No Matter Your Income, You Have To Know Where Your Money Is Going

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

Speaker 1 Rachel Cruz, Ramsey personality, number one best-selling author, host for the Rachel Cruz Show, and my daughter is my co-host today. Phone number here is 888-825-5225.
April is in Michigan. Hi, April.

Speaker 1 How are you?

Speaker 3 I'm doing excellent.

Speaker 4 Thank you so much for taking my call.

Speaker 5 Sure. What's up?

Speaker 6 We have an interesting situation.

Speaker 7 My mother-in-law is in the end stages of advanced Alzheimer's disease.

Speaker 4 She's 89 years old and continues to have a decline. She was amazing with money.
She's got a a great nest egg, will

Speaker 4 well live beyond, you know, her money will outlive her by lots of years.

Speaker 7 She has a huge coin collection

Speaker 4 and we are trying to figure out how we can best get that appraised by somebody that's reliable. She has Morgan silver dollars, Liberty heads.
She has gold coins from the 1800s.

Speaker 4 Some are uncirculated and in mint condition, and others are, I mean, she has a literal bag of silver dollars that are probably just worth their weight.

Speaker 4 So the only places around us that would look at the coins are pawn shops, and I know that that's not a great place to start.

Speaker 4 So I'm just looking for advice on how we find a reliable appraiser.

Speaker 1 I don't know. All I did, I had a box of coins that an elderly family member had given us.
They probably weren't as good as what you've got. There were some in there that were valuable.

Speaker 1 I just, I called around to some jewelry stores and asked who was a coin dealer. I'm looking for a coin dealer, somebody that buys and sells coins.
And

Speaker 1 I actually, you know, just I said, okay, if you appraise these for me,

Speaker 1 would you be interested in some of them? Maybe. And the guy did it, and it really was inexpensive.
And I ended up with a huge bag of wheat pennies that we just took to the bank. And

Speaker 1 then the other stuff, we just sold it to him. And

Speaker 1 there wasn't anything in there that was outstanding. I think a couple of these things you're describing might be outstanding.
I don't know. But you're looking for a coin dealer, a local coin dealer.

Speaker 1 Local or even, I mean, the internet, I bet you could find somebody could.

Speaker 1 Yeah, the only problem is you don't, you got to really be able to, you're going to have to ship them to them, and that can be heavy and expensive. And so if they're out of town.

Speaker 1 And so, again, I just, we're in the Nashville area, and we found a guy here in Nashville that was a coin dealer. And,

Speaker 1 you know, start poking around.

Speaker 1 I can't remember. I think it was a jewelry store or a friend of mine that owned a pawn shop that told me who the coin dealer was.
I might have just found it on Google. I don't remember.

Speaker 1 It was about, it was probably

Speaker 1 eight years ago or something like that that I did that. So that's how I did it.
It really wasn't

Speaker 1 some kind of insightful thing. I just scratched around and found somebody.
But you want somebody that's in the coin world, a coin collector.

Speaker 1 And if you could find somebody that just is running a local social media page that on Coin Collection even

Speaker 1 and just start poking around on that they they would know someone to appraise it or maybe you could just find somebody that's doing it as a hobby to appraise it and pay them for doing that you know and and if you felt if you felt good about their knowledge base and

Speaker 1 The thing we didn't want to do is we didn't want to just roll it all and send it to the bank and then find out there was one of those stinking wheat pennies that was worth $10,000 or something.

Speaker 1 And so we had him go through them and he said, nope, nope, nope, nope, nope, nope. I don't don't even know what a wheat penny is.
It's a penny that has wheat on it in the early 1900s. Oh.

Speaker 1 And more valuable.

Speaker 1 No. Oh, not much.

Speaker 1 It might be worth a penny and a half. Okay.
But it's not worth screwing with. But most of the time.
I got you. I got you.
I got you. The ones that we had weren't.
And so

Speaker 1 anyway, that's how we did it, huh? And I'd just check out. I'd run around and

Speaker 1 coin dealers, coin collectors,

Speaker 1 you know, people that do any kind of

Speaker 1 art appraising, maybe someone that does art, they may know someone in the coin world because all of these will fall in the collectibles category as far as a hobby or something goes.

Speaker 1 Same kind of thing. So, hey, good question.
Thanks for calling in. Mary is in New Jersey.
Hi, Mary. How are you?

Speaker 1 I'm doing well. How are you? Better than I deserve.
What's up?

Speaker 7 So I'm calling because I want to know if I should take on a new job.

Speaker 7 Just to an additional job on top of the job I have rather.

Speaker 6 I have a great job.

Speaker 7 My husband and I, we have student debt

Speaker 7 of about, I think his is 95, minus 75.

Speaker 6 We don't really have credit card debt

Speaker 11 and we have a card that we're making payments on, but we're gonna

Speaker 3 tax that so that we don't have that anymore.

Speaker 7 I've been watching a lot of your shows and it's really convicted me and my heart on

Speaker 7 how I needed to just be more supportive of my husband as he's

Speaker 7 he's amazing and he's so wonderful and I just want to be a better teammate with him to attack these deaths.

Speaker 11 We're also fairly parents.

Speaker 7 And this is the first time in my life where I don't have multiple jobs and I'm spending, you know, I work late, but I'm spending time with my daughter as much as I can.

Speaker 7 And I just,

Speaker 11 I want to, I want to be a team with my husband so we can

Speaker 5 do better.

Speaker 10 So is he already on board, Mary?

Speaker 1 Oh, yeah. Oh, yeah, okay.

Speaker 10 So you're the one kind of catching up, I guess, in this sense. Yes.
Okay, yeah, yeah. And how long has you guys been talking about this?

Speaker 10 So

Speaker 10 he's been

Speaker 7 so he read one of the dave ramsey books uh a long a long time ago and that's actually how we're out of credit card debt um i have anxiety and for the longest time like talking about the finances would kind of make me spin out i'm in a better place now i'm getting help for it um good for you and like for the first time i was able two days ago to like open this massive spreadsheet that he made and look at it without freaking out and say like okay, babe, explain this to me.

Speaker 1 Tell me how this works. That's huge.

Speaker 10 Well, and honestly, Mary, I mean, that's the way to be a great teammate. Do you know what I'm saying? And it's not that you have to go along with every single thing.

Speaker 10 If you have opinions too, I think it's healthy to say those and you guys work through it together as two adults.

Speaker 10 But I think getting to a place, which I think we all have in our lives and in our marriages, where you look at your spouse and you're like, okay, what you've been doing is better than my plan.

Speaker 10 And there's a level of humility there to say, all right,

Speaker 10 I'm on board. I want to, I want to, I want to do this with you.
And just that attitude shift, Mary. I mean, give yourself credit because, I mean, that's, that's huge.

Speaker 10 That's what a lot of people wish their spouse even came close to to be able to say, I want to be a team and I want to do this together.

Speaker 10 And then the way you guys tactically execute it is going to be up to you all. And so,

Speaker 10 so yeah,

Speaker 10 you know, if you think I may need an extra job, I need to maybe bring in some extra money. You guys map that out and just say, okay, what if you did take on an extra job?

Speaker 10 How long and how many hours would you have to work for you guys to be debt-free in X amount of time?

Speaker 10 Or if you didn't take an extra job as a new mom and you just worked yours, but you know, you guys tightened up the budget other ways.

Speaker 10 It would probably take you a little bit longer, but maybe y'all are okay with that for the season as new parents, right?

Speaker 10 So it gets down to a values conversation between the both of you at that point to decide. How fast do we want to do this? How aggressive do we want to do it?

Speaker 10 And the faster you do it, Mary, the faster you're out. Uh, and so you guys are gonna have to pick kind of which

Speaker 10 route you want to take, and you guys do that together. But I'm excited for you guys, I think it's awesome, and I'm sure your husband's jumping up and down inside.

Speaker 1 I'm glad he got glad he got you on board.

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Speaker 1 Helen's in New York. Hi, Helen.
How are you?

Speaker 14 Good. How are you?

Speaker 1 Better than I deserve. What's up?

Speaker 6 So my husband wants to buy a seven-passenger family-type luxury car that will cost about $90,000.

Speaker 11 And I am fine with him buying the car.

Speaker 6 But when it comes down to actually purchasing it, each time he stops and says, oh, there's better stuff we could do with our money, we shouldn't spend this on a car.

Speaker 11 But we have no debt.

Speaker 6 Our house is paid off.

Speaker 6 He makes over $400,000 a year.

Speaker 6 I don't want him to buy a cheaper car like a Chevy or a Ford and then not be happy and have the regret that I should have spent the money on the more expensive car that I really want.

Speaker 1 How old is he?

Speaker 6 He is in the 60s, 62.

Speaker 1 Okay.

Speaker 1 And $400,000 a year income, no debt, house is paid for included. How much is in your guys' nest egg? What's your net worth?

Speaker 1 Over $4 million. Okay.
All right. The way that my wife and I make these decisions, Helen, is

Speaker 1 we ask ourselves, if we take that amount of money,

Speaker 1 $90,000, and we burn it in the middle of the floor,

Speaker 1 Does it affect our life?

Speaker 1 And the answer in your equation is, other than you would cry, it would not affect your life.

Speaker 6 Correct.

Speaker 1 You could throw $90,000 out the window of the house and watch the neighbors scramble, and it would not affect your life.

Speaker 1 You wouldn't even know it happened because you have $4 million plus a paid-for house plus a $400,000 income. This is a very reasonable...
purchase given your numbers.

Speaker 1 And I just, that way I know I'm not being irresponsible. If you flinch when you do it, not from the emotions, but from the mathematics, and I'll give you an example, okay? If you told me it was 400K,

Speaker 1 well, that's one year's income. That's 10% of your net worth.
That's too much.

Speaker 1 Okay?

Speaker 1 And so

Speaker 1 the math on that says I would feel it.

Speaker 1 Helen, how did he grow up?

Speaker 10 What was his upbringing?

Speaker 11 So we both grew up with parents that probably struggled a little while we were growing up, but then did better.

Speaker 6 We have never had credit card debt. We've never made like crazy car purchases.

Speaker 1 This is not a crazy car. We were out of college.
Right.

Speaker 6 We paid off our loan.

Speaker 1 Yeah. Yeah.

Speaker 10 What car is it? Because to me, it's not a math problem. He knows math.
He's a smart guy. He's making $400,000 a year.
I mean, like, he's smart. It's not a math problem.

Speaker 10 This is all an emotional problem. There's fear driving this.
Yeah. There's stress.
There's a level of control. I mean, like, you know what I mean? Like, all of that

Speaker 1 has a desire to be responsible. And my point is, it's not irresponsible.

Speaker 10 I don't think it's a desire. I think he has been responsible.

Speaker 1 I know. I mean, he's afraid he's being irresponsible.

Speaker 10 Right, which comes out of fear. The motivator, yeah,

Speaker 10 is irrational. You know what I mean? So, what car is it?

Speaker 10 It's a BMW.

Speaker 7 And I just don't want him to buy a cheaper car.

Speaker 1 Well, I don't care about that

Speaker 1 I do want him to buy a cheaper car if he can't afford it so but but in this case he can afford the beamer go get it. Yeah, I definitely would buy this car you can tell him I said

Speaker 6 I Don't want him in two years to say oh, I should have bought it Well, you know what when we bought we're getting rid of and we're buying it Yeah, that's not the reason he should buy it.

Speaker 1 Yeah, I disagree the reason he should buy it is the amount of money is irrelevant because you guys have done such a good job and you should enjoy your life.

Speaker 10 Yeah. Because he could buy the Ford and then in two years regret it and go buy the Beamer and nothing would, I mean, like, that's fine, right? Like, that's not the thing.

Speaker 10 The issue I would have with him is what is going on within you?

Speaker 10 That's the fascinating thing about money is we always say, you know, take control of your money, do a budget, you be the one to control your money.

Speaker 10 And we do that because so many people, they're not in control and it's like they have no clue where it's going. And on one end, we see that.

Speaker 10 And then on the other end, people take the extreme of take control. And it's such control that it almost becomes an idol.

Speaker 10 This level of like, I don't want to let go and that stress and anxiety, that's not freedom either, right?

Speaker 10 So you have to find that balance and it's hard because we see this a lot, I feel like, of people that have worked the plan or paid off their house and they don't want to go on vacation because they're so fearful, oh, God, am I going to mess this up?

Speaker 10 Is this okay?

Speaker 10 And that's in much bondage, right? I mean, from an emotional standard.

Speaker 1 Live like no one else so that later you can live. and give like no one else.
So make sure your generosity is where it should be. Make sure your investing is where it should be.

Speaker 1 Make sure if you're going to

Speaker 1 consume or blow some money on something, that it's an amount of money that does not affect your life. And it's a small enough ratio, small enough percentage of that.

Speaker 1 And so you don't have to think about it. And you're there.
You've worked your tail off. You guys have worked your tails off for 40 years.

Speaker 1 You've earned the right to do this, not because of their hard work, but because of the results of your hard work.

Speaker 1 If you worked your whole life, if you worked really hard and saved no money and had no money, then you haven't earned the right to buy the beamer.

Speaker 1 But you have the pile of money as a result of your hard work. And so you should enjoy the fruits of your labor at this point.
That's how we ought to do it. Good question.
Tyson's in Boise, Idaho.

Speaker 1 Hey, Tyson, what's up?

Speaker 16 Hey, guys, thanks for taking my call today. Sure.

Speaker 16 First time calling in. Well, we're honored.

Speaker 14 A couple of things. So I've always kind of lived, my wife and I have lived

Speaker 16 Dave Ramsey adjacent is kind of like my affectionate way of saying.

Speaker 1 That means you were right part of the time.

Speaker 16 We have six months of savings, like emergency fund.

Speaker 16 We put 18 to 19% of our annual income into retirement. That includes 401k and maxing out ROS for each of us each year.

