Use Your Money To Create a Life You Love

Welcome to the Ramsey Show, where we help you win in your life. We help you win with your money.
We help you win in your work, and we want you to win in your relationships. I'm Ken Coleman.
Rachel Cruz joins me this hour.

888-825-5225 is the phone number. That's 888-825-5225.
Rachel is our resident money expert today. She's going to help you figure out how to spend it, how to budget it, how to save it, how to invest it.
And then I'm going to help you make it. How about that? So it is your money, your life.
So we've got income and outflow is what we're going to work on today. So we want to help you.
Let's get started with AJ in New York City. AJ, how can we help you today? Hi.
I'm just calling in because I got this big loan from my mom. And what happened was I was supposed to get a loan from the bank, but we didn't have a credit score.
I was just a recent grad. So we took a loan from my mom, who I really don't have a good relationship with.
And it ended up being she wanted, we tried to ask her to do monthly payments, you know, pay her she wanted the whole payment in full so then we actually had to end up getting a loan from a bank anyways and I just feel like this alone is like I have two small kids I just feel like this loan is stopping us from getting a house just like starting our life sure you know it's a huge chunk of payment every single month how much is the loan in total did you borrow from her um from her i borrowed 41 000 41 okay and what was it for it was to start um a business my husband he's an mma fighter and he opened up a fight gym and, you know, that was his dream and he did it. We did it without loan, but.
Is it making money? Right now, because it got closed down during COVID and we're still recovering from that, I think this year finally we're making, he's making a little bit off of it now and he's thinking to expand and things like that this year. Okay.
Well, hold on a second. If we don't want to expand until he pays off the $41,000, because the $41,000 is on the actual gym, the business itself, correct? Yeah.
Right. So I would be cautioning him, let's not expand.
We actually, at this point, after he pays himself, is that your primary income as well? Or has he got income from another, I'm guessing from his fighting? Yeah, he does have income from fighting. And also I have income from my job as well.
What's your combined income? Let's not include the gym right now. About 80,000 a year.
Okay. And how long, how long has it been? Because you said you borrowed this money.
It's before COVID covid so how many years has it been it's been since that was in 2018 that was in 2018 and then the loan from the bank that we got was around two years ago i want to say two and a half years ago okay so you got the loan from the bank to pay your mom back so your mom's no longer in the equation correct this is just now okay which honestly aj i know i mean in that case to to solidify or heal any part of the relationship not having money in the middle of it if that was ever to be a day i think it's better i'd rather owe a bank than have a strain on a relationship you know with with a parent um okay so how can we best help you today? Is it just, is it figuring out how to find margin to help pay this loan off faster? Absolutely. So like, I do want to find margin, but then there is like a little twist in the story.
So my husband, he has a student and I guess the student is, you know, very well off. He told my husband that he wants to invest $150,000 into the business to have a park.
And so I'm wondering if you guys think that's a good idea. I think it's a great idea.
Okay, real quick clarification. I'm assuming that the $41,000 loan, that's in the name of the business, correct? Or is that a personal loan? That loan actually is a personal loan.
It's in our name. Okay.

Yeah. thousand dollar loan that's in the name of the business correct or is that a personal loan that loan actually is a personal loan it's in our name okay yeah well okay okay and then the student wants to come in now and give you guys 150 000 to be a partner in the gym yeah okay so partnership and business i mean ken can speak on that more that's a whole other ball game in a sense that like yeah yeah, that's kind of changing the whole way.
I'd want to know the terms and that's a stickier situation. I mean, Dave has very strong opinions on partnerships.
I'm not quite as anti that, but it comes down to there's got to be a really, really strong relationship and there's got to be very, very clearly defined roles. But it sounds like a great idea to you because the business has been struggling.
So a cash infusion of $150,000 on the surface does sound good. There's no question that it sounds good and it feels good.
But we've got two separate issues. And without your husband on the phone and walking us through the terms, I'm limited in what advice I could give you.
What I'd rather us do, Rachel, is focus on, okay, we've got a, what we know is we've got an $80,000 combined income and we have a $41,000 personal loan. I thought that the loan was on the business side, but this is a personal loan.
So you guys can clean this up and should clean this up. And that's why you called.
Yes, absolutely. Yep.
That's the main's the main reason yep for sure what other debt do you guys have so then um five thousand dollars in credit cards for me and then for him around ten thousand in credit cards and then two car payments so on his he owes around six thousand i know and then my car, I made a bad financial decision with this car, but I owe about $28,000 on this car. Okay.
So it's not even just this loan. It's kind of the way you guys have been living with money up until this point that's causing you to stress.
And yeah, and I would, you know, with an $80,000 dollar income um yeah you guys are kind of right at that at that brink of of and then we pay for daycare yeah other things though it's not a loan but you know totally yeah you have more debt than you make you're at about ninety thousand dollars in debt if i'm doing quick math yeah so okay so yeah so mean, honestly, when you're looking at the financial part of this quickly, I mean, money flows two ways, right? Money flows in, money flows out. And from the expenses side, you guys sitting down and together, together, you and your husband doing a household budget every single month and looking through and saying, what are the non-negotiables? So food, shelter, utilities, utilities transportation next would be child care next would be insurance right these things that we have to have and then everything else down below that I mean I'm I'm putting a full stop on and that's going out to eat uh that's subscriptions that's vacations I mean any extra spending is just halted completely completely and any luxury anything that is a that you're paying for convenience stop like this is down to the bare bones and that's the outflow and that's gonna that's gonna help you guys get control of that income that hits every month but then you're probably gonna look up aj and realize oh my gosh we're not making enough to make a ton of headwinds so the income is where the problem is going to.
And so for him and his full-time job is great, but what he's doing beyond that is the gym and it's not making a ton right now. Right.
So I think you, I think you guys as a family have to say, Hey, as a couple, where is our time best spent to get us out of this financial hole? Because until you guys have a solid financial foundation under you, are you going to be able to make clear decisions? You're not making clear decisions right now. Someone offers you $150K to have in the gym, and you want to jump at it because there's cash right there, right? So I don't feel like you guys are making great decisions.
And so there's something to be said of, hey, even though there was this dream and we have this investment, we have this stupid $40,000 loan to open this gym, where is our time best spent to bring in as much income as possible for the next 24, 36 months? And then beyond that, we can dream and say, hey, where do we want to go? But you guys started the opposite and untangling that. It's going to be hard, but it's going to be needed to get any level of progress in this.
You can do the work. Hang on the line.
I'm going to give you the Total Money Makeover book. You guys need to read that together.
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 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. And you'll have free access to over 33,000 ATMs.
Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal.
Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.
Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey to learn more.
That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to the Ramsey Show.
Thrilled to have you with us, America. I'm Ken Coleman.
The fabulous Rachel Cruz is alongside today. 888-825-5225 is the phone number.
We want to help you win. Rachel, I'll help you with your money.
I want to help you with your income. And let me tell you something.
When you get control of your money and you start increasing your income, you are on your way to living like no one else. And that's what we want today.
Let's go to Matt in Utica, New York. Matt, how can we help today? Ken, Rachel, so excited to be on the show.
Thank you so much for taking my call. In fact, I was in the middle of driving to the hospital.
We are welcoming our third child into this world. I had to hold them aside and try to call you guys.
And so I'm so thankful to get through. Wait, wait, wait.
Hold on. Rachel,'s that hold on rachel take over your wife's in labor right now yes ma'am i don't know if i don't know i don't even know if i want to talk to you right now i feel like hey i want to i wanted to set a first for the show uh she technically is not in labor she's actually being induced okay okay that's fair okay well i'll uh she knows this all is happening happening that helps you saw what i did there i immediately went to rachel and said shall we proceed because matt if i was if i was your wife in the car like i was with three babies and went down the interstate i got nice things were coming out of my mouth i was nervous i was medication i mean matt you made me nervous like i was gonna get in trouble.
That's how, so I'm glad we settled that. So you're on the side of the road.
You're safe. I'm glad we started this call on a high note.
I definitely want to get to my question. Go for it.
Go for it. This kind of purpose.
But congrats. Congrats.
We didn't say congrats on the third baby. Congrats.
Thank you guys. All right.
What's going on? Very, very excited and blessed. I appreciate you.
So here's the question. So my my wife and I, we have had to move three different times for my work during the COVID era.
And so we find ourselves now settled in a position in a home that was owned by her grandmother, who has since passed. And now ownership belongs half to her mother and half to her aunt.
we are the only ones living in the home right now and we've assumed the mortgage which has just

