If You Want To Do Great Things You Need To Do Hard Things First

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Normal is baroque, and common sense is weird.

So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio.

This is the Ramsey Show.

So excited to have have you with us, triple 8-825-5225 is the phone number to jump in.

Triple 8-825-5225 alongside the fabulous, the incomparable Jade Warshaw.

I am

Ken Coleman.

Just happy to be in her presence, folks.

It's going to be good.

Fresh off of Orlando.

We might talk a little bit about that.

We'll see.

Orlando, I can't speak now.

And Chicago.

Shy town.

A couple live events.

So much fun.

We are feeling the juice from those two great crowds.

Jessica is up in Arkansas.

Jessica, how can we help today?

Hi, good morning or good afternoon.

I'm sitting at just a tad bit under a million dollars in debt.

Almost 200 of that is unsecured.

And we were contemplating bankruptcy, but my face tells me that I should be paying all this, and I know I should.

And I'm just, I guess I'm trying to see if there's a light at the end of the tunnel for us.

There's always hope.

Why don't you lay it out for us?

Give us the whole $1 million in debt.

What is that?

So $210 is unsecured personal loans.

83

of that 210 is credit cards.

The house is $658.

Okay.

And then there's two vehicles that

there's two vehicles in there.

One's almost paid off, and then the other one is very, very upside down.

Tell us the amounts, the first and the second.

One is we owe $12,000 on it, and the other one is $59,000.

Ooh, and how much do you know off the top of your head what that $59,000 one is worth?

$35,000.

Girlfriend.

Okay.

How much do you guys earn?

It's you and your husband?

Yes, and he is in a job transition.

So

we were making over $300,000.

Now we're sitting at about $259,000 a year.

Okay, good.

That's, listen, there's your light at the end of the tunnel right there.

Is if you had told me that your shovel was $60,000 or $70,000, I'd be really hurting with you.

But the good news is you have a really great shovel,

$259,000, and you said

that's with or without the job loss?

That's with the job loss.

And his pay job is going to be commission only.

So we haven't, we don't know what that's going to look like yet.

It could be amazing.

So you make

$2.59.

We have some retirement funds in there

from military.

And

how much of that is the military?

Like, how much of that is your income and how much of that is like pension type stuff?

About half.

Okay, good.

That is really, really, really, really, really good news.

Tell me about the $210,000.

Was this a business loan?

What was that money for?

It was a little bit of everything, honestly.

It was

some bad business endeavors, me trying to be a serial entrepreneur.

It was some bad financial decisions, just in general.

Imposter syndrome.

I

took a fantastic career opportunity and I just kind of shopped my way through the imposter syndrome until I got to therapy.

Okay.

And

so that was some bad financial decisions there, luxury shopping.

And then I took over, I took out two personal loans to clear my husband's credit card debt

as well.

So that's what all that is.

This is like classic mo money mo problems, right?

This is you had a big income and so you could afford to make bigger mistakes, right?

But But really, when we boil it down, Ken, this ratio-wise, it's the same call we always hear, right?

So, that's the good news is, you know, you've got $260,000 in income right now.

It's going to go up exponentially.

And you got, you know, I'm not counting the mortgage debt because when we're in baby step two, which is the step where you're paying off all the consumer debt, we really don't count the mortgage.

So, can you tell me how much your monthly mortgage payment is so I can see what percentage of your life it is?

39.38.

Okay, and so that's going to be fine with what you're bringing home.

So that the mortgage is not the problem.

And I just wanted to explain that to you.

It's no more than 25% of your take-home.

So that's not the issue.

The problem is you feel overwhelmed because no matter how you slice it, if you tell somebody you have $300,000 of debt, that's a lot, right?

Yeah.

Are you familiar with our debt snowball?

Yes, I actually did it probably about 20 years ago.

And the only debt I carried up until three years ago was a mortgage and a car payment

and I would usually pay the car payment you know double or whatever yeah well are you okay we get that but let's talk about the now because your question is is there a light at the end of the tunnel the answer is yes if you're willing to look for it and so are you done now

are you done is this the last time you're ever going to do this

oh for sure okay so I can't do this again okay so

In this situation, my take is I would try to get massive momentum, you know, and Jade can speak to this.

I'm going to give it back to her quickly because she and Sam paid off $500,000 in debt.

So you got the perfect person to talk to today.

But here's my only thing that I would say, and I'll hand the baton back to you, Jade.

I think they need a momentum play, like a big one.

And so I would be attacking.

I would try to get rid of the $59,000 car payment.

Instantly.

Like, even if they go upside down, you can tell her how we do it.

But I just think there needs to be a dramatic

move.

I don't know what your take is, having done this this yourself.

No, I agree with Ken 100%.

You do.

You need to do something that's going to shake you emotionally.

That's going to shake you financially.

That's going to almost like, it's like the gun going off of the race.

Right.

And I agree with Ken.

You guys need to pull together.

And I mean, with your income in a couple of short months, pull together that 24,000 that you're upside down on this vehicle and get out of it.

And,

you know, drive the $12,000 vehicle for a while, figure out a plan to save up another, another, you know, couple thousand dollars to get you a beater.

And here's the thing, I'm going to be 100% straight with you.

You're used to making a lot of money.

When you get a beater, it's going to mess with your ego big time.

Because in your mind, you're going to go, wait a minute, I work too hard to be driving a car like this.

Wait a minute, nobody at my work drives a car like this or nobody in my social circle, right?

Because you start hanging out with who you earn money with, right?

And so you're going to be the one, and it is going to create questions.

And it's your choice whether you answer those questions but I'm just letting you know right now just because that's gonna happen and there's gonna be an incongruency for a while with the how hard I'm working and how much money I'm earning versus the lifestyle I'm living and I'm telling you that as a person who did that for quite a while and that's gonna be so good for your soul because that's what's gonna cause you never to do this again.

You're gonna go, oh my gosh,

I never want to feel that again.

Seriously.

I think it's right.

And, you know, not trying to steal too much of your story, but I mean, Sam and I were hanging out last night, Jay Tussa, and he reminded me you guys had one car for a long time.

We didn't get a second car until a year into working here.

Yeah, but that was just because you adjusted to it.

I did.

But during the massive debt payoff, you guys were one car family.

So

you said it, Kim.

We got used to it.

That's right.

You did fine.

You get used to anything.

Right, right.

You could be making multiple six figures and get used to it, whatever lifestyle you create.

Yeah.

That's hilarious hilarious to me that you were here for a year before you got wheels.

And even still, I was a little reluctant.

I was like, We don't need it.

Now, get me that, get me that G-Wagon.

I'm ready, Ken.

Come on.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all.

I don't understand this, John.

Why don't people want to take care of their family?

They think they're going to die or something.

Well, I used to be one of those guys, I didn't even think about it.

And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids.

And I immediately went and got term life insurance.

That's a gut punch.

And oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse.

They've lost somebody important to them.

Me too.

They don't know what to do next.

Me too.

I mean, you're going to have a crisis here.

And, you know, you got two options while you're sitting and talking to a young widow.

She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow.

That's exactly.

These are the two options.

And term your dadgum family, man.

Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad.

Yeah.

To just miss you.

That's exactly what it's supposed to be.

It's saying I love you to your family.

Term life insurance.

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

All right, April is up next in Ohio.

April, how can we help you today?

Hi, guys.

Thanks for taking my call.

So, I am recently divorced, 44 years old.

I make $50,000 a year.

I have one debt, and it's a car, and I owe $29,000 on it.

And I have to decide whether I want to keep the car, sell the car, pay the car off, or what to do with the bag-on-car because I want to be completely out of debt.

And I want to eventually buy a house.

Tell us how much the car is worth right now on the open market.

About $23,000, probably.

So upside down, six.

Do you have any cash?

I have $57,000 in the bank.

Oh, this is a...

That's the only debt?

Yeah, sorry.

Is that the only debt you have?

It is the only debt I have yet.

Okay, go ahead, Jade.

Yeah, okay.

In the infamous words of Ken Coleman, this is what I call a nothing burger.

Oh, which means there's no problem here.

That's right.

You can decide today to just pay it off.

You've got the money.

Right.

Why are you not doing that?

What's stopping you?

Well, because

I'm trying to make sure I have enough money for a down payment on a house.

Gotcha.

And so the Jeep is currently my ex-husband's name, so I have to either refinance my name, pay it off, get it titled to my name, or I thought about, you know, living like no one else so I can live like no one else and selling the daggone thing and driving the junker for a little while.

But, I mean, I don't really want to do that because my car is reliable.

It's only got 50,000 miles on it.

Like, it's a good vehicle.

It's not really the vehicle I wanted when I purchased it, but

it's a good vehicle.

It's in his name?

It's in his name, yeah.

Well, either way, yeah, either way, you've got to, if it's going to be your car, you've got to move it to your name and make sure that you're the one who gets

the title and everything like that.

You don't have to eat up most of the 57.

I get what you're saying.

So, you said you're upside down 6K.

So, if you sell it for 23, okay, and then we take the six out of the 57, that leaves us with 51, and we're whole on the car.

And then I'm telling you right now, like, this is the spiritual gift that I have that nobody knows except for James Childs.

He can attest to this.

I can find you a car right now for 10 grand that is extremely functional.

It's not an absolute piece of crap on wheels, and it will get you through it.

And let's say now you're down to 41,000.

You're debt-free.

You've got a serviceable car, more than enough in the emergency fund, Jade, to fix the $10,000 car.

I mean, you could go $12,000 and get a very serviceable car.

And now you're debt-free, emergency fund, and now on to baby step 3B, which is saving for the house.

Unless I'm missing something,

there's no reason for you to hold on to this money because we're not telling you to go empty it or even cut it in half.

Right.

Right.

So you think your advice then would be to sell the Jeep, buy something cheaper,

and just take the $6,000 loss instead of paying it off completely?

Oh, I thought the $6,000 is paying it off completely.

You're going to sell it for $23,000.

Mm-hmm.

Well, I mean, to keep it.

I mean,

your advice is to sell it instead of keep it.

I would, personally.

I would.

Oh, okay.

Because it's attached to him.

I'll explain my reason.

Okay.

There's no right or wrong on this, is what I'm guessing you're going to say.

Yeah.

You can keep it and pay it off.

Like, to Jade's point, you could pay the entire 29 down today out of the 57.

Now you got yourself a car that you're used to, and yada, yada, yada.

Well, the only reason I wouldn't do that is because, yeah, Ken is right.

It's too much of your take-home pay.

Like, it's too much of your pay.

It's more than 50%.

And you probably would not have bought this car if you were just you, right?

You would have bought something more.

And my advice was based on helping you save for the house.

So I gave you the advice to spend the least amount of money, but still be moving forward in your life.

Gotcha.

You tracking with me?

So you sell it.

You get $23 for it.

You're going to come out of pocket $6 to take care of the loan.

Now, now

you just got a bunch of money back.

What's that car payment every month?

$5.63.

Girl,

that's like almost eight grand a month.

I mean, a year we just saved you.

Now, now,

okay, you go buy a $10,000 car

and you're still left with $47,000 the way I added it up earlier.

And so you've still got a real nice

case of momentum here because you're coming out of the divorce.

We got rid of a car with your ex's name on it.

Mm-hmm.

It's too much car for you.

All the things.

So that's why I gave you that plan because that is what I would do if I were you.