Speaker 12 We have a small amount, about five grand each in our twins,

Speaker 16 the five-years-old twins college accounts so we're doing some stuff my one question is we have nineteen thousand dollars worth of truck debt um the truck isn't upside down it's a nice toyota tundra just looking for some advice should we borrow from ourselves and our roth no or should we just or should we just continue down the path of paying this thing off in six to eight months

Speaker 10 don't you have money saved in an emergency fund

Speaker 11 we do and i don't

Speaker 16 i i guess there's prepetition on should we pull the money out of our six month fund just to pay that down.

Speaker 1 Yes.

Speaker 16 Seems like a dumb question.

Speaker 1 You should pay your truck off today or you should sell it. One of the two.

Speaker 16 Okay,

Speaker 16 one of the two.

Speaker 1 I pay it off today, and then I would take the six months and rebuild my emergency fund.

Speaker 16 That's easy enough. And then we're working to pay off our house after that.
So we're getting there, man. We're super close.

Speaker 1 Exactly. Yeah, it's pretty simple.
And don't buy another truck, dude. Unless you have the money and you write the check.
No more debt.

Speaker 1 The key to building wealth wealth is not having stupid truck payments. And I like, I drove my truck today.
I like a good truck. There's nothing wrong with that.

Speaker 10 But you parked it kind of sideways.

Speaker 1 Well, it's because that way nobody can hit the door on the new raptor.

Speaker 10 Well, my Tesla would have parked right next to you at the charger station.

Speaker 1 I thought his parking lot is. You people that charge cars can hit other people's doors.
I know about you people. So I park it where you can't get to my raptor and mess it up.

Speaker 1 Don't mess up the girl. Don't mess up my truck.
Well,

Speaker 1 you're the one picking on my parking style. But the, anyway, the

Speaker 10 James knows.

Speaker 1 It's intentional. It's not because I don't know how to park.
Okay, so let's keep you people off my truck. But anyway, the yeah, I want you to get a truck, Tyson.
I want your truck to get you.

Speaker 1 And truck payments are, when you, folks, when you sign a car payment agreement and you say, I want a car payment, right under that, it says, I am committed to being in the middle class the rest of my life.

Speaker 1 Car payments are the mantra,

Speaker 1 the motto of the middle class.

Speaker 1 You're always going to have a car payment. You might as well have a big one.

Speaker 1 Just get what you want. Life's too short.

Speaker 1 Got to have an airbag on the passenger side that's not my mother-in-law.

Speaker 1 Everybody's got a saying about a car. They always, you know, it's not safe.
My little babies are all going to die because the car is four years old. Oh, shut up.

Speaker 1 Car payments are basically signing up and saying,

Speaker 1 I want to be in the middle class. What do you take?

Speaker 10 From age 25 to 65.

Speaker 10 If you didn't have a $700 car payment every month and you just invested it, you'd have $4.4 million at $65.

Speaker 1 Hope you like the car. There you go.
There's your $4 million car. Broke your middle class thing and turned you into upper class.
You'd be upper class now.

Speaker 19 Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

Speaker 1 You know, we hear it all the the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

Speaker 19 Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens.

Speaker 1 Yeah, that's right. You need 10 to 12 times your income in coverage.
No gimmicks, no whole life junk, just straightforward term life protection.

Speaker 1 But there's another piece that people often overlook, and that's long-term disability insurance.

Speaker 19 Yeah, it's important to understand the difference between them. Life insurance steps in when you die.
Disability insurance steps in while you're alive, but can't work.

Speaker 19 So it replaces a large part of your income so the bills still get paid while you get back on your feet.

Speaker 1 Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it.
But if not, Xander can help you find the right plan.

Speaker 1 Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the the money's still showing up.

Speaker 19 And that's why Xander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling.

Speaker 1 I've trusted Jeff Zander and Xander Insurance for over 25 years, and so is my family.

Speaker 19 So don't wait. It's fast, it's easy, and it could make all the difference.
Go to Xander.com or call 800-356-4282.

Speaker 1 Protect yourself, protect your income, protect your family.

Speaker 1 You ever wanted to see the person calling on this show

Speaker 1 instead of just hearing them? You ever want to see the show done live? We do it on the glass every day, Monday through Friday from 1 to 4.

Speaker 1 And you can stop by Ramsey Solutions anytime. We have free coffee and wonderful homemade cookies.

Speaker 10 We have a wonderful audience today.

Speaker 1 And we've always got

Speaker 1 50 to 200 folks out here hanging out with us. And so if you ever want to do that, we'd love to have you come by.
Oh, and by the way, we're taking the Ramsey Show on the road.

Speaker 1 We're going to do a little tour this fall. So you can experience the live Q ⁇ A.
You can be part of the live Q ⁇ A. You can do raw

Speaker 1 confessions, crowd debates, a local debt-free screen. It's all happening live, and we're going to do two of them in the fall.
It's the first time we've ever done this.

Speaker 1 And we launched it about three or four days ago, and it's almost sold out.

Speaker 1 There's just a handful of tickets so this probably don't even need to do this ad but we're going to tell you about it and you can finish off the last few tickets if you want rachel ken and george will be doing the show in chicago on september 30th and tickets are a whole 39 and there's only about three or four hundred seats a night so that's why it just disappeared it evaporated in just a couple days you can't get in and so you may be able to get tickets to either one of these by the time you hear this so check but i they're going really they're just about gone jade john and George will take the stage in Orlando a couple days later, October the 2nd.

Speaker 1 So you can't feel this kind of hope through the headphones. You got to be there.
Click the link in the show notes and get signed up or go to ramseysolutions.com slash events.

Speaker 1 Again, September 30th in Chicago, October the 2nd in Orlando. Colin is in Michigan.
Hey, Colin, how are you?

Speaker 20 Hey, good, Dave. How are you?

Speaker 1 Better than I deserve. What's up?

Speaker 20 Hey, I got a quick question for you.

Speaker 18 So I'm a junior in college, and I have about $85,000 in my 529 account.

Speaker 21 I was wondering if I should be using that just for tuition and material costs or if I could be using it for my living expenses as well.

Speaker 1 I think you can use it for your living expenses as well, as far as the on-campus housing and that kind of thing. You'd need to check that because I'm not positive.
doing that off the top of my head.

Speaker 1 Have you gotten any scholarships?

Speaker 5 Yes.

Speaker 2 So that, yes.

Speaker 20 So my scholarships cover about 50% of the cost.

Speaker 18 The only other cost I pay is about $3,500 in tuition every semester.

Speaker 1 You can remove the value of your scholarships from your 529 without penalty.

Speaker 22 Oh, okay. Really?

Speaker 1 And then you could use that for living expenses for sure.

Speaker 1 Okay. Or anything you want to use it for, for that matter.
But technically.

Speaker 10 Yeah, how much per semester are you getting in scholarships, Colin?

Speaker 3 About $3,500.

Speaker 1 Okay.

Speaker 10 I'm just thinking, because you have how much in the $5.29?

Speaker 1 $85. $85 or $83.
Yeah. So you've gotten $7,000 a year for two or three years, right?

Speaker 23 Yep, that's correct.

Speaker 1 Okay. So, I mean, you pull probably $25,000 out of it without any trouble at all.

Speaker 1 You've just got to be able, in the case of an audit, you've got to be able to document the amount of the value of the scholarship. Okay.
Okay.

Speaker 1 And so sometimes scholarships are not an actual dollar amount. They're just a thing that they're giving you.
And you need to put a value on that thing if you get something like that.

Speaker 1 Like if you got free housing or something, that kind of a thing.

Speaker 1 So, but yeah, you can pull that much out. So I know that can be done.
As far as the remaining money, can it actually be used for living expenses? I'm not 100% sure, but I feel like there's something.

Speaker 2 I'm reading that you can use it for qualified room and board, including on-campus housing and off-campus rent.

Speaker 1 Qualified, okay, qualified home.

Speaker 10 And Colin, you can roll over $35,000 of it when the account's been open for 15 years into your Roth IRA.

Speaker 1 That

Speaker 1 okay, yeah.

Speaker 10 So that passed, which is great. So, yeah, so if you, which you'll be close to that-ish

Speaker 10 with the 24,000.

Speaker 1 There's a bunch of stipulations on that. That's under Biden's Secure Act, and it's not great.
Oh, really? I've heard people starting to do okay. It's very difficult.
You can do it.

Speaker 10 Well, I would do it.

Speaker 1 Then you get into it and

Speaker 1 sit there. I'd clean it out.

Speaker 1 He's not going to be able to clean it out.

Speaker 10 He's got $83,000, $20-something in scholarships. It's $50,000.
He's not going to live on $50,000 in two years.

Speaker 1 Probably not, yeah. So

Speaker 1 I would look. The other thing you can do is you actually make it happen.
You can hold it. It can be used for your kids someday.

Speaker 1 How great is that? It can be used for your spouse someday. It could be used for yourself.

Speaker 10 Would you keep it in, or would you try to roll it to a rock?

Speaker 1 Once you realize how hard it is to roll, I might keep it for a while.

Speaker 10 And just wait for it.

Speaker 1 Well, I mean, during the 15 years, you've got to wait anyway. Yeah, yeah, yeah.
A lot of your life's going to happen. Then you could decide.
Sure, sure.

Speaker 1 More intelligently, but you don't have to decide that today.

Speaker 1 You have to leave it in there for that period of time.

Speaker 1 Or be penalized.

Speaker 10 Unless his parents opened it when he was two.

Speaker 10 And it's

Speaker 1 19.

Speaker 10 It's been open for, it could be open for 15 years.

Speaker 10 Correct? Isn't it when you start the 529?

Speaker 1 Don't know. Okay.
I don't know.

Speaker 1 I had it under the impression after you finished school that the 15 years started. And so you were up to the city.
I think it's when the account was before you could do it.

Speaker 10 Some options, Colin. But at least use it for living expenses.

Speaker 1 The main thing I would do is I'd get the scholarship money out and I'd use it for living expenses. And then let's see what's left.
What's left, hopefully, will be negligible and it won't matter.

Speaker 1 And that would be good. You've done a great job, by the way.
Death through school, way to go, Colin.

Speaker 1 Yeah.

Speaker 1 All right. Matt's in Greenville, South Carolina.
Hey, Matt.

Speaker 20 Hey, how's it going?

Speaker 1 Better than I deserve. What's up?

Speaker 24 Well, Dave, I guess I'm just struggling with a career problem because I got married in 2014, and ever since then, I've only been making $40,000 a year in the different jobs I've had up through this point, and I'm trying to figure out a way to grow in a career.

Speaker 24 And it just seems like all I'm doing is working and exhausting myself, coming home tired, and then just

Speaker 24 and I feel just so spent. Like, I just don't know what to do anymore.

Speaker 1 What do you do?

Speaker 24 I'm a package delivery driver.

Speaker 1 Oh, okay. Yeah, that's hard work.
Yeah. So you're putting in 40 hours and you're working for like UPS or you're working for Amazon or what?

Speaker 24 FedEx.

Speaker 1 FedEx, the other one. Okay.
Left one out. Sorry.
Okay.

Speaker 1 So what are you making? Like 60 or 70?

Speaker 24 No, I'm making 40.

Speaker 1 Oh, you said 40. Really? I thought FedEx drivers did better than that.
Okay.

Speaker 14 I wish.

Speaker 1 Okay.

Speaker 1 All right. Well,

Speaker 1 it comes down to a couple of things.

Speaker 1 Obviously, what you've done is you took a job because you're a responsible person so that you could pay your bills to eat and feed your family, right?

Speaker 24 Yes, absolutely.

Speaker 1 That's your first big deal. To get people to do that, sometimes it's hard.
And then the second,

Speaker 1 once you've got that covered, then the second thing to do is, okay, ask the question that you're asking. So you're doing all the things in the right order.

Speaker 1 And the question is, okay, now how do I move careers into something that I can make $140,000? What's that look like? And then you start asking yourself, okay, what are those careers?

Speaker 1 What are the things I'm good at? What are my natural bents?

Speaker 1 What training might I need to get that I haven't had to move into that area?

Speaker 1 You know, but there's probably something you've dreamed about doing.

Speaker 1 Maybe opening your own business. I mean, I don't know.
But I know guys running pressure washing companies that are making 100K.

Speaker 24 Okay.

Speaker 1 And obviously, that's not rocket science.

Speaker 3 Right, yeah.

Speaker 1 You don't have to go back and get the pressure washing degree, right?

Speaker 1 So

Speaker 1 you can run down to Home Depot, buy one, and knock on somebody's door and here we go. And so,

Speaker 1 you know, so I, I, but you've, but you've got to lean into it and you've got to be aggressive and ambitious and all those kinds of things. And you have all of that because you're asking this question.

Speaker 1 That's what that tells me. If you weren't asking us questions where we'd really have a problem.

Speaker 10 Is there anything, Matt, in your head that you've always thought about or kind of dream about an ideal career?

Speaker 1 If I could do this and make $150,000 a year, what would it be?

Speaker 24 Well, honestly, to tell you the truth, I would love to, you you know, teach people how to get out of debt because, I mean, my wife and I have been debt-free and we have an emergency fund.

Speaker 24 We've been following you for the last 10 years and

Speaker 24 we've just been struggling to save for our house. But, I mean, we, and the fact that

Speaker 24 we've been only made this much money and we've been able to get this far, I mean, tells me that, you know, I can do this and I can teach other people how to do it.

Speaker 1 So helping people is a big thing. Yeah.

Speaker 10 Well, Ken Coleman talks about find the work you're wired to do. And there's elements of people where there's like kind of this natural thing that comes out of them, right?

Speaker 10 So for you, it's helping people. And it may be in the avenue of money.
It could be something else that you realize. Oh, my gosh, I'm really good at that.

Speaker 10 But if you hang on the line, Matt, we'll send you Ken's book. And there's an assessment.

Speaker 10 At the end of the book, which you can take. It's a code.
And you can log in. And it's an incredible assessment that asks you all these questions.

Speaker 10 And it kind of pares down some things just to get the juices flowing, if you will, right? Just to kind of give you some ideas.

Speaker 1 It'll help give you some guidance in what direction you could go. And if you want to learn to be a Ramsey coach, we have a Ramsey coach certification program.
You can check that out online too.

Speaker 1 Some of those coaches make good money, some of them don't do much coaching, so there's always that option, too.

