Don’t Let Lifestyle Creep Derail Your Financial Goals

From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by bestselling author Jade Warshaw, and we are your hosts this hour, taking your calls at 888-825-5225.
Before we get to the calls, we've got an exciting interview that is dropping next week. You don't want to miss this.
A few weeks ago, Dave Ramsey and I sat down with the one and only Ben Shapiro to have a real conversation about work, about building wealth, and what it means to pursue the American dream in 2024 and beyond. And the interview will be available Tuesday, October 15th in the Ramsey Network app.
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So don't miss that. October 15th, Ramsey Network app, be there or be square.
You know why they say that, Jade? Because uncool people are squares. And so the way I heard is because you're not around.
So you'll be square. All right.
There's my dad joke. We're moving on to Eric in Boise.
What's going on, Eric?

Hi, Jade. Hey, George.

Thank you so much for taking my call. Sure.
How can we help? Yeah. So the situation we're in, I'm in Boise, Idaho.
I was a baby step seven, I guess, grad and purchased a home and paid it off awesome and uh yeah i'm in uh i'm 31 my wife's 33 wow and uh you guys are super weird yeah we love you're definitely very weird um and we're we're having our first baby and uh so we decided to move into a home that was a little bit bigger and had a little bit more

land to it. Cash on that one too, or there's a mortgage? Well, so what we did is we took a

mortgage in order to just to get the home because we didn't want to do a contingent offer because

it was pretty competitive here. So our plan is, is we're now currently selling our previous home

Thank you. a contingent offer because it was pretty competitive here so our plan is we're now currently selling our previous home and then we're going to take all that money and roll it into the mortgage and get it out of the way.
So it'll be a very temporary mortgage. Once you sell you'll pay off the mortgage and move on.
Exactly. That is our strategy.
That's what we're doing. So what we have found out, we've had our helm on the market, I think for two weeks, three weeks now.
And we've had a couple of people who are interested and our realtors told us that they've come back and asked us if we would be interested or would offer a owner financing or owner carry loans.

And I was just curious from the Ramsey Solutions perspective, are there any terms and conditions where that would be a wise thing to do or is it just a hard, no, we're not going to, we shouldn't be considering. I'll tell you on the seller side, if you're the one taking on the risk, you're going to loan these people however much? You know, what are we talking, $300,000? Well, that's what I've asked our realtor, what are the terms or what have they been asking for? And he said, really, it's just kind of up to us for what we would say, what we would be willing to offer.
And they're trying to do this to save on interest rates right now? What's the upside for them? That would be, I don't have those details. I'd be curious about that.
From what I've read into it a little bit, it sounds like usually people who are looking into owner carry loans are individuals who can't get approved for a loan from a bank. And that's a red flag for me.
That's the only red flag I need. If they didn't qualify for traditional financing, it's a hard no for me.
And even then, personally, the Camel family would not be willing to take on that risk of someone owing us hundreds of thousands of dollars, because if they default, you've got to foreclose on that home. So all the risk is on you instead of the lender.
Yeah, I see. Yeah.
And that's where I was thinking where if because we own the home, is it if we were able to create some terms where we could say, hey, we want a larger down payment. So because I mean, the idea behind us selling this home is that we want to get rid of our mortgage.
So we don't want to carry that any longer. And then having a short term loan, something like five years or whatever.
And you still, I guess, in that case would have the, you know, like a bank, you own the home, and if they don't pay it off, you get the home back. Can you give us real numbers? What's the house worth? Like, what are you selling it for so that we know what the loan would be? Because if there's a couple of things that don't make sense to me, and I'll tell you what they are, and then if you explain it, maybe you can help.
But I'm thinking, okay, these people weren't approved for normal financing. Normal financing is typically a 15 or 30-year mortgage, right? You put 5% down, whatever.
And then you're talking about them having to put more down and having a shorter term. Like you said, a five-year term.
So I'm trying to understand why you feel they would be able to do one that is far less conventional over the other which is far more conventional i guess well yeah that's exactly like i i would be looking in in the term so the home we're asked the asking price right now is 369 000 uh-huh um and so for us i wouldn't be comfortable with like a zero down, one percent down, two percent. What do you want down? I mean, I would say probably at a minimum 30, 40 percent down.
Do you think or do you know that they would have that money? I have not heard whether they would be willing to do that or not. My assumption is probably not.
Yeah. If they would, you know, if they went through a bank bank they'd be able to do something like you said anywhere between five to twenty percent um and so i haven't heard any kind of terms along those lines but in my interest that's where i would ask for a larger down payment shorter terms and so that's where i would think that it would be less risky on our end well here's the thing the thing.
Here's the thing. You're not desperate.
And I think that if you were in a situation where there was desperation or even in a non-desperate situation, if we were talking about a buyer and you knew this to be true and maybe it was like your brother, I don't know. There could be a situation where you might consider this, but you're not desperate.
The house is paid off. You're not floating two mortgages right now.
I mean, George. Well, and the other piece of this, Eric, you got to realize the opportunity cost of you not selling the house, taking that money and paying off your mortgage or investing it.
Yeah. And so there's a lot of things that I don't think we've totally thought through.
And I would also go, are there other buyers that are just going to go through traditional financing? Because there's not really upside here for you. Yeah.
Because that's where I was thinking the terms that I would consider it an upside would probably be shorter loan period, higher interest rates than what a bank would be offering, higher down payments. And that's where I would look at if I was a buyer, why would I take that? Why would you ever do that? Yeah.
And you're not going to give them a lower interest rate than they would get on a traditional mortgage. That wouldn't make sense for you to take on that risk.
And at that point, that worries me that they'd even be willing to take that deal. Yeah.
Typically, this would be something that you would do maybe between, I mean, and I'm not recommending this by any means, but maybe it'd be something you do between friends or family where you're trying to, the intent is to give them a better deal. Maybe it's family property or something.
If you're the one buying the property and they wanted to do owner financing, then we would go, okay, well, the risk isn't on you. And as long as you're getting a deal out of this, then go for it.
But I just don't see enough green flags here to move forward. I would wait and find a buyer who's willing to go the traditional route.
Yeah. Yeah.
Okay.

Yeah.

That makes total sense.

That kind of gives me, that was kind of my gut feeling towards it.

And yeah, that definitely helped kind of clarify and give me a clear picture on what it, because the only thing I would really be taking is probably a deal that somebody else wouldn't

want to take anyway.

That's right.

We can be generous in other ways.

