It’s Never Too Late To Change Your Life… Start TODAY

Speaker 1 From the Ramsey Network, it's the Ramsey Show. I'm Jade Warshaw.
Next to me is George Camille and we help people build wealth, do work that they love, and create amazing relationships.

Speaker 1 And that's what we're going to do this hour. We're taking your calls live.
If you want to call in, the number is eight eight two five two two five and we'll get you on.

Speaker 1 All right, George, let's get into this. You ready?

Speaker 2 I'm so ready. I'm very caffeinated.
I will warn you.

Speaker 1 All right, I believe you. Straight to the phone lines where we've got Greg, who's in Nashville, Tennessee.
What's going on, Greg?

Speaker 3 Hey,

Speaker 3 I'm kind of in a pickle right now. So I've got a baby on the way, and I'm about $113,000 in debt.
And I am kind of

Speaker 3 stuck right now, and I kind of need your expertise.

Speaker 1 When's the baby get here?

Speaker 3 It'll be this December.

Speaker 2 Oh, wow. Okay.
Right

Speaker 1 just around the riverbed. I assume this is your first?

Speaker 3 That's correct. Okay.

Speaker 2 The fear in your voice tells me you're like, oh, boy. Okay.
So you have

Speaker 2 $113,000 in debt. What is your household income?

Speaker 3 So

Speaker 3 I owe

Speaker 3 about $39,000 left on the house.

Speaker 3 It's a five-bedroom, three-bath house.

Speaker 3 The truck, I owe $35,000 left on it.

Speaker 3 The razor, I owe $24,000.

Speaker 2 What's a razor?

Speaker 3 And I owe about $10,000.

Speaker 3 It's a side-by-side.

Speaker 2 Oh, okay.

Speaker 1 Well, my next question was going to be, what's a side-by-side? But you guys seem to know. So let's go.

Speaker 2 Let's get rolling. It's one of these

Speaker 2 little four-wheeler, little kind of recreational. Vehicles.

Speaker 2 Okay, keep going. What else?

Speaker 3 And then just $10,000 $10,000 and just personal loans.

Speaker 3 But when I was thinking about taking all the truck, the Razor and the personal loans, combining them together, and just pulling out from the house to pay all of them off and own the truck.

Speaker 2 Let's run it back. I didn't know.
Wait, Greg, wait, Greg. I don't know what kind of Greg math you're trying to pull here, but there's a different way to do this.
Why not just sell the Razor?

Speaker 2 Sell the truck. Is it worth more than $35,000?

Speaker 3 Well,

Speaker 3 but I don't, I would have to take,

Speaker 3 well, how do I, how would I be able to sell the truck if I don't have the title to it, though?

Speaker 1 Why don't you have the title?

Speaker 2 Yeah, well, yeah, once you sell it, you can do this all in one swoop. You go to the bank that holds the title, the lender, and you get the transaction done there.
They write the check.

Speaker 2 You immediately pay off the loan. They get the title.

Speaker 1 Do you know what the truck is worth, Greg?

Speaker 3 Do you want to sell it?

Speaker 3 I don't know. It's like a 2014 F-350 Super Dude Hilarious.
It's a work truck.

Speaker 2 It's probably a racket. That's a real nice work truck.
When I hear a work truck, I think this thing can be a piece of crap as long as it gets the job done. You're driving a pavement, Princess.

Speaker 3 Yeah, I guess so.

Speaker 2 That thing's, that's a sweet truck. So here's the deal.
You got homework to do. Find out how much the truck is worth.

Speaker 2 Do you have anything in savings right now?

Speaker 3 I've probably got about

Speaker 2 $6,000 maybe in savings, $5,000 in savings. So if you're underwater slightly, let's say the truck's worth $31,000, you owe $35,000, you have the money to cover the difference.

Speaker 3 Okay.

Speaker 1 What's the payment on the truck?

Speaker 3 So they've got me at 19% on

Speaker 2 the truck, Greg?

Speaker 3 $666.

Speaker 2 And they didn't get you. You signed the dotted line knowing full well it was a 19% interest rate.

Speaker 2 let's talk about the razor do you have any idea what that might be worth if you were to sell it

Speaker 3 I'm definitely probably gonna get a hit on it and I bought it right

Speaker 3 before I found out that we were having one so okay it was

Speaker 3 it was um

Speaker 3 20 when I bought it like 23 but it's it's a it's a 2023 so it's I'm probably gonna take a hit on it it's a four-seater

Speaker 1 well let's do the homework let's do the homework on that too like George said find out about the truck the truck I'm pretty sure you're going to sell regardless,

Speaker 1 even if you're upside down. Okay.
That you got to get out of that truck. Same thing with the razor.
Here's the thing, though.

Speaker 1 I want to run back the whole scenario here. The 113,000, let's not include the house in that for now.

Speaker 1 I don't know if you were working hard to pay that off before, but for right now, put a pin in that because that's further along the lines, further down the baby steps.

Speaker 1 So we don't need to even worry about that. The good news, and I want you to hear this, the good news is the majority of the debt that you have, it's as simple as you selling it off.

Speaker 1 And that is a blessing in your situation.

Speaker 1 And then all you have to do is come back in and worry about this $10,000 personal loan. Here's the deal.
You've got a baby coming.

Speaker 1 And typically when we talk about baby step two and babies coming, we say, hey, put a pause on and let's get the baby here. Let's get stack up as much money as you can.
Let the baby come.

Speaker 1 Let everybody be healthy. And then when you feel like kind of that storm is over, then you can push play on everything that George and I just said.
But right now, you've got $6,000 saved.

Speaker 1 Right now, I want you to stack up as much money as you can get your hands on.

Speaker 1 When by the time, you know, January 30th comes, you're probably going to be ready to push play on this plan here to get rid of the truck, get rid of the razor.

Speaker 1 And to George's point, if you look it up and you find out that you're upside down, you're and it's more than the money you have saved, then you're marching down to the credit union and you're getting a loan for the difference.

Speaker 1 And that way, you have all the money that you need to give the bank for this, you know, for this vehicle. And so that's how that works.

Speaker 3 So don't take out for the house at all.

Speaker 2 Depending on, and then don't dip into your equity at all. That's not doing anything.
You're just moving debt around at that point.

Speaker 1 Are you able to make the payments every month, or are you behind?

Speaker 3 No,

Speaker 3 I've never been late to any payments.

Speaker 2 What's your household income?

Speaker 3 In total, because I work three jobs, I can pull in probably about 100, probably about 100,000

Speaker 2 a year. And is your wife working currently?

Speaker 3 She is. She does work.

Speaker 3 She probably pulls in, I would say, about maybe $35,000 or so a year, $35,000.

Speaker 1 Tell us per month. What do your checks look like every month when you bring them in?

Speaker 3 In total, I can pull in about $6,000 and

Speaker 3 her,

Speaker 3 I would say probably about

Speaker 3 3,000 or

Speaker 2 25,000. Are you investing at all right now?

Speaker 3 I was going to make the house, a rental house at first.

Speaker 2 No, I mean, are you investing into like a 401k or anything like that?

Speaker 3 No, no, I don't have any of that set up.

Speaker 2 Okay.

Speaker 1 Do you want to know what I think happened, Greg? I think that you guys are doing all right.

Speaker 2 How old are you?

Speaker 3 I'm 23.

Speaker 1 Yeah. I think that you guys are doing all right for 23.
You're making over $100,000 a year and you're like, ding, ding, I can drive the truck that I want.

Speaker 1 I can get this little side-by-side that I want. And you kind of got caught up in the fact that you're actually financially, like the income you're bringing in, you're doing really, really well.

Speaker 1 It's just you didn't know better than to make these decisions, but now you do know better. You see that they're a drain on all that money that you're working so hard to pull in.

Speaker 1 And I hope, I hope that you see, you know, I hope this.

Speaker 1 drills in the lesson from here on forward. We don't go into debt for the things we want.
If we want it we save up we pay cash for it because it's not worth all this is it

Speaker 2 no no not at all it's stressful i know having a baby you're supposed to feel happy and have stars in your eyes and instead you're feeling the stress of a payment of a side-by-side so lesson learned yeah yeah but that baby is going to be worth all the sacrifice When you bring it into a house with no debt, with a great financial future, we're looking out for you.

Speaker 2 We want to give you a little gift. It's going to be every dollar premium.
It's going to help you along this journey. Make a plan for all of your income, every single dollar.
So hang on the line.

Speaker 2 We'll gift that to you as you have the baby on the way.

Speaker 1 Congratulations, guys. This is the Ramsey Show.

Speaker 1 This is the Ramsey Show on The Ramsey Network. I'm Jake Warshaw, joined by George Camill, best-selling author.

Speaker 2 George, way to go. Thank you.

Speaker 1 You're welcome.

Speaker 2 You know, I like to give props where props are due.

Speaker 1 Hey, selling a house the Ramsey Way makes home ownership a blessing instead of a burden. I can attest to that.

Speaker 1 The Ramsey Trusted Program is the only way that you're going to find an agent that you trust that's going to keep you on track with what we teach here at Ramsey.

Speaker 1 You can get the best offer on your house or find the right house for you. And here's the thing.
This is how this whole thing works. If you're wondering, Jade, why do I need to do this?

Speaker 1 The point is there's a lot of teachings here.

Speaker 1 And if you've been listening to us for a long time or a little while, if you're interested in the way we teach things, you want your real estate agent to understand that.

Speaker 1 Otherwise, they'll be leading you off track. So you want a Ramsey Trusted Pro.
What happens is we're going to send you some of the top agents that are in your area.

Speaker 1 These are people that we trust, but you get to review them, you get to interview them, and you get to decide which one ultimately that you want to work with. So, you still have all the power here.

Speaker 1 Ramsey Trusted Agents, they have years and years of experience. They're going to help you make wise decisions.
And I told you before, I can attest to that. I have a Ramsey trusted agent.
She's great.

