To Get Different Results You Must Do Different Things

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

Speaker 1 I'm Rachel Cruz, hosting this hour with best-selling author and my good friend, Jade Warshaw. And we'll be answering your questions.
So give us a call at 888-825-5225.

Speaker 1 And we'll be talking about your life, your money, your relationships, your work, anything and everything. So give us a call.
We're starting off in Tampa, Florida with Jasmine.

Speaker 1 Hey, Jasmine, welcome to the show.

Speaker 1 Jasmine, are you there?

Speaker 2 And

Speaker 2 there she is. Hi, Jasmine.

Speaker 2 Yeah, absolutely. How can we help?

Speaker 3 So I've been watching for about three days now and just kind of learned a whole lot. It's like a whole mind life changer.

Speaker 3 And I'm just trying to figure out how to approach, I guess, what,

Speaker 3 you know, what you guys are saying is the best thing for us to do and how to pay off our debt.

Speaker 3 Because we did have a situation recently where both of our cars broke. And so we did have to get into a different vehicle.
It was within like two weeks of fighting. They both both the motors went out.

Speaker 2 Oh, man. And so,

Speaker 2 yeah. So this was, it was bad.
Yeah.

Speaker 3 I was on the side of the road about three times because we tried to kind of save it. And so I had to use roadside assistance, things like that.

Speaker 3 But one of the cars we sent back and the other one we traded in. And so unfortunately, we do have a note now.
And the state that I live in, they don't.

Speaker 3 allow you to like change your mind because we were thinking about sending it back but they say we're not allowed to.

Speaker 2 What do you trade up to?

Speaker 3 It's

Speaker 3 for Expedition 2020.

Speaker 2 2020. Okay.

Speaker 2 What do you owe on it?

Speaker 3 $41,500.

Speaker 2 Mama. Wait a second.

Speaker 2 You traded all the way up. Okay.
I know. I know.
I know. If you were to sell it, because I mean, this is still pretty fresh.
And

Speaker 2 thankfully, you got to use vehicle. So somebody else took the biggest hit.
If you were to sell it tomorrow, do you think you could get the $41,000 back?

Speaker 2 Private seller? I have no idea. Okay, I think that you should get it from a deal from a dealership.

Speaker 2 Yes, ma'am. Yeah, yeah, yeah, yeah.

Speaker 1 Because, yeah, usually you'll get a better deal from a private seller. So, yeah, so there's a good, a good chance there.
So, Jasmine, how much?

Speaker 1 Um, well, number one, thanks for being a new listener in three days. So, that you're you're already your mind's churning, which I love.
So, give us your overall just kind of financial picture.

Speaker 1 How much debt do you guys have in total?

Speaker 3 Um, so it's my husband and I, um, and we do have, in total, $123,865.

Speaker 3 I've been totaling this up since I've been listening to y'all for the past three days. I've been going crazy, like writing everything down from least to greatest.

Speaker 3 But I do have student loans, and these student loans are mine. They're not my husband's.
They're mine. It's $63,508.
I did just graduate nursing school in July.

Speaker 2 So I'm about to make my board. And the 63.

Speaker 1 And the 63 is part of the 123, correct?

Speaker 2 Yeah. Okay, so what's the remaining 60?

Speaker 1 What's the remaining 60?

Speaker 3 The $41,526 for the truck. Yeah.
And then we have like other debt, what, $18,831.

Speaker 2 What is that? Credit cards?

Speaker 3 Credit cards, old energy bill or electricity from like back in the day. We've been together for 13 years.

Speaker 2 So you've got some stuff in

Speaker 2 default?

Speaker 2 Yeah. Collections.
Yeah. Okay.
Okay.

Speaker 2 Are you are you prioritizing the collections stuff at all?

Speaker 3 I don't know. That's why I'm calling.
I don't really know what to do.

Speaker 3 I know that snowball was supposed to go from least to greatest, but I didn't know if I'm supposed to just keep going with that or if I should. Because my student loans right now, they're not

Speaker 3 they're in deferment because I just finished school. So I'm not supposed to start paying until like December, January type.

Speaker 2 Well, I do want you to have my I do want you current on things that need to be current on things like electricity, if you're not current on your phone bills, anything like that, that you're not current on, that's part of your monthly flow.

Speaker 2 I don't want you not to be current. So the first thing would be, let's get current on that.
Then we're working through this debt snowball.

Speaker 2 That way, you're not, it's not getting worse and worse for your month-to-month stuff. Yeah.

Speaker 1 And the collection aspect, Jasmine.

Speaker 3 Energy bill is an old energy bill. It's from like 10 years ago.
All of our current bills are current.

Speaker 2 We're actually like ahead of our current bills.

Speaker 3 We're A on top of that.

Speaker 3 Everything is current. We got money in our emergency fund and everything, but I just don't know how to do it.

Speaker 2 What's in the emergency fund?

Speaker 3 Our emergency fund right now,

Speaker 3 $700, like

Speaker 2 $1,800,

Speaker 2 $1,830.

Speaker 3 But I know we're only supposed to have $1,000, so I was going to take the rest of it and put somewhere else. I just don't know what that is.

Speaker 2 What I would do, what's in collections? How much is it?

Speaker 3 $18,830.

Speaker 1 That's all in collections.

Speaker 2 Oh, $18,000 is all in collections.

Speaker 3 Yeah, it's like old, it's like a gang of old bills.

Speaker 2 So, so, Jasmine, yeah.

Speaker 1 So, what we found when this happens, you actually probably can negotiate a lot with this considering how old these bills are because they've probably been sold to collection company.

Speaker 1 I mean, it's probably on the fourth person now that has these bills because they just keep selling them. Um, so what I would do is, and they're all going to be different ones, right?

Speaker 1 So, maybe what, four or five different types of debt within that 18,000?

Speaker 2 Yeah, you've got the energy bill. What are the other credit cards?

Speaker 3 It's 11 different ones.

Speaker 2 11.

Speaker 1 Okay.

Speaker 1 So I would be, which is going to take, it's going to be your part-time job here for the next two weeks, Jasmine, is I would contact all of those collection companies and just say and get it in writing if you can.

Speaker 1 But sometimes, I mean, honestly, I mean, it's sometimes pennies to the dollar, you know, that they will actually settle with you. So that would be my first step just to say, hey, these are old.

Speaker 2 I don't have any money.

Speaker 1 I have $1,800 to mine, or I won't even tell them that, but like, I don't have any money.

Speaker 1 And what, what can I do to get these settled? Cause I'm ready to get these out. And just see from a, and they're going to hear you as motivated, which is good.

Speaker 1 And see if you can talk them down because you really might be able to.

Speaker 2 And you've got $800 cash that they don't have to know that, but say one of them is for $400.

Speaker 2 Say, can I settle this today for $150? I bet they will. I'll give you cash.
Get it in writing.

Speaker 1 Yeah. Yeah.
Just get everything in writing and that, Jasmine. And how much are you guys making a year, you and your husband combined?

Speaker 3 um so i just finished nursing school okay i i start working on the 23rd um right now so i make nothing but he makes um somewhere between 90 and 100k okay and how much will you make

Speaker 3 i'm projected to make about 70.

Speaker 1 oh great excellent okay you guys will be good so honestly jasmine i mean yeah if i were you i always like to play like a theoretical game let's just pretend you guys got rid of the of the car right you sold it um

Speaker 1 maybe make three $3,000 on it since it came from a dealership department.

Speaker 2 So who knows, right?

Speaker 1 You actually could get more. We'll see.

Speaker 1 I would do that. I would save up ASAP and get a, and get a couple thousand dollars to replace that car.
I would do that first. And then you look at your debt, and that's $81,000 left.

Speaker 1 If you get rid of that $41,000, and then let's pretend that that, you know, some of that debt, the $18,000, what it could be.

Speaker 2 It's cut down a cup of

Speaker 2 half, maybe. Yeah.

Speaker 1 So that's $71,000. And you guys could pay this off in 18 months.

Speaker 1 Like if you guys throw your entire salary at this debt and some of his and live on a really tight budget, I mean, Jasmine, you guys could have a completely different financial picture in 18 months.

Speaker 2 It's not even my debt and my heart started beating fast. I got excited for you, Jasmine.

Speaker 1 So, hey, hold on the line, Jasmine. And Christian's going to pick up and we're going to give you Financial Peace University.

Speaker 1 This is our nine-lesson course that's going to walk through everything from the debt snowball, building a budget to marriage and money, even talking about you and your husband working together to insurance, mortgages, everything you need to know from a basic love about money.

Speaker 1 That is our course. You guys sit down, go through that together, and then every dollar, the premium version that connects to your bank accounts, we're going to give that to you as well.

Speaker 1 We're excited for you. Thanks for the call.

Speaker 1 So one thing that is approaching quickly, Jade, is the Live Like No One Else cruise. We have 85% of the cabins booked and you guys don't want to miss it.
We're going to Turks and Caicos.

Speaker 1 We're going to St. Thomas, Puerto Rico, the Bahamas.
It's just going to be, it's going to be amazing. I mean, yep.

Speaker 1 And your tickets, of course, include with the cruise ship, all your food is included, even room service. There's lounges by all the pools and the hot tubs.

Speaker 1 And we're all going to be there, all the Ramsey personalities and a whole lineup of other guests. So it's going to be a really, really fun.

Speaker 1 fun week you all and again this is for those of you on baby steps four and beyond and we want to celebrate you because we talk about living like no one else.

