You Can’t Control the Past, But You CAN Control the Path Forward

Speaker 1 Brought to you by the Every Dollar app. Start budgeting for free today.

Speaker 2 Normal is broke and common sense is weird. So we're here to help you transform

Speaker 2 your life from the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey Show, 888-825-5225 five is the phone number alongside Jay Warshaw.
I'm Ken Coleman.

Speaker 2 Excited to have you with us. Tracy starts us off in Dallas, Texas.
Tracy, how can we help?

Speaker 2 Hi,

Speaker 2 so I

Speaker 3 got my bachelor's degree and my mom kind of handled all the finances in the house growing up. So I knew I had student loans eventually coming out of college, but she kind of handled all that.

Speaker 3 And I guess my question in that is,

Speaker 3 is it ever, I guess, an okay choice to just choose to default on student loans when they just become very overwhelming?

Speaker 4 No.

Speaker 4 If you were 88 and on death's door, I might say yes if you had no money, but you sound young and it seems like there's a lot of life ahead of you to try to make this happen. So

Speaker 4 tell us

Speaker 4 what has you feeling this hopeless.

Speaker 3 So when I graduated,

Speaker 3 and once I kind of finally saw that number after a while,

Speaker 3 my student loans end up being a little bit under $140,000. Okay.

Speaker 3 They had been, my mom refinanced and reconsolidated them, so it's a private student loan, too. Good.
So

Speaker 3 it just feels like they're never really going to get paid off. I paid it down to $106,000 at this point.

Speaker 3 But

Speaker 3 it's just very draining. Like it just feels very overwhelming.

Speaker 2 How long has it taken you to get it from 140 to 106?

Speaker 3 So I graduated in 2016.

Speaker 3 So about that long. I'm probably about almost 10 years now.

Speaker 4 Okay. What are you earning and what kind of work do you do?

Speaker 3 So I'm a teacher. I think I'm making around $62,000 a year right now.

Speaker 3 My husband's the same. And so I guess just between our income and other debts and having a new baby, everything

Speaker 3 just feels like all at once.

Speaker 4 It is a lot, but di so you're both making 62 apiece? Yes. That's great.
That's fabulous news.

Speaker 4 And what other types of debt do you have? What other debt do you have?

Speaker 3 So we have my husband's car that we're still paying off.

Speaker 3 We have his student loans, which they're not private and they're much less than mine. How much?

Speaker 4 Tell me the amount of the car and his loans.

Speaker 3 I think he still has 19-ish left on the car.

Speaker 3 His student loans are around $30,000. And then we kind of have a house.
And so that's also...

Speaker 4 Tell me about the kind of house.

Speaker 3 So we live in a tiny house on wheels. Oh, tiny.

Speaker 4 I thought you said we kind of have a house.

Speaker 3 Yeah, I did. I did.

Speaker 3 Yeah. But it's just tiny.

Speaker 4 Okay, got it.

Speaker 4 Not laughing at your house, laughing at me, not hearing well.

Speaker 3 Okay. Cool.
Yeah, that's okay. So we did do that to cut costs, which um

Speaker 3 which it did which is good but that's um i think we still owe about 115 on that as well okay what's the mortgage on that uh we pay about well on that because it's through an actual like bank lender so it is kind of a mortgage um so that a month is a thousand but then we also have a land rent the landowner and works the land

Speaker 4 uh 700 a month oh gosh that's a lot of money for a tiny house i I feel like that's almost a real mortgage.

Speaker 4 Okay, we'll talk about the tiny house later.

Speaker 4 Ken, I'm looking at this, and I feel like part of the issue is, and I don't know, but it sounds like you're going in the wrong order on the debt because you're starting with the, it sounds like the private loan is one big loan.

Speaker 4 Is that right? Yes. So there's your first problem.

Speaker 4 We have found that

Speaker 4 there's generally two main ways that people tackle debt. One is they

Speaker 4 list them smallest to largest, like we suggest, not by interest rate, not by payment, just the full debt itself, smallest to largest. And

Speaker 4 other ways are by interest rate or whichever one you feel the worst about. All those other ways don't work.
We find that people get tired like you have and they don't see it through till the end.

Speaker 4 So the method that Ken and I are going to explain is the method that we have found and has been proven to work over time. Okay, so I'm just setting it up for you to know that this works.

Speaker 4 So, what you need to do is go through and list these all smallest. So, it sounds like probably the smallest debt is going to be

Speaker 4 one of your husband's federal student loans, right?

Speaker 3 Yeah.

Speaker 4 And then, when we do that, we can free up that money quickly. You pay off a $3,000 debt, it frees up a little bit of money.
You pay off another $6,000 debt, it frees up a little bit of money, right?

Speaker 4 And then we can take all that and throw it at the next smallest debt. So, that's how we gain momentum on this.

Speaker 4 And that's what I would suggest you to do. The $19,000 car.
Do you know what it's worth?

Speaker 3 I do not. It's probably, it's still probably somewhere around there, somewhere in the 20s.
It's a 2019 model.

Speaker 4 So, what's the payment on it?

Speaker 3 I think it's somewhere around $400.

Speaker 4 I would love if you guys could get that $400

Speaker 3 back

Speaker 4 in your budget. Do you guys happen to teach at the same school?

Speaker 3 No.

Speaker 4 Okay. Do you, are you in the same district?

Speaker 3 No.

Speaker 3 This is very large.

Speaker 3 Okay.

Speaker 4 Yeah. I'm trying to think of a way that it could be feasible for you to become a one-car family for a short season.

Speaker 2 I want to jump in on something that you mentioned at the top of the call, and we just kind of glossed right over it.

Speaker 2 And that is that your mom, if I heard you correctly, your mom took out these loans in your name and you didn't know about it.

Speaker 2 I

Speaker 3 feel like I knew she was taking out loans, but I didn't know what that kind of total price was going to end up being.

Speaker 2 Okay. And so

Speaker 2 when did you find this out?

Speaker 3 Find out the number or find out I had out I had loans. The number.

Speaker 3 In 2020.

Speaker 3 Okay.

Speaker 4 And you graduated in 16? 16.

Speaker 2 So four years in, you find out the full number. And is mom

Speaker 2 helping you out with this? Was that part of the agreement? Or was it just a parent plus? Tell me a little bit more about this.

Speaker 3 I'm not sure if it was parent plus.

Speaker 3 I know my parents didn't get their bachelor's degree, so I know they really wanted me to get mine, which is fine.

Speaker 3 But

Speaker 3 so I don't know what type of parents are. Okay, are they helping out?

Speaker 3 Was there ever any agreement?

Speaker 2 Tell me more about this. Something about this just doesn't feel right to me.
Yeah.

Speaker 3 They were helping out for a while.

Speaker 3 2020 happened because

Speaker 3 that's kind of when they stopped.

Speaker 3 that's when I got the login. Like my mom sent me the login to

Speaker 3 the platform to log in and view it. And kind of at that point, it was kind of one of those like launch situations like this is yours now.
Right.

Speaker 4 You know. And up until that point, had she been making the payments or had they just been sitting accruing late payments and whatnot? She she was.

Speaker 3 She was,

Speaker 3 I guess, kind of splitting them. Like

Speaker 3 she would take some money from my paycheck and kind of lump it into whatever they were were helping pay for at the time.

Speaker 4 Some money from your paycheck. How is she getting your paycheck?

Speaker 3 I think my bank account, I think, was still lumped into when I was like 16, and you could have like, you know, the parent kind of over.

Speaker 4 Got you. But you have your bank account now.
Yeah.

Speaker 2 All right. So, Jade, wrap it up here.
I wanted to dig into that, but tell us.

Speaker 4 I would love if you guys could look into selling this vehicle. It's not on fire, but if you can, that's $400 back in your pocket.
You've got to do the debt snowball, which is what I talked about.

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Speaker 4 Since we only had a few minutes with you, the budgeting app is going to take you the next steps further. It's like having Ken and I in your pocket.

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

Speaker 2 Let's go to Emily now in Los Angeles. Emily, how can we help?

Speaker 3 Yes, I was calling, I think, looking for some advice.

Speaker 3 Our family was in a major car accident, and we have quite a bit of medical needs.

Speaker 3 And we own our own business, and my husband also works full-time outside of our business.

Speaker 3 Through our medical journey, I was put on medical leave, meaning I'm not supposed to be working due to a brain injury

Speaker 3 that turned into like a

Speaker 3 more complications. So

Speaker 3 we are losing my income from the business and it's making it very difficult to operate the business.

Speaker 3 We've tried consolidating debt.

Speaker 3 We've paid off a chunk of debt. We

Speaker 3 are just trying to do everything that we know either from baby steps or just like rewriting budgets. But

Speaker 3 it's taking quite a long time

Speaker 3 because we can't pursue settlement from our accident until our injuries injuries are a little more

Speaker 3 progressed where they can accurately say, like, this is this is, yep. And so when did it happen? We had gotten to the

Speaker 3 we've been dealing with this for over a year now. And

Speaker 2 tell me about the, let me, let me walk you through some numbers here so we can help.

Speaker 2 Tell me about the business, the one that you own, and then what role do you play? So two-part question there.

Speaker 3 I'm owner, creator, and main employee.

Speaker 3 What's that? And

Speaker 3 we manufactured organic

Speaker 3 like skincare candles, things like that.

Speaker 2 So it's just

Speaker 2 you and the hubs.

Speaker 2 You guys are the only two and it's primarily you or is he putting in ours as well?

Speaker 3 It was primarily me.

Speaker 3 And then we had family and friends that would help, obviously, right after the accident and things.

Speaker 3 We lost our storefront and that was a major revenue stream. It was our biggest revenue stream.
What were you feeling?

Speaker 2 Give me an idea what your revenue was.

Speaker 3 For the whole business, it was pushing 350K and growing at over 20% a year.

Speaker 2 Good for you. And what were you paying yourself? Yeah, it was.

Speaker 3 I was averaging $6 to $7K a month

Speaker 3 personally paying myself. And then we were working on actively paying off debts on good months.

Speaker 2 Oh, that's what I want to ask.

Speaker 2 How much of that debt was on the business?

Speaker 3 The business currently has about 250K in debt from

Speaker 3 losing the storefront. And we were wholesaling to over 1,100 retailers across the world.
Wow. And we had to halt that as well.

Speaker 2 You were really cooking with Greece, weren't you?

Speaker 3 We had some really big dreams right before this accident happened, and the accident took

Speaker 3 a lot of that away. So it's okay.

Speaker 3 I'm walking through that.

Speaker 2 I understand. So I'm going to keep walking through some numbers with you so that Jade and I can dive in.
Okay. So we have $250,000 in debt on the business.

Speaker 2 What personal debt do you guys have?

Speaker 3 We currently still have 80. I think it's 89,000 in debt.
And

Speaker 3 that includes personal loan we took out to help consolidate all of our credit cards, student loans,

Speaker 3 tires. I mean, that's everything but our cars.

Speaker 2 And you still have debts on cars, too?

Speaker 3 We do. My husband's trucking.
Give us the number. 19K left on it.

Speaker 2 19K on a truck.

Speaker 3 What else? Yep. And then my car has 52K.

Speaker 3 But the problem with my car is it was in the accident and its value has the car was six weeks old when it was hit and it didn't total by like pennies basically they repaired it but its worth has dropped we tried to get out of it after the accident and the worth it was like worth less than 20k last christmas

Speaker 3 and we can't do anything about that while our settlement still plays out because that's part of the settlement so we can't get got it got it got to try to help you here so i'm trying to consolidate a lot of details here uh and so your husband's income is what

Speaker 3 90K.

Speaker 2 Okay.

Speaker 2 And you have no income coming in at all, correct?

Speaker 3 Correct. Okay.

Speaker 2 All right, Jade, what else do we need to know here? We're trying to get a picture here.

Speaker 3 I do. I will say I do have two more months saved for, like, I have money in the bank that was to pay myself to get us through

Speaker 3 to the end of January. So

Speaker 3 you have the money bills?

Speaker 3 I've got 10K left to pay myself out of.

Speaker 3 This month is taken care of. So it's 5K for December and 5K for January.

Speaker 3 So

Speaker 2 are you unable to pay for your four walls plus all this debt on just your husband's salary?

Speaker 3 Correct. We did already downsize our house.

Speaker 3 We already moved and took care of a massive expense way.

Speaker 3 How much short are you?

Speaker 2 So how much income are you guys short every month? Well,

Speaker 3 $5,600.

Speaker 4 $5,600.

Speaker 3 Help us get to that.

Speaker 4 How is it $5,600?

Speaker 3 That's all our debt. My husband's income would cover our housing, living expenses,

Speaker 3 the vehicles.

Speaker 3 The personal debt.

Speaker 3 The personal debt. Yep.
So how much inventory?

Speaker 4 I got to believe you've got a bunch of inventory that needs to be sold off. What's that worth?

Speaker 3 What's the value of it?

Speaker 3 I I think I have a good $100,000 in inventory that could be produced and sold or could be just sold.

Speaker 4 And so when you were selling, was it an online storefront or it was like brick and mortar?

Speaker 3 We were brick and mortar up until just a few months ago. The brick and mortar was over 220K in sales a year.
Got it.

Speaker 4 And you sold that or you just lost the lease?