Speaker 1 Mandy Linfesti, she helped us buy our house and she helped us do it the Ramsey way. That's what this is all about.

Speaker 1 So, when it comes to pricing, marketing your house, or choosing the right offer, you need a Ramsey trusted real estate agent. Did I mention, guys, that it is for free? It's a free service.

Speaker 1 You can go to ramseysolutions.com/slash/agent. Love it.
Let's go straight to the phone lines. Jacob is in Detroit, Michigan.
How you doing, Jacob?

Speaker 3 I'm doing good. Yourself?

Speaker 1 I'm great.

Speaker 2 How can we help?

Speaker 3 So, I've been thinking about financing a role. Like, I'm 20.
I'm employed, working full-time job plus overtime.

Speaker 3 I'm basically, I'm single, so like I'm debating. I'm doing it.

Speaker 1 Interesting. Why wouldn't you just pay for it? Why would you put on payments?

Speaker 3 I just want to put myself in a bad spot overall. I have a car that I pay for as well, and an apartment I pay for monthly as well.

Speaker 2 You have a car payment, you're saying? Yep. So you want to add another payment? Because that's going to help you win financially?

Speaker 3 Yeah, financially and kind of help like lose my credit.

Speaker 1 So the guy, I don't know if you heard this. The last hour, a guy called in.
He was name was Greg, and he was really about to come unglued because he felt like he was doing well in life.

Speaker 1 He was a young cat, just like you. And he started with one purchase and then he went to another purchase.

Speaker 1 And before you knew it, he had over $100,000 in debt and he was calling us ready to tear his hair out. And so what you're about to embark on feels like the beginning of that same series of events.

Speaker 1 You hear what I'm saying?

Speaker 3 Yeah.

Speaker 2 Go ahead, George. I'm just wondering, what caused you to go, I need a $7,000 watch that I can't afford?

Speaker 2 Was it friends? Was it you see Instagram? Are you following, like, you're just into watches?

Speaker 3 Yeah, I've been to watches.

Speaker 2 Okay, what's the most expensive watch you own right now?

Speaker 3 Probably my newest Apple watch.

Speaker 2 Okay.

Speaker 2 Same here, bro. Same here.
That's the most expensive watch I'm willing to pay for right now.

Speaker 2 How much is this Rolex?

Speaker 3 I was looking at one that's roughly around $8,900.

Speaker 2 Okay. $8,900.

Speaker 2 Here's the deal. You are not in a place financially to buy this watch.
Even if you had the money, I would tell you not to do this because you have other debt.

Speaker 2 I assume you have financial goals in life. Do you want to own a home one day?

Speaker 2 Yes. Okay.
I would rather see that as a priority versus the flex of a Rolex. Are you trying to impress someone?

Speaker 3 No, not really. I just

Speaker 3 own it for myself. It's my goal one day, like my dream to own one.

Speaker 1 Well, here's the thing. I love that goal.
I love that there's something that you're into. You like watches.
There are certain things that I really like.

Speaker 2 Jades into sneakers.

Speaker 1 I'm into sneakers. But there is part of this, I don't know if you've heard it before, but we say it all the time.
We say that you live like no one else, so later you can live like no one else.

Speaker 1 And the first live like no one else is all about doing the things in order to set yourself up financially.

Speaker 1 So in your case, it would be paying off this cart debt and deciding, hey, hey i'm not going to go into debt again um and then from there it's making all those choices so that at some point it might be when you're 25 you can turn around and buy this rolex watch in cash how much money are you making at this point i'll say like 40 000 a year say it again

Speaker 1 40 000 a year i would say okay 40 000 a year you're just getting started and i think that that's the thing that i want you to take away from this call you're just getting started the truth is like george said you don't make enough to buy this watch you really don't and it's too much of your world right now while you're carrying debt.

Speaker 2 Speak directly on your phone, Jacob. I want to make sure that we can hear you clearly.
I want to know how much total debt you have right now.

Speaker 3 I'll say like 17. Okay.

Speaker 3 My card. It's a brand new card.

Speaker 1 I mean, to do this,

Speaker 1 I just looked at the numbers. With tax, you're going to be spending 25%

Speaker 1 of your yearly income.

Speaker 1 You make $40,000 a year. This thing's going to cost you $10,000 when it's all said and done.

Speaker 1 That doesn't make any sense, does it?

Speaker 3 No, not really.

Speaker 1 That's all, as long as you understand that going from this call, I've done my job.

Speaker 2 The goal, Jacob, for, you know, when I was 20, I get it. I wanted just nice stuff.

Speaker 2 I thought I deserved it because I did all the things that, you know, my parents told me to do and society told me to do. And I went, all right, I'm an adult now.
I got a real bona fide job.

Speaker 2 I'm going to get me some stuff. The problem is when you make decisions like this, where you finance things, the stuff has you.

Speaker 2 And so you got to decide, do I want to look wealthy or do I want to be wealthy? And eventually, life catches up where you just want to actually be wealthy and have freedom and margin and options.

Speaker 2 And when you want to look wealthy, you tend to just finance your life away until you have $1,200 in payments, $1,500 in payments on crap going down in value.

Speaker 2 And so if you can learn this lesson now, Jacob, you're going to be so wealthy, you can have multiple Rolexes one day. But that day has not come.

Speaker 2 We got to get our financial priorities in order, and that's getting out of debt. We need an emergency fund, three to six months expenses.
We need a down payment.

Speaker 2 That's going to set you up for success. Yeah.

Speaker 1 Isn't it funny, George, the things that I wanted to buy when I was in debt, when I was around his age, 20, 21, 22, 23, the things that I thought, oh, God, I got to have that.

Speaker 1 You know, it's clothes and it's the newest thing. It's the newest Apple Watch, the newest iPhone, the newest whatever.
At this stage in my life, it's so funny.

Speaker 1 Now that I'm out of debt, I can actually afford many of the things that I want to get. I just don't care.
It's like, it just evaporates.

Speaker 2 This is the superpower, Jacob. If you can stop caring what other people think, you will win financially.
That is the greatest superpower to just stop the comparisons.

Speaker 2 And I know you're saying this is for me. I want it for me.
But guess what? The watch isn't just going to sit. It's going to be on your wrist while you're out.

Speaker 2 And everyone's going to go, oh, bro, you're doing well for yourself.

Speaker 2 They don't know that you got bills to pay. You have a car payment, a watch payment, adding stress to your life.
And we found that debt is not a blessing in anyone's life.

Speaker 2 And it's not worth it to finance a car, a watch, a four by four razor, a Polaris, whatever it is. It's just not worth it.

Speaker 1 Yeah, it's interesting.

Speaker 1 Again, going back to that live like no one else, so later you can live like no one else.

Speaker 1 I think sometimes, and it can be, I'm not saying it can't be this, but sometimes people walk the steps, the baby steps, and it's like, when I'm done with the baby steps, I'll be able to buy the Rolex and I'll be able to buy like all these big major things.

Speaker 1 And I'm not saying you can't, because like you said, I like sneakers and sneakers can be expensive. But do you want to know, George, the things that I love the most?

Speaker 2 Guessing it's not sneakers.

Speaker 1 It's not sneakers. I love going to the grocery store and and buying expensive, like a juice that's kind of like ridiculously expensive.

Speaker 1 That's my thing. I want to load up and I don't even have to think about it.
Whereas before I would have been like, I'm never going to pay $4.99 for that juice.

Speaker 1 And now I'm like, give me the $4.99 juice. Give me three of them.
You ever see

Speaker 2 like at Costco and the cart is like overflowing? I'm like, dang, they're doing well. That's my new, like, you're doing well.
If you can fill up a cart at Costco. Fill up a cart at Costco.

Speaker 1 You feel, you give zero about it. You go have a hot dog.
And it's, it's that on that. Yeah.

Speaker 2 But when you're young, I get it. Like nice stuff is more important to you.
And as you get older, it becomes less and less important.

Speaker 2 Number one, you find better, you put better people around you who don't care about that stuff. But again, you start to have priorities.
You got responsibilities.

Speaker 2 And, you know, things matter less and you want more experiences and meaning.

Speaker 1 And, you know, I think it's too, you come out of your parents' house, right?

Speaker 1 It's like at that age, you're coming out of college, coming out of your parents' house, and you see all the things that they have. And for you, that equals success.

Speaker 1 Like, I know I felt that it's like, okay, they have a house. They have two decent cars.
They, you know, seemingly they have a house full of furniture. That's nice, you know?

Speaker 1 And it's like when you strike out on your own, you're trying to get

Speaker 1 so fast.

Speaker 2 Yeah. It took them 25 years to get there or 35 years to get there.
Heck yeah. And you go, well, I want to shortcut that.
Yeah.

Speaker 2 There are no shortcuts to wealth or meaning or happiness or joy, including the Rolex. And I'm not mad at Rolex.

Speaker 2 It's a beautiful watch, and I hope Jacob gets one one day, but I hope he does it with cash after he's accomplished more important financial goals. That's true.

Speaker 1 That is so true. Yes, that's right.
It's all about temporary sacrifice, short-term sacrifice for a long-term gain. That's what we're teaching here.
This is the Ramsey Show.

Speaker 1 This is the Ramsey Show. I'm Jade Warshaw.
Next to me is George Camill. Hey, if you enjoy this show, we're so glad that you're here.
First off, we're so glad that you are listeners.

Speaker 1 Technically, y'all are the reason that me and George even have employment here. So there you have it.
Because if it wasn't for you,

Speaker 1 there'd there'd be no show, George.

Speaker 2 It's all about the people.

Speaker 1 It's very bleak when you look at it that way, isn't it?

Speaker 2 Yeah, it's kind of scary. So thank you all for listening and calling in.

Speaker 1 We need you. Keep listening.
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Speaker 1 I don't care. Facts.
Wow. That's different.

Speaker 2 Old school.

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Speaker 2 We'll spare you the telethon if you do it this way. Yes.
Remember those old PBS telethons? Oh, yeah. How could I forget?