Speaker 1 So later you can live and you can give like no one else. And this is part of enjoying the money and where you are financially.
And you're going to do it with us. And we can't wait.

Speaker 1 So it is March 22nd through the 29th and it's coming up fast. So you do not want to miss this incredible vacation.

Speaker 1 You can go to ramseysolutions.com/slash cruise, or you can click the link in the description if you are watching on YouTube or listening on podcasts.

Speaker 2 Love it.

Speaker 1 Up next, we have Shannon in Pensacola, Florida. Hey, Shannon, Welcome to the show.

Speaker 2 How are y'all? We are doing well. Thanks for calling.
How can we help?

Speaker 2 Well,

Speaker 3 I just have a random question because I've been getting, so I own a home here in Pensacola. That's my only debt.

Speaker 3 And I have a current interest rate at 7.49.

Speaker 3 And I've been getting, and, you know, I just feel like there's just so much fraud going on.

Speaker 3 And I don't know how y'all feel about that.

Speaker 2 What kind of fraud? What do you mean?

Speaker 3 Well, I just mean like on so many different levels. So I had a kid called me today

Speaker 3 who said, oh, well, we can give you, you have an FHA loan, so we can give you a five-point, I don't know what he said, 4-2.

Speaker 3 And, oh, no money down. I go, wait a minute.
I'm a business development person. So I'm like, well, what's in it for you guys?

Speaker 2 So he wanted you to refinance, and he's going to get the fees associated with the business.

Speaker 3 He wanted me to refinance, but I'm like, wait a minute, how does this work out? Because I keep in touch with my current mortgage broker that I use to buy the home. Uh-huh.

Speaker 3 I keep in touch with her, and I say, hey, what are they at? Because I got a letter from FHA who said, hey, we can go down to 5.25 to 5.2%.

Speaker 3 And I just wanted to know y'all's thoughts on that. And I just feel like I'm like, okay.

Speaker 2 I mean, you're right.

Speaker 2 We're going to start.

Speaker 3 You're going to get away.

Speaker 3 And I know this election, there's just so much on our story.

Speaker 2 All right, Shannon.

Speaker 3 Do it again.

Speaker 2 Let's roll it on home. All right.
Here's the thing. Yeah.
Yes.

Speaker 2 I think that we are starting to be at a turning point when we're going to see, I mean, we already have seen mortgage interest rates go down.

Speaker 1 And I think they're going down again this month, is what the Fed is saying.

Speaker 2 They should.

Speaker 2 And we might even see it before they release you know their um report or in their uh report of the interest rates whatever but my point is you get to decide right if you don't want to refinance you don't have to refinance and if there's an offer i want my mortgage to go down y'all okay well

Speaker 2 if there's an offer that presents itself to you and you're interested in it i i just you started out the conversation start talking about scams and then we kind of went to the election Then we kind of went to interest rates.

Speaker 2 And I want to kind of clear it out. Being able to refinance your house at a lower interest rate is not a scam unless you do your due diligence and find, okay, this is not reasonable.

Speaker 2 I'm not going to be able to do a scammer for it. Yeah.

Speaker 1 Some random guy that calls you. I probably will.

Speaker 3 I'm just thinking the guy that called me, I'm just making a point

Speaker 3 is that he's like, oh, it doesn't cost you anything. And I'm like, hmm, wait a minute.
That's kind of where I'm coming down.

Speaker 1 So, yeah, they're probably, to your point, anything that comes up that is, that is exciting right now. We find that's always in the financial industry.

Speaker 1 There's always going to be people prying on that, right? So, whether it's mortgage, you know, mortgage rates are dropping.

Speaker 1 So, people are going to clamor to refinance and there may be scammers out of that. Crypto became a big thing.
Scammers flock to that. They will flock to try to get people's money.

Speaker 1 So, that's where your discernment, Shannon, comes in.

Speaker 1 That if you choose and probably will, and anyone listening, refinancing, you know, if you're going to be in the house long-term, it's a it's a great option.

Speaker 1 And so maybe you wait another six months to see, continue, you know, after the election to see if it keeps dropping. And then maybe Shannon, you decide to do that.

Speaker 1 Then I would use a reputable broker, whether you have one. Churchill Mortgage is one that we recommend here at Ramsey.

Speaker 2 I'm from Oklahoma.

Speaker 3 She's from Oklahoma and I must trust her.

Speaker 2 Yeah, that's great. That's great.

Speaker 1 Yeah, yeah, yeah. So

Speaker 2 doing it reputably.

Speaker 1 So yeah, I think for sure that it would be, I think it's a great option and people will be doing that more and more.

Speaker 2 And I think you had great advice there, Rachel. If you're looking at rates and you're seeing them go down, I wouldn't like jump to refinance instantly.

Speaker 2 I'd like to let it happen, let them roll back because they're probably not going to jump right back up. Right?

Speaker 2 We have finally gotten to the point where it's like, okay, inflation is at this point, unemployment's at this point. It has to happen.
So I'm with you.

Speaker 2 I'd probably wait until after the election, let the chips fall where they do, and then you can make the wisest decision.

Speaker 1 For sure. All right.
Up next, we got Mike in Dayton, Ohio.

Speaker 2 Hi, Mike. Welcome to the show.

Speaker 3 Hello. How are you?

Speaker 1 We're doing great. How can we help?

Speaker 3 Okay. I'm 42 years old, and I made some bad financial decisions in my life regarding 401k and stuff like that.
Okay.

Speaker 2 Got divorced.

Speaker 3 Ex-wife took half the 401k and I've cashed it in a few times. And I'm basically starting over at 42.
I have like 21,000 in my 401k now.

Speaker 3 And I'm only putting in like 6% because we're on baby step number two.

Speaker 3 And I just want to see, is it too late?

Speaker 1 No. Not at all.

Speaker 2 Not at all. Not by a long shot.
No.

Speaker 1 And if anything, this will probably scare you more, Mike. I would advise you to even pause that 6%

Speaker 1 while you're getting out of debt. Because here's the deal.
When you free up so much of your payments, you're able to throw then 15% of your income at retirement and be able to catch up.

Speaker 1 So how much debt do you guys have?

Speaker 3 The house we got like $83,000 on, and the truck we're trying to get paid off.

Speaker 3 We should have paid off by the end of this year.

Speaker 2 How much is it?

Speaker 3 I got like 10,000, almost $11,000 left in a minute.

Speaker 2 Okay.

Speaker 3 And we're,

Speaker 2 you keep saying we.

Speaker 1 Who's we?

Speaker 2 I know you were divorced.

Speaker 1 I thought you were. Okay.
So you got divorced.

Speaker 2 You remarried. Yeah.

Speaker 3 My ex-wife took half a 401k. I got remarried.

Speaker 2 Okay. Perfect.
Okay.

Speaker 1 Perfect.

Speaker 2 So $11,000 on the truck. A lot better money.

Speaker 2 Yeah.

Speaker 1 That's great. Okay.
So $11,000 on the truck. What else do you guys have?

Speaker 3 Just a mortgage.

Speaker 2 Okay. So the $11,000.
Okay. Yeah.

Speaker 1 So the mortgage goes obviously in baby step six. So we're not worried about that right now.
So yeah, I would get this $11,000. How much do you guys make combined income?

Speaker 3 I make $3,784 an hour, and she makes about $30,000.

Speaker 2 Okay. What's that amount to every month?

Speaker 3 Do what now?

Speaker 2 What's that amount to every month? What do you see monthly on your budget?

Speaker 3 Oh,

Speaker 3 around $5,000, $6,000 a month. Okay.

Speaker 3 Just for me.

Speaker 1 Just for you?

Speaker 2 Yes.

Speaker 1 And then what does she bring in a month?

Speaker 3 Yeah, it's close to $5,000.

Speaker 2 Okay. That's great.
So you guys are making $120,000 a year?

Speaker 2 Fair. Yeah, close to

Speaker 1 Debbie. So, yeah, I would pause that 6% mic, honestly, until this truck's paid off.
And then you guys get a fully funded emergency fund. And then press play.
And then you got 15%.

Speaker 1 Jade's got her fancy calculator out. So we're going to be, are you able to?

Speaker 2 Yeah, I got it in there. Say, so you were worried earlier.
You're like, I'm 42. I've made these mistakes.
And here's the thing. This is just the picture you painted today.

Speaker 2 Let's pretend you clear out this car, you clear out this debt pretty quickly. And you said you make about $120,000 a year.

Speaker 2 You know, if you're putting around 15% into investments, that's about $1,500 a month. Let's say you do that from the time you're 42 to the time you're 65.

Speaker 2 And I'm just using the Ramsey Solutions investment calculator. You already had 21,000 in there, which is great.

Speaker 2 So if every month you contribute $1,500 at a 10% rate of return, which is average, contrary to popular belief, I mean, that's almost $2 million. It's $1.8 million.

Speaker 2 And that's a big deal. That's plenty.

Speaker 1 And that depends on the current income you have, Mike.

Speaker 2 That's right.

Speaker 1 That's not you getting raises and your wife changing jobs. I mean, it will continue.
Usually for most people, their income continues to go up in their lifetime. So $2 million, Mike.
you're on track.

Speaker 1 Don't you worry. But, hey, it's a good little, like, you know, we talk about how fear can be a gift.
There's a great book called Fear is a Gift, and there was a gift of fear. And

Speaker 1 there is a beauty in it because it kind of does shake you up a little bit.

