Personal Finance Means Balancing Intensity With Intentionality

live from the headquarters of Ramsey Solutions it's the Ramsey show where we help people build wealth get out of debt do work that they love and have actual. I'm John Deloney, joined by my good friend Jade Warshaw on the night before the election.
Oh, I'm going to have popcorn. I'm going to have drinks.
I'm treating it like it's a whole event. I'm going to the woods, and we are turning off the internet.
I'm going to put my hands and feet in things that are real, like dirt and leaves.

I mean, here's why I'm treating it like entertainment.

Because regardless of what happens, I'm going

on with life. And I'm going to do the things

that I know to do. And I'm going to love my family.

And I'm going to go to work.

Jade, I don't think you've been spending enough time in the news.

Because depending on what happens,

America is either going to make it, or it's over.

That's what they tell us.

It's over. So, alas, now I'm with you.

Yeah, I'll throw some popcorn to you out in the woods

so you know the way back.

Hey, we'll need that.

Taking your calls live, 888-825-5225,

888-825-5225.

Let's roll out to Indianapolis, Indiana,

and talk to Chris. What up, Chris?

Hey, Ramsey family. How are you? We're good.
What's up, man?

Hey, I'm good. I'm fortunate to be where I'm at and I'm just kind of struggling with

step seven a little bit where I feel like I've been able to pay off my house. I'm 41 years old

and I'm at a place where I can start doing some good stuff for me and for everybody around me. I'm struggling with that, and I don't exactly know how to do that, where I just keep hiding my money away, and it's going into the stock market, and I don't know how to compartmentalize that.
In counseling, we call this the tyranny of accomplishing all your dreams.

Because here's what you probably found out.

You cross this finish line and you don't owe anybody any money, right?

Right. I'm debt free.

You cross this finish line and you are, quote unquote, a millionaire, right?

I'm at it.

Close enough.

I'm getting old.

And now, every time you walk by the mirror, you're still you. Fair? Yeah.
We're over-expecting and under-achieving. Well, it's not even over-expecting or under-achieving.
You're doing both. You've achieved.
You've expected and you've achieved. It's that you thought this was going to feel different, didn't you? You thought somehow it would fix you from the inside out.
Right. So what is it about Chris's life that you've set up that you don't love? I'm a little bit of a hermit, and I just feel like I don't know exactly how to be good to myself or other people at this point, where I'm able to have a little bit of free income to do some good.
And I'm like, well, where does that go? That's just a big question mark for me. Money, having excess money absolutely sucks if you have no one to share it with.
Well, I was going to ask, what was the purpose for you when you, I mean, you're on baby step seven, that's no easy accomplishment. What led you to do all of that in the first place?

It was just kind of ingrained in me.

My parents were really good about coaching me,

and it was just ingrained in me to save every little bit that I could and to work hard.

So it was just you following directions.

There wasn't really a deeper meaning for you.

I think so.

I'm like, I'm going to have a midlife crisis. How old are you? I'm 41.
You're 21? I'm 41. 41.
Sorry. Jesus, 21.
You're going to change the game on me. Are you married? No.
No? Do you want to be? Someday. Okay.
So what does fun look like, man? What does joy look like? What does giving look like for you these days? It's like being able to loosen the belt a little bit, and I don't feel like I'm allowed. I've been through so much of that where I'm just like, keep it tight.
Whose voice is that, Chris? Probably my own. Most of us have voices that are in our heads that we don't

challenge and it's important to everyone someone else to stop and say wait a minute i'm having some gummy bears who's who's saying i'm a piece of crap right am i making a healthy choice no but am i a terrible like where is that voice coming from whose voice is that chris it says there's always something bad around the next corner.

Who's saying that?

Is it the news?

Is it your... from whose voice is that chris that says there's always something bad around the next corner

who's saying that is it the news is it your mom is it politicians is it an old coach of yours

somebody has ingrained and is continuing to sit on your shoulder and pump information into your

head that says if you spend this money do you know what's going to happen next do you know do

you know do you know do you know what's going to happen next whose voices um i i don't even know

Thank you. Do you know what's going to happen next? Do you know, do you know, do you know, do you know what's going to happen next? Whose voices? I don't even know.
I'd spend some time with that because John is teaching right now. I would really sit down and spend some time with that because he's not wrong.
Here's what most people who have a scarcity mindset, and this is going to sound ridiculous to the rest of the world, and I don't care. Chris, you want a path out of this for real? Are you being serious about your question? Yeah.
All right. You're going to have to put a budget line in money I will spend on myself, money I will take myself out to eat with, and most importantly, money I will invest in doing stuff with other people.
Now, I am a fellow prepper. I'm a fellow scarcity-minded guy.
I grew up. Money was scarce.
It was tough to come by. It was a lot of tension in my house.
That is in my nervous system. So one of the rules I have when I buy a concert, I could go to concerts by myself all day long, and I know it's not good for me, and it's not fun, but I do it anyway.
So now when I buy a concert ticket, I buy two or I buy four. A, because I've

been blessed and I want friends to go with me and have, and if they can't afford it, who cares? I

want to take a group of guys. I want to go have a blast.
See what I'm saying? So you have to put

that in your budget and you have to hold yourself accountable the same way you held yourself

accountable to getting out of debt. It's the same level of discipline and the same awkwardness.
Because that's a big part of it is that it all feels kind of awkward at this point where I'm like, well, now what? Nothing good. Nothing good you're going to accomplish isn't awkward at first.
You should go back and listen to the very first time I answered a call on the show. It like redefines awkward, homie.
It was so bad. True for all of us, by the way.
James sent an email and was like, fire him now. Fire him now.
He still sends that email every week. He still sends that email a lot.
Do you have a couple of guys in Indianapolis you can start meeting with once a week? Monthly. Monthly? Yeah, I'll work on that weekly.
Yeah, I like that. That's my challenge to you.
My challenge to you is to find a group of guys that you can start doing life with. And by the way, most romantic relationships come from one or two places.
You run into somebody at work or you run into somebody that your buddy says, hey, you need to meet my friend so-and-so or my friend's friend so-and-so. A lot of it comes on the internets too.
Don't do that. Meet people in real life.
Hang out with your buddies. Will you make that commitment? Yes.
Jade, what am I missing here? I don't think you're missing anything. I think the key here is money is supposed to be relational.
And when you X that part out of it, it kind of is like, why did I do all this? What was it all for? And so I think that's the part that's missing. Most of us have some sort of relational connection to our money and why we spend the way we spend and why we develop the habits that we develop.
And it was kind of interesting because when you were talking about it, it really just sounded like someone told me to do this. So I just went out and did it.
And you never found your personal and relational connection to what it is and why you're doing it. But John just laid out a beautiful plan for you.
And I love that. Here's what, here's what stinks about my life.
Statistically speaking, maybe I got 45 years left. Maybe.
Oh gosh, John, this is getting dark. Yes.
dark but listen I got about 45 years left and money is going to allow me to stay alive and to be super generous and to have some great memories that's right that's right and after that I'll be gone that's right and so what are we actually going to do with this stuff we're going to serve each other we're going to take over our neighbors that's the whole point and we're going to have a lot of laughs yeah that. That's why it says where your money is, your heart is also.
It's a relational component. This is The Ramsey Show.
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Welcome back to the Ramsey Show. 888-825-5225.
Taking your calls live. Guess what? Christmas will be here before you know it.
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All right, let's go out to Chai Town and talk to Matt. What up, Matt? How we doing, man? Hi, it's an honor to talk to you, Jade and John.
It's an honor to talk to you, man. What's up? Thanks to y'all teaching.
We're wrapping up baby step three, getting ready for four, five, six. Yeah.
Yeah. Sorry.
192 K date, 192 K in debt. We have 410 on our mortgage.
Nice. Our household income is 300 K, 200 of which is from my job and a hundred of which is from my wife.
Wait, slow down. You'll just blow by that.
I know. That's lots of dollars.
What do you do for a living? I'm a software engineer and my wife is an amazing nurse. Wow.
You're debt-free. $192,000.
You paid off. How long did that take? We started in March of this year.
$128,000 was an RV that we learned we didn't need. Okay.
Okay. Wow.
Wow. Congratulations.
I'm happy for you. This is good.
Thank you so much. Okay.
So as we get ready to term retirement back on,