Speaker 2 Maybe we should try it one day. I don't know.
I'm open. I'm open to it.

Speaker 1 No, I don't want to do that. They had all the things.

Speaker 2 Booth is saying no, thank you.

Speaker 1 No telethon. Okay, let's go to Jack.
He's in Boise, Idaho. What's going on, Jack?

Speaker 3 Hi, Jade. Hi, George.
Thank you for having me today.

Speaker 2 You bet. How can we help?

Speaker 2 So

Speaker 3 about a year ago, my wife and I finished the baby steps, paid off everything. Nice.

Speaker 2 I'm 60.

Speaker 3 She's 60 as well.

Speaker 3 We're worth about $6.5 million.

Speaker 2 Woo, wow.

Speaker 3 Yeah, yeah, we're crazy blessed.

Speaker 3 And then $5 million of that is in paid-for income-producing real estate. We make about $200,000 a year net as for everything.

Speaker 2 Nice.

Speaker 2 Just from real estate. So,

Speaker 3 yeah, and we both work some.

Speaker 3 Yeah, so money is not an issue,

Speaker 3 except kind of in our relationship.

Speaker 3 While we were paying this off, we gave each of ourselves a $50 a month budget, you know, spending money just for fun stuff, going out, coffee, whatever.

Speaker 3 Very tight. Now that it's done, I've got her to loosen that up on my side to $100 a month.

Speaker 2 Oh, whoa.

Speaker 2 living on the edge, Jack.

Speaker 2 I feel this is very tight.

Speaker 1 Like, no one can breathe in this budget.

Speaker 2 Your budget's got skinny jeans on it, man.

Speaker 3 You can get coffee like twice, maybe happy with a friend.

Speaker 1 Jack, Jack, Jack, why are you not loosening these purse strings looser?

Speaker 3 Because I'm getting tremendous pushback.

Speaker 3 It's like tremendous pushback. And like, my wife still thinks that I'm overspending at $100.
She's like, I don't know why you're happy with $50. And

Speaker 3 how do we get past this

Speaker 3 no-one? How do we get from the first no-one else to the so we can live like the second no-that is a big shift to make.

Speaker 2 I think I saw her episode of Extreme Cheapskates. I think she was on that show.

Speaker 2 Is she that person who's just super frugal and this is how we got here? And I like it this way.

Speaker 3 She is. And like now we're,

Speaker 3 and she. We're banking money for no reason.
Yeah.

Speaker 2 What are you doing with all the extra money? Because you're spending none of it.

Speaker 3 We're just investing it. It's just going into

Speaker 2 temporarily.

Speaker 3 And then

Speaker 3 that's my question. I don't know.

Speaker 2 You've got to give this money a goal.

Speaker 3 Let's spend some money.

Speaker 1 Do you take any trips? Or is this just daily spending she doesn't like to do a lot?

Speaker 3 We travel a lot. We do a lot of stuff together, but it's it's kind of like

Speaker 3 it it's my personal it's that person. It's like, hey, I want to go out for coffee.
I want to go out and grab a bite with friends. It's that kind of stuff.

Speaker 3 It's the singular stuff.

Speaker 1 If you could have it your way, what would that line item be on the budget for for jack oh i i mean it really

Speaker 2 four or five hundred bucks i mean it's not i'm not looking for thousands i'm just looking for so if you said to your wife today i want to spend 500 a month for fun stuff what would she say

Speaker 3 she would look at me she she couldn't imagine why

Speaker 1 Now, okay.

Speaker 1 So I think this is the conversation that needs to be had.

Speaker 1 Because what I want to first call out is I think there's it is very normal for there to be things that, I mean, my husband is sitting out in the audience.

Speaker 1 There's things that Sam would spend money on that I'm like, help me understand why you would ever even be interested to spend even a quarter on that.

Speaker 1 And then there's things that I would buy that he couldn't ever understand why I would spend money on that.

Speaker 1 So at the end of the day, this is about you guys' interests and being able to value each other's interests. And so she's saying, hey, $400, like that's a lot of turkey sandwiches.

Speaker 1 How many lunches are you going to? But you clearly are a very relational person. You like going out.
You like seeing people. You like to do things over food or lunch or whatever.

Speaker 1 And that's just who you are. And I don't think that

Speaker 1 it's not to say that she has to go out and spend that money, but I think having that conversation and saying, hey, we've worked very hard.

Speaker 1 This is a very small percentage of our world. I've heard Dave talk about ratios a lot and really kind of looking at it big picture and saying, hey, here's the percentage that we're saving.

Speaker 1 Here's the percentage that we're giving. We need to be really intentional also on the, on the percentage that we are enjoying and spending for ourselves.

Speaker 1 And so I think that's the way the conversation has to start to evolve. And

Speaker 1 if you want to do anything else, you can play her this clip and say, hey, these two

Speaker 2 people on the radio agree with me.

Speaker 2 Well, there's two things here, I see, Jack. Number one, you have to get to the root of what's actually causing this, you know, this kind of frustration she has.

Speaker 2 Is it just, I don't understand why you'd spend that? Or is it truly a fear of scarcity of we're going to run out of money if if you keep spending like during Congress?

Speaker 3 I think it's a fear thing. And I'm always like, do you realize I'm like,

Speaker 3 sorry, the $100 a month, I'm like, do you have any months I could spend $100 a month and never go through any real amount of money? Do you have any, I mean, we could go 1,000 years at $100 a month.

Speaker 2 I don't know the math would even impress her if you went, hey, listen, we're never going to run out of money.

Speaker 3 Because I've tried that because that's my bent is like, well, let's just do the math.

Speaker 2 That's why I think this is a real, this is there's some like trauma here. Maybe from childhood, the way she grew up, we didn't have money growing up, and now we have some.

Speaker 2 And if we spend it, we're going to go back to how that was. So I mean, this might need a third party.

Speaker 2 You might, she might, you know, benefit from going to counseling or therapy and connecting with our friends at BetterHelp to go, I want to get to the root of this because I don't want to live like this.

Speaker 2 I want to enjoy life and be more open-handed. And the other thing, Jack, I would recommend is as you guys sit down to do the budget, force yourselves to spend more, to save more, and to give more.

Speaker 1 How does she feel about giving?

Speaker 3 So

Speaker 3 we give a lot.

Speaker 2 Okay.

Speaker 3 Way over 10%. Yeah, we give usually about 20, 20%, maybe a little bit more.

Speaker 2 Why is she comfortable with that?

Speaker 3 Well, she's not. I make her do it.

Speaker 2 Okay, interesting. So all she wants to do is save.

Speaker 2 Correct? Yes, yeah, pretty much. It's easy to travel.

Speaker 3 She likes travel.

Speaker 2 She likes to travel. And why is she okay with travel, but not coffee?

Speaker 2 I don't know.

Speaker 3 And that's where I'm going. Is it because it's us versus me? I don't,

Speaker 3 I am not sure.

Speaker 1 It's just where, I think it's where she places her value. It sounds like it's

Speaker 2 voice stuff and things and food. Yeah.
This is worth it. That's not worth it.

Speaker 1 And so I think it's really just, hey, we both have to be, we've both really worked hard. We both have to feel the reward of this.
And I love that you feel the reward of traveling.

Speaker 1 And I love traveling with you, but I really feel the reward in day-to-day life. I just like being able to go and pick up lunch, play golf with my buddies, and it's no big deal.

Speaker 1 And I'd love for it to reflect, for both of those things to be reflected on the budget. Right now, the traveling is reflected.
That's great. I would love for, let's just try it.

Speaker 1 Let's give it a trial period. And I think you'll see it doesn't really affect our life much.
And so that's probably the, that's the way I'd frame it up, George. What would you say?

Speaker 2 I would agree on a ratio. Right now, if he spent 500 bucks a month, that's six grand.
Out of their 200,000 that's just coming from the real estate, that's 3%.

Speaker 2 So if they just agreed, hey, we're going to agree to 3% of whatever our yearly income is, which is a tiny, it's not going to make a dent in our income, it's not going to make a dent in our investments, would you be okay with 3%?

Speaker 1 I love that. And, you know, a really great way to see that is on every dollar.
When you open up every dollar, there's all the line items there, but they're divided by category. And so

Speaker 1 most of us have like a

Speaker 1 house category, and it's like in that category is your renter, your mortgage, your utilities, everything that has to do with the house.

Speaker 1 But then you might have a category that says like leisure or fun. And it might have things like saving for a trip or going to the movies or, you know, anything that you consider fun.

Speaker 1 And what's really great is every dollar splits it out and it will show you the percentage that you're spending.

Speaker 1 So if you ever have questions about, oh my gosh, am I spending too much on food or am I spending too much on child care?

Speaker 1 You can go over to the right side of the screen and you'll be able to see the percentage. And a lot of times it'll either put you at peace or you'll go, holy molly, I need to make some changes.

Speaker 2 Well, they got a flat tire because they're saving 90% of their income, but very, you know, not as much giving, not as much spending. I think we need to loosen up to be more well-rounded.

Speaker 1 Yes. Mrs.
Jack, I don't know your name, but it's time to loosen the purse strings. Live a little.
This is the Ramsey Show.

Speaker 1 This is the Ramsey Show on the Ramsey Network. I'm Jade Warshaw.
Next to me is George Camill. And George, I just need you to do one thing.

Speaker 2 Hit me.

Speaker 1 Talk nerdy to me.

Speaker 2 Okay, if you don't know what the heck Jade is talking about, we have done a long-running segment now. We've done at least two of them, which makes it long-running, where we talk nerdy to you.

Speaker 2 We explain what could be a complex financial topic, and we just hit you straight with exactly what you need to know to simplify it so that you can, you know, have a little financial prowess at your next dinner party and kind of drop some

Speaker 2 stats on them. So here's the one for today.
It's compound interest.

Speaker 2 This is something we all like, we hear about it, we kind of understand it. Yeah.

Speaker 2 But then I'll post on Facebook and I'll be like, hey, if you invest this much a month from age this to this, you'll have $3 million. And they go, what are you doing? How is that?