57,000 left on it, and the payment's about $480 a month. And we've obviously taken 100% of the mortgage, so we're just taking it.
There was an offer... Hold on, hold on, hold on.
Yes, sir. Do you mean you're just paying the mortgage payment as like a rent? You haven't actually assumed it.
It's not in your name. Okay, but the mortgage isn't in your name.
Correct. Okay, I wanted to make sure that I understood that.
Okay, go ahead. So we ended up getting an assessment on the home to see the valuation of what it was, and it turns out it's worth $148,000.
That was three months ago when we first moved in.

We've been offered by her aunt to buy her out for a number of $38,000.

And in that capacity, we would take on 50% ownership with her mother

if we decided to move forward by paying her aunt $38,000.

And you're saying the house is worth $138,000? $, sorry, 148. Okay.
And you guys, oh. The house is worth 148.
Balance is 57K on mortgage. We were offered to buy her out for 38 to retain 50% essentially of the home's value.
No, I wouldn't do that. Rachel, do you agree or disagree?

Yeah, no.

I mean, where all this gets really messy really fast, Matt,

is when multiple people are on deeds and mortgages and ownership and equity and you're paying rent,

but it's not going to you.

I mean, like, it gets really complicated really fast.

So honestly, the cleanest way I would do this,

if you, number one, if you guys love this home, would you have bought this home if it wasn't in her family? We would not. Okay.
Yeah, there's your answer. So I would rent for, you know, three, four more months, get you guys in a position to go and buy your own home.
That's what I would do. Your rent is peanuts anyway.
Peanuts. It's peanuts.
And the caveat to all of this is any improvement we've made. So in other words, if we wanted to put a mini split in, which is something we're working on, if we just put a fence in, for example, you're adding value to this house that you have no ownership in.
I wouldn't have done it. Exactly.
So the deal is that if mom has to come out of pocket for her 50%, she's making us whole for every dollar

that we've spent. We have nothing contractual on that.
It was just a verbal agreement.

She just said that. Okay.
Well, it's nice if she does it. If she does it, but I know lots of

situations where parents are like, I'll pay for that. And then they don't end up paying.

Yeah, Matt. I mean, I think if this was a house you guys loved, it's in the family and they're

giving you a great deal. I would just buy it outright, get everyone off the mortgage, get everyone off the deed of the house.

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like, like, like, like, outright, get everyone off the mortgage, get everyone off the deed of the house. You and your wife assume it as your house.
You pay the mortgage and you drive off into the sunset. But if this is not a house that you would not have bought, then if I were you and your wife, I would be looking to say, hey, where? And now you can rent this as a renter for the period of time while you guys save up a good down payment.
But no more improvements. For another house.
But I wouldn't do any more improvements. And I wouldn't try to like, yeah, piece mill this together because it gets complicated so fast.
And it's a much cleaner. I have a follow-up question with that said.
Just because you have a baby coming. We will allow.
I really appreciate the follow-up here, guys, and your time.

So in a what-if scenario, because this is more hypothetical, I can't speak for the aunt,

well, she is the one of the two that's more motivated to basically turn this into money,

to liquidate the home.

Yeah.

What if she comes back and says, if that's your plan to rent, we would prefer to move

forward with sale of it, such as creating a very different situation for us.

Then you and your wife would have to leave.

So you move.

So you're going So you move and you rent somewhere. It doesn't change everything that Rachel said.
What Rachel said is spot on. It's just straight up wisdom she threw at you.
You don't want to live in this house long term. So don't even start entertaining the idea of, well, what if, what if, it's time to move on.
Yeah, the only reason I would settle for a house that I don't really love is if you get a great deal on it. And there are some family situations where they're like, hey, we'll give you, you know, we'll sell the house for 75% of what it's worth, and you get a good deal, you guys get in it, and financially it's smart.
But if it's not apples to apples, you guys don't like it, and they're not going to give you a great deal, I wouldn't be in it. Well, you're not even getting the whole house.
You have to share it with mom, which is weird. And Rachel addressed that.
So mom actually doesn't live in-house. Doesn't matter.
But the ownership. But she owns it.
The ownership part. Matt, I've got to say something to you, and I'm going to give you a pass because you pulled over to the side of the road and you've got a baby on the way, but I'm not feeling like you're hearing what we're saying and i you called us and that's our opinion but it feels to me like why do you feel like that because you feel like he wants to do it he's still he's like but what do you want to do what do you want to do what do you and your wife want to do so so ken it's a great point and and i've been told all my life that i'm hard-headed so i'll take that feedback.
I appreciate that. No, but also I am listening.

I'm going to take everything you guys say as gold.

I promise you that.

You guys mean a lot to me.

You've done a lot of good things in my life.

I'm debt free.

I've got some money in the bank.

We feel good about our life situation. That's in large part due to Ramsey and all you.

So thank you.

What I would say, though, what I want to do is keep expenses extremely low.