Speaker 3 We had to close the store because

Speaker 3 I couldn't run it anymore. And the debt had already piled on on that it didn't make sense to hire someone.

Speaker 4 Understand, but was it a lease or was it a place that you guys owned?

Speaker 3 A lease. Okay.
Nope. We didn't own a lease.
We're out of the lease.

Speaker 4 My question is, is there a way that online you can start to sell off some of this inventory so that you can keep trying?

Speaker 3 And what are you running into?

Speaker 4 What are you running into?

Speaker 3 It's just slow. We were online was our slowest revenue stream in the past.
And it's just getting like

Speaker 3 our in-person. Let me ask a really

Speaker 2 Let me ask a dumb question because it's really important.

Speaker 2 This inventory, and Jade rightfully so, is locked in on this. This is your best chance to get some relief here while we're waiting on settlements and all the things.

Speaker 2 If you were crushing it to the tune that I'm hearing, and I believe you, in Los Angeles, you had a loyal customer base is my guess. True or false?

Speaker 3 Yes.

Speaker 2 And I'm guessing that they found out

Speaker 2 in some form or fashion what happened to you. Is that true or false?

Speaker 3 Yes. Okay.

Speaker 2 I'm wondering here, Jade, come on alongside of me. How do we reach out to that group of people and go, hey, hey, y'all, this is my situation right now.

Speaker 2 Or if you all believed in this product, it would help us to move this product because it's going towards.

Speaker 2 getting out of this business until I get healthy because I got to believe you're coming back one day.

Speaker 4 Or even those last retailers that you were in their stores, can we, is there a way? I mean, obviously,

Speaker 4 continuing to maintain the business is not an option, but getting those last purchase orders so that we can sell off this last, because you said you were in a number of different retailers. How can we

Speaker 4 tap them?

Speaker 3 I send weekly emails to all of the retailers. We started doing promotions and even lowering prices on goods,

Speaker 3 doing online marketing, which we've kind of stepped up for. But

Speaker 4 what caused the retailers to not want to continue to purchase? Because I feel like those are two different issues. We've got the, hey, we got an accident.

Speaker 3 We had a

Speaker 3 six-month pause. Oh, sorry.
Go ahead.

Speaker 4 I just want to get clear on this. Was it the accident or was business already starting to dwindle? Is what I'm trying to understand? No.

Speaker 3 No, business is at the highest it was when we were in the accident. I had to close our wholesale portal for six months immediately because of how bad the injuries were.
Okay.

Speaker 3 So those lines are dried up. And

Speaker 3 they, a lot of them, our most loyal storefronts have come back, but a lot of them,

Speaker 3 they need goods and then they just move on to the next retailer because they're full in their store.

Speaker 4 So what this is going to look like, if your husband is well,

Speaker 4 this has got to be his side hustle is figuring out how to sell because it's $100,000 in your garage, basically, how to sell this, because that's going to break you free from this business debt.

Speaker 4 Otherwise, you're going to continue to go into credit card debt, floating the difference. We can't do that.

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Speaker 2 All right, Lauren is up next in Minneapolis. Lauren, how can we help today?

Speaker 3 Hi, I'm Dad. How are you? Good.
What's going on?

Speaker 3 So back in July, my little brother backed into my car. Oh, boy.
And my husband had to pay out of pocket.

Speaker 3 Not too much money. It was just our deductible, but

Speaker 3 it's been you know about six months and he hasn't made any effort to pay anything. And so I would just like some advice on what to do if he doesn't start paying soon.
How old is he?

Speaker 3 He's 22.

Speaker 4 Does he have a job?

Speaker 3 No, but he has a good income, which is we have an interesting financial situation.

Speaker 3 And he's got a great income. He just bought a new house.
It was like pretty expensive and he just lives there by himself. Where does he have any

Speaker 3 disabilities?

Speaker 3 We get per cap. So we get like

Speaker 3 it's Native American per cap, basically. Got it.

Speaker 4 And what was your deductible that you paid?

Speaker 3 $2,000. So he owes you $2K.
To me, that's not like a lot. Yeah.

Speaker 4 So what does he say when you go to him and you're like, you know, Junior, I need this $2,000? What does he say?

Speaker 3 Well,

Speaker 3 he's been kind of just like dodging it. When it first happened, we said something and I was just like, you know, you got to pay this.

Speaker 3 And he was like, well, I'm not going to pay more than $2,000. He actually owes like $6,000 because of all the damage.
Well, wait, he owe me $2,000. No, no, no.

Speaker 4 Help us understand that. If the damage was $6,000, why does he only owe you two?

Speaker 4 He backed into your car.

Speaker 3 He owe the deductible. He owes me two.
He owes the insurance company $6,000.

Speaker 3 Okay.

Speaker 4 And is he paying the insurance?

Speaker 3 He would pay the six. No.
He would pay the six to the insurance and they would give me two from from that six deductible.

Speaker 2 So he doesn't owe you. He owes the insurance company.

Speaker 3 Yeah, technically, yeah.

Speaker 4 So what?

Speaker 3 And we would get the $2,000 from the insurance company once he pays it.

Speaker 2 Well, what are they doing? What are they doing to collect on this?

Speaker 3 Just trying to collect it. You know, there's not like a lot that they can do.
They just basically keep reaching out. But insurance has to pay you regardless.

Speaker 4 Like, that's your insurance and you filed it, no?

Speaker 3 Yeah. apparently we have to wait till he pays it.

Speaker 2 I don't, I don't, none of this makes any, this entire call makes no sense to me, but let's stay on the insurance piece.

Speaker 2 I when was the last time you talked to your the person somebody from your insurance company

Speaker 2 today and they told you we can't do your payout until your brother pays his portion?

Speaker 3 Yeah, basically they can't pay us anything because it's his job to pay that.

Speaker 3 What type of policy is this?

Speaker 3 Progressive.

Speaker 2 Oh, now we're naming names. There we go.

Speaker 2 I don't understand what you hoped for calling us on the brother not paying you. I mean, if I had a relationship with him,

Speaker 2 I would be making his life miserable. And at some point, your husband needs to probably roll up to the house and go, hey, punk, what's the problem?

Speaker 2 Your sister is my wife, and you're not manning up taking care of business while you sit here and play video games in your new house.

Speaker 2 I mean,

Speaker 2 I'm not talking about threatening physical violence, but I mean, it feels like this is pretty easily handled in a family situation.

Speaker 3 I can't give you any advice on that. It hasn't been very easy to handle at all.
What's that?

Speaker 3 It hasn't been very easy to handle at all. I mean, we've asked him for it.
He's not really making any efforts. There's not like anything that I can do to say like, hey, I need you to pay this.

Speaker 3 Did you file? Just talking, my husband and I.

Speaker 4 Did you file through his insurance and not yours?

Speaker 3 He doesn't have insurance.

Speaker 3 He didn't have insurance when he backed into my car.

Speaker 2 Okay, so he hits you and you call your insurance company up and go, hey, my bro backed into my car and they took over.

Speaker 4 Do you not have collision?

Speaker 3 I don't, I think I do, but it's like my deductible was two. Like I still have to pay a little bit out of pocket.
It was a, it was higher than I had.

Speaker 4 If you don't have collision, then that means your insurance has no coverage to pay for your car. And that would mean the only option is waiting for the other driver's insurance.

Speaker 3 So my guess. You did pay for some of it.

Speaker 4 Ah, that might have been.

Speaker 4 It might have been based on the way, the nature of how it happened.

Speaker 3 Okay.

Speaker 2 Do you have a relationship with your brother, or is it a non-existent relationship?

Speaker 2 It's kind of.

Speaker 3 I mean, like, I see him sometimes. I was trying not to be like

Speaker 3 too pushy about it. So, you know, I still see him and stuff, but.

Speaker 2 Are your parents in the picture?

Speaker 3 Best relationship.

Speaker 3 Yeah.

Speaker 2 I don't know how this is.

Speaker 3 I mentioned to my mom today, like, hey, you know, if he doesn't start paying, like, we're kind of just not going to

Speaker 3 be like doing stuff with him. Like, I'm not going to.
Yeah, I don't think that's a real big threat to this guy.

Speaker 2 I would get the parents involved. This is a family meeting at best.
I don't know how else you get the money out of that.

Speaker 3 Yeah, no, that my mom was not, she's not trying to step in like that at all. She just said she doesn't want to break up our family over something like this.
It's going to break it up.

Speaker 4 Whether if he doesn't pay it, it's going to break it up. Let me explain the insurance part for you so that you can at least understand what's going on.
Is one of four things is going on.

Speaker 4 You told me, number one, if you tried to file through his insurance, you told me that's not the case because he doesn't have insurance.

Speaker 4 Number two, I don't think you have full collision insurance because

Speaker 4 they're not paying.

Speaker 4 And number three, my guess is if you do have collision, since you did not go through his insurance, it says that sometimes if you do have collision, but the person who hit you doesn't, they're waiting for that insurance to pay them.

Speaker 4 And so that's the, that could possibly be the problem there. Either way, I think that if I were in your shoes, I'd be calling up my brother.
I have an older brother and a younger brother.

Speaker 4 I'd be calling up my younger brother today and I'd be like, you need to make this right. What type of person are you?

Speaker 4 Like, you, I thought you were a person of integrity and character, and I'd like to see that demonstrated. That's what I'd be saying as the older sister.
And if he didn't, I would be sure to tell him.

Speaker 4 I'd be like, Man, I'm really disappointed that this is the way you chose to handle this. And you and I both know this is not right.

Speaker 2 Yeah, I've been sitting here, Lauren, thinking, what?

Speaker 2 Well, I've been thinking about what would Dave say, and I can imagine how that would go. And I'm not going to say that because I'm not Dave.
And then I'm going, well, what would I do, Jade?

Speaker 2 Oh, I'd act a fool a little bit. So, Lauren, I'm going to tell you what I'd do.
I would do two things.

Speaker 2 First gear would be

Speaker 2 calling, texting, showing up at his house once a day.

Speaker 3 Oh,

Speaker 2 we're going to just be obnoxious.

Speaker 3 We're not violent.

Speaker 2 We're not threatening.

Speaker 4 Just getting on his nerves.

Speaker 2 We're obnoxious. You know, like with some justification.
And gear two, if that doesn't work, because I don't think that's going to work right away. Although you'd be surprised.

Speaker 2 You just keep showing up.

Speaker 3 And the guy's like, he's like, oh, yeah.

Speaker 4 Blowing Blowing up the line.

Speaker 2 The second thing I might do is, if that doesn't work, I'm finding a way to get in that house.

Speaker 2 Or I'm knocking on the door one night. He opens the door and I walk in.

Speaker 3 Are you sitting in the shadow? No, no, I start walking around.

Speaker 2 I want him to open the door and let me in. And I'm going to start walking around the house and I'm going to start pulling stuff into the living room.

Speaker 2 And I want him to go, what are you doing? And I'm going, I'm adding up $6,000 worth of your stuff.

Speaker 2 And I'm going to sell it because here's the deal. You and I both know you owe me $6,000.

Speaker 4 I'm getting it one way or another.

Speaker 2 So this is so stupid

Speaker 2 that I have no other choice.

Speaker 4 Go in his closet. Yeah.

Speaker 2 And so if this doesn't work, now I'm going to sue you.

Speaker 3 Mm-hmm.

Speaker 4 Yeah. Yeah.

Speaker 2 But I'm sitting there going, realistically, what would I do? And I think it's the obnoxious treatment first. Yeah.

Speaker 2 And then I'm literally going to go in and go, I just found a toaster that's worth $150.

Speaker 2 It's pretty new. You like this? I'm selling that tonight.
Yeah. And I'm going to take $6,000 worth of stuff out of here tonight.

Speaker 2 If you call the cops, that's great.

Speaker 4 Because they need to come get you.

Speaker 2 Because I would love the cops to know that you're stealing $6,000. Right.
I mean, I just think you got to be so difficult that he goes, this isn't worth it.

Speaker 4 Yeah.

Speaker 3 I don't know.

Speaker 4 I don't mind this behavior.

Speaker 3 Lauren, what do you think of that?

Speaker 2 That's all I got. I'm trying to help you.
I'm trying to meet you where you showed up today.

Speaker 3 No, that's okay.

Speaker 3 I just wanted an advice.

Speaker 2 You got to make it worth his while to pay you.

Speaker 2 In other words, he's going, my life gets better the minute I stroke a $6,000 check, which, by the way, he probably doesn't have.

Speaker 4 Yeah, I don't think he, I truly don't think he has the money. I don't either.

Speaker 2 But I'll bet you he's got some stuff in that new house.

Speaker 2 Throw a yard sale in his driveway. Yeah.

Speaker 3 Yeah.

Speaker 3 Yes.

Speaker 2 Oh, gosh, what a mess.

Speaker 4 I can't. I cannot imagine treating a family member my flesh and blood, somebody I love that way.
I know. It's just, I'm sorry that you're going through that.

Speaker 4 That, that in and of itself is disappointing, that a family member would do you dirty like that.

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Speaker 4 Oh, I would love to hear you go on a rant, Ken Coleman.

Speaker 2 We've jumped the shark as a culture. Maybe later.
I don't understand. Next, it's going to be pre-Easter deals.

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Oz is on the line in Miami. Oz, how can we help?

Speaker 6 Hey, guys, how are you?