Let's not do that with this many zeros on the end and put your financial future at risk. And I love this quote, the person with the most patience, information, and options wins.
And you guys are in a place where you're not desperate. You've done things the right way.
And so let's just move slow. And when the offer is right, you're going to say confidently yes, instead of a, should we do this? I don't know.
It could be risky. Thanks for the call, Eric.
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It's free at netsuite.com slash ramsey. Welcome back to the Ramsey Show.
I'm George Campbell joined by Jade Warshaw. Open phones at 888-825-5225.
Jessica's up next in Nashville, Tennessee, right up the road. What's going on, Jessica? Hi, thank you so much for taking my call.
Sure. How can we help today? So me and my husband recently started listening to the podcast and really getting into finances, and we only have about $2,000 left on our credit card, which will be done within the end of the year.
We're looking at our student loans, and we just don't know what to do. Mine are all kind of like little tiny, like 2,000, 3,000 loans, whereas his is like a giant $45,000 loan and we don't know if there's a difference in who we should tackle first.
Okay. Well, I love number one that you guys are kind of on this road together.
You've decided it's important for you both to pay off the debt and you've decided that it's important to work together. So kudos to that.
For this, it really is just the methodology of the debt snowball. And all that is, is we list all the debt between the both of you in order from smallest to largest based on balance.
So not payment amount, not interest amount, but by balance. So right now you're kind of already doing that.
You've got $2,000 left on this credit card. And then what you do with these student loans is you both pull up your screen of your provider and you go through smallest to largest.
Like you said, yours are busted up in little bitty guys. And so you list those smallest to largest.
And the same thing with his. Is his a federal loan or a private loan? It's a federal.
Okay. And it's just one, right? Because sometimes you make one payment, but when you really go in there and look, it's still listed by semester.
No, he had one loan that was going to go into collections and they told him that he had a consolidate. Got you.
So it's just one giant federal loan now. Okay.
Got you. So that's going to be the final one that you pay.
But the good news is because you've worked the snowball, you will have gotten back all those little bits and pieces of payments. So you'll be able to hit it with a big shovel.
What's the combined amount that you have in student loans? I have about 65. 65 and he's got 45? Yes.
Okay. And then what's you guys' combined income? $100,000.
Okay. So you've got a little bit of a journey here.
You know, you've got $112,000 to pay off and you're making $100,000. Have you jumped onto EveryDollar? Because we have a really great financial roadmap that you can plug in all your numbers and kind of project what your payoff date is going to be.
And then you can project when you'll be on baby step three and how long that'll take. Have you done that yet? We are on my every dollar fee premium expires today.
Actually, we just sat down last night and finally put all the numbers in there. You didn't pay for it yet, did you? No, sir.
This feels like a plant, Jessica. Did you call in on the day of the expiration hoping we'd give you every dollar? I promise I didn't.
I just happened to look before I called and noticed. It's fine.
Either way, we're going to give it to you. Yeah, we're going to give it to you.
We're going to give it to you. So hang on the line after we're done and we'll help with that.
And what I love about every dollar at the bottom, you're going to list those debts with the minimum payment, with the balance, and it will list them all for you, smallest to largest. And it's a great way to keep track of how much extra you're putting on that

little one and when it'll be paid off. So that's going to be a big help.
But it really is,

I think, psychologically motivating to see the little ones get knocked out.

And I know you're going to get to that big one and go like, oh gosh, we're in it now,

$45,000 ahead of us. But you're probably also going to be making more money a year from now

than you are, right? Yeah, hopefully. Are you guys doing any side hustles or anything to supplement that hundred thousand he does he does a lot of side projects on the weekends that probably bring about 400 in oh 400 a month every oh 800 a month yes okay great okay good so yeah i my recommendation i think that if you debt, and this is not just for you, but anybody has debt, they need to be bringing in anywhere between five and 2,000 extra dollars.
That for me is the- 500 to 2,000. Yeah, at least 5,000.
But if you can get to 2,000, you're swinging for the fences. 500.
Okay. Yeah, I like that plan.
And Jessica, the fun part for me, and maybe I'm a math nerd, I go, okay, how little can we live off of out of this $110,000? And that might mean we pause investing. It should mean that.
If you guys are currently investing, let's pause that to get some money back on our budget. And then with our take-home pay, we go, all right, it takes us $2,000 to cover all of our basic bills.
That should free up another $2,000 of our $4,000 take-home pay to tackle the debt. And now you kind of know the gap.
Because if you do the math right now, how long is it going to take you to get out of debt at the current pace? Probably about 15 to 20 years. That sucks.
Can we agree? 15? Wait a second. She's saying if she makes minimum payments on all the debt.
Oh, minimum payments. Okay, okay, okay.
But now with Jessica's current plan, it's probably more like four or five years. I think so.
And the Jade and George plan is like, how do we do this in two years? Maybe two and a half. And that means there's a gap.
All right, instead of throwing $1,000 of the debt, we got to throw $2,000. Yeah.
And here's what we're going to cut. And that's where the budget is going to be your best friend and show you the reality of where you're spending and where what can go.
And here's a couple of freebies. I mean, are you guys getting a tax return every year? It's only like $200, $300.
$200, $300. Okay.
I mean, you can look at that and see if you can get it down. Probably not.
That's pretty close. What about investing? Are you doing any investing? I only do the match my company does into my 401k.
Okay, how much is that every month? It's 4%, but I just started a new employer, so it hasn't even begun yet because I have to be there for three months. Okay, perfect.
So let's just not start that because that's going to free up hundreds of dollars that could be going toward debt. And I promise you, we'll get back to investing with a vengeance later on.

But what happens for most people, Jessica,

is they go, well, I want the match

and therefore I'm willing to stay into debt longer

and I'm kind of comfortable here.

And then they do three or 4% for 10 to 15 years.

That's right.

I'd rather see you do 15% two years from now.

That's right.

Next category,

because I'm just trying to help you find money.

I want this to happen fast.

What do you spend every month on going out to eat? We have a budget of $50. Okay, good.
What about groceries? It's just the two of you? It is. My husband, he's like a gym guy, so our budget is about $800.
Okay, that's not bad. You might be able to do it a little less, but that's not bad, $800 for two folks.
Get that like the boneless chicken thighs from Aldi. You stock up on those.
That's plenty of protein. I don't know about a chicken thigh, George.
Well, yeah, she's not dabbling in that world. I'm a big gym rat myself, Jade, if you can tell.
I could tell by your bulging biceps. But I do watch a lot of videos about protein for some reason.
I don't know. I'm very intrigued by the lifestyle, Jessica.
But the point here, Jessica, is we're going through the budget with a fine tooth comb. And this is, like I said, for anybody listening, withholding is a great place to start investing.
Look at that food budget. Cars.
A lot of times people's opportunity is sitting in their driveway. So tell us about your vehicles.
My husband's in the 2012 completely paid off. Okay.
And then mine was gifted to me by my father. So I actually don't pay for it.
Okay. So that's paid off too.
Yeah. So 2018 Toyota.
Okay. Good.
Another thing that's really, people don't think about is insurance. Across the board, re-shopping insurance.
If you go to ramsysolutions.com slash checkup, we have a great coverage checkup. It'll take you just a few minutes to do the quiz.
And I helped a friend here actually reach out to Xander. They re-shopped their insurance and they had better coverage while saving 80 bucks a month.
Nice. 80 bucks back in the budget.
So just doing something like that, with homeowners, auto, across the board, could save you 100 bucks, 200 bucks a month. Yeah.
And then there's the utility type stuff. You can go in, call your cell phone provider and say, Hey, are you offering any deals? If you still have cable and baby step two.
Yeah. What are you guys paying for your cell phone bill? I'm sorry.
Can you repeat that? What are you paying for your cell phone bill? So right now ours is separate because I do own my phone and that should be knocked out by the end of the year. But mine is $87 a month, and his is $60.
But we plan on going to Mint Mobile, where it's like $30 a month. I was going to say, Tello has been a great sponsor of the YouTube channel, and they're $25 a month for unlimited.
You can't beat it. You can't beat it.
Which is incredible. So that's a big savings.
Some people are just paying like $120 a month for their phone plan, not even including the phone. So just some ideas, Jessica.
Along with EveryDollar, I'm going to send you my book, Breaking Free from Broke. I want you to specifically read the Margin is Breathing Room chapter.
In there, I lay out a bunch of the ideas that Jade and I threw out and many more just to get you going, because we're pumped for you guys to become debt-free. Do you feel like it's closer just on this call? Yes.
I mean, we also made progress. We started with about $16,000 in credit card debt, and we're down to maybe $2,000, $3,000.
I think it's $2,400. So thank you guys so much.
This was really helpful. Love to hear that.
And you're right down the road in Nashville, so come see us for your debt-free scream. Looking forward to meeting you guys and celebrating in person.
Hang on the line. We're going to send you every dollar premium and my book, Breaking Free from Broke.
Hope those resources help you along the way. More of your calls coming up.
This is The Ramsey Show. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all.
I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys.
I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.
And I immediately went and got term life insurance. That's a gut punch.
For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. And 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.
Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable i've used them personally for 25 years they're the only people i trust go to zander.com or call 800-356-4282 welcome back to the ramsey show i'm george camill joined by jade warshaw open phones at 888-825-5225.
We just took a call from our friend Jessica, and we were walking through mentally kind of all the budget line items, helping her find some margin. And if you're wondering about this app that we're talking about called EveryDollar, it is an app that our team created here because, frankly, we were tired of seeing all these other apps not doing a great job and not allowing you to create a zero based budget where every single dollar has a job, has a name.
And so we created one a decade ago and it just keeps getting better every single day, every single year. So if you want to check it out, it's totally free in the app store or Google play, or you can click the link in the description if you're listening on YouTube or podcast.
And I'm telling you, this is the plan that is underpinning all of the baby steps. It is the budget.
It's the way that Jade and her husband got out of hundreds and hundreds of thousand dollars of debt. It's the same way I went from broke to millionaire.
It's every month, make a plan before the month begins, stick to it. It's that simple and it's that hard, but it is so worth it.
So go check out Every Dollar in your app store. All right.
Daniel is in Boston. Up next, what's going on, Daniel? Hey, how's it going? Thank you guys for taking my call.
Sure. What's going on? All right.
So I have, I'm on baby step number two right now. And my biggest question is if I should sell my car or sell both the cars that we have.
We are about, so I just got married last year. We just had a baby.
Main reason why we want to get out of debt is to get a house, but we are $55,000 in debt. $20,000 is the cars, $8,000 is student loan, and the rest is credit cards.
Okay. The car that I'm looking to sell is a two-door car, so it's a little hard to use with a baby.
I owe about $12,000 on it, and Kelly Blue Book is saying it's about worth $14,000 to $14,500 average price. Good.
I've listed it before a couple times before we even had the baby. I just never had good luck selling it, mainly because I didn't have the title.
So my biggest question was wondering if I should get a separate loan to pay off the car and then sell the car and then pay off that loan that I took out, or am I overthinking this? Well, the simpler way is you do this all in one transaction. So you go to whoever holds the title and you conduct the transaction there.
Because not that there's, you know, you don't have a clean title. I mean, you just got to pay the loan off to get the title.
And therefore, you need that person's payment in order to do it. Which is totally normal on private sale.
Right. Yeah.
There's a lot of people that I've seen didn't really, I guess, trust. It's because they've never done it before.
Yeah. Okay.
That's where I was in like wondering if I should, you know, get a loan for it. And same thing with the other car.
I mean, it's one of my biggest payments. It's about, it's a two cars.
It's about $850 a month. Ooh.
What do you owe on it? So the other car, the Camry, I owe $8,000 on that one.