And to your point, yeah, I got to make the best move. But I'm trying to keep my expenses super low so I can buy my next home in cash.
And we're about halfway there. And I just projected out about 18 more months where I can get more cash flow and be able to do that.
So that's kind of my other thing. And the thing that hangs in the balance is I just don't know where I'll be long term.
So to purchase another home, if I get promoted again, for example, I don't know what that's going to look like. Moving again just seems like a tall order.
Okay, totally hear you. So I would sit down with aunt and mom.
I would lay out the mat formula of which you have laid out. Because if you keep renting, we're not mad at that.
But like you said, the asterisk here is that aunt wants to get out and mom wants cash and they want to sell and be done with it right so that would that that puts a you know a wrinkle in your plan but then the other thing is too mad if you guys are not going to be somewhere five years or more it wouldn't even be worth buying at that point even four years that's right i i wouldn't i don't think that's a smart use of your money and time and energy and all of it so do what's your what's the what's the you know the probability that you guys will move in the next four to five years? Likely. I would venture to guess 75% chance.
Okay. So honestly, Matt, if I were you, I mean, you have a new baby coming, which just like adds to the stress.
Man, I'd go find a nice, great house. I would rent three years and then you're going to move.
I'm 100% agreement. Like, go get a great house and rent it with your family.
And I appreciate that you're trying to save some cash flow by staying in this current house. So if auntie wants to kick you out, you're going, crap, now I got this super low rent and I got to pay more.
But you don't sacrifice your long-term plans for a monthly number where you're getting paid well enough. You can afford to rent.
You're a big boy. That's what we're trying to say.
Yeah. And then if you get two years down the road and it looks like your job that, no, you will be here full-time, you guys will have a ton of money in the bank to go and put a big down payment on a house and have your roots planted.
Matt, we've done all we can do. You got to get back on the on the road get to the hospital you got a child on the way for heaven's sake unbelievable oh my god bless your wife god bless all of you this is the ramsey welcome back to the ramsey show rachel cruz is with me i'm ken coleman and we are here for you to help you win with your money.
Speaking of which, our colleague, Dr. John Deloney and the EveryDollar team are doing a free live training Friday, September 27th at 1 Eastern, 12 Central.
So you can lunch and learn here. It's a free webinar, EveryDollar.com slash webinar, EveryDollar.com slash webinar.
And we've been doing these. We've been telling you about these throughout the last month or two.
We're doing more of these as the Ramsey personalities jump in to help out. And so if you want more breathing room, you want to learn how to spend money without anxiety and guilt, emotional awareness around your money, Dr.
John Dillon is going to be walking you through that with the EveryDollar team. So, again, September 27th, 1, 12 Central, EveryDollar.com slash webinar.
All right, Ryan is going to join us now in Orlando, Florida. Ryan, how can we help? Hey, how's it going? Thanks so much for taking my call.
So my question, I'm 31, my life's 28. We just got married about six months ago.
I'm kind of a weirdo and I've worked at my job in finance for the last 10 years at the same company, but kind of getting to the point where I want to quit my job at the beginning of next year, so 2025. And we're seeing this going to be a good opportunity to kind of take four to six months and maybe do something like move to Europe.
You know, we've kind of lived like no one else. We've saved up a good bit over our lives.
And so we have about $700,000 of net worth, no debt other than the house. We would probably sell the house if we did go out there for six months, but kind of wanting to have kids in the next one to three years.
And so this is kind of our main shot from a timing standpoint. So wondering if that makes sense from a financial standpoint.
What do you do for a living? I'm in finance. I work at a bank.
And how much do you have saved beyond your emergency fund? Yeah, so we have about $90,000 of cash, about $100,000 in our brokerage, about $225,000 in our retirement, about $275,000 in our home equity, and then about $35,000 and kind of other stuff. I'm ready to rule, Rachel.
I'm ready. What was the first number? I just kept thinking, I want a man in finance, a trust fund.
Is that Ryan? Is he the guy the internet's been looking for? Sorry. Blue eyes, you know, I try to keep in decent shape, you know.
That's so funny. Okay.
Sorry, I missed the first number. I picked up at $150,000 in a brokerage account.
Did you have a number before that? Sorry, yeah. It's $85,000 in cash, $100,000 in a brokerage account.
Perfect. Okay, I just want to make sure I got it.
I say do it. I say do it.
Because you can jump back in that industry. You've worked in that industry for 10 years.
You can explain your gap. I think it's pretty stinking awesome.
And I think if I were in your particular situation, I'd absolutely say do this because you're in financial ability to do it. It's not risky at all.
Yeah. You're not taking on debt.
I mean, from a long-term financial standpoint, I mean, pausing for six months, you're fine. I mean, there's nothing.
I think it's a great move. The house, though, is a question for me.
Why would you guys want to sell the house? I mean, obviously, because you're not living there for six months and you'd be paying a mortgage and rent, but that's just for six months. I'd hate for you to lose out.
Well, wait a second. How long is the Europe adventure? It would be about six months.
Oh, okay. I thought I heard something different.
I felt it. Yeah, And I think the reason we're going to go to the house is we're thinking about maybe moving up in house.
So it'd be like a good break to sell. Oh, perfect.
I love everything about it, man. Pocket the cash.
You don't need the cash for the Europe adventure, correct? You're not going to borrow from that? No, we don't. I like it.
So my wife works in telehealth and she could work part-time and kind of wants to, work like three days a week. Yeah.
Do you think that's smart, or just go ahead and actually enjoy her time there and spend full time? Oh, I'm weighing in on this one too, Rachel. I think I would have her.
I would live off of – I would take that would be the fun money. Yeah.
I would try to live off as much – like the Europe trip, yeah, if she can do it. And she wants to.
And she wants to. Because you're over there, you know, feet up in the air, you know, with your mid-morning juice, and she's over there doing telehealth.
I don't know how long that's going to last when you're in Paris. That's so true.
But if she's willing, Rachel's right. Yeah, she may want like a routine, and she's thinking, okay, this isn't for three weeks.
For six months, we're going to be somewhere. I kind of want a little bit of a routine.
That's spa money is the way I'm looking at it, Rachel. I'd be allocating that on the budget.
Yeah, that's how we thought to do it cost neutral so that we wouldn't end up actually being anything out of pocket. Are you kidding me? She's a great woman if she'll do that.
Oh, yeah. She's a great woman.
Yeah, you did. Yeah, do it, Ryan.
That's awesome. What countries?

I got to know.

What countries are we looking at?

You know, I think we would probably start off probably somewhere in Portugal.

She really likes France.

And then we kind of just keep moving to the east, maybe Germany and Austria and then like

Slovenia area.

My goodness.

It's great.

I feel like you might need a mentor couple.

Stacey and I would be available.

All right. All right.
We'll get you guys out there a mentor couple. Sacey and I would be available.

All right. We'll get you guys out there.
We would love to mentor you guys through that trip. That's really fun.
Good for you. Hey, I love this, Rachel.
This is a great story here. 31 and 28, if I recall.
He's 31, she's 28. And the fact that they can do this before baby, this is the spice of life this is great

and this is the spice of life well and this is great and this is to the degree that we talk about living and giving like no one else right when you have no payments yeah you have money in retirement that's going to be growing like you've set yourself up so early in life i love this that you were able you know what i mean to to to say hey i'm this is the choice and what i want to do because that's what money is I mean out of all of that we talk about it's to have our job is to help you guys have a plan to have peace with your money in your life have a sense of peace and to allow money to be a tool to create a life that you love right that's what it is it's not a scorecard it's not a net net worth you know this idea that my net worth is self-worth. It's not who I am is the number in my account.
Like it's none of that. It is just paper there in a sense, right? To use on your life, to help your family, enjoy life, help others, enhance your life, all of that.
That's what it's here for. And you guys are doing it well and in a wise way.
Yeah. I think years from now, you guys will be still talking about this decision.
I think it's a great decision as a couple. I couldn't endorse it anymore.
Fantastic. Let's go to Bryce now, who's waiting on the line for us in Houston, Texas.
Bryce, how can we help? Hello. I'm 21 years old, and for the last three years, I've been working in the oil field, and I got laid off about two months ago, and I want to do a career change and join the military to better my future the only problem I'm having is I have a 2021 F-150 and I'm upside down on it and I don't want to repo it and ruin my credit because I'm trying to better my future you know what I mean yeah much upside down about 10 to 15,000 so how much is the car, how much do you have left on it to pay? How much is left on the loan? I owe, I think it was last month I checked, it was $50,000 and some change.
$50,000? Yes, ma'am. And it's more $35,000? Is that what we're hearing? Yes, sir.
And where'd you get that $35,000 number from, on the website. Like Kelly Blue Book? Yes.
Okay. You got any cash? No, sir.
No, not a lot. And any job? Are you working at all? So like I said, I was laid off about two months ago and I've been joining the military.
I just got out of METS yesterday, actually. Okay.
So when does all that start full gear? When did what start? I'm sorry. Military.
When do you start getting paid? Whenever I go to boot camp, which will be pretty soon. I got to go back to METS one time for a job list, and then I'll get my boot camp date.
Okay. Whenever I start boot camp.
Okay. And that's pretty soon i just i gotta go to back to match one time for a job list and then i'll uh i'll get my boot camp date okay and whenever i start okay and that's pretty soon after meaning like a week after or like a month after uh it could be a month okay so i mean honestly bryce i'd go wait tables i'd go work nights i'd go i mean i would go do anything that you can just to earn some cash right now i know that's not your longterm plan, but what I mean, the ideal situation would be to get as much cash as possible.
And even if you're still upside down, you know, three or $4,000 by the time bootcamp starts, you can take out a small loan for that difference and sell the truck. And then you have $3,000 that you owe versus 50,000, but I would make it a goal.
To do as much as you can here.

In the next six weeks.

To earn extra income.

And again.

That can be through any means.

To be able to get some cash.

But that's what I would do.

But yeah.

If worse comes to worse.

Do not go down.

Yeah.

The repossession route.

Don't let it get repoed.