Speaker 3 Happy Monday. Happy Monday.
Yeah.

Speaker 2 Whatever day it is.

Speaker 6 Whatever day it is. It's right.
So essentially, my wife and I, about two years ago, we bought a rental property, a townhome in Tampa, Florida, right? But we reside in Miami, Florida.

Speaker 6 We were both born and raised here.

Speaker 6 Right now, every month, the payment that the tenants are sending us is around $2,400, right? But the monthly mortgage that we pay is $2,800.

Speaker 6 So I just kind of wanted your advice on that just because the way that we were thinking of keeping the home,

Speaker 6 we're in between, right? We're either selling it or we're keeping it just because of long-term equity in the future. But

Speaker 3 let me ask a quick question.

Speaker 2 How did we get okay with you having a $2,800 mortgage on it, but only charging $2,400?

Speaker 2 So

Speaker 6 it was a brand new construction, right? And so the first year you pay taxes on the land, second year you pay taxes on the, you know, the first full year of the property being built, right?

Speaker 6 So then the taxes shot up from, I think it was around, they shot up about,

Speaker 6 geez, like $4,800 just paying around

Speaker 6 last year. This was last year.

Speaker 3 How come you didn't raise the rent?

Speaker 3 So

Speaker 6 we have a realtor that we're working with over there, right? The realtor recommended because of the properties around in the community to lower the rent because the first year was essentially 2,500.

Speaker 6 So then it all kind of made sense at that point. We were doing out-of-pocket 50 bucks a month, right? Then the second year came around with the tenants.
And then the

Speaker 6 realtor was saying to lower the rent, just because all the properties around it, the rent went down. So then that's when the property taxes shot up to $5,200, $5,300.

Speaker 6 And that's when we went negative 400 something a month.

Speaker 2 All right. So the question is, did you get into this house to make a couple hundred bucks a month? Or did you get into this house to make more than that?

Speaker 6 We got into this house. Well, we moved over there because we liked the place.
And then work called me back into the office in Miami.

Speaker 3 And that's it.

Speaker 4 That's what I want to stop on. You did not buy this house as a rental property.
You did not say, you know what, let's get into the rental game. Let's get into the landlord business.

Speaker 4 Let's go pick the perfect property for us to do that. You didn't say that.
You defaulted to this because it was like, well, we're moving. I guess we'll just kind of keep it.

Speaker 4 Do you see why that's not a great plan for real estate?

Speaker 3 Correct.

Speaker 6 Correct. Yeah.

Speaker 3 So if you sell it now, are you underwater or can you make money?

Speaker 6 I will make about 15K on it.

Speaker 2 I jump on it because I just read an article

Speaker 2 couple days ago. Tampa is one of the worst real estate markets in the country.
Prices are dropping.

Speaker 6 Yeah, big time.

Speaker 2 So I would get out now. Do you agree with that, partner? I'd take the 15 and be happy.

Speaker 3 Indeed.

Speaker 2 Because this is a headache gone, and you walk away with no financial loss, and you get to, you know, live and tell about it.

Speaker 3 Yeah.

Speaker 4 The longer you wait, that money could dwindle. So I would definitely.

Speaker 6 Yeah, yeah. And we actually just, you know, the worst part of the timing is we just, not the worst part, but we just renewed the lease with the tenants.
So we got, you know, 11 months to go.

Speaker 3 But

Speaker 6 obviously, you know,

Speaker 6 with you know, contingent upon the tenants moving out or so on and so on and so forth, you know, we can potentially sell the house.

Speaker 6 And, you know, I was just talking to my wife about it, and we're young, right? I'm 30, she's 27, and

Speaker 6 zero credit card debts, no car payments. Good.
We have we have seven months worth of savings.

Speaker 6 You know, um, there is a truck that I want to get rid of because that's like 580 bucks a month that I just don't need right now, right?

Speaker 6 Uh, we make a really decent living for living in Miami, um, And just that house is kind of causing not headache in the marriage or anything like that, just our sense of peace from, right?

Speaker 3 Yeah.

Speaker 6 It's going negative every month. And that's, yeah, and that's $400, not including CDD fees, garbage mint fees, ADT security.

Speaker 4 So you were just losing money hand over fist?

Speaker 3 Hand over fist. Monthly, yeah.

Speaker 6 Yeah. Negative $730 is the exact amount every month.

Speaker 4 How long have you had this property and been renting it?

Speaker 6 We were there.

Speaker 6 We've had it so far three years we lived in it 10 months so you've been you've been losing 730 a month for three years given 730 the last fiscal year the last 12 months oh my gosh

Speaker 4 yeah for 2020 i mean do you see where there's no profit there because that you're only going to make 15 000 for the sale this this is the type of math you've got to be doing to understand what you're in the business for are you in it for you know making long haul on the property are you trying to make something off the rents there were just There just wasn't a plan here.

Speaker 4 When you fail to plan, you plan to fail.

Speaker 2 And I would roll my sleeves up with my realtor if I were you, and I would walk this whole lease thing out 11 months. Do you have any options?

Speaker 2 I'm just, because I'm going to tell you something, the market in Tampa is going down. I don't know what it's going to look like six months from now or a year from now, but you got 11 months.

Speaker 2 And so I would want the full picture of what every option, then can we be ready? And then what do we have to do if we have no options, Jade, and 11 months rolls around? What's our strategy?

Speaker 2 So I would get in control. So we're going to list this thing at eight months.

Speaker 2 You know, just don't let this thing happen to you. Happen to this.

Speaker 2 And then one quick question, because I want to get it from a source, a Florida resident. What is the status of the no property tax legislation or idea by DeSantis?

Speaker 3 Where does that stand?

Speaker 6 So that is still TBD.

Speaker 6 I know there's been a lot of hype around DeSantis wanting to go ahead and eliminate property taxes, but a lot of folks are saying, like, how are they going to be able to fund schools?

Speaker 2 So it's not active.

Speaker 3 You know, I get all that.

Speaker 2 But I was just wanting to know: where is it active legislation or is it just him throwing it out there?

Speaker 6 I mean, him throwing it out there. They are in the process of it, though.

Speaker 7 Not active yet.

Speaker 2 Gotcha. Okay.

Speaker 6 Yeah, it's not active yet, but a decision will be made.

Speaker 3 Okay.

Speaker 2 All right. Yeah.
Well, listen, man,

Speaker 2 I wish we had better news for you.

Speaker 2 I would see what your options are in that contract. Read the fine print.
See what your options are. If you have no options, have a game plan so that hopefully we move this house pretty quickly

Speaker 2 upon being able to sell it based on the lease situation there because you just don't want to be stuck with that. And Jade, this is a great review.
We have a lot of new people coming in all the time.

Speaker 2 This is a great way to kind of do a review of why do we tell people, this story being example A,

Speaker 2 to not be long-term landlords. Excuse me, long-distance landlords.

Speaker 4 Long distance. Well, I feel like the first part is what we kind of highlighted, which is a lot of people get into that long-distance landlord game, not by

Speaker 4 thoughtful choice of this is where I'd like to buy a property and be a renter. It's, I used to live here, I got a job, I'm moving, or maybe you're in the military and you're hopping around.

Speaker 4 So it's just kind of like this default, well, this seems convenient. And then you're, you're far away.
It's a pain in the butt.

Speaker 4 If the person is not, you know, paying, you're, you know, in this case, he wasn't, I mean, he was almost a state away. Tampa to Miami.

Speaker 4 May as well be a stayed away, but it's very hard to manage things from long distance.

Speaker 4 And you did not pick a property based on mathematics based on doing any sort of spread you just that's right kind of ended up that way and nine times out of ten those are the ones where they're causing the most amount of stress they're causing the most amount of uh you know loss of of money because they're not covering it and so it's just got to let it go simplify a simple a simple life can yeah and low risk right

Speaker 2 well you know you talk about the florida real estate market you know it got overheated it sure did before you buy something you should be paying attention.

Speaker 2 Talking to those grizzled real estate veterans who've been

Speaker 2 around.

Speaker 2 They may not look grizzled, but they got experience.

Speaker 3 In Florida, they're sunbeaten.

Speaker 2 Yeah, yeah, yeah, yeah. But they know they've been around.
Yeah, they've seen real estate cycles. You got to know this stuff so that you don't put yourself in a high-risk situation.

Speaker 2 Because a lot of people go, Well, I got the house. Let me just rent it.
Now I've just made my portfolio a reality, and it's just not that simple.

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Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Alongside Jade Warshaw, I'm Ken Coleman.
Glad you're with us. Isabel is joining us now from Wisconsin.

Speaker 2 Isabel, how are you today and how can we help?

Speaker 3 I'm doing all right today. Thank you for asking.
Good.

Speaker 3 I guess I have a weird situation. I make $20,000 a year,

Speaker 3 and I work at a bar and restaurant. My boyfriend and I, well, he owns it, but

Speaker 3 my rent is connected to that salary that I make. My vehicle is connected to that salary that I make.
I feel like I'm kind of a hostage in this situation.

Speaker 2 Sweetheart, I'm glad you said it so I didn't have have to. This sounds like scary manipulation.
$20,000, first of all, is below the poverty line.

Speaker 2 Let's start there.

Speaker 3 Yeah, that's kind of what I thought.

Speaker 2 And then after your rent is coming out of that, and after your car payment is coming out of that, is that right? He's paying for those two things?

Speaker 3 He bought my car, and I drive it. He maintains it within reason.
I suppose I still have to do like the major stuff on it. What kind of car did he buy you?

Speaker 3 It's a 2014 Honda CR-V.

Speaker 2 So not, not, you know, not a real luxury item here.

Speaker 3 How much did he spend on it?

Speaker 2 No, I know. I'm just trying to do the math here.
How much did he spend for?

Speaker 3 He bought it for $8,000. Exactly.

Speaker 2 So he bought you an $8,000 car that comes out of the $20,000. So he goes, now all I have to do is pay her $12,000.

Speaker 3 No,

Speaker 3 I still make,

Speaker 3 my salary is $20,000. He bought me the car,

Speaker 3 and

Speaker 3 my rent is kind of included without having to pay for that salary of $20,000. Oh, okay.

Speaker 2 The way you worded it, I thought it was coming out of the $20,000. So you're making $20,000, period.

Speaker 3 But why?

Speaker 3 That's it.

Speaker 4 Why are you, why would you stay at, how old are you?

Speaker 3 I'm 28. Why would you stay

Speaker 3 here in December?

Speaker 4 What's causing you to stay at a job that's that's paying you $20,000? That's not a living wage.

Speaker 3 I feel like I'm barely making it by.

Speaker 3 Yes, but what's causing you to stay there?

Speaker 4 Of course you're barely making it by, but what's causing you to stay there and not go for another job? Because you could, my point is you could go to Target and make more.

Speaker 3 Or Walmart. I don't have a Target around me.

Speaker 3 Uh-oh.

Speaker 2 Now, Isabel, don't start making excuses.

Speaker 2 Answer the question. What is keeping you? Well, let me ask

Speaker 2 another backstory question. Are you living with him?

Speaker 3 Sure.

Speaker 3 Yes. Okay.

Speaker 3 Okay. Yeah, we've been dating for three years.

Speaker 3 Okay.

Speaker 2 When did the bar?

Speaker 3 Okay, hold on.

Speaker 2 When did the bar job

Speaker 2 happen? When did you start working for him?

Speaker 3 About four and a half years ago.

Speaker 2 What were you doing before that? For work?

Speaker 3 I've always been a kitchen person,

Speaker 3 and now I'm kitchen manager and I'm

Speaker 3 for his bar.

Speaker 2 And is his bar, is it struggling? Is he just scraping by as well? Or is it doing okay?

Speaker 2 Is it doing well? What do you know?

Speaker 3 He makes $7,000 in a weekend.

Speaker 2 Okay.

Speaker 3 We don't talk about finances, to be honest. Okay.

Speaker 2 And does he pay for all of your he pays for everything except for a little bit of spending money that you have from the 20? Is he covering all your bills or are you covering other things?

Speaker 3 No, I'm covering other things. I'm in debt $3,500

Speaker 3 because I was trying to help my mom because she was a single mother. Okay.
And

Speaker 3 it's complicated, but.

Speaker 2 Okay. Well, your whole situation is complicated.
How old is he?

Speaker 3 He just turned 40.

Speaker 2 I had a sense of that.

Speaker 2 I'm not a relationship expert, nor am I going to try one, but I think this is a manipulative relationship at best

Speaker 2 and I think that you think you can't do any better you've been making twenty thousand dollars a year for four and a half years I'm guessing

Speaker 4 three for three years what would happen if I tell me honestly what would happen if today you said to him hey I'm not gonna work at the bar anymore I'm not making enough money I found another job and I'm gonna take that job instead what would happen

Speaker 3 well we've had that talk before and he would kick me out I would no longer work there and I would have to find another job.

Speaker 4 Okay, so there it is.

Speaker 2 Yeah, we got a weird.

Speaker 4 This is

Speaker 4 that right there, Isabelle. I knew that that was the answer, and I just wanted you to say it.

Speaker 4 Do you think that you can stay with somebody like that that doesn't want you to get ahead and be able to stand on your own two feet?

Speaker 4 Do you think it's healthy or safe for you to be with someone like that?

Speaker 4 I mean, not entirely.