Speaker 2 Oh my gosh, am I late?

Speaker 1 And then you're able to say, okay, what changes do we need to make for this not to be a reality? So you're doing great, Mike.

Speaker 1 I appreciate you calling, and good luck to you and your wife because, yeah, you guys are on track. This is the Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show. I am Rachel Cruz, hosting this hour with Jade Warshaw and answering your questions.
So give us a call at 888-825-5225. We are going to Cameron in Atlanta.

Speaker 1 Hey, Cameron, welcome to the show.

Speaker 3 Hey, how's it going?

Speaker 1 Doing great.

Speaker 2 How can we help?

Speaker 3 Yeah, I'm contemplating bankruptcy and I wanted to call you guys and see if that's something that you guys would recommend.

Speaker 1 Oh gosh, Cameron, what's going on?

Speaker 3 Well, I stopped paying my credit cards probably

Speaker 3 about

Speaker 3 seven to eight months ago. And

Speaker 3 when I stopped paying, I was at approximately $85,000 in credit card debt.

Speaker 1 What caused you to stop paying?

Speaker 3 So I started a business about

Speaker 3 three years ago, and we just had a hard year.

Speaker 3 And I'm on and off working with my brother-in-law who owns his own business business as well. So when I get slow, I call him

Speaker 3 work for him if he has the work. But it was just a very slow year last year.
And so we kind of had to live off credit cards.

Speaker 2 Is there other debt or just the 85,000?

Speaker 3 I have a mortgage, but no car or anything else like that.

Speaker 1 Okay. And was this $85,000 for business expenses that you were trying to keep afloat when you were slow? Or was this

Speaker 1 lifestyle that this was all personal?

Speaker 1 um

Speaker 3 i'd say probably 20 to 30 000 of it was business and the rest was uh just

Speaker 3 paying bills and any cash that came in that you know mortgage doesn't take a credit card so yeah

Speaker 3 the mortgage are you married mortgage and then yes i am kids

Speaker 1 two kids two kids okay how are you and your wife how's she doing

Speaker 3 good i mean we're doing as good as we can

Speaker 2 what's she bringing in What's her income?

Speaker 3 She's a stay-at-home mom.

Speaker 2 Okay. And what are you currently bringing in?

Speaker 3 My last year's adjusted gross income was $35,000.

Speaker 3 But that was the year that, you know, we really had to kind of make things tight.

Speaker 2 Cameron,

Speaker 1 does your wife know everything going on?

Speaker 3 Yeah. Yeah.

Speaker 2 That you're going to be transparent with that.

Speaker 1 That you're going to be filing, like that y'all are talking about bankruptcy?

Speaker 3 Yeah, yeah. Yeah.
The debts in both are, or some of the debts in her name, some's in my name, and we're both on the same page.

Speaker 2 Okay, so

Speaker 2 here's my take on this. Um, I have one more question.
I want to know, how old are the kids?

Speaker 3 Uh, four years old and two years old.

Speaker 2 Okay, and I also want to know what were you making? What was a good year for you?

Speaker 3 I'd probably be the year before. Um,

Speaker 3 I think business made about 200,000. I made about half of that.

Speaker 2 So, you took home, you took, you pocketed 100,000 as your own paycheck?

Speaker 3 Approximately.

Speaker 3 I'd have to pull up my paperwork, but yeah, between 80 and 100,000 was probably a good year for me.

Speaker 2 Okay. So I think the problem is

Speaker 2 there's several problems here, but there's been an inconsistency in pay, and it's been on the lower end for a really long time.

Speaker 2 And you did have a really bad year, but I don't think that was, I think that just was the final nail in the coffin, so to speak.

Speaker 2 Yeah.

Speaker 2 What's happened here is you guys, whether you realize it or not, you're making a series of choices.

Speaker 2 The longer that you go with this lower income and that you go where your wife says, hey, I'm staying at home.

Speaker 2 Because again, staying at home is a choice that you afford to make or don't afford to make, if that makes sense. And right now, you guys both have to be working.

Speaker 2 You've got to get a higher income. She's got to get some sort of income.

Speaker 2 That's the only way this works, because even if you file for bankruptcy, you're going to find yourself right back in the same situation again. And it's going to be that much more frustrating.

Speaker 2 So the root of the problem has to change.

Speaker 2 What do you do by trade? What's your specialty?

Speaker 3 So by trade, when I work for my brother-in-law, a commercial electrician,

Speaker 3 I currently work for myself building decks, pergolas, outdoor wooden structures.

Speaker 2 Okay.

Speaker 2 So

Speaker 2 I think that obviously you know how to make money doing that, but right now that feels like an amazing side hustle while you do something full-time.

Speaker 3 Which I have this year, I have gone full-time with my brother-in-law.

Speaker 2 Okay. And what are you making from that?

Speaker 2 This year? Okay. $33,000 an hour.

Speaker 3 So

Speaker 3 I think that's roughly $63,000 a year or something like that. Okay.

Speaker 2 That's great. Okay.
So at this point, it's all about figuring out how to pay off this debt, right? Their credit cards. How many separate credit cards are there?

Speaker 3 i would say i mean i have them here i can count one two three four five six seven eight nine

Speaker 2 ten eleven twelve thirteen fourteen fifteen sixteen seventeen okay so if you were to file for a bankruptcy basically what they're going to do is a lot of what we're doing right now they're going to analyze your income they're going to analyze how much debt you have what assets you could sell off in order to pay it and that's basically what we're going to do only you're going to have control in the process it's not just the government reaching in and doing it all for you.

Speaker 1 Yeah, because what's going to happen, Cameron, you know, the bankruptcy route, even though it stays on your report, it follows you for a decade, right? I mean, like it is

Speaker 1 the long-term play here

Speaker 1 is it sounds easy just to wipe it clean and start over.

Speaker 1 And I'm afraid, Cameron, the way you're speaking about this is that that's where you're leaning because that's the easy button is what it feels like.

Speaker 1 And what you have to realize about money is that money, it is, it is behavior change.

Speaker 1 Because to Jade's point, if you do this and you guys go back to, I mean, you charge $55,000 for your lifestyle on credit cards instead of saying, oh, crap, I need to probably

Speaker 1 work. I got to go up my income and we can't keep doing this.
And so by just quote unquote, the easy button, which it's not easy. I mean, it is.
Bankruptcy is traumatic.

Speaker 2 I mean, it's terrible.

Speaker 3 No, I completely agree with you.

Speaker 2 Okay. Not to cut you off.
I apologize. No, no, no, no.

Speaker 1 I want you to because I am a little worried. I mean, there is a part of me where I'm like, how's your wife?

Speaker 2 You said she's good. I'd be like, Cameron, I would be

Speaker 2 quite good.

Speaker 3 I mean, like, she's, you know, obviously worried about the situation as well.

Speaker 2 But she knows what's going on. Okay.

Speaker 1 I know. I just, I want the,

Speaker 1 yeah, the urgency of.

Speaker 3 We've stopped paying our credit cards.

Speaker 3 We've just been cash only. And I've made that a point to her as well that there's just, you know, we have one other credit card that's still open and we haven't touched it.

Speaker 2 Yeah, you got to cut that up.

Speaker 2 You got to cut that up.

Speaker 1 So, you've closed, have you closed all those accounts?

Speaker 3 The one that we have, I only use it when I run work because I have to buy material to build decks and stuff.

Speaker 3 I buy the material, I get paid, I pay it off. That's the only credit card I use now, but I'm trying to get to cash only.
That's the only time I ever use it because that makes me my cash.

Speaker 2 So, what are y'all doing with okay?

Speaker 1 So, so when we get off the call, Cameron, get out a pair of scissors and cut up all 19 credit cards. Get rid of them.
So, it's not even, they're not even there.

Speaker 2 And then the other ones are gone. But that's the only one we got.
Right. I wouldn't even keep that, though, because to Rachel's point, this is a behavior thing.

Speaker 2 This is, if I don't have the money to do it, I put it on a credit card. And that goes for personal, that goes for groceries, that goes for business.

Speaker 2 And what happens is, and I'm speaking from experience, when you cut off that, you know, that supply. That bottom quote lifeline.
That lifeline. Yeah.

Speaker 2 When you cut that off, it rises up a creativity inside of you to get stuff done. GSD.
that's what we call it. And that's what happens.
You go, okay, I got to do this. What do I have to do?

Speaker 2 And suddenly you notice your lawnmower and you go, oh, that could make me some money. And suddenly you know, your wife notices the oven and she goes, oh, that can make me some money.

Speaker 2 And you start looking at other things that can give you money that's actually your money that you don't have to repay. And that's so powerful.

Speaker 2 And right now, that credit card, it's a crutch and it's keeping you financially weak.

Speaker 1 Is that what you're doing? For the jobs, have them fund the money beforehand, right?

Speaker 1 It just, it changes the whole perspective so so yeah so Cameron you are not as we finish up this call I would you are not bankrupt no

Speaker 1 I would list out all of those debts those credit card debts smallest to largest you are behind on them so they've probably at this point gone into collections some of them may have so I would contact them and just say hey we don't have any money to to pay this but will you settle with us and if you do that get in writing and then and it's gonna take you guys i mean yeah you're making 63 with hopefully some side hustle.

Speaker 1 You can get that up to maybe 80.

Speaker 2 Mama's got to work too.