we want to know where the backdoor Roth falls into this.

We've heard it's match Roth traditional.

We've also heard to match out traditionals in 456.

So it falls in the same category. You're right.

Match beats Roth beats traditional.

So if you have a match with the traditional 401k, you would start there. If you had a Roth 401k, you could start there.
Which one is yours? We both have a match. We just weren't sure if the backdoor fell into the same order because of the taxes that we'd have to pay to open like the post-tax and convert.
So it'd be slightly over the 15%. So just double checking that it would still match back to a Roth and then traditional.
I would still do it that way. I do do it that way.
Let me just put it like that. Excellent.
Does that answer your question? It sure does. Man, congratulations.
Ding, ding. Yeah, thank you all for that.
You bet. Thanks for the call.
Hey, listen, we talk a lot on a podcast or like on the YouTubes. You're the one actually grinding this out on a day-to-day basis, making a budget, looking at your spouse and y'all saying yes and no, and we're in or we're not.
You're the one making this thing work. I'm proud of you, dude.
Hey, while I have you, can I ask you a quick question? You bet. This is totally unrelated to anything.
Thumbs up or thumbs down on AI. Are we doomed or are we going to be all right? You're a software engineer, so you're the smartest guy I know on this topic.
Oh, man. I think we're going to be okay.
I have no worries after finding the Ramsey plan, though. So either way, I'm going to be okay.
So if they take your job and you find yourself in an Illinois cornfield, you're going to be okay? That's going to be A-okay. Dude, listen to that guy.
See, James, we're going to be all right. It's all going to work out for us in the end.
All right, let's go out to New Orleans, Louisiana, and talk to Zachary. What's up, Zachary? Hey, what's going on, guys? Thank you for taking my call.
You got it, dude. What's up? Just got a quick question about paying off my mortgage.
I'm on Baby Steps 4, 5, and six right now um and i'm currently putting uh an extra 500 a month towards the mortgage my wife and i bought it a house back in march of this year we put 15 down on it and been putting 500 down every month uh since we started making payments i'm just curious if i should be doing more it depends on if you want to. Listen, that $500 that you're doing extra every month is just busting your amortization schedule in the face like Mike Tyson.
You're going to be done with this before you know it. And so at the end of the day, this is about you being intentional with your wife, you guys sitting down and saying, how much do we want to do? You're, you're at the point where you should enjoy some of the fruit of your labor a little bit.
And I, I can't tell you what that number is, but you can sit down with your wife and decide, I like that you already have a regular kind of rhythm of how often that you pay. And at this point, it's about margin.
How much margin do you want to put towards this? And how much do you want to put towards living and enjoying your life? Well, I guess that's the problem that I'm having is finding that line between how much do I want to enjoy what we've accomplished versus how much, you know, how quickly do we want to pay down the house? Okay, then let me tell you a story because the best way to think of this is just in context of your life. So for my husband, Sam and I, it took us seven and a half to 10 years to do the first three baby steps.
Okay. And those are the most intense baby steps.
So by the time we got to baby step six, we were like, yo, we've already spent a decade going hard in the paint. So we do less.
Like for us, that line a lot less. It's like, we're going to enjoy our life a little bit more.
We're still being intentional over here, but we're not sweating to do this. So I like to ask people, listen, how long did it take you to do the first three baby steps? Because if it didn't take you long, if you had a windfall or you sold something, fine.
Yeah, if you want to go a little bit more intensely now, that's fine. But if you've already spent years years with your head down there is a part of that that I want you to take a breather and enjoy life does that make sense yeah it does because it took me probably about three to four years because I was starting a new career when I started the process and so it just over time as I started to make more and more money um through promotions and stuff uh it took a while because I didn't have much margin to begin with.
And so I guess now it's like a cash flow. We cash flowed the wedding and the honeymoon, all of that.
So I guess now it's finding that, you know, that happy middle ground of still being intentional enough, but enjoying everything we've accomplished. Yeah.
So after let's let's keep the five hundred dollars going after that. What would you say your margin is for for fun money? Like after you've done all the things that make you a financially responsible adult.
So it ranges. I'm actually a lineman with the local power company.
Yes. And so it just depends on the overtime.
Some months it could be after everything's said and done, we've got $1,000 to $1,500. Sometimes it could be more.
Okay, good. I think as long as you guys are prioritizing your values as a family at this point, if you guys value getting away just you and your wife once a quarter and you're doing that if you value taking a nice family vacation every year and you're doing that i think as long as you're doing the things that you value as fun things family things memorable things the the things that feel you make you feel like what i'm doing the time i'm spending on my work is worth it right because you want to feel like i'm working for something and now it's worth it.
As long as you're doing those things, if you have money above and beyond that, yeah, put it on the mortgage. Okay.
Above and beyond the 500 is what I'm saying. Yeah, good.
Jay, let me say this, and Zach, this is to you too, to everybody listening, but those seasons for me have ebb and flowed. Yeah.
There's been seasons when I need to take a break right yes yes and then there's been seasons when i i wake up and i'm like i can't know anybody anything and i i re get insane again yes and for me it's the same as um yesterday i was feeling extra stressy about the election stuff and all that i was in kroger and i literally made this am going to feel bad tonight and I'm going to buy a bunch of junk food right now. And so my rule of thumb is I don't ever want to fall off the wagon, but occasionally I'll park the wagon, climb down and roll around in the mud and then I'll climb back in.
I think we need that as human beings. I think the key here is intentional.
Like you and Sam, like a decade, we are intentionally going to slow this thing down and we're going to live our lives now. Yes.
And on the other side, for me, I'm going to intentionally dump gas on this thing because I am losing sleep over it. I want it gone.
Right? But I think intentionality is that magic word. I love that.
You're exactly right. I think you're talking to everybody.
That's such a relatable thing. There's that moment where that Terminator 2 red light turns on in my brain and I'm like, we're dropping all the extra money on the mortgage.
And then there's times where I'm like, I need new recliners. I'm not playing this game right now.
Mama needs to live. So that is a very real thing when you're in baby steps four, five, and six.
Just it's okay. It doesn't have to be balls to the wall.
You can out a little bit a little bit this is the ramsey show we'll be right back

