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

Mama, Papa, mi cuerpo crece a unrimo alarmante.

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Pero sugietera no tinen que sufri por la moda con los precios vajos de la vuinta clas de Amazon.

Amazon, las tamenos, sonriemas.

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From the headquarters of of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love,

and create actual amazing relationships.

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.

How are you?

I'm doing excellent.

Thank you so much for taking my call.

Sure.

What's up?

We have an interesting situation.

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

She's 89 years old and continues to have a decline.

She was amazing with money.

She's got a great nest egg.

Will

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

She has a huge coin collection.

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.

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

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.

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

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.

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

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

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

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

And

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.

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

Yeah, the only problem is you don't

really be able to, you're going to have to ship them them to them and that can be heavy and expensive and so if you if they're out of town 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 um you know start poking around um

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 it was about it was probably

uh eight years ago or something like that that i did that so that's how i did it it really wasn't 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.

And if you could find somebody that just is running a local social media page on coin collection even,

and just start poking around on that, 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.

And

if you felt good about their knowledge base.

And

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.

And so we had him go through them, and he said, nope, nope, nope, nope, nope, nope.

I don't know what a wheat penny is.

It's a penny that has wheat on it in the early 1900s.

Oh.

And more valuable.

No.

Oh, not much.

It might be worth a penny and a half.

Oh, okay, so.

But it's not worth screwing with.

But most of the time.

I got got you, I got you.

I got you.

The ones that we had weren't.

And so

anyway, that's how we did it, hunt.

And I'd just check out.

I'd run around and

coin dealers, coin collectors,

you know, people that do any kind of

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.

Same kind of thing.

So, hey, good question.

Thanks for calling in.

Mary is in New Jersey.

Hi, Mary.

How are you?

I'm doing well.

How are you?

Better than I deserve.

What's up?

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

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

I have a great job.

My husband and I

have student debt

of about, I think his is 95, mine is 75.

We don't really have credit card debt

and we have a card that we're making payments on, but we're going to attack that so that we don't have that anymore.

I've been watching a lot of your

shows, and it's really convicted me and my heart on

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

he's amazing and he's so wonderful.

And I just want to be a better teammate with him to attack these debts.

We're also fairly parents, 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.

And I just,

I want to.

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

do better.

So is he already on board, Mary?

Oh yeah.

Oh yeah, okay.

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?

So

he's been,

so he read one of the Dave Ramsey books

a long time ago, and that's actually how we're out of credit card debt.

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.

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.

Tell me how this works.

That's huge.

Well, and honestly, Mary, I mean, that's, 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.

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

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.

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

I'm on board.

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.

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.

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

And so,

so yeah,

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?

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

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.

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

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.

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

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.

Glad he got you on board.

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helen's in new york hi helen how are you

good how are you better than i deserve what's up

so my husband wants to buy a seven passenger family type luxury car that will cost about ninety thousand dollars and i am fine with him buying the car.

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.

But we have no debt.

Our house is paid off.

He makes over $400,000 a year.

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.

How old is he?

He is in the 60s, 62.

Okay.

And $400,000 a year income, no debt, house is paid for included.

How much is in your guy's nest egg?

What's your net worth?

Over $4 million.

Okay.

All right.

The way that my wife and I make these decisions, Helen, is

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

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

does it affect our life?

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

Correct.

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

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.

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,

well, that's one year's income.

That's 10% of your net worth.

That's too much.

Okay.

And so

the math on that says I would feel it.

Helen, how did he grow up?

What was his upbringing?

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

We have never had credit card debt.

We've never made like crazy car purchases.

This is not a crazy

college.

Right.

We paid off our loan.

Yeah.

Yeah.

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, he's smart.

It's not a math problem.

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.

Well, he wants to be aware of it.

That's what's causing it.

It has a desire to be responsible.

And my point is, it's not irresponsible.

I don't think it's a desire.

I think he has been responsible.

I know.

I mean, he's afraid he's being irresponsible.

Right, which comes out of fear.

The motivator, yeah,

is irrational.

You know what I mean?

What car is it?

It's a BMW.

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

Well, I don't care about that.

I do want him to buy a cheaper car if he can't afford it.

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.

I don't want him in two years to say, oh, I should have bought it.

Well, you know what?

And we're getting rid of it and we're buying it.

Yeah, that's not the reason he should buy it.

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.

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.

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

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.

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.

And then on the other end, people take the extreme of take control.

And it's such control that it almost becomes an idol.

This level of like, I don't want to let go.

And that stress and anxiety, that's not freedom either.

Right.

So you have to find that balance.

And it's hard because we see, we see this a lot, I feel like of people that have worked the plan or paid off their house and they, they don't want to go on vacation because they're so fearful oh god am i going to mess this up is this okay and that's in much bondage right i mean from an emotional standard 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 make sure if you're going to

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.

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.

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

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.

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.

Hey, Tyson, what's up?

Hey, guys, thanks for taking my call today.

Sure.

First time calling in.

Well, we're honored.

A couple things.

So I've always kind of lived, my wife and I have lived

Dave Ramsey adjacent is kind of like my affectionate way of saying that means you were right part of the time.

We have six months of savings, like emergency fund.

We put 18 to 19% of our annual income into retirement.

That includes 401k and maxing out ROS for each of us each year.

We have a small amount, about $5,000 each in our twins,

the five-years-old twins' college accounts.

So we're doing some stuff.

My one question is we have $19,000 worth of truck debt.

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 continue down the path of paying this thing off in six to eight months?