Speaker 1 And she does. She like anything that she can do in the evenings, she can do it things remotely, virtually.
And she's probably going to hate it, Cameron.

Speaker 1 She may not want to, but for you guys to get out of this ASAP, something has to change. If you keep doing what you've been doing, you're going to keep getting what you've been getting.

Speaker 1 So I'm thankful that you guys are on a cash system now. You're, that's a good

Speaker 1 habit to get in.

Speaker 1 But

Speaker 1 I would grind it out. And it's going to take you guys, you know, three to four years,

Speaker 1 but you can do it. You can do it.

Speaker 2 We see it all the time.

Speaker 1 So we're rooting for you guys, Cameron. Thanks for the call.

Speaker 1 Welcome back to the Ramsey Show. We're going to go to Mark in Chicago.
Hey, Mark, welcome to the show.

Speaker 3 Hey, thanks for taking my call.

Speaker 1 Absolutely. How can we help?

Speaker 3 Well, I've been doing a bunch of research on investment accounts and what I have available. And I made a change in my investment strategy that feels very unorthodox.

Speaker 3 And I was looking to get your guys' opinion on it. My employer offers profit sharing.
So typically, the order of operation would be to

Speaker 3 invest in the 401k up until the employer match, but they do profit sharing and it's not dependent on my contribution.

Speaker 3 So I recently just pulled back almost all of my 401k contributions, and we also have an HSA, and I've been putting the contributions into that.

Speaker 3 So looking into it, the HSA seems to be a what they call a triple tax advantage account.

Speaker 2 Yeah.

Speaker 3 So the math shows that this would be the correct route, but it seems like such a big shift and over the span of 20 to 30 years, it seems like it could have huge impacts either for good or bad.

Speaker 3 So I just want to get your guys' opinion on that.

Speaker 1 Yeah, what's the current match that your employer has or the contribution that you don't you don't how much is it?

Speaker 3 15%. Nice.

Speaker 1 Wow. So they're giving you 15% without a match.
Is that what you're saying?

Speaker 3 Correct. Yeah.
No, it's not guaranteed every year, but I've been with the company for about three years and I've talked to people who have been there for 10.

Speaker 3 And since for that whole 10 years, it's been 15% every year.

Speaker 2 Sheesh.

Speaker 2 That's awesome. That's pretty great.
Okay. And then the profit sharing, how does that shake out?

Speaker 2 Is it a monthly thing? How do they distribute that?

Speaker 3 Once a year.

Speaker 2 Once a year. Lump sum.

Speaker 3 Yeah.

Speaker 2 Okay.

Speaker 2 And why can't that just be a great bonus and part of your income?

Speaker 2 Like, you're not viewing it as a supplement to your income?

Speaker 3 I'm viewing it as a supplement to my retirement. Well, yeah.
A combination of my retirement with the 401k and the HSA. If I were to.

Speaker 2 But they're not investing it for you. You're seeing it reflected into your paycheck, right?

Speaker 3 No, they're investing it into my 401k.

Speaker 2 Got it.

Speaker 2 Interesting.

Speaker 2 The entire amount.

Speaker 3 Correct. And then, so I basically shifted my contributions to the 401k to the HSA, which I can invest the funds in there without any taxes being taken out.

Speaker 2 So, again, I just want to clarify this. So, you've got the profit sharing that is equivalent to however many thousands of dollars a month that they're investing for you, and you get a 15% match.

Speaker 2 Is that right?

Speaker 3 No, I'm sorry. It's only the

Speaker 3 15%.

Speaker 2 Or the profit sharing is the 15%.

Speaker 3 Correct. They do not match anything that I contribute.
Okay. You just give the 15% contribution.

Speaker 2 Then I probably wouldn't do your strategy. I would consider that 15% a match in the words that you used, and I would invest my own 15%

Speaker 2 because it sounds like this is something that happens

Speaker 2 consistently, but not necessarily all the time.

Speaker 1 Do you have a a Roth IRA, Mark?

Speaker 3 I do, but I haven't been contributing to it.

Speaker 2 Okay.

Speaker 3 $8,000 in that.

Speaker 2 Okay.

Speaker 1 Yeah, because there's something powerful about having control over those investments and something like a Roth IRA. And the HSA, it is a great, I mean, my husband and I, we do this.

Speaker 1 We, you know, we'll max out what we can every year. And the HSA is another great vehicle to do it.

Speaker 2 So, um, but I because he's probably, you're probably maxing out your 401k with their 15% contribution plus maybe whatever a couple percent percentages on your end, right?

Speaker 3 So right now I'm contributing 4% to my 401k. They're contributing 15% of my salary.

Speaker 2 Uh-huh. And are you maxing it out? 12%

Speaker 3 into the HSA.

Speaker 2 Okay, but are you maxing out the 401k every year? No. You're not.
Okay.

Speaker 2 So you could,

Speaker 2 it's a great match. You could max that out, but I'm with Rachel.
I would then go to a Roth IRA and max that out before I went to an HSA.

Speaker 3 Okay.

Speaker 2 You're going to have the whole market open to you in a Roth IRA.

Speaker 3 Right. But if I invest the funds in the HSA as well, wouldn't that be equivalent to

Speaker 3 a Roth IRA or similar?

Speaker 2 Not necessarily. I mean, you have to wait number one until I think you're age 65 for those funds to be available to you.

Speaker 2 So it does.

Speaker 1 Versus 59 and a half.

Speaker 2 Yeah, versus 59 and a half. So it's a longer tail on that.
But also, I think that, again, you're going to have the entire market open to you in a Roth IRA, which is what I'd be looking for.

Speaker 2 Yeah, that's just what I would do.

Speaker 1 Yeah. And I think for anyone listening, you know, that 15% mark, which,

Speaker 1 you know, once you're out of debt and you have that fully funded emergency fund, we say to go, you know, use the employer's match. Because that's free money.

Speaker 1 But in his case, you're getting that regardless of whether you're putting money in or not. But you want to go up to the match, use the Roth IRA, max it out.

Speaker 1 If you have money left, you can go back to your 401k, max it out.

Speaker 1 And then above that, then looking into other investment options, you know, because those are two retirement type sheltered tax sheltered accounts.

Speaker 1 And so, you know, prioritizing those for retirement specifically and then other investment strategies that you can do.

Speaker 1 I mean, you can do HSA, you can do paid for real estate, you can do even index funds, right? If you want to, you know, a Vanguard type account, right? So there's other options for investing out there.

Speaker 1 But just looking at those retirement buckets first and foremost is key. But I would also sit down with a Smart Vestor Pro in your area and get some of that.

Speaker 1 Because from the tax perspective, I would want to see the numbers being laid out. I agree.
Because it is a little bit of a unique situation with your employer match. I mean, that's crazy.

Speaker 2 Yeah.

Speaker 1 Contributing 15% into the 401k without you even. having a match or you putting in a portion of yours.

Speaker 1 So it may be good to run some of those numbers long term because I would want the most tax benefit for you.

Speaker 1 But the Roth is a great tax benefit even though it's after tax and your income, it is going to grow tax-free. All right.
Up next, we have Sam in Bismarck, North Dakota. Hey, Sam, welcome to the show.

Speaker 2 Hey, how are y'all doing today? Doing great.

Speaker 1 How can we help?

Speaker 3 So I am in a pickle. I got in a car wreck Monday night.

Speaker 2 Oh, I'm sorry. Are you okay? I'm fine.

Speaker 3 Everybody's fine. I was not at fault, thankfully.

Speaker 3 I got my insurance. I got all the insurance information.
I had an adjuster come out and look at my pickup this morning, and he told me that it is totaled.

Speaker 3 So I got off the phone a couple hours ago with their insurance, and they made me an offer for what my pickup's worth, which is

Speaker 3 $10,400 and some change.

Speaker 2 Okay.

Speaker 3 So I got a rental car this morning. Their insurance is covering that.

Speaker 3 They told me

Speaker 3 if I take the settlement, the 10,000, then I have the rental car for five days before I need to turn it in.

Speaker 3 So I'm kind of, I don't know what to do because

Speaker 3 I have to leave for work in a week, which is.

Speaker 2 What was your pickup worth?

Speaker 2 If you hadn't gotten in the accident, if you Kelly Blue booked your truck, what was it worth?

Speaker 2 for okay so why don't you go buy a truck today or tomorrow yeah for ten thousand

Speaker 3 I don't know if I should do that what do you think you should do

Speaker 2 why why

Speaker 3 uh because this is all happening quickly well here's the thing

Speaker 2 no that's not a mistake you're I think

Speaker 2 yeah your your car before it was totaled was worth 10 4 so it's a fair offer they're giving giving you exactly what it was worth. And so you're not,

Speaker 2 you're getting the car the same value.

Speaker 2 You're getting, you're going to be able to take that money and get the same value of vehicle.

Speaker 2 You might be thinking of it as, well, when I got my truck, it was worth, you know, $25,000, but it's depreciated. So you're not going to go in and be getting a brand new vehicle.

Speaker 2 You're going to be getting something worth $10,400, which is truly comparable to the truck you had. Yeah.
And I do that. Yeah.

Speaker 1 And if, and if this is overwhelming you, Sam, to make a quick decision, you're saying you have to go out of town. How long will you be gone for

Speaker 2 work?

Speaker 3 Two weeks.