Speaker 3 I guess what I really am trying to do is work my way out of my debt.

Speaker 3 But how can you?

Speaker 4 He won't let you earn any money. He's controlling you.

Speaker 3 Yeah.

Speaker 2 Okay, now here's the answer. Isabel, here's the answer.
The only way you work your way you're out of debt and stay in this abusive relationship, because that's what this is.

Speaker 4 100%

Speaker 2 is you're working a part-time job.

Speaker 3 Based on what you've told us. No, no, I don't work a part-time job on salary.
I'm 90 hours a week. No, it doesn't matter.

Speaker 4 You're working 90 hours a week to make $20,000 a week.

Speaker 2 That's what I'm saying. Isabel, I'm trying to help you understand.
There is no way to work out of this.

Speaker 2 And Jade and I, and anybody on the Ramsey show, is going to tell you there's always a way to work yourself out of it, but there's no way to work yourself out of it in this situation where you're working 90 hours a week.

Speaker 2 You are an indentured servant. Look it up.

Speaker 2 That's what this guy's got you turned into. You're basically working for your livelihood, meaning.

Speaker 2 He's just going to give me rent. He got me the $8,000 car.
He's got you underneath his thumb. And there's no way for you to get out of this other than you break up with this guy.
You You have to.

Speaker 2 And you go work, you go get a good job and you start over.

Speaker 4 Well,

Speaker 4 I want to flip the script on you in a couple of ways. What did you think we were going to tell you?

Speaker 4 Because you said, you know what, I really need something. I'm going to call these folks on the radio.
What were you hoping we might tell you?

Speaker 3 I guess I really didn't know. Yeah.

Speaker 3 So

Speaker 3 we're on your side. I've been thinking it for a while.
And

Speaker 3 I

Speaker 3 guess I maybe just needed some

Speaker 3 reassurance.

Speaker 4 Listen, I'm going to tell you right now.

Speaker 4 We love you. We do.
We want the best for you. You can't stay with this guy.
No. You cannot.
He's not going to let you get ahead. He's controlling you.
And it's tough because he's 40 and you're 28.

Speaker 4 And you've been with him for three years. And it seems like he holds all the power and all the cards because right now he does.

Speaker 4 But that doesn't mean that you can't go out and get yourself a job and get ahead. I think that this, it's like you're under a glass.

Speaker 2 I got to say this, Isabel. You've been with him four and a half years.
Did I hear that right?

Speaker 3 Well, I've been working with him four and a half, but we've been dating for three or three years. I'm sorry.

Speaker 2 But that puts you at about 25 years of age, and you've had to help your mom. You went into debt three grand to help your mom because she's a single mom.

Speaker 2 And my guess, there's this abuse that runs in your past. And I think you're terrified of becoming your mom.
So this guy at 40 years of age, as manipulative as he is,

Speaker 2 he represents safety for you. That's what I think is going on.
And I'm going to recommend that you.

Speaker 3 Maybe, yeah. No,

Speaker 2 it's exactly what's going on. And I want you to go to some friends and family that love you and ask them if you can stay with them.
You get yourself a new job. Let's get on our feet financially.

Speaker 2 Go see a therapist. That's your homework assignment.
But I think

Speaker 2 you got to break up with this guy or I need to take a break and you need to see yourself. You don't have to do a full breakup, but take a break.

Speaker 2 Let's leave. Go spend some time somewhere else, and maybe find a job.
Not maybe, find a job where you can make some money and let's see what life feels like on the other side of this.

Speaker 2 Because I think you've gotten pulled down. And if you've got any money that you can get a therapist with, go see a therapist and get a real professional opinion on this.

Speaker 4 Hey, y'all, you know, I'm all about keeping your budget in check, especially during the holidays. And that's why I always start my grocery shopping during the holidays at Aldi.

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Speaker 2 Hey, folks, if you're enjoying the show and it's helping you and you think it'll help others, would you help us help them?

Speaker 2 And you do that by liking, subscribing, following, sharing all of the buttons. You know how they are.
And so, whether that's podcast, YouTube, however, we'd love for you to share the show.

Speaker 2 And that helps us spread the good word. Alice is up in Albuquerque, New Mexico.
Alice, how can we help you today?

Speaker 3 Hello. Thank you so much for taking my call.
My question is: Does it make more sense to contribute money to a spousal Roth IRA

Speaker 3 or continue doing what I'm doing, which is currently setting money aside in an emergency fund and other expected expenses such as vacation, maybe a future car purchase, et cetera?

Speaker 3 My husband's going to continue working for about another 10 months to 12 months.

Speaker 4 Okay. So this is in, this is you planning for retirement?

Speaker 3 Yes.

Speaker 4 Okay.

Speaker 4 How old are you guys?

Speaker 3 I'm 65. My husband is 64.
I retired in 2015 to take care of my mother, and then I took care of my sister who had early-onset Alzheimer's.

Speaker 3 And so I've been out of the workforce for quite a while.

Speaker 4 Okay.

Speaker 4 And so

Speaker 4 tell me what you you guys have so far in retirement.

Speaker 3 Together, we have about $1.5 million

Speaker 3 in 401ks, 403Bs, Roths, and my husband has a PSP.

Speaker 4 Okay.

Speaker 4 And is there anything else? Tell me about your other assets. Do you own your own home? Do you still have a payment? Tell me about that.

Speaker 3 Our home is paid off. Our vehicles are paid off.
My car is a 2012,

Speaker 3 and I don't have to have a brand new car. That's not my thing.
I'd rather not have a payment, but I know that I might have to purchase a car in the future.

Speaker 3 So that's one of the things that I plan on setting money aside for as well. Okay.

Speaker 3 And otherwise, we have minimal credit card debt, and we pay groceries, utilities, cable, internet, our phones, and that's pretty much it.

Speaker 4 Okay, got it.

Speaker 4 What's the homework worth? What's the home worth?

Speaker 3 There we go.

Speaker 3 In our area, probably

Speaker 3 about $350,000. Okay, good.

Speaker 4 Now, what's your husband work? You said he's working 10 to 12 more months. What's he earn?

Speaker 3 He currently earns about 80,000 annually. And so we've worked really, really hard to pay down debt.

Speaker 3 And I've been doing the

Speaker 3 spousal

Speaker 3 Roth contributions. And I've currently stopped.
I don't always have the money to do that. But my thinking was: does it make more sense to contribute to the Roth since he's going to be off work

Speaker 3 in about 10 to 12 months when he retires? Or do I just keep putting money away?

Speaker 3 And what I do, and I know this is probably something that you're not going to agree with, but I have little envelopes, in other words, little buckets, and I put money aside for an emergency fund.

Speaker 3 I currently have $10,500 set aside in the emergency fund.

Speaker 3 And then

Speaker 3 if things get better in Israel, that would be kind of our dream vacation

Speaker 3 to Israel. Okay.
And

Speaker 3 so for vacation funds.

Speaker 4 Okay. You know, I'm not mad at that.
I'm guessing he's

Speaker 4 continuing to contribute on his end to a Roth IRA as well. And so the spousal, you're kind of like, do we still need it?

Speaker 4 I like the idea that you've been saving an emergency fund because you do need some liquid money. We would suggest six months of liquid money.

Speaker 4 It's just good to have there so that you're not having to pull, you know, things out of investment for emergencies and things like that.

Speaker 4 Um, I'm not, my, my, um, my framework on this would be: you need to be investing at least 15%

Speaker 4 of the income. That's kind of where we sit.
If you're investing 15%,

Speaker 4 whether it's in Roth IRAs, spousal IRAs, 401ks, wherever you choose, everything else from there on, yeah, if you want to save up some more for vacation, if you want to have a little, if it makes you feel comfortable to have a little bit more cash money, I'm not upset with that.

Speaker 4 You guys are doing really, really well. $1.5 million in retirement.
I paid for $350,000 home.

Speaker 4 I don't think that you can mess this up at this point with the couple of thousand dollars that you're talking about here.

Speaker 3 Yeah, I agree.

Speaker 3 Question. Question for you.

Speaker 3 So the $1.5 million or so, I felt really comfortable with that, but for the last almost five years, things have gotten so much more expensive, and I would like to leave a little inheritance for

Speaker 3 my kids.

Speaker 4 Okay. And let me explain that so that you'll understand it.
So you've got 1.5 million here. Let's pretend that the interest on that is about 10.
10%, right?

Speaker 4 That's the compounding growth that's occurring. You could pull $150,000 a year from that and never touch the nest egg, essentially.
Does that make sense?

Speaker 4 Which is more than what your husband earns now. He earns $80,000 a year.

Speaker 4 So you'll have more than enough to continue to live. Plus, you both will receive Social Security, or at least he will.
Do you see what I'm saying? So

Speaker 4 there's definitely plenty of wiggle room there. You will have plenty to leave to your heirs or anybody that is going to be a beneficiary on this.

Speaker 3 Another question. So the money that I have in the little buckets,

Speaker 3 I keep, it's not invested. I keep it at home in envelopes in a safe.
And you might get mad at me there, but should I be putting that in a high-yield savings account like my emergency fund?

Speaker 3 That'd be great to do that.

Speaker 4 Now, I'm not going to lie to you.

Speaker 4 I have cash. I like having cash that I can get to.

Speaker 4 And I also keep my main emergency fund in a high-yield savings account. But that's just because I'm a real Ken, you you don't keep any cash in the house?

Speaker 3 Mm-mm.

Speaker 3 Okay.

Speaker 4 You don't keep any cash in a safe?

Speaker 3 Mm-mm.

Speaker 3 Okay.

Speaker 4 You're asking. I'm just saying,

Speaker 4 I like to be ready. Like, I got it.
I'm like on Jason Bourne. I've got the passports and the cash right there.

Speaker 3 I'm ready to go.

Speaker 2 I just know there ain't much you can do about it. You could have all that cash and the zombies will still get you.

Speaker 3 Oh, my point is. I don't worry about it.

Speaker 4 My point is, Alice, if you know, the 10,000, I would definitely put that in a high-yield savings.

Speaker 4 If it makes you feel better to have a little bit of cash on hand in the house, that's totally fine as well.

Speaker 2 The other thing is, like, people come knock on my house, try to take stuff on and go, you're welcome to my shoes.

Speaker 2 There's a decent amount of money there.

Speaker 4 Me too. There's no savings.

Speaker 3 I could set it live on radio.

Speaker 3 What's that?

Speaker 3 I just said it live on radio. That's all right.
They don't have your address.

Speaker 2 It's okay. We haven't told them who you are.
You're going to be okay.

Speaker 3 But yeah,

Speaker 2 the answer is yes. yes, your money is safe.
I feel it's very safe. Put it in

Speaker 2 a high-yield savings. That's the best play.
Why not get the money on it? Yeah, it's got a little bit of animals.

Speaker 3 It's in those envelopes.

Speaker 2 And so, yeah,

Speaker 2 that's why we.

Speaker 4 But I love how methodical you are, Alice. I just love how she's just been thoughtful about putting it in the envelope, put it to the side.

Speaker 2 And you guys are going to be fine. And I love how you walked her through the real numbers there.

Speaker 2 I think people need to know when you go, what's my number?

Speaker 2 In other words, what's the nest egg, the retirement nest nest egg to where I feel like, and I love the exercise where you walk through, and by the way, run the numbers. Yes.

Speaker 2 Run it on a 10%, run it on eight, run it on six,

Speaker 2 run it on four.

Speaker 4 Right. Run it on 10 and then you, and then take out 4% for inflation, right? And then all of that is helpful.

Speaker 2 Run those numbers so that you can see what it is you need and you make those adjustments. But you guys are going to be fine.

Speaker 3 I'm not worried about that at all.

Speaker 2 But you for real do the whole safe thing?

Speaker 4 Look at my face, Ken Coleman. Okay.

Speaker 2 Well, I'm not surprised. I'm not surprised.

Speaker 4 I think that, now, don't get me wrong. It's not to, it's not any, you know,

Speaker 4 I'm not going against the baby steps. I still do all the things that the baby steps say.
It's just in addition to, I feel good knowing,

Speaker 4 you know, something goes down and you just need to get to, this is me, you never hear me spin out like this, but something goes down and you just need to get to the airport and get out of the country.

Speaker 4 Right. I'm going to be ready to go.
You are ready.

Speaker 2 Yeah. Yeah.
You've got, you've got a little, you've got a little pack bag in the safe. It's all.

Speaker 3 There's no bag.

Speaker 4 It's just the documents in order.

Speaker 3 Oh, gosh.

Speaker 2 Oh, man.

Speaker 3 I just want to say that.

Speaker 4 I'm also a person, though, that when I go out of town, I text my brother and I'm like, here's where the will is. Here's where, like,

Speaker 4 I just prepare in that way.

Speaker 3 Yeah.

Speaker 2 Well, now, our whole family knows that. If something were happening, Stacey and I traveling, we've got a spot for that.
I get that.

Speaker 2 But in your scenario where you've got to get out of town, you realize everyone else is at the airport.

Speaker 2 So the only the cash does is put you at the front of the line for coffee because you're offering more money. It's a disaster by that that point.

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Ashley is up next in Indianapolis.

Speaker 2 Ashley, how can we help?

Speaker 3 Hi.

Speaker 3 So I'm a a realtor. So my commission actually goes through an LLC we just set up.
But I have a savings account where I've been putting my salary in, but it's been really sloppy this past year.