Don't you have money saved in an emergency fund?

We do.

And I don't,

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

Yes.

Seems like a dumb question.

You should pay your truck off today or you should sell it.

One of the two.

Okay,

one of the two.

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

That's easy enough.

And then we're working to pay off our house after that.

So we're clear, man.

We're super close.

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.

The key to building wealth is not having stupid truck payments.

And

I drove my truck today.

I like a good truck.

There's nothing wrong with that.

You parked it kind of sideways.

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

Well, my Tesla is literally parked right next to you at the charger station.

I thought his parking lot lot.

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.

So

don't mess up my truck.

Well,

you're the one picking on my parking style.

But the, anyway, the

James knows.

It's intentional.

It's not because I don't know how to park.

Okay, so it's keep you people off my truck.

But anyway, the, yeah, I want you to get a truck, Tyson, and I want your truck to get you.

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.

Car payments are the mantra,

the motto of the middle class.

You're always going to have a car payment.

You might as well have a big one.

Just get what you want.

Life's too short.

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

Everybody's got a saying about a car.

They always, you know, it's not safe.

My little babies, you're all going to die because the car is four years old.

Oh, shut up.

Car payments are basically signing up and saying,

I want to be in the middle class.

What do you take?

From age 25 to 65.

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

Hope you like the car.

There you go.

There's your $4 million car.

Broke your middle class thing and turns you into upper class.

You'd be upper class now.

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.

You know, we hear it all the time.

A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

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.

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.

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

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.

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

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.

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 money's still showing up.

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.

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

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Go to Xander.com or call 800-356-4282.

Protect yourself, protect your income, protect your family.

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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.

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

There's just a handful of tickets.

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Colin is in Michigan.

Hey, Colin, how are you?

Hey, good, Dave.

How are you?

Better than I deserve.

What's up?

Hey, I got a quick question for you.

So I'm a junior in college and I have about $85,000 in my 2529 account.

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.

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.

Have you gotten any scholarships?

Yes.

So that, yes.

So my scholarships cover about 50% of the cost.

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

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

Oh, okay, really?

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

Okay.

Or anything you want to use it for, for that matter.

But technically.

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

About $3,500.

Okay.

I'm just thinking, because you have how much in the 529?

85.

85?

Or 83?

Yeah.

So you've gotten $7,000 a year for two or three years, right?

Yep, that's correct.

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

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

Okay.

Okay.

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.

Like if you've got free housing or something, that kind of a thing.

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.

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

Qualified, okay, qualified home.

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

Yes, I did know that.

Okay, yeah, so that passed, which is great.

So, yeah, so if you, which you'll be close to that-ish

with the $24,000.

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

It's very difficult.

You can do it.

Well, I would do it.

Then I would get into it and

sit there.

I'd clean it out.

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

He's got $83,000, $20,000 in scholarships.

It's $50,000.

He's not going to live on $50,000 in two years.

Probably not, yeah.

So

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.

How great is that?

It can be used for your spouse someday.

It could be used for your own.

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

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

And just wait for it.

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

more intelligently, but you don't have to decide that today.

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

Or be penalized.

Unless his parents opened it when he was two.

And it's

19.

It could be open for 15 years.

Correct?

Isn't it when you start the 529?

Don't know.

Okay.

I don't know.

I had it under the impression after after you finished school that the 15-year started.

And so you were up to the next time.

I think it's a good thing.

Before you could do it.

Some options, Colin.

But at least use it for living expenses.

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.

And that would be good.

You've done a great job, by the way.

Death reschool.

Way to go, Colin.

Yeah.

All right, Matt's in Greenville, South Carolina.

Hey, Matt.

Hey, how's it going?

Better than I deserve.

What's up?

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.

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

and I feel just so spent.

Like, I just don't know what to do anymore.

What do you do?

I'm a package delivery driver.

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?

FedEx.

FedEx, the other one.

Okay, left one out.

Sorry.

Okay.

So what are you making?

Like 60 or 70?

No, I'm making 40.

Oh, you said 40.

Really?

I thought FedEx drivers did better than that.

Okay.

I wish.

Okay.

All right.

Well,

it comes down to a couple of things.

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?

Yes, absolutely.

That's your first big deal.

To get people to do that, sometimes it's hard.

And then the second,

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.

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?

What are the things I'm good at?

What are my natural bents?

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

You know, but there's probably something you've dreamed about doing, maybe opening your own business.

I mean, I don't know.

But I know guys running pressure washing companies that are making 100K.

Okay.

And obviously that's not rocket science.

Right.

Yeah.

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

So

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

And so,

you know, so 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.

That's what that tells me.

If you weren't asking us questions where we'd really have a problem.

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

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

Well, honestly, to tell you the truth, I would love to, 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.

We've been following you for the last 10 years.

We're just, we've just been struggling to save for our house.

But, I mean,

and the fact fact that they're that 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 so helping people is a big thing yeah 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 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 but if you hang on the line Matt we'll send you Ken's book and there's an assessment

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 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.

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.

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

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Not in all states.

Today's question comes from Cameron in Kansas.

My wife and I are on baby steps four, five, and six.

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

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

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.

My wife and I don't care 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?

Oh, I would get rid of this.

That's gross.

I would get rid of it, Cameron.

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.

That's whacked.

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?

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.

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

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

So, yeah, no, yeah, you should definitely call him and go, dude, we're not doing this anymore.

Chop, chop, chop.

Close, close, close.

Pay for your

point.

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.

Weird.

Yeah, it's way out of control.

All right.

In Virginia, it is, is it LARF?