Speaker 2 You haven't saved $2 million. I'm like, you're right.
I put in $200,000 and it turned into $2 million. Ooh.
So we're going to explain the sort of science behind that.

Speaker 2 And speaking of science, Albert Einstein, I don't know that this is true that he actually said this, but he is quoted on the internet a whole lot.

Speaker 1 He is quoted.

Speaker 2 Compound interest is the eighth wonder of the world.

Speaker 1 Listen, I agree with him.

Speaker 1 When it's working in your favor, it's amazing. When it's working against you on a student loan, like only God can help you.

Speaker 2 That's right. So, this is the secret for building wealth.
When we talk about building wealth, baby step four, becoming net worth millionaires, compound growth is a key here.

Speaker 2 So, this is when your money earns more money, and then that money earns even more money. So, it works like a snowball, but instead of debt, you're collecting more as it goes down the hill.

Speaker 1 Give me a, give it to me in numbers.

Speaker 2 Okay, so let's say

Speaker 2 $1,000. Okay.
And you earn 10%. Okay.
So, 10% of of $1,000. $100.

Speaker 2 So after one year, you'd have $1,100, your $1,000 plus the extra $100 you made. Got you.
But now think about this. You earn 10% the next year, but it's not on the original 1,000.

Speaker 2 It's on the new balance.

Speaker 1 And there's the difference.

Speaker 2 The balance now is $1,100, and you're going to earn 10% on that.

Speaker 1 And then it keeps.

Speaker 2 Which is another $110. And so you can see how it starts to snowball as not only did your principal make money, but your principal plus interest now made more interest.
Wow.

Speaker 2 So that's the strategy here. And after 10 years, it would almost triple.
So an easy way to think about this, it's called the rule of 72. Okay.

Speaker 2 So if your money is making 10%, every 7.2 years, your money would double. Love it.
So 1 million turns into 2 million if you had an average return of 10%.

Speaker 1 And we tell people that all the time when you have that lump sum sitting there, you know, people call in and they want to know if they're going to have enough in retirement.

Speaker 1 I love being able to quote that because it's kind of like, oh man, I never thought of it like that.

Speaker 2 Absolutely. So we can walk through a great example of this.

Speaker 2 And if you're wondering what the rate of return is, where we're getting this number, we're not just, this is not like a wet finger in the air. This is the average return historically of the U.S.

Speaker 2 stock market is about 10 to 12%.

Speaker 2 This is before inflation. So post-inflation, it's probably closer to 7%, 8%, 9%.

Speaker 1 And it's worth noting there, a lot of times people make the mistake of looking at the stock market year by year

Speaker 2 instead of, how are you making 12%, Jade? Mine's at 4% this year. And we're going, that's the average over a long period of time.

Speaker 1 Yeah. You're looking for the annualized rate of return.

Speaker 2 So not just negative 4%, and then next year it's plus 20%, and then 4% the next year, you average all of that out. That's right.
All right.

Speaker 2 So let's look at a chart that really explains the power of this and the power of starting early. We're going to look at two guys named Ben and Joey.
So they both start investing.

Speaker 2 Ben starts investing at age 21. He's a young whipper snapper.
He got out of college debt-free. He's crushing it.
He invests $2,400 a year. Excellent.
$200 a month.

Speaker 2 That's not a whole lot, but he stops contributing at age 30. So nine years, he contributes at $2,400, and the total amount he contributed was $21,600.
Wow. Okay.

Speaker 2 Now, what is his total when he turns 67? $2.1 million.

Speaker 1 Without ever adding more?

Speaker 2 Without ever adding more. He stopped at 30.
So he turned $21,000 into $2.1 million just by not touching it and let that snowball roll with compound growth. Wow.

Speaker 2 Now, his buddy Joey, well, he didn't make as many wise financial decisions. He finally gets the ball rolling at age 30.

Speaker 2 He starts investing $2,400 a year, but this time he doesn't stop at 30. He keeps investing until he's 67.

Speaker 2 So 37 years of investing that same $2,400, he ends up contributing $88,000, $88,800 to be exact. You would think, well, he's got to have more than Ben.
He invested way more. No, no, no.

Speaker 2 Joey ends up with $1.2 million.

Speaker 1 Ooh, so time. Time was on my friend's side.

Speaker 2 Almost a million-dollar difference because of that extra nine years Ben had his money compounding. So it's not necessarily about how much you contribute.

Speaker 2 It's really about how much time you let it sit.

Speaker 1 Yeah, each year it's compounding, compounding. In that crock pot.

Speaker 2 And this, that chart, if you're wondering where that came from, that's actually from our foundations and personal finance curriculum that we teach in half of high schools across America.

Speaker 2 And this is the kind of stuff we wish we learned in school growing up, Jade. And now you can, which is great.

Speaker 1 I think a lot of this is really important. I think a lot of people,

Speaker 1 they forget about compound interest. They're thinking about simple interest.
They're thinking, you know, if it's $1,000, you're always going to have interest on the original lump sum.

Speaker 1 And with compound interest, it's even better than that.

Speaker 1 It's always growing. So that's wonderful.

Speaker 2 Well, now to be clear, people go, well, Jade, if it's so important to get started early, then why do you tell people to pause investing until they're out of debt?

Speaker 1 Well, you know, here's at the end of the day, that time is usually negligible.

Speaker 1 And I always tell people all the time, if you're messing around and playing around with the baby steps, you're going to screw yourself.

Speaker 1 Because if you say, yeah, I'm working the baby steps, I'm in baby step two. And then you play patty cake with with it for the next seven, eight years.
And then you pay off some debt.

Speaker 2 I'm trying to invest. I'm trying to save for a house.
You can't do seven things at once and do it any of it well.

Speaker 1 Yeah. And then you mess around and you put your stuff on hold for the next decade.
Well, yeah, you just screwed yourself.

Speaker 1 But if you do it the way we teach, most people are out of debt, George, in two years or less.

Speaker 1 And so that's really negligible in order to have the full power of your income at your disposal so that you can invest 15%, which is far more.

Speaker 2 Most people are doing three or four. They're going, I'm going to get the match and I'm going to just put the rest in the back burner.
That's right. That's not enough to retire with dignity.

Speaker 1 That's right. And so the way we teach it, not only are you getting your debt cleared off, but when you do finally start to invest, you're investing far more than you would have.

Speaker 1 Therefore, you're going to make up the difference pretty quickly. And so this works.
At the end of the day, you know, people can question it, but there's 30 years of experience behind this.

Speaker 1 And I know, you know, I know, George, you work the baby steps. I work the baby steps.

Speaker 1 And the cool thing is, George, I was the person who had to wait seven and a half years because it took us seven and a half years to pay off our debt.

Speaker 2 Then we turned around and saved three to six months then we turned around and bought a house then we started investing and i can tell still tell you on this side of it it still works the the the the principles still work so you'll be good and there's still time so if you're hearing this you're going well that'd be nice i'm not 21 jade listen i'm joey joey is right here there's still you know even if you let let's take this example you're 35 and you finally started investing uh-huh if you invest till 65 500 bucks a month That's six grand a year with an average average 10% return.

Speaker 2 Exactly. They go, where am I going to find 500 bucks? That car payment looks a whole lot like 500 bucks.
Pay that thing off or sell it. You'll free that money up.

Speaker 2 Well, from 35 to 65, 500 bucks a month, 10% return, 1.1 million. Wow.
How much did you actually contribute? 180 grand.

Speaker 2 So when you look at that, you go, 80 to 90% of the growth was stuff you didn't even do.

Speaker 1 On that example, a million dollars was growth.

Speaker 2 Is that right? Almost. The growth was 950 in the season.
Holy moly. And so you just, you know, look at these numbers.

Speaker 2 I'm using our investment calculator on our website, and you guys can punch in your own numbers and start to have some hope that you can retire with dignity and you don't have to wait on the next person in the White House or go, I'm scared of the stock market.

Speaker 2 I'm more scared of you not investing at all and retiring broke.

Speaker 1 So true. Yeah.
And back to this, you know, these are all things that some of you are listening. You're like, I never, I just never heard this concept before.
That's why it's so important.

Speaker 1 Foundations and personal finance. I was walking out of the building the other day, leaving work, and a guy walked up to me.
I think he told me his name was Jefferson.

Speaker 1 He was like, hey, Jade, I just want to tell you, we're in baby step seven. We paid our house off.
Now I'm looking at this dude. I'm like, you look extra young.

Speaker 2 So I said, how old are you?

Speaker 1 He goes, I'm 31.

Speaker 2 Whoa.

Speaker 1 I said, 31. I said, I have to know more.
He goes, Jade,

Speaker 1 I had foundations in personal finance as my curriculum in high school. And so I knew never to go into debt, never to go into student loan debt.

Speaker 1 And so when I came out of college, which I paid for in cash, I just, I saved up three to six months. I did my down payment.
You know, I started investing 15%, paid off the mortgage, and at 31,

Speaker 2 no. That's insane.

Speaker 1 Insanity. But that's, that is the power of the thing.

Speaker 2 And here's the thing. If your kids don't get this through the curriculum, through the Ramsey curriculum, they're going to get it from TikTok.

Speaker 2 And TikTok and Instagram are not telling them to stay out of debt. They're telling them to get into debt.
And somehow that's the key to building wealth.

Speaker 2 But we've seen in reality the exact opposite to be true. So if you're interested, you can go to ramseyeducation.com and

Speaker 2 hassle your schools, your teachers, your administration to go, hey, we got to get this curriculum in the school. What are we teaching these kids? Show them how to budget.

Speaker 1 So, so important. Let me tell you, you might be a little late to the game.
You might be Joey. I was late to the game.

Speaker 1 And even if money didn't come from you, even if you didn't come from money, money can still come from you through your kids and changing your family tree.

Speaker 1 Do it, do it, do it. This is The Ramsey Show.