Speaker 3 So I really wanted to kind of get clear. We're on baby step two.

Speaker 3 So how should I be using that salary account? Should I put in like six months and dwindle it down and replenish it every quarter?

Speaker 3 Or should I have a full year's salary in there before I started attacking the debt?

Speaker 4 Oh, I see. Okay.
So

Speaker 4 are you the only,

Speaker 4 is it just you or you said you're married, right?

Speaker 4 I am married. Okay.
Does your husband work?

Speaker 3 He does.

Speaker 4 Okay. What is what do you bring in a year and what does he bring in per year?

Speaker 3 So this year I'm bringing in 130 and he's bringing in 40.

Speaker 3 Okay.

Speaker 4 So what does it cost on an annual basis? And we can look at this monthly.

Speaker 4 Let's look at it monthly. What does it cost on a monthly basis to make your household run?

Speaker 3 $4,000.

Speaker 4 $4,000. Okay.
So what I would be doing is,

Speaker 4 since you know that, it sounds like you're, whenever you get a big lump sum of money, you're throwing it in savings and you're just kind of filtering in your portion of whatever makes the household run every single month.

Speaker 4 Is that right?

Speaker 3 Sort of. So all of my commission goes into the LLC checking account, and then I put in what I know I need to get paid for the next couple of months, which is $2,000 a month.

Speaker 3 and that goes into our personal account.

Speaker 4 Okay. And then you're trying to understand: okay, with the rest of it, can I go ahead and start paying off debt or how much do I need to keep aside?

Speaker 3 Correct. Yeah.
Like, I should do like six months and then replenish it. Well, how about we come at it? Or if I should do a year.

Speaker 2 What if we come at it a different way? How about you tell us how much you have in savings or excuse me in the LLC account right now?

Speaker 3 Right now, we've got $13,000 in total. Okay.

Speaker 2 And how much debt do you have? And listed out for Jade's smallest to largest?

Speaker 3 Cool. So smallest to largest, we've got five in school loans.
Okay. Seven in a motorcycle.

Speaker 3 21 in car. And then 22 in credit cards.

Speaker 2 Okay. A few more questions about that.
What's that motorcycle worth if you or he were to sell that today?

Speaker 3 Ooh, he rides it an awful lot, so I don't know. It might be worth five.
Okay.

Speaker 2 You notice I I said if.

Speaker 2 I get it. And it's such a small amount.
You guys could knock that out, so we don't have to get rid of it. What?

Speaker 2 Okay, so Jade, you've got a picture of the debt right now.

Speaker 2 What do you have in the pipeline as far as home sales?

Speaker 3 So I have two that are pending past their contingencies. That'll be about $13,000

Speaker 3 in the next 30 days. And then I also have five active listings.
So

Speaker 3 we're looking at maybe 20 more thousand

Speaker 2 okay okay that gives you a better

Speaker 4 yeah you've got 13 coming and then maybe another 20 000 in active listings uh and there's already 13 there i probably

Speaker 4 if your husband made a little bit more money i might pull this number back but if i were you i'd want like

Speaker 4 two months there. Does that feel right?

Speaker 3 Two months in the in the account to know that I'll be okay. Yeah.

Speaker 2 So instead of 13, you said $2,000 a month is what you pay yourself. So she's saying $4,000.
Four or five.

Speaker 2 Okay, leave five. Let's say five, and that gives you eight to put towards debt.

Speaker 4 That's what she's throwing up. Does that feel like, and then on a regular occurrence, that five, if it goes down, you're always replenishing it to where it's always five?

Speaker 4 You're paying yourself your monthly amount, plus there's always five in the contingency account. Does that feel good?

Speaker 3 Okay, so more like an emergency account.

Speaker 4 Yeah, but I don't want it to be confused with your emergency fund

Speaker 4 because this really just is, it's kind of like if you have any other sole proprietor, you just want to make sure, hey, there's money coming in. I understand my income is very fluctuating.

Speaker 2 We would call this retained earnings in entree leadership land, right?

Speaker 2 And so, but what we're also trying to do right now is we're trying to coach you up on what you can do with the 13 that's in there right now and make some headway.

Speaker 2 You've got a $5,000 student loan that you could knock out immediately.

Speaker 4 And Done. And how much money would that free up in payment?

Speaker 3 Oh, it's like 50 bucks.

Speaker 4 Okay, it's still 50 bucks. 50 bucks is 50 bucks, which is great.
And then the next month, my goal would be to knock out this motorcycle.

Speaker 3 Yeah.

Speaker 2 Okay. That's 12 grand

Speaker 2 over two months. Can I be honest?

Speaker 4 I'd sell the motorcycle.

Speaker 2 Well, I was going that direction.

Speaker 4 I'd get the two, I'd take $2,000 so that you're not upside down and I'd sell it. That's what I would do.

Speaker 2 But you said he rides it a lot. That's what the only reason I, you know what I'd do? I'd challenge him.
Yeah. Yeah, I'd challenge him to go get a side hustle.

Speaker 2 What does he do, by the way, for $40,000 a year?

Speaker 3 He, so we actually live in Anderson, which is like a smaller market, but he is in training to become an electrician. So he is going to throw it out.

Speaker 2 He's going to crush it.

Speaker 2 Okay, you know what? For them.

Speaker 2 That's where I'm at.

Speaker 3 Yes, Joy.

Speaker 3 Excuse me.

Speaker 2 Ashley, sorry, sorry, sorry. Ashley, I think he keeps it.

Speaker 2 And you guys go all in on this and knock this out. But I'd knock the student loan out today.
I'd cut a check for five grand as soon as I got off the phone. Yeah, that's going to feel good.

Speaker 2 It's going to leave eight in there, Jade.

Speaker 2 And it's going to feel real good. Like, that's a massive momentum.

Speaker 4 Yeah. And then put the other three on the motorcycle.

Speaker 2 That cuts that in half, essentially.

Speaker 4 And then the next month, so that means in December, the whole bike will be paid off. And now you guys will be setting yourself up to work on the credit card debt.

Speaker 4 Now, is it one credit card for $22,000 or is it littler ones?

Speaker 3 No, it's there's two. Two.
They're basically split in half.

Speaker 4 Okay, so, okay, great. So, yeah, I would work on right after that.
Yeah, now you got

Speaker 4 one $11,000 card and the next $11,000 card. You guys are going to go so fast like this.
I love it.

Speaker 2 I love it. What's your anticipated timeline for him to start making the money as an electrician?

Speaker 3 I think he's due for a raise in six months, but about a year is when we'll actually know for sure when he'll get in there.

Speaker 2 I think you guys, if you really get after it, I mean, you're going to be a long way down the line here on paying off this debt by the time he comes into some really nice money.

Speaker 4 I think you're going to be done by the end of the year. Yeah.
Because I think you're killing it on real estate. Yeah.
Yeah. And I think the more of this.

Speaker 3 I'm not going to sell for not having it done now. That's all right.

Speaker 4 It takes a minute to get the bearings on this.

Speaker 2 Listen, we're not playing armchair quarterback and looking in the back and looking in the past. Ashley, you guys are a great young couple.
This debt is very manageable. I'm so proud of you.

Speaker 2 The thing that made me smile, by the way, Ashley, is when you told me what was in your pipeline. You know,

Speaker 2 five houses sitting out there. Let's see if we can stack two or three more on top of that.
That's a beautiful situation for you.

Speaker 4 And if he starts side hustling, yeah, mark my words. In 12 months, you're going to be out of debt.
He's going to be, you know,

Speaker 4 increasing his income greatly. You guys are going to be, it's going to be looking good for you.

Speaker 3 Right. Well, thank you guys a whole bunch.

Speaker 2 Yeah, you're in great shape. Head up, right? Super excited.

Speaker 2 We're going to put you on the spot before we let you go. What are the chances, Ashley, that you cut a $5,000 check today to pay off that student loan?

Speaker 3 102%.

Speaker 3 Whoa, how about that?

Speaker 2 That's what I'm talking about.

Speaker 3 That's like a nice birdie puck clap right there.

Speaker 2 I think that's fantastic. I love that.

Speaker 3 You know what I love about her?

Speaker 2 She said 102%.

Speaker 4 That means it's hatting and kin.

Speaker 2 I think she's cutting the check right now. That is.
That's great. Boy, that feels good, doesn't it? Describe for people from

Speaker 2 a person who, with your husband, you paid off half a million, what is it going to feel like to hurt? Describe the feeling for somebody who's yet to do it.

Speaker 3 Oh boy. Describe it.

Speaker 4 It's like nothing else because it never comes back. It's a stress that never has the ability to come back in your life again.

Speaker 3 It's deleted.

Speaker 2 Deleted. From the deleted files.
Yes.

Speaker 4 Yes.

Speaker 4 Evaporated. Men and blacked.

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Speaker 4 Alrighty then. Today's question comes from Catherine with a C in California.
She says, my husband and I make a combined income of over $250,000 a year.

Speaker 4 We have no debt other than our mortgage, which we're on track to pay off in two years. We follow the baby steps, budget every month.

Speaker 4 We have college funds set up for our two daughters and are intentional with our money, Jade. Here's my dilemma.
I love Christmas.

Speaker 4 And for years, we've only bought dollar store or thrifted decorations that don't last.

Speaker 4 I'd like to invest around $1,000 in quality Christmas decorations for our home that we can use year after year to build memories with our girls.

Speaker 4 My husband feels like this is frivolous and not aligned with our financial goals.

Speaker 4 But it's something very important to me, JDK.

Speaker 4 How do I approach this conversation with him in a way that honors our financial goals, but also makes room for meaningful spending? Ah,

Speaker 4 I'm just so mad that this is even a struggle. You guys have done so well with your money.
You've been so intentional.

Speaker 4 This $1,000 that really is a one-time expenditure because she's saying, can I spend $1,000 one-time, get some quality stuff?

Speaker 3 Yeah,

Speaker 4 this is not going to derail anything that you're doing in your world. No, you could put the thousand dollars out the window and let it blow away, and it's not going to change anything in your world.

Speaker 2 Well, I'd want to know. I wish she was on the phone because I want to know how much she spends every year that he's supposedly okay with, which by the way, he's not okay with.

Speaker 2 She's married to Ebenezer Scrooge on this deal. He doesn't care about Christmas decorations, he just doesn't care.
Yeah, right.

Speaker 4 But here's the thing. Here's the thing.
Let's talk about this because you and I are both married.

Speaker 4 There are things that Sam Warshaw will get excited about spending money on that, in my mind, it's like, this is so

Speaker 3 unimportant.

Speaker 4 Or I personally, it's not like that.

Speaker 2 I know. I know the story about his Halloween album.

Speaker 4 Bro, the man bought a Ninja Turtle costume.

Speaker 2 Straight off the movie lot.

Speaker 4 Straight off the movie lot. But he sold some stuff.

Speaker 2 We talked through it. He did it the right way.
He did.

Speaker 4 But my point is, that is just part of being married is there's things that

Speaker 2 get your spouse like, ooh, because he's responsible about it and this lady is responsible. So So the point I was making is, let's say, what do you think she spends?

Speaker 2 What do you think she spends every year on the cheap stuff?

Speaker 4 Oh, at the dollar store, she's probably spending like $15, $20 just getting some little doodads and stuff.

Speaker 2 I think she, you know, you got to sit down with him and go,

Speaker 2 babe, this is actually a very small amount of money in the grand scheme of what we do.

Speaker 2 I'll bet she spends about $100 to $200 a year. So if she goes, look, $1,000 for really nice stuff, it's going to get us five years worth of stuff.
We're not going to have to spend much at all.

Speaker 2 You just got to to speak the guy's language to one degree, but at the end of the day, you got to pull the wife card and go, Hey, you know what? We're doing great. Yes.

Speaker 2 We've suffered and sacrificed to be able to pay this house off in two years. Listen, Sparky.
Yeah. I'm putting my foot down.

Speaker 4 That's the part because I don't think she needs to spend a whole lot of time explaining why this isn't very much money.

Speaker 4 I think the guy knows math, and I think he knows that this is not a lot of money. He doesn't care.
It's just not a value to him, but he needs to understand that.

Speaker 3 It's valuable to her. Yes.

Speaker 4 Yes.

Speaker 3 Happy wife, happy life, man.

Speaker 4 You know, know, you got to turn the lights off at the end of the day. So let's make sure.
No. Do you know what I'm saying?

Speaker 3 Certain battles aren't worth the fight, Ken.

Speaker 2 You're talking to me. I just want people to know I'm giving out advice that I actually follow.

Speaker 3 Ken, say what's on your mind.

Speaker 2 You know, I'm about ready to.

Speaker 4 Say it. I know what you're thinking.

Speaker 2 Stacey has bought into what I call the great candy inflation.

Speaker 2 And in our neighborhood, several years ago, we discovered some houses are giving out full-size candy bars.

Speaker 2 I have

Speaker 2 a a fundamental problem with that.

Speaker 2 I think that you're a teenager, you go buy your own full-size candy bar. You don't get it at my house.
We're giving away free candy. You get the junior size.
I just think it's too much luxury.

Speaker 2 These kids have no hardship in their life. I know I'm off my lawn, but guess what? She thinks it's okay.
And guess what's happened the last three years?

Speaker 4 Papa sat back.