Is that right?

Yes, sir.

Hi, Dave.

Hey, what's up?

Hey, thanks for taking my call today.

Sure.

My wife and I are both 26 years old.

We're completely out of debt, and we're currently on baby step number four.

Good.

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

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.

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.

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.

well obviously the more you put towards it the more the down payment is and the smaller the debt is 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 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 so that's after baby step three in other words but before we start baby step four Some people

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.

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.

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.

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

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?

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

Good, very good.

Okay.

So

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

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

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

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

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?

Have you started the retirement savings?

We are.

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

How much is that per month?

Do you know what that would be cash-wise if you put it back in your paycheck?

I'm not sure.

I would imagine

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

Yeah.

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.

That's your $100,000 goal.

And then you start your retirement.

Okay.

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

And you guys are 24.

Is that what you said?

26.

26, okay.

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.

That sounds lovely.

Yeah.

I just don't, I don't think the 12 is, that sounds like a 10-year plan.

That's not a plan, right?

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

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

Exactly.

Exactly.

So, yeah.

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.

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

and get to their good, strong down payment.

And that's a 20% down, is what he's aiming at.

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.

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

$300 a month for a $400,000 mortgage if you don't put down 20%.

That's a lot.

Again, that's $3,600 a year.

That starts to be almost 1% of your mortgage amount that you're paying out in insurance.

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

In the event they have to foreclose on you and they lose money on the house because you didn't put it down a big

down payment, then this insurance covers the difference.

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.

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%,

then

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 and and so yeah i i love to see people put down 20 because of that but again first-time homebuyers rachel's right we we don't yell at you for putting down five percent but you're paying a premium when you do that right well and i mean it's kind of that like tension of the market's not going down right 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?

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

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

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

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

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 down to 80%,

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.

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.

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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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.

Joe is with us in North Carolina.

Hi, Joe.

How are you?

Good.

How are you guys doing?

Better than I deserve.

What's up?

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

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

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.

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.

So

meaning, so what is your income on your side business now?

Right now it's only about a thousand a month.

Okay.

Working weekends.

Working weekends only.

Yeah, it's basically just Saturdays.

What do you do?

Mobile mechanic.

Oh, good.

Okay, cool.

And

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

Yes.

Okay, that's neat.

And what do you make on your day job?

Around 93 a year, depending on overtime before

everything.

Okay.

So jumping from 93 to 12 is not a plan.

That's too scary.

And there's two reasons it's too scary.

Number one,

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.

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

what can we do to add more hours?

and more income to the mobile business to get it to,

gosh, let's get it to 60,000 from 12,000.

Yeah, it would basically be a time issue.

Yeah.

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?

Why?

Just because.

They only want to do it during work hours?

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

just because of my schedule for the day.

You know, I'm out of the house early and then home later.

So you're working more than 40 at your day job.

A lot of the times, yeah.

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

Can you pull back on your main job, Adam, and start supplementing some of those hours?

Maybe like twice, like two nights a week?

Yeah, I might be able to.

It's just it's not predictable.

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?

For your full-time job, you mean?

What do you do?

What do you do during the day?

I'm a diesel mechanic.

So why would you have to stay after?

What was that?

What do you mean if something happens during the day?

Well, what happened during the day?

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

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

And you have to stay there to finish that job.

You can't just like.

You can't roll it till the next morning.

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

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

Um

it's it depends.

I know,

but how much do you really have?

For time?

No.

How often does that really happen?

Or how often are you just electing to stay late?

No, no, I don't elect.

Like, I would like

40 hours is fine for me.

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

Like, we're in a pretty good spot where we don't need all that extra income.

I want to say, you know, it's bad, but so how much how much mobile business are you turning away?

Um, it probably ends up being one or two jobs a week just because i tell them i'm out a couple weeks and then which is which is which is how much how much is a job worth on average

uh

be like three to five hundred depending some are more but yeah roughly around there so a thousand bucks a week possibly you're turning away so close to four thousand dollars is what you could be doing on a minimum

yeah yeah because i kind of did the math

figure it out that way but i want you to start taking those jobs and booking them

and just tell them if something blows up at work, I may have to push you a day,

but

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.

I want you to pick up some stuff, a couple of those jobs a night, a couple during the weeknights, and get this up to $3,000 anyway.

Have you got any savings?

Yeah, I have me and my wife have about $120 in 4M1Ks, and then we've got about another 20 just in regular savings.

You haven't got enough to do this.

Okay.

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.

Yeah.

To have that.

Yeah, because you're not going to be able to get ⁇ I'd like for somebody making 94 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 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 $1,000 income.

Yeah, exactly.

Because you have not proven the business idea is scalable.

You think it is,

but you have not proven it.

And

the family's counting on you to prove it.

For, what, six months consistently

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

Yeah.

I mean, if you can get another $2,000

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

You're going to burn some candle wall here.

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.

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

Well, and again, it's this,

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,

you should be up to the next day.

Yeah, for six months to to do it.

And then make it a little bit.

Your kids are whining.

Your wife's whining because they never see you.

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.

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

convenience and luxury items, convenience items and luxury items, and you're both,

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.

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

I know exactly that's what I'm saying.

I'm like, the convenience world out there is just growing and growing.

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.

That's bad business acumen.

So we want more social proof, more proof in the marketplace that we can actually turn this into money.

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,

I'd be ready to try it, especially if you had some savings.

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Denise is with us in Memphis.

Hi, Denise.

How are you?

Doing okay.

Good.

How can we help?

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

No.