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Welcome back to The Ramsey Show. I'm John Deloney, joined by Jade Warshaw, taking your calls on money and life and relationships and work, all of it.
888-825-5225. Let's go out to Dayton, Ohio and talk to Cain.
What's up, Cain? Hey, how's it going? Doing all right, man. How about you? Pretty good.
I got proposed a business offer to take over a business from an older gentleman who has no kids and wants to retire. I wouldn't have enough to put it all down, but I was just wondering what some calls would be of that.
Okay. Were you working in the business before? How did you come across this offer? I actually reached out to do some private work through Facebook.
The guy also has some rentals, and he needed some employees. And, yes, I have got my EPA certifications for refrigeration, and I was a plumber for three years for a construction company.
So what's the business? It's an HVAC and plumbing business. Kind of a smaller town, but there's three of them collected together, and there's quite a bit of work for that company.
Okay. Okay, how's it doing? I mean, have you looked at the numbers, and is it profitable? And if so, how well are they doing? No, that's kind of what I was, another thing I wanted to get into.
I hadn't went across that bridge completely uh i'm going to shadow him tomorrow and see how it's going i just um if it is profitable i i did all this research maybe you can tell me if i researched it right but uh roughly two to three times the business yearly profits is usually what a business like that would go for okay uh being a smaller yeah're right about that. It's a net present value is what they call it.
Okay. What I would not do is go down to a local bank and get a loan and buy this guy out, or I wouldn't go call the SBA and take out an SBA loan and try to buy this guy out.
No, negative. Yeah.
This guy said that the guy that he originally started from, they did it as a private deal. He put, I think, he said 20 grand down and skimmed the profits off to him as payment until the business was paid for.
And then it was essentially his. That's not a bad idea.
If you just say, hey, I want to receive a salary from the business, but you're paying all the profits back to the seller until he receives the full amount you could structure something like that because that way you're not in debt to him you can and you will have made a salary for your work over x number of years and let's say you have to walk away or the economy implodes or whatever happens um you won't be stuck with a worthless business and yet the bank is still calling the note on your loan. Okay.
Do you get what I'm saying? This is also better for the seller because this is better for the seller because anybody who's going to come in with maybe cash or credit or some sort of investor is probably going to lowball them because they have debt on it as opposed to you who's saying, hey, I value the business that you're in. Let's work together.
Keep the valuation that you have. Does that make sense? Yeah, that makes perfect sense.
And I just kind of wanted to make sure that I didn't go down the wrong rabbit hole of looking into this. I'm going to make up completely, I'm going to completely fabricate numbers here.
Okay. So don't use my math.
Just kind of get the spirit of what I'm saying. Let's say after all expenses were paid,

this business is sitting on $350,000 cash

at the end of every year.

You've already done your depreciating assets.

You put money aside.

You've got all that stuff taken care of.

You paid all your bills.

And you decide,

I'm going to take him $100,000 a year as a salary,

as the owner, as the president of this company. I'm going to pay him.
And let's say we decided on a million-dollar sale price. I'm going to give him $250,000 over four years.
And at year four, this will be signed over to me. I'll own the whole thing.
Okay. That's different than going to a bank and saying I need a million-dollar loan.
100%. and I'm going to write him a million dollar check.
And then I'm going to hope that I make that back over the next four years. Okay.
And as well as hope the market doesn't crash in that particular business. Here's the worst case scenario for you and for him.
Worst case scenario is the market crashes in two years. Nobody wants a plumber anymore.
Which by the way, if we're in that world, I don't want to be in that world. Right.
I think we're always getting plumbers. Right.
But let's pretend that happens. And that happens in two years.
You will have made a hundred grand a year as the president or CEO, whatever you want to call yourself of your, of this company. He made $250,000 a year.
So he would have received $500,000. Okay.
And that's under the made-up numbers I'm just using. Then it all falls apart.
It all goes away. And you come to him and you say, hey, I'm tearing this contract up.
I'm walking away. And he says, I'm going to sue you.

He still has a half a million dollars that he has earned over two years.

You have been paid for your wages.

And there's not a bank saying, hey, I want my money back.

Right.

Do you get the difference?

And now he may look at you and say, go jump in a lake.

I'm not doing this.

We're going to structure a dollar amount and you're going to owe me this dollar amount.

Jade and I would just tell you four years, five years, six years, who knows what the world's going to look like. That's another presidential election away.
Let me put it that way. Who knows what the world's going to look like.
So I would not put myself on the hook like that downstream. Right.
Right. And that kind of really solidifies my answer.
I was leaning, but I just, you know, I am doing the baby steps. I haven't particularly went through it, but I do have enough for six months wages and I am investing 11% into retirement.
What is the amount of the business? What is he selling it for? uh like i said i hadn't quite gotten into that maybe i should have uh had that information

before i called you guys so i'm gonna job shadow him um tomorrow and uh kind of after the day you know make sure that he is really a profitable i wouldn't not after the day i would do this for a little while yeah how how old are you kane i'm 22 okay i'm gonna say something and not at you i'm with you, okay? Okay. You're wandering into what I'd call adult land, big boy, big girl land, okay? Okay.
And that's when you say things like, I need to see the last four years of your books, or the last five years of your books. I need to see all the outstanding debts.
I need to see any notes you have called, and I'm going to have an accountant look over it all. And can I, I'm rolling the canoe back for a minute.
Everything that John said and everything that I've said about structuring this deal is accurate. I don't like this for you.
I'm just going to come out and say that because I want to go on record as saying, for you at your age, I'd like you to get your feet wet starting your own business first before you just up and take on something that there's so many learning curves i think um in business and i would love for you to learn those with lower stakes before you come in and learn them with high stakes where there's really a lot of money on the line and there's um a time frame yeah and there's a timeframe where you're having to kind of, yeah, like if this is the salary that I'm paying back, I'm getting my salary, I'm paying him back. There is going to be a term to that and you are going to have to make good on that depending on how you structure it.
So Mama J doesn't like this for you yet. I'm just going to say that.
So let me ask you, what do you think, what's the difference going to be between you running out and getting your own business? The clientele market is pretty stiff. The reason why they're loyal to him, so to speak, is because he takes service calls.
So if the furnace goes down at midnight, he will be there at midnight and he's a one man show. So that's kind of how this business proposition came about.
But the thing about it is, here's the thing. You can be amazing at your job.
You can know HVAC very well. You can be good with customers.
It doesn't mean you're good at running a business. And that's the part that I want you to learn on your own first.
Are you an organized person? Are you good with operations? Are you good with logistics? Are you good with handling all of those ins and out payroll? Are you good with that stuff? Because if it's a one-man show, it is requiring you to wear all those hats. And the truth is, no one gets it all right the first time.
There's quite a learning curve there. And like I said before, I'd love for you to learn that with lower stakes.
And, and, and dude, I, I'm going to re, um, recant on my support too. Here's why.
This is a, you just said this is a one man shop. Uh, his wife actually, uh, writes down the payroll and they take it to an accountant.
Okay. So it's a one employee shop.
So what you're buying is his book of business, his book of business. You do not need to do that.
You need to open up a local Facebook marketplace ad and say, I will be there 24, seven, three 65 midnight, 2 AM. I will be there.
And you're going to get a few calls. You're going to show up at midnight and you're going to start your own business.
You don't buy somebody's clients from them in this one man shop kind of way. I mean, you can do that.
I wouldn't do it. If there's a big company, maybe, but yeah, I'm recounting on my offer.
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Welcome back to the Ramsey Show, 888-825-5225. We are on election eve.