Okay, what's it worth?

And that one's worth about $14,000 is the average.

And the payment's $850?

Is that the total?

That's the total for both cars.

The Camry is $438.

The two-door car is $413.

Okay, so they're pretty equal.

But the good news is for the Camry, you'd get more money back off the sale. For you, what do you do? Are you going to be a one-car family? What's the plan after you liquidate one or both of these? Right, so we definitely both need the cars.
She usually drives to clients' house. I drive to work.
It's just my car was the one that we wanted to sell the most to get at least a car that has four doors. Sure.
Just to make it a little bit easier for the baby and also doing groceries. Cause usually her car is the family car at this point.
So that was the whole point. And also we honestly never realized how much debt we had until like the first year of marriage.
So getting everything, you know, looking at all the debts and seeing what we can eliminate, what we should be better at with our money. And we just thought this was, you know, because it's the biggest expense that we have besides our rent.
I like the idea of you selling the smaller car. You know, if you clear 2000, I also wonder, I mean, I don't know how long you had it listed or what sites you had it listed on how long how long did you have it listed before you pulled it I'd say so I listed it twice and I had it probably for that duration like a month two months okay that's not too too long but it does make me wonder if it I don't know if all the feedback was you don't have the title you don't have the title but it might make me wonder if it, I don't know if all the feedback was, you don't have the title, you don't have the title, but it might make me wonder about the price, if it's accurate or not, if you're not getting any bites.
So just put it out there again and ask people for their feedback so that you know what's going on. Is it the price that's the issue? Or is it really the fact that you don't have the title? And you can contact, you know, the different dealerships out there and see who'll give you what and some of these online car sellers as well and see maybe some of them out there back in the day, Jade, were giving people crazy top dollar.
That's slowed down, but you still might get a pretty decent deal to get out of this thing. What's your household income? So right now we both, I actually got a raise.
I got a new job. We're about 95 now.
Okay. And what's the 20...
So you got about $27,000 in credit card debt? I do. Yeah, it's about a little bit of hers and mine.
Yeah. Combined.
Okay. Because making 95 and looking at your total debt load, I mean, if you wanted to keep the cars and you were gazelle intense, you could just go ahead and plow through it in the debt snowball and keep the cars.
But it sounds like you don't really want this two-door car anyways. Yeah, it's a big hassle.
And actually, I did get an offer from CarMax, which was $10,000. I don't think I was supposed to see this, but they said they were going to list it for $18,000.
Yeah,8,000. Yeah, they're about to make some bank off of that.
Trying to take you for a ride. Well, you owe $12,000, so I don't like the idea of you kind of going underwater for this deal.
So I would hold and see what you can get for it. Top dollar.
Clean it up nice. Take real good photos.
List it on all the major places. Facebook Marketplace, Craigslist, AutoTrader, you name it.
Okay, cool. Sound good? All right, you're on the right track.
I feel for my Bostonians out there. Yeah, it's tough.
All right, let's go to Juliet in Winston-Salem, North Carolina. What's going on, Juliet? Hi, George and Jade.
My husband and I are having a little bit of a disagreement and was hoping that you could help sort it out. Yes, we love getting in the middle of marital disputes.
Do you want to be right? Are you hoping you win? I think there's an argument where we could both be right. I like it.
I like it. Is he there? We are on baby steps four, five, and six.
We raced through two and three in the last few months, thanks to your book, George.

Oh, awesome.

Love to hear that.

Congrats.

You guys did the work.

You busted it.

So the dilemma is we have been trying to have a baby.

It hasn't happened.

He wants to keep going through with stork mode, and I would rather put more towards paying off the house investing.

So you're not pregnant yet?

I am not. But he's considering it stork mode.
Did I hear that right? yeah i we are a single income family with myself working actually um and i think he's concerned that I could get laid off or something else happens and then we're having to cover daycare and I hold the health insurance for us. Technically, stork mode is kind of reserved for baby steps two and three.
You guys have an emergency fund. How much is in there? We have around $40,000 in an emergency fund.
You're sitting pretty. Which is more than six months.
And that's more than your out-of-pocket max on your health insurance. It is.
So I don't know what we're saving for at this point. I think he would love to be able to have all of daycare saved up.
We don't need to fund a year of daycare in our emergency fund this guy i i listen i love the sentiment he's thinking if i can get ahead i'll get it like you know the people who like pay their utilities years in advance and they pay everything up um yeah i think if he's listening or let him listen to this call later again stork mode and for those listening who are new it's just the idea that if you know you have a baby on the way, but you're actively paying off debt, if you're in baby step two, you pause that intensity and you stack up money so that you have it when baby comes. But in you guys's case, you're out of baby step two, you've got 40 grand saved.
Yeah. You should be investing 15% of your income and anything above and beyond that.
If you want to make extra home payments, you can. Now, if you're saving up for some sort of fertility, you can also do that on

the side, but you guys are doing well. Yeah.
And if, if, and when you do get pregnant, then we can

say, all right, or you do get laid off, then we need to pause and go, this is a storm. That's

right. Let's pause and save up cash because you were laid off, but you guys are going to be just

fine. And I hope you get that little baby here real soon.
That'd be awesome. Good luck to you.
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That's betterhelp, H-E-L-P dot com slash Deloney. Welcome back to The Ramsey Show.
I'm George Campbell, joined by Jade Warshaw. If you didn't know, we've got a Ramsey Network app where you can tune into all of the shows, distraction-free, including this show.
All three hours are in the app. And we also have a place where you can ask questions and we'll occasionally answer those on air.
So this one is from Dylan from the Ramsey Network app. What does he have to say, Jade? Yeah, he says, my fiance has college grants and scholarships, which she won't qualify for both our incomes.
Okay. Should we wait to get married so she can graduate debt free? Wow.
That's very interesting. What an intersection of love and money.
I want to know more. I want to know what the time frame is.
Are we talking six months? Are we talking four years? I want to know more about this. My thought.
Can we cash flow? If we don't get the grants and scholarships can we still cash flow yes and avoid debt i mean there's part of this where i go okay i'm thinking traditional college student so maybe she's what 18 19 going in uh i don't know george i feel like we need more information'm going to say if it's a year to postpone it, maybe.