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Speaker 1 Our question of the day is sponsored by YReFi.

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Not in all states.

Speaker 10 Today's question comes from Cameron in Kansas. My wife and I are on baby steps four, five, and six.

Speaker 10 We are both raised by hardcore Ramsey followers, except my dad, who became a little Ramsey-ish once he hit baby steps seven.

Speaker 10 He opened up a credit card in my name when I went to college, so I could easily buy a house one day.

Speaker 10 The card lives in his basement and is only used once a month for the family television subscription bill, which is paid off every month. I've never seen the card.

Speaker 10 My wife and I don't care about about having good credit. Should I ask my dad to cancel the card so my credit score disappears or just leave it alone since it's not hurting anything?

Speaker 1 Oh, I would get rid of this. That's gross.
I would get rid of it, Cameron.

Speaker 1 I mean, I'm not worried about the credit thing. It's your violation of your boundaries.
You're like an adult and stuff. My card lives in my dad's basement.

Speaker 1 That's whacked.

Speaker 1 Yeah, how about you chop up the card and close the account like a grown man, and your dad doesn't interfere in the grown man's life?

Speaker 1 If he wants to do something with his life, he can go do something with his life, but he shouldn't be doing this with his grown son.

Speaker 1 I would no more do something like that to one of my children than fly to the moon, even if I was right.

Speaker 1 You know, and in this case, he's both things, a boundary violator and not right.

Speaker 1 So, yeah, no, yeah, you should definitely call him and go, dude, we're not doing this anymore. Chop, chop, chop.
Close, Close, close, close. Pay for your

Speaker 10 point.

Speaker 10 With all this stuff, it's like, whatever. But it is the boundary violation that your dad has a financial string attached to you, basically, who that he's kind of in charge of.
It's weird.

Speaker 1 Weird. Yeah.
Yeah, it's way out of control. All right.
In Virginia, it is, is it LARF? Is that right?

Speaker 23 Yes, sir. Hi, Dave.

Speaker 1 Hey, what's up?

Speaker 25 Hey, thanks for taking my call today. Sure.

Speaker 25 My wife and I are both 26 years old. We're completely out of debt, and we're currently on baby step number four.

Speaker 1 Good.

Speaker 21 My question for you is, we're trying to figure out how aggressive we need to be with purchasing our first home.

Speaker 25 So we currently rent here in Northern Virginia, just outside of DC, and our rent is pretty expensive, but we have good jobs out here, so we stick around.

Speaker 25 But I know that you say during steps, baby step one, two, and three, you need to be like a gazelle with some fire underneath you. And we've definitely done that.

Speaker 25 But now that we're on baby step number four, we're not quite sure how much of our income to put towards our first home.

Speaker 1 Well, obviously, the more you put towards it, the more the down payment is and the smaller the debt is.

Speaker 1 So as much as we can do and still accomplish some of these other things, we call this baby step 3B. You may have heard us talk about that.

Speaker 1 When you're between baby step three, where you finished your get out of debt plan, accept your house, you're now saving for a house, and you've got your emergency fund in place.

Speaker 1 So that's after baby step three, in other words, but before we start baby step four. Some people

Speaker 1 put everything they can scrape together towards a down payment to build up a big one very quick and delay starting baby step four, 15% of your income going into retirement for two or three years to pile up a big old pile of cash for a down payment.

Speaker 1 That's the one end of the extreme. The other end of the extreme is to put all 15% away into retirement and do as much down payment as you can do above that.
Anywhere in between is okay.

Speaker 1 Sometimes people do 10% for retirement and then load their down payment fund as quick as they can. Anywhere in there is all we want to do.

Speaker 1 I do not want to delay starting retirement more than about three, maybe four years.

Speaker 10 And the lowest amount of a down payment we recommend is 5%. But if you can do more, obviously that's better.
So what's your household income?

Speaker 12 So our household income gross is about $160,000 a year.

Speaker 1 Good, very good. Okay.

Speaker 25 So

Speaker 26 we currently are putting about $1,000 a month into

Speaker 25 a high-yield savings account to save up for our down payment.

Speaker 23 Ideally, we would like about $100,000 so we can do about 20% on our first home, is what our goal is.

Speaker 1 You're not going to get there at $1,000 a month.

Speaker 26 Right, which is, you know, we're trying to figure out, you know, should we cut out certain things in our life to help us get there sooner?

Speaker 1 Have you started the retirement savings?

Speaker 3 We are.

Speaker 25 We have about 15% of our income is going towards retirement.

Speaker 10 How much is that per month? Do you know what that would be cash-wise if you put it back in your paycheck?

Speaker 25 I'm not sure.

Speaker 20 I would imagine

Speaker 25 it's somewhere around $2,000 to $2,500.

Speaker 3 Yeah.

Speaker 1 I would look at stopping my retirement temporarily and throwing all of that in the down payment because that starts to be $36,000 a year. That puts you in a house in three years.

Speaker 1 That's your $100,000 goal. And then you start your retirement.

Speaker 1 Okay. You're not going to get there at $12,000 a year.

Speaker 10 And you guys are 24. Is that what you said?

Speaker 10 26. 26, okay.

Speaker 1 So you'll be 29. Yeah, you can.
You're buying a house with $100,000 down. Start your retirement, then you'll be multi-millionaires.

Speaker 23 That sounds lovely.

Speaker 1 Yeah.

Speaker 1 I just don't, I don't think the 12 is, that sounds like a 10-year plan. That's not a plan, right?

Speaker 25 Yeah, I mean, that's kind of where our head is at, too, when we really looked at it.

Speaker 25 We're not sure how long it's going to take us to get there, especially with housing only going up.

Speaker 1 Exactly. Exactly.
So, yeah.

Speaker 1 I think 36 months of saving and delaying your retirement, I just said three to four years and doing 100% of your game plan on that snowball, I mean, on the down payment fund instead of be funding retirement temporarily is what I would do because I'd be wanting to get into a house.

Speaker 1 And I think you are too. So, yeah, that makes a lot of sense with the math in your situation.
Now, sometimes folks can do both and still get there

Speaker 1 and get to their good, strong down payment. And that's a 20% down is what he's aiming at.

Speaker 1 And that, by the way, if you put down 20% on a Fannie Mae, a standard conventional mortgage, which is the least expensive mortgage of the conforming mortgages, and if you put down 20%, you avoid PMI private mortgage insurance, which is about $75 a month per $100,000 borrowed.

Speaker 1 And so it's, you know, it's

Speaker 1 $300 a month for a $400,000 mortgage. If you don't put down 20%, that's a lot.

Speaker 1 Again, that's $3,600 a year. That starts to be almost 1% of your mortgage amount that you're paying out in insurance.

Speaker 1 And all private mortgage insurance is, folks, it's insurance that the mortgage company requires you to buy for them

Speaker 1 in the event they have to foreclose on you and they lose money on the house because you didn't put it on a big payment, down payment, then this insurance covers the difference.

Speaker 1 And they don't require that if you put down 20% because they've got the margin. They know with that loan to value ratio that they're safe.

Speaker 1 And if they did have to foreclose, they're not going to lose money. But when you're north of 80% on the loan to value, if you don't put down at least 20%,

Speaker 1 then

Speaker 1 they're going to require that. And it's expensive and it's useless.
It's basically foreclosure insurance for the mortgage company, but you have to pay for it. That's why it's aggravating.

Speaker 1 And so, yeah, I... I love to see people put down 20% because of that.

Speaker 1 But again, first-time homebuyers, Rachel's right, we don't yell at you for putting down 5%, but you're paying a premium when you do that.

Speaker 1 Right.

Speaker 10 Well, and I mean, it's kind of that like tension of the market's not going down, right?

Speaker 10 And so if you have to wait another three, four, five years to save the 20%, could you get in earlier from a cheaper standpoint?

Speaker 10 It's kind of a little bit of that game you kind of have to play.

Speaker 1 By the way, just as a side note, if you did take out a mortgage that has MIP, mortgage insurance premium on FHA

Speaker 1 or PMI, when you do get it paid down to that ratio, you can request they stop it.

Speaker 1 You have the right to stop paying for the insurance once it gets down to there.

Speaker 1 If you're doing it based on the fact that the value has gone up and now I've got 20% equity, not just paid it down to 80%,

Speaker 1 you may have to pay for an appraisal. But a $400 or $500 appraisal is nothing compared to the cost of PMI.
That's a good point. And so, you know, that's not a big deal.

Speaker 1 Now, don't just go get any appraisal. You've got to get one that's approved by your mortgage company because they're the ones who have to accept it in order to drop the PMI.

Speaker 1 So, you can get out of this, it's not forever, but you just kind of got to be thoughtful about how you're doing it and not just assume you're going to have it forever because you don't want it forever, it's too stinking expensive.

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Speaker 1 From the headquarters of Ramsey Solutions, it's the Ramsey Show. Welcome back.
Rachel Cruz, Ramsey Personality, is my co-host today, number one best-selling author, and my daughter.

Speaker 1 Joe is with us in North Carolina. Hi, Joe.
How are you?

Speaker 1 Good. How are you guys doing? Better than I deserve.
What's up?

Speaker 27 So I'm looking to transition from my full-time job to doing my side business full-time.

Speaker 29 And I'm just wondering how to set myself up financially when I'm ready to make that move.

Speaker 1 Well, the best way to do it is to raise the income of the side business to where it's within reach of your day job.

Speaker 1 Okay. In other words, we always say pull the boat up really close to the dock before you so you can step into the boat instead of having to leap and hope you hit the boat.

Speaker 1 So

Speaker 1 meaning uh so what is your income on your side business now?

Speaker 20 Right now, it's only about $1,000 a month.

Speaker 1 Okay.

Speaker 1 Working weekends only?

Speaker 28 Yeah, it's basically just Saturdays.

Speaker 1 What do you do?

Speaker 25 Mobile mechanic.

Speaker 1 Oh, good. Okay, cool.

Speaker 1 And

Speaker 1 so you got the truck and the tools and so forth?

Speaker 1 Yes. Okay, that's neat.

Speaker 1 And what do you make on your day job?

Speaker 28 Around 93 a year, depending on overtime before

Speaker 29 everything.

Speaker 1 Okay. So jumping from 93 to 12 is not a plan.

Speaker 1 That's too scary.

Speaker 1 And there's two reasons it's too scary. Number one,

Speaker 1 if you had a big old savings account, you'd burn through it to cover the difference. Number two, you don't have proof that this business will scale.

Speaker 1 All you've got is a thousand dollars a month worth of proof, and I want more proof than that before I bet the farm on it, so to speak. So

Speaker 1 what can we do to add more hours and more income to the mobile business to get it to,

Speaker 1 gosh, let's get it to 60,000 from 12,000?

Speaker 26 Yeah, it would basically be a time issue.

Speaker 12 Yeah.

Speaker 20 Because like I've had work coming in, but I can't even get to it all because I just don't have the time for it, you know?

Speaker 1 Why?

Speaker 1 Just because because they only want to do it during work hours

Speaker 20 a lot of the times, but I don't have time during the week after my full-time job, and so like that's why I pushed off Saturday

Speaker 29 just because of my schedule for the day. You know, I'm out of the house early and then home later.

Speaker 25 And

Speaker 1 so, you're working more than 40 at your day job,

Speaker 28 a lot of the times, yeah.

Speaker 1 Because if you're working 40, you do have time.

Speaker 10 Can you pull back on your main job, Adam, and start supplementing some of those hours? Maybe like twice, like two nights a week?

Speaker 20 Yeah, I might be able to.

Speaker 12 It's just, it's not predictable.

Speaker 29 So getting this, getting everything scheduled, like if I had a job scheduled, then that day at work, something happens, and I'm unable to make it, you know?

Speaker 1 For your full-time job, you mean?

Speaker 1 What do you do during the day?

Speaker 29 I'm a diesel mechanic.

Speaker 1 So why would you have to stay after?

Speaker 1 What was that? What do you mean if something happens during the day? What would happen during the day?

Speaker 20 Like if if I'm on a job and it doesn't go as planned, you know, and then it ends up turning into a later

Speaker 28 takes longer than it should, you know what I mean?

Speaker 10 And you have to stay there to finish that job.

Speaker 1 You can't just like

Speaker 1 you can't roll it till the next morning.

Speaker 29 No, and then there's also emergencies, emergency call-outs as well that happen.

Speaker 1 How much of that job going over what is supposed to an emergency do you really have?

Speaker 29 it's it depends.

Speaker 1 I know

Speaker 1 but how much do you really have?

Speaker 26 For time?

Speaker 1 No. How often does that really happen? Or how often are you just electing to stay late?

Speaker 28 No, no, I don't elect.

Speaker 26 Like I I would like uh 40 hours is fine for me.

Speaker 20 Like I don't that's the other that's why I'm trying to do the side business'cause I don't need all the you know, I money's good, but it's not like I I don't need all the hours and stuff like that.

Speaker 28 Like, we're in a pretty good spot where we don't need all that extra income. I don't want to say, you know, it's bad, but.

Speaker 1 So how much mobile business are you turning away?

Speaker 29 It probably ends up being one or two jobs a week just because I tell them I'm out a couple weeks.

Speaker 1 Which is how much? How much is a job worth on average?

Speaker 28 Be like $300 to $500, depending.

Speaker 29 Some are more, but yeah, roughly around there.

Speaker 10 So $1,000 a week, possibly, you're turning away. So close to $4,000 is what you could be doing on a minimum.

Speaker 20 Yeah, yeah, because I kind of did the math. Well, that's good.

Speaker 1 I want you to start taking those jobs and booking them, even if you, and just tell them, if something blows up at work, I may have to push you a day.

Speaker 1 But

Speaker 1 I'm going to be there Tuesday, but if I get blown up Tuesday, I'm going to move it to Wednesday and we'll get to you. Okay, I want you to start.

Speaker 1 I want you to pick up some stuff, a couple of those jobs a a night, a couple during the weeknights, and get this up to $3,000 anyway. Have you got any savings?

Speaker 12 Yeah, I have, me and my wife have about $120 in 401ks, and then we've got about another 20 just in regular savings.