Speaker 1 From the Ramsey Network, you're listening to The Ramsey Show. I'm Jade Warshaw.

Speaker 1 Next to me is George Camille and here we help people build wealth, do work that they love, and create amazing relationships. And we do that with your calls.

Speaker 1 This is a live show, so be sure to give us a call and we'll talk about your life and your money. The number is simple, 888-825-5225.
That's the number that gets you in.

Speaker 1 All right, George, let's get to the phone lines.

Speaker 2 Game on.

Speaker 1 On and popping. All right, we got Lee.
She's in Columbus, Ohio. What's going on, Lee?

Speaker 2 Hi.

Speaker 3 You guys are like my two favorites here.

Speaker 2 I'm so excited. I cannot wait to tell Ken and John and Rachel and Dave that's so kindly.
Thank you.

Speaker 1 How can we help?

Speaker 3 Well, I think my question is actually pretty timely. I work in local government, so I'm in a pension.

Speaker 3 My husband and I are on baby steps four, five, and six newly, but I have always been required to put 10% of my money or my salary into a pension. Okay.

Speaker 3 And now that I'm looking into it,

Speaker 3 I have the opportunity, and I can only do this once, I cannot take it back to switch to a member 401k type of plan

Speaker 2 so I just

Speaker 3 you know I can't roll over what's already in the pension or anything like that but I'm just

Speaker 3 I have I mean I've been in service for nine years and I love my job.

Speaker 3 So this isn't a matter of like staying at my job, but if I'm looking at retirement even 25 years from now, because I'm 35, say at 60, is that enough time to still contribute my 10%?

Speaker 3 And then I matched it like 7%, 7.5%.

Speaker 2 That's amazing. That's awesome.
100%.

Speaker 2 I would switch over to the 401k instantly.

Speaker 1 And the good news is,

Speaker 1 and George is going to go over a bunch of reasons, but for me, you're going to get to choose the investments and you're going to have a better mix. And I think that for me is the thing.

Speaker 1 And by the way, I just want to call out, I want you investing 15% when the time comes, not 10.

Speaker 3 Oh, right.

Speaker 3 We can't contribute more than 10% in this particular plan even the 401k but we have I'm contributing above and beyond in a

Speaker 2 deferred compensation okay like a 457 gotcha so that's where the other money would go but the 10% is like what we're locked into required for is there a Roth option with the 401k or is it just traditional

Speaker 3 It is

Speaker 3 just traditional.

Speaker 2 Okay. Because your other option is a Roth IRA as long as you're not above the income limits.
And that can be a great place to start for some tax-free growth.

Speaker 2 And then you can do the rest in that traditional 401k.

Speaker 2 So I would invest up to the match. You said it's how much is the match?

Speaker 3 7.5%.

Speaker 2 And is that regardless of your investing?

Speaker 2 Or is it up? You invest 7.5%? 10%.

Speaker 3 I have to do 10% no matter what. They just happen to match up to 7.5%.

Speaker 2 Okay. Awesome.

Speaker 1 Now, the 457, do you have to go go to that next or can you go to a Roth IRA next?

Speaker 3 Oh, I can, yeah, I can switch it to a Roth IRA. That was just something I was contributing to in addition a while ago, but now that we're in 456, I'm like, we have to look back at this.

Speaker 3 So now that I'm looking at other contributions,

Speaker 3 I can switch totally over to a Roth if I wanted.

Speaker 1 Yeah, I really like the idea of, obviously you want to get the match, but to George's point, having that Roth there, we get calls all the time of people who are on into retirement age, and and they most of what they have are traditional accounts and they have these required minimum distributions and everything and it's like oh my gosh they just wish that they had rolled it over into Roth style accounts earlier and so I think it's important to have the right mix of that going in and if you can start that earlier I think it's a great thing

Speaker 3 okay and then one more question

Speaker 3 I'm basically with building up so my I will be required to take you know once I retire I think retirement age it would be full benefits at 62 for the pension it is a payout per month since I have done nine years of service at like $700 a month if I were to wait till 67 it's up to $1,300 a month and I'm just like

Speaker 3 there would be the option with the account value which is about a hundred thousand you can take a lump sum over

Speaker 3 I so the lump sum is 44,000 out the door but I could roll it over like if I ever left public service, which I don't intend to, but if I did, I could roll over the full account value, which is about $100,000 into an IRA at that point.

Speaker 3 So I don't know if I have that chance at retirement, but I'd rather do that.

Speaker 2 Yeah, as long as there's no penalty, when the age is right, where you can do this without penalty, I would take the lump sum and invest that on your own.

Speaker 2 And that way, again, you have more control over it. It can pass down to your heirs because the problem with pensions is they die with you.

Speaker 2 And so

Speaker 2 there's one big benefit to moving it over. And the other reasons, Lee, the average return on pensions is not great comparatively to what you could get in a 401k where you have the options.

Speaker 2 So pension plan might be 7%. With the 401k, it might be 12%

Speaker 2 or more. And then again, when you die, you can pass it down to your heirs with the 401k.
With the pension, it'll die with you or maybe your spouse at a lower amount, you know, survivor benefits.

Speaker 2 And again, you own the 401k. The company owns the pension.
And how long does the money last? Well, it's your lifetime with the pension.

Speaker 2 And with the 401k, it's until the money is gone as you keep passing it down generationally.

Speaker 1 Oh, yeah. So if the health of the business starts to go down, that could definitely affect your pension in a major way.

Speaker 2 Which with the government, it'll be here to stay.

Speaker 2 So, I'm not as worried with the government pension just disappearing, but I do like the idea of you doing better on your own with more control and more say. Very good, very, very good.
End of story.

Speaker 1 Good, good call. Thank you so much for that call.
That was great. I didn't mean, I kind of cut her off with you.

Speaker 2 Sorry, Lee. She was probably saying something really cool.

Speaker 1 Lee, I love you. That was a mistake.
That was a user error.

Speaker 2 Well, she can always call back for more. We love Lee.
She's like, I'm not coming back.

Speaker 1 She hung up on me.

Speaker 2 It was an accident. We love you.

Speaker 1 I love that. George, we get those calls all the time about

Speaker 1 pensions versus 401ks versus Roth IRAs versus IRAs versus there's so many deviations.

Speaker 2 It's exhausting.

Speaker 1 Okay, so let's let's talk nerdy to the people and let's explain the best way to invest their money when they hit baby step four.

Speaker 2 Oh, that's good because we kind of talked around it. We talked around it.
So the easiest way is remember five words. Match beats Roth beats traditional.
So that's the strategy here.

Speaker 2 So if you have a match with your employer retirement plan, let's take that first because it's a 100% return. You put in 4%, they put in 4%.
Yes. That's a win.
Free money. Beyond that, Roth,

Speaker 2 that's just a tax treatment on the account.

Speaker 1 And it just means simply that you're paying taxes now, so you don't have to pay the taxes later in retirement.

Speaker 2 Exactly. And then lastly, you have traditional, which means we're going to, you know, might get a tax advantage now,

Speaker 2 but we're going to have to pay taxes on that money later.

Speaker 1 That's right. It lowers your taxable income now, but later on, when you're in your retirement years, when you go to pull that money out, it's income, so you're paying taxes.

Speaker 2 And there's a big discussion and debate in the financial community amongst the nerds about, well, Roth versus traditional, and should you be doing Roth now versus the truth is, if taxes stay the same and income stay the same, it would be an exact wash.

Speaker 2 But we're kind of hedging our bets going, my guess is taxes might be higher now than they are today. And we don't know what your income will be.

Speaker 2 Everyone says, well, just during retirement, your income will go down. Maybe, but I don't want to have to limit how much I'm enjoying my investments because of tax reasons.
So I love the idea.

Speaker 2 When you look up at 62 and you've got a Roth IRA with $2 million,

Speaker 2 that's $2 million of after-tax

Speaker 2 net money that you get to use without Uncle Sam ever getting his grubby hands on. I know that's right.
I know that's right. And with all of that, you haven't actually invested yet.

Speaker 2 Those are just types of accounts and investing strategies.

Speaker 1 So how do we invest it, George?

Speaker 2 Well, mutual funds or index funds outside of retirement. That's a great way to do it.
Giant groups of stocks.

Speaker 1 Yeah. George, I like the electronically traded funds.

Speaker 2 ETFs. Yeah.
Exchange trade. Yeah,

Speaker 2 they're kind of like mutual funds that trade like stocks, which I don't love for that reason. Kind of gets you a little bit, oh, should I jump in? Should I jump out? Yes.

Speaker 2 Not a whole lot of people.

Speaker 1 Me saying that was me being them.

Speaker 2 Thank you for being them, Jade. You're just like the rest of the trolls.
I thought you were so much better.

Speaker 1 Oh, my goodness. Thank you, George, for the crash course on investing.
This is the Ramsey Show.

Speaker 1 You're listening to The Ramsey Show. Thanks for being here.
I'm Jade Warshaw. Next to me is best-selling author George Camel.

Speaker 1 Today's question of the day is brought to you by YReFi.

Speaker 1 If you're in over your head with private student loans and tired of getting calls from collection agencies, I know how that feels, you need YReFi. Why ReFi

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Speaker 1 That's the letter YREFY.com slash Ramsey. It may not be available in all states.

Speaker 2 Today's question comes from Peter in Wisconsin. My son let his home get to within 10 days of foreclosure before telling my wife and me that they were in trouble.
He has $350,000 in equity.

Speaker 2 I could not let this happen, so I paid the $35,000 that was owed, which made them current on their loan.

Speaker 2 I've explained to him and his wife they need to sell the house and get the equity out and start using the Ramsey plan to manage their money. Now they won't talk to me or my wife.

Speaker 2 Did I do the right thing in helping them out?

Speaker 2 Well, clearly not if it destroyed the relationship.

Speaker 2 I think it was well intended and a very sweet thing to do, but the problem is they didn't seem to ever ask for your help or your opinion in these matters.