Well,

Bible.

I'm messing with you.

I'm messing with you.

That's fun.

Okay, so why do you think you're saving too much?

Well, we have seven kids, and it just seems like things are super, super tight, and my husband's very anxious about money.

Okay.

Well,

are the kids eating?

Yes.

Okay.

What is super tight?

It's just sometimes we dip down into the savings and then we dip back out and it's just

in order to do what?

In order to just do general living.

Well, what's general living?

Well, insurance, groceries.

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

Well, no, we're budgeting for groceries.

I'm just saying

properly.

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

Yeah, it just, it just, it just,

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

Any margin in your budget?

Yeah.

It feels like.

How much do you guys make a year?

$150,000.

Okay.

Well, that's enough to feed seven kids.

Yeah.

Okay, so you shouldn't have a problem.

Where do you think the overspending is occurring?

Well, we're doing like 10 and a half percent into the 401k, 3,500 in the HSA, and then we're doing

an additional 15K in the Roth.

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

How much are you spending on groceries?

So it it's it's okay, groceries plus

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

Are they in private pay to the school?

No.

No, no, no.

Just like it just costs us $100

every week for all five kids to eat at school.

For lunch.

Yeah.

Yes.

Okay.

All right.

And

that that would be, but that's not killing you on a hundred.

So, okay, do you have a house debt?

No.

And you don't owe anything on your home?

No, sir.

And you don't owe any of the debt?

No.

Okay.

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.

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

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

That makes sense.

Yeah.

Are you guys funding, you're giving out dollar amounts for your savings.

Yeah.

Is that what percentage-wise is that coming out?

She said 10,500 plus 15,000 or 15%.

Yeah, for the Roth, no, $15,000 for the Roth plus the $3,500 for the HSA a year.

A year.

Yeah, that'd be right.

Okay.

That's $18,000 out of $150,000.

Yeah.

That's not causing you a problem.

That's not causing you a problem.

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.

You're throwing money and savings and hoping you can live with what's left over.

And when chaos hits, you dip back into the savings.

Yeah, and usually by the next month,

savings is pretty much where it was before, but it's just

my husband's just very stressed.

Yeah, I heard that three times.

But you know why he's stressed?

Because he doesn't have a plan,

not because of the money.

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.

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

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.

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

Because you guys are bringing home what?

What's hitting your accountanies every month?

$9,000-ish?

$10,000.

$8,641.

Something's wrong.

What is coming out of that check?

That's only $100,000.

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

Coming out of his check?

No, no, no, afterwards.

His check,

just insurance cost, and then the 10.5% for Roth and the $3,500 for the HSA.

That's why I'm going to take a look at the $19,000.

We're $50,000 down.

Yeah, it was like $120,000 after taxes.

So, yeah, I mean, it should be around $10,000.

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

Yeah.

And so, yeah,

you got something coming out of your check that's screwing up, too.

Are you guys getting a large tax refund?

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

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.

That will help your cash flow because you're not bringing home enough.

There's something wrong with your coming home figures.

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.

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.

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.

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

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.

So you have to manage this like it matters.

If you don't make these dollars behave, they are not going to to behave.

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.

The savings is not the math problem.

You've given us the numbers.

It's not there.

So I know where the money's going.

It's going to chaos and disorganization.

That's where it's going.

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 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.

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.

I can hear it in the process you're using and even discussing it with me.

So you can do this.

You have the money to be okay.

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.

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.

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

I don't think she did.

She didn't.

She didn't.

I was going to say, I don't think that's it.

She didn't.

But I get that all the time.

I hear that Dave, you can't do the Dave Ramsey plan if you have a large family.

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

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.

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

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.

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.

They're organized.

They line up.

They line up and little ducks, and then we take a picture real quick.

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.

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Rachel, when's your next one?

It is Monday.

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Is the Q ⁇ A interesting, Rachel?

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?

And yeah, so it's very helpful.

How's that function?

Yeah.

Okay.

Cool.

All right.

Adam is with us in Springfield.

Hi, Adam.

Welcome to the Ramsey Show.

Hi, Dave.

Thanks for taking my call.

Sure.

I have a couple-part question.

I grew up in a landscape family.

I was family-owned.

I took over part of my dad's business and my family grew.

I sold it, and now I'm starting from scratch.

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

that we take home.

Good.

My wife and I, we

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.

Our company was running a lot of old trucks

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.

And I know it's stupid.

It's crazy.

I didn't,

no excuses.

We're selling that home and buying another property,

borrowing $295,000, and we have $180,000

that we have coming back to us from that home we're selling.

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

Okay, what price range truck do you need to operate the business?

It's not the one you have.

I don't know exactly.

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

Yeah.

They're like $5,000 to $10,000 trucks.

And we still have a couple of those old trucks sitting around, and they were posted.

But I've stopped, I've started listening to your stuff just in the past week.

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

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

Yep.

Yep.

So, in business, whatever equipment we need,

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

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

And the valid investment is I need the minimum reasonable amount

to do the job.

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?

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

Kind of like a truck, okay?

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

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

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.

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

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

Because anything past that is a luxury item, and you ought to take your luxury items home.

You shouldn't have those at work.

Yes, sir.

So I, yes, I would definitely sell this truck.

I'd beef those two old ones up, get them going.

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.

You can't miss a job because of stupid breakdown.

Yeah, that's what happened.

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

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

Yeah, no, it doesn't.

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

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.

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 ones are like six times too fancy to get the job done, then it was ridiculous.

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.

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

Yeah, I understand that.