Speaker 1 Okay. So why don't you just turn in the rental car, go to work for two weeks, start shopping online, calling some private sale, you know, people that have, have a truck on sale.

Speaker 1 And then when you get back, then maybe you don't have a car for a few days or rent a car for a few days for 35 bucks or whatever, you know, and then make sure it's inspected, like do your due diligence, sure, when you're buying it.

Speaker 2 But you can spend less time.

Speaker 1 And and i think that you still may have been shaken up i mean we're talking to you three days after you've been in a wreck that a car's been totaled so that's that's no joke so maybe you just take your time but um i wouldn't i wouldn't be so paralyzed by it you can make a quick decision in this and i think you're gonna be okay just don't go get a car payment use that 10 grand thanks for the call thanks to everyone in the booth thank you jade thank you america this is the ramsey show

Speaker 1 Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

Speaker 1 I am Rachel Cruz, hosting this hour with best-selling author and my good friend Jade Warshaw. And we are taking your calls.
So give us a call at 888-825-5225.

Speaker 1 And we'll talk about your life, your money, relationships, your work, anything and everything. So give us a call.
Up first, we have Michael in Cincinnati giving us a call.

Speaker 1 Hey, Michael, how can we help?

Speaker 3 Hey, how are you guys?

Speaker 2 We're doing doing great. How are you?

Speaker 3 Well, it's been a heck of a day, to say the least.

Speaker 2 Oh, no.

Speaker 3 I actually just got,

Speaker 3 well, it's the first time I've ever been fired today.

Speaker 2 You got fired today?

Speaker 3 Yeah, like literally an hour ago. Oh, and you guys are the first people I wanted to talk to.

Speaker 2 Oh, God.

Speaker 2 I was going to say, have you told your wife yet?

Speaker 2 Yeah.

Speaker 3 Yeah.

Speaker 2 No. Oh, no.
What happened, Michael?

Speaker 2 What's going on?

Speaker 3 Well,

Speaker 3 I'm in sales. I've been in sales my entire career.
And, you know, I've talked to a lot of leadership before, and they said it's bound to happen once.

Speaker 3 And this is actually the first time I've never excelled in a sales role.

Speaker 2 So that was...

Speaker 3 That was very interesting for me and very difficult for me to swallow some pride and deal with some humble pie there. But,

Speaker 3 you know, one door closes, another one's bound to open. That's right.
Is my outlook. And so, right now, just to give you the situation of my life, my wife and I just moved into a house, our house, and

Speaker 3 it's kind of

Speaker 3 co-ownership with my parents.

Speaker 3 So, technically, we're renting, which is really nice. It's really affordable.

Speaker 2 What does that mean?

Speaker 2 Whose name is on the deed? You know, whose name is on the mortgage?

Speaker 3 It's theirs. It's their name, but we're paying for everything, right?

Speaker 3 like we we just needed some help to get into a house faster because my wife is well she's gonna give birth here in the next couple weeks and with their ability to put a more sizable down payment um that would be able to that would allow us to escalate um the closing so they put down the down payment the mortgage is theirs but you guys pay the note

Speaker 1 yeah will it ever be transferred into your name is the is the goal of this to eventually you you guys owning the house?

Speaker 3 Yeah, yeah. I mean, it could be that that's future discussions down the line, but it was really just to escalate the closing.

Speaker 2 So it's your parents' house and you're renting it because you couldn't afford it.

Speaker 2 And they're renting it to you at cost.

Speaker 3 Yeah, I mean, we had money for a down payment. It was really just so that they could escalate the closing from, you know, 30-day standard to like a week or two weeks.

Speaker 2 So did you put money down as well?

Speaker 3 No, they allowed us to actually keep some money. So, yeah, it's everything's in their name, but I mean, okay.

Speaker 2 So, it's just a rental house.

Speaker 3 Yeah, we treat the house as our own, right? We pay for everything.

Speaker 2 That's what I'm worried about. Yeah, that's what I'm a little bit.
Okay, so that's gosh. So, that's what I'm a little bit concerned.

Speaker 1 I am a little bit concerned about because whenever you do a deal with family, which we usually don't recommend,

Speaker 1 everything needs to be laid out. And so, the fact that the future of the situation has not been talked about, because Michael, what I don't want is you guys in this house for five years.

Speaker 1 Something happens with them. And so, I don't know, whatever, whatever, whatever.
And then you could have been building equity in your own home that you could afford, right?

Speaker 1 So, but I think that's a separate. Let's

Speaker 2 pause that because I think that's a we also have our own rental property.

Speaker 3 My wife and I are own out.

Speaker 2 That wait, say that again. You were breaking up.

Speaker 3 My wife and I, we actually have another home that was our rental property, but it's it's currently a rented house. They signed a three-year lease, actually.

Speaker 2 So, you own a rental property as well?

Speaker 3 Yes, okay.

Speaker 3 But what's really going on is we were trying to pay off for debt. We have about $75,000 between student loans, car notes, and that type of thing.
But we have a one-year-old.

Speaker 3 We have a baby who's going to come really in the next couple weeks.

Speaker 3 So being the only income, the person who provides income, based on my situation, I will be paid for about the next two months. I will have insurance for the next two months.
Okay, good.

Speaker 2 I have,

Speaker 3 well, I should say, we have about $45,000 in cash sitting with one of my brokers. I have about four grand in cash in just disposable physical cash in one of my safes.
I have about $3,000 in silver

Speaker 3 and a couple thousand in just like the emergent, like an immediate emergency fund.

Speaker 2 Like $2,000 or like $8,000?

Speaker 3 No, $2,000.

Speaker 2 $8,000.

Speaker 3 Sorry.

Speaker 3 And right now I'm just trying to understand.

Speaker 3 Oh, I also have a Jeep on that paid off that I'm going to sell.

Speaker 2 What's it worth?

Speaker 3 About $14,000.

Speaker 2 Okay. Okay.
Okay, good.

Speaker 1 So, Michael, I mean, I could give you my timeline, ASAP. Yeah.

Speaker 1 I would 100% be looking for another job today, even though you're getting severance.

Speaker 1 So, once you get a full-time job,

Speaker 1 then I would press play on the baby steps. We do say that that snowball can go on pause if you guys are pregnant, which you are.
So, that is a reason to pause.

Speaker 1 And if a big life change happens, if you're going to be moving soon, if there's a job change, I mean, all of it, you know, you can pause for a season. So that's exactly where you guys are.

Speaker 1 I would pause until baby comes, until you have a new job, which again, Michael, I would say a new job. This isn't you calling us in 12 months saying I'm still looking for a job.

Speaker 1 This is you finding a job in the next 60 days. 90 days.

Speaker 2 You get any job until you get the job.

Speaker 1 And then I would be cashing out the silver. You have that emergency fund.
You have the 45,000. That's 50,000.
That could be thrown at the 75,000. And then you had 14,000 from the Jeep.

Speaker 2 So you guys are debt-free. I mean, you're done.
Yeah, the 4,000 cash, too.

Speaker 1 Yep. So that's, so that's, you're done there.
You can use that 4,000 as your starter emergency fund, the fully funded emergency fund.

Speaker 1 And then I would just keep rocking and rolling. And then the next question for me would be the house.
And I would sit down with your parents or your in-laws, whichever set of parents that was.

Speaker 1 And I would have a very clear, kind, but very clear, written down

Speaker 1 idea of what this next step is going to be. Because in in your rental house, I'm curious, do you guys have a clause that if you sell

Speaker 1 that the renter, I mean, do you have anything in your lease that gives you the ability to sell the rental house?

Speaker 3 I have a property management company who did everything because

Speaker 2 he bought the house.

Speaker 2 Do you know what's in the lease?

Speaker 2 I have to take a look at it. Okay, because if there's a clause, four months out there, we had to move to Florida.

Speaker 1 Okay, if there's a clause, that you can sell that property.

Speaker 2 I know rental properties are so cool and all that.

Speaker 1 I would sell it and I would use that, Michael, and the down payment you guys had saved. Where is that money? You said we had saved for a down payment, but it wasn't quite enough.

Speaker 2 $45,000?

Speaker 3 It's in an

Speaker 3 American account.

Speaker 2 What is that?

Speaker 1 How much is that?

Speaker 3 That's the $45,000.

Speaker 1 Oh, that's the $45,000. Okay.
So then I would use the money from the rental property and use that as a down payment on a home or to

Speaker 1 sell out or change the deed out of the current home if you guys can afford it. Right.

Speaker 1 But I would kind of just like liquidate everything.

Speaker 1 And that is an amazing starting ground i mean if you have no debt you guys have an emergency fund which you could use some of that proceeds um because your rental house is in florida right is that what you said no it's it's in cincinnati we bought it and then four months later we had to move the floor to my job Okay, I gotcha.

Speaker 1 I gotcha. So, yeah, I mean, I probably get rid of the rental and I would be doing, you know, pretty traditional investing.

Speaker 2 I'd want to get out of the rental house with the parents because you're, yeah, they're letting you rent out costs, but you're paying for everything.

Speaker 2 You're paying for all the repairs, everything there's no equity to your name at that point.

Speaker 1 Um, so yeah, I would probably change that.

Speaker 1 And again, if you guys need a minute, because you're about to have a baby, you can, it's not completely urgent, but I would have that conversation and start that path.

Speaker 1 So, we threw a lot at you, Michael.