Any of that.

Stay on top of your payments.

And if you have to.

Take a small loan out.

For the difference.

Sell it.

You know.

Be done with it.

And I'd rather have.

Thank you. of that.
Stay on top of your payments. And if you have to take a small loan out for the difference, sell it, you know, be done with it.
And I'd rather have a smaller loan than a $50,000 loan on a truck. Yeah.
You want to move this truck. If you can't pay it off, get that difference made up quickly.
You want to sell this thing quickly so that you have the least amount that you're going to have to pay back. So get the highest value for this and then learn from this.
All right. You don't need the big giant truck to be successful, to be who you are.
So thanks for the call. Thanks for your service and signing up to serve our country.
You're a great American. All right.
We'll be right back. This is the Ramsey show.
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How you doing out there, America? Thrilled to have you with us. I'm Ken Cohen.
Rachel Cruz is with me, and this is The Ramsey Show. 888-825-5225 is the phone number.
We'd love to hear from you. We want to coach you up today.
888-825-5225. Dani is up next in West Palm Beach, Florida.
Dani, how can we help today? Hi, Rachel. Hi, Ken.
Thank you so much for taking my call. I appreciate it.

Absolutely.

Well, pretty much, I purchased my home in 2015, and it's an older home. And now I feel like there's so many home improvements that I need to make, but I don't have the money.
And I was wondering if it would be a good idea to take a home equity or a HELOC loan to fix these things before they completely break down on me. So what kind of repairs are you needing to make on the house? Well, recently I noticed there was a spot in the ceiling that had mold.
And I'm assuming that water is getting into the attic somehow so I need to fix my roof and some of my doors and windows. Doors and windows okay.
Has someone have you had a professional come out and look at the mold and look at the leak and look at the roof or is this your assessment of it all? This is my assessment I haven't done that yet because I'm afraid of what i might hear yeah yeah so what i would do danny yeah is i would call i would i would probably get honestly two to three different people companies service you know service companies out to get three different bids because i feel like sometimes in this industry i don't know if you feel like this ken that it's like the dentist like the dentist stuff. Like you can go to one dentist and they're like, oh, you need a root canal and you go to the other dentist.
Everybody's got a different opinion. Yeah.
So the opinion is going to equal money in this instance. So the more opinions you have, the more options you have.
So Danny, facts are going to be your friends. Our friend, Dr.
John Deloney always says that. So in your head, you just said, you know, I'm scared to do that because I'm scared of, you know, what this is going to mean.
But I wouldn't even go there right now emotionally because you don't even know you could get someone over there and they're like, oh yeah, there's this right here in this one little patch, like our roof, Danny, we had to do some work on ours. And it was in one little, it was one area and insurance covered it.
So it was like, oh, okay. So it may not be as big of a deal as you think it is um but then if it is then we have to make a game plan so do you have like good home insurance and everything for some of the stuff if it comes if it comes back really damaged and and you're able to possibly get some insurance money well i have insurance i came for it that i know but I don't know what it covers, to be honest.
Okay.

So, yeah.

So, I may call your insurance company and just, you know, double check your coverage

and know what that is.

And then I would get, again, two to three people.

And I would get reputable people.

If there's other people in your neighborhood that have used someone that, you know, that

they can recommend, I always find that's very helpful to find someone that's trustworthy.

But, again, get two to three different bids on these improvements. And then from there, make some assessments.
So overall, though, Dani, I would not go deeper into debt on this house. I would not take out an HELOC.
I would not take equity out to fix this stuff. I would figure out a way to cash flow it and prioritize it.
So do you have any money saved at all? I have my emergency fund. Okay.
How much is that? $1,000. $1,000 emergency fund.
Okay, perfect. Are you working your way out of debt? Yes.
Yes. I started listening to the Dave Van Zee show about two years ago, and I'm doing my best to be in a better place financially.
But it's really hard. I do have two jobs, and life has been really hard because something always comes up and kind of throws me off that budget.
Absolutely. Well, I'm proud of you for doing this.
I mean, you've made, you've made a great, you're making progress, even though you feel like you may be two steps backwards, right? Four steps forward or whatever it looks like. That is life, you know, during the baby steps, which can be difficult.
But I would keep going on paying off this debt.

And then once you get some bids, Danny,

if it is work that has to be done, right?

There are some cosmetic work

that we would like new windows and doors,

but they may be fine for another two years, right?

I mean, like if you can put anything off,

I would, I would just do the necessities,

the bare bones,

and I would pause the debt snowball, save up and pay for those repairs

because that's part of your four walls.

I mean, that's food, shelter, utility, transportation,

making sure that those things are covered.

And again, I will say it again, get multiple bids

because some people, they just go get one roofer

and they quote this insane amount.

That's exactly right.

And then you could have had someone else. It's like, no, I could actually probably fix it for way less.
And they don't work for a big company and they do it on their own or whatever it looks like, right? So get some options, Danny. And if it causes you to pause it at Snowball to fix these, then that's what I would do.
Yeah. And, you know, I've just had a little bit of experience on this.
And shockingly, there are some dishonest contractors out there. That's true, yeah.
But even with honest ones, you know, they're coming in, and there's an exchange for time, their time, and your money. And I think it's always great to get at least three quotes, and I'll tell you why.
I like to, Rachel, when someone comes in, I go, well, the last guy said this, and this is what he said he would do. And what happens is it just comes down to everybody's got their own opinion and everybody loves their opinion.
And by contrasting and comparing. And believe it's right deep down.
That's right. Right, you know.
But you might have one guy go, well, he told you too much. I can beat that by it.
I'm telling you, you can actually get a lower price and a little bit more honest thing by doing that and tell everybody, each contractor, what the other one said and what they do. Yeah, and that's- You'd be surprised how that works.
Totally, and what that does, Danny, what Ken just said, is it puts you in the power seat. Yeah.
I think sometimes when you enter into parts of life, or for me, that I'm not super knowledgeable on, it can be intimidating, right? Getting your car fixed or whatever, that I like, I don't, I don't even know if I know what they're really talking about. But the more that you have knowledge, understanding and other people's opinions, like you're saying, you get to go in now with the power to say, oh no, but I learned this and this.
Well, what about that? And have that question. So there's some learnings here.
But again, Dani, I wouldn't, I would only fix things that are absolutely needed in this time right now. As much as you can focus on that debt snowball and getting through that, that's going to be so helpful when those payments are out.
You're going to have more margin to do more fixing in this house if that's what you want to do. All right.
So Rachel, we're going to go to a social media question. And I feel like this one has got Rachel all over it.
Oh, okay. So I've picked this one.
This is from Valley Farmhouse. That sounds like somebody that would follow you.
Yeah, right? It feels like somebody who already follows you is my guest. It's a good question on Instagram.
Okay. How do I budget for baby items and still tackle debt? I feel guilty not having a finished nursery.
Oh. What say you first time parent 100 kids you're like nursery it's just another room you should still see my kids charles's room he's four almost five and i'm like yeah you got a bed you got a nice bed we got him a nice bed besides that there's not really much going on in that room no the yeah oh gosh yeah the the nursery all that i would not i would not feel guilt about that the baby's gonna be fine and the truth is the baby's in your room i mean i guess depending on how you do the newborn stage but for at least six weeks usually really was it six yeah no some people it's years so we can't don't be judgment, okay, you're right.
I read a book. You know the book.
And I read it too. And we had the kids in their bedrooms day one.
Oh, day one. Oh, yeah.
Oh, yeah, we weren't day one. I think it was six weeks.
I was early though for some of my friends. There's a young lady in the audience that looked at me like I'm a caveman.
We did feed and clothe the child. Oh, my gosh.
We did do that. I'm saying when it was nighttime, baby went to bed in the crib and we had a monitor and we were up when we needed to be up.
We didn't, you know what I mean? Yeah. We didn't let it sleep outside.
But sleeping in our room, this particular book, and I don't want to say it because I'm not trying to endorse anything, but I'm saying. I'll say it because we did it too.
By eight weeks, all three of our kids were sleeping eight hours. Ours were too, y'all.
Sleep schedule. We're about to get hate on YouTube.
Ken is a caveman. On YouTube.
He is so insensitive. People are going to hate this advice, but I know...
I'm not saying, by the way, let me be clear. I'm not saying you're a bad parent if the kid sleeps in your room with you.
I'm just saying, I'm not casting judgment. No.
I'm just saying. What you did.
So what you did is, yes, you would have more of a finished, you would have more of a furnished nursery. So what I would say to her, yeah.
You know what she's talking about? The curtains and the pillows. Yeah, yeah, yeah.
All of it, yeah. And while you're getting out of debt and you're having a baby,

once they become, yeah, that baby, whatever age or number it is in the family,

it may not have the nicest stroller.