That's what I would do.

And it's going to feel good getting your own, I almost said set of wheels.

And then that felt very retro.

You're going to feel good getting your own wheels.

That's because she hangs out with me.

That's me.

That's my old influence on you.

That's

your own whip.

You're going to feel good in your own whip.

That's not it either.

Yes, exactly.

You know what I mean?

Okay, awesome, though.

That helps so much.

I thought that's what you guys would say, but I wanted to just make sure because I was literally going to call and just pay that off today.

And then I'm like, do I really want to do that, though?

Do I really want this car?

Think about it.

See, here's the thing.

We get rid of a car attached to a chapter of your life that's over.

That's not the single reason for this, but it's a good reason.

And it's all about momentum.

Many times our advice is about momentum.

Getting that.

And boy, just getting rid of that $560 car payment.

That's a lot.

That's going to feel great.

Getting rid of that other car.

And now you go get your own thing and you go, I'm sacrificing on a $10,000 car because I want my own house.

I like it.

I own the prize.

And so if I am sacrificing Jade in the short term

to see that it's going to give me a absolutely legitimate shot at the long term that I desire, man, that feels good.

I'm in.

You don't have to talk me into that kind of a sacrifice.

And the other thing is, is I like to say this, and I get too excited about this, I know, but I can't begin to tell you how many decent cars there are out there for $10,012,000, $15,000.

And most Americans are just, they think they're above it.

Yeah, I don't understand.

I mean, I get it.

I get it.

It's a status symbol, right?

I totally understand.

But I've said it before.

I'll say it again, Ken.

You get in the car and

Yeah, you ride to work, but it's sitting outside.

And most of us, let's be honest, most people in America, America, if you have a garage, it's filled up with junk.

And you let that beautiful Mercedes or that beautiful Acura or whatever you drive sit outside, get in the rain, get in the snow.

And then when you go to work, it sits in the parking lot.

Yeah.

And no one is walking in the parking lot going, oh, I wonder if that's Bob's sedan, right?

No one cares.

Nobody cares.

And I'll tell you this: a couple things.

And Jay can back me up on this.

She knows what I drive.

It would surprise a lot of people what I drive.

I drive an older used car.

It's a fabulous little Mercedes.

It looks fantastic, looks better, looks newer than it is.

But I'll tell you this: nobody, and I mean nobody,

pulls up next to me at the stoplight and goes, Oh, ha, I got that Ken Coleman over there.

I'm not sure why he's driving that late model.

Nobody cares.

Nobody even notices me on the interstate, right?

So, you know, I choose to do that because I've got higher priorities.

Yeah, I

my money, my money is in other places, and you know, I do.

And so, you know, for me, it has always been functionality over status when it comes to a car.

Now, there's a day coming.

Oh, it's coming.

When I get all the kids off the payroll.

G-Wagon.

Oh, man.

Yeah.

They see me rolling.

I'm going to have a car with a trumpet on it just so everybody knows I'm coming.

Not a horn.

Like a,

yeah, like, oh, here comes Coleman.

He wants everybody to know that his kids are out of the house.

It's going to be like a, it's going to be like a.

By the way, at the Ramsey Show Live,

I learned a new term.

Hit me.

I didn't know there was such a thing as a push present.

I'm wearing mine right now.

Well, it's ridiculous.

What made you transition to that?

Because I'm going to have

a empty nest present for myself.

When I get the kids off the payroll, James.

You going in?

Daddy is going to go buy himself a really fun toy and just say, it's mine because I've taken care of everybody else forever.

Thank you, ma'am.

There's a lady out there who's given me a really solid head nod.

I like that.

You get a retirement present.

You get a present when you have babies.

Some people get a present when they graduate.

It's an empty nest present.

Stacey is such a lucky lady.

Touche, sir.

That's true.

Touche.

She'll get something too.

Yeah.

What are we talking?

I don't know.

I'm making it up on the spot.

I don't want to commit.

It's expensive.

It's going to be expensive.

Hey, side note, though, I think we should have a spin-off show where you people call in and you find them used cars live on the air and then send them like i would love to do that i'd love to be your used car

ken's cars i like this got a nice little ring to it all right we'll talk about it we'll see what happens folks stay tuned for that wildly popular segment

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Kevin is now joining us in Miami, Florida.

Kevin, how can we help today?

Well, hi.

I was just calling because I recently graduated from grad school and I

have some loans and debt, I guess you can say.

So I'm kind of transitioning in life from being like a student basically and joining the workforce.

So I just wanted some advice and like some wisdom, I guess, you can, I can take with me as I start this new stage of life.

Okay,

how much debt do you have?

So it's me and my wife, which my wife is still in grad school.

She's in her currently her second year of grad school.

And it's, I have a total of 180,000 and 140 of it is from my student loans.

And then 15,000 is from her student loans.

And then we have a total of 16,000 in credit card.

Do you have a job?

The name is

so it took me a while to get licensed in my state.

So I just got approved to be working in my state.

Licensed to do what?

Pharmacy.

Okay, so I appreciate that you're licensed now.

Do you have a job?

Yeah, I just got a job yesterday.

Oh, congratulations.

Yeah.

So I started that job in two weeks.

Do me a favor.

Do me a favor.

Can you adjust your phone?

I feel like you've got a sock over your phone.

Oh, can you hear me better now?

It's a little bit better.

Sorry, I'm really struggling.

My ADHD is like flaring.

How much are you going to make as a pharmacist?

So the job I have is it's not full-time or part-time.

It's basically as needed

for them.

So the hours aren't guaranteed.

So I'll be making $71 an hour.

$71 an hour.

Do you have any sense on how many hours you're going to get?

Because I don't like the way this sounds for a guy who's got all this debt.

Yeah.

Honestly, Sam, but I've been applying to all these places, and this is basically the only one that really got back to me.

Right.

But you understand, like, that's not a great deal.

You don't even know how many hours you're going to be working two weeks from now.

Yeah.

I mean,

during the training period, I'll be getting

10 trainings

training days, I guess you could say.

So I'll for sure have that.

And then after that, sh how it was explained to me, there's some weeks I'm going to be making doing like twenty hours in a week, and then there's some weeks I'm going to be doing like 40 hours in a week.

So okay.

So you understand, though, that you've got to be more resourceful right now.

That means you're working at a coffee shop.

You're working two, three, four jobs right now.

Yeah.

Wild.

How, by the way, looking for a better pharmacist gig

because this is going to eat you alive.

What is your total monthly bills when it comes to just these loans, all this stuff combined?

So the loans are still in grace right now, and I don't size the repayment of it till,

I guess, December.

Okay.

So that's not long.

Yeah.

Brother, December is

around the corner.

Okay.

Exactly.

So that's one of the reasons I'm calling because it's just like

income, my friend.

Listen, our debt snowball plan.

I bring Jade in on this, but I'll just say this.

Income, income, income is your issue right now.

You got a wife who's in grad school.

I don't know how much she can work with the grad school load.

So I'm being realistic there.

I don't know what she can do.

So if she can't do much or anything, I mean, you're the one that's got to be working.

And when I said two, three, and four jobs, I wasn't just saying it, you know, to hear myself think and talk.

You've got to bring in income because December is coming quickly and it's going to be a rude awakening.

And so it's the debt snowball plan.

Jade will walk you through it step by step what you have to do right now.

Yeah, there's two, there's two things at play here.

And Ken said the first one, you need money.

Like you got to have money coming in.

And then the second thing, sure, you can tighten up your spending and tighten up your budget and those sorts of things.

By the way, we'll make sure that we give you a budget.

We'll give you every dollar before you get off this call because you need it.

But that is the equation.

You guys have a hole here, and you dug the hole, and now you have to do the work to get out of it.

There's not really an easy button here.

I wish there was.

If there was, I would slide it your way, but there's not.

So it is what Ken said, which is probably wasn't what you planned, right?

We all plan, I'm just going to get a great job right away, and I'll just be able to get out of it.

But

that's not the reality here.

And a part of this, I would say,

of the equation, I would say 80% of you doing this this is just accepting that this is what must be done.

And if you can do that, then you can go about the business of actually doing the actions.

So, part of it is saying, Hey, if I want to get where I want to go, there's part of this I just have to accept.

It's like

running a marathon, Ken.

Yeah, oh, when Sam and I ran our first marathon, it's like in your head, you go, I know I want to do this.

This race seems good.

I'll feel great when it's all over.

I want to accomplish this.

And then, when you start the training, you're like, oh, wait a minute.

This is

every day, and it gets progressively harder.

And what if I get injured and my body hurts?

And all these things.

And half the battle of running a marathon, which in this case, you're dead as the marathon, half the battle is just going, hey, this is what must be true for this amount of time.

And if I just embrace it and do it, the finish line will be there.

That's right.

The finish line is there.

But if you want to cross it with any amount of grace or style or good timing, then you have to embrace the training.

And that's just how it works.

Hard things.

Hard things.

If you want great things, I promise you, you're going to have to endure hard things.

I don't care if it's athletically.

I don't care if it's wanting to start a business and grow it and become self-employed.

I don't care if it's, I want to go into ministry and touch lives and pour my heart out.

You pick any endeavor.

physical, emotional, spiritual, financial endeavor.

If you want to be great or do something significant, forget great.

Sometimes we make great to

like,

you know, oh, it's about great, great, great.

If you want to do something significant, I can tell you, it's on the other side of hard things.

Man.

Can't avoid it.

You know?

You cannot, it's, it's unavoidable.

Yeah.

And it's like, sometimes we like, oh, success and all the things.

And we were helping people with money success, work success, relationship success.

That's what we're about here.

I'm just going to tell you something.

I've been married 27 years.

As James said earlier, God bless Stacey.

I mean, the woman just had to endure some hard things to make it this far.

You know, I mean, it's just, it is what it is.

But there's also, and let's break it down further, because there's the hard things that we want to do.

Like we say, I'm going to go to school and I know that's going to be a challenge.

And I know it's going to, like, there's the hard things we want to do, but there are then the hard things we don't want to do.

And those are part of it.

Oh, yeah.

And I think that's really the main

where it disconnects.

It's like, wait a second, I knew I was going to have to do hard things, but nobody told me I was going to have to do hard things I didn't want to do.

Correct.

Yeah.

It's like all that training and everything, or

I'd rather have been home watching football, elbow deep in some salsa.

You know what I mean?

Yeah.

I mean, that's what I want to do, but nobody wants to be out there pounding the pavement, putting the effort in.

So

back to this situation,

especially young couples or young people coming right out of this.

I got this degree.

It's such a huge accomplishment.

I don't want to in any way downplay it.

And you think, okay, I just did all this work and now what?

Now what is is I got to pay it off?

Or else I'm going to be miserable.

And you can't just go, well, I applied to all these different places.

I got a part-time pharmacy thing.

No.

Okay, I'm in.

Now I got to go get it.

I got my foot in the door, but it's not a great gig.

So now I got to go work four other jobs to be able to take care of my wife and I, who she's in grad school.

Like, this is the reality.

So I wish we again had an easy fix, but we don't.

Work the baby steps and working the baby steps.

It's a simple process, but it is extremely difficult.

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Austin is now joining us in Florida.

Austin, how can we help?

Hey, how are y'all doing?

Well, we're having a blast today.

What's going on with you?

Good, good.

Hey, listen, so I was up at the bank the other day and I was just moving some money around and whatnot.