Speaker 1 You haven't got enough to do this. Okay.

Speaker 20 That's what I was wondering. I was wondering if I should open another savings account and kind of put a bunch of money in there

Speaker 1 to have that.

Speaker 1 Yeah, because you're not going to be able to get ⁇ I'd like for somebody making $94,000 to get their income to $60 to 70 before they make the leap and you're not going to be able to do that in the situation you're in but maybe we can get you up maybe we can get you up to you know 36 or 40 or something and have a good healthy savings account those would be the two things i would do i would not make this leap with any amount of savings in the bank when i only have a thousand dollar income Yeah, exactly.

Speaker 1 Because you have not proven the business idea is scalable. You think it is,

Speaker 1 but you have not proven it. and you're counting, the family's counting on you to prove it.

Speaker 10 For, what, six months consistently

Speaker 10 that it's coming in and then make the jump.

Speaker 1 Yeah. Yeah, I mean, if you can get another $2,000

Speaker 1 a week that gets you to $36,000 by beefing up your Saturday a little bit tighter, working more hours,

Speaker 1 you're going to burn some candle wall here. Okay, you're going to burn the candle at both ends in order to get this thing going.
That's the price you're going to pay to do this.

Speaker 1 Otherwise, you're going to take a leap of faith, which is called stupidity.

Speaker 10 Well, and again, it's this,

Speaker 10 the whole working to and trying to get this going. Again, it's for six months.
So, you think about that. I mean, by February,

Speaker 1 it should be up to you. Yeah, for six months to do it.
And then make it a leap. Your kids are whining, your wife's whining because they never see you.

Speaker 1 And honey, that's the price we pay to get this other business up and running enough that we can trust it for me to walk out of this other one. Yeah.
And I think you can do it.

Speaker 1 I think what you're doing is marketable in a world where

Speaker 1 convenience and luxury items. Convenience items and luxury items, and you're both

Speaker 1 are at a premium. And they're the types of businesses that are doing the best.
And so I think you're in the right place.

Speaker 10 The mobile grooming of dogs, the mechanics that come to your house.

Speaker 10 I know exactly what I'm saying. I'm like, the convenience world out there is just growing and growing.

Speaker 1 And people are going to be able to do that. I am not betting your family's future on that when you've only made $12,000 a year.
I would not do that.

Speaker 1 That's bad business acumen. So we want more social proof, more proof in the marketplace that we can actually turn this into money.

Speaker 1 And if you could get it up to $36,000 and hold it there for six months and be about to collapse because all you do is work all the time,

Speaker 1 I'd be ready to try it, especially if you had some savings. And if your wife has an good income, we failed to ask about that.

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Speaker 1 Denise is with us in Memphis. Hi, Denise.
How are you?

Speaker 21 Doing okay.

Speaker 1 Good. How can we help?

Speaker 13 I'm trying to figure out: is there ever a point where you're actually saving too much?

Speaker 1 No.

Speaker 1 Well,

Speaker 1 I'm messing with you. That's fun.
Okay, so why do you think you're saving too much?

Speaker 13 Well, we have seven kids, and it just seems like things are

Speaker 13 super tight, and my husband's very anxious about money.

Speaker 1 Mm-hmm.

Speaker 1 Okay.

Speaker 1 Well,

Speaker 1 are the kids eating?

Speaker 13 Yes.

Speaker 1 Okay.

Speaker 1 What is super tight?

Speaker 13 It's just

Speaker 13 sometimes we dip down into the savings and then we dip back out and it's just.

Speaker 1 In order to do what?

Speaker 13 In order to just do general living.

Speaker 1 Well, what's general living?

Speaker 13 Well, insurance, groceries.

Speaker 1 So you're saving so much that you're not budgeting properly for groceries?

Speaker 13 Well, no, we're budgeting for groceries. I'm just saying.

Speaker 1 So properly.

Speaker 1 If you're budgeting properly, you would never dip into savings for groceries unless you were overspending on groceries.

Speaker 13 Yeah, it just, it just, it just,

Speaker 13 we don't have any, it feels like we don't have any breathing room.

Speaker 10 Any margin in your budget.

Speaker 1 Yeah. It feels like.

Speaker 10 How much do you guys make a year?

Speaker 13 $150,000. Okay.

Speaker 1 Well, that's enough to feed seven kids.

Speaker 13 Yeah.

Speaker 1 Okay, so you shouldn't have a problem. Where do you think the overspending is occurring?

Speaker 13 Well, we're doing like 10.5%

Speaker 13 into the 401k, 3,500 in the HSA, and then we're doing

Speaker 13 an additional $15K in the Roth.

Speaker 13 I honestly think that insurance and groceries is just eating our lunch lately.

Speaker 10 How much are you spending on groceries?

Speaker 11 So

Speaker 13 it's okay, groceries plus

Speaker 13 what we pay to the school, I would say about $1,500 a month.

Speaker 10 Are they in private school? Pay to the school? No.

Speaker 13 No, no, no. Just like it just costs us $100

Speaker 30 every week for all five kids to go to school.

Speaker 1 For lunch.

Speaker 1 Y yes. Okay.

Speaker 1 All right. And um that that would be but that's not killing you on a hundred.
So, okay, do you have a house debt?

Speaker 3 No.

Speaker 1 And you don't owe anything on your home?

Speaker 13 No, sir.

Speaker 1 And you don't owe any of the debt?

Speaker 13 No.

Speaker 1 Okay.

Speaker 13 And and and and we have a lot in savings. We kind of did everything opposite of everyone.
We paid everything off first and then we had kids.

Speaker 13 And so we have a sizable retirement fund, and it just feels very strange to still be

Speaker 13 in a situation where my husband's getting upset about money when we're supposed to be doing that well on paper.

Speaker 13 That makes sense.

Speaker 10 Yeah, are you guys funding, you're giving out dollar amounts for your savings?

Speaker 13 Yeah.

Speaker 10 Is that what percentage-wise is that coming out?

Speaker 1 She said 10 and a half plus 15,000 or 15%. Yeah, for the Roth.

Speaker 13 No, $15,000 for the Roth plus the $3,500 for the HSA.

Speaker 30 A year.

Speaker 1 A year. Yeah, that'd be right.
Okay. That's $18,000 out of $150,000.

Speaker 1 Yeah.

Speaker 1 That's not causing you a problem. That's not causing you a problem.

Speaker 1 You know what? You guys are not doing a detailed every dollar budget that the two of you sit down and agree to before the month begins.

Speaker 1 You're throwing money and and savings and hoping you can live with what's left over and when chaos hits you dip back into the savings.

Speaker 13 Yeah, and usually by the next month where savings is pretty much where it was before but it's just

Speaker 13 my husband's just very stressed.

Speaker 1 Yeah I heard that three times. But you know why he's stressed? Because he doesn't have a plan.

Speaker 1 Not because of the money.

Speaker 1 So if you will start the month before the month begins, get the every dollar budget, download it, we'll give you the premium upgrade for free.

Speaker 1 And the two of you, both of you sit down and go, okay, here's what insurance costs

Speaker 1 that comes out of this. Here's what lights cost.
Here's what water costs. Here's what the school lunches cost.
Here's what the grocery store costs. And then we save money.

Speaker 1 I think you're going to find you have enough to do all of it.

Speaker 10 Because you guys are bringing home what? What's hitting your account and eats every month? 9,000-ish?

Speaker 8 10,000.

Speaker 13 $8,641.

Speaker 1 Something's wrong.

Speaker 1 What is coming out of that check? That's only $100,000.

Speaker 13 There's a little bit of savings for a trip that him and my daughter want to do.

Speaker 1 Coming out of his check?

Speaker 13 No, no, no, afterwards. His check,

Speaker 13 just insurance cost, and then the 10.5% for Roth and the $3,500 for the HSA. That's my nine.

Speaker 1 $19,000. We're $50,000 down.

Speaker 10 Yeah, it was like $120,000 after taxes. So, yeah, I mean, it should be around $10,000.

Speaker 1 No, that's like $100,000 after taxes. Yeah.

Speaker 1 And so, yeah,

Speaker 1 you got something coming out of your check that's screwing up, too. Are you guys getting a large tax refund?

Speaker 13 We do, and I throw that into the emergency fund or into the...

Speaker 1 Yeah, but that's not what... No, we don't need a tax refund.
That's a savings account with the IRS that pays no interest, and they give it to you once a year.

Speaker 1 Santa Claus does not live in Washington, D.C. You need to adjust your W-2s and get the proper amount coming home so that there's no tax refund.

Speaker 1 That will help your cash flow because you're not bringing home enough. There's something wrong with your coming home figures.

Speaker 13 I honestly feel like if we weren't, if we like took home the amount that we get in the tax refund every year, I feel like it would be pretty much spot on.

Speaker 1 You have a feeling, but you don't know because y'all don't live on a budget. You guys have got to do a written, detailed plan.

Speaker 1 You're chaotic, and he's saving money on one side, and you're over here trying to keep the family held together with duct tape and bailing wire on the other side because you don't have a freaking plan.

Speaker 1 You need a plan. Before the month begins, every dollar needs to be addressed.
And I want to know why I make $150,000 and I'm only getting home with $100,000

Speaker 1 because the numbers you're giving me don't add up to that.

Speaker 1 So you guys got to get into this stuff and learn where your freaking money's going, then make the proper amount come home and quit hoping that an IRS tax refund bails you out of your lack of organization and planning skills.

Speaker 1 So you have to manage this like it matters. If you don't make these dollars behave, they are not going to behave.

Speaker 1 And your husband is going to remain stressed out and you're going to remain feeling like, well, we should be able to do this, but it's all that savings. And it's not all that savings.

Speaker 1 The savings is not the math problem. You've given us the numbers.
It's not there.

Speaker 1 So I know where the money's going. It's going to chaos and disorganization.
That's where it's going.

Speaker 1 If you guys will give every dollar an assignment every month for the rest of your life, like your life depended on it, and the two of you agree to it, you're going to have all of this angst removed.

Speaker 1 from your position, the anxiety you're feeling, and the anxiety he's feeling. But you're not going to get rid of it by just tossing these numbers up in the air and trying to juggle them.

Speaker 1 You're throwing them around like you're a circus act. And you've got to set them down, make them everyone behave.
I can hear it. I've done this for 30 years.

Speaker 1 I can hear it in the processor using even discussing it with me. So you can do this.
You have the money to be okay.

Speaker 1 And I've given you the antidote. Now, the only question is whether you're going to do it or not.
So go to every dollar. We're going to give you the every dollar.

Speaker 1 Help them download that, Kelly, and get it the premium version. And we'll pay for it.
Give it to her as a gift because, honey, you can do this. It's very doable.
It's very doable.

Speaker 1 And please don't ever say we can't be responsible because we have a large family.

Speaker 1 I don't think she did.

Speaker 1 She didn't. She didn't.
I was going to say, I don't think she didn't. But I get that all the time.
I hear the Dave, you can't do the Dave Ramsey plan if you have a large family.

Speaker 1 And then we have people that have eight kids stand up here and do a debt free screen.

Speaker 1 So they do it all the time. As a matter of fact, it's the only way you can be responsible with a large family is to be responsible and work a plan.
It's the only you don't have an option.

Speaker 1 It's like when you have seven kids, you don't have an option of one of them being a brat.

Speaker 1 They have to behave. So large families, the kids, they don't have, none of them are confused that they're the center of the world.
But if you got one or two, one of them can get confused about that.

Speaker 1 So, you know, it goes with the territory. It's a wonderful part of having a large family, but you have to be organized.
You know the thing large families can do? They can take pictures quickly.

Speaker 1 They're organized. They line up.

Speaker 1 They line up.

Speaker 1 little ducks. And then we take a picture real quick.

Speaker 1 If you're tired of living paycheck to paycheck and feeling like you can't get ahead like a rat in a wheel, join one of our free Every Dollar Trainings.

Speaker 1 There are new trainings every week this month, and they're all hosted by one of the Ramsey personalities. Rachel, when's your next one?

Speaker 10 It is Monday.

Speaker 1 Oh, there we go. Monday at noon.
Going to show you how to stick to a budget. And most people are finding between $5,000 and $10,000 worth of margin using Every Dollar.

Speaker 1 So that jumpstarts your get out of debt plan. You really start building wealth.
And you can ask questions during the live Q ⁇ A. Sign up for free.
Did I mention it's free?

Speaker 1 At ramseysolutions.com slash webinar. Is the Q ⁇ A interesting, Rachel?

Speaker 10 Yeah, it's fun. Yeah, we get to do a couple of live questions, and it's usually about someone's situation or something in Every Dollar that they're like, okay, well, how do I do this or that?

Speaker 1 And yeah, so it's very helpful. How's that function? Yeah.

Speaker 1 Okay. Cool.
All right. Adam is with us in Springfield.
Hi, Adam. Welcome to the Ramsey Show.

Speaker 15 Hi, Dave. Thanks for taking my call.
Sure.

Speaker 21 I have a couple-part question.

Speaker 15 I grew up in a landscape family. It was family-owned.

Speaker 15 I took over a part of my dad's business and my family grew. I sold it, and now I'm starting from scratch.

Speaker 15 And so we're about $5,000 of monthly income

Speaker 1 that we take home. Good.

Speaker 12 My wife and I, we,

Speaker 15 when I was young, my father helped me buy a farm, and my wife and I sold it to buy a home and incurred a lot of capital gains tax.

Speaker 15 Our company was running a lot of old trucks

Speaker 15 to get around the tax we did $179 and bought a new work truck to replace those before we sold the business. Now we're $61,000 in debt for that truck.

Speaker 8 And and I know it's stupid.

Speaker 15 It's crazy. I didn't

Speaker 20 no excuses.

Speaker 15 We're selling that home and buying another property

Speaker 3 borrowing $295,000 and we have $180,000 that we can that we have coming back to us from that home we're selling.

Speaker 15 And I don't know what steps we should do because

Speaker 1 okay, what price range truck do you need to operate the business? It's not the one you have.

Speaker 15 I don't know exactly.

Speaker 13 So we ran all cash trucks for our first couple of years

Speaker 18 that are like $5,000 to $10,000 trucks.