It may not have the nicest gear because you're going to probably go cheap on it.

But you know, once you're out of debt and you have a fully funded emergency fund and you have another baby, you get to have the nice stuff

because you have the cash for it.

And it's great.

The baby's fine.

I was born in the 70s.

I slept in a tree the first four years.

All right.

So, you know, come on.

I kid.

I kid.

Rachel Cruz, always fun to be with you, my friend.

Thanks for hanging out.

And for you, America, thank you for being with us.

This is your show.

This is The Ramsey Show.

Welcome to The Ramsey Show, where we help you win.

We help you win with your money. We help you win in your work.
We help you win in your relationships. 888-825-5225 is the phone number.
We'd love to have you jump in. 888-825-5225.
Rachel Cruz, the incomparable Rachel Cruz, is our money expert in the seat today. And I'm thrilled to be with her.
I'm Ken Coleman. I'll be captaining the good ship financial piece today.
I thought I'd try that out. Set sail, Captain.
I couldn't even get it out without cracking. That's terribly cheesy, but hey, it's always fun.
And we're thrilled to be here with you, as I said. I'm going to help you with your income.
Rachel will help you with what we do with that money. So let's get it started.
Kent is up first in Indianapolis. Kent, how can we help? Well, I'm trying to find a way to communicate with a 28-year-old nephew and get them to buy into the Ramsey Way.
About 20 years ago, you guys sold a product for, I think, junior high kids. I got all four of my nephews that product for Christmas, and all three of them are doing pretty well.
One of them is going to have his home paid for it before he's 40. But this one nephew, he's got a good job.
He's not in debt, but he's wanting to buy a $60,000 new car. He's paying $2,500 in rent.
He's got, I'd like to find a way for him to go through and decide what are really needs versus wants, but it's hard to get through to him. You know, he's not in debt, but he just, I don't think is, he's got a lot of wants that he pays for every month that he just, maybe, I don't think he's got a lot of wants that he pays for every month that he just maybe, I don't know.
I think it's kind of not necessary items, but it's hard to get through to him. Homes, interest rates are too high.
The home prices have gone up too much. I try to explain to him we went through similar things in the 80s, but I just can't seem to make headway with him.
I tried to give him one year, I was going to match him dollar for dollar and gift him some money to put into an IRA. He could only come up with one or $2,000.
Well, so he's 28, number one. He's 28, number one.
And number two, he's your nephew. So he's not even your son.
So, you know, this kind of, it feels like for you, something that you're trying, whether, and again, you're not doing anything wrong. I just think it's, I think you're putting too much pressure on yourself to try to, you know, get through to him, you know? Part of that is I never had kids, so I'm pretty close to my nephews.
Got it. And I'm just trying, I've seen from example, you know, living debt free.
I mean, it sets you free at some point. Sure.
Yeah. And he's not currently using debt to fund this lifestyle.
Is that right? He's just using his money in your way, in a wasteful way, in your opinion. Exactly.
Yeah. Yeah.
So I'd like him to come across something and say, hey, maybe if I did this differently, I could do this or that. But I don't want to preach too much to him.
But at the same time, I want him to kind of realize on his own.

okay there's the key phrase all right he's got to realize on his own this is the first time in this call where you got outside of this self-imposed pressure to get through to your

nephew because you're such a good dude. Okay.
You're the, you're, your uncle of the year, Kent. Uh, but he's got to realize this on his own.
The other two, for whatever reason, they got it. He hasn't picked up on it.
So I would liken this to a parent raising multiple children and some are going to get it quicker than others. Some,

you might have a prodigal or whatever. In this case, I wouldn't qualify this nephew as a prodigal, but what I would tell you is I would give him the total money makeover, George Campbell's book.
In fact, if you don't have George's book, I'll give that to you. I just think it's such a fabulous book, and give it to him, and then let it go.
And he knows what you believe. You've told him over and over and over again.

Oh, yeah.

He knows anything.

Right.

So here's my point.

When he gets to a point where he has realized some money pain, there's a good chance he's calling you. True or false? Probably.
I think that's all you can do. Rachel, do you have a different take on that? And I would be, you know, Kent, how old are you? I'm 66.
Okay, so you're 66. He's 28.
So what he spends his money on, and again, he's not using debts, right? So he's not, I mean, in a way, you can say, yeah, so you, for you, you think that's so, that's so silly. That's so stupid.
Why would he spend his money on that? But the truth is, too, people value different things in life. And what, you know, Winston and I spend on a weekend away, people may be like, that is so stupid.
What a waste of money. But it is.
I bought a Tesla. My dad couldn't believe that I bought an electric car.
And he thinks it's the stupidest thing ever. But I want a Tesla.
And like, I don't care what the 60-year-old guy, you know, even though I love my dad and respect him but like i i you know i want to i'm not living for him or what he likes she parks it next to me it's pretty cool and i park next to him too which is funny that is funny yeah i mean i charge next to his when i was younger yeah i spent stuff on on stuff my parents you know nice trips and things but i also oh you know i did that outside of you know i would always Kit my parents, you know, nice trips and things. But I also, you know, I did that outside of, you know, I would always feel safe.
Yeah, but Kent, you are different than him. And you keep coming back to that.
I did this. I did that.
And I think, too, he's going to learn, Kent, because even for me, right, I didn't go into debt. I was budgeting all of it.
But I mean, part of my financial struggle, it was the comparison game. It was accumulating.
I'm a spender. I love how I enjoy spending money.
So like I had to get to a point in my life where I finally just realized, Rachel, what is the motivation in all of this? And I had to like learn all of that. Right.
And so people's journey, even with money, is going to look different. And the lessons they're going to learn are different.
And you know what I mean? and that's for him. I'll try that approach and see what happens.
Yeah, Ken, I would just be, I would just be there for him. Be a friend, be an uncle that, that you don't have to teach him everything.
And, and, and the fact he's a 28 year old man and the most beautiful relationships are those that were an authority in your life and they end up kind of becoming peers with you. Yeah.
You actually respect those people a lot more. I mean, you mean, mom and dad, I laugh all the time.
I'm like, they are not perfect people. Love them.
But one thing they've done so well is they treat us like adults. They're no longer preaching or telling us what we should and shouldn't be doing.
They don't do that. They just are like, how's life? How are you doing? And it's a relationship at that point, right? So you may you know turning off the relationship by continuing to teach and preach he probably saying uncle kent let me live i'm okay you know yeah i think it's i do the soft so i don't see i came on the three or four times a year and it's um you know it's i don't go overboard but sure okay yeah i'd like to find some way that decide on his own.
Yeah. And I think one of the best ways to help people get there for them to realize on their own is asking questions.
And there's an interest. There'd be an interesting exercise for you in the next conversation with money is you don't tell him anything what to do.
You ask questions. That's great.
You'd be like, okay, so what are you doing with there? How was that? And, you know? I think that's incredible advice. I'll try that approach.
Yeah, because what happens is now you're entering into a conversation by handing him the ball. You're asking, you're not making a statement.
And I'd give him a few resources. Hang on the line.
I think Breaking Free from Broke is a fun book from George. It's just kind of a, hey, I listen to this show.
That's a young guy. Yeah.
He's got a great YouTube channel. But Ken, I appreciate.
Keep it simple. And I appreciate your heart.
I really do. I mean, the fact that 20 years ago you gave them as students, you know, foundations and personal finance.
Yeah. You know what I mean? Like you've done.
Uncle of the year. And honestly, the fact he's 28 and isn't in debt, that's a win for our world today.
Yeah, that's a great point. I'm like, victory you've done yeah yeah you've you love you have loved your nephews really well and i and i bet a lot of people wish they had an uncle kent in their life so i appreciate you yeah so fun thank you for the call what a great heart good good stuff great advice rachel that's really good all right quick break bills, you know.
I mean, this is the Ramsey Show. We're on time.
And we'll be right back. 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.
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 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.
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Or if you're listening on YouTube or podcast, just click the link in the description. Thrilled to have you with us here on The Ramsey Show.