And I want to know how much school is.

When did you plan on getting married?

Were you going to wait for her to graduate anyway?

Yeah, yeah.

So many questions, so little answers.

So little answers.

I can't answer this in good faith and really know what's going on.

And how much would we be?

Are we talking $100,000?

Right, or are we talking $40,000? I don't't know can you even go to school for forty thousand um it's an interesting one though dylan i don't think there's a straight answer here yeah absolutely you should wait or absolutely don't wait and just cash flow it but dylan call in i want to know more about this i know and i does it have to be for the entire four years or are we talking talking semester by semester? Maybe you take it semester by semester and go, okay, you know, she starts, okay, it's about to be November. So the new semester comes up here after Christmas break.
Maybe she does that one and you guys reassess. And go, can we cash flow the rest and just combine incomes and get married? And we've got it from here.
So that would kind of be my thing is how can we put ourselves in a position to not need the grants and scholarships if we're itching to get that wedding and get married yeah well either way either way we don't go into debt i think that's the key point coming out of here um debt's not on the table and if that if it means you have to wait a little bit that might be the the question the the solution all right we got some more was good good question though all right it was all right we need more details let's go to todd in phoenix who we can actually talk to that's nice todd what is happening with you hi uh we're my wife and i we've been kind of going back and forth on selling our home to pay off debt. I've been kind of an idiot the last few years.

We can all say that at some point in our lives. Thank you for having the self-awareness.
Yes. Hold money out and, you know, build a pool and do some things we probably didn't need to do.
And, you know, we, I guess the issue, we pay our bills, we eat, we live, you know, pretty normal lives, but it's gotten tighter and tighter and it feels like we're not really moving at all, kind of just spinning our wheels. And so...
What's your household income? About 170. And how much consumer debt do you have? Everything but the mortgage.
About 182. Okay.
Yeah, you're feeling it. What kind of debt? So tell us, can you break down that 182? And by the way, does that include the mortgage? Yeah.
No. It doesn't.
Okay. Can you break it down for us? So we did a HELOC for 60 and built a pool and actually paid off some debt with that, which we then kind of racked up again.
Another personal loan for about 57. I've got a car loan that's got 17 on,000 on it.
What was the personal loan for? Is it $57,000 or $5,700? $57,000. Okay, what was that for? Really stupid.
I outsmart myself from time to time and I thought, okay, I'm going to do this personal loan and we're going to pay off debt. We paid off both of our cars and used it what I thought was kind of the right way, but then have since just kind of racked up money in other areas.
Okay. So you took on debt to pay off other debt while changing zero habits and you were right back to where you were.
That's a cautionary tale for anybody listening. We talk about that all the time.
So you're teaching a lot of people. Thank you, Todd, for being transparent.
What else do you have? So the $57,000 personal loan, what's next?

uh well i've got the now i have another car loan now for 17

uh about 20 grand in credit card debt and then 28 and like i did a debt consolidation kind of thing

to get rid of uh it's kind kind of thing to get rid of,

uh, it's kind of same, same thing. Get rid of credit cards.
Man. Okay.
Transferred to zero, you know, 0%. Are we done playing the game? You think like, are you, you're like, all right, I'm not going to move debt around to other debt.
I want a way out. So what are you thinking about doing? Well, so it was debating selling out.
Like, uh, my wife is not, not on board. Uh, you wanted to sell the house possibly selling our house to pay off, pay off debt, but it wouldn't, it wouldn't pay off everything.
But do you want to know why I don't like that for you? Do you want to know why I don't like that for you? Cause it's the why i don't like that for you because it's the same thing you've been doing it's another one of todd schemes todd shortcuts and i think yeah and don't get me wrong um when people get a great opportunity maybe they get a large sum of money they get an inheritance they get a large bonus or they were going to move anyway and it ends up clearing their debt i'm happy them. But you have laid out a very long pattern of the same behavior and I'm not getting onto you for it.
I'm just telling you what I see based on what you said. And I'm worried because the worst thing ever, Todd, would be that you sell your house even when your wife didn't want to and you wind up in debt again.
So for you, walking through the, because I always tell people when you walk through the baby steps, right, George, that is the opportunity for you to change your habits because it's built in. You can't get out of the baby steps without changing your habits is automatic almost.
And so I, as, as painful and as tough as it can be, I would prescribe if I were the person writing the prescription that you walk through the baby steps and you do this the old fashioned way. Okay.
And we've done that before. I mean, we, we have, we have been relatively debt, I said, minus a car payment or something, you know, we've paid off credit cards before we've paid, you know, but you've never been completely debt free while you've been married.
No, no. I mean, when we first bought our house, the only thing we had was the house and a car loan.
Is your wife on, is she on board to do the baby steps? Because I think what you're going to have to go back to her and say is, all right, fine, we won't sell the house, but we're going to have to sacrifice like crazy. No, she's much more responsible than I am.
Okay. I was going to ask who's the spender.
It's me and she doesn't insist on anything. She doesn't ask for, you know, to do any of the things that I come up with.
It's mostly like, so she's been a passive passenger for all of your schemes. Yeah.
She never, she never tells me now. Not even a disd look i don't i don't think my wife would allow me to do all this and not like have a blow-up argument yelling at me how has she been totally cool with all of this i think we i mean we we pay our bill like you wouldn't you know she doesn't feel like looking in we pay our bills we on anything in, you know, 20 years.
So everything is comfortable, but it's less comfortable. And that's what I want to warn you about, Todd, going into this.
It's George and I see both sides of this all the time. When people call in and their income is low and they've got to go out and hustle and grind to get the money, it's almost easier for them to do what we teach than a person like you who has a great income and you're going to have to downsize.
And kind of what you just said before, like the debt didn't really show. We were able to cover it up and make the payments on time.
When you get out of debt, I'm just letting you know right now it shows and it's going to show. And that same part of you that kind of liked being able to show off with the money and the pool and doing all those things.
I'm talking to you because I recognize myself in what you're saying. That same part of you that liked showing that, that's going to be the part that hurts the most when you show the opposite, which is we're downsizing our cars and we're downsizing and we're selling things and we don't go out as much.
And I don't buy the things that I used to buy. Your family's going to see it.
Your friends are going to see it. You're going to feel it.
And that's just part of the process. Don't let that deter you.
That's how you know it's working. That's how you know the medicine's getting in.
That's right. So let's get to work.
I mean, 60K a year thrown at this debt. Three years, it's all gone.
Making 170. How do we find that margin? We need to make more.
We need to spend less. Let's get to it.
Thanks for the call, Todd. That puts this hour of the Ramsey Show in the books.
Thank you to Jade Warshaw, all the folks in the booth, and you, America. We'll be back before you know it.
From the Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey Personality, George Camel, joined by the one and only Jade Warshaw.
We're taking your calls, open phones, 888-825-5225. That's the number to call.
We'll try to help you take the right next step for your life and your money. Kate is going to kick us off this hour in Raleigh, North Carolina.
Kate, welcome to the show. Hi, thank you guys for taking my call.
I'm so grateful to be able to speak with you both. We're happy to help.
What's going on in your world? Okay, so my husband and I own an investment property, and we have a tenant that's gradually falling farther and farther kind of behind. We're also in baby step two.
She's almost current right now, and we want to be gracious landlords and give her, you know, as much grace as we can. But at the same time, we know that when she moves out, we're going to need probably $10,000 to put into the house to get it ready to rent to the next tenant.
So we're trying to navigate how to help her if we can to stay so that we don't have to pay that $10,000 while we're still in baby step two, but also help her not dig herself deeper into a hole that she can't get out of. When's the lease up? So actually October 31st, and it goes into a month-to-month term after that.
So we need to give her 30 days notice at any point that we want to terminate okay how much debt do you guys have so we have about 60,000 um we're like in gazelle intense mode right now so we should have that paid off by March if everything stays according to plan and do you own your house do you live in a house we yes we do. And the $60,000 is not including our mortgage or the mortgage on the rental property.
What's the mortgage on your house? Right now we owe about $200,000. And what's the mortgage on the rental? About $100,000.
What's the rental worth? Probably $250, What's your household income? About $175. Is that with the rental income? Or I guess right now there isn't a lot of rental income.
Correct, yeah. Including the rental income, yes.
How much was this rental bringing in in its heyday when the tenant was paying? So we net about $500 in profit a month. It rents for $1,500, and the mortgage and HOA is about $1,000.
So we get about $500 a month in profit on it. Well, it's less than that because you got maintenance and repairs.
You just told me you got $10,000 of work to do on it too. Right, yes.
So you're losing money on it currently. That's not every year.
We've only owned it for about four years, and so we haven't had any major repairs that we've needed to make to it yet, but we know that we're going to need at least paint, carpet, and a couple repairs whenever she moves out. How long has she been in? She's been in one year.
Okay, so the whole year she's just struggled. What's the story? When you talk to her, what's going on? So it's been a different story every month since May, which is what really has our antenna up.
Yeah, so we want, like I said, we want to be gracious and give her the benefit of the doubt. But every month it's been, I'm having a problem with my bank, or I'm traveling out of town, or something just keeps coming up.
And right now she only owes about $275. What does the lease agreement say? The lease agreement says we can give her 30 days notice at any time for any reason now that the lease is going to be up at the end of October.
We could, I mean, file court paperwork. Like I said, right now, she only owes $275.
So I don't really want to, I don't want her to damage the house on the way out. No, but I think you could just say, Hey, you know, it's 275.
I, this doesn't seem to be working out for either of us. So when the lease is up, you know, it feels like this is too expensive for you.
And I think the way you lay that out, because I definitely wouldn't want to renew a lease with someone who's not paying. Yeah, I would find a new tenant ASAP.
And you're not kicking her out. The lease is up.
And as long as you give her the, you know, the days. Is there anything in the agreement about her not paying and what happens if she doesn't pay? Well, I mean, we have the right to take her