There's nothing else motivating.

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

If they're all running.

So right now,

right now, only one.

You only need one.

You know what?

I would take...

You said you had three junkers?

Two junkers.

Two.

Yeah.

Okay, and they'll bring five or six grand a piece, right?

If they're repaired.

They're pretty old.

I think one is probably $4,500.

The other one's maybe like $3,000.

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.

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

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.

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

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,

you know, that's all that matters: did you do the job?

And now, if you didn't show up, then I started caring what you drive because something broke, I guess.

But anyway,

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

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.

and

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.

You've gotten 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.

Judson's in Michigan.

Hey, Judson, what's up?

Hey, Dave.

It's great to talk with you.

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

My parents have been longtime listeners out of Southern California.

We moved to Michigan in 98.

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

So

that being said,

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

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

land value.

You have a place to move your family to.

You don't have a place to move the horses to.

Yes, both.

Right.

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

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

Yes.

Yeah, but horse trainers get confused about what family is.

Horses aren't family.

They're a business.

That's true.

They are lunch.

You and George Campbell.

You and George Campbell with the horses.

I didn't say sell the horses.

I just said in order.

Yeah, go ahead.

I'm sorry.

Right quick, what's your question?

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

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

I just don't know.

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

I'd like to.

Yeah, I know you'd like to.

We're managers

of a decent-sized property right now.

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 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.

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.

Michael's in Raleigh.

Hey, Michael, how are you?

I'm doing well, Dave.

How are you?

Better than I deserve.

What's up?

So me and my wife are on Baby Step 2.

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

Way to go.

Yeah.

How long did that take?

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

Oh, so it took 10 minutes.

Okay.

Yeah, so,

but

it was actually a little less than 49, probably about 40, it was like 46 or so.

What is the remaining debt on?

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

Okay.

Good.

All right.

And what's your household income, sir?

It's about $150,000.

Good, good, excellent.

Okay.

Nice.

And that's part of my question because I I work full-time.

My wife stays at home with our kids.

I'm in engineering.

I started a side business to help assist with the debt.

The problem with that is

in working 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.

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.

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

of not seeing him.

How old is he?

He was just working.

He's five, so he just started school.

So, you know, a lot of times when I get off work, I go straight and I just cut grass.

I just cut grass like crazy to just keep paying for it.

How much are you making on that?

On the side hustle?

30.

You said 120 and 30.

30.

Yeah.

Yeah, 30.

The 150 is total.

Oh, it's total.

I'm sorry.

I got you.

I got you.

Yeah.

So the

but how long have you been doing this?

This is our first year doing it.

It just kind of skyrocketed us.

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.

Yeah, well,

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

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.

So I was home with him during the day.

Yeah, well, you have 40, you have $50,000 in debt.

You're making $30,000 a year extra to throw at it, right?

Yeah.

Okay.

What do you owe on your car?

Nothing.

We have no car payments.

Student loans and personal loans.

I know, but I'm just checking.

What are they worth?

About $50,000 in cars.

We own a Jeep Wrangler and a Tundra,

but they're paid for.

Okay.

And the Tundra is for work.

We paid the Jeep off with a lump sum.

Yeah, what's the Tundra worth?

Probably about $12,000.

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

$20,000?

No,

I'm sorry.

I got the math wrong.

It's worth about Kelly Blue Book, like $25,000

to $28,000, somewhere around there.

All right.

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

Number one,

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.

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.

So it's not like you've really stretched out there yet.

Okay.

So,

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?

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

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.

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 all your stuff on top of it.

You guys could do this in a year.

Yeah.

That's what I'm projecting.

And

I'm still going hard at it.

It's just

a lot of fun.

Honey, you're not still doing anything.

You've been doing it a whole three weeks.

Yeah.

You know, it's not like you've been doing this for two years, okay?

I mean, you've been, it's a whole whole three weeks now the thing is

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 the world

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.

Because decades ago, I paid a price.

But when I was five?

When you were five?

Five eye dad.

When you were five, I was probably gone.

Your mother was a single mom.

Yeah.

And you lived in those words.

Yeah.

You had to tell your counselor later.

But the abandonment was not one of the issues.

It's good.

I mean, when I'm home, I'm home, too, by the way.

I turn off stupid television.

Yeah.

Okay.

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

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.

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.

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.

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

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.

Yeah, I think I'd be happy to get it.

And

put the extra money towards this debt.

So I would, yeah, drive a crappy car so that you can be home.

I'd keep the trundle.

You're using it to pull the lawnmowers.

I'd let her drive a crappy car right now.

And then you guys save after that, and and you guys can upgrade and car.

But it's kind of.

But I'm going to take everything out of this budget in the name of every time I take a dollar out, it's a dollar sooner.

I get to not be doing this.

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

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.

And I don't really care what other people think,

but

you're,

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.

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.

And

you ask how to deal with the emotions.

That's how I dealt with the emotions.

When we started Ramsey, I came into work at 7 a.m.

I got home at 11.

I never saw a kid for two years.

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.

And today, this thing allows our whole family

generationally to do whatever we want to do.

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 chance.

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

feelings.

I'm glad you have those feelings.

It means you're a good man.

But don't treat it like it's

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.

And if there's anything you're doing.

So you don't have to deal with it ever again.

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?

Now that he started school, maybe there's something she can do.

That's not a bad plan at all.

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.

That's it.

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Find what you need at ramseysolutions.com slash insurance.

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?

Good.

How are you guys doing?

Better than I deserve.

What's up?

Awesome.