I've been trying to get out of debt.

I've been doing very good.

Over the last

11 months, I paid off $22,000.

Wow.

Yeah, so I've been trying.

I've got, you know, $8,900 left to go.

I'll be completely debt-free.

And the lady up there at the bank was telling me I need to get a credit card to get my credit score, to have re-occurring payments on my credit.

so I can get a house because I'm looking, you know, in the next two years to get a house.

And I've been working the Ramsey plan and I don't want to go for the credit, but I'm stuck right now because I'm so close to having a good credit score

opposed to having no credit score.

So

I need somebody with a motivation.

You need to talk to Jade.

You need to listen to Jade, not the nice lady at the bank.

The nice lady at the bank has ulterior motives, no matter how sweet and bubbly she was.

And I can just picture her.

She was probably just as sweet as sugar.

And she probably had a lot of credibility because she swayed you a little bit.

She kind of knocked you off balance a touch.

So glad you called today.

And I would like you to never listen to that lady again.

And I'd like you to listen to this lady.

So with no further ado, take it away.

She probably also had a set of assumptions that you would go to that bank to get the loan for your mortgage one time.

I think that's what she was doing.

She thought.

She thought.

Listen, you already know the answer, Austin.

I can hear it in your voice.

But for you, and really more so for the benefit of folks listening, Austin, you know, if you've been hanging out with us for a little while, you know, we teach all the time the credit score is not necessary.

And I'll reiterate that with you again.

I get it.

Society teaches us this from a very young age, right?

We're just bombarded with the message, right?

Never leave home without it, right?

And you're actually scared to leave home without your master card, right?

So I get it.

I like to remind people that the only reason you're hearing that message so much is because there's money on the other end of it, you know, for businesses and for banks.

What we teach is actually just as true.

The truth is, yeah, you can have a great credit score and go buy a house.

That is true.

There's no falsehood to that.

But it's also true and just as true that you can have a zero credit score and go and buy a home.

And America needs to know this, right?

There are companies that do manual underwriting, which say, hey, we're not looking at a credit score.

We're simply looking at how you manage your money.

And that does exist.

So, in that way, having a zero credit score or an indeterminable credit score is the same.

Really, it's better than having a good credit score because it doesn't have the stress and the debt attached to it, right?

And so, that's how that happens.

You pay off all the debt, and in six to eight months, for some people, maybe 12 months, your score rolls to zero, which means we can't find it.

Like I said before, indeterminable.

And when that happens, now is the time.

That's when you can strike, right?

If your score hasn't rolled away yet and it's low, yes, you're going to have a problem.

But once it hits zero, that's the sweet spot of when that happens.

And we would always recommend Churchill Mortgage to you.

They do mortgages in the majority of the United States.

So, yeah, it could take a little due diligence.

You hop on their website, do a little research, get connected with someone and start making your plan.

And all they're going to want to know is what we're all kind of used to.

They're going to want to know your pay stubs, right?

Show us your pay stubs.

They're going to want to know, you know, can you keep the job?

How long have you been at, you know, getting paid?

And if maybe if you're, you know, a small business like Sam and I were, they might want to see your tax returns, your business tax returns.

That's fine.

And then they're going to want to see your trade lines.

Have you been keeping up with your cell phone payment, your utility payment?

And they want to see proof that you've been paying rent.

And that's really important for folks who are living at home.

Make sure there's some paper trail to show, hey, I've been paying rent on time.

Even if it's to your parents, just make sure you're documenting that because that's really all you need.

And then from there, it's basically the same process, Ken.

That's right.

Exactly right.

So this is a myth that she just busted.

And hope you get it, Austin.

Stand strong.

You're going to stand strong and just smile and wave like the penguins from Madagascar.

Smile and wave, boy.

When people hit you with these things, I mean, you know better, don't you?

Yes, sir.

All right.

So you just got a masterclass.

You don't need a credit score, do you, Austin?

No, I do not.

And that's just, I was stuck because I didn't know if I needed it

within the next two years or not.

You know what I'm saying?

That's right.

Another quick question.

Okay.

Another quick question.

You got just a second.

Well, it's got to be fast.

We got other people waiting.

What's going on?

Right.

The next question, my bank, so I don't really want to bank there, but it's the closest one anywhere around where I'm living at.

And the fair winds is probably an hour and a half away from where I'm at.

What can I do with that?

What's causing you to go into the bank bank all the time?

Because I feel like...

So like my rent and everything is cash.

All that's a cash deal right now.

Why?

So to get to get just because where it's at, I'm renting out some property

and we pay the landlord cash.

So we're saving up to get out of debt.

So everything is cash.

I don't know that you have to.

Well, I just.

I don't know why you have to pay cash.

I just, I don't understand that.

Let's talk about that.

So if you're doing cash as some sort of an envelope system to try to just like keep your piles of money separate and manage it better, that usually works better for things that you can easily pay cash for, like groceries or maybe gas or things like that.

But I do find that things like rent or car payments, it is more convenient to pay for them online.

So unless you're receiving like your income as cash and then you would have to deposit it in the bank anyway, but if you're receiving your income as direct deposit, I would recommend keeping it as direct deposit.

That way you can bank at an establishment that you feel good about and do most of it online.

Yeah, and Fairwinch can take great care of you.

I mean, I'd call them.

Call them and go, hey, I live an hour away.

Just let them walk you through it.

But I don't know that you have to do that.

I just personally, I know it's 2025.

I just

cash?

You got a problem with cash, Kim?

I don't have a problem with it, but pain, it just seems really inconvenient.

I mean, when he started off the call, he's like, I was at the bank the other day, and I was moving my money around.

I was like, Did you go see, you know, the mercantile and get your eggs while you were there?

It felt very general store.

Yeah, it felt like I'm not sure this is the best use of our time.

Yeah, that's a good point.

That's a good point.

Now, I do, I will say, if you are on baby step two and you're really trying to be on it, I do love cash for that purpose.

But again, just for like, use it for the grocery

store.

Yeah, for the budget for it.

Rolling up with a wad of cash.

I don't know if I feel good about that.

Yeah, that's nothing fundamentally wrong with it.

No, there's nothing.

Well, his problem is there's no bank.

Right.

And I'd love him to be with fair winds.

Yeah, I would too.

And so, you know, if he's not having to drive to, I can't remember the last time I had to go into the bank.

I try at all costs not to go into the bank.

Yeah, they're never open.

Have you noticed that?

Actually, they are more now than ever.

I feel like.

It used to be like on Saturdays they'd be closed, but now they're open.

On Saturdays?

I think so.

Banks are open on Saturday.

Everybody shuts up.

Sometimes it's like until noon or something.

Yeah.

Yeah.

Listen, I just remember.

I'm I'm just not going to the bank on a Saturday.

I promise you that right now.

There's too much football to be watched, especially this time of year, you know?

No comment.

No comment.

I'm not, you know, I need to get into the football game.

I haven't, let me, yeah, I mean, I can't even tell you.

Yeah.

All right.

Very good.

Anyway, the point is,

that much cash, big transactions, a lot of cash.

I just, you know, I don't know.

I'd be careful.

Rent feels like something you should pay online.

Let's do it like that.

Yeah, and it protects you.

You know, the online, the banking for everyone's credit, you know, there's protections in using online banking, which I like.

Yeah.

You know, and I'll tell you where I do like cash when I'm buying a car for the kids.

Oh, to just slap it on there on the table.

My favorite move is the accordion.

What say you?

I call it the accordion.

I lay it out on the hood of the car that I'm offering.

That is gangster, Ken Coleman.

I think it kind is.

I see all that.

Because you're making an offer, right?

Oh, yeah.

And so they're asking this.

I don't want to pay this.

You just silently put it out there.

You can't fill out the envelope.

And I do this number and I just kind of count it out on the hood, trying under the guise of being accurate, but it's a hidden flex.

Y'all don't know that, Ken.

It's a gee.

I'm telling you, that's how I bought my last kid's car.

Nice old lady, counted it out for me.

Take it or leave it.

What is she going to do?

Oh, lady.

Make you an offer you can refuse.

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Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio alongside Jade Warshaw and Ken Coleman.

Steve is now joining us in Columbia, South Carolina.

Steve, how can we help today?

Yeah, hi, Ken.

Hi, Jay.

It's great to be speaking with you guys today.

Yeah, good to talk to you.

So I've got a,

I'm on the cusp of finalizing a divorce, and we came to a mediated settlement.

And as part of it, basically there's a 50-50 split of the 401k.

But then I also have to come up with 100,000 in cash in 90 days to buy her out of the house.

And then additionally, there's 150K

lump sum alimony payment over five years.

So kind of two questions is basically, how would you guys recommend coming with the 100K?

Because I got some advice from the lawyers that I didn't really appreciate.

And clearly, they weren't part of the Ramsey program.

And

then kind of treat the alimony payment going forward.

Do I treat it as a debt in the baby steps or as like a line item in the budget going forward?

Why don't we address that one first, Jay?

Tell him about where that goes in the budget.

The $150 over five years.

Have you calculated it out and seen what that looks like monthly?

Yes, about $2,500 a month.

Can you afford that?

And it fits.

Yeah.

Okay, good.

So, yeah, that's a line item on the budget.

I would do it that way, especially if you can afford it.

What's your income?

About $180 a year.

Okay, good.

So it ends up being about like $8,000 a month.

Okay.

Okay.

So...

The $100K in 90 days to buy off the house.

Yeah, why'd you agree to that?

So it's definitely the house.

In terms of everything else available in the area,

there's no way I'd be getting anything close to this.

But I'm talking about

the time.

Like,

do you have $100,000?

Yeah, so that's exactly it.

I think it was a matter of kind of signing it and not really paying attention to that 90 days.

I've got about 50 to 55K in cash right now.

Okay, well, that's a good start.

How much is your car worth?

So,

not much.

So, it's a 2007 Subaru Forester.

What happens if

let's come at this thing from another angle?

I'm trying to figure this out for you.

What happens if in 90 days you don't have 100K?

What is the kick in in the contract?

What the agreement?

So it's just part of the court order.

So I think it'd be going back in front of the day.

I think that's your best bet.

This was a bad negotiation on your part or on your lawyer's part because

you can't get the money in 90 days.

And so when this goes back in front of the court you need to have a better plan of what that is um

so why not sell that i was gonna say the same the original well the the original thought was uh uh basically kind of part of the quadro from the rest of the 401k so my half of the 401k use part of it to be able to pay her off that was your plan

that was the that was the original thought and then again uh the the lawyers even suggested doing a home equity loan which i flat out just no

a bad idea.

Because you have to put yourself, you have to reverse engineer, like you have to reverse the situation and say, if I were in any other setting, would I borrow from my 401k to buy a house?

No, you wouldn't.

Would I take out a personal loan, you know, to up the annie on my house?

No, you wouldn't.

And that's the way I'm looking at it.

I think that you either need to give yourself more time.

If this is like something that you're like, I love this house.

I don't want to give it up.

I'm never going to have a house like this again.

You either need to give yourself more time.

I mean, I've talked to people where there's years to come up with the money.

Not that I want you linked to her for that long, but.

Do you have kids?

Adult kids.

So she's in college now.

Okay, so where's your ex going?

She's just going to go rent somewhere?

Starting a new career in another state.

Okay, here's, I'm going to come back to this because now, again, I've never walked through this before, so Jade and I are kind of on the same page.