Speaker 1 And it all has to do with how you explained it. Were you like, look at what you did.
You guys never should have been, you know, like that's different than explaining it in a better way.

Speaker 2 No, he seems like a wonderful person. I think it's, I think it's on them that, you know, they reacted this way because he said before telling my wife that they were in trouble.
So he came to him

Speaker 2 ten days before foreclosing. This had clearly been going on for months.
This foreclosure doesn't happen after one month of missing a payment. And he goes, hey, we're in trouble.

Speaker 2 So clearly he was looking for help by going to the parents, letting them know about this problem. And so I think, truthfully, there's a lot of shame and guilt here.
I think you're right.

Speaker 2 And now it makes the relationship kind of like a business transaction where you come across like a lender and now it's awkward because I need a daddy to swoop in and fix my mess.

Speaker 1 Well, they don't say that there is an interesting piece missing from this on whether or not the kids owe the 35,000 back to mom and dad.

Speaker 2 It doesn't sound like he wants or needs the money.

Speaker 2 So, yeah, if he said, well, when I asked for the money, they stopped talking.

Speaker 2 That would make more sense. Yeah.
Versus a gift of like, hey, listen, I'm going to get you guys out of this bind, but you got to please follow this plan. I bet it was a well-intended situation.

Speaker 2 But my worry is if you didn't save them, like they're going to be right back in this mess. And so

Speaker 2 while I would love for them to follow the plan, I think they couldn't, they clearly could not afford the mortgage. So even getting them current on the loan doesn't solve their problem.

Speaker 2 That's why he's saying you guys need to sell the house, get the equity out, do this the right way. So my fear is they end up right back here and go, dad, I'm in a bind again.

Speaker 2 We're behind three months on payments because they didn't actually change their habits.

Speaker 1 Yeah, I agree with you, George. Matter of fact, James, I think we need to add a segment where we show up at the people's door who did the question of the day and we can ask them more questions

Speaker 1 about marriage.

Speaker 2 Call into the show and maybe we can talk more through it. It's a very interesting situation.
It is. But did I do the right thing in helping them out? I think it was a noble thing to do.

Speaker 2 It's what, you know, personally, I love my daughter. If she was in a bind, I would do anything for her.

Speaker 1 100%.

Speaker 2 Yeah. But again, if she didn't ask for it, I don't know.
But they asked. He came to them with a problem.
My daughter knocks on my door and says, hey, we're on the brink of foreclosure.

Speaker 2 I'm going to do whatever I can to help them out. Yeah.
And then steer them to the plane. So I don't know that I could have done anything differently.
Yeah.

Speaker 1 I mean, it's different. There's one thing.
It's kind of like, you don't want to be an enabler.

Speaker 1 Like, if it was a situation where this has been going on for a long time and helping them would be, in a sense, giving a drunk a drink.

Speaker 1 Or it's very possible that they just had, you know, a slurry of really tough things happen and it just resulted in this, you know, foreclosure situation.

Speaker 1 And mom and dad were like, Listen, we can help.

Speaker 1 So, more details are needed, but George, I think you're exactly right.

Speaker 2 I would have been like, Hey, I'll give you the 35, but you guys are going to go through Financial Peace University tomorrow. Yeah.
Matter of fact, you're going to go through every lesson.

Speaker 1 If we can send that to Peter to send to

Speaker 2 the son and daughter, probably have his email, right, Producer James? Okay, we'll try to. That'd be great.

Speaker 2 We'll give that to them as a gift and see if we can get them on track because I want to help them for the rest of their life, not one time in a bind. Yeah, that's good.

Speaker 1 All right, we've got Ann in St. Cloud, Minnesota.
What's going on, Anne?

Speaker 3 Hi, this is Ann.

Speaker 3 Thanks for taking the call today.

Speaker 2 Sure bet.

Speaker 2 What's up?

Speaker 3 So my question for you is basically, should I quit my job?

Speaker 3 So a little bit of background. My husband and I, we got married, had a baby, and bought a house all in one long.

Speaker 2 I hear that baby. Hooting and hollering.
Yeah.

Speaker 3 He is going to be a little bit whiny in the background, so my apologies.

Speaker 1 Did you say you got married, bought a house and had a baby all in how long

Speaker 2 one year oh mama okay and what's your current job

Speaker 3 um so i work as a minute an administrator for a ministry

Speaker 3 and the problem is there is some morally corrupt stuff going on with the leadership

Speaker 3 yeah it's so unfortunate it was like a dream job when I took it um and so good for our family but now it's like I kind of have no choice but to leave.

Speaker 1 Yeah.

Speaker 2 So what's now I'm just kind of

Speaker 2 leaving.

Speaker 2 We need to line something up. I don't want you just quitting and going, well, I'll just figure it out over the next four months.

Speaker 1 Yeah, what's the income you need to try to make up here?

Speaker 3 Well, bare bones budget, my husband and I will be able to make it by without even dipping into our emergency funds. So that's the good thing.

Speaker 2 So living off of his income?

Speaker 3 Yes, he can pick overtime, which is super, super helpful, but it's not a way to live yeah

Speaker 1 so what what were you making

Speaker 3 I was making about thirty eight hundred a month okay

Speaker 1 so we need to make up that income or at least most of it

Speaker 3 and that's kind of the thing my husband's really supportive

Speaker 3 but I don't know what my next step is and

Speaker 3 I don't want to put my child in daycare so I might look for some at-home admin work but I'm really just not even sure where to start well um let's kind of start by the looking at the financial picture so we can know what needs to be done do you what baby step are you guys in do you have debt

Speaker 3 um luckily we're on baby steps four five and six good okay how much is in the emergency fund

Speaker 3 we have about um thirty six thousand dollars wow that's a big old emergency fund

Speaker 3 Is that too much?

Speaker 2 Well, it sounds like it's a lot more than six months based on what you've told me.

Speaker 3 Yeah, both of our take-home pay is about $7,500 a month.

Speaker 2 Okay, all together. Okay, good.

Speaker 1 So you...

Speaker 2 So you're looking more for help on the career side of what to do next for a job?

Speaker 3 I'm looking for that and just if I can afford to stay home with him too. So if could I afford to stay home?

Speaker 2 Well, you just told us on a bare bones budget you can get by, but that's if he works overtime. So it's not a bad thing.

Speaker 1 So that's no way to live.

Speaker 2 Right. So we need to get his income up or you need to work part-time in order for this to make sense.

Speaker 1 So what would it look like? You know, you were doing the job in the ministry. Is that something that you would want to do again at another ministry?

Speaker 1 Do you, you know, tell us more about what you feel like you're qualified to do and the work that you would want to do?

Speaker 2 I put her on hold with the baby yelling. You can get her back, Jade.

Speaker 1 Let's see, where is she aligned to? Sorry about that, Ann.

Speaker 2 That baby's got pipes. Did I just say? She's rolling in.

Speaker 1 Here's what I think. I'll just kind of give you the synopsis of what I think.
I think you guys need to get onto every dollar.

Speaker 2 Do you have every dollar?

Speaker 3 We do.

Speaker 2 Okay.

Speaker 1 Then I think you guys need to get on there and figure out, okay, what, what amount of money, because it may not be a full 3,800, but what amount of money would take you out of that unsustainable place to where it's like, okay, we're not on bare bones.

Speaker 1 Husband's not having to work overtime all the time, and we can kind of live a life like this. And maybe it is $3,800.

Speaker 1 But then after that, it's all about you sitting down and going, okay, what can I do? What would I like to do? And then I'm getting on all the sites. I'm getting on Glassdoor.

Speaker 1 I'm looking to see what's available.

Speaker 2 i'm looking for work from home options i'm looking for part-time options and i think at this point you're just kind of pounding the pavement as they say and knocking on doors to get another job and we can help you with that ken coleman has a great book called find the work you're wired to do because maybe this is the career path in the administrative space maybe it's not so we're going to send you this resource with that you're going to get the get clear career assessment take that and then start talking to your friends and say hey does this line up all of this assessment stuff what i'm does this line up with who you know me to be my personality what i'm wired to do And that might be a work-from-home admin job.

Speaker 2 It might be something else. And, you know, maybe you go make some crazy money and you go, I want to get a full-time nanny in-house.
Yeah. Because I want to do daycare.

Speaker 2 You have the options, but we do have to figure out the financial piece.

Speaker 1 Yeah, but the good news in this is because you guys did the right thing, it frees you up to now for you to be able to do the right thing with this job.

Speaker 1 You don't have to stay in a job where, you know, morality is being questioned or, you know, negative things are happening or even illegal things.

Speaker 1 I don't know what's going on over there, but you've got the emergency fund and you can get out and you can get another job. Hopefully that pays more.
This is the Ramsey Show.

Speaker 1 You're listening to The Ramsey Show. Thanks for listening.
Listen, guys, you need cash. I know that you need cash.
And so I've got just the solution for you. The Ramsey Cash Giveaway is here.

Speaker 1 Ew, ew, ew.

Speaker 2 We're trying to give you money.

Speaker 2 It's Dave's money, which is my favorite type of money.

Speaker 1 And it's a lot. $10,000 cash.

Speaker 2 That's the grand grand prize. Wow.

Speaker 1 $10,000. It used to be like $3,000.
$10,000 is a lot of money. This is one of our biggest influences.

Speaker 2 Inflation hits the giveaway too. We're like, we got to up it.

Speaker 1 That's right. That's right.
Accounted for inflation. I love that.
Thank you, Dave. All right.
If I had $10,000, I can already tell you right now, that's a vacation.

Speaker 1 For some of you, that is paying off a student loan. For some of you, that is, you know, going towards your three to six months of expenses.
All I know is $10,000 is a bag, George. And if you get that,

Speaker 1 it has the potential to really change where you are right now. That's several full tanks of gas.
I mean, there's a lot you could do with $10,000.

Speaker 2 That's at least four Stanley tumblers. At least four.

Speaker 2 It's amazing.