to court and pursue eviction filings and all of that. I wouldn't do all that.
Yeah, I don't want to. Yeah, I'd get her current and then say October 31st, you got 30 days.
Right. My concern is that she can't afford to move and she can't afford to save up for another security deposit.
So she just stays and doesn't pay the rent okay well yeah but you can't you can't worry about something that you don't know is is or is not going to happen right like let's not play that let's not assume we know what will happen if you just remind her hey just a reminder your lease is up the 31st I want to talk about that and then you guys talk talk in person not via email or letter or any like that anything like that talk in person and say hey this has been a problem you know um we love you or we like having you here but it's clearly too expensive for you so for that reason you know and maybe i don't know i'm not a realtor and i'm not a landlord but maybe you offer an olive branch and say hey you owe 275 you're going to need some to move. So we're willing to waive that.
Do what you have to do to make this a clean break. Because I think to your point, if she's the type of person where you are worried about her damaging the house when she leaves, that lets you know, OK, this is not somebody you want to be in bed with much longer, right? Yeah, and I don't think that she would do anything intentionally.
I just, I'm concerned that she's going to stay longer than she needs to. And so we're not only going to not have rent coming in, but we also are going to have that expense.
And you might have to, listen, you might go through that. That is part of renting is every once in a while you get a dud.
But you need to remember, you're not running a charity. Yeah, this is a business.
And so I think it's great to be kind. You're not being a cruel landlord.
You don't make the payments. You can't afford this.
And you can't let that fall on you because she can't rent somewhere else. She can.
And if that might mean she gets a roommate, I had to get a roommate. I never could live alone up until I got married and so that's up to her

to figure out what's next you did the due diligence of giving her 30 days which is what was in the contract she signed and so I think you need to be firm and you seem like a real sweet person I don't want her to walk all over you when she sees that she can okay is your husband a part of this too? He is, yeah. He's, he's more, um, give her notice and get her out.
Yeah. He's in, he's in my boat.
Yeah. And I mean, I'm not, I'm not against that either.
I just, um, you've been very kind so far. Nothing here feels like you've been a greedy landlord who's a big jerk, but I do think you need to move on, find another tenant.
And you may even want to consider selling this property. I was going to say that was my next move.
Because y'all are broke. Your tenants are broke.
I think we might get a fresh slate if we sell this thing, use it to pay off our debt, use it to pay down our mortgage. And then later on in life, we can become landlords again when we're at a much more peaceful place financially.
Yeah. Because if you sell this, you're out of debt.
You've got three to six months of expenses there. And you might have another 10,000 or so left to do something else with.
I love that. I don't know that it's worth the five grand a year you're making off of this.
Okay. Because think about this, you had a paid for property making $1,500 a month.
That's a different number. But for all this hassle to make six grand minus expenses, repairs, maintenance, I don't know that I would do it, especially while I'm in debt.
Yeah. Why grind it out and have a tenant who's not paying when you can just go, you know what, I'm washing my hands of all of this.
And that's a great way to get her out. Say, hey, we're actually going to sell the property.
You got 30 days. Okay.
I like it. That's an easy out right there, Kate.
That's what I would personally do in your shoes, but I'm not going to force you to sell your property if you love it. But right now, it's not the blessing that it seemed to be when I saw the TikTok video about becoming a real estate guru.
I know. This is the reality of being a landlord.
Yeah. It can be a real blessing.
You were tough, George. You were tough.
I was trying to give her back the 275. You don't want to mess with landlord George.
I was trying to be nice. Not today.
Which is a rarity. Good cop, bad cop.
This is The Ramsey Show. All right, Dave, you have some strong opinions.
Possibly, yeah. I think so.
Okay, because you really prefer credit unions over big banks. So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the the customers own the credit union.
So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing.
But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric.
Yes. Well, and I think we have found one that is incredible, and that's Fairwinds.
They are an incredible credit union that is really out with the heart to help the customer. You know, that's why we're partnering with them, because they've got a scope to be able to handle the Ramsey audience, and they're the right kind of people with the right kind of values.
And they've done a really, really good job with customer service. And the deals that they're offering, the Ramsey tribe is incredible.
Yeah, absolutely. And you're right.
Their customer service is unbelievable. Winston and I just signed up and we got an account.
And I'm not kidding. It took less than five minutes.
It was so user-friendly. The step-by-step approach was unbelievable.
And then the next day, my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer.
And so again, they just really care about your experience. And I so, so appreciate that.
So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy. Plus anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app.
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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
Claire is up next in Raleigh, North Carolina. Claire, how can we help today? Hey, I was calling because my husband and I are working through the baby steps.
We just were about to finish baby step two, paying off our debt this month. And we are, I'm pregnant with our first child right now.
All right. When's the due date? Yeah.
So our due date's March 5th. So I'm halfway through.
Yeah. Congrats.
Thank you. But we are going to finish paying off our debt this month and we have the thousand dollar emergency fund.
I currently drive a Honda sedan and a lot of people have been telling me that I should get a minivan because it's safer for the baby. So between now and the due date, we can save up about $4,000 or $5,000.
And with selling my car, we could buy a used minivan, or we could build up our starter emergency fund up to about $5,000 or $6,000.