I'm Ken Coleman.

Rachel Cruz is with me.

888-825-5225 is the phone number.

We'd love to coach you up, taking your calls about your money, your income.

That's a work-related situation from time to time, obviously.

888-825-5225.

Long Island is where Lisa is waiting for us. Lisa, how can we help today? Hi Rachel and Ken, thanks so much for taking my call.
You bet. What's up? My husband is not eligible for life insurance.
We've been denied many times due to health issues in the past. And my question for you is, we're going to be debt free except for our mortgage at the end of this year.
Wow, great job. And I want to know, thank you, I want to know if I should be taking that money that we were putting towards our debt and putting it into our outstanding mortgage, or if I should just be stocking it away and making like a huge emergency fund.
What's your emergency fund now? Is it more on the six-month side? Well, right now we just have the $1,000 emergency fund. Oh, I'm sorry.
That's right because you're working around debt. So, Lisa, the way you asked that question, is this basically you're saying because your husband can't get life insurance, should we have a massive savings account or should we pay off the home? Is that what you're essentially asking? Yes.
Yeah. The home.
The home has got greater value than that savings account just because of where you're at right now. What is the house worth right now? It's probably worth about $450,000 and we owe about $195,500 on it.
Yeah. Do you agree with that, Rachel? Yeah, for sure.
I mean, I would, when we say baby step three, it's three to six months of expenses. And for you, I would definitely lean on the six month side.
So I would have a six month emergency fund, not the three month on that end of the spectrum. And with his health condition, Lisa, is he, are you guys on ongoing, you know, medical treatments? Is there a diagnosis? Is there something that could be happening in the near future to him and his health? Or is it just? He does not currently have ongoing issues, no.
But I have seen, you know, changes in him. He works a lot.
Okay. And he's, I could see him kind of deteriorating.
Why did he not qualify, if you don't mind asking? If you don't mind me asking. Yeah, that's okay.
When he was 29, we were still dating, actually, and he needed bypass surgery. Okay.
So they're just kind of holding him. Have you tried, we're not fans of whole life, but sometimes whole life is more, has a bigger span of what they accept than term life.
Term life can be sometimes more narrow, I guess you could say, health-wise. Have you guys applied for whole life by chance? I did inquire about the, because he recently just turned 50.
i went through like the colonial pen you know you see the ads i'm like oh he's 50 i can get life insurance yeah and it was just outrageous yeah yeah yeah okay what is your what's your outrageously price i'm like i'd rather put that in my savings account yeah what's your combined income um he makes um he brings home about 88 a year and i'm around 24.

okay Yeah. What's your combined income? He makes, he brings home about 80 a year and I'm around 24.
Okay. And you guys have kids? I have, we have a 10 year old and a 14 year old.
Okay. Okay.
So I'm kind of like, I stayed home for five years and then my little one went to kindergarten. I started going back to work and then COVID hit and I took a hiatus.
And so I've kind of been floating between part-time jobs. So I have a part-time job during the week and then I walk dogs and dog fit as my like side hustle.
Okay. Okay.
Yeah. Because the reason for life insurance and for those of you listening and watching, it is, you know, in case something happens to you that your income can be replaced if people are dependent upon it.
So in the off chance, Lisa, obviously, we would never pray for this. But if something happened to him, you know, in a in a perfect world here in the next couple of months, you know, you would have six month emergency funds, you guys would be paying down on the house after that, after putting some money away in retirement.
And at that case, yeah, I mean, if there's a level that he just doesn't qualify, then there's no other option but to continue to put yourself in the best financial position. And that would be, in my opinion, to be paying down on the house.
I would be putting money away for retirement. Do you guys have retirement saved at all? Yes, I have a traditional 401k that was a rollover.
Okay.

Um, and that's got like about 120 in it.

Okay.

And does he have any?

We have two small, like very small Roth accounts that we are, you know, have good intentions,

but.

Sure.

Yeah.

So what I would do is after that six month emergency fund, I would, I would go down the baby steps and fund that 15% of your income into retirement. You both need to be doing that.
And then, yep. And then kids call it to all of that.
You know, Lisa, you're young enough that if, you know, Lord willing, his health, you know, and he lives quite a bit longer. I mean, and then if something were to happen with that initial investment you've got going on, you can make up some real ground.
But the reason why we really want you to pay the house off is, since you took us there, and it's a good question, let's stay there for a moment. Let's say that you pay the house off in the next two or three, four or five years.
Is that about what that would take? Did I get that right, or is it more than that? Well, if we take what we're putting towards the debt right now, I calculated it. It would knock like five years, eight months off of it.
So it would be about six years. Okay.
So let's just say that six years from now, the home is paid off, and you've been investing, as Rachel's been telling you to do, and something happens to him. While you don't have a huge insurance policy, what you have is a paid-for home.
And just imagine being on your own with the kiddos right now and not having a house payment. You just, you just, you just have to, that's a lot of peace, is it not? Absolutely.
Yeah. And so the idea of, because if you were to call us six years from now and we'd want you to pay off the house with all that cash that you would have stocked.
That's right. That's right.
And so I just want to, I want to give you kind of that, that full view of what we're saying here, because at this point now, the most important thing in your life is your home, especially when, you know, you've got kiddos. And, and so in that situation, uh, you are in some way self-insured because you can always downsize and sell the home and get a chunk of cash.
So just that's why we're saying go for the house and live wide open, praying that, you know, he's going to be okay because we don't know what tomorrow holds. And it's not going to be paid off tomorrow anyway, and you're not going to have a bunch of cash tomorrow anyway either.
So really go that direction. That's why we're telling you that.
That's going to put you in the best place of peace, which is what insurance is about anyway, is peace. I agree.
Thank you so much. Yeah, you bet.
Appreciate you sharing that story with us. And Lisa, I would check out Zander Insurance as well.
You can go to zander.com and just look around because they are an insurance broker where they'll go and shop multiple companies and not just one because if the one you mentioned, you call one for one company you're going to get just one answer where they actually do and again he may not qualify at all because of all the pre-existing conditions but it's worth a shot one more time just here for the next few years but yep maybe check them out all right let's go to another social media question you ready you did so well on the last one i thought she needs some she needs some more. This is Riley from Facebook.
Thoughts on giving your adult children money toward a down payment on their house? Yeah, I'm picking the good ones today. This is a good one.
What do you think? I'll wait for you. Okay, I do have thoughts on this because initially...
Laying the front row says no. Okay.
Initially, people are that. They're like, absolutely not not nope they need to work for it work for work for it what's interesting can we talked to so many people recently that have called this show that are young i mean they're 28 and they're paying off their house like they're like they're doing crazy good stuff like with right with their money they're gonna build wealth really quickly and so by the time that that 28 year old that calls us that doesn't have a mortgage payment by the time they're in their 50s and their kids are buying houses they're going to have multi-millions of dollars right um and there's a point that changing your family tree is it not enabling but is there a financial benefit to saying hey kids kids, we can fast forward.
I agree.