Speaker 2 Full-size candy bars I'm handing out this year as I sat on my front lawn with the fire pit. And here I am handing out full-size Milky Ways and having a bad attitude the whole time.

Speaker 4 But what did you understand that allows you to do it?

Speaker 2 That it makes Stacy happy. Boom.
And so therefore it needs to happen.

Speaker 3 Boom.

Speaker 2 And I can afford the full-size candy bars.

Speaker 4 You could have thrown them a budget item. You could have thrown them in the bonfire.

Speaker 2 I could have burned them. I almost did for principle's sake.

Speaker 2 I kid. I ain't ever going to throw a full-size Milky Way away.

Speaker 3 By the way, I did a little

Speaker 2 Mr. Coleman tax.
Did you? Before the kids got there.

Speaker 4 Oh, always.

Speaker 2 I had myself a Milky Way. You should have seen me sitting in the front.
The whole thing. Waiting for the kids to show up.
I went ahead and had myself a full Milky Way.

Speaker 3 Wow.

Speaker 2 Underrated candy bar.

Speaker 4 It's okay. It's not my favorite.

Speaker 2 Just saying it's underrated.

Speaker 4 You and I know what the dealio is. We know about the Butterfinger and the payday.

Speaker 2 Butterfinger is the best candy bar in the world. And I agree with you on that.
Joy is up in St. Paul.

Speaker 2 Joy, you're never going to get that much of your life back as we talk about candy bars, but we're here for you now.

Speaker 3 Fantastic. I was wondering if there's a Halloween version of Scrooge that we could call you, Ken.

Speaker 2 Oh, good call. Yeah, is there a grumpy Halloween movie character?

Speaker 3 Yeah. I think they're all grumpy.
I think it's a good thing.

Speaker 4 I think in an Adams family.

Speaker 2 But you know what? Truth is, Joy, I've gotten past it, and now I just go with the flow. And the kids go, wow, when I hand them their full-size candy bar.
So, you know.

Speaker 3 So good for you. Okay.
How can we help you? Fantastic. Okay.

Speaker 3 I am working a full-time job right now that I sort of like and a part-time job that I love and I am burnt out and I need to make a change and I've been doing I've been doing this for about a year and I'm just I'm over it so I think that my two options here are to number one quit the part-time gig that I love and just do the full-time thing that's more stable that I don't really like or I'm pretty sure I'm going to have a job offer come in at the end of this week for another part-time thing that will be in the field that I love so I could do the two part-time things

Speaker 3 together.

Speaker 2 Ooh, this is pretty simple, I think.

Speaker 2 Do both part-time jobs pay the same

Speaker 2 more or less than the full-time?

Speaker 3 Yeah, if I was just doing the full-time job, the two part-time jobs together is very comparable to what the full-time thing is.

Speaker 2 Okay, and if I heard you, you love both part-time jobs.

Speaker 3 I know that I love the one. The other one, you you know, I haven't done it yet, so I'm not 100% sure.
But I love that.

Speaker 2 Okay, but you know that that's up to you to determine in the job interview. And I want to tell you, Joy, that the job interview is for you, not for them.

Speaker 2 So many people think that we're always trying to impress everybody else. Pick me, pick me, love me, hire me.

Speaker 2 And I think the job interview is more for you to go, do I want to be picked by you? And so it's certainly important in this situation that you don't take this second part-time job unless you know,

Speaker 2 that you know, that you know, that you've got a good picture of what this thing's going to look like. And that's asking questions like, describe this job

Speaker 2 every day and every week. How much does it change? When it changes, what's it look like? Another fun question to ask the interviewer is, describe.

Speaker 2 A year from now, if I'm crushing it in my annual and you're saying, Joy, you crushed it. What did I do?

Speaker 2 People don't get asked those questions. That's a good question.
And you need to put it on them and just sit back and smile and keep asking those questions.

Speaker 2 Now, let me ask you another question very quickly.

Speaker 2 Are you in the full-time job because you just needed the income to pay off debt?

Speaker 3 We don't have any debt. We're at maybe steps five and six.

Speaker 3 But I did need more income because we do have a mortgage. And

Speaker 3 I wanted the full-time job because... you know, it's more stable.
I've been looking for a full-time job for three years and just kind of piecemealing together part-time, 1099, 1099, contract stuff.

Speaker 3 So that's why I took the full-time job.

Speaker 2 All right, but the point is, is you guys don't have to have the income. It's nice, but you don't have to have it.

Speaker 2 Or we have to have it, yes or no?

Speaker 3 No, we need more than what the part-time job can give me.

Speaker 2 All right, so my point is, I would go with the two part-timers if

Speaker 2 you do what I tell you to do and you ascertain through the interview process that this is in fact a great part-time job. Now, I've got two part-time jobs, and I say, Sayonara, out, I'm out.

Speaker 2 No longer doing the full-time job that you don't love.

Speaker 4 It's very simple. Okay.

Speaker 2 We keep the income, but now we got more joy. Pun intended there.
I did that on purpose.

Speaker 3 I couldn't help myself.

Speaker 3 Thank you.

Speaker 2 Yeah, yeah. You're a smart, smart lady.
I think you know what to do here. So do your due diligence.
And if the interview feels right and it's a good thing for you, go for it.

Speaker 2 Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Alongside the fabulous Jade Warshaw, I'm Ken Coleman.
Excited to be with you all.

Speaker 2 The phone number for you to jump in is 888-825-5225. Kelly is going to join us now from Syracuse, New York.

Speaker 3 Kelly, how can we help?

Speaker 3 Hi, thank you so much for chatting with me. So I have kind of a loaded question with a complex thing, but I'll just give you the basics up front.

Speaker 3 I am 37. My husband is 35.
We have two two boys. One is almost one.
One is two and a half. We have been working on baby steps.
We've probably got about 80,000 or so left.

Speaker 3 And

Speaker 3 other than that, we have no consumer debt. It is all either student loans or we owe my mother-in-law a little bit for helping with taxes.
But

Speaker 3 just this last week, I

Speaker 3 got diagnosed with brain cancer, actually.

Speaker 3 And so this, I'm just trying to like get a grasp on like

Speaker 3 what, what should we prepare for?

Speaker 3 Right now, we're on Medicaid. And so a lot of our medical bills are covered, but there's some

Speaker 3 fertility stuff and stuff that's not going to be covered. And I feel like we're always kind of teetering on the, are we going to qualify for Medicaid this year or not?

Speaker 3 And so just what, like, where should we start, my husband and I, as far as like

Speaker 3 Kelly, yes.

Speaker 2 You are, can I just tell you, the way you started off this call, I would have never guessed that you were about to tell us that you are an inspiration.

Speaker 2 I am blown away by your spirit. So I wanted to say that.
I wanted to say that our hearts are stunned for you. However, I'm inspired by you and I think you're going to beat this.

Speaker 2 I am blown away. So let's, so first of all, just know that we are, we're going to walk with you on this and we're, we're so, so sorry that you face, that you're facing this.

Speaker 2 The Medicaid issue, what is your income? What is your combined income? Because that's the income.

Speaker 3 It's income-based. Am I right?

Speaker 4 That's right.

Speaker 3 Yes, it is. So

Speaker 3 my husband is an independent contractor, so he can write off quite a bit.

Speaker 3 And so that is, you know, he can write off trucks and tools and miles and all that stuff. So that, I I think, has kind of kept us in that Medicaid age.
So what does he do for a living?

Speaker 3 He builds custom homes.

Speaker 2 He's the actual home builder, the general contractor.

Speaker 3 No, he's not the general contractor. He works for somebody.

Speaker 2 Okay, and what is he? And I understand, don't give me the fancy tax answer. Yeah, what's he taking home? What's his income in a year?

Speaker 3 I want to say we probably

Speaker 3 take home five grand a month. Okay.

Speaker 3 So is that 60?

Speaker 3 Yeah.

Speaker 2 Well, that's net 60.

Speaker 2 And it sounds to me like

Speaker 2 the Medicaid, you really need the Medicaid, but at the same time, I never want somebody to stay in an income bracket just to get government benefits.

Speaker 3 Totally.

Speaker 3 No,

Speaker 3 we know that. We don't want to do that either.

Speaker 4 Can you tell us about,

Speaker 4 and I'm not trying to get too far into it, but with your your cancer diagnosis, what are they saying? Is this something that they can go in and there's a surgery? Is this something that's ongoing?

Speaker 4 Do we not know what the future looks like?

Speaker 3 So this was

Speaker 3 literally Friday. We have like six appointments in the next two weeks coming up before Thanksgiving.

Speaker 3 We're meeting with, you know, all kinds of doctors. And, you know,

Speaker 4 you don't know yet.

Speaker 3 All of the people,

Speaker 3 yeah, we don't know.

Speaker 3 the understanding that we have so far is that it's not in the greatest spot but surgery could still be an issue but there's probably going to be some type of treatment we just don't know exactly what that is yet okay well high level here's what we would tell you that right now we're pressing pause yes on the baby steps and we're stacking cash

Speaker 2 so This is what we would tell someone if they knew a baby was on the way and we have unknown expenses. So it certainly falls in that category.
So you press pause.

Speaker 2 Do you know off the top of your head how much you've been putting towards debt a month?

Speaker 3 I want to say, so we are in kind of a

Speaker 3 lucky, I guess I'm going to say lucky situation right now is that

Speaker 3 lucky and bad, we moved in to my mother-in-law's house to take care of her, who has a version of Parkinson's. So add that on top of this.
Wow. So we are currently, we have a house

Speaker 3 that we have good friends who are just renting straight from us.

Speaker 2 And you're not paying for your current living, you're not paying the mother-in-law, correct?

Speaker 3 Correct. We are not paying for her.
We're not.

Speaker 3 So

Speaker 3 that's great news.

Speaker 3 But

Speaker 2 I want to come back to the reality of where we stand as of Friday hit us. What were we putting towards Baby Step 2? Total? What were we putting in payments?

Speaker 3 I was going to say

Speaker 3 $2,000-ish.

Speaker 2 Great.

Speaker 4 Yeah, so that's the idea.

Speaker 4 The idea here is we're stacking up as much cash as we can, keep that same intensity that you were, and put that money aside because the long and the short end of it is your husband may be missing days of work.

Speaker 4 There's going to be days of takeout. There's going to be you possibly hiring a cleaning service.
There's going to be needing other help with

Speaker 4 the mother-in-law since you guys may not be able to help in the same ways that you were, right? There is, there's a lot of,

Speaker 4 and I don't say this in the way that you're a burden, but there's a lot of inconvenience coming this way because you guys must deal with this.

Speaker 4 And so, having the extra money set aside to where it's not a financial problem or struggle is going to give you guys so, so much peace while you're busy getting well and

Speaker 4 recovering from this.

Speaker 3 And so, that Ken is exactly right.

Speaker 3 So, as part of that, like

Speaker 3 there's a couple of like small questions.

Speaker 3 He has a truck that might be worth $20,000.

Speaker 3 I'm not sure if it's quite that much.

Speaker 3 We do own our house. If we sold it, we could maybe walk away with $50,000.

Speaker 3 And so as far as those two, are those things we should consider selling? Well, what would he wait to see all that happens?

Speaker 2 I would definitely hold on the house.

Speaker 2 Don't do anything in the house. The truck, though, does he,

Speaker 2 what would he make if he sold it for 20? What would would he make on it?

Speaker 3 We paid, we've paid it off, so we can walk away with 20, but we need to find something.

Speaker 2 Oh, I see what you're saying.

Speaker 3 I wouldn't.

Speaker 4 No, nothing's on fire yet. Yes, you guys have the debt.
You're covering the minimum payments, no problem. You have the $2,000 of margin.

Speaker 4 I get wanting to really go hard at this, but let's, I mean, like you said, this is still so early. Let's go through the next series of appointments that you have coming up.

Speaker 4 Let's get a little bit more information. And you can call us back, too,

Speaker 2 Kelly, Kelly, if you as a matter of fact, do yeah. As this goes, call us back.

Speaker 3 Okay.

Speaker 3 And that way we can help you keep learning.

Speaker 3 All right. We only have about 50 seconds.
Hit us super fast. That's fine.
Go ahead.

Speaker 3 We owe my mother-in-law about $5,500. She's a little bit salty for for paying for some of our taxes.
Should we work on paying that back as a minimum payment?

Speaker 4 No.

Speaker 4 It's storm mode, and you're doing her. This is the same one that you've been taking care of, I think.
Yeah, so you're doing her a solid, she did you a solid. Right now, yeah, let's call it even.

Speaker 2 That's exactly right.

Speaker 3 Hold, hold, hold.

Speaker 2 Everything we're focused on is taking care of you, doing what the doctors tell you, fight this thing. And I'm going to tell you something.

Speaker 3 Uh,

Speaker 2 Kelly, your spirit is going to serve you so well. Keep that chin up.
I'm so blown away by your spirit. Yeah, what a phenomenal lady you are.
We're praying for you, Kelly.

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Speaker 2 All right, let's go to Richmond, Virginia. Jason is there.
Jason, how can we help?

Speaker 7 Hey guys, thank you so much for taking my call.

Speaker 3 Sure. So

Speaker 7 my dad owns a small electrician business, and he wants to buy a $90,000 truck for his business so he can use it as a tax write-off. Sure.