Speaker 2 Maybe you can go back and re-watch this. No, but listen,

Speaker 1 uh, but that's that's what we would do. And I know that takes time, it's easier said than done.
But you guys have some great options, which is so exciting.

Speaker 1 So, congrats on the baby, and congrats on the new job you're about to find. This is the Ramsey Show.

Speaker 1 Today's question of the day is brought to you by YReFi. Why ReFi refinances defaulted private student loans and builds a custom loan based on your ability to pay.

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Speaker 1 So go to yrefi.com today/slash Ramsey. That's the letter Y refi, R-E-F-Y.com/slash Ramsey.
May not be available in all states.

Speaker 2 Okay, so today's question comes from Evan in Kansas. He says, my wife and I are debt-free, except our mortgage, which we owe $120,000 on.
My wife recently quit her job to stay at home with our baby.

Speaker 2 And now, after all our basic expenses are paid, there's nothing left over. We've been contemplating ways to save, and the only area we could really cut is food.

Speaker 2 We're considering going to some of the many food pantries in our city a few times a month to get the majority of our food so we could still have a couple hundred dollars to throw out the mortgage is this ethical considering i have a stable job and it's not like we'd go hungry without the food pantry we agree that once our mortgage is paid we would donate these food pantry items to give back is this the wrong way to become debt-free i'm gonna go with yes I would not do that.

Speaker 2 I, you know, you said it best, Evan. You said, you know, you've got a stable job and you don't need this.
And I think food pantries are really there for people who need it. Like they're in need.

Speaker 2 And there's also the side of this where, again, we kind of talked about this earlier in the show, but if you choose the stay-at-home route or you choose any route that's going to have one of the spouses not working, then you make the that bed and so you lay in it.

Speaker 2 And that's not a bad thing. It's just you've both decided, okay, this is going to take down our income significantly and we're okay with that.

Speaker 2 And then you've decided if this means it's going to take a lot longer to pay off the mortgage, you two decide on that. And I would not

Speaker 1 yeah use like community resources basically for yeah that that are not of need yeah i wouldn't do it yeah i don't think i would either i wouldn't do that so and i think he knows that to jade's point yeah he wouldn't probably be asking if he didn't feel great about it yeah yeah so i think again it's it's a maybe a shift in the budget maybe it's waiting a year or two and you'll get a raise and you can use some of that margin um because when you get to the point of paying off your house that's where we always say you can kind of relax off the accelerator and you make decisions then you know that may be different than baby steps one through three, right?

Speaker 2 Um, and the baby's gonna grow up, and she might decide when the baby goes to kindergarten, she goes back to work, and then you guys are you know, that's right, going forward again. Absolutely.

Speaker 1 Well, thanks for the question, Evan. All right, next, we have Connor in Jackson, Mississippi.
Hey, Connor, welcome to the show.

Speaker 3 Hey, guys, thank y'all for having me on.

Speaker 1 Absolutely. How can we help?

Speaker 3 So, I am a 19-year-old college student

Speaker 3 in the Mississippi area, but I'm also a business owner.

Speaker 3 And I'm kind of teetering on this is my second year of college. I'm at a community college

Speaker 3 in my local hometown, and I'm just trying to figure out if I want to go off and

Speaker 3 pursue a four-year degree from a university, or should I stay at home and continue working on my business.

Speaker 1 What's your business?

Speaker 3 So I own a landscape company.

Speaker 3 It started off as, as, you know, just a side hustle. When I could first start driving at 16, I just bought a push mower from Home Depot and started mowing yards.

Speaker 2 Good for you, Connor.

Speaker 3 Thank you.

Speaker 3 Over time, it just got bigger and bigger.

Speaker 3 Now we have three full-time employees plus myself.

Speaker 2 Dang.

Speaker 2 How much are you making a month off this?

Speaker 3 So it varies. Obviously, you know, in the winter,

Speaker 3 we don't do as much. But right now we're doing about

Speaker 3 last, I'll say this, last month we did 40,000 in sales.

Speaker 2 What do you take home? I think

Speaker 2 I will,

Speaker 3 I mean,

Speaker 3 I try and spend as much as possible. I try and reinvest as much as possible.
Since I'm young, I don't really have any bills.

Speaker 2 I do live in an apartment.

Speaker 2 I really don't have anything.

Speaker 2 If you did, though, because what you're talking about, not going to college at some point then it's like okay well you're going to get your own place and you're going to do you're going to need income so if you did draw an income what do you think it'd be

Speaker 1 uh if i if i needed to i could probably scratch out probably about sixty thousand a year right now okay that's great so so the question is do you go to college or work on the business that's growing what do you want to do connor do you are you enjoying this business are you wanting to do this full-time are you going to go to school is your is your mindset for going to college to help grow the current business or to start something new, get a different degree?

Speaker 1 Like, what would be the four-year college goal?

Speaker 3 It would probably, so my major right now is just a business administration. It's not in like landscape architecture or anything like that.

Speaker 3 I'm not necessarily tied down to landscaping, but I do enjoy working with my hands. But what I enjoy more is being a business owner.
I've always been an entrepreneur ever since I was young

Speaker 3 between flipping shoes and clothes and buying stuff low and selling it high. Yeah.
It's just always, it's in my blood.

Speaker 2 I think that's a great indicator because obviously the college and university route is not for everybody. Growing in your education is for everybody.

Speaker 2 What I would say is really looking at your five to 10 year picture.

Speaker 2 When you picture yourself in five years, what do you see yourself doing? And when you look, and then when you reverse engineer that, you go, okay, does that require me having a degree?

Speaker 2 How did I get there? Like, really think through that because, you know,

Speaker 2 there's the societal timeline of when you're 18, you go to college. But if you're not ready to do that yet, and if you can't afford to go there yet.

Speaker 1 Yeah. Well, I mean, because I was going to say, Connor, there's, you know, you go to college to either get some type of degree to get you in a field that you need, right?

Speaker 1 And there still are definitely routes, career routes that require a college degree. And you mentioned like landscape architect, right?

Speaker 1 Maybe there's an architectural degree that you need because you want to work for this firm in five years. Like there's a route.
So you're getting somewhere.

Speaker 1 But I would personally, I would not go and get a business degree and spend 60, 70,000 because you know what, Connor?

Speaker 1 I'll be honest, you're learning a heck of a lot more running your own business than you're going to be some theory sitting in business class.

Speaker 2 It's going to be behind anyway.

Speaker 1 I mean, honestly, seriously, it's so true. And like the life experience that you have is so much greater than usually what you can learn in a classroom.

Speaker 1 Not always, but in a business entrepreneurial route, people run and grow businesses all the time without a college degree. And you're getting, you know, a really basic

Speaker 1 degree there with your community college, which I think is really smart to do.

Speaker 2 I do too.

Speaker 1 But I mean, if your goal is to have this company, continue to grow it,

Speaker 1 you don't need a college degree to do that. So I would save the investment of what you would pay for college and continue down this route if I were you.

Speaker 1 But again, if you get into something that's a little bit more specific and tied to some type of licensing or

Speaker 1 degree that you need, then maybe you look into it.

Speaker 2 But for now, Connor, I mean, you're killing it. Is there anybody that's $40,000 with three employees last year?

Speaker 1 I mean, it's pretty impressive.

Speaker 2 Do you have

Speaker 2 a business that's doing what you want to be doing that you're watching?

Speaker 3 Yes, so I actually have two mentors. Before I started my own company, when I was 15, I worked for one of my good buddies.
His dad has been in the landscaping industry for 30 years, probably.

Speaker 3 And he's very large, and he did not go to college either.

Speaker 3 And so he is from a suburb of Jackson. And as Jackson in the metro area grew, he just like his name just spread out everywhere.

Speaker 2 And he's he does multi-million sales every single year. Oh, I believe that.

Speaker 3 It's commercial. It's all residential.

Speaker 3 And so that's kind kind of what I want to do. And I talk to him very, very often.

Speaker 2 Okay, great.

Speaker 1 You know, hold on the line, Connor.

Speaker 1 Christian's going to pick up and we'll give you a copy of Entree Leadership because I think there is a, what you're experiencing as a small business, I mean, you're having to lead people, which is what you really enjoy running that business side, but it can be tricky.

Speaker 1 And as you continue to grow it, there's going to be. you know, more avenues to go down and it's going to get a little bit more complicated.

Speaker 1 And then the entrepreneurial side that is so ingrained in you, you obviously have that inside of you, which is just amazing.

Speaker 1 So, we'll send you a copy of Entree Leadership and make sure to check out even the podcast.

Speaker 2 And

Speaker 1 we have a yeah, part of Ramsey is helping small businesses because we believe in them, we think it is the backbone of America and it's incredible. So, Connor, 19 years old, guy, man, kid.

Speaker 2 I was gonna call you a kid, you're not a kid, a man, a man, yeah.

Speaker 1 But you're doing really great, Connor. So, I appreciate the call.

Speaker 1 This is the Ramsey Show.

Speaker 1 Welcome back to The Ramsey Show. We are taking your calls at AAA-825-5225.
I'm Rachel Cruz, hosting with Jade Warshaw, and we're going to go to Brandon in Columbus, Ohio.

Speaker 1 Hey, Brandon, welcome to the show.

Speaker 2 Hey, how are you doing today? We're doing great. How can we help?

Speaker 3 So, the reason I'm calling is

Speaker 3 I can't seem to build any kind of wealth whatsoever.

Speaker 2 What's happening? Tell us more.