Your financial picture so that what if we help you?

And then they become 28 and debt free.

They start investing.

They change their kid.

And the line keeps changing.

And the stipulation to this is,

and I agree,

you have to have the margin to do so.

You are not borrowing from your baby steps.

That's right.

You aren't borrowing from your product. And it's not an enabling.
You have to know your kids and they still have to have the dignity to be adults and to stand on their own and know how to work. That's right.
But, you know, we were talking to Dr. Arthur Brooks from Harvard.
He's a Harvard professor and he talks about happiness. And he said, you know, one of the benefits of this is to be able to pour into your kids financially within assets.
And that's education. That's home.
Like if you can do that, fast forward the timeline for them, they start building wealth earlier to help their kids. It's just the trickle down effect.
I don't know. I'm not, I'm not fully against it on those two speculations.
Gotta run. This is the Ramsey show.
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Welcome back to the Ramsey Show. Excited to have you with us.
I'm Ken Coleman. And the graceful Rachel Cruz is alongside today.
Yeah, I know. I'm trying to look for another adjective.
So how about that? I'll take graceful. You'll take it? All right, very nice.
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Today's question comes from Elizabeth in Missouri. We have two elementary school age kids, five five and seven.
We budget for the kids to buy school lunch once a week. The school is cashless, so we add money to an account to be used for the kids to scan their ID card in the lunch line.
In addition to the regular lunch, the school sells snacks at checkout. We have told the kids that they can get lunch but would have to pay us back from their piggy bank money for any extra treats that they buy initially we thought this would be a good intro and teaching them about money management but then realized that it's more like buying on a credit card and paying mom and dad back later are we teaching them that credit is okay uh with this plan that in the cashless system where there's no tangible money to be exchanged.
How else can we teach young kids about money management? Oh, that's funny. No, I don't think that's teaching them about debt.
I'm like, they're buying snacks at the cash. As long as the pain comes from the piggy bank, they're learning.
Yes, yes. And the reality is too, you're teaching them about money management in 2024.
I mean, there's a lot of cashless vendors and retailers that it is what it is. So what are you going to do with that with your debit card and all? So, yeah, that doesn't bother me.
I think this is great, actually, because treats at school is ground zero for kids learning to kind of be content. You're the queen of contentment over there.
You know what I mean? Like you think about it. That's where their greatest temptation to spend is the treats.
I know. Do you have a story? Well, this just felt close to home because our school is the exact same way.
And there's an app, of course, that you go and you can load and use apple pay to load the

money back in the school lunches all of it um and it turned i didn't know this this is back when my oldest was this was a few years ago when i didn't know how everything worked and one of my friends was like you know you can go back and look and see what all they've bought and i was like what no and sure enough tracking little amelia's spending sure enough there were treats upon treats upon treats. And I was like.
Sweet girl. I was like.
I know. I just said Amelia.
She was like, well, some of my friends wanted some. She was buying some for other kids.
And I was like, no, no. So the teachers are great because when they're little like that, like first, second grade, you can email them and even tell the teacher, hey, they're only allowed a treat on Fridays.
And they kind of help, you know, manage it. But some of these kids, it wasn't always just Amelia, but some of these kids are bartering and hey, you pay me that and I'll get you.
I mean, they, they figure out how to work the system. Those little ones.
It's like an open air market overseas. It's amazing.
Yeah. I like it.
I like it. She wasn't buying treats for little Johnny, was she? Do what? Who's little Johnny? I don't know.
I'm making it up. I don't think so all right that'd be caroline probably let's be honest i love it i love it all right let's go to davenport iowa where daniel is daniel how can we help today hey jenny rachel how are you doing today good what's going on uh so i'm wondering if i should stay with my current employer or if i should start looking for a different job tell me more i gotta know more should we stay or should we go is the question so i am a husband and a father i got three little girls and i got another one due in about four and a half weeks wow congratulations thank you uh all girls I'll pray for you.

God bless you.

Lots of prayers right now.

So my current employer, I told them that my family is growing and what I'm making there just currently isn't cutting it.

And just being professional, I informed them I'm a trucker.

So I informed them I'm getting my hazardous materials endorsement

to get a job that pays me more money,

a job where I can be home daily so I can be with my girls every night.

Great.

They had no problem with that.

They understood.

But then they asked me to wait about a couple days to a week later saying that there could be a significant raise coming down the pipe

because they did some third-party research in our area and find out that their salary is pretty bottom of the barrel. So that was about four months ago, and I've been kind of politely pestering them.
And there has been no raise thus far, and every time I ask about it, they just say, because it has to get shot up to corporate. And they say that corporate has not given them an answer thus far.
Yeah. So you're being stonewalled.
So this was four months ago that they told you hang out for about four days or a week. So I love the fact that you have taken this into your own hands and getting that extra licensing.
So when are you eligible to step into that role

or driving those hazardous materials,

which gets you the big raise and a better schedule?

Well, I've done, you have to get like fingerprinting all this stuff

through like the federal government and everything.

I've done all that.

I literally just have to go to the DMV and take the test.

I've taken the test twice, but it's a very hard test,

and I missed it by four questions last time. So I just pass the test, get the endorsement, and I can walk onto these jobs.
Let's go. But do not quit yet.
We've got a baby on the way, three girls at home, a lot of responsibilities. Do not leave this current employer until we have the other gig lined up.
That's my clear-cut advice on that. So let's go.
Stop waiting for this current company, my friend. Daniel, the current company, they're not going to call you back.
I remember in high school, I'd have some buddies. I always got the quick clue, Rachel.
But I had some buddies who would ask a girl out about three or four times. After the second, no.
It's time to move on. And they're not answering your question.
They're kicking it up to corporate, and I'm not even sure they're talking to anybody in corporate. So the sign is on the wall is what I'm getting at.
It's time for you to take the next test. Let's get this thing done, and let's move on.
Okay. Now I'm only allowed one question, correct? No, go ahead.
When I say will allowed, I'm being a smart guy. Well, this just takes care of my immediate, but I actually took your Get Clear assessment.
Okay, great. And so I just kind of wanted some guidance on that.
Sure. So I'll just tell you my purpose statement.
I got it memorized. Okay.
But I was created to use my talents of communication, instruction, and imagination to perform my passions of leadership, advising, and performing to fulfill my mission of service by providing assistance and security. Gotcha.
So what's coming off there for me is that's a lot of people work, people and ideas, right? So when it's, when it's, there's some creativity in that, but mostly all of those answers were driving at you're good at people stuff and you enjoy people work, correct? Correct. Yeah.
All right. So at that point now, I mean, you, you, you, if you don't have the book, find the work you're wired to do, I'm going to give it to you.
Do you have the book? Cause you need, you need some more coaching. I actually currently have it checked out from the library.
Oh, well, fantastic. I'm going to give it to you for free.
And, and, and from paycheck to purpose. Great.
I'll give you both for free today. Christian, let's get this guy hooked up here in just a minute.
We'll give you both for free. But here's what you've got to do.

What you've got to do is take that purpose statement,

and you now look at that as a job description, okay?

Because it's all laid out for you.

So now you go, okay, if this is a job description for me,

then where in my area, where in the world of work where I live,

are jobs open that allow me to do this?

It's that simple.