Speaker 15 And we still have a couple of those old trucks sitting around and they were posted. But I've started listening to your stuff just in the past week.

Speaker 15 And my father used to listen to you years ago when I was a kid, but I started listening to you recently.

Speaker 15 And I started thinking, I wonder if I should sell sell that new truck and just pay the repair fees on these old trucks and use them. Yep.

Speaker 1 Yep. So, in business, whatever equipment we need,

Speaker 1 whether it's me with a microphone or you with a weed eater,

Speaker 1 whatever equipment we need to operate the business is a valid investment to cause the business to run.

Speaker 1 And the valid investment is I need the minimum reasonable amount

Speaker 1 to do the job.

Speaker 1 And I'll give you an example. We do a lot of stuff with technology where you're doing stuff with trucks, trailers, and mowers, right?

Speaker 1 But with technology, there's always something that's 10 times more expensive that's fancy.

Speaker 1 Kind of like a truck, okay?

Speaker 1 And so we have a saying around Ramsey, we're always looking for MF minimal functional.

Speaker 1 What's the minimal thing we can buy that's functional and gets the job done?

Speaker 1 Because the only reason to buy a computer is if it makes me more than it costs, not because somebody's going to think I have a fancy computer.

Speaker 1 The only reason for you to buy a truck is that the truck gets the work done.

Speaker 1 What's the cheapest truck that will get the work done?

Speaker 1 Because anything past that is a luxury item, and you ought to take your luxury items home. You shouldn't have those work.

Speaker 1 Yes, sir. So, yes, I would definitely sell this truck.
I'd beef those two old ones up, get them going.

Speaker 1 And then you're probably going to need to buy a little bit better truck later on for cash to get rid of one of those junkers because they're going to start to be unreliable, which means they're not getting the job done.

Speaker 1 You can't miss a job because of stupid breakdowns.

Speaker 15 Yeah, that's what happened.

Speaker 12 We had three trucks, and we had like one and a half of them in the shop at a time.

Speaker 15 We spent 30,000 on repairs last year, and that's where I thought, oh, a a new truck will make sense with a five-year warranty, $100,000.

Speaker 1 Yeah, no, it doesn't.

Speaker 1 But moving up out of a $5,000 truck into a $15,000 might make sense.

Speaker 1 Because of reliability issues only. But again, all we're trying to do here, we're not trying to impress anybody.
We're not trying to have a nice truck. All we're trying to do is get the job done.

Speaker 1 And so when the old ones are too junky to get the job done, then they're too old to get the job done. When the new one's like six times too fancy to get the job done, then it was ridiculous.

Speaker 1 And you've already determined that. And so, really, you're kind of you, it's almost like you need to sell all of them and buy two $15,000 ones.

Speaker 1 All I'm trying to do is run the business and keep my overhead down.

Speaker 15 Yeah, I understand that.

Speaker 1 There's nothing else motivating.

Speaker 10 How many trucks do you need, Adam, for where you guys are right now?

Speaker 1 If they're all running.

Speaker 15 So right now,

Speaker 3 right now, only one.

Speaker 1 You only need one.

Speaker 1 You know what? I would take. You said you had three junkers?

Speaker 1 Two junkers. Two.
Yeah. Okay, and they'll bring five or six grand a piece, right, if they're repaired.

Speaker 15 They're pretty old. I think one is probably $4,500.

Speaker 8 The other one's going to be like $3,000.

Speaker 1 Okay, all right. So you get $8,000 there.
You sell the truck you're in, put a little money with it from the sale of the house, and get about a $15,000 truck, and let's go get our work done.

Speaker 1 But systematically look at that thing, and before it wears out, start saving up the money to buy its replacement.

Speaker 1 Or before you buy the number two truck, because the business is growing, save up and buy a used truck. But you don't, we're not trying to make a luxury statement.

Speaker 1 We're not trying to impress anybody with our truck.

Speaker 1 I don't even know what my landscaper drives. I couldn't care less.
All I want to know is the yard get cut. You know, I mean, come on.
So,

Speaker 1 you know, that's all that matters is did you do the job? And now, if you didn't show up, then I start caring what you drive because something broke, I guess. But anyway,

Speaker 1 minimal functional, minimal functional that'll get the job done.

Speaker 1 And that's how you run business. Everything else is just those of us that are entrepreneurs overspending and using our business as an excuse.

Speaker 1 And

Speaker 1 so that's a really, really good question, especially from a new listener, Adam. Thank you very much.
And I think you kind of got a good plan here. And it sounds like you're going to do very well.

Speaker 1 You've got your head dialed in and you had good training from your dad on the business side of things, it sounds like. And so, yeah, that's good.
I think you're going to go in a great direction there.

Speaker 1 Judson's in Michigan. Hey, Judson, what's up?

Speaker 24 Hey, Dave. It's great to talk with you.

Speaker 17 I've actually kind of feel like I've grown up on your stuff.

Speaker 17 My parents have been longtime listeners out of Southern California. We moved to Michigan in 98.

Speaker 17 I am actually in the midst of selling my home and moving to the great state of Tennessee where you reside.

Speaker 3 So,

Speaker 17 that being said,

Speaker 17 I don't actually have a place for me to move my family to.

Speaker 17 My wife's a horse trainer, so I am stuck in this situation where I'm trying to figure out

Speaker 31 land value.

Speaker 1 You have a place to move your family to. You don't have a place to move the horses to.

Speaker 3 Yes, both.

Speaker 21 Right. Well, I mean, I can end up in a rental situation.

Speaker 1 No, you could end up in a family home, and the horses are somewhere else.

Speaker 3 Yes.

Speaker 1 Yeah, but horse trainers get confused about what family is. Horses aren't family.
They're a business.

Speaker 17 That's true.

Speaker 1 They are a lunch. You and George Campbell.
You and George Campbell with the horses.

Speaker 1 I didn't say sell the horses. I just said...

Speaker 1 Yeah, go ahead. I'm sorry.
Right quick, what's your question?

Speaker 24 If I want to stay married, I will keep the horses.

Speaker 1 Yeah, I didn't say get rid of them.

Speaker 1 I just don't know. I don't know if you have to own the land that they're sitting on.

Speaker 17 I'd like to.

Speaker 1 Yeah, I know you'd like to.

Speaker 24 We're managers

Speaker 17 of a decent-sized property right now.

Speaker 17 We're looking to move to Tennessee, and I'm not seeing prices match value. So it puts me in the situation where my dad isn't willing to co-sign with me on a.

Speaker 1 Yeah, that part where you're a longtime listener, you and your dad, and you want to co-sign. Not a chance, dude.
Not a chance.

Speaker 1 You're buying something you can't afford because you're trying to do something you shouldn't be doing. You guys have got to think through this a little more clearly.

Speaker 1 Michael's in Raleigh. Hey, Michael, how are you?

Speaker 9 I'm doing well, Dave. How are you?

Speaker 1 Better than I deserve. What's up?

Speaker 9 So, me and my wife are on Baby Step 2.

Speaker 9 We started out with around $101,000 in debt, and we are down to about $50,000.

Speaker 1 Way to go.

Speaker 11 Yeah.

Speaker 3 How long did that take?

Speaker 9 We had about $49,000 in cash savings that we dumped at half of it.

Speaker 1 Oh, so it took 10 minutes.

Speaker 28 Okay.

Speaker 6 Yeah, so,

Speaker 9 but it was actually a little less than $49,000, probably about $40,000. It was like $46,000 or so.

Speaker 1 What is the remaining debt on?

Speaker 9 So the remaining debt is $46,000 in student loans, and then we have $4,000 on a personal loan.

Speaker 1 Okay.

Speaker 1 Good. All right.

Speaker 1 And what's your household income, sir?

Speaker 9 It's about $150,000.

Speaker 1 Good, good, excellent. Okay.

Speaker 10 Nice.

Speaker 9 And that's part of my question because I work full-time. My wife stays at home with our kids.

Speaker 9 I'm in engineering.

Speaker 9 I started a side business to

Speaker 9 help assist with the debt. The problem with that is

Speaker 9 in working as as much as I'm around 120 without the side business and I'm able to throw most of the money from the side business at the debt to try to pay it off quicker.

Speaker 9 But the problem with that is there's days where I don't even hardly get to see my son and it's like an emotional thing for me.

Speaker 12 And I'm wondering how to navigate that, the sacrifice and

Speaker 9 of not seeing him.

Speaker 1 How old is he?

Speaker 9 He was just working. He's five.
So he just started school. So a lot of times when I get off work, I go straight, and I just cut grass.
I just cut grass like crazy.

Speaker 1 Yeah. Just keep paying for it.

Speaker 10 How much are you making on that? On the side hustle?

Speaker 1 30. You said 120 and 30.
30.

Speaker 12 Yeah. Yeah, 30.

Speaker 1 The 150 is the total.

Speaker 10 Oh, it's total. I'm sorry.
I got you.

Speaker 1 I got you. Yeah.
So the

Speaker 1 but how long have you been doing this?

Speaker 11 This is our first year doing it.

Speaker 9 It just kind of skyrocketed.

Speaker 1 No, I mean, how long have you because what you told me a while ago was you just pulled the money out of savings and threw it at the debt, and you really haven't paid off any debt much except that.

Speaker 11 Yeah, well,

Speaker 9 I've been doing this about three weeks, but it's been because this is new because

Speaker 9 our son just started school, so I was at home with him. But now that he's in school, I don't even hardly see him due to working in the evenings as well, basically.

Speaker 1 All right.

Speaker 12 So I was home with him during the day.

Speaker 1 Yeah, well, you have 40, you have $50,000 in debt. You're making $30,000 a year extra to throw at it, right?

Speaker 1 Yeah.

Speaker 1 Okay.

Speaker 1 What do you owe on your car?

Speaker 9 Nothing. We have no car payments.

Speaker 10 Student loans and personal loans.

Speaker 1 I know, but I'm just checking. What are they worth?

Speaker 9 About $50,000 in cars.

Speaker 24 We own a Jeep Wrangler and a Tundra.

Speaker 21 But they're paid for.

Speaker 9 Okay. And the Tundra's tundra's for work.

Speaker 9 We paid the Jeep off with the lump sum.

Speaker 1 Yeah, what's the tundra worth?

Speaker 9 Probably about $12,000.

Speaker 1 So the other car, the Jeep, is worth $38,000. $1,000?

Speaker 9 No, I'm sorry. I got the math wrong.
It's worth about Kelly Blue Book, like $25,000

Speaker 9 to $28,000, somewhere around there.

Speaker 1 All right.

Speaker 1 Well, what I'm fishing for is, is there a way to short circuit and do this sooner than a year? Number one,

Speaker 1 you know, Raleigh, North Carolina, you can live on a lot less than $120,000 a year. So your budget's not tightened down enough yet.

Speaker 1 You need to quit eating out, quit going on vacation, live on nothing. Beans and rice, rice and beans.
You've only been doing this three whole weeks.

Speaker 1 So it's not like you've really stretched out there yet, okay?

Speaker 1 So

Speaker 1 yeah, but I think you crank your budget on down tight, tight, tight, tight, because the more you crank it down, the faster you get out of debt. Agreed?

Speaker 1 So I'd love to see a situation where you could see your way to being done in a year without selling the cars. If I can't, I'm probably selling her car

Speaker 1 so I can be done in a year so I can see my son because I want to be done in a year. You can do anything for a year.

Speaker 10 Yeah, I was going to say, Michael, I feel like you guys could throw $3,000 to $4,000 at this, get it $40,000, and then and then all your stuff on top of it.

Speaker 1 You guys could do this in a year. Yeah.

Speaker 9 i'm that's what i'm projecting and yeah i'm still going hard at it it's just uh

Speaker 1 honey you're not still doing anything you've been doing it a whole three weeks

Speaker 1 yeah you know it's not it's not like you've been doing this for two years okay i mean you've been it's a whole three weeks now the thing is um

Speaker 1 anytime you're going to win at something you're going to pay a price to winning it winning at it what you are doing is you are investing some time now so that you have the rest of your whole life to have all the time in in the world.

Speaker 1 You know, so today what I do with my kids or my grandkids is anything I want, anywhere in the world I want, because I can both afford the time and the money.

Speaker 1 Because decades ago, I paid a price.

Speaker 10 But when I was five?

Speaker 1 When you were five? Five dad. When you were five, I was probably gone.
Your mother was quite a single mom. Yeah.
And you lived.

Speaker 1 Yeah. You had to something to tell your counselor later.

Speaker 10 Abandonment was not one of the issues.

Speaker 1 It's good. I mean, when I'm home, I'm home, too, by the way.
I turn off stupid television. Yeah.

Speaker 1 Okay.

Speaker 1 Don't tell me I'm spending quality time with the family and Netflix is on.

Speaker 1 That's the definition of not quality time with the family. So anyway, it's three whole weeks.
You're going to be fine. I think it's worth the price you're paying.

Speaker 1 And I think when you look back on it at the end of a decade, at the end of two decades, at the end of three decades, you're going to say it's the best year of investment I ever made in my son was for me to get my family back to square where we could eat again and get away from this garbage and this mess so we could breathe.

Speaker 1 And now we're able to do anything. We're living like no one else so that later we can live like no one else.
We work like no one else so that later we can work like no one else.

Speaker 1 We drive a piece of crap so that later on I can drive anything I want to drive.

Speaker 10 Yeah, because Michael, if you had called us three weeks ago before you guys paid off the car, I'd probably tell you just to sell the car.

Speaker 1 Yeah, i think

Speaker 1 and put and put the extra money towards this debt so i would yeah drive a crappy car so that you can be home i would well i'd let you i'd keep the trundle you're using it to pull the lawnmowers i'd let her drive a crappy car right now

Speaker 1 and then you guys save after that and you guys can upgrade and car but it's kind of but i'm gonna i'm gonna take everything out of this budget In the name of every time I take a dollar out, it's a dollar sooner.

Speaker 1 I get to not be doing this.

Speaker 10 Think about how much you make an hour. And if you can save that, that's one less hour you have to work, right?