Thank y'all for taking the call.

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

Thank you.

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.

Okay.

So I'll set the stage.

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

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

We're 27 now and we started when we were about 19.

And

in that,

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

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

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

But if I travel like I am now,

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

greed?

Of just chasing money to chase money.

Just make more money to make more money.

Is that what you're saying?

Yes, ma'am.

And I'm wondering where that switch is.

Because, you know, 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.

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

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

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

you know, every three or four days.

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?

Four and six months.

Okay.

And your wife is at home and you are traveling, and that affects the in-laws how?

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

nine months ago.

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

Correct, yes, sir.

Okay.

So they've been able to do that, I hope?

They have.

Okay, cool.

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

Before Before December?

Yes, sir, correct.

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

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

Right.

I agree.

Yeah.

So

I think the in-laws are the, they have their own issues.

They have their own issues.

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

Well,

they have accused him of being greedy.

I think that's between the lines.

Oh, is that what it is?

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

touch.

Yeah, we don't get to see 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, exactly.

Yes, sir.

That's what I heard.

Okay.

I was reading between the lines.

Okay.

Yeah.

So

the thing you got to go back to is this.

There is

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

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 other

I beg to differ I'm highly ambitious and I'm very content they're not on the same spectrum they they're not one end of the line or the other end they're different lines and so um you can be a good dad you can be a great dad, and be working your tail end off.

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

And so,

you know,

greed

is not an amount of money.

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.

Burn the oil.

That's a good metaphor for you.

But

I'm going to turn up the heat.

No, we don't want to do that either over there.

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.

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.

Okay.

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.

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.

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.

I don't want these kids to have to worry about food or shoes.

So I'm going to...

Or

college, college.

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.

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.

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

He goes, I'm going to read what I want to read and what I 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,

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

And, you know,

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.

Greedy people would never ask the question

because it doesn't occur to them that

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 well a guy that asks that question does not is not a greedy person by definition okay

and so greed is not gonna be your issue now do you want to adjust some of your goals and your values and say okay I'm gonna work on my career to where in the next 18 24 months I can be home and make a hundred instead of being on the road and making 200 or instead of coming home and making 50

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 50.

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

And so

unless you see an end to it very quickly.

You say, I'm going to do it for one more year and then I'm going to take, and then I'm, 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.

Yeah.

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?

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, you know what I mean?

Like, sometimes we make decisions that feel like forever, and it's not.

It's not at all.

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

I pulled back some after the third kid.

And you know what I mean?

Like, you can make adjustments

as

life comes.

And

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.

100% chance you're not greedy.

Okay.

So

just because somebody's a travel agent for guild trips, that doesn't mean you're greedy.

Okay.

So you're.

But I would have

a plan.

Yeah, have a plan about it.

Where it starts to bother you and bother me is 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.

We're doing this for a period of time to never have to do it again.

That kind of thing.

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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.

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

interest rate for a 15-year fixed.

That's a fact.

It's down a little.

It's a fact that house prices have stayed almost identical for the last three months.

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.

That's a fact.

The fact is, is that we have over a million houses on the market right now, the

largest inventory since 2019 in the last few months and yet

demand is still higher than inventory which is hold causing prices to hold and continue to go up in many areas john is in california hey john how are you

i'm great dave how are you guys doing better than we deserve how can we help

well i um give you a little background uh 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

your viewpoint in regards to IRA conversions to Roth.

Just to give you a few numbers, we've got about half a million dollars in liquid mutual funds and bank account,

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

One million of that is already in a Roth

and 3 million is in a traditional IRA.

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

Or just let our traditional IRA grow.

And my concern is that if I just let it grow during our lifetime,

the R D's are going to be six digit numbers.

This is not money we need to live on.

We live with in our means on just fixed income and have been able to

accumulate a lot and not spend anything.

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

viewpoints are about paying

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

or just letting

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

Honestly,

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.

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.

And everything is in Roth.

And the reason that ends up, I did it just because I wanted the tax-free growth.

That's the only reason I did it.

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 a Roth.

Now, the result is exactly what you're facing, and you've analyzed this very well.

You've done a good job.

You have two problems with the traditional that are mammoth.

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.

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

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.

And so that $100,000 comes out.

It's 100% taxable.

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

yeah, that's problem number one, is you're forced into RMDs.

You do not have RMDs, as John knows, on Roth.

And so I don't have any required minimum distributions facing me when I hit 73.

The second problem is that the traditional 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.

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.

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.

Okay?

And you're not touching it.

I'm on the same page.

That's true.

So

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 gonna start working out of this pretty quickly.

Uh I'm gonna use uh a substantial part of that 500k in mutual funds and uh after-tax investments over there and I'm gonna use that and move as much of the three million as I can this year

Right.

And then I'm going to

as much as I you know, and then I'm gonna use the three million what's left, I'm gonna pay taxes out of it as I do it each year.

And it's gonna be a lesser amount when the smoke clears because of the stinking taxes.

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.

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.

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

by the time you hit RMDs, it's going to be $6 million.

It will have doubled.

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

statistically.

Okay?

So

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

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

in terms of dollars.

So it sucks right now, but it's going to triple suck later.

I would do it.

Yeah,

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

$70,000.

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

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

It's just a matter when you're going to do 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.

And so you're going to get

like the last caller changing the family tree and the next generation.

You already have changed your family tree, by the way.

You guys have done great.

I assume you started with nothing.

Yeah, we're everyday millionaires, long-time listeners, first-time caller for you.

But my wife's a retired teacher and I'm a retired CPA.