Well, I'm thinking about you could do maybe a cash out refi.

I don't know if there's because you have to take her name off it anyway.

I would sell the house, and do you have any equity in it at all?

Yeah, and that's basically what I'm buying out of.

How much equity do you have in the home?

About 200K in equity.

So, why wouldn't you?

I mean,

I don't understand given that equity stake that you have.

This is just a house, and it's got a bunch of pain attached to it.

You are single, you got all this money that that you're going to have to pay out over five years.

I personally, and again, I don't know what you think about this.

I view it a little differently.

I know.

I'm giving you another train of thought.

I'm not going to advocate for my point of view.

I'm going to say, if it were me, I'd sell the house.

If

you're not sure exactly what's been going on in my brain.

To sell it?

No, no, no, no.

Just the back and forth.

So there's, yeah, like you said, there's the.

I like a clean start in this situation.

there's there's that but then there's also i mean you did make a good point earlier where you said with the market and when you bought this house you might not be able to get something like that again and i do feel that if emotionally there's not the attachment that

ken and i think there might be and you want to keep the house.

Yeah, standard is you would re-fi, get her name off of it, and then you would pull the cash out when you refi.

And then she would get her portion.

The only reason I kind of disagreed with Ken's sentiment initially is because the 100,000 is her money.

It's not you giving 100,000 of your money.

At this point, now that is her money because you're separate.

So

there's a different way to look at that.

It's like, hey, I'm just, I'm just giving her her money.

I'm not giving away my money, if that makes sense.

Right.

So that's, if you want to do the 90-day deal, that's how you would get it.

But Ken has a good point.

Do you really want to be in this house?

Or is it worth it to you to maybe get less house and have a fresh start?

That's the question.

Only you can answer that.

Yeah.

Or rent for a bit.

I mean, your life's not over.

So.

Yeah, I definitely know that it's starting over, but yep.

Yeah, it's not over.

It's starting over.

And so there's a whole lot of new things coming your way.

So again, I don't want to advocate for it.

That may be too aggressive.

How long were you married?

You know,

20 years.

20 years.

Oh, listen.

Ken may have a point.

The kids?

Do you have kids?

Yeah, remember they've got the.

Oh, that's right.

That's right.

Is it just one?

College.

Yep.

Just one.

Ooh, yeah.

You got your work cut out for you in terms of sentimental thoughts versus fresh start thoughts.

I mean, you make a good impact.

I've been working through those.

I'm not advocating, but I am going to say, because I like when you push back.

So keep pushing on this.

But in your shoes, if you sell this house, then you're able to.

pay her her money

and have that done, set aside, put it away, get it over with.

That's what I would do.

I would want a clean break if I could do it.

And I'm just looking at the numbers.

You're going to have to pay her

$100,000 in 90 days, and then you got $150,000, which is alimony, over five years.

That's a lot of money coming out of your pocket.

It could be nice to have a smaller.

And I'm just saying I might rent for a year, reset my life.

I don't think renting for 12 months is a bad idea for a guy in your shoes.

Get rid of the house, move on into a new chapter of life.

And another, okay, I'm going to throw something else in there.

And this is soon.

So don't, don't be mad at me, but you'll move on at some point and meet another lovely lady.

I'm sorry.

And do you want to bring her into that house or do you want to bring her into, you know, fresh start, Steve?

Yeah, so we'll see about that one, but sure.

I know I jumped ahead, but do you see what I'm saying?

Like, there's

begin with the end in mind is what I'm saying.

Yeah, I don't know.

I don't know why I feel that way, but that's what I i would do in that situation and just start you're not wrong ken start fresh get her the hundred thousand that's her money to your point

and now work on the rest of it oh divorce sucks hate that for you yeah me too

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All right, let's go to Chris who's joining us now in North Carolina.

Chris, how can we help today?

Hey, how you doing?

So, yeah,

I got sick before COVID and I was bedridden for three years and went through a financial problem real bad and

lost my business, had credit card debt go crazy and a couple years later now it's coming back to haunt me I just now was able to start working again literally two months in and I've got

haven't been served yet but they're trying to serve me with judgment I don't have any assets before all this happened I turned my house over to my wife and my

property over to daughter so have no assets to worry about that.

I guess my question is, should I

go through with a bankruptcy before I meet

the

salary, yearly salary requirement to do so?

Or should I not do bankruptcy and wait to see what happens?

Short answer is we're not doing the bankruptcy, but tell me,

give us more context.

What caused you to be sick for three years?

Is that over and done?

Or can that come back?

It's possible.

I had Lyme disease and I didn't know that I had it.

I was undiagnosed.

And then when I got COVID, it dropped my immune system enough to make both of them a problem.

And by the time they found it, it went to my heart, my brain, and

I had to be on a year of treatment.

And I was still just

about two years, I was completely bedridden.

And then it just slowly started getting better.

And your wife, did your wife leave you during that time?

You said you left, but gave her the house.

What does that mean?

No, no, no.

We're not legally married.

So

we're

so luckily for her, she doesn't have to deal with that financial part.

Now, we've been together this whole time.

So you're living with her.

Why did you call her your wife?

Yeah, I'm confused.

What's that?

Why did you call her your wife and then just tell Jay that you're not married?

Well, I guess that what would you call significant other than

the proper terminology?

I just say wife.

Okay,

I'm not trying to get too technical.

I didn't know if if there was another part of the story that we needed to know about.

So, okay, so you're a significant other.

You've been together a long time.

Everything's in her name is what you're saying.

So you literally legally have no assets.

Correct.

Okay.

So you've just gotten back to work.

What are you, what kind of work do you do now and what are you earning?

So

project manager and it's $130,000 a year.

Oh, that's good news.

And how much is the debt?

Definitely.

I think it's like around $70,000, $80,000, something like that.

Okay, so first...

Some is credit card, some is loan.

Okay, so first, your homework from me tonight, anyway, is I want you to go and find out exactly how much you owe.

I want you to have it written down.

This much is credit cards, this much is medical, this much is, you know, personal loan.

So you get a sense of what it is and the amounts.

Because the way we're going to attack this this is what we call the debt snowball, where you list them smallest to largest and you pay minimum payments on everything and you know, put it as part of your monthly budget.

And then, whatever money you have left in margin, which is your extra money, all the extra money goes to the smallest debt.

So, let's say you have a medical bill, and one of them is only, you know, $800.

You could essentially knock that $800 bill out in one shot.

And then, you know, you just keep working through them like that.

So, $130,000, Ken, that's great.

That's a great income.

70,000, I'm going to let you know right now, what you've shown us, aside from the medical part, because that makes this feel very different, but the numbers alone,

I mean, I want you to feel good in this case about being average because this is really just kind of your average debt scenario.

You got $130,000 income, you're paying off 70.

Yeah, you're going to have to live on not very much.

Maybe you live on 80 to make this happen quickly, right?

And the average person is out of debt in about two years, two and a half years.

So that's where you're going to be with this.

And yeah, are you, I got a couple of questions, Chris, but are you tracking with Jade?

Somewhat.

What do you know?

If you live on 80, that frees up 50,000.

And I know taxes and all that, but do you see where I'm getting at?

No, I understand that.

I guess when you talk with, two different attorneys, I'm getting, you know, three different opinions.

I've got bankruptcy attorneys saying, hey, do bankruptcy.

Another bankruptcy telling me, don't do bankruptcy because you have no assets.

North Carolina, it's very rare for them to garnish your wages if they can at all.

So the worst you're going to deal with is judgments that may come back to haunt you.

And then you've got another bankruptcy attorney who says,

why wait until you make that $130,000?

Because North Carolina,

as soon as you hit that $50,000, you can't do Chapter 7.

So why not do it now?

Let me tell you my reason.

My reason is when once you file bankruptcy, you're going to lose, you're you lose control over the situation.

Yes, and now a court says, here's what the judgment is, here's what you have to pay a month, here's what it is, here's what we'll take, you have no assets.

But it, do you see what I'm saying?

You lose control over the situation, and there's a there's an emotional component that's going to go along with that that says that it's basically you signing on the paper that says, I lost control, I'm not fit to handle this by myself.

Here, you guys take it.

That's going to take an emotional toll, not only on you.

Obviously, it's going to decimate your credit.

I'm sure your credit's already bad, but that's going to take seven years to fall off your credit.

So, this is going to haunt you when you can look at the situation and go, actually, there is some agency and some autonomy that you can take over this.

And you get to decide.

You can say, you know what, I made a mess.

And instead of losing your confidence, you can build your confidence up by cleaning it up one debt at a time.

And that does something for you as well.

When you take control of a situation and you clean it up and you make something wrong right, that's building something in you that at this time in your life, you really, really, really need.

Yeah.

Listen, you've been through it.

Amen.

Yes and amen to everything Jade said, Chris.

And I agree with one of the

bankruptcy lawyers that you shouldn't do this for all the reasons she just gave you.

But the thing that I'm concerned about for you, you've had your life turned upside down.

And man, I hate that for you.

Man, I have so much compassion for you.

But I think it, as it would anybody, Chris, it jaded you or it shaded some of your

perceptions about what you should do.

The fact that you are living with a woman that you refer to as your wife and you signed a house over to her that you bought, am I understanding this correctly?

Correct.

Brother,

that needs to change.

Do you want to be with this woman the rest of your life?

Yes or no?

Oh, yeah, absolutely.

Is there a reason why from her that you guys aren't married?

Is it her or is it you?

Well,

religiously, we're married.

We went through all of that.

So, I mean, we're a family, all that.

We just didn't.

What do you mean, what we wanted to do?

You got a marriage license?

What do you mean, religiously, you're married?

So, we went through the ceremony, but we never did a certificate.

So, in North Carolina, technically, we are married.

As far as, you know, North Carolina, when you're living with somebody for seven years, you're leaving marriage.

Common law.

Okay.

Common law.

But as far as

the government and all that.

Oh, no, hold on.

Finish that sentence.

I want to hear this reasoning really quick.

The IRS, the government, finish that.

Yeah, as far as doing a marriage certificate and IRS and all that and taxes, we are, we file separately.

We're separate.

We're not legally married.

Yeah, I get it.

My point is, you signed your house over to somebody, and I don't know where that falls in North Carolina, North Carolina law.

I don't have time to figure that out on this little bit of a call but that needs to get a lot of trust yeah yeah you need to get that that needs to be fixed like a don't file bankruptcy b get the house back in your name if that's even possible i guess no no dude this is not something to chuckle about

i don't think you get

i don't think you get help the concern is what's going on now and this the concern is what's going on now is that you know going at you know you've got credit card and and bank yeah when did you sign sign the house when did you sign

a lien on the house here's what i think you did here's what i think you did and i i i'm not trying to uh make a bad situation worse but i have a sense that you guys capitalized on the fact that you never got the marriage certificate when you saw that it was about to start pouring rain on your situation and i think you transferred that house over to her name i do too and if you keep evading this it is gonna follow you you've got to deal with this dig out trying to move stuff over here and move it over here and do the

Just deal with it.

We've seen people do this, Chris, and you've done all these kind of little maneuvers and you think it's funny.

Hey, you called us, I'm going to tell you something.

What you're doing, there's nothing funny, it's scary.

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All right, today's question comes from Chelsea in Idaho.

She says, my daughter recently graduated college and we will be traveling for the final step of a job interview soon.