Speaker 1 And you kind of multiply that in your head. Yeah.
That'll make you cut lifestyle. I'm cutting this.
I'm cutting that. I'm cutting this.
I'm cutting that.

Speaker 1 And I don't really care what other people think.

Speaker 1 But

Speaker 1 you're,

Speaker 1 you know, yes, you're a good dad. You love your kid.
You want to see your kid. That's a good thing.
You should. That means you're a good daddy.
And we need good daddies in America today.

Speaker 1 There's not enough of them. So thank you for being that guy.
But you, you know, for a short period of time, you can turn the heat up for the good of your family's long play.

Speaker 1 And

Speaker 1 you ask how to deal with the emotions. That's how I dealt with the emotions.
When we started Ramsey, I came in to work at 7 a.m. I got home at 11.
I never saw a kid for two years.

Speaker 1 I mean, I was there on birthdays. I was there on some weekends and all Sundays.
I did take Sundays off. But I worked like a maniac to get this thing up and running.

Speaker 1 And today, this thing allows our whole family

Speaker 1 generationally to do whatever we want to do.

Speaker 10 And I'm not a child psychologist, too, but I'm like, you don't really remember five years old. You know what I mean? I think it's harder to be away when you have a ton of people.

Speaker 1 Well, it's harder on him than it is as a kid. That's right.
That's true. That's true.
Yeah. So I relate to

Speaker 1 his feelings. I'm glad you have those feelings.
It means you're a good man.

Speaker 1 But don't treat it like it's

Speaker 1 don't let the drama of those feelings override the actual facts of the situation, which are that as a great man, a great husband, a great dad, you are pouring on the coals to get your family on a solid foundation.

Speaker 1 And if there's anything you're doing, you don't have to deal with it ever again.

Speaker 10 And if your wife is able to do something, too, to bring in some income, right? I mean, like all of you guys as a team together, how can we pay this off as fast as possible?

Speaker 1 Now that he started school, maybe there's something she can do. That's not a bad plan at all.

Speaker 1 Anything we can do like this to shorten the time of the pain, and then the pain becomes more and more and more worth it because then you never have to do it again as long as you stay on these principles and don't go take out another truck payment or something.

Speaker 1 That's it.

Speaker 1 You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage.

Speaker 1 To protect your biggest assets, I recommend using Ramsey Trusted Pros.

Speaker 1 Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted providers have been coached and vetted to serve you like we would.

Speaker 1 Find what you need at ramseysolutions.com slash insurance.

Speaker 1 Welcome back to the Ramsey Show. Rachel Cruz, Ramsey personality, number one best-selling author.
My daughter is my co-host today. Brady is in Mobile.
Hi, Brady. How are you?

Speaker 18 Good. How are you guys doing?

Speaker 1 Better than I deserve. What's up?

Speaker 18 Awesome. Thank y'all for taking the call.

Speaker 27 I'm a huge fan and have been for a few years.

Speaker 1 Thank you.

Speaker 12 So, I have a two-part question, but if we can, I'll ask the first part. And then if you feel we have time, maybe we can get to the second part.

Speaker 23 So I'll set the stage.

Speaker 12 So my wife and I, when we got married, we started traveling in the oil field working and

Speaker 12 started out making $20 an hour or whatever and, you know, have moved to this job, moved to that job all over the country about eight times.

Speaker 26 We're 27 now.

Speaker 12 We started when we were about 19. And

Speaker 31 in that,

Speaker 12 you know, comes moving and keeping, and we have kids, we have two children, so we've been keeping them away from, you know, other family as well, not on purpose, but just the nature of the job, traveling with work.

Speaker 12 So I have in-laws that are sometimes seem a little bitter about that.

Speaker 12 But the first overall question, I guess, is at what point, because I can stay home and make 50,000, 60, maybe 70,000 a year doing what I do.

Speaker 18 But if I travel like I am now,

Speaker 12 I'm making about $200,000 right now. So, you know, obviously a significant difference.
And the question is, where is that fine line with

Speaker 23 greed?

Speaker 10 Of just chasing money to chase money. Just make more money to make more money.
Is that what you're saying?

Speaker 12 Yes, ma'am.

Speaker 12 And I'm wondering where that switch is. Because, you know, like the caller before, I have, you know, I'm feel like I'm as good a father as any, or I definitely try to be.

Speaker 12 And right now I'm going from home about four days a week.

Speaker 18 And they're actually, we just home last year.

Speaker 12 And so they're staying at home and I'm traveling back and forth,

Speaker 12 you know, every three or four days.

Speaker 1 Yeah, that's a hard lifestyle to sustain for a long period of time with a family in general, right? How old are the kiddos?

Speaker 23 Four and six months.

Speaker 1 Okay.

Speaker 1 And your wife is at home, and you are traveling, and that affects the in-laws. How?

Speaker 12 So, and I apologize, I got a little confusing there. So for up until December of last year, we were traveling and we were on the road, and we just moved back home

Speaker 3 nine months ago.

Speaker 1 Okay. So for the last nine months, the in-laws, if they want to see the kids, just get up and come over there.

Speaker 1 Correct, yes, sir. Okay.
So they've been able to do that, I hope?

Speaker 3 They have. Okay, cool.

Speaker 1 And if you were traveling, you were in another city, you were there for weeks on end, were you not? Before December?

Speaker 23 Yes, sir, correct.

Speaker 1 So if you're in XYZ city for four or five.

Speaker 1 Yeah, if you're in XYZ city for four or five weeks with the family, the in-laws could come there.

Speaker 3 Right. I agree.

Speaker 1 Yeah. So

Speaker 1 I think the in-laws are the, they have their own issues. Yeah.
Yeah. They have their own issues.

Speaker 10 I don't think his question was about the in-laws.

Speaker 1 Well,

Speaker 1 they have accused him of being greedy. I think that's between the lines.
Oh, is that what it is?

Speaker 12 Not verbally, but you know, it's one of those things you can't tend to.

Speaker 1 Gotcha.

Speaker 1 We don't get to see it. It's not convenient for us to come see the kids when we want to, the way we want to, because of the way you work.
So we're going to run down the way you work. Yeah.

Speaker 20 Exactly. Yes, sir.

Speaker 1 That's what I heard. Okay.

Speaker 10 I was reading between the lines.

Speaker 1 Okay.

Speaker 1 Yeah. So

Speaker 1 the thing you've got to go back to is this.

Speaker 1 Rachel and I did a book on parenting, and one of the things we said to teach kids is contentment, because godliness with contentment is great gain.

Speaker 1 And a lot of people get really confused about the subject of contentment. They think ambition and contentment are on the same line, and ambition is on one end, and contentment is on the the other.

Speaker 1 I beg to differ. I'm highly ambitious, and I'm very content.
They're not on the same spectrum. They're not one end of the line or the other end.
They're different lines. And so

Speaker 1 you can be a good dad, you can be a great dad, and be working your tail end off.

Speaker 1 As a matter of fact, generally, great dads do that.

Speaker 1 And so,

Speaker 1 you know,

Speaker 1 greed is

Speaker 1 not an amount of money.

Speaker 1 It is a state of your heart and why you're chasing the money. If you're saying for a couple of years, I'm going to burn the oil so that I don't have to the rest of my life.

Speaker 1 Burn the oil, that's a good metaphor for you. But

Speaker 1 I'm going to turn up the heat. No, we don't want to do that either over there.

Speaker 1 Right, right. Whatever it is, we're going to work really hard for a couple of years so that we can make different choices later.

Speaker 1 that's paying a price to win. That's going in the weight room and lifting weights so during the football game, I can actually knock someone over.

Speaker 1 I'm paying a price here to win. There's an amount of work that has to be done to lay a foundation to go somewhere.
If that's what you're doing, that's ambition. That is not greed.

Speaker 1 Greed is unbridled ambition for the wrong reasons. Where you think more money is going to make you happy.
You think more money is the end-all. You think money is a God that you're worshiping.

Speaker 1 Instead, you can say, I want some more money, not because I want more money, but because of what it does for me and my family. I want to change my family tree.

Speaker 1 I don't want these kids to have to worry about food or shoes. So I'm going to...
College. Or college.

Speaker 1 The first car or whatever it is. I mean, we're going to get in a position that we can make choices and money don't cause us to.

Speaker 1 I used to work for a guy. He said, I want to make enough money that I can read the menu left to right instead of starting with the price, right, on the right side.

Speaker 1 Most people read the menu from the price over and then decide what they're going to get.

Speaker 1 He goes, I'm going to read what I want to read and what I buy and then order and then I'll figure out what it costs because it's not going to make a deal. So that's what you're,

Speaker 1 you know, that's what you're all about there, Brady. And, you know,

Speaker 1 the other thing I've found in coaching people all these years, people that ask a question like you asked about greed are never greedy people.

Speaker 1 Greedy people people would never ask the question

Speaker 1 because it doesn't occur to them that

Speaker 1 their worldview is skewed and screwed up. Instead, you're actually weighing out my values.
I'm spending a lot of time. I'm gone four days.
I got littles and this is bothering me.

Speaker 1 Well, a guy that asks that question is not a greedy person by definition. Okay.
Yes, sir. And so greed is not going to be your issue.

Speaker 1 Now, do you want to adjust some of your goals and your values and say, okay, I'm going to work on my career to where in the next 18, 24 months, I can be home and make 100 instead of being on the road and making 200 or instead of coming home and making 50?

Speaker 1 I don't know what that looks like or how you do that, but I'm going to start to have that goal where I can come home and make.

Speaker 10 Yeah, I was going to say, being gone three to four days a week, that's hard with little ones. And so

Speaker 1 unless you see an end to it very quickly.

Speaker 1 You say, I'm going to do it for one more year and then I'm going to take, and then by then I'm going to have a landing pad where I can come back home and I'm going to cut my income in half, but I'm going to be home.

Speaker 1 Yeah.

Speaker 10 And you guys are still so young, Brady, that there's an off-ramp. Like, maybe you guys take a season and you're off the road, and then the kids hit middle school, and you're like, you know what?

Speaker 10 I'm going to shift back on and turn it back up and do this new thing for two to three years. And then you're done.
Like, do you know what I mean?

Speaker 10 Like, sometimes we make decisions that feel like forever. And it's not.
It's not at all.

Speaker 1 I mean, I've done that with my career.

Speaker 10 I pulled back some after the third kid. And you know what I mean? Like, you can make adjustments

Speaker 10 as life as life comes and

Speaker 10 I don't know there's a level of that flexibility that I don't want you to feel like you're stuck and you make a decision you're not stuck and so if you and you're not greedy no a hundred percent chance you're not greedy okay

Speaker 1 so um

Speaker 1 just because somebody's a travel agent for guild trips that doesn't mean you're greedy okay so uh you're you're but i would have

Speaker 10 a plan yeah have a plan about it

Speaker 1 where it starts to bother you and bother me is if if it's in perpetuation, if it's forever and ever. Let's have a plan where we're not doing this a whole life.

Speaker 1 We're doing this for a period of time to never have to do it again. That kind of thing.

Speaker 1 You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

Speaker 1 If you're ready to learn how to make your money work for you, check out the SmartVestor program.

Speaker 1 Smart Vestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more.

Speaker 1 Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to ramseysolutions.com/slash SmartVestor to get connected.

Speaker 2 Ramsey Solutions is is a paid non-client promoter of participating pros. Learn more at ramseysolutions.com slash smartvestor.

Speaker 1 Buying or selling a home in the middle of all the drama that is the real estate market right now requires that you don't participate in the drama, but instead you understand that facts are your friends.

Speaker 1 So the facts are that we are now sitting at a 5.8%

Speaker 1 interest rate for a 15-year fixed. That's a fact.
It's down a little.

Speaker 1 It's a fact that house prices have stayed almost identical for the last three months. The median household

Speaker 1 The median house price in America today is about $440,000. And that's what it has been for that period of time.
It's not moved much at all.

Speaker 1 That's a fact. The fact is, is that we have over a million houses on the market right now, the

Speaker 1 largest inventory since 2019 in the last few months. And yet

Speaker 1 demand is still higher than inventory, which is causing prices to hold and continue to go up in many areas. John is in California.
Hey, John, how are you?

Speaker 22 I'm great, Dave.

Speaker 14 How are you guys doing?

Speaker 1 Better than we deserve. How can we help?

Speaker 3 Well, I

Speaker 14 give you a little background. My wife and I are both retired, and we're struggling and trying to decide what we would like to do with what we've accumulated over our lifetime and specifically

Speaker 14 your viewpoint in regards to IRA conversions to Roth.

Speaker 14 Just to give you a few numbers, we've got about zero point zero point five million dollars in liquid mutual funds and bank account,

Speaker 14 and we've got about four million dollars in IRA accounts.

Speaker 14 One million of that is already in a Roth,

Speaker 14 and three million is in a traditional IRA.

Speaker 14 And I've been looking at a bunch of numbers and reading a bunch of things. And what I'm trying to decide on is, is it better for us to

Speaker 14 try to do some conversions between now and when we reach RD at age 73, which is about seven years from now,

Speaker 14 or just let our traditional IRA grow?

Speaker 14 And my concern is that if I just let it grow during our lifetime, you know, the R D's are going to be six digit numbers.

Speaker 14 This is not money we need to live on. We live with in our means on just fixed income and have been able to, you know, accumulate a lot and not spend anything.

Speaker 14 And so now I just don't want to make a mistake with what we've been blessed to accumulate. So I'm curious what your

Speaker 14 viewpoints are about paying

Speaker 14 what I calculated to be about 1.2 or 3 million over the next five or six years doing step conversions to Roth

Speaker 14 or just letting

Speaker 14 our three adult children inherit multi-millions in a traditional IRA someday.

Speaker 1 Honestly,

Speaker 1 the answer to your question, I stumbled into backwards. I did not, I was not smart enough to do it on purpose, but I accidentally did a brilliant thing, to be very clear.

Speaker 1 And the brilliant thing was that early on, I converted everything to Roth. You and I are the same age.
I'm getting ready to be 65. Okay.

Speaker 1 And everything is in Roth. And the reason that ends up, I did it just because I wanted the tax-free growth.