So my question is, which one of those do you think should be the priority before having the baby?

Which one do you think should be the priority, regardless of what everyone around you thinks,

because they're so smart and they pay your bills?

What do you think you should do?

I'm not sure, because the plan is for me to stay home with the baby. So it'll be the first time that we're living off of just one income.
So that, like building up the emergency fund for that seems to make sense to me, but I also don't want to like get hit by a car on the highway and then my baby's not. Well, let's not have the fear mongering happen.
And guess what? A Honda sedan is plenty safe. Yeah.
And unless you're having triplets, there's no need to go out and buy a seven seater minivan just because people said it's a good idea. Clara, I'll let you cheat off my test.
The answer here is we do the emergency fund because you, A, the baby's coming and you're going to have to pay, you might have to pay something out of pocket, right? So we definitely want more than a thousand dollars there. You don't know how it will go.
I know that it will go safely, but you never know. And if you're staying at home, we're not going to be doing a ton of traveling other than to doctor's appointments.
That's right. Yeah, you're about to be locked down.
And I have a 13-month-old, and my wife stays home, and we upgraded her car not because we needed a safer, fancier car, but it was because mama wanted it and we had the cash and we saved up, but we were in a different, very different place. We were in baby step seven.
And so in the stage you're in, I would rather see you with a pile of cash to create some peace versus upgrading in car right now. Is the car reliable? It's running fine.
Yeah. Okay.
You're better. I mean, get a good car seat.
That's what I'll tell you. That's really the...
Invest in a good car seat. You do that and you'll be just fine.
Kudos to you though for looking at this the most economic way though. I love that you were like, we can buy a $5,000 van in cashflow as opposed to the ridiculousness of going out and trying to get payments.
So kudos to you on that. But I do believe that the emergency fund is more important.
It is more important. And ask anyone over, I don't know, over 60.
I mean, back in the day, you weren't getting a minivan just because you had a baby. We didn't even have seats.
I'm aging myself, but I don't even feel like I was wearing a seatbelt in the back of that Cadillac that my parents drove. It was uphill both ways, no seatbelt.
No seatbelt. We've come a long way with safety.
But also I think drivers have gotten crazier and stupider over time. Well, have you seen there's a meme going around that it's like basically people think that drivers today are, you know, dangerous because they're texting while driving.
But then in the meme, it's like, this is me in the 90s. And he's got the giant like CD book.
And he's flipping through the CD book while he's like driving and putting it in his six disc changer. That was me.
Simpler times. Simpler times.
All right, let's move on to Dimitri in Springfield, Missouri. What's going on, Dimitri? Hey, so quick question.
So I'm currently in Alaska. I already moved my family out to Missouri.
I'm moving to Missouri as well. So here I've been doing tile since I was 14 years old.
I got my own business since I was 18. I'm one of the bigger contractors here.
And I hate my job. My question, I'm a talker.
You know, I can talk anybody into buying anything. My question is when I move down to Springfield, should I continue with doing what I do and what I know how to do but hey or should I try to pursue doing something in sales or um I guess yeah summoning sales because I can I sell people on stuff all the time okay so you act like you've been doing you're like my whole life I've been in tile since I was 14 I'm 18 now I'm like okay so no i'm 20 i'm 24 okay so you've been doing this for a decade you're going i fell into the tile business don't love it i want to do something else i think sales is the skill set that i'm actually good at and that i enjoy correct yeah okay well in the you know you could just try to find a sales job i don don't know what the market is in Springfield.
I dropped out of school. The best news about sales, no one gives a rip about your degree.
It is, can you sell? True that. It sounds like you'd be a good interviewer.
So I would look for a sales job. And in the meantime, if you need to cover the bills, I would be doing tile because that's what you know how to do.
Yeah, that's a great side job, something you do on the weekends and projects that you do on your off time. But the goal is we do tile as little as possible and we start to get the boat close to the dock so we can go into sales.
And I think you'll do very well. How much were you making doing tile? My best year so far was almost $100,000.
Okay. So here's what I would be doing.
I'd be doing tile full-time sales on the side, and as I get better at sales and it starts to really pick up, I would do less and less tile until we've replaced that $100,000 with sales income. Especially because you've got a family, right? You have two kids and wife so it's we don't have as much risk tolerance as we did when we were 18 and single and so that's why i'm telling you i would find something that's stable consistent income is your wife working or she um just at home with the kids i once we got married i told her she's never gonna work a day in her life wow all.
You're the provider, Demetri. So I would find something you can do in Springfield.
And you might find a great sales job and go right into it. I don't know.
I hope you do. Okay.
But I'm going to send you... What's that? One more quick question.
For me to switch professions like that yeah i know it's scary and risky but on the back burner what if it does not work out do i just stick with what i know i mean it's nice to have it's nice to have something that you know makes you money right um but at the same time with sales i do think it could take a while

to get your footing under you i think what will happen is you'll just end up switching

industries yeah what you're selling might change but the skill set is there you're telling me

that's what you love and that's why i'm going to send you a copy of ken coleman's new book find the

work you're wired to do it comes with the get clear career assessment i think we need a little