She's already passed the first three steps in the process.

Is it ever okay to request your expenses be comped by the company you are applying to?

She estimates the airfare, Uber, hotels, meals, and three days of missed wages

at her current job will run her roughly $1,000.

This would make a huge impact on her monthly budget for a job she doesn't even have yet.

Would it be inappropriate for her to email the company and ask for reimbursement for at least some of these expenses?

Yes, it would be wildly, wildly silly.

Not even inappropriate.

It's ridiculous.

You are guaranteeing she doesn't get the job.

And Chelsea, I'm honored you sent the question to us, but the fact that you're asking us this concerns me.

This is entitlement 101.

You are not entitled to your expenses for

applying to a job.

If your money's tight, it's not that they're fine.

Oh, my goodness gracious.

By the way, this is the world we live in where parents are showing up to job interviews

and then the kids are complaining, mom, it's going to cost me $1,000.

She goes, I'll tell you what, I'll email the Ramsey Show people and see if that's appropriate.

It's not appropriate.

It's called the cost of living.

I'm mildly irritated right now.

Get all the way irritated.

I want to see what happens.

No, I don't want to.

Okay.

God bless you for the question, but no, please don't do that.

And explain to her why.

I'm not sure you know why.

It's not done.

It's unreasonable.

This is you trying to win the job and you're competing against other people and you don't say, hey, this cost me a thousand bucks to travel here to apply.

They're going to go, we don't care and we don't want you here because you're too soft

and you're already causing, you're already drama.

Let me tell you, Ken, one-on-one there you go.

When you're this is just from being in entertainment, when I used to be in entertainment, my agent would say, just show up and do the job.

Don't be drama.

If you're a drama, you could be the best on stage, but if you're a drama, they'll never have you back.

Like, just go.

It could be the worst room ever and go, this is such a nice place.

Thank you for having me.

Like, everything is a graciousness, not, hey, you know, the M ⁇ Ms were a little bit, there were too many red ones in the dish.

Could you, this, that's what this is.

There's, there's too many red M ⁇ Ms in my dish.

And you got it.

When opportunity knocks, Ken, you have to be ready to answer the door.

That's on you.

I just looked in the drawer over here.

I thought maybe there'd be some thumbs.

I got a little indigestion right here on that question.

Right there.

You know what I'm talking about?

People in the lobby.

You know what I'm talking about?

It's going to be a little something there.

Yeah, she got it.

Are you for real?

She got the tums right there.

Lady James, she just reached up with a bottle of tums.

So fantastic.

By the way, I do not endorse them.

It's just a fun joke.

All right.

Jane is up in Washington.

Jane, how can we help today?

Hi.

So about 10 years ago, we took the Financial Peace University.

sold the SUV, got a minivan instead, and worked our way up to step number four.

Life happened, and we're back down at step number two.

With the number of emergencies that we have had in the last seven years,

I want to be stockpiling money.

I want to get that six months of income or of household needs saved up before we tackle the debt that we had to take on a couple years ago.

Okay, well,

let's go ahead and head that idea off.

That's never something that we would recommend, and Jade will walk you through through why, but let's first get a picture of where we are.

So at one point, you were working the baby steps and you got to baby step four.

And now all these emergencies, you're saying the emergencies are responsible for the debt.

And if that's true, how much debt do you have now?

We only have $9,000 in non-mortgage debt right now.

Is that on a credit card?

No, it's a personal line of credit for we had to have the siding replaced.

A storm came through,

damaged both our roof and our siding.

You didn't have insurance?

Hello?

It didn't even occur to me to go through the insurance when we did this four years ago.

The house was livable, but the roof was leaking and the siding was damaged enough on what

I replaced the whole thing.

Are you sure or did somebody make the decision and say we don't want to submit this claim because we don't want our premium premium to go up?

And so we'll just take out debt?

So my husband and I are first-time homeowners.

Neither of our parents ever owned their home.

And

I guess in the discussion years ago when we were having that, maybe it was part of the we didn't want the premiums to go up.

That feels right.

But this was, yeah.

So the $9,000 on a credit card is solely based on, you've mentioned several emergencies.

Yeah, tell us.

so what emergencies are coming up in your life that that have put you in a position where you believed that you had to do nine thousand dollars worth of credit cards

um well we had uh one child who was failure to thrive and for two years i was unable to work taking care of that baby okay

um

we have another child who is special needs So the one who was failure to thrive is doing fine now.

Okay, great.

But we do have one who has some special special needs, and that impacts my ability to work.

So

we went from two incomes to one.

Okay.

What's your household aim?

No credit card.

We're hoping to hit $100,000 next year.

This year,

my husband was laid off this year,

three months out of work.

Okay.

But with his new job, he'll be $100,000 next year, but not this year.

Okay, great.

And are you able to work outside the home?

Not outside the home now.

Okay.

I do some work online and bring home about $6,000 a year.

Okay.

And so, okay, so I want to give Jade I want Jade to answer the core question as to why we would not have you work on Baby Step 3 ahead of Baby Step 2, which is only $9,000.

And I know that may seem like a lot, but in the grand scheme of things, Jade, it's very doable.

Yeah, so I just want to make sure it's just the two kids or are there more?

Just two home now.

Okay, two home.

I think life has hit you with a lot.

And because of that, it's kind of inflated

the feeling of the debt more so than it is.

You mentioned before that, you know, it took seven years.

You know, you've been in this for seven years.

And so I just feel like there's been a lot that's happened that much of it has not much to do with the debt, but it all kind of is conglomerated together in your mind.

Because when I look at this right now, I go, oh, $9,000 of debt, why isn't that gone in two months?

Because if you do the budget, it's...

Our household needs are high enough that

help me understand why, because what it sounds like is help me understand where that is.

Because what I'm hearing is in a generalized situation, rent is usually the highest or mortgage is the highest.

And then the second highest thing, if there's kids, is some form of daycare.

And usually that's, that's those are the two that are kind of causing things to be really tight um because your debt's not the problem the nine thousand dollar debt is not what's breaking you is there something more in the equation that you're not telling us about are there cars is your mortgage a crazy amount of your take-home pay

no so um

food and medicine say oh medicine spend

yeah we have um certain medications you know insurance covers so much uh-huh um but yeah between food and

we're not in any medical debt.

Tell me right quick.

Tell me right quick because we're up against the clock and I'm sorry.

But tell me what you spend in medication and tell me what you spend on your mortgage.

We spend $1,500 a month between food and medicine and $1,200 a month on the mortgage.

Okay, this shouldn't be a problem.

I think that you guys need to get on a really, really tight budget.

I love that you know your numbers, but pay that $9,000 off.

It's going to take you two to three months to do it and then stack up as much money as you want to to keep the big bad wolf away from your door.

Hey, everybody.

You need insurance.

And

nobody really likes digging into insurance, right?

You know, you need it.

George does.

George kind of does.

Outside of George, nobody does.

But we know

it's hard to figure this out.

And that's why we have our Ramsey Trusted Insurance pros.

And you're never going to deal with sleaziness salespeople.

We vetted them.

They're going to coach you up, make sure you get what you need.

And you can find them by going to ramseysolutions.com/slash coverage, ramseysolutions.com slash coverage.

And you can connect with a Ramsey trusted agent, or you can click on the link in our show notes.

All right, Doug is up next in Connecticut.

Doug, how can we help today?

Hey, how are you today?

Good.

How are you, sir?

Excellent, excellent.

Thanks for taking my call.

I got two questions.

The first one's a real simple, quick yes or no, I hope.

Anyway, you know, Dave talks about doing 15%

in retirement after you're completely debt-free besides the house.

That 15%, my company does it a 5% match.

So is that 15%, like 10% that I put in plus the 5% is 15%, or is it 15% and whatever the company matches is added bonus, basically?

Yeah.

Typically, we think of it as whatever the company adds is the added bonus.

And that's just the reasoning for that is if for some reason you went to another job and they didn't have that bonus, you would still be in the rhythm of giving 15% of your income.

Like, that's just a great way to do it.

And since you're debt-free, except the house, like if you wanted to go above 15%, you could.

And I think it's a good idea if you do.

Totally.

Yeah, absolutely.

Okay, so the main question, thank you very much.

Appreciate that.

That answered a lot of questions for me.

So the situation, FPU graduate 13 years ago, I just started listening to the podcast like two months ago and rediscovered Dave and I listen every day.

So love you guys.

Thank you very much.

Downloaded the Every Dollar app literally three weeks ago.

So, my situation is this: I have $23,000 in an emergency fund.

That is my, that's about five months of expenses right there, $280K in retirement, which I recently stopped contributing to.

I have zero credit card debt.

I'm single.

I don't have any kids.

I make about $140,000 to $160,000 a year take home.

I take home about $6,500 to $9,000 a month, depending on the season.

Winters are a little slower.

I do have a mortgage, but I

failed with the car.

I got a car literally a year ago,

financed it.

However, I took a three-year loan on the car, and they were offering 0%.

So I figured, oh, I'm going to beat these guys up because I got 0%, right?

Payment is $1,000 a month,

which is comfortable.

I can get by, but I also get a $600 a month car allowance for more, right?

To go towards basically whatever I want to put in.

So in my head, I'm thinking, yeah, $400 a month out of pocket, no sweat, it's all good.

But like I said, 0%, I currently owe $26,000 on the car.

And with doing the Every Dollar Budget app, I literally last month found an extra $140

of extra income, which I already put towards the car.

So I'm down.

I want to get rid of this car.

I just, with a 0% loan, I can't see how, and a lot of people can't see how it makes sense to take my money that I've been saving up $23,000 for the last, God knows how many years it took me to get there and just throw it at the car.

Why did it take you so long with this great income?

Did you have,

you're single, yes?

Yeah, I have a girlfriend, but yeah, single, yeah.

But why did it take you so long?

Or is this new?

Is this income new?

I mean,

no, this is no, income's not new.

I've been with the company about seven years.

And I'd say the last couple years, I've built my book of business.

So, you know, I'm definitely, you know, the income's been growing year after year.

Okay.

Yeah.

And like I said, I just, I just got, I had it.

I had a car that was paid for before I got into this car, but I'm 45 years old.

I'm 6'3, 250 pounds.

So a nice little car is not doing it anymore.

So I needed something a little bigger.

So I went with the SUV, right?

Wait a minute, wait a minute.

I've heard a lot of reasons for keeping a car.

I think that's good.

I think that's good.

You act like you're an NBA player.

You're not that big.

Yeah, I know.

I think you like, listen, I think you like the fact that you got 0% interest.

I think you like the fact that your job is kicking in the $600 a month.

And you're like, hey, what's the big deal?

It's $400 a month.

It's for three years.

Do I really, Jade, have to, you know, Ken, do I really have to pay this thing off?

And here, here's where I, I'm just going to tell you where I see risk.

Where I see the risk is if you got fired tomorrow, you'd be on the hook for a car loan and you'd be on the hook for the whole thousand dollars.

And I'm always going to tell you to go the path of least beneficial risk.

Like there's times where risk could be beneficial, right?

You, there's a certain amount of risk that you take when you take out a home mortgage, right?

But for you, the benefit outweighs the risk.

In this case,

there's risk there.

Do you really need a, is it going to affect you?

I think it could.

And I think that you could easily pay this thing off and just be like,

you know, give the finger to the whole thing and just say, I don't need a payment at all.