Speaker 1 That's the only reason I did it.

Speaker 1 And so I started converting stuff many years ago. And anytime anything popped up that was not, that was traditional, I immediately made it into Roth.

Speaker 1 Now, the result is exactly what you're facing, and you've analyzed this very well. You've done a good job.

Speaker 1 You have two problems with the traditional that are mammoth.

Speaker 1 Problem number one is the RMDs, the required minimum distribution is what that stands for. For those of you that don't know, John does.

Speaker 1 And that means at 73, they require you to begin to distribute traditional because they are bent on getting their taxes.

Speaker 1 And so they make you take that that has never been taxed yet and that is not tax-free and begin to distribute it. And as you said, with $3 million, it's going to be over $100,000.

Speaker 1 And so that $100,000 comes out. It's 100% taxable.

Speaker 1 And so it's going to be reduced by 37% or whatever, whatever the number is, 30%, whatever it ends up being, depending on what your other incomes are. But the,

Speaker 1 yeah, that's problem number one, is you're forced into RMDs. You do not have RMDs, as John knows, on Roth.

Speaker 1 And so I don't have any required minimum distributions facing me when I hit 73. The second problem is that the traditional...

Speaker 1 IRA or traditional 401k, when it becomes an inherited IRA, naming your child as the beneficiary, it goes to them or your wife, and then later your child is a secondary beneficiary, however that works out.

Speaker 1 When they get that money under the Biden Secure Act, they are now required to liquidate that fund and pay taxes on all of it over a 10-year period of time.

Speaker 1 So $300,000 a year on $3 million. Oh, by the way, it's not going to be $3 million.
It's going to be $9 million because you're going to live a while.

Speaker 1 Okay?

Speaker 1 And you're not touching it anymore. I'm on the same page.

Speaker 1 That's true. So

Speaker 1 those are the two problems. And so that makes me, it's pay me now, pay me a lot more later is the equation.
And so I'm going to start working out of this pretty quickly.

Speaker 1 I'm going to use a substantial part of that 500K in mutual funds and after-tax investments over there. And I'm going to use that and move as much of of the $3 million as I can this year.

Speaker 14 Right.

Speaker 1 And then I'm going to,

Speaker 1 as much as I, you know, and then I'm going to use the $3 million. What's left, I'm going to pay taxes out of it as I do it each year.

Speaker 1 And it's going to be a lesser amount when the smoke clears because of the stinking taxes.

Speaker 1 And then it's going to grow completely tax-free from then on, not be subject to RMDs. You're back in control of your nest egg.
The stinking government's not got their meat hooks in you.

Speaker 1 And they don't get to hook your kid in the next generation when you leave it to them. So you leave in a Roth IRA tax-free.
They can cash it out that day, the day you die, and they pay no taxes on it.

Speaker 1 And so, because here's the thing: you're sitting on $4 million, $3 million in this thing. And if it's in good mutual funds, and

Speaker 1 by the time you hit RMDs, it's going to be $6 million. It will have doubled.

Speaker 1 And seven years later, when you're 80, and if you're in good health, your probability of living to 80 from 65 is very high,

Speaker 1 statistically. Okay.

Speaker 1 So

Speaker 1 then that $6 million is going to be $12 million.

Speaker 1 And if it's all sitting there, it hasn't paid taxes on it yet, except for the RMD portion, it's going to be substantial taxes. So

Speaker 1 in terms of dollars. So it sucks right now, but it's going to triple suck later.

Speaker 1 I would do it.

Speaker 14 Yeah,

Speaker 14 you're telling me what I was hoping you were going to tell me. My wife isn't on the same page because she doesn't get excited about paying

Speaker 1 $70,000.

Speaker 1 You want to pay taxes on $12 million or three?

Speaker 14 Yeah, that's a good way of putting it.

Speaker 1 It's just a matter when you're going to do it. Somebody's going to do it someday.
And if you guys don't use this money and it's invested at an average of 10%, it's going to double every seven years.

Speaker 1 And so you're going to get hammered.

Speaker 14 Like the last caller, changing the family tree and the next generation.

Speaker 1 You already have changed your family tree, by the way. You guys have done great.
I assume you started with nothing.

Speaker 14 Yeah, we're everyday millionaires, longtime listeners, first-time caller for you. But my wife's a retired teacher and I'm a retired CPA.

Speaker 1 I love it.

Speaker 14 We've been doing this for a while.

Speaker 1 Two of the top five categories of people who become millionaires, teachers and accountants.

Speaker 14 You didn't inherit anything.

Speaker 1 Yeah, you did it. You did it.
You did it. You guys are incredible.
You've done a good analysis on it, John. You did have your facts straight.
You know what you're talking about.

Speaker 1 You're just trying to think it through. And if I woke up in your shoes, I would use the majority of that 500 today, and that would move about 2 million of

Speaker 1 the three out. And then the other million that's laying there, I'm going to chunk it out over about three years and just take the hit, take the pain, and then be done with it.

Speaker 10 Is there a limit for how much you can convert per year? Nope. You just got to, you can do it all the time.

Speaker 1 You just got to pay the taxes. But the taxes are.

Speaker 1 And he's got so much, he's going to have bracket creep anyway.

Speaker 1 He's going to max it out out every year anyway so there's no way to avoid his bracket creep so there's no way to stage it actually that makes sense so i'm just gonna rip the band-aid off and it sucks but welcome to tax law

Speaker 19 Hey, George Camill here. So you're thinking about buying or selling your home.
It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Speaker 19 Well, here's the good news: you don't have to tackle the process alone.

Speaker 19 Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence.

Speaker 19 You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly, What's Not to Love?

Speaker 19 So, if you're ready to take the next steps toward your home goals, go to ramseysolutions.com/slash real estate. That's ramseysolutions.com/slash real estate.

Speaker 1 In the lobby of Ramsey Solutions, you can watch this show be broadcast every day. We're on the glass from 1 to 4 Central.
Also in the lobby is the debt-free stage. Brian is on it.

Speaker 1 Hey, Brian, how are you?

Speaker 19 I'm good, Dave. How are you?

Speaker 1 Better than I deserve, sir. Where do you live?

Speaker 2 I live in Martinsburg, West Virginia.

Speaker 1 Cool. Welcome to Nashville.
And how much debt have you paid off, sir?

Speaker 2 About $44,000.

Speaker 1 Cool. How long did that take? Two years.
Good for you. And your range of income during that two years?

Speaker 2 It went from $80,000 to approximately $139,000. Wow.

Speaker 1 What do you do for a living?

Speaker 2 I am a program analyst as a federal contractor assisting DHS.

Speaker 1 Wow. Okay, cool.
In Martinsburg, West Virginia.

Speaker 2 Yeah, it's about an hour and a half west of D.C.

Speaker 1 Nice. Yeah, okay, gotcha.
All right. Very cool.
It's a pretty area, too.

Speaker 2 It's very nice.

Speaker 1 Love it. Very cool.
So, what kind of debt was the 44K?

Speaker 2 About 30,000 with student loans and then about 14,000 with credit cards.

Speaker 1 Good for you. How old are you?

Speaker 2 I am going to be 37 on Saturday. Good for you.

Speaker 1 Happy birthday. Thank you.
All right. Neat, neat, neat.
Well, way to go, man. Thank you.
So what gets you started on this whole Ramsey thing two years ago?

Speaker 2 Well,

Speaker 2 about three years ago, I closed on a house.

Speaker 2 I basically drained my savings account,

Speaker 2 kind of wanted to keep up with the Joneses, was not up with the Ramsey stuff at that point.

Speaker 2 And that really acted as a forcing function because

Speaker 2 as soon as I closed on the house, I was renting it out to someone. They ended up not paying the rent,

Speaker 2 being laid on the rent very consistently.

Speaker 2 So when they finally moved out after a couple months, it was the real deal. It was do or die.
I didn't have any margin for error. So I needed a solution.

Speaker 2 I knew that you were the guy when it came to personal finance.

Speaker 2 So I started Googling you and I just started breathing Ramsey, waking up, listening to it, hitting the shower, listening to the Ramsey show, doing laundry, listening to Ramsey, you know, in the car, just living it and just making that a cornerstone of my life.

Speaker 1 Very cool. Very cool.
That's neat. So you got everything you needed to know just off of YouTube binging.

Speaker 2 Well, Spotify binging, but

Speaker 1 essentially.

Speaker 1 Excuse me, wrong ad.

Speaker 1 Same thing, yeah.

Speaker 1 Binging, nevertheless, yeah.

Speaker 1 So no book or no FPU class, just straight up Spotify. Just straight up

Speaker 2 Spotify.

Speaker 1 I like it. Good for you.
That's awesome.

Speaker 10 Okay, what was the biggest thing that helped you through that journey, would you say? That you did, that you were like, if you went out of debt, this is what you got to do.

Speaker 1 Right.

Speaker 2 Well, really, it was just about finding a plan and limiting the extraneous expenses. Like, you know, maybe you got to stay in from the restaurant more nights per week.

Speaker 2 You know, maybe you got to go with a

Speaker 2 beater car. Like, I got like a 20-year-old Hyundai Elantra that I still roll with.
You know, it's got 139,000 miles on it, but I have no intent to trade it in because it still works for me. You know,

Speaker 2 so just like being mindful of just the day-to-day, those small decisions and just limiting those

Speaker 2 pennies that you're throwing into the ether

Speaker 2 if you're not aware of it and thinking about it. So

Speaker 1 it's amazing how much that all adds up. Absolutely.
Yeah. I mean, it adds up to 44,000 in two years.
I mean, yeah,

Speaker 1 absolutely.

Speaker 2 And, you know, I mean, the student loans, I probably started out with 35,000 student loans when I graduated college. I only paid off maybe like 5,000 of that before I hit the Ramsey plan.

Speaker 2 So, like, when I got Gazelle Intense, like, there was nothing that was going to stop me. I was throwing like $2,000 a month at, you know, my credit cards and my student loans.

Speaker 2 And that was just like what I did. That was like the biggest thing in my life going on at that moment.
And I'm so glad it's all behind me because it was so worth it, just buckling down like that.

Speaker 1 You had an old crap moment and you went all in.

Speaker 2 Exactly.

Speaker 1 How long,

Speaker 1 how many months were you in before you kind of started going, okay, I'm no longer afraid. I'm now getting excited.
This is going to work.

Speaker 2 Yeah.

Speaker 2 I would say it was probably like after that year mark, after I was a year into it, and I saw, you know, I saw my student loans probably hit

Speaker 2 because you know two years ago it was probably at like $30,000 when I saw them hit like 14,000 maybe like a year ago I was like okay I can see the end in sight and like this is actually gonna work yeah you know yeah and I'm gonna be free yeah the math was telling you before that but the emotions kicked in when you hit about the halfway point oh absolutely yeah yeah that makes sense okay so great what was the hardest part of the two years for you hmm the hardest part of those two years years,

Speaker 2 I would just say, like, just resisting the temptation to live like, you know, everyone else.

Speaker 1 Yeah.

Speaker 2 Just like, you know, friends want to pull you out, like, hey, come on out with us. Or, you know,

Speaker 2 hey, you want to go on this vacation?

Speaker 2 Or, you know,

Speaker 2 just different things or, you know, different, you know, there's always like ads online that are tempting you to buy stuff you don't need, subscriptions you don't need.

Speaker 2 So just saying no to all that and saying no to like some of the flashy stuff in in 21st century America was, you know, it was just tough to

Speaker 2 stay the course and stay tough. But it got easier over time.

Speaker 2 You know, as you get that practice under your belt, you know, it just becomes like momentum.

Speaker 10 Yeah, more normal.

Speaker 1 Yeah. You're used to it.

Speaker 10 Yeah.

Speaker 1 It's almost now when somebody looks at it and rolls their eyes or looks at you and smirks, you kind of smirk to yourself and go, you have no idea. Right.

Speaker 1 I got this. Exactly.
I got this. I'm done.
Yep. Yeah.
You truly had an I've had it moment. You really did.
Absolutely. And it started out fear-based and it ended joy-based.
That's cool. Absolutely.

Speaker 1 Very cool.

Speaker 2 I couldn't be more thankful. I mean, you guys have changed my life, seriously.

Speaker 1 You changed your life. We just fucking proud of you, man.
Proud of you. Congratulations.
Congratulations. Thank you.

Speaker 10 Were there people in your life cheering you on during it? Did people know what you were doing, or did you kind of keep it on the down low?

Speaker 2 I was kind of selective about who I told.

Speaker 2 You know, I would tell people at church, you know, they were cheering me on, you know, big Ramsey fans, told my family, my immediate family, mom and dad, they were definitely cheering me on and stuff.

Speaker 2 You know,

Speaker 2 not a whole lot of skepticism out there from the people that I knew. But, you know, I did recognize that this was my kind of deal.
This was my thing to focus on.

Speaker 2 So I wasn't really that chatty about who I shared it with. I just kind of buckled down and it was just kind of like full steam ahead.

Speaker 2 Like, this has to be my focus because I was just so sick and tired of doing things the old way.

Speaker 2 Like, you know, the quality of life that I have right now, just what, two two months after paying off all my debt, like it's immeasurably better than it was before I paid off all my debt. Amen.

Speaker 10 You know? So good. Because financially, and would you say emotionally, do you feel like you've shifted feeling like, oh my gosh, I don't owe anyone anything?

Speaker 2 It's a huge weight off my back. I mean, I feel like I can, I mean, I don't want to say do anything, but like the options in my life are so much greater.
Like, you know, I was working,

Speaker 2 let's see, I was working like two side hustles and I was renting out a room in my tiny townhouse while I was paying down this debt. Now I just live with my new cat.

Speaker 2 Kind of bought him as a gift after I got out of this debt.

Speaker 1 Exactly. Yeah, exactly.
Roommate exchange. Yeah, exactly.

Speaker 2 I was able to drop one of my freelance clients. I do some writing on the side.

Speaker 2 You know, so now I've got like just the one freelance client, live with my cat, you know, just live

Speaker 2 by myself in my little townhouse. And like it's all worked out.
That's awesome. Yeah, it's great.
It's just like so much less stress, so much less to worry about.