Speaker 1 Those things are so expensive. So if you need $10,000, if you could really use it, you can enter.
Go to ramseysolutions.com slash giveaway. And here's the thing.
You can enter every single day.

Speaker 1 And the more you enter, the more it increases your chances at winning. So do that.
Now through August 31st, not only that, George, but we're also having our $12 sale.

Speaker 1 So now's your chance to not only enter this cash giveaway, but you can also grab one of our best-selling books at a lower price.

Speaker 1 So whether you're trying to do better with your money, whether you're trying to deal with your anxiety, whether you're trying to get your job to and your career to the next level, we've got books and products that will give you a plan, that will give you hope, and they're at a discount.

Speaker 1 $12.

Speaker 1 So guys, look no further. This is the assignment.
Go to ramseysolutions.com/slash store and then go to ramseysolutions.com/slash giveaway to get your $10,000 entry. That's how this works.

Speaker 2 Any other announcements, Jay, before we keep going?

Speaker 1 I got another announcement.

Speaker 2 All right.

Speaker 2 For the good of the group.

Speaker 1 This is for the good of the group. Listen, you guys who like to listen to the Ramsey show, I want you to know that after this segment, the next two segments, we're going on to the app.

Speaker 1 So if you want to keep listening and finish the show for the day, then you need to head over to the Ramsey Network app.

Speaker 1 You can do that by going, you know, into the app store and downloading Ramsey Network app. You just search it in the little tab and it'll pop up there.

Speaker 1 But if you're used to watching the entire show, that's where you go if you want to finish the show.

Speaker 1 And I'd really, you know, recommend that you do that because there's a lot of really cool things within that app that you can.

Speaker 2 And if you're not listening on radio, you keep doing you. The show is going to continue on radio.
This is for YouTube and podcast folks. That's right.

Speaker 1 And so there's, again, there's two ways to get the app. You can click the show notes.
They'll have it there if you just like to click a link.

Speaker 1 Or if you're savvy, like I said, just go into the app store and, you know, Google Ramsey Network.

Speaker 1 If you're extra savvy and you're watching right now, there's a QR qr code on the screen if you know how to take a picture of that and go to the link that's right george that's good for the extra tech folks yeah and if also i just let me just say for those of you who have submitted feedback on the app we've heard you and we are working to make the experience even better we're always working to make things better for you but really we're just getting started with this app and you're all the time we're adding more cool features to it so this is just like rock with us on this keep rolling with us on this you know it's all gonna be good don't miss what's coming up next go to the app so you can watch the full show.

Speaker 1 Okay, I'm off my soapbox.

Speaker 2 Jay's gonna bring it in the next hour. Listen, that's a tease right there.
The calls coming up, they're bangers, is all I'm saying.

Speaker 1 You don't want to miss it. All right, let's go to the phone lines.
We've got Matthew in Dallas, Texas. What's going on, Matthew?

Speaker 3 Hey, how are you guys?

Speaker 2 Doing good. How are you?

Speaker 3 Doing well. Thank you.
Hey, so I just recently sold my business

Speaker 3 commercial landscaping company. Yeah.

Speaker 2 How much?

Speaker 2 It's hundred thousand hey that's a good paycheck

Speaker 2 yeah there's there's some business debt involved oh so where are we at now it's not what i netted oh what you network

Speaker 3 yeah so after paying off the business debt paying off my uh some personal debt um i netted around a hundred and five thousand okay

Speaker 3 and so i still have the truck uh i still have a truck that uh that's in my name but the new owner uh because i'm going back to work for the same company that I had, that I owned.

Speaker 2 Oh, wow. So you'll be an employee now instead of the owner.
Exactly. Okay.
Exactly. What's owed on the truck?

Speaker 3 So, yeah, so I owe $28,000 on the truck,

Speaker 3 but he has given me a stipend of $500 a month to pay for the truck. So it doesn't fully offset the cost of the payment, but it almost does.
It's about three-fourths.

Speaker 1 And

Speaker 1 would he pay you that $500 a month until the truck was paid off? Or was there a limit on how long that would last?

Speaker 3 As long as I stay with the company, basically.

Speaker 2 But if you paid off the truck today, would you still get $500 a month for a stipend? I would. Yeah, absolutely.
Great. Paid off, man.
Yeah, I would.

Speaker 3 Yeah, so that's my question, I guess. So

Speaker 3 that's all we really owe. So I owe my truck.
My wife's car is paid off. Our house is not paid off.

Speaker 2 Okay.

Speaker 3 But we have a ton of equity in our house.

Speaker 1 What do you owe on it? Just curious.

Speaker 3 $385 on our house.

Speaker 2 Okay.

Speaker 1 Any other debt?

Speaker 3 No, ma'am. Nope.

Speaker 2 Awesome. So you pay off the truck.
You're left with $77. How much do you have in savings?

Speaker 3 That's all our money. My wife has about $28,000 and her $401k.

Speaker 2 So no other debt.

Speaker 3 That is our savings, but there's no other debt. Correct.

Speaker 2 Great. So what I would do is I would put away six months of expenses out of that 77, and the rest, you can start attacking the mortgage.
If you have kids, you can start putting away some for college.

Speaker 2 That really sets you up.

Speaker 3 Yeah, well, and I guess my other question to that is, though, is that I'm going to have some long-term capital gains, and that's my fear.

Speaker 3 So I'm like, well, if I pay off the truck, like I said, I owe $28,000 on it. And if I pay it off,

Speaker 3 you know, and then I have to pay the capital gains, but I'm actually paying the capital gains on almost $300,000 and then plus, you know, whatever our income is.

Speaker 2 Are you working with a tax pro on this?

Speaker 3 Yes, I am.

Speaker 2 So you'll know exactly what the number is. And so come tax time, you'll need to have that money set aside.
I'm guessing the 77 is going to cover it.

Speaker 3 Yeah,

Speaker 3 you think I should wait to pay it off until I find out what that number is on the tax?

Speaker 2 I mean, I pay it off ASAP if it's due, but if it's just part of your April taxes.

Speaker 1 When will you know?

Speaker 3 Well, I won't know until they do our taxes, though, probably next year. Okay.
So it'll be part of our 24 taxes.

Speaker 2 Okay.

Speaker 2 Yeah.

Speaker 3 Yep, so I won't know until she starts doing the doing the taxes for us.

Speaker 2 I wonder if they could do an estimate.

Speaker 2 I'm sure you could get an estimate from your tax pro now to go, I want to make sure I have enough set aside because I know there's going to be a big bill this year.

Speaker 3 Yeah.

Speaker 2 I'd look into that.

Speaker 3 But y'all wouldn't have a problem paying off the details.

Speaker 2 You're not doing it. I mean, you're following to the letter of the law.
Yeah.

Speaker 3 Yeah.

Speaker 2 Okay. So that's why we're working with your tax pro to make sure.

Speaker 2 That's awesome. Welcome to the crew, man.
You're doing great. What's your new income now as an employee?

Speaker 3 Well, it's $1,400 net per week, is what I'm making.

Speaker 2 Okay. And is that similar to what you were making before as the owner, or is that a lot less?

Speaker 3 It's actually a little more because he owed me some commissions that I'd sold before I sold the company.

Speaker 1 Can I just ask, what made you sell the company? Did you sell it just to clear debt or what was your debt?

Speaker 2 To get out of debt. Yeah.
Yep, that's exactly right.

Speaker 3 To get out of debt.

Speaker 2 Cool. Well, here's the good news.
You know how to do it. And you could do it again debt-free one day if you wanted to.
That's right.

Speaker 3 Yeah, at this time, I would have a different plan for sure.

Speaker 1 Well, very, very good. Hopefully we helped you out.
Thank you so much for the call. And George, you bring up a really good point.

Speaker 1 When it comes to things like this, if you need help with taxes, we have tax pros here.

Speaker 1 You can go to ramseysolutions.com slash trusted, and there's all the services that we provide, but amongst those are tax pros.

Speaker 2 And they follow the Ramsey plan. Yes.
They're not going to steer you into go, well, you really should go

Speaker 2 buy this $100,000 truck for a write-off. They don't say that kind of crap.

Speaker 2 They're going to make sure that you're following the Ramsey plan, helping you stay out of debt, helping you avoid IRS, you know, back taxes. And that's a big one, especially for business owners.

Speaker 2 We tell them, hey, file quarterly estimated taxes. That's right.
Make your payments. Set money aside every month.

Speaker 2 Set 25% aside, whatever it is for you, to make sure that you're covering that. Because IRS debt, we put it at the top of the debt snowball when we hear about it because the IRS can screw up your life.

Speaker 2 They can garnish your wages. They can sue you.
They can. put you in prison.
So we don't mess with that.

Speaker 1 That's so, so true. And you're right, George.
The big point is those Ramsey Trusted folks, they do follow it our way. Because before I worked here, you know, I was just out.
I'm out in the world.

Speaker 1 I'm looking for a tax pro. It's hard to find people who will align with

Speaker 1 the way that we teach and the values that you've said. Okay, yeah, this is the way I want to live my life.

Speaker 1 But once we started using those pros, it made it so much easier because I don't have to explain it. I don't have to explain to them the baby steps.

Speaker 1 I don't have to explain to them why I care about getting out of debt, why I don't want to utilize that. It's just, it makes it so much simpler.
So again, ramseysolutions.com slash trusted.

Speaker 1 That's where you want to go to get the help that you need with taxes, real estate, and more. This is the Ramsey Show.

Speaker 1 You are listening to The Ramsey Show. I'm Jade Warshaw.
Next to me is George Camill. We're taking your calls, but not this segment.
This segment, we have something fun planned. It's a budget review.

Speaker 1 All the time we talk about every dollar. It's the best budgeting app out there.
And so many of you utilize every dollar, but you still have questions.

Speaker 1 You do it and then you're like, Jade, something's still not math and right with my money. Can you help me out? Maybe there's an area that I'm overlooking.

Speaker 1 And so that's what George and I are going to do this segment.