I love it.

We've been doing this for a while.

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

I haven't heard anything.

Yeah, you did it.

You did it.

You did.

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.

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 the four of 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.

Is there a limit for how much you can convert per year?

Nope, you just gotta do it.

You just gotta make sure, but the taxes are

and you're he's got so much, he's gonna have bracket creep anyway, he's gonna max it 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.

Hey, George Camel 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.

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

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.

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?

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.

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.

Hey, Brian, how are you?

I'm good, Dave.

How are you?

Better than than I deserve, sir.

Where do you live?

I live in Martinsburg, West Virginia.

Cool.

Welcome to Nashville.

And how much debt have you paid off, sir?

About $44,000.

Cool.

How long did that take?

Two years.

Good for you.

And your range of income during that two years?

It went from $80,000 to approximately $139,000.

Wow.

What do you do for a living?

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

Wow.

Okay, cool.

In Martinsburg, West Virginia.

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

Okay, nice.

Yeah, okay, gotcha.

All right.

Very cool.

It's a pretty area, too.

It's very nice.

Love it.

Very cool.

So, what kind of debt was the 44K?

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

Good for you.

How old are you?

I am going to be 37 on Saturday.

Good for you.

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?

Well,

about three years ago, I closed on a house.

I basically drained my savings account,

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

And that really acted as a forcing function because

as soon as I closed on the house, I was renting it out to someone.

They ended up not paying the rent,

being laid on the rent very consistently.

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.

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

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.

Very cool.

Very cool.

That's neat.

So you got everything you needed to know just off of YouTube binging.

Well, Spotify binging, but Spotify sexually.

Excuse me, wrong ass.

Same thing.

Yeah.

Binging, nevertheless, yeah.

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

Just straight up

Spotify.

I like it.

Good for you.

That's awesome.

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.

Right.

Well, really, it 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.

You know, maybe you got to go with a

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,

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

pennies that you're throwing into the ether

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

So

it's amazing how much that all adds up.

Absolutely.

Yeah.

I mean, it adds up to 44,000 in two years.

I mean,

absolutely.

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.

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 my credit cards and my student loans.

And that was just

what I did.

That was 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.

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

Exactly.

How long?

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.

Yeah.

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,

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 going to work.

You know?

Yeah.

And I'm going to 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.

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,

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

Yeah.

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

Or, you know,

hey, you want to go on this vacation?

or you know um

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 so just saying no to all that um and and saying no to like some of the flashy stuff in 21st century america was yeah you know it was just tough to like you know, stay the course and stay tough.

But it got easier over time.

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

Yeah, more normal.

Yeah.

You're used to it.

Yeah.

Exactly.

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.

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.

Very cool.

I couldn't be more thankful.

I mean, you guys have changed my life, seriously.

You changed your life.

We just fucking proud of you, man.

Proud of you.

Congratulations.

Congratulations.

Thank you.

Were there people in your life cheering you on during during it?

Did people know what you were doing, or did you kind of keep it on the down low?

I was kind of selective about who I told.

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.

You know,

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.

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.

Like this has to be my focus because I was just so sick and tired of doing things the old way.

Like, you know, the quality of life that I have right now, just what, two months after paying off all my debt, like it's immeasurably better than it was before I paid off all my debt.

Amen.

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?

It's a huge weight off my back.

I mean, 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,

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, kind of bought him as a gift after I got out of this debt.

Exactly,

roommate exchange.

Yeah, exactly.

I was able to drop one of my freelance clients.

I do some writing on the side.

You know, so now I've got like just the one freelance client, live with my cat, you know, just live

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.

And, you know, the Ramsey Way just like really helped me focus on like what's important and how to live a more fulfilling life.

So praise God, man.

I'm proud of you.

Yeah.

Awesome.

Very, very well done.

Very well done.

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.

Definitely.

My dad's an accountant, so he's definitely proud of you.

Sure, yeah, sure.

Yeah,

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.

Let's hear a debt-free scream.

Three, two, one.

I'm debt-free.

Yeah.

Yeah.

You know, Rachel, when

a young single guy like that does this stuff,

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.

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.

But he dialed it in, went for it, went straight down the line.

Boom, boom, boom.

Well, it's just no crap.

He's just like, just gonna do it.

Two years, be done.

Just matter of fact.

Just do it.

Just matter of fact.

That's how it works.

So great.

Well done, sir.

Well done.

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.

benjamin franklin said the constitution only gives people the right to pursue happiness you have to catch it yourself ethan is in texas hey ethan what's up

how you doing dave better than i deserve how can i help

so i'm 23 and i'm working as a security officer in the oil field making about 874 a week after tax

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.

I actually work pretty far outside of town, have to drive.

And, you know, most I can make back there is $15, $16 an hour.

But I'm not really content with

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.

And

that's a great promotion.

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 paid $874, but if I go be a supervisor, they cut it dramatically.

But I'm making pretty good money, you know, for someone my age, I think.

And

I just struggle with saving it.

You know,

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 in your snowball month.

How much is your car payment?

My car payment, I actually own my car, it's old Lincoln my grandfather gave me, but it I have to make a lot of repairs on it.

You know, just this month, I probably spent 2,000 buying parts.

Okay, did you say you had housing furnished?

Yes, my uncle has been gracious enough to let me come up here and live with him.

So I have pretty much his e-real bills besides gas, car insurance, and my phone.

Okay.

All right.

So the problem is you're not telling your money what to go, where to go.

Instead, you're wondering where it went.

Yeah, pretty much.