Speaker 2 And, you know, the Ramsey Way just like really helped me focus on what's important and how to live a more fulfilling life.

Speaker 1 So, praise God, man. I'm proud of you.
Yeah. Awesome.
Very, very well done. Very well done.

Speaker 1 And I'm sure your parents are proud of you since they were cheering you on and watched you do this whole thing. Very cool.

Speaker 2 Definitely. My dad's an accountant, so he's definitely proud of him.

Speaker 1 Sure, yeah, sure. Yeah,

Speaker 1 he got it dialed in immediately. Yeah, I like it.
Yes, sir. Brian from West Virginia, $44,000 paid off in two years, making 80 all the way up to 139, busting it to get out.
Count it down.

Speaker 1 Let's hear a debt-free scream. Three, two, one.

Speaker 1 I'm debt-free.

Speaker 1 Yeah.

Speaker 1 Yeah.

Speaker 1 You know, Rachel, when

Speaker 1 a young single guy like that does this stuff,

Speaker 1 it is, in a sense, it's harder for them because there's no one to hold them accountable. In another sense, it's easier for them because they don't have to talk somebody else into it.

Speaker 1 They just go do it. That's right.
That's right. Yeah, yeah, yeah.
And so you got a little bit of advantage, a little bit of disadvantage when you're going at it.

Speaker 1 But he dialed it in, went for it, went straight down the line, boom, boom, boom.

Speaker 10 Well, it's just no crap.

Speaker 1 He's just like, just going to do it.

Speaker 10 Two years, be done.

Speaker 1 Just matter of fact. Just do it.
Just matter of fact. That's how it works.
So great. Well done, sir.
Well done.

Speaker 1 Our scripture of the day, James 1, 2, and 3, consider it pure joy, my brothers and sisters, whenever you face trials of many kinds, because you know that the testing of your faith produces perseverance.

Speaker 1 Benjamin Franklin said the Constitution only gives people the right to pursue happiness. You have to catch it yourself.

Speaker 1 Ethan is in Texas. Hey, Ethan, what's up?

Speaker 1 How are you doing, Dave? Better than I deserve. How can I help?

Speaker 22 So I'm 23, and I'm working as a security officer in the oil field, making about $8.74 a week after tax.

Speaker 22 And I just, I struggle with a few things, primarily saving money, because I'm just not used to it. This is the most I've ever made, and it's more than I could make in town.

Speaker 22 I actually work pretty far outside of town, have to drive.

Speaker 22 And, you know, the most I can make back there is $15, $16 an hour.

Speaker 22 But I'm not really content with

Speaker 22 where I'm at. You know, I've gone pretty much as high as I can.
They want me to be a supervisor now, but it comes with a $10 an hour pay cut.

Speaker 22 And

Speaker 1 well, that's a great promotion.

Speaker 22 Yeah, our site supervisors, they make the same as everybody else, and it's different for every site. So where I'm at, I get payday 74, but if I go be a supervisor, they cut it dramatically.

Speaker 22 But I'm making pretty good money, you know, for someone my age, I think.

Speaker 22 And

Speaker 22 I just struggle with saving it, you know.

Speaker 22 I have some debt from when I was 18. I didn't know about interest rates.
Got some credit cards with 30% interest. And I've been paying those off all of them your snowball month.

Speaker 1 How much is your car payment?

Speaker 22 My car payment, I actually own my car. It's old Lincoln my grandfather gave me.
But I have to make a lot of repairs on it. You know, just this month, I probably spent 2,000 buying parts.

Speaker 1 Did you say you had housing furnished?

Speaker 22 Yes, my uncle has been gracious enough to let me come up here and live with him. So I have pretty much his email bills besides gas, car insurance, and my phone.
Okay.

Speaker 1 All right. So the problem is you're not telling your money

Speaker 1 where to go. Instead, you're wondering where it went.

Speaker 22 Yeah, pretty much.

Speaker 10 Yeah, so being able to control, because it's probably, what, around three grand-ish a month?

Speaker 8 Yeah, just about $3,000.

Speaker 10 Is what you're bringing home before, yeah,

Speaker 1 taxes.

Speaker 22 Yes, after tax, after I pay everything, it's $3,096.

Speaker 8 Okay. After I pay everything I have to.

Speaker 10 Okay, when you say pay everything you have to, meaning your phone, insurance, all of that.

Speaker 22 Yes,

Speaker 22 everything that I need to

Speaker 22 exist.

Speaker 10 Yeah, so the remaining Ethan is, again, you just need a pretty detailed budget to know exactly where that money's going to go and what it's going to do.

Speaker 10 How much credit card debt do you have left to pay off?

Speaker 8 i

Speaker 22 that's another issue is i've i've paid it off everything i can find but a lot of it's been sold off to collection agencies and

Speaker 22 i end up not finding out about it until they finally send me a court order suing me because i never get any calls or letters or anything about it so i think it's around four thousand total i have three left i know of but there's a lot that i just don't know who holds the debt have you have you pulled your credit report do you know what's outstanding

Speaker 8 No, I haven't.

Speaker 1 Okay, so I would do that. That'll give you some insight into who currently owns it and how to get in touch with them and begin to get balances on those things and settle them.

Speaker 1 You could probably settle them for what you originally owed real easily.

Speaker 22 Yeah, I've done that several times with the ones I've had.

Speaker 8 Good.

Speaker 22 I think I sold one of those 3,000 down to, I think, 800.

Speaker 21 So

Speaker 8 that's working out for me.

Speaker 1 Yeah, so you know how to do that. That's good.
Okay, so basically,

Speaker 1 unless you're giving a lot of money away, you're spending a lot of money on food. I mean, on fun.

Speaker 1 Yeah,

Speaker 22 I have a habit to buy and sell guitars.

Speaker 8 You know, I buy them a lot, you know, $1,000 here.

Speaker 22 Usually I make a profit, but sometimes I sit around for months at a time, and I end up letting them go for a loss. Some I make profit on, some I don't.

Speaker 22 And then, yeah, food as well.

Speaker 1 I think we found the hole in the bargain.

Speaker 8 Yeah.

Speaker 10 How many guitars do you currently have right now that you're wanting to sell?

Speaker 8 Right now now that I'm selling, I have six.

Speaker 1 Okay.

Speaker 1 So that'll help. Did you say guitars or cars?

Speaker 10 Guitars. Guitars.

Speaker 1 Oh. Music.

Speaker 22 Yeah, I'm a player, so I always buy, buy, sell, fix them up, and flip them. It's just they're hard to get rid of sometimes.

Speaker 1 Yeah. That's the hole in the bucket, okay?

Speaker 1 Because you're losing more money than you're making on that, and that's eating up what would have been savings.

Speaker 1 Because you're not paying attention to it. You're paying attention to the guitar, but not the business of flipping.

Speaker 1 So

Speaker 1 if you're going to buy and sell more than one a year, you're going to start treating it like it's a business and being very detailed about what you pay for it versus what you spend on it versus what you sell it for.

Speaker 1 And you need to make a profit every time.

Speaker 1 Okay?

Speaker 1 Otherwise, you've got to quit screwing with this because it's just become an expensive hobby.

Speaker 1 And, you know, guitars are fine. There's nothing wrong with them.
They're not evil, but they're not an investment.

Speaker 1 So it's just a small business idea as it is right now. You with me? Are you there?

Speaker 8 Yes, I am. I was just listening.

Speaker 1 Okay. Yeah, I mean,

Speaker 1 you've identified where the money's going because you got $3,000 a month you can't account for, and we just found it. I think it's leaning against the wall.

Speaker 22 Yeah, it's definitely been an issue that I've noticed.

Speaker 1 So I think we put you on every dollar, get you on the budget. We'll give it to you.
And you start spending every dollar on the app before the month begins.

Speaker 1 Here's how much I'm going to have for gasoline. Here's what my phone costs.
Here's what I'm going to have for food. Here's what I'm going to have for fun and entertainment.

Speaker 1 Here's what I'm going to spend on guitars. Here's what I'm going to put in savings.
And the more you execute that.

Speaker 10 And then the more you pull out of that budget to throw out this debt to get it paid off when you see it, when you finally pull your credit report, no, that extra margin goes for the debt.

Speaker 10 It doesn't go to guitars. It goes and sell those guitars.
That'll bring in some cash. That'll be pay off some of this debt, too.

Speaker 1 You probably got $4,000 worth of guitars laying there to sell. So, yeah.
Yeah.

Speaker 1 Keep something cool. Keep one or two that's cool to play.
I'm good with that. I ain't got an issue with that.
It's not killing you.

Speaker 1 But this exercise of not being intentional and treating it like a business and paying close attention to every dollar, that's what's eating your lunch. Eric is with us in Chicago.
Hi, Eric.

Speaker 1 How are you?

Speaker 31 Hi, Dave. Thanks for having me on.
Sure.

Speaker 1 What's up?

Speaker 31 So, my father passed away this year, and he left my mother and I with

Speaker 31 a substantial amount of money. So he left us with 12 million.

Speaker 31 I received 4.1 million in cash, and the rest went to my mother.

Speaker 3 Wow.

Speaker 31 Currently, that money, my money, 4.1 million, is sitting in a money market account, which is making 4.59% interest.

Speaker 31 So I'm making about 14 to 16K a month off of interest with that.

Speaker 31 And my question is,

Speaker 22 I want to buy buy a house, and

Speaker 31 I don't know how much I should spend on a house.

Speaker 1 What do you make of your

Speaker 31 well, right now? I'm not working.

Speaker 1 Why?

Speaker 31 I have a hard time with work. It's hard for me to keep a job.

Speaker 24 I have ADHD.

Speaker 31 So, and I felt like I haven't found my calling either. So, it's just hard for me.
I'm still trying to figure that out.

Speaker 3 How old are you not?

Speaker 17 I'm 38.

Speaker 1 Okay.

Speaker 20 Yeah, so I have that.

Speaker 31 So right now, you know, it's just the income I'm getting is just from the money market. And then,

Speaker 31 you know, so I want to buy that house. And I don't know how to do it.

Speaker 1 If this money allows you to not deal with your ADHD and your career issues as a result, this money has become a curse, not a blessing.

Speaker 1 You have got to deal with those things for your own sake and for your own dignity.

Speaker 1 Becoming a trust fund, baby, and saying it's because I couldn't work because I ADHD is not going to be good for your mental health long term.

Speaker 1 No.

Speaker 1 So I would prefer you pretend like this money doesn't exist and go earn a living, sir, for your sake.

Speaker 1 I think you'll feel better about it.

Speaker 31 The thing is, I also want to know how I should invest this money.

Speaker 1 Because this money is going to be a good thing.

Speaker 1 You just drove right past that, didn't you?

Speaker 1 You don't have any intention of doing what I just said, do you?

Speaker 31 No, I do. I just want to invest it as well so I can make money off of it also.

Speaker 1 I think that's good. I think that part's good.
And I think buying a house is good and paying cash for a house. So

Speaker 1 you're in Chicago.

Speaker 1 I would spend less than a million dollars. I'd probably spend $700,000 on a property and move in cash and move in it.

Speaker 1 And I would sit down with a Smart Vestor Pro and I would invest the rest in some good mutual funds and I wouldn't touch it. And I would go see a therapist and a doctor if you you need some medication.

Speaker 1 If you're depending on what's going on with your ADHD, I don't know. But get yourself to where you can work and hold a job and build a career.
You will like you better.

Speaker 1 You'll be more fun.

Speaker 1 That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it.
In the meantime, remember, there's ultimately only one way to finance.

Speaker 19 Up next, we are headed out to Chicago and Orlando for the Ramsey Show Live. Yep, you heard me right.
We are taking this show to you.

Speaker 19 This is going to be everything you love about the Ramsey Show, except you get to be a part of it.

Speaker 1 Part of what, George?

Speaker 19 The Ramsey Show Live. Okay.

Speaker 1 That's what I'm telling them about. Ramsey Show Live in here?

Speaker 19 Nope, we're doing it on the road. You're going to Chicago with me and Rachel Cruz September 30th.

Speaker 1 Are you free?

Speaker 19 The windy city. I like it that time of year.

Speaker 1 You know what else I like, George?

Speaker 2 I like the deep dish.

Speaker 19 Oh, okay. Maybe we'll have some deep dish.

Speaker 1 You mind if I finish the promo?

Speaker 19 Is that okay with me?

Speaker 1 Yeah, okay. Okay.
Appreciate that.

Speaker 19 Questions and answers, real conversations, and I'm sure a few surprises here and there.

Speaker 1 George, are you in here talking about TRS Live?

Speaker 19 I am, Jade. I'm trying to talk about it.
Nice.

Speaker 1 So that means it's actually happening, right?

Speaker 19 It's happening. If I could tell the people, I think it could actually come to fruition.
Listen, just tell me when and where. You don't know? Okay, we're going to Orlando.
You're going to join Dr.

Speaker 19 John Deloney and I October 2nd.

Speaker 1 Yes. Okay, great.
I'm going to go pack now.

Speaker 19 Please, please do that. Go.

Speaker 1 Pack.

Speaker 10 Hey, George.

Speaker 11 Speaking of packing, is this like sweater weather or is it not that cold yet in Chicago?

Speaker 1 What is happening?

Speaker 19 Can I please just get to how they buy the tickets?

Speaker 1 Geez, I thought it was a good question.

Speaker 19 Okay, this is not an arena tour. This is a one-night-only event in Chicago and Orlando.
General admission is only 39 bucks. Plus, there's a VIP experience if you're bougie like that.

Speaker 19 But here's the thing. There's only 300 seats available.
So get your tickets now at ramseysolutions.com slash events. Hey, how come you get to go to both cities?

Speaker 19 I just go where they tell me, man. Hey, have you been there the entire time?

Speaker 1 Maybe.

Speaker 1 Okay, and also, are you reading a children's book?

Speaker 1 I'm expanding my mind, George.

Speaker 19 That's how we got those PhDs.

Speaker 1 Yeah, that's probably where you got that jacket. Okay.
See you on the road, John.