Speaker 3 Well, you know,

Speaker 3 I I got three boys and I got a wife that stays at home and I'm the only income.

Speaker 3 But I think I make

Speaker 3 okay money, but uh every time I try to build some wealth, you know, like something happens with the kids or

Speaker 2 something on that line. Tell us about your income.
What are you making every year?

Speaker 3 Well, I'm a union electrician.

Speaker 2 Okay.

Speaker 3 So I make

Speaker 3 about fifteen, twenty-eight if I work on Saturdays.

Speaker 2 Okay. I usually usually work Saturdays.
So every month, if you look at your budget, how much is on that top item?

Speaker 3 My budgets,

Speaker 3 it takes about $4,800 and some change, maybe.

Speaker 1 Okay. But is that what you're bringing in?

Speaker 2 $4,800.

Speaker 1 Income-wise, that's what you're bringing in?

Speaker 3 Income-wise, I'm bringing in maybe about $6,000.

Speaker 2 Okay, so $6,000. Okay.
And then do you guys have debt?

Speaker 3 Well, you know, I got my Jeep and and my old lady has her van.

Speaker 1 Is that on payments?

Speaker 3 I wish it wasn't, but it is.

Speaker 2 Yeah, that's fine.

Speaker 1 How much do you guys owe on yours?

Speaker 3 Well, my Jeep, I got maybe

Speaker 3 8,000 left, and on her van, we just had to get. So it's around 22.

Speaker 2 Okay. How much did you just got it?

Speaker 3 Yeah, we just got it maybe about a week ago.

Speaker 1 How much are your car payments payments in the on those both of those well that's where it's eating me

Speaker 3 on my jeep on my jeep i'm paying about four

Speaker 2 on her van i'm paying around six oh i bet you yeah it's a thousand dollars

Speaker 2 okay what else so you got the jeep the van what else do you have or their credit cards do you have any other loans

Speaker 3 um no i really don't have loans i mean

Speaker 3 I mean, we got, you know, groceries and

Speaker 3 we got rent.

Speaker 2 Okay, so that's fine. Those are fixed expenses on your budget.
But do you have any other debt, which is you know, a lump sum of money that you owe?

Speaker 3 I mean,

Speaker 3 maybe when I was younger,

Speaker 3 I'll just keep it easy. I'd probably say maybe about 10 grand, maybe.

Speaker 2 What would it be?

Speaker 1 In credit cards?

Speaker 3 No, it'd probably be a little bit of hospital and

Speaker 3 maybe

Speaker 3 miscellaneous. I'm sorry.
I'm kind of lost.

Speaker 2 Brandon, how old are your kids?

Speaker 3 I got a 10-year-old, I got a six-year-old, and I got a one about to be two-year-old.

Speaker 2 Okay, perfect. Okay, so here's the thing.
I think you're having a hard time building wealth because your biggest wealth-building tool is your income.

Speaker 2 And right now, $1,000 of your income is going, or maybe a little bit more, is going towards your debt payments every single month. And

Speaker 2 it sounds like, I'm not sure, but it sounds like maybe you're trying to do a little of this, a little of of that, a little of that over here.

Speaker 2 And the method that we teach you is going to give you focused intensity on one area at a time for the most part. So do you have any money saved?

Speaker 3 That's the problem. I don't.
Okay.

Speaker 2 Okay. So let's go back to the essentials here.
I think the first thing here is the budget. You told me that out of $6,000 a month, it takes $4,800 to run your household.

Speaker 2 So that means somewhere along the way, there's $1,200 left if you're doing your budget correct.

Speaker 2 Right.

Speaker 2 But you just said you can't find a dollar. So something about that budget isn't adding up.
So let's kind of let Rachel and I give you a quick crash course with the budget.

Speaker 1 Yeah, because the thing is with the budget, Brandon, is that it needs to be realistic. So you keep saying, okay, you know, which I get, we, Jade has kids, I have little kids.

Speaker 1 So stuff does come up, you know, when you're a family and there's multiple people you're keeping afloat.

Speaker 1 So either you need to redo the budget and say, okay realistically we need a kids line item because stuff is going to come up every month that we have to pay school fees like whatever it may be sports yep that we're going to put in um and then there also may be brandon a

Speaker 1 you know a time that you and your wife sit down and you say okay we're going to limit this budget and just because we feel like you know the kids need x y and z we may tell them no right now

Speaker 1 um because your goal is going to be to get out of debt and so that budget is really really key and tightening up that budget is going to, is going to be huge.

Speaker 1 So that's going to automatically probably give you some of that breathing room of that $1,200 that we don't, you know, it kind of just disappears.

Speaker 2 The next piece of this I would do, okay, so Rachel's telling you tighten up the budget. Yeah.
And you have a lot of car. Yeah.
Is that what you're going next? Yeah.

Speaker 2 You just bought this car for $22,000.

Speaker 2 $600 payment a month, Brandon. Sell it.

Speaker 1 Sell it. Yeah, because, and we always say not to have anything with wheels and motors that is more than half of your annual income.
And you guys are right over that. I mean, you're making 60.
Yeah.

Speaker 2 And I mean, you guys are, you're, you're, you're close to that.

Speaker 1 You're at 30. I mean, like, so you're, it's too much.
You have too much car. And I think you're feeling that, Brandon.
You're feeling that.

Speaker 2 And so looking to say, okay, what are our options?

Speaker 1 What can we do that is different?

Speaker 1 And it's probably going to be selling that van.

Speaker 2 And yeah. And that's going to take, so let's put this in the timeline.
So the first thing you're doing, what Rachel said, you're getting on your budget.

Speaker 2 You're you're getting a realistic budget, you're figuring out what can we cut so that this $1,200 is actually a reality.

Speaker 2 And it's you and your wife agreeing to that because you need that money so you can save up a little bit to get out of this car and get into a car that you can afford because no more car, no more car payments, right?

Speaker 2 So you need at least $5,000, $6,000 to make this thing happen at least, right? So we're getting out of this car. And then after that, it's okay.
We freed up $600. We can breathe a little bit.

Speaker 2 And maybe it's you picking up a side side hustle. Your wife, she's got the two-year-old at home, but there's, you know, at least it's one at home and not the others.

Speaker 2 And so what can she do to bring in extra income? And from this point on, it really is you guys deciding how quickly you clean up this mess by deciding how much more money comes in.

Speaker 2 Because the ultimate goal is building wealth. The debt is standing in the way that you clear out the debt and then you get yourself that emergency fund of three to six months saved.

Speaker 2 Now you're going to feel peace about day-to-day life, right? So if an emergency hits you, you're fine. And now you can actually start building wealth.

Speaker 2 You can start investing into your 401k if you have it, start investing into a Roth IRA as an option. But we've got to get through baby steps one through three, one through three first.
Brandon,

Speaker 1 have you looked into

Speaker 1 other small businesses in your area and what they're paying for electricians? I just wonder, even if you switched out of the union, if you could find a better gig that pays more.

Speaker 3 Well,

Speaker 3 I mean, I've

Speaker 3 done solar solar for seven years, and, you know, I have a little LLC with that.

Speaker 3 But

Speaker 3 I mean, and realistically, until I hit a journeyman's card, you know, I'm not really, there's really nothing out there that's maybe paying more. I mean, it may be a dollar.

Speaker 2 It may be $2, but there's nothing like jumping up another $10,000 to $12,000. Okay.
Yeah.

Speaker 1 Yeah. Because I was just curious if,

Speaker 1 you know, sometimes in the private sector, there's, you know, other opportunities.

Speaker 1 So I just didn't know if you had explored that because I think the goal too, Brandon, is, you know, you guys make $60,000.

Speaker 1 And yes, there's a level of intensity during baby steps one through three to kind of get you out of this hole. So there will be, you know, extra work here or there, all that.

Speaker 1 But I think the goal is eventually.

Speaker 1 to be able to live off of your income comfortably and enjoy it, be able to put some money aside for retirement, you know, do some of these things to enjoy your life.

Speaker 1 And so if that is not coming to fruition,

Speaker 1 yeah, then that's where where a bigger conversation is.

Speaker 1 And you guys are renting right now, right? So even home ownership to be in the picture eventually, which I know can probably feels very overwhelming right now to think about, but

Speaker 1 to be able to get there. But hey, Brandon, I want you to hold on the line because Christian's going to pick up.
And I want to gift you guys Financial Peace University, you and your wife.

Speaker 1 This is our nine-lesson course and go through this. And

Speaker 1 again, it runs the gamut, everything from the budget to getting out of debt, all of it. And then, you know what? And hold on the line too.

Speaker 1 Uh, and Christian, we'll throw in some of Ken Coleman's stuff. He has a great career assessment that would just be interesting, Brandon.
And again,

Speaker 1 being an electrician, making 60 grand, that's fabulous work and wonderful. But I think we, I think people do get to a reality of, okay, how do I sustain my life?

Speaker 1 And if you can ever make more, that's going to help it without completely shifting your lifestyle.

Speaker 1 So just out of curiosity, maybe dig into some of that too and see if that kind of triggers anything for you. So thanks for the call, Brandon.
You guys got this. Just stay on track.

Speaker 1 This is the Ramsey show.

Speaker 1 So just imagine you look up a year from now and everything that you wanted to accomplish, you accomplish because when you want to do something, it doesn't just happen by chance.

Speaker 1 You have to be motivated. You have to have a plan to really get there and be organized.
That's why we are so excited about the new 2025 Ramsey Goal Planner.