Speaker 7 He's never been adverse to going into debt. Okay, that's good to know.

Speaker 7 So he's never been adverse to going into debt, and he thinks that if he gets this truck, he will not have to pay taxes to the government, and he'll be able to take that money.

Speaker 7 and just put it into a truck that eventually he'll keep. Right.

Speaker 7 He owes from last year in his taxes, but I think that's the result of him making a little bit more than he thought.

Speaker 7 It wasn't like

Speaker 7 he was not paying or anything.

Speaker 3 Right.

Speaker 7 So he owes, and he's expressed that he doesn't even need the truck. He just doesn't want to pay the taxes.

Speaker 1 100%.

Speaker 3 Yeah, I've heard this before.

Speaker 2 We've all heard this before. And

Speaker 2 it's such a weird mental trade-off where people go, wait a second, I'm going to spend money, my money, in order to pay less taxes. And we think that's some sort of a good deal.

Speaker 2 And I can't even imagine what a payment is on a $90,000 truck.

Speaker 4 Yeah, because he's going into debt for it, correct?

Speaker 2 Correct. Yeah.
So you've got to help him. Dad, you're going to spend.

Speaker 2 I'm going to guess it's $800,000, $900, maybe over $1,000 a month. I have no idea what he's going to put down.
That's a world that I don't even know. So I don't even know how to estimate.

Speaker 2 But it's going to be a big chunk that he doesn't even need. So you got to kind of go, dead.
You just told me you didn't need the truck. That means you don't need the $900 a month payment.

Speaker 2 And you're all, you're doing all of this because

Speaker 2 you like the way it makes you feel because you're paying less in taxes. It's just such a weird financial trade-off.
And it never makes sense when you get it all out on paper. Yeah.

Speaker 2 But in your head, with no one else. pushing you on it, it seems to make a lot of sense.
Jade, you've heard this more than I have. You've coached people through through this.

Speaker 3 Your thoughts?

Speaker 4 Back in the day, you know, when my mother-in-law did our taxes, she was telling us to do the same thing. You got this money sitting in the business, you need to go do this, you know, spend it.

Speaker 4 Well, my bigger question is: before we even get into all the odds and ends, will your dad listen to you? That's the real question. If you tell him, hey, dad,

Speaker 4 listen, going into debt to avoid a couple thousand dollars on taxes is not the move,

Speaker 4 what would he even say to you?

Speaker 7 Yeah, I mean, we've talked about it, and he, um,

Speaker 7 I think he takes my opinion into consideration.

Speaker 3 Um,

Speaker 3 what's the numbers

Speaker 7 by that? I mean, like, oh, sorry,

Speaker 4 did he tell

Speaker 4 when when you told him, when he told you the plan and you spoke back to him, what were the actual numbers? How much is he going to save specifically? That's what I want to know. And does he even know?

Speaker 3 Right. Yeah.

Speaker 7 Yeah. And that's like something that, like, I have a computer science background.
I'm pretty good with numbers. What I'm not good with is the tax code.

Speaker 7 So that's really like what I've been having a hard time figuring out what is deductible so that I could give him a

Speaker 7 like a factual number of how much he would save.

Speaker 4 It's not going to be over $90,000. I can tell you that.
That's the point. The point is he's going to put $90,000 on his name.
He's going to add that in the plus category on his side.

Speaker 4 And I can guarantee you the savings is not going to be as such. That alone, does that make? I mean, I don't need to tell you that, but do you see what I'm saying?

Speaker 3 Yeah.

Speaker 3 Yeah, I guess what he's,

Speaker 7 yeah, I guess it's like with the tax savings, it could be around 20 to 30 grand that he saves.

Speaker 7 And so like he'd still have like a $90,000 truck that he paid 60 to 70 for.

Speaker 7 So I guess that is like a huge luxury. Like you don't need that.

Speaker 4 So why would he have only paid 60 to 70 for the truck? He's paying $90,000 for the truck.

Speaker 1 Right.

Speaker 7 I just mean like if he like I don't and I don't know these.

Speaker 3 Oh, you're saying after the savings, after the taxes? Yeah. Yeah.

Speaker 4 No point of it. No part of that makes sense.
He's he's spending money, but he's not making any money per se because he didn't even need the item to begin with.

Speaker 4 That's the equivalent of me just being going to the store and being like, well, I bought this thing. It was on sale.
Usually it's this, but it's 50% off. So I just got it for 50% off.

Speaker 4 But it's like, yeah, but you still spent

Speaker 4 $60,000. That's essentially what he's doing.
Is he saying, I can get a truck for 30,000, for 30% off. No, I don't need a truck, but I'll just get one anyway.
That's the equivalent.

Speaker 4 Maybe if you explain it to him like that, it'll help him understand.

Speaker 4 But

Speaker 4 I have a feeling he might do it anyway.

Speaker 2 I think so too. He can punch in the numbers.
I just did a little, I mean, this thing is all

Speaker 2 important. Well, first of all,

Speaker 2 if it qualifies

Speaker 2 as many full-size pickups do, it's the GVWR over 6,000 pounds.

Speaker 2 So if it's over 6,000 pounds, you could potentially write off the entire $90,000, but it still doesn't qualify in something we'd recommend because he's going into debt for it. Right.

Speaker 2 You know what I mean? If he's flush with cash and he's just, you know,

Speaker 2 but going into debt for a tax deduction, but then there's also scenarios where he might only be able to write off,

Speaker 2 you know,

Speaker 2 Section 179 deduction limit for 2025.

Speaker 2 He might only be able to write off 31,000. So he needs to get with a tax pro.

Speaker 4 Yeah, find out more about it.

Speaker 3 If there was a situation where he was paying cash, yeah.

Speaker 2 If you're paying cash, sit with a tax pro. But if you're going into debt, this makes zero sense.

Speaker 4 Agree. I would agree to that.

Speaker 3 I would agree to that.

Speaker 2 all right jason i wish i wish it were different you you've got your work cut out for you yeah and definitely it's not your life yeah yeah but i mean run the numbers if you'll if he'll listen to you run the numbers and show him on paper right and just walk him through it and go and and you by the way you got to make it simple so you're going to pay this much over the life of the loan

Speaker 2 okay you're going to pay this much per month yep to get this savings all to get this and you already owe the federal government taxes it's got to be super simple. You can't debate emotionally.

Speaker 2 You can't say things like, this makes no sense. The Ramsey people said this.
None of that's going to work. It's got to be real numbers.

Speaker 2 And even then, to your point, Jade, somebody goes, you know, I'm going to do it anyway.

Speaker 4 I mean, we've all been guilty of going to the store. We didn't plan on getting anything, but we see that it's 40% off.
And we go, well, that's a good deal.

Speaker 4 And,

Speaker 4 you know, I haven't put anything on a credit card in over a decade, but plenty of us would swipe a credit card to get the thing that we don't need simply because it's 40% off.

Speaker 4 That's essentially what's going on here.

Speaker 2 Yeah. And we do it even if it's not debt, if it's debt.
I mean,

Speaker 2 I'll buy stuff sometimes that I walk by and I go, well, that looks nice. Right.
And then I see the deal on it. I go, well, now that feels nice.
Yeah. I don't need it.

Speaker 3 Yeah.

Speaker 4 But the point is there's levels of how irresponsible that looks. It's one thing if you had cash.
It's one thing if you needed the thing. Right.
You found it on sale. You paid cash.
Great.

Speaker 4 You got the savings. Next level is I didn't need the thing, but I did spend my own money and I paid cash for it.
That's right. That's debatable.
It's debatable.

Speaker 4 Then the third tier is: I didn't need the thing. It was on sale.
I bought it and I bought it on borrowed money. That's when we're getting into Dumbo territory.

Speaker 2 And by the way, this age-old argument that we've heard on the show a million times,

Speaker 2 it's all rationalization. So I want people to understand that what's happening here with Jason's dad is it's rationalization.

Speaker 2 I don't need the truck, Probably don't even want it, but it might be a fun toy, but I can justify it if there's a good cause attached to it. So we don't even run the math.

Speaker 2 We don't even think of the logic.

Speaker 3 We said the word taxes.

Speaker 2 It's like it's a good cause, right? Because people hate getting taxes. You feel like you're sticking it to the government.

Speaker 3 Right. And you're really not.
Right. You know?

Speaker 2 You know what I mean? And here's one for you.

Speaker 2 What's the tax? What are the taxes on a $90,000 truck, Jay?

Speaker 4 That's what I'm saying.

Speaker 4 You're paying taxes? Yes.

Speaker 2 Yes. I hate to be like sticking it to you over there, pops, but you know,

Speaker 2 you're paying taxes on that car

Speaker 2 as opposed to just holding on to that cash.

Speaker 4 Right. And can we talk about that for a second?

Speaker 2 How about getting current with your current tax bill?

Speaker 3 I love that. Love that idea.

Speaker 4 That's fantastic.

Speaker 3 Item one,

Speaker 2 Jason's dad.

Speaker 3 Let's go ahead and get current on what we owe the IRS. Oh, man.

Speaker 2 Last time I checked, they are not fun to deal with.

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Let's go to Susan, who is in New York City. Susan, how can we help?

Speaker 3 Yes, hi. Thank you for taking my call.
Sure. So I'm a 69-year-old divorced woman that has four adult children in their 20s.
I own a home worth about $780,000 with about a $380,000 mortgage left on it.

Speaker 3 I have only

Speaker 3 about

Speaker 3 $5,000 in credit card payments that I

Speaker 3 have left.

Speaker 3 My question is, is that I would like to build a little detached

Speaker 3 mini house, I guess a small tiny house,

Speaker 3 for me to live in off the side of my house, which I can do as like a senior living situation. And then I want to rent out my three-bedroom, two-bath house for about $4,500.

Speaker 3 And I have made an apartment also downstairs for another $2,000 that I could rent out.

Speaker 3 And then I would live in my tiny house. How do you feel about doing this for my end-of-life retirement plan?

Speaker 4 I don't like it. I don't like it either.

Speaker 3 Why?

Speaker 4 Because it's A, requiring you to go into more debt in order to do it. That's thing one.
And it's requiring you to be a landlord in

Speaker 4 older age because it's like you said, this is right thing.

Speaker 3 Yeah, I'm a contract. I've been a contractor, though.
So, you know, that part is easy for me. What do you mean?

Speaker 3 I'm a general contractor. Okay.
How old are you?

Speaker 4 I'm 69. 69.

Speaker 3 I've been a contractor for 30 years. Yeah.

Speaker 2 Yeah, but but but to Jade's point, this is not a know-how. You know how to do stuff.
Totally impressive. It's just a function of is that something that you want to lock into?

Speaker 2 What happens when you can't physically do it? It's not the know-how. You've got the knowledge.
But as you age.

Speaker 3 Well, then I would, yeah, I would get it. Then I would have, if something came up, then I would have to get help, of course.

Speaker 2 What are the numbers? Well, first of all, we're never going to tell you to borrow money. So the answer is no to borrowing money to build a tidy home.

Speaker 2 If you save up and pay cash for it after you've walked the baby steps out, which we teach, and you already have $5,000 in credit card,

Speaker 2 and Jade can walk you through that in a second.

Speaker 2 But I just want to know for the rest of the numbers, if you rent out your home, plus the bedroom in the basement or whatever, and I think you gave us about $6,500 a month in rent that you believe you could get.

Speaker 2 Did I get those numbers numbers right?

Speaker 3 That's correct.

Speaker 2 Okay, what do you owe on the home? So $6,500 is what you're taking in.

Speaker 3 What do you owe every month? So my

Speaker 3 about $2,800.

Speaker 4 So the mortgage is $2,800. Can I just ask a simple, because there's a solution here that I'm just wondering about.
Why wouldn't you,

Speaker 4 the mortgage is $2,800 a month. Why wouldn't you stay in the three-bedroom, two-bathroom part and just rent the apartment below?

Speaker 3 Oh, that's not going to give me enough. It's not just not going to give me enough money.
Okay, so

Speaker 4 let's solve a little bit more of that because then you'd be paying $800 a month for a mortgage, which I don't think you're going to live anywhere cheaper than that.

Speaker 2 No, that's a fantastic number.

Speaker 4 So let's talk about this. So you've got this house.
I'm going to hold it to the side for now. It's worth $7.80.
You said you owe $380. Is that correct?

Speaker 3 Yes.

Speaker 4 Okay. So you've got some nice equity there.
You've got only the only debt in your name is the $5,000 in credit cards. Is that correct?

Speaker 3 Yes.

Speaker 4 Okay. Is there any money? Is there any other debt anywhere?

Speaker 4 No. Is there any other money anywhere?

Speaker 3 No.

Speaker 2 You have no savings?

Speaker 3 No savings.

Speaker 4 And what are you earning right now? Because you said you're a contractor.

Speaker 3 I would say roughly only between, say, $50,000 to $60,000.

Speaker 4 Okay, about $60,000 a month. No, no, a year.

Speaker 3 Oh, yeah, I'm sorry.

Speaker 4 You're right. A year.

Speaker 4 And what's your Social Security?

Speaker 3 Very little. 800.
Nothing.

Speaker 4 800. Okay, so that's nothing there.

Speaker 2 And you have no retirement accounts at all?

Speaker 3 Nothing.