Speaker 1 I had

Speaker 1 basically it's a Google Doc, George. And I went on to social media and I said, hey, if you want me to review your budget, just fill out this Google Doc and with all the right information.
And

Speaker 1 I'll pick one of your budgets. And so we've got Janai and Schuyler.
I'll give you a quick synopsis. And really cool, they're actually on the phone line today.

Speaker 1 So it's Jani and Skylar, uh 35 36 years old a stay-at-home mom and an electrician they're from utah uh they make sixty nine thousand dollars per year but they bring home about fifty six hundred per month uh did i get that right skylar

Speaker 2 uh i've got

Speaker 2 oh we oh okay i don't think that's me

Speaker 2 what are

Speaker 2 Okay, got it. What are the odds that there's another Skylar on the line?

Speaker 1 I know, Jane.

Speaker 2 Which is super confusing.

Speaker 2 that's crazy yeah janai hello welcome hi thanks for putting your business out there for the good of others to learn and grow yeah yeah that's cool thanks for having me on so did i get the numbers right 50 you're bringing home about 5 600 per month let's see if we can pull it up on the budget to see if i'm confused because you make 69 a year that's about take-home pay because 5600 bucks is 67 grand a year Yeah, so we budget based on it's kind of

Speaker 3 most tricky situation, which is why I'm so interested in talking to you guys

Speaker 3 we budget for him working a 50 hour week which is right about $1,400 a week

Speaker 3 which is the $5,600 take-home a month so I don't know what it all is like before taxes and stuff but

Speaker 3 we we end up making more because he works extra overtime when it's available and his job

Speaker 3 since he's in construction and they're so desperate for men

Speaker 1 So the $5,600 is the lowest that you would bring in.

Speaker 2 The lowest. Okay.

Speaker 1 Can we bring the budget up on the screen and take a look at it with you?

Speaker 1 Yes. Let's do it.
All right. So you may not be able to see this in real time, but you can go back and watch it.

Speaker 2 We've got your every dollar budget here. We plugged it all in.
And we have your income at the top, $5,600.

Speaker 2 $1,400 a week.

Speaker 2 As we move down, we're going to go to giving. You're giving a little to the church, $201.

Speaker 2 Savings. We have school savings of $200.
Tell me about that.

Speaker 3 Yeah, so he's still in trade school.

Speaker 3 And so we are just putting $50

Speaker 3 every week, basically a sinking fund to get

Speaker 3 grasp

Speaker 3 every semester. Yeah.

Speaker 2 I love that.

Speaker 1 What about the emergency fund?

Speaker 1 I think you told me that you had $1,000, but you had to dig into it recently.

Speaker 3 Yes, we had some dental. I had to get a crown last week.

Speaker 3 So we'll be able to rebuild that by the end of the month back to the $1,000.

Speaker 1 Okay, excellent. Because you also told me that your biggest debt, your biggest goal is to pay off your debt.
So you guys are baby step two people.

Speaker 1 So we'll kind of filter all of the information we give you through that idea of

Speaker 1 at the end of 30 days, you'll have the emergency fund back, and then it's game on paying off the debt. So George, let's keep looking here.
Car maintenance.

Speaker 2 You got some car maintenance, 100 bucks a month. That's good.
I'm happy with that. And then we have the mortgage at $1,650.

Speaker 1 Yeah, the first thing I thought is it's a little bit more than what we'd say the 25% rule. I think that it's, you know, it's $2.50 more.
So I think that for you guys.

Speaker 2 It's not on fire.

Speaker 1 It's not on fire, but just being aware of that will change the way you spend going forward. So utilities, everything like that, looking good on here, George.

Speaker 2 Gas, electricity, internet, nothing crazy here. Yeah.
Fuel for the car. Now we have groceries at $7.50.
Is this just for you two?

Speaker 3 So we have a two-year-old and a nine-month-old.

Speaker 2 Yes. Interesting.

Speaker 1 Plot twist. We didn't know that.
Okay, great. So $7.50 for groceries, I'm not mad at.
I will say with the restaurants, I try to cut that down. You know, you've got kids.
It's inevitable.

Speaker 1 You're going to pop through a drive-thru or order a pizza somnight.

Speaker 2 So maybe pop it down to 40.

Speaker 2 And make that like your emergency scenario. Crap hits the fan, but try to limit it to nothing.
Try to go, can we avoid eating out while we're trying to get out of this debt?

Speaker 1 George, can you change it to 40? Let's see if it adjusts.

Speaker 2 Oh, this is fun. Yeah, let me change it to 40.
Because as you see at the top of the budget, they've got 1380 bucks left over if they follow this budget to a T.

Speaker 1 That's the margin right now. So the goal here, since you're trying to pay off debt, the goal is to get the margin higher.
And look, already, I can't see it from here, George Williams.

Speaker 2 We're at $2.43 now in margin because we brought the restaurant category down. So if we keep going, we have phone at $221.

Speaker 2 Let's talk about that. Are you guys trying to pay off a phone within that?

Speaker 2 The mine is on there.

Speaker 3 And then our streaming services are bundled in there as well.

Speaker 2 Okay.

Speaker 1 So if there's a phone payment in there, figure out what it is and pay it off this month. Like knock that out so that that bill becomes lower.

Speaker 2 And you can then switch carriers. I'm guessing you're with a name brand carrier right now.

Speaker 2 Okay, I would switch to affordable carrier. Like I've got a Tello partner with me on my YouTube channel.
It's 25 bucks a month, Janae, for Janai for all of the unlimited everything plan.

Speaker 2 So my wife is on that plan and she loves it for 25 bucks a month. So that could shave a lot off of this category.
And then, of course, I'm going to personal.

Speaker 1 I love that you guys are thinking about fund money for the two of you, but in baby step two, I don't think this is the phase for that.

Speaker 1 So if I were you, I'd knock that down to 50 bucks between the two of you. During this phase, as much as it pains me to say, you guys are using the same shampoo, you're using the same body wash.

Speaker 1 Like that's what my husband and I did, and that's going to save you what?

Speaker 2 Look at this now. We have now a 493 bucks in margin.
That's excellent. So see what we're doing here, Janiai.
We're trying to go, where can we find more margin?

Speaker 2 And it becomes a fun game. So I think your phone, you could do better there.
That'll come down later.

Speaker 2 Let's keep going down to lifestyle. We got union dues.
I'm assuming we have to pay the union dues?

Speaker 3 Yes.

Speaker 1 I see a big one, though, that I got questions on, and that's Xbox Live.

Speaker 2 Who's playing Xbox?

Speaker 3 That one's non-negotiable.

Speaker 2 Uh-oh. Who's that for?

Speaker 3 That's for Skylar.

Speaker 2 Okay.

Speaker 3 That is his decompressed.

Speaker 2 Can I ask a real question as a man with a baby? How does any father have time to play video games with a nine-month-old and a two-year-old?

Speaker 3 Well, they go to bed early enough, and he is a night owl. He sleeps like he doesn't sleep really, but yeah, that's his decompress.

Speaker 1 Okay, it's an $18 difference. It's in the grand scheme of things, singularly, it doesn't make a huge deal, but if you have a lot of these little things, they do add up.
So we'll say, we'll call this

Speaker 1 your one freebie, because again, they do add up.

Speaker 2 Which means we're cutting Spotify. That's right.

Speaker 1 Spotify, then we'll drop it.

Speaker 2 Can we cut it? Can we go Spotify free, Pandora, YouTube? Can we sing in the shower?

Speaker 3 I would say probably yes, but we also pay for, it's the family plan, so we have siblings on it.

Speaker 1 Who cares?

Speaker 2 Show them you're getting out of debt.

Speaker 1 Say, hey, guys.

Speaker 2 If it's the family plan, then y'all, they should be paying their fair share. Uh-huh.

Speaker 1 Just talk to your family. Say, hey, guys, we're going down to like bare bones.
We're trying to pay off this debt for this season. We got to get out of this.
We're listening to our music on YouTube.

Speaker 1 So let's move past that one right quick.

Speaker 2 Okay.

Speaker 1 George, before we go to the debt, one thing I did notice here, Janai, is there's nothing for a cushion or a miscellaneous.

Speaker 2 The catch-all category.

Speaker 1 And I kind of think that just to save your sanity.

Speaker 2 I'm going to add it.

Speaker 1 Just let's just add that on there because there's always something that pops up, right?

Speaker 2 It's like, you know, put 50 bucks in there.

Speaker 2 So we'll add that.

Speaker 1 I like that. So here's right now margin.
for the debt. We're at $443.

Speaker 1 And of course, now here's the debt.

Speaker 2 We looked at this and I three cards, a timeshare, a car loan, a student loan I mean this is eating up $1,108 per month and that's with a $10 student loan payment which tells me you're on a program where you're paying nothing

Speaker 1 yep which is probably good for now

Speaker 3 where our income I kind of referenced earlier is kind of funky because he works anywhere between 50 and 60 hours a week

Speaker 3 but his

Speaker 3 the contractor that he works for it pays an incentive bonus of a hundred dollars a day okay for showing up for work work.

Speaker 2 That's amazing. I want that.

Speaker 1 That's excellent.

Speaker 2 And before we run out of time, I do want to tell you this.

Speaker 1 Before we run out of time, right now your margin is at $443.

Speaker 1 If he keeps getting these incentives and these bonuses, I want you to see if you can get that up to around $1,000 a month between the two of you combined. Because

Speaker 1 I ran out the numbers on you guys' debt snowball. If you do it with the margin you have now, it's going to take you 35 months.

Speaker 1 But if you can find $1,000 in bonuses, side hustles, and anything extra to add to that, it cuts it by 13 months.

Speaker 2 So down to what? Less than two years?

Speaker 1 Yeah, 22 months. You can be completely debt-free.
And so, Janai, thank you for letting us share this budget.

Speaker 1 I'm sorry we got, you know, busted on the time here, but the key here is side hustle, get it up $1,000, and you're going to be on the debt-free screen in 22 months. This is the Ramsey Show.