140, $150 range.
Okay. Yep.
I would sit down tonight and, you know, pull up the mortgage calculator and say, hey, if we put, let's say, 50 down into a house, we had a $100,000 mortgage, what would that be monthly? Because my concern is if you're living off of 2K and you're probably not going to be able to pull a ton off of that 403B while it's sitting at this stage at 350, because you would decimate it. If you took out 150 from that 403B, I mean, that's a large part of your nest egg that you've unplugged from future compound growth.
And so I would sit down to see, does it make sense to rent? Can we rent for, you know, 750 in our area versus the mortgage being 1200 bucks? That's the kind of math I'd be doing to see how can we live off of this income? Because it's not a lot of income to live off of, just considering the two grand plus a little bit from the 403B. Yeah.
Okay. But you wouldn't say to rent long term though, George.
No, long term, I'd rather have you in a house. Yeah.
But right now, it's just, there's not a ton of money to throw into the house and just purchase it with cash without just using up all of your retirement. No, yeah, and you may not have to purchase it in cash.
You could put a down payment. You put 50 down, took a $100,000 mortgage.
Yep, yep. I doubt the payment would be astronomically high.
But again, if you're making two grand and the payment's $1,000, that's a lot of your world just eaten up by the mortgage. Yeah.
Well, I didn't know what my options were. Could you work longer? Could you do an extra year?

I could, yeah.

I'm not under any pressure to retire or anything like that.

I might just, just to give you guys a little more wiggle room,

allow your nest egg to grow,

allow you to get more cash for the down payment.

That would give me some more peace personally.

Because you guys could get close to,

I mean, if you guys saved for the next two years, let's say, you could save up to 30 grand in just that cash flow that you're living off of, plus the 50 that you have, that gets you close to 50% of a 140 mortgage. You know what I mean? So like your math is, it can compound pretty quick if you do work maybe one more year.
Yeah. And if I were you in your shoes,

and I would sit down with a financial advisor

who can kind of crunch these numbers for you,

but I wouldn't be comfortable taking out more than $1,000

or $1,500 a month out of that 403B

because you guys might have another 30 years ahead of you

that you need to live off of this.

Right.

And so that's where the numbers come in.

Yeah, how much are your expenses a month, Dan, for you guys?

How much do you guys spend a month? Right now, probably about, I don't know, $28,000 to $3,000, something like that. Okay.
So, yeah, so I think what George was saying, that $3,000. And that's without paying rent.
That's right. That's right.
So then, yeah, that's $4,000. Let's pretend that the mortgage was $1,000.
So that means you'll need $4,000 a month. And so you get the $2,000 that you were saying comes in from Social Security and everything and making sure that you can withdraw, again, that we're just speaking on round numbers here.
Napkin math would say, you know, taking out $2,000 out of that nest egg every single month, you'd probably run out of money while your expenses may be going up later in life. So that's my concern.
I don't want you guys to be down to the wire every single year. That's not the kind of retirement I want to have.
And so that's where we were saying, pause, work longer, keep stashing away in that nest egg, stash money away for the down payment, and then see where you're at a year or two from now. Okay.
All right. Well, I appreciate your advice.
Yeah, I hope that helps, Dan. Yeah, wishing you the best in retirement.
For sure. And that's a common issue that we hear with people that do ministry and housing is provided is like, oh, my gosh, that's great.
I don't have to pay for rent or a mortgage. And then you get to Dan's age, retirement age, and there hasn't been any intentional saving towards a house.

Yeah.

And then you're kind of stuck.

So if you're in that spot, here's what I would do if I was in your shoes.

Whatever you would be paying, market rent, I would take that amount and put it away in an investment account. For as long as you have that career.

So that when you do retire, you go, oh my gosh, we have 400 grand just allocated for housing.

For a house.

To go buy a place in cash.

And always remember that your housing line item in your budget is usually number one the most expensive and number two the most volatile because rent especially will always be going up that's what we've experienced right over the last few years like it continues to go up it rarely if it never goes down and so 20 years from now dan's rent might be four grand exactly so if you

like just say well i'm never going to buy a house i'm going to just be a renter for the rest of my life well that's one expense in your budget that's very expensive and will continue to go up versus saying i'm going to buy a home and i'm going to work to pay it off that's why it's baby step six we actually met somebody uh at the break george she just paid off her house on tuesday and someone else that paid off their house that was here for their 40th birthday in a row two houses in a row that were people paying

at very young ages. Yes.
And so

that's the their house that was here for their 40th birthday. Two in a row.
Two houses in a row that were people paid off their house. At very young ages.
Yes. And so that's the beauty is that line item again is out of the budget.
So retirement has a lot more flexibility. That's right.
When you get that house paid off going into retirement. So that's the goal.
Rachel, we've got a really fun assessment on the website right now that helps people figure out if they're staying on track with the baby steps. So you can take a quick quiz to check your progress and receive a personalized plan just for you.
So here's how you get the get started assessment. Go to the show notes of this episode, the description, click on the link titled, are you on track with the baby steps? And you can complete the quiz.
Yeah. And this is always helpful because especially if you're new to the show, a lot of people find us on podcast or YouTube and have been listening just a little bit.
To know kind of where you stack up against other people, other people, other Americans, but also against the plan just to kind of know where am I? Like, how do I even start this process? It helps you really kind of get a baseline for it. And I think that's always helpful.
If money's you know, money's an area for some people they don't really think about. You've never had a plan.
Yeah, there's no really plan. You're doing 17 things at once.
That's right, yes. But so to get actually a concrete idea of, okay, this is exactly the next thing I need to be doing.
It's a great tool. So make sure to check it out.
Can I tell you one of my secret gear grinders? Oh, I can't wait. When people say, so Rachel, we've been doing the baby steps uh just out of order and i go well then you're not doing the baby steps if you're investing and trying to pay off debt and saving and you bought a house while you're in debt i'm like you don't say you're doing the baby steps out of order just tell me you're not doing the baby steps so just a personal just a personal little grudge there george you just feel it you know it's rare that I'm bothered by something.
I'm kidding. George is not uptight at all.
No worries. Not tightly wung.
High standards, maybe. We're going to unwind him.
Enjoy this Friday. We'll do that after this hour is over.
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