Indeed. Did you want me to say more? Nope.
I just like to feel the tension. People are driving.
They're squeezing their steering wheel a little bit tighter. Oh, yeah.
Or they're like doing construction work and they're just turning the wrench a little bit harder. I should have went dun dun dun.
I know. This could be the last podcast ever produced.
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Wow. Okay.
Today's question comes from Maggie in Utah. She says, my husband and I are in our early to mid fifties and he plans to retire at 60.
I'm not sure when I will retire. We have about 3.5 million in assets.
Our children are 16 and 21. When is the right time to sit down with one or both of our kids to go over our assets in case something happens to us? I think our 21-year-old

son would not be affected by the news and go on about his life as usual. If we tell our daughter

who's 16, I'm afraid she will get stars in her eyes about all the things she could buy. We don't plan

to die soon, but you never know what could happen in life. Yeah, I think that's a great question.
I wonder, it's all really going to be based on what your will is and what you plan to do with this money. I mean, obviously, I would not have this set up, John, that if something happened, like if something happened to Sam or I, the kids aren't getting all of this money lickety split.

Correct. Right.
It is something that will come in increments at certain age points with other certain things in intact. Like to Dave Ramsey's point, you can't be on drugs to get this money.
Right. And so I'm not sure what your plan is, Maggie, but I want to make sure that's not the case because an 18 year old suddenly getting a million dollars is doesn't usually go well yeah i i'm reading this as she's wondering when do we sit down and tell our 16 and 21 year old that we have three and a half million dollars in assets and here's how we're going to divide this up i and and to my to my point that i'm trying to make is i want to make sure they have the right plan in place first yes that when they do tell them, it's not, hey, and by the way, when you're 18, you're going to get a million dollars.
So I think the way to avoid stars in the eyes is to say, here's what's going to happen. Like if we were to pass away, here's what would happen.
You would be gifted the money to pay for school. And at this age, you'd be given the money to have a down payment on a home.
and at this age you'd be given, you know, and walk through on a home and at this age you'd be given you know and walk through it so that at every point in time it's you're receiving this money and here's what it's for as opposed to and you're just going to be Scrooge McDuck rolling in bills right so I think it's all about how you have it set up how you speak about it and truly all of this is about what you've been teaching over time right from? From the time they were eight years old, you know, or younger about how to handle money. And so the hope is that the 16 year old will have some level of, okay, you know, and as she gets older, even more level of, okay, this is, I have to be a manager here.
This is not the key to unlock my whole life. And I get to be irresponsible with this.
Yeah. I think the age appropriate is the words that manage here.
And quite honestly, I would not sit down. I probably, it depends on your 21 year old.
I think I would tell my 16 year old that, Hey, if we ever, if mom and not something happened to dad and I, or mom and I, i you're gonna go live with so-and-so yeah until you turn 18 and we've put together some some things they would sell the house so that you can afford to go to school and what else like they'll sell the house and yeah and you'll be taken care of and we'll cross that bridge when we get there details don't need to be talked about 21 I think a little bit more, hey, if we ever passed away and you want to keep this particular rent house, we'll talk about that, but you'll let us know and we'll begin to slowly balance those things out. Yeah.
My 14-year-old knows if mom and I were to die, we have some things that would sell that we'd take care of as schooling and he'd be going to live with so-and-so. Yeah.
My eight-year-old knows you're going to be going to live with so-and-so. It's just age specific.
I think Rachel Cruz says, share, don't scare. That's right.
And I like that. So sitting down with your eight-year-old and being like, one day mom and I are going to die.
That's a lot, right? Letting them know, hey, we have a plan. If something ever happened.
Yeah, you're all good. We're going to be okay.
And we want you to just be able to be sad. And then Rachel and Dave has been pretty open about his story.
They didn't know the full extent. They knew mom and dad were well off.
They did not know Dave Ramsey well off. Yeah, big pockets.
Until they had graduated and they were married and they were moving on with their lives. And then they sat them down, but they had a detailed plan.
And then there's some different levels of specifics you can get to there. So share don't scare and developmentally appropriate.
I don't know that the dollar, dollar, dollar amount, I don't know that you ever need to sit down and go through each detail unless you want to say like, hey, this house right now is worth about this. Oh, I think at a certain age, I probably would.
Yeah wealth 21 25 yeah i mean to dave's point they kind of they have a rhythm for them it's yearly now they do now but like depending on what that is maybe it's every couple of years you're like hey as you see big changes in your wealth or in your state whatever that is yeah um it might be worth it to do that But I think as much transparency as you can at the right age is a good thing.

Kids want to know, are we going to be okay?

And are we going to be taken care of?

I think she's right to think, yeah, if you tell a 16-year-old,

hey, if we die, we get $1.7 million.

Bro, sleep with one eye open.

I wouldn't tell them.

I didn't tell a 16-year-old that.

You're out of your mind.

You're out of your mind.

Let's go out to H-Tone and talk to Eric. What up, Eric? How are we doing? Hello.
What's up? What's up, guys? So I'm 21. I make 110.
I'm going to make 110K this year. Okay.
And my problem is I have a 21-year-old car that isn't running as well as used to okay so because of that i'm looking at a something a little more fun a bmw 330i okay and i'm stuck on if i should give in and enjoy a newer well it's going to be used slightly used a What year? It's a 2021. Okay.
Or if I should keep the money because I would cash it out.