Speaker 1 It is here and myself and Jade Warshaw and our friend Dr. John John Deloney, we have content in there for you.

Speaker 1 We're going to walk you through different months, talking about your money, talking about your spiritual life, your relationships. And within it, it features so much, you guys.

Speaker 1 It has a month and weekly calendars, stickers, a vision board, goal setting system, and all of it. So, this can be yours today for $49.97.

Speaker 1 And don't wait because it has been selling so fast. And these sell out because we only order a certain quantity because once 2025 hits, people, you know, know, they're not buying planners.

Speaker 1 So we have a limited availability. So make sure to get it.
And it's been fantastic.

Speaker 1 So go to ramseysolutions.com slash store or click the link in the description if you're watching on YouTube or listening on podcasts. Up next, we have Vanessa in Seattle.
Hey, Vanessa.

Speaker 1 Welcome to the show.

Speaker 3 Hey, thank you for taking my call.

Speaker 2 Absolutely.

Speaker 3 Okay, so I'm just going to dive right in. So I'm a 54-year-old woman.
I live in the Seattle area.

Speaker 3 I am not working right now. I'm at the tail end of a bankruptcy.
I was married, and I got,

Speaker 3 there was just too much debt. I couldn't, there was no way that I could get out of that.
So

Speaker 3 I did file bankruptcy. It just discharged.
And

Speaker 3 so there's that, having, you know, just starting over with credit.

Speaker 3 I am not going to have a place to live as of December, the end of December. The owners of the home that I've been living in have decided to sell.

Speaker 3 And it's been an absolute shock because my ex-husband completely remodeled the inside and I thought for sure, you know, I'd have some time here.

Speaker 2 Oh, wow.

Speaker 2 Gosh, you've had a lot, Vanessa.

Speaker 3 I have a lot going on in my... Yes.

Speaker 2 Yes, I'm so sorry.

Speaker 1 Divorce and the bankruptcy and the living situation. That's up in the air.

Speaker 2 And you said your ex-husband remodeled the inside of the rental house? He did.

Speaker 3 Of a rental. Yeah.

Speaker 2 We know we're living there together.

Speaker 3 We were for four months and then he moved out. It was an abusive marriage.
So it took me a long time to get out of that, but I did.

Speaker 2 I'm so proud of you. Yeah.

Speaker 2 Yeah, thank you.

Speaker 3 I appreciate that. So

Speaker 3 I was making anywhere between $15,000 and $18,000 with an eBay business while I was married. He was the primary,

Speaker 3 you know, he had the job. He was bringing in very good money.
But we were renting in the previous house we were at for nine years so um

Speaker 3 this is my third marriage i just want to say that if if i knew that i was going to be here i would already have a house but it just didn't work out that way so

Speaker 2 okay so yes

Speaker 1 what are you doing right now vanessa for um how are you paying your rent right now how are you paying for expenses

Speaker 3 well i i was living off my savings and then i lost on top of everything i lost my daughter it was very sudden.

Speaker 3 She died. She was 26.

Speaker 2 I'm sorry.

Speaker 3 I know. There's so much going on.
So that just killed me. I mean, it was so hard, so horrible, you know, and there's nothing like losing a child.
It's horrible.

Speaker 1 I can't even imagine.

Speaker 3 So it's been hard, you know, to work,

Speaker 3 to concentrate on eBay, to do anything, really. I mean, it's just completely, I was debilitated and just from everything.

Speaker 1 So did you get anything

Speaker 1 out of the divorce?

Speaker 3 I did, and I've been living on that for the last three years.

Speaker 3 Let's see. So I was receiving maintenance, and then I had about $50,000 saved.

Speaker 2 What's that down to now?

Speaker 3 It's down to zero. However, there is some good news.
I just inherited $30,000.

Speaker 2 Okay.

Speaker 3 So I need to know what to do with my $30,000. I don't have any debt other than a car payment.
I have a car payment that's $300 a month.

Speaker 2 And how much do you owe on the car? What's the total amount you owe on the car?

Speaker 3 I owe about $18,000 on that. Okay.
So $18,000 to $20,000.

Speaker 3 It might be about $20,000 with a payoff.

Speaker 2 Fine. Okay.

Speaker 3 But if I take that, yeah,

Speaker 2 let us give you some help here.

Speaker 1 And real quick, will you just give me a quick timeline?

Speaker 1 These are big things that have happened. Will you just kind of walk me through really quickly? Really quickly when the divorce happened, the loss of your daughter, and the bankruptcy.

Speaker 1 When did all this play out?

Speaker 3 Okay, so the bankruptcy was,

Speaker 3 it just discharged. So that was 90 days.
It's been about four months total with that.

Speaker 3 Losing my daughter happened,

Speaker 3 it was last January, so it's been a year and a half.

Speaker 2 Okay, okay.

Speaker 3 And my divorce,

Speaker 3 we separated after we moved into this home, which was November of 2021. So he moved out in April of 2022.
Okay.

Speaker 3 So since then, I have been living off of what I have, what I got, what I received from that.

Speaker 2 That's good.

Speaker 1 I just want to know, because I mean, these are like three very traumatic things that have occurred. So I just didn't know how timeline-wise.

Speaker 1 Because I think for you, Vanessa, this,

Speaker 1 I mean,

Speaker 1 the biggest glaring light that I see is

Speaker 1 the income side

Speaker 1 of not, because as you experience with the 50,000, if you continue to live on savings and you're not replacing that with other income, it eventually dwindles and that's what you've experienced and so making sure that this thirty thousand dollars does not dwindle and the only way to really do that is to be able to be bringing in some income um which i know is so

Speaker 3 sorry no you're good go ahead um okay so i i've been working on my master's degree i was busy with that in art history. Now, what I'm going to do with that, I have no idea.
I mean,

Speaker 2 art history.

Speaker 3 What are you going to do? Art history, yeah, because I love, I just love it. I love architecture, art.

Speaker 2 What did you plan to do with it when you got it?

Speaker 1 Yeah, that and how are you paying for it?

Speaker 2 I don't know.

Speaker 3 Maybe teach.

Speaker 3 I was paying for

Speaker 3 my

Speaker 3 education as I went. So I still have some, I have some loans.
I think.

Speaker 3 I'm not sure exactly. Yeah, I have students.
I wasn't able to file. You can't file on those.
No, you can't.

Speaker 2 I was not able to. Okay, so let's get.

Speaker 2 We got to, we got to get organized and we got to get a game plan going forward. Right now is not the time to keep taking those classes because you can't afford to pay for them.

Speaker 2 And you still have some existing student loan debt, it sounds like you've got the $18,000 for this car.

Speaker 2 What I believe your homework should be, and I think Rachel would probably agree, is first things first is you got to get a job.

Speaker 1 Yeah. And

Speaker 1 this is, and, you know, this is target, Vanessa. I mean, this is making $18,000 an hour at Walmart.
I mean, this is

Speaker 1 doing what you can because the decisions so far are not panning out in reality for you, right? An art history degree.

Speaker 1 Well, I'm going to go get a master's, but I don't know what I want to do with it, right? So, I want to make sure the ROI on your time is realistic.

Speaker 1 And so, being able just to get something in, I think it'll be good for you, Vanessa. I think there's going to be a level of dignity and confidence of you going and earning your own money

Speaker 1 that's going to be huge. So, for the time being, I mean, it would be tomorrow I would be out and just retail

Speaker 1 and whatever you can just to be getting an income in.

Speaker 1 And then eventually figuring out what does Vanessa want to do and what can Vanessa do to support herself and be able to, you know, advance throughout life.

Speaker 1 You know, you're in your 50s and there's, you know, there's still a great life to go. Yeah, a great life to live.
And I want you to be able to do that.

Speaker 1 But the steps would be, number one, finding a job tomorrow, any job. And I would be, I would be working like crazy.
I think my goal would be not to touch the 30,000.

Speaker 2 That would be the goal.

Speaker 1 And I think selling the car is probably

Speaker 1 because you don't need an $18,000 car, Vanessa. You need a $6,000 car.

Speaker 2 And then, third, I'd say

Speaker 2 you know that the time is coming where you won't be living in this house anymore. So let's start doing research on a place that we can live that's less expensive, possibly, right?

Speaker 1 The video apartment may be just tiny.

Speaker 1 I mean, anything, again, it's going to be uncomfortable for a little bit, but I think making some of these wiser, more conservative decisions is going to give you some bandwidth and some margin.

Speaker 1 You need it.

Speaker 2 Yes.

Speaker 3 The car might be a little bit tricky.

Speaker 3 And the reason is because i kept that through the bankruptcy and then just negotiated the interest rate so if i let that go then it's going to hit my credit which i want squeaking from here forward um

Speaker 3 possibly yeah i

Speaker 2 probably could sell it at because yeah that's what we're talking about yeah we're talking about you you looking on kelly blue book decide and seeing what it's worth and then you selling it and buying something cheaper in cash not a payment yep that's right okay vanessa that's a lot um why don't you hang on line?

Speaker 1 Christian will pick up and we'll get you with a Ramsey coach to help you. Well, if you're listening on radio, keep on listening.

Speaker 1 But if you are on YouTube or podcasts, make sure to go download the Ramsey Show app to get the third hour there. Thanks to everyone in the booth.

Speaker 1 Thank you, Jade Warshaw, and we will see you soon, America.