So you're not sitting around scratching your head. What am I supposed to do? So it's you're going to be doing people work.
You talked about the imagination piece, the instruction piece. So that is a communicative.
You have the communication, instruction, and imagination. That is you are going to be working with people, training them.
The leadership thing popped up there. The advising thing popped up.
So, you know, guide, instructor, coach, that's the type of thing you're looking for. But it may take some time to get into that.
So I really like the path that we're on. Let's move into the hazardous materials right now, as soon as we can, bump up that salary, new baby, let's get everything stable there.
And then let's take the steps next to go into that work that you were absolutely wired to do. Hang on the line, Daniel.
You're a good man. You've already got your sign.
Your current company, they're not going to bring the race. Let's move on.
Hang on the line. We'll get you those two books, and I'll coach you through via the book.
All right, quick break. She's Rachel Cruz.
I'm Ken Coleman. This is The Ramsey Show.
We'll be right back. 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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Pre-order today. Welcome back to the Ramsey Show.
I'm Ken Coleman and Rachel Cruz is joining me right now for you.

AAA-825-5225 is the phone number. So if you've been paying attention to the news, and I imagine most of you have, you're seeing that the real estate market, you're paying attention to that, like, oh, mortgage rates are coming down off of some highs over the last several years.
Still probably some room to go. But the point is don't sit around waiting, waiting, waiting.
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Erie, Pennsylvania is where Susan is joining us. Susan, how can we help today? Hi, Rachel.
Hi, Ken. Thank you for taking my call.
My husband and I are on baby step seven, and I'm calling today to get your advice on the type of loan to apply for to cover the startup expenses for my brick and mortar takeout business. Tell me more about these expenses.
The expenses would be about $250,000, which would cover the kitchen setup, plus the contracting to actually make this happen and the, you know, food and things necessary to actually get going. So it's takeout only, not dine-in? Yes, sir.
You got it. Takeout only.
Have you been doing this like via your house right now with like a startup kitchen and then you're wanting to move or what's the, what's been your history in this? So my history is just that I've been cooking my whole life. But no, I have not done this professionally.
What kind of food? So it's going to be, we're going to specialize in smoked meats, plus a couple like great family recipes that I've had for, you know, 40 years and kind of just whatever I feel like making. Have you ever sold any of this amazing stuff? I mean, just even on Facebook.
Yeah. Tell us, Rachel's onto something here and I agree with her.
What have you sold? Like how much? And give us an idea. As far as quantity? Yeah.
Like, no, I mean, how have you sold it? Is it on Facebook? Are you selling $500 worth in a year, $20,000?

That's what we're trying to get a picture of.

Right now I'm selling maybe $500 a year.

Yeah, you're not ready to launch into a business,

whether it's in your backyard.

You've got to prove that this thing can actually make money.

We know you can cook.

Right, and so I have done that. I mean, I know that this will make money.
No, you don't. It's through my business plan, which, because I've read Christy Wright's book, Business Boutique, my business plan and my market research have confirmed my...

I love Christy Wright, and I love that book.

But if Christy were sitting here with us right now, I'm fairly certain...

She would say, be cooking out of your garage.

You've got to start cooking and selling in your home.

That's how we prove it.

Everything else is on paper, and I love your moxie.

And please, Susan, I am not in any way trying to discourage you. We just don't want you to go get a loan.
For $250,000, Susan. For something you've not proven.
And restaurants are the number one small businesses that close. Yeah.
The number one. High, high risk, low margin.
Yes. I mean, food is one of the, I mean, honestly, one of the worst industries in a sense to get into, but if you're just looking at numbers from an industry standpoint, um, so what I would do, so I would, so what I would do, Susan, if I were you, I would not take out this loan and I would start to cashflow this business, meaning I would get up and I would be selling, you know, eight to $10,000 worth out of my kitchen, which

then, you know, you're able to go in and buy some equipment for the garage, start cooking out of there, start, I mean, start making your way little by little to the point that you guys are flooded with cash, flooded with customers. You keep turning people away and then you start moving up, but you're going from point A to point Z is what it feels like.

I mean, you're going from from point a to point you know z is what it feels like i mean you're going all you're going all the way in yeah from a location standpoint okay but it's not i'm going it is and i'll be all the way and i own my brick and mortar i own the llc you own that you own the you own the building i guess ma'am yeah but but you need 250 000 i do for to purchase the equipment susan i love your spunk but a minute ago you said i agree with you both but it doesn't sound like you agree with this so i so so where where are we off here? You still think you need a $250,000 loan? Yes. Okay.
We don't think you need it. You've got to prove it.
You haven't proven this. You haven't even sold.
You haven't even lined up catering contracts within several thousand dollars to where you're delivering brisket for a local small business annual dinner with 250 people. That's right.
Like, I got to prove that before I would ever go this route.

Well, that's correct, but that's not, my vision isn't a restaurant and my vision isn't catering.

I know that.

And I'm fulfilling a need.

No, but what, no, you're not.

We don't know if there's a need yet.

You haven't proven that there's a need for your food.

I think your food's probably great. What I'm telling you is by proving it.
Are you having to turn down customers right now? No. No.
She doesn't have any customers. And I'm not trying to talk into catering.
I was making an example of, this is how we make money with your food. And we got to prove that first.
Yeah. And you're cooking in bulk.
You're cooking and all of this to do the takeout and all of it so i would be doing takeout dinners susan from your house right now and i would getting a facebook group there's a there's a there's a mom in our school and she's she bakes and she has a she has four refrigerators stocked in her garage and every friday there's a sale and she's like whatever i don't sell you I mean and she has an Instagram account Susan with thousands of followers I mean these and people that do want birthday cakes they come to her all of this right so like she's proven out out of her home that's right without a loan to do all of this and as this starts cash flowing then she's able to step up and say okay now I'm going to extend and I'm going to go share a space with someone, right? Her, it's, it's, uh, moving at the speed of cash, Susan. And that's what we're cautioning you with is that, um, the idea may be perfect.
I mean, moms that need food to go like, yes, all day, but I want, I want to see the list of, of, of people that are going to be buying from you. I want to see, you know, your social media account, your email list, like start building out this business so that when you do open up at the brick and mortar, you have the cash and you have the clientele that's going to be rushing to be able to cash flow and keep your business afloat.
Does that make sense? It does make sense. Susan, have you ever watched Shark Tank? Yes.
Okay. Because I don't want Rachel and I to seem like bad guys here, but if you've ever watched Shark Tank,

this would be like you standing in front of them going,

I need a $250,000 investment because that's essentially what this is,

is a loan and you're going to invest in yourself,

and that's a $250,000 loan.

If you were standing in front of the Sharks right now and said,

I'm looking for a $250,000 investment, and they walked you through,

okay, what's your annual revenue?

What have you sold?

And you said $500. What do you think they'd say to you? They would laugh at me.
Okay. We're not laughing at you.
We're gently saying, please don't do this. You are spending, here's what you asked us.
Should I spend $250,000 to make $500? Because that's all you've made at this point. We don't have it yet.
Please listen to what Rachel's saying. I promise you, it's the safest way to go.
If you believe in yourself this much, here's what I'd say. Do you think you can make $100,000 your first year? I venture to say, Susan, you'd probably say yes.
All right. So then let's go at it for two and a half years on your own and then buy your super fancy pants equipment because because you already own the brick and mortar you're halfway there so be patient yeah be patient rent equipment see if there's a business going out right like finds find creative ways because the hard thing is not yet i don't want her spending any money other than what she has in her home i'm with you on that yeah yeah yeah that's fair i know but but find creative ways can we get 50 families to commit to X amount of dollars to order her takeout dinners?

Yep, that's right.

For six months.

We've got to start to prove it on a simple level.

Totally, because I don't want to get the call, Susan, a year from now and say,

I have a $150,000 loan.

I've got to pay back because something didn't work, right?

That's the risk you take on when you take on debt.

And Christy's book would say, do not take on debt.

We should have phoned a friend.

I should have called Christy.

I know.

We'll call her on the break.

She agrees with us.

Hey, good, good call.

Thanks for the call.

This is The Ramsey Show. We'll be right back.