Keep it. to be used slightly used a newer vehicle it's a 2021 okay or if i should keep the money because i would cash it out uh keep the money to further invest since i do invest pretty aggressively i'd say what percentage are you putting away um investments probably at least off your gross at least 30%.
30%. Okay.
How much will the BMW cost? After taxes, it should come out to about $29,000, $30,000. Okay.
$30,000. Okay.
And tell us more about the rest of your financial snapshot. I want to know how long you've been making this income.
I want to know if you have any debt and I want to know your living situation. Okay.
So last year I made 103. This year, 110.
What do you do, man? I cut hair. I'm a barber.
Wow. Are you one of the barbers that I see on the internet that makes hair out of no hair that you like I could oh wow anyway I've seen some things on the internet 110 cutting hair I'm sorry you make 110 grand cutting hair uh yeah I love this country way to go go dude so so you're on the uptick um that's that's really really great and it's just your business um you've been investing 30 do you have any debt uh i did go on a trip recently i ran up a credit card oh i don't likey okay how much did you run it up it's like 4 500 okay that's a lot but what kind of trip did you go on? I went to Japan.
Okay. You're living that life 22 years old.
Any other debt? No. Well, I do have two investment properties in Ohio.
How can we forget about that? In Ohio? Okay. So just to remind people,'re in texas and so tell me about these investment properties in ohio oh wait i'm gonna wait a minute i'm against the clock i'm gonna tell you what my uh thought for it is for this i don't think you've learned enough about how to manage your money properly yet i think you're doing really good financially with your income but i want you to learn more about how to manage debt and the right way to buy real estate.
For me, you buying this car right now feels reckless because you haven't learned everything you need and it's a slippery slope for you. So I'd say no right now.
Keep diving into the Ramsey material. Get a Camry, my man, and sell those rental properties in Ohio.
But congratulations on being a $110,000 a year barber. This is the Ramsey Show.
We'll be right back. What does the future hold for business? Ask nine experts and you'll get 10 different answers.
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Live from the headquarters of Ramsey Solutions just outside of Nashville, Tennessee, it's the Ramsey Show, where we help people build wealth, get out of debt, find work that they love, and learn how to have great relationships and emotional and mental health. I'm John Deloney, joined by my great friend Jade Warshaw.
We are taking your calls on election eve. Aw, yeah.
888-825-5225. Jade and I were just making bets.
Yeah. We were talking about if you had to put actual cash money.
By the way, you can bet on the election, which is sick and sad. But if you had to put cash money on the line, who do you think would win? It was an interesting conversation.
And back in where the personalities where our offices are, Ken Coleman and Rachel Cruz are back there and they are lit up like a Christmas tree. This is like their, this is like all 10 Super Bow 10 super bowls yeah into one and for me i'm gonna get off the show today and head to the woods and i'm not gonna come out until this whole thing is is over so it's the opposite of that for me that's funny i want to make sure my chickens are okay and that they're still producing eggs in case i will definitely watch and i will we will all be okay Of course we are.
We'll be okay. We're going to be all right.
Unless this other candidate wins. And then it all comes down.
Let's go out to Sacramento, California, and talk to David. What's up? There you are.
What's up, David? Hi, Dan. Hi.
Thank you so much for picking up my phone call. But anyways, my question is this.
I'm about to close my escrow and the current interest rate that I'm locked in is really high. It's like 6.875.
Okay. And my loan officer tells me, hey, don't worry about it.
In about a year, two years down the line, interest rate is going to go down. You're going to refinance, so that's fine.
And I want to put in, I have the potential to put in a lot of money, like up front because from the calculation from your show teaches me, teaches me how these things work. Right.
And so it's just mathematics. Yeah.
And so my, my loan, so I'm shopping around, I'm shopping around with two different loan officer along with my realtor. And they all wonder, why would you want to put money up front? Because they're not financial advisors.
They just want to get you in this house. And they're filtering it through what they would do.
A lot of people, you know, it's human nature. If you give advice, you're kind of giving advice based on what you might do and a lot of these loan officers for homes they most of their life is people trying to scrape together and mow lawns to get get that 2.999 up to three percent like there's it's so hard to find people who actually save money like you david okay it's just rare so i.
So I just want to make sure that my math is not wrong somewhere. So they suggest this.
Save your money now and wait until you refinance. Let's say right now I'm at 6.8, right? Okay.
Wait until it, let's say it goes down to 4, and then put in all the money in when you refinance to 4%. And I'm punching my number.
I'm like, no, still, it won't benefit me by putting it in later in life versus now, even if later in life is also a year later. And you can't predict the future.
That's the truth. We can speculate and say, here's what we think will happen.
But the truth is, I mean, the Fed lowered interest rates and it had an adverse effect on the home market temporarily, I think. I think there's a lot of things that affect that.
But right now, those home loans went up just slightly, you know, those interest rates. And so you never know what's going to take place.
We're in an election cycle. You don't know.
I mean, I would tend to agree. Yeah, I think over time mortgage rates are are going to go down and you'll be able to refinance.
But you truly don't know. You have the money here and now and you have the ability to affect how you want your mortgage to feel here and now.
And so if you want to put as much down possible, I vote for that because when you put as much down possible, yeah, it's definitely lowering your payment. It's ensuring equity, and it's getting you to the point of payoff a lot faster.

And then, yeah, in two years or whatever, if you want to refinance to get that lower rate, yeah, it's up to you to do so. David, how much are we talking here? Like, how much cash are you sitting on that you're debating on whether to put down or not? I, with all the minus my closing costs, I have about $65,000, you know, sitting on a site collecting at only 4%, you know, in a high-level savings account.
Yeah. Okay.
So it's only collecting at 4% while, you know, my interest rate is at 6.8 right now. it's more beneficial putting in the house instead of just

let it sit there at four percent what um what's the total purchase price of this house the total purchase price well uh is uh 485 and i'm putting down 25 already but i want to put in more but they're like why why would you want to do that that? I think they just don't understand that way of thinking.

I think most people are not thinking about the idea of paying off a mortgage.

Yeah.

It's just not in people's mind.

The minimum possible to get in the house is enough for you is a lot of times where people's mind is at.

Can I throw an alternative in there that will just throw a wrench in all this for you, David?

Okay.

It's a different calculation that I do. I am not a number savant.
I'm just not. I'm just not quick.
Like Dave, I sit by Dave. I sit by Jay.
They just do math in their head. It's amazing.
I just, I can't do that. Okay.
Here's the different calculation I make. What job do you have? What do you do for a living? So I uh i'm basically um i am in clinical trials in clinical okay so you do you do r&d you do research yeah yeah research yes okay so um let's say one of the new candidates comes in and just cuts off nih funding all of a sudden or does something like warp speeds it again like Trump's operation warp speed right and suddenly dumps a bunch of money and you get to skip the third step and go straight to market like either way imagine your job goes away and you have to go find other work what I would the reason I would vote to the money down, aside from the math, and you've done the math, right? And so you're seeing it.
It would be, quote unquote, making six point whatever percent what my APR is because it's only making four in this place. And I could put in a mutual fund and there's going to be the TikTok bros.
They're like, bro, the gap, the spread, all that. But you're doing the math, right? The additional layer of peace that I would solve for in my house as a non-number guy is if I lost my job, but my mortgage was only 275 instead of 350, would that lower my payment enough that I could go get down the street and get a regular job and keep my home? Okay.
Do you see what I'm saying? Yeah, I do. And so I, in my house, when I've taken out mortgages, I solve for peace.
I care more. I call it a soul tax.
I will pay 2% or 4% on the, I will pay that so that I know if I got fired or if my job went away, I could go find another job or two and keep my home so my wife and my kids would not have to move. And I know that can be stretched out.
And, well, if you keep your $65,000 in emergency fund, then you've got that to spend. I get all that.
If I'm going to sign up for a mortgage, I want that payment to be something that I could absorb if and when something happens. Right.
And you're in a field, I'm in a field, who knows what happens to us the day after tomorrow. Right.
And so I want to take as much risk off the table on these low level on this side of the barbell. And that is, is my housing covered? Is my four walls covered? Do you have an emergency fund? I do.
Yeah, dude. So that's all

to say is, dude, I would solve for peace here. You've done the math and you're right on the math.