I have money.

Buy, buy Felicia.

And just pay it off.

Yeah.

No, and I agree.

And at the end of the day, like I said, I just did.

just started the every dollar budget.

So I'm sitting there like, if I could literally find an extra three, four, five hundred, and I probably would have found more money, but I had two vacations last month.

So, yeah, at the end of the day, I could easily probably find an extra five, six, seven, eight hundred dollars.

Who knows, you know, at the end of this month and throw it towards the car.

Now, well, let me tell you what I do.

Let me tell you what I would do, Doug.

I would go to my employer and I'd say, you guys are giving me the $600

bonus, which I really appreciate.

I love this money.

It's so helpful for me.

I'm planning on paying off the car.

I did the math and I found out that if you paid me the $600 over the entire length of this car payment, it would amount to X amount of dollars.

Is there a way, since if I prove to you that I paid it off in full, that you'll still give me that money as my stipend?

That's what I would do.

Is that fair, Ken?

You're the.

I'd want to do a little research before I took that proposal to them.

Like, you know, because if they're going to pay it anyway.

Yeah, I just want to.

Go ahead.

Yeah, I'm saying the car allowance is more for like repairs, brakes, auto, because I drive my own car.

I put about 25 to 30,000 miles on the car a year on site sales.

So give it to you anyway.

They give it to me anyway.

Oh, I get it anyway.

Yeah.

If I have no car payment, I'm getting that money for garden.

So, Doug, you called us.

I think we're talking all the way around this thing.

Doug, we're dancing all around this thing.

You called to say,

what?

What was your question, your core question?

Should I empty my high-yield savings account, which is where my emergency fund is, where I'm getting

4%

interest on, and just basically dump it, maybe minus the thousands to keep my emergency fund, you know,

it's like you've listened to this show before the car.

Yes.

Yes, Doug.

How much do you have in your emergency fund?

$23,000.

And how much is to pay off the car in full?

$26,000.

Do it.

Done.

And then you build the emergency fund back up.

You've got a great income and you're single.

Stop the vacations, man.

You're living high on the hog, buddy.

You know, you could build, you could build this.

You're golfing.

Yeah.

Like, I mean, listen, that's the plan.

You empty it out.

You say, if $1,000, so you're going to have $1,000 in there.

You're back to, you don't, you see what I'm saying?

You pay the car off, absolutely, and now you're back to baby step three.

You get the three to six months, and now you can go back to you know your vacation, single guy, and all that.

This should be an easy fix for you, easy fix.

So, I

agree, and uh, it was one of those things where I've been, since I've been listening to you guys, like I said, I rediscovered the baby steps, rediscovered Dave, and I had, I basically went from baby step one to three back to two.

And, you know,

you need to discover yourself without a car payment.

Yeah.

Yeah.

You're playing a financial twister, you know?

Right hand on red, you know, left foot on green.

Uh-huh.

No, we don't have a financial twister plan.

We have the baby step plan, and you just got to follow it.

And here's the good news for you, Doug.

Like, you have the means to do this immediately.

Yeah.

And now you got yourself a paid-for car.

How's that going to feel?

That's a baller.

Yeah, it's going to feel great.

And an unbelievable deal from your company that, like, I would take that $600 a month and stack that

for

any car replacement, anything.

Oh, come on, give him that.

Give him that.

My computer is dead.

I want you to go to ramseysolutions.com.

I want you to look at the investment calculator.

And I want you to plug in, if you take that $600 and you just drop it in your investments for the next 20 years, what that's going to be.

And your mind is going to be blown.

Dougie Doug.

No, 100%.

Yeah.

All right.

I agree.

There you go.

Thank you very much.

Yeah.

Thanks for the call.

Don't overcomplicate it.

You know, I hate to do this, but they're not my steps.

Dave came up with them, so I can refer to them and be kind of obnoxious about it.

But I mean, there's a reason why there's one, and then it leads to two, and then it goes to three.

It's called a system.

I mean,

pretty simple stuff.

But I love that.

I'm going to give Doug, by the way, the Caller of the Day Award for the rationale of being 6'3 about 240.

Is that what he's saying?

I'm like, are you trying to get a date or keep your car?

What's going on?

He's like, I got to get a bigger car because I can't just fold up like an accordion in this sedan.

Looking like the guy is a tight, like he's an NFL titanium.

Come on, man.

On that theory, I should be riding around on a bicycle.

I'm a little guy.

Many of you listen to the Ramsey show because you're sick and tired of getting nowhere with your money.

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Welcome back to the Ramsey Show in the Fair Winds Credit Union Studios.

Alongside Jade Warshaw, I'm Ken Coleman, and we're going to go to Matt, who's joining us now in Fort Worth, Texas.

Matt, how can we help today?

All right, yes, sir.

So, as of this past Monday, I had a truck that I've been paying on for about two years.

I had an auto loan for about $30,000 on it.

I owe about $27,000 or I'm sorry, $23,000 still on it, and the motor blew up.

It's unfortunately just a bad design from General Motors.

They've had issues with this vehicle or these motors

for a substantial amount of years at this point.

And I am now now falling victim to sort of bad design.

It would be about $15,000 to have

the motor replace.

And I'm trying to decide if what's my best option for it before I try to go trade it in and then

be upside down on it.

You owe $23,000?

Yes, sir.

If you get the motor fixed, if we could snap our fingers and it was just fixed today and it was paid off, is this a truck you'd be happy to drive drive for a while?

And could you?

The truck's in great condition.

Other than that, if the motor were to be fixed, there is a company that sells a motor that has the system that caused it to have this issue in the first place deleted.

And that's the option that I went and got quoted from when I talked to a shop.

Do you have the $15,000 in cash?

I do not.

What do you have in cash?

I don't have much.

My girlfriend just finished school, and I was basically the primary provider for about a year and a half with us.

Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa.

How old are you?

About 30 years old.

You're 30.

Okay.

Compliment to you.

You sounded much younger.

You did.

Why are you the primary provider for your girlfriend?

You guys aren't married.

Is she 32?

No, she's a little bit younger than me.

How old is she?

She is

27.

You really don't know how old she is?

You had to think about that?

That's kind of funny to me.

That's a different issue.

That's a whole nother deal.

Different show, different show, but I'm going to go ahead and tell you.

You probably need to be on top of that one.

Okay, you should so you need to come up with 15 grand.

What do you make?

I work in public safety.

So

last year I made about $70,000.

I'm probably on track for about the same this year.

And

if you weren't helping provide for your girlfriend, it's just you, right?

Just rent?

Or do you own a home?

I mean, what's the situation there?

No, it would just be rent and my normal expenses.

And I'm sorry for following up on this.

Is she able to support herself now?

Yes, she's working full-time again.

She just started with the school year.

Jay, I she works as a

an American Sign Language interpreter, and she started interpreting with a school.

Yeah.

All right, Jade, I don't know where you're at on this, but

there's a part of me that goes, because he's already upside down in this, the trade-in option to me is just foolish.

You're just not going to get anything at all.

I'd rather see him working two, three, four jobs and come up with 15 grand to get that truck fixed.

And then

you got to swallow the pill and pay it off.

But if it's a good, if it's, if the truck's in good shape other than this defect,

yeah, that again, I'm giving you the answer on what I would do.

Well, yeah, I mean, if you roll out the numbers, if we if we looked it up and said, What could you get for this with the bad engine?

I mean, what is it?

What would you be your estimate?

Do you have any idea?

Yeah, I've been shopping around with a couple different uh dealerships.

Um, I reached out to GM recently because, or I'm sorry, GMC because they have the highest rebates and stuff right now.

And what they say,

GM would give me $9,000.

Okay.

GMC would give me $9,000.

I mean, because if you think about it like that, and then you add what you would have to kick in to cover the upside down, plus to get another vehicle.

Do you see what I'm saying?

You're still shelling out $15,000.

So that's kind of the numbers on it.

I can't see

why you wouldn't just at this point, I hate it, but yeah, I don't think the numbers are good for you either way.

So it's, do you want to keep the car and pay the 15,000, or do you want to get out of the car and get another beater?

Which I don't think you do.

I think you'd rather drive the more, the nicer car of the two if you can just get the money.

I've tried that.

You can't go into debt for this, I'll tell you that.

Like, if you end up, if you can't find the money and you end up having to go the other route,

you know.

Okay.

If you, because here's the thing: if you do a personal loan to get from upside down, your numbers are going down.

And I can advocate for that, right?

I can advocate for you getting out of debt and then having to get a beater car and taking out a personal loan to do that, right?

What I can't advocate for is you taking out a personal loan to keep a $23,000 car that you were already in debt for.

Does that make sense?

So if you can't come up with the money,

you might be going down in value.

But I'm sitting next to a person who, who

with her husband, they had one car for how many years?

A decade.

So, where there's a will, there's a way.

And what I'm saying is,

figure out a way

to get where you need to get.

And I think you can come up with 15 grand pretty quick, a single guy who's able-bodied.

Now, you might have to stop taking care of your girlfriend.

Oh, no, that's done.

I'm already assuming because she's just your girlfriend.

She's a grown woman.

You got problems.

So taking care of her problems isn't your problem.

You can't.

You can't.

In fact, you guys have been playing house for apparently a long time anyway.

So no date nights, no nothing.

You got to come up with 15 grand stat.

Did we lose you?

No, I'm sorry.

Yeah, it's a bitter pill to swallow.

It is.

But I just think the way Jay broke it down is great.

And that just, again, we're always trying to answer things like, what would we do if you were in your shoes?

If you can get the money without debt, yes, keep the car.

To your point, it's going to be a great car when you get it fixed.

But you can't do debt.

I can't let you take out $15,000 of debt

and put it with a $23,000 debt.

I can't let you do that.

And you should say that to yourself too.

And go back and listen to this call, right?

Don't come off this call and go, oh, I can't get $50,000.

I'm just going to do it.

Marinate on it because when you do, you're going to see, oh, man, man, the last thing I want to do is go from being $23,000 in debt, you know, to being

$45,000 in debt.

That would be terrible.

I agree completely.

Are you stunned?

Yeah, I've tried going that route.

I just haven't been able to

find

a place to be able to do that.

I initially did attempt to contact my bank

to try for a personal loan because, other than the faulty design, I don't have an issue with the truck.

I enjoy the truck.

I've been driving the truck for two years and it's been great.

So, then what do you think your option is?

Because

you're either not getting the car fixed, or you're listening, your other option is take the time, however long it takes you to save up the $15,000.

And in the meantime, you're taking the bus and you're riding your bike and you're getting Ubers and you're calling up Leroy to hit you up for a ride.

Like,

that's your option.

That's what I, that's what I think you got to do.

Yeah,

I don't think he likes that option.

I'm not even sure he heard that.

I went through that painstakingly.

I think it went in one ear and out the other.

Listen, it's not fun, that's why.

It's not fun.

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

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

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

Find what you need at ramseysolutions.com/slash ramseysolutions.com/slash insurance.

All right, folks, you've been paying attention to the news.

You know, the Fed just cut the rates for the first time all year, and the 15-year fixed mortgage rates have dropped to the lowest we've seen in 11 months.

If you're financially ready, now's a great time to buy or sell.

Why?

Some of you are going, Ken, I'd like to play the market.

I'd like to see the rates come down.

Can I just give you a little opinion here, a little off-the-talking points opinion?