more bones on this of i'm really good at selling okay selling what because i want you you're you're wired to do. It comes with the get clear career assessment.
I think we need a little bit more bones on this of I'm really good at selling. Okay.
Selling what? Cause I want you, you're, you're just going to hate what you do if you sell something you hate. And so that's where we need to dial in a little bit more, dig a little bit deeper.
And this resource is really going to help you. So stick on the line and we'll help you with that.
But this is a common thing I'm seeing, Jade. People, uh, especially kids, kids they go down a path maybe that's a business that their family ran yeah maybe it's a degree they thought would pan out or a degree their parents wanted them to get and they go this ain't it yeah and i've spent so much time maybe so much money even with zeros on the end if you got student loans and it's not it it's not it what do you do You got to pivot.
In the words of Ross Geller, pivot. It's hard.
And I think there's a grieving you have to do. Yeah, you do.
The picture of what I thought was going to be, it wasn't it. And you spent time on it.
And you're probably angry, frustrated, resentful toward the people around you who said this was a path, angry at yourself. Yeah.
But there's a moment where you go, all right, I'm 24. I got a good 70 years left in the tank.
Let's change track and do it in a way that doesn't implode our life, especially when you've got a family. So that's why we say you want to get the boat close to the dock.
What we mean is do the thing that you really want to do on the side and get it going. And then as you get better at it, you make more money doing it.
Then it becomes clear what the path is going to look like to make the jump. And by jump, I really mean like a little baby step.
If it feels like a giant leap of faith, it may be not the right time. That could be tough.
So George, if you were not a YouTube radio host, live speaker extraordinaire, what would you be? 17 things at once. That was my problem.
I would probably be, I would run like an ad agency coming up with really creative ads to reach people in creative ways. I could see that.
I could see that. We're doing a Super Bowl ad for Honda.
Like it's going to be at it. I think just something with a lot of creativity with media that reaches a mass audience, which going mad men on it.
I'm doing that now. Just trying to help people get out of debt instead of getting into a Honda Odyssey.
So it's a different life. I like it.
How about you? Chef. That was easy.
She knew, and she'd be great at it because she is great at it. This is The Ramsey Show.
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Okay, today's question comes from Stella in Kansas. I can't help it.
Stella! Streetcar name desire? No? Wow, you are older than I thought. I have an old spirit.
But anyway, today's question comes from Stella in Kansas. Our realtor is advising us to use some of our equity in our home towards buying down the interest rate on a new home that we're purchasing.
Is it smart to do this instead of just putting all of the equity down into the new home? If not, is there another way that we can fund bringing down the rate? So my first thought is you could go through and do the math on the points. but typically it's better to just take the money and add it to the down payment to bring down the payment and make it more affordable.
You know, typically if you can afford the house and you just don't like the rate, like if you can, you know, if they're, I don't know what they're offering. You say they're offering you, I don't know, 6.9 or that would have been a while back, but whatever.
It's like 6.3 now. So let's say you can get it down to six or something like that if you pay a few thousand bucks.
Well, let's say, let's consider it before you buy it down. So let's say it's at 6.45, right? And you're like, we can afford this.
I just hate the rate. Then we would say the whole idea here is you date the rate and marry the home.
So get the house if you can afford it. And then later on, you can refinance it.
Now, if there's something going on, and the rate is what's keeping you from getting the home, because you can't afford it under that rate. And even with the down payment, I you know, it's a slippery slope there.
I like margin. And I like knowing we can afford this.
And there's plenty plenty of space here and all of that. So to buy it down, I'm not going to say this because I know it's not the case for some people, but it feels almost like a desperate move.
It feels like I'm doing anything to get this house. And I don't know that that's the case, but I would check that.
Using that same money as a down payment instead is also going to bring down your overall payment. So you're asking, should we use some of the equity in our home? I'm wondering why don't you use all the equity in your home to use as a down payment on the next one? That's what I would do.
It's what I have done. I've never purchased points.
I don't think it's worth it in most cases. Yeah, put it on the down payment.
You've got to to do a break even analysis to figure out, all right, if it costs me $2,400 to buy down the mortgage by one point, and that saves me $36 a month, we'll divide that into each other. And that's 67 months.
So it's five years and seven months it would take you just to break even, just to make that $2,400 back in interest. Then you'll make that $36 back a month.
So I just, I don't think it's worth it for most people to wait six years to break even because by then the rates will have probably fluctuated, come down and you can refinance and do a break even analysis on that. So I would not do this.
What I would do is I'd get with Churchill because one of the great things about Churchill is they're going to form a relationship with you. Churchill Mortgage, by the way, they're going to form a relationship with you and they're going to help you accomplish your goals the right way and the Ramsey way.
So filter this through them and make sure that you're just not painting yourself into a corner. I think that's the big thing here is to go, okay, this is an option, but it doesn't mean it's my only option.
And don't do anything out of desperation because we got to get the house. Absolutely.
And they can help crunch those numbers and do the break even with you and show you, hey, listen, you can do this. It's going to take five years to break even.
Probably not worth it. And they'll shoot you straight.
And make sure you understand the math. If you don't understand it, don't do it.
That's a good life. Just principle.
Just principle, right? Love it. All right, let's get to the phones.
Gary Anna is in Atlanta, Georgia up next. What's going on? Hi.
So I've been listening to you guys for like a month now. I've just been trying to really figure out how to consolidate this debt that I've racked up from a previous marriage.
It's about, in all, about $50,000 worth of debt. $20,000 is due to a car that we just got.
Prior to that, most of it's credit cards, about $3,000 in that. Also, we're working on getting my husband's immigration paper.
So that's like $2,300 plus lawyer fees is $1,500. And we just had a baby in March.
So we're just getting a little overwhelmed, and I'm just trying to figure out what would be the best way to do it. I just started back working to start helping.
I work two days and I make between $200 and $300 a week and he makes about $800 to $1,000 a week depending on overtime. So I started applying to more jobs.
I just am trying to

figure out what would be the best option for us right now due to us not having a big support with child care. That's the reason why I don't work more.
So what would be a good idea for us? So in a good month, you guys are bringing in $5,000 a month. Is that fair? did I get that? If he's doing overtime every weekend, I would say yes.
But there are some days where since I work off commission, I'm a mobile dog groomer. There are some days where I'm not making as much as I could be.
There might be a week where I don't need to get any appointments with who I work with. So what's a bad month for you guys? Tell me your lowest month that you've had.
A bad month I think would be probably anywhere between $1,300. Ooh, mama.
So are y'all going into debt on those months to float your expenses? How have you been surviving? No, so before we did all this, before we had to get the car, I always had like a rainy day fund of about like $5,000.

So we had to get the car, I always had like a rainy day fund of about like $5,000.

So we had to kind of use a lot of that.

So we still have kind of a rainy day fund that we actually really can't touch. I put about $2,300 in two different certificates that is supposed to,

I think it said grow with interest for $12. Yeah, but you can pull that money.
There will just be a penalty on the interest you earn. Okay.
So that gives you $4,600? It's about $2,300 right now. That's the rainy day fund that's not such at all.
And why did you have to get a $20,000 plus car? So when we first got the car, that's not what we thought we didn't do our um research a lot because we got it from um someone in the family who works for a car dealership my husband my husband's car went kaput and it wasn't worth six i think it's like a 2013 100,000 miles and the transmission is out so the amount of money going into it wouldn't have been worth it so we got another car so i will have to be able to get to and from work so you owe 20 000 on it it's 20 000 but y'all are going to be upset because i was listening to you guys it's through exeter finance oh no that's even why i wanted to call you guys so bad because i heard dave ramsay talk about it about two weeks ago on one of his podcasts. And I was like, I have to figure out a way to get out of this or do something.
Yeah, for those of you who don't know, let me catch some up, Gary. On Exeter Finance, they are a subprime lender.
So when you don't qualify for CarMax financing, they send you over to Exeter with a 29% interest rate on this car loan. And then they ding you for every extension and deferment you make.
They'll add on fees at the end for a giant balloon payment that people can't afford. When did you get the car? How long have you had it? I've only had it for three months.
Okay, what's the car worth? It's worth between $16,000 and $14,000. Is that private party value on Kelly Blue Book? No, that's when I initially bought it, but when I looked it up, it said between $14,000 and $16,000 when I did different searches.
And you didn't think spending $20,000 on a loan that wasn't a red flag at the time to go, it's only worth $14,000 20. And didn't you say a friend did you tell me a friend set you up with this? You said they work at the dealership right? A family worked at the dealership yes so they didn't you know i'm not blaming anybody but myself i didn't do research if i would have done like when i bought my first car that was paid off but um if i would have went somewhere else.
Okay, we're coming on. We're coming on the break.
We want to give you some help here. If I were you, I take that money.
You told me you had two CDs for 2300. I take that money out and clear the difference that $4,000 difference.
And then you and your husband need to save up cash super, super fast and buy yourself a $5,000 beater. That's the only way.
You've got to get out of this car note, and I know the payment is redonkulous. Especially with this income.
We've got to get the income up. That is A1.
And that means he needs to work as much overtime. He probably needs to switch careers, and you might need to go to work full time and put the kid in daycare if that means you can make more as well.
I'm so sorry, Gary. This is not a fun place to be.
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 Jade Warshaw. Open phones at 888-825-5225.
You call us, we'll help you take the right next step for you and your money. A reminder, Jade, the Ramsey Cruise is upon us.
It's almost sold out. We are setting sail March 22nd through the 29th.
There's still a few cabins available. And as I was looking at the site, the lineup keeps expanding.
We keep adding more and more special guests. And the one I'm most excited about is Trey Kennedy, one of my favorite comedians and online creators.
He's going to be doing standup on there. Of course, we have all the Ramsey personalities.
We've got music. We've got magicians.
I mean, what more could you want? All-inclusive premium Caribbean cruise. You got to join us.
Book your cabin at ramsaysolutions.com slash cruise. Looking forward to that in March.
Truthfully, selfishly, because I need a vacation, Jade. We could all use a vacation, George.
I need some sun. Look how pale I am.
I don't want to look at it. That hurts.
Don't look directly at it. I need a base tan before I hit the set sail.
Will you go to the tanning beds beds i don't think i would ever go into a tanning thing i feel like we know too much like science is out there telling us like hey maybe don't do that that's worse than the direct sunlight is that what they're saying i'm hoping at 90 like i'm pale but i don't look leathery you know what i mean that's my goal at this point you don't want the leather no leather you don't want to look like a catcher's man i'm gonna wear a lot of leather you know leather but i'm gonna like the fawns that's my goal good hair leather jacket okay george we gotta mix it up a little bit okay let's do a let's do a wild card here let's do a i don't know where she's going with this y'all well you know we were talking we were talking earlier a couple hours ago and we were talking about lifestyle creep yes and we were talking about how it's like you know you earn more money but you don't necessarily start buying a bunch of stuff you don't necessarily increase your lifestyle like that or else you'll look up and go what happened to all my margin or you won't be doing so it all started with me sitting down in my amazon jeans and the zipper every time I sit down that the zipper falls down