I would solve for peace and put this money down on a house and take out as small a mortgage as

possible. Make the bank the least amount of money possible at your expense and be able to take care

of yourself if something were to happen to you. Does that sound right? Okay.
Yeah, sounds good. Thank you so much for your confirmation.
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That's why I'm pumped to bring the money and relationships tour to a city near you. Join me and Dr.
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Grab your tickets at RamseySolutions.com slash tour before they're gone. welcome back to the ramsey Show.
I'm John Delaney, joined by Jade Warshaw. Listen, the best way, the best way to make the most of your money is by creating and sticking to a monthly budget.
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All right, let's go out to ATL, Atlanta, Georgia, and talk to Fancy Nancy. What's up, Nancy? How we doing? I'm doing fine.
Thank you. Thank you for taking my call.
I just need some assistance and I know that y'all will be able to help me, but I'm 59 years old and i've been married for 37 years um i was a

stay-at-home mom and i homeschooled my three kids um but i'm currently in divorce proceeding oh gosh

i'm sorry yeah it was um due to emotional abuse and anger and rage, and he's unwilling to address any issues, and so there's no trust and safety in our relationship. So I have actually been in Financial Peace University.

He was not involved in our finances, and I begged him for three decades to get involved, but he would just ignore me. Although I went through Financial Peace University, and I did all the baby steps, we owe $55,000 on our house, which is worth about $430,000.

Otherwise, we have no debt.

Okay.

That's good. But because we've never been on the same page with our finances, we never really saved anything.
And he liked to eat out a lot, so we wasted a lot of our money. But in retirement, if we were were together we were planning on using some money that his parents left us how much is that and it it's about 800,000 right now and later on in life he started a 401k which has about 300,000 and I have a small one and we have some small hsas but um the last major outburst he basically told me he was going to destroy me oh i'm sorry it was um because yeah sorry that's okay um destroy you financially or physically? Well, financially, I believe.
He never did it. He was just more emotional and kind of cruel and stuff.
Have you met with the divorce attorney? I'm assuming you're in proceeding now. Yes.
Okay. And we're going to mediation.
Okay. And I just wanted advice on what to think or how to proceed because my lawyer that I think is really good, you know, he said, just come up with a good, better, best options, and we're going to get together and talk some more.
But my husband talks about, you know, his salary and this inheritance being all his, and I just don't know what to expect. Well, he's not right.
Yeah, he's not right, and he's bluster. And so here's what I would not do.
If he's not trustworthy in most of the other aspects of your marriage, I wouldn't suddenly go full trust on this bluster, okay? is trying to um flex his muscles on a on a situation that he is losing control of right like like through like sands in an hourglass right and so i can't give you legal advice i think your attorney um knows the laws of georgia and knows what um what mediation looks like in the state of Georgia, and that's different across the board. But I will say, from my experience, that sounds about right.
You laying out and saying, okay, here's what this looks like, and what does it look like to split things? And as part of a divorce, I would make peace with, we're gonna have to sell the house and split those assets.

And you should,

by the way,

and to get out of that,

unless somebody wants to buy somebody else out from this house and the

inheritance and the retirement accounts,

those things usually get split up in some shape,

form or fashion.

And after 30 years together and you staying at home for 30 years,

taking care of the household,

you generally speaking are entitled to half of that estate.

to be... After 30 years together and you staying at home for 30 years, taking care of the household, you generally speaking are entitled to half of that estate, depending on what's going on.
But I can't give you any details on that. I think your attorney's right on, though.
Okay. I was going to ask about the house.
Like, I don't want to stay there. And he was thinking about buying me out.
Great. And I just didn't know if that's a good option or not, or we should just sell it and, okay.
I mean, if he wants to buy you out, that's great. You'd still get your cut regardless.
6.5 does another for you if you don't want it. And then, I mean, essentially, based off of what you've said, you didn't say how much is in your 401k.

Do you know off the top of your head? Well, I never really worked. So, yeah, it's like $60,000.
Hey, Nancy. Nancy, I want you to change that language, please.
Okay. Okay.
You built and held together a home for three decades. Okay.
I want you to stop saying that you don't have any economic value in this arrangement because you didn't, quote unquote, punch a clock in an office. You've been working your butt off for 30 years.
You've been keeping the books. You've been trying to manage the emotional safety of that home for 30 years.
Dave gave me a line. He gave me a quote that has really proven instructive here.
Okay. Once somebody files for divorce, the marriage is effectively over.
It is now a business arrangement. We are untangling business assets.

And the reason you hired an attorney is because they will come in.

They will know the law.

They will be a hired gun on your behalf.

That's their job.

And they do not bring 30 years of emotional pain and hurt into the negotiations.

So I want you to let your attorney do their job. Okay.
Okay. I want you to keep your integrity about you.
And sometimes attorneys want to settle this thing for as low as possible because they're going to take their cut either way. And some will look at you and say, no, no, no, I'm going to do right by you.
Okay. Let let them do their job but i want you to throw your head back throw your shoulders back this is a business this is a

business deal now and we're going to do what's right and you constantly telling yourself i

didn't want to work for 30 years this is not true you've been working a lot okay yeah a lot cool

Yeah, yeah, yeah. even work for 30 years.
This is not true. You've been working a lot.
Okay. Yeah.
A lot. Cool.
Yeah. Yeah.
Can I tell you something else? Can I give you a homework assignment? Sure. How old are you right now? I'm 59.
Okay. I want you to write a letter to 63-year-old Nancy.
Okay.

And I want you to tell her that you're doing hard work right now so that she will be safe.

She'll have a place to live that's hers, and she'll have some economic stability,

and that because of the hard work and the grieving you're going to do right now, she's going to be okay.

Okay. All right? And I's going to be okay.
Okay.

All right.

And I want you to imagine her having a cup of coffee in a safe house,

surrounded by her kids, surrounded by some goofy dog,

because you're not a cat person.

I can already tell that.

Thank God, right?

You're a dog person.

But I want you to begin to picture exhaling when you come home,

not your chest tightening up.

Okay? Okay. Because that's been happening to you for too long, right? Yeah.
Yeah. We're done with that now.
I'm so sorry that this is happening to you. Let your attorney do their job.
Yeah. Am I missing anything, Jade? I think you're going to come out of this okay with the assets that you guys talked about.
You're going to be all right.

You're going to need to work with an advisor.

And when the time comes, we want you hooked up with a Ramsey Smart Investor Pro in your corner to help you go through this.

But you're going to be all right.

The money is there.

Statistics show that half of Americans don't have enough life insurance or they don't have any at all.

I don't understand this, John.

Why don't have enough life insurance, or they don't have any at all. I don't understand this, John.
Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it.
And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.
That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse.
They've lost somebody important to them. Me too.
They don't know what to do next. You're going to have a crisis here.
You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up.
Or she's concerned how she's going to eat tomorrow. That's exactly right.
These are the two options. It's saying I love you to your family.
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Go to Zander.com or call 800-356-4282. Hey guys, good news.
Presale is on now for my new book, Build a Business You Love. If you're a business owner, you know running a business is hard.
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Welcome back to the Ramsey show. Triple eight, eight, two, five, five, two, two, five.
Taking your calls live on life, money, your mental and emotional health, your relationships, your work, all of it. Call with just about anything.
We probably got an opinion on it. All right, today's Ramsey Network app question.
So we have the Ramsey Network app. It's where you can go to get the show.
You can get video of the show. You can get all three hours of the show.
It's kind of where all the cool kids hang out these days. But we also have an opportunity to take questions in the network app and so we've got

one from parker here here's what parker asks he says i'm 23 and i'm currently living with my parents but i want to move out of state to be with my fiance okay i have a job lined up and she has an apartment we're going to be living in while we both work to save up for a home the problem I'm having is my family

the problem

I'm having is my family

the problem i'm having is my family because they don't like the idea my parents have always believed in being married before moving in together and their stance is making it hard for me to make a decision what can what can i do moving forward to show them that my moving away doesn't mean I'm betraying anyone.