Yeah.

Thank you.

Here's what could happen.

If mortgage rates continue to have a slight drop, you're not going to see it, in my opinion, drop back down to the twos.

But if you have a slight drop, here's what's going to happen.

People are going to get back in the market.

And as demand grows, guess what else is going to happen?

House prices go back up.

So for some of you who are going, I'd like to see that rate drop.

I'm playing the rate game.

What you don't understand is as rates drop, housing prices will go back up.

It is supply-demand.

So I'm not pushing you to buy right now, but even though these rates are elevated from where they were several years ago,

I'm telling you, Jade, it's just supply demand and it never fails.

Reminds me of a song.

Ooh.

You're not going to get this one.

How to make it to the top just to see how hard they drop.

Yep, nothing.

No, nothing.

Forrest Frank, no one?

Oh, no.

Okay.

Never mind.

She got it.

There's a lady in the audience that's clapping.

Forrest Frank fan.

I'll be honest with you.

I'm a little embarrassed.

I'm not even sure who that is.

That's okay.

Is that bad, James?

No, it's not bad.

Okay.

James knows everything about music.

They overplay him in the Church Youth Group.

Some kind of overplay.

Yeah.

Oh, it's a Christian artist.

It's a Christian artist.

That's why I said it was a deep cut.

Boy, oh, boy.

Listen, he's doing his thing.

Good for him.

And it was a great analogy for your real estate.

So here's the point.

Now might be the time to buy.

Thank you, Jade.

Folks, I never know any music reference.

It's just, it's terrible.

It was a deep cut, Kim.

Yeah, I like that.

But here's the point I'm making.

Now might be the best time from a home price situation to jump in or to sell.

All right.

So if that's you on either side of that coin, you need a pro to help you.

That's why we have our Ramsey trusted real estate agents that are standing by in locales all across the country.

You can find one for free at ramseysolutions.com slash agents.

That's plural, ramseysolutions.com slash agents.

All right, Julia is up in Bend, Oregon.

Julia, how can we help today?

Hi, I'm honored to speak with you both today.

Good to speak with you.

What's going on?

Thanks.

I have a two-parter for you.

I want to make sure first I'm like budgeting appropriately and putting the right amount towards debt given my income.

And then with some upcoming fertility treatments on the horizon, whether that should be kind of cash flowed or do like a mini stork mode to stockpile some cash.

I like this question

tell us more

okay so let's see debt I just have 12,000 on the credit card it's me and my husband and that's the main thing we're trying to get through

next is a home equity line of credit which based on the amount I'm putting that with our mortgage right okay so luckily it's not very much consumer debt I just feel like

we should be able to pay off more and just things come up every month it seems like that hinder our progress.

What's you guys' income?

We make $144,000 gross and taking home just under $8,000 a month.

And what we've been able to do is rent out some rooms in our house.

And we part of that HELOC was completing an ADU.

Oh, that's going to get some additional income.

So we have about $3,300 coming in.

Now, just as of last month,

in addition to the $8,000?

I think that's going to...

Exactly.

I think that's going to be a big help.

But yeah, that's all kind of new.

Okay.

So what's the fertility treatments costing you?

Are you cash flowing it currently or you haven't started yet?

We've been cash flowing up to this point of it's just been like a five-year journey, unfortunately, and we're finally at the time of like probably needing IVF or something.

Okay.

So

what I'm looking at is my insurance thankfully covers up to $10,000 of assistance there, but I have to meet my deductible of $3,000.

So I'm assuming we're going to need more than that because IVS can obviously cost way more than $10,000.

What's the top end?

My question is, do I,

sorry.

What's the top end?

Like, if you were really running it through, like, what's the most you could spend or that you would spend to put it like that?

I mean, I don't even know because it looks like it varies by state, but it looked like in Oregon, maybe like 10 to 15, hopefully not more than 20.

Okay.

You know, my thought on this is if anybody else called in and said, hey, we're thinking of having a baby and they became pregnant.

Yeah, we would put them in stork mode.

In your case, becoming pregnant

is the cost ahead of time, right?

Like everybody else gets pregnant, then the cost comes.

Your cost comes ahead of time.

So I would still treat it the same way.

I'm not going to tell you to wait to pay off debt to try to get pregnant, but I will say it must be done in cash.

I think that

this is you going in on a bet and you don't want to go into debt on that

because that definitely could add insult to injury.

That's a capable

right of like 3,000.

So I guess that was my question.

Like, do I stack up that three grand so we at least know when we're ready to start, we have that, or just cash flow that as we go, which I think we can do.

If you can cash flow it, I would cash flow it.

If you can do a little of both, I think that's great.

If you can cash flow this fertility and keep paying off the 12,000, I think that's winning.

If you're finding that, hey, we literally don't have enough cash to do both of these.

If you have to put less towards your snowball, that's fine.

If you have to cause it to pause briefly for a couple of months, I think that that's fine too, especially since you said like age-wise, you're getting to the end of this.

I would do, I mean, if I were in your shoes trying to do what you're trying to do, I would do that.

Ken?

Yeah, I agree.

I agree.

Yeah.

I can't add anything to that at all.

And I listen, can I just say on on a personal note, I was listening,

Stacey and I went through your journey and it's really, really tough.

And,

you know, just hang in there.

And these days of uncertainty can really eat away at you.

So certainly understand where you're coming from, but please don't make, and not to say that you're planning to, but don't ever let the emotion drive you to a poor financial decision to put you in a bad spot.

You guys walk through all of that.

And so I just wanted to add that on one little, I can't add anything financial advice,

as hard as it is, I just believe there's a plan and I believe you're gonna be a mama one day.

And that's all I want to leave you with.

Thank you.

Yeah, yeah, it's tough stuff.

You know, these numbers, you know, just you look at the data out there, and I just feel like I'm supposed to say something about this, not just to her, but to our larger audience.

You know, we see the infertility numbers continue to kind of move up.

That needles moving up in the United States.

And, you know,

there's nothing harder for young couples who want to start a family to have that

need, desire unmet.

And it can be really tough.

And so here's the point that I'm making.

You can really rationalize, Jade,

going into an untold amount of debt to go, my heart longs to be a mom or a dad,

and we're going to do whatever it takes.

And you have a lot of people encourage you.

And the reality is, is you just don't know how all that's going to play out.

There's no guarantee on these treatments.

That's right.

Except for the bill coming due.

Yeah.

You want it to end well, but it's sad when it doesn't.

That's exactly right.

So

here's what I wanted to encourage people that may be listening and watching in this situation.

If that's the case, then I say go all in, but go all in and be able to pay cash for it.

So sacrifice in other areas of your life.

Don't sacrifice your future

on the altar of the immediate.

where you want to do whatever it takes to become mom and dad.

And I just would say, you know, sell the house, like change your living.

Like, okay, we're going to go backwards a little bit in every other area of our life so that we can start a family.

And it's a very tempting thing.

And you know how tough emotionally, I'm sure you've walked that through with other ladies in your life and friends.

We're all kind of touched by friends that have gone through it.

Just please don't fall into that emotional trap to where you can rationalize debt because it's going to make that existing pain even more painful.

So tough stuff there.

Julia, thanks for calling and sharing transparently with us.

We're rooting for you here.

You got this.

Hang in there.

Better days are ahead.

How many times do you end up with too much month at the end of the money?

Even if you can cover the bills, there's nothing left over.

You work your butt off and you still feel broke.

That's normal for most people.

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All right, let's go to William in Pennsylvania.

William, how can we help you today?

Hi, so I got two questions.

My main question is investments.

Since I'm actually able to put money aside and save up a lot more, I'm wondering what what places I can invest my money into for the best results in the long run.

What are you doing?

I'm very young, and I'm hoping to be able to have a lot more than just a 401k whenever it's time to hopefully retire if I'm ever able to.

How old are you?

22.

22.

And do you have any debt?

Yeah, I have a house and two vehicles.

Wow.

Oh, boy.

Tell us about those first before we get into the investing.

Okay, so last year I closed on my first home right before my 21st birthday i moved in around september 3rd i believe was my move-in date bought all the furniture outright had the closing costs figured out had the down payment figured out

and

i owned three vehicles completely i bought them all in cash great

and

once i figured out how much money i was making it's not a lot but for this area it's quite a bit what do you make i was able to do

uh right now i make twenty seven an hour.

Okay.

And I appreciate all the timeline.

For Southwestern PA.

Yeah, I get it.

Yeah, for Southwestern PA,

it's substantial.

Okay, $27 an hour is great.

But you said you have two car loans.

How much are the car loans?

Combined or like separate?

Separate.

You had two cars, two loans.

My first vehicle would be my now wife's vehicle.

We paid $15,000 for it, and I did have to get a loan for it.

And I pay around $300 a month for it.

So you owe $15,000 on that one?

Just about.

Okay, and then what do you owe on the second car?

So I just bought a truck about three weeks ago, and it was $23,000.

I pay just under $400 a month for it.

And what do you take home every month?

From your job?

Combined, we both take home around $6,000 a month.

Okay.

And what do you pay in your mortgage payment?

My mortgage is $600.

Wow, that's good.

Okay.

I'm afraid for you because you're starting a trend of debt.

A bad trend.

I understand that.

I was told and I just realized that a few weeks ago.

Okay, I'm glad that you, and so you agree then

you're like, I can't keep going down this route, right?

Oh, no, that's the last purchase I'll be making for a long time.

Good, okay.

Ever do again.

Okay, I'm glad to hear you say that.

so you started out with an investment question i will get to that i promise ken will make sure of it um but i did i i did want to address the debt so you do if you've been hanging out with us for a while you know can we do say that you do need to be paying off your debts before you invest and there's a lot of reasons behind that

right and you want to make sure that when you do invest you're able to invest an amount that's really going to move the needle for you and you have the fullness of your income at your disposal to do that so step one is you and your wife getting together and saying, how can we quickly tackle this $38,000 of debt using our $6,000 a month income so that we can regain $700 a month in payments, right?

That's the first plan.

So do you have every dollar?

What do you mean, every dollar?

So every dollar is our budgeting app.

It's really more than a budgeting app.

It's giving you your whole financial snapshot.

Yeah.

So you'll spend, I'll give it to you for free and you'll spend, you know, five minutes telling them your, telling the, the app your situation, and it's going to craft a plan specifically for you.

And it's going to help you find the exact margin that you need to pay off this $30 some thousand dollars of debt.

Yeah.

And then as long as you follow the recommendations, I promise you're going to get there because it's going to tell you exactly what Ken and I would tell you here in this room, which is, yeah, list them smallest to largest, start with the 15,000 one first, but it's going to look deeply into your budget and find money that we can't see through the phone line.

So that's step one.

Now let's talk about your investing question.

Ask it again so I don't miss it.

So I do have a 401k.

That's obviously brand spanking new, but you know, I don't want to just have to rely on that in 50 years from now, if you know, if I'm even able to retire.

Why?

I don't want to just have that.

What do you mean?

Why?

I'm trying to understand you.

Why does that bother you to have a 401k?

I just don't want that to to be the only thing I settle with.

What do you want besides that?

That's just a traditional retirement account.

So you want land.

What do you want?

I mean, I would love to buy land.

I would absolutely love to, but

I'm new at everything.

I just graduated almost five years ago.

That's true.

You sound older than you are.

You do.

You're an old soul.