Speaker 4 So

Speaker 4 I think for you, I didn't want to say this because I was hoping that there was a way to get to it. I mean, I can ask realistically how many more years you plan to work.

Speaker 3 Probably, I would say 8 to 10.

Speaker 4 8 to 10. We could do something with that.

Speaker 2 Yeah, we got to, we got to pay this credit card off.

Speaker 4 We're going to do that

Speaker 4 immediately.

Speaker 4 And then from here on, we've just got to start stockpiling. We've got to start stockpiling retirement.
That's what you've got to do.

Speaker 4 Because if you got, if you can work for 10 more years, we can turn this around a little bit for you.

Speaker 4 forego selling the house as long as possible. And that would be my plan would be for 10 years, I'm going to save as much of my income as I possibly can.

Speaker 4 I'm going to rent out this lower apartment and then I'm going to look up and in 10 years, I'm going to reevaluate. Can I keep this house and can I live off of what I've stockpiled here?

Speaker 4 Or do I need to sell this house and by then, hopefully, it's grown in value a couple hundred thousand dollars more.

Speaker 3 Okay, so my ultimate goal is to keep my house for my family, my kids, you know. So this is the only way that I could think that without, you know, that that that would work.

Speaker 3 Well, I appreciate that.

Speaker 3 And I want to keep the equity of that, of the house for them to, you know, they're not going to, it's going to be very difficult having four children that are, you know, in their 20s to buy a house these days.

Speaker 3 And so really that's, that's why I was thinking that this, this plan would be something that would, you know, possibly enable that to happen.

Speaker 2 Well, but Jade's, did you understand Jade's plan? Jade's plan allows you to keep the house.

Speaker 4 Yeah, because if you think of,

Speaker 4 let's run some real numbers here for a minute. Let's say right now, what are you making? Around $4,100 a month?

Speaker 4 Roughly, yeah. Okay, so let's say you rent down the rent out the downstairs apartment.
So you're paying $800 a month in mortgage.

Speaker 4 Let's say you picked up some other work somehow, some other things that you could bring in some money.

Speaker 4 If you could get to the point where you're putting away $2,000 or $1,500 a month into retirement, in 10 years, that's $400,000.

Speaker 4 That ain't bad. To have that at 79 years old and you could draw some off that,

Speaker 4 right?

Speaker 4 And suddenly that's not looking so bad.

Speaker 3 When you say draw, you say draw some in what way?

Speaker 3 Well,

Speaker 4 I'd want to see if there's any way that you can

Speaker 4 for sure off the growth, so maybe 10%

Speaker 4 and work with the Smart Vestor Pro to say, what is this? How long is this going to last me? What can I take from this to where I can take from this until I'm 85 or what have you, 95?

Speaker 4 And I'd work with the Smart Pro to get that number. And then that's buying you time of not having to sell this house.
That's right.

Speaker 4 Because if you can live off that nest egg, that's another day that you get to keep this house for your family.

Speaker 3 Yeah, I get that. You see what I'm saying? That's my main goal.
Yeah, no, that's my main goal.

Speaker 2 Or listen, here's an alternative. And we're trying to get you some retirement income of which you have none.
Okay.

Speaker 2 But if you don't decide, if you decide not to do that, go with your plan, I would at least wait and pay off your credit card debt and I'd save up the money for the tiny house.

Speaker 2 If you're going to go your route, don't go into debt is my point. I love Jade's route.
It's the route.

Speaker 3 We got to think about you long term while you're healthy.

Speaker 4 Because your Social Security is going to pay for the rent. So you could easily live off two, invest two.

Speaker 4 That's what I would do all day and not go into more debt.

Speaker 5 Hey, George Camill here. So you're thinking about buying or selling your home.
It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Speaker 5 Well, here's the good news: you don't have to tackle the process alone.

Speaker 5 Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence.

Speaker 5 You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly, What's Not to Love?

Speaker 5 So, if you're ready to take the next steps toward your home goals, go to ramseysolutions.com/slash real estate. That's ramseysolutions.com/slash real estate.

Speaker 2 Our scripture of the day comes from Luke 11, 9,

Speaker 2 verses, excuse me, verses 9 and 10. So, I say to you, ask and it will be given to you.
Seek and you will find, knock, and the door will be opened to you. For everyone who asks, receives.

Speaker 2 The one who seeks finds.

Speaker 2 And to the one who knocks, the door will be opened. Our quote of the day from Ronald Reagan: We can't help everyone, but everyone can help someone.

Speaker 4 All right.

Speaker 2 Sadie is up in Grand Rapids, Michigan. Sadie, how can we help?

Speaker 3 Hey, so my question today is: should my husband and I pull out our retirement to pay off the last of our consumer debt? No.

Speaker 3 Okay.

Speaker 3 So we're

Speaker 3 up to

Speaker 3 it is up to. We paid off

Speaker 3 $12,000 of credit card debt from our selling property.

Speaker 3 And we have $39,000 left on a vehicle, and that is our only vehicle.

Speaker 3 And so we were thinking, you know, to get out of debt right now and to be at a better point should we pull that out.

Speaker 2 Do you understand? And if you don't, it's okay. We'll explain.
Do you understand why we both said no in unison?

Speaker 3 I believe so.

Speaker 3 Explain.

Speaker 2 Well, no, you tell us. It's always better if you get it without us having to explain it.
Why do you think we said no?

Speaker 3 Well, I mean,

Speaker 3 it's already invested. It's already in the works, and you have to pay penalties as well as taxes.
Yes. You got it.

Speaker 3 You got it.

Speaker 2 And can I just say there's no shame in your game? We're not judging you. I love that you've had it.
Yeah. And this is all a result of having it.
It's exciting.

Speaker 3 You just have had it.

Speaker 3 We want to pay it off today. Yes.
And

Speaker 2 we get that. And we've both been there before.
But

Speaker 2 you guys have done so much. How much money have you paid off in debt to this point?

Speaker 3 I'll say less of $18,000.

Speaker 2 Okay. And you did it in one fell swoop with the land sale?

Speaker 3 $1,000 on the vehicle already. All right, we lost you.
Are you there?

Speaker 2 Yeah, well, we are. We're not sure you were on that one.
We could hear you.

Speaker 3 I'm here.

Speaker 3 So we paid off $12,000 on the property and roughly $8,000 or $6,000 on the vehicle already. Good.
Okay.

Speaker 4 And what's your income?

Speaker 3 together?

Speaker 3 So I don't work. I'm a stay-at-home mom and the husband makes about $60,000 before taxes.

Speaker 2 All right. Tell us about the $39,000 car.
What is it worth if we were to sell it private sale?

Speaker 3 So we're underwater, roughly $10,000 on it right now.

Speaker 2 That's right. Well, that's the other reason why you wanted to dip into the retirement because that feels even worse once somebody's committed to something.

Speaker 4 So if I were in your shoes, what would happen?

Speaker 4 I mean, if you really wanted to get out of this fast, I'm not saying you have to do this, but if you really wanted to get out of it fast, you could say, okay, we're going to save up

Speaker 4 a quick 10,000 maybe and then get a loan for the other 10,000. So you get out of the car and then you have 10,000 to pay for a cash car.

Speaker 4 So now you have $10,000 of debt plus a $10,000 cash car. How quickly could you save up $10,000?

Speaker 3 I mean, probably within 10 months, 12 months.

Speaker 2 12 months to save up $10,000.

Speaker 4 I mean, with you guys side hustling, he picks up extra work. You're working at night.
You're doing something from home. I'm talking about when balls to the wall, how, how quickly could you do it?

Speaker 3 Aggressively, probably six months.

Speaker 4 Okay.

Speaker 4 This is, I, as, as excited as you were when you first called about getting rid of this and going to any extent, even, you know, pulling out retirement, I want that same energy on the side hustle to get the actual cash to do it because you guys can do this.

Speaker 4 And again, this is a suggestion because I thought you were super, super excited to get out of debt. If you think you can pay off the 40,000 here here quickly, it's going to take the same sacrifice.

Speaker 4 So it's just how quickly do you want to do it? Because if you have 40,000, that's going to be that much longer that you're going to be in that

Speaker 4 frame of mind of we're doing whatever we have to take, beans and rice, rice and beans, right? And that's not necessarily fun.

Speaker 3 So I was just trying to shorten it for you. And that's kind of where we're at.
We're only positive $600 a month. So

Speaker 3 we're putting that towards it. And then I'm working on getting a part-time job

Speaker 3 to work from home to help with that. So we'll be hopefully $1,100 positive a month.
And that's worth nothing extra. Great.

Speaker 4 Great. And your husband, he needs to kick it into high gear too.
And when I can,

Speaker 4 when we say scorched earth, high intensity,

Speaker 4 we really mean it, Sadie. Like, this is,

Speaker 4 this is,

Speaker 4 I kiss my husband in the morning and I might not see him until we're both sleep at night kind of thing.

Speaker 2 Yeah, I mean, we've had so many debt-free screams. You may have heard them on the show where people are working crazy hours.

Speaker 2 And, you know, just instead of the crazy hours, let's just throw a number out there. All right.
So let's say you guys generated an additional three grand a month

Speaker 2 and all three grand of it went to the car.

Speaker 3 We're out in a year.

Speaker 2 Now, I always like to oversimplify, but I don't think that's truly oversimplification. I'm just going, I'm giving you a number.

Speaker 4 Then you work backwards.

Speaker 2 And then you start going, well, if I got to work this many hours to get there, but it's like, what do we have to do, Sadie, you and your hubs,

Speaker 2 through selling more stuff and working like crazy? Can we generate three grand a month that we would put on the car? And in that case, we're out of it in 12 months. And we got a nice car.

Speaker 3 Great.

Speaker 2 I would go that route if it were me.

Speaker 2 Okay. And I'll tell you why, and I want Jade's take on this, but I've heard Dave say this.

Speaker 2 I've been on the show a day before, and he'll say something to the effect of, I like you paying this car off so that you get this whole debt payoff with the large swaths of selling something here and there while we fundamentally don't care.

Speaker 2 You don't feel it as much as when you're hustling.

Speaker 4 If it was a little cheaper, I might say that, but

Speaker 4 you guys making $60,000 and having a $40,000 car. That's too much, it's too much.
No question.

Speaker 4 And that for me, and the fact that you had another car that was, you know, $18,000 or whatever it was, $6,000,

Speaker 4 it's just you guys have too much for your income. And so that's why if I had to do it, I would sell the car and get something cheaper.

Speaker 4 Not saying that you have to stay in a $10,000 car forever, but after this debt is done, then you can save up another $5,000, get yourself into $15,000, right?

Speaker 4 Get something closer to $20,000, $25,000 that feels right.

Speaker 4 But I think that if you do my plan, you'll still get some of the medicine that Ken is talking about of the

Speaker 2 I gotta work.

Speaker 3 You gotta watch

Speaker 3 it.

Speaker 2 I am all for selling the car. But because it's the only debt they have i'm fine if they detack it too but i've i'm giving you a 12-month plan yeah on the car yeah uh and and you got to choose

Speaker 2 but

Speaker 3 it's going to be uncomfortable regardless yeah yep for sure yeah is your husband fully on board here oh 100 yeah he's he's listening to the show as we speak so okay okay game on game on yeah well there you go i mean you'll be surprised what you can get for ten thousand oh i love searching up cars Yeah.

Speaker 2 You know, and by the way, that's the quickest way to do it. Now, again, you got to go get the smaller loan.
That's the only time we're okay with that. But you're going to get out of debt faster.

Speaker 2 No question about it. So, yeah, appreciate the call.

Speaker 3 Good call. Good call.

Speaker 2 Explain the, I love this because, again, I always want to remember we have a lot of new people coming in. Yes.
Explain our ratio on car. Why did we say this was too much car based on their income?

Speaker 4 So the thing to remember about cars is we all need transportation, but cars go down in value. They're not going up.
And once they start going down in value, you feel that in your wallet.

Speaker 4 You feel that in your take-home. And so if you're making, you know, our rule of thumb is you shouldn't have more than 50% of your salary and things that are going down in value.

Speaker 4 So they make $60,000 a year. The max car they need is about $30,000 combined.
So each of them are driving a $15,000 Camry. That's basically what that looks like looks like.

Speaker 4 They've got a $40,000 car and then another vehicle that they paid off. So we already know more car than they need.
And I know, Ken, when we tell people to sell cars, it's like,

Speaker 4 what are you saying, Jade? But the truth is that car payment is keeping so many people from doing the things that they want to do and need to do with their money, like invest for the future.

Speaker 4 And so if you can get back your car payment, you are ahead of most Americans.

Speaker 4 If you can sell off your vehicle and if you're upside down, what we were telling them to do is go to the bank, or I don't care what kind of debt you get for the difference.

Speaker 4 It's if you're going down, it's good. If you're going from $40,000 to $6,000 because you got a $6,000 loan to cover the upside down portion so you could actually sell the vehicle, that is a win.

Speaker 4 That is a win.

Speaker 2 And while we're talking about this, this may not be a fun take for a lot of you, but when I hear a lot of Americans

Speaker 2 talk about how expensive it is to live, most of the time they're not looking inward for just a moment to go, what are our combined car payments?

Speaker 2 And with two car households, you're probably looking at $1,500 a month. Easy.
That would change their life if that wasn't there. So, just food for thought.

Speaker 2 Hey, remember this, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.