Sounds like a Bon Jovi lyric.

I just want to live my life my way here's the deal uh brother parker rock on to the break of dawn dude if you want to live your life your way go live it bobby brown said it the fact that you are having this much uh stress in your decision making means you don't want to just live your life your way you want to live your life your way and have everybody else in the world go along with the way you think it should all work and you want people with wisdom to uh be quiet and just do what you want them to do and you want people with with opinions or have data or whatever to just shut up and let you do your thing. So if you want to go do it, go knock your lights out.
But I don't think that's what you just want. Yeah, I got a hot take on this.
You know, like I said, Bobby Brown, it's my prerogative. You can do what you want to do.
Like you can. But I think this is just what I think I think when you're brought

up a certain way and you and and in this case I'm just gonna side with the parents I think this is the right way I think it's a good idea to not uh live together before marriage there's so much research around that anyway uh I think when you are stepping out of of safe boundaries and good boundaries, I think that what you're feeling is your heart going, this is not the right thing. And I think it's easier for you to say, it's my parents.
I think it's you. I think you know this is not a good move for you.
And you're trying to go beyond it under the guise of, it's my life. I get to do what I want to do.
And why don't I feel good about this? I actually think it's your conscience going, this ain't it uh Parker and I think you should listen to that that's what it's saying it Parker Parker this ain't it and so I think that's what's happening because I know you know you talked about the voices in your head um I have multiple voices in my head yeah but you know what I'm saying the idea that you hear the people who who you allow to speak in your life whether in a negative way or in a positive way, their voice lives rent free in your head. Right.
Dave Ramsey's voice will always live rent free in my head when I go to pull something off of a shelf that I have to pay for. I always hear him in there.
Anyway, you hear your parents voice. And so I know if I had tried to strike out and move in with my boyfriend, I would have heard my dad's voice in my head like, whoa.
And I think that that's what's going on. And maybe listen to it because your parents raised you.
The fact that you're writing into this show lets me know that you have somewhat of a good head on your shoulders. Maybe listen to them.
And I think it's good to call it. Forget all of the wisdom your parents want to pass along to you and whatever, you know, their old their old fashioned or it's just their dumb church, whatever you want to say about it.
The research says couples who play house, they, and again, it makes sense on paper. I'll go with you.
It makes sense on paper. Because you think you're testing it out.
That's right. Before we do this forever, let's try it out for six months.
Let's try it out for a year. That makes sense on paper.
what it doesn't take into account uh and that may work with a car yeah right it may work with a car but people aren't cars and the only way marriages work long term the only way romantic relationships and partnerships work over time is there has to be a tethered in commitment that says this cannot end that's right otherwise it will talk to anybody who's been married for any length of time and they'll tell you, oh yeah, if that thing wasn't in concrete, we would have gone our separate ways for any number of reasons. And so it always comes back to this promise, I will be right here and we'll figure this thing out.
And so you end up living separate, co-managed, co-everythinged lives instead of creating a new life that has one entity moving forward. It's hard, right? It's hard.
I also think it's a guise. I think it's, you know, if you're dating someone and you decide, I know I'm going to use old school language here, you decide to go steady or like, hey, it's just us.
Like we're not going to see other people, whatever you want to say. That right there kind of has, that's about the, before you're like hey it's just us like we're um not gonna see other people whatever you want to say that right there kind of has that's about the before you're married that's about as far as the relationship goes before you get engaged of saying i'm only gonna date you and only you but our lives are intertwined so i kind of have the ripcord i can pull if you turn out to be a psycho or you turn out to be not the one for me right but then we've told ourselves hey i can take this commitment a step further by saying come live come move in with me or you move in with me but it's really the opposite because you're saying you're telling yourself this is me displaying another level of commitment but it's really you showing a level of uncommitment by saying i don't want to to marry you, but I want to intertwine our lives.

But I also want to know that I can pull that same rip cord.

That's right.

And so for me,

I'm like,

why would I get myself intertwined even deeper with you?

If you're still looking for a rip cord to pull.

Yeah.

Do you see what I'm saying?

If you're not ready to go in,

don't go,

don't go in.

Right.

And,

um,

Parker.

So if you're,

if you're my friend or if you're one of my grad students, you came in and said, Hey, let's just, I need to have coffee and just want to talk. Um, I would say go marry your fiance and make a lineup a, and I hate to say this words, line up a business arrangement so that you begin sharing things fiscally, begin sharing things, uh, romantically, emotionally.
We are going to create a life together, a home together. And so if somebody ever yanks this ripcord unintentionally, there is a structured separation here.
You're not just trying to figure out how to separate whatever goes on when y'all start buying houses together and whatever your people do. But I'd say get married or slow down, slow down.

If they're,

if it's your fiance,

then you've already made this sort of a commitment together.

Then wait till it's official.

Yeah,

I agree.

I agree.

I don't know,

but I hadn't thought of your,

often we get to blame and everyone else in our life.

Yeah.

But it's cause we don't like looking in the mirror and, and looking at our guts and being like,

this isn't right. Sometimes it is that.
Remember like in college when you're dating somebody and you're all your friends are like that's not a good idea and you start to go that discomfort it's because of them yeah it's like no because i know listen let's let's go down another trail then john because i think what it is is we've also told ourselves that uh and this is erroneous good friends and you know good supportive people they support you no matter what no and they they tell you the truth no matter what okay and that's the other thing like that's countercultural to go i feel bad because this person is telling me a hard truth right now or they've ingrained a hard truth in me right now it's easier to say say, you know, I'm going to go my own way and

I'm going to do it my way. And this is living my truth.
But then when you feel bad, you're looking at everybody. You're the one making me feel bad.
You're the one you should have supported me. I'm like, no, bro, that's your, that's your conscience.
That is feeling bad is inside out most of the time. Right.
Yeah. And I think back to conversations, gosh, I could just name them like Trevor and Tucker and Christian And Buddy and Craig And God I could keep going for days Who are these folks? Todd, John These are men in my life These are men, Chris Nelson These are men who have looked me in the eye From when I was a little boy All the way until I was a grown man And they say I see something and you stop Or here's another way to look at this or i want to challenge you on this and i am only sitting here because those men loved me enough yes to say hey stop and women too there's been women too in my life who loved me enough to say i'm calling you out yeah right and it's not it didn't make me feel bad did i feel bad yes i felt bad because i was exposed right i was brought to light.
And thank God those men and women have called me out over time. Man, let me tell you.
If you don't have good friends in your life who will sit you down and tell you you need to cool out or they'll tell you about yourself, you don't have the right people. You need good friends do not always agree with you.
And your parents, if they're being good parents, are not trying to be your best friend. They're not always going to to agree with you they're going to set you straight because they've lived a lot longer than you now i'm reserving this assuming that this is some parents who've got some sense some parents are a little bit right so fair enough fair enough but you need somebody who's going to set you straight and you need good people who are older than you who have lived more life than you to set you straight all that to say, listen to your parents, Parker.
Listen to your parents. We'll be right back.
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That's RamseySolutions.com slash smart tax. Welcome back to The Ramsey Show.
I'm John Delaney, joined by Jade Warshaw. Let's go out to Orlando, Florida and talk to brother David.
What's up, David? Hey, how's it going, guys? Doing great, man. What you up to? Not much, not much.
Appreciate you guys taking my call. God bless.
I'm calling to ask about my condominium. I'm not sure what to do with it.
So I bought it in 2010 with cash. And the HOA has been increasing since then.
It's about $600 a month. But a couple months ago, the HOA, the condominium company, the guy's in charge.
Yeah. Did you fall out? No, we lost him.
I think you fell out. We lost him.
Well, maybe he'll come back.