I think Jade needs to give you, I'm going to have her walk you through the baby step plan and strategy so that you get this and she can touch on the investment so that you see the big picture.

I do want to, I'm actually going to go in the reverse order of what Ken said.

She's going to do the reverse of what I said.

Reverse, really.

Sounds like my marriage.

My bad.

All right.

Stacy, here's what I think we should do.

Oh, you don't.

Oh,

okay.

Never mind.

We'll do what you want to do.

Sorry, Ken.

Listen.

No, it's great.

Sorry.

No, keep going.

It's great.

Okay.

Okay.

So let's talk about the investment part first.

So because you're not the only person with that question.

So if you were saying to me, Jade,

I want something other than a 401k because I want to be able to retire before 59 and a half.

I'm with you.

If you said, Jade, I just don't like the idea of all my eggs in one basket.

Can I have something besides a 401k?

I just love diversity.

I would be right there with you.

And I am.

So yeah.

Once you have gone beyond a certain baby step, all of those things open up to you.

And I want to talk about that.

So to Ken's point, we talked about first, just save up.

I'm going to walk you through the baby steps.

First, just get $1,000 saved.

Do you guys have any money saved anywhere?

Oh, I see.

Yeah, we just paid off the wedding.

We just got married last weekend, actually.

And after all that, I may have not done it the right way, but I did it.

Everything is paid off.

The only thing we owe is our debt now.

Understood, but what do you have?

I have my safe, and I have money in the bank.

In the bank, I probably have around $4,000 to $5,000.

That's like my, but my cushion is what I call it, is my cash I keep in my bedroom.

I have just under $10,000.

Oh, okay.

So you got $15,000 total.

Excellent.

That's just what you need.

I don't have money.

I get nervous and I freak out.

I need money.

Okay, well, I'm about to freak you out for a minute, but it's so that you can feel your best in the end.

If I were in your shoes today, William, I would take 14 of that 15

and I would pay off your car.

And I know I,

yeah, just like that.

And I know I just like swept the knee right there.

It's breaking out.

I know.

The hives are, they're hitting his neck.

I can see it on the other end.

Yeah.

I would do that because you, what's ultimately going to get you what you want is to free up this income.

And the debt, that's just, it's like a, it's like a dead weight around your ankle.

Okay.

And we got to clear that out.

So if you did that today,

right, and you cash flowed the other thousand, because I always want you to have a thousand dollars saved.

You need something.

You would have $300 freed up.

today immediately and then you could take that and throw it at keep throwing it at the debt right And how quickly could you have that $23,000 car paid off, right?

I could have that paid off like the middle of next year, maybe three quarters of the way into the summer.

If you both worked extra, you could have it done by the end of this year.

Yeah.

By the end of the year, yeah, 12 months.

Yeah.

So, and then you'd have that extra $700 and you and your wife could stack up, you know, three to six months of expenses.

That's baby step three.

And then after that, you're investing 15% of your income into your 401k.

And 15% ain't too shabby.

Like if you keep that going,

you know, and then after that, we would say, hey, now let's take, you know, take a moment and focus on putting a little extra aside for your kids.

This is another form of investing.

It's called a 529.

You can throw a little in there, whatever you decide.

And then you can say, okay, let's start paying off our house because we value real estate, right?

You wanted that diversity.

So you start paying off your house.

Most people who do this, William, pay their house off within seven to 10 years.

Yeah, I was hoping to pay it off in 15.

Okay, okay.

Great.

I love that.

If you do it in 15 years, again, love that for you.

Now you've got a piece of real estate.

Now you've got your 401k.

And then if you say, hey, I kind of like this land deal, let's keep saving up money and buy another piece of land.

Or let's keep saving up money and I want to open another type of investment account.

I just want to open one that's not tied to retirement to where I can invest the money and get to it whenever I want.

You can do that.

It's called a brokerage account.

There's so many options for you, but you must walk through the steps in order to free up the income and in order to do it.

So that is the caveat.

You need the income that you're now paying in payments.

One step at a time, William, we believe in you.

Our scripture of the day comes from Deuteronomy 28, verse 12.

The Lord will open to you his good treasure, the heavens, to give the rain to your land in its season and to bless all the work of your hand.

You shall lend to many nations, but you shall not borrow.

Our quote of the day, this is kind of scary, from Stephen King.

Not a Stephen King fan, but I'll go ahead and read the quote.

What separates the talented individual from the successful one is a lot of hard work.

Oh, well, that's not, well, the hard work is scary.

That's the scary part.

I guess I should stipulate, I don't know him and don't have any, I just don't like scary stuff.

I don't either.

James, I'm that guy.

When I'm in the movies with my wife and it's the previews and the horror comes up i literally close my eyes i do too you do too listen i don't want that stuff going in my brain i do too and i haven't even i haven't seen shawshank redemption but he wrote shawshank too so he does he has a lot of stuff outside the horror genre i didn't i did it i know i did not know that i did not know i had him as just a horror guy and that's why i had to craig i don't No position against him.

I don't like his work.

Let's put it that way.

Other than Shawshank, which I didn't know, James.

Yeah, that's good.

That's good.

Actually, now I'm second-guessing it.

Oh, yeah, yeah, it's based on his novel.

Yep.

Wow.

That's a classic.

James pulling the feather out of his hat today.

Very impressive.

Jenna is up in New York.

Jenna, how can we help today?

How you doing?

I'm literally losing sleep over a decision I have to make by tomorrow.

And what I'm struggling with is whether to give a friend $900 who hasn't responded to any of my calls or checks for like three years.

And then she suddenly reached out and she's literally begging me for help to pay off a storage unit lien that she says needs to be paid by four days from now.

And she said it holds all her worldly possessions.

So I contacted the storage company directly today.

And in doing so, I learned she actually owes double that amount.

And I'm kind of uncomfortable with the variety of the details they gave me.

But

I could get the money, but it would be a financial hardship for me.

But

what I'm torn with is I'm feeling so guilty.

No.

What if this was me?

And because like, what if this was me?

And, like, the way she worded it and stuff.

And, but at the same time, it would be a boundary, you know.

Okay, Jen.

I love this.

I love that you called us because you need somebody that's objective.

Jade and I have zero feelings on this deal.

So I'm going to ask you a couple of questions.

We're just going to rewind.

When she first requested the $900, what did your gut, what did your body, what did your brain say?

Well, I just felt so sorry for her because she hasn't talked to me.

No, no, no, stop, stop, stop, stop.

Let me re-ask the question to make sure you get what I'm asking.

About the $900,

if she'd have asked for $9,

what would your brain have said?

What would your body have said?

$9, yeah.

Okay, if it was $90, what would your brain and your body have said?

Yeah.

Okay, when she asked for $900, don't tell me all these other things.

What did your brain and body say when you processed $900?

It was hard because I'm trying to follow some advice from you and pay off my mortgage.

Yes, and you just told us that $900

is a hardship that would be brought on yourself to help somebody pay off a debt.

And this somebody's not even in your life.

They haven't even returned your calls.

They haven't even had the common decency to return a text.

This is a hard no from me.

Jenna, can you.

But she did return, she reached out three weeks ago, and then I got the text two days later.

That's fine.

That's fine.

But can I ask you a question?

If I said today, Jenna, it is your mission to go out into this world and earn $900.

Could you do it?

I think I could.

Okay.

That's your answer because your friend can too.

And the question I also have is: is this still your friend?

Well, you know, we were close, and she went through all these things for time's sake, I won't go through it that she shared when she called me.

And she says she's getting a contract in the middle of the month and that she would pay me back.

Oh, well,

oh, kibosh, I'm gonna put the kibosh on this right now because here's the, here is what I will say.

If

you decide, because this is your choice, if you decide to give her the money, you are giving it to her.

You cannot lend her this money.

You either give it to her out of the goodness of your heart and out of the detriment to your own budget and to your own life, or you don't do it at all.

You cannot lend because if you lend, if you lend it to her, you are not helping her.

You're just moving the debt.

And now you're straining an already strained relationship.

That's why I called because I needed to hear you say that because I knew that's what you would say.

Yes, ma'am.

Listen, you didn't even tell us, nor do we need to know what are the other details that you found out from the storage facility, but it screams to me that you're not getting the full story from this fake friend.

This is not a real friend, and I'm going to say it.

Real friends.

I just feel very not generous.

Well, Jenna, that's your problem

on how you feel.

Because I can tell you, you're a generous person.

The fact that you're even considering helping this fake friend tells me you're generous.

But you've got to make a good decision for you.

Not a good decision for her.

Do you understand what I'm saying?

Also, also, can I just throw out there,

guilt and generosity don't live in the same house.

Like, they don't live in the same.

You don't give out of guilt.

You give out of the abundance of joy.

I think she's manipulating you.

This This is a person who did not return your calls, did not return your text three weeks ago when she knew she had a problem on the horizon.

She thought, hmm, I better hit Jenna up and start acting friendly again.

I think this smells, this stinks of manipulation.

This is a fake friend, and I don't give nine cents to fake friends, much less $900.

Yeah.

Yeah.

This is

really think about that, Jenna.

When you give,

it should be out of a cheerful heart, not a guilty heart, not under compulsion, not under,

oh, what are they going to think of me if I don't give?

That is the exact opposite.

Matter of fact, I would say, wait until, if you are still thinking about it, wait until all those feelings dissipate.

And then if you can really look at this and go, I am just so grateful to help my friend.

I have the money.

I feel joy about it.

I feel good about it.

Do not give with a guilty spirit.

That is not, that is not generosity.

That is guilt and shame.

I got another thought just now Jenna how much does she actually owe it was 1800 right

yeah 1800 why she and that's the rent so that that means they won't take a lien if she pays it by the 23rd of the month but she told me Tuesday but she still would owe lien fees and and late fees and then the first of the month She has two units.

She has a $900 payment and a $786 payment on the 1st of October

November.

So I don't feel like I'm helping her because if I get her this money, then she's worth getting the next money.

Yes, Jenna, I wish you could see our studio audience.

They are shaking their head.

You just came into the light.

You actually just, you took, you took us where I was trying to take you.

In other words, the $900 isn't even going to solve the problem.

And that tells me.

And I hate to say this, Jade, but I'm old enough now

to have lived enough life to know that she's hitting several people up for $900.

This stinks, as my grandmother used to say, to high heavens.

There's an old phrase from the South.

Jenna,

this is bad news.

And I am hoping to remove any unnecessary guilt.

You are not a person who has done anything wrong.

Thus, you should not feel guilt.

But you're such a kind person, Jenna.

I just keep hearing my mother say that's not Christ-like.

Well, that's another problem.

We're now arguing with our mother.

All right.

And yeah.

Lou is probably no longer here.

So listen.

I guess I did need that non-objective opinion because I knew if I give her the money, it's not a loan.

I'll never see it again.

I'm going to say a final word.

You don't even know if she's going to put it on the storage.

I got a final word on this, Jenna.

You know?

The reason you feel guilt is because you think that not wanting to pay her is wrong.

That's actually right.

And I'm going to flip it on you and say that if you give her this $900,

that's wrong.

Entitlement, baby.

It's stupid.

It's not good management of your money.

Therefore, Jenna, it would be wrong for you to give her $900.

It's my best shot.

Stand-all business, Kim.

Where's my hat?

Where's your hat at?

Oh, my goodness.

Remember, folks, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.