Yeah, so being able to control, because it's probably, what, around three grand-ish a month?

Yeah, just about $3,000.

Is what you're bringing home before

taxes.

Yes, after tax, after I pay everything, it's $3,096.

Okay.

After I pay everything, I have to.

Okay, when you say pay everything you have to, meaning your phone, insurance, all of that.

Yes,

everything that I'd need to

exist.

Yeah, so the remaining Ethan is, again, you just need a pretty detailed budget to know exactly where that money is going to go and what it's going to do.

How much credit card debt do you have left to pay off?

That's another issue is I've paid it off everything I can find, but a lot of it's been sold off to collection agencies.

And

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 4,000 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 pulled your credit report?

Do you know what's outstanding?

No, I haven't.

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.

You could probably settle them for what you originally owed real easily.

Yeah, I've done that several times with the ones I've had.

Good.

I think I sold one of those 3,000 down to, I think, 800.

So that's working out for me.

Yeah, so you know how to do that.

That's good.

Okay, so basically,

unless you're giving a lot of money away, you're spending a lot of money on food.

I mean, on fun.

Well,

I have a habit to buy and sell guitars.

You know, I buy them a lot.

You know, I'm $1,000 here.

Usually I make a profit, but sometimes I 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.

And then, yeah, food as well.

I think we found the hole in the bucket.

Yeah.

How many guitars do you currently have right now that you're wanting to sell?

Right now that I'm selling, I have six.

Okay.

So that'll help.

Did you say guitars or cars?

Guitars.

Guitars.

Oh.

Music.

I'm a player, so I buy, sell, fix them up and flip them.

It's just they're hard to get rid of sometimes.

Yeah.

That's the hole in the bucket, okay?

Because you're losing more money than you're making on that, and that's eating up what would have been savings.

Because you're not paying attention to it.

You're paying attention to the guitar, but not the business of flipping.

So

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.

And you need to make a profit

every time

okay and otherwise you got to quit screwing with this because it's just become an expensive hobby

and you know guitars are fine there's nothing wrong with them not evil but they're not an investment so it's just a it's a small business idea as it is right now you with me are you there

yes i am i was just listening okay yeah i i mean

you've identified where the money's going because you got three thousand dollars a month you can't account for and we just found it i think it's leaning against the wall

Yeah, it's definitely been an issue that I've noticed.

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.

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.

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.

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.

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.

You probably got $4,000 worth of guitars laying there to sell.

So, yeah.

Yeah.

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.

That's not killing you.

But this exercise of not being intentional and treating it like a business and paying close attention attention to every dollar.

That's what's eating your lunch.

Eric is with us in Chicago.

Hi, Eric.

How are you?

Hi, Dave.

Thanks for having me on.

Sure.

What's up?

So, my father passed away this year, and he left my mother and I with

a substantial amount of money.

So he left us with $12 million.

I received $4.1 million in cash, and the rest went to my mother.

Wow.

Currently, that money, my money, 4.1 million, is sitting in a money market account, which is making 4.59%

interest.

So I'm making about $14 to $16K a month off of interest with that.

And my question is, I want to buy a house, and

I don't know how much I should spend on a house.

What do you make of your

well, right now?

I'm not working.

Why?

I have a hard time with work.

It's hard for me to keep a job.

I have ADHD.

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.

How old are you not?

I'm 38.

Okay.

Yeah.

So I have that.

So right now, you know, it's just the income I'm getting is just from the money market.

And then,

you know, so I want to buy that house.

And I don't know how to do it.

If this money allows you to not deal with your ADHD and your career career issues as a result, this money has become a curse, not a blessing.

You have got to deal with those things for your own sake and for your own dignity.

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.

Yeah.

So I would prefer you pretend like this money doesn't exist and go earn a living, sir.

For your sake.

I think you'll feel better about it.

I want to know how I shouldn't.

The thing is, I also want to know how I should invest this money.

Because this money is going to be a good thing.

You just drove right past that, didn't you?

You don't have any intention of doing what I just said, do you?

No, I do.

I just want to invest it as well so I can make money off of it also.

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

you're in Chicago.

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.

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 need some medication.

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.

You'll be more fun.

That puts us 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.

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.

This is going to be everything you love about the Ramsey Show, except you get to be a part of it.

Part of what, George?

The Ramsey Show Live.

Okay.

That's what I'm telling them about.

Ramsey Show Live in here?

Nope, we're doing it on the road.

You're going to Chicago with me and Rachel Cruz September 30th.

Are you free?

The windy city.

I like it that time of year.

You know what else I like, George?

I like the deep dish.

Oh, okay.

Maybe we'll have some deep dish.

You mind if I finish the promo?

Is that okay with me?

Okay.

Okay.

Appreciate that.

Questions and answers, real conversations, and I'm sure a few surprises here and there.

George, are you in here talking about TRS Live?

I am, Jade.

I'm trying to talk about it.

Nice.

So that means it's actually happening, right?

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.

John Deloney and I October 2nd.

Yes.

Okay, great.

I'm going to go pack now.

Please, please do that.

Go pack.

Hey, George, speaking of packing, is this like sweater weather or is it not that cold yet in Chicago?

What is happening?

Can I please just get to how they buy the tickets?

Geez, I thought it was a good question.

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.

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?

I just go where they tell me, man.

Hey, have you been there the entire time?

Maybe.

Okay, and also, are you reading a children's book?

I'm expanding my mind, George.

That's how we got those PhDs.

Yeah, that's probably where you got that jacket.

Okay.

see you on the road, John.