and I'm like blast these cheap Amazon jeans I bought and I thought to myself some things are worth if you can spend a little bit more just creeping it up a little bit get quality yes over quantity so the question I have for you as the wild card is what is it worth it for you to spend just go ahead and spend the on versus no, I will buy that cheaply and it's worth it. I jotted down a couple of thoughts here.
My first thought is anything that my body sits on or lays on or my feet sit in. So shoes, I'm not going to be out here hurting because I got cheap got cheap shoes yeah mattress that's a big one

oh okay we're going spendy yeah we got to be sleeping good now there's a lot of mattresses now they come in a you know fold it up in a box that's still fine you could you can still have a good mattress out of a box but you got to get one that isn't giving you back pain okay yeah okay i'm with you mattress matters toilet paper matters and what's your brand uh charman ultra strong that's what the camel family rocks. Okay.
I go for the Kirkland brand. That is basically the equivalent of that.
It's the strong one. Yeah.
Not the soft one, the strong one. That's what I like.
How about you? What is worth buying full price retail name brand? I think you have to spend money on your hair. Like if you're getting a haircut, like no sport clips, no great clips.
Like you got to spend money on a good haircut or good hair products. I know all about that.
I spend more than my wife does on haircuts and it shows. Not on her, on me.
I was going to say, I'll let Whitney comment there. But you know, women get their, they're like a cut in color a few times a year.
That's right. I'm out there every two weeks back at the barber seat.
You see what's going on here, George? I don't know how you do it. I don't do it.
I go to somebody and I spend the money. But you got a new look every week.
I try. It's like you reinvent yourself.
I try. That's part of what we do here.
Bread. Okay.
I think you need to spend money and get- Quality bread. Quality bread.
Don't come in here with Wonder Bread. No Sarah Lee for you.
No Sarah Lee wow yeah spend the money get yourself some nice bread uh paper towels that's a big one okay i've tried the store brand paper towels ain't cutting it don't give me no viva that's the one yeah i'm a bounty guy a bounty it's hard to beat the quicker picker upper again i go for the kirkland brand costco kirkland that's second best but i've noticed there's a difference yeah and definitely no no jeans from amazon that was a mistake and yes i am going to return these even though i've worn them for three hours wow amazon can be you can find some good things on like rachel cruz loves her some amazon clothes i have yet and and maybe you guys come tell me everything i bought from amazon i end up returning it just i don't know if I choose it wrong or what, but yeah. It's a personal problem.
Now, what do you go cheap on? Pretty much anything else. Things that, again, I'm not ingesting or putting on or near my body.
Okay. I like that.
Okay. That's a rule of thumb.
Don't. Okay.
Things that I'm not going to use forever. Things that I don't expect to last a long time.
I'm fine to get the cheaper. What's your.
This is a tell all. This is a wild card.
Air filters. Yeah.
Sorry, Dave. I went for it.
Telling our producer. So tell me a wild card.
Not Dave Ramsey. He's not in the booth.
Yeah. Not Dave Ramsey.
The other Dave. So yeah, James is out today.
So people want to know what's the line item on your budget that is people would be shocked to know that this so i just did a youtube video that will release soon for my channel on how i manage my money yeah it was legit like here's the camel family expenses and as i was laying it out i was like what would be what would people be shocked by the dogs really stood out to me if they knew like how much we spend on the high quality dog food that's like hypoallergenic that doggy daycare twice a week the dog grooming the mobile groomer that we get once a month okay wow they would be like you spend more on your dogs than your daughter you know what i mean so that one i think is the most shocking to me in our own budget okay our daughter would be next because she's got the high-end european goat formula oh so yeah she goes all out high but Whitney's pretty crunchy she's pretty granola when it comes to that stuff so she's looking at ingredients and she's pretty same uppity okay George thanks for revealing shoes in the Warshaw family probably yeah shoe budget is strong what has gone awry recently is since I'm training for this race I've bought a lot of sneakers and i don't usually do that um and so that's i think that would be the shocker of what's going on there wow i don't want to tell more about it because you will judge me shoes and dogs strongly it's what we value dogs here's the thing if it's in the budget you're paying cash and it's what you value and you're not trying to impress anyone couldn't give a rip about your your opinion. So the teaching here is lifestyle creep.
And I think there's a part that if you're doing better than you were, you do want to enjoy the fruit of your labor, but you have to filter it through. Are you doing what makes you a financially responsible adult? So in this case, if we're talking about the baby steps, you're out of baby step two, you're out of baby step three, you are currently doing baby step four.
And as long as you're doing, you've done all that and you're investing your 15%, you know, when it makes sense, you're, you know, putting a little something away for your kid's college, you're putting something away towards paying off the mortgage, then I do think that there's an area of like, yeah, all right, I can, I can up that category a little bit. Or if you're looking to buy a house or, you know, change houses, you can say, okay, like we can afford to do this a little bit more.
Yes. So the problem is people go, well, I can afford this next payment.
So therefore I'm going to pick up another 50 grand in debt because I can afford the $800 payment. That's how most people think.
And that's how lifestyle creep really takes over. It does take over.
You have to be careful. A good friend one time told me, he's like, you know, you in general, you should aim to keep your expenses low, like truly as low as you can, just because you never know.
Like you never know what could happen. I think as you get older, it becomes easier to just let go and stop caring what other people think.
That's truly the life hack. That's a superpower to stop caring what other people think because you don't realize how much that actually affects the way you spend.
That's true. I heard Rachel Cruz.
This was a long time ago. I saw her do this was before I worked here.
I saw her do a post on social media and it was about the motivation behind what you buy. And basically the question she asked is if you purchase something and no one would ever see it, if it was just you bought it, would you still buy it knowing that no one would ever see it? And it really speaks to the motivation of, why did I get that? Like, did you buy that specific purse because you were thinking, I want the reaction of these specific people? Or did you just buy it because you like it? That's true.
Yeah, I think the healthier you are, the more self-respect you have, the more discipline, the less you just need more stuff. I think so too.
I just haven't seen someone with a lot of stuff that I've been envious of. It just seems like an exhausting life.
Look, the stuff I wanted- Maybe I'm just an old man. I'm a boomer.
I'm the youngest living boomer, Jade. You're not wrong, George.
The stuff I wanted when I was in debt, because it was like, I got to have this, but I can't have it. It's almost like, you know, you can't have it, so you want it.
But then when you're debt free, you're like, why did I care about that? Well, hey, that was fun pontificating with you to end this hour. If you're listening to the show on YouTube or podcast, it is about to end.
But good news. We are continuing in the Ramsey Network app.
So go finish the show there. Download it in the App Store, Google Play, Ramsey Network app.
Search for it. We get some good calls coming up in this next hour.
You don't want to miss it. You can also click the link in the show

notes, and we'll link you over there to go download it as well. Until next time, this has been The Ramsey Show.
Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free.
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I'm getting out of here. Enjoy.
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