I think the HOA gods were like, stop, and they just cut it off.

They have a lot of power.

All right, let's go out to...

Wait, we think he might be coming back.

Oh, is he back?

Oh, line one.

Okay, let's go out to Los Angeles, California, and talk to O Susanna.

What's up, Susanna?

Hi, how are you both doing today good what's going on

um so uh I apologize if my voice is shaky I'm riddled with self-loathing and neuroses but

I am too and so is George Campbell you're in good company

thank you appreciate that um so I guess just um I was asking how I can't my financial question is Thank you. I appreciate that.
So I guess just I was asking how I can, my financial question is what's the most effective way to tackle my student low debt to start pursuing my other financial goals? I got my master's degree last year in social work. I've been working in mental health for the past 10 years and I don't have a regret with getting my master's because, you know, here in California, you need a, you know, you need that degree to, you know, move up in this field.
And I did take out a loan. My current debt right now, I hate saying it out loud, it's $41,944.79.
The reason why the loan is that big, just some quick background on me. I am a first generation, you know, my parents are immigrants and, you know, they work really hard, but unfortunately, you know, there was never that, you know, like, like, you know, like they were never able to help me out financially, which I don't expect them to, by the way.
But, you know, that's kind of my background. I've been working since I was 15 years old.
I haven't stopped. Susanna, can I interrupt real quick? Yes, of course, yeah.
Okay, listen. Jade and I are on your team.
Okay? You don't have to explain. You don't have to apologize for anything else.
Listen, 41K, Jade and I had multiple six figures of student loan debt. You're good, man.
We would have been calling you for advice years ago. Okay.
And I dedicated my life to working in the emotional and mental wellness of other people. I love what you do.
I wish you didn't owe $41,000 because it's wearing you out and it's making you exhausted. And it makes it hard to show up for clients day after day after day after day because you have your own anxiety and your own stress from that debt.
I wouldn't wish that on anybody. But, dude, we're on your team.
Okay? Yeah. Thank you both.
I really appreciate that. So let's jump in.
Let's jump into the issue is the problem that you're trying to pay these off and you don't know where to start. Tell me about the problem.
Yeah. So I think it's just mainly that like not knowing where to begin.
And then on top of that, I'm 31 years old and I, you know, I know that there's a timeline that i kind of wanted to follow i know timelines sometimes they they're not you know they're not going to be linear i wanted to be a homeowner definitely before i was 40 i thought um well a lot of times when we have those goals the way to reach them is to kind of reverse engineer it and say okay if i want to be a home a homeowner by the time I'm 40, I'm 39 now, that gives me a nine-year spread. What do I need to do to make this happen? Right? And in your case, it's, it's, let's do the math and let's figure out where the holes are.
So if you tell me that you have almost 42,000 in student loans, the first question I'm asking is, is that your only debt? um so have two credit cards, but honestly, they're very small. It's about like a thousand each.
So I know that I can pay off easily. But it does matter in this equation.
And the reason that those credit cards matter is because they speak to your habits. And so I don't want you to just because the balances aren't high.
I don't want you to say, oh, I have these credit cards, but they don't matter. They actually matter quite a lot because it speaks to your nature of wanting to borrow money to get the things that you want or need.
And so I want you to look at those and go, OK, this is a habit that I've started and I don't want to do this habit anymore. So the first step for you is to break up with those credit cards and say, if debt is causing the anxiety, if debt is the problem in my life, I have to stop borrowing money and I have to cut that off at the source.
And so my first homework for you off this call would be, let's cut up those credit cards and decide that we're going to live on the money that we make. Fair enough? Yeah, that's fair.
So we got the two credit cards. The balances aren't particularly high.
Is there any other debt that you want to talk about? No, it's just that just um just have to beside those two credit cards it's just a student loan debt okay and then how much are you earning from your job um so i make 77 a year a little bit of change and then i have a side hustle i work at a hospital and um that's not always consistent i I work whenever they need me. I'm per diem um but i want to say i bring home like 2 000 so i think i'm taking home every every month about 6k and i know that's a pretty good amount and um to you know i never like have the habit of well aside from school and the two the only reason why i got the credit cards was because like i had people telling me you know family members like oh that's the only way you build credit never because i was i know they were wrong they jacked you but here's here's the thing i want to get one last piece of information from you how much of what are you paying in rent every month um my rent is it's only a thousand so it's not too high.
Thankfully, I live with family. So I'm actually a really good saver.
In my 20s, I traveled a lot. How much do you have saved? In a year, I was able to save $30,000.
You have that now? Yes, I do. And I put some of it into Ohio Things account, and then the rest, I have it in my savings.
Again, I don't know a lot about any financial things. Well, let me tell you, Susanna.
We got you. Susanna, let me tell you, let me help you.
The $30,000, and I know this is going to go against every fiber in your being right now. But I'm going to tell you anyway, and you're going to roll this around in your head.
And my hope is that you'll decide to do what the people on the radio told you if I were you I would be tapping into that 30k that saved because it's not really your money that money yeah is owed to the student loan companies and you will feel a lot better if you just give them their money and you'll be able to sleep a lot better at night because right now you're you right now you're holding it from them. You agreed to pay.
So you have the $30,000. I take $29,000 of that and I'd pay the vast majority, the big bulk of the credit cards and the student loans off.
Credit cards are gone today. Most of the student loans are gone.
And then how quickly could you pay off the other $10,000 or so of student loans i can tell you november december and january by february one you could be debt free suzanne wow yeah that's three thousand bucks a month right would cover the rest of this and you don't owe anybody in the world and can i flip that around nobody in the world owes you i mean flip that around? Nobody in the world owes you. I mean, owns you.
Yes. Okay.
How cool is that? Yeah, no, that's pretty great. And you know, even before jumping on the call, I was kind of mentally, I've even, I was mentally preparing myself.
Like, I think I'm just going to have to pay this and write this off. The only reason why I didn't start paying off my debt right away was because, you know, I think a while back they were supposed to forgive student loans for social workers.
So I did put it on hold. I can understand.
Yeah. Now that it seems like that's not happening, you know, and I am in a relationship, you know, obviously we're not engaged or anything, but I did tell, you know, my significant other, I told him, look, like, you know, because he's actually really good at saving money and everything, and he's still really good support.
Well, it's good to have him. It's good to get it all paid off.
And you're right. I think that the reason you were steadying yourself and getting ready to do this, because you know it's the right choice, and I hope you do it today.
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